gold water

Making a virtue of dependability

Auriant Mining 17 March 2021 Update
Download PDF

Auriant Mining

Making a virtue of dependability

Q4/FY20 results

Metals & mining

17 March 2021

Price

SEK5.08

Market cap

SEK502m

RUB74.0979/US$; SEK8.4604/US$

Net debt (US$m) at end-December 2020
(including lease liabilities)

67.2

Shares in issue (000s)

98,768

Free float

25.89%

Code

AUR

Primary exchange

Nasdaq First North Premier

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

9.1

(8.4)

62.6

Rel (local)

3.2

(19.9)

(7.4)

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

AGM

11 May 2021

Q121 results

31 May 2021

Q221 results

30 August 2021

Q321 results

29 November 2021

Analyst

Charles Gibson

+44 (0)20 3077 5724

Auriant Mining is a research client of Edison Investment Research Limited

Excluding a write-off of stripping assets and a $0.5m loss on foreign exchange, Q420 pre-tax profits were within 3% of Edison’s prior forecast (see Exhibit 2), despite the company selling c 23.9kg (768oz) less gold than it produced (Edison estimate). This had the effect of depressing revenue by c $1.44m. Nevertheless, for the full year, the transformation in Auriant’s financial fortunes as a result of its development of a CIL plant in place of the former heap leach operation is readily apparent, with a loss after tax of $1.2m in FY19 reversing to become a profit after tax of $10.7m. Similarly, EBITDA for the full year increased by a factor of four compared to FY19, while cash flows from operations increased threefold.

Year end

Revenue (US$m)

PBT*
(US$m)

EPS*
(c)

DPS
(c)

P/E
(x)

Yield
(%)

12/19

29.8

(2.2)

(1.3)

0.0

N/A

N/A

12/20

53.4

17.5

13.9

0.0

3.9

N/A

12/21e

51.5

12.4

9.0

0.0

6.6

N/A

12/22e

55.6

22.0

12.3

0.0

4.9

N/A

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

Steady into FY21 for production…

Auriant produced 953kg gold from Tardan in FY20, which exceeded the upper limit of its guidance of 900–940kg by 1.4%. In FY21, it expects to produce 900–930kg gold from 350–380kt of ore processed (at an implied head grade of c 2.64g/t and an implied yield of c 2.42g/t), including c 36kg from alluvial operations at Solcocon.

…and also costs

Unit costs are expected to remain broadly unchanged in US dollar terms in FY21 compared to FY20, despite some inflationary pressures in local currency terms (given a boom in resources investment in Russia), a slight strengthening in the value of the rouble and the recovery in the oil price since this time last year. Stripping costs delayed from FY20 are also now expected to be incurred in FY21. In the meantime, Auriant continues to remain broadly unaffected by COVID-19.

Valuation: Steady at $1.76/share (SEK14.89)

We have reduced our forecasts for FY21 to reflect the recent weakness in the gold price. However, we expect this to be only a temporary phenomenon and for gold to remain in a fundamental bull market for as long as real interest rates remain below 4%. On the basis that management executes the Kara-Beldyr project according to the operational and financial parameters expected (NB this is a risk already substantially mitigated by management’s success in developing the Tardan CIL project), we estimate that Auriant is capable of generating average annual cash flows of $63.8m, average earnings of $55.2m and average EPS of $0.418 from FY25–34, thus allowing it to pay (average) maximum potential dividends of 47.0c/share in FY26–34. Discounted at our customary 10% discount rate, the value of such a stream of dividends to shareholders has remained steady at $1.76 per share, rising to $2.80/share on the cusp of the company’s maiden dividend in FY26.

