TIDMALTN
RNS Number : 7650D
Altyn PLC
28 April 2017
Altyn Plc
("Altyn" or the "Company")
Results for the year ended 31 December 2016
Altyn Plc (LSE:ALTN) an exploration and development company, is
pleased to announce its results for the year ended 31 December
2016.
Highlights
Underground development
-- During the year the first transport decline was taken from
250masl (metres above sea level) to 200masl. The decline will now
stop at this level.
-- Second transport decline was taken from the 250masl and is
currently being developed to 225masl.
-- Completion of works on the second decline from 250masl to the
bottom of the open pit at 320masl.
-- Access portal, for the second transport decline was completed during H2 2016.
-- Ventilation shafts and ancillary services for the mine works were completed.
-- Tailings dam 4 was completed in January 2017. It covers an
area of 190,000sqm and has the capacity to absorb 1m tonnes of
tailings, and will have an operational capacity of 2-3 years on the
basis of the planned production increases.
-- Capital investment of US$5.6m (2015: US$9.6m) which includes 30 tonne haulage trucks and new load-haul-dumper (LHD), used to fill the underground trucks with ore. The principal operational fleet is to be further enhanced with an additional 30 tonne haulage truck in 2017 and an additional LHD, to be purchased in 2017.
Financial Highlights
-- Debt raising of US$12m through the issue of convertible
bonds, (2015: US$5.1m equity raising) and US$1.66m through
unsecured loans.
-- Turnover decreased in the year to US$15.9m (2016: US$24.1m).
-- 12,602oz of gold sold (2015: 20,890oz), a reduction of 8,288oz.
-- Average gold price achieved (including silver as a
by-product), US$1,259oz, (2015: US$1,173oz).
-- Adjusted EBITDA (Earnings before interest, tax, depreciation
and amortisation excluding impairment) of US$260,000 (2015:
negative US$2.3m).
Operational Highlights
-- Gold poured 10,970oz, (2015: 15,534oz) a 29.4% decrease
year-on-year, due to the continuing development of the second
transport decline that resulted in a lower production in the
year.
-- Underground gold grade 2.70g/t, (2015: 2.55g/t).
-- Operating cash cost US$846/oz, (2015: US$837/oz).
-- Gold recovery rate 80.20% (2015:76.04%) the improvement is in
line with expectations as the higher grade ore is processed.
Neil Herbert, Director of Altyn Plc commented:
"The 2016 annual results are in line with expectations,
production declined as resources were switched to develop the
second decline and infrastructure in order to access the high grade
underground ore. With the solid platform developed in 2016, we look
forward to progressing the underground mine in 2017, with rising
production and profitability."
For further information please contact:
Altyn Plc
Rajinder Basra, CFO +44 (0) 207 932 2456
VSA Capital (Corporate Broker)
Andrew Monk / Andrew Raca +44 (0) 203 005 5000
Blytheweigh (Financial PR)
Tim Blythe/Camilla Horsfall +44 (0) 207 138 3204
Information on the Company
Altyn is a gold mining, exploration and development group based
in Kazakhstan. Whilst the Company was initially established to
exclusively develop and operate the Sekisovskoye gold and silver
mine in the East Kazakhstan Region, it is now actively targeting
additional gold mining opportunities in Kazakhstan. This includes
the adjacent prospective Karasuyskoye Ore Fields, on which Altyn
was recently awarded the tender to perform further confirmatory
testing in order to gain the sub-soil user licence.
The Company holds a 100 per cent shareholding in DTOO GRP
Baurgold (Formerly DTOO Gornorudnoe Predpriatie Sekisovskoye )
which holds a subsoil use contract in relation to the Sekisovskoye
deposit, covering a total area of 0.855km(2). The subsoil use
contract for Sekisovskoye is valid until 2020 and the Company
currently intends to seek to extend the contract in accordance with
its terms. The Company also holds a 100 per cent shareholding in
TOO GMK Altyn MM (formerly TOO Altai Ken-Bayitu), which owns and
operates the processing plant at the Sekisovskoye deposit. The
Sekisovskoye deposit is located at the village of Sekisovskoye,
approximately 40km north of the town of Ust-Kamenogorsk, the
capital city of the East Kazakhstan Region. The current operation
is focused on mining the near-vertical deposits which extend to the
surface below the open pits which have been previously mined.
