Last checked at 24 Sep 2015 07:00
METALS EXPLORATION PLC
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2015
Metals Exploration plc (AIM: MTL) ("Metals Exploration" or "the Company"), the natural resources exploration and development company with assets in the Pacific Rim region, is pleased to announce its interim results for the six months ended 30 June 2015.
Chairman's Statement
It is my pleasure to report the interim financial position of the Runruno Gold project which is on the cusp of commencement of commercial operations. The Process Plant construction phase is largely complete and as at 6 September it had been complete to 99.5% with only punch list, painting and some minor electrical activities outstanding. The Residual Storage Impoundment ("RSI") is complete to stage 1 with stage 2 expected to be finished in September 2015, the tailings return water pipeline is 90% complete, the tailings discharge pipe is around 70% complete. Staged commissioning of the processing plant was commenced in July with satisfactory progress achieved to date. These activities are continuing throughout September but are contingent upon receiving the requisite permits to occupy and operate.
The first gold pour and commencement of commercial operations could occur during October but are dependent on FCF Minerals Corporation ("FCF"), the Company's Philippine operating subsidiary, obtaining all necessary occupation and operating permits including those for the tailings pipelines and return water line. The applications for these permits along with a number of permits controlling the import, transport, storage and use of process consumables and additional permits covering operating commercial aspects of the Project have been made with the various Government Agencies responsible for regulating operations at Runruno. The outstanding permits are largely based on "as built" drawings issued following the completion of construction, standard operating procedures, equipment lists and installation reports followed by rigorous survey by the agencies verifying the veracity of the information provided. Several hundred permits are required to operate the Project. The Company does not expect any impediments to receiving the permits apart from time constraints.
The uncertainty surrounding the time taking to obtain all of the operational permits has made it difficult to forecast the cost at completion for the project or even the date of completion. The most recent forecast cost at completion is US $191.0m which is an overrun of US $8.2m against the original budget. Refer to Finances section below.
Process Plant and commissioning
By the end of August 2015 all areas of the Process Plant had been handed over to the commissioning team and low grade ore was successfully processed through the crushing circuit with the crushed ore being fed to the emergency stockpile.
The mill motors have been tested and the mill is now rotated regularly as part of the commissioning sequence. Lubrication piping was completed for the SAG mill and the mill electrical system testing and final installation carried out by the representatives of the vendor, CITIC. The mill liner plates have been fully installed.
Corrections to the Flotation cell rotor installation tolerances were carried out and all drives in the area have been tested.
Agitators in the neutralisation and BIOX® areas have been tested and are performing satisfactorily.
The commissioning of most of the specialist areas is being conducted under the direction of experienced consultants from the Plant and Infrastructure Engineering Group using representatives from the vendors' and FCF's own engineers. Commissioning is continuing through September leading to the commencement of operations on the issue of the required permits with no clear date when this exercise will complete.
Mini-Plant
Operation of the milling and flotation circuits and BIOX® inoculum build-up circuit have been performing very well producing the volume of concentrate required to support the build-up of bacteria stocks in readiness for the commissioning of the BIOX® circuit. The Mini Plant is also being used for training of the Process Plant operators and after commissioning it will be used for process improvement (optimisation) test work.
To date, 225 tonnes of ore have been milled in the mini-plant, and the operators are carrying out test work (flotation & toxicity) to determine the benefits of using a promoter to collect free gold during the flotation process in collaboration with the supplier's technical representative.
Other works include carrying out laboratory scale settling tests to determine the settling properties of the BIOX® product with flocculants supplied by various vendors. This involves dosage optimisation testing followed by slurry thickener simulation tests using the optimum dosage determined.
Residual Storage Impoundment
Construction of the RSI wall embankment to Stage 1 is now completed but Stage 2 has been delayed due to rain events which impede the compaction of the clay core to the required design standard. The current Stage 2 works have reached a height of 523 metres RL and are expected to achieve the design height of 527 metres RL during September. The existing pumping and spillway capacities are adequate for the lead-up to the wet season.
The tailings pipeline construction and permitting remains a critical path item for the project and its design has recently been exposed to intense scrutiny by the Mines and Geosciences Bureau (MGB) in the Philippines. The original design was to have both the discharge pipeline and the return water pipeline buried throughout its entire length. However, recent developments have disallowed this concept in favour of it being exposed and running along engineered benches but contained in a bund lined with a high density polyethylene liner. This reengineering also involved additional batter and slope stabilisation, establishment of run-off drains and inspection point works to be undertaken. The revised design for the tailings pipe line is further complicated as it requires bridges crossings across both the Sulong river and the Malilibeg creek. This work is very well advanced but has added cost and time to the overall completion of the construction phase of the Project.
