Source - RNS
RNS Number : 8754J
Eurasia Mining PLC
15 September 2016
 

Eurasia Mining plc

("Eurasia" or the "Company")

Interim Results for the six months ended 

 

Chairman's Statement

Dear Shareholder,

As I anticipated in the Annual Report, platinum and gold mining at West Kytlim has commenced, with the prospect of at least 10 years of production lying ahead. At the time of writing we have shipped and had notification of receipt of the first concentrates from the mine. A single shipment of 574.18 grams of raw platinum was received at the Ekaterinburg Non-ferrous Metals Processing Plant and will be refined and then purchased by the refinery under the terms of our refining and sales agreement.

We are very pleased that we have come to this point despite difficult market conditions. Furthermore, we believe our royalty-like structure with OOO SK Region Stroy ("SKRS") has proved to be the correct course, sparing the Company additional shareholder dilution, project finance or loans. SKRS is a reputable contractor working with major companies in Russia and has undertaken to provide all the infrastructure, equipment and supplies for mining, as well as the operating costs, in exchange for a 70% return of the gross revenue. This allows Eurasia to earn 30% of top line sales without any financing risk. Meanwhile Eurasia has committed to leverage its expertise in alluvial platinum exploration and reserves definition to upgrade known resources to reserves within the mining license.

As SKRS had surplus earth-moving equipment and personnel to deploy to our West Kytlim site and Eurasia was seeking a risk-free structure, our agreement with SKRS presented a mutually beneficial agreement which is now bearing fruit. Revenue should now commence in the month of September with its distribution to the parties managed by Eurasia. The recent significant improvement in platinum and gold prices is a timely bonus for the operation. Further price growth is projected for precious metals by many analysts, in particular due to the structural deficit in notably South African platinum supply. This could further improve the economics at West Kytlim, even as Eurasia is protected from some downside risk through the royalty-like structure which awards a share of top line sales regardless of the operation's bottom line.

As I wrote earlier, we plan to increase the mining rate over the next two years and this will involve the installation of a powerline and the use of mains-powered draglines for waste stripping and ore stockpiling. These activities are to be undertaken by SKRS throughout this winter at no cost to Eurasia.

At Monchetundra, we continue to work on completing our filings for the eventual application for a discovery certificate and later a mining licence. The two target open pit resources are at West Nittis and Loipishnune. Initial positive drilling results from West Nittis, as well as the successful application of shallow soil geochemistry profiling, were announced on 22nd April 2016. This project is being reviewed by several interested parties and we are hopeful we can find a partner or a purchaser to advance it to production

At Semenovsky, our new gold in tailings project, we are continuing with detailed metallurgical testwork as the last step in our due diligence work, in advance of designing a mine. The exclusive option has been extended to November to allow more time to complete the transaction. In addition Eurasia, working in joint venture with Metal Tiger plc, has sought and been granted approval of a feasibility report (TEO in Russia) and its related reserves calculation. Both have now been approved and this, a maiden reserve for the project, has been registered on the state balance sheet as a C2 Reserve containing 3.5 tons of gold (112,000 ounces) and 49.3 tons of silver (1,578,000 ounces) (see announcement dated 31st August 2016). Results from the Eurasia drilling program carried out in April 2016 at Semenovsky also confirmed previously assessed grades in gold and silver. Average grade from the EUA drill program are 1.16 g/t gold and 17.3 g/t silver.

 In conclusion, the directors of Eurasia have targeted cash-generative and 'straight-forward' mining projects to support the development of the Company. We believe this strategy has proven successful for the Company's survival in the long term. Eurasia's royalty-like financing structure for the West Kytlim mine has allowed us to advance the project to mining and we look forward to crystallizing further value from our partnership with SKRS when the project achieves steady state production in the short term, and benefits from capital expansion in the medium term.

