TIDMEST
RNS Number : 2229O
East Star Resources PLC
29 September 2023
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF REGULATION 2014/596/EU WHICH IS PART OF DOMESTIC UK
LAW PURSUANT TO THE MARKET ABUSE (AMMENT) (EU EXIT) REGULATIONS (SI
2019/310) ("UK MAR"). UPON THE PUBLICATION OF THIS ANNOUNCEMENT,
THIS INSIDE INFORMATION (AS DEFINED IN UK MAR) IS NOW CONSIDERED TO
BE IN THE PUBLIC DOMAIN.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY IN OR INTO THE UNITED STATES,
AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER
JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OF SUCH JURISDICTION.
29 September 2023
East Star Resources Plc
("East Star" or the "Company")
Half Year Report for the Six Months Ended 30 June 2023
East Star Resources Plc (LSE:EST), which is defining mineral
resources in Kazakhstan for the energy revolution, is pleased to
present its half year report for the six month period ended 30 June
2023.
Projects Highlights
Copper-Zinc-Lead - Rudny Altai VMS Belt
-- Announced on 25 January 2023 the identification of a
substantial copper-zinc-lead-deposit located within the 100% owned
RA3 licence (the "Verkhuba Deposit")
o An independent JORC-compliant Exploration Target of 19-23 Mt
at 1.4-1.9% CuEq for the Verkhuba Deposit was announced on 21 March
2023, defined by 97 drill holes comprising 42,178 m of historical
diamond drilling
o Conducted extensive geological traverse over project area in
preparation for drilling, mapping more than 70 historical collar
locations
-- Post period-end, in August 2023, East Star commenced diamond
core drilling, focusing primarily on the Verkhuba Deposit
-- Announced on 20 September 2023 encouraging observations with
visual core inspection combined with X-ray fluorescence ("XRF")
readings confirming presence of copper and zinc mineralisation in
the first four holes at Verkhuba
o Copper mineralisation identified in all holes with multiple
massive sulphide intervals recognised
o Drilling identified large thicknesses of disseminated copper
mineralisation, not previously acknowledged or assayed in
historical drilling
-- Core is being prepared for multi-element assay including
copper, zinc, and precious metals (gold/silver)
Rare Earths - East Kostanay
-- Announced on 3 April 2023 assay results from drilling in
November 2022 which demonstrated high grade intersections across
the entire tested area and broad intersections in every drill hole,
validating historical data and providing a strong indication of an
REE deposit of consequential size and grade
-- Sequential leach test results announced on 16 June 2023
demonstrated that a majority of REEs had been liberated from
primary minerals during the weathering process
-- Planning low-cost assessment of additional test work to
identify if an economic process to leach rare earth elements from
the weathered material is possible
Gold - Chu-Ili Orogenic Gold Belt
-- Assay results from 2022 drilling on Apmintas Licence
announced on 13 February 2023 demonstrated:
o Anomalous gold mineralisation in all three target areas with
potential economic grades in the Eshkilitau II and Southern Shabdar
targets
o Eshkilitau II has potential for a mineralised system with a
strike of >1 km along a fault zone with significant regional
exploration upside potential from >10km of strike
o Analysis ongoing to determine next steps
-- Assay results from 2022 drilling on Dalny Licence announced
on 26 April 2023 confirmed a gold bearing mineralised system with
shallow intersections of potentially economic grades and widths
o Analysis ongoing to determine next steps
Sandy Barblett, Non-Executive Chairman, commented:
"In early January 2023 East Star identified a substantial
copper-zinc-lead deposit defined from extensive historical
drilling. Since then, we have wasted no time in preparing for and
undertaking our first copper drilling programme, primarily focusing
on this deposit. Together with a number of exciting
heli-electromagnetic and other targets, the Company's Rudny Altai
prospects are potential game-changers for our Company in a prolific
copper region with established infrastructure. We look forward in
due course to receiving results of the first assays, from what is
evidently a strongly mineralised system.
"In addition, field and desktop work continues on other
prospects across the VMS licences. A review by one of the world's
most prominent VMS experts, Dr Bruce Gemmell, highlights our
licences as being "highly prospective for the discovery of new VMS
deposits." This was further validated by a field visit from VMS
expert, Dr Carl Brauhart, in August 2023, which confirmed our
analysis that felsic volcanic rocks are abundant across the
tenements with almost all field observations being consistent with
a deep marine environment suitable for the establishment of VMS
deposits.
