REG - Critical Metals PLC - Interim Results
31/03/2023 12:00
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RNS Number : 9732U Critical Metals PLC 31 March 2023
Critical Metals plc / EPIC: CRTM / Market: Main Market
31 March 2023
Critical Metals plc
("Critical Metals" or the "Company")
Interim Results
Critical Metals plc, an investment company established to target opportunities
in the critical and strategic metals sector, is pleased to announce its
interim results for the six-month period ended 31 December 2022.
Highlights
· Successful readmission to trading on the Standard Segment of the
Official List and trading on the Main Market of the London Stock Exchange
· Over the period, cumulatively acquired a 100% interest in Madini
Occidental Limited ("Madini Occidental"), which holds a 70% interest in the
Molulu copper/cobalt project (the "Molulu Project")
· Raised £1.8 million in conjunction with the readmission to fund
the acquisition of the Molulu Project, drilling, mine site upgrades and
general working capital
· Started early-stage groundwork to increase the understanding of
the Molulu Project and identity further drilling targets in preparation for
the next drilling campaign
· Strengthened technical team on site with the appointments of
Lloyd Kirtley as DRC Project Field Manager and John Greef as Mine Manager at
the Molulu Project
· Raised an additional £1.3 million and indirectly increased its
ownership of the Molulu Project
· Post period, on the 26 January 2023, the Company announced the
start of copper production with a forecast of producing circa. 120,000t per
annum of Copper Oxide Ore
Russell Fryer, CEO of Critical Metals, commented:
"The last six months of the calendar year were pivotal for Critical Metals.
The support of our shareholders enabled us to raise the £1.8 million to fund
our then 57% stake in the Molulu Project and ensure our readmission to the
Main Market. We have worked tirelessly since, strengthening our team on the
ground, ensuring the delivery of key equipment on site, and repairing and
building the necessary infrastructure to start production.
"In tandem with the work on site, the Board entered discussions with our
partners to increase our stake in the Molulu Project. This increase was done
in two tranches, and I am delighted that Critical Metals now holds a 70%
interest in what we believe is a quality project in the DRC. We announced
production on the 26 January 2023, post period, a great achievement by
everyone involved. We expect that Molulu will be cash generative during 2023
as we commence sales post the rainy season ending. I remain extremely
optimistic and excited about the year ahead and look forward to keeping
shareholders informed about the Molulu Project and other acquisition targets,
as and when these materialise."
For further information on the Company please visit www.criticalmetals.co.uk
(http://www.criticalmetals.co.uk/) or contact:
Russell Fryer Critical Metals plc Tel: +44 (0)20 7236 1177
Lucy Williams Peterhouse Capital Limited, Corporate Broker Tel: +44 (0)20 7469 0936
Duncan Vasey
Tel: +44 (0)20 7220 9797
Catherine Leftley/Ana Ribeiro/Isabelle Morris St Brides Partners Ltd, Tel: +44 (0)20 7236 1177
Financial PR
Chairman's Statement
The last six months have been transformational for Critical Metals. On the
12(th) September 2022, the Company announced the successful fundraise of £1.8
million to partially fund the acquisition of 57% in Madini Occidental Limited
("Madini Occidental" or "MO"), which holds a 70% interest in the Molulu
copper/cobalt project (the "Molulu Project"), its flagship project in the
Democratic Republic of Congo ("DRC"). This marked the Company's first
investment, and it was in line with its acquisition strategy - to focus on
known projects with low entry costs and the potential to generate short-term
cashflow.
Since then, it has wasted no time in starting the necessary groundwork and
geological surveys to increase its understanding of the Molulu Project in the
DRC. As part of this, the Company made key appointments to the team during
the period. In October it appointed Lloyd Kirtley as the DRC Project Field
Manager and John Greeff joined the Company, as Mine Manager, the following
month, both have significant experience working in African mining
jurisdictions. Combined with the rest of the team at Molulu, Lloyd and John
have been instrumental in the success of getting the mine operational.
