REG - Altona Rare Earths - Final Results
24/10/2023 15:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20231024:nRSX1474Ra&default-theme=true
RNS Number : 1474R Altona Rare Earths PLC 24 October 2023
24 October 2023
ALTONA RARE EARTHS PLC
("Altona" or "the Company")
FINAL RESULTS
Altona (LSE: REE), a resource exploration and development company focused on
Rare Earths in Africa, is pleased to announce its final results for the year
ended 30 June 2023. A copy of the Annual Report will be available shortly on
the Company's website: www.altonaRE.com/investors/documents
(http://www.altonaRE.com/investors/documents) . A further announcement will be
made with the date of the Annual General Meeting in due course.
PERIOD HIGHLIGHTS
· Successful listing on the London Stock Exchange ("LSE") on 9 June
2023
· Fundraise of £2.0 million at 5 pence per share completed in
conjunction with the LSE listing
POST-PERIOD HIGHLIGHTS
· Mineral Resource Estimate published on 25 September 2023, reporting:
- 13.6 million at 2.42% Total Rare Earths Oxide ("TREO")
- 58% of tonnage reported as Indicated, balance as Inferred.
· Scoping Study published on 18 October 2023, reporting:
- Post tax NPV8 of US$283.3 million
- Post tax IRR of 25%
- Life of Mine ("LoM") of 18 years
- LoM EBITDA of US$1.67 billion
· The Scoping Study:
- Provides sufficient confidence to proceed to Prefeasibility Study
(PFS) stage;
- Identified several potential upsides to be developed during PFS.
The financial information set out below does not constitute the Company's
statutory accounts for the year ending 30 June 2023.
FINANCIAL HIGHLIGHTS
· Net Assets increased to £1.9 million (FY 22: £1.1 million)
· Cash at year end increased to £1.1 million (30 June 22: £0.3
million)
· Loss for the year increased to £1.3 million (FY 22: £0.8 million),
mainly due to the cost of the LSE listing and fundraise
Cedric Simonet, CEO of Altona, commented, "For Altona, the Financial Year 2023
ended on a positive note, with the Company completing its long-anticipated
move to the Main Market of the London Stock Exchange on 9 June 2023. The
simultaneous fundraise allowed the Company to complete its Phase 2
deliverables (the MRE and Scoping Study) and to meet the requirements to
increase Altona's holding in the Monte Muambe Project to 51%.
"The Scoping Study serves as an affirmative initial validation of the
potential economic viability of the Project and provides a solid foundation
for its subsequent progression to the Prefeasibility Study stage.
"We are looking forward to a busy and exciting time ahead as we enter Phase 3
and continue de-risking the Monte Muambe project whilst delivering on the
Prefeasibility Study, a Mining Concession and the subsequent increase in our
holding of the Project to 70%."
To subscribe for RNS alerts, please visit:
https://www.altonare.com/investors/regulatory-news-alerts/
(https://www.altonare.com/investors/regulatory-news-alerts/)
-ends-
Altona Rare Earths Plc
Cedric Simonet,
CEO
+44 (0) 7778 866 108
Christian Taylor-Wilkinson, Business
Development
+44 (0) 7795 168 157
Novum Securities Ltd (Corporate
Finance)
+44 (0) 20 7399 9400
David
Coffman
Daniel Harris
George Duxberry
Allenby Capital Ltd (Joint
Broker)
+44 (0)20 3328 5656
Kelly Gardiner / Guy McDougall (Sales)
Nick Athanas (Corporate Finance)
Optiva Securities (Joint
Broker)
+44 (0) 20 3411 1882
Daniel
Ingram
Yellow Jersey PR (Financial
PR)
+44 (0) 20 3004 9512
Sarah Hollins
Annabelle Wills
Soraya Jackson
About Altona Rare Earths Plc
Altona is a resource exploration and development company focused on Rare
Earths in Africa. The Company is listed on the Main Market of the London Stock
Exchange.
Rare Earths are a group of 17 chemical elements, many of which are critical to
the World's ongoing transition from carbon-based to renewable energies, and to
the defence and communication sectors.
The Company currently focuses on the development of Monte Muambe, its flagship
Magnet Rare Earths Project, located in Northwest Mozambique. The Project was
acquired in June 2021, and the Company has so far drilled over 7,800m, and
defined a maiden JORC Mineral Resource Estimate of 13.6 million tons at 2.42%
TREO. A Competent Person Report including the Scoping Study for Monte Muambe
was published on 18 October 2023. The Project is now entering its
Prefeasibility Study stage.
Altona continues to take advantage of its position in Africa to assess other
possible Rare Earths opportunities on the Continent.
CHAIRMAN'S STATEMENT
It has been a transformational year for Altona Rare Earths as we completed our
move from the AQSE Growth Market to the LSE Main Market Standard Segment list
and announced an impressive maiden resource at our flagship Monte Muambe
Project.
