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 
 
                      ("TSTR, Tri-Star" or the "Company") 
 
          Interim Results for the six month period ended 30 June 2020 
 
Tri-Star (AIM: TSTR), the mining and minerals processing company, is pleased to 
announce its unaudited results for the six months ended 30 June 2020. 
 
The Company does not have anything further to update shareholders on given the 
recent settlement agreement and annual results announcement. 
 
                                   **S** 
 
Enquiries: 
 
Tri-Star Resources plc 
 
David Facey, CEO/ CFO                                  ceo@tri-starresources.com 
 
 
St Brides Partners Ltd                                 Tel +44 (0)20 7236 1177 
Isabel de Salis/Beth Melluish 
 
 
SP Angel Corporate Finance (Nominated Adviser) 
 
Robert Wooldridge/Jeff Keating/Caroline Rowe           Tel: +44 (0)20 3470 0470 
 
FinnCap Ltd (Broker) 
 
Christopher Raggett/Camille Gochez                     Tel: +44 (0)20 7220 0500 
 
 
 
TRI-STAR RESOURCES PLC 
 
STATEMENT OF COMPREHENSIVE INCOME 
FOR THE SIX MONTHSED 30 JUNE 2020 
 
                                    Notes    Unaudited      Unaudited     Audited Year 
                                          Period ended   Period ended        ended  31 
                                          30 June 2020   30 June 2019    December 2019 
 
                                                 GBP'000          GBP'000            GBP'000 
 
Share based payment charge                        (18)          (211)            (224) 
 
Administrative expenses                          (425)          (325)            (486) 
 
Total administrative expenses and                (443)          (536)            (710) 
loss from operations 
 
Movement in the fair value of                    2,100          1,657          (5,404) 
financial asset 
 
Finance income                                       -              1                1 
 
Finance cost                                     (268)           (85)            (313) 
 
Profit/(loss) before taxation                    1,389          1,037          (6,426) 
 
Taxation                                4            -              -               18 
 
Profit/(loss) after taxation, and                1,389          1,037          (6,408) 
loss attributable to the equity 
holders of the Company 
 
Other comprehensive (expenditure)/ 
income 
 
Items that will be reclassified 
subsequently to profit and loss 
 
Other comprehensive (expenditure)/                   -              -                - 
income for the period, net of tax 
 
Total comprehensive profit/(loss)                1,389          1,037          (6,408) 
for the year, attributable to 
owners of the company 
 
Loss per share 
 
Basic profit/(loss) per share                     1.46           1.10           (6.79) 
(pence) 
 
Diluted profit/(loss) per share         5         1.42           1.07           (6.60) 
(pence) 
 
 
 
STATEMENT OF FINANCIAL POSITION 
AT 30 JUNE 2020 
 
                                          Unaudited        Unaudited          Audited 
 
                                       30 June 2020     30 June 2019      31 December 
                                                                                 2019 
 
Assets                         Notes          GBP'000            GBP'000            GBP'000 
 
Non-current 
 
Investment in associates           6          3,893            3,893            3,893 
 
Loan to associate                  7         13,500           18,462           11,400 
 
                                             17,393           22,355           15,293 
 
Current 
 
Cash and cash equivalents                        58              160              284 
 
Trade and other receivables                     107              110               85 
 
Total current assets                            165              270              369 
 
Total assets                                 17,558           22,625           15,662 
 
Liabilities 
 
Current 
 
Trade and other payables                        210              102               92 
 
Short term loans                   7          1,767            1,223            1,396 
 
Total current liabilities                     1,977            1,325            1,488 
 
Liabilities due after one year 
 
Deferred tax liability                           93              111               93 
 
Total liabilities                             2,070            1,436            1,581 
 
Equity 
 
Issued share capital                          6,941            6,884            6,936 
 
Share premium                                45,117           44,819           45,104 
 
Share based payment reserve                   1,811            1,867            1,811 
 
Retained earnings                          (38,381)         (32,381)         (39,770) 
 
Total equity                                 15,488           21,189           14,081 
 
Total equity and liabilities                 17,558           22,625           15,662 
 
 
 
STATEMENT OF CASH FLOWS 
FOR THE SIX MONTHSED 30 JUNE 2020 
 
                                           Unaudited       Unaudited     Audited Year 
                                        Period ended    Period ended            ended 
 
                                        30 June 2020    30 June 2019      31 December 
                                                                                 2019 
 
                                               GBP'000           GBP'000            GBP'000 
 
Cash flows from operating 
activities 
 
Profit/(loss) after tax                        1,389           1,037          (6,408) 
 
Finance income                                     -             (1)              (1) 
 
Finance cost                                     268              85              313 
 
Fees paid by shares                               18               3               28 
 
Movement in the fair value of                (2,100)         (1,657)            5,404 
financial asset 
 
