TIDMARK
RNS Number : 0533B
Arkle Resources PLC
29 September 2022
29 September 2022
Arkle Resources PLC
("Arkle" or the "Company")
Interim Statement for the period ended 30 June 2022
Chairman's Statement
The principal activities of Arkle in recent months have been on
our Irish zinc holdings, where drilling is ongoing and on our
Wicklow / Wexford gold licences. Action on our gold licences has
been mainly focused on a review of recent drilling results. After
an extended delay the licence covering our main gold prospect in
Donegal was renewed.
The Environmental Targets for 2030 and 2050 cannot be reached
without massive and substantial investment in both mineral and
hydrocarbon resources. That is reality. Every EV, every windmill
requires metals. In the case of windmills, an offshore windmill
needs 1,650 tons of metals. Every EV requires metals for the body
and scarce Battery Group Metals for propulsion. There are huge and
growing gaps on projected demand against supplies. Since most mines
have short lives finding new sources of metals is a condition
precedent for Environmental Targets. This means exploration. This
in turn requires investors willing to put up risk capital. Without
discoveries there can be no new mines. That is a blinding glimpse
at the obvious but is not recognised. Private investors have
deserted explorers and institutions have backed off funding
development.
Lithium, copper graphite and nickel are vital to the green
economy, yet exploration is hard to fund.
Gold, as you would expect in an uncertain world, remains in
demand, but here again there is a dearth of early-stage exploration
funding.
The lack of London investor interest in Irish exploration assets
led the board to examine potential projects overseas. We focused on
geographic areas where we have experience, Africa, and on minerals
where we have knowledge, gold, base metals and, importantly,
Battery Group Metals, in particular lithium. On our board and in
the wider shareholder group there is a substantial body of
knowledge relating to lithium. We made a tentative entrance into
this area with the acquisition of three small areas in Zimbabwe,
one of the largest lithium producers in the world. We continue to
evaluate other opportunities.
Zinc
Recent months have seen the start of a six hole drilling
programme on our Stonepark licence block (owned 23.44% by Arkle and
76.56% by Group Eleven Resources Corp.). A seventh, deeper hole has
been added to the programme. The northern most licence of the six
blocks holding contains 5.1 million tonnes of 11.3% combined lead
and zinc. Most of the block remains unexplored. The six hole
programme is designed to test new areas. The first three holes have
been completed. One G-11-2531-01 was a 642 metre hole which
discovered a 150 metre vertical displacement of the fault. Hole
G-11-450-03, 3.7km away intersected a thick package of extensive
brecciation and pyrite. The results may point to a large and
compelling zinc target to the North of this hole. An additional
hole to test this target will be drilled following the completion
of the current three hole programme.
The third hole drilled to the West of the Stonepark discovery
encountered a number of low grade zinc intervals. Drilling has
commenced on the remaining three shallow holes which will test
targets close to the existing discovery.
The six hole programme is paid for. The additional hole which
could be as deep as 1,100 metres will cost in excess of EUR120,000.
Arkle has indicated that it will participate in this hole.
Gold
Arkle holds five prospecting licences in Wicklow / Wexford and
two in Donegal.
In 2021 extensive surveys were followed by a 12 hole drilling
programme on our Wicklow / Wexford ground. Some high grade results
were found but the extreme "nuggety" nature of the gold made
detailed analyses difficult. The conclusion was that the Tombreen
target was larger than previously anticipated with visible gold
identified along a 1.5km strike and 7km width. It is likely that
this gold extends from the Tombeen licence into the adjacent
Knocknalour licence.
It was decided to do a full review and modelling exercise of all
current and historic data and drillcore on the five licences. The
organisation due to undertake this exercise has not been in a
position to complete it due to equipment issues.
Arkle holds two licences in Donegal. Significant gold
indications have been discovered on the Meeneragh licence. It was
planned to begin a drilling programme in summer 2022 but a long
delay in renewing the licence meant that the weather window had
shortened and this is now deferred until 2023.
New Opportunities
Lack of investor interest in Irish zinc and gold exploration
combined with a growing anti-mining sentiment in certain parts of
the Irish government led the board to consider opportunities
outside of Ireland.
We focused on minerals and areas where we have some competence
in particular gold, base metals and lithium in Africa. The search
has been slow to gather momentum but is now making progress.
We put our toe into the water with the acquisition of three
licences containing lithium type rocks in Zimbabwe. We have
identified more ground but we are moving slowly. A number of gold
projects have been and are being examined but as yet, we have seen
none we deem worth pursuing. Base metals in sub-Saharan Africa
offer interesting possibilities but the main focus is lithium,
cobalt and platinum group minerals.