"In parallel, East Star has continued to evaluate data from our
rare earths and gold projects to determine the next steps in
exploration."
For further information visit the Company's website at
www.eaststarplc.com , or contact:
East Star Resources Plc
Alex Walker, Chief Executive Officer
Tel: +44 (0)20 7390 0234 (via Vigo Consulting)
Peterhouse Capital Limited (Corporate Broker)
Duncan Vasey / Lucy Williams
Tel: +44 (0) 20 7469 0930
Vigo Consulting (Investor Relations)
Ben Simons / Peter Jacob
Tel: +44 (0)20 7390 0234
About East Star Resources Plc
East Star Resources is focused on the discovery and development
of strategic minerals required for the energy revolution. With an
initial nine licences covering 1,321.5 km(2) in three mineral rich
districts of Kazakhstan, East Star is undertaking an intensive
exploration programme, applying modern geophysics to discover
minerals in levels that were not previously explored. The Company
also intends to further expand its licence portfolio in Kazakhstan.
East Star's management are based permanently on the ground,
supported by local expertise, and joint ventures with the state
mining company.
Follow us on social media:
LinkedIn:
https://www.linkedin.com/company/east-star-resources/
Twitter: https://twitter.com/EastStar_PLC
Subscribe to our email alert service to be notified whenever
East Star releases news:
www.eaststarplc.com/newsalerts
The person who arranged for the release of this announcement was
Alex Walker, CEO of the Company.
CHAIRMAN'S STATEMENT
Introduction
The first half of 2023 (the "Period") has seen intense
operational activity. In early January 2023, East Star identified a
substantial copper-zinc-lead deposit defined from extensive
historical drilling. Since then, we have wasted no time in
preparing for and undertaking our first copper drilling campaign,
primarily focusing on this deposit. Together with a number of
exciting heli-electromagnetic ("HEM") and other targets, the
Company's Rudny Altai prospects are potential game-changers in a
prolific copper region with established infrastructure, providing a
potential route to a low-CAPEX development.
In parallel, East Star has continued work to evaluate data from
our rare earths and gold projects to determine the next steps in
exploration.
Review of Operations
Copper-Zinc-Lead - Rudny Altai VMS Belt
On 25 January 2023, East Star announced the identification of a
substantial copper-zinc-lead deposit ("Cu-Zn-Pb") located within
our 100% owned RA3 licence, centrally located in the world-class
Rudny Altai VMS belt. The newly identified polymetallic deposit
known as the Verkhuba Deposit is within the greater Verkhuba Ore
District on East Star's licences which includes a number of other
high priority HEM anomalies.
The next step in anticipation of drilling was to commission
leading resource advisors AMC Consultants to determine an
independent JORC-compliant Exploration Target for the Verkhuba
Deposit. On 21 March 2023, we published AMC Consultants'
Exploration Target of 19-23 Mt at 1.0-1.4% Cu and 1.0-1.4% Zn
(1.4-1.9% CuEq), which is defined by 97 drill holes comprising
42,178 m of historical diamond drilling, reviewed by East Star over
the preceding 12 months.
Shortly after the Period, in July 2023, we began to prepare the
site for an initial drilling programme. Our field teams undertook
an extensive geological traverse over the project area, mapping
more than 70 historical collar locations as well as a number of
copper outcrops. On 10 July 2023, we announced we had contracted
Everest Sondaj LLP, a Turkish-owned and locally operated drilling
contractor with extensive experience in drilling oriented diamond
core in mountainous areas, to execute our drilling programme.
During August 2023, we commenced diamond core drilling at the
Verkuba Deposit. This initial programme was aimed, amongst other
things, at twinning existing boreholes with identified strong
copper mineralisation, as well as testing the potential of gold and
silver mineralisation which was not assayed for in historical
drilling but is known to be present in metallurgical samples taken
from within the deposit.
