TIDMCMET
RNS Number : 1182W
Capital Metals PLC
20 December 2021
Capital Metals Plc / EPIC: CMET / Market: LSE / Sector:
Mining
20 December 2021
CAPITAL METALS PLC
("CMET" or the "Company")
Unaudited Interim Results for the Six Months ended 30 September
2021
Capital Metals plc (AIM:CMET), a natural resources company
focused on the development of the Eastern Minerals Project in Sri
Lanka ("the Project"), one of the highest-grade mineral sands'
projects globally, is pleased to announce its unaudited interim
results for the six months ended 30 September 2021 and to provide
an update on the Company's progress on the Projects post the half
year end.
Highlights
-- Cash balance of $1,199,612 as at 30 September 2021
-- EIA Approved
-- Drilling Programme at southern license
-- Richard Stockwell appointment as Technical Manager
-- IHC Mining progressing Development Study
-- James Mahony appointed as Chief Financial Officer
Greg Martyr, Chairman of Capital Metals, commented:
"This has been a transformational period for Capital Metals
culminating in the award of our Environmental Impact Assessment
Permit ("EIA") on 22 November 2021, despite the significant
difficulties experienced in Sri Lanka during the COVID-19
pandemic.
The obtaining of the EIA demonstrates the Sri Lankan
authorities' support for the Project and should enable us to meet
our target of commencing commercial production in less than 12
months' time.
To that end, our management team is now focused on securing the
First Industrial Mining License which we expect to receive in Q1
2022. In addition, the timing of the EIA could not be better given
the recent strengthening of mineral sands pricing and a positive
medium-term outlook.
We look forward to providing further updates as we progress key
milestones."
Chairman's review of year to date
The Company recently announced the approval of the Environmental
Impact Assessment Permit ("EIA").
The Coast Conservation and Coastal Resources Management
Department in Sri Lanka ("CCD") advised the EIA process is complete
and issued a development activity permit to one of the Company's
subsidiary companies in Sri Lanka, Damsila Export (Pvt) Limited,
which covers the northern half of the Project ("the Permit"). The
completion of the EIA is required by the Geographical Survey and
Mines Bureau of Sri Lanka ("GSMB") in order to issue the Industrial
Mining License ("First IML") for the Project. The Permit is the
standard form development permit issued by the CCD and will be
reviewed annually by the CCD to ensure ongoing compliance with the
Project's environmental obligations.
The grant of the EIA had taken longer than we had hoped given
strict COVID-19 lock down measures in Sri Lanka, however, our
colleagues in Sri Lanka worked closely with the CCD to expedite the
issue of the EIA once restrictions were adequately lifted.
Capital Metals is committed to applying best practice in its
mining operations, including continuous post mining rehabilitation.
The proposed method of cell mining aims to ensure a minimal active
footprint and prompt rehabilitation of the mined areas. Planned
operations will have appropriate buffer and exclusion zones
identified as a result of the EIA study, which went through a
stringent public and governmental review process.
The Company is already working with the local communities to
improve the quality of their lives through various programs and
believes it is crucial to ensure employees and the people of the
Eastern Province participate in the long-term success of the
Project.
On 5 October 2021, the Company announced the commencement of its
auger drilling programme at its southern exploration license EL199.
The Company had engaged the GSMB to undertake the drilling program.
The drilling program is a combination of infill and resource
extensions and aims to confirm previous drill work and test with
extension and step out drilling. This will assist the Company to
delineate the key areas for any mining license applications over
EL199 and build out our resource estimate. The drilling programme
is now completed and drill samples are currently being analysed
with initial results expected in January 2022.
IHC Mining, a leading heavy minerals consultancy firm, is
reviewing the Company's Project development and economics, with the
results expected by the end of February 2022.
Accordingly, the Company is on track to achieve the following
milestones:
-- Commence construction for Stage 1 Heavy Minerals Concentrate - H1 2022
-- Start commercial production for Stage 1 Heavy Minerals Concentrate - H2 2022
Mineral Sands Pricing
Mineral sands prices have remained buoyant as a result of both
supply and demand issues.
Supply has been significantly impacted by closures to Rio
Tinto's Richards Bay mine, which accounts for around 17 per cent of
the world's titanium feedstocks and 13 per cent of zircon.
