REG - Alkemy Capital Invs. - Interim Results
02/10/2024 07:00
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RNS Number : 5409G Alkemy Capital Investments PLC 02 October 2024
Alkemy Capital Investments Plc
Interim Results for the Six Month Ended 31 July 2024
Alkemy Capital Investments plc ("Alkemy" or the "Company") announces its
unaudited financial statements for the 6 months ended 31 July 2024 ("Financial
Statements").
Chairman's Statement
I have great pleasure in presenting our interim results for the period ended
31 July 2024.
Since the inception of Alkemy, its wholly-owned subsidiary Tees Valley Lithium
(TVL) has made excellent progress in advancing its key lithium refinery
project in Teesside, receiving planning and environmental permissions,
securing feedstock and establishing other key strategic partnerships along
with key governmental, industry and media recognition, reflecting its
commitment to becoming a leader in the low-carbon production of battery-grade
lithium hydroxide.
Despite recent market shifts, European demand for lithium remains on an
unprecedented upward trajectory. As Europe's car makers make the switch to EVs
to meet this burgeoning demand there is over 700GW of gigafactory capacity
either in construction or planned to provide the batteries for these EVs.
These gigafactories will require over 650,000 tonnes of locally refined
lithium per year in the form of either hydroxide or carbonate depending on the
type of vehicle. Currently the UK and Europe has very limited lithium refining
capacity.
TVL's processing refinery in Teesside is expected to produce enough lithium
hydroxide to supply 100% of the forecasted automotive demand in the UK by
2030, with a further 35% of its total production available for export to other
countries in Europe and elsewhere.
TVL has reached an agreement in principle with international trading house
Wogen for the supply of technical grade lithium carbonate to TVL's merchant
refinery in Teesside. Wogen is a leading international trader of off-exchange
specialty metals and minerals, with a long history and well-established
presence in the battery metals market across Asia, the United States and
Europe. Wogen intends to supply up to 20,000 tonnes of technical grade lithium
carbonate feedstock per annum, for an initial period of five years. The supply
will be sufficient to fill the first of TVL's proposed four trains, producing
around 24,000 tonnes of battery grade lithium hydroxide or lithium carbonate
equivalent.
Having secured feedstock for its first train, TVL is now focussed on obtaining
initial mezzanine funding which will enable it to complete Front End
Engineering Design (FEED) and commence the purchase of key long lead items for
the refinery. TVL is currently making good progress in these discussions and
expects to make further announcements on this front in the short term.
Building on the successful foundations laid by TVL, Alkemy will continue to
explore new horizons in the battery minerals sector to encompass a range of
critical battery minerals, positioning it as a diversified leader in the
energy transition sector, however the immediate focus will remain on securing
funding for TVL.
During the period we have continued to make significant progress in a
challenging macro environment.
The pace to decarbonise however continues to accelerate 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.
The support received from third parties including major OEMs provides
validation of our proposed lithium refining strategy. The rapid completion of
due diligence to the satisfaction of certain OEMs is testament to the quality
of the work undertaken by our commercial and technical teams and confirms our
wider business case.
We would like to take this opportunity to thank our shareholders for their
continued support and patience and look forward to reporting on our progress
during 2024 as we deliver on our strategy.
Paul Atherley
Non-Executive Chairman
2 October 2024
STATEMENT OF COMPREHENSIVE INCOME
for the period ended 31 July 2024
For six months ended For the six months ended 31 July 2023 Year ended 31 January 2024 (audited)
31 July 2024 (unaudited) (unaudited)
£ £ £
Note
Other income - - 1,247
Administrative expenses (563,812) (947,423) (1,454,195)
Project Development costs (91,845) (215,461) (634,288)
Business Development costs - - (1,852)
Finance costs (22,059) - (1,697)
Foreign exchange gains / (losses) 667 960 (5,215)
Loss before taxation (677,049) (1,161,924) (2,096,000)
Income tax - 95,278 325,018
Loss after taxation (677,049) (1,066,646) (1,770,982)
Other Comprehensive income
Exchange gains / (losses) on translation of foreign operations (9,707) 6,609 (2,306)
Total other comprehensive income (9,707) 6,609 (2,306)
(686,756) (1,060,037) (1,773,288)
Total comprehensive loss
for the year
Earnings per share 9
Basic and diluted (£ per share) (7.7p) (23.4p)
(14.8p)
The accompanying notes form an integral part of the financial information.
