Maintaining momentum

Auriant Mining 3 September 2020 Update
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Auriant Mining

Maintaining momentum

Q220 results

Metals & mining

3 September 2020

Price

SEK6.40

Market cap

SEK631m

RUB73.7065/US$; SEK8.6422/US$

Net debt (US$m) at end-June

72.9

Shares in issue (000s)

98,649

Free float

25%

Code

AUR

Primary exchange

Nasdaq First North Premier

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(0.9)

26.8`

88.7

Rel (local)

(3.3)

16.4

62.0

52-week high/low

SEK7.18

SEK2.95

Business description

Auriant Mining is a Swedish junior gold mining company focused on Russia. The company has two producing mines (Tardan in Tyva and Solcocon in Zabaikalsky), one advanced exploration property (Kara-Beldyr in Tyva) and one early stage exploration property (Uzhunzhul in Khakassia).

Next events

Q320 results

30 November 2020

Q420 results

28 February 2021

Analyst

Charles Gibson

+44 (0)20 3077 5724

Auriant Mining is a research client of Edison Investment Research Limited

Auriant’s Q220 financial results were reported in the context of known production of 243kg. While this was 12.6% less than in Q120, some degree of moderation was inevitable as the company shifted from processing high-grade ore in January and February to average-grade ore in the following months. In addition, the usual contribution from Solcocon (which is always weather dependent, but which usually begins in Q2) has, this year, been delayed until Q3. Finally, whereas there was an over-sale of 39kg (1,247oz) of gold relative to production in Q1, there was an under-sale of 23kg (748oz) in Q2. Nevertheless, both throughput and costs were consistent with the smooth running of the new carbon-in-leach plant at Tardan and the effect of COVID-19 on operations has, to date, remained minimal. In combination with our updated gold prices, we have upgraded both our FY20 forecasts (see Exhibit 1) and our valuation of the company.

Year end

Revenue (US$m)

PBT*
(US$m)

EPS*
(c)

DPS
(c)

P/E
(x)

Yield
(%)

12/18

17.4

(10.2)

(10.9)

0.0

N/A

N/A

12/19

29.8

(2.2)

(1.3)

0.0

N/A

N/A

12/20e

57.4

19.0

15.3

0.0

4.8

N/A

12/21e

53.9

24.6

15.6

0.0

4.7

N/A

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles and exceptional items.

Trending to the top end of the guidance range

Compared with H119, EBITDA has increased by more than a factor of 10x in H120, to $16.8m, while cash flow from operations has increased by 545%. Output in H120 was 521kg (1,042kg annualised) and compares with Auriant’s official guidance for 2020 of 900–940kg from 350–380kt of ore processed, implying a yield of 2.37–2.69g/t and a likely plant feed grade of 2.58–2.92g/t (cf Auriant’s expectation of an average mined grade of 2.71g/t). This grade range forms the basis of our financial and operating forecasts for the remainder of the year (see Exhibit 1). While we expect some slowdown in production in Q4 as the plant undergoes scheduled maintenance, we nevertheless believe that Auriant’s financial performance in H1 provides a good indicator of its likely performance in H220 – albeit for slightly different reasons (ie the gold price instead of grade and throughput).

Valuation: Up 112.0% to $1.76 (SEK15.21) per share

On the basis that management executes the Tardan CIL project and the Kara-Beldyr project according to the operational and financial parameters expected (and at Edison’s updated, higher long-term gold prices), we estimate that Auriant is capable of generating average cash flows of $63.4m (cf $49.4m previously), average earnings of $56.1m ($42.4m previously) and average EPS of $0.446 (cf $0.230 previously) in the nine-year period from FY25–33 (inclusive), thus allowing it to pay maximum potential dividends to shareholders of 47.8c (cf 25.9c previously). Discounted at our customary 10% discount rate, such a stream of dividends has a value of $1.76 per share (cf $0.83 previously), rising to $2.83/share on the cusp of the company’s maiden dividend in FY25.