In December 2022, Critical Metals raised a further £1.3 million from five
investors including seasoned investors Ian Hannam and Mark Horrocks. The
proceeds were used to hire two consultants to help evaluate and advise on
potential acquisition opportunities as well as fund the acquisition of the
remaining 21.5% in Madini Occidental, increasing its stake to 100% and giving
it an indirect ownership of the Molulu Project of 70%. This was part of a
strategic reorganisation of the ownership of Molulu and will lead to a more
streamlined and efficient management structure.
In January 2023, post period end, the Company announced that it had commenced
production of Copper Oxide Ore at Molulu. Whilst we were delighted to begin
production, we were disappointed by the short delay due to the hold-up in the
delivery of key equipment to the site. This is a common problem being faced by
the industry following the COVID pandemic and the more recent war in Ukraine
putting pressure on supply chains. However, the minor delay does not take
way from the team's achievements with production at Molulu expected to be
approximately 120,000 tonnes of Copper Oxide Ore per annum.
Production couldn't come at a better time with global demand for battery
metals such as copper and cobalt are likely to continue, as producers struggle
to match output with demand for industry metals from car manufactures to
energy storage batteries, to name a few.
The board, and the wider Critical Metals team believes that the Company is
well positioned to take advantage of this move towards a greener world.
Looking forward, the Company will continue to support the development of the
Molulu Project. Furthermore, the Company will continue its search for new
investment opportunities that the board believes have the potential to be
lucrative for the Company and its shareholders. This will be part of
fulfilling the Company's aim of acquiring significant minority equity
interests of near production or within the natural resource's developments in
the African continent.
I would like to thank fellow board members Anthony Eastman and Marcus
Edwards-Jones for their continued support and guidance. 2022 was a challenging
year for Critical Metals, however since September the company has seen
considerable progress towards its aims. I would like to thank our shareholders
who have remained with us throughout our journey and look forward to a
successful 2023.
Russell S. Fryer
Executive Chairman & CEO (Chief Executive Officer)
31 March 2023
Notes 6 months to 31 December 2022 (unaudited) 6 months to 31 December 2021 (unaudited)
£ £
Continuing operations
Revenue from continuing operations - -
Cost of sales - -
Gross Profit - -
Other expenses (1,295,130) (284,554)
Earnings before interest, taxation, depreciation and amortisation (1,295,130) (284,554)
Depreciation (7,171) -
Interest expenditure (16,730) (284,554)
Loss before taxation (1,319,031) (284,554)
Income tax - -
Profit (Loss) for the year from continuing operations attributable to the (1,319,031) (284,554)
owners of the company
Attributable to:
Owners of the company (1,052,702) (284,554)
Non-controlling interest (266,329) -
(1,319,031) (284,554)
Other comprehensive income
Translation of foreign operations 82,303 -
Valuation (losses)/gains on fair value through other comprehensive income (121,700)
equity investments
Total other comprehensive profit (loss) (39,397) -
Total comprehensive profit (loss) for the year (1,358,428) (284,428)
Total comprehensive profit (loss) attributable to:
Owners of the company (1,092,099) -
Non-controlling interest (266,329) -
(1,358,428) (284,428)
Earnings per share (basic and diluted) attributable to the equity holders 3 (0.03) (0.68)
(pence)
The consolidated statement of comprehensive income has been prepared on the
basis that all operations are continuing operations.
