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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Kropz Plc | LSE:KRPZ | London | Ordinary Share | GB00BZ1HLP69 | ORD 0.1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 1.25 | 1.00 | 1.50 | 1.50 | 1.25 | 1.50 | 36,119 | 08:00:05 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Chem,fertlizer Minrl Mng,nec | 0 | -66.64M | -0.0719 | -0.17 | 11.58M |
TIDMKRPZ
RNS Number : 7067N
Kropz PLC
26 September 2019
26 September 2019
Kropz plc
("Kropz" or the "Company")
Interim Results for the Period ended 30 June 2019
Kropz plc (AIM: KRPZ), an emerging African explorer and developer of plant nutrient feed minerals, announces its results for the six months ended 30 June 2019.
The full financial report is available online at the Company's website www.kropz.com.
Key financial indicators
-- Impairment in the value of property, plant, equipment, mine development costs and exploration assets at Kropz Elandsfontein (Pty) Ltd ("Elandsfontein") of US$49 million;
-- Cash at 30 June 2019 of US$17 million (as at 31 December 2018 US$30 million); and
-- Trade and other payables at 30 June 2019 of US$3 million (as at 31 December 2018 US$12 million).
Key corporate and operational developments during the period
Corporate
On 1 February 2019, the Company issued 1,357,080 new ordinary shares of GBP0.001 each in the capital of the Company at a price of 40 pence per share for a total consideration of GBP542,832 (equivalent to approximately US$710,000) and 1,116,544 warrants at an exercise price of 40 pence per warrant to certain advisers in lieu of cash fees arising from their involvement with the Company's admission to AIM on 30 November 2018 and the acquisition of Cominco Resources Limited ("Cominco"). The new ordinary shares were admitted to trading on AIM on 6 February 2019.
On 19 February 2019, the Company applied the provisions of section 176 of the BVI Business Companies Act 2004 to compulsorily redeem any outstanding ordinary shares of Cominco held by the remaining Cominco shareholders. Pursuant to the compulsory redemption, Kropz acquired the remaining 482,927 Cominco shares for which a further 803,315 ordinary shares were issued at a price of 40 pence per share for a total consideration of GBP321,326 (equivalent to approximately US$419,000). The new ordinary shares were admitted to trading on AIM on 22 February 2019. Following the compulsory redemption, the Company holds 100% of the issued share capital of Cominco.
Elandsfontein
During the period under review, Elandsfontein continued to work with Mintek, South Africa, and Eriez, USA, to undertake confirmatory pilot scale and other processing test work ("Test Work") to confirm the final processing design at Elandsfontein. DRA Mineral Projects ("DRA") was appointed to complete the engineering design.
Indications at 30 June 2019 were that the commissioning of the Elandsfontein plant was expected to be delayed at an anticipated additional cost of approximately US$20 million (inclusive of working capital costs, debt repayments and capital expenditure).
Hinda
The completed DRA Option Study has confirmed the potential to export circa 1.8Mtpa phosphate rock from the Hinda project out of the port of Pointe-Noire, as well as the potential viability of both the starter and optimised projects.
The Port Authority at Pointe-Noire have agreed to allocate a port site of increased dimensions to the Hinda project.
The ratification process for the signed Hinda Mining Investment Agreement ("MIA") has been advanced to the level of the Republic of Congo ("RoC") Supreme Court.
Aflao
A second phase of Mobile Metal Iron sampling was initiated in April 2019 at Aflao in Ghana. Samples were taken from the most prospective target area on a 100m by 500m grid. The samples were sent to SGS in Toronto for multi element analyses.
Key corporate and operational developments post period end
Corporate
On 27 June 2019, Kropz announced that it had raised US$4.34 million (GBP3.41 million), before expenses, by way of a placing of 19,364,659 ordinary shares of 0.1 pence each at a price of 17.6 per ordinary share, increasing the issued share capital to 283,406,307 ordinary shares. The net proceeds of the placing will be used to provide additional working capital and more specifically to further advance the programme of works being carried out at its Hinda and Aflao projects. The placing shares were issued and admitted to trading on AIM on 3 July 2019.
Elandsfontein
As announced on 12 September 2019 in an Elandsfontein update, the Test Work has indicated that a reverse flotation modification to the current circuit will produce a saleable product at lower grade than originally targeted. As a direct consequence of the prevailing depressed phosphate rock prices, an alternate process modification is being considered to deliver the required process efficiencies at viable economic returns. Further Test Work will be required to at least the end of 2019 to confirm this.