The Company intends that the Sekisovskoye deposit shall become a
selective-mining underground operation. As at 31 May 2014, the
Company's proven and probable reserves consisted of 2.67moz of gold
and 3.52moz of silver and the Company's measured, indicated,
inferred resources consisted of 5.14moz of gold, and 3.52moz of
silver, in each case as classified in accordance with JORC.
Chairman's Statement
Dear shareholders,
The focus in 2016 as in the prior year has been on moving the
underground project forward as efficiently as possible but aiming
to maintain our working capital requirements, and ensure our loan
commitments are met.
In relation to the latter the Company currently has a bank loan
with EBRD, the capital amount outstanding as at the date of this
report is US$1.79m. During the year the Company raised US$12m
through the issue of convertible bonds with a coupon rate of 10%.
The proceeds include US$2m from institutional investors and US$10m
from its major shareholder. Additionally, a total of US$1.7m was
raised in the form of 13% unsecured loans from the major
shareholder. The funds raised were used to finance working capital
commitments, repay the loan commitments as noted above, in addition
to acquiring the capital assets in the year.
In order to continue with the underground development plans and
move towards the targeted production levels the Company needs to
raise further funds for capital investment in the underground
development. As part of the process of engaging with potential
investors the Company has instructed brokers and external
consultants to actively market the company. We will keep
shareholders updated as the financing progresses.
The Company has made significant progress utilising the funding
so far, and the transition to the underground mine is progressing
well, albeit with a delay from the original anticipated schedule of
approximately 9 months. The underground ore mined in H1 2016 was
28,824mt and in H2 71,939mt. The Company has now moved to a monthly
run rate of 29,000t in 2017, with the anticipation to increasing
this toward the target of 40-45,000t during 2017.
The gold price is still favourable and stable and has been
trading in the range of US$1,200/oz -US$1,300oz. As interest rates
rise it is expected that the current price may be put under
downward pressure. However, based on the Company's revenue and cost
assumptions the profits going forward are still very
favourable.
In summary we have now developed the platform to move forward.
The forthcoming years, will see the fortunes of the Company change
as production increases and we move towards our target of 100,000oz
of gold a year.
Finally, may I once again thank all our employees and our
Management team for their hard work and also thank our shareholders
for their continued support, as we look forward to a challenging
and exciting year ahead for Altyn.
Kanat Assaubayev
Chairman
Chief Executive Officer's Report
Overview
The management team have had a successful year in advancing the
development of the underground mine. The exercise was time
consuming and technically difficult in a number of areas leading to
a delay from the planned time table, essentially pushing the
development back by approximately 9 months from that initially
envisaged.
MAP OF UNDERGROUND MINE SOWING DECLINES
Current developments
To summarise the following progress was achieved in the
development of the underground mine in the year, building a solid
platform for production growth going forward:
-- Development of the first decline which was taken from the
250masl down to 200masl, this gave access to ore body 11. The first
decline will now be terminated at this level and the second decline
will be used in the future to access the ore bodies. Development of
the second decline has significantly reduced the haulage distance
to the underground tracks. The decline was taken from the 250masl
up to the 320masl to give access to the bottom of the open pit, and
a transport portal was constructed. It is also currently in the
process of being further developed to 225masl giving access to a
number of ore bodies at this level.
-- Ore bodies were prepared for production including ore body 10
and also ore body 5, the latter was originally expected to be
producing ore in H2 2016, however the delay pushed this back to Q1
2017.
-- The current production in Q1 2017 is being taken from ore
body 5 that typically has ore grades on average of 3.5g/t. Although
the actual grade achieved in the Q1 was 2.56 g/t this is mainly a
dilution issue that is expected to be settled in the 2nd half of
the year achieving the targeted average gold grade for the
year.
-- The extraction from the sides of the open pit has revealed
veins of ore with very high grades of gold in excess of 6g/t, as
well as free gold.
-- Completion of tailings dam 4 allows for approximately 1
million tonnes of tailings to be absorbed. Tailings dam 4 will have
a life of approximately 2-3 years, taking into account our plan to
raise production. It is expected that after this period the paste
plant will be constructed, thereafter allowing the tailings to be
backfilled into the underground mine.
-- Sourcing, purchasing and commissioning of plant and equipment
during the year. Key items were the load-haul dumper CAT R1300 and
the 3 Sandvik UG trucks TH430 which can carry 30 tonnes each. These
are replacing the existing 15 tonne trucks which have been retained
for possible deployment in Karasuyskoye. Another 30 tonne UG truck
is to be ordered in the near term. Also in addition to the above a
low haul dumper was delivered in late March 2017 and is now being
used in the operations.
