TIDMKRS
RNS Number : 8976A
Keras Resources PLC
28 September 2022
Keras Resources plc ('Keras' or the 'Company')
Interim Results
Keras Resources plc (AIM: KRS) announces its half year results
for the six months ending 30 June 2022.
Overview
-- Substantial progress has been made towards building our
business into a cash-generative producer of high-grade premium
organic fertiliser in the North American market
-- Increased ownership of the Diamond Creek phosphate mine,
Utah, US to 100% - now in full control of mine to market
activities
-- All permits and authorisation approvals renewed in line with
the project's licence obligations at Diamond Creek - in the process
of expanding permitted mining footprint
-- Record sales in August 2022 of 700t (40% in excess of budget)
and repeat forward orders resulted in extended mining campaign to
produce additional tonnage
-- Sales guidance of between 7,500 tons and 8,000 tons of
phosphate product forecast from September 2022 to June 2023 at an
all-in sustaining cost (AISC) margin of between $80 and $100 per
ton
-- Targeting 25,000 tons per annum of phosphate product as our
medium-term annual sales objective into a market which is expected
to grow at 8% per annum in tonnage terms as well as 14% in value
terms
-- As a result of the extended mining season, drilling programme
to further define the ore reserve at Diamond Creek will now
commence in spring 2023
-- Successful placing of GBP1.95m (before expenses) raised at a
premium supported by cornerstone investor First Uranium Resources
Ltd
-- Board changes implemented
o Graham Stacey appointed as CEO in June, with Russell Lamming
moving to Non-Executive Chairman and Brian Moritz moving to
Non-Executive Director
o Claire Parry joining as Independent Non-Executive Director
with Dave Reeves stepping down
-- Continued focus for 2022 and beyond is increasing the
Company's market share in the North American organic fertiliser
market and building Diamond Creek into the premier organic
phosphate producer in the US
Graham Stacey, Keras Resources Chief Executive Officer,
commented, " Our vision remains to build Diamond Creek into the
premier organic phosphate producer in the US and we have made real
progress over the past few months having acquired 100% in the
business and focussing our efforts on resetting the business,
starting to ramp up sales and timing production from our mine and
milling facilities to meet our sales targets. We produce a
high-grade, premium phosphate product that supports soil health,
regenerative agriculture and provides investors with direct
exposure to the buoyant global fertiliser industry. We believe we
are ideally positioned to capitalise on the robust fundamentals of
the sector and look forward to further building on the foundations
we have laid to date, producing both a valuable and essential
commodity whilst generating returns for our stakeholders."
The information contained within this Announcement is deemed by
the Company to constitute inside information as stipulated under
Article 7 of the Market Abuse Regulation (EU) No. 596/2014 (as
amended) as it forms part of the domestic law of the United Kingdom
by virtue of the European Union (Withdrawal) Act 2018 (as amended).
Upon the publication of this Announcement via the Regulatory
Information Service, this inside information is now considered to
be in the public domain.
Graham Stacey Keras Resources plc annabel @kerasplc.com
Annabel Redford
Ewan Leggat / Charlie Bouverat +44 (0) 20 3470
Nominated Adviser & Joint SP Angel Corporate 0470
Broker Finance LLP
Joint Broker +44 (0) 207 186
Damon Heath / Erik Woolgar Shard Capital Partners 9900
LLP
Financial and Corporate
Communications +44 (0) 774 884
Felicity Winkles Celicourt 3871
Chairman's Statement
This is my first statement since becoming Non-Executive Chairman
on 1 September 2022 and it is a pleasure to provide an update on
the Company's activities over the past six months during what has
been a transformational period for the Company. The acquisition of
the outstanding 49% of Falcon Isle Resources ("Falcon Isle"), which
owns the Diamond Creek high-grade premium organic phosphate mine
("Diamond Creek") has now placed Keras in full control of the
operation which markets organic fertilisers with the highest
available phosphate (P(2) O(5) ) in the US. The mine itself is
situated high in the Wasatch mountains, 20 miles from the milling
plant in Spanish Fork which provides convenient access to locally
available contracting services, consumables, technical and
financial service providers and easy access to distribution
links.
Since taking control of the operation substantial progress has
been made towards building our business into a cash-generative
producer of high-grade premium organic fertiliser for the US market
and establishing a strategic position in this fast-growing sector.
