REG - GreenX Metals Ltd - Half-year Report
15/03/2022 07:00
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RNS Number : 7983E GreenX Metals Limited 15 March 2022
GreenX Metals Limited
Interim Financial Report for the Half-Year Ended 31 December 2021
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
SHARE REGISTRIES:
Mr Dylan Browne Company Secretary
Australia:
Computershare Investor Services Pty Ltd
PRINCIPAL OFFICES:
Level 11, 172 St Georges Terrace
London:
Perth WA 6000
Unit 3C, 38 Jermyn Street
Tel: +61 8 9323 2000
London SW1Y 6DN
United Kingdom
Tel: +44 207 487 3900 United Kingdom:
Computershare Investor Services PLC
The Pavilions, Bridgewater Road
Bristol BS99 6ZZ
Australia (Registered Office):
Tel: +44 370 702 0000
Level 9, 28 The Esplanade
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
00-950 Warszawa
Greenland:
Tel: +48 22 262 50 00
ARC Joint Venture Company ApS
c/o Nuna Advokater
Box 59 STOCK EXCHANGE LISTINGS:
Qulilerfik 2, 6.
3900 Nuuk Australia:
Australian Securities Exchange - ASX Code: GRX
Warsaw:
Wiejska 17/11 United Kingdom:
00-480 Warszawa
London Stock Exchange (Main Board) - LSE Code: GRX
SOLICITORS:
Thomson Geer Poland:
Warsaw Stock Exchange - GPW Code: GRX
AUDITOR:
Ernst & Young - Perth
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
To view the following sections plus all figures and illustrations, please
refer to the full version of the Interim Financial Report on our website at
www.greenxmetals.com.au
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 2021
31 December 2020
31 December 2021
31 December 2020
PLN
PLN
EUR
EUR
Arbitration finance facility income 3,894,441 3,700,837 845,178 821,119
Sale of land rights at Debiensko 1,898,507 1,660,986 412,017 368,529
Gas and property lease revenue 295,966 429,442 64,231 95,282
Exploration and evaluation expenses (2,215,795) (2,070,248) (480,876) (459,334)
Arbitration related expenses (3,600,413) (3,778,083) (781,368) (838,258)
Net loss for the period (5,697,421) (669,082) (1,236,464) (148,452)
Net cash flows from operating activities (3,783,510) (3,594,201) (821,104) (797,459)
Net cash flows from investing activities (3,455,331) 1,243,699 (749,882) 275,944
Net cash flows from financing activities 13,053,025 11,108,800 2,891,414 2,471,350
Net increase in cash and cash equivalents 5,814,185 8,758,298 1,320,428 1,949,835
Basic and diluted loss per share (Grosz/EUR cents per share) (2.41) (0.30) (0.52) (0.07)
31 December 2021 30 June 2021 31 December 2021 30 June 2021
PLN
PLN
EUR
EUR
Cash and cash equivalents 11,682,911 13,619,641 2,540,094 3,012,662
Total Assets 37,744,614 23,143,811 8,206,421 5,119,406
Total Liabilities 8,371,102 6,931,015 1,820,042 1,533,139
Net Assets 29,373,513 16,212,797 6,386,379 3,586,267
Contributed equity 235,154,934 216,970,230 51,033,733 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 2.9010 AUD:PLN and 4.6078 PLN:EUR
for the six months ended 31 December 2021, and 2.7636 AUD:PLN and 4.5071
PLN:EUR for the six months ended 31 December 2020.
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: 2.9506 AUD:PLN and 4.5994 PLN:EUR on 31 December 2021,
and 2.8523 AUD:PLN and 4.5208 PLN:EUR on 30 June 2021.
