TIDMEEE
RNS Number : 5253U
Empire Metals Limited
30 July 2020
Empire Metals Ltd / AIM: EEE / Sector: Natural Resources
30 July 2020
Empire Metals Limited ('EEE' or the 'Company')
Interim Results
Empire Metals Ltd ('EEE' or the 'Company'), the natural resource
exploration and development company, is pleased to announce its
interim results for the six-month period ended 30 June 2020.
Chairman's Statement
The first half of 2020 has been productive for the Company and
has seen an expansion of our project portfolio, a refocus on our
growth strategy and a rebranding to Empire Metals Limited. I am
confident that the developments and achievements made over the past
six months have now laid the foundations for positive growth
throughout the remainder of 2020 and onwards.
The period started encouragingly in January 2020, with some of
the uncertainty surrounding the advancement of our Bolnisi Project
in Georgia being removed with the confirmation of tenure from the
National Agency of Mines ('NAM') for two key deposits in the
Bolnisi Project licence area, namely Kvemo Bolnisi East and
Dambludi. This was a significant milestone in EEE's ongoing efforts
to obtain the extension to the permit in Georgia. The Company plans
to recommence a work programme, directed primarily on Kvemo Bolnisi
East, the target which has been the focus of much of the Company's
investment to date, once the necessary amendments to the licence to
allow work to re-commence on these two projects have been processed
by the Georgian authorities.
As previously announced, an appeal process is currently underway
to challenge NAM's position on the remainder of the Bolnisi Project
licence area and Empire will provide further updates as
appropriate.
The most notable developments during the period have happened
outside of Georgia, with Empire making significant progress with
its strategy to identify compelling new assets through which the
Company can add short term value. As announced on 28 February 2020,
EEE raised GBP600,000 by way of a placing and subscription of new
ordinary shares with new and existing shareholders in the Company,
to advance this process.
After evaluating a number of potential opportunities, on 27
April 2020, EEE announced that it had entered into a Binding Heads
of Agreement with ASX listed Artemis Resources Limited ('Artemis')
to acquire a 41% interest (the 'Acquisition') in the Munni Munni
Palladium Project in the West Pilbara ('Munni Munni'), Western
Australia and has first right of refusal on a further 29% interest
in the project.
Munni Munni comprises four granted mining leases and an
exploration licence covering a 64km(2) tenement area. It is the
largest unexploited primary PGE resource in Australia and contains
the largest intrusion in the West Pilbara hosting a JORC-compliant
2004 Resource of 24Mt @ 2.9 g/t Platinum Group Element (PGE) and
gold (12.4Mt Measured, 9.8Mt Indicated, and 1.4Mt Inferred),
containing 1,140,000 ounces palladium, 830,000 ounces platinum,
152,000 ounces gold and 76,000 ounces rhodium. The teams at Artemis
and Empire Metals are making progress toward the completion of the
Acquisition and in the meantime agreed to commence with the planned
drilling programme at the project in order to take advantage of the
drilling season. This programme was designed to extend primary reef
mineralisation and test historical assay grades from diamond
drilling using RC drilling, test for the presence of a second reef
below the primary PGE reef and generate data that may contribute to
a JORC Code 2012 Mineral Resources Estimate in the future. On 30
June 2020, Empire announced the completion of the RC drilling of 12
drill holes for 1,928 metres, with drill holes spread through the
entire upper portion of the mineralisation, to a maximum dept of
200 metres. Samples were sent to ALS Global and the Company is
expecting to receive the results in due course.
Unfortunately, as announced by Empire on Monday 20 July 2020,
Artemis was served a writ of summons on Friday 17 July 2020 issued
by the Supreme Court of Western Australia as filed by Platina
Resources Limited ('Platina') , the 30% joint venture partner to
Artemis on the Munni Munni Project. Platina claims that Artemis and
its wholly owned subsidiary, MMPL, have breached the Heads of
Agreement entered into by the parties relating to the Munni Munni
Joint Venture as a result of the Company entering into the
agreement with Empire.
