REG - Alba Mineral Resrcs. - Half-year Report
17/08/2023 07:00
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RNS Number : 5629J Alba Mineral Resources PLC 17 August 2023
Alba Mineral Resources plc
("Alba" or the "Company")
HALF-YEARLY REPORT
The Board of Directors of Alba Mineral Resources plc (the "Company" or "Alba")
is pleased to report the Company's interim results for the six months ended 31
May 2023. They incorporate the results of its subsidiary companies Aurum
Mineral Resources Limited ("AMR"), Mauritania Ventures Limited ("MVL"),
Dragonfire Mining Limited ("DML"), the Gold Mines of Wales group of companies
("GMOW") and GMOW (Gwynfynydd) Limited (together, the "Subsidiary Companies",
collectively with Alba, the "Group").
For the period to 9 March 2023 the interim results also consolidate the
GreenRoc Mining Plc group of companies ("GreenRoc") comprising Greenroc Mining
Plc, Obsidian Mining Limited ("OML"), White Eagle Resources Limited ("WERL")
and White Fox Resources Limited ("WFRL") (together, "GreenRoc"). After this
date the investment is treated as an associate.
CHAIRMAN'S STATEMENT
I am pleased to present shareholders with a review of our activities in the
six months to 31 May 2023.
1. REVIEW OF ACTIVITIES
1.1 WELSH GOLD PROJECTS
(Clogau-St David's, Gwynfynydd and Dolgellau Gold Exploration Project) (100%)
During the reporting period, a lot of our work was focused on securing the
ecological permits required for us to be able to dewater and then explore the
Lower Llechfraith Workings at the Clogau-St David's Gold Mine in north Wales
("Clogau" or the "Mine"), this being our highest priority gold target within
the Mine system.
The Lower Llechfraith workings have all the key geological characteristics for
the occurrence of high-grade gold mineralisation, including greenstone sills,
Clogau Shales and structural complexity in the lode itself. This area was a
key focus for the last large-scale development efforts at Clogau, prior to
Alba's time. Historical plans from that period record sightings of visible
gold within these lower workings. Alba's 2020-21 surface drilling programme
proved the downward continuation of the Llechfraith lode structure up to
around 122 metres below where it was last explored on Level 4. As such, the
target structure below this level has been untouched by historical exploration
and development.
Access to the Lower Llechfraith workings has not been possible for some
decades due to flooding, hence the requirement for a dewatering programme to
be undertaken, during which water would be pumped out of the flooded workings
and then treated in the Clogau mine yard using a settlement tank to remove
excess suspended solids.
The inability to progress work on this principal target has of course been a
source of some considerable frustration. However, in July 2023 we were
delighted to report the award to us of those key ecological permits. Having
already done much of the preparatory and planning work in advance in terms of
lining up contractors, equipment and materials, we were able to start the
dewatering exercise within a matter of days following permit grant. And once
the workings had been dewatered to a sufficient extent, our contractors were
able to start work on the essential safety and access works which would enable
us to make our way safely into the lower workings.
All safety works at Level 2 and Level 3 have now been completed, which will
allow safe access down to Level 4 once dewatering has been completed. Alba's
contractors are in the process of completing a cabin structure on the
Llechfraith Adit level which will provide the final bat exclusion and noise
mitigation measure in advance of blasting and other exploration activities at
Level 4, post dewatering.
Dewatering was initially successfully undertaken down to ca. six metres depth,
however unseasonal and exceptionally heavy rainfall during the dewatering
period, some three times higher than the average for the time of year, has
resulted in the workings reflooding, following which the Company has requested
from the regulator, Natural Resources Wales ("NRW"), an extension to the
higher rate (100m3/day) abstraction rate. While, as at the time of writing,
NRW has indicated that it is not minded to grant a temporary variation, the
Company continues to make formal representations in that regard. The Company
is at the same time in the process of applying for formal variations to both
the discharge and abstraction permits to increase the applicable thresholds
under both permits.
