REG - Bradda Head Lithium - Unaudited Interim Results
25/10/2023 07:00
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RNS Number : 2334R Bradda Head Lithium Ltd 25 October 2023
25 October 2023
Bradda Head Lithium Ltd
("Bradda Head", "Bradda", or the "Company")
Unaudited Interim Results for the six and three-months ended 31 August 2023
Bradda Head Lithium Ltd (AIM:BHL, TSX-V:BHLI, OTCQB:BHLIF), the North
America-focused lithium development group, is pleased to announce that it has
today published its unaudited financial results for the six and three-months
ended 31 August 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's third drill programme at the lithium in clay Basin
project continued during the period, with the Company finishing the fourteenth
and final hole on August 10, 2023 for a total drilled meterage of 2,355.
- Notable intervals from the final few sonic core holes continued
to be encouraging and include:
o 81.60m @ 944ppm Li in hole BES23-10, including 19.79m @ 1,325ppm,
o 82.30m @ 906ppm Li in hole BES23-07, including 20.87m @ 1,324ppm,
o 81.98m @ 867ppm Li in hole BES23-06, including 20.73m @ 1,363ppm,
o 88.70m @ 903ppm Li in hole BES23-11, including 12.51m @ 1,427ppm, and
o 75.12m @ 983ppm Li in hole BES23-12, including 27.6m @ 1,339ppm.
- Following the release of an updated Mineral Resource Estimate
("MRE") post period end, which included a contained LCE tonnage of over 1Mt
LCE, 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.
- During August 2023, the Company also mobilised a drill rig at
its San Domingo pegmatite asset, with the Phase 3 drilling programme
commencing later in the month.
- In addition, the Company staked just under 8km(2 ) of new lode
claims at its San Domingo pegmatite project, further strengthening its land
holding in the area.
Ian Stalker, Chairman of Bradda Head, commented:
"The first half of the financial year has naturally been very busy, with
significant drilling programmes being undertaken at our Basin and San Domingo
Properties in Arizona, USA. This phase of drilling is now completed at our
Basin project. Positive assay results received from the Basin work, enabled
the release of an updated MRE during September 2023, which included a
contained LCE tonnage of over 1Mt LCE. This new Resource number reported
resulted in the next stage of a royalty payment of US$ 2.5 million. The
Company is therefore well placed financially to continue its planned work
programme well into 2024. We also commenced our Phase 3 drilling programme at
our San Domingo pegmatite asset during August 2023. This is a follow on from
our Phase 1 and Phase 2 drill programmes, our aim being to extend the known
lithium mineralization in this dstrict. Assay results have been slow to arrive
due to the summer rush at the laboratory, and the Company hopes to have news
on San Domingo within the next few weeks as preliminary results have started
to arrive.
The pace of development will continue through the final half of the year, and
we look forward to updating our shareholders as we receive the 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, on
the TSX Venture Exchange with a ticker of BHLI, and on the US OTCQB market
with a ticker of BHLIF.
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.
Bradda Head Lithium Limited
Management discussion and analysis for the six and three-month period ended
August 31, 2023
This management's discussion and analysis ("MD&A") reports on the
operating results and financial condition of the Company for the six and
three-month period ended August 31, 2023, and is prepared as of October 25,
2023. 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 was incorporated on October 28, 2009, in the
British Virgin Islands under the British Virgin Islands Companies Act with
registered number 1553975 with the name Copper Development Corporation. On
October 5, 2015, the Company changed its name from Copper Development
Corporation to Life Science Developments Limited, and on April 18, 2018, the
Company changed its name to Bradda Head Holdings Limited. On September 15,
2021, the Company changed its name to Bradda Head Lithium Limited.
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
Drilling at Basin East Extension ("BEE") continued during the three-month
period ended August 31, 2023. During July 2023, assay results from a further
five drill holes were received. The programme continued to encounter
better-than-expected thicknesses of clay, confirming that lithium-bearing
clays continue and thicken to the west, northwest and north into the Company's
BEE lease with projected clay extensions into Basin West ("BW") claims.
Drilling has confirmed the clays extend into Basin North ("BN") where the
potential to expand is significant.
Notable intervals from these five widely spaced sonic core holes continue to
be encouraging and include:
o 81.60m @ 944ppm Li in hole BES23-10, including 19.79m @ 1,325ppm,
o 82.30m @ 906ppm Li in hole BES23-07, including 20.87m @ 1,324ppm and
o 81.98m @ 867ppm Li in hole BES23-06, including 20.73m @ 1,363ppm.
