TIDMSRES
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 GBP153,323
(31 March 2021: GBP185,955) comprising:
-- Revenue income from lease of GBP11,422.
-- Interest income of GBP11; less Administration costs of GBP160,623.
-- Expensed pre-licence exploration costs totalling GBP4,133.
Project expenditure of GBP37,145 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 (GBP675). Shares to the value of GBP16,685
were issued in January 2022 in satisfaction of a portion of
outstanding directors' fees.
At 31 March 2022, the Company held GBP183,923 in cash and cash
equivalents and liquid listed investments having a value of
GBP49,553.
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 31 March to 31 March to
2022 2021 30 September
Unaudited Unaudited 2021
Audited
GBP GBP GBP
--------------------------------------- -------------- -------------- ----------------
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
GBP GBP GBP
-------------------------------------- -------------- -------------- ------------------
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
GBP GBP GBP
------------------------------- ------------ ------------ ---------------
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 value currency Accumulated
capital account reserve reserve reserve losses Total
GBP GBP GBP GBP GBP GBP GBP
----------------------------- ---------- ---------- ---------- ---------- ----------- -------------- ----------
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
GBP GBP GBP
-------------------------------------------- ------------- ------------- ------------------
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 (GBP) (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 GBP16,685, 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 GBP675, 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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