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XTRACT RESOURCES PLC Interim / Quarterly Report 2022
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Interim / Quarterly Report
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National Storage Mechanism | Additional information 
RNS Number : 3555B
Xtract Resources plc
30 September 2022
For immediate release
30 September 2022
Xtract Resources Plc
("Xtract" or "the Company")
Unaudited Interim Results for the six months ended 30 June 2022
Xtract Resources Plc (AIM: XTR), the gold producer, exploration and development company with projects in Australia, Mozambique and Zambia, announces its unaudited interim results for the six months ended 30 June 2022 ("Period").
Highlights
Financial
· Revenue from gold sales of £0.97m (H1 2021: £0.16m)
· Net loss of £0.03m (H1 2021: £2.20m)
· Administration & operating expenses £1.33m (H1 2021: £2.19m (including a share-based payment charge of £1.47m))
· Cash of £1.24m (FY 2021: £8.08m)
· Net assets of £21.25m (FY 2021: £20.66m)
· Total alluvial and hard rock mining contractor gold production of 121.8kg (equivalent to 3,916 ounces) (H1 2021: 22.1kg (equivalent to 711 ounces))
· Total of 23.9kg (equivalent to 769 ounces) attributable to the Company's Mozambican operating subsidiary, Explorator (H1 2021: 6.2kg (equivalent to 199 ounces))
Operational
· The completed Phase Two drilling programme at the Bushranger porphyry copper-gold project succeeded in adding significant extensions to the Racecourse prospect.
· Testing of a geophysical anomaly led to the discovery of a totally new porphyry intrusion at Ascot prospect, approximately 1.5km to the south of the Racecourse Mineral Resource.
· The Ascot discovery hole BRDD-21-035 returned substantial intervals of copper and gold mineralisation over 164m grading 0.35% CuEq from 552m, including 64m at 0.58% CuEq from 552m. Follow up drilling further defined and extended the Ascot discovery.
· The Company will now utilise all the Phase Two drilling data to update the Racecourse prospect mineral resource and define a maiden mineral resource for the Ascot prospect. The open pit mining study for the Racecourse prospect will also be updated
· At the Manica gold project in Mozambique all construction and installation work at the Fair Bride mine was completed and the processing plant has entered into commissioning.
· Clearing and pre stripping were carried out and ore has been stockpiled and hauled to the plant site, with the introduction of low-grade ore to commission all parts of the processing circuit.
Operational Overview
During the period the Company continued with its ongoing assessment of the Bushranger copper-gold project located within the Lachlan Fold Belt district of New South Wales, the foremost porphyry copper-gold belt in Australia.
A Phase Two drilling programme was commenced on the Bushranger Project in July 2021, with the initial goal of extending, and better defining, the Racecourse Mineral Resource, which is currently defined as 71Mt @ 0.44% Cu and 0.064g/t Au, at a 0.3% Cu cut-off. The Phase Two drilling programme was expanded in scope throughout the reporting period to include the testing of Induced Polarisation (IP) MIMDAS ground geophysical anomalies, outside of the current limits of the Racecourse Mineral Resource. Testing of a MIMDAS geophysical anomaly led to the discovery of the Ascot prospect, approximately 1.5km to the south of the Racecourse Mineral Resource, with drill hole BRDD-21-035 returning substantial intervals of copper and gold mineralisation, with a best intercept of 164m at 0.35% CuEq from 552m, which includes 64m at 0.58% CuEq from 552m. Follow up drilling during the Phase Two drilling programme further defined and extended the Ascot discovery.
Immediately following the reporting period, the Bushranger Project Phase two drilling programme was concluded. A total of 49 diamond drill holes were completed at the Racecourse and Ascot Prospects for 33,354.80m of drilling, during the period 15 July 2021 until 9 July 2022. The Phase Two drilling programme was highly successful with significant extensions to the Racecourse prospect porphyry copper-gold mineralisation confirmed and the discovery of a totally new porphyry copper-gold intrusion at the Ascot Prospect.
The Company will now utilise all the Phase Two drilling data to update the Racecourse prospect mineral resource and define a maiden mineral resource for the Ascot prospect. The open pit mining study for the Racecourse prospect, which was completed in April 2021, will also be updated using the new Racecourse mineral resource when it is completed.
The results from the Company's alluvial and hard rock operations were satisfactory, despite a challenging few months of difficult operating conditions with an aggressive rain and cyclone season.
All construction and installation work relating to the Fair Bride hard rock project in Mozambique was completed. At the end June 2022, production at Fair Bride started with the introduction of low-grade ore to commission all parts of the processing circuit.
