REG - Bradda Head Lithium - Unaudited Interim Results
19/11/2024 07:00
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RNS Number : 6769M Bradda Head Lithium Ltd 19 November 2024
19 November 2024
Bradda Head Lithium Ltd
("Bradda Head", "Bradda", or the "Company")
Unaudited Interim Results for the six-month period ended 31 August 2024
Bradda Head Lithium Ltd (AIM: BHL), the North America-focused lithium
development group, is pleased to announce that it has today published its
unaudited financial results for the six-months ended 31 August 2024.
The interim results have been posted on the Company's
website www.braddaheadltd.com (http://www.braddaheadltd.com) .
Financial and operational highlights
· Successfully completed a follow-up drill programme at its Basin North
lithium in clay project in Arizona, USA, with eight holes being drilled, with
results containing excellent lithium mineralization, and extensive amounts
being newly discovered in the Lower Clay;
· Abundant lithium identified in the Lower Clay in five out of the
eight drill holes;
· During July 2024, released an updated MRE totalling 2.8 million tons
contained LCE, exceeding the final LRC royalty agreement threshold and
triggering the final royalty payment of US$3 million and adding significant
cash to the balance sheet;
· Total drilled area at Basin East/Basin East Extension/Basin North
covers only 5km2 of the 19.7km2 license area at the Basin Project that is
100% owned by Bradda Head;
· Progress made at the San Domingo pegmatite project, including
encouraging surface channel sample results at our newly defined White Ridge
target (5.00m of 2.33%, 4.10m of 2.81%, and 4.00m of 1.26% Li2O) and existing
Morning Star target (5.30m of 1.25% Li2O), which will drive the next phase of
exploration;
· Post-period end, the Company embarked on a Metallurgical Scoping
Study using AI technology designed to identify mineralogy for advanced ore
sorting, a process that can significantly advance operational planning, and
accelerate path to production.
Ian Stalker, Chair of Bradda Head, commented:
"The six months in question saw the Company continuing to put the building
blocks in place to progress Bradda Head's transition from an explorer to a
near term potential producer from its San Domingo Pegmatite Project. The
programmes we have undertaken have not only expanded our 43- 101 compliant
resource base at Basin, they have also allowed us to made meaningful
progress at San Domingo that has fed into our exploration plans post-period
end. Our belief that our portfolio can be developed into a world-class lithium
resource source for the U.S. battery market remains steadfast.
Whilst challenges have persisted in the market, we remain optimistic on the
long-term outlook for lithium; it is pleasing to note that we are seeing the
inklings of positive movement in sentiment across exploration for lithium in
the US. The activities that we have undertaken and continue to deliver on,
corporate and operational, will leave the Company well placed to benefit from
this.
We are continuing to forge ahead on our programmes across our assets -
pegmatites, brines and clays - with the ultimate objective of providing
U.S.-sourced lithium for the U.S., as the drive towards electrification
continues across industries, and the need for local lithium amplifies."
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. UPON THE PUBLICATION OF
THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INSIDE
INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN AND SUCH PERSONS
SHALL THEREFORE CEASE TO BE IN POSSESSION OF INSIDE INFORMATION.
For further information please visit the Company's
website: www.braddaheadltd.com (http://www.braddaheadltd.com/) .
Contact:
Bradda Head Lithium Limited +44 (0) 1624 639 396
Ian Stalker, Executive Chair
Denham Eke, Finance Director
Beaumont Cornish (Nomad) +44 20 7628 3396
James Biddle / Roland Cornish
Panmure Liberum (Joint Broker) +44 20 7886 2500
Kieron Hodgson / Rauf Munir
Shard Capital (Joint Broker) +44 207 186 9927
Damon Heath / Isabella Pierre
Tavistock (PR) + 44 20 7920 3150
Nick Elwes / Josephine Clerkin braddahead@tavistock.co.uk
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 a Measured Mineral Resource of 20 Mt at an
average grade of 929 ppm Li for a total of 99 kt LCE and an Indicated
Mineral Resource of 122 Mt at an average grade of 860 ppm Li and an
Inferred Mineral Resource of 499 Mt at an average grade of 810 ppm Li for a
total of 2.81 Mt 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 of 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.
