TIDMZIOC
RNS Number : 3599A
Zanaga Iron Ore Company Ltd
29 September 2020
29 September 2020
INTERIM RESULTS FOR THE SIX MONTHSED 30 JUNE 2020
Zanaga Iron Ore Company Limited ("ZIOC" or the "Company") (AIM:
ZIOC) is pleased to announce its unaudited interim results for the
six months ended 30 June 2020 and an update on post reporting
period end events to September 2020.
Highlights
-- Zanaga Iron Ore Project (the "Project" or the "Zanaga
Project") 30Mtpa staged development project (12Mtpa Stage One
("Stage One"), plus 18Mtpa Stage Two expansion ("Stage Two"))
o Decision taken by the Board of Jumelles Limited ("Jumelles"),
the joint venture company between ZIOC and Glencore, to proceed
with an initiative to update the cost estimates associated with the
12Mtpa Stage One Project
o Floating Offshore Port Study completed in May 2020
-- Concept Study completed on the viability of a Floating
Dewatering, Storage, and Offloading port facility ("FDSO" or
"Floating Port"), demonstrating the following potential
benefits:
-- $184m reduction to capital costs of the 12Mtpa Stage One
development phase of the 30Mtpa Project
-- Significant NPV and IRR improvement
-- No increase to operating costs
-- Early Production Project ("EPP Project" or "EPP")
o 1-5 Mtpa production scenarios continue to be under
investigation with the focus on processing facilities and suitable
logistics solutions through the Republic of Congo ("RoC") and/or
Republic of Gabon ("Gabon")
-- Strategic investor discussions
o Approaches received from a number of strategic investors
interested in investing in the Zanaga Project
o Discussions remain at a very early stage and there is no
certainty that these discussions will proceed or a transaction
ultimately entered into
-- Other opportunities under investigation
o Multiple Chinese entities introduced by China Overseas
Infrastructure Development and Investment Corporation Limited
("COIDIC") in order to explore opportunities for Chinese
involvement in construction of the Project
o Opportunity being explored for potential development of a
steel production facility within COIDIC's Special Economic Zone
("SEZ") at Point-Noire
o Yantai Port Group introduced by COIDIC to consider logistics
synergies
Corporate
-- Equity subscription agreement entered into with Shard
Merchant Capital Ltd ("SMC") on 25 June 2020 ("Subscription
Agreement")
o Under the terms of the Subscription Agreement a maximum of 21
million ordinary shares, in tranches of up to 7 million ordinary
shares at a time, could be issued to SMC
o Of the 7 million ordinary shares issued to SMC under the first
tranche, SMC have traded approximately 5 million shares with net
proceeds of approximately GBP300,000 received by ZIOC to date
-- Outbreak of COVID-19 has not had a material impact upon the
activities of the Group. Further detail regarding the Group's
response to the outbreak can be found within the Strategic
Report.
-- Cash balance of US$0.4m as at 30 June 2020 has increased to
US$0.5m at 28 September 2020 following the receipt of funds from
the Subscription Agreement to date.
-- Annual General Meeting to be held on 30 October 2020, and
notice to be sent to shareholders shortly
Clifford Elphick, Non-Executive Chairman of ZIOC, commented:
"During the first half of 2020 the Zanaga Project Team managed
to maintain progress on key initiatives while dealing with
significant challenges created by the global impact of coronavirus.
The Project Team responded well to the situation and took measures
to ensure the safety of all personnel, with no cases reported
amongst our employees to date.
The iron ore market has shown robust demand from China and is
benefitting from robust iron ore prices. In addition, there is an
increasing awareness by the international investor community both
in China and in the West of the importance of high quality, large
scale, and long life iron ore projects. In view of these positive
developments, the Company believes that the Zanaga Project can be
regarded as a significant asset in the future supply chain and an
important part of future iron ore supply for strategic
entities".
Copies of the unaudited interim results for the six months ended
30 June 2020 are available on the Company's website at
www.zanagairon.com
The Zanaga Iron Ore Company Limited LEI number is
21380085XNXEX6NL6L23.
