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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Kefi Gold And Copper Plc | LSE:KEFI | London | Ordinary Share | GB00BD8GP619 | ORD 0.1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.014 | 2.59% | 0.554 | 0.554 | 0.56 | 0.56 | 0.54 | 0.54 | 28,970,836 | 16:35:19 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Metal Mining Services | 0 | -6.36M | -0.0013 | -4.23 | 27.31M |
From Apr 2019 to Apr 2024
TIDMKEFI
RNS Number : 8896R
KEFI Minerals plc
27 September 2017
27 September 2017
KEFI Minerals plc
("KEFI" or the "Company")
INTERIM RESULTS FOR THE HALF-YEARED 30 JUNE 2017
KEFI Minerals (AIM: KEFI), the gold exploration and development company with projects in the Kingdom of Saudi Arabia and Democratic Republic of Ethiopia, is pleased to announce its unaudited interim results for the half-year ended 30 June 2017 and provide an update on development funding.
The statement below encompasses the activities of the Company's subsidiary, KEFI Minerals (Ethiopia) Limited ("KME"), in Ethiopia and its joint venture, Gold & Minerals Limited ("G&M"), in the Kingdom of Saudi Arabia.
Hot Features
Premium
Tulu Kapi Gold project, Ethiopia
-- In the first six months of the year, the Tulu
Kapi Gold Project in Ethiopia (the "Project")
remained the primary focus of KEFI's activities
and we progress towards triggering development
this year and open-pit production in late
2019.
-- We continued to work with our syndicate partners
- the principal financier Oryx Management
Limited ("Oryx"), the Government of Ethiopia,
Mining contractor Ausdrill and plant construction
contractor Lycopodium, targeting a "hot start"
to construction as soon as funding is in place.
-- Post the period end, the Company announced
the signing of a mandate letter and heads
of terms for US$135 million of project funding
with Oryx to finance and operate all the on-site
infrastructure at the Project. This finance
plan de-risks the Project further with a proposal
that provides a 9-year tenor for repayment
from drawdown, including a 30-month grace
period for construction and start-up.
-- KEFI and the Government of Ethiopia have launched
a new company to hold the Project, Tulu Kapi
Gold Mines Share Company Limited ("TKGM").
o Based on current estimates of capital spending
and contributions, respective shareholdings
will be 75-80% KEFI and 20-25% Government.
o The Board of TKGM includes two representatives
from the Government and four from KEFI. Of
the KEFI appointees Harry Anagnostaras-Adams
(KEFI Executive Chairman) has been appointed
Chairman and Wayne Nicoletto (KEFI Chief Operating
Officer) has been appointed Managing Director.
-- Each of our syndicate partners will contribute
funding, supply equipment and also play a
hands-on role in construction or (parts of)
the operations. KEFI, through TKGM will retain
overall project management and control. As
a result of the Oryx proposal the Project's
remaining funding requirement for triggering
construction has now been successfully reduced
from the c.US$289 million it stood at upon
KEFI assuming control in 2014 to a residual
balance likely to be under the most recently
published estimate of US$24 million, based
on ongoing refinements to planned capital
expenditure and contingency provisions. Several
proposals are being considered.
-- The Company was also pleased to see the Government
of the Federal Democratic Republic of Ethiopia
lifting of the state of emergency implemented,
following a vote in the country's parliament
at the beginning of August.
-- TKGM is now implementing the agreed project
plan, including:
o Transferring the Project mining licence
(the minerals rights and the overarching permit
to develop and operate) from KME to TKGM.
o Ancillary licenses from local and regional
authorities for the detailed Project construction
activities such as road widening, power connections
and waste management.
o Resolving with local authorities the resettlement
site infrastructure.
o Calculating the final compensation payable
for displaced landholders in light of the
now completed updates of property surveys
and the collected independent data for landholders'
product yield and market prices.
Gold & Minerals Ltd Joint Venture, Saudi Arabia
-- In Saudi Arabia, the initial priority for
the Company's G&M Joint Venture continues
to be to develop an open-pit, heap-leach ("HL")
gold operation, using a staged development
approach predicated on a low-capex start-up
to be expanded in modular stages as additional
mineralisation is delineated.
-- The potential cash flow from HL oxide gold
production is an opportunity to fund:
o construction of a carbon-in-leach ("CIL")
plant to process the deeper sulphide ore profitably;
and
o exploration in Saudi Arabia to create a
strong Saudi mining company for the long term.
-- Meetings with regulators in March 2017 resulted
in the Mining Licence Application for the
Jibal Qutman HL gold development being lodged
with the Saudi Government.
-- At Hawiah, G&M identified a significant target
for precious and base metals based on the
surface-sampling of a six-kilometre long gossan
(oxidised mineralisation exposed on the surface)
and the results of the geophysical surveys
of the ground beneath the gossan.
-- KEFI's Saudi venture remains a strategic long-term
priority and the Company is confident of having
established an early-entrant position in what
will emerge as a world-class minerals province.
