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

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END

IR BLGDCUBDDGBC

(END) Dow Jones Newswires

September 30, 2021 02:00 ET (06:00 GMT)

Arkle Resources (LSE:ARK)
Historical Stock Chart
From Nov 2021 to Dec 2021 Click Here for more Arkle Resources Charts.
Arkle Resources (LSE:ARK)
Historical Stock Chart
From Dec 2020 to Dec 2021 Click Here for more Arkle Resources Charts.