TIDMCHAR
RNS Number : 1287N
Chariot Limited
28 September 2021
28 September 2021
Chariot Limited
("Chariot", the "Company")
H1 2021 Results
Chariot (AIM: CHAR), the Africa focused transitional energy
company, today announces its unaudited interim results for the
six-month period ended 30 June 2021.
-- Appraisal drilling at Anchois, offshore Morocco, anticipated
to commence in December 2021; a key step in early monetisation path
for Anchois gas development project.
-- Key contracts and team in place with the signing of a
contract for the Stena Don rig and award of well services contract
to Halliburton.
-- Acquisition of Africa Energy Management Platform ("AEMP")
completed in Q2 2021 under the new Transitional Power business
stream looking to transform the energy market for mining operations
in Africa, providing a largely untapped market with cleaner,
sustainable and more reliable power.
-- Memorandum of Understanding ("MoU") signed with the
Government of Mauritania to progress a potential green hydrogen
development.
-- Recapitalised Company through successful placing, subscription and open offer.
Adonis Pouroulis, Acting CEO of Chariot commented:
"We have achieved significant progress in the first half of the
year as we aim to deliver on the strategy in place across our two
business streams. We are fully focused on delivering a successful,
safe and cost-effective appraisal well in Morocco that meets the
objectives set out in our earlier fundraising. The acquisition of
AEMP has brought a pipeline of high-value accretive clean energy
investment opportunities and we are making great strides in our
relationship with Total Eren to bring these projects to investment
stage.
We are on track for drilling operations to commence in December
2021 and look forward to an exciting period of newsflow from our
Moroccan operations and across the wider group with the progression
of our exciting new power business stream."
Highlights during and post-period:
Transitional Gas
The Anchois Development Project
-- Rig contract awarded to Stena Drilling to use the Stena Don,
a semi-submersible rig, suitable for drilling, completion, and
workover operations. Anchois appraisal drilling operations are
anticipated to commence in December 2021 and expected to take up to
approximately 40 days.
-- Appraisal drilling objectives:
o Unlock the development of the discovered sands by confirming
the gas resource volumes, reservoir quality and well
productivity.
o Provide a future production well for the development of the
field.
o Potentially deepen the well into additional low-risk
prospective sands with the aim of establishing a larger resource
base for longer term growth.
-- Gas Market Memorandum of Understanding ("MOU") signed in
March 2021 with partner the Office National des Hydrocarbures et
des Mines ("ONHYM") and the Ministry of Industry, Trade and Green
and Digital Economy ("Ministry") in Morocco to support the Anchois
Gas Development.
-- Collaboration agreement with Subsea Integration Alliance
signed in February 2021, a developer of
offshore gas projects, to progress the front-end design,
engineering, procurement, construction,
installation and operation of the Anchois Gas Development.
-- Rissana Offshore Licence, Morocco, capturing prospective
acreage surrounding the core Anchois development, in process of
formal award.
Transitional Power
-- Acquisition completed of AEMP in Q2 2021.
-- Acquisition meets Chariot's key environmental, social and
corporate governance ("ESG") values of positive impact on the
environment, countries, and communities where it operates.
-- Entire AEMP team fully integrated into Chariot, under the
Transitional Power business stream, including founders Benoit
Garrivier and Laurent Coche.
-- Right to invest in up to 15% project equity at cost in
projects developed in strategic partnership with Total Eren, a
global renewable IPP to develop low-risk mining power projects in
Africa.
-- Partnership has built a pipeline of 500MW of African mining
power projects; Chariot's management is also looking to leverage
its other significant business interests in multiple mining
operations across Africa to rapidly grow the pipeline.
-- First project in operation, the largest hybrid solar plant in
Africa, at the Essakane gold mine in Burkina Faso, successfully
completed and currently generating returns providing proof of
concept.
New Business
-- Green hydrogen project given exclusivity over an onshore and
offshore area in Mauritania totalling approximately 14,400 km(2) to
carry out pre-feasibility and feasibility studies with the
intention of generating electricity from solar and wind resources
to be used in electrolysis to split water to produce green hydrogen
and oxygen.
-- Transitional Gas and Transitional Power teams continue to
evaluate new opportunities that play to our strengths as energy
professionals and our long-standing presence and experience across
the African continent
Corporate
-- Unaudited cash balance as at 30 June 2021 of US$18.0 million
-- Successful fundraise completed H1 2021 to fund Gas and Power work programmes
-- No debt or remaining work commitments
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014, as retained in the UK
pursuant to S3 of the European Union (Withdrawal) Act 2018.