Looking forward
-- The second decline is to be developed to 225masl as noted
above, and this is expected to be completed by June 2017, giving
access to the ore bodies at this level which will then be prepared
for production. Ore body 11 contains on average higher grade ore up
to 4.5g/t, and will be mined in H2 2017.
-- Further drilling and preparatory works will be undertaken at
ore bodies 2-10 at the 250masl in order to prepare them for ore
production.
-- The extraction of the very high grade ore that is being mined
from the sides of the open pit is being further refined by applying
higher concentrations of cyanide, in three smaller intensive
leaching tanks which have been set up. The recovery rates will be
further enhanced in the future by the purchase of gravitational
circuits, as cash flow permits.
Capital requirements
An update to the current projected development capital
requirements is given in the table below.
Total 2017 2018 2019 2020
------------------------- ------ ----- ----- ----- -----
US$m US$m US$m US$m US$m
Prospect drilling 4.0 0.9 0.1 1.5 1.5
------------------------- ------ ----- ----- ----- -----
Underground development 3.5 1.4 0.4 0.8 0.9
------------------------- ------ ----- ----- ----- -----
Infrastructure 1.2 1.2 - - -
------------------------- ------ ----- ----- ----- -----
Ore handling facilities 16.8 10.2 4.6 2.0 -
------------------------- ------ ----- ----- ----- -----
Process plant
& paste plant 12.0 - 12.0 - -
------------------------- ------ ----- ----- ----- -----
Contingency 3.3 0.6 2.3 0.3 0.1
------------------------- ------ ----- ----- ----- -----
Total 40.8 14.3 19.4 4.6 2.5
------------------------- ------ ----- ----- ----- -----
Of the total amount shown above the external funding requirement
is in the region of US$20m-US$30m. The Company is currently in
discussion with a number of interested parties, in order to raise
the necessary funding.
Sekisovskoye operational update
In the year to December 2016, the mine has been operating at a
very low capacity and the current year low level of production has
to be seen as a necessary step in order to achieve the Company's
long term goal. During H1 2016 this dropped to 3,694oz of gold
produced but since then production has been rising as the
underground mine is developed.
The key performance statistics show that the underground grades
are improving as direct access is gained to the ore bodies and
recovery rates are now moving to the target goal of above 80%.
Indeed, in Q1 2017 the recoveries have increased, albeit the grades
have remained at the 2.5-2.6g. The grades are expected to improve
as the higher grade ore bodies are accessed and there is less
developmental ore delivered to the processing plant
The operational performance of the Company' Sekisovskoye gold
mine during 2016 against the prior year is shown in the tables
below.
Mining - open
pit
--------------- ----- -------- --------
2016 2015
--------------- ----- -------- --------
Ore mined T 107,586 339,111
--------------- ----- -------- --------
Gold grade g/t 0.91 1.06
--------------- ----- -------- --------
Silver grade g/t 1.60 2.03
--------------- ----- -------- --------
Contained
gold oz 3,065 11,595
--------------- ----- -------- --------
Contained
silver oz 5,361 22,139
--------------- ----- -------- --------
Mining - underground
---------------------- ----- -------- -------
2016 2015
---------------------- ----- -------- -------
Ore mined T 100,763 79,276
---------------------- ----- -------- -------
Gold grade g/t 2.70 2.55
---------------------- ----- -------- -------
Silver grade g/t 3.76 3.7
---------------------- ----- -------- -------
Contained
gold oz 8,757 6,492
---------------------- ----- -------- -------
Contained
silver oz 12,182 9,441
---------------------- ----- -------- -------
Mining processing
------------------- ----- -------- --------
2016 2015
------------------- ----- -------- --------
Crushing T 258,206 570,949
------------------- ----- -------- --------
Milling T 262,546 566,664
------------------- ----- -------- --------
Gold grade g/t 1.66 1.12
------------------- ----- -------- --------
Silver grade g/t 2.88 2.25
------------------- ----- -------- --------
Gold recovery % 80.20 76.04
------------------- ----- -------- --------
Silver recovery % 73.45 64.91
------------------- ----- -------- --------
Contained
gold oz 13,679 20,428
------------------- ----- -------- --------
Contained
silver oz 22,491 40,994
------------------- ----- -------- --------
Gold poured oz 10,970 15,534
------------------- ----- -------- --------
Silver poured oz 16,519 26,608
------------------- ----- -------- --------
Total gold production for 2016 was only 10,970oz, and was lower
than that initially budgeted. The result reflects the winding down
and closure of the open pit mine at Sekisovskoye, as the Company's
efforts were focused on increasing its underground development. Of
this amount 3,694oz were produced in H1 and 7,276oz in H2, the
increase in production is encouraging. The production is expected
to build in 2017 such that it is expected to achieve a run rate of
40,000oz of gold per annum in the latter part of the year.