Summary of Company Projects
Australia
Bushranger Project
During the reporting period the Phase Two drilling programme on the Bushranger Project in central New South Wales continued at a rapid pace. The objectives of the Phase 2 drilling programme at Racecourse and Ascot Prospects were as follows:
1. Extend to the northwest and southeast the currently defined Racecourse prospect Inferred Mineral Resource of 71Mt @ 0.44% Cu and 0.064g/t Au, at a 0.3% Cu cut-off
2. Test a series of IP resistivity low anomalies to determine if the resistivity lows relate to areas of increased intensity of copper mineralisation at the top of the porphyry system in the "crown" position
3. Test the continuity of copper mineralisation on the eastern side of the Central Porphyry Intrusion, with the objective of defining a new Inferred Mineral Resource to complement the existing Racecourse Inferred Mineral Resource which occurs predominantly on the western side of the Central Porphyry Intrusion
4. Determine the extent and grade of the newly discovered copper mineralisation at the Ascot Prospect
The Phase Two drilling programme at the Racecourse Prospect commenced on 15 July 2021 and was concluded, following the conclusion of the reporting period, on 9 July 2022. The overall Phase Two drilling programme comprised 49 diamond drill holes (BRDD-21-007 to BRDD-22-055), completed at the Racecourse and Ascot Prospect for 33,354.80m of drilling.
Phase Two drilling into the Racecourse prosect continued to intersect very broad intervals of moderate strength copper-gold mineralisation grading in the range 0.15 - 0.61% CuEq. On 9 December 2021, the company announced the discovery of a new porphyry system approximately 1.5km to the south-east of the Racecourse Inferred Mineral Resource. Drill holes BRDD-21-033 and BRDD-21-035 intersected porphyry style alteration and trace to moderate strength copper mineralisation. The new prospect was called "Ascot" and follow up drilling was completed with the objective of defining the extents of the Ascot discovery. Drill hole BRDD-21-035 returned substantial intervals of copper and gold mineralisation with a best intercept of 164m at 0.35% CuEq from 552m, including 64m at 0.58% CuEq from 552m. The initial assay results from the Ascot prospect indicated the potential for significant gold enhancement associated with the copper mineralisation and this result encouraged follow up drilling at Ascot. Holes BRDD-21-025, BRDD-21-031, BRDD-21-033, BRDD-21-038, BRDD-22-039 and BRDD-22-044 were drilled as follow up holes into the Ascot prospect. The best result of the follow up drilling at Ascot was returned in drill hole BRDD-21-038 which returned 104m @ 0.24% CuEq from 79m and drill hole BRDD-22-039 which returned 32m @ 0.92g/t Au from 510m. The drill results from the Ascot prospect indicate that this porphyry system does contain more gold zones than the Racecourse deposit for the north. The results at Ascot display similar characteristics to the discovery of the deeper, gold-rich Ridgeway deposit, which is a part of the Cadia-Ridgeway group of porphyry deposits discovered by Newcrest Mining. Ridgeway is a near vertical intrusive complex with an indicated resource of 110Mt at 0.57 g/t Au and 0.3% Cu and is currently under development by Newcrest as an underground mining operation.
Drilling and assay data from the Ascot prospect will be used to complete a maiden mineral resource estimation for the Ascot prospect, which will be finalised prior to the end of 2022.
To assist in the determination as to whether the Ascot and Racecourse prospects, form one continuous mineralised porphyry copper system, an extension MIMDAS geophysical survey was completed from south of the Ascot Prospect through to the existing MIMDAS survey (from May 2021) covering the Racecourse prospect. The results of this MIMDAS survey guided the follow up drilling completed at the Ascot prospect and drilling between the Racecourse and Ascot prospects. Drilling between the two prospects continued to intersect copper-gold mineralisation and it appears the Racecourse and Ascot prospects are centres of more intense copper-gold mineralisation within one larger system consisting of multiple porphyry intrusions, as commonly occurs within the Lachlan Fold Belt.
Drilling at the Racecourse prospect was successful in extending the known copper-gold mineralisation to the north-west, the south-east and at depth. During the reporting period seven drill holes (BRDD-22-041, BRDD-22-042, BRDD-22-043, BRDD-22-047, BRDD-22-048, BRDD-22-053, BRDD-22-054) for 4,968.9m, were completed at the Racecourse prospect. Assay data was also received for drill holes completed at the Racecourse prospect during the previous reporting period. The drilling and assay data gave better definition of the "crown position", at the top of the Racecourse porphyry intrusion, which appears to contain the highest grades of copper and gold at Racecourse. Drill Hole BRDD-21-018 returned an intersection of 170m of 0.22% CuEq from 520m depth, which includes a higher-grade interval of 12m at 0.41% CuEq from 648m downhole in the "crown position". The results of drill hole BRDD-21-019 include a wide 202m interval of copper mineralisation grading at 0.27% CuEq from 276m depth, which includes a higher-grade intercept of 18m at 0.67% CuEq from 312m depth, also in the "crown position" atop the Racecourse porphyry intrusion. Hole BRDD-21-021 repeated the success of hole BRD-21-008, with an overall intercept of 280m at 0.36% CuEq from 205m, including a higher-grade interval of 92m at 0.53% CuEq from 205m downhole depth.
