REG - Gunsynd PLC - Half-year Report
19/04/2022 07:00
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RNS Number : 5575I Gunsynd PLC 19 April 2022
Gunsynd plc
("Gunsynd", or "the Company")
Interim Results for the six months ended 31 January 2022
Chairman's Statement
I am pleased to report the interim results for the six months ended 31 January
2022.
Review of Investments
Low 6 Limited ("Low6")
Low6 completed US$5 million financing during January and February 2022
supported by existing shareholders, together with new sophisticated North
American investors. As announced on 2 February 2022, Low6 entered into a
binding letter of agreement with 1319735 B.C. Ltd. ("735"), a British
Columbian corporation with a view to undertaking a transaction that would
result in a reverse takeover of 735 by Low6 while at the same time pursuing a
listing of the combined entity on the TSX Venture Exchange.
Gunsynd holds 6,667 shares (for approximately £200,000) together with a
£65,000 convertible loan note.
The key growth drivers for new business in the coming years is Low6's iGaming
white label technology platform and this has already helped Low6 achieve a
major new business milestone. Low6 has won a seven-figure contract to become
the official supplier of "free to play" games for an iGaming provider for the
next two years, with an option to extend for a third.
Rincon Resources Pty Ltd ("Rincon")
Gunsynd holds 8.9 million shares representing approximately 17% of Rincon's
issued share capital.
Rincon is a Western Australian ("WA") focussed gold and base metals
exploration company quoted on the ASX. It holds the rights to three highly
prospective gold and copper projects in WA, with a main focus on the South
Telfer Project, covering 50,000-hectares in Paterson province.
During the period, the 5,000m Phase 2 reverse circulation ("RC") and diamond
drilling ("DD") programme at Hasties has recommenced. DD drilling is set to
test the 'Hasties Deeps' target area, 300m below surface. The Phase 2 drilling
programme initially commenced in December 2021, with 7 RC holes completed for
1,476m. Approximately 3,000m remains to be drilled, including up to 8 RC and 2
DD holes.
Eagle Mountain Mining Limited ("Eagle Mountain")
Gunsynd holds 2.5 million shares in Eagle Mountain representing approximately
1% of its issued share capital.
Eagle Mountain Mining Limited (ASX:EM2), is a copper focused exploration and
development company with a key objective of becoming a low emission producer
at its high-grade Oracle Ridge project in Arizona, USA, to supply the rapidly
growing green energy market.
During the period, the Eagle Mountain updated its JORC Mineral Resource
Estimate ("MRE") for the Oracle Ridge Copper Project. Using a 1.0% Cu cut-off
grade, the company delivered an updated figure of 17.0 Mt grading 1.48% Cu,
15.09g/t Ag and 0.17g/t Au for 251,000t of contained copper, 8.2Moz of silver
and 93Koz of gold. Compared to the previous MRE, contained copper increased by
36% with a 39% increase in tonnes. Furthermore, since the MRE cut-off date, a
further 60 holes have been completed that were not included in the resource.
Eagle Mountain continues to be well funded following completion of a AUD$16m
equity financing in early April 2022.
Rogue Baron Limited ("Rogue Baron")
Rogue Baron PLC (AQSE: SHNJ) is a leading company in the premium spirit sector
which listed on the Access segment of the AQSE Growth Market on 12 March 2021.
Gunsynd currently holds 21,543,563 ordinary shares in Rogue Baron,
representing approximately 24% of its issued share capital. Gunsynd also
retains a balance of £111,464 of Convertible Loan Notes consisting of accrued
interest.
Rogue Baron's flagship Shinju Whisky won two medals in October 2021 including
a double gold with a perfect score of 100 when voted best whisky at the 2021
Sante' International Spirit Competition. During the period Rogue Baron closed
down the smaller of its two Washington DC bars to concentrate on the new and
much larger venue (De Rhum Spot). In November Shinju won another gold medal,
this time at the prestigious John Barleycorn awards.
