REG - Alien Metals Limited - Interim Results 2022
27/09/2022 07:01
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RNS Number : 6873A Alien Metals Limited 27 September 2022
Trading Symbols
AIM: UFO
FWB: I3A1
27 September 2022
Alien Metals Ltd
("Alien" or "the Company")
Unaudited interim results for the six months ended 30 June 2022
Alien Metals Ltd (LSE AIM:UFO), a global minerals exploration and development
company, is pleased to announce its financial results for the six months ended
30 June 2022. The full interim results, with accompanying Notes, are
available on the Company's website www.alienmetals.uk
(http://www.alienmetals.uk) .
Roderick McIllree, Executive Chairman of Alien, commented: "After being
appointed Executive Chairman in September of this year, I am pleased to share
with shareholders the interim results for the first six months of 2022. This
half year has seen significant progress across a number of projects with
several exciting developments within our portfolio of precious and base metal
commodities. The acquisition of the Munni Munni Platinum Group Metal Project
and 100% of the Vivash Gorge Iron Ore Project have been notable highlights in
the Company's strategy to continue to expand and diversify its assets.
"At our Hancock Iron Ore Project, the Company received highly positive results
confirming High-Grade Direct Shipping Ore (DSO) at a grade of 62.7%, with
production being targeted for 2023. Given the increasing global demand for
sources of green steel, sources of high-grade iron ore with lower energy
requirements to get them to market will be of great value. Samples of the
product have been sent to potential offtake partners, with Alien's subsidiary
(The Iron Ore Company of Australia) entering into advanced discussions with a
number of parties attracted by the low-risk nature of this project.
"The 100% acquisition of the Vivash Gorge Project announced in June 2022
further solidifies our interest in Western Australia, widely considered as one
of the best regions for mining globally. The Elizabeth Hill Project,
historically one of Australia's highest-grade silver mines, continues to hold
promise, with extremely high-grade assays for silver, as well as base meals,
being returned.
"At our Mexico projects, operations were advanced at both the San Celso and
Donovan 2 projects. Although post-period end the Company announced that
operations would not continue at San Celso, drilling at Donovan 2 did identify
a 34m anomalous zinc in hole DONDD-A04; and Alien will continue to advance
this project, as enough indicators are present to suggest a potentially larger
zone of mineralisation. Although this remains early in the development
process, we will continue to review the next phase of activity with great
optimism that this will be a successful project for the Company.
"We have been extremely encouraged with Alien's progress across our various
projects during this half-year. The Company aims to continue to increase our
portfolio of diverse commodities across a range of geographies and looks
forward to updating shareholders in due course."
Bill Brodie Good, CEO & Technical Director commented: "We are pleased to
have found DSO Grade product of iron ore at our Hancock Project. An initial
bulk sample from the Ridge C Resource confirmed a Pilbara Fines product at a
grade 62.7% Fe, with very low impurities, less than 4.1% silica content, 2,77%
Aluminium content and 0.1% Phosphorus content respectively. This is a
significant discovery for the overall project economics, with this purer grade
of iron ore greatly aiding to keep the Capex and Opex of the project low.
Furthermore, test work indicated a potential for a Lump yield which could
command a premium price over the fines above 62% Fe. The initial Inferred JORC
compliant resource remains at 10.4Mt @ 60.4% Fe with a further highly
anomalous 3km of new ridge targets still to be drill tested, underpinning the
potential of this project. We are continuing to progress towards production
commencing in 2023.
"At Elizabeth Hill, a 1,991m diamond and Reverse Drilling programme has
confirmed that further high-grade silver and base metals mineralisation have
been intersected. Silver assays have been particularly impressive, with
highlights including 9.7m @ 8,326 g/t Ag (267oz/t Ag) from 15m in drillhole
21EHDD003, 24.8m @ 829 g/t Ag (27oz/t Ag) from 2m including 11.7m @ 1,735 g/t
Ag (56oz/t Ag) and 1.7m @ 19,865g/t Ag (639oz/t Ag) from 23m, in drillhole
21EHDD001 and 8m @4233 g/t Ag from 66m in drill hole AMEHRC009. Furthermore,
the 2m @ 1,550 g/t Ag from 108m in drill hole AMEHRC012 could indicate a
possible repetition of the Elizabeth Hill silver orebody. Elizabeth Hill's
value is further underpinned by its commodity diversity, also showing assays
of copper, nickel, iron, and zinc. We are currently working with our technical
consultants to gain a better understanding of this target ahead of a follow-up
exploration programme.
"Although the Company were disappointed with not being able to secure access
to advance the San Celso Project, in Mexico, the results from a drilling
program conducted earlier this year returned some low level anomalous
intersections at Donovan 2 that the Company are keen to follow up on. We
remain optimistic for a larger zone of mineralisation to be discovered.
"Having also raised gross proceeds of approximately £1.5 million in early
September the Company is in a strong position to push ahead with additional
critical exploration work in the coming months to continue to add value to all
projects."
Strategy
Alien's objective is to continue to be a project generator with a
multi-commodity portfolio focussed on key commodities related to the global
demands for green commodities with projects in jurisdictions with established
mining communities, stable political backgrounds, and where strong operational
controls can be assured.
