REG - Arc Minerals Limited - Interim Results
20 January 2021
Arc Minerals Ltd
('Arc' or the 'Company')
Interim Results
The Company is pleased to announce its unaudited financial results for the six months ended 30 September 2020.
The Interim Results are set out on the following pages.
Conversion of Loan Notes
The Company also announces that the remaining Convertible Loan Note ("CLN") Lender has notified the Company that they are converting at the last equity financing price of 3.5 pence per share the remaining balance of the principal CLN debt plus accrued interest, totalling £220,275, resulting in the issuance of 6,293,572 ordinary shares of no par value in the Company ("Conversion Shares") to the CLN Lender. Following the conversion, the balance of the convertible loan note facility will be nil.
Application will be made for the Conversion Shares to be admitted to trading on the AIM market of the London Stock Exchange ("Admission"). The Conversion Shares will rank pari passu in all respects with the existing ordinary shares of no par value in the Company ("Ordinary Shares"). Admission is expected to occur on or around 26 January 2021.
Total voting rights
Following the issue of the Conversion Shares, the total issued share capital of the Company consists of 1,044,064,936 Ordinary Shares of no par value with voting rights. The Company does not hold any Ordinary Shares in treasury. Therefore, the total number of voting rights in the Company is 1,044,064,936 and this figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine whether they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FCA's Disclosure and Transparency Rules.
**ENDS**
Contacts
Arc Minerals Ltd
Nick von Schirnding (Chairman)
+44 (0) 20 7917 2942
SP Angel (Nominated Adviser & Joint Broker)
Ewan Leggat / Adam Cowl
+44 (0) 20 3470 0470
WH Ireland Ltd (Joint Broker)
Harry Ansell / Katy Mitchell
+44 (0) 20 7220 1666
For more information visit www.arcminerals.com.
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.
Forward-looking Statements
This news release contains forward-looking statements that are based on the Company's current expectations and estimates. Forward-looking statements are frequently characterised by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate", "suggest", "indicate" and other similar words or statements that certain events or conditions "may" or "will" occur. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause actual events or results to differ materially from estimated or anticipated events or results implied or expressed in such forward-looking statements. Such factors include, among others: the actual results of current exploration activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; possible variations in ore grade or recovery rates; accidents, labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing; and fluctuations in metal prices. There may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Any forward-looking statement 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 statement, whether as a result of new information, future events or results or otherwise. Forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein.
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
GROUP STATEMENT OF COMPREHENSIVE INCOME
for the period ended 30 September 2020
Six Months to
30 Sep
2020
Six Months to
30 Sep
2019
(Unaudited)
(Unaudited)
Notes
£ 000's
£ 000's
Administrative expenses
(1,062)
(944)
Share based payments
(373)
(138)
Operating Income / (Loss)
(1,435)
(1,082)
Impairment - Casa Mining Ltd
-
(15,000)
Income / (Loss) before tax
(1,435)
(16,082)
Income tax expense
-
-
Income / (Loss) for the period
3
(1,435)
(16,082)
Other comprehensive income / (loss)
Items that may be reclassified subsequently to profit or loss:
Currency translation differences
(376)
(872)
Other comprehensive income / (loss) for the period, net of tax
(376)
(872)
Total comprehensive income / (loss) for the period
(1,811)
(16,954)
Income / (Loss) attributable to:
Equity holders of the parent
(1,344)
(15,978)
Non-controlling interest
(91)
(104)
(1,435)
(16,082)
Total comprehensive income / (loss) attributable to:
Equity holders of the parent
(1,592)
(16,554)
Non-controlling interest
(219)
(400)
(1,811)
(16,954)
Loss per share from continuing and discontinued operations attributable to the owners of the parent during the period
(expressed in pence per share)
- Basic
3
(0.16)
(2.26)
Group Statement of Financial Position
