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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Tri-star Resources Plc | LSE:TSTR | London | Ordinary Share | GB00BGDLPW84 | ORD 5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 1.80 | 1.50 | 2.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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TIDMTSTR
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
TRI-STAR RESOURCES PLC
Interim Results for the six month period ended 30 June 2018
Tri-Star (AIM: TSTR), the mining and minerals processing company, is pleased to
announce unaudited results for the six months ended 30 June 2018.
During the period, Tri-Star's principal activities continued to be its
investment in an antimony and gold production facility in the Sultanate of Oman
(the "SPMP Project" or the "Project") which is being developed by Strategic &
Precious Metals Processing LLC ("SPMP"), an Omani company in which Tri-Star has
a 40% equity interest.
Financial Highlights
* On-going cash administrative expenses down 30% to GBP285k (H1 2017: GBP410k);
* Annualised salaries have fallen 45% in cash terms since H2 2017 as the
Company moved to a share-based compensation structure to preserve cash
resources and align management more closely with shareholders; major
reduction in costs on non-core exploration assets as primary focus remains
on flagship investment in Oman;
* A total of GBP3.6m of the short-term secured loan note has been repaid this
year, leaving a balance of GBP1.0m as of 31 August 2018;
* Net assets increased 130% to GBP5.8m (30 June 2017: GBP2.5m);
* Loans to SPMP have increased by 60% in the period to GBP7.1m, which currently
accrue interest at 15% per annum;
* Successful completion of a GBP13.0m fund raising through the placement of new
ordinary shares, announced on 25 June 2018 and completed after the period
end; of the funds raised, GBP10.6m (US$14m) is being injected into Strategic
& Precious Metals Processing LLC ("SPMP") in the form of equity and
mezzanine debt.
SPMP Highlights
* First class safety record with over 2.48m injury-free man hours have been
achieved to date on site;
* Steven Din joined SPMP as CEO on 1 August and is carrying out a full
operational review using some of the most experienced experts in the field
to aid in the hot commissioning and troubleshooting;
* The new schedule indicates first antimony metal by the end of October and
first gold shortly thereafter;
* Valuable relationships and contracts with international feedstock and other
raw material suppliers have been secured;
* To date, SPMP has secured a total of US$13.8m in letter of credit
facilities from Bank Nizwa S.A.O.G and Alizz Islamic Bank S.A.O.G for the
purchase of feedstock;
* Amer Al Jabri has joined SPMP as CFO, bringing a significant amount of
experience in securing trade financing and working capital facilities
having previously helped set up a commodity trader specialising in trading
Crude Oil, Petrochemicals & Chemicals;
* Total SPMP funding is currently US$161m, of which external funding
comprises US$66m senior bank debt and US$13m letter of credit facilities,
representing 49% of total funding. SPMP is currently negotiating additional
working capital facilities to cover the plant ramp up phase.
Karen O'Mahony, Acting Chief Executive Officer of Tri-Star, commented:
"This financial report comes at an exciting time in the history of the Company
with our flagship Oman project almost ready to produce first metal. Whilst the
SPMP management has been working hard on site in Sohar, we have been focusing
on streamlining Tri-Star and its other subsidiaries to ensure that as much
value as possible from the underlying asset is realised for the Company's
shareholders. These results reflect our focus on cash cost reduction at the
corporate level, allowing shareholders funds to be applied to getting this
project into production."
"Tri-Star's management has also been actively involved at SPMP board level to
support the SPMP management team with sourcing feedstock and arranging
financing facilities."
"Steven Din joined SPMP on 1 August 2018 and has hit the ground running by
making key interventions. He has brought in very experienced external
consultants to help with the completion of the gold calcine and the
commissioning process. He and the team also have managed to secure several new
and interesting feedstock deals."
Business Review
In the first half of the year, the main focus of management and Board was to
focus on cash cost reduction at the head office and subsidiary levels while
still maintaining the Company's funding commitment to SPMP.
The Board is pleased to announce that it has successfully reduced on-going cash
administrative expense by 30% in H1 2018 to GBP285k (H1 2017: GBP410k). A key
factor in the reduction of administrative expense was the reduction of the
Board from six to four members and the restructuring of executive remuneration.
The Board is satisfied that the new structure provides a balanced,
well-functioning Board that meets the needs of the Company.
Further savings were realised through contract re-negotiations and replacement
of some service providers. At the Turkish subsidiary level, costs were
decreased through the sale of non-essential assets and cost rationalisation.
The Company's balance sheet was significantly improved with Net Assets
increasing by 130% to GBP5.8m (30 June 2017: GBP2.5m).
