REG-Conroy Gold & Natural Resources Plc: Half-year Report
28/02/2019 07:05
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 ("MAR").
28 February 2019
Conroy Gold and Natural Resources plc
(“Conroy” or “the Company”)
Half-yearly results for the six months ended 30 November 2018
Conroy (AIM: CGNR), the Irish-based resource company exploring and developing
gold projects in Ireland and Finland, is pleased to announce its results for
the six months ended 30 November 2018.
Highlights:
* Excellent drill results from extended programme at Clontibret; 1,768 metres
completed
* Updated Exploration Target of 8.8 million ounces of gold:
* In only the three major gold targets - Clontibret, Clay Lake and Glenish -
and excluding the defined gold resource of over half a million ounces at
Clontibret
* Clontibret:
* Gold lodes intercepted with excellent grades - up to 24g/t
* New area of bedrock gold mineralisation discovered between the Clontibret
gold deposit and the Corcaskea gold target
* Clay Lake:
* Gold intersection of over 150 metres at 0.3g/t gold
* The intersection at a downhole depth of 252 metres is the deepest to date
* Placing to raise £500,000 completed
Professor Richard Conroy, Chairman, commented:
“The initial drill programme was very successful and we used the extended
one to build on those results. Further drilling is planned to increase the
resource, and the environmental and other studies related to the projected
mine development continue. The new discoveries and the updated exploration
target show the potential of the 700 km² that the Company has under
licence."
For further information please contact:
Conroy Gold and Natural Resources plc Tel: +353-1-479-6180
Professor Richard Conroy, Chairman
Allenby Capital Limited (Nomad) Tel: +44-20-3328-5656
Nick Athanas/Nick Harriss
Brandon Hill Capital Limited (Broker) Tel: +44-20-3463-5000
Jonathan Evans
Lothbury Financial Services Tel: +44-20-3290-0707
Michael Padley
Hall Communications Tel : +353-1-660-9377
Don Hall
Visit the website at: www.conroygold.com
Chairman’s Statement
Dear Shareholder,
I have great pleasure in presenting your Company’s Half-Yearly Report for
the six month period ended 30 November 2018. The period has been one of
further successful progress. Excellent results came from the drilling
programme in the Clontibret – Clay Lake – Glenish gold area and an
expanded exploration target of 8.8M oz gold was estimated for the area as
announced on 2 August 2018. Environmental and other studies continued to
progress in relation to the Company’s proposed mine development at
Clontibret. In addition a successful placing during the half-year raised
£500,000 (€556,545) for the Company to fund the advancement of the
Company’s gold assets.
Principal Activities and Business Review
Gold Price
The price of gold is a dominant feature in any business review or sensitivity
analysis of a gold mining development. During the period as the Company
continued with its exploration and development activities, it is very pleasing
to note a significant rise in the gold price from less than $1,200 an ounce in
October 2018 to over $1,300 an ounce at the date of writing. It is also
relevant that all the world’s Central Banks have been increasing their
holdings of gold during the past year.
Exploration Activity
The Company’s principal exploration activities during the period centred
around its drilling at Clontibret where, following the discovery of extensive
gold zones with wide mineralised intersections and grades up to 24g/t gold, an
initial 1,000 metre drilling programme was expanded by a further 700 metres.
This resulted in the discovery of further significant intercepts and gold
grades.
Drilling was also carried out at the Company’s gold targets at Clay Lake and
Glenish, immediately to the northeast and southwest respectively of
Clontibret, as part of an overall drilling programme encompassing the 17km
long gold district, Clontibret – Clay Lake – Glenish, which the Company
has discovered in the northeast of its licence area.
Gold intersections at Clay Lake included one which extended for over 150
metres at 0.3g/t gold. This wide gold intersection adds to previous drilling
and trenching results which suggest potential for high tonnage and overall
gold content in the Clay Lake gold target.
