17:00 Thu 29 Aug 2019
Shefa Gems Ltd - Interim Results
B"H
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Interim Results
H1 2019 Highlights
Kishon Mid-Reach
· Completed independent Technical Economic Evaluation ("TEE") that places the first mine at
· Completed bulk sampling in
· Received independent valuation of our "
· Received official recognition on a new mineral in nature named Carmeltazite, discovered by
· Discovery of the first naturally occurring Vanadium metal hydride
· World-renowned jewellery designer,
Corporate and Financial
· Appointed Mr.
· Raised
· Conducted a 10 for one share split of
· Changed the company name to
Post Period Highlights
· Renewed exploration permit 869B8 covering the
· In
· In
- Ends -
Enquiries
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+44 20 7938 4026 |
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+44 20 3005 5000 |
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+44 20 3871 4038 / +44 1483 413500 |
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Harry Chathli, |
+44 20 7618 9100 |
Notes to Editors
About
All exploration activities are conducted under international standards and the internationally recognised SAMREC 2016 Code. Furthermore, its four (4) permits, granted to it by the Commissioner of Mines at the
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
The exclusive "Heaven on Earth" collection is now available to view online on the website of the designer
For further information please visit the website at www.shefagems.com
Overview
It has been a very encouraging first half of 2019 as the Company has achieved several key milestones. With the TEE report completed, alongside an independent valuation of our
Operational Review
Technical Economic Evaluation Report
In
A summary of the key points are as follows:
· Mine can potentially process 1.5 Mt of gravel over an 11-year Life of Mine ('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
· Operating cost budget over LoM estimated at
· Can halve unit operation cost to
Independent Valuation of Gemstones
The main purpose of the gemmological valuation was to provide a professional opinion regarding the value of the suite of precious stones found in exploration activity carried out by the Company in the Kishon Mid Reach alluvial deposit in the north of
The rarity, location and limited supply all adds significant value to the Gem Box suite of gemstones.
Zone 1 - Progressing to Trial Mining
Zone 2 - Bulk Sampling Completed
The collected samples, with a total weight of 2,255 tonnes, are now undergoing treatment and analysis in the Company's operational site in Akko. Upon completion of the analysis at Akko, the Company will apply for a prospecting license, bringing Zone 2 to the same development level as Zone 1 and thereby enlarging its deposit base.
Preparing for exploration in Zone 3
Following the excellent progress and encouraging results from exploration campaigns in Zone 1 and Zone 2,
'Heaven on Earth' Jewellery Collection
In
The collection comprises of 31 unique, handcrafted, individual pieces of jewellery and includes 11 necklaces, 10 rings, 4 pendants, 4 pairs of earrings and 2 bracelets. Harari originally planned to create 18 pieces but produced an additional 13 pieces as a result of the variety, sizes and quality of
The collaboration with
Following the launch of the collection,
Discovery of Carmeltazite
Discovery of the first naturally occurring Vanadium metal hydride
These findings are of major importance in understanding 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
Renewal of exploration permits and licences
During the period and post period, exploration and prospecting permits were renewed by the
Corporate Review
To better align with the Company's 'Mine to Market' strategy, on
In addition, the Company has been seeking to address the lack of liquidity in the shares of
Board changes
In accordance with its commitment to high corporate governance standards, the Company separated the roles of the Chairman and Chief Executive Officer, previously both held by Mr
Financial Review
The Heaven on Earth Jewellery collection was launched to both illustrate the unique
Over the last six months the Company recorded a comprehensive loss for the period, of TNIS (in thousands) 2,573 (2018: TNIS 959) equating to a loss per share of
Jewellery Market Testing
Under the agreement between the Company and Mr.
General and administrative expenses
The decrease is mainly due to a decrease in marketing and advertising expenses and expenses of professional advisers.
Financial expenses
Financing expenses increased mainly due to share allocations in the first half of the year and registration of financing expenses due to revaluation of the options for the shares allotted.