The results from these three holes indicate a high-grade unit exists, as
previously found in Basin East ("BE") and has similar grades and maintains
strong continuity across all of BEE, likely extending into BW. This is very
positive for any future mining operation, as the high-grade unit sits in the
upper clay unit which forms the shallowest part of the deposit, essentially
cropping out at BE. The assay results also identified high levels of
molybdenum associated with drill holes BES23-06, 07, 09, and 10 and within the
high-grade unit of between 109ppm over 22.56m in hole 06 and 187ppm over
16.44m in hole 10. To put that in context, Freeport's Bagdad copper mine (c.6
miles from Basin) which extracts a healthy molybdenum by-product credit, has a
molybdenum Proven and Probable Reserve grade of c.200ppm.
During August 2023, the final drill hole assay results were received, with the
highest single interval grade identified so far of 2,791ppm Li over 0.40m and
a separate sample of 641 ppm Mo over 1.22m.
Notable intervals from the next 2 widely-spaced sonic core holes continue to
be encouraging and include:
o 88.70m @ 903ppm Li in hole BES23-11, including 12.51m @ 1,427ppm
o 75.12m @ 983ppm Li in hole BES23-12, including 27.6m @ 1,339ppm
Basin East & East Extension Highlights
Hole ID Total Upper Clay zone mean grade (Li ppm) Upper Clay zone interval thickness, in meters * High-grade Interval grade in Upper zone over 1,000 ppm cut-off (ppm) High-grade Interval Intersection length in meters* Lower Clay zone interval mean grade (Li ppm) Lower Clay zone interval thickness, in meters*
hole depth
BES-23-01 77.72 N/A N/A N/A N/A 484 31.97
BES-23-02 102.87 826 46.24 1,005 13.38 596 17.49
BES-23-03 137.92 954 63.12 1,327 24.32 729 34.24
BES-23-04 111.25 1,077 66.92 1,602 18.30 686 15.23
BES-23-05 191.11 944 63.71 1,029 32.93 701 32.92
BES-23-06 181.97 867 81.98 1,363 20.73 657 32.33
BES-23-07 221.28 906 82.30 1,324 20.87 642 21.96
BES-23-08 205.13 838 71.94 1,221 8.99 686 9.14
BES-23-09 139.29 812 74.21 1,262 11.89 Not drilled NA
BES-23-10 211.23 944 81.60 1,325 19.79 Not drilled NA
BES-23-11 197.21 903 88.7 1,427 12.51 Not drilled NA
BES-23-12 172.82 983 75.13 1,339 27.6 742 11.12
BES-23-13 183.79 Not received 82.30 Not received Not received Not drilled
BES-23-14 221.59 Not received 86.11 Not received Not received Not drilled
Note: all lengths represent true thickness as sedimentary sequence is
horizontal and holes are vertical (90 degrees to stratigraphy)
The assay results from the final drill holes continued to detect high levels
of molybdenum within the high-grade unit, such as 289ppm Mo over 8.84m in
BES23-11 within 21.04m of 167ppm and 15.56m of 148 I BES23-12. A detailed XRD
analysis of the Basin core is under construction, with the intent of
identifying the mineralogy associated with high grade lithium and molybdenum.
The remarkable continuity and consistency of the lithium intercepts in the
upper clay suggest the presence of extensive lithium mineralisation throughout
the project area, indicating the potential for a sizeable lithium deposit.
Following completion of the drill programme, the results were fed into an
updated Mineral Resource Estimate, released post quarter-end on 28 September
2023.
The lithium-clay mineralisation remains open to the west and north, indicating
further resource upside, as backed up by the previously reported 1Mt to 6Mt
LCE JORC-compliant Exploration Target identified by SRK. The total upper clay
unit is 78.40m in width on average in BEE and the first hole into BN
intercepted 86.11m of upper clay. To put that in context, the average
thickness of the upper clay unit at BE is 34.00m in all the previous 34
holes that intercepted upper clay in the last 3 drill programmes (2018, 2021
and 2022).
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 Basin North and Basin West upon
receipt of the Environmental Assessment ("EA") from the Bureau of Land
Management, expected during 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
During August 2023, the Company mobilised a drill rig at its San Domingo
pegmatite asset, with the Phase 3 drilling programme commencing later in the
month. This represents the second large-scale drill programme conducted in
less than 12 months at San Domingo, underscoring the Company's commitment to
exploring and unlocking the potential of our 23km(2) land package within this
highly prospective pegmatite district.
Bradda Head was granted an exploration permit to drill at its Northern claim
block in the San Domingo Pegmatite district. The Phase 3 drill programme has
been rigorously designed, benefiting from a comprehensive array of data and
analyses. Bradda's team of geologists conducted an extensive soil geochemistry
survey, undertook a thorough structural mapping programme, reviewed previous
GPR geophysical data, and carried out additional ground truthing to optimize
the locations and potential effectiveness of this exploration campaign.
