TIDMHZM
RNS Number : 5592M
Horizonte Minerals PLC
12 May 2020
NEWS RELEASE
12 May 2020
HORIZONTE MINERALS QUARTERLY FINANCIAL STATEMENTS FOR THREE
MONTHSED 31 MARCH 2020
12 May 2020 - Horizonte Minerals Plc, (AIM: HZM, TSX: HZM)
('Horizonte' or the 'Company'), the nickel development company
focused in Brazil, announces it has today published its unaudited
financial results for the three month period to 31 March 2020 and
the Management Discussion and Analysis for the same period. Both of
the above have been posted on the Company's website
www.horizonteminerals.com and are also available on SEDAR at
www.sedar.com .
Highlights for the quarter
-- Horizonte finished the quarter with a strong cash position of
GBP17.0m, being well funded to advance Araguaia towards being
construction ready;
-- Focused on the safety of all Group, employees and
stakeholders by implementing strict health and safety policies
specifically tailored to Covid-19;
-- Both in Brazil and the UK, the teams have adapted well to the
change in circumstances due to Covid-19, including remote working,
with all major workstreams continuing as planned;
-- Nickel market fundamentals remain strong with analyst
consensus prices of $16,150 at the time Araguaia is forecast to
commence production, compared to a consensus forecast price of
$16,188 observed at 31 December 2019 before the effects of
Covid-19;
-- Project financing process currently running to schedule with
no negative effects on the process observed as a result of the
Covid-19 pandemic, although a delay to the process may occur if
"lock-down" continues for a longer period of time. It remains
presently too early to tell if this is the case; and
-- Work on Araguaia is focussed around advancing the level of
engineering from Feasibility stage level through to being
implementation ready.
Events after the Reporting Date
-- The Group committed to donating 300 food parcels during April
& May 20 to the municipalities of Conceição do Araguaia,
Floresta do Araguaia and Xinguara, in light of the socio-economic
impact caused by Covid-19.
Horizonte Minerals plc
Condensed Consolidated Interim Financial Statements for the nine
months ended 31 March 2020
Condensed consolidated statement of comprehensive income
3 months ended
31 March
2020 2019
---------------------------------------------------------------------------------- ------ ------------ ------------
Unaudited Unaudited
---------------------------------------------------------------------------------- ------ ------------ ------------
Notes GBP GBP
---------------------------------------------------------------------------------- ------ ------------ ------------
Continuing operations
Revenue - -
Cost of sales - -
---------------------------------------------------------------------------------- ------ ------------ ------------
Gross profit - -
Administrative expenses (674,457) (517,987)
Charge for share options granted - (129,993)
Change in value of contingent consideration 5 (483,010) 311,048
Gain/(Loss) on foreign exchange 941,446 (56,241)
---------------------------------------------------------------------------------- ------ ------------ ------------
Loss from operations (216,021) (393,173)
Finance income 45,245 12,951
Finance costs 6 (857,992) (73,248)
---------------------------------------------------------------------------------- ------ ------------ ------------
Loss before taxation (1,028,768) (453,470)
Taxation - -
---------------------------------------------------------------------------------- ------ ------------ ------------
Loss for the year from continuing operations (1,028,768) (453,470)
================================================================================== ====== ============ ============
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Change in value of available for sale financial assets
Currency translation differences on translating foreign operations (6,609,872) (1,094,562)
---------------------------------------------------------------------------------- ------ ------------ ------------
Other comprehensive income for the period, net of tax (6,609,872) (1,094,562)
---------------------------------------------------------------------------------- ------ ------------ ------------
Total comprehensive income for the period
attributable to equity holders of the Company (7,638,640) (1,548,032)
---------------------------------------------------------------------------------- ------ ------------ ------------
Earnings per share from continuing operations attributable to the equity holders
of the Company
Basic and diluted (pence per share) 10 (0.071) (0.032)
Condensed consolidated statement of financial position
31 March 31 December
2020 2019
Unaudited Audited
------------------------------ -------------- ------------- -------------
Notes GBP GBP
------------------------------ -------------- ------------- -------------
Assets
Non-current assets
Intangible assets 7 7,531,221 7,057,445
Property, plant & equipment 27,055,598 32,260,544
34,586,819 39,317,989
------------------------------ -------------- ------------- -------------
Current assets
Trade and other receivables 138,319 134,726
Derivative financial
asset 2,433,533 2,246,809
Cash and cash equivalents 16,993,664 17,760,330
------------------------------ -------------- ------------- -------------
19,565,516 20,141,865
------------------------------ -------------- ------------- -------------
Total assets 54,152,335 59,459,854
============================== ============== ============= =============
Equity and liabilities
Equity attributable
to owners of the parent
Issued capital 9 14,463,773 14,463,773
Share premium 9 41,785,306 41,785,306
Other reserves (11,276,803) (4,666,930)
Accumulated losses (20,863,860) (19,835,092)
------------------------------ -------------- ------------- -------------
Total equity 24,108,416 31,747,057
------------------------------ -------------- ------------- -------------
Liabilities
Non-current liabilities
Contingent consideration 5 6,835,335 6,246,071
