TIDMKEM
Kemin Resources plc
("Kemin" or the "Company")
Interim report - 6 months to 30 June 2016
Kemin Resources Plc (AIM:KEM), the molybdenum and tungsten
exploration and development company with substantial interests in
Kazakhstan, announces its unaudited interim results for the six
months ended 30 June 2016.
Highlights:
-- The licence extension in relation to the Smirnovskoye (licence 1605)
deposit has been approved until 1 August 2018;
-- The licence extension in relation to Drozhilovskoye (licence 1606)
deposit is currently awaiting approval, with the contract
extension
expected to be received in the latter part of H2 2016;
-- Work programme halted until approval of both licences and detailed
exploration programmes are agreed with the Kazakhstan
authorities;
-- Continued support for the Company from its major shareholder; and
-- Attributable loss reduced to GBP232k (2015: GBP423k), due to savings in
administrative overheads;
Commenting on the results, Sanzhar Assaubayev, CEO of Kemin
Resources said:
"At the current time the management have decided to suspend
further exploration work until both licences have been renewed and
the work programmes have been agreed with the Kazakh authorities
going forward. The Board members are firmly of the opinion that the
timing of development is key to maximising the returns to
shareholders, and this opinion is shared by the major shareholder
that remains committed to project development."
For further information, please visit
http://www.keminresources.com or contact:
Kemin Resources Plc
Rajinder Basra (CFO)
+44(0)207 932 2456
Strand Hanson Limited (Nomad, Financial Adviser and Broker)
Andrew Emmott / Ritchie Balmer
+44(0)207 409 3494
Information on the Company
Kemin Resources plc (AIM: KEM) was formed into its present
structure in April 2013 by the reverse take-over of GMA Resources
plc by the 'Joint Venture Kazakh-Russian Mining Company LLP'
(KRMC).
The Company is focused on developing its two molybdenum and
tungsten deposits Drozhilovskoye and Smirnovskoye. Each of the
deposits is assessed to have significant value.
Kemin's 90% owned Kazakh entity, KRMC, is the developer and
future operator of the two subsoil licences that allow exploration
and mining at each deposit.
Both deposits are located in northern Kazakhstan.
Kemin Resources Plc
Chief Executive Officer's Review
As was noted in the 2015 Annual Report, the current pricing of
the two key resources, Molybdenum and Tungsten, does not warrant
the Company moving quickly to the production phase. Management has
taken the decision to suspend further exploration work until both
of the licence extensions are agreed and the work programmes in
relation to the two deposits have been confirmed by the
authorities.
The application to the Kazakhstan authorities for renewal of the
licences required detailed and comprehensive information in
relation to the exploration works to be undertaken. The Company has
spent a considerable amount of time and effort in drawing up the
necessary work programmes, and dealing with correspondence in
relation to the work programmes with the authorities. All necessary
information has been provided and the expectation is that the
licence extension for the Drozhilovskoye licence will be granted in
the latter part of H2 2016. The Company is pleased that the
necessary permissions in relation to the Smirnovskoye were granted
recently and this licence will now run until 1 August 2018.
It was considered key at this time to conserve the available
monies, be focused and targeted in the development of the resources
and to wait until the exploration plans have been agreed with the
authorities. The Company has also looked closely at administrative
costs during the period and made savings as appropriate given the
current scale of operations.
The objectives and plan going forward remain as follows:
1. Updating the geological models to reflect new drilling,
higher cut off grades and exploration encompassing new areas within
both subsoil licences.
2. Additional metallurgical testing with the intention to
optimise recoveries.
The Board remains positive in relation to the project and recent
remodelling based on current prices indicates that the Company has
a valuable asset, which will generate good returns for the
shareholders.
There is currently an agreement in place with the major
shareholder of Kemin Resources to provide cash resources to take
the project development forward. Under this agreement cash
resources are currently available of approximately GBP4.7m. The
shareholder has agreed with the Board that this facility remains
available and they are fully committed to the development of the
projects.
Sanzhar Assaubayev
CEO Kemin Resources Plc
Kemin Resources Plc
Consolidated income
statement
Six months ended
30 June 2016
Six months to Six months to Year ended31 December2015
30 June 30 June
2016 2015
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Continuing operations
Administrative (104) (225) (309)
expenses
Operating Loss (104) (225) (309)
Finance Expense (134) (206) (952)
Loss before taxation (238) (431) (1,261)
Income tax expense - - -
Loss for the period (238) (431) (1,261)
Loss for the period
attributable to:
Equity shareholders (232) (423) (1,101)
of the parent
Non-controlling (6) (8) (160)
interest
(238) (431) (1,261)
Loss per ordinary
share
Basic & Diluted (0.14p) (0.2p) (0.62p)
Consolidated
statement of
comprehensive income
Six months ended
30 June 2016
Six months to Six months to Year ended
30 June 30 June 31 December 2015
2016 2015
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Loss for the period (238) (431) (1,261)
Currency translation (76) (13) (8)
differences arising
on translations
of foreign
operations*
Total comprehensive (314) (444) (1,269)
loss
* items which may
be re-classified
to statement
or profit
or loss.
