REG - GreenX Metals Ltd - Half-year Report
15/03/2023 07:15
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RNS Number : 0002T GreenX Metals Limited 15 March 2023
GreenX Metals Limited
Interim Financial Report for the Half-Year Ended 31 December 2022
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 11, 172 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:
SOLICITORS:
Australian Securities Exchange - ASX Code: GRX
Thomson Geer
United Kingdom:
AUDITOR: London Stock Exchange (Main Board) - LSE Code: GRX
Ernst & Young - Perth
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
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
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 2022
31 December 2021
31 December 2022
31 December 2021
PLN
PLN
EUR
EUR
Arbitration finance facility income 15,028,789 3,894,441 3,174,012 845,178
Sale of land rights at Debiensko - 1,898,507 - 412,017
Gas and property lease revenue 418,291 295,966 88,341 64,231
Exploration and evaluation expenses (2,093,485) (2,215,795) (442,135) (480,876)
Arbitration related expenses (15,137,985) (3,600,413) (3,197,074) (781,368)
Net loss for the period (4,488,239) (5,697,421) (947,896) (1,236,464)
Net cash flows from operating activities (4,264,524) (3,783,510) (900,648) (821,104)
Net cash flows from investing activities (10,072,066) (3,455,331) (2,127,175) (749,882)
Net cash flows from financing activities 3,267,631 13,053,025 690,109 2,891,414
Net increase in cash and cash equivalents (11,068,959) 5,814,185 (2,337,714) 1,320,428
Basic and diluted loss per share (Grosz/EUR cents per share) (1.73) (2.41) (0.37) (0.52)
31 December 2022 30 June 2022 31 December 2022 30 June 2022
PLN
PLN
EUR
EUR
Cash and cash equivalents 7,695,353 18,853,668 1,640,835 4,028,045
Total Assets 41,968,796 48,428,966 8,948,761 10,346,743
Total Liabilities (11,093,430) 11,961,183 (2,365,387) 2,555,481
Net Assets 30,875,366 36,467,783 6,583,374 7,791,262
Contributed equity 245,709,661 216,970,230 51,892,768 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 3.1337 AUD:PLN and 4.7350 PLN:EUR
for the six months ended 31 December 2022, and 2.9010 AUD:PLN and 4.6078
PLN:EUR for the six months ended 31 December 2021.
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: 2.9890 AUD:PLN and 4.6899 PLN:EUR on 31 December 2022,
and 3.0873 AUD:PLN and 4.6806 PLN:EUR on 30 June 2022.
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 2022
(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 during, and subsequent to, the half-year include:
· During the period, the hearing for the international arbitration
claims against the Republic of Poland under both the Energy Charter Treaty and
the Australia-Poland Bilateral Investment Treaty was concluded.
➢ Combined arbitration hearing took place in front of the Arbitral
Tribunal in London under the UNCITRAL Arbitration Rules for GreenX's claims
against Poland.
➢ 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.
➢ The Company has funded the Claim proceedings under its US$12.3
million Litigation Funding Agreement (LFA).
· In November 2022, the Company announced highly encouraging
results from an initial site visit to Arctic Rift Copper Project (ARC or
Project).
➢ Analysis of the site visit results is underway and will be key to
future work programs.
➢ GreenX can earn up to 80% of the ARC copper project in Greenland.
ARC is a significant, large-scale project (5,774km(2) license area) with
historical exploration results and recent analysis indicative of an extensive
mineral system with potential to host world-class copper deposits.
· Subsequent to the half year, the Company announced a placing to
issue 12.4 million new ordinary shares to raise gross proceeds of
approximately £3.9 million (~A$6.8 million) from new and existing UK and
European investors and some Australian investors (Placing). Due to high
demand, directors resolved to increase the Placing to issue 14.1 million new
ordinary shares to raise total gross proceeds of approximately £4.4 million
(~A$7.7 million). The Placing shares were issued on 14 March 2023.
· On completion of the Placing, the Company will have cash reserves
of A$10 million.
Dispute with the Polish Government
During the period, the Company reported the conclusion of the hearing for the
international arbitration claims (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 in November 2022 and lasted two weeks.
Following completion of the hearing, the Arbitral 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) 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 (i.e., a decision) in due course.
There is no specified date for an Award to be rendered. Subsequent to the end
of the half-year, the Company filed its post hearing brief with the Tribunal.
