17:00 Thu 30 Apr 2020
Shefa Gems Ltd - Full Year Results
B"H
("
Full Year Results for the year ended
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 -
· 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
· Received highest grade bulk sampling results to date in the
· 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
· All exploration and prospecting permits renewed for a further year, covering the Kishon catchment (including Kishon Mid-Reach Zones 1, 2, 3),
Corporate and Financial
· Appointed Michael Rosenberg OBE as Chairman of the Board, separating the roles of Chairman and Chief Executive Officer
·
· Avi's son
· Raised
· Conducted a 10 for one share split of
· Granted a trademark for the Company's new name,
· First jewellery collection using
Post Period
· Appointed
· Awarded the Certificate of Discovery for the gemstone mine development in the Kishon Mid-Reach, Zones 1 and 2 in
· Carmeltazite selected as Mineral of the Year 2018 by the
"Looking ahead,
"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
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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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Notes to Editors
About
With its international geological consultant team,
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
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
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
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
Operational Review
Updated CPR - Maiden resource for Kishon Mid-Reach project
The CPR was prepared by
Technical Economic Evaluation report
As stated previously, in
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
· Operating cost budget over the LoM estimated at
· Potential to halve unit operation cost to
Independent valuation of gemstones
In addition to the updated CPR and the TEE report,
New discoveries
Carmeltazite
Carmeltazite, found in
Discovery of the first naturally occurring Vanadium metal hydride
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
Zone 2 - Bulk sampling completed and a Certificate of Discovery received
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
During the period, a total of 49 drilling surveys (390 meters drilled), 30 bulk and mini bulk samples were collected from the
On
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
The 31-piece collection was completed in
The collaboration with
Renewal of Exploration and Prospecting permits and Prospecting Licences
Award of Certificate of Discovery
In
Corporate Review
In
In addition, the Company has been seeking to address the lack of liquidity in the shares of
Board changes
Several changes have been made to the board to ensure the Company adheres to high corporate governance standards.
It was with great regret and sadness that the Company announced in October, former Chief Executive Officer (CEO),
Post period, in
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
Under the agreement between the Company and
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
Placing and Subscription for
As announced in
The COVID-19 Pandemic
The COVID-19 outbreak has impacted everyone, but for
As stated above, in
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
Target 2020 Milestones:
· Continue mine planning procedures with the
· Progress with a mining plan that demonstrates the commercial feasibility of the
· 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
STATEMENTS OF FINANCIAL POSITION
NIS in thousands
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2019 |
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2018 |
ASSETS |
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Non-Current Assets: |
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Fixed assets, net |
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1,494 |
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1,736 |
Assets in regard to usage rights |
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1,751 |
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- . - |
Loans to top-co |
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1,116 |
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2,494 |
Interested party |
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77 |
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77 |
Assets for exploration and evaluation of precious stones |
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60,628 |
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59,128 |
Total non-current assets |
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65,066 |
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63,435 |
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Current Assets: |
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Cash in foreign currency |
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6 |
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209 |
Short-term deposit in bank |
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14 |
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- . - |
Clients |
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51 |
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- . - |
Receivables |
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145 |
|
779 |
Total current assets |
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216 |
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988 |
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Total Assets |
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65,282 |
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64,423 |
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EQUITY AND LIABILITIES |
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Equity |
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56,422 |
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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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560 |
Financial lease |
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1,492 |
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- . - |
Liability for severance pay |
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164 |
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138 |
Options convertible to shares |
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1,120 |
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564 |
Total Non-current Liabilities |
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2,776 |
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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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762 |
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456 |
Trade payables |
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1,071 |
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1,368 |
Interested parties |
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211 |
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114 |
Other accounts payable |
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1,114 |
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907 |
Liabilities at fair value |
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1,792 |
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- . - |
Loans convertible to shares |
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1,134 |
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772 |
Total current liabilities |
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6,084 |
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3,617 |
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Total Equity and Liabilities |
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65,282 |
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64,423 |
STATEMENTS OF COMPREHENSIVE PROFIT (LOSS)
NIS in thousands (except for per share profits (losses)
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,For the Year Ended |
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2019 |
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2018 |
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2017 |
Costs and expenses |
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General and administrative expenses |
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(3,123) |
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(3,410) |
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(541) |
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Amortization of assets for exploration |
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(2,409) |
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- . - |
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- . - |
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Operating loss |
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(5,532) |
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(3,410) |
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(541) |
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Other expenses, net |
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(1,023) |
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- . - |
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- . - |
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Loss prior to financing |
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(6,555) |
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(3,410) |
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(541) |
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Financial expenses |
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(1,534) |
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(218) |
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(15,954) |
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Financial income |
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160 |
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9,637 |
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237 |
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Financial income (expenses), net |
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(1,374) |
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9,419 |
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(15,717) |
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Profit (Loss) for the year and comprehensive profit (loss) for the year |
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(7,929) |
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6,009 |
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(16,258) |
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Basic and diluted income (loss) per share (in NIS) |
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(0.049) |
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*0.0431 |
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*(0.170) |
.Subsequent to the split, an adjustment of the income (loss) per share was performed*
STATEMENT OF CHANGES IN EQUITY
NIS in thousands
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Share Capital |
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Receivables in Regard to Shares |
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Capital Reserve for Share-Based Payments |
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Capital Reserve from Transactions with |
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Accumulated Deficit |
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Total Equity Attributed to Shareholders |
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Balance as of |
9,387 |
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78,626 |
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- . - |
