REG - GreenRoc Mining PLC - Results for the period to 30 November 2021
17/03/2022 07:00
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RNS Number : 0495F GreenRoc Mining PLC 17 March 2022
GreenRoc Mining Plc / EPIC: GROC / Market: AIM / Sector: Mining
GreenRoc Mining plc
("GreenRoc" or the "Company")
Results for the period to 30 November 2021
GreenRoc Mining plc (AIM: GROC), a company focused on the development of
critical mineral projects in Greenland, announces its results for the period
to 30 November 2021, the first financial period end since the Company's
admission to trading on AIM on 28 September 2021.
The Annual Report for the period to 30 November 2021 was approved by the Board
on 16 March 2022 and will be sent to shareholders and made available on the
Company's website (www.greenrocmining.com) shortly.
The Financial Statements (including notes), and the statements of the Chairman
and CEO, have been extracted from the Annual Report and are shown below.
This announcement contains inside information for the purposes of the UK
Market Abuse Regulation and the Directors of the Company are responsible for
the release of this announcement.
For further information, please contact:
GreenRoc Mining Plc +44 20 3950 0724
Kirk Adams, CEO
Cairn Financial Advisers LLP (Nomad) +44 20 7213 0880
James Caithie / Sandy Jamieson / Louise O'Driscoll
ETX Capital (Broker) +44 20 7392 1494
Tom Curran / Thomas Smith
St Brides Partners Ltd (Financial PR & IR) +44 20 7236 1177
Susie Geliher / Oonagh Reidy / Charlotte Page
About GreenRoc
GreenRoc Mining Plc is an AIM-quoted company which is developing mining
projects in Greenland in critical and high-demand minerals. Led by a group
of highly experienced mining industry professionals, GreenRoc has a portfolio
of 100% owned projects: Amitsoq (Graphite); Thule Black Sands (Ilmenite);
Melville Bay (Iron Ore); and Inglefield (Multi-Element).
CHAIRMAN'S STATEMENT
I am very pleased to present the first Annual Report for the GreenRoc Mining
Plc group ("the Group").
GreenRoc was admitted to AIM in September 2021, raising gross funds of £5.1
million. The Company's start to life as a listed company has been greatly
boosted by the successful completion last summer of drilling programmes at our
two flagship assets, Amitsoq and Thule Black Sands ("TBS"). These assets
host significant deposits of minerals, respectively graphite and ilmenite (the
key source of titanium), which have been designated by both the USA and the EU
as "critical minerals", meaning metals and minerals which are considered vital
for the economic well-being of the world's major and emerging economies, but
whose supply may be at risk due to various factors, including geopolitics.
At Amitsoq, on the tip of southern Greenland, our maiden drilling campaign
last summer confirmed both the deposit's very high-grade graphite
mineralisation and the significant thickness of its graphite layers. On 8
March 2022, we announced a Maiden JORC Resource at the Amitsoq Island deposit
of 8.28 million tonnes at an average grade of 19.75%, for a total graphite
content of 1.63 million tonnes. This result gives us great confidence as we
move into a second year of drilling at Amitsoq, where our objective will be to
greatly increase the Resource base and thereby provide a solid foundation for
pre-feasibility work.
Last summer we also completed a second phase drilling programme at TBS, our
heavy mineral sand project in north-west Greenland. Infill drilling using a
sonic rig enabled us to reach mineralised depths of up to 6m. Once the drill
samples have been assayed and a mineral resource assessment made, we are
confident that we will see a material uplift in both the size and
classification of the existing mineral resource for TBS.
The decision to spin out the Greenland mining assets of Alba Mineral Resources
Plc ("Alba") into GreenRoc last year was motivated by our belief that Alba's
portfolio of mining assets in Greenland was strong enough to support a
stand-alone listing, and that transferring these assets into the stewardship
of a dedicated, Greenland-focused management team would provide the best
possible conditions for the rapid development and exponential growth in value
of the projects.
Our goal for our key assets, Amitsoq and TBS, is to complete feasibility and
environmental and social impact assessments ("ESIAs") as expeditiously as
possible so that we can apply to the Greenland Government for mining licences.
As such, we intend to commence ESIA work at TBS shortly and to complete the
field work component of that exercise during the coming summer months. We will
also continue environmental studies at Amitsoq this year, so that we will be
ready to move into the ESIA process following this summer's second phase
drilling campaign there.
This promises to be a year of significant growth for GreenRoc as we push
forward in our objective to become a producer of critical minerals. I would
like to thank our shareholders for coming with us on this very exciting
journey.
George Frangeskides
Chairman
CHIEF EXECUTIVE OFFICER'S STATEMENT
It gives me great pleasure to present a view from the bridge in the first
Annual Report of GreenRoc Mining Plc.
IPO AND ADMISSION TO TRADING ON AIM
On 28 September 2021, the Company finalised the transactions necessary to
complete the acquisition of 100% of the Greenland mining assets of Alba,
raising gross proceeds of £5.1 million from new investors and admitting the
Company's shares to trading on AIM.
As explained by our Chairman in his statement, the rationale for separately
listing Alba's Greenland mining projects was motivated by a desire to create
the optimal conditions for these high-quality assets to be fast-tracked into
the development phase with a view to achieving production in the shortest
possible timeframe. As a result of GreenRoc's successful IPO and admission
to trading on AIM in late September 2021, the Company now benefits from a
dedicated management team which is wholly focused on the development of these
high-quality assets in Greenland. Further, the focus on a single operating
jurisdiction provides GreenRoc with the opportunity to secure future
development capital from funding partners specifically attracted to a
Greenland-centric mining investment proposition.
PROJECTS
GreenRoc's four projects in Greenland are the Amitsoq Graphite Project, the
TBS Ilmenite Project, the Melville Bay Iron Project, and the Inglefield
Multi-Element Project.
It should be noted that, as a result of travel restrictions caused by
COVID-19, the Greenland Government suspended minimum expenditure obligations
for all mineral exploration licences throughout both 2020 and 2021.
Nevertheless, a significant amount of work was completed at the Company's
projects in the summer of 2021, particularly at the Amitsoq and TBS projects
where drilling campaigns were completed.
Amitsoq Graphite Projects
Amitsoq is a graphite project located in southern Greenland whose grades are
among the highest in the world. The project consists of two deposit areas:
Amitsoq Island and Kalaaq.
Amitsoq Island Project
Amitsoq Island is the site of a historic graphite mine where the average grade
achieved was 21%, prior to operation ceasing in 1922.
Metallurgical testwork has confirmed the quality of the graphite
mineralisation and that saleable concentrates can be produced. It also
confirmed that Amitsoq graphite can be upgraded to a high purity 99.97%
graphite product, the purity required for lithium-ion batteries ("LIBs"). This
is the key future market for graphite since the Electric Vehicle (or "EV")
sector is set to show significant growth in the years ahead.
In the summer of 2021, a maiden drilling programme was undertaken at Amitsoq
Island, on the site of the historic graphite mine. Eight diamond core drill
holes were completed for a total of 935 metres.