Notes 31 December 2022 (unaudited) 30 June 2022 (audited)
£ £
Non-current assets
Property, plant & equipment 175,895 -
Investment in listed shares 331,201 -
Loan notes - 39,827
Exploration & evaluation asset 1,275,292 -
Total non-current assets 1,782,388 39,827
Current assets
Trade and other receivables 970,506 55,409
Cash at bank and in hand 1,029,944 824,251
Total current assets 2,000,450 879,660
Total assets 3,782,838 919,487
Current liabilities
Trade and other payables 1,760,747 110,890
Total liabilities 1,760,747 110,890
Net assets 2,022,091 808,597
Equity
Called up share capital 4 295,236 208,298
Share premium account 4 4,989,582 1,735,315
Share based payment reserve 5 45,838 45,838
Foreign exchange reserve 82,303 -
Retained earnings (2,355,256) (1,180,854)
Non-controlling interest (1,035,610) -
Total equity 2,022,093 808,597
Issued Share Capital Share Premium Retained Earnings Non-controlling interest Total Equity
SBP Reserve FCTR
£ £ £ £ £ £ £
As at 30 June 2021 208,298 1,735,315 45,838 - (519,111) - 1,470,340
Loss for the year - - - - (661,743) - (661,743)
Other comprehensive income - - - - - - -
Total comprehensive income for the year - - - - (661,743) (661,743)
Total transactions with owners - - - - - - -
As at 30 June 2022 208,298 1,735,315 45,838 - (1,180,854) - 808,597
Loss for the year - - - (1,052,702) (266,329) (1,319,031)
Other comprehensive income - - - 82,303 (121,700) - (39,397)
Total comprehensive income for the year 82,303 (1,174,402) (266,329) (1,358,428)
Acquisition of subsidiary - - - - - (769,281) (769,281)
Net proceeds of Shares issued during the period 86,938 3,254,267 - - - - 3,341,205
Total transactions with owners 86,938 3,254,267 - - - - 2,571,924
As at 31 December 2022 295,236 4,989,582 45,838 82,303 (2,355,256) (1,035,610) 2,022,093
31 December 2022 (unaudited) 31 December 2021 (unaudited)
£ £
Cash from operating activities
Loss for the year (1,440,731) (284,554)
Adjustments for:
Depreciation 7,171 -
Unrealised gains on sale on listed investments 121,700 -
Realised gains on sale of listed investments (14,495)
Interest payable 16,730 -
Foreign exchange (16,812) -
Operating cashflow before working capital movements (1,326,437) (284,554)
Increase in trade and other receivables (42,425) (106,596)
Decrease increase in trade and other payables (289,797) (22,624)
Net cash used in operating activities (1,658,659) (413,774)
Cash from financing activities
Net Proceeds on the issue of shares 2,541,205 -
Net cash from financing activities 2,541,205 -
Cash from investing activities
Purchase of tangible fixed assets (190,197) -
Acquisition of subsidiary net of cash 24,521 -
Purchases of OCI listed financial assets (508,000) -
Net cash used in investing activities (673,676) -
Net increase /(decrease) in cash and cash equivalents 208,870 (413,774)
Cash and cash equivalents at beginning of year 824,251 1,483,544
Foreign exchange (3,177) -
Cash and cash equivalents at end of period 1,029,944 1,069,770
Notes to the financial statements for the 6 months ended 31 december 2022
1. General Information
The condensed consolidated interim financial statements of Critical Metals plc
(the "Company") and its subsidiary (together the "Group") for the six-month
period ended 31 December 2022 have been prepared in accordance with Accounting
Standard IAS 34 Interim Financial Reporting.
The interim report does not include all the notes of the type normally
included in an annual financial report. Accordingly, this report is to be read
in conjunction with the annual report for the year ended 30 June 2022, which
was prepared in accordance with UK adopted International Accounting Standards
(IFRS) and the Companies Act 2006, and any public announcements made by
Critical Metals plc during the interim reporting period and since.
These condensed consolidated interim financial statements do not constitute
statutory accounts as defined in Section 434 of the Companies Act 2006. The
Group's statutory financial statements for the year ended 30 June 2022
prepared under IFRS have been filed with the Registrar of Companies. The
auditor's report on those financial statements was unqualified and did not
contain a statement under Section 498(2) of the Companies Act 2006. These
condensed interim financial statements have not been audited.
Basis of preparation - going concern
The interim consolidated financial statements have been prepared under the
going concern assumption, which presumes that the Group will be able to meet
its obligations as they fall due for the foreseeable future.
At 31 December 2022 the Group had cash reserves of £1,029,945 (30 June 2022:
£848,772).
The Directors have made an assessment of the Group's ability to continue as a
going concern and are satisfied that the Group has adequate resources to
continue in operational existence for the foreseeable future. The Group,
therefore, continues to adopt the going concern basis in preparing its
consolidated financial statements.
The financial information of the Group is presented in British Pounds Sterling
(£).
