REG - Caerus Mineral Res. - Annual Report and Financial Statements

Critical Mineral ResourcesAnnouncement

12/07/2023 07:00

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RNS Number : 7051F  Caerus Mineral Resources PLC  12 July 2023

12 July 2023

 

Caerus Mineral Resources PLC

('Caerus' or the 'Company')

Annual Report and Financial Statements for the Year Ended 31 December 2022

Caerus Mineral Resources plc (LON:CMRS), the exploration and resource
development company focused on developing mineral resources to support the
global drive for 'Clean Energy' is pleased to announce its audited Report and
Accounts for the year ended 31 December 2022. The Company intends to hold a
General Meeting in the near future to approve the Report and Accounts.

The Report and Accounts are now available on the website at
http://www.caerusmineralresources.com/
(http://www.caerusmineralresources.com/) and a copy will also shortly be made
available on the FCA's National Storage Mechanism ('NSM') in electronic
format, as required under DTR obligations. The Chairman's report is provided
below.

The Company has applied to the FCA for restoration of its listing and will
issue another RNS once restoration has been approved.

Chairman's Report

2022 was a tumultuous year for Caerus Mineral Resources ('CMR'). The
composition of the Board changed significantly, the Company agreed to divest
its portfolio of assets, new corporate governance structures and protocols
were implemented, and, critically, the Company's strategy was refined.

Following my appointment in May, my primary objective was to ensure that
shareholder value was being created. It quickly became apparent that the
Company's portfolio of assets faced significant challenges. Accordingly, we
initiated an operational and strategic review of the business.

The Company had previously reported positive operational developments
regarding the Troulli and Kalavasos assets. However, it was soon clear that
these projects faced fundamental and likely unresolvable challenges. The
Troulli project, whilst offering good long-term potential, was destined to
require extensive capital expenditure and significant management time, which
outweighed the potential upside the asset provided. Following a thorough
review, it was decided that Troulli was unlikely to be large enough to be
sufficiently economically attractive.

The Company's previous management believed there was significant scope to
build a copper resource in the Kalavasos Project, where the Company held four
licences. These licenses required approvals from the Cyprus Ministry of
Defence (the 'MOD') to develop the assets, approvals the former management
believed would be granted. At the request of the new Board, meetings with
the Cypriot Mines Service Department were conducted over the summer of 2022,
during which it became apparent the approvals would not be forthcoming as the
MOD required the land for long-term purposes.

Further headwinds were experienced as the new management evaluated the
governance structures and specific contracts relating to the Company's joint
Cypriot venture with Bezant Resources Plc. The Company also reviewed the
structure of its arrangement with BMG Resources Limited, a minority
shareholder in CMR's subsidiary company TDL. TDL was responsible for
maintaining and progressing several Cypriot projects. Evidently, the structure
of those agreements, as signed, did not uphold shareholders' best interests
and further justified the need for action regarding the Company's Cypriot
strategy and assets.

 

The immediate outcome of these investigations was twofold. Firstly, the
Company decided to make a strategic change of focus away from its Cyprus
assets. This resulted in agreeing to the disposal of the assets in September,
with the Company maintaining exposure to potential upside from the development
of the Troulli project. Secondly, CMR enhanced its corporate governance and
implemented new structures to ensure the Company always operates to high
standards with all stakeholders. Reflecting this, and following CMR's
investigation into certain actions and commercial decisions made by the
previous management, the Company achieved settlement terms with former
directors. The outcome of this was the return of most of their CMR shares to
the Company for no consideration and the termination of their warrants.

 

When CMR took ownership with the gifting of the former director's shares,
their market value was approximately £600,000. However, IFRS accounting rules
do not appear to have conceived of this scenario, so we cannot report a profit
on these shares. Similarly, the warrant cancellations, under IFRS 2, must be
initially fully recognised in the current year P&L as a charge and,
despite being cancelled, cannot be reversed in the current year. The total
charge of £167,485, in relation to cancelled warrants, was recycled through
the profit and loss reserve account and is shown in the 'Statement of Changes
In Equity'. The warrant cancellation also has the advantage of reducing the
shareholder's dilution.

