Financial Performance - Basic profit reached $25 million for the year 2022, while the net loss after asset impairment was $88 million[2]. - The company reported a basic profit of $25.0 million for 2022, demonstrating strong financial performance despite a challenging business environment[58]. - EBITDA, excluding extraordinary items and foreign exchange, decreased by 66.9% to $56,514,000 in 2022[27]. - Basic earnings, excluding extraordinary items and foreign exchange, fell by 80.1% to $24,954,000 in 2022[28]. - The company reported a loss before tax of $88.540 million compared to a profit of $134.103 million in 2021[157]. - The group recorded a basic and diluted loss per share of $(87,896,000) for the year ended December 31, 2022, compared to a profit of $134,069,000 in 2021[180]. Production and Sales - Iron ore production was 2,569,845 tons in 2022, a slight increase of 0.5% compared to 2,557,794 tons in 2021; sales volume also increased by 0.5% to 2,566,480 tons[5]. - Iron ore production for 2022 was 2,569,845 tons, representing an 81% capacity utilization and a 0.5% increase from the previous year[29]. - In 2022, the company's sales and production volumes increased by 0.5% compared to the previous year, indicating a stable performance despite challenges[98]. Revenue and Pricing - The average price of iron ore with 65% iron content dropped by 25.3% to $139 per ton in 2022 from $186 per ton in 2021[5]. - The realized selling price for iron ore in 2022 was $118 per dry ton, a decrease of 25.8% compared to the previous year[7]. - The realized iron ore selling price dropped by 27.6% to $118 per dry ton in 2022 compared to $163 per dry ton in 2021[32]. - Total revenue for 2022 was $278.757 million, a decrease of 25% from $371.279 million in 2021[157]. - Revenue from iron concentrate sales was $274.598 million, down from $369.173 million in 2021, representing a decline of 25.5%[157]. - Revenue from external customers in China was $251.198 million, a decrease of 29.5% from $356.003 million in 2021[157]. Costs and Expenses - The cash cost per ton increased to $28.2 in 2022 from $21.5 in 2021, reflecting higher operational costs[17]. - The overall cash cost increased from $71.7 per ton in 2021 to $78.8 per ton in 2022, driven by higher shipping costs and mining expenses[22]. - Operating expenses for K&S in 2022 totaled USD 213.1 million, compared to USD 192.5 million in 2021[76]. - Operating expenses, excluding depreciation, increased to $227.700 million from $202.786 million, reflecting a rise of 12.3%[157]. Impairment and Asset Management - The company recorded an impairment loss of $103.2 million related to K&S mining assets due to weak iron ore prices and other economic factors[10]. - The company recognized an impairment loss of $103.169 million in 2022, with no impairment loss reported in 2021[157]. - The K&S project's recoverable amount was approximately $433.3 million as of December 31, 2022, leading to an impairment loss of $94,621,000 during the period[172]. Debt and Financial Position - The net debt to EBITDA ratio for the company was 0.36 in 2022, indicating a stable financial position[54]. - The company’s net debt decreased from $61.1 million at the end of 2021 to $41.6 million at the end of 2022, reflecting improved liquidity[102]. - As of December 31, 2022, total borrowings amounted to USD 78.5 million, a decrease from USD 113.2 million as of December 31, 2021[77]. - The company repaid $34.7 million in principal loans during the year, with $19.0 million coming from a debt-to-equity swap with its main lender[72]. - The company’s weighted average interest rate increased to 8.48% in 2022, up from 7.0% in 2021[53]. Market Conditions and Outlook - The outlook for 2023 remains uncertain, but the market is gradually recovering, with expectations of fruitful results from the Sutara mine and the Amur River Bridge operations[3]. - The company plans to continue monitoring market conditions and adjust its sales and marketing strategies accordingly[14]. - The demand for iron ore remains uncertain as China's economic recovery post-COVID-19 is still unclear, with the steel industry in China continuing to operate under low-profit margins[131]. - Geopolitical risks related to the Ukraine crisis continue to adversely affect the global economic situation, influencing the company's outlook[86]. Strategic Initiatives - The company plans to start mining at the Sutara site in the second half of 2023, as the Kimkan site is nearing depletion[87]. - The company plans to utilize the newly opened Amur River Bridge to transport more products to Chinese customers, reducing delivery time from 3-5 days to 1-3 days[124]. - The company is actively seeking diversification opportunities, including potential ship purchases in Q1 2023, to mitigate risks and establish new revenue sources[88]. - The company emphasizes the importance of completing the Sutara development to maintain continuous production despite external threats and challenges[132]. Employee and Operational Metrics - As of December 31, 2022, the company employed 1,804 staff, with total employee costs amounting to $35.7 million, an increase from $28.3 million in 2021[56]. - The company faced challenges in Q4 2022 due to a difficult operating environment, impacting profit margins and necessitating a temporary reduction in operational scale[85]. - The company has successfully resolved mining issues through constructive discussions with contractors, improving production efficiency[96].

