REG - Corcel PLC - Half-year Report
20/03/2023 07:00
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RNS Number : 4417T Corcel PLC 20 March 2023
Corcel PLC
("Corcel" or the "Company")
Half Year Report
20 March 2023
Corcel Plc (London AIM: CRCL), the extractive industries exploration and
development company, with interests in battery metals including nickel,
cobalt, and rare earth elements, announces its unaudited half-yearly results
for the six months ended 31 December 2022.
Board Statement
Dear Shareholders,
We believe Q1 2023 marks a pivotal moment for your Company, following an
admittedly difficult period.
Corcel is now positioned as a carried non-operator miner across multiple
mineral exploration projects in its growing battery metals upstream portfolio
and has recently broadened its strategy to include oil and gas alongside
mining, with a particular focus on Brazil. This reflects the significant
onshore opportunity set in the oil and gas sector at attractive valuations and
the Company's Executive experience and connectivity in this space. Whilst
the Company continues to have a strong belief in global electrification, with
the expected supply constraints in these key metals and the associated price
increases already underway, the Company has decided to take advantage of the
macro tailwinds in the oil and gas sector and leverage its connections and
expertise in the sector.
To enable this strategic repositioning, the Company has taken various steps to
re-position its legacy portfolio including:
o Restructuring its PNG nickel assets, positioning them in a broader
portfolio, on a fully carried basis, ready for a standalone listing which we
expect to be at a highly attractive valuation
o Acquiring and subsequently farming out the Mt. Weld project in Western
Australia. Mt Weld is a potentially significant rare earth project, located
next to one of the world's largest REE mines, where the encouraging results of
a magnetics inversion confirm the potential of the project, which is now
preparing up to four high quality drill targets. This interest is
non-operated and fully carried with drilling expected to commence shortly with
potentially transformational results
o Completing a series of asset sales, including the Tring Road and the
Burwell projects
o Completing a substantial deleveraging programme during 2022
The Company is therefore now positioned with near term, and potentially
transformational, newsflow from both Mt Weld and advantaged potential oil and
gas acquisitions. With its legacy assets now fully carried, we believe
shareholders can look forward to an exciting 2023.
The Board and I want to thank our shareholders for their support.
James Parsons
Executive Chairman
Consolidated statement of financial position
as at 31 December 2022
Notes 31 December 2022 31 December 2021 30 June 2022
Unaudited, £'000 Unaudited, £'000 Audited, £'000
ASSETS
Non-current assets
Investments in associates and joint ventures 6 1,921 2,381 1,988
Exploration and evaluation assets 8 1,217 1,067 1,026
Property, plant and equipment 52 110 52
FVTOCI financial assets 7 1 1 1
FVTPL financial assets 7 - 72 -
Other receivables 1,514 1,416 1,502
Total non-current assets 4,705 5,047 4,569
Current assets
Cash and cash equivalents 226 50 25
Trade and other receivables 215 178 277
Total current assets 441 228 302
TOTAL ASSETS 5,146 5,275 4,871
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Called up share capital 9 2,770 2,746 2,751
Share premium account 25,674 24,161 24,961
Shares to be issued 75 75 75
Other reserves 2,412 2,048 2,095
Retained earnings (27,457) (25,245) (26,757)
Total equity 3,474 3,785 3,125
LIABILITIES
Current liabilities
Trade and other payables 758 218 323
Short term borrowings 914 1,272 1,423
Total current liabilities 1,672 1,490 1,746
TOTAL EQUITY AND LIABILITIES 5,146 5,275 4,871
The accompanying notes form an integral part of these financial statements.
Consolidated statement of income
for the period ended 31 December 2022
Notes 6 months to 31 December 2022 6 months to 31 December 2021
Unaudited, £'000 Unaudited, £'000
Gain on sale of JV projects 353 -
Administrative expenses 3 (527) (507)
Project expenses (44) -
Foreign currency (loss)/gain 16 -
Finance costs, net (431) (105)
Share of loss of associates and joint ventures (67) (2)
Loss for the period before taxation (700) (614)
Tax expense - -
Loss for the period after taxation (700) (614)
Earnings per share
Loss per share - basic, pence 4 (0.13) 0.16
Loss per share - diluted, pence 4 (0.13) 0.16
Consolidated statement of comprehensive income
for the period ended 31 December 2022
6 months to 31 December 2022 6 months to 31 December 2021
Unaudited, £'000 Unaudited, £'000
(Loss)/profit for the period (700) (614)
Unrealised foreign currency gain/(loss) on translation of foreign operations (38) -
Revaluation of FVTOCI investments 7 - (6)
Total comprehensive loss for the period (738) (620)
The accompanying notes form an integral part of these financial statements.