The Spanish Fork processing plant is now back in production, two
mining campaigns have been undertaken at the Diamond Creek mine and
repeat customers are now beginning to make longer-term offtake
commitments. We are now focussing on Falcon Isle's marketing
efforts, which were previously the responsibility of our partner,
and ensuring we continue to build our position in the US organic
phosphate to fertiliser industry.
The Utah Department of Oil, Gas & Mining (UDOGM) and US
Forest Service (USFS) carried out a routine inspection and site
visit during April 2022 and all permits and authorisation approvals
were renewed in line with the project's licence obligations . We
are currently in the process of expanding our permitted mining
footprint in line with new regulations. Two phases of summer mining
have been completed as planned, a second phase as a required result
of increased sales demand to ensure ample product availability for
the 2022-2023 spring sales season. We are targeting 25,000 tons per
annum as our medium-term annual sales objective into a market which
is expected to grow at 8% per annum in tonnage terms as well as 14%
in value terms. As an owner operator of our processing plant we are
able to tailor our product mix to customer requirements which, in
addition to product quality, gives us an important competitive
advantage in the region. As a result of the extended mining season,
our drilling programme which we will undertake to further define
the ore reserve at Diamond Creek will now commence in spring next
year. The Board continues to review and evaluate all areas of the
business to look to further optimise efficiencies and create
economies of scale.
We have previously reported on the delivery and commencement of
construction of a granulator plant during the second half of 2021,
this construction was paused as announced in November 2021 while
the acquisition of the outstanding 49% in the business was
negotiated and completed during March 2022, this pause gave us the
opportunity to evaluate value-enhancing opportunities such as the
incorporation of supplementary feed circuits to produce custom
blended organic products including Nitrogen and Potassium feedstock
to potentially supplement the phosphate-only granulates we'd
previously planned. Decisions on the final configuration of the
plant will be made during the coming months and construction will
re-commence thereafter.
Marketing and Market Fundamentals
Sales has been a key focus for us as we are looking to continue
to build market share for our products under the PhosAgri brand.
Core to our marketing is highlighting the value that our premium
>12% available P(2) O(5) products can offer from a value-in-use
basis along with the benefits of its high calcium content.
Importantly we are also getting a deeper understanding of our
client requirements and adapting our product mix to suit the
cyclical seasonal agriculture business which will be key to
increasing our market share in the dynamic North American organic
fertiliser market. We have the flexibility within our operational
set up to be able to adapt accordingly which will be an important
aspect of ongoing discussions across our existing and prospective
new customer bases.
We are delighted with a 40% increase in sales for August 2022 to
700t against our 500t forecast, as well as repeat forward orders
off the back of which we have set out sales guidance of between
7,500 tons and 8,000 tons of phosphate product forecast from 1
September 2022 to June 2023 at an all-in sustaining cost (AISC)
margin of between $80 and $100 per ton. Importantly, whilst we
offer an organic product, we are not limited to the organic market
as PhosAgri can be used as a blend, so widening our audience in
this regard will enables us to investigate retail potential and
further downstream avenues.
All of this ties into the market backdrop and we are excited by
the significant opportunity offered to us by the North American
fertiliser industry which research forecasts to grow at 8% per
annum on a consolidated annual growth rate (CAGR) in volume terms,
and more importantly 14% on a value basis which suggest a material
disjoint between demand and supply growth. Synthetic fertiliser
pricing has seen a 60% increase year on year which, albeit due to
geopolitical pressure on the supply of fertiliser inputs, is
forecast to continue which will both support pricing for organic
fertilisers but also growers' substitution of synthetic fertilisers
with organic substitutes. Demand is also underpinned by key
long-term drivers, including security of supply, environmental
factors, the ongoing education and awareness around soil health, as
well as the increasing demand for organic food - all of which our
PhosAgri products support, and particularly with our location close
to the Central California Valley.
Carbon Market
As previously outlined, we are also looking to leverage our low
carbon footprint relative to synthetic fertiliser producers and the
net carbon sequestration that provides. This presents a revenue
augmentation opportunity through the generation and trading of
carbon credits. We are exploring this through partnering with
growers and verification agencies to create and trade carbon
credits and develop offset programmes. This would not deviate from
our current business model but complement and augment our revenue
model. Whilst early stage we are actively pursuing this avenue and
will provide further updates as this project matures.