Monte Muambe's encouraging Scoping Study, published on 18 October 2023,
underpins the speed with which we are progressing and de-risking the Project,
and will continue to do so as work on the Prefeasibility Study is now
starting.
I am particularly pleased with the advancements we made considering the
unfavourable macroeconomic conditions and general business environment we are
currently navigating.
Continued global inflation, and the high interest rates that the Bank of
England (and other central banks) is employing to combat it, has reduced the
amount of disposable income, making it one of the main factors contributing to
generally disappointing returns across the small cap resource sector this
year.
To compound this general lethargy, rare earth spot prices sank to their lowest
levels since 2020 on soft demand from green energy companies and a rising
supply from China. I suspect this is driven by lower consumer demand which in
turn has stemmed primarily from the aforementioned higher interest rates. Less
consumer demand means lower need for inventory from green energy companies and
lower internal demand in China leaves higher balances for export, depressing
global spot prices.
But, the case for green metals and particularly rare earths remains
structurally sound. The green revolution is a real thing and embedded in the
government policies of nations as disparate as the UK, China, USA, France,
Germany, Canada, Tanzania and Ecuador, with even petro economies like Saudi
Arabia investing heavily in the post carbon economy.
The UK government remains at the forefront of the green revolution with its
legal commitment to net zero emissions and we are seeing progressively more
signs of this and other governments growing willingness to give meaningful
assistance to nascent companies looking to be part of the solution.
At Altona Rare Earths we remain confident that we are putting in place the
building blocks for a viable mining operation in Mozambique and we are excited
about driving Monte Muambe forward while continuing our search for further
high quality rare earths assets to add to our portfolio.
Martin Wood
Chairman
Altona Rare Earths Plc
CEO'S STATEMENT
For Altona, the Financial Year 2023 ended on a positive note, with the Company
completing its long-anticipated move to the Main Market of the London Stock
Exchange on 9 June 2023. The Company simultaneously raised £2 million in new
funds (the "Fundraise"), to cover the completion of Monte Muambe's Phase 2 and
the increase of Altona's holding in the project to 51%.
The listing process took longer than expected, and this admittedly resulted in
delays in the completion of Monte Muambe's maiden mineral resource estimate
("MRE") and Scoping Study, although the Company managed to complete sufficient
resource drilling at Target 1 and Target 4 by the end of November 2022 to
support the MRE.
The Company, however, drawing on the experience of more advanced projects in
its peer group, has developed a focused strategy to concentrate its efforts
and resources on the areas of the deposit that have the highest likelihood to
be viable, as opposed to "drilling for numbers". The continued implementation
of this strategy through the Monte Muambe Prefeasibility Study and beyond is
expected to offer opportunities to make up for these delays.
As funds became available in June 2023, the Company immediately engaged
Snowden Optiro to rapidly process collected data and finalise the work on the
MRE and the Scoping Study.
The maiden MRE published in late September 2023 reported 13.6 million tonnes
at 2.42% total rare earth oxide ("TREO"), which included 0.31% NdPr Oxide (at
a 1.5% TREO cut-off). Importantly, through the implementation of a
well-designed drilling plan, Altona ensured that 58% of the tonnage was in the
Indicated category, while the rest was in the Inferred category. This resource
forms a solid base for a future ore reserve. The 2024 drilling campaign will
be focused on increasing the MRE's tonnage, and degree of confidence to the
measured and indicated categories. This will be achieved through down-dip
drilling at Target 1 and Target 4, in-fill drilling and resource drilling on
other targets at Monte Muambe.
On 18 October 2023, Altona published the Monte Muambe Scoping Study. The study
covers an open pit mining operation considering Target 1 and Target 4 over an
18-year life of mine, and the extraction and processing of 750,000 tons of ore
per year. A mixed rare earths carbonate ("MREC") will be produced through a
two-step process involving comminution and flotation to produce a concentrate,
followed by gangue leaching and caustic cracking.
With a NPV8 of USD 283.3 million, an IRR of 25%, and a life of mine EBIDTA of
USD 1.67 billion, the Scoping Study serves as an affirmative initial
validation of the potential economic viability of the Monte Muambe project
("the Project") and provides, together with the MRE, a solid foundation for
the Project's subsequent progression. It also enables the Company to establish
its presence amongst other prospective REE producers in Africa in a niche but
critically important industry.
The completion of the Scoping Study also means the increase of Altona's
holding in the Project to 51%. As at the date of this report, the contractual
and administrative processes to effect this change have commenced, therefore
further de-risking the project and increasing shareholder value.
Numerous avenues for increases of the Project's value proposition have been
identified in the Scoping Study and will be developed in the Prefeasibility
Study. These include:
· Increasing the resource base and the life of mine
· Mining, Processing, Energy Mix and Logistics optimisation
· Considering further on-site, in-country or regional separation and
refining
· Responsible Sourcing systems
The market for magnet metals is projected to grow five-fold by 2040, and the
existing NdPr Oxide supply deficit to grow to 90,000 tonnes by that time 1
(#_ftn1) . This growth is largely driven by the world's green energy
transition, which relies on rare earths based permanent magnets as an
essential component of wind turbines and electric vehicles. In addition, the
current dominance of China over the rare earths supply chain is seen as a
geopolitical and strategic threat by the rest of the world ("RoW") and in
particular Western governments. Supported by new Critical Minerals policies
and legislations, RoW supply chains are rapidly developing.