RDCL, the Engineer of Record, continues to inspect the RSI works regularly and provides the necessary sign-off at each stage of preparation and construction.
Permitting
There are a number of key permits required to be obtained which will allow the Project to enter into commercial operations as follows:
1. Occupational permits
Occupancy permits are issued by the Local Government Unit (LGU) of the Municipality of Quezon and these are driven from the "as built" drawings. Individual permits are required for each separate structure comprising the Project with up to 20 different areas identified within the Processing Plant and in excess of 75 making up the entire project. Each application requires to be supported by multiple copies of the "as built" drawings in each of the architectural, civil, structural, electrical, mechanical and piping disciplines. Each copy of the drawings is signed by an independent discipline engineer and a director of FCF Minerals Corporation. Good progress has been made with all of the preparations completed and the documents lodged.
2. Permits to operate
These are issued by the MGB regional office (Region II) and driven from the"as built" drawings. Separate permits are required for every structure within the Processing Plant and all other operational areas of the Project wherein up to 60 separate areas have been identified. Multiple copies of the "as built" drawings identified in the occupancy permit requirement above are once again required but formatted in a different manner. In addition further information in the form of standard operating procedures, electrical and mechanical equipment lists by serial number and location and electrical and mechanical inspection and testing plans (QA/QC data) are required to be lodged in support of the application. Processing of the applications by the MGB has commenced with onsite verification surveys ongoing.
3. Permit to discharge
This permit is issued by the Environmental Management Bureau (EMB) Region II. It facilitates the discharge of water from the Project area subject to the satisfaction of a number of compliance criteria. When stage 1 of the RSI was completed the application for the discharge permit was lodged with the EMB. Verification of the application has been completed by the provincial EMB with the application endorsed positively to the national government EMB Region II for approval and issue of the permit. The Company has not yet received the discharge permit but expects to receive this before the end of September 2015.
4. Licence to purchase and licence to import regulated and controlled chemicals
This is issued by the central office of the Philippine National Police (PNP). The application for this licence was initiated in January of 2015 and had been endorsed from the Provincial PNP through the national PNP Region II to its Head Office for approval and issue. A temporary permit until 31 October 2015 has been issued to purchase and import the required chemicals while the permanent application is determined. Under the temporary permit there is a further requirement to apply for a permit to unload the identified chemicals.
5. Business permits
These are routinely processed and applied for and sometimes retrospectively whenever the Company becomes aware of additional requirements and new or changed rules and regulations. Several of these require a number of site inspections or audits as required by the various agencies as a component of processing the applications.
Mine
The mine has been established and ore exposed in the pit floor in readiness for operations to commence. Regular geotechnical monitoring of the cut and formed slopes within the mine and Residual Storage Impoundment ("RSI") has been undertaken which has confirmed the stability of the work undertaken.
Reverse circulation ("RC") confirmation grade control drilling has commenced within the stage 1.5 central zone of the mine pit, above the existing resource block model levels. Low and medium grade ore from outside the ore-reserve blocks from within this area has been delivered to the run-of-mine ("ROM") pad to be used for commissioning purposes. There are approximately 59,000 tonnes of ore at an average grade of 1.0 gramme per tonne of gold currently stockpiled on the ROM pad.
Environmental rehabilitation has been actively integrated into the Project works with final formed and where ever possible cut slopes routinely planted with endemic grasses and tree species. Outside the mine area the Company maintains a number of additional environmental rehabilitation programs in degraded areas outside but surrounding the Project footprint.