Loan Conversions
On
On
The Company received from investors loans convertible to shares in the amount of GBP
Arrangement with the Company's largest shareholder (hereinafter: 'Shefa Tel Aviv')
Shefa Tel Aviv, which is listed on the Tel Aviv Stock Exchange, is the largest shareholder of
· Shefa Tel Aviv holds 68,004,420 shares in the Company, representing 39.44% of the Company's share capital.
· The effect of the proposals once implemented will be that the shares now owned by Shefa Tel Aviv will be distributed to and owned directly by the present shareholders of Shefa Tel Aviv. However initially and for a period of approximately one year they will be held by a trustee on behalf of those shareholders.
· It is hoped that the restructuring will be approved and implemented within the next three months.
Placing and Subscription for
During the period, Shefa appointed
Outlook
Looking ahead, the Company is focused on securing a mining license for
Target H2 2019 Milestones:
· Progress with planning and regulatory procedures to obtain a mining license to advance the
· The treatment and analysis of the completed bulk sampling in Zone 2 is continuing as planned and is expected to be completed within 12 months.
· Plans are currently being finalised to progress preparation for drilling campaigns in Zone 3 of the Kishon Mid-Reach area through the remainder of 2019.
· Build on the launch of the 'Heaven on Earth' collection, created by world-renowned jewellery designer
CONDENSED INTERIM STATEMENTS OF FINANCIAL POSITION
In NIS in thousands |
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2019 |
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2018 |
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2018 |
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(Unaudited) |
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(Audited) |
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ASSETS |
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Non-Current Assets: |
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Fixed assets |
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3,594 |
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1,917 |
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1,736 |
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Loans to Shefa Yamim Ltd |
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2,371 |
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2,466 |
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2,494 |
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Interested party |
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77 |
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77 |
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77 |
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Assets for exploration and evaluation of precious stones |
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60,970 |
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57,135 |
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59,128 |
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Total non-current assets |
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67,012 |
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61,595 |
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63,435 |
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Current Assets: |
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Cash and cash equivalents |
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2,448 |
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1,737 |
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209 |
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Deposit in bank |
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15 |
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- . - |
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- . - |
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Trade receivables |
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182 |
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- . - |
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- . - |
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Interested parties |
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- . - |
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70 |
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- . - |
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Other accounts receivable |
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711 |
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387 |
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779 |
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Total current assets |
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3,356 |
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2,194 |
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988 |
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Total Assets |
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70,368 |
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63,789 |
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64,423 |
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EQUITY AND LIABILITIES |
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Equity attributed to Company shareholders |
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61,784 |
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51,717 |
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59,544 |
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Non-current Liabilities: |
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Long-term loans from interested party and others |
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- . - |
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687 |
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560 |
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Lease liability |
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1,774 |
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- . - |
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- . - |
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Liability for severance pay |
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155 |
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122 |
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138 |
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Warrants |
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1,389 |
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9,037 |
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564 |
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Total Non-current Liabilities |
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3,318 |
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9,846 |
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1,262 |
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Current Liabilities: |
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Short-term credit from bank and others |
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783 |
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396 |
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456 |
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Trade payables |
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994 |
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1,145 |
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1,368 |
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Interested parties |
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479 |
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- . - |
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114 |
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Other accounts payable |
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1,021 |
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685 |
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907 |
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Liability at fair value |
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798 |
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- . - |
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- . - |
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Loans convertible to shares |
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1,191 |
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- . - |
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772 |
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Total current liabilities |
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5,266 |
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2,226 |
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3,617 |
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Total Equity and Liabilities |
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70,368 |
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63,789 |
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64,423 |
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The accompanying notes to these condensed interim financial statements are an integral part thereof. |
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Date of Approval of the Financial Statements |
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CEO |
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CFO |
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Chairman of the Board of Directors |
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CONDENSED INTERIM STATEMENTS OF COMPREHENSIVE PROFIT (LOSS)
In NIS in thousands (except for per share profits (losses)
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For the period of Six Months Ended |
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For the Year Ended |
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2019 |
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2018 |
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2018 |
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(Unaudited) |
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(Audited) |
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Revenues from sales |
182 |
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- . - |
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- . - |
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Cost of sales |
(159) |
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- . - |
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- . - |
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Gross Profit |
23 |
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- . - |
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- . - |
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General and administrative expenses |
(1,546) |
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(1,845) |
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(3,410) |
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Operating loss |
(1,523) |
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(1,845) |
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(3,410) |
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Financial income |
540 |
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953 |
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9,637 |
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Financial expenses |
(1,590) |
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(67) |
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(218) |
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Financial income (expenses), net |
(1,050) |
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886 |
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9,419 |
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Comprehensive profit (loss) for the period, attributed to the Company shareholders |
(2,573) |
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(959) |
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6,009 |
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Basic and diluted profit (loss) per share (in NIS), attributed to the Company shareholders |
(0.017) |
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* (0.0069) |
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* 0.0431 |
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*Restatement
The accompanying notes to these condensed interim financial statements are an integral part thereof.