On 20 September 2023, we were pleased to announce encouraging
observations from visual inspection and logging of core, with much
of the drilling correlating with anticipated mineralised zones from
the historical data. Broad zones of disseminated sulphides with
consistent copper and zinc readings by XRF, along with zones of
chalcopyrite-rich massive sulphides, leaves very little doubt we
are in a strongly mineralised system. Core is currently being
prepared for assay which will provide the data we need to model
these results against the historical drill holes which will
hopefully form the basis of a JORC compliant resource.'
In addition, field and desktop work continues on other prospects
across the Rudny Altai VMS licences. A review by one of the world's
most prominent VMS experts, Dr Bruce Gemmell, highlights our
licences as being "highly prospective for the discovery of new VMS
deposits." This was further validated by a field visit from VMS
expert, Dr Carl Brauhart, in August 2023, which confirmed our
analysis that felsic volcanic rocks are abundant across the
tenements with almost all field observations being consistent with
a deep marine environment suitable for the establishment of VMS
deposits.
Rare Earths - East Kostanay
On 3 April 2023, we announced assay results from initial
drilling to test the Talairyk project for Rare Earth Element
("REE") concentrations. The results demonstrated high grade
intersections across the entire tested area and broad intersections
in every drill hole, validating historical data and providing a
strong indication of an REE deposit of consequential size and
grade. Samples analysed reported Total Rare Earth Oxides with an
average grade of 934.4 ppm with the highest-grade result of 2m at
6,127 ppm TREO.
Eight samples were sent for five-stage sequential leach test
work to provide an initial indication as to the leachability of the
REEs from the clays. The test work was conducted by the School of
Applied Sciences at University of Brighton, UK and the results were
announced on 16 June 2023. Sequential leach testing clearly
demonstrated that a majority of REEs were liberated from primary
minerals during the weathering process and were now associated with
other mineral phases. Our understanding of the minerology and
potential for economic extraction of REEs from the Talairyk deposit
has grown significantly and, while not definitive, it will allow us
to plan a low-cost assessment of what additional test work is
required to identify if an economic process to leach rare earth
elements from the weathered material is possible. We are consulting
with metallurgical specialists in this regard to assess the next
phase of testing.
Gold - Chu-Ili Orogenic Gold Belt
On 13 February 2023, we announced results from diamond core
drilling undertaken in 2022 on the Apmintas Licence. The results
demonstrated gold bearing systems in all three target areas.
Eshkilitau II showed potential for an extensive mineralised system
with a strike of more than 1 km along a fault zone. High-grade
intersections at Southern Shabdar (32.15 g/t Au) and Eshkilitau
(14.01 g/t Au) demonstrated the existence of high-grade zones
within the mineralised systems while gold occurrences mapped over
10 km of the Eshkilitau trend demonstrated the exploration upside
within the region.
On 26 April 2023, we announced results from diamond core
drilling in 2022 on the Dalny Licence, with results from the
Alatagyl northern area indicating a gold bearing mineralised system
with shallow intersections of potentially economic grades and
widths.
We are undertaking a review of all the drill results against the
historical data to expand our knowledge of the mineralisation
system on these licences and determine the scope of follow-up
exploration.
Key East Star Financial Indicators
-- Cash and cash equivalents at 30 June 2023 were GBP765,000
-- Loss before taxation for the Period was GBP260,000
-- The Group held net assets at 30 June 2023 of GBP3,494,000
Summary
We are eagerly awaiting the assays from the drilling at the
Verkhuba Copper Deposit from what is evidently a strongly
mineralised system. Further understanding and advancing the
opportunity at Verkhuba and other attractive targets is clearly our
number one priority in the coming months given the scale and
proximity of the opportunity. A maiden JORC-compliant resource,
which we hope to obtain in due course, will move us a step closer
towards our objective of a low CAPEX, low OPEX development with
nearby processing options.
I would like to pay tribute to Alex Walker and his in-country
team for the tremendous progress made during the Period. We thank
all shareholders for their continued support and look forward to
updating you again in due course.
