REG - Clontarf Energy PLC - Interim Results for the period ended 30 June 2024
16/09/2024 07:00
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RNS Number : 2329E Clontarf Energy PLC 16 September 2024
16(th) September 2024
Clontarf Energy plc
("Clontarf" or the "Company")
Interim Statement for the period ended 30 June 2024
Clontarf Energy plc (AIM: CLON), the energy company focused on clean Bolivian
Lithium brines, as well as petroleum in Australia and Africa, announces its
unaudited financial results for the six months ended 30 June 2024:
Industry and Company Highlights
• Bolivia commits itself to accelerating its battery-grade Lithium
exports, with senior Government personnel changes announced, early contract
negotiations and reform of the Lithium Law.
• The EU is building a 'Team Europe' approach, passing a Critical
Resource Minerals Act, and deploying circa €4 billion from the Global
Gateway fund.
• Our JV partner is completing its pilot-plant at a trusted site near
Mumbai, India. Initial testing of samples is encouraging.
• The Bolivian authorities have verbally agreed to bulk samples, to be
collected and despatched with the assistance of state owned Yacimientos de
Litio Boliviano (YLB) once formal negotiations are underway.
• Initial negotiations and due diligence are underway between YLB and
'Stream 1' companies that claim to operate existing Direct Lithium Extraction
(DLE) plants.
• 'Stream 2' companies, with DLE technology close to production, are
expected to be invited for negotiations shortly. Clontarf has been assigned
to 'Stream 2' and its negotiators are already in Bolivia.
• Royalty increases through timely reform of the Lithium Law shows
local communities how they will benefit from the coming Lithium boom.
• Strong interest in long-term offtake contracts for reliable, high
purity clean Lithium from brines - at higher than current spot prices.
Chairman's Statement
Recent months have witnessed accelerated work on Clontarf's key projects on
several fronts - though information flow is constrained by regulatory
permissions and commercial sensitivity.
Attitudes and management of Critical Resource Minerals are being transformed
worldwide, as players grasp the scale and importance of securing adequate
supplies of clean materials. There are inadequate fresh projects to deliver
the anticipated demand.
Offtakers worldwide are now keenly aware of the need to secure reliable,
clean, as well as competitive materials. It is hard to express how
procurement attitudes have changed since 2000 - prompted by a successful
Chinese industrial policy, which Europe and the USA are now forced to counter.
We think of Washington and Brussels as slow-moving behemoths, but the fast
adoption and funding of the USA's Inflation Reduction Act, and the EU
Commission's Critical Resource Minerals Act, shows how fast policy-makers can
move when realisation of vulnerability dawns. The EU Commission has pulled
together a "Team Europe" of explorers, miners, processors and financiers to
deliver some measure of materials diversity.
The EU Commission's 'dream-team' focuses on practical steps necessary to
reduce dependence on mining and processing in potentially hostile regions.
Included are financiers, refiners, chemical production experts, state and EU
players, as well as explorers and developers. Operators like Clontarf are
key to achieving these objectives.
Though the EU was initially slow to react to Chinese, Japanese, and latterly
US legislation, the EU is free of post-imperial baggage, which has proven an
awkward legacy in Latin America. Past US interventions, and the 1832 Monroe
Doctrine cast a long shadow, and independently-minded countries are sensitive
to the appearance of over-dependence on one, albeit large market. This -
together with ready Chinese money and lesser governance standards - explains
the periodic flirtation of many rival countries with Russia and China.
Clontarf avoids such complications because its team has worked continuously in
different industries in many parts of Bolivia since 1986. We have become
part of the furniture and can be helpful to different governments as an
objective window on the world. We have dealt fruitfully with indigenous
communities - in the Bolivian highlands and elsewhere - for decades. This
was an important attraction for the EU institutions, as well as large
commercial partners and offtakers.