The Phase Two drilling at the Racecourse prospect was successful in extending the known copper-gold mineralisation to the north-west, the south-east and at significant depth. Furthermore, the Phase Two drilling data has substantially better defined the higher grade "crown position" at Racecourse and provided a better understanding of the distribution of gold within the Racecourse deposit. The company will now utilise all the Phase Two drilling data to update the Racecourse prospect mineral resource and subsequently will update the open pit mining study for the Racecourse prospect which was previously completed in April 2021. The updated mining study is planned for completion before the end of 2022.
Two drill holes, for 804.4m, were completed at the Footrot Prospect, approximately 5 kilometres to the south of the Racecourse, to test a combined soil geochemical and MIMDAS anomaly. The results from these two holes will be available during the next reporting period.
Mozambique
Mozambique is recognised as a stable mining jurisdiction within a favourable political and legal regime. The Manica Gold Project is situated in the Odzi-Mutare-Manica Greenstone belt, with an estimated 2 million ounces of gold previously mined in the area.
The Fair Bride Project is an open pit and underground project with a combined SAMREC compliant resource of 1.262 million ounces (including 782k ounces Measured and Indicated). In 2019, the Company was given the opportunity to move the Fair Bride Project forward, from development stage to production through a collaboration agreement with Mutapa Mining and Processing LDA, thereby mitigating any execution risk to Xtract.
During the reporting period, all construction and installation work was at Fair Bride was completed, including 6 CIL tanks, thickener, elution circuit, gold room, reagent storage and laboratory. Rectification works were completed on the original crushing and milling circuits and the plant has entered into commissioning.
All clearing and pre stripping were completed and ore has been stockpiled and hauled to the plant site, along the completed new haulage road. At the end of June 2022, Fair Bride production started with the introduction of low-grade ore to commission all parts of the processing circuit.
Zambia
Eureka Project
Copper mineralisation at Eureka occurs within sedimentary rocks along a north-west oriented structural trend. A shallow historic open pit mine was developed by a local operator. Previously reported drilling by Xtract confirmed continuity of the shallow mineralised zone over about 300m of strike, with pockets of exceptionally high copper grades in a partially oxidised supergene zone. A second, possible stratabound mineral style may also represent a target of interest.
No further exploration was undertaken at Eureka during the period pending consideration of options for possible future development.
Financial
During the Period, administration expenses for the Group amounted to £1.33m (H1 2021 - £2.19m). Included within administration expenses is an amount of £Nil (H1 2021- £1.47m) in relation to a share-based payment charge in relation to the grant of 28.4 million options to directors and employees in February 2021. Non-operating income for the period amounted to £0.49m (H1 2021- Nil) and comprised primarily of fees invoiced within the group to third parties.
Enquiries:
| Xtract Resources Plc | Colin Bird, Executive Chairman | +44 (0)20 3416 6471 |
| Beaumont Cornish (Nominated Adviser and Joint Broker) |
Michael Cornish Felicity Geidt Email: [email protected] |
+44 (0)20 7628 3369 |
| Novum Securities Limited (Joint Broker) |
Colin Rowbury/Jon Belliss | +44 (0)207 399 9427 |
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 as it forms part of UK Domestic Law by virtue of the European Union (Withdrawal) Act 2018 ("UK MAR"). The person who arranged for the release of this announcement on behalf of the Company was Joel Silberstein, Director.
