TIDMBEN
RNS Number : 9830X
Bens Creek Group PLC
28 December 2023
28 December 2023
Bens Creek Group Plc
("Bens Creek" or the "Group")
Unaudited interim results for the six month period from 1 April
2023 to 30 September 2023
Bens Creek Group plc (AIM:BEN), the owner of a metallurgical
coal mine in North America supplying the steel industry, is pleased
to announce its interim results for the six month period.
Interim results highlights
-- The Group produced 204,998 (six months to 30 September 2022:
99,928) tons of clean metallurgical coal during the period, a 105%
increase.
-- The Group delivered 18 (2022: 8) trains during the period, a
125% increase, all of which were sold via Integrity Coal Inc sales
and included amongst them was an order that was shipped to Arcelor
Mittal, one of the largest steel producers in the world.
-- 42,728 (six months to 30 September 2022: 19,230) clean tons
of coal were held in inventory at 30 September 2023, a 122%
increase.
-- From September 2023 both highwall miners were fully activated and operational.
-- EBITDA loss of $6.5m for the period (six months to 30 September 2022: loss $6.4m).
Post period highlights
-- On 30 November 2023, Bens Creek announced that its subsidiary
company, BC Operations, had executed its first agreement with Avani
for the delivery of 3-unit trains comprising a total of 33,000
short tons of coal with delivery of coal anticipated to be made no
later than end of January 2024.
Adam Wilson, CEO of Bens Creek, said ,
"We have now successfully completed the transition of the
business and are moving towards full production. During the period
we have unfortunately suffered from weakness in pricing putting our
cash flow under pressure. We were delighted to enjoy the support of
both Avani and JCAM (ACAM) who assisted us by providing debt
facilities during difficult months and Integrity with whom we have
continued our strong relationship. A few of our competitors did not
have the same level of support, issuing WARN notices ahead of
making substantial redundancies. We are pleased that we were able
to avoid taking any such action.
"Sales for the period were ahead of last year, reflecting our
improved productivity. However inflationary pressures on costs and
a deteriorating price led to an increase in losses when compared to
the same period last year. Our average sales price in the period
being only $118/ton against $166/ton for the comparable period in
2022, a difference of $50/ton which, if we had achieved it in the
period upon which we are reporting, would have been expected to
result in a small profit for the half.
"This period saw a 125% increase in trains despatched, however
there is a reliance on Norfolk Southern ("NS") to provide trains in
a timely manner, which is completely out of our control.
"The early part of the 2(nd) half of our financial year has seen
a significant rise in the High Vol B met coal prices, from a low of
$191/ton to a current price of $250/ton. This will bring our sales
prices to levels seen in the comparable period in 2022. This has
resulted in an improved order book and it has allowed us to commit
to sales through to the end of the third quarter which, if trains
booked run to schedule, could see the Group produce its first
monthly profit. We are also delighted to announce that a number of
those confirmed trains have been negotiated with Avani to be
shipped to India. This will help the Company enter the Indian
market, which is a key target for the future.
"We have repeatedly highlighted the correlation between the
index price of the coal and its inter relationship with the share
price and the net sales price achieved.
"The graph below shows clearly how intertwined the components
are and clearly evidences that both profitability and capital value
lies in the hands of the commodity market. With a predominantly
fixed overhead any index price movement results in an upward or
downward swing of both. We have of course been very aware of this
and have concentrated, among other things, on reducing the fixed
cost per ton produced.
"Overall, the outlook has improved for us, and we look forward
with growing confidence to the coming months. With both Avani and
Integrity in place, the Company will continue to establish its
branded coal in markets worldwide. As ever I thank all of our staff
for their continued commitment and support to the business and we
are hopeful that we will be able soon to deliver positive returns
to our shareholders."
Note: First train delivery of coal was in June 2022
Chairman's review of period
I am pleased to present the half-year chairman's review for the
period ended 30 September 2023 and to share with you the progress
the Company has experienced during the first half of this fiscal
year and the challenges it faces.
Operational highlights:
-- Safety First: Our commitment to safety remains unwavering. I
am pleased to report that our accident experience continues to be
excellent, with no reported accidents in the period. This is thanks
to our dedication to safety protocols and training. The well-being
of our employees always remains our top priority.
-- Production: We continued on our journey from rehabilitating a
dormant coal operation to gradually moving into full production. In
the six months to September 2022, we produced 99,928 tons of clean
metallurgical coal, in the following six months 172,390 tons and in
this period 204,998 tons. Once the operation reaches full
production it is expected that the mine will be able to produce in
excess of 300,000 tons in a six month period.
Environmental Stewardship:
We continue to make progress in minimising our environmental
footprint. Investments in cleaner technologies and sustainable
mining practices have positioned us as a responsible player in the
industry. One of our highwall miners is now using line power in
place of a mobile generator. The Company is always looking for
opportunities for improvement and we remain focussed on further
changes that will contribute positively to environmental
preservation.
Financial Performance:
-- Revenue: Despite the challenging market conditions in the
period to which the CEO has referred, we are pleased to report a
revenue increase of 35% compared to the first half of the previous
financial year. This growth is attributable to the increased
production referred to above.
