TIDMEUA
RNS Number : 2363B
Eurasia Mining PLC
30 September 2022
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS DEFINED IN
REGULATION NO. 596/2014 (AS IT FORMS PART OF RETAINED EU LAW AS
DEFINED IN THE EUROPEAN UNION (WITHDRAWAL) ACT 2018) AND IS IN
ACCORDANCE WITH THE COMPANY'S OBLIGATIONS UNDER ARTICLE 7 OF THAT
REGULATION.
30 September 2022
Eurasia Mining plc
("Eurasia" or the "Company")
Interim Results for the six months ended 30 June 2022
Eurasia, the palladium, platinum, rhodium, iridium and gold
producing company, today reports its unaudited interim results and
operational summary for the six months ended 30 June 2022.
Chairman's Statement
Dear Shareholder,
The first half of 2022 has seen significant progress at our West
Kytlim mine, as described in the Operations Update below. Eurasia's
plan to install grid power to site to reduce the carbon output
associated with overburden stripping, while also reducing
operational expenditure and improving efficiency, is advancing well
and our electric dragline, which is currently being assembled, is
aimed to significantly improve the stripping programme this coming
winter.
At Monchetundra the ongoing DFS study for the Loipishnune and
West Nittis open pits represents an important reporting milestone
for the project's development and is on schedule for submission
before the end of 2022.
Since February the conflict in Ukraine has affected all
international commerce to some extent. The effect on our
operations, including funding group subsidiary companies has been
minimal to date. We took the decision to stockpile ore from West
Kytlim at the beginning of the mining season due to our strong cash
position, volatility in the market currently, and in anticipation
of higher realisable sales revenue in the future. As such, despite
producing 167 kg of PGM concentrate (113kg for full year 2021), we
have made no commercial sales of platinum in the period, instead
opting to retain this PGM concentrate, which has a net realisable
value of c.GBP3 million for refining at a later date. The value
ascribed to this concentrate is for the platinum content only and
does not include any other PGMs or gold.
Our cash balance remains robust, with more than GBP3 million and
US$6.6 million at the time of writing in the Group's sterling and
US$ denominated bank accounts respectively. Due to volatility in
exchange rates in funding subsidiaries through inter-company loans,
a net gain of GBP6.1 million was reported for the period. The
Company's cash reserves are held in USD and GBP accounts outside of
Russia and therefore not directly exposed to Ruble foreign exchange
gains or losses against other major hard currencies.
Following the Company's Annual Results announcement of 29 June
2022, Eurasia's directors have maintained a regular dialogue with
the Company's legal advisers regarding the potential impact of any
UK or EU sanctions. The Company remains satisfied that neither of
its current activities at the West Kytlim Mine or on the Kola
Peninsula are prohibited under UK or EU sanctions rules.
Furthermore, the Group does not engage and has not engaged with any
sanctioned persons, entities or agencies.
To date there has been no significant impact on the Group's
activities as a result of the ongoing updates to the UK and EU
sanctions legislation. Sanctions introduced by the Russian Federal
government have also not affected the Group. The Group continues to
closely monitor all regulatory requirements and changes to the
laws, rules and regulations, taking steps whenever necessary to
ensure compliance with new legislation.
With regards to the proposed sale of our Russian assets, as
previously announced, our M&A team is focusing on BRICS
counterparties, and discussions are ongoing with predominantly
Russian, Indian and Chinese non-sanctioned counterparties. Whereas
progress has been made with certain parties, at present there can
be no guarantee that the Company will enter into a legally binding
sale and purchase agreement with any of the interested parties. We
expect potential buyers to remain anonymous until the Company is in
a position to execute a legally binding agreement and further
updates regarding the sale process will be made as appropriate.
In terms of the future development of Eurasia Mining PLC, we
continue to look at expanding the business in various ways,
including the development of hydrogen projects internationally
coupled with new mining opportunities in investment friendly
jurisdictions. The Company is also committed to the continued
development of Monchetundra as well as NKT (Eurasia's project, a
Tier-1 scale Nickel mine formerly operated by Norilsk Nickel) and
continuing to mine at West Kytlim.
The Company's Board has decades of experience in mineral project
identification and the management of complex engineering projects
during the development phase, such as the three pits at West Kytlim
(Malaya Sosnovka, Klyuchiki and Bolshaya Sosnovka) which were
successfully brought into production by Eurasia's technical team.
James Nieuwenhuys, our CEO launched a number of mines, including as
COO of Polyus (the world's largest gold company in terms of
reserves and resources) as well as Managing Director of SNC-Lavalin
and Bateman (large EPC companies).
We again thank our shareholders for their continued support.
