REG - Aterian PLC - Interim Results for six months ended 30 June 2023
28/09/2023 09:45
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RNS Number : 9921N Aterian PLC 28 September 2023
28 September 2023
Interim Results for the six months ended 30 June 2023
Aterian Plc
("Aterian" or the "Company")
Aterian Plc (LSE: ATN), the critical and strategic metal-focused exploration
and development company, is pleased to announce its unaudited interim results
for the six months ended 30 June 2023.
Chairman's statement
I am pleased to announce the unaudited Interim Results of the Group for the
half-year ending 30 June 2023.
These accounts relate to the Company for the first half of 2023 and reflect a
loss of £636,000 arising from administrative costs; this corresponds to the
Company's expenditure on overheads, operational and exploration costs.
Additional expenditure was incurred on mineral exploration over the HCK
project in Rwanda, establishing the mineral trading business in Rwanda, and
conducting mineral exploration in Morocco.
Morocco Update
In October 2022, the Company acquired 50 licences covering 15 project areas
with a total landholding of 762 km(2) in the Kingdom of Morocco ("Morocco").
The licences primarily target critical and strategic minerals such as copper,
silver and other base metals and are held 100% by the Company's Moroccan
subsidiaries. Elemental Altus Royalty Corporation has a 2.5% net smelter
return ("NSR") royalty over each of the licences held by Aterian in Morocco.
In August 2023, the Company announced that 10 additional licences were granted
to its Moroccan subsidiaries, expanding the overall portfolio to 17 projects,
comprising 60 licences and a landholding of 897 km(2).
Below is a brief description of the projects explored during the reporting
period.
The Agdz Project
The Agdz Project covers 34.46 km(2) and comprises a single mining licence,
granted on 21 May 2021 for ten years. The project is located within the
Souss-Massa-Drâa region of the Anti-Atlas Mountains of central Morocco,
approximately 350 km south of the capital, Rabat, and approximately 35 km east
of the city of Ouarzazate, where high-standard infrastructure and services
exist, including a regional airport. Agdz lies approximately 14 km southwest
of the Bouskour copper-silver mine, with the world-class Imiter silver mine
located 80 km to the northeast.
The lithological package at Agdz broadly consists of mostly
felsic-intermediate volcano-sedimentary rocks of the Ouarzazate Supergroup
with large granodiorite plutons in the north and locally conglomeratic
metasedimentary sequences in the south. The units are bisected by a series of
sub-parallel NE and NW striking brittle faults and alteration zones, several
of which have been historically mined for copper. A recent re-interpretation
of the available ground-based geophysics and ground geological mapping
indicates that the main prospects identified occur in a potential dilutionary
jog structural setting.
Five prospects, namely Makarn, Makarn North, Amzwaro, Miniere and Daoud, have
been outlined on the project based on rock chip sampling (the best of which
returned grades of up to 26.5 % Cu, 448 g/t Ag, and 3.74 g/t Au). These five
significant Cu-Ag prospects cover an area of approximately 8 km2:
• The 2.80 km long Makarn - Markarn North prospects, with results up to 26.5
% Cu and 448 g/t Ag
• The 2.00 km long Amzwaro prospect, with results up to 4.82 % Cu and 189
g/t Ag
• The 0.15 km long Minière prospect, with results up to 14.75 % Cu and 13.8
g/t Ag
• The 0.70 km long Daoud prospect, with results up to 2.98 % Cu, 152 g/t Ag
576 m of reconnaissance trenching has been completed in 13 trenches across two
of the five prospects. Results include 14.12 m at 0.65 % Cu and 36.54 g/t Ag
at Makarn North and 13.70 m at 0.36 % Cu and 13.26 g/t Ag at Amzwaro.
The Tata Project
The Tata Project covers 154.4 km2 and is located within the
western Anti-Atlas Mountains of Morocco and lies 30 km south of the
Company's Azrar copper-silver project. The Project is located approximately
465 km south of the capital Rabat, 165 km southeast of the port city of
Agadir, and 50 km southeast of the Tizert copper mine, which Managem Group
operates.
Late Ediacaran to early Cambrian Adoudou Formation carbonate-rich sediments
occurs within the Project along the margins of the Palaeoproterozoic Tagragra
de Tata Inlier. Exploration work on the Project has identified copper
mineralisation hosted within Adoudoudian sediments and the Cambrian Tata Group
sediments.