G&M continues to await the new Saudi mining
industry regulations and policies that are
expected to be published soon.
Corporate
-- Post the period end, all VAT refunds from
Ethiopian authorities have now been received
(equivalent to c. GBP2.5 million).
-- During the period KEFI consolidated 17 Existing
Ordinary Shares into 1 New Ordinary Share.
The Shareholders still hold the same proportion
of the Company's ordinary share capital as
before the Consolidation. Other than a change
in nominal value, consolidated New Ordinary
Shares will carry equivalent rights under
the Articles of Association to the previous
Ordinary Shares.
-- In March 2017, the Company raised GBP5.62
million (before expenses):
o a placing of 10,695,182 to both existing
and new shareholders at 5.61p to raise GBP0.6
million (before expenses).
o a subscription by certain Directors, employees
and a supplier of the Company for 7,130,118
Company Subscription Shares at 5.61p to raise
GBP0.4 million (before expenses); and
o a subscription of 82,352,941 Lanstead Subscription
Shares by Lanstead at the issue price of 5.61p
to raise GBP4.62 million (before expenses)
(the "Lanstead Subscription"). Of the gross
proceeds of the Lanstead Subscription, GBP0.7
million (being 15%) was retained by the Company
and the balance of GBP3.9 million was pledged
by the Company pursuant to the Sharing Agreement
(the "Sharing Agreement").
o The Sharing Agreement entitles the Company
to receive back the outstanding proceeds on
a pro rata monthly basis over a period of
18 months, subject to adjustment upwards or
downwards each month depending on the Company's
share price at the time. It is the Company's
intention to use the total proceeds from the
Subscriptions and the Sharing Agreement in
the Company's continuing operations, including
for general working capital requirements.
The embedded derivative is revalued at the
reporting date based on the share price prevailing
at that date and any change in fair value
is recognised in the statement of comprehensive
income.
-- Cash balance of GBP1.6 million at 30 June
2017 (FY 2016: GBP0.4 million).
Commenting KEFI's Executive Chairman, Harry Anagnostaras-Adams, said:
"The first six months of 2017 and subsequently has been a transformational period for KEFI. We have made significant progress at Tulu Kapi, agreeing with our partners both the execution plan to close the required financing and the Project works schedule.
"The rest of 2017 is expected to be equally busy as we work to close the Project financing and move towards development. We look forward to providing updates as further progress is made."
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.
ENQUIRIES
KEFI Minerals plc SP Angel Corporate Finance Harry Anagnostaras-Adams, LLP (Nominated Adviser) Executive Chairman Ewan Leggat, Jeff Keating, Tel: + 357 99457843 Soltan Tagiev John Leach, Finance Director Tel: +44 20 3470 0470 Tel: +357 99208130 ------------------------------ ---------------------------- Brandon Hill Capital Ltd RFC Ambrian Ltd (Joint (Joint Broker) Broker) Oliver Stansfield, Alex Jonathan Williams Walker, Jonathan Evans Tel: +44 20 3440 6817 Tel: +44 20 7936 5200 ------------------------------ ---------------------------- IFC Advisory Ltd (Financial Beaufort Securities Ltd PR and IR) (Joint Broker) Tim Metcalfe, Heather Elliot Hance Armstrong Tel: +44 20 7382 8300 Tel: +44 20 3053 8671 ------------------------------ ----------------------------
Further information can be viewed on KEFI's website at www.kefi-minerals.com
Condensed interim consolidated statements of comprehensive income
(unaudited) (All amounts in GBP thousands unless otherwise stated)
Six Six
months months
ended ended
30 30
Notes June June
2017 2016
-------- --------
Revenue - -
Exploration expenses (77) (38)
-------- --------
Gross loss (77) (38)
Administration expenses (1,288) (861)
Share-based payments (113) (208)
Share of loss from jointly
controlled entity (107) (635)
Change in value of financial (1,750) -
assets at fair value through
profit and loss
Operating loss (3,335) (1,742)
Foreign exchange /(loss) (37) (42)
Finance expense (192) (91)
-------- --------
Loss before tax (3,564) (1,875)
Tax - -
-------- --------
Loss for the period (3,564) (1,875)
======== ========
Loss for the period (3,564) (1,875)
Other comprehensive loss:
Exchange differences on translating
foreign operations (103) 415
-------- --------
Total comprehensive loss for
the period (3,667) (1,460)
======== ========
Basic and fully diluted loss
per share (pence) 4 (1.19) (1.11)
============= =======
The notes are an integral part of these condensed interim consolidated financial statements.
