TIDMARK
RNS Number : 2017A
Arkle Resources PLC
28 September 2020
28(th) September 2020
Arkle Resources PLC
("Arkle" or the "Company")
Interim Statement for the period ended 30 June 2020
Highlights
- Drilling ongoing on the Stonepark zinc project
- Trenching of newly discovered gold anomalies at Mine River to proceed
- Good results from soil sampling in Donegal. New area identified
- Corporate interest in the Stonepark zinc project
- Over GBP500,000 raised during the period and GBP600,000 raised
in August to fund ongoing exploration and working capital
Chairman's Statement
The lifeblood of a mineral exploration company is exploration.
Currently we are drilling our zinc discovery in Stonepark,
Limerick, completing a tightly spaced soil sampling programme on
our Glentogher gold licence in Donegal and preparing to trench our
Mine River gold licences in Wicklow after completing an extensive
soil sampling programme and analysing the results.
Zinc
The Irish lockdown cost us four months. It was not possible to
get on the ground. It is a tribute to the staff and field crews
that they were ready to move once permissions were granted. The
drilling at the Stonepark zinc project will produce results within
weeks. Two carefully targeted holes, in total 800 metres, are
designed to test the continuity of mineralisation around the
Stonepark North pod and to extend the Stonepark South pod.
The Stonepark project, with a current resource in excess of 5m
tonnes, is a joint venture between Arkle (23.44%) and Group Eleven
(76.56%) who is the operator. In recent months there has been
significant interest in the zinc potential in the Limerick area.
Glencore, who own the huge Pallas Green zinc discovery, 45 million
tons plus, continue to drill their licences. Pallas Green adjoins
our Stonepark licence. In recent weeks Group Eleven have announced
a very good drill hole result from their Carrickittle licence,
adjacent to the South Eastern border of Arkle's ground. Our
successful drill hole in 2019 at Kilteely, on Arkle ground, is
close to the border with the Carrickittle licence and shares
similar geology to the discovery hole. It is also noteworthy that
Glencore have purchased shares and subsequently increased their
shareholding in Group Eleven.
Gold
Gold has had an outstanding price rise in the past year,
touching $2,000 an ounce and remaining around $1,900. This rise has
filtered through to the share prices of gold mining shares and
onwards to the share prices of many gold prospecting companies.
Arkle, with prospective gold ground in Ireland, has not to date,
benefitted from rising prices but was able to raise new money for
exploration.
We are very active on our Wicklow / Wexford gold licences and on
our gold ground in Donegal. No one has ever found the source of the
extensive gold discovered in Wicklow. It was mined over 200 years
ago and has seen numerous explorers spend money in the area. Arkle
has a huge database on the ground. There is a swarm of gold bearing
veins running down the Wicklow hills. The veins are often narrow,
but can be very high grade, in excess of 25gms, per tonne of rock.
In recent years we have focused on two areas, Tombreen and
Knocknalour. In both areas we found high grade gold. We have
drilled between and around the two areas, to date with limited
success. Following an extensive 2019 review of our gold database, a
tight soil sampling programme was undertaken just south of Carnew.
A 5km square area was surveyed using XRF handheld technology taking
soil samples every 20 metres along 100 metre spaced grid lines. The
results were good, five new anomalies were identified. The next
stage of exploration at Mine River is trenching to see the extent
of the gold. This work is ready to start once approvals are
obtained from the authorities. We are hoping to undertake this
before winter closes in.
Our Donegal gold sampling has produced good results. We were
sampling on a tight grid along a trend where we had previously
obtained some good gold grades. We found what we were looking for
but were delighted to discover strong gold indicator mineral levels
to the southwest on our licence, stretching outside of the sampling
area. We are immediately sampling this new area to identify drill
targets.
Corporate Activity
During the past year we have looked at a number of corporate
strategies. There has been significant interest in Stonepark but
most options require the approval of both parties in the joint
venture. The option of selling the Company's subsidiary which owns
the Stonepark interest is under consideration.
As is to be expected there is interest in our gold assets. Some
early stage proposals have been received by the Company but nothing
that the board thought valued the potential.
