RNS Number : 1201F
Metals Exploration PLC
23 September 2024
 

METALS EXPLORATION PLC

INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2024

Metals Exploration plc (AIM: MTL) ("Metals Exploration", the "Company" or, together with its subsidiaries the "Group"), a gold producer in the Philippines, announces its unaudited interim results for the six months ended 30 June 2024. The results will be made available on the Company's website at www.metalsexploration.com.

 

Highlights

 

·      H1 2024 profit before tax of US$58.4 million (H1 2023: US$37.0 million);

·      H1 2024 earnings before tax, interest, depreciation, amortization and impairment charges US$47.1 million (H1 2023: US$43.0 million)

·      H1 2024 gold production of 42,535 ounces (H1 2023: 45,533 ounces);

·      H1 2024 gold recoveries of 89.6% (H1 2023: 89.8%);

·      H1 2024 positive free cash flow of US$46.4 million (H1 2023: US$41.9 million);

·      Over 23 million man-hours since the last reported lost-time injury;

·      Announcement of off-market buy-back of Runruno Holdings Limited's 18.6% shareholding - to be completed by the end of Q3 2024;

·      Debt free status confirmed with all debt disputes resolved and cash on hand of US$6.6 million as at 30 June 2024; and

·      Acquisition of the YMC group interest completed post period-end.

 

Production Summary

 

Runruno Project

 


 

 

 

Production Summary

 


Actual

Actual

Actual

 

Units


6 Months to

30 June 2024

6 Months to

30 June 2023

12 Months to

31 December 2023

Mining

 





Ore Mined

Tonnes


1,172,930

848,023

1,949,654

Waste Mined

Tonnes


4,849,036

5,385,929

10,412,735

Total Mined

Tonnes


6,021,966

6,233,952

12,362,398

Au Grade Mined

g/tonne


1.37

1.59

1.47

Strip Ratio



4.07

6.08

5.03

Processing

 





Ore Milled

Tonnes


1,099,159

1,068,391

2,104,207

Gold (Au) Grade

g/tonne


1.34

1.48

1.42

Sulphur Grade

%


1.35

1.41

1.36

Au Milled (contained)

ounces


47,489

50,701

96,068

Recovery

%


               89.6

89.8

 88.7

Au Poured

ounces


42,535

45,533

85,194

Sales

 





Au Sold

ounces


41,589

46,186

85,744

Au Price

US$/oz


2,190

1,939

1,944

 

 

Corporate

Buy-back of RHL shares

On 20 June 2024 the Company agreed to purchase the entire shareholding of Runruno Holdings Limited ("RHL"), being 393,513,302 ordinary shares of £0.0001 each in the capital of the Company ("Ordinary Shares") (the "RHL Shares") over three tranches and at a price of 5 pence per share, by means of an off-market buy back (the "Buy Back"). At a General Meeting of shareholders on 23 August 2024 the Buy Back of RHL's 18.6% interest in the Company was approved.

 

The Buy Back price of 5 pence per share was agreed by the Company and RHL at a date during negotiations of the Buy Back, based on the 30-day trailing volume weighted average market price at that date. The tranches of the Buy Back are:

·      203,640,000 RHL Shares acquired on 2 September 2024;

·      94,936,651 RHL Shares acquired on 2 September 2024; and

·      94,936,651 RHL Shares to be acquired by no later than 30 September 2024.

 

The aggregate consideration for the Buy Back is £19,675,665. All shares acquired from RHL will initially be held in treasury, until either cancelled or re-issued. Shares held in treasury have no voting rights. Following completion of the first tranche of the Buy Back, the relationship agreement with RHL was terminated.

 

Production fee and termination of Revolving Credit Facility ("RCF")

In conjunction with entering into the Buy Back agreement, the Group agreed to a production fee agreement with RHL. The Group has agreed to pay RHL a production fee of US$164 per ounce of gold produced at the Runruno contract area on any production that exceeds 204,269 ounces of gold from 1 May 2024 (being approximately 105% of the current forecast gold production from such date, based upon the Group's life of mine plan for the Runruno mine). Any such production fee due would be paid quarterly in arrears. Following completion of the first tranche of the Buy Back, the RCF was terminated with no early termination fee payable to either RHL or MTL Luxembourg S.a.r.l ("MTL Lux").

