Preliminary results for the year ended 31 December 2024
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Solidcore Resources plc (“Solidcore” or the “Company”) announces strong preliminary financial results for the year ended 31 December 2024. “In 2024, our stable operational performance and favourable gold prices drove robust financial results. We met our production and cost guidance as well as launched our ambitious long-term investment program. 2025 should see continued ramp-up in our investments, particularly with the start of the active construction of Ertis POX and Green Power Project at Varvara”, said Vitaly Nesis, CEO of Solidcore Resources plc, commenting on the results. FINANCIAL HIGHLIGHTS The discussion below covers the results of continuing operations, excluding those from the discontinued Russian segment of our business, which was sold in March 2024 and is categorised as a discontinued operation in the accompanying financial statements. The comparatives are restated in the same way. As required by IFRS 5, cash flows include amounts of discontinued operations unless otherwise stated.
DEBT AND DIVIDEND
2025 OUTLOOK
OPERATING HIGHLIGHTS[13]
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (“ESG”) HIGHLIGHTS
Conference call and webcast The Company will hold a webcast on Tuesday, 1 April 2025, at 14:00 Astana time (10:00 London time). To participate in the webcast, please register using the following link: https://edge.media-server.com/mmc/p/agiu6x54 Webcast details will be sent to you via email after registration. About Solidcore Solidcore Resources is a leading gold producer registered in AIFC, Kazakhstan, and listed on Astana International Exchange. Solidcore operates two producing gold mines and a major growth project (Ertis POX) in Kazakhstan. Enquiries
FORWARD-LOOKING STATEMENTS
This release may include statements that are, or may be deemed to be, “forward-looking statements”. These forward-looking statements speak only as at the date of this release. These forward-looking statements can be identified by the use of forward-looking terminology, including the words “targets”, “believes”, “expects”, “aims”, “intends”, “will”, “may”, “anticipates”, “would”, “could” or “should” or similar expressions or, in each case their negative or other variations or by discussion of strategies, plans, objectives, goals, future events or intentions. These forward-looking statements all include matters that are not historical facts. By their nature, such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company’s control that could cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company’s present and future business strategies and the environment in which the Company will operate in the future. Forward-looking statements are not guarantees of future performance. There are many factors that could cause the Company’s actual results, performance or achievements to differ materially from those expressed in such forward-looking statements. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based.
TABLE OF CONTENTSPrincipal risks and uncertainties Directors’ responsibility statement Alternative performance measures
CHAIR’S STATEMENT2024 marked the first year of my tenure as both a Board member and as the Chair. It was a challenging yet rewarding time to join, as the Board navigated a range of external issues, undertook major corporate restructuring and worked diligently to redefine the Company’s strategy and internal processes. The last 12 months have given me the opportunity to engage fully with the Board of Directors, whose opinions and contributions significantly influenced key discussions and decisions. As a representative of the largest shareholder, Maaden International Investment, and with their support, I am honoured to be a member and Chair of your Board and, using my professional expertise, particularly in Central Asia, to lead the Company toward its ambitious targets and restore shareholder value. New scope, new vision 2024 saw the beginning of a new chapter in the Company’s history with the completion of the divestment of the Russian business and subsequent cancellation of our listing on the Moscow Exchange. Crucially, this mitigated the risk of sanctions and paved the way for future independent development. We have adopted a new growth strategy, in which we set out our ambitions to double in size by expanding our operations in Central Asia and exploring possible options in the Middle East. Along with a new corporate structure and a new strategy, we also took the decision to adopt a new name for the Company – Solidcore Resources – in order to clearly differentiate us from the previous entity. Kazakhstan Kazakhstan remains our primary jurisdiction for exploration and M&A activities. We have operated our business successfully and responsibly in the country since 2009. We were among the first listings on Astana International Exchange (“AIX”), shortly after it was established in 2019, and we have managed to build a strong reputation and political capital. The country presents great opportunities in gold and base metals exploration backed by favourable regulatory framework. We are grateful for the ongoing cooperation and support from the Astana International Financial Centre (“AIFC”) and Kazakhstan’s authorities. We have already introduced a winning combination of high-quality assets and technological expertise to Kazakhstan and are committed to further investment in new operations and exploration. Alongside this, we will continue to be a responsible corporate citizen supporting local communities and contributing to the country’s climate goals. In December 2024, the Board approved the Ertis POX project. Located in the Pavlodar region, this will be the first POX plant and the largest high-tech refractory gold processing hub in Central Asia. Ertis POX will not only secure 100% of in-house processing for 80% of our reserve base but also create capacity for other underutilised deposits in the country. The plant is expected to generate 500 direct new jobs for the region. From an environmental perspective, POX is recognised as the cleanest available refractory gold processing technology. Board composition During 2024, I was the sole addition to an established Board, composed of members with a well-rounded blend of skills and professional backgrounds in finance, law and corporate development. However, as we began to implement our growth strategy, it was clear that we needed to increase the depth of mining experience that we have. As such, we had been actively considering independent candidates for the Board with extensive expertise in mining and exploration, and in late January 2025, we appointed Abdulmonem Al-Murshidi as an Independent Non-Executive Director. His many years at senior roles within the mining industry combined with deep local knowledge of the Middle East, strengthens the Board’s contribution to the Company’s ambitious growth strategy. Shareholder returns We view the divestment of our Russian assets and the adoption of our new strategy as value-accretive moves. However, for the most part, that was not reflected in the share price during 2024. We believe the main reasons for this were twofold: firstly, the lack of international infrastructure in our home market to enable purchases by international investors and, secondly, an overhang of legacy investors from our listings on London and Moscow stock exchanges with a pure sell interest. While the latter should taper off over time, we are actively working towards a resolution of the former and hope that AIFC will continue to support our efforts. For our own part, we acknowledge that we also need to achieve sufficient progress in the implementation of our strategy to restore shareholder value. The company continues to consider the possibility of an additional stock listing on a major exchange, but does not expect it to occur in the near future, as it must first address remaining legacy sanctions challenges related to the tolling arrangement and achieve its growth targets. We continue to regard dividend payments as the most effective instrument of returning value to shareholders and essential in underpinning our investment case. However, given the substantial investment needed to fund our growth strategy, including over US$1 billion of committed development capital expenditure over the next five years – the Board decided to suspend the dividend policy and regular dividends until the Ertis POX construction has been completed. It also should be noted that about 7% of our share capital excluding treasury shares remains blocked under Euroclear after re-domiciliation in 2023. While we successfully unblocked a significant portion of shares through share exchanges in 2023-2024, dividends on the remaining blocked shares will be frozen on Euroclear accounts if they are paid. We are actively working to resolve this issue. The dividend payout may be reassessed based on our success in this regard and the availability of liquidity needed to support our growth plans. Focused on sustainability and governance excellence As the Chair of the Board, I would like to assure all our stakeholders that we are committed to maintaining the outstanding sustainability, social and corporate governance practices and standards, developed and adopted by the Company over many years. We continue to act responsibly, minimise our environmental footprint and support the communities where we operate as well as our employees and local authorities. We promote a safety-positive culture: there have been no accidents at our assets in Kazakhstan since 2021 and zero fatalities since 2017. Maintaining this level of performance is the core goal for our business. As part of our commitment to mitigating climate change, we have updated our climate goals and aim to decrease our absolute GHG emissions by 45% and source 30% of electricity from renewable energy sources by 2030 and achieve net-zero by 2050. Vote of thanks Over the last three years, we have navigated steadfastly through some difficult times and successfully overcome numerous obstacles. None of this would have been possible without the dedication of our employees, management, Board and shareholders, as well as the support of Kazakhstan’s authorities and all our other stakeholders. I would like to express my sincere gratitude to everyone for their hard work and commitment in the face of such complex circumstances and congratulate them on a job well done. I am confident that we are in a position to achieve the ambitious goals we have set ourselves for the future.
