REG - Bradda Head Lithium - Unaudited Interim Results for the 9 and 3 Months
22/01/2024 11:00
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RNS Number : 4659A Bradda Head Lithium Ltd 22 January 2024
22 Janaury 2024
Bradda Head Lithium Ltd
("Bradda Head", "Bradda", or the "Company")
Unaudited Interim Results for the nine and three-months ended 30 November
2023
Bradda Head Lithium Ltd (AIM:BHL, TSX-V:BHLI), the North America-focused
lithium development group, is pleased to announce that it has today published
its unaudited financial results for the nine and three-months ended 30
November 2023, and the Management's Discussion and Analysis for the same
period.
Both of the above have been posted on the Company's
website www.braddaheadltd.com (http://www.braddaheadltd.com) and are also
available on SEDARplus (www.sedarplus.ca/landingpage
(http://www.sedarplus.ca/landingpage) ).
Financial and operational highlights
· The Company released an updated Mineral Resource Estimate ("MRE")
on 28 September 2023, which includes a total Inferred LCE content of 1.0 Mt.
· The total new MRE now comprises 17.0 million tonnes in the
Indicated category at 940 ppm carrying 85kt LCE, and 210 million tonnes in the
Inferred category at 900 ppm, carrying 1,000 kt LCE.
· The average in situ grade of the Inferred Basin East Mineral
Resource has increased from 694 to 900 ppm Li, a 30% increase.
· Following the release of an updated MRE and as per the Royalty
Agreement with the Lithium Royalty Corporation ("LRC"), Bradda Head formally
requested payment of US$ 2.5 million from LRC, with funds being received
during October 2023.
· Drilling continued at our San Dominog pegmatite asset, with first
assay results being received where grades of up to 0.83% Li2O over 6.35m and
1.03% Li2O over 3.05m were identified.
Ian Stalker, Chairman of Bradda Head, commented:
"This quarter has been one that reflects the efforts we are putting into all
our USA Lithium Projects, with positives steps made at our San Domingo lithium
in pegmatite asset, our Basin Sedimentary Lithium Clay Project and a
re-evaluation of our Lithium in Oli Brines in Texas and Pennsylvania. This
project effort is allied to our own house keeping efforts to ensure Bradda
Head treasury is solid going forward. Staff numbers have been reduced without
impact on our operational performance and unnecessary corporate expenditure
reduced or removed. The Board recognizes that the quality of the Projects we
own in the USA demand that we prepare ourselves in such a way as to be ready
to move quickly and efficiently for the undoubted next wave of Lithium demand
and uptick in pricing. We are well set to achieve this strategy.
Drilling continued through the quarter at San Domingo with the first set of
assay results highlighting the potential of the area. These results increased
our knowledge of the intriguing spodumene-rich pegmatite district, and the
drill hole geochemistry provides an improved understanding of the pegmatite
characteristics and mineralogical zoning at San Domingo, particularly at the
Midnight Owl and Bolt targets. Assay results received post period end support
our view of the near surface potential spodumene lithium resource in the
Central section of our San Domingo property.
Over at our lithium in clay Basin Project, we are moving closer to finalising
the next drill programme, expected to commence during H1 2024.
The pace of development will continue, and we look forward to updating our
shareholders as we receive exploration results."
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET
ABUSE REGULATION (EU No.596/2014) AS IT FORMS PART OF UK DOMESTIC LAW BY
VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018. UPONTHE PUBLICATION OF
THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INSIDE
INFORMATION IS NOWCONSIDERED TO BE IN THE PUBLIC DOMAIN AND SUCH PERSONS SHALL
THEREFORE CEASE TO BE IN POSSESSION OF INSIDEINFORMATION.
For further information please visit the Company's website:
www.braddaheadltd.com (http://www.braddaheadltd.com)
For further information, please contact:
Bradda Head Lithium Limited +44 (0) 1624 639 396
Ian Stalker, Executive Chairman
Denham Eke, Finance Director
Beaumont Cornish (Nomad) +44 20 7628 3396
James Biddle/Roland Cornish
Panmure Gordon (Joint Broker) +44 20 7886 2500
John Prior
Hugh Rich
Shard Capital (Joint Broker) +44 207 186 9927
Damon Heath
Isabella Pierre
Red Cloud (North American Broker) +1 416 803 3562
Joe Fars
Tavistock (PR) + 44 20 7920 3150
Nick Elwes braddahead@tavistock.co.uk
Adam Baynes
About Bradda Head Lithium Ltd.
Bradda Head Lithium Ltd. is a North America-focused lithium development
group. The Company currently has interests in a variety of projects, the most
advanced of which are in Central and Western Arizona: The Basin
Project (Basin East Project, and the Basin West Project) and the Wikieup
Project.
The Basin East Project has an Indicated Mineral Resource of 17 Mt at an
average grade of 940 ppm Li and 3.4% K for a total of 85 kt LCE and an
Inferred Mineral Resource of 210 Mt at an average grade of 900 ppm Li and
2.8% K (potassium) for a total of 1.0 Mt LCE. In the rest of the Basin
Project SRK has determined an Exploration Target of 250 to 830 Mt of material
grading between 750 to 900 ppm Li, which is equivalent to a range of between
1 to 4 Mt contained LCE. The Group intends to continue to develop its three
phase one projects in Arizona, whilst endeavouring to unlock value at its
other prospective pegmatite and brine assets in Arizona, Nevada,
and Pennsylvania. All Bradda Head's licences are held on a 100% equity basis
and are in close proximity to the required infrastructure. Bradda Head is
quoted on the AIM of the London Stock Exchange with the ticker of BHL, and
on the TSX Venture Exchange with a ticker of BHLI.