For further information, please contact:
Zanaga Iron Ore
Corporate Development and Andrew Trahar
Investor Relations Manager +44 20 7399 1105
Liberum Capital Limited
Nominated Adviser, Financial Scott Mathieson, Edward Thomas
Adviser and Corporate Broker +44 20 3100 2000
About us:
Zanaga Iron Ore Company Limited ("ZIOC" or the "Company") (AIM
ticker: ZIOC) is the owner of 50% less one share in the Zanaga Iron
Ore Project based in the Republic of Congo (Congo Brazzaville)
through its investment in its associate Jumelles Limited. The
Zanaga Iron Ore Project is one of the largest iron ore deposits in
Africa and has the potential to become a world-class iron ore
producer.
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014 .
Business Review - Operations
Iron Ore Market
The iron ore market has shown robust demand from China and is
benefitting from robust iron ore prices. The iron ore market supply
deficit has become increasingly problematic, driven by strong
continued demand from China and the reduction of significant iron
ore supply in Brazil following a combination of mine closures due
to tailings dam infrastructure concerns, and the impact of the
coronavirus pandemic at a number of mining operations. Iron ore
prices have risen significantly over the last two years and are now
trading at sustained high levels.
Strategic investor discussions
Jumelles has continued to maintain a dialogue with a number of
potential strategic investors, and in recent months approaches have
been received from a number of additional strategic investors
interested in investing in the Zanaga Project. However, it is
emphasized that any such discussions are at a very early stage and
there is no certainty that these discussions will proceed or
ultimately a transaction entered into. Further updates will only be
provided as required by market rules.
Re-costing exercise on the Zanaga 12Mtpa Staged Development
Project
Due to the buoyant iron ore market, the Jumelles board have
initiated a process to undertake a re-costing exercise to ascertain
the potential costs associated with the construction of the Zanaga
Project's 12Mtpa Stage One Project in today's contractor pricing
market, and external engineering firms have been engaged by
Jumelles to complete this evaluation. The results of this exercise
are expected to be announced in Q1 2021.
Floating Port Concept Study
Significant opportunities have been identified for potential
cooperation between infrastructure companies and EPC contractors to
enhance the economics and technical solutions available to the
Zanaga Project - particularly the 30Mtpa Staged Development
Project.
During H1 2020 a Concept Study was completed to evaluate a
Floating Port facility for the Zanaga Project, the results of which
were announced on 28 May 2020. The solution involves extending
Zanaga's slurry pipeline straight out into the ocean, with
significantly reduced land-based facilities. The pipeline would run
along the ocean floor to a fixed mooring point where the pipeline
would connect to the floating dewatering, storage, and offloading
vessel (FDSO). The slurry would be processed onboard by a
dewatering plant and the pellet feed concentrate would be stored
within the vessel. Offloading facilities would be built into the
vessel to allow the FDSO to load cape size vessels directly. By
utilising the FDSO Zanaga's materials handling steps would be
reduced to only three phases, providing significant efficiencies
and a more seamless operation.
The FDSO evaluation process has been led by Paterson & Cooke
(P&C), who are leading experts in slurry pipeline design and
engineering. P&C have completed a concept level report
involving a comparison of the three port solutions available for
the Zanaga Project, namely transhipping, deep water port, or the
new floating port (FDSO).
The results of the investigation have been very positive from a
technical and economic perspective. Potential has been indicated
for a $184m reduction to total capital costs of the 12Mtpa Stage
One Project, resulting in a reduction of total capital cost from
$2,219m to $2,035m. Operating costs are expected to be maintained
at approximately $6.5 per tonne due to previously high transhipping
costs being substituted by a lease cost to the EPC contractor
providing the solution. The net impact on economics shows the
potential for the Floating Port to produce a significant NPV and
IRR improvement. More detailed information is available in the
Company's announcement released on 26 June 2020.