The Company has retained consultants who have significant exploration and
mining experience and have worked with the company for many years. Alien has
built an excellent technical team in Australia and using specialist
consultants has access to a wide and engaged technical team to develop the
Iron Ore assets via the wholly owned subsidiary Iron Ore Company of Australia
(IOCA) and the diverse and highly prized Munni Munni project.
Alien's objective is to create a multi-commodity portfolio of mining projects
in jurisdictions with established mining communities, stable political
backgrounds, and where strong operational controls can be assured.
Aliens' geological experts assess and identify projects for the potential to
host significant economic mineralised systems. Wherever possible, the projects
are acquired on a low-cost option basis whilst preliminary exploration is
undertaken to assess the merits of further work.
The Company routinely evaluates mining projects in a wide array of world-class
mining jurisdictions including Mexico, Australia, and Europe. Our evaluations
have confirmed that the Munni Munni and Vivash Gorge projects have met our
criteria leading to their subsequent acquisitions.
Where preliminary studies evidence sufficient mineralisation, increasingly
comprehensive studies will be undertaken with a view to delineating a
compliant mineral resource estimate in readiness for the potential sale of the
asset to a producing mining company, at which time a significant premium over
its acquisition and development cost may be justified.
Financial highlights
As at 30 June 2022, the Company had total assets of US$16.9 million (2021:
US$8.7 million), of which US$3.0 million (2021: US$3.7 million) was cash. The
Company had total liabilities of US$0.9 million (2021: US$0.2 million), of
which US$0.9 million were current liabilities (2021: US$0.2 million).
In the six months ended 30 June 2022 the Company made an operating loss of
US$1.4 million (2021: US$0.8 million) and a loss per share of US$0.031
(2021: US$0.024).
Overview of operations
During 2022, the Company has undertaken multiple exploration programs across
Australia and Mexico, including: metallurgical test work, bulk sampling,
trenching and RC drilling.
As of 30 June 2022, the Company holds a 51% interest (with the option to
become 90% following a post-period end Option Agreement announced on the 24
August 2022) in the Hamersley Iron Ore Projects in Australia, a 100% interest
in the high-grade Elizabeth Hill Silver project in Australia, both the
recently acquired Munni Munni PGM deposit and the Vivash Gorge Iron Ore
project in Australia, and 8 fully owned mining concessions in Mexico. Alien
also holds an exploration licence around the Citroen Greenland zinc project.
Iron Ore Projects
Hancock and Brockman Projects - (51%, with an option to acquire 90%)
The Hancock Ranges Iron Ore Project. E47/3954, is within 20kms of the Newman
township and borders licences held by Fortescue Metals Group, Hancock
Prospecting, BHP Billiton (Mount Whaleback), Hope Downs and Brockman Mining,
and is the first of two licences that make up the Hamersley Iron Ore Project
(the "Hamersley Project").
The second of the Hamersley Project licences is the Brockman Tenement
(E47/3953) and is 95km's northwest of the Tom Price township and borders
licences held by Fortescue Metals Group and Rio Tinto. The Brockman tenement
hosts part of the historic BHP Deposit 20 iron ore target and the historic BHP
Deposit 19 Fe target sits on the south-eastern boundary.
At Hancock in June 2022, Direct Shipping Ore Grades were confirmed at a grade
of 62.7% Fe from the initial bulk sample from Ridge C Resource. Test work also
indicated a potential for a Lump yield, with the potential to command a
premium price. Through the wholly owned subsidiary, The Iron Ore Company of
Australia, there are advanced discussions for an offtake agreement.
At Brockman further to the successful Heritage Survey and Ethnological Surveys
in late 2021 the Company was granted for the necessary drilling permits. A
maiden drilling programme at Brockman is planned.
Vivash Gorge
In June 2022, Alien announced the 100% acquisition of the Vivash Gorge Iron
Ore Project, Western Australia from Zenith Minerals. The Vivash Gorge project
E47/3071 is located approximately 80km west of the Tom Price Township in the
southern section of the Brockman Syncline. Fortescue Mining Group (FMG) has
defined a High-Grade Iron Ore Mineral Resource of 28Mt @ 58.8% Fe (1) over
neighbouring ground (the "Vivash SW Resource"), which abuts the eastern
central boundary of the Vivash Gorge tenement with the closest hole returning
70m @ 60.5% Fe from surface (hole VV0111) (1) and no work has to date been
done within the Vivash Gorge tenement to test the extension potential of this
ore body into the tenement. The Company will be providing updates on the
progress at the site in the future.
1.Source : Mineralisation Report 29 September 2020 In support of application
for mining lease, section 49 conversion of prospecting licence 47/1672 by FMG
Pilbara Pty Ltd within the Vivash South Iron Ore Project, Pilbara)
PGE, Silver, Base Metals
Elizabeth Hill (100%)
The Elizabeth Hill project is situated approximately 45km south of Karratha in
the 61,000km(2) Achaean Pilbara Block of the Pilbara Craton. The Project is
well located, lying 40km from the deep-water port at Dampier and 8km from rail
infrastructure.