As a result of the above delay in recommissioning and current depressed phosphate rock prices, an impairment of US$ 49 million was made to the carrying value of property, plant, equipment, mine development costs and exploration assets in Elandsfontein.
The appeal against Elandsfontein's existing and valid integrated water use licence was set to be heard by the Water Tribunal on 11 September 2019, however the appellant requested that this be postponed. At the date of this report no date has been fixed for the hearing.
Hinda
On the Hinda project, four engineering companies have been approached, all of whom have expressed interest in participating in the tender process for the updated definitive feasibility study for the optimised project.
An amended Environmental Social Impact Assessment will be required in the RoC as a result of the addition of a gas pipeline and the inclusion of a dryer on site.
Aflao
Radiometric and drone surveys were also completed within the Aflao license area, with the results of all three stages of survey work being reviewed and compiled.
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) no 596/2014.
For further information visit www.kropz.com or contact:
Kropz Plc +44 (0) 1892 516 Ian Harebottle (CEO) 232 Grant Thornton UK Nominated Adviser LLP Richard Tonthat +44 (0) 20 7383 Samantha Harrison 5100 Hannam & Partners Joint Broker Andrew Chubb +44 (0)20 7907 Ernest Bell 8500 Mirabaud Securities Joint Broker Ltd Rory Scott +44 (0)20 3167 7220 Edward Haig-Thomas +44 (0)20 3167 7222 Tavistock Financial PR & IR (UK) Emily Moss +44 (0) 207 920 Jos Simson 3150 Oliver Lamb kropz@tavistock.co.uk Russell & Associates PR (South Africa) Charmane Russell +27 (0)11 880 3924 James Duncan charmane@rair.co.za
About Kropz plc
Kropz is an emerging African explorer and developer of plant nutrient feed minerals with phosphate projects in South Africa and the RoC and an exploration asset in Ghana. The vision of the Group is to become a leading independent phosphate rock producer and to develop into an integrated, mine-to-market plant nutrient company focusing on sub-Saharan Africa.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2019
30 June 31 December 2019 2018 Unaudited Audited Notes US$'000 US$'000 Non-current assets Property, plant, equipment and mine development 6 56,284 101,826 Exploration assets 7 38,398 40,772 Other financial assets 1,661 1,623 ----------- ------------ 96,343 144,221 ----------- ------------ Current assets Inventories 880 861 Amounts due from a director 17 28 33 Trade and other receivables 1,135 331 Cash and cash equivalents 16,561 30,457 ----------- ------------ 18,604 31,682 ----------- ------------ TOTAL ASSETS 114,947 175,903 ----------- ------------ Current liabilities Trade and other payables 3,156 11,956 Other financial liabilities 11 530 518 Current taxation 51 - ----------- ------------ 3,737 12,474 ----------- ------------ Non-current liabilities Shareholder loans 10 14,779 14,386 Other financial liabilities 11 29,537 29,551 Tax payable 246 66 Provisions 4,024 3,931 ----------- ------------ 48,586 47,934 ----------- ------------ TOTAL LIABILITIES 52,323 60,408 ----------- ------------ NET ASSETS 62,624 115,495 ----------- ------------ Shareholders' equity
Share capital 8 363 335 Share premium 8 143,127 142,026 Merger reserve (20,523) (20,523) Accumulated losses (46,819) (6,255) Foreign exchange translation reserve (180) (1,226) ----------- ------------ Total equity attributable to the owners of the Company 75,968 114,357 Non-controlling interests (13,344) 1,138 ----------- ------------ 62,624 115,495 ----------- ------------
The accompanying notes form part of the Condensed Consolidated Financial Statements.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHSED 30 JUNE 2019
Six months ended Period from 30 June 10 January to 31 December 2019 2018 Unaudited Audited Notes US$'000 US$'000 Revenue - - Other income 3 2 Operating expenses (4,475) (5,674) ----------- ----------------- Operating loss (4,472) (5,672) Finance income 12 882 382 Finance expense 13 (2,186) (2,321) Impairment losses 14 (48,900) - ----------- ----------------- Loss before taxation (54,676) (7,611) ----------- ----------------- Taxation 15 (246) (66) Loss after taxation (54,922) (7,677) ----------- ----------------- Loss attributable to: Owners of the Company (40,573) (6,255) Non-controlling interests (14,349) (1,422) ----------- ----------------- (54,922) (7,677) ----------- ----------------- Loss for the period (54,922) (7,677) Other comprehensive income: Items that may be subsequently reclassified to profit or loss * Exchange differences on translation of parent company financial statements from functional to presentation currency 70 (956) * Exchange differences on translating foreign operations 1,268 (270) ----------- ----------------- Total comprehensive loss (53,584) (8,903) ----------- ----------------- Attributable to: Owners of the Company (39,527) (7,481) Non-controlling interests (14,057) (1,422) ----------- ----------------- (53,584) (8,903) ----------- ----------------- Earnings per share attributable to owners of the Company: Basic and diluted (US cents) 16 (15.39) (25.45) ----------- -----------------