Condensed interim consolidated statements of financial position
(unaudited) (All amounts in GBP thousands unless otherwise stated)
Unaudited Audited
Notes 30 June 31 Dec
2017 2016
--------- ---------
ASSETS
Non-current assets
Property, plant and equipment 5 43 61
Intangible assets 6 15,031 13,992
Derivative financial asset
at fair value through profit
or loss 7 468 -
15,542 14,053
--------- ---------
Current assets
Other financial investment 87 95
Derivative financial asset
at fair value through profit
or loss 7 1,404 -
Trade and other receivables 8 928 3,056
Cash and cash equivalents 1,637 410
--------- ---------
4,056 3,561
--------- ---------
Total assets 19,598 17,614
========= =========
EQUITY AND LIABILITIES
Equity attributable to owners
of the Company
Share capital 9 5,656 3,883
Deferred Shares 9 12,436 12,436
Share premium 9 19,459 16,279
Share options reserve 10 1,521 1,474
Foreign exchange reserve 67 170
Accumulated losses (21,651) (18,695)
--------- ---------
Total equity 17,488 15,547
Current liabilities
Trade and other payables 11 2,110 2,067
--------- =========
2,110 2,067
--------- =========
Total liabilities 2,110 2,067
--------- ---------
Total equity and liabilities 19,598 17,614
========= =========
The notes are an integral part of these condensed interim consolidated financial statements.
On 26 September 2017, the Board of Directors of KEFI Minerals Plc authorised these interim financial statements for issue.
John Leach
Finance Director
Condensed interim consolidated statement of changes in equity
(unaudited) (All amounts in GBP thousands unless otherwise stated)
Attributable to the owners of the Company
Share Deferred Share Share Foreign Accumulated Total
capital shares premium options exchange losses
reserve reserve
--------- --------- --------- --------- ---------- ------------ --------
At 1 January
2016 2,623 12,436 12,347 1,212 (30) (17,645) 10,943
Loss for
the year - - - - - (1,233) (1,233)
Other comprehensive
income - - - - 200 - 200
--------- --------- --------- --------- ---------- ------------ --------
Total Comprehensive
Income - - - - 200 (1,233) (1,033)
Recognition
of share
based payments - - - 445 - - 445
Cancellation
of options - - - (183) - 183 -
Issue of
share capital 1,260 - 4,296 - - - 5,556
Share issue
costs - - (364) - - - (364)
At 31 December
2016 3,883 12,436 16,279 1,474 170 (18,695) 15,547
Loss for
the period - - - - - (3,564) (3,564)
Other comprehensive
income - - - - (103) - (103)
--------- --------- --------- --------- ---------- ------------ --------
Total Comprehensive
Income - - - - (103) (3,564) (3,667)
Transfer
realised
loss of derivative
financial
asset (Note
7) - - (542) - - 542 -
Recognition
of share
based payments - - - 113 - - 113
Cancellation&Expiry
of options/warrants - - - (66) - 66 -
Issue of
share capital 1,773 - 4,078 - - - 5,851
Share issue
costs - - (356) - - - (356)
--------- --------- --------- --------- ---------- ------------ --------
At 30 June
2017 5,656 12,436 19,459 1,521 67 (21,651) 17,488
========= ========= ========= ========= ========== ============ ========
The following describes the nature and purpose of each reserve within owner's equity:
Reserve Description and purpose
Share capital amount subscribed for share capital at nominal value
Deferred shares on 16 June 2015, under the restructuring of share capital, ordinary shares of 1p each in the capital of the Company were sub-divided into one new ordinary share of 0.1p and one deferred share of 0.9p
Share premium amount subscribed for share capital in excess of nominal value, net of issue costs. Includes Lanstead sharing agreement share price movements.
Share options reserve reserve for share options granted but not exercised or lapsed
Foreign exchange reserve cumulative foreign exchange net gains and losses recognized on consolidation
Accumulated losses cumulative net gains and losses recognized in the statement of comprehensive income, excluding foreign exchange gains within other comprehensive income
The notes are an integral part of these condensed interim consolidated financial statements.
Condensed interim consolidated statements of cash flows
(unaudited) (All amounts in GBP thousands unless otherwise stated)
Six Six
months months
ended ended
to to
30 30
June June
2017 2016
---------- --------
Cash flows from operating activities
Loss before tax (3,564) (1,875)
Adjustments for:
Share-based benefits 113 208
Share of loss in joint venture 107 635
Gain on disposal of plant and
equipment - (23)
Depreciation 19 25
Interest expense 75 91
Realised Loss on derivative 1,750 -
financial asset
Foreign exchange losses on
financing activities 37 42
Foreign exchange gains on operating
activities (116) 21
---------- --------
Cash outflows from operating
activities before working capital
changes (1,579) (876)
Interest paid (75) (91)
Changes in working capital:
Trade and other receivables 2,128 206
Trade and other payables 43 (85)
Net cash used in operating
activities 517 (846)
---------- --------
Cash flows from investing activities
Purchases of plant and equipment (1) (28)
Deferred exploration costs (551) (428)
Project evaluation costs (488) (489)
Advances to joint venture (123) (255)
---------- --------
Net cash used in investing
activities (1,163) (1,200)
---------- --------
Cash flows from financing activities
Proceeds from issue of share
capital 2,229 1,748
Listing and issue costs (356) (116)
---------- --------
Net cash from financing activities 1,873 1,632
---------- --------
Net increase/(decrease)in cash
and cash equivalents 1,227 (414)
Cash and cash equivalents:
At beginning of period 410 562
----------
At end of period 1,637 148
========== ============
The notes are an integral part of these condensed interim consolidated financial statements.
