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RNS Number : 8532T Arkle Resources PLC 26 June 2024
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.
26 June 2024
Arkle Resources PLC
("Arkle", the "Group" or the "Company")
Final Results for the Year Ended 31 December 2023
Arkle Resources PLC (LON: ARK), the Gold, Lithium and Zinc exploration and
development company, is pleased to announce its audited results for the year
ending 31 December 2023.
Chairman's Statement
Arkle is an AIM listed active exploration company exploring for Gold, Zinc and
Lithium in Ireland and Lithium in Botswana and Zimbabwe.
Operating in the current environment is not easy but consider the following;
- Developing the Green Economy requires vast
quantities of metals, which need mines.
- Mines, have relatively short lives so new mines
are continuously needed.
- New mines need to be discovered, hence the need
for exploration.
- Most successful exploration is undertaken by
junior exploration companies.
- Junior explorers have no income so need finance.
- There is little or no money available. Arkle has a
loyal group of supporting shareholders.
These simple truths appear to be beyond the ability of politicians, regulators
and bureaucrats to understand. There are many virtuous proposals in the US and
EU to develop "critical metals" to assist the "Green Economy" but none address
the need for exploration.
Laws, papers, conferences and committees have examined the lack of supply of
critical metals, such as lithium, rare earths and copper to mention a few.
Nowhere do you see proposals to promote exploration by junior explorers. So,
where will the metals come from?
For those of us, early-stage explorers, the financial markets have been a
no-go area for some years. As natural optimists, every so often we tend to see
green shoots of emerging interest but, to date, all have withered away.
Arkle is one of very few companies with current exploration programmes in zinc
gold and lithium in Ireland and Botswana.
Ireland
Zinc - Our most advanced project in Ireland is the Stonepark zinc project in
which Arkle holds a 23.44% interest (Group Eleven 76.56%). There is a an
NI43-101 resource of 5.1 million tonnes at a combined lead - zinc grade of
11.3%. At current zinc and lead prices that values a tonne of Stonepark rock
at around $300. The resource is adjacent to the large Pallas Green zinc
discovery of 45 million plus tonnes owned by Glencore and also adjacent to the
Carrickittle and Ballywire zinc / lead discoveries made by our partner Group
Eleven. Carrickittle and Ballywire are at early stages of exploration, but
results have been very encouraging. Group Eleven is currently exploring both
blocks and will begin drilling at Stonepark later in 2024 where they propose
drilling 3 or 4 holes. Arkle intends to exercise its right to participate in
the drilling.
Zinc, while not on a list of "critical minerals" is essential to economic
development. The current price of around $3,000 a tonne suggests a shortage is
looming. Ireland has for many years been known as a Zinc Province being
historically very prospective for large zinc discoveries. Exploration has
drastically declined. Recently the last remaining zinc mine, Tara, closed but
is reopening.
Gold - has been a feature of our exploration efforts in Ireland. For years we
have explored in the Wicklow / Wexford area where we continue to hold ground
covering 76sq kms in the Mine River area.
Mine River is a gold mineralised trend of 15 kms from North to South. Strong
gold results have been found in the Tombreen and Knocknalour areas. Recently
we decided to use our extensive collection of drill cores for hyperspectral
analysis. The results of this will enable us to develop a 3D model of the
resource. This will help focus future drilling. Our second active gold project
is in the Inishowen area of Donegal where we now focus on one licence PL3820.
We discovered gold in the Meenaragh area and recently drilled 4 holes to
follow up the main vein. Each hole intercepted the vein thus extending the
strike length.
Lithium - For years it has been speculated that the Wicklow Granites, which
host our gold discoveries, also hold deposits of lithium bearing pegmatites. A
large Chinese company, Ganfeng, has been exploring extensively on ground
adjacent to the Arkle licences. We sampled our ground in the Buncloudy area on
the southern part of the block. We discovered pegmatites and lithium. Further
to this we applied for and obtained four additional licences in the Aughrim
area of Wicklow between our existing licences and the Ganfeng licences.
Arkle has made significant early-stage exploration progress since being
granted the 4 Aughrim licences in October '23, which cover 127.28 sq km. The
new licences are contiguous with a JV between Vancouver, Canada based
International Lithium Corp. and Chinese company, Ganfeng Lithium Co. Ltd. who
plan follow up drilling for up to 40 holes to a maximum drill depth of 235
metres over the next year.