This concept study demonstrated the clear potential of a
Floating Port facility to significantly enhance the economics of
the Zanaga Project through the reduction of upfront capital costs
and increase the Internal Rate of Return. In addition, there is
potential to achieve significant ancillary technical benefits such
as reduced environmental impact, elimination of dredging, and
significant flexibility on coastal route selection. The Project's
port solution has been a challenge for the Project since the FS was
completed in 2014 and we are pleased with the results of this
evaluation exercise.
COIDIC discussions
In December 2019, a Framework Agreement ("FA") was entered into
between China Overseas Infrastructure Development And Investment
Corporation Limited ("COIDIC") and Jumelles for potential
cooperation between them in respect of mining related
infrastructure for the Zanaga Iron Ore Project.
The parties' intention is to explore co-operation opportunities
for progressing the infrastructure and financing requirements for
the Zanaga Project, both in the near term and the longer term, and
its potential for synergy with objectives of the Pointe-Noire
Special Economic Zone ("SEZ").
COIDIC have been engaging with Chinese government agencies with
a view to aligning with strategic objectives to establish a steel
mill facility in the SEZ. The Zanaga Project Team have assisted the
COIDIC team in this engagement process but have been unable to
attend discussions in China due to current travel restrictions
resulting from the coronavirus pandemic.
Yantai Port ("Yantai") have been introduced to the Zanaga
Project by COIDIC as a Partner in accordance with the Framework
Agreement. Yantai is an experienced Chinese operator in Africa.
Yantai currently operate mining and logistics operations for more
than 40Mtpa of bauxite being exported from Guinea to China. Yantai
are also involved in the intended development of the Simandou iron
ore mine in Guinea, a significant iron ore mining asset. The
potential has been identified to use the Zanaga floating port
solution to support COIDIC's aim of developing a bauxite processing
hub in the region. This could be achieved by pumping imported
bauxite into the SEZ via a return pipeline from the FDSO vessel.
This development has been identified as one which, if progressed,
could have benefits for COIDIC and the Zanaga Project.
In addition to the above discussions, COIDIC have facilitated
discussions with their shareholders, comprising a number of large
experienced infrastructure development and design companies, with
the capability to deliver all aspects of the Zanaga Project and its
related infrastructure.
EPP Project
The Project Team continue to undertake a process to evaluate the
potential development of an EPP Project that would be quicker to
construct than the larger 30Mtpa staged development project and
would utilise existing road, rail and port infrastructure in
Republic of Congo and Republic of Gabon. The Project Team continue
to advance study work in an effort to improve their understanding
of the viability of the EPP Project with an aim to determining
capital and operating cost estimates in Q4 2020 in order to allow a
view to be taken on the economic viability of this EPP Project. The
Project Team continue to evaluate the potential for the EPP Project
to operate as a standalone project, or as an initial pathway to
production during the construction period of the flagship 30Mtpa
Staged Development Project.
Subscription Agreement concluded with Shard Merchant Capital
Ltd
The Company entered into a Subscription Agreement with SMC on 25
June 2020. Details of this funding transaction are available in the
Company's announcement published on 26 June 2020 .
In accordance with the agreement, the first Tranche of 7 million
ordinary shares, of a total potential 21 million ordinary shares,
has been issued to SMC. To date, approximately 5 million of the
shares purchased by SMC have been placed with other investors, with
net proceeds of approximately GBP300,000 being received by ZIOC as
at 28 September 2020. ZIOC is pleased to report that SMC has
introduced new investors SMC has been actively assessing various
areas in which further value can be added and additional investor
engagement could be achieved.
Cash Reserves and Project Funding
As already reported in the Company's annual results published on
1 July 2020, Glencore and ZIOC agreed a 2020 Project Work Programme
and Budget for the Zanaga Project of US$1.2m plus US$0.1m of
discretionary spend, dependent on certain workstreams requiring
capital. ZIOC agreed to contribute towards the work programme and
budget an amount comprising US$0.6m plus 49.99% of all
discretionary items approved jointly with Glencore. Ignoring any
entitlement to savings, ZIOC's potential contribution to the Zanaga
Project in 2020 is expected to be US$0.7m in total.
