TIDMAXM
RNS Number : 8604J
Alexander Mining PLC
10 April 2015
10 April 2015
Alexander Mining plc
Audited Results for the Year Ended 31 December 2014
Alexander Mining plc ("Alexander" or the "Company"), the
AIM-listed mining and mineral processing technologies company,
announces its audited results for the year ended 31 December
2014.
Highlights:
-- Further advancement of our proprietary leaching technologies
-- Continued interest from mining companies in leaching technologies
-- Continued success in registration of patents
Chairman's Statement
After an encouraging start, the Company's progress during 2014
was not as rapid as we envisaged. Although significant technical
achievements were made, our commercialisation efforts, due to third
party business circumstances and related decisions beyond our
control, were frustrated.
However, after an indifferent year, I am delighted with the
results of the management team's efforts late in the reporting year
which enabled the release of the most recent news announced in
February 2015 regarding the potentially transformative
commercialisation opportunity with Compass Resources Limited
('Compass'). Subject to the execution of a definitive agreement,
which is currently under negotiation, this will provide for the
granting of an AmmLeach(R) licence and certain technical and
management services for use at Compass' Browns Oxide copper-cobalt
mine. This agreement would bring significant revenue to Alexander
by way of upfront and ongoing services fees, plus a future
production royalty.
Technical work
There was notable research and technical development success,
which underwrites our commercialisation programme. This included
the major development announced in April 2014 of the breakthrough
testwork to produce the world's first zinc cathode using our
AmmLeach(R) technology. That work used conventional leaching,
solvent extraction and electro-winning equipment in the test
facility available for hire at Simulus Engineers ('Simulus'),
Perth, Western Australia. Importantly, supporting one of the most
attractive benefits of the AmmLeach(R) technology, i.e.
significantly lower capital and operating costs, and operating
conditions at ambient temperature and pressure. This represents the
first successful demonstration of AmmLeach(R) technology for zinc
at this scale and the first solvent extraction of zinc from primary
oxide ores using ammoniacal leaching.
We believe that this confirmed our AmmLeach(R) process as the
only economically viable method to unlock the value of hitherto
problematic zinc oxide deposits. The Company has built up an
extensive database of all of the world's major zinc oxide deposits
and has now conducted favourable AmmLeach(R) amenability testwork
on samples from a significant number. The Republic of Turkey is a
particular country of interest.
Zinc oxide deposits are highly attractive in terms of their
tendency to have high average zinc grades both absolutely and
relatively when compared with world averages for sulphide ores. In
addition, the fact that most of the known deposits are at or near
surface generally makes for easier mining. However, the inherent
processing challenges have meant that almost all remain unexploited
except those with grades high enough to justify direct shipment
(+20-25% zinc) to smelters. Those deposits found in the Tethyan
orogenic belt of Turkey are especially prospective.
Commercialisation activities
The results of our commercialisation efforts during the year
were disappointing. In particular, this was due to the unravelling
of the commercial licence, financing and consultancy agreement
('Agreement') announced in February with the Company's large
shareholder the Ebullio Group ('Ebullio'). This was not due to any
technology considerations but with Ebullio's commercial decision to
terminate its agreement to acquire all of the assets in Turkey of
Red Crescent Resources Limited. As this was a condition precedent
the Agreement was terminated. Nevertheless, we continue to have a
close relationship with Ebullio and to support its interest in
developing mining opportunities in Turkey.
In July, the Company announced that Phoenix Global Mining
('PGM') had confirmed its interest in investigating the use of
AmmLeach(R) for highly prospective zinc oxide properties in Turkey.
At that time PGM had an earn-in Agreement with a Turkish industrial
group, to develop their base metals exploration and mining
licences. PGM subsequently decided to drop this opportunity for
commercial reasons.
Alexander announced in September that it had signed an option
agreement ('Option Agreement') with a mid-tier mining company (the
'Entity'). The Entity was a highly regarded mid-tier,
multi-commodity mining company with exploration, development and
operational experience. Under the Option Agreement, the Entity had
been granted an exclusive three months' option period to complete
due diligence on the AmmLeach(R) zinc processing technology. This
was in exchange for the cash payment to Alexander of US$360,000.
