Second Interim Financial Results for the Six Months to 31 December 2022

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF REGULATION 11 OF THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS 2019/310.

28 June 2023

BWA Group PLC

 (“BWA” or the “Company”)    

Second Interim Financial Results for the Six Months to 31 December 2022

BWA Group plc [AQSE: BWAP], which has mineral exploration licences in both Cameroon and Canada at various stages of development and is quoted on London’s AQSE Growth Market, announces its unaudited financial results for the second interim period of six months to 31 December 2022, following the announcement of the extension of its financial reporting period to 30 June made on 19 June 2023.  The Company announced its unaudited financial results for the first interim period of the six months to 30 June 2022 on 29 September 2022, and expects to publish its audited financial results and report for the 18 months to 30 June 2023 during 4Q2023.

A version of this announcement including maps and photographs can be viewed on the Company’s website, http://www.bwagroupplc.com/bwa-announcements.html

Chairman’s Statement

The Company has continued to invest in the rutile sands project in Cameroon through our 90 per cent owned subsidiary, BWA Resources (UK) Limited (“BWAR”), and its two Cameroon domiciled subsidiaries, as announcements over the last 12 months attest. Whereas activity in the other 100 per cent subsidiary company in Canada, Kings of the North Corporation Inc. (“KOTN”), has been limited to maintaining the licences in the two remaining claim areas, Winterhouse and Isoukustouc, in the registered ownership of KOTN, with the Canadian government mining registry and ensuring that all licence fees are paid and the claims in good order.

Significantly, since the pervious First Interim Results announcement, BWAR through its two Cameroon subsidiaries has been awarded three additional licences for heavy mineral sands, primarily rutile, taking the total to five licences, totalling 1,269 sq. kms, and now hold licences to: Nkoteng 1 Nkoteng 2, Dehane 1, Dehane 2, and Dehane 3. There are two additional permits currently applied for: Songloulou 1 and Songloulou 2, totalling a further 1,000 sq. kms.

BWAR has carried out further exploration work on the two claims at Nkoteng and Dehane to which it has been granted exploration rights.  The initial results from the first surveys have been announced to the market and are published on the Company website, www.bwagroupplc.com/announcements.  

Due to the encouraging results from the original wide spaced reconnaissance pitting work, follow up closer-spaced mechanised auger drilling was carried out in Cameroon in the spring, primarily on Nkoteng 1 licence, testing an approximate 5km long target area for the potential development of initial heavy mineral resource estimates. The results of granulometric and size fractioning studies completed by BWA on 20 selected samples from this exploration work were published in late June 2022, the highlights of which are:

• Rutile is most abundant mineral, especially concentrated within the sand size fraction -600 to +180 µm.
• Major ilmenite was also observed.
• Minor HMS also observed in -150 µm size fraction.
• Minor kyanite observed in weathered clays.
• Plastic clays contain elevated ilmenite in select areas.
• Implications of the granulometric studies are not yet fully recognised, although suggest distinctive mineralised size fractions and preferred host strata.

Duplicate portions of samples used in granulometric studies, have been selected and shipped for submission to a specialist laboratory in Germany for heavy mineral separation and mineral composition test work, with results expected Q2 2023.

On 6 April 2023, BWA announced the results of its reconnaissance site visit on its recently approved Dehane 2 rutile sands Licence, located in Central Cameroon (“Dehane 2” or the “Dehane Project”).

The Dehane 2 licence covers an area of 54 km2 and includes an additional 14 km of strike length of the Nyong river system, an area known to be prospective for Ilmenite, Rutile, Zircon and Kyanite heavy mineral sand mineralisation. Moreover, the licence covers some 20 km of the mouth of the Nyong River and estuarine environment as it empties into the Gulf of Guinea. A river mouth can lead to a change in flow conditions that can cause the fluvial system to deposit any supplementary sediment including heavy mineral sand (HMS) it is carrying, where potentially economic accumulations of HMS are found within the lowest energy zone on the beach, the swash zone.