Financial Performance - EBITDA for the first half of 2022 was approximately $52 million, with a basic profit of about $39 million[14]. - The total impairment loss for the group amounted to approximately $113 million, resulting in a net loss of about $78 million for the first half of 2022[10]. - Revenue decreased by 23.7% to $165,658 thousand from $217,170 thousand year-on-year[26]. - The company reported a loss attributable to owners of $77,885 thousand, a significant decline from a profit of $98,271 thousand in the previous year[26]. - The company reported a loss before tax of $(80,173) thousand, compared to a profit of $97,964 thousand in the same period last year[134]. - The net loss for the period was $(77,942) thousand, a significant decline from a profit of $98,230 thousand in the previous year[137]. - Basic and diluted loss per share was $(1.10), compared to earnings of $1.39 per share in the prior year[134]. - The total comprehensive loss for the period was $(71,452) thousand, compared to a comprehensive income of $91,878 thousand in the same period last year[137]. Production and Sales - In the first half of 2022, K&S operated at slightly above 80% capacity, producing approximately 1.3 million tons of high-grade iron concentrate[10]. - Iron ore production decreased by 4.0% to 1,258,847 tons compared to 1,310,718 tons in the same period last year[26]. - K&S shipped 1,277,048 tons of iron concentrate in the first half of 2022, maintaining sales levels similar to the previous year despite logistical challenges[80]. - Sales volume of iron ore fell by 1.8% to 1,277,048 tons from 1,300,045 tons year-on-year[26]. - The realized selling price based on wet metric tons dropped by 22.3% to $129.7 from $167.0 in the previous year[26]. Costs and Expenses - Cash costs per ton, including transport to customers, increased by 19.8% to $78.6 from $65.6[26]. - Operating expenses (excluding depreciation and amortization) increased to $(115,561) thousand, up 23% from $(93,925) thousand in the prior year[134]. - General and administrative expenses rose to $10.104 million from $5.501 million, marking an increase of approximately 83.5%[173]. - The company reported a significant increase in transportation and freight costs, which rose to $38.837 million from $29.823 million year-over-year[173]. Cash Flow and Debt Management - Cash and deposit balance increased to approximately $77 million, while net debt decreased sharply to about $26 million as of June 30, 2022[14]. - Financing costs decreased by 61.5% to $4.2 million in the first half of 2022, attributed to a reduction in loan balance after a voluntary early repayment of $70 million in 2021[55]. - The company’s cash and bank balances increased to $76.9 million as of June 30, 2022, compared to $52.1 million at the end of 2021, due to strict cash management measures[67]. - Total borrowings as of June 30, 2022, amounted to $102.9 million, down from $113.2 million as of December 31, 2021[71]. - Net debt significantly reduced to $26.0 million as of June 30, 2022, enhancing the company's ability to withstand interest rate fluctuations[71]. Market Conditions and Challenges - The average Platts 65% iron ore index for the first half of 2022 was $165 per ton, a 22% decrease from $211 per ton in the same period last year[13]. - The inflation rate in Russia reached 14.2% in the first half of 2022, significantly impacting operational costs for K&S[14]. - K&S faced operational challenges due to railway congestion and geopolitical tensions affecting transportation demand[10]. - The company is exploring alternative shipping routes and expanding local sales to mitigate the impact of external challenges[10]. Future Plans and Developments - The company plans to enhance production capacity by potentially adding processing equipment for the K&S project and developing other exploration projects[6]. - The company is preparing to commence operations at the Sutara mine, expected to improve production capacity in the second half of 2023[20]. - The estimated initial capital expenditure to bring the Sutara mine into operation is approximately $49.2 million, with $14.6 million already incurred as of June 30, 2022[63]. - K&S is evaluating options to upgrade its first-phase production facility to increase annual capacity to approximately 4.6 million tons[77]. Regulatory and Governance - The company adhered to the corporate governance code as per the listing rules during the reporting period[123]. - The board of directors confirmed compliance with the standard code of conduct regarding securities trading[123]. - The audit committee reviewed the unaudited interim results for the six months ending June 30, 2022, with discussions held with the management[124]. Employee and Operational Metrics - Employee costs totaled $19.5 million for the reporting period, compared to $13.7 million for the same period in 2021, with a workforce of 1,773 employees[73]. - K&S reported a lost time injury rate of 1.37 per million hours worked, compared to 0.7 in the same period of 2021, with one injury incident and no fatalities reported[88]. - K&S has established an emergency office to prevent the spread of COVID-19, implementing necessary measures without significant operational impact from the pandemic[88].