Royalty Finance 8 22,607,829 20,570,411
Deferred tax liabilities 175,380 212,382
------------------------------ -------------- ------------- -------------
29,618,544 27,028,864
------------------------------ -------------- ------------- -------------
Current liabilities
Trade and other payables 425,375 683,933
Deferred consideration 5 - -
------------------------------ -------------- ------------- -------------
425,375 683,933
------------------------------ -------------- ------------- -------------
Total liabilities 30,043,919 27,712,684
------------------------------ -------------- ------------- -------------
Total equity and liabilities 54,152,335 59,459,854
============================== ============== ============= =============
Condensed statement of changes in shareholders' equity
Attributable to the owners of the parent
--------------------------------------------------------------------
Share Share Accumulated Other
capital premium losses reserves Total
GBP GBP GBP GBP GBP
---------------------- ----------- ----------- ------------- ------------- ------------
As at 1 January
2019 14,325,218 41,664,018 (16,990,291) (2,039,991) 36,958,954
---------------------- ----------- ----------- ------------- ------------- ------------
Comprehensive income
Loss for the period - - (453,470) - (453,470)
Other comprehensive
income
Currency translation
differences - - - (1,094,562) (1,094,562)
---------------------- ----------- ----------- ------------- ------------- ------------
Total comprehensive
income - - (453,470) (1,094,562) (1,548,032)
---------------------- ----------- ----------- ------------- ------------- ------------
Transactions with
owners
Issue of ordinary
shares 138,555 121,288 - - 259,843
Issue costs - - - - -
Share based payments - - 129,993 - 129,993
---------------------- ----------- ----------- ------------- ------------- ------------
Total transactions
with owners 138,555 121,288 129,993 - 389,836
As at 31 March 2019 14,463,773 41,785,306 (17,313,768) (3,134,553) 35,800,758
====================== =========== =========== ============= ============= ============
Attributable to the owners of the parent
--------------------------------------------------------------------
Share Share Accumulated Other
capital premium losses reserves Total
GBP GBP GBP GBP GBP
---------------------- ----------- ----------- ------------- ------------- ------------
As at 1 January
2020 14,463,773 41,785,306 (19,835,092) (4,666,930) 31,747,057
---------------------- ----------- ----------- ------------- ------------- ------------
Comprehensive income
Loss for the period - - (1,028,768) - (1,028,768)
Other comprehensive
income
Currency translation
differences - - - (6,609,872) (6,609,872)
---------------------- ----------- ----------- ------------- ------------- ------------
Total comprehensive
income - - (1,028,768) (6,609,872) (7,638,640)
---------------------- ----------- ----------- ------------- ------------- ------------
Transactions with
owners
Issue of ordinary - - - - -
shares
Issue costs - - -
Share based payments - - - - -
---------------------- ----------- ----------- ------------- ------------- ------------
Total transactions - - - - -
with owners
As at 31 March 2020
(unaudited) 14,463,773 41,785,306 (20,863,860) (11,276,803) 31,747,057
====================== =========== =========== ============= ============= ============
Condensed Consolidated Statement of Cash Flows
3 months ended
31 March
---------------------------------------------------- --------------------------
2020 2019
---------------------------------------------------- ------------ ------------
Unaudited Unaudited
---------------------------------------------------- ------------ ------------
GBP GBP
Cash flows from operating activities
Loss before taxation (1,028,768) (453,470)
Interest income (45,245) (12,951)
Finance costs 857,992 73,248
Exchange differences (941,446) 56,241
Employee share options charge - 129,993
Change in fair value of contingent consideration 483,010 (311,048)
Depreciation - -
---------------------------------------------------- ------------ ------------
Operating loss before changes in working capital (674,457) (517,987)
Decrease/(increase) in trade and other receivables (2,875) (14,115)
(Decrease)/increase in trade and other payables (122,207) 2,790
----------------------------------------------------- ------------ ------------
Net cash outflow from operating activities (799,539) (529,312)
===================================================== ============ ============
Cash flows from investing activities
Purchase of intangible assets (726,667) (667,335)
Purchase of property, plant and equipment (227,151) -
Interest received 45,245 12,951
----------------------------------------------------- ------------ ------------
Net cash used in investing activities (908,573) (654,384)
----------------------------------------------------- ------------ ------------
Cash flows from financing activities
Proceeds form issue of ordinary shares - -
Issue costs - -
---------------------------------------------------- ------------ ------------
Net cash used in financing activities - -
---------------------------------------------------- ------------ ------------
Net decrease in cash and cash equivalents (1,708,112) (1,183,696)
Cash and cash equivalents at beginning of period 17,760,330 6,527,115
Exchange gain/(loss) on cash and cash equivalents 941,446 (55,405)
----------------------------------------------------- ------------ ------------
Cash and cash equivalents at end of the period 16,993,664 5,288,014
===================================================== ============ ============
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 2019, 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 2019 were approved by the Board of Directors on
07 April 2020 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 31 March 2020. Please refer to note 2.2 in the annual report
for 2019 for the assessment of the current Covid-19 pandemic on the
operations of the Group.