The future of the rare earths and magnet metals supply chain though, is more
likely to reflect an integration of China and RoW supply chains rather than a
separation. A key development that the Company anticipates, however, is the
increased importance of the consumers demand for products manufactured with
responsibly sourced products. It is expected that sources certified and
verified as responsible will have competitive advantage as opposed to other
sources. The continued development of the Project will therefore encompass
responsible sourcing aspects and systems at an early stage.
As Monte Muambe enters the Prefeasibility Stage, the Company will now focus on
completing exploration activities on targets other than Target 1 and Target 4,
to firm up the 2024 resource upgrade drilling plan, and on extensive
metallurgical testing. The objective is to define, by the end of 2024, an
updated MRE with an increased tonnage and level of confidence which can be
converted into an ore reserves statement as part of the Prefeasibility Study.
Monte Muambe is Altona's flagship project, and the Company will therefore
continue to drive its rapid development, following its strategy focussed on
viability. However, the Company, taking advantage of its position, geological
knowledge and networks in Africa, will continue to assess new rare earths
opportunities with a view to adding more quality projects to its portfolio.
This will be done with a focus on short timelines to production, as well as
diversifying the Company's exposure in terms of deposit type (ionic clays) and
of rare earths basket (heavy rare earths).
We are looking forward to a busy and exciting time ahead as we continue
de-risking Monte Muambe with our next deliverables: the Prefeasibility Study,
a Mining Concession and our holding increased to 70%.
Dr Cédric Simonet
CEO
Altona Rare Earths Plc
OPERATIONS REVIEW
Pre-Financial Year activities
The 2022 field campaign started in February 2022, with a thorough soil
sampling survey, and continued with Reverse Circulation drilling at Target 1
and Target 4 in May 2022.
Work done up to 30 June 2022 allowed the Company to:
· Identify 5 new drilling targets on the basis of soil sampling results
(Targets 1E, 7, 8, 9 and 10)
· Confirm the shape, orientation and extent of Target 1 at target
level, and plan appropriately additional drill holes.
· Confirm the validity of Target 4 for resource drilling
· Gain additional understanding on the characteristics of REE
mineralisation at Monte Muambe, in particular with respect to the existence of
two different types of ore: low grade ore, with 0.5 and 1% TREO and some
Niobium, and high-grade ore, with 2.4 to 2.5% TREO in average and no Niobium,
and to the geometry of the mineralised bodies.
The high-grade mineralisation, as can be seen on this cross section of Target
1, forms consistent and continuous zones from surface.
Financial Year 2023 activities
Monte Muambe licence successfully renewed and transferred to Monte Muambe
Mining Limitada ("MMM")
On 26 October 2022, Prospecting Licence LPP7573L was renewed for a further
3-year term (up to 22 May 2025) and transferred to Monte Muambe Mining
Limitada, the project's Special Purpose Vehicle.
Field activities
After a brief interruption to review drilling data, drilling activities at
Monte Muambe resumed on 12 July 2022. Activities during the reporting year
were focused on building the project's database to back a maiden Mineral
Resource Estimate, with a focus on Target 1 and Target 4.
Drilling completed during the period totalled 2,201 meters (21 holes). This
included 4 exploration holes at Target 9, while the rest was at Target 1.
Hole No Target X Y Z Azimuth Dip Total Depth Completion Date
MM076 T9 616,709.690 8,193,847.957 510.441 90 -55 54.8 Jul 12, 22
MM077 T9 616,770.253 8,193,844.485 539.416 90 -55 84.8 Jul 15, 22
MM078 T9 616,830.119 8,193,850.715 567.111 90 -55 84.7 Jul 16, 22
MM073 T1 617,074.876 8,195,826.149 553.284 213 -55 84.75 Jul 20, 22
MM053 T1 617,113.490 8,195,851.378 546.097 213 -55 84.87 Jul 21, 22
MM054 T1 617,168.973 8,195,792.119 562.715 213 -55 84.85 Jul 26, 22
MM074 T1 617,203.181 8,195,844.416 553.251 213 -55 150.8 Jul 27, 22
MM079 T1 617,146.434 8,195,901.754 537.240 213 -55 150.7 Jul 29, 22
MM091 T1 617,091.345 8,195,958.888 526.924 213 -55 132 Aug 4, 22
MM093 T1 617,057.290 8,195,909.039 526.968 213 -55 84.7 Aug 6, 22
MM063 T1 617,375.902 8,195,669.974 562.403 213 -55 84.8 Aug 8, 22
MM065 T1 617,483.587 8,195,688.624 548.008 213 -55 150.75 Aug 10, 22
MM066 T1 617,451.982 8,195,641.067 551.211 213 -55 84.75 Aug 13, 22
MM094 T1 616,994.254 8,195,951.692 517.843 213 -55 72.8 Aug 15, 22
MM095 T1 617,440.120 8,195,767.399 552.447 213 -55 55 Nov 9, 22
MM096 T1 617,379.712 8,195,822.855 554.475 213 -55 156 Nov 15, 22
MM100 T1 617,448.312 8,195,763.258 551.998 213 -55 36 Nov 15, 22
MM097 T1 617,293.751 8,195,839.825 555.826 213 -55 120 Nov 18, 22
MM098 T1 617,242.484 8,195,901.002 545.401 213 -55 144 Nov 22, 22
MM099 T1 617,188.363 8,195,955.179 534.597 213 -55 150 Nov 24, 22
MM101 T1 617,427.188 8,195,796.987 552.743 213 -55 150 Nov 28, 22
Collar information of holes drilled during the FY 2023
In August 2022, Altona published an updated Competent Person Report including
an Exploration Target estimate based on drilling results at Target 1 and
Target 4 up to 5 July 2023.