Further details are available from the Company's website which details the company's project portfolio as well as a copy of this announcement: www.xtractresources.com
Xtract Resources PLC
Consolidated Income Statement
For the six month period ended 30 June 2022
| Six months ended | Year ended | |||
| Notes | 30 June 2022 Unaudited £'000 |
30 June 2021 Unaudited £'000 |
31 December 2021 Audited £'000 |
|
| Continuing operations | ||||
| Revenue from Gold sales | 972 | 153 | 692 | |
| Other operating income | 11 | - | 189 | |
| Other non-operating income | 494 | - | - | |
| Administrative and operating expenses | (1,332) | (2,191) | (3,311) | |
| Direct Operating | (715) | (228) | (569) | |
| Other Operating | (82) | - | (85) | |
| Administration | (535) | (1,963) | (2,657) | |
| Project expenses | (214) | (94) | (432) | |
| Operating loss | (69) | (2,132) | (2,862) | |
| Other gains and losses | - | - | - | |
| Finance (cost)/income | 93 | (73) | (194) | |
| Profit/(loss) before tax | 24 | (2,205) | (3,056) | |
| Taxation | (52) | - | (76) | |
| Profit/(loss) for the period from continuing operations | 3 | (28) | (2,205) | (3,132) |
| Profit/(loss) for the period | 6 | (28) | (2,205) | (3,132) |
| Attributable to: | ||||
| Equity holders of the parent | (28) | (2,205) | (3,132) | |
| Net (loss)/profit per share | ||||
| Basic (pence) | 6 | (0.00) | (0.00) | (0.40) |
| Diluted (pence) | 6 | (0.00) | (0.40) | (0.40) |
Xtract Resources PLC
Consolidated statement of comprehensive income
For the six month period ended 30 June 2022
| Six months ended | Year ended | |||||||
| 30 June 2022 Unaudited £'000 |
30 June 2021 Unaudited £'000 |
31 December 2021 Audited £'000 |
||||||
| Profit /(Loss) for the period | (28) | (2,205) | (3,132) | |||||
| Other comprehensive income | ||||||||
| Items that will not be reclassified subsequently to profit and loss Exchange differences on translation of foreign operations |
550 | 112 | 242 | |||||
| Other comprehensive income/(loss) for the period | 550 | 112 | 242 | |||||
| Total comprehensive (loss)/income for the period | 522 | (2,093) | (2,890) | |||||
| Attributable to: | ||||||||
| Equity holders of the parent | 522 | (2,093) | (2,890) | |||||
| 522 | (2,093) | (2,890) | ||||||
Xtract Resources PLC
Consolidated statement of changes in equity
As at 30 June 2022
| Share Capital £'000 |
Share premium account £'000 | Warrant reserve £'000 |
Share-based payments reserve £'000 | Available-for-sale investment reserve £'000 | Foreign currency translation reserve £'000 | Accumulated losses £'000 |
Total Equity £'000 |
|||||||||
| Balance at 31 December 2020 | 4,928 | 61,951 | 76 | 436 | - | 66 | (55,530) | 11,927 | ||||||||
| Loss for the period | - | - | - | - | - | - | (2,205) | (2,205) | ||||||||
| Foreign currency translation difference | - | - | - | - | - | 112 | - | 112 | ||||||||
| Issue of Shares | 45 | 10,104 | - | - | - | - | - | 10,149 | ||||||||
| Share issue costs | - | - | - | - | - | - | - | - | ||||||||
| Option exercised | - | 19 | - | (19) | - | - | - | - | ||||||||
| Issue of share options | - | - | - | 1,473 | - | - | - | 1,473 | ||||||||
| Issue of warrants | - | (456) | 456 | - | - | - | - | - | ||||||||
| Exercise of warrants | - | 10 | (10) | - | - | - | - | - | ||||||||
| Balance at 30 June 2021 | 4,973 | 71,628 | 522 | 1,890 | - | 178 | (57,735) | 21,456 | ||||||||
| Loss for the period | - | - | - | - | - | - | (3,132) | (3,132) | ||||||||
| Foreign currency translation differences | - | - | - | - | - | 242 | - | 242 | ||||||||
| Issue of Shares | 45 | 10,769 | - | - | - | - | - | 10,814 | ||||||||
| Share issue costs | - | (664) | - | - | - | - | - | (664) | ||||||||
| Issue of share options | - | - | - | 1,473 | - | - | - | 1,473 | ||||||||
| Expiry of share options | - | - | - | (16) | - | - | 16 | - | ||||||||
| Exercise of share options | - | 19 | - | (19) | - | - | - | - | ||||||||
| Issue of Warrants | - | (456) | 456 | - | - | - | - | - | ||||||||
| Exercise of warrants | - | 65 | (65) | - | - | - | - | - | ||||||||
| Balance at 31 December 2021 | 4,973 | 71,684 | 467 | 1,874 | - | 308 | (58,646) | 20,660 | ||||||||
| Loss for the period | - | - | - | - | - | - | (28) | (28) | ||||||||
| Foreign currency translation difference | - | - | - | - | - | 550 | - | 550 | ||||||||
| Issue of Shares | 1 | 67 | - | - | - | - | - | 68 | ||||||||
