REG - Gunsynd PLC - Half-year Report
18/04/2024 07:00
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RNS Number : 0289L Gunsynd PLC 18 April 2024
Gunsynd plc
("Gunsynd", or the "Company")
Interim Results for the six months ended 31 January 2024
Chairman's Statement
I am pleased to report the interim results for the six months ended 31 January
2024.
Review of Investments
1911 Gold Corporation ("1911 Gold")
Gunsynd Plc invested approximately CAD$350,000 (c. £200,000) into 1911 Gold
(TSXV: AUMB), a junior gold development and exploration company located in
Manitoba, in the heart of the Rice Lake gold district within the West Uchi
greenstone belt in Canada.
For each ordinary share subscribed for in 1911 Gold, the Company has received
a warrant over a new ordinary share with an exercise price of CAD$ 0.10 per
share and exercisable for a period of 24 months from the date of closing of
the offering by 1911.
Aberdeen Minerals Limited ("Aberdeen")
Gunsynd holds 2,000,000 ordinary shares which were purchased at a price of 7.5
pence per share for a total consideration of £150,000.
In March 2024 Aberdeen announced a conditional equity financing of up to £5.5
million to invest in its mineral exploration programmes for deposits of
nickel, copper and cobalt in North East Scotland. Responsibly sourced and
secure supplies of these metallic raw materials used in batteries and
electrification are critical to an energy transition in Scotland and the UK.
This conditional equity financing was at a price of 8.5p per share, a premium
to where Gunsynd invested.
Low 6 Limited ("Low6")
Low6 has continued to build revenue and has now traded profitability for all
seven months of the current financial year being July 2023 through to January
2024. Monthly revenues have risen to just under £400k per month.
The company forecasted revenue of £4.5m for FY24 (July 2023-June 2024), and
the company is on target to surpass that having contracted over £3.9m between
1 July 2023 and 31 January 2024. With five trading months to follow, the
company anticipates that it will hit its revenue target for FY24. This
compares to audited revenue for the company for the year ended 30 June 2022 of
£854,851.
The Company has invested £265,000 in Low6 to date.
Omega Oil and Gas Limited ("Omega")
Omega announced in October 2023:
· Estimated maiden gross 2C contingent resources of 1.73 trillion
cubic feet ("TCF") and 3C contingent resources of 4.5 TCF across Omega Oil and
Gas' 100% owned ATPs 2037 and 2038 in Queensland's Taroom Trough, Australia.
· Net 2C contingent resources comprise 1.51 TCF Gas and 68.6
million barrels (MMBBLS) of condensate.
The Company has invested £50,000 in Omega to date.
Charger Metals Limited ("Charger")
Gunsynd currently holds 852,542 shares in Charger representing approximately
1.1% of Charger's issued share capital.
The most recent ASX quarterly report from Charger issued in January 2024
indicated the following highlights:
Lake Johnston Lithium Project, Western Australia
· Charger identified a new 1.2km trend of pegmatite outcrops with
visible spodumene confirmed by high-grade rock chip samples up to 4.2% Li2O.
· Results received from a soil sampling programme across the Mt
Gordon tenement have identified several large soil anomalies
· $3 million currently budgeted for exploration programmes in 2024
at Lake Johnston, including Reverse Circulation ("RC") and diamond drilling
programmes of priority targets, to be funded by Rio Tinto Exploration Pty Ltd
("RTX"), a wholly-owned subsidiary of Rio Tinto Limited (ASX: RIO), under the
Farm-in Agreement.
· 2024 exploration programmes commenced in January 2024, with
diamond drilling underway at the Medcalf Spodumene Prospect to test for
extensions to the high-grade lithium mineralisation returned from the maiden
RC drill programme completed in Q2 2023.
Bynoe Lithium Project, Northern Territory
· Assays were received for the infill soil sampling programme
completed in the northeastern area of the Bynoe Lithium Project, along with
the first-pass results from the ground gravity survey.
· Approximately 20 lithium prospects identified by the company
to-date at Bynoe remain untested, and the results from the coincident
geochemical and geophysical surveys are expected to generate further targets.