STATEMENT OF FINANCIAL POSITION
As at 31 July 2024
Note At 31 July 2024 (unaudited) At 31 July 2023 (unaudited) At 31 January 2024 (audited)
£ £ £
ASSETS
Non current assets
Intangibles - Project development costs 317,089 302,499 317,089
Total Non current assets 317,089 302,499 317,089
Current assets
Trade and other receivables 8 97,749 392,298 126,303
Cash and cash equivalents 51,114 40,307 45,458
Total current assets 148,863 432,605 171,761
Total assets 465,952 735,104 488,850
EQUITY
Equity Attributable to Owners of the company
Share capital 10 176,297 144,000 176,297
Share premium 4,261,626 2,413,243 4,261,626
Share based payments 377,791 126,053 259,771
Foreign exchange reserve (14,658) 3,964 (4,951)
Share to issue reserve - 872,162 -
Retained earnings (5,890,440) (4,509,055) (5,213,391)
Total equity (1,089,384) (949,633) (520,648)
LIABILITIES
Current liabilities
Trade and other payables 11 1,101,997 1,323,448 907,209
Borrowings 453,339 361,289 102,289
Total current liabilities 1,555,336 1,684,737 1,009,498
TOTAL EQUITY AND LIABILITIES 465,952 735,104 488,850
This report was approved by the board and authorised for issue on 2 October
2024 and signed on its behalf by:
Paul Atherley
Non-Executive Chairman
The accompanying notes form an integral part of the financial information.
STATEMENT OF CHANGES IN EQUITY
for the year ended 31 July 2024
Share capital Share Premium Share Based Payments Shares to Issue Reserve Foreign Exchange Reserve Retained Earnings Total
£ £ £ £ £ £ £
As at 1 February 2023 144,000 2,413,243 63,221 - (2,645) (3,442,409) (824,590)
Loss for the year - - - - - (1,066,646) (1,066,646)
Foreign exchange losses on translation of overseas subsidiaries - - - - 6,609 - 6,609
Total Comprehensive income - - - - 6,609 (1,066,646) (1,060,037)
Transactions with owners:
Issue of shares - - - - - - -
Issue of options - - 62,832 - - - 62,832
Shares to issue - - - 872,162 - - 872,162
Total transactions with owners - - 62,832 872,162 - - 934,994
Balance at 31 July 2023 144,000 2,413,243 126,053 872,162 3,694 (4,509,055) (949,633)
Share capital Share Premium Share Based Payments Shares to Issue Reserve Foreign Exchange Reserve Retained Earnings Total
£ £ £ £ £ £ £
As at 1 February 2024 176,297 4,261,626 259,771 - (4,951) (5,213,391) (520,648)
Loss for the year - - - - - (677,049) (677,049)
Foreign exchange losses on translation of overseas subsidiaries - - - - (9,707) - (9,707)
Total Comprehensive income - - - - (9,707) (677,049) (686,756)
Transactions with owners:
Issue of options - - 118,020 - - - 118,020
Total transactions with owners - - 118,020 - - - 118,020
Balance at 31 July 2024 176,297 4,261,626 377,791 - (14,658) (5,890,440) (1,089,384)
The accompanying notes form an integral part of the financial information.
STATEMENT OF CASHFLOWS
for the period ended 31 July 2024
Six months Six months Year ended 31 January 2024 (audited)
ended ended
31 July 2024 (unaudited) 31 July 2023 (unaudited)
£ £ £
Loss before tax (677,049) (1,066,646) (1,770,982)
Adjusted for:
Share based payments 118,020 62,832 196,550
Expenditure met directly by funding provider - 35,000 -
Finance costs 22,059 - -
(Increase)/decrease in receivables 28,554 (180,173) 85,822
(Decrease)/Increase in trade creditors 206,788 301,853 (132,662)
Net cash used in operating activities (301,628) (847,134) (1,621,272)
Investing activities
Payments for intangible assets - (3,686) -
Net cash outflow from investigating activities - (3,686) -
Financing activities
Repayment of Borrowings - - (224,000)
Funds received against shares to issue - 872,162 -
Cash from issue of Ordinary shares - - 1,880,680
Proceeds from short term borrowings 318,900 - -
Interest paid (1,909) - -
Net cash from financing activities 316,991 872,162 1,656,680
Net (decrease)/increase in cash and cash equivalents 15,363 21,342 35,408
Cash and cash equivalents at beginning of the year 12,356
45,458 12,356
Effects of foreign exchange on cash balances (9,707) 6,609 (2,306)
Cash and cash equivalents at end of the year 51,114 40,307 45,458
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 Teesside, 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 and in September 2022 the Company formed a wholly owned subsidiary
called Port Hedland Lithium Pty Ltd.
Other than the Directors, the Company has no employees.
The Directors who served during the period were Sam Quinn, Paul Atherley,
Helen Pein and Vikki Jeckell.
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 2024.