 

Debt settlement

The Company completed various agreements with its lenders, also in June 2024, that resolved all debt disputes including the payment of the final agreed principal/interest and applicable lender legal fees for both the senior and mezzanine debt, confirming that the Group is now debt free.

 

YMC Acquisition

At the General Meeting on 23 August 2024, shareholders also approved the completion of a share purchase agreement, to acquire a controlling interest in the Yamang Mineral Corporation group (the "YMC Group"). The aggregate consideration payable by the Company to the YMC Group shareholders was US$1.6 million in cash and the issue of options to subscribe for up to 41 million new Ordinary Shares at an exercise price equal to nominal value. This acquisition was completed on 27 August 2024. Refer to the announcement dated 28 August 2024.

 

Additional Option Issue

At the Annual General Meeting, shareholders approved the issue of 6.6 million options to subscribe for new Ordinary Shares at an exercise price equal to nominal value, to the independent non-executive chairman.

 

Exercise of Options

During H1 2024, the Company issued 19,800,000 new Ordinary Shares at an issue price of £0.0001 to certain non-executive directors/ex-directors following the exercise of options.

 

Review of Runruno Gold Mine Operations

Safety and health

The outstanding safety record at Runruno continues with in excess of 23 million man-hours with no lost time incidents occurring since the last lost time incident in December 2016. This is something the Company is incredibly proud of, and all employees and contractors are to be congratulated on this ongoing achievement.

 

Finance

Gold sales were 41,589 oz for revenues of US$91.1 million (H1 2023 46,186 oz for revenues of US$89.6 million) at an average price of US$2,190 per oz (H1 2023 US$1,939 per oz), resulting in positive free cash flow of US$46.4 million (H1 2023: US$41.9 million).

 

During H1 2024, the Group resolved all debt related disputes confirming that the Group is debt free. Total debt repayments made during H1 2024 were US$27.2 million (H1 2023: US$35.0 million).

 

Mining

Mining production of ore and waste was slightly down at 6.0Mt for H1 2024 (H1 2023: 6.2Mt). Total ore mined was slightly higher at 1.2Mt (H1 2023: 0.8Mt), at a lower grade of 1.37g/t (H1 2023: 1.59g/t).

 

Process plant

Stable operations were delivered during H1 2024, leading to gold production of 42,535 ounces (H1 2023: 45,533 ounces). Throughput for H1 2024 was on budget at 1.10Mt (H1 2023: 1.07Mt) with a lower head grade of 1.34g/t (H1 2023: 1.48g/t) resulting in slightly lower levels of production

 

Efforts to gain marginal gold recovery improvements continue with an excellent average overall gold recovery rate of 89.6% achieved (H1 2023: 89.8%).

 

Unplanned process plant downtime during H1 2024 did not materially interrupt production and consisted mainly of power interruptions, pump changeovers as well as repairs to the return discharge line ("RDL") and final tails line, conveyor belts, rollers and trommel panel screens.

 

Residual Storage Impoundment ("RSI")

The RSI is operating to design with an excellent environmental performance record. Stage 6 RSI lift was completed in H1 2024, and the dam water freeboard remained well within design limits.

 

Construction of the RSI final in-rock spillway continues, albeit slightly behind schedule. The day-to-day performance of the RSI, including the construction of the final in-rock spillway, is continuously monitored by an independent international consulting group.

 

Community & Government Relations

Productive relations with both the community and the Philippine government continue.

 

YMC Group Update

As noted above, the acquisition of the YMC Group was completed on 27 August 2024. The YMC Group holds a majority and controlling interest in a highly prospective exploration licence covering 16,200 hectares on Luzon, Philippines, approximately 200km north of the Company's Runruno mine, in the Cordillera region, which is a prolific gold belt in the Philippines, with proven mineral endowment, having produced over 40Moz of gold historically. The Company has undertaken initial geophysics and geochemistry activities over this project area (known as the Abra project) as a prelude to designing an exploration drill programme. It is expected that drilling of initial targets will commence in Q4 2024.

 

 

Darren Bowden, CEO of Metals Exploration, commented:

 

"The first half of 2024 has been transformational for the Company. Operationally Runruno has continued to perform strongly whilst the corporate actions taken will provide a platform for the future growth of the Company.