Q220 results

Auriant’s Q220 financial results were reported within the context of known production of 243kg for the quarter (cf 278kg in Q120) and a largely known gold price. In this case, however, they are also significant as they reflect the second full quarter of operations for the company’s new carbon-in-leach (CIL) plant, which was commissioned in November. In this respect, three factors are noteworthy:

The plant’s targeted throughput rate of 50tph. Had it run at this rate for the entire period, it would have processed 109.2kt of ore. In the event, it processed 96kt of ore (cf 100kt in Q120), ie at an average rate of 44tph, which is an excellent achievement given requirements for downtime and maintenance etc. In general, Auriant is budgeting a throughput rate of 80.0–82.5kt at the Tardan plant per quarter to produce an average 225kg gold per quarter, which it self-evidently exceeded in Q2.

We estimate that the grade of ore processed dropped to 2.69g/t in Q2, compared with our prior estimate of 2.92g/t and the previous quarter’s 3.04g/t. However, the decline in grade was offset to some extent by an increase in metallurgical recovery to (we estimate) 94.2% compared with a target recovery rate of 90%.

Despite the inherently higher operating rates of the CIL plant compared with Tardan’s previous heap leach operation, cash costs of $55.58/t (cf $48.96/t in Q120) remained below our prior expectation of $60.32/t. This, in turn, translated into a cash cost of sales (ie excluding depreciation) of $632/oz (sold), which was also below our prior forecast of $698/oz.

In contrast to Q120, when 39kg (1,247oz) more gold was sold than was produced, in Q220 23kg (748oz) less gold was sold than was produced, creating a negative variance in revenue of $1.3m relative to potential. Nevertheless, the financial effects of the evolution of the Tardan operation from a heap leach to a CIL one were clearly visible in Auriant’s Q220 results (overleaf). In crude terms, output and revenue almost doubled relative to Q219, while costs declined by 14.6%. In addition to a summary of the results of operations in Q120, Exhibit 1 also presents our updated forecasts for the remainder of FY20, by quarter, albeit with the caveat that the quarterly financial results of mining companies are prone to material volatility. As such, these forecasts should be seen as indicative, rather than prescriptive, especially with respect to individual quarters. Nevertheless, they also demonstrate the reconciliation between our forecasts for the remaining two quarters of the year and our updated full-year expectations.

Exhibit 1: Auriant results, Q219–Q420e, by quarter ($000s*)

Q219

Q319

Q419

FY19

Q120

Q220e

Q220a

Change
***(%)

Variance
****(%)

Q320e

Q420e

FY20e

FY20e
(prior)

Production

Tardan heap leach (kg)

141.1

202.3

95.4

525.0

0

0

0

N/A

N/A

0

0

0

0

Tardan CIL (kg)

0.0

0.0

110.0

110.0

278

255

243

-12.6

-4.7

240

186

948

960

Tardan total (kg)

141.1

202.3

205.4

635.0

278

255

243

-12.6

-4.7

240

186

948

960

Solcocon production (kg)

27.4

24.1

2.5

54.0

0

25

0

N/A

-100.0

25

13

38

63

Gold price ($/oz)

1,308

1,474

**1,481

1,416

1,585

1,704

1,713

8.1

0.5

1,923

1,964

1,777

1,668

 

 

Income statement

 

 

Revenue

6,638

10,007

8,975

29,762

16,154

15,351

12,276

-24.0

-20.0

16,408

12,562

57,401

56,957

Cost of sales

5,221

6,316

4,830

19,610

5,928

6,703

4,459

-24.8

-33.5

6,353

4,906

21,646

24,559

Gross profit

1,417

3,691

4,145

10,152

10,226

8,648

7,817

-23.6

-9.6

10,055

7,656

35,754

32,398

Depreciation

(984)

(1,142)

(1,652)

(5,011)

(1,647)

(1,702)

(1,846)

12.1

8.5

(1,901)

(1,956)

(7,350)

(6,918)

General & administration

(527)

(547)

(480)

(2,184)

(576)

(668)

(567)

-1.6

-15.1

(668)

(668)

(2,479)

(2,580)

Other operating income

190

24

7

241

53

0

15

-71.7

N/A

0

0

68

53

Other operating expenses

(45)

(140)

(755)

(1,001)

(182)

(116)

(8)

