REG - Sunrise Resources - HALF-YEARLY REPORT 2022
24/05/2022 14:00
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RNS Number : 6322M Sunrise Resources Plc 24 May 2022
24 May 2022
SUNRISE RESOURCES PLC
("Sunrise" or the "Company")
HALF-YEARLY REPORT 2022
Sunrise Resources plc, the AIM-traded company focusing on the development of
its CS Pozzolan-Perlite Project in Nevada, USA, announces its unaudited
interim results for the six months ended 31 March 2022, a copy of which is
also available on the Company's website, www.sunriseresourcesplc.com
Operational Highlights
CS Pozzolan-Perlite Project
Ø Discussions continuing for project development with cement and concrete
industry participants. Recent meetings held with multiple parties, including:
o two cement & ready-mix companies,
o a major fly ash distributor,
o a large building materials company and
o a new cement clean-tech company.
Ø Application made for conditional approval of CS natural pozzolan for
Caltrans's Authorized Materials List as supplementary cementitious materials
("SCMs") mandated in California State infrastructure projects to build more
durable and sustainable concrete structures.
Ø Natural pozzolan has a key role in cement decarbonisation strategies
towards net-zero CO(2) emissions and is expected to benefit from recent
California State legislation and Implementation Priorities under President
Biden's $1.2 trillion Infrastructure Bill.
Ø Company prioritising pozzolan over perlite in production strategies as
deposits and markets are larger.
Hazen Pozzolan Project
Ø Industry interest extended to Hazen Pozzolan Project. Due diligence field
visits carried out by interested parties and further sample testing underway.
Ø Permit obtained to extract 500ton sample for commercial trials.
Pioche Sepiolite Project, Nevada
Ø Positive test-work results reported by European industrial minerals company
from testing of high grade sepiolite samples in Europe.
Ø Discussions being held with interested parties facilitated by sepiolite
specialist.
Myrtle Gold Silver project, Nevada
Ø High grade gold and silver results from sampling at Myrtle Gold-Silver
project from potential intrusion related gold system.
Baker's Gold Project, Western Australia
Ø Mining lease application submitted to cover high-grade gold mineralisation
intersected in 2021 drill programme.
Financial Results Summary
Group loss for the six-months ended 31 March 2022 of £153,323 (31 March 2021:
£185,955) comprising:
· Revenue income from lease of £11,422.
· Interest income of £11; less Administration costs of £160,623.
· Expensed pre-licence exploration costs totalling £4,133.
Project expenditure of £37,145 was capitalised.
Funding during the period
No equity or other funds were raised during the current reporting period
except for a small amount raised through the exercise of warrants (£675).
Shares to the value of £16,685 were issued in January 2022 in satisfaction of
a portion of outstanding directors' fees.
At 31 March 2022, the Company held £183,923 in cash and cash equivalents and
liquid listed investments having a value of £49,553.
The Company relies upon periodic capital fundraisings until such time as
cashflow can be derived either from the sale of assets or future operations.
Further information:
Sunrise Resources plc Tel: +44 (0)1625 838 884
Patrick Cheetham, Executive Chairman
Tel: +44 (0)207 628 3396
Beaumont Cornish Limited
Nominated Adviser
James Biddle/Roland Cornish
Tel: +44 (0)207 469 0930
Peterhouse Capital Limited
Broker
Lucy Williams/Duncan Vasey
CAUTIONARY NOTICE
The news release may contain certain statements and expressions of belief,
expectation or opinion which are forward looking statements, and which relate,
inter alia, to the Company's proposed strategy, plans and objectives or to the
expectations or intentions of the Company's directors. Such forward-looking
statements involve known and unknown risks, uncertainties and other important
factors beyond the control of the Company that could cause the actual
performance or achievements of the Company to be materially different from
such forward-looking statements. Accordingly, you should not rely on any
forward-looking statements and save as required by the AIM Rules for Companies
or by law, the Company does not accept any obligation to disseminate any
updates or revisions to such forward-looking statements.
MARKET ABUSE REGULATION (MAR) DISCLOSURE
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 which forms part of UK domestic law by virtue of the
European Union (Withdrawal) Act 2018 ('MAR'). Upon the publication of this
announcement via Regulatory Information Service ('RIS'), this inside
information is now considered to be in the public domain.
Chairman's Statement
I am pleased to present the Company's unaudited financial results for the
six-months' period ended 31 March 2022.
In this period, management has concentrated on advancing our CS
Pozzolan-Perlite Project in Nevada in line with the strategy last outlined in
our 2021 Annual Report. This strategy allows for a number of production
scenarios for both natural pozzolan and perlite. The production of natural
pozzolan is the larger
business opportunity for the Company as our deposits are larger, the markets
in cement and concrete are potentially large and, not least, because perlite
can also be used as a natural pozzolan. Consequently, our efforts to find a
partner to develop the CS Project have focused on the cement and concrete
industries.