Investment summary

Auriant’s Q420 financial results were reported in the context of known production of 203kg from Tardan for the quarter (cf our prior estimate of 186kg) and a largely known gold price. Notwithstanding a maintenance stop, throughput rates were maintained at high levels and a summary of the plant’s performance during the quarter, relative to our prior expectations, is as follows:

Exhibit 1: Tardan CIL plant performance, Q120–Q420

Q120

Q220

Q320

Q420e

Q420

Change
*(%)

Variance
**(%)

FY20

Ore processing (kt)

100

96

95

79

103

+8.4

+30.4

394

Grade (g/t)

3.04

2.69

2.58

2.58

2.35

-8.9

-8.9

2.66

Gold in ore (kg)

303

258

245

203

239

-2.4

+17.7

1,045

Gold in ore (oz)

9,742

8,295

7,880

6,516

7,685

-2.5

+17.9

33,602

Gold produced CIL (kg)

278

243

229

186

203

-11.4

+9.1

953

Gold produced CIL (oz)

8,946

7,804

7,363

5,994

6,517

-11.5

+8.7

30,629

Estimated recovery (%)

91.7

94.2

93.4

92.0

84.9

-9.1

-7.7

91.2

Source: Auriant, Edison Investment Research. Note: *Q420 vs Q320. **Q420 vs Q420e.

Of note were the following:

The plant exceeded its targeted throughput rate of 50tph (for those periods when it is running). For the quarter as a whole, it processed 103kt of ore, which was an excellent achievement given the requirement for a maintenance stop. In general, Auriant is budgeting a throughput rate of 80.0–82.5kt at the Tardan plant to produce an average 225kg gold per quarter. For the full year, the average throughput rate of the plant was 44.9tph.

The grade of ore processed declined to 2.35g/t for the quarter; for the full year it averaged 2.66g/t, which was within 2% of management’s expectation of mined grade for the year of 2.71g/t.

During the quarter, we estimate that metallurgical recovery moderated to 84.9%, in part as a consequence of the maintenance stop, but also as a consequence of processing lower-grade material (which was expected). For the full year, it nevertheless averaged 91.2% (Edison estimate), which exceeded management’s targeted recovery rate of 90% by 1.2 percentage points.

Estimated unit cash costs of production of $56.88/t processed at Tardan in Q420 were 4.0% above our prior expectation of $54.67/t. However, this in part reflected a return to stripping at Tardan after delays earlier in the year as a consequence of a licence restriction, which has now been fully lifted. This in turn translated into an estimated cost of sales (excluding depreciation) at Tardan of $674/oz (sold), which was again below our prior forecast of $717/oz.

For the third quarter in succession, Auriant sold less gold than it produced - in this case, by c 23.9kg, or 768oz (estimate), which would have depressed revenue by c $1.44m. Note that this sales result followed a comparable c 10.5kg (341oz) under-sale of gold in Q320 and a c 23kg (748oz) under-sale in Q220. As a consequence, Auriant reports that it has 56.3kg (1,810oz) of unsold gold included as part of its inventory (worth c $3.1m at the current gold price of $1,726/oz).

Exhibit 2 summarises Auriant’s Q420 results both in the context of the prior quarter’s results and also Edison’s prior expectations. Relative to our prior expectations, the largest variance in Q4 results was a negative variance of $1.8m in ‘other expenses’, which related to a write-off of $1.9m in stripping assets in LLC Tardan Gold, which were accrued in 2017 but are now no longer deemed to be economic. Other negative variances included a $0.5m loss on foreign exchange and a $0.7m negative variance in the tax charge. Note that, in the absence of these first two factors, adjusted pre-tax profits, of $2.6m, would have been within 3% of Edison’s prior forecast (see ‘Q420 (adjusted)’ column in Exhibit 2, below). Nevertheless, compared with the prior year, the transformation in Auriant’s financial fortunes as a result of its development of a carbon- in-leach (CIL) plant in place of the former heap leach operation is readily apparent, with a loss after tax of $1.2m in FY19 reversing to become a profit after tax of $10.7m in FY20. Similarly, EBITDA for the full year increased by a factor of four, while cash flows from operations increased threefold.