Consolidated statement of changes in equity
for the period ended 31 December 2022
The movements in equity during the period were as follows:
Share capital Share premium account Shares to be issued Retained earnings Other reserves Total Equity
£'000 £'000 £'000 £'000 £'000 £'000
As at 1 July 2021 (audited) 2,726 24,161 75 (24,630) 2,018 4,370
Changes in equity for six months ended 31 December 2021
Profit/ (loss) for the period - - - (615) - (615)
Other comprehensive (loss)/income for the period - - - - - -
Revaluation of FVTOCI investments - - - - (6) (6)
Total comprehensive (loss)/income for the period - - - (615) (6) (621)
Transactions with owners
Warrants issued - - - - 36 36
Total Transactions with owners - - - (615) 30 (585)
As at 31 December 2021 (unaudited) 2,746 24,161 75 (25,245) 2,048 3,785
As at 1 July 2022 (audited) 2,751 24,961 75 (26,757) 2,095 3,125
Changes in equity for six months ended 31 December 2022
Profit/ (loss) for the period - - - (700) - (700)
Other comprehensive (loss)/income for the period
Unrealised foreign currency gain arising on translation of foreign operations - - - - (38) (38)
Total comprehensive (loss)/income for the period - - - (700) (38) (738)
Transactions with owners
Issue of shares 19 738 - - - 757
Share issue and fundraising costs - (25) - - - (25)
Options issued - - - - 27 27
Warrants issued - - - - 328 328
Total Transactions with owners 19 713 - - 355 1,087
As at 31 December 2022 (unaudited) 2,770 25,674 75 (27,457) 2,412 3,474
FVTOCI investments reserve Share-based payments reserve Warrants Foreign currency translation reserve Total other reserves
Reserve
£'000 £'000 £'000 £'000 £'000
As at 1 July 2021 (audited) 4 99 1,380 535 2,018
Changes in equity for six months ended 31 December 2021
Other Comprehensive income
Revaluation of FVTOCI investments (6) - - - (6)
Share options granted during the year - - - - -
Warrants granted during the year - - 36 - 36
Unrealised foreign currency gains arising upon retranslation of foreign - - - - -
operations
Total comprehensive income/(loss) for the period (6) - 36 - 30
As at 31 December 2021 (unaudited) (2) 99 1,416 535 2,048
As at 1 July 2022 (audited) (2) 116 1,450 531 2.095
Changes in equity for six months ended 31 December 2022
Other Comprehensive income
Share options granted during the year - 27 - - 27
Warrants granted during the year - - 328 - 328
Unrealised foreign currency gains arising upon retranslation of foreign - - - (38) (38)
operations
Total comprehensive income/(loss) for the period - 27 328 (38) 317
As at 31 December 2022 (unaudited) (2) 143 1,778 493 2,412
Consolidated statement of cash flows
for the period ended 31 December 2022
Note 6 months to 31 December 2022 6 months to 31 December 2021
Unaudited Unaudited
£'000 £'000
Cash flows from operating activities
(Loss)/profit before taxation (700) (614)
Decrease/(increase) in receivables 62 (14)
Increase in payables 435 (95)
Share-based payments 355 36
Finance cost, net 103 69
Share of loss of associates and joint ventures, net of tax 67 2
Net cash flows from operations 322 (616)
Cash flows from investing activities
Additional investments in JVs and investment in associates (12) (3)
Purchase of financial assets carried at amortised cost - (31)
Investment in exploration and evaluation assets (20) -
Cash acquired on business combination - 2
Net cash flows from investing activities (32) (32)
Cash flows from financing activities
Proceeds from issue of shares 537 -
Interest paid (103) (69)
Proceeds of new borrowings, as received net of associated fees - 475
Repayment of borrowings (509) (100)
Net cash flows from financing activities (75) 306
Net decrease in cash and cash equivalents 215 (342)
Cash and cash equivalents at the beginning of period 25 392
Effects of foreign exchange translation on currency holdings (14) -
Cash and cash equivalents at end of period 226 50
Half-yearly report notes
for the period ended 31 December 2022
1 Company and Group
As at 30 June 2022 and 31 December 2022 the Company had one or more operating
subsidiaries and has therefore prepared full and interim consolidated
financial statements respectively.
The Company will report again for the full year ending 30 June 2023.
The financial information contained in this half yearly report does not
constitute statutory accounts as defined in section 435 of the Companies Act
2006. The financial information for the year ended 30 June 2022 has been
extracted from the statutory accounts of the Group for that year. Statutory
accounts for the year ended 30 June 2022, upon which the auditors gave an
unqualified audit report which did not contain a statement under Section
498(2) or (3) of the Companies Act 2006, have been filed with the Registrar of
Companies.
2 Accounting Polices
Basis of preparation
The consolidated interim financial information has been prepared in accordance
with IAS 34 'Interim Financial Reporting'. The accounting policies applied
by the Group in these condensed consolidated interim financial statements are
the same as those applied by the Group in its consolidated financial
statements as at and for the year ended 30 June 2022, which have been prepared
in accordance with IFRS.
