REG - GreenX Metals Ltd - Half-Year Accounts
15/03/2024 07:00
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RNS Number : 9757G GreenX Metals Limited 15 March 2024
GreenX Metals Limited
Interim Financial Report for the Half-Year Ended 31 December 2023
ABN 23 008 677 852
CORPORATE DIRECTORY
DIRECTORS: BANKERS:
Mr Ian Middlemas Chairman
Mr Benjamin Stoikovich Director and CEO National Australia Bank Ltd
Mr Garry Hemming Non-Executive Director
Australia and New Zealand Banking Group Ltd
Mr Mark Pearce Non-Executive
Director
Mr Dylan Browne Company Secretary SHARE REGISTRIES:
Australia:
PRINCIPAL OFFICES: Computershare Investor Services Pty Ltd
London:
Level 17, 221 St Georges Terrace
Unit 3C, 38 Jermyn Street
Perth WA 6000
London SW1Y 6DN
Tel: +61 8 9323 2000
United Kingdom
Tel: +44 207 487 3900
United Kingdom:
Computershare Investor Services PLC
The Pavilions, Bridgewater Road
Australia (Registered Office):
Bristol BS99 6ZZ
Level 9, 28 The Esplanade
Tel: +44 370 702 0000
Perth WA 6000
Tel: +61 8 9322 6322
Fax: +61 8 9322 6558
Poland:
Komisja Nadzoru Finansowego (KNF)
Plac Powstańców Warszawy 1, skr. poczt. 419
Greenland:
00-950 Warszawa
Tel: +48 22 262 50 00
ARC Joint Venture Company ApS
c/o Nuna Advokater
Box 59
Qulilerfik 2, 6. STOCK EXCHANGE LISTINGS:
3900 Nuuk
Australia:
Australian Securities Exchange - ASX Code: GRX
SOLICITORS:
Thomson Geer
United Kingdom:
London Stock Exchange (Main Board) - LSE Code: GRX
AUDITOR:
UHY Haines Norton - Sydney
Poland:
Warsaw Stock Exchange - GPW Code: GRX
CONTENTS
Selected Financial Data
Directors' Report
Directors' Declaration
Consolidated Statement of Profit or Loss and other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Condensed Notes to the Consolidated Financial Statements
Auditor's Independence Declaration
Independent Auditor's Review Report
SELECTED FINANCIAL DATA (CONVERTED INTO PLN AND EUR)
Half-Year Ended Half-Year Ended Half-Year Ended Half-Year Ended
31 December 2023
31 December 2022
31 December 2023
31 December 2022
PLN
PLN
EUR
EUR
Arbitration finance facility income 1,088,623 15,028,789 244,981 3,174,012
Gas and property lease revenue 7,193 418,291 1,619 88,341
Exploration and evaluation expenses (1,253,279) (2,093,485) (282,035) (442,135)
Arbitration related expenses (1,599,361) (15,137,985) (359,916) (3,197,074)
Net loss for the period (5,372,179) (4,488,239) (1,208,943) (947,896)
Net cash flows from operating activities (3,885,394) (4,264,524) (874,360) (900,648)
Net cash flows from investing activities (4,737,288) (10,072,066) (1,066,068) (2,127,175)
Net cash flows from financing activities (429,445) 3,267,631 (96,641) 690,109
Net increase in cash and cash equivalents (9,052,127) (11,068,959) (2,037,070) (2,337,714)
Basic and diluted loss per share (Grosz/EUR cents per share) (1.97) (1.73) (0.44) (0.37)
31 December 2023 30 June 2023 31 December 2023 30 June 2023
PLN
PLN
EUR
EUR
Cash and cash equivalents 24,952,597 23,572,705 5,738,868 5,296,880
Total Assets 52,464,610 48,746,541 12,066,378 10,953,540
Total Liabilities (4,944,625) 6,024,909 (1,137,218) 1,353,821
Net Assets 47,519,985 42,721,632 10,929,159 9,599,720
Contributed equity 241,744,490 216,970,230 54,401,623 51,912,177
Figures of the consolidated statement of profit or loss and other
comprehensive income and consolidated statement of cash flows have been
converted into PLN and EUR by applying the arithmetic average for the final
day of each month for the reporting period, as published by the National Bank
of Poland (NBP). These exchange rates were 2.6889 AUD:PLN and 4.4437 PLN:EUR
for the six months ended 31 December 2023, and 3.1337 AUD:PLN and 4.7350
PLN:EUR for the six months ended 31 December 2022.
Assets and liabilities in the consolidated statement of financial position
have been converted into PLN and EUR by applying the exchange rate on the
final day of each respective reporting period as published by the NBP. These
exchange rates were: 2.6778 AUD:PLN and 4.3480 PLN:EUR on 31 December 2023,
and 2.7174 AUD:PLN and 4.4503 PLN:EUR on 30 June 2023.
DIRECTORS REPORT
The Directors of GreenX Metals Limited present their report on the
Consolidated Entity consisting of GreenX Metals Limited (Company or GreenX)
and the entities it controlled during the half-year ended 31 December 2023
(Consolidated Entity or Group).
DIRECTORS
The names and details of the Company's Directors in office at any time during
the half-year and until the date of this report are:
Directors:
Mr Ian Middlemas Chairman
Mr Benjamin Stoikovich Director and CEO
Mr Garry Hemming Non-Executive
Director
Mr Mark Pearce
Non-Executive Director
Unless otherwise shown, all Directors were in office from the beginning of the
half-year until the date of this report.