The Adoudou Formation comprises sediments known to host significant
sedimentary copper deposits in the Western and Central Anti-Atlas, including
the Tizert mine. The Tizert copper deposit is considered the largest copper
deposit in the western Anti-Atlas, with resources estimated to be 57 Mt
grading 1.03 % Cu and 23 g/t Ag.
The results indicate the presence of stratiform sedimentary copper at the
Project with an unexplored strike length of c. 16 km remaining untested along
the northern flank of the inlier and a further c. 9.5 km of strike along the
southern margin of the same geological feature. Exploration results from rock
chip sampling along 8 km of the strike of the sediments have reported up to
2.05 % Cu from a dolomite float sample located adjacent to the contact between
Adoudounian sediments and the Proterozoic inlier. Other results include 0.95 %
Cu from a 4 m thick dolomitic sequence and 0.87 % Cu from an 8 m thick
sequence of dolomite and marl. More recent fieldwork has observed copper
mineralisation along a further 7 km of strike along the northern flank of the
inlier (laboratory results from this work are pending).
The Azrar Project
The Azrar Project is situated in the western Anti-Atlas Mountains. It
comprises an area of 99.3 km(2), located 155 km southeast of the port city
of Agadir and 45 km southeast of the Tizert copper mine, which Managem Group
operates. The western Anti-Atlas is dominated by Palaeoproterozoic to
Neoproterozoic age inliers overlain unconformably by Cambrian to recent
sedimentary and volcanic sequences.
Preliminary fieldwork has covered 50% of the project area, with copper and
silver mineralisation identified over 5 separate zones, with several historic
hard rock artisanal mining occurrences recorded. One target is an ENE-WSW
trending fault zone traced along strike for c. 1.5 km, and remains open-ended,
cross-cutting dolomitic sediments, and up to 8 m wide, with one sample
returning 1.41 % Cu and 41 g/t Ag. The maximum copper value from samples
collected along this structure is 3.45 % Cu. High-grade copper and silver have
been reported from additional outcrop sampling, including 3.79 % Cu and 23 g/t
Ag from a separate fault breccia sample. Results support earlier observations
that prospective geological formations for stratiform sediment-hosted copper
deposits occur within the project area, in addition to structurally controlled
mineralisation features, such as fault zones.
The Jebilet Est Project
This Project covers 73.6 km(2) and lies approximately 200 km south of the
capital city of Rabat, 35 km northeast of Marrakech, and 15 km from a rail
line to the port of Casablanca. The Project occurs approximately 15 km east
of the historic Bir N'Hass copper mine, with several known base metal and
copper deposits and occurrences identified within the district (mineralisation
hosted at Bir n Hass is not necessarily indicative of mineralisation at
Jebilet Est).
The Jebilet Est Project is underlain by Palaeozoic metamudstones and
quartzites proximal to Variscan (Hercynian)-age granite and mafic intrusive
bodies. Initial reconnaissance has identified a significant network of
copper-bearing veins and breccia zones. Multiple parallel quartz-carbonate
veins with a general ENE orientation are mapped across the licences with the
largest vein zone, up to 10 m wide, striking discontinuously for over 3 km.
High copper grades, including 4.43 % Cu and 3.11 % Cu, have been returned from
outcrop sampling, with an extensive vein system mapped in the western project
area.
The Jafra Project
The Jafra Project covers 29.0 km(2) in the Western Meseta of
north-central Morocco, 36 km northeast of Marrakech, 35 km east of the
former Roc Blanc silver mine, and 32 km from the rail line to the port
of Casablanca. The project is located on the eastern margin of an intrusive
pluton within the metamorphic aureole. It hosts a historically mapped lead
occurrence, coincident with apparent former artisanal mining associated with
fault zones and a quartz-carbonate vein system. The Project lies 14km south of
the Company's Jebilet Est Copper Project.
Reconnaissance has concentrated on two areas within the centre of the project,
where several artisanal workings are identified on a prominent topographic
feature trending across the project. All mapped workings appear to exploit
quartz veins and fault zone breccia with visible sulphide mineralisation.
Surface scree covers much of the high ground; however, individual structures
can be traced over 100 m along strike from the workings. Several breccia zones
with variable widths up to 3 m have been identified and are typically composed
of roughly parallel quartz-carbonate veins and breccia. Veins range from 1 to
30 cm wide with a general NE trend, cross-cutting the host metasiltstones.
