REG - Critical Metals PLC - Interim Results
28/03/2024 07:15
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RNS Number : 6087I Critical Metals PLC 28 March 2024
Critical
Metals plc / EPIC: CRTM / Market: Main Market
28th March 2024
Critical Metals plc
("Critical Metals" or the "Company")
Interim Results
Critical Metals plc ("Critical Metals" or the Company"), 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 December 2023.
Highlights
· Ongoing development of the Group's Molulu project;
· Exercise of 2,814,286 warrants for proceeds of £195,714;
· Further development of the Molulu elementary school;
· First delivery of ore to O.M. Metals;
· Application for US Government funding submitted;
· Preparation for OTCQB listing in the US; and
· Post period, the Company announced the appointment of Mr Gordon
Thompson as Non-Executive Director and Chair of the Technical committee.
Russell Fryer, CEO of Critical Metals said:
"In the six months to December 2023 there were several key milestones reached,
perhaps the most rewarding within the period was the progress made with the
community, where we were able to work together to provide Molulu's children
with their first primary school.
"Operationally, we continued to advance Phase 1 of the drilling campaign
achieving some exceptional copper grades from the first hole of the campaign.
There is no doubt in my mind about the potential of the Molulu project and the
demand for its product, evidence by the interest we received from potential
off-take partners during the period, and the subsequent signing of the
off-take agreement with OM Metal & Resources S.A.R.L.
"While we faced unforeseen challenges in the latter part of the year, we
remain steadfast in our belief in the potential of the Molulu Project and
despite experiencing setbacks we are resolute in our commitment to delivering
value to our stakeholders going forward."
Chairman's Statement
I am pleased to present interim results for the six-month period ending
December 2023. During the period our focus remained steadfast on advancing and
identifying key investment opportunities in Africa. As our first investment, I
am proud to highlight the continued progress made at the Molulu copper and
cobalt project, in the Democratic Republic of the Congo ("DRC"), our first
investment.
Our diamond drilling ("DD") campaign at Molulu has advanced with Phase 1 of
the programme focussing on the three areas identified by mapping and
geophysics analysis completed earlier in the year, and consisting of an
initial 1,000 meters of drilling across the oxide zone. This drilling is aimed
at increasing the geological understanding of the Molulu Project, and
generating additional potential targets, and targeting the delineation of a
JORC Mineral Resource Estimate for copper-cobalt mineralisation in the area.
In December, core from the partial Phase 1 drilling programme were analysed
using a handheld XRF unit. Out of twenty-four holes drilled, eighteen holes
had copper mineralisation. We are excited about the results to date and will
be looking to complete the remaining 1000 meters of the programme as soon as
possible.
During the reporting period we stockpiled copper oxide onsite, attracting
several off-take buyers with whom the Company met. Consequently, and after a
series of negotiations in September 2023, the Company signed an offtake
agreement with O.M. Metals S.A.R.L. ("O.M. Metals") to purchase the copper ore
from Molulu. The offtake agreement was aimed at providing the Company with
short-term cashflow for the continued improvement of infrastructure, further
exploration activities, and optimise ground operations. One of the conditions
of our offtake agreement with O.M. Metals was the use of 40-tonne trucks and
after a brief submission period, the necessary permissions to deliver ore were
granted.
In November, when copper ore deliveries began, three trucks filled with copper
ore were delivered to O.M. Metals. However, the road leading from Molulu to
the O.M. Metals processing plant proved to be unsuitable for heavy equipment.
Both parties agreed that the road from Molulu to the Mabende village needed to
be improved to an all-weather road in order to handle the increased volume of
traffic from both the Molulu mine and several local villages.
Despite the temporary delay in ore delivery impacting cash generation, the
substantial progress made on road and infrastructure development during this
period promises enduring benefits for our company and the surrounding
community, ensuring accessibility and fostering long-term prosperity for all
stakeholders.