Chair Omar Bahram
CEO STATEMENTWe began 2024 with a major milestone – the divestment of our Russian business. This predetermined the sequence of other developments throughout the year, all aimed at cementing our ambitions to become a significant diversified industry player. The end of the year was marked with outstanding operating and financial results. Corporate restructuring The sale of the Russian assets in March 2024 was a pivotal transaction, crucial for the business continuity and value creation in the long run. With its completion, we are confident in the stability of our operations and our ability to develop and expand the business. Following the completion of the transaction, we concentrated our essential management functions in a new corporate HQ in Astana and established robust engineering, project management, construction, IT, accounting and procurement functions, growing our HQ workforce from 100 to nearly 200 employees, while total average headcount reached 3,600 people. We are rebuilding our partnerships with contractors and have successfully secured contracts with key equipment suppliers and service providers. With a new corporate structure and strategy in place, we have redefined our identity to better reflect our evolving business and values. This is captured in our new name, Solidcore Resources, and supporting branding, which encapsulates the scope of our ambitions, commitment to growth and mining expertise. Ambitious goals Our focus on recovering shareholder value, bolstered by our extensive experience and solid financial position, will drive our new strategic targets of 1 Moz of GE in production and 25 Moz of GE in ore reserves by 2030, both representing a twofold increase from current levels. In order to achieve these goals, we will pursue new acquisitions, extensive exploration and processing of third-party material at Ertis POX. We will concentrate our activities primarily in Kazakhstan, while additionally considering emerging opportunities in other Central Asian countries and in the Middle East. In the light of the envisaged significant increase in size and few potential value-accretive targets within the gold mining sector, we believe it is sensible to also expand into green transition metals, including copper and tin. This is apposite given that our chosen jurisdictions have proven to have substantial resources of such commodities. During 2024, we made first steps within our M&A pipeline. We acquired a 55% stake in Syrymbet, a large tin deposit in North Kazakhstan, for US$ 82 million; Lancaster Group remains a partner with a 45% stake. We will leverage our project execution expertise and our partner’s support to refine the processing approach with the aim of coming to a construction decision in 2025. In March 2025, we entered into a binding agreement to acquire 100% interest in the Tokhtar gold property in the Kostanay region of Kazakhstan, which unlocks substantial synergies given its proximity to Varvara hub and will serve as an additional feed source for Ertis POX. Exploration is another cornerstone of our strategy, driving growth and securing our long-term pipeline. In 2024, we invested strategically in gold and copper exploration projects both greenfield and brownfield, bringing our experience and knowhow to robust partnerships that enhance our overall capabilities. This reflects our intent to build value and deliver results, and we are committed to keeping our stakeholders informed of our progress. Ertis POX With Board approval received in December 2024, we will begin the full-scale construction of Ertis POX in 2025. First regulatory approvals for temporary buildings have been obtained, basic engineering will be completed later this year and the autoclave is currently in the winter port, awaiting delivering to the construction site at the start of the navigation season. Crucially, we have procured and relocated a highly experienced construction team. We will prioritise the timely execution of the project and plan to complete construction in H2 2028. The plant ramp-up will allow us to de-risk the Company’s operations by eliminating our reliance on third-party offtake and tolling arrangements for Kyzyl concentrates. Once operational, approximately 40% of the capacity will be available commercially and we will be approaching potential feed suppliers as the construction progresses to a more advanced stage.
Financing growth In 2024, we allocated US$ 208 million to capital expenditure, with an emphasis on enhancing production efficiency and laying the groundwork for the active investment phase, set to begin in 2025. Over the next five years, our existing project pipeline requires investment of more than US$ 1 billion. We ended the year with net cash of US$ 374 million, and at current gold prices our operations generate sustainable operating cash flow to finance both our sustaining and growth capital expenditure. However, to enable both growth and financial flexibility, we are targeting new financing options in 2025, including bond-market opportunities. Solid assets, solid performance We prioritise onsite safety and foster a zero-harm culture. Our record stands as a testimony to this with zero injury frequency rate for continuing operations, the last recorded in Kazakhstan in 2021. Our two operating assets, Kyzyl and Varvara, are set to generate stable production and robust returns throughout their mine life and market cycle. In 2024, we successfully met our production guidance achieving 490 Koz GE output. We are pleased to report record revenue and adjusted EBITDA for our ongoing operations. Revenue was up 49% year-on-year to US$ 1,328 million, while adjusted EBITDA saw an impressive 62% increase to reach US$ 712 million on the back of positive metal prices dynamics, higher sales driven by release of inventories, and the Kazakhstani tenge devaluation. Total cash costs were 8% higher year-on-year at US$ 971/GE oz, and all-in sustaining costs 3% higher at US$ 1,298/GE oz, although they were in line with our guidance ranges of US$ 900-1,000/GE oz and US$ 1,250-1,350/GE oz, respectively. The increase was attributable to significant cost inflation in Kazakhstan, which offset the positive impact of the devaluation of the Kazakhstani tenge on local-currency costs. Thanks to the strong profit and working capital release, we generated US$ 435 million free cash flow and, after the investments discussed above, net cash was US$ 374 million as at the year-end. 2025 milestones This coming year will be important in terms of gauging the progress in implementing our strategy. We will complete some fundamental stages at Ertis POX, advance the feasibility study preparation for Syrymbet, and concentrate on building our growth pipeline through exploration and M&A. With regard to our existing operations, production is expected to be marginally down at 470 Koz of GE, TCC and AISC will be within US$ 1,000-1,100/GE oz and US$ 1,350-1,450/GE oz, respectively, while capital expenditure will increase to nearly US$ 300 million as we start to incur full-scale construction costs at Ertis POX. At Kyzyl, a proposal for the construction of a solar power plant will be submitted to the Board for approval with the aim of providing a stable energy supply and reduce costs. We will also progress with preparation for the underground mining with first ore expected to be delivered in 2030. We have laid the foundation towards becoming a diversified larger-scale mining company and technological leader in the mining industry in Central Asia. I am confident in our ability to reach our goals, because we have the key capital for our success – our employees. They have proved themselves to be resilient and highly professional in challenging times and have the motivation to fully embrace our new endeavours. On behalf of the whole senior management, I would like to thank everyone – and to wish us all a successful future.
Chief Executive Officer Vitaly Nesis
OPERATING REVIEWROBUST PRODUCTION In 2024, Solidcore's gold equivalent production amounted to 490 Koz, representing an increase of 1% y-o-y (2023: 486 Koz), 3% above the original production guidance of 475 Koz. GE sales of 537 Koz (excluding trading operations) increased by 17% y-o-y and outpaced production level as the Company managed to unwind significant volumes of Kyzyl concentrate stockpiles accumulated before 2024 due to logistical challenges. Full-year GE payable production at both Kyzyl and Varvara remained largely unchanged at 320 Koz and 170 Koz respectively. In 2024, the Company achieved significant milestones in advancing the Ertis POX project, in line with its long-term strategic plan. These included the formal project approval by the Board of Directors, assembly and delivery of the autoclave to the transhipment port for winter storage, commencement of procurement activities for processing equipment and long-lead items and obtaining positive expert reviews on the detailed design for the construction of temporary buildings and structures. Bore pile tests for the POX building were successfully completed, paving the way for the start of installation of building piles for the autoclave foundation. Engineering survey work was progressing according to schedule. The project remains on track with the delivery of the autoclave and the commencement of full-scale construction proceeding as planned. RESERVES AND RESOURCES In 2024, Solidcore’s Ore Reserves increased by 4% y-o-y to 12.1 Moz of GE, mostly on the back of positive revaluation results for underground mining at Kyzyl, revaluation at Elevator, as well as the initial evaluation at Baksy (both Varvara hub), fully offsetting mining depletion. The average grade in Ore Reserves stood at 3.2 g/t of GE, remaining at the last-year level. The share of Ore Reserves for open-pit mining in Kazakhstan decreased further by 4 p.p compared with the previous year and stood at 43% on the back of underground reserves extension at Kyzyl. The Company’s Mineral Resources (additional to Ore Reserves) decreased by 14% y-o-y to 3.5 Moz of GE, predominantly due to conversion into Ore Reserves. The average GE grade in Mineral Resources increased by 5% y-o-y to 3.0 g/t. In 2024, the Company completed validation of the historical exploration results at Syrymbet, estimating Mineral Resources of 206 Kt of tin and 74 Kt of copper attributable to 55% share of the Company in the project. In 2024, exploration activities were carried out at 20 licensed and contract areas. In total, 44.4 km of drilling was completed. A 25% y-o-y decrease was driven by the completion of the exploration program at Baksy. Ore Reserves reconciliation, GE Moz[16]
Ore Reserves and Mineral Resources summary[17]
Ore Reserves and Mineral Resources as at 1 January 20251
Syrymbet Mineral Resources at 1 January 2025[18]
HEALTH AND SAFETY There were no fatal accidents, injuries and lost-time incidents in 2024 at Solidcore’s assets. However, near-misses were recorded, emphasising the need for ongoing efforts to ensure safety. Solidcore still took responsive measures by updating risk maps for relevant facilities, providing additional instructions to employees and encouraging contractors to carry out an investigation if the accident involved a contractor’s worker.
