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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Frontier Min | LSE:FML | London | Ordinary Share | KYG368211093 | ORD USD0.01(DI) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.025 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From May 2019 to May 2024
TIDMFML
RNS Number : 8366K
Frontier Mining Ltd
30 June 2014
FRONTIER MINING LTD
("Frontier" or "the Company")
Final Results for the year ended 31 December 2013
Frontier Mining Ltd (AIM: FML), the AIM and KASE listed production, exploration and development company focused on Kazakhstan, today announces its audited final results for the year ended 31 December 2013.
Corporate Highlights
-- Extension of loan facility with Sberbank Kazakhstan (US$35 million) by 34 months to October 2018 and the grace period for principal repayments until September 2014, reducing cash outflow repayments by US$7 million in 2013
o Additional loan and credit facility to the value of US$17.9 million
Hot Features
Premium
-- Commencement of dealings in the Company's shares on the Kazakhstan Stock Exchange ("KASE")
Operational Highlights
-- Shipment of copper cathode commenced in H1 2013 -- 1,702 tonnes of copper cathode produced in the year
o Average preliminary cash cost of $3,956 per tonne
o Average sales price of $7,034 per tonne
o Revenue from sales of $10.4 million for 2013
o Revenue was sufficient to cover production costs and Company overheads
-- Staff headcount reduced by 27% -- Electricity supply for 2014 secured at 20% cost reduction
-- Exploration work carried out during the year: more than 6,100 meters of drilling and 19,061 m(3) of trenching
-- Appointment of Adam Moroney, independent degree-qualified consultant with 20 years of
SX/EW management and heap leach research experience, as an adviser to the Company
Financial Highlights
-- Revenue $10.4 million (2012: $5.4 million)
-- Profit (Loss) Before Tax of $(5.4) million (2012: $(9.5) million loss before revaluation gain and income tax )
-- Earnings (Loss) per Share of $0.01 (2012: $(0.01) loss) -- Net Asset Value of $163.6 million (2012: $150.0 million)
Post-Period Highlights
-- Sale of the Company's 100% owned subsidiary FML Kazakhstan LLP, owner of the Naimanjal licence area, for a cash consideration of US$30 million to UNION TRANSNATIONALE MINIERE S.A. subject to regulatory approvals in the Republic of Kazakhstan. The Naimanjal licence area in North East Kazakhstan has four commercial discoveries, including Baitemir, Yubileiny and Beschoku
o All proceeds from the sale are expected to be used for repayment of maturing debt of the Company and financing capital expenditures for the ramp up of copper production at Benkala to maximum levels
Yerlan Aliyev, Chairman and CEO, commented:
"The year of 2013 was a year when the Company faced many challenges. Available resources did not allow us to provide the plant with solution to produce copper at expected volumes, and while battling with financial issues, the Company continued optimizing technological parameters of operations in challenging weather conditions. Management continued searching for new strategic or financial investor within the legal framework of subsoil users in the Republic of Kazakhstan.
Following the sale of the Naimanjal licence area, we now intend to focus entirely on stabilizing operations at Benkala and developing the South Benkala resource. Resolving of the pressing financing matters will allow us to optimize copper cathode production at the Benkala SX-EW plant, paving the way towards increased production in the near future.
We look forward to the challenges of 2014."
For further details please contact:
Frontier Mining Ltd Yerlan Minavar +44 (0) 20 7898 9019 Cairn Financial Advisers (NOMAD) Sandy Jamieson +44 (0) 20 7148 7900 RFC Ambrian (Broker) John Harrison +44 (0) 20 3440 6800 Walbrook Paul Cornelius (PR/IR) Guy McDougall +44 (0) 20 7933 8780
Notes to Editor
Frontier Mining Ltd is a copper company with production, development and exploration operations in Kazakhstan.
The Company's main activity is at Benkala, an open pit copper mine and SX-EW production facility, located on the Urals copper gold ore belt in North West Kazakhstan. Frontier has a 100% interest in Benkala through its subsidiary KazCopper LLP.
