REG - Celsius Resources Ld - Half Year Report
17/03/2023 07:00
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RNS Number : 2805T Celsius Resources Limited 17 March 2023
17 March 2023
Celsius Resources Limited
("Celsius" or the "Company")
HALF-YEAR FINANCIAL REPORT
31 DECEMBER 2022
The Directors of Celsius announce the Company's half-year financial report for
the half year ended 31 December 2022.
Please see below extracts from the Company's full half-year report comprising
the:
Directors' Report
Statement of Profit or Loss and Other Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
A copy of the half-year report is available on the Company's website, at
https://celsiusresources.com (https://celsiusresources.com)
For further information contact:
Celsius Resources Limited
Peter Hume P: +61 8 9482 0500
E: info@celsiusresources.com.au (mailto:info@celsiusresources.com.au)
W: www.celsiusresources.com (http://www.celsiusresources.com)
Multiplier Media
Jon Cuthbert M: +61 402 075 707
E: jon.cuthbert@multiplier.com.au (mailto:jon.cuthbert@multiplier.com.au)
Beaumont Cornish Limited
(Nominated Adviser)
Roland Cornish/Felicity Geidt/Andrew Price +44 (0) 207 628 3396
SP Angel Corporate Finance LLP (Broker)
Ewan Leggat +44(0) 203 470 0470
DIRECTOR'S REPORT
Your Directors present their report together with the half-year financial
report on the consolidated entity, consisting of Celsius Resources Limited and
the entities it controlled at the end of, or during the half-year ended 31
December 2022.
DIRECTORS
The Directors in office at the date of this report and at any time during the
half-year are as follows:
Mr Julito Sarmiento Non-Executive Chairman (appointed 15 November 2022)
Mr Jonathan Colvile Vice Chairman (appointed 15 November 2022)
Mr Peter Hume Executive Director (appointed 16 June 2022)
Mr Michael Hulmes Non-Executive Director
Mr Simon Farrell Non-Executive Director (appointed 17 June 2022)
Mr Paul Dudley Non-Executive Director (appointed 30 January 2023)
Mr Martin Buckingham Executive Chairman (resigned 14 November 2022)
PRINCIPAL ACTIVITIES
During the half-year, the principal activities of the consolidated entity
consisted of mineral exploration in Australia, Namibia and the Philippines.
There were no significant changes in the nature of the activities of the
consolidated entity during the half-year.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There were no significant changes in the state of affairs of the consolidated
entity during the half-year.
REVIEW OF OPERATIONS
Corporate
The consolidated net loss of the consolidated entity after income tax and
non-controlling interest for the half-year ended 31 December 2022 amounted to
$2,061,756 (31 December 2021: $3,074,056)
Performance Rights
At the Company's Annual General Meeting held on 28 November 2022, shareholders
approved to vary the terms of the Tranche 3 Performance Rights under the
Celsius Resources Incentive Scheme, by extending the date by which the
Milestone is required to be satisfied from 30 November 2022 to 31 March 2023.
The Milestone for these Tranche 3 Performance Rights is the completion and
delivery of a Mining Project Feasibility ("DMPF") for the
Maalinao-Caigutan-Biyog ("MCB") Copper-Gold Project (MCB Project). This has
been delayed due to several external circumstances outside the Company's
control, including the impact of COVID-19. The DMPF is expected to be
delivered in Q1 of 2023 and consequently the Company sought shareholder
approval to extend the date by which the Milestone is required to be
satisfied.
On 30 December 2022, 3,600,000 Tranche 2 Performance Rights lapsed.
Maalinao-Caigutan-Biyog Copper Gold Project, Philippines (Celsius - 100%)
Makilala Mining Company, Inc. ("MMCI"), a wholly owned Philippine subsidiary
of Celsius, is nearing completion its Exploration, Environment, and
Community Development Programs as it moves closer to mine construction and
operations for the Maalinao-Caigutan-Biyog ("MCB") Copper-Gold Project in the
Cordillera Administrative Region.
Exploration Work
Drilling Program
Five holes were drilled for the period (MCB-040, MCB-041, MCB-042, MCB-043,
and MCB-044) which completed the resource and geotechnical drilling for
additional Information to support mine development studies. Geotechnical and
geologic core logging was also completed with core samples submitted for
geochemical analysis.
