PR Newswire
Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.
5 November 2020
TRI-STAR RESOURCES PLC
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2019
Tri-Star Resources plc (�Tri-Star�, �TSTR� or the �Company� and together with its subsidiaries, the �Group�) the independent metal processing and technology company, is pleased to announce its audited financial results for the year ended 31 December 2019.� The Company�s principal interest is an antimony and gold production facility (the �SPMP Project� or the �Project�) being developed in Sohar, Sultanate of Oman by Strategic & Precious Metals Processing LLC (�SPMP�), an Omani company in which Tri-Star had a 40% equity interest in the period, subsequently reduced to 16.3%.
The Company�s Annual Report and Audited Financial Statements for the year ended 31 December 2019 will be posted to shareholders on 9 November 2020 and are also available on the website.�
The Company will announce details of its Annual General Meeting (�AGM�) and despatch the Notice of AGM to shareholders in due course. Given the current restrictions on public gatherings, shareholders will not be permitted to attend the AGM in person, other than for the purposes of establishing quorum, and each of the Resolutions to be considered at the meeting will be voted on by way of a poll.
CHAIRMAN�S STATEMENT
Introduction
The last 18 months have been a very frustrating period for TSTR or the �Company�).� SPMP, TSTR�s sole investment has achieved a number of important milestones but there have been significant delays, costs continue to increase and the funding of SPMP has looked uncertain.
On the positive side, SPMP produced and sold its first batches of antimony metal and of gold dore and has been operating individual parts of the plant for short periods at 50% of capacity.� This proved that the plant was capable of producing in small quantities but efforts to ramp up production have been hampered in part by the continued lack of funding for SPMP.
Delays over several years have meant that the total funding required to complete the plant has increased enormously. TSTR has not invested further in SPMP since 2018 and SPMP has been seeking debt finance from both domestic and international institutions from the middle of the year 2019.� By the end of 2019, it was clear that SPMP would need to rely upon funding from local banks rather than international ones.�
At the end of 2019, a local institution (�Local Bank�) had shown interest and SPMP was actively engaged with the bank to agree terms.� However, it transpired that the Local Bank was only prepared to lend on terms unacceptable to SPMP�s shareholders.
At the end of the year and in January 2020, Investment Authority Company LLC (previously Oman Investment Fund Holding Company LLC) (�IAC�) injected a further USD32m in SPMP and DNR Industries Limited (�DNR�) a further USD8m (�December 2019 Funding�).� It had not been agreed with TSTR the terms on which this funding would be made.�
In April 2020, IAC instituted arbitration proceedings in order to try and force the December 2019 Funding to be treated as equity on a valuation to be agreed only after the event.� TSTR had a veto right over this and, based on legal advice, the Board were confident that it would prevail.
We continued to negotiate with our fellow shareholders in SPMP in order to find an equitable solution in the knowledge that TSTR was unlikely to be able to provide any future funding for SPMP.� Circumstances were exacerbated as the magnitude of the final funding required to complete the SPMP project was uncertain and likely to increase. It was announced in January 2020 that SPMP required further debt funding of cUSD120m comprising USD60m for rectification costs and a further USD60m for working capital, (the �Funding Gap�) in addition to the substantial sums already invested by the shareholders of SPMP.
The Board is pleased to report that we have reached a settlement agreement with IAC, DNR and SPMP (the �Settlement Agreement�), which provides greater certainty of funding for SPMP, redresses the imbalance of the amounts invested by the three shareholders and provides certainty over TSTR�s shareholding going forward with no further need for TSTR to finance SPMP.�
It is the Board�s view that this solution, whilst reducing the Company�s equity stake, greatly increases the chances of the shareholders of TSTR achieving a liquidity event in the future.� There was ultimately no alternative for TSTR with the possibility of SPMP going into liquidation, at which point the TSTR shareholders would receive nothing.� The agreement that we have achieved is, in the Board�s view, a better result than would have been achieved through arbitration which would have cost at least �250,000 in costs and fees; funds that TSTR, absent this Settlement Agreement, does not have.