The accompanying notes form part of the Condensed Consolidated Financial Statements.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHSED 30 JUNE 2019
Foreign currency Total Share Share Merger translation Retained attributable Non-controlling Total capital premium reserve reserve earnings to owners interest equity US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 Balance at 10 January 2018 - - - - - - - - Total comprehensive loss for the period - - - (1,226) (6,255) (7,481) (1,422) (8,903) Issue of shares 335 143,297 14,878 - - 158,510 - 158,510 Costs of issuing shares - (1,271) - - - (1,271) - (1,271) Adjustments on acquisition of subsidiaries - - (35,401) - - (35,401) 2,560 (32,841) Transactions with owners 335 142,026 (20,523) - - 121,838 2,560 124,398 ---------- -------- --------- ------------ --------- -------------- ---------------- --------- Balance at 31 December 2018 335 142,026 (20,523) (1,226) (6,255) 114,357 1,138 115,495 ---------- -------- --------- ------------ --------- -------------- ---------------- --------- Total comprehensive profit / (loss) for the period - - - 1,046 (40,573) (39,527) (14,057) (53,584) Issue of shares 28 1,101 - - - 1,129 - 1,129 Acquisition of non-controlling interests - - - - 9 9 (425) (416) Share based payment charges - - - - - - - - Transactions with owners 28 1,101 - - 9 1,138 (425) 713 ---------- -------- --------- ------------ --------- -------------- ---------------- --------- Balance at 30 June 2019 363 143,127 (20,523) (180) (46,819) 75,968 (13,344) 62,624 ---------- -------- --------- ------------ --------- -------------- ---------------- --------- CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE SIX MONTHSED 30 JUNE 2019 Period from Six months 10 January ended to 30 June 31 December 2019 2018 Unaudited Audited US$'000 US$'000 Cash flows from operating activities Loss before taxation (54,676) (7,611) Adjustments for: Depreciation of property, plant and equipment 463 457 Impairment losses 48,900 - Finance income (214) (55) Finance costs 2,186 771 Fair value gains on game animals - 32 Operating cash flows before working capital changes (3,341) (6,406) Increase in trade and other receivables (814) (240) Decrease in inventories 1 -
(Decrease) / increase in payables (8,386) 1,989 Decrease in amounts due from / (to) related parties 5 (47) Increase in provisions - 534 Foreign currency exchange differences 24 (2,611) ----------- -------------- (12,511) (6,781) Income taxes paid (17) - Net cash flows used in operating activities (12,528) (6,781) ----------- -------------- Cash flows used in investing activities Purchase of property, plant and equipment (5) (505) Exploration and evaluation expenditure (49) - Decrease in loans receivable - 293 Acquisition of subsidiaries, net of cash acquired - 303 Finance income received 214 54 Net cash flows from investing activities 160 145 ----------- -------------- Cash flows from financing activities Finance costs paid (2,186) (771) Shareholder loan received - 696 Other financial liabilities (708) 867 Issue of ordinary share capital net of share issue costs 710 36,364 Net cash flows (used by) / from financing activities (2,184) 37,156 ----------- -------------- Net (decrease) / increase in cash and cash equivalents (14,552) 30,520 Cash and cash equivalents at beginning of the period 30,457 - Foreign currency exchange gains / (losses) on cash 656 (63) Cash and cash equivalents at end of the period 16,561 30,457 ----------- --------------
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHSED 30 JUNE 2019
1. General information
Kropz plc (the "Company") and its subsidiaries (together, the "Group") is an emerging African explorer and developer of plant nutrient feed phosphate projects in South Africa and the Republic of Congo (" RoC") and exploration assets in Ghana. The principal activity of the Company is that of a holding company for the Group, as well as performing all administrative, corporate finance, strategic and governance functions of the Group.
