REG - Aterian PLC - Interim Results
23/09/2024 07:00
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RNS Number : 1146F Aterian PLC 23 September 2024
23 September 2024
Interim Results for the six months ended 30 June 2024
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 2024.
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
Simon Rollason, Director - simon.rollason@aterianplc.com
Financial Adviser and Joint Broker:
Novum Securities Limited
David Coffman / George Duxberry
Colin Rowbury
Tel: +44 (0)207 399 9400
Joint Broker:
SP Angel Corporate Finance LLP
Ewan Leggat / Kasia Brzozowska
Tel: +44 20 3470 0470
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 metals projects.
Aterian plc is actively seeking to acquire and develop new critical 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 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 to explore and develop lithium-tantalum-niobium-tin mining operations.
Aterian currently holds a portfolio of multiple copper-silver and base metal
projects in the Kingdom of Morocco, with a total area of 897 km2. In January
2024, the Company announced the acquisition of a 90 % interest in Atlantis
Metals. This private Botswana registered company holds seven mineral
prospecting licences for copper-silver in the Kalahari Copperbelt and three
for lithium brine exploration in the Makgadikgadi Pans region. The total
licence area in Botswana is 4,486 km2.
The Company's strategy is to seek new exploration and production opportunities
across the African continent and to develop new sources of critical mineral
assets for exploration, development, and trading.
Statement of Directors' Responsibilities in respect of the Condensed
Consolidated Financial Statements
The directors confirm that these condensed interim financial statements have
been prepared in accordance with 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 and that
the interim management report includes a fair review of the information
required by DTR 4.2.7 and DTR 4.2.8, namely:
• an indication of important events that have occurred during the first six
months and their impact on the condensed set of financial statements, and a
description of the principal risks and uncertainties for the remaining six
months of the financial year; and
• material related-party transactions in the first six months and any
material changes in the related-party transactions described in the last
annual report.
The directors of Aterian Plc are listed in the Company's annual report for 31
December 2023 and the Company's website: https://aterianplc.com/
(https://aterianplc.com/) There have been no changes since 31 December
2023.
The Interim Financial Statements were approved by the Board of Directors and
the above responsibility statement was signed on its behalf by:
Charles Bray
Director
20 September 2024
Chairman's statement
I am pleased to announce the unaudited Interim Results of the Group for the
half-year ending 30 June 2024.
These accounts reflect a loss of £504,000 (2023:£858,000) arising from
administrative costs; this corresponds to the Company's expenditure on
overheads, operational and exploration expenses. Additional expenditure was
incurred on mineral exploration in Morocco, Botswana, and Rwanda, where we are
establishing a mineral trading business.
Our strategy focuses on responsibly exploring and developing critical mineral
and metal resources across Africa, a region vital for a successful energy
transition. The renewable energy, automotive, and electronic manufacturing
sectors are currently driving the need to develop secure supply chains for
critical metals. We firmly believe the long-term market fundamentals for
copper are excellent and linked specifically to the anticipated growing demand
for renewable energy and related transportation electrification globally. We
also believe that long term supply demand dynamics bode well for lithium.
We currently have active projects in Rwanda, Morocco, and Botswana.
Rwanda Update
Aterian, through its 100% owned Rwanda registered subsidiary, Eastinco Limited
("Eastinco"), is actively engaged in mineral exploration and developing its
portfolio of critical metals in Rwanda, focusing on the country's excellent
hard rock lithium potential. The Company has two partnerships exploring and
developing the lithium-tantalum (+niobium) and tin opportunities hosted within
numerous mapped intrusive pegmatite dykes and sills. Eastinco Limited holds a
mineral trading licence issued by the authorities in Rwanda, which allows for
trading mineral concentrates from internal supply and third-party producers
and suppliers. We continue to slowly develop this business with a focus on
minimising capital costs and risks associated with trading.
