REG - Bradda Head Lithium - Unaudited Results for 3 months ended 31 May 2024
24/07/2024 07:00
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RNS Number : 5455X Bradda Head Lithium Ltd 24 July 2024
24 July 2024
Bradda Head Lithium Ltd
("Bradda Head", "Bradda", or the "Company")
Unaudited Quarterly Results and MD&A for the three-month period ended 31
May 2024
Bradda Head Lithium Ltd (AIM: BHL, TSXV:BHLI), the North America-focused
lithium development group, is pleased to announce that it has today published
its unaudited financial results for the three-months ended 31 May 2024, 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
· Successfully completed a follow-up drill programme at its Basin
North lithium in clay project in Arizona, USA. A total of eight holes drilled,
with an average hole depth of 285 meters (934 feet) with a range of 231 to 387
meters (757 to 1,269 feet), with a total of 2,353 meters (7,720 feet) drilled;
· Thickest Upper Clay unit at 103 meters in the center of the drill
pattern discovered at hole BND24-19;
· Post period end on July 1, 2024, the Company announced a new MRE
at the Company's 100% owned Basin Project, with a total of 2.834 MT of LCE;
· As per the Gross Overriding Royalty Agreement with the Lithium
Royalty Company ("LRC"), the new contained LCE Tonnage surpassed the
contracted threshold of 2.5Mt and has enabled the Company to trigger the
payment of US$3.0 million from LRC to Bradda Head, with funds being received
on 8 July 2024;
· Received channel sampling results from its San Domingo program, which
included 5.00 meters of 2.33%, 4.10 meters of 2.81%, and 4.00 meters of 1.26%
Li2O at the White Ridge Target and 5.30 meters of 1.25% Li2O at Morning
Star.
Ian Stalker, Chairman of Bradda Head, commented:
"Bradda Head maintained maintained the Company's aggressive exploration
philosophy by drilling 2,353 meters at the Basin project with the intention of
expanding the 2023 MRE from 1.08MT LCE to over 2.5MT LCE. We successfully
completed eight core holes in strategic locations across Basin North and post
period end, the strategy was validated after we released our updated MRE at
Basin, surpassing the goal of 2.5MT LCE with an updated MRE of 2.834MT,
triggering the final royalty payment from LRC of US$ 3m.
Further exploration on our pegmatite project also kicked-off with excellent
channel sample results from our White Ridge, Morning Star, and Midnight Owl
targets. The results highlight the surface mineralization that can be
leveraged into potential open cut mining in the future and also link-up to
nearby drill hole intercept, creating excellent opportunities once a robust
resource is potentially defined.
We continue dialog with third parties and examination of our oil brine
projects in Pennsylvania and Texas, along with the Nevada brine projects to
align with expanding DLE initiatives across the industry. The Company
maintained a tight crew to maintain costs across the team whilst running a
well-oiled exploration and expansion drilling program."
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 Chairman
Denham Eke, Finance Director
Beaumont Cornish (Nomad) +44 (0) 2076 283 396
James Biddle / Roland Cornish
Panmure Gordon (Joint Broker) +44 (0) 2078 862 500
Hugh Rich
Shard Capital (Joint Broker) +44 (0) 2071 869 927
Damon Heath / Isabella Pierre
Red Cloud (North American Broker) +1 416 803 3562
Joe Fars
Tavistock (Financial PR) + 44 20 7920 3150
Nick Elwes / Josephine Clerkint 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, Basin North, and Basin West targets) and the Wikieup
Project. The Basin East Project has a Measured Mineral Resource of 20 million
tonnes consisting of 929ppm lithium for 99kt LCE, an Indicated Mineral
Resource of 122 million tonnes at an average grade of 860 ppm lithium for
560 kt LCE and an Inferred Mineral Resource of 506 million tonnes at an
average grade of 808 ppm lithium for a total of 2,175 kt 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, and on the TSX Venture Exchange with
a ticker of BHLI.