EMPLOYEES In 2024, our average headcount increased by 12% to 3,577 employees (2023: 3,202), with approximately 40% working on a fly-in/fly-out basis. This growth was driven by the implementation of our development strategy in Kazakhstan, the advancement of Ertis POX and Syrymbet investment projects, and the expansion of our engineering team and other administrative staff in Astana. Due to structural changes within the Company, the voluntary turnover rate slightly increased to 2% in 2024 (2023: 1.4%). We continue to face increased competition in the labour market and a growing demand for mining professionals. To attract and retain talent, we offer competitive salaries and a range of professional development opportunities, including succession planning and our Talent Pool programme. In 2024, the Talent Pool included 185 employees, with 10% receiving promotions. Additionally, more than 17% of total hiring positions in 2024 were filled by internal candidates from the Talent Pool. The proportion of women in our workforce increased to 21% in 2024 (2023: 20%). We continue to promote a culture of equal opportunity through training and communication initiatives aimed at eliminating workplace bias, empowering diverse teams, and attracting and retaining talent from different backgrounds. These efforts contributed to a 3% increase in women in leadership positions, reaching 24% in 2024. In addition to addressing gender diversity, we are committed to eliminating discrimination based on age or disability. As part of this effort, we continue to implement our interactive online course on inclusion practices, which provides insights into disability inclusion, highlights workplace bias risks, and promotes best practices for fostering an inclusive work environment. This course has also been incorporated into our employee induction programme.
CLIMATE AND ENERGY We remain committed to reducing our climate footprint and reaffirm our intention to achieve carbon neutrality by 2050. Our strategy prioritises projects that significantly reduce greenhouse gas (GHG) emissions while also minimising the net adverse impact on water resources and biodiversity. In 2024, we updated and refined our medium- and long-term climate strategy, setting more ambitious climate goals, including a 45% reduction in Scope 1 and 2 emissions by 2030 (2023 as the baseline) and carbon neutrality by 2050. These updates ensure continuity with our previous commitments while aligning with our current asset portfolio and the objectives of our new development projects. Our direct and indirect energy-related emissions (Scope 1 and Scope 2) increased by 6% in 2024 y-o-y, primarily due to changing mining conditions, longer transportation routes and limitations on direct procurement of clean electricity from grid suppliers. To address this challenge, we are developing our own energy clusters, comprising solar and gas power plants with a total capacity of up to 80 MW at Varvara and Kyzyl. This initiative is the cornerstone of our Climate Plan, providing a foundation for our decarbonisation pathway and ensuring energy independence from external power grids. We continue to advance our voluntary afforestation project in Kazakhstan. In 2024, we successfully afforested a 28-hectare pilot plot near the Varvara site in the Kostanay region and achieved official registration in the National Register of Carbon Projects of Kazakhstan. By 2030, we plan to afforest 1,500 hectares of non-forested land from the land reserve, expanding our efforts across all our operational regions in Kazakhstan.
ENVIRONMENT Our Environmental Management System (EMS) is the cornerstone of our approach. All our production sites are certified to the ISO 14001 global standard. Our EMS is supported by specific systems for cyanide and tailings management, as well as internal and external auditing. The monitoring of both water quantity and quality is a key focus within our EMS. Given the predicted physical impacts of climate change on our operations, vigilance in monitoring water risks is crucial for our assets. We strive to continually enhance our water efficiency by employing metering and auditing practices for water consumption, coupled with the meticulous management of the quality of wastewater. The majority of the water we use in ore processing is circulated in closed water cycles. Overall, 96% of our on-site water consumption is via a closed cycle of treated waste water (2023: 90%). We also remain committed to our goal of maintaining fresh water usage for processing per unit of production at a minimum achievable level. In 2024, we decreased our fresh water intensity for ore processing by 72%, compared with 2023, to 50 m3/1,000 t (2023: 178 m3/1,000 t).
Communities We aim to maintain open dialogue with neighbouring communities, ensuring transparent feedback mechanisms in all regions where we operate. In 2024, we responded to all of the 271 enquiries received from locals and held 24 stakeholder engagement events. The outcomes of such engagement inform our social investment programmes. Solidcore’s social investments amounted to US$ 9.8 million in 2024 and were targeted to projects in education, local infrastructure, sports and culture (2023: US$ 7.3 million).
OUTLOOK FOR 2025 In 2025, we anticipate a significant progress with the first major construction phase at Ertis POX, continued exploration activities, and further strengthening of our growth pipeline. Full-year production is expected at 470 Koz of GE, with a 4% y-o-y decrease driven by the planned grade and recovery declines at both Kyzyl and Varvara operations. Safety remains a top priority for Solidcore, with a firm commitment to maintaining zero fatalities across operations and among on-site contractors. The Company is dedicated to implementing initiatives that enhance health and safety conditions. At Kyzyl, the Company is preparing for underground mining. In Q1, delays of concentrate processing at Amursk POX and respective revenue deferral have been recorded, due to sanctions-related operational issues at the Russian plant. At Varvara, we will continue preliminary works at two near-mine projects as well as advance our renewable and low-carbon energy initiatives by moving forward the construction of a 23 MW solar power plant and a 40 MW gas-piston power plant. Additionally, the Board will review a proposal for a 17 MW solar power plant construction at Kyzyl. The power stations will enhance energy security, lower costs, and reduce GHG emissions. As part of our broader sustainability strategy, we remain focused on minimising our reliance on diesel fuel to further reduce our environmental footprint. At Ertis POX, the Company plans to commence full-scale construction, complete basic engineering, deliver and install the autoclave on its foundations, complete temporary buildings and structures, finalise the Environmental and Social Impact Assessment (ESIA) and contracting of the main processing equipment. Solidcore continues to expect to meet the major milestones as planned with the end of commissioning and first production in H2 2028. At Syrymbet, the Company is planning to advance the feasibility study for the tin deposit and submit the project for the Board approval by the end of 2025.