Tonnes (millions) TREO%
cutoff TREO% 0.5% Grade 1.0% Grade Shell 0.5% Grade Shell 1.0% Grade Shell
1.00% 56.6 21.7 1.65 1.78
2.00% 11.5 6.5 2.41 2.47
The Exploration Target estimate:
· provided a first-pass estimation of the potential size of the
deposit,
· confirmed the presence of high-grade zones in the mineralised system,
· helped review and confirm the drilling plan for the remainder of the
year.
Drilling done after the publication of the Exploration Target estimate focused
on the deeper parts of Target 1.
In November 2022, the Company commissioned a real time kinetics (RTK) system
on site and undertook a complete RTK survey of all holes drilled in 2021 and
2022 as well as legacy holes.
All selected samples from the 2022 drilling campaign, as well as re-composited
samples from the 2021 drilling campaign, were shipped to Intertek
laboratories' facility in Johannesburg by early December 2022 for preparation,
and subsequently forwarded to Intertek Perth for assay.
In addition, a batch of 20 samples was sent for mineralogical studies. XR
Diffraction results for this batch were received in January 2023.
In June 2023, Altona contracted Snowden-Optiro, a reputable geological
consultancy company, to prepare its maiden JORC Mineral Resource Estimate.
Post-Financial Year activities
Maiden JORC Mineral Resource Estimate
On 25 September 2023, Altona published Monte Muambe's maiden JORC Mineral
Resource Estimate, reported in the Table below using a 1.5% TREO cut-off.
Notes:
· Million tonnes are rounded to one decimal place. Grades are rounded
to two decimal places for % and whole numbers for ppm.
· The MRE has been reported in consideration of reasonable prospects
for eventual economic extraction (RPEEE) using a pit shell based on a 1.5%
TREO cut-off, revenue of 24.65 USD/kg TREO MREC and average total recovery to
MREC of 48%.
· Mineral resources are reported as dry tonnes on an in-situ basis.
· Rare earth elements are inclusive of the TREO and not additional to
it.
· "NdPr Oxide" is the sum of Nd2O3 and Pr6O11.
The MRE represents an increase in tonnage compared to the high-grade part of
the Exploration Target estimate, consistent with the fact that additional
drilling was done at Target 1 after the Exploration Target estimate was
compiled.
Estimate Parameters Tonnes (millions) Grade % TREO
Exploration Target August 2022 1% TREO grade shell and 2% TREO cut-off grade
6.5 2.47
(range)
0.5% TREO grade shell
2% TREO cut-off grade 11.5 2.41
MRE Indicated and Inferred 1.5% TREO cut-off
Sept 2023 Optimized pit shells 13.6 2.42
Target 1 and Target 4
Reconciliation between 2022 Exploration Target and 2023 MRE
The MRE's tonnage and grade compares favourably to Ore Reserve Statements of
more advanced carbonatite REE-projects in Monte Muambe's peer group in Africa
and in Australia.
In 2024, the Company intends to increase the tonnage and the level of
confidence of the existing MRE through:
· In-fill drilling at Target 1 and Target 4 (to take the MRE on these
two mineralised bodies to Measured and Indicated levels);
· Down-dip drilling at Target 1 and Target 4 (to increase the tonnage);
· A re-evaluation of the potential viability of Target 6, which has
known high-grade mineralisation at a depth of 30 to 50m below the surface;
· Resource drilling at Targets 3, 9 and 11 among others.
Scoping Study
On 18 October 2023, Altona published an updated CPR including a Scoping Study
(the "Study") for the Monte Muambe project.
The Study was prepared by geology and mining consultancy firm Snowden-Optiro,
to assess the potential viability of an open pit mining and MREC production
operation, to assess project development options, and to give sufficient
confidence to the Company to advance to the Prefeasibility Study stage.
