TULU KAPI FUNDING UPDATE AND INTERIM RESULTS

RNS Number : 3171A
KEFI Minerals plc
28 September 2015
 

                                                                                                                                   28 September 2015

 

KEFI Minerals plc

("KEFI" or the "Company")

 

TULU KAPI FUNDING UPDATE

AND

INTERIM RESULTS FOR THE HALF-YEAR ENDED 30 JUNE 2015

 

KEFI Minerals (AIM: KEFI), the gold exploration and development company with projects in the Kingdom of Saudi Arabia and Democratic Republic of Ethiopia, is pleased to provide an update on development funding and announces its unaudited interim results for the half-year ended 30 June 2015. The statement below encompasses the activities of the Company's subsidiary, KEFI Minerals (Ethiopia) Limited ("KME"), in Ethiopia and its joint venture, Gold & Minerals Limited ("G&M"), in the Kingdom of Saudi Arabia.

 

Update on Development Funding and Planned Government Participation

The Company is pleased to report that, based on the negotiations with the short-listed project contactors and financiers and with the Government of Ethiopia, the entire development funding for the Tulu Kapi gold project in Ethiopia of c. $120 million is now expected to be covered at the project level. A key component is the intended participation by the Government of Ethiopia, by funding up to $20 million of infrastructure in exchange for an increased share of project equity. The full funding package is planned through a combination of debt, gold streaming and equity funding, with working capital requirements subject to further refinement which can only be finalised upon formalisation of the multi-party agreements and the approval thereof by the Government of Ethiopia.

 

Management is now focused on formally appointing and assembling, with finalised and complementary terms, the project syndicate comprising the contractors, debt financiers, gold streamer and the Government of Ethiopia. This includes the contractor for building the plant on a fixed-price basis and the contractor for the mining operation on a price-per-cubic-metre-delivered basis over the life of the open pit mine. KEFI will announce the members of the syndicate as appointments occur, commencing in the first half of October. With the Government of Ethiopia, KEFI is finalising the terms for its intended funding of infrastructure (the public road and electricity connection) and the associated increase in its share of project equity.

 

Harry Anagnostaras-Adams, Executive Chairman of KEFI Minerals, commented: "We are pleased to have achieved this major milestone and, in particular, we welcome the Government of Ethiopia's intention to increase its equity in the project. Along with the intended use of some gold stream finance, this materially reduces the level of debt to be introduced and makes the financial structure more conservative, which is appropriate for such volatile times in capital markets. We look forward to finalising terms with the emerging syndicate of parties and rapidly moving on to the next phase of development."

 

H1 2015 Summary

 

Tulu Kapi gold project, Ethiopia

(Wholly-owned by KEFI; Government entitled to 5% free carried interest)

·      Appointed Mr Wayne Nicoletto, in February, as Head of Operations of the Company and Managing Director of KME

·      In April, Mining Agreement ("MA") signed by the Company and Ethiopian Government, granting the 20-year Mining Licence and permitting development and operation

·      Reaffirmed that Tulu Kapi project is economically sound and warrants development upon independent confirmation of Ore Reserves (JORC 2012) 15.4Mt at 2.12g/t Au, containing 1.05Moz, having wireframed each individual ore lode as part of due diligence for project finance

·      Highlights of the Definitive Feasibility Study ("2015 DFS") completed in June 2015 included:

Gold production remaining at 960,000oz over 13 years with an average of 75,000oz per year. Post period, the Company announced an increase in planned production to an average of c. 100,000oz per annum over a 10-year period. This was achieved by increasing the planned rate of ore processing, without change to the Mine Plan

All-in Sustaining Costs remained at c. US$780/oz, which ranks the project in the lowest cost quartile globally for gold producers. This includes all operating costs, royalties, sustaining capital and closure, but excludes initial capital investment. Post period, this was adjusted to US$760/oz based on the terms of contractor bidding to that point

·      In June 2015, the gold mineralisation from the first trench sampling results from three prospects in adjacent exploration licences to the Tulu Kapi site demonstrated that these prospects could potentially provide satellite feed to the central processing plant at Tulu Kapi or be developed as standalone heap leach projects. This supplementary source of ore would complement that from the underground resources already reported and which are expected to be increased in due course