-- Profitability: The loss for the period is a result of the
challenging price environment during much of the period. As noted
above, production in the period was no more than two-thirds of what
we expect once the optimal level of production is reached.
Achieving this will have a significant positive impact on the
company's profit margins, especially if recent price levels for our
product are maintained.
Community Engagement:
We continue to foster positive relationships with the
communities in which we operate. Our commitment to social
responsibility includes community development programs, job
creation, and efforts to support the well-being of local
residents.
Conclusion:
Our commitment to safety, financial discipline, and responsible
environmental practices are cornerstones for the company to be
successful. I want to express my gratitude to our dedicated
employees and contractors, supportive shareholders, and loyal
stakeholders who have contributed to our achievements during this
half-year period.
On behalf of the board of directors and the entire management
team, I thank you for your trust in Bens Creek Group and look
forward to a prosperous future.
Robin Fryer
Chairman
Responsibility Statement
We confirm that to the best of our knowledge:
-- the interim financial statements have been prepared in accordance with AIM Rules;
-- give a true and fair view of the assets, liabilities,
financial position and loss of the Group; and
-- the Interim report includes a fair review of important events
that have occurred during the financial period and their impact on
the set of interim financial statements; and a description of the
principal risks and uncertainties for the remaining six months of
the year.
The interim report was approved by the Board of Directors and
the above responsibility statement was signed on its behalf by:
Robin Fryer
Chairman
27 December 2023
For further information please contact:
Bens Creek Group plc +44 (0) 204 558
Adam Wilson, CEO 2300
Allenby Capital Limited (Nominated Adviser
and Joint Broker)
Nick Athanas / Nick Naylor / George Payne
(Corporate Finance)
Kelly Gardiner / Guy McDougall (Sales +44 (0) 203 328
and Corporate Broking) 5656
WH Ireland Limited (Joint Broker) +44 (0) 207 220
Harry Ansell / Katy Mitchell 1666
6 months 6 months
ended 30 ended 30 Year ended
September September 31 March
2023 2022 2023
Note US$ US$ US$
Unaudited Unaudited Audited
Revenue 23,527,605 17,421,696 42,208,848
Cost of goods sold 4 (22,384,672) (12,210,281) (31,036,252)
Cost of sales 4 (2,992,728) (4,269,624) (9,390,6350)
--------------- --------------- ---------------
Gross (loss) / profit
before depletion & depreciation (1,851,795) 941,791 1,781,961
--------------- --------------- ---------------
Depletion & depreciation 4 (4,792,788) (3,818,103) (5,326,847)
Administrative expenses 5 (4,614,723) (4,835,347) (9,945,404)
Change in estimates for
provisions - - (575,580)
Share option charge 15 (16,731) (2,139,225) (2,397,585)
--------------- --------------- ---------------
Operating (loss) / income (11,276,037) (9,850,884) (21,323,294)
--------------- --------------- ---------------
Finance income 26,698 18,584 42,960
Finance costs (2,409,025) (1,478,544) (3,435,252)
Fair value gain on Convertible
Loan Note embedded derivative - (423,911) -
--------------- --------------- ---------------
Profit/(loss) before taxation (13,658,364) (11,734,755) (24,715,586)
Tax expense 550,226 844,564 548,835
--------------- --------------- ---------------
Profit/(loss) for the period (13,108,138) (10,890,191) (24,166,751)
--------------- --------------- ---------------
Other comprehensive income
Foreign exchange movement 353,271 938,778 705,713
Total comprehensive (loss)
income for the period (12,754,867) (9,951,413) (23,461,038)
--------------- --------------- ---------------
Total comprehensive (loss)
income for the period attributable
to equity holders (12,754,867) (9,951,413) (23,461,038)
--------------- --------------- ---------------
Earnings (loss) per share
from continuing operations
attributable to the equity
owners of the parent
Basic earnings (loss) per
share (US cents per share) 6 (3.532) (3.468) (6.563)
--------------- --------------- ---------------
BENS CREEK GROUP PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD FROM 1 APRIL TO 30 SEPTEMBER
2023
BENS CREEK GROUP PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2023
Note 30 September 30 September 31 March
2023 2022 2023
Unaudited Unaudited Audited
$
$ $
--------------- ---------------------------------- ------------ ------------ ------------
Non-current
assets
Property, plant
and equipment 7 44,294,635 34,611,587 43,579,689
Coal reserves
and
reclamation
assets 8 23,409,252 23,994,572 24,514,572
Other assets 8 - 2,568,883 -
Right of use
assets 120,331 8,813 175,868
Construction in
progress 7 1,726,307 3,323,325 550,644
Restricted
investments
through OCI 1,094,061 - 695,120
Deferred tax
asset 576,151 1,420,715 576,151
71,220,737 65,927,895 70,092,044
------------ ------------ ------------
Current assets
Inventory 4,378,029 2,765,041 5,150,750
Trade and other
receivables 9 1,854,611 1,056,848 1,530,513
Property, plant
and equipment
held
for sale - 7,350,685 2,898,145
Cash and cash
