Source - LSE Regulatory
RNS Number : 1061Q
Keras Resources PLC
24 February 2021
 

Keras Resources plc / Index: AIM / Epic: KRS / Sector: Mining

24 February 2021

Keras Resources plc

('Keras' or the 'Company')

Final Results and Notice of AGM

 

Keras Resources plc, the AIM listed mineral resource company, is pleased to announce its final results for the year ended 30 September 2020.

 

Copies of the Company's full Annual Report and Financial Statements (the "Annual Report") will be made available to download from the Company's website at www.kerasplc.com/documents.aspx. and will also be posted to shareholders on 5 March 2021 along with the notice of its Annual General Meeting ("AGM"), which is to be held on 30 March 2021.

 

As a consequence of the measures contained in Schedule 14 of Corporate Insolvency and Governance Act 2020 the AGM will not be held at any particular place.  Shareholders will not be permitted to attend the meeting, and the method of voting will be by proxy.  Shareholders are strongly encouraged to submit their votes by proxy as soon as possible, appointing the Chairman of the Meeting as their proxy, so that their votes can be taken into account.

 

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014.

 

For further information please visit www.kerasplc.com, follow us on Twitter @kerasplc or contact the following:

 

 

Russell Lamming

Keras Resources plc

info@kerasplc.com

 

Nominated Adviser & Joint Broker

Ewan Leggat / Charlie Bouverat

 

SP Angel Corporate Finance LLP

 

+44 (0) 20 3470 0470

Joint Broker

Damon Heath / Erik Woolgar

 

Shard Capital Partners LLP

+44 (0) 207 186 9900

 

Financial PR

Susie Geliher / Cosima Akerman

St Brides Partners Ltd

+44 (0) 20 7236 1177

 

CHAIRMAN'S STATEMENT

 

The highlights of the period since my last report are the acquisition of a controlling interest in a new project, the Diamond Creek phosphate mine in Utah, USA, ("Diamond Creek") which is expected to begin generating cash for Keras during the current year, and the successful completion of the demerger of the Company's interests in ASX listed Calidus Resources Limited, through a capital reduction scheme.  In addition to the value distributed to shareholders, it also left Keras with distributable reserves creating a balance sheet that is geared towards the cashflow strategy adopted by the Company.

 

In addition, the Company has continued to take steps to ensure the grant of the exploitation licence for its Nayéga manganese mine in Togo.  Management has made steady progress with the new Togolese government, has ensured that there are no outstanding requirements related to the grant of the exploitation permit, and look forward to tangible progress in 2021.

 

Diamond Creek phosphate mine

Diamond Creek is the highest grade organic phosphate deposit in the US and is owned by a Delaware registered company Falcon Isle Holdings LLC ("Falcon Isle"). Keras has agreed to loan a total of $2.5m to Falcon Isle, of which $1.9m had been advanced by 30 September 2020. At the same date Keras had subscribed, for nominal consideration, for 40% of the issued capital of Falcon Isle.  Subsequent to 30 September 2020 Keras has advanced the final $600,000 of its loan commitment and now owns 51% of Falcon Isle, so that Falcon Isle will be treated as a subsidiary company for future accounting periods.

 

Diamond Creek is fully permitted and has mined, processed and sold organic phosphate during the last quarter of the financial year. The mined material only requires crushing, milling and bagging before being sold as high grade organic fertilizer. The Diamond Creek mine produces the highest grade organic phosphate available in the US - a 28% Phosphorus pentoxide ('P205') premium product with minimum 14% available phosphorous ('P'). The available P is significantly higher than the 3% marketed by the majority of its competitors. It also has a long life of mine: at a peak production rate of 48ktpa, the historic "surface mineable resources" alone represent in excess of 60 years of production.  The project does not currently have a JORC compliant resource but has a pre-stripped area with production drilling information representing 2 ½ years of planned production.

 

Production of organic fertilizer for sale to the North American market is planned to increase in stages up to 48,000 tons in Year 5, with forecasted operating costs reducing from an initial $229/ton to US$92/ton at peak production. In the first year of production 7,600 tons were produced, an increase of more than 50% over budget, of which 1,012 tons were sold.

 

Up to now beneficiation has been undertaken through toll-treating agreements. A new processing plant, which was fabricated and shipped from Shanghai, is now on site in Utah and construction is under way.  This new plant, to be owned and operated by Falcon Isle, has design capacity to process the five-year 48,000-ton production target and will increase both the installed capacity and flexibility to beneficiate a variety of organic phosphate products. It will also result in a significant reduction in operating costs compared with the current toll agreements.  Commissioning remains on schedule and the plant is expected to be operational by the end of March 2021.

 

Capital reduction and demerger of Calidus Resources Limited

During the year the Company completed the demerger of its holding of 723,750,000 shares in Calidus Resources Limited ("Calidus") by means of a capital reduction.

 

The capital reduction and demerger were approved by shareholders on 14 October 2019. Following the second High Court hearing, the Calidus shares were transferred to Keras shareholders on the register at 6.00pm on 19 November 2019 on the basis of 1 Calidus share for every 3.451963 Keras shares held by them on that date. Calidus shares were subsequently consolidated on a 10 for 1 basis, and are currently trading on the ASX at approximately double the price of A$0.23 per share (as adjusted for the consolidation) immediately following the demerger.

