REG - Alkemy Capital Invs. - Interim Results
27/10/2022 07:01
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RNS Number : 2531E Alkemy Capital Investments PLC 27 October 2022
27 October 2022
Alkemy Capital Investments plc
Interim Results for the Six Months Ended 31 July 2022
Alkemy Capital Investments plc ("ALK" or the "Company") (ALK:LSE) (JV2:FRA) is
pleased to present its unaudited financial statements for the 6 months ended
31 July 2022 as extracted from the Company's 2022 Half Year Report which is
now available on the Company website at www.alkemycapital.co.uk.
The interim financial statements are set out below and should be read in
conjunction with the 2022 Half Year Report which contains the notes to the
financial statements.
2022 Financial and Operational Highlights include:
· Tees Valley Lithium officially launched
· Class 4 feasibility study delivered for our lithium hydroxide
processing facility in Teesside
· Met test work confirms ultra-pure battery-grade lithium hydroxide
· Partnerships established with Traxys and Weardale Lithium for
feedstock
· Australia strategy launched
· Key consultants appointed and management positions filled
· Oversubscribed private placement completed
· Partnership established with bp for green hydrogen use
Further information
For further information, please visit Alkemy's website:
www.alkemycapital.co.uk or TVL's website www.teesvalleylithium.co.uk.
-Ends-
Alkemy Capital Investments Plc Tel: 0207 317 0636
Sam Quinn info@alkemycapital.co.uk (about%3Ablank)
Buchanan Tel: +44 (0)20 7466 5000
Bobby Morse/Abigail Gilchrist TVL@buchanan.uk.com (about%3Ablank)
VSA Capital Limited Tel: 0203 005 5000
Andrew Monk (Corporate Broking)
Andrew Raca (Corporate Finance)
Shard Capital Partners LLP Tel: 0207 186 9952
Damon Heath damon.heath@shardcapital.com (about%3Ablank)
Tel: 0207 186 9927
Isabella Pierre isabella.pierre@shardcapital.com (about%3Ablank)
Chairman's Statement
I have great pleasure in presenting our interim results for the period ended
31 July 2022.
Highlights:
· Tees Valley Lithium officially launched
· Class 4 feasibility study delivered for our lithium hydroxide
processing facility in Teesside
· Met test work confirms ultra-pure battery-grade lithium hydroxide
· Partnerships established with Traxys and Weardale Lithium for
feedstock
· Australia strategy launched
· Key consultants appointed and management positions filled
· Oversubscribed private placement completed
· Partnership established with bp for green hydrogen use
Tees Valley Lithium
In February 2022 we announced the formation of a subsidiary called Tees Valley
Lithium Limited ("TVL").
TVL will seek to develop the UK's first lithium hydroxide monohydrate ("LHM")
facility at the Wilton International Chemicals Park located in the Teesside
Freeport, UK.
This transaction and change of strategy constituted a reverse takeover
transaction under the listing rules of the London Stock Exchange and resulted
in Alkemy becoming an operating company.
Although we are still in the early stages, our aim is to build the most
sustainable and significant producer of lithium hydroxide globally, utilising
the advantages of the UK's chemical processing skills, infrastructure, green
energy and legislation.
Class 4 Feasibility Study
In April 2022 we announced the completion of a Class 4 Feasibility Study for
our LHM facility. The LHM facility will process feedstock imported from
various sources to produce 96,000 tonnes of a premium, low-carbon lithium
hydroxide annually, representing around 15% of Europe's projected demand.
The proposed LHM facility is located at the "plug and play" Wilton
International Chemicals Park in the Teesside Freeport, with connections to
100% certified renewable energy.
The study was prepared by Wave International, a leading engineering
consultancy firm with significant experience in developing lithium hydroxide
projects worldwide.
