16 November 2016
Bezant Resources Plc
('Bezant' or the 'Company')
Final Results for the Year Ended 30 June 2016
Bezant (AIM: BZT), the AIM quoted mineral exploration and development company, announces its audited final results for the year ended 30 June 2016.
Highlights:
Corporate:
· £9.1m loss after tax (30 June 2015: £0.7m)
· Impairment charge of £8.3m relating to the Company's Mankayan Copper-Gold Project, Philippines
· Approximately £0.3m cash at bank at the period end (30 June 2015: £1.7m)
Platinum and Gold Mining Project, Choco District, Colombia:
· Option exercised to acquire 100% of Leeward Islands Exploration LLC which holds certain options over alluvial platinum and gold mining and exploration licences located in and around the Choco District, Colombia
Mankayan Copper-Gold Project, Philippines (the 'Mankayan Project' or 'Mankayan'):
· Mankayan Project fully impaired due to the significant lingering uncertainty with respect to achieving any potential sale or joint venture ('JV') for the project in light of the current political and tax environment in the Philippines
Post Period End:
· Exploration agreement entered into with Exumax S.A.S ('Exumax') to secure its management services and expertise in respect of a planned 24-month exploration and development programme for the Company's near surface Colombian platinum and gold assets
· Successfully raised, in aggregate, £1,189,000 before expenses, through a placement, via Beaufort Securities Limited, of 38,400,000 new ordinary shares of 0.2 pence each in the capital of the Company and a subscription for a further 21,050,000 new ordinary shares by certain new and existing investors, both at a price of 2.0 pence per new ordinary share
· Acquisition of 100 per cent. of Colombian Mining Data S.A. ('CMD') completed for consideration comprising the issue of 7,201,745 new ordinary shares. CMD holds, inter alia, certain proprietary geological information and other data and intellectual property rights to be utilised by Exumax in performing its services under the Exploration Agreement
· Work commenced at our Colombia gold-platinum licences in October 2016, OBJECTIVE:
o Rapidly establish production economics of the FKJ-083 licence area, correlating historic mining data from previous operations with current exploration and processing results
o Establish first producing alluvial plant for platinum and gold
o Begin pipeline of further exploration and evaluation to establish prospective production zones
For further information, please contact:
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Bezant Resources plc
Bernard Olivier
Chief Executive Officer
Laurence Read
Executive Director / Communications Officer
Strand Hanson Limited (Nomad)
James Harris / Matthew Chandler / James Dance
Beaufort Securities Limited (Broker)
Elliot Hance
or visit http://www.bezantresources.com
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Tel: +61 40 894 8182
Tel: +44 (0)20 3289 9923
Tel: +44 (0)20 7409 3494
Tel: +44 (0)20 7382 8300
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The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 ('MAR').
Chairman's Statement
I am pleased to present the Group's final results for the financial year ended 30 June 2016 and to report on the Company's on-going activities to the date of this statement.
For the financial year ended 30 June 2016, the Group reported a loss, before and after tax, of £9.1m, in comparison to a loss of £0.7m in the previous year. The increased annual loss is primarily due to the full impairment of the carrying value for the Mankayan Project of £8.3m. The Board has decided to fully impair the Mankayan Project due to the significant lingering uncertainty with respect to achieving any potential sale or joint venture ('JV') for the project in light of the current political and tax environment in the Philippines. Despite this prudent full impairment of the Mankayan Project in the Company's accounts, we will actively continue to seek partners, particularly Philippine based entities, with a view to a potential future sale or JV for the project. I would like to remind shareholders that the Company has previously returned more capital to shareholders (8p per share in May 2013) than has been spent on the acquisition, exploration and development of the project to date.
This reporting period has seen Bezant achieve some real milestones in changing the Company's direction to better match the current challenging global economic and political conditions. Historically, as noted above, we have used Mankayan to achieve value enhancement and capital returns. Mankayan was proved-up in a very cost effective manner at a time when mining companies were seeking to acquire such flagship assets and the option payments received from Gold Fields Netherlands Services BV ('Goldfields') in 2011/2012 are testament to the validity of Bezant's approach. Market conditions have now completely altered and the Board therefore decided to formulate a new strategy to seek to achieve and return shareholder value. To this end, the Board continues to operate the Company from as a low a cost base as reasonably practicable, with salaries reduced across the organisation. The Board has identified and reviewed a series of projects, with particular emphasis on low cost platinum group metals recovery.