Forward-Looking Statements
Neither TSX Venture Exchange nor its Regulation Services Provider (as that
term is defined in policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release. This News Release
includes certain "forward-looking statements" which are not comprised of
historical facts. Forward-looking statements include estimates and statements
that describe the Company's future plans, objectives or goals, including words
to the effect that the Company or management expects a stated condition or
result to occur. Forward-looking statements may be identified by such terms as
"believes", "anticipates", "intends to", "expects", "estimates", "may",
"could", "would", "will", or "plan". Since forward-looking statements are
based on assumptions and address future events and conditions, by their very
nature they involve inherent risks and uncertainties. Although these
statements are based on information currently available to the Company, the
Company provides no assurance that actual results will meet management's
expectations. Risks, uncertainties, and other factors involved with
forward-looking information could cause actual events, results, performance,
prospects, and opportunities to differ materially from those expressed or
implied by such forward-looking information. Forward looking information in
this news release includes, but is not limited to, following: The Company's
objectives, goals, or future plans. Factors that could cause actual results to
differ materially from such forward-looking information include, but are not
limited to: failure to identify mineral resources; failure to convert
estimated mineral resources to reserves; delays in obtaining or failures to
obtain required regulatory, governmental, environmental or other project
approvals; political risks; future operating and capital costs, timelines,
permit timelines, the market and future price of and demand for lithium, and
the ongoing ability to work cooperatively with stakeholders, including the
local levels of government; uncertainties relating to the availability and
costs of financing needed in the future; changes in equity markets, inflation,
changes in exchange rates, fluctuations in commodity prices; delays in the
development of projects, capital and operating costs varying significantly
from estimates; an inability to predict and counteract the effects of COVID-19
on the business of the Company, including but not limited to the effects of
COVID-19 on the price of commodities, capital market conditions, restriction
on labour and international travel and supply chains; and the other risks
involved in the mineral exploration and development industry, and those risks
set out in the Company's public documents filed on SEDARplus. Although the
Company believes that the assumptions and factors used in preparing the
forward-looking information in this news release are reasonable, undue
reliance should not be placed on such information, which only applies as of
the date of this news release, and no assurance can be given that such events
will occur in the disclosed time frames or at all. The Company disclaims any
intention or obligation to update or revise any forward-looking information,
whether as a result of new information, future events or otherwise, other than
as required by law.
Beaumont Cornish Limited ("Beaumont Cornish") is the Company's Nominated
Adviser and is authorised and regulated by the FCA. Beaumont Cornish's
responsibilities as the Company's Nominated Adviser, including a
responsibility to advise and guide the Company on its responsibilities under
the AIM Rules for Companies and AIM Rules for Nominated Advisers, are owed
solely to the London Stock Exchange. Beaumont Cornish is not acting for and
will not be responsible to any other persons for providing protections
afforded to customers of Beaumont Cornish nor for advising them in relation to
the proposed arrangements described in this announcement or any matter
referred to in it.
Bradda Head Lithium Limited
Management discussion and analysis for the nine and three-month period ended
November 30, 2023
This management's discussion and analysis ("MD&A") reports on the
operating results and financial condition of the Company for the nine and
three-month period ended November 30, 2023, and is prepared as of January 22,
2024. The MD&A should be read in conjunction with Bradda Head Lithium
Limited's (the "Company" or "Bradda Head") audited consolidated financial
statements for the year ended February 28, 2023, and the notes thereto which
were prepared in accordance with International Financial Reporting Standards
("IFRS").
All dollar amounts referred to in this MD&A are expressed in United States
dollars except where indicated otherwise.
(a) Overview
Bradda Head Lithium Limited (the "Company") is a company domiciled in the
British Virgin Islands. The address of the Company's registered office is
Craigmuir Chambers, Road Town, Tortola, British Virgin Islands. The Company
and its subsidiaries together are referred to as the "Group". The Company has
one business segment, being mineral exploration. The Company is focused on
appraising and developing lithium mining projects within North America and
currently has interests in a variety of projects in the United States.
Corporate and Exploration Highlights
Exploration Highlights
Set forth in this section is a description of the Company's material mineral
projects. All scientific and technical data contained in this MD&A has
been reviewed and approved by Joey Wilkins, B.Sc., P.Geo., who is Chief
Operating Officer at Bradda Head and a Qualified Person as defined by National
Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI
43-101").
Arizona Sedimentary Hosted Lithium Projects
Basin Project
Following completion of the drill programme, as announced on August 23, 2023,
the drill results were fed into an updated Mineral Resource Estimate, released
on 28 September 2023.
Based on 2,355.20m of sonic drilling completed as part of the 2023 Basin
drill programme, Bradda Head added 729 kt of Lithium Carbonate Equivalent
("LCE") to the Inferred Mineral Resource, for an updated total Inferred LCE
content of 1.0 Mt. The total new Mineral Resource now comprises 17.0 million
tonnes in the Indicated category at 940 ppm carrying 85kt LCE, and 210 million
tonnes in the Inferred category at 900 ppm, carrying 1,000 kt LCE.
Mineral Resource Statement for Basin East, Basin East Extension and Basin
North effective 1 September 2023
Classification Domain Tonnes Mean Grade Contained Metal
Mt Li (ppm) K (%) LCE (kt) K (kt)
Indicated Upper Clay 11 720 3.5 42 380
Upper Clay HG 6 1350 3.2 43 190
Lower Clay - - - - -
SubTotal 17 940 3.4 85 570
Inferred Upper Clay 143 790 2.7 600 3,800
Upper Clay HG 48 1290 3.1 330 1,500
Lower Clay 19 690 2.8 70 530
SubTotal 210 900 2.8 1,000 5,800
· Mineral Resource statement has an effective date of 1 September
2023.
· The Mineral Resource is reported using a cut-off grade of 550 ppm
Li and is constrained to an optimised open pit shell, which was generated
using the following assumptions: lithium carbonate metal prices of 22,000
USD/tLCE; State of Arizona royalty (selling cost) of 6%; operating costs of 40
USD/ tore; Li recovery of 72%; mining dilution and recovery of 0% and 100%;
and pit slope angle of 45°.
· Tonnages are reported in metric units.
· Rounding as required by reporting guidelines may result in
apparent summation differences between tonnes, grade and contained metal
content which are not considered material.
