t
| Date | 30 Sept 2021 |
| Time | 17:22:05 |
| Category | Results |
| ID | 6308N |
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS DEFINED IN EU REGULATION NO. 596/2014 AND IS IN ACCORDANCE WITH THE COMPANY'S OBLIGATIONS UNDER ARTICLE 7 OF THAT REGULATION.
30 September 2021
Eurasia Mining Plc
("Eurasia" or the "Company")
Interim Report for the six months ended 30 June 2021
Summary highlights of 2021 to date
· Agreement with Rosgeo concluded in March to form a globally significant battery metals and PGM district on the Kola Peninsula, positioning Eurasia among majors
· Wardell Armstrong International engaged in April for several comprehensive tasks including JORC resource audits which are almost complete and are expected to be announced shortly
· Proposal received in May for the potential acquisition of substantially all of the Company's assets. Since then, additional interest from other parties is being considered by the Board
· Eurasia's representative office in Japan was established
· Eurasia is now fully funded to fulfil its commitments in relation to the Rosgeo JV
· Three plants are now operating at the Company's producing asset West Kytlim
· The Company maintains its focus on ESG including scope 1 to 3 carbon emissions
Chairman's statement
'The first half of 2021 has been a very active period for the Company both operationally and commercially.
We concluded a company transformational, legally binding agreement with Rosgeo covering 9 projects which together with Monchetundra and Monchetundra Flanks (including NKT, high grade nickel-copper-cobalt and PGM deposit) form a globally significant battery metals and PGM district on the Kola Peninsula, positioning our Company among majors in terms of combined resources of Eurasia and the projects included in the agreement with Rosgeo.
Post period-end, Konstantin Firstov joined Eurasia as CEO of our Kola operations from a Managing Director position in Rosgeo bringing additional operational expertise as the former head of open pit mining at Achinsk, the largest operation of Rusal, a leading company in the global aluminium industry, producing metal with a low carbon footprint.
After signing the Rosgeo agreement at the end of March, Eurasia conducted a tender among international technical auditors and in April engaged Wardell Armstrong International for several comprehensive tasks including JORC resource audits which are almost complete and will be announced shortly.
In May we received a proposal for the potential acquisition of substantially all of the Company's assets and the Board decided to focus on this potential asset sale. Since then, we have seen additional interest from other parties. We have attracted top talent and top tier partners and advisers to prioritise and execute our strategy.
Tamerlan Abdikeev based in Tokyo joined the Board and Eurasia's representative office in Japan was established.
Also in May we were offered a $20m private placement at the market price by a leading US institutional investor. In September we cut back to $15m from a larger proposal made by a consortium of US professional institutional investors, again without discount, at the market price of 26p. We are now fully funded to fulfil our commitments in relation to the Rosgeo JV.
We have successfully trebled our production capacity at West Kytlim, our ESG focussed PGM mine, while continuing to develop the electrification of the site to reduce the mine's carbon footprint. To that end we have selected an electric dragline to minimise our impact on the environment as well as to increase the efficiency of the stripping and mining, thereby reducing costs. Thus, the next year is expected to be transformation for West Kytlim on both the mining side with a highly productive electric dragline and on the processing side with 3 plants already launched.
My thanks to the staff and the Board for their continued commitment to creating additional value for our shareholders. The Company is in a very strong position financially, with an excellent portfolio of assets, and in a buoyant market for the future facing green metals: battery metals for EVs and PGMs for the hydrogen economy.'
Christian Schaffalitzky, Executive Chairman
For further information, please contact:
Eurasia Mining Plc
Christian Schaffalitzky/ Keith Byrne
+44 (0)207 932 0418
SP Angel Corporate Finance LLP (Nomad and Joint Broker)
Ewan Leggat / David Hignell / Adam Cowl
+44 (0)20 3470 0470
Optiva Securities (Joint Broker)
Christian Dennis
Tel: +44 (0) 20 3137 1902
PGM MARKET SUMMARY
The investment case for Platinum Group Minerals ('PGM'), especially Platinum and Palladium continues to be clear and compelling in the immediate and long term, based purely on the fundamentals of demand and supply. The outlook for demand is positive from existing markets in PGM, both industrial1 and precious metal uses, and from new and emerging markets notably Fuel Cells2 and the Hydrogen economy2. This contrasts with limited new supply under development and major challenges for the traditional global regions for PGM Mining3. Structural deficits now exist in both the platinum4 and palladium markets and are predicted to continue, creating an opportunity for emerging global regions for PGM mining such as Kola.
Platinum has traded above US$1,000/ounce for the first half of 2021 (contrasted with US$870/ounce at this point in the mining season last year5) however Palladium is expected to continue to outperform platinum being in a deeper structural deficit than its sister metal, and with further ounces removed from predicted annual supply by difficulties at Norilsk, leading to a predicted market deficit of up to 1million ounces in 20216.
