REG - MetalNRG PLC - Half-year Report
29/09/2023 07:00
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RNS Number : 0813O MetalNRG PLC 29 September 2023
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
REGULATION 2014/596/EU WHICH IS PART OF DOMESTIC UK LAW PURSUANT TO THE MARKET
ABUSE (AMENDMENT) (EU EXIT) REGULATIONS (SI 2019/310) ("UK MAR"). UPON THE
PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION (AS DEFINED IN UK
MAR) IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.
29 September 2023
MetalNRG plc
(the "Company" or "MetalNRG")
Interim Results to 30 June 2023
Operational Highlights
Key operational milestones achieved during the period:
In May 2023, the Company announced that Phase 2 of the geo-chemical
campaign at its Gold Ridge Gold mine property in Arizona had
commenced, following the very encouraging results from phase 1 that paved a
pathway to further exploration work which is now progressing.
The results from phase 1 showed the largest gold anomalies were found in
historical areas mined for gold; however, a secondary zone of gold anomalies
was found in an area previously unexplored and a new linear zone of gold
mineralization was delineated in the Southern Precambrian block. We now await
results from phase 2 which we anticipate being able to announce before the end
of October 2023.
The Company's strategy, following results from phase 1 which confirmed
MetalNRG's belief that there is a real possibility of a larger un-discovered
gold/base metal system at Gold Ridge; is to more fully understand the
interconnectivity of the geological system which is likely to control the
previously producing gold mines in the area and progress work towards a
drilling program.
In June 2023, we confirmed that EQTEC Italia, our joint investment
with EQTEC Plc and two family offices in a waste to energy plant in Italy,
located in Gallina, near Castiglione d'Orcia, Tuscany, Italy, had completed
handover protocols to EQTEC Italia and was transferring plant operations to
EQTEC Italia MDC srl ("Italia MDC").
This announcement followed the Company's March 2023 announcement that the
Italia MDC was operational, having commenced export of electricity to the
national power grid on 8 March 2023 and having produced biochar and
commenced gasification in January 2023.
A further announcement on the partnership with EQTEC was made on 4 September
2023 and stated that EQTEC Italia have agreed a loan facility of €2.9
million to refinance its Italian waste to energy plant, located in Gallina,
near Castiglione d'Orcia, Tuscany, Italy.
The term of the Facility is 48 months, with an annual interest rate of 2.5%
over the six-month Euro Interbank Offered Rate (Euribor), which currently
makes the interest rate c. 6.5%. It is offered by Banca del Fucino S.p.A., an
historic private banking group based in Rome. The loan is guaranteed up to
80% by MedioCredito Centrale S.p.A., which is controlled by the Italian
Ministry of Economy. Release of funds through the Facility is subject to the
Plant's achievement of targeted performance criteria set by the Lender.
Corporate Development and Outlook
Having addressed most of the Company's legal issues, the only two legal
processes outstanding are a claim brought by the Company against Mr Rocco and
a claim with the Employment Tribunal brought by Mr Rocco against the
Company. The Executive backed by the Board is confident that it can now
concentrate on operational matters and drive the Company forward.
On 4 September 2023, the Company announced that a strategic business review,
which aims to capitalize on the Company's anticipation of a potential
bull-market cycle in the metals & mining sector, was being completed, a
further announcement was made on 28 September 2023.
The strategic business review has now been concluded and the Board has
confirmed its decision to concentrate growth and value creation efforts on the
mining sector. The initial focus will include gold and copper projects,
alongside other precious and strategic metals, which face high demand due to
global macroeconomic, energy transition, and technology trends.
As part of the review, we identified a number of potential reverse take-over
targets which are being evaluated to determine the most suitable value
acceleration for the benefit of its shareholders.
Going forward MetalNRG will be driven to build a global natural resources
business, delivering industry leading returns and sustainable dividends to
shareholders.