 

Michael Martineau

Chairman

Enquiries:

Eurasia Mining Plc

Christian Schaffalitzky/Michael de Villiers

+44 (0)207 932 0418 

WH Ireland Limited

Katy Mitchell/Nick Prowting

+44 (0)161 832 2174

Beaufort Securities

Elliot Hance

+44 (0)207 382 8300



 

Condensed consolidated statement of comprehensive income

for the six months ended 30 June 2016


Note

6 months to

30 June

2016

12 months to

31 December 2015

6 months to30 June

2015



(unaudited)

(audited)

(unaudited)






Revenue


                         -

                         -

                 3,640

Administrative costs


(245,679)

(667,970)

(334,365)

Finance costs


(95,000)

-

-

Other gains and losses

4

1,195,769

(1,019,838)

10,848






Profit/(loss) before tax


855,090

(1,687,808)

(323,517)






Income tax expense


-

-

-






Profit/(loss) for the period


855,090

(1,687,808)

(323,517)











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


(81,027)

110,925

(6,202)

Items that will be reclassified subsequently to
profit and loss:





Parents share of foreign exchange differences on translation
of foreign operations


(178,733)

282,733

7,366






Other comprehensive (loss)/income for the period, net of tax


(259,760)

393,658

1,164






Total comprehensive income/(loss) for the period


595,330

(1,294,150)

(322,353)






Profit/(loss) for the period attributable to:





Equity holders of the parent


660,512

(1,372,466)

(341,709)

Non-controlling interest


194,578

(315,342)

18,192



855,090

(1,687,808)

(323,517)






Total comprehensive income/(loss) for the period attributable to:





Equity holders of the parent


481,779

(1,089,733)

(334,343)

Non-controlling interest


113,551

(204,417)

11,990



595,330

(1,294,150)

(322,353)






Basic profit/(loss) (pence per share)


0.05

(0.11)

(0.03)

Basic and diluted profit/(loss) (pence per share)


0.05

(0.11)

(0.03)

 



 

Condensed consolidated statement of financial position

As at 30 June 2016


Note

At30June

2016

At31December

2015

At30June

2015


(unaudited)

(audited)

(unaudited)

ASSETS





Non-current assets





Property, plant and equipment

5

25,947

24,375

27,194

Intangible assets

6

4,222,933

3,200,726

3,423,112

Other financial assets

7

449,589

406,702

382,952






Total non-current assets


4,698,469

3,631,803

3,833,258






Current assets





Inventories


628

218

207

Trade and other receivables


240,381

210,795

185,780

Cash and bank balances


183,591

104,925

352,067






Total current assets


424,600

315,938

538,054






Total assets


5,123,069

3,947,741

4,371,312






EQUITY





Capital and reserves





Issued capital

8

24,912,402

24,185,436

23,809,404

Reserves

9

3,351,759

3,530,492

3,651,572

Accumulated losses


(22,624,653)

(23,285,165)

(22,653,643)






Equity attributable to equity holders of the parent


5,639,508

4,430,763

4,807,333

Non-controlling interest


(683,627)

(797,178)

(580,771)






Total equity


4,955,881

3,633,585

4,226,562






LIABILITIES





Current liabilities





Trade and other payables


167,188

314,156

144,750






Total current liabilities


167,188

314,156

144,750






Total liabilities


167,188

314,156

144,750






Total equity and liabilities


5,123,069

3,947,741

4,371,312

 


Condensed statement of changes in equity

for the six months ended 30 June 2015



Attributable to owners of the parent





Note

Share
capital

Share premium

Deferred shares

Other reserves

Foreign currency translation reserve

Accumulated losses

Total attributable to owners of parent

Non-controlling interest

Total equity












Balance at 1 January 2015


1,108,220

15,046,077

7,025,483

3,939,141

(294,935)

(22,311,934)

4,512,052

(592,761)

3,919,291












Issue of ordinary share capital for cash


118,754

534,395

-

-

-

-

653,149

-

653,149

Share issue cost


-

(23,525)

-

-

-

-

(23,525)

-

(23,525)