The contribution of other PGM namely Rhodium (Rh) and Iridium (Ir) to global metal revenue streams has risen steadily since 2016, reflecting metal price increases rather than increased production, and these metals are set to continue to find niche use cases, eg in the Hydrogen economy in Polymer Electrolyte Membrane (PEM) Fuel Cells (Rh) and Hydrogen production by PEM electrolysis (Ir). Both of these metals are produced at the West Kytlim mine.
Sources:
1: Recovering vehicle sales leading to increased auto-catalyst demand;
Heraeus Platinum standard 2021, page 42.
2 Johnson Matthey presentation of results for the full year ended 31 March 2021;
4 WPIC Platinum Quarterly Q1 2021;
https://platinuminvestment.com/files/782345/WPIC_Platinum_Quarterly_Q1_2021.pdf
5 Eurasia Mining Interim statement 2020;
https://www.investegate.co.uk/eurasia-mining-plc--eua-/rns/interim-report/202009301656546679A/
6 https://www.mining.com/web/global-palladium-deficit-to-widen-in-2021-nornickel/
Environmental Social and Governance ('ESG')
Eurasia is focused on environmentally friendly ('green') mining solutions applied to its portfolio of green metals:
1) Battery Metals (Nickel, Copper and Cobalt) for EVs,
2) PGMs for catalysts and green hydrogen production.
The Company is also targeting top-tier ESG designed to achieve corporate goals, while also making a meaningful contribution beyond creating shareholder value and employment and paying taxes.
Eurasia targets the inclusion in more funds and indices beyond the current ones (ex: L&G Future World ESG UK Index, Liberum's climate portfolio and Solactive ESG indices).
The Company is committed to scope 1 to 3 carbon emissions control:
Scope 1) modern fleet of machinery on site at West Kytlim, switch to electric dragline for overburden removal from 2022
Scope 2) green suppliers selected (for example hydro energy producers, partnership with ESG focused Rosgeo),
Scope 3) organisation wide low environmental impact, and role of metals produced (Eurasia's up stream value chain) in controlling Greenhouse Gas emissions.
This should result in institutional investor (like Blackrock, Fidelity, Vanguard) smart money flow to scope 3 ESG compliant companies.
Eurasia's mines produce green metals with industry leading ESG footprint and the following distinctive features:
· Buildings from wood sourced and milled on mine sites
· No blasting used
· Shallow open pits mined
· Water fully recycled
· No chemicals used
· Low energy consumption
· Annual rehabilitation done
This results in low operating cost (Q1 of the global cost curve), creating superior value to our shareholders.
Eurasia is committed to attaining the highest Corporate Social Responsibility and environmental management standards at its mines. Areas mined at the West Kytlim Mine are remediated on a schedule detailed within our mining, forestry and environmental permits. The shallow open pit nature of the operation allows remediation by refilling open pits with stripped overburden and top soils.
We are committed to ensuring the land disturbed by mining activities is returned in a safe and stable landform that does not cause long term damage to the environment. Our commitment to restoring any damage to the environment is further demonstrated by our commitment to reducing Green House Gas (GHG) emissions at our mine sites.
Further highlights of the Company's top tier ESG focus
· Protect the environment
o Minimise disturbance and mine footprint
o Complete rehabilitation of mine sites
o Reduce GHG emissions
· Employee safety is a first priority;
o LTIFR remains at zero for both projects
o Ongoing COVID 19 protocols in place including medical screening and awareness interviews
· Build relationships with Stakeholders;
o Mine sites engaged with local communities
o Leveraging greater than 20 years' experience working in Russia with continuous open communication with government and both local and federal agencies.
People
Our team of professionals including former senior managers of Norilsk Nickel, Rusal, Polyus, Rosgeo and Highland Gold are managing a tier one asset base of Battery Metals and PGM. Our team members have successfully launched mines within their previous track record of operational achievements, as well as Eurasia's three mines and enrichments plants launched successfully delivering on our promises.
We have a strong in-house team of geologists, mining engineers, EPC managers, metallurgists and M&A professionals.
Our team owns about 20% of Eurasia shares acquired for cash and in lieu of cash compensation that provide proper motivation in line with the best interests of all shareholders.
Partners
Eurasia started as a JV with Anglo American, the world's largest PGM producer.
The Rosgeo projects add to our strong portfolio on top of our Monchetundra, NKT and other Flanks deposits, financed with prudent capital allocation, balancing minimal shareholder dilution and engaging contractors with solid EPCF track records, resulting in a strong financial position with zero debt and approximately $35m cash as at 24 September 2021.
Rosgeo operates globally with Amerada Hess, Chevron, Conoco Phillips, Exxon Mobil, ION, Schlumberger, BP plc, British Gas, Buried Hill, Polyus, Polymetal, Rosatom and Eurasia as partners & clients.
OPERATIONS UPDATE
West Kytlim operating mine, Ural Mountains
· Near nine-fold increase in mine revenue compared to the same period last year
· LTIFR remains at zero for the 2021 season
· Three plants now operational as opposed to one in previous seasons- eliminating single asset risk
· Advancing the Power line to site to provide electrified overburden stripping
The phased increase in capacity for the West Kytlim mine has seen a step change in the first half of this year from one plant to three process plants commissioned in August. Whilst one plant was in operation, 170,000 cubic meters PGM bearing gravels were processed from 20 April to 31 July 2021. The Kluchiki work area continues to provide high-grade gravels, backed up by two operational sites within the Bolshaya Sosnovka area, where stripping has commenced and will be reinforced with an electric dragline in the future.