 

The capital reduction resulted in very substantial changes to the capital and reserves of Keras. Under the Court Orders, the balance on the Company's share premium account was cancelled, followed by the deferred shares, and the nominal value of each ordinary share was reduced from 0.1p ("Old Ordinary Shares") to 0.01p ("New Ordinary Shares"). The amount repayable to shareholders was satisfied by the transfer to them of the Calidus shares. As a result, the deficit on distributable reserves has been eliminated, so that profits made in future will be available for the payment of dividends.

 

The costs of the capital reduction and demerger, amounting to some £130,000, have been borne by Keras.

 

Nayéga manganese mine / Togo

On the 18 October 2019 the Council of Ministers of the Republic of Togo published a decree granting the right for large-scale exploitation of the manganese deposit at Nayéga to the Company's subsidiary, Societe Generale des Mines ("SGM").  Since that date the Company has concentrated its efforts on finalising the required exploitation permit. A number of factors have contributed to the delay in obtaining this licence. Early in 2020 there was a presidential election in Togo, which resulted in the re-election of the standing president. As is customary, the prime minister and his government resigned after the election, requiring Keras to forge new relationships with incoming ministers. To that must be added the effect of the Covid 19 pandemic. Togo has been among the most successful countries worldwide in dealing with the pandemic, but for a substantial part of the year its borders were closed. Notwithstanding these problems, substantial progress has been made, in particular following the reopening of air borders in September 2020 allowing management to continue with their efforts. The terms of the permit and associated protocols have been agreed, and SGM has been converted from a private to a public company, as required by law and in compliance with the draft Mining Convention. Finance for plant expansion through an offtake agreement is expected to be signed following the grant of the exploitation licence.

 

The Government of Togo is entitled to a 10% carried interest in SGM on grant of the exploitation licence. As part of its commitment to benefit the area where Nayéga  is situated, Keras is establishing a charitable foundation for the benefit of local communities, to which Keras intends to contribute 5% of its attributable net profits from SGM.

 

The exploitation permit requires Presidential approval to allow operations to commence.

 

Financial review

The Consolidated Statement of Comprehensive Income for the year shows a loss of £1,242,000 (2019 - loss £471,000). The results of the two periods are not comparable as the previous year includes the positive surplus of £681,000 from the bulk sample produced at Nayéga. The loss for the year under review has also been increased by the costs of discontinuing the previous Share Appreciation Rights scheme (£119,828), and thereby benefitting shareholders by increasing the number of Calidus shares transferred to them under the demerger, and the Company's proportion of Falcon Isle's net loss (£4,000).

 

Keras undertook fund raisings, in January and July 2020, raising £310,000 and £1,728,000 respectively, for working capital and, in the case of the second placing, to finance the Diamond Creek mine. Since the end of the year a further £1,550,000 has been raised. This level of cash is sufficient to allow Keras to seek and evaluate new projects.

 

Outlook

The current year will see the expansion of the Diamond Creek mine into a valuable and profitable asset for the Group, aided by the commissioning of the new processing plant.

 

The Board also remains hopeful that profitable production will commence at the Nayéga manganese mine in Togo.

 

Finally, I would like to take this opportunity to thank the rest of the board and our management team for their hard work, and shareholders for their continuing support.

 

Brian Moritz

Chairman

23 February 2021

 

 

STRATEGIC REPORT

 

Strategy and Business Plan

The Group's strategy is to maximise shareholder value through diversified revenue streams from its two core assets, Diamond Creek and Nayéga, thus enhancing the value of those assets through brownfields expansion projects while still identifying potential new projects that increase shareholder value by taking projects through the life cycle from feasibility to development.

 

The Group's business model has established the Company as an efficient and low cost explorer/developer.

 

During the reporting period the Group was focussed on three main areas:

 

1.   Demerging its shares in Calidus Resources Limited to shareholders by way of a capital reduction scheme. This was finalised in November 2019.

2.   Acquiring a producing mine with near term cash flow - the Diamond Creek phosphate mine in Utah, USA. The mine is owned by Falcon Isle, in which the Company acquired a 40% equity interest during the reporting period, subsequently increased to 51%. The Company has loaned Falcon Isle $2.5m which is repayable from cash flow. 

3.   Progressing the Nayéga manganese project in Togo and preparing for commercial production. The Council of Ministers of the Republic of Togo has issued a decree granting the right to mine manganese at Nayéga and, as and when an exploitation permit is obtained, the Group intends to mine commercially at Nayéga with the minimum of delay, initially using the facilities built for the bulk sample. An internal definitive feasibility study previously completed for Nayéga indicates that the project represents significant value potential for the Group.

 

In exploring and developing mineral deposits, the Group accepts that not all its exploration will be successful but also that the rewards for success can be high. It therefore expects that its shareholders will be invested for potential capital growth, taking a long-term view of management's good track record in mineral discovery and development. The Directors have continued to invest in the Company and currently hold approximately 22% of the issued shares in Keras, after allowing for the substantial fund raisings since the year end. We believe this stake provides further evidence of the Board's belief in and commitment to its strategy.

 

To date, the Group has financed its activities through equity raisings. As the Group's projects become more advanced, the Board will seek mining and/or offtake finance, and may also investigate strategic opportunities to obtain funding for projects from future customers via production sharing, royalty and other marketing arrangements.