As expected the gold recoveries have increased and are now in
excess of 80% as production is switched to the higher grade ore.
The increase is expected to continue as the composition of the ore
processed is not expected to be so variable in grade. In addition
to this the operational upgrades made in the prior year in the
processing plant have also made a difference in uplifting the
recoveries achieved. In the current year the processed ore was a
mixture of lower grade ore from the open pit and the developmental
ore from the higher grade underground ore bodies. The open pit ore
grade was 0.91 at a very low level and was only used in order to
keep the plant operational. In the current year the low grade
stockpiles have been fully impaired as they are no longer
considered to be economically viable to process.
Financial performance review 2016
In terms of production and revenue generation this is
anticipated to be the low point of the Company's performance. The
production performance was a direct result of the continuing
underground mine development which led to delays and interruptions
to production. In addition the use of low grade ore from that
remaining in the open pit led to the low levels of grade and
recovery rates, and was principally used to maintain the operation
of the processing plant.
As anticipated the grades and recovery are improving and all the
main elements are in place to increase production in the
forthcoming year. The second decline is now moving towards 200masl
and a number of ore bodies are accessible and are being prepared
for production. As noted previously further investment will be
required in order to advance the second decline to minus 50masl
which is the current development plan, and to conduct further
exploratory drilling.
The current KPI's are to a large extent not a valid comparable
to prior years, as production was being maintained at the
processing plant to keep it operational during developmental works.
In particular the production cash cost is very high given the low
level of production and will decrease incrementally as the
production rises with the targeted average cash cost of US$540.
The current cash position and anticipated trading is sufficient
for the budgeted capex (with no expansion), and budgeted production
for the next year, but to further develop the mine additional
investment is required. In the prior year one of the principal
factors affecting the results for the year was the devaluation of
the Kazakh Tenge against the US Dollar The US Dollar has stabilised
against the Kazakh Tenge and is in the range of KZT300-320, and
gold is trading in the range of US$1,200-1,300. Both are expected
to be in similar ranges in the forthcoming year.
The Company has reported a net loss of US$6.4m (2015: US$10.2m),
with a gross profit of US$2.3m (2015: US$4.3m) and an operating
loss of US$4.1m (2015: US$4.8m).
During 2016, Sekisovskoye poured 10,970oz of gold
(2015:15,534oz). A total of 12,602oz (2015:20,890oz) were sold in
2016 at an average price of US$1,259oz (2015: US$1,151oz). Revenue
totalled US$15.9m (2015: US$24.1m) and was lower than 2015 as the
Company focused its efforts on developing the underground
development. The principal purchaser of the gold dore was Kazakh
state refinery as in the prior year.
The total cash cost of production, which includes administrative
costs but excludes depreciation and provisions, amounted to
US$1,238/oz, (2015: US$1,263oz). The operating cash cost amounts to
US$832/oz (2014: US$837/oz). This is based on the cost of sales
excluding depreciation and administrative expenses, and
impairments. The earnings before interest, tax and depreciation,
(Adjusted EBITDA), excluding exceptional items, amounted to a
positive US$260,000, (2015: negative (US$2.3m)).
Depreciation of US$3.1m (2015: US$4.2m). The lower level of
deprecation is a reflection of the decreased charge for mining
properties, reflecting the lower production in the year. In 2016,
the amortisation charge of US$553,000 (2015: US$852,000) relates to
the geological data asset for Karasuyskoye ore field purchased in
2013. As the Company has been awarded a subsoil contract in May
2016 US$322,000 of the amortisation charge has been capitalised to
the exploration and evaluation asset in line with the Group's
accounting policy.
The Group has reported Net cash outflow from operating
activities of US$2.9m (2015: net inflow of US$8.2m). The effect of
lower production was partially offset by a higher average gold
price.
Purchase of property plant and equipment of US$4.9m (2015:
US$9.6m). The Company has been conserving cash where possible in
order to preserve working capital until such point as the funding
is in place to further develop the mine.