Bedrock Gold Discovery
A new area of bedrock gold mineralisation was discovered during prospecting
between the Clontibret gold deposit and the Corcaskea gold target. The grade
of the gold outcrop discovered is 5.6g/t gold. This newly discovered outcrop
lies to the north of the Clontibret gold deposit, on which the Company has
defined a JORC resource of 517,000 oz gold, and to the south of the Corcaskea
gold target, which has yielded significant gold intersections in trenches,
including 16.5 metres at 6.5g/t gold and 12 metres at 4.9g/t gold. The
relevance of this discovery is that geological interpretation suggests that
continuity between the Clontibret gold deposit, which is open in all
directions and to depth, and the Corcaskea gold target is becoming
established. Proving continuity between the Clontibret gold deposit and the
Corcaskea gold target will indicate significantly increased gold potential in
the area.
Exploration Target Update
During the half-year an updated Exploration Target of 8.8M ounces gold
associated with the gold-in-soil anomalies in the Clontibret–Clay
Lake–Glenish gold district has been estimated by consulting geologist
Professor Garth Earls (Professor Earls is also a non-executive director of the
Company). This updated Exploration Target of 8.8M oz gold does not include
the already defined JORC compliant resource of 517,000 oz gold in the
Clontibret gold deposit. The updated target is to a depth of 200 metres and
now includes the Glenish gold target. It should be noted, however, that the
potential quantity and grade of the Exploration Target are, however,
essentially conceptual in nature and must not be construed as Resources or
Reserves.
Future Drilling and Other Activities
Further drilling is planned for the Clontibret – Clay Lake – Glenish gold
target area with a view to increasing the resource at Clontibret and
delineating the gold potential at Clay Lake and Glenish and indeed elsewhere
along the 65km (40 miles) gold trend which your Company has discovered.
There will also be follow up on the gold in bedrock discovery between the
Clontibret gold deposit and the Corcaskea gold target.
Mine Development
The ultimate objective of your Company’s exploration programme is, of
course, the discovery and development of economic mineral resources. A
Preliminary Economic Assessment (PEA) has indicated technical and financial
feasibility of the Company’s Clontibret gold deposit and environmental and
other studies related to the projected mine development continue.
Summary
Overall the geology of the area, further excellent drilling results during
2018, the recent bedrock discovery between the resource area and Corcaskea and
the presence of 65km (40 miles) gold trend discovered by the Company all lend
encouragement and substance to our belief that the discovery of a multimillion
ounce gold deposit in the Company’s licence area is highly achievable.
Finance
The loss after taxation for the half-year ended 30 November 2018 was
€285,604 (six-month period ended 30 November 2017: loss €458,222) and the
net assets as at 30 November 2018 were €18,145,291 (30 November 2017:
€16,709,325). During the half – year a placing to raise £500,000
(€556,545) was successfully completed by the Company.
Directors and Staff
I would like to thank my fellow directors, staff and consultants for their
support and dedication, which has enabled the continued success of the
Company.
Outlook
We look forward to continuing to make successful progress with our
exploration, delineation and development programmes on the Company’s gold
properties.
