REG - Blencowe Resources - Half-year Report
02/06/2023 07:00
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RNS Number : 3951B Blencowe Resources PLC 02 June 2023
Date: 02 June 2023
Blencowe Resources Plc
("Blencowe" or the "Company")
Interim Consolidated Financial Statements
for the six month period ended 31 March 2023
The Company is pleased to announce its Interim Results for the six-month
period to 31 March 2023.
Electronic copies of the report will be available at the Company's website
www.blencoweresourcesplc.com (http://www.blencoweresourcesplc.com)
For further information please contact:
Blencowe Resources www.blencoweresourcesplc.com (http://www.blencoweresourcesplc.com)
Sam Quinn Tel: +44 (0) 1624 681 250
info@blencoweresourcesplc.com
Investor Enquiries Tel: +44 (0) 7891 677 441
Sasha Sethi sasha@flowcomms.com (mailto:sasha@flowcomms.com)
Tavira Securities Limited Tel: +44 (0)203 192 1733
Jonathan Evans jonathan.evans@tavirasecurities.com
First Equity Limited Tel: +44 (0)20 7330 1883
Jason Robertson jasonrobertson@firstequitylimited.com
(mailto:jasonrobertson@firstequitylimited.com)
Interim Management Report
The period to 31 March 2023 (and subsequent events to 30 April 2023) have seen
the Company continue to develop its Orom-Cross graphite project.
A Definitive Feasibility Study ("DFS") commenced and is underway on a number
of fronts; this is expected to take around 12 months to complete but the
timing is dependent on pre-qualification test work being completed as a means
to ultimately deliver binding offtake contracts for the full quantum of
graphite concentrate being considered for sale under the phase one operational
model. Experienced Australian engineering firm CPC Engineering have agreed
to manage and sign off on the DFS, and their experience and involvement will
assist greatly in achieving a high quality study and result.
DFS work will concentrate on three key areas. Firstly, work in-country to
complete all work necessary to build and operate the mine, including all
remaining licenses and permits. The associated infrastructure required to
drive the operation will be scrutinised and plans put in place to ensure that
all necessary infrastructure will be ready and in place for mining at
Orom-Cross. Local studies include management and personnel, mining,
equipment, logistics and other key areas. The DFS will take these studies to
a far greater extent than the PFS in 2022.
Secondly, pre-qualification testing is taking place in the United States and
China to advance the status of Orom-Cross graphite to potential buyers. A
bulk sample of 100 tonnes was mined from Orom-Cross in January and (via a
special export permit) was approved for transport to China by sea, where it
will be put through an existing graphite pilot testing facility. This will
save Blencowe substantial time and money by not having to build its own pilot
facility on-site to get pre-qualified. The resultant tonnes of 96%
concentrate will be then processed to a series of 99.9% products, both
expendable's (large flakes) and SPG (spheronised, purified graphite) (smaller
flakes). Assuming successful these samples will be given to end user OEMs to
conduct their own testing in their own facilities, to ensure Orom-Cross end
product meets their standards and expectations. Once this process is
completed then Orom-Cross becomes 'qualified' and offtake contract discussions
may be entered into.
A 150kg sample was sent to China by air as a preliminary raw material product
for the same pilot facility to run tests on how to achieve the best results on
the larger sample to follow, and the Company expects feedback on this
shortly. This full qualification process is what sets graphite apart from
most other metals and it also creates barriers to entry for new participants
in the industry. Blencowe is confident that it has the right
process/procedures in place to achieve the results it requires to pass this
key hurdle. Without binding offtake agreements, it will be difficult to
deliver a decision to mine and/or project funding, so this is a critical path
item within the DFS. In the past this process has taken other graphite
companies several years, Blencowe is hoping that the refinement of this
process via its advisors will ensure we ultimately complete this
pre-qualification much faster.
In parallel Blencowe is conducting further metallurgical test work in USA to
provide evidence (bench-scale testing) that the 96% concentrate it will
deliver at Orom-Cross will be suitable for upgrading to the 99.9% end products
sought after by the market, and how this us best achieved. These results are
expected soon and will be important in ascertaining the end value within the
project portfolio.
