REG - Empire Metals Ltd - Interim Results
14/09/2022 07:01
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RNS Number : 3249Z Empire Metals Limited 14 September 2022
Empire Metals Ltd / AIM: EEE / Sector: Natural Resources
14 September 2022
Empire Metals Limited ('EEE' or the 'Company')
Interim Results
Empire Metals Ltd ('EEE', the 'Company' or the 'Group'), the AIM-quoted
resource exploration and development company, is pleased to announce its
interim results for the six-month period ended 30 June 2022.
Chairman's Statement
Empire is establishing itself as a leading metals explorer focussed on
Australia, and the activities undertaken during this period have had a
profound impact both on the current profile of the Company, and also our
long-term value prospects. We have successfully grown our exploration
footprint from 3.1km(2) to over 1,728km(2), across four key geologically and
geographically diverse projects. This portfolio expansion will substantially
de-risk our exploration strategy, and also broaden our commodity exposure and
considerably enlarge our global resource inventory potential.
This expansion strategy began in January, with the Tribute Agreement signed
with Maher Mining Contractors Pty Ltd, giving Empire the right to explore,
develop and mine within a granted area on mining lease M27/158, known as the
Gindalbie Project. Importantly, Gindalbie is adjacent to Empire's
established and most advanced asset, the Eclipse Gold Project, and extended
the area for exploration targets a further 2km along the Eclipse lodes trend,
plus 1km to the north and 3km to the south.
However, we had our sights set on a much larger suite of assets, and in April
Empire acquired a 70% interest in three highly prospective Australian-based
copper-gold projects from Century Minerals Pty Ltd. Two of the projects, the
Pitfield Copper-Gold Project and the Walton Copper-Gold Project are in Western
Australia whilst the Stavely Copper-Gold Project lies within the Stavely Arc
region of Victoria.
The acquisition of these assets, which combined, cover an area considerably
larger than Greater London, provides Empire with an exceptional mineralised
footprint within several mining regions well known for world-class and
significant copper and/or gold discoveries.
Our initial focus has been on the Pitfield Project and exploration activities
began in earnest in June. By way of geological background, the Pitfield
Project is hosted by Neoproterozoic rocks coinciding with a globally important
copper mineralisation era known for major copper-gold deposits such as
Newcrest Mining Ltd's Telfer Mine, Rio Tinto's Winu Project and the Havieron
project (a joint venture between Newcrest Mining Ltd and Greatland Gold).
Further evidence of the high prospectivity and productivity of the area can be
seen from the multiple proximal historical copper mines and prospects
including the historical Baxters copper mine at Arrino, which lies along
strike, and produced 106 tonnes of copper at a grade between 20-30% Cu.
Empire's exploration programme at Pitfield was launched with airborne magnetic
and electromagnetic surveys across the Pitfield tenement area. Results from
the airborne magnetic survey were presented to the market post period end, and
reported the identification of a significant structure along the western
boundary of the magnetic anomaly that closely aligns with a surface copper
anomaly stretching over 7km in length, previously identified by CRA (which
became part of Rio Tinto Group) when conducting surface sampling in the early
1990s. As reported in August, this strong magnetic anomaly, which extends
for over 20km, was the source of significant excitement for our exploration
teams, as it indicates potential for a regional scale alteration event
involving hydrothermal magnetite which could be associated with copper
mineralisation that are the source for the prominent copper anomalies at
surface.
Full analysis of the electromagnetic survey is expected shortly and will be
presented to the market as we look to deepen our understanding of the
geological source for the extensive copper anomaly in order to generate high
priority drill targets for our first drilling campaign at Pitfield in the
coming months. Although we are early on in our exploration work at Pitfield,
this asset is already displaying characteristics of a significant copper
mineral system and we believe there is good potential to make a major copper
discovery here.
Similarly, both the Walton and Stavely projects provide Empire with
significant discovery potential and we are co-ordinating our exploration
strategy across these two further projects to ensure we maintain an active
schedule of work across our entire portfolio. We expect work at Walton
and/or Stavely to begin towards the end of this year or early 2023, at which
point we expect to be drilling at Pitfield, and conducting further work at the
Eclipse-Gindalbie Project, building on the work conducted during H1 2022 and
in Q3 2022.
