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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Amara Ming | LSE:AMA | London | Ordinary Share | GB00B04M1L91 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 17.25 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMAMA
RNS Number : 7627V
Amara Mining PLC
12 August 2015
12 August 2015 AIM: AMA
Amara Mining plc
(with its subsidiaries, "Amara" or "the Group")
H1 RESULTS 2015
Amara, the AIM-listed West African-focused gold exploration/development group, is pleased to announce an update for the half year ended 30 June 2015 ("H1 2015").
HIGHLIGHTS
-- Maiden Mineral Reserve reported of 2.7Moz (70.4Mt at 1.18g/t) for Yaoure Gold Project ("Yaoure") as part of Pre-Feasibility Study ("PFS"), underlining the economic viability of this large scale deposit
-- Optimisation work is underway to further improve Yaoure's economics. Initial results demonstrate opportunities to:
o Increase the head grade of the Mineral Reserve through the selective mining of the higher grade CMA zone
o Decrease Yaoure's upfront capital cost through reducing the size of the mining fleet and the size of the plant and removing the need for pre-stripping
-- 12,000 metre drilling programme underway in the Yaoure Central zone to upgrade a portion of the remaining Inferred resources to the higher confidence Indicated category and to improve continuity within higher grade areas - Mineral Resource update expected Q4 2015
-- Application for mining exploitation licence for Yaoure lodged with the government of Côte d'Ivoire, including the submission of the Environment and Social Impact Assessment ("ESIA")
-- New 206km(2) exploration licence called Yaoure East obtained to the east of the current Yaoure exploration licence area
-- Second strong growth opportunity in Baomahun Gold Project ("Baomahun") - potential to be a compelling second project for Amara, assisting the Group in its goal of becoming a mid-tier producer
-- Cash as at 30 June 2015 of US$13.6 million following successful placing to raise US$21 million (net of costs) in January 2015
Hot Features
Premium
-- Amara remains well funded to advance the Bankable Feasibility Study ("BFS")
John McGloin, Chairman and Chief Executive Officer of Amara, commented:
"H1 2015 has been an important period for Amara as we have reported a maiden Mineral Reserve for Yaoure as part of the PFS and increased the project's resources to 6.8 million ounces. Although recent weeks have been challenging for the gold sector, we continue to advance Yaoure along its development path and remain fully-funded to do this. Our focus in H2 2015 is to progress our understanding of the optimisation opportunities identified by the PFS, which include increasing the head grade of the CMA zone through selective mining and reducing the upfront capital cost. Drilling is also underway to further improve our understanding of the Yaoure Central zone, which is expected to strengthen the overall economics of the project. I look forward to updating the market on Yaoure's progress over the coming months."
For more information please contact:
Amara Mining plc
John McGloin, Chairman and Chief
Executive Officer
Pete Gardner, Finance Director
Katharine Sutton, Head of Investor +44 (0)20 7398
Relations 1420
Peel Hunt LLP
(Nominated Adviser & Joint Broker)
Matthew Armitt +44 (0)20 7418
Ross Allister 8900
GMP Securities Europe LLP
(Joint Broker)
Richard Greenfield +44 (0)20 7647
Alex Carse 2800
Farm Street Communications
(Media Relations) +44 (0)7593 340
Simon Robinson 107
About Amara Mining plc
Amara is a gold explorer/developer with assets in West Africa. The Group is focused on unlocking the value in its development projects. At Yaoure in Côte d'Ivoire, this will be done by increasing the confidence in the existing Mineral Resource and economics at the project as Amara progresses it through to Bankable Feasibility Study. At Baomahun, this will be achieved by gaining an improved understanding of the exploration upside potential and underground opportunity. Amara aims to further increase its production profile with highly prospective opportunities across both assets.
OPERATIONAL REVIEW
YAOURE GOLD PROJECT, CÔTE D'IVOIRE
Yaoure has the potential to be one of the largest gold mines in Africa. With 6.8 million ounces of Mineral Resources (4.4 million ounces Indicated and 2.6 million ounces Inferred), Yaoure is the largest undeveloped gold project in West Africa.
Classification Tonnes (Mt) Grade (g/t) Gold (Moz)
---------- ---------------- ------------ ------------ -----------
RESERVES calculated at US$975/oz
Open pit Probable 70.4 1.18 2.7
---------- ---------------- ------------ ------------ -----------
RESOURCES calculated at US$1,500/oz
Open pit Indicated 106.3 1.29 4.4
Inferred 63.0 1.19 2.4
--------------------------- ------------ ------------ -----------
Notes to Mineral Reserve table
1. Canadian Institute of Mining and Metallurgy and Petroleum ("CIM") definitions were used for Mineral Reserves
2. The Mineral Reserve was estimated by the contents of a resource block model within a pit design. This design was based on an optimisation, in which only indicated Resources were enabled. The optimised shell selected corresponded to a gold price of US$975/oz.