Drill hole results continue to extend the envelop of the near surface
higher-grade copper mineralisation to the east complementing previous MCB
drill results from 2021 and validating the historical drilling information
completed by Freeport-McMoRan. The confirmation of shallow high-grade
mineralisation will allow for a more refined mine plan as part of the proposed
feasibility study work in 2023.
Updated Mineral Resource
An updated JORC Compliant Mineral Resource was announced in December 2022 with
a global mineral resource of 338Mt @ 0.47% copper and 0.12g/t gold, for a
total of 1.6Mt of contained copper and 1.3M0zs of contained gold reported to a
preferred lower cut-off grade of 0.2% copper.
The geological interpretations and technical information that have contributed
to the 2022 Mineral Resource Estimate (MRE) at MCB are based largely on
surface mapping and analysis of 55 diamond drill holes completed by
Freeport-McMoRan from 2006 to 2013, and nine drill holes completed by Makilala
Mining from 2021 to 2022.
The most substantial effect of the drilling results was the inclusion of a
Measured component to the MRE confirming the continuity of the copper
mineralisation at key locations throughout the MRE through infill drilling.
The infill drilling enabled better definition of the boundaries to the overall
copper mineralisation at MCB, in addition to the specific locations which were
tested to confirm the orientation and continuity of the internal higher-grade
copper mineralisation. The impact of the additional copper mineralisation was
significant at shallow levels, as defined by an increase to the copper content
at higher cut-off grades and tighter definition of the higher-grade material.
A further change to the MRE has been the inclusion of a small portion of
weathered material which was not reported in the 2020 MRE. There is potential
to process weathered material from the surface stabilization and surface
infrastructure works feeding into the proposed feasibility study. Given the
prospect for mining and processing of at least a portion of the weathered
copper mineralisation, it has now been included as part of the MCB Mineral
Resource Estimate.
Social, Environmental Licenses, and Government Approvals
MMCI lodged an application for the Declaration of Mining Project Feasibility
(DMPF) to the Mines and Geosciences Bureau (MGB) on 28 September 2022 which is
a critical step in securing a Mineral Agreement with the national government.
The application included the submission of major documents such as the Project
Feasibility Study Report, Final Exploration Report, Environmental Protection
and Enhancement Program, Final Mine Rehabilitation and/or Decommissioning
Plan, Social Development and Management Program, Care and Maintenance Program,
and project endorsements from the Local Government Units, among others. These
documents underwent a rigorous consultation process with the host community
and local government officials to capture the aspirations of the community as
well as alignment with local development plans and programs. Social and
environmental safeguards were also integrated into the overall mine
development and operations plan in line with Philippine Mining regulations and
standards.
Interim approvals have been secured for its Social Development and Management
Program and Care and Maintenance Program while the rest of the documents are
under technical review by the MGB.
The DMPF approval, anticipated to be secured early in 2023, will trigger the
next phase of obtaining a Mineral Processing Sharing Agreement (MPSA).
Preparation of key requirements for the MPSA application are well underway.
A Memorandum of Agreement with the Balatoc Indigenous Cultural Community (ICC)
was signed on 14 November 2022 reflecting the consent of the host community to
allow the development and operations of the MCB Project for 25 years,
renewable for another 25 years. The MOA outlines the commitments and
obligations of all parties, as well as the economic, social, environmental,
and cultural benefits of the project to the Balatoc ICC during the life of
mine. The MOA was obtained through a Free, Prior and Informed Consent process
which serves as a basis for the issuance of the Certification Precondition
from the National Commission on Indigenous Peoples attesting the grant of
consent from the ICC. The issuance of the Certification Precondition is a
mandatory requisite for the MPSA application.
The Environmental Compliance Certificate from the Environmental Management
Bureau is expected to be released early in 2023.
A proposal from potential local partners, Sodor, Inc. and the PMR Group, was
also received, leading to the signing of a Non-Binding Term Sheet on 13
December 2022 to satisfy the MPSA requirement of a 60% Filipino-owned company.