We are pleased to report that the Zanaga Project's activities
are currently running in line with the 2020 budget forecast.
As at 28 September 2020, ZIOC had cash reserves of US$0.5m and
the Board continues to take a very prudent approach to the
management of the business and its cash reserves.
Outlook
During 2020 the Project Team have made a number of significant
steps in advancing solutions to unlock the key logistical
challenges associated with both the 30Mtpa project and the EPP
Project.
Due to current high iron ore prices, supply issues in Brazil,
and increasing trade tensions between China and some of its trading
partners the Company believes that the Zanaga Project has become an
even more significant asset in the future iron ore supply chain. As
a reminder, the Zanaga Project is economically attractive at much
lower iron ore prices than we are experiencing today, making
today's iron ore price environment very compelling for the
investment case into such a tier one asset. We look forward to
updating our shareholders further towards the end of 2020.
Financial review
Results from operations
The financial statements contain the results for ZIOC for the
first half of 2020. ZIOC made a loss in the half-year of US$0.8m
compared to a loss of US$1.8m in the full year ended December 2019.
The loss for the 2020 half-year period comprised:
1 January to 1 January to 1 January to
30 June 30 June 31 December
2020 2019 2019
Unaudited Unaudited Audited
US$000 US$000 US$000
-------------------------------------------------------------------- ------------ ------------ ------------
General expenses (458) (281) (1,264)
Net foreign exchange (loss)/gain (35) (5) 19
Share of loss of associate (288) (330) (644)
Interest income 1 4 7
(Loss)/Gain before tax (780) (606) (1,882)
Tax - - -
Currency translation (10) (3) (6)
Share of other comprehensive income of associate - foreign exchange (4) (21) 3
-------------------------------------------------------------------- ------------ ------------ ------------
Total Comprehensive income (794) (630) (1,885)
-------------------------------------------------------------------- ------------ ------------ ------------
General expenses of US$0.5m (2019: US$0.3m), consisting of:
Directors' fees of US$Nil (2019: US$Nil), professional fees of
US$Nil (2019: US$0.2m), LTIP charge of US$0.3m (2019 US$Nil) and
US$0.2m (2019: US$0.1m) of other general operating expenses.
The share of loss of associate of US$0.3m (2019: US$0.3m)
relates to ZIOC's investment in Jumelles Limited ("Jumelles"), the
joint venture company in respect of the Zanaga Project. From May
2014, as a result of the completion of the Feasibility Study and
thus consideration to complete the Glencore share option, only 50%
(less one share) of the Jumelles results are now included
above.
During the half year period, the Company's share of Jumelles'
project expenditure was US$0.6m including the effects of currency
translation of $0.07m loss. Capitalised exploration assets remain
at US$80.0m.
Financial position
ZIOC's net asset value ("NAV") of US$38.2m is comprised of a
US$37.4m investment in Jumelles, US$0.4m of cash balances and
US$0.4m net current assets.
30 June 2020 30 June 2019 31 December 2019
Unaudited Unaudited Audited
US$ m US$ m US$m
--------------------------------------- ------------ ------------ ----------------
Investment in associate 37.4 37.4 37.5
Fixed assets - - -
Cash 0.4 1.4 0.8
Other net current assets/(liabilities) 0.4 - (0.2)
--------------------------------------- ------------ ------------ ----------------
Net assets 38.2 38.8 38.1
--------------------------------------- ------------ ------------ ----------------
Cost of investment
The investment in associate relates to the carrying value of the
investment in Jumelles, which as at 30 June 2020 owned 50% less one
share of the Project. The carrying value of this investment is
unchanged in 2020 due to:
-- Company funding per the Funding Agreement of US$0.2m; and
-- The Company's US$0.3m share of the comprehensive loss US$
0.6m made by Jumelles during the half-year.
