TIDMALTN
Altyn Plc
("Altyn" or the "Company")
Results for the year ended 31 December 2019
Altyn Plc (LSE:ALTN) an exploration and development company, is
pleased to announce its results for the year ended 31 December
2019.
Highlights
Underground development & exploration
-- CPRs completed at both Sekisovskoye and Teren-Sai (Area No 2) -- see
mineral resources statement.
-- Continuation of exploration drilling (5,730m), verification drilling
(6,132m) and trenching (1,270m3) at Area No1 at Teren-Sai.
-- Sampling pits and tunnelling conducted to delineate the ore body at Area
No2 Teren-Sai.
-- Development of ventilation systems between +320 masl and +355masl.
-- Exploration drilling to further define the ore body #3, #8 and #10 to
update the thickness and characteristics.
-- Maintenance and safety procedures conducted at the lower horizons to
remain compliant with current regulations.
Financial highlights
-- Turnover decreased in the year to US$14.9m (2018: US$19.4m).
-- 10,500oz of gold sold (2018: 14,990oz), a decrease of 4,490oz.
-- Average gold price achieved (including silver), US$1,390oz, (2018:
US$1,292oz).
-- The Company made a loss before tax of US$1.04m (2018: loss US$4.0m).
-- Adjusted EBITDA (Earnings before interest, tax, depreciation and
amortisation and excluding impairment) of US$3.3m (2018: US$0.9m).
-- The Company has obtained a credit facility from a Kazakh based bank for
US$17m at interest rates of 6% to 7%.
-- The Company has listed US$10m of bonds on the AIX and, at present, there
has been an uptake of US$2.6m.
Operational highlights
-- -- Gold poured 10,537oz, (2018: 15,282oz) a 31% decrease year-on-year,
the decrease in processing was a result of stoppages due to equipment
repairs and maintenance.
-- Underground gold grade 1.92g/t, (2018: 1.95g/t).
-- Operating cash cost US$854/oz, (2018: US$865/oz).
-- Gold recovery rate 82.31% (2018: 83.23%).
For further information please contact:
Altyn Plc
Rajinder Basra, CFO +44 (0) 207 932 2455
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014.
Information on the Company Altyn Plc (LSE:ALTN) which is an
exploration and development company listed on the standard segment
of the London Stock Exchange, can be obtained at the website
www.altyn.uk
CHAIRMAN'S STATEMENT
Dear shareholders,
Before commenting on the operations of the Company during 2019,
I would like to first cover the effects of current coronavirus risk
on the Company and its employees. At the country level the
Kazakhstani government is taking the outbreak very seriously with
restricted working and transport movements principally in the two
main cities of Kazakhstan. At the local level the government's
approach has been less restrictive by permitting workers to
continue attending the mine from the local city Ust-Kamenogorsk as
well as allowing the free movement of gold to the refiner. In this
context, the Company briefed all workers in relation to safety
requirements and supplied them with the necessary safety equipment.
The Company is also providing support to its staff both financially
and logistically as required, while allowing remote working for
head office staff. The fast changing nature of this pandemic,
combined with governments' resulting responses to it, will be kept
under close review and operations adapted accordingly.
At present there is expected to be minimal impact on the
operations of the Company. The Company has sufficient stock of
parts and spares to cope with any breakdowns to equipment and to
keep production going. In relation to its supply chain for
consumables, the Company has sourced alternative suppliers in
Kazakhstan for those items that are currently supplied from abroad
in the event there are delays or disruption to supply.
Coming onto the operations of the Company in 2019, delayed
raising of capital financing resulted in the Company performing
below budget in 2019. The funding requirement was only met towards
the end of 2019 via a US$17m facility from JSC Bank Center Credit
and a US10m bond issuance on the Astana International Exchange, of
which US$2.6m was taken up as at the year end. The remaining $7.4m
bond issuance is expected to resume post state quarantine.
These funds allowed the Company to purchase new machinery
resulting in markedly upward revision in mining and production
plans for 2020, the results of which are already visible with
29,000t monthly production recently achieved. Production is
expected to further grow this year as more equipment is delivered.
