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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Serabi Gold Plc | LSE:SRB | London | Ordinary Share | GB00BG5NDX91 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -3.00 | -4.69% | 61.00 | 60.00 | 62.00 | 64.00 | 61.00 | 64.00 | 212,111 | 15:18:21 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Gold Ores | 58.71M | -983k | -0.0130 | -46.92 | 46.2M |
Hot Features
Premium
TIDMSRB
For immediate release
29 March 2019
Serabi Gold plc
("Serabi" or the "Company")
Audited Results for the year ended 31 December 2018
Serabi (AIM:SRB, TSX:SBI), the Brazilian focused gold mining and
development company, today releases its audited results for the year
ended 31 December 2018.
Key Financial Information
SUMMARY FINANCIAL STATISTICS FOR THE THREE AND TWELVE
MONTHSING 31 DECEMBER 2018
--------------------------------------------------------------------------------------
12 months to 3 months to 12 months to 3 months to
31 Dec 2018 31 Dec 2018 31 Dec 2017 31 Dec 2017
US$ US$ US$ US$
--------------- ------------- ------------ ------------------- -------------------
Revenue 43,261,743 10,037,906 48,449,868 12,224,818
Cost of Sales (31,101,016) (7,447,624) (32,965,498) (8,407,318)
------------ -----------
Gross Operating
Profit 12,160,727 2,590,282 15,484,370 3,817,500
Administration
and share
based
payments (5,867,918) (1,792,903) (5,711,046) (1,734,751)
------------ ----------- ------------- --- ------------- ---
EBITDA 6,292,809 797,379 9,773,324 2,082,749
Depreciation
and
amortisation
charges (9,004,411) (2,856,127) (10,465,283) (2,919,436)
------------ ----------- ------------- --- ------------- ---
Operating
(loss)/profit
before finance
and tax (2,711,602) (2,058,748) (691,959) (836,687)
------------ ----------- ------------- --- ------------- ---
Loss after tax (5,754,541) (3,023,431) (2,397,903) (1,627,274)
------------ ----------- ------------- --- ------------- ---
Earnings per
ordinary share
(basic) (11.20 cents) (5.13 cents) (6.86 cents) (4.60 cents)
------------- ------------ ------------------- -------------------
Average gold
price received US$1,258 US$1,213 US$1,244 US$1,265
As at
31 December As at
2018 31 December 2017
--------------- ------------- ------------ ------------------- -------------------
Cash and cash
equivalents 9,216,048 4,093,866
Net assets 69,110,287 60,770,712
Cash Cost and
All-In
Sustaining Cost
("AISC")
---------------
12 months to 12 months to
31 December 2018 31 December 2017
--------------- ------------- ------------ ------------------- -------------------
Gold production
for cash cost
and AISC
purposes 37,108 37,004
------------- ---- ------------- ----
Total Cash Cost US$821 US$799
of production
(per ounce)
------------------- -------------------
Total AISC of US$1,093 US$1,071
production
(per ounce)
------------------- -------------------
Financial Highlights
-- Cash Cost for the year of US$821 per ounce.
-- All-In Sustaining Cost for the year of US$1,093 per ounce.
-- EBITDA of US$6.3 million
-- Post tax loss of US$5.75. million reflecting lower level of gold sales
realised during the period compared with 2017. The sales shortfall
reflects the timing between production and sale recognition and will be
recorded in 2019.
-- Loss per share of 11.20 cents for 2018.
-- Cash holdings of US$9.2 million at 31 December 2018 (31 December 2017:
US$4.1 million), had increased to US$12.8 million by the end of January
2019.
-- Average gold price of US$1,258 received on gold sales in 2018.
-- Completion of share placings in second quarter 2018 raising more than
US$23.5 million for exploration and activity and ongoing development of
Coringa project.
2019 Guidance
-- 2019 production is forecast to be in the range of 40,000-44,000 ounces.
Operational Highlights
-- Annual gold production totalling 37,108 ounces is an improvement on 2017
production (2017: 37,004 ounces).
-- Fourth quarter gold production of 10,256 ounces of gold represents record
quarterly production for Serabi.
-- Mine production in 2018 totalling 162,722 tonnes at 7.29 g/t of gold,
with the highest level of mined tonnage for 2018 achieved in fourth
quarter with a total of 44,257 tonnes at 7.45 grams per tonne ("g/t") of
gold.
-- 168,253 tonnes processed through the plant in 2018 for the combined
mining operations, with an average grade of 7.06 g/t of gold.
-- 45,548 tonnes of run of mine ("ROM") ore processed through the plant from
the combined Palito and Sao Chico orebodies during the fourth quarter
with an average grade of 7.39 g/t of gold, representing the highest
quarterly throughput for the year.
-- 10,371 metres of horizontal mine development completed in the year, with
2,460 metres of horizontal development completed during the fourth
quarter.
-- Successful factory testing of ore sorter completed in December 2018 and
the unit is now in transit to site with commissioning planned for the
second half of the year.
Exploration and Development Highlights
-- A series of discrete "apparent conductivity" anomalies have been
delineated by the analysis of the airborne magnetic and electromagnetic
("VTEM") survey flown during the third quarter of 2018. These anomalies
are indicative of probable sulphide bodies which the Company hopes will
be gold bearing.
