TRI-STAR RESOURCES
PLC
(“Tri-Star” or the “Company”)
30 September 2019
Interim Results
for the six month period ended 30 June
2019
Tri-Star (AIM: TSTR), the mining and minerals processing
company, is pleased to announce its unaudited results for the six
months ended 30 June 2019.
Highlights:
- SPMP antimony and gold production facility in the Sultanate of
Oman Plant commissioned
- First antimony metal produced at 99.11% which is approaching
commercial grades of 99.65%
- First gold doré ingots produced
- Ramp up expected to be completed by Q3 2020
- Targeting in excess of 50,000 oz of gold and 20,000 tonnes in
combined antimony metal and antimony trioxide (“ATO”) per
annum
- Supply and offtake agreement discussions ongoing with
international entities and companies
- SPMP financing progressing
- Tri-Star financials improving:
- Profit before tax of £422k (H1 2018: loss before tax of
£1,159k)
- On-going administrative expenses down 51% to £328k (H1 2018:
£668k)
- Net assets increased 270% to £17.8m (30
June 2018: £4.9m) reflecting the increase in the SPMP
loan
Adrian
Collins, Chairman commented;
“I am pleased with the progress that
SPMP has made during the first half of the year reaching two
milestones: the production of antimony metal, albeit just below
commercial grade, and gold doré at commercial grade although in
limited quantities to date. Following the expected completion
of the SPMP funding, I expect SPMP to move through a gradual ramp
up to be completed during Q3 next year. I am confident that
Steven Din and his team have the
experience and the drive to achieve this.”
Chairman’s Statement:
During the period, Tri-Star’s principal activity continued to be
its investment in an antimony and gold production facility in the
Sultanate of Oman (the “SPMP
Project” or the “Project”) which is being developed by Strategic
& Precious Metals Processing LLC (“SPMP”), an Omani company in
which Tri-Star has a 40% equity interest.
The SPMP Project is the largest antimony roaster outside of
China and the world’s first ‘Clean
Plant’, designed to EU environmental standards. It has a
targeted capacity to produce in excess of 50,000 oz. of gold and
20,000 tonnes in combined antimony metal and antimony trioxide
(“ATO”) per annum. All joint venture partners in the SPMP
Project, being us, The Oman Investment Fund (“OIF”) (40% equity
holder) and DNR Industries Limited, part of Dutco Group in
Dubai (20% equity holder), remain
supportive and committed to achieving commercial
production.
The SPMP team has made good progress in the first half of 2019
with the operational problems inherited by the new leadership being
largely resolved. Remedial works were undertaken to resolve
technical issues, which included modifications to the Calcine
Furnace and the installation of a new gas handling system. The
Calcine Furnace has been operational since 9
May 2019, leading to the first on-specification gold doré
being produced during August
2019.
Material handling at the roaster has been highlighted as a plant
feed bottleneck. In the short term, this has been overcome by
utilising a rented crushing circuit while a permanent solution is
being designed and installed.
The antimony Reduction Furnace has been operating satisfactorily
on low power input since 3 July 2019
after hearth and rectifier modifications. Mechanical design
problems, relating to the downstream Rotary Converter and the
associated ingot casting machine, are receiving priority attention
as these are restricting the production ramp up in this
section. As announced on 19 August
2019, antimony metal quality was 99.11% and SPMP is
confident in achieving the 99.65% commercial grade shortly.
Following the team’s intensive experience with plant
rectification over recent months, the degree of certainty for the
remaining period of ramp up is greatly improved.
With regards to supply and offtake, SPMP has teams dedicated to
achieving agreements. These discussions are going well and
are expected to be realised as ramp up proceeds.
As a result of the delays and the need to resolve processing
issues, SPMP requires further funding, in addition to the current
banking facilities, which are almost fully drawn. Hannam
& Partners was appointed in June
2019 to assist SPMP in raising debt investment and their
work is ongoing. A number of interested parties have been
identified and due diligence is currently ongoing. The
primary aim of the fund raising is to ensure that SPMP will be
fully funded through to being cash flow positive. The
quantum, timing and terms of the potential debt are still under
discussion, and in parallel with Hannam & Partners SPMP are
pursuing alternative financing options.
