Horizonte Minerals Plc, (AIM: HZM, TSX: HZM) (‘Horizonte’
or ‘the Company’) the nickel development company focused
in Brazil, announces its unaudited financial results for the six
months ended 30 June 2018 and the Management Discussion and
Analysis for the same period.
Both of the above have been posted on the
Company's website at www.horizonteminerals.com and are also
available on SEDAR at www.sedar.com.
Chairman’s Statement The first half of 2018 has
been an exciting period for the Company, with the feasibility study
on our flagship Araguaia ferronickel project now nearing
completion. In parallel, we have made strong progress on several
infrastructure related workstreams at the project, including energy
and water.
At the start of the year, we announced
completion of the trial excavation programme at Araguaia, marking
another key development milestone for the project. The programme
involved the removal of approximately 20,000 tonnes of ore,
generating real in-situ data allowing us to confirm the mining
technique, slope stability, grade profiles, dewatering requirement
with additional work on ore handling which has allowed the primary
crushing design to be finalised.
Based on the positive results from the trial
excavation programme, the 43-101 Mineral Reserve Estimate is being
updated with the objective of converting a portion of the current
reserve from the Probable Category to Proven.
In April we were granted the definitive water
permit for industrial water consumption by the Brazilian Pará State
Environmental Agency ('SEMAS'). The water permit, granted to
Horizonte's wholly owned subsidiary, Araguaia Níquel Metais Ltda.,
is yet another key permit and brings the Company closer to its
objective of being 'construction-ready', by the end of 2018.
More recently we completed the detailed aero
survey covering the route of the power line into the project,
providing high resolution digital topography and mapping of the
power line route and detailed positioning for the transmission line
pylons.
This information will be used by SM&A
Servicos Eletricos to undertake design engineering for the 230kV
transmission line, as well as for supporting structures including
transformer capacity and any engineered structures associated with
the supply.
We have also awarded contracts to cover the
engineering design and environmental permitting for the powerline
and substation infrastructure for the Araguaia project.
I am pleased to report that as we continue to
achieve these significant milestones, nickel has continued its
strong performance this year rising to US$14,823 per tonne by the
end of June, up 18% since the start of the year1. Global demand for
nickel has been reported to be increasing by 7.3% this year, while
supply rises 6.8 % to 2.210 million tonnes2. Analysts in the
sector have also stated this year that they expect the global
nickel market deficit to widen to 88,000 tonnes, from 72,000 tonnes
in 2017.
What is also key for the Company is that long
term analyst forecasts are pricing nickel above the current levels.
These forecasts are being driven by both traditional uses for
nickel in stainless steel, as well as the new drivers; super-alloys
and the battery sectors. This bodes well for Horizonte as we look
to benefit from the growth in both end markets, through the
development of the advanced stage Araguaia ferronickel project and
the Vermelho nickel-cobalt project, which we acquired in
December.
Since acquiring Vermelho we have been able to
announce an initial NI 43-101 Mineral Resource Estimate for the
project, located approximately 80 kilometres north west of Araguaia
North.
The Vermelho Nickel-Cobalt Mineral Resources, in
the Measured and Indicated category, are 167.8 million tonnes
grading 1.01% nickel and 0.06% cobalt (at 0.9% nickel equivalent
cut off for 1.678Mt contained nickel and 1.0Mt contained
cobalt).
Having cobalt exposure also adds an additional commodity stream
in light of the growing interest in both cobalt and nickel for use
in the Electric Vehicle (EV) battery market.
The next phase of work at Vermelho will focus on advancing the
work that Vale completed as part of their Feasibility Study, taking
the mixed hydroxide product (MHP) and upgrading to nickel and
cobalt sulphate suitable for use in the evolving EV battery
market.
To conclude, this positive progress on our
projects has set a strong base for an important second half year
for Horizonte, where we will outline our plans to bring into
production one of the next major nickel mines at a time when there
are a number of factors driving global demand for nickel and
cobalt.