3. The Mineral Reserve is reported at a cut-off grade of 0.33 g/t Au. This cut-off has been derived from the breakeven level corresponding to a gold price of US$1,250/oz.
4. A mining loss factor of 10% has been applied. Dilution has already been applied in the generation of bulk mining blocks in the resource model, measuring 12.5m x 12.5m x 10m.
5. The Mineral Reserves were estimated based on the NI 43-101 Mineral Resources, both effective as of 5 January 2015.
6. A 90.1% metallurgical gold recovery was used.
Notes to Mineral Resource table
1. The effective date of the Yaoure Mineral Resource estimate is 5 January 2015, prepared by Mario E Rossi, GeoSystems International, Inc. Pit optimisation work for this was completed by A. Wheeler.
2. The gold price used in the Mineral Resource estimate is US$1,500 per ounce, assuming an open pit mining scenario, processing via tank leaching. Pit slopes are 44 in oxide, 53 in sulphide. Recoveries have been assumed at 90%.
3. Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability.
4. There are no known environmental, permitting, legal, title, taxation, socio-economic, marketing, and political or other relevant issues that may materially affect the resource estimates.
5. Totals and average grades are subject to rounding to the appropriate precision and some columns or rows may not compute exactly as shown.
6. The stated resources include dilution in the block model that relates to the level of low selectivity envisioned in an open pit operation, assuming 10m bench heights.
Pre-Feasibility Study Delivered
Amara completed a PFS for Yaoure in Q2 2015, which delivered large scale production at low operating costs[i]. It is one of the few development projects in West Africa that has the potential to deliver production of over 200,000 ounces over a 10 year life of mine. The Group also demonstrated further upside at Yaoure in a scenario based on PFS parameters, but including Inferred Mineral Resources, named the Measured, Indicated and Inferred scenario ("MII scenario"). Importantly, the key metrics of the MII Scenario are largely in line with the compelling Preliminary Economic Assessment ("PEA") that was delivered in March 2014.
Key Parameters of PFS and MII Scenario
Parameters Unit PFS MII Scenario PEA 6.5Mtpa
Scenario
--------------------------- ------------- -------- ------------ -----------
Mining
--------------------------- ------------- -------- ------------ -----------
Ore mined Mt 70.4 66.6 63.9
--------------------------- ------------- -------- ------------ -----------
Waste mined Mt 318.2 220.6 314.0
--------------------------- ------------- -------- ------------ -----------
Strip ratio waste:ore 4.5:1 3.3:1 4.9:1
--------------------------- ------------- -------- ------------ -----------
Contained gold koz 2,663 2,766 3,140
--------------------------- ------------- -------- ------------ -----------
Open pit mine life years 11 10 10
--------------------------- ------------- -------- ------------ -----------
Processing
--------------------------- ------------- -------- ------------ -----------
Processing plant
capacity Mtpa 6.5 6.5 6.5
--------------------------- ------------- -------- ------------ -----------
Average head grade
processed in years
1-4 g/t 1.56 1.74 1.45
--------------------------- ------------- -------- ------------ -----------
Average head grade
processed g/t 1.18 1.29 1.53
--------------------------- ------------- -------- ------------ -----------
Average gold recovery
rate % 90.1 90.2 95.2
--------------------------- ------------- -------- ------------ -----------
Average annual production
over life of mine ounces 218,000 247,000 279,000
--------------------------- ------------- -------- ------------ -----------
Average annual production
in years 1-4 ounces 291,000 323,000 258,000
--------------------------- ------------- -------- ------------ -----------
Capital costs
--------------------------- ------------- -------- ------------ -----------
Plant and infrastructure
capital cost US$ million 254 254 244
--------------------------- ------------- -------- ------------ -----------
Mining fleet US$ million 107 107 75
--------------------------- ------------- -------- ------------ -----------
Pre-stripping US$ million 33 33 -
--------------------------- ------------- -------- ------------ -----------
Contingency US$ million 53 53 38
--------------------------- ------------- -------- ------------ -----------
Total pre-production
capital cost US$ million 447 447 357
--------------------------- ------------- -------- ------------ -----------
Total capital payback
period years 3.0 2.3 2.6
--------------------------- ------------- -------- ------------ -----------
Operating costs
--------------------------- ------------- -------- ------------ -----------
Total cash costs
(including royalties) US$/oz 739 608 594
--------------------------- ------------- -------- ------------ -----------
All-in sustaining
costs US$/oz 782 648 624
--------------------------- ------------- -------- ------------ -----------
Yaoure's location is highly advantageous for developing a large-scale gold mine due to its access to low-cost grid power and abundant water. It is situated 40km from a dual carriageway linking the political capital of Yamoussoukro with the commercial capital of Abidjan. As a brownfield site, Yaoure is low risk as there is no requirement to relocate any dwellings, which is a significant advantage compared to many of the project's peers.
