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and will be posted on SEDAR at www.sedar.com.' data-reactid="67">Serabi's Directors Report and Financial Statements for the year ended 31 December 2017 together the Chairman's Statement and the Management Discussion and Analysis, are available from the Company's website - www.serabigold.com and will be posted on SEDAR at www.sedar.com. This announcement is inside information for the purposes of Article 7 of Regulation 596/2014. Enquiries: | Serabi Gold plc | | | Michael Hodgson | Tel: +44 (0)20 7246 6830 | | Chief Executive | Mobile: +44 (0)7799 473621 | | | | | Clive Line | Tel: +44 (0)20 7246 6830 | | Finance Director | Mobile: +44 (0)7710 151692 | | | | | Email: contact@serabigold.com | | | Website: www.serabigold.com | | | | | Beaumont Cornish Limited
Nominated Adviser and Financial Adviser | | | Roland Cornish | Tel: +44 (0)20 7628 3396 | | Michael Cornish | Tel: +44 (0)20 7628 3396 | | | | Peel Hunt LLP
UK Broker | | | Ross Allister | Tel: +44 (0)20 7418 8900 | | James Bavister | Tel: +44 (0)20 7418 8900 | | | | Blytheweigh
Public Relations | | | Tim Blythe | Tel: +44 (0)20 7138 3204 | | Camilla Horsfall | Tel: +44 (0)20 7138 3224 |
Copies of this announcement are available from the Company's website at www.serabigold.com. Neither the Toronto Stock Exchange, nor any other securities regulatory authority, has approved or disapproved of the contents of this announcement. The following information, comprising, the Income Statement, the Group Balance Sheet, Group Statement of Changes in Shareholders' Equity, and Group Cash Flow, is extracted from these financial statements. The Company will, in compliance with Canadian regulatory requirements, post its Management Discussion and Analysis for the year ended 31 December 2017 and its Annual Information Form on SEDAR at www.sedar.com. These documents will also available from the Company's website - www.serabigold.com. Annual Report
The Annual Report has been published by the Company on its website at www.serabigold.com and printed copies are expected to be available by 15 May 2018. Additional copies will be available to the public, free of charge, from the Company's offices at 2nd floor, 30 - 32 Ludgate Hill, London, EC4M 7DR and will be available to download from the Company's website at www.serabigold.com. The data included in the selected annual information table below is taken from the Company's annual audited financial statements for the year ended 31 December 2017, which were prepared in accordance with International Financial Reporting Standards in force at the reporting date and their interpretations issued by the International Accounting Standards Board ("IASB") and adopted for use within the European Union (IFRS) and with IFRS and their interpretations issued by the IASB. There are no material differences on application to the Group. The consolidated financial statements have also been prepared in accordance with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The audited financial statements for the year ended 31 December 2017 will be presented to shareholders for adoption at the Company's next Annual General Meeting and filed with the Registrar of Companies. Statement of Comprehensive Income
For the year ended 31 December 2017 | | | Group | | | | For the year ended 31 December 2017 | For the year ended 31 December 2016 | | | Notes | US$ | US$ | | CONTINUING OPERATIONS | | | | | Revenue | | 48,449,868 | 52,593,751 | | Cost of sales | | (32,015,498) | (32,906,426) | | Provision for impairment of inventory | | (950,000) | - | | Depreciation and amortisation charges | | (10,465,283) | (8,384,738) | | Gross profit | | 5,019,087 | 11,302,587 | | Administration expenses | | (5,500,275) | (4,962,524) | | Share-based payments | | (381,362) | (350,899) | | Gain on disposal of fixed asset | | 170,591 | 34,742 | | Operating (loss) / profit | | (691,959) | 6,023,906 | | Foreign exchange loss | | (214,488) | (236,619) | | Finance expense | | (839,191) | (3,917,681) | | Finance income | | 135 | 573 | | (Loss) / profit before taxation | | (1,745,503) | 1,870,179 | | Income tax (expense) / benefit | | (652,400) | 2,560,113 | | (Loss) / profit for the period from continuing operations(1) | | (2,397,903) | 4,430,292 | | | | | | | Other comprehensive income (net of tax) | | | | | Items that may be reclassified subsequently to profit or loss | | | | | Exchange differences on translating foreign operations | | (591,720) | 8,618,687 | | Total comprehensive profit / (loss) for the period(1) | | (2,989,623) | 13,048,979 | | (Loss) / profit per ordinary share (basic) | 4 | (0.34c) | 0.66c | | (Loss) / profit per ordinary share (diluted) | 4 | (0.34c) | 0.61c |