as at 30 September 2020
As at
30 Sep
2020
As at
30 Sep
2019
(Unaudited)
(Unaudited)
Notes
£ 000's
£ 000's
ASSETS
Non-current assets
Intangible assets
5
4,070
2,831
Fixed assets
6
2,788
3,475
Investments
4
-
370
Total non-current assets
6,858
6,676
Current assets
Inventories - Zamsort Limited
19
261
Other receivables
4,240
175
Available for sale financial investments
7
-
12,719
Cash and cash equivalents
1,156
105
Total current assets
5,415
13,260
TOTAL ASSETS
12,273
19,936
LIABILITIES
Non-current liabilities
Long term payables
8
(3,223)
(2,357)
Total non-current liabilities
(3,223)
(2,357)
Current liabilities
Trade and other payables
(551)
(1,597)
Available for sale financial liabilities
10
-
(1,946)
Total current liabilities
(551)
(3,543)
TOTAL LIABILITIES
(3,774)
(5,900)
NET ASSETS
8,499
14,036
EQUITY
Share capital
9
-
-
Share premium
55,396
50,581
Share based payments reserve
1,371
1,458
Warrant reserve
84
-
Foreign exchange reserve
(467)
1,285
Retained earnings
(48,871)
(40,520)
Non-controlling interest
986
1,232
TOTAL EQUITY
8,499
14,036
GROUP STATEMENT OF CHANGES IN EQUITY
for the period ended 30 September 2020
Share
capital
Share premium
Foreign exchange reserve
Share based payment reserve
Warrant
Reserve
Retained earnings
Non-controlling
interest
Total
equity
£ 000's
£ 000's
£ 000's
£ 000's
£ 000's
£ 000's
£ 000's
£ 000's
As at 1 April 2019
-
50,222
2,157
1,320
-
(24,438)
696
29,957
Profit/(loss) for the period
-
-
-
-
-
(16,082)
-
(16,082)
Items that may be reclassified subsequently to profit or loss:
Currency translation differences
-
-
(872)
-
-
-
-
(872)
Other comprehensive income for the period
-
-
(872)
-
-
-
(872)
Total comprehensive income for the period
-
-
(872)
-
-
(16,082)
-
(16,954)
Share capital issued net of share issue costs
-
287
-
-
-
-
-
287
Warrants exercised
-
72
-
-
-
-
-
72
Share based payments granted
-
-
-
138
-
-
-
138
Increase of NCI in Zamsort
-
-
-
-
-
-
536
536
Total transactions with owners, recognised directly in equity
-
359
-
138
-
-
536
1,033
As at 30 September 2019
-
50,581
1,285
1,458
-
(40,520)
1,232
14,036
As at 1 April 2020
-
51,231
(91)
998
84
(47,436)
896
5,682
Profit/(loss) for the period
-
-
-
-
-
(1,435)
-
(1,435)
Items that may be reclassified subsequently to profit or loss:
Currency translation differences
-
-
(376)
-
-
-
-
(376)
Other comprehensive income for the period
-
-
(376)
-
-
-
-
(376)
Total comprehensive income for the period
-
-
(376)
-
-
(1,435)
-
(1,811)
Share capital issued net of share issue costs
-
4,053
-
-
-
-
-
4,053
Warrants exercised
-
112
-
-
-
-
-
112
Share based payments granted
-
-
-
373
-
-
-
373
Increase of NCI in Zamsort
-
-
-
-
-
-
90
90
Total transactions with owners, recognised directly in equity
-
4,165
-
373
-
-
90
4,628
As at 30 September 2020
-
55,396
(467)
1,371
84
(48,871)
986
8,499
GROUP CASH FLOW STATEMENT
for the period ended 30 September 2020
As at
30 Sep
2020
As at
30 Sep
2019
(Unaudited)
(Unaudited)
£ 000's
£ 000's
Cash flows from operating activities
Loss before tax
(1,435)
(16,082)
Depreciation
1
36
Impairment
-
15,000
Share based payments
373
138
Operating loss before changes in working capital
(1,061)
(908)
Decrease in trade and other receivables
156
415
Increase(decrease) in trade and other payables and available for sale liabilities
(457)
100
Net cash used in operating activities
(1,362)
(393)
Cash flows used in investing activities
Additions to intangible assets
(283)
(1,002)
Additions to property, plant and equipment
(62)
(360)
Investment in available-for-sale financial investments
-
(181)
Net cash used in investing activities
(345)
(1,543)
Cash flows from financing activities
Proceeds from issue of ordinary shares net of share issue cost
2,482
72
Long term payables
212
743
Net cash inflow from financing activities
2,694
815
Net increase/(decrease) in cash and cash equivalents
987
(1,121)
Cash and cash equivalents at beginning of period
169
1,226
Cash and cash equivalents at end of period
1,156
105
NOTES TO THE INTERIM FINANCIAL STATEMENTS
for the period ended 30 September 20201. Basis of preparation
The condensed consolidated interim financial statements have been prepared under the historical cost convention and on a going concern basis and in accordance with International Financial Reporting Standards and IFRIC interpretations adopted for use in the European Union ("IFRS") and those parts of the BVI Business Companies Act applicable to companies reporting under IFRS.