Togo
As reported previously, on the 18(th) October 2019 the Council
of Ministers of the Republic of Togo published a decree granting
the right for large-scale exploitation of the manganese deposit at
Nayéga to the Company's subsidiary, Société Générale des Mines
("SGM"). Since that date the Company has concentrated its efforts
on obtaining the required Exploitation Permit. The terms of the
permit and associated protocols have been agreed, and SGM has been
converted from a private to a public company, as required by law
and in compliance with the draft Mining Convention. However, the
exploitation permit approval has not been forthcoming. We continue
to negotiate in good faith with the authorities in Togo to achieve
a satisfactory outcome and will update the market in due course on
developments.
Financial review
During the period we successfully completed a GBP1.95m (before
expenses) capital raise. This was supported by the Directors and
also saw First Uranium Resources Ltd come in as a cornerstone
investor now owning 10% of Keras. Subsequently associates of First
Uranium have acquired an additional 7% of Keras in the market. They
share our view that the North American phosphate market will be a
key growth market and we are very pleased to have them on board as
a supportive shareholder. Since taking control of the operation in
March 2022 Keras management has now progressed Falcon Isle into a
cashflow positive entity. Although our reserves are low we do not
believe that we will need to come back to the market for funding
for our current development plan.
The results for the 6 months ended 30 June 2022 show a loss of
GBP467,000. The incurred loss is partly driven by substantial legal
costs incurred in connection with the dispute with our former
partner in Falcon Isle, the dispute also resulted in the temporary
shutdown of our processing plant in Utah, with a corresponding
reduction in sales.
Board Changes
We have made significant Board changes effective 1 September
2022. With Graham Stacey taking on the CEO role and in the process
of relocating to the US we will have key management based on site
and he will continue to build the team around him. I would like to
reiterate my thanks to Dave Reeves for all his significant
contributions to Keras during his tenure on the Board and as a
significant shareholder, and Brian Moritz for his excellent
stewardship of Keras as Chairman since listing in 2011. It was also
a pleasure to welcome Claire Parry as Independent Non-Executive
Director at the beginning of September 2022. She has previously
advised Keras on accounting matters and she brings further
financial and independent counsel to the Board. I look forward to
working alongside Claire, Graham and Brian who remains as Company
Secretary and a valued Non-Executive Director.
Outlook
As we outlined in our previous results, the Exploitation Permit
for the Nayéga mine remains pending but we continue to engage with
the Togolese authorities to seek a satisfactory outcome. We will
announce further updates in due course. Our main thrust in the near
term remains to progress our phosphate to fertiliser business,
underlined by our recent rebrand of the Company and our updated
website. W e are mining an essential resource that can create
value, be part of the greener economy and contribute to a more
sustainable future. As a mining company we remain ever conscious of
our obligations and commitments in line with best environmental,
social and governance ("ESG") practice and will continue to take
the initiative within this area.
I would like to thank our shareholders for their ongoing
support. We are excited about what the future holds for Keras, both
at Diamond Creek as an organic phosphate producer and as we broaden
our remit into the carbon market. We will also pursue new
opportunities should they fit within our strategy and be value
generating for the business. We have set out our plans and goals as
outlined, ramping up operations whilst rationalising costs,
widening our customer base and accessing new markets, all with
responsible mining at the centre of what we do. We are looking to
develop and sustain a positive legacy whilst creating value for all
stakeholders and I look forward to our progress in delivering this
as we continue to build Keras and Diamond Creek into the premier
organic phosphate producer in the US.
