TIDMALK
RNS Number : 5320R
Alkemy Capital Investments PLC
27 October 2023
Alkemy Capital Investments Plc
Interim Results for the Six Month Ended 31 July 2023
Alkemy Capital Investments plc ("Alkemy" or the "Company")
announces its unaudited financial statements for the 6 months ended
31 July 2023 ("Financial Statements").
Chairman's Statement
I have great pleasure in presenting our interim results for the
period ended 31 July 2023.
KEY OPERATIONAL HIGHLIGHTS FOR THE PERIOD:
-- Class 4 Feasibility Study completed by Wave International for
Australia's first stand-alone lithium sulphate processing facility
at the Boodarie SIA, Port Hedland
-- Tees Valley Lithium shortlisted by a major OEM as the
preferred European lithium refinery for portion of its lithium
supply chain
-- Oversubscribed private placement and directors subscription
-- Grant funding secured from Innovate UK
Class 4 Feasibility Study - Boodarie Lithium sulphate
refinery
In August 2023, Alkemy's wholly-owned subsidiary Port Hedland
Lithium Pty Ltd ("PHL") announced the completion of a Class 4
Feasibility Study for its lithium sulphate refinery at Boodarie,
Port Hedland.
The Boodarie refinery has been designed to process spodumene
concentrate from various potential Australian mines, producing a
lithium sulphate monohydrate for Alkemy's wholly-owned subsidiary
Tees Valley Lithium's ("TVL") Wilton refinery in the UK.
PHL will develop a stand-alone merchant lithium sulphate
refinery at the Boodarie SIA located just south of the proposed new
Lumsden Point Critical Minerals Wharf in Port Hedland, the world's
largest export port by volume, with established road and rail
infrastructure connections to Western Australia's world-class
hard-rock lithium resources.
Powered by local renewable energy, each of the four proposed
lithium sulphate trains at Boodarie will refine approximately
180,000 tpa of locally mined spodumene concentrate to produce
40,000 tpa of lithium sulphate, with lithium content equivalent to
24,000 tpa lithium hydroxide. It is anticipated that lithium
sulphate produced by PHL will be processed further by TVL before
sale to end customers, although PHL will retain flexibility to
provide lithium sulphate to third parties should demand arise.
This new Pilbara to Teesside supply chain epitomises the new
critical minerals supply chains made possible under the recently
signed free trade agreement between Australia and the UK and will
leverage the competitive strengths of Australia in mining and
minerals processing and the UK in chemical refining.
The feasibility study was prepared by Wave International, a
leading engineering consultancy firm with significant experience in
developing lithium hydroxide projects worldwide.
Study highlights and economics:
-- Initial capital cost for Train 1 of US$322 million
-- Gross revenues per annum for Train 1 of US$396 million
-- Internal rate of return (IRR) of 18%
-- Post-tax net present value (NPV) for Train 1 of $293 million
-- NPV for 4 Trains of US$1.0 billion, which combined with
Wilton's NPV of US$2.7 billion gives a total NPV of US$3.7 billion
across both projects when all 4 Trains are built
In addition, in May 2023 an ecological baseline survey for the
Boodarie lithium sulphate refinery site was completed by AECOM
Australia which included a detailed flora and fauna survey and the
publication of a full report in accordance with the Environmental
Protection Act 1986 and other applicable regulations and
standards.
Feedstock and partnerships
During the period we continued to advance our discussions with
counterparties for both feedstock and offtake.
Earlier this month we announced that following extensive
technical and commercial due diligence, TVL has been shortlisted by
a major automotive OEM as the preferred European lithium refiner
for a portion of its lithium supply chain. TVL is in discussions
with several OEMs, encompassing proposals ranging from sourcing of
raw materials and refining of those materials to lithium hydroxide,
to toll treatment of lithium raw materials acquired or to be
acquired by the OEMs.
Being shortlisted by major industrial players validates Alkemy's
two-stage processing strategy, the engineering studies conducted to
date, and our team's execution capability. Alkemy is continuing to
work with these OEMs to satisfy their requirements with a view to
concluding legally binding agreements as soon as possible.
