TIDMARK
RNS Number : 4419N
Arkle Resources PLC
30 September 2021
30(th) September 2021
Arkle Resources PLC
("Arkle" or the "Company")
Interim Statement for the period ended 30 June 2021
Chairman's Statement
Arkle is an active gold and zinc explorer focused on Ireland
(Exhibit 1) -
http://www.rns-pdf.londonstockexchange.com/rns/4419N_1-2021-9-29.pdf
We believe the current high prices for gold and zinc are being
overlooked by investors particularly in AIM shares. Gold at $1,740
per ounce, or over $55 US per gram, is very attractive to miners.
Zinc is over $3,000 per ton. This is very profitable for existing
zinc mining and is an incentive to explorers, against the economic
turmoil of recent years which has significantly reduced exploration
activities.
The economic risk/reward of investing in mineral exploration
should be more attractive, but investors are attaching far higher
risks to the potential reward.
Gold
The principal focus of activity is the Mine River project on the
Wexford/Wicklow borders where ongoing drilling has produced some
spectacular results and greatly extended the mineralised zones
around the Tombreen area.
Arkle has been exploring the Wexford/Wicklow gold trend for some
years. Narrow vein gold exploration is a painstaking business where
veins pinch and swell and can disappear due to faulting and
folding. Irish vein gold is often "nuggety" in nature which means
exactly what is says, much of the gold is in nuggets. Drilling
needs to find the gold bearing veins and then the geologists need
to interpret the results. Very high grades usually means the drill
hole hit a nugget or nuggets. Lower grades can mean the drill hole
missed the nuggets by millimetres, but there may be gold there.
Repeated soil sampling, geophysical and drilling campaigns has
identified a 15km trend along the Wicklow hills. We have narrowed
the high grade areas down to a 3km stretch between two areas:
Knocknalour and Tombreen. Refined soil sampling and trenching
between 2018 and 2020 identified new mineralised zones particularly
around Tombreen. This is the location of the current drilling
programme which has been twice extended due to positive results.
Tombreen West, some 900 metres west from the historic drilling at
Tombreen Main returned gold mineralisation in three drill holes.
Reviewing these results as well as drilling results from deeper
drilling at Tombreen Main suggested further gold veins at depths
below 100 metres in Tombreen West. Drilling to 200 metres is
ongoing.
The rig moved to Tombreen Main where some excellent results were
obtained including the spectacular hole 21-TB-11 which returned 0.5
metres at 51.6 g/t in a 2.5 metre zone averaging 12.13 g/t.
Additional step out drilling is planned here.
While awaiting drilling results, the rig moved to drill Anomaly
A, (Exhibit 2) -
http://www.rns-pdf.londonstockexchange.com/rns/4419N_2-2021-9-29.pdf
a recently discovered but never drilled anomaly, 300 metres
Southwest of Tombreen Main. Visual inspection of the core from the
first drill hole indicated mineralisation at a number of levels.
Step out holes are underway.
The early results from Anomaly A have encouraged us to trench
Anomalies B and C Southwest of Tombreen West (Exhibit 2) -
http://www.rns-pdf.londonstockexchange.com/rns/4419N_2-2021-9-29.pdf
. This drilling is planned for October 2021.
We will need to pause the drilling programme in the near future
to analyse and evaluate what we have found but we are very
encouraged by the results so far.
At Inishowen there had been a lull in exploration following the
successful drilling campaign in 2017. Subsequent prospecting in the
years that followed did not identify the extension of the veins at
Meeneragh or find other significant new gold targets in the area.
We then introduced new technology. The soil sampling technique that
was born out of the Mine River project in 2019 which proved to be
extremely successful was then deployed at Inishowen. The strategy
was twofold: find the 'lost veins' and identify new areas for
follow up. The approach paid off following a trenching programme at
the end of 2020. Not only did we discover new areas for follow up
but we found new gold bearing outcrops and the extension of the
'lost veins' with grades as high as 40.7g/t gold. This programme is
deferred due to the focus on Wexford/Wicklow and while we wait for
state approvals.
