REG - Kendrick Resources - Interim Results for the Six Months to 30 June 2023
29/09/2023 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230929:nRSc0594Oa&default-theme=true
RNS Number : 0594O Kendrick Resources PLC 29 September 2023
29 September 2023
Kendrick Resources Plc
("Kendrick" or the "Company")
Interim Results for the Six Months Ended 30 June 2023
Kendrick Resources Plc the Scandinavian focused new age mineral exploration
and development company with nickel and vanadium projects in Norway, Sweden
and Finland, announces its unaudited interim results for the six months ended
30 June 2023.
OPERATIONAL, FINANCIAL CORPORATE and STRATEGY REVIEWS
Operational Review
During the period the Company's exploration activities focussed on its
Espedalen nickel project in Norway and its Airijoki vanadium project in Sweden
which are the Company's two most advanced projects. Kendrick also announced on
31 January 2023 the appointment of Martyn Churchouse as managing director and
the addition to its exploration team of Vassillios Carellas as operations
director and Edine Bakker as an exploration geologist.
Technical review of Projects: Following the IPO in May 2022 and having
acquired its projects in Sweden and Finland and exercised its option in
relation to its Norwegian projects the Company commenced technical reviews and
exploration programmes focussing on both nickel and vanadium in all three
countries. Mining and associated legislation in Scandinavia is
well-established and decisive enabling Kendrick to make rapid progress on a
number of projects.
Summary of Projects: The projects comprise a portfolio of early to advanced
stage exploration assets covering a combined area of 466.72 km2 in
Scandinavia. The most advanced of these Projects are the Airijoki and
Koitelainen vanadium projects in Sweden and Finland respectively and the
Espedalen nickel project in Norway.
The Airijoki and Karhujupukka vanadium and Espedalen nickel projects all
support defined mineral resources prepared in accordance with the JORC Code
(2012.) The remaining projects largely represent brown and greenfield
exploration opportunities based on the results of historical activities, some
with historical mineral estimates that remain to be updated to the
requirements of the JORC Code (2012).
Norway Projects: Our review has led us to identify significant opportunities
with the nickel projects in Norway. Our thorough review of historic
exploration data combined with nickel price forecasting results in Kendrick
being extremely well positioned with our Norwegian nickel assets. Our
priority Norwegian nickel target, the Espedalen Project (1.16Mt @ 1% Ni, 0.42%
Cu & 0.04% Co) and more specifically the Stormyra prospect was drilled in
March 2023 with 19 holes completed for a total of 1,650 metres of drilling
over an initial 1,200m of strike length. The results of the programme were
announced on 20 April 2023, 4 May 2023 and 24 May 2023 including several drill
intercept highlights:
· Hole ES2302 - 6.85% Ni Eq. over 1.25m from 38.20m
· Hole ES2303 - 2.64% Ni Eq. over 3.75m from 44.45m
o incl. 9.28% Ni Eq. over 0.75m from 47.45m
o and 1.53% Ni Eq. over 5.80m from 51.80m
o incl. 5.33% Ni Eq. over 0.9m from 56.7m
· Hole ES2305 - 1.30% Ni Eq. over 4.60m from 76.70m
o incl. 2.59% Ni Eq. over 2.10m from 79.20m
· Hole ES2306 - 0.71% Ni Eq. over 10.6m from 96.50m
o Incl. 2.18% Ni Eq. over 1.70m from 99.20m
§ and 1.03% Ni Eq. over 2.65m from 104.45m
§ Hole ESP2308 - 3.39% Ni Eq. over 11.60m from 52.40m including 5.80% Ni Eq
over 4.9m from 59.1m
· Hole ESP2307 - 2.59% Ni Eq. over 3.65m from 37.80m including 4.85% Ni
Eq. over 1.80m from 38.50m
· Hole ESP2312 - 2.29% Ni Eq. over 4.15m from 92.35m
· Hole ESP2313 - 1.98% Ni Eq. over 3.55m from 79.60m including 3.86% Ni
Eq. over 1.70m from 79.60m
· Hole ESP2317 - 2.18% Ni Eq. over 3.50m from 61.50m
· Hole ESP2318 - 0.41% Ni Eq. over 9.20m from 31.50m incl. 1.15% Ni Eq.
over 0.90m from 35.20m
· Hole ESP2319 - 2.43% Ni Eq. over 2.10m from 53.60m
incl. 5.53% Ni Eq. over 0.65m from 54.35m and 1.33% Ni Eq. over 2.70m from
62.20m
Geophysics and interpretation of drilling indicates a further extension to
known mineralisation of approximately 500m along the southern limit of the
current orebody which is expected to increase the mineral resource.
The drill programme over Stormyra was very successful with impressive peak
intercepts have provided all the motivation the Company needs to both extend
the Stormyra mineralised trend and assess with further drilling multiple
other targets (some of which have been drilled and intersected Ni
mineralisation) across the Espedalen project area.