Cash at year-end was US$2.2m (2015: US$1.1m). During the year,
the Company raised US$12m via convertible bonds and US$1.7m in the
form of unsecured loans. The Company is currently in negotiations
to raise further funds, and will update shareholders as matters
progress, however available cash resources are sufficient to meet
the current working capital requirements.
The Company's principal debts are that owed to The European Bank
for Reconstruction (EBRD), and the convertible loan notes issued in
the year. The EBRD loan is set to be paid over the remaining two
equal quarterly instalments of US$833,000. In relation to the
convertible bonds they are not expected to impact the cash flow,
(other than the interest payments), until maturity in 2021, at
which point they may be converted into shares. African Resources
Limited have agreed to delay the payment of the outstanding
interest payable on their loans in order to aid the cash flow of
the Company.
The consolidated net assets of the Company are US$34.0m (2015:
US$38.4m).
In summary the Company has progressed well on a developmental
level on its limited funding, and managed to continue the mine
development as well as maintain production albeit at low levels.
2017 is looking encouraging and mining and production is moving
towards the targeted production levels set for the high grade
underground mine.
Consolidated statement of profit or loss
Year ended 31 December 2016
Notes 2016 2015
US$000 US$000
---------------------------------- ------------- ---------------- ---------------
Revenue 3 15,867 24,054
Costs of sales (13,554) (19,763)
---------------------------------- ------------- ---------------- ---------------
Gross profit 2,313 (5,352) 4,291
Administrative expenses (1,107) (9,762)
Impairment-other - -
Impairment reversed 674
---------------------------------- ------------- ---------------- ---------------
Operation Loss Foreign exchange
loss (4,146) (4,797)
Finance expense 283 (5,718)
(2,215) (1,235)
---------------------------------- ------------- ---------------- ---------------
Loss profit before taxation (6,078) (11,750)
Taxation credit (278) 1,532
---------------------------------- ------------- ---------------- ---------------
Loss attributable to equity
holders of the parent (6,356) (10,218)
---------------------------------- ------------- ---------------- ---------------
Profit per ordinary share
Basic & Diluted 4 (0.3c) (0.4c)
---------------------------------- ------------- ---------------- ---------------
Consolidated statement of profit or loss and other comprehensive
income
Year ended 31 December 2016
2016 2015
US$000 US$000
-------------------------------------------- -------------- -------------
Loss for the year (6,356) (10,218)
-------------------------------------------- -------------- -------------
Currency translation differences
arising on translations of foreign
operations items that may be reclassified
to profit or loss 747 (34,577)
Currency translation differences
arising on translation of foreign
operations relating to taxation 866 4,574
Total comprehensive loss attributable
to equity holders of the parent (4,743) (40,221)
-------------------------------------------- -------------- -------------
Consolidated statement of financial position
Year ended 31 December 2016
Notes 2016 2015
US$000 US$000
Company number 5048549
------------------------------------ ------- ----------------------- ----------------
Non-current assets Intangible
assets
Property, plant and equipment
Inventory 5 10,264 9,887
Trade and other receivables
Deferred tax asset Restricted
cash 6 37,316 35,134
- 604
1,100 1,337
5,855 5,145
139 137
------------------------------------ ------- ----------------------- ----------------
54,674 52,244
Current assets Inventories
Trade and other receivables
Cash and cash equivalents 1,366 3,223
3,096 2,649
2,236 1,084
------------------------------------ ------- ----------------------- ----------------
6,698 6,956
Total assets 61,372 59,200
------------------------------------ ------- ----------------------- ----------------
Current Liabilities (5,877) (9,298)
Trade and other payables (461) (297)
Other financial liabilities
Current tax payable Provisions (11) (191)
Borrowings (190) (247)
(4,439) (6,676)
------------------------------------ ------- ----------------------- ----------------
(10,978) (16,709)
------------------------------------ ------- ----------------------- ----------------
Net current assets/(liabilities) (4,280) (9,753)
------------------------------------ ------- ----------------------- ----------------
Non-current liabilities
Other financial liabilities (254) (537)
Other contract liabilities (190) -
Provisions (3,978) (3,553)
Convertible bonds (11,281) -
Borrowings (700) -
------------------------------------ ------- ----------------------- ----------------
(16,403) (4,090)
Total liabilities (27,381) (20,799)
------------------------------------ ------- ----------------------- ----------------
Net assets 33,991 38,401
------------------------------------ ------- ----------------------- ----------------
Equity 3,886 3,886
Called-up share capital
Share premium Merger reserve 141,918 141,918
Other reserve (282) (282)
Currency translation reserve
