REG - Armadale Capital PLC - Half-year Report
29/09/2022 07:00
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RNS Number : 0764B Armadale Capital PLC 29 September 2022
Armadale Capital Plc / Index: AIM / Epic: ACP / Sector: Investment Company
29 September 2022
Armadale Capital Plc
('Armadale' the 'Company' or the 'Group')
Interim Results
Armadale, the AIM quoted investment company focused on natural resource
projects in Africa, is pleased to announce its unaudited interim results for
the six months ended 30 June 2022.
Highlights
During the half year Armadale's primary focus was on securing project
development funding for the Mahenge Liandu Graphite project while advancing
the permitting and local community engagement. The Company also expanded its
presence following the grant of an exploration license covering 19.99 square
kilometers.
In March, the Company, pursuant to environmental compliance requirements of
the mining license, successfully completed the installation of a weather
station and has commenced the monthly collection of data. The station records
data at 5 second intervals and covers all weather parameters including
temperature, pressure, wind, moon phase, humidity, solar radiation and
rainfall.. All data is automatically uploaded to the cloud. This will assist
with the planning of the mining operations on the Project.
In addition, the Company has also installed a total of 7 stream gauges and
one barotroll in the water streams located at the mine site in March 2022
which will be used for hydrological studies. The devices record 3 parameters
which are temperature, pressure and depth at 5 second intervals.. The data
from all devices are being manually downloaded at a frequency rate of once per
month.
As Part of the ongoing FEED study, the Company cleared pads for geotech
drilling at the proposed plant Site and tailing dam location.
The pad clearance activity was completed at site in the proposed Plant site
and Tailing Storage Facility areas. 10 pads were cleared at the tailing
storage facility area and 6 pads were cleared at the plant site area as a part
of geotechnical studies and the Company is now preparing for Diamond
Drilling in the proposed areas.
Furthermore, the test pitting program has been completed at the proposed plant
site, tailing storage facility and the access road areas. A total of 41 test
pits with 3 meters depth have been excavated, DCP tested, strata logged,
sampled and backfilled. 11 pits have been excavated at plant site, 25 pits
excavated at tailing storage facility and 5 pits excavated at the access road
to the mine site.
The Company has received an encouraging level of interest in funding the
Mahenge Liandu Graphite project and has advanced its discussions with a number
of potential finance partners with respect to securing project development
funding for the project.
Grant of Prospecting License PL 119961/ 2022
The company was granted the prospecting license PL 119961/ 2022 by the
ministry of minerals on 28(th) June 2022, for the exploration of graphite
minerals. The license area comprises of 19.99 square kilometers, located at
Isongo and Liandu villages of Ulanga District, in Morogoro Region.
The cash position at 30 June 2022 was £1,723,000 and the average monthly cash
burn is about £30,000, including annual audit costs.
FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2022
Condensed Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2022
Unaudited
Six months ended
30 June 30 June
2022 2021
£'000 £'000
Administrative expenses (151) (157)
Change in fair value of investments (1) 139
Finance costs - (9)
Loss before taxation (152) (27)
Taxation -
Loss after taxation (152) (27)
Other comprehensive (loss)/income
Items that may be reclassified to profit or loss:
Exchange differences on translating foreign entities (57) 2
Total comprehensive loss attributable to equity holders of the parent company (209) (25)
Pence Pence
Loss per share attributable to equity holders of the parent company (note 3) (0.03)
Basic and fully diluted
(0.01)
Consolidated Statement of Financial Position
At 30 June 2022
Unaudited Audited
30 June 2022 30 June 2021 31 December 2021
£'000 £'000 £'000
Assets
Non-Current assets
Exploration and evaluation assets 5,010 4,556 4,727
Investments 79 421 138
5,089 4,977 4,865
Current assets
Trade and other receivables 60 559 150
Cash and cash equivalents 1,723 562 886
1,783 1,121 1,036
Total assets 6,872 6,098 5,901
Equity and liabilities
Equity
Share capital (note 4) 3,321 3,237 3,275
Share premium 25,076 23,148 23,906
Shares to be issued 286 286 286