Below is a brief description of the operational HCK project. The Musasa and
Dynasty projects are pending licence approvals from the Rwandan authorities.
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 entered an earn-in
Joint Venture Agreement with Rio Tinto Mining and Exploration Ltd ("Rio
Tinto") over this project in August 2023. Under this joint venture, Rio Tinto
can earn up to 75% interest in the project by funding a two-stage exploration
programme with total committed expenditures of US$ 7.5 million.
A summary of activities being managed and operated by Rio Tinto is given
below.
Rio Tinto's operational field teams have collected 277 rock chip surface
samples from several mapping campaigns over the licence and 3,029 geochemical
soil samples, with full assay results pending. Recent soil sampling has
focused on tighter in-fill control over ten selected priority areas.
Completing and interpreting ground magnetic and radiometric geophysical
surveys and geological mapping supports this work. Planning for the initial
drilling campaign is well underway, with site access and drill pad preparatory
work expected to start in August 2024. The drill programme is scheduled to
commence in late Q3/2024.
Elemental Altus Royalty Corp holds a 1.25% to 1.4 % (depending on the Rwandan
total exploration land holding) net smelter return ("NSR") over this project.
Rwanda Metal Trading
In July 2024, post-reporting period, the Company announced the successful
completion of a metal concentrates Off-take Agreement by its Rwandan
subsidiary, Eastinco Limited, with a significant international trading house.
This key strategic partnership allows for the sale and distribution of
Eastinco's tantalum-niobium and tin concentrate secured from Rwandan-based
artisanal and small-scale mining ("ASM") companies and cooperatives,
significantly enhancing the company's ability to generate revenue from
aggregating and upgrading ASM concentrate supplies.
In conjunction with this Agreement, Aterian has agreed on the terms for a US$
1.0 million maximum secured trade finance debt facility from a financial
investor. This Facility is a revolving debt facility with an approximately
14.4% annual interest rate, subject to the completion of due diligence and
legal documentation. The Facility will provide the Company with the necessary
working capital requirements for trading operations, ensuring seamless
execution and operational efficiency. Confidentiality has been agreed amongst
the parties to protect our mutual commercial interests in a highly competitive
environment.
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.
Morocco Update
The Company presently holds 897 km(2) under licence in the Kingdom of Morocco
("Morocco"). The licences primarily target critical minerals focusing on
copper and silver and are held 100% by the Company's Moroccan subsidiaries.
Elemental Altus Royalty Corporation has a 2.5 % NSR royalty over each of the
licences held by Aterian in Morocco.
Most of the projects occur within the Anti-Atlas region in Morocco, a region
known for its significant copper deposits, which have been mined since ancient
times. The Anti-Atlas Mountains are part of the Precambrian crystalline
basement of Morocco. Various types and styles of mineralisation characterise
them due to their complex geological history involving multiple phases of
tectonic activity and magmatism. Copper is primarily found in the form of
sulphide minerals such as chalcopyrite, chalcocite, and bornite with deposits
associated with Neoproterozoic volcanic and sedimentary rocks, often linked to
ancient volcanic-sedimentary basins and rift zones. Sedimentary-hosted copper
deposits in the Anti-Atlas region of Morocco are a significant aspect of the
area's geology and mining industry, with copper mineralisation often hosted in
sandstone, shale, and carbonate rocks. The host formations include the
Adoudounian (and Cambrian aged) dolomites and limestones, well-known for
hosting copper and other metals.
The Company is currently reviewing its existing portfolio to rationalise the
Moroccan project assets, whether due to geology, geography and/or lack of
existing infrastructure. Additionally, we await the Moroccan government
licence review and expect the addition and subtraction of some licences. The
government's feedback, combined with our internal assessment will allow the
Company to focus its efforts on the most highly prospective projects.
Below is a brief description of the key projects in Morocco.