In April 2022, Rogue Baron announced it had secured new distribution deals in
both the UK and Spain for Shinju.
Charger Metals Limited ("Charger")
Gunsynd currently holds 3,000,000 shares in Charger representing approximately
6% of Charger's issued share capital, of which 1,200,000 shares are subject to
an escrow period of 24 months following its IPO on 7 July 2021.
Charger is a Western Australian ("WA") focussed base metals (Ni,Cu,Co-PGE) and
lithium exploration company which currently holds three highly prospective
projects in WA and the Northern Territory ("NT") in Australia. Charger has an
85% interest in the Coates North Project and 70% interest in the adjacent
Coates Ni-Cu-Co-PGE Project (WA), 70% interest in the Lake Johnson Lithium and
Gold Project (WA) and 70% interest in the Bynoe Lithium and Gold Project (NT).
In March 2022, Charger announced its drilling schedule for the Coates North
Project and the Coates Ni-Cu-Co-Au-PGE Project (together "Coates Project"),
located 65km northeast of Perth, Western Australia. The Coates Project
contains a mafic intrusive complex within the Jimperding Metamorphic Belt,
which also hosts the 17Moz PdEq Julimar - Gonneville nickel-copper-PGE Project
owned by Chalice Mining Ltd (ASX: CHN) and located 28km NW of the Coates
Project. Charger announced in April 2022 that it expects the maiden drill
programme to commence shortly at the Coates Project, with five diamond core
drill holes planned to test conductor targets for economic mineralisation.
First Tin Limited ("First Tin") Formerly Anglo Saxony Mining Limited ("ASM")
In March 2021, Gunsynd invested £125,000 in ASM, a now public tin development
and exploration company, as part of a wider £6m funding round. In April 2022,
Gunsynd invested a further £75,000 in the IPO of First Tin which was part of
a £20,000,000 IPO fundraise.
First Tin, a tin development company with advanced, low capex projects in
Germany and Australia, commenced trading of its ordinary shares to trading on
the Main Market of the London Stock Exchange on 8 April 2022, with the TIDM
1SN.
First Tin plans to establish sustainable tin production and processing from
the Tellerhäuser Mine in Saxony, Germany. The Tellerhäuser Mine has a
50-year mining licence granted in 2020 with final permitting well advanced.
Pacific Nickel Limited ("Pacific Nickel")
During the period Pacific Nickel made good progress on its two tenements in
the Solomon Islands. In October 2021 it announced an initial JORC resources
estimate for its Jejevo licence. In September it commenced stage two infill
drilling at its Kolosori tenement. In October 2021 it announced that 90 infill
holes had been drilled as part of the second stage 151-hole drill programme
designed to increase the confidence of the existing mineral resource estimate
of 5.89Mt at 1.55% Ni at 1.2% Ni cut off and that discussions with potential
Direct Ship Ore ("DSO") off-take partners had commenced.
Pacific Nickel successfully raised AUD$5.25m in October 2021 to advance both
its Solomon Islands projects. In November 2021, it announced both assay
results from 27 drill holes at Kolosori and an executive summary of a scoping
study for its Kolosori DSO project. In December 2021, Pacific Nickel announced
that it had initiated an early works programme. This programme was
successfully completed in March 2022. Finally in April 2022, Pacific Nickel
advised it had received a number of proposals with respect to offtake
agreements for its Kolosori project and that its mining lease application was
under consideration by the Solomon Islands government.
Oscillate plc ("Oscillate")
Oscillate is an investment company listed on the AQSE Growth Market Exchange
with the ticker, AQSE: MUSH. In April 2021, Gunsynd invested £200,000 into
Oscillate being 10 million shares at 2p representing circa 4.5% of Oscillate.
Other than a change at board level, very little has happened since the year
end.