 

Corporate governance has been further enhanced with the recent appointment of
Adrian England as our Non-Executive Independent Director and new legal
advisors.

 

Outlook

The Board believes considerable shareholder value can be delivered if the
Company remains focused on its strategy of taking opportunities arising from
and aligned to supporting the European electric vehicle supply chain and its
compliance with increasing global legislation.

 

CMR is committed to supplying the clean energy sector and will look to
maximise opportunities created through the Company's alliance with EV Metals
Group plc ('EVM'). However, in addition to the EVM alliance, the board is able
to draw on its significant experience within the mining sector and the
management's extensive network and deep understanding of the industry's
dynamics. Accordingly, alongside opportunities that emerge from the EVM
alliance, the board has been evaluating opportunities from its own network
that fit its strategy. As the market recognises the long-term production
deficit for commodities required to supply the EV transition, not all vendor
valuation expectations meet CMR's high hurdle of delivering long-term
sustainable value. We continue to ensure rigorous financial discipline when
evaluating opportunities, and several opportunities in recent months have not
progressed. However, in the first six months of the year, the Company has
built several new and exciting relationships with owners of high-quality
upstream and midstream assets where discussions regarding partnership and
investment are ongoing.

 

In recent weeks, CMR has decided to enter Morocco, which stands out as an
extremely attractive jurisdiction for upstream and potentially midstream
battery materials projects. With deposits of copper, manganese, nickel and
potentially other clean technology metals and minerals, Morocco has proven
well-mineralised geology yet is largely under-explored. Morocco's main trading
partner is the European Union, and its modern infrastructure, proximity to
Europe and political stability make it an excellent country for CMR to operate
in. For a modest sum, CMR has agreed to acquire 80% of a local Moroccan
exploration company, led by a highly regarded geologist with extensive
knowledge of the region. This will enable CMR to enter into strategic upstream
joint ventures in addition to creating its own portfolio of 100% owned
projects. I look forward to updating you as our Moroccan portfolio and
partnerships progress.

 

In December, we announced the payment of a deposit of £500,000 to secure the
exclusivity of RIWAQ and its portfolio of 146 exploration licences in Saudi
Arabia. In May, we completed our review of the RIWAQ portfolio and took the
difficult decision not to pursue the opportunity. This was due to several
factors, including the early stage of the projects and the very large size of
the portfolio, which our Board decided would be too large a drain on CMR's
resources. This deposit was received back post the year end. The Company is
not currently planning to draw down on the existing CLN facility which is in
place with EVM.

 

I want to thank the Department of International Trade ('DIT') for its help in
the U.K. and overseas territories, where we continue to evaluate
opportunities. Our success will enable the U.K. market to benefit from the
essential commodities we can deliver for the security of a critical supply
chain.

 

2022 was a year of turmoil, though significant progress was made to stabilise
the Company and ensure governance failings are not repeated. Beyond the Board
and I would like to thank the FCA for assisting us in steering our way through
a very difficult path for the Company. I am pleased to report all these issues
are behind us now. The Company is now focused on developing excellent
opportunities aligned with its clear strategy. Importantly, we are making
meaningful progress. I look forward to providing our investors with updates
over the next six months that return the Company to growth and value creation
for all stakeholders.

 

 

 

For further information, please contact:

 Caerus Mineral Resources plc             info@caerusmineralresources.com (mailto:info@caerusmineralresources.com)

 Chris Lambert, Executive Chairman        via Hudson Sandler +44 (0) 207 796 4133

 Charles Long, Chief Executive Officer
 Novum Securities                         +44 (0) 20 7399 9425

 Jon Belliss
 Hudson Sandler (Financial PR)            +44 (0) 207 796 4133

 Charlie Jack

 

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