30 September 2024
SHUKA
MINERALS PLC
("Shuka"
or the "Company")
Interim
Results for the six months to 30 June 2024 and update on Financial
Position
Shuka Minerals plc (AIM: SKA), an
African focused mine operator and developer, announces the
Company's unaudited interim results for the six months ended 30
June 2024.
Chairman's Report
I am pleased to present the
Company's Interim Results for the six-month period from 1 January
2024 to 30 June 2024. This period has seen operational
developments and some strategic advancements that underscore our
potential future direction.
Corporate
Developments
Settlement of Legacy
Dispute with Upendo Group
A significant development in the first half of the
year was the settlement of the long-standing dispute with Upendo
Group regarding their 10% residual interest in the Rukwa coal
mining license. This dispute, which had persisted for many years,
was resolved in February 2024 with a definitive agreement, under
which the Company has paid US$110,000 to Upendo. The settlement
draws a clear line under the matter, bringing all related legal
proceedings to a close, and involves a waiver of any future claims
by Upendo.
Board
Changes
During the period Mr. Jason Brewer stepped down from
the Board to avoid potential conflicts of interest. However, the
Company is pleased to have retained Mr. Brewer as a strategic
adviser under a consultancy agreement, ensuring that we continue to
benefit from his expertise.
As the strategic direction of the Company progresses,
it has been agreed that Noel Lyons, Paul Ryan and Allen Zimbler
will each leave the company with effect from 30 November 2024, or
such earlier date as may be agreed. The Company is actively
progressing the appointment of additional directors, at both
executive and non-executive level and looks forward to providing
further updates once customary due diligence has been concluded.
Operational
Performance
Rukwa Coal
Mine
Operationally, the Rukwa coal mine has faced
challenges, particularly due to the rainy season, which caused a
temporary halt in production. Nonetheless, with the return of local
staff and preparation for the new production cycle, we are
optimistic that output will resume in the coming months. Demand for
coal in regional markets remains strong, and we expect this trend
to continue into the second half of the year.
Strategic Growth
Initiatives
Potential
Acquisition
As previously announced in March 2024, the Board is
progressing the potential acquisition of a brownfield base metals
project in East Africa (the "Project"). The due diligence process
has now been completed, with independent technical and legal
assessments indicating that the Project presents an attractive
opportunity for the Company.
The Project has a historical non-JORC compliant
resource base with an estimated in-situ value of approximately
US$1.98 billion, and economic analyses project pre-tax cash flows
of US$1.84 billion. Should the acquisition proceed, our development
plan will include a phased exploration program to validate the
resource further and establish a clear pathway for both open-pit
and underground mining operations.
We have already paid US$150,000 to the counterparty
as part of this acquisition process, with the remaining
consideration of US$5.85 million to be settled through a
combination of cash and equity on a staged-payment basis. While
regulatory approvals and closing conditions are still pending, we
remain confident in the strategic benefits of this acquisition.
While the Board remains excited by the potential
acquisition, there can be no certainty that the requisite
regulatory approvals and customary closing conditions will be
satisfied (or waived) and that definitive documentation will be
concluded, or as to the eventual detailed terms or timing of the
transaction.
Further announcements regarding the potential
acquisition will be made as and when appropriate.
Convertible Loan
Note and Financial Position
To fund the potential acquisition and support our
broader growth plans, we announced in May 2024 that we had secured
a £2 million convertible loan note agreement with AUO Commercial
Brokerage LLC ("AUO"). AUO subsequently advised the Company in
August 2024 that its investment capital was tied up in ongoing
transactions which were taking longer to conclude than they
initially anticipated, and accordingly it did not have access at
that time to the Company's requested initial CLN drawdown funds.
While AUO has reiterated its
commitment to supporting the Company's future endeavours and
financial needs to support the ongoing business and obligations of
the Company, the Company currently has limited cash at bank
and continues to carefully manage its resources and creditors.
Assuming it is able to continue to manage creditors, it expects
current funds available will be sufficient to the end of November
2024.
Accordingly, in the absence of funds being provided by
AUO on a timely basis, the Company is actively exploring
alternative sources of financing in order to provide sufficient
working capital for the Company, until such time
as the requested funds are provided by AUO pursuant to the
convertible loan note or otherwise.