-- Identification of the "Cinderella" anomaly, a chargeability and
conductive high extending over seven kilometres, which is coincident with
a strong magnetic anomaly defined by the airborne VTEM survey --
Cinderella is the most significant of a number of anomalies around Sao
Chico identified by an Induced Polarisation (IP) terrestrial geophysics
programme completed at Sao Chico in the fourth quarter.
-- Environmental Impact Assessment ("EIA") for the Coringa project approved
by State Environmental Agency ("SEMAS") and public hearings now being
planned.
-- Mineral Resources for the Coringa project increased to 514,000 ounces
representing a 37% increase over the previously disclosed estimation (as
of May 3, 2017), following completion of a surface drilling programme of
approximately 7,000 metres.
-- Completion of a 4,343 line kilometre airborne HeliTEM Electro-magnetic
("EM") and Magnetic survey.
-- Completion of 80 line kilometres of a terrestrial Induced Polarisation
("IP") geophysical survey.
-- 4,237 metres of surface exploration drilling completed over the Sao Chico
deposit, successfully intersecting the strike extension of the Sao Chico
orebody up to 500 metres west of the current mine limit.
-- 1,520 metres of surface drilling at the Palito deposit, targeting the
north extension of the main G3 vein, with the most significant
intersection recording 19 g/t of gold over a width of 0.55 metres.
-- Drilling at Palito confirms northerly and southerly extensions of the key
Pipocas and G3 veins and southerly extensions in the Chico da Santa area.
Key Objectives for 2019
--Building an increase in mineral resources and setting the platform for
future production growth in 2020.
--Continue the permitting process for Coringa to allow construction to
commence during the fourth quarter of 2019.
--Continue, and accelerate, the current drilling programme at Palito to
test the strike extension of orebodies beyond the current resource
limits.
--Commence a similar drill and surface geophysics campaign at Sao Chico
to test the five kilometre trend that hosts the Sao Chico deposit as
well as multiple historic artisanal mines along its length.
--Optimise mine planning and development plans for the Coringa project
to improve the economics and the projected life.
--Continue to evaluate M&A opportunities in the region and across
Brazil.
Mike Hodgson, CEO of Serabi commented,
"2018 has been a very satisfying year operationally and with a strong
first half of the year, and a record fourth quarter, the Company
exceeded 2017 production and this momentum has been maintained into the
first months of 2019. Both orebodies have performed well and mine
production has continued to exceed plant capacity. During 2018 we began
a process to improve the plant's production capabilities, firstly by
commissioning a 'scrubbing system' to independently feed stockpiled gold
bearing (3g/t Au) flotation tailings to supplement that daily production
of mined ore. The processing of this material will contribute to an
improved level of gold production for this year and our guidance is for
40,000-44,000 ounces for 2019. We are also anticipating the
commissioning of an ore sorter during the second part of the year. The
ore sorter will help screen out some waste that despite our very
selective mining methodology, inevitably still enters the mill feed and
consumes precious plant capacity and we can increase mining rates to
take advantage of this capacity. Whilst we are not forecasting
production benefits from the ore sorter in 2019, we are planning for its
impact to be significant in 2020.
"The last 12 months have also yielded some exciting exploration news,
with results, particularly around Sao Chico, being better than expected.
The surface and ground geophysics results around Sao Chico are the best
we have seen on our exploration tenements and I am excited by the
significant growth potential that we continue to identify. At our
Coringa project we are maintaining progress in advancing the permitting
of this project and have recently announced an increase in the mineral
resources of 37 per cent. We are now working on a Preliminary Economic
Assessment the initial results of which are expected to be available
before the end of the second quarter.
"Looking at our year end and the fourth quarter financial performance,
whilst gold production achieved in the fourth quarter of 10,256 ounces
was a record quarterly level, a significant portion of the sales have
only been recognised during the first quarter of 2019. Gold sales
recognised in the fourth quarter were only for 8,043 ounces which has
affected the revenue achieved in the fourth quarter and therefore
profitability. The unsold production comprising copper/gold concentrate
and gold bullion was held as inventory at the end of the year and the
value of inventory has increased from US$2.3 million at the end of
September 2018 to US$3.8 million at the end of December 2018 reflecting
this higher level of unsold production.
"This production has now been sold and proceeds received which have
helped to improve the cash position of the company and by the end of
February 2019 the Group's cash holdings had increased by approximately
US$3 million to over US$12.1 million.
"As we approach the end of the first quarter of 2019, I am pleased to
confirm that we have enjoyed an excellent start to the year. Gold
production will again be in excess of 10,000 ounces for the quarter
whilst sales realised will total over 12,000 ounces."
"Our cash costs and AISC had seen a modest increase year on year and I
am very hopeful that, with the increased production that we expect to
generate in 2019, we will see a reduction in these as we spread our cost
base over a larger level of gold production. We did experience some
exceptional expenditure during the year particularly in undertaking work
to bring our tailings ponds into conformity with updated legislative
requirements and introduced following the events at Mariana in 2015 and
we do have a fully compliant and licenced tailings facility. I do not
expect a similar level of expenditure, which was in excess of US$1
million, being required in 2019, notwithstanding that recent events at
Brumadinho.