 

Gold & Minerals Ltd Joint Venture ("G&M"), Saudi Arabia

(40%-owned by the Company with KEFI as operator)

Jibal Qutman

·      The Company completed a positive Preliminary Economic Assessment, including:

An increase in the reported Mineral Resource (JORC 2012) to 28.4Mt at 0.80g/t Au for 733,045oz Au, at a cut-off grade of 0.2g/t Au

Improved metallurgical test results indicating heap leach recovery of c. 70%

Mining scoping study indicating potential open cut mineable resource of 6.6Mt at 0.95g/t Au, containing 201,600oz on oxide ore for  heap leach processing

Preliminary internal assessment by KEFI suggesting an estimated cash operating cost of US$600/oz on a 1.5Mt per annum open-pit operation with gold recovery via a heap leach process

Hawiah

·      Completed an initial 53-trench surface sampling programme over a 6km-long gossanous horizon and a geophysical survey over the southern half of the gossanous horizon

·      Exploration highlighted a large drilling target of 2,000m lateral and 300m vertical extent thought to overlie volcanically hosted massive sulphide (copper-gold-zinc) style of mineralisation

·      KEFI intends to conduct initial drilling of this target during H2 2015

 

Corporate

·      Completed £800,000 placing of 80,000,000 ordinary shares at a price of 1p per share in March

·      Completed £660,000 placing of 66,610,600 ordinary shares at a price of 1p per share in May

·      Existing issued ordinary shares of 1p each in the capital of the Company were subdivided into one new Ordinary Share of 0.1p each ("New Ordinary Shares") and one deferred share of 0.9p each ("Deferred Shares")

·      In June 2015, completed £2,900,000 placing at 0.8p per share of 362,500,000 New Ordinary Shares of 0.1p per share

·      As referenced in Note 6 in the accounts below, based on Directors' formal review, the net present value of the Tulu Kapi asset significantly exceeded the book value at 30 June 2015

 

ENQUIRIES

 

KEFI Minerals plc


Harry Anagnostaras-Adams (Executive Chairman)

+357 99457843



SP Angel Corporate Finance LLP (Nominated Adviser)


Ewan Leggat, Jeff Keating

+44 20 3470 0470



Brandon Hill Capital Ltd (Joint Broker)


Oliver Stansfield, Alex Walker, Jonathan Evans

+44 20 7936 5200



Beaufort Securities Ltd (Joint Broker)


Elliot Hance

+44 20 7382 8300



Luther Pendragon Ltd (Financial PR)


Harry Chathli, Claire Norbury, Oliver Hibberd

+44 20 7618 9100

 

Further information can be viewed on KEFI's website at www.kefi-minerals.com 


Condensed interim consolidated statements of comprehensive income

(unaudited) (All amounts in GBP thousands unless otherwise stated)

 

 

 

 

 

 

 

 

Notes


Six months ended
30 June 2015


Six months ended
30 June 2014

 







 

Revenue



-


-

 

Exploration expenses



(55)


(76)

 

Gross loss



(55)


(76)

 

Administration expenses



(876)


(729)

 

Share-based payments



(200)


(152)

 

Share of loss from jointly controlled entity



(444)


(593)

 

Change in value of financial assets at fair value through profit and loss



-


(4)

 

Operating loss



(1,575)


(1,554)

 

Foreign exchange gain/(loss)



96


(101)

 

Interest income



-


1

 

Interest expense



(149)


(275)

 

Loss before tax



(1,628)


(1,929)

 

Tax



-


-

 

Loss for the period



(1,628)


(1,929)

 







 

Loss attributable to:

-Owners of the parent

-Non-controlling interest



 

(1,628)

-

(1,628)


 

(1,866)

(63)

(1,929)

 







 







 

Loss for the period



(1,628)


(1,929)

 

Other comprehensive loss:






 

Exchange differences on translating foreign operations



66


158

 

Total comprehensive loss for the period



(1,562)


(1,771)

 







 







Attributable to:






-Owners of the parent



(1,562)


(1,708)

-Non-controlling interest



-


(63)




(1,562)


(1,771)

 

 

Basic and fully diluted loss per share (pence)

4


(0.12)


(0.22)







 

 

The notes are an integral part of these condensed interim consolidated financial statements.