Christian Schaffalitzky
Chairman of Eurasia Mining Plc
James Nieuwenhuys, Chief Executive Officer of the Company,
commented;
"We continue to advance our plans at both operations in the
Urals and Kola Peninsula, adding value to both projects while
pursuing a potential sale of assets as previously announced.
Despite significant geopolitical tensions the operating environment
within Russia itself has not changed materially with respect to our
operations there. The Board will take a view on the best
opportunity to refine to saleable metals at a later date, meanwhile
production is ongoing at the time of writing, and we look forward
to updating on our electric power and dragline projects, both
expected to contribute to the winter 2022/23 stripping
programme."
Consent for release
Christian Schaffalitzky, FIMMM, PGeo, CEng, is a director of the
Company. He has reviewed the update and consents to the inclusion
of the exploration information in the form and context in which it
appears here. He is a Competent Person for the purposes of the
reporting of these results.
For further information, please contact:
Eurasia Mining Plc
Christian Schaffalitzky/ Keith Byrne
+44 (0)207 932 0418
SP Angel Corporate Finance LLP (Nomad and Joint Broker)
Jeff Keating / David Hignell / Adam Cowl
+44 (0)20 3470 0470
Optiva Securities (Joint Broker)
Christian Dennis
Tel: +44 (0) 20 3137 1902
Operations update
West Kytlim
Eurasia's mine at West Kytlim commenced production on schedule
this season, with all three process plants in operation, due in
large part to the careful management of the winter stripping
operation which precedes the mining season. Major projects
including the installation of an electric dragline and a power line
to site have progressed well through the summer months. All 286
posts on the power lines route to site have been installed and the
line itself is currently being pulled through. Electric
infrastructure at site, including the high voltage sub-station
constructing and commissioning and six separate electrical hook
ups, have been installed.
The work plan for the 2023 season envisages mining of the
western bank of the Tylai River. A detailed design for a small
bridge has been prepared at an estimated material cost of GBP231k.
Work on this temporary construction, designed to be moveable to
another site as required, will commence in October 2022.
Lost time injury frequency rate ("LTIFR") remains at zero. A
full-time labour safety engineer, appointed earlier in this season
has now introduced all required protocols.
Year to date operational highlights
-- Power line and e-dragline construction projects on course for
completion later in this season.
-- LTIFR remains at zero for the 2022 season.
-- Three process plants operational throughout the mining season
processing Kluchiki and Bolshaya Sosnovka ores.
-- Typil exploration license drilling results show prospective
ore bodies at this exploration permit west of the main West Kytlim
mine permit.
-- A total of 434,000 cubic meters PGM bearing gravels washed at
three sites to 31 August 2022.
-- A total of 167 kg raw platinum (113kg for full year 2021) has
been produced year to date and has been transported to a secure
location in Ekaterinburg for later refining.
West Kytlim is an ESG focussed mine site, as such it is the
Company's intention to keep the mine's environmental
impact to a minimum:
-- Cooperation Agreement signed in July 2022 with the Karpinsk
Municipal Administration on social and economic development in the
town of Kytlim.
-- Limited use of reinforced concrete and asphalt. Mine
buildings built mostly of timber milled on site.
-- Open pits remediated when 'mined out', with recovery within 5 to 10 years post mining.
-- Modern machinery powered by renewable generated electricity utilised where possible.
Our plans to transition from predominantly diesel-based
stripping to renewable generated electric powered stripping are
nearing completion. The board recognises the potential to remove
the operational Green House Gas emissions associated with this
stage of the mining process as valuable in improving the projects'
environmental credits.
Typil license
An exploration programme for the 24.5km(2) Typil exploration
license, directly adjacent to the operating mine was approved in
early 2021 allowing geological mapping, using soil and stream
sediment sampling on both banks of the Kosva River to commence in
August 2021.
468.1m (75 holes) were drilled on 7 lines in the northeast
portion of the Licence area and in areas where tree felling was not
required. Key highlights from the programme, with a drilling
density commensurate with Russian standard C2 Reserves are provided
as follows;
-- At the confluence of the Typil and Kosva rivers, a potential
ore body of 20m wide and 0.8m thick at an average grade of 235
mg/m(3) raw platinum is contoured in Quaternary sediments.
-- At the eastern bank of the Typil River a potential ore body
0.8m thick with an inferred width of 80m at an average grade of 192
mg/m(3) raw platinum is contoured in pre-Quaternary (Neogene)
sediments.
-- On Line 24, in Quaternary sediments of the Typil eastern
bank, a 110m wide and not less than 0.6 m thick layer is identified
with an average grade of 284mg/m(3) (sample grades up to 860
mg/m3).