During the period, the lack of investor interest in our Irish
assets prompted us to look abroad for other opportunities. We have
looked at opportunities in Europe, Northern Canada and Africa. We
have dropped all, bar some battery metal projects in Africa where
we are examining possible licences. However this is at an early
stage.
Funding and the Future
The company raised GBP502,000 in the period, a further
GBP600,000 was raised in August 2020. This covers expenditures for
the next eighteen months.
The board believes that we hold prime gold and zinc exploration
ground in Ireland, certainly better than the opportunities
presented from abroad. We have a very loyal shareholder base but
have not succeeded in spreading our beliefs to the wider investing
public. This we will try to do in the immediate future.
John Teeling
Chairman
25(th) September 2020
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
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 Adviser & Joint Broker
Matthew Johnson/Soltan Tagiev +44 (0) 203 470 0470
First Equity Limited
Joint Broker
Jason Robertson +44 (0) 207 374 2212
Blytheweigh +44 (0) 207 138 3204
Megan Ray
Rachael Brooks
Teneo
Luke Hogg +353 (0) 1 661 4055
Alan Tyrrell +353 (0) 1 661 4055
Ross Murphy +353 (0) 1 661 4055
Arkle Resources plc
Financial Information (Unaudited)
Year
Six Months Ended Ended
30 June 30 June 31 Dec
20 19 19
unaudited unaudited audited
Condensed Consolidated Statement of Comprehensive
Income EUR'000 EUR'000 EUR'000
Continuing Operations
Administrative expenses (226) (170) (314)
---------- ---------- --------
OPERATING LOSS (226) (170) (314)
Investment revenue - - -
---------- ---------- --------
LOSS BEFORE TAXATION (226) (170) (314)
Income tax expense - - -
LOSS FOR THE PERIOD AND TOTAL COMPREHENSIVE
INCOME (226) (170) (314)
========== ========== ========
LOSS PER SHARE - basic and
diluted (0.14c) (0.14c) (0.24c)
========== ========== ========
Condensed Consolidated Balance 30 June 30 June 31 Dec
Sheet 20 19 19
unaudited unaudited audited
EUR'000 EUR'000 EUR'000
NON-CURRENT ASSETS
Intangible Assets 3,607 3,362 3,446
---------- ---------- --------
CURRENT ASSETS
Other receivables 11 15 4
Cash and cash equivalents 252 147 40
---------- ---------- --------
263 162 44
---------- ---------- --------
TOTAL ASSETS 3,870 3,524 3,490
---------- ---------- --------
LIABILITIES
CURRENT LIABILITIES
Trade and other payables (198) (130) (227)
---------- ---------- --------
NET CURRENT LIABILITIES 65 32 (183)
NET ASSETS 3,672 3,394 3,263
========== ========== ========
EQUITY
Share Capital - Deferred
Shares 992 - -
Share Capital - Ordinary
Shares 540 1,323 1,323
Share Premium 6,557 6,209 6,209
Share based remuneration
reserve 123 32 45
Reserves (4,540) (4,170) (4,314)
TOTAL EQUITY 3,672 3,394 3,263
========== ========== ========
Condensed Consolidated Statement of Changes
in Shareholders Equity
Called-up Share
Share Share Based Retained
Capital Premium Reserves Deficit Total
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
As at 1 January 2019 1,139 6,136 32 (4,000) 3,307
Issue of shares 184 73 - - 257
Loss for the period - - - (170) (170)
As at 30 June 2019 1,323 6,209 32 (4,170) 3,394
---------- -------- ---------- ---------- --------
Share options vested - - 13 - 13
Loss for the period - - - (144) (144)
As at 31 December 2019 1,323 6,209 45 (4,314) 3,263
---------- -------- ---------- ---------- --------
Share options granted - - 78 - 78
Issue of shares 209 348 - - 557
Loss for the period - - - (226) (226)
As at 30 June 2020 1,532 6,557 123 (4,540) 3,672
========== ======== ========== ========== ========
Year
Six Months Ended Ended
30 June 30 June 31 Dec
20 19 19
Condensed Consolidated Cash
Flow unaudited unaudited audited
EUR'000 EUR'000 EUR'000
CASH FLOW FROM OPERATING ACTIVITIES
Loss for the year (226) (170) (314)
Share based payments charge 35 - 7
Fair value of warrants issued - - 19
Foreign exchange - - (1)
---------- ---------- --------
(191) (170) (289)
Movements in working capital (36) 12 90