Oyster Oil and Gas Limited ("Oyster")
Gunsynd has a holding valued at £130k, and there has been no material change
since year end. The rising oil price gives the Company confidence of restoring
value. Gunsynd will update the market as and when material developments occur.
Overview
All of our investments are minority investments. Whilst we may offer advice to
management of investee companies in this regard, they can, and sometimes do,
ignore such advice. Similarly, private companies don't have the disclosure
requirements of public companies and are under no obligation to keep us
regularly updated. It should be noted that the Company does not operate its
investment projects/companies on a day-to-day basis and whilst the Board looks
to structure investments in a format where Gunsynd can obtain a high level of
oversight (including at board level) and use legal agreements to provide
control mechanisms to protect the Company's investments, there is a risk that
the operator does not meet deadlines or budgets, fails to pursue the
appropriate strategy, does not adhere to the legal agreements in place or does
not provide accurate or sufficient information to Gunsynd. Decisions are
ultimately made by investee companies and not by Gunsynd.
The level of administrative costs in the year can fluctuate significantly
depending on the level of costs in the Company and can fluctuate significantly
depending on the level of activity, both with regard to the due diligence work
carried out on investments and disposals, and in managing project investments.
Finance Review
The Company's loss for the period was £310,000 (31 January 2021: £1,032,000
profit). The realised and unrealised market valuation on financial investments
for the period was a loss of £56,000 (31 January 2021: £1,280,000 gain).
The Company had net assets at 31 January 2022 of £5,993,000 (31 January 2021:
£4,848,000) including cash balances of £1,082,000 (31 January 2021:
£1,000,000).
Outlook
We previously stated "Debate lingers over whether the effects are a temporary
hiccup or the harbinger of structural changes. We are far from convinced that
the current inflation level is just a blip, hence our positioning towards gold
and copper." We stand by that. The policy response by politicians the world
over to Covid has now clearly been shown to have been vastly overdone. With
governments lacking the courage to curtail spending and with central banks
very aware that sustained interest rate increases may well cause a recession
and possibly even a sovereign debt crisis, we believe that on the balance of
probabilities the base case is for inflation to remain higher than in recent
years and commodity prices to remain elevated for at least the medium term if
not longer. Whilst at the junior resource company level in the UK there is
clearly a disconnect between commodity and share prices, history tells us that
at some stage reversion to mean will occur i.e. either share prices go up or
commodity prices will fall. We believe the former is more likely than the
latter.
As a well known investor once said "Price is what you pay, and value is what
you get".
The Board continues to look at investments in line with its investment policy
as highlighted on its website. Such investment(s) may or may not lead to a
reverse takeover.
The Board would like to take this opportunity to thank shareholders for their
continued support.
Hamish Harris
Chairman
This announcement contains inside information for the purposes of the UK
Market Abuse Regulation and the Directors of the Company are responsible for
the release of this announcement.
For further information, please contact:
Gunsynd plc:
Hamish Harris / Peter Ruse +44 (0) 78 7958 4153
Cairn Financial Advisers LLP
James Caithie / Liam Murray / James Western +44 (0) 20 7213 0880
Peterhouse Capital Limited
Lucy Williams +44 (0) 20 7469 0936
The interim results will be available electronically on the Company's website:
www.gunsynd.com (http://www.gunsynd.com) .
