RNS Number : 3485Z
Metals Exploration PLC
14 September 2022
 

METALS EXPLORATION PLC

INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2022

Metals Exploration plc (AIM: MTL) ("Metals Exploration" or the "Company"), the Philippine gold producer, announces its interim results for the six months ended 30 June 2022, and will be made available on the Company's website at www.metalsexploration.com.

 

Highlights

 

·      Gold production of 31,348 ounces (H1 2021: 35,316 ounces);

·      Gold recoveries of 87.7% (H1 2021: 81.0%);

·      Operating profit of US$9.4 million achieved (H1 2021: US$14.2 million);

·      Positive cashflow from operations of US$17.0 million (H1 2021: US$21.3 million);

·      The Group's senior debt was US$8.1 million (H1 2021: US$42.4 million) - it is expected that the senior loan will be fully repaid during Q4 2022.

·      Net Debt as at 30 June 2022 US$92.9 million (H1 2021: US$111.0 million);

·      Over 17 million man-hours since the last reported lost-time injury.

 

Production Summary

 

Runruno Project

 


 

 

 

Production Summary

 


Actual

Actual

Actual

 

Units


6 Months to

30 June 2022

6 Months to

30 June 2021

12 Months to

31 December 2021

Mining

 





Ore Mined

Tonnes


1,289,123

713,742

1,896,808

Waste Mined

Tonnes


5,676,856

4,537,749

8,874,266

Total Mined

Tonnes


6,965,979

5,251,491

10,771,074

Au Grade Mined

g/tonne


1.10

1.27

1.21

Strip Ratio



4.28

5.92

4.43

Processing

 





Ore Milled

Tonnes


1,017,258

1,048,290

2,136,875

Gold (Au) Grade

g/tonne


1.09

1.29

1.26

Sulphur Grade

%


0.98

1.11

0.97

Au Milled (contained)

ounces


35,742

43,620

86,611

Recovery

%


               87.7

81.0

               83.7

Au Poured

ounces


31,348

35,316

73,206

Sales

 





Au Sold

ounces


30,676

34,745

72,447

Au Price

US$/oz


1,878

1,797

1,792

 



 

Review of Operations

 

Safety and health

The outstanding safety record of the operation continues with in excess of 17 million man-hours with no lost time incidents occurring since the last lost time incident in December 2016. All employees and contractors are to be congratulated on this ongoing achievement.

 

The COVID-19 vaccination programme has been successful in that in excess of 95% of all staff and on-site contractors have received at least two vaccine doses. This has contributed to the mine-site operations being unaffected as a result of COVID-19.

 

Finance

A lower head grade of 1.10g/t for H1 2022 (H1 2021: 1.27g/t) contributed to lower gold production and sales revenue. Gold sales were US$57.6 million (H1 2021 US$62.4 million). Operations resulted in positive free cash flow of US$17.0 million (H1 2021: US$21.3 million).

 

As at H1 2022 end, the Group's senior debt was US$8.1 million (H1 2021: US$42.4 million) with net debt of US$92.9 million (H1 2021: US$109.6 million). Total debt repayments made during H1 2022 were US$17.0 million (H1 2021: US$20.6 million). It is expected that the senior loan will be fully repaid during Q4 2022. Details of these debt facilities can be found in Note 5.

 

Mining

Mining production of ore and waste was 7.0Mt for H1 2022 (H1 2021: 5.3Mt) and the total ore mined was 1.3Mt (H1 2021: 0.7Mt).

 

Mining of Stage 1 of the mine plan was completed during H1 2022, while mining of Stage 2 was completed in early Q3 2022. In-pit back-filling of waste is well underway.

 

Full access to Stage 3 of the mine plan, which is critical to the mining operation schedule, was not achieved during H1 2022. Notwithstanding several court orders in the Company's favour, access to a key area of Stage 3 was not achieved. This resulted in changes to the Company mine plan delaying access to higher grade material in Stage 3. Mining of this material is now scheduled to commence in Q3 2022. These access issues have also temporarily halted both the resource definition and exploration drill programmes planned for Stages 4 and 5. Access to the final Stage 3 areas was secured during Q3 2022.