Loss for the period
attributable to:
Equity shareholders (291) (434) (1,210)
of the parent
Non-controlling (23) (10) (59)
interest
(314) (444) (1,269)
Kemin Resources Plc
Consolidated
Statement
of financial position
Six months ended
30 June 2016
30 June 2016 30 June 2015 31 December 2015
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Non-current assets
Intangible assets 2,221 2,719 2,070
Property, plant 14 24 14
and equipment
Other non-current 162 146 145
assets
Restricted cash 4 6 3
2,401 2,895 2,232
Current assets
Other receivables 25 37 15
Cash and cash 119 473 307
equivalents
144 510 322
Total assets 2,545 3,405 2,554
Current liabilities
Trade and other 1,439 1,250 1,376
payables
Loans and borrowings 441 635 551
Other liabilities - 23 -
1,880 1,908 1,927
Non-current
liabilities
Loans and borrowings 2,936 2,903 2,873
Other liabilities - 6 -
2,936 2,909 2,873
Total liabilities 4,816 4,817 4,800
Net liabilities (2,271) (1,412) (2,246)
Equity
Ordinary share 1,748 1,748 1,748
capital
Deferred share 6,168 6,168 6,168
capital
Share premium 37,414 37,414 37,414
Merger reserve (41,682) (41,682) (41,682)
Share based payment 1,105 1,105 1,105
reserve
Other reserve 1,172 921 912
Currency translation (7) 150 52
reserve
Retained earnings (8,024) (7,114) (7,792)
(2,106) (1,290) (2,075)
Non-controlling (165) (122) (171)
interest
Total equity (2,271) (1,412) (2,246)
Kemin Resources Plc
Consolidated Statement
of changes in equity
Six months ended 30 June 2016
Deferred share capital Share based payment reserve Currency translation reserve Attributed to owners of the parent Non- controlling interest
Ordinary share Sharepremium Mergerreserve Otherreserve Retained earnings
capital
Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
1 January 2016 1,748 6,168 37,414 (41,682) 1,105 912 52 (7,792) (2,075) (171) (2,246)
Loss for the period - - - - - - - (232) (232) (6) (238)
Currency translation - - - - - - (59) - (59) (17) (76)
differences arising
on translation of foreign
operations
Total comprehensive loss - - - - - - (59) (232) (277) (194) (2,560)
Modification of loans received - - - - - 260 - - 260 29 289
At 30 June 2016 1,748 6,168 37,414 (41,682) 1,105 1.172 (7) (8,024) (2,106) (165) (2,271)
At 1 January 2015 1,748 6,168 37,414 (41,682) 1,105 921 161 (6,691) (856) (112) (968)
Loss for the period - - - - - - - (423) (423) (8) (431)
Currency translation - - - - - - (11) - (11) (2) (13)
differences arising
on translation of foreign
operations
Total comprehensive loss - - - - - - (11) (423) (277) (10)) (444)
Shares issued - - - - - - - - - - -
Share issue cost - - - - - - - - - - -
Modification of loans received - - - - - - - - - - -
At 30 June 2015 1,748 6,168 37,414 (41,682) 1,105 921 150 (7,114) (1,290) (122) (1,412)
At 1 January 2015 1,748 6,168 37,414 (41,682) 1,105 921 161 (6,691) (856) (112) (968)
Loss for the year - - - - - - - (1,101) (1,101) (160) (1,261)
Currency translation - - - - - - (109) - (109) 101 (8)
differences arising
on translation of foreign
operations
Total comprehensive profit - - - - - - (109) (1,101) (1,210) (59) (1,269)
- 31 December 2015
Shares issued in the year - - - - - - - - - - -
Share issue expenses - - - - - - - - - - -
Modification of loans received - - - - - (9) - - (9) - (9)
Contribution to related party
At 31 December 2015 1,748 6,168 37,414 (41,682) 1,105 912 52 (7,792) (2,075) (171) (2,246)
Kemin Resources
Plc
Consolidated cash
flow statement
Six months ended
30 June 2016
Six months to Six months to Year ended
30 June 2016 30 June 2015 31 December 2015
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Net cash outflow (188) (231) (339)
from
operating activities
Investing
activities
Additions to - - -
intangible
assets
Restricted - - -
cash
Additions to - - -
property,
plant and equipment
Net cash used - - -
in investing
activities
Financing
activities
Loans - - (58)
repaid
Net cash flow from - - (58)
financing
activities
Decrease in cash and (188) (231) (397)
cash equivalents
Cash and cash 307 704 704
equivalents
at
the beginning of
the period
Cash and cash 119 473 307
equivalents
at the end of
the period
Kemin Resources Plc
Notes to the consolidated financial information
Six months ended 30 June 2016
1 Basis of preparation
The consolidated interim financial information has been prepared
using policies based on International Financial Reporting Standards
(IFRS and IFRIC interpretations) issued by the International
Accounting Standards Board ("IASB") as adopted for use in the
EU.
The consolidated interim financial information have been
prepared using the accounting policies which will be applied in the
Group's financial statements for the year ended 31 December 2016.