Investment to date
In January 2020 TSTR announced the Funding Gap referred to above, in addition to the substantial sums already invested by the shareholders of TSTR and an additional equity requirement of cUSD40m. Tri-Star�s inability during 2019 and 2020 to make further investments pari passu with its shareholding in SPMP had led to an imbalance of funding between the shareholders of SPMP.� As a result, TSTR�s investment in all forms comprises approximately 16.3% of the total amount invested to date of cUSD206m, the balance being provided by IAC and DNR.
The Settlement Agreement
Over the last few months, Tri-Star and its joint venture partners have been in discussions to find a resolution to the dispute. These concluded on 1 November 2020 with a settlement agreement between the parties embracing a number of constitutional and financial changes.� In broad terms, IAC and DNR have agreed to provide sufficient further funding in order for the plant to reach completion, without further equity dilution to TSTR and that all sums invested to date are converted into equity and equity loans (�Equity Loans�) proportionately. The Equity Loans are zero coupon, undated and repayable at the option of SPMP, subordinated but ranking above equity.
As a result of the Settlement Agreement, TSTR�s investment in SPMP will comprise equity of USD 2.6m (16.3% of total equity) and Equity Loans of USD30.8 million (16.3% of the total Equity Loans).� The balance is held by IAS and DNR.� Each shareholder of SPMP owns an equal percentage of equity and equity loans, such that their proportion of equity to Equity Loans is the same.�
Tri-Star�s claim to a final USD2m payment due from the assignment of the intellectual property rights to SPMP has been settled by USD500,000 payable in cash and the balance forming part of TSTR�s total funding of SPMP.� A further sum of USD100,000 representing settlement for other outstanding amounts will also be paid in cash to TSTR by SPMP.
It is envisaged that future SPMP funding until plant completion will be sought first from third party sources; failing that, shareholders may fund SPMP with subordinated non-convertible debt with a coupon of 20% (�New Loans�).� IAC has agreed to fund TSTR�s share thereby avoiding dilution of TSTR�s equity interest.� Of the Funding Gap noted above, USD40m has already been provided as equity and equity loans.� The balance, and any extra funding needed, is likely to be provided in the form of New Loans at a rate of 20% interest.
TSTR�s interest may only be diluted if shareholders with 75% or more of the voting rights agree (which currently requires at least 2 shareholders): a) that capital is required to expand the project in a material way; b) to apply for a listing on a recognised stock exchange which results in the free float being at least 25% of the issued share capital; c) that an independent third party investor injects equity in the business on an arms-length basis; or d) in order to continue compliance with bank facility covenants, the banks require� any of the New Loans to be converted to equity.
In the light of the change in shareholdings, it has been agreed that TSTR will no longer have a seat on the board of SPMP, neither will it have any veto rights over previously reserved matters, which will now require the consent of shareholders holding 75% or more of the voting rights, i.e. at least two shareholders.
The bank guarantee provided by TSTR, IAC and DNR in favour of Bank Nizwa and Alizz Islamic Bank remains in place, although all parties have agreed to seek to renegotiate the terms to ensure that it is released once the plant is commissioned.� TSTR�s exposure to the guarantee has been reduced to reflect its decreased shareholding of 16.3%.� As a result of the Settlement Agreement, which provides for the ongoing funding of SPMP, it is the Board�s view that the risk of the guarantee being called has been significantly reduced.� The current expected date of completion of the plant is in H1 2021 at which point the guarantee should be expunged.
Total exposure to Bank Nizwa and Alizz Bank at 31 December 2020 stood at USD57.3m.
Odey Loan
It has been agreed that interest on the Odey loan to TSTR will reduce to 5% on completion of the Settlement Agreement.� At 30 September 2020 the loan stood at USD2.3m.