The recent work at Eclipse-Gindalbie has centred on two drilling campaigns,
the first commencing in February, and comprising a round of exploratory
drilling at Eclipse, utilising both reverse circulation ("RC") and diamond
drill holes, designed to gather further geological and structural information
around the Eclipse shaft and Jack's Dream shaft and to prove continuity of the
gold mineralisation below the gold-depleted zone of weathering. In
conjunction with this drilling, Empire also commenced an RC drilling campaign
at Gindalbie, looking to not only extend the mineralised trend a further 2km
to the southeast of Eclipse but also to understand the extent and origin of
what the Company believes to be a much larger gold system.
Our work at Eclipse-Gindalbie started again just before the period end, and
consisted of 26 RC holes, for a total of 3,360m, and focused mainly on
extending the known mineralised trends, along strike and at depth, around some
of the historical gold mines such as Homeward Bound, Bulletin, Eclipse and
Jack's Dream as well as the small pit at Budd's Find.
These drill campaigns delivered some very positive results, with multiple
significant intercepts, which provided further encouragement that the combined
Eclipse-Gindalbie project has the potential to support a significant gold
resource. Our energies now will centre on modelling this geological data
ahead of further field work in Q4 2022.
Financial
For the six-month period ended 30 June 2022 the Group is reporting a pre-tax
loss of £588,808 (six months ended 30 June 2021: pre-tax profit of £682,770
arising as a result of the gain on the sale of the Company's investment in
Georgian Copper & Gold JSC ("GCG") of £1,775,129).
The Group's net cash balance as at 30 June 2022 was £2.4 million and as at
the date of this report is £2.15 million.
Outlook
I look now to the future with a sense of renewed optimism and excitement.
Empire is in many respects in an enviable position compared to many of its
peers, able to deliver meaningful discovery value to shareholders. We now
benefit from both a comfortable cash position and also a portfolio of
high-quality exploration projects, all of which have the potential to deliver
value on a scale that is multiples of the current market capitalisation of the
company.
We have de-risked growth by spreading our geological footprint and implemented
a strategy to bring all of the assets through the exploration process in a
coordinated approach to maximise efficiency and negate periods of relative
inactivity on the ground. As well as providing momentum to operational
activities, this will also generate regular news announcements to keep the
market engaged as to our progress.
It is with this in mind that I look forward to providing updates to
shareholders over the coming months as we systematically execute our
exploration campaigns across our four key project areas. Once again, I would
like to thank our shareholders, both new and long-standing, as we move Empire
into this next, exciting phase of development and look to deliver multiple
successful discoveries from our exceptional portfolio of assets.
Neil O'Brien
Non-Executive Chairman
Market Abuse Regulation (MAR) Disclosure
This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the Company's obligations under Article 17 of
MAR.
**ENDS**
For further information please visit https://www.empiremetals.co.uk or
contact:
Shaun Bunn Empire Metals Ltd Company Tel: 020 7907 9327
Greg Kuenzel Empire Metals Ltd Company Tel: 020 7907 9327
Ewan Leggat S. P. Angel Corporate Finance LLP Nomad & Broker Tel: 020 3470 0470
Adam Cowl S. P. Angel Corporate Finance LLP Nomad & Broker Tel: 020 3470 0470
Damon Heath Shard Capital Partners LLP Joint Broker Tel: 020 7186 9950
Susie Geliher St Brides Partners Ltd PR Tel: 020 7236 1177
Max Bennett St Brides Partners Ltd PR Tel: 020 7236 1177
About Empire Metals Limited
Empire Metals is an AIM-listed (LON: EEE) exploration and resource development
company with a project portfolio comprising gold and copper interests in
Australia and Austria.
The Company's strategy is to develop a pipeline of projects at different
stages in the development curve. The Company expanded its exploration licence
area in April 2022 from 9.5km2 to 1,728km2 with the acquisition of the
Pitfield Copper-Gold Project and the Walton Copper-Gold Project in Western
Australia, and the Stavely Copper-Gold Project in the Stavely Arc region of
Victoria. The Company also continues resource definition work at its
high-grade Eclipse-Gindalbie Gold Project in Western Australia.
Empire also holds a portfolio of three precious metals projects located in a
historically high-grade gold production region comprising the Rotgulden,
Schonberg and Walchen prospects in central-southern Austria.