Exhibit 2: Auriant results, Q319–Q420e, by quarter ($000s*)

Q319

Q419

FY19

Q120

Q220

Q320

Q420e

Q420

Change
***(%)

Variance
****(%)

Q420

(adjusted)

FY20

FY20e
(prior)

Production

Tardan heap leach (kg)

202.3

95.4

525.0

0

0

0

0

0

N/A

N/A

0

0

0

Tardan CIL (kg)

0.0

110.0

110.0

278

243

229

186

203

-11.4

9.1

203

953

936

Tardan total (kg)

202.3

205.4

635.0

278

243

229

186

203

-11.4

9.1

203

953

936

Solcocon production (kg)

24.1

2.5

54.0

0

0

5

6

7

40.0

16.7

7

12

11

Gold price ($/oz)

1,474

**1,481

1,416

1,585

1,713

1,911

1,876

**1,875

N/A

N/A

**1,875

1,751

1,748

Income statement

Revenue

10,007

8,975

29,762

16,154

12,276

13,832

11,605

11,147

-19.4

-3.9

11,147

53,409

53,867

Cost of sales

6,316

4,830

19,610

5,928

4,459

4,772

4,551

4,165

-12.7

-8.5

4,165

19,324

19,710

Gross profit

3,691

4,145

10,152

10,226

7,817

9,060

7,054

6,982

-22.9

-1.0

6,982

34,085

34,157

Depreciation

(1,142)

(1,652)

(5,011)

(1,647)

(1,846)

(2,278)

(2,333)

(2,283)

0.2

-2.1

(2,283)

(8,054)

(8,104)

General & administration

(547)

(480)

(2,184)

(576)

(567)

(873)

(668)

(929)

6.4

39.1

(929)

(2,945)

(2,684)

Other operating income

24

7

241

53

15

4

0

24

500.0

N/A

24

96

72

Other operating expenses

(140)

(755)

(1,001)

(182)

(8)

(911)

(116)

(1,958)

114.9

1,587.9

0

(3,059)

(1,217)

Impairments etc

0

EBIT

1,886

1,265

2,197

7,874

5,411

5,002

3,937

1,836

-63.3

-53.4

3,794

20,123

22,224

Interest income

0

0

0

0

0

0

0

0

N/A

N/A

0

0

0

Interest expense

(1,066)

(1,200)

(4,390)

(1,584)

(1,597)

(1,339)

(1,231)

(1,151)

-14.0

-6.5

(1,151)

(5,671)

(5,751)

Net interest

(1,066)

(1,200)

(4,390)

(1,584)

(1,597)

(1,339)

(1,231)

(1,151)

-14.0

-6.5

(1,151)

(5,671)

(5,751)

Forex gain/(loss)

448

(240)

679

(147)

128

(225)

(480)

113.3

N/A

0

(724)

(244)

Profit before tax

1,268

(175)

(1,514)

6,143

3,942

3,438

2,706

205

-94.0

-92.4

2,643

13,728

16,229

Tax

(13)

445

(278)

248

1,275

475

416

1,077

126.7

158.9

3,075

2,414

Effective tax rate (%)

(1.0)

(254.3)

18.4

4.0

32.3

13.8

15.4

525.4

3,707.2

3,311.7

22.4

14.9

Profit after tax

1,281

(620)

(1,236)

5,895

2,667

2,963

2,289

(872)

-129.4

-138.1

10,653

13,814

Average no. shares (000s)

98,649

98,649

98,649

98,649

98,649

98,729

98,768

98,768

0.0

0.0

98,699

98,698

Derivatives (000s)

0

0

0

345

0

0

0

0

N/A

N/A

0

0

Fully diluted no. shares (000s)

98,649

98,649

98,649

98,994

98,649

98,729

98,768

98,768

0.0

0.0

98,699

98,698

EPS ($/share)

0.013

(0.006)

(0.013)

0.060

0.027

0.030

0.023

(0.009)

-130.0

-139.1

0.108

0.140

Diluted EPS ($/share)

0.013

(0.006)

(0.013)

0.060

0.027

0.030

0.023

(0.009)

-130.0

-139.1

0.108

0.140

Source: Edison Investment Research, Auriant Mining. Note: *Unless otherwise indicated. **Estimate. ***Q420 vs Q320. ****Q420 vs Q420e.

