TIDMPPHP
RNS Number : 9747C
Papillon Holdings PLC
23 October 2020
Papillon Holdings plc / Index: LSE / Epic: PPHP / Sector:
Investment
Half Year Report
for the Period Ended 30 June 2020
23 October 2020
To the shareholders of Papillon Holdings plc
Chairman's Report
Papillon Holdings PLC (the 'Company' or 'Papillon') is an
investment company incorporated on 19 October 2015, with the
original primary objective of undertaking a single acquisition of a
target company, business or asset in the industrial or service
sector.
On 3 September 2020 the directors of Papillon were delighted to
announce that it had signed a binding Heads of Agreement (the
'Agreement') with Mayflower Capital Investments Pty Limited
('Mayflower') to acquire certain contractual production and
exploration rights held by Mayflower in gold assets located in
Kenya and an option over exploration rights in Congo Brazzaville
being:
-- 100% interest in the Kilimapesa Gold Mine in the Republic of
Kenya, a current producing gold mine with an existing 671,446 oz
JORC resource and with further exploration potential
('Kilimapesa'); and
-- an option to acquire a 70% interest in the Kakamoeka Gold
Project, which includes four exploration licences, covering over
3,000km(2) of the Mayombe Greenstone Belt located in Congo
Brazzaville ('Kakamoeka') (together, the 'Acquisitions')
The Acquisitions are expected to provide the Company with near
term gold production and considerable value upside potential from
resource expansion and mine optimisation at Kilimapesa, in addition
to uplift through the delivery of exploration and development
milestones at Kakamoeka, and are intended to be the first phase of
a strategy to establish a strategic portfolio of African gold
producing assets focussing on known and geologically proven gold
projects.
The directors believe that securing a near-term gold asset,
which requires limited capex to bring to fruition, and which is
partnered with significant upside from resource expansion and mine
optimisation activities, is a remarkable find for our investors. We
believe we have a truly exceptional and largely de-risked
opportunity for shareholders to gain exposure to the junior gold
mining industry.
Mayflower is a global natural resources investment group. It
originates, structures and provides principal investment and
management services in order to sufficiently de-risk investments
and pave the way for other investors. With offices in Perth,
Johannesburg and London, Mayflower has a truly global reach to good
quality natural resources assets.
Under the Agreement, Papillon has agreed to acquire the
contractual rights from Mayflower to acquire a 100% interest in
Kilimapesa Gold Pty Limited ('KPG'). KPG is a Kenyan incorporated
company which holds a 100% interest in Kilimapesa and the
associated mining and exploration licences.
Kilimapesa is an established gold mine offering immediate value
to the Company. Kilimapesa is located approximately 230km west of
Nairobi in the historically productive Migori Archaean Greenstone
Belt, Kenya. Kilimapesa has a current mineral resource of 8,715,291
tonnes at 2.40 g/t Au for 671,446 oz Au at a cut-off of 1 g/t.
Production commenced in 2012 with the mine having an established
infrastructure including a processing plant commissioned in 2016
with design capacity of 200 tonnes per day. Kilimapesa was put on
care and maintenance in 2019, primarily due to insufficient
funding.
Mayflower's technical management team is currently on site at
Kilimapesa overseeing and implementing plans for the immediate
recommencement of gold production using the established processing
plant. Further mine and process plant optimisation studies are
underway and are to be implemented upon completion of the
Acquisitions to further increase annual gold production to an
initial rate of 25,000 oz.
The Company has further agreed to acquire the contractual rights
from Mayflower via an option to acquire a 70% interest in Congo
Gold SARL ('CGS'). CGS is a company incorporated in
Congo-Brazzaville which holds a 100% interest in Kakamoeka which
includes four exclusive exploration permits that cover over
3,000km(2) and extend over 50km of strike length of the Mayombe
Greenstone Gold belt from the Angolan border in the south-east to
the Gabon border in the north-east.
Gold production on the Kakamoeka license areas dates back to the
1940s and small-scale artisanal mining continues to this day.
Modern exploration and development commenced only in 2011, with
mapping, soil geochemistry, trenching, and multiple RAB and core
drilling completed over multiple gold centres identified at
Kakamoeka.