Covid protocols, including social distancing measures and testing of workforce remain in place on site, despite a majority double-vaccinated personnel. Four individuals have recovered from Covid, having contracted in the general population while on leave, and are back at work, following negative tests with no effect on the operation.
West Kytlim is an ESG focussed mine site, meaning that adverse environmental impact is kept to a minimum:
· Limited use of reinforced concrete and asphalt
· Mine buildings built mostly from timber milled on site
· Open pits remediated when mined out, with full recovery 5 to 10 years post mining
· Modern machinery with low carbon footprint.
Our plans to transition from diesel-based stripping to renewable-electric powered stripping are now well advanced. The board recognise the potential to remove the operational GHG emissions associated with this stage of the mining process as valuable in improving the mine's environmental credits with a long-term goal of producing the worlds cleanest, i.e. lowest carbon PGM ounces. Eurasia's experts have evaluated possible draglines in the Urals area and throughout Russia for purchase and shipment to site. The powerline and dragline, despite the initial capital investment will eventually reduce operating costs at the mine meaning there will not be a 'green premium' associated cost with PGM ounces produced at the mine.
Although our focus at West Kytlim in 2021 was on the capacity increase and associated stripping works to prepare both Kluchiki and Bolshaya Sosnovka areas to feed 3 washing plants, we have also been mining which resulted in an approximately 9-fold revenue increase compared to 6 months of 2020.
Monchetundra, Monchetundra Flanks and the Rosgeo JV projects
The Company continues to drive the development at its Monchetundra project and within the Rosgeo JV and provides the following summary of events for the first half of this year;
· Wardell Armstrong International engaged
· Recalculation of MT and Flanks resources and pit outlines, reflecting considerable metal price increase since FS of 2016, integrated to Detailed Mining Plan as announced 15 September.
· Block Modelling and open pit contouring and optimisation complete for 6 of 9 Rosgeo JV projects.
Following the appointment of the new CEO at Kola subsidiary company level we have made significant progress at both Monchetundra and on the projects now available to the Company in the Monchetundra Flanks, and the Rosgeo JV. The Monchegorsk area is quite unique globally in having high levels of extensive previous exploration and reporting, and numerous deposits of a similar deposit style and metallurgical type in both the Monchegorsk and Monchepluton Massifs, directly adjacent to a major infrastructural corridor and in a mining friendly jurisdiction. Having now established a first mover advantage we are executing on our Kola assets, as we have done in the Urals exceeding our expectations.
James Nieuwenhuys, Chief Executive
Condensed consolidated statement of comprehensive income
for the six months ended 30 June 2021
|
|
Note |
6 months to |
12 months to |
6 months to |
|
|
|
30 June |
31 December |
30 June |
|
|
|
2021 |
2020 |
2020 |
|
|
|
(unaudited) |
(audited) |
(unaudited) |
|
|
|
£ |
£ |
£ |
|
|
|
|
|
|
|
Sales |
4 |
425,965 |
937,962 |
48,012 |
|
Cost of sales |
|
(665,448) |
(1,131,954) |
(298,240) |
|
Gross loss |
|
(239,483) |
(193,992) |
(250,228) |
|
|
|
|
|
|
|
Administrative costs |
|
(1,197,899) |
(1,889,793) |
(585,537) |
|
Investment income |
|
511 |
486 |
429 |
|
Finance costs |
|
(53,144) |
(100,886) |
(30,575) |
|
Other gains |
5 |
24,093 |
- |
- |
|
Other losses |
5 |
- |
(1,509,123) |
(429,171) |
|
|
|
|
|
|
|
Loss before tax |
|
(1,465,922) |
(3,693,308) |
(1,295,082) |
|
|
|
|
|
|
|
Income tax expense |
|
- |
- |
- |
|
|
|
|
|
|
|
Loss for the period |
|
(1,465,922) |
(3,693,308) |
(1,295,082) |
|
|
|
|
|
|
|
Other comprehensive (loss)/income: |
|
|
|
|
|
Items that will not be reclassified subsequently to |
|
|
|
|
|
NCI share of foreign exchange differences on translation of foreign operations |
|
1,293 |
181,670 |
56,344 |
|
Items that will be reclassified subsequently to |
|
|
|
|
|
Parents share of foreign exchange differences on translation |
|
4,116 |
382,686 |
139,340 |
|
|
|
|
|
|
|
Other comprehensive income for the period, net of tax |
|
5,409 |
564,356 |
195,684 |
|
|
|
|
|
|
|
Total comprehensive loss for the period |
|
(1,460,513) |
(3,128,952) |
(1,099,398) |
|
|
|
|
|
|
|
Loss for the period attributable to: |