Transaction with owners


118,754

510,870

-

-

-

-

629,624

-

629,624












Loss for the period


-

-

-

-

-

(341,709)

(341,709)

18,192

(323,517)












Other comprehensive loss











Exchange differences on translation
of foreign operations


-

-

-

-

7,366

-

7,366

(6,202)

1,164

Total comprehensive income


-

-

-

-

7,366

(341,709)

(334,343)

11,990

(322,353)


Balance at 30 June 2015


1,226,974

15,556,947

7,025,483

3,939,141

(287,569)

(22,653,643)

4,807,333

(580,771)

4,226,562












 



 

Condensed statement of changes in equity

for the six months ended 30 June 2016



Attributable to owners of the parent





Note

Share
capital

Share premium

Deferred shares

Other reserves

Foreign currency translation reserve

Accumulated losses

Total attributable to owners of parent

Non-controlling interest

Total equity












Balance at 1 January 2016


1,269,043

15,890,910

7,025,483

3,542,694

(12,202)

(23,285,165)

4,430,763

(797,178)

3,633,585












Issue of ordinary share capital for cash


115,456

549,010

-

-

-

-

664,466

-

664,466

Issue of shares in lieu of loan interest


15,910

71,590

-

-

-

-

87,500

-

87,500

Issue of ordinary share capital for professional services


4,545

20,455

-

-

-

-

25,000

-

25,000

Share issue cost


-

(50,000)

-

-

-

-

(50,000)

-

(50,000)

Transaction with owners


135,911

591,055

-

-

-

-

726,966

-

726,966












Profit for the period


-

-

-

-

-

660,512

660,512

194,578

855,090












Other comprehensive loss











Exchange differences on translation
of foreign operations


-

-

-

-

(178,733)

-

(178,733)

(81,027)

(259,760)

Total comprehensive income


-

-

-

-

(178,733)

660,512

481,779

113,551

595,330


Balance at 30 June 2016


1,404,954

16,481,965

7,025,483

3,542,694

(190,935)

(22,624,653)

5,639,508

(683,627)

4,955,881

 

 

 


Condensed consolidated statement of cash flows

for the six months ended 30 June 2016



6 months to

30 June

2016

12 months to

31 December

2015

6 months to

30 June

2015



(unaudited)

(audited)

(unaudited)

Cash flows from operating activities










Profit/(loss) for the period


855,090

(1,687,808)

(323,517)

Adjustments for:





Depreciation and amortisation of non-current assets:





- Fixed assets


937

1,936

1,107

Net foreign exchange (profit)/loss


(1,195,769)

1,019,838

(10,848)

Finance costs


95,000

-

-

Costs recognised in income statement in respect of equity-settled share-based payments


25,000

2,788

-








(219,742)

(663,246)

(333,258)

Movements in working capital





(Increase)/decrease in inventories


(352)

25

(14,571)

Decrease/(increase) in trade and other receivables


18,622

(65,515)

94

(Decrease)/increase in trade and other payables


(175,000)

150,180

(23,620)






Cash used in operations


(376,472)

(578,556)

(371,355)











Net cash used in operating activities


(376,472)

(578,556)

(371,355)






Cash flows from investing activities





Payments for property, plant and equipment


(606)

(633)

(633)

Payments for other intangible assets


(197,141)

(516,701)

(127,818)






Net cash used in investing activities


(197,747)

(517,334)

(128,451)






Cash flows from financing activities





Proceeds from issues of equity shares


664,466

1,029,181

629,624

Payment for share issue costs


(50,000)

(23,525)

-

Proceeds from borrowings


242,500

-

-

Repayment of borrowings


(250,000)

-

-






Net cash generated by financing activities


606,966

1,005,656

629,624






Net increase/(decrease) in cash and cash equivalents


32,747

(90,234)

129,818

Effects of exchange rate changes on the balance of
cash held in foreign currencies


45,919

(29,704)

(2,614)






Cash and cash equivalents at the beginning of period


104,925

224,863

224,863






Cash and cash equivalents at the end of the period


183,591

104,925

352,067

 



 

Selected notes to the condensed consolidated financial statements

for the six months ended 30 June 2016

1. General information

Eurasia Mining plc (the "Company") is a public limited company incorporated and domiciled in Great Britain with its registered office and principal place of business at 2nd Floor, 85-87 Borough High Street, London SE1 1NH. 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 2015, 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 Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) ,as endorsed by the European Union (EU). These condensed consolidated interim financial statements for the period ended 30 June 2015 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 2015.

