TIDMAXM
RNS Number : 3793C
Alexander Mining PLC
28 September 2018
28 September 2018
ALEXANDER MINING PLC
INTERIM REPORT FOR SIX MONTHSED 30 JUNE 2018
Alexander Mining plc ("Alexander" or "the Company"), an AIM
listed mining and mineral processing technologies company,
announces its unaudited results for the six months ended 30 June
2018.
The Company's business objective is to become a successful
company focused on the mining and processing of base metals which
are integral to the delivery of technologies and products of the
future. This will be achieved from the commercialisation of its
proprietary mineral processing technologies and potential strategic
partnerships in producing mines and through equity and/ or royalty
positions in advanced projects.
Highlights
* Potential technology licensing and consulting
agreement for the Kapili Tepe copper project at Sivas
in Republic of Turkey
* Working closely with Proses Mühendislik
investigating the commercial use of Alexander's base
metals leaching technology in Turkey
* Progressing research and development initiatives for
HyperLeach(R) , lithium and vanadium
* Aggressively investigating a range of potentially
complementary corporate investment opportunities in
the mining sector
* Adequate financial position and working capital to
end of June 2019
Chairman's Statement & Review of the Half-Year
Dear Shareholders and Investors.
Herewith I take pleasure on behalf of your Board of Directors in
presenting the Company's unaudited interim results for the
half-year ended 30 June 2018, along with commentary on the
operating environment and related outlook.
Once again, the period under review was filled with sentiment
and fundamental driven sectoral performance in the global mining
sector, whilst resource nationalism continues but has been tempered
in some countries by government changes. In general, although the
mining and natural resources investment sector remained positive,
even within some commodities exhibiting flattening demand curves,
we are clearly seeing, for the first time, that sentiment is
dominant and even driving fundamentals. However, in the continuing
volatile economic and political environment, precious metals
prices, including gold and silver, continued to support the demand
for risk hedging against rising government and public debt levels,
US dollar uncertainty and fear of Fiat currency failure.
The world's leading economy, the USA, is also reasserting itself
as a primary producer of much of what it needs to support the 'Buy
USA' and industrial development policy driven by the Trump
government. This is being reflected notably on the changed
economics of the metals production value chain in the Americas and
within a long dormant now massively resurgent brownfield
re-establishment of old mines, even from the 1800s, in some cases.
New district size plays, primarily in precious metals but also in
base metals, are being established with modern exploration
techniques and step out drilling. Significantly, many of the base
metal deposits are oxide in nature and so potentially amenable to
Alexander's AmmLeach technology and we shall be monitoring these
opportunities actively moving forward, while Mexico remains highly
prospective for the Company.
Markedly, another realisation that is impacting seriously is
that the days of drill, find, dig and produce within 3 to 5 years
are long gone. Increased regulation and ESIA (Environmental &
Social Impact Assessment) processes for exploring for, proving-up,
exploitation permitting, then financing & constructing a
producing mine can take well in excess of ten years and on average
in many of the common mining jurisdictions at least 15 years.
During that period some or all of the following will probably have
occurred, government changes that alter the rules of engagement,
demand for the metals/minerals change, and/or operating currency
changes markedly against the US dollar market price.
This is significantly and inherently positive for Alexander as
both existing and past closed operations look to 'squeeze the
stone' for more via innovative processing of residues and waste
(historically low grade sub-economic) materials. The Company's
technologies are ideally situated to make the squeezing possible
with relatively low capital expenditure, low operating expenditure
and environmentally neutral impacts. We are aggressively pursuing
such opportunities.
The price of base metals, Alexander's main area of activity, and
related base metals equities continued to experience corrections
and expected volatility but they remained range bound and in a
rising general trend. LME stock depletion was sustained, even with
observed flattening economic demand and global trade threats. There
was continued significant capital inflow for exploration. The
crypto-currencies investment bubble has deflated for now and we see
a switch back to providing significant funding for the usual junior
resource investment market.
Increased investment in exploration and development activity in
the infrastructure commodities and energy storage, or battery
metals, continued during the period and still underpins further
potential price rises. More importantly, the consumer automobile
industries are beginning to quickly realise that the much-stated
ambitious adoption rates of electric vehicle ("EV"), primarily
driven by political environmental agendas with no cognisance of the
quantities of metals' production growth required to meet these
rates, simply cannot be met. With some industry analysts
forecasting an additional 30% to 40% increase in copper production
(1.5Mtpa), 100% increase for Class 1 nickel production (1Mtpa) and
an additional 2x to 3x current cobalt production (200ktpa to
300ktpa) for the passenger EV market alone, a gross under estimate
of the supporting infrastructure and ignorance of the impact of
commercial EVs, the prices of these metals in real terms are likely
set to record levels.