David HallChairman31 July 2018
1 Source: Bloomberg2 Source: Japan’s Sumitomo Metal,
https://www.reuters.com/article/sumitomo-mtl-min-nickel/japans-sumitomo-metal-says-global-nickel-deficit-to-widen-this-year-idUSL4N1TG3WV
Condensed Consolidated Interim Financial
Statements for the six months ended 30 June 2018
Condensed consolidated statement of comprehensive
income
|
|
6 months ended30
June |
3 months ended30
June |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
Unaudited |
Unaudited |
Unaudited |
Unaudited |
|
Notes |
£ |
£ |
£ |
£ |
Continuing operations |
|
|
|
|
|
Revenue |
|
- |
|
- |
|
- |
|
- |
|
Cost of sales |
|
- |
|
- |
|
- |
|
- |
|
|
|
|
|
|
|
Gross profit |
|
- |
|
- |
|
- |
|
- |
|
|
|
|
|
|
|
Administrative expenses |
|
(785,348 |
) |
(654,548 |
) |
(494,155 |
) |
(376,487 |
) |
Charge for
share options granted |
|
(294,706 |
) |
(78,810 |
) |
(181,031 |
) |
(28,424 |
) |
Change in
value of contingent consideration |
|
(194,474 |
) |
153,095 |
|
(294,549 |
) |
120,885 |
|
Gain/(Loss)
on foreign exchange |
|
92,798 |
|
(245,553 |
) |
137,972 |
|
(141,613 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
(1,181,730 |
) |
(825,816 |
) |
(831,763 |
) |
(425,639 |
) |
|
|
|
|
|
|
Finance
income |
|
21,875 |
|
7,448 |
|
16,249 |
|
6,825 |
|
Finance costs |
|
(140,322 |
) |
(116,944 |
) |
(68,703 |
) |
(58,758 |
) |
|
|
|
|
|
|
Loss before taxation |
|
(1,300,177 |
) |
(935,312 |
) |
(884,217 |
) |
(477,572 |
) |
|
|
|
|
|
|
Taxation |
|
- |
|
- |
|
- |
|
- |
|
|
|
|
|
|
|
Loss for the year from continuing
operations |
|
(1,300,177 |
) |
(935,312 |
) |
(884,217 |
) |
(477,572 |
) |
|
|
|
|
|
|
Other comprehensive income |
|
|
|
|
|
Items that may be reclassified subsequently to profit or
lossChange in value of available for sale financial
assets |
|
|
|
|
|
Currency translation differences on translating foreign
operations |
|
(4,055,213 |
) |
(2,196,597 |
) |
(2,948,200 |
) |
(2,499,362 |
) |
Other comprehensive
income for the period, net of tax |
|
(4,055,213 |
) |
(2,196,597 |
) |
(2,948,200 |
) |
(2,499,362 |
) |
Total comprehensive income for the period |
|
|
|
|
|
attributable to equity holders of the
Company |
|
(5,355,390 |
) |
(3,131,909 |
) |
(3,832,417 |
) |
(2,976,934 |
) |
|
|
|
|
|
|
Earnings per share from continuing operations attributable
to the equity holders of the Company |
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted (pence per share) |
9 |
(0.091 |
) |
(0.080 |
) |
(0.062 |
) |
(0.041 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Condensed consolidated statement of financial
position
|
|
|
|
|
|
|
30 June 2018 |
|
31 December2017 |
|
|
|
|
|
|
|
|
Unaudited |
|
Audited |
|
|
|
|
|
|
|
Notes |
£ |
|
£ |
|
Assets |
|
|
|
|
|
|
|
|
Non-current assets |
|
|
|
|
|
|
|
|
Intangible
assets |
|
|
|
|
|
6 |
32,647,918 |
|
34,308,278 |
|
Property,
plant & equipment |
|
|
|
|
|
|
1,471 |
|
2,051 |
|
|
|
|
|
|
|
|
32,649,390 |
|
34,310,329 |
|
Current assets |
|
|
|
|
|
|
|
|
Trade and
other receivables |
|
|
|
|
|
|
181,805 |
|
153,105 |
|
Cash and cash equivalents |
|
|
|
|
|
|
8,969,672 |
|
9,403,825 |
|
|
|
|
|
|
|
|
9,151,477 |
|
9,556,930 |
|
Total assets |
|