· The company is reviewing all of the Bynoe data over the "wet
season" in order to prioritise drill targets ready for the next "dry season"
field campaign, due to commence in Q2 2024.
Rincon Resources Pty Ltd ("Rincon")
Gunsynd holds 4,000,000 shares representing approximately 1.8% of Rincon's
issued share capital.
The most recent ASX quarterly report from Rincon issued in January 2024
indicated the following highlights:
West Arunta Project
The Pokali diamond drilling program has been deferred until February 2024 due
to unfavourable weather conditions. Rock Chip samples were collected from
site reconnaissance programs, confirming the presence of carbonatite related
rare earth element ("REE") mineralisation at Pokali North and also
demonstrated widespread high-grade copper mineralisation over the 4km long
Pokali IOCG Prospect area. Portable x-ray florescence ("pXRF") analysis of a
selection of rock-chip samples highlighted two apparent REE trends, with best
total rare earth element ("TREE") results of 0.48% TREE (KWRK094), 0.43% TREE
(KWRK104) and 0.25% TREE (KWRK107).
South Telfer Project
Over 3,500m (17 holes) of reverse circulation ("RC") drilling were completed
at Mammoth and Westin. The program successfully confirmed the presence of what
the company believes could be a significant gold system at Westin. Multiple
zones of anomalous gold mineralisation highlighted at least three potential
sub-vertical gold-bearing structures that remain open down-dip and along
strike.
Eagle Mountain Mining Limited ("Eagle Mountain")
Gunsynd holds 2.5 million shares in Eagle Mountain representing approximately
1% of its issued share capital.
Highlights from the Eagle Mountain Mining December quarter results.
• Testing during the quarter identified a simpler processing method at
Oracle Ridge with a raft of cost and environmental benefits. Highlights from
recent testwork include:
· Increased mining productivity as a result of larger stopes
and multiple fronts, enabled by the updated Mineral Resource, refer below.
· Up to 30% increase in copper head grade possible from ore
sorting.
· Excellent copper recovery from rougher flotation, direct
tank-leaching and an onsite SX/EW plant that produces LME grade copper sheet.
• In November 2023, the Mineral Resource Estimate for Oracle Ridge was
upgraded to 28.2mt at 1.35% Cu, 11.06g/t Ag and 0.16g/t Au using a 0.8% copper
cut-off grade for 380kt of contained copper. Measured and Indicated Resources
now account for 54% of the MRE for Oracle Ridge.
Pacific Nickel Limited ("Pacific Nickel")
Gunsynd currently holds 996,838 shares in Pacific Nickel.
In January 2024 Pacific Nickel announced that it had completed its first DSO
shipment from its Kolosori Nickel project and that an initial payment had been
received from offtake partner Glencore International AG. In late February
2024 a second 60,000 tonne bulk carrier was loaded with average grade of
around 1.65% nickel. This was followed in March by a third loading of a
60,000 tonne bulk carrier. Pacific Nickel is now focused on the ramp up to
full production of 1.5mtpa is proceeding and expected to be finalised in May
2024.
Rogue Baron PLC ("Rogue Baron")
Gunsynd holds 21,543,563 shares in Rogue Baron equal to 16.89% of the issued
share capital.
Rogue Baron plc announced in March 2024 that a USA based Institutional
Investor ("Investor") agreed to invest USD $1,000,000 directly into Rogue
Baron's wholly owned US subsidiary, Shinju Spirits Inc (the "Investment").
The USD $1,000,000 investment is comprised of USD $750,000 in cash and USD
$250,000 worth of business enhancement services, which will be provided by the
Investor to support the sales growth of Shinju Japanese Whisky, the company's
signature brand.
In return for the Investment, the Investor will receive $750,000 of Seed
Series Preferred Shares in Shinju Spirits that will have customary rights of a
venture capital financing, commensurate with the rights set out in the
American National Venture Capital Association Model Legal Documents. The
Investor will also receive $250,000 in warrants to purchase up to a further
$250,000 in common stock of Shinju Spirits.