Rock chip sampling has reported high-grade silver and lead values up to 170
g/t Ag, 22.2 % Pb and 157 g/t Ag, 21.2 % Pb.
Rwanda Update
Aterian, through its 100% owned Rwanda registered subsidiary, Eastinco
Limited, is actively engaged in mineral exploration and developing its
portfolio of critical metals in Rwanda. The Company has three partnerships
exploring and developing the lithium-tantalum(+niobium)-tin opportunities
hosted within intrusive pegmatite dykes and sills. Eastinco Limited also holds
a metal trading licence issued by the authorities in Rwanda, which will allow
for trading metal concentrates from internal supply and third-party producers
and suppliers.
Below is a brief description of the operational projects during the reporting
period.
The HCK Project
The HCK Project covers 2,750 hectares in southern Rwanda with the licence held
by Kinunga Mining Ltd, a Rwanda-registered joint venture company owned 70% by
Eastinco Limited and 30% by HCK Mining Company Ltd. Aterian recently entered
an earn-in Joint Venture Agreement with Rio Tinto Mining and Exploration Ltd
("Rio") over this project, where Rio can earn up to a 75% interest in the
project through funding a two-stage US$ 7.5 million exploration programme.
Work conducted during the reporting period by the Company comprised a
multi-method geophysical survey, sampling and geological mapping and the
completion of an aerial drone topographic survey. From work completed, 19
individual pegmatite zones have been identified, with the main target, HCK-1,
having an indicated strike length of c 2,500 m with widths up to 100 m in
places.
The ground-based multi-method geophysical survey covered an area of 2.36
km2 over the HCK-1 target and comprised magnetometry, induced polarisation
("IP"), and electrical IP tomography ("IPT"). The survey was designed to
provide information on the main geological controlling structures for the
emplacement of the pegmatite bodies, the depth of weathering and recommended
targets for detailed follow-up. Four sub-cropping pegmatite bodies were
identified from the survey, further highlighting the strong structural control
on pegmatite emplacement with the interpretation of at least three deformation
events.
A pegmatite fertility analysis of the multi-element geochemistry from samples
collected across the licence was conducted by an external consultant. The
study involved analysing data by assessing metal ratios and associations to
predict the lithium prospectivity of the pegmatites occurring on the licence.
The study indicates that the HCK-1 pegmatite has encouraging evidence for
Li-Ta enrichment, even though the Ta grades generally seem to be < 200 ppm;
however, the Ta grades were not unexpected given the irregular metal
distribution within these weathered and kaolinised pegmatites, with the
samples collected from the near-surface environment. Given the deep tropical
weathering, the enrichment of Li (16 samples > 150 ppm) is seen as
encouraging for locating Li pegmatites at depth (below the weathering zone).
The indicated presence of tourmaline and beryl from several localised zones
along the strike of the HCK-1 pegmatite implies internal zonation and that the
bedrock source pegmatite may comprise a more 'complex' pegmatites (which are
generally the targets in LCT pegmatite exploration). The low Rb levels
associated with anomalous Li may imply a non-mica lithium source and the low
levels of phosphorus vectors toward a more spodumene-rich bedrock target.
Metal Trading
In January 2023, the International Tin Supply Chain Initiative ("ITSCI")
programme for responsible mineral supply chains approved the Eastinco
Limited ("Eastinco") application in Rwanda and granted Membership Status.
The ITSCI programme supports better governance, human rights, and stability in
conflict-affected areas and monitors supply chains allowing metal users to
demonstrate responsible sourcing of raw materials within the framework of the
ITSCI principles, aligned with the OECD Due Diligence Guidance for
Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk
Areas (2016).
Since January, The Company has worked to establish a trading facility in
Kigali, where concentrate products from small-scale miners and cooperatives
can be received, upgraded and cleaned, processed and packaged for export in
compliance with international guidelines. In tandem, the trading team has been
building a potential supply chain by visiting and understanding the production
capacity of over 30 small-scale mining operations in Rwanda.
Aterian's trading business model is to partner with several suppliers
in Rwanda to support their mining operations by providing mining and
processing equipment, capital investment and training. The first partner
projects have been identified, and the Company is now conducting additional
due diligence and technical planning. Basic mineral processing systems will be
installed under a lease agreement, with the development of new access tunnels
into the deeper levels of the mining areas. This new infrastructure and
technical support should result in an immediate uplift in production by
processing existing tailings material and a longer-term sustainable production
uplift from accessing the deeper mineralised structures.