|
|
|
|
|
41,800,867 |
|
43,867,259 |
|
Equity and liabilities |
|
|
|
|
|
|
|
|
Equity attributable to owners of the parent |
|
|
|
|
|
|
|
|
Issued
capital |
|
|
|
|
|
7 |
14,325,218 |
|
13,719,343 |
|
Share
premium |
|
|
|
|
|
7 |
41,664,018 |
|
40,422,258 |
|
Other
reserves |
|
|
|
|
|
|
(3,067,198 |
) |
988,015 |
|
Accumulated losses |
|
|
|
|
|
|
(16,893,272 |
) |
(15,887,801 |
) |
Total equity |
|
|
|
|
|
|
36,028,766 |
|
39,241,815 |
|
Liabilities |
|
|
|
|
|
|
|
|
Non-current liabilities |
|
|
|
|
|
|
|
|
Contingent
consideration |
|
|
|
|
|
|
5,115,371 |
|
3,635,955 |
|
Deferred tax liabilities |
|
|
|
|
|
|
221,435 |
|
253,205 |
|
|
|
|
|
|
|
|
5,336,806 |
|
3,889,160 |
|
Current liabilities |
|
|
|
|
|
|
|
|
Trade and other payables |
|
|
|
|
|
|
435,295 |
|
736,284 |
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
|
|
|
|
5,772,101 |
|
4,625,444 |
|
Total equity and liabilities |
|
|
|
|
|
|
41,800,867 |
|
43,867,259 |
|
|
|
|
|
|
|
|
|
|
Condensed statement of changes in shareholders’
equity
|
|
|
|
|
Attributable to the owners of the
parent |
|
|
|
|
|
Sharecapital£ |
Share premium£ |
|
Accumulatedlosses£ |
|
Otherreserves£ |
|
Total£ |
|
|
|
|
|
|
|
|
|
|
|
As at 1 January 2017 |
|
|
|
|
11,719,343 |
35,767,344 |
|
(14,899,297 |
) |
4,467,064 |
|
37,054,454 |
|
Comprehensive income |
|
|
|
|
|
|
|
|
|
Loss for
the period |
|
|
|
|
- |
- |
|
(935,312 |
) |
- |
|
(935,312 |
) |
Other comprehensive income |
|
|
|
|
|
|
|
|
|
Currency translation differences |
|
|
|
|
- |
- |
|
- |
|
(2,196,597 |
) |
(2,196,597 |
) |
Total comprehensive income |
|
|
|
|
- |
- |
|
(935,312 |
) |
(2,196,597 |
) |
(3,131,909 |
) |
Transactions with owners |
|
|
|
|
|
|
|
|
|
Share based payments |
|
|
|
|
- |
- |
|
78,810 |
|
- |
|
78,810 |
|
Share issues costs |
|
|
|
|
- |
(19,432 |
) |
- |
|
- |
|
(19,432 |
) |
Total transactions with owners |
|
|
|
|
- |
(19,432 |
) |
78,810 |
|
- |
|
59,378 |
|
As at 30 June 2017 (unaudited) |
|
|
|
|
11,719,343 |
35,747,912 |
|
(15,755,799 |
) |
2,270,467 |
|
33,981,923 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to the owners of the
parent |
|
|
|
|
|
Sharecapital£ |
Share premium£ |
|
Accumulatedlosses£ |
|
Otherreserves£ |
|
Total£ |
|
|
|
|
|
|
|
|
|
|
|
As at 1 January 2018 |
|
|
|
|
13,719,343 |
40,422,258 |
|
(15,887,801 |
) |
988,015 |
|
39,241,815 |
|
Comprehensive income |
|
|
|
|
|
|
|
|
|
Loss for
the period |
|
|
|
|
- |
- |
|
(1,300,177 |
) |
- |
|
(1,300,177 |
) |
Other comprehensive income |
|
|
|
|
|
|
|
|
|
Currency translation differences |
|
|
|
|
- |
- |
|
- |
|
(4,055,213 |
) |
(4,055,213 |
) |
Total comprehensive income |
|
|
|
|
- |
- |
|
(1,300,177 |
) |
(4,055,213 |
) |
(5,355,390 |
) |
Transactions with owners |
|
|
|
|
|
|
|
|
|
Share based
payments |
|
|
|
|
- |
- |
|
294,706 |
|
- |
|
294,706 |
|
Issue of
Shares |
|
|
|
|
605,875 |
1,451,724 |
|
- |
|
- |
|
2,057,599 |
|
Share issue costs |
|
|
|
|
|
(209,964 |
) |
- |
|
- |
|
(209,964 |
) |
Total transactions with owners |
|
|
|
|
605,875 |
1,241,760 |
|
294,706 |
|
- |
|
2,142,341 |
|
As at 30 June 2018 (unaudited) |
|
|
|
|
14,325,218 |
41,664,018 |
|
(16,893,272 |
) |
(3,067,198 |
) |