OPERATING AND FINANCIAL REVIEW
Operations
Highlights:
· In July 2023 GreenX entered into an Option Agreement with
Greenfields Exploration Limited (Greenfields) to acquire up to 100% of the
Eleonore North Gold Project (Eleonore North or ELN) in eastern Greenland.
o 2023 field work at Eleonore North was focused on determining the depth of
an intrusion within the project area by deployment of an array of seismic
nodes. The nodes have been retrieved with the recorded data now being
processed by a geophysics specialist consulting firm.
o During the period, GreenX visited the Geological Survey of Denmark and
Greenland in Copenhagen and discussed general co-operation and data sharing in
respect of the Eleonore North region. GreenX also met with specialised arctic
logistics service providers having extensive experience in East Greenland.
o Eleonore North has the potential to host a "reduced intrusion-related gold
system" (RIRGS), analogous to large bulk-tonnage deposit types found in
Canada.
· In November 2022, the hearing for the claim against the
Republic of Poland under both the Energy Charter Treaty and the
Australia-Poland Bilateral Investment Treaty was concluded (Claim).
o Combined arbitration hearing took place in front of the Tribunal in London
under the UNCITRAL Arbitration Rules.
o With completion of the hearing, the Tribunal will render an Award
(decision) in due course.
o Damages of up to £737 million (A$1.3 billion / PLN4.0 billion) have been
claimed including the assessed value of GreenX's lost profits and damages
related to both the Jan Karski and Debiensko projects, and accrued interest
related to any damages.
· Cash balance as at 31 December 2023 was A$9.3 million.
Arctic Rift Copper Project
The Arctic Rift Copper Project (ARC) is an exploration joint venture between
GreenX and Greenfields. ARC is targeting large scale copper in multiple
settings across a 5,774 km(2) Special Exploration Licence in eastern North
Greenland. The area has been historically underexplored yet is prospective for
copper, forming part of the newly identified Kiffaanngissuseq metallogenic
province.
The results of the work program announced last year have demonstrated the
high-grade nature of the known copper sulphide mineralisation and wider copper
mineralisation in fault hosted Black Earth zones and adjacent sandstone units.
The exact position of a native copper fissure at the Neergaard Dal prospect
was also identified.
The Company is in the process of analysing further remote-sensing options for
ARC, which would be used to supplement current understanding of the known
copper sulphide mineralisation and refine plans for the next exploration
program.
Figure 1: Map of Greenland showing GreenX's ARC and Eleonore North license
areas
Eleonore North Gold Project
In July 2023, GreenX entered into an Option Agreement (Agreement) with
Greenfields to acquire up to 100% of Eleonore North in eastern Greenland.
Eleonore North has the potential to host a RIRGS, analogous to large
bulk-tonnage deposit types found in Canada including Donlin Creek, Fort Knox
and Dublin Gulch.
Gold indicators documented at the high-priority Noa Pluton prospect within
Eleonore North include:
· Geophysical "bullseye" anomaly 6 km wide co-incident with
elevated gold mineralisation from historical geochemical sampling.
· Anomalous gold mineralisation associated with quartz veining
exposed at surface over a length of up to 15 km.
· Historical sampling includes 4 m chip sample grading 1.93 g/t Au
and 1.9% Sb (refer to Appendix 1 of the Company's announcement on 10 July
2023).
Eleonore North has potential to host large scale, shallow, bulk tonnage gold
deposits. Eleonore North remains underexplored, with the existence of a
possible RIRGS being a relatively new geological interpretation based on the
historical data. Initial field work consists of a seismic survey to determine
the depth from surface to the Noa Pluton to aid in drill targeting.
Figure 2: Eleonore North licence area showing the 6km diameter geophysical
anomaly co-incident with gold veining visible at surface over some 15km at the
high priority Noa Pluton prospect
The Eleonore North license area contains other gold targets as well as copper,
antimony and tungsten prospects. At Holmesø there is copper and antimony
mineralisation outcropping at surface. Historical mapping and sampling in the
1970s at Holmesø show a prospective horizon between 15 m and 20 m thick, with
per cent level grades for both metals.
Eleonore North provides GreenX with gold exposure in Greenland and complements
GreenX's existing exploration prospect in Greenland, the Arctic Rift Copper
Project (ARC). There are significant synergies with regards to personnel,
logistics and equipment in having multiple exploration projects in Greenland.
Field works were conducted during the 2023 field season at Eleonore North,
with data collected from the seismic survey presently being analysed to inform
follow-on exploration program design. Results from the seismic analysis are
expected in the coming months.
Greenland is a mining friendly jurisdiction with strong Government support for
expanding its mining industry, simple laws and regulations, and a competitive
fiscal regime.
The primary target in Eleonore North is the Noa Pluton, followed by the
Holmesø prospect and its source intrusion. The Noa Veins provide a
near-term drill target, however, the Company's 2023 field work was focussed on
determining the depth of the causative intrusion with greater precision using
a passive seismic survey. Once analysed, this information will assist with the
magnetic interpretation, provide more certainty for a future exploration
program, and help identify the size of the intrusion within the well-defined
hornfels.
Figure 3: Map showing prospects and geological features within the Eleonore
North license areas
Dispute with the Polish Government
In November 2022, the Company reported the conclusion of the Claim against the
Republic of Poland under both the Energy Charter Treaty (ECT) and the
Australia-Poland Bilateral Investment Treaty (BIT) (together the Treaties).