October was a transformative social-licence month for your Company as the
Molulu team, with the help of villagers, made bricks from ant hill dirt,
created a mud-covered fire kiln to dry and harden the bricks, and finally
built a school with two classrooms to provide the first elementary and middle
school education for the village children. The school has over fifty students
in attendance that are taught by two qualified teachers funded by Critical
Metals. Since assuming control of Molulu, the Company has prioritized
community engagement and sustainability development initiations. Critical
Metals remains committed to expanding local educational opportunities and
where possible will continue to employ local staff. More than 90% of our
workforce at the Molulu project are DRC natives.
In early November, two representatives from Washington DC visited the Molulu
project to conduct due diligence in preparation of the submission of several
funding applications to the USA Government. The USA Government has publicly
committed to helping grow the exposure of Western companies in the DRC and
your Company plans on pursuing the support of various Western governments.
Grant funding applications with the USA Government sponsored agencies the
Development Finance Corporation (DFC) and USAid were lodged while other
financing applications by way of USA Government bank loans were prepared for
submission post calendar year end.
To increase the shareholder base and introduce the Critical Metals investment
thesis to new investors, an application to list on the OTCQB in the USA was
submitted. We hope to be able to update shareholders on the progress of the
listing in due course.
Funding for small capitalisation mining companies is often a challenge and the
markets unmerciful towards capital raises. Your Company raised a small amount
of capital at the year-end that confused the market. This capital raise was
supposed to be a larger capital raise and completed before the end of
December. Several of the participants wanted the capital raise closed as they
have a positive viewpoint on both the Company and price of copper, and the
small closing was completed soon after the New Year.
Activities at Molulu and in the DRC in general slowed in December as the
Presidential election date of 20 December 2023 came near. Feverish election
anticipation was spread throughout the country as opposition candidates
positioned themselves for an alternative to the incumbent President. The
election was completed without mass public rioting or protests, and post year
end, the incumbent President was sworn in on 19 January 2024, again, without
any mass protests or voter rioting. The DRC proved to the world that peaceful
elections and the democratic process is alive and thriving in the country.
The latter part of 2023 was a challenging period for Critical Metals, and I
would like to thank fellow board members Anthony Eastman (who stepped down
from the board post period) and Marcus Edwards-Jones for their continued
support and guidance.
We will welcome Gordon Thompson to the Board on April 1st, 2024, post
period. Gordon is a highly experienced DRC mining and processing expert. He
will add incredible expertise to the upgrading of the oxide and sulphide ore
at Molulu, along ideas pertaining to any future processing plant transaction.
In conclusion, we remain optimistic about the future, fortified by the
resilience displayed during challenging times, both during and post period. We
are positive that the Board's proactive approach to addressing potential
disruptions and unwavering commitment to the company's growth strategy will
deliver shareholder value in the long term.
Finally, I would like to thank our shareholders who have remained with
supportive throughout this recent complex period and look forward to a very
successful 2024.
Russell S. Fryer
Executive Chairman & CEO (Chief Executive Officer)
28 March 2024
*** Ends ***
For further information on the Company please visit www.criticalmetals.co.uk
(http://www.criticalmetals.co.uk/) or contact:
Critical Metals plc Tel: +44 (0)20 7236 1177
Russell Fryer, CEO
St Brides Partners Ltd Tel: +44 (0)20 7236 1177
Ana Ribeiro/ Isabelle Morris
Financial PR
Consolidated statement of Comprehensive Income for the six months ended 31
December 2023
Notes 6 months to 31 December 2023 (unaudited) 6 months to 31 December 2022 (unaudited)
£ £
Continuing operations
Revenue from continuing operations - -
Cost of sales - -
Gross Profit - -
Other expenses (922,373) (1,295,130)
Exploration expenditure (148,240) -
Earnings before interest, taxation, depreciation and amortisation (1,070,613) (1,295,130)
Depreciation (26,444) (7,171)
Interest expenditure (40,166) (16,730)
Loss before taxation (1,137,223) (1,319,031)
Income tax -
Profit (Loss) for the year from continuing operations attributable to the (1,137,223) (1,319,031)
owners of the company
Attributable to:
Owners of the company (1,015,736) (1,052,702)
Non-controlling interest (121,737) (266,329)
(1,137,473 (1,319,031)
Other comprehensive income
Translation of foreign operations 16,370 82,303
Valuation (losses)/gains on fair value through other comprehensive income - (121,700)
equity investments
Total other comprehensive profit (loss) 16,370 (39,397)
Total comprehensive profit (loss) for the year (1,121,103) (1,358,428)
Total comprehensive profit (loss) attributable to:
Owners of the company (999,366) (1,092,099)
Non-controlling interest (121,737) (266,329)
(1,121,103) (1,358,428)
Earnings per share (basic and diluted) attributable to the equity holders 3 (1.59) (2.67)
(pence)
The consolidated statement of comprehensive income has been prepared on the
basis that all operations are continuing operations.