-95.6

-93.1

(116)

(116)

(422)

(530)

Impairments etc

0

0

EBIT

51

1,886

1,265

2,197

7,874

6,162

5,411

-31.3

-12.2

7,370

4,916

25,571

22,423

Interest income

0

0

0

0

0

0

0

N/A

N/A

0

0

Interest expense

(1,120)

(1,066)

(1,200)

(4,390)

(1,584)

(1,677)

(1,597)

0.8

-4.8

(1,717)

(1,717)

(6,614)

(6,614)

Net interest

(1,120)

(1,066)

(1,200)

(4,390)

(1,584)

(1,677)

(1,597)

0.8

-4.8

(1,717)

(1,717)

(6,614)

(6,614)

Forex gain/(loss)

209

448

(240)

679

(147)

0

128

-187.1

N/A

(19)

(147)

Profit before tax

(860)

1,268

(175)

(1,514)

6,143

4,486

3,942

-35.8

-12.1

5,654

3,200

18,938

15,662

Tax

(608)

(13)

445

(278)

248

625

1,275

414.1

104.0

808

457

2,789

1,574

Marginal tax rate

70.7

(1.0)

(254.3)

18.4

4.0

13.9

32.3

707.5

132.4

14.3

14.3

14.7

10.1

Profit after tax

(252)

1,281

(620)

(1,236)

5,895

3,861

2,667

-54.8

-30.9

4,845

2,742

16,149

14,087

 

 

Average no. shares (000s)

98,649

98,649

98,649

98,649

98,649

98,649

98,649

0.0

0.0

98,649

125,655

105,400

141,587

Derivatives (000s)

0.000

0

0

0

345

345

0

-100.0

-100.0

345

345

345

345

Fully diluted no. shares (000s)

98,649

98,649

98,649

98,649

98,994

98,994

98,649

-0.3

-0.3

98,994

126,000

105,745

141,932

 

 

EPS ($/share)

(0.003)

0.013

(0.006)

(0.013)

0.060

0.039

0.027

-55.0

-30.8

0.049

0.022

0.153

0.099

Diluted EPS ($/share)

(0.003)

0.013

(0.006)

(0.013)

0.060

0.039

0.027

-55.0

-30.8

0.049

0.022

0.153

0.099

Source: Edison Investment Research, Auriant Mining. Note: *Unless otherwise indicated. **Estimate. ***Q220 vs Q120. ****Q220a vs Q220e.

Other notable features of the financial results for the quarter were the continuance of a low general and administrative cost and a high effective tax rate. However, in 2020, Tardan became a participant in the Regional Investment Projects programme and obtained the right to apply a reduced income tax rate of 17% and the mineral extraction tax at a nil rate. According to Russian legislation, tax losses are accumulated on the balance sheet and can be offset against future taxable earnings. Thus, in H120, the income tax charge of $1.5m was fully offset against the balance sheet amount of the deferred tax asset related to tax losses carried forward. Compared with free cash flow derived from the income statement of $12.1m ($8,562k H120 earnings plus $3,493k depreciation) therefore, actual cash flow from operations amounted to $14.7m, of which $2.2m was consumed in investing activities and the majority of the remainder used to repay debt.

Guidance and assumptions

Auriant produced 115kg of gold in January, the equivalent of 1,380kg on an annualised basis. Since February, however, Auriant has been feeding blended high- and low-grade ore to the plant, as opposed to high-grade ore only in January, to ensure a steady transition to year-round average grades. Even so, it produced 75kg (900kg annualised) in February and 88kg (1,056kg annualised) in March.

Auriant’s official guidance for Tardan for 2020 is for production of 900–940kg (average 225–235kg per quarter) gold from 350–380kt (average 87.5–95kt per quarter) of ore processed, implying a yield of 2.37–2.69g/t and a likely plant feed grade of 2.58–2.92g/t and compares with Auriant’s (unchanged) expectation that its mined grade will average 2.71g/t in FY20. This grade range forms the basis of our financial and operating forecasts for the remainder of the year (see Exhibit 1). In the light of Q220 results, however – and with the worst of the weather now behind it – we expect plant throughput to remain towards the top end of its range, albeit with a likely provisional break in processing in Q4 to allow for scheduled maintenance. As a result, we are forecasting gold production for Tardan for FY20 to be at the top of (or even slightly above) management’s guidance range, at 948kg.