Market prices for ilmenite and rutile have been rising steadily
and recently reached seven-year highs in response to real demand
for final products from the significant economic growth globally
following the COVID-19 economic contractions and extra demand for
high-grade feedstock amid constrained supply in China and Africa.
Zircon prices were at three-year highs which was as a result of
improved ceramics production in Asia and Europe. The benchmark
Zircon price effective 1 July 2021 was $US1,630 per tonne, the
highest price recorded since 2014.
The Company has had numerous enquiries from off takers who are
looking to secure new and alternate sources of supply.
Corporate
On 16 August 2021, the Company announced the strengthening of
its in-house technical capabilities with the appointment of Richard
Stockwell, a seasoned technical mining expert having worked in the
minerals sands industry for over 20 years. His expertise covers
mineral exploration, resource development and mine planning.
Richard will be a key part of the Company's senior management
team and his initial duties include overseeing the following:
(i) Development Study which will provide an updated
understanding of the technical scope and economics of the Project
prior to its full commercial development.
(ii) Project Exploration Strategy with the aim to increase the
overall resource and target high value areas.
Richard spent over 13 years with ASX-listed Iluka Resources
Limited, one of the world's largest mineral sands companies based
in Perth, Western Australia. At Iluka, Richard held a variety of
roles including Manager Exploration, Western Australia and was a
responsible Competent Person (CP) under the JORC reporting
guidelines, for reporting of mineral resources for much of this
time. The role included a number of technical and innovative
exploration studies of particular relevance to Capital Metals'
longer-term strategy.
On 29 October 2021, the Company also announced that James Mahony
had joined the senior management team as Chief Financial Officer as
a result of Anthony Samaha stepping down as Finance Director.
James Mahony is a partner in Westend Corporate LLP ("Westend
Corporate"), a firm based in London that provides independent
financial consulting and corporate management services. James holds
a Bachelor of Applied Science (Hons), Master of Accounting and is a
qualified Certified Practising Accountant. He currently acts, or
has acted, as a CFO for a number of AIM-quoted, AQSE quoted and
private companies.
In addition, Westend Corporate took over as Company Secretary
replacing Sam Quinn.
Financials
As is to be expected with an exploration company, for the
six-month period ended 30 September 2021 the Group is reporting a
pre-tax loss of $1,196,828 (six months ended 30 September 2020:
loss of $353,588). The Group's net cash balance as at 30 September
2021 was $ 1,199,612 (30 September 2020: $22,547).
Outlook
We believe we are entering a very exciting period as we look to
obtain our First Industrial Mining License, negotiate offtake
agreements, secure project finance, and generally advance the
Project to what we believe will be a world class mineral sands
asset.
I would also like to take this opportunity to thank the
Government of Sri Lanka and the local communities where we operate
for their continued support, as well as our management team for
their dedication, all of which have enabled the Company to advance
its operations even during challenging lockdown situations.
Finally, I would also like to thank our shareholders for their
continued commitment and support.
We look forward to providing further updates for all of our
stakeholders as we accomplish our key milestones.
