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Interim Results

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By LSE RNS

RNS Number : 2120S
Bezant Resources PLC
29 September 2017
 

29 September 2017

 

Bezant Resources Plc

("Bezant" or the "Company")

 

Interim Results for the Six Months Ended 30 June 2017

 

Bezant (AIM: BZT), the AIM quoted gold and platinum mining company, announces its unaudited interim results for the six months ended 30 June 2017.

 

Highlights:

 

Platinum and Gold Mining Project, Choco District, Colombia:

·      Recovered first gold and platinum metals, working closely with local services partner Exumax S.A.S ("Exumax")

·      Project's economics established

Rapidly establishing production economics for the FKJ-083 licence area, correlating the historic mining data from previous third party operations with current exploration and processing results

Independent analysis of production sensitivities via scoping study commissioned from INGEX Grupo Minero SAS ("INGEX") which reported estimated total production costs of US$768/oz for platinum and gold recoveries

 

·      Acquisition of environmentally friendly production capability

o   Acquired and mobilised to site a fully-equipped, purpose built modern mercury-free alluvial processing plant, being;

§ capable of processing up to 100m3 of material per hour (approximately 150 tonnes per hour); and

§ first modern plant of its kind to be utilised on the deposit

o   Secured full plant engineering blue prints, technical plans, schematics and data to enable Bezant to replicate and manufacture similar processing plants in Colombia

o   Commissioned the processing plant in June 2017 in preparation for first production in Q3 2017

Corporate:

·      £1.2m expenditure on the Choco platinum-gold project's development programme including the above mentioned plant acquisition and exercising of certain licence options

·      £1.0m raised before expenses in March 2017, through a placement of 100,000,000 new ordinary shares with certain new and existing investors, at a price of 1.0 pence per share

 

Post Period End

·      A further £585,000 raised (before expenses) in early July 2017 through a placement and subscription for, in aggregate, 68,823,529 new ordinary shares by certain new and existing investors, at a price of 0.85 pence per share

·      Approximately £160,000 of certain accrued unpaid director, senior management and consultancy fees and salaries satisfied via the issue of, in aggregate, 12,359,642 new ordinary shares at a price of 1.2976 pence per share in early August 2017 in order to conserve cash reserves within the Company and maximise the funds available for the group's  operations

·      In July 2017, Registro Unico de Comercializadores de Minerales ("RUCOM") was received from the Colombian National Mining Agency (ANM - Agencia Nacional de Mineria) enabling the sale of platinum and gold to regulated metals trading houses both in Colombia and internationally

·      Peterhouse Corporate Finance Limited appointed as a Broker to the Company 

·      Production commenced at the Choco Project

Extraction and processing on the FKJ-083 licence area from the lower-grade upper layers of  gravels, tailings and overburden

Sale achieved of first kilogramme of gold and platinum metals produced from the Choco Project

Pit development works to access the 'virgin' higher-grade lower level gravels for processing by mid-October 2017

·      Exploration programme ongoing on the HGE-082 licence area with respect to assessing the potential for future mining, involving test pitting and sampling activities, with results expected by Q4 2017 

 

Commenting today, Bernard Olivier, CEO of Bezant, said:

 

"During the period under review, we undertook the necessary preparations to enable the commencement of gold-platinum recovery operations at the group's wholly owned Choco Project in Western Colombia.  Following this solid ground work, involving the commitment of over £1 million to the project's operations  during the first half of 2017, Bezant is now successfully mining gold and platinum in Colombia. Our first precious metals have been sold and we are currently seeking to access the deeper levels of alluvial gravels where significantly higher grades are expected to be encounteredI look forward to providing further updates on our progress on the ground in due course."

For further information, please contact:

Bezant Resources Plc

Bernard Olivier

Chief Executive Officer

 

Laurence Read

Executive Director / Communications Officer

 

Strand Hanson Limited (Nomad)

James Harris / Matthew Chandler / James Dance

 

Peterhouse Corporate Finance Limited (Broker)

Lucy Williams / Duncan Vasey / Heena Karani

 

Beaufort Securities Limited (Broker)

Elliot Hance

 

or visit http://www.bezantresources.com

 

 

 

Tel: +61 40 894 8182

 

 

Tel: +44 (0)20 3289 9923

 

 

Tel: +44 (0)20 7409 3494

 

 

Tel: +44 (0)20 7469 0930 

 

 

Tel: +44 (0)20 7382 8300 

 

 

 

 

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.