Simultaneously, Bolivia has committed itself to becoming a key supplier to all
key markets. This requires urgent de-bottlenecking of licensing, clearer
legal title, financing arrangements and high-throughput production of
battery-grade Lithium salts. For example, Clontarf saw how EU Global Gateway
funds can provide 20-year money at circa 3% interest for state-allocated
infrastructure projects to support new operations in fresh regions. This
effectively funds two-thirds of total capex, while meeting EU controls and
respecting Bolivian sovereignty.
Clontarf has sourced the 320 IBCs (Intermediate Bulk Containers), to ship the
bulk samples to Mumbai.
We originally planned to deploy a pilot-plant to one or more Bolivian salares
during summer 2024. Because of logistics and weather issues, the Bolivian
authorities opted for the operating companies to remain in their original
plant location, until YLB could conduct due diligence visits.
The Clontarf Energy JV has submitted a proposed action plan for the coming
months and years, subject to Bolivian rules and laws. We plan to collect
samples from at least 2 salares; ideally one of high Lithium grade and one
with both Lithium and Magnesium content. If we collect the samples during
October 2024, they can be trucked to the nearest sea-port and shipped to our
partners' Mumbai plant for January 2025 delivery. Clontarf Energy will
meanwhile have completed the necessary Indian paperwork with our partners.
On arrival at our partners' plant, the Bolivian bulk samples will be expedited
through the production process. We request a total of 320 tonnes since we
plan to optimize recovery and throughput not just for Lithium, but also for
Magnesium and other economic minerals.
This production process testing of the bulk samples and, hopefully including a
YLB visit may be completed during February / March 2025.
Assuming positive results, we propose agreement negotiations as soon as
appropriate.
Clontarf Energy is hoping to deploy a pilot plant (at a scale of 500 tonnes /
year) to a Bolivian site for arrival by mid-2025 (i.e. 6 to 7 months after
arrival of the bulk samples at the Indian plant), after which it will be
promptly commissioned, connected to power and brine sources, under applicable
laws and start work.
Longer-term, Clontarf Energy plans to deploy an additional production plant to
a total of 5 separate salares, adding a new plant every 6 months. Our plant
size will accord with any restrictions under law, initially at a scale of 500
tonnes / year.
But our long-term aim is to produce 150,000 tonnes of LCE by 2030.
Funding
Subject to technical verification of its exploration projects, and permitting,
Clontarf is confident of sourcing adequate funding, whether in London or
Australia, for near to medium term ongoing activities.
We seek to minimise political and geological risks.
Projected offtaker demand for clean high-purity Lithium cannot be met without
Bolivian supplies. Fortune favours the brave. The immediate future seems
bright.
David Horgan
Chairman
13 September 2024
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
David Asquith
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
Fia Long
Alan Reynolds
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Six Months Ended Year Ended
30 June 24 30 June 23 31 Dec 23
unaudited unaudited audited
£'000 £'000 £'000
Administrative expenses (334) (288) (696)
Impairment of exploration and evaluation assets (69) - (174)
LOSS BEFORE TAXATION (403) (288) (870)
Income Tax - - -
COMPREHENSIVE INCOME FOR THE PERIOD (403) (288) (870)
LOSS PER SHARE - basic and diluted (0.01p) (0.01p) (0.02p)
CONDENSED CONSOLIDATED BALANCE SHEET 30 June 24 30 June 23 31 Dec 23
unaudited unaudited audited
£'000 £'000 £'000
ASSETS:
NON-CURRENT ASSETS
Intangible assets 625 868 694
Investment in Joint Venture 888 888 888
1,513 1,756 1,582
CURRENT ASSETS
Other receivables - - -
Cash and cash equivalents 601 381 182
601 381 182
TOTAL ASSETS 2,114 2,137 1,764
LIABILITIES:
CURRENT LIABILITIES
Trade and other liabilities (1,439) (1,512) (1,460)
(1,439) (1,512) (1,460)
TOTAL LIABILITIES (1,439) (1,512) (1,460)
NET ASSETS 675 625 304
EQUITY
Called-up share capital 6,409 6,209 6,209
Share premium 13,195 12,737 12,737
Share based payment reserve 731 354 615
Retained deficit (19,660) (18,675) (19,257)