On 8 March 2022, we announced a maiden combined Indicated and Inferred JORC
Resource at the Amitsoq Island deposit of 8.3 million tonnes (Mt) at an
average grade of 19.75%, giving a total graphite content of 1.63 million
tonnes.
Mineral Resource Category Tonnes (Mt) Graphitic Carbon (%) Graphite content (Mt)
Measured - - -
Indicated 2.04 20.65 0.42
Total Measured + Indicated 2.04 20.65 0.42
Inferred 6.24 19.45 1.21
Total Resources 8.28 19.75 1.63
This Maiden Resource confirms Amitsoq's position as one of the highest-grade
graphite deposits globally and supports the Company's objective of
fast-tracking the project into the development phase. The total graphite
content of 1.63 million tonnes has exceeded the upper end of the tonnage range
in the previously declared Amitsoq Exploration Target (which implied between
0.4 and 1.6 million tonnes of contained graphite from the entire target area).
Over 25% of the contained graphite in the Maiden Resource falls within the
higher category of Indicated Resources, providing additional confidence that a
more significant, high-category Resource can be established following the
Phase 2 drilling campaign which is planned for this summer. This programme
will aim to drill approximately 3,000 metres, and will have the primary goal
of establishing a sufficiently large resource to enable the development of a
mine plan, and with enough confidence to support feasibility studies. We
will also undertake further environmental and social impact assessment
("ESIA") work with the aim of creating the basis upon which a mining licence
application can be submitted.
Kalaaq Mainland Project Area
During July and August 2021, field exploration was conducted at Kalaaq to
sample mapped graphite horizons that had been identified in previous field
campaigns, and to explore the wider area for new discoveries. Exploration work
consisted of field mapping, trenching, channel sampling, grab sampling and
electromagnetic ("EM") surveys. The exploration at Kalaaq also identified that
the area boasts plentiful fresh water, and areas of flat ground that are
potentially suitable for a plant and tailings impoundment.
The 2021 exploration campaign confirmed substantial new zones of graphite
mineralization at Kalaaq. The previously identified mineralized zones were
extended by around 30% along strike using ground geophysics and channel
sampling.
The assay values from the sampling programme range from 17.43 to 33.1 C(g)%,
indicating that Kalaaq also has some of the highest graphite grades in the
world. A new zone was also discovered, outside of the Exploration Target area,
with grab samples taken in this area measuring up to 32.1% C(g)%.
2022 Amitsoq Field Campaign
The drilling plan for 2022 envisages the completion of drilling over the
Amitsoq Exploration Target area. The process of securing key service providers
(drillers/ drill rig, field team, transport and logistics providers) for the
exploration season is well advanced, and the process of engaging ESIA
consultants is also underway.
Thule Black Sands Ilmenite Project
Thule Black Sands is a heavy mineral sands ("HMS") ilmenite project located on
the Steensby Land peninsular in north-west Greenland, some 80km south of the
regional settlement of Qaanaaq.
An extensive surface drilling campaign in 2018 led to the declaration of a
maiden Mineral Resource for Thule Black Sands of 19Mt@ 43.6% Total Heavy
Minerals ("THM"), with an in-situ ilmenite grade of 8.9%.
Ilmenite prices have more than doubled in the past two years, driven in part
by curtailed production from Rio Tinto's Richards Bay HMS mine (South Africa's
largest mineral sands producer), a steadily increasing demand induced by world
population growth, and a supply squeeze on ilmenite.
The high ilmenite grades of the TBS Project create an ideal platform for
driving the Project towards development.
The 2018 Mineral Resource estimate only averaged one metre in depth, which
reflected the depth of the permafrost on the project coastline, rather than
the basement of the deposit. A second phase drilling campaign was completed
in 2021, focusing on the higher-grade southern area. A total of 249 holes were
drilled by a sonic rig up to six metres deep, for a total of approximately 550
metres of drilling. Holes were spaced on a grid of 200m x 250m, with fences
placed midway (infilling) between the 2018 fences. There was some drilling
within the 2018 fences to allow for resource estimation to a greater degree of
certainty. This phase of drilling succeeded in determining the basement of the
deposit, and as a result we are hoping for a material upgrade in the Mineral
Resource due to its anticipated greater depth.
The samples from this drilling campaign have been transported to IHC Robbins
(independent mineral sands specialists and part of the Royal IHC Group) for
analysis. The assay results and the assessment of a potential upgrade to the
existing JORC Resource are expected to be announced in Q2 2022.
We are anticipating an increase in both the tonnage and classification of our
Resource, which we hope will move at least some of the existing Inferred
Resource into the Measured and/or Indicated categories. Subject to this, we
will then look to fast-track a Scoping Study with the aim of completing a full
Feasibility Study as quickly as possible thereafter. In anticipation of the
requirements for obtaining a Mining Licence, we have appointed environmental
and social consultants to carry out detailed ESIA work at TBS.
The TBS project has a number of advantages: the deposit lies at or near
surface and is therefore simple to mine; sheltered bays sit on our licence
area which could be used for the siting of infrastructure; and the continued
development and full licensing of the neighbouring Dundas project owned by
Bluejay Mining PLC (currently in development with a Mineral Resource Estimate
of 117m tonnes at a grade of 6.1% in situ ilmenite) provides confidence in the
ability to develop mining operations in the area.
Melville Bay Iron Project
The Melville Bay Iron Project is located in north-west Greenland within 200km
of seasonally ice-free coastline some 1,500km north of Nuuk and 130km south of
the nearest major settlement of Qaanaaq. The project comprises three separate
areas named Havik East, Haematite Nunatak and De Dødes West.
A drilling campaign was undertaken in 2012 across the three blocks, consisting
of 27 holes and 3,520 diamond drill metres, and a JORC Mineral Resource
estimated in 2013 for Havik East.
The Project hosts haematite and magnetite styles of mineralisation across
numerous targets. The significant body of work completed to date, including
extensive resource drilling and metallurgical test work, has confirmed the
presence of significant iron ore deposits at Melville Bay and the ability to
produce a saleable high-grade, low impurity iron ore concentrate. It is
notable that there are indications within the drilling results of the presence
of high-grade Direct Shipping Ore ("DSO"). Such material would not require
further processing on site, and has the potential to be drilled, blasted, and
then shipped directly to an offtake smelter.
The Melville Bay region lies within the Committee Belt, a geological formation
which extends across Baffin Bay into north-central Baffin Island, Canada. The
Havik East and associated iron formations of the Melville Bay area are
considered to be of Algoma-type banded-iron formation ("BIF"). The Canadian
examples of Algoma-type BIF deposits (Mary River: haematite iron ore 641mt
@66% Fe, in production; Roche Bay: magnetite iron ore 660mt @26% Fe, in
exploration) also occurs on the Committee Belt across the Baffin Bay in far
northern Canada and give a useful benchmark of the potential for significant
iron ore deposits in this geological setting. It is notable that Mary River
ships DSO direct from mine to smelter.
In 2021, as part of GreenRoc's acquisition of the Project, independent mining
consultants SRK Consulting ("SRK") were commissioned to update the Mineral
Resource Estimate for Havik East to account for changes in costs and the iron
ore market. The updated Inferred Mineral Resource Statement is 63Mt at 31.4%
Fe.