 

 

Chairman's Statement

 

I am pleased to present the group's unaudited interim results for the six-month period ended 30 June 2017 and to report on the Company's ongoing activities to the date of this statement.  Reflecting our ongoing activities, the unaudited consolidated results for the six-month period ended 30 June 2017 show a loss after tax of £1,006,000 (31 December 2016: £1,180,000; 30 June 2016: £8,865,000).

 

The first half of 2017 saw everyone involved in Bezant's Choco Project focus entirely on the preparatory work required to enable commencement of gold and platinum production on site in Colombia. Working closely with experienced local operational partners, Exumax S.A.S. ("Exumax"), the Company has ensured that shareholder funds have been efficiently deployed into building cash flow from gold and platinum mining operations. This essential work culminated in our first commercial production of gold and platinum metals with initial sales being achieved in Q3 2017. Mining on this first licence area, in addition to building cash flow, is key to us better understanding the production profile and thereby refining our business model in order to roll out planned further production plants across the more than 2,600 licenced hectares, in which the Company is currently interested, covering the extensive gold-platinum placer fields in the Choco region, where platinum was first discovered in the 19th Century.  

 

The beginning of the year saw us working with Exumax to complete a series of surface and near-surface exploration activities on the FKJ-083 licence area. This area was previously mined by third parties between 2007 and 2012 and the Bezant-Exumax work programme focussed on correlating test open pit results with the historic mining and geological reports and platinum and gold recoveries. A large trial pit was completed over two phases with a total of 25,000m3 of material being excavated during the first stage alone.

 

Within the period, we also reported the results from a total of 105 samples of alluvial material collected and processed through the pilot sampling plant. Concentrates from this operation were subsequently treated and analysed through the Company's onsite, mercury free, platinum and gold recovery laboratory. Combined platinum and gold grades of over 300mg/m3 were achieved from shallow virgin platinum and gold bearing gravels. Although selected tailings' samples did return grades of over 100mg/m3 the average grade for the tailings sampled was 30mg/m3 which served to confirm and support the Company's view that treatment of the historic tailings dumps is likely to be uneconomic unless it forms part of the overburden located on virgin platinum and gold bearing gravels.

 

The grades achieved and test pitting analysis confirmed the historic third party reported grades and conditions encountered during historical mining operations and Bezant therefore proceeded to commission an independent cost analysis and scoping study on the project. This study was conducted by mining consultancy, INGEX Grupo Minero S.A.S., located in Medellin, Colombia, and its findings, announced in March 2017, supported our decision to commence production operations at Choco.

 

In March 2017, following completion of the abovementioned key workstreams, Bezant successfully raised £1m gross in order to fund certain option payments with respect to Mining Licences in Colombia, begin mine development and augment its working capital position.

 

Further to the positive recovery results from test pitting and the results of the independent scoping study, Bezant proceeded to exercise one of its existing options over two alluvial platinum and gold licences, namely FKJ-083 and HCA-082, in Colombia (the "Licences") (the "Option"). The Option was held by Bezant's wholly owned Colombian subsidiary, Ulloa Recursos Naturales SAS ("Ulloa"). Pursuant to the terms of the agreements relating to the acquisition of Ulloa's parent company, Leeward Islands Exploration LLC, in January 2016, the exercise price payable by Bezant to acquire the Licences was, in aggregate, US$300,000, with the first US$100,000 being paid within the period on serving the notice of exercise and the balance payable on or before 5 December 2017.

 

Having secured the Licences, Bezant then swiftly completed the acquisition of its first fully-equipped, purpose built, modern alluvial processing plant which was already situated in Colombia and ready for mobilisation to site, via the acquisition of Kellstown Investments Corp in early June 2017 for initial consideration comprising a cash payment of US$200,000 and the issue of 25 million new ordinary shares and deferred consideration of a further 15 million new ordinary shares payable when the plant has for 10 consecutive work days processed 900m3 of material per day.  The mercury-free alluvial processing plant is capable of processing up to 100m3 of material per hour (approximately 150 tonnes per hour) and is the first modern plant of its kind to be utilised on the deposit. As part of our plan to eventually operate multiple low cost plants, we also acquired all of the technical material and data to enable us to manufacture additional low cost plants within Colombia itself in the future.