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 2019 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 2019 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
2019.
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.
2020 UK Brazil Other Total
3 months 3 months 3 months 3 months
ended ended ended ended
31 March 31 March 31 March 31 March
2020 2020 2020 2020
GBP GBP GBP GBP
-------------------------------- ----------- ------------ ----------- ------------
Revenue - - - -
-------------------------------- ----------- ------------ ----------- ------------
Administrative expenses (438,461) (164,394) (71,602) (674,457)
Gain/(loss) on foreign
exchange 1,000,147 (58,701) - 941,446
Gain/(loss) from operations
per reportable segment 561,686 (223,095) (71,602) 266,989
Inter segment revenues - - - -
Depreciation charges - - - -
Additions and foreign exchange
movements to non-current
assets - (4,662,781) - (4,662,781)
Reportable segment assets 16,907,810 34,810,992 2,433,533 54,152,335
Reportable segment liabilities 7,003,893 432,197 22,607,829 30,043,919
2019 UK Brazil Other Total
3 months 3 months 3 months 3 months
ended ended ended ended
31 March 31 March 31 March 31 March
2019 2019 2019 2019
GBP GBP GBP GBP
-------------------------------- ----------- ------------ ----------- ------------
Revenue - - - -
-------------------------------- ----------- ------------ ----------- ------------
Administrative expenses (329,058) (188,929) - (517,987)
Loss on foreign exchange (20,593) (35,648) - (56,241)
Loss from operations per
reportable segment (349,651) (224,577) - (574,228)
Inter segment revenues - - - -
Depreciation charges - - - -
Additions and foreign exchange
movements to non-current
assets - (460,995) - (460,995)
Reportable segment assets 4,455,208 36,141,195 - 40,596,403
Reportable segment liabilities 4,377,828 417,816 - 4,795,644
A reconciliation of adjusted loss from operations per reportable
segment to loss before tax is provided as follows:
3 months 3 months
ended ended
31 Mar 2020 31 Mar 2019
GBP GBP
-------------------------------------- ------------- -------------
Profit/(loss) from operations
per reportable segment 266,988 (574,228)
- Change in fair value of contingent
consideration (483,010) 311,048
- Charge for share options granted - (129,993)
- Finance income 45,245 12,951
- Finance costs (857,992) (73,248)
Loss for the period from continuing
operations (1,028,769) (453,470)
======================================= ============= =============
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 GBP3,256,690 at 31 March 2020 (2019:
GBP3,085,005). It comprises 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 based on the current rates of tax on profits in
Brazil of 34% and a discount factor of 7.0% along with the
estimated date of first commercial production.
As at 31 March 2020, there was a finance expense of GBP50,624
(2019: GBP50,356) 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 loss of GBP230,130 for
the three months ended 31 March 2020 (2019: GBP279,321 credit) due
to changes in the value of the functional currency in which the
liability is payable (USD).
Contingent Consideration payable to Vale Metais Basicos S.A.
The contingent consideration payable to Vale Metais Basicos S.A.
has a carrying value of GBP3,578,643 at 31 March 2020 (2019:
GBPnil). It comprises US$6,000,000 consideration in cash as at the
date of first commercial production from the Vermelho project and
was recognised for the first time in December 2019, following the
publication of a PFS on the project. The key assumptions underlying
the treatment of the contingent consideration the US$6,000,000 are
the same as those for the Xstrata contingent consideration and are
based on the current rates of tax on profits in Brazil of 34% and a
discount factor of 7.0% along with the estimated date of first
commercial production.
