TIDMKEM
Kemin Resources plc
("Kemin" or the "Company")
Interim report - 6 months to 30 June 2017
Kemin Resources Plc (AIM: KEM), the exploration and development
company with substantial interests in Kazakhstan, announces its
unaudited interim results for the six months ended 30 June
2017.
Highlights:
-- Supplement to the licence extension in relation to the Smirnovskoye
(licence 1605) deposit agreeing the work programmes has been
approved
allowing exploration and production until July 2019;
-- The initial licence extension in relation to (licence 1606) deposit
has been approved, for a three year period, final approval is
subject
to agreements in relation to the environmental and work
programmes.
Final licence approval expected in Q4 2017;
-- In accordance with the mine development plan, company representatives
arranged visits in April and June 2017 to several institutes in
China
and Russia, which deal with the design of molybdenum, tungsten,
and
lithium ore treatment and processing plants.
-- Core drilling in Drozhilovskoye and Smirnovskoye to be carried out in
H1 2018 to enable the shipment of samples to China and/or Russia
in
order to conduct technological testing.
-- Continued support for the Company from its major shareholder; and
-- Attributable loss reduced to GBP206k (2016: GBP232k), due to continuing
savings in administrative overheads;
Commenting on the results, Sanzhar Assaubayev, CEO of Kemin
Resources said:
"The Company is very close to approval of the work programmes
with the Kazakh authorities in relation to Drozhilovskoye, and is
expecting to commence the exploration works in H1 2018 on both
sites. The next stage is the construction of a trial plant for the
development and testing of the processing technology, which will
allow the future deposits' development on a full scale basis".
For further information, please visit
http://www.keminresources.com or contact:
Kemin Resources PlcRajinder Basra (CFO)+44(0)207 932 2456
Strand Hanson Limited (Nomad, Financial Adviser and Broker)James
Spinney/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 mineral resources
including molybdenum, tungsten and lithium 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
The Company has now agreed the work programmes in relation to
Smirnovskoye, but will commence the work as agreed with the Kazakh
authorities on this site once the final Drozhilovskoye work
programmes have been signed off. This is expected to be in Q4 2017,
and the exploration work is therefore expected to commence in H1
2018. The licence is valid after the supplemental agreements for
the Smirnovskoye area until July 2019.
In relation to Drozhilovskoye, the Company is agreeing the final
form and content of the work programmes with the Kazakh
authorities. Within the revisions to the work programme it has been
agreed that the area is to be split into a north and south area and
a commitment has been given that after one year of exploration
works the northern area will be transferred to the production
stage. These documents were delivered to the Kazakh authorities in
September 2017, for final sign off, and are no further amendments
are expected.
In accordance with the mine development plan, company
representatives arranged visits in April and June 2017, to several
institutes in China and Russia, which dealt with design of
molybdenum, tungsten, and lithium recovery processing plants with
facilities in China covering ore treatment.
In April 2017, several negotiations were held with IISC SB RAS
(Institute of Solid State Chemistry and Mechanochemistry of the
Siberian Branch of Russian Academy of Sciences) regarding the
technological testing of molybdenum, tungsten and lithium recovery
into concentrate. Commercial quotes were received which are being
considered, these will allow the company to arrange the
technological research and testing. IISC SB RAS has designed a
Chemicometallurgical Plant in Krasnoyark, Russia, which processes
lithium ores into metal and crystallised lithium as a final
product.
In June 2017 company representatives also arranged visits to
several institutes in China (Beijing, Urumqi, Yantai), which dealt
with the recovery technologies of molybdenum, tungsten and lithium.
In addition, at this time a number of working processing plants
were visited in order to plan for the future production of ore.
The core drilling in Drozhilovskoye and Smirnovskoye is expected
to commence in H1 2018 with samples of the cores extracted to be
sent to China and/or Russia for technological testing the results
of the pilot tests are expected in the same period or shortly
thereafter.
We would like to thank the shareholders for their patience
during this time but see a positive future for the Company going
forward and for developments in 2018.
The major shareholder Bergfolk Corporation which is owned by the
Assaubayev family, is fully committed to continuing to advance the
project. Under the facility agreement in place with Amrita
Investments Limited the Company has access to circa GBP4.5m of
financing. Further details in relation to this facility are set out
later in this letter.
Sanzhar Assaubayev
CEO Kemin Resources Plc
Kemin
Resources
Plc
Consolidated
income
statement
Six months
ended
30 June
2017
Six months to Six months to Year ended
30 June 30 June 31 December 2016
2017 2016
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Continuing
operations
Administrative (93) (104) (158)
expenses
Operating (93) (104) (158)
Loss
Finance (115) (134) (287)
Expense
Loss before (208) (238) (445)
taxation
Income tax - - -
expense
Loss for (208) (238) (445)
the
period
Loss for
the
period
attributable
to:
Equity (206) (232) (432)
shareholders
of the
parent
Non-controlling (2) (6) (13)
interest
(208) (238) (445)
Loss per
ordinary
share
Basic (0.12p) (0.14p) (0.25p)
& Diluted
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 2016
2017 2016
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Loss for (208) (238) (445)
the
period
Currency 10 (76) (58)
translation
differences
arising
on
translations
of foreign
operations*
Total (198) (314) (503)
comprehensive
loss
* items
which
may
be
re-classified
to
statement
or profit
or loss.
