REG - Arkle Resources PLC - Final Results for the Year Ended 31 December 2022
27/06/2023 07:15
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RNS Number : 9532D Arkle Resources PLC 27 June 2023
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.
27 June 2023
Arkle Resources PLC
("Arkle", the "Group" or the "Company")
Final Results for the Year Ended 31 December 2022
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 2022.
Chairman's Statement
Despite the market for junior exploration companies being friendless Arkle had
a good exploration year. We discovered lithium bearing rocks on our Wicklow /
Wexford ground and drilling by our partners, Group Eleven, on our Stonepark
zinc licences identified a significant geological fault, while we expanded our
overseas search for new projects in Battery Metals and Platinum Group Metals
(PGMs) with the grant of three small licences in Zimbabwe.
During the period we raised £200,000 mainly from directors and associates. In
recent months the Arkle share price has been volatile mainly due to one
investor who purchased over 25 million shares equal to 6.8% of the issued
equity only to sell off the block in large chunks a short time later.
Zinc
The main focus in the period under review was the Stonepark zinc project where
seven holes were drilled. The drilling discovered a major fault zone in the
south of the block of six licences and identified a significant and extensive
zinc target.
Ireland is highly prospective for zinc. Over the past 60 years a number of
world class large zinc mines have been brought into production and it is
believed that more deposits remain to be discovered.
In the Stonepark area of Limerick, Arkle is in a joint venture with Group
Eleven Resources Corp., a listed Canadian junior, where Arkle owns 23.44% and
Group Eleven, 76.56%. Earlier drilling discovered an inferred resource of 5.1
million tons at a combined 11.3% zinc / lead. Though zinc / lead metal prices
have come back from highs of over $4,000 a tonne to the current $2,000 plus,
the value the ground is over $200 per ton of ore.
The licence block contains six licences covering 184sq km. In 2022 seven holes
were drilled, including four early stage exploration holes which identified
new mineralised trends. Three additional holes were targeted on previously
identified areas, Carrickittle West, Carrickittle North and Stonepark West. A
new major fault structure was identified at Carrickittle West. This is now a
high priority zinc target at depth. Arkle has indicated to Group Eleven that
it will contribute its share to the drilling on this block.
Stonepark remains a central asset in the Arkle portfolio. It lies adjacent to
the massive Pallas Green zinc discovery estimated to contain over 40 million
tons and also adjacent to the ongoing discoveries at Carrickittle made by our
partner Group Eleven. Zinc is a critical metal in economic development. We
believe the deposits in Limerick will be developed in the future.
Gold
Turning to our five licences at Wexford / Wicklow, covering 2,135 km, where we
have been exploring the ground looking for commercial grades and quantities of
gold. Significant sampling, trenching and drilling have repeatedly identified
high grade veins. Getting continuity is the issue. The principal gold target
is the Tombreen area now outlined as 1.5km long and 750 metres wide. Grades in
this area have been up to 50 g/t.
Drilling in Wicklow is complicated. The gold is contained in veins and is
"nuggety". Drilling can miss the veins and / or hit the veins and miss the
nuggets. The answer is more drilling. Ideally Arkle would find a partner to
take detailed exploration to the next level.
In 2016 Arkle discovered gold on a block of licences in Donegal. The block was
licenced because the geology was similar to that of the large Dalradian gold
deposit in adjacent Tyrone and it was believed, later confirmed, that there is
a gold bearing trend from Northwest Ireland, through Ulster into Scotland.
Drilling found exciting results. Some high grades but the gold is nuggety
making analysis difficult.
The focus is on the Meenaragh prospect where drill ready targets have been
identified in good grade gold bearing veins. Delays in renewing our licence
application, meant the loss of two drilling seasons.
Lithium
Though our focus has been on zinc and gold, we are alive to other
opportunities on our licence holdings. The rapid growth in the demand for
batteries containing lithium has stretched the supply. Rising prices mean that
previously uneconomic hard rock deposits of lithium containing rocks become
commercial. It had long been known that the ground in Wexford / Wicklow area
contained pegmatites which can contain lithium.
