TIDMARK
RNS Number : 8568N
Arkle Resources PLC
27 September 2019
27 September 2019
Arkle Resources PLC
("Arkle" or the "Company")
Interim Statement for the period ended 30 June 2019
Arkle Resources PLC (LON: ARK), formerly Connemara Mining
Company plc, the Irish gold and zinc exploration and development
company, is pleased to provide an interim report and unaudited
financial statements for the six months ended 30 June 2019.
Chairman's Statement
World stock markets are at or near all-time highs. Gold and zinc
prices are high. World economies are growing and unemployment is
low. Gold and Zinc mines have finite lives and without active
exploration shortfalls in output will occur. Yet all of this good
news is not reflected in the share prices of mining exploration
ventures.
Arkle, formerly Connemara Mining, is an active explorer in
Ireland with four ongoing projects;
- Zinc in Stonepark, Limerick
- Zinc in Oldcastle, Meath
- Gold in Mine River, Wicklow / Wexford
- Gold in Inishowen, Donegal
The two zinc projects are joint ventured, Stonepark with Group
Eleven a Toronto based explorer. Arkle holds a 23.44% participating
interest, Oldcastle is joint ventured with Teck Resources a world
leading base metal producer. Arkle holds a 25% participating
interest in this project.
Stonepark remains the flagship project with over 150 holes
drilled to date and an independent Inferred Resource of 5.1 million
tons. Stonepark lies adjacent to the very big (45.1m tons) zinc
deposit at Pallas Green.
Group Eleven, our partner, believes that there is a highly
prospective geological structure running across the southern part
of both the Stonepark and Pallas Green discoveries. Drilling
conducted during the year was inconclusive but one hole, at
Kilteely, produced good results. Additional drilling is required.
Arkle has the right to participate in all agreed expenditure up to
23.44% or it can elect to dilute depending on the proposed
programme.
The zinc price, in excess of US$2,000 is very profitable for
Irish zinc miners. This makes the Stonepark discovery an attractive
asset and some external interest has been shown. We do not believe
that the value of Stonepark is reflected in the Arkle price.
The Oldcastle block of five licences has attractive geology for
base metal discoveries. We joint ventured the blocks with Teck in
2012 who hold substantial ground in the Midlands of Ireland. Teck
have spent sufficient sums to earn into a 75% stake in the block.
Further spending will require Arkle to participate or dilute.
Results over the years, including recent drilling have found trace
zinc mineralisation, but nothing exciting. Teck are reviewing the
latest data.
Gold at US$1,500 an oz should make gold exploration an
attractive proposition. Development of the large gold deposit in
Tyrone, owned by Dalradian, moves forward at a glacial pace. A
decision to begin development would be a major boost for the
sector.
Arkle sought to replicate the Tyrone gold discoveries on ground
with similar geology at the Inishowen project in Donegal. Very
strong commercial grade results were found in the Meeneragh area
but not elsewhere. Using a fresh set of eyes, we have reviewed our
database and completed fieldwork leading to the identification of a
new target area between Meeneragh and the former silver-lead mine
at Glentogher. We will refine the analysis and do some more work
before drilling.
The rivers running through Wexford / Wicklow have been known to
contain gold for hundreds of years. However, finding the source has
proven elusive. At Mine River, we hold a significant block of
ground but our focus has been on the area around Tombreen. There is
a lot of scope for expansion. In recent months we have sampled some
of the ground on a tighter grid using an innovative and
cost-effective technique. The results are encouraging. More work
needs to be done to identify further drill targets. Some outside
interest is being shown in the results.
Where do we go from here? We will continue to refine drill
targets in Mine River and in Inishowen. We are in active
discussions with our partner in Stonepark, Group Eleven, on how to
proceed. A number of exciting options exist. The coming months will
be busy and I hope will enhance shareholder value.