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
As part of their assessment of going concern, the Directors have prepared cash
forecasts to determine the funding requirements of the business over the 18
months from the reporting date. Cash requirements over this period have been
projected in the range of a £2m minimum (decelerated project development
case) to £9m maximum (accelerated project development case) depending on the
level of technical project development work being undertaken, as determined by
funding availability.
As at the date of this report, the Directors are considering a variety of
funding options from numerous parties to consider the option best suited to
balancing the immediate cash flow needs of the business and desire to
accelerate the project development timeframe against the need to avoid
unnecessary dilution of the shareholders during a period of depressed equity
market prices. Options ranging from:
· project level debt or strategic equity which would provide
sufficient funding to accelerate the project development program over the
period of consideration, including the LHM refinery train 1 FEED study
alongside development of the Port Hedland LSM refinery and TVG graphite
projects, as well as general working capital requirements;
· market equity placings to secure working capital funding needs
whilst project development funding opportunities continue to be assessed;
· convertible lending facilities which may act as a hybrid of
working capital and project development funding, allowing progression of
project development at a less accelerated rate that would be the case under a
more substantial project lending facility;
· any combination of the above.
As successful execution of one of the above fundraising options cannot be
assured, a material uncertainty exists which may cast significant doubt on the
ability of the Company and Group to continue as a going concern and realise
its assets and discharge its liabilities in the normal course of business.
However, the Board remains in detailed discussions on the above funding
opportunities and anticipates concluding this process in the near term. As
such, the Directors are therefore reasonably confident that the necessary
funding will be secured, as and when required, by executing on one of the
above options under consideration, such that the Directors have a reasonable
expectation that the Company will continue in operational existence for the
next 12 months.
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 2024 Directors' Consultancy Social Security Total
fees fees £'000 £'000
£'000 £'000
P Atherley 26,075 53,500 3,120 82,695
S Quinn 19,556 30,000 2,340 51,896
H Pein 9,000 - - 9,000
V Jeckel 18,000 113,000 2,340 133,340
Total 72,631 196,500 7,800 276,931
There were no staff costs other than directors fees as no staff were employed
by the Company during the or 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
2024 2023
£ £
Prepayments 29,982 68,207
VAT receivable 65,193 97,117
Other receivables 2,574 226,974
Total trade and other receivables 97,749 392,298
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
2024 2023
£ £
Loss for the period attributable to equity holders of the Company
(677,049) (1,066,646)
Weighted average number of ordinary shares (number of shares)
8,814,851 7,199,998
Loss per share (pence per share)
(7.7) (14.8)
10. SHARE CAPITAL & RESERVES
Number of ordinary shares of 2p Share Capital Share premium Shares to issue Share based payments
£ £ £ £
At 31 January 2023 7,199,998 144,000 2,413,243 - 63,221
Shares to issue - - - 872,162 -
Issue of Options and Warrants - - - - 62,832
At 31 July 2023 7,199,998 144,000 2,413,243 872,162 126,053
At 31 January 2024 8,814,851 176,297 4,261,627 - 259,771
Issue of Options and Warrants - - - - 118,020
At 31 January 2024 8,814,851 176,297 4,261,627 - 337,791
On 31 May 2023 the Company entered into a loan arrangement with Paul Atherley
for £920,800 in gross funding (£872,162 net of costs) to be repaid in a
fixed number of ordinary shares in the Company, at a fixed price, at a future
date. Under IFRS, the terms of this loan required it to be recorded as an
equity reserve "shares to issue" as the economic risks of the instrument are
more closely aligned to equity than debt, with transactions costs being taken
as a deduction from this equity reserve. As a consequence these net amounts
received as at the prior period reporting date were recognised in the "shares
to issue" reserve. On issuance of the repayment shares, which took place on
5 October 2023, these amounts were reallocated to the share capital and share
premium reserves.
No further issues of Ordinary Shares were made during the period.
11. TRADE AND OTHER PAYABLES
31 July 2024 31 July
£ 2023
£
Trade payables 697,574 1,011,480
Other payables 72,521 123,996
Accrued expenses 331,902 187,972
Total trade and other payables 1,101,997 1,323,448
12. POST BALANCE SHEET EVENTS
On 5 August 2024, the Company granted 500,000 options to directors and
advisors as part of an incentivisation package linked to the achievement of
the securing funding to complete the FEED study for the Company's LHM
refinery. The options have an exercise price of nil, expiry period of 5
years and become exercisable once the funding required for the completion of
the FEED study has been fully secured.
Details of the allocation of the above options are as follows:
Receiving Party Number of options
Paul Atherley 150,000
Sam Quinn 150,000
Vikki Jeckell 150,000
Helen Pein 25,000
Consultants - non board 25,000
Total 500,000
13. ULTIMATE CONTROLLING PARTY
As at 31 July 2024, the company has no ultimate controlling party.
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