(GBP217,000). Exercise of the option would have resulted in further
cash payments in exchange for Alexander equity, as well as a
licence with a gross sales revenue royalty on all metals production
by the Entity using the AmmLeach(R) technology.
Although a highly detailed and favourable technical due
diligence was conducted, unfortunately the Entity had a change in
its corporate plans due to a need to focus more on its domestic
growth strategy. Accordingly, in December the Entity informed the
Company that it would not exercise its option. It advised that its
due diligence on the use of the AmmLeach(R) process for zinc
production was favourable and it had formed the view that there is
value in the technology. It also said that it remained interested
in continuing to build its relationship with Alexander.
Intellectual property
The results of the programme, in conjunction with Wrays, the
Company's patent attorney, to protect our leaching technology
intellectual property ('IP'), measured by patents granted by method
and country have been excellent. This includes patents granted in
Mexico, Canada, Mongolia, Botswana, Mozambique, Namibia, Tanzania
and Zambia
Developments in 2015
In late February 2015, the Company was delighted to announce
that it had signed a non-binding Heads of Agreement ('HoA') with
Compass, a listed Australian public company (ASX:CMR), for
executing a definitive agreement ('Agreement') covering an
AmmLeach(R) licence and certain technical management services for
Compass in the Northern Territory, Australia. These arrangements
should significantly accelerate the first commercial adoption of
Alexander's proprietary AmmLeach(R) technology with particular
relevance to copper/cobalt resources.
We greatly look forward to working closely together with Compass
under this transformative agreement. Assuming the completion of a
positive AmmLeach(R) feasibility study and production go-ahead, the
mine would partner our AmmLeach(R) technology with existing high
quality mining assets.
The plan is to generate significant economic value from the
Browns Oxide mine and the first step is the completion of an
AmmLeach(R) feasibility study, with a pilot plant programme funded
by Compass. This pilot plant programme would be carried out at the
independent commercial facilities of Simulus, under the supervision
of Alexander's technical personnel. This would lead to the
completion of a feasibility study into commercial production and is
dependent upon statutory approval and obtaining all necessary
permits required to recommence production.
Compass is currently working to complete a financing facility
with sophisticated institutional investors as the first stage in a
proposed major refinancing and relisting of the company. The
proceeds of their financing will be used for various purposes,
including payments due under the Agreement to Alexander and for the
third party AmmLeach(R) pilot plant and feasibility study costs.
Moreover, Australia is one of the world's leading mining countries
and together with Alexander's metallurgical team based in Perth,
Western Australia, it provides an exemplary project to work on
together with Compass.
Compass and Alexander believe that market conditions are the
most favourable for several years for growth by attractively priced
corporate acquisitions. Accordingly, the companies expect to form a
strategic alliance in Australia to investigate the acquisition by
Compass of copper resources which can be exploited using the
proprietary Leaching Technologies of Alexander. This will be on
terms to be agreed in respect of each such project.
Financial
The Company has maintained its very tight rein on costs whilst
ensuring the protection of its intellectual property through patent
applications. In January 2015, the Company raised GBP360,000
(gross) through the issue of 72,000,000 new ordinary shares to
institutional and other investors. The net proceeds of the Placing
were for general working capital purposes. In conjunction with the
expected revenue from the agreement with Compass, this should
ensure adequate funding for the next twelve months on the current
budget.
Outlook
In these uncertain economic times, especially for the mining
business,
I believe that Alexander is better placed than most in the
junior sector. Although global economic recovery is volatile and
commodity prices have fallen significantly of late, the Company
will continue to work hard to succeed with the commercialisation of
its technology. Indeed the weakness in most base metals prices
during the last year and the deleterious impact on operating
margins has led to an imperative for companies to cut costs
wherever possible. In this environment, we believe that the scope
for major operating and capital cost savings for existing and
potential mines using our technology should be of ever greater
interest. Particularly as the opportunity offered has significant
environmental benefits.
The exciting opportunity with Compass offers Alexander a most
encouraging start to 2015 and I look forward with considerable
optimism.
As always, I would like to thank the Company's shareholders for
their support and also our employees, consultants and directors for
their highly-valued effort during the last year.