OEMs have also confirmed the ability to benefit from provisions
of the US-Australia Climate, Critical Minerals, and Clean Energy
Transformation Compact and the European Critical Minerals Act and
Batteries Regulations.
Alkemy continues in advanced discussions with a number of
potential key feedstock suppliers, including several
industry-leading lithium miners, well known automakers, global
commodity trading houses and battery recyclers.
Alkemy is also advancing discussions with several other
potential customers for its lithium hydroxide, including major
European gigafactories and chemicals companies and expects
significant offtake and/or partnership deals to be entered into in
due course.
These customers are increasingly focussed on price, transparency
and low embedded carbon, when sourcing high grade lithium products
and have indicated their desire to partner with Alkemy due to our
market leading credentials in these areas.
Fundraising and grant funding
In May 2023 we completed a successful private placing and
director subscription raising GBP1.35 million. The placing was
oversubscribed and supported by existing and new investors as well
as by the directors who contributed GBP430,000 in total.
In August 2023 Alkemy received a rebate of approximately
GBP230,000 from HMRC under its Research and Development tax relief
programme which permits companies to claim a rebate of certain
qualifying R&D related expenses incurred during the previous
financial year.
In September 2023 we announced that TVL together with Weardale
Lithium had secured a joint funding package of approximately
GBP613,000, including a grant of approximately GBP430,000 from
Innovate UK. The funding provided under the Launchpad: Net Zero,
CR&D Tees Valley, R2 competition supports outstanding
innovation projects that grow activities in the Net Zero innovation
cluster centred on Tees Valley and supports the Government's goals
in the Levelling Up White Paper.
We continue advancing discussions with financiers for the
funding of our LSM and LHM processing facilities and have received
significant inbound interest including from private equity,
structured bond providers and institutions.
As we intend to primarily finance and operate the LSM and LHM
facilities via our operating subsidiaries TVL and PHL, it is
anticipated that there will be no significant dilution to Alkemy's
shareholders as part of the proposed financing process.
Market recognition and outlook
During the period we have continued to make significant progress
in a challenging macro environment.
The pace to decarbonise however continues to accelerate and with
a growing need for lithium hydroxide and now a growing preference
from western OEM's to source lithium hydroxide using more local
supply chains, Alkemy is well positioned to benefit from these
changes.
The support received from third parties including major OEMs
provides further validation of our proposed lithium refining
strategy. The rapid completion of due diligence to the satisfaction
of certain OEMs is testament to the quality of the work undertaken
by our commercial and technical teams and confirms our wider
business case.
Our focus remains on supporting our potential partners' lithium
strategies and concluding commercial negotiations and will update
the market in due course as these arrangements become binding.
We would like to take this opportunity to thank our shareholders
for their continued support and look forward to reporting on our
progress during 2023 as we deliver on our strategy.
Paul Atherley
Non-Executive Chairman
27 October 2023
STATEMENT OF COMPREHENSIVE INCOME
for the period ended 31 July 2023
For six For the Year ended
months six months 31 January
ended ended 31 2023
31 July July 2022 (audited)
2023 (unaudited)
(unaudited)
GBP GBP GBP
Note
Administrative expenses (947,423) (708,890) (1,298,002)
Project Development
costs (215,461) (649,397) (1,298,011)
Business Development
costs - - (12,866)
Foreign exchange
gains / (losses) 960 (7,777) (34,344)
------------ -------------------- ------------
Operating profit (1,161,924) (1,366,064) (2,643,223)
Finance costs - (1,535) (1,536)
------------ -------------------- ------------
Loss before taxation (1,161,924) (1,367,599) (2,644,759)
Income tax - - -
------------ -------------------- ------------
Loss after taxation (1,161,924) (1,367,599) (2,644,759)
Other Comprehensive
income
R&D tax credit 95,278 - -
Exchange gains /
(losses) on translation
of foreign operations 6,609 (978) (2,645)
------------ -------------------- ------------
Total other comprehensive
income 101,887 (978) (2,645)
Total comprehensive
loss
for the year (1,060,037) (1,368,577) (2,647,404)
------------ -------------------- ------------
Earnings per share 9
Basic and diluted ( GBP per
share) (0.148) (0.228) (0.402)
------------ -------------------- ------------
The accompanying notes form an integral part of the financial
information.
