RNS Number : 8994F
Eurasia Mining PLC
27 September 2024
 

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.

 

27 September 2024

 

Eurasia Mining plc

 

("Eurasia" or the "Company")

 

Interim Results for the six months ended 30 June 2024

 

Eurasia Mining Plc ("Eurasia" or the "Company"), 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 2024.

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

+44 (0)207 932 0418

 

SP Angel Corporate Finance LLP (Nomad and Broker)

Jeff Keating / David Hignell / Adam Cowl

+44 (0)20 3470 0470

 

Yellow Jersey PR (Financial PR) 

Charles Goodwin / Shivantha Thambirajah

+44 (0)207 932 0418

eurasia@yellowjerseypr.com

Chairman's Statement

 

Dear Shareholder,

 

As announced in the Annual Report, which was published earlier in this month of September, the first six months of 2024 reflected the maintenance of the Company's assets in good standing while continuing with our possible asset sale process.

 

At West Kytlim, low level work and maintenance required to comply with the regulations continued. The PGM concentrate inventory stockpile continues to be stored in a secure facility with some additional material generated from the required compliance. High grades of Osmium (c.2% Osmium metal content in the PGM concentrate) were discovered recently through several tests of 3 representative samples selected from over 6Koz of concentrate by internationally certified laboratory Anserteko. The discovery of high grades of Osmium leads to significant increase of the value of the existing PGM concentrate inventory, as well as the significant increase of the in-situ value of the reserves and resources of the West Kytlim mine and its revenue generation potential.

 

At Monchetundra, work in preparation for mine construction neared completion and the advancing of NKT tier-1 (according to Wardell Armstrong International, please refer to RNS dated 16 December 2021) brownfield asset continued.

 

Post period end, in September the Company entered into a trade finance facility to provide additional liquidity in addition to the stored metal concentrates. As described in the Company's announcement dated 6 September 2024, the facility will provide up to £2.5 million to the Company in tranches upon certain milestones being achieved, and is convertible by the lender at an average conversion price of 2.7 pence per share, being a premium to the current share price.

 

The Company continues to monitor the sanction regimes in the US, UK and EU to ensure ongoing compliance. The Company remains satisfied that its activities are not prohibited under the sanctions' rules.

 

Our strategy continues to focus primarily on the potential sale of the Company's assets in Russia, being the West Kytlim operating mine, the Monchetundra Project mining license, the NKT brownfield project and the entitlement to the Nyud brownfield project. The Company remains committed to this possible sale and, as ever, there can be no guarantee that Eurasia will enter into binding agreements regarding the sale process.

 

We are grateful to our shareholders for their continued support and I look forward to providing information regarding our forthcoming AGM.

 

Christian Schaffalitzky

Executive Chairman

Condensed consolidated statement of comprehensive income

for the six months ended 30 June 2024


Note

6 months to

12 months to

6 months to

 


30 June

31 December

30 June

 


2024

2023

2023

 


(unaudited)

(audited)

(unaudited)



 £

 £

 £






Sales

4

-

2,069,262

-

Cost of sales


-

(1,564,224)

-

Gross profit

 

-

505,038

-

 





Administrative costs


(885,970)

(1,185,490)

(1,298,464)

Investment income


2,958

55,159

53,184

Finance costs


(49,145)

(83,101)

(44,789)

Other gains

5

1,230,703

391,983

272,549

Other losses

5

(870,249)

(6,364,529)

(6,361,898)






(Loss)/profit before tax


(571,703)

(6,680,940)

(7,379,418)






Income tax expense                                                                                             


-

(2,001)

-






(Loss)/profit for the period

 

(571,703)

(6,682,941)

(7,379,418)

 





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


(134,419)

530,146

682,020

Items that will be reclassified subsequently to
profit and loss:

 




Parents share of foreign exchange differences on translation
of foreign operations


(264,735)

1,352,061

1,738,236






Other comprehensive (loss)/income for the period, net of tax

(399,154)

1,882,207

2,420,256

 





Total comprehensive (loss)/income for the period


(970,857)

(4,800,734)

 (4,959,162)

 





(Loss)/profit for the period attributable to:

 




Equity holders of the parent


(553,519)

(5,486,899)

(5,638,150)

Non-controlling interest


(18,184)

(1,196,042)

(1,741,268)



(571,703)

(6,682,941)

(7,379,418)

 





Total comprehensive (loss)/income for the period attributable to:

 