The Company was incorporated on 10 January 2018 and is a public limited company, with its ordinary shares admitted to the AIM Market of the London Stock Exchange on 30 November 2018 trading under the symbol, "KRPZ". The Company is domiciled in England and incorporated and registered in England and Wales. The address of its registered office is Suite 4F Easistore Building, Longfield Road, North Farm Estate, Tunbridge Wells TN2 3EY. The registered number of the Company is 11143400.
The Company entered into a number of agreements during 2018 to acquire phosphate assets and in turn become the holding company of the Group with interests in Ghana, South Africa and the RoC.
2. Basis of preparation
These interim consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting and in accordance with the accounting policies of the consolidated financial statements for the period ended 31 December 2018. They do not include all disclosures that would otherwise be required in a complete set of financial statements and should be read in conjunction with the 2018 annual report. The statutory financial statements for the period ended 31 December 2018 were prepared under IFRS and IFRIC interpretations as adopted by the European Union and in accordance with the requirements of the Companies Act 2006. They have been filed with the Registrar of Companies. The auditors reported on those financial statements; their Audit Report was unqualified but included a material uncertainty related to going concern.
The interim consolidated financial statements have been prepared under the historical cost convention, as modified for any financial assets which are stated at fair value through profit or loss. They are presented in United States Dollars, the presentation currency of the Company and figures have been rounded to the nearest thousand.
The interim financial information is unaudited and does not constitute statutory accounts as defined in the Companies Act 2006.
The interim financial information was approved and authorised for issue by the Board of Directors on 25 September 2019.
3. Going concern
Cash and cash equivalents totalled US$16.5 million as at 30 June 2019, of which US$15.8 million is committed to Kropz Elandsfontein. The Group has no current source of operating revenue and is therefore dependent on existing cash resources and future fund raisings to meet overheads and future exploration requirements as they fall due.
In July 2019, the Company raised US$4.34 million (GBP3.41 million) before expenses by way of a placing of ordinary shares to enable the Group to continue to fund its Hinda and Aflao exploration and development programme and fulfil its working capital requirements.
The directors have prepared a cash flow forecast which indicates that the Group will have sufficient liquidity to meet its forecast working capital requirements for at least 12 months from the date of this Interim Report, primarily being corporate costs and costs related to the Aflao and Hinda projects in order for the Group to meet its targeted objectives for these projects and cost of Elandsfontein test work currently underway.
Additional funding will be required at Elandsfontein prior to initiating the targeted upgrades to the processing plant, which are currently expected to require additional funding of approximately US$20 million with various options being considered by the Board on how and when best to source this additional funding.
The directors have reviewed the Group's overall position and outlook in respect of the matters identified above and are of the opinion that the operational and financial plans in place are achievable and accordingly the Group will be able to continue as a going concern and meet its obligations as and when they fall due for at least 12 months from the date of approval of these interim financial statements. Consequently, the Directors have concluded that it is appropriate to prepare the Group's Interim Consolidated Financial Statements on a going concern basis.
4. Significant accounting policies
Other than as noted below, the Company has applied the same accounting policies, presentation, methods of computation, significant judgements and the key sources of estimation of uncertainties in its interim consolidated financial statements as in its audited financial statements for the period ended 31 December 2018, which have been prepared in accordance with IFRS as adopted for use by the European Union.
These accounting policies will be adopted in the Group's full financial statements for the year ending 31 December 2019.
Changes in accounting policy
IFRS 16
The Group has adopted IFRS 16 which became effective on 1 January 2019. The standard replaces IAS 17 'Leases' and for lessees eliminates the classifications of operating leases and finance leases. Except for short-term leases and leases of low-value assets, right-of-use assets and corresponding lease liabilities are recognised in the statement of financial position. Straight-line operating lease expense recognition is replaced with a depreciation charge for the right-of-use assets (included in operating costs) and an interest expense on the recognised lease liabilities (included in finance costs). In the earlier periods of the lease, the expenses associated with the lease under IFRS 16 will be higher when compared to lease expenses under IAS 17. However, EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) results improve as the operating expense is now replaced by interest expense and depreciation in profit or loss. For classification within the statement of cash flows, the interest portion is disclosed in operating activities and the principal portion of the lease payments are separately disclosed in financing activities.
Impact of adoption
The adoption of the standard did not have any impact on the Group.
5. Segment information
Operating segments
Up to the date of approval of the nancial information for the period ended 30 June 2019, the Board of Directors considered that the Group had one operating segment, being that of phosphate mining. Accordingly, all revenues, operating results, assets and liabilities are allocated to this activity.
