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RNS Number : 9066N Cobra Resources PLC 28 September 2023
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
REGULATION 2014/596/EU WHICH IS PART OF DOMESTIC UK LAW PURSUANT TO THE MARKET
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28 September 2023
Cobra Resources plc
("Cobra" or the "Company")
Half Year Results for the Six Months Ended 30 June 2023
Cobra, a gold, rare earth and IOCG exploration company focused on the Wudinna
Project in South Australia, announces its financial results for the six months
ended 30 June 2023 ("H1 2023").
Highlights:
· Announced maiden rare earth ("REE") Mineral Resource Estimate ("MRE")
of 20.9 Mt at 658 ppm Total Rare Earth Oxides ("TREO") in saprolite above and
proximal to gold mineralisation, providing economic advantages in reducing
mining and recovery costs
· Reported results of a slim-line Reverse Circulation ("RC") drilling
campaign aimed at extending gold and REE mineralisation at the Clarke
prospect, where drilling increased the strike of mineralisation to over 600m
and demonstrated further continuity of broad saprolite REE enrichment
· Completed geophysical work at Clarke prospect, defining further gold
and REE targets
· Achieved Stage 3 expenditure obligations to increase ownership of the
Wudinna Project to 75%
· Completed a 20-hole, 2,466m RC drill programme that contributed to a
post period-end Gold MRE increase of 32% to 279,000 Oz
· Undertook 95-hole, 3,950m REE Aircore ("AC") drilling programme
across seven key target areas, aimed at growing the existing REE resource and
testing an alternate palaeo-channel hosted model for ionic REEs
o Drilling resulted in the post period-end transformational discovery of
ionic, easily recoverable REE mineralisation at the Boland prospect, where
recoveries of Magnet Rare Earth Oxides ("MREOs") of up to 58% and Heavy Rare
Earth Oxides ("HREOs") of up to 65% were achieved under desorption conditions
(pH3)
o The programme contributed to a Rare Earth MRE update that increased the
resource by 109% in metal content to 41.6 Mt at 699 ppm TREO but does not yet
include any resources for the Boland ionic REE discovery
Greg Hancock, Chairman of Cobra, commented:
"The period culminated in what may be one of the most important developments
in the Australian rare earths sector - the Boland discovery of proven ionic
rare earth mineralisation in palaeo-channel which is amenable to low-cost,
low-disturbance in situ recovery using well established techniques in South
Australia. This is globally unique and a result of exceptional technical
competency for which I congratulate Rupert Verco and Robert Blythman in
particular.
Through the execution of our 2023 work programme to date, we have made a
material advancement of both our unique and complementary gold and rare earth
resources. We will now focus on delivering commercial outcomes from advancing
these resources towards production. At Boland, we will do this through
cost-effective exploration, whilst we work towards demonstrating the economic,
social, and environmental benefits of in situ recovery."
The full financial statements can be viewed on the Company's website at:
https://cobraplc.com/category/financial-reports/
(https://cobraplc.com/category/financial-reports/)
Enquiries:
Cobra Resources plc via Vigo Consulting
Rupert Verco (Australia) +44 (0)20 7390 0234
Dan Maling (UK)
SI Capital Limited (Joint Broker) +44 (0)1483 413 500
Nick Emerson
Sam Lomanto
Shard Capital Partners LLP (Joint Broker) +44 (0)20
7186 9952
Erik Woolgar
Damon Heath
Vigo Consulting (Financial Public Relations) +44 (0)20 7390 0234
Ben Simons
Kendall Hill
The person who arranged for the release of this announcement was Rupert Verco,
Managing Director of the Company.
About Cobra
Cobra is defining a unique multi-mineral resource at the Wudinna Project in
South Australia's Gawler Craton, a tier one mining and exploration
jurisdiction which hosts several world-class mines. Cobra's Wudinna tenements
totalling 1,832 km(2), and other nearby tenement rights totalling 1,429 km(2),
contain highly desirable and ionic rare earth mineralisation, amenable to
low-cost, low impact in situ recovery mining, and critical to global
decarbonisation.
Cobra's Wudinna tenements also contain extensive orogenic gold mineralisation
and are characterised by potentially open-pitable, high-grade gold
intersections, with ready access to infrastructure. Cobra has 22 orogenic gold
targets outside of the current 279,000 Oz gold JORC Mineral Resource Estimate.
