Bezant (AIM: BZT), the copper-gold exploration and development company, announces its audited final results for the year ended 31 December 2017.
As announced on 26 April 2018, the Company sold its wholly owned subsidiary Ulloa Recursos Naturales SAS through which it held the Group’s wholly owned alluvial platinum and gold licences (FKJ-083 and HCA-082), located in the Choco region of Colombia, and the associated processing plant, mobile test plant and other mining equipment located in the licence area (the “Choco Project”), to Auvert Mining Group Limited (“Auvert”) (the “Disposal”). Accordingly, the Company’s financial results report its Colombian activites as discontinued operations, with its UK, Argentina and Philippines based activities being reported as continuing operations.
Highlights:
Financial:
- £4.6m loss after tax – £1.0m loss from continuing operations and £3.6m from discontinued operations (2016 (unauditied): £10.0m).
- Impairment charge of £80k (2016 (unaudited): £8.4m) relating to the Company’s Mankayan Copper-Gold Project, Philippines.
- Approximately £0.2m cash at bank at the period end (2016: £0.2m).
Operational:
As explained further in the Chairman’s Statement below, the predominant operational focus during 2017 was on the recently disposed of Choco Project due to the uncertainty surrounding the Company’s Mankayan Copper-Gold Project in the Philippines (the “Mankayan Project” or “Mankayan”). Such uncertainty related principally to the validity of the Mineral Production Sharing Agreement (“MPSA“) (No. 057-96-CAR) in respect of Mankayan, held by Bezant’s associate, Crescent Mining and Development Corporation (“CMDC”). As announced on 29 May 2018, CMDC has now been granted a two year extension of the exploration period under its MPSA to April 2020 subject to customary conditions for inclusive shareholder engagement and certain work programme commitments.
Alluvial platinum & gold, Choco District Colombia (the “Choco Project”):
Acheivements during the year included:
- initial production at the FKJ-83 licence area;
- the granting of a Registro Unico de Comercializadores de Minerales (“RUCOM”) from the Colombian National Mining Agency (ANM – Agencia Nacional de Mineria), allowing the Company to sell precious metals; and
- the recovery and sale of the first kilogramme of gold-platinum metals.
Mankayan Project, Philippines:
The Mankayan Project was fully impaired in 2016 due to the then significant lingering uncertainty with respect to achieving any potential sale or joint venture (“JV”) for the project in light of the prevailing political and tax environment in the Philippines.
As announced on 20 February 2017, formal notice was received from the Department of Environment and Natural Resources (“DENR“) regarding the MPSA (No. 057-96-CAR), held by Bezant’s associate CMDC, questioning the validity of CMDC’s MPSA. In light of this uncertainty the Mankayan Project was operated on a “care & maintenance” basis during the year.
Corporate:
During the year the Company raised a total of approximately £2.8m (gross), comprising:
- £1,000,000 (gross) on 21 March 2017 and £585,000 (gross) on 5 July 2017 to fund initial production at the Choco Project and general working capital;
- £700,000 on 5 October 2017 to finance production into higher grade gravels and general working capital; and
- £550,000 on 5 December 2017 in order to provide the group with general working capital whilst it sought to procure the requisite funding to complete the full-scale ramp-up process at the Choco Project via an alternative route such as project/asset level financing or an appropriate farm-in partner.
Post Period End:
On 5 February 2018, the Company announced a conditional fundraising of, in aggregate, £600,000 (gross) which was completed following shareholder approval obtained at the Company’s General Meeting held on 1 March 2018.
On 2 March 2018, the Company announced the appointment of Colin Bird as Executive Chairman and the intention to conduct a strategic review.
On 26 April 2018, the Company announced the sale for US$500,000 of its wholly owned subsidiary Ulloa Recursos Naturales SAS through which it held the Group’s wholly owned alluvial platinum and gold licences (FKJ-083 and HCA-082), located in the Choco region of Colombia, and assets related to the Choco Project to Auvert Mining Group Limited.
On 10 May 2018, the Company announced the results of its strategic review, the highlights of which included:
- Major potential to generate further value from the existing data set held on the Mankayan Project
- Eureka project in Argentina has little existing 3D definition and represents a significant copper-gold target with sizeable potential and hosted gold content not yet fully understood
- Disposal of Choco Project in Colombia as, by comparison, was deemed to have less potential to contribute positively to the Group’s performance and its disposal has removed exposure to all costs and liabilities associated with the project
On 29 May 2018, the Company announced a two-year extension to the exploration period of the MPSA (No. 057-96-CAR), held by its associate, CMDC, which governs the 534 hectare contract area comprising the Company’s Mankayan Project, Benguet Province, Philippines. This has served to remove much of the legal uncertainty and provided the opportunity to add value through further work to enhance the existing resource base and seek to optimise the engineering of the mine plan so as to further improve the project’s financials and the fundamentals of this important asset.
Laurence Read, CEO of Bezant, today commented:
“Bezant is now fully focussed on the progression of its copper-gold portfolio. Our Mankayan asset in the Philippines is deemed to be a world-class project and the remainder of 2018 shall see the Company seek to derive value from this significant asset whilst also continuing to assess the Eureka project in Argentina. I would like to thank shareholders and my colleagues on the Bezant board for their considerable support during the period under review and year to date.”
Colin Bird, Executive Chairman of Bezant, today commented:
“Prior to joining the Company, I had views on the clear potential of the two copper related projects in its portfolio and this has been endorsed by my subsequent close scrutiny of the available technical data. Likewise, I had views on the Company’s management being a team I could work with to seek to release such potential future value, and this too has been borne out by our close interaction since my appointment.
“The Board firmly believes that the Mankayan Project is well positioned to be potentially developed into one of the world’s next significant copper mining projects, and we will now endeavour to add to the existing resource base and seek to optimise the engineering of the mine plan so as to further improve and demonstrate the project’s undoubted attractiveness.”
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