Forward-Looking Statements
Neither TSX Venture Exchange nor its Regulation Services Provider (as that
term is defined in policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release. This News Release
includes certain "forward-looking statements" which are not comprised of
historical facts. Forward-looking statements include estimates and statements
that describe the Company's future plans, objectives or goals, including words
to the effect that the Company or management expects a stated condition or
result to occur. Forward-looking statements may be identified by such terms as
"believes", "anticipates", "intends to", "expects", "estimates", "may",
"could", "would", "will", or "plan". Since forward-looking statements are
based on assumptions and address future events and conditions, by their very
nature they involve inherent risks and uncertainties. Although these
statements are based on information currently available to the Company, the
Company provides no assurance that actual results will meet management's
expectations. Risks, uncertainties, and other factors involved with
forward-looking information could cause actual events, results, performance,
prospects, and opportunities to differ materially from those expressed or
implied by such forward-looking information. Forward looking information in
this news release includes, but is not limited to, following: The Company's
objectives, goals, or future plans. Factors that could cause actual results to
differ materially from such forward-looking information include, but are not
limited to: failure to identify mineral resources; failure to convert
estimated mineral resources to reserves; delays in obtaining or failures to
obtain required regulatory, governmental, environmental or other project
approvals; political risks; future operating and capital costs, timelines,
permit timelines, the market and future price of and demand for lithium, and
the ongoing ability to work cooperatively with stakeholders, including the
local levels of government; uncertainties relating to the availability and
costs of financing needed in the future; changes in equity markets, inflation,
changes in exchange rates, fluctuations in commodity prices; delays in the
development of projects, capital and operating costs varying significantly
from estimates; an inability to predict and counteract the effects of COVID-19
on the business of the Company, including but not limited to the effects of
COVID-19 on the price of commodities, capital market conditions, restriction
on labour and international travel and supply chains; and the other risks
involved in the mineral exploration and development industry, and those risks
set out in the Company's public documents filed on SEDARplus. Although the
Company believes that the assumptions and factors used in preparing the
forward-looking information in this news release are reasonable, undue
reliance should not be placed on such information, which only applies as of
the date of this news release, and no assurance can be given that such events
will occur in the disclosed time frames or at all. The Company disclaims any
intention or obligation to update or revise any forward-looking information,
whether as a result of new information, future events or otherwise, other than
as required by law.
Beaumont Cornish Limited ("Beaumont Cornish") is the Company's Nominated
Adviser and is authorised and regulated by the FCA. Beaumont Cornish's
responsibilities as the Company's Nominated Adviser, including a
responsibility to advise and guide the Company on its responsibilities under
the AIM Rules for Companies and AIM Rules for Nominated Advisers, are owed
solely to the London Stock Exchange. Beaumont Cornish is not acting for and
will not be responsible to any other persons for providing protections
afforded to customers of Beaumont Cornish nor for advising them in relation to
the proposed arrangements described in this announcement or any matter
referred to in it.
Bradda Head Lithium Limited
Unaudited Condensed Consolidated Quarterly Financial Statements
For the three-month period ended May 31, 2024
Condensed Consolidated Statement of Comprehensive Income
for the three-month period ended May 31, 2024
Three-month period ended May 31, 2024 Three-month period ended May 31, 2023
(unaudited) (unaudited)
Notes US$ US$
Expenses
General and administrative 2 (595,622) (1,258,841)
Share based payment and warrant expense 10 - (180,622)
Foreign exchange gain/(loss) (1,005) 136,475
──────── ────────
Operating loss (596,627) (1,302,988)
Other income
Warrant fair value re-measurement 11 - 146,585
Unrealised gain on Investment at fair value through profit or loss 20,034 13,109
──────── ────────
(Loss)/profit before finance income (576,593) (1,143,294)
Finance income 7,185 59,102
──────── ────────
(Loss)/profit before income tax (569,408) (1,084,192)
Income tax expense - -
──────── ────────
Total comprehensive (loss)/profit for the period (569,408) (1,084,192)
══════ ══════
Basic and diluted (loss)/profit per share (US cents) 12 (0.146) (0.278)
The accompanying notes are an integral part of these consolidated quarterly
financial statements.