Thanks to our local team, we have managed to build a helathy relationship with
the local stakeholders and we will continue to communicate with interested and
affected parties and we are sufficiently confident of the continuity of
mineralisation to formally engage external engineering advice for the review
of future plant design.
Swedish & Finnish Projects: The focus during the period was the Airijoki
vanadium project. In reviewing the Airijoki project we have identified
significant magnetic geophysical and copper in soil anomalies and we have
modelled the occurrences for future testing. The various exploration
programmes have confirmed:
· Four new exploration targets identified outside the main Vanadium
trend.
· New targets are anomalous for copper, nickel, cobalt, gold, and
palladium and are coincident with underlying airborne geophysical anomalism.
· Two of the copper, Nickel, cobalt, gold, palladium targets have been
prioritised for immediate follow-up once weather permits.
· Two targets have estimated minimum strike lengths of approximately
2km and 1km.
· The Airijoki licences remain highly prospective for vanadium.
Additional metalliurgical test work has been undertaken and further tests will
follow using fresh drill core from the most recent drill programme.
Results of the current Airijoki drill programme are yet to be received from
the independent assay laboratory and these assays in combination with the
results of planned additional metallurgical test work will determine the next
steps for resource delineation and further step-out exploration on the
remaining licences where historic soil geochemistry and geophysics indicates
signatures consistent with that which has generated mineral resources to date.
Financial Review
Financial highlights:
· £244K loss after tax (2022: £185K)
· Approximately £791k cash at bank at the period end (Dec 2022:
£1.82m).
· The basic and diluted losses per share are summarised in the table
below
Loss per share (pence) 2023 2022
Basic Note 3 (0.10)p (0.24)p
Diluted Note 3 (0.10)p (0.15)p
· The net asset value as at 30 June 2023 was £5.36m (31 December 2022
£5.56m)
Fundraisings and issues of shares during the period
On 24 April 2023 the Company announced the issue of 4,144,395 shares in the
Company to settle the share consideration due to be issued on or before 27
April 2023 in relation to the Company's acquisition of the Espedalen,
Hosanger, and Sigdal nickel-copper-cobalt exploration projects in Norway (the
"Norwegian Projects") from EMX Scandinavia AB (previously named Eurasian
Minerals Sweden AB) ("EMX"). The Lock up arrangements for these shares are
that 50% of these shares shall be subject to a three-month voluntary escrow
and the balance of 50% subject to a six-month voluntary escrow.
Corporate Review
Company Board: The Board of the Company comprises Colin Bird: Executive
Chairman, Martyn Churchouse: Managing Director, and Non- executive directors
Kjeld Thygesen, Evan Kirby and Alex Borrelli.
Lock Up and Orderly Market arrangements:
At IPO the Directors and their related parties, in aggregate, held 47,294,860
Ordinary Shares, representing 21.62% of the Enlarged Share Capital. The
Directors have agreed with the Company and its brokers, except for certain
standard exceptions, not to dispose of any interest in the Ordinary Shares
held by them for a period of 12 months following Admission (Lock-In Period)
and then for the following 12 months not to dispose of their Ordinary Shares
without first consulting the Company and Novum in order to maintain an orderly
market for the Shares.
Strategy Review
The Company's short to medium term strategic objectives are to enhance the
value of its mineral resource projects through exploration and technical
studies conducted by the Company or in conjunction with other parties with a
view to establishing these projects can be economically mined for profit. With
a positive global outlook for both base and precious metals, the Directors
believe that its projects provide a base from which the Company will seek to
add significant value through the application of structured and disciplined
exploration. The Company is looking to build a long term energy metals
business in Scandinavia which delivers energy metals to Europe to help enable
its renewable energy transformation by building a top tier energy metals
production business focused on quality vanadium and nickel mineral resources
in Scandinavia.
The Company may in the future, if such opportunity arises, acquire other
mineral resource projects whose value can similarly be enhanced. Further
projects may be considered where assets in strategic commodities are either:
(i) geologically prospective but undervalued; (ii) where technical knowledge
and experience could be applied to add or unlock upside potential; (iii) where
the assets may be synergistic to the current portfolio; or (iv) where project
diversification will add strategic growth opportunities within an appropriate
time frame.
Outlook
Our review of the Company's projects has given us confidence that our north
European assets are well located with significant potential in the quickly
emerging space of energy generation and storage.
Until last year inflation and rising interest rates were seen as distant
issues but rising interest rates and the cost of living were front and centre
of financial headlines during the period. This has already slowed down major
stock markets but may be good for the small mines sector since as in such
times they have been seen to outperform.
The Board remains confident they have assembled an enviable portfolio of
projects and look forward to advancing all our projects in the second half of
the year and providing our shareholders with the prospects of enhanced value
flowing into next year.
