REG - Gunsynd PLC - Half-year Report
06/04/2023 11:30
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RNS Number : 6236V Gunsynd PLC 06 April 2023
Gunsynd plc
("Gunsynd", or "the Company")
Interim Results for the six months ended 31 January 2023
Chairman's Statement
I am pleased to report the unaudited interim results for the six months ended
31 January 2023.
Review of Investments
Charger Metals Limited ("Charger")
Gunsynd currently holds 2,977,060 shares in Charger representing approximately
5% 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 Metals NL is a well-funded lithium exploration company with two highly
prospective lithium projects with sizeable exploration targets. Charger's
drilling at its Lake Johnston Lithium Project recently confirmed the Medcalf
Spodumene Discovery which is surrounded by numerous Yilgarn lithium deposits
in Western Australia. Charger is also about to commence its maiden drill
programme at its Bynoe Lithium Project in the heart of the sought-after
Lichfield lithium belt, near Darwin, NT. Charger is aiming to delineate maiden
lithium JORC resources over both its Lake Johnston and Bynoe Lithium Projects
during the 2023 calendar year.
The most recent ASX quarterly report from Charger issued in January 2023
indicated the following highlights:
Lake Johnston Lithium Project, Western Australia
• Reverse circulation drilling of 17 holes of a 40-hole programme
(2,669 metres), completed at the Medcalf Spodumene Prospect, revealing a
spodumene-bearing pegmatite swarm.
• Multiple spodumene-pegmatites, up to 5 metres wide, intersected
in 15 of 17 holes.
• Drilling resumed in January 2023, continuing to test the 800m by
300m swarm of pegmatites which remain open along strike and at depth.
• Target generation activities within the Mt Day Pegmatite
Prospect continue.
• Acquisition of a 100% interest in the Medcalf West exploration
licence E63/1883, increasing Charger's land position by 33km(2).
• The reversion to a 100% interest in the Pagrus exploration
license E63/1903 for all minerals following the termination of the Okapi gold
and nickel-focussed farm-in joint venture. Charger has previously identified
pegmatites within this tenement.
Bynoe Lithium Project, Northern Territory
• MMP(2) and the AAPA(3) Permits approved for the maiden drill
programme at the Bynoe Project.
• Drill site access clearing well advanced prior to the onset of
the wet season.
Corporate
• ▪ Cash balance at the end of the quarter was AUD$7.08M.
On 3 April 2023, Charger announced high grade lithium drill results at Lake
Johnston. Charger confirmed that further assays had been received for the
maiden reverse circulation (RC) programme completed earlier this year at the
Medcalf Prospect of the Lake Johnston Project, WA. Relevant extracts from this
announcement include:
· High-grade lithium results returned from spodumene-bearing
pegmatites, with significant intersections including:
− 4m @ 2.06% Li2O from 145m (23CRC013)
− 6m @ 1.56% Li2O from 19m (23CRC006)
− 5m @ 1.41% Li2O from 83m (23CRC007)
− 6m @ 1.34% Li2O from 24m (23CRC003)
− 6m @ 1.06% Li2O from 47m (23CRC002)
· The drilling at Medcalf has delineated a swarm of stacked
spodumene-bearing pegmatites up to 13m thick (down-hole) within a 100m wide
corridor
· Spodumene mineralisation has been intersected along 700m of
strike and 250m downdip and remains open in both directions
· Assays for the final eight drill-holes are still pending, with
results expected in the coming weeks
· Preparations are underway for a follow-up drill programme to test
for extensions to the high-grade lithium mineralisation
Rincon Resources Pty Ltd ("Rincon")
Gunsynd holds 11,065,812 shares representing approximately 16.4% of Rincon's
issued share capital.
Rincon (ASX:RCR) 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. Rincon
progressed exploration activities across its projects in Western Australia.
Rincon has a 100% interest in three highly prospective gold and base metal
projects in Western Australia: The South Telfer Copper-Gold Project, Laverton
Gold Project, and Kiwirrkurra Copper-Gold (IOCG) Project. Each project has
been subject to historical exploration, which has identified prospective
mineralised systems. Rincon is systematically exploring these projects, aiming
to delineate economic resources.