The Agdz Project
The Agdz Project covers 34.46 km(2) and comprises a single mining licence. 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 Bou Skour copper-silver mine,
with the world-class Imiter silver mine located 80 km to the northeast, both
operated by Managem Group.
A scout drill programme is scheduled for Q3/2024, targeting historical copper
workings, geophysical anomalies, copper mineralisation identified in
reconnaissance trenching, and copper observed in outcrops during surface
geological mapping. The expected outcomes from this programme will provide
indications of the economic potential of the copper-silver mineralisation,
improved datasets to revise the geophysical interpretation, aid in refining
the geological model, confirm the style of copper mineralisation, and allow
planning for additional drilling to advance the project towards a mineral
resource estimation.
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 sub-parallel
NE and NW striking brittle faults and alteration zones, several of which have
been historically mined for copper. A 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), geological
mapping and geophysical interpretation. 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 km(2) and is located within the
western Anti-Atlas Mountains of Morocco. It occurs 30 km south of the
Company's Azrar copper-silver project. The Project is approximately 465 km
south of Rabat's capital, 165 km southeast of the port city of Agadir, and 50
km southeast of the Managem Group-operated Tizert copper mine.
Carbonate-rich sediments from the Late Ediacaran to early Cambrian Adoudou
Formation occur within the Project along the margins of the Palaeoproterozoic
Tagragra de Tata Inlier. Exploration work on the Project has identified copper
mineralisation hosted within Adoudou sediments and the younger overlying
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 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 (Managem Group).
The results, to date, indicate the presence of stratiform sedimentary copper
along a strike length of 18 km, with an unexplored strike length of c.26 km
within the Adoudou Formation and 9 km along the Tata Group sediments remaining
untested. Exploration results from rock chip sampling have reported up to 7.02
% Cu from bedding parallel, disseminated mineralisation occurring in
siltstones within the lower Adoudou Formation.
Additional mapping and sampling have occurred (results pending), including
several cross-sections traversing the local stratigraphy in more detail.
The company recently acquired airborne geophysical data from the Ministry of
Mines and has contracted out the re-processing of this data to an independent
consultant. The area covered by the historical airborne surveys includes the
Tata and Azrar projects. The results of this interpretation are anticipated to
allow for more focused ground follow-up, which will include detailed
geological mapping and ground-based geophysical surveys to define potential
drill targets.
The Azrar Project
The Azrar Project is situated in the western Anti-Atlas Mountains. It
comprises an area of 99.3 km(2) and is located 155 km southeast of the port
city of Agadir and 45 km southeast of the Tizert copper mine.
Fieldwork has identified high-grade copper and silver from multiple locations,
including 3.79 % Cu and 23 g/t Ag from an NE-SW trending fault-related breccia
cutting across the project's central area. More recently, a sample collected
from an 8 m thick carbonate bed with disseminated malachite observed along
bedding plane surfaces and cross-cutting fractures and joints reported 4.01 %
Cu with 26.9 g/t Ag, highlighting the potential for stratiform sediment-hosted
copper-silver mineralisation. Additional sedimentary hosted copper
mineralisation was observed from prospecting in the western area, with three
individual samples collected over a strike length of 1 km reporting copper
grades of 1.21 %, 0.57 % and 0.54 % Cu from Adoudounian age sedimentary
sequences. Several structures hosting mineralised quartz veining and fault
breccia are observed. Two samples from spoil material adjacent to old
artisanal workings returned good copper and associated gold (1.19 % Cu with
0.50 g/t Au, 1.22 % Cu with 0.33 g/t Au) from the quartz-specular hematite
veins. The workings are sub-vertical shafts and pits, up to 7 m deep and 2 m
wide, with veins up to 1.2m wide. Another vein sample was collected 1.8 km
south from the artisanal workings and returned 0.54 % Cu and 0.19 g/t Au along
the same structural trend.
Additional sampling and mapping have been undertaken (with results pending),
and plans include ground-based geophysical surveys, detailed geological
mapping and trenching to define drill targets.
