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RNS Number : 0434A Cobra Resources PLC 21 September 2022
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21 September 2022
Cobra Resources plc
("Cobra" or the "Company")
Half Year Results for the Six Months Ended 30 June 2022
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 2022 ("H1 2022").
Highlights:
· Announced on 7 February results from November 2021 Reverse
Circulation ("RC") drilling programme at the Clarke prospect, where:
o The strike of intersected gold mineralisation was doubled to over 400m
o All holes intersected Rare Earth Elements ("REE") within the weathered
saprolite horizon above or proximal to gold mineralisation
o Follow-up X-Ray Diffraction ("XRD") analysis supports crustal elution or
Ionic Adsorption Clay ("IAC") style mineralisation, a highly desirable style
of mineralisation owing to its favourable assemblage of REEs, minimal
radioactive by-products, and amenability to low-cost extraction techniques
· Announced on 15 February a fundraise of £0.95 million through an
accelerated and oversubscribed book build to help fund 2022 exploration
activities
· Announced on 13 April and 25 July the granting of extensive
additional exploration tenements, consolidating Cobra's position as a major
landholder in the Gawler Craton tier 1 mining and exploration jurisdiction
with a 3,261 km(2) land tenure
· Implemented a low-cost approach to confirming and spatially testing
the extent of REE mineralisation through a staged re-analysis of retained
samples from historic drillholes, confirming exceptional clay-hosted REE
mineralisation proximal to gold resources and defining a regionally scalable 4
km(2) footprint of REE mineralisation
· Confirmed the presence of leachable REE mineralisation, with leach
recoveries of up to 34.1% Total Rare Earth Element ("TREE")(+Y), with H2SO4 as
lixiviant pH1
· Executed an extensive 91-hole regional aircore drilling programme
designed to de-risk follow-up RC drilling and to test prioritised areas for
clay hosted REEs. Results reported post period demonstrate:
o Further along-strike gold mineralisation
o An expanding high-grade REE footprint at Clarke
o Regionally extensive and high-grade REE mineralisation
· Received South Australian Landing Pad grant, part funding website
improvements and the publication of a maiden Sustainability Plan, reflecting
the Board's commitment to developing an industry-leading approach to
Environmental, Social and Governance
· Received South Australian Accelerated Discovery Initiative ("ADI")
grant to co-fund Loupe TEM and Controlled Source Audio-frequency
Magneto-tellurics ("CSAMT") geophysical surveys at the Clarke prospect aimed
at identifying low-cost techniques to further define REE and gold
mineralisation under cover
Greg Hancock, Chairman of Cobra, commented:
"The first half of 2022 has been transformational. The work executed across
our 2022 exploration programme has us poised to increase our gold resources
and establish a potentially world-class rare earth asset.
The Company is well placed to achieve its Wudinna Project 75% earn-in
milestone in H2 2022 through delivering further exploration. I commend the
team for their ongoing efforts and success in advancing the project and look
forward to our upcoming RC drilling programme.
The growing strategic, environmental, and economic importance of rare earth
metals, coupled with gold's unparalleled fiscal stability, places Cobra in the
enviable position of defining a unique multi-mineral inventory within a tier 1
mining jurisdiction serviced with exceptional infrastructure."
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
Peterhouse Capital Limited (Joint Broker) +44 (0)20 7469 0932
Duncan Vasey
Lucy Williams
Vigo Consulting (Financial Public Relations) +44 (0)20 7390 0234
Ben Simons
Charlie Neish
Kendall Hill
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 3,261 km(2), 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
a current 211,000 Oz JORC Mineral Resource Estimate. In 2021, Cobra discovered
rare earth mineralisation proximal to and above gold mineralisation. The
grades, style of mineralogy and intersect widths are highly desirable while
the mineralisation has been demonstrated to be regionally scalable. The
Company is also advancing a pipeline of IOCG targets.
Follow us on social media:
LinkedIn: https://www.linkedin.com/company/cobraresourcesplc
(https://www.linkedin.com/company/cobraresourcesplc)
Twitter: https://twitter.com/Cobra_Resources
(https://twitter.com/Cobra_Resources)
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Operational Review
The November 2021 RC drilling programme delivered further exceptional gold
metrics from the Clarke prospect, demonstrating the further growth potential
to existing gold resources, with the programme effectively doubling the
intersected strike of gold mineralisation to over 400m at the prospect that
lies outside of the Company's current mineral estimate.
The growing strategic, environmental, and economic importance of rare earth
metals, particularly magnet rare earth metals, last year prompted Cobra to
submit pulps from drilling at its Wudinna Project for REE analysis.