Notes to the condensed interim consolidated financial statements
For the six months to 30 June 2016 and 2017 (unaudited) (All amounts in GBP thousands unless otherwise stated)
1. Incorporation and principal activities
Country of incorporation
The Company was incorporated in United Kingdom as a public limited company on 24 October 2006. Its registered office is at 27/28 Eastcastle Street, London W1W 8DH.
Principal activities
The principal activities of the Group for the period are:
-- To explore for mineral deposits of precious and base metals and other minerals that appear capable of commercial exploitation, including topographical, geological, geochemical and geophysical studies and exploratory drilling.
-- To evaluate mineral deposits determining the technical feasibility and commercial viability of development, including the determination of the volume and grade of the deposit, examination of extraction methods, infrastructure requirements and market and finance studies.
-- To develop, operate mineral deposits and market the metals produced. 2. Summary of significant accounting policies
The principal accounting policies applied in the preparation of these condensed interim consolidated financial statements are set out below. These policies have been applied consistently throughout the period presented in these condensed interim consolidated financial statements unless otherwise stated.
Basis of preparation and consolidation
The condensed interim consolidated financial statements have been prepared in accordance with International Accounting Standards (IFRS) including International Accounting Standard 34 "Interim Financial Reporting" and using the historical cost convention.
These condensed interim consolidated financial statements ('the statements") are unaudited and include the financial statements of the Company and its subsidiary undertakings. They have been prepared using accounting bases and policies consistent with those used in the preparation of the financial statements of the Company and the Group for the year ended 31 December 2016. These statements do not include all of the disclosures required for annual financial statements, and accordingly, should be read in conjunction with the financial statements and other information set out in the Company's 31 December 2016 Annual Report. The accounting policies are unchanged from those disclosed in the annual consolidated financial statements.
Going concern
The Directors have formed a judgment at the time of approving the condensed interim consolidated financial statements that there is a reasonable expectation that the Company and Group has adequate resources to continue in operational existence for the foreseeable future. The financial statements have been prepared on a going concern basis, the validity of which depends principally on securing funding to develop the Tulu Kapi mine project as an economically viable mineral deposit, and the availability of subsequent funding to extract the resource or alternatively the availability of funding to extend the Company's and Group's exploration activities. These conditions indicate the existence of a material uncertainty which may cast significant doubt about the Company's and Group's ability to continue as a going concern. The financial statements do not include any adjustment that would result if the Company and Group were unable to continue as a going concern.
Use and revision of accounting estimates
The preparation of the condensed interim consolidated financial statements requires the making of estimations and assumptions that affect the recognised amounts of assets, liabilities, revenues and expenses and the disclosure of contingent liabilities. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.
Financial Assets
Fair value through profit or loss
This category comprises only Lanstead derivative (note 7) which is carried in the statement of financial position at fair value with changes in fair value recognised in profit or loss. The Group does not have any assets held for trading nor does it voluntarily classify any financial assets as being at fair value through profit or loss.
Fair value measurement hierarchy
The Group classifies its financial assets and financial liabilities measured at fair value using a fair value hierarchy that reflects the significance of the inputs used in making the fair value measurement (note 7).
The fair value hierarchy has the following levels: a) Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1); b) Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices) (level 2); c) Inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3). The level in the fair value hierarchy within the financial asset or financial liability is determined on the basis of the lowest level input that is significant to the fair value measurement.
Adoption of new and revised International Financial Reporting Standards (IFRSs)
The Group has adopted all the new and revised IFRSs and International Accounting Standards (IAS) which are relevant to its operations and are effective for accounting periods commencing on 1 January 2017. The adoption of these Standards did not have a material effect on the condensed interim consolidated financial statements.
At the date of authorisation of these condensed interim consolidated financial statements some Standards were in issue but not yet effective. The Board of Directors expects that the adoption of these Standards in future periods will not have a material effect on the consolidated financial statements of the Group.
Critical accounting estimates and judgements
Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are unchanged from those disclosed in the annual consolidated financial statements.
Valuation of derivative financial asset
The Company and Lanstead Capital L.P. have entered into an equity sharing agreement in respect of the share placings as detailed in note 7 for which consideration will be received on a monthly basis over 18 months period. The amount to be received each month is dependent on the Company's share price at the end of each month. The Directors have made assumptions in their financial statements about the quantum of the funds receivable at the yearend however there is significant uncertainty underlying these assumptions due to the unpredictable nature of the share prices.
3. Operating segments
The Group has only one distinct operating segment, being that of mineral exploration. The Group's exploration activities are located in Ethiopia, Saudi Arabia through the jointly controlled entity and its administration and management is based in Cyprus.