The Elizabeth Hill Silver Project was mined between 1998 and 2000 via
underground mining, primarily between the 62m and 102m levels. Silver
production totalled approximately 16,800 tonnes of ore grading 2,195 g/t Ag
(70.24 oz/t Ag) generating 1,170,000 ounces Ag, including some very large
specimens of native silver.
In January 2022, the Group announced initial results from the drilling
programme undertaken in Q4 2021. Highlights included spectacular grades, such
as: 9m @ 8,326g/t silver from 15m, and 24.8m @ 829g/t silver from 2m.
Munni Munni PGE Project (100%)
On 22 March 2022, the Group announced that it had completed the acquisition of
100% of the Munni Munni PGE Project, which is strategically located 5km south
of the Elizabeth Hill Silver project. Munni Munni hosts the largest ultramafic
intrusion in the West Pilbara and is one of the biggest undeveloped primary
Platinum Group Elements ('PGE') Resources in Australia. The historic
non-compliant JORC 2004 Resource estimate* implied 24Mt @ 2.9g/t Platinum
Group Element (PGE) and gold for 2.2Moz PGE, with around 95% of this resource
estimate in the Measured and Indicated categories. The historic resource hosts
1.14Moz palladium, 0.83Moz platinum, 152Koz gold and 76Koz rhodium.
ELA 47/4422 is a 117km2 tenement which wraps around the Elizabeth Hill Silver
Mining Lease and includes a portion of the Munni Munni intrusive complex to
the south and southwest. The highly prospective Munni Munni fault strikes
north-south through the tenement and into the Elizabeth Hill Mining Lease.
There are also some strike length of the Hunters Reef, a Platinum Group
Element target geological feature related to the Munni Munni Deposit defined
in the south of this ELA.
*Resource published under 2004 JORC code and accordingly is not reported under
a Standard under the AIM Rules. The historic resource figures are derived from
the announcement s on the ASX published by Helix Resources on 3rd April 2003
Los Campos Silver Project
The Los Campos project comprises four concessions covering an area of
approximately 500 hectares and is located on the south side of the city of
Zacatecas and only 3km from the Endeavour Silver El Compas silver mine. The
property contains at least two known veins: the Los Campos vein and the San
Rafael vein, which were both partially mined historically.
The Los Campos vein system has been developed along a strike distance of 3.3km
and to depths exceeding 100m. Geological mapping and sampling discovered
additional veins running either parallel or nearly parallel to the Los Campos
vein.
San Celso Silver Project
The 88-hectare San Celso project is located in the historic mining district of
Pánfilo Natera-Ojocaliente. It contains two highly mineralised veins: the
San Celso and Las Cristinitas veins which were also partially mined
historically. Work carried out during 2019 and 2020 confirmed the high-grade
of these veins. Alien has currently been denied access to progress this
project.
Donovan 2 Copper Project
The Company's 750-hectare Donovan 2 project is located to the southeast of
Zacatecas city and in close proximity to other wholly owned projects within
Alien's portfolio within the Mexican precious and base metals belt. The Teck
Resources San Nicolás copper zinc deposit and Minera Frisco El Coronel gold
mine are both located within 25km.
Alien's preliminary exploration programme on this project, has identified
several areas that exhibit pathfinder indicators of volcanogenic massive
sulphide (VMS)-style mineralisation, and ground magnetic geophysics and
induced polarisation have confirmed indications of sub-surface VMS-style
mineralisation.
In May 2022 an initial drilling program at Donovan 2 intersected weak but
encouraging mineralised zones in hole DONDD-A04 which identified zone of
alteration, which is considered highly promising and the Company is reviewing
further work to follow up this intersection.
Greenland Zinc Project
Alien was successfully granted a 208km(2) exploration licence in northern
Greenland, surrounding the world-class Citronen zinc-lead project owned by
Ironbark Zinc Limited in mid-October 2020 running until December 2023. It is
considered one of the world's largest undeveloped zine projects, with an
estimated 13bn pounds of contained zinc and lead metal.
The Company is currently in the process of understanding the tenement further
to aid maiden exploration.
Future outlook
The Company is looking forward to further advancing its existing portfolio of
prospective silver and copper/gold projects in Mexico and silver and iron ore
projects in Australia, as well as seeking joint venture opportunities. Reviews
are ongoing for adding projects to the Company portfolio and finding partners
for existing projects to support future work and development.
Notice of no auditor review of interim financial information
The interim unaudited consolidated financial information for the six-month
period ended 30 June 2022 has been prepared by and is the responsibility of
the Company's management.
This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) 596/2014.