In H1 2018, Company debt (25% secured loan notes issued to funds under the
management of Odey Asset Management LLP - "Odey Secured Loan Notes") was
reduced from GBP4.3m to GBP2.7m (as at 30 June 2018). Subsequently, a further GBP2.0m
was repaid leaving a balance of approximately GBP1.0m as of 31 August 2018.
Tri-Star continues to give full financial support to achieving SPMP's strategic
objectives. To this end, Tri-Star carried out an Open Offer which closed in
January 2018 (details of which were discussed in Tri-Star's 2017 year end
results) and subsequently executed a placement of ordinary shares in July 2018
("Placing").
Through the Placing, the Company raised GBP13.0m (before expenses) by way of
placing 30,232,558 new ordinary shares in the Company at a price of 43 pence
each. The funds managed by Odey Asset Management LLP (the "Odey Funds")
currently hold 67,805,797 ordinary shares in the Company, representing 72.06%
of the enlarged issued share capital.
The proceeds raised will be used to further fund the SPMP Project (US$14.0m or
GBP10.6m), and to repay a portion of the Odey Secured Loan Notes (US$2.6m or GBP
2.0m) which were accruing interest at a rate of 25% per annum. Approximately GBP
300,000 of the net proceeds have been retained for working capital purposes. Of
the US$14.0m earmarked to fund the SPMP Project US$5.1m (GBP3.9m) has been
advanced to date. This funding of SPMP was made in the form of further
mezzanine loans advanced to SPMP rather than traditional equity. This decision
was made for two reasons: 1) It represents a healthier financial position for
the Company and 2) The principal on the mezzanine loans can be repaid by SPMP
to Tri-Star with no tax implications.
In other news, David Fletcher, Tri-Star's Non-Executive Director (NED) was
appointed to the board of SPMP LLC in June 2018 and he has proved to be an
excellent addition.
As at 31 August 2018 Tri-Star held GBP7.3m in cash. This cash balance arises as
only US$5.13m of the GBP14.0m raised in July 2018 had been invested in SPMP at
the end of August 2018.S
Enquiries:
Tri-Star Resources plc
Karen O'Mahony, Acting CEO/ CFO Tel: +44 (0)20 7653
6291
Tavistock Communications Ltd
Charles Vivian/ Gareth Tredway Tel +44 (0)20 7920
3150
SP Angel Corporate Finance (Nominated Adviser and Joint
Broker)
Robert Wooldridge/Jeff Keating Tel: +44 (0)20 3470
0470
FinnCap Ltd (Joint Broker)
Christopher Raggett/Camille Gochez Tel: +44 (0)20 7220
0500
Notes to the Editor
Tri-Star's principal activities are in an antimony and gold production facility
(the "SPMP Project" or the "Project").
The SPMP Project is based in Sohar, Sultanate of Oman, and is being developed
by Strategic & Precious Metals Processing LLC ("SPMP"), an Omani company in
which Tri-Star has a 40% equity interest.
Tri-Star also has antimony exploration licenses in Canada and Turkey and a
mining permit in Turkey which are held for their potential contribution of
feedstock to the SPMP Project.
TRI-STAR RESOURCES PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHSED 30 JUNE 2018
Notes Unaudited Unaudited Audited
Period Period ended Year ended
ended 30 30 June 2017 31 December
June 2018 (restated) 2017
GBP'000 GBP'000 GBP'000
Antimony sales 6 - -
Share based payment charge (558) (130) (135)
Exceptional expenses 4 (100) - (23)
Administrative expenses (285) (410) (846)
Amortisation of intangibles (1) (1) (2)
Total administrative expenses and (938) (541) (1,006)
loss from operations
Profit on sale of AFSA - 55 55
Share of loss in associated companies (56) (17) (41)
Finance income 269 - 31
Loss on extinguishment of debt - (3,637) (3,637)
Finance cost (306) (1,228) (1,364)
Loss before taxation (1,031) (5,368) (5,962)
Taxation 5 29 62 80
Loss after taxation, and loss (1,002) (5,306) (5,882)
attributable to the equity holders of
the Company
Loss before and after taxation
attributable to
Non-controlling interest - - (1)
Equity holders of the parent (1,002) (5,306) (5,881)
Other comprehensive (expenditure)/
income
Items that will be reclassified
subsequently to profit and loss
Exchange differences on translating (8) (5) (19)
foreign operations
Recycle to income statement on - (47) (47)
disposal of available for sale asset
Other comprehensive (expenditure)/ (8) (52) (66)
income for the period, net of tax
Total comprehensive loss for the (1,010) (5,358) (5,948)
year, attributable to owners of the
company
Total comprehensive loss attributable
to
Non-controlling interest - - (1)