The Study is preliminary in nature and includes material assumptions outlined
in the CPR, including product price assumptions. Capex estimates qualify as
Class 4 estimates as per the Association for the Advancement of Cost
Engineering (AACE) Recommended Practice 47R-11. The accuracy of the opex and
of the initial capex estimate is assessed at +35 % to −30 %. The base case
includes an indicative life of mine extraction and production schedule, which
is based on a Mineral Resource Estimate, 58% of which classified as Indicated
and 42% as Inferred.
The Study takes into consideration open-pit mining of Target 1 and Target 4,
at a Life of Mine ("LOM") strip ratio of 1.6, over a period of 18 years. An
anticipated 750,000 tonnes of ore per annum will be extracted and processed
through a beneficiation plant to produce a rare earths concentrate. The
beneficiation process will include crushing, milling and flotation. The
concentrate will then be processed through a hydrometallurgical plant to
produce an average of about 15,000 tonnes of MREC per annum. The
hydrometallurgical process will involve a weak acid gangue leach, followed by
rare earths leaching and purification. The MREC product will be packaged and
transported via existing road infrastructure to the port of Beira, in
Mozambique, for export.
Schematic layout of the Monte Muambe project
Base Case Technical and Economic parameters are summarised in the table below:
Parameter Unit Value
Ore processed Mt 13.5
MREC produced kt 270.7
Initial Capex M US$ 276.3
Sustaining Capex M US$ 63.0
Opex LoM M US$ 1,519
Opex per ton MREC US$/t 5,613
Gross Revenue LoM M US$ 3,670
Net Revenue LoM M US$ 3,193
EBITDA LoM M US$ 1,674
Revenue per ton MREC US$/t 13,558
Payback from first MREC years 2.5
Post tax NPV 8 M US$ 283.3
Post tax NPV 10 M US$ 207.0
Post tax NPV 8 (Upside Scenario) M US$ 409.9
Post tax IRR % 25%
Operating margin % 42%
Sensitivity Analysis
Using an NPV of US$283.3 million with an applied real discount rate of 8%, the
Project is most sensitive to revenue (price, recovery, grade and exchange
rates), less sensitive to opex and least sensitive to capex.
Project sensitivity analysis
The Scoping Study demonstrates the potential for Monte Muambe to become a
viable mining operation.
Considerable upside potential has been identified in the Scoping Study and
will be developed further in the Prefeasibility Study ("PFS"). This includes:
· Increase of the resource base, as well as of the LoM and/or ore
extraction rate;
· Mining parameters optimisation;
· Processing and Metallurgy, both for the beneficiation and
hydrometallurgical plants;
· Energy sources mix and logistics options;
· Evaluation of the possibility of doing further onsite, in-country or
regional separation and refining;
· Setting up Responsible Sourcing systems.
Completion of Phase 2 and holding increase to 51%
On 24 October, in accordance with the Farm-Out Agreement, the Company notified
the original shareholders of Monte Muambe Mining Lda of the successful
completion of Phase 2 and of its intention to proceed to Phase 3.
At the date of this report the contractual and administrative processes have
been initiated and completion is expected in the next few weeks.
Phase 3 activities
Progressing Monte Muambe towards PFS
As a short-term objective, the Company intends to continue de-risking the
project through:
· Lodging a Mining Concession application, and an application for
land-rights
· Starting the EIA Licensing process for the mining operation
· Starting Prefeasibility Study activities with a priority on:
o Grass-root exploration activities on targets other than Target 1 and
Target 4 to firm up the 2024 resource upgrade drilling plan
o Extensive metallurgical testing and process flowsheet development
· Drilling aimed at producing an upgrade MRE, convertible into an Ore
Reserves Statement, by Q1 2025.
New Projects
Target generation and business development activities will also continue, with
the view of securing at least one new project during the course of the year.
Outlook
The robust financial forecasts of the Monte Muambe Scoping Study serve as an
affirmative initial validation of the Project's economic viability, enabling
the Company to establish its presence amongst other prospective REE producers
in Africa. It provides, together with the MRE, a solid foundation for the
Project's subsequent progression. As the Project moves into its PFS stage, the
Company will continue to work towards de-risking Monte Muambe and, with its
local partners, to optimise its technical, commercial and financial
parameters. We believe the timing for this achievement is impeccable, at a
time where the global rare earths supply chain is diversifying away from
China's decades-long domination, and Western processing facilities are
starting to come online.
The magnet metals present at Monte Muambe are critical components of the
global green energy transition. The supply deficit for Neodymium and
Praseodymium Oxide is forecast to grow to 90,000 tonnes per year by 2040 and,
to allow the decarbonisation of energy sources, more magnet metals mines must
come on stream in the following years.