Cancellation of admission to AIM
As a result of the Settlement Agreement, TSTR will become a passive investor in SPMP.� Accordingly, the Board is of the view that the costs involved in keeping TSTR admitted to AIM are not warranted.� Accordingly, a shareholder circular will be sent shortly to all shareholders recommending that TSTR�s admission to AIM is cancelled.� It is intended that arrangements will be made for matched market transactions to take place.
As a result of the Settlement Agreement, TSTR will receive cash of USD600,000. Subject to the cancellation being approved by TSTR shareholders at a general meeting, the current board will resign. A single director will be appointed and running costs will be reduced to a minimum which are expected to be less than �50,000 per annum.
Financial Summary
I am pleased to report that the Board has continued to reduce the overheads of the Company, from �842,000 in 2018 to �485,000. The Company�s current year total comprehensive loss of �6.4m (2018: �1.5m) reflects the fair value movement of our loan to SPMP of �5.4m. In October 2019 the Company raised �316,000 (before expenses) for general working capital. A dividend payment is not being recommended at this time.
Outlook and Summary
I am aware that this may not be the outcome that some shareholders had envisaged, but I do believe that we will have a liquidity event in the foreseeable future and I hope this will give shareholders the opportunity to either receive a cash payment or shares in a listed SPMP.
I would like to thank our partners, the management team and our shareholders for their dedication, commitment and efforts during this difficult time.
Adrian Collins
Non-Executive Chairman
Strategic Report
Introduction
The Company�s principal activities are in the SPMP Project, an antimony and gold production facility. The SPMP Project is based in Sohar, Sultanate of Oman, and is being developed by SPMP, an Omani company in which TSTR had a 40% equity interest at 31 December 2019, subsequently reduced to 16.3%.
SPMP Project
Background
The SPMP Project is a commercial facility producing high grade antimony ingots, powdered antimony trioxides (�ATO�), gypsum and gold ore bars. Feedstock is sourced internationally and treated by an environmentally friendly roasting process.
The Project remains an attractive prospect for Tri-Star:�������
Oman joint venture
SPMP was formed in June 2014 to develop and build the Project. Initially Tri-Star had a 40% equity interest in SPMP, with the other joint venture partners being The Oman Investment Fund (�OIF�) (40% equity holder) and DNR Industries Limited, part of Dutco Group in Dubai (20% equity holder).
An emerging application is the use of antimony in microelectronics.
Other Tri-Star projects
Canada
The Company owns 100% of Tri-Star Antimony Canada. Through this Canadian subsidiary, the Company owns a license to explore the land of a large undeveloped antimony project in Canada (�Bald Hill deposit�). Tri-Star does not intend to renew this licence, which expired in May 2020.
Turkey
The Company disposed of its non-core asset G�yn�k mine in Turkey for a total cash consideration of USD $0.5m (of which $0.1m is due on first product sales), which was completed in March 2019.
Financing
In October 2019 Tri-Star completed a placing of 987,500 ordinary shares at 32 pence per share raising �316,000 before expenses for general working capital.
Result for the year
Administration costs were reduced by 42% in 2019 to �486,000 from �842,000 in 2018. This reduction reflects the cost savings measures implemented by the Board.
| 2019 | 2018 | |
| Summary Profit and Loss Account | ��000 | ��000 |
| Share based payments | (224) | (580) |
| Reversal of impairment | - | 244 |
| Administrative expenses | (486) | (842) |
| Loss from operations� | (710) | (1,178) |
| Movement in the fair value of financial asset | (5,404) | 293 |
| Finance expense net | (312) | (624) |
| Loss before taxation | (6,426) | (1,509) |
In accordance with IFRS 9, the fair value of the mezzanine loan from TSTR to SPMP (the �SPMP Mezzanine Loan�) has been derived using a net present value calculation in which an effective discount rate of 23% has been applied. �At 31 December 2019, it looked unlikely that SPMP would be in a position to repay the loan in December 2022 and thus would be likely to default and, therefore, it is assumed that the mezzanine would be converted into equity at the earliest possible date, which is December 2023. The potential value of SPMP has been assessed using cashflow forecasts prepared by SPMP to which an effective discount rate of 23% has been applied. Tri-Star�s investment in SPMP has been reduced to 16.3% and Tri-Star no longer has significant influence over the operations
Financial position
At 31 December 2019 the Company had �284,000 (2018: �312,000) in cash, total assets of �15,662,000 (2018: �21,284,000), and total liabilities of �1,581,000 (2018: �1,331,000). As at 31 October 2020, the Company had �12,000 in cash, with funds of USD$600,000 due from SPMP by 15 November 2020 under the Settlement Agreement signed on 1 November 2020.
