REG - GreenX Metals Ltd - Quarterly Activities Report June 2022
28/07/2022 07:16
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RNS Number : 0064U GreenX Metals Limited 28 July 2022
GREENX METALS LIMITED
NEWS RELEASE 28 July 2022
Quarterly Activities Report June 2022
Highlights
· GreenX continued preparations for a maiden field exploration program at the
ARC Project in Greenland.
o Field program to commence in coming weeks with deployment of five geological
field teams.
o Program will prioritise identified "walk-up" native copper and copper sulphide
targets through a program of sampling, portable-core drilling and geophysics.
o 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.
o GreenX expects strong news flow over the upcoming quarters from the field
program and results from ongoing analysis of historical data.
· International arbitration claims against the Republic of Poland under both the
Energy Charter Treaty and the Australia-Poland Bilateral Investment Treaty
continue at pace.
o Statement of Reply for ongoing arbitration against Poland has been filed with
a revised claim for compensation in the amount of £737 million (A$1.3
billion/PLN 4.0 billion) as prepared by external quantum experts.
o Claim includes an updated assessment of the value of GreenX's lost profits and
damages related to both the Jan Karski and Debiensko mines, and accrued
interest related to any damages.
o Next steps in the arbitration process are for Poland to lodge its final
submission to the Tribunal (the Rejoinder) followed by a hearing to be
conducted in front of the Tribunal.
· Cash balance at 30 June 2022 of A$6.1 million to fund activities at ARC plus
A$8.3 million available to continue pursuing GreenX's dispute against the
Republic of Poland.
GreenX Metals Limited (ASX:GRX, LSE:GRX) (GreenX or the Company) is pleased to
present its Quarterly Activities Report for the period during and subsequent
to 30 June 2022.
FIELD PROGRAM TO COMMENCE AT ARC PROJECT IN GREENLAND
Subsequent to the quarter, GreenX announced the receipt of all the permits for
the proposed 2022 field program at the Arctic Rift Copper Project (ARC or ARC
Project), which will commence in the coming weeks. Five geological teams will
be deployed in the field supported by All-Terrain-Vehicles. The field team and
field equipment will be deployed by ship from Iceland and will access the ARC
project via Independence Fjord.
Historical programs and latest analysis have identified a number "walk-up"
native copper and copper sulphide targets that will be the priority for the
upcoming field program including Discovery Zone, Neergaard Dal and the Knuth
Fault. The field campaign is based on a program of sampling, mapping, portable
core-drilling and geophysics including seismic, electro-magnetic and
radiometrics. Portable XRF will be used in the field and the field team will
have access to satellite internet for real time uploading of field results.
The field program will be led in the field by Dr Jonathan Bell.
GreenX expects strong news flow over the upcoming quarters from the field
program and results from ongoing analysis of historical data.
About ARC
ARC is an exploration joint venture between GreenX and Greenfields Exploration
Limited (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.
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.
Historical field programs identified widespread copper-silver occurrences at
surface:
· geochemical sampling found that 80% of stream sediment samples
contain native copper
· native copper is found in situ or as float, with individual clasts
of native copper weighing up to 1 kg+
· high grade copper sulphides, grading up to 2.15% Cu and 35.5g/t Ag
over 4.5m true width, are known from trench sampling of fault zones within
sediments (see GreenX announcement dated 20 January 2022 entitled "New Copper
Targets Identified at ARC")
· assay results from individual samples are much higher grade,
including:
o 53.8% Cu and 2,480g/t Ag o 7.9% Cu and 53 g/t Ag
o 20.7% Cu and 488g/t Ag o 5.3% Cu and 112 g/t Ag
o 12.5% Cu and 385g/t Ag o 5.0% Cu and 304 g/t Ag
o 9.0% Cu and 112 g/t Ag o 4.0% Cu and 82 g/t Ag
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 prospectivity of copper deposits and will be a
will be a key focus of the first field campaign.
There are multiple targets and favourable geological settings considered to be
prospective within the ARC project area, including the following.