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.
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 3.25 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.
Additional sampling and mapping have been undertaken (with results pending),
and plans include ground-based geophysical surveys and trenching to define
drill targets.
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
historic 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
on a prominent topographic hill, where several artisanal workings are
identified. All mapped workings appear to exploit quartz veins and fault zone
breccia with visible sulphide mineralisation.
Surface scree covers much of the high ground, obscuring most outcrops.
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.
Recent work has involved channel sampling across the mineralised structures
and a geochemical orientation survey over the flat ground to the north of the
hill to explore for hidden or blind extensions to the mineralisation
identified in the old surface workings. The results of this work are pending.
Botswana Update
In April 2024, the Company announced the completion of the acquisition of a
90% interest in Atlantis Metals (Pty) Ltd, a privately owned company
registered in Boswana and the holder of ten prospecting licences in Botswana.
Atlantis holds a portfolio of seven strategically located copper-silver
licences in the world-renowned Kalahari Copperbelt ("KCB") and three lithium
brine licences in the Makgadikgadi Pans, covering a total land area of
4,486.11 km(2).
The Kalahari Copperbelt is one of the world's most prospective areas for
yet-to-be-discovered sediment-hosted copper deposits (USGS, 2020) and hosts
several large stratabound, sediment-hosted copper-silver deposits. The KCB is
a northeast-trending Meso- to Neoproterozoic belt that occurs discontinuously
from western Namibia and stretches into northern Botswana along the
northwestern edge of the Paleoproterozoic Kalahari Craton. It is approximately
1,000 km long by up to 250 km wide. It contains copper-silver mineralisation,
generally stratabound, hosted in metasedimentary rocks that have been folded,
faulted and metamorphosed to greenschist facies during the Damara Orogeny.
Typically, the deposits comprise stratabound disseminated to structurally
controlled ore bodies 5 to 40 m thick with strike lengths ranging from 1.5 to
4 km. The main target horizon for copper mineralisation is towards the base of
the D'Kar Formation, close to the contact of the underlying red beds of the
Ngwako Pan Formation.
One of the Atlantis licences is situated approximately 50 km east
of Khoemacau Copper Mine ("KCM") Zone 5 deposit (92.9 million tonnes grading
2.0 % Cu and 21 g/t Ag), designed to produce 60,000 to 65,000 tonnes per annum
of copper and 2 million ounces per annum of silver metal in concentrate.
Furthermore, the Zone 9 Cu-Ag prospect, owned by KCM, is within 30 km of this
license area. Another licence is 7 km west of the KCM Banana zone, which hosts
157 million tonnes grading 0.86% Cu and 11 g/t Ag. In March 2024, MMG
Limited, listed on the Hong Kong Stock Exchange, completed the acquisition
of Cuprous Capital Ltd, the parent company of the Khoemacau Copper Mine,
for US$ 1.73 billion.
Atlantis holds three licences, covering a combined 2,516.93 km(2), which is
considered highly prospective for lithium brine. The licences are located
along the eastern and southern shores of Sua Pan, within the Central
District, with Sua Pan comprising one of three pans forming the Makgadikgadi
Salt Pans. As a means of boosting exploration investment, the Makgadikgadi
Pans region has been officially declared a "Lithium Zone" by the Ministry of
Mines and Energy since 2022 due to a history of known lithium brine
occurrence and the emergence of new Direct Lithium Extraction (DLE)
technologies capable of rendering once-thought uneconomic deposits, economic,
typically having lower CAPEX and OPEX compared to conventional evaporation
methods. Historical data reported in a 1980s study of the Sua Pan brines by
the US Trade and Development Program indicated anomalous lithium values. The
samples were collected from the northern area of Sua Pan and returned values
of 103, 117, and 223 mg/l Li (note that the precise sample locations are
unknown at this time).
Target generation is underway, with independent consultants acquiring and
reprocessing airborne geophysical and remote sensing data for the licences.