The field party observed coarse and medium grained rutile, ilmenite and kyanite in numerous thin continuous horizons, stacked upon each other throughout the riverbanks and beach sands.

The prolific amount of heavy sand mineralisation along the riverbeds and towards the mouth of the Nyong River was very noticeable and provides encouraging evidence for the potentially economic accumulations of heavy mineral sands within this marine/estuarine environment and certainly justifies the licence acquisition and further follow up exploration.

On 27 April 2023 BWA announced positive results from its Dehane 2 licence area.

The auger sample (DH2_001) from the RNS of 6 April 2023 underwent granulometric testwork involving sieve sized fraction studies and panned concentration, completed by BWA using the facilities at Afrigeolabs, Yaoundé, Cameroon. From field observations, sand is logged for the entirety of the 1.90 m deep auger hole. The particle size analysis is presented in the table below and shows that this sample is composed of six particle size fractions. Some 93% of the grains have a size between 180 and 600 microns, defined by Wentworth (1922) as medium to fine sand.

Mineralogically, rutile is the dominant heavy mineral in the coarse fractions and is in most of the fractions above 1000 microns, 600 microns and 355 microns, i.e., up to approximately 40% of the sieved sample. Kyanite crystals are also visible in this grain size range. In the (+) 180-micron fractions, ilmenite becomes the dominant mineral although rutile is still clearly visible, and in the smaller fractions (+ 150 microns and + 75 microns) ilmenite is predominant.

Using a high-resolution camera, a yellow mineral in this grain size range was also observed, which could potentially be monazite. However, further studies and analytical testwork is required to confirm the presence of monazite.

Highlights:

• Rutile most dominant (heavy) mineral in fractions above 1000 microns, 600 microns and 355 microns, i.e., up to approximately 40% of the sample.
• Ilmenite and rutile observed in smaller fractions.
• Implications of the granulometric studies are as yet not fully recognised, although are encouraging and certainly justifies the licence acquisition and follow up exploration and testwork.
• Abundance of heavy minerals observed in panned concentrates (presented in table below).
• Possible monazite observed and is found (like rutile) in the fractions above 1000, 600 and 355 µm. Further studies and analytical testwork is required to verify the observations.

During the period covered by these Interim results, BWA has raised an additional £74,000 in the form of Convertible Loan Notes and Short-Term Loans, to continue its Cameroon exploration program. Also, BWA has continued also to realise its shareholding in St-Georges Eco-Mining Corp (“St Georges”) from KOTN and the proceeds from realising part of its portfolio of investments has provided funds for the development of activities in Canada, Cameroon and the UK. 

In Canada we continue to consult with our legal advisers regarding potential claims against St Georges, its directors, staff, and others and it is noted that at the end of these Interims period, SX has subsequently commenced a related action against BWA in the UK for performance against BWA to enforce a conversion notice of Convertible loan Notes into BWA ordinary shares.  BWA is defending the action on the grounds that these securities are the subject of its action against SX in Canada and the SX litigation will fall away on settlement of the Canadian claim. Notwithstanding that, BWA and SX are continuing with discussions between directors and their respective solicitors.

After the period under review, BWA has been granted 2 additional HMS licences in Cameroon, designated as Nkoteng 2 and Dehane 2, virtually doubling its total exploration area from 721 Sq. Km to 1,269 Sq. Km.  It is the Board’s intention to seek the necessary funding to undertake field exploration and complete an initial JORC Mineral Resource Estimate and Preliminary Economic Assessment on theDehane 1 permit, by end-Q1 2024, and commence reconnaissance exploration work on the newly granted licences.

In view of the granting of the two additional licence areas the board has released provisions totalling £270,000 made against the investment in Cameroon at the last year end.

The Board continues to show their confidence in the future direction of the Company by capitalising one-half of their fees into new Ordinary Shares.

Richard Battersby, who has been Chairman of BWA for many years, indicated to the Board that he wished to retire and as a result, stood down as Chairman on 29 July 2022 and retired from the Board on 1 December 2022. The Board takes this opportunity to thank him for all his efforts on the Group’s behalf and wishes him well in his retirement. I have been appointed Interim Chairman, pending further changes to the Board in due course.

