TIDMPGM
RNS Number : 1764B
Phoenix Global Mining Ltd
19 September 2018
The information contained within this announcement is deemed by
the Group to constitute inside information as stipulated under the
Market Abuse Regulations (EU) No. 596/2014 ("MAR").
Phoenix Global Mining Ltd / Ticker: PGM / Sector: Mining
19 September 2018
Phoenix Global Mining (PGM) (the "Company" or "Phoenix")
Interim Results
Phoenix Global Mining Ltd (AIM:PGM.L), the AIM quoted North
American focused base and precious metals exploration and
development company, is pleased to announce its unaudited interim
results for the six months ended 30 June 2018.
Highlights
Empire Copper Mine:
- Preliminary Economic Assessment ("PEA") on Empire Mine open pit completed
- Bankable Feasibility Study ("BFS") underway
- 25% increase in forecast copper recovery
- 16% increase in target copper production
- Further 33% increase in Empire Mine land position to 1,837 acres
- 12,200 metre, five drill rig, drilling programme well underway
and returning high grade assay results for both infill drilling,
within the proposed open pit area, and step out drilling in all
directions, with several significant new mineralised extensions to
the orebody already identified
- Deep scout hole drilling into the high-grade underground
orebody confirms the presence of both significant skarn structure
and mineralisation at depth, and the present drilling programme
confirms the presence of higher grade sulphide mineralisation
beneath the proposed open pit
Cobalt and Gold:
- 2018 field season underway on two claim blocks on the Idaho Cobalt Belt
- Option to acquire 80% of the high-grade Gordon Lake gold
project in Northwest Territories, Canada
Corporate:
- GBP3 million ($4.05 million) placing and subscription completed in June 2018
- 1 for 10 share consolidation completed in August 2018
- Dual listing on New York's OTCQX Market underway
Financials:
- Continued tight cost control - loss before tax of $679,817
(six months ended 30 June 2017: $727,790)
- Strong balance sheet - net assets of $9,613,925 (31 December 2017: $6,300,951)
- Cash balance of $2,501,811 (31 December 2017: $1,903,742) with no borrowings
Chairman's Statement
Dear Shareholders
I would like to thank you for your continued support in what
has, so far, been a frustrating year for "risk-on" assets in
general, and the metals and mining sector in particular. Despite
the uncertain market conditions, we were pleased to raise funds in
an oversubscribed placing and subscription after the publication of
our PEA on the Empire Mine open pit project, and we are grateful to
all of you who participated. The sabre-rattling between the global
trading heavyweights and subsequent weakness in the copper and
cobalt prices will hopefully be short-lived, and the strong
fundamentals will reassert themselves.
I believe that we have added considerable underlying value to
our Company since our AIM listing last year, and we will continue
to work on improving the economics of the Empire project. To date,
our major endeavours have been focused on the near surface oxide
cap, where we have significantly increased the resources. We have
also expanded the footprint of the project by acquiring new,
adjoining, claim blocks, where drilling is already underway.
It is our intention to demonstrate the medium and long-term
strategic value of our deposits during the current setback in metal
prices. It is noteworthy to acknowledge a significant pick up in
M&A activity in the copper sector recently, with the bidding
war between Lundin and Zijin Mining for Serbia-based Nevsun, as
well as the acquisition of a 6.1% stake in Ecuador-focused Solgold
by BHP Billiton for $35 million, while some momentum-driven
commentators were calling the copper price, and mining stocks,
lower in the short term. The $1.4 billion all cash offer by Zijin
Mining for Nevsun is significant. Nevsun owns 100% of the Upper
Zone of the Timok deposit in the Bor region of Serbia. This is a
new mine in the making with a resource of 28.7 million tonnes
containing 3.7% copper and 2.4 grammes per tonne ("g/t") of gold.
The historic copper grades from the old underground Empire Mine are
not dissimilar to those of the Timok project and, having largely
completed the resource drilling on the oxides at Empire for the
BFS, we too will now focus activities on quantifying our higher
grade and deeper sulphide resources.
We also see Kaz Minerals' recent purchase of a copper deposit in
the Russian Far East for $900 million, along with Anglo-American's
approval of a $5 billion copper project in Peru, as further
evidence of the industry's attempts to counter what promises to be
a shortage of copper going into the 2020s.
We were also pleased to see Idaho placed firmly in the spotlight
by Barrick's 20% acquisition of our neighbours, Midas Gold, for $38
million, and by First Cobalt's all-share purchase of US Cobalt for
$149.9 million. US Cobalt's Iron Creek project adjoins our 600 acre
Redcastle claims at the southern end of the Idaho Cobalt Belt, and
we are looking forward to receiving the first assay results from
Redcastle and also our 580 acre Bighorn claims at the northern end
of the Idaho Cobalt Belt, adjacent to the Salmon Canyon mine. The
combination of a mining friendly federal government, with the
business-like 'can-do' attitude of Governor Otter's Idaho Office of
Energy and Mineral Resources should lead to further investment in
the state by mining majors.