Strategically, we aim to explore and develop the asset portfolio in joint
ventures with partners with the expertise and capital to advance or eliminate
the projects as prospective. Unfortunately, Brexit has resulted in the
fragmentation of UK and EU capital markets, which in turn has diminished the
depth and fluidity of capital flows, especially for smaller capitalisation
companies. The resulting reduction in share prices and market
capitalisations has fed through sectors such as mining. These lower
valuations hamper the market's ability to invest, even while increasing the
opportunity set for those companies able to identify undervalued assets.
Charles Bray
Executive Chairman
20 September 2024
Principal Risks and Uncertainties
The Board considers strategic, operational and financial risks and identifies
actions to mitigate those risks. These risk profiles are updated at least
annually. The principal risks and uncertainties can be found in the Group's
risk profile analysis can be found on pages 17 to 21 of our Annual Report for
the year ended 31 December 2023, available from the Aterian plc website:
https://aterianplc.com/ (https://aterianplc.com/)
The principal risks and uncertainties which may impact results and prospects
over the second half of the year and a summary of the key measures taken to
mitigate those risks are as follows:
- Trading business
Eastinco Limited 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. Our 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. The outcome of
these procedures will have an impact on the timing and level of revenues which
might be generated before the year end.
- Rio Tinto Joint Venture
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 Tinto") and Kinunga Mining Ltd ("Kinunga"). The Agreement is for the
exploration and development of lithium and by-products at its HCK Joint
Venture project holding the HCK licence (the "Licence") in the Republic of
Rwanda.
Rio Tinto 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 Tinto 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 was made on completion of satisfactory due diligence by
Rio Tinto, and an additional payment of US$100,000 will be due at the start of
Stage 2.
The outcome of these procedures may impact on the prospects for and funding of
this project.
- Funding of the Group
The Group has not yet earned revenues and as at 30 June 2024 was in the
feasibility, optimisation and commissioning phase of its ore processing and
trading facility in Rwanda. In Morocco and Botswana, 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.
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
SIX MONTHS ENDED 30 JUNE 2024
Notes 6 months to 6 months to
30-Jun-24 30-Jun-23
(Unaudited) (Unaudited)
£'000 £'000
Revenue - -
- -
Administrative expenses 5 (684) (813)
Share-based payment expense 17 - (36)
Other income 6 200 -
Operating loss (484) (849)
Interest payable and similar charges 7 (20) (9)
Loss before tax (504) (858)
Tax expense 8 - -
Loss after tax (504) (858)
Other comprehensive income:
Items that may be reclassified to profit or loss
Gain/ (loss) on translation of foreign operations 24 (84)
Total comprehensive loss (480) (942)
Loss per share
Basic and diluted loss per share (pence) 9 (4.62) (8.78)
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 2024
Notes 30-Jun-24 31-Dec-23
(Unaudited) (Audited)
£'000 £'000
Non-current assets
Intangible exploration and evaluation assets 10 3,437 3,285
Property, plant and equipment 11 342 296
Total non-current assets 3,779 3,581
Current assets
Trade and other receivables 12 188 557
Cash and cash equivalents 110 73
Total current assets 298 630
Total assets 4,077 4,211
Equity and liabilities
Share capital 16 10,969 10,892
Share premium 16 2,642 2,177
Share based compensation reserve 2,442 2,442
Interest in shares in EBT (839) (839)
Translation reserve (400) (424)
Accumulated losses (12,534) (12,030)
Merger relief reserve 1,200 1,200
Total equity 3,480 3,418
Current liabilities
Trade and other payables 13 372 402
Deferred consideration 14 - 166
Borrowings 15 225 225
Total current liabilities 597 793
Total equity and liabilities 4,077 4,211
The Interim Condensed Financial Statements were approved and authorised for
issue by the Board of Directors on 20 September 2024.