"We have, however, taken the decision to amend the Environmental Impact
Assessment for the Coringa project to incorporate filtration and dry
stacking of mine tailings, and therefore dispense with the requirement
for a tailings dam. Whilst this EIA, which was inherited having already
been submitted by the previous operator, has now been approved by the
State Environmental Agency, we feel that, for a new mining project, such
a variation will eliminate a significant perceived area of risk and thus
simplify the permitting and financing process. Successful studies into
the viability of using a filtration plant and stacking of the dried mine
tails were completed during 2018 so the work to complete the variation
submission is already well advanced.
Chairman's Statement
The past 12 months have seen the start of what, I hope, will be a
sustained period of growth for the Company. The acquisition of the
Coringa project at the end of 2017 provided the initial impetus and
following the successful equity financings completed in the second
quarter of 2018, the Company has been able to undertake an aggressive
and highly encouraging exploration programme over the past nine months.
The highlights of this exploration work, to date, have been the
identification of significant new growth potential in and around the Sao
Chico deposit and a significant enhancement of the geological resource
at Coringa with an overall increase of 37 per cent in the total Measured,
Indicated and Inferred Resources. These are certainly encouraging signs
that the Company's near term objectives, of being a 100,000 ounce per
annum producer with a global gold resource of more than two million
ounces, are well within reach.
The current mining and processing operations of the Palito Complex
continued to perform well during the year and overall production of
37,108 ounces represented an improvement on 2017 levels. For 2019, the
Company's production guidance is between 40,000 and 44,000 ounces with
the improvements expected to be generated from improved control of
mining dilution, resulting in improved head-grades, the increased
processing rates of stockpiled material, particularly the historic
flotation tailings. In the second half of the year, the Company also
plans to be commissioning of an ore-sorter which is expected to liberate
processing capacity within the current plant and have a significant
production impact for 2020.
The real step change in production will begin during 2020 with the
development of the Coringa gold project located approximately 200
kilometres to the south of the Palito Complex. During the year the
Company has made steady progress with the permitting and licensing of
this project with trial mining licences being issued in May 2018 and at
the end of the year the approval of the state environmental authority
("SEMAS") of the Environmental Impact Assessment ("EIA") that had been
submitted to them at the end of 2017. This approval has allowed the
process of arranging the required public hearings to begin, and if there
is a positive outcome from thes, this will clear the way for the award
by SEMAS of the first, and generally the most contentious licencing
stage, the Preliminary Licence ("Licencia Previa" or "LP"). This will
allow the Company to engage consultants to prepare and present the
technical submissions to support the application for the Installation
Licence which is required before construction can commence.
In the meantime, the Company has been undertaking further exploration
around the Coringa project and a diamond drilling campaign completed in
February 2019 has contributed to a 37 per cent increase in the global
gold resource of the project. This is extremely encouraging and may,
potentially, extend the life of mine significantly beyond the initial
five years projected by the feasibility study published Anfield Gold,
the previous owners, in September 2017.
The Company has also enjoyed significant exploration success with the
regional and near mine programmes carried out during 2018. Most
significant of these was the airborne magnetic and electromagnetic
("VTEM") survey flown in July 2018. This had been long awaited and, by
complementing similar surveys undertaken in 2008 and 2011, it now means
the entire 43,000 hectare tenement, that comprises the Palito Complex,
has been covered by airborne VTEM. The survey results have highlighted
the presence of numerous pronounced magnetic anomalies, most notably a
major east-west lineament crossing the entire tenement. This feature is
extremely interesting and there are a significant number of
electromagnetic anomalies lying on the flanks of this magnetic high.
The survey also identified an extremely interesting electromagnetic
("EM") anomaly trending north-south and located to the south east and
east of the Sao Chico tenement. The Company's current ground geophysics
and drill programmes have not extended out this far and this is
therefore untested ground. As a completely new find and considering
that it extends for more than 10 kilometres, is a very exciting
development.
However, the area of our near term focus will be what has been
christened the Cinderella zone, a north east to south west trending
feature extending over seven kilometres and traversing the south east
corner of the Sao Chico mining tenement. This has developed into a very
compelling exploration target, and our exploration team has worked
quickly to develop, and have already begun, geochemical survey
programmes that will allow us to evaluate further the potential of this
zone. It is made more interesting by the current and historical
artisanal mining activity around the areas that drain from the anomaly.
As the old adage goes, the best place to find gold is next to an old
gold mine.
We were all deeply saddened by the recent and tragic events at
Brumadinho in Minas Gerais state in Brazil. This has created significant
concern in Brazil over the safety of tailings dams generally. The Group
had already undertaken studies for using a filtration plant that would
produce dry tailings which could be stacked, and negating the need for a
tailings dam. The Group is currently amending the Environmental Impact
Study for Coringa to incorporate a filtration plant, removing the need
for a wet tailings facility which the Group sees as a major factor in
minimising permitting delays and concerns. I would also like to give
reassurance to our stakeholders regarding the tailings management
facility at Palito. Serabi's operations are all about quality not
quantity, therefore we mine and process almost insignificant volumes of
rock relative to industrial mineral, iron ore and bauxite operations
such as Brumadinho. New legislation had already been introduced
following the dam failure at Mariana, also in Minas Gerais, in 2015 and
the Company undertook significant civil works during 2018 to add further
strengthening to out tailings ponds and the annual audit of our tailings
facilities, undertaken late last year by an accredited Brazilian
geotechnical engineering expert, confirmed our tailings management
facility to be in good order, and it remains fully licenced and
certified.
