Interim Results

Chesterfield Resources

27/09/2021 09:15

RNS Number : 0463N

Chesterfield Resources PLC

27 September 2021

 

Chesterfield Resources PLC / EPIC: CHF / Market: LSE / Sector: Mining

 

27 September 2021

CHESTERFIELD RESOURCES PLC

("Chesterfield" or the "Company")

Interim Results

 

Chesterfield Resources PLC, the LSE listed mineral exploration company with projects in Cyprus and Canada, is pleased to announce its interim results for the six months ended 30 June 2021.

 

 

Chairman's review of year to date

 

2021 thus far has been another busy period for our company, and we anticipate that the next six months will bring further significant news and developments.

 

Major acquisition in Labrador

The highlight for the period was in June when with the acquisition of a large and prospective new copper exploration project in Labrador Canada, called Adeline. Copper is the basic building block of the decarbonisation/electrification revolution that is unfolding around us. If global emission targets are to be met then the mining industry needs to discover considerable new quantities of copper, by some estimates around 10 million tonnes by 2030. This is a mega-trend for our industry. Copper prices are likely to be robust over the next decade and many large mining companies are now keen to increase their exposure to copper.

Our new Adeline copper project is highly unusual since it covers an entire sedimentary basin, some 44km long. There are few such basins globally and they are known for yielding large copper discoveries, in locations such as Zambia, Michigan and Siberia. Should we make a discovery, or even a partial discovery, our strategy is to attract the attention of one of the major mining groups, probably via an earn-in deal. This, we expect, would increase the value of our company considerably.

The project certainly looks promising. It covers nearly 300 KM2, which is over three times the size of our project in Cyprus. A considerable amount of exploration work has been carried out on the basin over the last 60 years by various groups, including field work such as mapping and sampling, as well as high quality aerial surveys and ground geophysics. Around 250 copper showings have been identified in the basin, at surface or very close to surface. We own 100% of the project and view it as a potential game-changer for our company.

 

Exploration opportunity

The exploration opportunity for the project is that despite the rich inventory of data, very little drilling has been done on the project, because there is no road access. Some drilling was conducted around ten years ago, but is was rather speculative. Our approach is to re-analyse the large volume of data using modern technology and improved understanding of this type of geology.

The analysis programme is now almost complete and has been used to direct a helicopter-supported field programme of additional mapping and sampling of specific target areas within the basin. To save time during the warm summer season, we commenced the analysis and field programme immediately on completion of the transaction. As a company we like to move things forward quickly.

The vendor of the project was Altius Minerals, a project generation and royalty company based in Newfoundland. Altius is highly regarded in Canada. It has now not only become a strategic shareholder in Chesterfield, but also an operational partner. Its team has assisted with much of the data preparation and also in rapidly organising the field programme. In addition, Altius has also helped bring together a first-class team of specialists and local experts for the project. The principal objective of the field work was to design a diamond drill programme for the winter (when it is easier to access drill locations on the frozen lakes). By managing to move very quickly on the data programme and field programme this summer, we have saved a year of the project roll-out and so potentially provide a much quicker pay-back for our shareholders.

 

Exploration boom in Labrador

Not only is the project large, data-rich and highly prospective, it is also well located. The province of Labrador was recently voted the eighth best location in the world for mining investment by the Fraser Institute. At a time when copper explorers are being driven to increasingly risky corners of the globe, we have acquired a project that is in one of the most mining-friendly and best organised jurisdictions in the world. The project is only around 20 minutes helicopter flight from the service hub of Goose Bay. It is on a similar latitude to the north of England. The lowest average winder temperatures are about -12 degrees, which are certainly very manageable for exploration and mining.

Labrador is currently undergoing something of an exploration boom in Canada, with a number of notable discoveries pushing up the equity value of listed junior explorers operating there. Next month we will be starting a programme of investor relations and share promotion in Canada. We are expecting that the combination of a large project in Labrador, copper, Altius as a partner and our rapid programme roll-out will attract the attention of the Canadian market, which is very knowledgeable about the mining sector. We also have the advantage that our Director of Exploration is Dr Neil O'Brien, a Canadian who is based near Toronto. As the former Head of Exploration for Lundin Mining, Neil is a well-known and respected figure in Canadian mining circles. We are expecting that a focus on the Canadian market will provide a whole new base of investor interest in our shares which we feel is considerably undervalued. We are also weighing the possibility of a secondary listing in Canada next year.