Study highlights:
· 96,000 tonnes annual production of battery grade lithium hydroxide
representing approximately 15% of projected UK and EU demand;
· The facility has been designed to process a range of imported
low-carbon, high value feed sources including lithium sulphate and lithium
carbonate;
· Pre-tax net present value (NPV) of GBP2.8 (US$3.9) billion based on
long-term lithium hydroxide price of US$25,000 per tonne;
· Initial capital cost of GBP216 (US$300) million;
· Gross revenues of GBP49.2 (US$68.4) billion;
· Internal rate of return (IRR) of 35.6%;
· Significant potential to capture by-product value streams.
The project is the first of its kind in the UK, the biggest in Europe and will
when completed be a key supplier to UK and European giga factories, electrical
vehicle and battery storage industries.
Metallurgical test work
In May 2022 we announced the initial results of our ongoing metallurgical
test-work programme. The test-work was performed by a leading technology
provider JordProxa in Australia and independently verified by an
internationally recognised cathode active material manufacturer.
The results demonstrated an ultra-pure battery grade lithium hydroxide from a
low-quality industrial grade (95%) lithium sulphate.
The product specification rivals the prevalent Chinese standard specification
GB/T 26008-2020 D1.
JordProxa further confirmed the ability to upscale to commercial production.
Feedstock and partnerships
During the period we continued to advance our discussions with counterparties
for both feedstock and offtake.
In July 2022 we signed a partnership agreement with Traxys, a leading global
physical trader and merchant in metals and natural resources, with annual
turnover in excess of USD 8 billion. Under the terms of the agreement, Traxys
will source and supply lithium feedstock for our processing facilities.
In August 2022 we announced the signing of an MoU with Weardale Lithium as a
potential feedstock supplier from its lithium project in the North-East of
England.
We are currently in advanced discussions with several other potential
suppliers of spodumene concentrate and crude lithium carbonate and look
forward to updating the market on this in due course.
Australia strategy
In August 2022 we announced plans to build a lithium sulphate monohydrate
("LSM") plant at Port Hedland, Australia's largest export port located in the
Pilbara region of Western Australia, to feed TVL's LHM facility in Teesside.
Port Hedland is an ideal location as it is in close proximity to a large
number of spodumene producers in Western Australia. Port Hedland also benefits
from excellent existing infrastructure (road, rail, water, electricity and
gas) as well as talent. It further benefits from access to renewable energy
and energy storage, allowing the delivery of a LSM plant with a low carbon
footprint.
Train 1 of the Port Hedland LSM plant will process spodumene from Australian
lithium miners to produce 40,000 tpa of primary LSM, with trains 2-4 adding a
further 120,000 tpa primary LSM production in future expansions.
The Port Hedland LSM plant, together with TVL's LHM processing facility at
Teesside, will deliver a low carbon, de-risked lithium supply chain between
Western Australian spodumene producers and the burgeoning European lithium
battery cell market.
Key consultants and management team
In March 2022 we strengthened our management team with the addition of John
Walker as the chief executive officer of TVL. John has more than 30 years of
leadership experience in the mining and advanced materials processing
industries.
In October 2022 we further bolstered the team with the appointment of Tony
Veitch to lead our LSM project development. Tony is a very capable and
experienced project builder and we are pleased to retain such talent on our
team.
We have also appointed several industry leading consultants to help us deliver
the projects, including:
· Wave International - a leading consulting firm in the battery and
tech metals sector, with extensive upstream and downstream lithium processing
experience. Wave delivered the Class 4 study and have had a significant
involvement in the development of lithium hydroxide refineries in Australia.
Wave will manage all work programmes including the work of our other experts
and consultants, in order to develop a best-in-class LSM and LHM refining
process.
· ANZAPLAN - a leading engineering consultant who will assist TVL in
the development of the electrochemical route process.
· Nagrom laboratories - a leading laboratory who will advise on the
removal of impurities.
We expect to make further appointments as the projects develop and will keep
the market updated on this front.
Funding
In August 2022 we completed a successful private placing raising £1.2
million. The placing was oversubscribed and supported by existing and new
investors as well as by the directors.
We are also advancing discussions with financiers for the funding of its LSM
and LHM processing facilities and has received significant inbound interest
including from private equity, structured bond providers and institutions.