Whilst the outlook for the Company is extremely exciting it must not be
forgotten that its fortunes are very closely linked to the gold price
and also, in our case, the Brazilian Real/ US Dollar exchange rate.
Jair Bolsonaro, the new president of Brazil, only took power on 1
January 2019, and it will take some time to see the reaction, both
domestically and internationally, to some of the policy changes and
initiatives that he is seeking to introduce. After many years of
control by the Workers Party, the switch to a pro-business,
right-leaning president wanting to re-invigorate the economy, reduce
government bureaucracy and maximise the economic benefits of the
country's vast natural resources, including the expansion of its
hydro-electric capability are all encouraging signs that should promote
new investment and reduce perceived risk. However, the task that lays
ahead of him is not easy and it can be expected that it will take time
for his reforms to be agreed by the government and implemented. In the
long term it might be expected that renewed economic success for Brazil
will lead to a strengthening of the currency but we feel that it will be
some time before this materialises.
Gold prices have averaged approximately US$1,250 and US$1,260 in 2017
and 2018 respectively although across these two years there has been
some significant volatility with 2018 seeing a high point of more than
US$1,350 and a low below US$1,200. Increasing tensions in US politics,
questions over the strength of the global economy and the expectation
that the US Federal Reserve will hold off on the previously expected
interest rates rises for 2019, have in recent months contributed to
attracting investors back to gold as they show signs of anxiety about
the state of the world. Stock markets remain somewhat fragile and in
January 2018, Goldman Sachs raised its gold forecast and now expects a
gold price of $1,425 over the next year. Against this backdrop, it
seems a very opportune time to be looking to develop and bring on stream
production growth.
Nevertheless, the Serabi Board will continue to be prudent in its growth
strategy as we seek to maximise the value that we can achieve from each
dollar invested. We remain a small producer for now and will insist
that management continues to follow its proven formula and systematic
approach to exploration activity. We feel we have excellent potential
in our tenements, at Palito, Sao Chico and Coringa, so anything outside
these areas has to offer a significant value upside to be included in
our growth strategy. Growth will always need to be balanced with the
concurrent need to continue to improve the Group's working capital
position and improve its resilience to short term market movements that
can negatively impact on cash flow and margin.
We remain open to looking at further acquisitions that we consider can
bring synergies and reduce the Company's overall unit costs and whilst
Brazil remains our immediate focus, we are aware of opportunities
outside of Brazil that could represent an excellent fit for Serabi,
through increased levels of gold production and having the potential for
further long term growth. Recent combinations of some of the larger
gold mining groups, may lead to a reduction in the levels of funding
available to junior miners from senior miners compared with recent
years. With reduced levels of activity from US, Canadian and European
brokerage houses, the reduced numbers of specialist mining funds,
dwindling interest from generalist investment funds and retail investors
this funding from major mining groups has been a significant source of
finance for juniors whilst the majors have used the juniors to undertake
a significant element of greenfield exploration on their behalf.
Serabi's Board is of the view that this further reduction in the
availability of capital will create opportunities that can be accretive
and that Serabi, with its existing cash flow and supportive shareholder
base, will be well positioned to take advantage of.
The next 12 months will undoubtedly be a very interesting chapter in the
Company's history. By this time next year, I very much hope that I will
be discussing progress on the construction and development of Coringa
ahead of a first gold pour later in 2020, the Company will have
delineated the nature and level of production expansion within the
Palito Complex, and Serabi being well on the way to realising its target
of annualised production of 100,000 ounces.
We are fortunate as a Company to have a strong and supportive group of
major shareholders who share the vision and strategy of the Board. On
behalf of the Board of Directors I would like to extend my appreciation
to them for the continued support and confidence. As a Board we are
also indebted to the employees and management of Serabi for a job well
done during the past year. Their hard work and determination to succeed
means your Company is well positioned to reap the benefits of the higher
gold price environment we expect during 2019 and beyond. Finally, thank
you to the rest of our shareholders, large and small, for your patience
during the last few years. I continue to believe the future is
extremely bright for Serabi.
Mel Williams - Chairman
Serabi's Directors Report and Financial Statements for the year ended 31
December 2018 together the Chairman's Statement and the Management
Discussion and Analysis, are available from the Company's website --
www.serabigold.com and will be posted on SEDAR at www.sedar.com.
This announcement is inside information for the purposes of Article 7 of
Regulation 596/2014. The person who arranged the release of this
statement on behalf of the Company was Clive Line, Director.
Enquiries:
Serabi Gold plc
Michael Hodgson Tel: +44 (0)20 7246 6830
Chief Executive Mobile: +44 (0)7799 473621
Clive Line Tel: +44 (0)20 7246 6830
Finance Director Mobile: +44 (0)7710 151692
Email: contact@serabigold.com
-----------------------------
Website: www.serabigold.com
-----------------------------
Beaumont Cornish Limited
Nominated Adviser
Roland Cornish Tel: +44 (0)20 7628 3396
Michael Cornish Tel: +44 (0)20 7628 3396
Peel Hunt LLP
UK Broker
Ross Allister Tel: +44 (0)20 7418 8900
James Bavister Tel: +44 (0)20 7418 8900
Copies of this announcement are available from the Company's website at
www.serabigold.com.
