REG - Kendrick Resources - Interim Results
30/09/2022 09:30
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220930:nRSd3340Ba&default-theme=true
RNS Number : 3340B Kendrick Resources PLC 30 September 2022
30 September 2022
Kendrick Resources Plc
("Kendrick" or the "Company")
Interim Results for the Six Months Ended 30 June 2022
Kendrick Resources Plc ("Kendrick" or the "Company"), 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 2022.
OPERATIONAL, FINANCIAL CORPORATE and STRATEGY REVIEWS
Operational Review
The period under review has been transformatory for the Company. On 6 May
2022, Kendrick completed an Initial Public Offering ("IPO") on the Standard
List of the London Stock Exchange and the acquisition of its projects in
Sweden and Finland as well as an option over its projects in Norway (the
"Projects"). This option was exercised on 16 May 2022, more details of which
are provided in the Corporate Highlights section of this review. Following the
IPO, the Group undertaken a thorough review of all its projects and licences
and has made a number of local appointments to manage operations and completed
a review of all available technical information.
Technical review of Projects: After the IPO and having acquired its projects
in Sweden, Finland and exercised its option in relation to its Norwegian
projects, the Company commenced technical reviews and / or programmes on its
portfolio. The primary metal in the Swedish and Finnish projects is vanadium
and nickel for the Norwegian projects.
Summary of Projects: The 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. In addition the Company holds the
following licences:
· Finland - the Karhujupukka vanadium-magnetite exploration project
· Sweden - the Kramsta, Kullberget, Simesvallen and Sumåssjön
exploration projects in Sweden (collectively the "Central Sweden Project")
· Norway - an option over the Espedalen, Hosanger, and Sigdal
exploration nickel-copper-cobalt projects in Norway.
Both the Karhujupukka and Espedalen projects 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 greenfield exploration opportunities based on the
results of historical activities, some with historical mineral estimates that
are still to be updated to the requirements of the JORC Code (2012).
Norway Projects: The Company's review has identified significant opportunities
within the nickel projects in Norway. The Director's believe this review and
present nickel price forecasting means the Company is extremely well
positioned with the Norwegian nickel assets. Kendrick is currently
digitising and reassessing nickel ore resources, to direct future drilling
programmes, towards early production. The nickel resources are demonstrating
good grades and, in most cases, have accompanying copper and sometimes
cobalt. It is intended that the Company will commence a strike extension
drilling programme when the most prospective and amenable target has been
identified.
Swedish & Finnish Projects: The Swedish vanadium project is being prepared
for an extension drilling programme with the same intention for the ultramafic
rock on the Finnish licences. In reviewing the Airijoki project significant
copper anomalies have been identified and the occurrences for future testing
are currently being modelled. All licences, where appropriate, have been
applied for with copper included as an exploration target. Plans are being
drafted for metallurgical test work in order to increase recoveries, whilst
maintaining magnetite vanadium grade. The Company is preparing plans to
conduct further test work to advance the processing to the end product
vanadium electrolytes.
Financial Review
Financial highlights:
· £185K loss after tax (2021: £169K)
· Approximately £2.173m cash at bank at the period end (Dec 2021:
£17k).
· The basic and diluted losses per share are summarised in the table
below:
Loss per share (pence) 2022 2021
Basic Note 3 (0.24)p (1.51)p
Diluted Note 3 (0.15)p (1.51)p
· The net asset value as at 30 June 2022 was £5.26m (31 December 2021
(£236k))
Fundraisings and issues of shares
At Listing, the Company through a fundraise raised £3,250,000 (before
expenses) (the "Fundraise") through the issue of 92,857,143 new ordinary
shares in the capital of the Company ("Ordinary Shares") at 3.5 pence per
Ordinary Share (the "Placing Price") to the subscribers to the Fundraising
(the "Placees") and the issue of 91,000,143 warrants to the Placees with an
exercise price of £0.06 per Ordinary Share, exercisable for 3 years from
Admission (the "Placing Warrants")
The funds raised on Admission provided the Group with sufficient money to
undertake the exploration and assessment of the Company's projects in Sweden,
Finland and Norway. Details of these work programmes are set out in the
Company's Prospectus dated 29 April 2022.
On 20 December 2020, the Company executed a £210,000 unsecured convertible
loan note instrument (the "December 2020 Convertible Loan Note") and received
subscriptions of £210,000 in respect of this loan note from private
investors. The December 2020 Convertible Loan Note does not pay interest and
was repaid at the IPO by the issue of 10,000,000 Ordinary Shares at a 40%
discount to the Placing Price.