|
|
|
|
|
Equity holders of the parent |
|
(1,351,127) |
(3,080,336) |
(1,034,870) |
|
Non-controlling interest |
|
(114,795) |
(612,972) |
(260,212) |
|
|
|
(1,465,922) |
(3,693,308) |
(1,295,082) |
|
|
|
|
|
|
|
Total comprehensive loss for the period attributable to: |
|
|
|
|
|
Equity holders of the parent |
|
(1,347,011) |
(2,697,650) |
(895,530) |
|
Non-controlling interest |
|
(113,502) |
(431,302) |
(203,868) |
|
|
|
(1,460,513) |
(3,128,952) |
(1,099,398) |
|
|
|
|
|
|
|
Basic and diluted loss (pence per share) |
|
(0.05) |
(0.11) |
(0.04) |
|
|
|
|
|
|
|
|
|
|
|
|
Condensed consolidated statement of financial position
as at 30 June 2021
|
|
|
|
|
|
|
|
Note |
At 30 June |
At 31 December |
At 30 June |
|
|
|
2021 |
2020 |
2020 |
|
|
|
(unaudited) |
(audited) |
(unaudited) |
|
|
|
£ |
£ |
£ |
|
ASSETS |
|
|
|
|
|
Non-current assets |
|
|
|
|
|
Property, plant and equipment |
6 |
4,578,844 |
4,295,908 |
4,521,464 |
|
Assets in the course of construction |
|
124,303 |
28,957 |
33,547 |
|
Intangible assets |
7 |
792,425 |
696,504 |
823,241 |
|
Investments in joint ventures |
8 |
368,447 |
- |
- |
|
Total non-current assets |
|
5,864,019 |
5,021,369 |
5,378,252 |
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
Inventories |
|
360,630 |
13,695 |
85,012 |
|
Trade and other receivables |
9 |
450,659 |
285,081 |
445,858 |
|
Current tax assets |
|
5,348 |
5,307 |
5,820 |
|
Cash and bank balances |
|
16,067,991 |
5,404,101 |
50,896 |
|
Total current assets |
|
16,884,628 |
5,708,184 |
587,586 |
|
|
|
|
|
|
|
Total assets |
|
22,748,647 |
10,729,553 |
5,965,838 |
|
|
|
|
|
|
|
EQUITY |
|
|
|
|
|
Capital and reserves |
|
|
|
|
|
Issued capital |
10 |
51,080,629 |
37,812,856 |
31,031,688 |
|
Reserves |
11 |
3,985,486 |
3,981,370 |
3,756,507 |
|
Accumulated losses |
|
(31,555,180) |
(30,204,053) |
(28,616,131) |
|
|
|
|
|
|
|
Equity attributable to equity holders of the parent |
|
23,510,935 |
11,590,173 |
6,172,064 |
|
Non-controlling interest |
|
(1,872,364) |
(1,758,862) |
(1,531,428) |
|
Total equity |
|
21,638,571 |
9,831,311 |
4,640,636 |
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
Non-current liabilities |
|
|
|
|
|
Lease liabilities |
13 |
405,494 |
425,923 |
594,086 |
|
Provisions |
15 |
99,422 |
50,186 |
59,217 |
|
Total non-current liabilities |
|
504,916 |
476,109 |
653,303 |
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Borrowings |
12 |
32,038 |
31,684 |
44,051 |
|
Lease liabilities |
13 |
113,059 |
101,007 |
105,535 |
|
Trade and other payables |
14 |
443,943 |
287,491 |
508,032 |
|
Provisions |
15 |
16,120 |
1,951 |
14,281 |
|
|
|
|
|
|
|
Total current liabilities |
|
605,160 |
422,133 |
671,899 |
|
|
|
|
|
|
|
Total liabilities |
|
1,110,076 |
898,242 |
1,325,202 |
|
|
|
|
|
|
|
Total equity and liabilities |
|
22,748,647 |
10,729,553 |
5,965,838 |
Condensed statement of changes in equity
for the six months ended 30 June 2020
|
|
|
Attributable to owners of the parent |
|
|
|
|||||
|
|
Note |
Share |
Share premium |
Deferred shares |
Other reserves |
Foreign currency translation reserve |
Accumulated losses |
Total attributable to owners of parent |
Non-controlling interest |
Total equity |
|
|
|
£ |
£ |
£ |
£ |
£ |
£ |
£ |
£ |
£ |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 1 January 2020 |
|
2,693,757 |
20,995,669 |
7,025,483 |
3,958,087 |
(325,342) |
(27,581,261) |
6,766,393 |
(1,327,560) |
5,438,833 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Issue of ordinary shares on exercise of warrants |
22,018 |
203,657 |
- |
(674) |
- |
- |
225,001 |
- |
225,001 |
|
|
Issue of shares under employee share option plan |
|
9,000 |
82,104 |
- |
(14,904) |
- |
- |
76,200 |
- |
76,200 |
|
Transaction with owners |
|
31,018 |
285,761 |
- |
(15,578) |
- |
- |
301,201 |
- |
301,201 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss for the period |
|
- |
- |
- |
- |
- |
(1,034,870) |
(1,034,870) |
(260,212) |
(1,295,082) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive loss |
|
|
|
|
|
|
|
|
|
|
|
Exchange differences on translation |
|
- |
- |
- |
- |
139,340 |
- |
139,340 |
56,344 |
195,684 |
|
Total comprehensive income |
|
- |
- |
- |
- |
139,340 |
(1,034,870) |
(895,530) |
(203,868) |
(1,099,398) |
|
|
|
2,724,775 |
21,281,430 |
7,025,483 |
3,942,509 |
(186,002) |
(28,616,131) |
6,172,064 |
(1,531,428) |
4,640,636 |
Condensed statement of changes in equity
for the six months ended 30 June 2021
|
|
|
Attributable to owners of the parent |
|
|
|
|||||
|
|
Note |
Share |
Share premium |
Deferred shares |
