EURASIA MINING PLC

Quarterly Report • Sep 29, 2015

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RNS Number : 6025A

Eurasia Mining PLC

29 September 2015

Eurasia Mining plc

Interim Results

for the six months ended

30 June 2015

Chairman's Statement

Dear Shareholder,

The last six months have proved to be the most important in the development of the Company.

For mineral exploration companies, the focus is on the discovery of mineral deposits, undertaking work to highlight commercial economics and then progressing assets through the relevant approvals process leading to mine construction and the generation of revenues and profitability.  At Eurasia, we have two projects that illustrate how projects at different stages can add value to shareholders in mineral companies.

At West Kytlim, we are moving from exploration to mining and are planning to produce Platinum in 2016. However management and the board are also excited by the discoveries identified at our Monchetundra project in Kola, northwest Russia. This excitement is based on the results of patient exploration work, which is being added to further at this time, as announced in August 2015.

Our work at both projects has not gone unnoticed and as also announced previously, interest has been shown by third parties in the Monchetundra Project.  We are working with all interested parties and any updates will be notified in due course.

We would like now to outline specific project developments.

Monchetundra

The Company restarted exploration and development studies on the West Nittis area within the Monchetundra licence in August 2015. This area had seen the discovery by Eurasia of near-surface high-grade platinum and palladium as a result of 2010 drilling campaign confirmed by further drilling in 2013, recently described as world-class discoveries by the Chief Geology Officer of Norilsk Nickel.

The results confirmed the discovery of "Hanging Wall" Copper-Platinum Group Metal, (copper-PGM) type ore. This style of mineralization resembles similar ores previously mined in the region, albeit with high-grade base metals rather than PGMs. A second discovery of stratiform "Footwall" PGM mineralization in the same target area has the potential, combined with the Hanging Wall target, to become a significant economic resource. The current work underway is aiming to confirm this model.

In line with the approach undertaken at its other project at West Kytlim in the Urals, the Company intends to submit a feasibility study to the government agency Rosnedra in order to seek the award of a Discovery Certificate.  It is expected that the submission will happen late 2015 or early 2016, and further announcements will be made if this progresses.

West Kytlim

In June this year, the Ministry of Natural Resources ("MNR") approved the Company's application for a Mining Licence at West Kytlim and shortly afterwards in early July the Prime Minister Dmitry Medvedev confirmed the award of a Mining Licence of 21.5 square kilometres at West Kytlim in the Urals.

The licence is granted to Eurasia's local subsidiary on the basis of first discovery and includes the rights for extraction of platinum and gold. RosNedra, the licencing agency, has informed the Company on the issue of the formal licence, the one-off lump-sum payment due to the government, to be paid within 30 days of registration of the licence, is 2,126,000 roubles or approximately £24,000. 

This approval and receipt of the licence enables Eurasia to shift from exploration into design, development and platinum production.  We believe such platinum production will generate the revenues and margin that will allow the Company to move toward self-financing status and deliver the value we have been promising for some time to shareholders.

The next stage is to complete our detailed development plan for West Kytlim, a summary of which is to be submitted to the ministry for subsoil use once the formal licence documentation is issued.  Work is well advanced on this plan, which includes details of the layout for first production and the optimal scheduling of the development of the reserves.

This conservative approach, which minimizes capital exposure, would see development of the project phased over 3 years building to full production.

Alternatively, if sufficient capital could be provided without shareholder dilution, there is an economic case to be made for an accelerated development after a year of expansion of reserves by conversion of further resources.

At present, work is advancing to allow both scenarios to be considered into early 2016 and in either case, first Platinum production is targeted for Summer 2016.

In conclusion, your board is confident that we are starting to see the fruits of the Company's hard work, maintained through a period of great difficulties for the mining industry. We have survived and made progress through this period of hardship and believe we are now positioned to strengthen the Company and move towards becoming a platinum producer. On behalf of the board and management I thank you for your support and look forward to returning value in the near future.

