REG - Arkle Resources PLC - Final Results for the Year Ended 31 December 2021
30/06/2022 07:00
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RNS Number : 7032Q Arkle Resources PLC 30 June 2022
This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the Company's obligations under Article 17 of
MAR.
30 June 2022
Arkle Resources PLC
("Arkle", the "Group" or the "Company")
Final Results for the Year Ended 31 December 2021
Arkle Resources PLC (LON: ARK), the Irish gold and zinc exploration and
development company, is pleased to announce its audited results for the year
ending 31 December 2021.
Chairman's Statement
Arkle is an Irish based zinc and gold explorer with an active zinc exploration
project in the Stonepark area of Limerick and ongoing gold exploration in
Wexford / Wicklow and in Donegal. In recent months, the directors have also
been examining resource projects in other jurisdictions, resulting in our
entry into Zimbabwe in June 2022.
It is frustrating to be an explorer at present. With zinc selling above $3,700
a tonne and gold over $1,800 an ounce it should be a good time for explorers.
The future outlook for metals has rarely been better. There is an increasing
demand and consumption of metals, being driven by the green economy: electric
vehicles require substantial quantities while one offshore wind turbine
contains up to 1,600 tonnes of metal.
Yet there has been a substantial drop in exploration expenditure. We
anticipate there can only be one outcome - higher prices. For those of us
willing to take the chance the potential returns are greater.
There has been a drop in exploration, which some consider attributable to some
speculative capital being use on alternative investments in technology and
crypto. Recent collapses in these sectors might be a wake-up call.
Additionally, mining is not seen to be environmentally friendly, and the
industry tends to underplay the positive impact it has on job creation,
infrastructure development and tax receipts.
Ireland, for long a beacon on how to provide a good structure for exploration,
is faltering. Long delays in renewing exploration permits and some unhelpful
political statements increase uncertainty. An exploration dollar is an orphan
with no loyalties. It goes where it is most wanted. Anything that increases
uncertainty will have a detrimental impact on exploration. There are more
commercial deposits to be discovered in Ireland. For more than 50 years
Ireland has been at the forefront with clear, transparent and stable policies
relating to title, tax and environmental commitments. It is hoped that the
current uncertainties are purely temporary.
Turning to the ongoing activities of Arkle. Very promising results have come
from drilling undertaken by our partner, Group Eleven, on our 23.44% owned
Stonepark zinc licences in Limerick. A deep hole in an undrilled part of the
block discovered a previously unknown fault. Large Irish zinc deposits are
generally discovered at the base of a fault. Group Eleven has been exploring
their own ground prior to this in an attempt to find such a fault. The
Stonepark results may point toward a large zinc target a few hundred metres to
the north of the discovery hole. While examining how best to proceed with this
discovery, three holes will be drilled in and around the existing shallow 5
million tonne zinc discovery at Stonepark North.
Our gold exploration in Wicklow / Wexford is once again proving to be an
enigma. A 13 hole programme produced outstanding results from a few holes then
either the veins petered out or we missed them in drilling. We have spent time
re-examining the data and we have commissioned a full review and modelling
exercise on the extensive database we hold. While awaiting this we are looking
at some further detailed sampling and mapping using the new technology that
successfully identified new zones. There remains huge potential in the area
and we intend to drill.
In the Inishown peninsula of Donegal we have a very specific target. We had
hoped to drill this area in early 2022 but months of delays in renewing
licences means we have missed the window, but we intend to drill in the
future.
Despite our good gold prospects, the recent significant zinc results and very
high metal prices, the Arkle share price has languished. The directors have
concluded that it is worthwhile examining potential opportunities outside of
Ireland, which we have been doing. Most of the projects we have seen have been
worked before and / or shopped around and have not been pursued further.
We have developed a focus on battery metals: lithium, cobalt, copper and rare
earths. As a first tentative low cost step into this new area, post year-end
we were awarded three licences in Southern Zimbabwe, covering 163 hectares to
prospect for lithium. These licences contain hard rock spodumene which is
known to contain lithium and the area saw mining of lepidolite (a lithium
bearing mineral) in the late 1960s. Zimbabwe is a major hard rock lithium
producer.
We are also examining a specific exploration opportunity in another
jurisdiction. I look forward to updating shareholders on this as soon as
possible.
