Full Year Results

RNS Number : 4042L

Shefa Gems Ltd

30 April 2020

 

B"H

30 April 2020

Shefa Gems Ltd.

("Shefa Gems" or the "Company")

Full Year Results for the year ended 31 December 2019 

Shefa Gems (LSE: SEFA), a company focused on advanced exploration and development of multi-gemstone projects in Northern Israel, is pleased to announce its full year results for the year ended 31 December 2019.

2019 Highlights

Kishon Mid-Reach

· Kishon Mid-Reach Zones 1 and 2 upgraded to an Inferred Mineral Resource following Competent Person's Report ("CPR") update - Gem Box suite has an approximate contained revenue of US$41/t

· Technical Economic Evaluation ("TEE") completed, giving strong endorsement of the quality and potential of Kishon Mid-Reach project

· Received an independent gemological expert opinion and valuation of the precious gemstone suite from Dr Gavrielov Gila

· Received highest grade bulk sampling results to date in the Kishon Mid-Reach Zone 2

· Carmeltazite, found in the Carmel Sapphire™, recognised as a new mineral in nature

· Discovered the first naturally occurring Vanadium metal hydride

· Prospecting Licence (869C9) for Zone 1 renewed for 12 months which led to the formal grant of a Certificate of Discovery

· Exploration results from drilling and bulk sampling in the Kishon Mid-Reach Zone 1 and 2 amounted to approximately 15,000 carats of gemstones

· All exploration and prospecting permits renewed for a further year, covering the Kishon catchment (including Kishon Mid-Reach Zones 1, 2, 3), Mount Carmel and the Zevulun and Yizre'el valleys and their margins

Corporate and Financial

· Appointed Michael Rosenberg OBE as Chairman of the Board, separating the roles of Chairman and Chief Executive Officer

· Avi Taub, Chief Executive Officer of the Company, passed away following a short illness

· Avi's son Yosef (Yossi) Itzhak Taub joined the Board as Director

· Raised £1.0 million equity from new shareholders to fund its development activities

· Conducted a 10 for one share split of Shefa Gems shares traded on the Standard List of the London Stock Exchange to improve liquidity in the shares

· Granted a trademark for the Company's new name, Shefa Gems Ltd^® by the UK Intellectual Property Office

· First jewellery collection using Shefa Gems gemstones titled 'Heaven on Earth' completed by renowned jewellery designer, Yossi Harari

Post Period

· Appointed Vered Toledo as Chief Executive Officer (CEO), Yossi Itzhak Taub as Corporate Development Executive Officer, and created a new Executive Committee

· Awarded the Certificate of Discovery for the gemstone mine development in the Kishon Mid-Reach, Zones 1 and 2 in March 2020 , a sign ificant step towards   future commercial mining

· Carmeltazite selected as Mineral of the Year 2018 by the International Mineralogical Association (IMA)

Vered Toledo, CEO of Shefa Gems, said: "It has been a year of excellent progress for Shefa Gems as we continued to execute our twin strategy of developing our Kishon Mid-Reach project and further establishing our 'Mine-to-Market' strategy. Evidence for the potential of our unique gemstone project continues to mount, demonstrated by multiple independent endorsements including the International Mineralogical Association, reports published from respected geologists, the TEE, and the updated CPR, which upgraded the Kishon Mid-Reach project to an Inferred Mineral Resource. In further testament to the rarity and potential value of our gemstones, Carmeltazite, which forms part of the Carmel Sapphire™, was declared Mineral of the Year by the IMA.

"Looking ahead, Shefa Gems is embarking on an exciting new phase of its development following the award of the Certificate of Discovery in March 2020, opening the path for mine development in Zones 1 and 2 of the Kishon Mid-Reach. This takes us a significant step closer to establishing the first and only precious gemstone mine in Northern Israel, enabling us to commence mining and subsequently begin producing revenue. We are also progressing our 'Mine-to-Market' strategy following the successful trial marketing of the 'Heaven on Earth' jewellery collection which was produced using gemstones recovered from the Kishon Mid-Reach and created in collaboration with renowned designer Yossi Harari.  Following the positive reaction to this collection, we are seeking to widen our commercial relationships with other organisations that can assist in creating unique jewellery with our rare gemstones to be marketed and sold worldwide.