  

Financial and Performance Review

There was no turnover in the year under review, but commercial sales have commenced in the year ended 30 September 2021.

 

The results of the Group are set out in detail in the financial statements. The Group reports a loss for the year of £1,242,000 (2019: loss £471,000).

 

As a result of the demerger of the Calidus shares, the consolidated total assets of the Group decreased during the year from £11.5m to £3.5m. For the same reason, net assets reduced from £11.3m to £3.1m. However, the capital reduction which was part of the demerger had the effect of reducing the deficit on distributable reserves from £10.3m to a surplus of £8,000, so that the Company will be in a position to distribute future profits as dividends, subject to working capital requirements.

 

Fixed assets total £1,332,000 (2019: £1,383,000) which includes plant at the Nayéga mine totalling £262,000 (2019: £331,000) as well as exploration, evaluation and development expenditure on the Group's projects in Togo. The carrying value of the Group's equity accounted interest in Falcon Isle, primarily costs relating to the acquisition less its share of losses, totals £1,622,000.

 

Expenditure such as pre-licence and reconnaissance costs is expensed in profit or loss as incurred.

 

The Directors have assessed the carrying value of the Nayéga manganese project and no impairment has been deemed necessary.

 

Key Performance Indicators (KPIs)

During the year the Board monitored the following KPIs:

 

·      Cash flow and working capital:

Short (<3 months) and long term cashflow models are prepared to monitor and forecast the Group's funding needs;

Management accounts prepared on a monthly basis for the Group's key subsidiaries and quarterly on a consolidated basis; and

Weekly reporting of the Group's working capital position.

 

When the Group receives an exploitation permit for the Nayéga Manganese project, activities at this project will increase substantially from the current reporting period, to include production forecasts and mine plans.  

Mining projects

 

Africa

Keras currently holds an 85% interest in the Nayéga manganese project in Togo, which covers 92,390 hectares in northern Togo, held through Societe Generale des Mines SA ("SGM").  As part of the process to convert the exploration permit to an exploitation permit, the Government of Togo will be granted a carried equity interest of 10%, so diluting the interest of Keras, reducing the Group's interest to 76.5%. The project is 30km from a main road, which has direct access to the regionally important deep-water port of Lome 600km away that has >800,000t per annum back loading capabilities.

 

Having defined a JORC (2012) Code compliant Indicated and Measured Resource of 11.0Mt @ 13.1% manganese, the Group has completed the Phase 1 Definitive Feasibility Study ("DFS") to develop an initial open-pit, 300,000tpa manganese operation.  To support commercial mining at Nayéga, we have applied for an exploitation permit.  The Council of Ministers of the Republic of Togo has decreed that SGM has the right to mine manganese at Nayéga, but the Group continues to await the award of the permit itself, and consequently we have been unable to undertake commercial mining activities during the year. Progress on this is described above and in the Chairman's Statement. Test sampling of the material produced as part of the bulk sample process has indicated a manganese content of 38.9% rather than the 35% envisaged in the DFS referred to above. As soon as the exploitation permit is granted, therefore, the directors intend to commence commercial production using the bulk sample plant at the rate of approximately 75,000tpa without the requirement for further capital expenditure, and to increase production capacity to 300,000tpa using offtake finance.

 

The Group had previously discontinued and disposed of all its other African projects.

 

North America

Keras acquired an interest in the Diamond Creek phosphate mine in July 2020, and increased its interest to 51% in December 2020. The mine is situated approximately 70km SSE of Salt Lake City, Utah. Diamond Creek is a fully permitted, high grade direct shipping ore ("DSO"), low capex organic phosphate mine, which has a significant historical mineral resource (mineral resources have not been classified according to any International Reporting Standard) with the first 2.5 years of production already pre-stripped.  The phosphate mineralisation comprises shale beds in the Meade Peak Member of the Phosphoria Formation.  The mineralised zone is c.3m thick and averages 28% P2O5 with average available phosphorous of 16%.  Historic reports vary with "surface mineable resources" ranging from 3.10Mt to 4.60Mt.  At a peak production rate of 48ktpa, the opencast resources alone represent in excess of 60 years of production. 

 

The product has received Organic Certification by all three key certification agencies in the USA. As a direct shipping ore it requires no chemical upgrade process, with in-situ grade of 28% P2O5, low heavy metal impurities and significantly higher available phosphate than any other organic rock phosphate in North America.

 

The 2020 mining campaign was completed in October 2020 with a total of 7,620 ore tons extracted from the mine. To date beneficiation has been undertaken through toll-treating agreements. A new plant, to be owned and operated by the Group, which has the capacity to process the 5-year 48,000-ton production target, has been manufactured in China and shipped to the USA. Commissioning is expected to be complete by 31 March 2021.  The plant will include a crushing and milling circuit to produce a range of products comprising -10 mesh, -100 mesh and -350 mesh powders and a granulation plant to produce high margin granulated organic phosphate.  The processing facility will also include a bagging plant to ensure that all products are available in both one ton tote bags and 50lb bags.  Once commissioned, the plant will increase both the available capacity and flexibility to produce different sized beneficiated material whilst lowering operating costs.

 

Risk Management

The Board regularly reviews the risks to which the Group is exposed and ensures through its meetings and regular reporting that these risks are minimised as far as possible.