Unaudited Interim Report and Condensed Consolidated Interim Financial
Statements
For the six-month period ended 31 August 2024
Chair'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 2024.
Operational review
The six-month period to 31 August 2024 has been both challenging and
extremely busy for the Company, focussing on our key projects to ensure the
Company is ready to advance quickly when the market changes whilst continuing
to maintainfinancial prudence.
Basin Project
The lithium-in-clay resource-expansion drilling programme, which commenced
during March 2024, concluded in June 2024 with the completion of eight drill
holes on the Basin North target portion of the Basin project. Results from all
eight drill holes contained excellent lithium mineralization, with extensive
amounts being newly discovered in the Lower Clay.
Highlights include:
· Upper Clay unit thickness at 103m in the center of the drill pattern
discovered in hole BND24-19, encountering nearly 100m (99.82m) at 839 ppm Li
with a higher-grade interval of 32.52m at 1,030 ppm Li;
· Five out of the eight holes contain abundant lithium in the Lower
Clay, significant as the Company are now able to connect the Lower Clay in
Basin North with holes drilled at Basin East, 2km to the south;
· Drill hole BND24-22 encountered 24.05m at 845 ppm Li in the lower
clay, ending in 822 ppm Li;
· Additional surface geological mapping and surface sampling further
predict the expansion of clays (Upper and Lower) towards the west onto Basin
West, to the East onto a State of Arizona Mineral Exploration Permit (MEP),
and to the north where clays have been discovered 1.8km north of hole
BND24-20;
· New surface sampling detects up to 1,241 ppm Li in clays 1.8km to the
north of hole BND24-20, interpreted to represent the Upper Clay; and
· Programme completed without any environmental or safety
incidents.
Rock chip samples were also collected in Basin North around the north margin
of the sedimentary basin, detecting up to 1,241 ppm Li on the surface, proving
the exceptional expansion opportunities towards the north, along with what the
Company knows about the extensive potential at Basin West.
2024 Drill Hole Intercepts
Drill Hole From m To m Interval m Li in ppm Clay Sequence Comments
BND24-15 164.44 254.20 88.44 811 Upper Clay 1.52m of cave material, not included
Inc. 221.89 234.70 12.81 1,250 Upper Clay_High Grade
282.82 311.54 *27.75 737 Lower Clay * 0.97m Interval lost at 307.18 due to re-drill
Inc. 296.91 311.54 *12.29 1,024 Lower Clay_High Grade * 0.97m Interval lost at 307.18 due to re-drill
BND24-16 76.5 156.67 80.17 694 Upper Clay
120.52 130 9.48 938 Upper Clay
BND24-17 *Hole Lost at 76.2m
BND24-18 153.19 216.10 62.91 711 Upper Clay
188.61 196.90 8.29 1,024 Upper Clay
BND24-19 213.21 313.03 99.82 841 Upper Clay
Inc. 251.46 283.98 32.52 1,030 Upper Clay_High Grade
347.32 362.41 15.09 635 Lower Clay
BND24-20 198.39 275.2 76.81 749 Upper Clay
244.24 257.83 13.59 946 Upper Clay
BND24-21 80.41 163.98 83.57 871 Upper Clay
Inc. 107.05 127.19 20.14 1,114 Upper Clay_High Grade
173.31 213.57 40.26 695 Lower Clay
206.36 211.53 4.88 1,123 Lower Clay_High Grade
BND24-22 217.81 241.86 24.05 845 Lower Clay Upper Clay not analyzed, twin of BES23-11
BND24-23 98.82 168.25 69.80 976 Upper Clay
Inc. 136.43 148.07 11.74 1,584 Upper Clay_High Grade
197.51 208.94 11.43 864 Lower Clay_High Grade
* Drill hole BND24-17 was lost at a depth of 76.2 meters. A new site was
permitted 100m to the south as a replacement and drilled hole BND24-20. All
holes were drilled vertical.