Several new high priority targets have been identiifed, which the Company is
excited about and anticipates making new discoveries and extending known
lithium mineralization from the previous programme.
The first two phases of drilling, completed in March 2023, yielded promising
results, with the best intercept reported as 31.85m at 1.6% Li(2)O at the
Midnight Owl prospect in the Northern claim block. Phase 3 drilling will aim
to extend this known lithium mineralization.
Following positive results of soil sampling completed in February 2023 that
identified further spodumene in outcrops at San Domingo, and to strengthen our
land holding position, Bradda Head staked just under 8km(2) of new lode
claims at its San Domingo asset. This is the 4th round of claim expansion at
San Domingo, and the land holding has grown from c.13km(2) to now
c.31km(2) since July 2021.
The soil sampling survey conducted in February 2023 highlighted specific areas
within the existing claim block that displayed highly prospective indicators
for lithium exploration. Follow-up field work on select geochemical anomalies
positively identified lithium bearing minerals at nearly all anomalies,
dominated by the presence of spodumene. By expanding the current claim block
to trace these areas along strike, the Company aims to maximise the potential
for significant lithium resources and solidify its position in the region's
rapidly evolving lithium market. Additionally, the newly staked claims provide
a buffer zone, ensuring effective management and protection of the Company's
interests in the area.
The Company looks forward to keeping shareholders updated on the progress of
the ongoing drill programme at San Domingo.
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
During June 2023, the Company appointed PKF Littlejohn LLP as new auditors of
the Company, replacing KPMG Audit LLC. As the Company is listed on the TSX
Venture Exchange, the Company is required to retain an auditor recognised by
the Canadian Public Accountability Board ("CPAB"). KPMG Audit LLC, who has
been the Company's auditor since 2009, is not a participating auditor firm
with CPAB and therefore resigned at the request of the Company. Bradda Head
appointed PKF Littlejohn LLP, a CPAB-recognised auditor, to audit the
Company's financial statements as at and for the year ended February 28, 2023.
On 29 August 2023, the Company announced the resignation of Charles FitzRoy as
CEO of the Company. During the previous 30 months, Charles was a key figure in
a number of milestones, most notably listing the Company on AIM in Summer 2021
where £6.2 million was raised, securing a royalty partnership later that same
year, and in raising approximately £10 million of fresh equity-capital in the
Spring of 2022. The search for a new CEO is ongoing.
(b) Selected Financial Information
The following table sets forth selected financial information with respect to
the Company for the six and three-month period ended August 31, 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".
Six-month period ended August 31, 2023 Three-month period ended August 31, 2023 Year ended February 28, 2023
(Audited) (Audited) (Audited)
(US$) (US$) (US$)
Statement of Operations:
Total Operating Expenses (net of other income) (2,320,724) (1,177,429) (3,899,858)
Net Finance income 90,872 31,770 12,270
Net Loss (2,229,852) (1,145,659) (3,887,588)
Loss per Share (cents) (0.57) (0.29) (1.018)
Balance Sheet Data:
Cash & cash equivalents, including cash deposits 2,930,730 2,930,730 7,746,519
Total Assets 15,467,509 15,467,509 18,198,559
Total Liabilities (531,799) (531,799) (1,213,619)
Accumulated Deficit (15,680,663) (15,680,663) (13,631,433)
Total Shareholder's Equity 14,935,710 14,935,710 16,984,940
MANAGEMENT DISCUSSION AND ANALYSIS: QUARTER ENDED AUGUST 31, 2023
(c) Introduction
(d) This interim Management Discussion and Analysis (the "interim MD&A") should be read in conjunction with the audited financial statements of the Company for the year ended February 28, 2023, and related notes. This MD&A is made as of October 25, 2023.
(e) Results of Operations for the six and three-months ended August 31, 2023
The Company's net loss after tax for the six-month period to August 31, 2023
was US$ 2,229,852, compared to a loss of US$ 1,165,319 for the comparative
period ended August 31, 2022. The major expenses for the six-month period
ended August 31, 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
Six-Month Period Ended August 31, 2023 Three-Month Period Ended August 31, 2023
(Unaudited) (Unaudited)
US$ US$
Basin Project 582,140 332,742
San Domingo Project 614,674 327,892
Wikieup Project 12,424 150
Other projects 4,740 1,327
TOTAL 1,213,978 662,111
During this six-month time period, the Company incurred and capitalised
exploration expenditures of US$ 2,306,867, compared to US$ 965,140 for the
comparative six-month period to August 31, 2022.