The consolidated interim financial information for the period 1
January 2016 to 30 June 2016 is unaudited and incorporates
unaudited comparative figures for the interim period 1 January 2015
to 30 June 2015 and the audited financial information for the year
to 31 December 2015. It does not include all disclosures that would
otherwise be required within a complete set of financial
statements.
In addition, the IASB has issued a number of IFRS and IFRIC
amendments or interpretations since the last annual report was
published. It is not expected that any of these have a material
impact on the Group.
Going Concern
As at 30 June 2016, the Group had cash in hand of GBP0.119m
(2015:GBP0.47m).
Under a loan agreement dated 10 April 2013, Amrita Investment
Limited (a company incorporated in the British Virgin Islands and
ultimately controlled by the Assaubayev family) made available a
facility of GBP7,000,000 on an unsecured basis. This was to be
applied towards the Group's working capital requirements and the
settlement of debts due of the Joint Venture Kazakhstan-Russian
Mining Company LLP (KMRC). There is currently approximately GBP4.7m
available under this facility.
The loan bears interest at LIBOR+5%. The loan is repayable on
the earliest of the fifth anniversary of the agreement or of the
fundraising completion date in respect of any equity fundraising
which raises at least GBP5,000,000 (before expenses). At this point
the Lender may choose to convert the loan into the ordinary shares
of the Company at the conversion rates stipulated within the
contract.
The Directors are confident that the Group has sufficient
resources available to meet its liabilities as they fall due and
its working capital requirements going forward and have therefore
prepared these financial statements on a going concern basis.
Kemin Resources Plc
Notes to the consolidated financial information (continued)
Six months ended 30 June 2016
2 Loss per ordinary share
The calculation of basic and diluted earnings per share from
continuing operations is based upon the retained loss for the
financial period, six months to 30 June 2016 is GBP232,000, (30
June 2015 GBP423,000; 31 December 2015 GBP1,101,000).
The weighted average number of ordinary shares for calculating
the basic loss per share and diluted loss per share for the six
months to 30 June 2016 is 174,833,041 (30 June 2015 174,833,041; 31
December 2015 174,833,041).
3 Functional and presentational currency
The Group has prepared its financial statements in British
Pounds. The functional currency of Joint Venture Kazakhstan-Russian
Mining Company LLP (KRMC) trading company in Kazakhstan is the
Kazakhstan Tenge ("KZT"). The functional currency of Kemin
Resources is Pound Sterling. The rates used to convert Kazakhstan
Tenge into British Pounds in these financial statements are as
follows:
30 June 2016 30 June 2015 31 December 2015
Closing Average Closing Average Closing Average
KZT= GBP 449.35 493.52 291.04 278.74 498.52 336.55
The currency translation movement on the Group's net investment
in its subsidiaries in Kazakhstan is taken to reserves.
The financial statements of all Group companies are translated
into British Pounds whereby their income statements are translated
at the average rate of exchange for the year and their statement of
financial position at the closing rate of exchange at the reporting
date. Currency translation adjustments arising on the restatement
of opening net assets, together with adjustments arising from the
retranslation of intergroup and long term foreign currency loans to
subsidiaries, are taken direct to reserves.
Transactions denominated in currencies other than the functional
currency of a Company are recorded at the rate of exchange
prevailing at the date of the transaction. Monetary assets and
liabilities are translated into the relevant functional currency at
the closing rates of exchange at the reporting date. Exchange
differences arising from the restatement of monetary assets and
liabilities at the closing rate of exchange at the reporting date
or from the settlement of monetary transactions at a rate different
from that at which the asset or liability was recorded are dealt
with through the income statement.
4 Events after the balance sheet date
There were no significant transactions after the reporting
date.
5 Approval of interim group financial statements
The interim group financial statements for the six months to 30
June 2016 were approved by the directors on 29 September 2016.
6 Ultimate Controlling Party
The controlling party of Kemin Resources plc is Bergfolk
Corporation, by virtue of the fact that it owns 76,14% of the
voting rights in the company. The ultimate controlling party is the
Assaubayev family.
Kemin Resources Plc
Company Details
Directors Sanzhar Assaubayev, Chief Executive
Kanat Assaubayev, Chairman
Ashar Qureshi, Non-Executive Director (Vice-Chairman)
Aidar Assaubayev, Non-Executive Director
Neil Herbert, Non-Executive Director
Secretary Rajinder Basra FCA
Registered office 28 Eccleston Square
London
SW1V 1NZ
Nominated Adviser and Broker Strand Hanson Limited
26 Mount Row
Mayfair
London
W1K 3SQ
Telephone: +44 (0) 20 7409 3494
Auditors to the Group BDO LLP
55 Baker Street
London
W1U 7EU
Registrars Neville Registrars
18 Laurel Lane
Halesowen
West Midlands
B63 3DA
View source version on businesswire.com:
http://www.businesswire.com/news/home/20160929005648/en/
This information is provided by Business Wire
(END) Dow Jones Newswires
September 30, 2016 02:00 ET (06:00 GMT)
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