Michael Martineau

Chairman

Enquiries:

Eurasia Mining Plc

Christian Schaffalitzky/Michael de Villiers

+44 (0)207 932 0418

WH Ireland Limited

Katy Mitchell/Liam Gribben

+44 (0)161 832 2174

Beaufort Securities

Elliot Hance

+44 (0)207 382 8300

Loeb Aron

John Beresford-Peirse

+44 (0)207 628 1128

Condensed consolidated statement of comprehensive income

for the six months ended 30 June 2014

	Note	6 months to 30 June	12 months to 31 December	6 months to 30 June
		2015	2014	2014
		(unaudited)	(audited)	(unaudited)
Revenue		-	3,640	3,640
Administrative costs		(334,365)	(565,628)	(244,397)
Reversal of loss on revised period of repayment of the loan made to joint venture	5	-	921,184	-
Finance income		-	258	258
Other gains and losses		10,848	(861,954)	(43,201)
Loss before tax		(323,517)	(502,500)	(283,700)
Income tax expense		-	-	-
Loss for the period		(323,517)	(502,500)	(283,700)
Other comprehensive (loss)/income:
Items that will not be reclassified subsequently to profit and loss:
NCI share of foreign exchange differences on translation of foreign operations		(6,202)	120,409	(8,305)
Items that will be reclassified subsequently to profit and loss:
Available for sale financial assets		-	-	-
- current year gain/(losses)		-	-	(7,108)
Parents share of foreign exchange differences on translation of foreign operations		7,366	375,560	33,857
Other comprehensive income for the period, net of tax		1,164	495,969	18,444
Total comprehensive loss for the period		(322,353)	(6,531)	(265,256)
Loss for the period attributable to:
Equity holders of the parent		(341,709)	95,265	(283,626)
Non-controlling interest		18,192	(597,765)	(74)
		(323,517)	(502,500)	(283,700)
Total comprehensive loss for the period attributable to:
Equity holders of the parent		(334,343)	470,825	(242,294)
Non-controlling interest		11,990	(477,356)	(8,379)
		(322,353)	(6,531)	(265,256)
Basic profit/(loss) (pence per share)		(0.03)	0.01	(0.03)
Basic and diluted profit/(loss) (pence per share)		(0.03)	0.01	(0.03)

Condensed consolidated statement of financial position

as at 30 June 2014

	Note	At 30 June	At 31 December	At 30 June
		2015	2014	2014
		(unaudited)	(audited)	(unaudited)
ASSETS
Non-current assets
Property, plant and equipment	4	27,194	27,599	24,601
Intangible assets	5	3,423,112	3,276,976	-
Other financial assets	6	382,952	387,637	3,356,311
Total non-current assets		3,833,258	3,692,212	3,380,912
Current assets
Inventories		207	301	781
Trade and other receivables		185,780	170,332	41,598
Other financial assets			-	16,142
Cash and bank balances		352,067	224,863	77,180
Total current assets		538,054	395,496	135,701
Total assets		4,371,312	4,087,708	3,516,613
EQUITY
Capital and reserves
Issued capital	7	23,809,404	23,179,780	22,327,527
Reserves	7	3,651,572	3,644,206	3,295,395
Accumulated losses		(22,653,643)	(22,311,934)	(22,690,825)
Equity attributable to equity holders of the parent		4,807,333	4,512,052	2,932,097
Non-controlling interest		(580,771)	(592,761)	253,568
Total equity		4,226,562	3,919,291	3,185,665
LIABILITIES
Current liabilities
Trade and other payables		144,750	168,417	330,948
Total current liabilities		144,750	168,417	330,948
Total liabilities		144,750	168,417	330,948
Total equity and liabilities		4,371,312	4,087,708	3,516,613

Condensed statement of changes in equity

for the six months ended 30 June 2014

		Attributable to owners of the parent
	Note	Share capital	Share premium	Deferred shares	Other reserves	Translation reserve	Accumulated losses	Total attributable to owners of parent	Non-controlling interest	Total equity
Balance at 1 January 2014		965,469	14,336,575	7,025,483	3,939,141	(670,495)	(22,407,199)	3,188,974	261,947	3,450,921
Transaction with owners		-	-	-	-	-	-	-	-	-
Loss for the period		-	-	-	-	-	(283,626)	(283,626)	(74)	(283,700)
Other comprehensive loss
Fair value loss on available for sale financial assets		-	-	-	(7,108)	-	-	(7,108)	-	(7,108)
Exchange differences on translation of foreign operations		-	-	-	-	33,857	-	33,857	(8,305)	25,552
Total comprehensive income		-	-	-	(7,108)	33,857	(283,626)	(256,877)	(8,379)	(265,256)
Balance at 30 June 2014		965,469	14,336,575	7,025,483	3,932,033	(636,638)	(22,690,825)	2,932,097	253,568	3,185,665