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 Q420 only $39k was paid in cash income tax out of a total charge on the income statement of $1,077k, with the remainder being offset against the balance sheet amount of the deferred tax asset related to tax losses carried forward. Compared with a normalised estimate of cash flow from the income statement of $1.4m ($0.9m loss plus $2.3m depreciation) therefore, actual cash flow from operations amounted to $4.5m (including evidence of diligent control of working capital), of which only $1.0m was consumed in investing activities and the remainder used to pay interest and to repay debt (including leases).


Guidance and assumptions

Auriant produced 953kg gold from Tardan in FY20, which exceeded the upper limit of guidance of 900–940kg by 1.4%.

FY21

Production

On 21 December, Auriant announced total production guidance for 2021 of 900–930kg gold from 350–380kt of ore processed through the CIL plant from the Pravoberezhniy deposit. That total included an assumed c 30kg being produced at Solcocon, implying production from the Tardan CIL plant of c 885kg, a yield of 2.42g/t and a head grade of 2.64g/t. However, the amount of gold assumed to be produced at Solcocon has since been raised to c 36kg, implying total production from the group of 921kg. This is very similar guidance to that provided for Tardan for FY20 (900–940kg from 350–380kt, implying a yield of 2.37–2.69g/t and a likely plant feed grade of 2.58–2.92g/t) and is consistent with the recent performance of the mining operation and CIL plant, but also reflects the delay to stripping at Tardan in FY20 as a result of changes to mine sequencing necessitated by a licence restriction (which has now been lifted). As in FY20, relatively little seasonal variation in production is anticipated (in sharp contrast to the former heap leach operation). However, Q121 will be slightly affected by the same scheduled maintenance stop as occurred in Q420, albeit this is already reflected in our production expectations for that quarter (see Exhibit 3).

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 has allowed it to minimise its use of diesel generators on site and, on occasion, to cease their use entirely.

Unit costs are nevertheless expected to be broadly unchanged in US dollar terms in FY21 relative to FY20, reflecting some inflationary pressures in local currency terms (given something of a ‘boom’ in resources investment in Russia). At the same time, the rouble has appreciated by 1.4%, from RUB75.1712/US$ at the time of our last note (see Turning into the home straight, published on 23 December 2020) to RUB74.0979/US$ at the time of writing, while the oil price – depending on how you measure it – has either doubled or quadrupled since this (volatile) time last year. In addition, staff costs appear likely to rise as a result of local inflation and salary indexation and, as a consequence, there is expected to be little or no improvement in budgeted exploration expenses. Finally, stripping costs delayed from FY20 are now also expected to be incurred in FY21.

FY21 quarterly forecasts

Based on the production guidance provided by management for FY21 (and with the usual caveat surrounding quarterly predictions), our financial forecasts for Auriant for FY21 by quarter are as shown in Exhibit 3.

Relative to our prior forecasts, the main changes that we have made to our forecasts are:

A reduction in the average gold price, from $1,880/oz to $1,726/oz for the remainder of the year.

An increase in gold production at Solcocon from 30kg to 36kg, such that it is in line with management’s updated guidance.

A small 1.6% increase in our estimate of cash costs at Tardan, from $56.00/t to $56.88/t, to reflect, among other things, the recent strengthening of the rouble, local cost inflation and stripping costs delayed from FY20 now being incurred in FY21.