Six months ended 30 June 2017 Cyprus Ethiopia Total
-------- --------- ------------
Operating loss (3,207) (21) (3,228)
Interest paid (75) - (75)
Other finance costs (117) - (117)
Foreign exchange (loss)/gain (37) - (37)
======== ========= ------------
Loss before tax (3,436) (21) (3,457)
======== =========
Share of loss from jointly
controlled entities Saudi
Arabia (107)
Tax -
------------
Loss for the period (3,564)
============
Total assets 6,424 13,101 19,525
======== ========= ============
Total liabilities (2,011) (99) (2,110)
======== ========= ============
Depreciation of property,
plant and equipment (19) (19)
======== ========= ============
Six months ended 30 June 2016 Cyprus Ethiopia Total
-------- --------- ------------
Operating loss (1,095) (12) (1,107)
Interest paid (91) - (91)
Foreign exchange (loss)/gain (42) - (42)
======== ========= ------------
Loss before tax (1,228) (12) (1,240)
======== =========
Share of loss from jointly
controlled entities Saudi
Arabia (635)
Tax -
------------
Loss for the period (1,875)
============
Total assets 1,684 11,555 13,239
======== ========= ============
Total liabilities (1,387) (529) (1,916)
======== ========= ============
Depreciation of property,
plant and equipment (25) (25)
======== ========= ============
4. Loss per share
The calculation of the basic and fully diluted loss per share attributable to the ordinary equity holders of the parent is based on the following data:
Six Six
months months
ended ended
30 June 30 June
2017 2016
---------- -----------
Net loss attributable to equity
shareholders (3,564) (1,875)
========== ===========
Average number of ordinary shares
for the purposes of basic loss
per share (000's) 297,938 168,901*
========== ===========
Basic and fully diluted loss per
share (pence) (1.19) (1.11)
========== ===========
The effect of share options and warrants on the loss per share is anti-dilutive.
*Adjusted for the 17:1 share consolidation which took place in March 2017.
5. Property, plant and equipment
Furniture,
fixtures
Motor Plant and
vehicles and office Total
Cost equipment equipment
----------- ----------- ----------- ----------
At 1 January 2016 43 135 59 237
Additions 28 - - 28
=========== =============== =========== ========
At 30 June 2016 71 135 59 265
Additions 4 - 3 7
At 31 December 2016
/ 1 January 2017 75 135 62 272
Additions - - 1 1
----------- --------------- ----------- --------
At 30 June 2017 75 135 63 273
=========== =============== =========== ========
Accumulated Depreciation
At 1 January 2016 27 70 59 156
Charge for the period - 25 - 25
----------- --------------- ----------- --------
At 30 June 2016 27 95 59 181
Charge for the period 6 21 3 30
At 31 December 2016
/ 1 January 2017 33 116 62 211
Charge for the period 3 16 - 19
---------------
At 30 June 2017 36 132 62 230
=========== =============== =========== ========
Net Book Value at 30
June 2017 39 3 1 43
=========== =============== =========== ========
Net Book Value at 31
December 2016 42 19 - 61
=========== =============== =========== ========
6. Intangible assets
Project Deferred Total
evaluation exploration
costs costs
Cost
At 1 January 2016 2,715 9,130 11,845
Additions 489 428 917
============= -------
At 30 June 2016 3,204 9,558 12,762
Additions 735 761 1,496
============= ============== -------
At 31 December 2016 3,939 10,319 14,258
Additions 488 551 1,039
============= ============== -------
At 30 June 2017 4,427 10,870 15,297
============= ============== =======
Project Deferred Total
evaluation exploration
Accumulated Impairment costs costs
At 1 January 2016 - - -
Impairment charge - - -
for the period
============= ============== -------
At 30 June 2016 - - -
Impairment charge
for the period - 266 266
============= ============== -------
At 31 December 2016 - 266 266
============= ============== =======
Impairment charge
for the period
At 30 June 2017
============= ============== =======
Net Book Value at
31 December 2016 3,939 10,053 13,992
============= ============== =======
Net Book Value at
30 June 2017 4,427 10,604 15,031
============= ============== =======
Management performed an impairment review for the above intangible assets at 30 June 2017, which relate to development work at the Tulu Kapi license area, and assessing its economic feasibility. The deemed net present value of the Tulu Kapi asset significantly exceeded the book value at 30 June 2017.
The impairment review compared the recoverable amount of assets to the carrying value. The recoverable amount of an asset is assessed by reference to the higher of value in use ("VIU"), being the net present value ("NPV") of future cash flows expected to be generated by the assets, and fair value less costs to dispose ("FVLCD"). The FVLCD is based on an estimate of the amount that the company may obtain in a sale transaction on an arms-length basis.