Thirdly, Blencowe is working through a number of different potential funding
options to secure the right partnerships for funding both the DFS and the
project implementation. There are different alternatives at both topco and
project level and it is important that the right relationships are built that
can deliver this project ahead, both now (DFS stage) and in building the full
project. Blencowe announced in April its successful passing through a key
screening hurdle/test with the Development Finance Corporation (DFC) which is
a tier one US Govt-owned financial institution which provides funding
solutions for the private sector in areas the US Govt deems are critical.
Graphite is considered critical and hence the interaction. This is seen as a
valuable relationship for Orom-Cross and the Company is hoping to sign off on
a substantial technical assistance grant with the DFC in the near term that
will provide up to 50% of the DFS costs. Thereafter this relationship has
the potential to offer further funding solutions for the full project finance
required. The credibility that association with an institution of this
stature brings to both our Company and our project cannot be easily measured;
this would be a big result for Blencowe.
These and other DFS activities are the focus and will remain so for the
Company ahead. Further capital will be introduced into the Company as and
when required, with the continued support of our major shareholders, and once
Blencowe delivers the DFC technical assistance grant it is believed that many
other funding opportunities will emerge at all levels.
Elsewhere, the Company walked away from the previously announced nickel
exploration earn-in deal with SIPA Resources as it was considered more
advantageous to concentrate on delivering the Orom-Cross graphite project into
production ahead.
Mike Ralston
Chief Executive Officer
Responsibility Statement of the Directors in respect of the Interim Report
The Directors are responsible for preparing the Interim Financial Statements
in accordance with applicable law and regulations. In addition, the Directors
have elected to prepare the Interim Financial Statements in accordance with
International Financial Reporting Standards ("IFRSs"), as adopted by the
United Kingdom ("UK").
The Interim Financial Statements are required to give a true and fair view of
the state of affairs of the Group and of the profit or loss of the Group for
that period.
In preparing these Interim Financial Statements, the Directors are required
to:
· select suitable accounting policies and then apply them consistently;
· present information and make judgements that are reasonable, prudent
and provides relevant, comparable and understandable information;
· provide additional disclosures when compliance with the specific
requirements in IFRS is insufficient to enable users to understand the impact
of particulars transactions, other events and conditions on the entity's
financial position and financial performance; and
· make an assessment of the Group's ability to continue as a going
concern.
The Directors are responsible for keeping proper accounting records that are
sufficient to show and explain the Group's transactions and disclose with
reasonable accuracy at any time its financial position of the Group to enable
them ensure that the financial statements comply with the requirements of the
Companies Act 2006. They have general responsibility for taking such steps as
are reasonably open to them to safeguard the assets of the Group and to
prevent and detect fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the
corporate and Interim Financial Statements. Legislation governing the
preparation and dissemination of Interim Financial Statements may differ from
one jurisdiction to another.
We confirm that to the best of our knowledge:
· the Interim Financial Statements, prepared in accordance with
International Financial Reporting Standards as adopted by the UK, give a true
and fair view of the assets, liabilities, financial position and profit or
loss of the Group for the period;
· the Director's report includes a fair review of the development
and performance of the business and the position of the group, together with a
description of the principal risks and uncertainties that they face; and
· the annual report and financial statements, taken as a whole, are
fair, balanced and understandable and provide the information necessary for
shareholders to assess the group's performance, business model and strategy.
Consolidated Statement of Comprehensive Income for the six month period ended 31 March 2023
6 months ended 6 months ended 12 months ended
31 Mar 2023 31 Mar 2022 30 Sep 2022
(Unaudited) (Unaudited) (Audited)
Notes GBP GBP GBP
Exploration costs (16,642) (2,744) (4,853)
Impairment -Akelikongo project - - (404,533)
Administrative fees and other expenses 5 (446,424) (331,617) (681,488)
Adjustments to Liability to surface liability - - 51,316
Operating loss (463,066) (334,361) (1,039,558)
Finance costs (23,010) (21,975) (45,916)
Loss before tax (486,076) (356,336) (1,085,474)
Income tax - - -
Loss after tax (486,076) (356,336) (1,085,474)
Other comprehensive income
Exchange differences on translation of foreign operation 7,807 (2,061) (4,205)
Other comprehensive income, net of tax 7,807 (2,061) (4,205)
Total comprehensive loss (478,269) (358,397) (1,089,679)
Basic and diluted loss per share (pence) 9 (0.28) (0.27) (0.68)
There was no other comprehensive income for the period ended on 31 March
2023.