Following the drill programme, an updated Mineral Resource Estimate ("MRE")
was completed by ABH Engineering Inc ("ABH"), the QP. The new contained LCE
Tonnage, detailed below, surpassed the contracted threshold of 2.5Mt and
enabled the Company to trigger the final payment of US$3.0 million from the
Lithium Royalty Company to Bradda Head, with funds being received during July
2024.
The total new resource amounts to 2.8 million tons contained LCE, with 20
million tonnes of 929ppm lithium for 99 thousand tons of LCE in the Measured
category, the first ever in this category at the Basin Project.
ABH applied basic technical and economic assumptions for open pit mining
(mining and selling costs, mining recovery and dilution, pit slope angles) and
processing factors (Li recovery, processing costs), to determine which portion
of the block model has reasonable prospects for eventual economic extraction
as required by CIM (Canadian Institute of Mining, Metallurgy, and Petroleum).
To achieve this, the Mineral Resource has been subject to a pit optimisation
study and cut-off grade analysis.
Mineral Resource Statement for Basin East, Basin East Extension and Basin
North
Classification Domain Tonnes Mean Grade Contained Metal
Mt Li (ppm) LCE (kt)
Measured Upper Clay 13 720 48
Upper Clay HG 7 1,316 49
Lower Clay 1 687 2
SubTotal 20 929 99
Indicated Upper Clay 90 794 382
Upper Clay HG 18 1,302 126
Lower Clay 14 712 52
SubTotal 122 860 560
Inferred Upper Clay 318 740 1,254
Upper Clay HG 90 1,154 555
Lower Clay 97 709 366
SubTotal 506 808 2,175
· Mineral Resource statement has an effective date of 11(th) June
2024.
· 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 $17,200 USD/t
LCE; State of Arizona royalty (selling cost) of 6%; operating costs of $35
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 lithium carbonate equivalent
(LCE) = 5.323
· The figures above are reported on a gross basis given Bradda's
100% interest in the property
· Bradda is the Operator at Basin and 100% owner
Over 115 million tonnes of the contained LCE is in a High-Grade zone within
the Upper Clay zone with an average grade of some 1,190 ppm Li. This
High-Grade zone gives Bradda Head further optionality and could have important
economic implications for a potential future mining operation. The shallow
nature of the High-Grade zone, which crops out in Basin East, would likely
result in a low strip ratio, enabling High-Grade ore to be scheduled early in
a possible mine plan as it sits in the upper part of the deposit.
It is important to note that the total drilled area at Basin East/Basin East
Extension/Basin North covers only 5km(2) of our 19.7km(2) license area at
the Basin Project. The Upper Clay, Upper Higher-Grade and Lower Clay horizons
show remarkable extent and continuity throughout the drilled parts of the
Basin Project and remain open to the north, west, and east indicating
significant exploration potential in the overall Basin property.
Geological mapping, surface samples assayed for lithium and geophysical
(Ground Penetrating Radar) survey work completed also indicates similar clay
layers are likely present throughout the majority of the Basin West license
area. Recent surface mapping over Basin West identified substantial Upper and
Lower Clay horizons, separated by tuff and basalt layers, providing
stratigraphic context. Both tuff and basalt layers are found above the Upper
and Lower Clays, indicating strong optimism in discovering additional clays in
the northwest quadrant of Basin West. As such, with further wide-spaced
drilling Bradda Head sees excellent potential to increase the resource base
substantially.
Next steps
The Company continues to work with the Kingman BLM District office and advance
the Basin West Exploration Plan of Operations ("EPO"). A scaled back drill
plan was recommended by the BLM, suggesting a smaller program could
potentially expedite the Environmental Assessment ("EA") process and quicker
approval. The Company has also engaged with a Canadian based Metallurgical
Process Consulate to consider beneficiation opportunities related to the
treatment of clay deposits.
Wickieup Project
The Company will commence surface reconnaissance over clay exposures on the
new land acquired in the claim exchange with Arizona Lithium. The new lands
have what appear to be clay horizons potentially equivalent to the Big Sandy
lithium resource owned by Arizona Lithium. These clay horizons and
stratigraphic profiles provide significant opportunities for Bradda Head to
develop the property.