Russell Lamming
Chairman
27 September 2022
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHSED 30 JUNE 2022
6 months to 30-Jun-22 6 months to 6 months to 30-Sep-21 15 months to 31-Dec-21
(unaudited) 31-Mar-21 (unaudited) (audited)
GBP'000 (unaudited) GBP'000 GBP'000
GBP'000
Continuing
operations
Revenue 212 31 311 452
Cost of
production (104) (74) (229) (496)
----------------------- -------------- ----------------------- ------------------------
Gross
profit/loss 108 (43) 82 (44)
Administrative
and exploration
expenses (550) (517) (426) (1,448)
----------------------- -------------- ----------------------- ------------------------
Loss from
operating
activities (442) (560) (344) (1,492)
Finance income - - - -
Finance costs (25) - (1) (43)
Net finance
costs (25) - (1) (43)
Share of net
loss of
associate
accounted for
using the
equity method - - - (116)
Loss on change
of ownership - - - (363)
----------------------- -------------- ----------------------- ------------------------
Loss before
taxation (467) (560) (345) (2,014)
Taxation - - - -
----------------------- -------------- ----------------------- ------------------------
Loss for the
period (467) (560) (345) (2,014)
----------------------- -------------- ----------------------- ------------------------
Other
comprehensive
income - items
that may be
subsequently
reclassified to
profit or loss
Exchange
translation on
foreign
operations 53 (47) 108 66
Total
comprehensive
(loss) for the
period (414) (607) (237) (1,948)
======================= ============== =======================
(Loss)/profit
attributable to:
Owners of the
Company (470) (497) (382) (1,729)
Non-controlling
interests 3 (63) 37 (285)
----------------------- -------------- ----------------------- ------------------------
(Loss)/profit
for the period (467) (560) (345) (2,014)
======================= ============== ======================= ========================
Total
comprehensive
income/(loss)
attributable to:
Owners of the
Company (414) (556) (268) (1,670)
Non-controlling
interests - (51) 31 (278)
----------------------- -------------- ----------------------- ------------------------
Total
comprehensive
loss for the
period (414) (607) (237) (1,948)
======================= ============== ======================= ========================
Earnings per
share -
continuing
operations
Basic and
diluted
(loss)/earnings
per share
(pence) (0.015) (0.017) (0.006) (0.033)
======================= ============== ======================= ========================
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2022
30-Jun-22 31-Mar-21 30-Sep-21 31-Dec-21
(unaudited) (unaudited) (unaudited) (audited)
Notes GBP'000 GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Intangible assets 7 4,875 3,637 4,282 4,606
Property, plant and
equipment 8 591 493 691 554
Right of use asset 9 185 - - 215
--------------
5,651 4,130 4,973 5,375
-------------- -------------- -------------- ------------
Current assets
Inventory 10 484 135 245 273
Trade and other receivables 11 115 391 243 94
Cash and cash equivalents 440 886 299 166
-------------- -------------- -------------- ------------
1,039 1,412 787 533
-------------- -------------- -------------- ------------
Total assets 6,690 5,542 5,760 5,908
============== ============== ============== ============
Equity
Equity attributable to
owners of the Company
Share capital 12 798 629 629 630
Share premium 12 5,838 4,027 4,027 4,033
Other reserves 173 68 95 111
Retained deficit (2,885) (590) (878) (1,721)
-------------- -------------- -------------- ------------
3,924 4,134 3,873 3,053
Non-controlling interests (133) 934 965 229
-------------- -------------- -------------- ------------
Total equity 3,791 5,068 4,838 3,282
-------------- -------------- -------------- ------------
Liabilities
Current liabilities
Trade and other payables 13 1,423 474 922 1,658
Lease liabilities - current 9 120 - - 107
--------------
1,543 474 922 1,765
-------------- -------------- -------------- ------------
Non-current liabilities
Trade and other payables 13 1,293 - - 749
Lease liabilities -
non-current 9 63 - - 112
-------------- -------------- -------------- ------------
1,356 - - 861
-------------- -------------- -------------- ------------
Total liabilities 2,899 474 922 2,626
-------------- -------------- -------------- ------------
Total equity and liabilities 6,690 5,542 5,760 5,908
============== ============== ============== ============
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHSING 31 MARCH 2021
Total attributable
to owners of the Company
Share Retained Total Non-controlling
option/ Financial earnings/ GBP'000 interests
Share Share warrant Exchange assets (deficit) GBP'000 Total
capital premium reserve reserve at GBP'000 equity
GBP'000 GBP'000 GBP'000 GBP'000 FVOCI GBP'000
GBP'000
Balance at