 

 

 

 



Condensed interim consolidated statements of financial position 

(unaudited) (All amounts in GBP thousands unless otherwise stated)

 

 

 


 

Notes


30 June 2015


31 Dec 2014

ASSETS






Non-current assets






Property, plant and equipment

5


113


160

Intangible assets

6


10,582


9,139




10,695


9,299

Current assets






Financial assets at fair value through profit or loss



83


86

Trade and other receivables

7


422


335

Cash and cash equivalents



1,023


640




1,528


1,061







Total assets



12,223


10,360







EQUITY AND LIABILITIES






Equity attributable to owners of the Company






Share capital

8


1,745


12,352

Deferred Shares

8


12,436


-

Share premium

8


10,800


8,433

Share options reserve

9


1,036


848

Foreign exchange reserve



(20)


(86)

Accumulated losses



(16,070)


(14,389)




9,927


7,158

Non-controlling interest



-


-

Total equity



9,927


7,158







Current liabilities






Trade and other payables

10


2,296


3,202




2,296


3,202







Total liabilities



2,296


3,202







Total equity and liabilities



12,223


10,360







 

The notes are an integral part of these condensed interim consolidated financial statements. 

 

 

On 27 September 2015, the Board of Directors of KEFI Minerals Plc authorised these financial statements for issue.

 

 

 

 

 

Harry Anagnostaras- Adams

Executive Chairman of Directors

 

 



Condensed interim consolidated statement of changes in equity 

(unaudited) (All amounts in GBP thousands unless otherwise stated)

 

 

 



Attributable to the owners of the Company




 

Share

capital

 

Deferred shares

 

Share premium

 

Share options reserve

 

Foreign exchange reserve

 

Accumulated

losses

 

Non-controlling interest

 

 

Total










At 1 January 2014

8.535

-

7,660

794

(156)

(10,062)

1,032

7,803

Loss for the period

-

-

-

-

-

(1,866)

(63)

(1,929)

Other comprehensive loss

-

-

-

-

158

-

-

158

Share-based  payments

-

-

-

152

-

-

-

152

Forfeit of options/warrants

-

-

-

(280)

-

280

-

-

Issue of share capital

1,416

-

708

-

-

-

-

2,124

Share issue costs

-

-

(198)

-

-

-

-

(198)

At 30 June 2014

9,951

-

8,170

666

2

(11,648)

969

8,110










Loss for the period

-

-

-

-

-

(1,982)

(52)

(2,034)

Other comprehensive loss

-

-

-

-

(88)

-

-

(88)

Share-based payments

-

-

-

183

-

-

-

183

Exercise of options

-

-

-

-

-

-

-

-

Forfeit of options/warrants

-

-

-

(1)

-

1

-

-

Issue of share capital

2,401

-

250

-

-

-

-

2,651

Share issue costs

-

-

13

-

-

(177)

-

(164)

Transactions with owners of the Company

12.352

-

8,433

848

(86)

(13,806)

917

8,658

Acquisition of non- controlling interest

 

-

-

-

 

-

 

-

 

-

 

(583)

 

(917)

 

(1,500)

At 31 December 2014

12,352

-

8,433

848

(86)

(14,389)

-

7,158

Loss for the period

-

-

-

-

-

(1,628)

-

(1,628)

Other comprehensive loss

-

-

-


66

-

-

66

Share-based  payments

-

-

-

200

-

-

-

200

Forfeit of options/warrants

-

-

-

(12)

-

12

-

-

Restructuring of share capital

 

(12,436)

 

12,436

 

-

 

-

 

-

 

-

 

-

 

-

Issue of share capital

1,829

-

2,537

-

-

-

-

4,366

Share issue costs

-

-

(170)

-

-

(65)

-

(235)

At 30 June 2015

1,745

12,436

10,800

1,036

(20)

(16,070)

-

9,927

 

The following describes the nature and purpose of each reserve within owner's equity:

 