 

Post the reporting period end, we entered into a rapid mobilisation and commissioning stage and, at the time of writing, we have successfully sold our first kilogramme of precious metals production from the Choco Project to a Colombian commodity trading house and expect to shortly commence mining of the higher-grade, virgin, lower level gravels. Ramp-up will continue throughout the last quarter of 2017 as we extract, process and analyse the results of the deeper level, higher-grade alluvial gravels and we look forward to providing further updates in due course.

 

 

Mr Edward Nealon

Non-Executive Chairman

 

28 September 2017

Group Statement of Comprehensive Income

For the six months ended 30 June 2017


Notes

Unaudited

Six months

ended

30 June

2017

£'000

Audited

Six Months ended

31 December 2016

£'000

Unaudited

Six months ended

30 June

2016

£'000






Continuing operations










Group revenue


-

-

-

 

Cost of sales


-

-

-






Gross profit/(loss)


-

-

-






Operating expenses


(1,009)

(1,027)

(525)

 

Group operating loss


(1,009)

(1,027)

(525)






Other income


3

2

-

Impairment

3

-

(155)

(8,278)

Share of Associates' loss


-

-  

(62)






Loss before taxation


(1,006)

(1,180)

(8,865)

 

Taxation


-  

-  

-






Loss for the period


(1,006)

(1,180)

(8,865)






Attributable to:

Owners of the Company


(1,006)

(1,172)

(8,849)

Non-controlling interest


-  

 (8)

(16)

 

 

2

(1,006)

(1,180)

(8,865)






Other comprehensive income:










Foreign currency reserve movement


23

(66)

339

Total comprehensive loss for the period


(983)

(1,246)

(8,526)






Attributable to:

Owners of the Company


(986)

(1,235)

(8,504)

Non-controlling interest


3

(11)

(22)

 

 


(983)

(1,246)

(8,526)






 

Loss per share (pence)





Basic and diluted

4

 (0.34)

 (0.67)

 (8.17)








 

Consolidated Statement of Changes in Equity

For the six months ended 30 June 2017


Share Capital

£'000

Share Premium

£'000

Shares to be issued

£'000

Other Reserves

£'000

Retained Losses

£'000

Non-Controll

ing interest

£'000

Total

Equity

£'000

Unaudited - six months ended 30 June 2017








Balance at 1 January 2017

410

33,227

-

991

(27,756)

(54)

6,818

Current period loss

-

-

-

-

(1,006)

-

(1,006)

Foreign currency reserve

-

-

-

20

-

3

23

Total comprehensive loss for the period

-

-

-

20

(1,006)

3

(983)

Proceeds from shares issued (net of expenses)

200

694

-

-

-

-

894

Warrants issued

-

-

-

8

-

-

8

Issue of ordinary shares related to business combination

50

221

-

-

-

-

271

Acquisition of subsidiary companies

-

-

163

-

-

-

163









 

Balance at 30 June 2017

660

34,142

163

1,011

(28,762)

(51)

7,171

 

Audited - six months ended 31 December 2016








Balance at 1 July 2016

274

32,048

-

1,054

(26,584)

(43)

6,749

Current period loss

-

-

-

-

(1,172)

(8)

(1,180)

Foreign currency reserve

-

-

-

(63)

-

(3)

(66)

Total comprehensive loss for the period

-

-

-

(63)

(1,172)

(11)

(1,246)

Proceeds from shares issued

 122

 1,031

-

-

-

-

 1,153

Issue of ordinary shares related to business combination

 14

148

-

-

-

-

 162









Balance at 31 December 2016

410

33,227


991

(27,756)

(54)

6,818

 

Unaudited - six months ended 30 June 2016








Balance at 1 January 2016

199

31,421

-

709

(17,735)

-

14,594

Current period loss

-

-

-

-

(8,849)

(16)

(8,865)

Foreign currency reserve

-

-

-

345

-

(6)

339

Total comprehensive loss for the period

-

-

-

345

(8,849)

(22)

(8,526)

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



 

Consolidated Balance Sheet

As at 30 June 2017




Unaudited

Audited

Unaudited




30

June

2017

31

December 2016

30

June

2016


Notes


£'000

£'000

£'000













ASSETS

 