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2024
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 2023 9,647 2,177 2,441 (839) (313) - 1,200 (10,968) 3,345
Loss for the period - - - - - - - (858) (858)
Other comprehensive loss - - - - (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
At 1 January 2024 10,892 2,177 2,442 (839) (424) - 1,200 (12,030) 3,418
Loss for the period - - - - - - - (504) (504)
Other comprehensive income - - - - 24 - - - 24
Transactions with owners:
Issue of new shares 77 465 - - - - - - 542
At 30 June 2024 10,969 2,642 2,442 (839) (400) - 1,200 (12,534) 3,480
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
SIX MONTHS ENDED 30 JUNE 2024
6 months to 6 months to
30-Jun-24 30-Jun-23
(Unaudited) (Unaudited)
Cash flow from operating activities £'000 £'000
Loss before tax (504) (858)
Adjustments for:
Depreciation 16 11
Share-based payment expense - 36
Interest expense 20 9
Foreign exchange (gains)/losses (31) 17
Costs settled by the issue of shares 42 245
Operating loss before working capital changes (457) (538)
Changes in working capital:
Decrease in trade & other receivables 161 78
(Decrease) / increase in trade & other payables (249) 43
Net cash outflows flow from operating activities (545) (419)
Cash flow from investing activities
Purchase of property, plant and equipment - (4)
Capitalised E&E expenditure (97) -
Acquisition of subsidiary (21) -
Net cash used in investing activities (118) (4)
Cash flow from financing activities
Net proceeds from issue of convertible loan notes 500 342
Interest paid (20) -
Net cash flow from financing activities 480 342
Net decrease in cash & cash equivalents (183) (81)
Cash & cash equivalents at beginning of the period 73 110
Effect of exchange rate movements on cash - (3)
Cash & cash equivalents at end of the period 110 26
ATERIAN PLC
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS
ENDED 30 JUNE 2024
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, Aterian Resources Limited which holds
copper-silver and base metal exploration projects in the Kingdom of Morocco
and its 90% interest in Atlantis Metals (Pty) Ltd, a Bostwana registered
entity holding mineral prospecting licences in the Republic of Botswana.
The condensed interim financial statements for the period ended 30 June 2024
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 2023. A copy of the statutory accounts for the year ended 31 December
2023 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 29 July 2024, the Listing Rules were replaced by the UK Listing Rules
("UKLR") under which the existing Standard Listing category was replaced by
the Equity Shares (transition) category under Chapter 22 of the UKLR.
Consequently, with effect from that date the Company is admitted to Equity
Shares (transition) category of the Official List under Chapter 22 of the UKLR
and to trading on the London Stock Exchange's Main Market for listed
securities.
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 material 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 2024 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 2023, 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 20
September 2024.
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 2024 was in the
feasibility, optimisation and commissioning phase of its ore processing and
trading facility in Rwanda. In Morocco and Botswana, 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 2024, the Group had cash and cash equivalents of £110,000 and a
working capital facility of £500,000 which is fully utilised. As at the date
of this report, cash balances were approximately £175,000. The Company hopes
to generate revenues 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 2024
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-24 30-Jun-23
(Unaudited) (Unaudited)
£'000 £'000
Directors' salaries (122) (120)
Staff costs (110) (58)
Auditor's remuneration (23) (52)
Travel expenses (27) (6)
Metallurgical tests - (4)
Legal expenses (24) (24)
Professional fees (189) (318)
Accounting fees (38) (60)
Depreciation (16) (11)
Geological survey costs (8) (19)
Trading expenses (2) (49)
Security costs (9) (8)
Rent (13) (2)
Other expenses (103) (84)
(684) (813)
Director salaries Fees and salaries Share-based payment expense Six months Six months
ended ended
30 June 2024 30 June 2023
Totals Total
£'000 £'000 £'000 £'000
Executive Directors
Charles Bray 48 - 48 48
Simon Rollason 48 - 48 48
Non-Executive Directors
Devon Marais 14 - 14 14
Alister Hume 6 - 6 5
Kasra Pezeshki 6 - 6 5
122 - 122 120
6. Other income
Six months ended Six months ended
30-Jun-24 30-Jun-23
(Unaudited) (Unaudited)
£'000 £'000
Disposal of NSR (Note 14) 200 -
200 -
7. Interest payable and similar charges
Six months ended Six months ended
30-Jun-24 30-Jun-23
(Unaudited) (Unaudited)
£'000 £'000
Interest on related party loan 20 9
20 9
8. Taxation
Tax expense Six months ended Six months ended
30-Jun-24 30-Jun-23
(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 £8.2 million as at 30
June 2024 (£7.5 million as at 31 December 2023) 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 £2.0 million as at 30 June 2024 (£1.8 million as
at 31 December 2023). 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.