equivalents 1,183,719 2,765,041 471,651
------------ ------------
7,416,359 11,172,574 10,051,059
------------ ------------ ------------
Total assets 78,637,096 77,100,469 80,143,103
------------ ------------ ------------
Current
liabilities
Trade and other
payables 10 8,821,645 3,060,434 6,894,131
Unearned
revenue 4,520,052 753,364 2,783,969
Deferred
consideration 11 1,254,206 816,000 1,254,206
Borrowings 12 3,462,778 7,730,846 3,462,778
Lease liability 55,875 9,138 110,706
Convertible
loan notes 13 - 7,547,938 11,619,734
Embedded
derivative 13 - 2,415,906 1,503,775
Provisions 14 510,000 440,000 510,000
------------ ------------
18,624,556 22,773,627 28,139,299
------------ ------------ ------------
Non-current
liabilities
Borrowings 12 21,332,516 3,434,968 7,105,751
Convertible
loan notes 13 7,133,844 3,037,819 -
Provisions 14 5,789,875 4,148,071 5,567,987
Deferred
consideration 11 6,132,270 2,140,947 6,525,967
Deferred tax
liability 9,187,331 10,286,392 9,737,557
Lease liability 66,534 - 66,534
Embedded
derivative 13 159,446 - -
------------
49,801,816 23,048,197 29,003,796
------------ ------------ ------------
Total
liabilities 68,426,372 45,821,823 57,143,930
------------ ------------ ------------
Net assets 10,210,724 31,278,646 23,000,008
------------ ------------ ------------
Equity
attributable to
owners of
the parent
Share capital 539,260 509,166 538,221
Share premium 51,040,045 45,777,353 50,989,150
Share based
payments
reserve 4,947,561 5,043,778 5,033,913
Translation
reserve (190,798) (311,005) (544,070)
Revaluation
reserve 3,923,320 3,923,320 3,923,320
Merger reserve (6,750,420) (6,750,420) (6,750,420)
Retained losses (43,298,244) (16,913,546) (30,190,106)
Total equity 10,210,724 31,278,646 23,000,008
------------ ------------ ------------
Group
-------------
Share Revaluation
Share Share Option Translation Reserve Merger Retained
capital premium Reserve Reserve $ Reserve losses Total
Note $ $ $ $ $ $ $
Balance as at 1
April 2022 485,273 38,712,008 2,647,242 (1,249,783) 3,923,320 (6,750,420) (6,023,355) 31,744,285
--------------------------- -------- ----------- ---------- ------------ -------------- ------------ ------------- -------------
Loss for the year - - - - - - (24,166,751) (24,166,751)
--------------------------- -------- ----------- ---------- ------------ -------------- ------------ ------------- -------------
Other
comprehensive
income
------------------ ------- -------- ----------- ---------- ------------ -------------- ------------ ------------- -------------
Currency translation
differences - - - 705,713 - - - 705,713
--------------------------- -------- ----------- ---------- ------------ -------------- ------------ ------------- -------------
Total comprehensive
income for the year - - - 705,713 - - (24,166,751) (23,461,038)
--------------------------- -------- ----------- ---------- ------------ -------------- ------------ ------------- -------------
Proceeds from issue
of shares net of
issue costs 52,948 12,277,142 - - - - - 12,330,090
--------------------------- -------- ----------- ---------- ------------ -------------- ------------ ------------- -------------
Share based payments - - 2,386,671 - - - - 2,386,671
--------------------------- -------- ----------- ---------- ------------ -------------- ------------ ------------- -------------
Total transactions
with owners, recognised
directly in equity 52,948 12,277,142 2,386,671 - - - - 14,716,761
--------------------------- -------- ----------- ---------- ------------ -------------- ------------ ------------- -------------
Balance as at 31
March 2023 (Audited) 538,221 50,989,150 5,033,913 (544,070) 3,923,320 (6,750,420) (30,190,106) 23,000,008
--------------------------- -------- ----------- ---------- ------------ -------------- ------------ ------------- -------------
Group
-------- ----------- ---------- ------------ -------------- ------------ ------------- -------------
Share Revaluation
Share Share Option Translation Reserve Merger Retained
capital premium Reserve Reserve $ Reserve losses Total
Note $ $ $ $ $ $ $
------------------ ------- -------- ----------- ---------- ------------ -------------- ------------ ------------- -------------
Balance as at 1
April 2023 538,221 50,989,150 5,033,913 (544,070) 3,923,320 (6,750,420) (30,190,106) 23,000,008
--------------------------- -------- ----------- ---------- ------------ -------------- ------------ ------------- -------------
Loss for the year - - - - - - (13,108,138) (13,108,138)
--------------------------- -------- ----------- ---------- ------------ -------------- ------------ ------------- -------------
Other
comprehensive
income
------------------ ------- -------- ----------- ---------- ------------ -------------- ------------ ------------- -------------
Currency translation
differences - - - 353,272 - - - 353,272
--------------------------- -------- ----------- ---------- ------------ -------------- ------------ ------------- -------------
Total comprehensive
income for the year - - - 353,272 - - (13,108,138) (12,754,866)
--------------------------- -------- ----------- ---------- ------------ -------------- ------------ ------------- -------------
Proceeds from issue
of shares net of