Charles Bray
Executive Chairman
28 September 2023
- ENDS -
This announcement contains information which, prior to its disclosure, was
inside information as stipulated under Regulation 11 of the Market Abuse
(Amendment) (EU Exit) Regulations 2019/310 (as amended).
For further information, please visit the Company's website:
www.aterianplc.com (http://www.aterianplc.com) or contact:
Aterian Plc:
Charles Bray, Executive Chairman - charles.bray@aterianplc.com
(mailto:charles.bray@aterianplc.com)
Simon Rollason, Director - simon.rollason@aterianplc.com
(mailto:simon.rollason@aterianplc.com)
Financial Adviser and Broker:
Novum Securities Limited
David Coffman / George Duxberry
Tel: +44 (0)207 399 9400
Financial PR:
Bald Voodoo - ben@baldvoodoo.com
Ben Kilbey
Tel: +44 (0)7811 209 344
Notes to Editors:
About Aterian plc
www.aterianplc.com (http://www.aterianplc.com)
Aterian plc is an LSE-listed exploration and development company with a
diversified African portfolio of critical and strategic metals/minerals
projects.
Aterian plc is actively seeking to acquire and develop new critical and
strategic metal resources to strengthen its existing asset base whilst
supporting ethical and sustainable supply chains as the world transitions to a
sustainable, renewable future. The supply of these metals is vital for the
development of the renewable energy, automotive and electronic manufacturing
sectors that are playing an increasing role in reducing carbon emissions and
meeting climate ambitions globally.
The Company recently entered into a joint venture agreement with Rio Tinto
Mining and Exploration Limited for Rio Tinto to earn into the HCK project in
southern Rwanda and holds two further partnerships in Rwanda exploring and
developing lithium-tantalum-niobium-tin mining operations. In October 2022,
the Company acquired Aterian Resources Limited, a wholly owned battery
metals-focused subsidiary of Elemental Altus Royalties Corporation. Aterian
currently holds a portfolio of 17 copper-silver and base metal projects with a
project area of 897 km2 in the Kingdom of Morocco.
The Company's strategy is to seek new exploration and production opportunities
across the African continent and to develop new sources of strategic and
critical mineral assets for exploration, development, and trading.
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
SIX MONTHS ENDED 30 JUNE 2023
Notes 6 months to 6 months to
30-Jun-23 30-Jun-22
(Unaudited) (Unaudited)
£'000 £'000
Revenue - -
- -
Administrative expenses 5 (813) (227)
Share-based payment expense 15 (36) -
(849) (227)
Operating loss (849) (227)
Interest payable and similar charges 6 (9) (6)
Loss before tax (858) (233)
Tax expense 7 - -
Loss after tax (858) (233)
Other comprehensive income:
Items that may be reclassified to profit or loss
Loss on translation of foreign operations (84) (4)
Total comprehensive loss (942) (237)
Loss per share
Basic and diluted loss per share (pence) 8 (0.09) (0.04)
All activities relate to continuing operations.
The accompanying notes form part of these interim condensed financial
statements.
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2023
Notes 30-Jun-23 31-Dec-22
(Unaudited) (Audited)
£'000 £'000
Non-current assets
Exploration and evaluation assets 3,241 3,241
Property, plant and equipment 9 307 421
Total non-current assets 3,548 3,662
Current assets
Trade and other receivables 10 241 319
Cash and cash equivalents 26 110
Total current assets 267 429
Total assets 3,815 4,091
Equity and liabilities
Share capital 14 9,892 9,647
Share premium 14 2,177 2,177
Share based compensation reserve 2,477 2,441
Interest in shares in EBT (839) (839)
Translation reserve (397) (313)
Accumulated losses (11,826) (10,968)
Merger relief reserve 1,200 1,200
Total equity 2,684 3,345
Current liabilities
Trade and other payables 11 438 395
Deferred consideration 12 200 200
Total current liabilities 638 595
Non-current liabilities
Borrowings 13 493 151
Total non-current liabilities 493 151
Total equity and liabilities 3,815 4,091
The Interim Condensed Financial Statements were approved and authorised for
issue by the Board of Directors on 28 September 2023.