Other reserves |
Foreign currency translation reserve |
Accumulated losses |
Total attributable to owners of parent |
Non-controlling interest |
Total equity |
|
|
|
£ |
£ |
£ |
£ |
£ |
£ |
£ |
£ |
£ |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 1 January 2021 |
|
2,758,702 |
28,028,671 |
7,025,483 |
3,924,026 |
57,344 |
(30,204,053) |
11,590,173 |
(1,758,862) |
9,831,311 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Issue of ordinary share capital for cash |
|
53,307 |
14,072,982 |
- |
- |
- |
- |
14,126,289 |
- |
14,126,289 |
|
Share issue cost |
|
- |
(858,516) |
- |
- |
- |
- |
(858,516) |
- |
(858,516) |
|
Transaction with owners |
|
53,307 |
13,214,466 |
- |
- |
- |
- |
13,267,773 |
- |
13,267,773 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss for the period |
|
- |
- |
- |
- |
- |
(1,351,127) |
(1,351,127) |
(114,795) |
(1,465,922) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive loss |
|
|
|
|
|
|
|
|
|
|
|
Exchange differences on translation |
|
- |
- |
- |
- |
4,116 |
- |
4,116 |
1,293 |
5,409 |
|
Total comprehensive income |
|
- |
- |
- |
- |
4,116 |
(1,351,127) |
(1,347,011) |
(113,502) |
(1,460,513) |
|
|
|
2,812,009 |
41,243,137 |
7,025,483 |
3,924,026 |
61,460 |
(31,555,180) |
23,510,935 |
(1,872,364) |
21,638,571 |
|
|
|
|
|
|
|
|
|
|
|
|
Condensed consolidated statement of cash flows
for the six months ended 30 June 2021
|
|
|
6 months to |
12 months to |
6 months to |
|
|
|
30 June |
31 December |
30 June |
|
|
|
2021 |
2020 |
2020 |
|
|
|
(unaudited) |
(audited) |
(unaudited) |
|
|
|
£ |
£ |
£ |
|
Cash flows from operating activities |
|
|
|
|
|
|
|
|
|
|
|
Loss for the period |
|
(1,465,922) |
(3,693,308) |
(1,295,082) |
|
Adjustments for: |
|
|
|
|
|
Depreciation and amortisation of non-current assets |
|
289,850 |
205,200 |
54,045 |
|
Finance costs recognised in profit or loss |
|
53,144 |
100,886 |
30,575 |
|
Investment revenue recognised in profit or loss |
|
(511) |
(486) |
(429) |
|
Loss on impairment of financial assets |
|
|
|
|
|
Rehabilitation cost recognised in profit or loss |
|
61,643 |
(14,671) |
649 |
|
Net foreign exchange (profit)/loss |
|
(24,093) |
1,509,123 |
429,171 |
|
|
|
(1,085,889) |
(1,893,256) |
(781,071) |
|
Movements in working capital |
|
|
|
|
|
Increase in inventories |
|
(346,782) |
(12,152) |
(83,225) |
|
Increase in trade and other receivables |
|
(163,307) |
(130,219) |
(278,022) |
|
Increase/(decrease) in trade and other payables |
|
155,217 |
(65,555) |
149,992 |
|
Cash used in operations |
|
(1,440,761) |
(2,101,182) |
(992,326) |
|
|
|
|
|
|
|
Net cash used in operating activities |
|
(1,440,761) |
(2,101,182) |
(992,326) |
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
Interest received |
|
511 |
486 |
429 |
|
Invested to acquire interest in joint venture |
|
(368,447) |
- |
- |
|
Payments for property, plant and equipment |
|
(629,005) |
(687,167) |
(158,630) |
|
Payments for other intangible assets |
|
(92,774) |
(9,599) |
(1,869) |
|
Net cash used in investing activities |
|
(1,089,715) |
(696,280) |
(160,070) |
|
Cash flows from financing activities |
|
|
|
|
|
Proceeds from issues of equity shares |
|
14,126,289 |
7,934,789 |
301,201 |
|
Payment for share issue costs |
|
(858,516) |
(413,359) |
- |
|
Proceeds from borrowings |
|
- |
300,000 |
- |
|
Repayment of borrowings |
|
- |
(306,341) |
|
|
Repayment of lease liability |
|
(13,971) |
(81,491) |
- |
|
Interest paid |
|
(51,966) |
(96,965) |
(27,059) |
|
Net cash generated by financing activities |
|
13,201,836 |
7,336,633 |
274,142 |
|
|
|
|
|
|
|
Net increase/(decrease) in cash and cash equivalents |
|
10,671,360 |
4,539,171 |
(878,254) |
|
Effects of exchange rate changes on the balance of |
|
(7,470) |
(55,083) |
9,137 |
|
|
|
|
|
|
|
Cash and cash equivalents at the beginning of period |
|
5,404,101 |
920,013 |
920,013 |
|
|
|
|
|
|
|
Cash and cash equivalents at the end of the period |
|
16,067,991 |
5,404,101 |
50,896 |
1. General information
Eurasia Mining plc (the "Company" or the "Group") is a public limited company incorporated and domiciled in Great Britain with its registered office at International House, 42 Cromwell Road, London SW7 4EF, United Kingdom and principal place of business at Clubhouse Bank, 1 Angel Court, EC2R 7HJ. The Company's shares are listed on AIM, a market of the London Stock Exchange. The principal activities of the Company and its subsidiaries (the "Group") are related to the exploration for and development of platinum group metals, gold and other minerals in Russia.
