TIDMCNG
China Nonferrous Gold Limited
('CNG' or the 'Company')
Interim Results for the Six-Month Period Ended 30 June 2022
China Nonferrous Gold Limited (AIM:CNG), the gold producer with
the operational Pakrut Gold Project ('the Pakrut Project') in the
Republic of Tajikistan, today announces its interim results for the
six-month period ended 30 June 2022.
The results below are available on the Company's website at
www.cnfgold.com.
Highlights
-- From January to June 2022, a total of 302,590 tons of ore was extracted
from the Pakrut gold mine; 274,453 tons of ore was processed at a grade
of 2.58 g/t; and 16,330 oz. gold ingots were poured.
-- From January to June 2022, the Group sold 16,484 oz. of gold ingots,
achieving sales revenue of US$30.71 million.
For further information please visit the Company's website
(www.cnfgold.com) or contact:
China Nonferrous Gold Limited
Zhang Hui, Managing Director
Tel: +86 10 8442 6662
WH Ireland Limited (NOMAD & Broker)
Katy Mitchell, Andrew de Andrade
Tel: +44 (0)207 220 1666
BlytheRay (PR)
Tim Blythe, Megan Ray
Tel: +44 (0)20 7138 3224
Project Summary
The Pakrut Gold Project, of which CNG has 100 per cent
ownership, is situated in Tajikistan approximately 120km northeast
of the capital city Dushanbe. Pakrut is located within the Tien
Shan gold belt, which extends from Uzbekistan into Tajikistan,
Kyrgyzstan and Western China, and which hosts a number of
multi-million ounce gold deposits.
CNG entered steady state production from January 2019.
About Tajikistan
Tajikistan is a secular republic located in Central Asia. The
country is a member of the Commonwealth of Independent States and
the Shanghai Cooperation Organization. Tajikistan hosts numerous
operating precious metal mines as well as the largest aluminum
smelter in Central Asia. CNG's management team has extensive
experience in the mining industry in Tajikistan.
CEO's Statement
As CEO of the board, it gives me great pleasure to present the
CEO's statement of the Interim Results for the Six-Month Period
Ended 30 June 2022. Despite the global pandemic, Pakrut took
pandemic prevention and protection measures, and continued
producing during the first half of the year, making the group an
important gold producer in Tajikistan.
From January to June 2022, a total of 302,590 tons of ore was
extracted from the Pakrut gold mine. During that same six month
period:
-- 274,453 tons of ore was processed;
-- the average grade of the raw ore was 2.58 g/t;
-- the recovery rate of processing was 92.08%;
-- 9,288.31 tons of concentrate was produced from the processing plant; and
-- 9,104.48 tons of concentrate was treated in the smelter (the
comprehensive recovery rate of smelting was 92.58%) and 16,330 oz. gold
ingots were poured.
From January to June 2022, the Group sold 16,484 oz. (30 June
2021:17,288 oz.) of gold ingots, achieving sales revenue of
US$30.71million (unaudited) (30 June 2021:$30.87million), with an
average sales price of US$1,863.02 / oz.(30 June 2021:$1,785.62 /
oz.)
Financial Results
The Company continued its production and operation work during
the first six months of 2022. Administration expenditure was
US$10,032,340 (30 June 2021: US$9,055,372). The largest increases
are bank fees and tax being mainly due to the increase of interest
expense and the increase of the Tajikistan imposed Resource Tax due
to the increase of ore grade from 91.01% to 92.08%. The operating
profit for the period under review was US$4,910,000 (30 June 2021:
US$4,848,000) and the loss before tax from the period was
US$946,000 (30 June 2021: US$644,000). Cash and cash equivalents at
the end of the period amounted to US$11,791,206 (30 June 2021:
US$2,140,259). As at 30 June 2022, the Group had net liabilities of
$31,304,559 (30 June 2021: net liabilities $21,518,316).
Given the limited production and cash balances the Group
continues to be reliant on support from its major shareholder,
CNMC, and its associates. In January 2022, the Group executed a
loan agreement with CNMC Trade Company Limited ("CNMC Trade") for a
loan of up to USD $34.55 million (the"CNMC Loan"). As announced in
January 2022, this CNMC Loan has been used to repay the existing
China CITIC Bank Corporation Limited ("CITIC") bank facilities of
USD $34.55m (being USD20m advanced in January 2021 ("First Loan")
and USD14.55m advanced in March 2021 ("Second Loan").
In addition, on 24 January 2022, the Group executed a foreign
currency working capital loan agreement with China CITIC Bank
Corporation Limited (Zhuhai Branch) ("CITIC") for a loan facility
of up to US$20 million (the "new CITIC Loan"), with an annual
interest at 3.00% over 6 month LIBOR, which was used to repay
US$20m of the CNMC Loan.