The capitalied exploration costs for the six-month period ended August 31,
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
Six-Month Period Ended August 31, 2023 Six-Month Period Ended August 31, 2023 Three-Month Period Ended August 31, 2023 Three-Month Period Ended August 31, 2023
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
US$ US$ US$ US$
Basin Project 910,384 65,505 489,370 65,505
San Domingo Project 790,644 312,370 263,213 62,370
Wikieup Project - 89,925 - 89,928
Other Project - 138,039 - 107,742
TOTAL 1,701,028 605,839 752,583 325,545
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 six-month period to August 31,
2023 totalled US$ 2,593,928, compared to US$ 2,551,978 for the comparative
six-month period to August 31, 2022. General and administrative expenses are
broken down as follows:
Project General and administrative expenditures
Six-Month Period Ended August 31, 2023 Three-Month Period Ended August 31, 2023
(Unaudited) (Unaudited)
US$ US$
Auditors' fees 16,440 (3,160)
Directors and management fees and salaries 291,157 153,616
Legal and accounting 201,584 117,971
Contractor costs 1,213,978 662,111
Professional and marketing costs 404,552 200,350
Other administrative costs 466,217 204,199
TOTAL 2,593,928 1,335,087
During the six-month period to August 31, 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 six-month period ended August 31, 2023, the Company had net cash
outflows of US$ 6,242,378, compared to inflows of US$ 6,990,172 during the
comparative six-month period to August 31, 2022. Net cash inflows for the
current three-month period ended August 31, 2023, include placing cash amounts
on short term deposits and receipt of cash from matured deposits, totalled US$
411,283. The cashflows for the two periods are shown below:
Six-Month Period Ended August 31, 2023 Three-Month Period Ended August 31, 2023
(Unaudited) (Unaudited)
US$ US$
Statement of cashflows
Cash flows from operating activities (2,787,748) (1,206,056)
Cash flows from investing activities (2,118,913) (893,424)
Cash flows from financing activities * (1,335,717) 2,510,763
Net cash flows during the period (6,242,378) 411,283
Cash balances at beginning of the period 7,746,519 1,092,858
Cash balances at the end of the period 1,504,141 1,504,141
* includes US$ 1,426,589 placed on short term deposit during the six-month
period ended August 31, 2023, and receipt of maturing deposits of US$
2,478,993 during the three-month period ended August 31, 2023.
(g) Liquidity and Capital Resources
As at August 31, 2023, the Company had cash and cash equivalents (including
short term cash deposits) of US$ 42,930,730, and a working capital surplus of
US$ 2,619,378. 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.
Post period end 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 in October 2023.
(h) Outstanding Share Data
As of August 31, 2023, the following securities were outstanding:
Shares 390,609,439
Warrants 81,698,305
Stock options 37,131,304
Fully diluted shares outstanding 509,439,048
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 six-month period ended 31 August 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$ 96,724 (year
ended 28 February 2023: US$ 49,318), of which US$ 33,424 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 August 31, 2023, the Company had incurred total capitalised exploration
expenditures, including capitalised licence and permit costs, of US$
11,881,133. 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 six and three-month period ended August 31, 2023
Chairman's statement
Introduction
I am pleased to present the unaudited Interim Results for Bradda Head Lithium
Limited (the "Company" or "Bradda Head") for the six-month period ended 31
August 2023.
Operational review
The six-month period to 31 August 2023 has been both exciting and extremely
busy for the Company, focussing on our key projects.
Basin Project
Drilling continued at our Basin clay project in Arizona, with the third drill
programme in the area finishing the fourteenth and final hole on August 10,
2023 for a total drilled meterage of 2,355. The programme encountered
better-than-expected thicknesses of clay, further confirming that
lithium-bearing clays continue and appear to thicken to the north into the
Company's Basin North ("BN") claims, and likely west into the Basin West
("BW") claims. The highest single interval grade to date was encountered
during the programme, with assay results identifying a grade of 2,791ppm Li
over 0.40m and a separate sample of 641 ppm Li over 1.22m.
