REG - Contango HoldingsPLC - Interim Results
24/03/2022 07:01
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RNS Number : 8305F Contango Holdings PLC 24 March 2022
Contango Holdings Plc / Index: LSE / Epic: CGO / Sector: Natural Resources
24 March 2022
Contango Holdings Plc
('Contango' or the 'Company')
Unaudited Interim Results for the 6 months to 30 November 2021
Contango Holdings Plc, the London listed natural resource development
company, announces its results for the six-month period ended 30 November
2021.
Highlights
· Raised £3.5m to advance Lubu into production
· High-quality of Lubu coking coal confirmed by independent testwork by
Bureau Veritas laboratory, confirming viability for coke manufacture
· Increasing global and regional coking coal and coke prices further
enhanced the attractive economics of Lubu
· Successful exploration activities undertaken at Garalo-Ntiela to
prove up the targeted resource of 1.8Moz-2Moz gold
· Cash as at 31 November 2021 £2,419,266
Post period
· First production at Lubu expected by the end of Q1 2022
· Wash plant ordered and installation scheduled in Q2 2022
· Planning and development of coke batteries at Lubu underway with
installation expected in Q4 2022
· Discussions underway with several interested parties to negotiate
coking coal offtake contracts for mid-2022 and coke offtake contracts from Q4
2022.
· Enquiries from both regional and European customers about the coke
product, whilst significant uplift in coke price has also led to increased
viability for export to Asia.
· Approaches received from potential domestic and international
investors to support the future development of Garalo-Ntiela and a site visit
as part of the ongoing due diligence of the strategic parties is scheduled for
April 2022
Carl Esprey, Chief Executive Officer of Contango Holdings, said:
"Contango is now at a real turning point as we make the final preparations on
site at Lubu ahead of first production later this month, and as we continue
our strategic negotiations with potential investors to support the development
of Garalo-Ntiela. With our attention focussed firmly on commercialising
these two significant assets, we are delivering on our over-arching objective
to deliver cash flow in a short timeframe to support the long-term expansion
of the Company and its portfolio. 2022 is set to be a pivotal year and I
look forward to delivering updates on our progress throughout the year."
For further information, please visit www.contango-holdings-plc.co.uk or
contact:
Contango Holdings plc E: contango@stbridespartners.co.uk
Chief Executive Officer
Carl Esprey
Tavira Securities Limited T: +44 (0)20 7100 5100
Financial Adviser & Broker
Jonathan Evans
St Brides Partners Ltd T: +44 (0)20 7236 1177
Financial PR & Investor Relations
Susie Geliher / Charlotte Page
Chairman's Statement
It gives me great pleasure to report on the activities and developments that
the Contango team have achieved during the period and the months following.
Our endeavours, and indeed our wider strategy, have been directed both by the
evolving and increasing demand appetites for commodities and also by the
deeper understanding of our own primary assets: the Lubu Coking Coal Project
in Zimbabwe ('Lubu'), and the Garalo-Ntiela Gold Project in Mali
('Garalo-Ntiela'). As we move into our next phase of development at both
assets, I believe Contango is in an extremely strong position to effectively
maximise and crystallise the value of these projects.
Looking firstly at Lubu, our most advanced project, which is now entering its
production phase. Our attention during the period focussed largely on sample
analysis, which evaluated a variety of metrics and properties derived from 49
samples extracted from the 1A Lower and MSU metallurgical seams including ash,
sulphur and phosphorous contents, as well as yield and calorific values.
Whilst originally intended to provide potential off-takers with a better
insight into the quality of our coal, our strategy developed to include the
production of coal for our own operated coke batteries, which we intend to
install before the end of 2022. Our internal modelling has confirmed that
not only will Contango capture more of the value chain, and therefore much
higher margins for our product, but we will also gain the opportunity of
exporting our coke to an international market, where it can demand even
greater premiums. This was a strategic decision for Contango and one which
we believe lays the foundation for much more rapid growth in 2023 and
thereafter. Furthermore, having the optionality of coke production at this
early stage in our production journey at Lubu will support the onward
expansion of the project over and above the initial 1A Lower and MSU seams,
ensuring that Contango is in a much stronger position to realise the full
potential of this project, which has a resource in excess of 1.3 billion
tonnes, as identified under NI 43-101 standard.