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 (£), 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 2015.



 

 

4. Other gains and losses

 



6 months to

30 June

2016

12 months to

31 December

2015

6 months to

30 June

2015

 


£

£

£

Net foreign exchange gain/loss


1,195,769

(1,019,838)

10,848








1,195,769

(1,019,838)

10,848

Significant foreign exchange gain achieved by the Group in 2016 is a result of Russian Rouble fluctuation within 2015 and 2016. A major contributor to this result is the financing of the Group's Russian subsidiaries denominated in GBP and USD. Rouble strengthen against GBP in 2016 by 21% (2015: weakened by 25%). 2016 gain indicates the Russian subsidiaries would require less resources to service their debts based on prevailing exchange rates at 30 June 2016, compare to the situation on 31 December 2015.

 

5. Property, plant and equipment



30 June

2016

31 December

2015

30 June

2015

 


£

£

£

Net book value at the beginning of period


24,375

27,599

27,599

Additions


606

633

633

Depreciation


(937)

(1,936)

(1,107)

Exchange differences


1,903

(1,921)

69






Net book value at the end of period


25,947

24,375

27,194

 

6. Intangible assets



30 June

2016

31 December

2015

30 June

2015

 


£

£

£

Net book value at the beginning of period


3,200,726

3,276,976

3,276,976

Additions


197,141

516,701

127,818

Acquisition through business combinations


-

-

-

Exchange differences


825,066

(592,951)

18,318






Net book value at the end of period


4,222,933

3,200,726

3,423,112

Intangible assets represent capitalised costs associated with Group's exploration, evaluation and development ofmineral resources.

7. Other financial assets



30 June

2016

31 December

2015

30 June

2015






 Advances to acquire interest in uranium project


449,589

406,702

382,952








449,589

406,702

382,952

 

Advances to acquire interest in uranium project represent payment of $602,000 made in 2011 towards acquisition of 55% interest in the Kamushanovsky uranium project in Kyrgyzstan translated using the prevailing rate of exchange at the end of reporting period.

 

8. Share capital



30 June

2016

31 December

2015

30 June

2015






 Issued ordinary shares with a nominal value of 0.1p:










 Number


1,404,954,237

1,269,042,780

1,226,974,422

 Nominal value (£)


1,404,954

1,269,043

1,226,974






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 (£)


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.

The increase in the Company's issued share capital during the reporting period occurred as follows:

Ordinary shares


 Number of shares

 Share
capital

 Share
premium




£

£

Balance at 1 January 2016


1,269,042,780

1,269,043

15,890,910

Share placing for cash


115,456,911

115,456

549,010

Issue of ordinary share capital for professional services


4,545,455

4,545

20,455

Shares issued in lieu of loan note interest


15,909,091

15,910

71,590

Cost of issue of shares


-


(50,000)






 Balance at 30 June 2016


1,404,954,237

1,404,954

16,481,965






 Deferred shares


 Number of deferred shares

 Deferred share
capital





£


 Balance at 1 January and 30 June 2016


143,377,203

7,025,483







 

9. Reserves


30 June

2016

31 December

2015

30 June

2015



£

£

£

Capital redemption reserve


3,539,906

3,539,906

3,539,906

Foreign currency translation reserve


(190,935)

(12,202)

(287,569)

Equity-based payment reserve


2,788

2,788

399,235








3,351,759

3,530,492

3,651,572






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. 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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