REG - Clontarf Energy PLC - Preliminary Results for the Year Ended 31 Dec 2020
19th May 2021
Clontarf Energy plc
("Clontarf" or "the Company")
Preliminary Results for the Year Ended 31 December 2020
Clontarf Energy, the oil and gas exploration company focused on Ghana and Bolivia today announces its preliminary results for the year ending 31 December 2020.
The Company expects to shortly publish its 2020 Annual Report & Accounts and a further update will be made in this regard as and when appropriate.
This announcement contains inside information for the purposes of Article 7 of Regulation 596/2014.
For further information please visit http://clontarfenergy.com or contact:
Clontarf Energy
John Teeling, Chairman
David Horgan, Director
+353 (0) 1 833 2833
Nominated & Financial Adviser
Strand Hanson Limited
Rory Murphy
Ritchie Balmer
Georgia Langoulant
+44 (0) 20 7409 3494
Broker
Novum Securities Limited
Colin Rowbury
+44 (0) 207 399 9400
Public Relations
Blytheweigh - PR
Megan Ray
Alice McLaren
Madeleine Gordon-Foxwell
+44 (0) 207 138 3206
+44 (0) 207 138 3553
+44 (0) 207 138 3206
Teneo
Luke Hogg
Alan Tyrrell
Ciara Wylie
+353 (0) 1 661 4055
+353 (0) 1 661 4055
Statement Accompanying the Final Results
As I wrote the Chairman's Statement one year ago the world was in a turbulent state. Thousands dying, the world economy imploding and nothing but doom and gloom everywhere. One year later, thanks to the brilliant minds of two Turkish doctors and one Hungarian creating the MRNA vaccines, two of the three, female, there is hope and optimism. Technology and production facilities were mobilised to do in months what previously took years. Already economies are opening up, and indeed booming. World growth rates for 2021 are being revised upwards and in those countries with high levels of vaccinations, growth rates will surpass anything seen in recent decades. For commodities, unprecedented falls in demand are being replaced by rapid growth. There is discussion of a Super Cycle in commodities.
Exploration companies live on hope and optimism. As well as hope, we sell romance, mystery and potential. The collapse in exploration was understandable and the lifeblood of speculative investing has yet to return, though there are a few positive signs.
Clontarf is an early stage explorer. Clontarf has ongoing interests in an oil block offshore Ghana and in proposals for lithium brine in Bolivia. You will note in the Review of Operations that we have revisited Chad, an emerging oil producer, and are part of a consortium bidding for offshore acreage in Nigeria.
For more than a decade we have tried to ratify a 2010 agreement on Tano block 2A offshore Ghana (60% Clontarf). It is a good block which explains why various interests want to be involved. Progress had been made in late 2019 and early 2020, however the cessation of international travel has stopped essential meetings. Zoom and telephone calls continue but face to face meetings are required. After more than a decade of frustration I cannot offer a timetable to a solution. But the Tano acreage offers upside.
Lithium in Bolivia is a very exciting possibility. The battle between Petrol / Diesel and Electric Engines is won by Electric Vehicles. It will take time and there will be delays but within the foreseeable future automobiles will be electric.
Electric engines need lithium. It is in scarce supply. Bolivia is known to hold 60% of world resources in the form of lithium brines in numerous salt pans high in the Andes. Therein lies some of the issues. The deposits are often at elevations above 14,000 feet with no infrastructure, little water and lower oxygen - not easy. Further some of the brines contain elements which make processing to battery grade lithium difficult. Clontarf have worked for a decade with various authorities in Bolivia. In recent times we have focused on smaller salt pans containing higher grades and purer brines. We have worked with the current authorities to submit proposals acceptable to the government who are keen to maintain majority control. We have brought skills to the country and believe that we can work together to develop the lithium industry. It will happen, we would like to be part of it.
Two decades ago we were active in Chad, a landlocked country in the Sahel Desert. Oil was discovered and developed by multinationals. Problems arose and development stalled. We have returned to the country and believe that significant opportunities exist. Working with local partners we have presented non-binding proposals to the Chadian authorities to acquire an exploration block. It is early stage and there is no guarantee that a successful outcome will be achieved. Further updates will be provided if appropriate.
Similarly, in Nigeria, we are once again active. We are part of a local consortium which has submitted a non-binding bid for an offshore block. Again, it is early stage and there is no guarantee that a successful outcome will be achieved. Further updates will be provided if appropriate.
Conclusion
The world is in a far better state now than this time last year. Hope has replaced fear. Once again spending is rising as pent-up demand bursts forth. The oil price is at a level attractive to new investment. The structural move to electric vehicles (EVs) offers major possibilities for lithium producers.
Exploration companies spend money usually without any revenue. Clontarf is fortunate with a listed share which has significant market liquidity which allows the raising of fresh capital. We are fully funded, after a recent funding in May 2021, for at least the next eighteen months.