An initial dewatering of the workings to at least around 15 metres in vertical
extent would allow the Company to commence the planned safety, clean-up and
exploration works (surveying, mapping and sampling) on Level 4. The second
phase of dewatering (down to around 30m vertical extent), subject to the
permitted development rights notification regime, would allow the sinking of
winzes below Level 4 for the purposes of the planned bulk sampling of the
exposed development, in order to determine the gold content and test the
Company's existing geological model. Depending on the outcome of that work,
the subsequent phase of work is expected to involve putting in new
development, commencing with the sinking of a new shaft or the extension of
the existing Llechfraith Shaft.
Since the implementation of mitigation measures within the settlement tank
being used to remove excess solids, daily analysis of the tank discharge
consistently shows that dissolved Cu is <1µg/L, dissolved Fe <10µg/L,
dissolved Zn <5µg/L, total As <5µg/L and total Al <50µg/L, all
being well within the prescribed discharge permits criteria.
Generally, the fact that the permitting process over the course of the past
two years has included a lengthy Habitat Regulations Assessment ("HRA")
undertaken by the regulator NRW, for which process we generated and
contributed a huge volume of ecological survey data and analysis and devised
wide-ranging mitigation and safety measures for the protection of the
environment, should provide a framework for a more streamlined and efficient
process for future permitting applications.
In relation to the waste tip at Clogau, the Company is close to submitting the
pre-application enquiries to the Local Planning Authority as a precursor to
the submission of a full planning application for the exploitation of the tip.
Across the wider Dolgellau Exploration Project, our plans to undertake an
aerial, UAV (unmanned aerial vehicle) geophysical survey over some of our key
regional gold targets have been delayed somewhat by a backlog of applications
at the regulator, the Civil Aviation Authority (CAA). However, we are advised
that the CAA has now issued the CAA Operational Authorisation which sets out
the agreed safety case for operating the UAV in the target area, and that the
final step is to have the area approved and notified. As such, the Company
remains on track to commence the survey in September 2023.
1.2 GREENROC MINING PLC
From September 2021, when Alba completed the spin-out and IPO of our Greenland
assets into GreenRoc Mining Plc ("GreenRoc"), until March 2023, Alba held a
54% majority interest in GreenRoc. As such, Alba's consolidated financial
statements include GreenRoc and its subsidiaries to that date.
More recently, fundraisings completed by GreenRoc in order to push forward the
development of the high-grade Amitsoq project in southern Greenland have
resulted in the dilution of Alba's stake in GreenRoc to 44.67% as at the
reporting date and to 42.97% in the most recent placing which was announced on
1 August 2023. Nonetheless, we remain by some distance GreenRoc's largest
shareholder and remain heavily involved in the strategic direction and
development of the company.
In fact, we did participate in GreenRoc's most recent fundraising,
contributing £115,000 to GreenRoc's total raise of £470,000. We have
always made it clear that we would look to support GreenRoc's fundraising
efforts as and when it is feasible to do that. In my view, the GreenRoc
management team has consistently delivered excellent results and made great
strides at what is turning into a world-class graphite project at Amitsoq.
With an independent Preliminary Economic Assessment (PEA) due to be delivered
soon and graphite samples being prepared for a potential international
off-take customer, Amitsoq is well set to continue its upward trajectory
towards development and production.
Highlights of the progress made at Amitsoq during the reporting period include
the declaration of a substantial, near three times Resource upgrade in January
2023. It can often be the case that in seeking to add tonnes to a Resource by
further rounds of drilling, that can come at the expense of the overall
grade. At Amitsoq, however, not only have we been able to grow the Resource
substantially, from 8.28Mt to 23.05Mt, but we have also managed to increase
the overall Resource grade from 19.75% to 20.41% C(g), giving a total graphite
content of 4.71 Mt. This has cemented Amitsoq's position as one of the very
highest-grade graphite deposits in the world.
Meanwhile, on the processing side of things, a 700kg bulk sample of graphite
ore from Amitsoq is nearing the final stages of separation at process
engineering contractors UVR-FIA.