The hearing took place in London and lasted two weeks.
Following completion of the hearing, the Tribunal will render an Award (i.e.,
the legal term used for a 'decision' by the Tribunal) in due course with no
specified date available for the Tribunal decision.
As previously advised, the arbitration and hearing proceedings in relation to
the Claim are required to be kept confidential.
Details of the Claim
The Company's Claim against the Republic of Poland is being prosecuted through
an established and enforceable legal framework, with GreenX and Poland
agreeing to apply the United Nations Commission on International Trade Law
Rules (UNCITRAL) rules to the proceedings. The arbitration claims are being
administered through the Permanent Court of Arbitration in the Hague.
The evidentiary hearing phase of the arbitration proceedings has now been
completed in front of the Arbitral Tribunal. With completion of the hearing,
the Arbitral Tribunal will render an Award in due course. There is no
specified date for an Award to be rendered. The Company's claims for damages
against Poland are in the amount of up to £737 million (A$1.3 billion/PLN4.0
billion), which includes a revised assessment of the value of GreenX's lost
profits and damages related to both the Jan Karski and Debiensko projects, and
accrued interest related to any damages. The Claim for damages has been
assessed by independent external quantum experts appointed by GreenX
specifically for the purposes of the Claim.
In February 2019, GreenX formally notified the Polish Government that there
exists an investment dispute between GreenX and the Polish Government.
GreenX's notification called for prompt negotiations with the Government to
amicably resolve the dispute and indicated GreenX's right to submit the
dispute to international arbitration in the event of the dispute not being
resolved amicably.
In July 2020, the Company announced it had executed a litigation funding
agreement (LFA) for US$12.3 million with Litigation Capital Management (LCM).
US$10.7 million of the facility has been drawn down to cover legal, tribunal
and external expert costs as well as defined operating expenses associated
with the Claim. The Company does not anticipate further material drawdowns in
relation to the ongoing BIT and ECT Tribunal proceedings. The LFA is a limited
recourse loan with LCM that is on a "no win - no fee" basis.
In September 2020, GreenX announced that it had formally commenced with the
Claim by serving the Notices of Arbitration against the Republic of Poland. In
June 2021, GreenX announced that it had formally lodged its Statement of Claim
in the BIT arbitration, including the first assessed claim for compensation.
The Company's Statement of Reply, the last material filing to be made by the
Company for the BIT arbitration proceedings, was submitted in July 2021. The
Statement of Reply addresses various points raised by the Republic of Poland
in its Statement of Defence. The Statement of Reply also contains a
re-evaluation of the claim for damages based on responses to Poland's
Statement of Defence.
GreenX's dispute alleges that the Republic of Poland has breached its
obligations under the applicable Treaties through its actions to block the
development of the Company's Jan Karski and Debiensko projects in Poland which
effectively deprived GreenX of the entire value of its investments in Poland.
CORPORATE
Share Placing
In July 2023, the Company successfully completed a placing of 5.2 million new
ordinary shares at a price of A$0.80 (41 pence) per share to raise gross
proceeds of approximately A$4.2 million (~£2.1 million) from new and existing
investors.
The net proceeds from the placing will be used for exploration activities at
the Company's projects in Greenland and to ensure that GreenX retains its
strong balance sheet position.
Financial Position
GreenX had cash of A$9.3 million as at 31 December 2023.
Results of Operations
The net loss of the Consolidated Entity for the half-year ended 31 December
2023 was $1,997,911 (31 December 2022: $1,432,272 ). Significant items
contributing to the current half-year loss and the substantial differences
from the previous half-year include to the following:
(i) Arbitration related expenses of $594,802 (31 December
2022: $4,830,784) relating to the Claim against the Republic of Poland. This
has been offset by the arbitration funding income of $404,858 (31 December
2022: $4,795,937);
(ii) Exploration and evaluation expenses of $466,094 (31
December 2022: $298,378), which is attributable to the Group's accounting
policy of expensing exploration and evaluation expenditure incurred by the
Group subsequent to the acquisition of rights to explore and up to the
commencement of a bankable feasibility study for each separate area of
interest;
(iii) Business development expenses of $195,882 (31 December 2022:
$132,578) which includes expenses relating to the Group's review of new
business and project opportunities plus also investor relations activities
during the six months to 31 December 2023 including public relations, digital
marketing, legal related expenses and business development consultant costs;
and
(iv) Revenue of $252,221 (31 December 2022: $161,385) consisting
of interest income of $249,546 (31 December 2022: $27,901) and the receipt of
$ 2,675 (31 December 2022: $133,484) of gas and property lease income derived
at Debiensko.
Financial Position
At 31 December 2023, the Group had cash reserves of $9,318,320 (30 June 2023:
$8,674,728) placing it in a good financial position to continue with
exploration activities at in Greenland as well as pursuing business
development activities.
At 31 December 2023, the Company had net assets of $17,745,904 (30 June 2023:
$15,721,510) an increase of approximately 11% compared with 30 June 2023.
This is largely attributable to the increase in exploration and evaluation
assets which amounts to A$8,984,599 (30 June 2023: $7,750,883).
Business Strategies and Prospects for Future Financial Years
GreenX's strategy is to create long-term shareholder value through the
discovery, exploration, development and acquisition of technically and
economically viable mineral deposits. This also includes pursuing the Claim
against the Republic of Poland through international arbitration in the short
to medium term.