For further information please contact:
Chariot Limited
Adonis Pouroulis, Acting CEO
Julian Maurice-Williams, CFO +44 (0)20 7318 0450
finnCap (Nominated Adviser and Joint Broker)
Christopher Raggett, Simon Hicks, Edward
Whiley +44 (0)20 7220 0500
Peel Hunt (Joint Broker)
Richard Crichton, David McKeown +44 (0)20 7418 8900
Celicourt Communications (Financial PR)
Mark Antelme, Jimmy Lea +44 (0)20 8434 2754
NOTES FOR EDITORS:
About Chariot
Chariot is an African focused transitional energy group with two
business streams, Transitional Gas and Power.
Chariot Transitional Gas is executing a high value, low risk gas
development project with strong ESG credentials in a fast-growing
emerging economy with a clear route to early monetisation, delivery
of free cashflow and material exploration upside. Chariot
Transitional Power is looking to transform the energy market for
mining operations in Africa, providing a giant largely untapped
market with cleaner, sustainable, and more reliable power.
The ordinary shares of Chariot Limited are admitted to trading
on the AIM under the symbol 'CHAR'.
Chariot Limited
Chief Executive's Review
The first half of 2021 has seen material change in the Company's
make-up: we have acquired a renewable and hybrid energy project
developer and we have forged ahead with our core asset, the
transitional Anchois gas project in Morocco such that we have an
operated gas appraisal well due to commence in December 2021. The
progression of our twin business streams reaffirms our stated
strategy to create value and deliver positive change though
investments that are driving the energy revolution. We are
embracing the new era of environmental, social and governance
("ESG") principles and driving forward with our sights on projects
that will revolutionise energy across Africa. Importantly we have
also re-capitalised the Company to enable delivery of this strategy
within a meaningful timeframe for all stakeholders.
Transitional Gas - Anchois Development Project
The Lixus licence, offshore Morocco, contains the Anchois gas
discovery, with audited total remaining recoverable resource in
excess of 1 Tcf for Anchois, comprising 361 Bcf 2C contingent
resources and 690 Bcf 2U prospective resources. Having undertaken
an optimised work programme since award in 2019 to reprocess
existing seismic data and mature gas marketing and development
attributes, this gas project comes at an opportune time to assist
Moroccan energy transition. The clear next step to unlock the
development and fast-track to gas production is the drilling of an
appraisal well, which with the recent signing of the Stena Don rig
contract with Stena Drilling, is now anticipated to commence in
December 2021.
The primary technical objective of the appraisal well is to
unlock the development of the discovered sands by confirming the
gas resource volumes, reservoir quality and well productivity.
Secondly, this well will have the ability to provide a site for a
future production well for the development of the field and finally
we have the option to deepen the well into additional low-risk
prospective sands with the aim of establishing a larger resource
base for longer term growth. The drilling team is in place, led by
David Brecknock who recently re-joined the Company having
previously played a pivotal role in Chariot's previous drilling
campaign in Namibia, which was operated safely, on time and under
budget.
The subsea-to-shore development concept for the Anchois gas
field, progressed through pre-FEED studies performed with Xodus, an
engineering consultancy owned by Subsea 7, validated the
development plan and identified the possibility to use standardized
technology and optimise costs, due to favourable subsurface
conditions. The e xcellent reservoir properties and gas quality
mean that costs are greatly reduced as we can decrease subsea
complexity, use standard materials and technology, and reduce the
number of initial producer wells due to high productivity rates.
Further advancement in the planning phase of the development came
in February 2021, when we signed a collaboration agreement with
Subsea Integration Alliance, the world-leading developer of
offshore gas projects, to progress the front-end design,
engineering, procurement, construction, installation and operations
work streams. The current development plan consists of two initial
subsea wells tied into a subsea manifold with a 40km offshore
flowline connected to an onshore gas processing facility, from
which a short 40km pipeline connects to the trunk pipeline to
Europe allowing access not only to the growing Moroccan energy
market but also to the European gas market.
This development plan is fundamental to us achieving our goals
of helping deliver energy security and independence to the Kingdom
of Morocco in the near-term and move away from reliance on imported
fossil fuels. Indigenous Moroccan gas, such as that from an Anchois
Field development, has the ability to fuel existing power stations.