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 2021
(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 (appointed 6 October 2021)
Mr Mark
Pearce
Non-Executive Director
Ms Carmel Daniele
Non-Executive Director (resigned 6 October 2021)
Mr Thomas
Todd
Non-Executive Director (resigned 30 July 2021)
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 during, and subsequent to, the half-year include:
· Earn-in Agreement signed to acquire up to 80% in Arctic Rift
Copper Project in Greenland (ARC or Project)
➢ Large-scale project with historical exploration results indicative
of an extensive mineral system with potential to host world-class copper
deposits
➢ ARC known to be prospective for basalt, fault and sedimentary
rock-hosted copper mineralisation but remains virtually unexplored
➢ Historical field programs identified widespread copper-silver
occurrences at surface
➢ Minik Anomaly in north-eastern part of ARC hosts highest copper
grades coincident with multiple geophysical anomalies
· New copper targets have been identified at ARC from ongoing
geological analysis
➢ Latest analysis identifies new "walk-up" native copper and copper
sulphide targets for upcoming field program
➢ New priority, walk-up, at-surface target identified along the
Knuth Fault which is a Discovery Zone "lookalike" feature
➢ Two additional exposures of native copper mineralisation
identified from recently unearthed historical documentation at Neergaard Dal
· Entitlements Issue to fund new and current activities announced
concurrently with ARC earn-in. Following interest from investors in the UK and
Europe, GreenX secured Entitlement and shortfall commitments for gross
proceeds of A$4.5 million
· Company name changed to GreenX Metals Limited to reflect its
vision to power the global energy transformation through copper exploration
· International arbitration claims against the Republic of Poland
under both the Energy Charter Treaty and the Australia-Poland Bilateral
Investment Treaty continue at pace
· Cash balance as the date of this report is A$6.5 million to fund
activities at ARC
ARC Earn-In Agreement and Project Summary
During the period, GreenX entered into an Earn-in Agreement (EIA) with
Greenfields Exploration Limited (GEX) to acquire an interest of up to 80% in
ARC in Greenland.
ARC is an exploration joint venture between GreenX and GEX. GreenX can earn
80% of ARC by spending A$10 million by October 2026. 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.
This province is thought to be analogous to the Keweenaw Peninsula of
Michigan, USA, which contained a pre-mining endowment of +7 Mt of copper
contained in sulphides and 8.9 Mt of native copper. Like Keweenaw, ARC is
known to contain at surface, high-grade copper sulphides, 'fissure' native
copper, and native copper contained in what were formerly gas bubbles and
layers between lava flows.
GreenX and GEX consider the observed geological setting and features of ARC to
be indicative of an extensive mineral system capable of hosting world-class
copper deposits.
The large scale of the mineral system, widespread copper anomalism, combined
with dual mineralising events are analogous to the largest copper systems
known worldwide. Accordingly, GreenX considers that ARC has the potential to
be a globally significant metallogenic province.
Minik Anomaly
Very high-grade copper mineralisation identified at ARC is associated with the
Minik Anomaly, a coincident magnetic-electromagnetic-gravity feature in an
area where there is a change in oxidation state and widespread native copper
in stream sediments. These features are presented as the footprint of a
large-scale hydrothermal system. The frequency and size of the native copper
clasts, and the high grade of the copper-silver sulphides that are exposed at
the surface, bode well for the probability of discovery.
Discovery Zone
The most advanced prospect within ARC is the copper-silver bearing Discovery
Zone, located at the northern end of Neergaard Dal. The Discovery Zone was
identified in 2010 as a follow up to a geochemical anomaly identified by the
GGS in 1994.
The Discovery Zone is comprised of at least three parallel breccia faults
trending northwest-southeast, with the furthest faults being around 2km apart.
The faults are traced for a minimum of 2km along strike before they disappear
underneath moraine. The Discovery Zone is open in both directions.
Structural Geology Review
In January 2022, GreenX announced that new copper targets had been identified
at ARC following ongoing geological analysis. Latest analysis identifies new
"walk-up" native copper and copper sulphide targets for the upcoming field
program. A new priority, walk-up, at-surface target was identified along the
Knuth Fault which is a Discovery Zone "lookalike" feature. Further, two
additional exposures of native copper mineralisation were identified from
recently unearthed historical documentation at Neergaard Dal.