John Teeling
Chairman
29 June 2022
Enquiries:
Arkle Resources PLC
John Teeling, Chairman +353 (0) 1 833 2833
Jim Finn, Finance Director +353 (0) 1 833 2833
SP Angel Corporate Finance LLP
Nominated Adviser & Joint Broker
Matthew Johnson/Adam Cowl +44 (0) 203 470 0470
First Equity Limited
Joint Broker
Jason Robertson +44 (0) 207 374 2212
BlytheRay +44 (0) 207 138 3204
Megan Ray
Rachael Brooks
Teneo
Luke Hogg +353 (0) 1 661 4055
Ciara Wylie +353 (0) 1 661 4055
ARKLE RESOURCES PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
2021 2020
€ €
Administrative expenses (320,266) (324,099)
Impairment of exploration and evaluation assets - (330,000)
Loss from operations (320,266) (654,099)
Profit/(loss) due to fair value volatility of warrants 746,526 (441,829)
Profit/(loss) before tax 426,260 (1,095,928)
Tax expense - -
Profit/(loss) for the year 426,260 (1,095,928)
Total comprehensive income 426,260 (1,095,928)
Earnings per share attributable to the ordinary equity holders of the parent
cents cents
Profit/(loss) per share - Basic & Diluted 0.14 (0.50)
ARKLE RESOURCES PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2021
2021 2020
€ €
Assets
Non-current assets
Intangible assets 3,831,080 3,373,488
Current assets
Other receivables 32,635 21,923
Cash and cash equivalents 79,678 684,837
112,313 706,760
Total assets 3,943,393 4,080,248
Liabilities Current liabilities
Trade and other liabilities (233,872) (176,664)
Warrants (159,672) (906,198)
Total liabilities (393,544) (1,082,862)
Net assets 3,549,849 2,997,386
Issued capital and reserves attributable to owners of the parent
Called-up Share capital - Deferred 992,337 992,337
Called-up Share capital - Ordinary 764,956 742,612
Share premium reserve 6,680,245 6,605,681
Share based payments reserve 156,494 127,199
Retained deficit (5,044,183) (5,470,443)
TOTAL EQUITY 3,549,849 2,997,386
ARKLE RESOURCES PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31
DECEMBER 2021
Called up Share Called up Share Share Share Based Payment Retained
Capital Capital Ordinary Premium Reserve Deficit Total
Deferred
€ € € € € €
At 1 January 2021 992,337 742,612 6,605,681 127,199 (5,470,443) 2,997,386
Shares issued - 22,344 74,564 - - 96,908
Credit to equity for equity-settled share-based payments - - - 29,295 - 29,295
Profit for the year - - - - 426,260 358,250
At 31 December 2021 992,337 764,956 6,680,245 156,494 (5,044,183) 3,549,849
At 1 January 2020 - 1,323,116 6,209,190 44,989 (4,314,086) 3,263,209
Sub-division of shares 992,337 (992,337) - - - -
Shares issued - 411,833 396,491 - - 808,324
Share issue expenses - - - - (60,429) (60,429)
Credit to equity for equity-settled share-based payments - - 82,210 - 82,210
-
Loss for the year - - - - (1,095,928) (1,095,928)
At 31 December 2020 992,337 742,612 6,605,681 127,199 (5,470,443) 2,997,386
Deferred share capital
The deferred share reserve comprises of the value of the deferred shares that
arose when the Company divided the ordinary shares via special resolution on
22 April 2020 the shares into 500,000,000 deferred shares of 0.75 cent each
and 500,000,000 ordinary shares of 0.25 cent each.
Called up ordinary share capital
The called up ordinary share capital reserve comprises of the nominal value of
the issued share capital of the Company.
Share premium
The share premium reserve comprises of the excess of monies received in
respect of share capital over the nominal value of shares issued.
Share based payment reserve
The share based payment reserve arises on the grant of share options to
directors and consultants under the share options plan. Share options expired
are reallocated from share based payment reserve to retained deficit at their
grant date fair value.
Retained deficit
Retained deficit comprises accumulated losses in the current and prior
financial years.