The industrial demand for gas is robust and growing, with high
established gas prices. Furthermore, with a connection to the
Maghreb-Europe Gas Pipeline (GME pipeline), surplus gas from the
Anchois field development could potentially be exported to Europe,
highlighting the bankability and commercial optionality of the
project. Lixus boasts excellent contract terms in what is widely
known internationally to be a favourable fiscal environment. There
is a 10-year corporate tax holiday from the commencement of
production and a low 3.5% royalty on gas produced offshore at the
water depth of the Anchois discovery. The signature of the
Memorandum of Understanding with the Ministry of Industry in
Morocco, supporting the Anchois Gas Development project, also
confirms that the project will be contributing to social
development. We are fully aligned with the Ministry in helping the
Kingdom meet its key national strategy of industrial development
and economic decarbonization. By bringing this project onstream, we
will be improving infrastructure and providing clean and
competitive energy for consumption by the Moroccan industrial
sector. The Ministry's support of utilising natural gas extracted
in Morocco has been a huge step forward in Chariot's development
plan.
Last year, Chariot received two Expression of Interest ("EOI")
letters, acknowledging Lixus as an important strategic asset, with
strong ESG credentials. The EOI's came from Africa Finance
Corporation ("AFC"), a pan-African Multilateral Development
Financial Institution, for the provision of development debt
finance for the Anchois Gas Discovery, and a major Multinational
Investment Bank, for the provision of Reserves Base Lending for the
development of Anchois. In parallel, we are holding very positive
discussions with potential partners who could join the project to
provide extended support and capital to progress the project into
development post-appraisal well.
There is a huge amount of follow-on potential to grow Lixus in
the coming years and we see that potential extending onto the
Rissana licence, which surrounds the borders of Lixus. Key terms
were agreed on Rissana, in late 2020, and we anticipate the formal
award of the licence shortly.
Transitional Power
Our acquisition of AEMP in the first half of the year was an
important first step to diversifying the business and a
demonstration of the new strategy in practice. The team is
comprised of accomplished energy professionals, who are innovating
solutions for the carbon-intensive mining industry in Africa, which
is estimated to be comparable in size to 50% of the UK power
market. We have chosen to focus our business on the continent of
Africa due to its many growing populations and industries that need
access to cleaner and more competitive energy. Initially leveraging
the group's network of African mining connections for immediate
project delivery, we hope to expand beyond the mining industry and
serve these other rapidly growing markets.
Our proven concept and ESG project credentials can be seen at
the IAMGOLD mine, in the Sahel region, Burkina Faso. The Essakane
PV Plant is situated on-site at the gold mine, providing clean
solar energy through 130,000 photovoltaic panels, contributing to
the mine's power production, and replacing 15 MW with clean solar
energy. Chariot owns a 10% share of this 15MW project, which
creates a positive impact and benefits the local communities, while
respecting the environment. The Essakane project was registered to
the UNFCCC with a confirmed 18,000 Certified CO(2) Emission
Reductions credited every year, a major contribution to sustainable
development that was recognised by the "2019 Towards Sustainable
Mining" excellence award.
We are in a unique position where we have potential access to
multiple mining operations across Africa on account of management's
wide reach in the mining industry putting us in a position to
rapidly grow the pipeline.
Financial Review
The Group remains debt free and had a cash balance of US$18.0
million at 30 June 2021 (US$3.7 million at 31 December 2020). The
equity fundraising completed in June 2021 raised net proceeds of
US$17.4 million which are further supplemented by an underwriting
commitment of $5.2 million from Magna Capital LDA (of which Adonis
Pouroulis is a substantial shareholder). The underwriting
commitment ensures that the total fundraising will equate to
approximately US$23 million before expenses. Further details in
note 7.
Other administrative expenses of US$1.7 million (30 June 2020:
US$1.7 million) are in line with the prior period with a reduction
in admin expenses driven by the restructuring in the first half of
2020 being offset by increases to business development costs and
advisory fees driven by acquisition activity in the period.
Finance income of US$Nil (30 June 2020: US$0.4 million) and
finance expenses of US$0.3 million (30 June 2020: <US$0.1
million) reflect the holding of higher cash balances in Sterling to
meet administrative and capital expenditures resulting in higher
foreign exchange losses, in addition to the unwinding of the
discount on the lease liability under IFRS 16.