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 July 2020, the Company announced it had executed the LFA for US$12.3
million with Litigation Capital Management (LCM). The facility is currently
being drawn down to cover legal, tribunal and external expert costs as well as
defined operating expenses associated with the Claim. 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 was submitted in July 2022 which addressed
various points raised by the Republic of Poland in their Statement of Defence.
The Statement of Reply also contained a re-evaluation of the claim for damages
based on consideration of 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.
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.
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 bought against Poland.
Highly encouraging results from initial ARC site visit
During the period, GreenX and its joint-venture (JV) partner Greenfields
Exploration Ltd (Greenfields) announced the results of from the first visit to
ARC.
The results of this work program have demonstrated the high-grade nature of
the known copper sulphide mineralisation and wider copper mineralization 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.
Analysis of this new information is underway and will be key to future work
programs.
A logistical base in Greenland was also secured as part of the site visit. The
Company successfully established depots, and field trialled its SHERP vehicles
and advanced satellite communications systems.
Share Placing to UK and European Investors
In March 2023, the Company announced the Placing to issue 12.4 million new
ordinary shares to raise gross proceeds of approximately £3.9 million (~A$6.8
million) from new and existing UK and European investors and some Australian
investors. Due to high demand, directors resolved to increase the Placing to
issue 14.1 million new ordinary shares to raise total gross proceeds of
approximately £4.4 million (~A$7.7 million). The Placing shares were issued
on 14 March 2023.
Results of Operations
The net loss of the Consolidated Entity for the half-year ended 31 December
2022 was $1,432,272 (31 December 2021: $1,963,939). 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 $4,830,784 (31 December
2021: $1,241,087) relating to the Claim against the Republic of Poland. This
has been offset by the arbitration funding income of $4,795,937 (31 December
2021: $1,342,440);
(ii) Sale of land rights at Debiensko of nil (31 December 2021:
$654,428);
(iii) Exploration and evaluation expenses of $668,066 (31 December
2021: $763,800), 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 $132,578 (31 December 2021:
$182,433) 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 2022 including public relations, digital
marketing, travel costs, attendances at conferences and business development
consultant costs;
(v) Non-cash share-based payment expense of nil (31 December
2021: $1,203,339) 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 prior period, the Company issued 10,750,000 unlisted
options which vested on issue; and
(vi) Revenue of $161,385 (31 December 2021: $111,664) consisting
of interest income of $27,901 (31 December 2021: $9,643) and the receipt of
$133,484 (31 December 2021: $102,021) of gas and property lease income derived
at Debiensko.
Financial Position
At 31 December 2022, the Group had cash reserves of $2,574,558 (30 June 2022:
$6,106,847) and the US$12.3 million arbitration facility (US$4.2 million
available at 31 December 2022) placing it in a good financial position to
continue with exploration activities at ARC and with the Claim. On completion
of the Placing, the Group will have cash reserves of A$10 million.
At 31 December 2022, the Company had net assets of $10,329,665 (30 June 2022:
$11,812,416) an decrease of approximately 13% compared with 30 June 2022.
This is largely driven by the loss of the half-year of $1,432,272 (31 December
2021: $1,963,939).
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 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:
· 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;
· Identify and assess other suitable business opportunities in
the resources sector; and
· Continue with exploration activities in Greenland.
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 it 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. During the
period, the hearing for the Claim was completed with 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 Project is subject to the Earn-In Agreement (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 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, Greenfields, 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 Greenfields. 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.
· 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 or ice conditions which may and has prevented access
to the Project, 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 relinquishment 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 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 2022, other than remuneration for Key Management Personnel
and payments of $144,000 (31 December 2021: $120,000) 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 17.7%
ORDINARY SHARES HELD BY DIRECTORS'
At the Date of this Report 31 December 2022 30 June 2022
Mr Ian Middlemas 11,660,000 11,660,000 11,660,000
Mr Benjamin Stoikovich 1,492,262 1,492,262 1,492,262
Mr Garry Hemming - - -
Mr Mark Pearce 3,300,000 3,300,000 3,300,000
SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD
Subsequent to the half year, the Company announced the Placing to issue 12.4
million new ordinary shares to raise gross proceeds of approximately £3.9
million (~A$6.8 million) from new and existing UK and European investors and
some Australian investors. Due to high demand, directors resolved to increase
the Placing to issue 14.1 million new ordinary shares to raise total gross
proceeds of approximately £4.4 million (~A$7.7 million). The Placing shares
were issued on 14 March 2023.