Non-current assets






Plant and equipment

5


2,385

20

55

Intangible assets

6


316

1,834

1,620

Exploration and evaluation assets

7


4,789

4,790

Total non-current assets



7,490

6,644

6,465







Current assets






Trade and other receivables



121

73

115

Cash and cash equivalents



199

229

261

Total current assets



320

302

376







TOTAL ASSETS



7,810

6,946

6,841







LIABILITIES












Current liabilities






Trade and other payables



639

128

92

Total current liabilities



639

128

92







 

NET ASSETS



7,171

6,818

6,749







EQUITY






Share capital

8


660

410

274

Share premium

8


34,142

33,227

32,048

Shares to be issued

10


163

-

-

Share-based payment reserve



273

265

265

Foreign exchange reserve



746

726

789

Retained losses



(28,762)

(27,756)

(26,584)

EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT



7, 222

6,872

6,792

NON-CONTROLLING INTEREST



(51)

(54)

 

TOTAL EQUITY



7,171

6,818

6,749

 



 

Consolidated Statement of Cash Flows

For the six months ended 30 June 2017



Unaudited

Audited

Unaudited



Six

 months ended 30

 June

2017

Six months ended 31 December 2016

Six

months ended 30 June

2016


Notes

£'000

£'000

£'000






Net cash outflow from operating activities

9

(576)

 (950)

(525)






Cash flows used in investing activities





Other income


26

 24

15

Acquisition of plant and equipment


(2)

 (3)

-

Deferred exploration expenditure


-

 -

(2)

Option payments (net)


(234)

 (91)

33

Acquisition of subsidiary, net of cash acquired


(155)

 -

(669)

Loans to associates and subsidiaries


-

 (155)

(205)



(365)

 (225)

(828)

Cash flows from financing activities





Proceeds from issuance of ordinary shares (net of issue cost)


894

 1,118

-



894

 1,118

-

Decrease in cash


(47)

 (57)

(1,353)






Cash and cash equivalents at beginning of period


229

261

1,550

Foreign exchange movement


17

25

64






Cash and cash equivalents at end of period


199

229

261

 

 



 

Notes to the interim financial information

For the six months ended 30 June 2017

 

1.

Basis of preparation

The unaudited interim 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.  

 

These interim results for the six months ended 30 June 2017 are unaudited and do not constitute statutory accounts as defined in section 434 of the Companies Act 2006.  The financial statements for the six months ended 31 December 2016 have been delivered to the Registrar of Companies and the auditors' report on those financial statements was unqualified and contained an emphasis of matter pertaining to going concern. 

 

Going concern basis of accounting

The Group made a loss after tax from all operations for the six months ended 30 June 2017 of £1.0 million, had negative cash flows from operations and is currently not generating significant revenues. Cash and cash equivalents were £199,000 as at 30 June 2017.  An operating loss is expected in the 12 months subsequent to the date of these results and accordingly the Company will probably need to raise funding in addition to the £585,000 net of expenses raised in July 2017 to provide additional working capital to finance its on-going activities especially if it decides to exercise its remaining option over certain 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 this unaudited interim financial information.

 

2.

Segment reporting

For the purposes of segmental information, the operations of the Group are focused in three geographical segments, namely: the UK, Argentina and Colombia and comprise one class of business: the exploration, evaluation and development of mineral resources. The UK is used for the administration of the Company.

 

The Group's operating loss arose from its operations in the UK, Argentina and Colombia. 

 


For the six months ended 30 June 2017











 



UK

Argentina


Colombia

Total

 



£'000

£'000


£'000

£'000

 








 


Consolidated loss before tax

(487)

(33)


(486)

(1,006)

 


Included in the consolidated loss before tax are the following income/(expense) items:






 


Depreciation

(1)

(2)


-

(3)

 


Interest received

-

-


-

-

 


Foreign currency loss

(92)

-


(8)

(100)

 








 


Total Assets

88

4,830


2,892

7,810

 


Total Liabilities

(303)

(12)


(324)

(639)

 

 


For the six months ended 31 December 2016











 



UK

Argentina

Philippines

Colombia

Total

 



£'000

£'000

£'000

£'000

£'000

 








 


