REG - Firering Strategic - Half-year Report
23/09/2022 12:15
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RNS Number : 4885A Firering Strategic Minerals PLC 23 September 2022
Firering Strategic Minerals plc / EPIC: FRG / Market: AIM / Sector: Mining
23 September 2022
Firering Strategic Minerals plc
("Firering" or "the Company")
Interim Results
For the Six Months Ended 30 June 2022
Firering Strategic Minerals plc, an exploration company focusing on critical
minerals, is pleased to announce its interim results for the six months ended
30 June 2022.
Corporate and Operational Highlights
· Detailed geological mapping, auger drilling and soil sampling provide
evidence of a much larger pegmatite field than originally thought.
· Appointment of diamond drilling contractor, FOREMI, to spearhead core
drilling campaign at its flagship Atex Lithium -Tantalum Project ("Atex").
· Significant operational progress with the completion of the first
phase auger drilling campaign and soil sampling at Atex, identifying areas of
interest for Phase I diamond drilling ("DD") campaign.
· Acquisition of Toura Nickel-Cobalt Licence ("Toura"), Côte d'Ivoire,
which is in line with the Company's strategy to focus on critical metals
Post Period Highlights
· Commencement of Phase I DD campaign in July 2022.
· Successfully completed 11 DD holes targeting potential Li-bearing
pegmatites for a total of 1,895m out of a planned 3,000m drilling campaign at
the Atex licence area. Results include:
o Pegmatites intersected in all 11 holes drilled to date.
o Visible lithium mineralisation is present in 10 out of the 11 holes
· Potential new pegmatite field identified in the NNW of the Atex
licence area.
· As part of its commitment to the local community, Firering funded the
drilling of an additional water borehole at Touvré, a local village with
limited access to clean water
· Increased stake in the Atex Lithium - Tantalum Project from 51% to
77%, keeping in line with the Company's strategy to develop Atex to supply the
increasing demand for ethically sourced critical minerals required for Net
Zero transition.
Outlook
· Completion of Phase I 3,000m DD campaign in the next few weeks.
· First assay and X-ray diffraction ("XRD") results expected in Q4
2022.
· Further detailed mapping in the Atex licence area, including south of
the road to Touvré
· Second auger drilling and soil sampling campaigns commencing in Q4
2022.
· Results from these two campaigns will be used to design Phase I of
Reverse Circulation ("RC") drilling campaign and Phase II DD campaign.
Directorate Change
Timothy Daniel has resigned as Chief Financial Officer ("CFO") of the Company
to pursue other career opportunities effective from today. Shai Kol, a
qualified Chartered Accountant with over 23 years' experience in finance, will
transition from his current position as Non-Executive Director and becomes the
Company's CFO. The Board would like to thank Mr Daniel for his contribution
to the successful listing last year and beyond and wish him all the best for
the future.
Commenting on the results, Yuval Cohen, Chief Executive of Firering, said:
"The first six months of 2022 have been very successful in terms of the
Company's operational progress and achievements. Our ability to accelerate the
first auger drilling and soil sampling campaigns, driven by detailed
geological mapping, increased our understanding of the Atex licence area, and
allowed us to design the first phase of our diamond drilling programme."
"Post period, the intersection of pegmatites in all 11 holes drilled to date,
along with the discovery of a potential new pegmatite field in the NNW of the
licence area, are indicative of the potential of the Atex project. We are now
building on the success experienced in this reporting period and we look
forward to updating shareholders on the remaining holes from the 3,000m
diamond drilling programme in the coming weeks and the first assay and XRDs
results expected in Q4 2022."
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE UK
VERSION OF THE MARKET ABUSE REGULATION NO 596/2014 WHICH IS PART OF ENGLISH
LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL) ACT 2018, AS AMENDED. ON
PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS
INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.
*** ENDS ***
For further information and updates on Firering's exploration programme, visit
www.fireringplc.com or contact the following:
Firering Strategic Minerals Tel: +44 20 7236 1177
Yuval Cohen
Tim Daniel
SPARK Advisory Partners Limited Tel: +44 20 3368 3550
Nominated Adviser
Neil Baldwin / James Keeshan / Adam Dawes
Optiva Securities Limited Tel: +44 20 3137 1903
Broker
Christian Dennis / Daniel Ingram
St Brides Partners Limited T: +44 20 7236 1177
Financial PR E: firering (mailto:firering@stbridespartners.co.uk) @stbridespartners.co.uk
(mailto:firering@stbridespartners.co.uk)
Ana Ribeiro / Susie Geliher / Isabelle Morris
Chairman's Statement
I am pleased to report a busy half-year with significant operational
achievements during the six months to 30 June 2022.