Looking now to Garalo-Ntiela, our focus has also moved towards the strategic
realisation of its full value. As shareholders will be aware, this asset has
proved to be much larger than originally envisaged; potentially orders of
magnitude larger. With this in mind, the project really merits greater
exploration and development as it would be ill-advised to expedite production
and risk the sterilisation of potentially highly productive areas for the sake
of quick revenue, especially given the expected significant and heightened
cashflows from Lubu. Accordingly, the Board has taken the prudent approach
to refine its understanding of the wider resource potential of the project
through the application of aero-magnetic studies, which have yielded multiple
high-grade potential target zones, and the recently completed Induced
Polarisation ('IP') survey. The results of these studies and surveys will
serve to enable the Company to finalise its 2022 drill programme, intended to
firm up the targeted resource of 1.8Moz-2Moz gold.
Financial Review
Funding
During the period, the Company was funded through a £1,000,000 Convertible
Loan sourced from existing investors in June 2021 at the fixed conversion
price of 6 pence per share, the funds of which were used for a pre-production
work programme at Garalo-Ntiela, as well as the aforementioned studies on the
Lubu. The Company also benefited from the exercise of warrants during the
period, which were otherwise due for expiry on 1 November 2021, raising
approximately £1,025,000.
A further £2,500,000 was raised through a Placing of 41,666,666 New Ordinary
Shares of £0.01 each at a price of 6 pence per Placing Share in November 2021
in order to fund the fast tracking into production of the Lubu Coal Project. A
further 41,666,666 warrants with an exercise price of 12 pence per share were
issued to the placees. If exercised in full these warrants would provide a
further £5,000,000 to the Company.
Revenue
The Company generated no revenue during the period under review as it was
focusing on advancing its assets that Contango believes will generate revenue
for the Company.
Expenditure
The Company has applied its cash resources to the development of Lubu and
Garalo-Ntiela.
Liquidity, cash and cash equivalents
As of 30 November 2021, the Company held £2,419,266 (2020: £1,145,301).
The Company is fully funded to bring the Lubu Coking Coal Project into
production by the end of Q1 2022.
Outlook
Over the past 12 months, Contango has made enormous progress towards
monetising its assets and delivering both cashflow and value for investors.
Much of this progress has been commercially sensitive, however I am confident
that we are approaching the stage that this progress can be widely
communicated and that the real tangible value of the work we have done will be
reflected in our valuation. Indeed, as recently reported via RNS in
February, the Company has advised that it has received approaches from
potential domestic and international investors to support the future
development of Garalo-Ntiela and a site visit, hosted by CEO Carl Esprey, is
scheduled for the investors in the coming weeks. The Board believes that
Contango has demonstrated Garalo-Ntiela's potential to support a significant
gold mining operation, and it would expect any transaction it enters into
would need to reflect this. Further announcements regarding operational
advances and strategic discussions will be made in due course, as will updates
relating to the commencement of coal mining operations at Lubu over the coming
weeks.
I look forward to what I believe will be an exceptionally busy period for
Contango, both operationally and corporately, as we embark on the next phase
of our growth as a production company.
Roy Pitchford
24 March 2022
CEO REPORT
Contango's primary objectives during the period under review were to advance
both the Lubu Coal Project in Zimbabwe and the Garalo-Ntiela Project Area in
Mali towards production.
Lubu Coal Project ('Lubu') - renamed Muchesu Coal post-period end
Contango has a 70% interest in Lubu, with the remaining 30% held by supportive
local partners.
As previously reported, Lubu has benefitted from significant previous
investment, with previous owners expending more than $20m on exploration and
development, which has enabled a sizeable resource in excess of 1.3 billion
tonnes to be identified to NI 43-101 standard. Contango will initially focus
on producing coking coal from Block B2, where extensive work has also been
undertaken to define the specific properties of the coal. The coal seams
within Block B2 are from surface down to a maximum depth of 47m, ensuring
operating costs are kept at very attractive levels.
Contango undertook analysis from samples extracted from the metallurgical
seams at Lubu in October 2021, with a view to finalising off-take discussions
with various commercial partners. These results exceeded the Company's
expectations and confirmed the commercial characteristics and viability of the
metallurgical coal in the production of coke. This was a significant
development for the Company as it confirmed the attractive qualities of
Contango's coal project in the context of both off-take opportunities and for
the Company's own independent expansion strategy for Lubu.