STATEMENT OF FINANCIAL POSITION
As at 31 July 2023
Note At 31 At 31 At 31
July 2023 July 2022 January
(unaudited) (unaudited) 2023 (audited)
GBP GBP GBP
ASSETS
Non current assets
Intangibles - Project development
costs 302,499 - 298,813
Total Non current assets 302,499 - 298,813
Current assets
Trade and other receivables 8 392,298 15,197 212,125
Restricted cash - 6,598 -
Cash and cash equivalents 40,307 13,242 12,356
Total current assets 432,605 35,037 224,481
Total assets 735,104 35,037 523,294
EQUITY
Equity Attributable to Owners
of the company
Share capital 10 144,000 120,000 144,000
Share premium 2,413,243 1,279,094 2,413,243
Share based payments 126,053 - 63,221
Foreign exchange reserve 3,964 (978) (2,645)
Share to issue reserve 872,162 - -
Retained earnings (4,509,055) (2,165,249) (3,442,409)
Total equity (949,633) (767,133) (824,590)
LIABILITIES
Current liabilities
Trade and other payables 11 1,323,448 635,911 1,021,595
Borrowings 361,289 166,259 326,289
Total current liabilities 1,684,737 802,170 1,347,884
TOTAL EQUITY AND LIABILITIES 735,104 35,037 523,294
The accompanying notes form an integral part of the financial
information.
This report was approved by the board and authorised for issue
on 27 October 2023 and signed on its behalf by:
Paul Atherley
Non-Executive Chairman
STATEMENT OF CHANGES IN EQUITY
for the year ended 31 July 2023
Share Share Share Foreign Retained Total
capital Premium Based Payments Exchange Earnings
Reserve
GBP GBP GBP GBP GBP GBP
--------- ---------- ---------------- ---------- ------------- ------------
As at 1 February
2022 120,000 1,279,094 - - (797,650) 601,444
Loss for the year - - - - (2,644,759) (2,644,759)
Foreign exchange
losses on translation
of overseas subsidiaries - - - (2,645) - (2,645)
--------- ---------- ---------------- ---------- ------------- ------------
Total Comprehensive
income - - - (2,645) (2,644,759) (2,647,404)
Transactions with
owners:
1,158
Issue of shares 24,000 1,134,149 - - - 149
Issue of options - - 63,221 - - 63,221
--------- ---------- ---------------- ---------- ------------- ------------
Total transactions
with owners 24,000 1,134,149 63,221 - - 1,221,370
Balance at 31 January
2023 144,000 2,413,243 63,221 (2,645) (3,442,409) (824,590)
--------- ---------- ---------------- ---------- ------------- ------------
Share Share Share Shares Foreign Retained Total
capital Premium Based to Issue Exchange Earnings
Payments Reserve Reserve
GBP GBP GBP GBP GBP GBP GBP
--------- ---------- ------------ ---------- ------------ ------------ ------------
As at 1 February
2023 144,000 2,413,243 63,221 - (2,645) (3,442,409) (824,590)
Loss for the year - - - - - (1,066,646) (1,066,646)
Foreign exchange
losses on translation
of overseas subsidiaries - - - - 6,609 - 6,609
--------- ---------- ------------ ---------- ------------ ------------ ------------
Total Comprehensive
income - - - - 6,609 (1,066,646) (1,060,037)
Transactions with
owners:
Issue of shares - - - - - - -
Issue of options - - 62,832 - - - 62,832
Shares to issue - - - 872,162 - - 872,162
--------- ---------- ------------ ---------- ------------ ------------ ------------
Total transactions
with owners - - 63,221 872,162 - - 934,994
Balance at 31
July 2023 144,000 2,413,243 126,053 872,162 3,694 (4,509,055) (949,633)
--------- ---------- ------------ ---------- ------------ ------------ ------------
The accompanying notes form an integral part of the financial
information.