Share option and warrant reserve 610 972 925
Foreign exchange reserve 9 129 66
Retained earnings (22,473) (22,376) (22,636)
Total equity 6,829 5,396 5,822
Current liabilities
Trade and other payables 43 96 79
Loans - 606 -
Total liabilities 43 702 79
Total equity and liabilities 6,872 6,098 5,901
Unaudited Consolidated Statement of Changes in Equity
For the period ended 30 June 2022
Share Share Premium Shares to be Share Option Reserve Foreign Exchange Reserve Retained Earnings Total
Capital £'000 Issued £'000 £'000 £'000
£'000 £'000 £'000
Balance 1 January 2021 3,208 22,348 286 762 127 (22,406) 4,325
Loss for the year - - - - - (333) (333)
Other comprehensive loss - - - - (61) - (61)
Total comprehensive loss for the year (61) (333) (394)
- - - -
Issue of shares and warrants 67 1,558 - 266 - - 1,891
Transfer on exercise of warrants - - - (103) - 103 -
Total other movements 67 1,558 - 163 - 103 1,891
Balance 31 December 2021 3,275 23,906 286 925 66 (22,636) 5,822
Loss for the period - - - - - (152) (152)
Other comprehensive loss - - - - (57) - (57)
Total comprehensive loss for the period - - - - (57) (152) (209)
Issue of shares 46 1,170 - - - - 1,216
Transfer on exercise of warrants - - - (315) - 315 -
Total other movements 46 1,170 - (315) - 315 1,216
Balance 30 June 2022 3,321 25,076 286 610 9 (22,473) 6,829
The following describes the nature and purpose of each reserve within
shareholders' equity:
Reserve Description and purpose
Share capital Amount subscribed for share capital at nominal value
Share premium Amount subscribed for share capital in excess of nominal value, net of allowable expenses
Shares to be
issued
Share capital to be issued in connection with historical acquisition
Share option and warrant reserve Cumulative charge recognised under IFRS2 in respect of share-based payment awards
Foreign exchange reserve
Gains/losses arising on re-translating the net assets of overseas operations
into sterling
Retained earnings Cumulative net gains and losses recognised in the statement of comprehensive income
Consolidated Statement of Cash Flows
For the period ended 30 June 2022
Unaudited Audited
Six Months ended Year ended
30 June 2022 30 June 2021 31 December 2021
£'000 £'000 £'000
Cash flows from operating activities
Loss before taxation (152) (27) (333)
Change in fair value of investments 1 (139) (8)
Finance costs - 9 11
(151) (157) (330)
Changes in working capital
Receivables 30 9 1
Payables (31) (33) (39)
Net cash used in operating activities (152) (181) (368)
Cash flows from investing activities
Expenditure on exploration and evaluation assets (345) (157) (399)
Sale of listed investments 58 - 152
Net cash used in investing activities (287) (157) (247)
Cash flows from financing activities
Proceeds from share issues 1,276 648 1,249
Net cash from financing activities 1,276 648 1,249
Net increase/(decrease) in cash and cash equivalents 837 310 634
Cash and cash equivalents at 1 January 2022 886 252 252
Cash and cash equivalents at 30 June 2022 1,723 562 886
Notes to the unaudited condensed consolidated financial statements
For the period ended 30 June 2022
1. Incorporation and principal activities
Country of incorporation
Armadale Capital Plc was incorporated in the United Kingdom as a public
limited company on 19 August 2005. Its registered office is 1 Arbrook Lane,
Esher, Surrey, KT10 9EG.
Principal activities
The principal activity of the Group during the period was that of an
investment company.
2. Accounting policies
2.1. Statement of compliance
The financial information for the six months ended 30 June 2022 and 30 June
2021 is unreviewed and unaudited and does not constitute the Group's statutory
financial statements for those periods within the meaning of Section 434 of
the Companies Act 2006. The comparative financial information for the year
ended 31 December 2021 has been derived from the Annual Report and Accounts,
which were approved by the Board of Directors on 20 May 2022 and delivered to
the Registrar of Companies. The report of the Auditors on those accounts was
unqualified and did not contain any statement under Section 498 of the
Companies Act 2006.
This condensed set of financial statements has been prepared in accordance
with IAS 34 'Interim Financial Reporting' as adopted by the European Union.
This condensed set of financial statements should be read in conjunction with
the annual financial statements for the year ended 31 December 2021 which have
been prepared in accordance with International Financial Reporting Standards
(IFRSs) as adopted by the United Kingdom.