issue costs 1,039 50,895 - - - - - 51,934
Share based payments - - (86,352) - - - - (86,352)
Total transactions
with owners, recognised
directly in equity 1,039 50,895 (86,352) - - - - (34,418)
Balance as at 30
September 2023
(Unaudited) 539,260 51,040,045 4,947,561 (190,798) 3,923,320 (6,750,420) (43,298,244) 10,210,724
--------------------------- -------- ----------- ---------- ------------ -------------- ------------ ------------- -------------
BENS CREEK GROUP PLC
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
AS AT 30 SEPTEMBER 2023
6 months
6 months ended 30
ended 30 September Year ended
September 2022 31 March
2023 Unaudited Unaudited 2023 Audited
US$ US$ US$
Cash flows from
operating activities
Loss before taxation (13,658,364) (10,890,191) (24,715,586)
Adjustments for:
Depreciation and amortisation 3,687,457 1,702,188 4,886,904
Depletion expense 1,105,320 2,115,915 440,915
Interest expense 1,993,830 1,478,544 3,435,252
Interest income - (18,584) (42,960)
Share based payment charge 16,731 2,139,225 2,397,585
Fair value gain on revaluation of
embedded derivative - 423,911 (168,691)
Foreign exchange translation 353,302 (1,993,005) 568,329
Change in revaluation of deferred
consideration - - 4,859,839
Change in estimates - - 575,580
Change in working
capital
Decrease in inventory 772,721 (1,236,428) (960,185)
(Increase) in trade and other receivables (324,098) (486,520) 6,226,754
Increase in trade and other payables 3,663,597 362,452 (3,622,137)
Net cash used in operations (2,389,504) (6,402,493) (6,118,401)
-------------------- ------- ------------ ------------
Cash flows from
Investing activities
Purchase of property, plant and
equipment (5,594,779) (7,524,532) (17,024,823)
Disposal of property, plant and
equipment 2,970,395 - (172,149)
Investment in deposit account (398,941) - (695,120)
-------------------- ------- ------------ ------------
Net cash used in investing activities (3,023,325) (7,524,532) (17,892,092)
-------------------- ------- ------------ ------------
Cash flows from
financing activities
Proceeds from borrowings 10,240,861 12,408,050 18,419,042
Repayment of borrowings (3,616,287) (3,720,645) (8,054,780)
Payment of deferred consideration (393,697) - -
Proceeds from issue of shares, net
of issue costs (51,149) 7,089,238 7,049,481
Repayment of lease liabilities (54,831) (54,229) (115,500)
Net cash generated from financing
activities 6,124,897 15,722,414 18,926,848
-------------------- ------- ------------ ------------
Net (decrease)/increase in cash
and cash equivalents 712,068 1,795,389 (5,083,645)
Cash and cash equivalents at the
beginning of the year 471,651 5,555,296 5,555,296
------------
Cash and cash equivalents at end
of period 1,183,719 7,350,685 471,651
-------------------- ------- ------------ ------------
BENS CREEK GROUP PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
AS AT 30 SEPTEMBER 2023
NOTES TO THE INTERIM FINANCIAL STATEMENTS
1. General Information
The Company was incorporated on 11 August 2021 in England and
Wales with company number 13559916 and is domiciled in the United
Kingdom with its registered office being 15 Stratton St, London,
W1J 8LQ, United Kingdom. The ordinary shares of Bens Creek Group
Plc were admitted to trading on AIM on 19 October 2021.
Bens Creek Group Plc is a holding company which, through its
subsidiaries, Ben's Creek Carbon LLC, Ben's Creek Operations WV LLC
and Ben's Creek Land WV LLC (the "Subsidiaries") (together the
"Group"), is a producer of high-quality metallurgical coal in the
United States of America.
The Subsidiaries own and operate a metallurgical coal mine
located on over 10,000 acres on the southern part of the state of
West Virginia and the eastern edge of Kentucky, in the central
Appalachian Basin of the eastern United States of America (the
"Mine"). The Mine's operations are located primarily in Mingo
County, West Virginia. The Mine includes a wash plant and rail
loading facility located on the freehold land.
2. Basis of Preparation
These unaudited consolidated interim financial statements of
Bens Creek Group Plc have been prepared in accordance with the AIM
Rules. The comparative Balance Sheet figures for the year ended 31
March 2023 were derived from the statutory accounts for that year
which have been delivered to the Registrar of Companies. Those
accounts received an unqualified audit report which did not contain
statements under section 498(2) or (3) of the Companies Act
2006.
The interim financial information set out does not constitute
statutory accounts within the meaning of the Companies Act 2006. It
has been prepared on a going concern basis in accordance with the
recognition and measurement criteria of IFRS. The functional
currency of the Group is US Dollars.
The acquisition by the Company of its Subsidiaries has been
reflected in the consolidated financial results of the Group using
merger accounting. This method for accounting for business
combinations has been made by virtue of both the Company and the
Subsidiaries being under common control prior to and post the
acquisition. Business combinations under common control are outside
the scope of IFRS 3. However, IAS 8 allows the use of judgement
when developing an accounting policy.