36,028,766 |
|
Condensed Consolidated Statement of Cash
Flows
|
|
6 months ended30
June |
3 months ended30
June |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
Unaudited |
Unaudited |
Unaudited |
Unaudited |
|
|
£ |
£ |
£ |
£ |
Cash flows from operating
activities |
|
|
|
|
|
Loss before
taxation |
|
(1,300,177 |
) |
(935,312 |
) |
(884,217 |
) |
(477,572 |
) |
Interest
income |
|
(21,875 |
) |
(7,448 |
) |
(16,249 |
) |
(6,825 |
) |
Finance
costs |
|
140,322 |
|
116,944 |
|
68,703 |
|
58,758 |
|
Exchange
differences |
|
(92,798 |
) |
245,553 |
|
(137,972 |
) |
141,613 |
|
Employee
share options charge |
|
294,706 |
|
78,810 |
|
181,031 |
|
28,424 |
|
Change in
fair value of contingent consideration |
|
194,474 |
|
(153,095 |
) |
294,549 |
|
(120,885 |
) |
Depreciation |
|
- |
|
234 |
|
- |
|
75 |
|
Operating loss before changes in working
capital |
|
(785,348 |
) |
(654,314 |
) |
(494,155 |
) |
(376,412 |
) |
Decrease/(increase) in trade and other receivables |
|
(42,799 |
) |
(793 |
) |
8,706 |
|
12,800 |
|
(Decrease)/increase in trade and other payables |
|
(297,071 |
) |
(252,149 |
) |
(19,078 |
) |
24,812 |
|
Net cash outflow from operating
activities |
|
(1,125,218 |
) |
(907,256 |
) |
(504,527 |
) |
(338,800 |
) |
Cash flows from investing activities |
|
|
|
|
|
Purchase of
intangible assets |
|
(1,285,340 |
) |
(2,497,924 |
) |
(661,440 |
) |
(1,664,272 |
) |
Proceeds
from sale of property, plant and equipment |
|
- |
|
- |
|
- |
|
- |
|
Interest received |
|
21,875 |
|
7,448 |
|
16,249 |
|
6,825 |
|
Net cash used in investing
activities |
|
(1,263,465 |
) |
(2,490,476 |
) |
(645,191 |
) |
(1,657,447 |
) |
Cash flows from financing activities |
|
|
|
|
|
Issue of
shares |
|
2,057,599 |
|
- |
|
- |
|
- |
|
Share issue costs |
|
(209,965 |
) |
(19,432 |
) |
- |
|
- |
|
Net cash used in financing
activities |
|
1,847,634 |
|
(19,432 |
) |
- |
|
- |
|
Net
decrease in cash and cash equivalents |
|
(541,049 |
) |
(3,417,164 |
) |
(1,149,719 |
) |
(1,996,247 |
) |
Cash and
cash equivalents at beginning of period |
|
9,403,825 |
|
9,317,781 |
|
9,971,253 |
|
7,792,924 |
|
Exchange gain/(loss) on cash and cash equivalents |
|
106,896 |
|
(245,553 |
) |
148,138 |
|
(141,613 |
) |
Cash and cash equivalents at end of the
period |
|
8,969,672 |
|
5,655,064 |
|
8,969,672 |
|
5,655,064 |
|
Notes to the Financial Statements
1. General information
The principal activity of the Company and its subsidiaries
(together ‘the Group’) is the exploration and development of
precious and base metals. There is no seasonality or cyclicality of
the Group’s operations.
The Company’s shares are listed on the Alternative Investment
Market of the London Stock Exchange (AIM) and on the Toronto Stock
Exchange (TSX). The Company is incorporated and domiciled in the
United Kingdom. The address of its registered office is Rex House,
4-12 Regent Street, London SW1Y 4RG.
2. Basis of
preparation
The condensed consolidated interim financial statements have
been prepared using accounting policies consistent with
International Financial Reporting Standards and in accordance with
International Accounting Standard 34 Interim Financial Reporting.