Neither the Toronto Stock Exchange, nor any other securities regulatory
authority, has approved or disapproved of the contents of this
announcement.
The following information, comprising, the Income Statement, the Group
Balance Sheet, Group Statement of Changes in Shareholders' Equity, and
Group Cash Flow, is extracted from these financial statements.
The Company will, in compliance with Canadian regulatory requirements,
post its Management Discussion and Analysis for the year ended 31
December 2018 and its Annual Information Form on SEDAR at www.sedar.com.
These documents will also available from the Company's website --
www.serabigold.com.
Annual Report
The Annual Report has been published by the Company on its website at
www.serabigold.com and printed copies are expected to be available by 15
May 2019. Additional copies will be available to the public, free of
charge, from the Company's offices at 2(nd) floor, 30 -- 32 Ludgate Hill,
London, EC4M 7DR and will be available to download from the Company's
website at www.serabigold.com.
The data included in the selected annual information table below is
taken from the Company's annual audited financial statements for the
year ended 31 December 2018, which were prepared in accordance with
International Financial Reporting Standards in force at the reporting
date and their interpretations issued by the International Accounting
Standards Board ("IASB") and adopted for use within the European Union
(IFRS) and with IFRS and their interpretations issued by the IASB.
There are no material differences on application to the Group. The
consolidated financial statements have also been prepared in accordance
with those parts of the Companies Act 2006 applicable to companies
reporting under IFRS.
The audited financial statements for the year ended 31 December 2018
will be presented to shareholders for adoption at the Company's next
Annual General Meeting and filed with the Registrar of Companies.
Statement of Comprehensive Income
For the year ended 31 December 2018
Group
--------------------------------
For the year For the year
ended 31 ended 31
December 2018 December 2017
Notes US$ US$
------------------------------------------------------ ----- --------------- ---------------
CONTINUING OPERATIONS
Revenue 43,261,743 48,449,868
Cost of sales (31,501,016) (32,015,498)
Release of/(provision for) impairment of inventory 400,000 (950,000)
Depreciation and amortisation charges (9,281,387) (10,465,283)
------------------------------------------------------ ----- ----------- -----------
Total cost of sales (40,382,403) (43,430,781)
Gross profit 2,879,340 5,019,087
Administration expenses (5,538,298) (5,500,275)
Share-based payments (329,620) (381,362)
Gain on disposal of fixed asset 276,976 170,591
------------------------------------------------------ ----- ----------- -----------
Operating loss (2,711,602) (691,959)
Foreign exchange loss (594,596) (214,488)
Finance expense 4 (2,385,313) (839,191)
Finance income 4 861,430 135
------------------------------------------------------ ----- ----------- -----------
Loss before taxation (4,830,081) (1,745,503)
Income tax expense (924,460) (652,400)
------------------------------------------------------ ----- ----------- -----------
Loss for the period from continuing operations(1) (5,754,541) (2,397,903)
Other comprehensive income (net of tax)
Items that may be reclassified subsequently to profit
or loss
Exchange differences on translating foreign operations (9,607,555) (591,720)
------------------------------------------------------ ----- ----------- -----------
Total comprehensive loss for the period(1) (15,362,096) (2,989,623)
Loss per ordinary share (basic) (1) (2) 5 (11.20c) (6.86c)
Loss per ordinary share (diluted) (1) (2) 5 (11.20c) (6.86c)
------------------------------------------------------ ----- --------------- ---------------
(1) The Group has no non-controlling interests and all losses
are attributable to the equity holders of the parent company.
(2) On 19 June 2018, the Group completed a capital
reorganisation with every 20 existing shares being consolidated into one
new share. The total number of existing ordinary shares in issue
immediately prior to the capital reorganisation was 1,175,281,440. The
total number of ordinary shares in issue following the capital
reorganisation was 58,764,072. For comparative purposes the weighted
average ordinary shares in issue and the diluted ordinary shares in
issue for the twelve-month period ended 31 December 2017, has been
adjusted to reflect the share consolidation of 20 existing shares being
consolidated into one new ordinary share.