 

The principal risks and uncertainties facing the Group at this stage in its development are:

 

Exploration Risk

 

The Group's business has been primarily mineral exploration and evaluation which are speculative activities and whilst the Directors are satisfied that good progress is being made, there is no certainty that the Group will be successful in the definition of economic mineral deposits, or that it will proceed to the development of any of its projects or otherwise realise their value.

 

The Group aims to mitigate this risk when evaluating new business opportunities by targeting areas of potential where there is at least some historical drilling or geological data available.

 

Resource Risk

All mineral projects have risk associated with defined grade and continuity. Mineral reserves and resources are calculated by the Group in accordance with accepted industry standards and codes but are always subject to uncertainties in the underlying assumptions which include geological projection and commodity price assumptions.

 

The Group reports mineral resources and reserves in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves ('the JORC Code'). The JORC Code is a professional code of practice that sets minimum standards for public reporting of mineral exploration results, mineral resources and ore reserves. Further information on the JORC Code can be found at www.jorc.org.

 

Development Risk

Delays in permitting, financing and commissioning a project may result in delays to the Group meeting production targets. Changes in commodity prices can affect the economic viability of mining projects and affect decisions on continuing exploration activity.

 

Mining and Processing Technical Risk

Notwithstanding the completion of metallurgical testwork, test mining and pilot studies indicating the technical viability of a mining operation, variations in mineralogy, mineral continuity, ground stability, ground water conditions and other geological conditions may still render a mining and processing operation economically or technically non-viable.

 

The Group has a small team of mining professionals experienced in geological evaluation, exploration, financing and development of mining projects. To mitigate development risk, the Group supplements this from time to time with engagement of external expert consultants and contractors.

 

Environmental Risk

Exploration and development of a project can be adversely affected by environmental legislation and the unforeseen results of environmental studies carried out during evaluation of a project. Once a project is in production unforeseen events can give rise to environmental liabilities.

 

The Group is now entering the mining stage. Any disturbance to the environment during this phase is required to be rehabilitated in accordance with the prevailing regulations of the countries in which we operate.

 

Financing & Liquidity Risk

The Group has had an ongoing requirement to fund its activities through the equity markets and may in future need obtain finance for project development. There is no certainty such funds will be available when needed. To date, Keras has managed to raise funds primarily through equity and debt placements despite the very difficult markets that currently exist for raising funding in the junior mining industry.

 

Political Risk

All countries carry political risk that can lead to interruption of activity. Politically stable countries can have enhanced environmental and social permitting risks, risks of strikes and changes to taxation whereas less developed countries can have, in addition, risks associated with changes to the legal framework, civil unrest and government expropriation of assets.

 

Partner Risk

Whilst there has been no past evidence of this, the Group can be adversely affected if joint venture partners are unable or unwilling to perform their obligations or fund their share of future developments.

 

The Group aims to mitigate this risk by 1) holding significant majority shareholdings in our projects that we can commit to funding our minority partners until production and positive cash flow and 2) endeavouring to enter into joint venture funding arrangements with credible counterparties.

 

Bribery Risk

The Group has adopted an anti corruption policy and whistle blowing policy under the Bribery Act 2010. Notwithstanding this, the Group may be held liable for offences under that Act committed by its employees or subcontractors, whether or not the Group or the Directors had knowledge of the commission of such offences.

 

Financial Instruments

Details of risks associated with the Group's financial instruments are given in Note 26 to the financial statements. Keras does not utilise any complex or derivative financial instruments.

 

COVID-19

The Directors do not believe that Covid 19 has had a material effect on the Company or its operations other than travel restrictions which restrict the ability of management to visit operations in Togo and the USA. This has been mitigated by increased home working and use of electronic communications. The Directors expect international travel to become easier in the foreseeable future.

 

Insurance Coverage

The Group maintains a suite of insurance coverage that is appropriate for the Group and Company. This is arranged via a specialist mining insurance broker and coverage includes public and products liability, travel, property and medical coverage and assistance while Group employees and consultants are travelling on Group business. This is reviewed at least annually and adapted as the Group's scale and nature of activities changes. Keras also has Directors and Officers insurance in place.

 

Internal Controls and Risk Management

The Directors are responsible for the Group's system of internal financial control. Although no system of internal financial control can provide absolute assurance against material misstatement or loss, the Group's system is designed to provide reasonable assurance that problems are identified on a timely basis and dealt with appropriately.

 

In carrying out their responsibilities, the Directors have put in place a framework of controls to ensure as far as possible that ongoing financial performance is monitored in a timely manner, that corrective action is taken and that risk is identified as early as practically possible. The Directors review the effectiveness of internal financial control at least annually.

 

The Board, subject to delegated authority, reviews capital investment, property sales and purchases, additional borrowing facilities, guarantees and insurance arrangements.

 

The Board takes account of the significance of social, environmental and ethical matters affecting the business of the Group. At this stage in the Group's development the Board has not adopted a specific policy on Corporate Social Responsibility as it has a limited pool of stakeholders other than its shareholders. Rather, the Board seeks to protect the interests of Keras' stakeholders through individual policies and through ethical and transparent actions.

 

The Group has adopted an anti-corruption and bribery policy and a whistle blowing policy as stated above.