Financial Performance - In the fiscal year 2021, the company achieved a revenue of $382.1 million, representing a significant increase compared to previous years[8] - The basic EBITDA for 2021 rose by 114% to $171 million, indicating strong operational performance despite challenges[13] - The basic profit for the year was $125.3 million, marking a 33.3% increase year-over-year[8] - The company reported a net profit of $134.1 million for the year, demonstrating effective cost management and operational efficiency[8] - Basic earnings increased to $125 million, five times last year's figure, representing nearly two-thirds of the company's current market value[15] - The company reduced its net debt from $184 million at the end of last year to $61 million by the end of 2021, enhancing financial strength[15] - The total revenue for the year was $371.3 million, reflecting a 65.3% increase from $224.6 million in 2020[28] - The company reported a net profit attributable to shareholders of $134.1 million, a 33.3% increase from $100.6 million in 2020[28] - The group achieved a significant improvement in basic EBITDA, reaching $170.6 million in 2021, compared to $79.7 million in 2020, driven by strong iron ore prices and stable production rates[87] - The company reported a profit of $134.1 million for 2021, an increase from $100.6 million in 2020, driven by EBITDA growth and a reduction in financing costs[69] Production and Sales - The company produced and sold 2.6 million tons of high-grade iron concentrate in 2021, showcasing its production capabilities[13] - Iron ore production for the year ended December 31, 2021, was 2,557,794 tons, a decrease of 6.9% from 2,747,767 tons in 2020[28] - K&S's iron ore production in 2021 was 2,557,794 tons, representing 81% of its capacity, a decrease from 2020 due to poor performance from third-party contractors and lower ore quality[38] - The realized sales price for iron ore was $145 per ton, with a significant increase of 66.7% compared to $87 per ton in 2020[28] - K&S's sales volume for the reporting period was 2,553,804 tons, remaining flat compared to the previous year[98] Cost Management - The net cash generated from operating activities was $166.3 million, reflecting robust cash flow management[8] - Cash costs per ton, including transport to customers, increased to $71.7, up 40.0% from $51.2 in 2020[28] - The cash cost per wet ton of iron ore sold in 2021 was $71.7, a 40.0% increase from $51.2 in 2020, driven by higher mining and transportation costs[54] - The cash cost rose to $71.7 per ton in 2021 due to increased mining and transportation costs, despite strict cost management[90] - Administrative expenses, excluding depreciation and amortization, were $10.3 million in 2021, compared to $9.2 million in 2020, indicating effective cost control measures[87] Market Conditions - The average price of Platts 65% iron ore increased by 53% year-on-year to $186 per ton in 2021, with a peak of $260 per ton in May 2021[18] - The average price of iron ore in 2021 was $186 per ton, a 52.5% increase compared to $122 per ton in 2020[38] - The premium for high-grade iron ore continues to rise, with the price gap for 65% iron ore averaging $28 per ton at the beginning of 2022[18] - The iron ore market has seen a rise of over 20% since the beginning of 2022, with the Platts 65% iron ore index currently around $170 per ton[18] Strategic Initiatives - The company plans to enhance its production capacity by adding processing equipment and developing other exploration projects[6] - The company plans to develop the Sutara mine, expected to commence operations by the end of 2022 or early 2023, to boost production levels[18] - The company aims to achieve three main goals in 2022: reduce debt-to-equity ratio, develop Sutara, and provide dividend returns to shareholders[24] - The anticipated Amur River Bridge, expected to be operational in 2022, will further enhance transportation efficiency for the group and its customers[95] - The company is exploring new transportation routes to China via Zaibalkalsk and Manzhouli to enhance sales terms[45] Safety and Compliance - The company reported a low lost-time injury rate of 0.35, indicating effective safety management systems[24] - The group has implemented various systems and standards to ensure compliance with safety regulations, achieving a lost time injury rate of 0.35 in 2021, consistent with 2020[87] - The company has established an emergency office to prevent the spread of COVID-19, implementing necessary organizational and administrative measures[90] - K&S is facing two administrative violation lawsuits due to operating without proper permits and failing to comply with RTN's directives, with potential fines and operational suspensions[109] Human Resources - The group employed approximately 1,696 employees as of December 31, 2021, compared to 1,665 employees on December 31, 2020, with total employee costs amounting to $28.3 million in 2021, up from $26.6 million in 2020[84] - The company employed a total of 1,767 employees in 2021, representing a 4% increase from the previous year[180] - The employee turnover rate for the company in 2021 was 17%, with 301 employees leaving, which is higher than the mining industry average[191] - The company aims to create job opportunities and provide competitive wages and a safe working environment[199] - The company emphasizes professional and personal development opportunities for employees[200] Environmental, Social, and Governance (ESG) - The company emphasizes its commitment to environmental, social, and governance (ESG) responsibilities across all operational stages[158] - The company has established specific environmental, social, and governance (ESG) goals and deadlines, which are monitored by the board of directors[167] - The company is committed to gender equality in hiring practices and does not tolerate any form of gender discrimination[180] - The company aims to provide safe and healthy working conditions, rational use of natural resources, and conservation of the environment for future generations[171]