To date, the Group has not commenced production of any minerals, nor has it
identified any Ore reserves in accordance with the JORC Code. To achieve its
objective, the Group currently has the following business strategies and
prospects over the medium to long term:
· Continue to enforce its rights through an established and
enforceable legal framework in relation to international arbitration for the
investment dispute between GreenX and the Polish Government that has arisen
out of certain measures taken by Poland in breach of the Treaties;
· Identify and assess other suitable business opportunities in
the resources sector; and
· Continue with current exploration activities in Greenland for
minerals, including for copper and gold.
All of these activities are inherently risky and the Board is unable to
provide certainty of the expected results of these activities, or that any or
all of these likely activities will be achieved. Furthermore, GreenX will
continue to take all necessary actions to preserve the Company's rights and
protect its investments in Poland, if and as required. The material business
risks faced by the Group that could have an effect on the Group's future
prospects, and how the Group manages these risks, include the following:
· Litigation risk - All industries, including the mining
industry, are subject to legal and arbitration claims. Specifically, and as
noted above, the Company is continuing with its Claim against the Republic of
Poland, and will strongly defend its position and will continue to take all
relevant actions to pursue its legal rights in the Claim process. In November
2022, the hearing for the Claim was completed with the Tribunal to render an
Award (i.e., a decision) in due course with no specified date available for
the Tribunal decision. There is however no certainty that the Claim will be
successful. If the Claim is unsuccessful, then this may have a material impact
on the value of the Company's securities.
· Earn-in and joint venture contractual risk - The Company's
earn-in right to the ARC project is subject to the EIA with Greenfields as
announced in October 2021. The Company's ability to achieve its objectives is
dependent on it and other parties complying with their obligations under the
EIA. Any failure to comply with these obligations may result in the Company
not obtaining its interests in ARC and being unable to achieve its commercial
objectives, which may have a material adverse effect on the Company's
operations and the performance and value of the Shares. There is also the risk
of disputes arising with the Company's joint venture partner, Greenfields, the
resolution of which could lead to delays in the Company's proposed development
activities or financial loss.
When the Company earns in its interest in ARC, an incorporated joint venture
will be established between the Company and Greenfields. The nature of the
joint venture may change in future, including the ownership structure and
voting rights in relation to ARC, which may have an effect on the ability of
the Company to influence decisions on ARC.
With regards to the Option Agreement for ELN, it should be noted that the
Option Agreement is subject to a number of conditions precedent including the
payment of the option fee by the Company and there is a risk that the
transaction may not complete and the Company will not acquire the ELN project.
· Operations in overseas jurisdictions risk - ELN and ARC are
located in Greenland, and as such, the operations of the Company will be
exposed to related risks and uncertainties associated with the country,
regional and local jurisdictions. Opposition to the projects, or changes in
local community support for the projects, along with any changes in mining or
investment policies or in political attitude in Greenland and, in particular
to the mining, processing or use of copper, may adversely affect the
operations, delay or impact the approval process or conditions imposed,
increase exploration and development costs, or reduce profitability of the
Company. Moreover, logistical difficulties may arise due to the assets being
located overseas such as the incurring of additional costs with respect to
overseeing and managing the projects, including expenses associated with
taking advice in relation to the application of local laws as well as the cost
of establishing a local presence in Greenland. Fluctuations in the currency of
Greenland may also affect the dealings and operations of the Company.
Failure to comply strictly with applicable laws, regulations and local
practices relating to mineral rights applications and tenure, could result in
loss, reduction or expropriation of entitlements, or the imposition of
additional local or foreign parties as joint venture partners with carried or
other interests. Further, the outcomes in courts in Greenland may be less
predictable than in Australia, which could affect the enforceability of
contracts entered into by the Company.
The projects are remotely located in an area that has an arctic climate and
that is categorised as an arctic desert, and as such, the operations of the
Company will be exposed to related risks and uncertainties of arctic
exploration, including adverse weather or ice conditions which may and has
prevented access to the projects, which can impact exploration and field
activities or generate unexpected costs. It is not possible for the Company to
predict or protect the Company against all such risks.
The Company also had previous operations in Poland which may be subject to
regulations concerning protection of the environment, including at the
Debiensko and Kaczyce projects which have both been relinquished by the
Company. As with all exploration projects and mining operations, activities
will have an impact on the environment including the possible requirement to
make good any disturbed or damaged land.
Existing and possible future environmental protection legislation, regulations
and actions could cause additional expense, capital expenditures and
restrictions, the extent of which cannot be predicted which could have a
material adverse effect on the Company's business, financial condition and
results of operations.
· The Group's exploration and development activities will
require further capital - The exploration and any development of the Company's
exploration properties will require substantial additional financing. Failure
to obtain sufficient financing may result in delaying or indefinite
postponement of exploration and any development of the Company's properties or
even a loss of property interest. There can be no assurance that additional
capital or other types of financing will be available if needed or that, if
available, the terms of such financing will be favourable to the Company.
· The Group's exploration properties may never be brought into
production - The exploration for, and development of, mineral deposits
involves a high degree of risk. Few properties which are explored are
ultimately developed into producing mines. To mitigate this risk, the Company
will undertake systematic and staged exploration and testing programs on its
mineral properties and, subject to the results of these exploration programs,
the Company will then progressively undertake a number of technical and
economic studies with respect to its projects prior to making a decision to
mine. However, there can be no guarantee that the studies will confirm the
technical and economic viability of the Company's mineral properties or that
the properties will be successfully brought into production.