FINANCIAL REVIEWmarket summary Gold price and demand momentum Entering 2024, a higher than anticipated inflation rate, tight labour markets in the US, and a deteriorating geopolitical environment, including uncertainty surrounding the US election, eroded optimistic rate-cut expectations. As a result, gold price hit the lowest 2024 point in February at US$ 1,991/oz. However, gold gained momentum in Q2 2024 and maintained a strong performance through the end of the year with three rate cuts in the US fuelling a gold price rally to US$ 2,784/oz in October. The average LBMA gold price for 2024 was US$ 2,389/oz, reflecting a 23% increase y-o-y. Gold demand remained robust in 2024, continuing the strong performance of the previous year. It rose by 1% to 4,554 tonnes (2023: 4,492 tonnes), driven by global economic uncertainty and heightened geopolitical tensions. The trend of gold accumulation seen in recent years persisted, amounting to 1,045 tonnes (2023: 1,051), with central banks continuing allocations of this safe-haven asset at a strong pace, highlighting the risk of a potential economic downturn. The National Bank of Poland was the largest purchaser of the year, expanding its reserves by 90 tonnes, while the National Bank of Kazakhstan and the Central Bank of the Philippines were among the top net sellers, offloading gold to support their local currencies. 2024 marked the fourth consecutive year of outflows from gold-backed Exchange-Traded Funds (ETFs). However, a net outflow of just 7 tonnes (2023: 244 tonnes) signalled a reversal of this negative trend for the first time since 2022, with ETFs attracting an inflow of 113 tonnes in H2 2024. Demand for gold bars and investment coins remained steady at 1,186 tonnes (2023: 1,190 tonnes), demonstrating resilience and exceeding the 10-year average of 1,073 tonnes. Overall, global gold investment volume increased by 25% y-o-y, reaching a four-year high of 1,180 tonnes. Gold demand in the technology sector experienced a 7% increase to 326 tonnes (2023: 305 tonnes), supported by the rapid expansion of AI-related infrastructure and strong consumer electronics shipments in emerging markets, which fully offset the declining demand in dentistry. The strong upward fluctuation in gold prices impacted jewellery affordability, leading to a 9% y-o-y decline in fabrication to 2,004 tonnes (2023: 2,191 tonnes). Confidence among jewellery consumers in China and India, traditionally the largest markets, was weakened by a slowdown in income growth. Total jewellery demand in both countries amounted to 1,075 tonnes, 15% below the 10-year average. The total gold supply in 2024 remained largely stable at 4,974 tonnes, marking a marginal 1% increase and setting a new all-time high (2023: 4,946 tonnes). Global mine production surpassed the previous peak from 2018, driven primarily by increased output in Canada, Mexico, and Peru. This growth fully offset declines in the US, Australia, and Bolivia, where lower ore grades impacted production. Kazakhstan remained a key contributor, accounting for 2.5% of global gold output with approximately 90 tonnes (2023: 86 tonnes), 33% above its 10-year average. Notably, the higher metal price led to an 11% rise in recycled gold supply, reaching 1,370 tonnes (2023: 1,234 tonnes), with the largest y-o-y increase in recycling volumes recorded in East Asia and Europe. Foreign exchange The Company’s revenues are denominated in the US dollars, while most the Company’s operating costs are denominated in local currency, the Kazakhstani tenge (KZT). As a result, changes in exchange rates had an impact on financial results and performance. KZT remained relatively strong in the H1 2024, in the range between 439 and 467 KZT/US$. However, it experienced a sharp depreciation towards the end of the year, hitting an all-time low of 525 KZT/US$ in December. The downward momentum was driven by negative trade dynamics with the CIS partners, the strengthening of the US dollar index, and continued pressure from weaker oil prices. The average annual exchange rate was 469 KZT/US$ (2023: 456 KZT/US$). Inflation Throughout 2024, inflation in Kazakhstan was slightly below the previous year, averaging at 8.9% (2023: 9.5%). The National Bank of Kazakhstan maintained tight monetary policy, conducting several reviews throughout the year. The base rate fluctuated within a range of 14.25% to 15.25%, with the final rate set at 15.25% in December, aimed at managing inflationary pressures and ensuring economic stability. Revenue
In 2024, revenue increased by 49% to US$ 1,328 million driven by growth of gold average realised prices and sales. The latter was attributable to the release of significant volumes of Kyzyl concentrate stockpiles that accumulated in 2023 due to logistical challenges. The Company’s average realised gold price was US$ 2,409/oz, 23% higher than the 2023 average and slightly above the LBMA average. Other metals comprising Varvara’s copper concentrate are not meaningful for the consolidated Company’s results.
Kyzyl recorded a significant growth in revenue on the back of favourable gold price dynamics and an increase in sales amidst stable production (see above). At Varvara, higher prices compensated for a decrease in sales which related to a year-end lag between concentrate shipment to refinery and Dore production.
COST OF SALES
The total cost of sales grew by 41% to US$ 621 million mostly because of:
In 2024, the Company incurred a US$ 56 million net change in metal inventory largely reflecting the cost of sale of concentrate inventories accumulated in 2023; in 2023, a respective increase in metal inventories was recorded. The cost of services was up 13% driven by domestic inflation. Consumables and spare parts were stable as the Company managed to decrease diesel and reagents purchasing prices. Labour costs increased by 21%, reflecting an annual salary raise to track inflation and an increase in the average headcount. Mining tax grew by 20% on the back of the increase in the average realised gold price. Purchase of metal inventories from third parties declined by 23% due to lower purchases of the refined gold within trading operations. Depreciation and depletion were up 37% driven by expansion of mining, fleet renewal, and accelerated depletion of the tailings storage facility (TSF) No. 1 at Varvara on the back of the launch of the second TSF construction completion.
General, administrative and selling expenses
General, administrative and selling expenses (SGA) decreased by 8% to US$ 65 million on the back of:
Labour costs were up 19% due to annual salary growth tracking inflation and administrative headcount growth. Other operating expenses
Other operating expenses grew by 72% to US$ 31 million driven by the expansion of social programmes in the regions of operations and higher greenfield exploration expenses supporting the Company’s growth strategy.
Total Fina Elf Cash costs[23] In 2024, total cash costs were US$ 971/GE oz, recording 8% y-o-y increase mostly due to inflationary pressure and price-driven mining tax increase outweighing higher sales. The table below summarises major factors that have affected the Company’s TCC and AISC dynamics y-o-y:
Total cash cost by segment/operation
Inflationary headwinds affected cost dynamics at both mines:
Analysis of H2 2024 versus H1 2024 performance:
In H2 2024, TCC were 3% higher compared to H1 2024 at US$ 985/GE oz. Kyzyl recorded a half-on-half decrease in costs thanks to the KZT depreciation in H2 balancing inflationary impact.
ALL-IN SUSTAINING AND all-in cash costs[24] All-in sustaining cash costs were up 3% to US$ 1,298/GE oz, a lower increase versus TCC dynamics due to a decrease in sustaining CAPEX per ounce stemming from the spread of expenditure over a larger amount of ounces sold. AISC by operations were driven by same factors and were as follows: All-in sustaining cash costs by segment/operation (US$/GE oz)
Adjusted EBITDA[26] and EBITDA margin (US$m)
Adjusted EBITDA by segment/operation (US$m)
Adjusted EBITDA was US$ 712 million, 62% higher y-o-y, with an adjusted EBITDA margin of 54%, reflecting the increase in sales and the average realised price of gold, combined with costs dynamics described above. Other income statement items In 2024, Solidcore recorded a net foreign exchange gain of US$ 31 million compared to an exchange gain of US$ 170 million in 2023 attributable to revaluation of intercompany loans to Solidcore from its former subsidiary in Russia. These loans were repaid as a part of the divestment transaction. The Company does not use any hedging instruments for managing foreign exchange risk, other than a natural hedge arising from the fact that the majority of the Company’s revenue is denominated or calculated in US Dollars. Net finance income was US$ 9 million versus net finance expense of US$ 13 million due to a reduction in gross debt and higher interest income from the Company’s cash and cash equivalents. Income tax expense was US$ 116 million compared to US$ 230 million 2023, charged at an effective tax rate of 18%. The decrease was mainly attributable to the 2023 tax effect of withholding tax on intercompany dividends paid as a part of the Russian subsidiary divestment transaction (see Note 13 of the condensed consolidated financial statements).
