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Interim Results for the six months ended 30 June

Published: 19/09/2023, 07:00

RNS Number : 8308M

Eurasia Mining PLC

19 September 2023

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS DEFINED IN REGULATION NO. 596/2014 (AS IT FORMS PART OF RETAINED EU LAW AS DEFINED IN THE EUROPEAN UNION (WITHDRAWAL) ACT 2018) AND IS IN ACCORDANCE WITH THE COMPANY'S OBLIGATIONS UNDER ARTICLE 7 OF THAT REGULATION.

19 September 2023

Eurasia Mining plc

("Eurasia" or the "Company")

Interim Results for the six months ended 30 June 2023

Eurasia, the palladium, platinum, rhodium, iridium and gold mining company, today reports its unaudited interim results and operational summary for the six months ended 30 June 2023.

A copy of this announcement is also available on Eurasia's website at:

https://www.eurasiamining.co.uk/investors/news-announcements

For further information, please contact:

Eurasia Mining Plc

Christian Schaffalitzky/ Keith Byrne

+44 (0)207 932 0418

SP Angel Corporate Finance LLP (Nomad and Broker)

Jeff Keating / David Hignell / Adam Cowl

+44 (0)20 3470 0470

Chairman's Statement

Dear Shareholder

The first six months of 2023 saw the Company focused principally on our plan to sell our Russian assets.

Proposed sale of Russian assets

We have concentrated on this effort since 2020 and can report that we continue to make progress. Our focus on BRICS non-sanctioned counterparties continues, with several parties currently at various stages of their due diligence. Although, as stated previously, there is no guarantee of a positive outcome to this activity, the Board remains focused on achieving a successful conclusion.

West Kytlim

Site preparation work was completed during the first quarter of 2023, but due to the sale process being Eurasia's main priority, no metal concentrate has been produced at West Kytlim since the end of 2022.

Our key focus at West Kytlim has been on the sale of 2022 concentrate, which is currently held in inventory, with no restrictions related to its sale as a precious metals bearing high grade concentrate. The Board expects the concentrates to be sold at carrying value and we are currently evaluating offers from three parties who responded to the tender process.

We have started to receive value-added tax refunds (VAT) against capital expenditure in previous years, which also contributes to our cash position (see below), in addition to the proposed concentrate sale.

Monchetundra

The Definitive Feasibility Study ('DFS') at Monchetundra was approved by the authorities in late June 2023. This allows Eurasia to present this development and the resulting improvement in value to potential purchasers. The Company does not believe it is appropriate to commence construction immediately, as it is expected that any counterparties to the proposed asset sale may have their own plans for the development of Monchetundra and can either proceed with the EPCF contract signed with Sinosteel, or with a different contractor.

Financial position

The Company's current cash assets at 30 June 2023 including cash held in bank accounts (£0.4 million) and US treasury notes (£1.54 million) totalled £1.94 million. The value of unsold concentrate within Inventories at 30 June 2023 was approximately £3.5 million. In addition, the Company expects to receive VAT refunds of circa £1.5 million.

The Company's cash reserves are held in USD and GBP accounts outside of Russia and therefore not directly or indirectly exposed to Rouble foreign exchange gains or losses against other major hard currencies.

Sanctions

The Board continues to maintain a regular dialogue with the Company's legal advisers regarding the potential impact of any US, UK or EU sanctions on the Company, its operations and assets. The Company remains satisfied that its current operations are not prohibited under US, UK or EU sanctions rules. Furthermore, the Group does not engage and has not engaged with any sanctioned persons, entities or agencies. The Group continues to closely monitor all regulatory requirements and changes to the laws, rules and regulations, taking steps whenever necessary to ensure compliance with new legislation.

Management changes

Following the retirement of James Nieuwenhuys as CEO, the Company has established an Operations Committee, led by Christian Schaffalitzky, which oversees the day-to-day project development activities of the Company, alongside the proposed sale process on which the full Board is engaged. Eurasia does not intend to make any further management appointments at this stage.