STATEMENT OF CASHFLOWS
for the period ended 31 July 2023
Six months Six months Year
ended ended ended
31 July 31 July 31 January
2023 (unaudited) 2022 (unaudited) 2023 (audited)
GBP GBP GBP
Loss before tax (1,066,646) (1,367,599) (2,644,759)
Adjusted for:
Share based payments 62,832 - 63,221
Expenditure met directly
by funding provider 35,000 136,289
(Increase)/decrease in
receivables (180,173) (15,124) (212,052)
(Decrease)/Increase in
trade creditors 301,853 123,197 339,705
------------------ ------------------ -----------------
Net cash used in operating
activities (847,134) (1,259,526) (2,317,596)
Investing activities
Payments for intangible
assets (3,686) - (51,475)
------------------ ------------------ -----------------
Net cash outflow from
investigating activities (3,686) - (51,475)
Financing activities
Increase in restricted -
funds (6,598) -
Funds received against 872,162
shares to issue - -
Cash from issue of Ordinary
shares - - 1,080,149
Proceeds from short term
borrowings - 166,259 190,000
------------------ ------------------ -----------------
Net cash from financing
activities 872,162 159,661 1,270,149
Net (decrease)/increase
in cash and cash equivalents 21,342 (1,099,865) (1,098,922)
------------------ ------------------ -----------------
Cash and cash equivalents
at beginning of the year 12,356 1,113,923 1,113,923
Effects of foreign exchange
on cash balances 6,609 (816) (2,645)
------------------ ------------------ -----------------
Cash and cash equivalents
at end of the year 40,307 13,242 12,356
------------------ ------------------ -----------------
The accompanying notes form an integral part of the financial
information.
NOTES TO THE FINANCIAL INFORMATION
1. GENERAL INFORMATION
The Company was incorporated on 21 January 2021 in England and
Wales as a public company, limited by shares and with Registered
Number 13149164 under the Companies Act 2006. On incorporation, the
Company's name was Alkemy Capital Plc. On 4 February 2021, the
Company's name was changed to Alkemy Capital Investments Plc. The
Company's registered office address is 167-169 Great Portland
Street, Fifth Floor, London W1W 5PF. On 25 February 2022 the
Company formed a wholly owned subsidiary called Tees Valley Lithium
Limited, a company seeking to establish a Lithium Hydroxide
Monohydrate ("LHM") processing facility in Teesside, UK.
The Company's objective is to establish a LHM processing plant
at its chosen site in Teesside, UK which will aim to initially
produce LHM from lithium feedstock from various sources, to be sold
to the UK and European mobile energy markets .
The Company has also announced plans to build a lithium sulphate
monohydrate plant at Port Hedland, Australia's largest export port
located in the Pilbara region of Western Australia, to feed TVL's
LHM facility in Teesside and has formed a wholly owned subsidiary
called Port Hedland Lithium Pty Ltd.
Other than the Directors, the Company has no employees.
The Directors who served during the period were Sam Quinn, Paul
Atherley and Helen Pein.
2. ACCOUNTING POLICIES
Basis of preparation
The principal accounting policies adopted by the Company in the
preparation of the Company Financial Information are set out
below.
The Company Financial Information has been presented in GBP,
being the functional currency of the Company.
The Company Financial Information has been prepared in
accordance with IFRS, including interpretations made by the
International Financial Reporting Interpretations Committee issued
by the International Accounting Standards Board. The standards have
been applied consistently. The historical cost basis of preparation
has been used.
The preparation of the financial statements in conformity with
IFRS requires the use of certain critical accounting estimates. It
also requires the Directors to exercise their judgment in the
process of applying the Company's accounting policies.
In the opinion of the management, the interim unaudited
financial information includes all adjustments considered necessary
for fair and consistent presentation of this financial information.
The interim unaudited financial information should be read in
conjunction with the Company's audited financial statements and
notes for the year ended 31 January 2022.
Standards and interpretations issued but not yet applied
A number of new standards and amendments to standards and
interpretations have been issued but are not yet effective and, in
some cases, have not yet been adopted by the UKEU. The Directors do
not expect that the adoption of these standards will have a
material impact on the Company Financial Information.
Going Concern
The Company Financial Information has been prepared on a going
concern basis.