Exploration work conducted by Arkle identified anomalous discoveries in
lithium, gold, tin, tungsten, copper, lead, cobalt and rare earth elements on
the Augrhim licences. Anomalous lithium oxide was found in rock samples,
including a grade of up to 0.09% lithium oxide. Of the 59 samples, 26 showed
concentrations greater than 0.02% lithium oxide. The management were
encouraged by the identification of spodumene crystals. One sample showed a
high concentration of beryllium at 0.246%, along with 0.03% lithium,
indicating the possibility of economic beryllium in the permit area.
Rare earth elements were also identified, including, cerium and dysprosium,
although not in economic quantities. Their presence is encouraging at this
early stage, and the hope is higher grades of these important rare earth
elements can be found nearby in future exploration campaigns.
Exploration prospecting at Aughrim is expected to resume in the near future.
Exploration Challenges - As well as a shortage of finance, attitudes in
Ireland toward exploration have hardened. Political support has withered, and
extensive bureaucratic delays have occurred in licence renewals and other
approvals. For decades Ireland was a beacon for exploration, clear title, fair
and clear taxation policies and rapid clear and transparent licencing laws and
rules. No longer. Politicians, even Ministers of Energy, have expressed doubts
about exploration. Objections to licences have risen. Bureaucrats have taken
note of the attitudes of their political masters and have taken months or
years for what was once a quick simple set of procedures. The politicians and,
indeed some bureaucrats, do not see or understand that exploration dollars,
euros or pounds are mobile orphans owing no allegiance or loyalty to any one
country. There are over 200 jurisdictions where explorers can speculate and,
often lose, their money. Ireland has for long been a favoured destination. Not
so now.
Exploration Outside Ireland - Botswana and Zimbabwe
The lack of investor interest in Ireland and the changing country attitudes
toward minerals led the Board to examine opportunities elsewhere. Experience
in Africa resulted in application for licences, likely to contain lithium, in
Botswana and Zimbabwe.
Two exploration licences were awarded to Arkle in Dec 2023 in the Makgadikgadi
Salt Pans, located in north-east Botswana, covering a total area of 837 sq.
kms. The Makgadikgadi Basin holds the largest salt pans in the world, covering
an area of over 16,000 sq. km, and forms the bed of the ancient Makgadikgadi
lake, the water from which has since evaporated.
We have undertaken analysis of the very limited data available on brines in
the Salt Pans. I am delighted to report that the first lines of our TEMS
survey have indicated brines up to 10 metres thick across part of our
licences.
The remaining lines are close to completion. After analysis a report will be
issued. Limited works done by companies on the northern part of the Pans found
lithium in the brines. Our next step will be undertaking a drill program on
selected areas. The holes will be shallow, and each take a day or two. We have
identified the labs which can undertake the necessary analysis.
In Zimbabwe, which is a world class producer of hard rock lithium in spodumene
/ pegmatite rock we dipped our toe into the area by obtaining small licences
in an area never before explored for lithium but containing similar rock types
to the mining area. We are intending to joint venture with a partner who will
undertake the necessary exploration on the licences.
Outlook
We remain an active explorer. This costs money. We raised £270,000 in recent
times to fund working capital and expected costs in the near future. Group
Eleven are expected to drill Stonepark later this year. We will participate
either by contributing cash or diluting. We will soon have the results of the
hyperspectral analysis of our Wicklow gold database. This will give us a 3D
model of the resource which should assist us in attracting partners. Our
ongoing work in Botswana looks good and we are hopeful that we can have an
early stage estimate of the volume of brines on the licences.
We continue to examine other opportunities in Ireland and abroad. Any
investment we make is likely to come with finance and management.