Optimisation Opportunities
Following the PFS, a number of optimisation opportunities have been identified and are being assessed with the objective of increasing the overall head grade and reducing the upfront capital cost, which are as follows:
-- Utilising a selective mining approach for the CMA zone - together with bulk mining for the Yaoure Central zone, this would increase the overall grade going to the plant as the impact of dilution would be reduced
-- Utilising a smaller processing plant - the higher grade and therefore smaller volumes of ore from the CMA zone would reduce the overall throughput of the processing plant and lower the upfront capital cost, potentially delivering a stronger internal rate of return
-- Employing staged development - this would deliver a reduced upfront capital requirement, which may be more palatable for a company of Amara's size given the current challenging market conditions
-- Removing the need for pre-stripping and the associated capital cost by commencing mining in the Yaoure Central zone - pit floor mapping, historic rip line data and reverse circulation ("RC") drilling indicate that it may be possible to commence mining in a higher grade pod of ore at surface in the Yaoure Central zone rather than commencing mining in the CMA zone. Part of the current drilling campaign is aimed at better defining this higher grade ore at surface in the Yaoure Central zone
-- Reducing the mining fleet - through reviewing the mining schedule and reducing the pre-strip, together with the selective mining approach, it may be possible to decrease the upfront capital requirements for the mining fleet
Next Steps
Exploration at Yaoure
In conjunction with progressing the optimisation opportunities, a 12,000 metre drilling campaign commenced in April 2015 in the Yaoure Central zone. The programme has two key objectives:
-- To upgrade a portion of the remaining Inferred ounces to the higher confidence Indicated category, which is expected to allow Amara to deliver a BFS in-line with the original PEA
-- To increase continuity within the higher grade areas to strengthen the economics of the Mineral Reserve within the Yaoure Central zone and confirm the potential to commence mining in this area, supported by the historic RC drilling and rip line data
Following this drilling programme, Amara will report a Mineral Resource update in Q4 2015.
In terms of the wider exploration licence area, Amara has embarked on a regional target generation programme, initially utilising geophysics and soil geochemistry. The Yaoure resource area is contained in only a small portion of Amara's total exploration licences and soil geochemistry and structural mapping have identified other areas similar to the resource area. Through further geological mapping, trenching and soil sampling, Amara intends to identify drilling targets with the potential to deliver satellite deposits for Yaoure.
Environmental licence and exploitation licence
Amara's Ivorian subsidiary, Amara Mining Côte d'Ivoire SARL ("AMCDI") submitted its application for an exploitation (mining) licence to the government of Côte d'Ivoire in early August 2015, which included an ESIA for Yaoure. The Group expects to receive both its environmental licence and its mining licence by the end of H1 2016.
New licence area obtained
The Department of Mines and Geology within the government of Côte d'Ivoire has granted Amara a new 206km(2) exploration licence area to the east of the current Yaoure licence area. Amara believes that Côte d'Ivoire is one of the most prospective countries in West Africa and significant exploration upside potential exists as Côte d'Ivoire is largely under-explored.
BAOMAHUN GOLD PROJECT, SIERRA LEONE
Baomahun is a feasibility stage, Archean-age gold project in central Sierra Leone, with a high grade core and grades that strengthen at depth. With 1.21 million ounces of Probable Reserves (23.27Mt at 1.62g/t) and Mineral Resources of 2.24 million Indicated ounces (38.4Mt at 1.81g/t) and 0.54 million Inferred ounces (6.6Mt at 2.2g/t), it forms a second strong growth opportunity for Amara.