Greg Martyr
Non-Executive Chairman
20 December 2021
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
For further information, please visit www.capitalmetals.com or
contact:
Capital Metals plc Greg Martyr, Non-Executive Greg.martyr@capitalmetals.com
Chairman
Michael Frayne, CEO Michael.frayne@capitalmetals.com
--------------------------- ---------------------------------
James Mahony, CFO James.mahony@capitalmetals.com
--------------------------- ---------------------------------
SPARK Advisory Partners Neil Baldwin / James Tel: +44 (0) 20 3368
(Nominated Adviser) Keeshan 3554
--------------------------- ---------------------------------
WH Ireland Limited (Broker) Harry Ansell / Katy Tel: +44 (0) 20 7220
Mitchell 1666
--------------------------- ---------------------------------
Brandon Hill Capital Jonathan Evans / Oliver Tel: +44 (0) 20 3463
Limited (Broker) Stansfield 5000
--------------------------- ---------------------------------
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
6 months 6 months
to 30 September to 30 September
2021 Unaudited 2020 Unaudited
Notes $ $
------------------------------------------ ------ ----------------- -----------------
Continuing operations
Revenue - -
Administration expenses (1,123,697) (360,453)
Foreign exchange (73,241) 6,758
Operating loss (1,196,938) (353,695)
------------------------------------------ ------ ----------------- -----------------
Finance income 110 107
------------------------------------------ ------ ----------------- -----------------
Loss before income tax (1,196,828) (353,588)
------------------------------------------ ------ ----------------- -----------------
Income tax - -
------------------------------------------ ------ ----------------- -----------------
Loss for the period (1,196,828) (353,588)
------------------------------------------ ------ ----------------- -----------------
Other comprehensive income
Items that may be reclassified to profit
or loss
Currency translation differences 52,184 (1,146,933)
Total comprehensive loss for the period (1,144,644) (1,500,521)
------------------------------------------ ------ ----------------- -----------------
Basic and diluted 5 (0.216)p (1.742)p
------------------------------------------ ------ ----------------- -----------------
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at As at As at
30 September 31 March 30 September
2021 Unaudited 2021 Audited 2020 Unaudited
Notes $ $ $
------------------------------------- -------- ---------------- -------------- ----------------
Non-Current Assets
Property, plant and equipment 42,961 47,566 64,121
Intangible assets 6 6,333,401 6,178,503 6,451,994
6,376,362 6,226,069 6,516,115
------------------------------------- -------- ---------------- -------------- ----------------
Current Assets
Trade and other receivables 148,832 114,737 4,581
Cash and cash equivalents 1,199,612 1,797,319 22,547
------------------------------------- -------- ---------------- -------------- ----------------
1,348,444 1,912,056 27,128
------------------------------------- -------- ---------------- -------------- ----------------
Total Assets 7,724,806 8,138,125 6,543,243
------------------------------------- -------- ---------------- -------------- ----------------
Non-Current Liabilities
Trade and other payables 600,000 600,000 -
------------------------------------- -------- ---------------- -------------- ----------------
600,000 600,000 -
------------------------------------- -------- ---------------- -------------- ----------------
Current Liabilities
Trade and other payables 847,180 707,545 1,616,106
Borrowings - - 90,116
Convertible loans - - 390,730
847,180 707,545 2,096,952
------------------------------------- -------- ---------------- -------------- ----------------
Total Liabilities 1,447,180 1,307,545 2,096,952
------------------------------------- -------- ---------------- -------------- ----------------
Net Assets 6,277,626 6,830,580 4,446,291
------------------------------------- -------- ---------------- -------------- ----------------
Capital and Reserves Attributable
to
Equity Holders of the Company
Share capital 6,018,628 6,018,628 5,610,631
Share premium 47,469,912 47,469,912 47,461,833
Capital contribution and contingent
shares 3,218,750 3,218,750 3,218,750
Other reserves (36,715,612) (37,359,486) (46,724,976)
Retained losses (13,714,052) (12,517,224) (5,119,947)
------------------------------------- -------- ---------------- -------------- ----------------
Total Equity 6,277,626 6,830,580 4,446,291
------------------------------------- -------- ---------------- -------------- ----------------
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS'
EQUITY
Attributable to owners
of the Parent
------ ---------- ------------ ------------------------------------------------------ ---
Capital
contribution
and
Share Share contingent Other Retained Total
capital premium shares reserves losses equity
Note $ $ $ $ $ $
---------- --------------
Balance as at 1 April
2020 5,610,631 47,266,833 1,250,000 (46,560,043) (4,766,359) 2,801,062
------------------------------- ---------- ----------- -------------- ------------- ------------- --------------
Loss for the period - - - - (353,588) (353,588)
Other comprehensive loss
for the period - - - (164,933) - (164,933)
------------------------------- ---------- ----------- -------------- ------------- ------------- --------------