Professor Richard Conroy
Chairman
28 February 2019
Condensed consolidated income statement and condensed consolidated statement
of comprehensive income
for the six-month period ended 30 November 2018
Condensed consolidated income statement
Note Six-month period ended 30 November 2018 (Unaudited) € Six-month period ended 30 November 2017 (Unaudited) € Year ended 31 May 2018 (Audited) €
Continuing operations
Operating expenses (285,604) (458,222) (745,498)
Finance income – interest - - 13
Loss before taxation (285,604) (458,222) (745,485)
Income tax expense - - -
Loss for the financial period/year (285,604) (458,222) (745,485)
Loss per share
Basic loss per ordinary share 2 (€0.0130) (€0.0401) (€0.0485)
Diluted loss per ordinary share 2 (€0.0130) (€0.0401) (€0.0396)
Six-month period ended 30 November 2018 (Unaudited) € Six-month period ended 30 November 2017 (Unaudited) € Year ended 31 May 2018 (Audited) €
Loss for the financial period/year (285,604) (458,222) (745,485)
Income/expense recognised in other comprehensive income - - -
Total comprehensive expense for the financial period/year (285,604) (458,222) (745,485)
Condensed consolidated statement of financial position as at 30 November 2018
Note 30 November 2018 (Unaudited) 30 November 2017 (Unaudited) Year ended 31 May 2018 (Audited)
€ € €
Assets
Non-current assets
Intangible assets 4 21,487,318 19,981,950 21,000,286
Property, plant and equipment 12,292 14,174 13,232
Total non-current assets 21,499,610 19,996,124 21,013,518
Current assets
Cash and cash equivalents 53,773 102,109 233,161
Other receivables 99,664 97,117 72,298
Total current assets 153,437 199,226 305,459
Total assets 21,653,047 20,195,350 21,318,977
Equity
Capital and reserves
Called up share capital 23,693 12,214 20,057
Called up deferred share capital 10,504,431 10,504,431 10,504,431
Share premium 12,727,194 11,054,732 12,174,285
Capital conversion reserve fund 30,617 30,617 30,617
Share based payments reserve 751,293 1,542,961 995,489
Retained losses (5,891,937) (6,435,630) (5,850,529)
Total equity 18,145,291 16,709,325 17,874,350
Liabilities
Non-current liabilities
Directors’ loans 5 185,343 180,343 185,343
Total non-current liabilities 185,343 180,343 185,343
Current liabilities
Trade and other payables: amounts falling due within one year 3,322,413 3,305,682 3,259,284
Total current liabilities 3,322,413 3,305,682 3,259,284
Total liabilities 3,507,756 3,486,025 3,444,627
Total equity and liabilities 21,653,047 20,195,350 21,318,977
Condensed consolidated statement of cash flows
for the six-month period ended 30 November 2018
Six-month period ended 30 November 2018 (Unaudited) € Six-month period ended 30 November 2017 (Unaudited) € Year ended 31 May 2018 (Audited) €
Cash flows from operating activities
Loss for the financial period/year (285,604) (458,222) (745,485)
Adjustments for:
Depreciation 940 942 1,884
Expense recognised in income statement in respect of equity settled share based payments - - 74,621
(Increase)/decrease in other receivables (27,366) 1,863 26,862
Increase in trade and other payables 58,792 551,279 665,196
Net cash (outflow)/provided by operating activities (253,238) 95,862 22,898
Cash flows from investing activities
Investment in exploration and evaluation (487,032) (322,846) (1,042,705)
Payments to acquire property, plant and equipment - - -
Net cash used in investing activities (487,032) (322,846) (1,042,705)
Cash flows from financing activities
Issue of share capital 556,545 406,680 1,543,076
Share issue costs - - (48,206)
(Repayments)/advances from Directors’ - (96,944) (91,944)
Advances/(Repayments) from Karelian Diamond Resources P.L.C. 4,337 (347) (160,662)
Net cash provided by financing activities 560,882 309,389 1,233,264
(Decrease)/Increase in cash and cash equivalents (179,388) 82,405 213,457
Cash and cash equivalents at beginning of financial period/year 233,161 19,704 19,704
Cash and cash equivalents at end of financial period/year 53,773 102,109 233,161
Condensed consolidated statement of changes in equity
for the six-month period ended 30 November 2018
Share capital (including called up deferred share capital) Share premium Capital conversion reserve fund Share based payment reserve Retained losses Total equity
€ € € € € €
Balance at 1 June 2018 10,524,488 12,174,285 30,617 995,489 (5,850,529) 17,874,350
Share issue 3,636 552,909 - - - 556,545
Transfer from share-based payment reserve to retained losses - - - (244,196) 244,196 -
Loss for the financial period - - - - (285,604) (285,604)
Balance at 30 November 2018 10,528,124 12,727,194 30,617 751,293 (5,891,937) 18,145,291
Balance at 1 June 2017 10,515,445 10,649,252 30,617 1,542,961 (5,977,408) 16,760,867
Share issue 1,200 405,480 - - - 406,680
Loss for the financial period - - - - (458,222) (458,222)
Balance at 30 November 2017 10,516,645 11,054,732 30,617 1,542,961 (6,435,630) 16,709,325
Share capital
The share capital comprises the nominal value share capital issued for cash
and non-cash consideration. The share capital also comprises deferred share
capital. The deferred share capital arose through the restructuring of share
capital which was approved at General Meetings held on 26 February 2015 and 14
December 2015.