San Domingo Project
During the summer, the Company commenced a channel and grab sampling programme
at the pegmatite project. Assay results were received post period end during
September and October 2024.
Highlights include:
· 8.80m @ 0.97% Li(2)0 with 174 ppm Cs at Dragon South
· 10.40m @ 0.68% Li(2)O with 341 ppm Cs at Dragon South
· 4.80m @ 0.41% Li(2)O with 336 ppm Cs at Dragon North
· 9.00m @ 0.29% Li(2)O with 325 ppm Cs at Dragon North
· 4.70m @ 0.28% Li(2)O with 176 ppm Cs at Dragon North
· 1.90m @ 0.29% Li(2)O with 609 ppm Cs at Dragon South
· 8.40m @ 1.17% Li(2)0 with 623 ppm Cs and 625 Ta2O5 at Midnight
Owl
· Seven grab rock samples ranging from 0.25% to 3.57% Li20 on newly
discovered Ruby Soho Pegmatite
· Grab sampling identifies 3.97% Li2O on spodumene-bearing
pegmatite outcrop at the Thunder target
· The abundance of Cs and Ta present in the Midnight Owl Samples holds
potential for excellent by-products (Ta(2)O(5) at $300/kg, CsCO(3) at $142/kg)
· Both Ruby Soho and Thunder are accessible by road, with clear
drill targets emerging.
Elevated cesium ("Cs") was also noted across the Dragon targets, with channel
samples running as high as 994 ppm and grab samples up to 1,317 ppm. This is
an important find as the US Department of Energy considers Cs a strategic and
critical metal and is actively seeking it.
The identification of exceptional lithium values on new and older targets
illustrates the ever-present and shallow potential for discovery of lithium
mineralization at San Domingo.
The programme included the discovery of a new target called Ruby Soho,
located 350 meters east of Lone Giant, consisting of 250 meters of exposed
pegmatite. The seven samples collected along the 250-meter stretch have a
lithium oxide range from 0.25% to 3.57% Li2O on a pegmatite that ranges in
widths of 1.5 to 5.0 meters on the surface. This target has never been
drill-tested and has road access to the highest-grade samples.
Next steps
Bradda Head has submitted a Notice of Intent ("NOI") with the BLM to drill up
to 39 holes at Dragon South and North and awaits approval. Once further
mapping and surface sampling at the new Ruby Soho target is completed, further
new drill sites will be designed, and the existing Midnight Owl NOI will be
amended to include new sites both at Ruby Soho and Lone Giant, plus newly
discovered shallow opportunities adjacent to the Midnight Owl mine. Additional
drill sites are planned in the Central target at White Ridge, Jumbo/Lower
Jumbo, Bee Hive, and Sunrise. Similar to the Midnight Owl NOI, the Central NOI
can be easily amended to include more drill sites as the Company has not
exceeded the overall 5.0-acre footprint.
The Company has also collected mica (muscovite) samples over the numerous
pegmatites throughout the property for specific Libs analysis, an XRF device
designed to analyse the lithium, rubidium, and potassium content of the micas
and ideally identify pegmatites that are interpreted to be fertile or barren.
Results are pending and will guide the next phase of exploration.
Nevada Brines
Reconnaissance field trips are planned to both Eureka and Wilson during the
fourth quarter with a focus on expanding the surface sampling footprint and
locate all nearby hot springs and water wells for potential sampling.
Pennsylvania Brines
The Company maintains its position within the Pennsylvania brine space and
monitoring activity and emerging research on lithium brines in this region of
the USA.
Texas Brines
The Company closely follows progress in eastern Texas and Southwest Arkansas
where numerous companies are developing and advancing DLE research and lithium
extraction pilot plants. The Company is also encouraged by the scientific
community illuminating the importance of lithium content and future
contribution to expanding the USA's emerging EV presence on the world's
stage.