The financial information set out in these condensed interim consolidated financial statements (the "Interim Financial Statements") do not constitute statutory accounts as defined in Section 435 of the Companies Act 2006. The Group's statutory financial statements for the year ended 31 December 2020, prepared under International Financial Reporting Standards (the "IFRS"), have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified. The report did not contain a statement under Section 498(2) of the Companies Act 2006.
2. Basis of preparation
The Group prepares consolidated financial statements in accordance with International Accounting Standards in conformity with the requirements of the Companies Act 2006. These condensed consolidated interim financial statements for the period ended 30 June 2021 have been prepared by applying the recognition and measurement provisions of IFRS and the accounting policies adopted in the audited accounts for the year ended 31 December 2020.
These Interim Financial Statements have been prepared under the historical cost convention.
The accounting policies have been applied consistently throughout the Group for the purposes of preparation of these condensed consolidated interim financial statements.
The Interim Financial Statements are presented in Pounds Sterling (£), which is also the functional currency of the parent company.
3. Accounting policies
The Interim Financial Statements have been prepared in accordance with the accounting policies adopted in the Group's last annual financial statements for the year ended 31 December 2020.
4. Revenue
|
|
|
6 months to |
12 months to |
6 months to |
|
|
|
30 June |
31 December |
30 June |
|
|
|
2021 |
2020 |
2020 |
|
|
|
£ |
£ |
£ |
|
Sale of platinum and other metals |
|
425,965 |
937,962 |
48,012 |
|
|
|
|
|
|
|
|
|
425,965 |
937,962 |
48,012 |
5. Other gains and losses
|
|
|
6 months to |
12 months to |
6 months to |
|
|
|
30 June |
31 December |
30 June |
|
|
|
2021 |
2020 |
2020 |
|
|
|
£ |
£ |
£ |
|
Gains |
|
|
|
|
|
Net foreign exchange gain |
|
24,093 |
- |
- |
|
|
|
24,093 |
- |
- |
|
Losses |
|
|
|
|
|
Net foreign exchange loss |
|
(429,171) |
(1,509,123) |
(429,171) |
|
|
|
(429,171) |
(1,509,123) |
(429,171) |
|
|
|
(405,078) |
(1,509,123) |
(429,171) |
6. Property, plant and equipment
|
|
|
30 June |
31 December |
30 June |
|
|
|
2021 |
2020 |
2020 |
|
|
|
£ |
£ |
£ |
|
Net book value at the beginning of period |
|
4,295,908 |
3,929,037 |
3,929,037 |
|
Additions |
|
533,983 |
1,288,200 |
854,922 |
|
Depreciation |
|
(289,850) |
(205,200) |
(54,045) |
|
Exchange differences |
|
38,803 |
(716,129) |
(208,450) |
|
|
|
|
|
|
|
Net book value at the end of period |
|
4,578,844 |
4,295,908 |
4,521,464 |
7. Intangible assets
|
|
|
30 June |
31 December |
30 June |
|
|
|
2021 |
2020 |
2020 |
|
|
|
£ |
£ |
£ |
|
Net book value at the beginning of period |
|
696,504 |
854,995 |
854,995 |
|
Additions |
|
92,774 |
9,599 |
1,869 |
|
Exchange differences |
|
3,147 |
(168,090) |
(33,623) |
|
|
|
|
|
|
|
Net book value at the end of period |
|
792,425 |
696,504 |
823,241 |
Intangible assets represent capitalised costs associated with Group's exploration, evaluation and development of mineral resources.