For further information please visit the Company's website at
www.alienmetals.uk, or contact:
Rod McIllree, Executive Chairman
Email: rcm@alienmetals.uk
Bill Brodie Good, CEO
Tel: +44 20 3811 2144
Beaumont Cornish Limited (Nomad)
James Biddle / Roland Cornish
(about%3Ablank) www.beaumontcornish.com (https://www.beaumontcornish.com/)
Tel: +44 (0) 207 628 3396
Turner Pope Investments (TPI) Limited (Joint Broker)
Andrew Thacker / James Pope
Tel: +44 (0) 20 3657 0050
WH Ireland Ltd (Joint Broker)
Harry Ansell / Katy Mitchell
Tel +44 (0) 207 220 1666
Yellow Jersey PR (Financial PR)
Sarah Hollins / Laurie Gellhorn / James Lingfield
alienmetals@yellowjerseypr.com
Tel: +44 (0) 20 3004 9512
Notes to Editors
Alien Metals Ltd is a mining exploration and development company listed on the
AIM market of the London Stock Exchange (AIM: UFO). The Company's focus is on
precious and base metal commodities, with its operations located in proven
mining jurisdictions and it has embarked upon an acquisition-led strategy
headed by a high-quality geological team to build a strong portfolio of
diversified assets. In 2019, the Company acquired 51% of the Brockman and
Hancock Ranges high-grade (Direct Shipping Ore) iron ore projects and executed
an option agreement to increase its interest to 90% in August 2022.
The Company acquired 100% of the Elizabeth Hill Silver Project, which consists
of the Elizabeth Hill Historic Silver Mine Mining Lease and the 115km2
exploration tenement around the mine.
In March 2022 the Company acquired 100% of the former joint venture interest
in the Munni Munni Platinum Group Metals and Gold Project in the West Pilbara,
Western Australia, one of Australia's major underexplored PGE and base metals
projects. Munni Munni holds a historic deposit containing 2.2Moz 4E PGM:
Palladium, Platinum, Gold, Rhodium.
The Company also holds two silver projects, San Celso and Los Campos, located
in Zacatecas State, Mexico, Mexico's largest silver producing state, which
produced over 190m Oz of silver in 2018 alone, accounting for 45% of the total
silver production of Mexico for that year. The Company also holds a Copper
Gold project in the same region, Donovan 2.
Forward-Looking Information
This press release contains certain "forward-looking information". All
statements, other than statements of historical fact that address activities,
events or developments that the Company believes, expects or anticipates will
or may occur in the future are deemed forward-looking information.
This forward-looking information reflects the current expectations or beliefs
of the Company based on information currently available to the Company as well
as certain assumptions. Forward-looking information is subject to a number of
significant risks and uncertainties and other factors that may cause the
actual results of the Company to differ materially from those discussed in the
forward-looking information, and even if such actual results are realised or
substantially realised, there can be no assurance that they will have the
expected consequences to, or effects on the Company.
Any forward-looking information speaks only as of the date on which it is made
and, except as may be required by applicable securities laws, the Company
disclaims any intent or obligation to update any forward-looking information,
whether as a result of new information, future events or results or otherwise.
Although the Company believes that the assumptions inherent in the
forward-looking information are reasonable, forward-looking information is not
a guarantee of future performance and accordingly undue reliance should not be
put on such information due to the inherent uncertainty therein.
Alien Metals Ltd
Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2022
(Tabular amounts expressed in thousands of US dollars unless otherwise stated)
Unaudited Unaudited Audited
six months ended six months ended year ended
30 June 30 June 31 December
2022 2021 2021
Continuing operations
Administrative expenses (1,368) (815) (2,255)
Total administrative expenditure (1,368) (815) (2,255)
Operating loss (1,368) (815) (2,255)
Net interest (expense)/ income - 1 (3)
Loss from continuing operations (1,368) (814) (2,258)
Loss for the period attributable to equity shareholders of the parent (1,368) (814) (2,258)
Other comprehensive income
Foreign exchange translation differences recognised directly in equity (1,819) 175 (24)
Other comprehensive income for the year (1,819) 175 (24)
Total comprehensive income for the year attributable to equity shareholders of (3,187) (639) (2,282)
the parent
Basic and diluted loss per share (US cents/share) (note 5) (0.031) (0.024) (0.065)
The accompanying notes are an integral part of these consolidated financial
information.
The consolidated financial information has been approved by the Company's
directors.
Alien Metals Ltd
Consolidated Statement of Financial Position
For the six months ended 30 June 2022
(Tabular amounts expressed in thousands of US dollars)
Note Unaudited Unaudited Audited
30 June 30 June 31 December
2022 2021 2021
Assets
Non-current assets
Intangible assets 2 12,610 4,818 5,939
Assets under construction 426 1 291
Financial asset investments - 40 -
Right of use asset 67 - 131
Total non-current assets 13,103 4,859 6,361
Current assets
Trade and other receivables 721 152 265
Cash and cash equivalents 3,063 3,725 6,431
Total current assets 3,784 3,877 6,696
Total assets 16,887 8,736 13,057
Equity attributable to equity shareholders of the parent
Share capital 3 77,122 65,200 70,422
Warrant reserve 3 274 867 865
Share-based payment reserve 3 1,367 1,057 1,179
Equity investment reserve - (232) -
Foreign exchange translation reserve 3 406 2,424 2,225
Accumulated losses (63,179) (60,768) (62,420)
Total equity 15,990 8,548 12,271
Liabilities
Trade and other payables 830 188 655
Short-term lease liability 67 - 112
Total current liabilities 897 188 767
Long-term lease liability - - 19
Total non-current liabilities - - 19
Total liabilities 897 188 786
Total equity and liabilities 16,887 8,736 13,057
The accompanying notes are an integral part of these consolidated financial
information.