Financial Review
During the six-month period ended 31 August 2024, the Company recorded a
profit for the period of US$ 1,176,472 (period ended 31 August 2023: loss of
US$ 2,229,852). The profit recognised during the period is a result of the
receipt of the final royalty payment from LRC, with the amount being
recognised as a gain on sale in profit and loss. As at period end, cash and
cash deposit balances stood at US$ 1,114,593 (29 February 2024: US$
1,664,662), capitalised deferred mining, exploration, licence and permit costs
stood at US$ 15,365,484 (29 February 2024: US$ 13,807,158), and total assets
were US$ 16,878,549 at 31 August 2024 (29 February 2024: US$ 15,848,063).
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. Bradda Head's 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 leadrship of the Chair, will
monitor risks facing the Company.
The Board of Bradda Head is committed to best practice in corporate governance
throughout the Company. The Directors have agreed to comply with the
provisions of the Quoted Companies Alliance ("QCA") Corporate Governance Code
for Small and Mid-Size Quoted Companies (2018) to the extent which is
appropriate to its nature and scale of operations. Details of the Company's
compliance with the QCA code can be found in the audited financial statements
for the year ended 29 Februayr 2024.
Corporate
Post period end, the Company commenced the process of voluntarily delisting
from the TSX-V, with the delisting completing on 24 October 2024. Bradda Head
determined to voluntarily delist from the TSX-V on the basis that the costs of
maintaining the TSX-V listing exceed the benefits, given the low trading
volumes of the Bradda Head ordinary shares on the TSX-V. The delisting will
not affect Bradda Head's listing on AIM and its ordinary shares will continue
to be listed on AIM under the symbol "BHL".
Strategy and Outlook
Lithium and the production of EV's continue to be a global story as China is
emerging as a significant producer of EV cars and Tesla is aggressively
marketing their presence as a world leader in the industry. The Biden
Administration will be succedded by the incoming Trump Administration early
2025 which calls into question how the EV market and specifically the
development of lithium in the USA will be administered. Even though Trump will
have control of the House and Senate, up to 92% of the IRA investments
directly impact "Republican-Run Red States" such as Texas and Arkansas, thus,
he could meet resistance in overturning IRA incentives or changing the law.
However, Trump has voiced his support for domestic mining, which indirectly
contributes to the IRA and elevates the mining industry as a whole. The new
alliance between Elon Musk and Donald Trump should be viewed as a positive
towards the advancement of EV development in the US and abroad, although no
direct statements have been made to support the relationship. The longer term
effects will be better known once Trump starts his second term in 2025.
Rio Tinto is "all in" on lithium with the acquisition of Arcadium, a major
lithium producer with operations across the world, most in Argentina. The
markets reacted positively with the news, providing a boost in sentiment. Many
lithium producers and explorers saw an immediate boost in share prices
following the announcement, essentially validating the long term lithium
outlook.
While the lithium prices have bottomed and incurred pressure on both explorers
and suppliers, the demand for electrification across all industries has not
diminished and steady growth will resume. This is also a time for M&A,
which should filter-out lower quality projects and companies without capital,
which places Bradda Head in a key position as we have conserved our treasury
by trimming back expenditures while maintaining a strong and experienced team.