Exhibit 3: Auriant estimates, Q121–Q421e, by quarter ($000s*)

Previous

Current

Q121e

Q221e

Q321e

Q421e

FY21e

Q121e

Q221e

Q321e

Q421e

FY21e

Production

Tardan heap leach (kg)

0

0

0

0

0

0

0

0

0

0

Tardan CIL (kg)

192

231

231

231

884

192

231

231

231

884

Tardan total (kg)

192

231

231

231

884

192

231

231

231

884

Solcocon production (kg)

0

5

20

5

30

0

6

24

6

36

Gold price ($/oz)

1,880

1,880

1,880

1,880

1,880

1,799

1,726

1,726

1,726

1,741

Income statement

Revenue

11,598

14,249

15,155

14,249

55,251

11,100

13,137

14,136

13,137

51,510

Cost of sales

4,366

5,465

6,109

5,465

21,405

4,494

5,640

6,350

5,640

22,124

Gross profit

7,232

8,784

9,047

8,784

33,846

6,606

7,497

7,786

7,497

29,386

Depreciation

(2,358)

(2,383)

(2,408)

(2,433)

(9,582)

(2,308)

(2,333)

(2,358)

(2,383)

(9,382)

General & administration

(750)

(750)

(750)

(750)

(3,000)

(750)

(750)

(750)

(750)

(3,000)

Other operating income

0

0

0

0

0

0

0

0

0

0

Other operating expenses

(116)

(116)

(116)

(116)

(464)

(116)

(116)

(116)

(116)

(464)

Impairments etc

0

0

EBIT

4,008

5,535

5,773

5,485

20,800

3,432

4,298

4,562

4,248

16,540

Interest income

0

0

Interest expense

(1,163)

(1,088)

(986)

(880)

(4,117)

(1,150)

(1,088)

(1,012)

(931)

(4,181)

Net interest

(1,163)

(1,088)

(986)

(880)

(4,117)

(1,150)

(1,088)

(1,012)

(931)

(4,181)

Forex gain/(loss)

0

0

Profit before tax

2,844

4,447

4,786

4,605

16,683

2,282

3,210

3,550

3,317

12,359

Tax

444

694

746

718

2,602

355

500

553

516

1,923

Marginal tax rate (%)

15.6

15.6

15.6

15.6

15.6

15.6

15.6

15.6

15.6

15.6

Profit after tax

2,401

3,754

4,040

3,887

14,081

1,927

2,710

2,998

2,800

10,436

Average no. shares (000s)

129,518

129,518

129,518

129,518

129,518

98,768

98,768

135,393

135,393

117,081

Derivatives (000s)

0.000

0.000

0.000

0.000

0.000

0

0

0

0

0

Fully diluted no. shares (000s)

129,518

129,518

129,518

129,518

129,518

98,768

98,768

135,393

135,393

117,081

EPS ($/share)

0.019

0.029

0.031

0.030

0.109

0.020

0.027

0.022

0.021

0.089

Diluted EPS ($/share)

0.019

0.029

0.031

0.030

0.109

0.020

0.027

0.022

0.021

0.089

Source: Edison Investment Research. Note: *Unless otherwise indicated.

Valuation steady at $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 and the Kara-Beldyr projects according to the operational and financial parameters anticipated, we estimate that Auriant is capable of generating average cash flows of $63.8m, average earnings of $55.2m and average EPS of 41.8c in the 10 years from FY25–34 (inclusive), thus allowing it to pay maximum potential dividends to shareholders of 47.0c per share in the period FY26–34. Discounted at our customary 10% discount rate, such a stream of dividends has a value of $1.76 per share (cf $1.71/share previously), as shown in the exhibit below, rising to $2.80/share on the cusp of the company’s maiden dividend in FY26.

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

Source: Edison Investment Research

Our approach to gold price forecasting, and the gold prices underlying our earnings and dividend assumptions, is set out in our note, A golden future, published in June 2020. Readers should also note that our valuation specifically excludes any value attributable to Solcocon beyond FY21 on account of the variable nature of alluvial mining operations. However, it is possible that activities at Solcocon may be reconfigured in due course 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 relating to management’s ability to bring the Kara-Beldyr project in particular to account within its geographical jurisdiction at the required technical and economic parameters (note however that this risk has already been substantially mitigated by management’s success in developing the Tardan CIL project). Once in production, these risks will reduce and be partially replaced by others, such as commercial, commodity price, foreign exchange and global economic risks.

