TIDMXTR

RNS Number : 6003N

Xtract Resources plc

30 September 2021

For immediate release

30 September 2021

Xtract Resources Plc

("Xtract" or "the Company")

Unaudited Interim Results for the six months ended 30 June 2021

Xtract Resources Plc (AIM: XTR), the gold producer, exploration and development company with projects in Australia, Mozambique and Zambia, announces an update of operations and projects and its unaudited interim results for the six months ended 30 June 2021 ("Period").

Highlights

Financial

   --      Revenue from gold sales of GBP0.16m (H1 2020: GBP0.61m) 
   --      Net loss of GBP2.204m (H1 2020: GBP0.19m) 

-- Administration & operating expenses GBP2.19m (including a share-based payment charge of GBP1.47m (H1 2020: GBP0.62m)

   --      Cash of GBP8.08m (FY 2020: GBP0.14m) 
   --      Net assets of GBP21.45m (FY 2020: GBP10.74m) 

-- Total alluvial mining contractor gold production of 22.1 kg (equivalent to 711 ounces) (H1 2020: 32.1kg (equivalent to 1,033 ounces))

-- Total of 6.2 Kg (equivalent to 199 ounces) attributable to the Company's Mozambican operating subsidiary, Explorator (H1 2020: 9.0kg (equivalent to 289 ounces))

Operational

-- Results from Phase-One drilling and an Induced polarization (IP) MIMDAS survey have provided significant potential to upgrade the known inferred mineral resources at the Bushranger copper-gold project within a world-class mining district in New South Wales, Australia

-- Completed drilling and analysis of drillcore at the Eureka project in Zambia confirmed the extension of the Eureka mineralised zone to the north-west - beyond 300m and still open

-- Reconnaissance drilling at the Kalengwa project has confirmed zones of copper-gold mineralization up to 100m away from known areas of historic mining

Corporate

   --      Total of GBP10.5m (before expenses) raised through equity placings 

Operational Overview

During the period the company released significant results on its copper-gold portfolio, including the definition of areas in which to expand currently known mineral resources on their Bushranger copper-gold porphyry deposit within Australia's world-class Lachlan Fold Belt district of New South Wales, and the Eureka copper-gold rich structural corridor to the West of the Zambian Copper Belt.

Phase One drilling was completed at the Bushranger project in New South Wales for a completed meterage of just over 5,000m. The initial results of the programme have proven very exciting with intercepts of mineralization comparable to Alkane's Boda copper-gold discovery 170km away from the Racecourse deposit. The results of hole BRDD-20-001 which was drilled down-plunge of the resource included an overall intercept of 920m @ 0.33% CuEq from 110m downhole. An induced polarization (IP) MIMDAS survey flown at Bushranger generated a number of co-incident chargeability and resistivity anomalies with potential to extend the known inferred mineral resources at the project which are being tested by the Phase Two Drilling programme.

Fifteen shallow drill holes were drilled at the Eureka Project, totaling 1,089m of drilling and designed to test for extensions of the near-vertical mineralisaed zone. Results have extended the strike-length of known mineralization beyond 300m to the north-west, with exceptional results, and is still open.

Following positive results from a desk-based data compilation exercise on the Kalengwa project, a reconnaissance diamond drilling programme of six short vertical holes was designed to test a shallow zone of mineralization just south of a historic open pit. An intercept of 69m at 0.88% Cu and 2.59 g/t Au was returned from 9m depth in drillhole KXD-006, which is 100m to the south of the pit.

The Manica hard rock project continued to progress satisfactorily despite COVID-19 restrictions in Mozambique and South Africa.

The results from the alluvial operations during the period reflected the difficult operating conditions.

Summary of Company Projects

Australia

Bushranger project

The Phase One drilling programme at the Racecourse deposit was completed in April 2021 for a total of just over 5,000m of drilling in six holes (BRDD-21-001 to BRDD-21-006). The objective of the Phase One drilling programme was to extend the known estimated mineral resources down plunge to the North-West and at depth. The five holes which were completed (one hole was abandoned due to excessive deviation) all intersected the zoned Racecourse porphyry copper alteration-mineralisation system. A JORC (2012) compliant inferred mineral resource of 71Mt @ 0.44% Cu and 0.064 g/t Au at a 0.3% Cu cut-off has been estimated at the Racecourse prospect, which is believed to be one of the largest currently undeveloped porphyry deposits in the Lachlan Fold Belt of New South Wales, Australia, and which does not include the latest drilling.

All drillholes intersected wider mineralised zones than anticipated in the form of disseminated and fracture-fill chalcopyrite, accompanied by pyrrhotite and pyrite and confirm that the Racecourse copper mineralisation increases in width towards the northwest beyond the existing Inferred Mineral Resource. Assay results from all completed holes (BRDD-20-001, BRDD-21-002, BRDD-21-003, BRDD-21-005, & BRDD-21-006)) were received within the reporting period and were very encouraging.

Hole BRDD-20-001 was drilled down-plunge of the deposit and returned an overall intersection of 920m @ 0.3% Cu, 0.02g/t Au and 1.45g/t Ag (0.33% CuEq) from 110m. Higher-grade zones within the overall mineralised envelope included 156m @ 0.48% Cu, 0.04g/t Au & 2.44g/t Ag (0.52% CuEq) from 110m and 44m @ 0.50% Cu, 0.05g/t Au & 1.92/t Ag (0.55% CuEq) from 504m.