 

During H1 2022, due to macro-economic conditions, there was a noticeable increase in the cost of essential consumables including fuel, explosives etc, resulting in mining unit costs exceeding budget. The Company's mining equipment fleet performed adequately during H1 2022.

 



 

Process plant

Throughput for H1 2022 of 1.02Mt (H1 2021: 1.05Mt) was on budget, however, operations were managed to a lower feed grade.  Delays in accessing mine plan Stage 3 and 4 affected the head grade during H1 2022, with higher grade material from Stage 3 now scheduled to be accessed during H2 2022. 

 

Gold production for H1 2022 was 31,348 ounces (H1 2021: 35,316 ounces). Notwithstanding the below noted BIOX performance issues, a higher gold recovery rate of 87.7% was achieved (H1 2021: 81.0%).

 

Adverse weather events resulted in numerous power failures during Q2 2022. These power outages contributed to a lack of stability of the BIOX bacteria culture; giving rise to resultant production losses over several weeks. Difficulties were experienced in re-establishing a stable bacteria culture in the BIOX circuit due to an unknown contaminant that developed in the return water sources that were being used to feed the BIOX circuit.  As a result of these issues BIOX has under-performed in H1 2022, impacting overall gold produced during the period. Since period end, there have been no further water contaminant issues, which are expected to have a similar effect on the BIOX circuit's performance.

 

A major upgrade to the process plant return water and cooling systems is underway. Once completed, the Company will have an increased ability to control BIOX temperature and to reduce the risk of contaminated return water feed.

 

Further unplanned process plant downtime during H1 2022 was caused in the main by tails line failures and conveyor belt and return water line repairs.

 

Residual Storage Impoundment ("RSI")

The RSI is operating to design with an excellent environmental performance record. Construction of the final Stage 6 RSI lift has commenced with completion expected by year end.

 

The performance of the RSI is continuously monitored by an independent international consulting group. Engineering and final detailed designs for the final in-rock spillway are well advanced with the commencement of construction expected in H1 2023.

 

Community & Government Relations

Productive relations with both the community and the Philippine government continue. The Company, with the assistance of various government agencies, finally secured full access to Stage 3 mine areas in Q3 2022. Further removal of illegal miners, their infrastructure and dwellings from mine plan Stages 4 and 5 is required to allow exploration drilling to be undertaken in these areas.

 

Corporate

In June 2022 Tim Livesey replaced Jeremy Wrathall as an Independent Non-Executive Director of the Company.

Mr Livesey has been appointed Chairman of the Remuneration Committee and a member of the Audit Committee.

 

The 2022 AGM held in June 2022 approved acapital sub-division and capital reduction. The capital sub-division corporate event changed the nominal value of ordinary shares to £0.0001 while creating a new class of Deferred Shares effective from the date of the AGM.

 

Since period end, the Company completed the capital reduction corporate event, eliminating both the Deferred Share capital account and the Share Premium account, resulting in a capital reduction of approximately US$224 million, with an offsetting US$224 million credit applied against the accumulated profit and loss account. This has simplified the Company's equity structure whilst adding greater flexibility for both future equity raises and shareholder distributions.

 

In addition, in June 2022, the Company issued 17,462,835 ordinary shares at an issue price of £0.01245 to certain members of senior management in lieu of a £217,400 cash bonus.

 



 

 

 

 

For further information please visit or contact www.metalsexploration.com

 

 

Metals Exploration PLC

 

Via Tavistock Communications Limited

+44 (0) 207 920 3150

Nominated & Financial Adviser:

STRAND HANSON LIMITED

James Spinney, James Dance, Rob Patrick

+44 (0) 207 409 3494

Financial Adviser & Broker:

HANNAM & PARTNERS

Matt Hasson, Franck Nganou

+44 (0) 207 907 8500

Public Relations:

TAVISTOCK COMMUNICATIONS LIMITED

Jos Simson, Nick Elwes

+44 (0) 207 920 3150

 

 

 

 


CONDENSED CONSOLIDATED STATEMENT OF TOTAL COMPREHENSIVE INCOME for the six months ended 30 June 2022

 