The Company will create shareholder value through indirect and direct
investments targeting outright acquisitions, and majority or minority
interests, in three types of projects:
1. Late-stage development projects, that will be in production within 12
to 18 months and offer additional upside post-production
2. Projects that are currently in production and offer substantial
exploration and development upside
3. Projects that offer blue sky growth opportunities that could become
company-making mines of the future.
The Company appointed Chris Chadwick to the Board and Chris will be
instrumental in the implementation process. Chris is a highly experienced mine
operator with a demonstrated track record of success in shareholder value
creation. Chris was previously the Chief Executive Officer of Gold One
International and director of Sibanye-Stillwater, one of the world's largest
primary producers of platinum, palladium, and rhodium and a top-tier gold
producer. He is also the co-founder and CEO of African Gold Acquisition Corp.
(NYSE: AGAC), a New York Stock Exchange-listed special purpose acquisition
company, from which he will resign in due course to focus his experience and
capabilities on MetalNRG. Chris has joined the MetalNRG Board as Executive
Director and is now working alongside Rolf Gerritsen also Executive Director.
We also announced additional strengthening of the management team, with the
appointment of Andrew Sekandi as a Risk & Compliance officer. Andrew
brings 15+ years' experience advising global mining firms on risk, compliance,
due diligence, and market entry. He has worked for global consulting
firms KPMG, Kroll, and Control Risks Group, and is a Namibian trained
(non-practising) lawyer.
Scott Gilbert joined as the Head of Operations. Scott brings 20+ years'
experience as an operations, commercial and marketing executive, with a focus
on the African mining and natural resources sector. He is currently the
Financial and Commercial Operations director of the Middelvlei gold project
in South Africa. Finally, Damon Chadwick has also joined the team in a
senior project management role. He will also take over the smooth running of
all, I.T., marketing and office support functions. With the team in place, a
clear direction to follow we now move full steam ahead into the implementation
of our plans and the Company will be making further announcements as we make
progress.
The Company will continue to seek additional projects that meet its set
investment criteria. The specific intention is to seek opportunities where we
can deliver early positive cash flows from an asset and, where the cash
generated from the operations allows us to explore and develop those projects
further.
As a result of the Company's strategic review, our partnership with EQTEC and
our investment in EQTEC Italia is now considered non-core and the Company will
be seeking the most suitable exit from this investment and we will keep the
market informed of our progress on this.
The second part of the year presents the Company with enormous opportunities
and further announcements of the Company's plans will be made in the coming
months.
Legal Process
During the first half of last year, MetalNRG focused on addressing its legal
challenges. The year started with certain shareholders requesting a General
Meeting to remove certain board members and replace them with their own
nominees. At the General Meeting, held in January 2023, the Resolutions set
out in the Notice of General Meeting were not passed by shareholders.
The legal process continued and in summary the Corporate Defendants lost their
case in the first instance and had paid £450,000 of the £1.02
million claimed to the Company. The Corporate Defendants had then sought
the right to appeal the summary judgement issued previously in respect of
the £574,000 balance (having already had such permission denied on the
papers). The Corporate Defendants also appealed a portion of the prior costs
award made in the Company's favour. The Court found in favour of the Company
in both respects; refusing the Corporate Defendants leave to appeal and
denying their substantive appeal on costs. The Corporate Defendants have now
been ordered to pay the Company's costs of these failed appeals.
April saw another court case come to a successful conclusion for the Company
when we announced the outcome of the appeal brought by Mr Rocco against the
Company in Scotland.
We believe that the most relevant cases have been concluded in our favour and
that we can move on with developing the business, while still managing the
outstanding legal processes in the UK High Court and the Employment Tribunal
in Scotland.
Financial Review
MetalNRG reported an unaudited operating loss for the six months period ended
30 June 2023 of £509,176 which includes £205,579 in legal and professional
fees relating to the BritNRG Ltd and related claims (six months period to 30
June 2022: an unaudited operating loss of £999,949). Basic and diluted loss
per share for the period was 0.04p and 0.04p respectively (six months period
to 30 June 2202: Basic loss per share was 0.09p and diluted loss per share was
0.09p).