With regard to our listing in London, we are finding that recent
legislative changes to the system of distributing UK sell-side
analysts' research on smaller companies in the UK have made it
harder to communicate our story to investors. We hope that our
impending New York OTCQX listing will enable us to reach a wider
audience, and bring North American investors onto our register.
I would finally like to express my thanks to my fellow Directors
and our operating staff for their dedication and hard work during
the period, and to welcome the new team we have hired to help us
with the expansion of our resources both at Empire, and the two
cobalt properties, Bighorn and Redcastle, in Idaho, as well as the
Gordon Lake high grade gold deposit in the Northwest Territories,
Canada.
Marcus Edwards-Jones
Chairman
For further information please visit www.pgmining.com or
contact:
Phoenix Global Dennis Thomas / Richard Wilkins Tel: +44 7827
Mining Ltd 290 849 (Dennis)
/
+44 7590 216
657 (Richard)
SP Angel Lindsay Mair / Caroline Rowe Tel: +44 20 3470
(Nominated Adviser 0470
and Joint Broker)
----------------------------------- ------------------
Brandon Hill Capital Jonathan Evans / Oliver Stansfield Tel: +44 20 3463
(Joint Broker) 5000
----------------------------------- ------------------
Blytheweigh Tim Blythe / Camilla Horsfall Tel: +44 20 7138
(Financial PR) / Megan Ray 3204
----------------------------------- ------------------
Principal activities and review of the business
I am pleased to report that it has been a continued period of
achievement of our goals set for the Company, which augurs well for
our future plans and outlook for all of our projects, which are
summarised below.
The Empire Mine
At the Empire Mine, we successfully increased the open pit oxide
resources at the end of 2017, giving us an all-categories resource
of 21.4 million tons at 0.47% copper for 99,565 tons (90,324
tonnes) of contained copper metal, in addition to significant
credits of gold, silver and zinc. This underpinned the subsequent
work programme in the first part of 2018, which led to the
successful completion of our PEA at the end of April 2018.
The PEA pulled together the Empire Mine's operational mining and
processing planning options, along with our continuing
environmental programme, and produced some very encouraging
conclusions
based on open pit oxide copper production and excluding any
potential revenue from gold, silver or zinc. These were announced
in April 2018, the highlights of which were:
i) 8,124 tonnes of annual copper production, an increase of 16%
above the originally projected output of 7,000 tonnes per annum
ii) Eight year mine life at 0.24% copper cut-off grade
iii) 76% heap leach copper recovery, up from 61% originally estimated
iv) $61.2 million pre-production capex
v) $4,068 per tonne copper cash cost of production
vi) $53.66 million after tax NPV (7.5% discount); $70.58 million (5% discount)
vii) 23.5% IRR after tax
The completion of the PEA gave us a positive base from which to
proceed into our BFS, which is currently underway and scheduled for
completion in 2019. We consider there to be plenty of scope for
improvement, especially in the optimisation of the PEA economics,
both in terms of capital and operating costs.
Additionally, during the period, the Company has increased its
land holding position by 33% to 1,837 acres through the acquisition
of an additional 54 claims in the Horseshoe Block to the north of
the existing Empire Mine claim block, and the Granite claim group
of four claims to the south of the Empire open pit. The Horseshoe
claims are a particularly prospective area for the Company as they
give the Company the ground which contains the northern extension
of the Empire Mine skarn orebody through to the old Horseshoe
lead/zinc/copper mine. The acquisition of the Granite claims
secures the land required for the completion of the southern end of
the Empire open pit, whilst offering potential additional
mineralised extension to the Empire orebody southwards.
Since the beginning of June, five drill rigs have embarked on a
12,200 metre programme of reverse circulation ("RC") and diamond
drilling. The drilling programme has proceeded rapidly and consists
of RC infill drilling aimed at upgrading the present mineral
resources, and step out/exploration drilling to test the ore
potential outside the open pit to the east of the Empire open pit
boundary already identified in the PEA, and along the northern
extension of the Empire skarn orebody towards the Horseshoe Mine.
Additional holes are being drilled for further metallurgical,
geotechnical and hydrological information necessary for inclusion
in the BFS programme.
The step out drilling has been very successful and has already
identified several significant mineralised extensions in previously
untested areas which are outside of the November 2017 Resource
Model reported by Hardrock Consulting. Examples of significant
intersections include 12.2 metres of 0.95% copper, 6.1 metres of
1.09% copper, 3.0 metres of 1.14% copper and 18.3 metres of 0.96%
copper. These figures indicate a potentially serious expansion of
the known orebody and this untested ground is still open to the
east, north and south and, importantly, at depth into the
underlying sulphide zone. We are targeting follow-up drilling into
these areas.
We have also discovered a new zone of surface mineralisation in
the Empire block, now referred to as Red Star. Red Star is located
approximately 330 metres north-northwest of the northern end of the
Empire resource area and is a 20 metre wide surface outcrop across
the structure. The mineralisation is a mix of oxides and sulphides,
with strong chrysocolla and bornite showings, exposed in a heavily
timbered canyon. This is an exciting find, confirming our belief
that the presently identified Empire orebody continues along strike
northwards towards the Horseshoe Mine. We plan to drill Red Star
before the year end.