Share-based payments charges of less than US$0.1 million (30
June 2020: US$0.2 million) are marginally lower than the prior
period due to the vesting of historic awards of employee deferred
shares.
Outlook
Chariot is founded on a deep-rooted reputation for technical
excellence across Africa, forged over many years of proving
ourselves as capable, safe, and efficient operators. We are tapping
into a wide-reaching network and long-standing position across the
continent, with a wealth of fantastic opportunities open to us to
grow the business.
Transitional Gas is looking to drill the planned appraisal well
on Anchois at the end of the year as operator with the same team
that executed the 2018 drilling campaign safely, on time and
significantly under budget. We will look to capitalise quickly on
the outcome of the drilling to move into the next phase of the
project.
We are also extremely excited to embark on new and innovative
projects with our partners Total Eren, improving access to clean
and sustainable energy across Africa. We are determined to fulfil
our mission of creating a positive impact on the countries and
communities in which we operate, providing value to the Chariot
stakeholders as we proceed. The new Transitional Power team is
already pioneering and continuing to create ground-breaking
projects that will revolutionise energy solutions in the mining
sector, with plans to target projects in other industries,
including the recently announced potential green hydrogen project
in Mauritania.
We have set forth on a journey to contribute to a cleaner
future; we have a responsibility to the communities we work in, our
shareholders and the environment, as we seek to provide energy
solutions across Africa.
Adonis Pouroulis
Acting Chief Executive Officer
28 September 2021
Chariot Limited
Consolidated statement of comprehensive income for the six
months ended 30 June 2021
Six months Six months Year ended
ended 30 ended 30 31 December
June 2021 June 2020 2020
US$000 US$000 US$000
Notes Unaudited Unaudited Audited
Share based payments (26) (236) (222)
Loss on disposal of inventory - (524) (524)
Impairment of exploration
asset 4 - (66,666) (66,666)
Other administrative expenses (1,655) (1,736) (3,678)
--------------------------------------- ------- -------------- -------------- ---------------
Total operating expenses (1,681) (69,162) (71,090)
--------------------------------------- ------- -------------- -------------- ---------------
Loss from operations (1,681) (69,162) (71,090)
Finance income - 361 543
Finance expense (329) (38) (72)
--------------------------------------- ------- -------------- -------------- ---------------
Loss for the period before
taxation (2,010) (68,839) (70,619)
Tax expense - (1) (1)
--------------------------------------- ------- -------------- -------------- ---------------
Loss for the period and total
comprehensive loss for the
period attributable to equity
owners of the parent (2,010) (68,840) (70,620)
--------------------------------------- ------- -------------- -------------- ---------------
Loss per ordinary share attributable 3 US$(0.01) US$(0.19) US$(0.19)
to the equity holders of the
parent - basic and diluted
--------------------------------------- ------- -------------- -------------- ---------------
Chariot Limited
Consolidated statement of changes in equity for the six months
ended 30 June 2021
Share Shares Total
based based attributable
Share Share Contributed payment to be Retained to equity
capital premium equity reserve issued deficit holders
reserve of the parent
US$000 US$000 US$000 US$000 US$000 US$000 US$000
------------------ ----------- ----------- --------------- ---------- ---------- ------------ -----------------
For the six
months ended
30 June 2021
(unaudited)
As at 1 January
2021 6,549 359,609 796 1,447 - (352,239) 16,162
Loss and total
comprehensive
loss for the
period - - - - - (2,010) (2,010)
Issue of capital 3,491 15,666 - - - - 19,157
Issue costs - (1,241) - - - - (1,241)
Share based
payments - - - 26 - - 26
Share based
deferred
consideration - - - - 142 - 142
As at 30 June
2021 10,040 374,034 796 1,473 142 (354,249) 32,236
------------------ ----------- ----------- --------------- ---------- ---------- ------------ -----------------
For the six Share Total
months ended based Foreign attributable
30 June 2020 Share Share Contributed payment exchange Retained to equity
(unaudited) capital premium equity reserve reserve deficit holders
of the parent
US$000 US$000 US$000 US$000 US$000 US$000 US$000
As at 1 January
2020 6,268 356,503 796 5,408 (1,241) (281,174) 86,560
Loss and total
comprehensive
loss for the
period - - - - - (68,840) (68,840)
Share based
payments - - - 236 - - 236
Transfer of
reserves due
to issue of