ARKLE RESOURCES PLC
CONSOLIDATED CASH FLOW STATEMENT
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
2021 2020
€ €
Cash flows from operating activities
Profit / (loss) for the year 426,260 (1,095,928)
Adjustments for
Impairment of exploration and evaluation assets - 330,000
Share based payments charge 29,295 42,679
Fair Value movement of warrants (746,526) 441,829
Foreign exchange (25,527) (4,847)
(316,498) (286,267)
Movements in working capital:
Increase in trade and other receivables (10,712) (18,059)
Increase / (decrease) in trade and other payables 57,208 (30,688)
Cash used in operations (270,002) (335,014)
Net cash used in operating activities (270,002) (335,014)
Cash flows from investing activities
Payments for exploration and evaluation (457,592) (218,247)
Net cash used in investing activities (457,592) (218,247)
Cash flows from financing activities
Proceeds from issue of equity shares 96,908 1,254,049
Share issue expenses - (60,429)
Net cash generated from financing activities 96,908 1,193,620
Net cash (decrease) / increase in cash and cash equivalents (630,686) 640,359
Cash and cash equivalents at the beginning of year 684,837 39,631
Exchange gains on cash and cash equivalents 25,527 4,847
Cash and cash equivalents at the end of the year 79,678 684,837
Notes:
1. Accounting Policies
There were no changes in accounting policies from those used to prepare the
Group's Annual Report for financial year ended 31 December 2020. The
financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRSs) as adopted by the European Union and in
accordance with the Companies Act 2014.
2. Earnings per Share
(i) Earnings per share
Basic profit/(loss) per share is computed by dividing the loss after taxation
for the year attributable to ordinary shareholders by the weighted average
number of ordinary shares in issue and ranking for dividend during the year.
Diluted profit/(loss)loss per share is computed by dividing the loss after
taxation for the year by the weighted average number of ordinary shares in
issue, adjusted for the effect of all dilutive potential ordinary shares that
were outstanding during the year.
The following tables sets out the computation for basic and diluted earnings
per share (EPS):
2021 2020
cents cents
Profit/(Loss) per share - Basic and Diluted 0.14 (0.50)
Total diluted earnings per share attributable to the ordinary equity holders
of the Company
0.14 (0.50)
(ii) Reconciliation of earnings used in calculating earnings per share
Basic loss per share
The earnings and weighted average number of ordinary shares used in the
calculation of basic loss per share are as follows:
Profit/(loss) from continuing operations attributable to the ordinary equity
holders of the Company
€ €
Used in calculating basic earnings per share 426,260 (1,095,928)
Used in calculating diluted earnings per share 426,260 (1,095,928)
(iii) Denominator
2021 2020
Number Number
For basic and diluted earnings per share 305,517,186 220,039,097
Basic and diluted profit/(loss) per share is the same as the effect of the
outstanding share options and warrants is anti-dilutive.
3. Going Concern
The Group generated a profit for the financial year of €426,260 (2020: loss
€1,095,928) and the Group had net current liabilities of €281,231 (2020:
net current liabilities €376,102) at the statement of financial position
date leading to concern about the Group's ability to continue as a going
concern.
The Group had a cash balance of €79,678 (2020: €684,837) at the statement
of financial position date.
Included in current liabilities is an amount of €172,500 (2020: €127,500)
owed to key management personnel in respect of remuneration due at the
statement of financial position. Key management have confirmed that they will
not seek settlement of these amounts in cash for a period of at least one year
after the date of approval of the financial statements or until the Group has
generated sufficient funds from its operations after paying its third party
creditors.
The directors have prepared cashflow projections for a period of at least
twelve months from the date of approval of these financial statements. The
cashflow projections include any anticipated impacts of the Covid-19 pandemic
on the Group and Company as well as the minimum spend/cash call requirements
in relation to licenses held by the Group. As the Group and the Company are
not revenue or cash generating they rely on raising capital from the public
market. The cash flow projections prepared by the Group and Company indicate
that additional finances will be required to meet the obligations of the Group
and Company for a period of at least twelve months from the date of approval
of these financial statements. This amounts to a material uncertainty that may
cast significant doubt on the Group's ability to continue as a going concern.
The directors are confident that additional capital can be raised as required.
The Group received £86,250 from the conversion of warrants during the
financial year. Subsequent to year end, pursuant to the receipt of warrant
conversion notices, the Group also raised £150,400 in February 2022 and
£46,600 in April 2022. Further information is detailed in Note 8.