Follow us on social media:
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(https://twitter.com/Cobra_Resources)
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Operational Review
The Company's dual pronged strategy has been driven by the principle that to
define a rare earth project of true value, the mineral occurrence requires
advantageous properties that:
· Can be mined at a low-cost
· Can be cost-effectively processed, where mineralogy and lithology
drive economic metallurgy
· Allow sustainable sourcing, through value-add or low-impact
extraction
On this basis, Cobra's exploration strategy has been focused on:
1. Exploring for ionic, easily extractable rare earth mineralisation
2. Advancing dual, complementary gold and REE resources, where REE
mineralisation exists in gold overburden
Ionic REE Exploration
The Company advanced an alternate model for ionic REE mineralisation based on
the research and development work carried out in 2022, where the geological
processes of enrichment, mobilisation and adsorption were tested and analysed.
Important findings that were identified and used to propose an alternate
exploration model were:
· Enrichment: primary REE enrichment was most prominent in
alteration associated with Hiltaba Suite intrusives, where alteration mineral
assemblages contained REE bearing epidote, titanite, zircon, monazite, and
xenotime
· Mobilisation: Hiltaba and Sleaford age granites are enriched in
sulphides, predominately pyrite and pyrrhotite. Sulphide abundances increase
proximal to gold mineralisation. Through weathering, these sulphides break
down to produce sulphuric acid. These acidic conditions are responsible for
the mobilisation of primary REEs (and gold) and produce secondary enrichment
within the saprolite horizon
· Adsorption: through the testing of pH, the Company was able to
determine that the abundance of REEs within the saprolite was associated with
discrete changes in acidity/alkalinity, with grades being highest at weak pH
conditions (pH 6-7) and highly alkaline conditions (pH 9 - 11)
· Preservation: kaolinised saprolite is oxidised, even when acidic,
the nature clay adsorbed REEs has structurally stabilised over time. This is
supported by metallurgical testing of saprolite hosted REEs demonstrating
that, whilst initial recoveries are promising, standard desorption processes
show that only a small quantity of REE mineralisation is ionically bound.
Higher quantities are colloidal or secondary phase mineralisation that
requires increased acidity for recovery
With these findings in mind, Cobra considered alternate geological settings
that may have preserved the correct conditions for ionically adsorbed REEs.
The anoxic environment of the Eocene-aged Narlaby palaeo-channel at the Boland
target was considered a priority target to test this concept. This approach
has been rewarded.
REE Focused Outcomes
A total of 95 AC holes for 3,950m were drilled across eight prospects, where:
· 20 holes were drilled at the Boland prospect to test the
proof-of-concept for palaeo-channel hosted REEs. Results confirmed
proof-of-concept with HREO enrichment being observed in channel clays and
ionic REE mineralisation validated through desorption metallurgy
· 45 holes were drilled with the aim of expanding the complementary
REE resource, through testing defined zones of enrichment and areas that could
positively influence mining optimisation parameters. Results demonstrate
further high grades >1,000 ppm TREO over broad intersections, with drilling
contributing to doubling the MRE estimate
· A further 20 holes were drilled across the Grace and Bradman
targets, where high-grade intersections were observed in saprolite, and
mobility and enrichment were demonstrated at the Bradman prospect where grades
were enriched when in contact with the shallow palaeo-system
Gold Focused Outcomes
During the period, gold exploration was focused on resource extensions across
the existing resources and to improve definition at the Clarke prospect to
incorporate into an updated MRE.
A total of 20 RC holes (2,466m) and 10 AC holes were drilled to target gold
MRE increases. Gold mineralisation at Clarke was increased beyond 700m in
strike, where drilling results subsequently contributed to a post period-end
gold MRE update increasing contained gold ounces by 32% to 279,000 Oz.
This work contributed to the achievement of Stage 3 expenditure obligations to
increase Cobra's ownership of the Wudinna Project to 75%. The Company is
working with its Wudinna partner Andromeda Metals Ltd (owners of Peninsula
Resources Pty Ltd) to define the best ownership structure to build upon the
exploration results delivered to date and advance the project towards
commercialisation. This includes identifying alternate partners or production
options for the defined gold resources that would reduce CAPEX requirements
and bring forward economic scoping.
Post Period-End
In September 2023, the Company announced an update to its unique and
economically advantageous dual gold and REE MRE.