TOTAL EQUITY 675 625 304
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 2023 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
Share based payment charge - - 261 - 261
Total comprehensive income - (582) (582)
As at 31 December 2023 6,209 12,737 615 (19,257) 304
Shares issued 200 500 700
Share issue expenses - (42) - - (42)
Share based payment charge - - 116 - 116
Total comprehensive income - - - (403) (403)
As at 30 June 2024 6,409 13,195 731 (19,660) 675
CONDENSED CONSOLIDATED CASH FLOW Six Months Ended Year Ended
30 June 24 30 June 23 31 Dec 23
unaudited unaudited audited
£'000 £'000 £'000
CASH FLOW USED IN OPERATING ACTIVITIES
Loss for the period (403) (288) (870)
Impairment of exploration and evaluation assets 69 - 174
Share based payment charge 116 106 367
Exchange movements 1 2 (8)
(217) (180) (337)
Decrease in trade and other payables (21) (1,516) (1,568)
CASH USED BY OPERATIONS (238) (1,696) (1,905)
NET CASH USED IN OPERATING ACTIVITIES (238) (1,696) (1,905)
CASH FLOWS USED IN INVESTING ACTIVITIES
Payments for intangible assets - (406) (406)
NET CASH USED IN INVESTING ACTIVITIES - (406) (406)
CASH FLOW FROM FINANCING ACTIVITIES
Issue of shares 700 1,650 1,650
Share issue expenses (42) (97) (97)
NET CASH GENERATED FROM FINANCING ACTIVITIES 658 1,553 1,553
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 420 (549) (758)
Cash and cash equivalents at beginning of the period 182 932 932
Exchange variance on cash and cash equivalents (1) (2) 8
CASH AND CASH EQUIVALENT AT THE END OF THE PERIOD 601 381 182
Notes:
1. INFORMATION
The financial information for the six months ended 30 June 2024 and the
comparative amounts for the six months ended 30 June 2023 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 2023 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 £403,233 (2023: loss of
£870,061) and had net current liabilities of £837,583 (2023: £1,277,374) 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
£910,082 (2023: £988,926) owed to directors in respect of directors'
remuneration due at the balance sheet date.
The Group had a cash balance of £600,757 (2023: £182,516) at the balance
sheet date. The directors have prepared cashflow projections for a period of
at least 12 months from the date of approval of the financial statements which
indicate that the group may require additional finance to fund working capital
requirements and develop existing projects. As the Group is not revenue or
cash generating it relies on raising capital from the public market.
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 24 30 June 23 31 Dec 23
£'000 £'000 £'000
Loss for the year attributable to equity holders (403) (288) (870)
Denominator Number Number Number
For basic and diluted EPS 6,025,351,235 4,385,660,371 4,791,613,788
Basic and diluted EPS (0.01p) (0.01p) (0.02p)
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 24 30 June 23 31 Dec 23
£'000 £'000 £'000
Exploration and evaluation assets
Cost:
At 1 January 12,735 12,735 12,735
Additions - - -
Closing Balance 12,735 12,735 12,735
Impairment:
At 1 January 12,041 11,867 11,867
Provision for impairment 69 - 174
Closing Balance 12,110 11,867 12,041
Carrying value:
At 1 January 694 868 868
At period end 625 868 694
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.
As ratification had not yet been achieved in the prior year the directors, as
a matter of prudence, opted to write down 20% of the carrying value of the
Tano 2A Block historic expenditure. Accordingly, an impairment charge of
£173,609 was recorded in the prior year. In the current period the
directors impaired a further £69,442 of the historical costs.
The directors believe that there were no facts or circumstances indicating
that the carrying value of the remaining intangible assets may exceed their
recoverable amount and thus no additional 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. INVESTMENT IN JOINT VENTURE
30 June 24 30 June 23 31 Dec 23
£'000 £'000 £'000
Cost:
At 1 January 888 - -
Additions - 888 888
Closing Balance 888 888 888
Carrying value:
At period end 888 888 888
On 15 February 2023 the Group 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
Extraction ("DLE") technology in Bolivia. Formation of the JV was subject to
final due diligence and the parties entering into formal documentation.