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2023
Share capital Share premium Share-based compensation reserve Interest in shares in EBT Translation reserve Other Reserve Merger relief reserve Retained earnings Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2022 5,671 2,144 1,615 (395) (263) 80 1,200 (6,629) 3,423
Loss for the period - - - - - - - (233) (233)
Other comprehensive loss - - - - (4) - - - (4)
Transactions with owners:
Transfer from other reserve to accumulated losses - - - - - - - 24 24
Issue of new shares 142 - - - - - - - 142
At 30 June 2022 5,813 2,144 1,615 (395) (267) 80 1,200 (6,838) 3,352
At 1 January 2023 9,647 2,177 2,441 (839) (313) - 1,200 (10,968) 3,345
Loss for the period - - - - - - - (858) (858)
Other comprehensive income - - - - (84) - - - (84)
Transactions with owners:
Share-based compensation - - 36 - - - - - 36
Issue of new shares 245 - - - - - - - 245
At 30 June 2023 9,892 2,177 2,477 (839) (397) - 1,200 (11,826) 2,684
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
SIX MONTHS ENDED 30 JUNE 2023
6 months to 6 months to
30-Jun-23 30-Jun-22
(Unaudited) (Unaudited)
Cash flow from operating activities £'000 £'000
Loss before tax (858) (237)
Adjustments for:
Depreciation 11 11
Share-based payment expense 36 -
Interest expense 9 6
Provisions against loans - (126)
Foreign exchange losses 17 19
Costs settled by the issue of shares 245 -
Operating loss before working capital changes (538) (327)
Changes in working capital:
Decrease in trade & other receivables 78 111
Increase in trade & other payables 43 50
Net cash outflows flow from operating activities (419) (166)
Cash flow from investing activities
Purchase of property, plant and equipment (4) (7)
Funds advanced to subsidiary pre-acquisition - (463)
Net cash used in investing activities (4) (470)
Cash flow from financing activities
Amounts advanced to subsidiary - 323
Proceeds from borrowings 342 -
Net proceeds from issue of shares - 142
Net cash flow from financing activities 342 465
Net decrease in cash & cash equivalents (81) (171)
Cash & cash equivalents at beginning of the period 110 196
Effect of exchange rate movements on cash (3) (3)
Cash & cash equivalents at end of the period 26 22
ATERIAN PLC
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS
ENDED 30 JUNE 2023
1. General information
Aterian plc ("the Company") is an investment company, focussed on African
mineral resource investment opportunities. The Company operates through its
100% owned subsidiary, Eastinco Limited ("EME Ltd"), a Rwandan tantalum, tin
and tungsten exploration company and Aterian Resources Limited which holds
copper-silver and base metal exploration projects in the Kingdom of Morocco.
The condensed interim financial statements for the period ended 30 June 2023
do not constitute statutory accounts as defined in section 434 of the
Companies Act 2006. These financial statements have been prepared in
accordance with the accounting policies set out in, and are consistent with,
the audited consolidated financial statements for the twelve months ended 31
December 2022. A copy of the statutory accounts for the year ended 31 December
2022 has been delivered to the Registrar of Companies. The auditor's report on
those accounts was unqualified and did not contain statements under Section
498 (2) or (3) of the Companies Act 2006 but drew attention, by way of
emphasis, without qualifying the report, to the Company's assumptions on going
concern which stated that the Group and Parent Company's operational existence
is reliant on the ability to raise further funding through equity placing or
through the support of the directors through an injection of capital. The
impact of this together with other matters indicated that a material
uncertainty existed that may cast significant doubt on their ability to
continue as a going concern. The auditor's opinion was not modified in respect
of this matter.
On 24 October 2022, the Company completed the acquisition of 15 mineral
exploration projects covering 762 km2 in the Kingdom of Morocco from Altus
Strategies PLC (now called Elemental Altus Royalties Corp). The completion of
the acquisition coincided with a move to the Standard Sector of the London
Stock Exchange from the AQUIS Stock Exchange, and a change in name from
Eastinco Mining and Exploration PLC to Aterian PLC, shortly thereafter.
The Company is incorporated and domiciled in the UK. The address of its
registered office is 27-28 Eastcastle Street, London W1W 8DH.
The registered number of the company is 07496976.
2. Basis of preparation
The principal accounting policies applied in the preparation of the Company's
Financial Statements are set out below. These policies have been consistently
applied to the period presented, unless otherwise stated.
This condensed consolidated interim financial statements for the half-year
reporting period ended 30 June
2023 have been prepared in accordance with the UK-adopted International
Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure
Guidance and Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority.