As at 30 June 2020, Jumelles had aggregated assets of US$81.2m
(June 2019: US$81.2m) and aggregated liabilities of US$0.5m (June
2019: US$0.9m). Non-current assets consisted of US$80.0m (June
2019: US$80.0m) of capitalised exploration assets and US$1.0m (June
2019: US$1.2m) of other fixed assets including property, plant and
equipment. Cash balances amounted to US$0.2m (June 2019: US$0.5m)
and other current assets were US$Nil (June 2019: US$Nil).
Cash flow
Cash balances have decreased by US$0.4m since 31 December 2019.
Additional investment in Jumelles required under the Funding
Agreement (details set out in note 1 to the financial statements)
utilised US$0.2m, operating activities US$0.2m.
30 June 2020 30 June 2019 31 December 2019
Unaudited Unaudited Audited
US$000 US$000 US$000
------------------------------ ------------ ------------ ----------------
GBP Balances 0.3 1.1 0.6
USD value of GBP balances 0.4 1.4 0.8
USD value of other currencies - - -
USD balances - - -
------------------------------ ------------ ------------ ----------------
Cash Total 0.4 1.4 0.8
------------------------------ ------------ ------------ ----------------
Consolidated Statement of Comprehensive Income for the six
months ended 30 June 2020
1 January 1 January 1 January
to to to
30 June 30 June 31 December
2020 2019 2019
Unaudited Unaudited Audited
Note US$000 US$000 US$000
-------------------------------------------------- ---- ---------- ---------- ------------
Administrative expenses (493) (280) (1,245)
Share of (loss)/profit associate (288) (330) (644)
-------------------------------------------------- ---- ---------- ---------- ------------
Operating loss (781) (610) (1,889)
Interest Income 1 4 7
(Loss) before tax (780) (606) (1,882)
Taxation 5 - - -
-------------------------------------------------- ---- ---------- ---------- ------------
(Loss) for the period (780) (606) (1,882)
Foreign exchange translation - foreign operations (10) (3) 3
Share of other comprehensive (loss)/income
of associate - foreign exchange translation (4) (21) -
-------------------------------------------------- ---- ---------- ---------- ------------
Other comprehensive (loss)/gain (14) (24) 3
-------------------------------------------------- ---- ---------- ---------- ------------
Total comprehensive (loss)/gain (794) (630) (1,885)
-------------------------------------------------- ---- ---------- ---------- ------------
(Loss)/Earnings per share (Cents)
Basic 7 (0.3) (0.2) (0.7)
Diluted 7 (0.3) (0.2) (0.7)
All other comprehensive income may be classified as profit and
loss in the future.
Consolidated Statement of changes in equity
for the six months ended 30 June 2020
Foreign
currency
Share Retained translation Total
capital earnings reserve Equity
US$000 US$000 US$000 US$000
-------------------------------------------------------- -------- ---------- ----------- -------
Balance at 1 January 2019 267,012 (230,912) 3,319 39,419
-------------------------------------------------------- -------- ---------- ----------- -------
Consideration for share-based payments - other services - - - -
Share buy backs - - - -
Loss for the period - (606) - (609)
Other comprehensive (loss)/ income - - (24) (21)
-------------------------------------------------------- -------- ---------- ----------- -------
Total comprehensive (loss)/income - (606) (24) (630)
-------------------------------------------------------- -------- ---------- ----------- -------
Balance at 30 June 2019 267,012 (231,518) 3, 295 38,789
-------------------------------------------------------- -------- ---------- ----------- -------
Consideration for share-based payments - other services 580 - - 580
Share buy backs - - - -
Loss for the period - (1,276) - (1,276)
Other comprehensive (loss)/income - - 27 27
-------------------------------------------------------- -------- ---------- ----------- -------
Total comprehensive (loss)/income 580 (1,276) 27 (669)
-------------------------------------------------------- -------- ---------- ----------- -------
Balance at 31 December 2019 267,592 (232,794) 3,322 38,120
-------------------------------------------------------- -------- ---------- ----------- -------
Consideration for share-based payments - other services 321- - - 321
Share buy backs - - - -
Issue of shares 564 - - 564
Loss for the period - (780) - (780)
Other comprehensive (loss)/income - - (14) (14)
