TIDMKEN
RNS Number : 3340B
Kendrick Resources PLC
30 September 2022
30 September 2022
Kendrick Resources Plc
("Kendrick" or the "Company")
Interim Results for the Six Months Ended 30 June 2022
Kendrick Resources Plc ("Kendrick" or the "Company"), the
Scandinavian focused new age mineral exploration and development
company with nickel and vanadium projects in Norway, Sweden and
Finland , announces its unaudited interim results for the six
months ended 30 June 2022.
OPERATIONAL, FINANCIAL CORPORATE and STRATEGY REVIEWS
Operational Review
The period under review has been transformatory for the Company.
On 6 May 2022, Kendrick completed an Initial Public Offering
("IPO") on the Standard List of the London Stock Exchange and the
acquisition of its projects in Sweden and Finland as well as an
option over its projects in Norway (the "Projects"). This option
was exercised on 16 May 2022, more details of which are provided in
the Corporate Highlights section of this review. Following the IPO,
the Group undertaken a thorough review of all its projects and
licences and has made a number of local appointments to manage
operations and completed a review of all available technical
information.
Technical review of Projects: After the IPO and having acquired
its projects in Sweden, Finland and exercised its option in
relation to its Norwegian projects, the Company commenced technical
reviews and / or programmes on its portfolio. The primary metal in
the Swedish and Finnish projects is vanadium and nickel for the
Norwegian projects.
Summary of Projects: The Projects are a portfolio of early to
advanced stage exploration projects covering a combined area of
466.72 km2 in Scandinavia. The most advanced of these Projects are
the Airijoki and Koitelainen vanadium projects in Sweden and
Finland respectively. In addition the Company holds the following
licences:
-- Finland - the Karhujupukka vanadium-magnetite exploration project
-- Sweden - the Kramsta, Kullberget, Simesvallen and Sumåssjön
exploration projects in Sweden (collectively the "Central Sweden
Project")
-- Norway - an option over the Espedalen, Hosanger, and Sigdal
exploration nickel-copper-cobalt projects in Norway.
Both the Karhujupukka and Espedalen projects also support
defined mineral resources prepared in accordance with the JORC Code
(2012.) However, these remain subject to further techno-economic
assessment. The remaining projects represent brownfield to
greenfield exploration opportunities based on the results of
historical activities, some with historical mineral estimates that
are still to be updated to the requirements of the JORC Code
(2012).
Norway Projects: The Company's review has identified significant
opportunities within the nickel projects in Norway. The Director's
believe this review and present nickel price forecasting means the
Company is extremely well positioned with the Norwegian nickel
assets. Kendrick is currently digitising and reassessing nickel ore
resources, to direct future drilling programmes, towards early
production. The nickel resources are demonstrating good grades and,
in most cases, have accompanying copper and sometimes cobalt. It is
intended that the Company will commence a strike extension drilling
programme when the most prospective and amenable target has been
identified.
Swedish & Finnish Projects: The Swedish vanadium project is
being prepared for an extension drilling programme with the same
intention for the ultramafic rock on the Finnish licences. In
reviewing the Airijoki project significant copper anomalies have
been identified and the occurrences for future testing are
currently being modelled. All licences, where appropriate, have
been applied for with copper included as an exploration target.
Plans are being drafted for metallurgical test work in order to
increase recoveries, whilst maintaining magnetite vanadium grade.
The Company is preparing plans to conduct further test work to
advance the processing to the end product vanadium
electrolytes.
Financial Review
Financial highlights:
-- GBP185K loss after tax (2021: GBP169K)
-- Approximately GBP2.173m cash at bank at the period end (Dec 2021: GBP17k).
-- The basic and diluted losses per share are summarised in the table below:
Loss per share
(pence) 2022 2021
Note
Basic 3 (0.24)p (1.51)p
Note
Diluted 3 (0.15)p (1.51)p
======== ========
-- The net asset value as at 30 June 2022 was GBP 5.26m (31 December 2021 (GBP236k) )
Fundraisings and issues of shares
At Listing, the Company through a fundraise raised GBP3,250,000
(before expenses) (the "Fundraise") through the issue of 92,857,143
new ordinary shares in the capital of the Company ("Ordinary
Shares") at 3.5 pence per Ordinary Share (the "Placing Price") to
the subscribers to the Fundraising (the "Placees") and the issue of
91,000,143 warrants to the Placees with an exercise price of
GBP0.06 per Ordinary Share, exercisable for 3 years from Admission
(the "Placing Warrants")
The funds raised on Admission provided the Group with sufficient
money to undertake the exploration and assessment of the Company's
projects in Sweden, Finland and Norway. Details of these work
programmes are set out in the Company's Prospectus dated 29 April
2022.
On 20 December 2020, the Company executed a GBP210,000 unsecured
convertible loan note instrument (the "December 2020 Convertible
Loan Note") and received subscriptions of GBP210,000 in respect of
this loan note from private investors. The December 2020
Convertible Loan Note does not pay interest and was repaid at the
IPO by the issue of 10,000,000 Ordinary Shares at a 40% discount to
the Placing Price.