1 October
2020 (audited) 487 2,637 63 (47) - 8 3,148 (140) 3,008
Loss for
the period - - - - - (497) (497) (63) (560)
Other
comprehensive
income - - - 42 - (101) (59) 12 (47)
--------- --------- -------- ---------- ----------- ---------- --------- ---------------- ---------
Total
comprehensive
loss for
the period - - 42 - (598) (556) (51) (607)
Issue of
ordinary
shares 142 1,463 - - - - 1,605 - 1,605
Issue costs - (73) - - - - (73) - (73)
Non-controlling
interest
on acquisition
of subsidiary - - - - - - - 1,125 1,125
Share based
payment
transactions - - 10 - - - 10 - 10
142 1,390 10 - - - 1,542 1,125 2,667
Balance
at 31 March
2021
(unaudited) 629 4,027 73 (5) - (590) 4,134 934 5,068
========= ========= ======== ========== =========== ========== ========= ================ =========
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHSED 30 SEPTEMBER 2021
Total attributable to owners of the Company
Share
option/ Retained Non-controlling
Share Share warrant Exchange Financial earnings/ interests Total
capital premium reserve reserve assets at (deficit) Total GBP'000 equity
GBP'000 GBP'000 GBP'000 GBP'000 FVOCI GBP'000 GBP'000 GBP'000
GBP'000
Balance at 1
April 2021
(unaudited) 629 4,027 73 (5) - (590) 4,134 934 5,068
Loss for the
period - - - - - (382) (382) 37 (345)
Other
comprehensive
income - - - 20 - 94 114 (6) 108
--------- --------- --------- ---------- ----------- ----------- ---------- ---------
Total
comprehensive
loss for the
period - - 20 - (288) (268) 31 (237)
Issue of - - - - - - - - -
ordinary shares
Issue costs - - - - - - - - -
Non-controlling -
interest on - - - - - - - -
acquisition of
subsidiary
Share based
payment
transactions - - 7 - - - 7 - 7
- - 7 - - - 7 - 7
Balance at 30
September 2021
(unaudited) 629 4,027 80 15 - (878) 3,873 965 4,838
========= ========= ========= ========== =========== =========== ========== ================= =========
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE THREE MONTHSED 31 DECEMBER 2021
Total attributable to owners of the Company
Share
option/ Financial Retained Non-controlling
Share Share warrant Exchange assets at Earnings/ interests Total
capital premium reserve reserve FVOCI (deficit) Total GBP'000 equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1
October 2021
(unaudited) 629 4,027 80 15 - (878) 3,873 965 4,838
Loss for the
period - - - - - (850) (850) (259) (1,109)
Other
comprehensive
income - - - (4) - 7 3 2 5
--------- --------- -------- ---------- ----------- ----------- ---------- ----------------- ---------
Total
comprehensive
income for the
period - - - (4) - (843) (847) (257) (1,104)
Issue of
ordinary shares 1 6 - - - - 7 - 7
Issue costs - - - - - - - - -
Non-controlling
interest on
acquisition of
subsidiary - - - - - - - (479) (479)
Share based
payment
transactions - - 20 - - - 20 - 20
1 6 20 - - - 27 (479) (452)
Balance at 31
December 2021
(audited) 630 4,033 100 11 - (1,721) 3,053 229 3,282
========= ========= ======== ========== =========== =========== ========== ================= =========
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHSED 30 JUNE 2022
Total attributable to owners of the Company
Share
option/ Financial Non-controlling
Share Share warrant Exchange assets at Retained interests Total
capital premium reserve reserve FVOCI earnings Total GBP'000 equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1
January 2022
(audited) 630 4,033 100 11 - (1,721) 3,053 229 3,282
Loss for the
period - - - - - (470) (470) 3 (467)
Total other
comprehensive
income - - - 56 - - 56 (3) 53
--------- --------- --------- ---------- ----------- ---------- ---------- ----------------- ----------
Total
comprehensive
loss for the
period - - - 56 - (470) (414) - (414)
Issue of
ordinary
shares 168 1,845 - - - - 2,013 - 2,013
Issue costs - (40) - - - - (40) - (40)
Acquisition of
NCI without a
change in
control (note
15) - - - - - (694) (694) (362) (1,056)
Share based
payment
transactions - - 6 - - - 6 6
168 1,805 6 - - (694) 1,285 (362) 923
Balance at 30
June 2022
(unaudited) 798 5,838 106 67 - (2,885) 3,924 (133) 3,791
========= ========= ========= ========== =========== ========== ========== ================= ==========
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHSED 30 JUNE 2022
31-Jun-22 31-Mar-21 30-Sep-21 31 -Dec-21
(unaudited) (unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP' 000 GBP'000
Cash flows from operating activities
Loss from operating activities (467) (560) (345) (2,014)
Adjustments for:
Depreciation and
amortisation 99 18 17 172
Share of loss of equity
accounted associate - 71 116
Loss on disposal of property, plant and - - - -
equipment
Foreign exchange differences (356) 117 124 73
Equity-settled share-based payment
transactions 6 10 7 37
-------------- -------------- -------------- ------------
(718) (344) (197) (1,616)
Changes in:
- inventories (211) 7 (110) (216)
- trade and other
receivables (21) (186) 148 111
- trade and other payables (747) 45 448 540
-------------- -------------- -------------- ------------
Cash used in operating
activities (1,697) (478) 289 (1,181)
Finance costs - - - -
--------------
Net cash used in operating
activities (1,697) (478) 289 (1,181)
-------------- -------------- -------------- ------------
Cash flows from investing
activities
Cash acquired on acquisition - 158 - 158
Acquisition of property, plant and
equipment - (93) (209) (188)
Exploration and licence expenditure (2) (161) (667) (538)
Investment in associate to date of - (455) - -
control
--------------
Net cash used in investing activities (2) (551) (876) (568)
-------------- -------------- -------------- ------------
Cash flows from financing
activities
Net proceeds from issue of
share capital 1,973 1,477 - 1,477
Loans (to)/repaid by - - - -
subsidiaries
--------------
Net cash flows from
financing activities 1,973 1,477 - 1,477
-------------- -------------- -------------- ------------
Net (decrease)/increase in cash and cash
equivalents 274 448 (587) (272)
Cash and cash equivalents at beginning
of period 166 438 886 438
Effect of foreign exchange - - -
rate changes
-------------- -------------- -------------- ------------
Cash and cash equivalents at end of
period 440 886 299 166
-------------- ============== ============== ============
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
FOR THE SIX MONTHSED 30 JUNE 2022
1. Reporting entity
Keras Resources plc (the "Company") is a company domiciled in
England and Wales. The unaudited condensed consolidated interim
financial statements of the Company as at and for the six months
ended 30 June 2022 comprise the Company and its subsidiaries
(together referred to as the "Group") and the Group's interests in
associates and jointly controlled entities. The Group currently
operates as an explorer and developer.
2. Basis of preparation
(a) Statement of compliance
This condensed consolidated interim financial report has been
prepared in accordance with IAS 34 Interim Financial Reporting.
Selected explanatory notes are included to explain events and
transactions that are significant to an understanding of the
changes in financial performance and position of the Group since
the last consolidated financial statements as at and for the period
ended 31 December 2021. This condensed consolidated interim
financial report does not include all the information required for
full annual financial statements prepared in accordance with
International Financial Reporting Standards.
This condensed consolidated interim financial report was
approved by the Board of Directors on 27 September 2022.
(b) Judgements and estimates
Preparing the interim financial report requires Management to
make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of
assets and liabilities, income and expense. Actual results may
differ from these estimates.
In preparing this condensed consolidated interim financial
report, significant judgements made by Management in applying the
Group's accounting policies and key sources of estimation
uncertainty were the same as those that applied to the audited
consolidated financial statements as at and for the period ended 31
December 2021.
3. Significant accounting policies
The accounting policies applied by the Group in this condensed
consolidated interim financial report are the same as those applied
by the Group in its audited consolidated financial statements as at
and for the period ended 31 December 2021.
4. Financial instruments
Financial risk management
The Group's financial risk management objectives and policies
are consistent with those disclosed in the audited consolidated
financial statements as at and for the period ended 31 December
2021.
5. Segment information
The Group considers that it operates in two distinct business
areas, manganese mining in West Africa and phosphate mining in
Utah, USA. These business areas form the basis of the Group's
operating segments. For each segment, the Group's CEO (the chief
operating decision maker) reviews internal management reports on at
least a quarterly basis.
Other operations relate to the group's administrative functions
conducted at its head office and by its intermediate holding
company together with consolidation adjustments.
Information regarding the results of each reportable segment is
included below. Performance is measured based on segment profit
before tax, as included in the internal management reports that are
reviewed by the Group's CEO. Segment results are used to measure
performance as Management believes such information is the most
relevant in evaluating the performance of certain segments relative
to other entities that operate within the exploration industry.
