REG - Red Rock Resources - Half-year Report
28/03/2024 07:00
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RNS Number : 6008I Red Rock Resources plc 28 March 2024
Red Rock Resources plc Company number 05225394
28 March 2024
Red Rock Resources plc
Unaudited half-yearly results for the six months ended
31 December 2023
Red Rock Resources plc ("Red Rock" or "the Company"), the natural resources
exploration and development company with interests in gold, copper, cobalt,
lithium and other energy assets, announces its half-yearly results for the six
months ended 31 December 2023.
Chairman's Statement
We have pleasure in presenting our financial results for the six months to
31(st) December 2023. The figures are not materially changed from the previous
year. The Company has continued to await positive developments in the DRC and
in the listing of Elephant Oil. Both these developments, which would
crystallise value and bring new cash to the balance sheet, have been slower
than expected to eventualise.
The Company has therefore started to rethink, within and after the period, its
strategies for its gold assets in West Africa, its lithium capabilities in
Zimbabwe, and its further gold assets through its Australian subsidiary Red
Rock Australasia Pty Ltd, a company held through 50.1% controlled New Ballarat
Gold Corporation PLC. The object in each case has been to develop early cash
flow.
DRC Legal Action
We continue to devote time to dealing with one important matter. To repeat
what we wrote last year, in December 2019 our 50.1% owned joint venture assets
in the Democratic Republic of Congo were signed away behind our backs for $20
million to an initial buyer and then immediately sold on for several hundred
million dollars to a further party, although these transactions were carefully
hidden from us at the time. In our efforts to restore every dollar of this
lost value to the Company, we first took advice from UK counsel as to our
course of action, and then litigated in the DRC in relation to the $20m. We
obtained a final and executory judgment early in 2022 for 50.1% of $5m, which
was the part of the $20m that had already been paid to VUP (our historic
partner on the asset) by the initial buyer, and then went to arbitration on
the $15m balance which had not yet been paid out by the initial buyer. We were
awarded a further $2m costs and damages in relation to the initial action on
the $5m. We had not been able up to now to enforce the first $2.5m judgment
against third parties that might hold VUP funds. Our ability to do so, in
relation to both the $2.5m and the $2m awards, depends inter alia on VUP being
in funds.
The arbitration in relation to the $15m, of which we again claim 50.1%,
finished its hearings in July 2022 and awaits formal signature of the Minutes
and Acte Transactionnel. The payor in this case holds funds and has committed,
through its legal counsel at the arbitration, to pay the funds, retained
pending the results of litigation, in accordance with the arbitral judgment.
We expect the award, of which we have seen drafts, to be in favour of two
parties, Red Rock and VUP. All amounts stated here are gross, before legal,
court and administrative costs.
As a result of the undertakings given by the buyer, a parastatal company, in
the course of the arbitration process, our expectation is that payments will
be made promptly. In the case of delay, we would need to accelerate
alternative funding measures, whether by fund-raising or a sale of non-core
assets, to strengthen our balance sheet and to meet our ongoing working
capital requirements.
Given that we have established our rights as 50.1% owners of the JV property
under Congolese law, we are turning our attention to those remedies available
to us in other jurisdictions or from other parties, and in connection with
this will be seeking further advice from counsel.
Other Assets
Gold has been outperforming other assets, except the US dollar, for some time,
and we expect that in time it would start to perform against the US dollar as
well. As such, we have taken measures to strengthen our gold portfolio.
Since the period end we have announced a conditional agreement allowing us to
buy the 49.9% of New Ballarat Gold Corporation PLC ("NBGC") which we do not
already own, and we are currently conducting due diligence to ensure that
these assets would support a post-acquisition rapid development strategy,
following which we intend to put to shareholders the issue of the initial
consideration shares. In parallel, we are engaged in discussions with
potential investors in these assets, either at the pre-IPO stage or
immediately, in part or in whole.
NBGC's large acreage position in Victoria contains two near surface historic
high-grade mines, and a number of other prospects. These are attractive assets
that offer a real prospect of development of at least one good grade mine on a
reasonable timeframe. We will report further on this as our due diligence
process proceeds.
In West Africa, we have in the last year seen two licences granted in Ivory
Coast, in mineralized belts near the capital and covering ground adjacent to
important gold mines. We have further high-quality applications, two in the
same vicinity, that are near grant but under new policies expect that grant of
these will ultimately depend on good progress at the existing licences. A
total of 7 applications have been made, but it is likely that a 4 licence
policy will be imposed now, and so in relation to these and other assets, we
need to discuss partnership and sale proposals, in order to maximise the value
of our portfolio. We have had initial discussions with a number of parties,
and exposed the projects at the PDAC mining conference in Toronto, from which
we have some new interest expressed. We will make announcements as
negotiations develop as appropriate.