The first six months of the year have been pivotal for Firering as it strives
to deliver its strategic and operational targets whilst maximising value at
its flagship, Atex dual Lithium - Tantalum Project. We started the period
positively. In early April 2022, we received all assay results from our auger
drilling campaign in the Atex licence area. As expected, these results
confirmed the presence of the mapped lithium pegmatites recorded during the
regional mapping exercise. This validation of the existence of pegmatites at
Atex project was fundamental in our decision to accelerate exploration work
and consequently led to the appointment of FOREMI as our diamond drilling
contractor to carry out our diamond drilling programme.
The first phase of our 3,000m diamond drilling programme at Atex began in
July, targeting the potentially lithium-bearing pegmatites as part of a fully
funded diamond drilling campaign, in line with our accelerated exploration
plan.
In addition, at the start of 2022 the Company executed a sale and purchase
agreement with AIM and TSX-V listed Altus Strategies Plc for the purchase of a
100% interest in the Toura nickel-cobalt licence application located in
western Côte d'Ivoire. Although our exploration focus remains on advancing
the Atex project.
Financial
The Company generated no revenue during the period but focussed on exploring
and developing assets that the Board believes will generate revenue for the
Company in the future.
For the six-month period ended 30 June 2022 the Company reports a pre-tax loss
of €0.5m (six months ended 30 June 2021: pre-tax loss of €0.9m),
The Company's net cash balance as at 30 June 2022 was €2.1 million.
Post period
On 4 July 2022, the Company exercised its option to increase its stake in the
Atex project from 51% to 77%. The Board remains confident that Atex has the
potential to be the next significant lithium project in West Africa and is
well placed to benefit from the continued demand for lithium.
Our decision was validated by the encouraging results the Company issued as
part of its operational update on 1 September 2022. The first phase of its
core diamond drilling programme so far confirmed the presence of pegmatites in
all 11 drill holes completed to date, with visible lithium mineralisation
observed in 10 of these holes. We look forward to receiving the first assay
and XRD results which are expected during Q4 of 2022.
In addition to the water borehole that was completed to support exploration
activities at Atex, we funded another water borehole in the nearby village of
Touvré to provide clean water to the local community. This is part of our
commitment towards Environmental and Social Governance ("ESG"), and we are
looking forward to welcoming local, regional, and national authorities to the
official opening of the waterhole.
We would also like to welcome Shai Kol as Chief Financial Officer to the
Company. Mr Kol became Non-Executive Director of the Company in July 2022
(announced on 18 July 2022), following the resignation of Ofra Chen. He has
stepped up to the role of CFO following the resignation of Mr Daniel today.
I would like to personally thank Mr Daniel for his contribution to the success
of the Company to date and wish him all the best for the future.
Our intention moving forward is to advance the delivery of the Company's
strategic plan and further increase our understanding of our lithium-tantalum
project in Côte d'Ivoire. We look forward to the next six months with
optimism and updating the market in due course.
On behalf of the entire Board, I would like to take this opportunity to thank
our shareholders for all their support.
Youval Rasin
Non-Executive Chairman
23 September 2022
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
30 June 31 December
2022 2021
Unaudited Audited
Euros in thousands
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 2,078 3,384
Other receivables 17 30
Total current assets 2,095 3,414
NON-CURRENT ASSETS:
Intangible assets 2,749 2,073
Property, plant and equipment 304 305
Total non-current assets 3,053 2,378
Total assets 5,148 5,792
The accompanying notes form an integral part of the interim consolidated
financial statements.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
30 June 31 December
2022 2021
Unaudited Audited
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Trade payables 63 150
Other payables 83 102
Capital note 214 214
Total current liabilities 360 466
NON-CURRENT LIABILITIES:
Accrued severance pay, net - 8
Capital notes 540 514
Loan from non-controlling interest in subsidiary 98 92
Liability to non-controlling interest in subsidiary 146 130
Total non-current liabilities 784 744
Total liabilities 1,144 1,210
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY:
Share capital 87 87
Share premium 6,878 6,878
Warrants 20 20
Accumulated deficit (3,490) (2,973)
Capital reserve 327 327
3,822 4,339
Non-controlling interests 182 243
Total equity 4,004 4,582
Total liabilities and equity 5,148 5,792
The accompanying notes form an integral part of the interim consolidated
financial statements.
