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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
China Nonferrous Gold Limited | LSE:CNG | London | Ordinary Share | KYG215771042 | ORD USD0.0001 (DI) |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 1.30 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Gold Ores | 68.53M | -287.04M | -0.7507 | -0.02 | 4.97M |
TIDMCNG
China Nonferrous Gold Limited ??????????
('CNG' or the 'Company')
Interim Results for the Six-Month Period Ended 30 June 2018
China Nonferrous Gold Limited (AIM: CNG), the mineral exploration and development company currently developing the Pakrut Gold Project ('the Pakrut Project') in the Republic of Tajikistan, today announces its interim results for the six-month period ended 30 June 2018.
The results below are available on the Company's website at www.cnfgold.com.
Highlights
-- A total of 21,270 cubic meters ("m") of excavation work completed to
2,350m/2,230m/2,110m;
-- The processing plant has completed its equipment overhaul and workshop
maintenance, and has re-commenced trial production;
-- The smelting plant has returned to trial production resulting in the
production of gold concentrate;
-- On 1st July 2018, the Pakrut gold mine entered into production and
gold ingots were poured; and
-- The construction of all infrastructure projects is expected to be
finalised and completed during the fourth quarter of 2018 and full
production is expected to commence afterwards.
For further information please visit the Company's website (www.cnfgold.com) or contact:
China Nonferrous Gold LimitedYu Lixian, Managing DirectorTel: +86 10 8442 6681
Investec Bank plcJeremy Ellis, Alexander RuffmanTel: +44 (0)20 7597 5970
BlytheweighTim Blythe, Camilla HorsfallTel: +44 (0)20 7138 3204
Project Summary
The Pakrut Gold Project, of which CNG has 100 per cent ownership, is situated in Tajikistan approximately 120km northeast of the capital city Dushanbe. Pakrut is located within the Tien Shan gold belt, which extends from Uzbekistan into Tajikistan, Kyrgyzstan and Western China, and which hosts several multi-million-ounce gold deposits.
CNG is transitioning from construction into the production phase.
About Tajikistan
Tajikistan is a secular republic located in Central Asia. The country is a member of the Commonwealth of Independent States and the Shanghai Cooperation Organisation. Tajikistan hosts numerous operating precious metal mines as well as the largest aluminium smelter in Central Asia. CNG's management team has extensive experience in the mining industry in Tajikistan.
Chairman's Statement
As the Chairman of the Board, it gives me great pleasure to present the Chairman's Statement of the Interim Results for the Six-Month Period Ended 30 June 2018. After the restoration of the mine site following the severe snow disaster in 2017 the infrastructure, construction and production operations of the Pakrut gold mine have made significant progress during the half-year. The company has completed the majority of the construction for the flotation tailings pond, backfill station, camp complex building and underground ventilation system projects, to ensure that all infrastructure projects will be finished in the fourth quarter of 2018 as previously stated. After conducting an equipment overhaul and technical transformation, both the processing plant and the smelting plant returned to trial production in April 2018, and gold ingots were produced on July 1, 2018. Pakrut gold mine has ushered in a new chapter and entered a new stage of its lifecycle after going through a difficult post-disaster recovery and reconstruction period.
In relation to infrastructure construction, the flotation tailings pond has completed its diversion culvert pouring project at the length of 845m, 530,000 m³flood dam and tailings dam construction, and the 12.5km of pipeline for the tailings transportation has been laid. Once the geomembrane is laid, the flotation tailings pond can be put into use. The steel structure and concrete construction of the camp complex is currently being built. The main structure is about to be completed whilst the remaining works, the masonry and renovation projects, are expected be finalised in the fourth quarter of 2018. Most of the workshop construction for the backfill station and installation of the main equipment such as thickener have been completed, and the trials of these operations will be carried out in the fourth quarter of 2018. The company has completed 12,957.7 m³of excavation and underground construction work, and succeeded in finalising the ventilation system and other engineering excavation works. Wind turbines and other equipment will be installed shortly. The finalisation of all infrastructure projects is expected to be completed during the fourth quarter of 2018.
In terms of production and operation, the mining teams are on site. The ore was mined to 2,230m in May 2018, and the mining capacity reached 1,500 tons per day. The processing plant commenced trial production in April 2018 after completing its equipment overhaul and workshop maintenance. By September 2018, the cumulative amount of minerals processed was 206,670 tons, and the gold concentrate total was 6,186 tons. The smelting plant was restored to trial production in June 2018, and the first batch of gold ingots were poured on July 1st. It is expected that gold production will total 5,835 tons of concentrate and 200 kg of gold ingots by September 2018.
The insurance claims against the snowstorm disaster have been completed, and a total of 24 million RMB (approximately$$3,508,300USD) has been received, covering the direct losses caused by the snowstorm. The company meanwhile has again arranged the renewal of property insurance.
