Altona Rare Earths - Interim Results
31/03/2025 07:00
RNS Number : 8347C
Altona Rare Earths PLC
31 March 2025
31 March 2025
ALTONA RARE EARTHS PLC
("Altona" or "the Company")
INTERIM RESULTS
Altona (LSE: REE), a resource exploration and development company focused on diversified critical raw materials in Africa, is pleased to announce its interim results for the six month period ended 31 December 2024.
HIGHLIGHTS
· Sesana copper-silver project (Botswana): option exercised, final agreement signed (Jan 2025), EIA started.
· Monte Muambe (Mozambique): 25 years mining licence approved in January 2025
· Commencement of a fluorspar production scoping study at Monte Muambe, highly encouraging assay results with 88.03% CaF2
· Metallurgical studies for rare earths recovery continuing
· Improved capital management through tighter control of corporate costs, ensuring greater allocation to operations
· Continued review of portfolio to best manage resources while assessing new project opportunities
· Converted £333,000 of loan notes and drawn 75% of the £900,000 loan facility to date. Cash of £156,000 as at 31 December 2024 with £225,000 undrawn facilities available
Cedric Simonet, CEO of Altona, commented, "The second half of 2024 and the first months of 2025 saw many achievements for Altona, including the approval of the Monte Muambe mining licence and the signature of the final agreement for the Sesana copper-silver project. The latter, as well as the assessment of the possible short-term production of fluorspar from Monte Muambe, are perfectly in line with the Company's diversification strategy through low-cost assets having potential for short-term monetisation.
"I am particularly excited with the Sesana copper silver project. The Kalahari Copper Belt is a highly sought-after copper province, with clear mineralisation controls and operating mines seeking avenues for expansion. This makes Sesana a compelling proposition, both in terms of geological and commercial merits."
This announcement contains information which, prior to its disclosure, was inside information as stipulated under Regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310 (as amended).
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Altona Rare Earths Plc
Cédric Simonet, CEO +44 (0) 7778 866 108
Louise Adrian, CFO +44 (0) 7721 492 922
Strand Hanson (Financial Adviser) +44 (0) 20 7409 3494
Christopher Raggett
About Altona Rare Earths Plc
Altona is a resource exploration and development company focused on critical raw materials in Africa. The Company is listed on the Main Market of the London Stock Exchange with the ticker "REE". The Company currently holds copper, fluorspar and rare earths projects.
The Monte Muambe rare earths and fluorspar project is located in Northwest Mozambique. The Project was acquired in June 2021, and the Company has so far drilled over 7,800m, and defined a maiden JORC Mineral Resource Estimate of 13.6 million tons at 2.42% TREO. A Competent Person Report including the Scoping Study for Monte Muambe was published on 18 October 2023. The Project is now at Prefeasibility Study stage, with a focus on metallurgical testing for rare earths extraction.
The Company is also assessing the possibility of rapidly putting in production high-grade fluorspar veins occurring at Monte Muambe along the western margin of the rare earth bearing carbonatite intrusion.
Altona is presently diversifying its portfolio by acquiring a limited number of critical raw material projects to complement Monte Muambe. The acquisitions of the Kabompo South copper project in Zambia and of the Sesana copper-silver project in Botswana, located just 25 km from MMG's Khoemacau Zone 5 copper-silver mine, represent the first steps towards the implementation of this expanded strategy.
Operational Review
Monte Muambe Rare Earths
During the reported period, activities at the Monte Muambe rare earth project were focused on continuing to derisk the project through securing a mining licence and through metallurgical testing.
The mining licence was approved shortly after the end of the reported period (see below), and significant progress was make in securing associated landrights (locally known as DUAT).
Metallurgical testing for rare earths recovery was undertaken at SGS Lakefields in Canada. The main objective of this testing was to further constrain the parameters of the flotation part of the process. An increase in the flotation concentrate grade will result in significant reduction of the opex and capex of the hydrometallurgical part process, for which the flotation concentrate is an input.
