AUDITED FINAL RESULTS YEAR ENDED 31 DECEMBER 2021

RNS Number : 7269Q

Amur Minerals Corporation

30 June 2022

 

30 June 2022 

AMUR MINERALS CORPORATION

("Amur", the "Company" or the Group)

AUDITED FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2021

2021 Highlights:

· Advancing the TEO Project document for the Kun-Manie Project, and submission of the draft report to the expert commission of the State Committee on Reserves ("GKZ").

· Sale of Amur's 14% interest in the Nathan River Resources ("NRR") Roper Bar iron ore operation in Australia.

· Continued M&A effort to identify a partner and / or buyer of the Kun-Manie nickel copper sulphide project located in the Russian Far East. 

Chairman's Statement

It is with pleasure that I update you on the activities of the Company for the twelve month period to 31 December 2021, as well as the period since the year end, including recent global events which have impacted us.  Along with all worldwide corporate entities, Amur Minerals Corporation (the "Company") had to balance and endure the challenges related to the Covid-19 pandemic during the year and the more recent, post 2021, developing geopolitical situation in the Ukraine.  Broadly, our major areas of focus during the year included:

· Advancing the TEO Project document for the Kun-Manie Project, compiled by the expert team of Oreoll Ltd. ("Oreoll") and submission of the draft report to the expert commission of the State Committee on Reserves ("GKZ"). This is a document required by the Russian Federation which was completed post 2021 and maintains our compliance with the Russian permitting regime.

· Selling our 14% interest in the Nathan River Resources ("NRR") Roper Bar iron ore operation in Australia. Grossing US$5.9 million with a profit of US$0.9 million.

· The continued M&A effort to identify a partner and / or buyer of the Kun-Manie nickel copper sulphide project located in the Russian Far East.  A bona fide purchase offer being ultimately rejected in May 2022.

The strategic plan for 2022 was to carry out the work plan and strategy to maintain the extraction rights to its 100% controlled Kun-Manie project and this continues to be our prime objective.

However, the current geopolitical situation in Ukraine has radically altered our strategy for 2022.  It is therefore important that we also provide key additional information as to the impact of Russia's "Special Military Operation" ("SMO").  Given the changing situation regarding the SMO, the 2022 strategy may require rapid adjustments depending on the actions of various nation states and the Russian Federation ("RF").  This has not yet impacted our in-Russia operational activities but has substantially altered our activities related to our M&A strategy.

Looking at our 2021 activities in isolation, we present the Annual Report and Accounts for the year 31 December 2021. Importantly, we note that over the course of the year 2021, the Company continued to remain debt-free, and its cash reserve increased 2.4 times from US$2,790,000 (1 January 2021) to US$6,682,000 (31 December 2021).

Kun-Manie Nickel-Copper Sulphide Project

Kun-Manie is and remains our flagship project as one of the largest undeveloped nickel - copper sulphide projects in the world.  It is located near the three largest nickel consuming nations of Japan, Korea and China and we will continue to focus on this project.

Our primary objective is to maintain the Group's 100% production rights at Kun-Manie.  We shall continue to complete specific work programmes per the terms and conditions of the licence to maintain our production rights.  Entering 2021, two objectives remained to be completed.  The first was the completion of an expert commission report called a TEO Project which was scheduled for completion at the end of 2021 and completed in H1 2022.  Thereafter, a Mine Plan document must also be completed.

Production approval for the Kun-Manie project requires RF approvals based on Russian protocols.  These approvals cannot be obtained based on "western standard" Feasibility, Definitive or Bankable studies.  The approvals are derived from several RF agencies based on Russian standard design work completed by certified institutes.  It has always been a priority for us to obtain suitable and approvable Russian documentation for obtaining the required approvals.  This approach ensures that we maintain the integrity of and production rights to the licence and have a fully suitable and approved, ready to operate mining operation at the end of the day.  This part of our strategy remains unchanged from 2021.

For clarification, it is important to understand what a TEO Project is.  It is a feasibility study level document compiled by certified Russian Federation experts using specific state-defined procedures and reporting requirements and is ultimately approved by the State Committee on Reserves ("GKZ").  The document addresses all project disciplines and is similar to the contents of western feasibility study.  It is to include all available technical results and study work specific to the project.  For compilation of this TEO Project report, we contracted an experienced and independent expert company (Oreoll LLC) who warranted it would diligently complete and defend the results submitted to the GKZ. Oreoll's first submission date on our behalf was 20 August 2021. 