One of the key metrics that demonstrates the current low
potential for additional capacity being added, and therefore upward
pressure on prices, is the 'Incentive Price' for development,
assuming the resource is discovered and quantified. Studies show
that establishment of new integrated copper, nickel and cobalt
production operations needs incentive prices of US$9,000/t,
US$22,000/t and US$50,000/t respectively. This is just to consider
investing further. With the average capital cost for these same
metals using current processing methods, of US$30k to US$45k/tpa,
US$80k/tpa to US$120k/tpa, respectively, with cobalt usually a
by-product of the others. Considering the commodity cycle
positioning and project jurisdiction, metals prices need
sustainability at even higher levels for resource companies to
actually deploy capital and build the mines.
All of the above, assuming the capital could be raised, even at
the low end of the scale, to produce the copper, Class 1 nickel,
and cobalt requirement for EVs would need, US$45bn, US$80bn, and
US$5bn respectively. That's US$130bn funding requirement from
where? Car companies? Governments (AKA tax payer)? This is the
exciting opportunity for Alexander's processing technologies as the
significant potential reduction in capital and operating cost,
along with significant environmental benefits could massively
impact in lowering the incentive price and shorten time to
production.
Therefore, considering all of the above, and with the key
operating environment for the Company substantially unchanged from
that which I reported in the 2017 Annual report, the outlook
remains very positive for the Company's commercialisation efforts.
Regardless of market sentiment, Alexanders' management and Board
have remained focused on developing or acquiring commercialisation
opportunities for our technologies to release the embedded value in
the Company's intellectual property.
In the reporting period, the Company continued to add granted
patents in key mining jurisdictions to its portfolio of
intellectual property and, where appropriate, make additional
applications. In addition, the Company progressed with its R&D
activities.
Financial
The Company has continued to be assiduous in keeping its
overheads to the minimum necessary, whilst maintaining required
expenditure on business development and intellectual property
protection. Expenses overall continue to be managed appropriately
consistent with early value creation. The Company's cash position
at 30 June was GBP662,043.
Based on the current budget, the Company should have adequate
working capital through until the end of June 2019.
Commercialisation activities
Turkey
Our optimism in the last annual report that we may benefit from
a change in the ownership of the Sivas copper mineral property
("Sivas") in the Republic of Turkey, where we had maintained
interest and involvement in developing the optimum processing
method potentially using Alexander technology, should be
rewarded.
The Kapili Tepe copper project at Sivas in Republic of Turkey is
on course to be acquired by Canadian company Deep South Resources
Inc. ("DSR") subject to completion. This opportunity affords
Alexander, under a technology licensing and consulting agreement
announced in June 2018, to investigate the potential use of its
technology in a full commercial scale processing plant. In
addition, subject to Toronto Stock Exchange approval, Alexander
will also receive 500,000 shares in DSR.
An exciting separate opportunity being discussed is to test the
potential amenability of Alexander's suite of technologies for
DSR's other project, the HIAB copper project in Namibia.
Per the announcement on 21 February 2018 regarding a commercial
and technical partnership agreement with Proses Mühendislik, Danı
manlık, İn aat ve Tasarım AS. ("Proses") in Turkey, Iran and the
rest of the Middle-East, we have been working closely together.
Particular effort has gone into investigating the commercial use of
Alexander's base metals leaching technology in Turkey. The concept
is that, subject to securing the necessary funding, Proses will
design and construct a semi industrial scale processing plant using
Alexander's technology. We look forward to reporting on progress in
due course.
Research and Development
With regards to the Company's R&D projects, overall progress
has been somewhat slower than expected due to an ongoing shortage
of skilled staff. This is anticipated to accelerate with the
appointment of a new project metallurgist in Perth, Western
Australia where most of our R&D is being conducted.
The project examining nickeliferous flotation tailings has
completed initial characterisation of the tailings. The primary aim
of this work is to demonstrate an economically viable route to
produce battery quality nickel and cobalt sulphates directly from
existing tailings. The secondary target is to demonstrate the
potential for heap leaching nickel sulphide ores which would reduce
the cut-off grade for most mines which currently use crushing,
grinding and flotation to produce a concentrate. The capacity to
process the concentrate on-site will also prove attractive to
smaller producers of concentrate as it allows them to produce
higher value products.