"COVID-19 has impacted all of us, whether that is in our personal or professional lives, and our priority is the well-being and safety of our team. Whilst our operations continue largely uninterrupted and the pandemic does not diminish the unique opportunity of our precious stones project in any way, we cannot know how long the outbreak will last and therefore we have taken the prudent decision to reduce our costs where possible. We are monitoring the situation closely and will update the market as required should there be any further changes."

Enquiries

Shefa Gems Ltd
Michael Rosenberg, OBE - Chairman  www.shefagems.com	[phone]
VSA Capital Limited - Financial Adviser
Andrew Raca	[phone]
SI Capital Limited - Broker and Strategic Adviser
Nick Emerson and Jon Levinson	[phone] / [phone]

Notes to Editors

About Shefa Gems Ltd

Shefa Gems Ltd (LSE: SEFA) is an explorer and developer of precious stones deposits operating in Northern Israel. Exploration activity is managed by professionally skilled and technically competent personnel and is accompanied by an international team of geological experts with decades of proven experience in their fields. It has two flagship projects, Mount Carmel and the Kishon Reach.  

With its international geological consultant team, Shefa Gems has established a "Source to Sink" geological model and the presence of a Target Mineral Assemblage of gemstones ("TMA Suite") in both primary volcanic sources and in secondary alluvial deposits lying within the Kishon catchment, on Mount Carmel and in the Zevulun and Yizre'el valleys and their margins. The TMA suite comprises Precious Stones (Diamond, rare natural moissanite, sapphire, ruby, Carmel Sapphire™, garnet, hibonite, spinel, ilmenite) and heavy minerals including zircon and rutile.  

All exploration activities are conducted under international standards and the internationally recognised SAMREC 2016 Code. Its three permits, granted to it by the Commissioner of Mines at the Ministry of Energy, Natural Resources Administration, Israel, extend over an area of approximately 488,366 Dunams (48,836 hectares) that includes the Kishon River, the volcanic bodies on Mount Carmel, the Zevulun and Yizre'el valleys and their margins.

Alongside its exploration activities, the Company is building on the launch of the "Heaven on Earth" jewellery collection and developing the Company's "Mine to Market" strategy to promote unique jewellery collections utilising Shefa Gems' suite of precious gemstones. Shefa Gems initiated a trial marketing initiative in collaboration with Yossi Harari a world-renowned jewellery designer with 30 years in the trade and three-time winner of the Couture Design Award. The handmade jewellery is created from 24 Karat gold, 'gilver' (Harari's own trademarked metal alloy that combines oxidized silver and 24 Karat gold) and Shefa Gems' precious gemstones. The gemstones used include the Carmel Sapphire™, Natural Moissanite™, black spinel, ilmenite, garnet, sapphire, hibonite and ruby. The jewellery was handcrafted using ancient goldsmithing techniques and developed in Yossi Harari's atelier in Istanbul.

The exclusive "Heaven on Earth" collection is now available to view online on the website of the designer Yossi Harari at: https://www.yossiharari.com/collections/heaven-on-earth-1

The Company upholds environmental values and protects the nature in the areas where it operates, cooperating fully with all authorities.    

For further information please visit the website at www.shefagems.com  

 

Overview

It has been a year of strong progress for Shefa Gems as the Company took significant steps towards its goal of developing Israel's first precious gemstone mine. During the year, the Company delivered a number of key milestones including the completion of the TEE report, an independent valuation of the precious gemstones, the completion of bulk sampling in Zone 2, and receiving international recognition for Carmeltazite, a new mineral in nature, discovered by Shefa Gems. In addition, the exploration results to date from bulk samples in Zones 1 and 2 amounted to approximately 15,000 carats of gemstones.