 

Notes

6 month period ended 30 June 2022 (unaudited)

 

6 month period ended

30 June 2021 (unaudited)

 

Year ended

31 December 2021 (audited)

 

 

US$

 

US$

 

US$

Continuing Operations

 






Revenue


57,621,936


62,439,246


129,843,489

Cost of sales


(42,493,529)


(44,363,193)


(91,977,555)








Gross profit

 

15,128,407


18,076,053

 

37,865,934

Administrative expenses


(5,724,198)


(3,897,168)


(8,475,303)








Operating profit

 

9,404,209

 

14,178,885

 

29,390,631

 







Impairment loss

 

(670,677)


(798,275)


(1,450,078)

Loss on sale of assets


-


(78,206)


(78,206)

Net finance and other costs

 

(7,271,289)


(7,324,104)


(16,232,196)

Loss on fair value changes to derivatives

 

(526,495)


-


(332,996)

Share based payment expense


(75,698)


-


(10,982)

Share of (loss)/ profit of associates


(2,729)


(6,642)


18,232

Profit before tax

 

857,321

 

5,971,658

 

11,304,405

 







Tax expense


(75,255)


(29,910)


(11,769)

Profit for the period attributable to equity holders of the parent

 

782,066

 

5,941,748

 

11,292,636

 







Other comprehensive income:

 






Items that may be re-classified subsequently
to profit or loss:







Exchange differences on translating foreign operations


40,020


(1,428,287)


(791,929)

Items that will not be re-classified subsequently
to profit or loss:







Re-measurement of pension liabilities


-


-


123,855

Total comprehensive profit for the period attributable to equity holders of the parent

 

822,086

 

4,513,461

 

10,624,562

 







Earnings per share:

 






Basic cents per share

Diluted cents per share

4

0.04

0.04

 

0.29

0.28

 

0.55

0.52


 

 

 

 

 



 

 

 

 

 


 

 



 

CONDENSED CONSOLIDATED INTERIM BALANCE SHEET

as at 30 June 2022

 

 

 

 

 

 

 

 

 

Notes

30 June 2022 (Unaudited)

 

30 June 2021 (Unaudited)

 

31 December 2021 (Audited)

 

 

 

US$

 

US$

 

US$

 

Non-current assets

 






 

Property, plant and equipment

 

88,810,504


99,810,635


95,941,405

 

Other intangible assets

 

49,743


65,396


70,115

 

Investment in associate companies

 

179,536


157,391


182,265

 

Trade and other receivables

 

5,572,524


5,606,159


5,529,628

 


 

94,612,307

 

105,639,581

 

101,723,413

 

Current assets

 






 

Inventories

 

22,136,388


16,524,182


17,217,885

 

Trade and other receivables

 

6,890,283


7,023,876


5,968,568

 

Cash and cash equivalents

 

288,439


4,702,995


4,736,970

 


 

29,315,110

 

28,251,053

 

27,923,423

 

Non-current liabilities

 






 

Loans

5

(74,146,474)


(85,041,950)


(78,856,268)

 

Trade and other payables

 

(1,871,640)


(1,938,387)


(1,950,535)

 

Deferred tax liabilities

 

(880,935)


(838,661)


(805,680)

 

Provision for mine rehabilitation

 

(4,031,740)


(3,310,074)


(4,015,050)

 



(80,930,789)

 

(91,129,072)

 

(85,627,533)


Current liabilities

 






 

Trade and other payables


(12,791,908)


(10,095,399)


(10,328,000)

 

Loans - current portion

5

(18,711,883)


(29,264,218)


(23,834,279)

 

Derivative liabilities

 

(805,124)


-


(332,996)

 



(32,308,915)

 

(39,359,617)

 

(34,495,275)


 







 

Net assets

 

10,687,713

 

3,401,945

 

9,524,028

 

 







 

Equity







 

Share capital

6

27,952,353


27,950,217


27,950,217

 

Share premium account

6

196,118,890


195,855,125


195,855,125

 

Acquisition of non-controlling interest reserve


(5,107,515)


(5,107,515)


(5,107,515)

 

Translation reserve


14,708,496


16,262,872


14,668,476

 