Reserve

Description and purpose

Share capital

amount subscribed for share capital at nominal value

Deferred shares

On 16 June 2015, ordinary shares of 1p each in the capital of the Company were sub-divided into one new ordinary share of 0.1p and one deferred share of 0.9p

Share premium

amount subscribed for share capital in excess of nominal value, net of issue costs

Share options reserve

reserve for share options granted but not exercised or lapsed



Foreign exchange reserve

cumulative foreign exchange net gains and losses recognised on consolidation

Accumulated losses

cumulative net gains and losses recognised in the statement of comprehensive income, excluding foreign exchange gains within other comprehensive income

Non-controlling interest (NCI)       the portion of equity ownership in a subsidiary not attributable to the parent company

 

The notes are an integral part of these condensed interim consolidated financial statements. 



Condensed interim consolidated statements of cash flows

(unaudited) (All amounts in GBP thousands unless otherwise stated)

 

 




Six months ended to 30 June 2015


Six months ended to 30 June 2014

Cash flows from operating activities






Loss before tax



(1,628)


(1,929)

Adjustments for:






Share-based benefits



200


152

Share of loss in joint venture



444


593

Net loss on financial assets at fair value through profit or loss



-


4

Gain on disposal of plant and equipment



(70)


-

Depreciation



52


71

Interest expense



149


275

Foreign exchange losses on financing activities



(96)


(48)

Foreign exchange gains on operating activities



88


101

Cash outflows from operating activities before working capital changes



 

(861)


 

(781)







Interest paid



(149)


(275)







Changes in working capital:






Trade and other receivables



(87)


(427)

Trade and other payables



(758)


(710)

Net cash used in operating activities



(1,855)


(2,193)







Cash flows from investing activities






Purchases of plant and equipment



(5)


(19)

Proceeds on disposal of plant and equipment



70


-

Deferred exploration costs



(545)


(1,135)

Project evaluation costs



(898)


-

Advances to joint venture



(408)


(485)

Net cash used in investing activities



(1,786)


(1,639)







Cash flows from financing activities






Proceeds from issue of share capital



4,259


2,124

Listing and issue costs



(235)


(198)

Net cash from financing activities



4,024


1,926







Net increase/(decrease) in cash and cash equivalents



383


(1,906)







Cash and cash equivalents:






At beginning of period



640


3,279

At end of period



1,023


1,373

 

 

The notes are an integral part of these condensed interim consolidated financial statements. 


Notes to the condensed interim consolidated financial statements

For the six months to 30 June 2014 and 2015 (unaudited) (All amounts in GBP thousands unless otherwise stated)

 

1.   Incorporation and principal activities

Country of incorporation

The Company was incorporated in United Kingdom as a public limited company on 24 October 2006.  Its registered office is at 27/28 Eastcastle Street, London W1W 8DH.

Principal activities

The principal activities of the Group for the period are:

·      To explore for mineral deposits of precious and base metals and other minerals that appear capable of commercial exploitation, including topographical, geological, geochemical and geophysical studies and exploratory drilling.

·      To evaluate mineral deposits determining the technical feasibility and commercial viability of development, including the determination of the volume and grade of the deposit, examination of extraction methods, infrastructure requirements and market and finance studies.

·      To develop, operate mineral deposits and market the metals produced.

2.   Summary of significant accounting policies

The principal accounting policies applied in the preparation of these condensed interim consolidated financial statements are set out below. These policies have been applied consistently throughout the period presented in these condensed interim consolidated financial statements unless otherwise stated.

Basis of preparation and consolidation

The condensed interim consolidated financial statements have been prepared in accordance with International Accounting Standards (IFRS) including International Accounting Standard 34 "Interim Financial Reporting" and using the historical cost convention.

These condensed interim consolidated financial statements ('the statements") are unaudited and include the financial statements of the Company and its subsidiary undertakings. They have been prepared using accounting bases and policies consistent with those used in the preparation of the financial statements of the Company and the Group for the year ended 31 December 2014. These statements do not include all of the disclosures required for annual financial statements, and accordingly, should be read in conjunction with the financial statements and other information set out in the Company's 31 December 2014 Annual Report. The accounting policies are unchanged from those disclosed in the annual consolidated financial statements.