 

Shareholders

The Directors are always prepared, where practicable and subject to confidentiality under the AIM Rules, to enter into dialogue with shareholders to promote a mutual understanding of objectives. The Annual General Meeting provides the Board with an opportunity to informally meet and communicate directly with investors.

Environment

The Board recognises that its principal activities, mineral exploration and mining, have potential to impact on the local environment. To date, activities at the various projects have been limited to mining and drilling activities and the Group does comply with local regulatory requirements with regard to environmental compliance and rehabilitation. The impact on the environment of the Group's activities has the potential to increase as our projects move into a production phase. This is currently assessed through baseline environmental studies that are being undertaken and identifying resources needed to manage environmental compliance in the future.

 

Given the Group's size and scale it is not considered practical or cost effective to collect and report data on carbon emissions.

 

Employees

The Group operates primarily through contractors. Notwithstanding this, the Group engages its employees to understand all aspects of the Group's business and seeks to remunerate its employees fairly, being flexible where practicable. The Group gives full and fair consideration to applications for employment received regardless of age, gender, colour, ethnicity, disability, nationality, religious beliefs, transgender status or sexual orientation. The Group takes account of employees' interests when making decisions and welcomes suggestions from employees aimed at improving the Group's performance.

 

The Group now operates in Togo and in the USA. It recruits locally as many of its employees and contractors as practicable.

 

The Company has three directors and one senior manager (Graham Stacey) - all are male.

 

Suppliers and Contractors

The Group recognises that the goodwill of its contractors, consultants and suppliers is important to its business success and seeks to build and maintain this goodwill through fair dealings. The Group has a prompt payment policy and seeks to settle all agreed liabilities within the terms agreed with suppliers.

 

Health and Safety

The Board recognises that it has a responsibility to provide strategic leadership and direction in the development of the Group's health and safety strategy in order to protect all of its stakeholders. The Group does not have a formal health and safety policy at this time. This is re-evaluated as and when the Group's nature and scale of activities expand.

This Strategic Report was approved by the Board of Directors on 23 February 2021.

 

Section 172 statement

The Directors believe they have acted in the way most likely to promote the success of the Company for the benefit of its members as a whole, as required by s172 of the Companies Act 2006.

The requirements of s172 are for the Directors to:

·      Consider the likely consequences of any decision in the long term;

·      Act fairly between the members of the Company;

·      Maintain a reputation for high standards of business conduct;

·      Consider the interests of the Company's employees;

·      Foster the Company's relationships with suppliers, customers and others; and

·      Consider the impact of the Company's operations on the community and the environment.

 

The Company's operations and strategic aims are set out throughout the Strategic Report and in the Chairman's Statement, and relationships with stakeholders are also dealt with in the Corporate Governance Statement

 

Russell Lamming

Director

 

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 SEPTEMBER 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

2020

£'000

 

2019

£'000

 

Continuing operations

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

 

 

-

 

-

Cost of sales

 

 

 

 

 

 

 

 

 

-

 

-

Gross profit

 

 

 

 

 

 

 

 

 

-

 

-

Recovery of costs of bulk sample

Administrative and exploration expenses

 

 

 

 

 

-

(1,235)

 

681

(1,147)

Loss from operating activities

 

 

 

 

 

 

 

(1,235)

 

(466)

 

 

 

 

 

 

 

 

 

 

 

Finance costs

 

 

 

 

 

 

 

 

 

(3)

 

(5)

Net finance costs

 

 

 

 

 

(3)

 

(5)

 

 

 

 

 

 

 

 

 

Share of net loss of associates accounted for using the equity method

 

 

 

 

 

(4)

 

-

 

 

 

 

 

 

 

 

 

Results from operating activities after finance costs

 

 

 

(1,242)

 

(471)

 

 

 

 

 

 

 

 

 

 

 

Tax

 

 

 

 

 

 

 

-

 

-

Loss for the year from continuing operations

 

 

 

 

 

(1,242)

 

(471)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income - items that may be subsequently reclassified to profit or loss

 

 

 

 

 

 

 

 

Exchange translation on foreign operations

 

 

 

(15)

 

32

Items that will not be reclassified to profit or loss

 

 

 

 

 

 

Change in fair value of equity investments at fair value though other comprehensive income

 

 

 

-

 

(1,604)

Total comprehensive loss for the year

 

 

 

 

(1,257)

 

(2,043)

 

Loss attributable to:

 

 

 

 

 

 

 

 

Owners of the Company

 

 

 

 

 

(1,181)

 

(514)

Non-controlling interests

 

 

 

 

 

(61)

 

43

Loss for the year

 

 

 

 

 

(1,242)

 

(471)

 

 

 

 

 

 

 

 

 

 

Total comprehensive loss attributable to:

 

 

 

 

 

 

Owners of the Company

 

 

 

 

 

(1,194)

 

(2,091)

Non-controlling interests

 

 

 

 

 

(63)

 

48

Total comprehensive loss for the year

 

 

 

 

(1,257)

 

(2,043)

 

 

 

 

 

 

 

 

 

Earnings per share from continuing and discontinued operations

 

 

 

 

Basic and diluted loss per share (pence)

 

 

 

(0.040)

 

(0.022)

From continuing operations

 

 

 

 

 

 

Basic and diluted loss per share (pence)

 

 

 

(0.040)

 

(0.022)