The infill drilling to date has also shown excellent continuity
within the known mineralised zone with numerous intervals showing
grades in excess of the 0.52% average copper grade in the current
'measured and indicated' resource. For example, high grade
intercepts have been returned, notably 19.8 metres of 1.88% copper,
including 1.6 metres of 8.85%, and 24.7 metres of 1.58% copper and
also including 0.9 metres of 7.72% copper in hole KX18-44,
demonstrating our belief that these results will have a positive
effect on the overall grade and tonnage in the existing resource.
Furthermore the 19.8 metre intercept sits entirely below the Empire
PEA pit shell which should have a further positive effect on the
expansion of the resource in that area. Additionally, our Empire
team will use these higher-grade intervals to continue defining the
deeper, oxide/sulphide transition zone. All new results will be
used to update the resource model and our hope is that continued
drilling results, similar to those already reported, will have a
positive effect on the overall grade and tonnage of the resource,
which will materially enhance the economics of the project. We are
also noting elevated tungsten, gold and silver values associated
with a number of the high grade copper intersections. We will
continue to report new assay figures over the coming weeks as
further drilling and channel sample results are received from the
ALS Global laboratory in Nevada.
In early 2018, I was also very pleased to report that the
results from our two deep exploration core holes, drilled in late
2017, confirmed the presence of favourable ore-hosting geology
below the current oxide resource and the presence of higher grade
polymetallic mineralisation in the skarn structures at depth. Both
of the core holes intersected mineralised skarn over much of their
length and the analytical data from both drill holes intersected
numerous significant intervals of copper, gold, silver, zinc, lead,
and tungsten throughout their depths. The tungsten values were
particularly interesting as they positively reinforced the
Company's consultant's predictions of the Empire system hosting
significant values of tungsten at depth. From these holes we gained
valuable information regarding the polymetallic "roots" of the
mineralised system at the Empire Mine. However, our 2018 drilling
programme has produced five drill hole intercepts containing
predominantly copper sulphide mineralisation as chalcopyrite and
bornite in high-grade vein structures. We are placing significant
importance on the results from hole KX18-47 (5.53% copper, 7.67 g/t
gold, 120 g/t silver), hole KX18-36 (1.14% copper, 1.25 g/t gold),
and hole KXD18-11 (1.61% copper, 0.7g/t gold), because they are
further north of any historical underground mining. The gold and
silver grades are also major considerations, ranging to 7.93 g/t
gold and 256 g/t silver. The sulphide containing interval grading
5.19% copper in hole KXD18-9 is also important in that it is
located adjacent to historical underground workings and is evidence
that previous operations in the vicinity did not mine all the
higher-grade vein material. As we have stated in the past, we
believe that a high-grade feeder system exists below the Empire
oxide resource and these results further confirm the existence of
the sulphide system and orebody, also providing the Empire team the
information necessary to follow up and define a deeper copper
sulphide resource.
Additionally, as part of our deeper sulphide exploration
programme, during early 2018, we gained access to the historical
700 level of the mine. Access was achieved for approximately 1,000
feet, where strong mineralisation was seen. However, underground
conditions were deemed too unsafe to allow sampling or further
access to take place, due to the manner in which the historic
workings had been abandoned in the 1940s. Access to the 1,100 level
has proved more amenable and work will continue at this level.
In summary, our highly skilled and specialised Mackay-based team
of geologists have been gathering information from our drilling and
sampling programme on the skarn orebody which hosts the Empire Mine
mineralisation. Skarn orebodies are complex by nature but, for the
first time in the mine's history, a much clearer picture of the
nature and structure of the mineralisation is being understood,
which makes the future planning and development of the orebody in
its entirety, both in the near-surface oxides and exploration of
the underlying sulphides, a very exciting project. The Empire Mine
and ore system as a whole, including our newly acquired claims, are
presenting a very positive prospect as we progress with our BFS and
exploration programme, and results to date confirm our robust
confidence in both our resources and development plans. Our Empire
Mine development programme offers great potential in the form of
early production from the oxide open pit as well as excellent
exploration potential from both oxides along the lateral strike
extensions, especially to the north into the Horseshoe Block, and
greater tonnage and higher grade potential of the underlying
sulphides at depth.
Bighorn and Redcastle Cobalt Projects
Given the world's growing need for battery metals and cobalt in
particular, our Redcastle and Bighorn properties represent a very
timely and positive acquisition for the Company, strategically
located in the USA's only prospective cobalt region, the Idaho
Cobalt Belt, approximately 100 miles north of the Empire Mine. In
early 2018 we announced the results of our reconnaissance programme
undertaken at the end of 2017. These confirmed that all 46 surface
grab samples taken from the Company's iron-rich cobalt/copper
claims showed cobalt values above detection limits and ranged from
2 ppm to 3,120 ppm or 0.31% cobalt. The sample results showing
cobalt values greater than 100 ppm and copper values greater than
0.5% were considered significant and have proved a firm base from
which to start our 2018 exploration programme, which is now well
underway. It is hoped that before the end of the 2018 field season,
a short shallow drilling programme on the Bighorn property and,
conditions allowing, the Redcastle property, will also be
completed.