Matt Sutcliffe
Executive Chairman
10 April 2015
Enquiries
Alexander Mining plc
Martin Rosser Matt Sutcliffe
Chief Executive Officer Executive Chairman
Mobile: +44 (0) 7770 865 Mobile: +44 (0) 7887 930
341 758
Email: mail@alexandermining.com
Website: www.alexandermining.com
Northland Capital Partners
Limited
Nominated Adviser and
Broker
Tel: +44 (0) 20 7382 1100
Matthew Johnson / Gerry
Beaney
(Corporate Finance)
John Howes / Mark Treharne
(Corporate Broking)
Consolidated income statement for the year ended 31 December
2014
2014 2013
GBP'000 GBP'000
------------------------------------------ --- --------- ----------
Continuing operations
Revenue 507 26
Cost of sales - -
------------------------------------------ --- --------- ----------
Gross profit 507 26
Administrative expenses (989) (1,010)
Research and development
expenses (367) (390)
Profit on disposal of property,
plant and equipment - 4
Operating loss (849) (1,370)
Finance income 1 5
Loss before taxation (848) (1,365)
Income tax expense - -
------------------------------------------ --- --------- ----------
Loss for the year from continuing
operations (848) (1,365)
Loss for the year from discontinued
operations (62) -
------------------------------------------- --------- --------
Loss for the year (910) (1,365)
Basic and diluted loss per
share (pence):
from continuing operations (0.48)p (0.84)p
from continuing and discontinued
operations (0.52)p (0.84)p
from discontinued operations (0.04)p -
All components of profit or loss for the year
are attributable to equity holders of the parent.
Consolidated statement of comprehensive income for the year
ended 31 December 2014
2014 2013
GBP'000 GBP'000
------------------------------------- -------- --------
Loss for the year (910) (1,365)
Other comprehensive income:
Items that will or may be
reclassified to profit or
loss:
Exchange differences on translating
foreign operations - (1)
Exchange differences realised
on disposal of subsidiary 61 -
Total comprehensive loss
for the year attributable
to equity holders of the
parent (849) (1,366)
-------------------------------------- -------- --------
Consolidated balance sheet as at 31 December 2014
2014 2013
GBP'000 GBP'000
------------------------------- --------- ---------
Assets
Property, plant and equipment - -
Total non-current assets - -
------------------------------- --------- ---------
Trade and other receivables 67 60
Cash and cash equivalents 116 398
-------------------------------- --------- ---------
Total current assets 183 458
-------------------------------- --------- ---------
Total assets 183 458
-------------------------------- --------- ---------
Equity attributable to owners
of the parent
Issued share capital 13,639 13,633
Share premium 13,298 13,020
Translation reserve - (61)
Accumulated losses (27,211) (26,423)
-------------------------------- --------- ---------
Total equity (274) 169
-------------------------------- --------- ---------
Liabilities
Current liabilities
Trade and other payables 439 289
Provisions 18 -
------------------------------- --------- ---------
Total current liabilities 457 289
-------------------------------- --------- ---------
Total liabilities 457 289
-------------------------------- --------- ---------
Total equity and liabilities 183 458
-------------------------------- --------- ---------
Consolidated statement of cash flows for the year ended 31
December 2014
2014 2013
GBP'000 GBP'000
---------------------------------- -------- --------
Cash flows from operating
activities
Operating loss - continuing
operations (849) (1,370)
Operating loss - discontinued
operations (1) -
Depreciation and amortisation
charge - 8
Decrease / (Increase) in
trade and other receivables (7) 7
Increase in trade and other
payables 150 95
Increase in provisions 18 -
Shares issued in payment
of expenses 52 69
Share option charge 21 21
Profit on disposal of property,
plant and equipment - (4)
Inter-company recharges - -
---------------------------------- -------- --------
Net cash outflow from operating
activities (616) (1,174)
----------------------------------- -------- --------
Cash flows from investing
activities
Amounts remitted to subsidiary
companies - -
Interest received 1 1
Proceeds from sale of subsidiary - 101
Proceeds from sale of property,
plant and equipment - 12
----------------------------------- -------- --------
Net cash inflow/(outflow)
from investing activities 1 114
----------------------------------- -------- --------
Cash flows from financing
activities
Proceeds from the issue
of share capital 232 935
Proceeds from lapsed share
issue, net of costs 62 -
Proceeds from issue of
share options 39 -
---------------------------------- -------- --------
Net cash inflow from financing
activities 333 935
----------------------------------- -------- --------
Net decrease in cash and