· Conversion factor of Li metal to LCE = 5.323
· The figures above are reported on a gross basis given Bradda's
100% interest in the property
The average in situ grade of the Inferred Basin East Mineral Resource has
increased from 694 to 900 ppm Li, a 30% increase.
SRK were selected to complete the Mineral Resource Update analysis and applied
a stringent approach to both the in-situ density measurement and the cut-off
grade utilised. A lower in situ density and higher cut-off grade than
previously reported resulted in a more robust estimate. A significant and
pragmatic building block to develop the on-going test-work plan.
The recent drill results on BEE and BN solidify Bradda Head's belief in a
widespread and continuous lithium-rich stratigraphic sequence, with potential
further into BN and across to BW that the Company believes will lead to
significant resource growth and opportunity to become a Tier 1 lithium
deposit. More drilling is being planned at BN where a low impact Notice of
Intent level exploration permit is in place and BW upon receipt of the
Environmental Assessment ("EA") from the Bureau of Land Management, expected
during in H2 2024. The area being permitted is over 11km(2), which is
considerably larger than BE, BEE, and BN combined (c.6km(2)).
Wikieup Project
No significant work has been undertaken on this project during the 3-month
period.
Arizona Pegmatite District
San Domingo Project
On November 13, 2023, the first set of assay results was released from core
drilling at San Domingo. Assays were received from only 14 holes totalling
993m, with grades of up to 0.83% Li(2)O over 6.35m and 1.03% Li(2)O over 3.05m
identified.
Table 1: San Domingo North Drill Hole Highlights
Hole From To Int (m) Li(2)O % Ta(2)O(5) Sn (ppm) Target
SD-DH23-048 19.42 36.24 16.82 73 Midnight Owl
26.3 26.3 9.12 105
SD-DH23-049 87.33 93.67 6.35 0.83 Midnight Owl
89.18 94.34 5.16 80
97.9 102.17 4.27 82
98.6 101.65 3.05 1.03 71
SD-DH23-050 98.02 101.89 3.87 70 Midnight Owl
SD-DH23-057 18.07 42.73 24.65 0.24 47 Bolt
34.35 39.62 5.27 0.51 58
SD-DH23-059 2.80 40.23 39.37 37
27.13 28.35 1.22 0.17
47.43 52.97 5.54 92 Bolt
68.03 79.86 11.8 0.32 42
68.03 73.91 5.87 0.48 43
SD-DH23-061 134.57 136.25 1.52 0.52 Bolt
134.57 138.56 4.00 72
SD-DH23-065 1.52 9.45 7.93 0.10 45
3.35 4.88 1.52 0.31 Bolt
SD-DH23-066 28.9 32.13 3.23 127 Bolt
These results increased our knowledge of the intriguing spodumene-rich
pegmatite district. This initial batch of drill hole geochemistry provides an
improved understanding of the pegmatite characteristics and mineralogical
zoning at San Domingo, particularly at the Midnight Owl and Bolt targets.
As announced on January 16, 2024, the drill programme completed on December 2,
2023, with final assays results being received, supporting our view of a near
surface potential spodumene lithium resource in the Central section of our San
Domingo property.
Nevada Lithium Brine Projects
Wilson Project
No significant work has been undertaken on this project during the 3-month
period.
Eureka Project
No significant work has been undertaken on this project during the 3-month
period.
Corporate Highlights
On 8 September 2023, the Company's principal Canadian regulator, the British
Columbia Securities Commission, withdrew the Management Cease Trade Order it
had previously granted to the Company on 29 June 2023, under National Policy
12-203 - Management Cease Trade Orders, as the Company successfully completed
all requisite filings for its audited financial statements for the year ended
28 February 2023 and interim financial statements for the quarter ended 31 May
2023.
On 28 September 2023, the Company announced an updated Mineral Resource
Estimate ("MRE") at the Company's Basin Project, Arizona. As per the Gross
Overriding Royalty Agreement with the Lithium Royalty Company ("LRC"), this
new contained LCE Tonnage, which was well over the contracted threshold of 1
million tonnes LCE, enabled the Company to trigger the payment of US$2.5
million from LRC, which was received by the Company on 5 October 2023.
Post period-end on 1 January 2024, the Company delisted from the US OTCQB
Market, due to share trading liquidity expectations not having been met and
cost saving in this current market environment. The Company's shares continue
to trade on the London AIM Market and on the Canadian TSX Venture Exchange.
(b) Selected Financial Information
The following table sets forth selected financial information with respect to
the Company for the nine and three-month period ended November 30, 2023 and
the year ended February 28, 2023. The selected financial information has been
derived from the audited financial statements for the period indicated. The
following should be read in conjunction with the said financial statements and
related notes that are available on the Company's website -
www.braddaheadltd.com.
The annual financial statements and interim financial statements are presented
in US dollars and are prepared in accordance with IFRS, See "Summary Financial
Data" and "Currency Information".
Nine-month period ended November 30, 2023 Three-month period ended November 30, 2023 Year ended February 28, 2023
(Unaudited) (Unaudited) (Audited)
(US$) (US$) (US$)
Statement of Operations:
Total Operating Expenses (3,304,233) (983,509) (3,899,858)
Other income 2,370,127 2,370,127 -
Net Finance income 114,529 23,657 12,270
Net (Loss)/Profit (819,577) 1,410,275 (3,887,588)
(Loss)/profit per Share (cents) (0.21) 0.36 (1.018)
Balance Sheet Data:
Cash & cash equivalents, including cash deposits 2,906,004 2,906,004 7,746,519
Total Assets 16,629,616 16,629,616 18,198,559
Total Liabilities (283,631) (283,631) (1,213,619)
Accumulated Deficit (14,270,388) (14,270,388) (13,631,433)
Total Shareholder's Equity 16,345,985 16,345,985 16,984,940
MANAGEMENT DISCUSSION AND ANALYSIS: QUARTER ENDED NOVEMBER 30, 2023
(c) Introduction
(d) This interim Management Discussion and Analysis (the "interim MD&A") should be read in conjunction with the audited financial statements of the Company for the year ended February 28, 2023, and related notes. This MD&A is made as of January 22, 2024.