 

"In January the Company announced the acquisition the YMC Group, which completed in August, and which the Company believes holds some highly prospective exploration acreage; with our first drill campaign of this prospect expected in Q4 2024.  In addition to this, the strong performance at Runruno has enabled the Company to gain debt free status, resolving all debt disputes.  This is a very significant achievement considering the historical debt levels of the recent past.  This accomplishment will ensure that the Company has more than ample firepower to progress the Company's assets whilst continuing to seek further appropriate acquisition opportunities. The final piece of the jigsaw in the first half of the year, again approved in August, was the off-market buy-back of RHL's shareholding (to be completed by the end of September 2024); removing a number of corporate and operational restrictions that have previously been placed on the team and will ensure management has the opportunity to deliver the Company's growth strategy.

 

"The Company enters the second half of the year in an incredibly strong position, and is greatly looking forward to commencing initial drilling at YMC and providing further updates across all our operations."

 

 

 

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 2024

 

 

Notes

6 month period ended 30 June 2024 (unaudited)

 

6 month period ended

30 June 2023 (unaudited)

 

Year ended

31 December 2023 (audited)

 

 

US$

 

US$

 

US$

Continuing Operations

 






Revenue


91,085,493


89,551,687


166,682,876

Cost of sales


(73,353,868)


(53,677,981)


(129,422,805)








Gross profit

 

17,731,625


35,873,706

 

37,260,071

Administrative expenses


(5,598,788)


(4,758,815)


(8,086,753)








Operating profit

 

12,132,837

 

31,114,891

 

29,173,318

 







Impairment reversal

7

49,712,946


8,846,685


97,737,620

Net finance and other costs


(696,536)


(2,930,501)


(7,310,461)

Provision for loss on derivatives

 

(2,716,439)


(57,800)


(29,759)

Share based payment expense

 

(5,313)


(21,814)


(31,368)

Share of (loss)/ profit of associates


(4,645)


3,021


15,970








Profit before tax

 

58,422,850

 

36,954,482

 

119,555,320

 







Tax benefit/(expense)


63,576


4,141


(306,582)

Profit for the period attributable to equity holders of the parent

 

58,486,426

 

36,958,623

 

119,248,738

 







Other comprehensive income:

 






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







Exchange differences on translating foreign operations


(749,907)


(660,052)


(3,479,370)

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







Re-measurement of pension liabilities


-


-


222,909

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

 

57,736,519

 

36,298,571

 

115,992,277

 







Earnings per share:

 






Basic cents per share

Diluted cents per share

6

6

2.78

2.78

 

1.77

1.75

 

5.70

5.64


 

 

 

 

 



 

 

 

 

 


 

 

 

CONDENSED CONSOLIDATED INTERIM BALANCE SHEET

as at 30 June 2024

 

 

 

 

 

 

 

 

 

Notes

30 June 2024 (Unaudited)

 

30 June 2023 (Unaudited)

 

31 December 2023 (Audited)

 

 

 

US$

 

US$

 

US$

 

Non-current assets

 






 

Property, plant and equipment

7

155,968,686


84,395,285


140,597,506

 

Other intangible assets

 

-


467,179


7,664

 

Investment in associate companies

 

116,736


108,432


121,381

 

Trade and other receivables

 

19,807,825


12,616,843


16,720,701

 


 

175,893,247

 

97,587,739

 

157,447,252

 

Current assets

 






 

Inventories

 

20,795,474


19,471,994


18,695,048

 

Trade and other receivables

 

9,950,924


7,640,051


5,000,515

 

Cash and cash equivalents

 

6,578,641


490,207


339,997

 


 

37,325,039

 

27,602,252

 

24,035,560

 

Non-current liabilities

 






 

Trade and other payables

 

(70,850)


(1,247,303)


(70,850)

 

Retirement benefits obligations

 

(2,471,289)


(2,463,112)


(2,471,289)

 

Provision for loss on derivatives

 

(361,400)


-


-

 

Deferred tax liabilities

 

(481,120)


(574,038)


(544,697)

 

Provision for mine rehabilitation

 

(4,161,553)


(3,781,339)


(4,145,567)

 



(7,546,212)

 

(8,065,792)

 

(7,232,403)


Current liabilities

 






 

Trade and other payables


(11,284,917)


(13,210,650)


(16,063,666)

 

Loans - current portion

8

-


(49,301,270)