Re-measurement reserve


162,003


38,148


162,003

 

Other reserves


1,613,617


1,526,937


1,537,919

 

Profit and loss account


(224,760,131)


(233,123,839)


(225,542,197)

 








 

Equity attributable to equity holders of the parent

 

10,687,713

 

3,401,945

 

9,524,028

 




CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY for the six months ended 30 June 2022

 


Share capital

Share premium account

Acquisition of non-controlling interest reserve

Translation reserve

Re-measurement reserve

 

 

Other reserve

Profit and loss account

Total equity


US$

US$

US$

US$

US$

US$

US$

US$

 

Balance at 1 January 2022

27,950,217

195,855,125

(5,107,515)

14,668,476

162,003

1,537,919

(225,542,197)

9,524,028










Exchange differences on translating foreign operations

-

-

-

40,020

-

-

-

40,020

Profit for the period

-

-

-

-

-

-

782,066

782,066

Share based payment

-

-

-

-

-

75,698

-

75,698

Total comprehensive (loss)/profit for the period

-

-

-

40,020

-

75,698

782,066

897,784

Equity issue

2,136

263,765

-

-

-

-

-

265,901


 

 

 

 

 

 

 

 

Balance at 30 June 2022

27,952,353

196,118,890

(5,107,515)

14,708,496

162,003

1,613,617

(224,760,131)

10,687,713

 

Equity is the aggregate of the following:

·      Share capital; being the nominal value of shares issued.

·      Share premium account; being the excess received over the nominal value of shares issued less direct issue costs.

·      Acquisition of non-controlling interests reserve; being amounts recognised on acquiring additional equity in a controlled subsidiary.

·      Translation reserve; being the foreign exchange differences on the translation of foreign subsidiaries.

·      Re-measurement reserve; being the cumulative actuarial gains and losses, return on plan assets and changes in the effect of the asset ceiling (excluding net interest on defined benefit liability) recognised in the statement of total comprehensive income.

·      Other reserves; being the cumulative fair value of warrants associated with certain mezzanine debt facilities and share-based payments expense.

·      Profit and loss account; being the cumulative loss attributable to equity shareholders.



 

 

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY for the six months ended 30 June 2021

 


Share capital

Share premium account

Acquisition of non-controlling interest reserve

Translation reserve

Re-measurement reserve

Other reserve

Profit and loss account

Total equity


US$

US$

US$

US$

US$

US$

US$

US$

 

Balance at 1 January 2021

27,950,217

195,855,125

(5,107,515)

17,691,159

38,148

1,526,937

(239,065,587)

(1,111,516)










Exchange differences on translating foreign operations

-

-

-

(1,428,287)

-

-

-

(1,428,287)










Profit for the period

-

-

-

-

-

-

5,941,748

5,941,748

Total comprehensive (loss)/profit for the period

-

-

-

(1,428,287)

-

-

5,941,748

4,513,461


 

 

 

 

 

 

 

 

Balance at 30 June 2021

27,950,217

195,855,125

(5,107,515)

16,262,872

38,148

1,526,937

(233,123,839)

3,401,945

 

Equity is the aggregate of the following:

·      Share capital; being the nominal value of shares issued.

·      Share premium account; being the excess received over the nominal value of shares issued less direct issue costs.

·      Acquisition of non-controlling interests reserve; being amounts recognised on acquiring additional equity in a controlled subsidiary.

·      Translation reserve; being the foreign exchange differences on the translation of foreign subsidiaries.

·      Re-measurement reserve; being the cumulative actuarial gains and losses, return on plan assets and changes in the effect of the asset ceiling (excluding net interest on defined benefit liability) recognised in the statement of total comprehensive income.

·      Other reserves; being the cumulative fair value of warrants associated with certain mezzanine debt facilities.

·      Profit and loss account; being the cumulative loss attributable to equity shareholders.