---------- ---------- --------
CASH USED BY OPERATIONS (227) (158) (199)
NET CASH USED IN OPERATING
ACTIVITIES (227) (158) (199)
---------- ---------- --------
CASH FLOW FROM INVESTING
ACTIVITIES
Payments for exploration and evaluation (118) (58) (125)
---------- ---------- --------
NET CASH USED IN INVESTING
ACTIVITIES (118) (58) (125)
---------- ---------- --------
CASH FLOW FROM FINANCING ACTIVITIES
Issue of shares 557 257 257
---------- ---------- --------
NET CASH GENERATED FROM FINANCING
ACTIVITIES 557 257 257
---------- ---------- --------
NET INCREASE/(DECREASE) IN CASH AND CASH
EQUIVALENTS 212 41 (67)
Cash and Cash Equivalents at beginning
of the period 40 106 106
Effects of exchange rate changes on cash
held in foreign currencies 0 0 1
CASH AND CASH EQUIVALENTS AT
OF THE PERIOD 252 147 40
========== ========== ========
Notes:
1. INFORMATION
The financial information for the six months ended 30 June 2020
and the comparative amounts for the six months ended 30 June 2019
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 2019.
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
2019, 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. LOSS PER SHARE
30 June 30 June 31 Dec
20 19 19
EUR EUR EUR
Loss per share - Basic and Diluted (0.14c) (0.14c) (0.24c)
============== ============== ==============
Basic loss 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
Loss for the year attributable
to equity holders of the parent (226) (170) (314)
============== ============== ==============
Weighted average number of ordinary
shares for the purpose of basic
earnings per share 166,401,091 125,707,757 129,085,292
============== ============== ==============
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 20 30 June 19 31 Dec 19
Exploration and evaluation assets: EUR'000 EUR'000 EUR'000
Cost at 1 January 3,446 3,314 3,314
Additions 161 48 132
----------- ----------- ----------
Closing Balance 3,607 3,362 3,446
=========== =========== ==========
In 2012 the Group entered into an agreement with Teck Ireland
Limited ("Teck"), a subsidiary of Teck Resources Limited, which
gives Teck the option of earning a 75% interest in licences held by
the Group in Cavan/Meath. Teck had to spend EUR1.35 million on the
licences by 2018 in order to earn the option to acquire 75%
interest. As per the agreement the licences have been transferred
into a new company, Oldcastle Zinc Limited. As at 31 December 2019
Teck had completed EUR1.35 million worth of expenditure. As per the
agreement upon Teck completing EUR550,000 worth of expenditure
343,500 ordinary shares in Oldcastle Zinc Limited were to be issued
to Teck. The shares were issued on 20 February 2015 giving Teck a
51% interest in the company. On completion of a further EUR400,000
worth of expenditure 269,360 ordinary shares in Oldcastle Zinc
Limited were to be issued to Teck. The shares were issued on 22
December 2018 giving Teck a total 65% interest in the company. On
10 December 2019 the balance of 377,140 shares were issued to Teck
to give them a total of 75% in the company.
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 2020 was owned 23.44% (2019: 23.44%) by Limerick
Zinc Limited (subsidiary of Arkle Resources plc) and 76.56% (2019:
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 and 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.
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 2020, the directors
are satisfied that the value of the intangible asset is not less
than carrying value.
30 June 20 30 June 19 31 Dec 19
Segmental Analysis EUR'000 EUR'000 EUR'000
Limerick 1,600 1,538 1,538
Oldcastle 330 330 330
Rest of Ireland 1,677 1,494 1,578
----------- ----------- ----------
Closing Balance 3,607 3,362 3,446
=========== =========== ==========
5. SHARE CAPITAL AND SHARE PREMIUM
On 22 April 2020 the Group converted the 132,311,593 existing
ordinary shares of 1c each into 132,311,593 ordinary shares of
0.25c each and 132,311,593 deferred shares of 0.75c each.