9. 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-24 30-Jun-23
(Unaudited) (Unaudited)
£'000 £'000
Earnings
Loss from continuing operations for the period attributable to the equity (504) (858)
holders of the Company
Number of shares
Weighted average number of ordinary shares for the purpose of basic and
diluted earnings per share
10,912,989 9,768,708
Basic and diluted earnings per share (pence) (4.62p) (8.78p)
The earnings per share for the period ended 30 June 2023 has been restated and
presented on the basis of the share consolidation approved in June 2024, as
described in Note 16.
10. Intangible exploration and evaluation assets
Rwandan assets Moroccan assets Total
Cost £'000 £'000 £'000
At 1 January 2024 - 3,285 3,285
Acquisitions - 118 118
Foreign exchange adjustments - 34 34
At 30 June 2024 - 3,437 3,437
Impairment
At 1 January 2024 - - -
Charge for the period - - -
At 30 June 2024 - - -
Net book value
At 30 June 2024 - 3,437 3,437
At 1 January 2024 - 3,285 3,285
11. 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 2024 624 299 6 6 5 1 27 968
Foreign exchange adjustments - 54 1 6 - 5 (4) 62
At 30 June 2024 624 353 7 12 5 6 23 1,030
Depreciation
At 1 January 2024 624 40 6 - 2 - - 672
Charge for the period - 14 1 1 - - - 16
At 30 June 2024 624 54 7 1 2 - - 688
Net book value
At 30 June 2024 - 299 - 11 3 6 23 342
At 1 January 2024 - 259 - 6 3 1 27 296
12. Trade and other receivables
30-Jun-24 31-Dec-23
(Unaudited) (Audited)
£'000 £'000
Taxes receivable 36 28
Amounts due from farmee - 157
Other debtors 129 347
Prepayments 23 25
188 557
13. Trade and other payables
30-Jun-24 31-Dec-23
(Unaudited) (Audited)
£'000 £'000
Trade payables 238 194
VAT payable 111 34
Other payables - 99
Accruals 23 75
372 402
14. Deferred consideration
30-Jun-24 31-Dec-23
(Unaudited) (Audited)
£'000 £'000
Deferred consideration - 166
- 166
Deferred consideration was payable to Altus Exploration Management Ltd in
respect of the acquisition of Aterian Resources Limited. In April 2024, the
Company reached an agreement for the disposal of its portion of the Net
Smelter Return Royalty ("NSR") over the HCK Project in Rwanda for a £200,000
gross consideration. Under the agreement the Company sold its interest of 1.40
% of the Rio Tinto Joint Venture NSR to Elemental Altus Royalties Corporation
("Elemental Altus") in exchange for a repayment in full of the total debt
consideration owing to Elemental Altus by the Company. This royalty reduces to
1.25% upon the Musasa licence being issued The debt relates to historical
exploration costs in Morocco owing to Elemental Altus following the
acquisition of the Moroccan exploration portfolio.