On 2 July 2021, the Company executed a GBP350,000 unsecured
convertible loan note instrument (the "July 2021 Convertible Loan
Note") and received subscriptions of GBP350,000 in respect of this
loan note from private investors including GBP30,000 from Kjeld
Thygesen and GBP48,000 from Colin Bird, who are directors of the
Company. The July 2021 Convertible Loan Note did not pay interest
and was repaid at the IPO by the issue of i) 13,333,333 Ordinary
Shares at a 25% discount to the Placing Price of which 1,142,857
were issued to Kjeld Thygesen and 1,828,571 to Colin Bird and ii)
one (1) warrant for each Ordinary Share issued to the noteholders
at a strike price of the Placing Price. The 13,333,333 warrants
will be valid for a period of 18 months from the IPO and 1,142,857
of the warrants will be issued to Kjeld Thygesen and 1,828,571 to
Colin Bird.
On 15 November 2021, the Company executed a GBP150,000 unsecured
convertible loan note instrument which was, with the consent of the
noteholders, subsequently increased to GBP150,000 (the "November
2021 Convertible Loan Note") and received subscriptions of
GBP119,500 in respect of this loan note from private investors
including GBP37,000 from Lion Mining Finance Ltd, a company
controlled by Colin Bird, a director of the Company. The November
2021 Convertible Loan Note does not pay interest and was repaid at
the IPO by the issue of i) 4,552,381 New Ordinary Shares at a 25%
discount to the Placing Price of which 1,409,524 were issued to
Lion Mining Finance Ltd and ii) one (1) warrant for each Ordinary
Share issued to the noteholders at a strike price of the Placing
Price. The 4,552,381 warrants are valid for a period of 18 months
from the IPO and 1,409,524 of the warrants were issued to Lion
Mining Finance Ltd.
At the IPO, 9,721,254 Ordinary Shares were issued at the Placing
Price to settle fees due by the Company of which 4,528,571 Ordinary
Shares were issued to Colin Bird to settle GBP158,500 of accrued
unpaid fees.
Corporate Review
Company Board: The Board of the Company comprises Colin Bird,
Executive Chairman and Non- executive directors Kjeld Thygesen,
Evan Kirby and Alex Borrelli.
Listing: The Company was admitted to the Official List (Standard
Segment) and commenced trading on the Main Market for listed
securities of the London Stock Exchange on 6 May 2022 (the
"Listing" or "IPO") .
Corporate Acquisitions: At Listing the Company had no
subsidiaries and at IPO pursuant to a binding sales agreement dated
18 January 2021 with Pursuit Minerals (the "Binding Sales
Agreement") which was assigned to the Company :
1. 100% of Northern X Finland Oy ("Northern X Finland"), which
owns in Finland the Koitelainen vanadium projects which hosts a
defined Mineral Resource as defined by the JORC Code (2012) and the
Karhujupukka vanadium-magnetite exploration project ("Finnish
Projects");
2. 100% of Northern X Scandinavia AB ("Northern X Scandinavia")
which owns in Sweden the Airijoki and vanadium project (the
"Airijoki Project") which hosts a defined Mineral Resource as
defined by the JORC Code (2012) and the Kramsta,Kullberget,
Simesvallen and Sumåssjön exploration projects in Sweden
(collectively known as the "Central Sweden Projects") (the Airijoki
Project and the Central Sweden Projects are collectively the
"Swedish Projects"); and
3. an exploration and option agreement to acquire from Eurasian
Minerals Sweden AB the Espedalen, Hosanger, and Sigdal exploration
nickel-copper-cobalt projects in Norway (the "Norwegian Projects")
(the "EMX Option Agreement")
Under the terms of the Binding Sales Agreement as subsequently
amended the consideration payable to Pursuit Minerals was as
follows:
(i) A$50,000 cash paid on execution of the Binding Sales
Agreement;
(ii) GBP1,475,000 satisfied through the issue of 42,142,857
Ordinary Shares;
(iii) A$250,000 in cash on the Company's completion of a
feasibility study on any of the
individual project areas in the Tenements that demonstrate an
internal rate of return
of not less than 25%; and
(iv) A$500,000 in cash upon a decision by the Company to mine in
any individual
project area in the projects acquired from Pursuit Minerals.
On 20 January 2021, the Company was assigned the Binding Sales
Agreement by Lion Mining Finance Ltd and Camden Park Trading
Limited, companies controlled by Colin Bird, (the "Assignment
Agreement"). The Assignment Agreement was conditional on the
completion of the Binding Sales Agreement and at the IPO the
consideration due under the Assignment Agreement was GBP802,000 of
which GBP52,000 is to be settled in cash and GBP750,000 was settled
by the issue of 35,714,285 Ordinary Shares in the Company at an
issue price of 2.1 pence per Ordinary Share.
On 16 May 2022 the Company announced it had exercised the EMX
Option Agreement and on 12 August 2022 that the Company that it has
completed the acquisition of the Espedalen, Hosanger, and Sigdal
nickel-copper-cobalt exploration projects in Norway (the "Norwegian
Projects") from EMX Scandinavia AB (previously named Eurasian
Minerals Sweden AB) ("EMX"). The consideration paid to EMX for the
exercise of the option during the period was U$81,949 and post the
period end the issue of 20,226,757 Ordinary Shares.