Accumulated losses 333 -
(45,804) (47,417)
(66,060) (59,704)
------------------------------------ ------- ----------------------- ----------------
Total equity 33,991 38,401
------------------------------------ ------- ----------------------- ----------------
Consolidated statement of changes in equity
Year ended 31 December 2016
Currency
Share Share Merger translation Other Accumulat-
Capital Premium Reserve reserve reserve ed Losses Total
US$000 US$000 US$000 US$000 US$000 US$000 US$000
---------------------- -------------- --------------- ------------ -------------------- -------- ------------- ----------------
1 January 2015 3,702 137,234 (282) (17,414) - (49,486) 73,754
---------------------- -------------- --------------- ------------ -------------------- -------- ------------- ----------------
Loss for the year - - - - - (10,218) (10,218)
Other comprehensive
loss - - - (30,003) - (30,003)
---------------------- -------------- --------------- ------------ -------------------- -------- ------------- ----------------
Total comprehensive
loss - - - (30,003) - (10,218) (40,221)
---------------------- -------------- --------------- ------------ -------------------- -------- ------------- ----------------
Shares issued on
conversion of loan 184 4,968 - - - - 5,152
notes
Issue costs - (284) - - - - (284)
---------------------- -------------- --------------- ------------ -------------------- -------- ------------- ----------------
31 December 2015 3,886 141,918 (282) (47,417) - (59,704) 38,401
---------------------- -------------- --------------- ------------ -------------------- -------- ------------- ----------------
Loss for the year - - - - - (6,356) (6,356)
Other comprehensive
income - - - 1,613 - - 1,613
---------------------- -------------- --------------- ------------ -------------------- -------- ------------- ----------------
Total comprehensive
loss - - - 1,613 - (6,356) (4,743)
---------------------- -------------- --------------- ------------ -------------------- -------- ------------- ----------------
Equity components
of loans received - - - - 333 - 333
---------------------- -------------- --------------- ------------ -------------------- -------- ------------- ----------------
31 December 2016 3,886 141,918 (282) (45,804) 333 (66,060) 33,991
---------------------- -------------- --------------- ------------ -------------------- -------- ------------- ----------------
Consolidated statement of changes in cashflows
Year ended 31 December 2016
2016 2015
US$000 US$000
------------------------------------------ --------------------------- --------------
Net cash (outflow)/inflow from
operating activities (2,918) 8,183
------------------------------------------ --------------------------- --------------
Investing activities
Purchase of property, plant and
equipment (4,898) (9,639)
Payment of costs associated with
provisions (396) -
------------------------------------------ --------------------------- --------------
Net cash used in investing activities (5,294) (9,639)
Financing activities 5,152
Proceeds on issue of shares Issue
costs - (284)
Loans received - -
Borrowings and Interest paid 13,661 (3,990)
(4,193)
------------------------------------------ --------------------------- --------------
Net cash inflow from financing
activities 9,468 878
------------------------------------------ --------------------------- --------------
Increase/ (decrease) in cash
and cash equivalents 1,256 (578)
------------------------------------------ --------------------------- --------------
Foreign currency translation (104) (22)
------------------------------------------ --------------------------- --------------
Cash and cash equivalents at
beginning of the year 1,084 1,684
------------------------------------------ --------------------------- --------------
Cash and cash equivalents at
the end of the year 2,236 1,084
------------------------------------------ --------------------------- --------------
Notes
1. General information
Altyn Plc (the "Company") is a Company incorporated in England
and Wales under the Companies Act 2006.
The financial information set out above for the years ended 31
December 2016 and 31 December 2015 does not constitute statutory
accounts as defined in Section 434 of the Companies Act 2006, but
is derived from those accounts. Whilst the financial information
included in this announcement has been compiled in accordance with
International Financial Reporting Standards ("IFRS") (as adopted by
the European Union), this announcement itself does not contain
sufficient financial information to comply with IFRS. A copy of the
statutory accounts for 2015 has been delivered to the Registrar of
Companies and those for 2016 will be submitted for approval by
shareholders at the Annual General Meeting. The full audited
financial statements for the years end 31 December 2016 and 31
December 2015 do comply with IFRS.
2. Going concern
The Group has made good progress in the year in moving forward
the development of the underground mine, but the anticipated
progress was delayed by 9 months from the planned timetable. To
progress the mine to the full projected capacity the Group does
require further funding, which the Group is actively seeking to
raise.
