TIDMAMC
RNS Number : 7269Q
Amur Minerals Corporation
30 June 2022
30 June 2022
AMUR MINERALS CORPORATION
("Amur", the "Company" or the Group)
AUDITED FINAL RESULTS FOR THE YEARED 31 DECEMBER 2021
2021 Highlights:
-- Advancing the TEO Project document for the Kun-Manie Project,
and submission of the draft report to the expert commission of the
State Committee on Reserves ("GKZ").
-- Sale of Amur's 14% interest in the Nathan River Resources
("NRR") Roper Bar iron ore operation in Australia.
-- Continued M&A effort to identify a partner and / or buyer
of the Kun-Manie nickel copper sulphide project located in the
Russian Far East.
Chairman's Statement
It is with pleasure that I update you on the activities of the
Company for the twelve month period to 31 December 2021, as well as
the period since the year end, including recent global events which
have impacted us. Along with all worldwide corporate entities, Amur
Minerals Corporation (the "Company") had to balance and endure the
challenges related to the Covid-19 pandemic during the year and the
more recent, post 2021, developing geopolitical situation in the
Ukraine. Broadly, our major areas of focus during the year
included:
-- Advancing the TEO Project document for the Kun-Manie Project,
compiled by the expert team of Oreoll Ltd. ("Oreoll") and
submission of the draft report to the expert commission of the
State Committee on Reserves ("GKZ"). This is a document required by
the Russian Federation which was completed post 2021 and maintains
our compliance with the Russian permitting regime.
-- Selling our 14% interest in the Nathan River Resources
("NRR") Roper Bar iron ore operation in Australia. Grossing US$5.9
million with a profit of US$0.9 million.
-- The continued M&A effort to identify a partner and / or
buyer of the Kun-Manie nickel copper sulphide project located in
the Russian Far East. A bona fide purchase offer being ultimately
rejected in May 2022.
The strategic plan for 2022 was to carry out the work plan and
strategy to maintain the extraction rights to its 100% controlled
Kun-Manie project and this continues to be our prime objective.
However, the current geopolitical situation in Ukraine has
radically altered our strategy for 2022. It is therefore important
that we also provide key additional information as to the impact of
Russia's "Special Military Operation" ("SMO"). Given the changing
situation regarding the SMO, the 2022 strategy may require rapid
adjustments depending on the actions of various nation states and
the Russian Federation ("RF"). This has not yet impacted our
in-Russia operational activities but has substantially altered our
activities related to our M&A strategy.
Looking at our 2021 activities in isolation, we present the
Annual Report and Accounts for the year 31 December 2021.
Importantly, we note that over the course of the year 2021, the
Company continued to remain debt-free, and its cash reserve
increased 2.4 times from US$2,790,000 (1 January 2021) to
US$6,682,000 (31 December 2021).
Kun-Manie Nickel-Copper Sulphide Project
Kun-Manie is and remains our flagship project as one of the
largest undeveloped nickel - copper sulphide projects in the world.
It is located near the three largest nickel consuming nations of
Japan, Korea and China and we will continue to focus on this
project.
Our primary objective is to maintain the Group's 100% production
rights at Kun-Manie. We shall continue to complete specific work
programmes per the terms and conditions of the licence to maintain
our production rights. Entering 2021, two objectives remained to be
completed. The first was the completion of an expert commission
report called a TEO Project which was scheduled for completion at
the end of 2021 and completed in H1 2022. Thereafter, a Mine Plan
document must also be completed.
Production approval for the Kun-Manie project requires RF
approvals based on Russian protocols. These approvals cannot be
obtained based on "western standard" Feasibility, Definitive or
Bankable studies. The approvals are derived from several RF
agencies based on Russian standard design work completed by
certified institutes. It has always been a priority for us to
obtain suitable and approvable Russian documentation for obtaining
the required approvals. This approach ensures that we maintain the
integrity of and production rights to the licence and have a fully
suitable and approved, ready to operate mining operation at the end
of the day. This part of our strategy remains unchanged from
2021.
For clarification, it is important to understand what a TEO
Project is. It is a feasibility study level document compiled by
certified Russian Federation experts using specific state-defined
procedures and reporting requirements and is ultimately approved by
the State Committee on Reserves ("GKZ"). The document addresses all
project disciplines and is similar to the contents of western
feasibility study. It is to include all available technical results
and study work specific to the project. For compilation of this TEO
Project report, we contracted an experienced and independent expert
company (Oreoll LLC) who warranted it would diligently complete and
defend the results submitted to the GKZ. Oreoll's first submission
date on our behalf was 20 August 2021.
In the evaluation process, the first submission of the TEO
Project is considered a draft document. A GKZ commission of
experienced, certified and approved experts covering all project
disciplines is then assembled and each expert examines specific
sections of the report relevant to their expertise. Discussions
between Oreoll and the GKZ experts are held and Oreoll is directed
to finalise the negotiated document. This final report covers the
design basis of the project with regard to operating parameters,
design considerations, operating and capital cost estimates,
infrastructure requirements and financial analysis.