| Exercise of warrants | - | 35 | (35) | - | - | - | - | - | ||||||||
| Balance at 30 June 2022 | 4,974 | 71,786 | 432 | 1,874 | - | 858 | (58,674) | 21,250 | ||||||||
Xtract Resources PLC
Consolidated Statement of Financial Position
As at 30 June 2022
| Notes | 30 June 2022 Unaudited £'000 |
30 June 2021 Unaudited £'000 |
31 December 2021 Audited £'000 |
||
| Non-current assets | |||||
| Intangible Assets | 7 | 19,760 | 13,622 | 16,752 | |
| Property, plant & equipment | 8 | 45 | 27 | 25 | |
| Other financial assets | - | - | - | ||
| 19,805 | 13,649 | 16,777 | |||
| Current assets | |||||
| Trade and other receivables | 1,636 | 185 | 664 | ||
| Inventories | 14 | 9 | 177 | ||
| Cash and cash equivalents | 1,239 | 8,084 | 5,389 | ||
| 2,889 | 8,278 | 6,230 | |||
| Total assets | 22,694 | 21,927 | 23,007 | ||
| Current liabilities | |||||
| Trade and other payables | 1,350 | 453 | 2,226 | ||
| Current tax payable | 94 | 18 | 121 | ||
| Other payables | - | - | - | ||
| 1,444 | 471 | 2,347 | |||
| Non-current liabilities | |||||
| Other payables | - | - | - | ||
| - | - | - | |||
| Total liabilities | 1,444 | 471 | 2,347 | ||
| Net current assets/(liabilities) | 1,445 | 7,807 | 3,883 | ||
| Net assets | 21,250 | 21,456 | 20,660 | ||
| Equity | |||||
| Share capital | 9 | 4,974 | 4,973 | 4,973 | |
| Share premium account | 71,786 | 71,628 | 71,684 | ||
| Warrant reserve | 432 | 522 | 467 | ||
| Share-based payments reserve | 1,874 | 1,890 | 1,874 | ||
| Fair Value reserve | - | - | - | ||
| Foreign currency translation reserve | 858 | 178 | 308 | ||
| Accumulated losses | (58,674) | (57,735) | (58,646) | ||
| Equity attributable to equity holders of the parent | 21,250 | 21,456 | 20,660 | ||
| Total equity | 21,250 | 21,456 | 20,660 | ||
Xtract Resources PLC
Consolidated Statement of Cash Flows
For the six month period ended 30 June 2022
| Notes | 6 months period ended 30 June 2022 Unaudited £'000 |
6 months period ended 30 June 2021 Unaudited £'000 |
Year ended 31 December 2021 Audited £'000 |
|
| Net cash used in operating activities | 11 | (1,732) | (1,455) | (767) |
| Investing activities | ||||
| Acquisition of subsidiary undertaking | - | - | - | |
| Acquisition of intangible fixed assets | (2,555) | (1,524) | (5,009) | |
| Acquisition of tangible fixed assets | (26) | (5) | (13) | |
| Net cash from/(used in) investing activities | (2,581) | (1,529) | (5,022) | |
| Financing activities | ||||
| Proceeds on issue of shares | 68 | 10,149 | 10,149 | |
| Net cash from financing activities | 68 | 10,149 | 10,149 | |
| Net increase/(decrease) in cash and cash equivalents | (4,245) | 7,165 | 4,360 | |
| Cash and cash equivalents at beginning of period | 5,389 | 919 | 919 | |
| Effect of foreign exchange rate changes | 95 | - | 110 | |
| Cash and cash equivalents at end of period | 1,239 | 8,084 | 5,389 |
Xtract Resources PLC
Notes to the interim financial information
For the six month period ended 30 June 2022
1. General information
Xtract Resources PLC ("Xtract") is a company incorporated in England and Wales under the Companies Act 2006. The Company's registered address is 1st Floor, 7/8 Kendrick Mews, London, SW7 3HG. The Company's ordinary shares are traded on the AIM market of the London Stock Exchange. The Company invests and engages in the management, financing and development of early-stage resource assets.
2. Accounting policies
Basis of preparation
Xtract prepares its annual financial statements in accordance with UK-adopted international accounting standards and in conformity with the Companies Act 2006.
The consolidated interim financial information for the period ended 30 June 2022 presented herein has been neither audited nor reviewed. The information for the period ended 31 December 2021 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006 but has been derived from those accounts. The auditor's report on those accounts was not qualified and did not contain statements under section 498 (2) or (3) of the Companies Act 2006. As permitted, the Group has chosen not to adopt IAS 34 'Interim Financial Reporting'.
The interim financial information is presented in pound sterling and all values are rounded to the nearest thousand pounds (£'000) unless otherwise stated.
The interim consolidated financial information of the Group for the six months ended 30 June 2022 were authorised for issue by the Directors on 29 September 2022.