(1) The Group has no non-controlling interests and all losses are attributable to the equity holders of the parent company Balance Sheet as at 31 December 2017 | | | | Group | | | | | | 2017 | 2016 | | | | | | US$ | US$ | | Non-current assets | | | | | | | Deferred exploration costs | | | | 23,898,819 | 9,990,789 | | Property, plant and equipment | | | | 48,980,381 | 45,396,140 | | Taxes receivable | | | | 1,474,062 | - | | Deferred taxation | | | | 2,939,634 | 3,253,630 | | Total non-current assets | | | | 77,292,896 | 58,640,559 | | Current assets | | | | | | | Inventories | | | | 6,934,438 | 8,110,373 | | Trade and other receivables | | | | 1,277,142 | 1,233,049 | | Prepayments | | | | 3,237,412 | 3,696,550 | | Cash and cash equivalents | | | | 4,093,866 | 4,160,923 | | Total current assets | | | | 15,542,858 | 17,200,895 | | Current liabilities | | | | | | | Trade and other payables | | | | 5,347,964 | 4,722,139 | | Interest-bearing liabilities | | | | 2,845,712 | 2,964,057 | | Acquisition payments outstanding | | | | 5,000,000 | - | | Derivative financial liabilities | | | | 709,255 | - | | Accruals | | | | 614,198 | 635,446 | | Total current liabilities | | | | 14,517,129 | 8,321,642 | | Net current assets | | | | 1,025,729 | 8,879,253 | | Total assets less current liabilities | | | | 78,318,625 | 67,519,812 | | Non-current liabilities | | | | | | | Trade and other payables | | | | 2,753,409 | 2,211,078 | | Provisions | | | | 2,047,131 | 1,851,963 | | Acquisition payments outstanding | | | | 9,997,961 | - | | Interest-bearing liabilities | | | | 2,749,412 | 77,798 | | Total non-current liabilities | | | | 17,547,913 | 4,140,839 | | Net assets | | | | 60,770,712 | 63,378,973 | | | | | | | | | | | | | | | | Equity | | | | | | | Share capital | | | | 5,540,960 | 5,540,960 | | Share premium reserve | | | | 1,722,222 | 1,722,222 | | Option reserve | | | | 1,425,024 | 1,338,652 | | Other reserves | | | | 4,015,369 | 3,051,862 | | Translation reserve | | | | (31,199,568) | (30,607,848) | | Retained surplus | | | | 79,266,705 | 82,333,125 | | Equity shareholders' funds attributable to owners of the parent | | | | 60,770,712 | 63,378,973 |
Statements of Changes in Shareholders' Equity
For the year ended 31 December 2017 | Group | Share
capital | Share
premium | Share option
reserve | Other
reserves | Translation
reserve | (Accumulated losses) / retained surplus | Total equity | | | US$ | US$ | US$ | US$ | US$ | US$ | US$ | | Equity shareholders' funds at 31 December 2015 | 5,263,182 | - | 2,747,415 | 450,262 | (39,226,535) | 77,549,321 | 46,783,645 | | Foreign currency adjustments | - | - | - | - | 8,618,687 | - | 8,618,687 | | Profit for year | | | | | | 4,430,292 | 4,430,292 | | Total comprehensive loss for the year | - | - | - | - | 8,618,687 | 4,430,292 | 13,048,979 | | Transfer to taxation reserve | - | - | - | 2,690,401 | - | (2,690,401) | - | | Release of fair value provision on convertible loan | - | - | - | - | - | 1,195,450 | 1,195,450 | | Warrants lapsed | - | - | - | (88,801) | - | 88,801 | - | | Shares issued in period | 277,778 | 1,722,222 | - | - | - | - | 2,000,000 | | Share options lapsed in period | - | - | (1,759,662) | - | - | 1,759,662 | - | | Share option expense | - | - | 350,899 | - | - | - | 350,899 | | Equity shareholders' funds at 31 December 2016 | 5,540,960 | 1,722,222 | 1,338,652 | 3,051,862 | (30,607,848) | 82,333,125 | 63,378,973 | | Foreign currency adjustments | - | - | - | - | (591,720) | - | (591,720) | | Loss for year | - | - | - | - | - | (2,397,903) | (2,397,903) | | Total comprehensive income for the year | - | - | - | - | (591,720) | (2,397,903) | (2,989,623) | | Transfer to taxation reserve | - | - | - | 963,507 | - | (963,507) | - | | Share options lapsed in period | - | - | (294,990) | - | - | 294,990 | - | | Share option expense | - | - | 381,362 | - | - | - | 381,3620 | | Equity shareholders' funds at 31 December 2017 | 5,540,960 | 1,722,222 | 1,425,024 | 4,015,369 | (31,199,568) | 79,266,705 | 60,770,712 |