Key Performance Indicators (�KPIs�)
At this stage in the Company�s development, the key performance indicator is the loss after tax, given the nature of the Company�s assets and the current development of its operations. This will be reviewed when appropriate.
Safety, health and environmental policies
Tri-Star is committed to meeting international best industrial practice in each jurisdiction in which it operates with respect to human rights, safety, health and environmental (�SHE�) policies. Management, employees and contractors are governed by, and required to comply with, Tri-Star�s SHE policies as well as all applicable international, national federal, provincial and municipal legislations and regulations. It is the primary responsibility of the supervisors and other senior field staff of Tri-Star and its subsidiaries to oversee safe work practices and ensure that rules, regulations, policies and procedures are being followed.
Principal risks and uncertainties
The Board continually reviews the risks facing the Company. The Company is not yet revenue generating. The principal risks and uncertainties facing the Company involve delays to the commissioning and ramp up of the SPMP Project which may, in turn, lead to delays in repaying the TSTR equity loan. Delays can be caused by construction issues, design failures or technological problems. At the same time, as a processing plant, SPMP requires successful partnerships with suppliers of metal ores and with Offtake providers or distributors to buy the plant�s output. The availability of such partners and the terms of engagement may impact plant operations and profitability. The SPMP Project has had recent setbacks and the timing and progress is not under the direct control of Tri-Star. In terms of other more significant but lower probability risks, there is the matter of political risk within Oman, and internationally.
Other risks and uncertainties are set out in the Corporate Governance section below.
Financial risk management objectives and policies
The Company�s principal financial instruments comprise of cash, loan notes and other financial liabilities. The Company has various other financial instruments such as loans and trade payables, which arise directly from its operations.
It is, and has been throughout the year under review, the Company�s policy that no trading in financial instruments shall be undertaken. The main risks arising from the Company�s financial instruments are liquidity risk, price risk and foreign exchange risk. The Board reviews and agrees policies for managing each of these risks and they are summarised under Corporate Governance below.
Going concern
The Directors have prepared cash flow forecasts for the period ending December 2021. Subsequent to the signing of the Settlement Agreement with the shareholders of SPMP as discussed in the Chairman�s statement the Company is due to receive USD $600,000, and the holders of the secured loan notes have agreed to extend the term of the notes to 31 December 2021. With the significant reduction in costs as a result of delisting (and taking the company private), the cash flow forecasts indicate that the Company will require approximately �350,000 to meet its liabilities as they fall due in the period. The Directors� have considered the possible effects of Covid-19 but do not expect any significant impact from this.
Accordingly, the Directors believe that it is appropriate to prepare the financial statements on a going concern basis.
However, there is an outstanding guarantee from the Company in favour of local banks in respect of a loan to SPMP, and although the Directors are confident that this will not be called upon, there is no certainty of this. Whilst Tri-Star�s potential liability has been reduced as a result of signing the recent Settlement Agreement, if the guarantee is called upon, it could render the Company unable to pay its debts as they fall due and the existence of this guarantee therefore presents a material uncertainty which may cast significant doubt on the Company�s ability to continue as a going concern.