Litigation

The previously announced litigation case between the Company and Queeld Investments Limited and Mispare Limited, and Eurasia remains ongoing. Further developments regarding this case will be announced as appropriate. The previously announced case filed by Logik Developments Ltd was settled in July 2023.

Outlook

We recognise that, in relation to the potential asset sale, it may be a source of frustration for shareholders that we cannot report on specific counterparties, the nature of our discussions, and the ongoing processes in more detail. This reflects the regulatory regime and the many confidentiality agreements that govern this activity. However, although there can be no guarantees, all the Eurasia Board members are engaged in contributing towards a successful outcome to this process, and we look forward to providing our shareholders with further updates as appropriate.

We again thank our shareholders for their continued support.

Christian Schaffalitzky

Chairman

Eurasia Mining PLC

Condensed consolidated statement of comprehensive income
for the six months ended 30 June 2023
	Note	6 months to	12 months to	6 months to
		30 June	31 December	30 June
		2023	2022	2022
		(unaudited)	(audited)	(unaudited)
		£	£	£

Sales	4	-	119,525	101,836
Cost of sales		-	(30,173)	(36,197)
Gross profit		-	89,352	65,639

Administrative costs		(1,298,464)	(4,618,351)	(1,257,924)
Investment income		53,184	61,325	10,070
Finance costs		(44,789)	(107,697)	(49,717)
Other gains	5	272,549	187,592	6,108,902
Other losses	5	(6,361,898)	(2,842,309)	(1,024,892)

(Loss)/profit before tax		(7,379,418)	(7,230,088)	3,852,078

Income tax expense		-	-	-

(Loss)/profit for the period		(7,379,418)	(7,230,088)	3,852,078

Other comprehensive (loss)/income:
Items that will not be reclassified subsequently to profit and loss:
NCI share of foreign exchange differences on translation of foreign operations		682,020	(61,656)	405,694
Items that will be reclassified subsequently to profit and loss:
Parents share of foreign exchange differences on translation of foreign operations		1,738,236	(341,762)	945,695

Other comprehensive income/(loss) for the period, net of tax		2,420,256	(403,418)	1,351,389

Total comprehensive (loss)/income for the period		(4,959,162)	(7,633,506)	5,203,467

(Loss)/profit for the period attributable to:
Equity holders of the parent		(5,638,150)	(5,840,245)	2,556,416
Non-controlling interest		(1,741,268)	(1,389,843)	1,295,662
		(7,379,418)	(7,230,088)	3,852,078

Total comprehensive (loss)/income for the period attributable to:
Equity holders of the parent		(3,899,914)	(6,182,007)	3,502,111
Non-controlling interest		(1,059,248)	(1,451,499)	1,701,356
		(4,959,162)	(7,633,506)	5,203,467

Basic and diluted (loss)/profit (pence per share)		(0.20)	(0.21)	0.09

Condensed consolidated statement of financial position
As at 30 June 2023
	Note	At 30 June	At 31 December	At 30 June
		2023	2022	2022
		(unaudited)	(audited)	(unaudited)
		£	£	£
ASSETS
Non-current assets
Property, plant and equipment	6	8,470,553	9,600,231	12,634,691
Assets in the course of construction		538,537	696,026	1,329,132
Intangible assets	7	2,748,361	2,859,368	3,146,073
Investment in financial assets		1,592,143	3,807,925
Investments in joint ventures		-	-	584,591

Total non-current assets		13,349,594	16,963,550	17,694,487

Current assets
Inventories		3,687,482	4,182,382	2,135,082
Trade and other receivables	8	2,684,475	3,171,669	4,124,692
Other financial assets		89,485	-	-
Current tax assets		5,967	6,050	10,371
Cash and bank balances		405,875	1,009,908	13,559,308

Total current assets		6,873,284	8,370,009	19,829,453

Total assets		20,222,878	25,333,559	37,523,940

EQUITY
Capital and reserves
Issued capital	9	61,208,111	61,187,111	61,187,111
Reserves	10	5,330,971	3,580,929	4,868,386
Accumulated losses		(44,604,733)	(38,954,777)	(30,558,116)

Equity attributable to equity holders of the parent		21,934,349	25,813,263	35,497,381
Non-controlling interest		(4,460,796)	(3,401,548)	(248,693)