Significant intersections of TREO assays in excess of 500 ppm were recognised
within the kaolinised clays of the saprolite across all 14 RC drillholes. In
the first six months of 2022, Cobra pursued the opportunity these results
presented by confirming the economic potential of mineralisation through:
· Mineral identification: XRD analysis performed by the CSIRO supports
that a component of REE bursary is adsorbed to the primary clay particles,
being kaolin and montmorillonite, in similar fashion to the highly desirable
IAC hosted deposits of southern China
· Lithological analysis: HyLogger Spectral analysis performed by GSSA
on chips of five Clarke RC holes demonstrated strong associations between
elevated rare earths, kaolinite quantity, and reducing crystallinity. The
results also demonstrated strong associations between muscovite and phengite
to gold mineralisation
· Diagnostic metallurgical testing: test-work carried out by ANSTO
focused on extraction techniques adopted to ionic phase mineralisation using
H(2)SO(4) as a lixiviant, yielded recoveries of up to 34% TREE from samples
across two holes at Clarke
· Demonstrating scalable resource potential: systematically expanded
the recovery through the cost-effective re-analysis of historic drillhole
samples, where a total of 2,231 samples have been re-analysed for lanthanides
from over 190 drillholes that have produced significant intersections at 11
different prospects and defined a 4 km(2) mineralisation footprint across the
Baggy Green and Clarke prospects
In June 2022, the Company executed a regionally extensive aircore drilling
programme aimed at:
· De-risking follow-up RC drilling at Clarke through refining
along-strike targeting
· Testing priority regional rare earth mineralisation
· Providing basement rock pathfinder chemistry to advance targeting at
regional gold and IOCG targets
Through this programme, Cobra has:
· Defined further gold mineralisation at Clarke, where CBAC0014
intersected 12m at 1.25 g/t gold from 18m, increasing the intersected strike
extent at Clarke beyond 500m
· Refined further gold targets at Clarke, where broad zones of gold in
saprolite has been defined north of previously intersected gold
mineralisation. In comparison to drilled mineralisation zones, the anomalous
zones northwest of Clarke are more significant, supporting further
mineralisation down-dip and along-strike
· Expanded the zone of high-grade rare earth mineralisation at Clarke,
with significant intersections demonstrating basket assemblages, lithologies
and environmental conditions supportive of ionic adsorption mineralisation
· Yielded numerous rare earth intersections across nine regional
targets demonstrating regional scalability and prospectivity for clay hosted
rare earth mineralisation
· Tested saprolite above three of the Company's IOCG geophysical
targets, where geochemical analysis demonstrates prospectivity for copper/gold
porphyry style mineralisation
The work completed in H1 2022 has yielded an exceptional opportunity for Cobra
to establish a potentially world-class rare earth asset. The work completed to
date has demonstrated potential crustal elution style mineralisation at 18
prospects, where the following prospects report exceptional metrics of grade,
width, and scale:
· At Clarke, 85% of 88 holes drilled or re-analysed yield a length
weighted intersection of 15m at 707 ppm TREO
· At Baggy Green, 90% of 71 holes re-analysed yield a length weighted
intersection of 16.3m at 521 ppm TREO
· At Thompson, 65% of 26 holes drilled or re-analysed yield a length
weighted intersection of 15.2m at 839 ppm TREO
· At Anderson, the re-analysis of six holes yields a length weighted
intersection of 17m at 995 ppm TREO
Further historic drillhole re-analysis is planned for Thompson and Anderson to
test the spatial continuity of mineralisation. The Company will endeavour to
incorporate these prospects into a maiden rare earth resource before
year-end.
Considerable research and sample testing has been conducted by the technical
team to best understand the genesis processes and the exodermic conditions
that best promote and maintain ionic adsorption style mineralisation. The
compiled dataset of sample acidity/alkalinity and detailed interpretation of
saprolite clays puts the Company in a strong position to optimise REE
metallurgy.
Post Period-End
In July 2022, the Company carried out a Loupe TEM geophysical survey at the
Clarke prospect which was co-funded by a South Australian ADI grant. The
results of this survey will inform follow-up RC drilling at the Clarke
prospect. A further CSAMT geophysical survey is planned as part of the ADI
co-funding to test deeper structural associations between gold and rare earth
mineralisation.
The Clarke prospect poses as a low-risk target to add to the Company's current
Gold Mineral Resource Estimate. A ~2,000m drilling programme is scheduled to
commence in the coming weeks to test strike extensions and validate lode
interpretations with the intention of informing a resource update by year end.