Other than as outlined 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 17 and forms part of this Directors'
Report.
Signed in accordance with a resolution of the Directors.
BEN STOIKOVICH
Director
14 March 2023
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 , 22 January
2022, 20 July 2022, 4 August 2022, 11 August 2022 and 9 November 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 2022 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 2022 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 2023
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE HALF-YEAR ENDED 31 DECEMBER 2022
Note Half-Year Ended Half-Year Ended
31 December 2022
31 December 2021
$
$
Revenue 4(a) 161,385 111,664
Other income 4(b) 4,795,937 1,996,868
Exploration and evaluation expenses (668,066) (763,800)
Employment expenses (181,183) (180,552)
Administration and corporate expenses (177,131) (248,223)
Occupancy expenses (412,360) (457,515)
Share-based payment expense - (1,203,339)
Business development expenses (132,578) (182,433)
Arbitration related expenses (4,830,784) (1,241,087)
Reversal of impairment - 131,207
Other 12,508 73,271
Loss before income tax (1,432,272) (1,963,939)
Income tax expense - -
Net loss for the period (1,432,272) (1,963,939)
Net loss attributable to members of GreenX Metals Limited (1,432,272) (1,963,939)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations (50,479) (50,798)
Total other comprehensive loss for the period (50,479) (50,798)
Total comprehensive loss for the period (1,482,751) (2,014,737)
Total comprehensive loss attributable to members of GreenX Metals Limited (1,482,751) (2,014,737)
Basic and diluted loss per share (cents per share) (0.55) (0.83)
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 2022
Note 31 December 2022 30 June 2022
$
$
ASSETS
Current Assets
Cash and cash equivalents 2,574,558 6,106,847
Trade and other receivables 5 2,682,639 2,149,578
Total Current Assets 5,257,197 8,256,425
Non-Current Assets
Exploration and evaluation assets 6 7,391,258 5,745,590
Property, plant and equipment 7 1,392,628 1,684,496
Total Non-Current Assets 8,783,886 7,430,086
TOTAL ASSETS 14,041,083 15,686,511
LIABILITIES
Current Liabilities
Trade and other payables 2,214,019 2,303,588
Other financial liabilities 8(a) 326,030 315,808
Provisions 9(a) 488,963 433,482
Total Current Liabilities 3,029,012 3,052,878
Non-Current Liabilities
Other financial liabilities 8(b) 412,842 538,266
Provisions 9(b) 269,564 282,951
Total Non-Current Liabilities 682,406 821,217
TOTAL LIABILITIES 3,711,418 3,874,095
NET ASSETS 10,329,665 11,812,416
EQUITY
Contributed equity 10 78,410,052 78,410,052
Reserves 11 11,003,244 11,053,723
Accumulated losses (79,083,631) (77,651,359)
TOTAL EQUITY 10,329,665 11,812,416
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 2022
Contributed Equity Share-based Payments Reserve Foreign Currency Translation Reserve Other Equity Accumulated Losses Total
Equity
$ $ $ $ $ $
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
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
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 2022
Half-Year Ended Half-Year Ended
31 December 2022
31 December 2021
$
$
Cash flows from operating activities
Payments to suppliers and employees (1,481,931) (1,416,194)
Proceeds from property lease and gas sales 92,114 102,021
Interest revenue from third parties 28,936 9,971
Net cash outflow from operating activities (1,360,881) (1,304,202)
Cash flows from investing activities
Payments for property, plant and equipment - (248,614)
Proceeds from sale of land and property - 185,851
Payments for arbitration related expenses (1,316,530) (731,716)
Payments for exploration and expenditure (1,897,634) (396,597)
Net cash outflow from investing activities (3,214,164) (1,191,076)
Cash flows from financing activities
Proceeds from issue of shares - 899,273
Payments for share issue costs - (22,900)
Receipts from arbitration funding 1,187,056 937,828
Payments for lease liabilities (144,300) (134,388)
Net cash inflow from financing activities 1,042,756 1,679,813
Net decrease in cash and cash equivalents (3,532,289) (815,465)
Cash and cash equivalents at the beginning of the period 6,106,847 4,774,968
Cash and cash equivalents at the end of the period 2,574,558 3,959,503
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 2022
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 2022 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 2022 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 2022 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 2022 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 2022.