· The Group may be adversely affected by fluctuations in
mineral prices - The price of gold and copper fluctuates widely and is
affected by numerous factors beyond the control of the Group. Future
production, if any, from the Group's mineral properties will be dependent upon
gold and copper prices being adequate to make these properties economic. The
Group currently does not engage in any hedging or derivative transactions to
manage commodity price risk. As the Group's operations change, this policy
will be reviewed periodically going forward.
· The Group may be adversely affected by competition within the
mineral industry - The Group competes with other domestic and international
copper companies, some of whom have larger financial and operating resources.
Increased competition could lead to higher supply or lower overall pricing.
There can be no assurance that the Company will not be materially impacted by
increased competition. In addition, the Group is continuing to secure
additional surface and mineral rights, however there can be no guarantee that
the Group will secure additional surface and mineral rights, which could
impact on the results of the Group's operations.
· The Company may be adversely affected by fluctuations in
foreign exchange - Current and planned activities are predominantly
denominated in Sterling, Danish krone and/or Euros and the Company's ability
to fund these activates may be adversely affected if the Australian dollar
continues to fall against these currencies. The Company currently does not
engage in any hedging or derivative transactions to manage foreign exchange
risk. As the Company's operations change, this policy will be reviewed
periodically going forward.
RELATED PARTY DISCLOSURE
Balances and transactions between the Company and its subsidiaries, which are
related parties to the Company, have been eliminated on consolidation. There
have been no other transactions with related parties during the half-year
ended 31 December 2023, other than remuneration for Key Management Personnel
and payments of $170,000 (31 December 2022: $144,000) to Apollo Group Pty Ltd,
a Company of which Mr Mark Pearce is a Director and beneficial shareholder,
for the provision of serviced office facilities and administration services.
The amount is based on a monthly retainer due and payable in advance, with no
fixed term, and is able to be terminated by either party with one month's
notice. This item has been recognised as an expense in the Statement of Profit
or Loss and other Comprehensive Income.
SUBSTANTIAL SHAREHOLDERS (shareholder with voting power of at least 5%)
Substantial Shareholder notices have been received by the following:
Substantial Shareholder Number of Shares/Votes Voting Power
CD Capital Natural Resources Fund III LP 44,776,120 16.4%
ORDINARY SHARES HELD BY DIRECTORS'
At the Date of this Report 31 December 2023 30 June 2023
Mr Ian Middlemas 11,660,000 11,660,000 11,660,000
Mr Benjamin Stoikovich 819,406 819,406 1,492,262
Mr Garry Hemming - - -
Mr Mark Pearce 2,850,000 2,850,000 3,300,000
SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD
There were no significant events occurring after balance date requiring
disclosure.
AUDITOR'S INDEPENDENCE DECLARATION
Section 307C of the Corporations Act 2001 requires our auditors, Ernst and
Young, to provide the Directors of GreenX Metals Limited with an Independence
Declaration in relation to the review of the half-year financial report. This
Independence Declaration is on page 19 and forms part of this Directors'
Report.
Signed in accordance with a resolution of the Directors.
BEN STOIKOVICH
Director
13 March 2024
Competent Persons Statement
The information in this report that relates to exploration results were
extracted from the ASX announcement dated 10 July 2023 which is available to
view at www.greenxmetals.com (http://www.greenxmetals.com) .
GreenX confirms that (a) it is not aware of any new information or data that
materially affects the information included in the original announcement; (b)
all material assumptions and technical parameters underpinning the content in
the relevant announcement continue to apply and have not materially changed;
and (c) the form and context in which the Competent Person's findings are
presented have not been materially modified from the original announcement
Forward Looking Statements
This release may include forward-looking statements. These forward-looking
statements are based on GreenX's expectations and beliefs concerning future
events. Forward looking statements are necessarily subject to risks,
uncertainties and other factors, many of which are outside the control of
GreenX, which could cause actual results to differ materially from such
statements. GreenX makes no undertaking to subsequently update or revise the
forward-looking statements made in this release, to reflect the circumstances
or events after the date of that release.
DIRECTORS' DECLARATION
In accordance with a resolution of the Directors of GreenX Metals Limited, I
state that:
In the reasonable opinion of the Directors and to the best of their knowledge:
(a) the attached financial statements and notes thereto for the
period ended 31 December 2023 are in accordance with the Corporations Act
2001, including:
(i) complying with Accounting Standard AASB 134 Interim
Financial Reporting and the Corporations Regulations 2001; and
(ii) giving a true and fair view of the financial position of
the Group as at 31 December 2023 and of its performance for the half-year
ended on that date; and
(b) The Directors Report, which includes the Operating and
Financial Review, includes a fair review of:
(i) important events during the first six months of the current
financial year and their impact on the half-year financial statements, and a
description of the principal risks and uncertainties for the remaining six
months of the year; and
(ii) related party transactions that have taken place in the first six
months of the current financial year and that have materially affected the
financial position or performance of the Group during that period, and any
changes in the related party transactions described in the last annual report
that could have such a material effect; and
(c) there are reasonable grounds to believe that the Company
will be able to pay its debts as and when they become due and payable.