This, in addition to the increased knowledge gained through the
recently completed CPRs, will provide an excellent platform to take
the Company forward. The management is particularly encouraged by
the results of Teren-Sai's site No2, which represents only 4 of 15
targets in total.
On behalf of the Board I would like to thank Neil Herbert who
resigned in the year, for his hard work and inputs during his time
with the Company. I would also like to thank all the staff and
management for their hard work and perseverance at this difficult
and uncertain time.
Kanat Assaubayev
Chairman
30 April 2020
CHIEF EXECUTIVE OFFICER'S REVIEW
Overview
The production results reflect delays in obtaining funding for
additional mining equipment which, was only secured late in the
second half of the year. Additionally technical interruptions and
extended repairs particularly, for the milling machines have
severely restricted throughput to the processing plant, resulting
in a lower output and the ability for the Company to operate as
planned for in 2019.
However, the financing raised, in particular, the bank loan
offers an appealing interest rate and a capital repayment holiday
(until September 2020), which should allow the Company to boost its
mining equipment fleet without straining its cash flows and
steadily increase production. Indeed, the first batch of new
equipment deliveries is already having a positive impact on
production, and we expect to receive a second batch in Q2 2020.
Commentary on results -- 2019
The following was achieved with regards to the underground mine
in the year:
-- As was indicated in the mining plan in the 2018 Annual Report the ore has
been extracted from ore bodies 11 and 3-8 between -250masl and -150masl.
The gold grade remained comparable to last year at an average over the
year of 1.92g/t (2018: 1.95g/t). The expectation was that the grade would
increase but the dilution of the ore extracted was at similar levels to
the prior year due to the lack of equipment.
-- The ore mined at Sekisovskoye during 2019 was 255,000t (2018: 278,000t),
recent production results with the delivery of the new machinery has
increased this to 29,000t a month with the expectation that this will
increase further in H2 2020 once the second batch of equipment arrives.
-- The milling and subsequent production was disappointing with milling at
231,000t (2018 348,000t) and gold poured only achieving 10,537 oz (2018:
15,282oz). Unfortunately breakdowns of the milling machines and delays in
receiving spare parts and subsequent repairs led to below budget results.
-- Development of the Sekisovskoye mine was limited to maintenance work and
improvement in access and ventilation. A number of ore bodies that were
prepared for processing in 2019 will now be rolled forward into 2020.
-- The average gold grade was 1.76g/t (2018: 1.68 g/t) given low grade ore
utilisation. The trend should reverse going forward as the majority of
the throughput will come from underground ore mining.
The Company continued its exploration programme with a total of
1,490 diamond drill holes down to 400masl for Sekisovskoye. In
relation to Teren-Sai, while the Company has a total of 15 targets
it has mainly concentrated on 3 targets in area No2 of the
Teren-Sai project. Building upon historic drill holes the Company
carried an exploration program involving trenching in order to
delineate the size and extent of the targets in greater detail.
Additionally numerous sampling pits were excavated with the
material excavated being sent to the Sekisovskoye processing plant
for testing and analysis.
Teren-Sai will initially operate an open pit mine to exploit
approximately 360,000oz reserves. Initial costs in relation to the
Teren-Sai project are included in the capex budget below.
In order to incorporate recent exploration results and update
the 2014 Competent Persons Report the Company instructed Ernst and
Young to complete two CPRs on Sekisovskoye and Teren-Sai (area
No2). The results were very encouraging and are detailed in the
mineral resources statement in the Annual Report.
Purchase of plant and equipment
The company has used the funds received in 2019 to mainly
purchase the equipment as detailed below (in addition to buying
other smaller machinery items and parts as necessary). Out of the
US$17m raised from JSC Bank Center Credit the majority is earmarked
specifically for the purchase of plant and machinery.
The following summarises the major items of equipment which have
been delivered during 2020 to the Sekisovskoye mine site:
-- Front-end loader ZL 50G
-- Dump truck 25t Chacman
-- Material handling trucks CAT R1300 -- 3 units
-- Underground haulers CAT AD30 -- 3 units
In addition to the above the following equipment is on order
with an expected delivery in H2 2020:
-- Face drilling rig Atlas Copco T1D
-- Ring drilling rig Atlas Copco T1D
-- Exploration drilling rig Atlas Copco Diamec U4
Further machinery and plant will be ordered in 2020 as required
under the capital expenditure plan.