Baomahun Mineral Reserves and Mineral Resources, both as of 19 November 2012
Classification Tonnes (Mt) Grade (g/t) Gold (Moz)
------------- ---------------- ------------ ------------ -----------
RESERVES
Open Pit Probable 23.27 1.62 1.21
------------- ---------------- ------------ ------------ -----------
RESOURCES
Open Pit Indicated 34.9 1.62 1.82
Inferred 3.4 1.15 0.12
Underground Indicated 3.5 3.80 0.43
Inferred 3.2 3.95 0.41
Total Indicated 38.4 1.81 2.24
Inferred 6.6 2.52 0.54
------------------------------ ------------ ------------ -----------
Notes to Mineral Resources and Reserves
1. CIM definitions were used for Mineral Resources and Mineral Reserves 2. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability
3. A cut-off grade of 0.5g/t was applied within a US$1,500/oz open pit shell and a 2.0g/t cut-off for Mineral Resources suitable for underground mining. The resources suitable for underground mining are not included in the FS. The Mineral Reserve is reported at a cut-off grade of 0.5 g/t Au at a gold price of US$1,100/oz
4. The Mineral Resource is inclusive of the Mineral Reserve. The Mineral Reserve was estimated by construction of a block model within constraining wireframes and based on Indicated Resources
5. Mining dilution of 5% was added to the Mineral Reserve
6. The Mineral Reserves were estimated based on the NI 43-101 Mineral Resources, both effective as of 19 November 2012
7. A 93.4% metallurgical gold recovery was used for the Mineral Reserve 8. Due to rounding, some columns or rows may not add up exactly to the computed totals
The Feasibility Study ("FS"), which was completed in Q2 2013, demonstrated that the project is robust and economically viable at a gold price of US$1,350 per ounce[ii]. Amara is now focused on gaining a better understanding of the project with the aim of delivering similar strong returns in the current lower gold price environment.
Once Sierra Leone is declared Ebola free by the World Health Organisation and the Sierra Leone government, the focus of Amara's efforts at Baomahun will be to gain a greater understanding of the high grade core of the deposit and to evaluate the potential to grow the 2.8Moz Mineral Resource. The first step towards achieving these objectives will be to re-log the core, ensuring a thorough geological understanding has been gained from the extensive drilling completed to date.
In addition, Amara will gain a more thorough understanding of Baomahun's underground opportunity by evaluating the optimal place in the ore body to transition between open pit and underground mining and the most optimal underground mining strategy.
FINANCIAL REPORT
In January 2015 Amara successfully raised US$22 million (US$21 million net of costs) via a placing to fund the next phase of Yaoure's development. At 30 June 2015 the Group had cash resources of US$13.6 million having invested US$5.2 million in the ongoing exploration and Feasibility Study work at Yaoure.
Amara continues to focus on cash conservation to ensure funds are utilised for the advancement of the Yaoure Gold Project. In H1 2015 administrative expenses in London decreased by 42% to US$2.1 million (net of US$0.4 million of foreign exchange gains) from US$3.6 million in the comparative period in 2014, reflecting the simplification of the Group, including a reduction in staff numbers. Other operating costs on the face of the income statement have increased as costs associated with the operations in Sierra Leone are not being capitalised whilst work in country remains on hold due to the Ebola outbreak. Other operating costs include US$0.5 million of one-off costs incurred in the period, including the write down of obsolete inventories in Côte d'Ivoire and payment of historic taxes in Sierra Leone.
The operations in Burkina Faso are nearing closure. The liquidation of Amara's local subsidiary, Seguénéga Mining SA ("SMSA"), the sale of the Kalsaka processing plant, together with other marketable assets, and the primary environmental closure obligations are expected to be completed during 2015. One-off legal and other costs totalling US$0.3 million were incurred by the Group in the period, with all other costs being met from cash generated in country. The assets have been written down to the expected recoverable amount at the period end. At present, it is not expected that any surplus cash will be generated for repayment to Amara Mining plc and, as such, a provision of US$2.3 million is included within the liabilities of the disposal group held for sale. BCM, the former mining contractor at Sega, continues to pursue Amara Mining plc in Burkina Faso to be held jointly and severally liable for the debts of SMSA, although no hearings have taken place in respect of this litigation and nothing is expected until Q4 2015. The Directors of Amara remain confident that the claims by BCM against Amara are highly unlikely to succeed or have any recourse to Amara.
Longer term, the IFC has proposed a strategic investment in Amara of US$10 million, as announced on 20 April 2015, although given the current share price weakness this has not yet completed. Subject to its completion, Amara will be fully funded to the end of 2016, including the delivery of a BFS. These funds would also allow the Group time to further its discussions with banks and other financial institutions for the financing of Yaoure to the production stage.
AMARA MINING plc
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 June 2015 and 2014
6 months 6 months
ended ended
30 June 30 June
2015 2014
Notes US$'000 US$'000
Unaudited Unaudited
Continuing operations
General and administrative expenses (2,080) (3,554)
Other operating costs (1,338) (441)
Operating loss (3,418) (3,995)
Finance income 599 549
Finance costs - (449)
Loss before taxation (2,819) (3,895)
--------- ---------
Income tax expense - -
--------- ---------
Loss for the period from continuing
operations (2,819) (3,895)
--------- ---------
Discontinued operations
Loss for the period from discontinued
operations 7 (283) (7,618)
Total comprehensive income for the period (3,102) (11,513)
Attributable to:
Equity holders of the parent company
Loss for the period from continuing
operations (2,809) (3,895)
Loss for the period from discontinued
operations (247) (6,168)
--------- ---------
Loss for the period attributable to
owners of the parent (3,056) (10,063)
--------- ---------
Non-controlling interests
Loss for the period from continuing
operations (10) -
Loss for the period from discontinued
operations (36) (1,450)
--------- ---------
Loss for the period attributable to
non-controlling interests (46) (1,450)
--------- ---------
Loss per share - basic and diluted 3
Loss from continuing operations (cents
per share) (0.70) (1.45)
Loss from discontinued operations (cents
per share) (0.06) (2.30)
--------- ---------
Loss (cents per share) (0.76) (3.75)
There were no other comprehensive income gains or losses during the periods presented.