Having founded Aquarius Platinum Limited ('Aquarius Platinum'), and co-founded Sylvania Platinum Limited ('Sylvania Platinum'), our management team has had a long history with platinum and developing innovative new ways to recover platinum. At Aquarius Platinum, we pioneered a new way to mine the famous UG2 Reef in Bushveld in South Africa and introduced outsourcing to the management of mining companies. At Sylvania Platinum, we introduced novel and highly successful techniques for the recovery of platinum from Chrome Tailings Dumps. Both Aquarius Platinum and Sylvania Platinum held their respective assets in the famous Bushveld Complex in South Africa. The Bushveld Complex is the world's most significant platinum producer, but it now faces major political and mining challenges that are creating very high costs for the platinum mining industry in South Africa. This has led us to consider platinum projects outside of South Africa. In Colombia we identified that there are promising near surface alluvial platinum projects in the famous Choco district, a region that had previously been the world's major source of platinum prior to the discovery of the Bushveld Complex in South Africa. The Colombian project we have acquired has the benefit of near surface alluvial gravels that contain both platinum and gold deposits, and both metals are recoverable in their native state. The mining conditions in Colombia are very simple compared to the Bushveld Complex. The Bushveld Complex essentially involves deep, hard rock mining operations with considerable metallurgical complexity involved in liberating the economic metals. In the past, Colombia has been considered to be a high risk country, however, modern day Colombia has experienced nearly half a decade of new investment, much improved stability and despite the recent referendum vote rejecting the FARC Peace Agreement, the government and FARC are continuing to negotiate a peace settlement and the consensus is that all parties are working towards achieving a peaceful solution.
Following extensive assessment, the Board announced on 16 November 2015 that the Company had entered into an option agreement to potentially acquire a company holding interests in various platinum and gold licences in the Choco District located in NW Colombia. The option agreement afforded the Company the right to acquire 100 per cent. of Leeward Islands Exploration LLC ('Leeward') which holds options over more than 2,600ha of highly prospective platinum and gold tenements including in historical mining areas.
Subsequently, the Board concluded a small equity subscription to raise approximately £0.4 million (before expenses) on 1 December 2015 to enable the Company to progress the potential exercise of the option and associated due diligence. The Board exercised the Company's option to acquire Leeward for consideration comprising US$1 million and the issue of 37,306,137 new ordinary shares on 26 January 2016. We then embarked on a work programme to further assess the potential of the licences held under option by Leeward, and initiated the requisite local community consultation processes in order to obtain the relevant environmental and related permits and approvals prior to the commencement of exploration activities.
Post the reporting period end, the Board was delighted to announce that its preferred project development partner had been secured, namely Exumax S.A.S. ('Exumax'), a Colombian based alluvial mining company with an international management team with over 6 years' experience operating alluvial mining projects in Colombia. Exumax has built a bespoke alluvial business in Colombia having imported specialist alluvial mining equipment from New Zealand, the world leaders in stream bed mining technology.
With our exploration agreement in place with Exumax and all required permits and approvals having been secured to enable exploration work to commence on the FKJ-083 licence area, a further equity fundraising of approximately £1.19m was successfully concluded in September 2016. As a further indication of their support and belief in the potential of the Company and its asset portfolio, the Board also converted certain unpaid fees and salaries in September 2016, subsequent to the equity fund raising at a circa 20 per cent. premium to the placing price. Alluvial processing test plant was then mobilised to site by Exumax and commissioned. All required machinery, earth-moving equipment, processing plant and work crews are now on site and work on the first exploration test pits has commenced on the FKJ-083 licence area. I look forward to updating the market in due course as we make further progress.