(23,896,298)

 

Provision for loss on derivatives

 

(2,709,923)


(382,920)


(357,546)

 



(13,994,840)

 

(62,894,840)

 

(40,317,510)


 







 

Net assets

 

191,677,234

 

54,229,359

 

133,932,899

 

 







 

Equity







 

Share capital

9

285,286


282,503


282,783

 

Share premium account

9

144,350


144,350


144,350

 

Acquisition of non-controlling interest reserve


(5,107,515)


(5,107,515)


(5,107,515)

 

Translation reserve


10,191,724


13,760,949


10,941,631

 

Re-measurement reserve


(249,740)


(472,649)


(249,740)

 

Other reserves


149,664


1,661,734


144,351

 

Profit and loss account


186,263,465


43,959,987


127,777,039

 








 

Equity attributable to equity holders of the parent

 

191,677,234

 

54,229,359

 

133,932,899

 



CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY for the six months ended 30 June 2024

 


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 2024

282,783

144,350

(5,107,515)

10,941,631

(249,740)

144,351

127,777,039

133,932,899










Exchange differences on translating foreign operations

-

-

-

(749,907)

-

-

-

(749,907)

Profit for the period

-

-

-

-

-

-

58,486,426

58,486,426










Total comprehensive (loss)/profit for the period

-

-

-

(749,907)

-

-

58,486,426

57,736,519

Share based payment

-

-

-

-

-

5,313

-

5,313

Equity issue

2,503

-

-

-

-

-

-

2,503


 

 

 

 

 

 

 

 

Balance at 30 June 2024

285,286

144,350

(5,107,515)

10,191,724

(249,740)

149,664

186,263,465

191,677,234

 

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 share-based payments expense.

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



 

 

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY for the six months ended 30 June 2023

 



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 2023

281,638

-

(5,107,515)

14,421,001

(472,649)

1,639,920

7,001,364

17,763,759










Exchange differences on translating foreign operations

-

-

-

(660,052)

-

-

-

(660,052)

Profit for the period

-

-

-

-

-

-

36,958,623

36,958,623










Total comprehensive (loss)/profit for the period

-

-

-

(660,052)

-

-

36,958,623

36,298,571

Share based payment

-

-

-

-

-

21,814

-

21,814

Equity issue

865

144,350

-

-

-

-

-

145,215


 

 

 

 

 

 

 

 

Balance at 30 June 2023

282,503

144,350

(5,107,515)

13,760,949

(472,649)

1,661,734

43,959,987

54,229,359

 

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 profit attributable to equity shareholders.



 

 

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY for the year ended 31 December 2023

 


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 2023

281,638

-

(472,649)

1,639,920

7,001,364

17,763,759










Exchange differences on translating foreign operations

-

-

-

(3,479,370)

-

-

-

(3,479,370)

Change in pension liability

-

-

-

-

222,909

-

-

222,909

Profit for the year

-

-

-

-

-

-

119,248,738

119,248,738

Total comprehensive profit/(loss) for the period

-

-

-

(3,479,370)

222,909

-

119,248,738

115,992,277

Share based payments

-

-

-

-

-

31,368

-

31,368

Share issue

1,145

144,350

-

-

-

-

-

145,495

Transfer of other reserve to profit and loss account

-

-

-

-

-

(1,526,937)

1,526,937

-










Balance at 31 December 2023

282,783

144,350

(5,107,515)

10,941,631

(249,740)

144,351

127,777,039

133,932,899

 

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.  Upon the expiry of the relevant warrants the cumulative fair value of warrants was transferred to profit and loss account.

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


 

 

CONDENSED CONSOLIDATED INTERIM CASH FLOW STATEMENT for the six months ended 30 June 2024

 

 

 

 

6 month period ended

30 June 2024 (unaudited)

 

6 month period ended

30 June 2023 (unaudited)

 

Year ended

31 December 2023 (audited)

 

Note

US$

 

US$

 

US$








 

Net cash arising from operating activities

 

8

 

36,988,492

 

 

39,838,746

 

74,561,379

 







Investing activities

 






Exploration expenses incurred


(636,382)


(449,477)


-

Purchase of property, plant and equipment


(2,869,853)


(4,687,652)


(10,250,030)

Net cash used in investing activities

 

(3,506,235)

 

(5,137,129)

 