All other drillholes were drilled obliquely across the deposit to test the width of the porphyry system and for extensions of mineralization to the northwest. The following is a summary of the significant mineralisaed intervals from the Phase One Programme;

   -       BRDD-21-001: 920m @ 0.33% CuEq from 110m 

o Including 156m @ 0.52% CuEq from 110m

o And 44m @ 0.55% CuEq from 504m

   -       BRDD-21-002: 362m @ 0.2% CuEq from 422m 

o Including 14m @ 0.36% CuEq from 500m

o And 26m @ 0.32% CuEq from 638m

   -       BRDD-21-003: 200m @ 0.2% CuEq from 598m 

o Including 68m @ 0.26% CuEq from 676m

o And 16m @ 0.31% CuEq from 714m

   -       BRDD-21-005 returned 112m @ 0.22% CuEq from 716m 

o including 34m @ 0.28% CuEq from 736m

o and 10m @ 0.33% CuEq from 802m

   -       BRDD-21-006 returned assays of 222m of 0.25% CuEq from 600m 

o including 40m @ 0.33% CuEq from 776m

o and 22m @ 0.38% CuEq from 782m

The initial results of the Phase One drilling programme are exciting and the overall mineral intersection and higher-grade zones in drill hole BRDD-20-20 compare very favourably with intercepts reported by Alkane Resources Limited ("Alkane") for their Boda copper-gold discovery located 170km from Bushranger. The Phase One results also give significant potential to extend currently known mineral resources at the Racecourse deposit. There are further indications that grade may increase towards the surface within the high-grade mineralized "crown" of the porphyry system, which could significantly add to the known inferred mineral resource and enhance the open-pit mining potential of the project.

External consultants were engaged to build a financial model to investigate the economics of open pit extraction of the shallower ore.

An induced Polarisation (IP) MIMDAS geophysical survey was commissioned at Bushranger to potentially trace copper-gold and associated sulphide alteration to beyond 1,000m vertical depth and laterally. The results indicate that the copper-gold mineralisation comprising the Racecourse Mineral Resource is associated with a strong IP chargeability response on the southwestern side of the central porphyry intrusion, which is evident on all survey lines along 2.5km of strike length. The survey also indicates that the Racecourse Mineral Resource has the potential to extend in several directions, including at least 800m to the northwest beyond the limit of the currently defined mineral resource.

Following the successful results of the Phase One drilling and (IP) MIMDAS survey at the Bushranger project, a Phase Two programme is underway to test for higher-grade mineralisation at shallower depths within the interpreted mineralised "crown" of the porphyry system which will be influenced by the modelled pit optimisation design.

Zambia

Eureka

A Phase 2 drilling programme was partially completed in the first half of the year at the Eureka copper-gold deposit with the following aims:

-- To test the deposit north-west strike extension suggested by exploration pitting, thereby demonstrating at least 300m of strike extent

-- To provide additional information on internal deposit width and grade to support open pit mine planning

-- To define a copper resource sufficient to support an open pit mining operation for a minimum of 3 years

15 shallow holes, designated EX-08 to EX-022, totalling 1,089m were completed by mid-year, mostly angled to cross the near-vertical mineralised zone. Core from three of these was cut by diamond saw and sent for assay. These holes were selected as a priority to provide information on the grade, width and continuity of the mineral zone in the area of the planned box cut beneath the shallow historic open pit (EX-022) and to confirm the extension of the deposit to the north-west (EX-018 & EX-019).

Results confirmed the strike extension of the Eureka mineralised zone to the north-west - beyond 300m and still open. Assay results from the first three holes returned exceptional copper grades beneath the current open pit, averaging 4.42% Cu over 27.0m (circa 18m true width) from 50m depth in angled hole EX-022, including two 9m sub-intervals >6% Cu and 1m >20% Cu.

In the north-west extension, angled hole EX-019 assayed 0.83% Cu over 18.0m (circa 12m true width), including 1.36% Cu over 8.0m. The near-vertical mineral zone occurs directly beneath approximately 9m of overburden/saprolite, suggesting just shallow pre-stripping will be required. Additional drill assay results were awaited and it was planned to drill additional holes to further extend the deposit footprint.

The Company also announced that plans were being prepared to excavate a box-cut at the base of the current open pit to obtain a bulk sample and provide break points for benches. Roads in and around the area were being upgraded to receive heavy vehicles and allow the transport of ore from site. Tenders were received from several Zambia-based open pit contractors for the pit operation.

Kalengwa

The Kalengwa open pit Copper Mine is believed to have been one of the highest-grade copper mines in Zambia. Total production of 1.9Mt of 9.44% Cu and 50g/t Ag was reported from the open pit over a 12-year period from 1970 to 1982 resulting in circa 15,000 tonnes of copper production per annum.

Based on historic drilling, further resources remain unexploited lateral to the open pit -a non-JORC compliant, resource of 1.45Mt @ 2.50% Cu (for 36,300 tonnes of copper metal) is reported. This historic resource was prepared in 1998 but is not compliant with a recognised standard and has not been subsequently updated or verified (Source: African Minerals Ltd, Assessment of Kalengwa Mine, 1998, as reported by Lunga Resources Ltd, 2013). With focus on mining of the high-grade core of the deposit, much of the surrounding ground has only been sparsely drilled within this brownfield target, including areas within the original soil geochemical anomaly.