On behalf of the Board
BEN STOIKOVICH
Director
13 March 2024
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE HALF-YEAR ENDED 31 DECEMBER 2023
Note Half-Year Ended Half-Year Ended
31 December 2023
31 December 2022
$
$
Revenue 4(a) 252,221 161,385
Other income 4(b) 404,858 4,795,937
Exploration and evaluation expenses (466,094) (298,378)
Employment expenses (660,233) (553,444)
Administration and corporate expenses (263,358) (167,031)
Occupancy expenses (447,045) (419,887)
Share-based payment expense (42,341) -
Business development expenses (195,882) (132,578)
Arbitration related expenses (594,802) (4,830,784)
Other 14,765 12,508
Loss before income tax (1,997,911) (1,432,272)
Income tax expense - -
Net loss for the period (1,997,911) (1,432,272)
Net loss attributable to members of GreenX Metals Limited (1,997,911) (1,432,272)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations (7,127) (50,479)
Total other comprehensive loss for the period (7,127) (50,479)
Total comprehensive loss for the period (2,005,038) (1,482,751)
Total comprehensive loss attributable to members of GreenX Metals Limited (2,005,038) (1,482,751)
Basic and diluted loss per share (cents per share) (0.73) (0.55)
The above Consolidated Statement of Profit or Loss and other Comprehensive
Income should be read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
Note 31 December 2023 30 June 2023
$
$
ASSETS
Current Assets
Cash and cash equivalents 9,318,320 8,674,728
Trade and other receivables 5 262,834 203,552
Total Current Assets 9,581,154 8,878,280
Non-Current Assets
Exploration and evaluation assets 6 8,984,599 7,750,883
Property, plant and equipment 7 838,064 1,119,212
Other 188,614 190,295
Total Non-Current Assets 10,011,277 9,060,390
TOTAL ASSETS 19,592,431 17,938,670
LIABILITIES
Current Liabilities
Trade and other payables 754,616 973,564
Other financial liabilities 8(a) 285,006 281,443
Provisions 9(a) 458,086 450,857
Total Current Liabilities 1,497,708 1,705,864
Non-Current Liabilities
Other financial liabilities 8(b) 152,954 300,897
Provisions 9(b) 195,865 210,399
Total Non-Current Liabilities 348,819 511,296
TOTAL LIABILITIES 1,846,527 2,217,160
NET ASSETS 17,745,904 15,721,510
EQUITY
Contributed equity 10 89,969,344 85,917,513
Reserves 11 10,950,676 10,980,202
Accumulated losses (83,174,116) (81,176,205)
TOTAL EQUITY 17,745,904 15,721,510
The above Consolidated Statement of Financial Position should be read in
conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE HALF-YEAR ENDED 31 DECEMBER 2023
Contributed Equity Share-based Payments Reserve Foreign Currency Translation Reserve Other Equity Accumulated Losses Total
Equity
$ $ $ $ $ $
Balance at 1 July 2023 85,917,513 4,583,192 189,517 6,207,493 (81,176,205) 15,721,510
Net loss for the period - - - - (1,997,911) (1,997,911)
Other comprehensive income for the half-year
Exchange differences on translation of foreign operations - - (7,127) - - (7,127)
Total comprehensive loss for the period - - (7,127) - (1,997,911) (2,005,038)
Issue of shares 4,163,600 - - - - 4,163,600
Share issue costs (176,509) - - - - (176,509)
Transfer from share-based payment reserve 64,740 (64,740) - - - -
Recognition of share-based payments - 42,341 - - - 42,341
Balance at 31 December 2023 89,969,344 4,560,793 182,390 6,207,493 (83,174,116) 17,745,904
Balance at 1 July 2022 78,410,052 4,558,339 287,891 6,207,493 (77,651,359) 11,812,416
Net loss for the period - - - - (1,432,272) (1,432,272)
Other comprehensive income for the half-year
Exchange differences on translation of foreign operations - - (50,479) - - (50,479)
Total comprehensive loss for the period - - (50,479) - (1,432,272) (1,482,751)
Balance at 31 December 2022 78,410,052 4,558,339 237,412 6,207,493 (79,083,631) 10,329,665
The above Consolidated Statement of Changes in Equity should be read in
conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE HALF-YEAR ENDED 31 DECEMBER 2023
Half-Year Ended Half-Year Ended
31 December 2023
31 December 2022
$
$
Cash flows from operating activities
Payments to suppliers and employees (2,139,190) (1,481,931)
Proceeds from property lease and gas sales 2,675 92,114
Interest revenue from third parties 254,435 28,936
Net cash outflow from operating activities (1,882,080) (1,360,881)
Cash flows from investing activities
Payments for property, plant and equipment (2,244) -
Payments for arbitration related expenses - (1,316,530)
Payments for exploration and expenditure (1,322,446) (1,897,634)
Net cash outflow from investing activities (1,324,690) (3,214,164)
Cash flows from financing activities
Proceeds from issue of shares 4,163,600 -
Payments for share issue costs (153,528) -
Receipts from arbitration funding - 1,187,056
Payments for lease liabilities (159,710) (144,300)
Net cash inflow from financing activities 3,850,362 1,042,756
Net increase/(decrease) in cash and cash equivalents 643,592 (3,532,289)
Cash and cash equivalents at the beginning of the period 8,674,728 6,106,847
Cash and cash equivalents at the end of the period 9,318,320 2,574,558
The above Consolidated Statement of Cash Flows should be read in conjunction
with the accompanying notes.
CONDENSED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE HALF-YEAR ENDED 31 DECEMBER 2023
1. SUMMARY OF MATERIAL ACCOUNTING POLICIES
(a) Statement of Compliance
The interim consolidated financial statements of the Group for the half-year
ended 31 December 2023 were authorised for issue in accordance with the
resolution of the Directors.