Responsibility Statement
We confirm that to the best of our knowledge:
· The interim financial statements have been prepared in accordance
with International Accounting Standard 34, Interim Financial Reporting, as
adopted by the EU;
· The interim financial statements give a true and fair view of the
assets, liabilities, financial position and loss of the Group;
· The interim report includes a fair review of the information
required by DTR 4.2.7R of the Disclosure and Transparency Rules, being an
indication of important events that have occurred during the first six months
of the financial year and their impact on the interim financial information,
and a description of the principal risks and uncertainties for the remaining
six months of the year; and
· The interim financial information includes a fair review of the
information required by DTR 4.2.8R of the Disclosure and Transparency Rules,
being the information required on related party transactions.
Consolidated Statement of Profit or Loss
6 months to 6 months to Year ended 31 December 2022
30 June 2023 30 June 2022
Unaudited Unaudited Audited
£ £ £
Revenue - - -
Cost of sales - - -
Gross profit - - -
Administrative expenses (543,267) (999,949) (1,674,608)
Other operating income - - -
- - -
Operating loss before tax (543,267) (999,949) (1,674,608)
Taxation - - -
Finance income 51,657 35,782
Finance costs (17,566) (139,029)
Impairment of investments (440,582)
Loss for the period (509,176) (999,949) (2,218,437)
Attributable to:
Equity holders of the parent (509,176) (999,949) (2,218,437)
Non-controlling interests - - -
(509,176) (999,949) (2,218,437)
Earnings per share - see note 3
Basic (0.04) pence (0.09) pence (0.19) pence
Diluted (0.04) pence (0.09) pence (0.19) pence
Consolidated Statement of Comprehensive Income
6 months to 6 months to Year ended 31 December 2022
30 June 2023 30 June 2022
Unaudited Unaudited Audited
£ £ £
Loss after tax (509,176) (999,949) (2,218,437)
Items that may subsequently be reclassified to profit or loss:
- Foreign exchange movements (848) (452) (2,883)
- Share option charge 9,744 19,649
Total comprehensive loss (500,280) (1,000,401) (2,201,671)
Attributable to:
Equity holders of the parent (500,280) (1,000,401) (2,201,671)
Non-controlling interests - - -
(500,280) (1,000,401) (2,201,671)
Consolidated Statement of Financial Position
6 months to 30 June 2023 6 months to Year ended 31 December 2022
30 June 2022
Unaudited Unaudited Audited
£ £ £
Non-current assets
Intangible fixed assets 575,077 575,077 575,077
Tangible fixed assets - - -
Investments 863,387 1,293,053 860,843
Investments in associates - - -
Available for sale assets - - -
Total non-current assets 1,438,464 1,868,130 1,435,920
Current assets
Trade and other receivables 72,298 1,057,037 581,553
Cash and cash equivalents 34,405 12,073 24,724
Total current assets 106,703 1,069,110 606,277
Current liabilities
Trade and other payables (1,831,226) (1,601,239) (1,828,265)
Total current liabilities (1,831,226) (1,601,239) (1,825,265)
Non-current liabilities
Other non-current liabilities (25,969) (19,861) (25,680)
Total non-current liabilities (25,969) (19,861) (25,680)
Net assets (312,028) 1,316,140 188,252
Equity
Share capital 359,997 350,349 359,997
Share premium 6,495,541 6,422,036 6,495,541
Share based payment reserve 47,392 27,770 37,648
Retained losses (7,197,430) (5,469,766) (6,688,254)
Foreign currency reserve (17,528) (14,249) (16,680)
Equity attributable to equity holders of the parent (312,028) 1,316,140 188,252
Non-controlling interests - - -
Total equity (312,028) 1,316,140 188,252
Consolidated Statement of Cash Flows
6 months to 6 months to Year ended 31 December 2022
30 June 2023 30 June 2022
Unaudited Unaudited Audited
£ £ £
Cash flow from operating activities
Operating loss (509,177) (999,949) (2,218,437)
