PEMBRIDGE RESOURCES PLC

Annual / Quarterly Financial Statement • May 17, 2021

National Storage Mechanism | Additional information

RNS Number : 8719Y

Pembridge Resources plc

17 May 2021

17 May 2021

2020 Financial Statements Released

London, United Kingdom - Pembridge Resources plc (LSE: PERE) ("Pembridge" or the "Company") is pleased to announce its annual report and consolidated financial statements for the year ended 31st December 2020.

On 17 May 2021 the Board of Directors of the Company approved the Annual Report and Consolidated Financial Statements for the year ended 31 December 2020.  During the year the Group made a loss of US$27,275,000 (2019 - loss of US$13,087,000).  The operating loss of $24,296,000 (2019: $11,818,000) comprised the mark-to-market revaluation of the Company's liability to Capstone of £9,369,000 (2019: exceptional expenses from the Minto acquisition of $2,347,000), administrative costs of the Company of $1,585,000 (2019: $3,049,000) and the loss from Minto of $13,342,000 (2019 post-acquisition: 3,049,000) which reflect the early stage of operations since re-starting in late 2019 and the challenges of 2020, including low copper prices and the staff quarantine and similar requirements caused by Covid-19, which are keeping the Minto mine safe but increased costs and affected efficiency.

The financial statements are available in pdf form on the Company's website using the link below. 

https://www.pembridgeresources.com/investors/financial-reports-and-presentations

The Company's Annual General Meeting will be held on 24 June 2021.  The meeting will not be open to shareholders and voting will be by proxy only, following government guidelines related to the Covid-19 pandemic. 

Extracts from the consolidated financial statements follow.

Gati Al-Jebouri, Chief Executive Officer and Chairman of the Board of Pembridge said:

"These results reflect 2020 being a year in which the Minto team developed the mine and laid the groundwork for future success, despite the unexpected challenges that they faced in the year from the Covid-19 pandemic and a low copper price.  We are now seeing the benefit of this work in 2021 and the recently announced result of the 43-101 Preliminary Economic Assessment Technical Report shows the long-term potential and value of the investment in Minto."

Cautionary Statement

This News Release includes certain "forward-looking statements" which are not comprised of historical facts. Forward-looking statements include estimates and statements that describe the Company's future plans, objectives or goals, including words to the effect that the Company, or management, expects a stated condition or result to occur. Forward-looking statements may be identified by such terms as "believes", "anticipates", "expects", "estimates", "may", "could", "would", "will", or "plan". Since forward-looking statements are based on assumptions and address future events and conditions, by their very nature they involve inherent risks and uncertainties. Although these statements are based on information currently available to the Company, the Company provides no assurance that actual results will meet management's expectations. Risks, uncertainties and other factors involved with forward-looking information could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information. Forward-looking information in this news release includes, but is not limited to, the Company's intentions regarding its objectives, goals or future plans and statements. Factors that could cause actual results to differ materially from such forward-looking information include, but are not limited to, the Company's ability to predict or counteract the potential impact of COVID-19 coronavirus on factors relevant to the Company's business, failure to identify additional mineral resources, failure to convert estimated mineral resources to reserves with more advanced studies, the inability to eventually complete a feasibility study which could support a production decision, the preliminary nature of metallurgical test results may not be representative of the deposit as a whole, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, political risks, uncertainties relating to the availability and costs of financing needed in the future, changes in equity markets, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of projects, capital, operating and reclamation costs varying significantly from estimates and the other risks involved in the mineral exploration and development industry, and those risks set out in the Company's public documents. Although the Company believes that the assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such information, which only applies as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law.

ENDS

NOTES TO EDITORS

About Pembridge Resources plc

Pembridge is a mining company that is listed on the standard segment of the Official List of the FCA and trading on the main market for listed securities of London Stock Exchange plc. Pembridge has an investment in Minto Explorations Ltd, a British Columbia incorporated business operating the Minto mine in Yukon, Canada.

Enquiries:

Pembridge Resources plc:                                                              +44 (0)20 7917 2968

Gati Al-Jebouri, Chief Executive Officer and Chairman of the Board

David James, Chief Financial Officer

Brandon Hill Capital - United Kingdom:                                         +44 (0)20 3463 5016

Jonathan Evans

Consolidated statement of comprehensive income

For the year ended 31 December 2020

	Year ended		Year ended
	31 December 2020		31 December 2019
	US$'000		US$'000
Revenue from contracts with customers	58,278		12,398
Production costs	(62,542)		(14,739)
Mark-to-market revaluation of concentrate receivable	647		-
Royalties	(308)		(204)
Depreciation and amortisation	(8,381)		(3,459)
Administrative, legal and professional expenses	(2,036)		(3,110)
Exceptional items - acquisition and re-admission costs	-		(2,347)
- revaluation of Capstone liability	(9,369)		-
Foreign exchange gain / (loss)	(585)		(357)
Operating loss	(24,296)		(11,818)
Finance income	22		-
Finance cost	(2,895)		(1,295)
Loss before income tax	(27,169)		(13,113)
Income tax	(106)		26
Loss for the year	(27,275)		(13,087)
Other comprehensive income	(175)		936
Total comprehensive income for the year	(27,450)		(12,151)
Loss is attributable to:
Non-controlling interest	(12,544)		(5,024)
Shareholders of the Company	(14,731)		(8,063)
Loss for the year	(27,275)		(13,087)
Total comprehensive income is attributable to:
Non-controlling interest	(12,546)		(4,400)
Shareholders of the Company	(14,904)		(7,751)
Total comprehensive income for the year	(27,450)		(12,151)
	Year ended		Year ended
Earnings per share expressed in US cents	31 December 2020		31 December 2019
Basic and diluted loss per share attributable to the equity holders of the Company	(20.8c)		(33.5c)