Lock Up and Orderly Market arrangements:
At IPO the Directors and their related parties, in aggregate,
held 47,294,860 Ordinary Shares, representing 21.62% of the
Enlarged Share Capital. The Directors have agreed with the Company
and its brokers, except for certain standard exceptions, not to
dispose of any interest in the Ordinary Shares held by them for a
period of 12 months following Admission (Lock-In Period) and then
for the following 12 months not to dispose of their Ordinary Shares
without first consulting the Company and Novum in order to maintain
an orderly market for the Shares.
The 42,142,857 Ordinary Shares issued to Pursuit Minerals have
not been sold as at the date of this report and are subject to the
following lock up and orderly market arrangements and subject to
orderly market arrangements for the 12 months to 5 May 2023
No. of shares Lock up
-------------- -----------------
15,357,143 None
8,928,572 Until 5 November
22
8,928,571 Until 5 May 23
8,928,571 Until 5 Nov 23
Strategy Review
The Company's short to medium term strategic objectives are to
enhance the value of its mineral resource projects through
exploration and technical studies conducted by the Company or in
conjunction with other parties with a view to establishing these
projects so they can be economically mined for profit. With a
positive global outlook for both base and precious metals, the
Directors believe that its projects provide a base from which the
Company will seek to add significant value through the application
of structured and disciplined exploration. The Company is looking
to build a long term energy metals business in Scandinavia which
delivers energy metals to Europe to help enable its renewable
energy transformation by building a top tier energy metals
production business focused on quality vanadium and nickel mineral
resources in Scandinavia.
The Company may in the future, if such opportunity arises,
acquire other mineral resource projects whose value can similarly
be enhanced. Further projects may be considered where assets in
strategic commodities are either: (i) geologically prospective but
undervalued; (ii) where technical knowledge and experience could be
applied to add or unlock upside potential; (iii) where the assets
may be synergistic to the current portfolio; or (iv) where project
diversification will add strategic growth opportunities within an
appropriate time frame.
Outlook
The review of the Company's projects acquired at the IPO has
given confidence that the north European assets are well located
with significant potential in the quickly emerging space of energy
generation and storage.
Last year inflation was seen as a distant issue but it, and the
cost of living, are now front and centre of financial headlines.
This has already slowed down major stock markets but may be good
for the small mines sector since as, historically they have been
seen to outperform.
The Board remains confident they have assembled an enviable
portfolio of projects and look forward to advancing all our
projects in the second half and providing our shareholders with the
prospects of enhanced value flowing into next year.
Post Period Events
On 12 August 2022 the Company announced that it has completed
the acquisition of the Espedalen, Hosanger, and Sigdal
nickel-copper-cobalt exploration projects in Norway (the "Norwegian
Projects") from EMX Scandinavia AB (previously named Eurasian
Minerals Sweden AB) ("EMX"). The consideration paid to EMX for the
exercise of the option during the period was U$81,949 and post the
period end the issue of 20,226,757 Ordinary Shares.
INTERIM MANAGEMENT REPORT
The Directors are required to provide an Interim Management
Report in accordance with the Financial Conduct Authorities ("FCA")
Disclosure Guidance and Transparency Rules ("DTR"). The Directors
consider the preceding Operational, Financial, Corporate and
Strategy Review of this Half Yearly Financial Report provides
details of the important events which have occurred during the
period and their impact on the financial statements as well as the
outlook for the Company for the remaining six months of the year
ended 31 December 2022.
The following statement of the Principal Risks and
Uncertainties, the Related Party Transactions, the Statement of
Directors' Responsibilities and the Operational, Financial,
Corporate and Strategy Review constitute the Interim Management
Report of the Company for the six months ended 30 June 2022.
Principal Risks and Uncertainties
The principal risks that are specific to the Company were
detailed under this heading in Part 1 Summary of the Company's
prospectus which was published on 29 April 2022 (the "Prospectus")
which is available on the Company's website at
http://www.kendrickresources.com/ . Part II Risk factors of the
Prospectus provides more details of risk factors specific and
material to the Group and to the Natural Resources Sector. The
Strategic Report in the 2021 Annual Accounts also provided a
detailed summary of the principal risks and uncertainties faced by
the Company, a copy of the 2021 Annual Accounts are available on
the Company's website at http://www.kendrickresources.com/ .
The Board are of the opinion that these risk factors will
continue to remain unchanged for the forthcoming six month
period.
The principal risks and uncertainties facing the group are as
follows:
-- There are significant risks associated with any exploration
project and the ability of the company to explore, develop and
generate operational cashflows from its projects
-- No assurances can be given that minerals will be discovered
in economically viable quantities at the Company's projects
-- Adverse foreign exchange fluctuations
The Board has also reviewed emerging risks which may impact the
forthcoming six-month period and the main risks facing the Company
are any ongoing impact of the COVID-19 pandemic and the Ukraine war
and related sanctions in the period to date have not had a
significant impact on the Company's operations. The Ukraine was has
however had a significant impact of oil and gas prices which is
feeding though into concerns regarding inflation, interest rates
and the outlook for stockmarkets and short term commodity
prices.