John Teeling
Chairman
18th May 2021
CLONTARF ENERGY PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2020
2020
2019
£
£
Administrative expenses
(361,308)
(308,535)
LOSS FOR THE YEAR BEFORE TAXATION
(361,308)
(308,535)
Income tax expense
-
-
LOSS AFTER TAX AND TOTAL
COMPREHENSIVE INCOME FOR THE YEAR
(361,308)
(308,535)
Loss per share - basic and diluted
(0.05p)
(0.04p)
CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2020
2020
2019
£
£
ASSETS:
NON CURRENT ASSETS
Intangible assets
915,117
850,789
915,117
850,789
CURRENT ASSETS
Other receivables
1,786
3,344
Cash and cash equivalents
89,423
301,292
91,209
304,636
TOTAL ASSETS
1,006,326
1,155,425
LIABILITIES:
CURRENT LIABILITIES
Trade payables
(66,140)
(56,195)
Other payables
(1,300,567)
(1,180,567)
(1,366,707)
(1,236,762)
TOTAL LIABILITIES
(1,366,707)
(1,236,762)
NET LIABILITIES
(360,381)
(81,337)
EQUITY
Called-up share capital
1,792,450
1,792,450
Share premium
10,900,373
10,900,373
Retained deficit
(13,157,083)
(12,795,775)
Share based payment reserves
103,879
21,615
TOTAL EQUITY
(360,381)
(81,337)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2020
Called-up
Share Based
Share
Share
Payment
Retained
Capital
Premium
Reserve
Deficit
Total
£
£
£
£
£
At 1 January 2019
1,792,450
10,900,373
191,646
(12,677,836)
206,633
Share options vested
-
-
20,565
-
20,565
Share options expired
-
-
(190,596)
190,596
-
Loss for the year and
total comprehensive income
-
-
-
(308,535)
(308,535)
At 31 December 2019
1,792,450
10,900,373
21,615
(12,795,775)
(81,337)
Share options vested
-
-
82,264
-
82,264
Loss for the year and
-
-
-
(361,308)
(361,308)
total comprehensive income
-
At 31 December 2020
1,792,450
10,900,373
103,879
(13,157,083)
(360,381)
Share premium
The share premium reserve comprises of a premium arising on the issue of shares. Share issue expenses are deducted against the share premium reserve when incurred.
Share based payment reserve
The share based payment reserve arises on the vesting of share options under the share option plan. Share options expired are reallocated from share based payment reserve to retained deficit at their grant date fair value.
Retained deficit
Retained deficit comprises of losses incurred in the current and prior years.
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2020
2020
2019
£
£
CASH FLOW USED IN OPERATING ACTIVITIES
Loss for the year
(361,308)
(308,535)
Share options vested
51,415
20,565
Foreign exchange gains
102
4,697
(309,791)
(283,273)
MOVEMENTS IN WORKING CAPITAL
Increase in trade and other payables
99,945
80,057
Decrease in trade and other receivables
1,558
565
101,503
80,622
NET CASH USED IN OPERATING ACTIVITIES
(208,288)
(202,651)
CASH FLOWS USED IN INVESTING ACTIVITIES
Additions to exploration and evaluation assets
(3,479)
(2,924)
NET CASH FROM INVESTING ACTIVITIES
(3,479)
(2,924)
NET DECREASE IN CASH AND CASH EQUIVALENTS
(211,767)
(205,575)
Cash and cash equivalents at beginning of the financial year
301,292
511,564
Effect of foreign exchange rate changes
(102)
(4,697)
CASH AND CASH EQUIVALENTS
AT END OF THE FINANCIAL YEAR
89,423
301,292
Notes:
1. ACCOUNTING POLICIES
There were no changes in accounting policies from those used to prepare the Group's Annual Report for financial year ended 31 December 2019. The financial statements have been prepared in accordance with International Financial Reporting Standards and IFRSs as adopted by the European Union and in accordance with the Companies Act 2006.
2. LOSS PER SHARE
Basic loss per share is computed by dividing the loss after taxation for the year available 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):
2020
2019
£
£
Numerator
For basic and diluted EPS
(361,308)
(308,535)
Denominator
For basic and diluted EPS
716,979,964
716,979,964
Basic EPS
(0.05p)
(0.04p)
Diluted EPS
(0.05p)
(0.04p)
The following potential ordinary shares are anti-dilutive and are therefore excluded from the weighted average number of shares for the purpose of the diluted earnings per share:
No. No
Share options 40,500,000 40,500,000
3. GOING CONCERN
The Group incurred a loss for the year of (£361,308) (2019: £308,535), had net current liabilities of £1,275,498 (2019: £932,126) and net liabilities of (£360,381) (2019: £81,337) 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 £1,300,567 (2019: £1,180,567) owed to directors 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 for a period of at least one year after the date of approval of the financial statements or until the Group has generated sufficient funds from its operations after paying its third party creditors.
The Group had a cash balance of £89,423 (2019: £301,292) at the balance sheet date. The directors have prepared cashflow projections for a period of at least 12 months from the date of report which indicate that the group will require additional finance to fund working capital requirements and develop existing projects. The cashflow projections include any anticipated impacts of the Covid-19 pandemic on the Group. The scale and duration of these impacts remain uncertain as at the date of this report, however they are not significantly impacting the Group's operations. As the Group is not revenue or cash generating it relies on raising capital from the public market. On 6th May 2021 the group raised £500,000 by placing 153,846,153 new ordinary shares. Further details are outlined in note 9.