During the period, therefore, we have continued negotiations with potential
industry partners and with one cement and ready-mix company ("CRMC") in
particular following a successful joint bulk sampling, test milling and
concrete pouring programme in 2021. However, further negotiations with this
CRMC were recently terminated having become protracted without reaching a
satisfactory conclusion in significant part due to organisational changes
within the CRMC.
Since then, we have been able to build on the successful 2021 commercial
trials and we are advancing discussions with a number of other existing and
new interested parties. Indeed, we are seeing an upsurge of interest in
natural pozzolan, not just from the traditional cement and concrete companies,
but also from the building materials companies that supply to those companies,
as well as new generation clean-tech cement companies developing new types of
carbon-neutral cements and concretes using natural pozzolans in their
formulations.
Cement production is responsible for 8% of global man-made CO(2) emissions and
much has already been said about the huge environmental challenges faced by
the cement and concrete industries which are tasked by legislation and
industry targets to achieve net-zero CO(2) emissions by 2050. Several
strategies are being employed to achieve these targets including the use of
supplementary cementitious materials ("SCMs") such as natural pozzolan in
blended cements.
The manufacture of pozzolan blended cements allows cement companies to reduce
the embodied carbon in their products. It also increases their cement
production per ton of cement clinker capacity at a time when they are already
operating at full capacity and cement process are soaring.
The use of SCMs has crossover to other decarbonisation strategies, as SCMs
alone have the additional benefit that they increase the long-term durability
and sustainability of concrete by mitigating concrete cancer. It also seems
likely that priority will be given to greener and more sustainable building
materials in contracts awarded under the Implementation Policies of Biden's
$1.2 trillion Infrastructure Bill.
We are targeting the California markets with our CS natural pozzolan where a
significant consumer of concrete in California is the State Government
Department of Transport ("Caltrans"). Caltrans mandates the use of SCMs from
its Authorised List for State funded infrastructure projects to improve the
durability and sustainability of its structures. We have applied to Caltrans
for conditional approval of CS Pozzolan onto this list under a new procedure
for new sources of supply. Acceptance onto this list is also important as it
is an endorsement of quality for independent concrete specifiers.
Our strategy for our perlite deposits is to align the production with natural
pozzolan as the production of coarse horticultural grades of perlite produces
perlite fines which can be sold as natural pozzolan. Our strategy also
provides for a stand-alone perlite plant in due course where both coarse and
fine grades of perlite are directed to perlite specific applications. To that
end we have started work to find markets for the finer grades of perlite in
its traditional industrial applications where its property to expand on
heating is required.
In 2021, we acquired a second natural pozzolan project, at Hazen in northern
Nevada as we seek to expand our interests into other regional centres of
cement and concrete demand, in this case northern Nevada and northern
California. Although at an early stage, and the extent of the deposit is yet
to be defined, this project is also attracting industry interest and due
diligence field visits have recently been conducted to both Hazen and the CS
Projects. A permit has been obtained from the US Bureau of Land Management for
a 500 ton bulk sample to be extracted at Hazen for commercial scale testing.
Our activities on other projects in the reporting period has been limited as
we have sought to preserve existing cash resources from our last placing in
August 2020. We have, however, carried out a small mapping and sampling
programme on our Myrtle Project in Nevada where high-grade gold and silver
results have recently been announced in a potential intrusion related gold
system and further exploration is justified.
At our Pioche Sepiolite Project in Nevada, an extended programme of industrial
test-work being conducted by a European industrial minerals producer has now
concluded and is reported to have produced positive results from high grade
samples collected during a joint field visit in December 2021. Discussions are
being held with interested parties facilitated by a sepiolite industry
specialist working on a success-based fee.
In Western Australia we have also applied for a mining lease to cover the
high-grade gold mineralisation intersected in drilling last year at our
Baker's gold project. If granted this will extend our tenure over this project
beyond the expiry of our underlying prospecting licences and we have submitted
a programme of work to the Department of Mines to allow for follow up
drilling.
I think there is much to look forward to in the remainder of the financial
year. We hold one of the few fully permitted and undeveloped natural
pozzolan deposits in the western US, momentum is building for natural
pozzolan, and we believe our CS and Hazen Pozzolan Projects are well placed to
help industry in pursuit of its net-zero goals. In addition, we have a largely
overlooked but valuable portfolio of precious and base metal projects that can
provide additional growth opportunities in future.