The condensed consolidated interim financial statements contained in this document do not constitute statutory accounts. In the opinion of the directors, the condensed consolidated interim financial statements for this period fairly presents the financial position, result of operations and cash flows for this period.
The Board of Directors approved this Interim Financial Report on 20 January 2021.
Statement of compliance
The condensed consolidated interim financial statements have been prepared in accordance with the requirements of the AIM Rules for Companies. As permitted, the Company has chosen not to adopt IAS 34 "Interim Financial Statements" in preparing these interim condensed consolidated interim financial statements. The condensed interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 March 2020, which have been prepared in accordance with IFRS as adopted by the European Union.
Accounting policies
The condensed consolidated interim financial statements for the period ended 30 September 2020 have not been audited or reviewed in accordance with the International Standard on Review Engagements 2410 issued by the Auditing Practices Board. The figures were prepared using applicable accounting policies and practices consistent with those adopted in the statutory annual financial statements for the year ended 31 March 2020.
Associates
Associates are entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting. Under the equity method, the investment is initially recognised at cost and the carrying amount is increased or decreased to recognise the investor's share of the profit or loss of the investee after the date of acquisition. The Group's investment in associates includes any goodwill identified on acquisition.
If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income is reclassified to profit or loss where appropriate.
The Group's share of post-acquisition profit or loss is recognised in the statement of comprehensive income, and its share of post-acquisition movements in other comprehensive income is recognised in the other comprehensive income section of the statement of comprehensive income with a corresponding adjustment to the carrying amount of the investment. When the Group's share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.
The Group determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amounts of the associate and its carrying value and recognises the amount adjacent to 'share of profit/(loss) of associates' in the statement of comprehensive income.
Gains and losses resulting from upstream and downstream transactions between the group and its associates are recognised in the Group's financial statements only to the extent of unrelated investor's interests in the associates. Unrealised losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the Group.
Dilution gains and losses arising in investments in associates are recognised in the statement of comprehensive income.
2. Financial Risk Management
Risks and uncertainties
The Board continually assesses and monitors the key risks of the business. The key risks that could affect the Group's medium-term performance and the factors that mitigate those risks have not substantially changed from those set out in the Group's 2020 Annual Report and Financial Statements, a copy of which is available from the Group's website: www.arcminerals.com. The key financial risks are market risk, including currency risk, and liquidity.
3. Loss per share
Six Months to
30 Sep
2020
Six Months to
30 Sep
2019
(Unaudited)
(Unaudited)
Notes
£ 000's
£ 000's
Loss from Continuing Operations
(1,435)
(16,082)
Weighted average number of ordinary shares used in calculating basic loss per share (000's)
920,057
709,921
Basic loss per share (expressed in pence)
(0.16)
(2.26)
As the inclusion of the share options would result in a decrease in the earnings per share, they are considered to be anti-dilutive and, as such, a diluted loss per share is not included.
4. Investment in Associates
Set out below are the associates of the Group.
Zaco
Total
£ 000's
£ 000's
1 April 2019
331
331
Additions
39
39
30 September 2019
370
370
1 April 2020
-
-
Additions
-
-
30 September 2020
-
-
During the year ended 31 March 2020, Zaco Investments Limited became a subsidiary of the Company.
Zaco is a Zambian-registered company, owned 72.5% by Unico Minerals Limited (52.5% at 31 March 2020). Unico is a wholly-owned subsidiary of Arc. The Chairman of Arc has been appointed Chairman of Zaco. Zaco owns a mineral license adjacent to the license of Zamsort Limited. The Zaco license has been actively explored during the year to date.