Consolidated statement of Financial Position for the six months ended 31
December 2023
Notes 31 December 2023 (unaudited) 30 June 2023 (audited)
£ £
Non-current assets
Property, plant & equipment 4,211,242 4,007,454
Total non-current assets 4,211,242 4,007,454
Current assets
Trade and other receivables 140,827 266,272
Cash at bank and in hand 66,261 411,696
Total current assets 207,088 677,968
Total assets 4,418,330 4,685,422
Current liabilities
Trade and other payables 2,169,025 1,528,340
Borrowings 823,342 805,729
Total liabilities 2,992,367 2,334,069
Net assets 1,425,963 2,351,353
Equity
Called up share capital 4 325,632 311,561
Share premium account 4 5,788,560 5,606,918
Share based payment reserve 271,260 271,260
Foreign exchange reserve 59,860 43,490
Retained earnings (4,682,564) (3,666,828)
Equity attributable to equity holders of the parent 1,762,748 2,566,401
Non-controlling interest (336,785) (215,048)
Total Equity 1,425,963 2,351,353
Consolidated statement of Changes in Equity for the six months ended 31
December 2023
Issued Share Capital Share Premium SBP Reserve FCTR Retained Earnings NCI Total Equity
£ £ £ £ £ £ £
As at 30 June 2022 208,298 1,735,315 45,838 - (1,180,854) - 808,597
Loss for the year - - - - (2,485,974) (214,252) (2,700,226)
Other comprehensive income - - - 43,490 - - 43,490
Total comprehensive loss for the year - - - 43,490 (2,485,974) (214,252) (2,656,736)
Acquisition of subsidiary - - - - - (796) (796)
Shares issued during the year 83,188 3,624,313 - - - - 3,707,501
Share issue costs during the year - (130,885) - - - - (130,885)
Warrants issued during the year 20,075 378,175 225,422 - - - 623,672
Total transactions with owners 103,263 3,871,603 225,422 - - (796) 4,199,492
As at 30 June 2023 311,561 5,606,918 271,260 43,490 (3,666,828) (215,048) 2,351,353
Issued Share Capital Share Premium SBP Reserve FCTR Retained Earnings NCI Total Equity
£ £ £ £ £ £ £
Loss for the period - - - (1,015,736) (121,737) (1,137,473)
Other comprehensive income - - - 16,370 - - 16,370
Total comprehensive loss for the period - - - 16,370 (1,015,736) (121,737) (1,121,103)
Shares issued during the period - - - - - -
Share issue costs during the period - - - - - -
Warrants issued during the period 14,071 181,642 - - - - 195,713
Total transactions with owners 14,071 181,642 - - - - 195,713
As at 31 December 2023 325,632 5,788,560 271,260 59,860 (4,682,564) (336,785) 1,425,963
Consolidated statement of Cashflows for the 6 months period ended 31 December
2023
31 December 2023 (unaudited) 31 December 2022 (unaudited)
£ £
Cash from operating activities
Loss for the Period (1,137,473) (1,440,731)
Adjustments for:
Depreciation 26,444 7,171
Unrealised gains on sale on listed investments - 121,700
Realised gains on sale of listed investments - (14,495)
Interest payable 40,166 16,730
Foreign exchange 26,147 (16,812)
Operating cashflow before working capital movements (1,044,716) (1,326,437)
Increase in trade and other receivables (48,427) (42,425)
Increase / (Decrease) increase in trade and other payables 636,876 (289,797)
Net cash used in operating activities (456,267) (1,658,659)
Cash from financing activities
Net Proceeds on the issue of shares 369,369 2,541,205
Net cash from financing activities 369,369 2,541,205
Cash from investing activities
Payments for development asset (262,614) -
Purchase of tangible fixed assets (1,879) (190,197)
Acquisition of subsidiary net of cash - 24,521
Purchases of OCI listed financial assets - (508,000)
Net cash used in investing activities (264,493) (673,676)