Total equity		17,473,553	22,411,715	35,248,688

LIABILITIES
Non-current liabilities
Lease liabilities	11	147,592	181,198	431,973
Provisions	13	173,645	254,218	470,029

Total non-current liabilities		321,237	435,416	902,002

Current liabilities
Borrowings		-	-	50,833
Lease liabilities	11	98,256	167,071	211,397
Trade and other payables	12	2,265,361	2,230,879	1,111,020
Provisions	13	64,471	88,478	-

Total current liabilities		2,428,088	2,486,428	1,373,250

Total liabilities		2,749,325	2,921,844	2,275,252

Total equity and liabilities		20,222,878	25,333,559	37,523,940

Condensed statement of changes in equity
For the six months ended 30 June 2022
		Attributable to owners of the parent
	Note	Share capital	Share premium	Deferred shares	Other reserves	Foreign currency translation reserve	Accumulated losses	Total attributable to owners of parent	Non-controlling interest	Total equity
		£	£	£	£	£	£	£	£	£

Balance at 1 January 2022		2,853,560	51,308,068	7,025,483	3,924,026	(1,335)	(33,114,532)	31,995,270	(1,950,049)	30,045,221

Transaction with owners		-	-	-	-	-	-	-	-	-

Loss for the period		-	-	-	-	-	2,556,416	2,556,416	1,295,662	3,852,078

Other comprehensive loss
Exchange differences on translation of foreign operations		-	-	-	-	945,695	-	945,695	405,694	1,351,389
Total comprehensive income		-	-	-	-	945,695	2,556,416	3,502,111	1,701,356	5,203,467
Balance at 30 June 2022		2,853,560	51,308,068	7,025,483	3,924,026	944,360	(30,558,116)	35,497,381	(248,693)	35,248,688

Condensed statement of changes in equity
For the six months ended 30 June 2023
		Attributable to owners of the parent
	Note	Share capital	Share premium	Deferred shares	Other reserves	Foreign currency translation reserve	Accumulated losses	Total attributable to owners of parent	Non-controlling interest	Total equity
		£	£	£	£	£	£	£	£	£

Balance at 1 January 2023		2,853,560	51,308,068	7,025,483	3,924,026	(343,097)	(38,954,777)	25,813,263	(3,401,548)	22,411,715

Issue of shares under employee share option plan		5,000	16,000		11,806		(11,806)	-	-	21,000
Transaction with owners		5,000	16,000	-	11,806	-	(11,806)	-	-	21,000

Loss for the period		-	-	-	-	-	(5,638,150)	(5,638,150)	(1,741,268)	(7,379,418)

Other comprehensive loss
Exchange differences on translation of foreign operations		-	-	-	-	1,738,236	-	1,738,236	682,020	2,420,256
Total comprehensive income		-	-	-	-	1,738,236	(5,638,150)	(3,899,914)	(1,059,248)	(4,959,162)
Balance at 30 June 2023		2,858,560	51,324,068	7,025,483	3,935,832	1,395,139	(44,604,733)	21,913,349	(4,460,796)	17,473,553

Condensed consolidated statement of cash flows
for the six months ended 30 June 2021
	6 months to	12 months to	6 months to
	30 June	31 December	30 June
	2023	2022	2022
	(unaudited)	(audited)	(unaudited)
	£	£	£
Cash flows from operating activities

(Loss)/profit for the period	(7,379,418)	(7,230,088)	3,852,078
Adjustments for:
Depreciation and amortisation of non-current assets	497,628	1,006,210	1,194,452
- Asset value write off to cost of sales		2,365,988
Gain/(loss) on sale or disposal of property, plant and equipment	-	(4,952)	(4,219)
Finance costs recognised in profit or loss	47,548	107,697	49,717
Investment revenue recognised in profit or loss	(53,184)	(61,325)	(10,070)
(Gain)/loss on disposal of investments	18,362	814,158	-
(Loss reversal)/loss recognised on valuation of inventory	(272,549)	2,028,151	1,024,892
Rehabilitation cost recognised in profit or loss	(57,548)	99,725	90,096
Net foreign exchange loss/(profit)	6,343,536	(182,640)	(6,104,683)
	(855,625)	(1,057,076)	92,263
Movements in working capital
Increase in inventories	(75,390)	(6,166,681)	(3,098,450)
Increase in trade and other receivables	(71,805)	(1,300,887)	(1,614,762)
Increase in trade and other payables	392,291	1,716,777	508,844
Cash used in operations	(610,529)	(6,807,867)	(4,112,105)