· The highly anomalous basalt is a high priority target that has not
previously been the focus of commercial exploration. These basalts are the
source of the native copper.
· The sulphide mineralised faults passing through these basalts into
the overlying sediments have been subject to first pass exploration and shown
to be rich in copper and silver. The high-grade sulphides in these faults will
be the focus of further exploration.
· The permeable coarse-grained sandstone within the Jyske Ås Fm has
high grade copper that is effectively unexplored. This stratiform
mineralisation adds the potential for significant lateral extension of the
known mineralisation exposed in the faults of the Discovery Zone.
As such, the extensive ARC mineral system is known to be prospective for
basalt, fault, and sedimentary rock-hosted ('sediment-hosted') mineralisation
that despite the attractive grades, is virtually unexplored.
CORPORATE
Financial Position
During the quarter, the Company completed the sales of land and buildings,
previously held for sale, owned by the Company in Poland for the total receipt
of A$1.9 million (before costs).
As at 30 June 2022, GreenX had A$6.1 million cash available plus A$8.3 million
available to pursue its dispute against the Republic of Poland.
DISPUTE WITH POLISH GOVERNMENT
Subsequent to the quarter end, the Company reported that as part of the
ongoing 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), GreenX had filed
its Statement of Reply in the BIT arbitration.
This is the final material filing that GreenX will make for the BIT
arbitration, with the next steps being for Poland to lodge their final filing
(the Rejoinder) followed by a hearing to be conducted in front of the
Tribunal.
Based upon revised external expert reports in response to Poland's Statement
of Defence, GreenX is now seeking compensation in the amount of £737 million
(equivalent to A$1.3 billion or PLN 4.0 billion).
Details of the Claim
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 BIT and ECT claim Tribunals have been constituted, with both Claims
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
revised claim for damages against Poland with the Tribunal in the amount of
£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 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 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.
In September 2020, GreenX announced that it had formally commenced with the
Claim by serving the Notices of Arbitration against the Republic of Poland. In
June 2021, GreenX announced that it had formally lodged its Statement of Claim
in the BIT arbitration, including the first assessed claim for compensation.
The Company's Statement of Reply, the last material filing to be made by the
Company for the BIT arbitration proceedings, has now been filed. The Statement
of Reply addresses various points raised by the Republic of Poland in their
Statement of Defence. The Statement of Reply also contains a re-evaluation of
the claim for damages based on responses to Poland's Statement of Claim.
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. 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 formally proceeded with 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 bought 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 Lumina Copper (Copper) and InvEnergy (wind farms).
-ENDS-
Forward Looking Statements
This release may include forward-looking statements. These forward-looking
statements are based on GreenX's expectations and beliefs concerning future
events. Forward looking statements are necessarily subject to risks,
uncertainties and other factors, many of which are outside the control of
GreenX, which could cause actual results to differ materially from such
statements. GreenX makes no undertaking to subsequently update or revise the
forward-looking statements made in this release, to reflect the circumstances
or events after the date of that release.
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.
To view this announcement in full, including all figures and illustrations,
please refer to www.greenxmetals.com.
APPENDIX 1: TENEMENT INFORMATION
As at 30 June 2022, the Company has an interest in the following tenements:
Location Tenement Percentage Status Tenement Type
Interest
Greenland Arctic Rift Copper Project (Licence No. 2021-07 MEL-S) -(1) Granted Exploration Licence
Jan Karski, Poland Jan Karski Mine Plan Area (K-4-5, K6-7, K-8 and K-9)(2) 100 In dispute(2) Exclusive Right to apply for a mining concession
Debiensko, Poland Debiensko 1 100 Granted(2) Mining
Debiensko, Poland Kaczyce 1 100 Granted Mining & Exploration (includes gas rights)
Notes:
(1 ) In October 2021, the Company announced that it had entered
into an Earn-In Agreement (EIA) with GEX to acquire an interest of up to 80%
in ARC. As at the date of this announcement, the Company held no beneficial
interest in ARC, other than through the EIA.