Sandy Barblett
Non-Executive Chairman
29 September 2023
EAST STAR RESOURCES PLC - CONDENSED CONSOLIDATED INTERIM
FINANCIAL STATEMENTS
STATEMENT OF COMPREHENSIVE INCOME
FOR THE 6 MONTH PERIODING 30 JUNE 2023
Unaudited Unaudited
Period ending Period ending
30 June 31 May
2023 2022
Note GBP'000 GBP'000
--------------------------------------------------------- ----- ------------------------- -------------------------
Continuing Operations
--------------------------------------------------------- ----- ------------------------- -------------------------
Administrative expenses 5 (260) (399)
Operating loss (260) (399)
--------------------------------------------------------- ----- ------------------------- -------------------------
Finance Income - (93)
Reverse acquisition expense - (1,626)
Loss before taxation (260) (2,118)
--------------------------------------------------------- ----- ------------------------- -------------------------
Other comprehensive income (60) 91
Total comprehensive loss for the period attributable to
shareholders from continuing operations (320) (2,027)
--------------------------------------------------------- ----- ------------------------- -------------------------
Basic & dilutive earnings per share - (GBP pence) 6 (0.143) (1.435)
--------------------------------------------------------- ----- ------------------------- -------------------------
The notes form an integral part of the Condensed Consolidated
Interim Financial Statements.
EAST STAR RESOURCES PLC - CONDENSED CONSOLIDATED INTERIM
FINANCIAL STATEMENTS
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2023
Unaudited Unaudited Audited
As At As At As At
30 June 31 May 31 December
2023 2022 2022
Note GBP'000 GBP'000 GBP'000
NON-CURRENT ASSETS
Exploration assets 7 2,543 - 2,268
Earn in advance (financial asset) 57 - 57
Property, plant and equipment 19 26 25
Intangibles - 1,039 -
TOTAL NON-CURRENT ASSETS 2,619 1,065 2,350
----------------------------------- ----- ------------------ ------------------- ----------------------------
CURRENT ASSETS
Cash and cash equivalents 765 3,205 1,456
Trade and other receivables 180 327 133
TOTAL CURRENT ASSETS 945 3,532 1,589
----------------------------------- ----- ------------------ ------------------- ----------------------------
TOTAL ASSETS 3,564 4,597 3,939
----------------------------------- ----- ------------------ ------------------- ----------------------------
CURRENT LIABILITIES
Trade and other payables 70 50 127
TOTAL CURRENT LIABILITIES 70 50 127
----------------------------------- ----- ------------------ ------------------- ----------------------------
TOTAL LIABILITIES 70 50 127
----------------------------------- ----- ------------------ ------------------- ----------------------------
NET ASSETS 3,494 4,547 3,812
----------------------------------- ----- ------------------ ------------------- ----------------------------
EQUITY
Share capital 9 1,823 1,823 1,823
Share premium 9 5,891 5,905 5,891
Share based payment reserve 10 270 106 268
Share capital to be issued 3,750 3,750 3,750
Foreign exchange reserve 6 93 66
Reverse acquisition reserve (4,795) (4,932) (4,795)
Retained earnings (3,451) (2,198) (3,191)
Non controlling interest (0.03) (0.03) -
TOTAL EQUITY 3,494 4,547 3,812
=================================== ===== ================== =================== ============================
The notes form an integral part of the Condensed Consolidated
Interim Financial Statements.