Other reserves comprise a merger reserve of US$361,461 and a taxation reserve of US$3,653,908 (2016: merger reserve of US$361,461 and taxation reserve of US$2,690,401). Cash Flow Statements
For the year ended 31 December 2017 | | | | Group | | | | | | For the
year ended
31 December
2017 | For the
year ended
31 December
2016 | | | | | | US$ | US$ | | Cash outflows from operating activities | | | | | | | Operating profit / (loss) | | | | (2,397,903) | 4,430,292 | | Net financial expense | | | | 1,053,544 | 4,153,727 | | Depreciation - plant, equipment and mining properties | | | | 10,465,283 | 8,384,738 | | Provision for impairment of inventory | | | | 950,000 | - | | Other provisions | | | | 156,404 | - | | Taxation (benefit) / expense | | | | 652,400 | (2,560,113) | | Share-based payments | | | | 381,362 | 350,899 | | Interest paid | | | | (747,072) | (2,049,900) | | Foreign exchange | | | | (178,753) | (1,045,460) | | Finance charges | | | | - | (37,500) | | Changes in working capital | | | | | | | (Increase) / decrease in inventories | | | | (287,898) | 153,314 | | (Increase) / decrease in receivables, prepayments and accrued income | | | | (1,968,858) | 4,177,110 | | Increase / (decrease) in payables, accruals and provisions | | | | 165,249 | 195,845 | | Increase / (decrease) in short term intercompany payables | | | | - | - | | Net cash flow from operations | | | | 8,243,758 | 16,152,952 | | | | | | | | | Investing activities | | | | | | | Acquisition of subsidiary net of cash acquired | | | | (4,994,665) | - | | Purchase of property, plant, equipment and projects in construction | | | | (2,144,753) | (3,042,043) | | Mine development expenditure | | | | (4,362,192) | (2,366,486) | | Geological exploration expenditure | | | | (2,487) | (525,444) | | Proceeds from sale of assets | | | | 214,566 | 34,742 | | Interest received and other finance income | | | | 135 | 573 | | Net cash outflow on investing activities | | | | (11,289,396) | (5,898,658) | | | | | | | | | Financing activities | | | | | | | Convertible loan received and subsequent conversion to ordinary shares | | | | - | 2,000,000 | | Draw-down of short-term loan facility | | | | 3,628,511 | - | | Repayment of short term secured loan | | | | - | (3,111,111) | | Receipt from repayment of intercompany loan | | | | - | - | | Payment of finance lease liabilities | | | | (644,340) | (755,858) | | Receipts for short term trade finance | | | | - | 15,146,817 | | Repayment of short term trade finance | | | | - | (21,384,139) | | Net cash (outflow) / inflow from financing activities | | | | 2,984,171 | (8,104,291) | | | | | | | | | Net (decrease) / increase in cash and cash equivalents | | | | (61,467) | 2,150,003 | | Cash and cash equivalents at beginning of period | | | | 4,160,923 | 2,191,759 | | Exchange difference on cash | | | | (5,590) | (180,839) | | Cash and cash equivalents at end of period | | | | 4,093,866 | 4,160,923 |
Notes 1. General Information
The financial information set out above for the years ended 31 December 2017 and 31 December 2016 does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006,,but is derived from those accounts. Whilst the financial information included in this announcement has been compiled in accordance with International Financial Reporting Standards ("IFRS") this announcement itself does not contain sufficient financial information to comply with IFRS. A copy of the statutory accounts for 2016 has been delivered to the Registrar of Companies and those for 2017 will be delivered to the Registrar of Companies following approval by shareholders at the Annual General Meeting. The full audited financial statements for the years end 31 December 2017 and 31 December 2016 comply with IFRS. 2. Auditor's Opinion
The auditor has issued an unqualified opinion in respect of the financial statements for both 2016 and 2017 which do not contain any statements under the Companies Act 2006, Section 498(2) or Section 498(3). 3. Basis of Preparation
The financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") in force at the reporting date and their interpretations issued by the International Accounting Standards Board ("IASB") as adopted for use within the European Union and with IFRS and their interpretations issued by the IASB. The consolidated financial statements have also been prepared in accordance with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. At the date of authorisation of the financial statements, the following standards and relevant interpretations, which have not been applied in these financial statements, were in issue but not yet effective (and some of which were pending endorsement by the EU): lFRS 9 Financial Instruments
lFRS 15 Revenue from Contracts
IFRS 16 Leases The only standard that is anticipated to be significant or relevant to the Group is IFRS 9 "Financial Instruments". The new standard will replace existing accounting standards. It is applicable to financial assets and liabilities and will introduce changes to existing accounting concerning classification, measurement and impairment (introducing an expected loss method). IFRS 15 'Revenue from Contracts with Customers' is not expected to have a material impact on the Group at this stage of the Group's operations. IFRS 16 will require the recognition of an asset and liability with respect to the material operating lease commitments that the group have. Management are currently considering the impact that this will have on the financial statements. The revenue contracts held by the Group usually contain a single performance criteria that is satisfied at a point in time. The Group will adopt the above standards at the time stipulated by that standard. The Group does not at this time anticipate voluntary early adoption of any of the standards. Going concern and availability of finance On 23 March 2018 the Company entered into a Subscription Agreement with Greenstone resources II LP ("Greenstone"), Greenstone has conditionally agreed to subscribe ("the Subscription") for 297,759,419 New Ordinary Shares ("the Subscription Shares") at a price of 3.6 pence per share (the "Subscription Price"). The New Ordinary Shares to be issued pursuant to the Subscription will rank pari passu with the existing Ordinary Shares. Application will be made to the London Stock Exchange for the Subscription Shares to be admitted to trading on AIM ("Admission") and listed for trading on the TSX. Completion of the Subscription and Admission is expected to take place at 8:00 a.m. on or around 12 April 2018. The Directors anticipate the Group now has access to sufficient funding for its immediate projected needs. The Group expects to have sufficient cash flow from its forecast production to finance its on-going operational requirements, to repay its secured loan facilities and to fund planned exploration and development activity on its other gold properties. However additional funding will be required to bring the newly acquired Coringa gold project into production including the final acquisition payment. The secured loan facility is repayable by 30 June 2020 and at 31 December 2017, the amount outstanding under this facility was US$4.48 million (2016: US$1.37 million). The Directors consider that the Group's operations are performing at the levels that they anticipate but the Group remains a small-scale gold producer. Any unplanned interruption or reduction in gold production, unforeseen reductions in the gold price or appreciation of the Brazilian currency, could adversely affect the level of free cash flow that the Group can generate on a monthly basis. Nonetheless with the proceeds to be received from the Subscription, the Directors consider that they will nonetheless be able to meet its financial obligations as they fall due. On this basis, the Directors have therefore concluded that it is appropriate to prepare the financial statements on a going concern basis. 4. Earnings per Share | | | For the year ended 31 December 2017 | For the year ended 31
December 2016 | | (Loss) / profit attributable to ordinary shareholders (US$) | | (2,397,903) | 4,430,292 | | Weighted average ordinary shares in issue | | 698,701,772 | 672,502,757 | | Basic (loss) / profit per share (US cents) | | (0.343) | 0.659 | | Diluted ordinary shares in issue | | 698,701,772(1) | 722,412,757(2) | | Diluted (loss) / profit per share (US cents) | | (0.343) | 0.613 |
- As the effect of dilution is to reduce the loss per share, the diluted loss per share is considered to be the same as the basic loss per share.