In Burkina Faso, we are starting to implement a policy for alluvial gold
production initially. Some illegal operators had come onto the site and
started to excavate pits, and we have had them removed, but we should not lose
time in establishing our own, legal, operations. Hard rock potential also
exists: our drilling in Burkina Faso had strong intercepts including 20m at
3.19 g/t gold from 22m depth.
In Kenya, we are in the process of licence renewal on our gold project, which
already contain a Mineral Resource Estimate.
Besides gold, we have started lithium operations in Zimbabwe which has
absorbed the greater part of our project development expenditure in the
period. We have yet to conclude sales, as we believe we will gain more by
holding our current stockpile in Beira and Harare as prices recover post the
Chinese New Year, and only then will we recommence active operations and
export.
Elephant Oil Corporation (EOC) has interests onshore Namibia and onshore Benin
on the Nigerian border. The listing has been delayed beyond our expectations,
but what we now hope for is some increase in Elephant's breadth of operation
and financial strength, before an IPO, to create a larger entity post-listing.
This appears a sensible strategy but means that our hopes for a near-term IPO
are deferred. We note that we have no control over EOC or the timing of its
listing process.
Conclusion
The Company expects to continue to rationalize and dispose of parts of its
portfolio in order to focus on cash generation. In the absence of proceeds
from the DRC, a focus on early gold production and other immediate cash flow
operations will continue, and as we will assess which of our projects are
capable of short term exploitation and should be prioritized, and which can
only be medium or long term projects, we will seek partnership or sale
opportunities for non-core assets..
We are grateful for the continued support of our shareholders and lenders.
Andrew Bell
Chairman
27 March 2024
Consolidated statement of financial position as at 31 December 2023
Notes 31 December 31 December 30 June 2023
2023 2022
Unaudited, Unaudited, Audited,
£'000 £'000 £'000
ASSETS
Non-current assets
Investments in associates and joint ventures 1,030 1,030 1,030
Financial instruments 8 736 736 13,358
Exploration assets 9 13,358 13,287 698
Mineral tenements 710 525 736
Property, Plant & Equipment 16 2 18
Non-current receivables 2,506 2,320 2,506
Total non-current assets 18,356 17,900 18,346
Current assets
Cash and cash equivalents 82 242 155
Loans and other receivables 667 770 670
Total current assets 749 1.012 825
TOTAL ASSETS 19,105 18,912 19,171
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Called up share capital 10 3,047 2,847 2,960
Share premium account 33,426 31,270 32,785
Other reserves 2,040 1,565 1,751
Retained earnings (23,830) (20,984) (22,477)
Total equity attributable to owners of the parent 14,683 14,698 15,019
(687)
Non-controlling interest (866) (537)
Total equity 13,817 14,161 14,332
LIABILITIES
Non-current liabilities
Trade and other payables 813 540 684
Borrowings 734 822 756
Total non-current liabilities 1,547 1,362 1,440
Current liabilities
Trade and other payables 1,702 1,461 1,737
Short term borrowings 11 2,039 1,928 1,662
Total current liabilities 3,741 3,389 3,399
TOTAL EQUITY AND LIABILITIES 19,105 18,912 19,171
The accompanying notes form an integral part of these financial statements.
Consolidated statement of income
for the period ended 31 December 2023
Notes 6 months to 31 December 6 months to 31
2023 December 2022
Unaudited, Unaudited,
£'000 £'000
Administrative expenses 4 (585) (633)
Project development costs 5 (382) (261)
Exploration expenses (288) (204)
Foreign exchange gain/(loss) 16 55
Finance income/(expenses), net 6 (293) (267)
(Loss)/profit for the period (1,532) (1,310)
Tax credit - -
(Loss)/profit for the period 7 (1,532) (1,310)
(Loss)/profit for the period attributable to:
Equity holders of the parent (1,353) (1,172)
Non-controlling interest (179) (138)
(1,532) (1,310)
(Loss)/profit per share
(Loss)/profit per share - basic, pence 3 (0.06) (0.10)
(Loss)/profit per share - diluted, pence 3 (0.06) (0.10)
The accompanying notes form an integral part of these financial statements.