Going concern
As at 30 June 2022 the Group held cash balances of £1,239K. A small operating loss has been reported for the Group, however, as at the date of the release of the consolidated financial information, the Group's assets have been and continue to generate revenues. The Group has continued with its exploration activities in Australia and recently completed the Phase Two drilling programme at the Racecourse Prospect.
The Directors have assessed the working capital requirements for the forthcoming twelve months and have undertaken the following assessment.
Management have reviewed the cash flow projections for the forthcoming twelve months, based on the current operations in Mozambique, Australia as well as the corporate overhead. The alluvial operations continue to generate modest revenues and as with alluvial operations the presence of gold in alluvial deposits is unpredictable and therefore operational results will vary month-to-month. The Group expects production at Fair Bride to increase during the coming months with the Group due to receive 23% share of net profit after tax.
Based on the assumption that Fair Bride operates within its targeted parameters and no new business is consummated, the Directors do not anticipate the need for funds to be raised in the twelve-month period from the date of authorising the consolidated information.
As is common with junior mining companies, the Company in the past has raised finance from shareholders for its activities, in discrete tranches to finance its activities for limited periods only and further funding would be required from time to time to finance those activities.
The Directors therefore continue to adopt the going concern basis of accounting in preparing the consolidated financial information and therefore the consolidated financial information does not include any adjustments relating to the recoverability and classification of assets and liabilities that may be necessary if the going concern basis of preparation of the consolidated financial information is not appropriate.
On this basis the Board believes that it is appropriate to prepare the consolidated financial information on the going concern basis.
Changes in accounting policy
The accounting policies applied are consistent with those adopted and disclosed in the Group Consolidated financial statements for the year ended 31 December 2021, except for the changes arising from the adoption of new accounting pronouncements detailed below.
There are no amendments or interpretations to accounting standards that would have a material impact on the financial statements.
3. Business segments
Segmental information
The divisions on which the Group reports its primary segment information are reported to its Executive Chairman, who is the Chief Operating Decision maker of the Group. The Executive Chairman and the Chief Operating Officer are responsible for allocating resources to the segments and assessing their performance.
Principal activities are as follows:
● Operating alluvial gold & hard rock mining segment - Mozambique
● Mine Development - Mozambique
● Exploration
● Investment and other
| Segment results 6 months ended 30 June 2022 |
Mine Development (Continuing) |
Exploration (Continuing) | Investment And Other (Continuing) |
Alluvial Gold Mining Production (Continuing) |
Total |
| £'000 | £'000 | £'000 | £'000 | £'000 | |
| Segment revenue | |||||
| Sale of gold bars | - | - | - | 972 | 972 |
| Less: Cost of sales | - | - | - | - | - |
| Segment Gross profit | - | - | - | 972 | 972 |
| Other operating income | - | - | - | 11 | 11 |
| Non-operating income | - | - | 494 | - | 494 |
| Administrative and operating expenses | - | (145) | (825) | (362) | (1,332) |
| Project costs | - | - | (214) | - | (214) |
| Segment result | - | (145) | (545) | 621 | (69) |
| Other gain and losses | - | - | - | - | - |
| Finance costs | - | - | 89 | 4 | 93 |
| (Loss)/profit before tax | - | (145) | (456) | 625 | 24 |
| Tax | - | - | - | (52) | (52) |
| (Loss)/profit for the period | - | (145) | (456) | 573 | (28) |
| 6 months ended 30 June 2021 | Mine Development (Continuing) | Exploration (Continuing) | Investment and Other (Continuing) | Alluvial Gold Mining Production (Continuing) | Total |
| £'000 | £'000 | £'000 | £'000 | £'000 | |
| Segment revenue | |||||
| Sale of gold bars | - | - | - | 153 | 153 |
| Less: Cost of sales | - | - | - | - | - |
| Segment Gross profit | - | - | - | 153 | 153 |
| Administrative and operating expenses | - | (39) | (1,877) | (275) | (2,191) |
| Project Costs | - | - | (94) | - | (94) |
| Segment result | - | (39) | (1,971) | (122) | (2,132) |
| Other gain and losses | - | - | - | - | - |