In the prior year, there was a reclassification in the
disclosure of the Convertible Loan Notes. This reclassification was
in relation to the disclosure of current and non-current
liabilities and did not affect the net assets of the Group or its
loss for the period.
Going concern
The Directors have reviewed the cashflow forecast and the future
requirements of the Group for the period to 31 December 2024. They
have considered current and future offtake agreements, changes in
the economic climate and other contracts, such as vendors in
place.
Key assumptions in the cashflow were production rates, recovery
rates and pricing. The forecast also assumes Norfolk Southern will
provide reliable train service to ship coal produced. The Directors
and executive team discussed these assumptions in detail in
reviewing the cashflow forecasts are accurate. Assumptions are
discussed in further detail below.
The Group is confident that it will be able to achieve its
targeted increased production rates using two High Wall Miners on
double shifts. Although there is a risk of not being able to
achieve this due to repairs, maintenance and anomalies, the Group
considers the risk of downtime is minimal. One of the biggest
contributors to downtime was the risk of generators breaking down.
The Group in September 2023 installed Line Power to one of the High
Wall Miners, which will now result in far less downtime due to
having two generators and Line Power to ensure both High Wall
Miners are running. Looking forward a second Line Power will be
installed to ensure both High Wall Miners are running at maximum
efficiency.
There are an estimated 92m tons of reserve in situ, which was
confirmed by Marshall Miller, an independent expert in the field.
This indicates that there is significant coal both underground and
overground in which the Group can explore and mine in the future.
This gives management confidence that there are enough reserves to
continue mining beyond 10 years.
The price of metallurgical coal has fluctuated in the year and
post year-end, with a sharp fall in the price to a low of $191/
metric ton, High Vol B. However, management is confident even at
the current price ($250/ metric ton, High Vol B) that the Group
will be able to generate positive cash flows in the future.
The Directors also recognise the importance of the reliability
of Norfolk Southern ("NS") who provide the transport service to the
port.
The Group undertook a cost-cutting exercise amid the fall in
coal prices. Contractor costs have decreased significantly, as
underground mining has been cut from $45/ton to $35/ton. In
addition to the reduction in costs the recoverability of
underground mining has significantly improved since August 2023. It
was achieving lows of 32% to currently around 45%, which
significantly improves the profitability.
High wall mining costs have been cut from $28/ton to $25/ton
with a view to achieving further decreases at full production.
These and other costs that have been reduced have significantly
helped the cash flow during the low of the coal prices.
Several events occurred during the period which have given
further reassurance that the Group is a going concern. The most
immediate of which was the issuance of two loan notes to provide
extra funding for both working capital and repayment of outstanding
convertible loan notes. At 30 June 2023 the convertible loan note
issued in February 2022 was due for repayment (following amendment
of repayment date). To ensure the Group was able to meet this
repayment, some of the funds were used to repay this loan.
The Directors are also confident that the Group is able to raise
funds elsewhere if required. This can be done through several
methods including raising finance against property, plant and
equipment currently on the balance sheet, re-negotiating with
contractors and suppliers for lower rates or an equity raise with
shareholder approval.
The Directors are of the opinion that the Group has adequate
resources to continue in operational existence for twelve months
from signing of the Interim financial statements, while recognising
there is a material uncertainty. Accordingly the Interim financial
statements have been prepared on a going concern basis.
Risks and uncertainties
The Board continuously assesses and monitors the key risks of
the business. The key risks that could affect the Company's
medium-term performance and the factors that mitigate those risks
have not substantially changed from those set out in the Company's
2022 Annual Report and Financial Statements, a copy of which is
available on the Company's website: www.benscreek.com. The key
financial risks are liquidity risk, credit risk, interest rate risk
and fair value estimation.
Critical accounting estimates
The preparation of condensed interim financial statements
requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities at the end of the
reporting period. Significant items subject to such estimates are
set out in Note 2 of the Company's 2022 Annual Report and Financial
Statements. The nature and amounts of such estimates have not
changed significantly during the interim period.
3. Accounting Policies
Information on the accounting policies applied can be found in
the Group's latest annual audited financial statements. The Group
and Company Financial Statements have also been prepared under the
historical cost convention, subsequent to any fair value
adjustments required upon acquisition via a business combination,
with the exception of the preparation and wash plant which is held
under the revaluation model. Additionally, convertible loan notes
are held under the fair value through the profit or loss "FVTPL"
model.
Basis of consolidation
The Group's results consolidate the financial information of the
Company and its Subsidiaries for the periods presented.
Subsidiaries are entities over which the Group has control. The
Group controls an entity when the Group is exposed to, or has
rights to, variable returns from its involvement with the entity
and has the ability to affect those returns through its power over
the entity. Subsidiaries are fully consolidated from the date on
which control is transferred to the Group. They are deconsolidated
from the date that control ceases.
Investments in subsidiaries are accounted for at cost less
impairment.
Where considered appropriate, adjustments are made to the
financial information of subsidiaries to bring the accounting
policies used into line with those used by other members of the
Group. All intercompany transactions and balances between Group
enterprises are eliminated on consolidation.
New and amended standards adopted by the Group
There have been no new or amended standards adopted by the Group
for the first time during the interim period.