Related Party Transactions during the period
1. Issue of shares at the IPO as disclosed in the Prospectus
(a) On 20 January 2021, the Company was assigned the Binding
Sales Agreement by Lion Mining Finance Ltd and Camden Park Trading
FZE-LLC, companies controlled by Colin Bird, (the "Assignment
Agreement"). The Assignment Agreement was conditional on the
completion of the Binding Sales Agreement and at the IPO the
consideration due under the Assignment Agreement was GBP802,000 of
which GBP52,000 is to be settled in cash and GBP750,000 was settled
by the issue of 35,714,285 Ordinary Shares in the Company at an
issue price of 2.1 pence per Ordinary Share (2,285,714 Ordinary
Shares to Lion Mining Finance Ltd and 33,428,571 Ordinary Shares to
Camden Park Trading FZE-LLC).
(b) Colin Bird pursuant to the Fundraising at the IPO subscribed
for 1,571,400 Ordinary Shares at the Placing Price and was also
issued at the 1,571,400 Placing Warrants.
(c) Colin Bird was at the IPO issued 4,528,571 Ordinary Shares
at the Placing Price to settle GBP158,500 of accrued unpaid
fees.
(d) Colin Bird was at the IPO issued 1,828,571 Ordinary Shares
and 1,828,571 Convertible Note Warrants arising from his
participation in the July 2021 Convertible Loan Note.
(e) Kjeld Thygesen pursuant to the Fundraising at the IPO
subscribed for 1,000,000 Ordinary Shares at the Placing Price and
was issued 1,000,000 Placing Warrants.
(f) Kjeld Thygesen was at the IPO issued 1,142,857 Ordinary
Shares and 1,142,857 Convertible Note Warrants arising from his
participation in the July 2021 Convertible Loan Note.
(g) Lion Mining Finance Limited (a company controlled by Colin
Bird) at the IPO was issued 1,409,524 Ordinary Shares and 1,409,524
Convertible Note Warrants arising from its
participation in the November 2021 Convertible Loan Note.
2. Directors' Letters of Appointment and Service Agreements as
disclosed in the Prospectus
(a) Pursuant to an agreement dated 29 April 2022 the Company
renewed the appointment of Colin Bird as a Director. The
appointment continues unless terminated by either party giving to
the other three months' notice in writing. Colin Bird is entitled
to director's fees of GBP18,000 per annum for being a director of
the Company plus reasonable and properly documented expenses
incurred during the performance of his duties. Colin Bird is not
entitled to any pension, medical or similar employee benefits. The
agreement replaces all previous agreements with Colin Bird in
relation to his appointment as a director of the Company.
(b) Pursuant to a consultancy agreement dated 29 April 2022, the
Company has, with effect from the date of the IPO, appointed Colin
Bird as a consultant to provide technical advisory services in
relation to its current and future projects including, but not
limited to, assessing existing geological data and studies,
existing mine development studies and developing exploration
programs and defining the framework of future geological and mine
study reports (the "Colin Bird Services"). The appointment
continues unless terminated by either party giving to the other
three months' notice in writing. Colin Bird is entitled to fees of
GBP2,500 per month for being a consultant to the Company plus
reasonable and properly documents expenses incurred during the
performance of the Colin Bird Services.
(c) Pursuant to an agreement dated 29 April 2022, renewed the
appointment of Kjeld Thygesen as a non-executive Director. The
appointment continues unless terminated by either party giving to
the other three months' notice in writing. Kjeld Thygesen is
entitled to director's fees of GBP18,000 per annum for being a
director of the Company plus reasonable and properly documented
expenses incurred during the performance of his duties. Kjeld
Thygesen is not entitled to any pension, medical or similar
employee benefits.
(d) Pursuant to an agreement dated 29 April 2022, Alex Borrelli
was appointed as a nonexecutive Director. The appointment continues
unless terminated by either party giving to the other three months'
notice in writing. Alex Borrelli is entitled to director's fees of
GBP18,000 per annum for being a director of the Company plus
reasonable and properly documented expenses incurred during the
performance of his duties. Alex Borrelli is not entitled to any
pension, medical or similar employee benefits.
(e) Pursuant to an agreement dated 29 April 2022, Evan Kirby was
appointed as a non-executive Director. The appointment continues
unless terminated by either party giving to the other three months'
notice in writing. Evan Kirby is entitled to director's fees of
GBP18,000 per annum for being a director of the Company plus
reasonable and properly documented expenses incurred during the
performance of his duties. Evan Kirby is not entitled to any
pension, medical or similar employee benefits.
(f) The Company entered into a licence agreement dated 1
February 2022 with Lion Mining Finance Limited (a company
controlled by Colin Bird, a director of the Company). Pursuant to
this agreement, the Company has been granted a licence to use the
premises at 7-8 Kendrick Mews, London, SW7 for a period of 12
months with effect from 1 December 2021 for a licence fee of
GBP1,000 per month. In addition, Lion Mining Finance Limited
provides basic administrative and support services as required by
the Company from time to time.