(10,250,030)

 







Financing activities

 






Repayment of borrowings - principal


(23,896,298)


(32,855,626)


(61,430,747)

Repayment of borrowings - interest


(3,338,575)


(2,194,374)


(3,369,253)

Share issue


2,503


-


280

Net cash used in financing activities

 

(27,232,370)

 

(35,050,000)

 

(64,799,720)

 







Net increase/(decrease) in cash and cash equivalents


 

6,249,887


 

(348,383)


(488,371)

Cash and cash equivalents at beginning of period


339,997


861,069


861,069

Effects of exchange rate changes on cash and cash equivalents


 

(11,243)


 

(22,479)


(32,701)








Cash and cash equivalents at end of period

 

6,578,641

 

490,207

 

339,997

 



 

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 20 September 2024. 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 2024 to 30 June 2024 are unaudited. 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 2023 to 30 June 2023 and the audited financial year ended 31 December 2023.

 

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 2023, which were prepared under UK-adopted international financial accounting 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 2024.

 

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 2023 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.

 

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 to generate sufficient cash flows to enable the Group to settle its liabilities 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 20 September 2024. 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.             Risks and uncertainties

 

The Board continuously assesses and monitors the key risks of the business. The key risks that could affect the Group's medium term performance and the factors that mitigate those risks have not substantially changed from those set out in the Group's statutory accounts for the year ended 31 December 2023, a copy of which is available on the Company's website: https://metalsexploration.com/.

 

5.             Critical accounting estimates

 

The preparation of condensed consolidated 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 Group's statutory accounts for the year ended 31 December 2023. The nature and amounts of such estimates have not changed significantly during the interim period.


 

6.             Earnings per share

 

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


6 month period ended 30 June 2024

6 month period ended 30 June 2023

Year ended 31 December 2023


(unaudited)

(unaudited)

(audited)


US$

US$

US$

Earnings

 

 

 

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

 

 

58,486,426

 

 

36,958,623

119,248,738





Number of shares

 

 


Weighted average number of Ordinary Shares for the purpose of basic earnings per share

 

 

2,101,371,744

 

 

2,089,230,821

2,092,720,603





Number of dilutive shares under warrant/option

-

22,000,000

19,800,000

Weighted average number of Ordinary Shares for the purpose of diluted earnings per share

2,101,371,744

2,111,230,821

2,112,520,603









Basic earnings cents per share

2.78

1.77

5.70

Diluted earnings cents per share

2.78

1.75

5.64

 

7.           Impairment reversal

 

Property, plant and equipment ("PPE")

The Group considers that the entire Runruno project (encompassing capitalised property, plant and equipment, mining licence costs, deferred exploration expenditure and the provision for mine rehabilitation and decommissioning) comprises a single cash generating unit ("CGU") as all stages of the project are interdependent in terms of generating cash flow and do not have the capacity to generate separate and distinct cash flow streams.

 

The Group assesses the recoverable amount of the Runruno project CGU based on the value in use of the Runruno operations using cash flow projections over the remaining expected life of mine ("LOM") and at appropriate discount rates. Based on assumptions current as at 30 June 2024, in particular the ongoing relatively high gold prices and the increased productivity of the Runruno mine, the Group considered that the remaining balance of the 2018 impairment of PPE be reversed.

 

Accordingly, and in accordance with IAS 36 -- Impairment of Assets, an impairment credit has been raised in H1 2024 to increase the book value of the PPE by US$50 million. This US$50 million impairment reversal, combined with the US$100 million impairment reversal booked in the 2023 financial year, has fully eliminated the 2018 PPE impairment charge. A consequence of these impairment reversals is that the depreciation expense for H1 2024 has increased to US$37.5 million from US$11.8 million in H1 2023.