This includes discussions with Gathoni Muchai
Investments Limited ("GMI"), a major shareholder of the
Company, which has provisionally offered an unsecured, interest
free, non-convertible loan facility, of £500,000, subject to GMI
having secured the necessary funding in the near term to provide
such a facility; however there can be no guarantee these
discussions will be formalised or that GMI will secure
the requisite funding and accordingly there can be no guarantee
that such a facility will be made available.
Whilst the Board remains confident
in its ability to raise such additional funding on a timely basis,
there can be no guarantee that such funding will be secured, or as
to the terms of any such financing, which may impact the Company's
ability to continue to trade.
Further announcements will be made
as appropriate.
Thank you for your continued support.
Quinton Van Der
Burgh
Chairman, Shuka Minerals PLC.
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR") and is disclosed in accordance with
the Company's obligations under Article 17 of
MAR.
CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
|
|
|
Six months
ended
30 June 24
|
Six months
ended
30 June 23
|
Year
ended
31 Dec 23
|
|
|
|
Unaudited
|
Unaudited
|
Audited
|
|
|
Note
|
£
|
£
|
£
|
|
Revenue
|
|
2,330
|
68,926
|
194,346
|
|
Cost of sales
|
|
(92,060)
|
(151,627)
|
(438,877)
|
|
|
|
|
|
|
|
Gross loss
|
|
(89,730)
|
(82,701)
|
(244,531)
|
|
Administrative expenses
|
|
(452,960)
|
(656,060)
|
(1,424,120)
|
|
|
|
|
|
|
|
Group operating loss
|
|
(542,690)
|
(738,761)
|
(1,668,651)
|
|
Finance income
|
|
2,082
|
-
|
3,256
|
|
Finance costs
|
|
(3,608)
|
(7,562)
|
(16,133)
|
|
|
|
|
|
|
|
Loss
on operations before taxation
|
|
(544,216)
|
(746,323)
|
(1,681,528)
|
|
|
|
|
|
|
|
Taxation
|
|
-
|
-
|
(972)
|
|
|
|
|
|
|
|
Loss
for the period after taxation
|
|
(544,216)
|
(746,323)
|
(1,682,500)
|
|
Other comprehensive
income/(loss):
|
|
-
|
-
|
-
|
|
Gain/(loss) on translation of
overseas subsidiary
|
|
45,451
|
(335,033)
|
(349,479)
|
|
|
|
|
|
|
|
Total comprehensive loss for the period
|
|
(498,765)
|
(1,081,356)
|
(2,031,979)
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
Equity holders of the
Company
|
|
(498,218)
|
(1,080,722)
|
(2,030,327)
|
|
Non-controlling interest
|
|
(547)
|
(634)
|
(1,652)
|
|
|
|
|
|
|
|
|
|
(498,765)
|
(1,081,356)
|
(2,031,979)
|
|
|
|
|
|
|
|
Loss
per share
|
|
|
|
|
|
- basic and diluted
(pence)
|
2
|
(0.90)
|
(2.54)
|
(4.11)
|
|
|
|
|
|
|
The income for the period arises from
the Group's continuing operations.
NOTES TO THE INTERIM REPORT
1. Financial
information and basis of preparation
The interim financial statements of
Shuka Minerals Plc are unaudited consolidated financial statements
for the six months ended 30 June 2024 which have been prepared in
accordance with UK adopted international accounting standards. They
include unaudited comparatives for the six months ended 30 June
2023 together with audited comparatives for the year ended 31
December 2023.
The interim financial statements do
not constitute statutory accounts within the meaning of section 434
of the Companies Act 2006. The statutory accounts for the
year ended 31 December 2023 have been reported on by the company's
auditors and have been filed with the Registrar of Companies.
The report of the auditors unqualified and contained an
Emphasis of mater paragraph on Operationalisation of up to 16%
Government of Tanzania non-dilutive free carried share interest and
the recoverability of VAT in Tanzania. Aside from the Emphasis of
matter paragraphs above, the auditor's report did not contain any
statement under section 498 of the Companies Act 2006.