Consolidated loss before tax

(580)

(21)

(133)

(446)

(1,180)

 


Included in the consolidated loss before tax are the following income/(expense) items:






 


Depreciation

(1)

(2)

-

-

(3)

 


Interest received

-  

-

-

-

-  

 


Foreign currency gain

12

-

-  

2

14

 








 


Total Assets

 230

 4,824

 -  

 1,892

 6,946

 


Total Liabilities

(91)

(7)

-  

(30)

(128)

 

 


For the six months ended 30 June 2016











 



UK

Argentina

Philippines

Colombia

Total

 



£'000

£'000

£'000

£'000

£'000

 








 


Consolidated loss before tax

(8,618)

(23)

(59)

(165)

(8,865)

 


Included in the consolidated loss before tax are the following income/(expense) items:






 


Depreciation

(1)

(2)

-

-

(3)

 


Interest received

-

-

-

-

-

 


Foreign currency gain

62

-

-

-

62

 








 


Total Assets

 247

 4,863

 59

 1,672

 6,841

 


Total Liabilities

(70)

(3)

-  

(19)

(92)

 

 

3.

Impairment

Unaudited

Audited

Unaudited



Six months

ended 30

June

2017

Six months ended 31 December 2016

Six months

ended 30

June

2016



£'000

£'000

£'000







Impairment loss on loan to associate

-

 155

 3,310


Impairment loss on investment in associate

-

-

 4,968


 

 

-

155

8,278






 

4.

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 six months ended 30 June 2017 of £1,006,000 (six months ended 31 December 2016:  £1,172,000; six months ended 30 June 2016: £8,849,000).  The basic loss per share was calculated using a weighted average number of shares in issue of 298,892,115 (six months ended 31 December 2016: 175,167,279; six months ended 30 June 2016: 108,279,905).

 

The diluted loss per share has been calculated using a weighted average number of shares in issue and to be issued of 301,289,915 (six months ended 31 December 2016:  177,565,079; six months ended 30 June 2016: 110,677,705).

 

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.

 

5.

Plant and equipment



Unaudited

Audited

Unaudited

 



30

June

2017

31

December 2016

30

June

2016

 



£'000

£'000

£'000

 

5.1

Cost




 


Balance at beginning of period

95

139

139

 


Acquisitions through business combinations - Plant (note 8)

708

-

-

 


Transfer - Mine development from options (note 5)

1,439



 


Transfer - Mine development - Option exercised (note 5)

227

-

-

 


Additions - Equipment

2

3

-

 


Exchange differences

(10)

(47)

-

 


At end of period

2,461

95

139

 






 

5.2

Depreciation




 


Balance at beginning of period

75

84

81

 


Charge for the period

3

3

3

 


Exchange differences

(2)

(12)

-

 


At end of period

76

75

84

 






 


 

Net book value at end of period

2,385

20

55

 

 

6.

Intangible assets



Unaudited

Audited

Unaudited

 



30

June

2017

31

December 2016

30

June

2016

 



£'000

£'000

£'000

 

6.1

Options to acquire exploration licences




 


Balance at beginning of period

1,672

1,620

-

 


Acquisitions through business combinations - Colombian projects' rights over platinum and gold licence areas

-

-

1,620

 


Additions

-

91

-

 


Options acquired through business combinations transferred to Mine Development (note 4)

(1,439)

-

-

 


Contribution to option costs

(275)



 


Payment to exercise option

437



 


Transfer option exercised to Mine Development (note 4)

(227)



 


Exchange differences

(14)

(39)

-

 


Carried forward at end of period

154

1,672

1,620

 






 

6.2

Intellectual property rights over proprietary geological data




 


Balance at beginning of period

162

-

-

 


Acquisitions through business combinations - Rights over geological information and other data

-

162

-

 


Carried forward at end of period

162

162

-

 






 


 

Total intangibles

316

1,834

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 PGM prices are currently depressed, significant pressure on major platinum sources and depleting stock-piles should enable Bezant to realise potentially significant margins from the 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 option over the FKJ-083 and HCA-082 licence areas was exercised during the six months ended 30 June 2017.

 






 


The intellectual property rights represent proprietary geological information and other data utilised in exploration activities.