3. Related Party transactions described in the annual report to
31 December 2021
Other than disclosed above there have been no changes in the
related parties transactions descried in the annual report for the
year ended 31 December 2021 that could have a material effect on
the financial position or performance of the Company in the first
six months of the current financial year
Responsibility Statement
The Directors, whose names and functions are set out in this
report under the heading Company Board, are responsible for
preparing the Unaudited Interim Condensed Consolidated Financial
Statements in accordance with the Disclosure Guidance and
Transparency Rules of the United Kingdom's Financial Conduct
Authority ('DTR') and with International Accounting Standard 34 on
Interim Financial reporting (IAS34). The Directors confirm that, to
the best of their knowledge, this Unaudited Interim Condensed
Consolidated Report, which has been prepared in accordance with
IAS34, gives a true and fair view of the assets, liabilities,
financial position and profit or loss of the Group and the interim
management report includes a fair review of the information
required by DTR 4.2.7 R and by DTR 4.2.8 R, namely:
-- an indication of key events occurred during the period and
their impact on the Unaudited Interim Condensed Consolidated
Financial Statements and a description of the principal risks and
uncertainties for the second half of the financial year; and
-- material related party transactions that have taken place
during the period and that have materially affected the financial
position or the performance of the business during that period.
For and on behalf of the Board of Directors
Colin Bird
Executive Chairman
30 September 2022
Kendrick Resources Plc
Colin Bird
Executive Chairman +44 (0)20 7581 4477
Novum Securities (Financial Adviser)
David Coffman +44 (0) 020 7399 9400
Novum Securities Limited (Broker)
Jon Belliss +44 (0) 20 7399 9400
or visit https:// www.kendrickresources.com /
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 as it forms part of
UK Domestic Law by virtue of the European Union (Withdrawal) Act
2018 ("UK MAR").
Group Statement of Profit and Loss
For the six months ended 30 June 2022
Notes Unaudited Unaudited
Six months Six months
ended ended
30 June 30 June
2022 2021
GBP GBP
Income
Realised loss on sale of investments (10,872) -
Unrealised (loss)/gain on investments - (15,954)
------------ ------------
Total income (10,872) (15,954)
Operating expenses (173,828) (153,408)
Group operating loss (184,700) (169,362))
Interest costs - -
Loss before taxation (184,700) (169,362))
Taxation - -
------------ ------------
Loss for the period (184,700) (169,362)
============ ============
Loss per share (pence)
Basic (0.24)p (1.51)p
Diluted 3 (0.15)p (1.51)p
Group Statement of Other Comprehensive Income
For the six months ended 30 June 2022
Unaudited Unaudited
Six months Six months
ended ended
30 June 30 June
2022 2021
GBP GBP
Other comprehensive income :
Loss for the period (184,700) (169,362)
Items that may be reclassified to profit
or loss:
Foreign currency reserve movement - -
------------ ------------
Total comprehensive loss for the period (184,700) (169,362)
============ ============
GROUP STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2022
Share Share Merger Accumulated Total
capital Premium reserve losses equity
GBP GBP GBP GBP GBP
Unaudited - six months
ended 30 June 2022
Balance at 29 December
2021 22,929,743 25,027,278 1,824,000 (50,017,384) (236,363)
Current period loss - - - (184,700) (184,700)
----------- ----------- ---------- ------------- ----------
Total comprehensive
loss for the period - - - (184,700) (184,700)
----------- ----------- ---------- ------------- ----------
Net proceeds from shares
issued 30.773 2,743,107 - - 2,773,880
Acquisition of subsidiaries 23,357 2,201,643 - - 2,225,000
Loan notes converted
into shares 8,366 671,134 - - 679,500
Balance at 30 June
2022 22,992,239 30.643,162 1,824,000 (50,202,084) 5,257,317
=========== =========== ========== ============= ==========
Unaudited - six months
ended 30 June 2021
Balance at 29 December
2020 22,929,743 25,027,278 1,824,000 (49,692,398) 88,623
Current period loss - - - (169,362) (169,362)
----------- ----------- ---------- ------------- ----------
Total comprehensive
loss for the period - - - (169,362) (169,362)
----------- ----------- ---------- ------------- ----------
Balance at 30 June
2021 22,929,743 25,027,278 1,824,000 (49,861,760) (80,739)
=========== =========== ========== ============= ==========
Group Balance Sheet
As at 30 June 2022
Unaudited Audited
30 31
June December
2022 2021
Notes GBP GBP
ASSETS
Non-current assets
Property, plant and equipment 1,025 2,050
Exploration and evaluation assets 6 2,700,333 -
Investment in Norwegian Projects 7 191,809 673,755
------------- -------------
Total non-current assets 2,893,167 675,805
------------- -------------
Current assets
Current asset investment 13,488 102,932
Trade and other receivables 335,421 89,488
Cash and cash equivalents 2,172,712 16,871
------------- -------------
Total current assets 2,521,621 209,291
-------------
TOTAL ASSETS 5,414,788 885,096
-------------
LIABILITIES
Current liabilities
Trade and other payables 157,471 441,959
Convertible loan notes - 679,500
Total liabilities 157,471 1,121,459
------------- -------------
NET ASSETS/(LIABILITIES) 5,257,317 (236,363)
============= =============
EQUITY
Share capital 8 22,992,239 22,929,743
Share Premium 30,643,162 25,027,278
Merger reserve 1,824,000 1,824,000