SRK also updated the Exploration Target for the Project. Considering both the
potential down-dip extensions to the Havik East deposit and the tonnage and
grade assessment of the De Dødes West and Haematite Nunatak targets, SRK has
derived a total Exploration Target for the Melville Bay Iron Project of
200-400Mt at 25-37% Fe. This is inclusive of 100-200Mt at 29-33% Fe at Havik
East, 60-120Mt at 25-30% Fe at De Dødes West and 40-80Mt at 31-37% Fe at
Haematite Nunatak.
These figures indicate that there remains significant potential to increase
the defined resources across the three target areas through further drilling.
In addition, the Company intends to focus its efforts on furthering
investigation of those targets which have the greatest high-grade DSO
potential.
Inglefield Multi-Element Project
The Inglefield Multi-Element Project is located in Inglefield Land, north-west
Greenland.
Extensive historic exploration has reported the presence of cobalt, copper,
gold, vanadium and nickel, and the potential for Inglefield to host a range of
mineralisation styles, including iron ore-copper-gold ("IOCG") deposits.
Field work conducted in 2018 confirmed copper-gold-silver-molybdenum
mineralisation at the Four Finger Lake target over a 500m zone. In 2019 White
Eagle Resources Ltd (now a wholly-owned subsidiary of GreenRoc) commissioned
an independent geophysical data review which further confirmed the IOCG
prospectivity of this target area.
Desktop analysis of the region undertaken in 2019 by TECT Consultants, based
on a wide range of available data, found that the area of highest
prospectivity for an IOCG-style target correlates well with the already known
north-east trending, 70km long "North Inglefield Land Gold Belt", and that the
Four Finger Lake target is most prospective for this mineralisation style.
OUTLOOK
Our vision for GreenRoc is to fast track our two flagship projects, Amitsoq
and Thule Black Sands, towards production by identifying sufficient reserves
and resources to support feasibility work and, ultimately, mine build and
production. This strategy is designed to facilitate the fastest route to
GreenRoc becoming revenue-generating and therefore self-sufficient, with, we
hope, a major uplift in our share price which should result from a "production
premium". This is a production-driven strategy that does not depend on
defining resources beyond a 12-year mine life, and therefore leaves
considerable blue-sky potential for increasing reserves and resources into the
future.
At GreenRoc we have a strong management team with the experience and
capabilities to deliver this plan and vision and have engaged first-rate
consultants and specialists to ensure the highest quality of work.
We are fortunate to have in our portfolio two mining projects in commodities
which are deemed critical to the global economy, are amongst the highest
grades known for their specific minerals on the planet and are set for
significant demand growth.
Since our admission to AIM, the market has been soft for junior mining and
exploration companies, including ourselves. However, the fundamental strengths
of our Company and our projects remain unchanged. Several of our Board
members, including myself, acquired shares in the Company through the market
late last year, a sure sign of our belief in the future prospects of GreenRoc.
We are very confident that our plans for this year will add considerable value
to the Company. Following the recent Maiden JORC Resource announced at
Amitsoq, we await another important Resource update for TBS, following which
we will progress to further drilling, ESIA and feasibility work.
We are very excited about the coming year. We expect to make great strides
in the development of our projects and are convinced that GreenRoc has the
potential to contribute greatly to the need for productive solutions to the
world's growing critical mineral requirements.
Kirk Adams
Chief Executive Officer
16 March 2022
CONSOLIDATED INCOME STATEMENT FOR THE PERIOD FROM 17 MARCH TO 30 NOVEMBER 2021
Note 2021
£'000
Revenue -
Cost of sales -
Gross profit -
Administrative expenses 3 (305)
Operating loss 3 (305)
Finance expense (1)
Loss for the period before tax (306)
Taxation 5 -
Loss for the period from continuing operations (306)
Attributable to:
Equity holders of the parent (306)
(306)
Earnings per ordinary share attributable to the ordinary equity holders of the
parent
Basic and diluted 6 (1.11 pence)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD FROM 17 MARCH TO 30 NOVEMBER 2021
2021
£'000
Loss after tax (306)
Total comprehensive income (306)
Total comprehensive income attributable to:
Equity holders of the parent (306)
(306)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 30 NOVEMBER 2021
Note 2021
£'000
Non-current assets
Intangible fixed assets 7 8,259
Total non-current assets 8,259
Non-current liabilities
Deferred tax 5 (1,004)
Total non-current assets (1,004)
Current assets
Trade and other receivables 10 64
Cash and cash equivalents 11 3,269
Total current assets 3,333
Current liabilities
Trade and other payables 12 (482)
Payable to parent entity 12 (52)
Total current liabilities (534)
Net current assets 2,799
Net assets 10,054
Shareholders' equity
Share capital 13 161
Share premium 13 10,033
Share-based payment reserve 14 166
Retained earnings (306)
Total equity 10,054
These Financial Statements were approved and authorised for issue by the Board
of Directors on 16 March 2022.
Signed on behalf of the Board of Directors
Kirk Adams
Director
COMPANY STATEMENT OF FINANCIAL POSITION AT 30 NOVEMBER 2021
Note 2021
£'000
Non-current assets
Investment in subsidiaries 8 4,017
Total non-current assets 4,017
Current assets
Loans to subsidiaries 9 2,821
Trade and other receivables 10 64
Cash and cash equivalents 11 3,269
Total current assets 6,154
Current liabilities
Trade and other payables 12 (65)
Payable to parent entity 12 (52)
Total current liabilities (117)
Net current assets 6,037
Net assets 10,054
Shareholders' equity
Share capital 13 161
Share premium 13 10,033
Share-based payment reserve 14 166
Retained earnings (306)
Total equity 10,054
The Company has taken advantage of the exemption allowed under section 408 of
the Companies Act 2006 and has not included its own income statement and
statement of comprehensive income in these Financial Statements. The Company's
loss for the period amounted to £306k.
These Financial Statements were approved and authorised for issue by the Board
of Directors on 16 March 2022.