Altona intends to play its part in supporting this crucial agenda, by working
in a responsible manner to reduce the dependence on China for critical mineral
supplies. As Monte Muambe progresses, the Company will continue to make the
most of its knowledge of African geology, local networks, and presence on the
ground to acquire and develop new projects. This will be done with a focus on
short timelines to production, as well as diversifying the Company's exposure
in terms of deposit type (ionic clays) and of rare earths basket (heavy rare
earths).
Dr Cédric Simonet
CEO
Altona Rare Earths Plc
CORPORATE REVIEW
Financial Review
Balance sheet -investment, capital expenditure, equity placing and asset
growth
The Group's total assets have increased from £1.4m to £2.7m, largely due to
the £2m fundraise which the Company completed on 9 June 2023 in conjunction
with its LSE admission. These proceeds were used to fund the ongoing
exploration at MMM and meet corporate debts and expenditure. Total
non-current assets increased by £0.4m, to give total non-current assets at
year end of £1.4m. This mainly correlates to the intangible assets, such as
capitalised drilling, assay studies and licence costs in relation to MMM's
LPP7573L.
The cash position increased from £0.3m to £1.1m, giving the Group sufficient
funds to complete the MRE and Scoping Study at MMM, and commence Phase 3 of
the Farm-Out Agreement in the final quarter of 2023.
Total liabilities increased from £0.3m to £0.8m, mainly due to convertible
loan note that was entered into in February 2023 to enable the Group to
continue to meet its working capital obligations.
Overall, this resulted in an increase in the Group's net assets from £1.1
million as at 30 June 2022 to £1.9m at 30 June 2023.
Income Statement
The loss for the year was £1.3m as compared with a £0.8m loss in the prior
year. This increase mainly corresponds to the increase in legal and
professional fees of £0.2m arising from the change in exchange (from AQSE to
LSE) and the Fundraise. The Company also incurred finance costs of £0.2m
which arose from the £0.2m loans and £0.3m CLNs that were arranged during
the year.
The Company is focused on controlling administration costs and aims to keep
these to a minimum. Management use a KPI to monitor the ratio between
operating costs and corporate costs and ensure that, as far as possible, it is
maximised.
Liquidity and Cash Flow
The Group monitors its cash position, cash forecasts and liquidity regularly.
Net cash used in operating activities decreased from £0.8m to £0.6m, this
decrease is mainly due to the increase in creditors which were all paid down
post year end. Cash used in investing activities also decreased from £0.9m
to £0.5m as Phase 2 was extended whilst the Company waited for further monies
to be raised at the Fundraise.
During the last quarter of 2022, the Company entered into a short term loan
agreement for a £0.2m loan, and this was paid back before year end. In
February 2023, it also issued £0.3m of convertible loan notes with an
interest rate of 15%. These will be converted into shares or paid back in
full in May 2024 and have been included in the balance sheet as a short term
liability.
Warrants extension
In March 2023, the Company extended the expiry date of all existing warrants
to 31 March 2025 (in prior year the Company replaced all 20 pence warrants
with new warrants with an exercise price of 12 pence per Ordinary Shares).
This exercise was completed to recognise the value of shareholders who had
previously invested in the Company and were yet to see the expected growth.
Board appointments
On 9 June 2023:
· Cédric Simonet, the Company's Chief Operating Officer, was appointed
Chief Executive Officer
· Louise Adrian, the Company's Financial Controller, was appointed
Chief Financial Officer and an Executive Director
· Simon Charles was appointed as an Independent Non-Executive Director.
Christian Taylor-Wilkinson stepped down as both Chief Executive Officer and
Director on 9 June 2023. He remains as an employee of the Company in a
Business Development capacity.
Simon Tucker resigned as a Non-Executive Director on 2 August 2022.
London Stock Exchange Listing
On 1 June 2023, the Company announced that it had raised £2.0 million via an
oversubscribed placing of £1,677,300 and a subscription of £322,700 through
the issue of 40 million new ordinary shares at 5 pence per share, together the
"Fundraise". The Company also issued 4.9 million fee shares to various
advisers and Directors.
On 9 June 2023, the Company announced the Admission of the Company's entire
issued share capital to the Official List of the Financial Conduct Authority
by way of a Standard Listing under Chapter 14 of the Listing Rules and to
trading on the London Stock Exchange's Main Market for listed securities
("Admission"). The Company's shares are listed under the new ticker "REE".
Post Balance Sheet Events
On 25 September 2023, the Company announced the Monte Muambe Project's maiden
JORC Mineral Resource Estimate, with a total of 13.6 million tonnes at 2.42%
TREO at a cut-off grade of 1.5% TREO.
On 18 October 2023, the Company announced the completion of an updated
Competent Person Report for Monte Muambe, including a Scoping Study. More
information is given in the Operations Review.
