TIDMARK
RNS Number : 9532D
Arkle Resources PLC
27 June 2023
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR.
27 June 2023
Arkle Resources PLC
("Arkle", the "Group" or the "Company")
Final Results for the Year Ended 31 December 2022
Arkle Resources PLC (LON: ARK), the Irish gold and zinc
exploration and development company, is pleased to announce its
audited results for the year ending 31 December 2022.
Chairman's Statement
Despite the market for junior exploration companies being
friendless Arkle had a good exploration year. We discovered lithium
bearing rocks on our Wicklow / Wexford ground and drilling by our
partners, Group Eleven, on our Stonepark zinc licences identified a
significant geological fault, while we expanded our overseas search
for new projects in Battery Metals and Platinum Group Metals (PGMs)
with the grant of three small licences in Zimbabwe.
During the period we raised GBP200,000 mainly from directors and
associates. In recent months the Arkle share price has been
volatile mainly due to one investor who purchased over 25 million
shares equal to 6.8% of the issued equity only to sell off the
block in large chunks a short time later.
Zinc
The main focus in the period under review was the Stonepark zinc
project where seven holes were drilled. The drilling discovered a
major fault zone in the south of the block of six licences and
identified a significant and extensive zinc target.
Ireland is highly prospective for zinc. Over the past 60 years a
number of world class large zinc mines have been brought into
production and it is believed that more deposits remain to be
discovered.
In the Stonepark area of Limerick, Arkle is in a joint venture
with Group Eleven Resources Corp., a listed Canadian junior, where
Arkle owns 23.44% and Group Eleven, 76.56%. Earlier drilling
discovered an inferred resource of 5.1 million tons at a combined
11.3% zinc / lead. Though zinc / lead metal prices have come back
from highs of over $4,000 a tonne to the current $2,000 plus, the
value the ground is over $200 per ton of ore.
The licence block contains six licences covering 184sq km. In
2022 seven holes were drilled, including four early stage
exploration holes which identified new mineralised trends. Three
additional holes were targeted on previously identified areas,
Carrickittle West, Carrickittle North and Stonepark West. A new
major fault structure was identified at Carrickittle West. This is
now a high priority zinc target at depth. Arkle has indicated to
Group Eleven that it will contribute its share to the drilling on
this block.
Stonepark remains a central asset in the Arkle portfolio. It
lies adjacent to the massive Pallas Green zinc discovery estimated
to contain over 40 million tons and also adjacent to the ongoing
discoveries at Carrickittle made by our partner Group Eleven. Zinc
is a critical metal in economic development. We believe the
deposits in Limerick will be developed in the future.
Gold
Turning to our five licences at Wexford / Wicklow, covering
2,135 km, where we have been exploring the ground looking for
commercial grades and quantities of gold. Significant sampling,
trenching and drilling have repeatedly identified high grade veins.
Getting continuity is the issue. The principal gold target is the
Tombreen area now outlined as 1.5km long and 750 metres wide.
Grades in this area have been up to 50 g/t.
Drilling in Wicklow is complicated. The gold is contained in
veins and is "nuggety". Drilling can miss the veins and / or hit
the veins and miss the nuggets. The answer is more drilling.
Ideally Arkle would find a partner to take detailed exploration to
the next level.
In 2016 Arkle discovered gold on a block of licences in Donegal.
The block was licenced because the geology was similar to that of
the large Dalradian gold deposit in adjacent Tyrone and it was
believed, later confirmed, that there is a gold bearing trend from
Northwest Ireland, through Ulster into Scotland. Drilling found
exciting results. Some high grades but the gold is nuggety making
analysis difficult.
The focus is on the Meenaragh prospect where drill ready targets
have been identified in good grade gold bearing veins. Delays in
renewing our licence application, meant the loss of two drilling
seasons.
Lithium
Though our focus has been on zinc and gold, we are alive to
other opportunities on our licence holdings. The rapid growth in
the demand for batteries containing lithium has stretched the
supply. Rising prices mean that previously uneconomic hard rock
deposits of lithium containing rocks become commercial. It had long
been known that the ground in Wexford / Wicklow area contained
pegmatites which can contain lithium.
Companies immediately to the west of our ground have been
actively searching for lithium for some time including Ganfeng, the
world's leader in lithium. Arkle undertook a Proof of Concept
sampling programme in the Southwest of our licence block. We were
very pleased to discover pegmatites in a number of locations.
Lithium was present though grades were not high.
A short follow up programme on a different part of the block
found indicator minerals but no lithium. The data is being reviewed
to decide on the next steps while we have applied for additional
ground. The programme is at an early stage.