share awards 157 2,101 - (2,258) - - -
As at 30 June
2020 6,425 358,604 796 3,386 (1,241) (350,014) 17,956
----------------- ----------- ----------- --------------- ---------- ------------ ------------ ----------------
For the year Share Total
ended 31 based Foreign attributable
December Share Share Contributed payment exchange Retained to equity
2020 (audited) capital premium equity reserve reserve deficit holders
of the
parent
US$000 US$000 US$000 US$000 US$000 US$000 US$000
As at 1
January
2020 6,268 356,503 796 5,408 (1,241) (281,174) 86,560
Loss and
total
comprehensive
loss for
the year - - - - - (70,620) (70,620)
Share based
payments - - - 222 - - 222
Transfer
of reserves
due to issue
of share
awards 281 3,106 - (3,387) - - -
Transfer
of reserves
due to lapsed
share options - - - (796) - 796 -
Transfer
of reserves - - - - 1,241 (1,241) -
As at 31
December
2020 6,549 359,609 796 1,447 - (352,239) 16,162
---------------- ----------- ----------- -------------- ---------- ----------- ----------- --------------
Chariot Limited
Consolidated statement of financial position as at 30 June
2021
30 June 30 June 31 December
2021 2020 2020
US$000 US$000 US$000
Notes Unaudited Unaudited Audited
Non-current assets
Exploration and appraisal
costs 4 13,756 12,311 12,822
Investment in power projects 5 450 - -
Goodwill 5 380 - -
Property, plant and equipment 52 59 43
Right of use asset: office
lease 492 819 655
------------------------------------ ------- ----------- ----------- ------------
Total non-current assets 15,130 13,189 13,520
------------------------------------ ------- ----------- ----------- ------------
Current assets
Trade and other receivables 704 711 811
Cash and cash equivalents 6 18,049 5,845 3,740
------------------------------------ ------- ----------- ----------- ------------
Total current assets 18,753 6,556 4,551
------------------------------------ ------- ----------- ----------- ------------
Total assets 33,883 19,745 18,071
------------------------------------ ------- ----------- ----------- ------------
Current liabilities
Trade and other payables 990 848 1,060
Lease liability: office lease 431 355 409
------------------------------------ ------- ----------- ----------- ------------
Total current liabilities 1,421 1,203 1,469
------------------------------------ ------- ----------- ----------- ------------
Non-current liabilities
Lease liability: office lease 226 586 440
------------------------------------ ------- ----------- ----------- ------------
Total non-current liabilities 226 586 440
------------------------------------ ------- ----------- ----------- ------------
Total liabilities 1,647 1,789 1,909
------------------------------------ ------- ----------- ----------- ------------
Net assets 32,236 17,956 16,162
------------------------------------ ------- ----------- ----------- ------------
Capital and reserves attributable
to equity holders of the parent
Share capital 7 10,040 6,425 6,549
Share premium 374,033 358,604 359,609
Contributed equity 796 796 796
Share based payment reserve 1,473 3,386 1,447
Shares to be issued reserve 5 142 - -
Foreign exchange reserve - (1,241) -
Retained deficit (354,249) (350,014) (352,239)
------------------------------------ ------- ----------- ----------- ------------
Total equity 32,236 17,956 16,162
------------------------------------ ------- ----------- ----------- ------------
Chariot Limited
Consolidated cash flow statement for the six months ended 30
June 2021
Six months Six months Year ended
ended 30 ended 30 31 December
June 2021 June 2020 2020
US$000 US$000 US$000
Unaudited Unaudited Audited
-------------------------------------------- -------------- -------------- ---------------
Operating activities
Loss for the period before taxation (2,010) (68,839) (70,619)
Adjustments for:
Loss on disposal of inventory - 524 524
Impairment of exploration asset - 66,666 66,666
Finance income - (361) (543)
Finance expense 329 38 72
Depreciation 177 198 387
Share based payments 26 236 222
Net cash outflow from operating
activities before changes in working
capital (1,478) (1,538) (3,291)
Decrease / (increase) in trade and
other receivables 38 67 (34)
Decrease in trade and other payables (290) (1,100) (728)
Cash outflow from operating activities (1,730) (2,571) (4,053)
Tax payment - (1) (1)
-------------------------------------------- -------------- -------------- ---------------
Net cash outflow from operating
activities (1,730) (2,572) (4,054)
-------------------------------------------- -------------- -------------- ---------------
Investing activities
Finance income - 29 29
Payments in respect of property,
plant and equipment (22) - (8)
Payments in respect of intangible
assets (793) (1,300) (1,971)