-------------------------------------------------------- -------- ---------- ----------- -------
Total comprehensive loss - (780) (14) (794)
-------------------------------------------------------- -------- ---------- ----------- -------
Balance at 30 June 2020 268,477 (233,574) 3,308 38,211
-------------------------------------------------------- -------- ---------- ----------- -------
Consolidated Balance sheet
as at 30 June 2020
30 June 31 December
30 June 2019 2019
2020 Unaudited Unaudited Audited
Note US$000 US$000 US$000
----------------------------------------- ---- --------------- ---------- -----------
Non-current asset
Property, plant and equipment - - -
Investment in associate 6 37,402 37,429 37,492
----------------------------------------- ---- --------------- ---------- -----------
37,402 37,429 37,492
----------------------------------------- ---- --------------- ---------- -----------
Current assets
Other receivables 612 94 48
Cash and cash equivalents 364 1,341 755
----------------------------------------- ---- --------------- ---------- -----------
976 1,435 803
----------------------------------------- ---- --------------- ---------- -----------
Total Assets 38,378 38,864 38,295
----------------------------------------- ---- --------------- ---------- -----------
Current liabilities
Trade and other payables (167) (75) (175)
----------------------------------------- ---- --------------- ---------- -----------
Net assets 38,211 38,789 38,120
----------------------------------------- ---- --------------- ---------- -----------
Equity attributable to equity holders of
the parent
Share capital 268,477 267,012 267,592
Retained earnings (233,574) (231,518) (232,794)
Foreign currency translation reserve 3,308 3,295 3,322
----------------------------------------- ---- --------------- ---------- -----------
Total equity 38,211 38,789 38,120
----------------------------------------- ---- --------------- ---------- -----------
These financial statements were approved by the Board of
Directors on 28 September 2020.
Consolidated Cash flow statement
for the six months ended 30 June 2020
1 January 1 January 1 January
to to To
30 June 30 June 31 Dec
2020 2019 2019
Unaudited Unaudited Audited
US$000 US$000 US$000
------------------------------------------------- ---------- ---------- ---------
Cash flows from operating activities
Loss for the year (780) (606) (1,882)
Adjustments for:
Share based payments 321 - 580-
Interest received (1) (4) (7)
Increase in other receivables (565) 5 (41)
Decrease in trade and other payables (9) - 100
Net exchange (profit)/loss (10) (3) 19
Share of Total Comprehensive income of associate 288 351 644
Net cash from operating activities (756) (257) (505)
Cash flows from financing activities
Issue of shares 564 - -
Net cash from financing activities 564 - -
-------------------------------------------------- ---------- ---------- ---------
Cash flows from investing activities
Interest received 1 4 7
Acquisition of property, plant and equipment - - -
Investment in associate (201) (330) (689)
Net cash from investing activities (200) (326) (682)
Net decrease in cash and cash equivalents (392) (583) (1,187)
Cash and cash equivalents at beginning of period 755 1,955 1,955
Effect of exchange rate difference 1 (31) (13)
-------------------------------------------------- ---------- ---------- ---------
Cash and cash equivalents at end of period 364 1,341 755
-------------------------------------------------- ---------- ---------- ---------
Notes to the financial statements
1. Business information and going concern basis of
preparation
In common with many exploration and development companies in the
mining sector, the Company raises funding in phases as its projects
develop.
Under the 2020 Funding Agreement entered into by the Company and
Glencore, the Company's funding obligations for the 2020 work
programme and budget are for a sum of US$0.6m, plus a percentage
share of discretionary costs. Such share for the Company would be
US$0.1m if all the discretionary costs were approved jointly by the
Company and Glencore. On current projections, it is estimated that
the cash amounts payable by the Company to Jumelles during 2020
will be between approximately US$0.6m and US$0.7m. As regards
ZIOC's corporate cash costs for the 2020 financial year, it is
estimated that such costs will be of the order of US$0.2m.