Gordon Lake High Grade Gold Project
In February 2018, the Company signed an option agreement with
ExGen Resources Inc to earn into an 80% interest in the Gordon Lake
high grade, shear-hosted gold exploration project located 68 miles
northeast of Yellowknife, in the Northwest Territories, Canada. The
property consists of two mining leases covering an area of 1505
acres and contains 17 zones of high grade shear hosted gold
mineralisation, over a one kilometre strike length. 59 mineralised
diamond core holes have previously been drilled into four zones
returning high grades of gold, including 4.8m at 34.1 g/t and 7.4m
at 19.4 g/t. It is proposed that Aurora Geosciences of Yellowknife
will be commissioned to complete a project review and report, with
a view to proposing an exploration programme for 2019.
Outlook
Despite recent fluctuations in metal prices, copper and cobalt
in particular, I believe we can look forward into 2019 and beyond
with confidence and optimism. Market expectations are that both
copper and cobalt prices will recover on the back of underlying
strong fundamentals, which do not appear to have changed. It is
also reassuring to note that the Company is operating in
geopolitically stable jurisdictions and that our projects represent
a diversified and robust portfolio of projects with early
production potential and significant exploration upside, across a
diverse suite of in-demand metals, including copper, cobalt, gold
and tungsten.
This diversification, combined with our team of highly
professional staff, consultants and advisers, will allow us to
continue to adapt our work programmes to market conditions as
appropriate in order to maximise medium and long-term benefit for
the Company and our various stakeholders. We also look forward to
obtaining the New York OTCQX listing and to engaging directly with
the North American market, where our projects are located.
Dennis Thomas
Chief Executive Officer
Financial Overview
On 1 January 2018 the Company changed its functional currency
from Sterling to US Dollars. These interim financial results are
therefore reported in US Dollars and the 30 June 2017 comparatives
have been restated into US Dollars. At 31 December 2017 the Company
used the US Dollar, rather than Sterling, as its presentational
currency. These unaudited interim financial results have been
prepared using accounting policies consistent with International
Financial Reporting Standards.
The Group reports a loss for the six months ended 30 June 2018
of $679,817 (2017: $727,790), of which $672,393 (2017: $727,790) is
attributable to the owners of the Company. This loss is after
charging $99,629 in share-based payments relating to options and
warrants issued by the Company, and $47,384 relating to foreign
exchange, both of which are included in administrative expenses.
Net assets totalled $9.6 million, including $7.53 million relating
to the Empire Mine, and $2.95 million in cash and receivables.
In June 2018 the Company completed a GBP3 million ($4.05
million) placing and subscription of 85,714,286 shares at 3.5 pence
per share. On 14 August 2018 the Company consolidated its share
capital on the basis of one new share for every 10 existing shares,
reducing its issued share capital from 318,000,759 shares to
31,800,075 shares. This consolidation was required to enable the
Company to proceed with a proposed dual listing on the New York
OTCQX Market. With the Company's assets located in North America,
and a focus on Idaho, the Board considered it appropriate that the
Company also listed on a recognised US exchange, thereby offering
improved access to the Company's shares to a wider range of North
American investors. The OTCQX listing is scheduled for early
October. The Company's primary listing will remain on AIM.
Further to the consolidation the Company also adjusted
outstanding options and warrants in the same ratio. As a result,
the Company has 1,523,554 warrants in issue, 327,094 exercisable at
60 pence and expiring on 31 December 2019, 127,962 exercisable at
21 pence and expiring on 14 June 2020, 641,156 exercisable at 40
pence and expiring on 28 June 2020, and 427,342 exercisable at 35
pence and expiring on 30 June 2020. The Company also has 1,225,000
options issued to Directors and officers, exercisable at 45 pence
and expiring on 21 June 2020.
During the period Marcus Edwards-Jones, previously Non-Executive
Chairman, was appointed Executive Chairman, and Jason Riley, CEO of
ExGen Resources Inc, the Company's 20% partner in the Empire Mine
and the Gordon Lake gold project, was appointed a Non-Executive
Director. From 1 September 2018 Ryan McDermott, CEO of Konnex
Resources Inc and General Manager of the Empire Mine, has also been
appointed Chief Operating Officer of the Company.
The Directors recognise the importance of good corporate
governance, and have a policy that the Company will work to
implement the recommendations of the Quoted Companies Alliance's
Corporate Governance Code 2018. The Company will publish its
initial Corporate Governance Statement on the Company's website by
the required date of 28 September 2018. This Statement will set out
how the Company complies with the code, as well as an explanation
of any departures from the code. The Statement will be reviewed
annually.