A new project has been started to examine the use of
HyperLeach(R) as a method for recovery of copper from the low-grade
porphyry halos which surround higher grade sulphide deposits. This
work follows on from earlier successful work on flotation
concentrates conducted in both Mongolia and Australia. There has
been increasing interest in the in-situ leaching of metals. The
HyperLeach(R) process has a number of attributes which match well
with those required of an in-situ leaching system. The reagent is
low cost, recyclable at reasonably low cost, operates at low pH and
has a high capacity for metal solubility.
The increasing installation and use of renewable energy at
remote mine sites make HyperLeach(R) increasingly attractive as an
option for on-site value adding. The easy regeneration of the
primary leachant using renewable energy should significantly reduce
the operating costs compared to using conventional energy sources
in remote locations. The potential to produce metal, or other
value-added products at a remote mine site will also be beneficial
by significantly reducing transport costs compared to ore or
concentrates.
The significant R&D JV project to investigate the potential
recovery of vanadium from amenable ores has progressed. John
Webster Innovations Proprietary Limited ("JWI") has undertaken
initial test work focused on Multicom Resources' Saint Elmo
vanadium project in North Queensland, Australia, and we are
awaiting the results.
Australia
Unfortunately, as reported on 29 August 2018, Accudo's plan to
proceed with a DFS on the potential use of our leaching technology
under the existing licence agreement at a copper project in
Australia and which was dependent upon it obtaining financing, has
not happened.
Zambia
Our past reported introducer's agreement with Duard Capital Ltd.
("Duard") for the potential introduction of commercial
opportunities for Alexanders' leaching technologies in Zambia
continues to be active on highly prospective junior projects for
the potential recovery of copper and cobalt using mobile or
semi-mobile containerised plants.
New opportunities
As well as actively working on the commercialisation of our
leaching technologies, given the mining industry background of the
Company's directors and senior employees, we continue to
aggressively investigate and develop a range of potentially
complementary corporate investment opportunities in the mining
sector.
Outlook
All of the above continues to offer shareholders and potential
investors strong fundamentals in the Alexander business and in the
progressive project developments we are engaged in.
The Board remains firmly focused in executing its clearly
defined business plan at all levels and levering the background and
networks of the Company's directors and senior employees. We are
also actively reviewing and submitting commercial proposals on
several complementary opportunities of interest in the mining
sector. However, we continue to remain prudent with regards to the
deployment of the Company's cash.
As usual, I would like to thank you, Alexander's valued
shareholders, for your continuing support and our employees,
directors, consultants and advisers for their continued commitment
for the value filled future we are targeting ahead.
Alan M. Clegg
Non-Executive Chairman
28 September 2018
For further information, please contact:
Martin Rosser
Chief Executive
Mobile: +44 (0) 7770 865 341
Alexander Mining plc
Tel: +44 (0) 20 7078 9566
Email: mail@alexandermining.com
Website: www.alexandermining.com
Northland Capital Partners Limited
Matthew Johnson / Dugald J Carlean
(Corporate Finance)
Isabella Pierre (Corporate Broking)
Tel: +44 (0) 20 3861 6625
Turner Pope Investments (TPI)
Ltd
Andy Thacker
+44 (0) 20 3621 4120
Consolidated income statement
Six months Six months Year ended
ended 30 ended 30 31 December
June 2018 June 2017 2017
GBP'000 GBP'000 GBP'000
--------------------------------------- ----------- ----------- -------------
Continuing operations
Revenue - - -
Cost of sales - - -
--------------------------------------- ----------- ----------- -------------
Gross profit - - -
Administrative expenses (174) (196) (329)
Research and development expenses (103) (65) (101)
Operating loss (277) (261) (430)
Finance income 1 - -
Finance cost - - -
--------------------------------------- ----------- ----------- -------------
Loss before taxation (276) (261) (430)
Income tax expense - - -
--------------------------------------- ----------- ----------- -------------
Loss for the period from continuing
operations (276) (261) (430)
Loss for the period from discontinued
operations - - -
--------------------------------------- ----------- ----------- -------------
Loss for the period (276) (261) (430)
--------------------------------------- ----------- ----------- -------------
Basic and diluted (loss) per share
(pence)
from continuing operations: (0.01) p (0.02) p (0.03) 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 30 ended 30 31 December
June 2018 June 2017 2017
GBP'000 GBP'000 GBP'000
---------------------------------------- ----------- ----------- -------------
Loss for the period (276) (261) (430)
Other comprehensive income: - - -
