TIDMARK
RNS Number : 1509D
Arkle Resources PLC
25 June 2021
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.
25 June 2021
Arkle Resources PLC
("Arkle", the "Group" or the "Company")
Final Results for the Year Ended 31 December 2020
Arkle Resources PLC (LON: ARK), the Irish gold and zinc
exploration and development company, is pleased to announce its
audited results for the year ending 31 December 2020.
Chairman's Statement
It is pleasing to be able to report drilling on our Mine River
licences in Wexford / Wicklow is producing good results notably
where earlier detailed soil sampling had identified a totally new
zone with gold potential some 750 metres from the 2017 Tombreen
discovery.
We have drilled three 100 metre holes into this area, now known
as Tombreen West, and each hole contained multiple zones of gold
bearing veins providing a strong indication of a gold bearing
system.
We moved the fourth hole approximately 700 metres away into the
main Tombreen area. This 200 metre hole showed visible gold in
veins between 145 and 150 metres depth. Laboratory analysis is
underway with results expected in early July 2021. Reflecting the
evidently positive results of this hole an immediate revision of
the exploration programme is underway.
Additional holes will be drilled in a pattern around Hole 4 in
Tombreen. Permits have been obtained and drilling will commence
once the current hole 5 is completed.
Of equal significance is the suggestion that the shallow holes
at Tombreen West may not have gone deep enough to detect the high
grade gold. It is likely that one or more 200 metre holes will be
drilled at Tombreen West.
The detailed soil sampling at our second property in Donegal,
using new more advanced techniques, rediscovered what we believe to
be the gold bearing veins we first found in 2016. We intend to
drill Donegal when permits are obtained and after the current
campaign is completed at Mine River.
The Donegal drilling campaign will focus on the encouraging soil
sample results and follow up trenching survey data obtained in 2020
which we have now analysed and modelled. The focus of the new
campaign will be to follow the vein first identified in 2016 which
contained high gold grades.
Turning to our zinc project, the 23.44% owned Stonepark project
in Limerick which has a NI-43-101 compliant resource in excess of 5
million tonnes. There is plenty of scope for growth at this project
as the mineralisation has been identified in recent drilling to
extend out with the current resource and is open on three sides.
Our target is to increase the resource to 10 million tonnes. The
licences are held in a private joint venture company where the
majority shareholder (76.6%) is Group Eleven who are the
operator.
In recent months, Arkle commissioned a report on Stonepark to
confirm forward exploration strategies. This recommended drilling a
suite of 10 holes. Arkle would be pleased to participate in this
programme and are liaising with our partners, Group Eleven, to
expedite this if possible.
There has been a significant external interest from
multinationals in the Stonepark project. The Company was an active
participant in negotiations with two of the interested companies
and proposals acceptable to Arkle were received but they were not
accepted by Group Eleven.
Group Eleven have been active on their Carrickittle ground which
is adjacent to the Stonepark ground. They have reported very strong
drilling results in holes close to Stonepark. The holes are close
to the Kilteely hole drilled on Stonepark in 2019. This hole showed
zinc mineralisation. There is a geological model which posits a
zinc bearing trend from the Carrickittle ground through the
Stonepark licences and on to the Pallas Green licences where
45million tonnes of zinc bearing ore have been reported. The
results in the Kilteely hole are at greater depths than the current
Stonepark deposit.
We believe that the Stonepark deposit is a very valuable
resource for Arkle and will be even more so with additional
drilling.
Funding
Arkle is well funded for current and any proposed exploration
campaigns. We anticipate that outstanding warrants will be
exercised which would further increase available funding for
exploration.