In a post 2021 event, the Company announced the final TEO
Project results in an RNS released 7 June 2022. The key highlights
were:
-- The TEO Project was compiled by Oreoll LLC and GKZ Russian
Federation certified experts from all project disciplines.
-- The GKZ expert commission approved a 19-year open pit
operational design with revenue generation derived from two
saleable concentrates allowing for the recovery of both copper and
nickel. Minor payable amounts for gold, platinum and palladium will
also be recovered.
-- The design parameters maximise revenue generation to the RF
based on fully loaded taxation and royalty schemes. The total Net
Present Value ("NPV(10%) ") deliverable to the RF is projected to
be US$ 628 million. This approach does not optimise the financial
return to the project operator which is addressed during the next
and final requirement of the mine planning stage for the
licence.
-- The GKZ commission reviewed Oreoll's submission. Necessary
adjustments allowing for the identification and approval of
operational parameters and considerations, associated capital and
operating costs, the revenue generation from the sale of individual
nickel and copper concentrates and selected commodity prices were
defined. As a result of the expert evaluations, a Life of Mine
("LOM") cutoff grade ("COG") was defined to be 0.2% Ni. The annual
nominal production rate of 12.4 million ore tonnes was
selected.
-- Lerchs Grossman open pit production analyses including mining
loses and dilution indicate the average LOM ore production grades
for delivery to the sulphide flotation plant will be 0.66% Ni,
0.18% Cu, 0.015% Co, 0.05 grammes per tonne ("g/t") Au, 0.90 g/t
Ag, 0.14 g/t Pt and 0.14 gt/ Pd. The total cumulative LOM RF
National Association of Subsoil Examination ("NAEN") certified
Reserve totals 187.1 million ore tonnes. Approximately 4.6 cubic
metres ("m(3) ") (13.8 tonnes) of waste will be extracted per ore
tonne.
-- The Oreoll and GKZ experts have determined the LOM capital
cost estimate is US$ 1.92 billion with US$ 1.14 billion allocated
as preproduction and construction costs, US$ 698 million in
sustaining costs and US$ 85 million in working capital. The
increase in the capital cost estimate from previously reported
projections is attributable to the more than doubling of the
previous annual operational capacity impacting the expansion of the
open pit mining fleet, plant expansion and the addition of a copper
recovery circuit within the process plant, tailings storage
expansion, power plant requirements and the need to construct a
dual carriage way access road capable of handling the increased
mine support and concentrate transport needs. All capital
expenditure sectors include contingencies specific to the project
and its location.
-- Operating costs per ore tonne are projected to be US$ 42.32
including ore and waste mining costs, depreciation and
royalties.
-- Accounting for both flotation plant metallurgical losses and
adjustments for off take fees, the LOM recovered payable metals
from the two concentrates total 627 thousand nickel tonnes, 177
thousand copper tonnes, 1.5 tonnes of gold, 3.3 tonnes of platinum
and 3.5 tonnes of palladium. The payable metal schedules and all
fees are based on confidential metal trading schedules provided by
two reputable, internationally recognised industry metals
traders.
-- Nickel and copper account for 95% of the LOM revenue obtained
from the nickel and copper concentrate products. The GKZ approved
conservative prices for the primary revenue generators of nickel
and copper were US$ 14,468 per Ni tonne (US$ 6.56 per pound) and
US$ 6,758 per Cu tonne (US$ 3.07 per pound). Minor credits were
included for gold (US$ 58.90 / g), platinum (US$ 34.35 / g) and
palladium (US$ 80.75 / g). Metal prices for nickel and copper as at
28 June 2022 were US$10.82 and US$3.86, respectively.
-- Using these conservative/low metals prices across the 19 year
production schedule, the NPV(10%) to the Company is US$ 333 million
with an Internal Rate of Return ("IRR") of 15.6%. The payback
period for the 12.4 million ore tonne per year operation is
projected to be 5.5 years.
The most important component derived within the GKZ approved TEO
Project is the registration of the mining reserve. It is from these
final certified reserves that a Mine Plan will be developed. For
your convenience, the table below defines the 19 year GKZ Life of
Mine NAEN reserve by tonnages and grades to be delivered to the
mill.