Business combinations
On the acquisition of a subsidiary, the business combination is accounted for
using the acquisition method. In the consolidated statement of financial
position, the acquiree's identifiable assets, liabilities are initially
recognised at their fair values at the acquisition date. The cost of an
acquisition is measured as the aggregated amount of the consideration
transferred, measured at the date of acquisition. The consideration paid is
allocated to the assets acquired and liabilities assumed on the basis of fair
values at the date of acquisition. The results of acquired operations are
included in the consolidated statement of comprehensive income from the date
on which control is obtained.
If the cost of acquisition exceeds the identifiable net assets attributable to
the Group, the difference is considered as purchased goodwill, which is not
amortised but annually reviewed for impairment. In the case that the
identifiable net assets attributable to the Group exceed the cost of
acquisition, the difference is recognised in profit or loss as a gain on
bargain purchase.
If the initial accounting for a business combination cannot be completed by
the end of the reporting period in which the combination occurs, only
provisional amounts are reported, which can be adjusted during the measurement
period of 12 months after acquisition date.
After initial recognition, goodwill is measured at cost less any accumulated
impairment losses.
3 Administrative expenses
6months to 6 months to
31 December 2022 31 December 2021
Unaudited Unaudited
£'000 £'000
Staff Costs:
Payroll 175 220
Pension 8 10
Share based Payments -Staff 26 -
HMRC / PAYE 26 26
Total: 235 256
Professional Services:
Accounting 51 43
Legal 17 11
Business Development 6 -
Marketing & Investor Relations 4 20
Funding costs 20 -
Other 35 12
Total: 133 86
Regulatory Compliance 67 55
Travel 2 4
Office and Admin Costs:
General 18 18
IT costs 3 5
Rent - Main Office 14 6
Insurance 55 77
Total: 90 106
Total administrative expenses 527 507
4 Loss per share
The following reflects the loss and share data used in the basic and diluted
profit/(loss) per share computations:
6 months to 6 months to
31 December 2022 31 December 2021
Unaudited Unaudited
Loss attributable to equity holders of the parent company, in Thousand 614
Sterling (£'000)
Weighted average number of Ordinary shares of £0.0001 in issue, used for 384,787,602
basic and diluted EPS
Loss per share - basic and diluted, pence 0.16
At 31 December 2022 and at 31 December 2021, the effect of all the instruments
is anti-dilutive as it would lead to a further reduction of loss per share,
therefore they were not included into the diluted loss per share calculation.
Options and warrants that could potentially dilute basic EPS in the future,
but were not included in the calculation of diluted EPS because they are
anti-dilutive for the periods presented:
6 months to 6 months to
31 December 2022 31 December 2021
Unaudited Unaudited
Share options granted to employees - total, of them 26,687,412 6,215,334
- Vested at the end of the reporting period - 125,000
- Not vested at the end of the reporting period 26,687,412 6,090,334
Warrants given to shareholders as a part of placing equity instruments 615,665,670 141,999,329
Total number of instruments in issue not included into the fully diluted EPS 642,353,082 148,214,663
calculation
5 Segmental analysis
The Group's operational segments are as follows:.
For the six-month period to 31 December 2022 Battery Metals Flexible Grid Solutions (FGS) Corporate and unallocated
Total
£'000 £'000 £'000 £'000
Revenue - - - -
Result
Segment results (110) 331 (490) (269)
Loss before tax and finance costs (110) 331 (490) (269)
Finance costs - - (431) (431)
Loss for the period before taxation (110) 331 (921) (700)
Taxation expense - - - -
Loss for the period after taxation (110) 331 (921) (700)
Total assets at 31 December 2022 4,742 2 402 5,146
For the six-month period to 31 December 2021 Battery Metals (Nickel and Vanadium) Flexible Grid Solutions Corporate and unallocated
Total
£'000 £'000 £'000 £'000
Revenue - - - -
Result
Segment results (5) (24) (480) (509)
Loss before tax and finance costs
Finance costs - - (105) (105)
Loss for the period before taxation
Taxation expense - - - -
Loss for the period after taxation (5) (24) (585) (614)
Total assets at 31 December 2020 4,497 487 291 5,275
6 Investments in associates and joint ventures
31 December 2022 31 December 30 June
Unaudited 2021 2022
£'000 Unaudited Audited
£'000 £'000
At the beginning of the period 1,988 2,380 2,380
Additional investments in JVs - 3 11
Share of loss for the period using equity method (67) (2) (3)
Impairments - - (400)
At the end of the period 1,921 2,381 1,988
7 Financial assets
31 December 2022 31 December 30 June
Unaudited 2021 2022
£'000 Unaudited Audited
£'000 £'000
FVTOCI financial instruments at the beginning of the period 1 7 7
Disposals - - -
Revaluations and impairment - (6) (6)
FVTOCI financial assets at the end of the period (unaudited) 1 1 1