John Teeling
Chairman
24 June 2021
www.arkleresources.com
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/Adam Cowl +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
Ciara Wylie +353 (0) 1 661 4055
ARKLE RESOURCES PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE FINANCIAL YEARED 31 DECEMBER 2020
2020 2019
EUR EUR
Administrative expenses (324,099) (295,216)
Impairment of exploration and evaluation assets (330,000) -
------------ ----------
OPERATING LOSS (654,099) (295,216)
------------ ----------
Loss due to fair value volatility of warrants (441,829) (18,644)
------------ ----------
LOSS BEFORE TAXATION (1,095,928) (313,860)
Income tax expense - -
------------ ----------
LOSS FOR THE FINANCIAL YEAR AND TOTAL COMPREHENSIVE INCOME (1,095,928) (313,860)
============ ==========
Loss per share - basic and diluted (0.50c) (0.24c)
============ ==========
ARKLE RESOURCES PLC
CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2020
2020 2019
EUR EUR
ASSETS:
NON-CURRENT ASSETS
Intangible assets 3,373,488 3,445,710
CURRENT ASSETS
Other receivables 21,923 3,864
Cash and cash equivalents 684,837 39,631
706,760 43,495
LIABILITIES:
CURRENT LIABILITIES
Trade and other payables (176,664) (207,352)
Warrants (906,198) (18,644)
NET CURRENT LIABILITIES (376,102) (182,501)
NET ASSETS 2,997,386 3,263,209
EQUITY:
Called-up share capital - Ordinary 742,612 1,323,116
Called-up share capital - Deferred 992,337 -
Share premium 6,605,681 6,209,190
Share based remuneration reserve 127,199 44,989
Retained deficit (5,470,443) (4,314,086)
TOTAL EQUITY 2,997,386 3,263,209
ARKLE RESOURCES PLC
STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL YEARED 31 DECEMBER 2020
Called up Share Share Based
Capital Called up Share Share Payment Retained
Deferred Capital Ordinary Premium Reserve Deficit Total
EUR EUR EUR EUR EUR EUR
At 1 January 2019 - 1,139,116 6,136,298 31,631 (4,000,226) 3,306,819
Shares issued - 184,000 72,892 - - 256,892
Credit to equity
for
equity-settled
share-based
payments - - - 13,358 - 13,358
Loss for the year - - - - (313,860) (313,860)
---------------- ------------------ ---------- ------------------- ------------ ------------
At 31 December
2019 - 1,323,116 6,209,190 44,989 (4,314,086) 3,263,209
Sub-division of
shares (Note 5) 992,337 (992,337) - - - -
Shares issued 411,833 396,491 - - 808,324
Share issue
expenses - - - - (60,429) (60,429)
Credit to equity
for
equity-settled
share-based
payments - - - 82,210 - 82,210
Loss for the year - - - - (1,095,928) (1,095,928)
---------------- ------------------ ---------- ------------------- ------------ ------------
At 31 December
2020 992,337 742,612 6,605,681 127,199 (5,470,443) 2,997,386
================ ================== ========== =================== ============ ============
Deferred share capital
The deferred share reserve comprises of the value of the
deferred shares that arose when the Company divided the ordinary
shares via special resolution on 22 April 2020 the shares into
500,000,000 deferred shares of 0.75 cent each and 500,000,000
ordinary shares of 0.25 cent each.
Called up ordinary share capital
The called up ordinary share capital reserve comprises of the
nominal value of the issued share capital of the Company.
Share premium
The share premium reserve comprises of the excess of monies
received in respect of share capital over the nominal value of
shares issued.
Share based payment reserve
The share based payment reserve arises on the grant of share
options to directors and consultants under the share options
plan.
Retained deficit
Retained deficit comprises accumulated losses in the current and
prior financial years.