Net cash used in operating activities	(610,529)	(6,807,867)	(4,112,105)

Cash flows from investing activities
Payments for investment securities	-	(7,030,548)	-
Proceeds from sale of investment securities	2,284,775	2,835,299	-
Interest received	-	11,943	10,070
loan provided to non-related party	(143,071)	-	-
Investment to acquire interest in joint venture	-	(354,769)	-
Payments for property, plant and equipment	(1,210,627)	(7,190,406)	(6,221,805)
Payments for other intangible assets	(475,540)	(1,239,085)	(910,258)
Proceeds from disposal of property, plant and equipment	-	4,952	4,219
Net cash generated by/(used in) investing activities	455,537	(12,962,614)	(7,117,774)
Cash flows from financing activities
Repayment of borrowings	-	(36,232)	-
Proceeds from issues of equity shares	21,000	-	-
Repayment of lease liability	(41,167)	(141,528)	(24,757)
Interest paid	(33,681)	(90,446)	(41,449)
Net cash used in financing activities	(53,848)	(268,206)	(66,206)

Net decrease in cash and cash equivalents	(208,840)	(20,038,687)	(11,296,085)
Effects of exchange rate changes on the balance of cash held in foreign currencies	(395,193)	(960,912)	2,845,886

Cash and cash equivalents at the beginning of period	1,009,908	22,009,507	22,009,507

Cash and cash equivalents at the end of the period	405,875	1,009,908	13,559,308

Selected notes to the condensed consolidated financial statements for the six months ended 30 June 2023


1. General information

Eurasia Mining plc (the "Company") is a public limited company incorporated and domiciled in Great Britain with its registered office at International House, 42 Cromwell Road, London SW7 4EF, United Kingdom and principal place of business at Clubhouse Bank, 1 Angel Court, EC2R 7HJ. The Company's shares are listed on AIM, a market of the London Stock Exchange. The principal activities of the Company and its subsidiaries (the "Group") are related to the exploration for and development of platinum group metals, gold and other minerals in Russia.

The financial information set out in these condensed interim consolidated financial statements (the "Interim Financial Statements") do not constitute statutory accounts as defined in Section 435 of the Companies Act 2006. The Group's statutory financial statements for the year ended 31 December 2022, prepared under International Financial Reporting Standards (the "IFRS"), have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified. The report did not contain a statement under Section 498(2) of the Companies Act 2006.

2. Basis of preparation
The Group prepares consolidated financial statements in accordance with International Accounting Standards in conformity with the requirements of the Companies Act 2006. These condensed consolidated interim financial statements for the period ended 30 June 2023 have been prepared by applying the recognition and measurement provisions of IFRS and the accounting policies adopted in the audited accounts for the year ended 31 December 2022.
These Interim Financial Statements have been prepared under the historical cost convention.
The accounting policies have been applied consistently throughout the Group for the purposes of preparation of these condensed consolidated interim financial statements.
The Interim Financial Statements are presented in Pounds Sterling (£), which is also the functional currency of the parent company.

3. Accounting policies
The Interim Financial Statements have been prepared in accordance with the accounting policies adopted in the Group's last annual financial statements for the year ended 31 December 2022.