Highlights from the 2023 Basin East ("BE") and Basin East Extension ("BEE")
drill programme
Hole ID Total Upper Clay zone mean grade (Li ppm) Upper Clay zone interval thickness, in meters High-grade Interval grade in Upper zone over 1,000 ppm cut-off (ppm) High-grade Interval Intersection length in meters Lower Clay zone interval mean grade (Li ppm) Lower Clay zone interval thickness, in meters
hole depth
BES-23-01 77.72 N/A N/A N/A N/A 484 31.97
BES-23-02 102.87 826 46.24 1,005 13.38 596 17.49
BES-23-03 137.92 954 63.12 1,327 24.32 729 34.24
BES-23-04 111.25 1,077 66.92 1,602 18.30 686 15.23
BES-23-05 191.11 944 63.71 1,029 32.93 701 32.92
BES-23-06 181.97 867 81.98 1,363 20.73 657 32.33
BES-23-07 221.28 906 82.30 1,324 20.87 642 21.96
BES-23-08 205.13 838 71.94 1,221 8.99 686 9.14
BES-23-09 139.29 812 74.21 1,262 11.89 Not drilled NA
BES-23-10 211.23 944 81.60 1,325 19.79 Not drilled NA
BES-23-11 197.21 903 88.7 1,427 12.51 Not drilled NA
BES-23-12 172.82 983 75.13 1,339 27.6 742 11.12
Note: all lengths represent true thickness as sedimentary sequence is
horizontal and holes are vertical (90 degrees to stratigraphy)
The high-grade unit previously found in BE has similar grades and maintains
strong continuity across all of BEE and now confirmed into BN, likely
extending into BW. This is positive for any future mining operation, as the
high-grade unit sits in the upper clay unit which forms the shallowest part of
the deposit and cropping out at BE. The remarkable continuity and consistency
of the lithium intercepts in the upper clay suggest the presence of extensive
lithium mineralisation throughout the project area, indicating the potential
for a sizeable lithium deposit.
Following completion of the drill programme, the results were fed into an
updated MRE conducted by SRK Consulting (UK) Ltd ("SRK"), an independent
mining consultancy, released post quarter-end 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.
Following the release of the updated MRE, which included a contained LCE
tonnage of over 1Mt LCE, and as per the Royalty Agreement with LRC, Bradda
Head formally requested payment of US$ 2.5 million from LRC, with funds being
received during October 2023.
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)).
San Domingo Project
On 10 August 2023, the Company mobilised a drill rig for its Phase 3 drill
programme at the San Domingo pegmatite district in Arizona, with drilling
commencing later in the month. This represents the second large-scale drill
programme conducted in less than one year at San Domingo, which underscores
the Company's commitment to exploring and unlocking the potential of the
23km(2) land package held within this highly prospective pegmatite district.
Bradda Head was granted an exploration permit to drill at its Northern claim
block in the San Domingo pegmatite district. The Phase 3 drill programme has
been rigorously designed, benefiting from a comprehensive array of data and
analyses. Bradda Head's team of geologists conducted an extensive soil
geochemistry survey, undertook a thorough structural mapping programme,
reviewed previous GPR geophysical data, and carried out additional ground
truthing to optimize the locations and potential effectiveness of this
exploration campaign. The results of this identified several new high priority
targets, which the Company is excited about and anticipates making new
discoveries and extending known lithium mineralization from the previous
programme, completed during March 2023.
Following positive results of soil sampling completed in February 2023 that
identified further spodumene in outcrops at San Domingo, and in order to
strengthen our land holding position, Bradda Head staked just under 8km(2 )of
new lode claims at its San Domingo asset. This is the 4th round of claim
expansion at San Domingo, and the land holding has grown from c.13km(2) to
now c.31km(2) since July 2021.
The soil sampling survey conducted in February 2023 highlighted specific areas
within the existing claim block that displayed highly prospective indicators
for lithium exploration. Follow-up field work on select geochemical anomalies
positively identified lithium bearing minerals at nearly all anomalies,
dominated by the presence of spodumene. By expanding the current claim block
to trace these areas along strike, the Company aims to maximise the potential
for significant lithium resources and solidify its position in the region's
rapidly evolving lithium market. Additionally, the newly staked claims provide
a buffer zone, ensuring effective management and protection of the Company's
interests in the area.
The Company looks forward to keeping shareholders updated on the progress of
ongoing drill programme at San Domingo.
Financial Review
During the six-month period ended 31 August 2023, the Company recorded a loss
for the period of US$ 2,229,852 (period ended 31 August 2022: US$ 1,165,319).
As at period end, cash and cash deposit balances stood at US$ 2,930,730 (28
February 2023: US$ 7,746,519), capitalised deferred mining, exploration,
licence and permit costs stood at US$ 11,881,133 (28 February 2023: US$
9,574,266), and total assets were US$ 15,467,509 at 31 August 2023 (28
February 2023: US$ 18,198,559).
Post period end on 28 September 2023, the Company announced an updated MRE at
the Company's Basin Project, Arizona. As per the Gross Overriding Royalty
Agreement with 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 in
October 2023.
