REG - Arkle Resources PLC - Interim Statement
26/09/2023 07:00
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RNS Number : 5823N Arkle Resources PLC 26 September 2023
26(th) September 2023
Arkle Resources PLC
("Arkle" or the "Company")
Interim Statement for the period ended 30 June 2023
Chairman's Statement
Arkle continues to make progress on the main business of the Company, mineral
exploration. Our partner in the Stonepark zinc project in Ireland has
confirmed their intention to drill a deep hole on a good zinc target
discovered in 2022. We will shortly undertake a short drilling programme on
our Donegal gold licence. Finally, we continue to review a number of overseas
investment opportunities, particularly in lithium.
Zinc
For the first time since 1965 there is no zinc production in Ireland due, I
hope, to the temporary closure of the Tara Mine in Navan. For almost 60 years,
Ireland was a world ranking zinc producer. Known as a zinc province, Ireland
was, and still is, highly prospective for zinc.
The Glencore discovery at Pallas Green and the Tara Deep discovery are each
world class undeveloped discoveries. We believe the three discoveries at
Stonepark, Carrickittle and Ballywire close to the Pallas Green deposit
certainly have the makings of another large discovery. The demand for zinc
from emerging markets is strong. The zinc price is also strong. But
ever-growing capital costs, more and more regulations and the huge rise in
recent energy prices have made new projects less economical. As someone
actively involved in Irish zinc since the late 1960s, I hope that the Tara
closure is temporary.
Our partner, Group Eleven, is the operator on our Stonepark group of five
licences. They keep the licences in good standing. They have a number of good
drill targets in the Stonepark - Carrickittle - Ballywire corridor. Stonepark
is not their top priority. We have maintained our 23.44% interest and have
informed Group Eleven that we will participate in the deep hole on Stonepark -
when they decide to drill it.
Gold
We hold five licences in the Wicklow / Wexford area in Ireland and one
prospective licence in Donegal. We have drill ready targets on the Donegal
ground which we will shortly drill. Let me remind shareholders that the
Donegal geology is similar to that in the multimillion ounce Dalradian gold
discovery in Tyrone. The Dalradian discovery is privately owned.
Over the years, repeated exploration programmes have identified high grade
gold in the Wicklow hills. The gold is in veins, often very narrow and nuggety
so one hole can hit a nugget giving very high grades whilst the next hole
either misses the narrow vein or finds no nuggets and so delivers a low or
non-existent grade.
The area needs an intensive drilling programme and Arkle needs a farm out
partner to carry most of the cost. The present difficult fundraising
environment on the AIM market for explorers makes this difficult.
Lithium
There is lithium in the Wicklow granites. This has been known for decades but
until recently lithium in spodumene / pegmatite rocks was not viable. The race
to electrify cars and increase battery storage to assist wind and solar
projects has greatly increased the demand for lithium. Arkle has undertaken
two prospecting programmes in the southern part of the block. Lithium was
found but the results were spotty. It needs further work.
We have applied for additional licences in the area.
Other Activities
Given the poor market perception of Irish zinc and gold interests it was
decided to look at opportunities outside Ireland.
In the first instance we are looking at lithium projects. In June 2022, we
announced the award of licences in Zimbabwe. However, there are difficulties
there with title, so the work is paused at present.
In another jurisdiction, we are progressing the acquisition of two licence
blocks which may contain lithium, although no previous exploration for this
mineral has been carried out on these blocks.
The board has also examined a number of proposals in gold, base metals and
rare earths. None have progressed passed due diligence. The programme to find
new opportunities is ongoing.
John Teeling
Chairman
25(th) September 2023
Market Abuse Regulation (MAR) Disclosure
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.