Companies immediately to the west of our ground have been actively searching
for lithium for some time including Ganfeng, the world's leader in lithium.
Arkle undertook a Proof of Concept sampling programme in the Southwest of our
licence block. We were very pleased to discover pegmatites in a number of
locations. Lithium was present though grades were not high.
A short follow up programme on a different part of the block found indicator
minerals but no lithium. The data is being reviewed to decide on the next
steps while we have applied for additional ground. The programme is at an
early stage.
Overseas Interests
The lack of investor interest in Irish exploration led the board to look at
overseas projects particularly in Battery Metals and PGMs and initially in
sub-Saharan Africa where your directors have experience. We obtained ground in
Zimbabwe, a major lithium producer but have faced delays in expanding the
holding.
We reviewed a number of investment opportunities in the past year and in
particular we are pursuing grassroot opportunities in lithium.
John Teeling
Chairman
26 June 2023
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
Megan Ray +44 (0) 207 138 3204
Teneo
Luke Hogg
ARKLE RESOURCES PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
2022 2021
€ €
Administrative expenses (303,195) (320,266)
- -
Loss from operations (303,195) (320,266)
Profit/(loss) due to fair value volatility of warrants 3,981 746,526
Profit/(loss) before tax (299,214) 426,260
Tax expense - -
Profit/(loss) for the year (299,214) 426,260
Total comprehensive income (299,214) 426,260
Earnings per share attributable to the ordinary equity holders of the parent
cents cents
Profit/(Loss) per share - Basic & Diluted (0.09) 0.14
ARKLE RESOURCES PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2022
2022 2021
€ €
Assets
Non-current assets
Intangible assets 3,991,023 3,831,080
Current assets
Other receivables 6,928 32,635
Cash and cash equivalents 199,990 79,678
206,918 112,313
Total assets 4,197,941 3,943,393
Liabilities
Current liabilities
Trade and other liabilities (325,799) (233,872)
Warrants (155,690) (159,672)
Total liabilities (481,489) (393,544)
Net assets 3,716,452 3,549,849
Equity
Called-up Share capital - Deferred 992,337 992,337
Called-up Share capital - Ordinary 988,456 764,956
Share premium reserve 6,922,562 6,680,245
Share based payments reserve 156,494 156,494
Retained deficit (5,343,397) (5,044,183)
Total Equity 3,716,452 3,549,849
ARKLE RESOURCES PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31
DECEMBER 2022
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 (5470,443) 2,997,386
Shares issued - 22,344 74,564 - - 96,908
Share-based payment - - - 29,295 - 29,295
Profit for the year - - - - 426,260 426,260
At 31 December 2021 992,337 764,956 6,680,245 156,494 (5,044,183) 3,549,849
Shares issued - 223,500 242,317 465,817
Share-based payment - - - - - -
Loss for the year (299,214) (299,214)
At 31 December 2022 992,337 988,456 6,922,562 156,494 (5,343,397) 3,716,452
ARKLE RESOURCES PLC
CONSOLIDATED CASH FLOW STATEMENT
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
2022 2021
€ €
Cash flows from operating activities
Profit / (loss) for the year (299,214) 426,260
Adjustments for
Share based payments charge - 29,295
Fair Value movement of warrants (3,981) (746,526)
Foreign exchange 12,250 (25,527)
(290,945) (316,498)
Movements in working capital:
Decrease/(Increase) in trade and other receivables 25,707 (10,712)
Increase in trade and other payables 91,926 57,208
Net cash used in operating activities (173,312) (270,002)
Cash flows from investing activities
Payments for exploration and evaluation (159,943) (457,592)
Net cash used in investing activities (159,943) (457,592)
Cash flows from financing activities
Proceeds from issue of equity shares 465,817 96,908
Share issue expenses - -
Net cash generated from financing activities 465,817 96,908
Net cash increase/(decrease) in cash and cash equivalents 132,562 (630,686)
Cash and cash equivalents at the beginning of year 79,678 684,837
Exchange gains on cash and cash equivalents (12,250) 25,527
Cash and cash equivalents at the end of the year 199,990 79,678
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 2021. 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
Basic earnings 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
earnings per share is computed by dividing the profit or 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 table sets forth the computation for basic and diluted earnings
per share (EPS):
2022 2021
€ €
Numerator
For basic and diluted EPS Loss after taxation (299,214) 426,260
Denominator No. No.