4. Cost of sales
31 March
30 September 30 September 2023
2023 2022
Unaudited Unaudited Audited
$ $ $
--------------------- ------------ ------------ ----------
Production costs 22,384,672 12,210,281 31,036,252
Transportation costs 184,120 2,421,594 3,145,205
Coal & sale taxes 1,323,962 721,894 2,335,728
Royalty expense 1,486,656 1,126,136 3,909,702
Depreciation 3,631,920 1,649,299 4,770,614
ROU depreciation 55,537 52,889 115,318
Coal Depletion 1,105,321 2,115,915 440,915
30,172,188 20,298,008 45,753,734
------------ ------------ ----------
5. Administrative Expenses
31 March
2023
30 September 30 September
2023 Unaudited 2022 Unaudited Audited
$ $ $
---------------------------------- --------------- --------------- ---------
Operational and remediation costs 1,094,406 1,794,153
Salaries 1,815,782 1,931,857 3,651,828
Legal, professional and brokerage 510,020 619,166 1,118,565
Travel and subsistence 179,160 182,857 353,958
Insurance 1,245,944 662,896 2,318,757
IPO and AIM related costs - - 66,824
Sale of scrap - (133,982)
Gain on disposal (754,980) - -
Foreign exchange costs 98,756 (186,099) (125,505)
Other administrative costs 425,635 1,624,670 906,918
Total administrative expenses 4,614,723 4,835,347 9,945,404
--------------- --------------- ---------
6. Earnings (loss) per share
The calculation of the total basic loss per share of 3.532 cents
is based on the loss attributable to equity holders of the Company
of $13,108,138 and on the weighted average number of ordinary
shares of 368,214,862 in issue during the period.
7. Property, Plant and Equipment
Group
Underground Leasehold Construction
Vehicles Equipment Plant equipment Improvements in progress Total
$ $ $ $ $ $ $
------------- ---------------------- ------------------- ---------------------- ---------------------- --------------------------- ------------------- -------------------
Cost or
valuation
As at 1 April
2023 131,897 25,949,883 4,674,829 2,085,699 550,644 48,936,370 131,897
Acquired
during
year - 3,901,170 449,323 68,623 - 1,175,662 5,594,779
Disposal - (85,000) - - - - (85,000)
As at 30
September
2023 131,897 19,359,588 26,399,206 4,743,451 2,085,699 1,726,307 54,446,149
---------------------- ------------------- ---------------------- ---------------------- --------------------------- ------------------- -------------------
Depreciation
As at 1 April
2023 (30,649) (1,432,242) (2,400,000) (682,426) (260,720) - (4,806,037)
Depreciation
during
the year (13,190) (1,711,684) (1,326,720) (436,756) (143,570) (3,631,920)
Disposals - 12,750 - - - - 12,750
As at 30
September
2023 (43,839) (3,131,176) (3,726,720) (1,119,182) (404,290) - (8,424,861)
---------------------- ------------------- ---------------------- ---------------------- --------------------------- ------------------- -------------------
Net book
value
as at 30
September
2023 88,058 16,228,412 22,672,486 3,624,270 1,681,410 1,726,307 46,020,942
---------------------- ------------------- ---------------------- ---------------------- --------------------------- ------------------- -------------------
Net book
value
as at 1
April
2023 101,248 14,111,176 23,549,883 3,992,403 1,824,979 550,644 44,130,333
---------------------- ------------------- ---------------------- ---------------------- --------------------------- ------------------- -------------------
8. Coal reserves and reclamation assets
Group Coal Reserves
--------------------------------- -------------
$
Cost or valuation
As at 1 April 2023 25,700,000
As at 30 September 2023 25,700,000
Fair value uplift at acquisition -
Additions during the year -
--------------------------------- -------------
As at 30 September 2023 25,700,000
--------------------------------- -------------
Depletion
As at 1 April 2023 (1,185,428)
In the year (1,105,321)
As at 30 September 2023 (2,290,749)
Net book value
As at 1 April 2023 24,514,572
--------------------------------- -------------
As at 30 September 2023 23,409,252
--------------------------------- -------------
Other assets
Reclamation bond
----------------- -------------
30 September 30 September 31 March
2022 Unaudited 2022 Unaudited 2023 Audited
---------------------------------------- ----------------- --------------- -------------
$ $ $
Certificates of deposit - 2,568,882 -
----------------- --------------- -------------
Movement in the year relates to the depletion of coal reserves
from coal mined underground during the year.
The reclamation bond is based on a number of mining permits
which is held with the West Virginia Department of Environmental
Protection and is interest bearing.
The group has provided certificates of deposit as collateral to
secure mine reclamation obligations as required by the West
Virginia Department of Environmental Protection. The certificates
were released during the year through a Surety. This enabled the
Company to realise the cash element of the Deposits.
