Minergy Limited (MIN.bw) 2019 Abridged Report

We have extracted the Chairman’s Statement from the 2019 abridged report of Minergy Limited (MIN.bw), listed on the Botswana Stock Exchange:

OVERVIEW

It is important for readers to note that a comparison between the results for 30 June 2019 (“current year”) and 30 June 2018 (“prior year”) is not practical on a like-for-like basis. The Company was in the exploration and evaluation phase of the project for the prior year and has transitioned into mine development during the current year with production status achieved post the year-end.

The Statement of Comprehensive Income is dominated by the increase in operating expenditure, including expenditure not reflected in the comparative period. The increases are to be viewed in the context of moving from exploration and evaluation to mine development and include the following variances:

  • mine site overheads for site operations, which include additional staff and site costs that are typical of a project in the mine development phase, but which were not incurred in the exploration and evaluation environment;
  • additional costs to support the administration, finance and marketing departments;
  • preparatory AIM listing and advisory costs;
  • expensing of certain infrastructure costs such as electrifying the mine (which includes the main connection to the community village), renovating the town hall and upgrading various roads, all of which Minergy is not the beneficial owner of;
  • additional charges for the share based payment, which includes the vesting of tranche 1 of the approved 2017 Share Option Plan;
  • incurring debt with an increase in rela