In the evaluation process, the first submission of the TEO Project is considered a draft document.  A GKZ commission of experienced, certified and approved experts covering all project disciplines is then assembled and each expert examines specific sections of the report relevant to their expertise.  Discussions between Oreoll and the GKZ experts are held and Oreoll is directed to finalise the negotiated document.  This final report covers the design basis of the project with regard to operating parameters, design considerations, operating and capital cost estimates, infrastructure requirements and financial analysis. 

In a post 2021 event, the Company announced the final TEO Project results in an RNS released 7 June 2022.  The key highlights were:

· The TEO Project was compiled by Oreoll LLC and GKZ Russian Federation certified experts from all project disciplines.

· The GKZ expert commission approved a 19-year open pit operational design with revenue generation derived from two saleable concentrates allowing for the recovery of both copper and nickel.  Minor payable amounts for gold, platinum and palladium will also be recovered.

· The design parameters maximise revenue generation to the RF based on fully loaded taxation and royalty schemes. The total Net Present Value ("NPV_10%") deliverable to the RF is projected to be US$ 628 million.  This approach does not optimise the financial return to the project operator which is addressed during the next and final requirement of the mine planning stage for the licence.

· The GKZ commission reviewed Oreoll's submission. Necessary adjustments allowing for the identification and approval of operational parameters and considerations, associated capital and operating costs, the revenue generation from the sale of individual nickel and copper concentrates and selected commodity prices were defined.  As a result of the expert evaluations, a Life of Mine ("LOM") cutoff grade ("COG") was defined to be 0.2% Ni.  The annual nominal production rate of 12.4 million ore tonnes was selected.

· Lerchs Grossman open pit production analyses including mining loses and dilution indicate the average LOM ore production grades for delivery to the sulphide flotation plant will be 0.66% Ni, 0.18% Cu, 0.015% Co, 0.05 grammes per tonne ("g/t") Au, 0.90 g/t Ag, 0.14 g/t Pt and 0.14 gt/ Pd.  The total cumulative LOM RF National Association of Subsoil Examination ("NAEN") certified Reserve totals 187.1 million ore tonnes.  Approximately 4.6 cubic metres ("m³") (13.8 tonnes) of waste will be extracted per ore tonne.

· The Oreoll and GKZ experts have determined the LOM capital cost estimate is US$ 1.92 billion with US$ 1.14 billion allocated as preproduction and construction costs, US$ 698 million in sustaining costs and US$ 85 million in working capital.  The increase in the capital cost estimate from previously reported projections is attributable to the more than doubling of the previous annual operational capacity impacting the expansion of the open pit mining fleet, plant expansion and the addition of a copper recovery circuit within the process plant, tailings storage expansion, power plant requirements and the need to construct a dual carriage way access road capable of handling the increased mine support and concentrate transport needs.  All capital expenditure sectors include contingencies specific to the project and its location.

· Operating costs per ore tonne are projected to be US$ 42.32 including ore and waste mining costs, depreciation and royalties.

· Accounting for both flotation plant metallurgical losses and adjustments for off take fees, the LOM recovered payable metals from the two concentrates total 627 thousand nickel tonnes, 177 thousand copper tonnes, 1.5 tonnes of gold, 3.3 tonnes of platinum and 3.5 tonnes of palladium.  The payable metal schedules and all fees are based on confidential metal trading schedules provided by two reputable, internationally recognised industry metals traders.

· Nickel and copper account for 95% of the LOM revenue obtained from the nickel and copper concentrate products.  The GKZ approved conservative prices for the primary revenue generators of nickel and copper were US$ 14,468 per Ni tonne (US$ 6.56 per pound) and US$ 6,758 per Cu tonne (US$ 3.07 per pound).  Minor credits were included for gold (US$ 58.90 / g), platinum (US$ 34.35 / g) and palladium (US$ 80.75 / g).  Metal prices for nickel and copper as at 28 June 2022 were US$10.82 and US$3.86, respectively.

· Using these conservative/low metals prices across the 19 year production schedule, the NPV_10%to the Company is US$ 333 million with an Internal Rate of Return ("IRR") of 15.6%.  The payback period for the 12.4 million ore tonne per year operation is projected to be 5.5 years.

The most important component derived within the GKZ approved TEO Project is the registration of the mining reserve.  It is from these final certified reserves that a Mine Plan will be developed.  For your convenience, the table below defines the 19 year GKZ Life of Mine NAEN reserve by tonnages and grades to be delivered to the mill.