Richard Wilkins
Chief Financial Officer
Unaudited Unaudited Audited
6 months to
6 months 30 June
Condensed consolidated income to 30 June 2017 Year to 31
statement 2018 Restated December 2017
Note $ $ $
Revenue - - -
Cost of Sales (13,516) (2,274) (3,824)
Gross loss (13,516) (2,274) (3,824)
------------ ------------ ---------------
Administrative expenses (668,010) (423,679) (1,053,902)
Exceptional items 3 - (301,837) (302,867)
Total administrative expenses (668,010) (725,516) (1,356,769)
------------ ------------ ---------------
Loss from operations 4 (681,526) (727,790) (1,360,593)
Finance income 1,709 - 1,903
Loss before taxation (679,817) (727,790) (1,358,690)
Taxation - - -
------------ ------------ ---------------
Loss for the period (679,817) (727,790) (1,358,690)
------------ ------------ ---------------
Loss attributable to:
* Owners of the parent (672,393) (727,790) (1,346,635)
* Non-controlling interests (7,424) - (12,055)
------------ ------------ ---------------
(679,817) (727,790) (1,358,690)
------------ ------------ ---------------
Basic and diluted loss per share
- cents 5 (2.80) (7.30) (8.20)
------------ ------------ ---------------
The revenue, expenditures and operating result for each period
is derived from acquired and continuing operations in North America
and the United Kingdom.
Condensed consolidated statement of
comprehensive income Unaudited Unaudited Audited
6 months
6 months to 30 June Year to
to 30 June 2017 31 December
2018 Restated 2017
$ $ $
------------- ------------- -------------
Loss for the period and total comprehensive
income for the period (679,817) (727,790) (1,358,690)
Currency translation differences - (72,153) 204,227
------------- ------------- -------------
Total comprehensive income for the
period (679,817) (799,943) (1,154,563)
------------- ------------- -------------
Total comprehensive income for the
period attributable to:
Owners of the parent company (672,393) (799,943) (1,142,408)
Non-controlling interests (7,424) - (12,055)
------------- ------------- -------------
(679,817) (799,943) (1,154,563)
------------- ------------- -------------
Condensed consolidated statement
of
financial position Unaudited Unaudited Audited
30 June
30 June 2017 31 December
Note 2018 Restated 2017
$ $ $
------------ ------------ ------------
Non-current assets
Property, plant and equipment 6 7,531,057 3,300,116 5,282,596
Intangible assets 7 253,522 - 67,569
Total non-current assets 7,784,579 3,300,116 5,350,165
------------ ------------ ------------
Current assets
Trade and other receivables 8 449,009 3,987,425 14,250
Cash and cash equivalents 2,501,811 1,130,738 1,903,742
Total current assets 2,950,820 5,118,163 1,917,992
------------ ------------ ------------
Total assets 10,735,399 8,418,279 7,268,157
------------ ------------ ------------
Current liabilities
Trade and other payables 363,772 885,846 199,762
Total current liabilities 363,772 885,846 199,762
------------ ------------ ------------
Non-current liabilities
Provisions 9 757,702 761,529 767,444
------------ ------------ ------------
Total non-current liabilities 757,702 761,529 767,444
------------ ------------ ------------
Total liabilities 1,121,474 1,647,375 967,206
------------ ------------ ------------
Net assets 9,613,925 6,770,904 6,300,951
------------ ------------ ------------
Equity
Share capital 10 - - -
Share premium account 12,927,703 8,648,841 9,034,541
Retained deficit (3,449,604) (2,277,036) (2,876,840)
Translation reserve (18,588) 225,206 (18,588)
Capital and reserves attributable
to the owners of the parent company 9,459,511 6,597,011 6,139,113
Non-controlling interests 154,414 173,893 161,838
Total equity 9,613,925 6,770,904 6,300,951
------------ ------------ ------------
Condensed consolidated statement of changes in equity -
restated
Share premium Retained Translation Total Non-controlling Total
deficit reserve interests Equity
$ $ $ $ $ $
Balance at 1 January 2017 2,432,093 (1,634,314) 297,359 1,095,138 - 1,095,138
Loss for the period - (727,790) - (727,790) - (727,790)
Other comprehensive income for
the period - - (72,153) (72,153) - (72,153)
-------------- ------------ ------------ ---------- ---------------- ----------
Total comprehensive income for
the period - (727,790) (72,153) (799,943) - (799,943)
-------------- ------------ ------------ ---------- ---------------- ----------
Shares issued in the period 6,964,841 - - 6,964,841 - 6,964,841
Share issue expenses (902,944) - - (902,944) - (902,944)
Share-based payments - 85,068 - 85,068 - 85,068
Exchange adjustments 154,851 - - 154,851 - 154,851
Acquisition of non-controlling
interest - - - - 173,893 173,893
-------------- ------------ ------------ ---------- ---------------- ----------
Total contribution by owners 6,216,748 85,068 - 6,301,816 173,893 6,475,709
-------------- ------------ ------------ ---------- ---------------- ----------
Balance at 30 June 2017 8,648,841 (2,277,036) 225,206 6,597,011 173,893 6,770,904
Loss for the period - (618,845) - (618,845) (12,055) (630,900)
Other comprehensive income for
the period - - (243,794) (243,794) - (243,794)
-------------- ------------ ------------ ---------- ---------------- ----------
Total comprehensive income for
the period - (618,845) (243,794) (862,639) (12,055) (874,694)
-------------- ------------ ------------ ---------- ---------------- ----------
Shares issued in the period 70,523 - - 70,523 - 70,523