The Company's success throughout the year culminated in two landmark developments. Firstly, the release of an updated CPR, which upgrades Zones 1 and 2 of the Kishon Mid-Reach to an Inferred Mineral Resource. Secondly, post period, the award of the Certificate of Discovery for the development of its gemstone mine in the Kishon Mid-Reach, Zones 1 and 2. This landmark certificate, awarded by the Quarries and Mines Branch of the Ministry of National Infrastructures of the State of Israel, signals the beginning of the move from pure exploration to becoming a commercial mining, revenue generating company. 

Operational Review

Updated CPR - Maiden resource for Kishon Mid-Reach project

The Kishon Mid-Reach Zone 1 and Zone 2 has been upgraded to an Inferred Mineral Resource following the completion of the CPR update in December 2019. Significantly, the report concludes that the Company's overall Gem Box suite is estimated to have a contained revenue of US$41/t. This is led by the Carmel Sapphire™, which due to its high intrinsic value and the presence of large stones, is valued at US$35/t. A contained revenue of US$41/t is considerably higher than the project's estimated operating cost budget over the Life of Mine ("LoM") of US$26/t, with the potential to be as low as US$10-15/t, as published in the TEE announced in February 2019. This contained revenue also excludes any margin the Company will gain from its multi-channel, vertically integrated, marketing strategy and premium attracted to gems originating from the Holy Land.

The CPR was prepared by Creo Design (Pty) Ltd ("Cre") in accordance with the "South African Code for Reporting of Exploration Results, Mineral Resources and Mineral Reserves" (SAMREC Code), as amended in 2016. The full CPR is available on the Shefa Gems website.

Technical Economic Evaluation report

As stated previously, in February 2019, an independent TEE report for the potential first mine of the Kishon Mid-Reach project in Zone 1 was completed. The report places the mine in Kishon Mid-Reach Zone 1 at the lower end of the cost curve and provides a base case for the work and capital costs of bringing the Kishon Mid-Reach project into production.

A summary of the key points are as follows:

· The mine will be able to process 1.5 Mt of gravel over an 11-year LoM, the overburden removed would be 1.8 Mt;

· The capital expenditure for the development of the mine using new equipment has been estimated at US$11.30 million or US$7.5 million through contract mining;

· Operating cost budget over the LoM estimated at US$26/t processed or US$27/t processed through contract mining; and

· Potential to halve unit operation cost to US$10-15/t with small investment in machinery to double processing capacity from 50tph to 100tph.

Independent valuation of gemstones

In addition to the updated CPR and the TEE report, Shefa Gems received an independent valuation of its gemstone suite from expert gemmologist, Dr Gavrielov who has over 40 years of experience in the appraisal and purchase of precious stones for use in jewellery. The report included valuations of US$10,000 and US$7,000 per carat for Natural Moissanite^TM (crystals rough till 4mm) and Blue Carmel Sapphire^TM respectively. The Natural Moissanite™ found by the Company, is the largest in both volume and size ever found globally (single crystals to >4mm). It was also noted that the rarity, location and limited supply all adds significant value to the Gem Box suite of gemstones. The assessment provides a professional opinion regarding the value of the suite of precious stones found in exploration activity carried out by the Company.

Shefa Gems works with internationally respected geologists in the exploration field, who have global proven success in the discovery, exploration and development of diamond and precious stones mines. This includes Professor Bill Griffin from the ARC Centre of Excellence for Core to Crust Fluid Systems, Macquarie University, Australia, and his research team, in which Shefa Gems collaborated with to publish several scientific articles during the last year.

New discoveries

Carmeltazite

Carmeltazite, found in Shefa Gems' gemstone, the Carmel Sapphire™, was classified as a newly discovered mineral by the International Mineralogical Association Commission on New Minerals, Nomenclature and Classification in early 2019. It was then selected as Mineral of the Year 2018 by the IMA. The Carmel Sapphire™ is not found anywhere else in the world.