Condensed statement of changes in equity

for the six months ended 30 June 2015

		Attributable to owners of the parent
	Note	Share capital	Share premium	Deferred shares	Other reserves	Translation reserve	Accumulated losses	Total attributable to owners of parent	Non-controlling interest	Total equity
Balance at 1 January 2014		1,108,220	15,046,077	7,025,483	3,939,141	(294,935)	(22,311,934)	4,512,052	(592,761)	3,919,291
Issue of ordinary share capital for cash		118,754	534,395					653,149	-	653,149
Share issue cost			(23,525)					(23,525)	-	(23,525)
Transaction with owners		118,754	510,870	-	-	-	-	629,624	-	629,624
Loss for the period		-	-	-	-	-	(341,709)	(341,709)	18,192	(323,517)
Other comprehensive loss
Exchange differences on translation of foreign operations		-	-	-	-	7,366	-	7,366	(6,202)	1,164
Total comprehensive income		-	-	-	-	7,366	(341,709)	(334,343)	11,990	(322,353)
Balance at 30 June 2014		1,226,974	15,556,947	7,025,483	3,939,141	(287,569)	(22,653,643)	4,807,333	(580,771)	4,226,562

Condensed consolidated statement of cash flows

for the six months ended 30 June 2014

		6 months to	12 months to	6 months to
		30 June	31 December	30 June
		2015	2014	2014
		(unaudited)	(audited)	(unaudited)
Cash flows from operating activities
Loss for the period		(323,517)	(502,500)	(283,700)
Adjustments for:
Depreciation and amortisation of non-current assets:
- Fixed assets		1,107	1,697	548
(Gain)/loss on revised period of repayment of the loan made to joint venture		-	(921,184)	-
(Gain)/loss on disposal of investments		-	168,942	-
Net foreign exchange (profit)/loss		(10,848)	2,020,368	43,201
Investment revenue recognised in profit and loss		-	(258)	(258)
Bargain purchase gain		-	(1,327,356)	-
		(333,258)	(560,291)	(240,209)
Movements in working capital
(Increase)/decrease in inventories		(14,571)	118,016	187
Decrease in trade and other receivables		94	667	7,328
(Decrease)/increase in trade and other payables		(23,620)	(7,101)	207,056
Cash outflow from operations		(371,355)	(448,709)	(25,638)
Net cash used in operating activities		(371,355)	(448,709)	(25,638)
Cash flows from investing activities
Proceeds from sale of investment securities		-	11,750	-
Advanced to joint venture		-	(257,615)	(257,615)
Payments for property, plant and equipment		(633)	-	-
Payments for other intangible assets		(127,818)	(228,512)	-
Net cash inflow on acquisition of subsidiary		-	23,217	-
Interest received		-	258	258
Net cash used in investing activities		(128,451)	(450,902)	(257,357)
Cash flows from financing activities
Proceeds from issues of equity shares		629,624	852,253	-
Net cash generated by financing activities		629,624	852,253	-
Net increase/(decrease) in cash and cash equivalents		129,818	(47,358)	(282,995)
Effects of exchange rate changes on the balance of cash held in foreign currencies		(2,614)	(89,684)	(1,730)
Cash and cash equivalents at the beginning of period		224,863	361,905	361,905
Cash and cash equivalents at the end of the period		352,067	224,863	77,180

Selected notes to the condensed consolidated financial statements

for the six months ended 30 June 2015

1. General information

Eurasia Mining plc (the "Company") is a public limited company incorporated and domiciled in Great Britain with its registered office and principal place of business at 2nd Floor, 85-87 Borough High Street, London SE1 1NH. The Company's shares are listed on the Alternative Investment Market of the London Stock Exchange. The principal activities of the Company and its subsidiaries (the "Group") are related to the exploration for and development of platinum group metals, gold and other minerals in Russia.

The financial information set out in these condensed interim consolidated financial statements (the "Interim Financial Statements") do not constitute statutory accounts as defined in Section 435 of the Companies Act 2006. The Group's statutory financial statements for the year ended 31 December 2014, prepared under International Financial Reporting Standards (the "IFRS"), have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified. The report did not contain a statement under Section 498(2) of the Companies Act 2006.