Condensed Consolidated Statement of Financial Position
as at May 31, 2024
Notes May 31, 2024 February 28, 2024
(unaudited) (audited)
US$ US$
Non-Current assets
Deferred mining and exploration costs 3 12,207,531 11,025,423
Exploration permits and licences 4 2,791,558 2,781,735
Plant and equipment 8 65,273 78,972
Advances and deposits 6 106,811 106,812
Investment at fair value through profit or loss 87,225 67,191
─────── ───────
Total non-current assets 15,258,398 14,060,133
─────── ───────
Current assets
Cash and cash equivalents 534,437 1,664,662
Trade and other receivables 6 110,706 123,268
─────── ───────
Total current assets 645,143 1,787,930
─────── ───────
Total assets 15,903,541 15,848,063
═══════ ═══════
Equity
Share premium 9 30,616,373 30,616,373
Retained deficit (15,524,077) (14,954,669)
─────── ───────
Total equity 15,092,296 15,661,704
─────── ═══════
Current liabilities
Trade and other payables 7 811,245 186,359
─────── ───────
Total current liabilities 811,245 186,359
─────── ───────
Total equity and liabilities 15,903,541 15,848,063
═══════ ═══════
The accompanying notes are an integral part of these consolidated quarterly
financial statements.
These condensed quarterly consolidated financial statements were approved by
the Board of Directors on July 23, 2024 and were signed on their behalf by:
Denham
Eke
Director
Condensed Consolidated Statement of Changes in Equity
for the three-month period ended May 31, 2024
Share premium Retained deficit Total
US$ US$ US$
Balance at March 1, 2024 (audited) 30,616,373 (14,954,669) 15,661,704
Total comprehensive loss for the period
Loss for the period - (569,408) (569,408)
────── ─────── ───────
Total comprehensive loss for the period - (569,408) (569,408)
────── ─────── ──────
Quarter ended May 31, 2024 (unaudited) 30,616,373 (15,524,077) 15,092,296
═══════ ═══════ ═══════
The accompanying notes are an integral part of these consolidated quarterly
financial statements.
Condensed Consolidated Statement of Changes in Equity
for the three-month period ended May 31, 2024 (continued)
Share premium Retained deficit Total
US$ US$ US$
Balance at March 1, 2023 (audited) 30,616,373 (13,631,433) 16,984,940
Total comprehensive loss for the period
Loss for the period - (1,084,192) (1,084,192)
────── ─────── ───────
Total comprehensive loss for the period - (1,084,192) (1,084,192)
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
────── ─────── ──────
Quarter ended May 31, 2023 (unaudited) 30,616,373 (14,535,003) 16,081,370
═══════ ═══════ ═══════
The accompanying notes are an integral part of these consolidated quarterly
financial statements.
Condensed Consolidated Statement of Cash Flows
for the three-month period ended May 31, 2024
Three-month period ended May 31, 2024 Three-month period ended May 31, 2023
Notes (unaudited) (unaudited)
US$ US$
Cash flows from operating activities
Loss before income tax (569,408) (1,084,192)
Adjusted for non-cash and non-operating items:
Depreciation 8 13,699 10,921
Unrealised (gain)/loss on investment (20,034) (13,109)
Interest income (7,185) (59,102)
Equity settled share based payments expense 10, 11 - 180,622
Warrant fair value re-measurement 11 - (146,585)
─────── ───────
(582,928) (1,111,445)
Change in trade and other receivables 38,212 47,727
Change in trade and other payables 599,237 (517,974)
─────── ───────
Net cash flows used by operating activities 54,521 (1,581,692)
Cash flows from investing activities
Amounts paid for deferred mining and exploration costs 3 (1,182,108) (948,445)
Amounts paid for licences and permits 4 (9,823) (280,294)
Equipment purchased 8 - (50,000)
Advances and deposits - cash returned - 53,250
─────── ───────
Net cash flows used by investing activities (1,191,931) (1,225,489)
Cash flows from financing activities
Interest income received 7,185 59,102
Bank deposits not considered cash and cash equivalents (net) - (3,905,582)
─────── ───────
Net cash flows from financing activities 7,185 (3,846,480)
─────── ───────
Decrease in cash and cash equivalents (1,130,225) (6,653,661)
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 534,437 1,092,858
═══════ ═══════
The accompanying notes are an integral part of these consolidated quarterly
financial statements.