As in previous years the Directors have given careful consideration to the
appropriateness of the going concern basis in the preparation of the financial
statements and believe the going concern basis is appropriate for these
financial statements. The financial statements do not include any adjustment
to the carrying amount, or classification
4. Intangible Assets
Exploration and Evaluation: 2021 2020
€ €
Cost:
At 1 January 3,373,488 3,445,710
Additions 457,592 257,778
Impairment - (330,000)
At 31 December 3,831,080 3,373,488
Carrying amount:
At 31 December 3,831,080 3,373,488
In 2012 the Group entered into an agreement with Teck Ireland Limited
("Teck"), a subsidiary of Teck Resources Limited, which gave Teck the option
of earning a 75% interest in licences held by the Group in Cavan/Meath by
spending €1.35 million on the licences in order to earn the option to
acquire 75% interest. As per the agreement the licences had been transferred
into a new company, Oldcastle Zinc Limited. As at 31 December 2019 Teck had
completed €1.35 million worth of expenditure to give them a total of 75% in
the company.
On 10 November 2020, the Group and Teck Ireland Limited agreed to terminate
the Oldcastle agreement and dissolve the joint venture. Accordingly, the
directors have impaired in full all expenditure relating to the Oldcastle
licences, resulting in an impairment charge of €330,000 in the prior year.
In 2007 the Group entered into an agreement with Teck Cominco which gave Teck
Cominco the option to earn a 75% interest in a number of other licences held
by the Group. Teck Cominco had to spend CAD$3m to earn the interest. During
2012 the relevant licences were transferred to a new company, TILZ Minerals
Limited, which at 31 December 2020 was owned 23.44% (2019: 23.44%) by Limerick
Zinc Limited (subsidiary of Arkle Resources plc) and 76.56% (2019: 76.56%) by
Group Eleven Resources Corp (third party).
On 13 September 2017 the board of Arkle Resources plc were informed that Group
Eleven Resources Corp. a private company, has acquired the 76.56% interest
held by Teck Ireland in TILZ Minerals. Arkle Resources plc owns the remaining
23.44%.
The Group's share of expenditure on the licences continues to be capitalised
as an exploration and evaluation asset. The Group is subject to cash calls
from Group Eleven Resources Corp. in respect of the financing of the ongoing
exploration and evaluation of these licences. In the event that the Group
decides not to meet these cash calls its interest in TILZ Minerals Limited may
be diluted accordingly.
The realisation of the intangible assets is dependent on the discovery and
successful development of economic reserves which is subject to a number of
risks as outlined below:
The Group's exploration activities are subject to a number of significant and
potential risks including:
- uncertainties over development and operational
risks;
- compliance with licence obligations;
-ability to raise finance to develop assets;
- liquidity risks; and
- going concern risks.
The directors are aware that by its nature there is an inherent uncertainty in
such exploration and evaluation expenditure as to the value of the asset.
Having reviewed the carrying value of exploration and evaluation of assets at
31 December 2021 the directors are satisfied that the value of the intangible
asset is not less than carrying value.
Segmental Analysis
2021 2020
€ €
Limerick 1,600,424 1,600,424
Oldcastle - -
Rest of Ireland 2,230,656 1,773,064
3,831,080 3,373,488
5. Share Capital and Share Premium
2021 2020
€ €
Authorised:
500,000,000 Ordinary shares of €0.0025 each 1,250,000 1,250,000
500,000,000 Deferred shares of €0.0075 each 3,750,000 3,750,000
5,000,000 5,000,000
Deferred Shares - nominal value of €0.0075
Share Share
Number Capital Premium
€ €
At 1 January 2021 132,311,593 992,337 -
31 December 2021 132,311,593 992,337 -
Ordinary Shares - nominal value of €0.0025
Allotted, Called-Up and Fully Paid:
Share Share
Number Capital Premium
€ €
At 1 January 2020 132,311,593 1,323,116 6,209,190
Transfer to deferred shares - (992,337) -
Issued during the financial year 164,733,333 411,833 396,491
At 31 December 2020 297,044,926 742,612 6,605,681
Issued during the financial year 8,937,500 22,344 74,564
31 December 2021 305,982,426 764,956 6,680,245
Movement in shares
On 19 January 2021, a total of 8,937,500 shares were issued on the exercise of
8,937,500 warrants at a price of 0.5p and 1.2p per share to provide additional
working capital and fund development costs.
6. Share Based Payments
Equity-settled share-based payments are measured at fair value at the date of
grant.
The Group plan provides for a grant price equal to the average quoted market
price of the ordinary shares on the date of grant.