The Company's assets are comprised almost entirely of cash. The
Directors have outlined their new strategy for the Company in the
Chairman's Statement. As part of their assessment of going concern,
the Directors have prepared cash forecasts to determine the cash
requirements of the business as it continues to deliver on its
strategy.
In order for the Company to be successful in its strategy, it
will need to raise additional funds. The Directors are reasonably
confident that such funds will be forthcoming as and when they are
required, however as successful future fundraising in support of
this strategy cannot be assured, a material uncertainty exists in
this regard. The Directors have a reasonable expectation that the
Company shall be able to secure adequate resources to continue in
operational existence for the foreseeable future.
Accordingly, the Directors believe that as at the date of this
report it is appropriate to continue to adopt the going concern
basis in preparing the financial statements.
Financial assets
Financial assets and financial liabilities are recognised when
the Company becomes a party to the contractual provisions of a
financial instrument. Financial assets and financial liabilities
are offset if there is a legally enforceable right to set off the
recognised amounts and interests and it is intended to settle on a
net basis. Cash comprises cash in hand and on demand deposits. Cash
equivalents are short-term, highly liquid investments that are
readily convertible to known amounts of cash and that are subject
to an insignificant risk of changes in value with maturities of
less than 90 days.
Financial liabilities
The Company does not currently have any financial liabilities
measured at fair value through profit or loss, therefore all
financial liabilities are initially measured at fair value, net of
transaction costs, and are subsequently measured at amortised cost.
The Company recognises an equity instrument on any contract that
evidences a residual interest in the assets of the Company. In this
period Ordinary Shares were the only equity instrument, recognised
at the point at which a call is made on the Shareholders.
Earnings per Ordinary Share
The Company presents basic and diluted earnings per share data
for its Ordinary Shares. Basic earnings per Ordinary Share is
calculated by dividing the profit or loss attributable to
Shareholders by the weighted average number of Ordinary Shares
outstanding during the period. Diluted earnings per Ordinary Share
is calculated by adjusting the earnings and number of Ordinary
Shares for the effects of dilutive potential Ordinary Shares.
3. USE OF ASSUMPTIONS AND ESTIMATES
In preparing the Company Financial Information, the Directors
have to make judgments on how to apply the Company's accounting
policies and make estimates about the future. The Directors do not
consider there to be any critical judgments that have been made in
arriving at the amounts recognised in the Company Financial
Information.
4. DIRECTORS' EMOLUMENTS
Directors' Consultancy
fees fees Social Security Total
31 July 2023 GBP'000 GBP'000 GBP'000 GBP'000
------------- ---------- ----------- --------------- --------
P Atherley 29,472 35,000 2,870 67,342
S Quinn 22,104 30,000 2,074 54,178
H Pein 9,000 - - 9,000
Total 60,575 65,000 4,944 130,520
------------- ---------- ----------- --------------- --------
No amount was paid or became payable to any of the Directors of
the Company in the prior period, and there were no staff costs as
no staff was employed by the Company during the prior period.
5. FINANCIAL RISK MANAGEMENT
The Company uses a limited number of financial instruments,
comprising cash and various items such as trade payables, which
arise directly from operations. The Company does not trade in
financial instruments.
Financial risk factors
The Company's activities expose it to a variety of financial
risks: credit risk and liquidity risk. The Company's overall risk
management programme focuses on the unpredictability of financial
markets and seeks to minimise potential adverse effects on the
Company's financial performance.
(a) Credit risk
The Company does not have any major concentrations of credit
risk related to any individual customer or counterparty.
(b) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient
cash, the Company ensures it has adequate resource to discharge all
its liabilities. The directors have considered the liquidity risk
as part of their going concern assessment.
Fair values
Management assessed that the fair values of other receivables
approximate their carrying amounts largely due to the short-term
maturities of these instruments.
6. CAPITAL MANAGEMENT POLICY
The Company's objectives when managing capital are to safeguard
the Company's ability to continue as a going concern in order to
provide returns for shareholders and benefits for other
stakeholders and to maintain an optimal capital structure to reduce
the cost of capital. The capital structure of the Company consists
of equity attributable to equity holders of the Company, comprising
issued share capital and reserves.