Community Development
Monthly meetings with the Council of Elders and the Barangay Council (COE-BC)
were regularly held as a way of strengthening the traditional leadership
structure to manage projects, issues, and concerns among the community.
Several infrastructure projects have been completed for the period which
include the construction and improvement of footbridges, waiting sheds,
hand-washing facilities, public latrine, repairs of school roofing, among
others. These were based on the identified and priority needs to improve the
community's access to basic social and economic services. Financial support
continued to be extended in observance of and respect for the community's
socio-cultural traditions and during calamities.
Environment
Progressive site rehabilitation was carried out for completed drill holes
(MCB-040 to MCB-044) in accordance with the Company's Environmental Work
Program. Temporary structures were removed, all excavations were backfilled
with bagged topsoil, and disturbed areas were revegetated with regional
species.
Pine and bamboo seedlings were also planted along the trails as a contribution
to the reforestation and climate change mitigation efforts of the government's
National Greening Program.
Information, education, and communications campaign initiatives were also
sustained to instill an environmentally conscious culture among employees,
workers, and the community.
Regulatory Compliance
The Company has submitted and complied with all the regulatory reportorial
requirements on schedule with no penalties incurred from the Mines and
Geosciences Bureau and zero accidents/incidents for the period and since the
company recommenced operations in 2020. This earned the Company a Safety Mine
Award for Exploration Category during the 2022 Presidential Mineral Industry
Environmental Awards.
Sagay Copper-Gold Project, Philippines (Celsius - 100%)
Tambuli Mining Company, Inc. ("TMCI"), a wholly owned Philippine subsidiary of
Celsius in the Philippines, temporarily suspended drilling operations of its
Sagay Copper-Gold Project ("Sagay Project") in the Negros Islands.
Desktop works were undertaken to review the current drilling results along
with previous drilling and exploration data to reinterpret the geologic and
mineralisation models and resource evaluation to improve exploration and
future development strategies.
A Maiden Mineral Resource was announced on 7 November 2022, comprising of a
Global Mineral Resource Estimate (MRE) of 302 million tonnes at 0.41% copper
and 0.11g/t gold, at a lower cut-off grade of 0.2% copper. The MRE has been
defined by a total of 32 broadly spaced diamond drill holes showing copper
mineralisation over an extensive area from surface down to 1.2km in depth.
Drilling has broadly defined a large-scale copper mineralisation interpreted
to be a typical porphyry copper style mineralisation common throughout the
Philippine archipelago. A lower cut-off grade of 0.2% copper was applied in
the reported MRE which aligns broadly with the expected economic limits of the
likely mining and processing options considered in the Sagay Project.
The next phase of exploration will focus on investigating the possible
extensions of these higher-grade positions closer to the surface.
Opuwo Cobalt Project, Namibia (Celsius - 95%)
The Opuwo Cobalt Project is one of the largest undeveloped Cobalt projects
outside of the Democratic Republic of Congo. It has a JORC Mineral Resource of
225.5 million tonnes at a grade of 0.12% cobalt, 0.43% copper, and 0.54% zinc.
Metallurgical test work is ongoing to further refine the cobalt and copper
recoveries, and therefore improve the economics of the project. Two
downstream processing methods are currently being examined: a
hydrometallurgical route and a roasting & tank leach route.
The preliminary roasting & tank leach test work results show recoveries of
up to 95% for cobalt and 98% for copper for this processing step. This is an
improvement from the 2018 autoclave leaching test results with historical
recoveries of 72.6% cobalt and 74.1% copper and demonstrates that Opuwo is
amenable for simple roasting & tank leach downstream processing. Further
test work is being undertaken to delineate the roasting and tank leach
parameters which may further improve cobalt recovery.
The Company engaged SFH Metallurgy to explore a hydrometallurgical processing
route. In late August 2022, a 20 kg composite sample of ore was sent to AMML
laboratories in Gosford Australia to support the test work program.
From an economic viewpoint, the hydrometallurgical route being explored
requires the initial processing of the ore via flotation/beneficiation to
produce a bulk concentrate at a targeted metal value recovery of >80%.