As we intend to primarily finance and operate the LSM and LHM facilities via
our operating subsidiary TVL, it is anticipated that there will be no
significant dilution to Alkemy's shareholders as part of the proposed
financing process.
Partnership with bp for use of green hydrogen
In October 2022 we announced an MOU with bp Alternative Energy Investments who
will seek to supply green hydrogen to TVL as part of bp's Hygreen hydrogen
project which is currently under development. As part of this partnership, TVL
and bp will evaluate the feasibility of further decarbonising TVL's processes
and energy requirements via a switch from natural gas to green hydrogen.
Agreement to Lease at Wilton International
In September 2022 we announced an extension to the exclusivity period with
Sembcorp Energy UK until 31 October 2022 to facilitate ongoing discussions
with the aim of concluding legal documentation for the Agreement to Lease at
Wilton International. We will provide further updates as and when there are
any developments to report.
Market recognition and outlook
During the period we hosted a number of site visits in Teesside for brokers,
investors and partners. The site visits were very well received and
demonstrated to our guests the excellent facilities at Wilton International
and at Teesside.
During the period we also engaged brokers Shard Capital and VSA Capital, who
both produced detailed research notes which were highly supportive of our
project.
The pace to decarbonise is accelerating and with a growing need for lithium
hydroxide and now a growing preference from western OEM's to source lithium
hydroxide using more local supply chains, Alkemy is well positioned to benefit
from these changes.
We would like to take this opportunity to thank our shareholders for their
continued support and look forward to reporting on our progress during 2022 as
we deliver on our strategy.
Paul Atherley
Non-Executive Chairman
27 October 2022
STATEMENT OF COMPREHENSIVE INCOME
for the period ended 31 July 2022
For six months ended For the six months ended 31 July 2021 For period ended 31 January 2022 (audited)
31 July 2022 (unaudited) (unaudited)
£ £ £
Note
Administrative expenses (708,890) (38,600) (466,903)
Project Development costs (649,397) - (330,747)
Foreign exchange gains / (losses) (7,777) - -
Operating profit (1,366,064) (38,600) (797,650)
Finance costs (1,535) (49) -
Loss before taxation (1,367,599) (38,649) (797,650)
Income tax - - -
Loss after taxation (1,367,599) (797,650)
(38,649)
Other Comprehensive income
Exchange gains / (losses) on translation of foreign operations (978) -
-
Total other comprehensive income (978) -
-
(1,368,577) (797,650)
Total comprehensive loss
for the year (38,649)
Earnings per share 9
Basic and diluted (£ per share) (0.228) (0.199)
(0.013)
The accompanying notes form an integral part of the financial information.
STATEMENT OF FINANCIAL POSITION
As at 31 July 2021
Note At 31 July 2022 (unaudited) At 31 July 2021 (unaudited) At 31 January 2022 (audited)
£ £ £
ASSETS
Current assets
Trade and other receivables 8 15,197 - 73
Restricted cash 6,598 - -
Cash and cash equivalents 13,242 729,904 1,113,923
Total assets 35,037 729,904 1,113,996
EQUITY
Equity Attributable to Owners of the company
Share capital 10 120,000 60,000 120,000
Share premium 1,279,094 - 1,279,094
Foreign exchange reserve (978) - -
Retained earnings (2,165,249) (38,649) (797,650)
Total equity (767,133) 21,351 601,444
LIABILITIES
Current liabilities
Trade and other payables 11 635,911 38,600 512,552
Borrowings 166,259 669,953 -
Total current liabilities 802,170 708,553 512,552
TOTAL EQUITY AND LIABILITIES 35,037 729,904 1,113,996
The accompanying notes form an integral part of the financial information.