Net (decrease) / increase in cash and cash equivalents (351,393) 208,870
Cash and cash equivalents at beginning of year 411,696 824,251
Foreign exchange 5,956 (3,177)
Cash and cash equivalents at end of period 66,261 1,029,944
Notes to the financial statements for the 6 months ended 31 december 2023
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 2023 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 2023, 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 2023
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 2023 the Group had cash reserves of £66,261 (30 June 2023:
£411,696).
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 2023.
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 2022 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 has two reportable segments, Exploration and Corporate, which are
the Group's strategic divisions. For each of the strategic divisions, the
Board reviews internal management reports on a regular basis.
The Group's reportable segments are:
Exploration: the exploration operating segment is presented as an aggregate of
all the DRC related activity and the associated Mauritian holding companies..
Corporate: the corporate segment is the UK head company and the costs in
respect of managing the Group. This includes the cost of director share
options granted by the Company.
The Group generated no external revenue during the period ended 31 December
2023 (2022:£nil).
Segmental results are detailed below:
Exploration Corporate Total
£ £ £
Operating profit / (loss) from continued operations per reportable segment (1,128,729) 7,627 (1,121,103)
Reportable segment assets 4,288,562 129,768 4,418,330
Reportable segment liabilities (2,242,571) (749,796) (2,992,367)
Net assets 2,045,991 (620,028) 1,425,963
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 2023 6 months to 31 December 2022
Loss for the year from continuing operations for the owners of the Company - (1,015,736) (1,174,402)
£
Weighted number of ordinary shares in issue 64,019,261 44,048,094
Basic earnings per share from continuing operations - pence (1.59) (2.67)
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 18,884,628 (2022: 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 30 June 2022 41,659,735 208,298 1,735,315 1,943,613
Shares issued at re-listing 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 7,501
Placement at £0.25 5,200,000 26,000 1,274,000 1,300,000
£0.05 Warrants Exercised 15,000 75 675 750
£0.10 Warrants Exercised 600,000 3,000 57,000 60,000
£0.10 Warrants Exercised 200,000 1,000 19,000 20,000
£0.05 Warrants Exercised 50,000 250 2,250 2,500
Fundraise - £0.6m @ £0.25 2,400,000 12,000 588,000 600,000
Cost of share issues - - (130,885) (130,885)
Balance at 30 June 2023 62,312,235 311,561 5,606,918 5,918,479
Exercise of 10p warrants 1,100,000 5,500 14,500 110,000
Exercise of 5p warrants 1,714,286 8,571 77,142 85,713
Balance as at 31 December 2023 65,126,521 325,632 5,698,560 6,114,192
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. Events subsequent to PERIOD end
On 8(th) January 2024 the Company raised £215,000 (gross of fees) at an
issue price of 9.5 pence per Ordinary Share by the issue of 2,263,159 Ordinary
Shares.
On 11(th) March 2024 it was announced that Mr. Gordon Thompson will be
appointed to the board as Non-Executive Director and Chair of the Technical
committee as of 1 April 2024 to replace Mr Anthony Eastman who will step down
from the board at that time.
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.
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