John Teeling
Chairman
26 September 2019
Enquiries:
Arkle Resources PLC
John Teeling, Chairman +353 (0) 1 833 2833
Patrick Cullen, CEO +353 (0) 87 272 1748
+44 (0) 755 237 8208
SP Angel Corporate Finance
LLP
Matthew Johnson/Jamie Spotswood +44 (0) 203 470 0470
First Equity Limited
Jason Robertson +44 (0) 207 374 2212
Blytheweigh +44 (0) 207 138 3204
Julia Tilley +44 (0) 781 506 8387
Jane Lenton +44 (0) 742 756 1762
Teneo
Luke Hogg +353 (0) 1 661 4055
Alan Tyrrell +353 (0) 1 661 4055
Arkle Resources PLC
Financial Information (Unaudited)
Six Months Ended Year Ended
30 June 30 June 31 Dec
19 18 18
unaudited unaudited Audited
Condensed Consolidated Statement of Comprehensive
Income EUR'000 EUR'000 EUR'000
Continuing Operations
Administrative expenses (170) (160) (337)
---------- ---------- -----------
OPERATING LOSS (170) (160) (337)
Investment revenue 0 0 0
---------- ---------- -----------
LOSS BEFORE TAXATION (170) (160) (337)
Income tax expense 0 0 0
LOSS FOR THE PERIOD AND TOTAL COMPREHENSIVE
INCOME (170) (160) (337)
========== ========== ===========
LOSS PER SHARE - basic and
diluted (0.14c) (0.15c) (0.31c)
========== ========== ===========
Condensed Consolidated Balance 30 June 30 June 31 Dec
Sheet 19 18 18
unaudited unaudited Audited
EUR'000 EUR'000 EUR'000
NON-CURRENT ASSETS
Intangible Assets 3,362 3,218 3,314
---------- ---------- -----------
CURRENT ASSETS
Other receivables 15 44 24
Cash and cash equivalents 147 366 106
---------- ---------- -----------
162 410 130
---------- ---------- -----------
TOTAL ASSETS 3,524 3,628 3,444
---------- ---------- -----------
LIABILITIES
CURRENT LIABILITIES
Trade and other payables (130) (172) (137)
---------- ---------- -----------
NET CURRENT LIABILITIES 32 238 (7)
NET ASSETS 3,394 3,456 3,307
========== ========== ===========
EQUITY
Share Capital 1,323 1,139 1,139
Share Premium 6,209 6,077 6,136
Share based remuneration
reserve 32 4 32
Reserves (4,170) (3,764) (4,000)
TOTAL EQUITY 3,394 3,456 3,307
========== ========== ===========
Condensed Consolidated Statement of Changes
in Shareholders Equity
Called-up Share
Share Share Based Retained
Capital Premium Reserves Deficit Total
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
As at 1 January 2018 874 5,163 4 (3,604) 2,438
Issue of shares 265 973 0 1,238
Share issue expenses 0 (59) 0 (59)
Loss for the period (160) (160)
As at 30 June 2018 1,139 6,077 4 (3,764) 3,456
---------- -------- ---------- ---------- -----------
Share issue expenses 0 59 0 (59) 0
Share options issued 28 28
Loss for the period (177) (177)
As at 31 December 2018 1,139 6,136 32 (4,000) 3,307
---------- -------- ---------- ---------- -----------
Issue of shares 184 73 0 257
Loss for the period (170) (170)
As at 30 June 2019 1,323 6,209 32 (4,170) 3,394
========== ======== ========== ========== ===========
Six Months Ended Year Ended
30 June 30 June 31 Dec
19 18 18
Condensed Consolidated Cash
Flow unaudited unaudited Audited
EUR'000 EUR'000 EUR'000
CASH FLOW FROM OPERATING ACTIVITIES
Loss for the year (170) (160) (337)
Share options issued 0 0 14
Exchange movements 0 (2) 2
---------- ---------- -----------
(170) (162) (321)
Movements in working capital 12 (247) (260)
---------- ---------- -----------
CASH USED BY OPERATIONS (158) (409) (581)
NET CASH USED IN OPERATING
ACTIVITIES (158) (409) (581)
---------- ---------- -----------
CASH FLOW FROM INVESTING
ACTIVITIES
Payments for exploration and evaluation (48) (306) (389)
---------- ---------- -----------
NET CASH USED IN INVESTING
ACTIVITIES (48) (306) (389)
---------- ---------- -----------
CASH FLOW FROM FINANCING ACTIVITIES
Issue of shares 257 1,015 1,015
Share issue expenses (10) (59) (59)
---------- ---------- -----------
NET CASH GENERATED FROM FINANCING
ACTIVITIES 247 956 956
---------- ---------- -----------
NET INCREASE/(DECREASE) IN CASH AND CASH
EQUIVALENTS 41 241 (14)
Cash and Cash Equivalents at beginning
of the period 106 123 122
Effects of exchange rate changes on cash
held in foreign currencies 0 2 (2)
CASH AND CASH EQUIVALENTS AT
OF THE PERIOD 147 366 106
========== ========== ===========
Notes:
1. INFORMATION
The financial information for the six months ended 30 June 2019
and the comparative amounts for the six months ended 30 June 2018
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 2018.