Finnaust Mining Northern OY (Black Schist Projects) (the "Projects")
In June 2022 Gunsynd announced heads of terms with Metals One Plc ("Metals
One") to farm into the Black Schist Projects in Finland, containing a
nickel-zinc-copper-cobalt deposit proximal, and analogous, to the large
Talvivaara mine. Gunsynd has paid £250,000 with respect to the
conditional farm in agreement with Metals One and will receive 6.25% of the
enlarged share capital of Finnaust Mining Northern OY ("Finnaust") (which
holds the Projects).
In February 2024 Metals One Plc announced significant intersections of
mineralised black schists were identified in all eight drillholes
and geological continuity with Metals One's existing resource at its R1 Hook
target which could support future resource expansion.
Metals One continues to update its prospectivity model with the valuable
geophysical and petrophysical insights into the nature of mineralised black
schists gathered during this programme.
The strategy is for the company to show a clear path to the economic
extraction of its assets. This includes a longer-term ambition of potentially
defining a 200 Mt resource in the Paltamo area, the scale of which could
underpin a significant supply of critical minerals to the European market at
what Metals One expects to be a low cost of production.
Oyster Oil and Gas Limited ("Oyster")
Gunsynd has a holding valued at £130,000, and there has been no material
change since 31 July 2023. Gunsynd will update the market as and when material
developments occur.
Finance Review
The Company's loss for the period was £621,000 (31 January 2023: £576,000
loss). The realised and unrealised market valuation on financial investments
for the period was a loss of £369,000 (31 January 2023: £305,000 loss).
The Company had net assets at 31 January 2024 of £1,735,000 (31 January 2023:
£3,275,000) including cash balances of £113,000 (31 January 2023:
£304,000).
Outlook
We maintain a level of diversification in our portfolio but are mainly
concentrated in natural resources and are unlikely to change this in the
future.
Equity prices for junior resources stocks declined substantially during the
period particularly which had a negative effect on the Company and its share
price. The board believes that the end of the interest rate tightening cycle
is likely over and this should be positive for commodities on the back of a
potentially weaker USD. This has already started to be reflected in higher
prices for certain commodities such as gold and copper.
Whilst the results for the period are disappointing there have been a number
of positives including the progress in Low6, the institutional fundraise in
to Rogue Baron's subsidiary at a substantial premium and the share price
performance of 1911 Gold.
The Board continues to look at investments in line with its investment policy
as highlighted on the Company's website and 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 +44 (0) 78 7958 4153
Hamish Harris / Peter Ruse
Cairn Financial Advisers LLP (Nominated Adviser and AQSE Corporate Adviser) +44 (0) 20 7213 0880
James Caithie / Liam Murray
Peterhouse Capital Limited (Broker) +44 (0) 20 7469 0936
Lucy Williams
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 2024
Unaudited Unaudited Audited
Six months ended
Six months ended
Year
31 January
31 January
ended
2024 2023
31 July
2023
£'000 £'000 £'000
Unrealised (loss)/gain on financial investments (212) (416) (1,043)
Realised gain on financial investments (157) 111 (35)
(369) (305) (1,078)
Administrative and other costs (251) (271) (568)
Impairment of financial investments (15) - (212)
Other income 14 - 149
Finance income - - 3
(Loss) before tax (621) (576) (1,706)
Taxation - - -
Loss for the period (621) (576) (1,706)
Loss for the period and total comprehensive loss attributable to equity (621) (576) (1,706)
shareholders
Other comprehensive (expenditure)/income for the period net of tax - - -
Total comprehensive (expenditure)/income for the period (621) (576) (1,706)
(Loss) per ordinary share
Basic (0.129) (0.128) (0.379)
Diluted (0.129) (0.128) (0.379)
Gunsynd plc
Interim statement of financial position - unaudited
As at 31 January 2024
Unaudited Unaudited Audited
At 31 January 2024
At 31 January 2023
At 31 July
2023
£'000 £'000 £'000
ASSETS
Non-current assets