The condensed interim financial statements should be read in
conjunction with the annual financial statements for the year ended
31 December 2017, which have been prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by
the European Union.
The condensed consolidated interim financial statements set out
above do not constitute statutory accounts within the meaning of
the Companies Act 2006. They have been prepared on a going concern
basis in accordance with the recognition and measurement criteria
of International Financial Reporting Standards (IFRS) as adopted by
the European Union. Statutory financial statements for the year
ended 31 December 2017 were approved by the Board of Directors on
26 March 2018 and delivered to the Registrar of Companies. The
report of the auditors on those financial statements was
unqualified.
The condensed consolidated interim financial statements of the
Company have not been audited or reviewed by the Company’s auditor,
BDO LLP.
Going concern
The Directors, having made appropriate enquiries, consider that
adequate resources exist for the Group to continue in operational
existence for the foreseeable future and that, therefore, it is
appropriate to adopt the going concern basis in preparing the
condensed consolidated interim financial statements for the period
ended 30 June 2018.
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 2016 Annual
Report and Financial Statements, a copy of which is available on
the Group’s website: www.horizonteminerals.com and on Sedar:
www.sedar.com The key financial risks are liquidity risk,
foreign exchange risk, credit risk, price risk and interest rate
risk.
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 and
disclosure of contingent assets and liabilities at the end of the
reporting period. Significant items subject to such estimates are
set out in note 4 of the Group’s 2017 Annual Report and Financial
Statements. The nature and amounts of such estimates have not
changed significantly during the interim period.
3. Significant accounting policies
The condensed consolidated interim financial statements have
been prepared under the historical cost convention as modified by
the revaluation of certain of the subsidiaries’ assets and
liabilities to fair value for consolidation purposes.
The same accounting policies, presentation and methods of
computation have been followed in these condensed consolidated
interim financial statements as were applied in the preparation of
the Group’s Financial Statements for the year ended 31 December
2017.
4. Segmental reporting
The Group operates principally in the UK and
Brazil, with operations managed on a project by project basis
within each geographical area. Activities in the UK are mainly
administrative in nature whilst the activities in Brazil relate to
exploration and evaluation work. The reports used by the chief
operating decision maker are based on these geographical
segments.
2018 |
|
|
|
|
|
UK |
|
Brazil |
|
Total |
|
|
|
|
|
|
|
6 months ended30 June 2018£ |
|
6 months ended30 June 2018£ |
|
6 months ended30 June 2018£ |
|
Revenue |
|
|
|
|
|
- |
|
- |
|
- |
|
Administrative expenses |
|
|
|
|
|
(585,100 |
) |
(190,248 |
) |
(785,348 |
) |
Profit on foreign exchange |
|
|
|
|
|
134,070 |
|
(41,272 |
) |
92,798 |
|
(Loss) from operations per reportable segment |
|
|
|
|
|
(461,030 |
) |
(231,520 |
) |
(692,550 |
) |
Inter segment revenues |
|
|
|
|
|
- |
|
- |
|
- |
|
Depreciation charges |
|
|
|
|
|
- |
|
- |
|
- |
|
Additions
and foreign exchange movements to non-current assets |
|
|
|
|
|
- |
|
(1,319,706 |