Artemis denies Platina's claim and state that they intend to
vigorously defend their position, and wish to move forwards with
Empire to develop the Mummi Munni project.
The Munni Munni Project satisfies EEE's objective of de-risking
the Company's growth strategy by diversifying away from a single
jurisdiction investment, combining an exceptional project with an
attractive and mature investment environment. The Acquisition
represents the start of a new chapter for Empire Metals and the
Board continues to actively review other opportunities with the
intention of identifying other compelling new assets, which meet
its stringent investment criteria and have the potential to add
short-term value. I look forward to providing further updates on
this process in due course.
Financial
For the six-month period ended 30 June 2020 the Group is
reporting a pre-tax profit of GBP256,515 (six months ended 30 June
2019: loss of GBP377,327). The current period profit arises as a
result of the write back of exploration and evaluation expenditure
incurred at the joint venture level following the reinstatement of
the Kvemo Bolnisi East and Dambludi licence areas. EEE's share of
profit from this write back at the joint venture company was
GBP471,307.
The Group's net cash balance as at 30 June 2020 was GBP364,369
(year ended 31 December 2019: GBP50,840).
Outlook
This has been significant period for EEE which has delivered
substantial developments, after what was a challenging 2019. The
Company has been strengthened both financially and corporately in
2020 and on behalf of the Board, I am optimistic about our ability
to deliver on our key strategic aims this year. We are of course
cognisant of the unprecedented global disruption which the COVID-19
pandemic is creating for communities and economies worldwide,
however the Board has adopted a prudent and responsible approach to
both our financial and operational activities and we are confident
that EEE is well equipped to weather the current market
turbulence.
We look forward to reporting on our activities in Georgia and in
new jurisdictions over the coming weeks and months. I would like to
take this opportunity to thank our shareholders and my fellow
directors for their continued support as we look forward to a
bright future as Empire Metals Limited.
Neil O'Brien
Non-Executive Chairman
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.
**S**
For further information please visit
https://www.empiremetals.co.uk or contact:
Mike Struthers Empire Metals Ltd Company Tel: 020 7907
9327
Ewan Leggat S. P. Angel Corporate Nomad & Broker Tel: 020 3470
Finance LLP 0470
Soltan Tagiev S. P. Angel Corporate Nomad & Broker Tel: 020 3470
Finance LLP 0470
Damon Heath Shard Capital Partners Joint Broker Tel: 020 7186
LLP 9950
Susie Geliher St Brides Partners PR Tel: 020 7236
Ltd 1177
Beth Melluish St Brides Partners PR Tel: 020 7236
Ltd 1177
About Empire Metals Limited
Empire Metals Limited (formerly Georgian Mining Corporation) has
50% ownership of the Bolnisi Copper and Gold Project in Georgia,
situated on the prolific Tethyan Belt, a well-known geological
region and host to many high-grade copper-gold deposits and
producing mines. The Bolnisi concession covers an area of over 860
sq km and has a 30-year mining licence with a variety of targets
and projects ranging from greenfield exploration / target
definition phase through intermediate target-testing phases to more
advanced projects including Kvemo Bolnisi East which is due to
advance to Feasibility Study.