Financial Performance - IRC Limited achieved a record profit attributable to shareholders of $98 million in the first half of 2021, which is nearly half of the company's current market value[7]. - Revenue increased over 100% to $217 million in the first half of 2021, with EBITDA rising approximately threefold to $123 million compared to the same period last year[8]. - The company achieved a net profit attributable to shareholders of $98.3 million, a significant increase of 1,554.1% from $5.9 million in the same period of 2020[20]. - Basic earnings per share reached 1.39 cents, compared to 0.08 cents in the previous year, reflecting a growth of 1,554.0%[20]. - Profit before tax surged to $97,964,000, compared to $6,372,000 in the prior year, marking a significant increase of 1,438.5%[113]. - Total comprehensive income for the period was $91,878,000, compared to $7,300,000 in the previous year, an increase of 1,157.5%[115]. Revenue and Sales - Revenue for the six months ended June 30, 2021, was $217,170,000, representing a 104.5% increase from $106,173,000 in the same period of 2020[113]. - Revenue from iron ore sales was $215,772,000, while delivery services contributed $1,298,000 and engineering services added $100,000[142]. - The revenue breakdown by region shows that China accounted for $204,365,000 and Russia contributed $12,805,000[142]. - Sales volume for the same period was 1,300,045 tons, down 5.8% from 1,380,516 tons in 2020[20]. Production and Capacity - The company reported iron ore production of 1,310,718 tons for the six months ended June 30, 2021, a decrease of 6.1% compared to 1,395,411 tons in the same period of 2020[20]. - K&S operated at an average capacity of 84% in the first half of 2021, despite facing challenges such as operational issues with third-party mining contractors and railway congestion[12]. - K&S aims to increase its annual production capacity to approximately 4.6 million tons through upgrades to the first-phase production facility[71]. - The total resources at K&S are estimated at 784 million tons, with total reserves of 364 million tons and a mine life exceeding 30 years[70]. Costs and Expenses - Cash costs rose to $65.6 per ton, an increase of 34.4% from $48.8 per ton in the previous year[20]. - The company's operating expenses and general administrative costs increased by 24.2%, significantly lower than the revenue growth of 104.5%[24]. - Mining operating expenses and service costs increased to $100,328,000 in the first half of 2021 from $84,709,000 in the same period of 2020, representing an 18.4% rise[156]. Cash Flow and Financial Position - Cash and deposits at the end of the first half of 2021 stood at $67 million, with a focus on maintaining a strong financial position and prudent management of financial risks[8]. - The net cash generated from operating activities for the first half of 2021 was 86.4 million USD, a threefold increase from 20.3 million USD in the same period of 2020[57]. - The company reported a significant increase in cash flow, with cash and cash equivalents rising to $66,687,000 from $20,371,000, an increase of 228.5%[118]. - Total liabilities decreased to $(287,619,000) from $(298,835,000), reflecting a reduction of 3.9%[120]. Strategic Initiatives - The company is exploring conditions necessary for dividend payments to shareholders, emphasizing dividends as a priority for long-term shareholder returns[9]. - The ongoing construction of the Amur River Bridge is expected to provide new delivery points for customers in China, enhancing logistics capabilities[2]. - K&S is diversifying sales to southern maritime customers in China to mitigate the impact of railway congestion, which was alleviated in July 2021[14]. - The company is exploring new transportation routes to China through the Zabaikalsk-Manzhouli border crossing to enhance sales strategies[34]. Market Conditions - The realized hedge pre-sale price for iron ore was $186 per ton, up 118% year-on-year, reflecting strong market conditions despite global economic challenges[9]. - The industry standard price for iron ore with 65% iron content surged 44% since the beginning of the year, reaching over $260 per ton in mid-May 2021, the highest since the company was listed in 2010[12]. - The average price of 65% iron ore was $211.1 per ton, up 99.5% from $105.8 per ton in 2020[20]. Compliance and Governance - The company has confirmed compliance with the corporate governance code as per the Hong Kong Stock Exchange regulations[103]. - The management and board are committed to maintaining good corporate governance to safeguard shareholder interests and enhance group performance[103]. - The company is committed to implementing measures to address administrative violations and ensure compliance with regulations[82]. Shareholder Information - As of June 30, 2021, major shareholder Petropavlovsk PLC holds a 31.10% stake in the company, equating to 2,205,900,000 shares[98]. - The company issued 1,328,000 new shares at an exercise price of 0.296 HKD per share, raising approximately 0.05 million USD during the first half of 2021[106].