Loss on sale of investment - - -
Impairment of investments - - 440,582
Foreign exchange (848) (452) (2,883)
Finance income (51,657) - (35,782)
Finance costs 17,566 8,872 139,029
Bonus shares issued - - -
Share option charge 9,744 9,771 19,649
Increase/(decrease) in creditors 3,513 679,829 1,172,453
Decrease/(increase) in debtors 560,912 31,989 543,255
Net cash used in operating activities 30,054 (269,940) 57,866
Cash flows from investing activities
Payments for intangible assets - - -
Payments for tangible fixed assets - - -
Proceeds from sale of investment - - -
Purchase of investments (2,543) (27,303) (35,676)
Net cash used in investing activities (2,543) (27,303) (35,676)
Cash flows from financing activities
Proceeds from issue of shares and warrants
- - 5,250
Cost of shares issued - - (327,164)
Convertible loan note repayment (32,830) - (261,168)
Bridging loan repayment - - -
Bridging and other loan financing 15,000 260,000 536,300
Net cash generated from financing activities (17,830) 260,000 (46,782)
Net increase/(decrease) in cash and cash equivalents 9,681 (37,243) (24,592)
Cash and cash equivalents at the beginning of period
24,724 49,316 49,316
Cash and cash equivalents at end of period 34,405 12,073 24,724
Consolidated Statement of Changes in Equity
Share capital Share premium Share based payment reserve Retained earnings Foreign currency reserve Non-controlling interest Total
£ £ £ £ £ £ £
As at 30 June 2021 332,116 5,911,719 - (3,473,406) (435) (21,984) 2,748,010
Loss for the period - - - (996,411) - 22,484 (973,927)
Translation differences - - - - (13,362) - (13,362)
Total comprehensive income - - - (996,411) (13,362) 22,484 (987,289)
Share option charge - - 17,999 - - - 17,999
Shares issued 18,233 616,567 - - - (500) 634,300
Share issue costs - (106,250) - - - - (106,250)
Total contributions by and distributions to owners of the Company 18,233 510,317 17,999 - - (500) 546,049
As at 31 December 2021 350,349 6,422,036 17,999 (4,469,817) (13,797) - 2,306,770
Loss for the period - - - (999,949) - - (999,949)
Translation differences - - - - (452) - (452)
Total comprehensive income - - - (999,949) (452) - (1,000,401)
Share option charge - - 9,771 - - - 9,771
Shares issued - - - - - - -
Total contributions by and distributions to owners of the Company - - 9,771 - - - 9,771
As at 30 June 2022 350,349 6,422,036 27,770 (5,469,766) (14,249) - 1,316,140
Loss for the period - - - (1,218,488) - - (1,218,488)
Translation differences - - - - (2,431) - - - 2,431
Total comprehensive income - - - - - (2,431) - - 1,220,919
(1,218,488)
Share option charge - 9,878 - - - 9,878
Shares issued 9,648 68,255 - - - - 77,903
Share issue costs 5,250
Total contributions by and distributions to owners of the Company 9,648 73,505 9,878 - - - 93,031
359,997 6,495,541 37,648 - - - 188,252
As at 31 December 2022 (6,688,254) (16,680)
Loss for the period - - - (509,176) - - (509,176)
Translation differences - - - - - (848) - - 848
Total comprehensive income - - - - - (848) - - (509,176)
(509,176)
Share option charge - 9,744 - - - 9,744
Shares issued - - - - - - -
Total contributions by and distributions to owners of the Company - - 9,744 - - - 9,744
359,997 6,495,541 47,392 - - (17,528) - - (312,028 )
As at 30 June 2023 (7,197,430)
Half-yearly report notes
1. Half-yearly report
This interim report was approved by the Board of Directors on 28 September
2023.
The information relating to the six months periods to 30 June 2023 and 30 June
2022 are unaudited.
The information relating to the year ended 31 December 2022 is extracted from
the audited financial statements of the Company which have been filed at
Companies House and on which the auditors issued an unqualified audit report.
The condensed interim financial statements have been reviewed by the Company's
auditor.