Compilation of historic mine drilling data identified a shallow zone of semi-consolidated copper oxide mineralisation located just south of the old open pit. A reconnaissance diamond drilling programme of six short vertical holes was completed by Xtract. Based on preliminary testing by hand-held XRF, the most interesting hole, KXD-006, was initially selected for laboratory assay, returning results as follows: 69.0m @ 0.88% Cu, 2.59g/t Ag from 9.0m depth, including sub-intervals of 12m @ 1.01% Cu and 17m @ 1.07% Cu.

KXD-006 is located about 100m from the open pit and the intersection is approximately twice the thickness reported in historic holes. Core from the remaining holes was still being processed at mid-year. The Company planned to review results from KXD-006, along with information from the remaining holes, to prepare for further delineation of the mineralised zone.

In addition, rock dumps from the historic mine workings remain on site and it was proposed to evaluate these with a view to reprocessing them to recover copper. Also, further evaluation test work was planned to confirm the suitability of the Kalengwa mine tailings for re-treatment.

Mozambique

Mozambique is recognised as a stable mining jurisdiction within a favourable political and legal regime. The Manica Gold Project is situated in the Odzi-Mutare-Manica Greenstone belt, with an estimated 2 million ounces of gold previously mined in the area.

Operations during the period were adversely affected due to COVID 19, with most of the mining contactor's key personnel returning to their homeland for medical treatment or vaccination. Operations were stopped or seriously curtailed and despite this we still managed to maintain an operation with production before operating conditions improved during the second half of the Period. The Fair Bride Project is an open pit and underground project with a combined SAMREC compliant resource of 1.262 million ounces (including 782k ounces Measured and Indicated). In 2019, the Company was given the opportunity to move the Fair Bride Project forward, from development stage to production through a collaboration agreement with Mutapa Mining and Processing LDA , thereby mitigating any execution risk to Xtract. The Fair bride Project continued to progress satisfactorily despite COVID-19 restrictions in Mozambique and South Africa with production scheduled to commence during the second half of 2021.

The Company has mining contractor agreements in place with Longhau Tianci Mining Co Ltd ("Longhau") for the exploitation of the Guy Fawkes and Boa Esperanza hard rock gold deposits at its Manica mining concession. SAMREC-compliant Indicated and Inferred Resources of 1.13Mt @ 1.91g/t Au (at a cut-off of 0.5g/t open cut and 1.5g/t underground were previously reported for Guy Fawkes, with potential for additional upside in several dimensions. At Boa Esperanza, a SAMREC-compliant hard rock Inferred Resource gold of 143,000 tonnes @ 0.77g/t Au (at a cut-off of 0.5g/t less 20% mine depletion) was also previously reported.

Financial

During the Period, administration expenses for the Group amounted to GBP1.96m (H1 2020 - GBP0.34m). Included within administration expenses is an amount of GBP1.47m (H1 2020- Nil) in relation to a share-based payment charge in relation to the grant of 28.4 million options to directors and employees in February 2021.

Enquiries :

 
                             Colin Bird, Executive              +44 (0)20 3416 
 Xtract Resources Plc         Chairman                           6471 
 Beaumont Cornish 
  (Nominated Adviser         Michael Cornish 
  and                         Felicity Geidt                    +44 (0)20 7628 
  Joint Broker)               Email: corpfin@b-cornish.co.uk     3369 
 Novum Securities Limited                                       +44 (0)207 399 
  (Joint Broker)             Colin Rowbury/Jon Belliss           9427 
 

This announcement contains inside information for the purposes of Article 7 of EU Regulation No. 596/2014 on market abuse. Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain. The person who arranged for the release of this announcement on behalf of the Company was Joel Silberstein, Director.

Further details are available from the Company's website which details the company's project portfolio as well as a copy of this announcement: www.xtractresources.com

Xtract Resources PLC

Consolidated Income Statement

For the six month period ended 30 June 2021

 
                                                         Six months ended        Year ended 
                                                                                31 December 
                                        30 June 2021                   30 June         2020 
                                           Unaudited            2020 Unaudited      Audited 
                                 Notes       GBP'000                   GBP'000      GBP'000 
Continuing operations 
 
Revenue from Gold sales                          153                       613        1,725 
Administrative and operating 
 expenses                                    (2,191)                     (627)      (2,091) 
                                        ------------  ------------------------  ----------- 
Direct Operating                               (228)                     (254)      (1,006) 
Other Operating                                    -                      (32)         (45) 
Administration                               (1,963)                     (341)      (1,040) 
                                        ------------  ------------------------  ----------- 
Project expenses                                (94)                      (82)         (96) 
 
Operating loss                               (2,132)                      (96)        (462) 
 
Other gains and losses                             -                         -        (164) 
Finance (cost)/income                           (73)                      (91)        (181) 
                                        ------------  ------------------------  ----------- 
(Loss)/profit before tax                     (2,205)                     (187)        (807) 
Taxation                                                                     -        (107) 
                                        ------------  ------------------------  ----------- 
  (Loss)/profit for the period 
   from continuing operations        3       (2,205)                     (187)        (914) 
(Loss)/profit for the period         6       (2,205)                     (187)        (914) 
                                        ------------  ------------------------  ----------- 
 
Attributable to: 
Equity holders of the parent                 (2,205)                     (187)        (914) 
 
 
Net (loss)/profit per share 
Basic (pence)                        6        (0.40)                    (0.00)       (0.20) 
                                        ============  ========================  =========== 
Diluted (pence)                      6        (0.40)                    (0.00)       (0.20) 
                                        ============  ========================  =========== 
 
 
 
 
 