Consolidated statement of comprehensive income
for the period ended 31 December 2023
6 months to 31 6 months to 31
December 2023 December 2022
Unaudited, £'000 Unaudited, £'000
(Loss) /profit for the period (1,532) (1,310)
Unrealised foreign currency loss arising upon retranslation of foreign 65 38
operations
Total comprehensive income/(loss) for the period (1,467) (1,272)
Total comprehensive income/(loss) for the period attributable to:
Equity holders of the parent (1,288) (1,133)
Non-controlling interest (179) (138)
(1,467) (1,271)
The accompanying notes form an integral part of these financial statements.
Consolidated statement of changes in equity for the period ended 31 December
2023
The movements in equity during the period were as follows:
Total attributable to owners of
Share premium the Parent Non- controlling
Share capital account Retained earnings Other reserves interest Total equity
Unaudited £'000 £'000 £'000 £'000 £'000 £'000 £'000
As at 30 June 2023 (audited) 2,960 32,785 (22,477) 1,751 15,019 (687) 14,332
Changes in equity for the six- month period ending 31
December 2021
Loss for the period - - (1,353) - (1,353) (179) (1,532)
Unrealised foreign currency gains on translation of foreign operations - - - 65 65 - 65
Total comprehensive
income/(loss) for the period - - (1,353) 65 (1,288) (179) (1,467)
Transactions with shareholders
Issue of shares 87 641 - - 728 - 728
Shares to issue - - - 224 224 - 224
Total transactions with
shareholders 87 641 (1,355) 224 952 - 952
As at 31 December 2023
(unaudited) 3,047 33,462 (23,830) 2,040 14,683 (866) 13,817
As at 30 June 2022 (audited) 2,839 31,077 (19,812) 1,434 15,538 (420) 15,118
Changes in equity for the six- month period ending 31
December 2021
Loss for the period - - (1,172)) - (1,172) (138) (1,310)
Unrealised foreign currency gains on translation of foreign operations - - - 38 38 21 59
Total comprehensive - - (1,172) 38 (1,134) (117) (1,251)
income/(loss) for the period
Transactions with shareholders
Issue of shares 8 193 - - 201 - 201
Grant of warrants - - - 93 93 - 93
Total transactions with 8 193 - 93 294 - 294
shareholders
As at 31 December 2022 2,847 31,270 (20,984) 1,565 14,698 (537) 14,161
(unaudited)
FVTOCI Foreign currency translation Share- based payment Share to Issue reserve Warrants reserve Total other reserves
financial reserve reserve
assets
reserve
Unaudited £'000 £'000 £'000 £'000 £'000 £'000
As at 30 June 2023 (audited) 402 125 230 - 994 1,751
Changes in equity for six months ended 31 December 2021
Unrealised foreign currency loss on translation of foreign - 65 - - - 65
operations
Total other comprehensive income for the period - 65 - - - 65
Transactions with shareholders
Share to Issue - - - 224 - 224
Total transactions with shareholders - - - 224 - 224
As at 31 December 2023 (unaudited) 402 190 230 224 994 2,040
As at 30 June 2022 (audited) 402 (19) 230 - 821 1,434
Changes in equity for six months ended 31 December 2021
Unrealised foreign currency loss on translation of foreign - 38 - - - 38
operations
Total other comprehensive income for the period - 38 - - - 38
Transactions with shareholders
Grant of warrants - - - - 93 93
Total transactions with shareholders - - - - 93 93
As at 31 December 2022 (unaudited) 402 19 230 - 914 1,565
Consolidated statement of cash flows
for the period ended 31 December 2023
6 months to 31 6 months to 31
December 2023 December 2022
Unaudited, Unaudited,
£'000 £'000
Cash flows from operating activities
(Loss)/profit before tax (1,532) (1,288)
Decrease/(Increase) in receivables 3 55
Increase/(Decrease) in payables (33) 103
Share-based payments - 94
Depreciation 2 -
Finance costs/income, net 293 173
Currency adjustments (6) -
Net cash outflow from operations (1,273) (863)
Cash flows from investing activities
Purchase of property, plant and equipment - (2)
Proceeds from sale of investments - -
Payments for capitalised exploration costs - (22)
Payments to increase interest in tenements (12) (14)
Payments to increase interest in associate - -
Net cash (outflow)/inflow from investing activities (12) (38)
Cash flows from financing activities
Proceeds from issue of shares 472 201
Interest paid (29) (173)
Proceeds from new borrowings 789 1,011
Repayments of borrowings (85) -
Net cash inflow/(outflow) from financing activities 1,147 1,039
Net increase in cash and cash equivalents (138) 138
Cash and cash equivalents at the beginning of period 155 66
Exchange losses on cash and cash equivalents 65 38
Cash and cash equivalents at end of period 82 242
Half-yearly report notes
for the period ended 31 December 2023
1 Company and group
As at 31 December 2023, 30 June 2023 and 31 December 2022 the Company had one
or more operating subsidiaries and has therefore prepared full and interim
consolidated financial statements respectively.