Post Period Events
On 7 August 2023 the Company signed a Share Sale and Purchase Agreement with
EMX Royalty Corporation (EMX) to acquire 100% of EV Metals AB a Swedish
company that owns the Njuggtraskliden and Mjovattnet exploration licences
hosting drill-defined magmatic nickel-copper-cobalt-platinum group metal
mineralisation along the Swedish "Nickel Line" ("Swedish Nickel Projects") .
The Company is acquiring EV Metals AB for SEK110,780 (approx. GBP 8,200) and
the issue of 15 million 5 year options to EMX to acquire ordinary shares in
the Company (Kendrick Shares) at 1.3 pence per Kendrick Share (EMX Options)
which is at a premium of approximately 67% to Kendrick's closing share price
on 4 August 2023 of 0.7750 pence the last practical date prior to this
announcement. The EMX Options if exercised will allow EMX to increase its
Kendrick shareholding.
In light of the Company's exploration commitment in relation to the Swedish
Nickel Projects EMX has agreed that in relation to Sigdal and Hosanger in lieu
of the existing requirement to drill up to one thousand meters on each project
if it incurs Exploration Expenditures of no less than USD $50,000 on each of
these projects in 2023 the Company will have met its 2023 expenditure
requirements for these two projects. The Company will have until 31 December
2023 to decide whether it continues with these two projects on the terms of
the existing agreements with EMX. If the Company fails to incur the required
USD $50,000 in Exploration Expenditures on these projects, the shortfall of
the exploration expenditures obligation may be satisfied by a payment to the
EMX of the shortfall in cash.
These arrangements in relation to the Sigdal and Hosanger projects do not
affect the Company's Espedalen Project, which currently contains the following
two nickel deposits:
1. Stormyra deposit comprising 1.16Mt @ 1% Ni, 0.42% Cu & 0.04% Co
and classified as Inferred in accordance with JORC (2012)
2. Dalen deposit comprising 7.8Mt @ 0.3% Ni, 0.12% Cu & 0.02% Co and
classified as Inferred in accordance with JORC (2012)
INTERIM MANAGEMENT REPORT
The Directors are required to provide an Interim Management Report in
accordance with the Financial Conduct Authorities ("FCA") Disclosure Guidance
and Transparency Rules ("DTR"). The Directors consider the preceding
Operational, Financial, Corporate and Strategy Review of this Half Yearly
Financial Report provides details of the important events which have occurred
during the period and their impact on the financial statements as well as the
outlook for the Company for the remaining six months of the year ending 31
December 2023.
The following statement of the Principal Risks and Uncertainties, the Related
Party Transactions, the Statement of Directors' Responsibilities and the
Operational, Financial, Corporate and Strategy Review constitute the Interim
Management Report of the Company for the six months ended 30 June 2023.
Principal Risks and Uncertainties
The principal risks that are specific to the Company were detailed under this
heading in Part 1 Summary of the Company's prospectus which was published on
29 April 2022 (the "Prospectus") which is available on the Company's website
at http://www.kendrickresources.com/ (http://www.kendrickresources.com/) .
Part II Risk factors of the Prospectus provides more details of risk factors
specific and material to the Group and to the Natural Resources Sector. The
Strategic Report in the 2022 Annual Accounts also provided a detailed summary
of the principal risks and uncertainties faced by the Company, a copy of the
2022 Annual Accounts are available on the Company's website at
http://www.kendrickresources.com/ (http://www.kendrickresources.com/) .
The Board is of the opinion that these risk factors will continue to remain
unchanged for the forthcoming six month period.
The principal risks and uncertainties facing the group are as follows:
· There are significant risks associated with any exploration project
and the ability of the company to explore, develop and generate operational
cashflows from its projects
· No assurances can be given that minerals will be discovered in
economically viable quantities at the Company's projects
· Adverse foreign exchange fluctuations
· Volatility in financial markets and commodity markets
The Board has also reviewed emerging risks which may impact the forthcoming
six-month period and the main risk facing the Company are any ongoing impact
the Ukraine war and related sanctions. In the period and to date these have
not had a significant impact on the Company's operations. The Ukraine war has
however had a significant impact on oil and gas prices which is feeding though
into concerns regarding inflation, interest rates and the outlook for
stockmarkets and short term commodity prices. Finland joined NATO in 2023 and
Sweden have announced their intention to join NATO.
Related Party Transactions during the period
1. Directors' Letters of Appointment and Service Agreements as disclosed in
the Prospectus
(a) Pursuant to an agreement dated 29 April 2022 the Company renewed the
appointment of Colin Bird as a Director. The appointment continues unless
terminated by either party giving to the other three months' notice in
writing. Colin Bird is entitled to director's fees of £18,000 per annum for
being a director of the Company plus reasonable and properly documented
expenses incurred during the performance of his duties. Colin Bird is not
entitled to any pension, medical or similar employee benefits. The agreement
replaces all previous agreements with Colin Bird in relation to his
appointment as a director of the Company.