7. Derivative financial asset at fair value through profit and loss
In March 2017, as part of a subscription to raise, in aggregate, GBP5.62m (before expenses) from certain new shareholders, the Company issued 82,352,941 new ordinary shares of 1p each in the capital of the Company ("Ordinary Shares") at a price of 5.61p per share to Lanstead Capital L.P. ("Lanstead") for GBP4,620,000 (before expenses). The amount of GBP693,000 of the proceeds of the Lanstead Subscription (being 15% of the Lanstead Subscription amount) was retained by the Company and GBP3,927,000 (85%) was pledged to Lanstead under the sharing agreement. The Sharing Agreement enables the Company to share in any share price appreciation over the Benchmark Price, being 7.48 pence per New Ordinary Share (the "Benchmark Price"). The equity sharing agreement is for a 18 month period. All 82,352,941 Ordinary Shares were allotted with full rights on the date of the transaction.
Accordingly, pursuant to the above arrangements, of the aggregate subscription proceeds of GBP4.62m received from Lanstead, GBP3.927m (85 per cent.) was pledged by the Company in the equity sharing agreement with the remaining GBP0.69m (15 per cent.) immediately available for general working capital purposes.
To the extent that the Company's volume weighted average share price is greater or lower than the Benchmark Price at each settlement, the Company will receive greater or lower consideration calculated on a pro-rata basis i.e. volume weighted average share price / Benchmark Price multiplied by the monthly transfer amount. As the amount of the effective consideration receivable by the Company from Lanstead under the sharing agreement will vary subject to the movement in the Company's share price and will be settled in the future, the receivable is treated for accounting purposes as a derivative financial asset and has been designated at fair value through profit or loss.
The difference between the cash consideration received and the share placement price of 5.61p per share is transferred from fair value through profit or loss to share premium account. During the current period an amount of GBP542,150 was recorded in share premium.
The Company also issued, in aggregate, a further 4,117,647 Ordinary Shares to Lanstead as a value payment in connection with the equity sharing agreement.
The fair value of the derivative financial assets as at 30 June 2017 has been determined by reference to the Company's share price in line with the sharing agreement at that time and has been estimated as follows:
Share Notional Fair
price number value
of shares
Share price
outstanding
Value recognised on inception
(notional) 0.0561 86,470,588 4,851,000
Transaction Cost "Value
Payment Shares" 0.0561 (4,117,647) (231,000)
----------------------------- ---------------------------------
82,352,941 4,620,000
Gross proceeds of the Lanstead
Subscription, (being 15%) (20,588,235) (693,000)
----------------------------- ---------------------------------
Equity sharing agreement 61,764,706 3,927,000
Consideration received to
30 June 2017 0.0427 (6,862,746) (304,850)
Difference between placement
price of 5.61p and actual
consideration is processed
via share premium (542,150)
Realised Loss on derivative financial
asset during the period ending
30 June 2017 (1,208,008)
54,901,960 1,871,992
============================= =================================
Receivable within the next
12 months 1,403,994
Receivable after 12 months 467,998
8. Trade and other receivables 30 31 Dec
June 2016
2017
-------- -------------
Other receivables 64 38
Placing funds - 198
Amount receivable from Saudi
Arabia Joint Venture (Note
13.3) - 6
VAT 859 2,809
Deposits and prepayments 5 5
------ -------
928 3,056
====== =======
9. Share capital
Number
of shares* Share Deferred Share
000's capital shares premium Total
----------- --------- ----------- --------- -------
Issued and fully paid
At 1 January 2017 3.882,921 3,883 12,436 16,279 32,598
1 March 2017 Shareholders received one new ordinary
share for every 17 existing ordinary shares
At 1 March 2017 228,407 3,883 12,436 16,279 32,598
Issued
Share Equity Placement 17,825 303 697 1,000
Lanstead Share Equity 82,353 1,400 3,220 4,620
Lanstead Value Payment
Shares 4,118 70 161 231
Share issue costs - - - (356) (356)
Transfer realised
loss of derivative
financial asset (542) (542)
=========== ========= =========== ========= =======
At 30 June 2017 332,703 5,656 12,436 19,459 37,551
=========== ========= =========== ========= =======
Issued capital
Consolidation of ordinary shares
Following the Company's General Meeting on 1 March 2017, at the close of business on 1 March 2017 shareholders received one Ordinary Share of nominal value 1.7 pence each for every 17 Existing ordinary Shares of nominal value 0.1 pence each.
2017
On 2 March 2017, 104,295,888 shares of 1.7p were issued at a price of 5.61p per share. On issue of the shares, an amount of GBP4,077,969 was credited to the Company's share premium reserve.
The Company issued a total of 17,825,300 shares to investors for a total consideration of GBP 1,000,000.
Company issued 82,352,941 Shares to Lanstead Capital L.P. ('Lanstead'), for an aggregate consideration of GBP 4.620,000. In addition, the Company has entered into Equity Sharing Agreements with Lanstead which allow the Company to retain much of the economic interest in the Lanstead Subscription Shares. The Equity Sharing Agreements enable the Company to secure much of the potential upside and downside risk arising from anticipated near term news flow. Further details available in note 7.