The acquisition of Munni Munni is a result of the Company's
ongoing assessments of the potential for expanding the Company's
portfolio through the addition of new assets which have the ability
to add value in the short term.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
6 months to 6 months
30 June 2020 to 30 June
Unaudited 2019 Unaudited
Notes GBP GBP
---------------------------------------------- ------- --------------- -----------------
Continuing operations
Revenue 1,204 83,145
Administration expenses (223,013) (400,296)
Foreign exchange 7,017 (8,184)
Operating Loss (214,792) (325,335)
---------------------------------------------- ------- --------------- -----------------
Share of profit from joint venture 5 471,307 -
Impairments - (51,992)
Profit/(Loss) Before Income Tax 256,515 (377,327)
---------------------------------------------- ------- --------------- -----------------
Income tax expense - -
---------------------------------------------- ------- --------------- -----------------
Profit/(Loss) for the period 256,515 (377,327)
---------------------------------------------- ------- --------------- -----------------
Profit/(Loss) attributable to:
* owners of the Parent 256,515 (377,327)
* non-controlling interests - -
---------------------------------------------- ------- --------------- -----------------
Profit/(Loss) for the period 256,515 (377,327)
---------------------------------------------- ------- --------------- -----------------
Other comprehensive income
Items that may be subsequently reclassified
to profit or loss
Currency translation differences - 1,022
---------------------------------------------- ------- --------------- -----------------
Total comprehensive income 256,515 (376,305)
---------------------------------------------- ------- --------------- -----------------
Attributable to:
* owners of the Parent 256,515 (376,305)
* non-controlling interests - -
---------------------------------------------- ------- --------------- -----------------
Total comprehensive income 256,515 (376,305)
---------------------------------------------- ------- --------------- -----------------
Earnings per share (pence) from continuing
operations attributable to owners of
the Parent - Basic and diluted 6 0.150 (0.324)
---------------------------------------------- ------- --------------- -----------------
CONDENSED CONSOLIDATED BALANCE SHEET
30 June 2020 31 December
Unaudited 2019 Audited
Notes GBP GBP
-------------------------------------- ------- -------------- ---------------
Non-Current Assets
Property, plant and equipment 3,052 17,882
Investments in Joint Ventures 5 497,488 -
500,540 17,882
-------------------------------------- ------- -------------- ---------------
Current Assets
Trade and other receivables 182,667 167,971
Cash and cash equivalents 364,369 50,840
-------------------------------------- ------- -------------- ---------------
547,036 218,811
-------------------------------------- ------- -------------- ---------------
Total Assets 1,047,576 236,693
-------------------------------------- ------- -------------- ---------------
Current Liabilities
Trade and other payables 74,859 91,191
-------------------------------------- ------- -------------- ---------------
Total Liabilities 74,859 91,191
-------------------------------------- ------- -------------- ---------------
Net Assets 972,717 145,502
-------------------------------------- ------- -------------- ---------------
Equity Attributable to owners of
the Parent
Share premium account 6 39,836,337 39,265,637
Reverse acquisition reserve (18,845,147) (18,845,147)
Other Reserves 138,014 138,014
Retained losses (20,156,487) (20,413,002)
-------------------------------------- ------- -------------- ---------------
Total equity attributable to owners
of the Parent 972,717 145,502
-------------------------------------- ------- -------------- ---------------
Non-controlling interest - -
-------------------------------------- ------- -------------- ---------------
Total Equity 972,717 145,502
-------------------------------------- ------- -------------- ---------------
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS'
EQUITY
Reverse
Share acquisition Other Retained Non-controlling Total
premium reserve Reserves losses Total interest equity
GBP GBP GBP GBP GBP GBP GBP
---------------- ------------ -------------- ----------- -------------- ----------- ----------------- -----------
As at 1
January
2019 38,904,337 (18,845,147) 136,020 (19,737,410) 457,800 - 457,800
----------------
Comprehensive
income
Loss for the
period - - - (377,327) (377,327) - (377,327)
---------------- ------------ -------------- ----------- -------------- ----------- ----------------- -----------
Other
comprehensive