Financial Results
The Company continued its development and construction work during the first six months of 2018 Administration expenditure was US$2,179,000 (30 June 2017: US$1,987,000). The operating loss was US$3,363,000 (30 June 2017: US$12,351,000). Total cash equivalents at the end of the period amounted to US$61,896,000 (30 June 2017: US$10,959,000).
Given the limited production and cash balances the Group has been reliant on support from its major shareholder, CNMIM, and its associates. As detailed in the announcement released on 5 March 2018, CNG signed a total loan facility of US$90 million from CNMC International Capitals Company Limited ("CNMC International"). The Company's total liabilities outstanding as at 30 June 2018 totals approximately US$464 million and as at the date of this announcement totals approximately US$424 million of which $244 million is repayable during 2018. The Company has now recommenced production, which is expected to assist with raising further working capital. As previously announced, the repayment of the existing facilities will require a wider refinancing. Discussions are ongoing and are expected to be concluded in advance of 31 December 2018 deadline.
Outlook
The impact of the snowstorm has now been largely resolvedwith the infrastructure projects nearing completion. The pouring of gold ingots indicates that the Pakrut gold mine has entered a new stage and opened a new chapter.
After completing theinfrastructure projects, expected in the fourth quarter of 2018, the Pakrut gold mine is expected toenterfull production and capacity will gradually reach 2,000 tons per day. In 2019, the Pakrut gold mine is expected to achieve an annual production of 660,000 tons and produce 1.3 tons of gold per annum. Subsequently, the company will fully increase its production capacity, and strive to double its capacity by 2021. While increasing the production, the company is as making every effort to research and refine the selection and improvement process of the Pakrut gold project by continuously reducing production costs, increasing recovery rates and improving its overall competitiveness.
The company has long been committed to becoming a significant gold producer in Central Asia. It expects to benefit from the support and advantages of its major shareholder, CNMIM, to participate positively in China's"Belt and Road Initiative" in the future, and meanwhile establish a good relationship with the Tajikistan government and other Central Asian governments so as to create greater benefits for shareholders by potentially developing more gold resources and gold mines.
I would like to take this opportunity to thank all our employees, management and advisors for their continued efforts in first half of 2018 and thank our shareholders for their continued support.The company will continue to share with all our shareholders the latest developments in the construction, status of production and company's new strategies and new financing and other arrangements in due course.
Wu Xiang
Non-Executive Chairman
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHSED 30 JUNE 2018
Unaudited Unaudited Audited Six months ended Six months ended 30 June 2017 Year ended 31 December 30 June 2018 2017 Note US$'000 US$'000 US$'000 Revenue - 5,493 5,784 Cost of sales - (5,493) (5,784) Gross profit - - - Administrative and (2,179) (1,987) (5,017) other expenses (Loss)/Gain on foreign (1,183) (42) 750 exchange Impairment of mines - (10,322) (10,703) under construction Operating loss (3,363) (12,351) (14,970) Interest income 1 - 1 Finance costs - (47) - Loss before Tax (3,362) (12,398) (14,969) Income tax - - (68)
Loss for the period (3,362) (12,398) (15,037) attributable to owners of the Company Other comprehensive income - - - Total comprehensive income (3,362) (12,398) (15,037) for the period attributable to owners of the Company Earnings per Share -Basic and diluted (cents) 3 (0.88) (3.24) (3.93)
All of the activities of the Group are classified as continuing.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2018
Unaudited Unaudited Audited Note 30 June 2018 US$'000 30 June 2017 US$'000 31 December 2017US$'000 Non-Current Assets Mine 361,426 317,098 331,160 under construction Property, plant 7,983 2,275 8,967 and equipment Total Non-Current 369,409 319,373 340,127 Assets Current Assets Inventories 16,847 28,462 18,216 Trade and other 25,395 3,235 629 receivables Cash and cash 61,896 1,398 12,067 equivalents Total Current Assets 104,138 33,095 30,912 Current Liabilities Trade and Other 4 (99,277) (82,892) (78,409) payables Borrowings (172,684) (30,000) (172,684) Total Current (271,961) (112,892) (251,093) Liabilities Non-Current Liabilities Provision for other (768) (704) (767) liabilities and charges Borrowings 4 (191,500) (222,684) (106,500) Total Non-Current (192,268) (223,388) (107,267) Liabilities Total Liabilities (464,229) (336,280) (358,360) Net Assets 9,318 16,188 12,679 Capital And Reserves Capital 38 38 38 Share premium 65,901 65,901 65,901 Other reserves 10,175 10,175 10,175 Retained earnings (66,796) (59,926) (63,435) Total Equity 9,318 16,188 12,679