AMARA MINING plc
CONDENSED consolidated statement of financial position
As at 30 June 2015 and 31 December 2014
As at As at
30 June 31 December
2015 2014
Notes US$'000 US$'000
Unaudited Unaudited
ASSETS
NON-CURRENT ASSETS
Intangible assets 4 132,625 127,417
Property, plant and equipment 5 5,992 5,927
Total non-current assets 138,617 133,344
CURRENT ASSETS
Inventories 133 486
Other receivables 1,594 1,789
Cash and cash equivalents 13,613 1,687
Total current assets 15,340 3,962
Assets of disposal group
held for sale 11,207 13,506
TOTAL ASSETS 165,164 150,812
CAPITAL AND RESERVES
Share capital 6 6,975 5,598
Share premium 220,021 200,420
Merger reserve 15,107 15,107
Share option reserve 4,967 4,721
Currency translation reserve 987 987
Accumulated losses (96,040) (93,109)
TOTAL EQUITY ATTRIBUTABLE
TO THE PARENT 152,017 133,724
Non-controlling interests (4,406) (4,360)
TOTAL EQUITY 147,611 129,364
NON-CURRENT LIABILITIES
Provisions 2,966 3,150
Total non-current liabilities 2,966 3,150
CURRENT LIABILITIES
Trade and other payables 3,380 4,792
Total current liabilities 3,380 4,792
Liabilities of disposal
group held for sale 11,207 13,506
TOTAL LIABILITIES 17,553 21,448
TOTAL EQUITY AND LIABILITIES 165,164 150,812
AMARA MINING plc
CONDENSED consolidated statement of changes in equity
For the six months ended 30 June 2015 and 2014 and 31 December 2014
ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT
---------------------------------------------------------------------------
Share Cumulative
Share Share Merger option translation Accumulated Non-controlling Total
capital premium reserve reserve reserve losses Sub-total interests equity
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
As at 1
January
2014 3,785 173,242 15,107 4,678 987 (77,941) 119,858 (2,839) 117,019
-------------- -------- -------- -------- -------- ----------- ----------- --------- --------------- --------
Loss for the
period - - - - - (10,063) (10,063) (1,450) (11,513)
Total
comprehensive
income for
the
period - - - - - (10,063) (10,063) (1,450) (11,513)
-------------- -------- -------- -------- -------- ----------- ----------- --------- --------------- --------
Issue of
ordinary
share capital 1,813 29,013 - - - - 30,826 - 30,826
Share issue
costs - (1,835) - - - - (1,835) - (1,835)
Share option
charge - - - 356 - - 356 - 356
Reserve
transfer - - - (61) - 61 - - -
As at 30 June
2014 5,598 200,420 15,107 4,973 987 (87,943) 139,142 (4,289) 134,853
-------------- -------- -------- -------- -------- ----------- ----------- --------- --------------- --------
Loss for the
period - - - - - (5,669) (5,669) (2,618) (8,287)
Total
comprehensive
income for
the
period - - - - - (5,669) (5,669) (2,618) (8,287)
-------------- -------- -------- -------- -------- ----------- ----------- --------- --------------- --------
Closure of
subsidiary - - - - - - - 2,547 2,547
Share option
charge - - - 251 - - 251 - 251
Reserve
transfer - - - (503) - 503 - - -
As at 31
December
2014 5,598 200,420 15,107 4,721 987 (93,109) 133,724 (4,360) 129,364
-------------- -------- -------- -------- -------- ----------- ----------- --------- --------------- --------
Loss for the
period - - - - - (3,056) (3,056) (46) (3,102)
Total
comprehensive
income for
the
period - - - - - (3,056) (3,056) (46) (3,102)
-------------- -------- -------- -------- -------- ----------- ----------- --------- --------------- --------
Issue of
ordinary
share capital 1,377 20,655 - - - - 22,032 - 22,032
Share issue
costs - (1,054) - - - - (1,054) - (1,054)
Share option
charge - - - 371 - - 371 - 371
Reserve
transfer - - - (125) - 125 - - -
As at 30 June
2015 6,975 220,021 15,107 4,967 987 (96,040) 152,017 (4,406) 147,611
-------------- -------- -------- -------- -------- ----------- ----------- --------- --------------- --------
Amara Mining plc
CONDENSED consolidated statement of cash flows
For the six months ended 30 June 2015 and 2014
6 months 6 months
ended 30 ended 30
June June
2015 2014
US$'000 US$'000
Unaudited Unaudited
Cash flow (used in)/from operating activities
Operating loss for the period from continuing
operations (3,418) (3,995)
Operating loss for the period from discontinued
operations (723) (7,508)
Depreciation/amortisation 700 14,695
Decrease/(increase) in trade and other