One specific risk, however, that bears further, immediate consideration from an empirical perspective is funding. In this particular case, our valuation sensitivity to the price at which Auriant raises an assumed $20m in equity for Kara-Beldyr (assumed towards the middle of this year) is shown below:

Exhibit 5: Valuation sensitivity to equity funding price

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

-40.9

-31.1

-21.3

-11.4

-1.6

u/c

8.3

18.1

28.0

Equity fund-raising price (SEK)

3.00

3.50

4.00

4.50

5.00

5.08

5.50

6.00

6.50

Valuation ($/share)

1.50

1.58

1.65

1.70

1.75

1.76

1.79

1.83

1.86

Valuation (SEK/share)*

12.69

13.37

13.96

14.38

14.81

14.89

15.14

15.48

15.74

Change cf ‘base case’ (%)

-14.8

-10.2

-6.3

-3.4

-0.6

u/c

1.7

4.0

5.7

Source: Edison Investment Research. Note: *Converted at the prevailing forex rate of SEK8.4604/$.

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 compared to 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 $2.19/share (albeit with a correspondingly higher maximum debt level of $79.6m (cf $56.2m in the ‘base case’ scenario, in the ‘Financials’ section, below)).

Financials

At end-December 2020, Auriant had net debt of $66.9m on its balance sheet, but $67.2m if lease liabilities are included; this is ostensibly flat compared with the $67.0m that it had on its balance sheet at end-September, but still $5.7m less than the $72.9m that it had on its balance sheet at end-June (also including leases payable). Assuming the company raises an additional SEK169.2m ($20m) in cash via equity funding in the near future, we forecast its net debt will evolve as follows until FY25, before being eliminated in FY26:

Exhibit 6: Auriant forecast net debt evolution, FY20–25e ($m)

End-year

FY20

FY21e

FY22e

FY23e

FY24e

FY25e

Net debt (current estimates)

66.9

42.4

40.3

56.2

51.6

16.3

Source: Auriant Mining accounts, Edison Investment Research

Note that our estimate of Auriant’s maximum (future) net debt requirement of $56.2m ($52.0m previously) at end-FY23 will equate to a leverage ratio (net debt/(net debt+equity)) of 50.5%.

Current COVID-19 situation

Mining operations at Tardan continue to operate, to all intents and purposes, 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 employee 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

2020

2021e

2022e

December

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

 

 

33,429

43,380

33,532

17,373

29,762

53,409

51,510

55,577

Cost of Sales

(19,360)

(19,391)

(25,061)

(16,790)

(19,610)

(19,324)

(22,124)

(17,392)

Gross Profit

14,069

23,989

8,471

583

10,152

34,085

29,386

38,185

EBITDA

 

 

10,242

21,987

8,846

(1,714)

7,208

31,236

25,922

35,185

Operating Profit (before amort. and except.)

 

919

15,416

2,487

(6,373)

2,197

23,182

16,540

25,403

Intangible Amortisation

0

0

0

0

0

0

0

0

Exceptionals

(14,216)

0

(104)

0

0

(3,059)

0

0

Other

0

0

1,027

(1,763)

679

(724)

0

0

Operating Profit

(13,297)

15,416

3,410

(8,136)

2,876

19,399

16,540

25,403

Net Interest

(7,081)

(7,577)

(5,568)

(3,798)

(4,390)

(5,671)

(4,181)

(3,396)

Profit Before Tax (norm)

 

 

(6,162)

7,839

(3,081)

(10,171)

(2,193)

17,511

12,359

22,008

Profit Before Tax (FRS 3)

 

 

(20,378)

7,839

(2,158)

(11,934)

(1,514)

13,728

12,359

22,008

Tax

(1,116)

(1,355)

(28)

1,831

278

(3,075)

(1,923)

(5,757)

Profit After Tax (norm)

(7,278)

6,484

(2,082)

(10,103)

(1,236)

13,712

10,436

16,251

Profit After Tax (FRS 3)

(21,494)

6,484

(2,186)