The consolidated financial information has been approved by the Company's
directors.
Alien Metals Ltd
Consolidated statement of cash flows
For the six months ended 30 June 2022
(tabular amounts expressed in thousands of US dollars)
Unaudited Unaudited Audited
six months ended six months ended year ended
30 June 30 June 31 December
2022 2021 2021
Cash flows from operating activities
Loss before tax from continuing operations (1,368) (814) (2,258)
Adjustments for non-cash items:
Exchange difference 6 70 174
Net interest expense / (income) - (1) 3
Equity-settled share-based payment transactions 206 25 166
Operating cash flows before movements in working capital (1,156) (720) (1,915)
(Increase) in trade and other receivables (457) (9) (129)
Increase in trade and other payables 174 80 351
Cash used in operating activities (1,440) (651) (1,692)
Cash flows from investing activities
Interest received/ (paid) - (1) (3)
Expenditure on assets under construction (135) - (291)
Purchase of intangible assets (1,372) (1,159) (2,432)
Proceeds from sale of financial assets - - 40
Cash used in investing activities (1,507) (1,160) (2,686)
Cash flows from financing activities
Proceeds from issue of share capital - - 5,503
Proceeds from exercised options and warrants 700 18 40
Issue costs - - (303)
Cash from financing activities 700 18 5,240
Net (decrease)/increase in cash and cash equivalents (2,246) (1,793) 862
Cash and cash equivalents at beginning of period/year 6,431 5,627 5,627
Effect of exchange rate fluctuations on cash held (1,121) (109) (59)
Cash and cash equivalents at end of period/year 3,063 3,725 6,431
The accompanying notes are an integral part of these consolidated financial
information.
The consolidated financial information has been approved by the Company's
directors.
Alien Metals Ltd
Consolidated Statement of Changes in Equity
For the six months ended 30 June 2022
(Tabular amounts expressed in thousands of US dollars)
For the six months ended 30 June 2022
Unaudited Share Warrant reserve Share Foreign exchange translation reserve Accumulated losses Total
capital based Equity investment reserve
payment reserve
Balance: 1 January 2022 70,422 865 1,179 - 2,225 (62,420) 12,271
Loss for the period - - - - - (1,368) (1,368)
Foreign exchange - - - - (1,819) - (1,819)
Total comprehensive income - - - - (1,819) (1,368) (3,187)
Transactions with shareholders:
Shares issued for cash - - - - - - -
Share issue costs - - - - - - -
Project acquisitions (non-cash) 5,999 - - - - - 5,999
Share options granted - - 206 - - - 206
Exercise of options 10 - (9) - - 9 10
Exercise of warrants 691 (484) - - - 484 691
Lapsed warrants and options - (107) (9) - - 116 -
Total transactions with shareholders 6,700 (591) 188 - - 609 6,906
Balance: 30 June 2022 77,122 274 1,367 - 406 (63,179) 15,990
For the six months ended 30 June 2021
Unaudited Share Warrant reserve Share Foreign exchange translation reserve Accumulated losses Total
capital based Equity investment reserve
payment reserve
Balance: 1 January 2021 65,182 872 1,033 (232) 2,249 (59,957) 9,146
Loss for the period - - - - - (814) (814)
Foreign exchange - - - - 175 - 175
Total comprehensive income - - - - 175 (816) (639)
Shares issued - - - - - - -
Share issue costs - - - - - - -
Share options issued - - 24 - - - 24
Warrants issued 18 (5) - - - 5 18
Balance: 30 June 2021 65,200 867 1,057 (232) 2,424 (60,768) 8,549
For the year ended 31 December 2021
Audited Share Warrant reserve Share As restated Accumulated losses As restated
capital based Equity investment reserve Foreign exchange translation reserve Total
payment reserve
Balance: 1 January 2021 65,181 872 1,033 (232) 2,249 (59,957) 9,146
Loss for the year - - - - - (2,258) (2,258)
Foreign exchange - - - - (24) - (24)
Total comprehensive income - - - - (24) (2,258) (2,282)
Disposal of equity investment FVTOCI-movement in reserves - - - 232 - (232) -
Transactions with shareholders:
Shares issued for cash 5,503 - - - - - 5,503
Share issue costs (303) - - - - - (303)
Exercise of share options 17 - (20) - - 20 17
Share based payment - - 166 - - - 166
Project acquisitions 1 - - - - - 1
Exercise of warrants 23 (7) - - - 7 23
Total transactions with shareholders 5,241 (7) 146 - - 27 5,407
Balance: 31 December 2021 70,422 865 1,179 - 2,225 (62,420) 12,271
The accompanying notes are an integral part of these consolidated financial
information.
The consolidated financial information has been approved by the Company's
directors.
Alien Metals Ltd
Notes to Consolidated Financial Information (Unaudited)
For the six months ended 30 June 2022
(Tabular amounts expressed in thousands of US dollars unless otherwise stated)
1. Basis of preparation, going concern and adequacy of project
finance
This interim unaudited consolidated financial information for Alien Metals has
been prepared in accordance with International Financial Reporting Standards
as adopted by the EU.