Balance Sheet as at 31 December 2018
Group
----------------------------
2018 2017
US$ US$
Non-current assets
Deferred exploration costs 27,707,795 23,898,819
Property, plant and equipment 42,342,102 48,980,381
Taxes receivable 1,555,170 1,474,062
Deferred taxation 2,162,180 2,939,634
-------------------------------------------------------- ----------- -----------
Total non-current assets 73,767,247 77,292,896
-------------------------------------------------------- ----------- -----------
Current assets
Inventories 8,511,474 6,934,438
Trade and other receivables 758,209 1,277,142
Prepayments 4,166,916 3,237,412
Cash and cash equivalents 9,216,048 4,093,866
-------------------------------------------------------- ----------- -----------
Total current assets 22,652,647 15,542,858
-------------------------------------------------------- ----------- -----------
Current liabilities
Trade and other payables 6,273,321 5,347,964
Interest-bearing liabilities 4,302,798 2,845,712
Acquisition payment outstanding 10,997,757 5,000,000
Derivative financial liabilities 390,976 709,255
Accruals 372,327 614,198
-------------------------------------------------------- ----------- -----------
Total current liabilities 22,337,179 14,517,129
-------------------------------------------------------- ----------- -----------
Net current assets 315,468 1,025,729
-------------------------------------------------------- ----------- -----------
Total assets less current liabilities 74,082,715 78,318,625
-------------------------------------------------------- ----------- -----------
Non-current liabilities
Trade and other payables 955,521 2,753,409
Provisions 1,543,811 2,047,131
Acquisition payment outstanding -- 9,997,961
Interest-bearing liabilities 2,473,096 2,749,412
-------------------------------------------------------- ----------- -----------
Total non-current liabilities 4,972,428 17,547,913
-------------------------------------------------------- ----------- -----------
Net assets 69,110,287 60,770,712
-------------------------------------------------------- ----------- -----------
Equity
Share capital 8,882,803 5,540,960
Share premium reserve 21,752,430 1,722,222
Option reserve 1,363,367 1,425,024
Other reserves 4,763,819 4,015,369
Translation reserve (40,807,123) (31,199,568)
Retained surplus 73,154,991 79,266,705
-------------------------------------------------------- ----------- -----------
Equity shareholders' funds attributable to owners
of the parent 69,110,287 60,770,712
-------------------------------------------------------- ----------- -----------
Statements of Changes in Shareholders' Equity
For the year ended 31 December 2018
Share Share Share option Other Translation (Accumulated losses) /
Group capital premium reserve reserves reserve retained surplus Total equity
US$ US$ US$ US$ US$ US$ US$
-------------- --------- ---------- -------------- --------- ------------ ---------------------- --------------
Equity
shareholders'
funds at 31
December
2016 5,540,960 1,722,222 1,338,652 3,051,862 (30,607,848) 82,333,125 63,378,973
-------------- --------- ---------- ---------- --------- ----------- ------------- ------- -----------
Foreign
currency
adjustments -- -- -- -- (591,720) -- (591,720)
Loss for year -- -- -- -- -- (2,397,903) (2,397,903)
Total
comprehensive
income for
the year -- -- -- -- (591,720) (2,397,903) (2,989,623)
Transfer to
taxation
reserve -- -- -- 963,507 -- (963,507) --
Share options
lapsed in
period -- -- (294,990) -- -- 294,990 --
Share option
expense -- -- 381,362 -- -- -- 381,362
-------------- --------- ---------- ---------- --------- ----------- ------------- ------- -----------
Equity
shareholders'
funds at 31
December
2017 5,540,960 1,722,222 1,425,024 4,015,369 (31,199,568) 79,266,705 60,770,712
-------------- --------- ---------- ---------- --------- ----------- ------------- ------- -----------
Foreign
currency
adjustments -- -- -- -- (9,607,555) -- (9,607,555)
Loss for year -- -- -- -- -- (5,754,541) (5,754,541)
Total
comprehensive
income for
the year -- -- -- -- (9,607,555) (5,754,541) (15,362,096)
Transfer to
taxation
reserve -- -- -- 748,450 -- (748,450) --
Shares issued
in period 3,341,843 20,030,208 -- -- -- -- 23,372,051
Share options
lapsed in
period -- -- (391,277) -- -- 391,277 --
Share option
expense -- -- 329,620 -- -- -- 329,620
Equity
shareholders'
funds at 31
December
2018 8,882,803 21,752,430 1,363,367 4,763,819 (40,807,123) 73,154,991 69,110,287
-------------- --------- ---------- ---------- --------- ----------- ------------- ------- -----------
Other reserves comprise a merger reserve of US$361,461 and a taxation
reserve of US$4,402,358 (2017: merger reserve of US$361,461 and taxation
reserve of US$3,653,908).
Cash Flow Statement
For the year ended 31 December 2018
Group
--- ----------------------------
For the For the
year ended year ended
31 December 31 December
2018 2017
US$ US$
---------------------------------------------------- ------------ --------------
Cash outflows from operating activities
Operating profit / (loss) (5,754,541) (2,397,903)
Net financial expense 1,938,479 1,053,544
Depreciation -- plant, equipment and mining properties 9,281,387 10,465,283
Inventory impairment expense (400,000) 950,000
Other provisions -- 156,404
Taxation (benefit) / expense 924,460 652,400
Share-based payments 509,620 381,362
Interest paid (770,100) (747,072)
Foreign exchange (155,484) (178,753)
Changes in working capital
(Increase) / decrease in inventories (2,520,338) (287,898)
(Increase) / decrease in receivables, prepayments
and accrued income (1,425,384) (1,968,858)
Increase / (decrease) in payables, accruals and provisions (20,870) 165,249
Increase / (decrease) in short term intercompany
payables -- --
---------------------------------------------------- ----------- -----------
Net cash flow from operations 1,607,229 8,243,758
---------------------------------------------------------- ----------- -----------
Investing activities
Acquisition payment for subsidiary net of cash acquired (4,740,928) (4,994,665)
Purchase of property, plant, equipment and projects
in construction (4,048,391) (2,144,753)
Mine development expenditure (4,090,860) (4,362,192)
Geological exploration expenditure (4,610,450) (2,487)
Pre-operational project costs (2,274,133) --
Proceeds from sale of assets 301,480 214,566
Loans to subsidiaries -- --
Interest received and other finance income 4,780 135
---------------------------------------------------------- ----------- -----------
Net cash outflow on investing activities (19,458,502) (11,289,396)
---------------------------------------------------------- ----------- -----------
Financing activities
Issue of ordinary share capital 23,807,346 --
Costs associated with issue of ordinary shares (615,295) --
Draw-down of short term loan facility 3,000,000 3,628,511
Repayment of short term secured loan (1,939,394) --
Receipt from repayment of intercompany loan -- --
Payment of finance lease liabilities (797,945) (644,340)
Net cash (outflow) / inflow from financing activities 23,454,712 2,984,171
---------------------------------------------------------- ----------- -----------
Net (decrease) / increase in cash and cash equivalents 5,603,439 (61,467)
Cash and cash equivalents at beginning of period 4,093,866 4,160,923
Exchange difference on cash (481,257) (5,590)
---------------------------------------------------------- ----------- -----------
Cash and cash equivalents at end of period 9,216,048 4,093,866
---------------------------------------------------------- ----------- -----------
Notes
1. General Information
The financial information set out above for the years ended 31 December
2018 and 31 December 2017 does not constitute statutory accounts as
defined in Section 434 of the Companies Act 2006, but is derived from
those accounts. Whilst the financial information included in this
announcement has been compiled in accordance with International
Financial Reporting Standards ("IFRS") this announcement itself does not
contain sufficient financial information to comply with IFRS. A copy of
the statutory accounts for 2017 has been delivered to the Registrar of
Companies and those for 2018 will be delivered to the Registrar of
Companies following approval by shareholders at the Annual General
Meeting. The full audited financial statements for the years end 31
December 2018 and 31 December 2017 comply with IFRS.