receivables 1,046 (3,169)
(Decrease)/increase in trade and other
payables (2,618) 4,163
Decrease in inventories 1,017 3,771
Decrease in provisions (629) (78)
Share option charge 371 356
Net cash flows (used in)/from operating
activities (4,254) 8,235
Income taxes paid - (1,198)
--------- ---------
Cash flows used in investing activities
Interest receivable 4 42
Interest payable - (462)
Purchase of property, plant and equipment (191) (1,361)
Purchase of intangible assets - deferred
exploration (5,730) (6,256)
Net cash flows used in investing activities (5,917) (8,037)
Cash flows from financing activities
Proceeds from the issue of share capital 21,994 28,105
Issue costs (1,054) (1,836)
Repayment of borrowings - (10,002)
Net cash flows from financing activities 20,940 16,267
Net increase in cash and cash equivalents 10,769 15,267
Cash and cash equivalents at start of
period 4,701 11,372
Exchange gains on cash 1,035 537
Cash and cash equivalents at end of
period 16,505 27,176
Cash and cash equivalents comprise
Cash at bank 13,613 27,176
Cash at bank - disposal group held for
sale (note 8) 2,892 -
Cash and cash equivalents at end of
period 16,505 27,176
Included in cash and cash equivalents is US$2,770,000 (2014: US$3,364,000) in respect of a restricted bank account held for the purposes of the rehabilitation of the Kalsaka mine site in Burkina Faso. This balance forms part of the discontinued operations cash and cash equivalent total disclosed in note 8.
AMARA MINING plc
notes to the interim financial information
For the six months ended 30 June 2015 and 2014
1. Basis of preparation
The condensed interim financial information has been prepared on the basis of the recognition and measurement requirements of International Financial Reporting Standards (IFRS) as adopted by the European Union (EU) and implemented in the UK. The accounting policies, methods of computation and presentation used in the preparation of the interim financial information are the same as those used in the Group's audited financial statements for the year ended 31 December 2014, which this interim consolidated financial information should be read in conjunction with. The financial information has been prepared in accordance with International Accounting Standard 34 - Interim Financial Reporting.
The financial information in this statement does not constitute full statutory accounts within the meaning of Section 434 of the Companies Act 2006. The financial information for the six months ended 30 June 2015 and 30 June 2014 is unaudited, and has not been reviewed by the auditors.
The financial information for the year ended 31 December 2014 has been derived from the Group's audited financial statements for the period as filed with the Registrar of Companies. It does not constitute the financial statements for that period. The auditor's report on the statutory financial statements for the year ended 31 December 2014 was unqualified and did not contain any statement under sections 498 (2) or (3) of the Companies Act 2006.
Going Concern
The Directors regularly review cashflow forecasts to determine whether the Group has sufficient cash reserves to meet future working capital requirements, progress its exploration projects and take advantage of business opportunities that may arise. The Group manages its treasury function to ensure that cash is primarily held in politically stable countries. This minimises the risk of political events preventing the Group from continuing to make payments required for the Group's operations to continue.
Based on subsequent forecast cash flows the Directors are satisfied that the Group has sufficient cash resources to meet its financial obligations, in particularly the exploration and development costs of its projects, as they fall due for the foreseeable future. Accordingly the Directors have concluded that it is appropriate for the unaudited interim financial information to be prepared on a going concern basis.'
2. Segmental reporting
An analysis of the consolidated income statement by operating segment, presented on the same basis as that set out in the 2014 annual report, is set out below. For the purposes of statutory reporting the Kalsaka/Sega reporting segment has been treated as discontinued - see note 7.