Accounting policies
IAS 8 requires that management shall use its judgement in developing and
applying accounting policies that result in information which is relevant to
the economic decision-making needs of users, which are reliable, free from
bias, prudent, complete and represent faithfully the financial position,
financial performance and cash flows of the entity.
The accounting policies adopted are consistent with those of the previous
financial year and corresponding interim reporting period.
Critical accounting estimates and judgements
The preparation of interim consolidated financial information requires
management to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets and
liabilities and the reported amounts of income and expenses during the
reporting period. Although these estimates are based on management's best
knowledge of current events and actions, the resulting accounting estimates
will, by definition, seldom equal related actual results.
In preparing the interim financial information, the significant judgements
made by management in applying the Group's accounting policies and the key
sources of estimation uncertainty were the same as those that applied to the
financial statements for the year ended 30 June 2022.
1.1. New and amended standards adopted by the Group.
A number of new or amended standards became applicable for the current
reporting period. These new/amended standards do not have a material impact on
the Group, and the Group did not have to change its accounting policies or
make retrospective adjustments as a result of adopting these standards.
The Group is not affected materially by the effects of seasonality. Regardless
of this fact comparative figures to the period ending 31 December 2021 have
been included for comparability and increase the comprehensibility of the
financial statements.
The directors have concluded that there are no key assumptions concerning the
future and other key sources of estimation uncertainty at the reporting date
that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year.
2. Segmental analysis
The Group manages its operations in one segment, being seeking a suitable
investment. The results of this segment are regularly reviewed by the board as
a basis for the allocation of resources, in conjunction with individual
investment appraisals, and to assess its performance.
3. EARNINGS per share
The calculation of the basic and diluted earnings per share is calculated by
dividing the profit or loss for the year by the weighted average number of
ordinary shares in issue during the year
6 months to 31 December 2022 6 months to 31 December 2021
Loss for the year from continuing operations - £ (1,174,402) (284,554)
Weighted number of ordinary shares in issue 44,048,094 41,659,735
Basic earnings per share from continuing operations - pence (0.03) (0.68)
There is no difference between the diluted loss per share and the basic loss
per share presented. Share options and warrants could potentially dilute basic
earnings per share in the future but were not included in the calculation of
diluted earnings per share as they are anti-dilutive for the year presented.
At period end 9,240,714 warrants were in issue giving the rights to purchase
shares on a 1:1 basis.
4. Share capital and share premium
Number of Shares on Issue Share Capital £ Share Premium £ Total
£
Balance at 1 July 2021 41,659,735 208,298 1,735,315 1,943,613
Balance at 30 June 2022 41,659,735 208,298 1,735,315 1,943,613
Balance at 1 July 2022 41,659,735 208,298 1,735,315 1,943,613
RTO shares issued at £0.20 9,000,000 45,000 1,755,000 1,800,000
£0.10 warrants exercised 3,150,000 15,750 299,250 315,000
Adviser shares issued 37,500 188 7,313 7,500
Placement at £0.25 5,200,000 26,000 1,274,000 1,300,000
Cost of share issues - - (81,293) -
Balance at 31 December 2022 59,047,235 295,236 4,989,582 5,453,701
The Company has only one class of share. All ordinary shares have equal voting
rights and rank pari passu for the distribution of dividends and repayment of
capital.
5. SBP RESERVE
As at 31 December As at 30 June
2022 £ 2022 £
Opening balance 45,838 45,838
Broker & advisory placing warrants Issued ( ) - -
At 31 December 2022 45,838 45,838
There were no new options or warrants issued in the period and hence no value
attributed to the share bases payments reserve (30 June 2022: £45,838) as
reflected above and the amount of outstanding warrants remains as per the end
of the last period.
6. Acqusition of subsidiary
On 12 September 2022 the Company completed the acquisition of 57% of the share
capital of Madini Occidental Limited and its subsidiaries, ("MO"). At the
same time the Company completed the placing of 9 million shares which were
issued at 20 pence per share raising £1.8m million for the Company before
costs and was successfully readmitted to trading on the London Stock Exchange.
The Company acquired its 57% interest MO, which holds an indirect 70 per cent.
interest in the Molulu Project for a total consideration of US$750,000 less
approximately US$129,000 and EUR 33,400, being costs of the target group paid
by the Company prior to Admission.