The excellent progress delivered at Amitsoq has not only been on these
technical aspects. In February 2023, the European Raw Materials Alliance and
EIT Raw Materials, bodies created by the European Union for the purpose of
ensuring security of supply of critical raw materials for Europe, declared
their official support for GreenRoc and Amitsoq, calling the latter a deposit
of "global importance". And in March 2023, GreenRoc signed a Memorandum of
Understanding ("MoU") with Leonhard Nilsen & Sønner A/S ("LNS"), a
significant construction and mining group headquartered in Norway, in relation
to the development of Amitsoq Graphite.
The MoU provides a framework for LNS and GreenRoc to explore the commercial
opportunities relating to Amitsoq, and the potential appointment of LNS as the
civil, mining and/or logistics contractor for Amitsoq during the construction
and operational phases. LNS has decades of experience as a contractor and mine
operator in the Arctic region and other parts of the world, not only in
Norway, where it is the operating contractor for a number of mining companies,
but also in Greenland itself, most recently at the producing Aappaluttoq Ruby
Mine on the east coast.
GreenRoc is also currently working on the provision of graphite concentrate
and spheronised graphite samples from Amitsoq to a potential international
offtake partner in order for that party to conduct its own testwork.
Steady progress is also being made in relation to the Environmental Impact
Assessment (EIA) and Social Impact Assessment (SIA) work, with both studies
remaining on track for delivery in 2024. And an independent Preliminary
Economic Assessment (PEA), which is being conducted by SLR Consulting and
which is expected to help advance discussions with potential project and
strategic partners in the latter part of this year and into 2024, is advancing
as planned with expected delivery this autumn.
1.3 OTHER PROJECTS AND INVESTMENTS
During the period, we surrendered the licence for our Limerick Base Metals
Project. The targets we had identified for exploration drilling could not be
progressed as planned due to landowner access issues, and alternative drill
collar locations proved not to be economically viable. As such, we were
obliged to surrender the licence.
In March 2023, the majority licence holder of the Horse Hill Oil Field in
Surry, England, UKOG Plc, announced the terms of a proposed farmout
arrangement to a third-party group which would fund a seismic survey at Horse
Hill. The farmout is subject to approval by the shareholders of the operator
of the field, Horse Hill Developments Limited, including Alba. As at the
date of this report, the shareholders have not approved the farmout.
2. CORPORATE
Post-period end, on 7 July 2023, Alba announced a share placing raising
£750,000. A broker option was included as part of the placing, allowing
shareholders and others to apply through their brokers for an allocation in
the placing, and on 24 July 2023 it was announced that an additional £15,150
had been raised via the broker option.
On 9 March 2023, following the dilution of its shareholding in GreenRoc due to
a share placing by the latter, the Group ceased to consolidate the GreenRoc
companies and instead accounted for its holding in GreenRoc as an "Investment
in Associate".
Under applicable accounting standards, the dilution and resulting change in
GreenRoc's status from subsidiary to associate is a deemed disposal of
GreenRoc by Alba which results in an accounting gain. Previously, any fair
value uplift arising from the initial IPO transaction was eliminated through
the consolidation whereas going forward that uplift is no longer eliminated.
This accounting gain does not have any tax implications for the Group.
On 1 August 2023 GreenRoc announced a further placing, raising gross proceeds
of £470,000 at 3.8p per share. Alba participated in the placing, subscribing
for 3,026,316 Placing Shares for a total subscription of £115,000.
Following the placing, Alba has a shareholding of 42.97% in GreenRoc.
3. RESULTS
The Group made a profit of £2,102,000 after tax (2022: loss of £815,000),
including an accounting profit in relation to the de-consolidation of GreenRoc
of £2,672,000 (2022: nil).
This transaction is presented unaudited so the accounting treatment may be
revised in the full year accounts, subject to technical review by the
Company's auditors.
Operating losses were £459,000 compared with £814,000 in the comparative
period. The reduction in costs is principally due to ceasing to consolidate
GreenRoc Mining plc from 9 March 2023. The underlying operating losses of Alba
and its remaining subsidiaries are at a similar level year-on-year.