Kakamoeka is considered by the Company as an advanced and highly
attractive gold exploration project. Previous drilling has already
defined two advanced gold projects, 15km of strike and several
zones of near surface gold mineralisation through laboratory assay.
These results include 3m at 7.19g/t Au from 7m, 3m at 5.54g/t Au
from 1m, 3m at 6.49g/t from 3m, 3m at 4.90g/t from 6m and 3m at
6.95g/t from 4m. In addition, visible gold was recorded in a number
of samples from the drill holes.
The Company will complete further drilling in 2020 to define a
maiden JORC compliant resource at Kakamoeka with seven drill ready
targets already identified and numerous additional targets ready
for the Company's earlier stage exploration work to commence.
Going forward, the Company's strategy is to establish a
strategic portfolio of gold producing and development assets
focussing on existing gold resources and assets in proven and
well-established gold mining regions in Africa. The Company is
actively working with Mayflower in the identification and further
potential acquisition of gold projects which meet these
criteria.
The Acquisitions are subject, inter alia, to the completion of
due diligence, documentation and compliance with all regulatory
requirements, including the Listing and Prospectus Rules and, as
required, the Takeover Code. The Acquisitions, if they proceed,
will constitute a Reverse Takeover under the Listing Rules and
therefore the listing in the Company's ordinary shares will remain
suspended pending the re-admission of the Ordinary Shares to the
Standard Listing Segment of the London Stock Exchange. The Company
is working on the preparation of a prospectus in relation to the
Acquisitions which will, in due course, be submitted to UKLA for
approval and making application for the enlarged Company to have
its Ordinary Shares re-admitted to the Standard Listing segment of
the London Stock Exchange.
Certain new directors will be joining the Board including Jason
Brewer, who will join as an Executive Director together with Dr
Elena Clarici and Gerard Kisby-Green who will both join as
Non-Executive Directors. Lord Monson, currently a Non-Executive
Director of the Company, will become Non-Executive Chairman,
replacing James Longley, who will remain as CFO. The new
appointments will be subject to the standard director checks and
the completion of the Transaction and re-listing of Papillon.
Mayflower will continue to serve the Board in an advisory
capacity focussing on identifying and negotiating the potential
acquisitions of advanced and producing gold projects in East Africa
as part of the Company's growth and gold production strategy.
Furthermore, as a part of due diligence and testing the state of
operations, Kilimapesa successfully recommenced gold production
with the first smelt taking place on Monday 14 September 2020
yielding a 3,377g (87oz) gold bar, and with the intention to
continue gold production at the mine. Further to this, Mayflower
has confirmed that a further gold pour was completed at Kilimapesa
on Monday 5 October 2020, the second gold pour since Mayflower
recommenced processing operations last month, with almost twice the
gold ore produced from the first gold pour on 14 September
2020.
Additionally, an updated Competent Person Report (CPR) has been
successfully completed and will be released as a part of
re-admission documentation. Dr. Cedric Simonet from Akili Mineral
Services Ltd is acting as Competent Person.
The Parties are pleased to confirm that additional funding of
approximately US$500,000 from European-based investors has been
obtained, of which US$165,000 was advanced to Goldplat PLC on 9
October 2020. This additional funding takes the total amount
advanced towards securing Kilimapesa to US$300,000, and satisfies
the minimum expenditure requirements, which was one of the key
terms of Mayflower's proposed acquisition of Kilimapsea from
AIM-listed Goldplat PLC. The balance of monies will be used to fund
the continued operation and other onsite activities at the
Kilimapesa Gold Mine in Kenya through to completion of the
Transaction.
Furthermore, Mayflower has agreed an extension with Goldplat PLC
for completion of the acquisition of Kilimapesa, to allow for the
Company to complete the Transaction and reverse takeover ('RTO')
with Mayflower, as announced by Goldplat PLC on 1 October 2020.