(2 ) GreenX formally commenced international arbitration claims
against the Republic of Poland under both the ECT and the BIT in 2021. GreenX
alleges that the Republic of Poland has breached its obligations under the
Treaties through its actions to block the development of the Company's Jan
Karski and Debiensko mines in Poland.
Appendix 2: Related Party Payments
During the quarter ended 30 June 2022, the Company made payments of $204,000
to related parties and their associates. These payments relate to existing
remuneration arrangements (director fees, consulting fees and superannuation
of ($164,000) and the provision of a serviced office and company secretarial
and administration services ($40,000).
Appendix 3: Exploration and Mining Expenditure
During the quarter ended 30 June 2022, the Company made the following payments
in relation to exploration activities:
Activity $000
Greenland (ARC)
Project Management 163
Geochem and imagery -
Other (field supplies, travel, fuel, satellite imagery, etc) 109
Greenland sub-total as reported in the Appendix 5B (item 2.1(d)) 272
Poland
Legal and permitting related expenditure 94
Consultants - technical and Debiensko statutory operations personnel 90
Other 50
Poland sub-total as reported in the Appendix 5B (item 1.2(a)) 234
Total 506
There were no mining or production activities and expenses incurred during the
quarter ended 30 June 2022.
Appendix 5B
Mining exploration entity or oil and gas exploration entity
quarterly cash flow report
Name of entity
GreenX Metals Limited
ABN Quarter ended ("current quarter")
23 008 677 852 30 June 2022
Consolidated statement of cash flows Current quarter Year to date
$A'000
(12 months)
$A'000
1. Cash flows from operating activities - -
1.1 Receipts from customers
1.2 Payments for (234)* (1,014)*
(a) exploration & evaluation
(b) development - -
(c) production - -
(d) staff costs (208) (725)
(e) administration and corporate costs (193) (1,246)
1.3 Dividends received (see note 3) - -
1.4 Interest received 8 23
1.5 Interest and other costs of finance paid - -
1.6 Income taxes paid - -
1.7 Government grants and tax incentives - -
1.8 Other (provide details if material)
(a) Business Development (6) (131)
(b) Property rental and gas sales 95 264
(c) Arbitration related expenses (497) (1,739)
(d) Receipt of arbitration funding 555 1,733
1.9 Net cash from / (used in) operating activities (480) (2,835)
*includes legal and permitting expenditure and payments made to consultants
(Debiensko technical statutory operations personnel).
2. Cash flows from investing activities - -
2.1 Payments to acquire or for:
(a) Entities
(b) Tenements - (30)
(c) property, plant and equipment (427) (972)
(d) exploration & evaluation (272) (1,076)
(e) investments - -
(f) other non-current assets - -
2.2 Proceeds from the disposal of: - -
(a) entities
(b) tenements - -
(c) property, plant and equipment 1,613 1,891
(d) investments - -
(e) other non-current assets - -
2.3 Cash flows from loans to other entities - -
2.4 Dividends received (see note 3) - -
2.5 Other (provide details if material) - -
2.6 Net cash from / (used in) investing activities 914 (187)
3. Cash flows from financing activities - 4,453
3.1 Proceeds from issues of equity securities (excluding convertible debt
securities)
3.2 Proceeds from issue of convertible debt securities - -
3.3 Proceeds from exercise of options - -
3.4 Transaction costs related to issues of equity securities or convertible debt - (122)
securities
3.5 Proceeds from borrowings - -
3.6 Repayment of borrowings - -
3.7 Transaction costs related to loans and borrowings - -
3.8 Dividends paid - -
3.9 Other (provide details if material) - -
3.10 Net cash from / (used in) financing activities - 4,331
4. Net increase / (decrease) in cash and cash equivalents for the period
4.1 Cash and cash equivalents at beginning of period 5,674 4,762
4.2 Net cash from / (used in) operating activities (item 1.9 above) (480) (2,835)
4.3 Net cash from / (used in) investing activities (item 2.6 above) 914 (187)
4.4 Net cash from / (used in) financing activities (item 3.10 above) - 4,331
4.5 Effect of movement in exchange rates on cash held - 37
4.6 Cash and cash equivalents at end of period 6,108 6,108
5. Reconciliation of cash and cash equivalents Current quarter Previous quarter
at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts
$A'000
$A'000
5.1 Bank balances 6,108 5,674
5.2 Call deposits - -
5.3 Bank overdrafts - -
5.4 Other (provide details) - -
5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above) 6,108 5,674
6. Payments to related parties of the entity and their associates Current quarter
$A'000
6.1 Aggregate amount of payments to related parties and their associates included (204)
in item 1
6.2 Aggregate amount of payments to related parties and their associates included -
in item 2
Note: if any amounts are shown in items 6.1 or 6.2, your quarterly activity
report must include a description of, and an explanation for, such payments.