Going concern

The Directors have formed a judgment at the time of approving the condensed interim consolidated financial statements that there is a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future.  The financial statements have been prepared on a going concern basis, the validity of which depends principally on the discovery of economically viable mineral deposits, obtaining the necessary mining licences and the availability of subsequent funding to extract the resource or alternatively the availability of funding to extend the Company's exploration activities. The financial statements do not include any adjustment that would arise from a failure to complete any of the above. Changes in future conditions could require write downs of the carrying values of property, plant and equipment, intangible assets and/or deferred tax.

 

Use and revision of accounting estimates

The preparation of the condensed interim consolidated financial statements requires the making of estimations and assumptions that affect the recognised amounts of assets, liabilities, revenues and expenses and the disclosure of contingent liabilities.  The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.  The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

 

2.   Summary of significant accounting policies (continued)

Adoption of new and revised International Financial Reporting Standards (IFRSs)

The Group has adopted all the new and revised IFRSs and International Accounting Standards (IAS) which are relevant to its operations and are effective for accounting periods commencing on 1 January 2015.  The adoption of these Standards did not have a material effect on the condensed interim consolidated financial statements.

At the date of authorisation of these condensed interim consolidated financial statements some Standards were in issue but not yet effective. The Board of Directors expects that the adoption of these Standards in future periods will not have a material effect on the consolidated financial statements of the Group.

Critical accounting estimates and judgements

Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results.  The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are unchanged from those disclosed in the annual consolidated financial statements.

3.   Operating segments

The Group has only one distinct operating segment, being that of mineral exploration.  The Group's exploration activities are located in Ethiopia, Saudi Arabia through the jointly controlled entity and its administration and management is based in Cyprus.

Six months ended 30 June 2015

Cyprus

Ethiopia

Turkey

Bulgaria


Total

 








 

 Operating loss

(1,121)

13

(21)

(2)


(1,131)

 

Interest paid

(50)

(99)

-

-


(149)

 

Foreign exchange (loss)/gain

(191)

321

(34)

  -


96

 

Loss before tax

(1,362)

235

(55)

(2)


(1,194)

 

Share of loss from jointly controlled entities






(444)

Tax






-

 

Loss for the period






(1,628)

 








 

Total assets

3,042

9,125

52

4


12,223

 

Total liabilities

(803)

(1,477)

(14)

(2)


(2,296)

 

Depreciation of property, plant and equipment

-

(52)

-

-


(52)

 

 

Six months ended 30 June 2014

Cyprus

Ethiopia

Turkey

Bulgaria


Total

 








 

Operating loss

(854) 

(75)

(28)

(3)


(960)

 

Interest paid

-

(275)

-

-


(275)

 

Foreign exchange loss

(74)

-

(20)

(7)


(101)

 

Loss before tax

(928)

(350)

(48)

(10)


(1,336)

 

Share of loss from jointly controlled entities






(593)     

Tax






-

 

Loss for the period






(1,929)

 








 

Total assets

2,552

8,150

56

5


10,763

 

Total liabilities

(333)

(2,303)

(16)

(1)


(2,653)

 

Depreciation of property, plant and equipment

-

(71)

-

-


(71)

 



 

4.   Loss per share     

The calculation of the basic and fully diluted loss per share attributable to the ordinary equity holders of the parent is based on the following data:


Six months ended 30 June 2015


Six months ended 30 June 2014





Net loss attributable to equity shareholders

(1,628)


(1,866)





Average number of ordinary shares for the purposes of basic loss per share (000's)

 

1,327,832


 

864,507





Basic and fully diluted loss per share (pence)

(0.12)


(0.22)

 

The effect of share options and warrants on losses per share is anti-dilutive.