· Upgraded REE MRE includes:
o +99% increase in tonnes
o +5% increase in Magnet Rare Earth Oxide ("MREO") grade
o +109% increase in MREO metal content
o Does not yet include any resources from ionic REE discovery at Boland
· Upgraded Gold MRE includes:
o +32% increase in gold metal (+68,000 Oz)
o +1.4Mt increase in ore tonnes
o 33,000 Oz maiden MRE estimate at the Clarke prospect
The updated MRE estimates are detailed in the table below:
Gold Mineral Resource Estimate Rare Earth Mineral Resource Estimate
Category Deposit Tonnes Au Ounces Tonnes TREO MREO LREO HREO Pr(6)O(11) Nd(2)O(3) Dy(2)O(3) Tb(4)O(7)
Mt g/t oz Mt ppm ppm ppm ppm ppm ppm ppm ppm
Indicated Barns 0.44 1.3 18,000 - - - - - - - - -
Inferred 2.19 1.6 116,000 - - - - - - - - -
Inferred Baggy Green 2.12 1.4 96,000 15.1 652 142 512 140 29 97 14 2
Inferred Clarke 0.73 1.4 33,000 26.5 725 175 571 154 35 122 16 3
Inferred White Tank 0.33 1.5 16,000 - - - - - - - - -
Total 5.81 1.5 279,000 41.6 699 163 549 149 33 113 15 3
Cobra also announced in September 2023 the results of REE metallurgical tests
performed by the Australian Nuclear Scientific Technology Organisation.
Ionic metallurgy was confirmed by rapid recoveries from desorption leaching
within 30 minutes using ammonium sulphate in weak acid conditions (pH4), with
low acid consumption and low dissolution of gangue elements, where:
· Further increases in REE recovery were demonstrated through increased
leach time (six hours) and a slight increase in acidity (pH3), where maximum
extractions of 58% MREOs and 65% HREOs were achieved
· Low acid consumption of 6-30 kg/t supports very positive economic
metrics for further processing optimisation
· Low rates of dissolution of gangue elements (aluminium, calcium,
iron, thorium, and uranium)
Other Developments
The Company has increased its focus on marketing the unique opportunities that
the Wudinna Project presents. This has included two UK focused awareness
roadshows, a number of speaking engagements, and the exploration of strategic
investment and commercial opportunities for REEs.
The Boland discovery contains mineralogy and geology components that have both
low-cost extraction and industry-leading sustainability potential, and Cobra
has been actively engaging stakeholders to educate them on the opportunities
that this discovery presents whilst working with them to define future work
programmes.
To further advance this discovery, the Company formed a partnership with
Watercycle Technologies, a deep tech company based in Manchester, UK, in
September 2023. Through this partnership, Cobra endeavours to develop a
sustainable flow sheet for in situ recovery extraction of REEs whilst
evaluating other value add outcomes.
A further two exploration licence applications have been submitted to expand
on the Boland discovery to make Cobra the dominant landholder on the Narlaby
palaeo-channel.
Financial Review
Cobra reported an unaudited operating loss for the six months ended 30 June
2023 of £307,101, which equates to a loss per share for the period of
£0.0006. This compares to a loss for the six- month period to 30 June 2022 of
£226,953, which equated to a loss per share for the period of £0.0005.
As at 30 June 2023, the Company had available cash of £0.43 million (30 June
2022: £0.79 million), sufficient for the Company to execute its planned
exploration activities.
Outlook
Cobra's immediate focus for H2 2023 is to advance its Boland discovery
through:
· Drilling sonic core holes to better understand mineralogy, install
monitoring wells and provide samples for advanced metallurgical studies
· Building baseline environmental and hydrological datasets to support
future environmental and regulatory approvals
· Re-analysing historical palaeo-channel samples to demonstrate ionic
REE scalability
Cobra has demonstrated significant exploration success through prioritising
allocating expenditure to high-value exploration activities. This will be the
Company's strategy to deliver long-term wealth to its shareholders from the
wider Wudinna Project.