During the period, £202,000 was spent on exploration activities across the
Group. Cash at the period end was £58,000, reduced in part by removing
GreenRoc's cash asset from the consolidated balance sheet. As noted above,
Alba has raised funding of £750,000 since the reporting date.
Intangible assets decreased by £3.8m from the comparative interim period last
year, reflecting the exclusion of GreenRoc's Greenland project assets from the
balance sheet now that it is no longer consolidated. Instead, a new line item
is shown in the balance sheet, namely the "Investment in Associate" of £5.4m,
representing the Group's investment in GreenRoc at cost less a proportionate
share of losses.
4. OUTLOOK
Alba remains in a strong position to generate real and sustained growth across
its existing portfolio of assets and investments. We also continue to assess
opportunities to expand our portfolio's value by the acquisition of additional
complementary assets.
On behalf of the entire Board, I would like to take this opportunity to thank
our shareholders for all their support.
George Frangeskides
16 August 2023
Executive Chairman
This announcement contains inside information for the purposes of the UK
Market Abuse Regulation and the Directors of the Company are responsible for
the release of this announcement.
Forward Looking Statements
This announcement contains forward-looking statements relating to expected or
anticipated future events and anticipated results that are forward-looking in
nature and, as a result, are subject to certain risks and uncertainties, such
as general economic, market and business conditions, competition for qualified
staff, the regulatory process and actions, technical issues, new legislation,
uncertainties resulting from potential delays or changes in plans,
uncertainties resulting from working in a new political jurisdiction,
uncertainties regarding the results of exploration, uncertainties regarding
the timing and granting of prospecting rights, uncertainties regarding the
Company's ability to execute and implement future plans, and the occurrence of
unexpected events. Actual results achieved may vary from the information
provided herein as a result of numerous known and unknown risks and
uncertainties and other factors.
For further information, please visit www.albamineralresources.com
(http://www.albamineralresources.com) or contact:
Alba Mineral Resources plc
George Frangeskides, Executive
Chairman +44 20 3950
0725
SPARK Advisory Partners Limited (Nomad)
Andrew
Emmott
+44 20 3368 3555
CMC Markets plc (Broker)
Thomas Smith / Douglas
Crippen
+44 20 7392 1494
St Brides Partners (Financial PR)
Isabel de Salis / Catherine Leftley
alba@stbridespartners.co.uk
Alba's Projects and Investments
Mining Projects Operated by Alba Location Ownership
Clogau (gold) Wales 100%
Dolgellau Gold Exploration (gold) Wales 100%
Gwynfynydd (gold) Wales 100%
Investments Held by Alba Location Ownership
GreenRoc Mining Plc (mining) Greenland 42.97%
Horse Hill (oil) England 11.765%
UNAUDITED CONSOLIDATED INCOME STATEMENT
FOR THE SIX MONTHS ENDED 31 MAY 2023
Unaudited Unaudited Audited Year ended 30 Nov 2022
6 months ended 31 May 2023 6 months ended 31 May 2022
£'000 £'000 £'000
Administrative expenses (459) (814) (1,623)
Impairment expense - - (984)
Operating (loss)/profit (459) (814) (2,607)
Revaluation of financial liability - - 2
Gain on deemed disposal (dilution) 2,672
Share of loss of associate (110) - -
Finance costs (1) (1) -
Profit/(loss) before tax 2,102 (815) (2,605)
Taxation - - -
Profit/(loss) for the year 2,102 (815) (2,605)
Attributable to:
Equity holders of the parent 2,182 (592) (2,039)
Non-controlling interests (80) (223) (566)
2,102 (815) (2,605)
Profit/(loss) per ordinary share
Basic 0.030 pence (0.009) pence (0.031) pence
Diluted 0.028 pence (0.009) pence (0.031) pence
UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 MAY 2023
Unaudited Unaudited Audited Year ended 30 Nov 2022
6 months ended 31 May 2023 6 months ended 31 May 2022
£'000 £'000 £'000
Non-current assets
Property, plant and equipment 144 153 150
Intangible fixed assets 3,214 7,030 8,450