The Board are in ongoing discussions with legal advisors regarding the options
available to recover the fraudulent option exercise payment, as communicated
to shareholders on 29 March 2022. Updates will be provided when available.
Approach to Risk and Corporate Governance
The Company's general risk appetite is a moderate, balanced one that allows it
to maintain appropriate growth, profitability and scalability, whilst ensuring
full corporate compliance.
The Group's primary risk drivers include:
- Strategic, Reputational, Credit, Operational, Market, Liquidity,
Foreign Exchange, Capital and Funding, Compliance and Conduct.
Our risk appetite has been classified as high under an "impact" matrix defined
as Zero, Low, Medium and High. Appropriate steps have been taken and adequate
controls implemented to monitor the risks of the Company, and the appropriate
committees and reporting structures have been established, which under the
Chairmanship of the Chairman, will monitor risks facing the Company.
Corporate
During June 2023, the Company appointed PKF Littlejohn LLP as new auditors of
the Company, replacing KPMG Audit LLC. As the Company is listed on the TSX
Venture Exchange, the Company is required to retain an auditor recognised by
the Canadian Public Accountability Board ("CPAB"). KPMG Audit LLC, who has
been the Company's auditor since 2009, is not a participating auditor firm
with CPAB and therefore resigned at the request of the Company. Bradda Head
appointed PKF Littlejohn LLP, a CPAB-recognised auditor, to audit the
Company's financial statements as at and for the year ended February 28, 2023.
On 29 August 2023, the Company announced the resignation of Charles FitzRoy as
CEO of the Company. During the previous 30 months, Charles was a key figure in
a number of milestones, most notably listing the Company on AIM in Summer 2021
where £6.2 million was raised, securing a royalty partnership later that same
year, and in raising approximately £10 million of fresh equity-capital in the
Spring of 2022. The search for a new CEO is ongoing.
Strategy and Outlook
Global demand for lithium is estimated to increase significantly. A report
published by Popular Mechanics during January 2023, and prepared based on data
from the International Energy Agency, shows that the electrified economy in
2030 is estimated to need anywhere from 250,000 to 450,000 tonnes of lithium.
During 2021, only 105 tonnes of lithium was produced. Lithium is an important
building block for many components of renewable energy technology and
infrastructure. In the clean energy race, the United States has been lagging
behind in recent years. Under the Biden Administration, the United States is
determined to break away from the dependence of China for production and
manufacturing of lithium.
We believe that Bradda Head, with its diversified portfolio of projects
located in the USA, is in a unique position to take advantage of this
significant growth in US-based lithium demand, and in turn create value for
shareholders.
John 'Ian' Stalker
Chairman
25 October 2023
Condensed Interim Consolidated Statement of Comprehensive Income
for the period ended 31 August 2023
Six-month period ended 31 August 2023 Six-month period ended 31 August 2022 Three-month period ended 31 August 2023 Three-month period ended 31 August 2022
(unaudited) (unaudited) (unaudited) (unaudited)
Notes US$ US$ US$ US$
Expenses
General and administrative 2 (2,593,928) (2,551,978) (1,335,087) (1,346,449)
Share based payment and warrant expense 10 (180,622) (1,285,743) - (91,539)
Foreign exchange gain/(loss) 195,791 (1,004,583) 59,316 (694,061)
─────── ─────── ─────── ───────
Operating loss (2,578,759) (4,842,304) (1,275,771) (2,132,049)
Other income
Warrant fair value re-measurement 11 210,061 3,679,505 63,476 849,161
Unrealised gain/(loss) on investment 47,974 (2,520) 34,866 (2,520)
Finance income 90,872 - 31,770 -
─────── ─────── ─────── ───────
Loss before income tax (2,229,852) (1,165,319) (1,145,659) (1,285,408)
Income tax expense - - - -
─────── ─────── ─────── ───────
Loss for the period (2,229,852) (1,165,319) (1,145,659) (1,285,408)
══════ ══════ ══════ ══════
Other comprehensive income - foreign currency translation reserve
- - - -
─────── ─────── ─────── ───────
Total comprehensive loss for the period (2,229,852) (1,165,319) (1,145,659) (1,285,408)
═══════ ═══════ ═══════ ═══════
Basic and diluted loss per share (US cents) 12 (0.57) (0.33) (0.29) (0.33)
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 31 August 2023
Notes 31 August 2023 28 February 2023
(unaudited) (audited)
US$ US$
Non-Current assets
Deferred mining and exploration costs 3 9,162,879 7,461,851
Exploration permits and licences 4 2,718,254 2,112,415
Plant and equipment 8 104,982 79,602
Advances and deposits 6 190,482 104,192