Finances
As at the end of August 2015 a summary of the capital expenditure costs of the Project is as follows:
| Budget | Expenditure to date | Forecast at completion |
| US $ | US $ | US $ |
Mining | $19,703,614 | $18,321,190 | $18,324,176 |
Process Plant | $80,801,822 | $80,188,870 | $83,610,655 |
Residual Storage Impoundment | $12,240,028 | $22,344,855 | $23,282,803 |
On-site infrastructure | $14,526,276 | $13,650,215 | $13,774,397 |
Off-site infrastructure | $5,069,940 | $3,786,203 | $3,786,203 |
Indirect costs | $10,413,578 | $10,939,340 | $12,572,547 |
Owners costs | $23,006,717 | $27,998,000 | $28,749,187 |
VAT contingency | $4,690,923 | $6,902,323 | $6,927,323 |
Project contingency | $12,311,102 | $0 | $0 |
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Project related costs | $182,764,000 | $184,130,996 | $191,027,291 |
Cash held by the Group at the end of August was £10.7 million (US$16.5 million), including £1.5 million (US$2.3 million) held under the project finance debt facility to cover the Debt Service Reserve Account and £3.9 million (US$6.0 million) for the Operational Expenses Reserve Account ("Opex"). The VAT contingency covers the VAT payments under protest made by FCF Minerals Corporation for imported capital equipment.
The delays encountered to the project transitioning into commercial operations have had an impact on the Company's ability to generate cash flow in 2015. It was expected the plant would be operational by June 2015 and this would provide six months operational cash flow sufficient to be able to pay the June 2015 and December 2015 interest payments and the December 2015 first capital repayment amount of US $13 million. It is highly unlikely the plant will be operational before 1 October 2015 and as at 22 September 2015 the company has insufficient funds to make any further financial commitments. The Lenders have agreed to make the Company's Opex account available if it is required, so that the Company does not enter into a trading insolvent position and until equity funds from a planned share issue have been received from the shareholders. The Opex account has been funded to its maximum requirement of US $6 million by the Company. If the Opex account has been utilised for this eventuality the Company is committed to returning the account balance back to US $6 million from cash available from the equity share issue proceeds.
The Company became aware of the possibility of a cash shortfall in early July 2015 and subsequently began negotiations with its major shareholders and the current lending banks to source additional funds and restructure the first capital repayment. The discussions with the banks are ongoing however are progressed sufficiently for a term sheet to be issued and documentation has commenced. The lenders have agreed to a reschedule of the first capital repayment as follows:
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| CAPITAL REPAYMENT SCHEDULE |
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| Calculation date | Original repayment schedule | Revised repayment Schedule |
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| US $ | US $ |
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| Dec-15 | $13,000,000 |
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| Mar-16 |
| $2,000,000 |
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| Jun-16 | $13,000,000 | $15,000,000 |
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| Dec-16 | $13,000,000 | $15,000,000 |
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| Jun-17 | $13,000,000 | $15,000,000 |
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| Dec-17 | $8,000,000 | $13,000,000 |
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| Jun-18 | $8,000,000 | $8,000,000 |
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| Dec-18 | $7,000,000 | $7,000,000 |
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| $75,000,000 | $75,000,000 |
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The cost of rescheduling comprises a covenant breach penalty and rescheduling fee capped at US $1.25 million payable as follows:
· US $400k on signing revised documentation
· US $850k in additional interest commencing after signing documentation
The lenders include a 100% cash sweep to return the repayment schedule back to normal as soon as possible. The rescheduling agreement is premised upon the Share Placement and Debt Securities, detailed below, being executed successfully and the Company entering commercial production by 1 December 2015 at the latest.
Following negotiations with the major shareholders the following agreed and proposed shareholder financial support has been announced through the Regulatory News Service by the Company on 18 September 2015:
1. Certain existing shareholders have committed to raise US$5.0 million via the issue of a total of 108,033,333 new ordinary shares of 1.0 penny at a price of 3.0 pence per new ordinary share ("Placing").
2. Plans to make available a maximum of 100 million ordinary shares of 1.0 pence each by way of an open offer to its shareholders. The respective shareholders participating in the Placing have each agreed to provide an irrevocable undertaking not to take up their respective rights under this open offer.
Final discussions are underway to receive commitments from certain shareholders to raise up to a further US$5.0 million for working capital and contingency purposes by way of the creation and issue of debt securities. These discussions with the banks and equity and debt raisings will provide sufficient funds to take the company through the permitting process and into commercial operations.