 






 


The directors have assessed the value of these intangible assets, and in their opinion, based on a review of the remaining option over licence acreage of interest, expected available funds and the opportunity to potentially create a suitable low cost platinum and gold production operation, no impairment is necessary.

 

 

7.

Exploration and evaluation assets



Unaudited

Audited

Unaudited

 



30

June

2017

31

December 2016

30

June

2016

 



£'000

£'000

£'000

 






 


Balance at beginning of period

4,790

4,790

4,788

 


Additions

-

-

2

 


Foreign exchange

(1)

-

-

 


Carried forward

at end of period

4,789

4,790

4,790

 

 

The amount of capitalised exploration and evaluation expenditure relates to 11 licences comprising the Eureka Project which are located in north-west Jujuy near to the Argentine border with Bolivia and are formally known as Mina Eureka, Mina Eureka II, Mina Gino I, Mina Gino II, Mina Mason I, Mina Mason II, Mina Julio I, Mina Julio II, Mina Paul I and Mina Paul II, covering, in aggregate, an area in excess of approximately 5,500 hectares and accessible via a series of gravel roads. All licences remains valid and in good standing.

 

The directors have assessed the value of the intangible assets, and in their opinion, based on a review of the expiry dates of licences, expected available funds and the intention to continue exploration and evaluation, no impairment is necessary.

 

8.

Share capital



Unaudited

Audited

Unaudited

 



30

June

2017

31

December 2016

30

June

2016

 



£'000

£'000

£'000

 


Number




 


Authorised




 


5,000,000,000 ordinary shares of 0.2p each

10,000

10,000

10,000

 






 


Allotted, called up and fully paid




 


As at beginning of the period

410

274

199

 


Share subscription

200

 122

-

 


Acquisition of subsidiary

50

 14

75

 


 

As at end of period

660

410

274

 






 



Number of shares 30 June 2017

Number of shares 31 December 2016

Number of shares 30 June 2016

 


Ordinary share capital is summarised below:




 


As at beginning of the period

204,953,507

136,833,162

99,527,025

 


Share subscription

100,000,000

 59,450,000

-

 


Shares issued to directors*

-

 1,468,600

-

 


Acquisition of subsidiary

25,000,000

 7,201,745

37,306,137

 


 

As at end of period

329,953,507

204,953,507

136,833,162

 






 


* In satisfaction of certain accrued directors' fees and salaries which had been unpaid since 1 June 2016, Bezant issued 1,468,600 new ordinary shares of 0.2 pence each in the Company on 27 September 2016.  The conversion was made at the volume weighted average price ("VWAP") of the Company's shares over the period the fees were outstanding. The VWAP over the period of approximately 2.5 pence per share represented a premium of approximately 5 per cent. to the closing mid-market share price of 2.38 pence on 27 September 2016. In total, unpaid fees of, in aggregate, £36,715 were converted into new ordinary shares. 

 






 



Unaudited

Audited

Unaudited

 



30

June

2017

31

December

2016

30

June

2016

 



£'000

£'000

£'000

 


The share premium was as follows:




 


As at beginning of period

33,227

32,048

31,421

 


Share subscription

800

 1,102

-

 


Share issue costs

(106)

 (71)

-

 


Acquisition of subsidiary

221

148

627

 


 

As at end of period

34,142

33,227

32,048

 






 


Each fully paid ordinary share carries the right to one vote at a meeting of the Company. Holders of shares also have the right to receive dividends and to participate in the proceeds from sale of all surplus assets in proportion to the total shares issued in the event of the Company winding up.

 

 

9.

Reconciliation of operating loss to net cash outflow from operating activities






Unaudited

Audited

Unaudited



Six

 months

 ended 30 June

2017

Six

months ended 31 December 2016

Six

 months

 ended 30 June

2016



£'000

£'000

£'000







Operating loss

(1,009)

(1,027)

(525)







Depreciation and amortisation

3

3

3


VAT refunds received

(26)

 (24)

 (15)


Foreign exchange loss/(gain)

100

 (14)

 (62)


Share option expense

8

-

-


(Decrease)/increase in receivables

(40)

45

77


Increase in payables

388

 67

(3)


 

Net cash outflow from operating activities

(576)

 (950)

 (525)

 

10.