Geographical segments
Since the acquisition of First Gear Exploration Limited in June 2018, and the acquisitions of Kropz SA (Pty) Limited, Kropz Elandsfontein (Pty) Ltd, Elandsfontein Land Holdings (Pty) Ltd and Cominco Resources Limited in November 2018, the Group has operated in three principal geographical areas - South Africa, Ghana and the RoC.
The Group's non-current assets by location of assets are detailed below.
South Africa Ghana RoC Group 30 June 2019 US$'000 US$'000 US$'000 US$'000 Total non-current assets 56,536 62 39,745 96,343 ------------- --------- ---------- --------- South Africa Ghana RoC Group 31 December 2018 US$'000 US$'000 US$'000 US$'000 Total non-current assets 103,441 62 40,718 144,221 ------------- --------- ---------- --------- 6. Tangible assets - Property, plant, equipment and mine development 30 June 30 June 30 June 31 Dec 31 Dec 31 Dec 2019 2019 2019 2018 2018 2018 Accumulated Depreciation Carrying Accumulated Carrying Cost and impairment value Cost Depreciation value US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 Buildings and infrastructure Land 2,157 - 2,157 2,108 - 2,108 Buildings 11,484 (5,519) 5,965 11,217 (7) 11,210 Capitalised road costs 9,209 (5,528) 3,681 8,996 (1,499) 7,497 Capitalised electrical sub-station costs 3,995 (2,352) 1,643 3,903 (564) 3,339 Machinery, plant & equipment Critical spare parts 1,212 - 1,212 1,185 - 1,185 Plant and machinery 55,615 (25,952) 29,663 54,329 (67) 54,262 Furniture & fittings 45 (41) 4 44 (40) 4 Geological equipment 49 (49) - 48 (47) 1 Office equipment 36 (10) 26 35 (8) 27 Other fixed assets 1 (1) - 1 - 1 Motor vehicles 133 (121) 12 130 (106) 24 Computer equipment 44 (37) 7 38 (33) 5 Mine development 19,167 (9,206) 9,961 18,724 - 18,724 Stripping activity costs 3,264 (1,568) 1,696 3,188 - 3,188 Game animals 257 - 257 251 - 251 Total 106,668 (50,384) 56,284 104,197 (2,371) 101,826 -------- ---------------- --------- -------- ------------------ ---------
Reconciliation of property, plant, equipment and mine development - Period ended 30 June 2019
Foreign Opening Impairment Depreciation exchange Closing Balance Additions provision charge gain/loss balance US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 Buildings and infrastructure Land 2,108 - - - 49 2,157 Buildings 11,210 - (5,511) (1) 267 5,965 Capitalised road costs 7,497 - (3,686) (308) 178 3,681 Capitalised electrical sub- station costs 3,339 - (1,642) (133) 79 1,643 Machinery, plant & equipment Critical spare parts 1,185 - - - 27 1,212 Plant and machinery 54,262 - (25,884) (2) 1,287 29,663 Furniture & fittings 4 - - - - 4 Geological equipment 1 - - (1) - - Office equipment 27 - - (2) 1 26 Other fixed assets 1 - - - (1) - Motor vehicles 24 - - (12) - 12 Computer equipment 5 5 - (4) 1 7 Mine development 18,724 - (9,206) - 443 9,961 Stripping activity costs 3,188 - (1,568) - 76 1,696 Game animals 251 - - - 6 257 Total 101,826 5 (47,497) (463) 2,413 56,284 --------- ---------- ----------- ------------- ----------- ---------
Reconciliation of property, plant, equipment and mine development - Period ended 31 December 2018
Foreign Opening Depreciation exchange Closing Balance Additions Disposals charge gain/loss balance US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 Buildings and infrastructure Land - 2,182 - - (74) 2,108 Buildings 11,608 (2) (396) 11,210 Capitalised road costs - 8,072 - (302) (273) 7,497 Capitalised electrical sub-station costs - 3,592 - (131) (122) 3,339 Machinery, plant & equipment Critical spare parts - 1,256 (28) - (43) 1,185 Plant and machinery - 56,057 - - (1,795) 54,262 Furniture & fittings - 5 - (1) - 4 Geological equipment - 3 - (2) - 1 Office equipment - 30 - (2) (1) 27 Other fixed assets - 1 - - - 1 Motor vehicles - 37 - (12) (1) 24 Computer equipment - 11 - (5) (1) 5 Mine development - 19,384 - - (660) 18,724 Stripping activity costs - 3,300 - - (112) 3,188 Game animals - 293 - - (42) 251 Total - 105,831 (28) (457) (3,520) 101,826 ---------- ---------- ---------- ------------- ----------- ---------
Kropz Elandsfontein has a fully drawn down project financing facility with BNP Paribas for USD30 million. BNP Paribas has an extensive security package over all the assets of Kropz Elandsfontein and Elandsfontein Land Holdings as well as the share investments in those respective companies owned by Kropz SA.
