REG - Clontarf Energy PLC - Interim Results for the period ended 30 June 2023
25/09/2023 07:00
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RNS Number : 4292N Clontarf Energy PLC 25 September 2023
25 September 2023
Clontarf Energy plc
("Clontarf" or the "Company")
Interim Statement for the period ended 30 June 2023
Clontarf Energy plc (AIM: CLON), the energy company focused on Australia,
Africa and Bolivia, announces its unaudited financial results for the six
months ended 30 June 2023:
Highlights
• Formation of a comprehensive joint venture with breakthrough Direct
Lithium Extraction ("DLE") technology developers NEXT-ChemX (the "JV").
• Brine samples from five priority salares provided by the Bolivian State
Lithium Company for testing.
• All samples successfully navigated the US Customs checks without
setbacks.
• The JV's pilot plant components have now largely been assembled at
sub-contractor facilities.
• Technical improvements including development and perfection of
state-of-the-art German-engineered sensors, to improve performance.
• Pilot plant construction, including assembly of innovative components,
will shortly be underway in Texas, after which testing will begin.
• Subject to test results and Bolivian laws, Clontarf plans to run
large-scale production testing to fine-tune the process.
• Under applicable laws, the JV is ready to construct mobile pilot
plants to process brines at different salares in Bolivia and neighbouring
countries.
• Clontarf has been invited to participate in European Union initiatives
to deliver battery-grade lithium salts to European automotive, grid storage
and mobile electronics industries.
• The Bolivian authorities have adopted the suggestion to conduct a
bid-round on medium-sized salares, certain of which Clontarf has reviewed and
sampled.
• Ratification discussions on Tano 2A block with Ghanaian authorities
continue - though the authorities have sought to re-negotiate (to their
benefit) at the acreage and fiscal terms previously agreed. A new realism
seems evident.
• Further Australian drill targets are under consideration, especially for
gas to serve the dynamic liquified natural gas ("LNG") market.
Chairman's Statement
Recent months have witnessed accelerated field-work on several fronts:
Clontarf teams have conducted further site-visits, sampling and related
geological work to deepen our understanding of opportunities and challenges
offered by the development of Direct Lithium Extraction technologies.
Our primary focus has been working with the Bolivian authorities, in
accordance with applicable laws. This covers both our work on Direct Lithium
Extraction technologies, in joint venture with NEXT-ChemX, as well as
Clontarf's proposals to explore and develop medium-sized salares. The Bolivian
authorities have now confirmed their plan to run a bid-round, as required by
law and proper governance, on these high-potential though under-explored
salt-lakes. This reflects a vision to develop the world's greatest lithium
resource as soon as feasible, to benefit local communities, the authorities,
as well as our partners, customers and the road to energy transition.
Our JV partners have completed financings and sub-contractor supply agreements
on long-lead time and scarce components. Some components are being enhanced in
order to serve anticipated as well as current customer needs. Remaining
elements are being shipped to site for final assembly, commissioning and
testing.
This progress has brought us to the attention of the EU Commission, as well as
State-backed initiatives in Britain and the USA. Clontarf has been invited
to participate in a drive to explore and develop lithium and other strategic
minerals in northern Argentina, and possibly other jurisdictions. We believe
that such timely initiatives may open larger and lower cost sources of equity
and debt financings. This would cut our cost of capital and open many new
opportunities for value added and expansion.
Subject to applicable laws, Clontarf has offered to participate in a Bolivian
Lithium opportunity in partnership with YLB using DLE technology being
developed by our technical partner, Next ChemX Corporation.
Every brine is different, and we must ensure that the processing parameters
are compatible with the quantity, quality and other parameters of the minerals
that are present in the particular brine. This is necessary in order to
complete the design of the larger commercial pilot plant specifically made for
the selected Bolivian brines.
With all necessary permits, we plan to collect and process larger samples for
pilot plant testing, including kinetics calculations, flow-rates, etc.
The NEXT-ChemX process works directly from the brine, and after a quick
filtering to ensure there are no solids or debris in the brine we feed into
our system. We normally produce pure Lithium Chloride, which we can then
convert to battery grade Li(2)CO(3) or LiOH - or possibly Lithium metal for
solid state lithium batteries.
This pilot plant testing will enable fine tuning of the process, and determine
recovery parameters, as well as operating cost numbers applicable for
different brine samples.
This work will help optimise output, demonstrating the effectiveness of the
Next ChemX technology and determining throughput and recovery expected at
in-situ pilot plants in South America, and possibly elsewhere.