Bulk samples of defined REE mineralisation zones will also be taken to advance
metallurgical optimisation studies.
Corporate Development
The Company has matured in 2022 which has enabled us to secure alternate
funding from two grants awarded by the South Australian Government. Cobra is
grateful to be operating in a jurisdiction that is not only rich in resources,
but supportive of ethical mineral exploration and mining.
Funding has been used to brand Cobra in alignment with its values and
ambitions: to develop a high-value, multi-mineral resource capable of
supporting global decarbonisation. Reflecting our commitment to ethical and
environmentally conscious exploration, we published our maiden Sustainability
Plan in June 2022, which introduces the Company's approach and vision for ESG
through its exploration activities.
The Company has expanded its landholding within the Southern Gawler Craton to
3,261 km(2) through the successful application of two additional exploration
tenements. These tenements complement our exploration strategy, which aims to
provide shareholders with a considered methodological approach enabling
low-cost discoveries across a range of commodities within a world-class
mineral province.
Cobra is positioned to achieve its Stage 3 earn-in under the Wudinna Heads of
Agreement in H2 2022, entitling the Company to 75% of the Wudinna Project.
Financial Review
Cobra reported an unaudited operating loss for the six months ended 30 June
2022 of £226,953 which equates to a loss per share for the period of
£0.0005. This compares to a loss for the six- month period to 30 June 2021 of
£842,631, which equated to a loss per share for the period of £0.0025.
In February 2022, Cobra raised £0.95 million through an accelerated placement
of 63,000,000 new Ordinary Shares at £0.015.
As at 30 June 2022, the Company had available cash of £788,192 (30 June 2021:
£1.12 million), sufficient for the Company to execute its planned exploration
activities.
Outlook
Cobra's immediate focus for H2 2022 is a continuation of exploration
activities. This will involve further historic drillhole re-analysis for rare
earths at the Thompson and Anderson prospects, followed by the execution of a
2,000m RC drilling programme at the Clarke prospect.
Exploration success to date should enable an update to the Company's 211,000
Oz Gold Mineral Resource and a maiden Rare Earth Resource Estimate before
year-end. This will demonstrate the value of the exploration activities that
the Company has executed and will act as a platform for further future growth.
Greg Hancock
Chairman
20 September 2022
Consolidated Income Statement
6 months to 6 months to Year ended
30 June 2022 30 June 2021 31 December 2021
Unaudited Unaudited Audited
£ £ £
Administrative expenses (226,953) (232,626) (567,213)
IPO expenses - - -
Operating loss (226,953) (232,626) (567,213)
Loss on derecognition of financial liability*
- (610,005) (1,110,298)
Loss on ordinary activities before taxation (226,953) (842,631) (1,677,511)
Tax on loss on ordinary activities - - -
Loss for the financial period attributable to equity holders (226,953) (842,631) (1,677,511)
Loss per share - see note 4
Basic and diluted £(0.0005) £(0.0025) £(0.0073)
* The loss on derecognition of financial liabilities is a reflection of the
Consideration shares paid to the previous Lady Alice Mines unit holders upon
completion of Stages 1 and 2 earn-in as agreed upon at time of acquisition,
and the market value of shares issued at the time of settlement of the
liability during the period.
Consolidated Statement of Comprehensive Income
6 months to 6 months to Year ended 31 December 2021
30 June 2022 30 June 2021
Unaudited Unaudited Audited
£ £ £
Loss after tax (226,953) (842,631) (1,677,511)
Items that may subsequently be reclassified to profit or loss:
- Exchange differences on translation of foreign operations 145,374 (66,640) (81,246)
Total comprehensive loss attributable to equity holders of the parent company (81,579) (909,271) (1,758,757)
Consolidated Statement of Financial Position
6 months to 30 June 2022 6 months to 30 June 2021 Year ended 31 December 2021
Unaudited Unaudited Audited
£ £ £
Non-current assets
Intangible assets 2,329,471 1,556,680 2,012,405
Property, plant and equipment 1,428 2,040 1,680
Total non-current assets 2,330,899 1,558,720 2,014,085
Current assets
Trade and other receivables 57,724 26,911 36,891
Cash and cash equivalents 788,192 1,121,787 264,480
Total current assets 845,916 1,148,698 301,371
Non-current liabilities
Deferred consideration - (187,500) -
Current liabilities
Trade and other payables (48,272) (85,414) (50,336)
Deferred consideration (187,500) (135,191) (187,500)
Total current liabilities (235,772) (220,605) (237,836)
Net assets/(liabilities) 2,941,043 2,299,313 2,077,620
Capital and reserves
Share capital 4,231,103 3,283,845 3,601,104