Share issue expenses (50,146) - - (50,146) - (50,146)
Share-based payments - 19,041 - 19,041 - 19,041
Exchange adjustments 365,323 - - 365,323 - 365,323
-------------- ------------ ------------ ---------- ---------------- ----------
Total contribution by owners 385,700 19,041 - 404,741 - 404,741
-------------- ------------ ------------ ---------- ---------------- ----------
Balance at 31 December 2017 9,034,541 (2,876,840) (18,588) 6,139,113 161,838 6,300,951
Loss for the period - (672,393) - (672,393) (7,424) (679,817)
Other comprehensive income for -
the period - - - - -
-------------- ------------ ------------ ---------- ---------------- ----------
Total comprehensive income for
the period - (672,923) - (672,393) (7,424) (679,817)
-------------- ------------ ------------ ---------- ---------------- ----------
Shares issued in the period 4,195,901 - - 4,195,901 - 4,195,901
Share issue expenses (302,739) - - (302,739) - (302,739)
Share-based payments - 99,629 - 99,629 - 99,629
Total contribution by owners 3,893,162 99,629 - 3,992,791 - 3,992,791
-------------- ------------ ------------ ---------- ---------------- ----------
Balance at 30 June 2018 12,927,703 (3,449,604) (18,588) 9,459,511 154,414 9,613,925
-------------- ------------ ------------ ---------- ---------------- ----------
Condensed consolidated statement
of cash flows Unaudited Unaudited Audited
6 months
6 months to 30 June Year to
to 30 June 2017 31 December
2018 Restated 2017
$ $ $
------------ ------------ -------------
Loss before taxation (679,817) (727,790) (1,358,690)
Adjustments for:
Depreciation
Share-based payments 99,629 85,068 104,109
Exchange differences - 21,999 408,639
Other reserve movements (9,742) - 161,838
------------ ------------ -------------
(589,930) (620,723) (684,104)
Changes in working capital
(Increase)/decrease in trade and
other receivables (7,543) (12,943) 71,850
Increase/(decrease) in trade and
other payables 164,010 64,461 (140,415)
------------ ------------ -------------
Cash (used in)/generated from operating
activities (433,463) (569,205) (752,669)
------------ ------------ -------------
Investing activities
Purchase of intangible assets (185,953) - (67,569)
Purchase of property, plant and
equipment (2,248,461) (1,112,199) (2,723,300)
Cash transferred with business
combination - - (798,664)
Cash acquired with business - 144,458 144,456
------------ ------------ -------------
Net cash outflow from investing
activities (2,434,414) (967,741) (3,445,077)
------------ ------------ -------------
Cash flows from financing activities
Proceeds from the issuance of ordinary
shares 4,195,901 6,964,841 7,035,364
Share calls waiting receipt (427,216) (3,883,883) -
Share-issue expenses (302,739) (902,944) (953,090)
Share-issue expenses waiting payment - 466,548 -
Net cash inflow from financing
activities 3,465,946 2,644,562 6,082,274
------------ ------------ -------------
Cash and cash equivalents at beginning
of period 1,903,742 1,107,616 1,884,528
Net increase in cash and cash equivalents 598,069 23,122 19,214
------------ ------------ -------------
Cash and cash equivalents at end
of period 2,501,811 1,130,738 1,903,742
------------ ------------ -------------
1. Basis of preparation and principal accounting policies
The condensed consolidated interim financial information in this
report has been prepared under the measurement principles of
International Financial Reporting Standards ('IFRS') as adopted by
the European Union ('IFRS as adopted by the EU'), using accounting
policies and methods of computation consistent with the Group's
Consolidated Financial Statements for the year ended 31 December
2017.
The Group has adopted two International financial Reporting
Standards ('IFRSs') for the period to 30 June 2018. IFRS9:
Financial Instruments and IFRS15: Revenue from Contracts with
Customers. There was no effect on the Group's consolidated income
or net assets.
Restatement
On 1 January 2018 the Company changed its functional currency
from Sterling to US dollars. The Company's results at 31 December
2017 were presented in US dollars. The change has been applied
prospectively from 1 January 2018. There was no effect on the
Group's consolidated income or net assets. The Group's interim
financial statements for the six month period ended 30 June 2017
have been restated in US dollars.
The condensed consolidated interim financial information was
approved for issue by the Board on 18 September 2018.
This condensed consolidated interim financial information has
not been audited and does not include all of the information
required for full annual financial statements. While the financial
figures included within this interim report have been computed in
accordance with IFRS applicable to interim periods, this report
does not contain sufficient information to constitute an interim
financial report as set out in International Accounting Standard
34: Interim Financial Reporting.
Basis of consolidation
Basis of consolidation
The condensed consolidated financial information incorporates
the financial statements of the Company and entities controlled by
the Company (its subsidiaries) (together the "Group") for each
period. The results of subsidiaries acquired or disposed of during
the period are included in the consolidated income statement from
the effective date of acquisition, or up to the effective date of
disposal, as appropriate.