Xtract Resources PLC

Consolidated statement of comprehensive income

For the six month period ended 30 June 2021

 
                                                 Six months ended          Year ended 
                                                   30 June                   31 December 
                                                      2021  30 June 2020            2020 
                                                 Unaudited     Unaudited         Audited 
                                                   GBP'000       GBP'000         GBP'000 
 
(Loss)/profit for the period                       (2,205)         (187)        (914) 
                                          ----------------  ------------  ----------- 
 
 
  Other comprehensive income 
  Items that will not be reclassified 
   subsequently to profit and loss 
   Exchange differences on translation 
   of foreign operations                               112          (11)        (210) 
 
Other comprehensive (loss)/income 
 for the period                                        112          (11)        (210) 
 
Total comprehensive (loss)/income 
 for the period                                    (2,093)         (198)      (1,124) 
 
Attributable to: 
Equity holders of the parent                       (2,093)         (198)      (1,124) 
 
                                                   (2,093)         (198)      (1,124) 
                                          ================  ============  =========== 
 
 

Xtract Resources PLC

Consolidated statement of changes in equity

As at 30 June 2021

 
                Share      Share      Warrant        Share-based   Available-for-sale   Foreign       Accumulated   Total 
                 Capital    premium    reserve        payments      investment          currency       losses        Equity 
                 GBP'000    account    GBP'000        reserve       reserve             translation    GBP'000       GBP'000 
                            GBP'000                   GBP'000       GBP'000             reserve 
                                                                                        GBP'000 
               ---------  ---------  -------------  ------------  -------------------  ------------  ------------  ----------- 
 Balance at 
  31 
  December 
  2019             4,892     59,884             54           397                    -           276      (54,719)     10,784 
               ---------  ---------  -------------  ------------  -------------------  ------------  ------------  --------- 
 Loss for the 
  period               -          -              -             -                    -             -         (187)      (187) 
 Foreign 
  currency 
  translation 
  difference           -          -              -             -                    -          (11)             -       (11) 
 Issue of 
  Shares               3        154              -             -                    -             -             -        157 
 Share issue           -          -              -             -                    -             -             -          - 
 costs 
 Issue of              -          -              -             -                    -             -             -          - 
 share 
 options 
 Expiry of             -          -              -             -                    -             -             -          - 
 warrants 
 Exercise of           -          -              -             -                    -             -             -          - 
 warrants 
               ---------  ---------  -------------  ------------  -------------------  ------------  ------------  --------- 
 Balance at 
  30 
  June 2020        4,895     60,038             54           397                    -           265      (54,906)     10,743 
               ---------  ---------  -------------  ------------  -------------------  ------------  ------------  --------- 
 Loss for the 
  period               -          -              -             -                    -             -         (727)      (727) 
 Foreign 
  currency 
  translation 
  differences          -          -              -             -                    -         (199)             -      (199) 
 Issue of 
  Shares              33      1,979              -             -                    -             -             -      2,012 
  Share issue 
   costs               -       (66)              -             -                    -             -             -       (66) 
 Expiry of 
  share 
  options              -          -              -         (103)                    -             -           103          - 
 Issue of 
  share 
  options              -          -              -           142                    -             -             -        142 
 Issue of 
  Warrants             -          -             22             -                    -             -             -         22 
 Exercise of           -          -              -             -                    -             -             -          - 
 warrants 
 Balance at 
  31 
  December 
  2020             4,928     61,951             76           436                    -            66      (55,530)     11,927 
               ---------  ---------  -------------  ------------  -------------------  ------------  ------------  --------- 
 Loss for the 
  period               -          -              -             -                    -             -       (2,205)    (2,205) 
 Foreign 
  currency 
  translation 
  difference           -          -              -             -                    -           112             -        112 
 Issue of 
  Shares              45     10,104              -             -                    -             -             -    10,149 
  Share issue          -          -              -             -                    -             -             -          - 
   costs 
 Option 
  exercised                      19                         (19) 
 Issue of 
  share 
  options              -          -              -         1,473                    -             -             -      1,473 
 Issue of 
  warrants             -      (456)            456             -                    -             -             -          - 
 Exercise of 
  warrants             -         10           (10)             -                    -             -             -          - 
 Balance at 
  30 
  June 2021        4,973     71,628            522         1,890                    -           178      (57,735)     21,456 
               =========  =========  =============  ============  ===================  ============  ============  ========= 
 
 
 

Xtract Resources PLC

Consolidated Statement of Financial Position

As at 30 June 2021

 
                                                               30 June    31 December 
                                                   30 June        2020   2020 Audited 
                                            2021 Unaudited   Unaudited        GBP'000 
                                    Notes          GBP'000     GBP'000 
 
Non-current assets 
Intangible Assets                       7           13,622      10,298         11,978 
Property, plant & equipment             8               27          24             19 
Other financial assets                                   -           -              - 
                                                    13,649      10,322         11,997 
 
Current assets 
Trade and other receivables                            185         443            147 
Loan receivable                         9                -         142              - 
Inventories                                              9          38              8 
Cash and cash equivalents                            8,084         146            919 
                                                     8,278         769          1,074 
 
Total assets                                        21,927      11,091         13,071 
                                           ---------------  ----------  ------------- 
 
Current liabilities 
Trade and other payables                               453         348          1,051 
Current tax payable                                     18           -             93 
Other payables                                           -           -              - 
                                                       471         348          1,144 
Non-current liabilities 
Other payables                                           -           -              - 
                                                         -           -              - 
 
Total liabilities                                      471         348          1,144 
 
Net current assets/(liabilities)                     7,807         421           (70) 
 