For testing of both the flotation and the hydrometallurgical steps,
preliminary "sighter" tests were performed to identify processing
characteristics of the ore relevant to its future treatment. Tests for the
flotation process began in September 2022, and involved using a key
combination of milling, screening and flotation. These tests were aimed at
identifying key considerations in the production of a bulk concentrate.
By November 2022, a representative sample of bulk concentrate was generated,
allowing a "diagnostic" leach test to be performed as part of the evaluation
of the hydrometallurgical route. The analysis of these samples and refinement
of results is currently still under review with further refinements being
considered.
The tenement permits are due to expire in March 2023. As such, the Company has
lodged the necessary documentation to have the permits renewed with favourable
feedback from the Ministry of Mines.
The Company has received strong interest from parties in partnering on the
Opuwo Project. A data room has been established with a number of
Non-Disclosure Agreements having been signed.
Cullarin West Project, Australia (Celsius - 100%)
The Company entered into a tenement sale agreement with Second String Pty Ltd
("Second String") for the sale of its 100% interest in EL 8996 located in the
Lachlan Fold Belt, NSW. Completion of the agreement was conditional upon
Second String completing a Listing Agreement and the satisfaction of
regulatory approvals. If the conditions were not satisfied (or waived) by 30
September 2022, either party may terminate the agreement.
Second String have more recently advised that after finalising relevant
technical work programs, it has decided not to proceed with completing the
transaction and notified their intention to terminate the option agreement.
The Company will now assess the viability of the opportunity and gauge
interest from other possible partners.
EVENTS SUBSEQUENT TO REPORTING DATE
On 18 January 2023, the Company issued 3,000,000 ordinary shares on the
exercise of unlisted options at an exercise price of $0.012 per share.
On 23 January 2023, the Company issued 4,000,000 ordinary shares on the
exercise of unlisted options at an exercise price of $0.012 per share.
Admission to trading on AIM
On 30 January 2023 the Company successfully completed its admission to trading
on AIM , a stock market operated by the London Stock Exchange plc. Strong
interest from UK and European investors was identified during the process,
along with Institutional support which may now underpin additional long-term
support for the Company and its projects. It is envisaged that AIM will
provide the Company with wider exposure to countries and sectors with access
to a diverse set of investors to support current and future development of the
Company's assets into operating mines. The AIM market has a good track record
for raising capital for companies with operations in both the Philippines and
Africa.
The admission to trading on AIM followed a placing by SP Angel Corporate
Finance LLP for a total of 299,375,000 Ordinary Shares at GBP0.008 per
ordinary Share, raising gross proceeds of GBP2.4 million (AUD4.3 million),
before expenses.
On 30 January 2023, Mr. Paul Dudley was appointed as a Non-Executive Director.
On 31 January 2023, the Company issued 3,000,000 ordinary shares on the
exercise of unlisted options at an exercise price of $0.012 per share.
The Directors are not aware of any other matters or circumstances that have
arisen since the end of the financial year which significantly affected or may
significantly affect the operations of the consolidated entity the results of
those operations, or the state of affairs of the consolidated entity in future
financial years.