Net cash consideration on acquisition (21) - -
Net cash outflow used in investing
activities (836) (1,271) (1,950)
-------------------------------------------- -------------- -------------- ---------------
Financing activities
Issue of ordinary share capital 17,396 - -
net of fees
Payment of lease liabilities (192) (245) (337)
Finance expense on lease (27) (38) (72)
Net cash inflow from financing activities 17,177 (283) (409)
-------------------------------------------- -------------- -------------- ---------------
Net increase / (decrease) in cash
and cash equivalents in the period 14,611 (4,126) (6,413)
Cash and cash equivalents at start
of the period 3,740 9,635 9,635
Effect of foreign exchange rate
changes on cash and cash equivalent (302) 336 518
Cash and cash equivalents at end
of the period 18,049 5,845 3,740
-------------------------------------------- -------------- -------------- ---------------
Chariot Limited
Notes to the interim financial statements for the six months
ended 30 June 2021
1. Accounting policies
Basis of preparation
The interim financial statements have been prepared using
policies based on International Financial Reporting Standards (IFRS
and IFRIC interpretations) issued by the International Accounting
Standards Board (IASB) as adopted for use in the EU.
The interim financial information has been prepared using the
accounting policies which were applied in the Group's statutory
financial statements for the year ended 31 December 2020. The Group
has not adopted IAS 34: Interim Financial Reporting in the
preparation of the interim financial statements.
There has been no impact on the Group of any new standards,
amendments or interpretations that have become effective in the
period. The Group has not early adopted any new standards,
amendments or interpretations.
2. Financial reporting period
The interim financial information for the period 1 January 2021
to 30 June 2021 is unaudited. The financial statements also
incorporate the unaudited figures for the interim period 1 January
2020 to 30 June 2020 and the audited figures for the year ended 31
December 2020.
The financial information contained in this interim report does
not constitute statutory accounts as defined by sections 243-245 of
the Companies (Guernsey) Law 2008.
The figures for the year ended 31 December 2020 are not the
Group's full statutory accounts for that year. The auditors' report
on those accounts was unqualified, did not contain references to
matters to which the auditors drew attention by way of emphasis and
did not contain a statement under section 263 (3) of the Companies
(Guernsey) Law 2008.
3. Loss per share
The calculation of the basic earnings per share is based on the
loss attributable to ordinary shareholders divided by the weighted
average number of shares in issue during the period.
Six months Six months Year ended
ended 30 ended 30 31 December
June 2021 June 2020 2020
Loss for the period US$000 (2,010) (68,840) (70,620)
------------- ------------- --------------
Weighted average number of
shares 391,409,534 371,519,129 379,349,854
------------- ------------- --------------
Loss per share, basic and diluted* US$(0.01) US$(0.19) US$(0.19)
------------- ------------- --------------
*Inclusion of the potential ordinary shares would result in a
decrease in the loss per share and, as such, is considered to be
anti-dilutive. Consequently a separate diluted loss per share has
not been presented.
4. Exploration and appraisal costs
30 June 2021 30 June 2020 31 December 2020
US$000 US$000 US$000
-------------- -------------- ------------------
Balance brought forward 12,822 78,264 78,264
-------------- -------------- ------------------
Additions 934 713 1,224
-------------- -------------- ------------------
Impairment - (66,666) (66,666)
-------------- -------------- ------------------
Net book value 13,756 12,311 12,822
-------------- -------------- ------------------
As at 30 June 2021 the net book value of US$13.8 million
comprises entirely the Moroccan cost pool (31 December 2020:
US$12.8 million) with activities in Namibia and Brazil having been
assessed as non-core and fully impaired in the period ended 30 June
2020.
5. Business combination
On 25 June 2021 the Company completed the acquisition of the
business of Africa Energy Management Platform ("AEMP") including
the related 10% holding in the Essakane project. AEMP is a
renewable and hybrid energy project developer with an ongoing
strategic partnership with Total Eren, a leading global player in
renewable energy, and qualifies as a business as defined in IFRS 3.
AEMP was acquired as an extension of the updated strategy to have a
positive impact on the environment, the countries and the
communities in which the Company operates.