Net assets                                          21,456      10,743         11,927 
                                           ===============  ==========  ============= 
 
Equity 
Share capital                          10            4,973       4,895          4,928 
Share premium account                               71,628      60,038         61,951 
Warrant reserve                                        522          54             76 
Share-based payments reserve                         1,890         397            436 
Fair Value reserve                                       -           -              - 
Foreign currency translation 
 reserve                                               178         265             66 
Accumulated losses                                (57,735)    (54,906)       (55,530) 
  Equity attributable to equity 
   holders of the parent                            21,456      10,743         11,927 
Total equity                                        21,456      10,743         11,927 
                                           ===============  ==========  ============= 
 
 
 

Xtract Resources PLC

Consolidated Statement of Cash Flows

For the six month period ended 30 June 2021

 
                                                     6 months 
                                                 period ended       6 months     Year ended 
                                                      30 June   period ended    31 December 
                                                         2021   30 June 2020           2020 
                                                    Unaudited      Unaudited        Audited 
                                         Notes        GBP'000        GBP'000        GBP'000 
 
Net cash used in operating activities       11        (1,455)          (153)            189 
                                                -------------  -------------  ------------- 
 
Investing activities 
 
Acquisition of subsidiary undertaking                       -              -             36 
Acquisition of intangible fixed 
 assets                                               (1,524)           (62)          (287) 
Acquisition of tangible fixed assets                      (5)              -              - 
 
Net cash from/(used in) investing 
 activities                                           (1,529)           (62)          (251) 
                                                                              ------------- 
 
Financing activities 
Proceeds on issue of shares                            10,149              -            636 
                                                            -              -              - 
 
Net cash from financing activities                     10,149              -            636 
                                                                              ------------- 
 
Net increase/(decrease) in cash 
 and cash equivalents                                   7,165          (215)            574 
 
Cash and cash equivalents at beginning 
 of period                                                919            361            361 
Effect of foreign exchange rate 
 changes                                                    -              -           (16) 
                                                                              ------------- 
 
Cash and cash equivalents at end 
 of period                                              8,084            146            919 
                                                -------------  -------------  ------------- 
 

Xtract Resources PLC

Notes to the interim financial information

For the six month period ended 30 June 2021

   1.       General information 

Xtract Resources PLC ("Xtract") is a company incorporated in England and Wales under the Companies Act 2006. The Company's registered address is 1(st) Floor, 7/8 Kendrick Mews, London, SW7 3HG. The Company's ordinary shares are traded on the AIM market of the London Stock Exchange. The Company invests and engages in the management, financing and development of early stage resource assets.

   2.       Accounting policies 

Basis of preparation

Xtract prepares its annual financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union (EU).

The consolidated interim financial information for the period ended 30 June 2020 presented herein has been neither audited nor reviewed. The information for the period ended 31 December 2020 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006 but has been derived from those accounts. The auditor's report on those accounts was not qualified and did not contain statements under section 498 (2) or (3) of the Companies Act 2006. As permitted, the Group has chosen not to adopt IAS 34 'Interim Financial Reporting'.

The interim financial information is presented in pound sterling and all values are rounded to the nearest thousand pounds (GBP'000) unless otherwise stated.

The interim consolidated financial information of the Group for the six months ended 30 June 2021 were authorised for issue by the Directors on 29 September 2021.

Going concern

As at 30 June 2021 the Group held cash balances of GBP8,084K. An operating loss has been reported for the Group, however, as at the date of the release of the consolidated financial information, the Group's assets have been and continue to generate revenues.

As is common with junior mining companies, the Company in the past has raised finance from shareholders for its activities, in discrete tranches to finance its activities for limited periods only and further funding would be required from time to time to finance those activities.

During the first half of 2021, the Group raised a total of GBP10.5 million before expenses.

The Directors have assessed the working capital requirements for the forthcoming twelve months and have undertaken the following assessment.

Upon reviewing those cash flow projections for the forthcoming twelve months, the Directors would not expect for funds to be raised through equity raisings, or require additional financial resources in the twelve-month period from the date of authorising the consolidated information to enable the Company to fund its current operations and to meet any future commitments in the event that the Company decides to continue with further exploration work including drilling campaigns in Australia and Zambia.

The Directors therefore continue to adopt the going concern basis of accounting in preparing the consolidated financial information and therefore the consolidated financial information does not include any adjustments relating to the recoverability and classification of assets and liabilities that may be necessary if the going concern basis of preparation of the consolidated financial information is not appropriate.

On this basis the Board believes that it is appropriate to prepare the consolidated financial information on the going concern basis.

Changes in accounting policy

The accounting policies applied are consistent with those adopted and disclosed in the Group Consolidated financial statements for the year ended 31 December 2020, except for the changes arising from the adoption of new accounting pronouncements detailed below.

There are no amendments or interpretations to accounting standards that would have a material impact on the financial statements.

   3.       Business segments 

Segmental information

The divisions on which the Group reports its primary segment information are reported to its Executive Chairman, who is the Chief Operating Decision maker of the Group. The Executive Chairman and the Chief Operating Officer are responsible for allocating resources to the segments and assessing their performance.