Investment 139,735 91,761
─────── ───────
Total non-current assets 12,316,332 9,849,821
─────── ───────
Current assets
Cash and cash equivalents 1,504,141 7,746,519
Cash deposits 1,426,589 -
Advances and deposits 6 61,379 385,624
Trade and other receivables 6 159,068 216,595
─────── ───────
Total current assets 3,151,177 8,348,738
─────── ───────
Total assets 15,467,509 18,198,559
═══════ ═══════
Equity
Share premium 9 30,616,373 30,616,373
Retained deficit (15,680,663) (13,631,433)
─────── ───────
Total equity 14,935,710 16,984,940
─────── ───────
Current liabilities
Trade and other payables 7 511,659 983,418
Warrant liability 11 20,140 230,201
─────── ───────
Total current liabilities 531,799 1,213,619
─────── ───────
Total equity and liabilities 15,467,509 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 25
October 2023 and were signed on their behalf by:
Denham
Eke
Director
Condensed Interim Consolidated Statement of Changes in Equity
for the period ended 31 August 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 - (2,229,852) (2,229,852)
─────── ─────── ───────
Total comprehensive loss for the period - (2,229,852) (2,229,852)
Transactions with owners of the Company
Equity settled share-based payments (note 10) - 180,622 180,622
─────── ─────── ───────
Total transactions with owners of the Company - 180,622 180,622
─────── ─────── ───────
Balance at 31 August 2023 (unaudited) 30,616,373 (15,680,663) 14,935,710
═══════ ═══════ ═══════
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 31 August 2023 (continued)
Share premium Retained deficit Total
US$ US$ US$
Balance at 1 March 2022 (audited) 23,434,385 (11,177,220) 12,257,165
Total comprehensive loss for the period
Loss for the period - (1,165,319) (1,165,319)
─────── ─────── ───────
Total comprehensive loss for the period - (1,165,319) (1,165,319)
Transactions with owners of the Company
Issue of ordinary shares (note 9 and note 11) 7,581,351 - 7,581,351
Share issue costs capitalised (note 9) (547,916) - (547,916)
Equity settled share-based payments (note 10) - 1,285,743 1,285,743
─────── ─────── ───────
Total transactions with owners of the Company 7,033,435 1,285,743 8,319,178
─────── ─────── ───────
Balance at 31 August 2022 (unaudited) 30,467,820 (11,056,796) 19,411,024
═══════ ═══════ ═══════
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 31 August 2023
Six-month period ended 31 August 2023 Six-month period ended 31 August 2022 Three-month period ended 31 August 2023 Three-month period ended 31 August 2022
Notes (unaudited) (unaudited) (unaudited) (unaudited)
US$ US$ US$ US$
Cash flows from operating activities
Loss before income tax (2,229,852) (1,165,319) (1,145,659) (1,285,408)
Adjusted for non-cash and non-operating items:
Depreciation 8 24,620 14,176 13,699 9,532
Unrealised fair value gain on investment (47,974) 2,520 (34,866) 2,520
Equity settled share based payments expense 10, 11 180,622 1,285,743 - 91,539
Warrant fair value re-measurement 11 (210,061) (3,679,505) (63,476) (849,161)
Unrealised FX on cash balances - 1,004,583 - 694,061
Cash interest income (90,872) - (31,770) -
─────── ─────── ─────── ───────
(2,373,517) (2,537,802) (1,262,072) (1,336,917)
Change in trade and other receivables 57,525 (460,495) 9,800 (171,491)
Change in trade and other payables (471,756) (743,903) 46,216 7,723
─────── ─────── ─────── ───────
Net cash flows used by operating activities (2,787,748) (3,742,200) (1,206,056) (1,500,685)
Cash flows from investing activities
Amounts paid for deferred mining and exploration costs 3 (1,701,028) (275,343) (752,583) (262,582)
Amounts paid for licences and permits 4 (605,839) (689,797) (325,545) (395,374)
Cash paid for bonding deposit received 237,954 - 184,704 -
Equipment purchased 8 (50,000) (58,672) - -
─────── ─────── ─────── ───────
Net cash flows used by investing activities (2,118,913) (1,023,812) (893,424) (657,956)
Cash flows from financing activities
Cash received from shares and warrants issued 9 - 12,304,100 - -
Share issue costs paid 9 - (547,916) - -
Cash interest income 90,872 - 31,770 -
Short term deposits placed/(returned) (1,426,589) - 2,478,993 -
─────── ─────── ─────── ───────
Net cash flows from financing activities (1,335,717) 11,756,184 2,510,763 -
─────── ─────── ─────── ───────
(Decrease) / increase in cash and cash equivalents (6,242,378) 6,990,172 411,283 (2,158,641)
Cash and cash equivalents at beginning of period 7,746,519 7,327,303 1,092,858 16,165,594
Effect of foreign exchange on cash balances - (1,004,583) - (694,061)
─────── ─────── ─────── ───────
Cash and cash equivalents at end of period 1,504,141 13,312,892 1,504,141 13,312,892
═══════ ═══════ ═══════ ═══════
The notes on pages 12 to 19 form an integral part of these condensed
consolidated interim financial statements.