Consideration and fair value of assets and liabilities
acquired
As initial consideration for the acquisition the Company paid
US$0.1 million in cash and issued 9,196,926 new ordinary shares at
a value of US$0.7 million. Deferred consideration representing
1,982,096 new ordinary shares is payable dependent on certain
project pipeline targets being met, which has been recognized in
equity. The consideration shares were valued at US$0.07 (5.16p)
being the close price on the day preceding completion of the
acquisition.
At acquisition, total identifiable assets and liabilities
assumed were US$0.5 million, the majority of which was attributable
to the 10% project equity held in the operational Essakane power
project. The balance of the consideration of US$0.4 million has
been allocated to goodwill, indicative of intellectual property,
management team and customer relationships acquired. None of the
goodwill is expected to be deductible for income tax purposes. No
impairment of goodwill was identified in the short period from
acquisition to 30 June 2021.
The amounts recognized in respect of the identified assets
acquired and liabilities assumed are set out in the table
below.
30 June 2021
US$000
--------------
Investment in power projects 450
--------------
Trade receivables 5
--------------
Cash 69
--------------
Trade payables (12)
--------------
Total identifiable assets acquired and liabilities assumed 512
--------------
Goodwill 380
--------------
Total consideration 892
--------------
Satisfied by:
--------------
Cash 90
--------------
New ordinary shares 660
--------------
Contingent consideration payable in shares to be issued 142
--------------
Total consideration transferred 892
--------------
Contingent payments
Further contingent payments representing a maximum of 3,964,192
new ordinary shares are payable to key members of the AEMP team
dependent on their retention and certain project pipeline targets
being met and will be recognised as share-based payments in the
Consolidated Statement of Comprehensive Income over the retention
period.
6. Cash and cash equivalents
As at 30 June 2021 the cash balance of US$18.0 million (31
December 2020: US$3.7 million ) contains the following cash
deposits that are secured against bank guarantees given in respect
of exploration work to be carried out:
30 June 2021 30 June 2020 31 December 2020
US$000 US$000 US$000
-------------- -------------- ------------------
Moroccan licences 350 650 500
-------------- -------------- ------------------
350 650 500
-------------- -------------- ------------------
The funds are freely transferrable but alternative collateral
would need to be put in place to replace the cash security.
7. Share capital
Allotted, called up and fully paid
At At At At 31 December 31
30 June 30 June 30 June 30 June 2020 December
2021 2021 2020 2020 2020
--------------- ---------- --------------- ---------- --------------- -----------
Number US$000 Number US$000 Number US$000
--------------- ---------- --------------- ---------- --------------- -----------
Ordinary
shares
of 1p
each 636,077,728 10,040 378,868,721 6,425 388,367,946 6,549
--------------- ---------- --------------- ---------- --------------- -----------
Details of the Ordinary shares issued during the six month
period to 30 June 2021 are given in the table below:
Date Description Price No of shares
US$
1 January
2021 Opening Balance 388,367,946
------------------------------------- ------- --------------
Issue of initial consideration
25 June 2021 shares for acquisition of AEMP 0.07 9,196,926
------------------------------------- ------- --------------
Issue of shares at GBP0.055 in
Placing, Subscription, Open Offer
28 June 2021 and fees 0.08 238,512,856
------------------------------------- ------- --------------
30 June 2021 636,077,728
------- --------------
The ordinary shares have a nominal value of 1p. The share
capital has been translated at the historic rate at the date of
issue, or, in the case of the LTIP, the date of grant.
In the June 2021 equity fundraising Magna Capital LDA (of which
Adonis Pouroulis, Acting CEO, is a substantial shareholder),
conditionally agreed to underwrite the fundraising. Accordingly
subsequent to the completion of the placing, subscription and open
offer, the remaining underwriting commitment is US$5.2 million
which will be fulfilled by subscribing in two tranches on or before
31 January 2022 and 28 February 2022 for new Ordinary Shares at
5.5p. Mr. Pouroulis has personally sub-underwritten the
underwriting commitment. The underwriting commitment is
transferable at Magna's sole discretion and shall reduce in equal
proportion to any funds received separately by the Company from a
farm-in or a further fundraise. The underwriting commitment
constitutes a related party transaction.
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END
IR LRMFTMTITBIB
(END) Dow Jones Newswires
September 28, 2021 01:59 ET (05:59 GMT)
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