23 September, 2022
Date of approval of the financial statements Youval Rasin Yuval Cohen Timothy Daniel
Director and Chief Executive Officer CEO CFO
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Six months ended Year ended
30 June 31 December
2022 2021 2021
Unaudited Audited
Euros in thousands
(Except per share amounts)
General and administrative expenses (415) (815) (929)
Operating loss (415) (815) (929)
Financial expenses (102) (54) (1,373)
Loss before taxes on income (517) (869) (2,302)
Taxes on income - - -
Net loss (517) (869) (2,302)
Total comprehensive loss (517) (869) (2,302)
Net loss attributable to:
Equity holders of the Company (517) (779) (2,276)
Non-controlling interests - (90) (26)
(517) (869) (2,302)
Total comprehensive loss attributable to:
Equity holders of the Company (517) (779) (2,276)
Non-controlling interests - (90) (26)
(517) (869) (2,302)
Loss per share (in Euro) (0.01) (0.10) (0.06)
The accompanying notes form an integral part of the interim consolidated
financial statements.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Attributable to equity holders of the Company
Share Share premium Warrants Shares Reserves Aaccumulated deficit Total Non- Total
capital to be (*) controlling interests equity
issued
Unaudited
Euros in thousands
As at 1 January 2022 (audited) 87 6,878 20 - 327 (2,973) 4,339 243 4,582
Loss for the period - - - - - (517) (517) - (517)
Payment on account of acquisition of non-controlling interests (Note 4) - - - - - - - (61) (61)
As at 30 June 2022 87 6,878 20 - 327 (3,490) 3,822 182 4,004
Attributable to equity holders of the Company
Share Share premium Warrants Shares Reserves Aaccumulated deficit Total Non- Total
capital to be (*) controlling interests equity
issued
Unaudited
Euros in thousands
As at 1 January 2021 (audited) 1 - - 50 - (697) (646) 90 (556)
Loss for the period - - - - - (779) (779) (90) (869)
Issuance of shares 29 - - - - - 29 - 29
Non-controlling interests arising from initially consolidated subsidiary - - - - - - - 58 58
As at 30 June 2021 30 - - 50 - (1,476) (1,396) 58 (1,338)
The accompanying notes form an integral part of the interim consolidated
financial statements.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Attributable to equity holders of the Company
Share Share premium Warrants Shares Reserves Aaccumulated deficit Total Non- Total
capital to be (*) controlling interests equity
issued
Audited
Euros in thousands
As at 1 January 2021 1 - - 50 - (697) (646) 90 (556)
Loss for the period - - - - - (2,276) (2,276) (26) (2,302)
Issuance of shares 71 3,962 20 (50) - - 4,003 - 4,003
Conversion to equity of convertible loan notes 15 2,216 - - - - 2,231 - 2,231
Share-based compensation - 700 - - - - 700 - 700
Contribution to equity - - - - 327 - 327 31 358
Non-controlling interests arising from initially consolidated subsidiary - - - - - - - 148 148
As at 31 December 2021 87 6,878 20 - 327 (2,973) 4,339 243 4,582
The accompanying notes form an integral part of the interim consolidated
financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended Year ended
30 June 31 December
2022 2021 2021
Unaudited Audited
Euros in thousands
Cash flows from operating activities:
Net loss (517) (869) (2,302)
Adjustments to the profit or loss items:
Depreciation - 39 151
Share-based compensation - - 700
Accrued interest on convertible loan notes - 50 111
Change in fair value of conversion option of convertible loan notes - - 669
Accrued interest on capital note and loans from non-controlling interest in 32 - 17
subsidiary
Decrease (increase) in other receivables - (7) (29)
Increase (decrease) in trade payables (87) 118 145
Increase (decrease) in other payables (19)
Increase (decrease) in liability to non-controlling interest in subsidiary 16 - (156)
Increase (decrease) in severance pay (8) - 8
Net cash used in operating activities (583) (669) (686)
Cash flows from investing activities:
Net cash outflow from acquisition of subsidiaries - (61) (289)
Additions to property, plant and equipment (62) (11) (142)
Decrease in deposits 13 - -
Additions to intangible assets (613) (152) (863)
Net cash used in investing activities (662) (224) (1,294)
Cash flows from financing activities:
Issuance of shares - 29 4,004
Advance on account of acquisition of non-controlling interests (61)
Proceeds of loans from shareholders - 77 254
Proceeds from the issue of convertible loans - 498 726
Net cash provided by (used in) financing activities (61) 604 4,984
Net change in cash and cash equivalents (1,306) (289) 3,004
Cash and cash equivalents at beginning of period 3,384 380 380
Cash and cash equivalents at end of period 2,078 91 3,384
The accompanying notes form an integral part of the interim consolidated
financial statements.