8. Investments in joint venture
|
|
|
30 June |
31 December |
30 June |
|
|
|
2021 |
2020 |
2020 |
|
|
|
£ |
£ |
£ |
|
Investments in joint venture |
|
|
|
|
|
Investments in the period |
|
368,447 |
|
|
|
|
|
|
|
|
|
|
|
368,447 |
- |
- |
Investment in joint venture is an investment made so far to acquire in stages 75% interests from Rosgeo, a Russian registered and state funded exploration Company in the several new exploration assets. These assets will be held by new joint venture companies where Rosgeo will retain 25%.
9. Trade and other receivables
|
|
|
30 June |
31 December |
30 June |
|
|
|
2021 |
2020 |
2020 |
|
|
|
|
|
|
|
Trade receivables |
|
495 |
- |
47,717 |
|
Prepayments |
|
22,707 |
75,041 |
34,506 |
|
Other receivables |
|
427,457 |
210,040 |
363,635 |
|
|
|
|
|
|
|
|
|
450,659 |
285,081 |
445,858 |
The fair value of trade and other receivables is not materially different to the carrying values presented. None of the receivables are provided as security or past due.
10. Share capital
|
|
|
30 June |
31 December |
30 June |
|
|
|
2021 |
2020 |
2020 |
|
|
|
|
|
|
|
Issued ordinary shares with a nominal value of 0.1p: |
|
|
|
|
|
|
|
|
|
|
|
Number |
|
2,724,774,624 |
2,693,756,753 |
2,724,774,624 |
|
Nominal value (£) |
|
2,724,775 |
2,693,757 |
2,724,775 |
|
|
|
|
|
|
|
Fully paid ordinary shares carry one vote per share and carry the right to dividends. |
|
|
||
|
|
|
|
|
|
|
Issued deferred shares with a nominal value of 4.9 p: |
|
|
|
|
|
Number |
|
143,377,203 |
143,377,203 |
143,377,203 |
|
Nominal value (£) |
|
7,025,483 |
7,025,483 |
7,025,483 |
|
|
|
|
|
|
Deferred shares have the following rights and restrictions attached to them:
- they do not entitle the holders to receive any dividends and distributions;
- they do not entitle the holders to receive notice or to attend or vote at General Meetings of the Company;
- on return of capital on a winding up the holders of the deferred shares are only entitled to receive the amount paid up on such shares after the holders of the ordinary shares have received the sum of 0.1p for each ordinary share held by them and do not have any other right to participate in the assets of the Company.
The increase in the Company's issued share capital during the reporting period occurred as follows:
|
Ordinary shares |
|
Number of shares |
Share |
Share |
|
|
|
|
£ |
£ |
|
Balance at 1 January 2020 |
|
2,758,701,681 |
2,758,702 |
28,028,671 |
|
Share placing for cash |
|
53,306,751 |
53,307 |
14,072,982 |
|
Cost of issue of shares |
|
- |
|
(858,516) |
|
|
|
|
|
|
|
Balance at 30 June 2021 |
|
2,812,008,432 |
2,812,009 |
41,243,137 |
|
|
|
|
|
|
|
Deferred shares |
|
Number of deferred shares |
Deferred share |
|
|
|
|
|
£ |
|
|
Balance at 1 January and 30 June 2021 |
|
143,377,203 |
7,025,483 |
|
11. Reserves
|
|
|
30 June |
31 December |
30 June |
|
|
|
2021 |
2020 |
2020 |
|
|
|
£ |
£ |
£ |
|
Capital redemption reserve |
|
3,539,906 |
3,539,906 |
3,539,906 |
|
Foreign currency translation reserve |
|
61,460 |
57,344 |
(186,002) |
|
Equity-based payment reserve |
|
384,120 |
384,120 |
402,603 |
|
|
|
|
|
|
|
|
|
3,985,486 |
3,981,370 |
3,756,507 |
The capital redemption reserve was created as a result of a share capital restructuring in earlier years. There is no policy of regular transactions affecting the capital redemption reserve.
The foreign currency translation reserve represents exchange differences relating to the translation from the functional currencies of the Group's foreign subsidiaries into GBP.
The equity-based payments reserve represents a reserve arisen on (i) the grant of share options to employees under the employee share option plan and (ii) on issue of warrants under terms of professional service agreements.
12. Borrowings
|
|
|
|
|
|
|
|
|
30 June |
31 December |
30 June |
|
|
|
2021 |
2020 |
2020 |
|
|
|
£ |
£ |
£ |
|
Current |
|
|
|
|
|
Unsecured loan |
|
32,038 |
31,684 |
44,051 |
|
|
|
|
|
|
|
|
|
32,038 |
31,684 |
44,051 |
In 2017 the Group entered into unsecured loan facility to borrow up to 57 million Russian Rubbles (RR) at 14% per annum, from Region Metal, the then contractor and the West Kytlim mine operator. The Group had drawn RR 4.18 million and repaid RR0.9 million by 31 December 2020. As the contractor's arrangements had been discontinued the Group has no intention to utilise any more funds from this facility. The loan is for repayment in 2021.
No borrowing costs were capitalised in 2021 and 2020.