(b) Pursuant to a consultancy agreement dated 29 April 2022, the Company
has, with effect from the date of the IPO, appointed Colin Bird as a
consultant to provide technical advisory services in relation to its current
and future projects including, but not limited to, assessing existing
geological data and studies, existing mine development studies and developing
exploration programs and defining the framework of future geological and mine
study reports (the "Colin Bird Services"). The appointment continues unless
terminated by either party giving to the other three months' notice in
writing. Colin Bird is entitled to fees of £2,500 per month for being a
consultant to the Company plus reasonable and properly documents expenses
incurred during the performance of the Colin Bird Services.
(c) Pursuant to an agreement dated 29 April 2022, renewed the appointment
of Kjeld Thygesen as a non-executive Director. The appointment continues
unless terminated by either party giving to the other three months' notice in
writing. Kjeld Thygesen is entitled to director's fees of £18,000 per annum
for being a director of the Company plus reasonable and properly documented
expenses incurred during the performance of his duties. Kjeld Thygesen is not
entitled to any pension, medical or similar employee benefits.
(d) Pursuant to an agreement dated 29 April 2022, Alex Borrelli was
appointed as a nonexecutive Director. The appointment continues unless
terminated by either party giving to the other three months' notice in
writing. Alex Borrelli is entitled to director's fees of £18,000 per annum
for being a director of the Company plus reasonable and properly documented
expenses incurred during the performance of his duties. Alex Borrelli is not
entitled to any pension, medical or similar employee benefits.
(e) Pursuant to an agreement dated 29 April 2022, Evan Kirby was appointed
as a non-executive Director. The appointment continues unless terminated by
either party giving to the other three months' notice in writing. Evan Kirby
is entitled to director's fees of £18,000 per annum for being a director of
the Company plus reasonable and properly documented expenses incurred during
the performance of his duties. Evan Kirby is not entitled to any pension,
medical or similar employee benefits.
(f) The Company entered into a licence agreement dated 1 February 2022
with Lion Mining Finance Limited (a company controlled by Colin Bird, a
director of the Company). Pursuant to this agreement, the Company has been
granted a licence to use the premises at 7-8 Kendrick Mews, London, SW7 for a
period of 12 months with effect from 1 December 2021 for a licence fee of
£1,000 per month. In addition, Lion Mining Finance Limited provides basic
administrative and support services as required by the Company from time to
time.
2. Related Party transactions described in the annual report to 31 December
2022
Other than disclosed above there have been no changes in the related party
transactions described in the annual report for the year ended 31 December
2022 that could have a material effect on the financial position or
performance of the Company in the first six months of the current financial
year.
Responsibility Statement
The Directors, whose names and functions are set out in this report under the
heading Company Board, are responsible for preparing the Unaudited Interim
Condensed Consolidated Financial Statements in accordance with the Disclosure
Guidance and Transparency Rules of the United Kingdom's Financial Conduct
Authority ('DTR') and with International Accounting Standard 34 on Interim
Financial reporting (IAS34). The Directors confirm that, to the best of
their knowledge, this Unaudited Interim Condensed Consolidated Report, which
has been prepared in accordance with IAS34, gives a true and fair view of the
assets, liabilities, financial position and profit or loss of the Group and
the interim management report includes a fair review of the information
required by DTR 4.2.7 R and by DTR 4.2.8 R, namely:
· an indication of key events occurred during the period and their
impact on the Unaudited Interim Condensed Consolidated Financial Statements
and a description of the principal risks and uncertainties for the second half
of the financial year; and
· material related party transactions that have taken place during
the period and that have materially affected the financial position or the
performance of the business during that period."
The interim results for the six months ended 30 June 2023 have not been
audited or reviewed by auditors pursuant to the Financial Reporting Council
guidance on Review of Interim Financial Information.
For and on behalf of the Board of Directors
Colin Bird
Executive Chairman
29 September 2023
Kendrick Resources Plc Tel: +44 2039 616 086
Chairman Colin Bird
Novum Securities Tel: +44 7399 9400
Financial Adviser David Coffman / George Duxberry
Joint Broker Jon Bellis
Shard Capital Partners LLP Tel: +44 207 186 9952
Joint Broker Damon Heath / Isabella Pierre
or visit http://www.kendrickresources.com/
(http://www.kendrickresources.com/)
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulation
(EU) No. 596/2014 as it forms part of UK Domestic Law by virtue of the
European Union (Withdrawal) Act 2018 ("UK MAR").