Consolidated statement of financial position

As at 31 December 2020

	31 December 2020		31 December 2019
	US$'000		US$'000
Non-current assets
Property, plant and equipment	56,798		50,207
Intangible assets	-		394
Long-term deposits	7,059		4,040
Total non-current assets	63,857		54,641
Current assets
Inventories	4,401		5,710
Trade and other receivables	5,672		8,610
Cash and cash equivalents	415		964
Total current assets	10,488		15,284
Total assets	74,345		69,925
Non-Current liabilities
Borrowings	(15,470)		(10,631)
Lease liabilities	(2,835)		(2,734)
Reclamation and closure cost provision	(25,286)		(22,438)
Deferred consideration due to Capstone	-		(4,305)
Deferred tax liabilities	(388)		(270)
Total non-current liabilities	(43,979)		(40,378)
Current liabilities
Trade and other payables	(16,253)		(8,736)
Borrowings	(1,600)		-
Lease liabilities	(4,764)		(2,899)
Deferred consideration due to Capstone	(18,571)		(4,897)
Total current liabilities	(41,188)		(16,532)
Total liabilities	(85,167)		(56,910)
Net assets/(liabilities)	(10,822)		13,015
Equity
Share capital	965		825
Share premium	9,222		8,900
Capital redemption reserve	1,011		1,011
Translation reserve	139		312
Other reserve	46		369
Retained deficit	(30,516)		(13,465)
Equity attributable to shareholders of the Company	(19,133)		(2,048)
Non-controlling interests	8,311		15,063
Total equity	(10,822)		13,015

Consolidated statement of changes in equity

For the year ended 31 December 2020

	Share capital	Share premium	Capital redemption reserve	Translation / Other reserve	Retained deficit	Total	Non-controlling interest	Total Equity
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000
Balance at 1 January 2020	825	8,900	1,011	681	(13,465)	(2,048)	15,063	13,015
Loss for the year	-	-	-	-	(14.731)	(14,731)	(12,544)	(27,275)
Other comprehensive income - items that may be reclassified subsequently to profit or loss
Exchange difference on translation	-	-	-	(173)	-	(173)	(2)	(175)
Total comprehensive income for the year	-	-	-	(173)	(14,731)	(14,904)	(12,546)	(27,450)
Proceeds from shares issued	140	322	-	-	-	462	-	462
Equity element of convertible loan	-	-	-	(53)	-	(53)	-	(53)
Investment by non-controlling interest in Minto share capital	-	-	-	-	330	330	2,670	3,000
Change in share of economic interest in Minto	-	-	-	-	(3,124)	(3,124)	3,124	-
Share-based payments	-	-	-	204	-	204	-	204
Transfer to retained deficit after surrender of share options	-	-	-	(474)	474	-	-	-
Total transactions with owners recognised directly in equity	140	322	-	(323)	(2,320)	(2,181)	5,794	3,613
Balance at 31 December 2020	965	9,222	1,011	185	(30,516)	(19,133)	8,311	(10,822)

Consolidated statement of changes in equity

For the year ended 31 December 2019

	Share capital	Share premium	Capital redemption reserve	Translation / Other reserve	Retained deficit	Total	Non-controlling interest	Total Equity
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000
Balance at 1 January 2019	295	2,902	1,011	66	(5,933)	(1,659)	-	(1,659)
Loss for the year	-	-	-	-	(8,063)	(8,063)	(5,024)	(13,087)
Other comprehensive income - items that may be reclassified subsequently to profit or loss
Exchange difference on translation	-	-	-	312	-	312	624	936
Total comprehensive income for the year	-	-	-	312	(8,063)	(7,751)	(4,400)	(12,151)
Proceeds from shares issued	530	6,109	-	-	-	6,639	-	6,639
Direct cost of shares issued	-	(111)	-	-	-	(111)	-	(111)
Equity element of convertible loan	-	-	-	53	-	53	-	53
Investment by non-controlling interest in Minto share capital	-	-	-	-	531	531	1,059	1,590
Non-controlling interest on acquisition of subsidiary	-	-	-	-	-	-	18,404	18,404
Share-based payments	-	-	-	250	-	250	-	250
Total transactions with owners recognised directly in equity	530	5,998	-	303	531	7,362	19,463	26,825
Balance at 31 December 2019	825	8,900	1,011	681	(13,465)	(2,048)	15,063	13,015