On 2 July 2021, the Company executed a £350,000 unsecured convertible loan
note instrument (the "July 2021 Convertible Loan Note") and received
subscriptions of £350,000 in respect of this loan note from private investors
including £30,000 from Kjeld Thygesen and £48,000 from Colin Bird, who are
directors of the Company. The July 2021 Convertible Loan Note did not pay
interest and was repaid at the IPO by the issue of i) 13,333,333 Ordinary
Shares at a 25% discount to the Placing Price of which 1,142,857 were issued
to Kjeld Thygesen and 1,828,571 to Colin Bird and ii) one (1) warrant for each
Ordinary Share issued to the noteholders at a strike price of the Placing
Price. The 13,333,333 warrants will be valid for a period of 18 months from
the IPO and 1,142,857 of the warrants will be issued to Kjeld Thygesen and
1,828,571 to Colin Bird.
On 15 November 2021, the Company executed a £150,000 unsecured convertible
loan note instrument which was, with the consent of the noteholders,
subsequently increased to £150,000 (the "November 2021 Convertible Loan
Note") and received subscriptions of £119,500 in respect of this loan note
from private investors including £37,000 from Lion Mining Finance Ltd, a
company controlled by Colin Bird, a director of the Company. The November 2021
Convertible Loan Note does not pay interest and was repaid at the IPO by the
issue of i) 4,552,381 New Ordinary Shares at a 25% discount to the Placing
Price of which 1,409,524 were issued to Lion Mining Finance Ltd and ii) one
(1) warrant for each Ordinary Share issued to the noteholders at a strike
price of the Placing Price. The 4,552,381 warrants are valid for a period of
18 months from the IPO and 1,409,524 of the warrants were issued to Lion
Mining Finance Ltd.
At the IPO, 9,721,254 Ordinary Shares were issued at the Placing Price to
settle fees due by the Company of which 4,528,571 Ordinary Shares were issued
to Colin Bird to settle £158,500 of accrued unpaid fees.
Corporate Review
Company Board: The Board of the Company comprises Colin Bird, Executive
Chairman and Non- executive directors Kjeld Thygesen, Evan Kirby and Alex
Borrelli.
Listing: The Company was admitted 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 "Listing" or "IPO") .
Corporate Acquisitions: At Listing the Company had no subsidiaries and at IPO
pursuant to a binding sales agreement dated 18 January 2021 with Pursuit
Minerals (the "Binding Sales Agreement") which was assigned to the Company :
1. 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");
2. 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"); and
3. an exploration and option agreement to acquire from Eurasian Minerals
Sweden AB the Espedalen, Hosanger, and Sigdal exploration nickel-copper-cobalt
projects in Norway (the "Norwegian Projects") (the "EMX Option Agreement")
Under the terms of the Binding Sales Agreement as subsequently amended the
consideration payable to Pursuit Minerals was as follows:
(i) A$50,000 cash paid on execution of the Binding Sales Agreement;
(ii) £1,475,000 satisfied through the issue of 42,142,857 Ordinary Shares;
(iii) A$250,000 in cash on the Company's completion of a feasibility study on
any of the
individual project areas in the Tenements that demonstrate an internal rate of
return
of not less than 25%; and
(iv) A$500,000 in cash upon a decision by the Company to mine in any
individual
project area in the projects acquired from Pursuit Minerals.
On 20 January 2021, the Company was assigned the Binding Sales Agreement by
Lion Mining Finance Ltd and Camden Park Trading Limited, companies controlled
by Colin Bird, (the "Assignment Agreement"). The Assignment Agreement was
conditional on the completion of the Binding Sales Agreement and at the IPO
the consideration due under the Assignment Agreement was £802,000 of which
£52,000 is to be settled in cash and £750,000 was settled by the issue of
35,714,285 Ordinary Shares in the Company at an issue price of 2.1 pence per
Ordinary Share.
On 16 May 2022 the Company announced it had exercised the EMX Option Agreement
and on 12 August 2022 that the Company that it has completed the 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 consideration paid
to EMX for the exercise of the option during the period was U$81,949 and post
the period end the issue of 20,226,757 Ordinary Shares.
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.