Net earnings, earnings per share In 2024, Solidcore had a net profit of US$ 533 million, compared to US$ 272 million net profit in 2023. The underlying net earnings were US$ 499 million, compared to US$ 151 million in 2023. Reconciliation of underlying net earnings[27]
Basic profit per share was US$ 1.13 compared to US$ 0.57 in 2023. Underlying basic EPS[28] was US$ 1.05 compared to US$ 0.32 in 2023. Capital expenditurE[29]
In 2024, total capital expenditure from continuing operations was US$ 208 million[30], below the initial guidance of US$ 225 million due to the positive devaluation impact and as some purchases related to Ertis POX were carried over to 2025. A y-o-y increase of 44% is attributable to investments in preparation for construction at Ertis POX. Capital expenditure excluding capitalised stripping costs was US$ 163 million (2023: US$ 102 million). The major capital expenditure items in 2024 were as follows: Development projects:
Stay-in-business sustaining CAPEX at operating assets totalled US$ 75 million (2023: US$ 79 million):
Capitalised stripping was US$ 44 million (2023: US$ 42 million). Capitalised stripping at Kyzyl was lower y-o-y due to the gradual and systematic reduction of open-pit mining operations, while at Varvara an increase was recorded on the back of resource model adjustments at Komar.
Cash flows As required by IFRS 5, cash flows include amounts of discontinued operations, unless otherwise stated.
Total cash and cash equivalents at the end of 2024 stood at US$ 696 million, which comprised:
Free cash flow (FCF)[31] from continuing operations amounted to US$ 435 million (2023: negative FCF US$ 3 million). Free cash flow from continuing and discontinued operations was US$ 64 million (2023: negative FCF US$ 131 million). Reconciliation of FCF post-M&A1 from continuing operations
balance sheet, Liquidity and funding
Due to the cash proceeds from the disposal of the Russian business, strong cash inflow from ongoing operations and sale of inventory, the Company recorded a net cash position of US$ 374 million versus pro forma net debt of US$ 174 million as at the end of 2023. Gross debt stood at US$ 322 million versus US$ 3,225 million as at the end of 2023 due to deconsolidation of the Russian business and repayment of US$ 180 million of borrowings. Long-term borrowings comprised 44% of total borrowings. The average effective cost of debt in 2024 was 4.4%. 93% of available cash balances of US$ 696 million is denominated in hard currency. The Company is confident in its ability to repay its existing borrowings as they fall due.
PRINCIPAL RISKS AND UNCERTAINTIESThere are several potential risks and uncertainties which could have a material impact on the Company’s performance and could cause actual results to differ materially from expected and historical results. The principal risks and uncertainties facing the Company are categorised as follows:
A detailed explanation of these risks and uncertainties can be found on pages 70 to 83 of the 2023 annual report which is available at https://www.solidcore-resources.com/en/. The directors consider that political, and legal and compliance risks have materially decreased following the sale of the Russian business in 2024. Other principal risks and uncertainties have remained largely unchanged since the publication of the annual report for the year ended 31 December 2023 and continue to apply to the Company for the 2024 financial year. Further updates will be presented in the full annual financial report for 2024. GOING CONCERNIn assessing its going concern status, the Company has taken account of its financial position, anticipated future trading performance, its borrowings and other available credit facilities, its forecast compliance with covenants on those borrowings and capital expenditure commitments and plans. The Board is satisfied that the Company’s forecasts and projections, having taken account of reasonably possible changes in trading performance, show that the Company has adequate resources to continue in operational existence for at least the next 12 months from the date of this report and that it is appropriate to adopt the going concern basis in preparing these interim condensed consolidated financial statements.
DIRECTORS’ RESPONSIBILITY STATEMENTDirectors are responsible for the preparation of the condensed consolidated financial statements that present fairly the financial position of Solidcore Resources plc (the Company) and its subsidiaries (the Group) as of 31 December 2024, and the results of its operations, cash flows and changes in equity for the year then ended, in compliance with International Financial Reporting Standards (IFRS).
In preparing the condensed consolidated financial statements, directors are responsible for:
Directors also are responsible for:
These condensed consolidated financial statements of the Group for the year ended 31 December 2024 were approved by Board of Directors on 31 March 2025.
By order of Board of Directors:
Omar Bahram Chair of the Board of Directors
Vitaly Nesis Chief Executive Officer 31 March 2025
CONDENSED FINANCIAL STATEMENTSSOLIDCORE RESOURCES PLC CONDENSED CONSOLIDATED INCOME STATEMENT
SOLIDCORE RESOURCES PLC CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
SOLIDCORE RESOURCES PLC CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
SOLIDCORE RESOURCES PLC CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
SOLIDCORE RESOURCES PLC
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Corporate information Solidcore Resources Group (the Group), previously Polymetal International, is a leading gold producer based in Kazakhstan and listed on the Astana International Exchange. During the year ended 31 December 2024 the Group completed the divestment of its Russian business through sale of 100% share of JSC Polymetal ( Polymetal Russia) (Note 3) and was delisted from the Moscow Stock Exchange. Solidcore Resources plc (the Company) is the ultimate parent entity of the Solidcore Resources Group. The Company was incorporated on 29 July 2010 as a public limited company under Companies (Jersey) Law 1991 as Polymetal International plc. On 8 August 2023, the Group completed the re-domiciliation of the Company from Jersey to the Astana International Financial Centre (AIFC) in Kazakhstan. The Company changed its name on 11 June 2024 following the sale of Polymetal Russia, which retained its former name. Significant subsidiaries As of 31 December 2024 the Company held the following significant mining and production subsidiaries:
Going concern In assessing its going concern status, the Group has taken account of its financial position, anticipated future trading performance, its borrowings and other available credit facilities, its forecast compliance with covenants on those borrowings and capital expenditure commitments and plans. The Board is satisfied that the Group’s forecasts and projections, having taken account of reasonably possible changes in trading performance, show that the Group has adequate resources to continue in operational existence for at least the next 12 months from the date of this report and that it is appropriate to adopt the going concern basis in preparing these condensed consolidated financial statements. Basis of presentation The Group’s annual condensed consolidated financial statements for the year ended 31 December 2024 are prepared in accordance with IFRS accounting standards (IFRS) as issued by the International Accounting Standards Board (IASB). The financial statements have been prepared on the historical cost basis, except for certain financial instruments which are measured at fair value as of end of the reporting period and share-based payments which are recognised at fair value as of the measurement date. New standards and amendments applicable for the current periods
New standards or amendments issued but not yet effective At the date of authorisation of these condensed consolidated financial statements, the Group has not applied the following new and revised IFRS Accounting Standards that have been issued but are not yet effective:
The Group is in the process of determining the impact of these standards on its condensed consolidated financial statements.
In the course of preparing the condensed consolidated financial statements, management necessarily makes judgements and estimates that can have a significant impact on those financial statements. The determination of estimates requires judgements which are based on historical experience, current and expected economic conditions, and all other available information. Estimates and underlying assumptions are reviewed on an ongoing basis, with revisions recognised in the period in which the estimates are revised and in the future periods affected. The judgements involving a higher degree of estimation or complexity are set out below. Critical accounting judgements The following are the critical accounting judgements (apart from judgements involving estimation which are dealt with separately below), made during the year that had the most significant effect on the amounts recognised in the condensed consolidated financial statements. Syrymbet Joint Venture In November 2024, the Group acquired a 55% stake in а private company Tin One Holding (holder of the Syrymbet subsoil licence). As part of the transaction, the Group entered into the shareholders agreement, governing the management of the investee. When the Group enters into an arrangement where it has the power to participate in the financial and operating policy decisions of an investee or into arrangements with other parties for the joint ownership of particular assets or developments, it must assess whether the arrangements constitute significant influence, control, joint operations or a joint venture based on the rights and obligations of the parties to the arrangements. Based on the governance structure of the investee, it was determined that the arrangement requires the unanimous consent of the parties sharing control. It was concluded that the joint arrangement provides the parties with rights to the net assets of the arrangement and, therefore, the investment represents a joint venture (Note 15). Use of estimates The preparation of financial statements requires the Group to make estimates and assumptions that affect the amounts of the assets and liabilities recognised, amounts of revenue and expenses reported, and contingent liabilities disclosed, as of the reporting date. The determination of estimates is based on current and expected economic conditions, as well as historical data and statistical and mathematical methods as appropriate. Key sources of estimation uncertainty Based on the current favourable market conditions, including strong commodity prices and the local currency devaluation, as well as the stable outlook for commodity prices and their volatilities, management has determined that as of the reporting date there are no assumptions or other sources of estimation uncertainty that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year. Other sources of estimation uncertainty Other sources of estimation uncertainty reflect those sources of estimation uncertainty of which management believe users should be aware, but which are not judged to have a reasonably possible material impact of resulting in a material adjustment to the carrying amount of assets and liabilities within the next financial year. They include: cash flow projections for impairment testing and impairment reversal, valuation of contingent consideration assets and liabilities and calculation of net realisable value of stockpiles and work-in progress.