Principal activities are as follows:

-- Operating alluvial gold mining segment - Mozambique

-- Mine Development - Mozambique

-- Exploration

-- Investment and other

 
          Segment results 
 
           6 months ended 30                                                                 Alluvial 
           June 2021                          Mine      Exploration       Investment      Gold Mining 
                                       Development     (Continuing)        And Other       Production 
                                      (Continuing)                      (Continuing)     (Continuing)            Total 
 
 
                                           GBP'000          GBP'000          GBP'000          GBP'000          GBP'000 
          Segment revenue 
          Sale of gold bars                      -                -                -              153              153 
          Less: Cost of sales                    -                -                -                -                - 
                                  ----------------  ---------------  ---------------  ---------------  --------------- 
          Segment Gross profit                   -                -                -              153              153 
                                  ----------------  ---------------  ---------------  ---------------  --------------- 
 
          Administrative and 
           operating expenses                                  (39)          (1,877)            (275)          (2,191) 
          Project costs                                           -             (94)                -             (94) 
                                                    ---------------  ---------------  ---------------  --------------- 
          Segment result                                       (39)           (1,91)            (122)          (2,132) 
                                                    ---------------  ---------------  ---------------  --------------- 
          Other gain and losses                                   -                -                -                - 
          Finance costs                                           -             (69)              (4)             (73) 
                                                    ---------------  ---------------  ---------------  --------------- 
          (Loss)/profit before 
           tax                                                    -          (2,040)            (126)          (2,205) 
          Tax                                                     -                -                -                - 
                                  ----------------  ---------------  ---------------  ---------------  --------------- 
          (Loss)/profit for 
           the period                                          (39)          (2,040)            (126)          (2,205) 
                                                    ===============  ===============  ===============  =============== 
 
 
 
 
                                                                                              Alluvial 
                                                          Exploration      Investment      Gold Mining 
                                   Mine Development      (Continuing)       and Other       Production 
                                       (Continuing)                      (Continuing)     (Continuing)       Total 
 
         6 months ended 30 
          June 2020                         GBP'000           GBP'000         GBP'000          GBP'000     GBP'000 
         Segment revenue 
         Sale of gold bars                        -                 -               -              613         613 
         Less: Cost of sales                      -                 -               -                -           - 
                                 ------------------  ----------------  --------------  ---------------  ---------- 
         Segment Gross profit                     -                 -               -              613         613 
                                 ------------------  ----------------  --------------  ---------------  ---------- 
 
         Administrative and 
          operating expenses                      -                 -           (372)            (255)       (627) 
         Project Costs                            -                 -            (29)             (53)        (82) 
                                 ------------------  ----------------  --------------  ---------------  ---------- 
         Segment result                           -                 -           (401)              305        (96) 
         Other gain and losses                    -                 -               -                -           - 
         Finance costs                            -                 -             117            (208)        (91) 
                                 ------------------  ----------------  --------------  --------------- 
         (Loss)/profit before 
          tax                                     -                 -           (284)               97       (187) 
         Tax                                      -                 -               -                -           - 
                                 ------------------  ----------------  --------------  ---------------  ---------- 
         (Loss)/Profit for 
          the period                              -                 -           (284)               97       (187) 
                                 ==================  ================  ==============  ===============  ========== 
 

Year ended 31 December 2020

 
                                                                                                Alluvial 
                                                                              Investment     Gold Mining 
                                       Mine Development      Exploration       and Other      Production 
                                           (Continuing)     (Continuing)    (Continuing)    (Continuing)       Total 
                                                GBP'000          GBP'000         GBP'000         GBP'000     GBP'000 
          Segment revenue 
          Sale of gold bars                           -                -               -           1,725       1,725 
          Less: Cost of                                                -                               - 
           sales                                      -                                -                           - 
                                      -----------------  ---------------  --------------  --------------  ---------- 
          Segment Gross 
           profit                                     -                -               -           1,725       1,725 
           Administrative 
            and operating expenses                 (64)                -         (1,021)         (1,006)     (2,091) 
           Project Costs                              -                -            (96)               -        (96) 
                                      -----------------  ---------------  --------------  --------------  ---------- 
           Segment result                          (64)                -         (1,117)             719       (462) 
                                      -----------------  ---------------  --------------  --------------  ---------- 
 
           Other gains and 
            losses                                    -                -           (164)               -       (164) 
           Finance income 
            / (costs)                                 -                -           (148)            (33)       (181) 
  (Loss)/Profit 
   before tax                                      (64)                -         (1,429)             686       (807) 
           Tax                                        -                -               -           (107)       (107) 
                                      -----------------  ---------------  --------------  --------------  ---------- 
           (Loss)/Profit for 
            the period                             (64)                -         (1,429)             579       (914) 
                                      =================  ===============  ==============  ==============  ========== 
 
 
 
  Balance Sheet                 30 June 2021    30 June 2020    31 December 2020 
                                     GBP'000         GBP'000             GBP'000 
 Total Assets 
 
  Gold production                        125             105                 724 
  Exploration                          3,467               -               1,958 
  Mining Development                  10,276          10,299              10,104 
  Investment & other                   8,058             687                 285 
                              --------------  --------------  ------------------ 
  Total segment assets                21,927          11,092              13,071 
                              ==============  ==============  ================== 
 
  Liabilities 
 
  Gold production                      (243)           (161)               (635) 
  Exploration                              -               - 
  Mining Development                     (3)               -                 (1) 
  Investment & other                   (225)           (187)               (508) 
  Total segment liabilities            (471)           (348)             (1,144) 
                              ==============  ==============  ================== 
 

The accounting policies of the reportable segments are the same as the Group's accounting policies which are described in the Group's latest annual financial statements. Segment results represent the profit earned by each segment without allocation of the share of profits of associates, central administration costs including directors' salaries, investment revenue and finance costs, and income tax expense. This is the measure reported to the Group's Board for the purposes of resource allocation and assessment of segment performance.