Financial investments 1,519 2,854 1,891
Trade and other receivables - - -
Total non-current assets 1,519 2,854 1,891
Current assets
Trade and other receivables 202 198 194
Cash and cash equivalents 113 304 164
Total current assets 315 502 358
Total assets 1,834 3,356 2,249
LIABILITIES
Current liabilities
Trade and other payables (99) (81) (104)
Total current liabilities (99) (81) (104)
Total liabilities (99) (81) (104)
Net assets 1,735 3,275 2,145
EQUITY
Equity attributable to equity holders of the company
Ordinary share capital 472 382 382
Deferred share capital 2,299 2,299 2,299
Share premium reserve 13,580 13,459 13,459
Investment in own shares (26) (26) (26)
Share-based payments reserve - 39 24
Retained earnings (14,590) (12,878) (13,993)
Total equity 1,735 3,275 2,145
Gunsynd plc
Interim statement of changes in equity - unaudited
For the six months ended 31 January 2024
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 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
Audited
At 31 July 2022 382 2,299 13,459 (26) 39 (12,302) 3,851
Profit for the year - - - - - (1,706) (1,706)
Total comprehensive income for the year - - - - - (1,706) (1,706)
Transactions with owners:
Transfer within Equity on lapse of share options - - - - (15) 15 -
At 31 July 2023 382 2,299 13,459 (26) 24 (13,993) 2,145
Unaudited
At 31 July 2023 382 2,299 13,459 (26) 24 (13,993) 2,145
Loss for the six month period ended 31 January 2024 - - - - - (621) (621)
Total comprehensive expenditure for the period - - - - - (621) (621)
Transactions with owners:
Issue of share capital 90 - 121 - - - 211
Transfer within Equity on lapse of share options - - - - (24) 24 -
At 31 January 2024 472 2,299 13,580 (26) - (14,590) 1,735
Gunsynd plc
Interim statement of cash flows - unaudited
For the six months ended 31 January 2024
Unaudited Unaudited Audited
Six months ended
Six months ended
Year
31 January 2024
31 January 2023
ended
31 July 2023
£'000 £'000 £'000
Cash flows from operating activities
(Loss) after tax (621) (576) (1,706)
Finance income net of finance costs - - (3)
Unrealised loss on revaluation of financial investments 212 416 1,043
Realised loss/(gain) on sale of financial investments 157 (111) 35
Other income (14) - (124)
Impairment provision 15 - 212
Foreign exchange movements (2) (2) 2
Operating cash outflow before changes in working capital (253) (273) (541)
Movement in trade and other receivables 8 - 3
Movement in trade and other payables (5) 1 24
Cash flow from operations (250) (272) (514)
Tax received - - -
Net cash flows used in operating activities (250) (272) (514)
Cash flow from investing activities
Payments for financial investments (460) (405) (405)
Disposal proceeds from sale of financial investments 448 192 294
Unsecured loans to investee company - (35) (35)
Net cash outflow from investing activities (12) (248) (146)
Cash flows from financing activities
Proceeds on issuing of ordinary shares 90 - -
Cost of issue of ordinary shares 121 - -
Net cash inflow from financing activities 211 - -
Net (decrease) in cash and cash equivalents (51) (520) (660)
Cash and cash equivalents at start of period 164 824 824
Cash and cash equivalents at end of period 113 304 164
Notes to the interim report
For the six months ended 31 January 2024
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 2024 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 2023.
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 2023 have
been derived from the statutory accounts for 2023. 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 2024
31 January 2023
ended
31 July 2023
£'000 £'000 £'000
(Loss) on ordinary activities after tax (621) (576) (1,706)
Weighted average number of ordinary shares for the purposes of basic (loss) 482.32 449.80 449.80
per share (millions)
Weighted average number of ordinary shares for the purposes of diluted (loss) 485.01 475.50 475.50
per share (millions)
Basic (loss) per share (expressed in pence) (0.129) (0.128) (0.379)
Diluted (loss) per share (expressed in pence) (0.129) (0.128) (0.379)
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 17 April 2024.
A copy of this report can be obtained from our website at www.gunsynd.com
(http://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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