-- On the eastern bank of the Typilez Creek, two lodes with
potentially economic platinum grades are identified. At a placer
width of 160m and average thickness of 1.3m, the average grade
reported is 261 mg/m(3) . At a width of 80m and average thickness
of 0.9m, the average grade increases to 310 mg/m(3) (sample grades
up to 1,524 mg/m(3) ).
-- Numerous other platinum bearing intervals were identified in
the drill programme for follow up in the next stage of drilling
while several other prospective areas including the Typilez,
Mulychevka and Kyria River areas remain understudied.
These results are presented in a table in Appendix I below. The
Typil exploration report was provided by Michael Sukhov, Chief
Geologist at Kosvinsky Kamen.
Monchetundra, Monchetundra Flanks and other Kola projects
The Definitive Feasibility Study for the Monchetundra (West
Nittis and Loipishnune) open pits is well advanced and on schedule
for completion this year. Details of this report will be provided
when a response is received from the relevant authorities. The
Company has previously released a report commissioned by Wardell
Armstrong International covering the adjacent NKT deposit, a
deposit which the Company has title to through its Monchetundra
Flanks license. Reporting on other Kola deposits, including Nyud
and Moroshkovoe will be provided when Eurasia holds title to the
relevant licenses. Operational highlights include:
-- Monchetundra Definitive Feasibility Study being progressed
for completion by the end of 2022.
-- Metallurgical testwork reports now available for compilation
into the larger DFS report. New metallurgical study by SGS,
Mekhanobr-St Petersburg, LIMS and Gipronickel (Norilsk Nickel's
engineering arm) suggests grades, recoveries and flowsheet
unchanged from the 2016 feasibility study.
-- Rock mechanics studies and Hydro/Geotech drilling now
complete for West Nittis and Loipishnune open pits.
-- Recalculation of Monchetundra project resources and pit
outlines, reflecting metal price movement since the feasibility
study, for submission as a necessary component of the DFS.
-- Work continues on assessment of the NKT Project, contained
within Eurasia's 80% Flanks exploration license adjacent the
Monchetundra (West Nittis and Loipishnune) mining license, as a
standalone project or as a project combined with Monchetundra
deposits.
Appendix I: Representative Typil exploration license drilling
results:
Drill Drill From To Length Width Sediments Raw
line hole (m) (m) Pt* mg/m(3)
no no
Sample Drill hole intervals
------ ------- ------- ------ ----------- -------------
21 C-21-11 4.5 5.3 0.8 20 Quaternary 235
---------------- ------ ------- ------- ------ ----------- -------------
25 C-25-94 7.0 7.8 0.8 80 Neogene 192
---------------- ------ ------- ------- ------ ----------- -------------
Provisional placer
deposits contoured
at C2 drilling density
------ ------- ------- ------ ----------- -------------
Drill
holes
24 2-14 3.8* 7.3* 0.6*** 110 Quaternary 284
---------------- ------ ------- ------- ------ ----------- -------------
40 15-27 10.5* 13.6** 1.3*** 160 Quaternary 261
---------------- ------ ------- ------- ------ ----------- -------------
may be restated, at a higher cut-off
grade as;
------- ------ ----------- -------------
40 23-27 10.5* 13.6** 0.9*** 80 Quaternary 310
---------------- ------ ------- ------- ------ ----------- -------------
Note: * minimal depth; ** maximum depth; *** average length
The mineral measured at the West Kytlim mine is referred to as
Raw Platinum which is comprised of Platinum, Iridium, Palladium,
Rhodium and Gold.
Drilling density for the programme is that of Russian standard
C1 and C2 as defined in Russian industry mineral reporting
nomenclature. All drilling to date at a drilling diameter of
20cm.