The terms of the JV are:
§ A 50:50 joint venture company to be formed on completion of due
diligence covering the exclusive rights to the marketing, testing and
deployment of the NCX DLE technology in Bolivia.
§ Clontarf Energy plc to contribute $500,000 in cash towards the pilot
plant construction and testing as an exclusivity fee for the use of the NCX
technology.
§ NCX will then issue shares equal to $500,000 at its next financing
(CHMX:OTC) to Clontarf Energy plc.
§ Clontarf Energy plc will issue shares as follows to NCX:
i. 385 million new Ordinary Shares on proceeding with the Pilot
Plant;
ii. 250 million new Ordinary Shares after successful pilot processing
of Bolivian brines through the NCX pilot plant; and
iii. 250 million new Ordinary Shares after entry into a construction and
processing contract between the JV and the Bolivian authorities on processing
of Bolivian brines utilising NCX processing technology.
On 5 May 2023 the Company announced that all
conditions precedent had been satisfied with respect to the JV with NCX coming
into force. In this regard, Clontarf paid NCX US$500,000 and issued 385
million new Ordinary Shares in the capital of Clontarf of which half will be
subject to a 12-month lock in requirement.
As at 30 June 2024 no trading activity had commenced in the JV and as such
there are no results or expenses recorded.
7. SHARE CAPITAL
Deferred Shares - nominal value of 0.24p
Number Share Capital Share Premium
£'000 £'000
At 1 January 2023 2,370,826,117 5,690 -
At 31 December 2023 and 30 June 2024 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 2023 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
Issued during the period - - -
At 31 December 2023 5,293,326,117 519 12,737
Issued during the period 2,000,000,000 200 500
Share issue expenses - - (42)
At 30 June 2024 7,293,326,117 719 13,195
Movements in issued share capital
On 18 March 2024 the Company raised £400,000 via a placing of 1,142,857,143
ordinary shares of 0.01p each at a price of 0.035p per share. Proceeds raised
will be used to provide additional working capital and fund developments
costs.
On 23 May 2024 the Company raised £300,000 via a placing of 857,142,857
ordinary shares of 0.01p each at a price of 0.035p 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 24 30 Jun 23 31 Dec 23
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 500,500 0.03 40,500 0.7 40,500 0.7
Issued 320,000 0.0365 160,000 0.0725 460,000 0.08
Outstanding at end of period 820,500 0.1 200,500 0.2 500,500 0.3
Exercisable at end of period 820,500 0.1 200,500 0.2 500,500 0.3
On 9 April 2024 a total of 160,000,000 options were granted with a fair value
of £56,981 to Directors and individuals who have performed services for the
Group. On 16 June 2024 a total of 160,000,000 options were granted with a fair
value of £59,321 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 9 April 2024
Weighted average share price at date of grant (in
pence) 0.0365p
Weighted average exercise price (in pence)
0.0365p
Expected volatility
165.90%
Expected life
7 years
Interest free rate
4.25%
Expected dividends
none
Grant 17 June 2024
Weighted average share price at date of grant (in
pence) 0.0385p
Weighted average exercise price (in pence)
0.0385p
Expected volatility
153.03%
Expected life
7 years
Interest free rate
4.25%
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 (2023: £Nil) and expensed costs of
£116,303 (2023: £106,632) relating to equity-settled share-based payment
transactions during the year.
Warrants
30 Jun 24 30 Jun 23 31 Dec23
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 533,183 0.22 435,683 0.25 435,683 0.25
Issued - - 97,500 0.065 97,500 0.065
Exercisable at end of period 533,183 0.22 533,183 0.22 533,183 0.22
There were no warrants issued in the current period.
9. POST BALANCE SHEET EVENTS
There are no significant post balance sheet events affecting the Company.
10. The Interim Report for the six months to 30 June 2024 was approved by the
Directors on 13 September 2024.
11. The Interim Report will be available on the Company's website at
www.clontarfenergy.com (http://www.clontarfenergy.com) .
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