Signed on behalf of the Board of Directors
Kirk Adams
Director
Company No. 13273964
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD FROM 17 MARCH TO 30 NOVEMBER 2021
Share capital Share premium Share-based payment reserve Retained earnings Total
£'000 £'000 £'000 £'000 £'000
Opening balance - - - - -
Loss for the period - - - (306) (306)
Total comprehensive income for the period - - - (306) (306)
Contributions by and distributions to owners
Shares issued 161 10,915 - - 11,076
Cost of issuing equity - (800) - - (800)
Warrants issued at listing - (127) 127 - -
Bonus shares awarded - 45 - - 45
Fair value of share options awarded - - 39 - 39
At 30 November 2021 161 10,033 166 (306) 10,054
COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD FROM 17 MARCH TO 30 NOVEMBER 2021
Share capital Share premium Share-based payment reserve Retained earnings Total
£'000 £'000 £'000 £'000 £'000
Opening balance - - - - -
Loss for the period - - - (306) (306)
Total comprehensive income for the period - - - (306) (306)
Contributions by and distributions to owners
Shares issued 161 10,915 - - 11,076
Cost of issuing equity - (800) - - (800)
Warrants issued at listing - (127) 127 - -
Bonus shares awarded - 45 - - 45
Fair value of share options awarded - - 39 - 39
At 30 November 2021 161 10,033 166 (306) 10,054
CONSOLIDATED CASH FLOW STATEMENT FOR THE PERIOD FROM 17 MARCH TO 30 NOVEMBER 2021
Note 2021
£'000
Cash flows from operating activities
Operating loss (305)
Adjustments for:
Share-based payment charge 39
Bonuses settled in shares 45
Increase in creditors 202
Increase in trade and other receivables (64)
Net cash used in operating activities (83)
Cash flows used in investing activities
Capitalised exploration expenditure 7 (475)
Net cash used in investing activities (475)
Cash flows from financing activities
Proceeds from the issue of shares 13 5,076
Costs of issue 13 (800)
Repayment of loan from parent (448)
Finance expense (1)
Net cash generated from financing activities 3,827
Net increase in cash and cash equivalents 3,269
Cash and cash equivalents at beginning of period -
Cash and cash equivalents at end of period 11 3,269
Significant non-cash transactions in the period included the acquisition of
the Alba subsidiaries for consideration of £6.0 million settled in shares
(see notes 1 and 13).
COMPANY CASH FLOW STATEMENT FOR THE PERIOD FROM 17 MARCH TO 30 NOVEMBER 2021
Note 2021
£'000
Cash flows from operating activities
Operating loss (305)
Adjustments for:
Share based payment charge 39
Bonuses settled in shares 45
Increase in creditors 45
Increase in prepayments (64)
Net cash used in operating activities (240)
Cash flows used in investing activities
Capitalised exploration expenditure -
Net cash used in investing activities -
Cash flows from financing activities
Proceeds from the issue of shares 13 5,075
Costs of issue 13 (800)
Repayment of loan from parent (448)
Loans to subsidiaries (318)
Finance expense -
Net cash generated from financing activities 3,509
Net increase in cash and cash equivalents 3,269
Cash and cash equivalents at beginning of period -
Cash and cash equivalents at end of period 11 3,269
Significant non-cash transactions in the period included the acquisition of
the Alba subsidiaries for consideration of £6.0 million settled in shares
(see notes 1 and 13).
NOTES TO THE FINANCIAL STATEMENTS
1. ACCOUNTING POLICIES AND BASIS OF PREPARATION
GreenRoc Mining Plc is a public limited company incorporated on 17 March 2021
and domiciled in England & Wales, whose shares are publicly traded on the
AIM market of the London Stock Exchange Group Plc. The registered office
address is 6th Floor 60 Gracechurch Street, London, United Kingdom, EC3V 0HR.
The Company's principal activities are the development of mining and
exploration interests in Greenland, where its subsidiaries hold four separate
exploration permits.
The consolidated Financial Statements have been prepared on the historical
cost basis, save for the revaluation of certain financial assets as a result
of fair value accounting. The principal accounting policies applied in the
preparation of these Financial Statements are set out below.
The Company's Ultimate Controlling Party is Alba Mineral Resources Plc, which
holds 54% of the ordinary share capital of the Company and has the right to
appoint two Directors to the Board. The next largest shareholder, Kadupul,
holds 19% of the Company's share capital.
Going concern
Based on financial projections prepared by the Directors, the Group's current
cash resources are sufficient to enable the Group to meet its recurring
outgoings and projected exploration expenditure for the entirety of the next
twelve months from the date of approval of the Financial Statements. In
arriving at this conclusion, the Directors considered current exploration
plans and costings, as well as the fixed administrative costs associated with
running the Group and compared with the cash reserves.
The Directors therefore continue to adopt the going concern basis of
accounting in preparing the Financial Statements.
Critical accounting estimates and judgements
The preparation of the Financial Statements requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities as well as the disclosure of contingent assets and liabilities at
the reporting date and the reported amounts of revenues and expenses during
the reporting period. Actual outcomes could differ from those estimates.
Estimates and judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances. The areas of judgement that
have the most significant effect on the amounts recognised in the Financial
Statements are as follows:
i) JUDGEMENTS
Fair value of the Greenland subsidiaries upon acquisition - £6.0 million
On 22 September 2021, GreenRoc Mining Plc acquired the entire share capital in
Obsidian Mining Ltd ("OML"), White Eagle Resources Limited ("WER"), and White
Fox Resources Limited ("WFR") from Alba Mineral Resources Plc ("Alba"). The
purpose of the transaction was to establish a separate group from Alba which
would be solely focused on progressing the Greenland mining projects held by
the subsidiaries acquired. The consideration paid by GreenRoc for these shares
totalled £6.0 million, in the form of 59.5 million shares in the Company at a
value of 10 pence per share, the price at which the shares were admitted to
the AIM list of the London Stock Exchange on 28 September 2021, and £50k in
cash.
The Directors believe that 10 pence per share was the Fair Value of the
Company's shares on the basis that this was the price paid by new investors
who subscribed to the placing at the time of the IPO. This gave an implicit
value of the consolidated Group, including the new subsidiaries, of £11.1
million, including £5.1 million of new cash, which supports the view of the
Directors that the Fair Value of the underlying assets amounted to £6.0
million. The excess of the Fair Value over the historic cost of the underlying
assets represents the increased value as perceived by the open market as a
result of the development work undertaken by Alba in the periods leading up to
the transaction.
Company accounts Consolidated accounts
£'000 £'000
Consideration paid - Fair value of shares in GreenRoc 5,950 5,950
Assets acquired - historic cost
Investment in subsidiary 4,017 -
Intangible fixed asset - capitalised exploration expenditure - 2,678
Stamp duty payable (20) (20)
Trade creditors - (255)
Accruals - (5)
Intragroup receivable (from new subsidiaries) 2,503 -
Loan due to parent organisation (Alba) (550) (550)
Intangible fixed asset - fair value uplift - 5,106
Deferred tax on fair value uplift - (1,004)
Net assets acquired 5,950 5,950
As the transaction took place between two legal entities with common control,
it was deemed to be outside the scope of IFRS3, and the acquisition method of
accounting was adopted as the most appropriate treatment.
Capitalisation of exploration and evaluation costs - £0.5 million
The capitalisation of exploration costs relating to the exploration and
evaluation phase requires management to make judgements as to the future
events and circumstances of a project, especially in relation to whether an
economically viable extraction operation can be established. In making such
judgements, the Directors take comfort from the findings from exploration
activities undertaken, the fact the Group intends to continue these activities
and that the Company expects to be able to raise additional funding to enable
it to continue the exploration activities.
Impairment assessment of exploration and evaluation costs - £8.3 million
At each reporting date, management make a judgment as to whether circumstances
have changed following the initial capitalisation and whether there are
indicators of impairment. If there are such indicators, an impairment review
will be performed which could result in the relevant capitalised amount being
written off to the income statement.
All of the current exploration projects are being actively progressed, and in
the short period between acquiring these assets and listing on AIM, the
Company does not believe any circumstances have arisen to indicate these
assets require impairment.