income
Currency
translation
differences - - 1,022 - 1,022 - 1,022
---------------- ------------ -------------- ----------- -------------- ----------- ----------------- -----------
Total
comprehensive
income - - 1,022 (377,327) (376,305) - (376,305)
---------------- ------------ -------------- ----------- -------------- ----------- ----------------- -----------
Issue of
ordinary
shares 380,000 - - - 380,000 - 380,000
Issue costs (18,700) - - - (18,700) - (18,700)
Total
transactions
with owners 361,300 - - - 361,300 - 361,300
As at 30 June
2019 39,265,637 (18,845,147) 137,042 (20,114,737) 442,795 - 442,795
---------------- ------------ -------------- ----------- -------------- ----------- ----------------- -----------
Reverse
Share acquisition Other Retained Non-controlling Total
premium reserve Reserves losses Total interest equity
GBP GBP GBP GBP GBP GBP GBP
---------------- ------------ -------------- ----------- -------------- ----------- ----------------- -----------
As at 1
January
2020 39,265,637 (18,845,147) 138,014 (20,413,002) 145,502 - 145,502
----------------
Comprehensive
income
Profit/(Loss)
for the
period - - - 256,515 256,515 - 256,515
---------------- ------------ -------------- ----------- -------------- ----------- ----------------- -----------
Other
comprehensive
income
Currency
translation
differences - - - - - - -
---------------- ------------ -------------- ----------- -------------- ----------- ----------------- -----------
Total
comprehensive
income - - - 256,515 256,515 - 256,515
---------------- ------------ -------------- ----------- -------------- ----------- ----------------- -----------
Issue of
ordinary
shares 600,000 - - - 600,000 - 600,000
Issue costs (29,300) - - - (29,300) - (29,300)
Total
transactions
with owners 570,700 - - - 570,700 - 570,700
As at 30 June
2020 39,836,337 (18,845,147) 138,014 (20,156,487) 972,717 - 972,717
---------------- ------------ -------------- ----------- -------------- ----------- ----------------- -----------
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
30 June 30 June
2020 Unaudited 2019 Unaudited
GBP GBP
--------------------------------------------- ----------------- -----------------
Cash flows from operating activities
Profit/(Loss) before taxation 256,515 (377,327)
Adjustments for:
Depreciation 7,554 15,202
Gain on sale of PPE (12,724) -
Impairment of asset - 51,992
Share of profit on joint venture (471,307) -
Foreign exchange (7,017) (494)
Increase in trade and other receivables (7,679) (50,790)
Decrease in trade and other payables (16,332) (45,913)
Net cash used in operations (250,990) (407,330)
---------------------------------------------- ----------------- -----------------
Cash flows from investing activities
Loans granted to joint venture partners (26,181) (50,476)
Sale of property, plant & equipment 20,000 -
Additions to exploration and evaluation - -
intangibles
--------------------------------------------- ----------------- -----------------
Net cash used in investing activities (6,181) (50,476)
---------------------------------------------- ----------------- -----------------
Cash flows from financing activities
Proceeds from issue of shares 600,000 380,000
Cost of issue (29,300) (18,700)
---------------------------------------------- ----------------- -----------------
Net cash from financing activities 570,700 361,300
---------------------------------------------- ----------------- -----------------
Net (decrease) / increase in cash and cash
equivalents 313,529 (96,506)
Cash and cash equivalents at beginning
of period 50,840 525,354
Exchange differences on cash - -
--------------------------------------------- ----------------- -----------------
Cash and cash equivalents at end of period 364,369 428,848
---------------------------------------------- ----------------- -----------------
Major non-cash transactions
There were no major non-cash transactions in the period.
NOTES TO THE INTERIM FINANCIAL STATEMENTS
1. General Information
The principal activity of Empire Metals Limited ('the Company')
and its subsidiaries (together 'the Group') is the exploration and
development of precious and base metals. The Company's shares are
listed on the AIM Market of the London Stock Exchange. The Company
is incorporated in the British Virgin Islands and domiciled in the
United Kingdom. The Company was incorporated on 10 February 2010
under the name Gold Mining Company Limited. On 10 October 2016 the
Company changed its name from Noricum Gold Limited to Georgian
Mining Corporation and subsequently on 10 February 2020 changed its
name from Georgian Mining Corporation to Empire Metals Limited.
The address of the Company's registered office is Trident
Chambers, PO Box 146, Road Town, Tortola BVI.