Discovery of the first naturally occurring Vanadium metal hydride

Shefa Gems discovered the first naturally occurring Vanadium metal hydride. Detailed in a report titled, Discovery of the first natural hydride, released in April 2019 by W.L. Griffin, the discovery is significant because the metal is only stable in extremely oxygen-depleted environments, and this has not previously been found on Earth. The findings provide important evidence and deepen the understanding of the evolution of the magmatic activity beneath Mt Carmel which eventually led to the formation of the gem mineral association now being commercially developed by Shefa Gems. As the Company continues to build and deepen its knowledge of the region and gem-forming process, this information will benefit future exploration.

Zone 1 - Progressing to trial mining with Certificate of Discovery

The Company has taken a major step towards trial mining in Zone 1 with two notable developments in recent months. The updated CPR, which upgraded Zones 1 and 2 to an Inferred Mineral Resource, as announced in December 2019. On 17 March 2020, Shefa Gems was awarded a Certificate of Discovery for Zones 1 and 2. With these developments, alongside the Company's exploration progress through the year, there has been a notable shift in the Kishon Mid-Reach project from the pure exploration phase to the gemstone mine development phase. This will support Shefa Gems to continue advancing towards trial mining during 2021. The exact timing of commencement remains dependent on the speed of processing these submissions by the relevant authorities.

Zone 2 - Bulk sampling completed and a Certificate of Discovery received

Shefa Gems made excellent progress with the completed excavation of four new bulk samples and one mini bulk sample (weight 37 tonnes) from target gravel horizons in the Kishon Mid-Reach Zone 2. During the period, following the processing and analysis of bulk samples, the Company received its highest-grade sample results to date in Zone 2 of Kishon Mid-Reach.

One sample yielded a record Target Mineral Assemblage ("TMA") grade of 467 carats per hundred tonnes (cpht). For comparison, the aggregate results from the first five bulk samples from the northern part of Kishon Mid Reach Zone 2, as announced on 31 January 2019, was 135 cpht, and the average TMA grade assumed in the Technical and Economic Evaluation of Zone 1 was 153 cpht.

During the period, a total of 49 drilling surveys (390 meters drilled), 30 bulk and mini bulk samples were collected from the Kishon Mid Reach Zone 2 and 6,094 tonnes of gravel were excavated. As published in the updated CPR, a total of 3,840 tonnes were treated (25 bulk samples) and 6,853.11 carats of TMA found. The operations were conducted on time and within the expected budget. The remaining samples collected, are undergoing treatment and analysis in the Company's operational site in Akko.

On 17 March, 2020 the Company received the Certificate of Discovery for both Zones 1 and 2 in the Kishon Mid-Reach, based on the mineralogical results achieved so far from Zone 2.

Preparing for exploration in Zone 3

Following the excellent progress and encouraging results from exploration campaigns in Zone 1 and Zone 2, Shefa Gems is focused on expanding its efforts in Zone 3. The Company is collecting and analysing all the data from this area and based on the results, together with the international geological consultant team, the Company will decide whether to prepare further resource delineation drilling campaigns in Zone 3 during 2020.

'Heaven on Earth' jewellery collection

Shefa Gems initiated a trial marketing initiative in collaboration with world-renowned jewellery designer and three-time winner of the Couture Design Award, Yossi Harari, to create the 'Heaven on Earth' jewellery collection.

The 31-piece collection was completed in February 2019. It was created from 24 Karat gold, 'gilver' (Harari's own trademarked metal alloy that combines oxidized silver and 24 Karat gold) and Shefa Gems' precious gemstones. The collection included the Carmel Sapphire™, Natural Moissanite™, black spinel, ilmenite, garnet, sapphire, hibonite and ruby. The jewellery was handcrafted using ancient goldsmithing techniques and developed in Yossi Harari's atelier in Istanbul.

The collaboration with Yossi Harari forms part of Shefa Gems' 'Mine-to-Market' development strategy, which includes exploration, mining, and designing and selling jewellery pieces containing its gemstones. It is encouraging that since the launch, Shefa Gems has received wide interest from jewellery manufacturers, retailers and sales distribution channels, which the Company will look to utilise going forwards.