Company only - Impairment assessment of investment in and loans to
subsidiaries - £2.8 million
Impairment charges for the period (£nil)
In preparing the parent company Financial Statements, the Directors apply
their judgement to decide if any or all of the company's investments in and
loans to each of Obsidian Mining Limited, White Eagle Resources Limited, and
White Fox Resources Limited should be impaired.
These companies have no source of funds other than their parent company and
the ability of the companies to repay their inter-company debt and for the
Company to gain value from its investments in the companies is dependent on
the future success of the companies' exploration activities. In undertaking
their review, the Directors consider the outcome of their impairment
assessment of the relevant licences as detailed above.
In view of the recent acquisition of these permits at market value, the
Directors do not believe an impairment is appropriate in relation to the
investments or loans to these subsidiaries.
ii) ESTIMATES
Share-based payments - £39k
Share-based payments represent the fair value of shares issued to employees of
the Company, and warrants issued to third parties in consideration for
services provided. The cost of these share-based payments is based on the
number of options or warrants awarded, the grant date and exercise price, the
vesting period, and calculated based on a Black-Scholes model whose input
assumptions are derived from market and other estimates. These estimates
include volatility rates (based on the Alba Mineral Resources plc volatility
of 82.17%), the risk-free rate (calculated to be 0.6%) and the expected term
of the options. For further details, see note 4.
Warrants awarded to ETX and to Cairn Financial Advisors LLP (total value
£127k) in the period were also calculated using a Black-Scholes model with
the same inputs as the employee share options, however with different exercise
prices and vesting dates as set out in note 13.
Basis of preparation
These consolidated Financial Statements have been prepared in accordance with
UK-adopted international accounting standards ("UK-adopted IAS") as they apply
to the Group for the period ended 30 November 2021 and with the Companies Act
2006. Numbers have been rounded to £'000.
New standards, amendments, and interpretations effective for the periods from
1 December 2021
Certain new accounting standards and interpretations have been published that
are not mandatory for 30 November 2021 reporting periods and have not been
early adopted by the Group. These standards include:
Interest Rate Benchmark Reform - IBOR 'phase 2' (Amendments to IFRS 9, IAS 39,
IFRS 7, IFRS 4 and IFRS 16) that addresses issues that might affect financial
reporting after the reform of an interest rate benchmark including its
replacement with an alternative benchmark rate. These amendments are
mandatorily effective for periods beginning 1 January 2021.
IAS 37 - Onerous Contracts - Cost of Fulfilling a Contract amending the
standard regarding costs a company should include as the cost of fulfilling a
contract when assessing whether a contract is onerous. These amendments are
mandatorily effective for periods beginning 1 January 2022.
IAS 16 - Property, Plant and Equipment - Proceeds before Intended Use
regarding proceeds from selling items produced while bringing as asset into
the location and condition necessary for it to be capable of operating in the
manner intended by management. These amendments are mandatorily effective for
periods beginning 1 January 2022.
IAS 1 - Presentation of Financial statements - The classification of
liabilities as current or non-current basing the classification on contractual
arrangements at the reporting date. These amendments are effective for periods
beginning 1 January 2023.
These standards are not expected to have a material impact on the Group or
Company in future reporting periods and on foreseeable future transactions.
Basis of consolidation
The consolidated Financial Statements incorporate the Financial Statements of
the Company and companies controlled by the Company, namely the Subsidiary
Companies, drawn up to 30 November each year.
Control is recognised where the Company has the power to govern the financial
and operating policies of an investee entity to obtain benefits from its
activities. The results of subsidiaries acquired or disposed of during the
period are included in the consolidated income statement from the effective
date of acquisition or up to the effective date of disposal, where
appropriate.
Where necessary, adjustments are made to the Financial Statements of
subsidiaries to bring the accounting policies used into line with those used
by the Group. All intra-group transactions, balances, income and expenses
are eliminated on consolidation. Non-controlling interests in the net assets
of consolidated subsidiaries are identified separately from the Group's equity
therein.
Foreign currency
For the purposes of the consolidated Financial Statements, the results and
financial position of each Group entity are expressed in pounds sterling,
which is the presentation currency for the consolidated Financial Statements,
as well as the functional currency for each of the entities within the Group.
In preparing the Financial Statements of the individual entities, transactions
in currencies other than the entity's functional currency (foreign currencies)
are recorded at the rates of exchange prevailing at the dates of the
transactions. At each reporting date, monetary items denominated in foreign
currencies are retranslated at the rates prevailing at the reporting date.
Exchange differences arising are included in the profit or loss for the
period.
Share-based payments
Share-based compensation benefits are made on an ad-hoc basis on the
recommendations of the Remuneration Committee. The fair value of warrants or
options granted is recognised as an employee benefits expense, with a
corresponding increase in the share-based payment reserve. The total amount to
be expensed is determined by reference to the fair value of the options
granted:
• including any market performance conditions (e.g.,
the entity's share price);
• excluding the impact of any service and non-market
performance vesting conditions (e.g., profitability, sales growth targets and
remaining an employee of the entity over a specified time period); and
• including the impact of any non-vesting conditions
(e.g., the requirement for employees to save or hold shares for a specific
period of time).
The total expense is recognised over the vesting period, which is the period
over which all of the specified vesting conditions are to be satisfied. At the
end of each period, the entity revises its estimates of the number of options
that are expected to vest based on the non-market vesting and service
conditions. It recognises the impact of the revision to original estimates, if
any, in profit or loss, with a corresponding adjustment to the share-based
payment reserve.
Warrants issued as part of the cost of an equity raise (for example as part of
advisers' fees) are recorded at fair value as a cost of that financing within
Share Premium and Share-based Payment Reserve.
Intangible assets: capitalised exploration and evaluation costs
Pre-licence costs are expensed in the period in which they are incurred.
Expenditure on licence renewals and new licence applications covering an area
previously under licence are capitalised in accordance with the policy set out
below.
Once the legal right to explore has been acquired, exploration costs and
evaluation costs arising are capitalised on a project-by-project basis,
pending determination of the technical feasibility and commercial viability of
the project. Costs include appropriate technical and administrative expenses.
If a project is successful, the related expenditures will be reclassified as
development and production assets and amortised over the estimated life of the
commercial reserves. Prior to this, no amortisation is recognised in respect
of such costs. When all licences comprising a project are relinquished, a
project is abandoned or is considered to be of no further commercial value to
the Company, the related costs will be written off to administrative expense
within profit or loss. Deferred exploration costs are carried at historical
cost less any impairment losses recognised.
Impairment reviews for capitalised exploration and evaluation expenditure are
carried out on a project-by-project basis, with each project representing a
potential single cash generating unit. In accordance with the requirements of
IFRS 6, an impairment review is undertaken when indicators of impairment arise
such as:
• unexpected geological occurrences that render the
resource uneconomic;
• title to the asset is compromised;
• variations in mineral prices that render the
project uneconomic;
• substantive expenditure on further exploration and
evaluation of mineral resources which is neither budgeted nor planned; and
• the period for which the Group has the right to
explore has expired and is not expected to be renewed.