CONDENSED INTERIM STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
In NIS in thousands
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Share Capital |
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Receivables on Account of Shares |
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Capital Reserve for Share - based Payments |
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Capital Reserve from Transactions with Interested Parties |
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Accumulated Deficit |
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Total Shareholders' Equity Attributed to Company Shareholders |
Unaudited |
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Balance as of |
14,224 |
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94,337 |
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- . - |
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5,716 |
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6,312 |
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(61,045) |
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59,544 |
Comprehensive Loss for the period |
- . - |
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- . - |
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- . - |
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- . - |
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- . - |
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(2,573) |
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(2,573) |
Issuance of shares |
3,006 |
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2,067 |
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(295) |
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- . - |
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- . - |
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- . - |
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4,778 |
Share - based payment |
- . - |
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- . - |
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- . - |
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35 |
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- . - |
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- . - |
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35 |
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Balance as of June 30, 2019 |
17,230 |
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96,404 |
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(295) |
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5,751 |
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6,312 |
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(63,618) |
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61,784 |
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Balance as of January 1, 2018 |
13,905 |
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93,742 |
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- . - |
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5,583 |
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6,312 |
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(67,054) |
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52,488 |
Comprehensive Loss for the period |
- . - |
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- . - |
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- . - |
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- . - |
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- . - |
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(959) |
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(959) |
Issuance of shares |
19 |
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81 |
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- . - |
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- . - |
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- . - |
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- . - |
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100 |
Share- based payment |
- . - |
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- . - |
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- . - |
|
88 |
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- . - |
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- . - |
|
88 |
Receipts for issue of shares during 2012 |
- . - |
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- . - |
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- . - |
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- . - |
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- . - |
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- . - |
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- . - |
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Balance as of June 30, 2018 |
13,924 |
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93,823 |
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- . - |
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5,671 |
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6,312 |
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(68,013) |
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51,717 |
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Audited
Balance as of January 1, 2018 |
13,905 |
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93,742 |
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- . - |
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5,583 |
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6,312 |
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(67,054) |
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52,488 |
Comprehensive income for the Year |
- . - |
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- . - |
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- . - |
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- . - |
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- . - |
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6,009 |
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6,009 |
Issuance of shares |
319 |
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595 |
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- . - |
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- . - |
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- . - |
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- . - |
|
914 |
Share- based payment |
- . - |
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- . - |
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- . - |
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133 |
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- . - |
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- . - |
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133 |
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Balance as of December 31, 2018 |
14,224 |
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94,337 |
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- . - |
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5,716 |
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6,312 |
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(61,045) |
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59,544 |
The accompanying notes to these condensed interim financial statements are an integral part thereof.
SHEFA GEMS LTD. [Formerly Shefa Yamim (A.T.M.) LTD.]