(e) Results of Operations for the nine and three-months ended November 30, 2023
The Company's net loss after tax for the nine-month period to November 30,
2023 was US$ 819,577, compared to a loss of US$ 3,074,862 for the comparative
period ended November 30, 2022. The major expenses for the nine-month period
ended November 30, 2023 were operational expenses incurred on the Company's
exploration projects, and are broken down in the respective projects as
follows:
Project Expensed Exploration Expenditure
Nine-Month Period Ended November 30, 2023 Three-Month Period Ended November 30, 2023
(Unaudited) (Unaudited)
US$ US$
Basin Project 598,598 24,723
San Domingo Project 792,740 183,315
Wikieup Project 17,144 4,720
Other projects 9,459 4,720
TOTAL 1,417,941 217,478
During this nine-month time period, the Company incurred and capitalised
exploration expenditures of US$ 3,673,417, compared to US$ 2,434,450 for the
comparative nine-month period to November 30, 2022.
The capitalied exploration costs for the nine-month period ended November 30,
2023 have been allocated amongst the Company's exploration projects in
approximately the following amounts:
Project Capitalised exploration costs Capitalised expenditures for licences and permits Capitalised exploration costs Capitalised expenditires for licences and permits
Nine-month period ended November 30, 2023 (Unaudited) Nine-month period ended November 30, 2023 (Unaudited) Three-Month Period Ended November 30, 2023 Three-Month Period Ended November 30, 2023
US$ US$ (Unaudited) (Unaudited)
US$ US$
Basin Project 933,358 229,750 22,975 (17,433)
San Domingo Project 2,079,708 178,760 1,289,063 59,783
Wikieup Project - 101,640 - -
Other Project - 150,200 - 12,161
TOTAL 3,013,066 660,350 1,312,038 54,511
The exploration expenditures have been primarily costs associated with
drilling, assaying, resource and mining consultants, metallurgical testing,
environmental studies, project team fees, acquisition of new leases, and
annual renewal of existing leases.
General and administrative expenses for the nine-month period to November 30,
2023 totalled US$ 3,479,824, compared to US$ 4,242,520 for the comparative
nine-month period to November 30, 2022. General and administrative expenses
are broken down as follows:
Project General and administrative expenditures
Nine-month period ended November 30, 2023 (Unaudited) Three-Month Period Ended November 30, 2023
US$ (Unaudited)
US$
Auditors' fees 36,040 19,600
Directors and management fees and salaries 437,083 145,926
Legal and accounting 261,987 60,403
Contractor costs 1,460,641 246,663
Professional and marketing costs 565,428 160,876
Other administrative costs 718,645 252,428
TOTAL 3,479,824 885,896
During the nine-month period to November 30, 2023, there have been no changes
in financial performance or other elements that relate to non-core business
activities and operations.
(f) Cash flows
During the nine-month period ended November 30, 2023, the Company had net cash
outflows of US$ 6,346,605, compared to inflows of US$ 4,531,077 during the
comparative nine-month period to November 30, 2022. Net cash outflows for the
current three-month period ended November 30, 2023, include placing cash
amounts on short term deposits and receipt of cash from matured deposits,
totalled US$ 104,227. The cashflows for the two periods are shown below:
Nine-month period ended November 30, 2023 (Unaudited) Three-Month Period Ended November 30, 2023
US$ (Unaudited)
US$
Statement of cashflows
Cash flows from operating activities (1,531,261) 1,256,488
Cash flows from investing activities (3,423,783) (1,304,870)
Cash flows from financing activities * (1,391,561) (55,845)
Net cash flows during the period (6,346,605) (104,227)
Cash balances at beginning of the period 7,746,519 1,504,141
Cash balances at the end of the period 1,399,914 1,399,914
* includes net US$ 1,506,090 placed on short term deposit during the
nine-month period ended November 30, 2023, and net US$ 79,502 placed on short
term deposit during the three-month period ended November 30, 2023.
(g) Liquidity and Capital Resources
As at November 30, 2023, the Company had cash and cash equivalents (including
short term cash deposits) of US$ 2,906,004, and a working capital surplus of
US$ 2,740,574. As of February 28, 2023, the Company had cash and cash
equivalents of US$ 7,746,519, and a working capital surplus of US$ 7,135,119.
(h) Outstanding Share Data
As of November 30, 2023, the following securities were outstanding:
Shares 390,609,439
Warrants 81,698,305
Stock options 35,021,052
Fully diluted shares outstanding 507,328,796
The Company's objectives when managing capital are to safeguard its ability to
continue as a going concern, so that it can continue to provide returns for
shareholders, benefits for other stakeholders and to maintain an optimal
capital structure to reduce the cost of capital.
The capital structure of the Company includes cash and cash equivalents,
equity attributable to equity holders comprised of contributed equity,
reserves and accumulated losses. In order to maintain or adjust the capital
structure, the Company may issue new shares, sell assets or adjust the level
of activities undertaken by the Company.
The Company monitors capital based on cash flow requirements for operational,
exploration and evaluation expenditures. The Company has no debt or other
borrowings as at the date of this Application. The Company will continue to
use capital market issuances to satisfy anticipated funding requirements.
The availability of equity capital, and the price at which additional equity
could be issued, is dependent upon the success of the Company's exploration
activities, and upon the state of the capital markets generally. Additional
financing may not be available on terms favourable to the Company or at all.
If the Company does not receive future financing, it may not be possible for
the Company to advance the exploration and development of its mineral
exploration properties. If the Company is not able to fund these minimum
expenditures, it may not be able to maintain part or all of its mineral
exploration property interests. See "Risk Factors".
(i) Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements.
(j) Transactions with Related Parties
The Company has conducted transactions with officers, directors and persons or
companies related to directors or officers and paid or accrued amounts as
follows:
Edgewater Associates Limited ("Edgewater")
During the nine-month period ended 30 November 2023, Directors and Officers
insurance was obtained through Edgewater, which is a 100% subsidiary of Manx
Financial Group ("MFG"). James Mellon and Denham Eke are Directors of MFG and
Denham Eke is a Director of Edgewater.