OPTIONS
2021 2021 2020 2020
Options Weighted average exercise price in pence Options Weighted average exercise price in pence
Outstanding at beginning of the financial year 13,100,000 1.22 2,800,000 2.276
Granted during the financial year 3,000,000 1.80 10,300,000 0.93
Outstanding at the end of the financial year 16,100,000 1.32 13,100,000 1.22
Exercisable at the end of the financial year 16,100,000 1.32 13,100,000 1.22
On 9 March 2021 a total of 3,000,000 options with an exercise price of 1.8p
per option were granted to the directors with a fair value of €29,295. The
fair value was calculated using the Black-Scholes valuation model.
The inputs into the Black-Scholes valuation model were as follows:
Grant 9 March 2021
Weighted average share price at date of grant (in pence) 1.0p
Weighted average exercise price (in pence) 1.8p
Expected volatility 116.32%
Expected life 7 years
Risk free rate 0.1%
Expected dividends none
Expected volatility was determined by management based on their cumulative
experience of the movement in share prices over the years.
The terms of the options granted do not contain any market conditions within
the meaning of IFRS 2.
The Group capitalised expenses of €Nil (2020: €39,531) and expensed costs
of €29,295 (2020: €42,679) relating to equity-settled share-based payment
transactions during the financial year.
7. Warrants
Fair Value
2021 2020
€ €
At 1 January 906,198 18,644
FV of warrants issued during the year at grant date - 445,725
FV of warrants exercised during the year (68,010) -
Movement in fair value (678,516) 441,829
At 31 December 159,672 906,198
Number
2021 2021 2020 2020
Warrants Weighted average exercise price in pence Warrants Weighted average exercise price in pence
Outstanding at beginning of the financial year 119,400,000 0.9 46,203,312 4.7
Granted during the financial year - 125,400,000 0.9
Expired during the financial year - (46,203,312) 4.7
Exercised during the financial year (8,937,500) 0.5 (6,000,000) 0.5
Outstanding and exercisable at the end of the financial year 110,462,500 0.9 119,400,000 0.9
On 19 January 2021 a total of 3,000,000 (2020: 6,000,000) warrants with an
exercise price of 0.5p per warrant were exercised with a fair value of
€27,665. On 31 December 2021 the fair value for the outstanding warrants was
€75,857 (2020: €396,040). The gain due to the movement in fair value of
€292,518 (2020: loss €217,001) was included in the Consolidated Statement
of Comprehensive Income. The fair value was calculated using the Black-Scholes
valuation model.
On 19 January 2021 a total of 5,937,500 warrants with an exercise price of
1.2p per warrant were exercised with a fair value of €40,345. On 31 December
2021 the fair value for the outstanding warrants was €83,815 (2020:
€510,158). The gain due to the movement in fair value of €385,998 (2020:
loss €510,158) was included in the Consolidated Statement of Comprehensive
Income. The fair value was calculated using the Black-Scholes valuation model.
8. Post Balance Sheet Events
On 22 February 2022, the Company announced that, pursuant to the receipt of
warrant conversion notices, it had raised £150,400 from the issue of
30,080,000 ordinary shares of €0.0025 each at the exercise price of 0.5
pence per share.
On 28 April 2022, the Company announced that, pursuant to the receipt of
warrant conversion notices, it had raised £46,600 from the issue of 9,320,000
ordinary shares of €0.0025 each at the exercise price of 0.5 pence per
share.
9. Annual General Meeting
The Company's Annual General Meeting will be held at held at the Hotel Riu
Plaza The Gresham, 23 O'Connell Street Upper, North City Dublin, D01 C3W7,
Ireland on 5 August 2022 at 10.00am.
General Information
The financial information set out above does not constitute the Company's
financial statements for the year ended 31 December 2021. The financial
information for 2020 is derived from the financial statements for 2020 which
have been delivered to the Companies Registration Office. The auditors have
reported on 2020 statements; their report was unqualified. The financial
statements for 2021 will be delivered to the Companies Registration Office.
A copy of the Company's Annual Report and Accounts for 2021 will be mailed to
all shareholders shortly and will also be available for collection from the
Company's registered office, 162 Clontarf Road, Dublin 3, Ireland. The
annual report will shortly be available for viewing at Arkle's website at
www.arkleresources.com (http://www.arkleresources.com)
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