The mobile pilot plant will ideally run for 4 and 6 months, to assess the
potential of that location, after which the mobile pilot plant can then be
moved and reassembled at another salar. This approach will enable customising
of the DLE process for a variety of brine grades and chemistries.
The Clontarf JV, in conjunction with the authorities, under applicable laws,
plans to build a full scale processing plant of an agreed capacity to extract
production tonnages of Lithium Carbonate, or other desired form of Lithium. We
would also assess the viability for the recovery of calcium, magnesium, and
potassium chlorides at each location showing attractive flow volumes and
recoverable grade. The overall capacity will be scalable via deployment of
modular units over a period of months to years.
Each plant can be upgraded to produce value added production, i.e. lithium
chloride to lithium carbonate, lithium hydroxide and, if feasible, lithium
metal. A similar approach to boosting value added will be implemented for
other, economic non-lithium minerals, such as magnesium and potassium.
In oil and gas, the tightening hydrocarbons' supply-demand balance promises a
long-overdue revival of exploration and the farm-out market. Shortages of
piped gas and LNG feedstock have strengthened long-term prices. The centrality
of LNG to fuel any energy transition in Europe and Asia has now been broadly
accepted - except for fringe elements - and even by previous sceptics. There
can be no reliance on intermittent renewables generation without reliable
back-up.
The resurgence of interest in African exploration and development may lead to
additional proposals in the coming months. Clontarf continues to insist on
strict adherence to our ESG standards.
Clontarf therefore progresses its interests in Bolivia, Australia, Chad and
Ghana, maintaining cordial communications with the relevant authorities, and
continues to operate efficiently on minimal expenditure.
Funding
Subject to technical verification of its exploration projects, and permitting,
Clontarf is confident of securing adequate funding, whether in London or
Australia, for near to medium term ongoing activities.
We set out to reduce political and geological risks.
Fortune favours the brave. The best is yet to come.
David Horgan
Chairman
22(nd) September 2023
This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) 596/2014.
ENDS
For further information please visit http://clontarfenergy.com
(http://clontarfenergy.com) or contact:
Clontarf Energy +353 (0) 1 833 2833
David Horgan, Chairman
Jim Finn, Director
Nominated & Financial Adviser +44 (0) 20 7409 3494
Strand Hanson Limited
Rory Murphy
Ritchie Balmer
Broker +44 (0) 207 399 9400
Novum Securities Limited
Colin Rowbury
Public Relations +44 (0) 207 138 3206
BlytheRay
Megan Ray
Teneo +353 (0) 1 661 4055
Luke Hogg
Alan Tyrrell
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Six Months Ended Year Ended
30 June 23 30 June 22 31 Dec 22
unaudited unaudited audited
£'000 £'000 £'000
Administrative expenses (288) (414) (672)
Impairment of exploration and evaluation assets - (4,095) (4,095)
LOSS BEFORE TAXATION (288) (4,509) (4,767)
Income Tax - - -
COMPREHENSIVE INCOME FOR THE PERIOD (288) (4,509) (4,767)
LOSS PER SHARE - basic and diluted (0.01p) (0.34p) (0.26p)
CONDENSED CONSOLIDATED BALANCE SHEET
30 June 23 30 June 22 31 Dec 22
unaudited unaudited audited
£'000 £'000 £'000
ASSETS:
NON-CURRENT ASSETS
Intangible assets 1,756 868 868
1,756 868 868
CURRENT ASSETS
Other receivables - 1 -
Cash and cash equivalents 381 188 932
381 189 932
TOTAL ASSETS 2,137 1,057 1,800
LIABILITIES:
CURRENT LIABILITIES
Trade and other liabilities (1,512) (2,088) (3,027)
(1,512) (2,088) (3,027)
TOTAL LIABILITIES (1,512) (2,088) (3,027)
NET ASSETS / (LIABILITIES) 625 (1,031) (1,227)
EQUITY
Called-up share capital 6,209 5,927 5,927
Share premium 12,737 10,985 10,985
Share based payment reserve 354 186 248
Retained deficit (18,675) (18,129) (18,387)
TOTAL EQUITY 625 (1,031) (1,227)
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Called-up Share based
Share Share Payment Retained
Capital Premium Reserves Deficit Total
£'000 £'000 £'000 £'000 £'000
As at 1 January 2022 2,177 10,985 186 (13,620) (272)
Shares issued 3,750 - - - 3,750
Total comprehensive income - - - (4,509) (4,509)