Mr Edward Nealon
Non-Executive Chairman
15 November 2016
Group Statement of Comprehensive Income
For the year ended 30 June 2016
|
|
Notes
|
|
2016
|
|
2015
|
|
|
|
|
£'000
|
|
£'000
|
|
Continuing operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Group revenue
|
|
|
-
|
|
-
|
|
Cost of sales
|
|
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
Gross profit/(loss)
|
|
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
(717)
|
|
(561)
|
|
Group operating loss
|
|
|
|
(717)
|
|
(561)
|
|
|
|
|
|
|
|
|
|
Interest receivable
|
|
|
|
1
|
|
2
|
|
Impairment
|
2
|
|
|
(8,278)
|
|
-
|
|
Share of Associates' loss
|
|
|
|
(136)
|
|
(124)
|
|
|
|
|
|
|
|
|
|
Loss before taxation
|
|
|
|
(9,130)
|
|
(683)
|
|
Taxation
|
|
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
Loss for the year
|
|
|
|
(9,130)
|
|
(683)
|
|
|
|
|
|
|
|
|
|
Attributable to:
Owners of the Company
|
|
|
|
(9,114)
|
|
(683)
|
|
Non-controlling interest
|
|
|
|
(16)
|
|
-
|
|
|
|
|
|
(9,130)
|
|
(683)
|
|
|
|
|
|
|
|
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency reserve movement
|
|
|
|
499
|
|
192
|
|
Total comprehensive loss for the year
|
|
|
|
(8,631)
|
|
(491)
|
|
|
|
|
|
|
|
|
|
Attributable to:
Owners of the Company
|
|
|
|
(8,609)
|
|
(491)
|
|
Non-controlling interest
|
|
|
|
(22)
|
|
-
|
|
|
|
|
|
(8,631)
|
|
(491)
|
|
|
|
|
|
|
|
|
|
Loss per share (pence)
|
|
|
|
|
|
|
|
Basic and diluted
|
3
|
|
|
(8.42)
|
|
(0.82)
|
Consolidated Statement of Changes in Equity
For the year ended 30 June 2016
|
|
Share Capital
£'000
|
Share Premium
£'000
|
Other Reserves
£'000
|
Retained Losses
£'000
|
Non-Controlling
interest
£'000
|
Total
Equity
£'000
|
|
|
|
|
|
|
|
|
|
Balance at 1 July 2015
|
166
|
31,053
|
549
|
(17,470)
|
-
|
14,298
|
|
Current year loss
|
-
|
-
|
-
|
(9,114)
|
(16)
|
(9,130)
|
|
Foreign currency reserve
|
-
|
-
|
505
|
-
|
(6)
|
499
|
|
|
|
|
|
|
|
|
|
Total comprehensive loss for the year
|
-
|
-
|
505
|
(9,114)
|
(22)
|
(8,631)
|
|
Proceeds from shares issued
|
33
|
368
|
-
|
-
|
-
|
401
|
|
Issue of ordinary shares related to business combination
|
75
|
627
|
-
|
-
|
-
|
702
|
|
Subsidiary acquired
|
-
|
-
|
-
|
-
|
(21)
|
(21)
|
|
|
|
|
|
|
|
|
|
Balance at 30 June 2016
|
274
|
32,048
|
1,054
|
(26,584)
|
(43)
|
6,749
|
|
Balance at 1 July 2014
|
166
|
31,053
|
357
|
(16,787)
|
-
|
14,789
|
|
|
Prior year loss
|
-
|
-
|
-
|
(683)
|
-
|
(683)
|
|
|
Foreign currency reserve
|
-
|
-
|
192
|
-
|
-
|
192
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive loss for the year
|
-
|
-
|
192
|
(683)
|
-
|
(491)
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 30 June 2015
|
166
|
31,053
|
549
|
(17,470)
|
-
|
14,298
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Balance Sheet
As at 30 June 2016
|
|
Notes
|
|
2016
|
2015
|
|
|
|
|
£'000
|
£'000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
|
Plant and equipment
|
|
|
55
|
61
|
|
Investments
|
|
|
-
|
7,753
|
|
Intangibles - options to acquire exploration licence
|
4
|
|
1,620
|
-
|
|
Exploration and evaluation assets
|
|
|
4,790
|
4,788
|
|
Total non-current assets
|
|
|
6,465
|
12,602
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
Trade and other receivables
|
|
|
115
|
74
|
|
Cash and cash equivalents
|
|
|
261
|
1,679
|
|
Total current assets
|
|
|
376
|
1,753
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
|
6,841
|
14,355
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
Trade and other payables
|
|
|
92
|
57
|
|
Total current liabilities
|
|
|
92
|
57
|
|
|
|
|
|
|
|
NET ASSETS
|
|
|
6,749
|
14,298
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
Share capital
|
|
|
274
|
166
|
|
Share premium
|
|
|
32,048
|
31,053
|
|
Share-based payment reserve
|
|
|
265
|
265
|
|
Foreign exchange reserve
|
|
|
789
|
284
|
|
Retained losses
|
|
|
(26,584)
|
(17,470)
|
|
EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT
|
|
|
6,792
|
14,298
|
|
NON-CONTROLLING INTEREST