Renewal of Exploration and Prospecting permits and Prospecting Licences

The Ministry of Energy, Natural Resources Administration, Israel renewed a number exploration and prospecting permits of the Company for a period of 12 months. In January 2019, two of the Company's prospecting permits were renewed, covering a total of 440,455 Dunams (44,045 hectares). In July 2019, Exploration Permit 869B11 was renewed. 869B11 covers a total of 173,636 Dunams (17,363 hectares). The Company's first Prospecting Licence, over its alluvial exploration target, the Kishon Mid-Reach Zone 1 Project, was renewed in August 2019. Post period, in February 2020 its prospecting permit Carmel (837A13) has been renewed, covering a total of 314,478 Dunams (31,447 hectares), by the Ministry of Energy, Natural Resources Administration, Israel.

Shefa Gems has three permits and licenses in total.  In addition to permits Carmel 837A13, the Company has exploration permits 869B11 covering 173,636 Dunams (17,363 hectares), and prospecting license 869C10 that covers an area of 252 Dunams (25.2 hectares) in the Kishon Mid-Reach Zone 1.  The three permits extend over an area of approximately 488,366 Dunams (48,836 hectares) that includes the Kishon River, the volcanic bodies on Mount Carmel, the Zevulun and Yizre'el valleys and their margins - Tivon-Alonim Hills and Nazareth range.

Awardof Certificate of Discovery

In March 2020, the Quarries and Mines Branch of the Ministry of National Infrastructures of the State of Israel awarded Shefa Gems a Certificate of Discovery for the development of its gemstone mine in the Kishon Mid-Reach, Zones 1 and 2. The Inspector of Mines recognised the significance of Shefa Gem's unique Carmel Sapphire™ gemstone to the commercial feasibility of the project. The Company must file an initial application for mining rights within one year of grant of the Certificate of Discovery. It is a landmark development for Shefa Gems and the culmination of the Company's successful exploration activities and market analysis. It brings the Company closer to establishing Israel's first and only precious gemstone mine and signals the beginning of the process towards future commercial mining.

Corporate Review

In June 2019, the Company changed its name to Shefa Gems Ltd, and in July 2019, the UK Intellectual Property Office granted a trademark for the name, Shefa Gems Ltd^®. The change of name aligns with the Company's 'Mine-to-Market' strategy and its goal to create a global brand for its rare gemstones discovered in the Kishon Mid-Reach area.

In addition, the Company has been seeking to address the lack of liquidity in the shares of Shefa Gems and following recommendations from its advisors, the Board of Directors resolved to a subdivision ("share split") of Shefa Gems' shares traded on the Standard List of the London Stock Exchange. The Company conducted a 10 for one share split.

Board changes

Several changes have been made to the board to ensure the Company adheres to high corporate governance standards. Michael Rosenberg, OBE, previously an External Director and Independent Non-Executive Director of Shefa Gems, was appointed as Non-Executive Chairman of the Company, effective from 1 May 2019.

It was with great regret and sadness that the Company announced in October, former Chief Executive Officer (CEO), Avi Taub, had passed away following a short illness. Avi's vision and dedication played a huge role in the development of Shefa Gems and he will be sorely missed.

Post period, in January 2020, Shefa Gems appointed Vered Toledo as CEO of the Company. Vered worked with the late Avi Taub on the development of the Company's exploration project since its inception some 21 years ago. Vered was previously Shefa Gems' Chief Operations Officer (COO).

Yosef (Yossi) Itzhak Taub has been appointed as Corporate Development Executive Director and the Board of Directors created a new Executive Committee. The Board of Directors has appointed an Executive Committee to deal with the day-to-day management of the Company's affairs. The initial members are Michael Rosenberg, OBE, (Chairman), James Campbell (Non-Executive Director), Vered Toledo (CEO), Yosef Itzhak Taub (Corporate Development Executive Director) and David Ben David (CFO).