2. Auditor's Opinion
The auditor has issued an unqualified opinion in respect of the
financial statements for both 2017 and 2018 which do not contain any
statements under the Companies Act 2006, Section 498(2) or Section
498(3). The auditor's opinion in respect of the financial statements
for 2018, does however contain an emphasis of matter regarding the Group
and the Company's ability to continue as a going concern and
specifically the Group and the Company's ability to ggenerate sufficient
cash flows to settle, in full, the deferred consideration of US$12
million payable for the acquisition of Coringa which falls due in
December 2019. It is however emphasised that the auditor's opinion is
not qualified in respect of this uncertainty.
3. Basis of Preparation
The financial statements have been prepared in accordance with
International Financial Reporting Standards ("IFRS") in force at the
reporting date and their interpretations issued by the International
Accounting Standards Board ("IASB") as adopted for use within the
European Union and with IFRS and their interpretations issued by the
IASB. The consolidated financial statements have also been prepared in
accordance with those parts of the Companies Act 2006 applicable to
companies reporting under IFRS.
Accounting standards, amendments and interpretations effective in 2018
A number of new and amended standards and interpretations issued by IASB
have become effective for the first time for financial periods beginning
on (or after) 1 January 2018 and have been applied by the Group in these
financial statements. None of these new and amended standards and
interpretations had a significant effect on the Group because they are
either not relevant to the Group's activities or require accounting
which is consistent with the Group's current accounting policies.
The following new standards and interpretations have been adopted by the
Group:
-- IFRS 15 has replaced IAS 18 Revenue and IAS 11 Construction Contracts as
well as various interpretations previously issued by the IFRS
Interpretations Committee. The Group's accounting policies have remained
unchanged from those previously disclosed in the 2017 annual financial
statements. Under IAS 18, the timing of revenue recognition from the sale
of goods was based primarily on the transfer of risks and rewards,
whereas IFRS 15 focuses instead on when control of those goods has
transferred to the customer. This different approach has not resulted in
a change of timing for revenue recognition for the Group.
-- IFRS 9 has replaced IAS 39 Financial Instruments: Recognition and
Measurement. The Group's principal financial assets comprise long and
short-term loans, cash and short-term deposits, restricted cash as well
as trade and other receivables. All of these financial assets continue to
be classified and measured at amortised cost. The Group's principal
financial liabilities comprise trade and other payables, loans and
borrowings, convertible loans and finance leases and derivative gold call
options. With the exception of the gold call options, all of these
financial liabilities continue to be classified and measured at amortised
cost. The gold call options are classified and measured at fair value
through profit or loss. There are no material financial assets subject to
the expected credit loss model defined within IFRS 9, except for cash.
The level of credit risk that the Group is exposed to has not given rise
to material allowances within the expected credit loss model.
There are a number of standards, amendments to standards, and
interpretations which have been issued by the IASB that are effective in
future accounting periods and which have not been adopted early. None of
these are expected to have a significant effect on the Group, in
particular:
-- IFRS "16 Leases" (effective for periods beginning on or after 1 January
2019) requires lessees to recognise all lease assets and liabilities on
the balance sheet for both finance leases and operating leases.
Management have completed an assessment of existing operating contracts
and do not anticipate the adoption of IFRS 16 to have a significant
impact on the Group's financial statements as the operating leases held
by the Group are of low value and the majority of the existing contracts
either relate to service agreements or otherwise do not result in right
of use assets or lease liabilities.
Going concern and availability of finance
As at 31 December 2018 the Group had cash in hand of $9.2 million and
net assets of $69.1 million. The Directors have prepared a cash flow
forecast for the period to 31 March 2020. Based on this forecast, which
includes planned capital and exploration programmes, the Group may not
be able to not generate sufficient cash flows to settle, in full, the
deferred consideration of US$12 million payable for the acquisition of
Coringa which falls due in December 2019.