|
|
|
(43)
|
-
|
|
TOTAL EQUITY
|
|
|
6,749
|
14,298
|
Consolidated Statement of Cash Flows
For the year ended 30 June 2016
|
|
Notes
|
|
2016
|
2015
|
|
|
|
|
£'000
|
£'000
|
|
|
|
|
|
|
|
Net cash outflow from operating activities
|
5
|
|
(813)
|
(726)
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
Interest received
|
|
|
1
|
2
|
|
Other income
|
|
|
22
|
29
|
|
Deferred exploration expenditure
|
|
|
(2)
|
-
|
|
Acquisition of subsidiary, net of cash acquired
|
|
|
(669)
|
-
|
|
Loans to associates and subsidiaries
|
|
|
(496)
|
(225)
|
|
|
|
|
(1,144)
|
(194)
|
|
Cash flows from financing activities
|
|
|
|
|
|
Proceeds from issuance of ordinary shares
|
|
|
401
|
-
|
|
|
|
|
401
|
-
|
|
Decrease in cash
|
|
|
(1,556)
|
(920)
|
|
|
|
|
|
|
|
Cash and cash equivalents at beginning of year
|
|
|
1,679
|
2,435
|
|
Foreign exchange movement
|
|
|
138
|
164
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of year
|
|
|
261
|
1,679
|
Notes to the financial information
For the year ended 30 June 2016
|
1.
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Basis of Preparation
The audited financial information set out above, which incorporates the financial information of the Company and its subsidiary undertakings (the 'Group'), has been prepared using the historical cost convention and in accordance with International Financial Reporting Standards ('IFRS') including IFRS 6 'Exploration for and Evaluation of Mineral Resources', as adopted by the European Union ('EU') and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.
The audited financial information contained in this announcement does not constitute the Company's full financial statements for the year ended 30 June 2016 or 2015, but is derived from those financial statements, approved by the board of directors. The auditors' report on the 2016 financial statements was unqualified and did not contain any statement under section 498(2) or (3) of the Companies Act 2006 but did contain an 'emphasis of matter' paragraph relating to going concern. The full audited financial statements for the year ended 30 June 2016 will be delivered to the Registrar of Companies and filed at Companies House following the Company's forthcoming annual general meeting.
Going concern basis of accounting
The Group made a loss from all operations for the year after tax of £9.1 million (2015: £0.7 million) primarily due to the full impairment of the carrying value of the Mankayan Project of £8.3 million, had negative cash flows from operations and is currently not generating revenues. Cash and cash equivalents were £261,000 as at 30 June 2016 and on 19 September 2016 the Company raised approximately £1.19 million from an equity fundraising. An operating loss is expected in the 12 months subsequent to the date of the accounts and as a result the Company will probably need to raise funding to provide additional working capital to finance its ongoing activities especially if it decides to exercise some or all of its options over the platinum and gold licences in Colombia. Management has successfully raised money in the past, but there is no guarantee that adequate funds will be available when needed in the future.
There is a material uncertainty related to the conditions above that may cast significant doubt on the Group's ability to continue as a going concern and therefore the Group may be unable to realise its assets and discharge its liabilities in the normal course of business.
Based on the Board's assessment that the Company will be able to raise additional funds, if required, to meet its working capital and capital expenditure requirements, the Board have concluded that they have a reasonable expectation that the Group can continue in operational existence for the foreseeable future. For these reasons the Group continues to adopt the going concern basis in preparing the annual report and financial statements.