Mine Delivered Mill Feed NAEN Reserve
Dilution and Mining Losses Included
COG 0.2% Ni
Commodity	Factor	In Balance - B + C1 + C2
		0.2% Ni COG	Grade
Mill Feed Tonnes	T	187,134,000
Ni	T	1,233,697	0.66%
Cu	T	343,045	0.18%
Co	T	25,518	0.014%
Pt	Kg	25,709	0.14 g/t
Pd	Kg	26,547	0.14 g/t
Au	Kg	8,964	0.05 g/t
Ag	Kg	168,505	0.90 g/t

JORC resources and reserves are not accepted by the Russian Federation, however, we have provided JORC estimates over the life of our exploration programme.  We implemented this approach in accordance with CRIRSCO recommendations which allow shareholders to measure the progress of resource expansion of our resource with time.  Though not required, CRIRSCO recommend this approach be taken for publicly listed companies such as Amur.

With the TEO Project now complete, our next phase is to compile the Mining Plan due mid-year 2023, which leads to obtaining construction, mining and operational approvals and funding considerations.

Kun-Manie -Russia's SMO, Sanctions and Orders

Entering 2021, our strategy regarding funding was based on the knowledge that the preproduction and construction start-up capital expenditure would be relatively large (greater than US$ 0.5 billion) given the remote location of the project.  We anticipated that project funding would require a consortium of Russian and international funding sources.  The strategy throughout 2021 and into the start of 2022 consisted of:

· Completion of all required conditions per the terms of the licence including the mandatory TEO Project (Feasibility Study), review by the State Committee on Reserves ("GKZ") and the subsequent mandatory Mine Plan work also requiring certified Russian institutes input and approvals.

· Detailed engineering and design work completed to Russian standards thus making it suited for approvals by the specific authorities and meeting the investment requirements of Russian financial institutions.

· In anticipation that we would have to raise substantial funds from both inside and outside of Russia to fully support financing, a western bankable study will also be compiled.  Potential outside funding sources will include internationally recognised financial institutions and intermediate metal off-takers.  Based on discussions with western mining engineering companies experienced in Russia, the western study should be a hybrid product based on the Russian documentation but compiled in a manner meeting both Russian and international requirements.  The best time to undertake this western work is during the later stages of the assembly of the Russian banking study following the TEO Project.

In Q1 22, we revisited the funding approach of our strategy due to the SMO in Ukraine.  Sanctions are now in place and continue to be introduced by various nation states.  These target Russian banking institutions, select Russian companies and numerous individuals associated with mineral and industrial activities.  In response, the Russian Federation issued and continues to issue counter measures (Orders).  The main Order restricts the ability of companies to operate within Russia through strict currency controls restricting the outflow of funds from Russia.

To this point, our subsidiary, AO Kun-Manie a Russian company, has functioned on an unhindered basis.  The sanctions and orders have, however, impacted the Group's activities.

AMC - The SMO, Sanctions and Orders

In 2020, Amur developed a shortlist of potential partners or purchasers wherein a Russia-based project would be of interest.  The list included Russian and internationally based mining companies, investment groups, financial institutions, metal trading groups and electric vehicle battery manufacturers.  Discussions were held with potential partners and confidentiality agreements were signed with interested parties. 

In Q2 21 and Q3 21, the M&A market relating to nickel and copper sulphide projects improved due to the increasing Green Energy interest and electric vehicle battery demand.  Three parties (one western and two Russian) demonstrated bona fide interest in funding or purchasing Kun-Manie. 

Medea Naturals Resources ("MNR") were contracted to establish a Fair Market Value ("FMV") for the sale of Kun-Manie.  Based on their survey and the analysis of world-wide nickel exploration and development project transactions, they established a transaction sale price ranging from US$106 million to US$131 million.  The majority of the transactions surveyed were external to Russia, but focused on an anticipated yield earned by a project sale.

Negotiations advanced with all three parties and funding alternatives and purchase options were tabled. Of the three, a proposed outright purchase of Kun-Manie was selected as it offered the highest consideration available to the Company, approaching fair market value. Transaction documentation was initiated and neared completion in late February 2022.

On 24 February 2022, Russia initiated the SMO.  The action resulted in the immediate implementation of sanctions and counter measure responses by the Russian Government on 28 February, 1 March and 8 March of 2022.  The combined actions had an immediate impact on the proposed sale of Kun-Manie, voiding the agreed terms of the nearly final Share Purchase Agreement ("SPA").  The buyer and Amur agreed to monitor the situation and revisit the SPA once the full impact of the sanctions and orders were understood. 