Where an impairment loss subsequently reverses, the carrying amount of the
asset (or cash-generating unit) is increased to the revised estimate of its
recoverable amount, but so that the increased carrying amount does not exceed
the carrying amount that would have been determined had no impairment loss
been recognised for the asset (or cash-generating unit) in prior years. A
reversal of an impairment loss is recognised in profit or loss for the year.
Financial instruments
Financial assets and financial liabilities are recognised in the statement of
financial position when the Group becomes a party to the contractual
provisions of the instrument.
Financial assets are classified as either:
• those to be measured subsequently at fair value
(either through other comprehensive income or through profit or loss); or
• those to be measured at amortised cost.
The classification is dependent on the business model adopted for managing the
financial assets and the contractual terms of the cash flows expected to be
derived from the assets.
For assets measured at fair value, gains and losses will either be recorded in
profit or loss or other comprehensive income. For investments in equity
instruments that are not held for trading, this will depend on whether the
Group has made an irrevocable election at the time of initial recognition to
account for the equity investment at fair value through other comprehensive
income.
The Group's financial assets comprise equity instruments and debt instruments
as described below.
Impairment provisions for receivables and loans to related parties are
recognised based on a forward-looking expected credit loss model. The
methodology used to determine the amount of the provision is based on whether
there has been a significant increase in credit risk since initial recognition
of the financial asset. For those where the credit risk has not increased
significantly since initial recognition of the financial asset, twelve month
expected credit losses along with gross interest income are recognised. For
those for which credit risk has increased significantly, lifetime expected
credit losses along with the gross interest income are recognised. For those
that are determined to be credit impaired, lifetime expected credit losses
along with interest income on a net basis are recognised.
Investment in subsidiaries: Investment in subsidiaries, comprising equity
instruments and capital contributions, are recognised initially at cost less
any provision for impairment.
Loans to subsidiaries: Loans to subsidiaries, other than capital
contributions, are held for the collection of contractual cash flows and are
classified as being measured at amortised cost, net of provision for
impairment. Impairment is initially based on the expected lifetime credit loss
as applied to the portfolio of loans. The loans are interest free and have no
fixed repayment terms. As such the loans are assessed as being credit impaired
on inception and lifetime expected credit losses are recognised with the
amount of provision being recognised in the profit or loss.
A loan is fully impaired when the relevant subsidiary recognises an impairment
of its deferred exploration expenditure, such that the subsidiary is not
expected to be able to repay the loan from its existing assets.
Trade and other receivables: Trade and other receivables are held for the
collection of contractual cash flows and are classified as being measured at
amortised cost. They are recognised initially at fair value and subsequently
measured at amortised cost using the effective interest method less provision
for impairment.
Cash and cash equivalents: Cash and cash equivalents include cash on hand and
deposits held at call with banks.
Trade and other payables: Trade and other payables are not interest bearing
and are recognised initially at fair value and subsequently measured at
amortised cost.
Financial liabilities:
• Trade payables and other short-term monetary liabilities are
initially recognised at fair value and subsequently carried at amortised cost
using the effective interest method.
• There are no financial liabilities classified as being
at fair value through profit or loss.
• Borrowings are initially recognised at fair value net
of any transaction costs directly attributable to the issue of the instrument.
Such interest-bearing liabilities are subsequently measured at amortised cost
using the effective interest rate method. Interest expense includes initial
transaction costs and any premium payable on redemption, as well as any
interest or coupon payable while the liability is outstanding.
• Liability components of convertible loan notes are
measured as described further below.
Share capital: The Company's ordinary and deferred shares are classified as
equity.
Warrants: Warrants are stated at their value, which is estimated using a Black
Scholes model where they are not issued as part of a cash transaction.
Taxation
The charge for taxation is based on the profit or loss for the period and
takes into account deferred tax. The Group's liability for current tax is
calculated using tax rates that have been enacted or substantively enacted by
the reporting date. Deferred tax is the tax expected to be payable or
recoverable on differences between the carrying amounts of assets and
liabilities in the Financial Statements and the corresponding tax bases used
in the computation of taxable profit or loss, and is accounted for using the
liability method.
Deferred tax assets are only recognised to the extent that it is probable that
future taxable profit will be available in the foreseeable future against
which the temporary differences can be utilised.
2. ANALYSIS OF SEGMENTAL INFORMATION
The Group currently only has one primary reporting business segment,
exploration and development. The Group exploration assets and investments
along with capital expenditures are presented on this basis below:
2021
£'000
Total assets
Exploration and evaluation 8,259
Current assets 64
Cash 3,269
11,592
Capitalised exploration and evaluation expenditure
Exploration and evaluation - Greenland 475
475
The Group's primary business activities are the exploration projects in
Greenland and its corporate head office in the UK. The split of total assets
and capitalised exploration and evaluation expenditure between these locations
is set out below:
2021
£'000
Total assets
Greenland 8,259
United Kingdom 3,333
11,592
2021
£'000
Capitalised exploration and evaluation expenditure
Greenland 475
United Kingdom -
475
The administrative expenditure in the income statement primarily relates to
central costs.
3. OPERATING LOSS
2021
£'000
This is stated after charging:
Share-based payments charge 39
Auditor's remuneration
- Group audit services 32
- Group taxation advice 6
Administration expenses are made up as follows:
2021
£'000
Staff costs (including share-based payments) 166
Professional fees 70
Office, travel, and other 25
Management fees from parent 44
Total 305
4. DIRECTORS' EMOLUMENTS AND STAFF COSTS
During the period there were six permanent employees, being the Directors (who
are the key management personnel). There were no temporary employees.
Group and Company 2021
£'000
Staff and Directors' Remuneration
Salaries 50
Listing bonus - shares 45
Listing bonus - cash 20
Share based payment charge 39
Pension contributions 1
Total remuneration 155
Social security costs 11
Total cost to Company 166
Average number of employees 6
The average number of employees in the Group and Company is based on the
period from 28 September 2021, when GreenRoc Mining Plc became active. Prior
to this, the Company was not considered active, although the Board consisted
of two Directors (George Frangeskides and Michael Nott) who received no
remuneration during this period.
Salary Bonus Pension Fair Value of options Total
2021 2021 2021 2021 2021
£'000 £'000 £'000 £'000 £'000
Directors
Kirk Adams 19 20 1 16 56
Jim Wynn 7 5 0 4 16
George Frangeskides 9 20 - 16 45
Lars Brünner 5 10 - - 15
Mark Austin 5 - - 3 8
Mark Rachovides 5 10 - - 15
Total 50 65 1 39 155
Upon listing, Kirk Adams and George Frangeskides were awarded 200,000 bonus
shares at a value of 10 pence per share, while Jim Wynn was awarded 50,000
bonus shares at 10 pence a share. Lars Brünner and Mark Rachovides were
awarded cash bonuses of £10k each. These bonuses were compensation for work
undertaken relating to the fundraising and admission process prior to 28
September 2021.
During the period, Kirk Adams was the highest-paid employee, receiving
remuneration totalling £56k as per the table above. There were no employees
other than Directors, whose remunerations is fully disclosed in the above
table.