Condensed consolidated statement of comprehensive income
for the six months ended 30 June 2022
Note 6 months 12 months 6 months
to to to
30 June 31 December 30 June
2022 2021 2021
(unaudited) (audited) (unaudited)
GBP GBP GBP
Sales 4 101,836 2,331,225 425,965
Cost of sales (36,197) (2,584,680) (665,448)
------------------------------------------------------------------- ----- ------------- ------------ ------------
Gross profit/(loss) 65,639 (253,455) (239,483)
Administrative costs (1,257,924) (2,717,765) (1,197,899)
Investment income 10,070 1,394 511
Finance costs (49,717) (103,445) (53,144)
Other gains 5 6,108,902 - 24,093
Other losses 5 (1,024,892) (65,250) -
Profit/(loss) before tax 3,852,078 (3,138,521) (1,465,922)
------------------------------------------------------------------- -----
Income tax expense - -
------------------------------------------------------------------- ----- ------------- ------------ ------------
Profit/(loss) for the period 3,852,078 (3,138,521) (1,465,922)
Other comprehensive (loss)/income:
Items that will not be reclassified
subsequently to
profit and loss:
NCI share of foreign exchange differences
on translation of foreign operations 405,694 36,855 1,293
Items that will be reclassified
subsequently to
profit and loss:
Parents share of foreign exchange
differences on translation
of foreign operations 945,695 (58,679) 4,116
Other comprehensive income/(loss) for the period, net of tax 1,295,040 1,351,389 5,409
-------------------------------------------------------------------------- ------------- ------------ ------------
Total comprehensive income/(loss)
for the period 5,203,467 (3,160,345) (1,460,513)
=================================================================== ===== ============= ============ ============
Profit/(loss) for the period attributable
to:
Equity holders of the parent 2,556,416 (2,910,479) (1,351,127)
Non-controlling interest 1,295,662 (228,042) (114,795)
3,852,078 (3,138,521) (1,465,922)
------------------------------------------------------------------- ----- ------------- ------------ ------------
Total comprehensive income/(loss) for the period attributable to:
Equity holders of the parent 3,502,111 (2,969,158) (1,347,011)
Non-controlling interest 1,701,356 (191,187) (113,502)
5,203,467 (3,160,345) (1,460,513)
------------------------------------------------------------------- ----- ------------- ------------ ------------
Basic and diluted profit/(loss) (pence per share) 0.09 (0.10) (0.05)
Condensed consolidated statement of financial position
As at 30 June 2022
Note At 30 At 31 December At 30 June
June
2022 2021 2021
(unaudited) (audited) (unaudited)
GBP GBP GBP
ASSETS
Non-current assets
Property, plant and equipment 6 12,634,691 5,061,743 4,578,844
Assets in the course of construction 1,329,132 640,423 124,303
Intangible assets 7 3,146,073 1,389,029 792,425
Investment to potential share in
joint venture 8 584,591 367,464 368,447
Total non-current assets 17,694,487 7,458,659 5,864,019
--------------------------------------- ----- -------------- --------------- -------------
Current assets
Inventories 9 2,135,082 38,673 360,630
Trade and other receivables 10 4,124,692 1,681,864 450,659
Current tax assets 10,371 5,334 5,348
Cash and bank balances 13,559,308 22,009,507 16,067,991
Total current assets 19,829,453 23,735,378 16,884,628
--------------------------------------- ----- -------------- --------------- -------------
Total assets 37,523,940 31,194,037 22,748,647
======================================= ===== ============== =============== =============
EQUITY
Capital and reserves
Issued capital 11 61,187,111 61,187,111 51,080,629
Reserves 12 4,868,386 3,922,691 3,985,486
Accumulated losses (30,558,116) (33,114,532) (31,555,180)
--------------------------------------- ----- -------------- --------------- -------------
Equity attributable to equity holders
of the parent 35,497,381 31,995,270 23,510,935
Non-controlling interest (248,693) (1,950,049) (1,872,364)
--------------------------------------- ----- -------------- --------------- -------------
Total equity 35,248,688 30,045,221 21,638,571
--------------------------------------- ----- -------------- --------------- -------------
LIABILITIES
Non-current liabilities
Lease liabilities 14 431,973 307,136 405,494
Provisions 16 470,029 143,268 99,422
Total non-current liabilities 902,002 450,404 504,916
--------------------------------------- ----- -------------- --------------- -------------
Current liabilities
Borrowings 13 50,833 31,953 32,038
Lease liabilities 14 211,397 122,407 113,059
Trade and other payables 15 1,111,020 486,558 443,943
Provisions 16 - 57,494 16,120
Total current liabilities 1,373,250 698,412 605,160
--------------------------------------- ----- -------------- --------------- -------------
Total liabilities 2,275,252 1,148,816 1,110,076
--------------------------------------- ----- -------------- --------------- -------------
Total equity and liabilities 37,523,940 31,194,037 22,748,647
======================================= ===== ============== =============== =============
Condensed statement of changes in equity
For the six months ended 30 June 2021
Attributable to owners of the parent
-------------------------------------------------------------------------------
Foreign Total
currency attributable
Share Share Deferred Other translation Accumulated to owners Non-controlling Total
Note capital premium shares reserves reserve losses of parent interest equity
GBP GBP GBP GBP GBP GBP GBP GBP GBP
Balance at 1 January
2021 2,758,702 28,028,671 7,025,483 3,924,026 57,344 (30,204,053) 11,590,173 (1,758,862) 9,831,311