The Company currently has total debt facilities (including
banking facilities), before interest, of c.US$319 million.
Additional Tajik Tax
During August 2022, the Tajik Revenue Authority conducted a
routine tax inspection and concluded that the Tajik subsidiary
(Pakrut LLC) had generated a taxable profit of USD $4 million for
the financial year ended 31 December 2021 (this was higher than the
taxable profit originally recognized by the Company for its
subsidiary). Therefore, pursuant to Tajik tax regulations, an
associated tax charge of approximately 12% of the total net profit
was due. This was USD$500,000, which had not been previously
provided for by the Company. This has been provided for in these
interim financial statements.
Outlook
The Company remains confident in its ability to achieve the
internal production target of 700,000 tons of ore set at the
beginning of this year. This is considered an achievable
target.
The Company continues to seek to improve its production capacity
through technological innovation. Whilst improving production, the
Company is also focusing on perfecting and improving the smelting
process by reducing production costs, increasing recovery rates and
improving competitiveness.
Whilst the Company has taken big strides in the production and
operation of the Pakrut gold mine and achieved much, there are
still challenges to overcome and targets to meet, such as: further
high ore grade, improvement of internal controls and improved
warehouse management. And due to the insufficient capacity of the
flotation tailings pond, compared with the same period in 2021, the
progress of production tasks lags behind to a certain extent. In
the second half of the year, the production and engineering
construction organization are under great pressure and the task is
heavy, all of which we will look to address in the coming
months.
Uncertainty created by the COVID-19 pandemic with regards to
future production and operations still exists in Tajikistan, and
the long term effects are difficult to predict and estimate but
there does appear to be indications that the global community is
bringing the situation under control, and the epidemic situation in
Tajik is stabilizing. The Company will continue to monitor the
situation, conduct regular nucleic acid inspection for all staff to
ensure their health and make every effort to meet pandemic
prevention and control requirements, as well as stabilizing the
production and operation of Pakrut gold mine.
I would like to take this opportunity to thank all our
employees, management and advisers for their continued hard work in
2022. I would also like to extend my thanks to all our stakeholders
for their continued backing over the years. I very much look
forward to updating our shareholders further on the mine
developments, production levels, new strategy and direction.
Zhang Hui
CEO
29 September 2022
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHSED 30 JUNE 2022
Unaudited Unaudited Audited
Six months
Six months ended ended 30 June Year ended 31
30 June 2022 2021 December 2021
Note US$'000 US$'000 US$'000
Revenue 30,710 30,865 71,992
Cost of sales (15,469) (14,595) (37,256)
Gross profit 15,241 16,270 34,736
Other Operating
income 8 - -
Administrative
and other
expenses (10,032) (9,055) (19,879)
Loss on foreign
exchange (280) (143) (1,855)
Other operating
expenses (27) (2,224) (2,416)
Operating profit 4,910 4,848 10,585
Interest income - 6 6
Finance costs (5,856) (5,498) (10,826)
Loss before Tax (946) (644) (235)
Income tax (3,971) (731) (6,012)
Loss for the
period
attributable to
owners (4,917) (1,375) (6,247)
of the Company
Other
comprehensive
income - - -
Total
comprehensive
income for the
period
attributable to
owners of the
Company (4,917) (1,375) (6,247)
Earnings per
Share
Basic and diluted
(cents) 3 (1.29) (0.35) (1.63)
All of the activities of the Group are classified as
continuing.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2022
Unaudited Unaudited Audited
30 June 30 June 2021 31 December
2022US$'000 US$'000 2021US$'000
Non-Current Assets
Property, plant
and equipment 4359,111 368,036 364,337
Total Non-Current
Assets 359,111 368,036 364,337
Current Assets
Inventories 18,991 18,238 17,334
Trade and other
receivables 1,484 13,682 4,202
Cash and cash
equivalents 11,791 2,140 7,472
Total Current
Assets 32,266 34,060 29,008
Non-Current
Liabilities
Borrowings 5(65,000) (324,846) (65,000)
Provisions for
other liabilities
and charges (1,084) (995) (1,084)
Total Non-Current
Liabilities (66,084) (325,841) (66,084)
Current
Liabilities
Borrowings 5(307,739) (34,550) (303,953)
Trade and other
payables (48,859) (63,224) (49,696)
Total Current
Liabilities (356,598) (97,774) (353,649)
Total Liabilities (422,682) (423,615) (324,841)
Net Liabilities (31,305) (21,518) (26,388)
Capital And
Reserves
Share Capital 38 38 38
Share premium 65,901 65,901 65,901
Other reserves 10,175 10,175 10,175
Retained earnings (107,419) (97,632) (102,502)
Total Equity (31,305) (21,518) (26,388)