1 Reporting Entity and basis of preparation
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 quarterly 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 February
28, 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 February 28, 2024, which is available on the
Group's website: www.braddheadltd.com (http://www.braddheadltd.com) , and on
SEDARplus (www.sedarplus.ca/landingpage (http://www.sedarplus.ca/landingpage)
). These unaudited condensed consolidated quarterly financial statements
should be read in conjunction with the audited Consolidated Financial
Statements for the year ended February 28, 2024.
2 General and administrative
The Group's general and administrative expenses include the following:
Three-month period ended May 31, 2024 Three-month period ended May 31, 2023
(unaudited) (unaudited)
US$ US$
Auditors' fees 19,600 19,600
Directors and management fees and salaries 114,675 137,541
Legal and accounting 12,414 83,613
Contractor costs 164,278 551,868
Professional and marketing costs 66,456 204,203
Other administrative costs 218,199 262,016
─────── ───────
Total 595,622 1,258,841
═══════ ═══════
3 Deferred mine exploration costs
The schedule below details the exploration costs capitalised to date:
Total
US$
Cost and net book value
At February 28, 2023 (audited) 7,461,851
───────
Capitalised during the year 3,668,845
Disposal under royalty agreement (105,273)
──────────
At February 28, 2024 (audited) 11,025,423
──────────
Capitalised during the period 1,182,108
───────
At May 31, 2024 (unaudited) 12,207,531
═══════
Cost and net book value
At May 31, 2024 (unaudited) 12,207,531
At February 28, 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 May 31, 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 February 28, 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 February 28, 2023 (audited) 2,112,415
Capitalised during the year 693,920
Disposal under royalty agreement (24,600)
──────────
At February 28, 2024 (audited) 2,781,735
Capitalised during the period 9,823
───────
At May 31, 2024 (unaudited) 2,791,558
═══════
Cost and net book value
At May 31, 2024 (unaudited) 2,791,558
At February 28, 2024 (audited) 2,781,735
═══════
The Group assessed the carrying amount of the licences and permits held for
impairment as at May 31, 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 February 28, 2024, an impairment charge of US$ Nil was
recognised.
5 Investment in subsidiary undertakings
As at May 31, 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 consolidated quarterly financial statements include the results
of the subsidiaries for the full quarterly period from March 1, 2024 to May
31, 2024, and up to the date that control ceases.
6 Trade and other receivables and advances and deposits
Non-current
May 31, 2024 February 28, 2024
(unaudited) (audited)
US$ US$
Advances and deposits 106,811 106,812
══════ ══════
7 Trade and other payables
May 31, 2024 February 28, 2024
(unaudited) (audited)
US$ US$
Trade payables 805,215 161,648
Accrued expenses and other payables 6,030 24,711
────── ──────
811,245 186,359
══════ ══════
8 Plant and equipment
Motor vehicle Other equipment Total
Cost US$ US$ US$
As at March 1, 2023 (audited) 114,390 - 114,390
Additions during the year - 50,000 50,000
────── ────── ──────
As at February 28, 2024 (audited) 114,390 50,000 164,390
Additions during the period - - -
────── ────── ──────
As at May 31, 2024 (unaudited) 114,390 50,000 164,390
══════ ══════ ══════
8 Plant and equipment (continued)
Motor vehicle Other equipment Total
Accumulated depreciation US$ US$ US$
As at March 1, 2024 (audited) (34,788) - (34,788)
Depreciation charge for the year (38,130) (12,500) (50,630)
────── ────── ──────
As at February 28, 2024 (audited) (72,918) (12,500) (85,418)
Depreciation charge for the period (9,532) (4,167) (13,699)
────── ────── ──────
As at May 31, 2024 (unaudited) (82,450) (16,667) (99,117)
══════ ══════ ══════
Carrying amount
As at May 31, 2024 (unaudited) 31,940 33,333 65,273
As at February 28, 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 February 28, 2023 and February 28, 2024 (audited) 390,609,439 - 30,616,373
═══════ ═══════ ═══════
At May 31, 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 March 1, 2024 (audited) Number Issued Number Lapsed/ cancelled/expired Number Exercised 31 May 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 8,375,000 - - - 8,375,000 1,089,312
Directors and Participants December 2022 5 £0.105 1,000,000 - - - 1,000,000 273,727
Directors and Participants April 2023 5 £0.03025 4,500,000 - - - 4,500,000 180,622
Directors and Participants February 2024 5 £0.00867 2,850,000 - - - 2,850,000 262,833
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) - - -
─────── ─────── ─────── ─────── ─────── ───────
46,373,797 - (6,684,563) - 39,689,234 3,380,522
═══════ ═══════ ═══════ ═══════ ═══════ ═══════
10 Equity settled share based payments (continued)
The amount expensed in the income statement has been calculated by reference
to the fair value at the grant date of the equity instrument and the estimated
number of equity instruments to vest after the vesting period.