A structural review of the currently available datasets of ARC's geology was
conducted by specialist consultant Dr Mark Munro and confirmed that the known
copper mineralisation including the native copper and Discovery Zone copper
sulphides, is associated with reverse faults. Reverse faults are considered to
be an important structural control on mineralisation at ARC, with the recent
study both extending the known reverse faults with associated mineralisation
and identifying new reverse faults.
The review reinforces evidence of a large-scale mineral system and regional
fertility related to identified faults and therefore exploration targeting,
and efficiency of upcoming field programs can be greatly improved through
enhanced geological understanding of ARC.
During the period, the ARC JV appointed Dr Mark Munro as head geologist. Dr
Munro holds a PhD in Structural and Metamorphic Geology from James Cook
University. As a three-year post-doctoral researcher at the University of
Western Australia he studied the mineralisation, alteration, and structure of
deposits. In addition to his considerable field and structural knowledge, he
is a 3D modeler and has global experience with precious and base metal
projects. Following a position as a mapper with the Geological Survey of
Western Australia, Dr Munro has spent four years working as an applied
structural geologist for industry. He engages in the structural logging of
drill core, in addition to both surface and underground mapping, with view to
understanding the multi-scale aspects of deposit generation.
Regional Developments
During early December 2021, Ironbark Zinc (ASX:IBG) announced that it secured
a Preliminary Project Letter approval for a US$657m loan from the US
Government's EXIM Bank for the development of Ironbark's Citronen lead-zinc
project. The Citronen project is located approximately 150 km further north
than ARC. The loan, if approved, will mean that the United States is financing
most of the cost of developing the strategically important Citronen project.
This project will include the construction of an airstrip and port at
Citronen, which may provide infrastructure support for a future development at
ARC.
Greenland has been increasingly recognised as one of the last great mineral
frontiers, with interest from leading miners and commodities houses including
Anglo American, Glencore, Trafigura, and IGO. More recently, major foreign
governments have also stepped in to support and finance mineral development
projects. The Australian Financial Review reported that Greenland 'has found
itself in the middle of a geopolitical great game', with the funding for
Citronen ' surfing a wave of geopolitical project funding' in the Arctic
region. The United States and the European Union are now all making concrete
moves to finance mineral projects in Greenland.
CORPORATE
Name Change
During the period, the Company name changed to GreenX Metals Limited to
reflect its vision to power the global energy transformation through copper
exploration.
Entitlements Issue & Shortfall Offer
Concurrent with the ARC EIA, the Company announced undertaking a one (1) for
ten (10) pro rata non-renounceable Entitlements Issue at $0.20
(£0.11/€0.13) per share. Eligible shareholders were entitled to acquire one
(1) New Share for ten (10) ordinary shares under the Entitlements Issue.
Following significant interest from new investors in the UK and Europe, the
Company completed the issue of 22,265,375 ordinary shares from the
Entitlements Issue and shortfall offer to nominated parties to raise $4.5
million (before costs).
Financial Position
As at the date of this report, GreenX has A$6.5 million cash available plus
A$10.1 million available to drawdown from the Litigation Funding Agreement
(LFA) for its dispute with Poland.
Board Changes
During the period, Ms Carmel Daniele, founder and Chief Executive Officer of
CD Capital, stepped down as CD Capital's nominee to the GreenX Board as a
non-executive Director and was replaced by Mr Garry Hemming, a highly
experienced exploration geologist, effective immediately. Mr Hemming is a
senior resource geologist at CD Capital and brings over 40 years' experience
in exploration and as a mining executive of public companies.
On 30 July 2021, Mr Thomas Todd resigned as a director of the Company.
DISPUTE WITH POLISH GOVERNMENT
The Company's international arbitration claims (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.