Financial Performance - The company reported a revenue of $236.4 million for the fiscal year 2020, with an EBITDA of $79.7 million excluding non-recurring items and foreign exchange effects[7]. - The company achieved a net cash flow from operating activities of $62.9 million, representing a significant increase of over 100%[7]. - The company achieved a basic profit of $24.2 million, recovering from a loss of $21.0 million last year[14]. - Revenue reached $224.6 million, representing a significant growth of 26.8% compared to the previous year[14]. - The company recorded a net profit of $100.6 million for 2020, a substantial improvement from the previous year's performance[14]. - EBITDA (excluding non-recurring items and foreign exchange) increased to $79.7 million, more than doubling from 2019[14]. - The company reported a profit of $100.6 million, a significant turnaround from a loss of $38.7 million in 2019, driven by an increase in EBITDA and foreign exchange gains[63]. - The net cash generated from operating activities was $62.9 million in 2020, up 93.9% from $32.4 million in 2019, primarily due to increased revenues from the K&S mine[67]. - The total borrowings of the company decreased to $203.9 million as of December 31, 2020, from $224.6 million in 2019, reflecting a reduction in financing costs[77]. - Financing costs fell by 13.1% to $25.2 million in 2020, attributed to a decline in the London Interbank Offered Rate (LIBOR)[59]. Production and Sales - Iron ore sales volume reached 2.6 million tons, while production was 2.7 million tons, indicating a strong operational performance[7]. - The company reported iron ore production of 2,747,767 tons for the year ended December 31, 2020, an increase of 10.1% from 2,496,600 tons in 2019[26]. - Sales volume for the same period was 2,576,722 tons, up 4.6% from 2,464,401 tons in 2019[26]. - K&S's sales volume increased by 4.6% to 2,576,722 tons in 2020, despite logistical issues caused by traffic congestion on Russian railways[36]. - The company produced 2,747,767 tons of iron concentrate in 2020, representing a 10.1% increase compared to 2019[199]. Cost and Pricing - The cash cost per ton was reported at $51, with a realized selling price of $100 per dry ton, reflecting a 14.9% increase[7]. - The average realized price for iron ore based on dry metric tons was $100, a 14.9% increase from $87 in the previous year[26]. - The average price of Platts 65% iron ore was $122 in 2020, an increase of 17.3% from $104 in 2019[26]. - The cash cost per ton decreased by 2.8% to $51.2, down from $53 in 2019[30]. - The unit cash cost per ton was $51 in 2020, with potential for further cost control as full capacity is reached[104]. Safety and Environmental Impact - The company reported a lost time injury rate of 0.35, demonstrating a commitment to operational safety[7]. - Greenhouse gas emissions were recorded at 65.7 thousand tons, with a reduction of 4.6% compared to previous periods[7]. - The lost time injury frequency rate improved significantly, decreasing by 66% to 0.35 in 2020 from 1.04 in 2019[87]. - The company is committed to providing cleaner, more sustainable resources to meet the growing demand for iron ore[18]. - The company has maintained low levels of water intake and discharge while increasing the reuse of water[166]. Strategic Plans and Developments - The company aims to increase production capacity at the K&S mine to 3.2 million tons per year, with a long-term plan to add processing equipment and develop other exploration projects[5]. - Future expansion plans include new delivery points for Chinese railway customers, enhancing logistics capabilities[2]. - The company plans to develop the Sutara mine, with production expected to commence by the end of 2022 or early 2023[23]. - The company plans to continue reducing debt levels and accumulating cash to strengthen its financial position[14]. - The Amur River Bridge is expected to enhance logistics efficiency by reducing transportation distance to major customers once operational in 2022[18]. Customer Relationships and Market Position - The company has established long-term customer relationships in China and Russia, leveraging its competitive advantages in the iron ore market[4]. - The company is diversifying its customer base by selling to southern China and utilizing maritime routes to mitigate market challenges in northeastern China[40]. - The average realized price for iron ore before hedging was $100 per dry ton in 2020, up 14.9% from $87 per ton in 2019[41]. Human Resources - The average number of employees in 2020 was 1,700, a decrease of 3.4% from the previous year[185]. - The employee turnover rate was 20% in 2020, with 346 employees leaving the company, which is higher than the industry average[198]. - Labor productivity per ton of iron concentrate rose by approximately 13.9% in 2020, attributed to increased employee engagement and reduced downtime for maintenance[200]. - The average salary in 2020 increased compared to 2019, contributing to higher labor productivity[200]. Resource and Reserve Estimates - The company reported total resources of 1,353 million tons and reserves of 390 million tons as of year-end 2020, compared to 1,410 million tons and 372 million tons in 2019[87]. - K&S total resources amount to 783.7 million tons with an average iron grade of 31.2%, containing 244.9 million tons of iron[150]. - The total reserves for K&S were reported at 363.6 million tons with an average iron grade of 30.1%[140]. - The total inferred resources for K&S amount to 434.5 million tons with an average iron grade of 30.1%, containing 131.0 million tons of iron[150].

Financial Performance - IRC Limited achieved a significant milestone by recording a basic profit of $5.9 million in the first half of 2020, reversing a loss of $25.2 million from the previous year[10]. - Revenue increased from $89.2 million to $106.2 million, representing a growth of 19.0%[10]. - EBITDA surged over 150% from $13.2 million in the first half of 2019 to $33.2 million in the first half of 2020[10]. - Basic performance, excluding non-recurring/non-operating items and foreign exchange impacts, improved from a loss of $8.2 million to a profit of $5.7 million[11]. - The company reported a profit before tax of $6,372 thousand, a significant recovery from a loss of $25,932 thousand in the prior year[119]. - Net profit for the period was $5,932 thousand, compared to a loss of $25,224 thousand in the same period last year[121]. - The company reported a total comprehensive income of $7,300 thousand for the period, a recovery from a loss of $45,749 thousand in the previous year[121]. - The company reported a profit attributable to owners of the company of $5,941 thousand for the six months ended June 30, 2020, compared to a loss of $25,204 thousand in 2019[166]. Production and Sales - The company sold 1.4 million tons of iron concentrate with an