Information about reportable segments
For the six months ended 30 June 2022 (unaudited)
Other
Manganese Phosphate operations Total
GBP'000 GBP'000 GBP'000 GBP'000
External revenue - 212 - 212
============ ============ ============ ==========
Profit/(loss) before
tax 22 9 (498) (467)
============ ============ ============ ==========
Segment assets 1,228 4,744 718 6,690
============ ============ ============ ==========
For the six months ended 31 March 2021 (unaudited)
Other
Manganese Phosphate operations Total
GBP'000 GBP'000 GBP'000 GBP'000
External revenue - 31 - 31
============ ============ ============ ==========
Loss before tax (60) (110) (390) (560)
============ ============ ============ ==========
Segment assets 1,082 2,958 1,502 5,542
============ ============ ============ ==========
For the six months ended 30 September 2021 (unaudited)
Other
Manganese Phosphate operations Total
GBP'000 GBP'000 GBP'000 GBP'000
External revenue - 311 - 311
============ ============ ============ ==========
Profit/(loss) before
tax (52) 20 (313) (345)
============ ============ ============ ==========
Segment assets 1,076 4,036 648 5,760
============ ============ ============ ==========
For the three months ended 31 December 2021 (audited)
Other
Manganese Phosphate operations Total
GBP'000 GBP'000 GBP'000 GBP'000
External revenue - 109 - 109
============ ============ ============ ==========
Profit/(loss) before
tax 52 (479) (682) (1,109)
============ ============ ============ ==========
Segment assets 1,535 4,229 144 5,908
============ ============ ============ ==========
Information about geographical segments:
For the six months ended 30 June 2022 (unaudited)
Other
West Africa US operations Total
GBP'000 GBP'000 GBP'000 GBP'000
External revenue - 212 - 212
============== ========== ============ ==========
Profit/(loss) before
tax 22 9 (498) (467)
============== ========== ============ ==========
Segment assets 1,228 4,744 718 6,690
============== ========== ============ ==========
For the six months ended 31 March 2021 (unaudited)
Other
West Africa US operations Total
GBP'000 GBP'000 GBP'000 GBP'000
External revenue - 31 - 31
============== ========== ============ ==========
Loss before tax (60) (110) (390) (560)
============== ========== ============ ==========
Segment assets 1,082 2,958 1,502 5,542
============== ========== ============ ==========
For the six months ended 30 September 2021 (unaudited)
Other
West Africa US operations Total
GBP'000 GBP'000 GBP'000 GBP'000
External revenue - 311 - 311
============== ========== ============ ==========
Profit/(loss) before
tax (52) 20 (313) (345)
============== ========== ============ ==========
Segment assets 1,076 4,036 648 5,760
============== ========== ============ ==========
For the three months ended 31 December 2021 (audited)
Other
West Africa US operations Total
GBP'000 GBP'000 GBP'000 GBP'000
External revenue - 109 - 109
============== ========== ============ ==========
Profit/(loss) before
tax 52 (479) (682) (1,109)
============== ========== ============ ==========
Segment assets 1,535 4,229 144 5,908
============== ========== ============ ==========
6. Seasonality of operations
Mining at Falcon Isle takes place between May and November due
to winter snow cover at the mine site and on the approach road. The
fertiliser produced is used primarily during the planting and
growing seasons, but sales by Falcon Isle take place throughout the
year.
7. Intangible assets
30-Jun-22 31-Mar-21 30-Sep-21 31-Dec-21
(Unaudited) (unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000 GBP'000
Cost
Balance at beginning of period 4,643 1,227 3,637 1,227
Additions 3 2,629 607 3,584
Disposals - (158) - (158)
Effect of movement in exchange rates 298 (61) 38 (10)
----------------- ------------------ ----------------- ------------------
Balance at end of period 4,944 3,637 4,282 4,643
================= ================== ================= ==================
Impairment losses
Balance at beginning of period 37 158 - 158
Impairment 26 - - -
Amortisation - - 37
Disposals (158) - (158)
Effect of movement in exchange rates 6 - - -
----------------- ------------------ ----------------- ------------------
Balance at end of period 69 - - 37
================= ================== ================= ==================
Carrying amounts
Balance at end of period 4,875 3,637 4,282 4,606
================= ================= ================= =================
Balance at beginning of
period 4,606 1,069 3,637 1,069
================= ================= ================= =================
Intangible assets comprise the fair value of prospecting and
exploration rights.
8. Property, plant and equipment
Acquisitions and disposals
During the six months ended 30 June 2022 the Group acquired
assets with a cost of GBPnil (six months ended 31 March 2021:
GBP263,000, six months ended 30 September 2021: GBP209,000, three
months ended 31 December 2021: (GBP112,000)).
No assets were disposed of during the six months ended 30 June
2022 or any comparative period.