Zinc
Stonepark was for a long time the flagship project for Arkle.
Over 180 holes were drilled discovering over 5 million tons grading
over 11 per cent. zinc and lead. Among zinc discoveries worldwide,
this is high grade. The mineralisation is in three separate zones
and is adjacent to the large, 45 million ton plus, Pallas Green
zinc discovery owned by Glencore.
Arkle is a minority partner (23.44%) in this project with Group
Eleven, a Toronto listed zinc explorer, controlling the balance.
Group Eleven, which is also the operator, believes that a
geological trend containing zinc and lead runs Southeast to
Northwest from Ballywire about 20km Southeast of Stonepark through
to Stonepark and Pallas Green. Group Eleven controls the ground to
the Southeast of the five Stonepark licences and have some very
strong drilling results at Ballywire and at Carrickittle. In 2019
Group Eleven drilled Kilteely on the Stonepark licences close to
the border with Carrickittle with positive results. The
mineralisation discovered was deeper than that at Stonepark.
A recently issued update by Group Eleven improved the
prospectively of the Kilteely ground. Magnetic surveys confirmed
the Northwest trend running from Ballywire through Carrickittle and
Kilteely and on to the discoveries at Stonepark and Pallas Green.
Group Eleven expects to drill in the Carrickittle area in the
coming weeks Group Eleven intend to drill on the Stonepark licences
in Q1 2022. It is the current intention of Arkle to pay their
share. It is important to point out that Arkle can agree to
participate or dilute.
In 2020 a proposal to acquire and rapidly drill the Stonepark
ground was received. The proposal was acceptable to Arkle but not
to Group Eleven. Arkle has protection in this area in that it has a
pre-emption right on any proposed buyout.
Future
The future looks bright. We are going to continue our investment
in gold and zinc exploration. We have adequate funds to meet
current and expected exploration expenditure.
John Teeling
Chairman
29(th) September 2021
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 Adviser and 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
Financial Information (Unaudited)
Condensed Consolidated Statement of Comprehensive Year
Income Six Months Ended Ended
30 June 30 June 31 Dec
21 20 20
unaudited unaudited audited
EUR'000 EUR'000 EUR'000
Administrative expenses (148) (226) (324)
Impairment of exploration and evaluation
assets - - (330)
----------------- ---------- ---------
OPERATING LOSS (148) (226) (654)
Gain/(Loss) due to fair value volatility
of warrants 185 - (442)
----------------- ---------- ---------
PROFIT/(LOSS) BEFORE TAXATION 37 (226) (1,096)
Income tax expense - - -
PROFIT//(LOSS) FOR THE PERIOD AND TOTAL COMPREHENSIVE
INCOME 37 (226) (1,096)
================= ========== =========
PROFIT/(LOSS) PER SHARE - basic and diluted 0.01c (0.14c) (0.50c)
================= ========== =========
30 June 30 June 31 Dec
Condensed Consolidated Balance Sheet 21 20 20
unaudited unaudited audited
EUR'000 EUR'000 EUR'000
NON-CURRENT ASSETS
Intangible Assets 3,514 3,607 3,373
----------------- ---------- ---------
CURRENT ASSETS
Other receivables 61 11 22
Cash and cash equivalents 571 252 685
----------------- ---------- ---------
632 263 707
----------------- ---------- ---------
TOTAL ASSETS 4,146 3,870 4,080
----------------- ---------- ---------
LIABILITIES
CURRENT LIABILITIES
Trade and other payables (294) (180) (177)
Warrants (653) (18) (906)
----------------- ---------- ---------
NET CURRENT LIABILITIES (315) 65 (376)
NET ASSETS 3,199 3,672 2,997
================= ========== =========
EQUITY
Share Capital - Deferred Shares 992 992 992
Share Capital - Ordinary Shares 765 540 742
Share Premium 6,680 6,557 6,606
Share based remuneration reserve 127 123 127
Retained deficit (5,365) (4,540) (5,470)