2. Basis of preparation

The Group prepares consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) ,as endorsed by the European Union (EU). These condensed consolidated interim financial statements for the period ended 30 June 2015 have been prepared by applying the recognition and measurement provisions of IFRS and the accounting policies adopted in the audited accounts for the year ended 31 December 2014.

These Interim Financial Statements have been prepared under the historical cost convention.

The accounting policies have been applied consistently throughout the Group for the purposes of preparation of these condensed consolidated interim financial statements

The Interim Financial Statements are presented in Pounds Sterling (£), which is also the functional currency of the parent company. 

3. Accounting policies

The Interim Financial Statements have been prepared in accordance with the accounting policies adopted in the Group's last annual financial statements for the year ended 31 December 2014.

4. Property, plant and equipment

		30 June	31 December	30 June
		2015	2014	2014
		£	£	£
Net book value at the beginning of period		27,599	25,558	25,558
Additions		633	-	-
Acquisition through business combinations		-	9,690	-
Depreciation		(1,107)	(1,697)	(548)
Exchange differences		69	(5,952)	(409)
Net book value at the end of period		27,194	27,599	24,601

5. Intangible assets

		30 June	31 December	30 June
		2015	2014	2014
		£	£	£
Net book value at the beginning of period		3,276,976	-	-
Additions		127,818	228,512	-
Acquisition through business combinations		-	4,652,378	-
Exchange differences		18,318	(1,603,914)	-
Net book value at the end of period		3,423,112	3,276,976	-

6. Other financial assets

		30 June	31 December	30 June
		2015	2014	2014
Loan to joint venture		-	-	3,002,817
Advances to acquire interest in uranium project		382,952	387,637	353,494
		382,952	387,637	3,356,311

Advances to acquire interest in uranium project represent payment of $602,000 made in 2011 towards acquisition of 55% interest in the Kamushanovsky uranium project in Kyrgyzstan.

7. Share capital

		30 June	31 December	30 June
		2015	2014	2014
Issued ordinary shares with a nominal value of 0.1p:
Number		1,226,974,422	1,108,219,874	965,468,701
Nominal value (£)		1,226,974	1,108,220	965,469

Fully paid ordinary shares carry one vote per share and carry the right to dividends.

Issued deferred shares with a nominal value of 4.9 p:
Number		143,377,203	143,377,203	143,377,203
Nominal value (£)		7,025,483	7,025,483	7,025,483

Deferred shares have the following rights and restrictions attached to them:

- they do not entitle the holders to receive any dividends and distributions;

- they do not entitle the holders to receive notice or to attend or vote at General Meetings of the Company;

- on return of capital on a winding up the holders of the deferred shares are only entitled to receive the amount paid up on such shares after the holders of the ordinary shares have received the sum of 0.1p for each ordinary share held by them and do not have any other right to participate in the assets of the Company.

The increase in the Company's issued share capital during the reporting period occurred as follows:

Ordinary shares		Number of shares	Share capital	Share premium
			£	£
Balance at 1 January 2014		1,108,219,874	1,108,220	15,046,077
Share placing for cash		118,754,548	118,754	534,395
Cost of issue of shares		-	-	(23,525)
Balance at 30 June 2014		1,226,974,422	1,226,974	15,556,947
Deferred shares		Number of deferred shares	Deferred share capital
			£
Balance at 1 January and 30 June 2013		143,377,203	7,025,483

7. Reserves

		30 June	31 December	30 June
		2015	2014	2014
		£	£	£
Capital redemption reserve		3,539,906	3,539,906	3,539,906
Foreign currency translation reserve		(287,569)	(294,935)	(636,638)
Share-based payment reserve		399,235	399,235	399,235
		3,651,572	3,644,206	3,295,395

The capital redemption reserve was created as a result of a share capital restructuring in earlier years. There is no policy of regular transactions affecting the capital redemption reserve.

The foreign currency translation reserve represents exchange differences relating to the translation from the functional currencies of the Group's foreign subsidiaries into GBP.

The share-based payments reserve represents a reserve arising on the grant of share options to employees under the employee share option plan.

This information is provided by RNS

The company news service from the London Stock Exchange

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