Both the Australia-Poland Bilateral Investment Treaty (BIT) and Energy Charter
Treaty (ECT) claim Tribunals have been constituted, with both Claim's being
registered with the Permanent Court of Arbitration in the Hague. The BIT and
ECT claim proceedings proceed at pace, with the Company now having filed a
Claim for compensation against Poland with the Tribunal in the amount of £806
million (A$1.5 billion / PLN 4.2 billion), which includes an assessment of the
value of GreenX's lost profits and damages related to both the Jan Karski mine
and Debiensko mines, and accrued interest related to any damages. The Claim
for damages has been assessed by external quantum experts appointed by GreenX
specifically for the purposes of the Claim.
In July 2020, the Company announced it had executed a LFA for US$12.3 million
with Litigation Capital Management. The facility is currently being drawn down
to cover legal, tribunal and external expert costs and defined operating
expenses associated with the Claim.
In September 2020, GreenX announced that it had formally commenced with the
Claim by serving the Notices of Arbitration against the Republic of Poland.
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 mines in Poland which
effectively deprives GreenX of the entire value of its investments in
Poland.
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. The Company remains open to resolving the dispute with the
Polish Government amicably. However, as of the date of this report, no
amicable resolution of the dispute has occurred, since the Polish Government
has declined to participate in discussions related to the dispute and
accordingly the Company has formerly submitted its Claim as discussed above.
GreenX's investment dispute with the Republic of Poland is not unique, with
international media widely reporting that the political environment and
investment climate in Poland has deteriorated since the change in Government
in 2015. As a result, there are a significant number of International
Arbitration claims being brought against Poland in the natural resources and
energy sectors with damages claims ranging from US$120 million to over US$1.3
billion and includes Bluegas NRG Holding (Gas), Lumina Copper (Copper) and
InvEnergy (wind farms).
Results of Operations
The net loss of the Consolidated Entity for the half-year ended 31 December
2021 was $1,963,939 (31 December 2020: $242,096). 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 $1,241,087 (31 December
2020: $1,367,071) relating to the Claim against the Republic of Poland. This
has been offset by the arbitration funding income of $1,342,440 (31 December
2020: $1,339,120);
(ii) Sale of land rights at Debiensko of $654,428 (31 December
2020: $601,016);
(iii) Exploration and evaluation expenses of $763,800 (31 December
2020: $749,104), 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;
(iv) Business development expenses of $182,433 (31 December 2020:
$119,746) 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 2021 including public relations, digital
marketing, travel costs, attendances at conferences and business development
consultant costs;
(v) Non-cash share-based payment expense of $1,203,339 (31
December 2020: reversal of $548,745) due to incentive securities issued to key
management personnel and other key employees and consultants of the Group as
part of the long-term incentive plan to reward key management personnel and
other key employees and consultants for the long-term performance of the
Group. The expense results from the Group's accounting policy of expensing the
fair value (determined using an appropriate pricing model) of incentive
securities granted on a straight-line basis over the vesting period of the
options and rights. During the period, the Company issued 10,750,000 unlisted
options; and
(vi) Revenue of $111,664 (31 December 2020: $166,442) consisting
of interest revenue of $9,643 (31 December 2020: $11,052) and the receipt of
$102,021 (31 December 2020: $155,390) of gas and property lease income derived
at Debiensko.
Financial Position
At 31 December 2021, the Group had cash reserves of $3,959,503 (30 June 2021:
$4,774,968) and the US$12.3 million arbitration facility (US$8 million
available at 31 December 2021) placing it in a good financial position to
continue with exploration activities at ARC and with the Claim.
At 31 December 2021, the Company had net assets of $9,955,098 (30 June 2021:
$5,684,113) an increase of approximately 75% compared with 30 June 2021. This
is largely attributable to the acquisition consideration for ARC which
amounted to A$4,788,325 (30 June 2021: nil).
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.