Patrick Cheetham
Executive Chairman
24 May 2022
Consolidated Income Statement
for the six months to 31 March 2022
Six months Six months Twelve months to
to 31 March to 31 March 30 September
2022 2021 2021
Unaudited Unaudited Audited
£ £ £
Revenue 11,422 - -
Pre-licence exploration costs (4,133) (12,985) (17,320)
Impairment of deferred exploration assets - (7,428) (30,021)
Administration costs (160,623) (165,581) (318,630)
Operating loss (153,334) (185,994) (365,971)
(Loss)/gain on disposal of intangible asset - - 30,658
Interest receivable 11 39 61
Loss before income tax (153,323) (185,955) (335,252)
Income tax - - -
Loss for the period attributable to equity
holders of the parent (153,323) (185,955) (335,252)
Loss per share - basic and fully diluted (pence) (Note 2) (0.004) (0.005) (0.009)
Consolidated Statement of Comprehensive Income
for the six months to 31 March 2022
Six months Six months Twelve months
to 31 March to 31 March to 30 September
2022 2021 2021
Unaudited Unaudited Audited
£ £ £
Loss for the period (153,323) (185,955) (335,252)
Other comprehensive income:
Items that could be reclassified subsequently to the income statement:
Foreign exchange translation differences on foreign currency net investments in subsidiaries
61,117 (127,182) (86,770)
61,117 (127,182) (86,770)
Items that will not be reclassified to the Income Statement:
Changes in the fair value of equity investments
(14,282) 758 (9,651)
(14,282) 758 (9,651)
Total comprehensive loss for the period attributable to equity holders of the parent
(106,488) (312,379) (431,673)
Consolidated Statement of Financial Position
as at 31 March 2022
As at As at As at
31 March 31 March 30 September
2022 2021 2021
Unaudited Unaudited Audited
£ £ £
Non-current assets
Intangible assets 2,228,941 1,997,911 2,133,137
Right of use assets 11,603 15,178 13,423
Other investments 49,553 19,614 63,503
2,290,097 2,032,703 2,210,063
Current assets
Receivables 147,358 130,521 130,805
Cash and cash equivalents 183,923 637,834 371,740
331,281 768,355 502,545
Current liabilities
Trade and other payables (103,178) (93,723) (100,861)
Lease liability (1,171) (2,248) (2,300)
Net current assets 226,932 672,384 399,384
Non-Current liabilities
Lease liability (3,632) (4,553) (4,715)
Reclamation Liability (24,458) (25,792) (26,665)
(28,090) (30,345) (31,380)
Net assets 2,488,939 2,674,742 2,578,067
Equity
Called up share capital 3,711,086 3,695,860 3,701,805
Share premium account 5,683,695 5,666,997 5,675,616
Share warrant reserve 39,015 40,774 40,164
Fair value reserve 18,820 43,511 33,102
Foreign currency reserve 23,786 (77,743) (37,331)
Accumulated losses (6,987,463) (6,694,657) (6,835,289)
Equity attributable to owners of the parent 2,488,939 2,674,742 2,578,067
Consolidated Statement of Changes in Equity
Share Share Fair Foreign
Share premium warrant reserve value currency Accumulated
capital account reserve reserve losses Total
£ £ £ £ £ £ £
At 30 September 2020 3,677,997 5,655,781 33,893 42,753 49,439 (6,513,429) 2,946,434
Loss for the period - - - - - (185,955) (185,955)
Change in fair value - - - 758 - - 758
Exchange differences - - - - (127,182) - (127,182)
Total comprehensive
loss for the period - - - 758 (127,182) (185,955) (312,379)
Share issue 17,863 11,216 - - - - 29,079
Share based payments expense - - 11,608 - - - 11,608
Transfer of expired warrants - - (4,727) - - 4,727 -
At 31 March 2021 3,695,860 5,666,997 40,774 43,511 (77,743) (6,694,657) 2,674,742
Loss for the period - - - - - (149,298) (149,298)
Change in fair value - - - (10,409) - - (10,409)
Exchange differences - - - - 40,412 - 40,412
Total comprehensive -
loss for the period - - - (10,409) 40,412 (149,298) (119,295)
Share issue 5,945 8,619 - - - - 14,564
Share based payments expense - - 8,056 - - - 8,056
Transfer of expired warrants - - (8,666) - - 8,666 -
At 30 September 2021 3,701,805 5,675,616 40,164 33,102 (37,331) (6,835,289) 2,578,067
Loss for the period - - - - - (153,323) (153,323)
Change in fair value - - - (14,282) - - (14,282)
Exchange differences - - - - 61,117 - 61,117
Total comprehensive
loss for the period - - - (14,282) 61,117 (153,323) (106,488)
Share issue 9,281 8,079 - - - - 17,360
Share based payments expense - - - - - - -
Transfer of expired warrants - - (1,149) - - 1,149 -
At 31 March 2022 3,711,086 5,683,695 39,015 18,820 23,786 (6,987,463) 2,488,939
Consolidated Statement of Cash Flows
for the six months to 31 March 2022
Six months Six months Twelve months
to 31 March to 31 March to 30 September
2022 2021 2021
Unaudited Unaudited Audited
£ £ £
Operating activity
Operating Loss (153,323) (185,994) (335,313)
Depreciation/interest charge 2,285 2,250 4,744
Share based payment charge - 11,608 19,663
Shares issued in settlement of outstanding salaries 16,685 16,254 30,818
Shares issued via exercise of warrants 675 - 12,825
Impairment of deferred exploration asset - 7,428 30,021
Disposal of exploration assets - - 40,480
Non cash addition of equity investments - - (45,675)