                                   

  

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 SEPTEMBER 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

2020

£'000

 

2019

£'000

Assets

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment

 

 

 

 

 

 

 

263

 

332

Intangible assets

 

 

 

 

 

 

 

1,069

 

1,051

Investments accounted for using the equity method

 

 

 

 

 

 

 

1,622

 

-

Non-current assets

 

 

 

 

 

 

 

2,954

 

1,383

 

 

 

 

 

 

 

 

 

 

 

Other investments

 

 

 

 

 

 

 

-

 

9,923

Trade and other receivables

 

 

 

 

 

 

 

83

 

35

Cash and cash equivalents

 

 

 

 

 

 

 

438

 

184

Current assets

 

 

 

 

 

 

 

521

 

10,142

Total assets

 

 

 

 

 

 

 

3,475

 

11,525

 

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

 

 

Share capital

 

 

 

 

 

 

 

487

 

7,266

Share premium

 

 

 

 

 

 

 

2,637

 

10,938

Other reserves

 

 

 

 

 

 

 

16

 

3,426

Retained earnings/(deficit)

 

 

 

 

 

 

 

8

 

(10,310)

Equity attributable to owners of the Company

 

 

 

 

 

3,148

 

11,320

Non-controlling interests

 

 

 

 

 

 

 

(140)

 

(76)

Total equity

 

 

 

 

 

 

 

3,008

 

11,244

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

Trade and other payables

 

 

 

 

 

 

 

467

 

281

Current liabilities

 

 

 

 

 

 

 

467

 

281

Total liabilities

 

 

 

 

 

 

 

467

 

281

Total equity and liabilities

 

 

 

 

 

 

 

3,475

 

11,525

 

 

 

The financial statements were approved by the Board of Directors and authorised for issue on 23 February 2021. They were signed on its behalf by:

 

 

Brian Moritz, Director

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 SEPTEMBER 2020

 

 

 

Attributable to owners of the Company

 

 

 

 

 

 

 

 

Share

capital

 

 

£'000

Share premium

 

 

£'000

Share

option

/warrant reserve

£'000

Exchange reserve

 

 

£'000

 

Financial

assets at

FVOCI

 

£'000

 

Retained earnings/(deficit)

 

 

£'000

Total

 

 

 

£'000

Non-controlling interests

 

£'000

 

Total equity

 

 

£'000

Balance at 1 October 2019

 

7,266

 

10,938

 

-

 

(33)

 

3,459

 

(10,310)

 

11,320

 

(76)

 

11,244

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss for the year

 

-

 

-

 

-

 

-

 

-

 

(1,181)

 

(1,181)

 

(61)

 

(1,242)

Other comprehensive income

-

 

-

 

-

 

(16)

 

-

 

4

 

(12)

 

(3)

 

(15)

Total comprehensive loss for the year

-

 

-

 

-

 

(16)

 

-

 

(1,177)

 

(1,193)

 

(64)

 

(1,257)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital reduction

 

(7,023)

 

(10,938)

 

-

 

-

 

-

 

17,961

 

-

 

-

 

-

Demerger and recycling of OCI reserve

 

-

 

-

 

-

 

-

 

(3,459)

 

(6,464)

 

(9,923)

 

-

 

(9,923)

Issue of ordinary shares

 

244

 

2,718

 

-

 

-

 

-

 

-

 

2,962

 

-

 

2,962

Costs of share issue

 

-

 

(81)

 

-

 

-

 

-

 

-

 

(81)

 

-

 

(81)

Share-based payment transactions

-

 

-

 

63

 

-

 

-

 

-

 

63

 

-

 

63

Transfer

-

 

-

 

-

 

2

 

-

 

(2)

 

-

 

-

 

-

Transactions with owners, recognised directly in equity

(6,779)

 

(8,301)

 

63

 

2

 

 

11,495

 

(6,979)

 

-

 

(6,979)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 30 September 2020

487

 

2,637

 

63

 

(47)

 

-

 

8

 

3,148

 

(140)

 

3,008

 

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 SEPTEMBER 2019

 

 

 

Attributable to owners of the Company

 

 

 

 

 

 

 

 

Share

capital

 

£'000

Share premium

 

£'000

Share

option

reserve

£'000

Exchange reserve

 

£'000

 

Financial assets at FVOCI

£'000

 

Retained deficit

 

£'000

Total

 

 

£'000

Non-controlling interests

£'000

 

Total equity

 

£'000

 

Balance at 1 October 2018

 

 

7,064

 

10,358

 

108

 

(36)

 

5,063

 

(10,006)

 

12,551

 

(124)

 

12,427

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss for the year

 

 

-

 

-

 

-

 

-

 

-

 

(514)

 

(514)

 

43

 

(471)

 

Other comprehensive income

 

-

 

-

 

-

 

3

 

(1,604)

 

24

 

(1,577)

 

5

 

(1,572)

 

Total comprehensive loss for the year

-

 

-

 

-

 

3

 

(1,604)

 

(490)

 

(2,091)

 

48

 

(2,043)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issue of ordinary shares

 

 

202

 

607

 

-

 

-

 

-

 

-

 

809

 

-

 

809

 

Costs of share issue

 

 

-

 

(27)

 

-

 

-

 

-

 

-

 

(27)

 

-

 

(27)

 

Share-based payment transactions

 

-

 

-

 

78

 

-

 

-

 

-

 

78

 

-

 

78

 

Transfer reserve in respect of warrants lapsed

-

 

-

 

(186)

 

-

 

-

 

186

 

-

 

-

 

-

 

Total transactions with owners, recognised directly in equity

 

202

 

580

 

(108)

 

-

 

-

 

186

 

860

 

-

 

860

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 30 September 2019

 

7,266

 

10,938

 

-

 

(33)

 

3,459

 

(10,310)

 

11,320

 

(76)

 

11,244

 

                                                 

 

 

The available for sale assets reserve at 30 September 2018 has been reclassified to financial assets at FVOCI on adoption of IFRS 9.