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE HALF-YEAR ENDED 31 DECEMBER 2022
Consolidated
31 December 2022 31 December 2021
$ $
Other income 27,430 22,386
Directors' and employee benefits expense (356,993) (425,646)
Legal and other professional fees (842,132) (375,868)
Travel and accommodation (60,404) (2,947)
Depreciation (10,264) (14,718)
Management fee (13,131) (254,152)
Finance costs (273) (42,686)
Share based payments 7 (21,472) (222,645)
Impairment expense 4 (398,689) (733,475)
Exploration expenditure (27,522) -
Other expenses (361,790) (1,089,333)
Loss before income tax (2,065,240) (3,139,084)
Income tax expense - -
Loss for the period (2,065,240) (3,139,084)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Exchange differences on translating foreign operations (182,567) 112,816
Total other comprehensive (loss)/income (182,567) 112,816
Total comprehensive loss for the period (2,247,807) (3,026,268)
Loss for the period attributable to:
Non-controlling interests (3,484) (65,028)
Members of the parent (2,061,756) (3,074,056)
(2,065,242) (3,139,084)
Total comprehensive loss attributable to:
Non-controlling interests 3,687 (69,129)
Members of the parent (2,251,494) (2,957,139)
(2,247,807) (3,026,268)
Loss per share: Cents Cents
Basic loss per share (0.14) (0.29)
Diluted loss per share (0.14) (0.29)
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022
Consolidated
31 December 30 June
Note
2022 2022
$ $
ASSETS
Current assets
Cash and cash equivalents 3 2,037,031 1,289,845
Trade and other receivables 94,577 227,689
Other assets 141,479 95,609
Total current assets 2,273,087 1,613,143
Non-current assets
Deferred exploration expenditure 4 29,497,116 28,242,540
Property, plant and equipment 277,404 227,317
Total non-current assets 29,774,520 28,469,857
Total assets 32,047,607 30,083,000
LIABILITIES
Current liabilities
Trade and other payables 788,141 1,396,808
Other liabilities 5 1,520,147 1,486,532
Total current liabilities 2,308,288 2,883,340
Total liabilities 2,308,288 2,883,340
Net assets 29,739,319 27,199,660
EQUITY
Issued capital 6 69,451,007 64,808,602
Reserves 7 1,158,533 1,203,210
Accumulated losses (40,898,770) (38,837,014)
Equity attributable to the owners of Celsius Resources Limited 29,710,770 27,174,798
Non-controlling interest 28,549 24,862
Total equity 29,739,319 27,199,660
STATEMENT OF CHANGES IN EQUITY
FOR THE HALF YEAR ENDED 31 DECEMBER 2022
Consolidated
Issued capital Accumulated losses Share based payments reserve Foreign currency translation reserve Non-controlling interest Total
$ $
$
$ $
$
Balance at 1 July 2021 61,984,186 (34,923,389) 1,850,000 75,004 28,253,107
(732,694)
Loss for the period - (3,074,056) - - (65,028) (3,139,084)
Other comprehensive income/(loss) - - - 116,917 (4,101) 112,816
Total comprehensive loss for the period - (3,074,056) - (69,129) (3,026,268)
116,917
Transactions with owners, directly in equity
Issue of share capital - - - - - -
Capital raising costs (1,637) - - - - (1,637)
Performance rights converted 183,000 - (183,000) - - -
Share based payments - - 222,645 - - 222,645
Balance at 31 December 2021 62,165,549 (37,997,445) 1,889,645 (615,777) 5,875 25,447,847
64,808,602 (38,837,014) 2,418,105 24,862 27,199,660
(1,214,895)
Balance at 1 July 2022
Loss for the period - (2,061,756) - - (3,484) (2,065,240)
Other comprehensive loss - - - (189,738) 7,171 (182,567)
Total comprehensive loss for the period - (2,061,756) - 3,687 (2,247,807)
(189,738)
Transactions with owners, directly in equity
Issue of share capital 5,066,645 - - - - 5,066,645
Capital raising costs (424,240) - 123,589 - - (300,651)
Vesting of share based payments - - 21,472 - - 21,472
Balance at 31 December 2022 69,451,007 (40,898,770) 2,563,166 (1,404,633) 28,549 29,739,319
STATEMENT OF CASH FLOWS
FOR THE HALF YEAR ENDED 31 DECEMBER 2022
Consolidated
31 December 2022 31 December 2021
$ $
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees (2,201,262) (2,219,392)
Interest received 2,430 2,386
Interest paid - (41)
Other receipts - 20,000
Net cash outflow from operating activities (2,198,832) (2,197,047)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property, plant and equipment (60,351) (85,144)
Payments for exploration and evaluation (1,593,992) (629,646)
Cash paid for acquisition of subsidiary - (1,516,601)
Net cash outflow from investing activities (1,654,343) (2,231,391)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from share issue 4,858,295 -
Share issue costs (300,651) (1,637)
Net cash inflow/(outflow) from financing activities 4,557,644 (1,637)
Net decrease in cash held (704,469) (4,430,075)
Effect of exchange rate changes on the balance of cash held in foreign 42,717 (4,193)
currencies
Cash at the beginning of the financial period 1,289,845 6,484,053
Cash at the end of the financial period 2,037,031 2,049,785
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