The conversion of the mezzanine debt, owned by Tri-Star, which
was initially announced on 20 March
2019, has been agreed but not yet formally approved by the
SPMP shareholders. It is expected to be finalised prior to,
or at the same time as, the completion of the current funding
round. The amount owing to Tri-Star of $22,800,000 plus accrued interest at 1 January 2019 of $2,014,322, will be converted to a non-interest
bearing equity loan, along with proportional
conversions by our co-shareholders. The remaining mezzanine
debt owned by Tri-Star of $2,000,000
plus accrued interest will remain payable on the original
terms.
Group Costs
The Board of Tri-Star has continued to concentrate on aligning
its costs with current levels of activity and, following several
initiatives, it believes that its cost base is now running at an
optimal level. Following the management changes in
April 2019, the Group is now
operating with a greatly reduced team comprising its three
directors and two consultants, all of whom are operating on a part
time basis. As a result, administrative costs in H1 2019 were
half that of the same period in 2018 and stood at £328,000 compared
with £668,000 in H1 2018. In H2 2019 admin costs should fall
further as H1 2019 benefitted from three months only of the reduced
cost base.
In addition to the board changes announced in April 2019, Wally
Channon was appointed an adviser to the board in July
2019. Wally is a highly experienced and qualified
metallurgist and we are already seeing the benefits of his
experience in assisting the SPMP team.
Sale of Turkish operations
The successful sale of the non-core asset Göynük mine in
Turkey completed in early 2019,
for a total cash consideration of USD $0.5m (of which USD$0.1m is due on first product sales from the
mine). The sales agreement neutralised any of Tri-Star’s
liabilities associated with the mine whilst also allowing room for
SPMP to negotiate an offtake agreement on any future production
from the mine.
Outlook:
Progress has been made on all fronts since my last report and we
remain upbeat about the future.
For the ramp up, SPMP is developing a works schedule together
with its consulting engineers. The first major goal of this
schedule is to achieve 50% of capacity for the production of
antimony metal and gold. The SPMP team envisages that barring
unforeseen circumstances and, subject to achieving the financing
discussed above, this initial target will be reached during Q1
2020. Full capacity is planned for Q3 2020.
The market outlook for both gold and antimony remain positive,
despite the currently depressed price of antimony, and with the
optimisation of the SPMP project continuing, progress on supply and
offtake agreements and financing, we are confident that our
investment will generate significant future value for
shareholders.
I’d like to thank the SPMP team for their efforts and
shareholders for their support and I look forward to the future
with confidence particularly as SPMP hits its targets.
ADRIAN
COLLINS
Non-Executive Chairman
TRI-STAR RESOURCES PLC
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE
2019
|
Notes |
Unaudited Period ended 30 June 2019 |
|
Unaudited
Period ended 30 June 2018 (restated) |
|
Audited
Year ended 31 December 2018 |
|
|
£’000 |
|
£’000 |
|
£’000 |
|
|
|
|
|
|
|
Share based payment
charge |
|
(211) |
|
(558) |
|
(580) |
Administrative
expenses |
|
(328) |
|
(668) |
|
(787) |
Total administrative
expenses and loss from operations |
|
(539) |
|
(1,226) |
|
(1,367) |
|
|
|
|
|
|
|
Movement in the fair
value of financial asset |
|
1,657 |
|
427 |
|
293 |
Share of loss in