Total comprehensive loss for the
period attributable to equity holders
of the parent (276) (261) (430)
---------------------------------------- ----------- ----------- -------------
Consolidated balance sheet
As at 30 As at 30 As at
June 2018 June 2017 31 December
2017
GBP'000 GBP'000 GBP'000
------------------------------- ----------- ----------- -------------
Assets
Property, plant & equipment - - -
Total non-current assets - - -
------------------------------- ----------- ----------- -------------
Trade and other receivables 33 36 37
Cash and cash equivalents 662 672 995
------------------------------- ----------- ----------- -------------
Total current assets 695 708 1,032
------------------------------- ----------- ----------- -------------
Total assets 695 708 1,032
------------------------------- ----------- ----------- -------------
Equity attributable to owners
of the parent
Issued share capital 15,352 14,951 15,352
Share premium 14,044 13,932 14,044
Translation reserve - - -
Accumulated losses (29,125) (28,749) (28,866)
------------------------------- ----------- ----------- -------------
Total equity 271 (134) (530)
------------------------------- ----------- ----------- -------------
Liabilities
Current liabilities
Trade and other payables 424 574 502
Provisions - - -
------------------------------- ----------- ----------- -------------
Total current liabilities 424 574 502
Total liabilities 424 574 502
------------------------------- ----------- ----------- -------------
Total equity and liabilities 695 708 1,032
------------------------------- ----------- ----------- -------------
Consolidated statement of cash flows
Six months Six months Year ended
ended 30 ended 30 31 December
June 2018 June 2017 2017
GBP'000 GBP'000 GBP'000
---------------------------------------- ----------- ----------- -------------
Cash flows from operating activities
Operating loss - continuing operations (277) (261) (430)
(Increase) / decrease in trade
and other receivables 4 2 2
Increase / (decrease) in trade
and other payables (78) (50) (121)
Share option & Warrant charge 17 12 21
Net cash outflow from operating
activities (334) (297) (528)
---------------------------------------- ----------- ----------- -------------
Cash flows from investing activities
Interest received 1 - -
Net cash inflow from investing 1 -
activities -
---------------------------------------- ----------- ----------- -------------
Cash flows from financing activities
Proceeds from the issue of share
capital - 710 1,264
Proceeds from issue of share options - - -
---------------------------------------- ----------- ----------- -------------
Net cash inflow from financing
activities - 710 1,264
---------------------------------------- ----------- ----------- -------------
Net increase / (decrease) in cash
and cash equivalents (333) 413 736
Cash and cash equivalents at beginning
of period 995 259 259
Exchange differences - - -
---------------------------------------- ----------- ----------- -------------
Cash and cash equivalents at end
of period 662 672 995
---------------------------------------- ----------- ----------- -------------
Consolidated statement of changes in equity
Share Share premium Shares Translation Accumulated Total
capital to be reserve losses equity
issued
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January
2017 14,404 13,772 - - (28,501) (325)
------------------------ ---------------- -------------- -------- ------------ ------------ --------
Accumulated loss
for period - - - - (261) (261)
Total comprehensive
loss for the
period attributable
to equity holders
of the parent - - - - (261) (261)
---------------- -------------- -------- ------------ ------------
Share option
costs - - - - 13 13
Shares issued 547 214 - - - 761
Share issue costs (54) (54)
At 30 June 2017 14,951 13,932 - - (28,749) 134
------------------------ ---------------- -------------- -------- ------------ ------------ --------
Accumulated loss
for period - - - - (169) (169)
Total comprehensive
loss for the
period attributable
to equity holders
of the parent - - - - (169) (169)
------------------------ ---------------- -------------- -------- ------------ ------------ --------
Share option
and Warrant costs - - - - 8 8
Shares issued 401 158 - - 44 603
Share issue costs (46) (46)
At 31 December
2017 15,352 14,044 - - (28,866) 530
------------------------ ---------------- -------------- -------- ------------ ------------ --------
Accumulated loss
for period - - - - (276) (276)
Translation Difference - -
---------------- -------------- -------- ------------ ------------
Total comprehensive
loss for the
period attributable
to equity holders
of the parent - - - - (276) (276)
------------------------ ---------------- -------------- -------- ------------ ------------ --------
Share option
and Warrant costs - - - - 17 17
Shares issued - - - - - -
Share issue costs - - - - - -
At 30 June 2018 15,352 14,044 - - 29,125 271
------------------------ ---------------- -------------- -------- ------------ ------------ --------
Notes to the interim financial information
1. Basis of preparation
The interim financial information has 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
2017.