 

 

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY for the year ended 31 December 2021

 


Share capital

Share premium account

Acquisition of non-controlling interest reserve

Translation reserve

Re-measurement reserve

 

 

Other reserve

Profit and loss account

Total equity


US$

US$

US$

US$

US$

US$

US$

US$

 

Balance at 1 January 2021

27,950,217

(5,107,515)

15,460,405

38,148

1,526,937

(236,834,833)

(1,111,516)










Exchange differences on translating foreign operations

-

-

-

(791,929)

 

 

-

-

-

(791,929)

Change in pension liability

-

-

-

-

123,855

-

-

123,855

Profit for the year

-

-

-

-

-

-

11,292,636

11,292,636

Share based payments

-

-

-

-

-

10,982

-

10,982

Total comprehensive profit/(loss) for the period

-

-

-

(791,929)

123,855

10,982

11,292,636

10,635,544


 

 

 

 

 


 

 

Balance at 31 December 2021

27,950,217

195,855,125

(5,107,515)

14,668,476

162,003

1,537,919

(225,542,197)

9,524,028

 

Equity is the aggregate of the following:

·      Share capital; being the nominal value of shares issued.

·      Share premium account; being the excess received over the nominal value of shares issued less direct issue costs.

·      Acquisition of non-controlling interests reserve; being amounts recognised on acquiring additional equity in a controlled subsidiary.

·      Translation reserve; being the foreign exchange differences on the translation of foreign subsidiaries.

·      Re-measurement reserve; being the cumulative actuarial gains and losses, return on plan assets and changes in the effect of the asset ceiling (excluding net interest on defined benefit liability) recognised in the statement of total comprehensive income.

·      Other reserves; being the cumulative fair value of warrants associated with certain mezzanine debt facilities and share-based payments expense.

·      Profit and loss account; being the cumulative loss attributable to equity shareholders.

 


 

 

CONDENSED CONSOLIDATED INTERIM CASH FLOW STATEMENT for the six months ended 30 June 2022

 

 

 

Notes

6 month period ended

30 June 2022 (unaudited)

 

6 month period ended

30 June 2021 (unaudited)

 

Year ended

31 December 2021 (audited)

 

 

US$

 

US$

 

US$








Net cash arising from operating activities

 

 

17,037,683

 

 

21,274,714

 

46,515,768

 







Investing activities

 






Exploration expenses incurred


-


(285,885)*


(338,203)

Purchase of property, plant and equipment


(3,991,767)


(4,636,801)


(11,542,751)

Purchase of intangible assets


-


(45,993)*


(45,993)

Proceeds from sale of plant and equipment


-


60,000


60,000

Net cash used in investing activities

 

(3,991,767)

 

(4,908,679)

 

(11,866,947)

 







Financing activities

 






Repayment of borrowings - principal and interest


(17,000,000)


(20,600,000)


(39,675,000)

Net cash arising from financing activities

 

(17,000,000)

 

(20,600,000)

 

(39.675.000)

 







Net(decrease)/increase in cash and cash equivalents


 

(3,954,084)


 

(4,233,965)


(5,026,179)

Cash and cash equivalents at beginning of period


4,736,970


8,931,792


8,931,792

Foreign exchange difference


(494,447)


5,168


831,357








Cash and cash equivalents at end of period

 

288,439

 

4,702,995

 

4,736,970

 

* Restated 30 June 2021 to be consistent with subsequent disclosure as at the 31 December 2021 year end



 

Notes to the condensed consolidated interim financial statements

 

1.             General information

 

These condensed consolidated interim financial statements of Metals Exploration and its subsidiaries (the "Group") were approved by the Board of Directors on 13 September 2022. Metals Exploration is the parent company of the Group. Its shares are quoted on AIM market of the London Stock Exchange plc. The registered address of Metals Exploration plc is 38 - 43 Lincoln's Inn Fields, London, WC2A 3PE.

 

The condensed consolidated interim financial statements for the period 1 January 2022 to 30 June 2022 are unaudited. The financial information has been prepared on the basis of IFRS that the Directors expect to be adopted in the UK and applicable as at 31 December 2022. The group has chosen not to adopt IAS 34 "Interim Financial Statements" in preparing the interim financial information the condensed consolidated interim financial statements incorporate unaudited comparative figures for the interim period from 1 January 2021 to 30 June 2021 and the audited financial year ended 31 December 2021.