Ian Holzberger
Executive Chairman
CONDENSED CONSOLIDATED STATEMENT OF TOTAL COMPREHENSIVE INCOME for the six months ended 30 June 2015
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| 6 month period ended 30 June 2015 | 6 month period ended 30 June 2014 | Year ended 31 December 2014 |
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| (unaudited) | (unaudited) | (audited) |
| Note | £ | £ | £ |
Continuing operations |
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|
Revenue |
| - | - | - |
Cost of sales |
| - | - | - |
|
| ----- | ----- | ----- |
Gross loss |
| - | - | - |
Administrative expenses |
| (3,002,872) | (3,337,821) | (6,784,385) |
|
| ----- | ----- | ----- |
Operating loss |
| (3,002,872) | (3,337,821) | (6,784,385) |
Finance income |
| 281 | 29,995 | 33,400 |
Finance costs |
| (7,487) | (9,447) | (26,829) |
Share of losses of associates |
| (15,252) | (46,909) | (62,668) |
Fair value gain/ (losses) on forward sales contracts |
|
1,769,956 |
(3,123,421) |
3,974,040 |
Fair value loss on interest rate swaps |
| (23,778) | - | (154,819) |
|
| ----- | ----- | ----- |
Losses before tax |
| (1,279,152) | (6,487,603) | (3,021,261) |
Taxation |
| (666,326) | 937,026 | (1,752,181) |
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| ----- | ----- | ----- |
Loss for the period |
| (1,945,478) | (5,550,577) | (4,773,442) |
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| ----- | ----- | ----- |
Other comprehensive income: |
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Exchange differences on translating foreign operations |
3 |
(2,695,317) |
(1,558,862) |
6,056,858 |
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| ----- | ----- | ----- |
Total comprehensive loss for the period |
| (4,640,795) | (7,109,439) | 1,283,416 |
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| ----- | ----- | ----- |
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| ----- | ----- | ----- |
Loss for the period attributable to equity holders of the parent |
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(1,945,478) |
(5,550,577) |
(4,773,442) |
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| ----- | ----- | ----- |
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| ----- | ----- | ----- |
Total comprehensive loss attributable to equity holders of the parent |
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(4,640,795) |
(7,109,439) |
1,283,416 |
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| ----- | ----- | ----- |
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Loss per share: |
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Basic and diluted | 5 | (0.141)p | (0. 404)p | (0.347)p |
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| ----- | ----- | ----- |
CONDENSED CONSOLIDATED INTERIM BALANCE SHEET
as at 30 June 2015
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| As at 30 June 2015 | As at 30 June 2014 | As at 31 December 2014 |
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| (unaudited) | (unaudited) | (audited) |
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| £ | £ | £ |
Non-current assets |
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Property, plant and equipment |
| 131,437,484 | 82,919,511 | 114,929,223 |
Goodwill |
| 1,010,816 | 1,010,816 | 1,010,816 |
Other intangible assets |
| 6,994,871 | 6,995,449 | 7,460,210 |
Investment in associate companies |
| 108,935 | 139,946 | 124,187 |
Trade and other receivables |
| 1,847,441 | 1,633,675 | 1,818,508 |
Deferred tax asset |
| - | 937,026 | - |
Derivative asset |
| 4,170,473 | - | 3,717,266 |
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| ----- | ----- | ----- |
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| 145,570,020 | 93,636,423 | 129,060,210 |
Current assets |
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Derivative asset |
| 1,615,250 | - | 462,581 |
Trade and other receivables |
| 1,088,079 | 1,384,513 | 1,172,991 |
Cash and cash equivalents |
| 10,352,286 | 22,249,390 | 12,251,994 |
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| ----- | ----- | ----- |
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| 13,055,615 | 23,633,903 | 13,887,566 |
Current liabilities |
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Trade and other payables |
| (4,036,088) | (3,699,514) | (4,298,510) |
Loans - current portion |
| (16,542,913) | - | (8,376,668) |
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| ----- | ----- | ----- |
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| (20,579,001) | (3,699,514) | (12,675,178) |
Non-current liabilities |
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Long-term borrowings |
| (31,177,028) | (11,190,271) | (19,330,771) |
Derivative financial liabilities |
| (182,207) | (3,123,421) | (162,837) |
Deferred tax liabilities |
| (2,441,912) | - | (1,866,624) |