The Company will report again for the year ending 30 June 2024.
The financial information contained in this half yearly report does not
constitute statutory accounts as defined in section 435 of the Companies Act
2006. The financial information for the year ended 30 June 2023 has been
extracted from the statutory accounts for the Group for that year. Statutory
accounts for the year ended 30 June 2023, upon which the auditors gave an
unqualified audit report which did not contain a statement under Section
498(2) or (3) of the Companies Act 2006, have been filed with the Registrar of
Companies.
2 Accounting Polices
Basis of preparation
The consolidated interim financial information has been prepared in accordance
with IAS 34 'Interim Financial Reporting.' The accounting policies applied by
the Group in these condensed consolidated interim financial statements are the
same as those applied by the Group in its consolidated financial statements as
at and for the year ended 30 June 2023, which have been prepared in accordance
with IFRS.
3 Earnings per share
The following reflects the loss and number of shares data used in the basic
and diluted loss per share computations:
6 months to 6 months to
31 December 2023 31 December 2022
Unaudited Unaudited
Profit/(loss) attributable to equity holders of the parent company, Thousand (1,532,000) (1,310,000)
pounds Sterling
Weighted average number of Ordinary shares of £0.0001 in issue, used for 2,590,767,190 1,279,734,195
basic EPS
Effect of all dilutive potential ordinary shares from potential ordinary
shares that would have to be issued, if all loan notes convertible at the
discretion of the noteholder converted at the - -
beginning of the period
Weighted average number of Ordinary shares of £0.0001 in issue, including 2,590,767,190 1,279,734,195
potential ordinary shares, used for diluted EPS
Profit/(loss) per share - basic, pence (0.06) (0.10)
Profit/(loss) per share - diluted, pence (0.06) (0.10)
At 31 December 2023 and 31 December 2022, the effect of the following the
instruments is anti-dilutive, therefore they were not included into the
diluted earnings per share calculation.
6 months to 6 months to
31 December 2023 31 December 2022
Unaudited Unaudited
Share options granted to employees - not vested and/or out of the money 21,000,000 50,000,000
Number of warrants given to shareholders as a part of placing 314,178,13
equity instruments - out of the money 426,892,441
Total number of contingently issuable shares that could
potentially dilute basic earnings per share in future 335,178,213 476,892,441
Total number of contingently issuable shares that could potentially dilute
basic earnings per share in future and anti- dilutive potential ordinary
shares that were not included into the fully diluted EPS calculation 335,178,213 476,892,441
There were no ordinary share transactions after 31 December 2023, that that
could have changed the EPS calculations significantly if those transactions
had occurred before the end of the reporting period.
4 Administrative expenses
6 months to 6 months to
31 December 2023 31 December 2022
Unaudited Unaudited
£'000 £'000
Staff Costs:
Payroll 307 329
Pension 27 28
Consultants 8 8
HMRC / PAYE 21 20
Professional Services:
Accounting 25 49
Legal - 8
Marketing 16 10
Other - 1
Regulatory Compliance 40 46
Travel 32 11
Office and Admin:
General 32 19
IT costs 5 35
Rent 46 44
Insurance 25 25
Total administrative expenses 585 633
Included in the above admin costs for the year are £168,000 (2022: £230,000)
in costs related to the administration of subsidiary project undertakings.
5 Project development expenses
Project development expenses include costs incurred during the assessment and
due diligence phases of a project, when material uncertainties exist regarding
whether the project meets the Company's investment and development criteria
and whether as a result the project will be advanced further.
6 months to 6 months to
31 December 2023 31 December 2022
Unaudited Unaudited
£'000 £'000
Project development expenses
VUP (Congo) 6 15
Zlata Bana (Slovakia) - -
Galaxy (Congo) - -
Luanshimba (Congo) - 47
Kinsevere (Congo) - -
Mid Migori Mines (Kenya) - -
Zimbabwe Lithium 268 15
Greenland 84 80
Others 102 104
Total project development expenses 460 261
6 Finance income/(expenses), net
6 months to 6 months to
31 December 2023 31 December 2022
Unaudited Unaudited
£'000 £'000
Interest income - -
Share based payments - (94)
Interest expense (293) (173)
Total Finance income/(expenses), net (293) (267)
7 Segmental analysis
Other exploration Corporate
Kenyan exploration Australian exploration DRC and unallocated
exploration Total
For the six-month period to 31 December 2023 £'000 £'000 £'000 £'000 £'000 £'000
Revenue
Total segment external revenue - - - - - -
Result
Segment results (187) (169) (9) (468) (406) (1,239)
Loss before tax and finance costs
Interest income -
Interest expense (293)
Loss before tax (1,532)
Tax -
Loss for the period (1,532)
Jupiter Mines Limited Corporate
Kenyan exploration Australian exploration DRC and unallocated
exploration Total
For the six-month period to 31 December 2022 £'000 £'000 £'000 £'000 £'000 £'000
Revenue
Total segment external revenue - - - - - -
Result
Segment results (258) (146) (64) (201) (374) (1,043)
Loss before tax and finance costs
Interest income -
Interest expense (267)
Loss before tax (1,310)
Tax -
Loss for the period (1,310)
A measure of total assets and liabilities for each segment is not readily
available and so this information has not been presented.