James Butterfield, Interim Chairman

The Board are responsible for the contents of this announcement.

Ends -

For further information: 

BWA Group PLC James Butterfield Interim Chairman	[phone] [e-mail]
Allenby Capital Limited Corporate Adviser  Nick Harriss/Lauren Wright	[phone]

INCOME STATEMENT

	Notes	6 months ended 31 December 2022 Unaudited £		6 months ended 30 June 2022 Unaudited £		Year ended 31 December 2021 Audited £
Administrative expenses		(265,729)		(268,370)		(747,430)
Administrative expenses – release of provision		-		270,000		-
		(265,729)		1,630		(747,430)
Other operating income		160,000		200,880		240,000
Gain/(loss) on disposal of investments		(256)		(22,069)		56,760
Gain/(loss) on revaluation of investments		242		(2,090)		567,529
Operating profit/(loss)		(105,743)		178,351		116,859
Interest receivable and similar income		1		2		5,707
		(105,742)		178,353		122,566
Interest payable and similar expenses		(19,994)		(3,791)		(42,876)
Profit/(loss) on ordinary activities
before and after taxation and retained
for the period		(125,736)		174,562		79,690
Earnings/(loss) per ordinary share:
Basic (pence)	2	(0.03)		0.04		0.03
Diluted (pence)	2	(0.01)		0.02		0.01

All amounts relate to continuing activities.

STATEMENT OF OTHER COMPREHENSIVE INCOME

	Notes	6 months ended 31 December 2022 Unaudited £		6 months ended 30 June 2022 Unaudited £		Year ended 31 December 2021 Audited £
Profit/(loss) for the period		(125,736)		174,562		79,690
Other comprehensive income		-		-		-
Total comprehensive profit/(loss)
for the period		(125,736)		174,562		79,690

BALANCE SHEET

	Notes	At		At		At
		31 December 2022		30 June 2022		31 December 2021
		Unaudited £		Unaudited £		Audited £
Fixed Assets
Investments		2,515,600		2,381,769		1,980,034
Current Assets
Debtors and prepayments		52,943		57,347		48,402
Cash at bank and in hand		4,438		61,470		49,952
		57,381		118,817		98,354
Creditors: amounts falling due
within one year		(324,466)		(140,521)		(120,809)
Net current assets/(liabilities)		(267,085)		(21,704)		(22,455)
Total assets less current liabilities		2,248,515		2,360,065		1,957,579
Creditors: amounts falling due
after one year		(36,921)		(39,485)		(45,021)
Net assets		2,211,594		2,320,580		1,912,558
Capital and reserves
Called up share capital	3	2,279,484		2,002,489		1,972,239
Share premium	4	23,858		23,858		23,858
Capital redemption reserve	4	288,625		288,625		288,625
Other reserve	4	(3,306,383)		(3,305,823)		(3,243,709)
Equity reserve	4	4,310,948		4,571,193		4,367,983
Retained earnings	4	(1,384,938)		(1,259,762)		(1,496,438)
Shareholders’ funds		2,211,594		2,320,580		1,912,558

CASH FLOW STATEMENT

	Notes	6 months ended		6 months ended		Year ended
		31 December 2022		30 June 2022		31 December 2021
		Unaudited £		Unaudited £		Audited £
Cash flows from operating activities		(39,028)		(163,506)		(384,931)
Cash flows from investing activities
Purchase of fixed asset investments		-		-		(321,785)
Sale of fixed asset investments		2,105		79,253		1,018,595
Loans to subsidiary undertakings		(33,000)		(98,669)		(273,017)
Interest received		1		2		5,707
Net cash from investing activities		(30,894)		(19,414)		429,500
Cash flows from financing activities
New loans in period		16,000		-		-
Loans repaid		(3,110)		(5,562)		(41,000)
Loan note proceeds received		-		200,000		45,000
Net cash from financing activities		12,890		194,438		4,000
Increase in cash and
cash equivalents		(57,032)		11,518		48,569
Cash and cash equivalents at
beginning of period		61,470		49,952		1,383
Cash and cash equivalents at end of period		4,438	61,470		49,952

Notes to the Financial Statements

1. Status of these accounts

The interim accounts for the period from 1 July 2022 to 31 December 2022 are unaudited. The financial information set out in this statement does not constitute statutory accounts within the meaning of the Companies Act 2006.