Acquisition of subsidiaries


On 31 May 2017, the Company signed an agreement to acquire a Panamanian special purpose vehicle, Kellstown Investments Corp ("Kellstown") for a cash consideration of US$200,000 and initial equity consideration comprising the issue of 25 million new ordinary shares of 0.2 pence each in the capital of the Company on Completion. Deferred consideration comprising of a further 15 million Ordinary Shares will be payable when the plant being acquired has for 10 consecutive scheduled work days processed 900m3 of material per day.  Kellstown via its wholly owned subsidiary owns both a processing plant and mobile test plant and certain other mining equipment which will be utilised in mining operations on the Company's FKJ-083 mining licence in Colombia. 

 


The acquisition-date fair values of the assets acquired and liabilities assumed and the consideration transferred were as follows:

 




Acquisition




£'000






Plant and equipment (note 4)


708


Trade and other receivables


8


Trade and other payables


 (127)


 

Net assets and liabilities acquired


589






Consideration:




- Issue of Bezant ordinary shares


(271)


- Deferred contingent consideration


(163)


- Cash paid


(155)


Total consideration transferred


(589)

 


The plant and equipment was revalued to fair value at the date of acquisition.  The excess amount paid for Kellstown and its subsidiary undertakings over the aggregate fair value of their separable net assets and liabilities has been attributed to the plant.

 

11.

Subsequent events


As announced on 5 July 2017, the Company raised, in aggregate, approximately £585,000 (approximately US$754,650) before expenses, through a placement, via Beaufort Securities Limited  and Peterhouse Corporate Finance Limited as well as a subscription, with certain existing and new institutional and other investors, of, in aggregate, 68,823,529 new ordinary shares of 0.2 pence each in the capital of the Company at a price of 0.85 pence per share.

 

As announced on 7 August 2017, in order to conserve its cash reserves, the Company issued, in aggregate, 12,359,642 new ordinary shares of 0.2 pence each in the capital of the Company at an issue price of 1.2976 pence per share in satisfaction of certain accrued directors' fees and salaries which had been unpaid from 1 October 2016 to 31 July 2017 as well as certain unpaid senior management and consultancy fees and salaries within the same period, which, in aggregate totalled £160,378. 

 

12.

Availability of Interim Report


A copy of these interim results will be available from the Company's registered office during normal business hours on any weekday at Level 6, Quadrant House, 4 Thomas More Square, London E1W 1YW and can also be downloaded from the Company's website at www.bezantresources.com. Bezant Resources Plc is registered in England and Wales with company number 02918391.

 

INDEPENDENT REVIEW REPORT BY THE AUDITORS

TO BEZANT RESOURCES PLC

 

 

 

Introduction

We have been engaged by the Company to review the condensed financial information in the interim results for the six months ended 30 June 2017 which comprises the Group Statement of Comprehensive Income, the Group Statement of Changes in Equity, the Group Balance Sheet, the Group Cash Flow Statement and the related notes.  We have read the other information contained in the interim results and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

 

Directors' Responsibilities

The interim results are the responsibility of, and have been approved by, the directors. The directors are responsible for preparing the interim results in accordance with the AIM Rules for Companies.

 

As disclosed in note 1, the annual financial statements of the Group will be prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in the interim results has been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting, as adopted by the European Union.

 

Our Responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the interim results based on our review.

 

Scope of review

We conducted our review in accordance with the International Standard on Review Engagements (UK and Ireland) 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity, issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

Emphasis of matters Going concern

We have considered the adequacy of the going concern disclosures made in note 1 to the financial statements concerning the Group's ability to continue as a going concern. The Group incurred an operating loss of £1m during the period ended 30 June 2017 and is still incurring losses. As discussed in note 1, the Group has raised £585,000 before expenses post period end but will need to raise further funds in order to meet its budgeted operating costs. These conditions, along with other matters discussed in note 1 indicate the existence of a material uncertainty which may cast significant doubt about the Group's ability to continue as a going concern. The interim results do not include the adjustments (such as impairment of assets) that would result if the Group were unable to continue as a going concern.

 

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed financial statements in the interim results for the six months ended 30 June 2017 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the AIM Rules for Companies.

 

 

 

UHY Hacker Young LLP

Chartered Accountants

Registered Auditors

London

 

28 September 2017


This information is provided by RNS
The company news service from the London Stock Exchange
 
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