Upon completion of a sanction and order review period, negotiations were resumed to modify the SPA allowing for all constraints to be considered.  Specific considerations and impacts to the transaction and available alternatives is a transaction structure as follows:

· A transaction with a Russian entity or individual can be implemented if they are not sanctioned.  Searches by our Russian and UK solicitors confirmed the buyer was free from restriction, and regular reviews were conducted as sanctions are frequently updated.  The buyer remained unsanctioned and we were able to modify the SPA.

· Russian Government implemented Orders restricting foreign currency flow out of Russia will have the greatest impact.  Foreign exchange payments may be made with the approval of a newly formed Currency Control Committee and this committee has final approval on the quantity and timing of currency flow from Russia.  The buyer's funds would originate from Russia, and therefore must be approved by the committee.

· For the transaction, the Company requires legal support using Russian solicitors to ensure that the transaction will meet all regulatory and statutory considerations.  Many legal entities have exited Russia, including our former Russian solicitors who were involved in negotiations.  We had anticipated that this might occur and have already engaged a highly regarded, experienced Russian law firm, Birch Legal.

· In the event that Amur is unable to complete a transaction with the buyer, the SMO has substantially and adversely impacted the opportunity to sell and develop Kun-Manie.  Sanctions have eliminated many companies, including mining entities, some off-take metal marketers and all sanctioned Russian companies as potential business counterparts.  Additionally, the larger and well-funded Russian resource banks and fund sources are predominantly now sanctioned.  International funding sources are avoiding participation in Russian based projects.

May 2022 Kun-Manie Transaction Offer

From late March through early May of 2022, a revised SPA was negotiated and executed with the buyer.  All necessary associated documentation was completed, including the Circular for shareholder approval of the offer.  For a total consideration of US$105 million, Stanmix Holding Limited offered to purchase AO Kun-Manie per the following terms.

· US$15 million upon Completion of the Transaction (to occur within 60 days of signing the SPA)

· US$10 million within 12 months of the date of the SPA

· US$50 million within 48 months of the date of the SPA

· US$30 million, payable in ten annual installments of US$3 million commencing in 2027

Requiring shareholder approval, a General Meeting was set for 25 May 2022.  At the request of attending shareholders, our Chief Executive Officer ("CEO"), Robin Young conducted a Q&A session related to the transaction.  Subsequent to the Q&A session, the offer from Stanmix was rejected.  The primary reasons from shareholders attending were:

· Payment terms extended over to long a period.

· No absolute guarantee that all payments would be forthcoming.

· Initial payments were insufficient.

· Specific dividends to shareholders were not identified.

Robin Young was asked to revisit the M&A potential given the concerns of the attending shareholders.  As at the date of this report we continue to be in discussions with Stanmix.

Of special note, the beneficial underlying owner of Stanmix (Mr. Vladislav Sviblov) entered into an agreement to purchase the mining assets of Kinross Gold in Russia.  This transaction was announced and completed by Kinross Gold on 15 June 2022.  Based on renegotiated terms, the total consideration purchase price reported by Kinross was US$340 million, a reduction of nearly 50% from the original offer.  This is the first transaction completed by a Russian buyer with a western owner since the SMO, introduction of sanctions and the counter measure responses of the Russian Federation.

Impact of Kun-Manie Sale On The Company

In the event of a sale of Kun-Manie is successful, the Company will be classified as a cash shell by the Alternative Investment Market ("AIM").  During the immediately following six months, the Company will need to acquire another project or company via a Reverse Take Over ("RTO") to maintain trading on AIM.  Should an RTO not be completed within that timescale, the Company will be suspended from trading and if after six months in suspension with no RTO having occurred, the Company would be delisted.  In anticipation of a sale, we are examining the acquisition of projects, particularly within more favourable mining jurisdictions as a part of our strategy.

An alternative scenario is to reclassify the Company as an investment vehicle which would require the Company to successfully raise gross placing proceeds of at least £6.0 million.

NRR Roper Bar Iron Ore Transaction

In 2020 the Group acquired a Convertible Loan Note ("CLN") on Nathan River Resources Pte Limited ("NRR") which owns the Roper Bar Iron Ore Project ("Roper Bar") totalling US$4,670,000. Roper Bar is a large established iron ore deposit in the Northern Territory of Australia with a defined JORC resource of 446,000,000 tonnes at 39.9% Fe and a JORC reserve of 4,760,000 tonnes at 60.1% Fe. NRR had re-established the mining and shipping of iron ore to China under an offtake agreement with Glencore.