Equity holders of the parent


(818,254)

(4,134,838)

(3,899,914)

Non-controlling interest


(152,603)

(665,896)

(1,059,248)



(970,857)

(4,800,734)

(4,959,162)

 





Basic and diluted loss (pence per share)


(0.02)

(0.21)

(0.20)

 



 

Condensed consolidated statement of financial position

As at 30 June 2024

 

Note

At 30 June 

2024

At 31 December

2023

At 30 June 2023

 


(unaudited)

(audited)

(unaudited)



£

£

£

ASSETS

 







Property, plant and equipment

6

9,473,508

10,210,983

8,470,553

Assets in the course of construction


518,150

336,131

538,537

Intangible assets

7

3,436,107

3,148,382

2,748,361

Investment in financial assets


-

-

1,592,143



 

 

 

Total non-current assets


13,427,765

13,695,496

13,349,594

 








Inventories


4,127,939

2,305,108

3,687,482

Trade and other receivables

8

1,271,268

1,736,589

2,684,475

Other financial assets


67,304

63,610

89,485

Current tax assets


4,661

5,806

5,967

Cash and bank balances


215,922

1,318,065

405,875






Total current assets


5,687,094

5,429,178

6,873,284

 





Total assets


19,114,859

19,124,674

20,222,878

 





EQUITY

 







Issued capital

9

61,233,311

61,233,311

61,208,111

Reserves

10

4,284,135

4,548,870

5,330,971

Accumulated losses


(44,611,075)

(44,057,556)

(44,604,733)






Equity attributable to equity holders of the parent

 

20,906,371

21,724,625

21,934,349

Non-controlling interest


(4,220,047)

(4,067,444)

(4,460,796)






Total equity


16,686,324

17,657,181

17,473,553

 





LIABILITIES

 







Lease liabilities

12

6,142

24,966

147,592

Provisions

14

389,325

397,747

173,645






Total non-current liabilities


395,467

422,713

321,237

 








Borrowings

11

50,713

44,014

-

Lease liabilities

12

113,324

139,178

98,256

Trade and other payables

13

1,843,351

861,498

2,265,361

Current tax liabilities


-

90

-

Provisions

14

25,680

-

64,471






Total current liabilities


2,033,068

1,044,780

2,428,088



 

 

 

Total liabilities


2,428,535

1,467,493

2,749,325



 

 

 

Total equity and liabilities


19,114,859

19,124,674

20,222,878

Condensed statement of changes in equity

For the six months ended 30 June 2024 (unaudited)



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 2024

 

2,864,560

51,343,268

7,025,483

3,539,906

1,008,964

(44,057,556)

21,724,625

(4,067,444)

17,657,181

 











Transaction with owners


-

-

-

-

-

-

-

-

-

 











Loss for the period


-

-

-

-

-

(494,924)

(494,924)

(3,535)

(498,459)

 




















Exchange differences on translation
of foreign operations


-

-

-

-

(323,330)

-

(323,330)

(149,068)

(472,398)

Total comprehensive income

 

-

-

-

-

(323,330)

(494,924)

(818,254)

(152,603)

(970,857)


Balance at 30 June 2024

 

2,864,560

51,343,268

7,025,483

3,539,906

685,634

(44,552,480)

20,906,371

(4,220,047)

16,686,324

 



 

Condensed statement of changes in equity

For the six months ended 30 June 2023 (unaudited)

 

 











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)

 




















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 2024

 


6 months to 30 June

12 months to 31 December

6 months to 30 June

 


2024

2023

2023

 


(unaudited)

(audited)

(unaudited)



£

£

£

Cash flows from operating activities

 









Loss for the period


(571,703)

(6,682,941)

(7,379,418)

Adjustments for:





Depreciation and amortisation of non-current assets


1,929,115

1,139,921

497,628

Finance costs recognised in profit or loss


49,145

83,101

47,548

Investment revenue recognised in profit or loss


(2,958)

(55,159)

(53,184)

(Gain)/loss on disposal of investments


-

53,408

18,362

Impairment loss/(reversal) recognised on inventory


870,249

(391,983)

(272,549)

Rehabilitation cost recognised in profit or loss


(33,709)

104,158

(57,548)

Income tax expense recognised in profit or loss


-

2,001

-

Net foreign exchange (profit)/loss


(1,230,703)

6,311,121

6,343,536



1,009,436

563,627

(855,625)

Movements in working capital

 