ARKLE RESOURCES PLC
CONSOLIDATED CASH FLOW STATEMENT
FOR THE FINANCIAL YEARED 31 DECEMBER 2020
2020 2019
EUR EUR
CASH FLOW FROM OPERATING ACTIVITIES
Loss for the financial year (1,095,928) (313,860)
Impairment of exploration and evaluation assets 330,000 -
Share based payments charge 42,679 6,679
Fair Value movement of warrants 441,829 18,644
Foreign exchange (4,847) (235)
(286,267) (288,772)
MOVEMENTS IN WORKING CAPITAL
(Decrease)/Increase in trade and other payables (30,688) 70,475
(Increase)/Decrease in other receivables (18,059) 19,489
NET CASH USED IN OPERATING ACTIVITIES (335,014) (198,808)
CASH FLOW FROM INVESTING ACTIVITIES
Payments for exploration and evaluation (218,247) (124,719)
NET CASH USED IN INVESTING ACTIVITIES (218,247) (124,719)
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from issue of equity shares 1,254,049 256,892
Share issue expenses (60,429) -
NET CASH FROM FINANCING ACTIVITIES 1,193,620 256,892
NET INCREASE/(DECREASE) IN CASH AND CASH
EQUIVALENTS 640,359 (66,635)
Cash and cash equivalents at beginning
of financial year 39,631 106,031
Effect of exchange rate changes on cash held in foreign currencies 4,847 235
Cash and cash equivalents at end
of financial year 684,837 39,631
Notes:
1. Accounting Policies
There were no changes in accounting policies from those used to
prepare the Group's Annual Report for financial year ended 31
December 2019. The financial statements have been prepared in
accordance with International Financial Reporting Standards (IFRSs)
as adopted by the European Union.
2. Loss per Share
2020 2019
EUR EUR
Loss per share - Basic and Diluted (0.50c) (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:
2020 2019
EUR EUR
Loss for the year attributable to equity holders
of the parent (1,095,928) (313,860)
2020 2019
No. No.
Weighted average number of ordinary shares
for the
purpose of basic earnings per share 220,039,097 129,085,292
Basic and diluted loss per share is the same as the effect of
the outstanding share options and warrants is anti-dilutive.
3. Going Concern
The Group and Company incurred a loss for the financial year of
EUR1,095,928 (2019: EUR313,860) and the Group had net current
liabilities of EUR376,102 (2019: net current liabilities
EUR182,501) at the balance sheet date leading to concern about the
Company and Group's ability to continue as a going concern.
The Group and Company had a cash balance of EUR684,837 (2019:
EUR39,631) and EUR684,510 (2019: EUR39,504) respectively, at the
balance sheet date.
Included in current liabilities is an amount of EUR127,500
(2019: EUR82,500) owed to key management personnel in respect of
remuneration due at the balance sheet date. Key management have
confirmed that they will not seek settlement of these amounts in
cash for a period of at least one year after the date of approval
of the financial statements or until the Group has generated
sufficient funds from its operations after paying its third party
creditors.
The directors have prepared cashflow projections for a period of
at least twelve months from the date of approval of these financial
statements. The cashflow projections include any anticipated
impacts of the Covid-19 pandemic on the Group and Company as well
as the minimum spend/cash call requirements in relation to licenses
held by the Group. As the Group and the Company are not revenue or
cash generating they rely on raising capital from the public
market. The cash flow projections prepared by the Group and Company
indicate that additional finances will be required to meet the
obligations of the Group and Company for a period of at least
twelve months from the date of approval of these financial
statements. The directors are confident that additional capital can
be raised as required. The Group completed capital raisings during
the year.
As in previous years the Directors have given careful
consideration to the appropriateness of the going concern basis in
the preparation of the financial statements and believe the going
concern basis is appropriate for these financial statements. The
financial statements do not include any adjustment to the carrying
amount, or classification of assets and liabilities, if the Company
or Group was unable to continue as a going concern.
4. Intangible Assets
Exploration and Evaluation: 2020 2019
EUR EUR
Cost:
At 1 January 3,445,710 3,314,312
Additions 257,778 131,398
Impairment (330,000) -
At 31 December 3,373,488 3,445,710
Carrying amount:
At 31 December 3,373,488 3,445,710
In 2012 the Group entered into an agreement with Teck Ireland
Limited ("Teck"), a subsidiary of Teck Resources Limited, which
gave Teck the option of earning a 75% interest in licences held by
the Group in Cavan/Meath by spending EUR1.35 million on the
licences in order to earn the option to acquire 75% interest. As
per the agreement the licences had been transferred into a new
company, Oldcastle Zinc Limited. As at 31 December 2019 Teck had
completed EUR1.35 million worth of expenditure to give them a total
of 75% in the company.
On 10 November 2020, the Group and Teck Ireland Limited agreed
to terminate the Oldcastle agreement and dissolve the joint
venture. Accordingly, the directors have impaired in full all
expenditure relating to the Oldcastle licences, resulting in an
impairment charge of EUR330,000 in the current year.