 

The financial information set out in this interim report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The Group's statutory accounts for the year ended 31 December 2021, which were prepared under International Financial Reporting Standards, were filed with the Registrar of Companies. The auditors reported on these accounts and their report was unqualified and did not contain a statement under either Section 498 (2) or Section 498 (3) of the Companies Act 2006.

 

 

2.             Basis of preparation

 

The interim financial information in this report has been prepared using accounting policies consistent with UK-adopted international accounting standards. The financial information has been prepared based on UK-adopted international accounting standards that the Board of Directors expect to be applicable as at 31 December 2022.

 

These condensed consolidated interim financial statements have been prepared under the historical cost convention, except for derivative financial instruments, which are measured at fair value, and in accordance with UK-adopted international accounting standards. There have been no changes in accounting policies as described in the 2021 annual financial statements.

 

3.             Going concern

 

These condensed consolidated interim financial statements of the Group have been prepared on a going concern basis, which contemplates the continuity of business activities, the realisation of assets and the settlement of liabilities in the normal course of business.

 

Although as at 30 June 2022, the Group's current liabilities continue to exceed its current assets, primarily due to the estimated external borrowings the Group expects to repay within the next 12 months, there is no obligation to adhere to a set loan principal or interest repayment schedule.

 

The Group is not subject to any set principal or interest repayment schedule. Excess free cashflow is required to be paid to lenders on a minimum quarterly basis only when net working capital is in excess of US$5million. In addition, the Group is not in default if it is unable to make a quarterly payment to the lenders, but would continue to be obliged to pay out the excess free cash flow as soon as possible. As a result of these debt repayment arrangements, including the ongoing existence of a US$5million positive net working capital balance, together with the sustained positive cash flows being produced by the Runruno Project, the Directors believe there is no material uncertainty over the Group's going concern.

 

The Group and its ability to operate as a going concern and to meet its commitments as and when they fall due is dependent upon the ability of the Group to operate the Runruno Project successfully so as to generate sufficient cash flows to enable the Group to settle its liabilities (including the restructured debt facilities) as they fall due.

 

The Board of Directors believes that the Runruno Project will continue to operate successfully and produce positive cash flows for at least 12 months from the date of this interim report, being 13 September 2022. As a result, the Board of Directors considers it appropriate that the half-year financial information should be prepared on a going concern basis.

 

 



 

 

4.             Earnings per share

 

The earnings per share was calculated on the basis of net profit/(loss) attributable to equity shareholders divided by the weighted average number of ordinary shares.


6 month period ended 30 June 2022

6 month period ended 30 June 2021

Year ended

31 December 2021


(unaudited)

(unaudited)

(audited)


US$

US$

US$

Earnings

 

 

 

Net profit/(loss) attributable to equity shareholders for the purpose of basic and diluted earnings per share

 

 

782,066

 

 

5,941,748

11,292,636





Number of shares

 

 

 

Weighted average number of ordinary shares for the purpose of basic earnings per share

 

2,072,588,751

 

2,071,334,586

 

2,071,334,586





Number of dilutive shares under warrant/option

114,083,011

30,950,049

115,983,670

Weighted average number of ordinary shares for the purpose of diluted earnings per share

2,186,671,762

2,102,284,635

2,187,318,256









Basic earnings cents per share

0.04

0.29

0.55

Diluted earnings cents per share

0.04

 

0.28

 

0.52

 



 

 

 

5.             Loans

 

Senior debt

On 28 May 2015, the Group entered into a loan with two foreign international resource banks for US$83,000,000 in project finance (the "Facility Agreement"). In January 2020 the Facility Agreement was acquired by companies associated with the Mezzanine Lenders (the "New Lenders").

 

In October 2020 the Group completed a debt restructuring with the New Lenders, whereby the Group no longer has an obligation to meet any fixed interest and principal repayment schedule (the "New Senior Debt"). The Group's repayment obligation under the New Senior Debt is limited to making a quarterly repayment of that amount which equals the available net working capital ("NWC") over and above a minimum US$5 million NWC buffer. NWC is defined as the Group's available cash on hand plus gold sales proceeds due, and gold doré on hand or in transit, less all current liabilities (including budgeted operational, CAPEX and exploration expenses, taxes, hedging costs and government charges, but excluding all unpaid debt principal and interest).