The Condensed Consolidated Financial Statements were approved
and authorised by the Board of Directors on 29 September 2023
Sandy Barblett
Non-Executive Chairman
EAST STAR RESOURCES PLC - CONDENSED CONSOLIDATED INTERIM
FINANCIAL STATEMENTS
STATEMENT OF CHANGES IN EQUITY
FOR THE 6 MONTH PERIODING 30 JUNE 2023
Share Share Equity SBP Foreign Reverse Share Retained Total
Capital Premium reserve reserve exchange acquisition Capital Earnings Equity
reserve reserve to
issue
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------- -------- --------- --------- --------- --------- ------------ -------- --------- --------
Balance at
31 December
2021 53 132 31 - (4) - - (86) 126
--------------- -------- --------- --------- --------- --------- ------------ -------- --------- --------
Loss for
period - - - - - - - (3,105) (3,105)
Other
comprehensive
income - - - - 70 - - - 70
--------------- -------- --------- --------- --------- --------- ------------ -------- --------- --------
Total
comprehensive
expense for
year - - - - 70 - - (3,105) (3,035)
Transactions
with owners
in own
capacity
--------------- -------- --------- --------- --------- --------- ------------ -------- --------- --------
Recognition
of PLC equity
at
acquisition
date 695 1,501 - 24 - 1,257 - - 3,477
Remove share
capital of
DVK (53) (132) (31) - - 216 - - -
Issue of
shares
for
acquisition
of subsidiary 504 2,014 - - - (6,268) 3,750 - -
Issue of
shares
for placing 624 2,494 - - - - - - 3,118
Share issue
costs - (118) - - - - - - (118)
Broker
warrants
issued - - - 132 - - - - 132
Employee
options
issued - - - 112 - - - - 112
--------------- -------- --------- --------- --------- --------- ------------ -------- --------- --------
Transactions
with owners
in own
capacity 1,770 5,759 (31) 268 - (4,795) 3,750 - 6,721
--------------- -------- --------- --------- --------- --------- ------------ -------- --------- --------
Balance at
31 December
2022 1,823 5,891 - 268 66 (4,795) 3,750 (3,191) 3,812
--------------- -------- --------- --------- --------- --------- ------------ -------- --------- --------
Loss for
period - - - - - - - (260) (260)
Other
comprehensive
income - - - - (60) - - - (60)
--------------- -------- --------- --------- --------- --------- ------------ -------- --------- --------
Total
comprehensive
income for
period - - - - (60) - - (260) (320)
Transactions
with owners
in own
capacity
--------------- -------- --------- --------- --------- --------- ------------ -------- --------- --------
Employee
options
issued - - - 2 - - - - 2
Transactions
with owners
in own
capacity - - - 2 - - - - 2
--------------- -------- --------- --------- --------- --------- ------------ -------- --------- --------
Balance at
30 June 2023 1,823 5,891 - 270 6 (4,795) 3,750 (3,451) 3,494
--------------- -------- --------- --------- --------- --------- ------------ -------- --------- --------
EAST STAR RESOURCES PLC - CONDENSED CONSOLIDATED INTERIM
FINANCIAL STATEMENTS
STATEMENT OF CASHFLOWS
FOR THE 6 MONTH PERIODING 30 JUNE 2023
Unaudited Unaudited
6 month period ended 6 month period ended
30 June 31 May
2023 2022
GBP'000 GBP'000
Cash flow from operating activities
Loss before taxation for the period (320) (2,027)
Adjustments for:
Share based payment on reverse acquisition - 1,626
Depreciation 7 -
Share based payments 2 82
Foreign exchange 54 35
Listing expenses settled in shares - 18
Changes in working capital:
Decrease / (increase) in trade and other receivables (102) 346
Increase / (decrease) in trade and other payables (46) (158)
Net cash outflow from operating activities (405) (78)
Cash flows from investing activities
Investment in fixed assets (1) (0.8)
Spend on exploration assets (275) (1,039)
Net cash flow from investing activities (276) (1,040)
------------------------------------------------------ --------------------- ---------------------
Cash flows from financing activities
Proceeds from Issue of Shares - 3,100
Share Issue Costs - (105)
Net cash flow from financing activities - 2,995
------------------------------------------------------ --------------------- ---------------------
Net increase in cash and cash equivalents (681) 1,877
Cash and cash equivalents at beginning of the period 1,456 1,353
Foreign exchange impact on cash (10) (25)
Cash and cash equivalents at end of the period 765 3,205
------------------------------------------------------ --------------------- ---------------------
EAST STAR RESOURCES PLC - CONDENSED CONSOLIDATED INTERIM
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 6 MONTH PERIODING 30 JUNE 2023
1. General information
East Star Resources Plc was incorporated under the Companies Act
2006 on 17 November 2020 in England and Wales under the name Cawmed
Resources Limited and remains domiciled there with Registered
Number 13025608. The Company subsequently changed its name to East
Star Resources Limited on 27 January 2021 and on 3rd March 2021
re-registered as a plc. The following condensed consolidated
interim financial statements are consolidated to include the
Company and all its subsidiaries ("the Group").
The address of its registered office is Eccleston Yards, 25
Eccleston Place, London SW1W 9NF, United Kingdom.