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHSED 30 JUNE 2022
Unaudited Unaudited Audited
Year ended31
Six months ended 30 Six months ended 30 Dec 2021
June 2022 US$'000 June 2021 US$'000 US$'000
Cash flows from
Operating
Activities
Loss before income
tax (946) (646) (235)
Adjustments for:
Finance income - 4 (6)
Finance cost 5,856 5,498 10,826
Depreciation 6,215 5,617 7,972
Foreign exchange 280 - 1,853
Impairment - - -
Change in working
capital:
Inventory (1,657) 2,327 (1,423)
Trade and other
receivables 592 1,431 (1,869)
Trade and other
payables (6,738) (7,055) 3,222
Other current assets 3,312 (12) (549)
Other current
liabilities 1,353 - (5,890)
Tax paid
Net cash flows from
Operating
Activities 8,267 7,164 13,904
Cash flows from
Investing
Activities
Purchase of
property, plant and
equipment (1,336) (421) (994)
Payments for mining
rights and
construction in
progress - - -
Disposal of PPE - - -
Interest received - 4 6
Net cash used in
Investing
Activities (1,336) (417) (989)
Cash flows from
Financing
Activities
Proceeds from
borrowings 54,550 99,550 99,550
Repayment of
borrowings (56,538) (130,095) (128,806)
Interest paid (624) (1,258) (3,384)
Net Cash (used
in)/from Financing
Activities (2,612) (31,803) (32,640)
Net
(Decrease)/Increase
in Cash and Cash (4,319) (25,056) (19,724)
Equivalents
Cash and cash
equivalents at
beginning of the
period 7,472 27,196 27,196
Cash and cash
equivalents at end
of the period 11,791 2,140 7,472
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHSED 30 JUNE 2022
Share Share Other Retained Total
capital premium reserve earnings equity
US$'000 US$'000 US$'000 US$'000 US$'000
Balance at 1 January 2021 38 65,901 10,175 (96,257) (20,143)
Loss and total comprehensive
income for the period - - - (1,375) (1,375)
Balance at 30 June 2021 38 65,901 10,175 (97,632) (21,518)
Loss and total comprehensive
income for - - - (4,870) (4,870)
the period
Balance at 31 December 2021
(audited) 38 65,901 10,175 (102,502) (26,388)
Balance at 1 January 2022 38 65,901 10,175 (102,502) (26,388)
Loss and total comprehensive
income for the period - - - (4,917) (4,917)
Balance at 30 June 2022
(unaudited) 38 65,901 10,175 (107,419) (31,305)
NOTES TO THE INTERIM FINANCIAL STATEMENTS
FOR THE SIX MONTHSED 30 JUNE 2022
1. Accounting Policies
i) Basis of preparation
China Nonferrous Gold Limited (the "Company") is a company
registered in the Cayman Islands. The condensed consolidated
interim financial statements of the Company for the six months
ended 30 June 2022 comprise the result of the Company and its
subsidiaries (together referred to as the "Group") and have been
prepared in accordance with the AIM Rules for Companies. As
permitted, the Company has chosen not to adopt IAS 34 "Interim
Financial Statement" in preparing these interim financial
statements.
The consolidated interim financial information for the period 1
January 2022 to 30 June 2022 is unaudited and has not been reviewed
in accordance with International Standard on Review Engagements
2410 issued by the Auditing Practices Board. In the opinion of the
Directors the condensed interim financial information for the
period presents fairly the financial position, and results from
operations and cash flows for the period in conformity with the
generally accepted accounting principles consistently applied.
The condensed interim financial information incorporates
unaudited comparative figures for the interim period 1 January 2021
to 30 June 2021 and extracts from the audited financial statements
for the year to 31 December 2021. A copy of the accounts for that
year has been delivered to members. The auditor's report on those
financial statements was unqualified. The financial information
contained in this interim report does not constitute statutory
accounts.
The interim report has not been audited or reviewed by the
Company's auditor. The key risks and uncertainties and critical
accountancy estimates remain unchanged from 31 December 2021 and
the accounting policies adopted are consistent with those used in
the preparation of its financial statements for the year ended 31
December 2021.
ii) Cyclicality
The interim results for the six months ended 30 June 2022 are
not necessarily indicative of the results to be expected for the
financial year 2022. The operations of China Nonferrous Gold
Limited may be subject to seasonal variations depending on the
severity of snowfall levels at the mine site. The superposition of
external unstable factors will affect the increasing operating
pressure in the second half of the year. All units and departments
of the company must have a clear understanding, take effective
measures, make efforts from the aspects of safety and environmental
protection, production organization, cost reduction and efficiency
improvement, and strive to improve the basic management level to
ensure the smooth operation of the safety and environmental
protection situation and the smooth completion of the annual
production and operation tasks.