Consolidated Statement of Financial Position as at 31 March 2023
As at As at As at
31 Mar 2023 31 Mar 2022 30 Sept 2022
(Unaudited) (Unaudited) (Audited)
Notes GBP GBP GBP
Non-Current Assets 7,065,820 5,815,114 6,615,253
Current assets
Trade and other receivables 6 135,901 248,413 85,847
Cash and cash equivalents 130,740 968,693 346,994
Total current assets 266,641 1,217,106 432,841
Total assets 7,332,461 7,032,220 7,048,094
Current liabilities
Creditors: Amounts falling due within one year (429,843) (282,217) (326,375)
Total current liabilities (429,843) (282,217) (326,375)
Non-current liabilities
Surface liabilities (785,520) (924,359) (825,852)
Total liabilities (1,215,363) (1,206,576) (1,152,227)
Net assets 6,117,098 5,825,644 5,897,867
Equity
Share capital 1,931,316 1,101,316 1,181,316
Share premium 7,428,329 6,841,596 7,480,829
Warrants reserves 402,148 317,876 402,148
Translation reserve 7,264 1,601 (543)
Retained earnings (3,651,959) (2,436,745) (3,165,883)
Total equity 6,117,098 5,825,644 5,897,867
Consolidated Statement of Changes in Equity for the six month period ended 31 March 2023
Share capital Share premium Share option reserves Retained earnings Translation reserve Total equity
GBP GBP GBP GBP GBP GBP
Balance as at 30 Sep 2021 901,316 5,132,081 317,876 (2,080,409) 3,662 4,274,526
Total comprehensive loss for 6 months
Loss for the period - - - (356,336) - (356,336)
Total comprehensive loss - - - (356,336) - (356,336)
Contributions from equity holders
New shares issued 200,000 1,800,000 - - - 2,000,000
Share issue costs - (90,485) - - - (90,485)
Exchange differences on translation - - - - (2,061) (2,061)
Total contributions from equity holders 200,000 1,709,515 - - (2,061) 1,907,454
Balance as at 31 Mar 2022 1,101,316 6,841,596 317,876 (2,436,745) 1,601 5,825,644
Total comprehensive loss for 6 months
Loss for the period - - - (729,138) - (729,138)
Total comprehensive loss - - - (729,138) - (729,138)
Contributions from equity holders
New shares issued 80,000 720,000 - - - 800,000
Share issue costs - (80,767) - - - (80,767)
Warrants reserve 84,272 - - 84,272
Exchange differences on translation of foreign operations - - - - (2,144) (2,144)
Total contributions from equity holders 80,000 639,233 84,272 (729,138) (2,144) 801,361
Balance as at 30 Sep 2022 1,181,316 7,480,829 402,148 (3,165,883) (543) 5,897,867
Consolidated Statement of Changes in Equity for the six month period ended 31 March 2023
Share capital Share premium Share option reserves Retained earnings Translation reserve Total equity
GBP GBP GBP GBP GBP GBP
Balance as at 30 Sep 2022 1,181,316 7,480,829 402,148 (3,165,883) (543) 5,897,867
Total comprehensive loss for 6 months
Loss for the period - - - (486,076) - (486,076)
Total comprehensive loss - - - (486,076) - (486,076)
Contributions from equity holders
New shares issued 750,000 - - - - 750,000
Share issued costs - (52,500) - - - (52,500)
Exchange differences on translation of foreign operations - - - - 7,807 7,807
Total contributions from equity holders 750,000 (52,500) - - 7,807 705,307
Balance as at 31 Mar 2023 1,931,316 7,428,329 402,148 (3,651,959) 7,264 6,117,098
Consolidated Statement of Cash Flows for the six month period ended 31 March 2023
As at As at As at
31 Mar 2023 31 Mar 2022 30 Sept 2022
(Unaudited) (Unaudited) (Audited)
Notes GBP GBP GBP
Operating activities
Loss after tax (486,076) (356,336) (1,085,474)
Depreciation 104 - -
Finance costs 23,010 21,974 45,916
Adjustment to Surface Liability - - (51,316)
Share issue/warrant cost - - 84,272
Impairment - Akelikongo costs - - 404,533
Unrealised currency translation 261,566 (61,217) (208,371)
Changes in working capital
Decrease/(increase) in trade and other receivables (50,054) (195,833) (33,267)
Increase/(decrease) in trade and other payables (39,568) 38,945 76,483
Net cash flows from operating activities (291,018) (552,467) (767,224)