Mine Delivered Mill Feed NAEN
Reserve
Dilution and Mining Losses Included
COG 0.2% Ni
--------------------------------------------
Commodity Factor In Balance -
B + C1 + C2
----------- -------- ---------------------
0.2% Ni Grade
COG
----------- -------- ------------ -------
Mill Feed
Tonnes T 187,134,000
-------- ------------ -------
Ni T 1,233,697 0.66%
-------- ------------ -------
Cu T 343,045 0.18%
-------- ------------ -------
Co T 25,518 0.014%
-------- ------------ -------
Pt Kg 25,709 0.14
g/t
-------- ------------ -------
Pd Kg 26,547 0.14
g/t
-------- ------------ -------
Au Kg 8,964 0.05
g/t
-------- ------------ -------
Ag Kg 168,505 0.90
g/t
-------- ------------ -------
JORC resources and reserves are not accepted by the Russian
Federation, however, we have provided JORC estimates over the life
of our exploration programme. We implemented this approach in
accordance with CRIRSCO recommendations which allow shareholders to
measure the progress of resource expansion of our resource with
time. Though not required, CRIRSCO recommend this approach be taken
for publicly listed companies such as Amur.
With the TEO Project now complete, our next phase is to compile
the Mining Plan due mid-year 2023, which leads to obtaining
construction, mining and operational approvals and funding
considerations.
Kun-Manie -Russia's SMO, Sanctions and Orders
Entering 2021, our strategy regarding funding was based on the
knowledge that the preproduction and construction start-up capital
expenditure would be relatively large (greater than US$ 0.5
billion) given the remote location of the project. We anticipated
that project funding would require a consortium of Russian and
international funding sources. The strategy throughout 2021 and
into the start of 2022 consisted of:
-- Completion of all required conditions per the terms of the
licence including the mandatory TEO Project (Feasibility Study),
review by the State Committee on Reserves ("GKZ") and the
subsequent mandatory Mine Plan work also requiring certified
Russian institutes input and approvals.
-- Detailed engineering and design work completed to Russian
standards thus making it suited for approvals by the specific
authorities and meeting the investment requirements of Russian
financial institutions.
-- In anticipation that we would have to raise substantial funds
from both inside and outside of Russia to fully support financing,
a western bankable study will also be compiled. Potential outside
funding sources will include internationally recognised financial
institutions and intermediate metal off-takers. Based on
discussions with western mining engineering companies experienced
in Russia, the western study should be a hybrid product based on
the Russian documentation but compiled in a manner meeting both
Russian and international requirements. The best time to undertake
this western work is during the later stages of the assembly of the
Russian banking study following the TEO Project.
In Q1 22, we revisited the funding approach of our strategy due
to the SMO in Ukraine. Sanctions are now in place and continue to
be introduced by various nation states. These target Russian
banking institutions, select Russian companies and numerous
individuals associated with mineral and industrial activities. In
response, the Russian Federation issued and continues to issue
counter measures (Orders). The main Order restricts the ability of
companies to operate within Russia through strict currency controls
restricting the outflow of funds from Russia.
To this point, our subsidiary, AO Kun-Manie a Russian company,
has functioned on an unhindered basis. The sanctions and orders
have, however, impacted the Group's activities.
AMC - The SMO, Sanctions and Orders
In 2020, Amur developed a shortlist of potential partners or
purchasers wherein a Russia-based project would be of interest. The
list included Russian and internationally based mining companies,
investment groups, financial institutions, metal trading groups and
electric vehicle battery manufacturers. Discussions were held with
potential partners and confidentiality agreements were signed with
interested parties.
In Q2 21 and Q3 21, the M&A market relating to nickel and
copper sulphide projects improved due to the increasing Green
Energy interest and electric vehicle battery demand. Three parties
(one western and two Russian) demonstrated bona fide interest in
funding or purchasing Kun-Manie.
Medea Naturals Resources ("MNR") were contracted to establish a
Fair Market Value ("FMV") for the sale of Kun-Manie. Based on their
survey and the analysis of world-wide nickel exploration and
development project transactions, they established a transaction
sale price ranging from US$106 million to US$131 million. The
majority of the transactions surveyed were external to Russia, but
focused on an anticipated yield earned by a project sale.
Negotiations advanced with all three parties and funding
alternatives and purchase options were tabled. Of the three, a
proposed outright purchase of Kun-Manie was selected as it offered
the highest consideration available to the Company, approaching
fair market value. Transaction documentation was initiated and
neared completion in late February 2022.
On 24 February 2022, Russia initiated the SMO. The action
resulted in the immediate implementation of sanctions and counter
measure responses by the Russian Government on 28 February, 1 March
and 8 March of 2022. The combined actions had an immediate impact
on the proposed sale of Kun-Manie, voiding the agreed terms of the
nearly final Share Purchase Agreement ("SPA"). The buyer and Amur
agreed to monitor the situation and revisit the SPA once the full
impact of the sanctions and orders were understood.
Upon completion of a sanction and order review period,
negotiations were resumed to modify the SPA allowing for all
constraints to be considered. Specific considerations and impacts
to the transaction and available alternatives is a transaction
structure as follows:
-- A transaction with a Russian entity or individual can be
implemented if they are not sanctioned. Searches by our Russian and
UK solicitors confirmed the buyer was free from restriction, and
regular reviews were conducted as sanctions are frequently updated.
The buyer remained unsanctioned and we were able to modify the
SPA.