Equity holders of the parent (1,010) (5,358) (5,947)
Loss per share
Basic and diluted loss per share 6 (1.64) (58.78) (40.91)
(pence) (restated)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 30 JUNE 2018
Unaudited Unaudited Audited
30 June 2018 30 June 2017 31 December
(restated) 2017
Assets Notes GBP'000 GBP'000 GBP'000
Non-current
Intangible assets 10 15 12
Investment in associates 7 1,188 1,466 1,421
Loan to associate 8 7,115 - 4,439
Property, plant and 11 32 21
equipment
8,324 1,513 5,893
Current
Cash and cash equivalents 280 1,108 485
Trade and other receivables 117 104 106
Total current assets 397 1,212 591
Total assets 8,721 2,725 6,484
Liabilities
Current
Trade and other payables 88 63 77
Short term loans 8 2,730 - 4,348
Total current liabilities 2,818 63 4,425
Liabilities due after one
year
Deferred tax liability 130 148 130
Total liabilities 2,948 211 4,555
Equity
Issued share capital 5,371 3,160 3,160
Share premium 33,432 31,342 31,347
Share based payment reserve 1,663 1,130 1,105
Other reserves (6,156) (6,156) (6,156)
Translation reserve (805) (783) (797)
Retained earnings (27,728) (26,176) (26,726)
5,777 2,517 1,933
Non-controlling interest (4) (3) (4)
Total equity 5,773 2,514 1,929
Total equity and liabilities 8,721 2,725 6,484
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHSED 30 JUNE 2018
Unaudited Unaudited Audited Year
Period ended Period ended ended
30 June 2018 30 June 2017 31 December
(restated) 2017
GBP'000 GBP'000 GBP'000
Cash flows from operating
activities
Loss after tax (1,002) (5,306) (5,882)
Amortisation of intangibles 1 1 2
Depreciation 9 10 20
Finance income (269) - (31)
Finance cost 306 1,176 1,312
Loss from associates 56 17 41
Fees paid by shares 5 130 135
Loss on extinguishment of loans - 3,637 3,637
Equity settled share-based 558 - -
payments
Movement on fair value of - 52 52
derivatives
Profit on disposal of AFSA - (55) (55)
Increase in trade and other (14) (67) (10)
receivables
Increase/(decrease) in trade and 10 (11) (15)
other payables
Net cash outflow from operating (340) (416) (794)
activities
Cash flows from investing
activities
Loans made to associate (2,016) - (4,511)
Proceeds from sale pf property, 11 - -
plant and equipment
Net receipts on sale of AFSA - 96 96
Finance income 2 - -
Net cash (outflow)/inflow from (2,003) 96 (4,415)
investing activities
Cash flows from financing
activities
Proceeds from issue of share 4,420 1,300 1,300
capital
Share issue costs (129) (54) (54)
Finance costs (161) (263) (498)
Repayment of loans (1,805) - -
New loans - - 4,511
Net cash inflow from financing 2,325 983 5,259
activities
Net (decrease)/increase in cash (18) 663 50
and cash equivalents
Cash and cash equivalents at 485 447 447
beginning of period
Exchange differences on cash and (187) (2) (12)
cash equivalents
Cash and cash equivalents at end 280 1,108 485
of period
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHSED 30 JUNE 2018
Share Share premium Other reserves Share-based Translation reserve Retained Total attributable to Non-controlling Total equity
capital account payment reserve earnings owners of parent interest
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 January 2,601 14,525 (6,109) 1,130 (778) (20,870) (9,501) (3) (9,504)
2017 (audited)
Issue of share 559 13,057 - - - - 13,616 - 13,616
capital
Share issue costs - (54) - - - - (54) - (54)
Fair value on - 3,814 - - - - 3,814 - 3,814
extinguishment of
loan
Transactions with 559 16,817 17,376 17,376
owners - - - - -
Loss for the period - - - - - (5,306) (5,306) - (5,306)
Transfer on sales of - - (47) - - - (47) - (47)
available for sale
asset
Exchange difference - - - - (5) - (5) - (5)
on translation of
foreign operations
Total comprehensive - - (47) - (5) (5,306) (5,358) - (5,358)
loss for the period
Balance at 30 June 3,160 31,342 (6,156) 1,130 (783) (26,176) 2,517 (3) 2,514
2017 (unaudited)
(restated)
Issue of share - 5 - - - - 5 - 5
capital
Transfer on lapse of - - - (25) - 25 - - -
options
Transactions with - 25 -
owners - 5 - - 25 5 5
Loss for the period - - - - - (575) (575) (1) (576)
Exchange difference - - - - (14) - (14) - (14)
on translation of
foreign operations
Total comprehensive - - - - (14) (575) (589) (1) (590)
loss for the period
Balance at 31 3,160 31,347 (6,156) 1,105 (797) (26,726) 1,933 (4) 1,929
December 2017
(audited)
Issue of share 2,211 2,214 - - - - 4,425 - 4,425
capital
Share issue costs - (129) - - - - (129) - (129)
Share based payments - - - 558 - - 558 - 558