However based on the current level of capital investment made it
is expected that the mine will increase gold production
significantly in the current year. This will enable the Group to
meet its continuing obligations as they fall due. In particular,
the Group's obligations under its loan agreements to EBRD and its
bond holders. The EBRD loan outstanding amounts to US$1.79m as at
the date of this report and is payable by quarterly instalments of
US$833,000. In order to aid the cash flow African Resources Limited
who account for US$10m of the convertible loan debt with a coupon
rate of 10%, have agreed to defer the interest due until such time
as cash flow permits payment. It should also be noted that during
the year the Assaubayev family made available a loan of US$1.66m in
order to provide working capital during the transition phase.
The Group has reviewed the cash flows for 12 months based on the
projected trading. Based on the information available the Directors
are confident that the Group will be able to continue to trade, in
the unlikely event that the loan is requested for repayment earlier
than scheduled.
As noted above the Directors anticipate that, whilst the Group
may seek to raise further finance in the future, it now has access
to sufficient funding for its immediate needs. The Group expects to
have sufficient cash flow from its forecast production to finance
its ongoing operational requirements and to, at least in part, fund
the minimum future capital requirements of the Group. Should the
funding be delayed or additional funding is required to cover any
unforeseen production shortfalls and additional working capital
requirements arising from the move to the underground operations or
in the event that the EBRD loan is requested for payment earlier
than expected, the major shareholder has confirmed their intention
to provide further funding to enable to Group to continue its
planned operations for at least twelve months from the date of the
approval of the financial statements.
On this basis the Directors have therefore concluded that it is
appropriate to prepare the financial statements on a going concern
basis.
3. Revenue
An analysis of the Company's revenues is as follows:
2016 2015
$000 $000
-------------------------- -------------------------------------- --------------------
Sale of gold and silver 15,867 24,054
-------------------------- -------------------------------------- --------------------
Included in revenues from sale of gold and silver are revenues
of US$15,862,000 (2014: US$24,017,000) which arose from sales to
the Company's largest customer which is based in Kazakhstan.
4. Loss per ordinary share
The calculation of basic and diluted earnings per share from
continuing operations is based upon the retained loss from
continuing operations for the financial year of US$6.4m (2015: loss
of US$10.2m)
The weighted average number of ordinary shares for calculating
the basic loss in 2016 and 2015 is shown below. As the Company was
loss making in 2016, the impact of the potential ordinary shares
outstanding from the conversion of the Convertible loan notes would
be anti-dilutive, and as such the basic and diluted earnings per
share are the same.
2016 2015
-------------------- ------------- -------------
Basic and diluted 2,334,342,130 2,298,284,596
-------------------- ------------- -------------
5. Intangible assets
Karasuyskoye Exploration
geological and evaluation
data costs US$000
Cost
1 January 2015 20,736 - 20,736
Translation difference (9,597) - (9,597)
31 December 2015 & 11,139 - 11,139
1 January 2016
Additions - 396 396
Translation difference 206 - 206
Amortisation capitalised - 322 322
31 December 2016 11,345 718 12,063
Amortisation
1 January 2015 1,296 - 1,296
Charge for the year 852 - 852
Translation difference (896) - (896)
31 December 2015 & 1,252 - 1,252
1 January 2016
Charge for the year 553 - 553
Translation difference (6) - (6)
31 December 2016 1,799 - 1,799
Net Book Value
1 January 2015 19,440 - 19,440
31 December 2015 9,887 - 9,887
31 December 2016 9,546 718 10,264
=========================== ============================== ================================================ ============================
The intangible assets relate to the historic geological
information pertaining to the Karasuyskoye ore fields. The ore
fields are located in close proximity to the current open pit and
underground mining operations of Sekisovskoye. The Company obtained
a contract for exploration and evaluation on the site in May 2016
from the Kazakh authorities. The contract is valid for a period of
6 years.
The value of the geological data purchased is in the opinion of
the Directors the value that would have been incurred if the
drilling had been undertaken by a third party (or internally). They
took the view that a 20 year write off is appropriate in relation
to the absorption of the cost given the current development of the
site.