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 31 December 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:
The Group's exploration activities are subject to a number of
significant and potential risks including:
- uncertainties over development and operational risks;
- compliance with licence obligations;
- 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 31 December 2020 the
directors are satisfied that the value of the intangible asset is
not less than carrying value.
Segmental Analysis
2020 2019
EUR EUR
Limerick 1,600,424 1,537,931
Oldcastle - 330,000
Rest of Ireland 1,773,064 1,577,779
3,373,488 3,445,710
5. Share Capital and Share Premium
2020 2019
EUR EUR
Authorised:
500,000,000 Ordinary shares of EUR0.0025 each
(2019: EUR0.01) 5,000,000 5,000,000
500,000,000 Deferred shares of EUR0.0075 each
(2019:Nil)
Deferred Shares - nominal value of EUR0.0075
Share Share
Number Capital Premium
EUR EUR
At 22 April 2020 132,311,593 992,337 -
31 December 2020 132,311,593 992,337 -
Ordinary Shares - nominal value of EUR0.0025 (2019: EUR0.01)
Allotted, Called-Up and Fully Paid:
Share Share
Number Capital Premium
EUR EUR
At 1 January 2019 113,911,593 1,139,116 6,136,298
Issued during the financial year 18,400,000 184,000 72,892
At 31 December 2019 132,311,593 1,323,116 6,209,190
Transfer to deferred shares - (992,337) -
Issued during the financial year 164,733,333 411,833 396,491
31 December 2020 297,044,926 742,612 6,605,681
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, refer to Note 7 below.
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 22 April 2022,
refer to Note 7 below.
On 22 April 2020 the authorised shares of the Company were
subdivided via special resolution in 500,000,000 deferred shares of
0.75 cent each and 500,000,000 ordinary shares of 0.25 cent
each.
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.
On 17 August 2020, a total of 75,000,000 shares were issued at a
price of 0.8p 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 1.2p per share until 7 September 2022,
refer to Note 7 below.
On 3 November 2020, a total of 4,000,000 shares were issued on
the exercise of 4,000,000 warrants at a price of 0.5p per share to
provide additional working capital and fund development costs.
On 7 December 2020, a total of 2,000,000 shares were issued on
the exercise of 2,000,000 warrants at a price of 0.5p per share to
provide additional working capital and fund development costs.
6. Share Based Payments
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.
OPTIONS
2020 2020 2019 2019
Options Weighted average exercise Options Weighted average exercise
price in pence price in pence
Outstanding at beginning of
the financial year 2,800,000 2.276 2,800,000 2.276
Granted during the financial
year 10,300,000 0.93 - -
----------- ----------------------------- ---------- ------------------------------
Outstanding at the end of the
financial year 13,100,000 1.22 2,800,000 2.276
=========== ============================= ========== ==============================
Exercisable at the end of the
financial year 13,100,000 1.22 2,800,000 2.276
=========== ============================= ========== ==============================
On 19 May 2020 a total of 9,000,000 options with an exercise
price of 0.95p per option were granted to the directors with a fair
value of EUR71,156. The fair value was calculated using the
Black-Scholes valuation model.
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 83.98%
Expected life 7 years
Risk free rate 0.1%
Expected dividends none
On 16 September 2020 a total of 1,300,000 options with an
exercise price of 0.80p per option were granted to individuals who
have performed services for the Group with a fair value of
EUR11,054. The fair value was calculated using the Black-Scholes
valuation model.
The inputs into the Black-Scholes valuation model were as
follows:
Weighted average share price at date of grant (in pence) 1.0p
Weighted average exercise price (in pence) 0.80p
Expected volatility 84.75%
Expected life 7 years
Risk free rate 0.1%
Expected dividends none
Expected volatility was determined by management based on their
cumulative experience of the movement in share prices over the
years.
The terms of the options granted do not contain any market
conditions within the meaning of IFRS 2.
The Group capitalised expenses of EUR39,531 and expensed costs
of EUR42,679 relating to equity-settled share-based payment
transactions during the financial year.