 

 

The principal plus capitalised interest balance owing by the Group under the Facility Agreement as at 30 June 2022 was US$8,109,129 (30 June 2021: US$42,410,937).

 

Mezzanine debt

Since 2015, the Company has entered into numerous facility agreements with two major shareholders, MTL (Luxembourg) Sarl and Runruno Holdings Limited (the "Mezzanine Lenders"). The purpose of these unsecured advances was for general corporate and working capital requirements of the Company and to enable completion of the Runruno Project.

 

In October 2020 the various original mezzanine facilities were consolidated into two new facilities (the "New Mezzanine Facilities") and a £100,000 revolving credit facility. There is no obligation to make any repayment of any amounts due under the New Mezzanine Facilities until the New Senior Debt is fully repaid. The New Mezzanine Facilities interest rate will initially be 15% per annum, reducing to 7% per annum once the New Senior Debt has been fully repaid. The principal and accrued interest/fees balance owing by the Company to the Mezzanine Lenders as at 30 June 2022 was US$85,117,009 (30 June 2021: US$73,314,888).

 

The Group's outstanding debt is summarised as follows:

 


June 2022

June 2021

December 2021


US$

US$

US$

Total loans due within one year*

18,711,883

29,264,218

23,834,279


 


 

Total loans due after more than one year*

74,146,474

85,041,950

78,856,268

 

* Given the Group is not subject to a fixed repayment schedule then, in accordance with the restructured debt facilities, there is no certainty as to what amount of debt will be repaid within one year from period end. Thus the determination of what debt is deemed current and what is deemed non-current is subject to estimation. In making this calculation the Group has taken into account the Group's estimate of what principal repayments will be made during the next 12 month period.


 

6.     Share capital

 

The 17 June 2022 AGM approved a capital reorganisation which consisted of both a capital sub-division and a capital reduction. The capital sub-division effected a change in the nominal value of ordinary shares. This was achieved by dividing the existing ordinary shares of £0.01 nominal value into one New Ordinary Share, with a nominal value of £0.0001 and one Deferred Share with a nominal value of £0.0099 each. The Deferred Shares have limited rights and the restrictions as set out in the new Articles of the Company adopted at the AGM. This capital sub-division was effective as from the day of the AGM.

 

The capital reduction element was to cancel, for no consideration the deferred shares and share premium account by way of creating a reserve to be offset against accumulated losses. This capital reduction was subsequently completed in July 2022 and is a non-adjusting post-balance sheet event. The issued capital of the Company as at 30 June 2022 is shown below.

 


June 2022

June 2021

December 2021

June 2022

June 2021

December 2021


Number of shares

Number of shares

Number of shares

US$

US$

US$

Ordinary shares of £0.01 par value

 



 

 

 

Opening balance

2,071,334,586

2,071,334,586

2,071,334,586

27,950,217

27,950,217

27,950,217

Sub-division

(2,071,334,586)

-

-

(27,950,217)

-

-

Closing balance

-

2,071,334,586

2,071,334,586

-

27,950,217

27,950,217

Ordinary shares of £0.0001 par value







Opening balance

-

-

-

-

-

-

Sub-division

2,071,334,586

-

-

279,502

-

-

Issued in period

17,461,835

-

-

2,136

-

-

Closing balance

2,088,796,421

-

-

281,638

-

-

Deferred shares of £0.0099 par value*







Opening balance

-

-

-

-

-

-

Sub-division

2,071,334,586

-

-

27,670,715

-

-

Closing balance*

2,071,334,586

-

-

27,670,715

-

-

Total share capital




27,952,353

27,950,217

27,950,217

 

*  Following completion of the necessary court approval process these Deferred Shares were cancelled in July 2022.


 

7.     Contingent liabilities

 

The Group has no contingent liabilities identified as at 30 June 2022 (2021: US$nil).

8.     Subsequent events

 

There have been no subsequent disclosable events other than the completion of the capital reduction referred to in note 6.

 

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