7. Intangible assets - exploration and evaluation costs 30 June 30 June 30 June 31 Dec 31 Dec 31 Dec 2019 2019 2019 2018 2018 2018 Amort- isation Carrying Amort- Carrying Cost and impairment value Cost isation value US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 Capitalised costs 39,801 (1,403) 38,398 40,772 - 40,772 --------- ---------------- ----------- --------- ---------- -----------
Reconciliation of exploration assets
Foreign Opening Impairment exchange Closing Balance Additions provision loss balance US$'000 US$'000 US$'000 US$'000 US$'000 Period ended 30 June 2019 Capitalised costs 40,772 49 (1,403) (1,020) 38,398 ------------- ---------- ------------- ---------- --------- Amounts transferred Foreign Opening on acquisition exchange Closing Balance Additions of subsidiaries loss balance US$'000 US$'000 US$'000 US$'000 US$'000 Period ended 31 December 2018 Capitalised costs - 42,083 (1,267) (44) 40,772 ---------- ---------- ----------------- ---------- --------- 8. Share capital
Shares were issued during the period as set out below:
Number of Share Share Merger Total shares capital premium reserve US$'000 US$'000 US$'000 US$'000 On incorporation 1 - - - - Issued to Kropz International S.a.r.l. ("Kropz International") 49,999 - 70 - 70 Subdivision of shares 450,000 - - - - Issued to Kropz International 163,221 - 117 - 117 Issued to Kropz International 1 - - - - Issued to Kropz International 93,260,034 120 69,320 3,809 73,249 Issued to ARC Fund 5,499,124 7 2,811 - 2,818 Capitalisation of debt 9,875,698 13 5,049 - 5,062 Conversion of Loan Note 6,902,148 9 2,520 - 2,529 Offer for Cominco 55,669,176 71 28,461 - 28,532 Placing and Subscription shares 68,359,376 88 34,949 - 35,037 Further acceptances of Offer for Cominco 21,652,475 27 - 11,069 11,096 Cost of issuing shares - - (1,271) - (1,271) Adjustments on acquisition of subsidiaries - - - (35,401) (35,401) -------------- --------- ---------- ----------- ---------- At 31 December 2018 261,881,253 335 142,026 (20,523) 121,838 -------------- --------- ---------- ----------- ---------- Issue of shares to advisers 1,357,080 18 692 - 710 Issue of shares on compulsory redemption of Cominco minorities 803,315 10 409 - 419 -------------- ------ ---------- ----------- ---------- At 30 June 2019 264,041,648 363 143,127 (20,523) 122,967 -------------- ------ ---------- ----------- ----------
On 1 February 2019, the Company issued 1,357,080 new ordinary shares of GBP0.001 each in the capital of the Company at a price of 40 pence per share for a total consideration of GBP542,832 (equivalent to approximately US$710,000) and 1,116,544 warrants at an exercise price of 40 pence per warrant to certain advisers in lieu of cash fees arising from their involvement with the Company's admission to AIM on 30 November 2018 and the acquisition of Cominco. The new ordinary shares were admitted to trading on AIM on 6 February 2019.
On 19 February 2019, the Company applied the provisions of section 176 of the BVI Business Companies Act 2004 to compulsorily redeem any outstanding ordinary shares of Cominco ("Cominco Shares") held by the remaining Cominco shareholders ("Compulsory Redemption"). Pursuant to the Compulsory Redemption, Kropz acquired the remaining 482,927 Cominco Shares for which a further 803,315 ordinary shares were issued at a price of 40 pence per share for a total consideration of GBP321,326 (equivalent to approximately US$419,000). The new ordinary shares were admitted to trading on AIM on 22 February 2019. Following the Compulsory Redemption, the Company holds 100% of the issued share capital of Cominco.
A difference of approximately US$9,000 arose between the consideration paid and the amount by which the non-controlling interests have been adjusted. This has been recognised directly in equity and attributed to the owners of the parent.