1 Reporting Entity
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 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:
Six-month period ended 31 August 2023 Six-month period ended 31 August 2022 Three-month period ended 31 August 2023 Three-month period ended 31 August 2022
(unaudited) (unaudited) (unaudited) (unaudited)
US$ US$ US$ US$
Auditors' fees 16,440 101,441 (3,160) 19,600
Directors and management fees and salaries 291,157 269,276 153,616 136,602
Legal and accounting 201,584 174,937 117,971 74,631
Contractor costs 1,213,978 1,260,523 662,111 694,697
Professional and marketing costs 404,552 609,567 200,350 302,239
Other administrative costs 466,217 136,234 204,199 118,680
─────── ─────── ─────── ───────
Total 2,593,928 2,551,978 1,335,087 1,346,449
═══════ ═══════ ═══════ ═══════
3 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 1,701,028
───────
At 31 August 2023 (unaudited) 9,162,879
═══════
Cost and net book value
At 31 August 2023 (unaudited) 9,162,879
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 31 August 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.
4 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
Impairment (19,470)
───────
At 28 February 2023 (audited) 2,112,415
═══════
Capitalised during the period 605,839
───────
At 31 August 2023 (unaudited) 2,718,254
═══════
Cost and net book value
At 31 August 2023 (unaudited) 2,718,254
At 28 February 2023 (audited) 2,112,415
═══════
The Group assessed the carrying amount of the licences and permits held for
impairment as at 31 August 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.
5 Investment in subsidiary undertakings
As at 31 August 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 31 August
2023, and up to the date that control ceases.
6 Trade and other receivables and advances and deposits
Non-current
31 August 2023 28 February 2023
(unaudited) (audited)
US$ US$
Advances and deposits 190,482 104,192
═══════ ═══════
Current
US$ US$
Trade and other receivables 159,068 216,595
Advances and deposits 61,379 385,624
═══════ ═══════
7 Trade and other payables
31 August 2023 28 February 2023
(unaudited) (audited)
US$ US$
Trade payables 500,859 904,944
Accrued expenses and other payables 10,800 78,474
─────── ───────
511,659 983,418
═══════ ═══════
8 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 31 August 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)
Additions during the period (24,620) (24,620)
────── ──────
As at 31 August 2023 (unaudited) (59,408) (59,408)
══════ ══════
Carrying amount
As at 31 August 2023 (unaudited) 104,982 104,982
As at 28 February 2023 (audited) 79,602 79,602
══════ ══════
9 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 11) 73,195,560 - 7,729,904
Share issue costs capitalised - - (547,916)
─────── ─────── ───────
At 28 February 2023 (audited) 390,609,439 - 30,467,820
═══════ ═══════ ═══════
31 August 2023 (unaudited) 390,609,439 - 30,467,820
═══════ ═══════ ═══════
10 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 31 August 2023 (unaudited) Fair value
Date in years Price
Options US$
Directors and Participants April 2018 5 US$ 0.15668 1,606,304 - - - 1,606,304 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 - - - 3,500,000 314,962
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 (150,000) - 4,650,000 174,978
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 (700,000) - 45,634,049 3,382,967
═══════ ═══════ ═══════ ═══════ ═══════ ═══════
10 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.
Six-month period ended 31 August 2023 Six-month period ended 31 August 2022 Three-month period ended 31 August 2023 Three-month period ended 31 August 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.
-
11 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 six-month period ended 31 August 2023, no new warrants were issued
(period ended 31 August 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 31 August 2022 (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 31 August 2022: Nil) 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 31 August 2023 20,140
═══════
12 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$ 2,229,852 (six-month period to 31 August 2022: loss of
US$ 1,165,319) and the weighted average number of shares of 390,609,439 (at 31
August 2022: 349,139,509) 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.
13 Related party transactions and balances
Edgewater Associates Limited ("Edgewater")
During the six-month period ended 31 August 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$ 96,724 (year
ended 28 February 2023: US$ 49,318), of which US$ 33,424 was prepaid as at the
period end (28 February 2023: US$ 14,497).
14 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$ 405,000 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.
15 Events after the reporting date
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 in October 2023.
ENDS
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