Louise Adrian
CFO
Altona Rare Earths Plc
STATEMENT OF CONSOLIDATED PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
For the year ended 30 June 2023
2023 2022
£'000 £'000
Continuing operations:
Administrative expenses (1,068) (642)
Exploration costs (not capitalised) - (59)
Listing costs (48) (100)
Operating loss (1,116) (801)
Finance costs (180) -
Loss before taxation (1,296) (801)
Income tax - -
Loss for the year from continuing operations (1,296) (801)
Total loss for the year attributable to:
Owners of Altona Rare Earths Plc (1,221) (774)
Non-controlling interests (75) (27)
(1,296) (801)
Other comprehensive income
Items that may be reclassified subsequently to profit and loss:
Exchange differences on translation of foreign operations 17 2
(1,279) (799)
Total comprehensive loss attributable to:
Owners of Altona Rare Earths Plc (1,205) (773)
Non-controlling interests (74) (26)
(1,279) (799)
Earnings per share (expressed in pence per share)
- Total Basic and Diluted earnings per share (3.23)p (2.72)p
STATEMENT OF CONSOLIDATED FINANCIAL
POSITION
As at 30 June 2023
2023 2022
£'000 £'000
ASSETS
Non-current assets
Intangible assets 1,290 866
Tangible assets 146 173
Total non-current assets 1,436 1,039
Current assets
Trade and other receivables 168 119
Cash and cash equivalents 1,130 283
Total current assets 1,298 402
TOTAL ASSETS 2,734 1,441
LIABILITIES
Non-current liabilities
Deferred tax liabilities - (77)
Total non-current liabilities - (77)
Current liabilities
Trade and other payables (593) (314)
Convertible loan notes (256) -
Total current liabilities (849) (314)
TOTAL LIABILITIES (849) (391)
NET ASSETS 1,885 1,050
EQUITY
Share capital 2,239 1,790
Share premium 22,950 21,404
Share-based payment reserve 121 14
Other equity - CLN reserve 12 -
Foreign exchange reserve 17 1
Retained deficit (23,360) (22,139)
1,979 1,070
Non-controlling interest (94) (20)
TOTAL EQUITY 1,885 1,050
STATEMENT OF CONSOLIDATED CASH FLOWS
For the year ended 30 June 2023
2023 2022
£'000 £'000
Cash flows from operating activities
Loss for the year before taxation (1,296) (801)
Adjustments for:
Finance costs 65 -
Depreciation 24 5
Shares issued for services 306 10
Foreign exchange movements 25 2
Operating cashflows before movements in working capital (876) (784)
Increase in trade and other receivables (49) (98)
Increase in trade and other payables 277 50
228 (48)
Net cash used in operating activities (648) (832)
Cash flows from investing activities
Investment/acquisition of subsidiary, net of cash acquired (40) (80)
Purchases of property, plant and equipment (3) (178)
Purchases on intangible assets (462) (617)
Net cash used in investing activities (505) (875)
Cash flows from financing activities
Proceeds from issue of shares 2,000 1,688
Costs of issue (207) (78)
Proceeds from Convertible loan notes 275 -
Costs of Convertible loan notes (28) -
Proceeds from loans 150 -
Repayment of loans (150) (56)
Finance costs (40) -
Net cash generated from financing activities 2,000 1,554
Net increase/(decrease) in cash and cash equivalents 847 (153)
Cash and cash equivalents at beginning of the year 283 436
Cash and cash equivalents at the end of the year 1,130 283
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2023
Share capital Share Share-based payment reserve CLN Issue Retained deficit Total equity
premium Foreign exchange reserve
NCI
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 30 June 2021 1,632 19,869 - - - (21,365) - 136
Comprehensive income
Loss for the year - - - - - (774) (27) (801)
Currency translation - - 2 - - - - 2
NCI share in translation difference
- - (1) - - - 1 -
Total comprehensive income
- - 1 - - (774) (26) (799)
Transactions with owners recognised directly in equity
Issue of shares 158 1,627 - - - - - 1,785
Cost of shares issued - (92) - 14 - - - (78)
Additional transactions with NCI
- - - - - - 6 6
Total transactions with owners recognised directly in equity
158 1,535 - 14 - - 6 1,713
Balance at 30 June 2022 1,790 21,404 1 14 - (22,139) (20) 1,050
Comprehensive income
Loss for the year - - - - - (1,221) (75) (1,296)
Currency translation - - 17 - - - - 17
NCI share in translation difference
- - (1) - - - 1 -
Total comprehensive income
- - 16 - - (1,221) (74) (1,279)
Transactions with owners recognised directly in equity
Issue of shares 449 1,797 - - - - - 2,246
Cost of shares issued - (251) - 41 - - - (210)
Share-based payments - - - 66 - - - 66
CLN Issue - - - - 12 - - 12
Total transactions with owners recognised directly in equity
449 1,546 - 107 12 - - 2, 114
Balance at 30 June 2023 2,239 22,950 17 121 12 (23,360) (94) 1,885
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
ACCOUNTING POLICIES
GENERAL INFORMATION
Altona Rare Earths Plc (the "Company") is incorporated and domiciled in
England & Wales, with registered number 05350512. Its registered office is
at Eccleston Yards, 25 Eccleston Place, London SW1W 9NF.