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 2018 and 30 June 2017 is unaudited. The comparative
information for the year ended 31 December 2017 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 financial statements
received an unqualified audit report, but contained a material
uncertainty related to going concern.
Going Concern
In common with many mining, exploration and intellectual
property development companies, the Company has raised finance for
its activities in discrete tranches to finance its activities for
limited periods. At 30 June 2018 the Company had a cash position of
GBP662,043. The cash flow forecasts prepared by the directors
indicate that the Company should be able to cover its operating
costs for a twelve months period, however the minimal headroom in
the forecast together with the uncertainty surrounding the Group's
ability to generate positive operating cash flows indicates a
significant risk relating to going concern. It is currently
anticipated that further funding will be required in the next
twelve months.
On this basis, the directors have concluded that it is
appropriate to draw up the interim financial information on the
going concern basis. However, there can be no certainty that the
Group will generate positive operating cash flows or further
funding. 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 interim financial information do
not include the adjustments that would result if the Company and
Group were unable to continue as a going concern.
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 2018
of 1,888,730,149 (six months to 30 June 2017: 1,161,843,581 and
year to 31 December 2017: 1,615,533,388) and computed on the
respective loss figures as follows:
6 months 2018 6 Months 2017 Full year 2017
GBP'000 Per share GBP'000 Per share GBP'000 Per share
(Loss) - continuing operations (276) (0.01)p (261) (0.02)p (430) (0.03)p
There is no difference between the diluted loss per share and
the basic loss per share presented. Share options granted to
employees, consultants and directors 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 2018, there were 150,200,000 (at 30 June 2017:
56,200,000; at 31 December 2017: 56,200,000) share options in issue
that could have a potentially dilutive effect on the basic earnings
per share in the future.
At 30 June 2018, there were 282,359,373 (at 30 June 2017:
42,359,373; at 31 December 2017: 282,359,373) share warrants in
issue that could have a potentially dilutive effect on the basic
earnings per share in the future.
3. 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
Balance at 1 January 2018 1,888,730,149 1,888,730,149 14,044,441
Balance at 30 June 2018 1,888,730,149 1,888,730 14,044,441
========================== ================ ============== ==========
Deferred shares Deferred share
Number of shares capital
Balance at 1 January 2018 135,986,542 13,462,667
-------------------------- ---------------- --------------
Balance at 30 June 2018 135,986,542 13,462,667
========================== ================ ==============
4. Share options and Warrants
All Share Option costs incurred are allocated to Accumulated
Losses.
The Company had a total of 150,200,000 Share Options in issue
during the period (12,900,000 with exercise prices of 4.92p per
share, 43,300,000 with and exercise price of 0.22p per share and
94,000,000 with an exercise price of 0.15p per share), representing
6.47 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
2017 amounted to GBP10,005 (2017: GBP8,265).
The Company had a total of 47,359,375 warrants in issue during
the period for the provision of Broker services (7,359,375 with an
exercise price of 0.4p per share, 40,000,000 with an exercise price
of 0.15p per share. Warrant charges for the six months to 30 June
2018 amounted to GBP6,834 (2017: GBP3,546).
The Company had a total of 34,999,998 warrants in issue during
the period granted to subscribers of the 2 October 2015 placing
with an exercise price of 0.45 pence per share. No charge was made
to equity for the six months ending 30 June 2018 (2017:
GBP1,677).
The Company had a total of 200,000,000 warrants in issue during
the period granted to subscribers of the 22 November 2017 placing
with an exercise price of 0.225 pence per share.
5. Post balance sheet events:
On 31 July 2018, Alexander announced that it had approved the
grant of 4,000,000 new share options ("New Share Options") at an
exercise price of 0.15 pence ("Exercise Price") to an important
consultant to the Company.
Copies of these announcements 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 news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR BDGDCIUDBGII
(END) Dow Jones Newswires
September 28, 2018 09:02 ET (13:02 GMT)
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