To date, the Group has not commenced production of any minerals, nor has it
identified an 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:
· Undertake a widespread geochemical sampling campaign at ARC;
· Perform passive seismic over the Minik Anomaly and 3D induced
polarisation (IP) surveys at ARC;
· Conduct high-resolution satellite mapping, re-analyse
historical samples and reprocess airborne magnetic data at ARC in order to
create a three-dimensional model at ARC;
· 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;
· Continue to assess corporate options for GreenX's investments
in Poland; and
· Identify and assess other suitable business opportunities in
the resources sector.
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:
· Joint venture and contractual risk - The Company's earn-in
right to the Project is subject to the EIA with GEX as announced to ASX on 6
October 2021. The Company's ability to achieve its objectives is dependent on
it and other parties complying with their obligations under the Agreement. Any
failure to comply with these obligations may result in the Company not
obtaining its interests in the Project 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,
GEX, the resolution of which could lead to delays in the Company's proposed
development activities or financial loss.
If and when the Company earns in its interest in the
Project, an incorporated joint venture will be established between the Company
and GEX. The nature of the joint venture may change in future, including the
ownership structure and voting rights in relation to the Project, which may
have an effect on the ability of the Company to influence decisions on the
Project.
Pursuant to the EIA, a Greenland company will be incorporated for the specific
purpose of holding the permits relating to the Project on behalf of the joint
venture. The transfer of the permits relating to the Project to the joint
venture company requires the approval of the Greenlandic authorities. Until
the permits relating to the Project are transferred to the incorporated joint
venture company, the joint venture will operate as an unincorporated joint
venture. There is a risk that the transfer of the permits relating to the
Project to the incorporated joint venture company may be delayed or not
obtained. In these circumstances, the Company and GEX will operate as an
unincorporated joint venture in respect of the Project.
· Operations in overseas jurisdictions risk - The Project is
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 Project, or changes in
local community support for the Project, 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 Project, 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 Project is 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 conditions which may prevent
access to the Project, impact exploration and field activities or generate
unexpected costs. Further, access to the Project may be limited because of
travel restrictions due to COVID-19. It is not possible for the Company to
predict or protect the Company against all such risks.
The Company also has operations in Poland which are
subject to regulations concerning protection of the environment, including at
the Debiensko project. 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.
· Litigation risk - All industries, including the mining
industry, are subject to legal and arbitration claims. Specifically and as
noted above, the Company is proceeding with it its Claim against the Republic
of Poland, will strongly defend its position and will continue to take all
relevant actions to pursue its legal rights regarding both the Debiensko and
Jan Karski projects. 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.
· 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 copper
prices - The price of 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 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
copper 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 Stirling 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 2021, other than remuneration for Key Management Personnel.
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 17.7%
ORDINARY SHARES HELD BY DIRECTORS'
At the Date of this Report 31 December 2021 30 June 2021
Mr Ian Middlemas 11,660,000 11,660,000 10,600,000
Mr Benjamin Stoikovich 1,492,262 1,492,262 1,492,262
Mr Garry Hemming - - -(1)
Mr Mark Pearce 3,300,000 3,300,000 3,000,000
Notes:
(1
)Appointed as a Director on 6 October 2021
SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD
(i) In January 2022, the Company completed the shortfall for
the Entitlements Issue and raised A$3.6 million through the issue of
17,769,000 ordinary shares to new investors in the UK and Europe.
Other than as disclosed above, 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 21 and forms part of this Directors'
Report.
Signed in accordance with a resolution of the Directors.
BEN STOIKOVICH
Director
14 March 2022
Competent Persons Statement
The information in this announcement that relates to Exploration Results for
ARC is extracted from the ASX announcements dated 6 October 2021 and 22
January 2022 which are 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 announcements; (b)
all material assumptions and technical parameters underpinning the content in
the relevant announcements 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 announcements.