Future
Ireland has been the sole focus of Arkle activities. For two
generations the Irish structure for exploration has been the envy
of the world, certainty of title, a clear and quick path to
obtaining and renewing of licences, fair taxation, no state equity
involvement and good infrastructure. However, there is concern that
changing Irish State attitudes will hamper and dampen the efforts
of a small and declining group of explorers in Ireland.
What is absolutely certain is a growing shortage of critical
metals. This can only mean higher prices. Investors willing to take
the risks involved may be handsomely rewarded if prospects can be
turned into mines.
John Teeling
Chairman
28 September 2022
Market Abuse Regulation (MAR) Disclosure
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR.
Enquiries:
Arkle Resources PLC
John Teeling, Chairman +353 (0) 1 833 2833
Jim Finn, Finance Director +353 (0) 1 833 2833
SP Angel Corporate Finance LLP
Nominated Advisor & Joint Broker
Matthew Johnson/Adam Cowl +44 (0) 203 470 0470
First Equity Limited
Joint Broker
Jason Robertson +44 (0) 207 374 2212
BlytheRay +44 (0) 207 138 3204
Megan Ray
Rachael Brooks
Teneo
Luke Hogg +353 (0) 1 661 4055
Arkle Resources plc
Financial Information (Unaudited)
Six Months Ended Year Ended
30 Jun 22 30 Jun 21 31 Dec 21
unaudited unaudited audited
Condensed Consolidated Statement of Comprehensive Income EUR'000 EUR'000 EUR'000
Administrative expenses (139) (148) (320)
- - -
---------- ---------- -----------
OPERATING LOSS (139) (148) (320)
Profit/(Loss) due to fair value volatility of warrants 160 185 746
---------- ---------- -----------
PROFIT BEFORE TAXATION 21 37 426
Income tax expense - - -
PROFIT FOR THE PERIOD AND TOTAL COMPREHENSIVE INCOME 21 37 426
========== ========== ===========
PROFIT PER SHARE - basic and diluted 0.01c 0.01c 0.14c
========== ========== ===========
Condensed Consolidated Statement of Financial Position
30 Jun 22 30 Jun 21 31 Dec 21
unaudited unaudited audited
EUR'000 EUR'000 EUR'000
NON-CURRENT ASSETS
Intangible Assets 3,949 3,514 3,831
---------- ---------- -----------
CURRENT ASSETS
Other receivables 24 61 32
Cash and cash equivalents 120 571 80
---------- ---------- -----------
144 632 112
---------- ---------- -----------
TOTAL ASSETS 4,093 4,146 3,943
---------- ---------- -----------
LIABILITIES
CURRENT LIABILITIES
Trade and other payables (287) (294) (234)
Warrants - (653) (160)
---------- ---------- -----------
(287) (947) (394)
---------- ---------- -----------
NET CURRENT LIABILITIES (143) (315) (282)
NET ASSETS 3,806 3,199 3,549
========== ========== ===========
EQUITY
Share Capital - Deferred Shares 992 992 992
Share Capital - Ordinary Shares 864 765 765
Share Premium 6,817 6,680 6,680
Share based payments reserve 156 127 156
Retained deficit (5,023) (5,365) (5,044)
TOTAL EQUITY 3,806 3,199 3,549
========== ========== ===========
Condensed Consolidated Statement of Changes in Shareholders Equity
Called-up Called-up
Share Share Share
Capital Capital Share Based Retained
Deferred Ordinary Premium Reserves Deficit Total
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
As at 1 January 2021 992 742 6,606 127 (5,470) 2,997
Shares issued - 23 74 - - 97
Fair value of warrants exercised - - - - 68 68
Profit for the period - - - - 37 37
As at 30 June 2021 992 765 6,680 127 (5,365) 3,199
----------- ----------- -------- --------- --------- --------
Share options granted - - - 29 - 29
Profit for the period - - - - 321 321
As at 31 December 2021 992 765 6,680 156 (5,044) 3,549
----------- ----------- -------- --------- --------- --------
Shares issued - 99 137 - - 236
Profit for the period - - - - 21 21
As at 30 June 2022 992 864 6,817 156 (5,023) 3,806
=========== =========== ======== ========= ========= ========
Condensed Consolidated Cash Flow Six Months Ended Year Ended
30 Jun 22 30 Jun 21 31 Dec 21
unaudited unaudited audited
EUR'000 EUR'000 EUR'000
CASH FLOW FROM OPERATING ACTIVITIES
Profit for the year 21 37 426
Share based payments charge - - 29
Fair value movement of warrants (160) (185) (746)
Foreign exchange 7 (27) (25)
---------- ---------- -----------
(132) (175) (316)
Movements in working capital 61 78 47
---------- ---------- -----------
NET CASH USED IN OPERATING ACTIVITIES (71) (97) (269)
CASH FLOW FROM INVESTING ACTIVITIES
Payments for exploration and evaluation (118) (141) (458)
---------- ---------- -----------
NET CASH USED IN INVESTING ACTIVITIES (118) (141) (458)
---------- ---------- -----------
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from issue of equity shares 236 97 97
---------- ---------- -----------
NET CASH FROM FINANCING ACTIVITIES 236 97 97
---------- ---------- -----------
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 47 (141) (630)
Cash and Cash Equivalents at beginning of the period 80 685 685
Effects of exchange rate changes on cash held in foreign currencies (7) 27 25
CASH AND CASH EQUIVALENTS AT OF THE PERIOD 120 571 80
========== ========== ===========
Notes:
1. INFORMATION
The financial information for the six months ended 30 June 2022
and the comparative amounts for the six months ended 30 June 2021
are unaudited.