Cash flows from financing activities
Purchase of fixed assets (748) - -
Investment in exploration assets (621,988) (481,643) (1,423,236)
Net cash flows from investment activities (622,736) (481,643) (1,423,236)
Financing activities
Shares issued 750,000 2,000,000 -
Shares issued (cost) (52,500) (90,486) 2,444,166
Net cash flows from financing activities 697,500 1,909,514 2,444,166
Increase in cash and short-term deposits (216,254) 875,404 253,706
Cash and short-term deposits brought forward 346,994 93,288 93,288
Cash and cash equivalents at end of period 130,740 968,692 346,994
Notes to the Financial Statements for the six month period ended 31 March 2023
1. General
Blencowe Resources Plc (the "Company") is a public limited company
incorporated and registered in England and Wales on 18 September 2017 with
registered company number 10966847 and its registered office situated in
England and Wales at 167-169 Great Portland Street, Fifth Floor, London,
England W1W 5PF.
The Group did not earn any trading income during the period under review but
incurred expenditure in developing its principal assets.
The Consolidated Interim Financial Statements of the Company for the six month
period ended 31 March 2023 comprise the financial statements of the Company
and its subsidiaries (together referred to as the "Group").
2. Accounting Policies
Basis of preparation
The Interim Financial Statements of the Group are unaudited condensed
financial statements for the six month period ended 31 March 2023.
The accounting policies applied by the Group in these Interim Financial
Statements, are the same as those applied by the Group in its consolidated
financial statements and have been prepared on the basis of the accounting
policies applied for the financial year to 30 September 2022 which have been
prepared in accordance with IFRS as adopted by UK for. The Group Financial
Statements have been prepared using the measurement bases specified by IFRS
each type of asset, liability, income and expense.
The Group Financial Statements are presented in £, which is the Group's
functional currency. All amounts have been rounded to the nearest pound,
unless otherwise stated.
Comparative figures
The comparative figures have been presented as the Group Financial Statements
cover the 6 month period ended 31 March 2022 and the 12 month period ended 30
September 2022.
3. Critical accounting estimates and judgments
In preparing the Group's Interim Financial Statements, the Directors have to
make judgments on how to apply the Group's accounting policies and make
estimates about the future. The Directors do not consider there to be any
critical judgments that have been made in arriving at the amounts recognised
in the Group Financial Statements.
4. Significant accounting policies
The accounting policies adopted are consistent with those followed in the
preparation of the annual financial statements of Blencowe Resources Plc for
the year ended 30 September 2022. A copy of these financial statements is
available on the Group website at https://blencoweresourcesplc.com/
(https://blencoweresourcesplc.com/)
5. Administrative fee and other expenses
6 months ended 6 months ended 12 Months ended
31 Mar 2023 31 Mar 2022 30 Sep 2022
(Unaudited) (Unaudited) (Audited)
GBP GBP GBP
Directors' remuneration 70,023 70,046 173,413
Professional fees 121,692 130,655 274,333
Salaries 75,000 60,000 142,500
Listing fees 18,218 19,783 26,910
Audit fees 21,644 4,375 29,000
Share issue/warrant cost - - 84,272
Administration fees 23,500 23,500 47,000
Broker fees 20,500 29,542 38,048
Travelling expenses 7,959 - 34,167
Miscellaneous fees 87,888 (6,284) (168,155)
Total 446,424 331,617 681,488
The Group had two employees who are key management personnel and three
Directors. The Directors and the key management personnel's remuneration
related solely to short term employee benefits.