5.   Property, plant and equipment     

Cost


 

 

Motor

vehicles



Property


Furniture, fixtures

and office equipment


 

 

 

Total











At 1 January 2014


60


180


53


293

 

Additions


-


14


5


19

 

At 30 June 2014


60


194


58


312

 

Acquisitions


-


4


3


7

 

At 31 December 2014 / 1 January 2015


60


198


61


319

 

Additions


-


-


5


5

 

At 30 June 2015


60


198


66


324

 

 

 

Accumulated Depreciation

At 1 January 2014


 

 

 

31


 

 

 

-

 

 

 

 

 

10


 

 

 

41

 

Charge for the period


8


42


21


71

 

At 30 June 2014


39


42


31


112

 

Charge for the period


-


31


16


47

 

At 31 December 2014 / 1 January 2015


39


73


47


159

 

Charge for the period


-


33


19


52

 

At 30 June 2015


39


106


66


211

 










 

Net Book Value at 30 June 2015


21


92


-


113

 










 

Net Book Value at 31 December 2014


21


125


14


160

 

 

 



 

6.   Intangible assets

 


 





 

Project evaluation costs

 


 

Deferred exploration costs



 

Total

 














Cost











 

At 1 January 2014





-


6,900



6900

 

Additions





-


1,135



1,135

 

At 30 June 2014





-


8,035



8.035


Additions





976


128



1,104

 

At 31 December 2014





976


8,163



9.139

 

Additions





898


545



1,443

 

At 30 June 2015





1,874


8,708



10,582














Accumulated Impairment





 

Project evaluation costs

 


 

Deferred exploration costs



 

Total

 


At 1 January 2014





-


-



-

 

Impairment charge for the period





-


-



-

 

At 30 June 2014





-


-



-

 

Impairment charge for the period





-


-



-

 

At 31 December 2014





-


-



-

 

Impairment charge for the period





-


-



-

 

At 30 June 2015





-


-



-

 

Net Book Value at 31 December 2014





976


8,163



9,139

 

Net Book Value at 30 June 2015





1,874


8,708



10,582

 

 

Management performed an impairment review for the above intangible assets at 30 June 2015, which relate to development work at the Tulu Kapi license area, and assessing its economic feasibility. The net present value of the Tulu Kapi asset exceeded the book value at 30 June 2015 significantly.

 

The impairment review compared the recoverable amount of assets to the carrying value. The recoverable amount of an asset is assessed by reference to the higher of value in use ("VIU"), being the net present value ("NPV") of future cash flows expected to be generated by the assets, and fair value less costs to dispose ("FVLCD"). The FVLCD is based on an estimate of the amount that the company may obtain in a sale transaction on an arms-length basis.

 



 

7.   Trade and other receivables



30 June 2015


31 Dec 2014







 

Other receivables



62


43

 

 

Placing funds



237


130

 

 

Loan to Director (Note 12.3)



34


20

 

 

Amount receivable from Saudi Arabia Joint Venture (Note 12.5)



-


32

 

 

VAT



89


96

 

 

Deposits and prepayments



-


14

 

 







 

 




422


335

 

 

a)     The Company raised GBP2.9 million on 16 June 2015 but an amount of GBP237,000 was not received as at 30 June 2015.

b)    The loan to director has been repaid since the reporting date.

 

 

 

 

8.   Share capital

 


Number of shares 000's


 

Share

capital

 

Deferred shares

 

Share premium

 

 

Total

Issued and fully paid







At 1 January 2015

1,235,337


12,352

-

8,433

20,785

Issued 20 March 2015 at GBP 0.01

80,000


800

-


800

Issued 16 May 2015 at GBP 0.01

66,611


666

-


666

Shares Subdivided to GBP0.009

-


(12,436)

12,436


-

Issued 16 June 2015 at GBP 0.008

362,500


363


2,537

2,900

Share issue costs

-


-

-

(170)

(170)

At 30 June 2015

1,744,448


1,745

12,436

10,800

24,981

 

Share issue costs of GBP65,000 relating to the 146,610,600 shares issued at par value during 2015 have been charged to equity.

 

Issued capital

 

2015

 

On 20 March 2015, 80,000,000 shares of GBP0.01 were issued at a price of GBP0.01per share.

On 16 May 2015, 66,610,600 shares of GBP0.01 were issued at a price of GBP0.01 per share. 

On 16 June 2015, 362,500,000  shares of GBP0.001 were issued at a price of GBP0.008 per share.  On issue of the shares, an amount of GBP2,537,500 was credited to the Company's share premium reserve.