So far, the best tests (F2 and F6) achieved a mass pull of 23.2% and 31.2% (the lower the mass pull, the higher the concentrate grade), and a rare earths recovery of 59.7% and 69.3% respectively, with a good selectivity of rare earths against fluorite.
Monte Muambe Fluorspar
In September 2024, the company started reviewing the possibility of developing a fluorspar mining operation based on mineralisation present along the western edge of the Monte Muambe carbonatite intrusion (an area known as the "Fluorite Zone"). In October 2024, the Company carried out geology and topography mapping at the Fluorite Zone, and collected a 300kg fluorspar ore sample.
Assay results from the fluorspar sample were highly encouraging, with an average CaF2 grade of 88.03%. The assays also indicated the presence of, on average: 6.16% Fe2O3, 0.97% SiO2, 0.49% Al2O3, 1.08% P2O5, 1.62% SrO, and less than 0.36% CaCO3.
The Company started a scoping study aimed at assessing the potential viability of producing 15,000 to 20,000 tons per year of metallurgical grade fluorspar through a simple crushing and gravity concentration process.
Portfolio diversification
The Company continued to implement its portfolio diversification strategy announced in February 2024, with the aim of acquiring quality mineral exploration and development projects having relatively low acquisition and initial exploration costs, and short time lines to monetisation.
On 29 July 2024 the Company announced the exercise of the Sesana copper-silver project option, which will enable the Company to earn up to 85% in prospecting licence PL2329/2023, located on a highly potential part of the Kalahari Copper Belt in Botswana. While negotiating the final agreement, the Company initiated exploration work planning, environmental permitting and stakeholders consultations, and registered the project SPV (Sesana Copper (Pty) Ltd), of which we hold 51%.
The Company also carried out a field visit and a review of available geophysical data for its Kabompo South copper project, located in Zambia. The review concluded that the tenement is prospective for Iron Ore Copper Gold ("IOCG") copper mineralisation. Following these results the renewal process of the licence was started.
During the reported period the Company continued to assess new potential acquisitions in Namibia, Zambia and Mozambique.
Financial Review
During the reporting period the financial loss of the Group for the six months ended 31 December 2024 was £512,000 (H1 2023: £690,000). This decrease represents the results of the Company's efforts to reduce corporate costs to ensure that where possible, expenditure is focused on the Company's priority operational activities.
Non-current assets increased from £1.7m to £1.8m representing the continued expenditure at Monte Muambe to further the metallurgical work.
In July 2024, the Company converted £333,000 of convertible loan debt into equity at £0.01 per share and entered into two new loan facilities totaling £900,000 with a fixed interest rate of 12% and a maturity date of 30 October 2025. Net cash flow used in operations was £768,000 (H1 2024:£758,000) and net cash outflow from investing activities was £105,000 (H1 2024:£278,000). The cash balance was £156,000 (1H 2024:£73,000) at the period end, with two loan tranches of £225,000 still available to be drawn down at the date of this report.
Post Period End Activity
On 27 January 2025 the Company announced the signature of the final agreement for the acquisition of the Sesana copper-silver project.
This was followed by:
- The initiation of the transfer of prospecting licence PL2329/2023 to Sesana Copper (Pty) Ltd, the project special purpose vehicle 51% held by Altona and
- The start of the Environmental Impact Assessment approval process.
On 28 January 2025 the Company announced that the status of its Monte Muambe mining licence had changed to "active", with a licence validity extending up to 20 December 2049. Since then, the Company has received written confirmation of the attribution of the licence to its 51% held subsidiary Monte Muambe Mining Limitada, and is carrying out the remaining administrative processes for the final grant of the licence.