The Company's strategy for Lubu, informed by the sample analysis and after
extensive modelling of the demand fundamentals for coking coal and coke, will
not be restricted to an immediate local off-take solution, but will also
incorporate the installation of the Company's own coke batteries. It is
intended that this path will deliver a far better margin for the end product,
as well as create synergies with the longer-term expansion of Lubu. One
example of this is the opportunity to generate power, capturing heat from the
coke batteries and using it for power generation to support the rest of the
operation.
The current fundamentals for all forms of coal remain highly attractive with
demand rising significantly in the last year and prices expected to increase
further given shortages of coke and coking coal. Now that production at Lubu
is on the horizon, discussions are currently underway with several interested
parties with regards to coking coal offtake contracts and the coke product
from the expected coal production. Post-period end, a wash plant has been
ordered and is scheduled to be installed in Q2 2022 in order to allow the
delivery of coking coal to our customers and therefore generate revenue. We
are therefore extremely confident that Lubu is ideally positioned to take
advantage of this market environment, particularly through the application of
our coke battery development, to provide funding in some form for our future
development plans and we look forward to providing further news as we target
first coal production by the end of March.
Garalo-Ntiela Project Area ('Garalo-Ntiela')
In March 2021, the Company acquired the Ntiela licence, which neighbours the
existing Garalo permit. The Ntiela licence
was acquired for approximately £750,000, being €400,000 (£346,517) in cash
and 4,000,000 ordinary shares. The share component will be paid once the
formal transfer of the licence is completed, which is expected to be in
mid-2022.
Since acquiring the Ntiela licence, the two permits have been consolidated to
form the Garalo-Ntiela Project Area over which the Company has undertaken two
drilling programmes during the period. Consistently encouraging results have
been received from the development and activities undertaken, demonstrating
its potential to be a major new mine in the region.
A work programme on the project returned positive results in June 2021, which
was initially designed to assist in fast tracking it into production,
alongside increasing the understanding of the wider prospectivity of the
licences. The majority of the exploration activities were centred on the
Garalo permit, which has demonstrated its potential for a 1.8Moz-2Moz gold
resource. However, work on the then recently acquired Ntiela concessions
continued to show encouraging results and two major structures were
intersected during the programme.
Subsequent to this work programme, a short low-cost programme of aeromagnetics
and airborne geophysics for the collection of magnetic and radiometric data
began in July 2021 and was completed across both licences. Although the
project area had been drilled extensively previously, the data from this
programme was focused on properly assessing the upside potential of Garalo's
gold resource and supporting its accelerated development into production. This
programme also particularly focused on Ntiela following the encouraging
results from earlier exploration work undertaken and targeted some untested
areas.
The samples from this work programme were analysed in October 2021, building
on the existing drill data. The results from the completed work programme
reconfirmed the expected extensions of the G1 and G3 targets in the Ntiela
licence, which are the main targets to support the aforementioned targeted
resource. A short, targeted follow up drilling campaign on the two deposits
has been planned for 2022 to test the interpretations to depth alongside
infill drilling. In addition, the plans for a standalone 30,000oz per annum
heap leach gold operation are being refined, which is expected to generate
additional cashflow.
Post-period end, the results from the aeromagnetic studies have been received
and have demonstrated multiple high-grade potential target zones whilst the
Induced Polarisation ('IP') survey has been completed. These two sets of
results, along with those from historic drilling, will finalise the 2022 drill
programme which intends to confirm the targeted resource of 1.8Moz-2Moz gold.
As previously reported, the Board is also in discussions with a number of
potential investors in relation to Garalo-Ntiela. A site visit, to be hosted
by myself, is scheduled for the strategic parties to attend as part of their
due diligence process for investing in the project. The Board believes that
the exceptional value of this emerging gold development asset should and would
be reflected in any potential agreement. The Company will provide further
updates on these discussions in due course, as appropriate.
