REG - GreenX Metals Ltd - Quarterly Activities Report March 2022
29/04/2022 07:00
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RNS Number : 7925J GreenX Metals Limited 29 April 2022
GREENX METALS LIMITED
NEWS RELEASE | 29 April 2022
Quarterly Activities Report March 2022
HIGHLIGHTS
· New copper targets identified at Arctic Rift Copper Project in
Greenland (ARC or Project) from ongoing geological analysis.
o Latest analysis identifies new "walk-up" native copper and copper sulphide
targets for upcoming field program.
o New priority, walk-up, at-surface target identified along the Knuth Fault
which is a Discovery Zone "lookalike" feature.
o Two additional exposures of native copper mineralisation identified from
recently unearthed historical documentation at Neergaard Dal.
· Company is preparing for its maiden exploration program on the ground
at ARC which will commence in the June quarter.
· Completion of Entitlements Issue to fund new and current activities
announced concurrently with ARC earn-in. Following interest from investors in
the UK and Europe, GreenX raised gross proceeds of A$4.5 million.
· 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 at 31 March 2022 of A$5.7 million to fund activities at
ARC plus A$9.4 million available to continue pursuing GreenX's dispute against
the Republic of Poland.
GreenX Metals Limited (ASX:GRX, LSE:GRX) (GreenX or Company) is is pleased to
present its Quarterly Activities Report for the period during and subsequent
to 31 March 2022.
ARC PROJECT SUMMARY
In October 2021, GreenX entered into an Earn-in Agreement (EIA) with
Greenfields Exploration Limited (GEX) to acquire an interest of up to 80% in
ARC.
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.
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.
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(1) 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.
ARC MAIDEN EXPLORATION PROGRAM
In the June quarter, the Company will commence its maiden exploration
programme at ARC. GEX are currently preparing to travel to Greenland to
initially complete:
· Widespread geochemical sampling.
· Sampling and analysis of the already identified walk-up targets,
including the Discovery Zone
· Passive seismic over the Minik Anomaly and 3D induced polarisation
(IP) surveys.
· High-resolution satellite mapping and the re-analysis of historical
samples and magnetic data to create an ARC 3D model.
CORPORATE
Entitlements Issue & Shortfall Offer
Following significant interest from potential new investors in the UK and
Europe, the Company completed the Entitlements issue to raise total gross
proceeds of A$4.5m.
Financial Position
As at 31 March 2022, GreenX had A$5.7 million cash available plus A$9.4
million available to pursue its dispute against the Republic of Poland.
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 Litigation Funding
Agreement 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).
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.
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.
This announcement has been authorised for release by the Company's Chief
Executive Officer, Mr Ben Stoikovich.
To view this announcement in full including all figures, please refer to
www.greenxmetals.com (http://www.greenxmetals.com) .
(1 )Munro, Mark (2021). "Structural Review of the Arctic Rift Copper Project,
Greenland", Munro Geoscience Pty Ltd
APPENDIX 1: TENEMENT INFORMATION
As at 31 March 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 the 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 commenced international arbitration claims against
the Republic of Poland under both the ECT and the BIT. 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 31 March 2022, the Company made payments of $212,000
to related parties and their associates. These payments relate to existing
remuneration arrangements (director fees, consulting fees and superannuation
of ($132,000) and the provision of a serviced office and company secretarial
and administration services ($80,000).