As at 30 June 2022 5,927 10,985 186 (18,129) (1,031)
Share based payment charge - - 62 - 62
Total comprehensive income - - - (258) (258)
As at 31 December 2022 5,927 10,985 248 (18,387) (1,227)
Shares issued 282 1,849 - - 2,131
Share issue expenses - (97) - - (97)
Share based payment charge - - 106 - 106
Total comprehensive income - - - (288) (288)
As at 30 June 2023 6,209 12,737 354 (18,675) 625
CONDENSED CONSOLIDATED CASH FLOW Six Months Ended Year Ended
30 June 23 30 June 22 31 Dec 22
unaudited unaudited audited
£'000 £'000 £'000
CASH FLOW USED IN OPERATING ACTIVITIES
Loss for the period (288) (4,509) (4,767)
Impairment of exploration and evaluation assets - 4,095 4,095
Share based payment charge 106 - 62
Exchange movements 2 1 3
(180) (413) (607)
Movements in working capital
Decrease in other receivables - 2 2
(Decrease)/Increase in trade and other payables (1,516) 601 1,541
(1,516) 603 1,543
NET CASH USED IN OPERATING ACTIVITIES (1,696) 190 936
CASH FLOWS USED IN INVESTING ACTIVITIES
Payments for intangible assets (406) (4,095) (4,095)
NET CASH USED IN INVESTING ACTIVITIES (406) (4,095) (4,095)
CASH FLOW FROM FINANCING ACTIVITIES
Issue of shares 1,650 3,750 3,750
Share issue expenses (97) - -
NET CASH GENERATED FROM FINANCING ACTIVITIES 1,553 3,750 3,750
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (549) (155) 591
Cash and cash equivalents at beginning of the period 932 344 344
Exchange loss on cash and cash equivalents (2) (1) (3)
CASH AND CASH EQUIVALENT AT THE END OF THE PERIOD 381 188 932
Notes:
1. INFORMATION
The financial information for the six months ended 30 June 2023 and the
comparative amounts for the six months ended 30 June 2022 are unaudited. The
financial information above does not constitute full statutory accounts within
the meaning of section 434 of the Companies Act 2006.
The Interim Financial Report has been prepared in accordance with IAS 34
Interim Financial Reporting as adopted by the U.K. The accounting policies and
methods of computation used in the preparation of the Interim Financial Report
are consistent with those used in the Group 2022 Annual Report, which is
available at www.clontarfenergy.com (http://www.clontarfenergy.com)
The interim financial statements have not been audited or reviewed by the
auditors of the Group pursuant to the Auditing Practices board guidance on
Review of Interim Financial Information.
2. DIVIDEND
No dividend is proposed in respect of the period.
3. GOING CONCERN
The Group incurred a loss for the period of £288,472 (2022: £4,766,646) and
had net current liabilities of £1,130,220 (2022: £2,094,612) at the balance
sheet date. These conditions, as well as those noted below, represent a
material uncertainty that may cast doubt on the Group's ability to continue as
a going concern.
Included in current liabilities is an amount of £1,450,565 (2022:
£1,525,565) owed in respect of Directors' remuneration due at the balance
sheet date. The Directors have confirmed that they will not seek settlement of
these amounts in cash until after the end of 2024.
The Group had a cash balance of £381,420 (2022: £931,902) at the balance
sheet date. As the Group is not revenue or cash generating it relies on
raising capital from the public market. On 16 January 2023 the Group raised
£1,300,000 on a placing and a further £350,000 on 1 June 2023. Further
information is detailed in Note 7 below.
As in previous years the Directors have given careful consideration to the
appropriateness of the going concern basis in the preparation of the financial
statements and believe the going concern basis is appropriate for these
financial statements. The financial statements do not include the adjustments
that would result if the Group and Company were unable to continue as a going
concern.
4. LOSS PER SHARE
Basic loss per share is computed by dividing the loss after taxation for the
year attributable to ordinary shareholders by the weighted average number of
ordinary shares in issue and ranking for dividend during the year. Diluted
earnings per share is computed by dividing the loss after taxation for the
year by the weighted average number of ordinary shares in issue, adjusted for
the effect of all dilutive potential ordinary shares that were outstanding
during the year.