Authorised share capital:
The authorised share capital at 30 November 2018 comprised 11,995,569,058
ordinary shares of €0.001 each, 306,779,844 deferred shares of €0.02 each,
and 437,320,727 deferred shares of €0.00999 each (€22,500,000), (30
November 2017: 11,995,569,058 ordinary shares of €0.001 each, 306,779,844
deferred shares of €0.02 each, and 437,320,727 deferred shares of €0.00999
each (€22,500,000)).
Share issues during the period ended 30 November 2018:
On 24 August 2018, the Company raised €556,545, (before expenses), through
the issue of 3,636,365 ordinary shares of €0.001 in the capital of the
Company at a price of £0.1375 per Subscription Share.
Share premium
The share premium reserve comprises the excess consideration received in
respect of share capital over the nominal value of the shares issued.
Capital conversion reserve fund
The ordinary shares of the Company were re-nominalised from €0.03174435 each
to €0.03 each in 2001 and the amount by which the issued share capital of
the Company was reduced, was transferred to the capital conversion reserve
fund.
Share based payment reserve
The share based payment reserve represents the amount expensed to the
condensed consolidated income statement in addition to the amount capitalised
as part of intangible assets of share-based payments granted which are not yet
exercised and issued as shares. During the six month period ended 30 November
2018 a number of unexercised warrants expired resulting in a transfer of
€244,196 from this reserve to retained losses.
Retained losses
This reserve represents the accumulated losses absorbed by the Company to the
condensed consolidated statement of financial position date.
Notes
to and forming part of the condensed consolidated financial statements for the
six-month period ended 30 November 2018
1. Accounting policies
Reporting entity
Conroy Gold and Natural Resources plc (the “Company”) is a company
domiciled in Ireland. The unaudited condensed consolidated financial
statements for the six-month period ended 30 November 2018 comprise the
condensed financial statements of the Company and its subsidiaries (together
referred to as the “Group”).
Basis of preparation and statement of compliance
The condensed consolidated financial statements have been prepared in
accordance with International Accounting Standard (“IAS”) 34: Interim
Financial Reporting.
The condensed consolidated financial statements do not include all the
information and disclosures required in the annual consolidated financial
statements, and should be read in conjunction with the Group’s annual
consolidated financial statements as at 31 May 2018, which are available on
the Group’s website - www.conroygold.com . The accounting policies adopted
in the presentation of the condensed consolidated financial statements are
consistent with those followed in the preparation of the Group’s annual
consolidated financial statements for the year ended 31 May 2018. IFRS 15:
Revenue from Contracts with Customers (“IFRS 15”) is effective for the
first time in the current interim period. The Directors have assessed that the
impact of IFRS 15 on the condensed financial statements for the current period
will not be material.
The condensed consolidated financial statements have been prepared under the
historical cost convention, except for derivative financial instruments which
are measured at fair value at each reporting date.
The condensed consolidated financial statements are presented in Euro
(“€”). € is the functional currency of the Group.
The preparation of condensed consolidated financial statements requires the
Board of Directors and management to use judgements, estimates and assumptions
that affect the application of policies and reported amounts of assets,
liabilities, income and expenses. Actual results may differ from those
estimates. Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the financial
period in which the estimate is revised and in any future financial periods
affected. Details of critical judgements are disclosed in the accounting
policies detailed in the annual consolidated financial statements.