Costs

As a result of test-work conducted during the ramp-up phase, Auriant has upgraded the leaching tanks at Tardan to improve ore oxidation to ensure stable processing results. In addition, in December 2019, the company agreed a new energy deal to increase the power allocation to the Tardan CIL plant by 25% from 2.0MW to 2.5MW using a newly built 35kV power line, which will allow it to minimise its use of diesel generators on site or, possibly, to cease their use entirely. Both will have a potentially beneficial effect on costs, as will the recent depreciation of the rouble, from RUB70.9975/US$ at the time of our last note (see Emerging into broad sunlit uplands, published on 29 May 2020) to RUB73.7065/US$, and the general weakness in the oil price in FY20. In the light of this, we have reduced our central unit working cost for Tardan for the rest of the year, to $55.32/t cf $60.32/t previously, and cash costs of $55.58/t in Q220 (but $46.45/t if changes in working capital are taken into account). For the full year, this will translate into a cash cost of production of $631/oz (cf Edison’s estimates of $611/oz and $684/oz in H120 and Q220, respectively).

The gold price

In our last note on the gold price (see A golden future, published on 11 June 2020), Edison argued that the recent, sharp increases in the total US monetary base might be expected to support a (nominal) gold price of $1,892/oz and potentially as high as $3,000/oz. While there is a historically strong and statistically significant correlation of 0.909 between the gold price and the total US monetary base from 1967 to 2018 however, there is very little visibility as to how, or to what extent, the total US monetary base may be expected to evolve. Currently, we know that it is expanding at a rate of approximately $110bn per month, which equates to an expected increase in the gold price (using the historical correlation) of approximately $500/oz per annum. Anecdotally, the total US monetary base may probably be expected to continue to increase for a time until the COVID-19 crisis has been managed and then to flatten off for a discrete period until a period of tapering is attempted by the Federal Reserve (in a similar fashion to the aftermath of the global financial crisis). However, neither the extent of any increases nor the extent of any subsequent tapering nor the timing of either is easy to judge. In consequence, Edison’s strategy now is to maintain a flat, nominal gold price of $1,892/oz into the future from FY21. Note that this may be contrasted with our previous approach to gold price forecasts (see Portents of economic weakness: Gold – doves in the ascendant, published on 14 August 2019), the results of which were as set out in the table below:

Exhibit 2: Previous Edison gold price forecasts* ($/oz)

$/oz

2021e

2022e

2023e

Nominal gold price forecast ($/oz)

1,509

1,560

1,421

Real gold price forecast ($/oz)

1,395

1,387

1,350

Source: Edison Investment Research. Note: *See Portents of economic weakness: Gold – doves in the ascendant.

In the absence of more general deflation, a flat, nominal gold price of $1,892/oz is, self-evidently, a declining gold price in real terms, which is an unlikely long-term scenario, given that the gold price has historically increased by 2.0% per annum in real terms from 1914 to 2018 (see Portents of economic weakness, Gold: Doves in the ascendant, published in August 2019). During the period 2013–18, the gold price was relatively flat, averaging $1,270/oz. Its average price in 2018 was also $1,271/oz, both of these levels arguably having been supported by the marginal cost of production. If this level is then increased at 2% per year from 2018, it may be compared with the flat nominal (declining real) price scenario previously described, as shown in the exhibit below:

Exhibit 3: Edison updated real gold price pricing scenarios and forecast ($/oz)

Source: Edison Investment Research

As may be seen from the chart above, the two lines cross between 2025 and 2026 at a level fractionally below $1,500/oz. All Edison’s gold company valuations are conducted in real terms. Consequently, and in the absence of much immediate visibility as to the evolution of the total US monetary base, Edison’s new gold price scenario for valuation purposes is for the gold price to remain at $1,892/oz in flat nominal terms (ie declining in real terms) until the price (in real terms) crosses with the increased $1,271/oz 2018 price. At that point we assume that the price will flatten out (in real terms) at $1,494/oz (note that this may be contrasted with our prior methodologies for gold price forecasting, set out in our report Portents of economic weakness, Gold: Doves in the ascendant).