The interim financial statements have been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted by
the European Union. The interim financial statements have been
prepared applying the accounting policies and methods of
computation used in the preparation of the published consolidated
financial statements for the year ended 31 December 2021.
The interim financial statements do not include all of the
information required for full annual financial statements and
should be read in conjunction with the audited consolidated
financial statements of the Group for the year ended 31 December
2021, which are available on the Company's website
www.arkleresources.com
The interim financial statements have not been audited or
reviewed by the auditors of the Group pursuant to the Auditing
Practices board guidance on Review of Interim Financial
Information.
2. No dividend is proposed in respect of the period.
3. EARNINGS PER SHARE
Basic earnings per share is computed by dividing the profit
after taxation for the year attributable to ordinary shareholders
by the weighted average number of ordinary shares in issue and
ranking for dividend during the year. Diluted earnings per share is
computed by dividing the profit after taxation for the year by the
weighted average number of ordinary shares in issue, adjusted for
the effect of all dilutive potential ordinary shares that were
outstanding during the year.
The following table sets out the computation for basic and
diluted earnings per share (EPS):
30 June 30 June 31 Dec
22 21 21
EUR EUR EUR
Profit per share - Basic and Diluted 0.01c 0.01c 0.14c
============== ============== ==============
Basic profit per share
The earnings and weighted average number of ordinary shares used
in the calculation of basic loss per share are as follows:
EUR'000 EUR'000 EUR'000
Profit for the year attributable
to equity holders 21 37 426
============== ============== ==============
Denominator Number Number Number
For basic and diluted EPS 330,296,947 305,051,947 220,039,097
============== ============== ==============
Basic and diluted loss per share are the same as the effect of
the outstanding share options is anti-dilutive.
4. INTANGIBLE ASSETS
30 June 22 30 June 21 31 Dec 21
Exploration and evaluation assets: EUR'000 EUR'000 EUR'000
Cost at 1 January 3,831 3,373 3,373
Additions 118 141 458
Closing Balance 3,949 3,514 3,831
=========== =========== ==========
In 2007 the Group entered into an agreement with Teck Cominco
which gave Teck Cominco the option to earn a 75% interest in a
number of other licences held by the Group. Teck Cominco had to
spend CAD$3m to earn the interest. During 2012 the relevant
licences were transferred to a new company, TILZ Minerals Limited,
which at 30 June 2022 was owned 23.44% (2021: 23.44%) by Limerick
Zinc Limited (subsidiary of Arkle Resources plc) and 76.56% (2021:
76.56%) by Group Eleven Resources Corp (third party).
On 13 September 2017 t he board of Arkle Resources plc were
informed that Group Eleven Resources Corp. a private company, has
acquired the 76.56% interest held by Teck Ireland in TILZ Minerals.
Arkle Resources plc owns the remaining 23.44%.
The Group's share of expenditure on the licences continues to be
capitalised as an exploration and evaluation asset. The Group is
subject to cash calls from Group Eleven Resources Corp. in respect
of the financing of the ongoing exploration an d evaluation of
these licences. In the event that the Group decides not to meet
these cash calls its interest in TILZ Minerals Limited may be
diluted accordingly.
On 23 June 2022 the Company announced that they been granted
three licences covering 163 hectres to prospect for Lithium in the
Insiza District of the Matabeleland South Province of Zimbabwe. The
directors believe that these licences, which cover a small area,
represent a low-cost entry into one of the largest lithium
producing countries in the world.
The realisation of the intangible assets is dependent on the
discovery and successful development of economic reserves which is
subject to a number of risks as outlined below. Should this prove
unsuccessful the carrying value included in the balance sheet would
be written off to the statement of comprehensive income.
The group's activities are subject to a number of significant
potential risks including;
- Uncertainties over development and operational risks;
- Compliance with licence obligations;
- Ability to raise finance to develop assets;
- Liquidity risks; and
- Going concern risks.