-- Russian Government implemented Orders restricting foreign
currency flow out of Russia will have the greatest impact. Foreign
exchange payments may be made with the approval of a newly formed
Currency Control Committee and this committee has final approval on
the quantity and timing of currency flow from Russia. The buyer's
funds would originate from Russia, and therefore must be approved
by the committee.
-- For the transaction, the Company requires legal support using
Russian solicitors to ensure that the transaction will meet all
regulatory and statutory considerations. Many legal entities have
exited Russia, including our former Russian solicitors who were
involved in negotiations. We had anticipated that this might occur
and have already engaged a highly regarded, experienced Russian law
firm, Birch Legal.
-- In the event that Amur is unable to complete a transaction
with the buyer, the SMO has substantially and adversely impacted
the opportunity to sell and develop Kun-Manie. Sanctions have
eliminated many companies, including mining entities, some off-take
metal marketers and all sanctioned Russian companies as potential
business counterparts. Additionally, the larger and well-funded
Russian resource banks and fund sources are predominantly now
sanctioned. International funding sources are avoiding
participation in Russian based projects.
May 2022 Kun-Manie Transaction Offer
From late March through early May of 2022, a revised SPA was
negotiated and executed with the buyer. All necessary associated
documentation was completed, including the Circular for shareholder
approval of the offer. For a total consideration of US$105 million,
Stanmix Holding Limited offered to purchase AO Kun-Manie per the
following terms.
-- US$15 million upon Completion of the Transaction (to occur
within 60 days of signing the SPA)
-- US$10 million within 12 months of the date of the SPA
-- US$50 million within 48 months of the date of the SPA
-- US$30 million, payable in ten annual installments of US$3 million commencing in 2027
Requiring shareholder approval, a General Meeting was set for 25
May 2022. At the request of attending shareholders, our Chief
Executive Officer ("CEO"), Robin Young conducted a Q&A session
related to the transaction. Subsequent to the Q&A session, the
offer from Stanmix was rejected. The primary reasons from
shareholders attending were:
-- Payment terms extended over to long a period.
-- No absolute guarantee that all payments would be forthcoming.
-- Initial payments were insufficient.
-- Specific dividends to shareholders were not identified.
Robin Young was asked to revisit the M&A potential given the
concerns of the attending shareholders. As at the date of this
report we continue to be in discussions with Stanmix.
Of special note, the beneficial underlying owner of Stanmix (Mr.
Vladislav Sviblov) entered into an agreement to purchase the mining
assets of Kinross Gold in Russia. This transaction was announced
and completed by Kinross Gold on 15 June 2022. Based on
renegotiated terms, the total consideration purchase price reported
by Kinross was US$340 million, a reduction of nearly 50% from the
original offer. This is the first transaction completed by a
Russian buyer with a western owner since the SMO, introduction of
sanctions and the counter measure responses of the Russian
Federation.
Impact of Kun-Manie Sale On The Company
In the event of a sale of Kun-Manie is successful, the Company
will be classified as a cash shell by the Alternative Investment
Market ("AIM"). During the immediately following six months, the
Company will need to acquire another project or company via a
Reverse Take Over ("RTO") to maintain trading on AIM. Should an RTO
not be completed within that timescale, the Company will be
suspended from trading and if after six months in suspension with
no RTO having occurred, the Company would be delisted. In
anticipation of a sale, we are examining the acquisition of
projects, particularly within more favourable mining jurisdictions
as a part of our strategy.
An alternative scenario is to reclassify the Company as an
investment vehicle which would require the Company to successfully
raise gross placing proceeds of at least GBP6.0 million.
NRR Roper Bar Iron Ore Transaction
In 2020 the Group acquired a Convertible Loan Note ("CLN") on
Nathan River Resources Pte Limited ("NRR") which owns the Roper Bar
Iron Ore Project ("Roper Bar") totalling US$4,670,000. Roper Bar is
a large established iron ore deposit in the Northern Territory of
Australia with a defined JORC resource of 446,000,000 tonnes at
39.9% Fe and a JORC reserve of 4,760,000 tonnes at 60.1% Fe. NRR
had re-established the mining and shipping of iron ore to China
under an offtake agreement with Glencore.
On 3 July 2021, the Group announced that it sold its wholly
owned subsidiary Carlo Holdings Limited ("CHL"), the direct owner
of the NRR CLN, for a cash consideration of US$5,892,000 to
Hamilton Investments Pte. Ltd., a subsidiary of Britmar (Asia) Pte
Ltd. The Group recognised a profit on the sale of US$915,000. In
addition, the CLN carried an interest-bearing coupon at 14% which
was payable to the Company. Amur received US$530,000 during its
period of ownership, of which US$327,000 was received in the year
2021.
Since the completion of the sale, in November 2021, the Roper
Bar project was placed into care and maintenance.