| Finance costs | - | - | (69) | (4) | (73) |
| (Loss)/profit before tax | - | - | (2,040) | (126) | (2,205) |
| Tax | - | - | - | - | - |
| (Loss)/Profit for the period | - | (39) | (2,040) | (126) | (2,205) |
| Mine Development (Continuing) | Exploration (Continuing) | Investment and Other (Continuing) | Alluvial Gold Mining Production (Continuing) | Total | ||
| £'000 | £'000 | £'000 | £'000 | £'000 | ||
| Segment revenue | ||||||
| Sale of gold bars | - | - | - | 692 | 692 | |
| Less: Cost of sales | - | - | - | - | - | |
| Segment Gross profit | - | - | - | 692 | 692 | |
| Other operating income | - | - | - | 189 | 189 | |
| Administrative and operating expenses | (71) | - | (2,671) | (569) | (3,311) | |
| Project Costs | (13) | - | (419) | - | (432) | |
| Segment result | (84) | - | (3,090) | 312 | (2,862) | |
| Other gains and losses | - | - | - | - | - | |
| Finance income / (costs) | (1) | - | (106) | (87) | (194) | |
| (Loss)/Profit before tax | (85) | - | (3,196) | 225 | (3,056) | |
| Tax | - | - | - | (76) | (76) | |
| (Loss)/Profit for the period | (85) | - | (3,196) | 149 | (3,132) | |
Year ended 31 December 2021
| Balance Sheet | 30 June 2022 | 30 June 2021 | 31 December 2021 |
| £'000 | £'000 | £'000 | |
| Total Assets | |||
| Gold production | 880 | 125 | 925 |
| Exploration | 9,728 | 3,467 | 6,552 |
| Mining Development | 10,437 | 10,276 | 10,298 |
| Investment & other | 1,649 | 8,058 | 5,232 |
| Total segment assets | 22,694 | 21,927 | 23,007 |
| Liabilities | |||
| Gold production | (371) | (243) | (659) |
| Exploration | (459) | - | (349) |
| Mining Development | - | (3) | - |
| Investment & other | (614) | (225) | (1,339) |
| Total segment liabilities | (1,444) | (471) | (2,347) |
The accounting policies of the reportable segments are the same as the Group's accounting policies which are described in the Group's latest annual financial statements. Segment results represent the profit earned by each segment without allocation of the share of profits of associates, central administration costs including directors' salaries, investment revenue and finance costs, and income tax expense. This is the measure reported to the Group's Board for the purposes of resource allocation and assessment of segment performance.
4. Tax
At 30 June 2022, the Group has no deferred tax assets or liabilities and an income tax of £52k charge for the period.
5. Revenue
An analysis of the Group's revenue is as follows:
| Six months ended | Year ended | ||
| 30 June 2022 £'000 |
30 June 2021 £'000 |
31 December 2021 £'000 |
|
| Revenue from gold sales | 972 | 153 | 692 |
| 972 | 153 | 692 |
6. Loss per share
The calculation of the basic and diluted loss per share is based on the following data:
| Six months ended | Year ended | |||
| Losses | 30 June 2022 £'000 |
30 June 2021 £'000 |
31 December 2021 £'000 |
|
| Losses for the purposes of basic earnings per share being: Net loss from continuing operation attributable to equity holders of the parent |
(28) | (2,205) | (3,132) | |
| (28) | (2,205) | (3,132) | ||
| Number of shares | ||||
| Weighted average number of ordinary and diluted shares for the purposes of basic earnings per share | 847,000,046 | 581,422,831 | 805,203,295 | |
| (Loss)/profit per ordinary share basic and diluted (pence) | (0.00) | (0.40) | (0.40) |
In accordance with IAS 33, the share options and warrants do not have a dilutive impact on earnings per share, which are set out in the consolidated income statement. Details of the shares issued during the period as shown in Note 9 of the Financial Statements.
7. Intangible assets
| Development expenditure & Mineral exploration | Total | |
| £'000 | £'000 | |
| As at 1 January 2022 | 16,752 | 16,752 |
| Additions - at fair value (Manica) | - | - |
| Additions - at cost (Manica) | 34 | 34 |
| Foreign exchange | 139 | 139 |
| Additions - at fair value (Bushranger) | - | - |
| Additions - at cost (Bushranger) | 2,337 | 2,337 |
| Foreign exchange | 314 | 314 |
| Additions - at cost (Eureka) | 184 | 184 |
| As at 30 June 2022 | 19,760 | 19,760 |
| Amortisation | ||
| As at 1 January 2022 | - | - |
| Charge for the year | - | - |
| As at 30 June 2022 | - | - |
| Net Book value at 1 January 2022 | 16,752 | 16,752 |
| Net book value at 30 June 2022 | 19,760 | 19,760 |
Mozambique
In March 2016, The Company acquired the Manica licence 3990C ("Manica Project") from Auroch Minerals NL. The Manica Project is situated in central Mozambique in the Beira Corridor. At the time of acquisition, the project had a JORC compliant resource of 900koz (9.5Mt@ 3.01g/t) in situ, which has increased to 1.257moz (17.3Mt @ 2.2g/t) following an independent technical report completed by Minxcon (Pty) Ltd in May 2016.