On 3 July 2021, the Group announced that it sold its wholly owned subsidiary Carlo Holdings Limited ("CHL"), the direct owner of the NRR CLN, for a cash consideration of US$5,892,000 to Hamilton Investments Pte. Ltd., a subsidiary of Britmar (Asia) Pte Ltd. The Group recognised a profit on the sale of US$915,000.  In addition, the CLN carried an interest-bearing coupon at 14% which was payable to the Company. Amur received US$530,000 during its period of ownership, of which US$327,000 was received in the year 2021.

Since the completion of the sale, in November 2021, the Roper Bar project was placed into care and maintenance.

Financial Overview

As at 31 December 2021 the Company had cash reserves of US$6,682,000, up from US$2,790,000 at the start of 2021 and remains debt free.

The increase in cash reserves derives largely from the sale of the Company's wholly owned subsidiary CHL for cash consideration of US$6,137,019. As a result, the Company has not found it necessary to undertake any equity placings or other fundraising activities during the period. The Group also received coupon interest payments of 14% from the NRR CLN held within CHL. During the reporting period US$327,000 was received.

Administration expenses for the 2021 year totalled US$1,790,000 (2020: US$3,083,000). The main reasons for the decrease in administration expenses was the reduction in non-executive directors from four to three, saving US$177,000, a reduction in professional fees of US$150,000 as a result of completing the TEO in mid-2022 and a lower share-based payment expense in 2021 of $105,000 compared to $485,000 in 2020. Additionally, administration expenses of US$367,000 relating to Kun-Manie were presented within discontinued operation as at 31 December 2021 in line with the Board's plans to sell the entity.

Other Comprehensive Income was charged with a translation loss of US$138,000 (2020: US$4,123,000) due to the weakening of the Russian rouble to the US dollar. Expenditure on exploration was US$703,000 (2020: US$1,200,000) as the Group completed and submitted the TEO Project for review in August 2021. Exploration assets realised an exchange loss of US$585,000 (2020: exchange loss US$3,840,000) also due to the weakening of the Russian rouble to the US dollar.

An aggregate of £254,000 in cash was received, post year end from the execution of warrants in late January / early February 2022. 

Covid-19

During early 2021, the Group continued to care for the safety of its personnel by implementing special measures to protect its workforce while at the same time ensuring business continuity. The Company continued to operate effectively over an extended period of time without requiring regular access to physical offices, slowly reverting to pre-Covid-19 operating conditions as the situation eased towards the end of 2021.

Covid-19 created significant uncertainty and disruption in the financial markets. However, the Company has not realised a negative impact of Covid-19 on its ability to conduct business across the Group including the sale of its iron ore subsidiary.  With the virus apparently in the rear view, the Directors will continue to monitor developments.

Outlook

The Company's primary objectives for 2022 includes the completion of the TEO Project and continuing the acquisition of all necessary information for commencement of the Mining Plan and the required incumbent study work.

Work will continue at a level allowing for the compilation of bankable feasibility studies. Given that a mining operation within Russia requires Russian sourced and certified work to obtain operational permits and access, the initial focus is on the generation of a Russian bankable study.  Follow-on compilation of a hybrid western bankable study is also planned.  This hybrid study will include the Russian study work with necessary considerations to allow for the document to support external Russia funding sources.

Both documents will include the technical, environmental, and economic detail for needed by unsanctioned Russian and external Russia institutional investors to advance funding for mine construction and advancement into production. Completion of both documents will require considerable interaction between Russian and international organisations to complete an international BFS for consideration.

We shall also continue to pursue the sale of the Kun-Manie project. The most likely buyer will be a Russian entity due to the current geopolitical situation in Ukraine. 

On behalf of the Board of Directors, I would like to thank all the staff for their dedication, loyalty and hard work throughout this period in getting the TEO Project organised and progressing it toward its completion.

Market Abuse Regulation (MAR) Disclosure

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.