Forward Looking Statements
This report 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 2021 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 2021 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
14 March 2022
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE HALF-YEAR ENDED 31 DECEMBER 2021
Note Half-Year Ended Half-Year Ended
31 December 2021
31 December 2020
$
$
Revenue 4(a) 111,664 166,442
Other income 4(b) 1,996,868 1,940,136
Exploration and evaluation expenses (763,800) (749,104)
Employment expenses (180,552) (154,363)
Administration and corporate expenses (248,223) (176,623)
Occupancy expenses (457,515) (330,512)
Share-based payment (expense)/reversal (1,203,339) 548,745
Business development expenses (182,433) (119,746)
Arbitration related expenses (1,241,087) (1,367,071)
Reversal of impairment 7 131,207 -
Other 73,271 -
Loss before income tax (1,963,939) (242,096)
Income tax expense - -
Net loss for the period (1,963,939) (242,096)
Net loss attributable to members of GreenX Metals Limited (1,963,939) (242,096)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations (50,798) (91,391)
Total other comprehensive loss for the period (50,798) (91,391)
Total comprehensive loss for the period (2,014,737) (333,487)
Total comprehensive loss attributable to members of GreenX Metals Limited (2,014,737) (333,487)
Basic and diluted loss per share (cents per share) (0.83) (0.11)
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 2021
Note 31 December 2021 30 June 2021
$
$
ASSETS
Current Assets
Cash and cash equivalents 3,959,503 4,774,968
Trade and other receivables 5 868,834 1,329,336
Assets held for sale 12 1,870,587 -
Total Current Assets 6,698,924 6,104,304
Non-Current Assets
Exploration and evaluation assets 6 4,788,325 -
Property, plant and equipment 7 1,304,933 2,009,783
Total Non-Current Assets 6,093,258 2,009,783
TOTAL ASSETS 12,792,182 8,114,087
LIABILITIES
Current Liabilities
Trade and other payables 1,186,086 1,136,567
Other financial liabilities 8(a) 434,283 808,601
Provisions 9(a) 161,455 100,838
Total Current Liabilities 1,781,824 2,046,006
Non-Current Liabilities
Other financial liabilities 8(b) 698,830 -
Provisions 9(b) 356,430 383,968
Total Non-Current Liabilities 1,055,260 383,968
TOTAL LIABILITIES 2,837,084 2,429,974
NET ASSETS 9,955,098 5,684,113
EQUITY
Contributed equity 10 81,059,491 79,332,108
Reserves 11 4,853,450 345,909
Accumulated losses (75,957,843) (73,993,904)
TOTAL EQUITY 9,955,098 5,684,113
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 2021
Contributed Equity Share-based Payments Reserve Foreign Currency Translation Reserve Accumulated Losses Total
Equity
$ $ $ $ $
Balance at 1 July 2021 79,332,108 - 345,909 (73,993,904) 5,684,113
Net loss for the period - - - (1,963,939) (1,963,939)
Other comprehensive income for the half-year
Exchange differences on translation of foreign operations - - (50,798) - (50,798)
Total comprehensive loss for the period - - (50,798) (1,963,939) (2,014,737)
Issue of shares 1,814,273 - - - 1,814,273
Share issue costs (86,890) - - - (86,890)
Issue of ARC Consideration Performance Rights - 3,355,000 - - 3,355,000
Recognition of share-based payments - 1,203,339 - - 1,203,339
Balance at 31 December 2021 81,059,491 4,558,339 295,111 (75,957,843) 9,955,098
Balance at 1 July 2020 75,476,543 548,745 1,087,780 (73,114,516) 3,998,552
Net loss for the period - - - (242,096) (242,096)
Other comprehensive loss for the half-year
Exchange differences on translation of foreign operations - - (91,391) - (91,391)
Total comprehensive loss for the period - - (91,391) (242,096) (333,487)
Issue of shares 4,020,000 4,020,000
Share issue costs (101,470) - - - (101,470)
Lapse of performance rights - (661,876) - - (661,876)
Recognition of share-based payments - 113,131 - - 113,131
Balance at 31 December 2020 79,395,073 - 996,389 (73,356,612) 7,034,850
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 2021
Half-Year Ended Half-Year Ended
31 December 2021
31 December 2020
$
$
Cash flows from operating activities
Payments to suppliers and employees (1,416,194) (1,457,652)
Proceeds from property lease and gas sales 102,021 146,728
Interest revenue from third parties 9,971 10,706
Net cash outflow from operating activities (1,304,202) (1,300,218)