Six months ended Year ended
30 June 31 December
2022 2021 2021
Unaudited Audited
Euros in thousands
Supplemental disclosure of non-cash activities:
Issuance of shares in consideration for conversion of convertible loan notes - - 2,231
Discount on loans from shareholders and non-controlling interests accounted - - 358
for as contributions to equity
Depreciation of Property, plant and equipment capitalized to Intangible assets 63 - -
The accompanying notes form an integral part of the interim consolidated
financial statements.
NOTE 1:- GENERAL INFORMATION
a. Firering Strategic Minerals PLC (formerly "Firering Holdings
Limited") ("The Company") is a holding company for a group of exploration and
development companies set up to focus on developing assets towards the ethical
production of critical metals. The Company was incorporated on 8 May 2019 in
Cyprus. The address of its registered office is Ioanni Stylianou 6, 2(nd)
Floor, Office 202, 2003, Nicosia, Cyprus.
The Company owns 75% of the issued share capital of Bri Coltan SARL ("Bri
Coltan") a company incorporated in Cote d'Ivoire. The principal activity of
the subsidiary is the exploration and development of mineral projects (in
particular, columbite- tantalite).
On 1 March 2021, the Company purchased 51% of the issued share capital of Atex
Mining Resources SARL ("Atex") a company incorporated in Cote d'Ivoire. The
principal activity of Atex is the exploration and development of mineral
projects (in particular, lithium and columbite-tantalite).
On 22 November 2021, the Company purchased 80% of the issued share capital of
Alliance Minerals Corporation SARL ("Alliance"), a company incorporated in
Cote d'Ivoire. Alliance holds an exploration license request at an area
bordering Atex.
On 12 November 2021, the Company completed its Initial Public Offering ("IPO")
and admission to trading on the AIM, a market operated by the London Stock
Exchange ("the AIM"), by issuing 30,769,230 Ordinary shares at a price of £
0.13 per share for a total cash consideration of € 4.68 million (£ 4
million). The net proceeds after expenses were €4.25 million (£ 3.63
million).
On 14 March 2022 the Company purchased a 100% interest in its wholly-owned
Seychellois subsidiary, Altar Resources Limited ("Altar"). Altar is the 100%
owner of Apalex SARL, an Ivorian incorporated company which holds the
submitted the Toura nickel-cobalt licence application located in western Côte
d'Ivoire. The consideration for the Project was €15,000 in cash and a Gross
Revenue Royalty of up to 1.0% on nickel and cobalt sales from the Project (see
also note 4).
b. Going concern:
The Group's operations are at an early stage of development and the continuing
success of the Group will depend on the Group's ability to manage its mineral
projects. Presently, the Group has no projects producing positive cash flow
and the Group is likely to remain cash flow negative in the near future. The
Group's ultimate success will depend on its ability to generate positive cash
flow from active mining operations in the future and its ability to secure
external funding for its development requirements. However, there is no
assurance that the Group will achieve profitability or positive cash flow from
its operating activities.
The Board of Directors and Group management have assessed the ability of the
Group to continue as a going concern. Based on a review of the Group's budget
and forecast cash flows, there is a reasonable expectation that the Group will
have adequate resources to continue in operational existence and meet its
obligations as they become due for at least a period of twelve months from the
date of approval of the financial statements. Thus, the going concern basis of
accounting has continued to be applied in preparing these financial
statements.
NOTE 1:- GENERAL INFORMATION (Cont.)
c. The recent outbreak of COVID-19 had no significant impact on the
Company's operations during 2021. The outbreak of COVID-19 may resume its
negative effect on economic conditions regionally as well as globally, disrupt
operations situated in countries particularly exposed to the contagion, affect
the Company's suppliers or business practices previously applied by those
entities, or otherwise impact the Company's activities. Governments in
affected countries have imposed travel bans, quarantines and other emergency
public safety measures. Those measures, though apparently temporary in nature,
may continue and increase depending on developments in the COVID-19 pandemic.