Alien is a company domiciled in the British Virgin Islands. The consolidated
financial information of the Company comprises financial information of the
Company and its subsidiaries (together referred to as the "Group"). The Group
is primarily involved in the exploration and development of mineral resource
assets.
The IFRS financial information for the six months ended 30 June 2022 has been
prepared on the basis of the accounting policies that the Company expects to
adopt for the 2022 year-end. The accounting policies are in accordance with
IFRS issued by the International Accounting Standards Board as adopted for use
in the European Union. In preparing the results for the six months ended 30
June 2022, the Company has not applied IAS 34, 'Interim Financial Reporting'
as this accounting standard is not mandatory for the Group.
The accounting policies and methods of computation used in the preparation of
the interim unaudited consolidated financial information are the same as those
described in the Company's audited consolidated financial statements and notes
thereto for the year ended 31 December 2021 and which are expected to be
adopted in the annual statutory financial statements for the year ended 31
December 2022. In the opinion of the management, the interim unaudited
consolidated financial information includes all adjustments considered
necessary for fair and consistent presentation of financial information. The
interim unaudited consolidated financial information should be read in
conjunction with the Company's audited financial statements and notes for the
year ended 31 December 2021. The consolidated accounts for the year ended 31
December 2021 were approved by the Board of directors on 26 September 2022.
The interim unaudited consolidated financial information is presented in
United States dollars as the Company believes it to be the most appropriate
and meaningful currency for investors. The functional currencies of the
Company and its subsidiary in Mexico, Compañía Minera Estrella de Plata SA
de CV ("CMEP"), are pounds sterling and Mexican pesos respectively. Functional
currency of all three Australia based subsidiaries A.C.N. 643 478 371 Pty Ltd,
Iron Ore Company of Australia Pty Ltd, and Alien Metals Australia Pty Ltd is
Australian Dollar.
Significant Subsidiaries Country of incorporation and operation Principal activity Alien Metals Ltd effective interest
30 Jun 2022 31 Dec 2021
Compañía Minera Estrella de Plata S.A. de C.V. Mexico Mining exploration 100% 100%
Arian Silver Corporation (UK) Ltd England and Wales Holding 100% 100%
Arian Silver (Holdings) Limited England and Wales Holding 100% 100%
A.C.N. 643 478 371 Pty Ltd Australia Mining exploration 100% 100%
Iron Ore Company of Australia Pty Ltd Australia Mining exploration 100% 100%
Alien Metals Australia Pty Ltd Australia Mining exploration 100% 100%
The financial information has been prepared on a going concern basis. The
directors regularly review cash flow forecasts to determine whether the Group
has sufficient cash reserves to meet future working capital requirements and
discretionary business development opportunities including exploration
activities.
The Group's assets are at an early stage and in order to meet financing
requirements for their development previously the Company has raised equity
funds in several discrete share placements, which is a common practice for
junior mineral exploration companies. Although the Company has been successful
in the past in raising equity finance, there can be no assurance that the
funding required by the Group will be made available to it when needed or, if
such funding were to be available, that it would be offered on reasonable
terms. The terms of such financing might not be favourable to the Group and
might involve substantial dilution to existing shareholders.
The directors currently believe that the Group has adequate resources for the
foreseeable future or access to such resources in order to enable them to
continue to prepare the Company's financial information on a going concern
basis. In reaching this conclusion, the directors have reviewed cash flow
forecasts to the end of September 2023 and considered their ability to reduce
expenditure in the event that further fundraisings are not completed within
that timeframe and have concluded they can make such savings as may be
necessary in order to operate within the funds currently available to them.
2. Intangible assets - deferred exploration and evaluation costs
The Group's deferred exploration and evaluation costs comprise costs directly
incurred in exploration and evaluation as well as the cost of maintaining
mineral licences. They are capitalised as intangible assets pending the
determination of the feasibility of the project. When the decision is taken to
develop a mine, the related intangible assets are transferred to property,
plant and equipment. Where a project is abandoned or is determined not
economically viable, the related costs are written off. Intangible assets
meeting the relevant recognition criteria are initially measured at cost,
subsequently measured at cost model.
The recoverability of deferred exploration and evaluation costs is dependent
upon a number of factors common to the natural resource sector. These include
the extent to which the Group can establish economically recoverable reserves
on its properties, the ability of the Group to obtain necessary financing to
complete the development of such reserves and future profitable production or
proceeds from the disposition thereof.
Intangible assets for the six months ended 30 June 2022 are detailed in the
following table and relate entirely to deferred exploration and development
costs:
Unaudited unaudited Audited
30 Jun 30 Jun 31 Dec
2022 2021 2021
US$000s US$000s US$000s
Cost
Opening balance 1 January 5,939 3,641 3,641
Additions for the period 7,370 1,159 2,432
Foreign exchange (699) 18 (134)
Closing balance 12,610 4,818 5,939
3. Share capital and reserves
Share capital
The Company is authorised to issue an unlimited number of common shares of
no-par value.