The following table sets out the computation for basic and diluted earnings
per share ("EPS"):
Six Months Ended Year Ended
30 June 23 30 June 22 31 Dec 22
£'000 £'000 £'000
Loss for the year attributable to equity holders (288) (4,509) (4,767)
Denominator Number Number Number
For basic and diluted EPS 4,385,660,371 1,328,908,309 1,856,031,596
Basic and diluted EPS (0.01p) (0.34p) (0.26p)
Basic and diluted loss per share are the same as the effect of the outstanding
share options is anti-dilutive and is therefore excluded.
5. INTANGIBLE ASSETS
30 June 23 30 June 22 31 Dec 22
£'000 £'000 £'000
Exploration and evaluation assets
Cost:
At 1 January 12,735 8,640 8,640
Additions 888 4,095 4,095
Closing Balance 13,623 12,735 12,735
Impairment:
At 1 January 11,867 7,772 7,772
Provision for impairment - 4,095 4,095
Closing Balance 11,867 11,867 11,867
Carrying value:
At 1 January 868 868 868
At period end 1,756 868 868
Regional 30 Jun 23 30 Jun 22 31 Dec22
Analysis
£'000 £'000 £'000
Bolivia - Investment in JV 888 - -
Ghana 868 868 868
1,756 868 868
Exploration and evaluation assets relate to expenditure incurred in
prospecting and exploration for lithium, oil and gas in Bolivia and Ghana. The
Directors are aware that by its nature there is an inherent uncertainty in
exploration and evaluation assets and therefore inherent uncertainty in
relation to the carrying value of capitalised exploration and evaluation
assets.
During 2018 the Group resolved the outstanding issues with the Ghana National
Petroleum Company ("GNPC") regarding a contract for the development of the
Tano 2A Block. The Group has signed a Petroleum Agreement in relation to the
block and this agreement awaits ratification by the Ghanian government.
The Company is in negotiations with the Vice-Ministry of Electrical
Technologies and the State Lithium Company in Bolivia on exploration and
development of salt-lakes in accordance with law. Samples have been analysed
and process work is underway.
On 15 February 2023 the Company announced a heads of agreement around the
potential formation of a 50:50 Joint Venture with US based, OTC Markets
traded, technology company, NEXT-ChemX Corporation ("NCX") covering testing,
marketing, and deploying of NCX's proprietary (patent pending) direct lithium
ion extraction ("DLE") technology in Bolivia. Formation of the JV was subject
to final due diligence and the parties entering into formal documentation.
On 5 May 2023 the Company announced that all conditions precedent had been
satisfied with respect to the JV with NEXT-ChemX coming into force. In this
regard, Clontarf paid NEXT-ChemX Corporation US$500,000 and has issued to
NEXT-ChemX 385 million new Ordinary Shares in the capital of Clontarf of which
half are subject to a 12-month lock in requirement.
The Directors believe that there were no facts or circumstances indicating
that the carrying value of intangible assets may exceed their recoverable
amount and thus no impairment review was deemed necessary by the Directors.
The realisation of these intangibles assets is dependent on the successful
discovery and development of economic deposit resources and the ability of the
Group to raise sufficient finance to develop the projects. It is subject to a
number of potential significant risks, as set out below.
The Group's activities are subject to a number of significant potential risks
including:
· licence obligations;
· exchange rate risks;
· uncertainties over development and operational costs;
· political and legal risks, including agreements with
Governments for licences, profit sharing and taxation;
· foreign investment risks including increases in taxes,
royalties and renegotiation of contracts;
· title to assets;
· financial risk management;
· going concern; and
· ability to raise finance.
6. TRADE AND OTHER PAYABLES
30 June 23 30 June 22 31 Dec 22
£'000 £'000 £'000
Creditor - Western Gas - 550 553
Trade payables 35 48 57
Other payables 1,451 1,480 1,526
Cash received in advance of share placing - - 870
Related parties 13 - 5
Other accruals 12 10 16
1,511 2,088 3,027
Other payables relate to amounts due to Directors and a former Director for
remuneration accrued but not paid at period end.
7. SHARE CAPITAL
Deferred Shares - nominal value of 0.24p
Number Share Capital Share Premium
£'000 £'000
At 1 January 2022 - - -
At 30 June 2022 - - -
Transfer from ordinary shares 2,370,826,117 5,690 -
At 31 December 2022 and 30 June 2023 2,370,826,117 5,690 -
Ordinary Shares - nominal value of 0.01p
Allotted, called-up and fully paid:
Number Share Capital Share Premium
£'000 £'000
At 1 January 2022 870,826,117 2,177 10,985
Issued during the period 1,500,000,000 3,750 -
At 30 June 2022 2,370,826,117 5,927 10,985
Transfer to deferred shares (5,690) -
At 31 December 2022 2,370,826,117 237 10,985
Issued during the period 2,822,500,000 282 1,849
Share issue expenses - - (97)
At 30 June 2023 5,193,326,117 519 12,737
On 4 August 2022 the 2,370,826,117 issued ordinary shares of
0.25p each were subdivided via ordinary resolution into 2,370,826,117 ordinary
shares of 0.01p each and 2,370,826,117 deferred shares of 0.24p each.