(Increase)/decrease in inventories


(2,582,503)

1,372,033

(75,390)

Decrease/(increase) in trade and other receivables


526,726

840,011

(71,805)

Increase/(decrease) in trade and other payables


913,478

(987,299)

392,291

Cash (used in)/generated by operations


(132,863)

1,788,372

(610,529)

 





Income taxes paid


1,334

(2,965)

-

Net cash (used in)/generated by operating activities


(131,529)

1,785,407

(610,529)

 





Cash flows from investing activities

 




Proceeds from sale of investment securities


-

3,651,014

2,284,775

Interest received


-

382

-

loan provided to non-related party


-

(61,620)

(143,071)

Payments for property, plant and equipment


(887,525)

(3,519,254)

(1,210,627)

Payments for other intangible assets


(135,366)

(912,820)

(475,540)

Net cash (used in)/generated by investing activities


(1,022,891)

(842,297)

455,537

Cash flows from financing activities

 




Proceeds from issues of equity shares


-

46,200

21,000

Proceeds from borrowings


-

44,014

-

Repayment of lease liability


(49,631)

(116,905)

(41,167)

Interest paid


(12,825)

(49,887)

(33,681)

Net cash used in financing activities


(62,456)

(76,578)

(53,848)

 





Net (decrease)/increase in cash and cash equivalents


(1,216,876)

866,531

(208,840)

Effects of exchange rate changes on the balance of
cash held in foreign currencies


114,733

(558,374)

(395,193)






Cash and cash equivalents at the beginning of period


1,318,065

1,009,908

1,009,908






Cash and cash equivalents at the end of the period

 

215,922

1,318,065

405,875

 


 

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.

 

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 2023, prepared in accordance with UK-adopted International Accounting Standards, 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 UK-adopted 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 2024 have been prepared by applying the recognition and measurement provisions of the standards and the accounting policies adopted in the audited accounts for the year ended 31 December 2023.

 

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 2023.

 

4. Revenue



6 months to

12 months to

6 months to

 


30 June

31 December

30 June

 


2024

2023

2023

 


£

£

£

Sale of platinum and other metals


-

2,069,262

-






 


-

2,069,262

-

 

 

5. Other gains and losses



6 months to

12 months to

6 months to

 


30 June

31 December

30 June

 


2024

2023

2023

 


£

£

£




Reversal of loss on revaluation of stock to net realisable value


-

391,983

-

Reversal of loss on revaluation of stock to net realisable value


-

-

272,549

Net foreign exchange gain


1,230,703

-

-

 

 

1,230,703

391,983

272,549




Impairment of investments


-

-

(18,362)

Loss on revaluation of stock to net realisable value


(870,249)

-

-

Loss on debt settlement


-

(53,408)

-

Net foreign exchange loss


-

(6,311,121)

(6,343,536)

 

 

(870,249)

(6,364,529)

(6,361,898)






 


360,454

(5,972,546)

(6,089,349)

 

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.

Loss on revaluation of stock available at 30 June 2024 represents platinum concentrate ready for sale or refining, which was valued (i) using methodology set in the refining and sale and purchase agreement made with local refinery and (ii) exchange rate and metal prices at 30 June 2024.

 

6. Property, plant and equipment



30 June

31 December

30 June

 


2024

2023

2023

 


£

£

£

Net book value at the beginning of period


10,210,983

9,600,231

9,600,231

Additions


719,325

2,738,440

1,137,353

Transferred from assets under construction


2,305

991,394

90,499

Depreciation


(1,929,115)

(1,139,921)

(497,628)

Exchange differences


470,010

(1,979,161)

(1,859,902)






Net book value at the end of period


9,473,508

10,210,983

8,470,553


 

7. Intangible assets



30June

31December

30June

 


2024

2023

2023

 


£

£

£

Net book value at the beginning of period


3,148,382

2,859,368

2,859,368

Additions


135,366

912,820

475,540

Exchange differences


152,359

(623,806)

(586,547)






Net book value at the end of period


3,436,107

3,148,382

2,748,361

 

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

 


2024

2023

2023

 





 Trade receivables


                             -

             760,374

                          -

 Advances made


                  17,271

                          -

             677,536

 Prepayments


                  24,730

             126,330

               26,929

 VAT recoverable


                521,875

             343,425

          1,496,281

 Mining tax refund due


                408,462

             404,195

                          -

 Other receivables


                298,930

102,265

             483,729

 


 

 

 

 