The principal activity of the Group is to explore opportunities
in the natural resources sector specifically in relation to gold
and copper extraction. In prior periods the Company successfully
completed the acquisition of Discovery Ventures Kazakhstan ("DVK"),
a Kazakhstan based subsidiary which jointly holds multiple
exploration licenses. During this period the Group has under taken
significant exploration activities across these licenses and
regularly reported to the market on the immense potential of the
area.
2. Accounting policies
IAS 8 requires that management shall use its judgement in
developing and applying accounting policies that result in
information which is relevant to the economic decision-making needs
of users, that are reliable, free from bias, prudent, complete and
represent faithfully the financial position, financial performance
and cash flows of the entity.
2.1 Basis of preparation
The condensed consolidated interim financial statements
("interim financial statements") have been prepared in accordance
with International Accounting Standard 34 "Interim Financial
Reporting" (IAS 34). The interim financial statements have been
prepared on the historical cost basis, except for assets and
liabilities measured at fair value through profit and loss. The
Directors have decided not to present parent company standalone
financial statements as they do not add to the understandability of
the position of the Group.
The functional currency for each entity in the Group is
determined as the currency of the primary economic environment in
which it operates. The functional currency of the Company's
subsidiaries is the Kazakhstan Tenge. The presentational currency
of the Group is Pounds Sterling as this is the functional currency
of the parent entity and also the currency in which equity
fundraising has been facilitated. Amounts have been rounded to the
nearest GBP'000.
The interim financial statements have not been audited and do
not constitute statutory accounts within the meaning of section 434
of the Companies Act 2006. The figures have been prepared using
applicable accounting policies and practices consistent with those
adopted in the audited annual financial statements for the year
ended 31 December 2022.
The interim financial statements are for the six months to 30
June 2023, being six months from the financial year end for the
Group being 31 December 2022. The interim financial statements do
not include all the information and disclosures required in the
annual financial statements and should be read in conjunction with
the Group's annual audited financial statements for the period
ended 31 December 2022. The Group has prepared the interim
financial statements using reverse acquisition methodology and
therefore has presented the comparatives for the accounting
acquirer (legal subsidiary - DVK). As per IAS 34 the comparative
data for the comparable year-to-date period has been presented as
well as the year-to-date figures for the immediately preceding
financial year being 31 December 2022.
Due to the Parent Company changing accounting reference dates
from 31 November to 31 December comparable interims periods are not
strictly identical. However as there is no seasonal affects to the
business and the periods are of equal length the Directors do not
see any issue in presenting the comparative period. The Group is in
its relative infancy also and is yet to establish a consistent
business cycle so the usefulness of comparability is limited.
The business is not considered to be seasonal in nature.
New standards, amendments and interpretations adopted by the
Group
During the current period the Group adopted all the new and
revised standards, amendments and interpretations that are relevant
to its operations and are effective for accounting periods
beginning on 1 January 2023. This adoption did not have a material
effect on the accounting policies of the Group.
New standards, amendments and interpretations not yet adopted by
the Group.
The standards and interpretations that are relevant to the
Group, issued, but not yet effective, up to the date of these
interim Financial Statements have been evaluated by the Directors
and they do not consider that there will be a material impact of
transition on the financial statements.
2.2 Going concern
The Directors have assessed the Group's ability to adopt the
going concern basis of accounting and consider the adoption to be
appropriate in the preparation of the interim financial statements.
Currently the Group has cash and cash equivalents of GBP765k and
its only major committed expenditure relates to minimum spend
commitments on licenses which equates to around GBP260,000 until
the Group's next reporting date. This combined with a current
average cash burn rate across the Group of around GBP30,000/month
supports the fact that the Group will not have any liquidity issues
in the near future.
Management have prepared in depth budgets and cash flow analysis
to support their assumptions and hence are confident in the
adoption of the going concern basis for the Group.
2.3 Risks and uncertainties
The Directors continuously assess and monitor the key risks of
the business. The business has not materially changed since the end
of the last period and hence risks pertaining to the business
remain materially similar. Overall the Board feels that the team
and risk mitigation factors that are in place are sufficient to
reasonably deal with any risks that may arise.