Valuation up 112.0% to $1.76/share

In common with our standard practice, our valuation of Auriant has been performed via the discounting of maximum potential future dividends at a discount rate of 10%, assuming all excess cash generated is distributed to shareholders only after all debt has been repaid.

On the basis that management executes the Tardan CIL project and the Kara-Beldyr project according to the operational and financial parameters anticipated (and at our updated gold prices), we estimate that Auriant is capable of generating average cash flows of $63.4m (cf $49.4m previously), average earnings of $56.1m (cf $42.4m previously) and average EPS of 44.6c (cf 23.0c) in the nine-year period from FY25–33 (inclusive), thus allowing it to pay maximum potential dividends to shareholders of 47.8c per share (cf 25.9c). Discounted at our customary 10% discount rate, such a stream of dividends has a value of $1.76 per share (cf $0.83/share previously), as shown in the exhibit below, rising to $2.83/share (cf $1.46/share previously) on the cusp of the company’s maiden dividend in FY25.

Exhibit 4: Auriant forecast EPS and maximum potential DPS, FY15–35e

Source: Edison Investment Research

Our ‘base case’ valuation of $1.76/share compares with one of $0.83 in May 2020 (see our note Emerging into broad sunlit uplands). The main underlying factors occasioning the increase in value include a higher long-term gold price (as above), a higher short-term gold price of $1,964/oz for the remainder of FY20 (cf $1,705/oz previously), a higher share price (SEK6.40 cf SEK4.40) and a reduced equity raising requirement ($20m cf $40m previously) in respect of the Kara-Beldyr project in the light of the higher gold price environment – these last two points, in particular, implying less future dilution to existing shareholders (see ‘Sensitivities’ section, below). Note that our valuation specifically excludes any value attributable to Solcocon on account of the variable nature of alluvial mining operations. However, it is not impossible that activities at Solcocon could be reconfigured in the future to incorporate hard rock mining and processing via a carbon-in-pulp plant.

Sensitivities and risks

In qualitative terms, the principal risks to which Auriant is immediately exposed include geographical/sovereign (including regulatory risk), geological, metallurgical, engineering, funding, financing and management. In general terms, these may be summarised as execution risk, namely management’s ability to bring the Kara-Beldyr project in particular to account within its geographical jurisdiction at the required technical and economic parameters. Once in production, however, these risks will reduce and be partially replaced by others, such as commercial, commodity price, foreign exchange and global economic risks.

One specific risk – funding – bears further, immediate consideration from an empirical perspective. In this particular case, our valuation sensitivity to the price at which an assumed $20m ($40.0m previously) equity funding is conducted (in order to part fund Kara-Beldyr) is shown in the exhibit below:

Exhibit 5: Valuation sensitivity to equity funding price

Premium/(discount) to current share price (%)

Equity fundraising price (SEK)

4.40

5.00

5.50

6.00

6.40

6.50

7.00

7.50

Valuation ($/share)

1.60

1.66

1.70

1.73

1.76

1.76

1.79

1.81

Valuation (SEK/share)*

13.83

14.35

14.69

14.95

15.21

15.21

15.47

15.64

Change cf ‘base case’ (%)

-9.1

-5.7

-3.4

-1.7

u/c

u/c

+1.7

+2.8

Source: Edison Investment Research. Note: *Converted at the prevailing forex rate of SEK8.6422/$.

Readers should note that (assuming conversion before FY26) the above table effectively also provides an analysis of Auriant being funded by way of a convertible bond (cf conventional equity) with a conversion price at one of those shown (typically at a premium to the existing share price cf conventional equity at a discount) and a coupon close to the company’s cost of debt. In the event of such a convertible remaining unconverted, however, and therefore behaving like conventional debt, our valuation of Auriant instead rises to $2.07/share (albeit with a correspondingly higher maximum debt level of $100.9m (cf $77.6m in the ‘base case’ scenario, in the ‘Financials’ section, below)).