Three-month period ended May 31, 2024 Three-month period ended May 31, 2023
(unaudited) (unaudited)
US$ US$
Share based payments charge - 180,622
═══════ ═══════
During the period ended May 31, 2024, no options were granted.
During the period ended May 31, 2024, total unexercised supplier warrants of
6,684,563 expired.
11 Warrants
As part of the fundraise completed during April 2022, all participating
shareholders received a warrant on 1:1 basis for shares acquired. As a result,
73,195,560 warrants have been issued. All un-exercised warrants expire after a
period of 2 years from grant date. During April 2024, all unexercised warrants
issued in April 2022 expired.
12 Basic and diluted loss per share
The calculation of the basic loss per share is based on the earnings
attributable to ordinary shareholders divided by the weighted average number
of shares in issue during the year.
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.
An adjustment for the dilutive effect of share options in the current year 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 year.
May 31, 2024 May 31, 2023
(unaudited) (unaudited)
US$ US$
Loss for the period (569,408) (1,084,192)
No. No.
Weighted average number of ordinary shares in issue 390,609,439 342,690,043
Dilutive element of share options if exercised (note 10) 37,871,052 37,831,304
Diluted number of ordinary shares 428,480,491 428,440,743
Basic loss per share (cents) (0.146) (0.278)
Diluted loss per share (cents) (0.146) (0.278)
For the period ended May 31, 2024, the earnings applied are the same for both
basic and diluted earnings calculations per share as there are no dilutive
effects to be applied.
13 Related party transactions and balances
Edgewater Associates Limited ("Edgewater")
During the three-month period ended May 31, 2024, Directors' and Officers'
insurance was obtained on an arms-length basis through Edgewater, which is a
100% subsidiary of Manx Financial Group ("MFG"). James Mellon and Denham Eke
are Directors of both the Company and MFG.
During the period, the premium payable on the policy was US$ Nil (year ended
February 28, 2024: US$ 43,061). A total of US$ 794 was prepaid as at the
period end (February 28, 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, equating to
approximately US$ 434,704 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 1 July 2024, the Company announced a new Mineral Resource Estimate ("MRE")
at the Company's 100% owned Basin Project in Arizona, USA. The new MRE
consists of 99kt of of lithium carbonate equivalent ("LCE") at an average
grade of 929 ppm lithium in Measured classification, 560kt of LCE at 860ppm Li
in the Indicated classification; and 2,175kt of LCE at 808ppm Li in the
Inferred classification following the completion of drilling, reception and
analysis of geochemical results, and new modeling of the Basin project. As per
the Gross Overriding Royalty Agreement ("Royalty Agreement") with the Lithium
Royalty Company ("LRC"), the new contained LCE Tonnage surpassed the
contracted threshold of 2.5Mt and has enabled the Company to trigger the
payment of US$3.0 million from LRC to Bradda Head, with funds being received
on 8 July 2024.
Bradda Head Lithium Limited
Management discussion and analysis for the three-month period ended May 31,
2024
This management's discussion and analysis ("MD&A") reports on the
operating results and financial condition of the Company for the three-month
ended May 31, 2024, and is prepared as of July 23, 2024. The MD&A should
be read in conjunction with Bradda Head Lithium Limited's (the "Company" or
"Bradda Head") audited consolidated financial statements for the year ended
February 28, 2024, 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
On March 12, 2024, the Company commenced drilling at its Basin North lithium
in clay project in Arizona, USA. The six-hole program was designed
to significantly expand the Company's existing lithium in clay Mineral
Resource Estimate ("MRE").