 

8.                     Reconciliation of profit after tax to net cash arising from operating activities

 

 


6 month period ended 30 June 2024

6 month period ended 30 June 2023

Year ended 31 December 2023

 


(unaudited)

(unaudited)

(audited)

 


US$

US$

US$

 

 

 

 

 

Profit after tax

58,486,426

36,958,623

119,248,738


 


 

Depreciation and amortisation

37,522,323

11,766,932

51,492,601

Provisions

2,713,777

57,800

29,759

Impairment (reversal)/charge

(49,712,946)

(8,846,685)

(97,318,816)

Share of losses/(profits) of associates

4,645

(3,021)

(15,970)

Share based payment expense

5,313

21,814

31,368

Shares issued in lieu of cash bonus

-

145,215

145,215

Finance expenses

1,401,810

3,370,915

10,732,133

Foreign exchange (gain)/loss

(694,061)

(440,247)

(2,642,249)

Exploration expenses

636,382

-

-

(Increase)/decrease in receivables

(9,074,493)

(4,478,977)

(10,048,701)

Decrease/(Increase) in inventories

(2,100,426)

1,743,493

820,441

Increase/(Decrease) in payables

(2,136,682)

(457,118)

2,061,476

 

 


 

Net cash arising from operating activities

 

36,988,492

 

39,838,746

74,561,379








 

9.                     Loans

 

Finalisation of the Group's senior and mezzanine debt facilities was protracted due to an inability to effect the elevation of the mezzanine debt to a fully secured status due to a dispute over the applicable interest rate and several disputed debt covenant breaches. During June 2024, the Group entered into full and final settlements with the lenders, including payment of the final principal/interest and agreed appropriate lender legal fees. These agreements confirmed that the Group is debt free. Subsequently all lender registered security has been released/withdrawn.

 

During H1 2024, total senior debt payments of US$2,817 (H1 2023: US$ Nil) were made. During the H1 2024, total mezzanine debt payments of US$27.2 million were made (H1 2023: US$35.0 million). Included in the US$27.2 million debt payments was $3.38 million loan interest.

 

In addition, post period-end, the Revolving Credit Facility was terminated as part of the RHL Buy Back and Production fee agreements, with no termination fee payable to either RHL or MTL Lux.

 

The Group's debt balances are shown below:

 


June 2024

June 2023

December 2023


US$

US$

US$

Total loans due within one year

-

49,301,270

23,896,298

 

 

10.                   Share capital

 

The Company issued 19,800,000 new Ordinary Shares at an issue price of £0.0001 following the exercise of options in April and June 2024.  In June 2023 the Company issued 7,147,850 new Ordinary Shares at an issue price of £0.01679 in lieu of paying a cash bonus.

 


June 2024

June 2023

December 2023

June 2024

June 2023

December 2023


Number of shares

Number of shares

Number of shares

US$

US$

US$

Ordinary shares of £0.0001 par value







Opening balance

2,098,144,271

2,088,796,421

2,088,796,421

282,783

281,638

281,638

Share issue in period

19,800,000

7,147,850

9,347,850

2,503

865

1,145

Closing balance

2,117,944,271

2,095,944,271

2,098,144,271

285,286

282,503

282,783

Share premium




 



Opening balance




144,350

-

-

Share issue in period




-

144,350

144,350

Closing balance




144,350

144,350

144,350

 

11.                   Contingent liabilities

 

The Group has no contingent liabilities identified as at 30 June 2024 (2023: US$ nil).

 

12.                   Subsequent events

 

There have been no subsequent disclosable events other than:

 

·      On 1 July 2024, the Company issued 6,600,000 options to acquire new Ordinary Shares to a director.

·      On 23 August 2024, at a general meeting, shareholders approved an off-market buy-back of Ordinary Shares owned by Runruno Holdings Limited. The Company has completed the acquisition of the first two tranches of RHL shares being 298,576,651 shares at a total cost of £14.93 million. A final tranche of 94,936,651 RHL shares is to be acquired before 30 September 2024 at a total cost of £4.7 million. The shares acquired from RHL will initially be held, at the directors' discretion, in treasury as non-voting shares; until either cancelled or re-issued.

·      On 23 August 2024, at a general meeting of shareholders the Company entered into a future production fee agreement as part of an overall settlement with Runruno Holdings Limited. As a result, the Revolving Credit Facility with the Group's lenders terminated with no termination fee payable.

·      Following shareholder approval at the 23 August 2024 general meeting, the Company completed the acquisition of the controlling interests in the Yamang Mining Corporation group by payment of US$1.6 million and the issue of 41 million options to acquire MTL Ordinary Shares at an exercise price of £0.0001.

·      On 29 August 2024 the Company issued 3,785,446 new Ordinary Shares at an issue price of £0.0353 in lieu of paying a cash bonus.

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
 
END
 
 
IR MZGZLVGZGDZM