Reclamation provision (2,950) - (26,665)
(Increase)/decrease in receivables (16,553) (78,542) (78,825)
Increase/(decrease) in trade and other payables 2,317 3,046 10,184
Net cash outflow from operating activity (150,864) (223,950) (337,743)
Investing activity
Interest received 11 39 60
Receipts from disposal of exploration assets - - 20,000
Water lease payments (2,437) (2,325) (2,378)
Project development expenditures (37,145) (247,797) (391,061)
Net cash outflow from investing activity (39,571) (250,083) (373,379)
Financing activity
Issue of share capital (net of expenses) 675 12,825 -
Net cash inflow from financing activity 675 12,825 -
Net (decrease)/increase in cash and cash equivalents (189,760) (461,208) (711,122)
Cash and cash equivalents at start of period 371,740 1,089,417 1,089,417
Exchange differences 1,943 9,625 (6,555)
Cash and cash equivalents at end of period 183,923 637,834 371,740
Notes to the Interim Statement
1. Basis of preparation
The consolidated interim financial information has been prepared in accordance
with the accounting policies that are expected to be adopted in the Group's
full financial statements for the year ending 30 September 2022 which are not
expected to be significantly different to those set out in Note 1 of the
Group's audited financial statements for the year ended 30 September 2021.
These are based on the recognition and measurement requirements of applicable
law and International Accounting Standards in conformity with the Companies
Act 2006. The financial information has not been prepared (and is not required
to be prepared) in accordance with IAS 34. The accounting policies have been
applied consistently throughout the Group for the purposes of preparation of
this financial information.
The financial information in this statement relating to the six months ended
31 March 2022 and the six months ended 31 March 2021 has neither been audited
nor reviewed by the Independent Auditor pursuant to guidance issued by the
Auditing Practices Board. The financial information presented for the year
ended 30 September 2021 does not constitute the full statutory accounts for
that period. The Annual Report and Financial Statements for the year ended 30
September 2021 have been filed with the Registrar of Companies. The
Independent Auditor's Report on the Annual Report and Financial Statements for
the year ended 30 September 2021 was unqualified, although it did draw
attention to matters by way of emphasis in relation to going concern.
The directors prepare annual budgets and cash flow
projections for a 15-month period. These projections include the proceeds of
future fundraising necessary within the period to meet the Company's and the
Group's planned discretionary project expenditures and to maintain the Company
and the Group as a going concern. Although the Company has been successful in
raising finance in the past, there is no assurance that it will obtain
adequate finance in the future. These factors represent a material uncertainty
related to events or conditions which may cast significant doubt on the
entity's ability to continue as a going concern and, therefore, that it may be
unable to realise its assets and discharge its liabilities in the normal
course of business. However, the directors have a reasonable expectation that
they will secure additional funding when required to continue meeting
corporate overheads and exploration costs for the foreseeable future and
therefore believe that the going concern basis is appropriate for the
preparation of the financial statements.
2. Loss per share
Loss per share has been calculated on the attributable loss
for the period and the weighted average number of shares in issue during the
period.
Six months Six months Twelve months
to 31 March to 31 March to 30 September
2022 2021 2021
Unaudited Unaudited Audited
Loss for the period (£) (153,323) (185,955) (335,252)
Weighted average shares in issue (No.) 3,705,826,898 3,383,046,491 3,693,084,489
Basic and diluted loss per share (pence) (0.004) (0.005) (0.009)
The loss attributable to ordinary shareholders and weighted average number of
shares for the purpose of calculating the diluted earnings per share are
identical to those used for the basic earnings per share. This is because
the exercise of share warrants would have the effect of reducing the loss per
share and is therefore not dilutive under the terms of IAS33.
3. Share capital
During the six months to 31 March 2022 the following share issues took place:
An issue of 8,781,779 Ordinary Shares of 0.1p at 0.19p per share to three
directors, for a total consideration of £16,685, in satisfaction of a portion
of outstanding directors' fees (10 January 2022).
An issue of 500,000 Ordinary Shares of 0.1p at 0.135p per share for a total
consideration of £675, following an exercise of warrants (31 January 2022).
The total number of shares in issue on 31 March 2022 was 3,711,086,466 (30
September 2021: 3,701,804,687).
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