) |
(1,319,706 |
) |
Reportable
segment assets |
|
|
|
|
|
8,933,086 |
|
32,867,781 |
|
41,800,867 |
|
Reportable
segment liabilities |
|
|
|
|
|
5,209,572 |
|
562,529 |
|
5,772,101 |
|
|
|
|
|
|
|
|
|
|
2017 |
|
|
|
|
|
UK |
|
Brazil |
|
Total |
|
|
|
|
|
|
|
6 months ended30 June 2017£(Restated) |
|
6 months ended30 June 2017£(Restated) |
|
6 months ended30 June 2017£(Restated) |
|
Revenue |
|
|
|
|
|
- |
|
- |
|
- |
|
Administrative expenses |
|
|
|
|
|
(424,914 |
) |
(229,634 |
) |
(654,548 |
) |
(Loss) on foreign exchange |
|
|
|
|
|
(224,641 |
) |
(20,912 |
) |
(245,553 |
) |
(Loss) from operations per reportable
segment |
|
|
|
|
|
(649,555 |
) |
(250,546 |
) |
(906,101 |
) |
Inter segment revenues |
|
|
|
|
|
- |
|
- |
|
- |
|
Depreciation charges |
|
|
|
|
|
(234 |
) |
- |
|
(234 |
) |
Additions
and foreign exchange movements to non-current assets |
|
|
|
|
|
- |
|
519,276 |
|
519,276 |
|
Reportable
segment assets |
|
|
|
|
|
5,631,052 |
|
32,578,490 |
|
38,209,543 |
) |
Reportable
segment liabilities |
|
|
|
|
|
3,623,391 |
|
604,229 |
|
4,227,620 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2018 |
|
|
UK |
|
Brazil |
|
Total |
|
|
|
|
3 months ended30 June 2018 |
|
3 months ended30 June 2018 |
|
3 months ended30 June 2018 |
|
|
|
|
£ |
|
£ |
|
£ |
|
Revenue |
|
|
- |
|
- |
|
- |
|
Administrative expenses |
|
|
(419,003 |
) |
(75,152 |
) |
(494,155 |
) |
Profit on
foreign exchange |
|
|
170,232 |
|
(32,260 |
) |
137,972 |
|
(Loss) from operations per |
|
|
(248,771 |
) |
(107,412 |
) |
(356,183 |
) |
reportable segment |
|
|
|
|
|
Inter
segment revenues |
|
|
- |
|
- |
|
- |
|
Depreciation charges |
|
|
- |
|
- |
|
- |
|
Additions
and foreign exchange movements to non-current assets |
|
|
- |
|
(1,712,480 |
) |
(1,712,480 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
2017 |
|
|
|
UK |
|
Brazil |
|
Total |
|
|
|
|
|
3 months ended30 June 2017 |
|
3 months ended30 June 2017 |
|
3 months ended30 June 2017 |
|
|
|
|
|
£(Restated) |
|
£(Restated) |
|
£(Restated) |
|
Revenue |
|
|
|
- |
|
- |
|
- |
|
Administrative expenses |
|
|
|
(272,223 |
) |
(104,264 |
) |
(376,487 |
) |
(Loss) on
foreign exchange |
|
|
|
(121,113 |
) |
(20,501 |
) |
(141,613 |
) |
(Loss) from operations per |
|
|
|
(393,336 |
) |
(124,765 |
) |
(518,100 |
) |
reportable segment |
|
|
|
|
|
|
Inter
segment revenues |
|
|
|
- |
|
- |
|
|
Depreciation charges |
|
|
|
(75 |
) |
- |
|
(75 |
) |
Additions
and foreign exchange movements to non-current assets |
|
|
|
- |
|
(648,305 |
) |
(648,305 |
) |
|
|
|
|
|
|
|
A reconciliation of adjusted loss from operations per reportable
segment to loss before tax is provided as follows:
|
|
|
|
6 months ended 30 June 2018 |
|
6 months ended 30 June 2017 |
|
3 months ended30 June 2018 |
|
3 months ended30 June 2017 |
|
|
|
|
|
£ |
|
£ |
|
£ |
|
£ |
|
Loss from
operations per reportable segment |
|
|
|
(692,550 |
) |
(900,101 |
) |
(356,183 |
) |
(518,100 |
) |
– Change in
fair value of contingent consideration |
|
|
|
(194,474 |
) |
153,095 |
|
(294,549 |
) |
120,885 |
|
– Charge
for share options granted |
|
|
|
(294,706 |
) |
(78,810 |
) |
(181,031 |
) |
(28,424 |
) |
– Finance
income |
|
|
|
21,875 |
|
7,448 |
|
16,249 |
|
6,825 |
|
– Finance
costs |
|
|
|
(140,322 |
) |
(116,944 |
) |
(68,703 |
) |
(58,758 |
) |
Loss for the period from continuing operations |
|
|
|
(1,300,177 |
) |
(955,312 |
) |
(884,217 |
) |
(477,572 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5. Change in Fair Value of Contingent
Consideration
Contingent Consideration payable to Xstrata Brasil Mineração
Ltda.