   4.         Tax 

At 30 June 2021, the Group has no deferred tax assets or liabilities and no income tax is chargeable for the period.

   5.         Revenue 

An analysis of the Group's revenue is as follows:

 
 
                                                                                                  Six months 
                                                                                                  ended          Year ended 
                                                                          30 June                               31 December 
                                                                             2021                30 June 2020          2020 
                                                                          GBP'000                     GBP'000       GBP'000 
 
                Revenue from gold sales                                       153                         613         1,725 
                                                                 ----------------  --------------------------  ------------ 
                                                                              153                         613         1,725 
                                                                 ----------------  --------------------------  ------------ 
 
   6.         Loss per share 

The calculation of the basic and diluted loss per share is based on the following data:

 
 
Six months ended                                                                                                                         Year ended 
                                                                                        30 June                                         31 December 
                                                                                           2021                         30 June 2020           2020 
   Losses                                                                               GBP'000                              GBP'000        GBP'000 
 
 Losses for the purposes of basic 
  earnings per share being: 
  Net loss from continuing operation 
  attributable to equity holders of 
  the parent                                                                            (2,205)                                (187)          (914) 
                                                                                        (2,205)                                (187)          (914) 
                                                               --------------------------------  -----------------------------------  ------------- 
 
 Number of shares 
 Weighted average number of ordinary 
  and diluted shares for the purposes 
  of basic earnings per share                                                       581,422,831                          457,095,606    487,748,658 
 
 (Loss)/profit per ordinary share 
  basic and diluted (pence)                                                              (0.40)                               (0.00)         (0.20) 
 

In accordance with IAS 33, the share options and warrants do not have a dilutive impact on earnings per share, which are set out in the consolidated income statement. Details of the shares issued during the period as shown in Note 10 of the Financial Statements.

   7.         Intangible assets 
 
                              Development expenditure 
                               & Mineral exploration        Total 
                                              GBP'000     GBP'000 
=====================  ==============================  ========== 
As at 1 January 2021                           11,978      11,978 
=====================  ==============================  ========== 
Additions - at fair                                 -           - 
 value (Manica) 
Additions - at cost                                 -           - 
 (Manica) 
Foreign exchange                                  172         172 
=====================  ==============================  ========== 
Additions - at fair                                 -           - 
 value (Bushranger) 
=====================  ==============================  ========== 
Additions - at cost 
 (Bushranger)                                   1,233       1,233 
=====================  ==============================  ========== 
Foreign exchange                                 (54)        (54) 
=====================  ==============================  ========== 
Additions - at cost 
 (Eureka)                                         235         235 
=====================  ==============================  ========== 
Additions - at cost 
 (Kalengwa)                                        58          58 
=====================  ==============================  ========== 
As at 30 June 2021                             13,622      13,622 
=====================  ==============================  ========== 
Amortisation 
As at 1 January 2021                                -           - 
Charge for the year                                 -           - 
As at 30 June 2021                                  -           - 
=====================  ==============================  ========== 
Net Book value at 
 1 January 2021                                11,978      11,978 
=====================  ==============================  ========== 
Net book value at 
 30 June 2021                                  11,913      11,913 
=====================  ==============================  ========== 
 

Mozambique

In March 2016, The Company acquired the Manica licence 3990C ("Manica Project") from Auroch Minerals NL. The Manica Project is situated in central Mozambique in the Beira Corridor. At the time of acquisition, the project had a JORC compliant resource of 900koz (9.5Mt@ 3.01g/t) in situ, which has increased to 1.257moz (17.3Mt @ 2.2g/t) following an independent technical report completed by Minxcon (Pty) Ltd in May 2016.

Australia

In November 2020, the Company acquired the Bushranger copper-gold project ("Bushranger Project") which comprises of four exploration licences totaling 501km2, located in eastern central New South Wales, Australia. The Bushranger Project hosts the Racecourse deposit, a JORC (2012) compliant inferred resource estimated at 71Mt @ 0.44% Cu and 0.064g/t Au using a 0.3% Cu cut-off.

Zambia

Kalengwa is located in the North-western province of Zambia 800 km north-west of Lusaka and 400 km south-west of Kitwe. A large-scale exploration permit 24401-HQ-LEL, was issued on 2 April 2019 and is valid for an initial period of 4 years.

The Kalengwa Copper Mine is believed to have been one of the highest-grade copper mines in Zambia. A mineralised high-grade supergene core was reported to have yielded an average grade of 27% Cu, making up approximately 20% of the ore body, which was trucked unprocessed to Kitwe for direct smelting. Total production of 1.9 Mt of 9.44% Cu and 50 g/t Ag was reported from the open pit resulting in circa 15,000 tonnes of copper production per annum for 12 years of production.