Financial Review

The launch of the 'Heaven on Earth' jewellery collection, and the subsequent interest the Company received, provided a useful test market for the potential value that can be obtained from Shefa Gems' gemstones. The Company is therefore pleased to note that sales of items in the collection were made in the period amounted to TNIS 254 (US$72,000).

Under the agreement between the Company and Yossi Harari, regarding the Company's first jewellery collection, after reimbursing the Company's expenses incurred in direct connection with the collection, the profits resulting from the sale of the jewellery will be divided equally between the Company and Yossi Harari.

In 2019, the Company recorded a comprehensive loss for the period, of 7,929 TNIS (in thousands) (2018: TNIS 6,009 profit) equating to a loss per share of NIS 0.049 (2018: 0.0431 profit). The loss was attributed to general and administrative expenses, and financing expenses due to adjustment of the value of a financial liability at fair value.  In addition, a reduction in the value of the Company's assets for exploration and evaluation of precious stones was made. At the end of the year, the Company's cash and cash equivalents stood at TNIS 6 (2018: TNIS 209). General and administrative expenses in 2019 decreased to TNIS 3,123 (2018: TNIS 3,410)

Placing and Subscription for £1 million

As announced in May 2019, Shefa Gems raised £1.0 million (before expenses) from new shareholders through a subscription and placing of 25,000,000 new ordinary shares of 0.10 NIS each in the Company at an issue price of 4 pence per share in May. The new Shareholders include a mixture of specialist institutional investors and sophisticated High Net Worth investors who are attracted to the potential risk/returns from advanced to development stages of the natural resource and mining projects.

The COVID-19 Pandemic

The COVID-19 outbreak has impacted everyone, but for Shefa Gems it does not change the opportunity that exists for our unique precious stones mine.  Nevertheless, Shefa Gems has taken the prudent decision to reduce costs where possible including certain restructuring whilst ensuring that all concerned are as safe as possible.

As stated above, in March 2020, the Company received a Certificate of Discovery from the Ministry of Energy in Israel. The Company's recent efforts revolve around working with the various authorities in order to advance the planning and regulation procedures that will enable it to receive a mining license. The Company does not know at this point what the effects of the coronavirus will be on the time schedule for advancing and receiving the necessary permits and approvals for the mining license and assumes that there will be minor delays in the scheduling that are not within the Company's control.

Outlook

Following another excellent year of progress, the Company's primary focus for 2020 is to progress planning towards the development of its mine and continuing to establish its 'Mine-to-Market' strategy. The award of the Certificate of Discovery for Zones 1 and 2 is a landmark development for Shefa Gems. It is a significant step towards the aim of commencing trial mining in 2021 and establishing the first and only precious gemstone mine in Israel and consequently begin producing revenue.

Target 2020 Milestones:

· Continue mine planning procedures with the Israel Lands Authority and other relevant planning and statutory institutions

· Progress with a mining plan that demonstrates the commercial feasibility of the Kishon Mid-Reach Project

· Prioritise the target areas of the volcanic bodies (primary source) which are covered by the exploration and prospecting permits

· Complete the treatment and analysis of the remaining bulk samples in Zone 2, expected to be concluded within six months

· Expand efforts in Zone 3, collect and analyse data from this area and decide whether to prepare further resource delineation drilling campaigns in Zone 3 during 2020

· Further develop the 'Mine-to-Market' strategy by leveraging the success of the 'Heaven on Earth' jewellery collection and by building commercial relationships with organisations that can assist in creating unique jewellery with our rare gemstones from the land of Israel to be marketed and sold worldwide

SHEFA GEMS LTD. (Formerly Shefa Yamim A.T.M. LTD.)