5. Intangible Assets
Zamsort
Zaco
Total
Deferred Exploration Costs
Deferred Exploration Costs
£ 000's
£ 000's
£ 000's
As at 1 April 2020
4,019
10
4,029
Additions
31
252
283
Foreign exchange
(165)
(77)
(242)
As at 30 September 2020
3,885
185
4,070
As at 30 September 2019
2,831
-
2,831
6. Fixed Assets
Processing Plant
Mining Equipment
Motor Vehicles
Furniture & Fittings
Total
£ 000's
£ 000's
£ 000's
£ 000's
£ 000's
Cost
At 1 April 2020
3,183
164
76
33
3,456
Disposals
-
-
-
-
-
Additions
38
-
20
4
62
Foreign exchange
(571)
(21)
(7)
(2)
(601)
At 30 September 2020
2,650
143
89
35
2,917
Depreciation
At 1 April 2020
-
(45)
(54)
(29)
(128)
Disposals
-
-
-
-
-
Depreciation
-
-
(1)
-
(1)
At 30 September 2020
-
(45)
(55)
(29)
(129)
Cost
At 1 April 2019
3,249
215
91
43
3,598
Disposals
-
-
-
-
-
Additions
350
-
-
10
360
Foreign exchange
(217)
(6)
(3)
(3)
(229)
At 30 September 2019
3,382
209
88
50
3,729
Depreciation
At 1 April 2019
-
(172)
(42)
(25)
(239)
Disposals
-
21
-
-
21
Depreciation
-
(13)
(11)
(12)
(36)
At 30 September 2019
-
(164)
(53)
(37)
(254)
NBV - 30 September 2020
2,650
98
34
6
2,788
NBV - 30 September 2019
3,382
45
35
13
3,475
7. Available for Sale Financial Investments
Casa
Andiamo
Šturec
Total
£ 000's
£ 000's
£ 000's
£ 000's
As at 30 September 2019
6,719
-
6,000
12,719
As at 30 September 2020
-
-
-
-
During the year ended 31 March 2019 the Company sold its interest in Andiamo.
During the year ended 31 March 2020 the Company sold its interests in Casa and Sturec.
8. Long Term Payables
Group
Group
2020
2019
Long term payables
£ 000's
£ 000's
Shareholder loan
3,223
2,357
3,223
2,357
The shareholder loan represents the aggregate of (i) a loan from the 34% minority shareholder to Zamsort Limited and (ii) a loan from the 27.5% minority shareholder to Zaco Investments Limited. The Company has also provided loans to these companies on similar terms which had a balance on the reporting date of £6,849,000.
9. Share Capital
The authorised share capital of the Company and the called up and fully paid amounts at 30 September 2020 were as follows:
A) Authorised
£ 000's
Unlimited ordinary shares of no par value
-
B) Called up, allotted, issued and fully paid
Number
of shares
Nominal
value
As at 1 April 2020
737,927,497
-
Additions:
15 May 2020, at 1.7p(i)
218,878,594
-
15 May 2020, at 2.58p(ii)
10,084,183
19 May 2020, at 1.8p(iii)
10,000,000
-
4 August 2020, at 3p(iv)
1,029,412
-
6 August 2020, at 3p(v)
794,118
-
14 August 2020, at 3p(vi)
294,117
-
9 September 2020, at 3p(vii)
1,620,586
-
As at 30 September 2020
980,628,507
-
(i) As announced on 15 May 2020, the Company issued a total of 218,878,549 shares at 1.7p per share pursuant to a placing to raise GBP 2.37 million (139,451,726 shares) and to certain convertible loan note lenders who converted USD 1.5 million (79,426,868 shares) of convertible loan note debt as part of the placing.
(ii) Issued pursuant to the Drill for Equity programme first announced on 29 July 2019 whereby the Company's drilling contractor in Zambia agreed to receive payment for 50% of total drilling costs by way of shares in Arc. This arrangement has ended.
(iii) Issued as consideration for the acquisition of an additional 20% equity stake in Zaco Ltd, increasing Arc's interest in Zaco from 52.5% to 72.5%.
(iv) Issued pursuant to an exercise of warrants for cash consideration of GBP 30,882.
(v) Issued pursuant to an exercise of warrants for cash consideration of GBP 23,824.
(vi) Issued pursuant to an exercise of warrants for cash consideration of GBP 8,824.
(vii) Issued pursuant to an exercise of warrants for cash consideration of GBP 48,618.
10. Post Balance Sheet Event
On 20 January 2021, the Company issued 6,293,572 shares in conversion to equity of the remaining balance of the convertible loan notes totalling GBP 220,275 at the last financing price. Subsequent to this conversion, the balance of convertible loan notes is nil.
11. Other Matters
The condensed consolidated interim financial statements set out above do not constitute the Group's statutory accounts for the period ended 30 September 2020 or for earlier periods but are derived from those accounts where applicable.
A copy of this interim statement is available on the Company's website: www.arcminerals.com
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