9. Right of use asset
30-Jun-22 31-Mar-21 30-Sep-21 31-Dec-21
(unaudited) (unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000 GBP'000
Balance at beginning of period 215 - - -
Additions - - - 314
Depreciation (66) - - (99)
Effects of movements in exchange rates 36 - - -
-------------- -------------- -------------- ------------
185 - - 215
============== ============== ============== ============
Lease liability
GBP'000 GBP'000 GBP'000 GBP'000
Balance at beginning of period 219 - - -
Additions - - - 314
Principal reduction (64) - - (105)
Finance cost 5 - - 10
Effects of movements in exchange rates 23 -
-------- -------- -------- --------
183 - - 219
======== ======== ======== ========
Current portion 120 - - 107
Non current portion 63 - - 112
---- --- --- -----
183 - - 219
==== === === =====
10. Inventories
30-Jun-22 31-Mar-21 (unaudited) 30-Sep-21 31-Dec-21
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000 GBP'000
Phosphate 484 135 245 273
-------------------
484 135 245 273
=================== ======================= ============== ============
11. Trade and other receivables
30-Jun-22 31-Mar-21 30-Sep-21 31-Dec-21
(unaudited) (unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000 GBP'000
Trade receivables - - - 7
Other receivables 95 352 226 87
Prepayments 20 39 17 -
--------------
115 391 243 94
============== ============== ============== ============
Trade receivables and other receivables are stated at their
nominal values less allowances for non-recoverability.
12. Share capital and reserves
Ordinary shares
On 26 April 2022 the Company announced the raising of a total of
GBP1,950,000 (before expenses) by the issue of 1,625,000,000 new
ordinary shares of 0.01p each ("Ordinary Shares") at a price of
0.12p per share. On 4 May 2022 1,000,000,000 new Ordinary Shares
were issued for cash consideration to raise GBP1,200,000 and the
balance of 625,000,000 new Ordinary Shares were issued on 18 May
2022 through a Broker Option following approval at a General
Meeting of the company held on 16 May 2022. In addition, a further
52,500,000 new Ordinary shares were issued on 18 May 2022 at a
price of 0.12p per share in settlement of liabilities.
Each of the 1,677,500,000 new Ordinary Shares issued had
attached a warrant entitling the registered holder to subscribe for
one new Ordinary Share at a price of 0.18p at any time up to 31 May
2024.
Subsequent to 30 June 2022, following approval at a General
Meeting of the company held on 25 July 2022, the Ordinary Shares
were consolidated on the basis that every 100 Ordinary Shares were
be consolidated into 1 ordinary share of 1p ("Consolidated Ordinary
Share"). Following the consolidation, the Company's issued share
capital comprises 79,735,731 Consolidated Ordinary Shares. The
subscription rights of the warrants referred to above were varied
accordingly.
Dividends
No dividends were declared or paid in the six months ended 30
June 2022 (six months ended 31 March 2021: GBPnil, six months ended
30 September 2021: GBPnil, three months ended 31 December 2021:
GBPnil)).
13. Trade and other payables
Current 30-Jun-22 31-Mar-21 30-Sep-21 31-Dec-21
(unaudited) (unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000 GBP'000
Trade payables 401 146 567 962
Accruals 210 230 249 93
Amounts due to Falcon Isle' minority interest - - - 593
Other payables 814 98 106 11
-------------- -------------- -------------- ------------
1,425 474 922 1,658
============== ============== ============== ============
Non-current 30-Jun-22 31-Mar-21 30-Sep-21 31-Dec-21
(unaudited) (unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000 GBP'000
Amounts due to Falcon Isle' minority
interest - - - 749
Other payables 1,293 - - -
-------------- -------------- -------------- ------------
1,293 - - 749
============== ============== ============== ============
There is no material difference between the fair value of trade
and other payables and their book value.
14. Acquisition of non-controlling interest ("NCI") in Falcon Isle
In March 2022, the Group agreed to acquire the outstanding 49%
equity interest in Falcon Isle, together with loans totalling
$1,816,527 made by the vendor to Falcon Isle for total
consideration of $3.2 million payable in four annual tranches of
$800,000 commencing on 1 July 2022. The first payment was made on
30 June 2022., The second payment, due by 1 July 2023, has been
treated as a current liability and is included in other payables.
The final two instalments have been treated as non-current
liabilities.
The following table summarises the effect of changes in the
Company's ownership interest in Falcon Isle.
GBP'000
Carrying amount of NCI acquired 362
Consideration less value of loan acquired 1,056
694
========
The decrease in equity attributable to the owners of the Company
comprised :
- A decrease in retained earnings of GBP694,000.
15. Related parties
The total amount due to Dave Reeves at the period end was
GBP2,000 in respect of unpaid remuneration (six months ended 31
March 2021: GBP43,000, six months ended 30 September 2021:
GBP55,000, fifteen months ended 31 December 2021: GBP25,000).
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END
IR FLFLRAIIDFIF
(END) Dow Jones Newswires
September 28, 2022 02:00 ET (06:00 GMT)
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