The Directors believe there is a reasonable prospect of the Group
securing further funds as and when required in order that the Group can
meet all liabilities including the deferred consideration payable for
the acquisition of Coringa as and when they fall due in the next 12
months and have prepared the financial statements on a going concern
basis.
As at the date of this report the outcome of raising further funds
remains uncertain and this represents a material uncertainty surrounding
going concern. If the Group fails to raise the necessary funds the Group
may be unable to realise its assets and discharge its liabilities in the
normal course of business. The matters explained indicate that a
material uncertainty exists that may cast significant doubt on the Group
and Parent's ability to continue as a going concern. These financial
statements do not show the adjustments to the assets and liabilities of
the Group or the Parent company if this was to occur.
4. Finance expense and income
For the For the
year ended year ended
31 December 31 December
2018 2017
US$ US$
--------------------------------------- ----------- -------------
Interest on trade financing loan --
Finance cost on secured loan facility (180,000) (189,255)
Interest payable on secured loan facility (685,517) (314,732)
Unwinding of discount on rehabilitation
provision (335,204)
Interest payable on finance leases -- --
Unwinding of discount on acquisition
payment (999,796) --
Amortisation of fair value of derivative (520,000) --
Arrangement fee for secured loan -- --
--------------------------------------- ---------- ----------
Interest payable (2,385,313) (839,191)
------------------------------------------ ---------- ----------
Release of fair value for call options
granted 318,279 --
Unwinding of discount on rehabilitation
provision 538,371
Finance income on short term deposits 4,780 135
------------------------------------------ ---------- ----------
Net finance expense (1,523,883) (839,056)
------------------------------------------ ---------- ----------
5. Earnings per Share
For the year ended For the year ended
31 December 2018 31 December 2017
------------------------------------------------------ -------------------- --------------------
(Loss) / profit attributable to ordinary shareholders
(US$) (5,754,541) (2,397,903)
------------------------------------------------------- ------------- ---- ------------- ----
Weighted average ordinary shares in issue 51,396,253 34,935,088(1)
Basic (loss) / profit per share (US cents) (11.20) (6.86)
------------------------------------------------------- ------------- ---- ------------- ----
Diluted ordinary shares in issue 51,396,253 34,935,088(2)
Diluted (loss) / profit per share (US cents) (11.20) (6.86)
------------------------------------------------------- ------------- ---- ------------- ----
1. On 19 June 2018, the Group completed a capital reorganisation with every
20 existing shares being consolidated into one new share. For
comparative purpose the weighted average ordinary shares in issue and the
diluted ordinary shares in issue for the year ended 31 December 2017, has
been adjusted to reflect the share consolidation of 20 existing shares
being consolidated into one new share.
2. As the effect of dilution is to reduce the loss per share, the diluted
loss per share is considered to be the same as the basic loss per share.
6. Post balance sheet events
Subsequent to 31 December 2018, there has been no item, transaction or
event of a material or unusual nature likely, in the opinion of the
Directors of the Company, to affect significantly the continuing
operation of the entity, the results of these operations, or the state
of affairs of the entity in future financial periods.
Qualified Persons Statement
The scientific and technical information contained within this
announcement has been reviewed and approved by Michael Hodgson, a
Director of the Company. Mr Hodgson is an Economic Geologist by training
with over 26 years' experience in the mining industry. He holds a BSc
(Hons) Geology, University of London, a MSc Mining Geology, University
of Leicester and is a Fellow of the Institute of Materials, Minerals and
Mining and a Chartered Engineer of the Engineering Council of UK,
recognising him as both a Qualified Person for the purposes of Canadian
National Instrument 43-101 and by the AIM Guidance Note on Mining and
Oil & Gas Companies dated June 2009.
Forward Looking Statements
Certain statements in this announcement are, or may be deemed to be,
forward looking statements. Forward looking statements are identi ed by
their use of terms and phrases such as "believe", "could", "should"
"envisage", "estimate", "intend", "may", "plan", "will" or
the negative of those, variations or comparable expressions, including
references to assumptions. These forward looking statements are not
based on historical facts but rather on the Directors' current
expectations and assumptions regarding the Company's future growth,
results of operations, performance, future capital and other
expenditures (including the amount, nature and sources of funding
thereof), competitive advantages, business prospects and opportunities.
Such forward looking statements re ect the Directors' current beliefs
and assumptions and are based on information currently available to the
Directors. A number of factors could cause actual results to differ
materially from the results discussed in the forward looking statements
including risks associated with vulnerability to general economic and
business conditions, competition, environmental and other regulatory
changes, actions by governmental authorities, the availability of
capital markets, reliance on key personnel, uninsured and underinsured
losses and other factors, many of which are beyond the control of the
Company. Although any forward looking statements contained in this
announcement are based upon what the Directors believe to be reasonable
assumptions, the Company cannot assure investors that actual results
will be consistent with such forward looking statements.
ENDS
Attachment
-- Serabi Gold plc 2018 annual results new release
https://ml-eu.globenewswire.com/Resource/Download/a205696b-fc0e-4ecf-8cc1-8ae27e4150eb
(END) Dow Jones Newswires
March 29, 2019 03:00 ET (07:00 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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