Keras Resources : 2021 Keras Resources Interim Results

Registered no. 07353748

KERAS RESOURCES PLC

CONDENSED CONSOLIDATED INTERIM FINANCIAL REPORT

FOR THE SIX MONTHS ENDED 31 MARCH 2021

KERAS RESOURCES PLC

CONTENTS

	Page
Company Information	1
Chairman's Review	2
Condensed Consolidated Statement of Comprehensive Income	5
Condensed Consolidated Statement of Financial Position	6
Condensed Consolidated Statement of Changes in Equity - 31 March 2020	7
Condensed Consolidated Statement of Changes in Equity - 30 September 2020	8
Condensed Consolidated Statement of Changes in Equity - 31 March 2021	9
Condensed Consolidated Statement of Cash Flows	10
Notes to the Condensed Consolidated Interim Financial Report	11

KERAS RESOURCES PLC

COMPANY INFORMATION

Directors:	B Moritz	Non-Executive Chairman
	R Lamming	Chief Executive Officer
	D Reeves	Non-Executive Director
Company secretary:	Cargil Management Services Limited
Company number:	07353748
Registered office:	27/28 Eastcastle Street
	London W1W 8DH
Nominated advisor	SP Angel Corporate Finance LLP
& Joint Broker :	35-39 Maddox Street
	London W1S 2PP
Joint broker:	Shard Capital Partners LLP
	23rd Floor, 20 Fenchurch St, Bridge,
	London EC3M 3BY
Solicitors:	Memery Crystal
	165 Fleet Street
	London EC4A 2DY
Group auditors:	PKF Littlejohn LLP
	1 Westferry Circus
	Canary Wharf
	London E14 4HD

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KERAS RESOURCES PLC

CHAIRMAN'S REVIEW

FOR THE SIX MONTHS ENDED 31 MARCH 2021

I am pleased to report on our activities over the past six months. The team in Utah has worked very hard on the installation of the milling plant for the Diamond Creek mine. This had its challenges but it is great to see the plant being commissioned. We now have the in-house capacity to produce a range of high-quality products that we can tailor for customers and will now process the remainder of the run-of-mine ore from our 2020 mining season. The plant will also reduce our operating costs as no third-party tolling will be required going forward. Work will now focus on ensuring full road access and maintenance is complete so that we can commence our 2021 mining schedule. Production from our mining season is expected to commence in July and will run through to October.

Management has also continued to engage with the Togolese Authorities on the final permitting for the Nayéga manganese project in Togo and we are very pleased to welcome Blaise Gozan, previously employed by Rio Tinto in Canada, as Country Manager who further bolsters our presence and expertise in country and will continue to progress discussions on our behalf.

Diamond Creek Phosphate Mine (Diamond Creek) - Utah, US

Diamond Creek is a fully permitted, high grade organic phosphate mine and Keras now holds a 51% controlling interest having paid the final tranche of a US$2.5m loan to Falcon Isle Resources, the owner of the Diamond Creek mine, at the end of December 2020. Work throughout the period at Diamond Creek focussed on the installation of the milling plant

at Spanish Fork, Utah, which is being commissioned during June 2021, and provides the in-house capacity to beneficiate products on site and sell a range of premium organicranulatorphosphatesplantdirectlyis broughtintoonlinethe high. DeliverydemandhadUSbeenfertiliserdelayedmarketsdue to. shippingThis capacitycontainerwill constraintsbe fu ther enhancedbut this is oncenow entherouteg to site and will be commissioned later this year. The 2020 mining campaign - when we can carry out our physical mining activities and produce our target run-of-mine tonnages for the

year - was completed in October 2020 with a total of 7,620 ore tons extracted. As previously announced, we plan to mine 10,000 tons during the 2021 mining season commencing during July 2021 - to ensure that sufficient material is available for planned sales, while maintaining the phased increase to the Year 5 target of 48,000 tons of commercial production.

Sales from the 2020 mining campaign up to 31 March 2021 were 1,297 tons, and the year-to-date total sales are 2,483 tons, at an average sales price of $267 per ton, representing approximately 50% of forecast sales to 31 December 2021. To date we have sold six products in both 1 ton and 50lb bags to 21 different customers with several repeat orders, all produced through toll treating agreements. The majority of the orders have been for testwork to benchmark our products against their current producers and with the recent commissioning of our milling plant in Spanish Fork we can now not only guarantee high grade products in North America but can also guarantee tonnages.

Falcon Isle Resources only became a Keras subsidiary on 31 December 2020, as such only the Q1 2021 sales (241 tons) are reported as Revenue in the Income Statement.

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KERAS RESOURCES PLC

CHAIRMAN'S REVIEW

FOR THE SIX MONTHS ENDED 31 MARCH 2021

With the milling plant now in production, sales of our #100 and #350 mesh product will be our key focus as we increase our production and are now able to deliver products on demand. We expect our granulated products to be available for sale in the first quarter of 2022 to meet the new season's demand. Further improvements to the plant are envisaged in order to widen our product range, and the Company has ample funds in hand to finance its 51% share of the cost.

Nayéga Manganese Project - Togo

Management remains in close communication with the Togolese Ministry of Mines & Energy on the Exploitation Permit for the Nayéga Manganese Project and whilst this remains pending, we are very pleased to announce the appointment of Blaise Gozan as Togo Country Manager for Keras Resources Plc. Blaise is a Togolese national, and he joins the Company from Rio Tinto in Canada bringing a wealth of experience in mining and project management to this role. We look forward to updating shareholders on the Exploitation Permit when we have additional information to share.

Financial Review

The current financial period for Keras has been extended to 15 months and will end on 31 December 2021, enabling the accounts of all subsidiaries to terminate on the same date. As a result, Keras will publish a second interim statement for the six months ending 30 September 2021.

The loss for the six months to 31 March 2021 was £506,000 compared with £809,000 for the comparable period in 2020. As explained above there was no material revenue in the period, but increasing sales are expected to be reflected in the next interim statement to 30 September 2021.

Management was very pleased to complete two placings during the period through to the end of March 2021. These funds have in part been utilised to fund Falcon Isle Resources working capital requirements, and to finance our 51% of the plant expansion in Utah. In addition, they have allowed us to bolster our management team and to provide additional working capital. Our Directors all supported these placings, and we welcomed a number of new holders to our register.

Focus on Sustainability

We are aware of our responsibility as an employer and a mining company, and we are committed to upholding best practice across our business. We care about all our stakeholders and are focused on looking to create value and benefits for all whilst seeking to manage and mitigate the potential impacts that our operations may have. Our assets are diverse in commodity and location but have important similarities - mining essential resources that can contribute to a more sustainable future, running simple operations with minimal processing requirements and looking to maintain a low carbon footprint. We are focused on meeting our commitments across the ESG space and will continue to be proactive in this area as we look to develop and sustain a positive legacy.

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