Frontier maintains an administrative and technical office in Almaty, the former capital city of Kazakhstan and the main business centre in the South East.
Frontier Mining's shares are traded on the AIM market of the London Stock Exchange, and on the Kazakhstan Stock Exchange.
Chairman and Chief Executive Officer's Statement
The year of 2013 was a year when the Company faced many challenges. Available resources did not allow us to provide the plant with solution to produce copper at expected volumes, and while battling with financial issues, the Company continued optimizing technological parameters of operations in challenging weather conditions. Management continued searching for new strategic or financial investor within the legal framework of subsoil users in the Republic of Kazakhstan.
During 2013 we made important improvements in efficiency, which included a significantly reduced headcount of 27% and a 20% reduction in energy cost secured for 2014. Shipment of copper cathode commenced in June and we had, by the end of the year, produced a total of 1,702 tonnes. We achieved an average preliminary cash cost of $3,956 per tonne against an average sales price of $7,034 per tonne. In all, we generated in excess of $10 million from sales, which was sufficient to cover production costs and Company overheads.
We continued our exploration programs for the large part of year, with more than 6,100 meters of drilling and 19,061 m(3) of trenching completed. As shareholders will know however, we subsequently announced, in March 2014, the sale of the Naimanjal licence area for US$30 million, which is subject to the consent of the Kazakhstan Ministry of Industry and New Technologies. The licence area included the Baitemir, Beschoku and Yubileiny discoveries and the sale represented the end of our exploration activities on these sites. All proceeds from the sale are expected to be used for repayment of the Company's maturing debt and financing capital expenditures for the acceleration of copper production at Benkala to optimum levels. Whilst the Naimanjal zone was viewed as a good future prospect for our Company, we now intend to focus entirely on optimising operations at Benkala and developing the South Benkala resource.
Adam Moroney, an independent consultant with 20 years of SX/EW and heap leach experience joined our team in 2013. Mr. Moroney has added great insight to our stacking strategy and capabilities. After a series of tests and trials proposed and overseen by Mr Moroney, leach pad stacking height at pad 3 has increased significantly. As at 31 December 2013, pad 4 was being stacked with forced aeration circuit installed to ensure stable leach kinetics.
In terms of corporate matters, recent sale of Naimanjal will enable us to finance working capital shortages and pay back maturing debt as planned. During 2013, we also extended our loan facility with Sberbank Kazakhstan (US$35 million) by 34 months to October 2018 and the grace period for principal repayments until September 2014, reducing cash outflow repayments by US$7 million in 2013.
As announced on 20 August 2013, FML is subject to litigation involving Sokol Holdings Inc., and its owners, Brian Savage and Tom Sinclair ("Plaintiff") by Dorsey & Whitney LLP ("Defendant"). The judgment obtained in this litigation was subject to an appeal by Sokol Holdings Inc, which has been rejected. Whilst the Board of FML does not believe the Company should bear any costs of this litigation, as a named party, it is jointly and severally liable for the final sum awarded to the defendant.
Frontier Mining is now dual listed on the Kazakhstan Stock Exchange, satisfying the demands of the regulatory requirements of the National Bank of Kazakhstan rules. Dealings in the Company's shares on the Kazakhstan Stock Exchange commenced on 5 March 2014. The costs of listing the Company and maintaining the listing were and are minimal. Following the sale of the Naimanjal licence area, we now intend to focus entirely on stabilising operations at Benkala and developing the South Benkala resource. The proceeds of the Naimanjal transaction will allow us to optimise copper cathode production at the Benkala SX-EW plant, paving the way towards increased production in the near future.
We look forward to the challenges of 2014.
Yerlan Aliyev
Chairman of the Board
Financial Review
During 2013 1702 tonnes of copper cathode were produced, which was in line with forecast for the period. $17.9 million of financing received from Sberbank, as well as $10.4 million of revenue from copper cathode sale allowed the Company to continue its operations and investment activities.