Yaoure Baomahun All other Total
segments
US$'000 US$'000 US$'000 US$'000
Six months ended 30
June 2015
Segmental EBITDA (30) (973) (2,104) (3,107)
========= ========== =========== =========
Exploration expenditure 5,208 - - 5,208
Other capital expenditure 186 - - 186
--------- ---------- ----------- ---------
Six months ended 30
June 2014
Segmental EBITDA - - (3,207) (3,207)
========= ========== =========== =========
Exploration expenditure 4,356 935 - 5,291
Other capital expenditure 86 2 2 90
--------- ---------- ----------- ---------
A reconciliation of segmental EBITDA to the loss before tax reported in the interim financial statements is as follows:
6 months 6 months
ended ended
30 June 30 June
2015 2014
US$'000 US$'000
EBITDA for reportable
segments (3,107) (3,207)
Depreciation and amortisation (49) (64)
Share based payments (371) (356)
Net interest received 3 (531)
Exchange rate variance 1,014 263
Inventory write-down (309) -
Loss on discontinued
operations (283) (7,618)
Loss for the period (3,102) (11,513)
3. Loss per share
The calculation of basic 6 months 6 months
and diluted loss per ordinary ended ended
share is based 30 June 30 June
on the following data: 2015 2014
Loss for the purpose of loss per share (net loss for the period attributable
to equity holders of the parent (US$'000))
Continuing operations (2,809) (3,895)
Discontinued operations (247) (6,168)
Total loss for the period
attributable to equity holders
of the parent (3,056) (10,063)
Number of shares
Weighted average number
of ordinary shares in issue
for the period
* Number of shares with voting rights 401,703,411 268,288,384
* Effect of share options in issue - -
* Total used in calculation of diluted earnings per
share 401,703,411 268,288,384
None of the share options in issue are dilutive at the current share price.
4. Intangible assets
Deferred
Exploration exploration
and mining and evaluation
rights costs Total
US$'000 US$'000 US$'000
Cost
At 1 January 2014 30,222 87,126 117,348
Additions - 5,291 5,291
At 30 June 2014 30,222 92,417 122,639
Additions 5 12,743 12,748
Reclassification to assets
held for sale (6,033) - (6,033)
At 31 December 2014 24,194 105,160 129,354
Additions - 5,208 5,208
At 30 June 2015 24,194 110,368 134,562
Amortisation
At 1 January 2014 7,126 - 7,126
Charge for the period 844 - 844
At 30 June 2014 7,970 - 7,970
Charge for the period - - -
Reclassification to assets
held for sale (6,033) - (6,033)
At 31 December 2014 1,937 - 1,937
Charge for the period - - -
At 30 June 2015 1,937 - 1,937
Net book value
At 30 June 2015 22,257 110,368 132,625
At 31 December 2014 22,257 105,160 127,417
At 30 June 2014 22,252 92,417 114,669
5. Property, plant and equipment
Mine development
and associated Motor vehicles,
property, office
plant and equipment,
equipment fixtures
costs and computers Total
US$'000 US$'000 US$'000
Cost
At 1 January 2014 98,355 8,108 106,463
Additions 1,308 8 1,316
At 30 June 2014 99,663 8,116 107,779
Additions 184 36 220
Disposals (20,472) (822) (21,294)
Reclassification
to assets held
for sale (42,429) (4,782) (47,211)
At 31 December
2014 36,946 2,548 39,494
Additions 164 22 186
At 30 June 2015 37,110 2,570 39,680
Depreciation
At 1 January 2014 78,520 5,735 84,255
Charge for the
period 7,754 448 8,202
At 30 June 2014 86,274 6,183 92,457
Charge for the
period 2,380 319 2,699
Disposals (19,276) (677) (19,953)
Reclassification
to assets held
for sale (38,095) (3,541) (41,636)
At 31 December
2014 31,283 2,284 33,567
Charge for the
period 63 58 121
At 30 June 2015 31,346 2,342 33,688
Net book value
At 30 June 2015 5,764 228 5,992
At 31 December
2014 5,663 264 5,927
At 30 June 2014 13,389 1,933 15,322
6. Share capital
As at As at
30 June 31 December
2015 2014
No. No.
Issued and Fully Paid:
Ordinary shares of 1p each 420,386,077 328,979,827
US$'000 US$'000
Issued and Fully Paid:
Ordinary shares of 1p each 6,975 5,598
Discontinued operations
In 2014 the company announced the cessation of mining operations at Kalsaka/ Sega in Burkina Faso. Accordingly, the results and cash flows relating to those operations have been presented as discontinued for the current and comparative reporting periods.