13. Lease liabilities
The Group leases certain of its plant and equipment. The average lease term is 4.5 years (2019: no lease). The Group has option to purchase the equipment for a nominal amount at the maturity of the finance lease. The Group's obligation under finance leases are secured by the lessor's title to the leased assets.
Interest rates underlying all obligations under finance leases are fixed at respective contract dates ranging from 21.9% to 23.5% per annum.
|
Minimum lease payments |
|
30 June |
31 December |
30 June |
|
|
|
2021 |
2020 |
2020 |
|
|
|
£ |
£ |
£ |
|
Less than one year |
|
203,647 |
201,392 |
233,311 |
|
Between one and five years |
|
511,819 |
572,791 |
819,682 |
|
More than five years |
|
- |
- |
- |
|
|
|
715,466 |
774,183 |
1,052,993 |
|
Less future finance charges |
|
(196,913) |
(247,254) |
(353,372) |
|
|
|
|
|
|
|
Present value of minimum lease payments |
|
518,553 |
526,929 |
699,621 |
|
|
|
|
|
|
|
Present value of minimum lease payments |
|
30 June |
31 December |
30 June |
|
|
|
2021 |
2020 |
2020 |
|
|
|
£ |
£ |
£ |
|
Less than one year |
|
113,059 |
101,007 |
105,535 |
|
Between one and five years |
|
405,494 |
425,923 |
594,086 |
|
More than five years |
|
- |
- |
- |
|
|
|
|
|
|
|
Present value of minimum lease payments |
|
518,553 |
526,930 |
699,621 |
14. Trade and other payables
|
|
|
|
|
|
|
|
|
30 June |
31 December |
30 June |
|
|
|
2021 |
2020 |
2020 |
|
|
|
|
|
|
|
Trade payables |
|
232,746 |
- |
195,443 |
|
Accruals |
|
23,051 |
101,090 |
38,246 |
|
Social security and other taxes |
|
44,594 |
18,559 |
37,936 |
|
Other payables |
|
143,552 |
167,842 |
236,407 |
|
|
|
|
|
|
|
|
|
443,943 |
287,491 |
508,032 |
The fair value of trade and other payables is not materially different to the carrying values presented. The above listed payables were all unsecured.
15. Provision
|
|
|
30 June |
31 December |
30 June |
|
|
|
2021 |
2020 |
2020 |
|
|
|
£ |
£ |
£ |
|
Long term provision: |
|
|
|
|
|
Environment rehabilitation |
|
99,422 |
50,186 |
59,217 |
|
Short term provision: |
|
|
|
|
|
Environment rehabilitation |
|
16,120 |
1,951 |
14,281 |
|
|
|
|
|
|
|
|
|
115,542 |
52,137 |
73,498 |
|
|
|
|
|
|
|
Movement in provision |
|
Six month to |
12 month to |
Six month to |
|
|
|
30 June |
31 December |
30 June |
|
|
|
2021 |
2020 |
2020 |
|
|
|
£ |
£ |
£ |
|
At 1 January |
|
52,137 |
78,103 |
78,103 |
|
Recognised in the period |
|
60,292 |
15,545 |
649 |
|
Utilised in the period |
|
- |
(11,986) |
- |
|
Reduction resulting from re-measurement or settlement without cost |
|
- |
(19,301) |
- |
|
Unwinding of discount and effect of changes in the discount rate |
|
1,178 |
3,921 |
- |
|
Exchange difference |
|
1,935 |
(14,145) |
(5,254) |
|
|
|
|
|
|
|
At the end of the period |
|
115,542 |
52,137 |
73,498 |
|
|
|
|
|
|
Provision is made for the cost of restoration and environmental rehabilitation of the land disturbed by the West Kytlim mining operations, based on the estimated future costs using information available at the reporting date.
The provision is discounted using a risk-free discount rate of from 6.6% to 6.88% (2020: 3.87% to 5.08%) depending on the commitment terms, attributed to the Russian Federal Bonds.
Provision is estimated based on the sub-areas within general West Kytlim mining licence the company has carried down its operations on by the end of the reporting period. Timing is stipulated by the forestry permits issued at the pre-mining stage for each of sub-areas. Actual costs in respect of the long-term provision recognised in 2021 will be incurred within 2022-2025.
16. Commitments
At the time of the award of the Monchetundra mining license a royalty payment was calculated by the Russian Federal Reserves Commission. 20% of this payment was paid in December of 2018 and the remaining 80%, or Rub16.68 million (approximately £160,000) to be paid by November 2023.
During 2020 the Group entered into several lease agreements to lease mining plant and equipment. As at 31 December 2020 the average lease term was 4.5 years and present value of minimum lease payments £518,553 (2019: £nil).
In March 2021 the Group entered into a cooperation (joint venture) agreement with Rosgeo regarding exploration assets in the proximity of Monchegorsk on Kola Peninsula. The Group will acquire an initial 75% stake in each asset, which will be assigned to separate joint ventures.
The Group's outstanding commitments under the agreement are Rub37.2 mln (approximately £3.7mln) payable in stages conditional to licensing and permitting.