4. Revenue
	6 months to	12 months to	6 months to
	30 June	31 December	30 June
	2023	2022	2022
	£	£	£
Sale of platinum and other metals	-	61,075	-
Other revenue	-	58,450	101,836

	-	119,525	101,836

5. Other gains and losses
	6 months to	12 months to	6 months to
	30 June	31 December	30 June
	2023	2022	2022
	£	£	£
Gains
Gain on disposal of property, plant and equipment	-	4,952	4,219
Reversal of loss on revaluation of stock to net realisable value	272,549	-	-
Net foreign exchange gain	-	182,640	6,104,683
	272,549	187,592	6,108,902
Losses
Impairment of investments	(18,362)	(814,158)	-
Loss on revaluation of stock to net realisable value	-	(2,028,151)	(1,024,892)
Net foreign exchange loss	(6,343,536)	-	-
	(6,361,898)	(2,842,309)	(1,024,892)

	(6,089,349)	(2,654,717)	5,084,010

The majority of the foreign exchange gains and losses are a result of the revaluation of monetary assets and liabilities in the subsidiary accounts as a result of movements in the Rouble exchange rates.

In 2022 the Group took a decision to postpone the sale of platinum and other metals due to a strong Ruble and low platinum price. Stock available at 30 June 2023 represents platinum concentrate ready for refining, which was valued (i) using methodology set in the refining and sale and purchase agreement made with local refinery in 2021 and (ii) exchange rate and metal prices at 30 June 2023.

6. Property, plant and equipment
	30 June	31 December	30 June
	2023	2022	2022
	£	£	£
Net book value at the beginning of period	9,600,231	5,061,743	5,061,743
Additions	1,137,353	2,443,927	5,911,509
Transferred from assets under construction	90,499	4,776,644	-
Written off to inventory	-	(2,365,988)	(2,365,988)
Depreciation	(497,628)	(1,006,210)	(1,194,452)
Exchange differences	(1,859,902)	690,115	2,855,891

Net book value at the end of period	8,470,553	9,600,231	12,634,691

7. Intangible assets
	30 June	31 December	30 June
	2023	2022	2022
	£	£	£
Net book value at the beginning of period	2,859,368	1,389,029	1,389,029
Additions	475,540	1,239,085	910,258
Exchange differences	(586,547)	231,254	846,786

Net book value at the end of period	2,748,361	2,859,368	3,146,073

Intangible assets represent capitalised costs associated with Group's exploration, evaluation and development of mineral resources.

8. Trade and other receivables
	30 June	31 December	30 June
	2023	2022	2022

Trade receivables	-	-	78,520
Advances made	677,536	822,280	1,759,183
Prepayments	26,929	135,447	36,681
VAT recoverable	1,496,281	1,942,410	2,123,355
Other receivables	483,729	271,532	126,953

	2,684,475	3,171,669	4,124,692

The fair value of trade and other receivables is not materially different to the carrying values presented. None of the receivables are provided as security or past due.

9. Share capital
	30 June	31 December	30 June
	2023	2022	2022

Issued ordinary shares with a nominal value of 0.1p:

Number	2,858,559,995	2,853,559,995	2,853,559,995
Nominal value (£)	2,853,560	2,853,560	2,853,560

Fully paid ordinary shares carry one vote per share and carry the right to dividends.

Issued deferred shares with a nominal value of 4.9 p:
Number	143,377,203	143,377,203	143,377,203
Nominal value (£)	7,025,483	7,025,483	7,025,483

Deferred shares have the following rights and restrictions attached to them:
- they do not entitle the holders to receive any dividends and distributions;
- they do not entitle the holders to receive notice or to attend or vote at General Meetings of the Company; and
- on return of capital on a winding up the holders of the deferred shares are only entitled to receive the amount paid up on such shares after the holders of the ordinary shares have received the sum of 0.1p for each ordinary share held by them and do not have any other right to participate in the assets of the Company.

There had been no change in the issued share capital during the reporting period.

Ordinary shares	Number of shares	Share capital	Share premium
		£	£
Balance at 1 January 2023	2,853,559,995	2,853,560	51,308,068
Exercise of warrants and options	5,000,000	5,000	16,000

Balance at 30 June 2023	2,858,559,995	2,858,560	51,324,068

Deferred shares	Number of deferred shares	Deferred share capital
		£
Balance at 1 January and 30 June 2021	143,377,203	7,025,483

10. Reserves
	30 June	31 December	30 June
	2023	2022	2022
	£	£	£
Capital redemption reserve	3,539,906	3,539,906	3,539,906
Foreign currency translation reserve	1,395,139	(343,097)	944,360
Equity-based payment reserve	395,926	384,120	384,120

	5,330,971	3,580,929	4,868,386

The capital redemption reserve was created as a result of a share capital restructuring in earlier years. There is no policy of regular transactions affecting the capital redemption reserve.