Total comprehensive loss
for the period - - - (164,933) (353,588) (518,521)
Issue of ordinary shares - 195,000 - - - 195,000
Consideration shares to
be issued - - 1,968,750 - - 1,968,750
------------------------------- ---------- ----------- -------------- ------------- ------------- --------------
Total transactions with
owners, recognised in
equity - 195,000 1,968,750 - - 2,163,750
------------------------------- ---------- ----------- -------------- ------------- ------------- --------------
Balance as at 30 September
2020 5,610,631 47,461,833 3,218,750 (46,724,976) (5,119,947) 4,446,291
------------------------------- ---------- ----------- -------------- ------------- ------------- --------------
Balance as at 1 April
2021 6,018,628 47,469,912 3,218,750 (37,359,486) (12,517,224) 6,830,580
------------------------------- ---------- ----------- -------------- ------------- ------------- --------------
Loss for the period - - - - (1,196,828) (1,196,828)
Other comprehensive income
for the period - - - 52,184 - 52,184
------------------------------- ---------- ----------- -------------- ------------- ------------- --------------
Total comprehensive loss
for the period - - - 52,184 (1,196,828) (1,144,644)
------------------------------- ---------- ----------- -------------- ------------- ------------- --------------
Share option expense - - - 591,690 - 591,690
------------------------------- ---------- ----------- -------------- ------------- ------------- --------------
Total transactions with
owners, recognised in
equity - - - 591,690 - 591,690
------------------------------- ---------- ----------- -------------- ------------- ------------- --------------
Balance as at 30 September
2021 6,018,628 47,469,912 3,218,750 (36,715,612) (13,714,052) 6,277,626
------------------------------- ---------- ----------- -------------- ------------- ------------- --------------
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
6 months 6 months
to 30 September to 30 September
2021 2020 Unaudited
Notes Unaudited $
$
------------------------------------------- -------- ----------------- -----------------
Cash flows from operating activities
Loss before taxation (1,196,828) (353,588)
Adjustments for:
Share based payments 591,689 -
Depreciation 15,053 6,103
Interest income (110) (107)
Interest expense - 43,217
Shares in lieu of debt - 195,000
Decrease in trade and other receivables 1,306 81
Increase in trade and other payables 104,236 85,538
Foreign exchange 49,499 (9,611)
Net cash used in operations (435,155) (33,367)
-------------------------------------------- -------- ----------------- -----------------
Cash flows from investing activities
Purchase of property, plant and equipment (10,314) -
Exploration and evaluation activities 6 (152,348) (43,010)
Interest received 110 107
-------------------------------------------- -------- ----------------- -----------------
Net cash used in investing activities (162,552) (42,903)
-------------------------------------------- -------- ----------------- -----------------
Cash flows from financing activities - -
Net cash generated from financing
activities - -
------------------------------------------- -------- ----------------- -----------------
Net decrease in cash and cash equivalents (597,707) (76,270)
Exchange differences - (15,333)
Cash and cash equivalents at beginning
of period 1,797,319 114,150
Cash and cash equivalents at end of
period 1,199,612 22,547
-------------------------------------------- -------- ----------------- -----------------
NOTES TO THE INTERIM FINANCIAL STATEMENTS
1. General Information
Capital Metals plc is a mineral exploration company listed on
the AIM Market of the London Stock Exchange. Following the
completion of the reverse acquisition of Capital Metals Limited on
13 January 2021, the Company changed its name from Equatorial Palm
Oil Plc to Capital Metals Plc and changed its account reference
date to 31 March.
The Company is domiciled in the United Kingdom and incorporated
and registered in England and Wales, with registration number
05555087. The Company's registered office is Suite 1, 15 Ingestre
Place, London, W1F 0DU.
2. Basis of Preparation
The condensed interim financial statements have been prepared in
accordance with IAS 34 "Interim Financial Statements" as adopted by
the United Kingdom and the Disclosure Guidance and Transparency
Rules of the UK Financial Conduct Authority. The condensed interim
financial statements should be read in conjunction with the annual
financial statements for the period ended 31 March 2021, which have
been prepared in accordance with International Financial Reporting
Standards (IFRS) in conformity with the requirements of the
Companies Act 2006.
The interim financial information set out above does not
constitute statutory accounts within the meaning of the Companies
Act 2006. It has been prepared on a going concern basis in
accordance with the recognition and measurement criteria of
International Financial Reporting Standards (IFRS) as adopted by
the United Kingdom.
Statutory financial statements for the period ended 31 March
2021 were approved by the Board of Directors on 30 September 2021
and delivered to the Registrar of Companies. The report of the
auditors on those financial statements was unqualified. The
condensed interim financial statements are unaudited and have not
been reviewed by the Company's auditor.