For basic and diluted EPS 343,481,056 305,517,186
Basic EPS (0.09c) 0.14c
Diluted EPS (0.09c) 0.14c
Basic and diluted loss per share are the same as the effect of the outstanding
share options and warrants is anti-dilutive.
3. Going Concern
The Group incurred a loss for the financial year of €299,214 (2021: profit
€426,260) and had net current liabilities of €274,571 (2021: net current
liabilities €281,231) at the statement of financial position date leading to
concern about the Company and Group's ability to continue as a going concern.
The Group had a cash balance of €199,990 (2021: €79,678) at the statement
of financial position date.
Included in current liabilities is an amount of €217,500 (2021: €172,500)
owed to key management personnel in respect of remuneration due at the balance
sheet date. 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. 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. The directors
are confident that additional capital can be raised as required. The Group
raised £397,000 during the year from warrant exercises and a placing.
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 of assets and liabilities, if the
Company or Group was unable to continue as a going concern.
4. Intangible Assets
2022 2021
€ €
Exploration and evaluation assets:
Cost:
At 1 January 3,831,080 3,373,488
Additions 159,943 457,592
Impairment - -
At 31 December 3,991,023 3,831,080
Carrying amount:
At 31 December 3,991,023 3,831,080
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 2022 was owned 23.44% (2021: 23.44%) by Limerick
Zinc Limited (subsidiary of Arkle Resources plc) and 76.56% (2021: 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.
On 23 June 2022 the Company announced it had been granted three licences
covering 163 hectres to prospect for Lithium in the Insiza District of the
Matabeleland South Province of Zimbabwe. The Directors believe that these
licences, which cover a small area, represent a low-cost entry into one of the
largest lithium producing countries in the world.
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:
- uncertainties over development and operational
risks;
- compliance with licence obligations;
-ability to raise finance to develop assets;
- liquidity risks; and
- going concern risks.
Should this prove unsuccessful the carrying value included in the statement of
financial position would be written off to the statement of comprehensive
income.
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 2022 the directors are satisfied that the value of the intangible
asset is not less than carrying value.
Segmental Analysis
2022 2021
€ €
Limerick 1,705,480 1,600,424
Rest of Ireland 2,273,502 2,230,656
Zimbabwe 12,041 -
3,991,023 3,831,080
5. Trade payables
2022 2021
€ €
Current assets:
Trade and other payables 96,299 42,872
Accruals 229,500 191,000
325,799 233,872
It is the Group's normal practice to agree terms of transactions, including
payment terms, with suppliers and provided suppliers perform in accordance
with the agreed terms, it is the Group's policy that payment is made between
30 - 45 days.
Included in accruals are amounts due for directors' remuneration of €217,500
(2021: €172,500) accrued but not paid at year end.
The carrying value of trade and other payables approximates to their fair
value.
6. Share Capital and Share Premium
2022 2021
Authorised € €
1,000,000,000 Ordinary shares of €0.0025 each 2,500,000 2,500,000
500,000,000 Deferred shares of €0.0075 each 3,750,000 3,750,000
6,250,000 6,250,000
Deferred Shares - nominal value of €0.0075
Number Share Share Premium
Capital €
€
At 1 January 2021 and 2022 132,311,591 992,337 -
At 31 December 2021 and 2022 132,311,591 992,337 -
Ordinary Shares - nominal value of €0.0025
Allotted, called-up and fully paid:
Number Share Capital Share Premium
€ €
At 1 January 2021 297,044,926 742,612 6,605,681
Issued during the year 8,937,500 22,344 74,564
At 31 December 2021 305,982,426 764,956 6,680,245
Issued during the year 89,400,000 223,500 242,317
At 31 December 2022 395,382,426 988,456 6,922,562
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 a premium arising on the issue of
shares. Share issue expenses are deducted against the share premium reserve
when incurred.