During the period, the premium payable on the policy was US$ 88,824 (year
ended 28 February 2023: US$ 49,318), of which US$ 22,325 was prepaid as at the
period end (28 February 2023: US$ 14,497).
(k) Critical Accounting Estimates
The preparation of financial statements in conformity with IFRS requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and reported amounts of revenues and
expenses during the reporting period. Such estimates and assumptions affect
the carrying value of assets, and impact decisions as to when exploration and
development costs should be capitalized or expensed.
As at November 30, 2023, the Company had incurred total capitalised
exploration expenditures, including capitalised licence and permit costs, of
US$ 13,247,683. Changes in management's judgment as to the prospective nature,
assessment of the existence or otherwise of economically recoverable reserves,
technical feasibility and/or commercial viability of the relevant tenements
and the Company's intentions with respect to the relevant tenements, could
affect the assessment of the recoverable amount.
The Company regularly reviews its estimates and assumptions: however, actual
results could differ from these estimates and these differences could be
material.
Bradda Head Lithium Limited
Unaudited Condensed Consolidated Interim Financial Statements
For the nine and three-month period ended November 30, 2023
Condensed Interim Consolidated Statement of Comprehensive Income
for the period ended 30 November 2023
Nine-month period ended 30 November 2023 Nine-month period ended 30 November 2022 Three-month period ended 30 November 2023 Three-month period ended 30 November 2022
(unaudited) (unaudited) (unaudited) (unaudited)
Notes US$ US$ US$ US$
Operating expenses
General and administrative 2 (3,479,824) (4,242,520) (885,896) (1,690,543)
Share based payment and warrant expense 11 (180,622) (1,285,743) - (91,539)
Foreign exchange gain/(loss) 161,649 (1,255,343) (34,142) (944,005)
─────── ─────── ─────── ───────
Operating loss (3,498,797) (6,783,606) (920,038) (2,726,087)
Other income
Other income 3 2,370,127 - 2,370,127 -
Warrant fair value re-measurement 12 210,061 3,711,264 - 880,920
Unrealised gain/(loss) on investment (15,497) (2,520) (63,471) -
Finance income 114,529 - 23,657 -
─────── ─────── ─────── ───────
(Loss)/profit before income tax (819,577) (3,074,862) 1,410,275 (1,845,167)
Income tax expense - - - -
─────── ─────── ─────── ───────
(Loss)/profit for the period (819,577) (3,074,862) 1,410,275 (1,845,167)
═══════ ═══════ ═══════ ═══════
Other comprehensive income - foreign currency translation reserve
- - - -
─────── ─────── ─────── ───────
Total comprehensive (loss)/profit for the period (819,577) (3,074,862) 1,410,275 (1,845,167)
═══════ ═══════ ═══════ ═══════
Basic and diluted (loss)/profit per share (US cents) 13 (0.21) (0.81) 0.36 (0.49)
The notes on pages 12 to 19 form an integral part of these condensed
consolidated interim financial statements.
Condensed Interim Consolidated Statement of Financial Position
as at 30 November 2023
Notes 30 November 2023 28 February 2023
(unaudited) (audited)
US$ US$
Non-Current assets
Deferred mining and exploration costs 4 10,474,918 7,461,851
Exploration permits and licences 5 2,772,765 2,112,415
Plant and equipment 9 91,282 79,602
Advances and deposits 8 190,183 104,192
Investment 76,264 91,761
─────── ───────
Total non-current assets 13,605,412 9,849,821
─────── ───────
Current assets
Cash and cash equivalents 1,399,914 7,746,519
Cash deposits 1,506,090 -
Advances and deposits 8 - 385,624
Trade and other receivables 8 118,200 216,595
─────── ───────
Total current assets 3,024,205 8,348,738
─────── ───────
Total assets 16,629,616 18,198,559
═══════ ═══════
Equity
Share premium 10 30,616,373 30,616,373
Retained deficit (14,270,388) (13,631,433)
─────── ───────
Total equity 16,345,985 16,984,940
─────── ───────
Current liabilities
Trade and other payables 7 263,491 983,418
Warrant liability 12 20,140 230,201
─────── ───────
Total current liabilities 283,631 1,213,619
─────── ───────
Total equity and liabilities 16,629,616 18,198,559
═══════ ═══════
The notes on pages 12 to 19 form an integral part of these condensed
consolidated interim financial statements.
These financial statements were approved by the Board of Directors on 22
January 2024 and were signed on their behalf by:
Denham
Eke
Director
Condensed Interim Consolidated Statement of Changes in Equity
for the period ended 30 November 2023
Share premium Retained deficit Total
US$ US$ US$
Balance at 1 March 2023 (audited) 30,616,373 (13,631,433) 16,984,940
Total comprehensive loss for the period
Loss for the period - (819,577) (819,577)
─────── ─────── ───────
Total comprehensive loss for the period - (819,577) (819,577)
Transactions with owners of the Company
Equity settled share-based payments (note 11) - 180,622 180,622
─────── ─────── ───────
Total transactions with owners of the Company - 180,622 180,622
─────── ─────── ───────
Balance at 30 November 2023 (unaudited) 30,616,373 (14,270,388) 16,345,985
═══════ ═══════ ═══════
The notes on pages 12 to 19 form an integral part of these condensed
consolidated interim financial statements.