6. Property, plant and equipment
Mining properties Freehold, Equipment Plant,
and leases US$000 land and fixtures machinery Assets
buildings and and under Total
US$000 fittings vehicles construction US$000
US$000 US$000 US$000
------------------------------------ --------------------------------------------- -------------------- ------------------ ------------------------ ----------------------- ----------------
Cost 16,541 15,434 18,852 8,041 29,414
1 January 2015 Additions
Disposals Transfers 104 1,210 1,782 92 6,451 88,282
Currency translation adjustment (863) - (288) (8) (21) 9,639
- - - - - (1,180)
(7,392) (7,564) (9,245) (3,751) (16,425) -
(44,377)
------------------------------------ --------------------------------------------- -------------------- ------------------ ------------------------ ----------------------- ----------------
31 December 2015 & 1 January
2016 Additions 8,390 9,080 11,101 4,374 19,419 52,364
Disposals Transfers - 217 1,056 1,376 2,891 5,540
Transfers to inventories - - (663) - (1) (664)
Currency translation adjustment - 14,788 505 - (18,487) (3,194)
2,817 - - - - 2,817
144 156 190 75 333 898
------------------------------------ --------------------------------------------- -------------------- ------------------ ------------------------ ----------------------- ----------------
31 December 2016 11,351 24,241 12,189 5,825 4,155 57,761
------------------------------------ --------------------------------------------- -------------------- ------------------ ------------------------ ----------------------- ----------------
Accumulated depreciation 3,432 6,046 12,768 4,798 - 27,044
1 January 2015 Charge for
the year Disposals -425 1,136 1,840 823 - 4,224
Currency translation adjustment - (1,736) - - (81) - (81)
(3,193) (6,550) (2,479) - (13,958)
------------------------------------ --------------------------------------------- -------------------- ------------------ ------------------------ ----------------------- ----------------
31 December 2015 & 1 January
2016 Charge for the year 2,121 3,989 8,058 3,061 - 17,229
Disposals 102 1,016 1,573 376 - 3,067
Transfers - - (216) - - (216)
Currency translation adjustment - - - - - -
39 95 169 62 365
------------------------------------ --------------------------------------------- -------------------- ------------------ ------------------------ ----------------------- ----------------
31 December 2016 2,262 5,100 9,584 3,499 - 20,445
------------------------------------ --------------------------------------------- -------------------- ------------------ ------------------------ ----------------------- ----------------
Net book value
1 January 2015 13,109 9,388 6,084 3,243 29,414 61,238
------------------------------------ --------------------------------------------- -------------------- ------------------ ------------------------ ----------------------- ----------------
31 December 2015 6,269 5,091 3,043 1,312 19,419 35,134
------------------------------------ --------------------------------------------- -------------------- ------------------ ------------------------ ----------------------- ----------------
31 December 2016 9,089 19,140 2,605 2,327 4,155 37,316
------------------------------------ --------------------------------------------- -------------------- ------------------ ------------------------ ----------------------- ----------------
Capitalised cost of mining property and leases are amortised
over the life of the licence from commencement of production on a
unit of production basis. This basis uses the ratio of production
in the period compared to the mineral reserves at the end of the
period plus production in the period. Mineral reserves estimates
are based on a number of underlying assumptions which are
inherently uncertain. Mineral reserves estimates take into
consideration estimates by independent geological consultants.
However, the amount of mineral that will ultimately be recovered
cannot be known until the end of the life of the mine. Any changes
in reserve estimates are, for amortisation purposes, treated on a
prospective basis. The recovery of the capitalised cost of the
Company's property, plant and equipment is dependent on the
development of the underground mine.
Under the terms of the loan agreement with the European Bank for
Reconstruction and Development (EBRD), the Company and its
subsidiaries should have pledged certain assets as security for the
loan that was entered into.
The Directors are required to consider whether the non-current
assets comprising, mineral properties leases, plant and equipment
have suffered any impairment. The recoverable amount is determined
based on value in use calculations. The use of this method requires
the estimation of future cash flows and the choice of a discount
rate in order to calculate the present value of the cash flows. The
directors have concluded that no adjustment is required for
impairment.
7. Availability of accounts
The audited Annual Report and Financial Statements for the 12
months ended 31 December 2016 and notice of AGM will shortly be
sent to shareholders and published at: www.altyn.uk
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR OKFDBPBKDOQB
(END) Dow Jones Newswires
April 28, 2017 11:43 ET (15:43 GMT)
Altyngold (LSE:ALTN)
Historical Stock Chart
From May 2024 to Jun 2024
Altyngold (LSE:ALTN)
Historical Stock Chart
From Jun 2023 to Jun 2024