Transactions with 2,211 2,085 - 558 - - 4,854 - 4,854
owners
Loss for the period - - - - - (1,002) (1,002) - (1,002)
Exchange difference - - - - (8) - (8) - (8)
on translation of
foreign operations
Total comprehensive - - (8) (1,002) (1,010) - (1,010)
loss for the period - -
Balance at 30 June 5,371 33,432 (6,156) 1,663 (805) (27,728) 5,777 (4) 5,773
2018 (unaudited)
NOTES TO THE INTERIM REPORT
FOR THE SIX MONTHSED 30 JUNE 2018
1. GENERAL INFORMATION
The financial information set out in this interim report for the Company, its
subsidiaries and associates (the "Group") does not constitute statutory
accounts as defined in Section 434 of the Companies Act 2006. The Group's
statutory financial statements for the year ended 31 December 2017 have been
completed and filed at Companies House. The auditor's report on the annual
financial statements was unqualified and did not contain statements under
section 498(2) or section 498(3) of the Companies Act 2006.
2. ACCOUNTING POLICIES
BASIS OF PREPARATION
The Company's ordinary shares are quoted on the AIM market of the London Stock
Exchange and the Company applies the Companies Act 2006 when preparing its
annual financial statements.
The annual financial statements for the year ended 31 December 2018 will be
prepared under International Financial Reporting Standards as adopted by the
European Union (IFRS) and the principal accounting policies adopted remain
unchanged from those adopted in preparing its financial statements for the year
ended 31 December 2017.
The accounting policies have been applied consistently throughout the Group for
the purposes of preparation of these condensed consolidated interim financial
statements. IFRS 9 - Financial Instruments has been applied.
The financial statements for the period ended 30 June 2017 have been restated
in respect of the share of losses in associated companies only. This is as a
result of a change in accounting policy within SPMP in respect of
capitalisation of costs, and has been applied to the June 2017 accounts to give
a meaningful comparison. This restatement has resulted in a decrease in share
of loss in associated companies of GBP353,000 and an increase in the investment
in associates of GBP353,000.
GOING CONCERN
The Directors have prepared cash flow forecasts for the period ending 30
September 2019. The forecasts assume that the balance of US$2m due from SPMP
on successful commissioning of the Oman Antimony Roaster in its pilot phase
will be received, as described further in Note 8. The forecasts demonstrate
that the Group will have sufficient cash resources available to allow it,
assuming the US$2m is received, to continue in business for a period of at
least twelve months from the date of approval of these financial statements.
Accordingly, the accounts have been prepared on a going concern basis.
3. SEGMENTAL REPORTING
An operating segment is a distinguishable component of the Group that engages
in business activities from which it may earn revenues and incur expenses,
whose operating results are regularly reviewed by the Group's chief operating
decision maker to make decisions about the allocation of resources and
assessment of performance and about which discrete financial information is
available. The chief operating decision maker has defined that the Group's
only reportable operating segment during the period is mining.
In respect of the non-current assets as at 30 June 2018 of GBP8,324,000, GBP5,000
arise in the UK (30 June 2017: GBP20,000, 31 December 2017: GBP12,000), and GBP
8,319,000 arise in the rest of the world (30 June 2017: GBP1,140,000, 31 December
2017: GBP5,881,000).
4. EXCEPTIONAL EXPENSES
Exceptional expenses relate to the restructuring of the Board of Tri-Star and
the management team.
5. TAXATION
As at 31 December 2017 Tri-Star Resources plc had unrelieved Schedule D Case 1
corporation tax losses of GBP4.99m. The Directors expect these losses to be
available to offset against future taxable trading profits.
The Group has not recognised a deferred tax asset at 30 June 2018 (30 June and
31 December 2017: GBPnil) in respect of these losses on the grounds that it is
uncertain when taxable profits will be generated by the Group to utilise any
such losses.
6. (LOSS) PER SHARE
The calculation of the basic (loss) per share is based on the (loss)
attributable to ordinary shareholders divided by the weighted average number of
shares in issue during the period.