   8.         Property, plant and equipment 
 
  Cost or fair value on          Mining plant    Land & Buildings      Furniture      Total 
   acquisition of subsidiary      & equipment                         & Fittings 
                                      GBP'000             GBP'000        GBP'000    GBP'000 
 At 1 January 2021                         19                   -              -         19 
 Additions - at cost                        5                   -              -          5 
 Foreign exchange                           3                   -              -          3 
                               --------------  ------------------  -------------  --------- 
 At 30 June 2021                           27                   -              -         27 
                               --------------  ------------------  -------------  --------- 
 
    Depreciation 
 At 1 January 2021                          -                   -              -          - 
 Charge for the period                      -                   -              -          - 
                               --------------  ------------------  -------------  --------- 
 At 30 June 2021                            -                   -              -          - 
                               --------------  ------------------  -------------  --------- 
  Net book value 
 At 30 June 2021                           27                   -              -         27 
                               --------------  ------------------  -------------  --------- 
 At 1 January 2021                         19                   -              -         19 
                               --------------  ------------------  -------------  --------- 
 
   9.         Loan Receivable 
 
                                    As at            As at                As at 
                                  30 June     30 June 2020     31 December 2020 
                                     2021          GBP'000              GBP'000 
                                  GBP'000 
  Loan receivable                       -              133                  133 
  Foreign exchange                      -                9                 (10) 
  Provision for impairment              -                -                (123) 
                                        -              142                    - 
  ---------------------------------------  ---------------  ------------------- 
 
 

Convertible Loan Agreement - Moz Gold Limitada

On 15 December 2017, the Company agreed to loan a total of US$700K to Moz Gold to be drawn down in two separate tranches, the first tranche of US$400K and second tranche of US$300K, with an interest rate of 30% per annum.

During 2020, management assessed the recoverability and carrying value of the asset at the year end and given the uncertainties, it was decided to provide for impairment of the loan.

   10.        Share capital 
 
                                      As at           As at               As at 
                                    30 June    30 June 2020    31 December 2020 
                                2021 Number          Number              Number 
  Issued and fully paid 
   Ordinary shares of 
   0.01p each 
   at 1 January                           -               -                   - 
  Share issued during 
   the period                             -               -                   - 
                             --------------  --------------  ------------------ 
  Outstanding as at 30 
   June                                   -               -                   - 
 
 Deferred shares of 0.09p 
  each 
 As at 1 January              5,338,221,169   5,338,221,169       5,338,221,169 
 Issued during the period                 -               -                   - 
                             --------------  --------------  ------------------ 
                              5,338,221,169   5,338,221,169       5,338,221,169 
                             ==============  ==============  ================== 
 
 Ordinary shares of 0.02p 
  each 
  As at 1 January               620,465,144     438,508,052         438,508,052 
 Issued during the period       224,678,549      18,795,236         181,957,092 
                             --------------  --------------  ------------------ 
 Outstanding as at 30 
  June                          845,143,693     457,303,288         620,465,144 
                             ==============  ==============  ================== 
 
 

The following Ordinary Shares of 0.02p were issued during the period:

   -       Issued 21 January 2021- 111,111,111 at 4.50p per share 
   -       Issued 2 February 2021 - 2,000,000 at 1.85p per share 
   -       Issued 2 February 2021 - 2,103,152 at 5.03p per share 
   -       Issued 4 March 2021 -5,000,000 at 1.85p per share 
   -       Issued 17 March 2021 -2,000,000 at 1.25p per share 
   -       Issued 19 April 2021 -98,214,286 at 5.60p per share 
   -       Issued 21 May 2021 -1,625,000 at 1.20p per share 
   -       Issued 21 June 2021 -2,208,333 at 1.20p per share 
   -       Issued 21 June 2021 -416,667 at 1.85 p per share 

The following share options were issued during the period:

   -       Issued 24 February 2021- 24,800,000 exercisable at 10.00p per share 

The following warrants were issued during the year:

   -       Issued 21 January 2021-5,555,555 exercisable at 4.50p per share 
   -       Issued 19 April 2021 -4,910,714 exercisable at 5.60p per share 
   -       Issued 19 April 2021 -49,107,142 exercisable at 8.50p per share 

The total share-based payment expense for the period, charged to the income statement amounted to GBP1,473K (2020-Nil).

   11.       Cash flows from operating activities 
 
 
 
                                                        Six month      Six month       Year ended 
                                                     period ended   period ended      31 December 
                                                     30 June 2021   30 June 2020             2020 
                                                          GBP'000        GBP'000          GBP'000 
 
Profit/(loss) for the period                              (2,205)          (187)          (807) 
 
Adjustments for: 
Continuing Operations 
Depreciation of property, plant                                                               - 
 and equipment                                                  -              - 
Amortisation of intangible assets                               -              -              - 
Finance costs                                                  72        90                 181 
Impairment of intangible assets                                 -              -              - 
 
Other (gains) /losses                                           -              -            164 
Share-based payments expense                                1,473              -            123 
                                                                                  ------------- 
 
           Operating cash flows before movements 
            in working capital                              (660)           (97)          (339) 
           Decrease/(Increase) in inventories                 (1)            129            109 
(Increase)/decrease in receivables                           (34)          (155)           (95) 
(Decrease)/increase in payables                             (602)             12            625 
                                                                                  ------------- 
 
Cash used in operations                                   (1,297)          (111)            300 
 
Net finance costs                                            (72)           (42)          (111) 
Tax (paid)                                                   (86)              -              - 
Foreign currency exchange differences                           -              -              - 
 
Net cash used in operating activities                     (1,455)          (153)          (189) 
                                                   --------------  -------------  ------------- 
 
 
   12.       Related party transactions 

There have been no changes to related party arrangements or transactions as reported in the 2020 Annual Report.

Transactions between Group companies, which are related parties, have been eliminated on consolidation and are therefore not disclosed. The only other transactions which fall to be treated as related party transactions are those relating to the remuneration of key management personnel, which are not disclosed in the Half Yearly Report, and which will be disclosed in the Group's next Annual Report.

ENDS

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September 30, 2021 09:49 ET (13:49 GMT)

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