The most recent ASX quarterly report from Rincon issued in January 2023
indicated the following highlights:
South Telfer Copper Gold project
· Geophysical re-modelling elevates Recurve to a high-priority
copper-gold target for drilling.
· Three discreet geophysical anomalies identified within new Wilki
Range tenement.
· Aircore drilling along the Hasties-Grace Trend to test VTEM1
target areas for shallow Copper-Gold (Cu-Au) mineralisation was partially
completed in December. The program was cut short due to weather. Initial assay
results are pending.
· Technical review of the Hasties Prospect area progressing.
Kiwirrkurra IOCG2 project
· Consent to Mine endorsements received for granted tenements,
permitting on-ground activities to commence.
· High-resolution AEM3 survey completed with interpretation and
targeting underway.
· High-level review identified critical metals and REE4 potential
at Kiwirrkurra.
· High-grade Gold-Copper-Silver rock-chip results received at
Pokali, including:
− KRWK001 - 5.75g/t Au, 5.71% Cu & 5.25g/t Ag, and
− KWRK043 - 2.87g/t Au, 1.2% Cu & 5.07g/t Ag
Laverton Gold project
· Acquisition of 100% of six (6) new granted exploration tenements
expands the Laverton Gold project footprint by 65%
Corporate
· Cash balance at the end of the quarter was AUD$1.12M.
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. Eagle Mountain commenced its first large diameter
drilling in the Talon area to collect samples for metallurgical testwork which
is necessary for future feasibility studies. Preparations for the
refurbishment of the underground mine are well advanced to enable underground
diamond drilling at the Oracle Ridge Copper Project.
The most recent ASX quarterly report from Eagle Mountain announced on 25
January 2023 indicated the following highlights for its high-grade Oracle
Ridge project:
· Over 2 kilometres of enhanced prospectivity along west side of
the main Oracle Ridge mine running from Hartmann-Homestake mine to the
Stratton mine. High-grade rock-chip assays include:
− Hartman-Homestake Mine:
o 4.42% Cu, 60.80g/t Ag, 0.29% Zn and 0.87% Pb (HH14)
o 3.93% Cu, 344g/t Ag, 0.76% Zn and 3.22% Pb (HH19)
− Historic Stratton workings:
o 8.96% Cu, 79.40 g/t Ag and 0.75g/t Au (E209411)
o 8.63% Cu, 61.90g/t Ag and 0.94g/t Au (E209420)
· Exploration drilling results continued to show resource expansion
potential. Assays included:
− 9.94% Cu, 102g/t Ag and 3.35 g/t Au over 1.3m (WT-22-162) within:
o 29.7m at 1.30% Cu, 14.37 g/t Ag and 0.34g/t Au from 294m
− 9.1m at 1.67% Cu, 14.63 g/t Ag and 0.18g/t Au (WT-22-162)
− 6.7m at 2.30% Cu, 23.40 g/t Ag and 0.25g/t Au (WT-22-164)
· Updated Mineral Resource Estimate (MRE) completed delivering:
− 12% increase in Measured and Indicated resource tonnes at a 1% Cu cut-off
grade
− Total Resource of 16.5Mt at 1.45% Cu, 15.10g/t Ag and 0.19g/t Au for 240kt
Cu metal
· Consultants engaged to assist with application and renewal of
permits required for future mining operations
· Refurbishment of the existing underground mine completed with
underground drilling commenced in Q1 CY 2023
· Elevated Rare Earth Elements identified in re-assay of previous
drill core with grades up to 2,000ppm Total Rare Earth Elements (TREE)
· AUD$6.3 million in cash held at the end of the Quarter.
Pacific Nickel Limited ("Pacific Nickel")
Gunsynd currently holds 2,779,840 shares in Pacific Nickel.
Pacific Nickel has made great strides in recent months towards developing its
Solomon Islands nickel projects and in particular the Kolosori Nickel Project.