7. Warrants
Fair Value
2020 2019
EUR EUR
At 1 January 18,644 -
FV of warrants issued during the year at grant date 445,725 18,644
Movement in fair value 478,633 -
-------- -------
At 31 December 906,198 18,644
======== =======
Number
2020 2020 2019 2019
Warrants Weighted average exercise Warrants Weighted average exercise
price in pence price in pence
Outstanding at beginning of
the financial year 46,203,312 4.7 39,431,219 5.9
Granted during the
financial year 125,400,000 1.4 18,400,000 1.8
Expired during the
financial year (46,203,312) 4.7 (11,627,607) 4.41
Exercised during the
financial year (6,000,000) 0.5 - -
------------- ---------------------------- ------------- ----------------------------
Outstanding and exercisable
at the end of the
financial year 119,400,000 1.4 46,203,312 4.7
============= ============================ ============= ============================
On 27 March 2020 a total of 50,400,000 warrants with an exercise
price of 0.5p per warrant were granted as part of the placing with
a fair value of EUR160,396. On 31 December 2020 the fair value for
the warrants were EUR414,200. The loss due to the movement in fair
value of EUR253,805 was expensed to the Consolidated Statement of
Comprehensive Income. The fair value was calculated using the
Black-Scholes valuation model.
The inputs into the Black-Scholes valuation model as at 31
December 2020 were as follows:
Weighted average share price at 31 December 2020 (in pence) 1.18p
Weighted average exercise price (in pence) 0.50p
Expected volatility 106.185%
Expected life 1.25 years
Risk free rate 0.1%
Expected dividends none
On 17 August 2020 a total of 75,000,000 warrants with an
exercise price of 1.2p per warrant were granted as part of the
placing with a fair value of EUR285,329. On 31 December 2020 the
fair value for the warrants were EUR510,157. The loss due to the
movement in fair value of EUR224,828 was expensed to the
Consolidated Statement of Comprehensive Income. The fair value was
calculated using the Black-Scholes valuation model.
The inputs into the Black-Scholes valuation model were as
follows:
Weighted average share price at 31 December 2020 (in pence) 1.18p
Weighted average exercise price (in pence) 1.2p
Expected volatility 105.23%
Expected life 1.6 years
Risk free rate 0.1%
Expected dividends none
On 8 March 2020, a total of 27,803,312 warrants at a price of 7p
per warrant expired. On 11 September 2020, a total of 18,400,000
warrants at a price of 1.8p, with a fair value of EUR18,644
expired.
During November and December 2020, a total of 6,000,000 warrants
with a fair value of EUR18,160 were exercised at a price of 0.5p
per warrant.
8. Post Balance Sheet Events
There are no material post balance sheet events affecting the
Group.
9. Annual General Meeting
The Company's Annual General Meeting will be held at held at the
Hotel Riu Plaza The Gresham, 23 O'Connell Street Upper, North City
Dublin, D01 C3W7, Ireland on 27 July 2021 at 12.30pm (the
"AGM").
We are closely monitoring the Coronavirus (COVID-19) situation.
The Board takes its responsibility to safeguard the health of its
shareholders, stakeholders and employees very seriously and so
certain measures will be put in place for the AGM in response to
the COVID-19 pandemic. Details of these measures will be provided
in a letter that will be attached to the Notice of AGM.
General Information
The financial information set out above does not constitute the
Company's financial statements for the year ended 31 December 2020.
The financial information for 2019 is derived from the financial
statements for 2019 which have been delivered to the Companies
Registration Office. The auditors have reported on 2019 statements;
their report was unqualified with an emphasis of matter in respect
of considering the adequacy of the disclosures made in the
financial statements concerning the valuation of intangible assets,
investment in subsidiaries and amounts due by group undertakings.
The financial statements for 2020 will be delivered to the
Companies Registration Office.
A copy of the Company's Annual Report and Accounts for 2020 will
be mailed to all shareholders shortly and will also be available
for collection from the Company's registered office, 162 Clontarf
Road, Dublin 3, Ireland. The annual report will shortly be
available for viewing at Arkle's website at
www.arkleresources.com
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