2. Basis of Preparation
The condensed consolidated interim financial statements have
been prepared in accordance with the requirements of the AIM Rules
for Companies. As permitted, the Company has chosen not to adopt
IAS 34 "Interim Financial Statements" in preparing this interim
financial information. The condensed interim financial statements
should be read in conjunction with the annual financial statements
for the year ended 31 December 2019, which have been prepared in
accordance with International Financial Reporting Standards (IFRS)
as adopted by the European Union.
The interim financial information set out above does not
constitute statutory accounts. They have been prepared on a going
concern basis in accordance with the recognition and measurement
criteria of International Financial Reporting Standards (IFRS) as
adopted by the European Union. Statutory financial statements for
the year ended 31 December 2019 were approved by the Board of
Directors on 30 June 2020. The report of the auditors on those
financial statements was unqualified but included a material
uncertainty relating to going concern paragraph.
Going concern
The Directors, having made appropriate enquiries, consider that
adequate resources exist for the Group to continue in operational
existence for the foreseeable future and that, therefore, it is
appropriate to adopt the going concern basis in preparing the
condensed interim financial statements for the period ended 30 June
2020.
The factors that were extant at the 31 December 2019 are still
relevant to this report and as such reference should be made to the
going concern note and disclosures in the 2019 Annual Report.
Risks and uncertainties
The Board continuously assesses and monitors the key risks of
the business. The key risks that could affect the Group's
medium-term performance and the factors that mitigate those risks
have not substantially changed from those set out in the Group's
2019 Annual Report and Financial Statements, a copy of which is
available on the Group's website: https://www.empiremetals.co.uk .
The key financial risks are liquidity risk, foreign exchange risk,
credit risk, price risk and interest rate risk.
Critical accounting estimates
The preparation of condensed interim financial statements
requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities, income and
expenses, and disclosure of contingent assets and liabilities at
the end of the reporting period. Significant items subject to such
estimates are set out in note 4 of the Group's 2019 Annual Report
and Financial Statements. Actual amounts may differ from these
estimates. The nature and amounts of such estimates have not
changed significantly during the interim period.
3. Accounting Policies
The same accounting policies, presentation and methods of
computation have been followed in these condensed interim financial
statements as were applied in the preparation of the Group's annual
financial statements for the year ended 31 December 2019 except for
the impact of the adoption of the Standards and interpretations
described below and new accounting policies adopted as a result of
changes in the Group.
3.1 Changes in accounting policy and disclosures
(a) Accounting developments during 2020
(a) New and amended standards mandatory for the first time for
the financial periods beginning on or after 1 January 2020
As of 1 January 2020, the Company adopted the amedments to IFRS
3, IAS 1 and IAS 8. The transition to these standards had no
material impact on the Group.
b) New standards, amendments and interpretations in issue but
not yet effective or not yet endorsed and not early adopted
Standards, amendments and interpretations that are not yet
effective and have not been early adopted are as follows:
Standard Impact on initial application Effective date
---------- ------------------------------- -------------------
IAS 1 Classification of Liabilities * 1 January 2022
as Current or Non-Current.
------------------------------- -------------------
(*) Subject to EU endorsement
The Group is evaluating the impact of the new and amended
standards above which are not expected to have a material impact on
future Group financial statements s
4. Dividends
No dividend has been declared or paid by the Company during the
six months ended 30 June 2020 (2019: nil).
5. Joint venture
On 15 March 2018, the Company entered into a Deed of Variation
with its joint venture partner in Georgian Copper & Gold
('GCG') in relation to the ongoing operations of the operating
company, future work programmes and budgets. As a result, both
shareholders now have equal representation on the board of GCG and
therefore, from that date, the subsidiary was derecognised and the
ongoing 50% ownership accounted for as a joint venture.
Name of entity Address of the % of ownership Nature of relationship Measurement
registered office interest method
SI 2017/980
Georgian Copper 6 Saakadze Descent, 50 As above Equity
& Gold JSC 2(nd) Fl.