Condensed Interim Consolidated Statement of Changes in Equity
for the period ended 30 November 2023 (continued)
Share premium Retained deficit Total
US$ US$ US$
Balance at March 1, 2022 (audited) 23,434,385 (11,177,220) 12,257,165
Total comprehensive loss for the period
Loss for the period - (3,074,862) (3,074,862)
────── ─────── ───────
Total comprehensive loss for the period - (3,074,862) (3,074,862)
Transactions with owners of the Company
Issue of ordinary shares (note 10 and note 12) 7,581,351 - 7,581,351
Share issue costs capitalised (note 10) (547,916) - (547,916)
Equity settled share-based payments (note 11) - 1,285,743 1,285,743
────── ─────── ──────
Total transactions with owners of the Company 7,033,435 1,285,743 8,319,178
────── ─────── ──────
Balance at November 30, 2022 (unaudited) 30,467,820 (12,966,339) 17,501,481
═══════ ═══════ ═══════
The notes on pages 12 to 19 form an integral part of these condensed
consolidated interim financial statements.
Condensed Interim Consolidated Statement of Cash Flows
for the period ended 30 November 2023
Nine-month period ended 30 November 2023 Nine-month period ended 30 November 2022 Three-month period ended 30 November 2023 Three-month period ended 30 November 2022
Notes (unaudited) (unaudited) (unaudited) (unaudited)
US$ US$ US$ US$
Cash flows from operating activities
(Loss)/profit before income tax (819,577) (3,074,862) 1,410,275 (1,845,167)
Adjusted for non-cash and non-operating items:
Depreciation 9 38,320 23,708 13,699 9,532
Unrealised fair value gain on investment 15,497 2,520 63,471 -
Equity settled share based payments expense 11, 12 180,622 1,285,743 - 91,539
Warrant fair value re-measurement 12 (210,061) (3,711,264) - (880,920)
Unrealised FX on cash balances - 1,255,343 - 944,005
Cash interest income (114,529) - (23,657) -
─────── ─────── ─────── ───────
(909,728) (4,218,812) 1,463,788 (1,681,011)
Change in trade and other receivables 98,393 (487,103) 40,868 (26,609)
Change in trade and other payables (719,926) (26,070) (248,168) 717,835
─────── ─────── ─────── ───────
Net cash flows from operating activities (1,531,261) (4,731,985) 1,256,488 (989,785)
Cash flows from investing activities
Amounts paid for deferred mining and exploration costs 4 (3,013,066) (1,728,158) (1,312,038) (1,452,815)
Amounts paid for licences and permits 5 (660,350) (706,292) (54,511) (16,495)
Cash received for bonding deposits 299,633 - 61,679 -
Equipment purchased 9 (50,000) (58,672) - -
─────── ─────── ─────── ───────
Net cash flows from investing activities (3,423,783) (2,493,122) (1,304,870) (1,469,310)
Cash flows from financing activities
Cash received from shares and warrants issued 10 - 12,304,100 - -
Share issue costs paid 10 - (547,916) - -
Cash interest income 114,529 - 23,657 -
Short term deposits (placed)/returned (1,506,090) - (79,502) -
─────── ─────── ─────── ───────
Net cash flows from financing activities (1,391,561) 11,756,184 (55,845) -
(Decrease) / increase in cash and cash equivalents (6,346,605) 4,531,077 (104,227) (2,459,095)
Cash and cash equivalents at beginning of period 7,746,519 7,327,303 1,504,141 14,006,137
Effect of foreign exchange on cash balances - (1,255,343) (944,005)
─────── ─────── ─────── ───────
Cash and cash equivalents at end of period 1,399,914 10,603,037 1,399,914 10,603,037
═══════ ═══════ ═══════ ═══════
The notes on pages 12 to 19 form an integral part of these condensed
consolidated interim financial statements.
1 Reporting Entity
The Company is a lithium exploration Group focused on developing its projects
in the USA.
These interim financial statements have been prepared in accordance with IAS
34 Interim Financial Reporting and should be read in conjunction with the last
annual consolidated financial statements as at and for the year ended 28
February 2023 ("last annual financial statements"). They do not include all of
the information required for a complete set of IFRS financial statements.
However, selected explanatory notes are included to explain events and
transactions that are significant to an understanding of the changes in the
Group's financial position and performance since the last annual financial
statements.
The financial information in this report has been prepared in accordance with
the Company's accounting policies and in consistency with the last annual
financial statements. Full details of the accounting policies adopted by the
Company are contained in the financial statements included in the Company's
annual report for the year ended 28 February 2023, which is available on the
Group's website: www.braddheadltd.com (http://www.braddheadltd.com) . These
unaudited condensed consolidated interim financial statements should be read
in conjunction with the audited Consolidated Financial Statements for the year
ended 28 February 2023.
2 General and administrative
The Group's general and administrative expenses include the following:
Nine-month period ended 30 November 2023 Nine-month period ended 30 November 2022 Three-month period ended 30 November 2023 Three-month period ended 30 November 2022
(unaudited) (unaudited) (unaudited) (unaudited)
US$ US$ US$ US$
Auditors' fees 36,040 114,508 19,600 13,067
Directors and management fees and salaries 437,083 402,231 145,926 132,955
Legal and accounting 261,987 422,228 60,403 247,291
Contractor costs 1,460,641 1,979,619 246,663 719,097
Professional and marketing costs 565,428 942,495 160,876 332,928
Other administrative costs 718,645 381,439 252,428 245,205
─────── ─────── ─────── ───────
Total 3,479,824 4,242,520 885,896 1,690,543
═══════ ═══════ ═══════ ═══════
3 Other income
On 21 December 2021, the Company completed a royalty agreement with the
Lithium Royalty Corporation ("LRC"). Key terms of the royalty agreement are:
- LRC will pay to the Company upon closing the sum of US$ 2.5 million
for granting of the Royalty. LRC will pay to the Company an additional US$ 2.5
million upon the Company publicly reporting a 1 million tonne lithium
carbonate equivalent (LCE) Mineral Resource with a minimum lithium grade of
800 parts per million (ppm). LRC will pay to the Company an additional US$ 3
million upon the Company publicly reporting a 2.5 million tonne LCE Mineral
Resource with a minimum lithium grade of 800ppm.
On 28 September 2023, the Company announced an updated MRE at its Basin East
project, hitting the next 1 million tonne LCE. This triggered the next
milestone payment of US$ 2.5 million from LRC, with the cash funds being
received on 24 October 2023.