7. Financing facilities Total facility amount at quarter end Amount drawn at quarter end
Note: the term "facility' includes all forms of financing arrangements available to the entity.
$A'000
$A'000
Add notes as necessary for an understanding of the sources of finance available to the entity.
7.1 Loan facilities 17,855* 9,586
7.2 Credit standby arrangements - -
7.3 Other (please specify) - -
7.4 Total financing facilities 17,855* 9,586
7.5 Unused financing facilities available at quarter end 8,269
7.6 Include in the box below a description of each facility above, including the
lender, interest rate, maturity date and whether it is secured or unsecured.
If any additional financing facilities have been entered into or are proposed
to be entered into after quarter end, include a note providing details of
those facilities as well.
On
30
Jun
e
202
0,
the
Com
pan
y
exe
cut
ed
a
Lit
iga
tio
n
Fun
din
g
Agr
eem
ent
(LF
A)
for
US$
12.
3
mil
lio
n
(*n
ow
wor
th
A$1
7.8
6
mil
lio
n
wit
h
the
mov
eme
nt
of
the
A$
com
par
ed
to
the
$US
)
wit
h
LCM
Fun
din
g
UK
Lim
ite
d a
sub
sid
iar
y
of
Lit
iga
tio
n
Cap
ita
l
Man
age
men
t
Lim
ite
d
(LC
M),
to
pur
sue
dam
age
s
cla
ims
in
rel
ati
on
to
the
inv
est
men
t
dis
put
e
bet
wee
n
Gre
enX
and
the
Pol
ish
Gov
ern
men
t
tha
t
has
ari
sen
out
of
cer
tai
n
mea
sur
es
tak
en
by
Pol
and
in
bre
ach
of
the
Ene
rgy
Cha
rte
r
Tre
aty
and
the
Aus
tra
lia
-
Pol
and
Bil
ate
ral
Inv
est
men
t
Tre
aty
(BI
T).
LCM
wil
l
pro
vid
e
up
to
US$
12.
3mi
lli
on
(~A
$17
.86
mil
lio
n),
den
omi
nat
ed
in
US$
,
in
lim
ite
d
rec
our
se
fin
anc
ing
whi
ch
is
rep
aya
ble
to
LCM
in
the
eve
nt
of
a
suc
ces
sfu
l
Cla
im
or
set
tle
men
t
of
the
Dis
put
e
tha
t
res
ult
s
in
the
rec
ove
ry
of
any
mon
ies
.
If
the
re
is
no
set
tle
men
t
or
awa
rd,
the
n
LCM
is
not
ent
itl
ed
to
any
rep
aym
ent
of
the
fin
anc
ing
fac
ili
ty.
In
ret
urn
for
pro
vid
ing
the
fin
anc
ing
fac
ili
ty,
LCM
sha
ll
be
ent
itl
ed
to
rec
eiv
e
rep
aym
ent
of
any
fun
ds
dra
wn
plu
s
an
amo
unt
equ
al
to
bet
wee
n
two
and
fiv
e
tim
es
the
tot
al
of
any
fun
ds
dra
wn
fro
m
the
fun
din
g
fac
ili
ty
dur
ing
the
fir
st
fiv
e
yea
rs,
dep
end
ing
on
the
tim
e
fra
me
ove
r
whi
ch
fun
ds
hav
e
rem
ain
ed
dra
wn,
and
the
n a
30%
int
ere
st
rat
e
aft
er
the
fif
th
yea
r
unt
il
rec
eip
t
of
dam
age
s
pay
men
ts.