John 'Ian' Stalker
Chair
15 November 2024
Condensed Interim Consolidated Statement of Comprehensive Income
for the period ended 31 August 2024
Six-month period ended 31 August 2024 Six-month period ended 31 August 2023
(unaudited) (unaudited)
Notes US$ US$
Expenses
General and administrative 2 (1,198,521) (2,593,928)
Share based payment write-back/(expense) 10 103,539 (180,622)
Foreign exchange gain/(loss) (5,978) 195,791
─────── ───────
Operating loss (1,100,960) (2,578,759)
Other income
Gain on sale 11 2,974,938 -
Other income 230,000
Warrant fair value re-measurement - 210,061
Unrealised gain/(loss) on investment 61,142 47,974
Finance income 11,352 90,872
─────── ───────
Profit/(loss) before income tax 2,176,472 (2,229,852)
Income tax expense - -
─────── ───────
Profit/(loss)for the period 2,176,472 (2,229,852)
═══════ ═══════
Other comprehensive income - foreign currency translation reserve
- -
─────── ───────
Total comprehensive profit/(loss) for the period 2,176,472 (2,229,852)
═══════ ═══════
Basic profit/(loss) per share (US cents) 12 0.30 (0.57)
Diluted profit/(loss) per share (US cents) 12 0.27 (0.57)
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 2024
Notes 31 August 2024 28 February 2024
(unaudited) (audited)
US$ US$
Non-Current assets
Deferred mining and exploration costs 3 12,252,049 11,025,423
Exploration permits and licences 4 3,113,435 2,781,735
Plant and equipment 8 51,574 78,972
Advances and deposits 6 110,412 106,812
Investment 128,332 67,191
─────── ───────
Total non-current assets 15,655,802 14,060,133
─────── ───────
Current assets
Cash and cash equivalents 1,114,593 1,664,662
Trade and other receivables 6 1,108,154 123,268
─────── ───────
Total current assets 2,222,747 1,787,930
─────── ───────
Total assets 17,878,549 15,848,063
═══════ ═══════
Equity
Share premium 9 30,616,373 30,616,373
Retained deficit (12,881,736) (14,954,669)
─────── ───────
Total equity 17,734,637 15,661,704
─────── ═══════
Current liabilities
Trade and other payables 7 143,912 186,359
─────── ───────
Total current liabilities 143,912 186,359
─────── ───────
Total equity and liabilities 17,878,549 15,848,063
═══════ ═══════
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 15
November 2024 and were signed on their behalf by:
Denham
Eke
Director
Condensed Interim Consolidated Statement of Changes in Equity
for the period ended 31 August 2024
Share premium Retained deficit Total
US$ US$ US$
Balance at 1 March 2024 (audited) 30,616,373 (14,954,669) 15,661,704
Total comprehensive loss for the period
Profit/(loss) for the period - 2,176,472 2,176,472
─────── ─────── ───────
Total comprehensive loss for the period - 2,176,472 2,176,472
Transactions with owners of the Company
Equity settled share-based payments (note 10) - (103,539) (103,539)
─────── ─────── ───────
Total transactions with owners of the Company - (103,539) (103,539)
─────── ─────── ───────
Balance at 31 August 2024 (unaudited) 30,616,373 (12,881,736) 17,734,637
═══════ ═══════ ═══════
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 2024 (continued)
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 Cash Flows
for the period ended 31 August 2024
Six-month period ended 31 August 2024 Six-month period ended 31 August 2023
Notes (unaudited) (unaudited)
US$ US$
Cash flows from operating activities
Profit/(loss) before income tax 2,176,472 (2,229,852)
Adjusted for non-cash and non-operating items:
Depreciation 8 27,398 24,620
Unrealised fair value gain on investment (61,142) (47,974)
Equity settled share based payments expense 10 (103,539) 180,622
Warrant fair value re-measurement - (210,061)
Cash interest income (11,352) (90,872)
─────── ───────
2,027,837 (2,373,517)
Change in trade and other receivables 40,765 57,525
Change in trade and other payables (1,068,097) (471,756)
─────── ───────
Net cash flows used by operating activities 1,000,505 (2,787,748)
Cash flows from investing activities
Amounts paid for deferred mining and exploration costs 3 (1,226,626) (1,701,028)
Amounts paid for licences and permits 4 (331,700) (605,839)
Cash (paid)/received000 for bonding deposit (3,600) 237,954
Equipment purchased 8 - (50,000)
─────── ───────
Net cash flows used by investing activities (1,561,926) (2,118,913)
Cash flows from financing activities
Cash interest income 11,352 90,872
─────── ───────
Net cash flows from financing activities 11,352 90,872
─────── ───────
Increase/(decrease) in cash and cash equivalents (550,069) (4,815,789)
Cash and cash equivalents at beginning of period 1,664,662 7,746,519
Effect of foreign exchange on cash balances - -
─────── ───────
Cash and cash equivalents at end of period 1,114,593 2,930,730
═══════ ═══════
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 2024 ("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 2024, which is available on the
Group's website: www.braddaheadltd.com (http://www.braddaheadltd.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 2024.
Going concern
The unaudited interim financial statements have been prepared on a going
concern basis, taking into consideration the level of cash held by the
Company. The Directors have a reasonable expectation that the Company will
have adequate resources for its continuing existence and projected activities
for the foreseeable future, and for these reasons, continue to adopt the going
concern basis in preparing the financial statements for the six-month period
ended 31 August 2024.