John Teeling
Chairman
25 June 2024
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 +44 (0) 203 470 0470
Adam Cowl
Kasia Brzozowska
First Equity Limited
Joint Broker
Jason Robertson +44 (0) 207 374 2212
BlytheRay +44 (0) 207 138 3204
Megan Ray
Teneo
Luke Hogg +353 (0) 1 661 4055
Alan Tyrrell
Fia Long
Alan Reynolds
ARKLE RESOURCES PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
2023 2022
€ €
Administrative expenses (276,759) (303,195)
- -
Loss from operations (276,759) (303,195)
Profit/(loss) due to fair value volatility of warrants (20,262) 3,981
Loss before tax (297,021) (299,214)
Tax expense - -
Loss for the year (297,021) (299,214)
Total comprehensive income (297,021) (299,214)
Earnings per share attributable to the ordinary equity holders of the parent
cents cents
Profit/(Loss) per share - Basic & Diluted (0.07) (0.09)
ARKLE RESOURCES PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2023
2023 2022
€ €
Assets
Non-current assets
Intangible assets 4,089,667 3,991,023
Current assets
Other receivables 788 6,928
Cash and cash equivalents 91,082 199,990
91,870 206,918
Total assets 4,181,537 4,197,941
Liabilities
Current liabilities
Trade and other liabilities (340,026) (325,799)
Warrants (175,952) (155,690)
Total liabilities (515,978) (481,489)
Net assets 3,665,559 3,716,452
Equity
Called-up Share capital - Deferred 992,337 992,337
Called-up Share capital - Ordinary 1,142,027 988,456
Share premium reserve 7,015,119 6,922,562
Share based payments reserve 156,494 156,494
Retained deficit (5,640,418) (5,343,397)
Total Equity 3,665,559 3,716,452
ARKLE RESOURCES PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31
DECEMBER 2023
Called up Share Called up Share Share Share Based Payment Retained
Capital Capital Ordinary Premium Reserve Deficit Total
Deferred
€ € € € € €
At 1 January 2022 992,337 764,956 6,680,245 156,494 (5,044,183) 3,549,849
Shares issued - 223,500 242,317 - - 465,817
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
Shares issued - 153,571 92,557 - - 246,128
Loss for the year (297,021) (297,021)
At 31 December 2023 992,337 1,142,027 7,015,119 156,494 (5,640,418) 3,665,559
ARKLE RESOURCES PLC
CONSOLIDATED CASH FLOW STATEMENT
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
2023 2022
€ €
Cash flows from operating activities
Loss for the year (297,021) (299,214)
Adjustments for
Fair Value movement of warrants 20,262 (3,981)
Foreign exchange (2,753) 12,250
(279,512) (290,945)
Movements in working capital:
Decrease in trade and other receivables 6,140 25,707
Increase in trade and other payables 14,227 91,926
Net cash used in operating activities (259,145) (173,312)
Cash flows from investing activities
Payments for exploration and evaluation (98,644) (159,943)
Net cash used in investing activities (98,644) (159,943)
Cash flows from financing activities
Proceeds from issue of equity shares 246,128 465,817
Share issue expenses - -
Net cash generated from financing activities 246,128 465,817
Net cash (decrease)/increase in cash and cash equivalents (111,661) 132,562
Cash and cash equivalents at the beginning of year 199,990 79,678
Exchange gains on cash and cash equivalents 2,753 (12,250)
Cash and cash equivalents at the end of the year 91,082 199,990
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 2022. 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):
2023 2022
€ €
Numerator
For basic and diluted EPS Loss after taxation (297,021) (299,214)
Denominator No. No.
For basic and diluted EPS 402,955,811 343,481,056
Basic EPS (0.07c) (0.09c)
Diluted EPS (0.07c) (0.09c)
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 and Company incurred a loss for the financial year of €297,021
(2022: €299,214) and the Group had net current liabilities of €424,108
(2022: €274,571) 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 €91,082 (2022: €199,990) at the statement
of financial position date.
Included in current liabilities is an amount of €262,500 (2022: €217,500)
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 £215,000 during the year from a placing. On 2 May 2024 the Group
raised £270,000 from 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
Group Group
2023 2022
€ €
Exploration and evaluation assets:
Cost:
At 1 January 3,991,023 3,831,080
Additions 98,644 159,943
Impairment - -
At 31 December 4,089,667 3,991,023
Carrying amount:
At 31 December 4,089,667 3,991,023
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 2023 was owned 23.44% (2022: 23.44%) by Limerick
Zinc Limited (subsidiary of Arkle Resources plc) and 76.56% (2022: 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 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.
On 25 October 2023 the Company announced it has been granted a new lithium
exploration block north of its Mine River Block in Wicklow/Wexford in Ireland.
The new block consists of four prospecting licences for lithium, rare earth
elements and other minerals, including gold and platinum. The ground is
contiguous with the International Lithium Corp - Gangfeng Lithium Co. Ltd
joint venture to the west, where a large zone of lithium bearing pegmatites
has been discovered associated with the Leinster Granite Pegmatite Belt. The
Directors believe this new ground is fertile for lithium deposits.