Provision for mine rehabilitations |
| (1,236,307) | - | (1,262,391) |
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| ----- | ----- | ----- |
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| (35,037,454) | (14,313,692) | (22,622,623) |
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| ----- | ----- | ----- |
Net assets |
| 103,009,180 | 99,257,120 | 107,649,975 |
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| ----- | ----- | ----- |
Equity |
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Share capital |
| 13,749,721 | 13,749,721 | 13,749,721 |
Share premium account |
| 124,591,071 | 124,591,071 | 124,591,071 |
Shares to be issued reserve |
| 3,652,155 | 3,652,155 | 3,652,155 |
Acquisition of non-controlling interest reserve |
| (3,785,077) | (3,785,077) | (3,785,077) |
Translation reserve |
| 657,257 | (4,263,146) | 3,352,574 |
Profit and loss account |
| (35,855,947) | (34,687,604) | (33,910,469) |
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| ----- | ----- | ----- |
Equity attributable to equity holders of the parent |
| 103,009,180 | 99,257,120 | 107,649,975 |
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| ----- | ----- | ----- |
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY for the six months ended 30 June 2015
| Share capital | Share premium account | Shares to be issued reserve | Translation reserve | Acquisition of non-controlling interest reserve | Profit and loss account | Total equity |
| £ | £ | £ | £ | £ | £ | £ |
Balance as at 1 January 2015 | 13,749,721 | 124,591,071 | 3,652,155 | 3,352,574 | (3,785,077) | (33,910,469) | 107,649,975 |
Exchange differences on translating foreign operations |
- |
- |
- |
(2,695,317) |
- |
- |
(2,695,317) |
Loss for the period | - | - | - | - | - | (1,945,478) | (1,945,478) |
| ---- | ---- | ---- | ---- | ---- | ---- | ---- |
Total comprehensive loss for the period |
- |
- |
- |
(2,695,317) |
- |
(1,945,478) |
(4,640,795) |
| ---- | ---- | ---- | ---- | ---- | ---- | ---- |
Balance as at 30 June 2015 (unaudited) | 13,749,721 | 124,591,071 | 3,652,155 | 657,257 | (3,785,077) | (35,855,947) | 103,009,180 |
| ---- | ---- | ---- | ---- | ---- | ---- | ---- |
Equity is the aggregate of the following:
· Share capital; being the nominal value of shares issued.
· Share premium account; being the excess received over the nominal value of shares issued less direct issue costs.
· Shares to be issued reserve; being the credit side of the entry relating to the expense recognised in the income statement for share based remuneration.
· Translation reserve; being the foreign exchange differences on the translation of foreign subsidiaries.
· Acquisition of non-controlling interests reserve; being an acquisition of 15% of FCF Minerals Corporation's shares after previous acquisitions which had provided the Group with control of the board of the subsidiary company.
· Profit and loss account; being the cumulative loss attributable to equity shareholders.
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY for the six months ended 30 June 2014
| Share capital | Share premium account | Shares to be issued reserve | Translation reserve | Acquisition of non-controlling interest reserve | Profit and loss account | Total equity | |||||||
| £ | £ | £ | £ | £ | £ | £ | |||||||
Balance as at 1 January 2014 | 13,749,721 | 124,591,071 | 3,652,155 | (2,704,284) | (3,785,077) | (29,137,027) |
106,366,559 | |||||||
Exchange differences on translating foreign operations |
- |
- |
- |
(1,558,862) |
- |
- |
(1,558,862) | |||||||
Loss for the year | - | - | - | - | - | (5,550,577) | (5,550,577) | |||||||
| ---- | ---- | ---- | ---- | ---- | ---- | ---- | |||||||
Total comprehensive gain/(loss) for the period |
- |
- |
- |
(1,558,862) |
- |
(5,550,577) |
(7,109,439) | |||||||
| ---- | ---- | ---- | ---- | ---- | ---- | ---- | |||||||
Balance as at 30 June 2014 (unaudited) | 13,749,721 | 124,591,071 | 3,652,155 | (4,263,146) | (3,785,077) | (34,687,604) | 99,257,120 | |||||||
| ---- | ---- | ---- | ---- | ---- | ---- | ---- | |||||||
Equity is the aggregate of the following:
· Share capital; being the nominal value of shares issued.
· Share premium account; being the excess received over the nominal value of shares issued less direct issue costs.
· Shares to be issued reserve; being the credit side of the entry relating to the expense recognised in the income statement for share based remuneration.
· Translation reserve; being the foreign exchange differences on the translation of foreign subsidiaries.
· Acquisition of non-controlling interests reserve; being an acquisition of 15% of FCF Minerals Corporation's shares after previous acquisitions which had provided the Group with control of the board of the subsidiary company.
· Profit and loss account; being the cumulative loss attributable to equity shareholders.