The ultimate severity of the COVID-19 outbreak is uncertain at this time and
therefore the Company cannot reasonably estimate the impact it may have on its
end markets and its future revenues, profitability, liquidity and financial
position.
d. These financial statements have been prepared in a condensed
format as of 30 June 2022 and for the six months then ended ("interim
consolidated financial statements"). These financial statements should be read
in conjunction with the Company's annual financial statements as of
31 December 2021 and for the year then ended and accompanying notes ("annual
consolidated financial statements").
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation of the interim consolidated financial statements:
The interim consolidated financial statements have been prepared in accordance
with IAS 34, "Interim Financial Reporting".
The accounting policies adopted in the preparation of the interim consolidated
financial statements are consistent with those followed in the preparation of
the annual consolidated financial statements, except as described below.
.
NOTE 3:- DISCLOSURE OF NEW STANDARDS IN THE PERIOD PRIOR TO THEIR ADOPTION
1. Amendment to IAS 37, "Provisions, Contingent Liabilities and Contingent
Assets":
In May 2020, the IASB issued an amendment to IAS 37, regarding which costs a
company should include when assessing whether a contract is onerous ("the
Amendment").
According to the Amendment, costs of fulfilling a contract include both the
incremental costs (for example, raw materials and direct labor) and an
allocation of other costs that relate directly to fulfilling a contract (for
example, depreciation of an item of property, plant and equipment used in
fulfilling the contract).
The Amendment is effective for annual periods beginning on or after 1 January
2022 and applies to contracts for which all obligations in respect thereof
have not yet been fulfilled as of 1 January 2022. The application of the
Amendment does not require the restatement of comparative data. Instead the
opening balance of retained earnings on the date of initial application date
is adjusted for the cumulative effect of the Amendment.
The application of the Amendment did not have a material impact on the
Company's
interim financial statements.
2. Amendment to IAS 16, "Property, Plant and Equipment":
In May 2020, the IASB issued an amendment to IAS 16, "Property, Plant and
Equipment" ("the Amendment"). The Amendment prohibits a company from deducting
from the cost of property, plant and equipment ("PP&E") consideration
received from the sales of items produced while the company is preparing the
asset for its intended use. Instead, the company should recognize such
consideration and related costs in profit or loss.
The Amendment is effective for annual reporting periods beginning on or after
January 1, 2022. The Amendment is to be applied retrospectively, but only to
items of PP&E made available for use on or after the beginning of the
earliest period presented in the financial statements in which the company
first applies the Amendment.
The cumulative effect of initially applying the Amendment is recognized as an
adjustment to the opening balance of retained earnings at the beginning of the
earliest period presented.
The application of the Amendment did not have a material impact on the
Company's interim financial statements.
NOTE 4: - ACQUISITION OF SUBSIDIARIES
Acquisition of Altar Resources Limited ("Altar")
On 14 March 2022 the Company purchased 100% interest in Altar Resources
Limited ("Altar"), a company incorporated in Seychelle. Altar is the 100%
owner of Apalex SARL, an Ivorian incorporated company which has an application
for a nickel-cobalt mineral prospecting license with an area of approximately
168 sq km, in western Côte d'Ivoire.
The GRR will be calculated as a percentage of the gross proceeds received from
sales from the Project less transportation costs. The GRR will be subject to a
separate agreement, which will be entered into between the Company and Altus,
within six months of the grant of the Application.
Firering will pay to Altus a GRR from the Project, linked to the United States
dollar nickel price (as quoted per ton by the London Metal Exchange) at the
time of the metal sales as follows:
- When the nickel price is less than or equal to US$12,000/t: no royalties
will be payable;
- when the nickel price is between US$12,000/t and US$18,000/t Firering will
pay to Altus a 0.5% GRR; and
- when the nickel price is higher than US$18,000/t Firering will pay to Altus
a 1.0% GRR.
The financial impact of the acquisition is a €15k increase in Company's
intangible assets
NOTE 5:- SIGNIFICANT EVENTS
On 4 July 2022 the Company purchased an additional 26% of the issued shares in
Atex (to increase its holding to 77%) as follows:
· 10% of the issued shares in Atex in exchange for 1,158,200 shares in
the Company (with a value of £76,441 at the closing share price on 1 July
2022 of 6.6p per share; €88,672 based on £1 = €1.16).
· 16% of the issued shares in Atex by way of exercising the first
option under the agreement between Firering and Atex dated 31 March 2021 for a
total consideration of c.€320,000.
· As of 30 June 2022, the Company has paid an advance of €61,000 on
account of the above acquisition of shares of the non-controlling interests.
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