On 15 December 2023 the Company announced that it has been awarded two
exploration licences in the Makgadikgadi Salt Pans in North-Eastern Botswana.
The licences, PL 075/2023 and PL 0148/2023, cover 312 and 525 sq kilometres
respectively in size. The licences are awarded to prospect for lithium in
the Salt Pans.
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. Should this prove unsuccessful the carrying value
included in the statement of financial position would be written off to the
statement of comprehensive income.
- 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 2023 the directors are satisfied that the value of the intangible
asset is not less than carrying value.
Segmental Analysis
2023 2022
€ €
Limerick 1,705,480 1,705,480
Rest of Ireland 2,355,172 2,273,502
Zimbabwe 29,015 12,041
4,089,667 3,991,023
5. Trade payables
2023 2022
€ €
Current assets:
Trade and other payables 63,526 96,299
Accruals 276,500 229,500
340,026 325,799
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 €262,500
(2022: €217,500) 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
2023 2022
€ €
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 2022 and 2023 132,311,591 992,337 -
At 31 December 2022 and 2023 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 2022 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
Issued during the year 61,428,571 153,571 92,557
At 31 December 2023 456,810,997 1,142,027 7,015,119
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 16 November 2023, a total of 61,428,571 shares were issued at a price of
0.35p 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 0.35p per
share until 23 November 2025.
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 2023 31 December 2022
Options Weighted average exercise price in pence Options Weighted average exercise price in pence
Outstanding at beginning of year 16,100,000 1.32 16,100,000 1.32
Granted during the year - - -
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
The terms of the options granted do not contain any market conditions within
the meaning of IFRS 2.
8. Warrants
31 December 2023 31 December2022
NUMBER Number of Warrants Weighted average exercise price in pence Number of Warrants Weighted average exercise price in pence
Outstanding at beginning of year 50,000,000 0.50 110,462,500 0.90
Granted during the year 61,428,571 0.35 50,000,000 0.50
Expired during the year - - (71,062,500) 0.90
Exercised during the year - - (39,400,000) 0.50
Outstanding at the end of the year 111,428,571 0.42 50,000,000 0.50
2023 2022
€ €
FAIR VALUE
At 1 January 155,690 159,671
FV of warrants issued during the year at grant date 117,509 155,690
FV of warrants exercised during the year - (72,191)
Movement in fair value (97,247) (87,480)
At 31 December 175,952 155,690
2023 2022
€ €
Profit/(Loss) due to Fair Value Volatility of Warrants
Fair Value movements warrants b/fwd 97,247 87,480
Fair Value of warrants exercised - 72,191
Fair Value new warrants granted (117,509) (155,690)
Movement for the year (20,262) 3,981
On 21 November 2022, 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 of
€97,247 to 31 December 2023 was expensed to the Consolidated Statement of
Comprehensive Income.
On 16 November 2023, a total of 61,428,571 warrants with an exercise price of
0.35p per warrant were granted as part of the placing. The fair value of
€117,509 to 31 December 2023 was expensed to the Consolidated Statement of
Comprehensive Income. The fair value was calculated using the Black-Scholes
valuation model.
The inputs into the Black-Scholes valuation model were as follows:
Grant 16 November 2023
Weighted average share price at date of grant (in pence) 0.35p
Weighted average exercise price (in pence) 0.35p
Expected volatility 86.81%
Expected life 1.88 years
Risk free rate 5%
Expected dividends none
Expected volatility was determined by management based on their cumulative
experience of the movement in share prices.
The terms of the warrants granted do not contain any market conditions within
the meaning of IFRS 2.
9. Post Balance Sheet Events
On 2 May 2024 the Company announced it had raised £270,000 (before expenses)
through a placing of 108,000,000 shares at a price of 0.25p per share. Each
placing share has one warrant attached with the right to subscribe for one new
ordinary share at a price of 0.35p for a period of two years.
10. 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 25 July 2024 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 2023. The financial
information for 2022 is derived from the financial statements for 2022 which
have been delivered to the Companies Registration Office. The auditors have
reported on 2022 statements; their report was unqualified. The financial
statements for 2023 will be delivered to the Companies Registration Office.
A copy of the Company's Annual Report and Accounts for 2023 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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