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5,291 |
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6,312 |
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(50,796) |
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48,820 |
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- . - |
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Comprehensive Loss for the year |
- . - |
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- . - |
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- . - |
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- . - |
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- . - |
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(16,258) |
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(16,258) |
Issuance of shares |
*4,518 |
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* 14,339 |
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- . - |
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- . - |
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- . - |
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- . - |
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18,857 |
Share based payment |
- . - |
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- . - |
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- . - |
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292 |
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- . - |
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- . - |
|
292 |
Receipts for issue of shares during 2012 |
- . - |
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777 |
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- . - |
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- . - |
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- . - |
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- . - |
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777 |
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Balance as of |
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 |
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- . - |
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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 |
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 |
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- . - |
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Comprehensive Loss for the year |
- . - |
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- . - |
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- . - |
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- . - |
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- . - |
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(7,929) |
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(7,929) |
Issuance of shares |
3,006 |
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1,960 |
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(205) |
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- . - |
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- . - |
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- . - |
|
4,761 |
Share based payment |
- . - |
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- . - |
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- . - |
|
46 |
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- . - |
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- . - |
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46 |
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Balance as of |
17,230 |
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96,297 |
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(205) |
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5,762 |
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6,312 |
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(68,974) |
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56,422 |
Net of issuance expenses and fees in the amount of approximately
STATEMENTS OF CASH FLOWS
NIS in thousands
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,For the Year Ended |
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2019 |
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2018 |
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2017 |
Cash flows from operating activities: |
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Profit (Loss) for the year |
(7,929) |
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6,009 |
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(16,258) |
Appendix A - Adjustments required to reconcile profit (loss) for the year to net cash provided by (used in) operating activities |
5,209 |
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(9,931) |
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17,1140 |
Net cash provided by (used in) operating activities |
(2,720) |
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(3,922) |
|
856 |
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Cash flows from investing activities: |
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Purchase of fixed assets |
(395) |
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(391) |
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(531) |
Consideration from sale of fixed assets |
- . - |
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55 |
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- . - |
Deposits |
(14) |
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173 |
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- . - |
Investment in exploration and evaluation assets |
(2,161) |
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(3,541) |
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(4,375) |
Loan repaid (rendered) to the top-co |
253 |
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(84) |
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(1,177) |
Interest received |
- . - |
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- . - |
|
188 |
Net cash used in investing activities |
(2,317) |
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(3,788) |
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(5,895) |
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Cash flows from financing activities: |
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Consideration received for issuance of share capital and options (including additional capital), net |
3,575 |
|
908 |
|
137 |
Increase in deferred issuance expenses |
- . - |
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- . - |
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(4,707) |
Receipt (Repayment) of credits from banks and others, net |
103 |
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(2) |
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(205) |
Receipt (Repayment) of loans from interested parties, net |
(674) |
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(111) |
|
446 |
Repayment of fund in regard to leasing |
(299) |
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- . - |
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- . - |
Liabilities to shareholders |
- . - |
|
685 |
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- . - |
Receipt of loans convertible to shares |
2,636 |
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- . - |
|
16,611 |
Repayment of long-term loans |
- . - |
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(25) |
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(40) |
Interest paid |
(334) |
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(106) |
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(458) |
Net cash provided by financing activities |
5,007 |
|
1,349 |
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11,784 |
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Linkage differences in regard to cash and cash equivalents |
(173) |
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81 |
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(257) |
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Increase (Decrease) in cash and cash equivalents |
(203) |
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(6,280) |
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6,488 |
Cash and cash equivalents at the beginning of the year |
209 |
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6,489 |
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1 |
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Cash and cash equivalents at the end of the year |
6 |
|
209 |
|
6,489 |
STATEMENTS OF CASH FLOWS
NIS in thousands
APPENDIX A |
For the Year Ended |
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Adjustments required to show the cash flows from current operations: |
2019 |
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2018 |
|
2017 |
Expenses (Income) not involving cash flows: |
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Depreciation * |
49 |
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54 |
|
60 |
Share based payment |
11 |
|
25 |
|
46 |
Capital mobilization fees |
414 |
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- . - |
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- . - |
Amortization of assets for exploration and evaluation of precious stones |
2,409 |
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- . - |
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- . - |
Amortization of a loan to an interested party |
1,116 |
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- . - |
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- . - |
Finance expenses (income), net |
1,374 |
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(9,419) |
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15,717 |
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5,373 |
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(9,340) |
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15,823 |
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|
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Changes in asset and liability items: |
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Increase in clients |
(51) |
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- . - |
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- . - |
Decrease (Increase) in receivables |
376 |
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(.169) |
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(64) |
Increase (Decrease) in trade payables |
(374) |
|
121 |
|
1,403 |
Increase (Decrease) in liability to an interested party |
(296) |
|
(242) |
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- . - |
Increase (Decrease) in other accounts payable |
181 |
|
(301) |
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(48) |
|
(164) |
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(591) |
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1,291 |
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5,209 |
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(9,931) |
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17,114 |
* Net of depreciation encumbered on the assets for exploration and evaluation of precious stones.
APPENDIX B |
For the Year Ended December 31, |
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Significant non-cash flow operations: |
2019 |
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2018 |
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2017 |
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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 |
|
- . - |
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- . - |
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 |
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