Approval by and signature on behalf of the board
David Facey
Chief Executive Officer & Chief Financial Officer
Enquiries:
| Tri-Star Resources plc David Facey, CEO/ CFO� | c/o SBP Tel: +44 (0)20 7236 1177 |
| St Brides Partners (Financial PR) Isabel de Salis / Beth Melluish | Tel: +44 (0)20 7236 1177 |
| SP Angel Corporate Finance (Nominated Adviser) Jeff Keating/ Caroline Rowe | Tel: +44 (0)20 3470 0470 |
| finnCap Ltd (Broker) Christopher Raggett | Tel: +44 (0)20 7220 0500 |
Tri-Star Resources plc
Statement of Comprehensive Income
| For the year ended 31 December 2019 | Notes | 2019 | 2018 | |
| ��000 | ��000 | |||
| Share based payments | (224) | (580) | ||
| Reversal of impairment of investment in subsidiary | - | 244 | ||
| Administrative expenses | (486) | (842) | ||
| Total administrative expenses | (710) | (1,178) | ||
| Loss from operations | (710) | (1,178) | ||
| Movement in fair value of financial asset | (5,404) | 293 | ||
| Finance income | 2 | 1 | 43 | |
| Finance cost | 2 | (313) | (667) | |
| Loss before taxation | (6,426) | (1,509) | ||
| Taxation | 3 | 18 | 48 | |
| Loss after taxation, and loss attributable to the equity holders of the Company | (6,408) | (1,461) | ||
| Other comprehensive expenditure | ||||
| Items that will be reclassified subsequently to profit and loss | ||||
| Other comprehensive income for the period, net of tax | ||||
| �- | - | |||
| Total comprehensive loss for the year, attributable to owners of the company | (6,408) | (1,461) | ||
| Loss per share | ||||
| Basic and diluted loss per share (pence) | 4 | (6.79) | (1.90) |
Tri-Star Resources plc
Statement of Financial Position
| As at 31 December 2019 | 2019 | 2018 | ||
| ASSETS | Notes | �'000 | �'000 | |
| Non-current | ||||
| Investment in subsidiary | ������������������������ -�� | 247 | ||
| Investment in associates | ���������������� 3,893�� | 3,893 | ||
| Loan to associate held at fair value through profit and loss | 5 | 11,400 | 16,727 | |
| ���������� 15,293 | ���������� 20,867 | |||
| Current | ||||
| Cash and cash equivalents | 284 | 312 | ||
| Trade and other receivables | 85 | 105 | ||
| Total current assets | ������������������� 369 | ������������������� 417 | ||
| Total assets | 15,662 | 21,284 | ||
| LIABILITIES | ||||
| Current | ||||
| Trade and other payables | 92 | 91 | ||
| Short term loans | 1,396 | 1,129 | ||
| Total current liabilities | 1,488 | 1,220 | ||
| Non-current loans | ||||
| Deferred tax liability | 93 | 111 | ||
| Total liabilities | 1,581 | 1,331 | ||
| EQUITY | ||||
| Issued share capital | 6,936 | 6,884 | ||
| Share premium | 45,104 | 44,816 | ||
| Share based payment reserve | 1,811 | 1,671 | ||
| Retained earnings | (39,770) | (33,418) | ||
| Total equity | 14,081 | 19,953 | ||
| Total equity and liabilities | 15,662 | 21,284 |
Tri-Star Resources plc
Statement of Changes in Equity
| Share capital | Share premium | Share based payment reserves | Retained earnings | Total equity | ||
| �'000 | �'000 | �'000 | �'000 | �'000 | ||
| Balance at 1 January 2018 | 3,160 | 31,347 | 1,105 | (31,957) | 3,655 | |
| Issue of share capital | 3,724 | 13,711 | - | - | 17,435 | |
| Share issue costs | - | (242) | - | - | (242) | |
| Share based payments | - | - | 566 | - | 566 | |
| Transactions with owners | ������� 3,724 | ����� 13,469 | 566 | ������������ -�� | ����� 17,759 | |
| Loss for the period | - | - | - | (1,461) | (1,461) | |
| Total comprehensive loss for the period | ������������ -�� | ������������ -�� | ������������ -�� | (1,461) | (1,461) | |