Control is achieved where the Company has the power to govern
the financial and operating policies of an entity so as to obtain
benefits from its activities.
Non-controlling interests in the net assets of consolidated
subsidiaries are presented separately from the Group's equity.
Non-controlling interests consist of the amount of those interests
at the date of the original business combination and the
non-controlling interest's share of changes in equity since the
date of the combination.
Where necessary, adjustments are made to the financial
statements of subsidiaries to bring the accounting policies used
into line with those used by the Group. All intra group
transactions, balances, income and expenses are eliminated on
consolidation.
2. Information on the Group
Phoenix Global Mining Limited is engaged in exploration and
mining activities, primarily precious and base metals, primarily in
the United States of America.
The Company is domiciled and incorporated in the British Virgin
Islands (registered number 1791533). The address of its registered
office is OMC Chambers, Wickhams Cay 1, Road Town, Tortola, British
Virgin Islands.
3. Exceptional costs
Unaudited Unaudited Audited
6 months
6 months to 30 June Year to
to 30 June 2017 31 December
2018 Restated 2017
$ $ $
------------- ------------ -------------
Expenses of Initial Public Offering - 301,837 302,867
------------ ------------ -------------
4. Share-based payments
Total administrative expenses include share-based payments of
$99,629; 30 June 2017: $85,068; 31 December 2017: $104,109. The
related credits to equity are taken to the retained deficit.
5. Loss per share Unaudited Unaudited Audited
6 months
6 months to 30 June Year to 31
to 30 June 2017 December
2018 Restated 2017
$ $ $
------------------- ------------------ -----------------
Loss for the period attributable
to equity holders of the parent
company (672,393) (727,790) (1,346,635)
------------------- ------------------ -----------------
Number Number Number
Weighted average number of ordinary
shares for the purposes of basic
and diluted loss per share 23,657,058 9,913,395 16,498,154
-------------------------------------- ------------------- ------------------ -----------------
Loss per share - basic and diluted
(cents) (2.80) (7.30) (8.20)
------------------- ------------------ -----------------
On 14 August 2018 the Company consolidated its share capital on
the basis of one new ordinary share for every ten existing shares,
reducing the number of issued shares from 318,000,759 to 31,800,075
shares at that date.
As required by IAS33: Earnings per Share, the calculation of
basic and diluted earnings per share for all periods has been
presented based on the new number of shares in issue.
6. Property, plant and equipment
Mining
Property Mining development Total
Assets
$ $ $
---------- ------------------- ----------
Cost or valuation
At 1 January 2017 - 1,429,987 1,429,987
Exchange movements - 4,377 4,377
At date of acquisition of Konnex - 1,434,364 1,434,364
Reclassification 1,434,364 (1,434,364) -
-------------------
Fair value adjustment on acquisition
of subsidiary 684,338 - 684,338
Additions 1,112,199 - 1,112,199
Exchange adjustments 69,215 - 69,215
---------- ------------------- ----------
At 30 June 2017 restated 3,300,116 - 3,300,116
Additions 1,611,101 - 1,611,101
Exchange adjustments 371,379 - 371,379
---------- ------------------- ----------
At 31 December 2017 5,282,596 - 5,282,596
Additions 2,248,461 - 2,248,461
At 30 June 2018 7,531,057 - 7,531,057
---------- ------------------- ----------
Depreciation
At 30 June 2017, 31 December 2017 and - -
30 June 2018 -
---------- ------------------- ----------
Net book value:
30 June 2017 3,300,116 - 3,300,116
---------- ------------------- ----------
31 December 2017 5,282,596 - 5,282,596
---------- ------------------- ----------
30 June 2018 7,531,057 - 7,531,057
---------- ------------------- ----------
Mining development assets relate to the past producing Empire
Mine copper - gold - silver - tungsten project in Idaho, USA. The
Empire Mine has not yet recommenced production and no depreciation
has accordingly been charged in the statement of comprehensive
income. There has been no impairment charged in any period due to
the early stage in the Company's project to reactivate the
mine.
A provision for decommissioning costs of $100,000 has been
recognised at 30 June 2018 and 31 December 2017 based on directors'
estimates and taking into account appropriate qualified
professional advice. The cost of the decommissioning asset is
included within mining development assets.
7. Intangible assets
Exploration
and evaluation
expenditure Total
$ $
---------------- --------
Cost or valuation
At 1 January 2017 - -
---------------- --------
Additions - -
At 30 June 2017 - -
Additions 67,569 67,569
---------------- --------
At 31 December 2017 67,569 67,569
Additions 185,953 185,593
---------------- --------
At 30 June 2018 253,522 253,522
---------------- --------
Exploration and evaluation expenditure relates to the Bighorn
and Redcastle properties for the Group's two claim blocks on the
Idaho Cobalt Belt in the USA of $98,342 (31 December 2017 $67,569,
30 June 2017 $nil) and to Gordon Lake where the Group has an
exclusive option to acquire 80% of the high grade Gordon Lake gold
property in the Northwest Territories, Canada of $155,180 (31
December 2017 $nil, 30 June 2017 $nil).