Enquiries:

Company Amur Minerals Corp.	Nomad and Broker S.P. Angel Corporate Finance LLP	Public Relations BlytheRay
Robin Young CEO	Richard Morrison Adam Cowl	Megan Ray Tim Blythe
[phone]	[phone]	[phone]

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2021

	2021 US$'000	2020 US$'000
Non-current assets
Intangible Assets	-	23,542
Property, plant and equipment	-	452
Financial assets at fair value through profit and loss	-	5,255
Total non-current assets	-	29,249
Current assets
Inventories	-	207
Trade and other receivables	109	158
Cash and cash equivalents	6,682	2,790
Total current assets	6,791	3,155
Non-current assets classified as held for sale	24,447	-
Total assets	31,238	32,404
Current liabilities
Trade and other payables	968	913
Total current liabilities	968	913
Non-current liabilities
Rehabilitation provision	-	141
Total non-current liabilities	-	141
Liabilities directly associated with non-current assets classified as held for sale	159	-
Total liabilities	1,127	1,054
Net assets	30,111	31,350
Equity
Share capital	80,449	80,449
Share premium	4,278	4,278
Foreign currency translation reserve	(17,612)	(17,474)
Share options reserve	512	577
Retained deficit	(37,516)	(36,480)
Total equity	30,111	31,350

CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2021

	2021 US$'000	2020 US$'000
Administrative Expenses	(1,790)	(3,083)
Operating loss	(1,790)	(3,083)
Finance Income	-	205
Finance costs	-	(104)
Gain on revaluation of assets held at fair value through profit and loss*	-	423
Loss on early redemption	-	(109)
Loss before taxation	(1,790)	(2,668)
Tax Expense	-	-
Loss for the year from continuing operations	(1,790)	(2,668)
Profit from discontinued operations - assets sold	956	-
Loss from discontinued operations - assets held for sale	(372)	-
Loss for the year	(1,206)	(2,668)
Loss attributable to: -  Owners of the parent	(1,206)	(2,668)
Loss per share (cents) from continuing operations attributable to owners of the Parent - Basic & Diluted	(0.13)	(0.25)
Earnings per share (cents) from discontinued operations attributable to owners of the Parent - Basic & Diluted	(0.04)	-

*Assets held at fair value were disposed of in the period and have been included in discontinued operation for the year ended 31 December 2021

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2021

		2021 US$'000	2020 US$'000
Loss for the year		(1,206)	(2,668)
Other comprehensive loss
Items that may be classified to profit or loss:
Exchange differences on translation of foreign operations		(138)	(4,123)
Total other comprehensive loss for the year		(138)	(4,123)
Total comprehensive loss for the year attributable to: -  Owners of the parent		(1,344)	(6,791)

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2021

	2021		2020
	US$'000	US$'000	US$'000	US$'000
Cash flows from operating activities
Payments to suppliers and employees		(1,833)		(2,196)
Net cash outflow used in operating activities		(1,833)		(2,196)
Cash flow from investing activities
Payments for exploration expenditure	(426)		(564)
Loans granted	-		(4,658)
Sale of investments	6,137		-
Interest received	327		43
Net cash generated from/(used in) investing activities		6,038		(5,179)
Cash flow from financing activities
Cash received on issue of shares, net of issue costs	-		10,005
Issue of convertible loans, net of issue costs	-		607
Repayment of convertible loans	-		(720)
Net cash generated from financing activities		-		9,892
Net Increase/(decrease) in cash and cash equivalents		4,205		2,517
Cash and cash equivalents at beginning of year		2,790		398
Exchange differences on cash and cash equivalents		(313)		(125)
Cash and cash equivalents at end of year		6,682		2,790

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2021

	Share Capital US$'000	Share Premium US$'000	Foreign Currency Translation Reserve US$'000	Share Options Reserve US$'000	Retained Deficit US$'000	Total Equity US$'000
Balance at 1 January 2020	69,510	4,790	(13,351)	1,136	(34,948)	27,137
Year ended 31 December 2020:
Loss for the year	-	-	-	-	(2,668)	(2,668)
Other comprehensive loss
Exchange differences on translation of foreign operations	-	-	(4,123)	-	-	(4,123)
Total comprehensive loss for the year	-	-	(4,123)	-	(2,668)	(6,791)
Issue of share capital	10,063	(512)	-	-	-	9,551
Conversion warrants	876	-	-	-	-	876
Options charge for the year	-	-	-	577	-	577
Options expired	-	-	-	(1,136)	1,136	-
Balance at 31 December 2020	80,449	4,278	(17,474)	577	(36,480)	31,350
Balance at 1 January 2021	80,449	4,278	(17,474)	577	(36,480)	31,350
Year ended 31 December 2021:
Loss for the year	-	-	-	-	(1,206)	(1,206)
Other comprehensive loss
Exchange differences on translation of foreign operations	-	-	(138)	-	-	(138)
Total comprehensive loss for the year	-	-	(138)	-	(1,206)	(1,344)
Issue of share capital	-	-	-	-	-	-
Conversion warrants	-	-	-	-	-	-
Options charge for the year	-	-	-	105	-	105
Options expired	-	-	-	(170)	170	-
Balance at 31 December 2021	80,449	4,278	(17,612)	512	(37,516)	30,111