Financial Overview
As at 31 December 2021 the Company had cash reserves of
US$6,682,000, up from US$2,790,000 at the start of 2021 and remains
debt free.
The increase in cash reserves derives largely from the sale of
the Company's wholly owned subsidiary CHL for cash consideration of
US$6,137,019. As a result, the Company has not found it necessary
to undertake any equity placings or other fundraising activities
during the period. The Group also received coupon interest payments
of 14% from the NRR CLN held within CHL. During the reporting
period US$327,000 was received.
Administration expenses for the 2021 year totalled US$1,790,000
(2020: US$3,083,000). The main reasons for the decrease in
administration expenses was the reduction in non-executive
directors from four to three, saving US$177,000, a reduction in
professional fees of US$150,000 as a result of completing the TEO
in mid-2022 and a lower share-based payment expense in 2021 of
$105,000 compared to $485,000 in 2020. Additionally, administration
expenses of US$367,000 relating to Kun-Manie were presented within
discontinued operation as at 31 December 2021 in line with the
Board's plans to sell the entity.
Other Comprehensive Income was charged with a translation loss
of US$138,000 (2020: US$4,123,000) due to the weakening of the
Russian rouble to the US dollar. Expenditure on exploration was
US$703,000 (2020: US$1,200,000) as the Group completed and
submitted the TEO Project for review in August 2021. Exploration
assets realised an exchange loss of US$585,000 (2020: exchange loss
US$3,840,000) also due to the weakening of the Russian rouble to
the US dollar.
An aggregate of GBP254,000 in cash was received, post year end
from the execution of warrants in late January / early February
2022.
Covid-19
During early 2021, the Group continued to care for the safety of
its personnel by implementing special measures to protect its
workforce while at the same time ensuring business continuity. The
Company continued to operate effectively over an extended period of
time without requiring regular access to physical offices, slowly
reverting to pre-Covid-19 operating conditions as the situation
eased towards the end of 2021.
Covid-19 created significant uncertainty and disruption in the
financial markets. However, the Company has not realised a negative
impact of Covid-19 on its ability to conduct business across the
Group including the sale of its iron ore subsidiary. With the virus
apparently in the rear view, the Directors will continue to monitor
developments.
Outlook
The Company's primary objectives for 2022 includes the
completion of the TEO Project and continuing the acquisition of all
necessary information for commencement of the Mining Plan and the
required incumbent study work.
Work will continue at a level allowing for the compilation of
bankable feasibility studies. Given that a mining operation within
Russia requires Russian sourced and certified work to obtain
operational permits and access, the initial focus is on the
generation of a Russian bankable study. Follow-on compilation of a
hybrid western bankable study is also planned. This hybrid study
will include the Russian study work with necessary considerations
to allow for the document to support external Russia funding
sources.
Both documents will include the technical, environmental, and
economic detail for needed by unsanctioned Russian and external
Russia institutional investors to advance funding for mine
construction and advancement into production. Completion of both
documents will require considerable interaction between Russian and
international organisations to complete an international BFS for
consideration.
We shall also continue to pursue the sale of the Kun-Manie
project. The most likely buyer will be a Russian entity due to the
current geopolitical situation in Ukraine.
On behalf of the Board of Directors, I would like to thank all
the staff for their dedication, loyalty and hard work throughout
this period in getting the TEO Project organised and progressing it
toward its completion.
Market Abuse Regulation (MAR) Disclosure
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR.
Enquiries:
Company Nomad and Broker Public Relations
Amur Minerals Corp. S.P. Angel Corporate Finance LLP BlytheRay
Robin Young CEO Richard Morrison Megan Ray
Adam Cowl Tim Blythe
+7 (4212) 755 615 +44 (0) 20 3470 0470 +44 (0) 20 7138 3203
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2021
2021 2020
US$'000 US$'000
---------------------------------------- --------- ---------
Non-current assets
Intangible Assets - 23,542
Property, plant and equipment - 452
Financial assets at fair value through
profit and loss - 5,255
--------- ---------
Total non-current assets - 29,249
--------- ---------
Current assets
Inventories - 207
Trade and other receivables 109 158
Cash and cash equivalents 6,682 2,790
--------- ---------
Total current assets 6,791 3,155
Non-current assets classified as held 24,447 -
for sale
--------- ---------
Total assets 31,238 32,404
--------- ---------
Current liabilities
Trade and other payables 968 913
--------- ---------
Total current liabilities 968 913
--------- ---------
Non-current liabilities
Rehabilitation provision - 141
Total non-current liabilities - 141
--------- ---------
Liabilities directly associated with 159 -
non-current assets classified as held
for sale
--------- ---------
Total liabilities 1,127 1,054
--------- ---------
Net assets 30,111 31,350
--------- ---------
Equity
Share capital 80,449 80,449