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|
2.
|
Impairment
|
|
|
|
2016
|
2015
|
|
|
|
|
£'000
|
£'000
|
|
|
|
|
|
|
|
|
|
Impairment loss on loan to associate
|
3,310
|
-
|
|
|
|
Impairment loss on investment in associate
|
4,968
|
-
|
|
|
|
|
8,278
|
-
|
|
|
|
|
|
|
|
|
|
The Mankayan project has been fully impaired due to the significant lingering uncertainty concerning any potential sale or JV of the project given the current political and tax environment in the Philippines.
|
|
|
3.
|
Loss per share
|
|
|
The basic and diluted loss per share have been calculated using the loss attributable to equity holders of the Company for the 12 months ended 30 June 2016 of £9,114,000 (2015: £683,000). The basic loss per share was calculated using a weighted average number of shares in issue of 108,279,905 (2015: 82,939,525).
The diluted loss per share has been calculated using a weighted average number of shares in issue and to be issued of 110,677,705 (2015: 85,337,325).
The diluted loss per share and the basic loss per share are recorded as the same amount, as conversion of share options decreases the basic loss per share, thus being anti-dilutive.
|
|
4.
|
Intangibles - options to acquire exploration licence
|
|
|
|
2016
|
2015
|
|
|
|
|
£'000
|
£'000
|
|
|
|
|
|
|
|
|
|
Opening balance
|
-
|
-
|
|
|
|
Acquisitions through business combinations - Colombian projects' rights over platinum and gold licence areas
|
1,620
|
-
|
|
|
|
Carried forward
at 30 June 2016
|
1,620
|
-
|
|
|
|
|
|
|
|
|
|
The options to acquire exploration licences represent an attractive opportunity to potentially generate long-term shareholder value via the creation of a low cost platinum and gold production operation outside of South Africa. Whilst platinum group metals prices are currently depressed, significant pressure on major platinum sources and depleting stock-piles should enable Bezant to realise potentially significant margins from the potential successful future development of such licence areas. The Board of Directors of Bezant has significant past experience of successfully developing world-class PGM group production sources with the Company's Non-Executive Chairman, Edward Nealon, having founded Aquarius Platinum Limited and Sylvania Resources Limited.
|
|
|
|
|
|
|
|
The directors have assessed the value of the intangible assets, and in their opinion, based on a review of the options over areas of interest, expected available funds and the opportunity to potentially create a low cost platinum and gold production operation, no impairment is necessary.
|
|
|
5.
|
Reconciliation of operating loss to net cash outflow from operating activities
|
|
|
|
2016
|
2015
|
|
|
|
|
£'000
|
£'000
|
|
|
|
|
|
|
|
|
|
Operating loss
|
(717)
|
(561)
|
|
|
|
|
|
|
|
|
|
Depreciation and amortisation
|
6
|
10
|
|
|
|
VAT refunds received
|
(22)
|
(29)
|
|
|
|
Foreign exchange gain
|
(146)
|
(164)
|
|
|
|
Decrease/(increase) in receivables
|
54
|
(8)
|
|
|
|
Increase/(decrease) in payables
|
12
|
26
|
|
|
|
Net cash outflow from operating activities
|
(813)
|
(726)
|
|
|
6.
|
Availability of Annual Report and Financial Statements
|
|
|
Copies of the Company's full Annual Report and Financial Statements are expected to be posted today to those shareholders who have elected to receive hardcopy shareholder communications from the Company and, once posted, will also be made available to download from the Company's website at www.bezantresources.com.
The Annual Report and Financial Statements will also be made available for inspection at the Company's registered office during normal business hours on any weekday. Bezant Resources Plc is registered in England and Wales with registered number 02918391. The registered office is at Level 6, Quadrant House, 4 Thomas More Square, London E1W 1YW.
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|
7.
|
Annual General Meeting
|
|
|
The Company's next Annual General Meeting ('AGM') will be held at 10.00 a.m. on Friday, 9 December 2016 and a formal Notice of AGM and proxy form will also be posted today to those shareholders who have elected to receive hard copy shareholder communications from the Company and can also be downloaded from the Company's website at www.bezantresources.com.
|