7. FINANCIAL INSTRUMENTS
The Company's principal financial instruments comprise other
receivables. The Company's accounting policy and method adopted,
including the criteria for recognition, the basis on which income
and expenses are recognised in respect of this financial asset. The
Company does not use financial instruments for speculative
purposes.
There are no financial assets that are either past due or
impaired.
8. TRADE AND OTHER RECEIVABLES
31 July 31 July
2023 2022
GBP GBP
----------------------------------- -------- --------
Prepayments 68,207 15,197
VAT receivable 97,117 -
Other receivables 226,974 -
----------------------------------- -------- --------
Total trade and other receivables 392,298 15,197
----------------------------------- -------- --------
9. EARNINGS PER SHARE
The loss per share has been calculated using the loss for the
year and the weighted average number of ordinary shares entitled to
dividend rights which were outstanding during the year. There were
no potentially dilutive ordinary shares at the year end.
31 July 31 July
2023 2022
GBP GBP
Loss for the period attributable to equity holders of the Company (1,066,646) (1,367,599)
Weighted average number of ordinary shares (number of shares) 7,199,998 5,999,999
-------------- --------------
Loss per share ( GBP per share) (0.148) (0.228)
-------------- --------------
10. SHARE CAPITAL
Ordinary shares of GBP0.02 each
Number Amount
of shares GBP
Issued, called up and paid - 31 July
2023 7,199,998 144,000
7,199,998 144,000
----------- --------
Number Amount
of shares GBP
Issued, called up and paid - 31 July
2022 5,999,999 120,000
5,999,999 120,000
----------- --------
On incorporation on 21 January 2021, the Company issued
3,000,000 Ordinary Shares of GBP0.02 nominal value.
On 27 September 2021, 2,999,999 ordinary shares were issued for
cash at 50p per share, raising GBP1,500,000 before expenses of
GBP160,906.
On 9 August 2022 the Company issued 1,199,999 ordinary shares of
2p for cash at a price of GBP1 per share.
On 31 May 2023 the Company entered into a loan arrangement with
Paul Atherley for GBP920,800 in gross funding (GBP872,162 net of
costs) to be repaid in a fixed number of ordinary shares in the
Company, at a fixed price, at a future date. Under IFRS, the terms
of this loan require it to be recorded as an equity reserve "shares
to issue" as the economic risks of the instrument are more closely
aligned to equity than debt, with transactions costs being taken as
a deduction from this equity reserve. As a consequence these net
amounts received as at the reporting date have been recognised in
the "shares to issue" reserve. On issuance of the repayment shares,
which took place on 5 October 2023, these amounts will be
reallocated to the share capital and share premium reserves.
No further issues of Ordinary Shares were made during the
period.
11. TRADE AND OTHER PAYABLES
31 July 31 July
2023 2022
GBP GBP
-------------------------------- ---------- --------
Trade payables 1,011,480 579,489
Other payables 123,996 41,357
Accrued expenses 187,972 15,064
-------------------------------- ---------- --------
Total trade and other payables 1,323,448 635,910
-------------------------------- ---------- --------
12. POST BALANCE SHEET EVENTS
On 23 August 2023 the Company announced the completion of a
feasibility study for its lithium sulphate processing facility in
Port Hedland, Australia.
On 28 August 2023 the Company received a rebate of approximately
GBP230,000 from HMRC under its Research and Development tax relief
programme.
On 29 September 2023 the Company announced the repayment of
657,711 loan shares by the Company to Paul Atherley through the
issue of new shares. In addition the Company issued new shares to
Paul Atherley and Sam Quinn at GBP1.40 per share to satisfy
GBP440,000 of outstanding director loans.
On 29 September 2023 the Company announced that it had secured
GBP613,000 of grant funding together with Weardale Lithium from
Innovate UK.
13. ULTIMATE CONTROLLING PARTY
As at 31 July 2023, the company has no ultimate controlling
party.
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IR QDLBLXBLXFBX
(END) Dow Jones Newswires
October 27, 2023 03:00 ET (07:00 GMT)
Alkemy Capital Investments (LSE:ALK)
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