15. Borrowings
Current liabilities 30-Jun-24 31-Dec-23
(Unaudited) (Audited)
£'000 £'000
Loan from related party 225 225
225 225
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. On 9 August 2023, £300,000 of
the loan balance was converted to Ordinary Shares. Interest of £19,734 was
payable for the period ended 30 June 2024.
16. Share capital
Six months ended 30 June 2024
Number of Number of Number of Share Capital Share Premium
ordinary shares of £0.01
ordinary shares of £0.001
deferred
£'000
£'000
shares of
£0.009
Brought forward at 1 January 2024 1,089,170,115 - - 10,892 2,177
Share split (1,089,170,115) 1,089,170,115 1,089,170,115 - -
Share consolidation - (1,078,278,405) - - -
Shares issued in the period - 774,566 - 77 465
As at 30 June 2024 - 11,666,276 1,089,170,115 10,969 2,642
During the period ended 30 June 2024, the following changes to the Company's
share capital took place:
- By way of an ordinary resolution passed at the Company's AGM on
10 June 2024, every one ordinary share of £0.01 each ("Existing Ordinary
Shares") was split into one ordinary share of £0.001 each ("New 0.1p Ords")
and one deferred share of £0.009 each ("Deferred Shares").
- On the same date, every existing 100 New 0.1p Ords in issue were
consolidated into one ordinary share of £0.10 each ("New Ordinary Shares")
such New Ordinary Shares having the same rights, and being subject to the same
restrictions, as the Existing Ordinary Shares.
·
- On 3 May 2024, the Company announced the issue of £500,000 of
Convertible Loan Notes (CLNs) to two existing shareholders, Altus Exploration
Management Ltd., a subsidiary of Elemental Altus Royalties Corp., a
substantial shareholder in the Company, and Mr. Simon Rollason, the Company's
CEO. On 26 June 2024, the Company announced that it had received notices to
convert £500,000 or the full amount of outstanding CLNs, issued and announced
on 3 May 2024. Additionally, following requests from three suppliers seeking
an increased shareholding in Aterian, the Company agreed to convert £42,197
of creditor balances. The Company therefore converted an aggregate of
£542,197 at 70 pence per share in exchange for the issue of 774,566 new
ordinary shares of 10p each in the Company.
The Deferred Shares have no right to vote or participate in the capital of the
Company save in respect of insolvency and the Company has not issued any
certificates or credited CREST accounts in respect of them. The Deferred
Shares have not been admitted to trading on any exchange.
17. Share-based payment arrangements
On 20 June 2024, the Company granted 130,000 EBT options to Directors,
Employees and former Directors and/or employees following the expiration of
existing EBT options.
The total expense recognised in the Statement of Comprehensive Income during
the period in respect of warrants over Ordinary Shares was £nil (2023:
£36,000). No warrants were issued, exercised or expired during the period
ended 30 June 2024.
18. Related party transactions
Transactions with directors:
Charles Bray is owed £2,096 by the Company at 30 June 2024 (31 December 2023:
£3,041 owed by the Company).
The Company had a loan of £225,000 due to IQ EQ (Jersey) Limited, the
trustees of the C Bray Transfer Trust as more fully described above in Note
15.
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.
As described in Note 16, the Company issued Convertible Loan Notes (CLNs)
totalling £42,666 to Simon Rollason on 3 May 2024. On 26 June 2024, these
CLNs were converted for an aggregate of £60,952 at 70 pence per share in
exchange for the issue of 60,952 new ordinary shares of 10p each in the
Company.
Details of Directors' remuneration is set out above in Note 5.
19. Seasonality of the Group's business
There are no seasonal factors which materially affect the operations of the
Group's business.
20. Subsequent events
There are no events occurring subsequent to 30 June 2024 requiring disclosure
in these interim financial statements.
21. Reports
A copy of this half year interim report, as well as the annual statutory
accounts to 31 December 2023 are available on the Company's website at
www.aterianplc.com (http://www.aterianplc.com)
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