Equity settled share-based                         -             196              196 
payments 
 
Increase in trade and other                     (22)             (5)               20 
receivables 
 
Increase/(decrease) in trade and                 118              12             (18) 
other payables 
 
Net cash outflow from operating                (329)           (330)            (466) 
activities 
 
Cash flows from investing 
activities 
 
Loans made to associate                            -            (76)             (76) 
 
Proceeds from sale of subsidiary                   -             247              247 
 
Finance income                                     -               1                1 
 
Net cash (outflow)/inflow from                     -             172              172 
investing activities 
 
Cash flows from financing 
activities 
 
Proceeds from issue of share                       -               -              316 
capital 
 
Share issue costs                                  -               -              (4) 
 
Net cash inflow from financing                     -               -              312 
activities 
 
Net increase/(decrease) in cash                (329)           (158)               18 
and cash equivalents 
 
Cash and cash equivalents at                     284             312              312 
beginning of period 
 
Exchange differences on cash and                 103               6             (46) 
cash equivalents 
 
Cash and cash equivalents at end                  58             160              284 
of period 
 
 
STATEMENT OF CHANGES IN EQUITY 
FOR THE SIX MONTHSED 30 JUNE 2020 
 
                                               Share        Share-based 
                                    Share    premium            payment                 Retained            Total 
                                  capital    account            reserve                 earnings           equity 
 
                                    GBP'000      GBP'000              GBP'000                    GBP'000            GBP'000 
 
Balance at 31                       6,884     44,816              1,671                 (33,418)           19,953 
December 2018 
(audited) 
 
Issue of share                          -          3                  -                        -                3 
capital 
 
Share based payments                    -          -                196                        -              196 
 
Transactions with                                  3 
owners                                -                             196                      -                199 
 
Loss for the period                     -          -                  -                    1,037            1,037 
 
Total comprehensive                     -          -                  -                    1,037            1,037 
loss for the period 
 
Balance at 30 June                  6,884     44,819              1,867                 (32,381)           21,189 
2019 (unaudited) 
 
Issue of share                         52        289                  -                        -              341 
capital 
 
Share issue costs                       -        (4)                  -                        -              (4) 
 
Transfer on lapse of                    -          -               (56)                       56                - 
warrants 
 
Transactions with                      52        285                                          56 
owners                                                             (56)                                       337 
 
Loss for the period                     -          -                  -                  (7,445)          (7,445) 
 
Total comprehensive                     -          -                  -                  (7,445)          (7,445) 
loss for the period 
 
Balance at 31                       6,936     45,104              1,811                 (39,770)           14,081 
December 2019 
(audited) 
 
Issue of share                          5         13                  -                        -               18 
capital 
 
Transactions with                                 13                  -                        - 
owners                                  5                                                                      18 
 
Loss for the period                     -          -                  -                    1,389            1,389 
 
Total comprehensive                   -          -                    -                    1,389            1,389 
loss for the period 
 
Balance at 30 June                  6,941     45,117              1,811                 (38,381)           15,488 
2020 (unaudited) 
 
 
 
NOTES TO THE INTERIM REPORT 
 
FOR THE SIX MONTHSED 30 JUNE 2020 
 
1. GENERAL INFORMATION 
 
The financial information set out in this interim report for the Company does 
not constitute statutory accounts as defined in Section 434 of the Companies 
Act 2006.  The Company's statutory financial statements for the year ended 31 
December 2019 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. 
The Company has taken advantage of the exemption under S402-405 of the 
Companies Act, to not prepare Group accounts as the subsidiary companies are 
considered to be immaterial. The comparative accounts for 31 December 2019 and 
30 June 2019 also relate to the Company only. 
 
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 2020 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 2019. 
 
The accounting policies have been applied consistently throughout the Group for 
the purposes of preparation of these condensed consolidated interim financial 
statements. 
 
GOING CONCERN 
 
The Directors have prepared cash flow forecasts for the period ending December 
2021. Subsequent to the signing of the agreement with the shareholders of SPMP 
as discussed in the Chairman's statement the Company is due to receive USD 
$600,000, and the holders of the secured loan notes have agreed to extend the 
term of the notes to 31 December 2021. With the significant reduction in costs 
as a result of delisting (and taking the company private), the cash flow 
forecasts indicate that the Company will require approximately GBP350,000 to meet 
its liabilities as they fall due in the period. The Directors' have considered 
the possible effects of Covid-19 but do not expect any significant impact from 
this. 
 
Accordingly, the Directors believe that it is appropriate to prepare the 
financial statements on a going concern basis. 
 
However, there is an outstanding guarantee from the Company in favour of local 
banks in respect of a loan to SPMP, and although the Directors are confident 
that this will not be called upon, there is no certainty of this. Whilst 
Tri-Star's potential liability has been reduced as a result of signing the 
recent agreement, if the guarantee is called upon, it could render the Company 
unable to pay its debts as they fall due and the existence of this guarantee 
therefore presents a material uncertainty which may cast significant doubt on 
the Company's ability as a going concern. 
 