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
2018, 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
19 18 18
EUR EUR EUR
Loss per share - Basic and Diluted (0.14c) (0.15c) (0.31c)
============== ============== ==============
Basic loss per share
The earnings and weighted average number of ordinary shares used
in the calculation of basic loss per share are as follows:
EUR'000 EUR'000 EUR'000
Loss for the year attributable to
equity holders of the parent (170) (160) (337)
============== ============== ==============
Weighted average number of ordinary
shares for the purpose of basic earnings
per share 125,707,757 105,419,004 109,774,178
============== ============== ==============
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 19 30 June 18 31 Dec 18
Exploration and evaluation assets: EUR'000 EUR'000 EUR'000
Cost at 1 January 3,314 2,912 2,912
Additions 48 306 402
----------- ----------- ----------
Closing Balance 3,362 3,218 3,314
=========== =========== ==========
The above represents expenditure on projects in Ireland.
In 2012 the Group entered into an agreement with Teck Ireland
Limited ("Teck"), a subsidiary of Teck Resources Limited, which
gives Teck the option of earning a 75% interest in licences held by
the Group in Cavan/Meath. Teck have to spend EUR1.35 million on the
licences by 2018 in order to earn the option to acquire 75%
interest. As per the agreement the licences have been transferred
into a new company, Oldcastle Zinc Limited. As at 31 December 2018
Teck had completed EUR1,460,797 worth of expenditure. As per the
agreement upon Teck completing EUR550,000 worth of expenditure
343,500 ordinary shares in Oldcastle Zinc Limited were to be issued
to Teck. The shares were issued on 20 February 2015 giving Teck a
51% interest in the company. On completion of a further EUR400,000
worth of expenditure 269,360 ordinary shares in Oldcastle Zinc
Limited were to be issued to Teck. The shares were issued on 22
December 2018 giving Teck a total 65% interest in the company.
377,140 shares are due to be issued to Teck to give it a total
interest of 75% in the company.
In 2007 the Group entered into an agreement with Teck Cominco
which gave Teck Cominco the option to earn a 75% interest in a
number of other licences held by the Group. Teck Cominco had to
spend CAD$3m to earn the interest. During 2012 the relevant
licences were transferred to a new company, TILZ Minerals Limited,
which at 31 December 2018 was owned 23.44% (2017: 23.44%) by
Limerick Zinc Limited and 76.56% (2017: 76.56%) by Group Eleven
Resources Corp.
On 13 September 2017 the 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 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;
-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 deferred development
expenditure at 30 June 2019, the directors are satisfied that the
value of the intangible asset is not less than carrying value.