On 23 November 2022, Pacific Nickel announced an updated JORC mineral resource
estimate with a significant increase in contained nickel. On 21 December
2022, Pacific Nickel announced it had been granted a business licence by the
provincial Isabel Island and also that it had submitted a mining lease
application for the Jejevo Nickel project.
On 1 February 2023, a Definitive Feasibility Study was announced by Pacific
Nickel which included a base case post tax IRR of 156%. Pacific Nickel also
announced in February 2023, that it was advancing the Kolosori Nickel project
to execution stage and that recent developments had included:
Preliminary access works for the Haul Road had commenced.
• Construction of the DSO Loadout Wharf had commenced.
• Construction of 50-Man construction camp was nearing
completion.
• Construction of bridge to cross creek from bottom of
haul road to main stockpile and camp had commenced.
• Glencore was currently finalising a technical review
following receipt of the DFS.
• Pacific Nickel and Glencore had advanced offtake and
loan documentation.
Approval for the issue of an export licence for Kolosori was granted in March
2023 along with the initiation of discussions with barging and mining
contractors. The project is expected to ramp up to full production during
2023.
First Tin Limited ("First Tin")
Gunsynd currently holds 600,000 shares in First Tin representing approximately
0.4% of its issued capital.
First Tin (LSE:1SN) announced on 13 March 2023, that Definitive Feasibility
Studies ("DFS") at Taronga and Tellerhäuser have commenced, which are both
scheduled to be completed in Q4 2023. In addition, environmental and
permitting work continued at Taronga and Tellerhäuser with all required
permits expected to be granted by the end of 2023. First Tin also commenced
drill campaigns at Taronga and Tellerhäuser. The intention is to both expand
the existing known resources while also drilling new satellite exploration
targets.
Rogue Baron PLC ("Rogue Baron")
Rogue Baron plc ("Rogue Baron") made substantial progress towards the goals it
set out for 2022. In spite of significant global challenges continuing from
the Covid pandemic, not least the lingering disruptions on international
shipping in the early part of the year and high-cost inflation, Rogue Baron
successfully increased its global distribution.
In the latter part of 2022, Rogue placed Shinju in a number of new markets in
the U.S. and has now officially launched the Shinju brand with the
second-largest distributor in the U.S. in November 2022. Starting in only one
market, their plan is to roll out Shinju across the U.S. in 2023 through the
distributor's national footprint. The effect of the new distributor is already
evident despite sales initially in only the Maryland / Washington DC market
with that particular distributor.
The Shinju brand also saw a strong start to sales in the UK, with the launch
of the 8-year-old 'Black Pearl' extension leading the way. The UK
distribution has expanded not least with the availability of Shinju on both
Amazon and the Whisky Exchange. In addition, the UK based brand manager has
made good headway in getting Shinju listed in a number of trade locations in
the UK, the majority of which are in London, as well as pushing additional
sales in multiple EU countries where a number of distribution agreements have
also been signed such as Spain, Switzerland and Austria.
Included in the UK launch was the introduction of Shinju's first aged
extension. Very few of the newer Japanese whiskies have multiple expressions,
especially aged expressions. Aged Japanese whisky has been in very limited
capacity, with many brands having to pull their aged expressions due to the
lack of supply. It is envisaged that the 8-year old whiskey will open a
number of new accounts for Rogue Baron. The 8-year will carry a premium which
is expected to increase the revenues and margins for Rogue Baron.
Rogue Baron is optimistic for 2023 for sales and margins due to improving
shipping conditions and prices. This should allow Rogue Baron to maintain
consistent supply to meet the anticipated market demand for Shinju.
Rogue Baron hopes product margins should also increase in the latter half of
2023 as shipping costs are starting to come back to pre-Covid levels. Rogue
Baron plans to make a big marketing push to increase the velocity and turnover
in its current markets, while also expanding into new markets.