Australia
In November 2020, the Company acquired the Bushranger copper-gold project ("Bushranger Project") which comprises of four exploration licences totaling 501km2, located in eastern central New South Wales, Australia. The Bushranger Project hosts the Racecourse deposit, a JORC (2012) compliant inferred resource estimated at 71Mt @ 0.44% Cu and 0.064g/t Au using a 0.3% Cu cut-off.
Zambia
The Eureka copper-gold property with the small-scale mining licence number 22134-HQ-SML comprising approximately 345 hectares is accessed by a 100km dirt road from Kabwe, west of the Zambian Copperbelt district. The licence application was submitted in August 2017 and has been validated and the licence when issued will be for period of 10 years with no minimum spend.
As the 31 December 2021, the Company impaired £362K of costs that had been incurred to date on the Kalengwa project.
| Cost or fair value on acquisition of subsidiary | Mining plant & equipment | Land & Buildings | Furniture & Fittings | Total |
| £'000 | £'000 | £'000 | £'000 | |
| At 1 January 2022 | 36 | - | - | 36 |
| Additions - at cost | 26 | - | - | 26 |
| Foreign exchange | 2 | - | - | 2 |
| At 30 June 2022 | 64 | - | - | 64 |
| Depreciation | ||||
| At 1 January 2022 | (11) | - | - | (11) |
| Charge for the period | (8) | - | - | (8) |
| At 30 June 2022 | (19) | - | - | (19) |
| Net book value | ||||
| At 30 June 2022 | 45 | - | - | 45 |
| At 1 January 2022 | 25 | - | - | 25 |
8. Property, plant and equipment
9. Share capital
| As at 30 June 2022 Number |
As at 30 June 2021 Number |
As at 31 December 2021 Number |
|
| Deferred shares of 0.09p each | |||
| As at 1 January | 5,338,221,169 | 5,338,221,169 | 5,338,221,169 |
| Issued during the period | - | - | - |
| 5,338,221,169 | 5,338,221,169 | 5,338,221,169 | |
| Ordinary shares of 0.02p each | |||
| As at 1 January | 845,143,693 | 620,465,144 | 620,465,144 |
| Issued during the period | 5,249,998 | 224,678,549 | 224,678,549 |
| Outstanding as at 30 June | 850,393,691 | 845,143,693 | 845,143,693 |
The following Ordinary Shares of 0.02p were issued during the period:
- Issued - 28 April 2022-4,416,665 at 1.20p per share
- Issued - 28 April 2022- 833,333 at 1.85p per share
The following warrants were exercised during the year:
- Issued 23 August 2019- 3,333,332 exercisable at 1.20p per share
- Issued 30 September 2020- 1,083,834 exercisable at 1.20p per share
- Issued 30 September 2020- 833,332 exercisable at 1.85p per share
10. Cash flows from operating activities
| Six month period ended 30 June 2022 £'000 |
Six month period ended 30 June 2021 £'000 |
Year ended 31 December 2021 £'000 |
|||
| Profit/(loss) for the period | 24 | (2,205) | (3,056) | ||
| Adjustments for: | |||||
| Continuing Operations | |||||
| Depreciation of property, plant and equipment | 8 | - | 11 | ||
| Amortisation of intangible assets | - | - | - | ||
| Net Finance costs | (71) | 72 | 214 | ||
| Impairment of intangible assets | - | - | 362 | ||
| Interest income | (23) | - | (20) | ||
| Other (gains) /losses | - | - | - | ||
| Share-based payments expense | - | 1,473 | 1,473 | ||
| Operating cash flows before movements in working capital | (62) | (660) | (1,016) | ||
| Decrease/(Increase) in inventories | 162 | (1) | (169) | ||
| (Increase)/decrease in receivables | (972) | (34) | (516) | ||
| (Decrease)/increase in payables | (876) | (602) | 1,176 | ||
| Cash used in operations | (1,748) | (1,297) | (525) | ||
| Net finance costs | 94 | (72) | (194) | ||
| Tax (paid) | (78) | (86) | (48) | ||
| Foreign currency exchange differences | - | - | - | ||
| Net cash used in operating activities | (1,732) | (1,455) | (767) | ||
11. Related party transactions
There have been no changes to related party arrangements or transactions as reported in the 2021 Annual Report.
Transactions between Group companies, which are related parties, have been eliminated on consolidation and are therefore not disclosed. The only other transactions which fall to be treated as related party transactions are those relating to the remuneration of key management personnel, which are not disclosed in the Half Yearly Report, and which will be disclosed in the Group's next Annual Report.
ENDS
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