This report was approved by the board and authorised for issue on 27 October
2022 and signed on its behalf by:
Paul Atherley
Non-Executive Chairman
STATEMENT OF CHANGES IN EQUITY
for the year ended 31 January 2022
Share capital Share premium Foreign exchange Retained earnings Total equity
£ £ £ £ £
Balance at incorporation on 21 January 2021 - - - - -
Total comprehensive loss for the period - - - (38,649) (38,649)
Total comprehensive income for the period (38,649)
- - - (38,649)
Transactions with owners
Shares issued on incorporation 60,000 - - - 60,000
Total Transactions with owners 60,000 - - - 60,000
Balance at 31 July 2021 (unaudited) 60,000 - - (38,649) 21,351
Balance at 1 February 2022 120,000 1,279,094 - (797,650) 601,444
Total comprehensive loss for the period - - - (1,367,599) (1,367,599)
Unrealised foreign currency loss arising on translation of foreign operations - - (978) - (978)
Total comprehensive income for the period - - (978) (1,367,599) (1,368,577)
Balance at 31 July 2022 (unaudited) 120,000 1,279,094 (978) (2,165,249) (767,133)
The accompanying notes form an integral part of the financial information.
STATEMENT OF CASHFLOWS
for the period ended 31 July 2022
Six months Six months Year ended 31 January 2021 (audited)
ended ended
31 July 2022 (unaudited) 31 July 2021 (unaudited)
£ £ £
Loss before tax (1,367,599) (38,649) (797,650)
Adjusted for:
(Increase)/decrease in receivables (15,124) - (73)
(Decrease)/Increase in trade creditors 123,197 38,600 512,552
Net cash used in operating activities (1,259,526) (49) (285,171)
Financing activities
Increase in restricted funds (6,598) - -
Cash from issue of Ordinary shares - 60,000 1,399,094
Proceeds from short term borrowings 166,259 669,953 -
Net cash from financing activities 159,661 729,953 1,399,094
Net (decrease)/increase in cash and cash equivalents 729,904 1,113,923
(1,099,865)
Cash and cash equivalents at beginning of the year - -
1,113,923
Effects of foreign exchange on cash balances (816)
Cash and cash equivalents at end of the year 13,242 729,904 1,113,923
The accompanying notes form an integral part of the financial information.
NOTES TO THE FINANCIAL INFORMATION
1. GENERAL INFORMATION
The Company was incorporated on 21 January 2021 in England and Wales as a
public company, limited by shares and with Registered Number 13149164 under
the Companies Act 2006. On incorporation, the Company's name was Alkemy
Capital Plc. On 4 February 2021, the Company's name was changed to Alkemy
Capital Investments Plc. The Company's registered office address is 167-169
Great Portland Street, Fifth Floor, London W1W 5PF. On 25 February 2022 the
Company formed a wholly owned subsidiary called Tees Valley Lithium Limited, a
company seeking to establish a Lithium Hydroxide Monohydrate ("LHM")
processing facility in Teesside, UK.
The Company's objective is to establish a LHM processing plant at its chosen
site in Teeside, UK which will aim to initially produce LHM from lithium
feedstock from various sources, to be sold to the UK and European mobile
energy markets. In August 2022 the Company announced plans to build a lithium
sulphate monohydrate plant at Port Hedland, Australia's largest export port
located in the Pilbara region of Western Australia, to feed TVL's LHM facility
in Teesside.
Other than the Directors, the Company has no employees.
The Directors who served during the period were Sam Quinn, Paul Atherley and
Helen Pein.
2. ACCOUNTING POLICIES
Basis of preparation
The principal accounting policies adopted by the Company in the preparation of
the Company Financial Information are set out below.
The Company Financial Information has been presented in £, being the
functional currency of the Company.
The Company Financial Information has been prepared in accordance with IFRS,
including interpretations made by the International Financial Reporting
Interpretations Committee issued by the International Accounting Standards
Board. The standards have been applied consistently. The historical cost basis
of preparation has been used.
The preparation of the financial statements in conformity with IFRS requires
the use of certain critical accounting estimates. It also requires the
Directors to exercise their judgment in the process of applying the Company's
accounting policies.