On 9 June 2023, the Company announced its admission to the Main Market of the
London Stock Exchange under the Standard Segment of the Official List under
the ticker "LSE:REE". The Company ceased trading on the AQSE Growth Market
on 17 March 2023.
The principal activity of the Company and its subsidiaries (the "Group") is in
rare earths exploration, and the development of appropriate exploration
projects, focusing on opportunities in Africa. The Group is made up of the
Company and the subsidiaries as set out in note 10 below.
BASIS OF PREPARATION
The consolidated financial statements have been prepared in accordance with
UK-adopted international accounting standards and the requirements of the
Companies Act 2006. The principal accounting policies are summarised below.
They have been applied consistently throughout the year. The financial
statements have been prepared on the historical cost basis, except for the
assets acquisition which was measured at fair value.
The functional currency for each entity in the Group is determined as the
currency of the primary economic environment in which it operates. The
functional currency of the parent company is Pounds Sterling (£) as this is
the currency that finance is raised in. The functional currency of its main
subsidiary is Mozambique Meticals (MTN) as this is the currency that mainly
influences labour, material and other costs of providing services. The Group
has chosen to present its consolidated financial statements in Pounds Sterling
(£), as the Directors believe it is the most relevant presentational currency
for users of the consolidated financial statements. All values are rounded
to the nearest thousand pounds (£'000) unless otherwise stated. Foreign
operations are included in accordance with the policies set out below.
The preparation of financial statements requires the use of certain critical
accounting estimates. It also requires management to exercise its judgement in
the process of applying the Group's accounting policies. The areas involving a
higher degree of judgement or complexity, or areas where assumptions and
estimates are significant to the financial information are disclosed in Note
2.
GOING CONCERN
The Company raises money for exploration and capital projects as and when
required. There can be no assurance that the Company's projects will be fully
developed in accordance with current plans or completed on time or to budget.
Future work on the development of these projects, the levels of production and
financial returns arising therefrom, may be adversely affected by factors
outside the control of the Company.
An operating loss is expected in the 12 months subsequent to the date of these
financial statements. As a result the Group will need to raise funding to
provide additional working capital within the next 12 months. The ability of
the Group to meet its projected expenditure is dependent on these further
equity injections and / or the raising of cash through bank loans or other
debt instruments, and/or government grants, and/or loans. These conditions
necessarily indicate that a material uncertainty exists that may cast
significant doubt over the Group's ability to continue as a going concern and
therefore their ability to realise their assets and discharge their
liabilities in the normal course of business. Whilst acknowledging this
material uncertainty, the Directors remain confident of raising finance and
therefore, the Directors consider it appropriate to prepare the consolidated
financial statements on a going concern basis. The consolidated financial
statements do not include the adjustments that would result if the Group were
unable to continue as a going concern.
The Auditors have made reference to going concern by way of a material
uncertainty within the financial statements.
POST REPORTING DATE EVENTS
On 11 July 2023 an additional 1,033,600 Ordinary Shares were issued in lieu
of fees of £51,680, including an amount of £50,000 to settle fees owed to
Leander PR Limited, a company wholly owned by Christian Taylor-Wilkinson.
On 25 July 2023, Cedric Simonet transferred the 0.1% of the share capital of
Altona Mozambique, Lda and Altona Mozambique II, Lda that he was holding on
behalf of Altona Rare Earths Mauritius Limited to Altona Rare Earths
Mauritius Limited, (both for nil consideration), giving it a 100% total
holding of the share capital in both companies.
On the same day, Altona Rare Earths Mauritius Limited, transferred 5% of the
share capital of Altona Mozambique, Lda and Altona Mozambique II Lda, (for
nil consideration), to Ossanzaya Empreendimentos Lda, a company registered
in Mozambique.
On 25 September 2023, the Company published its Maiden Resource Estimate which
reported that there is an estimated 13.6 million tons at 2.42% TREO with a
cut-off grade of 1.5% TREO. The Scoping Study published on 18 October 2023
demonstrated the potential for Monte Muambe to become a viable mining
operation and provided the Company with sufficient confidence to proceed with
the Prefeasibility Study and with Phase 3 of the Farm-Out Agreement.
The Company has also initiated the contractual and administrative process to
increase its holding in MMM to 51% for a further consideration of £40,000 and
one million shares.
-ends-
1 (#_ftnref1) Adamas Intelligence, "Rare Earth Magnet Market Outlook to
2040", Q2 2023
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR NKQBQNBDDFKBRecent news on Altona Rare Earths
See all newsRCS - Altona Rare Earths - Investor presentation on Gallium discovery
AnnouncementREG - Altona Rare Earths - Total Voting Rights
AnnouncementREG - Altona Rare Earths - Update On Monte Muambe Gallium
AnnouncementREG - Official List - Official List Notice
AnnouncementREG - Stock Exch Notice - Admission to Trading - 09/04/2025
Announcement