2. Going Concern
The Interim Financial Statements have been prepared assuming the
Company will continue as a going concern. Under the going concern
assumption, an entity is ordinarily viewed as continuing in
business for the foreseeable future with neither the intention nor
the necessity of liquidation, ceasing trading or seeking protection
from creditors pursuant to laws and regulations.
In assessing whether the going concern assumption is
appropriate, the Directors take into account all available
information for the foreseeable future, in particular for the
twelve months from the date of approval of the Interim Financial
Statements. This information includes:
-- Management prepared cash flow projections;
-- Estimations as to when full production will commence and first revenues
will be generated and associated cash flows will occur;
-- The ability to complete the mine site work within the stated time frame
and budget;
-- Sources of funding from external sources;
-- Settle financial obligations as they fall due;
-- The continued financial support of the considered controlling party; and
-- The ability of management to renegotiate current financing arrangements
as was achieved in June 2021 in respect of the loan with China Nonferrous
Metals International Mining Co. Ltd.
As at the date of approval of these interim statements, and
based upon consideration of the above, the Directors are satisfied
that the Group has sufficient cash and loan facilities to finance
the Group's operating expenses and any further development and
construction of the Pakrut Gold Project that is required. The
Directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence and thus they
continue to adopt the going concern basis of accounting in
preparing the interim results.
3. Earnings per Share
June 2022 June 2021 December 2021
Basic and diluted earnings per (1.29)
share(cents) (0.35) (1.63)
The basic earnings per share is calculated by dividing the loss
attributable to equity holders after tax of US$4,917,101 (30 June
2021: US$1,375,921) by the weighted average number of shares in
issue and carrying the right to receive dividend. For all the
periods disclosed up to 2022, the total number of shares remains
unchanged being 382,392,292 shares.
4. Property, Plant and Equipment
Office
furniture
and Motor Plant and Producing Assets under
Land equipment vehicles machinery Mines construction Total
US$000 US$000 US$000 US$000 US$000 US$000 US$000
Cost
At 1 January
2021 33 693 8,698 23,277 378,425 - 411,125
Additions - - 190 805 - - 994
Disposals - (90) (3,465) (2,639) - - (6,193)
Settlement
of
historical
liabilities - - - 4,307 - 4,307
At 31
December
2021 33 602 5,423 21,443 382,732 - 410,233
Additions - 13 - 486 - 492 991
Transfers - - - - - -
Disposals - - - - - - -
-
At 30 June
2022 33 615 5,423 21,929 382,732 492 411,224
Accumulated Depreciation
At 1 January 2021 - 354 6,641 14,056 16,873 - 37,924
Charge for the period - - 319 2,521 9,026 - 11,866
Disposals - (90) (2,112) (1,690) - - (3,892)
At 31 December 2021 - 264 4,847 14,888 25,899 - 45,898
Charge for the period 15 78 1,167 4,955 - 6,215
Disposals - - - - - - -
At 30 June 2022 - 279 4,926 16,054 30,854 - 52,113
Net Book Value
At 30 June 2022 32 336 497 5,876 351,878 492 359,111
At 31 December 2021 32 341 575 6,555 356,833 - 364,377
Depreciation for producing mines is calculated based on the unit
of production method amounting to $4,955,000 of depreciation charge
for the 6 month period.
5. Borrowings
June 2022 June 2021 December 2021
US$000 US$000 US$000
Bank borrowings 85,000 99,550 99,550
Other loans 287,740 259,846 269,403
Less: unamortised borrowing costs - - -
Total 372,740 359,396 368,953
Non-current portion 65,000 324,846 65,000
Current portion 307,740 34,550 303,953
The fair value of borrowings equals their carrying amounts, as
the impact of discounting is not significant.
In January 2022 the Group executed a loan agreement with CNMC
Trade Company Limited ("CNMC Trade") for a loan of up to USD $34.55
million (the "CNMC Loan"). This CNMC Loan has been used to repay
the existing China CITIC Bank Corporation Limited ("CITIC") bank
facilities of USD $34.55m (being USD20m advanced in January 2021
("First Loan") and USD14.55m advanced in March 2021 ("Second
Loan").
In January 2022, the Group executed a foreign currency working
capital loan agreement with China CITIC Bank Corporation Limited
(Zhuhai Branch) ("CITIC") for a loan facility of up to US$20
million (the "new CITIC Loan"), which was used to repay US$20m of
the CNMC Loan.
Of the total borrowings $372,740,000 (including finance costs),
$85,000,000 were provided by banks (including $65,000,000 by Bank
of Shanghai and $20,000,000 by China CITIC Bank), and the rest were
provided by related parties.
View source version on businesswire.com:
https://www.businesswire.com/news/home/20220930005251/en/
CONTACT:
China Nonferrous Gold Limited
SOURCE: China Nonferrous Gold Limited
Copyright Business Wire 2022
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