Overseas Interests
The lack of investor interest in Irish exploration led the board
to look at overseas projects particularly in Battery Metals and
PGMs and initially in sub-Saharan Africa where your directors have
experience. We obtained ground in Zimbabwe, a major lithium
producer but have faced delays in expanding the holding.
We reviewed a number of investment opportunities in the past
year and in particular we are pursuing grassroot opportunities in
lithium.
John Teeling
Chairman
26 June 2023
Enquiries:
Arkle Resources PLC
John Teeling, Chairman +353 (0) 1 833 2833
Jim Finn, Finance Director +353 (0) 1 833 2833
SP Angel Corporate Finance LLP
Nominated Adviser & Joint Broker
Matthew Johnson/Adam Cowl +44 (0) 203 470 0470
First Equity Limited
Joint Broker
Jason Robertson +44 (0) 207 374 2212
BlytheRay
Megan Ray +44 (0) 207 138 3204
Teneo
Luke Hogg
ARKLE RESOURCES PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE FINANCIAL YEARED 31 DECEMBER 2022
2022 2021
EUR EUR
Administrative expenses (303,195) (320,266)
- -
---------- ----------
Loss from operations (303,195) (320,266)
Profit/(loss) due to fair value volatility of warrants 3,981 746,526
---------- ----------
Profit/(loss) before tax (299,214) 426,260
Tax expense - -
---------- ----------
Profit/(loss) for the year (299,214) 426,260
Total comprehensive income (299,214) 426,260
========== ==========
Earnings per share attributable to the ordinary equity holders of the parent
cents cents
Profit/(Loss) per share - Basic & Diluted (0.09) 0.14
========== ==========
ARKLE RESOURCES PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER
2022
2022 2021
EUR EUR
Assets
Non-current assets
Intangible assets 3,991,023 3,831,080
------------ ------------
Current assets
Other receivables 6,928 32,635
Cash and cash equivalents 199,990 79,678
------------ ------------
206,918 112,313
------------ ------------
Total assets 4,197,941 3,943,393
------------ ------------
Liabilities
Current liabilities
Trade and other liabilities (325,799) (233,872)
Warrants (155,690) (159,672)
------------ ------------
Total liabilities (481,489) (393,544)
------------ ------------
Net assets 3,716,452 3,549,849
============ ============
Equity
Called-up Share capital - Deferred 992,337 992,337
Called-up Share capital - Ordinary 988,456 764,956
Share premium reserve 6,922,562 6,680,245
Share based payments reserve 156,494 156,494
Retained deficit (5,343,397) (5,044,183)
------------ ------------
Total Equity 3,716,452 3,549,849
============ ============
ARKLE RESOURCES PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL
YEARED 31 DECEMBER 2022
Called up Share
Capital Called up Share Share Share Based Payment Retained
Deferred Capital Ordinary Premium Reserve Deficit Total
EUR EUR EUR EUR EUR EUR
At 1 January 2021 992,337 742,612 6,605,681 127,199 (5470,443) 2,997,386
Shares issued - 22,344 74,564 - - 96,908
Share-based payment - - - 29,295 - 29,295
Profit for the year - - - - 426,260 426,260
---------------- ------------------ ---------- -------------------- ------------ ----------
At 31 December 2021 992,337 764,956 6,680,245 156,494 (5,044,183) 3,549,849
---------------- ------------------ ---------- -------------------- ------------ ----------
Shares issued - 223,500 242,317 465,817
Share-based payment - - - - - -
Loss for the year (299,214) (299,214)
---------------- ------------------ ---------- -------------------- ------------ ----------
At 31 December 2022 992,337 988,456 6,922,562 156,494 (5,343,397) 3,716,452
================ ================== ========== ==================== ============ ==========
ARKLE RESOURCES PLC
CONSOLIDATED CASH FLOW STATEMENT
FOR THE FINANCIAL YEARED 31 DECEMBER 2022
2022 2021
EUR EUR
Cash flows from operating activities
Profit / (loss) for the year (299,214) 426,260
Adjustments for
Share based payments charge - 29,295
Fair Value movement of warrants (3,981) (746,526)
Foreign exchange 12,250 (25,527)
---------- ----------
(290,945) (316,498)
Movements in working capital:
Decrease/(Increase) in trade and other receivables 25,707 (10,712)
Increase in trade and other payables 91,926 57,208
---------- ----------
Net cash used in operating activities (173,312) (270,002)
---------- ----------
Cash flows from investing activities
Payments for exploration and evaluation (159,943) (457,592)
---------- ----------
Net cash used in investing activities (159,943) (457,592)
---------- ----------
Cash flows from financing activities
Proceeds from issue of equity shares 465,817 96,908
Share issue expenses - -
---------- ----------
Net cash generated from financing activities 465,817 96,908
---------- ----------
Net cash increase/(decrease) in cash and cash equivalents 132,562 (630,686)
Cash and cash equivalents at the beginning of year 79,678 684,837
Exchange gains on cash and cash equivalents (12,250) 25,527
---------- ----------
Cash and cash equivalents at the end of the year 199,990 79,678
========== ==========
Notes:
1. Accounting Policies
There were no changes in accounting policies from those used to
prepare the Group's Annual Report for financial year ended 31
December 2021. The financial statements have been prepared in
accordance with International Financial Reporting Standards (IFRSs)
as adopted by the European Union and in accordance with the
Companies Act 2014.