Other than the bonuses paid at listing, no bonuses were paid to any Directors
in respect of the period to 30 November 2021.
During the period the Company granted share options to the Directors as
follows:
No options Date of grant Exercise price
Kirk Adams 1,500,000 28-Sep-21 £0.10
Jim Wynn 400,000 28-Sep-21 £0.10
George Frangeskides 1,500,000 28-Sep-21 £0.10
Mark Austin 300,000 28-Sep-21 £0.10
Total options at 30 November 2021 3,700,000
The above share options vest after the following periods have elapsed since
the date of grant: 12.5% after 6 months; 12.5% after 9 months; 25% after 12
months; 12.5% after 15 months; 12.5% after 18 months; 12.5% after 21 months;
and 12.5% after 24 months. No share options were exercisable at the period
end.
The total estimated value of the share-based remuneration provided to
Directors was £239k, which will be expensed over the vesting period of each
tranche. These values were derived from a Black Scholes model as described in
note 1.
5. INCOME TAXES
a) Analysis of charge in the period
2021
£'000
United Kingdom corporation tax at 19% -
Deferred taxation -
-
b) Factors affecting tax charge/(credit) for the period
The tax assessed on the loss for the period before tax differs from the
standard rate of corporation tax in the UK which is 19%. The differences are
explained below:
2021
£'000
Loss before tax (306)
Loss multiplied by standard rate of tax 58
Effects of:
Disallowed expenses (7)
Deferred tax assets not recognised (51)
-
A deferred tax asset has not been recognised in respect tax losses and
accelerated capital allowances, due to uncertainty that the potential asset
will be recovered.
A deferred tax liability of £1.0 million was recognised as part of the fair
value accounting for the acquisition of the Alba subsidiaries, representing
the taxation impact of the fair value uplift of the intangible assets
acquired, which would not be an allowable deduction from tax profits in future
periods.
6. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the loss attributed to
ordinary shareholders of £306k by the weighted average number of shares of
27,531,396 in issue during the period. The diluted earnings per share
calculation is identical to that used for basic earnings per share as warrants
are not dilutive due to the losses incurred.
7. INTANGIBLE FIXED ASSETS
Group Amitsoq Thule Black Sands Inglefield Melville Bay Total
£'000 £'000 £'000 £'000 £'000
At incorporation - - - - -
Acquired through business combination (note 1) 3,096 3,715 199 774 7,784
Additions 179 296 - - 475
Net Book Value at 30 November 2021 3,275 4,011 199 774 8,259
No amortisation was recorded in respect of these assets.
8. COMPANY INVESTMENTS IN SUBSIDIARY UNDERTAKINGS
Investments Loans Total
£'000 £'000 £'000
At acquisition 4,017 2,503 6,520
Additions - 318 318
At 30 November 2021 4,017 2,821 6,838
At 30 November 2021 the Company held interests in the issued ordinary share
capital of the following subsidiary undertakings, which are included in the
consolidated Financial Statements and are unlisted:
Name of company Country of incorporation Ownership of ordinary shares Nature of holding Business
Obsidian Mining Limited England & Wales 100% Direct Exploration
White Eagle Resources Limited England & Wales 100% Direct Exploration
White Fox Resources Limited England & Wales 100% Direct Exploration
These companies have their registered office at 6th Floor, 60 Gracechurch
Street, London EC3V 0HR.
9. LOANS TO SUBSIDIARIES
The following amounts were owed by subsidiaries to GreenRoc Mining Plc at 30
November 2021:
Obsidian Mining Ltd White Eagle Resources Ltd White Fox Resources Ltd Total
£'000 £'000 £'000 £'000
Loans to subsidiaries 1,408 1,245 168 2,821
10. TRADE AND OTHER RECEIVABLES
Group Company
Current £'000 £'000
VAT receivable 64 64
64 64
VAT receivable relates to input VAT on supplies during the period, which the
Company expects to recover once its VAT registration is in place.
11. CASH AND CASH EQUIVALENTS
Group Company
£'000 £'000
Cash at bank and in hand 3,269 3,269
The fair value of cash at bank is the same as its carrying value.
12. TRADE AND OTHER PAYABLES
Group Company
Current £'000 £'000
Trade creditors 398 33
Accruals and deferred income 84 32
Loan due to parent entity 52 52
534 117
The fair value of trade and other payables approximates to their book value.
13. CALLED UP SHARE CAPITAL
Number of Share capital Deferred shares Share premium Total
shares
£'000 £'000 £'000 £'000
Allotted, called up and fully paid
Ordinary shares of £0.001 pence 111,200,001 111 - 10,033 10,144
Deferred shares of £0.099 500,000 - 50 - 50
Total 111,700,001 111 50 10,033 10,194
Incorporation
The Company was incorporated on 17 March 2021, with an issued share capital of
£50,000 made up of 5,000,000 ordinary shares of £0.01 ("Old Ord Shares").
On incorporation, the Company issued and allotted 4,999,999 Old Ord Shares of
£0.01 to Alba and 1 Old Ord Share of £0.01 to George Frangeskides. One share
was issued to Mr Frangeskides because of the requirement that a public company
have at least two shareholders.
Share Restructure
On 27 July 2021, Alba and George Frangeskides entered into undertakings to pay
up the issued share capital of the Company; and the Company's ordinary shares
were restructured into new ordinary shares of £0.001 each (being the
"Ordinary Shares") with Alba and George Frangeskides holding 499,990 Ordinary
Shares and 10 Ordinary Shares respectively. This was achieved by the following
steps:
(i) consolidating the 5,000,000 ordinary shares of £0.01 in the
capital of the Company into 500,000 ordinary shares of £0.1 each (the
"Interim Ordinary Shares"); and
(ii) each Interim Ordinary Share then being converted into one
deferred share of £0.099 each (the "Deferred Shares") and one Ordinary Share
of £0.001 each, resulting in 500,000 Deferred Shares and 500,000 Ordinary
Shares.
Allotment of shares for the acquisition of the Greenland subsidiaries
On 22 September 2021, GreenRoc Mining Plc agreed to acquire, conditional upon
Admission, the entire share capital in OML, WER and WFR from Alba (see note
1). The consideration paid by GreenRoc for these shares totalled £6.0
million, in the form of 59.5 million shares in the Company at a value of 10
pence per share, the price at which the shares were admitted to the AIM list
of the London Stock Exchange on 28 September 2021, and £50k in cash.
IPO and Placing in September 2021
On 28 September 2021, the Company was admitted to the AIM Market of the London
Stock Exchange, and at the same time allotted 50,750,000 Ordinary Shares at a
price of 10 pence per share, raising gross proceeds of £5.1 million. Costs
associated with the listing amounted to £0.8 million and the net proceeds
raised were £4.3 million.
Warrant instruments
On 22 September 2021 the Company entered into a warrant Instrument with its
broker, ETX Capital ("ETX"), pursuant to which the Company, conditional upon
Admission, granted warrants over 1,500,000 Ordinary Shares to ETX Capital
("ETX Warrants"). The ETX Warrants are valid until 28 September 2024, and
750,000 have an exercise price of 12.5 pence, while 750,000 have an exercise
price of 15 pence.