Carl Esprey
24 March 2022
Condensed Consolidated Statements of Comprehensive Income
For the six months ended 30 November 2021
Audited Year to
Unaudited Six Months ended Unaudited Six Months ended 31 May 2021
30 November 2021 30 November 2020
Notes £ £ £
Administrative fees and other expenses 3 (636,398) (1,129,659) (3,304,899)
Operating loss (636,398) (1,129,659) (3,304,899)
Finance revenue - - -
Finance expense - - -
Loss before tax (636,398) (1,129,659) (3,304,899)
Income tax - - -
Loss for the period (636,398) (1,129,659) (3,304,899)
Loss attributable to owners of the parent company (591,350) (1,108,611) (3,248,015)
Loss attributable to non-controlling interests (45,048) (21,048) (56,884)
(636,398) (1,129,659) (3,304,899)
Basic and diluted loss per Ordinary Share 4 (0.27) (0.92) (1.49)
Other comprehensive income (40,735) - (48,797)
Total comprehensive loss for the period (677,133) (1,129,659) (3,353,696)
Total comprehensive loss attributable to owners of Contango Holdings PLC (618,569) (1,108,611) (3,281,408)
Total comprehensive loss attributable to non-controlling interests (58,564) (21,048) (72,288)
Total comprehensive loss for the period (677,133) (1,129,659) (3,353,696)
Condensed Consolidated Statements of Financial Position
For the six months ended 30 November 2021
Notes Unaudited as at Unaudited as at Audited as at
30 November 2021 30 November 2020 31 May 2021
£ £ £
Non-current assets
Intangible assets 5 10,515,941 10,898,698 10,118,098
Investments 62,260 62,260 62,260
Property, plant and equipment 256,641 44 31,168
Total non-current assets 10,834,842 10,961,002 10,211,526
Current assets
Other receivables 6 587,348 585,538 135,699
Cash and cash equivalents 2,419,266 1,145,301 22,143
Total current assets 3,006,614 1,730,839 157,842
Total assets 13,841,456 12,691,841 10,369,368
Current liabilities
Trade and other payables 7 (1,155,632) (833,860) (281,664)
Total current liabilities (1,155,632) (833,860) (281,664)
Net assets/(liabilities) 12,685,824 11,857,981 10,087,704
Equity
Share capital 8 2,687,760 2,396,333 2,279,338
Share premium 8 11,176,636 8,198,148 8,294,643
Shares to be issued 400,000 400,000
Warrant reserve 90,474 83,533 160,074
Option reserve 1,700,505 1,700,505
Merger reserve - 3,214,558 -
Foreign exchange reserve (6,174) (33,393)
Retained earnings (4,744,297) (2,034,591) (4,152,947)
Total equity attributable to owners of ownersowners of Contango Holdings 11,304,904 10,428,061 8,648,220
owners of Contango Holdings owners of the parent company
Non-controlling interests 1,380,920 1,429,920 1,439,484
Total equity 12,685,824 11,857,981 10,087,704
Condensed Consolidated Statements of Changes in Equity
For the six months ended 30 November 2020
Condensed Consolidated Statement of Changes in Equity
For the six months ended 30 November 2021
Share capital Share premium Shares to be issued Warrant Option reserve Translation reserve Retained earnings Total Equity of Owners Non-controlling interests Total
reserve
£ £ £ £ £ £ £ £ £ £
Balance as at 31 May 2020 429,500 368,978 - 84,874 - - (904,932) (21,580) - (21,580)
Loss for the year - - - - - - (3,248,015) (3,248,015) (56,884) (3,304,899)
Other comprehensive income
Translation differences - - - - - (33,393) - (33,393) (15,404) (48,797)
Total comprehensive income for the year - - - - - (33,393) (3,248,015) (3,281,408) (72,288) (3,353,696)
Transactions with owners 1,819,838 7,815,665 - - - - - 9,635,503 - 9,635,503
Share issues - cash received net
Share issues - warrants exercised 30,000 110,000 - (10,600) - - - 129,400 - 129,400
Shares to be issued - - 400,000 - - - - 400,000 - 400,000
Warrants issued - - - 85,800 - - - 85,800 - 85,800
Options issued - - - - 1,700,505 - - 1,700,505 - 1,700,505
Minority interest share of intangible asset acquisitions - - - - - - - - 1,511,772 1,511,772
Total transactions with owners 1,849,838 7,925,665 400,000 75,200 1,700,505 - - 11,951,208 1,511,772 13,462,980