Group Statement of Profit and Loss
For the six months ended 30 June 2023
Notes Unaudited Unaudited
Six months Six months
ended ended
30 June 30 June
2023 2022
£ £
Income
Realised loss on sale of investments - (10,872)
Unrealised (loss)/gain on investments - -
Total income - (10,872)
Operating expenses (243,534) (173,828)
(243,534) (184,700)
Group operating loss
Interest costs - -
Loss before taxation (244,534) (184,700)
- -
Taxation
Loss for the period (244,534) (184,700)
Loss per share (pence)
Basic (0.10)p (0.24)p
Diluted 3 (0.10)p (015)p
Group Statement of Other Comprehensive Income
For the six months ended 30 June 2023
Unaudited Unaudited
Six months Six months
ended ended
30 June 30 June
2023 2022
£ £
Other comprehensive income:
Loss for the period (243,534) (184,700)
Items that may be reclassified to profit or loss:
Foreign currency reserve movement - -
(243,534) (184,700)
Total comprehensive loss for the period
GROUP STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2023
Share capital Share Premium Merger reserve Accumulated losses Total equity
£ £ £ £ £
Unaudited - six months ended 30 June 2023
Balance at 29 December 2022 22,998,307 31,810,107 1,824,000 (51,064,741) (5,567, 673)
Current period loss - - - (243,534) (243,534)
Total comprehensive loss for the period - - - (243,534) (243,534)
Exercise of option over Norwegian projects 1,244 35,021 - - 36,265
Balance at 30 June 2023 22,999,551 31.845,128 1,824,000 (51,308,275) 5,360,404
Unaudited - six months ended 30 June 2022
Balance at 29 December 2021 22,929,743 25,027,278 1,824,000 (50,017,384) (236,363)
Current period loss - - - (184,700) (184,700)
Total comprehensive loss for the period - - - (184,700) (184,700)
Net proceeds from shares issued 30.773 2,743,107 - - 2,773,880
Acquisition of subsidiaries 23,357 2,201,643 - - 2,225,000
Loan notes converted into shares 8,366 671,134 - - 679,500
Balance at 30 June 2022 22,992,239 30.643,162 1,824,000 (50,202,084) 5,257,317
Group Balance Sheet
As at 30 June 2023
Unaudited Audited
30 31
June December
2023 2022
Notes £ £
ASSETS
Non-current assets
Property, plant and equipment - -
Exploration and evaluation assets 6 4,647,910 3,932,973
Total non-current assets 4,647,910 3,932,973
Current assets
Current asset investment 8,174 8,174
Trade and other receivables 72,356 92,758
Cash and cash equivalents 790,839 1,817,706
Total current assets 871,369 1,918,638
TOTAL ASSETS 5,519,279 5,851,611
LIABILITIES
Current liabilities
Trade and other payables 158,875 247,673
EMX Deferred Share Consideration - 36,265
Total liabilities 158,875 283,938
5,360,404 (5,567,673)
NET ASSETS/(LIABILITIES)
EQUITY
Share capital 8 22,999,551 22,998,307
Share Premium 31,845,128 31,810,107
Merger reserve 1,824,000 1,824,000
Retained earnings (51,308,275) (51,064,741)
Total equity 5,360,404 5,567,673
Group Statement of Cash Flows
For the six months ended 30 June 2023
Unaudited Unaudited
Six months Six months
ended ended
30 June 30 June
2023 2022
Notes £ £
Cash flows from operating activities
Loss before tax (243,534) (184,700)
Adjustments for:
Depreciation of property, plant and equipment - 1,025
Loss on sale of investments - 10,872
Unrealised loss on investments - -
Decrease/(Increase) in receivables 20,402 (245,933)
(Decrease) in payables (125,063) (284,488)
Net cash inflow from operating activities (348,195) (703,224)
Cash flows from/(used) in investing activities
Proceeds of sale of Investment shares - 78,572
Investment in Nordic Projects and related transaction costs - (82,584)
Purchase of Exploration and Evaluation assets (714,937) (2,135,803)
(714,937) (2,139,815)
Cash flows from financing activities
Proceeds from Issue of shares, net of issue costs - 2,773,880
Shares issued to acquire subsidiaries - 2,225,000
Shares issued to acquire options 36,265 -
36,265 4,998,880
(Decrease)/Increase in cash (1,026,867) 2,155,841
Cash and cash equivalents at beginning of period 1,817,706 16,871
Cash and cash equivalents at end of period 790,839 2,172,712
Notes to the interim financial information
For the six months ended 30 June 2023
1. General information
This financial information is for Kendrick Resources Plc ("the Company") and
its subsidiary undertakings. The principal activity of Kendrick Resources Plc
(the 'Company') and its subsidiaries (together the 'Group') is the development
of natural resources exploration projects in Scandinavia. The Company is a
public limited company and was listed on to the Official List (Standard
Segment) and commenced trading on the Main Market for listed securities of the
London Stock Exchange on 6 May 2022. The 'Company is incorporated and
domiciled in the United Kingdom with company registration number 02401127. The
address of the registered office is 7/8 Kendrick Mews, London SW7 3HG.
2. Basis of preparation
The unaudited interim financial information set out above, which incorporates
the financial information of the Company and its subsidiary undertakings (the
"Group"), has been prepared using the historical cost convention and in
accordance with International Financial Reporting Standards ("IFRS").