The financial information presented herein does not amount to statutory
consolidated financial statements that are required by Chapter 4 part 6 of the
Companies Act 2014 to be annexed to the annual return of the Company. The
statutory consolidated financial statements for the financial year ended 31
May 2018 were annexed to the annual return and filed with the Registrar of
Companies. The audit report on those consolidated financial statements was
unqualified.
These Condensed Consolidated Financial Statements were authorised for issue by
the Board of Directors on 28 February 2019.
Going concern
The Group incurred a loss of €285,604 for the six-month period ended 30
November 2018 (six month period ended 30 November 2017: €458,222). The Group
had net current liabilities of €3,168,976 at that date (30 November 2017:
€3,106,456).
The Board of Directors have considered carefully the financial position of the
Group and in that context, have prepared and reviewed cash flow forecasts for
the period to 29 February 2020. In reviewing the proposed work programme for
exploration and evaluation assets and on the basis of the equity raised during
the period ended 30 November 2018, the results obtained from the exploration
programme and the prospects for raising additional funds as required, the
Board of Directors are satisfied that it is appropriate to prepare the
condensed consolidated financial statements on a going concern basis.
1. Accounting policies (continued)
New and amended standards adopted by the group
A number of new or amended standards became applicable for the current
reporting period. IFRS 15: Revenue from Contracts with Customers (“IFRS
15”) is effective for the first time in the current interim period. The
Directors have assessed that the impact of IFRS 15 on the condensed financial
statements for the current period will not be material.
Standards, interpretations and amendments issued but not yet effective
The following new standards, amendments to standards and interpretations have
been issued to date and are not yet effective for the financial period ended
30 November 2018, and have not been applied nor early adopted, where
applicable, in preparing these condensed financial statements:
* IFRS 9: Financial Instruments - effective for annual periods beginning 1
January 2018
* IFRS 16: Leases - effective for periods beginning 1 January 2019
• IFRS 17: Insurance Contracts - effective for periods beginning 1
January 2021
• IFRS10/IAS28: Sale or contribution of an asset between an investor
and its Associate of Joint Venture (Amendment) – Deferred indefinitely by
amendments made in December 2015.
The Board of Directors anticipate that the adoption of new standards,
interpretations and amendments that were in issue at the date of authorisation
of these condensed financial statements, but not yet effective, will have no
material impact on the condensed financial statements in the period of initial
application.
1. Loss per share
Basic earnings per share Six-month period ended 30 November 2018 (Unaudited) € Six-month period ended 30 November 2017 (Unaudited) € Year ended 31 May 2018 (Audited) €
Loss for the financial period/year attributable to equity holders of the Company (285,604) (458,222) (745,485)
Number of ordinary shares at start of financial period/year 20,056,674 11,013,537 11,013,537
Number of ordinary shares issued during the financial period/year 3,636,365 1,200,000 9,043,137
Number of ordinary shares at end of financial period/year 23,693,039 12,213,537 20,056,674
Weighted average number of ordinary shares for the purposes of basic earnings per share 22,023,947 11,424,773 15,379,675
Basic loss per ordinary share (€0.0130) (€0.0401) (€0.0485)
Weighted average number of ordinary shares for the purposes of diluted earnings per share 22,023,947 11,424,773 18,839,251
Diluted loss per ordinary share (€0.0130) (€0.0401) (€0.0396)
1. Subsidiaries
Shares in subsidiary companies (Unlisted shares) at cost: 30 November 2018 (Unaudited) € 30 November 2017 (Unaudited) € 31 May 2018 (Audited) €
Conroy Gold Limited – 100% owned - - -
Trans International Mineral Exploration Limited – 100% owned 2 2 2
2 2 2
The registered office of the above non-trading subsidiaries is 3300 Lake
Drive, Citywest Business Campus, Dublin 24, D24 TD21, Ireland.