2 General and administrative
The Group's general and administrative expenses include the following:
Six-month period ended 31 August 2024 Six-month period ended 31 August 2023
(unaudited) (unaudited)
US$ US$
Auditors' fees 39,200 16,440
Directors and management fees and salaries 231,983 291,157
Legal and accounting 28,090 201,584
Contractor costs 275,960 1,213,978
Professional and marketing costs 169,381 404,552
Other administrative costs 453,907 466,217
─────── ───────
Total 1,198,521 2,593,928
═══════ ═══════
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 2023 (audited) 7,461,851
───────
Capitalised during the year 3,668,845
Disposal under royalty agreement * (105,273)
──────────
At 29 February 2024 11,025,423
──────────
Capitalised during the period 1,251,365
Disposal under royalty agreement * (24,739)
───────
At 31 August 2024 (unaudited) 12,252,049
═══════
Cost and net book value
At 31 August 2024 (unaudited) 12,252,049
At 29 February 2024 (audited) 11,025,423
═══════
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 2024. 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 2024, 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 2023 (audited) 2,112,415
Capitalised during the year 693,920
Disposal under royalty agreement * (24,600)
──────────
At 29 February 2024 2,781,735
──────────
Capitalised during the period 332,023
Disposal under royalty agreement * (323)
───────
At 31 August 2024 (unaudited) 3,113,435
═══════
Cost and net book value
At 31 August 2024 (unaudited) 3,113,435
At 29 February 2024 (audited) 2,781,735
═══════
The Group assessed the carrying amount of the licences and permits held for
impairment as at 31 August 2024. 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 2024, an impairment charge of US$ Nil was
recognised as a result of project licences and permits that were not renewed.
5 Investment in subsidiary undertakings
As at 31 August 2024 and 29 February 2024, 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
The condensed interim consolidated financial statements include the results of
the subsidiaries for the full interim period from 1 March 2024 to 31 August
2024, and up to the date that control ceases.
6 Trade and other receivables and advances and deposits
Non-current
31 August 2024 28 February 2024
(unaudited) (audited)
US$ US$
Advances and deposits 110,412 106,812
═══════ ═══════
Current
US$ US$
Prepayments 108,154 123,268
Advances and deposits - -
Royalty funds receivable 1,000,000 -
─────── ───────
1,108,154 123,268
═══════ ═══════
7 Trade and other payables
31 August 2024 28 February 2024
(unaudited) (audited)
US$ US$
Trade payables 137,345 161,648
Accrued expenses and other payables 6,567 24,711
─────── ──────
143,912 186,359
═══════ ═══════
8 Plant and equipment
Motor vehicle Other equipment Total
Cost US$ US$ US$
As at 28 February 2023 (audited) 114,390 - 114,390
Additions during the period - 50,000 50,000
────── ────── ──────
As at 29 February 2024 (audited) 114,390 50,000 164,390
Additions during the period - - -
────── ────── ──────
As at 31 August 2024 (unaudited) 114,390 50,000 164,390
══════ ══════ ══════
Motor vehicle Other equipment Total
Accumulated depreciation US$ US$ US$
As at 28 February 2023 (audited) (34,788) - (34,788)
Depreciation charge for the period (38,130) (12,500) (50,630)
────── ────── ──────
As at 29 February 2024 (audited) (72,918) (12,500) (85,418)
Charge for the period (19,065) (8,333) (27,398)
────── ────── ──────
As at 31 August 2024 (unaudited) (91,983) (20,833) (112,816)
══════ ══════ ══════
Carrying amount
As at 31 August 2024 (unaudited) 22,407 29,167 51,574
As at 28 February 2024 (audited) 41,472 37,500 78,972
══════ ══════ ══════
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 29 February 2024 (audited) and at 31 August 2024 (unaudited) 390,609,439 - 30,616,373
═══════ ═══════ ═══════
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 2024 (audited) Number Issued Number Lapsed/ cancelled/expired Number Exercised Number at 31 August 2024 (unaudited) Fair value
Date in years Price
Options US$