cash equivalents (282) (125)
Cash and cash equivalents
at beginning of year 398 519
Exchange differences - 4
----------------------------------- -------- --------
Cash and cash equivalents
at end of year 116 398
----------------------------------- -------- --------
Consolidated statement of changes in equity for the year ended
31 December 2014
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 year - - - - (1,365) (1,365)
Translation difference - - - (1) - (1)
-------------------------- --------- --------- -------- ------------ ------------ --------
Total comprehensive
loss for the
year attributable
to equity holders
of the parent - - - (1) (1,365) (1,366)
-------------------------- --------- --------- -------- ------------ ------------ --------
Share option
costs - - - - 21 21
Shares issued 27 977 - - - 1,004
-------------------------- --------- --------- -------- ------------ ------------ --------
At 31 December
2013 13,633 13,020 - (61) (26,423) 169
-------------------------- --------- --------- -------- ------------ ------------ --------
Accumulated loss
for year - - - - (910) (910)
Realisation of
foreign exchange
losses upon sale
of subsidiary - - - 61 - 61
-------------------------- --------- --------- -------- ------------ ------------ --------
Total comprehensive
loss for the
year attributable
to equity holders
of the parent - - - 61 (910) (849)
-------------------------- --------- --------- -------- ------------ ------------ --------
Share option
costs - - - - 21 21
Share issue subscription - - 100 - - 100
Costs of share
issue subscription - - (38) - - (38)
Share issue lapsed - - (62) - 62 -
Share option
issued - - - - 39 39
Shares issued 6 278 - - - 284
-------------------------- --------- --------- -------- ------------ ------------ --------
At 31 December
2014 13,639 13,298 - - (27,211) (274)
-------------------------- --------- --------- -------- ------------ ------------ --------
Notes
1. Financial statements
The financial information set out in this announcement does not
constitute statutory accounts within the meaning of Section 434 of
the Companies Act 2006 for the year ended 31 December 2014 or for
the year ended 31 December 2013, but is derived from those
accounts. The financial statements for 2014 will be delivered to
the Registrar of Companies following the Company's Annual General
Meeting. The auditors have issued an unqualified report on these
accounts. The auditor has issued an unqualified opinion in respect
of the financial statements which does not contain any statements
under the Companies Act 2006, Section 498(2) or Section 498(3). The
auditor has raised an Emphasis of Matter in relation to going
concern and the availability of project finance as follows:
"In forming our opinion, which is not modified, we have
considered the adequacy of the disclosures made in note 2(a) to the
financial statements concerning near-term corporate developments
and the possibility that the company may need to raise further
finance within the next twelve months in order to continue its
operations and to meet its commitments. If the company is unable to
secure such additional funding, this may have a consequential
impact on the company's and the group's ability to continue as a
going concern.
The outcome of any corporate developments or fundraising cannot
presently be determined. These conditions, along with the other
matters explained in note 2(a) to the financial statements,
indicate the existence of a material uncertainty which may cast
significant doubt about the Company's and the Groups' ability to
continue as a going concern. The financial statements do not
include the adjustments that would result if the Company was unable
to continue as a going concern."
2. Summary of significant accounting policies
a) 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 consolidated financial statements incorporate the financial
statements of the Company and entities controlled by the Company
(its subsidiaries) made up to 31 December each year.
Going Concern
Based on a review of the Group's budgets and cash flow
forecasts, the directors have identified that if current and
near-term corporate development opportunities are unsuccessful in
providing adequate funding then the Company will need to raise
finance within the next twelve months in order to continue its
operations and to meet its commitments.
In common with many mining, exploration and intellectual
property development companies, the Company needs to raise finance
for its activities in discrete tranches to finance its activities
for limited periods. The Directors are confident that the Company
currently has a range of corporate development opportunities, which
could include significant funding outcomes and moreover that, if
necessary, any further funding can be raised as and when required.