 

Cyprus programme extended

In Cyprus we commenced a new diamond drilling campaign which has been extended and is still in progress. We have to report that there is also a log jam in assay labs. The increase in metals prices over the last year has led to a surge in exploration drilling, much of which has been compressed into a short window due to Covid restrictions. With our extended drill programme and delays at the lab, realistically our Cyprus drill results are going to be pushed back to November. We will be providing further updates on our operations there shortly.  However, I pleased to report report that we have just completed our field program in Labrador, and we will start to bring results and news from that work programme soon on specific targets there.

 

Financially the company is in good shape, having topped up our tanks with a placement in July. We welcome a number of new investors to our register and also First Equity as a new joint broker. We have an exciting six months ahead of us with new corporate and operational developments in planning. We look forward to providing value growth for our shareholders.

 

Financials

As is to be expected with an exploration company, for the six-month period ended 30 June 2021 the Group is reporting a pre-tax loss of £433,538 (six months ended 30 June 2020: £257,465). The Group's net cash balance as at 30 June 2021 was £1,504,973 (six months ended 30 June 2020: £316,478).

Responsibility Statement

 

We confirm that to the best of our knowledge: 

 

·      the interim financial statements have been prepared in accordance with International Accounting Standards 34, Interim Financial Reporting, as adopted by the EU;

·      give a true and fair view of the assets, liabilities, financial position and loss of the Company;

·      the Interim report includes a fair review of the information required by DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the set of interim financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

·      The Interim report includes a fair review of the information required by DTR 4.2.8R of the Disclosure and Transparency Rules, being the information required on related party transactions.

 

The interim report was approved by the Board of Directors and the above responsibility statement was signed on its behalf by:

 

Martin French

Executive Chairman

25 September 2021

 

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

 For further information please visit www.chesterfieldresourcesplc.com or contact:

Chesterfield Resources plc
Martin French, Executive Chairman
Tel: +44 (0) 7901 552277
PanmureGordon(UK)Limited (Broker)
John Prior & Hugh Rich
Tel: +44 (0) 207 886 2500

 

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 

Notes
6 months to 30 June 2021 Unaudited
£
6 months to 30 June 2020 Unaudited
£
Continuing operations
Revenue
-
-
Administration expenses
(433,538)
(257,465)
Operating loss
(433,538)
(257,465)
Income tax
-
-
Loss for the period
(433,538)
(257,465)
Other comprehensive income
Items that may be reclassified to profit or loss
Currency translation differences
(75,349)
78,387
Total comprehensive income for the period
(508,887)
(179,078)
Total comprehensive income for the period attributable to equity holders
(508,887)
(179,078)
Earnings per share from continuing operations attributable to the equity owners of the parent
Basic and diluted
5
(0.425)p
(0.416)p

 

 

 

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 

                                                                                                                                                                    

Notes
As at
30 June 2021 Unaudited
£
As at
31 December 2020 Audited
£
As at
30 June 2020 Unaudited
£
Non-Current Assets
Property, plant and equipment
29,160
12,707
15,056
Intangible assets
6
2,847,310
2,433,876
1,913,612
2,876,470
2,446,583
1,928,668
Current Assets
Trade and other receivables
154,325
128,498
83,148
Cash and cash equivalents
1,504,973
2,438,856
316,478
1,659,298
2,567,354
399,626
Total Assets
4,535,768
5,013,937
2,328,294
Non-Current Liabilities
Deferred tax liabilities
(127,451)
(127,450)
(127,450)
Current Liabilities
Trade and other payables
(162,912)
(200,619)
(41,895)
Total Liabilities
(290,363)
(328,069)
(169,345)
Net Assets
4,245,405
4,685,868
2,158,949
Capital and Reserves Attributable to
Equity Holders of the Company
Share capital
199,911
199,711
159,933
Share premium
6,492,731
6,482,931
3,534,597
Other reserves
184,851
201,776
54,026
Retained losses
(2,632,088)
(2,198,550)
(1,589,607)
Total Equity
4,245,405
4,685,868
2,158,949

 

 

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

 