associated companies |
|
(612) |
|
(56) |
|
(306) |
|
|
|
|
|
|
|
Finance income |
|
1 |
|
2 |
|
43 |
Finance cost |
|
(85) |
|
(306) |
|
(667) |
Profit/(loss)
before taxation |
|
422 |
|
(1,159) |
|
(2,004) |
|
|
|
|
|
|
|
Taxation |
4 |
- |
|
29 |
|
48 |
|
|
|
|
|
|
|
Profit/(loss) after
taxation, and profit/(loss) attributable to the equity holders of
the Company from continuing operations |
|
422 |
|
(1,130) |
|
(1,956) |
|
|
|
|
|
|
|
Loss from
discontinued operations |
|
- |
|
(37) |
|
(70) |
|
|
|
|
|
|
|
Profit on disposal
of discontinued operations |
|
227 |
|
- |
|
- |
|
|
|
|
|
|
|
Profit/(loss) after
taxation, and loss attributable to the equity holders of the
Company |
|
649 |
|
(1,167) |
|
(2,026) |
|
|
|
|
|
|
|
Other comprehensive
(expenditure)/income |
|
|
|
|
|
|
Items that will be
reclassified subsequently to profit and loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange differences
on translating foreign operations |
|
- |
|
(8) |
|
(14) |
Other comprehensive
(expenditure)/income for the period, net of tax |
|
- |
|
(8) |
|
(14) |
|
|
|
|
|
|
|
Total comprehensive
profit/(loss) for the year, attributable to owners of the
company |
|
649 |
|
(1,175) |
|
(2,040) |
|
|
|
|
|
|
|
Total comprehensive
profit/(loss) attributable to |
|
|
|
|
|
|
Non-controlling
interest |
|
- |
|
- |
|
- |
Equity holders of the
parent |
|
649 |
|
(1,175) |
|
(2,040) |
|
|
|
|
|
|
|
Loss per
share |
|
|
|
|
|
|
Basic profit/(loss)
per share (pence) (restated) |
5 |
0.69 |
|
(1.92) |
|
(2.64) |
Diluted profit/(loss)
per share (pence) (restated) |
5 |
0.67 |
|
(1.89) |
|
(2.59) |
CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
AT 30 JUNE 2019
|
|
Unaudited
30 June 2019 |
|
Unaudited
30 June 2018 (restated) |
|
Audited
31 December 2018 |
|
|
|
|
|
|
|
Assets |
Notes |
£'000 |
|
£'000 |
|
£'000 |
|
|
|
|
|
|
|
Non-current |
|
|
|
|
|
|
Intangible assets |
|
- |
|
10 |
|
- |
Investment in
associates |
6 |
524 |
|
1,386 |
|
1,136 |
Loan to associate |
7 |
18,462 |
|
6,071 |
|
16,727 |
Property, plant and
equipment |
|
- |
|
11 |
|
- |
|
|
18,986 |
|
7,478 |
|
17,863 |
Current |
|
|
|
|
|
|
Cash and cash
equivalents |
|
160 |
|
280 |
|
312 |
Asset classified as
held for sale |
|
- |
|
- |
|
23 |
Trade and other
receivables |
|
108 |
|
117 |
|
105 |
Total current
assets |
|
268 |
|
397 |
|
440 |
|
|
|
|
|
|
|
Total
assets |
|
19,254 |
|
7,875 |
|
18,303 |
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
Current |
|
|
|
|
|
|
Trade and other
payables |
|
105 |
|
88 |
|
94 |
Liabilities classified
as held for sale |
|
- |
|
- |
|
2 |
Short term loans |
7 |
1,223 |
|
2,730 |
|
1,129 |
Total current
liabilities |
|
1,328 |
|
2,818 |
|
1,225 |
|
|
|
|
|
|
|
Liabilities due
after one year |
|
|
|
|
|
|
Deferred tax
liability |
|
111 |
|
130 |
|
111 |
Total
liabilities |
|
1,439 |
|
2,948 |
|
1,336 |
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
Issued share
capital |
|
6,884 |
|
5,371 |
|
6,884 |
Share premium |
|
44,819 |
|
33,432 |
|
44,816 |
Share based payment
reserve |
|
1,867 |
|
1,663 |
|
1,671 |
Other reserves |
|
(6,156) |
|
(6,156) |
|
(6,156) |
Translation
reserve |
|
(811) |
|
(805) |
|
(811) |
Retained earnings |
|
(28,784) |
|
(28,574) |
|
(29,433) |
|
|
17,819 |
|
4,931 |
|
16,971 |
|
|
|
|
|
|
|
Non-controlling
interest |
|
(4) |
|
(4) |
|
(4) |
Total
equity |
|
17,815 |
|
4,927 |
|
16,967 |
Total equity and
liabilities |
|
19,254 |
|
7,875 |
|
18,303 |
CONSOLIDATED STATEMENT OF CASH
FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE
2019
|
|
Unaudited Period ended |
|
Unaudited Period ended |
|
Audited
Year ended |
|
Notes |
30
June 2019 |
|