iron content of 65%, an increase of 11.4% compared to the same period last year[10]. - Iron ore sales volume increased to 1,380,516 tons, a growth of 11.4% compared to 2019[33]. - K&S produced 3,142,487 tons of pre-concentrate, an increase of 20.3% compared to the same period last year, and 1,395,411 tons of iron concentrate, up 14.3% from the first half of 2019[75]. - The average realized price for iron ore was $76.8 per wet ton, up 7.6% from $71.4 per wet ton in 2019[33]. - The average price for iron ore (Fe 65%) was $105.8 per ton, comparable to $105.3 per ton in the first half of 2019[28]. Operational Efficiency - The K&S mine operated at 89% capacity during the first half of 2020, an improvement of 11% year-on-year[10]. - Cash cost decreased by 4.7% to $48.8 per ton, down from $51.2 per ton in 2019[28]. - EBITDA for the K&S mining segment rose by 51.4% to $35.9 million, with a profit of $22.5 million after accounting for depreciation and amortization costs[54]. - Operating cash flow reached $20.3 million, up from $13.1 million in the same period last year, primarily due to improved performance at the K&S mine[55]. - The unit cash cost per ton for the first half of 2020 was $48.8, indicating that K&S has not yet reached optimal levels of production[78]. Market Conditions - The iron ore price increased by 9% from $104.0 per ton at the end of 2019 to $113.6 per ton by June 30, 2020, with prices continuing to rise above $130 per ton in July and August 2020[13]. - In the first half of 2020, iron ore prices were favorable due to stable demand and supply disruptions, with Vale facing operational challenges[14]. - The Chinese government has committed to increasing infrastructure spending, leading to higher demand for iron ore due to construction projects[14]. - The iron ore benchmark price increased by 9% due to rising demand from China and supply constraints from major producers[33]. Financial Position - The company reduced its loan balance from $221.9 million at the end of 2019 to $211.9 million as of June 30, 2020, strengthening its balance sheet[10]. - The total borrowings of the group as of June 30, 2020, were $214.2 million, down from $224.6 million as of December 31, 2019, with a weighted average interest rate decreasing to approximately 7.6% from 9.7%[63]. - The company’s cash balance increased to approximately $17 million by mid-August 2020[55]. - The company believes it has sufficient liquidity to meet its financial obligations due within the next twelve months, supported by expected cash inflows from operations[136]. Strategic Initiatives - The K&S mine is expected to double its production capacity through the development of its second phase and other exploration projects[5]. - The Amur River Bridge is expected to enhance logistics efficiency and reduce transportation costs, with completion anticipated in December 2021[20]. - K&S is diversifying its customer base by selling to southern China, which may yield prices closer to benchmark prices despite higher transportation costs[15]. - The company is focused on maximizing shareholder value while ensuring sustainable business expansion[19]. - The company is actively involved in steel slag reprocessing projects, which resumed operations in 2019 but have not significantly contributed to the group's overall performance[96]. COVID-19 Impact - K&S has maintained operational safety measures in response to COVID-19, with only a few employees testing positive and most being asymptomatic[19]. - The company has implemented emergency measures to prevent the spread of COVID-19, including quarantine arrangements and medical checks, with minimal impact on operations[75]. - The company's primary customers are located in China, and demand for its products has not been adversely affected by the pandemic[136]. Governance and Compliance - The company maintained compliance with the corporate governance code as per the Hong Kong Stock Exchange regulations[111]. - The company is committed to enhancing shareholder value through responsible governance practices[111].

Production and Sales Performance - The company achieved a record iron ore production of 2.6 million tons in 2019, a 15.3% increase compared to 2018[21] - The iron ore sales volume reached 2.5 million tons in 2019[13] - K&S achieved a high production rate of approximately 95% despite the impact of COVID-19, with iron ore prices maintaining a robust level of around $100 per ton[37] - K&S's production in 2018 was 2,234,517 tons, reflecting a 43% increase from the previous year[110] - K&S aims to produce 3.2 million tons of iron concentrate with a 65% iron content annually in its first phase, with potential expansion to 6.3 million tons in the second phase[113] - In 2019, K&S processed 7,892,500 tons of ore, resulting in the production of 2,576,325 tons of iron concentrate, of which 2,464,401 tons were sold[119] Financial Performance - Revenue increased by 16.9% to $177.2 million in 2019, while EBITDA (excluding foreign exchange) rose by 39.2% to $33.3 million[21] - The company reported a net loss of $38.7 million after tax due to various non-operating items, including $11.5 million in unamortized loan costs and $6.2 million in foreign exchange losses[21] - The net revenue for the year was $177,164,000, a 16.9% increase from $151,549,000 in 2018[52] - The company reported a basic loss of $21,000,000 (10.2% increase from $19,060,000) excluding non-recurring items and foreign exchange effects[61] - The company experienced a significant hedge loss of $23,296,000 in 2019, compared to a loss of $1,585,000 in 2018, impacting overall profitability[52] - The company secured $240 million from Gazprombank for refinancing, which will ease cash flow burdens despite higher costs[48] Cost Management - The cash cost per ton remained stable at $51, despite the expansion of operational scale[21] - The average cash cost per ton increased by 2.4%, lower than the 3.1% general inflation rate in Russia[43] - The total cash cost per ton of iron ore was $51.4, up from $50.2 in 2018, representing a 2.4% increase[52] - The net cash cost per ton for iron ore increased by only 2.4% to $51.4 per ton, which is below the overall inflation rate of 3.1% in Russia for 2019[76] Market Conditions and Future Outlook - The price of iron ore with 65% iron content peaked at $136 per ton during the year, ending at $104 per ton, which is $17 higher than the end of 2018[25] - The company aims to strengthen its market position and explore growth and expansion opportunities in the future[22] - The company anticipates continued demand for high-grade iron ore, driven by supply constraints and strong market conditions[66] - The board decided not to engage in further iron ore hedging as the market remains in a contango state[48] Safety and Community Engagement - The company reported a lost time injury frequency rate of 1.04 for 2019, indicating a strong focus on employee