3 Other income (continued)
Reconciliation of gain on sale
Period ended 30 November 2023 (unaudited)
US$
Initial proceeds received from royalty milestone payment 2,500,000
Less: Deferred mine exploration costs disposal (note 7) (105,273)
Less: Exploration permits and licences disposal (note 8) (24,600)
──────
Net amount recognised in profit and loss 2,370,127
══════
4 Deferred mine exploration costs
The schedule below details the exploration costs capitalised to date:
Total
US$
Cost and net book value
At 28 February 2022 (audited) 4,183,744
───────
Capitalised during the year 3,278,107
───────
At 28 February 2023 (audited) 7,461,851
═══════
Capitalised during the period 3,118,340
Disposal under royalty agreement * (105,273)
───────
At 30 November 2023 (unaudited) 10,474,918
═══════
Cost and net book value
At 30 November 2023 (unaudited) 10,474,918
At 28 February 2023 (audited) 7,461,851
═══════
The recoverability of the carrying amounts of exploration and evaluation
assets is dependent on the successful development and commercial exploitation
or sale of the respective area of interest, as well as maintaining the assets
in good standing. The Group assessed the DMEC relating to areas for which
licenses and permits are held, for impairment as at 30 November 2023. The
Board concluded that no facts and circumstances have been identified which
suggest the recoverable amount of these assets would not exceed the carrying
amount and, as such, no impairment was recognised during the period.
During the year ended 28 February 2023, an impairment charge of US$ Nil was
recognised.
5 Exploration permits and licences
The schedule below details the exploration permit and licence costs
capitalised to date:
Total
US$
Cost and net book value
At 28 February 2022 (audited) 1,549,076
Capitalised during the year 582,809
───────
At 28 February 2023 (audited) 2,112,415
═══════
Capitalised during the period 684,950
Disposal under royalty agreement * (24,600)
───────
At 30 November 2023 (unaudited) 2,772,765
═══════
5 Exploration permits and licences (continued)
Cost and net book value
At 30 November 2023 (unaudited) 2,772,765
At 28 February 2023 (audited) 2,112,415
═══════
The Group assessed the carrying amount of the licences and permits held for
impairment as at 30 November 2023. The Board concluded that no facts and
circumstances have been identified which suggest the recoverable amount of
these assets would not exceed the carrying amount and, as such, no impairment
was recognised during the period.
During the year ended 28 February 2023, an impairment charge of US$ 19,470 was
recognised as a result of project licences and permits that were not renewed.
6 Investment in subsidiary undertakings
As at 30 November 2023, the Group had the following subsidiaries:
Name of company Place of incorporation Ownership interest Principal activity
Bradda Head Limited* BVI 100% Holding company of entities below
Zenolith (USA) LLC USA 100% Holds USA lithium licences and permits
Verde Grande LLC USA 100% Holds USA lithium licences and permits
Gray Wash LLC USA 100% Holds USA lithium licences and permits
San Domingo LLC ** USA 100% Holds USA lithium licences and permits
* Held directly by the Company. All other holdings are indirectly held
through Bradda Head Limited
** Formed on 8 May 2023
As at 28 February 2023, the Group had the following subsidiaries:
Name of company Place of incorporation Ownership interest Principal activity
Bradda Head Limited* BVI 100% Holding company of entities below
Zenolith (USA) LLC USA 100% Holds USA lithium licences and permits
Verde Grande LLC USA 100% Holds USA lithium licences and permits
Gray Wash LLC USA 100% Holds USA lithium licences and permits
* Held directly by the Company. All other holdings are indirectly held
through Bradda Head Limited
The condensed interim consolidated financial statements include the results of
the subsidiaries for the full interim period from 1 March 2023 to 30 November
2023, and up to the date that control ceases.
7 Trade and other payables
30 November 2023 28 February 2023
(unaudited) (audited)
US$ US$
Trade payables 233,092 904,944
Accrued expenses and other payables 50,539 78,474
─────── ───────
283,631 983,418
═══════ ═══════
8 Trade and other receivables and advances and deposits
Non-current
30 November 2023 28 February 2023
(unaudited) (audited)
US$ US$
Advances and deposits 190,183 104,192
═══════ ═══════
Current
US$ US$
Trade and other receivables 118,200 216,595
Advances and deposits - 385,624
═══════ ═══════
9 Plant and equipment
Motor vehicle Total
Cost US$ US$
As at 28 February 2022 (audited) 55,718 55,718
Additions during the period 58,672 58,672
────── ──────
As at 28 February 2023 (audited) 114,390 114,390
Additions during the period 50,000 50,000
────── ──────
As at 30 November 2023 (unaudited) 164,390 164,390
══════ ══════
Motor vehicle Total
Accumulated depreciation US$ US$
As at 28 February 2022 (audited) (1,548) (1,548)
Depreciation charge for the period (33,240) (33,240)
────── ──────
As at 28 February 2023 (audited) (34,788) (34,788)
Depreciation during the period (38,320) (38,320)
────── ──────
As at 30 November 2023 (unaudited) (73,108) (73,108)
══════ ══════
Carrying amount
As at 30 November 2023 (unaudited) 91,282 91,282
As at 28 February 2023 (audited) 79,602 79,602
══════ ══════
10 Share premium
Authorised
The Company is authorised to issue an unlimited number of nil par
value shares of a single class.
Shares Share capital Share premium
Issued ordinary shares of US$0.00 each US$ US$
At 28 February 2022 (audited) 317,413,879 - 23,434,385
═══════ ═══════ ═══════
Shares issued for cash (note 12) 73,195,560 - 7,729,904
Share issue costs capitalised - - (547,916)
─────── ─────── ───────
At 28 February 2023 (audited) 390,609,439 - 30,467,820
═══════ ═══════ ═══════
30 November 2023 (unaudited) 390,609,439 - 30,467,820
═══════ ═══════ ═══════
11 Equity settled share based payments
The cost of equity settled transactions with certain Directors of the Company
and other participants ("Participants") is measured by reference to the fair
value at the date on which they are granted. The fair value is determined
based on the Black-Scholes option pricing model.