Retained earnings (50,202,084) (50,017,384)
------------- -------------
Total equity 5,257,317 (236,363)
============= =============
Group Statement of Cash Flows
For the six months ended 30 June 2022
Unaudited Unaudited
Six months Six months
ended ended
30 June 30 June
2022 2021
Notes GBP GBP
Cash flows from operating activities
Loss before tax (184,700) (169,362)
Adjustments for:
Depreciation of property, plant and equipment 1,025 4,345
Loss on sale of investments 10,872 -
Unrealised loss on investments - 15,954
(Increase) in receivables (245,933) (72,789)
(Decrease)/Increase in payables (284,488) 171,567
Net cash inflow from operating activities (703,224) (50,285)
------------ -----------
Cash flows from/(used) in investing activities
Proceeds of sale of Investment shares 78,572 -
Investment in Nordic Projects and related
transaction costs (82,584) (158,526)
Purchase of Exploration and Evaluation
assets (2,135,803) -
------------ -----------
(2,139,815) (158,526)
------------ -----------
Cash flows from financing activities
Proceeds from Issue of shares, net of
issue costs 2,773,880 -
Shares issued to acquire subsidiaries 2,225,000 -
Proceeds from issue of convertible loan
notes - 210,000
------------ -----------
4,998,880 210,000
------------ -----------
Increase in cash 2,155,841 1,189
Cash and cash equivalents at beginning
of period 16,871 9,496
Cash and cash equivalents at end of period 2,172,712 10,685
============ ===========
Notes to the interim financial information
For the six months ended 30 June 2022
1. General information
This financial information is for Kendrick Resources Plc ("the
Company") and its subsidiary undertakings. The principal activity
of Kendrick Resources Plc (the 'Company') and its subsidiaries
(together the 'Group') is the development of natural resources
exploration projects in Scandinavia. The Company is a public
limited company and was listed on to the Official List (Standard
Segment) and commenced trading on the Main Market for listed
securities of the London Stock Exchange on 6 May 2022. The 'Company
is incorporated and domiciled in the United Kingdom with company
registration number 02401127. The address of the registered office
is 7/8 Kendrick Mews, London SW7 3HG.
.
2. Basis of preparation
The unaudited interim financial information set out above,
which incorporates the financial information of the Company
and its subsidiary undertakings (the "Group"), has been prepared
using the historical cost convention and in accordance with
International Financial Reporting Standards ("IFRS").
These interim results for the six months ended 30 June 2022
are unaudited and do not constitute statutory accounts as
defined in section 434 of the Companies Act 2006. The financial
statements for the year ended 31 December 2021 were audited
and the auditors' report on those financial statements was
unqualified and contained a material uncertainty pertaining
to going concern.
The same accounting policies, presentation and methods of
computation have been followed in these unaudited interim
financial statements as those which were applied in the preparation
of the company's annual financial statements for the year
ended 31 December 2020.
The interim consolidated financial information incorporates
the financial statements of Kendrick Resources Plc and its
subsidiaries.
Going concern basis of accounting
The Group made a loss from all operations for the six months
ended 30 June 2022 after tax of GBP185,000 (2021: GBP169,000),
had negative cash flows from operations and is currently not
generating revenues. However, the Company raised GBP3,250,000
at the time of the Company's Listing in May 2022 and Cash
and cash equivalents were GBP2,173,000 as at 30 June 2022,
which will enable the Company to commence its exploration
activities on its newly acquired projects. An operating loss
is expected in the year subsequent to the date of these accounts
and as a result the Company will need to raise funding to
provide additional working capital to finance its ongoing
activities. Management has successfully raised money in the
past, but there is no guarantee that adequate funds will be
available when needed in the future.
Based on the Board's assessment that the Company will be able
to raise additional funds, as and when required, to meet its
working capital and capital expenditure requirements, the
Board have concluded that they have a reasonable expectation
that the Group can continue in operational existence for the
foreseeable future. For these reasons the financial statements
have been prepared on the going concern basis, which contemplates
continuity of normal business activities and the realisation
of assets and discharge of liabilities in the normal course
of business.
3. Earnings per share
Unaudited Unaudited
30 30
June June
2022 2021
GBP GBP
(Loss) attributable to equity holders of
the Company (184,700) (169,362)
Weighted average number of shares 75,643,347 11,190,363
Weighted average number of shares and warrants 75,643,347 11,190,363
Basic loss per ordinary share (0.24)p (1.51)p
Diluted loss per ordinary share (0.15)p (1.51)p
The use of the weighted average number of shares in issue in
the period recognises the variations in the number of shares
throughout the period and is in accordance with IAS 33.
4. Investments
The company has adopted the provisions of IFRS9 and has
elected to treat all available for sale investments at fair
value with changes through the profit and loss.
Available-for-sale investments under IFRS9 are initially
measured at fair value plus incidental acquisition costs.