Greg Hancock
Chairman
27 September 2023
Consolidated Income Statement
6 months to 6 months to Year ended
30 June 2023 30 June 2022 31 December 2022
Unaudited Unaudited Audited
£ £ £
Administrative expenses (307,101) (226,953) (509,138)
Operating loss (307,101) (226,953) (509,138)
Loss on derecognition of financial liability
- - -
Loss on ordinary activities before taxation (307,101) (226,953) (509,138)
Taxation - - -
Loss for the financial period attributable to equity holders
(307,101) (226,953) (509,138)
Loss per share - see note 4
Basic and diluted £(0.0006) £(0.0005) £(0.0010)
Consolidated Statement of Comprehensive Income
6 months to 6 months to Year ended 31 December 2022
30 June 2023 30 June 2022
Unaudited Unaudited Audited
£ £ £
Loss after tax (307,101) (226,953) (509,138)
Items that may subsequently be reclassified to profit or loss:
- Exchange differences on translation of foreign operations (200,654) 145,372 290,754
Total comprehensive loss attributable to equity holders of the parent company
(507,755) (81,579) (218,384)
Consolidated Statement of Financial Position
6 months to 30 June 2023 6 months to 30 June 2022 Year ended 31 December 2022
Unaudited Unaudited Audited
£ £ £
Non-current assets
Intangible assets 3,067,616 2,329,471 2,727,290
Property, plant and equipment 1,545 1,428 1,428
Total non-current assets 3,069,161 2,330,899 2,728,718
Current assets
Trade and other receivables 51,453 57,724 84,469
Cash and cash equivalents 434,451 788,192 1,272,742
Restricted cash 30,450 - -
Total current assets 516,354 845,916 1,357,211
Current liabilities
Trade and other payables (87,339) (48,272) (79,999)
Deferred consideration (148,914) (187,500) (148,914)
Total current liabilities (236,253) (235,772) (228,913)
Net assets 3,349,262 2,941,043 3,857,016
Capital and reserves
Share capital 5,152,495 4,231,103 5,152,495
Share premium 2,794,647 1,693,563 2,794,647
Share based payment reserve (16,908) 962,201 (16,908)
Retained losses (4,655,282) (4,075,408) (4,348,182)
Foreign currency reserve 74,310 129,584 274,964
Total equity 3,349,262 2,941,043 3,857,016
Consolidated Statement of Cash Flows
6 months to 6 months to 30 June 2022 Year ended
30 June 2022 31 December 2022
Unaudited Unaudited Audited
£ £ £
Cash flow from operating activities
Operating loss (307,101) (226,952) (509,138)
Equity settled share based payment - - 49,000
Depreciation (118) 250 252
Foreign exchange (200,653) 145,374 159,015
Decrease/(increase)/ in receivables 33,017 (20,833) (13,493)
(Decrease)/increase in payables 7,340 (2,064) (34,254)
Shares issued in lieu of cash -
Net cash used in operation activities (467,515) (104,224) (348,618)
Cash flows from investing activities
Payments for exploration and evaluation activities
(340,326) (317,066) (714,885)
Transfer to restricted cash (30,450) - -
Net cash used in investing activities
(370,776) (317,066) (714,885)
Cash flows from financing activities
Proceeds from issue of shares - 945,000 2,279,500
Transaction costs of issue of shares - - (207,735)
Net cash generated from financing activities
- 945,000 2,071,765
Net (decrease)/increase in cash and cash equivalents (838,291) 523,712 1,008,262
Cash and cash equivalents at the beginning of period
1,272,742 264,480 264,480
Cash and cash equivalents at end of period
434,451 788,192 1,272,742
Consolidated Statement of Changes in Equity
Share capital Share premium Share based payment reserve Retained earnings Foreign currency reserve Total
£ £ £ £ £ £
At 31 December 2021 3,601,104 1,378,561 962,201 (3,848,456) (15,790) 2,077,620
Loss for the period - - - (226,953) - (226,953)
Translation differences - - - - 145,373 145,373
Total comprehensive income - - - (226,953) 145,373 (81,580)
Share capital issued 629,999 315,002 - - - 945,001
Cost of share issue - - - - - -
At 30 June 2022 4,231,103 1,693,563 962,201 (4,075,409) 129,583 2,941,041
Loss for the period - - - (282,185) - (282,185)
Translation differences - - - 9,413 145,381 154,794
Total comprehensive income - - - (272,772) 145,381 (127,391)
Share capital issued 921,391 325,287 (44,576) - - 1,202,102
Share issue cost - (207,735) - - - (207,735)
Warrants expired - 924,906 (924,906) - - -
Warrants issued - 58,626 (58,626) - - -
Share option charge - - 49,000 - - 49,000
At 31 December 2022 5,152,495 2,794,647 (16,908) (4,348,181) 274,964 3,857,017
Loss for the period - - - (307,101) - (307,101)
Translation differences - - - - (200,654) (200,654)
Total comprehensive income - - - (307,101) (200,654) (507,755)
At 30 June 2023 5,152,495 2,794,647 (16,908) (4,655,282) 74,310 3,349,262
Half-yearly report notes
1. Half-yearly Report
This half-yearly report was approved by the Directors on 27 September 2023.
The information relating to the six-month periods to 30 June 2023 and 30 June
2022 are unaudited.
The information relating to the year to 31 December 2022 is extracted from the
audited financial statements of the Company which have been filed at Companies
House and on which the auditors issued an unqualified audit report. The
condensed interim financial statements have not been reviewed by the Company's
auditor.