In the opinion of the management, the interim unaudited financial information
includes all adjustments considered necessary for fair and consistent
presentation of this financial information. The interim unaudited financial
information should be read in conjunction with the Company's audited financial
statements and notes for the year ended 31 January 2022.
Standards and interpretations issued but not yet applied
A number of new standards and amendments to standards and interpretations have
been issued but are not yet effective and, in some cases, have not yet been
adopted by the UKEU. The Directors do not expect that the adoption of these
standards will have a material impact on the Company Financial Information.
Going Concern
The Company Financial Information has been prepared on a going concern basis.
The Company's assets are comprised almost entirely of cash. The Directors have
outlined their new strategy for the Company in the Chairman's Statement. As
part of their assessment of going concern, the Directors have prepared cash
forecasts to determine the cash requirements of the business as it continues
to deliver on its strategy.
In order for the Company to be successful in its strategy, it will need to
raise additional funds in the immediate term. The Directors are reasonably
confident that such funds will be forthcoming as and when they are required,
however as successful future fundraising in support of this strategy cannot be
assured, a material uncertainty exists in this regard. The Directors have a
reasonable expectation that the Company shall be able to secure adequate
resources to continue in operational existence for the foreseeable future.
Accordingly, the Directors believe that as at the date of this report it is
appropriate to continue to adopt the going concern basis in preparing the
financial statements.
Financial assets
Financial assets and financial liabilities are recognised when the Company
becomes a party to the contractual provisions of a financial instrument.
Financial assets and financial liabilities are offset if there is a legally
enforceable right to set off the recognised amounts and interests and it is
intended to settle on a net basis. Cash comprises cash in hand and on demand
deposits. Cash equivalents are short-term, highly liquid investments that are
readily convertible to known amounts of cash and that are subject to an
insignificant risk of changes in value with maturities of less than 90 days.
Financial liabilities
The Company does not currently have any financial liabilities measured at fair
value through profit or loss, therefore all financial liabilities are
initially measured at fair value, net of transaction costs, and are
subsequently measured at amortised cost. The Company recognises an equity
instrument on any contract that evidences a residual interest in the assets of
the Company. In this period Ordinary Shares were the only equity instrument,
recognised at the point at which a call is made on the Shareholders.
Earnings per Ordinary Share
The Company presents basic and diluted earnings per share data for its
Ordinary Shares. Basic earnings per Ordinary Share is calculated by dividing
the profit or loss attributable to Shareholders by the weighted average number
of Ordinary Shares outstanding during the period. Diluted earnings per
Ordinary Share is calculated by adjusting the earnings and number of Ordinary
Shares for the effects of dilutive potential Ordinary Shares.
3. USE OF ASSUMPTIONS AND ESTIMATES
In preparing the Company Financial Information, the Directors have to make
judgments on how to apply the Company's accounting policies and make estimates
about the future. The Directors do not consider there to be any critical
judgments that have been made in arriving at the amounts recognised in the
Company Financial Information.
4. DIRECTORS' EMOLUMENTS
31 July 2022 Directors' Consultancy Social Security Total
fees fees £'000 £'000
£'000 £'000
P Atherley 12,000 27,000 1,096 40,096
S Quinn 10,500 18,600 769 29,869
H Pein 9,000 - - 9,000
Total 31,500 45,600 1,865 78,965
No amount was paid or became payable to any of the Directors of the Company in
the prior period, and there were no staff costs as no staff was employed by
the Company during the prior period.
5. FINANCIAL RISK MANAGEMENT
The Company uses a limited number of financial instruments, comprising cash
and various items such as trade payables, which arise directly from
operations. The Company does not trade in financial instruments.
Financial risk factors
The Company's activities expose it to a variety of financial risks: credit
risk and liquidity risk. The Company's overall risk management programme
focuses on the unpredictability of financial markets and seeks to minimise
potential adverse effects on the Company's financial performance.
(a) Credit risk
The Company does not have any major concentrations of credit risk related to
any individual customer or counterparty.
(b) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash, the
Company ensures it has adequate resource to discharge all its liabilities. The
directors have considered the liquidity risk as part of their going concern
assessment.