DCF models are developed for the purposes of impairment testing, valuation of contingent consideration assets and liabilities and calculation of net realisable value of metal inventories. Expected future cash flows used in DCF models are inherently uncertain and could change over time. They are affected by a number of factors including ore reserves, together with economic factors such as commodity prices, exchange rates, discount rates and estimates of production costs and future capital expenditure.
Based on the estimates described above the Group concluded that there were no indicators of impairment for property, plant and equipment identified as of 31 December 2024 and no write downs to net realisable value of metal inventories was recognised for the year ended 31 December 2024 (31 December 2023: none). Environmental obligations The Group’s mining and exploration activities are subject to various laws and regulations governing the protection of the environment. The Group’s provision for future decommissioning and land restoration cost represents management’s best estimate of the present value of the future cash outflows required to settle the liability which reflects estimates of future costs, inflation, movements in foreign exchange rates and assumptions of risks associated with the future cash outflows; and the applicable interest rate for discounting the future cash outflows. Actual costs incurred in future periods could differ materially from the estimates. Additionally, future changes to environmental laws and regulations, life of mine estimates and discount rates could affect the carrying amount of this provision. Climate change We have assessed and set out the Group’s climate risks and opportunities as part of our commitment to climate disclosure within the Strategic Report. Mitigation and adaptation measures that may be required in the future to combat the physical and transition risks of climate change could also have potential implications for the Group’s financial statements. This would be the case where assets and liabilities are measured based on an estimate of future cash flows. In preparing the Group’s financial statements, climate-related strategic decisions have impacted the following:
We have adopted both mitigation and adaptation measures within our climate management system. We focus on renewable energy, carbon-intensive fuel replacement and innovative technologies to both mitigate climate change impacts and to reduce our carbon footprint. The adaptation measures we use are based on climate models, which inform the design, construction, operation and closure of our mining assets. Significant judgements and key estimates made by the Group may be impacted in the future by changes to our climate change strategy or in global commitments to decarbonisation. This could, in turn, result in material changes to the financial results and the carrying values of certain assets and liabilities in future reporting periods. As at the reporting date, the Group believes that there is no material impact on balance sheet carrying values of assets or liabilities.
Оn 18 February 2024 the Group entered into contracts for the divestment of its Russian business through a sale of 100% JSC Polymetal ’s shares to a third party, JSC Mangazeya Plus (the Purchaser). On 7 March 2024 the transaction was completed following approval at the General Shareholders Meeting and receipt of the regulatory approvals. Following this date, the Group ceased to have any interest in JSC Polymetal and therefore determined that it lost control over JSC Polymetal on 7 March 2024. As Polymetal Russia was a separate geographical area of operation and a major line of business, the sale represented discontinued operations for the Group. The transaction entailed US$ 50 million cash consideration which was paid to the Company at completion. Prior to completion, an aggregate dividend of US$ 1,429 million (before tax) was paid by JSC Polymetal to the Company, of which US$ 278 million were retained by the Company for its general corporate purposes and US$ 1,151 million were used to repay, and fully discharge, the intra-group debt and related interest owed to JSC Polymetal . Net cash proceeds from the Purchaser and cash received through dividends retained by the Company (after tax) amounted to US$ 300 million. Major classes of assets and liabilities of JSC Polymetal and its subsidiaries (JSC Polymetal Group), net of dividends payable and intercompany loans receivable as described above, that were settled in March 2024 before the actual disposal date and which were not part of assets and liabilities of the divested subsidiaries as of disposal date, are presented as follows:
Loss from discontinued operations is detailed as follows:
The rationale for the transaction was associated with the significant political and financial risks that the pre-divestment structure posed to the Group, as well as the extreme difficulty and related uncertainty of executing any alternative transaction. Therefore management believes that the transaction terms do not represent an indicator of impairment of any CGU within the JSC Polymetal Group prior to the disposal date. Re-presentation of Condensed Consolidated Income Statement of the Group The Group’s condensed consolidated income statement was prepared in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations so that the results of discontinued operations would be excluded from the continuing operations and presented as a single amount. The comparatives in the condensed consolidated income statement were re-presented in the same way. No adjustments to comparative data were made for the assets and liabilities in the statement of financial position. The condensed consolidated results of the Group were divided into transactions with external parties, which are classified as either continuing or discontinued operations, and intra-group transactions between continuing and discontinued operations, which were eliminated in the Group’s condensed consolidated financial statements. The Group's intragroup transactions were eliminated, but adjustments were made to reflect how transactions will be reflected in continuing operations going forward. For that purpose, the sales of Kyzyl doré by discontinued operations in 2023 to third parties were reclassified to continuing operations. Presentation is in line with the Group segment reporting as presented in condensed consolidated financial statements for the year ended 31 December 2023. Therefore the Group recognised revenue and related cost of sales in the operation where the source ore was mined, regardless of whether it was processed on behalf of that segment at production facilities related to another hub. The result of the discontinued operations, which were included in the profit and loss for the period, were as follows:
Cash flows from discontinued operations are presented on the face of the cash flow statement.
The Group’s operating segments are aligned to those businesses that are evaluated regularly by the chief operating decision maker (the CODM) in deciding how to allocate resources and in assessing performance. Operating segments with similar economic characteristics are aggregated into reportable segments. In March 2024, following the divestment of Russian business (Note 3), the Company re-assessed the presentation of financial information by segments. It was concluded that production hub-based reporting format is more meaningful from a management and forecasting perspective, as well as better aligned to the management structure, internal reporting and processes of the retained Group. Segment information for the period ended 31 December 2023 was restated accordingly. Therefore the Group has identified two reportable segments:
Minor companies and activities (management, exploration, purchasing and other companies) which do not meet the reportable segment criteria are disclosed within the corporate and other segment.
The measure which management and the CODM use to evaluate the performance of the Group is a segment adjusted EBITDA, which is an Alternative Performance Measure (APM). For more information on the APMs used by the Group, including definitions, please refer to page 54. The accounting policies of the reportable segments are consistent with those of the Group’s accounting policies under IFRS. Revenue and cost of sales of the production entities are reported net of any intersegmental revenue and cost of sales, related to the intercompany sales of ore and concentrates. Business segment current assets and liabilities, other than current inventory, are not reviewed by the CODM and therefore are not disclosed in these condensed consolidated financial statements. Additionally, net debt is included in performance measures, reviewed by CODM. The segment adjusted EBITDA reconciles to the profit before income tax from continuing operations as follows:
Included in revenues for the year ended 31 December 2024 are revenues from the sales to the Group’s largest customers, whose contribution to the Group’s revenue presented 10% or more of the total revenue. In 2024, revenues from such customers amounted to US$ 827 million and US$ 117 million (2023: US$ 547 million and US$ 114 million). Geographical analysis of revenue by destination is presented below:
Presented below is an analysis per revenue streams:
Depreciation of operating assets excludes depreciation relating to non-operating assets (included in general, administrative and selling expenses) and depreciation related to assets employed in development projects where the charge is capitalised.