The contingent consideration payable to Xstrata Brasil Mineração
Ltda has a carrying value of £3,844,193 at 30 June 2018 (30 June
2017: £3,246,242). It comprises two elements: US$1,000,000 due
after the date of issuance of a joint feasibility study for the
combined Enlarged Project areas and to be satisfied by shares or
cash, together with US$5,000,000 consideration in cash as at the
date of first commercial production from any of the resource areas
within the Enlarged Project area. The key assumptions underlying
the treatment of the contingent consideration the US$5,000,000 are
as per those applied to the contingent consideration payable to the
former owners of Teck Cominco Brasil S.A.
As at 30 June 2018, there was a finance expense
of £97,826 (2017: £112,464) recognised in finance costs within the
Statement of Comprehensive Income in respect of this contingent
consideration arrangement, as the discount applied to the
contingent consideration at the date of acquisition was
unwound.
The change in the fair value of contingent
consideration payable to Xstrata Brasil Mineração Ltda generated a
credit to profit or loss of £112,928 for the six months ended 30
June 2018 (30 June 2017: £174,259) due to changes in the functional
currency in which the liability is payable.
6. Intangible assets
Intangible assets comprise exploration and
evaluation costs and goodwill. Exploration and evaluation costs
comprise internally generated and acquired assets.
Group |
|
|
|
|
|
|
Explorationand |
|
|
|
|
|
|
Goodwill |
|
Exploration licences |
|
evaluationcosts |
|
Total |
|
|
|
|
£ |
|
£ |
|
£ |
|
£ |
|
Cost |
|
|
|
|
|
|
At 1
January 2018 |
|
|
251,063 |
|
5,165,529 |
|
28,891,686 |
|
34,308,278 |
|
Additions |
|
|
- |
|
1,441,621, |
|
1,281,761 |
|
2,426,382 |
|
Exchange
rate movements |
|
|
(31,501 |
) |
(442,142 |
) |
(3,613,099 |
) |
(4,086,742 |
) |
Net book amount at 30 June 2018 |
|
|
219,562 |
|
5,868,008 |
|
26,560,348 |
|
32,647,918 |
|
7. Share Capital and Share Premium
Issued and fully paid |
Number of shares |
Ordinaryshares £ |
Sharepremium £ |
Total £ |
At 1 January 2018 |
1,371,934,300 |
13,719,343 |
40,422,258 |
54,141,601 |
At 30 June 2018 |
1,432,521,800 |
14,325,218 |
41,664,018 |
55,989,236 |
8. Dividends
No dividend has been declared or paid by the Company during the
six months ended 30 June 2018 (2017: nil).
9. Earnings per share
The calculation of the basic loss per share of
0.091 pence for the 6 months ended 30 June 2018 (30 June 2017 loss
per share: 0.080 pence) is based on the loss attributable to the
equity holders of the Company of £ (1,300,177) for the six month
period ended 30 June 2018 (30 June 2017: £(935,312)) divided by the
weighted average number of shares in issue during the period of
1,429,509,162 (weighted average number of shares for the 6 months
ended 30 June 2017: 1,171,934,300).
The calculation of the basic loss per share of
0.062 pence for the 3 months ended 30 June 2018 (30 June 2017 loss
per share: 0.041 pence) is based on the loss attributable to the
equity holders of the Company of £ (884,217) for the three month
period ended 30 June 2018 (3 months ended 30 June 2017: (477,572)
divided by the weighted average number of shares in issue during
the period of 1,432,521,800 (weighted average number of shares for
the 3 months ended 30 June 2017: 1,171,934,300).
The basic and diluted loss per share is the
same, as the effect of the exercise of share options would be to
decrease the loss per share.
Details of share options that could potentially
dilute earnings per share in future periods are disclosed in the
notes to the Group’s Annual Report and Financial Statements for the
year ended 31 December 2017 and in note 10 below.
10. Issue of Share Options
On 30 May 2018, the Company awarded 38,150,000 share options to
Directors and senior management. All of these share options have an
exercise price of 4.80 pence. One third of the options are
exercisable from 30 November 2018, one third from 31 May 2018 and
one third from 30 November 2019.
On 30 May 2018, the Company awarded 1,500,000 share options to a
consultant to the Company under the terms of the prior year’s
scheme. These options are exercisable immediately.
On 31 March 2017, the Company awarded 41,000,000
share options to Directors and senior management. All of the share
options have an exercise price of 3.20 pence. One third of the
options are exercisable from 30 September 2017, one third from 31
March 2018 and one third from 30 September 2018.