For the year ended 31 December 2013, the Company received net income of $13.6 million (after gains from discounted operations) compared with net loss of $11.3 million for 2012.
Revenue and cost of sales increased in line with copper cathode sale increase, while gross profit increased more than 10 times when compared to 2012. In 2013 selling, general and administrative expenses increased by 9.7% compared to 2012, mainly due to reduction of administrative expenses related to Frontier Mining Ltd.
Financing costs in 2013 decreased by 39.4% compared to 2012 due to capitalization of interest on loans used for exploration activities. Other income includes income received from sale of wagons and other assets.
Compared to 2012, outflow of cash for operating activities in 2013 decreased by $6.2 million, mainly due to increase of revenue from copper cathode sale. Increase of cash spent on operating activities in 2012 was due to commencement of production, thus increased operating expenses.
In 2013 the Company re-considered the status of the Benkala mine due to the necessity to perform further feasibility studies and other exploration works to gain a deeper understanding of the ore reserves on the mine and transferred its assets related to Benkala mine from mining assets to exploration and evaluation assets, which stood at $198.1 million as at 31 December 2013. Net asset value as at 31 December 2013 was $163.6 million.
Nurumbetova Marzhan
Chief Financial Officer
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31, 2013
US Dollars Notes 2013 2012
---------------------------------------------- ------ ------------ -------------
Revenue 24 10,411,431 5,372,018
Cost of sales 25 (8,763,228) (5,208,375)
---------------------------------------------- ------ ------------ -------------
Gross profit 1,648,203 163,643
---------------------------------------------- ------ ------------ -------------
Selling, general and administrative
expenses 26 (5,011,954) (4,568,351)
Finance costs, net 27 (3,036,150) (5,016,401)
Foreign exchange loss, net (821,053) (61,249)
Other income / (loss), net 28 1,833,393 (16,311)
Loss before income tax (5,387,561) (9,498,669)
---------------------------------------------- ------ ------------ -------------
Income tax (expense) / benefit 19 (1,814,036) 75,814
Loss for the year from continued operations (7,201,597) (9,422,855)
---------------------------------------------- ------ ------------ -------------
Discontinued operations:
Gain / (loss) from discontinued operations,
net of tax 8 20,855,716 (1,854,392)
---------------------------------------------- ------ ------------ -------------
Gain / (loss) for the year from discontinued
operations 20,855,716 (1,854,392)
---------------------------------------------- ------ ------------ -------------
Gain / (loss) for the year 13,654,119 (11,277,247)
Other comprehensive loss:
Items that will be reclassified subsequently
to profit or loss
Effect from currency translation 4 (39,884) -
---------------------------------------------- ------ ------------ -------------
Total other comprehensive loss, net (39,884) -
of tax
---------------------------------------------- ------ ------------ -------------
Total comprehensive income / (loss)
for the year 13,614,235 (11,277,247)
---------------------------------------------- ------ ------------ -------------
Income / (loss) per share - basic and
diluted
Loss from continuing operations 23 (0.00) (0.01)
Income / (loss) from discontinued operations 0.01 (0.00)
---------------------------------------------- ------ ------------ -------------
0.01 (0.01)
---------------------------------------------- ------ ------------ -------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT DECEMBER 31, 2013
US Dollars Notes December December
31, 31,
2013 2012
--------------------------------------------- ------ ------------- -------------
Assets
Non-current assets
Exploration and evaluation assets 9 198,105,513 9,081,401
Mine development assets 10 499,316 187,669,319
Property, plant and equipment 11 53,898,801 55,590,086
Intangible assets 60,289 76,280
Advances paid for non-current assets 12 973,543 5,969,272
Restricted cash deposit 13 437,413 389,593
VAT recoverable, non-current portion 3 6,564,006 5,488,048
--------------------------------------------- ------ ------------- -------------
Total non-current assets 260,538,881 264,263,999