2. Basis of Accounting
The report has been prepared using accounting policies and practices that are
consistent with those adopted in the statutory financial statements for the
year ended 31 December 2022, although the information does not constitute
statutory financial statements within the meaning of the Companies Act 2006.
The half-yearly report has been prepared under the historical cost convention.
Going concern
The Company's day-to-day financing is from its available cash resources.
As at reporting date, the Company had £434,000 of cash at hand. These funds
will enable to Company to plan its future exploration campaigns across its key
projects and carry-on with diagnostic works such as metallurgical testing and
sample re-analysis. The Directors are confident that adequate funding can be
raised as required to meet the Company's current and future liabilities.
For the reasons outlined above, the Directors are satisfied that the Company
will be able to meet its current and future liabilities, and continue trading
for the foreseeable future, and, in any event, for a period of not less than
twelve months from the date of approving this report. The preparation of these
financial statements on a going concern basis is therefore considered to
remain appropriate.
These half-yearly financial statements are prepared in accordance with IAS 34
Interim Financial Reporting as adopted by the United Kingdom and the
Disclosure and Transparency Rules of the UK Financial Conduct Authority.
This half-year report does not include all the notes of the type normally
included in an annual financial report. Accordingly, this report should be
read in conjunction with the annual report for the year ended 31 December
2022, which have been prepared in accordance with UK-adopted international
accounting standards.
The Company will report again for the full year to 31 December 2023.
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 the Company's 2022 Annual Report and
Financial Statements. The nature and amounts of such estimates have not
changed significantly during the interim period.
Intangible assets
Exploration and development costs
All costs associated with mineral exploration and investments are capitalised
on a project-by-project basis, pending determination of the feasibility of the
project. Costs incurred include appropriate technical and administrative
expenses but not general overheads. If an exploration project is successful,
the related expenditures will be transferred to mining assets and amortised
over the estimated life of economically recoverable reserves on a unit of
production basis.
Where a licence is relinquished or a project abandoned, the related costs are
written off in the period in which the event occurs. Where the Group maintains
an interest in a project, but the value of the project is considered to be
impaired, a provision against the relevant capitalised costs will be raised.
The recoverability of all exploration and development costs is dependent upon
the discovery of economically recoverable reserves, the ability of the Group
to obtain necessary financing to complete the development of reserves and
future profitable production or proceeds from the disposition thereof.
3. Intangible assets
6 months to Period to Year ended
30 June 2023 30 June 2022 31 December
2022
Unaudited Unaudited Audited
£ £ £
At Beginning of the period 2,727,290 2,012,406 2,012,406
Additions 340,326 317,066 714,884
At End of the period 3,067,616 2,329,471 2,727,290
The Directors undertook an assessment of the following areas and circumstances
that could indicate the existence of impairment:
· The Group's right to explore in an area has expired, or will expire
in the near future without renewal;
· No further exploration or evaluation is planned or budgeted for;
· A decision has been taken by the Board to discontinue exploration and
evaluation in an area due to the absence of a commercial level of reserves; or
· Sufficient data exists to indicate that the book value will not be
fully recovered from future development and production.
Following their assessment, the Directors concluded that no impairment charge
was necessary for the period ended 30 June 2023.
4. Earnings per share
6 months to Period to Year ended
30 June 2023 30 June2022 31 December
2022
Unaudited Unaudited Audited
£ £ £
These have been calculated on a loss of: (307,101) (226,953) (509,138)
The weighted average number of shares used was: 515,249,550 423,110,510 515,249,550
Basic and diluted loss per share: £(0.0006) £(0.0005) £(0.0010)
5. Events after the reporting period
There were no reportable events after the reporting period other than those
highlighted in the 'Financial Review'.
The Condensed interim financial statements were approved by the Board of
Directors on 27 September 2023.
By order of the Board
Rupert Verco
Managing Director
27 September 2023
Half-yearly Report
Copies of this half-yearly report are available free of charge by application
in writing to the Company Secretary at the Company's registered office: 9(th)
Floor, 107 Cheapside, London, EC2V 6DN, or by email to
info@london-registrars.co.uk (mailto:info@london-registrars.co.uk) .
Responsibility Statement
We confirm that to the best of our knowledge:
· The interim financial statements have been prepared in accordance with
International Accounting Standard 34, Interim Financial Reporting, as adopted
by the UK;
· 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 interim financial information, and a
description of the principal risks and uncertainties for the remaining six
months of the year; and
· The interim financial information 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.
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