8. Estimated cash available for future operating activities $A'000
8.1 Net cash from / (used in) operating activities (item 1.9) (480)
8.2 (Payments for exploration & evaluation classified as investing activities) (272)
(item 2.1(d))
8.3 Total relevant outgoings (item 8.1 + item 8.2) (752)
8.4 Cash and cash equivalents at quarter end (item 4.6) 6,108
8.5 Unused finance facilities available at quarter end (item 7.5) 8,269
8.6 Total available funding (item 8.4 + item 8.5) 14,377
8.7 Estimated quarters of funding available (item 8.6 divided by item 8.3) >10
No
te
:
if
th
e
en
ti
ty
ha
s
re
po
rt
ed
po
si
ti
ve
re
le
va
nt
ou
tg
oi
ng
s
(i
e
a
ne
t
ca
sh
in
fl
ow
)
in
it
em
8
.3
,
an
sw
er
it
em
8
.7
as
"N
/A
".
Ot
he
rw
is
e,
a
fi
gu
re
fo
r
th
e
es
ti
ma
te
d
qu
ar
te
rs
of
fu
nd
in
g
av
ai
la
bl
e
mu
st
be
in
cl
ud
ed
in
it
em
8.
7.
8.8 If item 8.7 is less than 2 quarters, please provide answers to the following
questions:
8.8.1 Does the entity expect that it will continue to have the current
level of net operating cash flows for the time being and, if not, why not?
Answer: Not applicable
8.8.2 Has the entity taken any steps, or does it propose to take any
steps, to raise further cash to fund its operations and, if so, what are those
steps and how likely does it believe that they will be successful?
Answer: Not applicable
8.8.3 Does the entity expect to be able to continue its operations and
to meet its business objectives and, if so, on what basis?
Answer: Not applicable
Note: where item 8.7 is less than 2 quarters, all of questions 8.8.1, 8.8.2
and 8.8.3 above must be answered.
Compliance statement
1 This statement has been prepared in accordance with accounting
standards and policies which comply with Listing Rule 19.11A.
2 This statement gives a true and fair view of the matters
disclosed.
Date: 28 July 2022
Authorised by: Company Secretary
(Name of body or officer authorising release - see note 4)
Notes
1. This quarterly cash flow report and the accompanying
activity report provide a basis for informing the market about the entity's
activities for the past quarter, how they have been financed and the effect
this has had on its cash position. An entity that wishes to disclose
additional information over and above the minimum required under the Listing
Rules is encouraged to do so.
2. If this quarterly cash flow report has been prepared in
accordance with Australian Accounting Standards, the definitions in, and
provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and
AASB 107: Statement of Cash Flows apply to this report. If this quarterly cash
flow report has been prepared in accordance with other accounting standards
agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent
standards apply to this report.
3. Dividends received may be classified either as cash flows
from operating activities or cash flows from investing activities, depending
on the accounting policy of the entity.
4. If this report has been authorised for release to the
market by your board of directors, you can insert here: "By the board". If it
has been authorised for release to the market by a committee of your board of
directors, you can insert here: "By the [name of board committee - eg Audit
and Risk Committee]". If it has been authorised for release to the market by a
disclosure committee, you can insert here: "By the Disclosure Committee".
5. If this report has been authorised for release to the
market by your board of directors and you wish to hold yourself out as
complying with recommendation 4.2 of the ASX Corporate Governance Council's
Corporate Governance Principles and Recommendations, the board should have
received a declaration from its CEO and CFO that, in their opinion, the
financial records of the entity have been properly maintained, that this
report complies with the appropriate accounting standards and gives a true and
fair view of the cash flows of the entity, and that their opinion has been
formed on the basis of a sound system of risk management and internal control
which is operating effectively.
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