Issue of ordinary
share
capital for cash 53,307 14,072,982 - - - - 14,126,289 - 14,126,289
Share issue cost - (858,516) - - - - (858,516) - (858,516)
Transaction with
owners 53,307 13,214,466 - - - - 13,267,773 - 13,267,773
----------------------- ---------- ------------ ----------- ----------- ------------ ------------- ------------- ---------------- -------------
Loss for the period - - - - - (1,351,127) (1,351,127) (114,795) (1,465,922)
Other
comprehensive
loss
Exchange differences
on translation
of foreign operations - - - - 4,116 - 4,116 1,293 5,409
Total comprehensive
income - - - - 4,116 (1,351,127) (1,347,011) (113,502) (1,460,513)
Balance at 30 June
2021 2,812,009 41,243,137 7,025,483 3,924,026 61,460 (31,555,180) 23,510,935 (1,872,364) 21,638,571
======================= ========== ============ =========== =========== ============ ============= ============= ================ =============
Condensed statement of changes in equity
For the six months ended 30 June 2022
Attributable to owners of the parent
--------------------------------------------------------------------------------
Foreign Total
currency attributable
Share Share Deferred Other translation Accumulated to owners Non-controlling Total
Note capital premium shares reserves reserve losses of parent interest equity
GBP GBP GBP GBP GBP GBP GBP GBP GBP
Balance at 1 January
2022 2,853,560 51,308,068 7,025,483 3,924,026 (1,335) (33,114,532) 31,995,270 (1,950,049) 30,045,221
Transaction
with owners - - - - - - - - -
--------------- ------ ---------- ------------ ----------- ----------- ------------ -------------- ------------- ---------------- ------------
Loss for the period - - - - - 2,556,416 2,556,416 1,295,662 3,852,078
Other
comprehensive
loss
Exchange differences
on translation
of foreign operations - - - - 945,695 - 945,695 405,694 1,351,389
Total comprehensive
income - - - - 945,695 2,556,416 3,502,111 1,701,356 5,203,467
Balance at 30 June (248,693
2022 2,853,560 51,308,068 7,025,483 3,924,026 944,360 (30,558,116) 35,497,381 ) 35,248,688
======================= ========== ============ =========== =========== ============ ============== ============= ================ ============
Condensed consolidated statement of cash flows
for the six months ended 30 June 2022
6 months 12 months 6 months
to to to
30 June 31 December 30 June
2022 2021 2021
(unaudited) (audited) (unaudited)
GBP GBP GBP
Cash flows from operating activities
Profit/(loss) for the period 3,852,078 (3,138,521) (1,465,922)
Adjustments for:
Depreciation and amortisation of
non-current assets 1,194,452 422,752 289,850
- Asset value write off to cost
of sales - 149,882
(Loss)/gain on sale or disposal
of property, plant and equipment (4,219) - -
Finance costs recognised in profit
or loss 49,717 103,445 53,144
Investment revenue recognised in
profit or loss (10,070) (1,394) (511)
Loss on impairment of financial
assets
Loss on impairment of inventory 1,024,892
Rehabilitation cost recognised in
profit or loss 90,096 145,785 61,643
Net foreign exchange (profit)/loss (6,104,683) 65,250 (24,093)
92,263 (2,252,801) (1,085,889)
Movements in working capital
Increase in inventories (3,098,450) (24,862) (346,782)
Increase in trade and other receivables (1,614,762) (1,395,059) (163,307)
Increase in trade and other payables 508,844 197,729 155,217
Cash used in operations (4,112,105) (3,474,993) (1,440,761)
Net cash used in operating activities (4,112,105) (3,474,993) (1,440,761)
------------------------------------------ -------------- ------------ ------------
Cash flows from investing activities
Interest received 10,070 1,394 511
Investment to acquire interest in
joint venture - (367,465) (368,447)
Payments for property, plant and
equipment (6,221,805) (1,910,033) (629,005)
Payments for other intangible assets (910,258) (682,419) (92,774)
Proceeds from disposal of property,
plant and equipment 4,219 - -
Net cash used in investing activities (7,117,774) (2,958,523) (1,089,715)
------------------------------------------ -------------- ------------ ------------
Cash flows from financing activities
Proceeds from issues of equity shares - 24,929,694 14,126,289
Payment for share issue costs - (1,555,439) (858,516)
Repayment of lease liability (24,757) (101,674) (13,971)
Interest paid (41,449) (101,048) (51,966)
Net cash (used in)/generated by
financing activities (66,206) 23,171,533 13,201,836
------------------------------------------ -------------- ------------ ------------
Net (decrease)/increase in cash
and cash equivalents (11,296,085) 16,738,017 10,671,360
Effects of exchange rate changes
on the balance of
cash held in foreign currencies 2,845,886 (132,611) (7,470)
Cash and cash equivalents at the
beginning of period 22,009,507 5,404,101 5,404,101
Cash and cash equivalents at the
end of the period 13,559,308 22,009,507 16,067,991
========================================== ============== ============ ============
Selected notes to the condensed consolidated financial
statements
for the six months ended 30 June 2022
1. General information
Eurasia Mining plc (the "Company") is a public limited company
incorporated and domiciled in Great Britain with its registered
office at International House, 42 Cromwell Road, London SW7 4EF,
United Kingdom and principal place of business at Clubhouse Bank, 1
Angel Court, EC2R 7HJ. The Company's shares are listed on AIM, a
market of the London Stock Exchange. The principal activities of
the Company and its subsidiaries (the "Group") are related to the
exploration for and development of platinum group metals, gold and
other minerals in Russia.