1.  Basis of prePARATION

a)  General Information

Amur Minerals Corporation is incorporated under the British Virgin Islands Business Companies Act 2004. The registered office is Kingston Chambers, P.O. Box 173, Road Town, Tortola, British Virgin Islands.

The Company and its subsidiaries ("Group") locates, evaluates, acquires, explores and develops mineral properties and projects with its primary asset being located in the Russian Far East.

The Company is also the 100% owner of Irosta Trading Limited ("Irosta"), an investment holding company incorporated and registered in Cyprus. Irosta holds 100% of the shares in AO Kun-Manie ("Kun-Manie"), an exploration and mining company incorporated and registered in Russia, which holds the Group's mineral licences. The Company also sold its wholly owned subsidiary Carlo Holdings Limited during the year.

The Group's principal place of business is in the Russian Federation.

The Group's principal asset is the Kun-Manie production licence, which was issued in May 2015. The licence is valid until 1 July 2035 and allows the Company's subsidiary, AO Kun-Manie, to recover all revenues from 100% (less metal extraction royalties) of the mined metal that specifically includes nickel, copper, cobalt, platinum, palladium, gold and silver. The Company's management are evaluating the project with a view of determining an appropriate model for the development and ultimate exploitation of the project.  This includes the potential sale of the asset.

b)  Basis of Preparation

These financial statements have been prepared under the historical cost convention, except for the valuation of derivative financial instruments, on the basis of a going concern and in accordance with UK-adopted international accounting standards.

The financial statements are presented in thousands of United States Dollars.

The principal accounting policies adopted in the preparation of the financial statements are set out below. The policies have been consistently applied to all the years presented, unless otherwise stated.

The preparation of financial statements in accordance with International Accounting Standards as issued by the International Accounting Standards Board ("IASB") and interpretations issued by the International Financial Reporting Interpretations Committee ("IFRIC") requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The areas involving a higher degree of judgement or complexity, or where assumptions and estimates are significant to the consolidated financial statements, are disclosed in note 3.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision only affects that period, or in the period of revision and future periods if the revision affects both current and future periods.

c)  Going concern

The Group operates as a natural resource exploration and development group. To date, it has not earned any revenues and is considered to be in the final stages of exploration and evaluation activities of its Kun-Manie project. 

The Directors have reviewed the Group's cash flow forecast for the period to 30 June 2023 and believe the Group has sufficient cash resources to cover planned and committed expenditures over the period. As a result of the sale of Carlo Holdings Limited in the year, the Group received a cash injection of US$6 million and has retained a large portion of the proceeds to date.

The Group plans to sell its wholly owned subsidiary Kun-Manie and if sold, the Group will use the proceeds of sale to pay dividends while maintaining sufficient funds to acquire another project via an RTO. Should an RTO not be completed, the Company will enter into suspension and after six months in suspension the Company will be delisted.  In anticipation of a sale, the board are examining projects of interest as a part of its strategy.

The Board are continuing the assess suitable offers to purchase Kun-Manie, however, should a sale not go forward, the Directors have forecast a scenario where the Kun-Manie project is advanced, and per the requirements to maintain the license, develop a mine plan. The Board are confident that they have sufficient funds to take the TEO forward and to produce a mine plan, and in a worse-case scenario mitigating actions within the Directors' control could be taken to reduce overheads if required. However, substantial funds would need to be raised in order to fully support preproduction and construction of the mine, outside of the going concern period.

The biggest risk with taking the Kun-Manie project forward is the Company's ability to still operate within Russia in light of Russia's SMO and the sanctions put in place by the rest of the world. To date, the Company has still been able to control its subsidiary and operations, however, the Board understands that further restrictions and sanctions could make operating and raising sufficient capital from financial institutions in Russia difficult or impossible.

Additionally, the Directors are confident that funding will be raised when required, however they understand that their ability to do this is not completely within in their control.