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 2022. 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 2020-6 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
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 2022 Half-Year ended
$
31 December 2021
$
4. REVENUE AND OTHER INCOME
(a) Revenue
Interest Income 27,901 9,643
Gas and property lease revenue 133,484 102,021
161,385 111,664
(b) Other income
Arbitration finance facility income 4,795,937 1,342,440
Gain on sale of land rights at Debiensko - 654,428
4,795,937 1,996,868
31 December 2022 30 June 2022
$
$
5. TRADE AND OTHER RECEIVABLES
Trade receivables 78,808 30,744
Arbitration finance facility receivable 2,265,278 1,815,313
Interest receivable 2,882 4,019
Deposits/prepayments 184,975 193,705
GST and other receivables 150,696 105,797
2,682,639 2,149,578
Note Arctic Rift Copper Project
$
6. EXPLORATION AND EVALUATION ASSETS
Carrying amount at 1 July 2022 5,745,590
Earn-in expenditure(2) 1,645,668
Carrying amount at 31 December 2022(1) 7,391,258
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 2022 Annual Report.
Land and Buildings Plant and Right-of-use assets Total
equipment
$ $ $ $
7. PROPERTY, PLANT AND EQUIPMENT
Carrying amount at 1 July 2022 9,792 875,832 798,872 1,684,496
Write-off (8,998) - - (8,998)
Depreciation and amortisation (667) (150,883) (131,190) (282,740)
Foreign exchange differences (127) (3) - (130)
Carrying amount at 31 December 2022 - 724,946 667,682 1,392,628
- at cost 2,060 1,206,103 1,487,519 2,695,682
- accumulated depreciation and amortisation (2,060) (481,157) (819,837) (1,303,054)
31 December 2022 30 June 2022
$
$
8. OTHER FINANCIAL LIABILITIES
(a) Current:
Lease liability 326,030 315,808
(b) Non-Current:
Lease liability 412,842 538,266
31 December 2022 30 June 2022
$
$
9. PROVISIONS
(a) Current Provisions:
Provisions for the protection against mining damage at Debiensko(1) 248,533 206,380
Provision for closure of gas project(2) 209,984 203,481
Annual leave provision 30,446 23,621
488,963 433,482
(b) Non-Current Provisions:
Provisions for the protection against mining damage at Debiensko(1) 269,564 282,951
269,564 282,951
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) The Kaczyce 1 tenement which provides
the Group with the ability to extract gas expired on 28 January 2023. The
Group has provided for the costs of its closure.
Note 31 December 2022 30 June 2022
$
$
10. CONTRIBUTED EQUITY
(a) Issued and Unissued Capital
228,355,089 (30 June 2022: 228,355,089) fully paid ordinary shares 10(b) 75,810,040 75,810,040
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 78,410,052 78,410,052
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 2022 Annual Report.
(b) Movements in fully paid ordinary shares during the past six months
There were no movements in fully paid ordinary shares during the past six
months.
Note 31 December 2022 30 June 2022
$
$
11. RESERVES
Share-based payments reserve 11(a) 4,558,339 4,558,339
Foreign currency translation reserve 237,412 287,891
Other equity reserve 6,207,493 6,207,493
11,003,244 11,053,723
(a) Movements in share-based payments reserve during the past six months
There were no movements in share based payments during the past six months.
12. CONTINGENT ASSETS AND LIABILITIES
There have been no changes to contingent assets or liabilities since the date of the last annual report.
13. 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 2022 and 30 June 2022, the carrying value of the Group's financial assets and liabilities approximate their fair value.
14. DIVIDENDS PAID OR PROVIDED FOR
No dividend has been paid or provided for during the half-year (31 December 2021: nil).
15. SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD
Subsequent to the half year, the Company announced the Placing to issue 12.4
million new ordinary shares to raise gross proceeds of approximately £3.9
million (~A$6.8 million) from new and existing UK and European investors and
some Australian investors. Due to high demand, directors resolved to increase
the Placing to issue 14.1 million new ordinary shares to raise total gross
proceeds of approximately £4.4 million (~A$7.7 million). The Placing shares
were issued on 14 March 2023.
Other than as outlined above, there were no significant events occurring after
balance date requiring disclosure.
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