These interim results for the six months ended 30 June 2023 are unaudited and
do not constitute statutory accounts as defined in section 434 of the
Companies Act 2006. The financial statements for the year ended 31 December
2022 were audited and the auditors' report on those financial statements was
unqualified and contained a material uncertainty pertaining to going
concern.
The same accounting policies, presentation and methods of computation have
been followed in these unaudited interim financial statements as those which
were applied in the preparation of the company's annual financial statements
for the year ended 31 December 2022.
The interim consolidated financial information incorporates the financial
statements of Kendrick Resources Plc and its subsidiaries.
Going concern basis of accounting
The Group made a loss from all operations for the six months ended 30 June
2023 after tax of £244,000 (2022: £185,000), had negative cash flows from
operations and is currently not generating revenues. An operating loss is
expected in the year subsequent to the date of these accounts and as a result
the Company will need to raise funding to provide additional working capital
to finance its ongoing activities. Management has successfully raised money in
the past, but there is no guarantee that adequate funds will be available when
needed in the future.
Based on the Board's assessment that the Company will be able to raise
additional funds, as and when required, to meet its working capital and
capital expenditure requirements, the Board have concluded that they have a
reasonable expectation that the Group can continue in operational existence
for the foreseeable future. For these reasons the financial statements have
been prepared on the going concern basis, which contemplates continuity of
normal business activities and the realisation of assets and discharge of
liabilities in the normal course of business.
The management team has successfully raised funding for exploration projects
in the past, but there is no guarantee that adequate funds will be available
when needed in the future.
There is a material uncertainty relating to the conditions above that may cast
significant doubt on the Group's ability to continue as a going concern and
therefore the Group may be unable to realise its assets and discharge its
liabilities in the normal course of business.
This financial report does not include any adjustments relating to the
recoverability and classification of recorded assets amounts or liabilities
that might be necessary should the entity not continue as a going concern.
3. Earnings per share
Unaudited Unaudited
30 30
June June
2023 2022
£ £
(Loss) attributable to equity holders of the Company (243,534) (184,700)
Weighted average number of shares 241,203,794 75,643,347
Weighted average number of shares and warrants 249,177,275 75,643,347
Basic loss per ordinary share (0.10)p (0.24)p
Diluted loss per ordinary share (0.10)p (0.15)p
The use of the weighted average number of shares in issue in the period
recognises the variations in the number of shares throughout the period and is
in accordance with IAS 33.
4. Investments
The company has adopted the provisions of IFRS9 and has elected to treat all
available for sale investments at fair value with changes through the profit
and loss.
Available-for-sale investments under IFRS9 are initially measured at fair
value plus incidental acquisition costs. Subsequently, they are measured at
fair value in accordance with IFRS 13. This is either the bid price or the
last traded price, depending on the convention of the exchange on which the
investment is quoted. All gains and losses are taken to profit and loss.
The Company's intention following its Listing is not to purchase any new
investments and to hold its residual portfolio as realisable investments as a
source of liquidity when required.
5. Acquisition of subsidiaries
5.1 Acquisition of Northern X Group (Swedish & Finnish projects)
On 6 May 2022 the Company completed the acquisition of;
(a) 100% of Northern X Finland Oy ("Northern X Finland"), which owns in
Finland the Koitelainen vanadium projects which hosts a defined Mineral
Resource as defined by the JORC Code (2012) and the Karhujupukka
vanadium-magnetite exploration project ("Finnish Projects"); and
(b) 100% of Northern X Scandinavia AB ("Northern X Scandinavia") which owns
in Sweden the Airijoki and vanadium project (the "Airijoki Project") which
hosts a defined Mineral Resource as defined by the JORC Code (2012) and the
Kramsta, Kullberget, Simesvallen and Sumåssjön exploration projects in
Sweden (collectively known as the "Central Sweden Projects") (the Airijoki
Project and the Central Sweden Projects are collectively the "Swedish
Projects")
Collectively the Northern X Group
The acquisition price was as follows:
£
Consideration
Equity consideration
- Ordinary shares (issued) 2,225,000
Cash consideration 224,126
2,449,126
5.2 Acquisition of Caledonian Minerals AS (Norwegian Projects)
On 13 May 2022 to facilitate the smooth transfer of the Norwegian Project
Licences to the Company after the exercise of the EMX Option the Company
acquired Caledonian Minerals AS for £6,186 a Norwegian company
established by EMX as a clean special purpose vehicle on 8 November 2021 which
at the date of acquisition had not carried out any business and had no
assets or liabilities.