2. Earnings per ordinary share

Basic and diluted earnings per share figures are based on the following profits / (losses) and numbers of shares:

	6 months ended 31 December 2022 Unaudited £	6 months ended 30 June 2022 Unaudited £	Year ended 31 December 2021 Audited £
Profit/(loss) before tax	£(125,736)	£174,562	£79,690
Weighted average number of shares for the purpose of basic earnings per share	438,165,065	398,032,145	310,318,603
Effect of dilutive securities	635,351,085	635,611,330	602,277,997
Weighted average number of shares for the purpose of diluted earnings per share	1,073,516,150	1,033,643,475	912,596,600

Share capital

	At 31 December 2022 Unaudited	At 30 June 2022 Unaudited	At 31 December 2021 Audited
Allotted, called up and fully paid	£2,279,484	£2,002,489	£1,972,239
Number of ordinary shares of 0.5p	455,896,891	400,497,891	394,447,891

		At		At		At
		31 December 2022		30 June 2022		31 December 2021
		Unaudited £		Unaudited £		Audited £

4.	Reserves		Capital
		Share premium	redemption reserve	Other reserve	Equity reserve	Retained Earnings	Total
		£	£	£	£	£	£
	At 1 January 2021	15,608	288,625	(3,300,724)	4,742,058	(1,519,113)	226,454
	Profit for the period	-	-	-	-	79,690	79,690
	Issue of share capital Loan note interest	8,250 -	- -	- -	- 30,100	- -	8,250 30,100
	Conversion of loan notes	-	-	-	(404,175)	-	(404,175)
	Reserves transfer	-	-	57,015	-	(57,015)	-
	At 31 December 2021	23,858	288,625	(3,243,709)	4,367,983	(1,496,438)	(59,681)
	Profit for the period	-	-	-	-	174,562	174,562
	Loan notes issued	-	-	-	200,000	-	200,000
	Loan note interest	-	-	-	3,210	-	3,210
	Reserves transfer	-	-	(62,114)	-	62,114	-
	At 30 June 2022	23,858	288,625	(3,305,823)	4,571,193	(1,259,762)	318,091
	Loss for the period	-	-	-	-	(125,736)	(125,736)
	Conversion of loan notes	-	-	-	(260,245)	-	(260,245)
	Reserves transfer	-	-	(560)	-	560	-
	At 31 December 2022	23,858	288,625	(3,306,383)	4,310,948	(1,384,938)	(67,890)

5. Valuation of Investments

The whole of the Company's investment in Cameroon, including loans made to BWA Resources (UK) Limited and BWA Resources (Cameroon) Limited, is carried in the balance sheet at £1,097,020. The Company's investment in Kings of the North Corp (‘KOTN’) is valued at £1,418,000. The valuation of unlisted investments requires the Directors to make judgements, estimates and assumptions that are believed to be reasonable under the circumstances, but which affect the reported fair value of those investments. The recoverability of the investments in Cameroon and KOTN is dependent on the future profitability of the underlying businesses. The Directors have reviewed the current position and, after taking into account a number of factors, believe that the valuations at 31 December 2022 remain appropriate.

6. Related Party Transactions

During the second interim period, the Company issued the following shares in part settlement of director fees.

Name	Value	Number of Shares
R Battersby	£5,250	1,050,000
A Borrelli	£3,125	625,000
J Butterfield	£5,250	1,050,000
J Hogg	£3,125	625,000

In addition, the Company was advanced the following amounts on a short-term basis during the second interim period by its directors and a subsidiary director.

Name	Value
R Battersby	£4,500
A Borrelli	£3,500
J Butterfield	£4,500
J Hogg	£3,500
R Howe	£3,000

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