The Board continues to evaluate opportunities through which to realise the
value of its wider portfolio and reviews further assets which meet the
Company's investment criteria.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Notes 6 months to 30 June 2022 Unaudited 6 months to 30 June 2021 Unaudited
£ £
Continuing operations
Administration expenses 4 (550,169) (913,009)
Share option expense (54,267) (214,336)
Foreign exchange 38,810 58,579
Operating Loss (565,626) (1,068,766)
Share of profit from joint venture - (23,593)
Other net gains/(losses) 5 (23,182) 1,775,129
Profit/(Loss) Before Interest and Income Tax (588,808) 682,770
Net finance Income 173 -
Corporation tax expense (44,474) (759)
Profit/(Loss) for the period (633,109) 682,011
Profit/(Loss) attributable to:
- owners of the Parent (633,109) 682,011
Profit/(Loss) for the period (633,109) 682,011
Other comprehensive income
Items that may be subsequently reclassified to profit or loss
Currency translation differences 18,485 -
Total comprehensive income (599,067) 682,011
Attributable to:
- owners of the Parent (599,067) 682,011
Total comprehensive income (599,067) 682,011
Earnings/(loss) per share (pence) from continuing operations attributable to 9 (0.170) 0.190
owners of the Parent - Basic and diluted
CONDENSED CONSOLIDATED BALANCE SHEET
Notes 30 June 2022 30 June 2021
Unaudited Unaudited
£ £
Non-Current Assets
Property, plant and equipment - 341
Intangible assets 7 2,814,981 2,034,499
2,814,981 2,034,840
Current Assets
Trade and other receivables 185,673 104,632
Cash and cash equivalents 2,379,338 2,943,807
2,565,011 3,048,439
Total Assets 5,379,992 5,083,279
Current Liabilities
Trade and other payables 131,787 27,220
Income tax payable (3,723) -
Total Liabilities 128,064 27,220
Net Assets 5,251,928 5,056,059
Equity Attributable to owners of the Parent
Share premium account 8 45,523,695 43,836,224
Reverse acquisition reserve (18,845,147) (18,845,147)
Other Reserves 572,820 368,962
Retained losses (21,999,440) (20,303,980)
Total equity attributable to owners of the Parent 5,251,928 5,056,059
Total Equity 5,251,928 5,056,059
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
Share premium Reverse acquisition reserve Other Reserves Retained losses Total equity
£ £ £ £ £
As at 1 January 2021 43,065,981 (18,845,147) 152,793 (20,985,991) 3,387,636
Comprehensive income
Profit/(Loss) for the period - - - 682,011 682,011
Other comprehensive income
Currency translation differences - - 1,833 - 1,833
Total comprehensive income - - 1,833 - 683,844
Issue of ordinary shares 770,243 - - - 770,243
Share option charge - - 214,336 - 214,336
Total transactions with owners 770,243 - 214,336 - 984,579
As at 30 June 2021 43,836,224 (18,845,147) 368,962 (20,303,980) 5,056,059
Share premium Reverse acquisition reserve Other reserves Retained losses Total equity
£ £ £ £ £
As at 1 January 2022 43,836,855 (18,845,147) 520,293 (21,386,556) 4,125,445
Comprehensive income
Profit/(Loss) for the period - - - (633,109) (633,109)
Other comprehensive income
Currency translation differences - - 18,485 - 18,485
Total comprehensive income - - 18,485 (633,109) (599,067)
Issue of ordinary shares 1,686,840 - - - 1,686,840
Share option charge - -
Options granted - - 54,267 54,267
Expired options - - (20,225) 20,225 -
Total transactions with owners 1,686,840 - 34,042 20,225 1,665,347
As at 30 June 2022 45,523,695 (18,845,147) 572,820 (21,999,440) 5,251,928
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
30 June 2022 Unaudited 30 June 2021 Unaudited
£ £
Note
Cash flows from operating activities
Profit/(Loss) before taxation (633,109) 682,011
Adjustments for:
Depreciation 361 1,082
Impairments 23,182 -
Share based payments 54,267 554,197
Gain on sale of investments - (1,775,129)
Net finance costs (173) (1)
Income tax expense 44,474 759
Share of profit on joint venture - 23,593
Increase in trade and other receivables (26,770) (39,990)
Increase/(Decrease) in trade and other payables 26,876 (51,318)
Income tax paid (44,786) -
Net cash used in operations (555,678) (604,796)
Cash flows from investing activities
Loans granted to joint venture partners - (44,647)
Purchase of intangible assets 7 (792,605) (1,271,837)
Sale of investments - 2,327,944
Net cash used in investing activities (792,605) 1,011,460
Cash flows from financing activities
Proceeds from issue of shares 8 1,606,170 118,000
Cost of issue (88,920) -
Net cash from financing activities 1,517,250 118,000
Net (decrease) / increase in cash and cash equivalents 168,967 524,664
Cash and cash equivalents at beginning of period 2,210,371 2,289,637
Exchange differences on cash - 129,506
Cash and cash equivalents at end of period 2,379,338 2,943,807
Major non-cash transactions
5,611,863 ordinary shares were issued at 1.35p as non-cash consideration for
the acquisition of the Pitfield Copper-Gold Project.