3. Critical accounting estimates and judgements
In the application of the Group's accounting policies, the
Directors are required to make judgements, estimates and
assumptions about the carrying amount of assets and liabilities
that are not readily apparent from other sources. The estimates and
associated assumptions are based on historical experience and other
factors that are considered to be relevant. Actual results may
differ from these estimates.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised, if the revision
affects only that period, or in the period of the revision and
future periods if the revision affects both current and future
periods. The areas involving a higher degree of judgement or
complexity, or areas where assumptions and estimates are
significant to the financial statements, are disclosed below:
Recoverable value of exploration assets - Note 7
Costs capitalised in respect of the Group's mining assets are
required to be assessed for impairment under the provisions of IFRS
6. Such an estimate requires the Group to exercise judgement in
respect of the indicators of impairment and also in respect of
inputs used in the models which are used to support the carrying
value of the assets. Such inputs include estimates of mineral
reserves, production profiles, commodity prices, capital
expenditure, inflation rates, and pre-tax discount rates that
reflect current market assessments of (a) the time value of money;
and (b) the risks specific to the asset for which the future cash
flow estimates have not been adjusted. The Directors concluded that
there was no impairment as at 31 December 2022 and circumstances
have not changed since then to indicate that there would be any
impairment at 30 June 2023.
4. Segment reporting
The Group manages its operations in two segments, being
exploration activities in Kazakhstan and corporate functions in the
United Kingdom. The results of these segments are regularly
reviewed by the board as a basis for the allocation of resources,
in conjunction with individual investment appraisals, and to assess
their performance.
Contributions per segment to loss before taxation are detailed
below:
United Kingdom Kazakhstan Total
GBP'000 GBP'000 GBP'000
----------------------------------------------------------------- --------------- ----------- --------
Administrative expenses (205) (55) (260)
Operating loss from continued operations per reportable segment (205) (55) (260)
Reportable segment assets 891 2,673 3,564
Reportable segment liabilities (16) (55) (70)
Total 875 2,619 3,494
=============== =========== ========
5. Administrative expenses
United Kingdom Kazakhstan Total
2023 GBP'000 GBP'000 GBP'000
Consultancy expense (41) (94) (135)
Professional fees (53) - (53)
Administrative expenses (61) (3) (64)
Salary expense (44) - (44)
Foreign Exchange (6) 42 36
(205) (55) (260)
--------------- ------------- ---------------
6. Earnings per share
The calculation for basic and diluted earnings per ordinary
share is based on the total comprehensive loss after income tax
attributable to equity shareholders for the period and is as
follows:
Unaudited Unaudited Audited
6 month period ended 6 month period ended Year
30 June 31 May ended 31 December
2023 2022 2022
Net loss for the period attributable to ordinary
equity holders for continuing operations
(GBP'000) (260) (2,027) (3,105)
Weighted average number of ordinary shares in
issue 182,250,164 141,193,801 180,843,292
--------------------------------------------------- --------------------- --------------------- -------------------
Basic and diluted earnings per share for
continuing operations (pence) (0.143) (1.435) (1.72)
--------------------------------------------------- --------------------- --------------------- -------------------
There is no difference between the diluted loss per share and
the basic loss per share presented. Share options and warrants
could potentially dilute basic earnings per share in the future but
were not included in the calculation of diluted earnings per share
as they are anti-dilutive for the period presented. See note 23 for
further details.
7. Exploration & evaluation assets
GBP'000
----------------------------------------- --------
Opening balance - 1 January 2023 2,268
Exploration expenditure across licenses 275
As at 30 June 2023 2,543
----------------------------------------- --------
Exploration and evaluation assets relate specifically to mining
licenses held in the Kazakhstan based subsidiaries. The Group holds
a total of 8 licenses plus one jointly through a farm in
arrangement with Phoenix Mining Ltd across 3 mineral districts
being specifically the Chu-Ili belt, East Kostanay region and Rudny
Altai belt. The majority of investment in the assets has been
across the Chu-Ili and Rudny held licenses to date.
