TIDMAXM
RNS Number : 5474S
Alexander Mining PLC
25 September 2014
25 September 2014
ALEXANDER MINING PLC
INTERIM REPORT FOR SIX MONTHS ENDED 30 JUNE 2014
Alexander Mining plc ("Alexander", the "Company"), the AIM
quoted mining and mineral processing technologies company,
announces its results for the six months ended 30 June 2014.
The Company's objective is to become a low cost, highly
profitable and diversified mining technology company. This will be
achieved by the commercialisation of its proprietary mineral
processing technologies, partnerships in producing mines and the
acquisition of equity positions in advanced projects.
Highlights (post period end)
-- Option agreement signed with mid-tier mining company towards
the development of the AmmLeach(R) technology for zinc production
in a jurisdiction to be agreed.
-- Continuing mining industry interest in using AmmLeach(R) for
base metals' recovery from amenable deposits.
--
Chairman's Review
I am pleased to report on the Company's results for the six
months ended 30 June 2014.
During the period, the Company explored a potential partnership
with the commodity hedge fund Ebullio Group ("Ebullio"), which
resulted in the signing of a commercial licence, financing and
consultancy agreement ("Licence Agreement") in February 2014. The
Agreement was established in conjunction with discussions for
Ebullio's proposed acquisition of the assets of Red Crescent
Resources Limited ("RCR"), a mining group with base metals assets
in Turkey. It was envisaged that these Turkish assets would see the
first commercial adoption of Alexander's leaching technology.
Although discussions between Ebullio and the Company progressed
positively, unfortunately due to unforeseen circumstances beyond
its control, in April 2014 Ebullio terminated its agreement to
acquire the assets of RCR. This termination also brought
discussions regarding the Licence Agreement between Ebullio and
Alexander to a close. Alexander retained the non-refundable cash
payments totaling GBP400,000. Both parties continue to explore
possible opportunities to work together in the future.
Despite a disappointing outcome to discussions with Ebullio,
whilst in preparation for the proposed full scale pilot plant
testing of zinc oxides from the Turkish assets, breakthrough
testwork was conducted on samples at the commercial facilities of
Simulus Laboratories in Perth, Western Australia, under the
supervision of Alexander and Simulus personnel. The production of
high grade zinc cathode represented the first successful
demonstration of the Company's AmmLeach(R) technology for zinc and
the first solvent extraction of zinc from primary oxide ores; which
have hitherto been considered largely untreatable.
Finally, during the period the Company continued to add granted
patents to its portfolio of intellectual property, including a
method for extracting zinc from aqueous ammoniacal solutions in
Canada in March 2014.
Separately, we are actively pursuing the use of our leaching
technology for zinc and other metals in those countries of
potential application. This includes working with Phoenix Global
Mining, which in July 2014 confirmed its interest in investigating
the use of Alexander's technology for zinc oxide properties in
Turkey.
The most important recent news was the announcement in
mid-September, post period end, of a major development towards the
establishment of an AmmLeach(R) zinc oxide processing plant with
the signing of an option agreement ("Agreement") with a mid-tier
mining company (the "Entity"). The Agreement is with a highly
regarded mid-tier multi-commodity mining group with exploration,
development and operational experience and is a significant step
towards the commercial use of AmmLeach(R) technology.
Under the Agreement, the Entity has been granted an exclusive
three months' option period to complete due diligence on the
AmmLeach(R) zinc processing technology. The Entity has paid
Alexander a non-refundable option cash payment of US$360,000 and
the exclusivity period may be extended for up to three further
months by further non-refundable payments to Alexander of
US$120,000 per month.
If, upon successful completion of due diligence, the Entity
chooses to exercise the option, it will subscribe for 60,000,000
new ordinary shares in Alexander at a price of 3.00 pence per
share, providing the Company with GBP1,800,000 in cash (the "Option
Payment"). Of the Option Payment, half would be applied to a work
programme, including pilot plant testwork, for the AmmLeach(R)
technology, to be agreed between Alexander and the Entity. The
remainder of the funding would be used by Alexander for working
capital purposes.
The Entity would be granted an effectively exclusive licence for
the use of AmmLeach(R) technology for zinc production in a
jurisdiction to be agreed by the parties. The licence terms would
comprise the payment to Alexander of a 2.0% gross sales revenue
royalty on all metal production by the Entity using the AmmLeach(R)
technology.
Financial
The Company has been strict in keeping its overheads under tight
control, while maintaining required expenditures on research and
development and intellectual property protection. Despite being
terminated, the discussions with Ebullio provided Alexander with
additional capital early in the period. As described above, the
funds already received under the Agreement with the Entity,
together with those to potentially be received, are an important
source of working capital for the Company.