The 42,142,857 Ordinary Shares issued to Pursuit Minerals have not been sold
as at the date of this report and are subject to the following lock up and
orderly market arrangements and subject to orderly market arrangements for the
12 months to 5 May 2023
No. of shares Lock up
15,357,143 None
8,928,572 Until 5 November 22
8,928,571 Until 5 May 23
8,928,571 Until 5 Nov 23
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 so they 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
The review of the Company's projects acquired at the IPO has given confidence
that the north European assets are well located with significant potential in
the quickly emerging space of energy generation and storage.
Last year inflation was seen as a distant issue but it, and the cost of
living, are now front and centre of financial headlines. This has already
slowed down major stock markets but may be good for the small mines sector
since as, historically 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 and
providing our shareholders with the prospects of enhanced value flowing into
next year.
Post Period Events
On 12 August 2022 the Company announced that it has completed the 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 consideration paid
to EMX for the exercise of the option during the period was U$81,949 and post
the period end the issue of 20,226,757 Ordinary Shares.
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 ended 31
December 2022.
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 2022.
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 2021 Annual Accounts also provided a detailed summary
of the principal risks and uncertainties faced by the Company, a copy of the
2021 Annual Accounts are available on the Company's website at
http://www.kendrickresources.com/ (http://www.kendrickresources.com/) .
The Board are 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
The Board has also reviewed emerging risks which may impact the forthcoming
six-month period and the main risks facing the Company are any ongoing impact
of the COVID-19 pandemic and the Ukraine war and related sanctions in the
period to date have not had a significant impact on the Company's operations.
The Ukraine was has however had a significant impact of oil and gas prices
which is feeding though into concerns regarding inflation, interest rates and
the outlook for stockmarkets and short term commodity prices.
Related Party Transactions during the period
1. Issue of shares at the IPO as disclosed in the Prospectus
(a) On 20 January 2021, the Company was assigned the Binding
Sales Agreement by Lion Mining Finance Ltd and Camden Park Trading FZE-LLC,
companies controlled by Colin Bird, (the "Assignment Agreement"). The
Assignment Agreement was conditional on the completion of the Binding Sales
Agreement and at the IPO the consideration due under the Assignment Agreement
was £802,000 of which £52,000 is to be settled in cash and £750,000 was
settled by the issue of 35,714,285 Ordinary Shares in the Company at an issue
price of 2.1 pence per Ordinary Share (2,285,714 Ordinary Shares to Lion
Mining Finance Ltd and 33,428,571 Ordinary Shares to Camden Park Trading
FZE-LLC).
(b) Colin Bird pursuant to the Fundraising at the IPO
subscribed for 1,571,400 Ordinary Shares at the Placing Price and was also
issued at the 1,571,400 Placing Warrants.
(c) Colin Bird was at the IPO issued 4,528,571 Ordinary
Shares at the Placing Price to settle £158,500 of accrued unpaid fees.
(d) Colin Bird was at the IPO issued 1,828,571 Ordinary
Shares and 1,828,571 Convertible Note Warrants arising from his participation
in the July 2021 Convertible Loan Note.
(e) Kjeld Thygesen pursuant to the Fundraising at the IPO
subscribed for 1,000,000 Ordinary Shares at the Placing Price and was issued
1,000,000 Placing Warrants.
(f) Kjeld Thygesen was at the IPO issued 1,142,857
Ordinary Shares and 1,142,857 Convertible Note Warrants arising from his
participation in the July 2021 Convertible Loan Note.
(g) Lion Mining Finance Limited (a company controlled by
Colin Bird) at the IPO was issued 1,409,524 Ordinary Shares and 1,409,524
Convertible Note Warrants arising from its
participation in the November 2021 Convertible Loan Note.
2. 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.
3. Related Party transactions described in the annual report to 31 December
2021
Other than disclosed above there have been no changes in the related parties
transactions descried in the annual report for the year ended 31 December 2021
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.