Fair values
Management assessed that the fair values of other receivables approximate
their carrying amounts largely due to the short-term maturities of these
instruments.
6. CAPITAL MANAGEMENT POLICY
The Company's objectives when managing capital are to safeguard the Company's
ability to continue as a going concern in order to provide returns for
shareholders and benefits for other stakeholders and to maintain an optimal
capital structure to reduce the cost of capital. The capital structure of the
Company consists of equity attributable to equity holders of the Company,
comprising issued share capital and reserves.
7. FINANCIAL INSTRUMENTS
The Company's principal financial instruments comprise other receivables. The
Company's accounting policy and method adopted, including the criteria for
recognition, the basis on which income and expenses are recognised in respect
of this financial asset. The Company does not use financial instruments for
speculative purposes.
There are no financial assets that are either past due or impaired.
8. TRADE AND OTHER RECEIVABLES
31 July 31 July
2021 2021
£ £
Prepayments 15,197 -
9. EARNINGS PER SHARE
The loss per share has been calculated using the loss for the year and the
weighted average number of ordinary shares entitled to dividend rights which
were outstanding during the year. There were no potentially dilutive ordinary
shares at the year end.
31 July 31 July
2022 2021
£ £
Loss for the period attributable to equity holders of the Company
(1,367,599) (38,649)
Weighted average number of ordinary shares (number of shares)
5,999,999 3,000,000
Loss per share (£ per share)
(0.228) (0.013)
10. SHARE CAPITAL
Ordinary shares of £0.02 each
Number of shares Amount
£
Issued, called up and paid - 31 July 2022 5,999,999 120,000
5,999,999 120,000
Number of shares Amount
£
Issued, called up and paid - 31 July 2021 3,000,000 60,000
3,000,000 60,000
On incorporation on 21 January 2021, the Company issued 3,000,000 Ordinary
Shares of £0.02 nominal value.
On 27 September 2021, 2,999,999 ordinary shares were issued for cash at 50p
per share, raising £1,500,000 before expenses of £160,906
No further issues of Ordinary Shares were made during the period.
11. TRADE AND OTHER PAYABLES
31 July 2022 31 July
£ 2021
£
Trade payables 579,489 38,600
Other payables 41,357 -
Accrued expenses 15,064 -
Total trade and other payables 635,910 38,600
12. POST BALANCE SHEET EVENTS
On 21 July 2022 the Company announced that it had entered into an MOU with
Traxys North America LLC pursuant to which Traxys has agreed to source and
supply lithium feedstock for TVL's planned processing facility in Teesside.
On 4 August 2022 the Company announced a placing of 1.2m new ordinary shares
to raise gross proceeds of £1.2m, of which £178,000 of these shares were
subscribed for by the directors.
On 4 August 2022 the Company announced the grant of 590,000 options to
subscribe for ordinary shares in the Company at £1 per share to the directors
and senior management.
On 8 August 2022 the Company announced plans to construct a Lithium Sulphate
processing plant in Port Headland, Western Australia. The project will act
as a refining hub for Australian lithium producers and provide a key feedstock
for the Company's Teesside LHM processing plant. The Company also announced
the grant of a further 100,000 options to consultants.
On 15 August 2022 the Company announced the signing of an MOU with Weardale
Lithium to evaluate the potential to supply lithium feedstock.
On 29 September 2022 the Company announced the appointment of Tony Veitch to
lead the development of the Port Hedland project, the listing of the Company's
shares on the Frankfurt Stock Exchange, the extension of the Exclusivity
Agreement for the site at Wilton International to 31 October 2022 and the
grant of a further 100,000 options to consultants.
On 12 October 2022 the Company announced that it had entered into an MOU with
bp Alternative Energy Investments Limited for the supply of green hydrogen to
the Company's LHM processing plant in Teesside, UK.
13. ULTIMATE CONTROLLING PARTY
As at 31 July 2022, the ultimate controlling party of the Company was Paul
Atherley.
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