Outlook
The global economy has been buffeted by numerous geopolitical
headwinds and the outlook is certainly not settled. However, base
metals' prices have been mixed, with some showing recent price
strength. Pleasingly, the price of zinc, one of our key metals of
interest, has been strong, indeed hitting recent three year highs.
We are encouraged that forecasters' consensus in the next couple of
years is for a strengthening in the price as supply/demand
fundamentals come into play. In such a scenario, the advancement
into commercial use of our technology would be most fortuitous.
Finally, I would like to thank the Company's valued shareholders
for their continuing support and our employees, directors,
consultants and advisers for their commitment.
Matt Sutcliffe
Executive Chairman
25 September 2014
For further information please contact:
Martin Rosser Matt Sutcliffe
Chief Executive Officer Executive Chairman
Mobile: + 44 (0) 7770 Mobile: +44 (0) 7887 930
865 341 758
Alexander Mining plc
1st Floor
35 Piccadilly
London
W1J 0DW
Tel: +44 (0) 20 7292 1300
Fax: +44 (0) 20 7292 1313
Email: mail@alexandermining.com
Website: www.alexandermining.com
Nominated Adviser and Broker
Northland Capital Partners Limited
Matthew Johnson / Lauren Kettle
+44 (0)20 7382 1100
Public/Media Relations
Britton Financial PR
Tim Blackstone
+44 (0) 20 7242 9786
Consolidated income statement
Six months Six months Year ended
ended ended 31 December
30 June 30 June 2013
2014 2013
GBP'000 GBP'000 GBP'000
--------------------------------- ----------- ----------- -------------
Continuing operations
Revenue 320 6 26
Cost of sales - - -
--------------------------------- ----------- ----------- -------------
Gross profit 320 6 26
Administrative expenses (526) (542) (1,010)
Research and development
expenses (220) (208) (390)
Profit on disposal of property,
plant and equipment - - 4
--------------------------------- ----------- ----------- -------------
Operating loss (426) (744) (1,370)
Finance income 1 16 5
Finance cost (14) - -
--------------------------------- ----------- ----------- -------------
Loss before taxation (439) (728) (1,365)
Income tax expense - - -
--------------------------------- ----------- ----------- -------------
Loss for the period (439) (728) (1,365)
Basic and diluted (loss)
per share (pence)
from continuing operations: (0.25)p (0.47)p (0.84)p
--------------------------------- ----------- ----------- -------------
All components of profit or loss are attributable
to equity holders of the parent.
Consolidated statement of comprehensive income
Six months Six months Year ended
ended ended 31 December
30 June 30 June 2013
2014 2013
GBP'000 GBP'000
--------------------------------- ----------- ----------- -------------
Loss for the period (439) (728) (1,365)
Other comprehensive income:
Items that will or may
be reclassified to profit
or loss:
Exchange differences on
translating foreign operations - - (1)
Total comprehensive loss
for the period attributable
to equity holders of the
parent (439) (728) (1,366)
--------------------------------- ----------- ----------- -------------
Consolidated balance sheet
As at As at As at
30 June 30 June 31 December
2014 2013 2013
GBP'000 GBP'000 GBP'000
------------------------------ --------- --------- -------------
Assets
Property, plant & equipment - 10 -
Total non-current assets - 10 -
------------------------------ --------- --------- -------------
Trade and other receivables 86 82 60
Cash and cash equivalents 285 956 398
------------------------------ --------- --------- -------------
Total current assets 371 1,038 458
------------------------------ --------- --------- -------------
Total assets 371 1,048 458
------------------------------ --------- --------- -------------
Equity attributable to
owners of the parent
Issued share capital 13,638 13,632 13,633
Share premium 13,267 12,980 13,020
Translation reserve (61) (60) (61)
Accumulated losses (26,788) (25,796) (26,423)
------------------------------ --------- --------- -------------
Total equity 56 756 169
------------------------------ --------- --------- -------------
Liabilities
Total current liabilities
Trade and other payables 315 292 289
Total liabilities 315 292 289
------------------------------ --------- --------- -------------
Total equity and liabilities 371 1,048 458
------------------------------ --------- --------- -------------
Consolidated statement of cash flows
Six months Six months Year ended
ended ended 31 December
30 June 30 June 2013
2014 2013
GBP'000 GBP'000 GBP'000
---------------------------------- ----------- ----------- -------------
Cash flows from operating
activities
Operating loss - continuing
operations (426) (744) (1,370)
Depreciation and amortisation
charge - 6 8
(Increase) / decrease in
trade and other receivables (26) (14) 7
Increase / (Decrease) in
trade and other payables 21 98 95
Expenses settled through
issue of equity 25 28 69
Share option charge 12 11 21
Net cash outflow from operating
activities (394) (615) (1,174)
---------------------------------- ----------- ----------- -------------
Cash flows from investing
activities