Activities at Monte Muambe continue to be focused on rare earths metallurgical testing and on progressing the fluorspar scoping study. The fluorspar sample collected in October 2024 is currently undergoing metallurgical testing (including both gravity separation and flotation) at Peacocke & Simpson's laboratories in Zimbabwe to assess processing options available to produce a commercial fluorspar product.
As previously announced, the Company is actively seeking a strategic investor for participation in the Monte Muambe project.
The Company continues to actively assess other potential new opportunities, with the objective of selecting a project having a low-entry cost and a clear pathway to early results and monetisation, preferably through short term development. Commodities being considered include copper, gold, zinc, and fluorspar.
Outlook
During the course of 2025, the Company intends to focus its activities on:
1) Rapidly advancing the Sesana copper-silver project through environmental permitting, geophysical surveys and target definition in order to be able to drill the first holes, which may lead to a copper-silver discovery, during the course of the year. The contact zone between the D'Kar and the Ngwako Pan formations, which carries copper-silver mineralisation in the Kalahari Copper Belt passes through the licence, and that MMG, the owner of the neighbouring Khoemacau Zone 5 mine, is considering an expansion of the mine which will require additional ore resources. In such circumstances, a potential discovery at Sesana could be easily monetized.
2) Continuing to seek a strategic investor for Monte Muambe, with several actions in place to this effect. The results of the Company's application to have Monte Muambe included in the list of Strategic Projects under the European Union's Critical Raw Materials Act are expected during the second quarter.
3) Assessing the possibility to produce fluorspar from Monte Muambe will continue and will be guided by the impending results of on-going fluorspar recovery metallurgical testing.
4) Identifying and participating in a new project, preferably with a very short timeline to production and cash flow. Several opportunities have been identified and are at an advanced stage of technical review.
Interim Financial Report
This interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report should be read in conjunction with the financial statements for the year ended 30 June 2024, and any public announcements made by Altona Rare Earths Plc during and subsequent to the interim reporting period.
Altona Rare Earths Plc, (the "Company") is a company registered in England and Wales. Its registered office is at Eccleston Yards, 25 Eccleston Place, London SW1W 9NF.
Principal Risks
The principal risks and uncertainties for the remaining six months of the financial year remain the same as those contained within the annual report and accounts as at 30 June 2024.
Related- party transactions
See note 16 for a list of the related party transactions that have taken place in the first six months of the current financial year. There have been no changes in the related party transactions described in the last annual report that could have a material effect on the financial position or performance of the Group in the first six months of the current financial year.
Post Reporting Date Events
See note 17 for a list of these events.
Statement of directors' responsibilities
The directors confirm that these condensed interim financial statements have been prepared in accordance with UK adopted International Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority and that the interim management report includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:
· an indication of important events that have occurred during the first six months and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and
· material related-party transactions in the first six months and any material changes in the related-party transactions described in the last annual report.