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. INTANGIBLE ASSETS
2020
2019
Group
Group
Exploration and evaluation assets:
£
£
Cost:
At 1 January
8,561,001
8,528,077
Additions during the year
64,328
32,924
At 31 December
8,625,329
8,561,001
Impairment:
At 1 January
7,710,212
7,710,212
Impairment during the year
-
-
At 31 December
7,710,212
7,710,212
Carrying Value:
At 1 January
850,789
817,865
At 31 December
915,117
850,789
Segmental analysis
2020
2019
Group
Group
£
£
Bolivia
62,074
16,225
Ghana
853,043
834,564
915,117
850,789
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 High 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.
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:
· licence obligations;
· exchange rate risks;
· uncertainties over development and operational costs;
· political and legal risks, including arrangements 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;
· ability to raise finance; and
· operational and environmental risks.
Included in the additions for the year are £60,849 (2019: £30,000) of directors' remuneration. The remaining balance pertains to the amounts capitalised to the respective projects held by the entity.
5. TRADE PAYABLES
2020
2019
Group
Group
£
£
Trade payables
40,140
38,195
Other accruals
26,000
18,000
66,140
56,195
It is the Company's normal practice to agree terms of transactions, including payment terms, with suppliers and provided suppliers perform in accordance with the agreed terms, payment is made accordingly. In the absence of agreed terms it is the Company's policy that payment is made between 30 - 40 days. The carrying amount of trade and other payables approximates to their fair value.
6. OTHER PAYABLES
2020
2019
Group
Group
£
£
Amounts due to directors
1,300,567
1,180,567
1,300,567
1,180,567
Other payables relate to amounts due for directors' remuneration of £1,300,567 (2019: £1,180,567) accrued but not paid at year end.
7. CALLED-UP SHARE CAPITAL
Allotted, called-up and fully paid:
Number
Share Capital
Share Premium
£
£
At 1 January 2019
716,979,964
1,792,450
10,900,373
Issued during the year
-
-
-
At 31 December 2019
716,979,964
1,792,450
10,900,373
Issued during the year
-
-
-
At 31 December 2020
716,979,964
1,792,450
10,900,373
Share Options
A total of 40,500,000 share options were in issue at 31 December 2020 (2019: 40,500,000). These options are exercisable, at prices ranging between 0.70p and 0.725p, up to seven years from the date of granting of the options unless otherwise determined by the board.
8. SHARE BASED PAYMENTS
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. Shares issued to individuals and directors will vest 3 years from the period that the awards relate.
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.
2020 2019
Weighted Weighted
average average
30/06/2020 exercise price 30/06/2019 exercise price
Options in pence Options in pence
Outstanding at beginning of year 40,500,000 0.7 8,900,000 4.25
Issued - - 40,000,000 0.7
Expired - - (8,400,000) 4.25
Outstanding at end of the year 40,500,000 0.7 40,500,000 0.7
Exercisable at end of the year 27,166,667 0.7 13,833,333 0.7
During the prior year 40,000,000 options were granted with a fair value of £246,788. These fair values were calculated using the Black-Scholes valuation model. These options will vest over a 3 year period and will be capitalized or expensed on a straight line basis over the vesting period.
The inputs into the Black-Scholes valuation model were as follows:
Grant 2 October 2019
Weighted average share price at date of grant (in pence) 0.7p
Weighted average exercise price (in pence) 0.7p
Expected volatility 116.23%
Expected life 7 years
Risk free rate 1.3%
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 £30,849 (2019: £Nil) and expensed costs of £51,415 (2019: £ 20,565) relating to equity-settled share-based payment transactions during the year.
9. POST BALANCE SHEET EVENTS
On 6 May 2021 the Company announced that it had raised £500,000 via the placing of 153,846,153 ordinary shares with new and existing investors at a price of 0.325p per placing share.
10. ANNUAL GENERAL MEETING
The Company's Annual General Meeting will be held on Wednesday 23rd June 2021 at Granite Exchange, 5-6 Kildare St, Newry BT34 1DQ at 11.00 am. Further information, including the Notice of AGM, will be provided shortly.
11. GENERAL INFORMATION
The financial information set out above does not constitute the Company's audited financial statements for the year ended 31 December 2020 or the year ended 31 December 2019. The financial information for 2019 is derived from the financial statements for 2019 which have been delivered to the Registrar of Companies. The auditors had reported on the 2019 statements; their report was unqualified with an emphasis of matter in respect of considering the adequacy of the disclosures made in the financial statements concerning the valuation of intangible assets, and did not contain a statement under section 498(2) or 498(3) of the Companies Act 2006. The financial statements for 2020 will be delivered to the Registrar of Companies.
A copy of the Company's Annual Report and Accounts for 2020 will be mailed shortly only to those shareholders who have elected to receive it. Otherwise, shareholders will be notified that the Annual Report will be available on the website www.clontarfenergy.com . Copies of the Annual Report will also be available for collection from the Company's registered office, Suite 1, 3rd Floor, 11-12 St. James's Square, London, SW1Y 4LB.
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