The Company also agreed to make a value payment to Lanstead of 4,117,647 Ordinary Shares.
Restructuring of share capital into deferred shares
On 16 June 2015 the Company issued ordinary shares of 1p each in the capital of the Company which were sub-divided into one new ordinary share of 0.1p and one deferred share of 0.9p. The Deferred Shares have no value or voting rights. After the share capital reorganisation there were the same number of New Ordinary Shares in issue as there are existing Ordinary Shares. The New Ordinary Shares have the same rights as those currently accruing to the existing Ordinary Shares in issue under the Company's articles of association, including those relating to voting and entitlement to dividends.
Details of warrants outstanding as at 30 June 2017:
Grant date Expiry date Exercise price Number of warrants*
000's
4 July 2013 3 July 2018 35.7p 77
16 October 2013 15 October 2018 38.25p 65
2 December 2014 1 December 2017 17p 235
16 December 2014 15 December 2017 17p 324
18 March 2015 17 March 2018 17p 235
14 May 2015 13 May 2018 17p 99
19 June 2015 18 June 2018 13.6p 853
11 December 2015 10 December 2018 5.1p 2,580
22 March 2016 21 March 2019 5.95p 1,469
29 July 2016 28 July 2019 8.5p 2,241
--------------------
8,178
====================
These warrants were issued to advisers of the Group.
*Post share consolidation figures
Weighted Number
average ex. of warrants*
price 000's
------------------------- --------------
Outstanding warrants at 1 January
2017 9.80p 8,350
- granted -
- cancelled/expired/forfeited 51.00p 172
Outstanding warrants at 30
June 2017 8.92p 8,178
==============
10. Share options reserve
Details of share options outstanding as at 30 June 2017:
Grant Expiry date Exercise price Number
date of shares*
000's
---------------------- ---------------- ----------------------- -------- --------------------
13-Sep-12 12-Sep-18 68p 832
24-May-13 23-May-19 49.56p 59
03-Sep-13 02-Sep-18 49.98p 59
08-Oct-13 07-Oct-18 38.59p 21
08-Jan-14 07-Jan-20 31.96p 24
16-Jan-14 15-Jan-20 33.83p 6
01-Feb-14 31-Jan-20 32.13p 6
27-Mar-14 26-Mar-20 39.10p 1,596
04-Apr-14 03-Apr-20 31.11p 6
12-Sep-14 11-Sep-20 29.92p 132
20-Mar-15 19-Mar-21 22.44p 1,588
16-Jun-15 15-Jun-21 22.44p 382
12-Jan-16 11-Jan-22 7.14p 4,717
23-Feb-16 22-Feb-22 12.58p 176
05-Aug-16 05-Aug-22 10.20p 2,059
21-Mar-17 20-Mar-23 7.50p 9,535
--------------------
21,198
====================
*Post share consolidation
figures
30 June 31 Dec
2017 2016
Opening amount 1,474 1,212
Warrants issued costs - 164
Share options issued
to employees 40 77
Share options issued
to directors and key
management 73 204
Cancelled/expired/forfeited
warrants &options (66) (183)
-------- ----------------
Closing amount 1,521 1,474
======== ================
Weighted Number
average of shares*
ex. price 000's
----------- -------------
Outstanding options at 1
January 2017 19.90p 11,663
- granted 7.50p 9,535
- cancelled/expired/forfeited -
-----------
Outstanding options at 30
June 2017 14.30p 21,198
===========
*Post share consolidation figures
On 22 March 2017, 6,829,613 options were issued to persons who discharge director and managerial responsibilities ("PDMRs") and a further 2,705,509 options have been granted to other non-board members of the senior management team. The options have an exercise price of 7.5p, expire after 6 years, and vest in two equal annual instalments, the first upon the achievement of practical completion of the planned processing plant at the Tulu Kapi Gold Project and the second upon the achievement of nameplate capacity for a twelve-month period.
11. Trade and other payables
30 31
June Dec
2017 2016
------ ------
Accruals and other payables 1,691 1,640
Other loans 233 257
Payable to joint venture partner
(Note 13.4) 186 170
2,110 2,067
====== ======
Other loans are unsecured, interest free and repayable on demand.
12. Joint venture agreements
In May 2009, KEFI Minerals formed the Gold & Minerals exploration joint venture, "G&M" Joint Venture, with Saudi construction and investment group Abdul Rahman Saad Al-Rashid & Sons Company Limited ("ARTAR"). KEFI Minerals is the operating partner with a 40% shareholding of the G&M Joint Venture with ARTAR holding the other 60%.
KEFI Minerals provides the G&M Joint Venture with technical advice and assistance, including personnel to manage and supervise all exploration and technical studies. ARTAR provides administrative advice and assistance to ensure that the G&M Joint Venture remains in compliance with all governmental and other procedures.