The Parties are pleased to confirm that all key consultants for
the Transaction have now been appointed and work regarding
finalising the Prospectus for the RTO is well underway. The
Parties, along with key creditors, are working on a capital
reorganisation and funding plan for Papillon, to better position
the Company to progress its new African gold mining and production
strategy. This draft restructuring plan has also been provided to
Goldplat PLC as part of the terms of Mayflower's acquisition of
Kilimapesa.
Update on Pace Cloud Limited
On 18 May 2018, the Company reached an agreement via a
non-binding head of terms to make an investment in 50% of the
issued share capital of a fintech company, Pace Cloud Limited
('Pace Cloud'). Papillon had fulfilled the terms of its investment
of GBP550k to achieve a 50% equity interest in Pace Cloud, the
prospectus was approved by UKLA and the company brokers were ready
to proceed with the placing. However, the directors and
shareholders of Pace Cloud informed us they no longer wished to
proceed with the transaction. Papillon is yet to receive a
realistic proposal from Pace Cloud directors and shareholders as to
how they intend to fulfil their legal obligations regarding the
substantial transaction costs and substantial loan advances to them
to date. Furthermore, the Papillon Board of directors has
determined that, in the current circumstances, 60% of the assets
and benefits arising from the terminated relationship with Pace
Cloud will be spun off into a separate private entity owned by the
existing shareholder base, contemporaneously with the transaction
contemplated above, with the balance being retained in Papillon
together with a receivable from the spun-off company of GBP480,000
payable when the spun off company realises its investment in Pace
Cloud Limited. The shareholding and receivable to be retained by
Papillon is to compensate the incoming shareholders of Papillon for
the debts incurred pursuing the Pace Cloud transaction
Results for the period
For the period from 1 January 2020 to 30 June 2020, the
Company's results included the ongoing running costs of the Company
including listing fees on the London Stock Exchange and other
advisory costs.
Risks and uncertainties
The Company is a relatively new entity, with only a brief
operating history, and therefore, investors have no basis on which
to evaluate the Company's ability to achieve its objective of
identifying, acquiring and operating one or more companies or
businesses.
Whilst the company has executed an agreement to acquire certain
contractual production and exploration rights held by Mayflower in
gold assets located in Kenya and an option over exploration rights
in Congo Brazzaville the directors are unable to offer assurance
that the relisting of Papillon will complete and /or that we will
be able to raise the necessary funds via debt a placing upon
re-listing to enable the combined group to fulfil its short term
plans.
Going Concern
As stated in Note 1 to the condensed financial statements, the
directors are satisfied that the Company has sufficient resources
to continue in operation for the foreseeable future, a period of
not less than 12 months from the date of this report. Accordingly,
they continue to adopt the going concern basis in preparing the
condensed financial statements.
Responsibility Statement
We confirm that to the best of our knowledge:
(a) the condensed set of financial statements has been prepared
in accordance with IAS 34 'Interim Financial Reporting';
(b) the interim management report includes a fair review of the
information required by DTR 4.2.7R (indication of important events
during the first six months and description of principal risks and
uncertainties for the remaining six months of the year; and
(c) the interim management report includes a fair review of the
information required by DTR 4.2.8R (disclosure of related parties'
transactions and changes therein).
Cautionary statement
This Interim Management Report (IMR) has been prepared solely to
provide additional information to shareholders to assess the
Company's strategies and the potential for those strategies to
succeed. The IMR should not be relied on by any other party or for
any other purpose.