(Accordingly, attention is drawn to Note 4, Post Balance Sheet
events, where details of potential significant business development
funding opportunities are provided). On this basis, the Directors
have concluded that it is appropriate to draw up the financial
statements on the going concern basis. However, there can be no
certainty that either development opportunities or alternative
funding will be secured in the necessary timescales. This indicates
the existence of a material uncertainty that may cast significant
doubt on the ability of the company and the group to continue as a
going concern and therefore, that it may be unable to realise its
assets and discharge its liabilities in the normal course of
business. The financial statements do not include the adjustments
that would result if the Company and Group were unable to continue
as a going concern.
b) Research and development expenditure
Research costs are recognised in the income statement as an
expense as incurred. Development costs are recognised in the income
statement as an expense as incurred unless the development project
meets specific criteria for deferral and amortisation. No
development costs have been deferred to date because there is
insufficient information at the balance sheet date to quantify the
expected future economic benefits from the proprietary leaching
technologies.
3. Dividends
The directors do not recommend the payment of a dividend (2013:
nil).
4. Post balance sheet events
On 13 January 2015, the Company issued 72,000,000 new shares of
0.1p each for cash at 0.5p each to raise GBP360,000 (gross). In
connection with that placing, the Company issued 3,600,000
warrants, valid for two years, to subscribe for ordinary shares at
0.5p per share
On 13 January 2015 the Company also issued 1,090,909 new shares
of 0.1p each, at a price of 0.825p per share, in lieu of GBP9,000
in fees due to the Company's nominated advisor and 1,500,000 new
shares of 0.1p each at a price of 0.80p per share in lieu of
GBP12,000 in fees due to a consultant for investor relations and
advisory services.
On 22 January 2015, the Company issued 5,000,000 new shares of
0.1p each, at a price of 0.6p per share, to Cove House Investments
Limited, in respect of consultancy and advisory services.
Following admission of the above shares, the Company has a total
of 255,910,288 ordinary shares in issue.
On 23 February 2015 the Company announced a non-binding Heads of
Agreement ("HoA") signed with Compass Resources Limited ("Compass")
a listed Australian public company, for an AmmLeach(R) licence and
certain technical and management services relating to a feasibility
study planned for the use of AmmLeach(R) at Compass's treatment
plant and mine in Australia for copper, cobalt and nickel
production.
Compass and Alexander are currently working to finalise the
definitive agreement ('Agreement'), conditional on completion of
Compass' proposed financing. The key commercial terms agreed in the
HoA are:
On completion of the definitive agreement, the Company will
grant to Compass a licence to use Alexander's leaching technologies
(AmmLeach(R)). The principal terms of the licence and technical
consultancy and management services will include:
I. Cash payments by Compass totalling A$1,100,000 to Alexander
on commencement of the Agreement;
II. Compass will also pay to Alexander:
a. A$400,000 three months after the initial fee payment; and
b. A$425,000 upon delivery of the feasibility study;
III. A$550,000 during the construction and commissioning stage,
dependent on a construction go-ahead decision; and
IV. A royalty of 2.6077% on saleable metal production after capped third party royalties.
Conditional upon the Agreement being executed, and subject to
Alexander shareholders' approval at the 2015 AGM, the Company will
grant to Compass the following share options:
I. options over 5 million ordinary shares of 0.1p each at an
exercise price of 7.5p per share for 18 months from issue; and
II. options over 5 million ordinary shares of 0.1p each at an
exercise price of 10.0p per share for 24 months from issue.
Annual Report
The Annual Report will be posted to all shareholders by 17 April
2015 and will be available on the Company's website at
www.alexandermining.com. Additional copies will be made available
to the public, free of charge, from the Company's registered office
at 35 Piccadilly, London W1J 0DW.
Annual General Meeting
The Company's Annual General Meeting will be held at the East
India Club, 16 St James's Square, London, SW1Y 4LH at 10:30am on
Wednesday 13 May 2015. The Notice of the AGM and the associated
explanatory notes relating to the resolutions to be proposed at
that meeting will accompany the Company's annual report.
Disclaimers and forward looking statements
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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