1,271,268

1,736,589

2,684,475

 

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

 


2024

2023

2023

 








Number


2,864,559,995

2,864,559,995

 2,858,559,995

 Nominal value (£)


2,864,560

2,864,560

2,858,560






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











 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;

- 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

 Number of shares

 Share
capital

 Share
premium




£

£

Balance at 1 January 2024


2,864,559,995

2,864,560

51,343,268

 

 

 

 

 

 Balance at 30 June 2024

 

2,864,559,995

2,864,560

51,343,268

 



 

 

 Number of deferred shares

 Deferred share
capital





£


Balance at 1 January and 30 June 2021

 

143,377,203

7,025,483


 

10. Reserves



30June

31December

30June

 


2024

2023

2023

 


£

£

£

Capital redemption reserve


3,539,906

3,539,906

3,539,906

Foreign currency translation reserve


744,229

1,008,964

1,395,139

Equity-based payment reserve


-

-

395,926








4,284,135

4,548,870

5,330,971

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. Borrowings



30 June

31 December

30 June

 


2024

2023

2023

 


£

£

£

Current

 




Unsecured loan


50,713

44,014

-


 




 


50,713

44,014

-

 

In December 2023, the Group entered into unsecured loan facility to borrow RUB 5 million (GBP 44,014 at the rate exchange rate as at 31 December 2023) at 20% per annum: Russian central bank rate of 16% at the date of the borrowing (19% at the date of this report) plus 4% margin at the date of the borrowing (1% at the date of this report). The loan is repayable by 31 December 2024. No borrowing costs were capitalised in 2023 and 2024.

 

12. Lease liabilities

The Group has the following leases in place:

i) Leases of mining 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 obligations under finance leases are fixed at respective contract dates ranging from 21.9% to 23.5% per annum. For comparison Russian central bank rate is 19% at the date of this report.

ii) Rent of offices and other properties. The average lease term is three years expiring in 2025. There is no option to purchase properties at the end of rental period.

Interest rates underlying obligations under finance leases are fixed at respective contract dates at 10.27% per annum.

Minimum lease payments

 

30 June

31 December

30 June

 


2024

2023

2023

 


£

£

£

Less than one year


118,706

157,445

179,418

Between one and five years


6,320

25,987

103,334

More than five years


-

-

-



125,026

183,432

282,753

Less future finance charges


(5,560)

(19,288)

(36,905)

 

Present value of minimum lease payments


119,466

164,144

245,848

 





Present value of minimum lease payments

 

30June

31December

30June

 


2024

2023

2023

 


£

£

£

Less than one year


113,324

139,178

147,592

Between one and five years


6,142

24,966

98,256

More than five years


-

-

-

 

Present value of minimum lease payments


119,466

164,144

245,848

 

13. Trade and other payables



30June

31December

30June

 


2024

2023

2023

 





 Trade payables


1,111,521

552,599

802,525

 Accruals


239,346

170,316

1,326,107

 Social security and other taxes


226,368

33,832

45,523

 Other payables


266,116

104,751

91,206

 


 

 

 

 


1,843,351

861,498

2,265,361

 

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

 

14. Provision



30 June

31 December

30 June

 


2024

2023

2023

 


£

£

£

Long term provision:





Environment rehabilitation


389,325

397,747

173,645

Short term provision:





Environment rehabilitation


25,680

-

64,471








415,005

397,747

238,116

 





Movement in provision

 

 Six month to

 12 month to

 Six month to

 


30 June

31 December

30 June

 


2024

2023

2023

 


£

£

£

At 1 January


397,747

342,696

342,696

Utilised in the period


-

104,158

-

Reduction resulting from re-measurement or settlement without cost


(33,709)

-

(57,548)

Unwinding of discount and effect of changes in the discount rate


                  31,988

33,214

13,867

Exchange difference


18,979

(82,321)

(60,899)

 

 

 

 

 

At the end of the period

 

415,005

397,747

238,116

 

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 14.66% to 16.67% (2023: 12.01% to 12.61%) 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 2024 will be incurred within 2025-2040.

15. Commitments

During 2020 the Group entered into several lease agreements to lease mining plant and equipment. As at 30 June 2024 the average lease term was one year.

During 2023 the Group entered into several rent agreements to rent office and other properties. As at 30 June 2024 the average rental term was 1.5 year.

Present value of minimum lease payments £119,466 (30 June 2023: £245,848).

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IR SEFFUMELSEIU