STATEMENTS OF FINANCIAL POSITION

NIS in thousands

		December 31,
		2019		2018
ASSETS
Non-Current Assets:
Fixed assets, net		1,494		1,736
Assets in regard to usage rights		1,751		- . -
Loans to top-co		1,116		2,494
Interested party		77		77
Assets for exploration and evaluation of precious stones		60,628		59,128
Total non-current assets		65,066		63,435
Current Assets:
Cash in foreign currency		6		209
Short-term deposit in bank		14		- . -
Clients		51		- . -
Receivables		145		779
Total current assets		216		988
Total Assets		65,282		64,423
EQUITY AND LIABILITIES
Equity		56,422		59,544
Non-current Liabilities:
Long-term loans from interested party and others		- . -		560
Financial lease		1,492		- . -
Liability for severance pay		164		138
Options convertible to shares		1,120		564
Total Non-current Liabilities		2,776		1,262
Current Liabilities:
Short-term credit from bank and others		762		456
Trade payables		1,071		1,368
Interested parties		211		114
Other accounts payable		1,114		907
Liabilities at fair value		1,792		- . -
Loans convertible to shares		1,134		772
Total current liabilities		6,084		3,617
Total Equity and Liabilities		65,282		64,423

SHEFA GEMS LTD. (Formerly Shefa Yamim A.T.M. LTD.)

STATEMENTS OF COMPREHENSIVE PROFIT (LOSS)

NIS in thousands (except for per share profits (losses)

		,For the Year Ended December 31
		2019		2018		2017
Costs and expenses
General and administrative expenses		(3,123)		(3,410)		(541)
Amortization of assets for exploration		(2,409)		- . -		- . -
Operating loss		(5,532)		(3,410)		(541)
Other expenses, net		(1,023)		- . -		- . -
Loss prior to financing		(6,555)		(3,410)		(541)
Financial expenses		(1,534)		(218)		(15,954)
Financial income		160		9,637		237
Financial income (expenses), net		(1,374)		9,419		(15,717)
Profit (Loss) for the year and comprehensive profit (loss) for the year		(7,929)		6,009		(16,258)
Basic and diluted income (loss) per share (in NIS)		(0.049)		*0.0431		*(0.170)

 .Subsequent to the split, an adjustment of the income (loss) per share was performed* 

SHEFA GEMS LTD. (Formerly Shefa Yamim (A.T.M.) LTD.)

STATEMENT OF CHANGES IN EQUITY

NIS in thousands

	Share Capital		Additional Paid-in Capital, net		Receivables in Regard to Shares		Capital Reserve for Share-Based Payments		Capital Reserve from Transactions with Interested Party		Accumulated Deficit		Total Equity Attributed to Shareholders
Balance as of January 1, 2017	9,387		78,626		- . -		5,291		6,312		(50,796)		48,820
					- . -
Comprehensive Loss for the year	- . -		- . -		- . -		- . -		- . -		(16,258)		(16,258)
Issuance of shares	*4,518		* 14,339		- . -		- . -		- . -		- . -		18,857
Share based payment	- . -		- . -		- . -		292		- . -		- . -		292
Receipts for issue of shares during 2012	- . -		777		- . -		- . -		- . -		- . -		777
Balance as of December 31, 2017	13,905		93,742		- . -		5,583		6,312		(67,054)		52,488
					- . -
Comprehensive Income for the year	- . -		- . -		- . -		- . -		- . -		6,009		6,009
Issuance of shares	319		595		- . -		- . -		- . -		- . -		914
Share based payment	- . -		- . -		- . -		133		- . -		- . -		133
Balance as of December 31, 2018	14,224		94,337		- . -		5,716		6,312		(61,045)		59,544
					- . -
Comprehensive Loss for the year	- . -		- . -		- . -		- . -		- . -		(7,929)		(7,929)
Issuance of shares	3,006		1,960		(205)		- . -		- . -		- . -		4,761
Share based payment	- . -		- . -		- . -		46		- . -		- . -		46
Balance as of December 31, 2019	17,230		96,297		(205)		5,762		6,312		(68,974)		56,422

 Net of issuance expenses and fees in the amount of approximately NIS 4,470 thousand*

SHEFA GEMS LTD. (Formerly Shefa Yamim (A.T.M.) LTD.)