For and on behalf of the Board of Directors
Colin Bird
Executive Chairman
30 September 2022
Kendrick Resources Plc
+44 (0)20 7581 4477
Colin Bird
Executive Chairman
Novum Securities (Financial Adviser) +44 (0) 020 7399 9400
David Coffman
Novum Securities Limited (Broker) +44 (0) 20 7399 9400
Jon Belliss
Novum Securities (Financial Adviser)
David Coffman
+44 (0) 020 7399 9400
Novum Securities Limited (Broker)
Jon Belliss
+44 (0) 20 7399 9400
or visit https://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 2022
Notes Unaudited Unaudited
Six months Six months
ended ended
30 June 30 June
2022 2021
£ £
Income
Realised loss on sale of investments (10,872) -
Unrealised (loss)/gain on investments - (15,954)
Total income (10,872) (15,954)
Operating expenses (173,828) (153,408)
(184,700) (169,362))
Group operating loss
Interest costs - -
Loss before taxation (184,700) (169,362))
- -
Taxation
Loss for the period (184,700) (169,362)
Loss per share (pence)
Basic (0.24)p (1.51)p
Diluted 3 (0.15)p (1.51)p
Group Statement of Other Comprehensive Income
For the six months ended 30 June 2022
Unaudited Unaudited
Six months Six months
ended ended
30 June 30 June
2022 2021
£ £
Other comprehensive income:
Loss for the period (184,700) (169,362)
Items that may be reclassified to profit or loss:
Foreign currency reserve movement - -
(184,700) (169,362)
Total comprehensive loss for the period
GROUP STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2022
Share capital Share Premium Merger reserve Accumulated losses Total equity
£ £ £ £ £
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
Unaudited - six months ended 30 June 2021
Balance at 29 December 2020 22,929,743 25,027,278 1,824,000 (49,692,398) 88,623
Current period loss - - - (169,362) (169,362)
Total comprehensive loss for the period - - - (169,362) (169,362)
Balance at 30 June 2021 22,929,743 25,027,278 1,824,000 (49,861,760) (80,739)
Group Balance Sheet
As at 30 June 2022
Unaudited Audited
30 31
June December
2022 2021
Notes £ £
ASSETS
Non-current assets
Property, plant and equipment 1,025 2,050
Exploration and evaluation assets 6 2,700,333 -
Investment in Norwegian Projects 7 191,809 673,755
Total non-current assets 2,893,167 675,805
Current assets
Current asset investment 13,488 102,932
Trade and other receivables 335,421 89,488
Cash and cash equivalents 2,172,712 16,871
Total current assets 2,521,621 209,291
TOTAL ASSETS 5,414,788 885,096
LIABILITIES
Current liabilities
Trade and other payables 157,471 441,959
Convertible loan notes - 679,500
Total liabilities 157,471 1,121,459
5,257,317 (236,363)
NET ASSETS/(LIABILITIES)
EQUITY
Share capital 8 22,992,239 22,929,743
Share Premium 30,643,162 25,027,278
Merger reserve 1,824,000 1,824,000
Retained earnings (50,202,084) (50,017,384)
Total equity 5,257,317 (236,363)
Group Statement of Cash Flows
For the six months ended 30 June 2022
Unaudited Unaudited
Six months Six months
ended ended
30 June 30 June
2022 2021
Notes £ £
Cash flows from operating activities
Loss before tax (184,700) (169,362)
Adjustments for:
Depreciation of property, plant and equipment 1,025 4,345
Loss on sale of investments 10,872 -
Unrealised loss on investments - 15,954
(Increase) in receivables (245,933) (72,789)
(Decrease)/Increase in payables (284,488) 171,567
Net cash inflow from operating activities (703,224) (50,285)
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) (158,526)
Purchase of Exploration and Evaluation assets (2,135,803) -
(2,139,815) (158,526)
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 -
Proceeds from issue of convertible loan notes - 210,000
4,998,880 210,000
Increase in cash 2,155,841 1,189
Cash and cash equivalents at beginning of period 16,871 9,496
Cash and cash equivalents at end of period 2,172,712 10,685
Notes to the interim financial information
For the six months ended 30 June 2022
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 2022 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
2021 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 2020.
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
2022 after tax of £185,000 (2021: £169,000), had negative cash flows from
operations and is currently not generating revenues. However, the Company
raised £3,250,000 at the time of the Company's Listing in May 2022 and Cash
and cash equivalents were £2,173,000 as at 30 June 2022, which will enable
the Company to commence its exploration activities on its newly acquired
projects. 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.
3. Earnings per share
Unaudited Unaudited
30 30
June June
2022 2021
£ £
(Loss) attributable to equity holders of the Company (184,700) (169,362)
Weighted average number of shares 75,643,347 11,190,363
Weighted average number of shares and warrants 75,643,347 11,190,363
Basic loss per ordinary share (0.24)p (1.51)p
Diluted loss per ordinary share (0.15)p (1.51)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
Acquisition of Northern X Group
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
-
6. Exploration and evaluation assets
30 June 2022 31 Dec 2021
£ £
Balance at beginning of period - -
Acquisitions during the period
- Northern X Group (note 5) 2,449,126 -
- Exploration expenditure 251,207 -
Carried forward 2,700,333 -
at end of period
6.1. Exploration assets
Summary of Projects: The 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. In addition the Company holds the
following licences:
· 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).