Subsequent to 30 June 2019, the Company issued further shares as follows:
On 3 July 2019, the Company raised US$4.34 million (GBP3.41 million) before expenses by way of a placing (the "Placing") for 19,364,659 ordinary shares of 0.1 pence each at a price of 17.6 pence per ordinary share (the "Placing Shares").
The net proceeds of the Placing will be used to provide additional working capital and more specifically to further advance the programme of works being carried out at its Hinda and Aflao projects.
The Placing Shares were admitted to trading on AIM on 3 July 2019. The Placing Shares were issued as fully paid and rank pari passu in all respects with the existing ordinary shares.
Following the issue of the Placing Shares and their admission to AIM, the Company has 283,406,307 ordinary shares in issue.
Share based payment arrangements
Equity warrants
The Company issued 1,116,544 equity warrants over ordinary shares in the Company during the period, as more fully described above (period ended 31 December 2018: 83,456 equity warrants). No equity warrants have been exercised or forfeited. Accordingly, 1,200,000 equity warrants remained in place at 30 June 2019 (31 December 2018: 83,456 equity warrants).
The warrants were valued at the period end using a Black-Scholes valuation model. The charge to profit and loss during the year was US$nil due to the immateriality of the value of the warrants for the period ended 30 June 2019 (31 December 2018: US$nil).
9. Key management personnel remuneration
The remuneration for each Director and Key Management Personnel of the Group during the period was as follows:
Short-Term Benefits Period ended 30 June Base Salary 2019 US$ Bonus Options Total US$ US$ US$ Executive directors Ian Harebottle 205,326 - - 205,326 Mark Summers 139,011 - - 139,011 ------------ --------- ----------- ---------- 344,337 - - 344,337 ------------ --------- ----------- ---------- Non-executive directors Lord Robin Renwick 29,649 - - 29,649 Linda Beal 24,121 - - 24,121 Mike Daigle 31,677 - - 31,677 Machiel Reyneke - - - - Michael Nunn - - - - ------------ --------- ----------- ---------- 85,447 - - 85,447 ------------ --------- ----------- ---------- Total directors' remuneration 429,784 - - 429,784 ------------ --------- ----------- ---------- Executives Michelle Lawrence 83,749 - - 83,749 83,749 - - 83,749 ------------ --------- ----------- ---------- Short-Term Benefits Period ended 31 December Base Salary Bonus Options Total 2018 US$ US$ US$ US$ Executive directors Ian Harebottle 341,589 - - 341,589 Mark Summers 39,035 10,430 - 49,465 ------------ ----------- --------- ---------- 380,624 10,430 - 391,054 ------------ ----------- --------- ---------- Non-executive directors Lord Robin Renwick 7,961 - - 7,961 Linda Beal 3,185 - - 3,185 Mike Daigle 3,185 - - 3,185 Machiel Reyneke - - - - Michael Nunn - - - - ------------ ----------- --------- ---------- 14,331 - - 14,331
------------ ----------- --------- ---------- Total directors' remuneration 394,955 10,430 - 405,385 ------------ ----------- --------- ---------- Executives Michelle Lawrence 22,273 10,430 - 32,703 Nicola Taylor 42,043 - - 42,043 ------------ ----------- --------- ---------- 64,316 10,430 - 74,746 ------------ ----------- --------- ----------
The following ESOP options, which were issued at the time of admission to AIM as share-based payment arrangements, were outstanding at the period ended 30 June 2019:
Name Expiry Date Exercise Price Number of Options (pence) ------------------- ------------- --------------- ------------------ 28 November Ian Harebottle 2028 0.1 3,362,609 28 November Mark Summers 2028 0.1 3,362,609 28 November Michelle Lawrence 2028 0.1 1,465,137 ------------------ 8,190,355 ------------------ 10. Shareholder loans payable 30 June 31 December 2019 2018 US$'000 US$'000 ARC Fund 14,779 14,386 --------- ------------
The loans: (i) are US$ denominated but any payments will be made in ZAR at the then current exchange rate; (ii) carry interest at monthly US LIBOR plus 3 per cent; and (iii) are repayable by no later than 1 January 2035 (or such earlier date as agreed between the parties to the shareholder agreements).
11. Other financial liabilities 30 June 31 December 2019 2018 US$'000 US$'000 BNP Paribas 29,537 29,551 Greenheart Foundation 530 517 Other loans - 1 --------- ------------ Total 30,067 30,069 --------- ------------ Non-current financial liabilities 29,537 29,551 Current financial liabilities 530 518 ------- ------- Total 30,067 30,069 ------- -------
Kropz Elandsfontein has a fully drawn down project financing facility with BNP Paribas for USD30 million. BNP Paribas has an extensive security package over all the assets of Kropz Elandsfontein and Elandsfontein Land Holdings as well as the share investments in those respective companies owned by Kropz SA.