30 June
2018 (restated) |
|
31
December 2018 |
|
|
£'000 |
|
£'000 |
|
£'000 |
Cash flows from
operating activities |
|
|
|
|
|
|
Profit/(loss) after
tax |
|
649 |
|
(1,167) |
|
(2,026) |
Depreciation |
|
- |
|
7 |
|
12 |
Finance income |
|
(1) |
|
(2) |
|
(43) |
Finance cost |
|
85 |
|
306 |
|
667 |
Loss from
associates |
|
612 |
|
56 |
|
306 |
Fees paid by
shares |
|
3 |
|
5 |
|
15 |
Profit on disposal of
subsidiary |
|
(227) |
|
- |
|
- |
Movement in the fair
value of financial asset |
|
(1,657) |
|
(427) |
|
(293) |
Equity settled
share-based payments |
|
196 |
|
558 |
|
565 |
Increase in trade and
other receivables |
|
(3) |
|
(13) |
|
(14) |
Increase/(decrease) in
trade and other payables |
|
13 |
|
8 |
|
(1) |
Net cash outflow
from operating activities |
|
(330) |
|
(669) |
|
(812) |
|
|
|
|
|
|
|
Cash flows from
investing activities |
|
|
|
|
|
|
Loans made to
associate |
7 |
(77) |
|
(2,016) |
|
(12,698) |
Proceeds from sale of
subsidiary |
|
247 |
|
- |
|
- |
Finance income |
|
1 |
|
2 |
|
43 |
Net cash
inflow/(outflow) from investing activities |
|
171 |
|
(2,014) |
|
(12,655) |
|
|
|
|
|
|
|
Cash flows from
financing activities |
|
|
|
|
|
|
Proceeds from issue of
share capital |
|
- |
|
4,420 |
|
17,420 |
Share issue costs |
|
- |
|
(129) |
|
(242) |
Finance costs |
|
- |
|
(161) |
|
(491) |
Repayment of
loans |
7 |
- |
|
(1,805) |
|
(3,560) |
Net cash inflow
from financing activities |
|
- |
|
2,325 |
|
13,127 |
|
|
|
|
|
|
|
Net
increase/(decrease) in cash and cash equivalents |
|
(159) |
|
(358) |
|
(340) |
Cash and cash
equivalents at beginning of period |
|
312 |
|
485 |
|
485 |
Exchange
differences on cash and cash equivalents |
|
7 |
|
153 |
|
167 |
Cash and cash
equivalents at end of period |
|
160 |
|
280 |
|
312 |
CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE
2019
|
Share
capital |
Share
premium account |
Other
reserves |
Share-based payment reserve |
Translation reserve |
Retained earnings |
Total
attributable to owners of parent |
Non-controlling interest |
Total
equity |
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
|
|
|
|
Balance at 1
January 2018 (audited) (restated) |
3,160 |
31,347 |
(6,156) |
1,105 |
(797) |
(27,407) |
1,252 |
(4) |
1,248 |
Issue of share
capital |
2,211 |
2,214 |
- |
- |
- |
- |
4,425 |
- |
4,425 |
Share issue costs |
- |
(129) |
- |
- |
- |
- |
(129) |
- |
(129) |
Share based
payments |
- |
- |
- |
558 |
- |
- |
558 |
- |
558 |
Transactions with
owners |
2,211 |
2,085 |
- |
558 |
- |
- |
4,854 |
- |
4,854 |
Loss for the
period |
- |
- |
- |
- |
- |
(1,167) |
(1,167) |
- |
(1,167) |
Exchange difference on
translation of foreign operations |
- |
- |
- |
- |
(8) |
- |
(8) |
- |
(8) |
Total comprehensive
loss for the period |
- |
- |
- |
- |
(8) |
(1,167) |
(1,175) |
- |
(1,175) |
Balance at 30 June
2018 (unaudited) (restated) |
5,371 |
33,432 |
(6,156) |
1,663 |
(805) |
(28,574) |
4,931 |
(4) |
4,927 |
Issue of share
capital |
1,513 |
11,497 |
- |
- |
- |
- |
13,010 |
- |
13,010 |
Share issue costs |
- |
(113) |
- |
- |
- |
- |
(113) |
- |
(113) |
Share based
payments |
- |
- |
- |
8 |
- |
- |
8 |
- |
8 |
Transactions with
owners |
1,513 |
11,384 |
- |
8 |
- |
- |
12,905 |
- |
12,905 |
Loss for the
period |
- |
- |
- |
- |
- |
(859) |
(859) |
- |
(859) |
Exchange difference on
translation of foreign operations |
- |
- |
- |
- |
(6) |
- |
(6) |
- |
(6) |
Total comprehensive
loss for the period |
- |
- |
- |
- |
(6) |
(859) |
(865) |
- |
(865) |
Balance at 31
December 2018 (audited) |
6,884 |
44,816 |
(6,156) |
1,671 |
(811) |
(29,433) |
16,971 |
(4) |
16,967 |
Issue of share
capital |
|
3 |
- |
- |
- |
- |