| Balance at 31 December 2018 | 6,884 | 44,816 | 1,671 | (33,418) | 19,953 | |
| Issue of share capital | 52 | 292 | - | - | 344 | |
| Share issue costs | - | (4) | - | - | (4) | |
| Transfer on lapse of warrants | - | - | (56) | 56 | - | |
| Share based payments | - | - | 196 | - | - | |
| Transactions with owners | ������������ 52 | ���������� 288 | 140 | ������������ 56 | ���������� 536 | |
| Loss for the period | �- | �- | �- | (6,408) | (6,408) | |
| Total comprehensive loss for the period | ������������ -�� | ������������ -�� | ������������ -�� | (6,408) | (6,408) | |
| Balance at 31 December 2019 | 6,936 | 45,104 | 1,811 | (39,770) | 14,081 |
Tri-Star Resources plc
Statement of Cashflows
| For the year ended 31 December 2019 | 2019 | 2018 | |
| �'000 | �'000 | ||
| Cash flow from operating activities | |||
| Continuing operations | |||
| Loss after taxation | (6,408) | (1,461) | |
| Depreciation | - | 12 | |
| Impairment reversal | - | (244) | |
| Finance income | (1) | (43) | |
| Finance cost | 313 | 667 | |
| Movement on fair value of financial asset | 5,404 | (293) | |
| Fees paid by shares | 28 | 15 | |
| Share based payments | 196 | 565 | |
| Decrease/(increase) in trade and other receivables | 20 | (14) | |
| (Decrease)/increase in trade and other payables | (17) | (1) | |
| Net cash (outflow) from operating activities | (465) | (797) | |
| Cash flows from investing activities | |||
| Finance income | 1 | 43 | |
| Loans made to associate | (77) | (12,698) | |
| Net receipts on sale of subsidiary | 247 | - | |
| Net cash inflow/(outflow) from investing activities | 172 | (12,655) | |
| Cash flows from financing activities | |||
| Proceeds from issue of share capital | 316 | 17,420 | |
| Share issue costs | (4) | (242) | |
| Finance costs | - | (491) | |
| Loans repaid | - | (3,560) | |
| Net cash inflow from financing activities | 312 | ��������� 13,127 | |
| Net change in cash and cash equivalents | 18 | (325) | |
| Cash and cash equivalents at beginning of period | 312 | 473 | |
| Exchange differences on cash and cash equivalents | (46) | 164 | |
| Cash and cash equivalents at end of period | 284 | 312 |
BASIS OF PREPARATION
The financial statements have been prepared under the historical cost convention except for the loan to associate and derivative financial instrument which is at fair value and in accordance with International Financial Reporting Standards as adopted by the European Union (�IFRS�), and in accordance with the Companies Act 2006.
The Company�s ordinary shares are quoted on AIM, a market operated by the London Stock Exchange. The Company applies the Companies Act 2006 when preparing its annual financial statements. The Company has taken advantage of the exemption under S402-405 of the Companies Act, to not prepare Group accounts as the subsidiary companies are considered to be immaterial.�The comparative accounts for 31 December 2018 also relate to the Company only.
The Company financial statements have been prepared under IFRS and in accordance with the Companies Act 2006.
NOTES TO THE FINANCIAL STATEMENTS
An operating segment is a distinguishable component of the Group that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the Group�s chief operating decision maker to make decisions about the allocation of resources and an assessment of performance and about which discrete financial information is available.
The Board considers that the Group comprises only one operating segment, that of its investment in SPMP.