Capital requirements
The capex requirements for the next three years are detailed in
the table below. The budgeted plans foresee the Company expanding
ore extraction and production to 850,000t per annum for
Sekisovskoye.
Mining results ore extraction
2019 2018
Ore mined T 255,134 278,883
Gold grade g/t 1.92 1.95
Silver grade g/t 1.37 2.92
Contained gold oz 15,760 17,482
Contained silver oz 11,239 26,110
Mining results processing
2019 2018
Crushing T 239,046 340,091
Mining T 230,966 349,169
Gold grade g/t 1.76 1.68
Silver grade g/t 1.37 2.50
Gold recovery % 82.31 63.23
Silver recovery % 69.88 74.37
Contained gold oz 12,981 18,367
Contained silver oz 9,819 27,986
Gold Poured oz 10,537 15,282
Silver poured oz 6,760 20,794
Projected capital expenditures
Total 2020 2021 2022
US$m US$m US$m US$m
Prospect drilling 2.5 0.8 0.9 0.8
Underground development 14.2 5.9 4.8 3.5
Infrastructure 1.8 1.6 -- 0.2
Ore handling facilities 7.3 4.1 -- 3.2
Process plant incremental expansion 7.5 4.5 2.4 0.6
Teren-Sai exploration programme 3.3 1.4 1.5 0.4
Total 36.6 18.3 9.6 8.7
Future development plans are dependent on raising further
funding.
Longer term plan
Sekisovskoye
The plan consists in operating the Sekisovskoye Mine at 850kt
annual capacity for three years then ramping up production to 2Mtpa
over a six year period. This will be achieved by increasing the
capacity of the existing processing plant to 1Mtpa from 0.85Mtpa
for US$8.4m and constructing a new 1Mtpa metallurgical plant and
tailings dumps for US$45.7m. The 2Mtpa production level is planned
to be achieved with the development of vertical skip, cage and
ventilation shafts down to the -430masl level. As such, while the
mine is being currently accessed via two declines, a capital
expenditure ("Capex") of US$204m is planned for the Life of mine
underground expansion in order to develop a new vertical skip, cage
and ventilation shafts as well as the associated infrastructure. A
further US$83.1m is planned for new underground mining and haulage
equipment fleet.
Teren-Sai
Mining operations at the Teren-Sai Project are planned to
include both surface and underground mining methods. The open pit
mining method will make use of a suite of trucks and excavators,
while underground operations will make use of the sub-level stoping
mining method, similar to the underground operations at the
adjacent Sekisovskoye Mine. It is expected that open pit mining
covers a +490masl to +350masl depth range while the underground
mining will be conducted from +350masl to +25masl.
Processing
The planned Teren-Sai processing plant will be a conventional
carbon-in-leach ("CIL") gold recovery plant, similar to the
neighbouring Sekisovskoye mine process plant.
MARKET REVEW AND SHARE PRICE PERFORMANCE
While the Directors understand that the Company's share
performance faced headwinds due to delayed funding, the current
valuation is considered to be an under-estimate of the fundamental
value of the business. The Directors believe that the share price
is at an inflection point and should progressively start reflecting
improvement in fundamentals. The Company has secured adequate
financing to expand production, with the first batch of equipment
deliveries already translating into increased production. More
equipment is expected later in the year, which should expand
production further. The gold price steadily increased in 2019
reaching US$1,500oz towards the end of the year. This positive
momentum is being currently maintained during the COVID-19
crisis.
The current uncertain economic environment and actions to be
taken by governments and by global central banks are expected to
offer a continued positive environment for gold. However the
Company is taking a conservative approach by budgeting a gold price
of US$1,450oz . Overall, the Directors are expecting a supportive
outlook for the Company's revenues, while its cost base growth
should decelerate due to weaker KZT given globally declining energy
prices. Finally, the repayment schedule on the recently obtained
financing (annual amortisation until 2026 for the bank loan and
bullet repayment in 2021/22 for the bonds) favourably matches the
cash flow generation of the company which is expected to improve
significantly.