Subsequently, they are measured at fair value in accordance
with IFRS 13. This is either the bid price or the last traded
price, depending on the convention of the exchange on which
the investment is quoted. All gains and losses are taken
to profit and loss.
The Company's intention following its Listing is not to
purchase any new investments and to hold its residual portfolio
as realisable investments as a source of liquidity when
required.
5. Acquisition of subsidiaries
Acquisition of Northern X Group
On 6 May 2022 the Company completed the acquisition of;
(a) 100% of Northern X Finland Oy ("Northern X Finland"),
which owns in Finland the Koitelainen vanadium projects
which hosts a defined Mineral Resource as defined by the
JORC Code (2012) and the Karhujupukka vanadium-magnetite
exploration project ("Finnish Projects"); and
(b) 100% of Northern X Scandinavia AB ("Northern X Scandinavia")
which owns in Sweden the Airijoki and vanadium project (the
"Airijoki Project") which hosts a defined Mineral Resource
as defined by the JORC Code (2012) and the Kramsta,Kullberget,
Simesvallen and Sumåssjön exploration projects
in Sweden (collectively known as the "Central Sweden Projects")
(the Airijoki Project and the Central Sweden Projects are
collectively the "Swedish Projects")
Collectively the Northern X Group
The acquisition price was as follows:
GBP
Consideration
Equity consideration
* Ordinary shares (issued) 2,225,000
Cash consideration 224,126
--------------
2,449,126
-
6. Exploration and evaluation assets
30 June 2022 31 Dec 2021
GBP GBP
Balance at beginning of - -
period
Acquisitions during the
period
2,449,126 -
* Northern X Group (note 5)
251,207 -
* Exploration expenditure
Carried forward
at end of period 2,700,333 -
============= ============
6.1. Exploration assets
Summary of Projects: The projects are a portfolio of early to
advanced stage exploration projects covering a combined area of
466.72 km2 in Scandinavia. The most advanced of these Projects are
the Airijoki and Koitelainen vanadium projects in Sweden and
Finland respectively. In addition the Company holds the following
licences:
-- Finland - the Karhujupukka vanadium-magnetite exploration project
-- Sweden - the Kramsta, Kullberget, Simesvallen and Sumåssjön
exploration projects in Sweden (collectively known as the Central
Sweden Project)
The Karhujupukka project also support defined mineral resources
prepared in accordance with the JORC Code (2012.) However, these
remain subject to further techno-economic assessment. The remaining
projects represent brownfield to greenfields exploration
opportunities based on the results of historical activities, some
with historical mineral estimates that remain to be updated to the
requirements of the JORC Code (2012).
6.2. Exploration assets accounting policy
Exploration, evaluation and development expenditure incurred is
accumulated in respect of each identifiable area of interest. These
costs are only carried forward to the extent that they are expected
to be recouped through the successful development of the area or
where activities in the area have not yet reached a stage which
permits reasonable assessment of the existence of economically
recoverable reserves. Accumulated costs in relation to an abandoned
area are written off in full in the year in which the decision to
abandon the area is made. When production commences, the
accumulated costs for the relevant area of interest are transferred
to development assets and amortised over the life of the area
according to the rate of depletion of the economically recoverable
reserves. A regular review is undertaken of each area of interest
to determine the appropriateness of continuing to carry forward
costs in relation to that area of interest.
7. Investment in Norwegian Projects
On 13 May 2022 the Company exercised its option to conditionally
acquire the Espedalen, Hosanger, and Sigdal nickel-copper-cobalt
exploration projects in Norway (the "Norwegian Projects") (the
"Acquisition") from EMX Scandinavia AB (previously named Eurasian
Minerals Sweden AB) ("EMX") by the issue of 20,226,757 new ordinary
shares in the Company to EMX or its nominee, 50% of these shares
shall be subject to a three-month voluntary escrow and the balance
of 50% subject to a six-month voluntary escrow. Kendrick has also
made a payment of US$81,949 to EMX. This payment was to meet a
shortfall of this amount in the exploration expenditure to be
incurred during the option period.
The Acquisition is conditional upon the Norweg ian Directorate
for Mineral Administration approving the transfer of the licences
to a wholly owned subsidiary of Kendrick. Subsequent to the period
end the Company on 12 August 2022 announced this process was
completed, and the Company applied for the 20,226,757 new ordinary
shares to be admitted to trading on the Standard Segment of the
London Stock Exchange on 17 August 2022 (see note10).