6. Trade and other receivables
6 months ended 6 months ended 12 Months ended
31 Mar 2023 31 Mar 2022 30 Sep 2022
(Unaudited) (Unaudited) (Audited)
GBP GBP GBP
Other receivables 21,526 37,997 24,765
Prepayments 114,375 210,416 61,082
Total 135,901 248,413 85,847
7. Creditors: Amounts falling due within one year
6 months ended 6 months ended 12 Months ended
31 Mar 2023 31 Mar 2022 30 Sep 2022
(Unaudited) (Unaudited) (Audited)
GBP GBP GBP
Payables 118,980 268,067 140,018
Land Owners Liability 143,036 - 154,403
Accruals and provision 167,827 14,150 31,954
Total 429,843 282,217 326,375
8. Creditors: Amounts falling after one year
BRUL, the Company's subsidiary entered into an agreement for surface rights
over the land in the mineral area of the licence. The land owners granted BRUL
a 49 year lease over an area. The liability to the land owners is to be paid
in 8 instalments on at defined dates with the final payment due in 2035.
6 months ended 6 months ended 12 Months ended
31 Mar 2023 31 Mar 2022 30 Sep 2022
(Unaudited) (Unaudited) (Audited)
GBP GBP GBP
Total payable at the beginning of the period 978,255 887,560 887,560
Change in estimate - - (51,316)
Interest charged during the period 23,010 21,975 45,916
Exchange loss on valuation (72,709) 14,824 96,095
Total payable as at period end 928,556 924,359 978,255
Analysis between current and non-current liability
Payable within 12 months 143,036 - 154,403
Payable after 12 months 785,520 924,359 823,852
928,556 924,359 978,255
The value of the lease is measured at the present value of the contractual
payments due to the lessor
over the lease term, with the discount rate of 5%.
9. Loss per share
The calculation of the basic and diluted loss per share is based on the
following data:
6 months ended 6 months ended 12 Months ended
31 Mar 2023 31 Mar 2022 30 Sep 2022
(Unaudited) (Unaudited) (Audited)
Earnings GBP GBP GBP
Loss from continuing operations for the period attributable to the equity (478,269) (353,336) (1,085,474)
holders of the Group
Number of shares
Weighted average number of Ordinary Shares for the purpose of basic and
diluted earnings per share
168,803,923 133,655,997 160,790,224
Basic and diluted loss per share (pence) (0.28) (0.27) (0.68)
There are no potentially dilutive shares in issue.
10. Related party transactions
The are no related party transactions during the period except for the
Directors' remuneration, which have been disclosed in note 5.
Sam Quinn is a director and shareholder of the Company and a Director of
Lionshead Consultants Limited. During the period, Lionshead Consultants
Limited charged fees for consultancy fees of £18,000 (31 March 2022: £12,000
and 30 Sep 2022: £24,000).
11. Events after the reporting date
On 27 April 2023, the Company announced that it has managed to secure a
strategic funding partner for the Orom-cross graphite project. The Development
Finance Corporation engaged to fund 50% of the definitive feasibility study
costs by way of a technical assistant grant. The DFC is the primary US
Government finance institution set up to provide financially sound solutions
for private sector initiatives pertaining to critical challenges facing the
world.
On 18 May 2023 Blencowe Resources Plc announced that it had raised £635,000
at 5 pence per share through the issue of 12,700,000 new ordinary shares of
0.5p placing shares. The Company will issue investors in the Placing with 1
warrant per 2 Placing Shares (Investor Warrants") which are exercisable at 8p
for a period of 3 years from Admission of the Placing Shares.
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