FINANCIAL PERFORMANCE
Key performance indicators (KPIs)
Annual gold sales (oz)
2019 10,500
2018 14,990
2017 16,747
Annual gold poured (oz)
2019 10,537
2018 15,282
2017 16,717
Revenue (US$m)
2019 14.9
2018 19.4
2017 21.6
Operating cash production cost (US$oz)
2019 854
2018 865
2017 774
Adjusted EBITDA (US$m)
2019 3.3
2018 0.9
2017 3.69
Net assets (US$m)
2019 33.3
2018 34.9
2017 33.3
The gold poured decreased from 15,282oz to 10,537oz in the year
ended 2019 from the prior year, reflecting the lack of equipment
and closures of the sections of the processing plant as parts were
being sourced. This resulted in a lower level of ore milled at
231,000t as opposed to 348,000t in the prior year, and an overall
lower level of production in the year. The actual ore mined was
down only by 8% from 278,000t to 255,000t, resulting in contained
gold of 15,759oz as opposed to 17,463oz in 2018, and at a similar
grade of 1.92g/t as opposed to 1.95g/t in 2018.
During 2019, the Company sold 10,500oz of gold (2018 14,990oz).
The average price achieved per oz in 2019 was US$1,390 with the
gold price trending up. In 2018 the Company achieved an average
price of US$1,292. The average prices are budgeted to stay at
similar levels in 2020, at approximately US$1,450oz and there are
no changes anticipated to the sales offtake agreement currently in
place with the Kazakh national refinery. As in the prior year sales
are translated at the spot US$ rate at the point the gold is sold.
However, currently with the Tenge devaluing against the US$ by
approximately 20% in Q1 2020, this is positive for the Company, as
a significant proportion of expenses are denominated in Kazakh
Tenge.
The Company has factored in the effects as far as possible for
disruptions caused by the coronavirus pandemic but on our analysis,
at this stage there would appear to be no material issues to
consider.
The overall grade achieved is lower than long term production
plan assumptions. The dilution resulted from mixing low grade
stockpiles with underground ore. The grade and production are
expected to improve with the deliveries of new equipment expected
in Q2 2020.
As the Company is continuing to use the low grade ore, part of
the provision made against the stockpile in prior periods, has been
reversed amounting to US$138,000 (2018: US$383,000). The EBITDA
achieved by the Company has been adjusted for this and other
impairments.
The total cash cost of production, which includes administrative
costs but excludes depreciation and provisions, amounted to
US$1,104/oz, (2018: S$1,235oz). The operating cash cost excluding
administrative costs amounted to US$854/oz (2018: US$865/oz). The
cash cost of production has been kept under control as result of
efficiency gains particularly labour costs.
The Group has reported a net loss of $1.0m before tax (2018:
US$4.0m), with a gross profit of US$2.5m (2018: US$2.5m). The
operating profit is US$25,000 (2018: loss US$2.5m). In the prior
year, the Company suffered a one-off cost resulting from VAT
write-offs and other government payments amounting to US$2.2m.
These savings together with reduced staff costs of approximately
US$1.44m have helped to push the administrative costs down from
US$5.5m to US$2.6m.
The EBITDA is US$3.3m, after adjusting the operating profit by
US$25,000 (2018: loss US$2.5m) for depreciation of US$3.4m (2018:
US$3.9m), and an impairment gain of US$107,000 (2018:
US$562,000).
Cash at year-end increased to US$1.9m (2018: US$105,000) as a
result of debt raising in the year. Resources are sufficient to
meet the current working capital requirements and purchase of
capital equipment in the current budget.
The main financing commitments were payment of interest on the
10% US$2m convertible loan and repayment of principal and interest
on the bank borrowings. In total these are expected to amount to
approximately US$3.0m in 2020.
The consolidated net assets of the Group are US$33.3m (2018:
US$34.9m).
CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2019
2019 2018
Notes US$000 US$000
Revenue 3 14,908 19,366
Cost of sales (12,390) (16,871)
Gross profit 2,518 2,495
Administrative expenses (2,600) (5,543)
Impairments -- reversed 107 562
Operating profit/(loss) 25 (2,486)
Foreign exchange 116 (196)
Finance expense (1,183) (1,283)
Total finance cost (1,067) (1,479)
Loss before tax (1,042) (3,965)
Taxation expense (214) (323)
Loss for the year attributable to the equity
holders of the parent (1,256) (4,288)
Loss per ordinary share
Basic & diluted 4 (0.05c) (0.17c)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2019
2019 2018
US$000 US$000
Loss for the year (1,256) (4,288)
Items that will not be reclassified subsequently to profit
or loss Currency translation differences arising on
translations of foreign operations -- items that may be
reclassified to profit or loss 129 (5,712)
Currency translation differences on translation of foreign
operations relating to tax (461) 2,560
(332) (3,152)
Total comprehensive loss for the year (1,588) (7,440)
Total comprehensive loss attributable to equity holders of
the parent (1,588) (7,440)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31 December 2019
2019 2018
Notes US$000 US$000
Assets
Non-current assets
Intangible assets 5 12,943 12,338
Property, plant and equipment 6 30,316 28,391
Deferred tax assets 7,356 7,999
Trade and other receivables 6,048 1,303
Restricted cash -- 28
56,663 50,059
Current assets
Inventories 3,631 1,297
Trade and other receivables 3,615 3,081
Cash and cash equivalents 1,934 105
9,180 4,483
Total assets 65,843 54,542
Equity and liabilities
Current liabilities
Trade and other payables (7,553) (7,846)
Other current financial liabilities -- (122)
Provisions (130) (94)
Loans and borrowings (2,550) (1,218)
(10,233) (9,280)
Non-current liabilities
VAT payable (964) (1,383)
Other payables (1,333) (644)
Provisions (5,007) (4,412)
Loans and borrowings (15,027) (3,963)
(22,331) (10,402)
Total liabilities (32,564) (19,682)
Equity
Share capital (4,055) (4,054)
Share premium (151,476) (151,470)
Merger reserve 282 282
Other reserves (333) (333)
Foreign currency translation reserve 48,102 47,770
Accumulated losses 74,201 72,945
Equity attributable to owners of the company (33,279) (34,860)
Total equity and liabilities (65,843) (54,542)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2019
Currency
Share Share Merger translation Other Accumulated
capital premium reserve reserve reserve losses Total
US$000 US$000 US$000 US$000 US$000 US$000 US$000
At 1 January
2018 3,886 141,918 (282) (44,618) 333 (67,989) 33,248
Loss for the
year -- -- -- -- (4,288) (4,288)
Other
comprehensive
loss -- -- -- (3,152) -- -- (3,152)
Total
comprehensive
loss -- -- -- (3,152) -- (4,288) (7,440)
Conversion of
bond into
shares 168 9,552 -- -- -- (668) 9,052
At 31 December
2018 4,054 151,470 (282) (47,770) 333 (72,945) 34,860
At 1 January
2019 4,054 151,470 (282) (47,770) 333 (72,945) 34,860
Loss for the
year -- -- -- -- -- (1,256) (1,256)
Other
comprehensive
loss -- -- -- (332) -- -- (332)
Total
comprehensive
loss -- -- -- (332) -- (1,256) (1,588)
New share
capital
subscribed 1 6 -- -- -- -- 7
At 31 December
2019 4,055 151,476 (282) (48,102) 333 (74,201) 33,279
CONSOLIDATED STATEMENT OF CASHFLOWS
for the year ended 31 December 2019
2019 2018
US$000 US$000
Cash flows from operating activities
Net cash (outflow)/ inflow from operating activities (2,832) 940
Cash flows from investing activities
Acquisitions of property plant and equipment (7,180) (1,108)
Proceeds from sale of property plant and equipment 20 264
Acquisition of intangible assets (552) --
Net cash used in investing activities (7,712) (844)
Cash flows from financing activities
Interest paid (193) (160)
Loans received 14,089 151
Loans repaid (1,523) (550)
Net cash inflow/(outflow) from financing activities 12,373 (559)
Net increase/(decrease) in cash and cash equivalents 1,829 (463)
Cash and cash equivalents at 1 January 105 704
Effect of exchange rate fluctuations on cash held -- (136)
Cash and cash equivalents at 31 December 1,934 105
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2019
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 2019 and 31 December
2018 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 2018 has been delivered to the Registrar of Companies and those
for 2019 will be submitted for approval by shareholders at the
Annual General Meeting. The full audited financial statements for
the years end 31 December 2019 and 31 December 2018 do comply with
IFRS.