Changes in share capital for the six months ended 30 June 2022 are as follows:
Number of Shares Amount
'000 US$000s
Opening balance 1 January 2021 (audited) 3,420,791 65,181
Shares issued 4,326 19
Closing balance 30 June 2021 (unaudited) 3,425,117 65,200
Balance 1 January 2022 (audited) 3,902,182 70,422
Shares issued 860,155 6,700
Closing balance 30 June 2022 (unaudited) 4,762,337 77,122
Six months ended 30 June 2022
Increase in share capital Date of transaction Number of shares issued Exercise price, £ Cash raised, US$
Warrants exercised (cash) 21/01/2022 202,247,000 0.0015 412,523
Options exercised (cash) 21/01/2022 1,100,000 0.0025 3,739
Warrants exercised (cash) 10/02/2022 1,111,111 0.0030 4,511
Warrants exercised (cash) 10/02/2022 816,666 0.0025 2,763
JVA Windfield - project investment (non-cash) 23/02/2022 50,000,000 0.00775 526,574
Platina Resources Limited -project investment (non-cash) 22/03/2022 138,703,396 0.00825 1,506,818
Artemis Resources Limited - project investment (non-cash) 22/03/2022 358,617,818 0.00825 3,895,881
Warrants exercised (cash) 22/03/2022 66,666,666 0.0019 166,795
Warrants exercised (cash) 22/03/2022 24,160,661 0.0025 79,537
Warrants exercised (cash) 22/03/2022 2,450,000 0.0025 8,065
Warrants exercised (cash) 14/03/2022 3,333,333 0.0030 13,050
Warrants exercised (cash) 13/04/2022 14,000 0.0025 46
Warrants exercised (cash) 13/04/2022 122,267 0.0025 397
Warrants exercised (cash) 13/04/2022 984,375 0.0025 3,200
Options exercised (cash) 26/04/2022 2,000,000 0.0025 6,370
Acquisition 100% Vivash Gorge Iron Ore Project (non-cash) 20/06/2022 7,827,883 0.00727 69,397
Total 860,155,176 6,699,666
3. Share capital and reserves (continued)
Warrant reserve
The number and weighted average exercise price for the period ended 30 June
2022 are set out in the table below:
Outstanding Weighted average exercise price
(000's)
Opening balance 1 January 2021 (audited) 395,322 £0.0024
Issued (4,226) £0.0024
Closing balance 30 June 2021 (unaudited) 391,096 £0.0024
Closing balance 31 December 2021 (audited) 389,620 £0.0024
Exercised (301,906) £0.0017
Lapsed (48,281) £0.0028
Closing balance 30 June 2021 (unaudited) 39,433 £0.0068
Share based payment reserve
The share-based payment reserve arises on the grant of share options to
directors, employees and other eligible persons under the share option plan.
A summary of the changes in the Group's contributed surplus for the six months
ended 30 June 2022 is set out below:
Unaudited Unaudited Audited
30 Jun 30 Jun 31 Dec
2022 2021 2021
US$000s US$000s US$000s
Opening balance 1 January 1,079 1,033 1,033
Fair value of share options 206 24 166
Exercise of share options (9) - (20)
Share options lapsed (9) - -
Closing balance 1,367 1,057 1,179
Foreign exchange translation reserve
The translation reserve comprises foreign exchange differences arising from
the translation of the financial statements of operations that do not have a
US dollar functional currency. Exchange differences arising are classified as
equity and transferred to the Group's translation reserve.
Accumulated losses
Accumulated losses contain losses incurred in the current and prior years.
4. Incentive share options
A summary of the Company's share options as at 30 June 2022 is set out below:
Outstanding shares Exercisable shares
Issued Exercise price Expiry
2018 13,142,373 13,142,373 £0.0025 14-May-23
2019 12,342,509 12,342,509 £0.0025 28-Mar-24
2019 3,000,000 3,000,000 £0.0022 28-Mar-24
2019 3,000,000 3,000,000 £0.0030 28-Mar-24
2019 4,000,000 4,000,000 £0.0045 28-Mar-24
2020 18,750,000 18,750,000 £0.0045 30-Aug-23
2020 18,750,000 18,750,000 £0.0050 30-Aug-23
2020 22,500,000 22,500,000 £0.0055 30-Aug-23
2021 10,000,000 10,000,000 £0.0100 21-Oct-24
2021 10,000,000 10,000,000 £0.0115 21-Oct-24
2021 15,000,000 15,000,000 £0.0145 21-Oct-24
Total 130,484,882 130,484,882
Share options held by directors & PDMR's
Holder Shares Options Exercise price Grant Date Vesting Date Expiry
D J Smith 3,085,627 £0.0025 29 Mar 2019 29 Jun 2019 28 Mar 2024
3,085,627 £0.0025 29 Mar 2019 29 Sep 2019 28 Mar 2024
6,171,255 £0.0025 29 Mar 2019 29 Mar 2020 28 Mar 2024
B Brodie Good 3,000,000 £0.0022 30 Sep 2019 1 Oct 2019 28 Mar 2024
3,000,000 £0.0030 30 Sep 2019 1 Oct 2019 28 Mar 2024
4,000,000 £0.0045 30 Sep 2019 1 Oct 2019 28 Mar 2024
15,000,000 £0.0045 01 Sep 2020 01 Mar 2021 30 Aug 2023
15,000,000 £0.0050 01 Sep 2020 01 Sep 2021 30 Aug 2023
15,000,000 £0.0055 01 Sep 2020 01 Sep 2021 30 Aug 2023
M C Culbert 1,875,000 £0.0045 01 Sep 2020 01 Mar 2021 30 Aug 2023
1,875,000 £0.0050 01 Sep 2020 01 Sep 2021 30 Aug 2023