Attributable to owners of the Parent
Note
Share capital
£
Share premium
£
Other reserves
£
Retained losses
£
Total equity
£
Balance as at 1 January 2020
159,933
3,534,597
(20,003)
(1,336,500)
2,338,027
Loss for the period
-
-
-
(257,465)
(257,465)
Other comprehensive income for the year
Items that may be subsequently reclassified to profit or loss
Currency translation differences
-
-
78,387
-
78,387
Total comprehensive income for the year
-
-
78,387
(257,465)
(179,078)
Expiry of options
-
-
(4,358)
4,358
-
Total transactions with owners, recognised in equity
-
-
(4,358)
4,358
-
Balance as at 30 June 2020
159,933
3,534,597
54,026
(1,589,607)
2,158,949
Balance as at 1 January 2021
199,711
6,482,931
201,776
(2,198,550)
4,685,868
Loss for the period
-
-
-
(433,538)
(433,538)
Other comprehensive income for the year
Items that may be subsequently reclassified to profit or loss
Currency translation differences
-
-
(75,349)
-
(75,349)
Total comprehensive income for the year
-
-
(75,349)
(433,538)
(508,887)
Grant of options
-
-
58,424
-
58,424
Option exercise
200
9,800
-
-
10,000
Total transactions with owners, recognised in equity
200
9,800
58,424
-
68,424
Balance as at 30 June 2021
199,911
6,492,731
184,851
(2,632,088)
4,245,405


 

 

 

 

 

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

 

 

Notes
6 months to 30 June 2021
Unaudited
£
6 months to 30 June 2020 Unaudited
£
Cash flows from operating activities
Loss before taxation
(433,538)
(257,465)
Adjustments for:
Share based payments
58,424
-
Depreciation
1,147
6,703
Increase/(decrease) in trade and other receivables
10,473
6,348
Increase in trade and other payables
(74,008)
(27,061)
Foreign exchange
5,973
6,185
Net cash used in operations
(431,529)
(265,290)
Cash flows from investing activities
Purchase of property, plant & equipment
(18,115)
-
Exploration and evaluation activities
6
(494,239)
(166,828)
Net cash used in investing activities
(512,354)
(166,828)
Cash flows from financing activities
Option exercise
10,000
-
Net cash generated from financing activities
10,000
-
Net decrease in cash and cash equivalents
(933,883)
(432,118)
Cash and cash equivalents at beginning of period
2,438,856
748,596
Cash and cash equivalents at end of period
1,504,973
316,478

 

 

 

 

 

NOTES TO THE INTERIM FINANCIAL STATEMENTS

 

1. General Information

 

Chesterfield Resources plc is a minerals company exploring primarily for copper and gold in Cyprus and listed on the Standard segment of the Main Market of the London Stock Exchange.

 

The Company is domiciled in the United Kingdom and incorporated and registered in England and Wales, with registration number 10545738. The Company's registered office is Suite 1, 15 Ingestre Place, London W1F 0DU, United Kingdom

 

2. Basis of Preparation

 

The condensed interim financial statements have been prepared in accordance with IAS 34 "Interim Financial Statements" as adopted by the United Kingdom and the Disclosure and Transparency Rules of the UK Financial Conduct Authority. The condensed interim financial statements should be read in conjunction with the annual financial statements for the period ended 31 December 2020, which have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the United Kingdom.

 

The interim financial information set out above does not constitute statutory accounts within the meaning of the Companies Act 2006. It has been prepared on a going concern basis in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRS) as adopted by the United Kingdom.

 

Statutory financial statements for the period ended 31 December 2020 were approved by the Board of Directors on 29 April 2021 and delivered to the Registrar of Companies. The report of the auditors on those financial statements was unqualified with an emphasis of matter paragraph in respect of the impact of COVID-19. The condensed interim financial statements are unaudited and have not been reviewed by the Company's auditor. 

 

Going concern

 

The Group is managing the impact of the COVID-19 pandemic on its business and the uncertainty it creates. The Company has taken swift pre-emptive action to ensure the safety of its employees, contractors and supply chain. This includes a full financial and strategic review designed to safeguard and ensure the stability and longevity of Chesterfield's activities for the benefit for all its stakeholders.

 

The Directors, having made appropriate enquiries, consider that adequate resources exist for the Company to continue in operational existence for the foreseeable future and that, therefore, it is appropriate to adopt the going concern basis in preparing the condensed interim financial statements for the period ended 30 June 2021. Further to this, the Directors believe the Group is in a strong position to endure ongoing uncertainty from COVID-19 however the risk remains for short term market volatility and uncertain long-term impacts which may affect the Groups ability to raise further funding in the future.