8. Trade and other receivables Unaudited Unaudited Audited
6 months
6 months to 30 June Year to
to 30 June 2017 31 December
2018 Restated 2017
$ $ $
------------ ------------ -------------
Other receivable 19,813 12,943 14,250
Issued shares called but not
paid 427,216 3,974,482 -
Prepayments 1,980 - -
------------ ------------ -------------
449,009 3,987,425 14,250
------------ ------------ -------------
9. Provisions Unaudited Unaudited Audited
6 months
6 months to 30 June Year to
to 30 June 2017 31 December
2018 Restated 2017
$ $ $
------------ ------------ -------------
Decommissioning provision 100,000 105,211 109,742
Potential future royalties payable 657,702 656,318 657,702
------------ ------------ -------------
757,702 761,529 767,444
------------ ------------ -------------
10. Share capital Unaudited Unaudited Audited
30 June 30 June 31 December
2018 2017 2017
Number Number Number
------------ ------------ ------------
Allotted and issued
Ordinary shares with no par value 318,000,759 229,755,522 229,755,522
------------ ------------ ------------
At 30 June 2018, the Ordinary Shares rank pari passu. There have
been no changes to the voting rights of the ordinary shares since
30 June 2017.
In June 2018 the Company completed a GBP3 million ($4.05
million) placing and subscription at 3.5p per share issuing
85,714,286 shares. On 14 August 2018 the Company consolidated its
share capital on the basis of one new share for every ten existing
shares, reducing its issued share capital from 318,000,759 shares
to 31,800,075 shares. This consolidation enables the Company to
proceed with a proposed dual listing on the New York OTCQX Market,
scheduled for early October 2018. The Company will remain listed on
AIM.
Notes
Phoenix Global Mining Ltd (AIM: PGM) is a North American
focused, base and precious metal explorer and developer, which is
fast-tracking the historically-producing Empire Mine in Idaho, USA,
back into production, and exploring for cobalt in Idaho and gold in
Canada.
PGM's flagship project is a brownfield, past producing, copper,
gold, silver, zinc and tungsten underground mine, the Empire Mine
near Mackay in Idaho. PGM acquired an 80% interest in the property
in 2015. Based on a total of 315 drill holes a NI 43-101 compliant
oxide resource was completed in late 2017. A PEA (preliminary
economic assessment) for an open pit heap leach solvent extraction
and electrowinning (SX-EW) mine was completed in April 2018 with a
design capacity of 8,000 tonnes of copper cathode a year. In June
2018 a campaign consisting of 12,200 metres of reverse circulation
(RC) and diamond core drilling was started. This programme is
designed to upgrade and increase the oxide reserves, provide
samples for ongoing metallurgical testwork, geotechnical and
hydrological studies and condemnation drilling for the heap leach
pad site, waste dump and plant site. At the same time the
consultants were appointed to complete a NI 43-101 compliant BFS
(bankable feasibility study). The lead consultant is RPM Global who
are supported by Samuel Engineering, both based in Denver,
Colorado. Cascade Earth Sciences of Pocatello, Idaho have been
working on environmental and permitting issues since 2016 and form
part of the BFS team. Golder Associates are designing the heap
leach pad and ponds, and Call and Nicholas are carrying out the
open pit slope stability studies.
At Empire, it is estimated that only 5% of the potential ore
system has been explored to date and, accordingly, there is
significant opportunity to increase the resource through phased
exploration; the current resource relates to the oxide resource
only, which remains open along strike and does not include the
deeper, higher grade sulphides. In addition, PGM has increased the
claim area from 813 acres at the time of its acquisition to 1,837
acres, mainly to the northwest, and in so doing has increased the
potential for additional oxide and sulphide resources by a total
strike length of approximately 1,500 metres towards another
brownfield mine, the Horseshoe Mine, which is now within the
property boundary.
The Company also holds two prospective cobalt properties in
Idaho, US, which are located north of the Empire Mine. These are
situated close to the town of Cobalt and are close to projects
being advanced by Canadian junior miners, including eCobalt
Solutions and First Cobalt. Exploration will continue during 2018
to identify drilling targets. Fieldwork is already underway.
The Company has also acquired an exclusive option to explore and
develop the Gordon Lake Project, in the Northwest Territories,
Canada, which is a high-grade shear hosted gold project comprising
of 17 known mineralised zones of which only four have been tested
with 59 diamond drill holes. The Company will proceed to examine
the optimal way forward to develop the project as a low-cost
underground gold producer.
With a management team that has successfully constructed,
commissioned and operated mines and low risk, mining-friendly
jurisdictions with excellent infrastructure, Phoenix is looking to
fulfil its ambitions to become a mid-tier base metal, precious
metal and cobalt production company, offering exposure to three
high value and high demand metals with compelling demand/supply
fundamentals.
More details on the Company, its assets and its objectives can
be found on PGM's website at https://www.pgmining.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.
END
IR BLGDCGSBBGII
(END) Dow Jones Newswires
September 19, 2018 02:00 ET (06:00 GMT)
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