Based on the current cost base at the Zanaga Project, the
current low corporate overheads of ZIOC, the agreed cash
preservation plan adopted by the Company (described below), the
Company's existing cash reserves and (on the basis of cautious
assumptions made by the Company in its funding model) the funds
expected to be obtained in the future from the funding facility
established by the Subscription Agreement with SMC, the Company
will be adequately positioned to support its operations going
forward in the near future. As the final cash amounts to be
received for each tranche of shares issued to SMC, and the timing
of this receipt, are dependent on SMC successfully selling the
shares prior to transferring funds to the Company, the board of
directors of ZIOC (the "Board") is of the view that the going
concern basis of accounting is appropriate. However, the Board
acknowledges that there is a material uncertainty which could give
rise to significant doubt over the Company's ability to continue as
a going concern and, therefore, that the Company may be unable to
realise its assets and discharge its liabilities in the normal
course of business. Consequently, based on and taking into account
the foregoing factors, the Board are satisfied the Company will
have sufficient funds to meet its own working capital requirements
for the foreseeable future, being a period of at least twelve
months from the date of approval of these half-yearly financial
statements.
The Company continues to review the costs of its operational
activities with a view to conserving its cash resources. As part of
such ongoing review, and in order to preserve the cash position of
the Company, it has been agreed with the Directors and management
that fees are deferred. Additionally, the Directors and management
have indicated to the Company that they will assist the cash
preservation plan of the Company, by re-negotiating contractual
arrangements so as to provide for payments of fees in shares and/or
options in lieu of cash. If this course of action is determined to
be necessary, it is expected that this will take effect by the end
of Q4 2020.
2. Accounting policies
The principal accounting policies applied in the preparation of
these financial statements are set out below. These policies have
been consistently applied to all the periods presented, unless
otherwise stated.
3. Basis of preparation
The condensed set of financial statements has been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted by
the EU.
In accordance with the AIM Rules for Companies, the condensed
set of financial statements has been prepared in applying the
accounting policies and presentation that were applied in the
preparation of the Company's published consolidated financial
statements for the year ended 31 December 2019. The comparative
figures for the financial year ended 31 December 2019 are not the
Company's statutory accounts for that financial year. The 2019
accounts have been reported on by the Company's auditors. The
report of the auditors was (i) unqualified and (ii) did not include
a reference to any matter to which the auditors drew attention by
way of emphasis without qualifying their report.
Up until 30 April 2014, the Company accounted for 100% of the
Jumelles group Comprehensive Income. From May 2014, as a result of
completion of the Feasibility Study (note 1 above) and thus
consideration to complete the Call Option, the Company has
accounted for 50% less one share shareholding portion of that
Comprehensive Income.
4. Segmental reporting
The Company has one operating segment, being its investment in
the Zanaga Project, held through Jumelles. Financial information
regarding this segment is provided in note 6.
5. Taxation
The Company is exempt from most forms of taxation in the British
Virgin Islands ("BVI"), provided the Company does not trade in the
BVI and does not have any employees working in the BVI. All
dividends, interest, rents, royalties and other expense amounts
paid by the Company, and capital gains realised with respect to any
shares, debt obligations or other securities of the Company, are
exempt from taxation in the BVI.
The effective tax rate for the Group is 0.00% (December 2019:
0.00%).
6. Investment in associate
US$000
---------------------------- ------
Balance at 1 January 2019 37,450
Additions 330
Share of comprehensive loss (351)
---------------------------- ------
Balance at 30 June 2019 37,429
---------------------------- ------
Additions 359
Share of comprehensive loss (296)
Balance at 31 December 2019 37,492
---------------------------- ------
Additions 202
Share of comprehensive loss (292)
---------------------------- ------
Balance at 30 June 2020 37,402
---------------------------- ------
From 30 April 2014, the investment represents a 50% less one
share shareholding (previously 100%) in Jumelles for 2,000,000
shares of 4,000,001 total shares in issue.