CONDENSED INTERIM STATEMENTS OF CASH FLOWS
In NIS in thousands
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For the period of Six Months Ended June 30, |
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For the Year Ended December 31, |
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2019 |
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2018 |
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2018 |
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(Unaudited) |
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(Audited) |
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Cash Flows for Operating Activities: |
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Income (Loss) for the period |
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(2,573) |
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(959) |
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6,009 |
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Adjustments Required to Show Cash Flows for Operating Activities (Appendix A): |
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768 |
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(2,078) |
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(9,931) |
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Net Cash Used in Operating Activities |
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(1,805) |
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(3,037) |
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(3,922) |
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Cash Flows for Investing Activities: |
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Deposits, net |
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(15) |
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172 |
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173 |
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Acquisition of fixed assets |
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(242) |
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(206) |
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(391) |
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Proceeds from sale of fixed assets |
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- . - |
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- . - |
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55 |
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Investment in exploration and evaluation of precious stones assets |
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(1,198) |
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(1,316) |
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(3,541) |
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Loan rendered to Shefa Yamim Ltd |
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253 |
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(55) |
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(84) |
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Net Cash Used in Investing Activities |
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(1,202) |
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(1,405) |
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(3,788) |
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Cash Flows from Financing Activities: |
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Proceeds from share and option issue (includes premium), net |
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3,544 |
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- . - |
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908 |
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Credits received (repaid) from banks and others, net |
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34 |
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(42) |
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(2) |
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Repayment of loans from interested parties, net |
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- . - |
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(251) |
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(111) |
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Payables to shareholders |
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- . - |
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- . - |
|
685 |
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Repayment of long-term loans |
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- . - |
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(80) |
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(25) |
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Receipts on account of loans convertible to shares |
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1,932 |
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- . - |
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- . - |
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Interest paid |
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(212) |
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(24) |
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(106) |
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Net Cash Provided by (Used in) Financing Activities |
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5,298 |
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(397) |
|
1,349 |
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Exchange rate differences in regard to cash and cash equivalents |
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(52) |
|
87 |
|
81 |
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Increase (Decrease) in Cash and Cash Equivalents |
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2,239 |
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(4,752) |
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(6,280) |
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Cash and cash equivalents at the beginning of the period |
|
209 |
|
6,489 |
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6,489 |
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Cash and cash equivalents at the end of the period |
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2,448 |
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1,737 |
|
209 |
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The accompanying notes to these condensed interim financial statements are an integral part thereof.
SHEFA GEMS LTD. [Formerly Shefa Yamim (A.T.M.) LTD.]
CONDENSED INTERIM STATEMENTS OF CASH FLOWS
In NIS in thousands
Appendix A |
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For the period of Six Months Ended June 30, |
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For the Year Ended December 31, |
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2019 |
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2018 |
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2018 |
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(Unaudited) |
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(Audited) |
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Adjustments Required to Show Cash Flows for Operating Activities: |
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Expenses (income) not involving cash flows: |
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Depreciation * |
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27 |
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54 |
|
54 |
Share-based payment |
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9 |
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14 |
|
25 |
Commissions for mobilization of cash |
|
159 |
|
- . - |
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- . - |
Financing expenses (income), net |
|
1,050 |
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(886) |
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(9,419) |
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Change in Assets and Liabilities: |
|
|
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Decrease (Increase) in receivables |
|
(107) |
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20 |
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(169) |
Increase (Decrease) in trade payables |
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(469) |
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(759) |
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(121) |
Decrease in other accounts payable |
|
99 |
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(521) |
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(301) |
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|
768 |
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(2,078) |
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(9,931) |
* Net of depreciation encumbered on the exploration and evaluation assets for precious stones.
Appendix B |
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For the period of Six Months Ended June 30, |
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For the Year Ended December 31, |
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2019 |
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2018 |
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2018 |
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(Unaudited) |
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(Audited) |
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Significant Operations Not Involving Cash Flows: |
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Payables in regard to exploration and evaluation assets for precious stones |
|
457 |
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238 |
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428 |
Loan for acquisition of fixed assets |
|
63 |
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- . - |
|
124 |
Loans assigned to capital |
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1,316 |
|
- . - |
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- . - |
Balance from a supplier assigned to capital |
|
60 |
|
100 |
|
223 |
|
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The accompanying notes to these condensed interim financial statements are an integral part thereof.
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