Interest received 1 - 1
Proceeds from sale of subsidiary - 101 101
Proceeds from sale of property,
plant and equipment - - 12
Net cash inflow from investing
activities 1 101 114
---------------------------------- ----------- ----------- -------------
Cash flows from financing
activities
Proceeds from the issue
of share capital 232 935 935
Lapsed share issue 100 - -
Costs of lapsed share issue (38) - -
---------------------------------- ----------- ----------- -------------
Net cash inflow from financing
activities 294 935 935
---------------------------------- ----------- ----------- -------------
Net increase / (decrease)
in cash and cash equivalents (99) 421 (125)
Cash and cash equivalents
at beginning of period 398 519 519
Exchange differences (14) 16 4
---------------------------------- ----------- ----------- -------------
Cash and cash equivalents
at end of period 285 956 398
---------------------------------- ----------- ----------- -------------
Consolidated statement of changes in equity
Share Share Shares Translation Accumulated Total
capital premium to be reserve losses equity
issued
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January
2013 13,606 12,043 - (60) (25,079) 510
---------------------- --------- --------- -------- ------------ ------------ --------
Accumulated
loss for period - - - - (728) (728)
Total comprehensive
loss for the
period attributable
to equity
holders of
the parent - - - - (728) (728)
---------------------- --------- --------- -------- ------------ ------------ --------
Share option
costs - - - - 11 11
Shares issued 26 937 - - - 963
---------------------- --------- --------- -------- ------------ ------------ --------
At 30 June
2013 13,632 12,980 - (60) (25,796) 756
---------------------- --------- --------- -------- ------------ ------------ --------
Accumulated
loss for period - - - - (637) (637)
Translation
difference - - - (1) - (1)
---------------------- --------- --------- -------- ------------ ------------ --------
Total comprehensive
loss for the
period attributable
to equity
holders of
the parent - - - - (637) (637)
---------------------- --------- --------- -------- ------------ ------------ --------
Share option
costs - - - - 10 10
Shares issued 1 40 - - - 41
At 31 December
2013 13,633 13,020 - (61) (26,423) 169
---------------------- --------- --------- -------- ------------ ------------ --------
Accumulated
loss for period - - - - (439) (439)
Total comprehensive
loss for the
period attributable
to equity
holders of
the parent - - - - (439) (439)
---------------------- --------- --------- -------- ------------ ------------ --------
Share option
costs - - - - 12 12
Shares issued 5 247 - - - 252
Subscription - - 100 - - -
for shares
to be issued
Share issue - - (38) - - -
costs
Transfer to
accumulated
losses upon
lapse of share
issue - - (62) - 62 62
At 30 June
2014 13,638 13,267 - (61) (26,788) 56
---------------------- --------- --------- -------- ------------ ------------ --------
Notes to the interim financial information
1. Basis of preparation
The financial statements have been prepared in accordance with
International Financial Reporting Standards ("IFRSs") in force at
the reporting date and their interpretations issued by the
International Accounting Standards Board ("IASB") as adopted for
use within the European Union. The accounting policies, methods of
computation and presentation used in the preparation of the interim
financial information are the same as those used in the Group's
audited financial statements for the year ended 31 December
2013.
The financial information in this statement does not constitute
full statutory accounts within the meaning of Section 434 of the
Companies Act 2006. The financial information for the six months
ended 30 June 2014 and 30 June 2013 is unaudited. The comparative
information for the year ended 31 December 2013 was derived from
the Group's audited financial statements for that period as filed
with the Registrar of Companies. It does not constitute the
financial statements for that period. Those accounts received an
unqualified audit report.
2. Loss per share
The calculation of loss per share is based on the weighted
average number of shares in issue in the six months to 30 June 2014
of 174,182,339 (six months to 30 June 2013: 154,088,825 and year to
31 December 2013: 162,053,428) and computed on the respective loss
figures as follows:
6 months 6 Months Full year
2014 2013 2013
GBP'000 Per GBP'000 Per GBP'000 Per
share share share
(Loss) - continuing
operations (439) (0.25)p (728) (0.47)p (1,365) (0.84)p
There is no difference between the diluted loss per share and
the basic loss per share presented. Share options granted to
employees could potentially dilute basic earnings per share in the
future, but were not included in the calculation of diluted
earnings per share as they were anti-dilutive for the period
presented.
At 30 June 2014 there were 12,900,000 (at 30 June 2013:
12,900,000; at 31 December 2013: 12,900,000) share options in issue
that could have a potentially dilutive effect on the basic earnings
per share in the future.