Balance at 31 May 2021 2,279,338 8,294,643 400,000 160,074 1,700,505 (33,393) (4,152,947) 8,648,220 1,439,484 10,087,704
Loss for the period - - - - - - (591,350) (591,350) (45,048) (636,398)
Other comprehensive income
Translation differences - - - - - 27,219 - 27,219 (13,516) 13,703
Total comprehensive income for the period - - - - - 27,219 (591,350) (564,131) (58,564) (622,695)
Transactions with owners 157,172 2,230,327 - - - - - 2,387,499 - 2,387,499
Share issues - cash received net
Share issues - warrants exercised 251,250 651,666 - (69,600) - - - 833,316 - 833,316
Shares to be issued - - - - - - - - - -
Warrants issued - - - - - - - - - -
Options issued - - - - - - - - - -
Minority interest share of intangible asset acquisitions - - - - - - - - - -
Total transactions with owners 408,422 2,881,993 - (69,600) - - - 3,220,815 - 3,220,815
Balance at 30 Nov 2021 2,687,760 11,176,636 400,000 90,474 1,700,505 (6,174) (4,744,297) 11,304,904 1,380,920 12,685,824
Condensed Consolidated Statements of Cash Flows
For the six months ended 30 November 2021
Notes Unaudited Six Months Unaudited Six Months Audited Year
ended ended ended
30 November 2021 30 November 2020 31 May 2021
£ £ £
Operating activities
Loss after tax (636,398) (1,129,659) (3,304,899)
Adjustment for:
Depreciation 11,200 67 4,443
Share based transactions (69,600) - 1,175,705
Revaluation of intangible asset - - (54,986)
Changes in working capital
(Increase)/decrease in trade and other receivables (451,650) (182,375) 212,334
Increase in trade and other payables 873,968 398,687 (153,509)
(Decrease) in Net cash from operating activities (272,480) (913,280) (1,520,912)
Investing activities
Purchase of exploration licences - (825,748) (1,145,678)
Spending on exploration licences (372,143) - (136,781)
Purchase of fixed assets (221,846) (35,397)
Purchase of investment - (62,260) (62,260)
(Decrease) in Net cash from investing activities (593,989) (888,008) (1,380,116)
Financing activities
Ordinary Shares issued (net of issue costs) 5 3,290,415 2,936,271 2,940,674
Net cash flows from financing activities 3,290,415 2,936,271 2,940,674
Increase/(decrease) in cash and short-term deposits 2,423,946 1,134,983 39,646
Cash and short-term deposits as at the start of the period 22,143 10,430 10,430
Effect of foreign exchange changes (26,823) (112) (27,933)
Cash at the end of the period 2,419,266 1,145,301 22,143
Notes to the Condensed Consolidated Financial Statements
For the six months ended 30 November 2021
1 General information
The Company was incorporated in England under the Laws of England and Wales
with registered number 10186111 on 18 May 2016. All of the Company's
Ordinary Shares were admitted to the London Stock Exchange's Main Market and
commenced trading on 1 November 2017. The company was re-registered as a
public company under Companies Act 2006 on 1 June 2017, by the name Contango
Holdings plc.
The Company is listed on the Standard Market of London Stock Exchange plc.
The unaudited interim consolidated financial statements for the six months
ended 30 November 2021 were approved for issue by the board on 16 March 2022.
The figures for the six months ended 30 November 2021 and 30 November 2020 are
unaudited and do not constitute full accounts. The comparative figures for the
period ended 31 May 2021 are extracts from the annual report and do not
constitute statutory accounts.
2 Basis of Preparation and Risk Factors
The Company Financial Information has been prepared in accordance with and
comply with IFRS as adopted by the European Union, International Financial
Reporting Interpretations Committee interpretations and the Companies Act
2006. The financial statements have been prepared under the historical cost
convention as modified for financial assets carried at fair value.
The financial information of the company is presented in British Pound
Sterling ("£").
The accounting policies and methods of calculation adopted are consistent with
those of the financial statements for the year ended 31 May 2021.