 

Restructuring of share capital into deferred shares

 

On 16 June 2015 the Company issued ordinary shares of GBP0.01 each in the capital of the Company were sub-divided into one new ordinary share of GBP0.001 and one deferred share of GBP0.009. The Deferred Shares have no value or voting rights. After the share capital reorganisation there were the same number of New Ordinary Shares in issue as there are existing Ordinary Shares. The New Ordinary Shares have the same rights as those currently accruing to the existing Ordinary Shares in issue under the Company's articles of association, including those relating to voting and entitlement to dividends.

 

Warrants

 

2015

On 18 March 2015, the Company issued 4,000,000 warrants to subscribe for new ordinary shares of GBP0.01 each at GBP0.01 per share.

On 14 May 2015, the Company issued 1,680,530 warrants to subscribe for new ordinary shares of GBP0.01 each at GBP0.01 per share.

On 19 June 2015, the Company issued 14,500,000 warrants to subscribe for new ordinary shares of GBP0.001 each at GBP0.008 per share.

No warrants were cancelled/expired or exercised in the period from 1 January 2015 to 30 June 2015.

 

 

 

 

 

 

8. Share capital (Continued)

Warrants (Continued)

Details of warrants outstanding as at 30 June 2015:

Grant date

Expiry date

Exercise price


Number of warrants





000's

22 February 2011

21 February 2016

5p


780

20 February 2012

19 February 2017

3p


2,917

4 July 2013

3 July 2018

2.1p


1,310

16 October 2013

15 October 2018

2.25p


1,111

27 December 2013

26 December 2016

2p


13,500

16 June 2014

15 June 2016

1.5p


8,500

2 December 2014

1 December 2017

1p


4,000

16 December 2014

15 December 2017

1p


5,500

18 March 2015

17 March 2018

1p


4,000

14 May 2015

13 May 2018

1p


1,681

19 June 2015

18 June 2018

0.8p


14,500





57,799

 

These warrants to advisers to the Group.



Number of warrants

000's




Outstanding warrants at 1 January 2015


37,618

- granted


20,181

 

9.   Share options reserve 




30 June 2015


31 Dec

2014







Opening amount



848


794

Warrants issued costs



86


66

Share options issued to employees



37


69

Share options issued to directors



77


200

Exercise of options



-


-

Forfeit of options or cancellations



(12)  


(281)

 

Closing amount



1,036


848

 

 

 

 


Weighted average ex. price

Number of shares 000's

Outstanding options at 1 January 2015


48,350

-  granted

1.32p

33,500

-  exercised

-

-

-  cancelled/forfeited

4.63p

(400)

Outstanding options at 30 June 2015


81,450

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10. Trade and other payables

        

        



30 June 2015


31 Dec 2014







Accruals and other payables



830


825

Other loans



216


229

Payable to shareholders (Note 12.4)



-


8

Payable to joint venture partner (Note 12.6)



46


186

VAT Liability



1,204


1,954




2,296


3,202

 

In January 2014 an agreement was made with Ethiopian Revenue and Customs Authority ("ERCA") to repay the balance of the VAT liability plus interest accruing on the unpaid principal amount over a three-year payment plan in accordance with the relevant tax proclamation, 25% of the assessed outstanding amount is payable immediately and the balance under an agreed payment schedule. This initial payment, of ETB27,111,509 (approximately GBP848,590), equivalent to 25% of the assessed tax amount outstanding, was made in January 2014. The balance of the liability plus interest accruing on the unpaid principal amount will be paid subject to a three-year payment plan formally agreed with ERCA. During the year an amount of ETB24,600,000 (approximately GBP799,220), was paid. The total amount to be paid over the next 18 months is ETB   40,742,271(approximately GBP  1,252,452).

 

11. Joint venture agreements

 

In May 2009, KEFI Minerals formed the Gold & Minerals exploration joint venture, "G&M" Joint Venture, with Saudi construction and investment group Abdul Rahman Saad Al-Rashid & Sons Company Limited ("ARTAR"). KEFI Minerals is the operating partner with a 40% shareholding of the G&M Joint Venture with ARTAR holding the other 60%.