Share Share Premium
Number Capital EUR'000
EUR'000
Allotted, Called Up and Fully
Paid:
Deferred Shares of 0.75c
132,311,593 deferred shares of
0.75c each 132,311,593 992 -
============ ========= ==============
Ordinary Shares of 0.25c
Balance at 1 January 2019 113,911,593 1,139 6,136
Issued during the period 18,400,000 184 73
Balance at 30 June 2019 132,311,593 1,323 6,209
Issued during the period - - -
------------ --------- --------------
Balance at 31 December 2019 132,311,593 1,323 6,209
Shares subdivided - (992) -
Issued during the period 83,733,333 209 -
Balance at 30 June 2020 216,044,926 540 6,209
============ ========= ==============
Movement in shares
On 5 March 2019, a total of 18,400,000 shares were issued at a
price of 1.25p per share to provide additional working capital and
fund development costs. For each share subscribed for, the
investors also received one warrant to subscribe for an additional
ordinary share at a price of 1.8p per share until 11 September
2020.
On 27 March 2020, a total of 50,400,000 shares were issued at a
price of 0.5p per share to provide additional working capital and
fund development costs. For each share subscribed for, the
investors also received one warrant to subscribe for an additional
ordinary share at a price of 0.5p per share until 27 March
2022.
On 18 May 2020, a total of 33,333,333 shares were issued at a
price of 0.75p per share to provide additional working capital and
fund development costs.
6. SHARE BASED PAYMENTS - OPTIONS
30 June 20 30 June 19 31 Dec 19
'000 '000 '000
Outstanding at beginning of period 2,800 2,800 2,800
Granted during the period 9,000 - -
Expired during the period - - -
----------- ----------- ----------
Closing Balance 11,800 2,800 2,800
=========== =========== ==========
On 18 May 2020 a total of 9,000,000 options were granted to
directors with a fair value of EUR78,192. The fair value was
calculated using the Black-Scholes valuation model. These options
vest immediately.
The inputs into the Black-Scholes valuation model were as
follows:
Weighted average share price at date of
grant (in pence) 0.95p
Weighted average exercise price (in pence) 0.95p
Expected volatility 98.95%
Expected life 7 years
Risk free rate 1.1%
Expected dividends none
Expected volatility was determined by management based on their
cumulative experience of the movement in share prices over the
financial year.
The terms of the options granted do not contain any market
conditions within the meaning of IFRS 2.
The Group capitalised expenses of EUR43,440 and expensed costs
of EUR34,752 relating to equity-settled share-based payment
transactions during the financial year.
SHARE BASED PAYMENTS - WARRANTS
30 June 20 30 June 19 31 Dec 19
'000 '000 '000
Outstanding at beginning of period 46,203 39,431 39,431
Granted during the period 50,400 18,400 18,400
Expired during the period (27,803) - (11,628)
----------- ----------- ----------
Closing Balance 68,800 57,831 46,203
=========== =========== ==========
On 5 March 2019, a total of 18,400,000 shares were issued at a
price of 1.25p per share. As part of the placing, for each share
subscribed for, the investors also received one warrant to
subscribe for an additional ordinary share at a price of 1.8p per
share at any time until 11 September 2020.
On 27 March 2020, a total of 50,400,000 shares were issued at a
price of 0.5p per share to provide additional working capital and
fund development costs. For each share subscribed for, the
investors also received one warrant to subscribe for an additional
ordinary share at a price of 0.5p per share until 27 March
2022.
On 8 March 2020, a total of 27,803,312 warrants at a price of 7p
per warrant expired.
7. POST BALANCE SHEET EVENTS
On 17 August 2020 the Company announced that it had raised
GBP600,000 via a placing of 75,000,000 new ordinary shares at a
price of 0.8p per share. As part of the placing, f or each share
subscribed for, the investors also received one warrant to
subscribe for an additional ordinary share at a price of 1.2p per
share at any time over a two year period.
8. The Interim Report for the six months to 30 June 2020 was
approved by the Directors on 25(th) September 2020.
9. The Interim Report will be available on Arkle Resources PLC's website www.arkleresources.com
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