The interim financial statements do not include all of the notes of the type
normally included in an annual financial report. Accordingly, this report is
to be read in conjunction with the annual report for the year ended 31
December 2022, which has been prepared in accordance with UK-adopted
international accounting standards and the requirements of the Companies Act
2006, and any public announcements made by Aterian Plc during the interim
reporting period.
The condensed interim financial statements are unaudited and have not been
reviewed by the auditors and were approved by the Board of Directors on 28
September 2023.
The Financial Statements are presented in £'000 unless otherwise stated which
is the Company's functional and presentational currency.
3. Going concern
The financial statements have been prepared on a going concern basis. The
Group has not yet earned revenues and as at 30 June 2023 was in the
feasibility, optimisation and commissioning phase of its ore processing and
trading facility in Rwanda. In Morocco, each of its assets are in the early
stages of exploration and feasibility assessment. Continuing operations of the
Group are currently financed from funds raised from shareholders and this will
likely continue to be the case until revenue is generated from mining and/or
trading and subsequent ore sales. In the short term the Chairman of the
Company has made available to the Company a working capital facility, but the
Group will likely need to raise further funds in order to progress the Group
from the exploration phase into feasibility and eventually into production of
revenues.
As at 30 June 2023, the Group had cash and cash equivalents of £26,000 and a
working capital facility of £500,000 of which £nil remains to be drawn. As
at the date of this report, cash balances were approximately £309,000. The
Company raised additional equity in August as described in Note 18 and also
hopes to generate revenues, monetise assets, and/or raise further equity to
fund both day-to-day expenditure and potential growth although there can be no
certainty that such funding will be forthcoming.
As part of their assessment, the Directors have prepared financial cash-flow
forecasts on the basis that cost reduction and cost deferral measures can be
implemented over the going concern period. The Company's base case financial
projections show that the Group will continue to operate within the available
facilities throughout the next 12 months. Much of the Group's planned
exploration expenditure is discretionary and, if necessary, could be scaled
back to conserve cash should circumstances coincide with our expectations.
The Directors have agreed, if circumstances require, to defer payment of their
fees until such time as adequate funding is received and if necessary, scale
back all discretionary expenditure including exploration expenditure.
Considering recent successful fund raises the Directors are confident that
they can continue to adopt the going concern basis in preparing the financial
statements.
The financial statements do not include any adjustment that may arise in the
event that the Group is unable to raise additional finance, realise its assets
and discharge its liabilities in the normal course of business.
4. New standards, interpretations and amendments adopted from 1
January 2023:
A number of new or amended standards became applicable for the current
reporting period. The Group did not have to change its accounting policies or
make retrospective adjustments as a result of adopting these standards.
Standards issued but not yet effective:
At the date of authorisation of these interim financial statements, certain
standards and interpretations relevant to the Group and which have not been
applied in these financial statements, were in issue but were not yet
effective. In some cases these standards and guidance have not been endorsed
for use in the UK. The directors are evaluating the impact that these
standards will have on the financial statements of the Group.
5. Operating expenses by nature
Administrative expenses Six months ended Six months ended
30-Jun-23 30-Jun-22
(Unaudited) (Unaudited)
£'000 £'000
Directors' salaries (120) -
Staff costs (58) (50)
Auditor's remuneration (52) -
Travel expenses (6) (4)
Metallurgical tests (4) -
Legal expenses (24) (75)
Professional fees (318) (41)
Accounting fees (60) (13)
Depreciation (11) (11)
Geological survey costs (19) -
Trading expenses (49) -
Security costs (8) -
Other expenses (84) (33)
(813) (227)
Director salaries Fees and salaries Share-based payment expense Six months Six months
ended ended
30 June 2023 30 June 2022
Totals Total
£'000 £'000 £'000 £'000
Executive Directors
Charles Bray 48 - 48 -
Simon Rollason 48 - 48 -
Non-Executive Directors
Simon Retter - - - -
Devon Marais 14 - 14 -
Alister Hume 5 - 5 -
Kasra Pezeshki 5 - 5 -
120 - 120 -
6. Interest payable and similar charges
Interest expense Six months ended Six months ended
30-Jun-23 30-Jun-22
(Unaudited) (Unaudited)
£'000 £'000
Interest expense on loan notes - 6
Interest on related party loan 9 -
9 6
7. Taxation
Tax expense Six months ended Six months ended
30-Jun-23 30-Jun-22
(Unaudited) (Unaudited)
£'000 £'000
Current tax:
UK taxation - -
Overseas taxation - -
Deferred tax - -
- -
The Group has made no provision for taxation as it has not yet generated any
taxable income.