Cash flows from investing activities
Payments for property, plant and equipment (248,614) (2,310)
Proceeds from sale of land and property 185,851 878,569
Payments for arbitration related expenses (731,716) (426,236)
Payments for exploration and expenditure (396,597) -
Net cash inflow/(outflow) from investing activities (1,191,076) 450,023
Cash flows from financing activities
Proceeds from issue of shares 899,273 4,020,000
Payments for share issue costs (22,900) (109,540)
Receipts from arbitration funding 937,828 253,235
Payments for lease liabilities (134,388) (113,673)
Net cash inflow from financing activities 1,679,813 4,050,022
Net increase/(decrease) in cash and cash equivalents (815,465) 3,199,827
Foreign exchange movements - (2,548)
Cash and cash equivalents at the beginning of the period 4,774,968 2,566,518
Cash and cash equivalents at the end of the period 3,959,503 5,763,797
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 2021
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Statement of Compliance
The interim consolidated financial statements of the Group for the half-year
ended 31 December 2021 were authorised for issue in accordance with the
resolution of the Directors.
This general purpose condensed financial report for the interim half-year
reporting period ended 31 December 2021 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
(formerly Prairie Mining Limited) for the year ended 30 June 2021 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.
(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 2021 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 2021.
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 2021. 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 2020-3 Amendments to Australian Accounting Standards - Annual 1 January 2022 1 July 2022
Improvements 2018-2020 and Other Amendments (AASB 1, 3, 9, 116, 137 & 141)
AASB 2020-1 Amendments to Australian Accounting Standards - Classification of 1 January 2023 1 July 2023
Liabilities as Current or Non-Current
AASB 2020-6 Amendments to Australian Accounting Standards - Classification of 1 January 2023 1 July 2023
Liabilities as Current or Non-Current - Deferral of Effective Date
AASB 2021-2 Amendments to Australian Accounting Standards - Disclosure of 1 January 2023 1 July 2023
Accounting Policies and Definition of Accounting Estimates
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 2021 Half-Year ended
$
31 December 2020
$
4. REVENUE AND OTHER INCOME
(a) Revenue
Interest Income 9,643 11,052
Gas and property lease revenue 102,021 155,390
111,664 166,442
(b) Other income
Arbitration finance facility income 1,342,440 1,339,120
Gain on sale of land rights at Debiensko 654,428 601,016
1,996,868 1,940,136
31 December 2021 30 June 2021
$
$
5. TRADE AND OTHER RECEIVABLES
Trade receivables 82,227 246,703
Arbitration finance facility receivable 403,170 694,486
Accrued interest 1,591 1,919
Deposits/prepayments 205,618 262,804
GST and other receivables 176,228 123,424
868,834 1,329,336
Note Arctic Rift Copper Project
$
6. EXPLORATION AND EVALUATION ASSETS
Carrying amount at 1 July 2021 -
Acquisition consideration for ARC (GRX securities) 10&11 4,270,000
Earn-in expenditure 518,325
Carrying amount at 31 December 2021(1) 4,788,325
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.
Land and Buildings Plant and Right-of-use assets Assets under construction Total
equipment
$ $ $ $ $
7. PROPERTY, PLANT AND EQUIPMENT
Carrying amount at 1 July 2021 1,821,394 24,435 163,954 - 2,009,783
Modification of right-of-use assets - - 983,924 - 983,924
Additions - 1,595 - 247,019 248,614
Reversal of impairment(1) 131,207 - - - 131,207
Depreciation and amortisation (21,426) (17,686) (109,303) - (148,415)
Other movements (see Note 12) (1,899,355) - - - (1,899,355)
Foreign exchange differences (20,815) (10) - - (20,825)
Carrying amount at 31 December 2021 11,005 8,334 1,038,575 247,019 1,304,933
- at cost 32,431 322,854 1,585,088 247,019 2,187,392
- accumulated depreciation and amortisation (21,426) (314,520) (546,513) - (882,459)
Note:
(1 )Refer
to Note 12. The asset has been measured at the fair value of the sales
contract and thus previous impairment has been reversed.