Financials

At end-June 2020, Auriant had net debt of $72.9m on its balance sheet, including a ‘lease payable’ item of $0.7m. This compares with net debt on its balance sheet of $82.7m at end-December 2019 excluding a ‘lease payable’ item of $1.4m. Assuming the company raises an additional SEK172.8m ($20m cf $40.0m previously) in cash via equity funding in the near future, we expect its net debt will evolve as follows until FY24, before being eliminated in FY25:

Exhibit 6: Auriant forecast net debt evolution, FY18–25e ($m)

End-year

FY18

FY19

FY20e

FY21e

FY22e

FY23e

FY24e

Net debt (current estimates)

75.9

82.7

58.6

57.1

77.6

72.8

36.0

Source: Auriant Mining accounts, Edison Investment Research

Note that our estimate of Auriant’s maximum (future) net debt requirement of $77.6m at end-FY22 equates to a leverage ratio (net debt/(net debt+equity)) of 61.0% (cf $79.7m and 64.3% previously).

COVID-19

Relative to the 541 personnel that it employed at 30 June 2020, Auriant has received results of COVID-19 tests from 271 employees (ie approximately half of the total) working at the Tardan mine, which were carried out as part of a government initiative to contain the spread of the new coronavirus in the region. Out of 271 employees tested, 26 tested positive, although all are reported to be asymptomatic and all have since returned to work after the appropriate period of quarantine, as determined by the authority responsible for the containment of the disease (Rospotrebnadzor).

Otherwise, the mine continues to operate as normal. All personnel on site are subject to daily temperature checks and the mandatory use of personal protective equipment to minimise the risk of infection. Intensive disinfection measures have also been implemented. To date, the quarantine measures are reported to have had an insignificant effect on the mine’s operations. Further measures will depend on subsequent test results. In the meantime, however, management is confident that mining and gold production can continue at Tardan, although there may be temporary interruptions to some of the mine’s operations depending on the number of people who are infected and their positions at the mine. In accordance with Rospotrebnadzor’s instructions, infected employees are released from observation once two negative test results at least one day apart have been obtained.

Exhibit 7: Financial summary

US$'000s

2015

2016

2017

2018

2019

2020e

2021e

2022e

December

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

 

 

33,429

43,380

33,532

17,373

29,762

57,401

53,900

51,375

Cost of Sales

(19,360)

(19,391)

(25,061)

(16,790)

(19,610)

(21,646)

(18,037)

(17,431)

Gross Profit

14,069

23,989

8,471

583

10,152

35,754

35,863

33,944

EBITDA

 

 

10,242

21,987

8,846

(1,714)

7,208

32,921

32,863

30,944

Operating Profit (before amort. and except.)

919

15,416

2,487

(6,373)

2,197

25,571

29,313

27,696

Intangible Amortisation

0

0

0

0

0

0

0

0

Exceptionals

(14,216)

0

(104)

0

0

0

0

0

Other

0

0

1,027

(1,763)

679

(19)

0

0

Operating Profit

(13,297)

15,416

3,410

(8,136)

2,876

25,552

29,313

27,696

Net Interest

(7,081)

(7,577)

(5,568)

(3,798)

(4,390)

(6,614)

(4,688)

(4,570)

Profit Before Tax (norm)

 

 

(6,162)

7,839

(3,081)

(10,171)

(2,193)

18,957

24,625

23,125

Profit Before Tax (FRS 3)

 

 

(20,378)

7,839

(2,158)

(11,934)

(1,514)

18,938

24,625

23,125

Tax

(1,116)

(1,355)

(28)

1,831

278

(2,789)

(5,024)

(4,909)

Profit After Tax (norm)

(7,278)

6,484

(2,082)

(10,103)

(1,236)

16,149

19,600

18,216

Profit After Tax (FRS 3)

(21,494)

6,484

(2,186)

(10,103)

(1,236)

16,149

19,600

18,216

Average Number of Shares Outstanding (m)

17.8

17.8

35.6

92.7

98.6

105.4

125.7

125.7

EPS - normalised (c)

 

 

(40.9)

36.4

(5.8)

(10.9)