The Group had losses for tax purposes of approximately £7.0 million as at 30
June 2023 (£6.4 million as at 31 December 2022) which, subject to agreement
with taxation authorities, are available to carry forward against future
profits. Such losses have no expiry date. The tax value of such losses
amounted to approximately £1.7 million as at 30 June 2023 (£1.6 million as
at 31 December 2022). A deferred tax asset has not been recognised in respect
of such losses carried forward at the period end, as there is insufficient
evidence that taxable profits will be available in the foreseeable future
against which the deductible temporary difference can be utilised.
8. Loss per share
Basic loss per share is calculated by dividing the earnings attributable to
ordinary shareholders by the weighted average number of ordinary shares
outstanding during the period.
For diluted loss per share, the weighted average number of ordinary shares in
issue is adjusted to assume conversion of all dilutive potential ordinary
shares.
The calculation of basic and diluted loss per share is based on the following
figures.
Six months Six months
ended ended
30-Jun-23 30-Jun-22
(Unaudited) (Unaudited)
£'000 £'000
Earnings
Loss from continuing operations for the period attributable to the equity (858) (233)
holders of the Company
Number of shares
Weighted average number of ordinary shares for the purpose of basic and
diluted earnings per share
976,870,824 535,799,217
Basic and diluted earnings per share (pence) (0.09p) (0.04p)
9. Property, plant and equipment
Mine Mining Equipment Office Equipment Motor Vehicles Computer Equipment Processing Equipment Land Total
Cost £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2023 624 671 7 6 2 3 32 1,345
Foreign exchange adjustment - (102) (1) - - - (4) (107)
Additions - 4 - - - - - 4
At 30 June 2023 624 573 6 6 2 3 28 1,242
Depreciation
At 1 January 2023 624 295 4 - 1 - - 924
Charge for the period - 9 1 - 1 - - 11
At 30 June 2023 624 304 5 - 2 - - 935
Net book value
At 30 June 2023 - 269 1 6 - 3 28 307
At 1 January 2023 - 376 3 6 1 3 32 421
10. Trade and other receivables
30-Jun-23 31-Dec-22
(Unaudited) (Audited)
£'000 £'000
Taxes receivable 81 86
Loan to subsidiary 76 -
Unpaid share capital 12 212
Other debtors 40 -
Prepayments 32 21
241 319
11. Trade and other payables
30-Jun-23 31-Dec-22
(Unaudited) (Audited)
£'000 £'000
Trade payables 270 287
Other payables 127 33
Accruals 41 75
438 395
12. Deferred consideration
30-Jun-23 31-Dec-22
(Unaudited) (Audited)
£'000 £'000
Deferred consideration 200 200
200 200
Deferred consideration is payable to Altus Exploration Management Ltd in
respect of the acquisition of Aterian Resources Limited.
13. Borrowings
Non-current liabilities 30-Jun-23 31-Dec-22
(Unaudited) (Audited)
£'000 £'000
Loan from related party 493 151
493 151
Loan from a related party
On 17 October 2022, the Company entered into a working capital facility with
the trustees of the C Bray Transfer Trust pursuant to which the C Bray
Transfer Trust agreed to make available to the Company a working capital
facility of up to £500,000.
Up to £150,000 can be drawn down under the facility each quarter
starting from 25 October 2022. The facility will be available for two years.
The facility is secured by a fixed and floating charge over all the property
or undertaking of the Company. Interest of 2% per annum accrues on undrawn
amounts and interest of Base Rate + 7.5% per annum will accrue on drawn
amounts. Interest will roll up and is repayable with the outstanding principal
on the second anniversary of Admission. An arrangement fee of £10,000 was
payable and has been added to the principal outstanding. C Bray, a director,
is a beneficiary of the C Bray Transfer Trust. Interest of £9,000 was payable
for the period ended 30 June 2023.
14. Share capital
The Ordinary Shares issued by the Company have a 1p par value. The Ordinary
Shares rank pari passu in all respects, including the right to attend and vote
in general meetings, to receive dividends and any return of capital.