Share premium 4,278 4,278
Foreign currency translation reserve (17,612) (17,474)
Share options reserve 512 577
Retained deficit (37,516) (36,480)
--------- ---------
Total equity 30,111 31,350
--------- ---------
CONSOLIDATED INCOME STATEMENT
FOR THE YEARED 31 DECEMBER 2021
2021 2020
US$'000 US$'000
Administrative Expenses (1,790) (3,083)
--------- ---------
Operating loss (1,790) (3,083)
--------- ---------
Finance Income - 205
Finance costs - (104)
Gain on revaluation of assets held at
fair value through profit and loss* - 423
Loss on early redemption - (109)
--------- ---------
Loss before taxation (1,790) (2,668)
--------- ---------
- -
Tax Expense
--------- ---------
Loss for the year from continuing operations (1,790) (2,668)
--------- ---------
956 -
Profit from discontinued operations -
assets sold
Loss from discontinued operations - assets (372) -
held for sale
--------- ---------
Loss for the year (1,206) (2,668)
--------- ---------
Loss attributable to:
* Owners of the parent (1,206) (2,668)
--------- ---------
Loss per share (cents) from continuing
operations attributable to owners of
the Parent - Basic & Diluted (0.13) (0.25)
--------- ---------
Earnings per share (cents) from discontinued
operations attributable to owners of
the Parent - Basic & Diluted (0.04) -
--------- ---------
*Assets held at fair value were disposed of in the period and
have been included in discontinued operation for the year ended 31
December 2021
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 31 DECEMBER 2021
2021 2020
US$'000 US$'000
----------------------------------------- --------- ---------
Loss for the year (1,206) (2,668)
--------- ---------
Other comprehensive loss
Items that may be classified to
profit or loss:
Exchange differences on translation
of foreign operations (138) (4,123)
--------- ---------
Total other comprehensive loss for
the year (138) (4,123)
--------- ---------
Total comprehensive loss for the
year attributable to:
* Owners of the parent (1,344) (6,791)
--------- ---------
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARED 31 DECEMBER 2021
2021 2020
US$'000 US$'000 US$'000 US$'000
Cash flows from operating activities
Payments to suppliers and employees (1,833) (2,196)
-------- ----------
Net cash outflow used in operating
activities (1,833) (2,196)
-------- ----------
Cash flow from investing activities
Payments for exploration expenditure (426) (564)
Loans granted - (4,658)
Sale of investments 6,137 -
Interest received 327 43
Net cash generated from/(used
in) investing activities 6,038 (5,179)
-------- ----------
Cash flow from financing activities
Cash received on issue of shares,
net of issue costs - 10,005
Issue of convertible loans,
net of issue costs - 607
Repayment of convertible loans - (720)
-------- --------
Net cash generated from financing
activities - 9,892
-------- ----------
Net Increase/(decrease) in
cash and cash equivalents 4,205 2,517
-------- ----------
Cash and cash equivalents at
beginning of year 2,790 398
Exchange differences on cash
and cash equivalents (313) (125)
-------- ----------
Cash and cash equivalents at
end of year 6,682 2,790
-------- ----------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2021
Foreign
Currency Share
Share Share Translation Options Retained
Capital Premium Reserve Reserve Deficit Total Equity
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
---------------------------- --------- --------- ------------- --------- --------- -------------
Balance at 1 January
2020 69,510 4,790 (13,351) 1,136 (34,948) 27,137
---------------------------- --------- --------- ------------- --------- --------- -------------
Year ended 31 December
2020:
Loss for the year - - - - (2,668) (2,668)
Other comprehensive
loss
Exchange differences
on translation of foreign
operations - - (4,123) - - (4,123)
--------- --------- ------------- --------- --------- -------------
Total comprehensive
loss for the year - - (4,123) - (2,668) (6,791)
--------- --------- ------------- --------- --------- -------------
Issue of share capital 10,063 (512) - - - 9,551
Conversion warrants 876 - - - - 876
Options charge for the
year - - - 577 - 577
Options expired - - - (1,136) 1,136 -
---------------------------- --------- --------- ------------- --------- --------- -------------
Balance at 31 December
2020 80,449 4,278 (17,474) 577 (36,480) 31,350
---------------------------- --------- --------- ------------- --------- --------- -------------
Balance at 1 January
2021 80,449 4,278 (17,474) 577 (36,480) 31,350
---------------------------- --------- --------- ------------- --------- --------- -------------
Year ended 31 December
2021:
Loss for the year - - - - (1,206) (1,206)
Other comprehensive
loss
Exchange differences
on translation of foreign
operations - - (138) - - (138)
--------- --------- ------------- --------- --------- -------------
Total comprehensive
loss for the year - - (138) - (1,206) (1,344)
--------- --------- ------------- --------- --------- -------------
Issue of share capital - - - - - -
Conversion warrants - - - - - -
Options charge for the
year - - - 105 - 105
Options expired - - - (170) 170 -
Balance at 31 December
2021 80,449 4,278 (17,612) 512 (37,516) 30,111
---------------------------- --------- --------- ------------- --------- --------- -------------
1. Basis of prePARATION
a) General Information
Amur Minerals Corporation is incorporated under the British
Virgin Islands Business Companies Act 2004. The registered office
is Kingston Chambers, P.O. Box 173, Road Town, Tortola, British
Virgin Islands.