3,750,000 £0.0055 01 Sep 2020 01 Sep 2021 30 Aug 2023
( )
J L Battershill 10,000,000 £0.0100 22 Oct 2021 22 Apr 2022 21 Oct 2024
10,000,000 £0.0115 22 Oct 2021 22 Apr 2022 21 Oct 2024
15,000,000 £0.0145 22 Oct 2021 22 Apr 2022 21 Oct 2024
5. Loss per share
The calculation of basic loss per share as at 30 June 2022, 31 December 2021
and 30 June 21 was based on the numbers is set out below:
Unaudited Unaudited Audited
30 Jun 30 Jun 31 Dec
2022 2021 2021
Loss attributable to common shareholders, US$000s 1,368 814 2,258
Weighted average number of common shares outstanding during the period 4,442,460,050 3,423,885,046 3,476,524,868
Basic and diluted loss per share in US cents 0.031 0.024 0.065
6. Post balance sheet events
On 28 July 2022 and 7 September 2022, the Company announced that with
immediate effect, Mr Roderick ("Rod") McIllree will join the Company as
Executive Chairman. In conjunction with the proposed appointment of Rod, Bill
Brodie Good ("Bill") stepped down as a director of the Company with immediate
effect. Bill remains as a non-board CEO to focus on operational matters.
As part of the appointment, the Company proposed to issue Rod a total of
230,000,000 options (representing approximately 4.83% of the Company's issued
share capital) over the common shares of the Company under the terms of the
Company's EMI Share Option Plan.
On 24 August 2022, the Company announced that it has executed a binding put
and call option agreement ("Option Agreement") with Windfield Metals Pty Ltd
("Windfield") granting the Company the option to acquire an additional 39%
interest in the Hancock and Brockman DSO iron ore projects ("Projects"). This
arrangement replaces the agreement announced on 20 May 2021, whereby Alien and
Windfield had agreed for Alien to acquire 80% of Windfield, which holds the
other 49% of the Projects, thereby giving Alien an indirect 90% interest. To
exercise the Option, Alien will pay total consideration of £1,794,104, which
consists of a cash payment of £60,000 and the issue of 260,000,000 ordinary
shares at a deemed issue price of £0.0067 pence per share and the issue of
100,000,000 share warrants exercisable at 1 pence each. Alien has an 18-month
period to exercise the Option, although the Company intends to action earlier.
On 31 August 2022, the Company announced that it had, through its wholly owned
subsidiary Iron Ore Company of Australia Pty Ltd ("IOCA"), entered into a
mandate letter providing for an exclusive right to negotiate project funding
and offtake arrangements ("Mandate Letter") with Anglo American (LSE: AAL;
JSE: AGL), in relation to the Hancock iron ore project ("Hancock") located in
the Pilbara, Western Australia. IOCA has granted Anglo American an exclusive
right to negotiate and agree terms with IOCA
for up to US$15 million in funding and 100% of offtake from the Hancock
Project, including: US$10,000,000 in Advance Payment Facility, 100% Offtake
for Sinter Fines and Lump from the Hancock Project, and offtake terms to
include vessel prepayments for up to US$5,000,000 for the first 12 Months.
On 5 September 2022, the Company announced that its wholly owned subsidiary,
Iron Ore Company of Australia Pty Ltd ("IOCA") has entered into a binding
Heads of Agreement with Mallina Exploration Pty Ltd ("Mallina") to acquire a
strategic tenement, currently under application with the Department of Mines,
Industry Regulation and Safety DMRIS, Western Australia (the "Tenement
Interest") bounding the Hancock Project (the "Project") key to the development
of the Project. Alien also announces that it has applied directly for two
additional exploration licences within the Hancock area, ELA47/4605 or
'Hancock West', and ELA47/4817 or 'Hancock Northwest', which provide future
resource growth opportunities.
On 7 September 2022, the Company raised gross proceeds of approximately £1.5
million by means of (i) a placing of new 240,000,000 Common Shares to certain
institutional and other investors at a price of 0.5 pence per share and (ii) a
direct subscription of 60,000,000 shares by certain other investors at a price
of 0.5 pence per share. Additionally, the Company announced that following a
recommendation of the Nomination & Remuneration Committee, it intends to
grant Options over Common Shares to directors and senior management totalling
115,000,000 (being 2.4% of the Company's issued share capital) under the terms
of the Company's EMI Share Option Plan, which also makes provision for the
award of non-EMI share Options.
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