On 22 September 2021 the Company entered into a warrant instrument with its
Nominated Adviser, Cairn Financial Advisers LLP ("Cairn"), pursuant to which
the Company, conditional upon Admission, granted warrants over 1,112,000
Ordinary Shares to Cairn ("the Cairn Warrants"). The Cairn Warrants are also
valid until 28 September 2024, and have an exercise price of 10 pence.
The Fair Value of these Warrants was determined based on a Black-Scholes
model, taking into account the period of vesting, the exercise price, the
number of warrants, and market information such as price volatility (for which
the historic volatility of Alba Mineral Resources plc was used). See notes 1
and 4 for further details.
The ETX Warrants were valued at £68k while the Cairn Warrants were valued at
£59k. The total value of £127k was taken against Share Premium as it was
deemed to be a cost of the listing.
Employee bonus shares
Upon listing, the Company allotted 200,000 shares each to George Frangeskides
and Kirk Adams, and 50,000 shares to Jim Wynn, all at 10 pence per share, in
compensation for work undertaken for the Company prior to the IPO.
The movement in shares in issue, share capital, deferred share capital and
share premium during the period is therefore as follows:
Old Ord Shares Ordinary Shares Deferred Shares Share capital Deferred shares Share premium Total
of £0.10 of £0.001 of £0.099 £'000 £'000 £'000 £'000
Incorporation 5,000,000 - - 50 - - 50
Share restructure (5,000,000) 500,000 500,000 (50) 50 - -
Acquisition of subsidiaries - 59,500,001 - 60 - 5,890 5,950
September 2021 placing at IPO - 50,750,000 - 51 - 5,025 5,076
Listing costs - - - - - (800) (800)
Warrants - - (127) (127)
Employee bonus shares - 450,000 - 0 - 45 45
At 30 November 2021 - 111,200,001 500,000 111 50 10,033 10,194
14. RESERVES
The following describes the nature and purpose of certain reserves within
owners' equity:
Share premium Amounts subscribed for share capital in excess of nominal value less costs of
issue.
Share-based payment reserve Amounts charged each period in relation to share options and warrants.
The share-based payment reserve movement of £166k in the period consists of
£39k in respect of the fair value of employee share options, and £127k
relating to the warrants issued as part of the cost of listing. See notes 1
and 13 for further details.
15. CAPITAL COMMITMENTS
As at 30 November 2021, the Company had commitments to spend at least £105k
in calendar year 2022 on its Greenland licences, being in approximate terms
the aggregate minimum expenditure commitments required under the licences
after taking into account expenditures in excess of minimum requirements in
previous years carried forwards.
16. CONTINGENT LIABILITIES
The Company had no contingent liabilities at the end of the period.
17. FINANCIAL INSTRUMENTS
The Group's financial instruments comprise investments, cash at bank, and
various items such as debtors, loans, and creditors. The Group has not entered
into derivative transactions, nor does it trade financial instruments as a
matter of policy.
Credit risk
The Group's credit risk arises primarily from cash at bank, other debtors, and
the risk the counterparty fails to discharge its obligations.
The Company holds its cash with MetroBank Plc whose credit rating is B+.
The Company's credit risk primarily arises from intercompany debtors, and this
is reviewed annually in the course of reviewing the Expected Credit Loss
("ECL") provision required under IFRS 9. At period end, no provision was
deemed necessary in respect of ECL on the basis that the loans to subsidiaries
had recently been taken on, at 28 September 2021. At this point, they had been
revalued at Fair Value, and there were no subsequent events that gave any
indication that the underlying assets would not be able to support the
repayment of the loans in full.
Funding risk
Funding risk is the possibility that the Group might not have access to
the financing it needs. The Group's continued future operations depend on the
ability to raise sufficient working capital through the issue of equity share
capital. The Directors are confident that adequate funding will be forthcoming
with which to finance operations. The Directors have a strong track record of
raising funds as required both as GreenRoc as well as within Alba. Controls
over expenditure are carefully managed and activities planned to ensure that
the Group has sufficient funding.
Liquidity risk
Liquidity risk arises from the management of cash funds and working capital.
The risk is that the Group will fail to meet its financial obligations as they
fall due. The Group operates within the constraints of available funds and
cash flow projections are produced and regularly reviewed by management.
Interest rate risk profile of financial assets
The only financial assets (other than short term debtors) are cash at bank and
in hand, which comprises money at call. The interest earned in the period was
negligible. The Directors believe the fair value of the financial instruments
is not materially different to the book value.
Foreign currency risk
The Group incurs costs denominated in foreign currencies (including Danish
Krone and Euros) which gives rise to short term exchange risk. The Group does
not currently hedge against these exposures as they are deemed immaterial and
there is no material exposure as at the period end.
Market risk
The underlying value of the Group's assets is exposed to the spot price in the
relevant commodities, notably graphite (Amitsoq), ilmenite (TBS), iron ore
(Melville Bay), and gold/copper/cobalt (Inglefield).
Categories of financial instrument
Group Company
2021 2021
£'000 £'000
Financial assets
Held at amortised cost:
Intercompany receivables - 2,821
Trade and other receivables 64 64
64 2,885
Financial liabilities
Loan due to parent entity 52 52
Trade and other payables 398 33
Financial liabilities held at amortised cost 450 85
18. CAPITAL MANAGEMENT
The Group's objective when managing capital is to safeguard the entity's
ability to continue as a going concern and develop its mining and exploration
activities to provide returns for shareholders. The Group's funding to date
has been comprised of equity. The Directors consider the Company's capital and
reserves to be capital. When considering the future capital requirements of
the Group and the potential to fund specific project development via debt, the
Directors consider the risk characteristics of all the underlying assets in
assessing the optimal capital structure.
19. RELATED PARTY TRANSACTIONS
Company
Transactions between the Company and its subsidiaries, which are related
parties of the Company, have been eliminated on consolidation. The loan
balances and transactions in the period with the subsidiaries are disclosed in
note 9. Details of transactions between the Company and other related parties
are disclosed below.
Group
Alba Mineral Resources Plc, which owns 54% of the Company's issued shares,
charged fees for services in the period amounting to £44k. These fees were
calculated in accordance with the terms of the Services Agreement between the
Company and Alba signed in September 2021, and relate to finance, management,
technical and other professional activities, as well as the pass-through of
certain costs settled by Alba on behalf of GreenRoc (for example travel
expenditures for the Greenland field trips undertaken in October and November
2021). These charges were at arm's-length rates.
The Financial Statements for Alba are available on their website at
www.albamineralresources.com (http://www.albamineralresources.com) .
20. EVENTS AFTER THE REPORTING PERIOD
On 8 March 2022, the Company announced a Maiden JORC Resource in respect of
its Amitsoq deposit in the amount of 8.3 million tonnes of Indicated and
Inferred Resources at an average grade of 19.75% graphitic carbon. See the
CEO's Statement for further details.
There were no other significant post-balance sheet events.
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