The Norwegian Projects comprise:
o The Espedalen Project consisting of 16 contiguous exploration
permits covering a combined area of 139.89 km(2) currently contains
two nickel deposits
o The Sigdal Project consisting of three exploration licences
totalling 30 km(2) containing a geophysical conductor associated
with historical mine workings, which has only been tested with two
short drill holes, returning gold grades over 10g/t with
encouraging nickel and copper mineralisation
o The Hosanger Project consisting of a coherent tenure package
of four exploration licences covering 40 km(2) and contains the
historical Litland nickel mine
8. Share Capital
June 2022 December 2021
Number GBP Number GBP
Issued equity share capital
Is sued and fu l ly pa
id
Ordinary shares of GBP0.0003
each 219,511,616 65,853 11,190,363 3,357
Deferred shares of GBP0.00999
each 335,710,863 3,353,752 335,710,863 3,353,752
Deferred shares of GBP0.009
each 1,346,853,817 12,121,684 1,346,853,817 12,121,684
Deferred shares of GBP0.01 1 9 , 57 1 9 5 , 1 9 , 57 9 1 9 5 , 7
each 9 , 9 2 5 7 9 9 , 9 2 5 9 9
1 81 , 3
D e f e r r e d s h a r 7 8 , 7 6 7 , 2 5 1 81 , 3 7 7 , 2 5 5
es of GBP 0. 04 e ach 6 5 , 15 1 8 , 7 6 6 , 15 1
=========== ===========
22,992,239 22,929,743
=========== ===========
30 June 2022
Number Share
of Ordinary Share Premium
Group shares capital
GBP GBP
-------------------------------------- --------------------------------- --------------- ----------
As at 1 January 2022 11,190,363 3,357 25,027,278
Shares issued during the period 208,321,253 62,496 6,432,247
Share issue costs - - (816,363)
--------------------------------- --------------- ----------
As at 30 June 2022 219,511,616 65,853 30,643,162
--------------------------------- --------------- ----------
Movement in shares issued during the
period
Shares issued from placing on
admission 92,857,143 27,857 3,222,143
Share issued on acquisition on
subsidiaries 77,857,142 23,357 2,201,643
Conversion of loans and share
subscriptions 27,885,714 8,366 671,134
Advisers and director's fees settled
by
shares 9,721,254 2,916 337,327
Total 208,321,253 62,496 6,432,247
--------------------------------- --------------- ----------
1) At the Annual General Meeting held on 4 February 2021, shareholders
approved that the 335,710,863Existing Ordinary Shares in issue
be subdivided each into one new ordinary share of GBP0.00001 ("New
Ordinary Share") and one deferred share of GBP0.00999 ("2020 Deferred
Share) in the capital of the Company. The New Ordinary Shares
carry the same rights as attached to the Existing Ordinary Shares
(save for the reduction in their nominal value). The 2020 Deferred
Shares have no voting rights and have no rights as to dividends
and only very limited rights on a return of capital. They will
not be admitted to trading or listed on any stock exchange and
will not be freely transferable. The holders of the 2020 Deferred
Shares are not entitled to any further right of participation
in the assets of the Company. As such, the 2020 Deferred Shares
effectively have no value.
2) At the Annual General Meeting held on 25 October 2021, shareholders
approved an ordinary resolution that for every thirty (30) issued
and unissued ordinary share of GBP0.00001 each in the share capital
of the Company ("Existing Shares") be consolidated into one (1)
ordinary share of GBP0.0003 each ("New Shares") such New Shares
having the same rights and being subject to the same restrictions,
save as to nominal value, as the Existing Shares.
The deferred shares of GBP0.01 each and GBP0.009 each confer no
rights to vote at a general meeting of the Company or to a dividend.
On a winding-up the holders of the deferred shares are only entitled
to the paid up value of the shares after the repayment of the
capital paid on the ordinary shares and GBP5,000,000 on each ordinary
share.
The deferred shares of GBP0.04 each have no rights to vote or
to participate in dividends and carry limited rights on return
of capital. No shares were issued during the year.
9. Proceeds from the issuance of
ordinary
shares
Six months to YE 31 December
30 June 2022 2021
GBP GBP
Share capital and premium at end
of period (Note 7) 53,635,401 -
Advisers' fees settled by shares (340,243) -
Loan notes converted into shares (679,500) -
Share issued on acquisition on
subsidiaries (2,225,000) -
Share capital and premium at
beginning
of year (47,957,021) -
2,433,637 -
=================================== ===============
Six months to Six months
30 June 2022 to
GBP 30 June 2021
GBP
Gross Funds raised from placing 3,250,000 -
on admission
Listing costs (816,363) -
-------------- --------------
Net proceeds received from placing 2,433,637 -
-------------- --------------
Advisers' fees settled by shares 330,243 -
Net proceeds from issue of shares 2,773,880 -
-------------- --------------
10. Subsequent events
Further to its announcement on 16 May 2022 as detailed in note 7
the Company on 12 August 2022 announced it had completed the
acquisition of the Espedalen, Hosanger, and Sigdal
nickel-copper-cobalt exploration projects in Norway (the "Norwegian
Projects") from EMX Scandinavia AB (previously named Eurasian
Minerals Sweden AB) ("EMX") in consideration for the issue of
20,226,757 new ordinary shares in the Company, which rank pari
passu with the Company's existing ordinary shares.
Lock up arrangements: 50% of the 20,226,757 new ordinary shares
are subject to a three-month voluntary escrow and the balance of
50% subject to a six-month voluntary escrow.
17,979,378 of the new ordinary shares were issued to EMX Royalty
Corporation which will represent 7.5% of the enlarged share capital
with the balance to be issued to a business partner of EMX.
Following the issue of the 20,226,757 new ordinary shares, the
Company's total issued share capital consists of 239,738,373
ordinary shares
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END
IR SDDSASEESEFU
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