Program Summary:
· Six-hole core drilling program of approximately 8,800 feet
(2,680m) planned;
· Program anticipated to expand LCE from 1.085MT to >2.5MT;
· Step-out drill holes at 500 to 700m spacing to maintain Inferred
category of MRE;
· One hole will be drilled into Precambrian basement in center of
gravity low;
· Gravity low may represent extensively thick clays both in the
Upper, Lower, and Basal Red-Beds; and
· Holes will test Lower Clay to expand tonnage potential and
thicker sequence correlative with gravity low which also has the potential for
exceptional lithium grades
The drill program was successfully completed on May 9, 2024, with two
additional holes drilled for a total of eight holes drilled. Average hole
depth of 285 meters (934 feet) with a range of 231 to 387 meters (757 to 1,269
feet) in a total of 2,353 meters (7,720 feet) drilled. This was less than the
2,682 meters (8,800 feet) initially envisaged as a result of finding shallower
clay targets than anticipated.
Drilling highlights include:
· Further resource increase anticipated following the definition of
a window 900 meters wide (east-west) by 1,780 meters in length (north-south),
consistent continuous lithium-bearing Upper and Lower Clay units, it has the
potential to continue expanding, being wide open in all directions;
· Thickest Upper Clay unit at 103 meters in the center of the drill
pattern discovered at hole BND24-19;
· Two holes were drilled on State Lands and designed to capture
lower clay; substantially increasing the lower clay reach from Basin East to
the northern end of Basin North, a linear distance of 3.3km;
· Program was successfully completed under budget and without any
environmental or safety incidents;
· Completion of this program has produced promising visual results,
Bradda Head's geology team are now able to recognise that the clays contained
strong characteristics of high lithium values, and are greatly encouraged by
the clays seen in the past eight drill holes; and
· The Qualified Person (QP) has made a site visit and was provided
with all the geological and technical information, and the geologic block
model has been revised to reflect the new intervals from drill hole
lithologies and peripheral surficial geology.
Post period end on July 1, 2024, the Company announced a new MRE at the
Company's 100% owned Basin Project in Arizona, USA. The new MRE consists of
99kt of lithium carbonate equivalent ("LCE") at an average grade of 929 ppm
lithium in Measured classification, 560kt of LCE at 860ppm Li in the Indicated
classification; and 2,175kt of LCE at 808ppm Li in the Inferred classification
following the completion of drilling, reception and analysis of geochemical
results, and new modelling of the Basin project. As per the Gross Overriding
Royalty Agreement ("Royalty Agreement") with the Lithium Royalty Company
("LRC"), the new contained LCE Tonnage surpassed the contracted threshold
of 2.5Mt and has enabled the Company to trigger the payment of US$3.0
million from LRC to Bradda Head, with the funds being received on 8 July
2024.
Basin Project Permitting Update
A Basin West drilling permit kick-off meeting was also held with the BLM in
April and organised to initiate the NEPA (National Environmental Policy Act)
process for development of the EA (Environmental Assessment) Report that, once
approved, will allow the Company to commence drilling. This process follows
the BLM's letter of EPO (Exploration Plan of Operations) completeness which
the Company received earlier this year and marks an important step on
expanding our ability to extend exploration over the very promising Basin West
target.
Wikieup Project
No significant work has been undertaken on this project during the 3-month
period.
Arizona Pegmatite District
San Domingo Project
On April 8, 2024, the Company released results from its channel sampling
program. The results included 5.00 meters of 2.33%, 4.10 meters of 2.81%, and
4.00 meters of 1.26% Li2O at the White Ridge Target and 5.30 meters of 1.25%
Li2O at Morning Star. These and other surface samples collected were designed
to augment the Phase II, 2023 drilling program as well as determine that this
technique can and will be applied to future surface exploration programs
planned in Q3 of this year.