The accounting policies adopted are consistent with those of the annual
financial statements for the year ended 31 December 2021 as described in those
annual financial statements.
In respect of new financial reporting standards which came into effect for
reporting periods beginning on 1 January 2022, the Directors consider that
their implementation has no material effect on the financial information
presented in this statement.
2.2. Going Concern
The financial statements have been prepared on the going concern basis as, in
the opinion of the Directors, there is a reasonable expectation that the Group
will continue in operational existence for the foreseeable future. The
Company's ability to continue as a going concern and to achieve its long term
strategy of developing its exploration projects is dependent on further
fundraising. During the period, a total of £1,276,000 was raised from
warrant exercises (see note 4). At 30 June 2022, the Group had cash of
£1,723,000.
2.3. Exploration and evaluation assets
These assets are recorded at cost and are amortised over
their expected useful life on a pro rata basis of actual production for the
period to expected total production.
2.4. Investments
Investments are stated at fair value.
3. Loss per share
The calculation of loss per share is based on a loss of £152,000 (2021,
£27,000) and on 560,588,302 (2021, 480,763,732) Ordinary Shares, being the
weighted average number of Ordinary Shares in issue during the period.
There was no difference between basic loss per share and diluted loss per
share as the Group reported a loss for the period.
4. Share capital
During the period, 48,868,969 warrants were exercised providing proceeds of
£1,276,000.
**ENDS**
For further information, please visit the Company's website
www.armadalecapitalplc.com (http://www.armadalecapitalplc.com) , follow
Armadale on Twitter @ArmadaleCapital or contact:
Enquiries:
Armadale Capital Plc +44 (0)20 7236 1177
Tim Jones, Company Secretary
Nomad and broker: finnCap Ltd +44 (0)20 7220 0500
Christopher Raggett / Seamus Fricker /Edward
Whiley
The information contained within this announcement is deemed to constitute
inside information as stipulated under the Market Abuse Regulations (EU No.
596/2014) which is part of UK law by virtue of the European Union (Withdrawal)
Act 2018. Upon the publication of this announcement, this inside information
is now considered to be in the public domain.
Notes
Armadale's wholly-owned Mahenge Liandu Graphite Project is located in a highly
prospective region, with a high-grade JORC compliant indicated and inferred
mineral resource estimate announced February 2018 - 59.5Mt at 9.8% TGC. This
includes 11.5Mt @ 10.5% Measured 32.Mt Indicted at 9.6% and 15.9Mt at 9.8%
TGC, making it one of the largest high-grade resources in Tanzania.
The work to date has demonstrated the Project's potential as a commercially
viable deposit, with significant tonnage, high-grade coarse flake and near
surface mineralisation (implying a low strip ratio) contained within one
contiguous ore body.
The Company's updated Definitive Feasibility Study (June 2020) confirmed
Mahenge as a long-life low-cost graphite project with a US$430m NPV and IRR of
91% based on a two-stage expansion strategy comprising:
· Stage One - processing plant and infrastructure at a nominal
design basis rate of 0.4-0.5 Mt/pa to produce a nominal 60,000t/pa graphite
concentrate in the first three years of production
· Stage Two - a second 0.5 Mt/y plant and associated additional
infrastructure doubling throughput to 1 Mt/y from Year 5 of operation
The DFS shows that Armadale can be a significant low-cost supplier to the
graphite industry with the potential to generate pre-tax cashflows of US$985m
over an initial 15 year mine-life and scope for further improvement as this
utilises just 25% of the current resource, which remains open in multiple
directions.
Projected timeline to first production is expected to be approximately 10-12
months from the start of construction and the capital cost estimate for Stage
1 is US$39.7m, which includes a contingency of U$S4.1m or 15% of total direct
capital cost, with a 1.6 year payback for Stage 1 (after tax) based on an
average sales price of US$1,112/t. Stage 2 expansion is expected to be funded
from cashflow.
More information can be found on the website www.armadalecapitalplc.com
(https://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.armadalecapitalplc.com&esheet=52244720&newsitemid=20200702005192&lan=en-US&anchor=www.armadalecapitalplc.com&index=1&md5=7209221bbf1231bc13f525c3f5835785)
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