2 Going concern
During the year the Company obtained funding commitments of
US$19.6m, of which US$8m was undrawn as at the year- end in
relation to the bank debt. Further funding is continuing to be
raised on the Astana International exchange (AIX) through a bond
placement of US$10m of which at the year end the Company had placed
US$2.6m. At the year-end company has cash resources of US$1.9m
available.
The Board have reviewed the Group's forecast cash flows for the
period to June 2021. Capital and operating costs are based on
approved budgets and latest forecasts in the case of 2020 and
current development plans in the case of 2021. Based on the Group's
cash flow forecasts, the Directors believe that the combination of
its current cash balances, net cash flows from operations, and
increased production based on projections of future growth in
production, are sufficient for the Company to achieve its
short-term plans and meet its cash flow requirements. With the
delivery of equipment and parts in 2020, the production has
increased its run rate to 29,000t a month, with the Company
targeting 40,000t in the latter part of 2020 once further equipment
is purchased.
However the plans were drawn up prior to the COVID-19 pandemic
and due to the potential disruption to trading that may arise there
is a material uncertainty that the future plans may not be
achievable and the potential impact to the Company as a going
concern.
Whilst there has been little impact of COVID-19 on the Group's
operations at present there may be significant impacts on the
business going forward which are currently unknown. The Board has
considered possible stress case scenarios for the impact on the
Group's operations, financial position and forecasts. Whilst the
potential future impacts of COVID-19 are unknown the Board has
considered operational disruption that may be caused by the factors
such as a) restrictions applied by governments, illness amongst our
workforce and disruption to supply chain and possible impact on
refining of gold. As the situation is evolving and changing the
Company has prepared and analysed forecasts in relation to a
situation in which the Company may have to suspend operations for a
potential period of three months. In this instance the Company has
forecast that additional funding would be required to support the
Company's liquidity position. The level of funding would increase
if operations were suspended beyond this time frame.
The principal shareholders have indicated that they would be
prepared to offer the necessary support that the Company may
require to bridge any shortfall. The Board has reviewed the support
they are able to offer in terms of amount required and liquidity,
and have factored this into the model. The Company would also
consider other avenues in order to maintain liquidity such as
approaching the bank to draw down existing credit facilities to
assist in its working capital requirements.
The Board considers it is appropriate to adopt the going concern
basis of accounting in preparing these financial statements, having
considered a period of at least 12 months from the date of approval
of the financial statements.
However, at the date of approval of these financial statements,
due to the potential future impact of COVID-19 it is uncertain if
the Company will be able to take suitable other measures as
required to maintain liquidity. These circumstances indicate the
existence of a material uncertainty which may cast significant
doubt about the Group's ability to continue as a going concern and
therefore it may be unable to realise its assets and discharge its
liabilities in the normal course of business. As such this is
considered to be a material uncertainty.
The financial statements do not include the adjustments that
would result if the Group was unable to continue as a going
concern.
3 Revenue
The analysis of the group's revenue for the year from continuing
operations is as follows:
2019 2018
US$000 US$000
Sale of gold and silver 14,623 19,030
Other sales 285 336
14,908 19,366
Included in revenues from sale of gold and silver are revenues
of US$14,623,000 (2018: US$19,030,000) which arose from sales of
precious metals to one customer based in Kazakhstan. Other sales
amounted to US$285,000 (2018 US$336,000) and related to sale of
machinery and consumables.
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$1.3m (2018: loss
of US$4.3m).
The weighted average number of ordinary shares for calculating
the basic loss in 2019 and 2018 is shown above. As the Company was
loss making in 2019, 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.