8 Financial instruments - Fair value through other comprehensive income
31 December 31 December 30 June
2023 2022 2023
Unaudited Unaudited Audited
£'000 £'000 £'000
At the beginning of the period 736 736 736
Additions - - -
Disposals - - -
Change in fair value - - -
At the end of the period 736 736 736
9 Exploration assets
31 December 31 December 30 June
2023 2022 2023
Unaudited Unaudited Audited
£'000 £'000 £'000
At the beginning of the period 13,358 13,265 13,265
Additions - 22 139
Impairments - (259)
Reclassification from other current assets - - 213
At the end of the period 13,358 13,287 13,358
10 Share Capital
Number Nominal,
£'000
Deferred shares of £0.0009 each 2,371,116,172 2,134
A deferred shares of £0.000096 each 6,033,861,125 579
Ordinary shares of £0.0001 each 3,336,764,458 334
As at 31 December 2023 3,047
11 Short-term borrowings
Reconciliation of Liabilities Arising from Financing Activities
Cash flow Cash flow repayments principle Non - cash flow Non - cash flow Non-cash Non-cash
30 June loans received Conversions Interest accrued flow Reclassification flow Forex movement 31 Dec
Group 2023 2023
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Convertible notes 694 210 - (127) 41 - - 818
Other loans 967 450 (69) (128) 224 (224) - 1,220
Total 1,661 660 (69) (253) 265 (224) - 2,038
Repayments of borrowings in the year include £21,956 paid against non-current
borrowings from Kansai not included in the above table of current borrowings.
12 Capital Management
Management controls the capital of the Group in order to control risks,
provide the shareholders with adequate returns and ensure that the Group can
fund its operations and continue as a going concern.
The Group's debt and capital includes ordinary share capital and financial
liabilities, supported by financial assets. There are no externally imposed
capital requirements.
Management effectively manages the Group's capital by assessing the Group's
financial risks and adjusting its capital structure in response to changes in
these risks and in the market. These responses include the management of debt
levels, distributions to shareholders and share issues.
There have been no changes in the strategy adopted by management to control
the capital of the Group since the prior period.
13 Subsequent Events
On 24 January 2024 the Group announced the award of a second exploration
license in Côte d'Ivoire covering 380.94 sq Km, predominantly in the
Yamoussoukro department.
On 12 February 2024 the Group announced the conversion of £134,820 of
convertible loan notes into 211,482,353 ordinary shares in the Company at a
price of £0.0006375.
On 13 March 2024 the Group announced the conditional agreement for the
acquisition of the remaining 49.9% interest in Red Rock Australasia Pty Ltd
currently held by Power Metals Resources plc. The conditional agreement
envisages the aggregate consideration payable for the acquisition of £1.5m in
fixed and contingent payments, comprising a combination of cash, shares and
convertible loan notes to be issued on completion of various transactional
milestones.
For further information, please contact:
Andrew Bell 0207 747
9990
Chairman Red Rock Resources Plc
Roland Cornish/ Rosalind Hill Abrahams 0207 628 3396
NOMAD Beaumont Cornish Limited
Bob Roberts 0203
8696081
Broker Clear Capital Corporate Broking
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) and is disclosed
in accordance with the Company's obligations under Article 17.
Beaumont Cornish Limited ("Beaumont Cornish") is the Company's Nominated
Adviser and is authorised and regulated by the FCA. Beaumont Cornish's
responsibilities as the Company's Nominated Adviser, including a
responsibility to advise and guide the Company on its responsibilities under
the AIM Rules for Companies and AIM Rules for Nominated Advisers, are owed
solely to the London Stock Exchange. Beaumont Cornish is not acting for and
will not be responsible to any other persons for providing protections
afforded to customers of Beaumont Cornish nor for advising them in relation to
the proposed arrangements described in this announcement or any matter
referred to in it.
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