CONSOLIDATED STATEMENT OF CASH FLOWS
AS AT 30 JUNE 2018
Unaudited Unaudited Audited Six months ended Six months ended Year ended 31 30 June 2018 30 June 2017 December US$'000 US$'000 2017 US$'000 Cash flows from Operating Activities Loss before (3,361) (12,398) (15,037) income tax Adjustments for: Finance income (1) - (1) Depreciation 43 45 102 Foreign exchange 42 Impairment - 10,322 10,703 Change in working capital: Inventory 1,369 (296) 2,732 Trade and other (9,465) 859 90 receivables Trade and other 6,128 682 (2,758) payables Net cash flows (5,287) (744) (4,169) from Operating Activities Cash flows from Investing Activities Purchase of - - (13) property, plant and equipment Payments for mining (23,010) (8,548) (9,254) rights and construction in progress Disposal of PPE 382 - 42 Net cash used (22,628) (8,548) (9,225) in Investing Activities Cash flows from Financing Activities Proceeds from 90,000 - 26,500 borrowings Repayment of (5,000) (1,667) (1,667) borrowings Interest paid (7,255) - (11,935) Net Cash (used 77,745 (1,667) 12,898 in)/from Financing Activities Net 49,829 (10,959) (496) Increase/(Decrease) in Cash and Cash Equivalents Cash and cash 12,067 12,357 12,563 equivalents at beginning of the period Cash and cash 61,896 1,398 12,067 equivalents at end of the period
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHSED 30 JUNE 2018
Share Share Other Retained Total capital premium reserve earnings equity US$'000 US$'000 US$'000 US$'000 US$'000 Balance at 1 January 2017 38 65,901 10,175 (48,298) 227,716 Loss and total comprehensive - - - (15,037) (15,037) income for the period Balance at 31 December 38 65,901 10,175 (63,435) 12,679 2017 (audited) Balance at 1 January 2018 38 65,901 10,175 (63,435) 12,679 Loss and total comprehensive - - - (3,361) (3,361) income for the period Balance at 30 June 38 65,901 10,175 (66,796) 9,318 2018 (unaudited)
NOTES TO THE INTERIM FINANCIAL STATEMENTS
FOR THE SIX MONTHSED 30 JUNE 2018
1. Accounting Policies
i) Basis of preparation
China Nonferrous Gold Limited (the "Company") is a company registered in the Cayman Islands. The condensed consolidated interim financial statements of the Company for the six months ended 30 June 2018 comprise the result of the Company and its subsidiaries (together referred to as the "Group") and have been prepared in accordance with the AIM Rules for Companies. As permitted, the Company has chosen not to adopt IAS 34 "Interim Financial Statement" in preparing these interim financial statements.
The consolidated interim financial information for the period 1 January 2018 to 30 June 2018 is unaudited and has not been reviewed in accordance with International Standard on Review Engagements 2410 issued by the Auditing Practices Board. In the opinion of the Directors the condensed interim financial information for the period presents fairly the financial position, and results from operations and cash flows for the period in conformity with the generally accepted accounting principles consistently applied.
The condensed interim financial information incorporates unaudited comparative figures for the interim period 1 January 2017 to 30 June 2017 and extracts from the audited financial statements for the year to 30 June 2017. The financial information contained in this interim report does not constitute statutory accounts.
The comparatives for the full year ended 31 December 2017 are not the Company's full statutory accounts for that year. A copy of the accounts for that year have been delivered to members. The auditor's report on those financial statements was unqualified.
The interim report has not been audited or reviewed by the Company's auditor. The key risks and uncertainties and critical accountancy estimates remain unchanged from 31 December 2017 and the accounting policies adopted are consistent with those used in the preparation of its financial statements for the year ended 31 December 2017.
ii) Cyclicality
The interim results for the six months ended 30 June 2018 are not necessarily indicative of the results to be expected for the financial year 2018. The operations of China Nonferrous Gold Limited may be subject to seasonal variations depending on the severity of snowfall levels at the mine site. Severe levels may impact the ability to continue operations and result in damage to the mine site.
NOTES TO THE INTERIM FINANCIAL STATEMENTS
FOR THE SIX MONTHSED 30 JUNE 2018
2. Going Concern
The Interim Financial Statements have been prepared assuming the Company will continue as a going concern. Under the going concern assumption, an entity is ordinarily viewed as continuing in business for the foreseeable future with neither the intention nor the necessity of liquidation, ceasing trading or seeking protection from creditors pursuant to laws and regulations.