Under both scenarios outlined above the Directors are confident that throughout the going concern forecast period the Group will have sufficient funds to meet obligations as they fall due and thus the Directors continue to prepare the financial statements on a going concern basis.

c) Loss per share

Basic and diluted loss per share is calculated and set out below. The effects of warrants and share options outstanding at the year ends are anti-dilutive and the total of 64.3 million (2020: 90.1 million) of potential ordinary shares have therefore been excluded from the following calculations:

Number of shares Weighted average number of ordinary shares used in the calculation of basic	2021	2020
earnings per share	1,379,872,315	1,071,175,000
	2021	2020
Earnings	US$'000	US$'000
Net loss for the year from continued operations attributable to equity shareholders	(1,790)	(2,688)
Loss per share for continuing operations (expressed in cents)
Basic and diluted loss per share	(0.13)	(0.25)

	2021	2020
Earnings	US$'000	US$'000
Net profit for the year from discontinued operations attributable to equity shareholders	584	-
Earnings per share for continuing operations (expressed in cents)
Basic and diluted earnings per share	(0.04)	-

d) Events after the reporting date

On 28 January 2022, Plena Global Opportunities LLC elected to convert 3,000,000 warrants, at the warrant exercise price of 1.43 pence per share providing the Company £42,900.

On 3 February 2022, Axis Capital Marketing, LTD elected to convert 5,000,000 warrants, at the warrant exercise price of 2.12 pence per share providing the Company £106,000.

On 11 February 2022, Axis Capital Marketing, elected to convert 5,000,000 warrants, at the warrant exercise price of 2.12 pence per share providing the Company £106,000.

On 23 February 2022, the Russian Federation began its 'special military operation' in Ukraine triggering the implementation of a series of sanctions with the Russian Federation subsequently enacting a series of currency control measures.

On 9 May 2022, the Group received an offer to be approved by shareholders at a General Meeting (scheduled for 25 May 2022) for the sale of 100% of its interest in Irosta's wholly owned subsidiary, AO Kun-Manie.  For a total consideration of US$105 million, Stanmix Holding Limited will purchase AO KM and the benefit of all amounts owed by AO KM to Amur under intra-group loans.

On 25 May 2022, the shareholders declined to approve the 9 May 2022 Share Purchase Agreement.

On 7 June 2022, the Company issued an RNS stating the results of the TEO Project by the State Committee on Reserves ("GKZ") which had been compiled by mining experts Oreoll and the GKZ.

Annual Accounts

Copies of the Group's Annual Accounts will be posted to the Amur shareholders today and are available for download from the Company's website at www.amurminerals.com .

Notes to Editors

The information on exploration results and Mineral Resources contained in this announcement has been reviewed and approved by the CEO of Amur, Robin Young. Mr. Young is a Geological Engineer (cum laude) and is a Qualified Professional Geologist, as defined by the Toronto and Vancouver Stock Exchanges and a Qualified Person for the purposes of the AIM Rules for Companies.

Glossary

DEFINITIONS OF EXPLORATION RESULTS, RESOURCES & RESERVES

EXTRACTED FROM THE JORC CODE: (December 2012) ( www.jorc.org )

A 'Mineral Resource' is a concentration or occurrence of material of intrinsic economic interest in or on the Earth's crust in such form, quality and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge. Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories.

An 'Inferred Mineral Resource' is that part of a Mineral Resource for which tonnage, grade and mineral content can be estimated with a low level of confidence. It is inferred from geological evidence and assumed but not verified geological and/or grade continuity. It is based on information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes which may be limited or of uncertain quality and reliability.

An 'Indicated Mineral Resource' is that part of a Mineral Resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a reasonable level of confidence. It is based on exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. The locations are too widely or inappropriately spaced to confirm geological and/or grade continuity but are spaced closely enough for continuity to be assumed.

A 'Measured Mineral Resource' is that part of a Mineral Resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a high level of confidence. It is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. The locations are spaced closely enough to confirm geological and/or grade continuity.

An 'Ore Reserve' is the economically mineable part of a Measured and/or Indicated Mineral Resource. It includes diluting materials and allowances for losses which may occur when the material is mined. Appropriate assessments and studies have been carried out, and include consideration of and modification by realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors. These assessments demonstrate at the time of reporting that extraction could reasonably be justified. Ore Reserves are sub-divided in order of increasing confidence into Probable Ore Reserves and Proved Ore Reserves.

 

END

 

 

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