On 11 February 2011, Xstrata Projects (now renamed Glencore
Projects) exercised the Xstrata Call Option and from that date owns
50% plus one share of Jumelles and Jumelles is controlled at both a
shareholder and director level by Glencore Projects. However, as
the shares issued on exercise of the option were not considered to
vest until provision of the services relating to the Preliminary
Feasibility Study and the Feasibility Study had been completed, the
Group continued to account for a 100% interest in Jumelles until
the Feasibility Study was completed in April 2014. From May 2014
the Group has accounted for the reduction of its interest in
Jumelles. The Group's interest remains accounted for as an
associate using the equity method of accounting.
The Group financial statements account for the Glencore Projects
transaction as an in-substance equity-settled share-based payment
for the provision of services by Glencore Projects to Jumelles in
relation to the Preliminary Feasibility Study and the Feasibility
Study. These services largely were provided through third party
contractors and were measured at the cost of the services
provided.
As at 30 June 2020, Jumelles had aggregated assets of US$80.7m
(June 2019: US$82.1m) and aggregated liabilities of US$0.8m (June
2019: US$0.8m). For the 6 months ended 30 June 2020, Jumelles
incurred no taxation charge (June 2019: US$nil). A summarised
consolidated unaudited balance sheet of Jumelles for the 6 months
ended 30 June 2020, including adjustments made for equity
accounting, is included below:
30 June 30 June 31 December
2020 2019 2019
Unaudited Unaudited Audited
US$000 US$000 US$000
---------------------------------------- ---------- ---------- ------------
Non-current assets
Property, plant and equipment 1,001 1,193 1,064
Exploration and other evaluation assets 80,000 80,000 80,000
Total non-current assets 81,001 81,193 81,064
---------------------------------------- ---------- ---------- ------------
Current assets 216 477 336
Current liabilities (485) (886) (489)
---------------------------------------- ---------- ---------- ------------
Net current liabilities (269) (409) (153)
---------------------------------------- ---------- ---------- ------------
Net assets 80,732 80,784 80,911
---------------------------------------- ---------- ---------- ------------
Share capital 293,103 293,103 293,103
Translation reserve 39,109 37,988 38,706
Translation reserve (4,835) (4,867) (4,828)
Accumulated deficit (246,645) (245,440) (246,069)
---------------------------------------- ---------- ---------- ------------
80,732 80,784 80,911
---------------------------------------- ---------- ---------- ------------
30 June 30 June
2020 2019 31 December 2019
Unaudited Unaudited Audited
7. Earnings per share US$000 US$000 US$000
----------------------------------------------------------- ---------- ---------- ----------------
Profit/(Loss) (Basic and diluted) (US$000) (780) (606) (1,882)
Weighted average number of shares (thousands)
Basic and diluted
Issued shares at beginning of period 286,034 283,201 283,201
Effect of shares issued 7,000 - 2,833
Effect of share repurchase - - -
Effect of own shares - - -
Effect of share split - - -
----------------------------------------------------------- ---------- ---------- ----------------
Weighted average number of shares at end of period - basic 293,034 283,201 286,034
----------------------------------------------------------- ---------- ---------- ----------------
(Loss)/Earnings per share (Cents)
Basic (0.3) (0.2) (0.7)
Diluted (0.3) (0.2) (0.7)
----------------------------------------------------------- ---------- ---------- ----------------
8. Related parties
The following transactions occurred with related parties during
the period:
Transactions for the period Closing balance
---------- ----------------------------- ----------- -----------------------
30 June 30 June 31 December 30 June 30 June 31 December
2020 2019 2019 2020 2019 2019
Unaudited Unaudited Audited Unaudited Unaudited Audited
US$000 US$000 US$000 US$000 US$000 US$000
--------------------- ---------- ------------- -------------- ----------- ---------- -----------
Funding:
To Jumelles Limited 201 338 689 33 34 33
--------------------- ---------- ------------- -------------- ----------- ---------- -----------
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END
IR UWOBRRAUKUAR
(END) Dow Jones Newswires
September 29, 2020 02:00 ET (06:00 GMT)
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