Low 6 Limited ("Low6")
Due to the changes in the global capital markets Low6 moved away from a
potential listing on the Toronto TSXV, and instead completed a private raise
in Q4 2022, raising £2.4m. As part of this, Australian Gaming company BlueBet
invested alongside existing Low6 shareholders. The round was further enhanced
by the US sports league, National Hockey League (NHL) joining the cap table.
Low6 has pivoted from being a US focused affiliate to a revenue generative
global gamification and affiliate business, moving from pre-revenue in the
previous financial year, to revenue generative in the current financial year.
The business now counts Vodafone, NHL, BetRivers, Rivalry, Bet99, Catena
Media, SportsBet (part of Flutter Group), Sacramento Kings, Sports Interaction
(Entain), Toto and Sportsbet.io as clients.
Oscillate plc ("Oscillate")
Oscillate is an investment company listed on the AQSE Growth Market Exchange
with the ticker, AQSE: MUSH. Gunsynd holds 10 million shares in Oscillate.
Oscillate provided only minor updates during the period other than the Dev
Clever warrants they purchased were unlikely to have any recoverable value
given Dev Clever delisted. Oscillate announced an RTO and suspension of
trading in November 2022 but subsequently announced on 23 March 2023 that the
proposed RTO had been terminated. Despite this, Oscillate remains suspended.
Oscillate proposes to provide a detailed update shortly including a timetable
for lifting suspension of trading in its shares.
Oyster Oil and Gas Limited ("Oyster")
Gunsynd has a holding valued at £130,000, and there has been no material
change since the financial year ended 31 July 2022. Gunsynd will update the
market as and when material developments occur.
Finance Review
The Company's loss for the period was £576,000 (31 January 2022: £310,000
loss). The realised and unrealised market valuation on financial investments
for the period was a loss of £305,000 (31 January 2022: £56,000 loss).
The Company had net assets at 31 January 2023 of £3,275,000 (31 January 2022:
£5,993,000) including cash balances of £304,000 (31 January 2022:
£1,082,000).
Outlook
We maintain a level of diversification in our portfolio but are mainly
concentrated in natural resources.
During the period, we sold some shares to realise some gains. However, in
general, as well as specifically for a number of the Company's investee
companies, equity prices (and particularly equities on ASX) declined
substantially during the period particularly at the small cap level. The board
believes that the end of the interest rate tightening cycle is nearer rather
than further away and this should be positive for commodities and that equity
markets ex technology should recover in the latter part of 2023.
The Board continues to look at investments in line with its investment policy
as highlighted on the Company's website. This could potentially include
increasing a stake(s) in investments already held.
The Board would also 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 2023
Unaudited Unaudited Audited
Six months ended
Six months ended
Year
31 January
31 January
ended
2023 2022
31 July
2022
£'000 £'000 £'000
Unrealised (loss)/gain on financial investments (416) (170) (2,168)
Realised gain on financial investments 111 114 221
(305) (56) (1,947)
Administrative and other costs (271) (254) (524)
Impairment of financial investments - - -
Write down of convertible loan notes - - -
Share based payment charge - - -
Other income - - 15
Finance income - - 30
(Loss)/profit before tax (576) (310) (2,426)
Taxation
(Loss)/profit for the period (576) (310) (2,426)
(Loss)/profit for the period and total comprehensive (loss)/profit (576) (310) (2,426)
attributable to equity shareholders
Other comprehensive (expenditure)/income for the period net of tax -
Total comprehensive (expenditure)/income for the period (576) (310) (2,426)
(Loss)/earnings per ordinary share
Basic (0.128) (0.069) (0.540)
Diluted (0.128) (0.069) (0.540)
Gunsynd plc
Interim statement of financial position - unaudited
As at 31 January 2023
Unaudited Unaudited Audited
At 31 January 2023
At 31 January 2022
At 31 July
2022
£'000 £'000 £'000
ASSETS
Non-current assets
Financial investments 2,854 4,817 2,944
Trade and other receivables - - -
Total non-current assets 2,854 4,817 2,944
Current assets
Trade and other receivables 198 156 163