12. Finance income Six months Period ended ended 30 June 31 December 2019 2018 US$'000 US$'000 Interest income 214 382 Foreign exchange gains 668 - Total 882 382 ----------- ------------- 13. Finance expense Six months Period ended ended 30 June 31 December 2019 2018 US$'000 US$'000 Shareholder loans 395 409 Foreign exchange losses - 1,555 Bank debt 1,791 357 Total 2,186 2,321 ----------- ------------- 14. Impairment losses
As announced on 12 September 2019 in an Elandsfontein update, Test Work confirmed that a reverse flotation modification to the current circuit would produce a saleable product at lower grade than originally targeted. As a direct consequence of the prevailing depressed phosphate rock prices, an alternate process modification is being considered to deliver the required process efficiencies at viable economic returns and further test work will be required to at least the end of 2019 to confirm this.
As a result of the above delay in recommissioning and current depressed phosphate rock prices, an impairment of US$49 million was made to the carrying value of property, plant, equipment, mine development costs and exploration assets in Elandsfontein.
The impairment was allocated as follows:
US$'000 Property, plant, equipment and mine development assets 47,497 Exploration assets 1,403 -------- Total 48,900 -------- 15. Taxation Major components of tax charge Six months Period ended ended 30 June 31 December 2019 2018 US$'000 US$'000 Deferred Originating and reversing temporary differences - - Current tax UK tax in respect of current period 246 - Local income tax recognised in respect of prior periods - 66 Total 246 66 ----------- -------------
The Group had losses for tax purposes of approximately US$33.5 million (US$27.8 million as at 31 December 2018) which, subject to agreement with taxation authorities, are available to carry forward against future profits.
16. Earnings per share
The calculations of basic and diluted earnings per share have been based on the following loss attributable to ordinary shareholders and weighted average number of ordinary shares outstanding:
Six months Period ended ended 30 June 31 December 2019 2018 US$'000 US$'000 Loss attributable to ordinary shareholders (40,573) (6,255) Weighted average number of ordinary shares in Kropz plc 263,591,748 24,575,156 Basic and diluted earnings per share (US cents) (15.39) (25.45) -------------- ------------- 17. Related party transactions
Details of the Key Management Personnel remuneration and shareholder loans are explained in Notes 9 and 10. In addition, the following transactions were carried out with related parties:
Related party balances
Loan accounts - Owed (to) / by related parties
30 June 31 December 2019 2018 US$'000 US$'000 ARC Fund (14,779) (14,386) M Nunn 28 33 Others - (1) Total (14,751) (14,354) --------- ------------
M Nunn repaid the loan owing in September 2019.
Related party balances
Interest paid to / (received from) related parties
Period ended Period ended 30 June 31 December 2019 2018 US$'000 US$'000 Kropz International - 345 ARC Fund 395 64 Total 395 409 ------------- -------------
The ARC Fund, a substantial shareholder, agreed to subscribe for 14,497,848 new ordinary shares in the placing referred to in Note 8, bringing its aggregate holding to 139,600,912 ordinary shares (representing 49.3 per cent. of the so enlarged issued share capital).
Kropz International, a substantial shareholder of Kropz, agreed to subscribe for 3,345,657 new ordinary shares in the placing, bringing its aggregate holding to 54,933,474 ordinary shares (representing 19.4 per cent. of the so enlarged issued share capital).
Consequently, the subscriptions of the ARC Fund and Kropz International are related party transactions pursuant to Rule 13 of the AIM Rules. Mike Nunn, a director of the Company, is the beneficial owner of Kropz International and Machiel Reyneke, a director of the Company, is the representative of the ARC Fund. Accordingly, neither was involved in the approval of the placing by the Company's board.
18. Seasonality of the Group's business
There are no seasonal factors which materially affect the operations of any company in the Group.
19. Events after the reporting period
Other than the placing in July 2019, described in Note 8, the impairment of the property, plant, equipment, mine development costs and exploration assets in Kropz Elandsfontein (Pty) Ltd as set out in Note 14 and M Nunn repaying the loan owing to the Group as set out in Note 17, there were no other events occurring since 30 June 2019 requiring disclosure herein.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
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September 26, 2019 02:01 ET (06:01 GMT)
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