(1.3)

15.3

15.6

14.5

EPS - normalised and fully diluted (c)

 

(35.8)

35.1

(5.7)

(10.8)

(1.2)

15.3

15.6

14.5

EPS - (IFRS) (c)

 

 

(120.7)

36.4

(6.1)

(10.9)

(1.3)

15.3

15.6

14.5

Dividend per share (c)

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Gross Margin (%)

42.1

55.3

25.3

3.4

34.1

62.3

66.5

66.1

EBITDA Margin (%)

30.6

50.7

26.4

-9.9

24.2

57.4

61.0

60.2

Operating Margin (before GW and except.) (%)

2.7

35.5

7.4

-36.7

7.4

44.5

54.4

53.9

BALANCE SHEET

Fixed Assets

 

 

56,192

53,684

49,397

57,690

63,685

71,407

90,010

129,211

Intangible Assets

32,197

32,638

30,183

30,525

30,133

31,853

33,383

35,083

Tangible Assets

23,995

21,046

19,214

27,165

33,552

39,554

56,627

94,128

Investments

0

0

0

0

0

0

0

0

Current Assets

 

 

10,460

17,062

19,102

8,436

10,050

37,669

38,369

17,335

Stocks

4,833

7,883

7,425

3,753

5,057

9,567

8,983

8,562

Debtors

2,272

186

5,148

3,298

4,111

3,145

2,953

2,815

Cash

43

4,173

5,069

1,189

145

24,220

25,695

5,220

Other

3,312

4,820

1,460

196

737

737

737

737

Current Liabilities

 

 

(36,001)

(34,149)

(6,179)

(16,227)

(29,189)

(28,380)

(28,083)

(28,034)

Creditors

(5,901)

(3,537)

(2,005)

(1,828)

(6,147)

(5,338)

(5,041)

(4,992)

Short term borrowings

(30,100)

(30,612)

(4,174)

(14,399)

(23,042)

(23,042)

(23,042)

(23,042)

Long Term Liabilities

 

 

(70,307)

(66,995)

(82,054)

(73,053)

(68,864)

(68,864)

(68,864)

(68,864)

Long term borrowings

(61,366)

(58,117)

(71,098)

(62,671)

(59,781)

(59,781)

(59,781)

(59,781)

Other long term liabilities

(8,941)

(8,878)

(10,956)

(10,382)

(9,083)

(9,083)

(9,083)

(9,083)

Net Assets

 

 

(39,656)

(30,398)

(19,734)

(23,154)

(24,318)

11,831

31,432

49,648

CASH FLOW

Operating Cash Flow

 

 

6,347

19,359

9,752

3,992

9,185

29,178

33,763

36,924

Net Interest

(7,081)

(7,577)

(5,568)

(3,798)

(4,390)

(6,614)

(4,688)

(4,570)

Tax

(13)

(27)

(79)

(58)

0

(2,789)

(5,024)

(4,909)

Capex

(118)

(2,391)

(3,025)

(8,605)

(9,556)

(15,700)

(22,575)

(47,920)

Acquisitions/disposals

0

0

0

0

0

0

0

0

Financing

49

(10)

5,424

2,367

11

20,000

0

0

Dividends

0

0

0

0

0

0

0

0

Net Cash Flow

(816)

9,354

6,504

(6,102)

(4,750)

24,075

1,476

(20,475)

Opening net debt/(cash)

 

 

90,607

91,423

84,556

70,203

75,881

82,678

58,603

57,128

HP finance leases initiated

0

0

0

0

0

0

0

0

Other

0

(2,487)

7,849

424

(2,047)

0

0

(0)

Closing net debt/(cash)

 

 

91,423

84,556

70,203

75,881

82,678

58,603

57,128

77,603

Source: Company sources, Edison Investment Research


General disclaimer and copyright

This report has been commissioned by Auriant Mining and prepared and issued by Edison, in consideration of a fee payable by Auriant Mining. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2020 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

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This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

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Frankfurt +49 (0)69 78 8076 960

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60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

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Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by Auriant Mining and prepared and issued by Edison, in consideration of a fee payable by Auriant Mining. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2020 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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