9. Trade and other receivables
30 September 30 September 31 March
2023 Unaudited 2022 Unaudited 2023 Audited
------------------ --------------- --------------- -------------
Current $ $ $
Trade receivables - 716,415 475,000
Prepayments 171,017 161,502 352,103
Other receivables 1,683,594 178,931 703,410
--------------- --------------- -------------
1,854,611 1,056,848 1,530,513
--------------- --------------- -------------
10. Trade and other payables
30 September 30 September 31 March
2023 Unaudited 2022 Unaudited 2023 Audited
-------------------- --------------- --------------- -------------
Current $ $ $
Trade payables 4,270,556 1,545,057 1,442,491
Tax liabilities 209,158 - 447,507
Other payables 2,333,338 85,316 3,140,056
Payroll liabilities 462,054 170,969 402,725
Accruals 1,546,539 1,259,092 1,461,352
8,821,645 3,060,434 6,894,131
--------------- --------------- -------------
11. Deferred consideration
30
September 30 September 31 March
2023 2022 2023
Unaudited Unaudited Audited
$ $ $
--------------------------------------- ---------- -------------- ------------
Current liabilities
Deferred consideration 1,254,206 816,000 1,254,206
---------- -------------- ------------
1,254,206 816,000 1,254,206
---------- -------------- ------------
Non-current liabilities
Deferred consideration 6,132,270 2,140,947 6,525,967
---------- -------------- ------------
6,132,270 2,140,947 6,525,967
---------- -------------- ------------
12. Borrowings
30
September 30 September 31 March
2023 2022 2023
Unaudited Unaudited Audited
$ $ $
--------------------------------------- ----------- -------------- ------------
Current liabilities
Equipment financing 3,462,778 2,568,780 3,462,778
Other loans - 5,162,066 -
----------- -------------- ------------
3,462,778 7,730,846 3,462,778
----------- -------------- ------------
Non-current liabilities
Equipment financing 7,871,442 3,434,968 7,105,751
Other loans 13,461,074 - -
----------- -------------- ------------
21,332,516 3,434,968 7,105,751
----------- -------------- ------------
30 September
2023
$
------------------------ ------------
Equipment financing
As at 1 April 2023 10,568,529
Drawdowns 3,666,691
Interest 715,258
Repayments (3,616,258)
------------
As at 30 September 2023 11,334,220
------------
Current 3,462,778
------------
Non-current 7,871,442
------------
30 September
2023
$
------------------------ ------------
Other loans
As at 1 April 2023 -
Drawdowns 13,000,000
Interest 499,999
Repayments (137,404)
------------
As at 30 September 2023 13,461,074
------------
Current -
------------
Non-current 13,461,074
------------
On 23 June 2023 Bens Creek Operations entered into an unsecured
loan note agreement with Avani Resources Pte Ltd (the Company's
largest shareholder) for a total subscription of $6,500,000 in Loan
Notes. The Loan Notes have a term of 18 months and interest will
roll up and be repaid as a bullet on the second anniversary of the
Loan Note.
Bens Creek Operations will repay to the Lender $2 per tonne of
clean coal sold within 7 business days of production. The principal
outstanding under the Loan Notes, less coal payments or other
prepayments, will be repayable on the repayment date.
Simple interest shall be added to the principal amount of the
outstanding Notes on each relevant repayment date. The interest
shall be calculated at a rate of 15.1% per annum from and including
the date of issue of each Note up to and including the date of the
redemption or repurchase of the relevant Notes. The interest shall
be payable in the same manner as in the case of the original
principal amount of the Note and shall otherwise be treated as
principal of the Note for all purposes.
In the event Bens Creek Operations redeems or fully repays any
Note prior to the repayment date it shall, together with the
payment of the principal amount outstanding, pay for the account of
the Avani a prepayment calculated at a rate of 15% per annum from
and including the date of issue of each Note up to and including
the date of the redemption or repurchase of the relevant Notes.
On 7 July 2023 Bens Creek entered into a second unsecured loan
note agreement with the Avani Resources Pte Ltd for a total
subscription of $6.5 million of Loan Notes. The Loan Notes have a
term of 18 months and interest will roll up and be repaid as a
bullet at the maturity of the Loan Note. The terms of the loan note
are the same as the note issued on 23 June 2023.
Proceeds from the second Loan Note issuance with Avani were used
to repay one of the Convertible Loan Notes held by ACAM LP which
was due for repayment by the end of summer 2023. Total repayment
amounted to $5.7m.
On 7 July 2023 Bens Creek also issued c.$7.57 million of
unsecured loan notes to ACAM LP (the "2023 ACAM Loan Notes").
The 2023 ACAM Loan Notes have been issued to ACAM in replacement
for the now cancelled $6m of convertible loan notes issued to ACAM
on 14 December 2021, full details of which were included in the
Company's announcement of 15 December 2021. The CLNs were due for
repayment on 31 December 2023.
Following negotiations with ACAM it has been agreed that they
would cancel the CLNs and accept the 2023 ACAM Loan Notes by way of
replacement. The 2023 ACAM Loan Notes have a term of 18 months. The
2023 ACAM Loan Notes are not convertible into new ordinary shares
in the Company.
The terms of the 2023 ACAM Loan Notes are the same as the loan
notes issued to Avani Resources Pte Ltd.
The Company has also issued ACAM with a total of 21,082,257
warrants to subscribe for new ordinary shares in Bens Creek
exercisable at 28 pence per ordinary share. The warrants have a
life of five years from the date of issue and can be exercised at
any time by ACAM during the period ending 10 July 2028.