2019 2018
Basic and diluted 2,567,772,041 2,552,972,267
5 Intangible assets
Teren-Sai Exploration and
geological data evaluation costs Total
Group US$000 US$000 US$000
Cost or valuation
At 1 January 2018 11,424 3,326 14,750
Additions -- 1,605 1,605
Amortisation capitalised -- 1,101 1,101
Currency translation (1,535) (113) (1,648)
At 31 December 2018 9,889 5,919 15,808
At 1 January 2019 9,889 5,919 15,808
Additions -- 552 552
Amortisation capitalised -- 992 992
Currency translation 42 25 67
At 31 December 2019 9,931 7,488 17,419
Amortisation
At 1 January 2018 2,869 -- 2,869
Amortisation charge 1,101 -- 1,101
Currency translation (500) -- (500)
At 31 December 2018 3,470 -- 3,470
At 1 January 2019 3,470 -- 3,470
Amortisation charge 992 -- 992
Currency translation 14 -- 14
At 31 December 2019 4,476 -- 4,476
Carrying amount
At 31 December 2019 5,455 7,488 12,943
At 31 December 2018 6,419 5,919 12,338
At 1 January 2018 8,555 3,326 11,881
The intangible assets relate to the historic geological
information pertaining to the Teren-Sai 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, with a right to extend over a further 4 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). The
Company has continued to develop the site with a CPR completed in
the year on one of the fifteen target zones area 2, which includes
3 potential targets.
The Directors consider that no impairment is required taking
into account the CPR results, exploration and planned production in
the future. The write off of the geological data over the period of
the licence to May 2026 is appropriate. After that period the costs
amortised are capitalised in line with the Company's accounting
policy within the subsidiary TOO GMK Altyn MM LLP, there are no
impairment indicators.
6 Property, plant and equipment
Equipment, Plant,
Mining Freehold, fixtures machinery
properties land and and and Assets under
and leases buildings fittings buildings construction Total
US$000 US$000 US$000 US$000 US$000 US$000
Cost or
valuation
At 1 January
2018 10,843 26,751 11,546 8,528 2,106 59,774
Additions 2,940 2 124 24 721 3,811
Disposals -- (1) (563) (2,620) -- (3,184)
Transfers -- 1,494 41 -- (1,661) (126)
Currency
translation (2,053) (3,765) (1,447) (885) (188) (8,338)
At 31
December
2018 11,730 24,481 9,701 5,047 978 51,937
At 1 January
2019 11,730 24,481 9,701 5,047 978 51,937
Additions 2,140 71 239 2,469 301 5,220
Disposals -- (4) (34) (41) -- (79)
Transfers -- 134 -- -- (134) --
Transfer to
inventories -- -- -- -- (81) (81)
Currency
translation 79 104 39 26 3 251
At 31
December
2019 13,949 24,786 9,945 7,501 1,067 57,248
Depreciation
At 1 January
2018 2,306 7,260 8,963 6,082 -- 24,611
Charge for
year 251 2,242 1,133 275 -- 3,901
Eliminated on
disposal -- (1) (356) (1,085) -- (1,442)
Currency
translation (337) (1,210) (1,239) (738) -- (3,524)
At 31
December
2018 2,220 8,291 8,501 4,534 -- 23,546
At 1 January
2019 2,220 8,291 8,501 4,534 -- 23,546
Charge for
the year 209 2,133 794 217 -- 3,353
Eliminated on
disposal -- (3) (30) (40) -- (73)
Currency
translation 12 35 40 19 -- 106
Transfers -- 107 (101) (6) -- --
At 31
December
2019 2,441 10,563 9,204 4,724 -- 26,932
Carrying
amount
At 31
December
2019 11,508 14,223 741 2,777 1,067 30,316
At 31
December
2018 9,510 16,190 1,200 513 978 28,391
At 1 January
2018 8,537 19,491 2,583 2,446 2,106 35,163
Capitalised costs of mining property are amortised over the life
of the mine from the 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.
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.
The Directors are required to consider whether the non-current
assets comprising, mineral properties, 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 considered entity specific factors such as available
finance, cost of production, grades achievable, and sales price.
The directors have concluded that no adjustment is required for
impairment.
View source version on businesswire.com:
https://www.businesswire.com/news/home/20200430006058/en/
CONTACT:
Altyn Plc
SOURCE: Altyn Plc
Copyright Business Wire 2020
(END) Dow Jones Newswires
May 01, 2020 02:00 ET (06:00 GMT)
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