NOTES TO THE INTERIM FINANCIAL STATEMENTS
1. General Information
The principal activity of Empire Metals Limited ('the Company') and its
subsidiaries (together 'the Group') is the exploration and development of
precious and base metals. The Company's shares are listed on the AIM Market of
the London Stock Exchange. The Company is incorporated in the British Virgin
Islands and domiciled in the United Kingdom. The Company was incorporated on
10 February 2010 under the name Gold Mining Company Limited. On 10 October
2016 the Company changed its name from Noricum Gold Limited to Georgian Mining
Corporation and subsequently on 10 February 2020 changed its name from
Georgian Mining Corporation to Empire Metals Limited.
The address of the Company's registered office is Trident Chambers, PO Box
146, Road Town, Tortola BVI.
2. Basis of Preparation
The condensed consolidated interim financial statements have been prepared in
accordance with the requirements of the AIM Rules for Companies. As permitted,
the Company has chosen not to adopt IAS 34 "Interim Financial Statements" in
preparing this interim financial information. The condensed interim financial
statements should be read in conjunction with the annual financial statements
for the year ended 31 December 2021, which have been prepared in accordance
with International Financial Reporting Standards (IFRS) as adopted by the
European Union.
The interim financial information set out above does not constitute statutory
accounts. They have been prepared on a going concern basis in accordance
with the recognition and measurement criteria of International Financial
Reporting Standards (IFRS) as adopted by the European Union. Statutory
financial statements for the year ended 31 December 2021 were approved by the
Board of Directors on 16 April 2021. The report of the auditors on those
financial statements was unqualified but included a material uncertainty
relating to going concern paragraph.
Going concern
The Directors, having made appropriate enquiries, consider that adequate
resources exist for the Group to continue in operational existence for the
foreseeable future and that, therefore, it is appropriate to adopt the going
concern basis in preparing the condensed interim financial statements for the
period ended 30 June 2022.
The factors that were extant at the 31 December 2021 are still relevant to
this report and as such reference should be made to the going concern note and
disclosures in the 2021 Annual Report.
Risks and uncertainties
The Board continuously assesses and monitors the key risks of the business.
The key risks that could affect the Group's medium-term performance and the
factors that mitigate those risks have not substantially changed from those
set out in the Group's 2021 Annual Report and Financial Statements, a copy of
which is available on the Group's website: https://www.empiremetals.co.uk. The
key financial risks are liquidity risk, foreign exchange risk, credit risk,
price risk and interest rate risk.
Critical accounting estimates
The preparation of condensed interim financial statements requires management
to make estimates and assumptions that affect the reported amounts of assets
and liabilities, income and expenses, and disclosure of contingent assets and
liabilities at the end of the reporting period. Significant items subject to
such estimates are set out in note 4 of the Group's 2021 Annual Report and
Financial Statements. Actual amounts may differ from these estimates. The
nature and amounts of such estimates have not changed significantly during the
interim period.
3. Accounting Policies
The same accounting policies, presentation and methods of computation have
been followed in these condensed interim financial statements as were applied
in the preparation of the Group's annual financial statements for the year
ended 31 December 2021 except for the impact of the adoption of the Standards
and interpretations described below and new accounting policies adopted as a
result of changes in the Group.
3.1 Changes in accounting policy and disclosures
(a) New and amended standards mandatory for the first time for the financial
periods beginning on or after 1 January 2022
The International Accounting Standards Board (IASB) issued various amendments
and revisions to International Financial Reporting Standards and IFRIC
interpretations. The amendments and revisions were applicable for the period
ended 30 June 2022 but did not result in any material changes to the Financial
Statements of the Group.
b) New standards, amendments and interpretations in issue but not yet
effective or not yet endorsed and not early adopted
Standards, amendments and interpretations that are not yet effective and have
not been early adopted are as follows:
Standard Impact on initial application Effective date
IAS 1 (Amendments) Classification of Liabilities as Current or Non-Current *1 January 2023
IAS 1 and IFRS Practice Statement 2 (Amendments) Disclosure of Accounting Policies 1 January 2023
IAS 8 (Amendments) Accounting estimates 1 January 2023
* Subject to endorsement
The Group is evaluating the impact of the new and amended standards
above which are not expected to have a material impact on future Group
Financial Statements.