The Company and its subsidiaries ("Group") locates, evaluates,
acquires, explores and develops mineral properties and projects
with its primary asset being located in the Russian Far East.
The Company is also the 100% owner of Irosta Trading Limited
("Irosta"), an investment holding company incorporated and
registered in Cyprus. Irosta holds 100% of the shares in AO
Kun-Manie ("Kun-Manie"), an exploration and mining company
incorporated and registered in Russia, which holds the Group's
mineral licences. The Company also sold its wholly owned subsidiary
Carlo Holdings Limited during the year.
The Group's principal place of business is in the Russian
Federation.
The Group's principal asset is the Kun-Manie production licence,
which was issued in May 2015. The licence is valid until 1 July
2035 and allows the Company's subsidiary, AO Kun-Manie, to recover
all revenues from 100% (less metal extraction royalties) of the
mined metal that specifically includes nickel, copper, cobalt,
platinum, palladium, gold and silver. The Company's management are
evaluating the project with a view of determining an appropriate
model for the development and ultimate exploitation of the project.
This includes the potential sale of the asset.
b) Basis of Preparation
These financial statements have been prepared under the
historical cost convention, except for the valuation of derivative
financial instruments, on the basis of a going concern and in
accordance with UK-adopted international accounting standards.
The financial statements are presented in thousands of United
States Dollars.
The principal accounting policies adopted in the preparation of
the financial statements are set out below. The policies have been
consistently applied to all the years presented, unless otherwise
stated.
The preparation of financial statements in accordance with
International Accounting Standards as issued by the International
Accounting Standards Board ("IASB") and interpretations issued by
the International Financial Reporting Interpretations Committee
("IFRIC") requires management to make judgements, estimates and
assumptions that affect the application of policies and reported
amounts of assets and liabilities, income and expenses. The
estimates and associated assumptions are based on historical
experience and factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making
judgements about carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ
from these estimates. The areas involving a higher degree of
judgement or complexity, or where assumptions and estimates are
significant to the consolidated financial statements, are disclosed
in note 3.
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 only
affects that period, or in the period of revision and future
periods if the revision affects both current and future
periods.
c) Going concern
The Group operates as a natural resource exploration and
development group. To date, it has not earned any revenues and is
considered to be in the final stages of exploration and evaluation
activities of its Kun-Manie project.
The Directors have reviewed the Group's cash flow forecast for
the period to 30 June 2023 and believe the Group has sufficient
cash resources to cover planned and committed expenditures over the
period. As a result of the sale of Carlo Holdings Limited in the
year, the Group received a cash injection of US$6 million and has
retained a large portion of the proceeds to date.
The Group plans to sell its wholly owned subsidiary Kun-Manie
and if sold, the Group will use the proceeds of sale to pay
dividends while maintaining sufficient funds to acquire another
project via an RTO. Should an RTO not be completed, the Company
will enter into suspension and after six months in suspension the
Company will be delisted. In anticipation of a sale, the board are
examining projects of interest as a part of its strategy.
The Board are continuing the assess suitable offers to purchase
Kun-Manie, however, should a sale not go forward, the Directors
have forecast a scenario where the Kun-Manie project is advanced,
and per the requirements to maintain the license, develop a mine
plan. The Board are confident that they have sufficient funds to
take the TEO forward and to produce a mine plan, and in a
worse-case scenario mitigating actions within the Directors'
control could be taken to reduce overheads if required. However,
substantial funds would need to be raised in order to fully support
preproduction and construction of the mine, outside of the going
concern period.
The biggest risk with taking the Kun-Manie project forward is
the Company's ability to still operate within Russia in light of
Russia's SMO and the sanctions put in place by the rest of the
world. To date, the Company has still been able to control its
subsidiary and operations, however, the Board understands that
further restrictions and sanctions could make operating and raising
sufficient capital from financial institutions in Russia difficult
or impossible.
Additionally, the Directors are confident that funding will be
raised when required, however they understand that their ability to
do this is not completely within in their control.