Movements in issued share capital
On 16 January 2023 the Company raised £1,300,000 via a placing of 2 billion
new ordinary shares of 0.01p each, via several Australian based brokers, at a
price of 0.065p per share. In connection with the placing 97,500,000
warrants were issued to the brokers involved in the placing. Further
information is detailed in Note 8 below. The proceeds were used to advance the
Company's lithium projects in Bolivia, and petroleum projects in Ghana,
Australia, and elsewhere.
On 5 May 2023 as part of the Joint Venture agreement with NEXT-ChemX the
Company issued 385 million ordinary shares of 0.01p each at a price of 0.125p
to NEXT-ChemX. Further information is detailed in Note 5 above.
On 1 June 2023 the Company raised £350,000 via a placing of 437,500,000
ordinary shares of 0.01p each at a price of 0.08p per share. Proceeds raised
will be used to provide additional working capital and fund developments
costs.
8. SHARE BASED PAYMENTS
SHARE OPTIONS
The Group issues equity-settled share-based payments to certain Directors and
individuals who have performed services for the Group. Equity-settled
share-based payments are measured at fair value at the date of grant.
Fair value is measured by the use of a Black-Scholes model.
The Group plan provides for a grant price equal to the average quoted market
price of the ordinary shares on the date of grant.
30 Jun 23 30 Jun 22 31 Dec22
Options Number Weighted average exercise price in pence Options Number Weighted average exercise price in pence Options Number Weighted average exercise price in pence
'000 '000 '000
At 1 January 40,500 0.7 40,500 0.7 40,500 0.7
Issued 160,000 0.0725 - -
Outstanding at end of period 200,500 0.20 40,500 0.7 40,500 0.7
Exercisable at end of period 200,500 0.20 30,500 0.7 40,500 0.7
On 17 January 2023 a total of 160,000,000 options were granted with a fair
value of £106,632 to Directors and individuals who have performed services
for the Group. These fair values were calculated using the Black-Scholes
valuation model.
The inputs into the Black-Scholes valuation model were as follows:
Grant 17 January 2023
Weighted average share price at date of grant (in pence)
0.07p
Weighted average exercise price (in pence)
0.0725p
Expected volatility
144.39%
Expected life
7 years
Interest free rate
5%
Expected
dividends
none
Expected volatility was determined by management based on their cumulative
experience of the movement in share prices. The terms of the options granted
do not contain any market conditions within the meaning of IFRS 2.
The Group capitalised expenses of £Nil (2022: £Nil) and expensed costs of
£106,632 (2022: £61,695) relating to equity-settled share-based payment
transactions during the year.
Warrants
30 Jun 23 30 Jun 22 31 Dec22
Warrants Weighted average exercise price in pence Warrants Number Weighted average exercise price in pence Warrants Weighted average exercise price in pence
Number '000 Number
'000 '000
At 1 January 435,683 0.25 - - - -
Issued 97,500 0.065 435,683 0.25 435,683 0.25
Exercisable at end of period 533,183 0.22 435,683 0.25 435,683 0.25
On 16 January 2023 in connection with the share placing a total of 97,500,000
warrants were issued to the brokers involved with the placing. The warrants
have an exercise price of 0.065p.
9. POST BALANCE SHEET EVENTS
On 1 August 2023 the Company announced that the following long-term, incentive
share options have been granted over, in aggregate, 300,000,000 ordinary
shares of 0.01p each in the Company. The Options vest immediately, have an
exercise price of 0.10p and an expiry date of 30th July 2030.
The Options have been awarded as follows:
Number of Options Granted
David Horgan 115,000,000
James Finn 75,000,000
Peter O'Toole 75,000,000
Dipti Mehta 35,000,000
10. The Interim Report for the six months to 30 June 2023 was approved by the
Directors on 22 September 2023.
11. The Interim Report will be available on the Company's website at
www.clontarfenergy.com (http://www.clontarfenergy.com) .
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