3. Note to the Consolidated Income Statement
Revenue for the six months ended 30 June 2014 included an amount
of GBP300,000 in respect of a non-refundable inducement fee
received for the signing of a share subscription and associated
royalty agreement for the use of the Group's AmmLeach technology.
The agreement, with Ebullio Commodities Limited, subsequently
lapsed.
4. Subscription for shares to be issued
During the six months ended 30 June 2014, a non-refundable down
payment of GBP100,000 was received from Ebullio Commodities Limited
in respect of shares to be issued under a share subscription
agreement. Upon lapse of the agreement, after recognition in
administrative expenses of GBP38,000 legal and accounting costs
associated therewith, the balance of GBP62,000 was transferred to
accumulated losses.
5. Share Capital
Changes in issued share capital and share premium during the
reporting period occurred as follows:
Ordinary shares Number of shares Share Share
capital premium
GBP GBP
Balance at 1 January 2014 170,496,861 170,497 13,019,860
19 February - shares issued for cash
at 5.25p each 4,604,762 4,605 237,145
19 February - share issue costs charged
to share premium - - (14,355)
19 February - shares issued at an average
of 5.16p each, in settlement of expenses 487,387 487 24,662
Balance at 30 June 2014 175,589,010 175,589 13,267,312
========================================== ================ ========== ==========
Deferred shares Deferred
share
Number of shares capital
GBP
Balance at 1 January 2014 135,986,542 13,462,667
------------------------------------------ ---------------- ----------
Balance at 30 June 2014 135,986,542 13,462,667
========================================== ================ ==========
6. Share options
All Share Option costs incurred are allocated directly to
Accumulated Losses.
On 12 May 2014, following approval from the employee share
option holder, the Board cancelled a total of 500,000 existing
share options with an average exercise price of 11p per share and
approved the issue of new replacement share options, on a
one-for-one basis, with an exercise price of 4.92p per share (the
"New Exercise Price).
The New Exercise Price represents a 27 per cent premium to the
closing mid-market share price on 12 May 2014. The New Share
Options will vest in three equal tranches on 1 June 2014, 1 June
2015 and 1 June 2016 and will expire on 22 December 2020.
Following the above changes, the Company has a total of
12,900,000 Share Options in issue (all with exercise prices of
4.92p per share), representing 7.35 per cent of the issued share
capital of the Company on a fully diluted basis. Share option
charges for the six months to 30 June 2014 amounted to GBP11,079
(2013: GBP10,651).
7. Post balance sheet event:
On 11 September 2014 the Company entered into an exclusivity
agreement whereby, in return for an immediate payment of
US$360,000, it granted a three months option (extendable for a
further three months for US$120,000 per month) for subscription to
60,000,000 ordinary shares in the Company at GBP0.03 per share.
During the option period, the option holder will conduct due
diligence investigations which, if successful, will lead to
entering a Strategic Alliance with the Company and exercising of
the share option upon payment of GBP1,800,000. The alliance will
provide for the processing of zinc, utilising the Company's
AmmLeach technology.
Copies of this announcement are available to view on the
Company's website at www.alexandermining.com.
Disclaimers
Neither the contents of the Company's website nor the contents
of any website accessible from hyperlinks on the Company's website
(or any other website) is incorporated into, or forms part of, this
announcement.
This news release contains forward looking or future-oriented
financial information, being information which is not historical
fact, including, without limitation, statements regarding potential
results of metallurgical testwork, anticipated applications for the
Company's intellectual property and discussions of future plans and
objectives. Although the Company believes that the expectations
reflected by such information are reasonable, these statements are
based on assumptions and factors concerning future events that may
prove to be inaccurate. Such statements are necessarily based upon
a number of estimates and assumptions based on information
available to the Company about itself and the business in which it
operates. Information used in developing forward-looking
information has been acquired from various sources including third
party consultants, suppliers, regulators and other sources and is
subject to numerous risks and uncertainties that could cause actual
results and future events to differ materially from those
anticipated or projected. Important factors that could cause actual
results to differ materially from the Company's expectations are
the continuing availability of capital resources to fund the
commercialisation of Alexander's technologies; continued positive
results from trials and applications of Alexander's AmmLeach(R) and
HyperLeach(R) technologies and other factors as disclosed in
Company documents filed from time to time. Management uses
forward-looking statements because it believes they provide useful
information to the shareholders with respect to proposed
transactions involving Alexander, and cautions readers that the
information may not be appropriate for other purposes and should
not be read as guarantees of future performance or results. The
Company disclaims any intention or obligation to revise or update
such statements unless required by law.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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