Appendix 3: Exploration and Mining Expenditure
During the quarter ended 31 March 2022, the Company made the following
payments in relation to exploration activities:
Activity $000
Greenland (ARC)
Project Management 163
Geochem and imagery 8
Other (field supplies, travel, fuel, satellite imagery, etc) 248
Greenland sub-total as reported in the Appendix 5B (item 2.1(d)) 419
Poland
Legal and permitting related expenditure 91
Consultants - technical and Debiensko statutory operations personnel 87
Other 79
Poland sub-total as reported in the Appendix 5B (item 1.2(a)) 257
Total 676
There were no mining or production activities and expenses incurred during the
quarter ended 31 March 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 31 March 2022
Consolidated statement of cash flows Current quarter Year to date
$A'000
(9 months)
$A'000
1. Cash flows from operating activities - -
1.1 Receipts from customers
1.2 Payments for (257)* (781)*
(a) exploration & evaluation
(b) development - -
(c) production - -
(d) staff costs (175) (516)
(e) administration and corporate costs (449) (1,052)
1.3 Dividends received (see note 3) - -
1.4 Interest received 5 14
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 (17) (125)
(b) Property rental and gas sales 77 169
(c) Arbitration related expenses (501) (1,242)
(d) Receipt of arbitration funding 240 1,178
1.9 Net cash from / (used in) operating activities (1,077) (2,355)
*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 (296) (543)
(d) exploration & evaluation (419) (805)
(e) investments - -
(f) other non-current assets - -
2.2 Proceeds from the disposal of: - -
(a) entities
(b) tenements - -
(c) property, plant and equipment 18 278
(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 (697) (1,100)
3. Cash flows from financing activities 3,552 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 (99) (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 3,453 4,331
4. Net increase / (decrease) in cash and cash equivalents for the period
4.1 Cash and cash equivalents at beginning of period 3,960 4,762
4.2 Net cash from / (used in) operating activities (item 1.9 above) (1,077) (2,355)
4.3 Net cash from / (used in) investing activities (item 2.6 above) (697) (1,100)
4.4 Net cash from / (used in) financing activities (item 3.10 above) 3,453 4,331
4.5 Effect of movement in exchange rates on cash held 35 36
4.6 Cash and cash equivalents at end of period 5,674 5,674
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 5,674 3,960
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) 5,674 3,960
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 (212)
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
$A'000
Add notes as necessary for an understanding of the sources of finance available to the entity.
7.1 Loan facilities 16,400* 7,020
7.2 Credit standby arrangements - -
7.3 Other (please specify) - -
7.4 Total financing facilities 16,400* 7,020
7.5 Unused financing facilities available at quarter end 9,380
7.6 Include in the box below a description of each facility above, including the
lender, interest rate, maturity date and whether it is secured or unsecured.
If any additional financing facilities have been entered into or are proposed
to be entered into after quarter end, include a note providing details of
those facilities as well.
On
30
Jun
e
202
0,
the
Com
pan
y
exe
cut
ed
a
Lit
iga
tio
n
Fun
din
g
Agr
eem
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(LF
A)
for
US$
12.
3
mil
lio
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(*n
ow
wor
th
A$1
6.4
mil
lio
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wit
h
the
mov
eme
nt
of
the
A$
com
par
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to
the
$US
)
wit
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LCM
Fun
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UK
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sub
sid
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of
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Man
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men
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Lim
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(LC
M),
to
pur
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dam
age
s
cla
ims
in
rel
ati
on
to
the
inv
est
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t
dis
put
e
bet
wee
n
Gre
enX
and
the
Pol
ish
Gov
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t
has
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out
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mea
sur
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tak
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by
Pol
and
in
bre
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of
the
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Cha
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Tre
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and
the
Aus
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Pol
and
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ate
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Inv
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(BI
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up
to
US$
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3mi
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(~A
$16
.4
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den
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in
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our
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fin
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whi
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is
rep
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to
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in
the
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nt
of
a
suc
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sfu
l
Cla
im
or
set
tle
men
t
of
the
Dis
put
e
tha
t
res
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s
in
the
rec
ove
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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
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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) (1,077)
8.2 (Payments for exploration & evaluation classified as investing activities) (419)
(item 2.1(d))
8.3 Total relevant outgoings (item 8.1 + item 8.2) (1,496)
8.4 Cash and cash equivalents at quarter end (item 4.6) 5,674
8.5 Unused finance facilities available at quarter end (item 7.5) 9,380
8.6 Total available funding (item 8.4 + item 8.5) 15,054
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
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va
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ou
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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: 29 April 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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