3 |
- |
3 |
Share based
payments |
- |
- |
- |
196 |
- |
- |
196 |
- |
196 |
Transactions with
owners |
- |
3 |
- |
196 |
- |
- |
199 |
- |
199 |
Loss for the
period |
- |
- |
- |
- |
- |
649 |
649 |
- |
649 |
Total comprehensive
loss for the period |
- |
- |
- |
- |
- |
649 |
649 |
- |
649 |
Balance at 30 June
2019 (unaudited) |
6,884 |
44,819 |
(6,156) |
1,867 |
(811) |
(28,784) |
17,819 |
(4) |
17,815 |
NOTES TO THE INTERIM REPORT
FOR THE SIX MONTHS ENDED 30 JUNE 2019
1. GENERAL INFORMATION
The financial information set out in this interim report for the
Company, its subsidiaries and associates (the “Group”) does not
constitute statutory accounts as defined in Section 434 of the
Companies Act 2006. The Group’s statutory financial
statements for the year ended 31 December
2018 have been completed and filed at Companies House.
The auditor’s report on the annual financial statements was
unqualified and did not contain statements under section 498(2) or
section 498(3) of the Companies Act 2006.
2. ACCOUNTING POLICIES
BASIS OF PREPARATION
The Company’s ordinary shares are quoted on the AIM market of
the London Stock Exchange and the Company applies the Companies Act
2006 when preparing its annual financial statements.
The annual financial statements for the year ended 31 December 2019 will be prepared under
International Financial Reporting Standards as adopted by the
European Union (IFRS) and the principal accounting policies adopted
remain unchanged from those adopted in preparing its financial
statements for the year ended 31 December
2018.
The accounting policies have been applied consistently
throughout the Group for the purposes of preparation of these
condensed consolidated interim financial statements. IFRS 16 -
Leases has been applied. This had no impact on the parent company
or companies’ subsidiaries accounts, as there are no leases, but
has impacted on the associate’s financial statements. In the
financial statements of the associate, SPMP, the impact of IFRS 16
at 31 December 2018, has been to
recognise the land lease as a right-of-use asset of $10,843,000, with a lease liability of
$10,843,000. At 30 June 2019 the liability was of $10,784,000 of which $9,963,000 is due after one year. The lease costs
were previously capitalised as Property, Plant and equipment, so
there was no impact on retained earnings at 31 December 2018 and therefore no transitional
adjustments to the Group financial statements. The land in Sohar is
leased for 25 years from 25 June
2014. Other equipment leases in SPMP were recognised as
finance leases in 2018 and therefore not impacted by IFRS 16. IFRS
16 has been applied from 1 January
2019 and the modified retrospective transitional provision
has been adopted. As a result of this the comparatives for 2018
have not been restated.
The financial statements for the period ended 30 June 2018 have been restated in respect of the
application of IFRS 9 - Financial Instruments. The impact of
adopting IFRS 9 has resulted in the loan to associate being
measured at fair value through P&L. In accordance with IFRS 9,
the fair value of the mezzanine loan from TSTR to SPMP (the “SPMP
Mezzanine Loan”) has been derived using a net present value
calculation in which an effective discount rate of 20% has been
applied. The discount rate, being the assumed market rate,
has been derived by reference to Tri-Star’s estimated cost of the
funding required in order to provide the SPMP Mezzanine Loan.
The Mezzanine Loan is assumed to be repaid on the due date. It is
assumed that there will be no default on these loans and that the
conversion discount has no value.