Consideration £
Cash consideration 6,186
Total consideration 6,186
Fair value of assets acquired
Exploration assets 6,186
6,186
-
6. Exploration and evaluation assets
Swedish Project Finnish Projects Norwegian projects Total
£
£ £ £
Opening Balance 1 January 2022 - - - -
Transfer from Investment in Nordic Projects & Related Transactions Costs * 254,871 82,386 119,961 457,218
Additions in 2022 184,438 4,355 160,745 349,538
Northern X Group Acquisition (Note 5.1):
Share issues 1,357,473 703,990 163,537 2,225,000
Cash consideration 136,739 70,913 16,474 224,126
Acquisition of Norwegian Projects
Share issues (Note 7) 566,349 566,349
Cash consideration 74,477 74,477
EMX Deferred Share Consideration 36,265 36,265
Balance 29 December 2022 1,933,521 861,644 1,137,808 3,932,973
Swedish Project Finnish Projects Norwegian projects Total
£
£ £ £
Balance 29 December 2022 1,933,521 861,644 1,137,808 3,932,973
Additions in period 229,986 1,060 483,891 714,937
Balance 30 June 2023 2,163,507 862,704 1,621,699 4,647,910
Swedish Project Finnish Projects Norwegian projects Total
£
£ £ £
Balance 29 December 2022 1,933,521 861,644 1,137,808 3,932,973
Additions in period 229,986 1,060 483,891 714,937
Balance 30 June 2023 2,163,507 862,704 1,621,699 4,647,910
6.1. Exploration assets
Summary of Projects:
The Swedish & Finnish projects are a portfolio of early to advanced stage
exploration projects covering a combined area of 466.72 km2 in Scandinavia.
The most advanced of these Projects are the Airijoki and Koitelainen vanadium
projects in Sweden and Finland respectively.
However, the projects to be acquired include several exploration projects in
the Nordic region, namely:
* Finland - the Karhujupukka vanadium-magnetite exploration project
* Sweden - the Kramsta, Kullberget, Simesvallen and Sumåssjön exploration
projects in Sweden (collectively known as the Central Sweden Project)
The Karhujupukka project also support defined mineral resources prepared in
accordance with the JORC Code (2012.) However, these remain subject to further
techno-economic assessment. The remaining projects represent brownfield to
greenfields exploration opportunities based on the results of historical
activities, some with historical mineral estimates that remain to be updated
to the requirements of the JORC Code (2012).
The Norwegian Projects comprise:
o The Espedalen Project consisting of 16 contiguous exploration permits
covering a combined area of 139.89 km(2) currently contains two nickel
deposits
o The Sigdal Project consisting of three exploration licences totalling 30
km(2) containing a geophysical conductor associated with historical mine
workings, which has only been tested with two short drill holes, returning
gold grades over 10g/t with encouraging nickel and copper mineralisation
o The Hosanger Project consisting of a coherent tenure package of four
exploration licences covering 40 km(2) and contains the historical Litland
nickel mine
The Espedalen nickel project which is the primary Norwegian project supports
defined mineral resources prepared in accordance with the JORC Code (2012).
6.2. Exploration assets accounting policy
Exploration, evaluation and development expenditure incurred is accumulated in
respect of each identifiable area of interest. These costs are only carried
forward to the extent that they are expected to be recouped through the
successful development of the area or where activities in the area have not
yet reached a stage which permits reasonable assessment of the existence of
economically recoverable reserves. Accumulated costs in relation to an
abandoned area are written off in full in the year in which the decision to
abandon the area is made. When production commences, the accumulated costs for
the relevant area of interest are transferred to development assets and
amortised over the life of the area according to the rate of depletion of the
economically recoverable reserves. A regular review is undertaken of each area
of interest to determine the appropriateness of continuing to carry forward
costs in relation to that area of interest.
7. Investment in Norwegian Projects
On 13 May 2022 the Company exercised its option to conditionally acquire the
Espedalen, Hosanger, and Sigdal nickel-copper-cobalt exploration projects in
Norway (the "Norwegian Projects") (the "Acquisition") from EMX Scandinavia AB
(previously named Eurasian Minerals Sweden AB) ("EMX") by the issue of
20,226,757 new ordinary shares in the Company to EMX or its nominee, 50% of
these shares shall be subject to a three-month voluntary escrow and the
balance of 50% subject to a six-month voluntary escrow. Kendrick has also made
a payment of US$81,949 to EMX. This payment was to meet a shortfall of this
amount in the exploration expenditure to be incurred during the option period.
The Acquisition is conditional upon the Norwegian Directorate for Mineral
Administration approving the transfer of the licences to a wholly owned
subsidiary of Kendrick. Subsequent to the period end the Company on 12 August
2022 announced this process was completed, and the Company applied for the
20,226,757 new ordinary shares to be admitted to trading on the Standard
Segment of the London Stock Exchange on 17 August 2022.