STATEMENTS OF CASH FLOWS

NIS in thousands

	,For the Year Ended December 31
	2019		2018		2017
Cash flows from operating activities:
Profit (Loss) for the year	(7,929)		6,009		(16,258)
Appendix A - Adjustments required to reconcile profit (loss) for the year to net cash provided by (used in) operating activities	5,209		(9,931)		17,1140
Net cash provided by (used in) operating activities	(2,720)		(3,922)		856
Cash flows from investing activities:
Purchase of fixed assets	(395)		(391)		(531)
Consideration from sale of fixed assets	- .  -		55		- .  -
Deposits	(14)		173		- . -
Investment in exploration and evaluation assets	(2,161)		(3,541)		(4,375)
Loan repaid (rendered) to the top-co	253		(84)		(1,177)
Interest received	- .  -		- . -		188
Net cash used in investing activities	(2,317)		(3,788)		(5,895)
Cash flows from financing activities:
Consideration received for issuance of share capital and options (including additional capital), net	3,575		908		137
Increase in deferred issuance expenses	- .  -		- . -		(4,707)
Receipt (Repayment) of credits from banks and others, net	103		(2)		(205)
Receipt (Repayment) of loans from interested parties, net	(674)		(111)		446
Repayment of fund in regard to leasing	(299)		- .  -		- . -
Liabilities to shareholders	- .  -		685		- . -
Receipt of loans convertible to shares	2,636		- . -		16,611
Repayment of long-term loans	- .  -		(25)		(40)
Interest paid	(334)		(106)		(458)
Net cash provided by financing activities	5,007		1,349		11,784
Linkage differences in regard to cash and cash equivalents	(173)		81		(257)
Increase (Decrease) in cash and cash equivalents	(203)		(6,280)		6,488
Cash and cash equivalents at the beginning of the year	209		6,489		1
Cash and cash equivalents at the end of the year	6		209		6,489

SHEFA GEMS LTD. (Formerly Shefa Yamim (A.T.M.) LTD.)

STATEMENTS OF CASH FLOWS

NIS in thousands

APPENDIX A	For the Year Ended December 31,
Adjustments required to show the cash flows from current operations:	2019		2018		2017
Expenses (Income) not involving cash flows:
Depreciation *	49		54		60
Share based payment	11		25		46
Capital mobilization fees	414		- .  -		- . -
Amortization of assets for exploration and evaluation of precious stones	2,409		- .  -		- . -
Amortization of a loan to an interested party	1,116		- .  -		- . -
Finance expenses (income), net	1,374		(9,419)		15,717
	5,373		(9,340)		15,823
Changes in asset and liability items:
Increase in clients	(51)		- . -		- . -
Decrease (Increase) in receivables	376		(.169)		(64)
Increase (Decrease) in trade payables	(374)		121		1,403
Increase (Decrease) in liability to an interested party	(296)		(242)		- . -
Increase (Decrease) in other accounts payable	181		(301)		(48)
	(164)		(591)		1,291
	5,209		(9,931)		17,114

*  Net of depreciation encumbered on the assets for exploration and evaluation of precious stones.

APPENDIX B	For the Year Ended December 31,
Significant non-cash flow operations:	2019		2018		2017
Accounts payable in regard to assets for exploration and evaluation of precious stones	765		428		1,550
Fixed assets in regard to assets for exploration and evaluation of precious stones	464		- . -		- . -
Usage rights assets in regard to assets for exploration and evaluation of precious stones	364		- . -		- . -
Loan for acquisition of fixed assets	- . -		124		240
Loans assigned to capital	1,166		- . -		20,518
Loan from interested parties that is assigned to capital	3-		- . -		1,659
Balance from a supplier assigned to capital	60		223		1,152
Payables in regard to deferred issuance expenses	- . -		- . -		742
Assignment of a receivable balance from the chairman of the board of directors to the top-co	- . -		- . -		640

 

END

 

 

FR UKSARRVUSUUR