 

Risks and uncertainties

 

 The Board continuously assesses and monitors the key risks of the business. The key risks that could affect the Company's medium term performance and the factors that mitigate those risks have not substantially changed from those set out in the Company's 2020 Annual Report and Financial Statements, a copy of which is available on the Company's website: www.chesterfieldresourcesplc.com. The key financial risks are liquidity risk, credit risk, interest rate risk and fair value estimation.

 

Critical accounting estimates

 

The preparation of condensed interim financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the end of the reporting period. Significant items subject to such estimates are set out in Note 2 of the Company's 2020 Annual Report and Financial Statements. The nature and amounts of such estimates have not changed significantly during the interim period.

 

3.   Accounting Policies

 

Except as described below, the same accounting policies, presentation and methods of computation have been followed in these condensed interim financial statements as were applied in the preparation of the Company's annual financial statements for the period ended 31 December 2021.

 

3.1 Changes in accounting policy and disclosures

(a) New and amended standards mandatory for the first time for the financial year beginning 1 January 2021

The International Accounting Standards Board (IASB) issued various amendments and revisions to International Financial Reporting Standards and IFRIC interpretations. The amendments and revisions were applicable for the period ended 30 June 2021 but did not result in any material changes to the financial statements of the Group or Company.

 

(b) New standards, amendments and Interpretations in issue but not yet effective or not yet endorsed and not early adopted

The standards and interpretations that are issued, but not yet effective, up to the date of issuance of the condensed interim financial statements are listed below. The Company intends to adopt these standards, if applicable when they become effective.

Standard
Impact on initial application
Effective date
IFRS 3
Reference to Conceptual Framework
1 January 2022
IAS 37
Onerous contracts
1 January 2022
IAS 16
Proceeds before intended use
1 January 2022
Annual improvements
2018-2020 Cycle
1 January 2022
IAS 8
Accounting estimates
1 January 2023
IAS 1
Classification of Liabilities as Current or Non-Current.
1 January 2023

 

*Not yet endorsed by the EU.

The Company is evaluating the impact of the new and amended standards above. The Directors believe that these new and amended standards are not expected to have a material impact on the Company's results or shareholders' funds.

 

 

4.   Dividends

 

No dividend has been declared or paid by the Company during the six months ended 30 June 2020 (six months ended 30 June 2020: £nil).

 

 

5.   Loss per Share

 

The calculation of loss per share is based on a retained loss of £433,538 for the six months ended 30 June 2021 (six months ended 30 June 2020: £257,465) and the weighted average number of shares in issue in the period ended 30 June 2021 of 102,095,642 (six months ended 30 June 2020: 61,933,334).

 

No diluted earnings per share is presented for the six months ended 30 June 2021 or six months ended 30 June 2020 as the effect on the exercise of share options would be to decrease the loss per share.

 

 

6. Intangible fixed assets

 

The movement in capitalised exploration and evaluation costs during the period was as follows:

 

Exploration & Evaluation at Cost and Net Book Value
£
Balance as at 1 January 2021
2,433,876
Additions
494,239
Foreign exchange
(80,805)
As at 30 June 2021
2,847,310

 

 

7. Events after the balance sheet date

On 1 July 2021 the Company acquired 87986 Newfoundland and Labrador Inc ("the Acquisition"). The consideration for the Acquisition was satisfied by the issue 10,089,199 ordinary shares at a price of 10 pence per share and warrants over 11,100,000 Ordinary Shares, exercisable for three years from completion at an exercise price of £0.20 per new Ordinary Shares.

 

On 2 July 2021 the Company issued 8,000,000 new ordinary shares in the capital of the Company at a placing price of 10 pence per share for a total cash value of £800,000.

 

On 2 July 2021 the Company issued 2,400,000 options which vest immediately, expire in 5 years and with an exercise price of 12 pence per share.

 

On 8 September 2021 the Company issued 120,000 ordinary shares for the exercise of options at a price of 5 pence per share for a total cash value of £6,000.

 

8. Approval of interim financial statements

The Condensed interim financial statements were approved by the Board of Directors on 26 September 2021.

**ENDS**

 

 

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