The Norwegian Projects comprise:
o The Espedalen Project consisting of 16 contiguous exploration permits
covering a combined area of 139.89 km(2) currently contains two nickel
deposits
o The Sigdal Project consisting of three exploration licences totalling 30
km(2) containing a geophysical conductor associated with historical mine
workings, which has only been tested with two short drill holes, returning
gold grades over 10g/t with encouraging nickel and copper mineralisation
o The Hosanger Project consisting of a coherent tenure package of four
exploration licences covering 40 km(2) and contains the historical Litland
nickel mine
8. Share Capital
June 2023 December 2022
Number £ Number £
Issued equity share capital
Issued and fully paid
Ordinary shares of £0.0003 each 243,882,767 73,165 239,738,373 71,921
Deferred shares of £0.00999 each (1) 335,710,863 3,353,752 335,710,863 3,353,752
Deferred shares of £0.009 each (2) 1,346,853,817 12,121,684 1,346,853,817 12,121,684
Deferred shares of £0.01 each (2) 19,579,925 195,799 19,579,925 195,799
Deferred shares of £0.04 each (3) 181,378,766 7,255,151 181,378,766 7,255,151
22,999,551 22,998,307
30 June 2023
Group Number of Ordinary shares Share Share Premium
capital
£ £
As at 1 January 2023 239,738,373 71,921 31,810,107
Shares issued during the period 4,144,395 1,244 35,021
Share issue costs - - -
As at 30 June 2023 243,882,768 73,165 31,845,128
Movement in shares issued during the period
Shares issued to acquire options 4,144,395 1,244 35,021
Total 4,144,395 1,244 35,021
Notes:
(1) The deferred shares of £0.00999 have no voting rights and have no
rights as to dividends and only very limited rights on a return of capital.
They will not be admitted to trading or listed on any stock exchange and will
not be freely transferable. The holders of the 2020 Deferred Shares are not
entitled to any further right of participation in the assets of the Company.
As such, the 2020 Deferred Shares effectively have no value.
(2) The deferred shares of £0.01 each and £0.009 each confer no rights to
vote at a general meeting of the Company or to a dividend. On a winding-up the
holders of the deferred shares are only entitled to the paid-up value of the
shares after the repayment of the capital paid on the ordinary shares and
£5,000,000 on each ordinary share.
(3) The deferred shares of £0.04 each have no rights to vote or to
participate in dividends and carry limited rights on return of capital. No
shares were issued during the year.
On 24 April 2023 the Company announced it had issued 4,144,395 new ordinary
shares to settle the share consideration due to be issued on or before 27
April 2023 in relation to the Company's acquisition of the Espedalen,
Hosanger, and Sigdal nickel-copper-cobalt exploration projects in Norway from
EMX Scandinavia AB. 50% of these shares are subject to a three-month voluntary
escrow and the balance of 50% subject to a six-month voluntary escrow.
3,683,906 of the new ordinary shares will be issued to EMX Scandinavia AB
which will increase the combined shareholding of EMX Scandinavia AB and EMX
Royalty Corporation to 21,663,284 shares representing 8.9% of the enlarged
share capital on the Company.
On 2 February 2023 the Company announced that in aggregate, 22,550,000 options
over ordinary shares of £0.0003 par value in the capital of the Company
("Ordinary Shares") have been granted fully vested pursuant to the Executive
Share Option Scheme (the "Options"). Of the 22,550,000 Options, 13,750,000
have been awarded to directors of the Company, as detailed further below and
the balance of 8,800,000 to other eligible participants. The Company has not
previously issued any Options.
Directors No. of Options
Colin Bird Executive Chairman 6,000,000
Martyn Churchouse 5,000,000
Alex Borrelli 1,000,000
Evan Kirby 1,000,000
Kjeld Thygesen 750,000
Total Directors 13,750,000
9. Subsequent events
On 7 August 2023 the Company signed a Share Sale and Purchase Agreement with
EMX Royalty Corporation (EMX) to acquire 100% of EV Metals AB a Swedish
company that owns the Njuggtraskliden and Mjovattnet exploration licences
hosting drill-defined magmatic nickel-copper-cobalt-platinum group metal
mineralisation along the Swedish "Nickel Line".
The Company is acquiring EV Metals AB for SEK110,780 (approx. GBP 8,200) and
the issue of 15 million 5 year options to EMX to acquire ordinary shares in
the Company (Kendrick Shares) at 1.3 pence per Kendrick Share (EMX Options)
which is at a premium of approximately 67% to Kendrick's closing share price
on 4 August 2023 of 0.7750 pence the last practical date prior to this
announcement. The EMX Options if exercised will allow EMX to increase its
Kendrick shareholding.
Other than the matters above no significant events have occurred subsequent to
the reporting date that would have a material impact on the consolidated
financial statements.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR PPUAABUPWGARRecent news on Kendrick Resources
See all newsREG - Kendrick Resources - Final Results
AnnouncementREG - Kendrick Resources - Funding Facility
AnnouncementREG - Kendrick Resources - Airijoki Drill Results
AnnouncementREG - Kendrick Resources - Espedalen Update
AnnouncementREG - Kendrick Resources - Completion of Airijoki Extension Drill program
Announcement