Unaudited Unaudited Unaudited
period ended period ended period ended
30 June 2018 30 June 2017 31 December 2017
(restated) (restated)
GBP'000 GBP'000 GBP'000
Loss on ordinary activities after (1,002) (5,306) (5,882)
tax (&'000)
Weighted average number of shares
for calculating basic loss per 60,921,020 9,026,640 14,378,619
share
Basic and diluted loss per share (1.64) (58.78) (40.91)
(pence)
Diluted earnings per share is the same as basic loss per share in each year
because the potential shares arising under the share option scheme and share
warrants are not included.
The weighted average number of ordinary shares excludes deferred shares which
have no voting rights and no entitlement to a dividend.
On 13 June 2018, Tri-Star consolidated every 1,000 of its ordinary shares of
0.005 pence into one new ordinary share of 5 pence each. This resulted in
63,850,388,257 shares being consolidated into 63,850,258 new ordinary shares of
5 pence each. The loss per share for prior periods has been restated to show
the comparative loss had the consolidation already taken place. The loss per
share for the current period has been calculated as if the consolidation had
taken place at the beginning of the period.
7. INVESTMENT IN ASSOCIATES
Strategic & Precious Metals Processing LLC ("SPMP") was incorporated in the
Sultanate of Oman in 2014. Tri-Star has a 40% interest in the company and
accounts for its investment in SPMP as an associate undertaking.
SPMP made a loss of GBP140,000 in the period to 30 June 2018 (30 June 2017
(restated): GBP43,000, 31 December 2017: GBP103,000) of which Tri-Star's share in
the Group accounts was GBP56,000 (30 June 2017 (restated): GBP17,000, 31 December
2017: 41,000). Tri-Star had a net investment of GBP1,188,000 on consolidation as
at 30 June 2018 (30 June 2017 (restated): GBP1,466,000, 31 December 2017: GBP
1,421,000).
Additionally, Tri-Star has made loans to SPMP as detailed in Note 7.
8. LOAN NOTES
SPMP Mezzanine loan notes
Loans receivable represent the US$6m mezzanine loan which the Company advanced
to SPMP as announced on 29 November 2017, and the further US$2.8m advanced as
announced on 24 January 2018.
The principal terms of the loan are as follows:
* An interest rate of 15% per annum compounded, payable in full on redemption
of the loan;
* Ranks pari passu with the existing mezzanine loans already in place at
SPMP;
* Loan term of five years with SPMP having the option to redeem (with accrued
interest to date) from the third anniversary of drawdown.
* All repayments made by SPMP to each of its 3 shareholders will be pari
passu in proportion to the respective total loan amounts outstanding.
There is an option to convert the loan into shares if it remains outstanding
for 12 months after the due date.
Since the period end a further US$8m has been advanced by the Company to SPMP
by way of mezzanine loans.
Odey Loan Notes
Loan Notes payable comprise short-dated secured loan notes issued to OEI and
OMI, two of the three OAM Funds that were equity shareholding funds as of the
30th June 2018. The Loan Notes are secured on a debenture comprising a fixed
and floating charge over all the assets of Tri-Star Resources plc.
The Loan Notes carry an annual interest rate of 25% and had an original
repayment date of 30 June 2018 or equity placement whichever is earlier. As an
equity placement took place in January 2018, the loans technically fell due,
but OEI and OMI agreed to extend repayment to 30 June 2019 or earlier at the
Company's discretion.
The US$6,000,000 Loan Notes were issued in November 2017 and as at 31 December
2017 had an outstanding balance of US$6,140,000 including accrued interest. On
19 January 2018, US$2,681,000 of the principal and interest was repaid. As at
the period end, the outstanding balance of the Loan Notes was US$3,950,000.
Since the period end a further US$2,639,000 has been repaid on 10 July 2018
leaving an outstanding balance of GBP1,338,000.
9. CONTINGENT ASSET
Under the agreement to sell the Roaster intellectual property to Strategic &
Precious Metals Processing LLC, there is a balance of US$2m due to be paid to
Tri-Star. This payment is contingent upon the successful commissioning of the
plant in its pilot phase. The Directors have determined not to accrue this
deferred income. Therefore, there is a contingent asset of US$2m as at 30 June
2018 (30 June and 31 December 2017: US$2m).
10. EVENTS AFTER THE REPORTING DATE
On 22 June 2018 Tri-Star announced a proposed Conditional Placing of 30,232,558
new ordinary shares of 5p each raising GBP13m before expenses, which completed on
12 July 2018. The proceeds of this were used to invest a further US$14m in SPMP
and to repay US$2,639,000 of the Odey loans. Approximately GBP300,000 of the net
proceeds have been retained for working capital purposes.
END
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September 17, 2018 02:00 ET (06:00 GMT)
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