safety and community welfare[36] - The company emphasizes safety and sustainability as top priorities, focusing on employee development and environmental responsibility[50] - The company has been actively involved in community support and charitable activities, extending its efforts to the Amur Oblast and Jewish Autonomous Oblast communities[178] - The company has implemented a zero-injury environment initiative, adhering to Russian regulations and international health and safety standards[189] Employee and Governance - The company employed approximately 1,760 employees as of December 31, 2019, an increase from 1,698 employees in 2018[105] - The company is committed to attracting and retaining high-quality employees, aiming to become a leading employer in the Russian Far East[188] - The company has a health, safety, and environment committee composed of three independent non-executive directors to evaluate the effectiveness of policies related to health, safety, and environmental risks[181] Environmental Responsibility - The company has been recognized as the first and only pure iron ore company in the Russian Far East to comply with international standard ISO 14001:2004[178] - The company has a focus on sustainable development, emphasizing safe working conditions, responsible resource use, and environmental conservation for future generations[180] - The total carbon dioxide emissions for 2019 were reported at 2,576,325 tons[174] Resource and Reserve Management - The company's resources and reserves at the end of 2019 were 1,410 million tons and 372 million tons, respectively, compared to 1,419 million tons and 387 million tons at the end of 2018[110] - The total estimated resources across all categories reached 1,410.0 million tons with an average iron grade of 29.1%, equating to 410.4 million tons of iron[146] - The company holds a 99.6% interest in the Garinskoye project, which is the largest exploration project in its portfolio[131]

Production and Sales Performance - In the first half of 2019, the company achieved a 16% increase in iron ore production compared to the same period last year[10]. - Iron ore production increased by 16.4% to 1,262,938 wet tonnes compared to 1,084,602 wet tonnes in the same period last year[22]. - Sales of iron ore rose by 18.4% to 1,239,398 wet tonnes, up from 1,046,649 wet tonnes year-on-year[22]. - The K&S project operated at 93% of its capacity in June 2019, achieving a monthly production record[9]. - K&S produced 1,262,938 tons of iron concentrate and sold 1,239,398 tons during the first half of 2019, with a total of 3,889,400 tons of ore processed[66]. - K&S operated at an average capacity of 93% in June 2019, breaking monthly production records, while maintaining stable operations at approximately 80% capacity during the first half of 2019[63]. Financial Performance - Revenue increased by 27% to $89.2 million, driven by favorable iron ore market prices[10]. - The total revenue for the group was $89.2 million, a 27.2% increase from $70.2 million in the previous year[22]. - Revenue from iron ore reached $88.5 million, a 26.6% increase from $69.96 million in the previous year[22]. - The K&S mine's revenue for the first half of 2019 was $88.5 million, reflecting a 26.6% increase due to higher sales volumes and prices[33]. - The company reported a net loss attributable to shareholders of $25.2 million, a 61.4% increase from $15.6 million in the same period last year[28]. - The company reported a loss before tax of $25,932 thousand, compared to a loss of $15,301 thousand in the previous year, indicating a 69.5% increase in losses[92]. - The net loss for the period was $25,224 thousand, compared to a net loss of $15,637 thousand in the prior year, representing a 61.5% increase in losses[92]. - Basic and diluted loss per share was $(0.36) for the six months ended June 30, 2019, compared to $(0.22) for the same period in 2018[92]. Cost Management - Cash costs decreased by 3.5% from $51.7 per ton in the first half of 2018 to $49.9 per ton in 2019[10]. - The net cash cost per ton sold decreased by 3.5% to $49.9, with processing and fixed production costs per ton reduced by 8.6% and 3.7% respectively[39]. - Mining and operating expenses rose to $65.9 million in H1 2019, up 17.5% from $56.1 million in H1 2018, while sales volume increased by 18.4%[37]. - The company maintained a focus on controlling administrative costs, with general administrative expenses remaining flat at $5.1 million despite inflation[44]. Market Outlook - The outlook for the iron ore market remains cautiously optimistic, with increasing demand driven by infrastructure projects in China[18]. - The company is prepared to meet market demand for iron ore through increased production and a strong project pipeline[18]. Debt and Financing - The refinancing of the Industrial and Commercial Bank of China loan was completed in March 2019, marking a significant milestone for the company[12]. - As of June 30, 2019, the group's borrowings totaled $234.8 million, up from $223.7 million at the end of 2018, with a weighted average interest rate of 9.7%[58]. - The group entered into a financing agreement with Industrial and Commercial Bank of China for a total loan amount of $340 million for the K&S project[198]. - The group fully repaid the outstanding loan principal and interest to Industrial and Commercial Bank of China on March 19, 2019, terminating the financing agreement[199]. - The group entered into two loan agreements with Gazprombank JSC totaling $240 million, with a maturity date in December 2026[200]. Accounting Standards - The company has applied the new Hong Kong Financial Reporting Standards (HKFRS) No. 16 for the first time, which replaces HKAS 17 and related interpretations[114]. - The application of HKFRS No. 16 has resulted in significant changes in accounting policies, particularly in the recognition of lease liabilities and right-of-use assets[116]. - The impact of the new accounting standards on the financial position and performance of the company has not been significant for the current and prior periods[114]. Employee and Operational Metrics - The group employed approximately 1,667 employees as of June 30, 2019, with total employee costs amounting to $12.3 million[58]. - K&S's safety monitoring showed progress with a lost time injury rate of 1.45 for the first half of 2019, compared to zero in the same period of 2018[69]. Project Developments - The company is exploring various projects to increase and confirm exploitable reserves, aiming to enhance value when market conditions improve[85]. - The Amur River Bridge project is expected to reduce transportation costs by up to $5 per ton for K&S, enhancing its position as a low-cost iron ore producer[72]. - The Garinskoye project has a potential annual production capacity of 1.9 million tons with an iron grade of 55% and an operational lifespan of 8 years[83].