In assessing whether the going concern assumption is appropriate, the Directors take into account all available information for the foreseeable future, in particular for the twelve months from the date of approval of the Interim Financial Statements. This information includes:
-- Management prepared cash flow projections; -- Estimations as to when full production will commence and first
revenues will be generated and associated cash flows will occur;
-- The ability to complete the mine site work within the stated timeframe
and budget;
-- Sources of funding from external sources; -- Settle financial obligations as they fall due; -- The continued financial support of the considered controlling party;
and
-- The ability of management to renegotiate current financing
arrangements as was achieved in June 2018 in respect of the loan with
China Nonferrous Metals International Mining Co. Ltd.
As at the date of approval of these interim statements, and based upon consideration of the above, the Directors are satisfied that the Group has sufficient cash and loan facilities to finance the Group's operating expenses and any further development and construction of the Pakrut Gold Project that is required. The Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence and thus they continue to adopt the going concern basis of accounting in preparing the interim results.
NOTES TO THE INTERIM FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2018
3.Earnings per Share
June 2018 June 2017 December 2017 Basic and diluted earnings (0.88) (3.24) per share(cents) (3.93)
The basic earnings per share is calculated by dividing the loss attributable to equity holders after tax of US$ 3,361,841 (2017 June- loss US$12,398,000; December 2017 loss (US$ 15,037,000) by the weighted average number of shares in issue and carrying the right to receive dividend. For all of the periods disclosed2018 this was 382,392,292 shares.
NOTES TO THE INTERIM FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2018
4. Borrowings
June 2018 June 2017 December 2017 US$000 US$000 US$000 Bank borrowings 110,000 100,000 120,000 Other loans 254,184 153,145 159,184 Less: unamortised borrowing costs - (461) - Total 364,184 252,684 279,184 Non-current portion 191,500 222,684 106,500 Current portion 172,684 30,000 172,684
The fair value of borrowings equals their carrying amounts, as the impact of discounting is not significant.
A new loan agreement between CNMC International Capitals Company Limited ("CNMC") and China Nonferrous Gold Limited was signed on 8th February 2018. Under this agreement, CNMC have provided a loan facility of US$90,000,000 to China Nonferrous Gold Limited. This loan has been provided with the purpose of improving daily business operations of China Nonferrous Gold Limited. During July, 2018, the obligatory right is transferred to CNMC International Trade from CNMC International Capitals.
The loan contains annual fixed interest at 5.8%. Where the loan is used for a purpose other than that stated in the contract (see comment above), the proportion of the loan used will incur interest at a fixed rate of 11.6% per annual. Payment of interest will be made bi-annually.
The loan is repayable in full on 8th Dec 2020. For any outstanding amounts owed after this date, interest will be charged at a rate of 8.7% per annual until the outstanding amount is paid.
NOTES TO THE INTERIM FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2018
5. Post balance sheet event
Contract for the First-Stage Mining Project of the Pakrut Gold Mine
On 20th,June 2018the company's subsidiary, LLC Pakrut, signed a contract for the first-stage mining project with Wenjian Limited Liability Company ("LLC Wenjian").
LLC Wenjian is a private corporation registered in Tajikistan, focused on construction, developing and contracting in Tajikistan, and is not a related party of CNG. The total contract period agreed is 12 months. The contract can be extended by mutual consent and most of the mining operations are effectively undertaken by the contractor with their own equipment.
The total estimated cost of the contract is 50 million RMB (approximately USD$ 7.56 million) and is a tolling arrangement which is payable in accordance with each stage of construction accomplished by the contractor under the contract. The main scope of the first-stage project includes developing, prospecting and mining (except paste filling) of the Pakrut Gold Mine, as well as all auxiliary work.
Consultancy Contract for the Construction of Tailing Ponds
On 15th, June 2018 the Company'ssubsidiary, Kryso Resources Limited, entered into a new supplementary consultancy contract for the construction of tailing ponds with China 15th Metallurgical Construction Group Co., Ltd ("15MCC"), the former contractor of the tailing-pond project, due to material changes to the planned flotation tailing ponds in the construction site. China Nonferrous Metals International Mining Co., Ltd ("CNMIM") will no longer act as the agent for the Company regarding the contract.
Related Party Transaction
As 15MCC is an associate of CNMIM, a substantial shareholder in the Company and pursuant to AIM Rule 13, the entry into the supplementary consultancy contract is deemed to be a related party transaction. The Company's board of directors (excluding Wu Xiang, Yu Lixian and Zhang Hao, who are appointees of CNMIM) consider, having consulted with CNG's Nominated Adviser, Investec Bank plc, that the terms of the supplementary consultancy contract are fair and reasonable insofar as the shareholders of CNG are concerned.
View source version on businesswire.com: https://www.businesswire.com/news/home/20180926006144/en/
This information is provided by Business Wire
(END) Dow Jones Newswires
September 27, 2018 02:00 ET (06:00 GMT)
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