--------------------------------------------- ------ ------------- -------------
Current assets
Inventories 14 14,084,584 9,766,274
Trade accounts receivable 365,022 183,759
VAT recoverable, current portion 3 945,882 1,000,218
Advances paid 12 632,533 5,246,718
Other current assets 1,081,961 277,842
Cash and cash equivalents 15 168,770 2,184,083
--------------------------------------------- ------ ------------- -------------
Total current assets 17,278,752 18,658,894
--------------------------------------------- ------ ------------- -------------
Assets of disposable groups held for
sale 8 28,124,121 -
Total assets 305,941,754 282,922,893
Equity and liabilities
Share capital 16 18,609,140 18,609,140
Additional paid in capital 191,334,243 191,334,243
Option premium on convertible notes 120,993 120,993
Accumulated losses (46,388,864) (60,042,983)
Translation reserve 4 (39,884) -
--------------------------------------------- ------ ------------- -------------
Total equity 163,635,628 150,021,393
--------------------------------------------- ------ ------------- -------------
Non-current liabilities
Interest bearing and interest free loans
and borrowings from third parties, non
current portion 17 49,614,472 36,733,794
Interest bearing and interest free loans
and borrowings from related parties,
non current portion 17 860,000 13,840,902
Provisions, non-current portion 18 4,023,410 3,943,420
Due to the US Trade and Development
Agency - 340,000
Deferred tax liability 19 36,685,854 34,871,818
Total non-current liabilities 91,183,736 89,729,934
--------------------------------------------- ------ ------------- -------------
Current liabilities
Trade accounts payable 20 2,192,470 10,041,126
Interest bearing and interest free loans
and borrowings from third parties, current
portion 17 29,011,413 22,015,900
Interest bearing and interest free loans
and borrowings from related parties,
current portion 17 13,559,867 4,354,165
Provisions, current portion 18 207,154 3,252,233
Taxes payable 21 1,245,069 2,531,273
Other current liabilities 22 1,567,264 976,869
--------------------------------------------- ------ ------------- -------------
Total current liabilities 47,783,237 43,171,566
--------------------------------------------- ------ ------------- -------------
Liabilities of disposable groups held
for sale 8 3,339,153 -
Total liabilities 142,306,126 132,901,500
--------------------------------------------- ------ ------------- -------------
Total equity and liabilities 305,941,754 282,922,893
--------------------------------------------- ------ ------------- -------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED DECEMBER 31, 2012
(expressed in US dollars)
US Dollars Notes Share capital Additional Accumulated Currency Option premium Total
paid-in loss translation on convertible
capital reserve notes
--------------- ------ -------------- -------------- ------------- -------------- --------------- -------------
As of January
1, 2012 18,609,140 191,334,243 (48,765,736) - 25,926 161,203,573
--------------- ------ -------------- -------------- ------------- -------------- --------------- -------------
Issue of
convertible
note - - - - 118,833 118,833
Income tax
effect - - - - (23,766) (23,766)
--------------- ------ -------------- -------------- ------------- -------------- --------------- -------------
- - - - 95,067 95,067
--------------- ------ -------------- -------------- ------------- -------------- --------------- -------------
Loss for the
year - - (11,277,247) - - (11,277,247)
Other
comprehensive
income - - - - - -
--------------- ------ -------------- -------------- ------------- -------------- --------------- -------------
Total
comprehensive
loss
for the year - - (11,277,247) - - (11,277,247)
As of December
31, 2012 18,609,140 191,334,243 (60,042,983) - 120,993 150,021,393
--------------- ------ -------------- -------------- ------------- -------------- --------------- -------------
Profit for the
year - - 13,654,119 - - 13,654,119
Other
comprehensive
loss 4 - - - (39,884) - (39,884)
--------------- ------ -------------- -------------- ------------- -------------- --------------- -------------
Total
comprehensive
loss
for the year - - 13,654,119 (39,884) - 13,614,235
--------------- ------ -------------- -------------- ------------- -------------- --------------- -------------
As of Dec 31
2013 18,609,140 191,334,243 (46,388,864) (39,884) 120,993 163,635,628