Statement of comprehensive income - discontinued operations
6 months 6 months
ended ended
30 June 30 June
2015 2014
US$'000 US$'000
Revenue 5,946 47,639
Cost of sales (2,766) (51,711)
Gross profit /(loss) 3,180 (4,072)
Other operating costs (3,903) (3,436)
Operating loss (723) (7,508)
Investment income 440 31
Finance costs - (141)
Loss before taxation (283) (7,618)
Income tax - -
Loss for the period (283) (7,618)
Attributable to:
Equity holders of the parent
company (247) (6,168)
Non-controlling interests (36) (1,450)
Loss and total comprehensive
income for the period (283) (7,618)
Statement of cash flows - discontinued operations
6 months 6 months
ended ended
30 June 30 June
2015 2014
US$'000 US$'000
Net cash flows (used in)/from
operating activities (560) 7,538
Income taxes paid - (1,198)
Net cash flows used in investing
activities (2) (1,279)
Net cash flows used in financing
activities - (7,409)
Net decrease in cash and cash
equivalents (562) (2,348)
Cash and cash equivalents at
start of period 3,014 5,927
Exchange gains/(losses) on
cash 440 (141)
Cash and cash equivalents at
end of period 2,892 3,438
======== ========
Details of restricted bank balances are provided as a footnote on the face of the consolidated statement of cash flows
The Burkinabe subsidiaries that remain in the control of the Company have been presented as a disposal group held for sale following the commitment of the Company's Board, on 4 December 2014, to sell the operations. The subsidiaries held for sale are Kalsaka Mining SA, Cluff Gold Sega Sarl and Cluff Mining Burkina Sarl. Efforts to sell the disposal group have commenced, and a sale is expected within 12 months. The disposal group has been treated as a discontinued operation and included in note 7.
A provision totalling US$2.3m has been made against the net assets of the disposal group due to uncertainty concerning full recovery of some amounts, equally the Company has no requirement to compensate for any shortfall with regard to liabilities, accordingly assets and liabilities are considered to total the same amount.
The disposal group comprised the following assets and liabilities:
Assets of disposal group As at As at
held for sale 30 June 31 December
2015 2014
US$000 US$000
Property, plant and equipment 5,000 5,575
Inventory 1,080 1,744
Other receivables and recoverable
taxes 2,235 3,173
Cash and cash equivalents 2,892 3,014
11,207 13,506
Liabilities of disposal
group held for sale
Trade and other payables 8,210 10,063
Provisions 2,997 3,443
11,207 13,506
There are no cumulative income or expenses included in other comprehensive income relating to the disposal group.
Included in cash and cash equivalents is US$2,770,000 (2014: US$2,997,000) in respect of a restricted bank account held for the purposes of the rehabilitation of Kalsaka mine site in Burkina Faso.
7. Litigation
Cote d'Ivoire
As disclosed in the financial statements for the year ended 31 December 2014, the Ivorian subsidiaries of the Group have received a claim of US$36.4m for additional costs incurred by the mining contractor on the now closed mining operations at Yaoure.
As permitted under the contract the mining contractor has requested that the dispute be resolved through arbitration before 'la cour d'arbitrage de Cote d'Ivoire' (CACI). As at the date of this report the tribunal format and timetable has been agreed and preliminary hearings on the admissibility and jurisdiction of the claim are due to be held in Q4 2015. As part of the arbitration process a liquidated damages counterclaim has been filed for US$50m in relation to the failure of the contractor to perform as required under the contract.
Whilst the situation remains unresolved, external advice has been received that supports the opinion of the Directors that the current provision of US$1.0m (included in accruals) is appropriate.
Burkina Faso
Following the cessation of mining operations in August 2014 the mining contractor of the Group's subsidiary Seguenega Mining SA initiated preliminary legal proceedings in Burkina Faso and Cote d'Ivoire. The action attempts to claim joint and several liability against Amara Mining plc and its Burkinabe subsidiaries for the debts of Seguenega Mining SA totalling approximately US$18.0m plus damages.
Seguenega Mining SA was placed into liquidation on 9 December 2014. The court appointed liquidator stated the total debt due from Seguenega Mining SA to the contractor at that date was 7.8 billion West African CFA Franc (US$14.1m). During the six months ended 30 June 2015, the liquidator made payments to outstanding creditors including partial payment of the outstanding balance due to the mining contractor. The operations of Seguenega Mining SA, and consequently the liquidation proceedings, are expected to be completed during 2015.
Amara Mining plc has no contractual responsibility for the debts of Seguenega Mining SA and has not provided a parent company guarantee. Amara Mining plc has received detailed legal advice that it is not liable for the debts of its subsidiary and the legal action is considered highly unlikely to succeed or have any recourse.
As the possibility of a transfer of benefits is considered to be remote no provision has been made and it does not meet the definition of a contingent liability in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets.
[i] See press release entitled, 'Pre-Feasibility Study for Yaoure Gold Project confirms robust financial returns', dated 14 May 2015
[ii] See NI 43-101 compliant technical report entitled, 'Feasibility Study of the Baomahun Project in Sierra Leone NI 43-101 Technical Report', dated 28 June 2013
This information is provided by RNS
The company news service from the London Stock Exchange
END
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