The financial information set out in these condensed interim
consolidated financial statements (the "Interim Financial
Statements") do not constitute statutory accounts as defined in
Section 435 of the Companies Act 2006. The Group's statutory
financial statements for the year ended 31 December 2021, prepared
under International Financial Reporting Standards (the "IFRS"),
have been filed with the Registrar of Companies. The auditor's
report on those financial statements was unqualified. The report
did not contain a statement under Section 498(2) of the Companies
Act 2006.
2. Basis of preparation
The Group prepares consolidated financial statements in
accordance with International Accounting Standards in conformity
with the requirements of the Companies Act 2006. These condensed
consolidated interim financial statements for the period ended 30
June 2022 have been prepared by applying the recognition and
measurement provisions of IFRS and the accounting policies adopted
in the audited accounts for the year ended 31 December 2021.
These Interim Financial Statements have been prepared under the
historical cost convention.
The accounting policies have been applied consistently
throughout the Group for the purposes of preparation of these
condensed consolidated interim financial statements.
The Interim Financial Statements are presented in Pounds
Sterling (GBP), which is also the functional currency of the parent
company.
3. Accounting policies
The Interim Financial Statements have been prepared in
accordance with the accounting policies adopted in the Group's last
annual financial statements for the year ended 31 December
2021.
4. Sales
6 months 12 months 6 months
to to to
30 June 31 December 30 June
2022 2021 2021
GBP GBP GBP
Sale of platinum and other metals 52,037 2,331,225 425,965
Rental income 49,799 - -
101,836 2,331,225 425,965
=================================== ========= ============ =========
There has been no commercial sale of platinum in H12022. Raw
platinum concentrate from the West Kytlim mining operation is
currently being stockpiled at a secure location in Ekaterinburg for
refining at more favourable Platinum and other PGM prices at a
later date. Revenue generated in the first six months of 2022 is
from the price adjustment due to timing between point of sale of
other metals in 2021 and settlement date in early 2022 (GBP52,037),
as well as income from rental of mining equipment to a mine site
contractor (GBP49,799).
5. Other gains and losses
6 months 12 months 6 months
to to to
30 June 31 December 30 June
2022 2021 2021
GBP GBP GBP
Gains
Gain on disposal of property, plant 4,219 - -
and equipment
Net foreign exchange gain * 6,104,683 - 24,093
6,108,902 - 24,093
Losses
Impairment of inventory ** (1,024,892) - -
Net foreign exchange loss - (65,250) (429,171)
(1,024,892) (65,250) (429,171)
5,084,010 (65,250) (405,078)
===================================== ============= ============ ==========
* Significant exchange gain is a result of revaluation of
monetary items expressed in Russian Rubles ('RUB') which
strengthens from GBP/RUB 101.18 at 1 January 2022 to GBP/RUB 63.6
at 31 June 2022.
** Impairment of inventory - revaluation of stockpiled platinum
concentrate to net realisable value using platinum price and
RUB/USD exchange rate prevailing at 30 June 2022.
6. Property, plant and equipment
30 June 31 December 30 June
2022 2021 2021
GBP GBP GBP
Net book value at the beginning
of period 5,061,743 4,295,908 4,295,908
Additions 5,911,509 1,298,813 533,983
Written off to cost of sales - (149,882) -
Depreciation (1,194,452) (422,752) (289,850)
Exchange differences 2,855,891 39,656 38,803
Net book value at the end of period 12,634,691 5,061,743 4,578,844
====================================== ============= ============ ==========
7. Intangible assets
30 June 31 December 30 June
2022 2021 2021
GBP GBP GBP
Net book value at the beginning
of period 1,389,029 696,504 696,504
Additions 910,258 682,420 92,774
Exchange differences 846,786 10,105 3,147
Net book value at the end of period 3,146,073 1,389,029 792,425
====================================== =========== ============ =========
Intangible assets represent capitalised costs associated with
Group's exploration, evaluation and development of mineral
resources.