(10,103)

(1,236)

10,653

10,436

16,251

Average Number of Shares Outstanding (m)

17.8

17.8

35.6

92.7

98.6

98.7

115.4

132.1

EPS - normalised (c)

 

 

(40.9)

36.4

(5.8)

(10.9)

(1.3)

13.9

9.0

12.3

EPS - normalised and fully diluted (c)

 

 

(35.8)

35.1

(5.7)

(10.8)

(1.2)

13.9

9.0

12.3

EPS - (IFRS) (c)

 

 

(120.7)

36.4

(6.1)

(10.9)

(1.3)

10.8

9.0

12.3

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

63.8

57.0

68.7

EBITDA Margin (%)

30.6

50.7

26.4

-9.9

24.2

58.5

50.3

63.3

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

2.7

35.5

7.4

-36.7

7.4

43.4

32.1

45.7

BALANCE SHEET

Fixed Assets

 

 

56,192

53,684

49,397

57,690

63,685

54,896

59,402

72,199

Intangible Assets

32,197

32,638

30,183

30,525

30,133

23,238

24,768

26,468

Tangible Assets

23,995

21,046

19,214

27,165

33,552

31,658

34,634

45,731

Investments

0

0

0

0

0

0

0

0

Current Assets

 

 

10,460

17,062

19,102

8,436

10,050

10,688

37,696

40,761

Stocks

4,833

7,883

7,425

3,753

5,057

7,449

8,585

9,263

Debtors

2,272

186

5,148

3,298

4,111

1,455

2,822

3,045

Cash

43

4,173

5,069

1,189

145

423

24,927

27,092

Other

3,312

4,820

1,460

196

737

1,361

1,361

1,361

Current Liabilities

 

 

(36,001)

(34,149)

(6,179)

(16,227)

(29,189)

(16,499)

(17,577)

(17,188)

Creditors

(5,901)

(3,537)

(2,005)

(1,828)

(6,147)

(2,434)

(3,512)

(3,123)

Short term borrowings

(30,100)

(30,612)

(4,174)

(14,399)

(23,042)

(14,065)

(14,065)

(14,065)

Long Term Liabilities

 

 

(70,307)

(66,995)

(82,054)

(73,053)

(68,864)

(61,649)

(61,649)

(61,649)

Long term borrowings

(61,366)

(58,117)

(71,098)

(62,671)

(59,781)

(53,306)

(53,306)

(53,306)

Other long term liabilities

(8,941)

(8,878)

(10,956)

(10,382)

(9,083)

(8,343)

(8,343)

(8,343)

Net Assets

 

 

(39,656)

(30,398)

(19,734)

(23,154)

(24,318)

(12,564)

17,872

34,122

CASH FLOW

Operating Cash Flow

 

 

6,347

19,359

9,752

3,992

9,185

25,714

24,919

34,063

Net Interest

(7,081)

(7,577)

(5,568)

(3,798)

(4,390)

(5,671)

(4,181)

(3,396)

Tax

(13)

(27)

(79)

(58)

0

(674)

(1,923)

(5,757)

Capex

(118)

(2,391)

(3,025)

(8,605)

(9,556)

(3,822)

(14,310)

(22,745)

Acquisitions/disposals

0

0

0

0

0

0

0

0

Financing

49

(10)

5,424

2,367

11

(272)

20,000

0

Dividends

0

0

0

0

0

0

0

0

Net Cash Flow

(816)

9,354

6,504

(6,102)

(4,750)

15,275

24,504

2,165

Opening net debt/(cash)

 

 

90,607

91,423

84,556

70,203

75,881

82,678

66,948

42,444

HP finance leases initiated

0

0

0

0

0

0

0

0

Other

0

(2,487)

7,849

424

(2,047)

455

0

(0)

Closing net debt/(cash)

 

 

91,423

84,556

70,203

75,881

82,678

66,948

42,444

40,279

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 2021 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

1185 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

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 2021 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

1185 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

Share this with friends and colleagues