The business and operations of the Company are subject to a number of risk
factors which may be sub-divided into the following categories:
Exploration and development risks, including but not limited to:
· Mineral exploration is speculative and uncertain
· Verification of historical washability analysis
· Independent verification of internal resource estimation at
Garalo
· Mining is inherently dangerous and subject to conditions or
events beyond the Company's control, which could have a material adverse
effect on the Company's business
· The volume and quality of coal recovered may not conform to
current expectations
· The extend and grade of gold mineralisation at Garalo may not
conform to current expectations
Permitting and title risks, including but not limited to:
· Licence and permits
· The Company will be subject to a variety of risks associated with
current and any potential future joint ventures, which could result in a
material adverse effect on its future growth, results of operations and
financial position
Political risks, including but not limited to:
· Political stability
· Enforcement of foreign judgements
· Potential legal proceedings or disputes may have a material
adverse effect on the Company's financial performance, cash flow and results
of operations
Financial risks, including but not limited to:
· Foreign exchange effects
· Valuation of intangible assets
· The Company may not be able to obtain additional external
financing on commercially acceptable terms, or at all, to fund the development
of its projects
· The Company will be subject to taxation in several different
jurisdictions, and adverse changes to the taxation laws of such jurisdictions
could have a material adverse effect on its profitability
· The Company's insurance may not cover all potential losses,
liabilities and damage related to its business and certain risks are uninsured
and uninsurable
Commodity prices, including but not limited to:
· The price of coal may affect the economic viability of ultimate
production at Lubu
· The revenues and financial performance are dependent on the price
of coal
· The price of gold may affect the economic viability of ultimate
production at Garalo
Operational risks, including but not limited to:
· Availability of local facilities
· Adverse seasonal weather
· The Company's operational performance will depend on key
management and qualified operating personnel which the Company may not be able
to attract and retain in the future
· The Company's directors may have interests that conflict with its
interests
· Risk relating to Controlling Shareholders
The Company's comments and mitigating actions against the above risk
categories are as follows:
Exploration and development risks
There can be no assurance that the Company's development activities will be
successful however significant exploratory work has been conducted to date at
Lubu and Garalo which supports the Board's confidence that a profitable mining
operation can be developed.
Additionally, the phased development route which will be employed at Lubu
seeks to mitigate risks along the development life cycle of the project.
Permitting and title risks
The Company complies with existing laws and regulations and ensures that
regulatory reporting and compliance in respect of each permit is achieved.
Applications for the award of a permit may be unsuccessful. Applications for
the renewal or extension of any permit may not result in the renewal or
extension taking effect prior to the expiry of the previous permit. There can
be no assurance as to the nature of the terms of any award, renewal or
extension of any permit.
The Company regularly monitors the good standing of its permits.
Political risks
The Company maintains an active focus on all regulatory developments
applicable to the Company, in particular in relation to the local mining
codes.
In recent years the political and security situations in Zimbabwe and Mali
have been particularly volatile.
Financial risks
The board regularly reviews expenditures on projects. This includes updating
working capital models, reviewing actual costs against budgeted costs, and
assessing potential impacts on future funding requirements and performance
targets.
Commodity prices
As projects move towards commercial mining the Company will increasingly
review changes in commodity prices so as to ensure projects remain both
technically and economically viable.
Operational risks
Continual and careful planning, both long-term and short-term, at all stages
of activity is vital so as to ensure that work programmes and costings remain
both realistic and achievable.
COVID-19 outbreak
In addition to the foregoing comments and mitigating actions against the above
risk categories the Company has implemented various protocols in relation to
the current COVID-19 outbreak. Contango places the health and safety of its
employees and contractors as its highest priority. Accordingly, a business
continuity programme has been put in place to protect employees whilst
ensuring the safe operation of the Company.
Having spoken with, amongst others, local government, staff and contractors,
strict protocols have been implemented to reduce the risk of transmission of
COVID-19 at all the Company's operations.
The situation in respect of COVID-19 is an evolving one and the Board will
continue to review its potential impact on its staff and the business.