By order of the board
Cedric Simonet
Chief Executive Officer
31 March 2025
CONDENSED CONSOLIDATED STATEMENT OF PROFT OR LOSS AND
OTHER COMPREHENSIVE INCOME
FOR THE HALF YEAR ENDED 31 DECEMBER 2024
| Notes | Unaudited Half-year ended 31 Dec 2024 | Unaudited Half-year ended 31 Dec 2023 | |
| Continuing operations: | £'000 | £'000 | |
| Administrative expenses | 4 | (440) | (616) |
| Operational/exploration costs | (11) | - | |
| Operating loss | (451) | (616) | |
| Finance costs | 5 | (61) | (74) |
| Loss before taxation | (512) | (690) | |
| Income tax expense | - | - | |
| Loss for the period | (512) | (690) | |
| Total loss is attributable to: | |||
| Owners of Altona Rare Earths Plc | (493) | (659) | |
| Non-controlling interests | (19) | (31) | |
| (512) | (690) | ||
| Other comprehensive income: | |||
| Items that may be reclassified subsequently to profit and loss: | |||
| Exchange differences on translation of foreign operations | 34 | (16) | |
| Total comprehensive loss for the period | (478) | (706) | |
| Total comprehensive loss is attributable to: | |||
| Owners of Altona Rare Earths Plc | (468) | (676) | |
| Non-controlling interests | (10) | (30) | |
| (478) | (706) | ||
| Earnings per share (expressed in pence per share) | |||
| - Basic and diluted | 6 | (0.33p) | (0.83p) |
| Unaudited 31 Dec 2024 £'000 | Audited 30 June 2024 £'000 | ||
| ASSETS | |||
| Non-current assets | |||
| Intangible assets | 7 | 1,712 | 1,607 |
| Property, plant and equipment | 8 | 97 | 117 |
| Total non-current assets | 1,809 | 1,724 | |
| Current assets | |||
| Trade and other receivables | 9 | 179 | 174 |
| Cash and cash equivalents | 156 | 392 | |
| Total current assets | 335 | 566 | |
| Total assets | 2,144 | 2,290 | |
| LIABILITIES | |||
| Non-current liabilities | |||
| Loans and borrowings | 12 | - | (322) |
| Total non-current liabilities | - | (322) | |
| Current liabilities | |||
| Trade and other payables | 10 | (174) | (585) |
| Convertible loan notes | 11 | - | (362) |
| Loans and borrowings | 12 | (980) | - |
| Total current liabilities | (1,154) | (947) | |
| Total liabilities | (1,154) | (1,269) | |
| NET ASSETS | 990 | 1,021 | |
| EQUITY | |||
| Share capital | 13 | 3,045 | 2,283 |
| Share premium | 13 | 23,114 | 23,072 |
| Paid in share capital to issue | - | 345 | |
| Other equity-CLN reserve | - | 12 | |
| Share-based payment reserve | 474 | 474 | |
| Foreign exchange reserve | 54 | 29 | |
| Retained losses | (25,590) | (25,097) | |
| Capital and reserves attributable to the owners of Altona Rare Earths plc | 1,097 | 1,118 | |
| Non-controlling interests | (107) | (97) | |
| TOTAL EQUITY | 990 | 1,021 |
| Unaudited Half-year ended 31 Dec 2024 | Unaudited Half-year ended 31 Dec 2023 | ||
| £'000 | £'000 | ||
| Cash flow from operating activities | |||
| Loss for the period before taxation | (512) | (690) | |
| Adjusted for: | |||
| Depreciation | 4 | 20 | 12 |
| Interest | 5 | 61 | 74 |
| Shares issued for services/ share-based payments | 48 | 52 | |
| Foreign exchange movement | 34 | 22 | |
| Cashflow from operations before working capital changes | (349) | (530) | |
| (Increase)/ decrease in receivables | (5) | 23 | |
| Decrease in payables | (412) | (251) | |
| Net cash outflow used in operating activities | (766) | (758) | |
| Cash flows from investing activities | |||
| Expenditure on intangible assets | 7 | (105) | (183) |
| Expenditure on tangible assets | 8 | (1) | (9) |