8. Investment in subsidiaries
Country of
Name Business Activity Incorporation Registered Address Percentage Holding
----------------------- --------------------- ------------------------ ----------------------- -------------------
bld. 12/1, VP 32, 3rd
floor, IHUB
coworking, D. Konayev
Street, Yessil
district, Astana
Discovery Ventures city,
Kazakhstan Limited Mineral exploration Kazakhstan Z05H9B0, Kazakhstan 100%
bld. 12/1, VP 32, 3rd
floor, IHUB
coworking, D. Konayev
Street, Yessil
district, Astana
city,
Chu Ili Resources ltd* Mineral exploration Kazakhstan Z05H9B0, Kazakhstan 80%
bld. 12/1, VP 32, 3rd
floor, IHUB
coworking, D. Konayev
Street, Yessil
district, Astana
city,
Rudny Resources ltd* Mineral exploration Kazakhstan Z05H9B0, Kazakhstan 80%
----------------------- --------------------- ------------------------ ----------------------- -------------------
*Subsidiaries held indirectly through Discovery Ventures
Kazakhstan
9. Share capital and share premium
Ordinary Shares Share Capital Share Premium Total
# GBP'000 GBP'000 GBP'000
---------------- -------------- -------------- --------
As at 31 December 2022 182,250,164 1,823 5,891 7,714
As at 30 June 2023 182,250,164 1,823 5,891 7,714
---------------- -------------- -------------- --------
10. Share based payments reserve
The following options over ordinary shares have been granted by
the Group and are outstanding at period end:
GBP'000
---------------------------------- --------
Opening balance - 1 January 2023 268
Employee options 2
As at 30 June 2023 270
---------------------------------- --------
Warrants
As at 30 June 2023
----------------------------------------------
Number of
Weighted average exercise price warrants
----------------------------------- -------------------------------- ------------
Brought forward at 1 January 2023 5p 14,813,505
Granted in period 5p -
Vested in period 5p -
Lapsed in period 5p (6,000,000)
Outstanding at 30 June 2023 5p 8,813,505
----------------------------------- -------------------------------- ------------
Exercisable at 30 June 2023 5p 8,813,505
=================================== ================================ ============
Options
As at 30 June 2023
---------------------------------------------
Number of
Weighted average exercise price warrants
----------------------------------- -------------------------------- -----------
Brought forward at 1 January 2023 5p 11,250,000
Granted in period(1) 5p 4,432,326
Vested in period 5p -
Cancelled in period (181,159)
Outstanding at 30 June 2023 5p 15,501,167
----------------------------------- -------------------------------- -----------
Exercisable at 30 June 2023 5p 11,250,000
=================================== ================================ ===========
(1) On 1 March 2023, 4,432,326 employee options were granted in
relation to the Long Term Incentive Plan implemented. These options
have an exercise price of GBP0.043 and expire 10 years from the
grant date.
The option vesting details are listed below:
Vesting Event Trigger for Vesting Number of options vested on date of vesting
1 50% of the Shares under Option shall Vest on the first 50% of options issued
anniversary of the Date of Grant;
-------------------------------------------------------- --------------------------------------------
2 25% of the Shares under Option shall Vest on the second 25% of options issued
anniversary of the Date of Grant;
and
-------------------------------------------------------- --------------------------------------------
3 the remaining number of the Shares under Option shall 25% of options issued
Vest on the third anniversary of the
Date of Grant.
-------------------------------------------------------- --------------------------------------------
12. Related party transactions
Equity issued to Directors & Director related entities
As a result of the Long Term Incentive Plan implemented during
the Period the Directors and following employees were issued
options as below:
Name Role Options
Alex Walker Director 2,898,511
---------- ----------
Anthony Eastman Director 289,855
---------- ----------
David Minchin Director 289,855
---------- ----------
Sandy Barblett Director 289,855
---------- ----------
Akmaral Niyazova Employee 181,159
---------- ----------
Saltanat Mukasheva Employee 181,159
---------- ----------
Zhanara Ismuratova Employee 181,159
---------- ----------
Ruslan Balykbayev Employee 120,773
---------- ----------
Provision of services
During the period, GBP30,241 was paid to Orana Corporate LLP for
the provision of administrative and corporate accounting services
of which GBP6,030 remains owing at 30 June 2023. Anthony Eastman is
a Director of the Company and a partner of Orana Corporate LLP.
Other than these there were no other related party
transactions.
13. Events subsequent to period end
There were no material events subsequent to period end that
require disclosure.
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END
IR BXGDCUDDDGXC
(END) Dow Jones Newswires
September 29, 2023 09:28 ET (13:28 GMT)
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