Movement in shares
On 22 February 2022, a total of 30,080,000 shares were issued on the exercise
of 30,080,000 warrants at a price of 0.5p per share to provide additional
working capital and future development costs.
On 28 April 2022, a total of 9,320,000 shares were issued on the exercise of
9,320,000 warrants at a price of 0.5p per share to provide additional working
capital and future development costs.
On 21 November 2022, a total of 50,000,000 shares were issued at a price of
0.4p per share to provide additional working capital and fund development
costs. For each share subscribed for, the investors also received one
warrant to subscribe for an additional ordinary share at a price of 0.5p per
share until 24 November 2024.
7. 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.
Share Options
31 December 2022 31 December 2021
Options Weighted average exercise price in pence Options Weighted average exercise price in pence
Outstanding at beginning of year 16,100,000 1.32 13,100,000 1.22
Granted during the year - - 3,000,000 1.80
Expired during the year - - - -
Outstanding at end of year 16,100,000 1.32 16,100,000 1.32
Exercisable at end of year 16,100,000 1.32 16,100,000 1.32
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.
Expected volatility was determined by management based on their cumulative
experience of the movement in share prices.
The terms of the options granted do not contain any market conditions within
the meaning of IFRS 2.
8. Warrants
2022 2021
€ €
Fair Value
At 1 January 159,672 906,198
FV of warrants issued during the year at grant date 155,690 -
FV of warrants exercised during the year (72,192) (68,010)
Movement in fair value (87,480) (678,516)
At 31 December 155,690 159,672
2022 2021
€ €
Profit/(Loss) due to Fair Value Volatility of Warrants
Fair Value at 1 January 159,672 906,198
Less Fair Value at 31 December 155,690 159,672
Movement for the year 3,981 746,526
31 December 2022 31 December 2021
Number of Warrants Weighted average exercise price in pence Number of Warrants Weighted average exercise price in pence
Outstanding at beginning of year 110,462,500 0.90 119,400,000 0.90
Granted during the year 50,000,000 0.50 - -
Expired during the year (71,062,500) 0.90 - -
Exercised during the year (39,400,000) 0.50 (8,937,500) 0.50
Outstanding and exercisable at the end of the year 50,000,000 0.50 110,462,500 0.90
On 22 February 2022 a total of 30,080,000 warrants and on 28 April 2022 a
total of 9,320,000 warrants with an exercise price of 0.5p per warrant were
exercised with a fair value of €72,192. The movement in fair value of
€72,192 was included to the Consolidated Statement of Comprehensive Income.
The balance of 2,000,000 warrants expired on 22 April 2022. On 7 September
2022 a total of 69,062,500 warrants with an exercise price of 1.2p per warrant
expired. The movement in fair value of €87,480 was included to the
Consolidated Statement of Comprehensive Income.
On 21 November, a total of 50,000,000 warrants with an exercise price of 0.5p
per warrant were granted as part of the placing. The fair value was expensed
to the Consolidated Statement of Comprehensive Income. The fair value was
calculated using the Black-Scholes valuation model.
9. Other Reserves
Share Based Payment Reserve
€
Balance at 1 January 2021 127,199
Granted during the year 29,295
Balance at 31 December 2021 156,494
Granted during the year -
Balance at 31 December 2022 156,494
Share Based Payment Reserve
The share based payment reserve arises on the grant of share options under the
share option plan. Share options expired are reallocated from the share based
payment reserve to retained deficit at their grant date fair value.
10. Retained Deficit
2022 2021
£ £
Opening Balance (5,044,183) (5,470,443)
Profit/(Loss) for the year (299,214) 426,260
Closing Balance (5,343,397) (5,044,183)
Retained Deficit
Retained deficit comprises of accumulated profits and losses incurred in the
current and prior years.
11. Post Balance Sheet Events
There were no material post balance sheet events affecting the Group.
12. 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 27 July 2023 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 2022. The financial
information for 2021 is derived from the financial statements for 2021 which
have been delivered to the Companies Registration Office. The auditors have
reported on 2021 statements; their report was unqualified. The financial
statements for 2022 will be delivered to the Companies Registration Office.
A copy of the Company's Annual Report and Accounts for 2022 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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