This general purpose financial report for the interim half-year reporting
period ended 31 December 2023 has been prepared in accordance with Accounting
Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001.
This interim financial report does not include all the notes of the type
normally included in an annual financial report. Accordingly, this report is
to be read in conjunction with the annual report of GreenX Metals Limited for
the year ended 30 June 2023 and any public announcements made by the Company
and its controlled entities during the interim reporting period in accordance
with the continuous disclosure requirements of the Corporations Act 2001.
2. BASIS OF PREPARATION AND CHANGES TO THE GROUP'S ACCOUNTING POLICIES
(a) Basis of Preparation of Half-Year Financial Report
The consolidated financial statements have been prepared on the basis of
historical cost. Cost is based on the fair values of the consideration given
in exchange for assets. All amounts are presented in Australian dollars. The
financial statements have been prepared on the going concern basis, which
contemplates the continuity of normal business activity and the realisation of
assets and the settlement of liabilities in the normal course of business.
The Group has updated the classification of expenses to make the Statement of
Profit or Loss and other Comprehensive Income more relevant to users of the
financial report. This has resulted in the reclassification of some items in
the prior period, however, has not impacted the reported loss for the period.
The Group has also updated the classification of the Ordinary Shares relating
to the calculation for basic and diluted earnings per share (EPS) for the
prior period, this has resulted in an updated EPS. The update was made to
ensure EPS is more relevant to users of the financial report.
(b) New Standards, interpretations and amendments thereof, adopted by the Group
The accounting policies and methods of computation adopted in the preparation
of the consolidated half-year financial report are consistent with those
adopted and disclosed in the company's annual financial report for the year
ended 30 June 2023 and the comparative interim period, other than as detailed
below.
In the current period, the Group has adopted all of the new and revised
Standards and Interpretations issued by the Australian Accounting Standards
Board (the AASB) that are relevant to its operations and effective for annual
reporting periods beginning on or after 1 July 2023.
New and revised Standards and amendments thereof and Interpretations effective
for the current half-year that are relevant to the Group include:
· AASB 2020-3 Amendment to AASB 9 - Test for
Derecognition of Financial Liabilities
· Conceptual Framework and Financial Reporting
The Group has not early adopted any other standard, interpretation or
amendment that has been issued but is not yet effective.
(c) Issued standards and interpretations not early adopted
Australian Accounting Standards and Interpretations that have recently been
issued or amended but are not yet effective have not been adopted by the
Company for the reporting period ended 31 December 2023. Those which may be
relevant to the Company are set out in the table below, but these are not
expected to have any significant impact on the Company's financial statements:
Standard/Interpretation Application Date of Standard Application Date for Company
AASB 2020-1 Amendments to Australian Accounting Standards - Classification of 1 January 2024 1 July 2024
Liabilities as Current or Non-Current
AASB 2021-7(a-c) Amendments to Australian Accounting Standards - Effective 1 January 2025 1 July 2025
Date of Amendments to AASB 10 and AASB 128 and Editorial Corrections
3. SEGMENT INFORMATION
AASB 8 requires operating segments to be identified on the basis of internal
reports about components of the Consolidated Entity that are regularly
reviewed by the chief operating decision maker in order to allocate resources
to the segment and to assess its performance.
The Consolidated Entity operates in one segment, being mineral exploration.
This is the basis on which internal reports are provided to the Chief
Executive Officer for assessing performance and determining the allocation of
resources within the Consolidated Entity.
Half-Year ended 31 December 2023 Half-Year ended
$
31 December 2022
$
4. REVENUE AND OTHER INCOME
(a) Revenue
Interest Income 249,546 27,901
Gas and property lease revenue 2,675 133,484
252,221 161,385
(b) Other income
Arbitration finance facility income 404,858 4,795,937
404,858 4,795,937
31 December 2023 30 June 2023
$
$
5. TRADE AND OTHER RECEIVABLES
Trade receivables 24,214 46,076
Arbitration finance facility receivable - 9,590
Interest receivable 17,621 22,458
Deposits/prepayments 1,558 2,932
GST and other receivables 219,441 122,496
262,834 203,552
Arctic Rift Copper Project Eleonore North Gold Project Total
$
$
6. EXPLORATION AND EVALUATION ASSETS
Carrying amount at 1 July 2023 7,750,883 - 7,750,883
ARC Earn-in expenditure(2) 14,871 - 14,871
ELN work program expenditure(3) - 1,218,845 1,218,845
Carrying amount at 31 December 2023(1) 7,765,754 1,218,845 8,984,599
Note:
(1) The ultimate recoupment of costs carried
forward for exploration and evaluation is dependent on the successful
development and commercial exploitation or sale of the respective areas of
interest.
(2 ) GreenX
will earn an interest of up 80% in ARC through an EIA between Mineral
Investment Pty Ltd ("MIPL"), a wholly owned subsidiary of the Company. Other
key terms of the EIA are included in the 2023 annual report.
(3 ) In July
2023, GreenX entered into an Option Agreement with Greenfields to acquire up
to 100% of ELN. The option to acquire ELN vested once GreenX spent a minimum
A$600,000 on an agreed work exploration program at ELN with results from the
program expected in the coming months. The option to acquire ELN expires on 30
June 2024.