Basis of consolidation
The condensed consolidated financial statements include the condensed
financial statements of Conroy Gold and Natural Resources plc and its
subsidiaries. Subsidiaries are entities controlled by the Company. Control
exists when the Group is exposed to or has the right to variable returns from
its involvement with the entity and has the ability to affect those returns
through its control over the entity. In assessing control, potential voting
rights that presently are exercisable are taken into account. The condensed
financial statements of subsidiaries are included in the condensed
consolidated financial statements from the date that control commences until
the date that control ceases. Intra-Group balances, and any unrealised income
and expenses arising from intra-Group transactions are eliminated in preparing
the condensed consolidated financial statements.
1. Intangible assets
Exploration and evaluation assets
Cost 30 November 2018 (Unaudited) € 30 November 2017 (Unaudited) € 31 May 2018 (Audited) €
At 1 June 21,000,286 19,659,104 19,659,104
Expenditure during the financial period/year
* License and appraisal costs 259,740 38,851 530,959
* Other operating expenses 227,292 283,995 511,746
* Equity settled share based payments - - 298,477
At 30 November/31 May 21,487,318 19,981,950 21,000,286
Exploration and evaluation assets relate to expenditure incurred in the
development of mineral exploration opportunities. These assets are carried at
historical cost and have been assessed for impairment in particular with
regard to the requirements of IFRS 6: Exploration for and Evaluation of
Mineral Resources relating to remaining licence or claim terms, likelihood of
renewal, likelihood of further expenditure, possible discontinuation of
activities as a result of specific claims and available data which may suggest
that the recoverable value of an exploration and evaluation asset is less than
its carrying amount.
The Board of Directors have considered the proposed work programmes for the
underlying mineral resources. They are satisfied that there are no indications
of impairment.
The Board of Directors note that the realisation of the intangible assets is
dependent on further successful development and ultimate production of the
mineral resources and the availability of sufficient finance to bring the
resources to economic maturity and profitability.
1. Related party transactions
(a) Directors’ loans 30 November 2018 (Unaudited) € 30 November 2017 (Unaudited) € 31 May 2018 (Audited) €
At 1 June 185,343 277,287 277,287
Loans advanced - 69,736 89,736
Loan repayment - (166,680) (181,680)
At 30 November/31 May 185,343 180,343 185,343
The Directors’ loan amounts relate to monies owed to Professor Richard
Conroy amounting to €135,918 (31 May 2018: €135,918), and Maureen T.A.
Jones amounting to €49,425 (31 May 2018: €49,425).
1. Apart from Directors’ remuneration, and loans from Directors, there have
been no contracts or arrangements entered into during the six-month period in
which a Director of the Group had a material interest.
1. The Group shares accommodation with Karelian Diamond Resources plc which
have certain common Directors and shareholders. For the six-month period ended
30 November 2018, the Group incurred costs totalling €74,968 (30 November
2017: €143,686) on behalf of Karelian Diamond Resources plc. These costs
were recharged to Karelian Diamond Resources plc by the Group. At 30 November
2018, the Group owed €117,514 (30 November 2017: €273,453) to Karelian
Diamond Resources plc. Amounts owed to Karelian Diamond Resources plc are
included within trade and other payables in the current and previous financial
periods/years.
1. Commitments and contingencies
The Group has received prospecting licences under the Republic of Ireland
Mineral Development Acts 1940 to 1995 for areas in Monaghan and Cavan. It has
also received licences in Northern Ireland for areas in Armagh in accordance
with the Mineral Development Act (Northern Ireland) 1969.
At 30 November 2018, the Group had work commitments of approximately
€340,000 for the forthcoming year, in respect of prospecting licences held
(31 May 2018: €440,000).
1. Approval of the Condensed Consolidated Financial Statements
These Condensed Consolidated Financial Statements were approved by the Board
of Directors on 27 February 2019. A copy of the Condensed Consolidated
Financial Statements will be available on the Group’s website
www.conroygold.com on 28 February 2019.
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