The directors are aware that by its nature there is an inherent
uncertainty in such exploration and evaluation expenditure as to
the value of the asset. Having reviewed the carrying value of
exploration and evaluation of assets at 30 June 2022, the directors
are satisfied that the value of the intangible asset is not less
than carrying value.
30 June 22 30 June 21 31 Dec 21
Segmental Analysis EUR'000 EUR'000 EUR'000
Limerick 1,698 1,600 1,600
Rest of Ireland 2,243 1,914 2,231
Zimbabwe 8 - -
----------- ----------- ----------
Closing Balance 3,949 3,514 3,831
=========== =========== ==========
5. SHARE CAPITAL AND SHARE PREMIUM
2022 2021
EUR'000 EUR'000
Authorised
1,000,000,000 Ordinary shares
of 0.25c each 2,500 2,500
500,000,000 Deferred shares of
0.75c each 3,750 3,750
--------- ---------
6,250 6,250
========= =========
Share Share
Capital Premium
Number EUR'000 EUR'000
Deferred Shares - nominal value
of 0.75c 132,311,593 992 -
============ ========= =========
Share Share
Ordinary Shares - nominal value Capital Premium
of 0.25c Number EUR'000 EUR'000
Allotted, Called Up and Fully
Paid:
Balance at 1 January 2021 297,044,926 742 6,606
Issued during the period 8,937,500 23 74
Balance at 30 June 2021 305,982,426 765 6,680
Issued during the period - - -
------------ --------- ---------
Balance at 31 December 2021 305,982,426 765 6,680
Issued during the period 39,400,000 99 137
Balance at 30 June 2022 345,382,426 864 6,817
============ ========= =========
Movement in shares
On 19 January 2021 a total of 8,937,500 shares were issued on
the exercise of 8,937,500 warrants at a price of 0.5p and 1.2p per
share to provide additional working capital and fund development
costs.
On 22 February 2022 a total of 30,080,000 shares were issued on
the exercise of 30,080,000 warrants at a price of 0.5p per share to
provide additional working capital and fund development costs.
On 28 April 2022 a total of 9,320,000 shares were issued on the
exercise of 9,320,000 warrants at a price of 0.5p per share to
provide additional working capital and fund development costs.
6. SHARE BASED PAYMENTS - OPTIONS
Equity-settled share-based payments are measured at fair value
at the date of grant.
The Group plan provides for a grant price equal to the average
quoted market price of the ordinary shares on the date of
grant.
30 Jun 22 Weighted average 30 Jun21 Weighted average 31 Dec 21 Weighted average
exercise price in exercise price in exercise price in
pence pence pence
'000 '000 '000
Outstanding at
beginning of
period 16,100 1.32 13,100 1.22 13,100 1.22
Granted during the
period - - - 3,000 1.80
Expired during the - - - - -
period
---------- ------------------- --------- ------------------- ---------- -------------------
Outstanding at end
of period 16,100 1.32 13,100 1.22 16,100 1.32
========== =================== ========= =================== ========== ===================
Exercisable at end
of period 16,100 1.32 13,100 1.22 16,100 1.32
========== =================== ========= =================== ========== ===================
7. SHARE BASED PAYMENTS - WARRANTS
Fair Value
30 June 22 30 June 21 31 Dec 21
EUR'000 EUR'000 EUR'000
At 1 January 160 906 906
Expired (4) - -
Exercised (72) (68) (68)
Movement in fair value (84) (185) (678)
----------- ----------- ----------
Closing Balance - 653 160
=========== =========== ==========
Number
30 June 22 30 June 21 31 Dec 21
'000 '000 '000
Outstanding at beginning of period 110,463 119,400 119,400
Granted during the period - - -
Exercised during the period (39,400) (8,937) (8,937)
Expired during the period (2,000) - -
----------- ----------- ----------
Closing Balance 69,063 110,463 110,463
=========== =========== ==========
On 1 January 2022 a total of 41,400,000 warrants with an
exercise price of 0.5p per warrant were outstanding. During the
period a total of 39,400,000 warrants with a fair value of
EUR72,193 were exercised. The balance of the 2,000,000 warrants
with a fair value of EUR3,664 expired in April 2022. The movement
in fair value of EUR75,857 was expensed to the Consolidated
Statement of Comprehensive Income.
On 1 January 2022 a total of 69,062,500 warrants with an
exercise price of 1.2p per warrant and a fair value of EUR83,814
were outstanding. These warrants have an expiry date of 7 September
2022. The movement in fair value of EUR83,814 was expensed to the
Consolidated Statement of Comprehensive Income.
8. POST BALANCE SHEET EVENTS
There are no material post balance sheet events affecting the
Company.
9. The Interim Report for the six months to 30 June 2022 was
approved by the Directors on 28 September 2022.
10. The Interim Report will be available on Arkle Resources
PLC's website www.arkleresources.com
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