The initial estimate of the fair value of the assets acquired and liabilities
assumed of MO at the date of acquisition based upon the MO balance sheet at 12
September 2022 are as follows:
USD$
Trade and other receivables 4,056
Cash and cash equivalents 5,545
Trade and other payables (1,218,594)
Loans and other borrowings (1,014,595)
Provisions (106,452)
Total identifiable net assets acquired (2,330,040)
Consideration
- US$750,000 total consideration* 750,000
Total consideration 750,000
Exploration and evaluation assets acquired 3,080,040
Exploration and evaluation assets relate to the accumulated "know how" and
expertise of the business and its staff. None of the exploration and
evaluation assets are expected to be deducted for income tax purposes.
As the acquisition is likely to be treated as a reverse acquisition it will
fall outside the scope of IFRS 3. The Company has 12 months from the date of
acquisition to finalise the accounting treatment in relation to the
acquisition and therefore is incomplete as at the date of these financial
statements given the short period of time since the acquisition was completed.
*$750,000 USD was pledged as a committed spend for the project and did not
involve a payment for the 57% of outstanding share capital of Madini
Occidental.
7. Events subsequent to PERIOD end
Acquisition of Madini Occidental Limited
On 15(th) December it was announced that the Company had offered to purchase
an additional 21.5% of its partially owned subsidiary, Madini Occidental (MO),
and would increase the ownership of MO from 57% to 78.5%. The shares in MO are
being acquired from the Company's Chairman and Chief Executive Officer,
Russell Fryer. The consideration for the Share Acquisition is £450,000 in
cash paid on completion and a further £200,000 on or before 1 October 2023,
to be paid in Critical Metals PLC shares at a price equal to the 10 day volume
weighted average or cash, at the Company's election.
Subsequent to the announcement made on 15(th) December the Company offered to
purchase the balance of 21.5% in MO held by Madini Minerals Ltd, a company
controlled by Russell Fryer. The consideration for the Share Acquisition is
£450,000 paid in cash on completion with a further payment of £200,000 on or
before 1 October 2023, to be paid in Critical Metals PLC shares at a price
equal to the 10-day volume weighted average or cash, at the Company's
election. The Share Acquisition received the approval of the MO board on 19
December 2022 and the transaction was completed subsequent to 31 December
2022.
Exercise of Warrants and Warrant Term Extension
A total of 865,000 Warrant Shares have been exercised resulting in total gross
proceeds to the Company of £83,250.
In addition, due to the recent passing of a warrant holder and upon receiving
a request from the Estate of the deceased, the Company announces its intention
to extend the exercise period of a total of 5,225,714 warrants, which are
exercisable on or before the 31 March 2023: (i) 1,740,000 warrants exercisable
at 10 pence per share ("10p Warrants"); and (ii) 3,485,714 warrants
exercisable at 5 pence per share ("5p Warrants") (together the "IPO
Warrants"). These IPO Warrants were granted at the time of the admission of
the Company's Ordinary Shares to the standard segment of the Official List and
to trading on the main market for listed securities of the London Stock
Exchange plc on 29 September 2020.
Receipt of share issue proceeds
Subsequent to period end the company received £761,485 with respect to the
£1,300,000 placement from December 23.
About Critical Metals
Critical Metals PLC has acquired a controlling 100% stake in Madini Occidental
Limited, which holds an indirect 70% interest in the Molulu copper/cobalt
project, an ex-producing medium-scale asset in the Katangan Copperbelt in the
Democratic Republic of Congo. In line with its investment strategy of focusing
primarily on known deposits, targeting projects with low entry costs and the
potential to generate short-term cash flow; the Company intends to produce
120,000t/per annum of Copper Oxide Ore.
The Company will continue to identify future assets that are in line with its
stated acquisition objective of low CAPEX and OPEX projects with near-term
production, concentrating on minerals that are perceived to have strategic
importance to future economic growth and generate significant value for
shareholders.
A copy of these results will be made available on the Company's website at
www.critical metals.co.uk.
**ENDS**
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