2. Earnings per Share
Basic earnings per share is computed by dividing the loss after
taxation for the year attributable to ordinary shareholders by the
weighted average number of ordinary shares in issue and ranking for
dividend during the year. Diluted earnings per share is computed by
dividing the profit or loss after taxation for the year by the
weighted average number of ordinary shares in issue, adjusted for
the effect of all dilutive potential ordinary shares that were
outstanding during the year.
The following table sets forth the computation for basic and
diluted earnings per share (EPS):
2022 2021
EUR EUR
Numerator
For basic and diluted EPS Loss after taxation (299,214) 426,260
================ ===============
Denominator No. No.
For basic and diluted EPS 343,481,056 305,517,186
================ ===============
Basic EPS (0.09c) 0.14c
Diluted EPS (0.09c) 0.14c
================ ===============
Basic and diluted loss per share are the same as the effect of the outstanding share options
and warrants is anti-dilutive.
3. Going Concern
The Group incurred a loss for the financial year of EUR299,214
(2021: profit EUR426,260) and had net current liabilities of
EUR274,571 (2021: net current liabilities EUR281,231) at the
statement of financial position date leading to concern about the
Company and Group's ability to continue as a going concern.
The Group had a cash balance of EUR199,990 (2021: EUR79,678) at
the statement of financial position date.
Included in current liabilities is an amount of EUR217,500
(2021: EUR172,500) owed to key management personnel in respect of
remuneration due at the balance sheet date. Key management have
confirmed that they will not seek settlement of these amounts in
cash for a period of at least one year after the date of approval
of the financial statements or until the Group has generated
sufficient funds from its operations after paying its third-party
creditors.
The directors have prepared cashflow projections for a period of
at least twelve months from the date of approval of these financial
statements. As the Group and the Company are not revenue or cash
generating they rely on raising capital from the public market. The
cash flow projections prepared by the Group and Company indicate
that additional finances will be required to meet the obligations
of the Group and Company for a period of at least twelve months
from the date of approval of these financial statements. The
directors are confident that additional capital can be raised as
required. The Group raised GBP397,000 during the year from warrant
exercises and a placing.
As in previous years the Directors have given careful
consideration to the appropriateness of the going concern basis in
the preparation of the financial statements and believe the going
concern basis is appropriate for these financial statements. The
financial statements do not include any adjustment to the carrying
amount, or classification of assets and liabilities, if the Company
or Group was unable to continue as a going concern.
4. Intangible Assets
2022 2021
EUR EUR
Exploration and evaluation assets:
Cost:
At 1 January 3,831,080 3,373,488
Additions 159,943 457,592
Impairment - -
------------ ----------
At 31 December 3,991,023 3,831,080
------------ ----------
Carrying amount:
At 31 December 3,991,023 3,831,080
============ ==========
In 2007 the Group entered into an agreement with Teck Cominco
which gave Teck Cominco the option to earn a 75% interest in a
number of other licences held by the Group. Teck Cominco had to
spend CAD$3m to earn the interest. During 2012 the relevant
licences were transferred to a new company, TILZ Minerals Limited,
which at 31 December 2022 was owned 23.44% (2021: 23.44%) by
Limerick Zinc Limited (subsidiary of Arkle Resources plc) and
76.56% (2021: 76.56%) by Group Eleven Resources Corp (third
party).
On 13 September 2017 the board of Arkle Resources plc were
informed that Group Eleven Resources Corp. a private company, has
acquired the 76.56% interest held by Teck Ireland in TILZ Minerals.
Arkle Resources plc owns the remaining 23.44%.