- Assumes exercise of all options and warrants outstanding as of that date.
5. Post balance sheet events
On 22 January 2018, the Group increased its loan with Sprott by US$3 million ("The New Loan") and at the same time extended the final repayment period on its existing US$5 million loan (The Existing Loan") with Sprott by six months from 31 December 2019 to 30 June 2020. The New Loan may be repaid, at the Company's request and with the agreement of Sprott (the "Extension Option") in equal monthly instalments commencing 30 September 2018 with a final payment due 22 months later on 30 June 2020. If the Extension Option is not exercised the New Loan must be repaid in full on 30 September 2018. Notwithstanding the above, both the New Loan and the Existing Loan may be repaid by Serabi in full without penalty at any time. On 23 March 2018 the Company entered into a Subscription Agreement with Greenstone resources II LP ("Greenstone"), Greenstone has conditionally agreed to subscribe ("the Subscription") for 297,759,419 New Ordinary Shares ("the Subscription Shares") at a price of 3.6 pence per share (the "Subscription Price"). The New Ordinary Shares to be issued pursuant to the Subscription will rank pari passu with the existing Ordinary Shares. Application will be made to the London Stock Exchange for the Subscription Shares to be admitted to trading on AIM ("Admission") and listed for trading on the TSX. Completion of the Subscription and Admission is expected to take place at 8:00 a.m. on or around 12 April 2018. With these exceptions there has been no item, transaction or event of a material or unusual nature likely, in the opinion of the Directors of the Company, to affect significantly the continuing operation of the entity, the results of these operations, or the state of affairs of the entity in future financial periods. Qualified Persons Statement
The scientific and technical information contained within this announcement has been reviewed and approved by Michael Hodgson, a Director of the Company. Mr Hodgson is an Economic Geologist by training with over 26 years' experience in the mining industry. He holds a BSc (Hons) Geology, University of London, a MSc Mining Geology, University of Leicester and is a Fellow of the Institute of Materials, Minerals and Mining and a Chartered Engineer of the Engineering Council of UK, recognising him as both a Qualified Person for the purposes of Canadian National Instrument 43-101 and by the AIM Guidance Note on Mining and Oil & Gas Companies dated June 2009. Forward Looking Statements
Certain statements in this announcement are, or may be deemed to be, forward looking statements. Forward looking statements are identified by their use of terms and phrases such as ''believe'', ''could'', "should" ''envisage'', ''estimate'', ''intend'', ''may'', ''plan'', ''will'' or the negative of those, variations or comparable expressions, including references to assumptions. These forward looking statements are not based on historical facts but rather on the Directors' current expectations and assumptions regarding the Company's future growth, results of operations, performance, future capital and other expenditures (including the amount, nature and sources of funding thereof), competitive advantages, business prospects and opportunities. Such forward looking statements reflect the Directors' current beliefs and assumptions and are based on information currently available to the Directors. A number of factors could cause actual results to differ materially from the results discussed in the forward looking statements including risks associated with vulnerability to general economic and business conditions, competition, environmental and other regulatory changes, actions by governmental authorities, the availability of capital markets, reliance on key personnel, uninsured and underinsured losses and other factors, many of which are beyond the control of the Company. Although any forward looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions, the Company cannot assure investors that actual results will be consistent with such forward looking statements. ENDS |
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