8. Investment to potential share in joint venture
Investments to potential share in joint venture represents an
investment made in March 2021 to enter into a joint venture and
acquire, in stages, 75% interests in new assets on Kola peninsula
leveraging agreements in place with both Rosgeo and the Far East
and Arctic Region Development Corporation. ('ERDC', see RNS dated 6
December 2021). It is intended that these assets would be held in
new joint venture companies to be developed at the Company's
option. By 31 December 2021 The Company had invested RUB37,180,000
(GBP367,464 at the then prevailing RUB/GBP exchange rate). No
further investments have been made in the reporting period, and the
amount is carried to 30 June 2022 as RUB37,180,000
(GBP584,591).
9. Inventory
30 June 31 December 30 June
2022 2021 2021
Platinum concentrate 1,753,532 - -
Other inventory 381,550 38,673 360,630
2,135,082 38,673 360,630
======================= ========== ============ =========
Stockpiled platinum concentrate has been revalued to net
realisable value using platinum price and RUB/USD exchange rate
prevailing at 30 June 2022.
10. Trade and other receivables
30 June 31 December 30 June
2022 2021 2021
Trade receivables 78,520 480,588 495
Advances made 1,759,183 520,385
Prepayments 36,681 140,335 22,707
VAT receivable 2,123,355 359,290 324,261
Other receivables 126,953 181,266 103,196
4,124,692 1,681,864 450,659
==================== =========== ============ ========
The fair value of trade and other receivables is not materially
different to the carrying values presented. None of the receivables
are provided as security or past due.
11 . Share capital
30 June 31 December 30 June
2022 2021 2021
Issued ordinary shares with a
nominal value of 0.1p:
Number 2,853,559,995 2,853,559,995 2,724,774,624
Nominal value (GBP) 2,853,560 2,853,560 2,724,775
Fully paid ordinary shares carry one vote per
share and carry the right to dividends.
Issued deferred shares with a
nominal value of 4.9 p:
Number 143,377,203 143,377,203 143,377,203
Nominal value (GBP) 7,025,483 7,025,483 7,025,483
Deferred shares have the following rights and restrictions
attached to them:
- they do not entitle the holders to receive any dividends and
distributions;
- they do not entitle the holders to receive notice or to attend
or vote at General Meetings of the Company;
- on return of capital on a winding up the holders of the
deferred shares are only entitled to receive the amount paid up on
such shares after the holders of the ordinary shares have received
the sum of 0.1p for each ordinary share held by them and do not
have any other right to participate in the assets of the
Company.
There had been no change in the issued share capital during the
reporting period
Ordinary shares Number of Share Share
shares capital premium
GBP GBP
Balance at 1 January 2022 2,853,559,995 2,853,560 51,308,068
Balance at 30 June 2022 2,853,559,995 2,853,560 51,308,068
==================================== ============== ========== ===========
Deferred shares Number of Deferred
deferred share
shares capital
GBP
Balance at 1 January and 30 June
2022 143,377,203 7,025,483
==================================== ============== ========== ===========
12 . Reserves
30 June 31 December 30 June
2022 2021 2021
GBP GBP GBP
Capital redemption reserve 3,539,906 3,539,906 3,539,906
Foreign currency translation reserve 944,360 (1,335) 61,460
Equity-based payment reserve 384,120 384,120 384,120
4,868,386 3,922,691 3,985,486
====================================== =========== ============ ==========
The capital redemption reserve was created as a result of a
share capital restructuring in earlier years. There is no policy of
regular transactions affecting the capital redemption reserve.
The foreign currency translation reserve represents exchange
differences relating to the translation from the functional
currencies of the Group's foreign subsidiaries into GBP.
The equity-based payments reserve represents a reserve arisen on
(i) the grant of share options to employees under the employee
share option plan and (ii) on issue of warrants under terms of
professional service agreements.
13 . Borrowings
30 June 31 December 30 June
2022 2021 2021
GBP GBP GBP
Current
Unsecured loan 50,833 31,953 32,038
----------------- -------- ------------ --------
50,833 31,953 32,038
================ ======== ============ ========
In 2017 the Group entered into unsecured loan facility to borrow
up to 57 million Russian Rubles ('RUB') at 14% per annum, from
Region Metal, the then contractor and the West Kytlim mine
operator. The Group had drawn RUB 4.18 million and repaid RUB 0.9
million by 31 December 2021. As the contractor's arrangements had
been discontinued the Group has no intention to utilise any more
funds from this facility. The loan was due for repayment in 2021
but the Group received a court order not to repay the loan due to
ongoing court arbitrage between the lender and its creditors.