Going concern
Given the Group's current cash position and its demonstrated
ability to raise capital, the Directors have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future. Thus, they
continue to adopt the going concern basis of accounting preparing
the condensed interim financial statements for the period ended 30
September 2021. Whilst the Directors are confident that they will
be able to secure the necessary funding, the current conditions do
indicate the existence of a material uncertainty that may cast
doubt regarding the applicability of the going concern
assumption.
The factors that were extant at 31 March 2021 are still relevant
to this report and as such reference should be made to the going
concern note and disclosures in the 2021 Annual Report.
Risks and uncertainties
The Board continuously assesses and monitors the key risks of
the business. The key risks that could affect the Company's medium
term performance and the factors that mitigate those risks have not
substantially changed from those set out in the Company's 2021
Annual Report and Financial Statements, a copy of which is
available on the Company's website: www.capitalmetals.com . The key
financial risks are liquidity risk, credit risk, interest rate risk
and fair value estimation.
Critical accounting estimates
The preparation of condensed interim financial statements
requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities at the end of the
reporting period. Significant items subject to such estimates are
set out in Note 2 of the Company's 2021 Annual Report and Financial
Statements. The nature and amounts of such estimates have not
changed significantly during the interim period.
3. Accounting Policies
Except as described below, the same accounting policies,
presentation and methods of computation have been followed in these
condensed interim financial statements as were applied in the
preparation of the Company's annual financial statements for the
period ended 31 March 2021.
3.1 Changes in accounting policy and disclosures
(a) New and amended standards mandatory for the first time for
the financial year beginning 1 April 2021
As of 1 April 2021, the Group did not adopt any new or amended
standards.
(b) New standards, amendments and Interpretations in issue but
not yet effective or not yet endorsed and not early adopted
The standards and interpretations that are issued, but not yet
effective, up to the date of issuance of the condensed interim
financial statements are listed below. The Group intends to adopt
these standards, if applicable when they become effective.
Standard Impact on initial application Effective date
-------------------- ----------------------------------- ---------------
IFRS 3 (amendments) Reference to Conceptual Framework 1 January 2022
----------------------------------- ---------------
IAS 37 (amendments) Provisions, contingent liabilities 1 January 2022
and contingent assets
----------------------------------- ---------------
IAS 16 (amendments) Proceeds before intended use 1 January 2022
----------------------------------- ---------------
Annual improvements 2018-2020 Cycle 1 January 2022
----------------------------------- ---------------
IAS 8 (amendments) Accounting estimates 1 January 2023
----------------------------------- ---------------
IAS 1 (amendments) Classification of Liabilities 1 January 2023
as Current or Non-Current.
----------------------------------- ---------------
*Not yet endorsed by the UK.
The Company is evaluating the impact of the new and amended
standards above. The Directors believe that these new and amended
standards are not expected to have a material impact on the
Company's results or shareholders' funds.
4. Dividends
No dividend has been declared or paid by the Company during the
six months ended 30 September 2021 (six months ended 30 September
2020: $nil).
5. Loss per Share
The calculation of loss per share is based on a retained loss of
$1,144,644 for the six months ended 30 September 2021 ( six months
ended 30 September 2020: $ 1,500,521 ) and the weighted average
number of shares in issue in the period ended 30 September 2021 of
528,714,268 ( six months ended 30 September 2020: 86,125,000 ).
No diluted earnings per share is presented for the six months
ended 30 September 2021 or six months ended 30 September 2020 as
the effect on the exercise of share options would be to decrease
the loss per share.
6. Intangible fixed assets
The movement in capitalised exploration and evaluation costs
during the period was as follows:
Exploration & Evaluation at Cost and Net Book Value $
----------------------------------------------------- ----------
Balance as at 1 April 2021 6,178,503
Additions 152,348
Foreign exchange 2,550
As at 30 September 2021 6,333,401
----------------------------------------------------- ----------
7. Events after the balance sheet date
There have been no events after the reporting date of a material
nature.
8. Approval of interim financial statements
The Condensed interim financial statements were approved by the
Board of Directors on 20 December 2021.
9. Availability of this announcement
Copies of this announcement are available from Capital Metals
website at www.capitalmetals.com.
**ENDS**
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