Plant and Right-of-use assets Total
equipment
$ $ $
7. PROPERTY, PLANT AND EQUIPMENT
Carrying amount at 1 July 2023 582,720 536,492 1,119,212
Additions 2,244 - 2,244
Depreciation and amortisation (152,202) (131,190) (283,392)
Carrying amount at 31 December 2023 432,762 405,302 838,064
- at cost 1,231,258 1,487,519 2,720,837
- accumulated depreciation and amortisation (798,496) (1,082,217) (1,882,773)
31 December 2023 30 June 2023
$
$
8. OTHER FINANCIAL LIABILITIES
(a) Current:
Lease liability(1) 285,006 281,443
(b) Non-Current:
Lease liability(1) 152,954 300,897
Note:
(1 ) The
Company has a lease agreement for the rental of a property. Refer to Note 7
for the carrying amount of the right of use asset relating to the lease. The
following are amounts recognised in the Statement of Profit and Loss: (i)
amortisation expense of right of use asset $131,190 (31 December 2022:
$131,190); (ii) interest expense on lease liabilities of $18,594 (31 December
2022: $25,193); and (iii) rent expense of $116,504 (31 December 2022:
$108,873).
31 December 2023 30 June 2023
$
$
9. PROVISIONS
(a) Current Provisions:
Provisions for the protection against mining damage at Debiensko(1) 417,578 390,841
Provision for closure of gas project(2) 33,903 54,336
Annual leave provision 6,605 5,680
458,086 450,857
(b) Non-Current Provisions:
Provisions for the protection against mining damage at Debiensko(1) 195,865 210,399
195,865 210,399
Note:
(1 ) As
Debiensko was previously an operating mine, the Group has provided for the pay
out of mining land damages to surrounding land owners who have made a
legitimate legal claim under Polish law.
(2) In the prior period, the Company
completed the sale of the Kaczyce 1 licence infrastructure to a third party
following the expiry of the licence.
Note 31 December 2023 30 June 2023
$
$
10. CONTRIBUTED EQUITY
(a) Issued and Unissued Capital
273,478,939 (30 June 2023: 267,674,439) fully paid ordinary shares 10(b) 87,369,332 83,317,501
Loan Note 2 exchangeable into fully paid ordinary shares at $0.46 per share, 2,600,012 2,600,012
net of transaction costs(1)
Total Contributed Equity 89,969,344 85,917,513
Note:
(1 ) On 2
July 2017, GreenX and CD Capital completed an investment of US$2.0 million
(A$2.6 million) in the form of the non-redeemable, non-interest-bearing
convertible Loan Note 2. The Loan Note 2 is convertible into ordinary shares
of GreenX at an issue price of A$0.46 per share and is accounted for as equity
(in full). Other key terms of the Loan Note 2 are included in the 2023 annual
report.
(b) Movements in fully paid ordinary shares during the past six months
Date Details Number of Ordinary Shares $
1 Jul 23 Opening balance 267,674,439 83,317,501
21 Jul 2023 Issue of placing shares 5,204,500 4,163,600
1 Nov 2023 Exercise of $0.45 incentive options (cashless) 600,000 -
Jul 23 to Dec 23 Transfer from share-based payment reserve upon exercise of options - 64,740
Jul 23 to Dec 23 Share issue costs - (176,509)
31 Dec 23 Closing balance 273,478,939 87,369,332
1 Jul 22 Opening balance 253,620,464 75,810,040
14 Mar 2023 Issue of placing shares 14,053,975 7,729,686
Jul 22 to Jun 23 Share issue costs - (222,225)
30 Jun 23 Closing balance 267,674,439 83,317,501
Note 31 December 2023 30 June 2023
$
$
11. RESERVES
Share-based payments reserve 11(a) 4,560,793 4,583,192
Foreign currency translation reserve 182,390 189,517
Other equity reserve 6,207,493 6,207,493
10,950,676 10,980,202
(a) Movements in share-based payments reserve during the past six months
Date Details Number of Number of Performance Rights $
Incentive Options
1 Jul 2023 Opening balance 10,900,000 11,000,000 4,583,192
30 Oct 2023 Exercise of $0.45 incentive options (cashless) (600,000) - (64,740)
Jul 23 to Dec 23 Share-based payments expense - - 42,341
31 Dec 2023 Closing balance 10,300,000 11,000,000 4,560,793
1 Jul 2022 Opening balance 10,750,000 11,000,000 4,558,339
15 Mar 2023 Issue of Incentive Options 150,000 - -
Jul 22 to Jun 23 Share-based payments expense - - 24,853
30 Jun 2023 Closing balance 10,900,000 11,000,000 4,583,192
12. CONTINGENT ASSETS AND LIABILITIES
There have been no changes to contingent assets or liabilities since the date
of the last annual report which relate to the arbitration Claim against the
Republic of Poland and the associated LFA with LCM. Please refer to the 2023
annual report for further details.
13. COMMITMENTS
To secure the services of the Greenfields exploration team in relation to the
ARC and ELN projects, GreenX will pay a services fee of approximately $59,500
per month to 30 June 2024.
14. FINANCIAL INSTRUMENTS
The Group's financial assets and liabilities, which comprise of cash and cash
equivalents, trade and other receivables, trade and other payables and other
financial liabilities, may be impacted by foreign exchange movements. At 31
December 2023 and 30 June 2023, the carrying value of the Group's financial
assets and liabilities approximate their fair value.
15. DIVIDENDS PAID OR PROVIDED FOR
No dividend has been paid or provided for during the half-year (31 December
2022: nil).
16. SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD
There were no significant events occurring after balance date requiring
disclosure.
AUDITOR'S INDEPENDENCE DECLARATION
INDEPENDENT AUDITOR'S REVIEW REPORT
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