The Group is not a party of this arbitrage and/or not linked to
any party.
No borrowing costs were capitalised in 2022 and 2021.
14 . Lease liabilities
The Group leases certain of its plant and equipment. The average
remaining lease term is 3 years (2021: 4 years). . The Group has
option to purchase the equipment for a nominal amount at the
maturity of the finance lease. The Group's obligation under finance
leases are secured by the lessor's title to the leased assets.
Interest rates underlying all obligations under finance leases
are fixed at respective contract dates ranging from 21.9% to 23.5%
per annum.
Minimum lease payments 30 June 31 December 30 June
2022 2021 2021
GBP GBP GBP
Less than one year 315,252 200,633 203,647
Between one and five years 496,817 377,027 511,819
More than five years - - -
--------------------------------
812,069 577,660 715,466
Less future finance charges (168,699) (148,117) (196,913)
--------------------------------- ---------- ------------ ----------
Present value of minimum lease
payments 643,370 429,543 518,553
================================= ========== ============ ==========
Present value of minimum lease
payments 30 June 31 December 30 June
2022 2021 2021
GBP GBP GBP
Less than one year 211,397 122,407 113,059
Between one and five years 431,973 307,136 405,494
More than five years - - -
Present value of minimum lease
payments 643,370 429,543 518,553
================================= ========== ============ ==========
15 . Trade and other payables
30 June 31 December 30 June
2022 2021 2021
Trade payables 615,115 210,665 232,746
Accruals 56,826 161,035 23,051
Social security and other taxes 167,392 18,751 44,594
Other payables 271,687 96,107 143,552
1,111,020 486,558 443,943
================================== ========== ============ =========
The fair value of trade and other payables is not materially
different to the carrying values presented. The above listed
payables were all unsecured.
16 . Provision
30 June 31 December 30 June
2022 2021 2021
GBP GBP GBP
Long term provision:
Environment rehabilitation 470,029 143,268 99,422
------------------------------------------ ------------ ------------ ------------
Short term provision:
Environment rehabilitation - 57,494 16,120
------------------------------------------ ------------ ------------ ------------
470,029 200,762 115,542
========================================= ============ ============ ============
Six months 12 months Six months
Movement in provision to to to
30 June 31 December 30 June
2022 2021 2021
GBP GBP GBP
At 1 January 200,762 52,137 52,137
Recognised in the period 79,541 138,020 60,292
Utilised in the period - - -
Reduction resulting from re-measurement
or settlement without cost 10,555 7,487 -
Unwinding of discount and effect of
changes in the discount rate 8,268 2,397 1,178
Exchange difference 170,903 721 1,935
At the end of the period 470,029 200,762 115,542
========================================== ============ ============ ============
Provision is made for the cost of restoration and environmental
rehabilitation of the land disturbed by the West Kytlim mining
operations, based on the estimated future costs using information
available at the reporting date.
The provision is discounted using a risk-free discount rate of
from 8.65% to 8.70% (2021: 3.87% to 5.08%) depending on the
commitment terms, attributed to the Russian Federal Bonds.
Provision is estimated based on the sub-areas within general
West Kytlim mining licence the company has carried down its
operations on by the end of the reporting period. Timing is
stipulated by the forestry permits issued at the pre-mining stage
for each of sub-areas. Actual costs in respect of the long-term
provision recognised in 2022 will be incurred within 2023-2025.
17 . Commitments
At the time of the award of the Monchetundra mining license a
royalty payment was calculated by the Russian Federal Reserves
Commission. 20% of this payment was paid in December of 2018 and
the remaining 80%, or RUB 16.68 million (approximately GBP262,000)
to be paid by November 2023.
During 2020 the Group entered into several lease agreements to
lease mining plant and equipment. As at 30 June 2022 the average
lease term was 3 years and present value of minimum lease payments
GBP643,370 (30 June 2021: GBP518,553).
18. Contingent liabilities
In 2021 the Company had invested RUB 37,180,000 (GBP584,591 at a
prevailing exchange rate at 30 June 2022) in respect of the
Nyud-Moroshkovoe and other potential licenses and projects as per
the agreements in place with Rosgeo and ERDC.
Further investments are at the Company's discretion. The
Nyud-Moroshkovoe project is being used by the Company as the
template for the remaining assets, which will only be evaluated
after the successful conclusion of the Nyud-Moroshkovoe
project.
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END
IR BLGDCUBDDGDC
(END) Dow Jones Newswires
September 30, 2022 02:00 ET (06:00 GMT)
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