The following describes the nature and purpose of each reserve within Group and Company owners' equity:

Reserve	Description and purpose
Share capital	Nominal value of shares issued.
Share premium	Amount subscribed for share capital in excess of nominal value, less share issue costs.
Capital redemption reserve	Reserve created on cancellation of deferred shares.
Other reserve	Cumulative fair value of warrants and share options granted, together with the equity element of the convertible loan.
Translation reserve	Cumulative translation adjustment from retranslation of group undertakings with functional currencies other than USD.
Retained deficit	Cumulative net gains and losses recognised in the statement of comprehensive income.
Non-controlling interest	Non-controlling interests represent the portion of the equity of a subsidiary not attributable either directly or indirectly to the parent company and are presented separately in the Consolidated Statement of comprehensive income and within equity in the Consolidated statement of financial position, distinguished from parent company shareholders' equity.

Consolidated cash flow statement

For the year ended 31 December 2020

	Year ended		Year ended
	31 December 2020		31 December 2019
	US$'000		US$'000
Cash flows from operating activities
Loss for the year	(27,275)		(13,087)
Adjusted for:
Net finance costs	2,873		1,295
Unrealised FX on debt included in administrative expenses	(75)		(169)
Depreciation	8,381		3,459
Tax charge / (credit)	106		(26)
Share based payments	204		250
Revaluation of Capstone liability	9,369		-
	(6,417)		(8,278)
Movements in working capital
Decrease / (increase) in inventories	1,359		(3,248)
Decrease / (increase) in trade and other receivables	2,995		(8,252)
Increase / (decrease) in trade and other payables	6,735		6,752
Cash used by operations	4,672		(13,026)
Income taxes recovered / (paid)	-		-
Net cash used in operating activities	4,672		(13,026)
Cash flows from investing activities
Payments into long-term deposits	(2,737)		(1,582)
Purchase of property, plant and equipment	(4,518)		(490)
Purchase of mining claims	-		(237)
Net cash used in investing activities	(7,255)		(2,309)
Cash flows from financing activities
Interest payments	(1,297)		(497)
Repayment of borrowings	(122)		(647)
Proceeds from borrowings	5,471		10,754
Lease payments	(5,521)		(1,621)
Proceeds from issuance of shares - Company	462		6,528
Proceeds from issuance of shares - Minto	3,000		1,621
Net cash generated from financing activities	1,993		16,138
Net increase in cash and cash equivalents	(590)		803
Cash and cash equivalents at beginning of year	964		151
Impact of exchange rates on cash balances	41		10
Cash and cash equivalents at end of year	415		964

BASIS OF PREPARATION

The Group's Financial Statements are presented in United States dollars (US$), which is also the functional currency of the Company, and rounded to the nearest thousand.

The Financial Statements from which these extracts are taken have been prepared in accordance with international accounting standards in conformity with the Companies Act 2006 and international financial reporting standards adopted pursuant to Regulation (EC) No.1606/2002 as it applies in the European Union. The Financial Statements have been prepared under the historical cost convention, except as modified for assets and liabilities recognised at fair value on a business combination and contingent consideration measured at fair value.

Going concern

The Financial Statements have been prepared on a going concern basis, which assumes that the Company and Group will continue operating in the foreseeable future and will be able to service their debt obligations, realise their assets and discharge their liabilities as they fall due.  The Company and Minto both have a planning, budgeting and forecasting process to determine the funds required to support their operations and expansionary plans.  The Company raised new equity in January 2021, which is expected to support its operations until it starts to receive repayments from Minto of its inter-company balance in 2022.  At 31 December 2020, Minto had cash of US$ 398,000 and available capacity of US$ 9.5 million under the prepayment facility with Sumitomo Canada Limited.  The Group's liabilities include a contingent consideration balance of US$ 18,571,000 due to Capstone, which is disclosed as a current liability and explained fully in note 32.  The amount that will actually be paid in respect of this obligation, and the timing thereof, is dependent on future copper price movements, so is not certain, and there may be scope to negotiate a delay in payments beyond one year if this is necessary.  Because the liability would become payable in full only if copper prices remain at or above certain levels, the same factors that would cause it to be payable would also assist the Group in funding it.  The Group's ability to continue as a going concern is dependent on their ability to obtain additional funding and the successful development of their existing assets in order to meet their planned business objectives.  However, because there can be no assurance of this funding or the Group's ability to generate positive cash flows, a material uncertainty exists which may cast doubt on the Group's ability to continue as a going concern.

At present the Group believes that there should be no significant material disruption to its mining operations from COVID-19, but the Board continues to monitor these risks and Minto's business continuity plans.

Having prepared forecasts based on current resources, assessing methods of obtaining additional finance and assessing the possible impact of COVID-19, the Directors believe the Group and Company have sufficient resources to meet its obligations for a period of 12 months from the date of approval of these Financial Statements. Taking these matters into consideration, the Directors continue to adopt the going concern basis of accounting in preparing these Financial Statements. The Financial Statements do not include the adjustments that would be required should the going concern basis of preparation no longer be appropriate.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END

FR SFUFEWEFSEFI