11. Ultimate controlling party
The Directors believe there to be no ultimate controlling
party.
12. Related party transactions
The nature of related party transactions of the
Group has not changed from those described in the Group’s Annual
Report and Financial Statements for the year ended 31 December
2017.
13. Events after the reporting period
There are no events which have occurred after
the reporting period which would be material to the financial
statements.
Approval of interim financial
statements
These Condensed Consolidated Interim Financial Statements were
approved by the Board of Directors on 27 July 2018.
For further information visit www.horizonteminerals.com or
contact:
Horizonte Minerals plc |
|
Jeremy
Martin (CEO) / David Hall (Chairman) |
+44 (0) 20
7763 7157 |
|
|
Numis Securities Ltd (NOMAD & Joint
Broker) |
|
John Prior
/ Paul Gillam |
+44 (0) 207
260 1000 |
|
|
Shard Capital (Joint Broker) |
|
Damon Heath
/ Erik Woolgar |
+44 (0) 20
7186 9952 |
|
|
Tavistock (Financial PR) |
|
Jos Simson
/ Barney Hayward |
+44 (0) 20
7920 3150 |
|
|
About Horizonte Minerals:
Horizonte Minerals plc is an AIM and TSX-listed nickel
development focused in Brazil. The Company is developing the
Araguaia Project as the next major ferronickel mine in
Brazil. With the Vermelho nickel-cobalt project being
advanced with the aim of being able to supply nickel and cobalt to
the EV battery market. Both projects are 100% owned.
Horizonte shareholders include; Teck Resources Limited,
Canaccord Genuity Group, JP Morgan, Lombard Odier Asset Management
(Europe) Limited, City Financial, Richard Griffiths and
Glencore.
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING
INFORMATIONExcept for statements of historical fact
relating to the Company, certain information contained in this
press release constitutes “forward-looking information” under
Canadian securities legislation. Forward-looking information
includes, but is not limited to, statements with respect to the
potential of the Company’s current or future property mineral
projects; the success of exploration and mining activities; cost
and timing of future exploration, production and development; the
estimation of mineral resources and reserves and the ability of the
Company to achieve its goals in respect of growing its mineral
resources; and the realization of mineral resource and reserve
estimates. Generally, forward-looking information can be identified
by the use of forward-looking terminology such as “plans”,
“expects” or “does not expect”, “is expected”, “budget”,
“scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or
“does not anticipate”, or “believes”, or variations of such words
and phrases or statements that certain actions, events or results
“may”, “could”, “would”, “might” or “will be taken”, “occur” or “be
achieved”. Forward-looking information is based on the reasonable
assumptions, estimates, analysis and opinions of management made in
light of its experience and its perception of trends, current
conditions and expected developments, as well as other factors that
management believes to be relevant and reasonable in the
circumstances at the date that such statements are made, and are
inherently subject to known and unknown risks, uncertainties and
other factors that may cause the actual results, level of activity,
performance or achievements of the Company to be materially
different from those expressed or implied by such forward-looking
information, including but not limited to risks related to:
exploration and mining risks, competition from competitors with
greater capital; the Company’s lack of experience with respect to
development-stage mining operations; fluctuations in metal prices;
uninsured risks; environmental and other regulatory requirements;
exploration, mining and other licences; the Company’s future
payment obligations; potential disputes with respect to the
Company’s title to, and the area of, its mining concessions; the
Company’s dependence on its ability to obtain sufficient financing
in the future; the Company’s dependence on its relationships with
third parties; the Company’s joint ventures; the potential of
currency fluctuations and political or economic instability
in countries in which the Company operates; currency exchange
fluctuations; the Company’s ability to manage its growth
effectively; the trading market for the ordinary shares of the
Company; uncertainty with respect to the Company’s plans to
continue to develop its operations and new projects; the Company’s
dependence on key personnel; possible conflicts of interest of
directors and officers of the Company, and various risks associated
with the legal and regulatory framework within which the Company
operates. Although management of the Company has attempted to
identify important factors that could cause actual results to
differ materially from those contained in forward-looking
information, there may be other factors that cause results not to
be as anticipated, estimated or intended. There can be no assurance
that such statements will prove to be accurate, as actual results
and future events could differ materially from those anticipated in
such statements.
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