KEFI Minerals provides the G&M Joint Venture with technical advice and assistance, including personnel to manage and supervise all exploration and technical studies. ARTAR provides administrative advice and assistance to ensure that the G&M Joint Venture remains in compliance with all governmental and other procedures.

 

 

 

 

 

 

 

 

12. Related party transactions

 

The following transactions were carried out with related parties:

 

12.1.  Compensation of key management

 

The total remuneration of the Directors and other key management personnel was as follows:


Six months ended 30 June 2015


Six months ended 30 June 2014







Directors' fees

220


192


Directors' other benefits

20


26


Share-based benefits to directors

76

87


Key management fees

83


-


Share-based benefits to key management

2

-



401


305


 

12.2.  Compensation of key management personnel

 

Share-based benefits

The Company has issued share options to directors and key management.  On 27 March 2014, the Board approved a new share option scheme ("the Scheme") for directors, senior managers and employees. The Scheme formalises the existing policy that options may be granted over ordinary shares representing up to a maximum of 10 per cent of the Group's issued share capital. The Scheme options vest in equal annual instalments over a period of 2 years and expire after 6 years.

12.3.  Receivable from director



30 June

 2015


31 Dec

2014

Name

Nature of transactions

Relationship




Ian Rutherford Plimer

 

Loan to Director

Non-Executive Director

-


20

Harry Anagnostaras- Adams

 

Loan to Director

Executive Director

34


-

No interest is payable by the director and the loan has been repaid.

 

12.4.  Payable to shareholders




30 June

 2015


31 Dec

2014

Name

Nature of transactions

Relationship




EMED Mining Public Ltd

Finance

Shareholder

-


8

 

 

12.5.  Receivable from related parties

 

 



 

30 June


 

31 Dec




2015


2014

Name

Nature of transactions

Relationship




Gold & Minerals Co. Limited

Finance

Jointly controlled entity

-


32










-


32

12.6.  Payable to related parties




 

30 June


 

31 Dec




2015


2014

Name

Nature of transactions

Relationship




Abdul Rahman Saad Al-Rashid & Sons Company Limited ("ARTAR")

Finance

Jointly controlled entity

46


186










46


186

 

 

 

12.  Related party transactions (Continued)

 

12.7.  Transactions with shareholder




30 June


30 June




2015


2014

Name

Nature of transactions

Relationship




EMED Mining Public Ltd

Provision of bookkeeping services

Shareholder

8


-

 

 

13.  Contingent liabilities

 

In 2006, EMED Mining Public Ltd acquired a proprietary geological database that covers extensive parts of Turkey and Greece and EMED transferred to the Company that part of the geological database that relates to areas in Turkey.

Under the agreement, the Company has undertaken to make a payment of approximately GBP51,100 (AUD105,000) for each tenement it is subsequently awarded in Turkey and which was identified from the database.  The maximum number of such payments required under the agreement is four, resulting in a contingent liability of up to GBP204,400.  These payments are to be settled by issuing shares in the Company.  To date, only one tranche of shares have been issued under this agreement in June 2007 for GBP43,750 (AUD105,000).

14.  Capital commitments 

 

The Group has the following capital or other commitments,

14.1.  Exploration program commitments

 


30 June


31 Dec


2015


2014

Exploration program commitments payable:




      Within one year

1,134


727


1,134


727

 

 

15.  Legal allegation

Allegations were made against a subsidiary of the Company in 2014 by 39 persons in the Oromiya Regional State of Ethiopia, that exploration drilling between 1998 and 2006 had caused damage to land occupied (but not owned) by them, despite rehabilitation having been completed, reported and accepted by the regulatory authorities at that time. They allege damage of BIRR249,589,430 (approximately GBP8million). The allegations were dismissed in March 2014 but they have directed the allegations to another arm of the judiciary. Having sought legal advice on this matter, the Group is of the opinion that the allegations have no merit and that it is not appropriate to recognise any contingent liability. The Group's lawyers believe that the allegations are spurious and that the chances of the judiciary holding that there exists a bona fide damages case to be heard are remote.

 




 

 

 


This information is provided by RNS
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