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY for the year ended 31 DECEMBER 2014
| Share capital | Share premium account | Shares to be issued reserve | Translation reserve | Acquisition of non-controlling interest reserve | Profit and loss account |
| Total equity |
| £ | £ | £ | £ | £ | £ |
| £ |
Balance as at 1 January 2014 |
13,749,721 |
124,591,071 |
3,652,155 |
(2,704,284) |
(3,785,077) |
(29,137,027) |
|
106,366,559 |
Exchange differences on translating foreign operations |
- |
- |
- |
6,056,858 |
- |
- |
|
6,056,858 |
Loss for the year | - | - | - | - | - | (4,773,442) |
| (4,773,442) |
| --- | --- | --- | --- | --- | --- |
| ---- |
Total comprehensive loss for the year |
- |
- |
- |
6,056,858 |
- |
(4,773,442) |
|
1,283,416 |
| --- | --- | --- | --- | --- | --- |
| ---- |
Balance as at 31 December 2014 | 13,749,721 | 124,591,071 | 3,652,155 | 3,352,574 | (3,785,077) | (33,910,469) |
| 107,649,975 |
| --- | --- | --- | --- | --- | --- |
| ---- |
Equity is the aggregate of the following:
· Share capital; being the nominal value of shares issued.
· Share premium account; being the excess received over the nominal value of shares issued less direct issue costs.
· Shares to be issued reserve; being the credit side of the entry relating to the expense recognised in the income statement for share based remuneration.
· Translation reserve; being the foreign exchange differences on the translation of foreign subsidiaries.
· Acquisition of non-controlling interest reserve; being an acquisition of 15% of FCF Minerals Corporation's shares after previous acquisitions which had provided the Group with control of the board of the subsidiary company.
· Profit and loss account; being the cumulative loss attributable to equity shareholders.
CONDENSED CONSOLIDATED INTERIM CASH FLOW STATEMENT for the period ended 30 June 2015
| 6 month period ended 30 June 2015 | 6 month period ended 30 June 2014 | Year ended 31 December 2014 |
| (unaudited) | (unaudited) | (audited) |
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Loss before taxation | (1,279,152) | (6,487,603) | (3,021,261) |
Fair value (gains)/ loss on forward sales contracts | (1,769,956) | 3,123,421 | (3,974,040) |
Fair value loss on interest rate swaps | 23,778 | - | 154,819 |
Impairment | 293,705 | - | - |
Depreciation | 1,091,621 | 1,027,881 | 1,742,854 |
Amortisation | 37,579 | 21,917 | 62,244 |
Share of losses of associates | 15,252 | 46,909 | 62,668 |
Net interest payable/ (receivable) | 7,206 | (29,995) | (6,571) |
Decrease/ (increase) in receivables | 55,979 | 601,697 | (382,448) |
(Decrease)/ increase in payables | (262,422) | (1,403,300) | 1,148,821 |
| ----- | ----- | ----- |
Cash used in operations | (1,786,410) | (292,473) | (4,212,914) |
Interest received | 281 | 29,995 | 33,400 |
Interest paid | (7,487) | - | (26,829) |
| ----- | ----- | ----- |
Net cash used in operating activities | (1,793,616) | (262,478) | (4,206,343) |
| ----- | ----- | ----- |
Investing activities |
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Purchase of intangible assets | (20,092) | (320,589) | (340,776) |
Purchase of property, plant and equipment | (19,974,764) | (19,994,949) | (44,962,271) |
Investment in associates | - | (132,427) | (132,427) |
| ----- | ----- | ----- |
Net cash used in investing activities | (19,994,856) | (20,447,965) | (45,435,474) |
| ----- | ----- | ----- |
Financing activities |
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Proceeds from borrowings | 20,012,502 | 11,190,271 | 27,707,439 |
| ----- | ----- | ----- |
Net cash from financing activities | 20,012,502 | 11,190,271 | 27,707,439 |
| ----- | ----- | ----- |
Net decrease in cash and cash equivalents |
(1,775,970) |
(9,520,172) |
(21,934,378) |
Cash and cash equivalents at beginning of period | 12,251,994 | 31,947,096 | 31,947,096 |
Foreign exchange differences | (123,738) | (177,534) | 2,239,276 |
| ----- | ----- | ----- |
Cash and cash equivalents at end of period | 10,352,286 | 22,249,390 | 12,251,994 |
| ----- | ----- | ----- |
Notes to the condensed consolidated interim financial statements
1. General information
Metals Exploration plc is the parent company of the Group. Its shares are listed on the AIM market of the London Stock Exchange. The registered address of Metals Exploration plc is 200 Strand, London, WC2R 1DJ.