TOTAL EQUITY 3,199 3,672 2,997
================= ========== =========
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 2020 - 1,323 6,209 45 (4,314) 3,263
Sub-division of shares 992 (992) - - - -
Share options granted - - - 78 - 78
Issue of shares - 209 348 - - 557
Loss for the period - - - - (226) (226)
As at 30 June 2020 992 540 6,557 123 (4,540) 3,672
------------- ------------ ----------------- ---------- --------- --------
Share options granted - - - 4 - 4
Issue of shares - 202 49 - - 251
Share issue expenses - - - - (60) (60)
Loss for the period - - - - (870) (870)
As at 31 December 2020 992 742 6,606 127 (5,470) 2,997
------------- ------------ ----------------- ---------- --------- --------
Issue of shares - 23 74 - - 97
Fair value of warrants
exercised - - - - 68 68
Loss for the period - - - - 37 37
As at 30 June 2021 992 765 6,680 127 (5,365) 3,199
============= ============ ================= ========== ========= ========
Condensed Consolidated Cash Flow Six Months Ended Year Ended
30 June 30 June 31 Dec
21 20 20
unaudited unaudited audited
EUR'000 EUR'000 EUR'000
CASH FLOW FROM OPERATING ACTIVITIES
Profit/(Loss) for the year 37 (226) (1,096)
Impairment of exploration and evaluation
assets 0 0 330
Share based payments charge 0 35 42
Fair value movement of warrants (185) 0 442
Foreign exchange (27) 0 (5)
---------- ---------- -----------
(175) (191) (287)
Movements in working capital 78 (36) (49)
---------- ---------- -----------
NET CASH USED IN OPERATING ACTIVITIES (97) (227) (336)
CASH FLOW FROM INVESTING ACTIVITIES
Payments for exploration and evaluation (141) (118) (218)
---------- ---------- -----------
NET CASH USED IN INVESTING ACTIVITIES (141) (118) (218)
---------- ---------- -----------
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from issue of equity shares 97 557 1,254
Share issue expenses 0 0 (60)
---------- ---------- -----------
NET CASH FROM FINANCING ACTIVITIES 97 557 1,194
---------- ---------- -----------
NET (DECREASE)/INCREASE IN CASH AND CASH
EQUIVALENTS (141) 212 640
Cash and Cash Equivalents at beginning
of the period 685 40 40
Effects of exchange rate changes on cash
held in foreign currencies 27 0 5
CASH AND CASH EQUIVALENTS AT OF THE
PERIOD 571 252 685
========== ========== ===========
Notes:
1. INFORMATION
The financial information for the six months ended 30 June 2021
and the comparative amounts for the six months ended 30 June 2020
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 2020.
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
2020, 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
21 20 20
EUR EUR EUR
Profit/(Loss) per share - Basic
and Diluted 0.01c (0.14c) (0.50c)
============== ============== ==============
Basic profit/(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
Profit/(Loss) for the year attributable
to equity holders of the parent 37 (226) (1,096)
============== ============== ==============
Weighted average number of ordinary
shares for the purpose of basic
earnings per share 305,051,947 166,401,091 220,039,097
============== ============== ==============
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 21 30 June 20 31 Dec 20
Exploration and evaluation assets: EUR'000 EUR'000 EUR'000
Cost at 1 January 3,373 3,446 3,446
Additions 141 161 258
Impairment - - (330)
----------- ----------- ----------
Closing Balance 3,514 3,607 3,373
=========== =========== ==========
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 prior 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 30 June 2021 was owned 23.44% (2020: 23.44%) by Limerick
Zinc Limited (subsidiary of Arkle Resources plc) and 76.56% (2020:
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 2021, the directors
are satisfied that the value of the intangible asset is not less
than carrying value.