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 (see note10).
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 2022 December 2021
Number £ Number £
Issued equity share capital
Issued and fully paid
Ordinary shares of £0.0003 each 219,511,616 65,853 11,190,363 3,357
Deferred shares of £0.00999 each 335,710,863 3,353,752 335,710,863 3,353,752
Deferred shares of £0.009 each 1,346,853,817 12,121,684 1,346,853,817 12,121,684
Deferred shares of £0.01 each 19,579,925 195,799 19,579,925 195,799
Deferred shares of £0.04 each 181,378,766 7,255,151 181,378,766 7,255,151
22,992,239 22,929,743
30 June 2022
Group Number of Ordinary shares Share Share Premium
capital
£ £
As at 1 January 2022 11,190,363 3,357 25,027,278
Shares issued during the period 208,321,253 62,496 6,432,247
Share issue costs - - (816,363)
As at 30 June 2022 219,511,616 65,853 30,643,162
Movement in shares issued during the period
Shares issued from placing on admission 92,857,143 27,857 3,222,143
Share issued on acquisition on subsidiaries 77,857,142 23,357 2,201,643
Conversion of loans and share subscriptions 27,885,714 8,366 671,134
Advisers and director's fees settled by shares 9,721,254 2,916 337,327
Total 208,321,253 62,496 6,432,247
1) At the Annual General Meeting held on 4 February 2021, shareholders
approved that the 335,710,863Existing Ordinary Shares in issue be subdivided
each into one new ordinary share of £0.00001 ("New Ordinary Share") and one
deferred share of £0.00999 ("2020 Deferred Share) in the capital of the
Company. The New Ordinary Shares carry the same rights as attached to the
Existing Ordinary Shares (save for the reduction in their nominal value). The
2020 Deferred Shares 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) At the Annual General Meeting held on 25 October 2021, shareholders
approved an ordinary resolution that for every thirty (30) issued and unissued
ordinary share of £0.00001 each in the share capital of the Company
("Existing Shares") be consolidated into one (1) ordinary share of £0.0003
each ("New Shares") such New Shares having the same rights and being subject
to the same restrictions, save as to nominal value, as the Existing Shares.
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.
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.
9. Proceeds from the issuance of ordinary shares
Six months to YE 31 December
30 June 2022 2021
£ £
Share capital and premium at end of period (Note 7) 53,635,401 -
Advisers' fees settled by shares (340,243) -
Loan notes converted into shares (679,500) -
Share issued on acquisition on subsidiaries (2,225,000) -
Share capital and premium at beginning of year (47,957,021) -
2,433,637 -
Six months to Six months to
30 June 2022 30 June 2021
£ £
-
Gross Funds raised from placing on admission 3,250,000
Listing costs (816,363) -
Net proceeds received from placing 2,433,637 -
Advisers' fees settled by shares 330,243 -
Net proceeds from issue of shares 2,773,880 -
10. Subsequent events
Further to its announcement on 16 May 2022 as detailed in note 7 the Company
on 12 August 2022 announced it had completed the 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") in consideration for the issue of 20,226,757 new
ordinary shares in the Company, which rank pari passu with the Company's
existing ordinary shares.
Lock up arrangements: 50% of the 20,226,757 new ordinary shares are subject to
a three-month voluntary escrow and the balance of 50% subject to a six-month
voluntary escrow.
17,979,378 of the new ordinary shares were issued to EMX Royalty Corporation
which will represent 7.5% of the enlarged share capital with the balance to be
issued to a business partner of EMX.
Following the issue of the 20,226,757 new ordinary shares, the Company's total
issued share capital consists of 239,738,373 ordinary shares
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 SDDSASEESEFURecent news on Kendrick Resources
See all newsREG - Kendrick Resources - Final Results for period to 29 December 2024
AnnouncementREG - Kendrick Resources - Total Voting Rights
AnnouncementREG - Stock Exch Notice - Admission to Trading - 28/02/2025
AnnouncementREG - Official List - Official List Notice
AnnouncementREG - Kendrick Resources - £107.5 K Fundraising and Issue of Equity
Announcement