Tbilisi 0171, Georgia
On 28 January 2020 the Group announced that it had received
confirmation of tenure from the National Agency of Mines ('NAM')
for two key deposits in the Bolnisi Project licence area, namely
Kvemo Bolnisi East and Dambludi. As a result, the exploration and
evaluation expenditure related to these license areas, which was
previously impaired, has been reinstated. As such the carrying
value of the investment in GCG has also been uplifted by the
Company's share of profit for the period.
Summarised financial information of joint venture
31 December
30 June 2019
2020
------------------------------------ ----------- -------------
Property, plant and equipment 42,752 53,933
Cash 103 2,591
Intangibles 2,285,855 4,364
Other receivables 52,576 53,376
------------------------------------- ----------- -------------
Total assets 2,381,286 114,264
------------------------------------- ----------- -------------
Trade and other payables 246,837 210,830
Loan with GMC Investments Limited 979,883 955,222
------------------------------------- ----------- -------------
Total liabilities 1,226,720 1,166,052
------------------------------------- ----------- -------------
The joint venture generated a profit after tax of GBP2,215,265
for the period. The share of profit of the joint venture for the
period recognised was GBP1,107,633. As per IAS 28, the share of
profit can only be recognised in excess of the Company's share of
historic losses not recognised. As a result, the share of profit
recognised has been reduced by the Company's share of the joint
venture losses which it has not previously recognised, being
GBP636,326. There are no further unrecognised losses.
During the period, the Company loaned GCG GBP26,181 to finance
current operations.
The carrying value of the investment at 30 June 2020 is
summarised below:
Total
GBP
--------------------------------- -----------
As at 1 January 2020 -
Share of profit from joint
venture 1,107,633
Loans granted to joint venture 26,181
Recognition of unrecognised
losses from prior periods (636,326)
As at 30 June 2020 497,488
-----------
The Group has no obligation or commitments to contribute to any
losses in excess of the carrying value of the investment.
6. Share capital and share premium
Ordinary Share premium
Number of shares shares Total
GBP GBP GBP
-------------------- ------------------ ---------- --------------------- ------------
Issued and fully
paid
As at 1 January
2019 114,756,991 - 38,904,337 38,904,337
------------------ ---------- --------------------- ------------
Share issue -
23 May 2019 19,000,000 - 361,300 361,300
As at 30 June
2019 133,756,991 - 39,265,637 39,265,637
------------------ ---------- --------------------- ------------
As at 1 January
2020 133,756,991 - 39,265,637 39,265,637
------------------ ---------- --------------------- ------------
Share issue -
28 February 2020 60,000,000 - 570,700 570,700
As at 30 June
2020 193,756,991 - 39,836,337 39,836,337
------------------ ---------- --------------------- ------------
7. Loss per share
The calculation of the total basic earnings per share of 0. 150
pence (30 June 2019: loss of 0.324 pence) is based on the loss
attributable to equity owners of the parent company of GBP256,515
(30 June 2019: GBP377,327) and on the weighted average number of
ordinary shares of 174,636,112 (30 June 2019: 118,850,915) in issue
during the period.
No diluted earnings per share is presented as the effect on the
exercise of share options would be to decrease the loss per
share.
Details of share options that could potentially dilute earnings
per share in future periods are disclosed in the notes to the
Group's Annual Report and Financial Statements for the year ended
31 December 2019.
8. Fair value estimation
There are no financial instruments carried at fair value.
9. Fair value of financial assets and liabilities measured at amortised costs
Financial assets and liabilities comprise the following:
-- Trade and other receivables
-- Cash and cash equivalents
-- Trade and other payables
The fair values of these items equate to their carrying values
as at the reporting date.
10. Commitments
All commitments remain as stated in the Group's Annual Financial
Statements for the year ended 31 December 2019.
11. Events after the balance sheet date
There have been no events after the reporting date of a material
nature.
12. Approval of interim financial statements
The condensed interim financial statements were approved by the
Board of Directors on 29 July 2020.
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.
END
IR KKCBPPBKDPOB
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