--------------- ------ -------------- -------------- ------------- -------------- --------------- -------------
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2013
US Dollars Notes 2013 2012 ---------------------------------------------- ------ ------------- ------------- OPERATING ACTIVITIES: Loss before income tax (5,387,561) (9,498,669) Adjustments for non-cash flow items: Depreciation of property, plant and equipment and mine development assets 2,086,227 4,773,119 Amortization of intangible assets 15,991 15,588 Finance costs 7,626,676 5,016,401 Gain from released liability due to (340,000) - US Trade and Development Agency Change in bad debt provision for non-current assets - 319,264 (Gain) / loss from financial liability at fair value through profit or loss - (37,595) Loss from disposal of property, plant (80,944) - and equipment Change in provision for value added tax receivable - (11,125) Accrual of inventory provision 14 656,750 - Recovery of impairment loss (1,245,251) - Foreign exchange loss, net 2,002,464 - Cash flows from operating activities before changes in working capital 5,334,352 576,983 ---------------------------------------------- ------ ------------- ------------- Change in value added tax receivable (1,021,622) (2,574,399) Change in inventories (8,090,579) (9,532,131) Change in trade receivables (181,263) (145,983) Change in advances and prepaid expenses 4,614,185 (5,246,718) Change in other receivables (804,119) (236,005) Change in trade accounts payable (6,238,003) 281,011 Change in other current liabilities 590,395 (140,752) Change in taxes payable (1,286,204) 1,816,013 Change in provision 135,788 - Net cash flows from operating activities before income tax and interest paid (6,947,070) (15,201,981) ---------------------------------------------- ------ ------------- ------------- Interest paid (6,420,793) (4,410,974) Income tax paid - - ---------------------------------------------- ------ ------------- ------------- Net cash used in continuing operations (13,367,863) (19,612,955) Net cash used in discontinued operations (31) - ---------------------------------------------- ------ ------------- ------------- Net cash used in operating activities (13,367,894) (19,612,955) ---------------------------------------------- ------ ------------- ------------- INVESTING ACTIVITIES: Increase in exploration and evaluation assets and mining assets (3,734,458) (4,189,599) Purchase of property, plant and equipment (463,159) (17,376,455) Purchase of intangible assets - (79,528) Proceeds from sale of property, plant and equipment 2,275,903 418,386 Decrease in advances for non-current assets 12 4,995,729 3,532,117 Increase in restricted cash deposit 13 (47,820) (27,546) Net cash used in investing activities 3,026,195 (17,722,625) ---------------------------------------------- ------ ------------- ------------- FINANCING ACTIVITIES: ---------------------------------------------- ------ ------------- ------------- Proceeds from loans from related parties 233,681 8,945,384 Proceeds from loans from third parties 6,650,000 - Proceeds from bank loans 14,286,800 25,043,954 Proceeds from issue of notes payable - 6,600,000 Repayment of loans from related parties (6,087,147) (1,909,830) Repayment of bank loans (2,187,000) - Repayment of convertible note to related party - (210,595) Repayment of notes payable (4,570,000) (450,000) ---------------------------------------------- ------ ------------- ------------- Net cash generated by financing activities 8,326,334 38,018,913 ---------------------------------------------- ------ ------------- ------------- Net (decrease)/increase in cash and cash equivalents (2,015,365) 683,333 Cash and cash equivalents at the beginning of the year 2,184,083 1,500,750 Included in disposal group 52 - ---------------------------------------------- ------ ------------- ------------- Cash and cash equivalents at the end of the year 15 168,770 2,184,083 ---------------------------------------------- ------ ------------- -------------
A copy of the Consolidated Financial Statements with Independent auditors' report are being sent to shareholders and are available on the Company's website, www.frontiermining.kz.
http://www.rns-pdf.londonstockexchange.com/rns/8366K_1-2014-6-29.pdf
This information is provided by RNS
The company news service from the London Stock Exchange
END
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