| Purchase of subsidiaries | - | (86) | |
| Net cash outflow from investing activities | (106) | (278) | |
| Cash flows from financing activities | |||
| Proceeds from the issue of shares | 49 | - | |
| Proceeds from loans | 12 | 587 | - |
| Finance costs paid | - | (21) | |
| Net cash inflow/ (outflow) from financing activities | 636 | (21) | |
| Net decrease for period | (236) | (1,057) | |
| Beginning cash | 392 | 1,130 | |
| Cash and cash equivalents at end of period | 156 | 73 |
| Share capital | Share premium | Paid in share capital to issue | CLN reserve | FX reserve | SBP reserve | Retained losses | Minority interest | Total | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| Balance at 30 June 2024 | 2,283 | 23,072 | 345 | 12 | 29 | 474 | (25,097) | (97) | 1,021 |
| Loss for the period | - | - | - | - | - | - | (493) | (19) | (512) |
| Foreign Exchange movement | - | - | - | - | 25 | - | - | 9 | 34 |
| Total Comprehensive loss for the period | - | - | - | - | 25 | - | (493) | (10) | (478) |
| Transactions with owners recognised directly in equity | |||||||||
| Issue of shares | 417 | 42 | - | - | - | - | - | - | 459 |
| Shares to be issued | 345 | - | (345) | - | - | - | - | - | - |
| CLN issue | - | - | - | (12) | - | - | - | - | (12) |
| Totaltransactions with owners recognised directly in equity | 762 | 42 | (345) | (12) | - | - | - | - | 447 |
| Balance at 31 December 2024 | 3,045 | 23,114 | - | - | 54 | 474 | (25,590) | (107) | 990 |
| Balance at 30 June 2023 | 2,239 | 22,950 | - | 12 | 17 | 121 | (23,360) | (94) | 1,885 |
| Loss for the period | - | - | - | - | - | - | (659) | (31) | (690) |
| Foreign exchange movement | - | - | - | - | (17) | - | - | 1 | (16) |
| Change in NCI asset | - | - | - | - | - | - | - | 49 | 49 |
| Total comprehensive loss for the period | - | - | - | - | - | - | (659) | 19 | (657) |
| Transactions with owners recognised directly in equity | |||||||||
| Issue of shares | 20 | 63 | - | - | - | - | - | - | 166 |
| Share-based payment | - | - | - | - | - | 46 | - | - | 353 |
| Totaltransactions with owners recognised directly in equity | 20 | 63 | - | - | - | 46 | - | - | 129 |
| Balance at 31 Dec 2023 | 2,259 | 23,013 | - | 12 | - | 167 | (24,019) | (75) | 1,357 |
| Half year ending 31 December 2024 | Corporate and Administrative (UK/Mauritius) | Mineral exploration (Mozambique) | Other | Total |
| £'000 | £'000 | £'000 | £'000 | |
| Operating loss before and after taxation | (440) | (39) | (33) | (512) |
| Segment total assets (net of investments in subsidiaries) | 470 | 1,656 | 18 | 2,144 |
| Segment liabilities | (1,135) | (15) | (4) | (1,154) |
| Half year ending 31 December 2023 | Corporate and Administrative (UK) | Mineral exploration (Mozambique) | Other | Total |
| £'000 | £'000 | £'000 | £'000 | |
| Operating loss before and after taxation | 650 | 40 | - | 690 |
| Segment total assets (net of investments in subsidiaries) | 479 | 1,482 | - | 1,961 |
| Segment liabilities | (573) | (31) | - | (604) |
| Unaudited Half year ended 31 Dec 2024 | Unaudited Half year ended 31 Dec 2023 | |
| £'000 | £'000 | |
| Legal and professional | 116 | 193 |
| Regulatory fees | 52 | 5 |
| Wages and Salaries | 150 | 272 |
| Depreciation | 20 | 12 |
| Other | 102 | 134 |
| 440 | 616 |
| Unaudited Half year ended 31 Dec 2024 | Unaudited Half year ended 31 Dec 2023 | |
| £'000 | £'000 | |
| Release of CLN reserve | (12) | 21 |