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 Advisor & 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 +353 (0) 1 661 4055
Alan Tyrrell
Arkle Resources plc
Financial Information (Unaudited)
Condensed Consolidated Statement of Comprehensive Income Six Months Ended Year Ended
30 June 23 30 June 22 31 Dec 22
unaudited unaudited audited
€'000 €'000 €'000
Administrative expenses (150) (139) (303)
- - -
OPERATING LOSS (150) (139) (303)
Profit/(Loss) due to fair value volatility of warrants 117 160 4
PROFIT/(LOSS) BEFORE TAXATION (33) 21 (299)
Income tax expense - - -
PROFIT/(LOSS) FOR THE PERIOD AND TOTAL COMPREHENSIVE INCOME (33) 21 (299)
PROFIT/(LOSS) PER SHARE - basic and diluted (0.01) c 0.01c (0.09) c
Condensed Consolidated Statement of Financial Position 30 June 23 30 June 22 31 Dec 22
unaudited unaudited audited
€'000 €'000 €'000
NON-CURRENT ASSETS
Intangible Assets 4,026 3,949 3,991
CURRENT ASSETS
Other receivables 16 24 7
Cash and cash equivalents 63 120 200
79 144 207
TOTAL ASSETS 4,105 4,093 4,198
LIABILITIES
CURRENT LIABILITIES
Trade and other payables (383) (287) (326)
Warrants (39) - (156)
(422) (287) (482)
NET CURRENT LIABILITIES (343) (143) (275)
NET ASSETS 3,683 3,806 3,716
EQUITY
Share Capital - Deferred Shares 992 992 992
Share Capital - Ordinary Shares 988 864 988
Share Premium 6,923 6,817 6,923
Share based payments reserve 156 156 156
Retained deficit (5,376) (5,023) (5,343)
TOTAL EQUITY 3,683 3,806 3,716
Condensed Consolidated Statement of Changes in Shareholders Equity
Called-up Called-up
Share Share Share
Capital Capital Share Based Retained
Deferred Ordinary Premium Reserves Deficit Total
€'000 €'000 €'000 €'000 €'000 €'000
As at 1 January 2022 992 765 6,680 156 (5,044) 3,549
Shares issued - 99 137 - - 236
Profit for the period - - - - 21 21
As at 30 June 2022 992 864 6,817 156 (5,023) 3,806
Shares issued - 124 106 - 230
Loss for the period - - - - (320) (320)
As at 31 December 2022 992 988 6,923 156 (5,343) 3,716
Loss for the period - - - - (33) (33)
As at 30 June 2023 992 988 6,923 156 (5,376) 3,683
Six Months Ended Year Ended
30 June 23 30 June 22 31 Dec 22
Condensed Consolidated Cash Flow unaudited unaudited audited
€'000 €'000 €'000
CASH FLOW FROM OPERATING ACTIVITIES
Loss for the year (33) 21 (299)
Share based payments charge - - 0
Fair value movement of warrants (117) (160) (4)
Foreign exchange (4) 7 12
(154) (132) (291)
Movements in working capital 48 61 117
NET CASH USED IN OPERATING ACTIVITIES (106) (71) (174)
CASH FLOW FROM INVESTING ACTIVITIES
Payments for exploration and evaluation (35) (118) (160)
NET CASH USED IN INVESTING ACTIVITIES (35) (118) (160)
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from issue of equity shares 0 236 466
NET CASH FROM FINANCING ACTIVITIES 0 236 466
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS (141) 47 132
Cash and Cash Equivalents at beginning of the period 200 80 80
Effects of exchange rate changes on cash held in foreign currencies 4 (7) (12)
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD 63 120 200
Notes:
1. INFORMATION
The financial information for the six months ended 30 June 2023 and the
comparative amounts for the six months ended 30 June 2022 are unaudited.
The interim financial statements have been prepared in accordance with IAS 34
Interim Financial Reporting as adopted by the European Union. The interim
financial statements have been prepared applying the accounting policies and
methods of computation used in the preparation of the published consolidated
financial statements for the year ended 31 December 2022.
The interim financial statements do not include all of the information
required for full annual financial statements and should be read in
conjunction with the audited consolidated financial statements of the Group
for the year ended 31 December 2022, which are available on the Company's
website www.arkleresources.com (http://www.arkleresources.com/)
The interim financial statements have not been audited or reviewed by the
auditors of the Group pursuant to the Auditing Practices board guidance on
Review of Interim Financial Information.
2. No dividend is proposed in respect of the period.
3. EARNINGS PER SHARE
Basic earnings per share is computed by dividing the profit 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 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 out the computation for basic and diluted earnings
per share (EPS):
30 June 23 30 June 22 31 Dec 22
Profit/(loss) per share - Basic and Diluted (0.01) c 0.01c (0.09) c
Basic profit/(loss) per share
The earnings and weighted average number of ordinary shares used in the
calculation of basic loss per share are as follows:
€'000 €'000 €'000
Profit for the year attributable to equity holders (33) 21 (299)
Denominator Number Number Number
For basic and diluted EPS 395,382,426 330,296,947 343,481,056
Basic and diluted loss per share are the same as the effect of the outstanding
share options is anti-dilutive.