3. SEGMENTAL REPORTING 
 
An operating segment is a distinguishable component of the Company 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 its investment in SPMP. 
 
In respect of the non-current assets as at 30 June 2020 of GBP17,393,000, GBP 
15,293,000 arise in the UK (30 June 2019: GBP22,355,000, 31 December 2019: GBP 
15,293,000), and GBPNil arise in the rest of the world (30 June 2019: GBPNil, 31 
December 2019: GBPNil). 
 
4. TAXATION 
 
As at 31 December 2019 Tri-Star Resources plc had unrelieved tax losses of 
approximately GBP11.9m.  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 2020 (30 June and 
31 December 2019: 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. 
 
5. PROFIT/(LOSS) PER SHARE 
 
The calculation of the basic profit/(loss) per share is based on the profit/ 
(loss) attributable to ordinary shareholders divided by the weighted average 
number of shares in issue during the period. 
 
                                      Unaudited      Unaudited            Audited 
 
                                   period ended   period ended         year ended 
 
                                   30 June 2020   30 June 2019   31 December 2019 
 
                                          GBP'000          GBP'000              GBP'000 
 
Profit/(loss) on ordinary                 1,389          1,037            (6,408) 
activities after tax (GBP'000) 
 
Weighted average number of shares 
for calculating basic loss per       95,200,848     94,122,723         94,318,114 
share 
 
Basic profit/(loss) per share              1.46           1.10             (6.79) 
(pence) 
 
Weighted average number of shares 
for calculating diluted loss per     98,141,518     96,682,764         97,105,422 
share 
 
Diluted profit/(loss) per share            1.42           1.07             (6.60) 
(pence) 
 
The weighted average number of ordinary shares excludes deferred shares which 
have no voting rights and no entitlement to a dividend. 
 
6. INVESTMENT IN ASSOCIATES 
 
SPMP was incorporated in the Sultanate of Oman in 2014.  Tri-Star had a 40% 
interest in the company at 30 June 2020, 30 June 2019 and 31 December 2019. 
Having reviewed SPMP forecasts, the Director's considered that no impairment of 
the value of the investment in SPMP was required. 
 
Additionally, Tri-Star has issued loans to SPMP as detailed in Note 7. 
 
7. 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, the further US$2.8m advanced as 
announced on 24 January 2018, and the $12m advanced between July 2018 and 
January 2019. 
 
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 three 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. 
 
The loan has been measured at fair value. In accordance with IFRS 9, the fair 
value of the mezzanine loan from TSTR to SPMP (the "SPMP Mezzanine Loan") has 
been derived using a net present value calculation in which an effective 
discount rate of 23% has been applied.  The Mezzanine Loan is assumed to be 
converted to equity in December 2023. The fair value at 31 December 2019 was GBP 
11,400,000, a fair value movement of GBP2,100,000 was recorded giving a fair 
value of GBP13,500,000 at 30 June 2020. The key judgements used in this 
assessment were the reliance on SPMP forecasts and market EBITDA multiples. 
Having confirmed that conversion at the earliest possible date, which is 
December 2023, was comfortably the most suitable route for the valuation, the 
key judgement was the effective discount rate of 23% which has been applied. 
The fair value is based on the Principal and rolled up interest of GBP21.7m as 
set out in the Mezzanine Loan Agreement dated 30 November 2017. The terms of 
the loan have been changed since the period end as described in the Chairman's 
statement. 
 
Odey Loan Notes 
 
Loan Notes payable comprise short-dated secured loan notes issued to Odey 
European Inc. ("OEI") and OEI MAC Inc. ("OMI"), two of the three OAM Funds that 
were equity shareholding funds as of 30 June 2020. 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 carried 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 have now agreed to extend repayment to 31 December 2021 or 
earlier at the Company's discretion. On signing the settlement agreement on 1 
November 2020, the interest payable was reduced to 5%. 
 
The US$6,000,000 Loan Notes were issued in November 2017. On 19 January 2018, 
US$2,681,000 of the principal and interest was repaid and a further 
US$2,639,000 was repaid on 10 July 2018. As at the period end, the outstanding 
balance of the Loan Notes was US$2,180,000 including accrued interest. 
 
8. CONTINGENT ASSET 
 
Under the agreement to sell the Roaster intellectual property to SPMP, 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 2020 (30 June and 31 December 2019: 
US$2m). As part of the Settlement Agreement $1.5m of this will form part of our 
investment in SPMP and $0.5m will be paid in cash. 
 
 
 
END 
 

(END) Dow Jones Newswires

November 09, 2020 02:00 ET (07:00 GMT)

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