3 Loss before taxation
Loss before income tax is stated Unaudited Six Months Ended 30 November 2020 Audited Year Ended 31 May 2021
after charging: Unaudited Six Months Ended 30 November 2021
£ £ £
Directors' remuneration 50,400 52,800 103,800
Contango share-based bonus on IPO - 100,000 100,000
Relisting costs - 417,642 203,727
Ongoing listing costs 151,177 80,661 191,091
Salaries 217,184 174,755 370,337
Consultancy fees - 80,695 117,867
Legal and accountancy fees 4,869 2,280 8,053
Travel 174,673 69,287 257,333
Office costs 66,742 85,186 189,454
Share performance options - - 1,700,505
Net warrant issue costs (69,600) - 75,200
Depreciation 11,200 - 4,443
Other 29,753 66,353 -
Group audit fee - - 25,000
Fee payable to the Company's auditor in respect of all other non-audit
services
- -
Fees paid to auditors for non-audit work services - - 2,475
4 Loss per Ordinary Share
The calculation of the basic and diluted loss per Ordinary Share is based on
the following data:
Unaudited Six Months to Unaudited Six Months to Audited Year
30 November 30 November to
2021 2020 31 May
2021
£ £ £
Earnings
Loss from continuing operations for the period attributable to the equity (591,350) (1,108,611) (3,248,015)
holders of the Company
Number of Ordinary Shares
Weighted average number of Ordinary Shares for the purpose of basic and
diluted earnings per Ordinary Share (number)
222,711,321 120,346,178 218,418,394
Basic and diluted loss per Ordinary Share (pence) (0.27) (0.92) (1.49)
There are no potentially dilutive Ordinary Shares in issue.
5. Intangible Asset
Unaudited As at Unaudited As at Audited As at
30 November 30 November 31 May
2021 2020 2021
£ £ £
At 1 June 2021 10,118,098 - -
Additions - on acquisition - 9,797,701 8,235,849
Additions - during year 397,843 1,100,997 1,882,249
Amortisation - -
Total 10,515,941 10,898,698 10,118,098
Mining rights Zimbabwe 8,495,807 9,797,701 8,299,256
Mining rights Mali (Garalo) 1,273,617 1,100,997 1,072,325
Mining rights Mali (Nthiela) 746,517 - 746,517
10,515,941 10,898,698 10,118,098
The intangible asset represents the mining rights and technical information
acquired when the Group acquired its 70% shareholding in Monaf Investments
(Pty) Ltd on 18 June 2020; its 75% share in the Garalo gold licence in Mali
bought for $1 million on 22 October 2020; and its 100% share in the Nthiela
gold licence (adjacent to Garalo) in Mali. The Nthiela licence was acquired
for approximately £750,000 - being €400,000 (£346,517) in cash and
4,000,000 ordinary shares at £0.10 to be issued during 2022.
6. Other receivables
Unaudited As at Unaudited As at Audited As at
30 November 30 November 31 May
2021 2020 2021
£ £ £
Prepayments 16,332 - 24,254
Other debtors 571,016 585,538 111,445
587,348 585,538 135,699
7. Trade and other payables
Unaudited As at Unaudited As at Audited As at
30 November 30 November 31 May
2021 2020 2021
£ £ £
Trade payables 221,919 76,809 180,974
Accruals and other payables 101,963 757,051 100,690
Convertible debt 831,750 - -
1,155,632 833,860 281,664
The convertible loan note was announced on 3(rd) June 2021 and had a fixed
conversion price of 6 pence per share, with a mandatory conversion to take
place on 4 January 2022. Due to a lack of headroom to issue new shares in
January all note holders unanimously agreed to extend the life of the
instruments by a further six months with no additional charges or penalties.
The revised date for mandatory conversion is therefore 4 July 2022. The term
of the attaching one warrant for every two ordinary shares, with an exercise
price of 8p, remains unchanged.
8 Share capital
Number of Ordinary Shares issued and fully paid Share Capital Share Premium Total Share Capital
£ £ £
As at 01 June 2021 242,633,276 2,279,338 8,294,643 10,573,981
Placement November 2021 41,666,666 416,667 2,083,333 2,500,000
Warrants Exercised 25,124,990 104,255 798,660 902,915
Less share issue costs (112,500) (112,500)
As at 31 May 2021 309,424,932 2,687,760 11,176,636 13,864,396
The Ordinary Shares issued by the Parent Company have par value of 1p each and
each Ordinary Share carries one vote on a poll vote. The Authorised share
capital of the Parent Company is £5,000,000 ordinary shares at £0.01 per
share resulting in 500,000,000 ordinary shares.
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