Loss for
the
period
attributable
to:
Equity (200) (291) (481)
shareholders
of the
parent
Non-controlling 2 (23) (22)
interest
(198) (314) (503)
Kemin
Resources
Plc
Consolidated
Statement
of
financial
position
Six months
ended
30 June
2017
30 June 2017 30 June 2016 31 December 2016
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Non-current
assets
Intangible 2,502 2,221 2,539
assets
Property, 14 14 15
plant
and
equipment
Other 167 162 169
non-current
assets
Restricted 4 4 5
cash
2,687 2,401 2,728
Current
assets
Other 24 25 10
receivables
Cash and 8 119 59
cash
equivalents
32 144 69
Total 2,719 2,545 2,797
assets
Current
liabilities
Trade and 1,617 1,439 1,590
other
payables
Loans 669 441 690
and
borrowings
Other - - -
liabilities
2,286 1,880 2,280
Non-current
liabilities
Loans 3,104 2,936 2,990
and
borrowings
3,104 2,936 2,990
Total 5,390 4,816 5,270
liabilities
Net (2,671) (2,271) (2,473)
liabilities
Equity
Ordinary 1,748 1,748 1,748
share
capital
Deferred 6,168 6,168 6,168
share
capital
Share 37,414 37,414 37,414
premium
Merger (41,682) (41,682) (41,682)
reserve
Share based 1,105 1,105 1,105
payment
reserve
Other 1,188 1,172 1,188
reserve
Currency 9 (7) 3
translation
reserve
Retained (8,430) (8,024) (8,224)
earnings
(2,480) (2,106) (2,280)
Non-controlling (191) (165) (193)
interest
Total (2,671) (2,271) (2,473)
equity
Kemin
Resources
Plc
Consolidated
Statement
of
changes
in
equity
Six
months
ended
30 June
2017
Ordinary Deferred Share based Currency Attributed to Non-
share share Share Merger payment Other translation Retained owners of the controlling
capital capital premium reserve reserve reserve reserve earnings parent interest Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
1 1,748 6,168 37,414 (41,682) 1,105 1,188 3 (8,224) (2,280) (193) (2,473)
January
2017
Loss for - - - - - - - (206) (206) (2) (208)
the
period
Currency - - - - - - 6 - 6 4 10
translation
differences
arising
on
translation
of
foreign
operations
Total - - - - - - 6 (206) (200) 2 (198)
comprehensive
loss
At 30 1,748 6,168 37,414 (41,682) 1,105 1.188 9 (8,430) (2,480) (191) (2,671)
June
2017
At 1,748 6,168 37,414 (41,682) 1,105 912 52 (7,792) (2,075) (171) (2,246)
1
January
2016
Loss for - - - - - - - (232) (232) (6) (238)
the
period
Currency - - - - - - (59) - (59) (17) (76)
translation
differences
arising
on
translation
of
foreign
operations
Total - - - - - - (59) (232) (291) (23) (314)
comprehensive
loss
Modification - - - - - 260 - - 260 29 289
of
loans
received
At 30 1,748 6,168 37,414 (41,682) 1,105 1.172 (7) (8,024) (2,106) (122) (2,271)
June
2016
At 1,748 6,168 37,414 (41,682) 1,105 912 52 (7,792) (2,075) (171) (2,246)
1
January
2016
Loss for - - - - - - - (432) (432) (13) (445)
the year
Currency - - - - - - (49) - (49) (9) (58)
translation
differences
arising
on
translation
of
foreign
operations
Total - - - - - - (49) (432) (481) (22) (503)
comprehensive
profit
-
31
December
2015
Contribution - - - - - 276 - - 276 - 276
from
related
party
At 1,748 6,168 37,414 (41,682) 1,105 1,188 3 (8,224) (2,280) (193) (2,473)
31
December
2016
Kemin Resources
Plc
Consolidated cash
flow statement
Six months ended
30 June 2017
Six months to Six months to Year ended
30 June 2017 30 June 2016 31 December 2016
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Net cash outflow (51) (188) (247)
from
operating activities
Financing
activities
Loans - - (1)
repaid
Net cash outflow - - (1)
from
financing activities
Decrease in cash and (51) (188) (248)
cash equivalents
Cash and cash 59 307 307
equivalents
at
the beginning of
the period
Cash and cash 8 119 59
equivalents
at the end of
the period
Kemin Resources Plc
Notes to the consolidated financial information
Six months ended 30 June 2017
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 2017 to 30 June 2017 is unaudited and incorporates
unaudited comparative figures for the interim period 1 January 2016
to 30 June 2016 and the audited financial information for the year
to 31 December 2016. 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 2017, the Group had cash in hand of GBP8,000
(December 2016:GBP59,000).
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 GBP4.5m
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.
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 2017 is GBP206,000, (30
June 2016: loss GBP232,000 , 31 December 2016 loss GBP432,000).
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 2017 is 174,833,041 (30 June 2016 174,833,041, 31
December 2016 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 2017 30 June 2016 31 December 2016
Closing Average Closing Average Closing Average
KZT= GBP 414.00 402.00 449.35 493.52 406.65 467.79
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 2017 were approved by the directors on 26 September 2017.
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 and Strand Hanson Limited
Financial
Adviser
and Broker 26 Mount Row
Mayfair
London
W1K 3SQ
Telephone: +44 (0) 20 7409 3494
Auditors to BDO LLP
the Group
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/20170926006468/en/
This information is provided by Business Wire
(END) Dow Jones Newswires
September 27, 2017 02:00 ET (06:00 GMT)
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