Gunsynd plc
Interim statement of comprehensive income - unaudited
For the six months ended 31 January 2022
Unaudited Unaudited Audited
Six months ended
Six months ended
Year
31 January
31 January
ended
2022 2021
31 July
2021
£'000 £'000 £'000
Unrealised (loss)/gain on financial investments (170) 1,166 2,371
Realised gain on financial investments 114 114 236
(56) 1,280 2,607
Administrative and other costs (254) (252) (523)
Impairment of financial investments - - (130)
Write down of convertible loan notes - - (2)
Share based payment charge - (25) (24)
Other income - - 26
Finance income - 29 58
(Loss)/profit before tax (310) 1,032 2,012
Taxation
(Loss)/profit for the period (310) 1,032 2,012
(Loss)/profit for the period and total comprehensive (loss)/profit (310) 1,032 2,012
attributable to equity shareholders
Other comprehensive (expenditure)/income for the period net of tax - - -
Total comprehensive (expenditure)/income for the period (310) 1,032 2,012
(Loss)/earnings per ordinary share
Basic (0.069) 0.341 0.558
Diluted (0.069) 0.256 0.428
Gunsynd plc
Interim statement of financial position - unaudited
As at 31 January 2022
Unaudited Unaudited Audited
At 31 January 2022
At 31 January 2021
At 31 July
2021
£'000 £'000 £'000
ASSETS
Non-current assets
Financial investments 4,817 3,704 5,124
Trade and other receivables - 49 -
Total non-current assets 4,817 3,753 5,124
Current assets
Trade and other receivables 156 185 174
Cash and cash equivalents 1,082 1,000 1,071
Total current assets 1,238 1,185 1,245
Total assets 6,055 4,938 6,369
LIABILITIES
Current liabilities
Trade and other payables (62) (90) (66)
Total current liabilities (62) (90) (66)
Total liabilities (62) (90) (66)
Net assets 5,993 4,848 6,303
EQUITY
Equity attributable to equity holders of the company
Ordinary share capital 382 332 382
Deferred share capital 2,299 2,299 2,299
Share premium reserve 13,459 13,033 13,459
Share-based payments reserve 131 216 131
Retained earnings (10,278) (11,032) (9,968)
Total equity 5,993 4,848 6,303
Gunsynd plc
Interim statement of changes in equity - unaudited
For the six months ended 31 January 2022
Ordinary Share Capital Deferred share capital Share Premium Share Based Payment Reserve Retained earnings Total
£'000 £'000 £'000 £'000 £'000 £'000
Unaudited (restated)
At 31 July 2020 216 2,299 11,828 192 (12,065) 2,470
Profit for the six month period ended 31 January 2021 - - - - 1,032 1,032
Total comprehensive income for the period - - - - 1,032 1,032
Issue of share capital 116 - 1,261 - - 1,377
Share issue costs - - (56) - - (56)
Share options issued - - - 25 - 25
Share options lapsed - - - (1) 1 -
At 31 January 2021 332 2,299 13,033 216 (11,032) 4,848
Audited
At 31 July 2020 216 2,299 11,828 192 (12,065) 2,470
Profit for the year - - - - 2,012 2,012
Total comprehensive income for the year - - - - 2,012 2,012
Transactions with owners:
Issue of share capital 166 - 1,690 - - 1,856
Share issue costs - - (59) - - (59)
Share options issued - - - 24 - 24
Share options lapsed - - - (84) 84 -
Transfer within Equity - - - (1) 1 -
At 31 July 2021 382 2,299 13,459 131 (9,968) 6,303
Unaudited
At 31 July 2021 382 2,299 13,459 131 (9,968) 6,303
Loss for the six month period ended 31 January 2022 - - - - (310) (310)
Total comprehensive expenditure for the period - - - - (310) (310)
At 31 January 2022 382 2,299 13,459 131 (10,278) 5,993
Gunsynd plc
Interim statement of cash flows - unaudited
For the six months ended 31 January 2022
Unaudited Unaudited Audited
Six months ended
Six months ended
Year
31 January 2022
31 January 2021
ended
31 July
2021
£'000 £'000 £'000
Cash flows from operating activities
(Loss)/profit after tax (310) 1,032 2,012
Finance income net of finance costs - (29) (58)
Unrealised (gain)/loss on revaluation of financial investments 170 (1,166) (2,371)
Realised (gain)/loss on sale of financial investments (114) (114) (236)
Share based payments - 25 24
Impairment provision - - 130
Write down of convertible loan notes - - 2
Foreign exchange movements - - 3
Operating cash flow before changes in working capital (254) (252) (519)
Movement in trade and other receivables 18 1 7
Movement in trade and other payables (4) (8) (32)
Cash flow from operations (240) (259) (519)
Tax received - - -