31 December 2022 31 December 30 June
Unaudited 2021 2022
£ Unaudited Audited
£ £
FVTPL financial instruments at the beginning of the period - 72 72
Additions - - -
Impairments - - (72)
FVTPL financial assets at the end of the period (unaudited) - 72 -
8 Share Capital of the company
The share capital of the Company is as follows:
Number of shares Nominal, £'000
Allotted, issued and fully paid
Deferred shares of £0.0009 each 1,788,918,926 1,610
A Deferred shares of £0.000095 each 2,497,434,980 237
B Deferred shares of £0.000099 each 8,687,335,200 860
Ordinary shares of £0.0001 each 440,878,296 45
As at 1 July 2022 (Audited) 2,752
Shares issued in the period
Ordinary shares of £0.0001 each 189,330,000 19
Allotted, issued and fully paid
Deferred shares of £0.0009 each 1,788,918,926 1,610
A Deferred shares of £0.000095 each 2,497,434,980 237
B Deferred shares of £0.000099 each 8,687,335,200 860
Ordinary shares of £0.0001 each 630,208,296 63
As at 31 December 2022 (Unaudited) 2,770
9 Capital Management
Management controls the capital of the Group in order to control risks,
provide the shareholders with adequate returns and ensure that the Group can
fund its operations and continue as a going concern.
The Group's debt and capital includes ordinary share capital and financial
liabilities, supported by financial assets.
There are no externally imposed capital requirements.
Management effectively manages the Group's capital by assessing the Group's
financial risks and adjusting its capital structure in response to changes in
these risks and in the market. These responses include the management of debt
levels, distributions to shareholders and share issues.
There have been no changes in the strategy adopted by management to control
the capital of the Group since the prior year.
10 Events after the reporting period
Mt Weld Farmout
On 4 January 2023, the Company announced that it had entered into a
farm-out and joint venture agreement with Riversgold Ltd (ASX:RGL) covering
its recently acquired rare earth elements project at Mt. Weld, in Laverton,
Australia. The transaction resulted in the Company receiving AU$30,000
immediately in cash and a funded carry through an AU$500,000 initial work
program covering a 12 month period, which if completed would see the Company
surrendering 50% of its interest in the project to the JV partner. A further
earn-in period, with a AU$1,000,000 required spend, would allow RGL to
potentially acquire an additional 20% interest in the project.
Sale of Burwell Energy Storage Project
On 25 January 2023 the Company announced that had completed the
sale of its 100% interest in the Burwell Energy Storage project to Burwell AL
Limited. Consideration for the transaction totalled £200,000 plus
reimbursement for the Company's £50,000 grid connection deposit lodged in
prior years.
Debt Restructuring
On 30 January 2023 the Company announced restructured debt
totalling £673,348 by way of an immediate cash payment of £235,671,
incurring a refinancing fee of 5% of principal outstanding. The remaining
principal of £471,343 is due for repayment in 8 equal monthly instalments
commencing in February 2024, attracts an interest rate of 6% annually and may
be converted into ordinary shares at a fixed price of £0.004 per share. The
Company retains the right to repay the loan early in cash, subject to a 5%
early repayment fee.
Option to Acquire Australian Lithium Project
On 22 February 2023 the Company announced that it had entered into an
exclusive 30-day option with Huntsman Exploration Inc to acquire a 100%
interest in the Canegrass Lithium Project in Australia. Consideration for
entering into the option took the form of a non-refundable cash payment of
£20,000 and allows the Company to acquire the asset within the option period
for consideration of £200,000, payable by the issuance of 50,000,000 new
ordinary shares.
NPC JV signature
On 1 March 2023 the Company announced that it had entered into agreements with
Integrated Energy Metals ("IEM") to restructure the Company's PNG battery
metals assets into a new carried vehicle, Integrated Battery Metals ("IBM").
Following the transaction the Company will retain a 50% interest in the new JV
vehicle, receive a $1,500,000 carried interest in the forward work program and
be entitled to a gross revenue royalty of 1.5% over production from the Wowo
Gap project. It is intended that IBM will, ultimately, be listed in Asia.
An additional announcement would be made at completion of the transaction.
Wowo Gap Exploration License Renewal
On 7 March 2023, the Company announced that Exploration License 1165 (EL 1165)
had been renewed for a period of four years retroactively, with the updated
term now valid through February 2024.
For further information, please contact:
Scott Kaintz
Corcel Plc CEO
020 7747 9960
James Joyce / James Bavister /Andrew de Andrade WH
Ireland Ltd NOMAD & Broker
0207 220 1666
Patrick d'Ancona
Vigo Communications IR
0207 3900
230
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