These condensed consolidated interim financial statements were approved by the Board of Directors on 23 September, 2015.
The results for the year ended 31 December 2014 have been audited whilst the results for the six months ended 30 June 2014 and 30 June 2015 are unaudited.
The financial information set out in this interim report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The Group's statutory accounts for the year ended 31 December 2014 which were prepared under International Financial Reporting Standards ("IFRS") as adopted for use in the European Union, were filed with the Registrar of Companies. The auditors reported on these accounts, their report was unqualified and did not include reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain any statements under Section 498 (2) or Section 498 (3) of the Companies Act 2006.
2. Basis of preparation
These condensed consolidated interim financial statements are for the six month period ended 30 June 2015. They have been prepared in accordance with IFRS as adopted for use in the European Union with the exception of IAS 34: Interim Financial Reporting. IFRS is subject to amendment and interpretation by the International Accounting Standards Board ("IASB") and the IFRS Interpretations Committee and there is an ongoing process of review and endorsement by the European Commission. The financial information has been prepared on the basis of IFRS that the Board of Directors expect to be applicable as at 31 December 2015.
These condensed consolidated interim financial statements have been prepared under the historical cost convention, except for the revaluation of certain financial instruments.
3. Hedging
Under the terms of the debt financing facility FCF Minerals Corporation, a wholly owned subsidiary of the Company, entered into two hedging arrangements with each of the facility banks: an interest rate hedge for approximately 40% of the interest exposure; and a gold forward sales programme representing a total of 90,000 ounces of gold. The movement in fair value of these derivative financial instruments is charged to the condensed consolidated statement of total comprehensive income and derivative financial assets and liabilities recognised on the condensed consolidated balance sheet. The Group has elected not to apply hedge accounting.
4. Loss per share
The loss per share was calculated on the basis of net loss attributable to equity shareholders divided by the weighted average number of ordinary shares.
| 6 month period ended 30 June 2015 | 6 month period ended 30 June 2014 | Year ended 31 December 2014 |
| (unaudited) | (unaudited) | (audited) |
| £ | £ | £ |
Loss |
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Net loss attributable to equity shareholders for the purpose of basic and diluted loss per share |
(1,945,478) |
(5,550,577) |
(4,773,442) |
| ----- | ----- | ----- |
Number of shares |
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Weighted average number of ordinary shares for the purpose of basic and diluted loss per share |
1,374,972,025 |
1,374,972,025 |
1,374,972,025 |
| ----- | ----- | ----- |
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Basic and diluted loss per share | (0.141)p | (0.404)p | (0.347)p |
| ----- | ----- | ----- |
The basic and diluted loss per share is the same, as the exercise of staff share options and warrants would reduce the loss per share and therefore, are anti-dilutive.
5. Capital Commitments
As at 30 June 2015 the Group had £3,463,304 of outstanding capital commitments (30 June 2014: £14,590,000).
6. Subsequent Events
The Company has announced that is has obtained commitments from certain existing shareholders to raise US$5.0 million via an issue of a total of 108,033,333 new ordinary shares of 1.0 penny each at a price of 3.0 pence per new ordinary share. It has also announced that it plans to make available a maximum of 100 million new ordinary shares as an open offer to its shareholders at a price of 3.0 pence per ordinary share. Additionally the Company has announced that it is in final discussions with certain shareholders to receive commitments to raise up to a further US$5.0 million for working capital and contingency purposes by way of creation and issue of debt securities.
For further information please visit: www.metalsexploration.com or contact:
Metals Exploration PLC info@metalsexploration.com
Metals Exploration PLC | info@metalsexploration.com |
| Nominated Adviser |
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| Westhouse Securities Ltd |
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Ian R. Holzberger | +63 (0) 9189 795 992 |
| Robert Findley, Alastair Stratton, David Coaten | +44 (0) 207 601 6100 |
(Chairman) | +61 (0) 418 886 165 |
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| Public Relations |
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Liam A. Ruddy | +61 (0) 498 648 615 |
| Tavistock |
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(Company Secretary) | +44 (0) 7911 719 960 |
| Edward Portman; Jos Simson | +44 (0) 207 920 3150 |
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| Broker |
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| SP Angel Corporate Finance LLP |
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| Ewan Leggat; | +44 (0) 203 470 0470 |
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