The adjustment recognised at 1 January
2018 resulted in a total comprehensive loss of £681,000, an
increase in investment of associates of £21,000 and a decrease in
the carrying value of the loan to associate of £702,000.
The adjustment recognised at 30 June
2018 resulted in a total comprehensive loss of £165,000, an
increase in investment of associates of £198,000 and a decrease in
the carrying value of the loan to associate of £1,044,000.
GOING CONCERN
The Group and Company are not yet revenue generating and are
reliant upon funds raised from issuing loans and shares. A cash
requirement for unavoidable running costs was identified based on
cash flow forecasts for the period ending 30
September 2020, as prepared by the Directors. The Directors
consider that there are a number of options to cover this
deficit:
- SPMP makes the $2 million
(approximately £1.5 million) payment in respect of its acquisition
from Tri-Star of the intellectual property (“IP”) of the Project,
due on successful commissioning of the plant.
- Tri-Star raises further funds by way of an equity or debt
placing or a further loan from the OAM Funds.
- Tri-Star is due to receive the deferred payment of USD
$100,000 from the sale of its Turkish
subsidiary on sale of first product, which would reduce the amount
required to be raised by a placing or loan.
The Directors are confident that the Group and Company will
secure the funds required from one of the above sources, or from a
combination of the above sources. Accordingly, the Directors
believe that it is appropriate to prepare the financial statements
on a going concern basis. However, there is no certainty that they
will be able to do so. These matters along with the matter set
forth above mean that there is a material uncertainty which
may cast significant doubt on the Group’s and the Company’s ability
to continue as a going concern and, therefore, that the Group and
Company may not be able to realise its assets or discharge its
liabilities as they fall due.
3. SEGMENTAL REPORTING
An operating segment is a distinguishable component of the Group
that engages in business activities from which it may earn revenues
and incur expenses, whose operating results are regularly reviewed
by the Group’s chief operating decision maker to make decisions
about the allocation of resources and assessment of performance and
about which discrete financial information is available. The
chief operating decision maker has defined that the Group’s only
reportable operating segment during the period is mining.
In respect of the non-current assets as at 30 June 2019 of £18,986,000, £Nil arise in the UK
(30 June 2018: £5,000, 31 December 2018: £Nil), and £18,986,000 arise in
the rest of the world (30 June 2018
restated: £7,473,000, 31 December
2018: £17,863,000).
4. TAXATION
As at 31 December 2018 Tri-Star
Resources plc had unrelieved Schedule D Case 1 corporation tax
losses of £5.35m. The Directors expect these losses to be
available to offset against future taxable trading
profits.
The Group has not recognised a deferred tax asset at
30 June 2019 (30 June and
31 December 2018: £nil) in respect of
these losses on the grounds that it is uncertain when taxable
profits will be generated by the Group to utilise any such
losses.
5. PROFIT/(LOSS) PER SHARE
The calculation of the basic profit/(loss) per share is based on
the profit/(loss) attributable to ordinary shareholders divided by
the weighted average number of shares in issue during the
period.
|
Unaudited |
|
Unaudited |
|
Audited |
|
period ended |
|
period
ended |
|
year
ended |
|
30
June 2019 |
|
30 June
2018 (restated) |
|
31
December 2018 |
|
£'000 |
|
£'000 |
|
£'000 |
|
|
|
|
|
|
Profit/(loss) on
ordinary activities after tax (£'000) |
649 |
|
(1,167) |
|
(2,026) |
|
|
|
|
|
|
Weighted average
number of shares for calculating basic loss per share |
94,122,723 |
|
60,921,020 |
|
76,820,518 |
|
|
|
|
|
|
Basic profit/(loss)
per share (pence) |
0.69 |
|
(1.92) |
|
(2.64) |
|
|
|
|
|
|
Weighted average
number of shares for calculating diluted loss per share |
96,682,764 |
|
61,648,326 |
|
78,286,457 |
|
|
|
|
|
|
Diluted
profit/(loss) per share (pence) |
0.67 |
|
(1.89) |
|
(2.59) |
The weighted average number of ordinary shares excludes deferred
shares which have no voting rights and no entitlement to a
dividend.