Operating cash flows spent on exploration activities amounted to US$ 8 million (2023: US$ 34 million).
During the year ended 31 December 2024 interest expense on borrowings excluded borrowing costs capitalised in the cost of qualifying assets of US$ 3 million (2023: US$ 2 million). These amounts were calculated based on the Group’s general borrowing pool and by applying an effective interest rate of 4.39% (2023: 5.57%) to weighted average balance of expenditure associated with qualifying assets. Income tax expense for the years ended 31 December 2024 and 2023 recognised in the condensed consolidated income statement was as follows:
A reconciliation between the reported amounts of income tax expense attributable to income before income tax is as follows:
The actual tax expense differs from the amount which would have been determined by applying the statutory rate of 20% for Kazakhstan to profit before income tax as a result of the application of relevant jurisdictional tax regulations, which disallow certain deductions which are included in the determination of accounting profit. Deferred taxation Deferred taxation is attributable to the temporary differences that exist between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes. The following are the major deferred tax assets and liabilities recognised by the Group and movements thereon during the reporting period.
Deferred tax assets and liabilities are offset where the Group has a legally enforceable right to do so. The following analysis shows deferred tax balances presented for financial reporting purposes:
The Group believes that recoverability of the recognised deferred tax asset (DTA) of US$ 5 million at 31 December 2024 (2023: US$ 7 million as applicable to the continuing operations), which is related to the tax losses carried forward, is more likely than not based upon expectations of future taxable income. It was concluded that there is sufficient evidence to overcome the recent history of losses based on forecasts of sufficient taxable income in the carry-forward period. The Group’s estimate of future taxable income is based on established proven and probable reserves which can be economically developed. The related detailed mine plans and forecasts provide sufficient supporting evidence that the Group will generate taxable earnings to be able to fully realise its net DTA even under various stressed scenarios. The amount of the DTA considered realisable, however, could be reduced in the near term if estimates of future taxable income during the carry forward period are reduced due to delays in production start dates, decreases in ore reserve estimates, increases in environmental obligations, or reductions in precious metal prices. As of 31 December 2023 the Group recognised deferred tax liability of US$ 152 million in respect of the undistributed retained earnings of certain of the Group subsidiaries, which were expected to be remitted by JSC Polymetal Russia to the Company prior to the completion of the divestment of the Russian business (Note 3). During the year ended 31 December 2024 this amount was released, while the withholding tax of US$ 141 million related to the dividends remitted was recognised within current income taxes.
No deferred tax liabilities for taxes that would be payable on the unremitted earnings of the Group subsidiaries and joint ventures is recognised where the Group determines that the undistributed profit of its subsidiaries and joint ventures will not be distributed in a foreseeable future (judged to be one year). The temporary differences associated with investments in subsidiaries, for which deferred tax liabilities have not been recognised, amounted to US$ 0.9 billion (2023: US$ 2.3 billion).
Mining, exploration and development assets at 31 December 2024 included mineral rights with a net book value of US$ 257 million (31 December 2023: US$ 621 million) and capitalised stripping costs with a net book value of US$ 172 million (31 December 2023: US$ 262 million). Mineral rights of the Group comprise assets acquired upon acquisition of subsidiaries. No property, plant and equipment was pledged as collateral at 31 December 2024 and 2023.
Movement during the reporting periods was as follows:
Syrymbet Joint Venture In November 2024, the Group acquired a 55% stake in а private company Tin One Holding (holder of the Syrymbet subsoil licence) for the total cash consideration of US$ 82 million, comprising US$ 61 million paid for outstanding shares and US$ 21 million paid for newly issued shares of the investee. As part of the transaction, the Group entered into the shareholders’ agreement, governing the management of the investee. The Syrymbet licence covers the area of over 10 km2 and is located in the Ayirtau district of the North-Kazakhstan region and represent the polymetallic deposit suitable for open-pit mining. The Group has determined that the arrangement requires the unanimous consent of the parties sharing control. As a result, it was concluded that the joint arrangement provides the parties with rights to the net assets of the arrangement and, therefore, the investment represents a joint venture as defined by IFRS 10 Joint Arrangements. Consideration paid is attributable to the fair value of the mineral rights of the investee, which was reflected in purchase price allocations performed. No deferred tax liability was recognised as it was determined that the investee does not meet the definition of business in accordance IFRS 3 Business Combinations. During the period from transaction completion to 31 December 2024, no significant share of profit/(loss) from Syrymbet was recognised and there no significant cash balance held as of 31 December 2024. Summarised financial position of the investments
Write-downs of metal inventories to net realisable value There were no write-downs or reversals to net realisable value of metal and other inventories during years 2023 and 2024 ended 31 December. No inventories held at net realisable value at 31 December 2024 and 31 December 2023.
Bank loans The Group has a number of borrowing arrangements with various lenders. These borrowings consist of unsecured and secured loans and credit facilities as detailed above. Movements in borrowings are presented in Note 22. Long-term borrowings, as detailed above, are governed by various financial and procedural covenants, in line with the standard terms of such agreements. If these covenants are not met, this may result in the borrowings becoming repayable on demand. For all outstanding loan balances, the Group has complied with all covenants that were required to be met on, or before 31 December 2024, and has the right to defer settlement for the non-current loans for a period of at least twelve months.
The table below summarises maturities of borrowings:
The principal assumptions are related to the Kazakhstani tenge projected cash flows. The assumptions used for the estimation of environmental obligations were as follows:
The discount rates applied are based on the applicable government bond rates in Kazakhstan. The expected mine closure dates are consistent with life of mine models and applicable mining licence requirements. Social liabilities are represented by various social programmes and payments stipulated by the mining licences and contracts. Discount rates applied to the social liabilities are consistent with those used for environmental obligations.
Commitments Capital commitments The Group’s contractual capital expenditure commitments as of 31 December 2024 amounted to US$ 11 million, net of VAT (2023: US$ 171 million).
Contingent liabilities In accordance with a memorandum with Kostanay Oblast Akimat (local Kazakhstan government), the Group participates in financing of certain social and infrastructure development projects of the region. The total social expense commitment as at 31 December 2024 amounts to US$ 7 million (undiscounted), payable in the future periods. Kazakh tax, currency and customs legislation is subject to varying interpretations, and changes, which can occur frequently. Management’s interpretation of such legislation as applied to the transactions and activities of the companies of the Group may be challenged by the relevant regional and federal authorities and as a result, significant additional taxes, penalties and interest may be assessed. Fiscal periods remain open to review by the authorities in respect of taxes for five calendar years preceding the year of review. Under certain circumstances reviews may cover longer periods. As at 31 December 2024 management has not identified any tax exposure in respect of contingent liabilities (31 December 2023: US$ 41 million, mainly related to income tax).
The movements in the Stated capital account in the year were as follows:
On 23 November 2023, the Board announced its intention to conduct an exchange offer, which was approved by Shareholders at the General Meeting on 8 December 2023. The exchange offer invited shareholders whose rights have been affected by the sanctions imposed on NSD, subject to fulfilling eligibility criteria, to tender such shares for exchange in consideration for the issuance of a certificated share, on a one-for-one basis. The exchange was completed in October 2024. In total, 45,440,241 shares were repurchased since the beginning of the Exchange Offer during the year ended 31 December 2024. The exchange of shares did not give rise to any cash settlement and hence does not give rise to any financial liability. These shares were exchanged at par, on a one-for-one basis and the exchange does not affect the Company's net asset and resources position or capital structure.
The ordinary shares reflect 100% of the total issued share capital of the Company.