4. INTANGIBLE ASSETS
30 June 23 30 June 22 31 Dec 22
Exploration and evaluation assets: €'000 €'000 €'000
Cost at 1 January 3,991 3,831 3,831
Additions 35 118 160
Closing Balance 4,026 3,949 3,991
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 30 June 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 was 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. Should this prove unsuccessful the carrying value
included in the balance sheet would be written off to the statement of
comprehensive income.
The group's activities are subject to a number of
significant 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
30 June 2023, the directors are satisfied that the value of the intangible
asset is not less than carrying value.
30 June 23 30 June 22 31 Dec 22
Segmental Analysis €'000 €'000 €'000
Limerick 1,705 1,698 1,705
Rest of Ireland 2,297 2,243 2,274
Zimbabwe 24 8 12
Closing Balance 4,026 3,949 3,991
5. SHARE CAPITAL AND SHARE PREMIUM
2022 2021
€'000 €'000
Authorised
1,000,000,000 Ordinary shares of 0.25c each 2,500 2,500
500,000,000 Deferred shares of 0.75c each 3,750 3,750
6,250 6,250
Share Capital Share Premium
€'000 €'000
Number
Deferred Shares - nominal value of 0.75c 132,311,593 992 -
Share Capital Share Premium
Ordinary Shares - nominal value of 0.25c €'000 €'000
Number
Allotted, Called Up and Fully Paid:
Balance at 1 January 2022 305,982,426 765 6,680
Issued during the period 39,400,000 99 137
Balance at 30 June 2022 345,382,426 864 6,817
Issued during the period 50,000,000 124 106
Balance at 31 December 2022 395,382,426 988 6,923
Issued during the period - - -
Balance at 30 June 2023 395,382,426 988 6,923
Movement in shares
There was no movement in shares in the current period.
6. SHARE BASED PAYMENTS - OPTIONS
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.
30 Jun 23 Weighted average exercise price in pence 30 Jun22 Weighted average exercise price in pence 31 Dec 22 Weighted average exercise price in pence
'000 '000 '000
Outstanding at beginning of period 16,100 1.32 16,100 1.32 16,100 1.32
Granted during the period - - - - -
Expired during the period - - - - -
Outstanding at end of period 16,100 1.32 16,100 1.32 16,100 1.32
Exercisable at end of period 16,100 1.32 16,100 1.32 16,100 1.32
7. SHARE BASED PAYMENTS - WARRANTS
Fair Value
30 June 23 30 June 22 31 Dec 22
€'000 €'000 €'000
At beginning of period 156 160 -
Issued during the period - - 156
Expired during the period - (4) -
Exercised during the period - (72) -
Movement in fair value (117) (84) -
Closing Balance 39 - 156
30 June 23 30 June 22 31 Dec 22
€'000 €'000 €'000
Profit/(Loss) due to Fair Value Volatility of Warrants
Fair Value at 1 January 156 160 160
Less Fair Value at end of period 39 - 156
Movement for the period 117 160 4
Number
30 June 23 30 June 22 31 Dec 22
'000 '000 '000
Outstanding at beginning of period 50,000 110,463 69,063
Granted during the period - - 50,000
Exercised during the period - (39,400) -
Expired during the period - (2,000) (69,063)
Closing Balance 50,000 69,063 50,000
On 1 January 2023 a total of 50,000,000 warrants with an exercise price of
0.5p per warrant and a fair value of €155,690 were outstanding. These
warrants have an expiry date of 24 November 2024. The movement in fair value
for the period to 30 June 2033 of €117,330 was expensed to the Consolidated
Statement of Comprehensive Income. The fair value was calculated using the
Black-Scholes valuation model.
8. POST BALANCE SHEET EVENTS
There are no material post balance sheet events affecting the Company.
9. The Interim Report for the six months to 30 June 2023 was approved by
the Directors on 25(th) September 2023.
10. The Interim Report will be available on Arkle Resources PLC's website
www.arkleresources.com (http://www.arkleresources.com)
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