Cash and cash equivalents 304 1,082 824
Total current assets 502 1,238 987
Total assets 3,356 6,055 3,931
LIABILITIES
Current liabilities
Trade and other payables (81) (62) (80)
Total current liabilities (81) (62) (80)
Total liabilities (81) (62) (80)
Net assets 3,275 5,993 3,851
EQUITY
Equity attributable to equity holders of the company
Ordinary share capital 382 382 382
Deferred share capital 2,299 2,299 2,299
Share premium reserve 13,459 13,459 13,459
Investment in own shares (26) (26) (26)
Share-based payments reserve 39 131 39
Retained earnings (12,878) (10,278) (12,302)
Total equity 3,275 5,993 3,851
Gunsynd plc
Interim statement of changes in equity - unaudited
For the six months ended 31 January 2023
Ordinary Share Capital Deferred share capital Share Premium Investment in own shares Share Based Payment Reserve Retained earnings Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
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
Audited
At 31 July 2021 382 2,299 13,459 - 131 (9,968) 6,303
Profit for the year - - - - - (2,426) (2,426)
Total comprehensive income for the year - - - - - (2,426) (2,426)
Transactions with owners:
Adjustment for shares held in Trust - - - (26) - - (26)
Transfer within Equity on lapse of share options - - - - (92) 92 -
At 31 July 2022 382 2,299 13,459 (26) 39 (12,302) 3,851
Unaudited
At 31 July 2022 382 2,299 13,459 (26) 39 (12,302) 3,851
Loss for the six month period ended 31 January 2023 - - - - - (576) (576)
Total comprehensive expenditure for the period - - - - - (576) (576)
At 31 January 2023 382 2,299 13,459 (26) 39 (12,878) 3,275
Gunsynd plc
Interim statement of cash flows - unaudited
For the six months ended 31 January 2023
Unaudited Unaudited Audited
Six months ended
Six months ended
Year
31 January 2023
31 January 2022
ended
31 July
2022
£'000 £'000 £'000
Cash flows from operating activities
(Loss)/profit after tax (650) (310) (2,426)
Finance income net of finance costs - - (10)
Unrealised (gain)/loss on revaluation of financial investments 490 170 2,168
Realised (gain)/loss on sale of financial investments (111) (114) (221)
Adjustment for issue of own shares - - (26)
Foreign exchange movements (2) - 1
Operating cash outflow before changes in working capital (273) (254) (514)
Movement in trade and other receivables - 18 11
Movement in trade and other payables 1 (4) 14
Cash flow from operations (272) (240) (489)
Tax received - - -
Net cash flows used in operating activities (272) (240) (489)
Cash flow from investing activities
Payments for financial investments (405) (44) (158)
Disposal proceeds from sale of financial investments 192 295 400
Unsecured loans to investee company (35) - -
Net cash outflow from investing activities (248) 251 242
Cash flows from financing activities
Proceeds on issuing of ordinary shares - - -
Cost of issue of ordinary shares - - -
Net cash inflow from financing activities - - -
Net increase/(decrease) in cash and cash equivalents (520) 11 (247)
Cash and cash equivalents at start of period 824 1,071 1,071
Cash and cash equivalents at end of period 304 1,082 824
Notes to the interim report
For the six months ended 31 January 2023
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 2023 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 were applied
in the Company's statutory financial statements for the year ended 31 July
2022.
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 2022 have
been derived from the statutory accounts for 2022. 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 2023
31 January 2022
ended
31 July
2022
£'000 £'000 £'000
(Loss)/profit on ordinary activities after tax (576) (310) (2,426)
Weighted average number of ordinary shares for the purposes of basic 449.80 449.80 449.80
(loss)/earnings per share (millions)
Weighted average number of ordinary shares for the purposes of diluted 475.50 543.76 533.84
(loss)/earnings per share (millions)
Basic (loss)/earnings per share (expressed in pence) (0.128) (0.069) (0.540)
Diluted (loss)/earnings per share (expressed in pence) (0.128) (0.069) (0.540)
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
None at the date of publication
4. Financial Information
The Board of Directors approved this interim report on 6 April 2023.
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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