Six months ended 30 June 2023
Number of Share Capital Share Premium
shares
£'000
£'000
Brought forward at 1 January 2023 964,694,093 9,647 2,177
Shares issued in the period 24,476,022 245 -
As at 30 June 2023 989,170,115 9,892 2,177
On 24 May 2023, the Company issued 24,476,022 New Ordinary Shares at their par
value of 1p. The New Ordinary Shares were to compensate certain parties in
lieu of cash compensation and serve as long term performance
incentivisation.
15. Share-based payment arrangements
The total expense recognised in the Statement of Comprehensive Income during
the period in respect of warrants over Ordinary Shares issued pursuant to the
2021 Warrant Instrument in connection with the issue of Pre-IPO Shares was
£36,000 (2021: £nil). No warrants were issued, exercised or expired during
the period ended 30 June 2023.
16. Related party transactions
Transactions with directors:
Charles Bray is owed £61,817 by the Company at 30 June 2023 (31 December
2022: £20,514 owed by the Company).
The Company received loans from IQ EQ (Jersey) Limited, trustee of Charles
Bray Transfer Trust as more fully described above in Note 13.
Edlin Holdings Limited is an Isle of Man company which invests and operates
non-US based investments. The ultimate beneficial owners of Edlin Holdings
Limited are Bray family members.
Charles Bray subscribed for 5,000,000 Ordinary Shares of the Company as part
of the shares issued on 24 May 2023 described in Note 14.
Details of Directors' remuneration is set out above in Note 5.
17. Seasonality of the Group's business
There are no seasonal factors which materially affect the operations of the
Group's business.
18. Subsequent events
Lithium Joint Venture with Rio Tinto in Rwanda
On 31 July 2023, the Company signed a definitive Earn-In Investment and Joint
Venture Agreement ("Agreement") with Rio Tinto Mining and Exploration Ltd
("RIO") and Kinunga Mining Ltd ("Kinunga"). The Agreement is for the
exploration and development of lithium and by-products at its HCK Joint
Venture project ("Project") holding the HCK licence (the "Licence") in the
Republic of Rwanda.
RIO has the option to incur work expenditure of US$3 million over a two-year
period ("Stage 1") to earn an initial 51% interest in the Licence. RIO will
also make cash payments to Aterian, totalling US$300,000, to reimburse
previous operational expenses incurred by Aterian. An initial payment of
US$200,000 is due upon completion of satisfactory due diligence by RIO, and an
additional payment of US$100,000 will be due at the start of Stage 2.
Upon earning a 51% interest in the Licence, RIO can earn an additional 24%
interest in the Licence by funding additional work expenditures of US$4.5
million over a three-year period ("Stage 2"). After Stage 2 RIO will, provided
it contributes the additional funding, hold a 75% interest in the Licence.
RIO has agreed to a 2% net smelter royalty (NSR) over the project with a US$50
million cap that will be due by the future Joint Venture between RIO and
Kinunga to a holder/holders to be notified by Aterian to RIO prior to the NSR
agreement being entered into and such holder/holders to be subject to
completion of satisfactory due diligence by RIO.
Under the terms of the Agreement, RIO has an exclusivity option to invest into
Aterian's two other existing Rwandan projects, which will be subject to their
own separate agreements. A management committee comprising representatives of
both RIO and Aterian will be formed to provide financial and operational
oversight. RIO will act as the operator for the Project.
Fundraising
On 9 August 2023, the Company raised gross proceeds of £1,000,000 (before
expenses) from Directors, management, existing shareholders and new investors
through the issue of 100,000,000 new ordinary shares ("New Ordinary Shares")
at a price of 1.00 pence each.
The Executive Chairman and largest single individual shareholder, Charles Bray
invested £500,000 in the Fundraise consisting of £200,000 of new equity
capital and £300,000 from the conversion to equity of a short-term debt
utilising a working capital facility provided to the Company. Luke Rogers, the
Aterian COO subscribed for 800,000 new Ordinary Shares (£8,000). Simon
Rollason, the Company's CEO, converted 3 months' salary into 2,500,000 New
Ordinary Shares (£25,000).
For each subscribed New Ordinary Share, investors will receive newly issued
warrants on a one-for-one basis. The warrants are split into 50% exercisable
at 1p any time up to the first anniversary of Admission, with the remaining
50% exercisable at 1.2p at any time up until the second anniversary of
Admission.
19. Reports
A copy of this half year interim report, as well as the annual statutory
accounts to 31 December 2022 are available on the Company's website at
www.aterianplc.com (http://www.aterianplc.com)
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