Investment in associate 5,386 - -
Investments - Horse Hill Developments 2,600 3,385 2,600
Total non-current assets 11,344 10,568 11,200
Current assets
Trade and other receivables 117 211 129
Cash and cash equivalents 58 2,024 456
Total current assets 175 2,235 585
Current liabilities
Trade and other payables (257) (383) (464)
Financial liabilities - (221) -
Total current liabilities (257) (604) (464)
Net current assets / (liabilities) (82) 1,631 121
Net assets 11,262 12,199 11,321
Capital and reserves
Called up share capital 5,076 5,005 5,076
Share premium account 10,461 9,877 10,461
Warrant reserve 782 1,444 1,187
Dilution of ownership reserve - 991 991
Other reserve - 115 136
Retained losses (5,226) (7,958) (8,929)
Foreign currency reserve 169 169 168
Equity attributable to equity holders of the parent 11,262 9,643 9,090
Non-controlling interests - 2,556 2,231
Total equity 11,262 12,199 11,321
UNAUDITED CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 31 MAY 2023
Unaudited Unaudited Audited
6 months ended 31 May 2023 6 months ended 31 May 2022 Year ended 30 Nov 2022
Cash flows from operating activities
Operating loss (459) (814) (2,607)
Share based payment charge 21 52 228
Depreciation 6 3 7
Foreign exchange revaluation adjustment - 1 -
Profit on sales to associate 3
Increase / (decrease) in creditors (207) (288) (208)
(Increase)/ decrease in debtors 12 (33) 49
Deemed disposal of subsidiary - working capital impact 205
Net cash used in operating activities (419) (984) (1,547)
Cash flows from investing activities
Payments for deferred exploration expenditure (202) (919) (2,417)
Payments for tangible fixed assets - (20) (20)
Deemed disposal of subsidiary - cash impact (98) - -
Net cash used in investing activities (300) (939) (2,437)
Cash flows from financing activities
Proceeds from issue of shares and warrants - - 522
Cost of issue - - (30)
Group net proceeds from subsidiary issue shares 322 - -
Finance expense (1) (1) -
Net cash generated from financing activities 321 (1) 492
Net increase in cash and cash equivalents (398) (1,924) (3,492)
Cash and cash equivalents at beginning of period 456 3,948 3,948
Cash and cash equivalents at end of period 58 2,024 456
NOTES TO THE HALF-YEARLY FINANCIAL INFORMATION
1. Basis of preparation
The Group consolidates the financial statements of the Company and its
subsidiary undertakings.
The financial information has been prepared under the historical cost
convention in accordance with UK-adopted International Financial Reporting
Standards ("IFRS"), International Accountant Standards ("IAS") and IFRS
Interpretations Committee ("IFRIC") interpretations. The financial information
set out in this half-yearly report does not constitute statutory accounts as
defined in Section 434 of the Companies Act 2006. The same accounting
policies, presentation and methods of computation are followed in this interim
condensed consolidated report as were applied in the Group's annual financial
statements for the year ended 30 November 2022. The auditor's report on those
financial statements was unqualified and did not contain any statements under
section 498(2) or section 498(3) of the Companies Act 2006.
2. Taxation
No charge for corporation tax for the period has been made due to the expected
tax losses available.
3. Earnings per share
Earnings per share is calculated by dividing the profit attributable to
ordinary shareholders of £2,182,000 (May 2022: loss of £592,000; November
2022: loss of £2,039,000) by the weighted average number of shares of
7,121,568,996 in issue during the period (May 2022: 6,404,645,919; November
2022: 6,476,717,573).
Diluted earnings per share is calculated by dividing the profit attributable
to ordinary shareholders of £2,182,000 by the weighted average number of
shares and warrants in issue during the period, being 7,831,499,826.
In prior periods the diluted profit per share calculation was identical to
that used for basic loss per share as the exercise of warrants would have had
the effect of reducing the loss per ordinary share and therefore was not
dilutive.
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