The Group's share of expenditure on the licences continues to be
capitalised as an exploration and evaluation asset. The Group is
subject to cash calls from Group Eleven Resources Corp. in respect
of the financing of the ongoing exploration and evaluation of these
licences. In the event that the Group decides not to meet these
cash calls its interest in TILZ Minerals Limited may be diluted
accordingly.
On 23 June 2022 the Company announced it had been granted three
licences covering 163 hectres to prospect for Lithium in the Insiza
District of the Matabeleland South Province of Zimbabwe. The
Directors believe that these licences, which cover a small area,
represent a low-cost entry into one of the largest lithium
producing countries in the world.
The realisation of the intangible assets is dependent on the
discovery and successful development of economic reserves which is
subject to a number of risks as outlined below:
- uncertainties over development and operational risks;
- compliance with licence obligations;
-ability to raise finance to develop assets;
- liquidity risks; and
- going concern risks.
Should this prove unsuccessful the carrying value included in
the statement of financial position would be written off to the
statement of comprehensive income.
The directors are aware that by its nature there is an inherent
uncertainty in such exploration and evaluation expenditure as to
the value of the asset. Having reviewed the carrying value of
exploration and evaluation of assets at 31 December 2022 the
directors are satisfied that the value of the intangible asset is
not less than carrying value.
Segmental Analysis
2022 2021
EUR EUR
Limerick 1,705,480 1,600,424
Rest of Ireland 2,273,502 2,230,656
Zimbabwe 12,041 -
---------- ----------
3,991,023 3,831,080
========== ==========
5. Trade payables
2022 2021
EUR EUR
Current assets:
Trade and other payables 96,299 42,872
Accruals 229,500 191,000
-------- --------
325,799 233,872
======== ========
It is the Group's normal practice to agree terms of
transactions, including payment terms, with suppliers and provided
suppliers perform in accordance with the agreed terms, it is the
Group's policy that payment is made between 30 - 45 days.
Included in accruals are amounts due for directors' remuneration
of EUR217,500 (2021: EUR172,500) accrued but not paid at year
end.
The carrying value of trade and other payables approximates to
their fair value.
6. Share Capital and Share Premium
2022 2021
Authorised EUR EUR
1,000,000,000 Ordinary shares of EUR0.0025 each 2,500,000 2,500,000
500,000,000 Deferred shares of EUR0.0075 each 3,750,000 3,750,000
---------- ----------
6,250,000 6,250,000
========== ==========
Deferred Shares - nominal value of EUR0.0075
Number Share Share Premium
Capital EUR
EUR
At 1 January 2021 and 2022 132,311,591 992,337 -
------------- -------------- --------------
At 31 December 2021 and 2022 132,311,591 992,337 -
============= ============== ==============
Ordinary Shares - nominal value of EUR0.0025
Allotted, called-up and fully paid:
Number Share Capital Share Premium
EUR EUR
At 1 January 2021 297,044,926 742,612 6,605,681
Issued during the year 8,937,500 22,344 74,564
------------- -------------- --------------
At 31 December 2021 305,982,426 764,956 6,680,245
Issued during the year 89,400,000 223,500 242,317
------------- -------------- --------------
At 31 December 2022 395,382,426 988,456 6,922,562
============= ============== ==============
Deferred share capital
The deferred share reserve comprises of the value of the
deferred shares that arose when the company divided the ordinary
shares via special resolution on 22 April 2020 the shares into
500,000,000 deferred shares of 0.75 cent each and 500,000,000
ordinary shares of 0.25 cent each.
Called up ordinary share capital
The called up ordinary share capital reserve comprises of the
nominal value of the issued share capital of the company.
Share premium
The share premium reserve comprises of a premium arising on the
issue of shares. Share issue expenses are deducted against the
share premium reserve when incurred.
Movement in shares
On 22 February 2022, a total of 30,080,000 shares were issued on
the exercise of 30,080,000 warrants at a price of 0.5p per share to
provide additional working capital and future development
costs.
On 28 April 2022, a total of 9,320,000 shares were issued on the
exercise of 9,320,000 warrants at a price of 0.5p per share to
provide additional working capital and future development
costs.
On 21 November 2022, a total of 50,000,000 shares were issued at
a price of 0.4p per share to provide additional working capital and
fund development costs. For each share subscribed for, the
investors also received one warrant to subscribe for an additional
ordinary share at a price of 0.5p per share until 24 November
2024.
7. Share Based Payments
Equity-settled share-based payments are measured at fair value
at the date of grant.
The Group plan provides for a grant price equal to the average
quoted market price of the ordinary shares on the date of
grant.