Production and Capacity - In 2018, the total production increased by 43% compared to the previous year, with K&S operating at an average capacity of 84% in December 2018, breaking monthly production records[29]. - K&S is expected to reach full production capacity of 3.2 million tons per year, with potential expansion of annual capacity by 40% to 4.5 million tons[29]. - K&S is currently operating at approximately 86% capacity and is preparing for full capacity operations[29]. - K&S produced 2,234,517 tons of iron concentrate in 2018, a 43% increase from 1,563,066 tons in 2017, demonstrating significant operational transformation[90]. - K&S's processing plant operated at 70% capacity in 2018, reaching 84% in December, breaking monthly production records[93]. - K&S achieved an operational capacity of approximately 70% in 2018, with plans to further increase capacity in future phases[90]. Financial Performance - The net profit recorded was $68.2 million, with EBITDA increasing by 42% to $28.5 million[28][29]. - Total revenue reached $151.5 million, a 38.7% increase compared to the previous year[45]. - EBITDA increased by approximately 42.1% to $28.5 million, driven by revenue growth and tighter cost control[37]. - The company achieved a net profit of $68.2 million, a decrease of 39.8% compared to the previous year[45]. - The refinancing arrangement with Gazprombank aims to repay approximately $169 million in loans, enhancing financial stability[37]. - The company recorded an EBITDA of $33.0 million for the production segment, an increase from $27.9 million in 2017[60]. Costs and Expenses - The cash cost per ton for 2018 was $50.2, reflecting a 3.7% increase, consistent with an overall inflation rate of about 3% in Russia[29]. - Cash costs rose slightly by 3.7% to $50.2 per ton, despite higher mining costs and inflation in Russia[37]. - The total operating expenses and service costs for the K&S mine rose to $140.7 million in 2018, compared to $96.2 million in 2017, due to expanded operational scale[55]. - The total employee cost for 2018 was $24.0 million, an increase from $21.7 million in 2017, with approximately 1,515 employees as of December 31, 2018[85]. - The average cash cost per ton of iron concentrate slightly increased by 3.7% to $50.2 in 2018, while processing costs decreased by 12% due to improved efficiency at K&S[90]. Market and Geopolitical Factors - The geopolitical challenges faced in 2018 included risks from the US-China trade war and Brexit, impacting the commodity market[29]. - The global steel market remains tight, particularly in India, Africa, and ASEAN regions, which may influence demand for steel products[34]. - The average exchange rate of the ruble against the US dollar depreciated to 63 rubles per dollar in 2018, positively impacting the group's operating profit due to the cost structure being primarily in rubles and revenue in dollars[34]. Strategic Initiatives - The company aims to maintain K&S as one of the lowest cost producers of 65% iron content iron ore while continuing to control costs[29]. - The company is conducting a strategic review to consider the reopening of the Kuranakh mine, driven by recent positive price movements and stable commodity markets[34]. - The company aims to leverage nearly 40 years of experience in the commodity business to unlock its true potential[34]. - The company is evaluating a capital expenditure of approximately $50 million to upgrade the first-phase production facility to increase annual capacity to about 4.6 million tons[93]. Environmental and Safety Standards - The company maintained a zero-accident policy, with the lost time injury rate decreasing to 0 incidents in 2018 from 1 in 2017[90]. - The company emphasizes a zero-injury environment and adheres to Russian regulations and international health and safety standards[168]. - The company has implemented a comprehensive health and safety management system across all operating companies, reflecting international best practices[185]. - The company aims to minimize the environmental impact of its operations through significant actions and adherence to environmental laws[195][196]. Employee and Community Engagement - The company aims to become a leading employer in the Russian Far East and is focused on attracting and retaining high-quality employees[167]. - The company conducted health and safety training for all employees every six months, ensuring compliance with Russian regulations and international standards[185]. - The company is focused on reducing the impact of its operations on local indigenous communities and supporting their sustainable development[196]. - The company has established various employee conduct codes and internal labor behavior regulations to comply with labor laws[180].