2. Basis of accounting
The interim financial statements have been prepared using accounting policies
and practices that are consistent with those adopted in the statutory
financial statements for the year ended 31 December 2022, although the
information does not constitute statutory financial statements within the
meaning of the Companies Act 2006. The interim financial statements have been
prepared under the historical cost convention.
These interim financial statements are prepared in accordance with IAS 34
Interim Financial Reporting as adopted by the European Union and the
Disclosure and Transparency Rules of the UK Financial Conduct Authority.
This interim report does not include all the notes of the type normally
included in an annual financial report. Accordingly, this interim report
should be read in conjunction with the annual report for the year ended 31
December 2022, which have been prepared in accordance with International
Financial Reporting Standards (IFRS) as adopted by the European Union.
The Company will report again for the full year to 31 December 2023.
Going concern
The Company's day to day financing is from its available cash resources.
The Company is confident of raising funds to enable it to continue to develop
its targeted investments and exploration campaigns across its key projects
over the next 12-18 months and the Directors are confident that adequate
funding can be raised as required to meet the Company's current and future
liabilities.
For the reasons outlined above, the Directors are satisfied that the Company
will be able to meet its current and future liabilities, and continue trading,
for the foreseeable future and, in any event, for a period of not less than
twelve months from the date of approving this interim report. The preparation
of these interim financial statements on a going concern basis is therefore
considered to remain appropriate.
Critical accounting estimates
The preparation of condensed interim financial statements requires management
to make estimates and assumptions that affect the reported amounts of assets
and liabilities at the end of the reporting period. Significant items subject
to such estimates are set out in the Company's 2022 Annual Report and
Financial Statements. The nature and amounts of such estimates have not
changed significantly during the interim period.
Intangible assets
Exploration and development costs
All costs associated with mineral exploration and investments are capitalised
on a project-by-project basis, pending determination of the feasibility of the
project. Costs incurred include appropriate technical and administrative
expenses but not general overheads. If an exploration project is successful,
the related expenditures will be transferred to mining assets and amortised
over the estimated life of economically recoverable reserves on a unit of
production basis.
Intangible assets
Exploration and development costs
Where a licence is relinquished or a project abandoned, the related costs are
written off in the period in which the event occurs. Where the Group maintains
an interest in a project, but the value of the project is considered to be
impaired, a provision against the relevant capitalised costs will be raised.
The recoverability of all exploration and development costs is dependent upon
the discovery of economically recoverable reserves, the ability of the Group
to obtain necessary financing to complete the development of reserves and
future profitable production or proceeds from the disposition thereof.
3. Earnings per share
6 months to 6 months to Year ended 31 December 2022
30 June 2023 30 June 2022
Unaudited Unaudited Audited
£ £ £
These have been calculated on a loss of: (509,176) (999,949) (2,218,437)
The basic weighted average number of shares used was: 1,231,704,269 1,135,219,460 1,180,022,761
The diluted weighted average number of shares used was:
1,899,265,537 1,608,853,296 1,950,141,406
Basic loss per share: (0.04) pence (0.09) pence (0.19) pence
Diluted loss per share: (0.04) pence (0.09) pence (0.19) pence
4. Events after the reporting period
There were no reportable events after the reporting period other than those
highlighted in the 'Financial Review'.
The Condensed interim financial statements were approved by the Board of
Directors on 28 September 2023.
For the purposes of UK Mar, the person responsible for arranging for the
release of this announcement on behalf of the Company is Rolf Gerritsen, Chief
Executive Officer.
__________________________________________________________________________
For further information, please contact:
MetalNRG PLC:
Rolf Gerritsen +44 (0) 20 3709 8740
Chris Chadwick +44 (0) 20 3709 8740
Peterhouse Capital Limited - Joint Broker:
Lucy Williams + 44 (0) 207 469 0930
Duncan Vasey + 44 (0) 207 469 0930
S I Capital Limited - Joint Broker:
Nick Emerson +44 (0) 1483 413500
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