In respect of the non-current assets, �15,293,000 (2018: �20,867,000) arise in the UK, and �Nil (2018: �Nil) arise in the rest of the world.
| 2019 | 2018 | ||
| �'000 | �'000 | ||
| Finance income | |||
| Bank interest | 1 | 43 | |
| 1 | 43 |
� �
| 2019 | 2018 | ||
| �'000 | �'000 | ||
| Finance costs | |||
| Interest and fees payable on short term loans | 313 | 667 | |
| 313 | 667 |
Unrelieved tax losses of approximately �11.9 million (2018: �6.1 million) are available to offset against future taxable trading profits. The related deferred tax asset arising at 31 December 2019 is �2,260,000 (2018: �1,147,000) and has not been provided on the grounds that it is uncertain when taxable profits will be generated by the Group to utilise those losses.�
The tax credit for the Group for the year comprises:
| 2019 | 2018 | ||
| �'000 | �'000 | ||
| Research and development taxation relief | �������������������� - | �������������������� 29 | |
| Deferred tax relief in respect of transition to IFRS | 18 | 19 | |
| 18 | 48 |
The tax assessed for the period differs from the standard rate of corporation tax in the UK as follows:
| 2019 | 2018 | ||
| �'000 | �'000 | ||
| Loss before taxation | (6,426) | (1,509) | |
| Loss multiplied by standard rate | (1,221) | (287) | |
| of corporation tax in the UK of 19% (2018: 19%) | |||
| Effect of: | |||
| Expenses not deductible for tax purposes | 44 | 179 | |
| R&D tax rebate | - | (29) | |
| Interest disallowed | 60 | 127 | |
| Deferred losses | (13) | - | |
| Unrelieved tax losses | 1,113 | 233 | |
| Total tax credit for year | (18) | 48 |
The calculation of the basic loss per share is based on the loss attributable to ordinary shareholders divided by the weighted average number of ordinary shares in issue during the period.
| 2019 | 2018 | ||
| ��000 | ��000 | ||
| (Loss) attributable to owners of the Company after tax | (6,408) | (1,461) | |
| 2019 | 2018 | ||
| Number | Number | ||
| Weighted average number of ordinary shares for calculating basic loss per share | ������� 94,318,114 | ������ 76,820,518 | |
| 2019 | 2018 | ||
| Pence | Pence | ||
| Basic and diluted loss per share | (6.79) | (1.90) |
Dilutive earnings per share is the same as basic loss per share in each year because the potential shares arising under the share option scheme and share warrants are anti-dilutive. The weighted average number of ordinary shares excludes deferred shares which have no voting rights and no entitlement to a dividend.
5��������� LOANS RECEIVABLE HELD AT FAIR VALUE THROUGH PROFIT OR LOSS
Loans receivable represent the USD $6 (�4.4) million mezzanine loan which the Company advanced to SPMP as announced on 29 November 2017 and the further amounts of USD $16,700,000 (�12,700,000) advanced during 2018, and $100,000 (�77,000) advanced during 2019. The principal terms of the loan are as follows:
The loan has been measured at fair value. In accordance with IFRS 9, the fair value of the mezzanine loan from TSTR to SPMP (the �SPMP Mezzanine Loan�) has been derived using a net present value calculation in which an effective discount rate of 23% has been applied. �The Mezzanine Loan is assumed to be converted to equity in December 2023. The fair value at 31 December 2018 was �16,727,000, a fair value movement of �5,404,000 was recorded and �77,000 was invested in the year, giving a fair value of �11,400,000 at 31 December 2019. The principal estimates and judgements policy provides further details of the fair value calculation. The terms of the loan have been changed since the year end as described in the Chairman�s statement.
6������� ANNUAL REPORT AND ACCOUNTS
The financial information set out in this announcement does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006.
The Statement of Financial position at 31 December 2019, the Statement of Comprehensive Income, Statement of Changes in Equity, Statement of Cash Flows and associated notes for the year then ended have been extracted from the Group's 2019 financial statements upon which the auditor's opinion is unqualified and does not include any statement under Section 498(2) or (3) of the Companies Act 2006. Whilst the auditor�s opinion is unqualified, their report does contain a material uncertainty relating to going concern, as set out in the going concern paragraph in this announcement.
The accounts for the year ended 31 December 2019 will be posted to shareholders shortly and laid before the Company at the Annual General Meeting. Following publication, a copy of the accounts will also be available on the Company's website (www.tri-starresources.com) in accordance with AIM Rule 26, and will be delivered to the Registrar of Companies in due course.