Net cash flows from operating activities (240) (259) (519)
Cash flow from investing activities
Payments for financial investments (44) (1,396) (2,143)
Disposal proceeds from sale of financial investments 295 ` 1,042
Repayment of loans to investee company - - 62
Unsecured loans to investee company - (25) (6)
Net cash flow from investing activities 251 (900) (1,045)
Cash flows from financing activities
Proceeds on issuing of ordinary shares - 1,377 1,856
Cost of issue of ordinary shares - (56) (59)
Net cash flow from financing activities - 1,321 1,797
Net increase/(decrease) in cash and cash equivalents 11 162 233
Cash and cash equivalents at start of period 1,071 838 838
Cash and cash equivalents at end of period 1,082 1,000 1,071
Notes to the interim report
For the six months ended 31 January 2022
1 Basis of preparation
As permitted IAS 34, 'Interim Financial Reporting' has not been applied to
these half-yearly results. The financial information of the Company for the
six months ended 31 January 2022 have been prepared in accordance with the
recognition and measurement principles of International Financial Reporting
Standards, International Accounting Standards and Interpretations
(collectively "IFRS") issued by the International Accounting Standards Board
("IASB") as adopted by the European Union ("adopted IFRS") and are in
accordance with IFRS as issued by the IASB. The condensed interim financial
information has been prepared using the accounting policies which will be
applied in the Company's statutory financial statements for the year ending 31
July 2021.
The financial information shown in this publication is unaudited and does not
constitute statutory accounts as defined in Section 434 of the Companies Act
2006. The comparative figures for the financial year ended 31 July 2021 have
been derived from the statutory accounts for 2021. The statutory accounts have
been delivered to the Registrar of Companies. The auditors have reported on
those accounts; their report was unqualified and did not contain statements
under the section 498(2) or 498(3) of the Companies Act 2006.
2 Earnings per share
The calculation of the loss per share is based on the loss attributable to
ordinary shareholders divided by the weighted average number of shares in
issue during the period.
Unaudited Unaudited Audited
Six months ended
Six months ended
Year
31 January 2022
31 January 2021
ended
31 July 2021
£'000 £'000 £'000
(Loss)/profit on ordinary activities after tax (310) 1,032 2,012
Weighted average number of ordinary shares for the purposes of basic 449.80 302.58 362.57
(loss)/earnings per share (millions)
Weighted average number of ordinary shares for the purposes of diluted 543.76 403.95 470.73
(loss)/earnings per share (millions)
Basic (loss)/earnings per share (expressed in pence) (0.069) 0.341 0.558
Diluted (loss)/earnings per share (expressed in pence) (0.069) 0.256 0.428
However, due to losses incurred in the half year there is no dilutive effect
from the potential exercise of the share options in existence.
3 Events after the end of the reporting period
4. Financial Information
The Board of Directors approved this interim report on 14 April 2022.
A copy of this report can be obtained from our website at www.gunsynd.com
Forward Looking Statements
This announcement contains forward-looking statements relating to expected or
anticipated future events and anticipated results that are forward-looking in
nature and, as a result, are subject to certain risks and uncertainties, such
as general economic, market and business conditions, competition for qualified
staff, the regulatory process and actions, technical issues, new legislation,
uncertainties resulting from potential delays or changes in plans,
uncertainties resulting from working in a new political jurisdiction,
uncertainties regarding the results of exploration, uncertainties regarding
the timing and granting of prospecting rights, uncertainties regarding the
Company's ability to execute and implement future plans, and the occurrence of
unexpected events. Actual results achieved may vary from the information
provided herein as a result of numerous known and unknown risks and
uncertainties and other factors.
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