The foreign currency translation reserve represents exchange differences relating to the translation from the functional currencies of the Group's foreign subsidiaries into GBP.

The equity-based payments reserve represents a reserve arisen on (i) the grant of share options to employees under the employee share option plan and (ii) on issue of warrants under terms of professional service agreements.

11. Lease liabilities

The Group leases certain of its plant and equipment. The average lease term is 4.5 years, expiring in 2025. The Group has option to purchase the equipment for a nominal amount at the maturity of the finance lease. The Group's obligation under finance leases are secured by the lessor's title to the leased assets.
Interest rates underlying all obligations under finance leases are fixed at respective contract dates ranging from 21.9% to 23.5% per annum.

Minimum lease payments	30 June	31 December	30 June
	2023	2022	2022
	£	£	£
Less than one year	179,418	224,700	315,252
Between one and five years	103,334	202,820	496,817
More than five years	-	-	-
	282,753	427,520	812,069
Less future finance charges	(36,905)	(79,251)	(168,699)

Present value of minimum lease payments	245,848	348,269	643,370

Present value of minimum lease payments	30 June	31 December	30 June
	2023	2022	2022
	£	£	£
Less than one year	147,592	167,071	211,397
Between one and five years	98,256	181,198	431,973
More than five years	-	-	-

Present value of minimum lease payments	245,848	348,269	643,370

12. Trade and other payables
	30 June	31 December	30 June
	2023	2022	2022

Trade payables	802,525	270,214	615,115
Accruals	1,326,107	1,825,269	56,826
Social security and other taxes	45,523	46,460	167,392
Other payables	91,206	88,936	271,687

	2,265,361	2,230,879	1,111,020

The fair value of trade and other payables is not materially different to the carrying values presented. The above listed payables were all unsecured.

13. Provision
	30 June	31 December	30 June
	2023	2022	2022
	£	£	£
Long term provision:
Environment rehabilitation	470,029	254,218	470,029
Short term provision:
Environment rehabilitation	-	88,478	-

	470,029	342,696	470,029

Movement in provision	Six month to	12 month to	Six month to
	30 June	31 December	30 June
	2023	2022	2022
	£	£	£
At 1 January	342,696	200,762	200,762
Recognised in the period	-	54,612	79,541
Utilised in the period	-	-	-
Reduction resulting from re-measurement or settlement without cost	(57,548)	45,446	10,555
Unwinding of discount and effect of changes in the discount rate	13,867	17,251	8,268
Exchange difference	(60,899)	24,625	170,903

At the end of the period	238,116	342,696	470,029

Provision is made for the cost of restoration and environmental rehabilitation of the land disturbed by the West Kytlim mining operations, based on the estimated future costs using information available at the reporting date.

The provision is discounted using a risk-free discount rate of from 6.6% to 6.88% (2020: 3.87% to 5.08%) depending on the commitment terms, attributed to the Russian Federal Bonds.

Provision is estimated based on the sub-areas within general West Kytlim mining licence the company has carried down its operations on by the end of the reporting period. Timing is stipulated by the forestry permits issued at the pre-mining stage for each of sub-areas. Actual costs in respect of the long-term provision recognised by 30 June 2023 will be incurred within 2023-2025.

14. Commitments

At the time of the award of the Monchetundra mining license a royalty payment was calculated by the Russian Federal Reserves Commission. 20% of this payment was paid in December of 2018 and the remaining 80%, or Rub16.68 mln (approximately £150,000) to be paid by November 2023.

During 2020 the Group entered into several lease agreements to lease mining plant and equipment. As at 30 June 2023 the average lease term was 2 years and present value of minimum lease payments £245,848 (2022: £643,370).

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Market data

Interim Results for the six months ended 30 June