4. Administrative expenses
30 June 30 June
2022 2021
£ £
Office expenses 24,111 27,797
Insurance 18,342 21,765
IT & software services 10,817 11,801
Directors, Employees & Contractors 226,090 105,444
Professional advisors 206,030 383,794
Travel & accommodation 42,015 4,301
Depreciation & amortisation 361 1,082
Finders fees - 339,861
Other admin expenses 22,403 17,165
550,169 913,009
5. Other (losses)/gains - Net
30 June 2022 30 June 2021
£ £
Profit on sale of property, plant and equipment - 1,775,129
Impairments of financial assets (23,182)
(23,182) 1,775,129
6. Dividends
No dividend has been declared or paid by the Company during the six months
ended 30 June 2022 (2021: nil).
7. Intangible Assets
Exploration & Evaluation Assets at Cost and Net Book Value 30 June 2022 30 June 2021
£ £
Balance as at 1 January 1,952,419 31,673
Additions 856,076 2,002,826
Foreign currency differences 6,486 -
As at 30 June 2,814,981 2,034,499
The Exploration & Evaluation additions in the current period relates to
work performed at the Company's Eclipse and Gindalbie licence areas as well as
the newly acquired Pitfield project. At Gindalbie, the Company entered into a
Tribute Agreement that gives Empire the exclusive right to explore, develop
and mine within a granted area. The latest drilling program provided multiple
significant gold intercepts which will require further analysis and structural
interpretation, and should greatly assist Empire's technical team in building
a more robust structural model for the overall project area.
The Company acquired a 70% interest in three projects, Pitfield, Stavely and
Walton, from Century Minerals Pty Ltd. The consideration for the projects will
be satisfied by the issue of 16,835,588 new ordinary shares in the Company,
apportioned equally between each Project and issued upon the grant of the
relevant Tenement comprising each project, which in the case of Pitfield is
the already granted Exploration Licence E70/5465. Following completion on
Pitfield, 5,611,863, Consideration Shares have been issued.
The Directors do not consider the asset to be impaired.
8. Share capital and share premium
Group Number of shares Share premium Total
£ £
At 1 January 2021 314,683,361 43,065,981 43,065,981
Issue of Ordinary Shares - 22 February 2021 7,095,510 277,434 277,434
Issue of Ordinary Shares - 22 February 2021 7,095,510 277,434 277,434
Issue of Ordinary Shares - 20 May 2021 1,921,068 54,750 54,750
Issue of Ordinary Shares - 20 May 2021 1,921,068 54,750 54,750
Issue of Ordinary Shares - 10 June 2021 3,995,238 106,506 106,506
At 31 December 2021 336,711,755 43,836,855 43,836,855
At 1 January 2022 336,711,755 43,836,855 43,836,855
Issue of Ordinary Shares - 13 April 2022 5,611,863 75,760 75,760
Issue of Ordinary Shares - 28 April 2022 85,000,000 1,700,000 1,700,000
90,611,863 1,775,760 1,775,760
Cost of capital - (88,920) (88,920)
At 30 June 2022 427,323,618 45,523,695 45,523,695
9. Earnings per share
The calculation of the total basic loss per share of 0.170 pence (30 June
2021: 0.190 pence profit) is based on the loss attributable to equity owners
of the parent company of £633,109 (30 June 2021: £682,011 profit) and on the
weighted average number of ordinary shares of 369,216,381 (30 June 2021:
351,606,291) in issue during the period.
Details of share options that could potentially dilute earnings per share in
future periods are disclosed in the notes to the Group's Annual Report and
Financial Statements for the year ended 31 December 2021.
10. Fair value of financial assets and liabilities measured at amortised
costs
Financial assets and liabilities comprise the following:
· Trade and other receivables
· Cash and cash equivalents
· Trade and other payables
The fair values of these items equate to their carrying values as at the
reporting date.
11. Commitments
a) Tribute Agreement
As part of the Tribute Agreement with Maher Mining Contractors Pty Ltd for the
Gindalbie Gold Project, Empire has agreed to a minimum expenditure commitment
during the two stages of exploration of A$250,000 for each period.
b) Century Minerals
The Company has agreed to spend a minimum of A$1,400,000 on exploration within
24 months of the date of acquisition of the Century acquisition, and this may
be extended by a further 12 months should either the Walton or Stavely
tenements not be granted within 12 months of acquisition.
In addition, commitments stated in the Group's Annual Financial Statements for
the year ended 31 December 2021 remain.
12. Events after the balance sheet date
There have been no events after the reporting date of a material nature.
13. Approval of interim financial statements
The condensed interim financial statements were approved by the Board of
Directors on 13 September 2022.
**ENDS**
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