6. INVESTMENT IN ASSOCIATES
SPMP was incorporated in the Sultanate of Oman in 2014. Tri-Star has a 40%
interest in the company and accounts for its investment in SPMP as
an associate undertaking.
SPMP made a loss of £1,531,000 in the period to 30 June 2019 (30 June
2018: £140,000, 31 December
2018: £765,000) of which Tri-Star’s share in the Group
accounts was £612,000 (30 June 2018:
£56,000, 31 December 2018:
£306,000). Tri-Star had a net investment of £524,000 on
consolidation as at 30 June 2019
(30 June 2018 (restated): £1,386,000,
31 December 2018: £1,136,000).
Additionally, Tri-Star has issued loans to SPMP as detailed in
Note 7.
7. LOAN NOTES
SPMP Mezzanine loan notes
Loans receivable represent the US$6m mezzanine loan which the Company advanced
to SPMP as announced on 29 November
2017, the further US$2.8m
advanced as announced on 24 January
2018, and the $12m advanced
between July 2018 and January 2019.
The principal terms of the loan are as follows:
- An interest rate of 15% per annum compounded, payable in full
on redemption of the loan;
- Ranks pari passu with the existing mezzanine loans already in
place at SPMP;
- Loan term of five years with SPMP having the option to redeem
(with accrued interest to date) from the third anniversary of
drawdown.
- All repayments made by SPMP to each of its three shareholders
will be pari passu in proportion to the respective total loan
amounts outstanding.
There is an option to convert the loan into shares if it remains
outstanding for 12 months after the due date.
On 20 March 2019, Tri-Star
announced that it had been agreed that $52m of the mezzanine loan made to SPMP by its
shareholders, plus accrued interest, will be converted into either
an interest free loan or equity. This includes $20.8m of the principal loan made by Tri-Star to
SPMP which, once completed, will leave $2m of the principal owed to Tri-Star as
mezzanine loan. This conversion has yet to be completed.
Odey Loan Notes
Loan Notes payable comprise short-dated secured loan notes
issued to Odey European Inc (“OEI”) and OEI MAC Inc (“OMI”), two of
the three OAM Funds that were equity shareholding funds as of
30 June 2018. The Loan Notes are
secured on a debenture comprising a fixed and floating charge over
all the assets of Tri-Star Resources plc.
The Loan Notes carry an annual interest rate of 25% and had an
original repayment date of 30 June
2018 or equity placement whichever is earlier. As an equity
placement took place in January 2018,
the loans technically fell due, but OEI and OMI have now agreed to
extend repayment to 30 June 2020 or
earlier at the Company’s discretion.
The US$6,000,000 Loan Notes were
issued in November 2017. On
19 January 2018, US$2,681,000 of the principal and interest was
repaid and a further US$2,639,000 was
repaid on 10 July 2018. As at the
period end, the outstanding balance of the Loan Notes was
US$1,340,000 including accrued
interest.
8. CONTINGENT ASSET
Under the agreement to sell the Roaster intellectual property to
SPMP, there is a balance of US$2m due
to be paid to Tri-Star. This payment is contingent upon the
successful commissioning of the plant in its pilot phase. The
Directors have determined not to accrue this deferred income.
Therefore, there is a contingent asset of US$2m as at 30 June
2019 (30 June and 31 December
2018: US$2m).
**ENDS**
Enquiries:
Tri-Star Resources plc |
|
David Facey, CEO/
CFO |
ceo@tri-starresources.com |
St Brides Partners Ltd
Hugo de Salis/Juliet Earl |
Tel +44 (0)20 7236 1177 |
SP Angel Corporate Finance
(Nominated Adviser) |
|
Robert Wooldridge/Jeff
Keating/Caroline Rowe |
Tel: +44 (0)20 3470 0470 |
|
|
FinnCap Ltd (Broker) |
|
Christopher Raggett/Camille
Gochez |
Tel: +44 (0)20 7220 0500 |
Notes to the Editor
Tri-Star’s principal interest is in an antimony and gold
production facility which is based in Sohar, Sultanate of
Oman (the “SPMP Project”), and is
being developed by Strategic & Precious Metals Processing LLC,
an Omani company in which Tri-Star has a 40% equity interest.
Tri-Star also has antimony exploration licenses in Canada which are held for their potential
contribution of feedstock to the SPMP Project.