As at 31 March 2020, there was a finance expense of GBP55,630
(2019: GBPnil ) 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 Vale Metais Basicos S.A. generated a loss of GBP252,880 for the
three months ended 31 March 2020 (2019: GBPnil) due to changes in
the value of the functional currency in which the liability is
payable (USD).
6. Finance income and costs
3 months 3 months
ended ended
31 Mar 2020 31 Mar 2019
GBP GBP
---------------------------------------------- ------------- -------------
Finance income
- Interest income on cash and short-term
deposits 45,245 12,951
Finance costs
- Contingent and deferred consideration:
unwinding of discount (106,254) (73,248)
- Amortisation of Royalty Finance (792,622) -
- Fair Value adjustment on royalty - -
- Movement in fair value of derivative asset 40,885 -
Total finance costs (857,992) (73,248)
Net finance costs (812,747) (60,297)
============================================== ============= =============
7. Intangible assets
Intangible assets comprise exploration and evaluation costs and
goodwill. Exploration and evaluation costs comprise internally
generated and acquired assets.
Exploration
and
Goodwill Exploration evaluation Total
licences costs
GBP GBP GBP GBP
------------------------- --------- ------------ ------------ ----------
Cost
At 1 January 2020 210,585 4,534,392 2,312,467 7,057,444
Additions - - 660,447 660,447
Exchange rate movements (36,688) 273,525 (423,507) (186,670)
Net book amount at 31
March 2020 173,897 4,807,917 2,549,407 7,531,221
========================= ========= ============ ============ ==========
8. Royalty financing liability
3 months 3 months
ended ended
31 Mar 2020 31 Mar 2019
GBP GBP
------------------------------- ------------- -------------
Brought forward carrying value 20,570,411 -
Unwinding of discount 792,622 -
Change in fair value - -
Effects of foreign exchange 1,244,796 -
Value as at end of period 22,607,829 -
=============================== ============= =============
9. Share Capital and Share Premium
Issued and fully Ordinary
paid Number of shares Share premium Total
shares GBP GBP GBP
------------------- -------------- ----------- -------------- -----------
At 1 January 2020 1,446,377,287 14,463,773 41,785,306 56,249,079
At 31 March 2020 1,446,377,287 14,463,773 41,785,306 56,249,079
------------------- -------------- ----------- -------------- -----------
10. Dividends
No dividend has been declared or paid by the Company during the
months ended 31 March 2020 (2019: nil).
11. Earnings per share
The calculation of the basic loss per share of 0.071 pence for
the 3 months ended 31 March 2020 (31 March 2019 loss per share:
0.031 pence) is based on the loss attributable to the equity
holders of the Company of GBP1,028,769 for the three month period
ended 31 March 2020 (3 months ended 31 March 2019: GBP453,470)
divided by the weighted average number of shares in issue during
the period of 1,446,377,287 (weighted average number of shares for
the 3 months ended 31 March 2019: 1,442,836,440).
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 2019 and in note 11 below.
12. Issue of Share Options
On 12 February 2019, the Company awarded 2,000,000 share options
to leading members of the Brazilian operations team. All of these
share options have an exercise price of 4.80 pence. One third of
the options are exercisable from August 2019, one third from
February 2019 and one third from August 2020.
13. Ultimate controlling party
The Directors believe there to be no ultimate controlling
party.
14. 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 2019.
15. 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 11 May 2020.
For further information contact:
Horizonte Minerals plc
+44 (0) 203 356
Jeremy Martin (CEO) 2901
Numis Securities Ltd (NOMAD & Joint Broker)
John Prior +44 (0) 207 260
Paul Gillam 1000
Tavistock (Financial PR)
Gareth Tredway +44 (0) 207 920
Annabel de Morgan 3150
About Horizonte Minerals:
Horizonte Minerals plc is an AIM and TSX-listed nickel
development company focused in Brazil. The Company is developing
the Araguaia project, as the next major ferronickel mine in Brazil,
and the Vermelho nickel-cobalt project, with the aim of being able
to supply nickel and cobalt to the EV battery market. Both projects
are 100% owned.
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION
Except 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; 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.
**ENDS**
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
QRFFLFFAEVILLII
(END) Dow Jones Newswires
May 12, 2020 02:00 ET (06:00 GMT)
Horizonte Minerals (LSE:HZM)
Historical Stock Chart
From Apr 2024 to May 2024
Horizonte Minerals (LSE:HZM)
Historical Stock Chart
From May 2023 to May 2024