The interim consolidated financial
statements for the six months ended 30 June 2024 have been prepared
on the basis of accounting policies expected to be adopted for the
year ended 31 December 2024. These are anticipated to be consistent
with those set out in the Group's latest financial statements for
the year ended 31 December 2023. These accounting policies are
drawn up in accordance with adopted International Accounting
Standards ("IAS") and International Financial Reporting Standards
("IFRS") as issued by the International Accounting Standards
Board.
2. Loss
per share
The calculation of the basic and
diluted loss per share is based on the following data:
|
|
30 June 24
|
30 June 23
|
31 December
23
|
|
|
£
|
£
|
£
|
|
Loss after taxation
|
(544,216)
|
(746,323)
|
(1,682,500)
|
|
|
|
|
|
|
Weighted average number of shares in
the period
|
60,219,861
|
29,329,474
|
40,922,217
|
|
|
|
|
|
|
Basic and diluted loss per share
(pence)
|
(0.90)
|
(2.54)
|
(4.11)
|
The loss attributable to equity
shareholders and weighted average number of ordinary shares for the
purposes of calculating diluted earnings per ordinary share are
identical to those used for basic earnings per ordinary share. This
is because the exercise of share options and warrants would have
the effect of reducing the loss per ordinary share and is therefore
anti-dilutive.
3.
Dividends
No dividends are proposed for the
six months ended 30 June 2024 (six months ended 30 June 2023: £nil,
year ended 31 December 2023: £nil).
4. Property, plant and
equipment
|
|
Coal Production
assets
|
Plant &
machinery
|
Fixtures &
fittings
|
Motor
vehicles
|
Total
|
|
|
£
|
£
|
£
|
£
|
£
|
|
Cost
or valuation
As at 1 January 2024
|
5,529,808
|
1,270,229
|
7,366
|
311,162
|
7,118,565
|
|
Foreign exchange
adjustment
|
45,921
|
10,488
|
27
|
2,446
|
58,882
|
|
|
|
|
|
|
|
|
At
30 June 2024
|
5,575,729
|
1,280,717
|
7,393
|
313,608
|
7,177,447
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated depreciation
|
|
|
|
|
|
|
As at 1 January 2024
|
194,860
|
1,269,183
|
7,284
|
178,104
|
1,649,431
|
|
Depletion/Charge for the
year
|
-
|
131
|
9
|
16,770
|
16,910
|
|
Foreign exchange
adjustment
|
1,611
|
10,480
|
27
|
1,343
|
13,461
|
|
|
|
|
|
|
|
|
At
30 June 2024
|
196,471
|
1,279,794
|
7,320
|
196,217
|
1,679,802
|
|
|
|
|
|
|
|
|
Net
book value
|
|
|
|
|
|
|
As
at 30 June 2024
|
5,379,258
|
923
|
73
|
117,391
|
5,497,645
|
|
|
|
|
|
|
|
|
|
Coal Production
assets
|
Plant &
machinery
|
Fixtures &
fittings
|
Motor
vehicles
|
Total
|
|
|
£
|
£
|
£
|
£
|
£
|
|
Cost
or valuation
As at 1 January 2023
|
5,855,019
|
1,344,491
|
7,554
|
328,480
|
7,535,544
|
|
Foreign exchange
adjustment
|
(310,858)
|
(70,984)
|
(180)
|
(16,553)
|
(398,575)
|
|
|
|
|
|
|
|
|
At
30 June 2023
|
5,544,161
|
1,273,507
|
7,374
|
311,927
|
7,136,969
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated depreciation
|
|
|
|
|
|
|
As at 1 January 2023
|
173,642
|
1,301,920
|
7,445
|
140,661
|
1,623,668
|
|
Depletion/Charge for the
year
|
3,849
|
3,760
|
13
|
22,920
|
30,542
|
|
Foreign exchange
adjustment
|
(9,227)
|
(68,846)
|
(180)
|
(7,292)
|
(85,545)
|
|
|
|
|
|
|
|
|
At
30 June 2023