30 June 21 30 June 20 31 Dec 20
Segmental Analysis EUR'000 EUR'000 EUR'000
Limerick 1,600 1,600 1,600
Oldcastle - 330 -
Rest of Ireland 1,914 1,677 1,773
----------- ----------- ----------
Closing Balance 3,514 3,607 3,373
=========== =========== ==========
5. SHARE CAPITAL AND SHARE PREMIUM
On 22 April 2020 the Company 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 - nominal value
of 0.75c
132,311,593 deferred shares of
0.75c each 132,311,593 992 -
============ ========= ==============
Ordinary Shares - nominal value
of 0.25c
Balance at 1 January 2020 132,311,593 1,323 6,209
Transfer to deferred shares - (992) -
Issued during the period 83,733,333 209 348
Balance at 30 June 2020 216,044,926 540 6,557
Issued during the period 81,000,000 202 49
------------ --------- --------------
Balance at 31 December 2020 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
============ ========= ==============
Movement in shares
On 19 January 2021, a total of 3,000,000 shares were issued on
the exercise of 3,000,000 warrants at a price of 0.5p per share to
provide additional working capital and fund development costs.
On 19 January 2021, a total of 5,937,500 shares were issued on
the exercise of 5,937,500 warrants at a price of 1.2p per share to
provide additional working capital and fund development costs.
6. SHARE BASED PAYMENTS - OPTIONS
30 June 21 Weighted average 30 June 20 Weighted average 31 Dec 20 Weighted average
exercise price in exercise price in exercise price in
pence pence pence
'000 '000 '000
Outstanding at
beginning of
period 13,100 1.22 2,800 2.276 2,800 2.276
Granted during the
period - 9,000 0.95 10,300 0.93
Expired during the - - - - -
period
----------- ------------------ ----------- ------------------ ---------- ------------------
Outstanding at end
of period 13,100 1.22 11,800 1.26 13,100 1.22
=========== ================== =========== ================== ========== ==================
Exercisable at end
of period 13,100 1.22 11,800 1.26 13,100 1.22
=========== ================== =========== ================== ========== ==================
7. SHARE BASED PAYMENTS - WARRANTS
Fair Value
30 June 21 30 June 20 31 Dec 20
EUR'000 EUR'000 EUR'000
At 1 January 906 18 18
FV of warrants issued at grant date - - 446
Exercised (68) - -
Movement in fair value (185) - 442
----------- ----------- ----------
Closing Balance 653 18 906
=========== =========== ==========
Number
30 June 21 30 June 20 31 Dec 20
'000 '000 '000
Outstanding at beginning of period 119,400 46,203 46,203
Granted during the period - 50,400 125,400
Exercised during the period (8,937) - (6,000)
Expired during the period - (27,803) (46,203)
----------- ----------- ----------
Closing Balance 110,463 68,800 119,400
=========== =========== ==========
On 1 January 2021 a total of 44,400,000 warrants with an
exercise price of 0.5p per warrant were outstanding. On 19 January
2021 a total of 3,000,000 warrants with a fair value of EUR27,665
were exercised. The fair value for the remaining 41,400,000
warrants as at 30 June 2021 was EUR299,988. The gain due to the
movement in fair value of EUR68,387 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 30 June
2021 were as follows:
Weighted average share price at 30 June
2021 (in pence) 1.00p
Weighted average exercise price (in pence) 0.50p
Expected volatility 125.93%
Expected life 0.81 years
Risk free rate 0.1%
Expected dividends None
On 1 January 2021 a total of 75,000,000 warrants with an
exercise price of 1.2p per warrant were outstanding. On 19 January
2021 a total of 5,937,500 warrants with a fair value of EUR40,345
were exercised. The fair value for the remaining 69,062,500
warrants as at 30 June 2021 was EUR353,199. The gain due to the
movement in fair value of EUR116,614 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 30 June
2021 (in pence) 1.00p
Weighted average exercise price (in pence) 1.2p
Expected volatility 119.42%
Expected life 1.19 years
Risk free rate 0.1%
Expected dividends none
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 2021 was
approved by the Directors on 29(th) September 2021.
10. The Interim Report will be available on Arkle Resources
PLC's website www.arkleresources.com
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