13. Convertible Loan Notes
Debt component Derivative
$ component Total $
$
------------------------- --------------- ------------ ------------
As at 1 April 2023 11,619,734 1,503,775 13,123,509
Repayments (5,765,692) - (5,765,692)
Modification 1,344,329 (1,344,329) -
Foreign exchange losses (64,527) - (64,527)
Fair value gains - - -
Interest charged - - -
As at 30 September 2023 7,133,844 159,446 7,293,290
------------------------- --------------- ------------ ------------
During the period, the Group repaid one of the Convertible Loan
Notes in full. In doing so the Group undertook a number of new Loan
Notes which were non-convertible, detailed in note 12.
Additionally, the second Convertible Loan Note was cancelled, and a
new Loan Note for the same balance was issued for equal value.
Attached to this were 21,082,257 warrants exercisable at 28p. The
warrants are deemed a derivative, as there is no additional
investment required, the value of the warrants will vary based on
the issuer's share price and the warrants will be settled in the
future. Black Scholes was used to value the derivative.
14. Provisions
Minimum lease
Reclamation payments
provision Total
$ $ $
------------------------ ----------- ------------- ---------
As at 1 April 2023 4,147,212 1,930,775 3,191,888
Additions - - -
Unwinding of discount 221,888 - 241,183
------------------------ ----------- ------------- ---------
As at 30 September 2023 4,369,100 1,930,775 6,299,875
------------------------ ----------- ------------- ---------
Current provisions - 510,000 510,000
------------------------ ----------- ------------- ---------
Non-current provisions 4,369,100 1,420,775 5,789,875
------------------------ ----------- ------------- ---------
The Group's provision for reclamation costs has a carrying value
at 30 September 2023: $4,369,100 (31 March 2023 of $4,147,212) and
relates to the Group's reclamation obligations. The provision for
reclamation costs is calculated by discounting the expected future
cash outflows in respect of reclamation work based on the estimated
future cost provided by independent experts (Heritage Technical
Associates, Inc), being $7,816,773. The reclamation costs are
expected to be incurred in 10 years (at the end of the mine life
per the management's mine plan). The cash outflows have been
discounted at 15% and inflation assumed to be 8.6%. The reclamation
provision is a commitment to restore the site to a safe and secure
environment. The provisions are reviewed annually.
The Group's provision for minimum lease payments amount to
$1,930,775 relate to leases held with Pocahontas, MGC, Carbon Fuels
and Star Ridge. In the agreements with each respectively there is a
minimum monthly payment which has been calculated based on the life
of the mine or if shorter the lease agreement. The lease payments
have been discounted to present value and will be reviewed
annually. The royalty agreements contain further clauses in which
further royalties are payable when mining on the land. However, as
there is no accurate method to estimate the level of production, no
provision has been included.
15. Share options
During the period 1,075,000 share options were granted to
employees. The options are valued at the date of the grant using
the Monte Carlo Model, totalling a charge of $16,498.
16. Related party transactions
Avani Resources Pte Ltd, who are the major shareholder by owning
29.9% of the total shareholding entered into two Loan Notes during
the period. Total subscription amounted to $13,000,000 in Loan
Notes. The Loan Notes have a term of 18 months and interest will
roll up and be repaid as a bullet at the end of the term of the
Loan Note.
Bens Creek Operations will repay to the Lender $2 per tonne of
clean coal sold within 7 business days of production. The principal
outstanding under the Loan Notes, less coal payments or other
prepayments, will be repayable on the repayment date.
Simple interest shall be added to the principal amount of the
outstanding Notes on each relevant repayment date. The interest
shall be calculated at a rate of 15.1% per annum from and including
the date of issue of each Note up to and including the date of the
redemption or repurchase of the relevant Notes.
In the event Bens Creek Operations redeems or fully repays any
Note prior to the repayment date it shall, together with the
payment of the principal amount outstanding, pay for the account of
the Avani a prepayment calculated at a rate of 15% per annum from
and including the date of issue of each Note up to and including
the date of the redemption or repurchase of the relevant Notes.
17. Events after the Balance Sheet Date
On 30 November 2023, Bens Creek announced that Bens Creek
Operations WV LLC ("BC Operations"), a wholly owned operating
subsidiary of the Company executed an agreement with Avani
Resources Pte Ltd ("Avani"), the Company's largest shareholder, for
the delivery of 3-unit trains comprising a total of 33,000 short
tons of Bens Creek High Vol B Metallurgical coal. The delivery of
the coal is expected to be made, subject to train delays, no later
than the end of January 2024. This sale is in addition to existing
and ongoing business. The coal was purchased by Avani at a price
which is in line with market rates at the time for the sale and
purchase of High Vol B coal. The quality of the coal will be in
keeping with standard production from the Bens Creek mine. This
coal sale follows on from Avani entering into a non-exclusive sales
and marketing agreement, details of which were announced by Bens
Creek on 26 July 2023.
18. Approval of interim financial statements
The interim financial statements were approved by the Board of
Directors on 27 December 2023.
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END
IR DGBDDRSDDGXR
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December 28, 2023 02:00 ET (07:00 GMT)
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