30 June 19 30 June 18 31 Dec 18
Segmental Analysis EUR'000 EUR'000 EUR'000
Limerick 1,538 1,538 1,538
Oldcastle 330 330 330
Rest of Ireland 1,494 1,350 1,446
----------- ----------- ----------
Closing Balance 3,362 3,218 3,314
=========== =========== ==========
5. SHARE CAPITAL AND SHARE PREMIUM
30 June 30 June 31 Dec
19 18 18
EUR'000 EUR'000 EUR'000
Authorised:
500,000,000 ordinary shares of
EUR0.01 each 5,000 2,000 5,000
============ ========= ==============
Allotted, Called Up and Fully Share Share Premium
Paid: Number Capital EUR'000
EUR'000
Balance at 1 January 2018 87,417,618 874 5,163
Issued during the period 26,493,975 265 973
Share issue expenses - - (59)
Balance at 30 June 2018 113,911,593 1,139 6,077
Share issue expenses - - 59
------------ --------- --------------
Balance at 31 December 2018 113,911,593 1,139 6,136
Issued during the period 18,400,000 184 73
Balance at 30 June 2019 132,311,593 1,323 6,209
============ ========= ==============
Movement in shares
On 26 February 2018, a total of 21,686,747 shares were issued at
a price of 4.15p 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 7p per share for a period of two
years.
Should the volume weighted average share price of the Company
exceed 20 (twenty) pence for five consecutive trading days the
Company has the right to provide a written notice to warrant
holders that they have one week to exercise the 7p warrants with a
further two weeks thereafter for payment. Any then unexercised
warrants could be cancelled by the Company. This acceleration
condition is entirely at the volition of the Company should the 20
pence hurdle described above be triggered.
On 26 February 2018, John Teeling and James Finn, directors of
Arkle Resources Plc, had their unpaid salaries owed to them
totalling GBP199,500 settled via the issue of 4,807,228 new
ordinary shares at the placing price of 4.15p. In addition, John
Teeling and James Finn were granted 2,698,795 and 2,108,433
warrants respectively to subscribe for ordinary shares on the same
terms as the placing warrants.
On 5 March 2019, a total of GBP230,000 was raised at a price of
1.25p per share through the issue of 18,400,000 new ordinary
shares. For each share subscribed for, the investors also received
one warrant to subscribe for an additional ordinary share at a
price of 1.8p per share at any time before 11 September 2020.
6. SHARE BASED PAYMENTS - WARRANTS
30 June 19 30 June 18 31 Dec 18
'000 '000 '000
Outstanding at beginning of period 39,431 31,638 31,638
Granted during the period 18,400 27,803 27,803
Expired during the period - (20,010) (20,010)
----------- ----------- ----------
Closing Balance 57,831 39,431 39,431
=========== =========== ==========
On 15 August 2017, a total of 11,627,907 shares were issued at a
price of 1.72p per share. As part of the placing, for each share
subscribed for, the investors also received one warrant to
subscribe for an additional ordinary share at a price of 3.4p per
share at any time until 15 August 2019.
On 26 February 2018, a total of 26,493,975 shares were issued at
a price of 4.15p per share. As part of the placing, for each share
subscribed for, the investors also received one warrant to
subscribe for an additional ordinary share at a price of 7p per
share at any time until 8 March 2020. The fair value of those
warrants are immaterial as at 31 December 2018.
On 26 February 2018, a total of 1,059,337 warrants with an
exercise price of 7p were issued to the broker First Equity Limited
for work done on the above placing.
On 20 July 2018, a total of 250,000 warrants with an exercise
price of 7p were issued to the broker First Equity Limited for
services provided.
On 5 March 2019, a total of 18,400,000 shares were issued at a
price of 1.25p per share. As part of the placing, for each share
subscribed for, the investors also received one warrant to
subscribe for an additional ordinary share at a price of 1.8p per
share at any time until 11 September 2020.
7. POST BALANCE SHEET EVENTS
There were no significant post balance sheet events for the
period.
8. The Interim Report for the six months to 30 June 2019 was
approved by the Directors on 26 September 2019.
9. The Interim Report will be available on Arkle Resources PLC's website www.arkleresources.com
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END
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