Under both scenarios outlined above the Directors are confident
that throughout the going concern forecast period the Group will
have sufficient funds to meet obligations as they fall due and thus
the Directors continue to prepare the financial statements on a
going concern basis.
c) Loss per share
Basic and diluted loss per share is calculated and set out
below. The effects of warrants and share options outstanding at the
year ends are anti-dilutive and the total of 64.3 million (2020:
90.1 million) of potential ordinary shares have therefore been
excluded from the following calculations:
Number of shares
Weighted average number of ordinary shares
used in the calculation of basic 2021 2020
earnings per share 1,379,872,315 1,071,175,000
2021 2020
Earnings US$'000 US$'000
Net loss for the year from continued operations
attributable to equity shareholders (1,790) (2,688)
------------- -------------
Loss per share for continuing operations
(expressed in cents)
Basic and diluted loss per share (0.13) (0.25)
2021 2020
Earnings US$'000 US$'000
Net profit for the year from discontinued 584
operations attributable to equity shareholders -
------- -------
Earnings per share for continuing operations
(expressed in cents)
Basic and diluted earnings per share (0.04) -
d) Events after the reporting date
On 28 January 2022, Plena Global Opportunities LLC elected to
convert 3,000,000 warrants, at the warrant exercise price of 1.43
pence per share providing the Company GBP42,900.
On 3 February 2022, Axis Capital Marketing, LTD elected to
convert 5,000,000 warrants, at the warrant exercise price of 2.12
pence per share providing the Company GBP106,000.
On 11 February 2022, Axis Capital Marketing, elected to convert
5,000,000 warrants, at the warrant exercise price of 2.12 pence per
share providing the Company GBP106,000.
On 23 February 2022, the Russian Federation began its 'special
military operation' in Ukraine triggering the implementation of a
series of sanctions with the Russian Federation subsequently
enacting a series of currency control measures.
On 9 May 2022, the Group received an offer to be approved by
shareholders at a General Meeting (scheduled for 25 May 2022) for
the sale of 100% of its interest in Irosta's wholly owned
subsidiary, AO Kun-Manie. For a total consideration of US$105
million, Stanmix Holding Limited will purchase AO KM and the
benefit of all amounts owed by AO KM to Amur under intra-group
loans.
On 25 May 2022, the shareholders declined to approve the 9 May
2022 Share Purchase Agreement.
On 7 June 2022, the Company issued an RNS stating the results of
the TEO Project by the State Committee on Reserves ("GKZ") which
had been compiled by mining experts Oreoll and the GKZ.
Annual Accounts
Copies of the Group's Annual Accounts will be posted to the Amur
shareholders today and are available for download from the
Company's website at www.amurminerals.com .
Notes to Editors
The information on exploration results and Mineral Resources
contained in this announcement has been reviewed and approved by
the CEO of Amur, Robin Young. Mr. Young is a Geological Engineer
(cum laude) and is a Qualified Professional Geologist, as defined
by the Toronto and Vancouver Stock Exchanges and a Qualified Person
for the purposes of the AIM Rules for Companies.
Glossary
DEFINITIONS OF EXPLORATION RESULTS, RESOURCES & RESERVES
EXTRACTED FROM THE JORC CODE: (December 2012) ( www.jorc.org
)
A 'Mineral Resource' is a concentration or occurrence of
material of intrinsic economic interest in or on the Earth's crust
in such form, quality and quantity that there are reasonable
prospects for eventual economic extraction. The location, quantity,
grade, geological characteristics and continuity of a Mineral
Resource are known, estimated or interpreted from specific
geological evidence and knowledge. Mineral Resources are
sub-divided, in order of increasing geological confidence, into
Inferred, Indicated and Measured categories.
An 'Inferred Mineral Resource' is that part of a Mineral
Resource for which tonnage, grade and mineral content can be
estimated with a low level of confidence. It is inferred from
geological evidence and assumed but not verified geological and/or
grade continuity. It is based on information gathered through
appropriate techniques from locations such as outcrops, trenches,
pits, workings and drill holes which may be limited or of uncertain
quality and reliability.
An 'Indicated Mineral Resource' is that part of a Mineral
Resource for which tonnage, densities, shape, physical
characteristics, grade and mineral content can be estimated with a
reasonable level of confidence. It is based on exploration,
sampling and testing information gathered through appropriate
techniques from locations such as outcrops, trenches, pits,
workings and drill holes. The locations are too widely or
inappropriately spaced to confirm geological and/or grade
continuity but are spaced closely enough for continuity to be
assumed.
A 'Measured Mineral Resource' is that part of a Mineral Resource
for which tonnage, densities, shape, physical characteristics,
grade and mineral content can be estimated with a high level of
confidence. It is based on detailed and reliable exploration,
sampling and testing information gathered through appropriate
techniques from locations such as outcrops, trenches, pits,
workings and drill holes. The locations are spaced closely enough
to confirm geological and/or grade continuity.
An 'Ore Reserve' is the economically mineable part of a Measured
and/or Indicated Mineral Resource. It includes diluting materials
and allowances for losses which may occur when the material is
mined. Appropriate assessments and studies have been carried out,
and include consideration of and modification by realistically
assumed mining, metallurgical, economic, marketing, legal,
environmental, social and governmental factors. These assessments
demonstrate at the time of reporting that extraction could
reasonably be justified. Ore Reserves are sub-divided in order of
increasing confidence into Probable Ore Reserves and Proved Ore
Reserves.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
FR FZGZVGLLGZZZ
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