James Longley
Director
23 October 2020
PAPILLON HOLDINGS PLC
INTERIM CONDENSED STATEMENT OF COMPREHENSIVE INCOME
Period ended Period ended Year ended
30 June 30 June 31 December
2020 2019 2019
GBP ('000) GBP ('000) GBP ('000)
(unaudited) (unaudited) (audited)
Continuing operations -
Administrative expenses (74) (154) (434)
Finance costs (91) (42) (122)
Listing costs (12) (17) (33)
Other income: interest
received 12 15 7
-------------- -------------- --------------
Loss before taxation (165) (198) (582)
Taxation - - -
-------------- -------------- --------------
Loss for the period (165) (198) (582)
Loss per share - basic
and diluted (pence) (0.125p) (0.150p) (0.440p)
-------------- -------------- --------------
PAPILLON HOLDINGS PLC
INTERIM CONDENSED STATEMENT OF CHANGES IN EQUITY
Share Share premium Loan Note Retained Total
Capital Equity earnings
GBP ('000) Reserve
GBP ('000) GBP ('000) GBP ('000) GBP ('000)
Equity at 31 December
2018 132 602 6 (961) (221)
Loss for the Period (198) (198)
Equity element of
10% convertible loan
notes 7
------------ ------------ ------------ ------------ ------------
Equity at 30 June
2019 132 602 13 (1,159) (412)
Loss for period (294) (294)
Equity element of
10% convertible loan
notes 9 9
------------ ------------ ------------ ------------ ------------
Equity at 31 December
2019 132 602 22 (1,453) (697)
Loss for period (165) (165)
Equity element of
10% convertible loan
notes (22) (22)
------------ ------------ ------------ ------------ ------------
Equity at 30 June
2020 132 602 - (1,618) (884)
PAPILLON HOLDINGS PLC
INTERIM CONDENSED STATEMENT OF FINANCIAL POSITION
As at As at As at
30 June 30 June 31 December
2020 2019 2019
GBP ('000) GBP ('000) GBP ('000)
Notes (unaudited) (unaudited) (audited)
Assets
Current assets
Prepayments & other receivables
3 542 407 480
Cash and cash equivalents 10 3 -
-------------- -------------- --------------
Total Assets 552 410 480
Equity and Liabilities
Share capital 132 132 132
Share premium 602 602 602
Loan Note reserve - 13 22
Retained earnings (1,618) (1,159) (1,453)
-------------- -------------- --------------
Total Equity (884) (412) (697)
Current Liabilities
Trade and other payables 936 335 699
Convertible loan notes 500 487 478
-------------- -------------- --------------
Total Liabilities 1,436 822 1,177
-------------- -------------- --------------
Total Equity and Liabilities 552 410 480
PAPILLON HOLDINGS PLC
INTERIM CONDENSED CASH FLOW STATEMENT
Period ended Period ended Year ended
30 June 30 June 31 December
2020 2019 2019
GBP ('000) GBP ('000) GBP ('000)
(unaudited) (unaudited (audited)
)
Cash flows from operating
activities
Operating loss (165) (198) (582)
(Increase)/decrease in
trade and other receivables (62) (238) (311)
Increase/decrease in trade
and other payables 237 108 562
-------------- -------------- --------------
Net cash flows from operating
activities 10 (328) (331)
Net cash flows from financing
activities
Issue of 10% Convertible
Loan Notes - 300 300
-------------- -------------- --------------
Net increase in cash and
cash equivalents 10 (28) (31)
Cash and cash equivalents
at the beginning of the
period - 31 31
-------------- -------------- --------------
Cash and cash equivalents
at the end of the period 10 3 -
NOTES TO THE UNAUDITED INTERIM CONDENSED REPORT
1. General Information
Papillon Holdings Plc ('the company') is an investment company
incorporated in the United Kingdom. The address of the registered
office is 27-28 Eastcastle Street London W1E 8DN. The Company was
incorporated and registered in England and Wales on 19 October 2015
as a private limited company and re-registered on 24 June 2016 as a
public limited company.
2. Basis of preparation
This announcement was approved and authorised to issue by the
Board of directors on 23 October 2020.
The financial information in this interim report has been
prepared in accordance with the International Financial Reporting
Standards. IFRS comprises standards issued by the International
Accounting Standards Board (IASB) and the interpretations issued by
the International Financial Reporting Interpretations Committee
(IFRIC) as adopted by the European Union (EU).
There are no IFRS, or IFRIC interpretations that are effective
for the first time in this period that would be expected to have a
material impact on the company.
The financial information has been prepared under the historical
cost convention, as modified by the accounting standard for
financial instruments at fair value.
The Directors are of the opinion that the financial information
should be prepared on a going concern basis, in the light of the
Company's financial resources.
The accounting policies applied by the Company in these
unaudited condensed interim financial statements are the same as
those applied by the Company in its audited financial statements
for the period ended 31 December 2019 except as detailed below.