| Interest payable on facility loans | 71 | 7 |
| Share-based payment on loans (cost of warrants) | - | 46 |
| Foreign exchange movement | 2 | - |
| 61 | 74 |
| Unaudited Half year ended 31 Dec 2024 | Unaudited Half year ended 31 Dec 2023 | |
| Loss for the period (£'000) | (512) | (690) |
| Weighted average number of shares - expressed in thousands | 153,016 | 83,560 |
| Basic loss per share - expressed in pence | (0.33p) | (0.83p) |
| Exploration and evaluation assets | |
| £'000 | |
| Cost and carrying amount | |
| At 1 July 2023 | 1,290 |
| Exploration and evaluation assets additions | 67 |
| Additions to exploration assets | 250 |
| At 30 June 2024 | 1,607 |
| Additions to exploration assets | 105 |
| At 31 December 2024 | 1,712 |
| Buildings | Heavy machinery | Precision machinery and office equipment | Vehicles | Total assets | |
| £'000 | £'000 | £'000 | £'000 | £'000 | |
| Cost | |||||
| At 1 July 2024 | 35 | 89 | 37 | 24 | 185 |
| Additions | - | 1 | - | - | 1 |
| At 31 December 2024 | 35 | 90 | 37 | 24 | 186 |
| Accumulated Depreciation | |||||
| At 1 July 2024 | 2 | 40 | 13 | 13 | 68 |
| Depreciation charge | 1 | 13 | 4 | 3 | 20 |
| Foreign exchange | - | 1 | - | - | 1 |
| At 31 December 2024 | 3 | 54 | 16 | 16 | 89 |
| Net Book Value | |||||
| At 30 June 2024 | 33 | 49 | 24 | 11 | 117 |
| At 31 December 2024 | 32 | 36 | 21 | 8 | 97 |
| Unaudited 31 December 2024 £'000 | Audited 30 June 2024 £'000 | |
| Taxes and social security receivable | 127 | 128 |
| Prepayments and other receivables | 52 | 46 |
| 179 | 174 |
| Unaudited 31 December 2024 £'000 | Audited 30 June 2024 £'000 | |
| Trade payables | 68 | 127 |
| Accruals and other payables | 106 | 458 |
| 174 | 585 |
| Unaudited 31 December 2024 £'000 | Audited 30 June 2024 £'000 | |
| Opening balance | 362 | - |
| Loan notes issued in the period | - | 362 |
| Converted in period | (333) | - |
| Interest paid | (17) | - |
| Reallocated to other payables | (12) | - |
| - | 362 |
| Movement in loans and borrowings: | £'000 |
| Balance as at 1 July 2024 | 322 |
| Loans drawndown in the period | 587 |
| Interest expense | 71 |
| Balance as at 31 Dec 2024 | 980 |
| No. | £'000 | |
| Ordinary Shares | ||
| Ordinary shares at 1 July 2024 | 86,767,107 | 868 |
| Shares issued in the half year on 25 July 2024 | 76,428,759 | 762 |
| TOTAL ORDINARY SHARES at 31 December 2024 | 163,015,866 | 1,630 |
| Deferred Shares at 0.09p | ||
| Deferred shares at 1 July 2024 and 31 December 2024 | 1,411,956,853 | 1,271 |
| Deferred Shares at 9p | ||
| Deferred shares at 1 July 2024 and 31 December 2024 | 1,602,434 | 144 |
| TOTAL DEFERRED SHARES at 31 December 2024 | 1,413,559,287 | 1,415 |
| TOTAL SHARES AT 31 December 2024 | 15,576,575,153 | 3,045 |
| ORDINARY SHARES | Ordinary shares | Share Capital | Share Premium | Total |
| No. | £'000 | £'000 | £'000 | |
| As at 30 June 2024 | 86,767,107 | 868 | 23,072 | 23,940 |
| Issued 25 July 2024 - subscription shares | 39,400,000 | 394 | - | 394* |
| Issued 25 July 2024 - CLN shares | 33,300,000 | 333 | - | 333 |
| Issued 25 July 2024 - fee and creditor shares | 3,548,759 | 35 | 42 | 77 |
| As at 31 Dec 2024 | 163,015,866 | 1,630 | 23,114 | 24,744 |
| Number of warrants | Exercise Price | ||
| Balance as at 30 June 2024 | 313,646,561 | £0.01 - £0.14 | |
| Less Broker warrants 1 which expired during the period | 342,857 | £0.14 | |
| Balance as at 31 Dec 2024 | 313,303,704 | £0.01 - £0.12 |