13. Related party transactions
The following transactions were carried out with related parties:
13.1. Compensation of key management
The total remuneration of the Directors and other key management personnel was as follows:
Six Six
months months
ended ended
30 June 30 June
2017 2016
-------- --------
Directors' fees 281 240
Directors' other benefits 35 40
Share-based benefits to directors 58 82
Key management fees 102 125
Key management other benefits 20 17
Share-based benefits to key management 15 28
-------- --------
511 532
======== ========
13.2. Compensation of key management personnel
Share-based benefits
The Company has issued share options to directors and key management. On 27 March 2014, the Board approved a new share option scheme ("the Scheme") for directors, senior managers and employees. The Scheme formalises the existing policy that options may be granted over ordinary shares representing up to a maximum of 10 per cent of the Group's issued share capital. The Scheme options vest in equal annual instalments over a period of 2 years or on the performance obligations set at the time of issuing the options and expire after 6 years.
13.3 Receivable from
related parties
The Group 30 June 30 Dec
2017 2016
------- --------------
Name Nature of transactions Relationship
Jointly
Gold & Minerals Co. controlled
Limited Finance entity - 6
- 6
======= ==============
13.4 Payable to
related parties
The Group 30 June 30
2017 Dec
2016
----------------------- -------
Name Nature of transactions Relationship
Abdul Rahman Saad
Al-Rashid & Sons
Company Limited Jointly controlled
("ARTAR") Finance entity 186 170
186 170
======================= =======
14. Contingent liabilities
In 2006, EMED Mining Public Ltd acquired a proprietary geological database that covers extensive parts of Turkey and Greece and EMED transferred to the Company that part of the geological database that relates to areas in Turkey.
Under the agreement, the Company has undertaken to make a payment of approximately GBP51,100 (AUD105,000) for each tenement it is subsequently awarded in Turkey and which was identified from the database. The maximum number of such payments required under the agreement is four, resulting in a contingent liability of up to GBP204,400. These payments are to be settled by issuing shares in the Company. To date, only one tranche of shares have been issued under this agreement in June 2007 for GBP43,750 (AUD105,000).
On 13 August 2015, the Company created a fixed charge in favour of AIB Group UK Plc over amounts held in the Company's deposits accounts with the bank. The charge is in regard to time credit banking facilities provided by AIB Group (UK) Plc. At 30 June 2017, the balance in the deposit account was GBP20,015.
15. Legal allegation
A claim for damages of GBP9,000,000 (approximately
ETB249 million) had been lodged against the company
in 2014. The claim was based on the impact of
exploration field activities conducted between
1998 and 2006, a period which pre-dated the company's
involvement in the Tulu Kapi project. These exploration
activities comprised the construction of drill
pads and access tracks. No objections had been
made until 2014 when certain parties from outside
the Tulu Kapi district raised this matter and
initiated court action. Those parties have since
been removed by the Court rulings from the list
of plaintiffs. The Oromia Regional Supreme Court
in April 2017 rejected 95% of these claims as
having no basis in fact or law and reduced KEFI's
potential liability to c.GBP435,000 (ETB12,762,721).
Moreover, the company has appealed to the Federal
Supreme Court with regards to the remaining ETB12,762,721
on the basis that it remains firmly of the belief,
on legal advice and as previously reported, that
it has no contingent or actual liability, having
already settled any obligations when the matter
was originally closed by both the regulators
and the land occupiers. The Federal Supreme Court
last week officially admitted the company's appeal
after due review, and the case is expected to
be heard within the next two years.
16. Events after the reporting date
KEFI Minerals (Ethiopia) Limited ("KME") and the Federal Democratic Republic of Ethiopia have signed the shareholders' agreement (the "Shareholders' Agreement") and other foundation documentation for the incorporation, ownership and operation of Tulu Kapi Gold Mines Share Company Limited, which will result in TKM owning 100% of the Tulu Kapi Gold Project. The exploration projects outside the Tulu Kapi Mining Lease area are not part of TKM and remain 100% owned by KEFI. The Shareholders' Agreement sets out the parties' respective commitments to invest equity capital in TKM and the mechanisms for control of the development and operation of the Tulu Kapi Gold Project. Based on the latest project cost estimates, KEFI (via KME) will own circa 75% of the share capital of TKM and the Government of Ethiopia will own circa 25% (circa 20% for its investment of US$20 million for infrastructure required for the project and an additional 5% free carry).
After the reporting date the VAT refund owed by the Ethiopian authorities was received.
In July 2017 the company signed mandate letter and heads of terms for US$135 million of project funding with Oryx Management Limited ("Oryx") to finance and operate all the onsite infrastructure at the Company's Tulu Kapi Gold Project in Ethiopia (the "Project"). The planned financing package also includes funding finance charges during a 30--month construction and production ramp--up period.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR OKADKABKDPCB
(END) Dow Jones Newswires
September 27, 2017 02:00 ET (06:00 GMT)
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