These condensed interim financial statements for the six months
ended 30 June 2020 and 30 June 2019 have been prepared in
accordance with International Accounting Standard No. 34, 'Interim
Financial Reporting', are unaudited and do not constitute full
accounts. The comparative figures for the period ended 31 December
2019 are extracted from the 2019 audited financial statements. The
independent auditor's report on the 2019 financial statements was
not qualified.
No taxation charge has arisen for the period and the Directors
have not declared an interim dividend.
Copies of the interim report can be found on the Company's
website at www.papillonholdingsplc.com.
Going concern
The directors are satisfied that the Company has sufficient
resources to continue in operation for the foreseeable future, a
period of not less than 12 months from the date of this report.
Accordingly, they continue to adopt the going concern basis in
preparing the condensed financial statements.
3. Prepayments and other receivables
Period ended Period ended Year ended
30 June 30 June 31 December
2020 2019 2019
GBP('000) GBP ('000) GBP ('000)
(unaudited) (unaudited) (audited)
Prepayments and other
receivables 32 59 23
Other receivables
-
Pace Cloud Limited 510 348 457
-------------- -------------- --------------
542 407 480
-------------- -------------- --------------
4. Loss per share
Basic loss per share is calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average
number of ordinary shares outstanding during the period.
For diluted loss per share, the weighted average number of
ordinary shares in issue is adjusted to assume conversion of all
dilutive potential ordinary shares.
The calculation of basic and diluted earnings per share is based
on the following figures:-
Period ended Period ended Year ended
30 June 30 June 31 December
2020 2019 2019
GBP GBP GBP
(unaudited) (unaudited) (audited)
Loss for the period (164,927) (198,460) (582,404)
Weighted average number
of
shares - basic and
diluted 132,400,000 132,400,000 132,400,000
Basic earnings per
share (0.149p) (0.150p) (0.440p)
-------------- -------------- --------------
Diluted earnings per
share (0.125p) (0.150p) (0.440p)
-------------- -------------- --------------
The basic and diluted earnings per share are the same, since
where a loss is incurred the effect of outstanding share options
and warrants is considered anti-dilutive and is ignored for the
purpose of the loss per share calculation.
5. Share Capital
As at 30 As at 30 As at 31
June June December
2020 2019 2019
GBP ('000) GBP ('000) GBP ('000)
(unaudited) (unaudited) (audited)
132,400,000 Ordinary
shares of GBP0.001
each (132) (132) (132)
-------------- -------------- --------------
6. Convertible loan notes
On 26 October 2018 the Company issued GBP100,000 convertible
loan notes, repayable on 25 October 2019 if not converted into
shares prior to that date, and bearing interest at 10% p.a, payable
quarterly in arrears. On 28 November 2018 the Company also issued
GBP100,000 convertible loan notes, repayable on 27 November 2019 if
not converted into shares prior to that date, and bearing interest
at 10% p.a, payable quarterly in arrears. On 16(th) May 2019 the
Company also issued GBP300,000 convertible loan notes, repayable on
15(th) May 2020 if not converted into shares prior to that date,
and bearing interest at 10% p.a, payable quarterly in arrears.
The net proceeds from the three separate issues of the loan
notes have previously been split between the liability element and
an equity component, representing the fair value of the embedded
option to convert the liability into equity of the Company.
The Directors have determined the fair value of the liability
component of the loan notes at 30 June 2020 to be GBP500,000. As
the conversion date has passed on the loan notes no discounting of
future cashflows have been calculated and therefore the loan notes
are shown at par value. Comparative calculations of fair value were
calculated by discounting the future cash flows at the deemed
market rate of 12%.
7. Reports
A copy of this announcement will be mailed to shareholders and
copies will be available for members of the public at the Company's
Registered Office 27-28 Eastcastle Street London W1E 8DN
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.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
IR FEUFMEESSEDS
(END) Dow Jones Newswires
October 23, 2020 02:00 ET (06:00 GMT)
Papillon (LSE:PPHP)
Historical Stock Chart
From Oct 2024 to Nov 2024
Papillon (LSE:PPHP)
Historical Stock Chart
From Nov 2023 to Nov 2024