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 SEPTEMBER 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2020

£'000

 

2019

£'000

Cash flows from operating activities 

 

 

 

 

 

 

 

 

 

 

Loss from operating activities

 

 

 

 

 

 

 

(1,242)

 

(471)

Adjustments for:

 

 

 

 

 

 

 

 

 

 

Depreciation and amortisation

 

 

 

 

 

76

 

28

Share of loss of equity accounted associate

 

 

 

4

 

-

Compensation on cancellation of SARS scheme

 

 

 

120

 

-

Equity-settled share-based payments

 

 

 

63

 

78

Impairment

 

 

 

-

 

155

Foreign exchange differences

 

 

 

 

 

 

 

(39)

 

36

 

 

 

 

 

 

 

 

(1,018)

 

(174)

 

 

 

 

 

 

 

 

 

 

 

Changes in:

 

 

 

 

 

 

 

 

 

 

-  trade and other receivables

 

 

 

 

 

 

 

2

 

(19)

-  trade and other payables

 

 

 

 

 

 

 

278

 

(18)

Cash generated by/(used in) operating activities

 

 

 

 

 

(738)

 

(211)

 

 

 

 

 

 

 

 

 

 

 

Finance costs

 

 

 

 

 

 

 

-

 

-

Taxes paid

 

 

 

 

 

 

 

-

 

-

Net cash generated by/(used in) operating activities

 

 

 

(738)

 

(211)

 

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

 

 

Acquisition of property, plant and equipment

 

 

 

 

 

-

 

(127)

Exploration and licence expenditure

 

 

 

 

 

(1)

 

(18)

Investment in associate

 

 

 

 

 

(938)

 

-

Net cash used in investing activities

 

 

 

 

 

 

 

(939)

 

(145)

 

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

 

 

Net proceeds from issue of share capital

 

 

 

 

 

1,931

 

323

Net cash flows from financing activities

 

 

 

 

 

 

 

1,931

 

323

 

 

 

 

 

 

 

 

 

 

 

Net (decrease)/increase in cash and cash equivalents

 

 

254

 

(33)

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at beginning of year

 

 

 

 

 

184

 

217

Cash and cash equivalents at 30 September

 

 

 

 

 

438

 

184

                           

 

 

The following significant non-cash transactions took place in the year ended 30 September 2020:

·      Shares were issued to settle a total of £899,000 due to creditors and certain directors, which includes amounts previously advanced to Falcon Isle by certain directors totalling $700,000.

·      Under the Company's capital reduction scheme, following approval by shareholders and by the High Court, the Company's entire holding of ordinary shares in Calidus was transferred to the Company's shareholders.

 

COMPANY STATEMENT OF FINANCIAL POSITION

AS AT 30 SEPTEMBER 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

2020

£'000

 

2019

£'000

Assets

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment

 

 

 

 

 

 

 

-

 

-

Investments

 

 

 

 

 

 

 

1,622

 

-

Non-current assets

 

 

 

 

 

 

 

1,622

 

-

 

 

 

 

 

 

 

 

 

 

 

Other investments

 

 

 

 

 

 

 

-

 

9,923

Loans

 

 

 

 

 

 

 

1,534

 

1,379

Trade and other receivables

 

 

 

 

 

 

 

70

 

34

Cash and cash equivalents

 

 

 

 

 

 

 

428

 

175

Current assets

 

 

 

 

 

 

 

2,032

 

11,511

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

 

 

 

 

 

 

3,654

 

11,511

 

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

 

 

 

Share capital

 

 

 

 

 

 

 

487

 

7,266

Share premium

 

 

 

 

 

 

 

2,637

 

10,938

Other reserves

 

 

 

 

 

 

 

63

 

3,459

Retained earnings/(deficit)

 

 

 

 

 

 

 

285

 

(10,401)

Total equity attributable to owners of the Company

 

 

 

3,472

 

11,262

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

Trade and other payables

 

 

 

 

 

 

 

182

 

249

Current liabilities

 

 

 

 

 

 

 

182

 

249

 

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

 

 

 

 

 

182

 

249

 

 

 

 

 

 

 

 

 

 

 

Total equity and liabilities

 

 

 

 

 

 

 

3,654

 

11,511

 

The Company has elected to take the exemption under Section 408 of the Companies Act 2006 from presenting the Parent Company profit and loss account. The Parent Company loss for the period was £811,000 (2019: loss of £711,000).