Options and warrants
The total number of share options and warrants in issue as at the period end
is set out below.
Recipient Grant Term Exercise Number at 1 March 2023 (audited) Number Issued Number Lapsed/ cancelled/expired Number Exercised Number at 30 November 2023 (unaudited) Fair value
Date in years Price
Options US$
Directors and Participants April 2018 5 US$ 0.15668 1,606,304 - (1,460,252) - 146,052 24,028
Directors and Participants June 2021 5 US$ 0.048 18,000,000 - - - 18,000,000 1,110,556
Directors and Participants September 2021 5 £0.09 3,500,000 - (500,000) - 3,000,000 314,962
Directors and Participants April 2022 5 £0.18 8,925,000 - (550,000) - 8,375,000 1,022,183
Directors and Participants December 2022 5 £0.105 1,000,000 - - - 1,000,000 273,727
Directors and Participants April 2023 5 £0.18 - 4,800,000 (300,000) - 4,500,000 174,978
Warrants
Supplier warrants July 2021 5 £0.0550 1,818,182 - - - 1,818,182 124,482
Supplier warrants July 2021 3 £0.0825 2,254,545 - - - 2,254,545 8,275
Shareholder warrants December 2021 2 £0.0885 1,185,687 - - - 1,185,687 44,858
Supplier warrants April 2022 2 £0.1350 3,244,331 - - - 3,244,331 284,918
─────── ─────── ─────── ─────── ─────── ───────
41,534,049 4,800,000 (2,810,252) - 43,523,797 3,382,967
═══════ ═══════ ═══════ ═══════ ═══════ ═══════
11 Equity settled share based payments (continued)
The amount expensed in the income statement has been calculated by reference
to the fair value at grant date of the equity instrument and the estimated
number of equity instruments to vest after the vesting period.
Nine-month period ended 30 November 2023 Nine-month period ended 30 November 2022 Three-month period ended 30 November 2023 Three-month period ended 30 November 2022
(unaudited) (unaudited) (unaudited) (unaudited)
US$ US$ US$ US$
Share based payments charge 180,622 1,285,743 - 91,539
═══════ ═══════ ═══════ ═══════
The inputs used in the measurement of the fair values at grant date of the
equity-settled share-based payment plans issued during the period are as
follows:
April 2023 options
Award date and exercise price
Fair value at grant date £0.0303
Exercise price £0.06
Weight average expected volatility 78.50%
Weighted average expected life (years) 5
Risk-free interest rate (based on comparable companies) 3.82%
Terms of the issued options are as follows:
- 4,800,000 options have been granted that vest fully on grant date. All
un-exercised options expire after a period of 5 years from admission date. It
is assumed that options are exercised within 5 years from date of grant. The
applied volatility is based on historical volatility.
-
12 Warrants
The cost of equity warrants granted during the period are measured by
reference to the fair value at the date on which they are granted. The fair
value is determined based on the Black-Scholes option pricing model.
During the nine-month period ended 30 November 2023, no new warrants were
issued (period ended 30 November 2022: 73,195,560 warrants).
The total number of warrants in issue as at the period end is set out below.
Recipient Grant Term Exercise Warrants at 1 March 2023 (audited) Number of Warrants Issued Number of Warrants Lapsed/ cancelled/expired Number of Warrants Exercised Number of Warrants at 30 November 2023 (unaudited) Fair value
Date in years Price
Warrants US$
Shareholder warrants April 2022 2 £0.2100 73,195,560 - - - 73,195,560 20,140
─────── ─────── ─────── ─────── ─────── ───────
73,195,560 - - - 73,195,560 20,140
═══════ ═══════ ═══════ ═══════ ═══════ ═══════
Guidance as per IAS 32: Financial Instruments has been applied in classifying
these as a financial liability. This is due to the exercise price and the
Company's functional currency being different. As a result, the fair value
applied to the shareholder warrants has been classified as a financial
liability. At period end, the warrant liability has been re-measured to fair
value, with a corresponding entry to profit and loss of US$ 210,061 (period
ended 30 November 2022: US$ 3,711,264) within Warrant Fair Value
Re-Measurement.
Reconciliation of warrant liability fair value:
Fair value
US$
Balance at 1 March 2023 230,201
Fair value re-measurement (210,061)
──────
Balance at 30 November 2023 20,140
═══════
13 Basic and diluted loss per share
The calculation of basic profit per share of the Company is based on the loss
for the period of US$ 819,577 (nine-month period to 30 November 2022: loss of
US$ 3,074,862) and the weighted average number of shares of 390,609,439 (at 30
November 2022: 379,122,544) in issue during the period.
Diluted loss per share is calculated by adjusting the weighted average number
of ordinary shares outstanding to assume conversion of all dilutive potential
ordinary shares such as warrants and options. An adjustment for the dilutive
effect of share options and warrants in the current period has not been
reflected in the calculation of the diluted loss per share, as the effect
would have been anti-dilutive, due the Company recognising a loss for the
period.
14 Related party transactions and balances
Edgewater Associates Limited ("Edgewater")
During the nine-month period ended 30 November 2023, Directors and Officers
insurance was obtained through Edgewater, which is a 100% subsidiary of Manx
Financial Group ("MFG"). James Mellon and Denham Eke are Directors of MFG and
Denham Eke is a Director of Edgewater.
During the period, the premium payable on the policy was US$ 88,824 (year
ended 28 February 2023: US$ 49,318), of which US$ 22,325 was prepaid as at the
period end (28 February 2023: US$ 14,497).
15 Commitments and contingent liabilities
The Group has certain obligations to expend minimum amounts on exploration
works on mining tenements in order to retain an interest in them, which would
be approximately US$ 350,000 during the next 12 months. This includes annual
fees in respect of licence renewals. These obligations may be varied from time
to time, subject to approval and are expected to be filled in the normal
course of exploration and development activities of the Company.
16 Events after the reporting date
No post balance sheet events have occurred that require disclosure.
ENDS
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