Highlights
· A total of 77 samples were collected from strategic targets
across the San Domingo project, with locations designed to supplement drill
holes that contain lithium (spodumene) mineralization, particularly
those that could result in mineable resources;
· Some locations were chosen as a result of newly exposed
spodumene bearing pegmatites at new drill sites;
· White Ridge channel samples correspond to drill hole
SD-DH23-072, confirming continuity of spodumene rich pegmatite, indicates
mineralization is open to the north and at depth;
· Channel samples at Morning Star drill site SD-DH23-090 cut,
5.30 meters at 1.25% Li2O, clearly connect and add confidence in continuity,
building on resource potential;
· The channel samples at Midnight Owl likely connect to drill
hole SD-DH23-049 which had an intercept of 6.35 meters @ 0.83% Li2O and 3.05
meters of 1.03% (see 11 Nov 2023 Press Release for details), a distance of 55
meters from surface; and
· The Company is capitalizing on surface lithium mineralization
exposures through channel sample techniques and by connecting to drill holes;
this continues to demonstrate open cut potential and in part, will drive the
next exploration program.
As at period end, the Company is diligently working on the next phase of
exploration at the 100% owned San Domingo pegmatite project. The team believe
that there is excellent potential to find new lithium bearing pegmatites given
the extensive size of the nearly 33 square kilometer property and limited
amount of ground coverage to date. In addition, to developing new targets,
there will be follow-up on last year's drill hole intercepts, as well as this
year's excellent channel sampling at Morning Star, White Ridge, and Midnight
Owl. The future plan will be to strategically place drill holes to test
channel sample mineralization and offset down-hole mineralization in order to
grow resource potential at all three targets.
Lithium Brine and Oil Brine Projects
Wilson Project
No field work has transpired over the last 3 months.
Eureka Project
No field work has transpired over the last 3 months.
Oil Brine Projects - Pennsylvania & Texas
Additional legal documents were filed in Pennsylvania to update various leases
and bring them up to date with the county.
A forgotten lease from 2018 in Texas was executed with another member of the
Cooner family to further lock-up our position on the 40-acre lease in Cass
County. All legal documents were signed by both Zenolith USA LLC and the
lessor, then filed with the county. The Company continues to track activity in
the area, notably exploration drilling by Standard Lithium and a newcomer
named Terravolt, a privately financed company. Both have significant tenure
and licenses in East Texas and within the Smackover Formation.
Corporate Highlights
On May 20, 2024, the Company announced that it entered into a settlement
agreement regarding the fraudulent payment made to an unidentified party, as
disclosed in the prior year accounts. Pursuant to the settlement agreement,
the Company has been partially reimbursed for the fraudulent funds transfer.
The partial settlement is consistent with Company's expectations at the time
of initiating enforcement proceedings with gross recovery of approximately 40%
of total misappropriated funds.
(b) Selected Financial Information
The following table sets forth selected financial information with respect to
the Company for the 3-month period ended May 31, 2024 and the year ended
February 28, 2024. 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 quarterly financial statements are
presented in US dollars and are prepared in accordance with IFRS, See "Summary
Financial Data" and "Currency Information".
Period ended May 31, 2024 Year ended February 28, 2024
(Audited) (Audited)
(US$) (US$)
Statement of Operations:
Total Operating Expenses (net of other income) (576,593) (1,143,294)
Net Finance income 7,185 59,102
Net Loss (569,408) (1,084,192)
Loss per Share (cents) (0.146) (0.278)
Balance Sheet Data:
Cash & cash equivalents, including cash deposits 534,437 1,664,662
Total Assets 15,903,541 15,848,063
Total Liabilities 811,245 186,359
Accumulated Deficit (15,524,077) (14,954,669)
Total Shareholder's Equity 15,092,296 15,661,704
MANAGEMENT DISCUSSION AND ANALYSIS: QUARTER ENDED MAY 31, 2024
(c) Introduction
(d) This Quarterly Management Discussion and Analysis (the "quarterly MD&A") should be read in conjunction with the audited financial statements of the Company for the year ended February 28, 2024, and related notes. This MD&A is made as of July 23, 2024.