 

The financial statements of Keras Resources PLC, company number 07353748, were approved by the Board of Directors and authorised for issue on 23 February 2021.  They were signed on its behalf by:

 

 

 

Brian Moritz, Director

COMPANY STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 SEPTEMBER 2020

 

 

 

 

Share

capital

 

£'000

 

Share premium

 

£'000

Share option

/warrant reserve

£'000

 

Financial

assets at

FVOCI

£'000

 

Retained earnings/ (deficit)

 

£'000

 

Total

equity

 

£'000

Balance at 1 October 2018

 

7,064

 

10,358

108

 

5,063

 

(9,876)

 

12,717

 

 

 

 

 

 

 

 

 

 

 

 

Loss for the year

 

-

 

-

-

 

-

 

(711)

 

(711)

Other comprehensive income

 

-

 

-

-

 

(1,604)

 

-

 

(1,604)

 

Total comprehensive loss for the year

 

 

-

 

 

-

 

 

-

 

 

(1,604)

 

 

(711)

 

 

(2,315)

 

 

 

 

 

 

 

 

 

 

 

 

 

Issue of ordinary shares

 

202

 

607

 

-

 

-

 

-

 

809

Costs of share issue

 

-

 

(27)

 

-

 

-

 

-

 

(27)

Share-based payment transactions

 

-

 

-

 

78

 

-

 

-

 

78

Transfer reserves in respect of warrants lapsed

 

-

 

-

 

(186)

 

--

 

186

 

-

Transactions with owners, recognised directly in equity

 

202

 

580

 

(108)

 

-

 

186

 

860

 

 

 

 

 

 

 

 

 

 

 

Balance at 30 September 2019

 

7,266

 

10,938

 

-

 

3,459

 

(10,401)

 

11,262

 

Balance at 1 October 2019

 

7,266

 

10,938

-

 

3,459

 

(10,401)

 

11,262

 

 

 

 

 

 

 

 

 

 

 

 

Loss for the year

 

-

 

-

-

 

-

 

(811)

 

(811)

Other comprehensive income

-

 

-

-

 

-

 

-

 

-

 

Total comprehensive loss for the year

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(811)

 

 

(811)

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital reduction

 

(7,023)

 

(10,938)

 

 

 

-

 

17,961

 

-

Demerger and recycling of OCI reserve

 

-

 

-

 

-

 

(3,459)

 

(6,464)

 

(9,923)

Issue of ordinary shares

 

244

 

2,718

 

-

 

-

 

-

 

2,962

Costs of share issue

 

-

 

(81)

 

-

 

-

 

-

 

(81)

Share-based payment transactions

 

-

 

-

 

63

 

-

 

-

 

63

Transactions with owners, recognised directly in equity

 

(6,779)

 

(8,301)

 

63

 

(3,459)

 

11,497

 

(6,979)

 

 

 

 

 

 

 

 

 

 

 

Balance at 30 September 2020

 

487

 

2,637

 

63

 

-

 

285

 

3,472

COMPANY STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 SEPTEMBER 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2020

£'000

 

2019

£'000

Cash flows from operating activities

 

 

 

 

 

 

 

 

 

 

Loss from operating activities

 

 

 

 

 

 

 

(811)

 

(711)

Adjustments for:

 

 

 

 

 

 

 

 

 

 

Depreciation

 

 

 

 

 

 

 

-

 

-

Share of loss of associate

 

 

 

 

 

 

 

4

 

-

Impairment/write off of loan

 

 

 

 

 

 

 

4

 

159

Compensation on cancellation of SARS scheme

 

 

 

120

 

-

Equity-settled share-based payments

 

 

 

 

 

 

 

63

 

78

 

 

 

 

 

 

 

 

 

 

 

 

Changes in:

 

 

 

 

 

 

 

 

 

 

-  trade and other receivables

 

 

 

 

 

 

 

14

 

(19)

-  trade and other payables

 

 

 

 

 

 

 

25

 

(39)

Cash generated by/(used in) operating activities

 

 

 

 

 

(581)

 

(532)

 

 

 

 

 

 

 

 

 

 

 

Finance costs

 

 

 

 

 

 

 

-

 

-

Net cash generated by (used in) operating activities

 

 

 

 

(581)

 

(532)

 

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

 

 

Acquisition of property, plant and equipment

 

 

 

 

 

   

 

-

 

-

Investment in associate

 

 

 

 

 

 

 

(938)

 

-

Net cash used in investing activities

 

 

 

 

 

 

 

(938)

 

-

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

 

 

Net proceeds from issue of share capital

 

 

 

 

 

 

1,931

 

323

Loans (to)/repaid by subsidiaries

 

 

 

 

 

 

 

(159)

 

176

Net cash flows from financing activities

 

 

 

 

1,772

 

499

 

 

 

 

 

 

 

 

 

 

 

Net increase/(decrease) in cash and cash equivalents

 

 

 

253

 

(33)

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at beginning of year

 

 

 

 

 

175

 

208

Cash and cash equivalents at 30 September

 

 

 

 

 

428

 

175

 

 

The following significant non-cash transactions took place in the year ended 30 September 2020:

·      Shares were issued to settle a total of £899,000 due to creditors and certain directors, which includes amounts previously advanced to Falcon Isle by certain directors totalling $700,000.

·      Under the Company's capital reduction scheme, following approval by shareholders and by the High Court, the Company's entire holding of ordinary shares in Calidus was transferred to the Company's shareholders.

 

**ENDS**

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