Directors and Participants April 2018 5 US$ 0.15668 146,052 - - - 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 3,000,000 - - - 3,000,000 314,962
Directors and Participants April 2022 5 £0.18 7,725,000 - (725,000) - 7,000,000 1,000,825
Directors and Participants December 2022 5 £0.105 1,000,000 - - - 1,000,000 273,727
Directors and Participants April 2023 5 £0.06 4,250,000 - (400,000) - 3,850,000 165,570
Directors and Participants February 2024 5 £0.00867 2,850,000 - - - 2,850,000 71,231
─────── ─────── ─────── ─────── ─────── ───────
36,971,052 - (1,125,000) - 35,846,052 2,960,899
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) - - -
Shareholder warrants December 2021 2 £0.0885 1,185,687 - (1,185,687) - - -
Supplier warrants April 2022 2 £0.1350 3,244,331 - (3,244,331) - - -
─────── ─────── ─────── ─────── ─────── ───────
45,473,797 - (7,809,563) - 37,664,234 3,085,381
═══════ ═══════ ═══════ ═══════ ═══════ ═══════
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 2024 Six-month period ended 31 August 2023
(unaudited) (unaudited)
US$ US$
Share based payment write-back/(expense) 103,539 (180,622)
═══════ ═══════
During the period ended 31 August 2024, no new options were granted.
During the period ended 31 August 2024, total unexercised supplier warrants of
6,684,563 expired.
11 Gain on sale
On 21 December 2021, the Company completed a royalty agreement with the
Lithium Royalty Corporation ("LRC"). Key terms of the royalty agreement are:
- LRC has been granted a 2% gross overriding royalty (GOR) over Bradda
Head's sedimentary lithium claims in Arizona (Wikieup project
and Basin project) leaving the Company's pegmatite and brine projects
unencumbered;
- LRC has paid to the Company upon closing the sum of US$2.5 million
for granting of the Royalty;
- LRC has paid 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.
In addition, LRC has also subscribed for US$2 million of new ordinary shares
(along with US$0.5 million via a further subscription from a LRC director)
alongside the royalty closing. See note 14 for details.
During the period, the Company hit the final milestone of a 2.5 million tonne
lithium carbonate equivalent (LCE) Mineral Resource with a minimum lithium
grade of 800 parts per million (ppm), thereby triggering the final royalty
payment from LRC. This has been recognised as a gain on sale in the
consolidated statement of comprehensive income.
Reconciliation of gain on sale
Year ended 29 February 2024
US$
Initial proceeds received from royalty receipt 3,000,000
Less: Deferred mine exploration costs disposal (note 7) (24,739)
Less: Exploration permits and licences disposal (note 8) (323)
──────
2,974,938
══════
12 Basic and diluted loss per share
The calculation of the basic earnings per share is based on the earnings
attributable to ordinary shareholders divided by the weighted average number
of shares in issue during the period.
The calculation of diluted earnings per share is based on the basic earnings
per share, adjusted to allow for the issue of shares, on the assumed
conversion of all dilutive share options.
Six-month period ended 31 August 2024 Six-month period ended 31 August 2023
(unaudited) (unaudited)
US$ US$
Profit/(loss) for the period 1,176,472 (2,229,852)
Weighted average number of ordinary shares in issue 390,609,439 390,609,439
Dilutive effect of shares to be issued (Note 10) 37,664,234 -
Diluted number of ordinary shares 428,273,673 390,609,439
Basic earnings/(loss) per share (pence) 0.30 (0.57)
Diluted earnings/(loss) per share (pence) 0.27 (0.57)
13 Related party transactions and balances
Edgewater Associates Limited ("Edgewater")
During the six-month period ended 31 August 2024, 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$ 42,566 (six-month
period to 31 August 2023: US$ 96,724), of which US$ 31,443 was prepaid as at
the period end (29 February 2024: US$ 11,560).
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$ 357,000 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
Post period end, the Company commenced the process of voluntarily delisting
from the TSX-V, with the delisting completing on 24 October 2024.
ENDS
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