|
168,264
|
1,236,834
|
7,278
|
156,289
|
1,568,665
|
|
|
|
|
|
|
|
|
Net
book value
|
|
|
|
|
|
|
As
at 30 June 2023
|
5,375,897
|
36,673
|
96
|
155,638
|
5,568,304
|
|
|
|
|
|
|
|
4. Property,
plant and equipment (continued)
|
|
Coal Production
assets
|
Plant &
machinery
|
Fixtures &
fittings
|
Motor
vehicles
|
Total
|
|
|
£
|
£
|
£
|
£
|
£
|
|
Cost
or valuation
As at 1 January 2023
|
5,855,019
|
1,344,491
|
7,554
|
328,480
|
7,535,544
|
|
Foreign exchange
adjustment
|
(325,211)
|
(74,262)
|
(188)
|
(17,318)
|
(416,979)
|
|
|
|
|
|
|
|
|
At
31 December 2023
|
5,529,808
|
1,270,229
|
7,366
|
311,162
|
7,118,565
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated depreciation
|
|
|
|
|
|
|
As at 1 January 2023
|
173,642
|
1,301,920
|
7,445
|
140,661
|
1,623,668
|
|
Depletion/Charge for the
year
|
30,871
|
39,171
|
27
|
44,353
|
114,422
|
|
Adjustments
|
-
|
-
|
-
|
-
|
-
|
|
Foreign exchange
adjustment
|
(9,653)
|
(71,908)
|
(188)
|
(6,910)
|
(88,659)
|
|
|
|
|
|
|
|
|
At
31 December 2023
|
194,860
|
1,269,183
|
7,284
|
178,104
|
1,649,431
|
|
|
|
|
|
|
|
|
Net
book value
|
|
|
|
|
|
|
As
at 31 December 2023
|
5,334,948
|
1,046
|
82
|
133,058
|
5,469,134
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5. Intangible assets
|
|
|
|
Mining
Licences
|
Total
|
|
|
|
|
£
|
£
|
|
Cost
or valuation
As at 1 January 2024
|
|
|
1,574,911
|
1,574,911
|
|
Foreign exchange
adjustment
|
|
|
13,081
|
13,081
|
|
|
|
|
|
|
|
At
30 June 2024
|
|
|
1,587,992
|
1,587,992
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated amortisation and impairment
|
|
|
|
|
|
As at 1 January 2024
|
|
|
1,241,870
|
1,241,870
|
|
Foreign exchange
adjustment
|
|
|
10,315
|
10,315
|
|
|
|
|
|
|
|
At
30 June 2024
|
|
|
1,252,185
|
1,252,185
|
|
|
|
|
|
|
|
Net
book value
|
|
|
|
|
|
As
at 30 June 2024
|
|
|
335,807
|
335,807
|
|
|
|
|
|
|
|
|
|
|
|
|
5. Intangible assets
(continued)
|
|
|
|
Mining
Licences
|
Total
|
|
|
|
|
£
|
£
|
|
Cost
or valuation
As at 1 January 2023
|
|
|
1,667,530
|
1,667,530
|
|
Foreign exchange
adjustment
|
|
|
(88,530)
|
(88,530)
|
|
|
|
|
|
|
|
At
30 June 2023
|
|
|
1,579,000
|
1,579,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated amortisation and impairment
|
|
|
|
|
|
As at 1 January 2023
|
|
|
1,314,903
|
1,314,903
|
|
Foreign exchange
adjustment
|
|
|
(69,810)
|
(69,810)
|
|
|
|
|
|
|
|
At
30 June 2023
|
|
|
1,245,093
|
1,245,093
|
|
|
|
|
|
|
|
Net
book value
|
|
|
|
|
|
As
at 30 June 2023
|
|
|
333,907
|
333,907
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mining
Licences
|
Total
|
|
|
|
£
|
£
|
|
Cost
or valuation
As at 1 January 2023
|
|
1,667,530
|
1,667,530
|
|
Foreign exchange
adjustment
|
|
(92,619)
|
(92,619)
|
|
|
|
|
|
|
At
31 December 2023
|
|
1,574,911
|
1,574,911
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated amortisation and impairment
|
|
|
|
|
As at 1 January 2023
|
|
1,314,903
|
1,314,903
|
|
Foreign exchange
adjustment
|
|
(73,033)
|
(73,033)
|
|
|
|
|
|
|
At
31 December 2023
|
|
1,241,870
|
1,241,870
|
|
|
|
|
|
|
Net
book value
|
|
|
|
|
As
at 31 December 2023
|
|
333,041
|
333,041
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