Share premium 1,693,563 1,093,027 1,378,561
Share based payment reserve 962,201 993,448 962,201
Retained losses (4,075,408) (3,069,823) (3,848,456)
Foreign currency reserve 129,584 (1,184) (15,790)
Total equity 2,941,043 2,299,313 2,077,620
Consolidated Statement of Cash Flows
6 months to 6 months to 30 June 2021 Year ended
30 June 2022 31 December 2021
Unaudited Unaudited Audited
£ £ £
Cash flow from operating activities
Operating loss (226,952) (842,631) (1,677,511)
Equity settled share-based payment - 20,000 45,000
Depreciation 250 360 719
Foreign exchange 145,374 (66,640) (78,137)
Loss on derecognition of financial liability
- 610,005 1,077,607
Decrease/(increase)/ in receivables (20,833) 42,496 32,517
(Decrease)/increase in payables (2,064) (137,431) (118,978)
Shares issued in lieu of cash - - 33,251
Net cash used in operation activities (104,224) (373,841) (685,532)
Cash flows from investing activities
Payments for exploration and evaluation activities
(317,066) (61,161) (516,886)
Net cash (used)/generated in investing activities (317,066) (61,161) (516,886)
Cash flows from financing activities
Proceeds from issue of share 945,000 128,044 128,044
Shares issued in lieu of cash - 89,894 -
Net cash generated from financing activities 945,000 217,938 128,044
Net (decrease)/increase in cash and cash equivalents 523,712 (217,064) (1,074,371)
Cash and cash equivalents at the beginning of period
264,480 1,338,851 1,338,851
Cash and cash equivalents at end of period 788,192 1,121,787 264,480
Consolidated Statement of Changes in Equity
Share capital Share premium Share based payment reserve Retained earnings Foreign currency reserve Total
£ £ £ £ £ £
At 31 December 2020 2,829,566 564,173 1,006,238 (2,239,982) 65,456 2,225,451
Loss for the period - - - (842,631) - (842,631)
Translation differences - - - - (66,640) (66,640)
Total comprehensive income - - - (842,631) (66,640) (909,271)
Share capital issued 454,279 528,854 - - - 983,133
Transfer of warrants exercised - - (12,790) 12,790 - -
At 30 June 2021 3,283,845 1,093,027 993,448 (3,069,823) (1,184) 2,299,313
Loss for the period - - - (834,880) - (834,880)
Translation differences - - - - (14,606) (14,606)
Total comprehensive income - - - (834,880) (14,606) (849,486)
Share capital issued 317,259 285,534 - - - 602,793
Transfer of warrants lapsed - - (56,247) 56,247 - -
Share options charge - - 25,000 - - 25,000
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 - - - - 145,374 145,373
Total comprehensive income - - - (226,953) 145,374 (81,579)
Share capital issued 629,999 315,002 - - - 945,001
At 30 June 2022 4,231,103 1,693,563 962,201 (4,075,408) 129,584 2,941,043
Half-yearly report notes
1. Half-yearly report
This half-yearly report was approved by the Directors on 20 September 2022.
The information relating to the six-month periods to 30 June 2022 and 30 June
2021 are unaudited.
The information relating to the year to 31 December 2021 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 2021, 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.
Post period-end in July 2022, the Company had £788K of cash at hand. These
funds will enable to Company to execute its planned exploration campaigns
across its key projects within the second half of the year. 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 European Union 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
2021, which have been prepared in accordance with International Financial
Reporting Standards (IFRS) as adopted by the European Union.
The Company will report again for the full year to 31 December 2022.
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 2021 Annual Report and
Financial Statements. The nature and amounts of such estimates have not
changed significantly during the interim period.
Half-yearly report notes, continued
2. Basis of accounting, continued
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 6 months to Year ended
30 June 30 June 31 December
2022 2021 2021
Unaudited Unaudited Audited
£ £ £
At Beginning of the period 2,012,406 1,495,519 1,495,519
Additions 317,066 61,161 516,886
At End of the period 2,329,471 1,556,680 2,012,406
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 2022.
Half-yearly report notes, continued
4. Earnings per share
6 months to 6 months to Year ended
30 June 30 June 31 December
2021 2021 2021
Unaudited Unaudited Audited
£ £ £
These have been calculated on a loss of: (226,953) (842,631) (1,677,511)
The weighted average number of shares used was: 423,110,510 328,384,591 360,110,510
Basic and diluted loss per share: £(0.0005) £(0.0025) £(0.0047)
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 20 September 2022.
By order of the Board
Rupert Verco
Managing Director
20 September 2022
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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