31 December 2021 30 June 2021
$
$
8. OTHER FINANCIAL LIABILITIES
(a) Current:
Lease liability 248,432 171,695
Deferred other income(1) 185,851 636,906
434,283 808,601
(b) Non-Current:
Lease liability 698,830 -
Note:
(1
)Upfront contractual deposit amounts received for the sale of land and
property.
31 December 2021 30 June 2021
$
$
9. PROVISIONS
(a) Current Provisions:
Provisions for the protection against mining damage at Debiensko(1) 136,331 75,022
Annual leave provision 25,124 25,816
161,455 100,838
(b) Non-Current Provisions:
Provisions for the protection against mining damage at Debiensko(1) 356,430 383,968
356,430 383,968
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 claim under Polish law prior to 1 January 2018.
Note 31 December 2021 30 June 2021
$
$
10. CONTRIBUTED EQUITY
(a) Issued and Unissued Capital
235,851,464 (30 June 2021: 228,355,089) fully paid ordinary shares 10(b) 72,251,986 70,524,603
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)
Issue of CD Options (options expired 31 May 2021) 6,207,493 6,207,493
Total Contributed Equity 81,059,491 79,332,108
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.
Other key terms of the Loan Note 2 are included in the 2021 Annual Report.
(b) Movements in fully paid ordinary shares during the past six months
Date Details Number of Ordinary Shares $
1 Jul 2021 Opening Balance 228,355,089 70,524,603
8 Oct 2021 Issue of ARC consideration shares (Note 6) 3,000,000 915,000
6 Dec 2021 Issue of Entitlement Shares 4,496,375 899,273
Jul 21 to Dec 21 Share issue costs - (86,890)
31 Dec 2021 Closing Balance 235,851,464 72,251,986
Note 31 December 2021 30 June 2021
$
$
11. RESERVES
Share-based payments reserve 11(a) 4,558,339 -
Foreign currency translation reserve 295,111 345,909
4,853,450 345,909
(a) Movements in share-based payments reserve during the past six months
Date Details Number of Incentive Options Number of Performance Rights $
1 Jul 21 Opening Balance - - -
8 Oct 2021 Issue of ARC Consideration Performance Rights (Note 6) - 11,000,000 3,355,000
24 Nov 2021 Issue of Incentive Options 10,750,000 - -
Jul 21 to Dec 21 Share-based payments expense - - 1,203,339
31 Dec 21 Closing Balance 10,750,000 11,000,000 4,558,339
The Company also has other unlisted securities (not accounted for as
share-based payments) on issue which include a convertible loan note with a
principal amount of $2,627,430, convertible into 5,711,805 ordinary shares at
a conversion price of $0.46 per share with no expiry date (Loan Note 2).
Note Property
12. ASSETS HELD FOR SALE
Carrying amount at 1 July 2021 -
Movement from property, plant and equipment(1) 7 1,899,355
Foreign exchange differences (28,768)
Carrying amount at 31 December 2021 1,870,587
Note:
(1 )During
the period, the Company commenced a sales process for the office building
currently owned by the Group in Poland. The sale of the office building is
expected to be completed within the next six months. The asset has been
measured at the fair value of the sales contract.
13. CONTINGENT ASSETS AND LIABILITIES
There have been no changes to contingent assets or liabilities since the date
of the last annual report.
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 2021 and 30 June 2021, 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
2020: nil).
16. SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD
(i) In January 2022, the Company completed the shortfall for
the Entitlements Issue and raised $3.6 million through the issue of 17,769,000
ordinary shares to new investors in the UK and Europe.
Other than as disclosed above, there were no significant events occurring
after balance date requiring disclosure.
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