The calculation of the basic and diluted earnings per share is based on the following data: Weighted average number of shares: Diluted earnings per share Both basic and diluted earnings per share were calculated by dividing profit for the year attributable to equity holders of the parent by the weighted average number of outstanding common shares before/after dilution respectively. The calculation of the weighted average number of outstanding common shares after dilution is as follows:
There were no adjustments required to earnings for the purposes of calculating the diluted earnings per share during the year ended 31 December 2024 (year ended 31 December 2023: nil). There are no dilutive potential ordinary shares with respect to earnings per share from continuing operations as these are out of money as of the reporting date (2023: no dilutive potential ordinary shares). The LTIP tranche, granted in 2020 lapsed during year ended 31 December 2024 and accordingly, the related balance of US$ 24 million in the share-based payment reserve was transferred into retained earnings (2023: US$ 13 million was transferred into retained earnings in related to 2018 LTIP tranche). Additionally, the balance of US$ 7 million, related to the LTIP tranche, granted in 2021 to the employees of the divested Russian business (Note 3) was transferred into retained earnings.
Related parties are considered to include shareholders, affiliates, associates, joint ventures and entities under common ownership and control with the Group and members of key management personnel. During the year ended 31 December 2024 there were no significant transactions with the related parties (year ended 31 December 2023: miscellaneous purchases of US$ 4 million and various sales of US$ US$ 0.5 million). Outstanding balances as of 31 December 2024 were represented by long-term loans advanced to the equity method investments amounting to US$ 2 million (31 December 2023: US$ 64 million related to the discontinued operations). The remuneration of directors and other members of key management personnel during the periods was as follows:
There were no significant non-cash transactions during the years ended 31 December 2024 and 31 December 2023, other than in respect of exchange of the ordinary shares (Note 20). Cash outflows related to capitalised exploration amounted to US$ 14 million for the year ended 31 December 2024 (2023: US$ 11 million). During the year ended 31 December 2024, the capital expenditure related to the new projects, which increase the Group’s operating capacity amounts to US$ 81 million (2023: US$ 237 million). Cash and cash equivalents
Bank deposits as of 31 December 2024 were mainly presented by the US dollar, bearing an average interest rate of 4.1 % per annum (2023: the US dollar and CNY deposits, bearing an average interest rate of 2.98% and 4.04% per annum, respectively). During year ended 31 December 2024 finance income of US$ 30 million (2023: US$ 16 million) mainly related to the interest income from cash and cash equivalents. Changes in liabilities arising from financing activities The table below details changes in the Group's liabilities arising from financing activities, including both cash and non-cash changes. Liabilities from financing activities are those for which cash flow were, or future cash flows will be, classified in the Group's condensed consolidated cash flow statements as cash flows from financing activities.
In March 2025 the Group entered into binding agreement to acquire 100% interest in the Tokhtar gold property in northern Kazakhstan. Under the agreement, Solidcore will initially acquire a 51% interest in the Project for the total cash consideration of approximately US$ 25 million. An additional 23% will be acquired following the KazRC-compliant reserve estimate for the Tokhtar and the South Tokhtar areas at a price based on the estimate results, with the remaining 26% to be acquired following the KazRC-compliant reserve estimate for the Barambay area at a price based on the estimate results. In addition, the sellers will receive a deferred variable consideration linked to the future metal processing volumes. Completion of each stage of the transaction will be subject to obtaining the required regulatory approvals, with the acquisition of the initial 51% interest expected to be completed in Q3 2025. The Group is in process of evaluating the appropriate accounting treatment for the transaction.
ALTERNATIVE PERFORMANCE MEASURESIntroduction The financial performance reported by the Company contains certain Alternative Performance Measures (APMs), disclosed to complement measures that are defined or specified under International Financial Reporting Standards (IFRS). APMs should be considered in addition to, and not as a substitute for, measures of financial performance, financial position or cash flows reported in accordance with IFRS. The Company believes that these measures, together with measures determined in accordance with IFRS, provide the readers with valuable information and an improved understanding of the underlying performance of the business. APMs are not uniformly defined by all companies, including those within the Group’s industry. Therefore, the APMs used by the Company may not be comparable to similar measures and disclosures made by other companies. Purpose APMs used by the Company represent financial KPIs for clarifying the financial performance of the Company and measuring it against strategic objectives, given the following background:
APMs and justification for their use
[1] The financial performance reported by the Company contains certain Alternative Performance Measures (APMs) disclosed to complement measures that are defined or specified under International Financial Reporting Standards (IFRS). For more information on the APMs used by the Company, including justification for their use, please refer to the “Alternative performance measures” section below. [2] Profit for the year. [3] On a cash basis, representing cash outflow on purchases of property, plant and equipment in the consolidated statement of cash flows. [4] The financial performance reported by the Company contains certain Alternative Performance Measures (APMs) disclosed to complement measures that are defined or specified under International Financial Reporting Standards (IFRS). For more information on the APMs used by the Company, including justification for their use, please refer to the “Alternative performance measures” section below. [5] Based on 560 KZT/US$. [6] Totals may not correspond to the sum of the separate figures due to rounding. % changes can be different from zero even when absolute amounts are unchanged because of rounding. Likewise, % changes can be equal to zero when absolute amounts differ due to the same reason. This note applies to all tables in this release. [7] The amounts were restated to reflect adjustments made in connection with the presentation of discontinued operations. [8] Reported figures for the financial year ended 31 December 2023, including the discontinued operations. [9] Defined in the “Alternative performance measures” section below. [10] In accordance with IFRS, revenue is presented net of treatment charges which are subtracted in calculating the amount to be invoiced. Average realised prices are calculated as revenue divided by gold volumes sold, without effect of treatment charges deductions from revenue. [11] The metric is not applicable for continuing operations in 2023 as the balance values of assets and equity as of the end of 2023 include discontinued operations while earnings are from continuing operations only. [12] Refers to non-meaningful dynamics hereinafter being either too small or too big difference, or when a number changes from negative to positive value. [13] For the historical operating and safety data for both continuing and discontinued operations please the previous annual reports. [14] Based on 80:1 Au/Ag conversion ratio and excluding base metals. Discrepancies in calculations are due to rounding. [15] Company employees only are taken into account. [16] Discrepancies in calculations are due to rounding. [17] Ore Reserves and Mineral Resources from continuing operations in accordance with the JORC Code (2012). Mineral Resources are additional to Ore Reserves. Discrepancies in calculations are due to rounding. Estimate based on gold price of US$ 2,000/oz. [18] Attributable to 55% ownership. Estimate based on tin price of US$ 20,000/t. [19] Water use for processing does not include water used for non-technological purposes. [20] Based on actual realised prices. [21] Without the effect of deductions for treatment charges from revenue. [22] Commission sales of third-party materials. [23] Defined in the “Alternative performance measures” section below. [24] Defined in the “Alternative performance measures” section below. [25] Discrepancies are due to rounding. [26] Defined in the “Alternative performance measures” section below. [27] Defined in the “Alternative performance measures” section below. [28] Underlying basic EPS are calculated based on underlying net earnings. [29] On a cash basis. [30] On accrual basis, capital expenditure was US$ 222 million in 2024 (2023: US$ 150 million). [31] Defined in the “Alternative performance measures” section below. [32] Related to the Parent and Kazakh entities since re-domiciliation to AIFC. [33] Condensed consolidated cash flows include amounts of discontinued operations (Note 3). 2 Asset acquisitions related to the discontinued operations to the date of disposal. [34] The functional currency of Polymetal is the Russian rouble, which is different from the Solidcore Resources plc functional currency (the US dollar from 1 January 2015 and the Kazakhstani tenge from 1 August 2023). The exchange differences arising on translation of the assets, liabilities and income statements of Polymetal were recorded in other comprehensive income and accumulated in the separate component of equity. On disposal of Polymetal the cumulative amount of the exchange differences relating to Polymetal was recycled to Solidcore Resources plc’s income statement.
[35] Annualised basis for half-year results. [36] Excluding lease liabilities and royalty payments.
31/03/2025 Dissemination of a Financial Press Release, transmitted by EQS News. |
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