Share Options
31 December 2022 31 December 2021
Options Weighted average exercise Options Weighted average exercise
price in pence price in pence
Outstanding at beginning of
year 16,100,000 1.32 13,100,000 1.22
Granted during the year - - 3,000,000 1.80
Expired during the year - - - -
----------- ----------------------------- ----------- -----------------------------
Outstanding at end of year 16,100,000 1.32 16,100,000 1.32
=========== ============================= =========== =============================
Exercisable at end of year 16,100,000 1.32 16,100,000 1.32
=========== ============================= =========== =============================
On 9 March 2021 a total of 3,000,000 options with an exercise
price of 1.8p per option were granted to the directors with a fair
value of EUR29,295. The fair value was calculated using the
Black-Scholes valuation model.
Expected volatility was determined by management based on their
cumulative experience of the movement in share prices.
The terms of the options granted do not contain any market
conditions within the meaning of IFRS 2.
8. Warrants
2022 2021
EUR EUR
Fair Value
At 1 January 159,672 906,198
FV of warrants issued during the year at grant date 155,690 -
FV of warrants exercised during the year (72,192) (68,010)
Movement in fair value (87,480) (678,516)
--------- ----------
At 31 December 155,690 159,672
========= ==========
2022 2021
EUR EUR
Profit/(Loss) due to Fair Value Volatility of Warrants
Fair Value at 1 January 159,672 906,198
Less Fair Value at 31 December 155,690 159,672
Movement for the year 3,981 746,526
======== ========
31 December 2022 31 December 2021
Number of Warrants Weighted average Number of Warrants Weighted average
exercise price in pence exercise price in pence
Outstanding at
beginning of year 110,462,500 0.90 119,400,000 0.90
Granted during the year 50,000,000 0.50 - -
Expired during the year (71,062,500) 0.90 - -
Exercised during the
year (39,400,000) 0.50 (8,937,500) 0.50
------------------- ------------------------ ------------------- ------------------------
Outstanding and
exercisable at the end
of the year 50,000,000 0.50 110,462,500 0.90
=================== ======================== =================== ========================
On 22 February 2022 a total of 30,080,000 warrants and on 28
April 2022 a total of 9,320,000 warrants with an exercise price of
0.5p per warrant were exercised with a fair value of EUR72,192. The
movement in fair value of EUR72,192 was included to the
Consolidated Statement of Comprehensive Income.
The balance of 2,000,000 warrants expired on 22 April 2022. On 7
September 2022 a total of 69,062,500 warrants with an exercise
price of 1.2p per warrant expired. The movement in fair value of
EUR87,480 was included to the Consolidated Statement of
Comprehensive Income.
On 21 November, a total of 50,000,000 warrants with an exercise
price of 0.5p per warrant were granted as part of the placing. The
fair value was expensed to the Consolidated Statement of
Comprehensive Income. The fair value was calculated using the
Black-Scholes valuation model.
9. Other Reserves
Share Based Payment Reserve
EUR
Balance at 1 January 2021 127,199
Granted during the year 29,295
----------------------------
Balance at 31 December 2021 156,494
Granted during the year -
----------------------------
Balance at 31 December 2022 156,494
============================
Share Based Payment Reserve
The share based payment reserve arises on the grant of share
options under the share option plan. Share options expired are
reallocated from the share based payment reserve to retained
deficit at their grant date fair value .
10. Retained Deficit
2022 2021
GBP GBP
Opening Balance (5,044,183) (5,470,443)
Profit/(Loss) for the year (299,214) 426,260
------------ ------------
Closing Balance (5,343,397) (5,044,183)
============ ============
Retained Deficit
Retained deficit comprises of accumulated profits and losses
incurred in the current and prior years.
11. Post Balance Sheet Events
There were no material post balance sheet events affecting the
Group.
12. Annual General Meeting
The Company's Annual General Meeting will be held at held at the
Hotel Riu Plaza The Gresham, 23 O'Connell Street Upper, North City
Dublin, D01 C3W7, Ireland on 27 July 2023 at 10.00am.
General Information
The financial information set out above does not constitute the
Company's financial statements for the year ended 31 December 2022.
The financial information for 2021 is derived from the financial
statements for 2021 which have been delivered to the Companies
Registration Office. The auditors have reported on 2021 statements;
their report was unqualified. The financial statements for 2022
will be delivered to the Companies Registration Office.
A copy of the Company's Annual Report and Accounts for 2022 will
be mailed to all shareholders shortly and will also be available
for collection from the Company's registered office, 162 Clontarf
Road, Dublin 3, Ireland. The annual report will shortly be
available for viewing at Arkle's website at
www.arkleresources.com
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