(e) Results of Operations for the three-months ended May 31, 2024
The Company's net loss before and after tax for the three-month period to May
31, 2024 was US$ 569,408, compared to a loss of US$ 1,084,192 for the
comparative period ended May 31, 2023. The major expenses for the
three-month period ended May 31, 2024 were operational expenses incurred on
the Company's exploration projects, and are broken down in the respective
projects as follows:
Project Expensed Exploration Expenditure
Three-Month Period Ended May 31, 2024 Three-Month Period Ended May 31, 2023
(Unaudited) (Unaudited)
US$ US$
Basin Project 153,084 249,399
San Domingo Project - 286,782
Other projects 11,194 15,687
TOTAL 164,278 551,868
During this time period, the Company incurred and capitalised exploration
expenditures of US$ 1,191,930, compared to US$ 1,228,739 for the comparative
three-month period to May 31, 2024.
The capitalised exploration costs for the three-month period ended May 31,
2024 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
Three-Month Period Ended May 31, 2024 Three-Month Period Ended May 31, 2024 Three-Month Period Ended May 31, 2023 Three-Month Period Ended May 31, 2023
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
US$ US$ US$ US$
Basin Project 1,178,072 9,823 421,013 -
San Domingo Project 4,036 - 527,432 250,000
Other Project - - - 30,294
TOTAL 1,182,108 9,823 948,445 280,294
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 three-month period to May 31, 2024
totalled US$ 1,258,841, compared to US$ 1,258,841 for the comparative
three-month period to May 31, 2023. General and administrative expenses are
broken down as follows:
Project General and administrative expenditures
Three-Month Period Ended May 31, 2023 Three-Month Period Ended May 31, 2023
(Unaudited) (Unaudited)
US$ US$
Auditors' fees 19,600 19,600
Directors and management fees and salaries 114,675 137,541
Legal and accounting 12,414 83,613
Contractor costs 164,278 551,868
Professional and marketing costs 66,456 204,203
Other administrative costs 218,199 262,016
TOTAL 595,622 1,258,841
During the three-month period to May 31, 2024, 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 three-month period ended May 31, 2024, the Company had net cash
outflows of US$ 1,130,225, compared to outflows of US$ 6,653,661 during the
comparative three-month period to May 31, 2023. Net cash outflows for the
current 3-month period ended May 31, 2024, include return of cash amounts
placed on short term deposits, totalling US$ 1,000,135. The cashflows for the
two periods are shown below:
Three-Month Period Ended May 31, 2023 Three-Month Period Ended May 31, 2023
(Unaudited) (Unaudited)
US$ US$
Statement of cashflows
Cash flows from operating activities 54,521 (1,581,692)
Cash flows from investing activities (1,191,931) (1,225,489)
Cash flows from financing activities * 7,185 (3,846,480)
Net cash flows during the period (1,130,225) (6,653,661)
Cash balances at beginning of the period 1,664,662 7,746,519
Cash balances at the end of the period 534,437 1,092,858
* includes US$ 3,905,582 placed on short term deposit for the period ended May
31, 2023.
(g) Liquidity and Capital Resources
As at May 31, 2024, the Company had cash and cash equivalents (including short
term cash deposits) of US$ 534,437, and a working capital deficit of US$
166,102. As of February 28, 2024, the Company had cash and cash equivalents of
US$ 1,664,662, and a working capital surplus of US$ 1,601,571.
(h) Outstanding Share Data
As of May 31, 2024, the following securities were outstanding:
Shares 390,609,439
Warrants 8,502,745
Stock options 37,871,052
Fully diluted shares outstanding 436,983,236
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 three-month period ended May 31, 2024, Directors' and Officers'
insurance was obtained on an arms-length basis through Edgewater, which is a
100% subsidiary of Manx Financial Group ("MFG"). James Mellon and Denham Eke
are Directors of both the Company and MFG.
During the period, the premium payable on the policy was US$ Nil (year ended
February 28, 2024: US$ 43,061). A total of US$ 794 was prepaid as at the
period end (February 28, 2024: US$ 11,560).
(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 May 31, 2024, the Company had incurred capitalised exploration
expenditures, including capitalised licence and permit costs, of US$
14,999,089. 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.
ENDS
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