Final Results for the Year Ended 31 December 2020

RNS Number : 1509D
Arkle Resources PLC
25 June 2021
 

 

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.

 

 

25 June 2021

 

Arkle Resources PLC

 

("Arkle", the "Group" or the "Company")

 

Final Results for the Year Ended 31 December 2020

 

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 2020.

 

Chairman's Statement

 

It is pleasing to be able to report drilling on our Mine River licences in Wexford / Wicklow is producing good results notably where earlier detailed soil sampling had identified a totally new zone with gold potential some 750 metres from the 2017 Tombreen discovery.

 

We have drilled three 100 metre holes into this area, now known as Tombreen West, and each hole contained multiple zones of gold bearing veins providing a strong indication of a gold bearing system.

 

We moved the fourth hole approximately 700 metres away into the main Tombreen area. This 200 metre hole showed visible gold in veins between 145 and 150 metres depth. Laboratory analysis is underway with results expected in early July 2021. Reflecting the evidently positive results of this hole an immediate revision of the exploration programme is underway.

 

Additional holes will be drilled in a pattern around Hole 4 in Tombreen. Permits have been obtained and drilling will commence once the current hole 5 is completed.

 

Of equal significance is the suggestion that the shallow holes at Tombreen West may not have gone deep enough to detect the high grade gold. It is likely that one or more 200 metre holes will be drilled at Tombreen West.

 

The detailed soil sampling at our second property in Donegal, using new more advanced techniques, rediscovered what we believe to be the gold bearing veins we first found in 2016. We intend to drill Donegal when permits are obtained and after the current campaign is completed at Mine River.

 

The Donegal drilling campaign will focus on the encouraging soil sample results and follow up trenching survey data obtained in 2020 which we have now analysed and modelled. The focus of the new campaign will be to follow the vein first identified in 2016 which contained high gold grades.

 

Turning to our zinc project, the 23.44% owned Stonepark project in Limerick which has a NI-43-101 compliant resource in excess of 5 million tonnes. There is plenty of scope for growth at this project as the mineralisation has been identified in recent drilling to extend out with the current resource and is open on three sides. Our target is to increase the resource to 10 million tonnes. The licences are held in a private joint venture company where the majority shareholder (76.6%) is Group Eleven who are the operator.

 

In recent months, Arkle commissioned a report on Stonepark to confirm forward exploration strategies.  This recommended drilling a suite of 10 holes. Arkle would be pleased to participate in this programme and are liaising with our partners, Group Eleven, to expedite this if possible.

 

There has been a significant external interest from multinationals in the Stonepark project. The Company was an active participant in negotiations with two of the interested companies and proposals acceptable to Arkle were received but they were not accepted by Group Eleven.

 

Group Eleven have been active on their Carrickittle ground which is adjacent to the Stonepark ground. They have reported very strong drilling results in holes close to Stonepark. The holes are close to the Kilteely hole drilled on Stonepark in 2019. This hole showed zinc mineralisation. There is a geological model which posits a zinc bearing trend from the Carrickittle ground through the Stonepark licences and on to the Pallas Green licences where 45million tonnes of zinc bearing ore have been reported.  The results in the Kilteely hole are at greater depths than the current Stonepark deposit.

 

We believe that the Stonepark deposit is a very valuable resource for Arkle and will be even more so with additional drilling.

 

Funding

 

Arkle is well funded for current and any proposed exploration campaigns. We anticipate that outstanding warrants will be exercised which would further increase available funding for exploration.

 

 

John Teeling

Chairman

24 June 2021

 

 

www.arkleresources.com

 

 

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



Blytheweigh

+44 (0) 207 138 3204

Megan Ray


Rachael Brooks




Teneo

 

Luke Hogg

+353 (0) 1 661 4055

Ciara Wylie

+353 (0) 1 661 4055



 

ARKLE RESOURCES PLC

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2020

 

 

 

 


2020

2019




Administrative expenses

(324,099)

(295,216)

Impairment of exploration and evaluation assets

(330,000)

-

OPERATING LOSS

(654,099)

(295,216)




Loss due to fair value volatility of warrants

(441,829)

(18,644)

LOSS BEFORE TAXATION

(1,095,928)

(313,860)

Income tax expense

-

-

LOSS FOR THE FINANCIAL YEAR AND TOTAL COMPREHENSIVE INCOME

(1,095,928)

(313,860)




Loss per share - basic and diluted

(0.50c)

(0.24c)




 



 

ARKLE RESOURCES PLC

 

CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2020

 

 

 


2020

2019





ASSETS:






NON-CURRENT ASSETS






Intangible assets

3,373,488

3,445,710


 

 




CURRENT ASSETS






Other receivables

21,923

3,864

Cash and cash equivalents

684,837

39,631


 

 


706,760

43,495


 

 




LIABILITIES:






CURRENT LIABILITIES



Trade and other payables

(176,664)

(207,352)

Warrants

(906,198)

(18,644)


 

 

NET CURRENT LIABILITIES

(376,102)

(182,501)


 

 

NET ASSETS

2,997,386

3,263,209


 

 




EQUITY:






Called-up share capital - Ordinary

742,612

1,323,116

Called-up share capital - Deferred

992,337

-

Share premium

6,605,681

6,209,190

Share based remuneration reserve

127,199

44,989

Retained deficit

(5,470,443)

(4,314,086)


 

 

TOTAL EQUITY

2,997,386

3,263,209


 

 

 



 

ARKLE RESOURCES PLC

 

STATEMENT OF CHANGES IN EQUITY

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2020

 

 


Called up Share

Capital

Deferred

Called up Share

Capital Ordinary

Share

Premium

Share Based Payment

Reserve

Retained

Deficit

 

Total


At 1 January 2019

-

1,139,116

6,136,298

31,631

(4,000,226)

3,306,819

Shares issued

-

184,000

72,892

-

-

256,892

Credit to equity for equity-settled share-based payments

-

-

-

13,358

-

13,358

Loss for the year

-

-

-

-

(313,860)

(313,860)

At 31 December 2019

-

1,323,116

6,209,190

44,989

(4,314,086)

3,263,209

Sub-division of shares (Note 5)

 

992,337

(992,337)

-

-

-

-

Shares issued


411,833

396,491

-

-

808,324

Share issue expenses

-

-

-

-

(60,429)

(60,429)

Credit to equity for equity-settled share-based payments

 

 

-

-

-

82,210

-

82,210

Loss for the year

-

-

-

-

(1,095,928)

(1,095,928)

At 31 December 2020

992,337

742,612

6,605,681

127,199

(5,470,443)

2,997,386

 

 

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 the excess of monies received in respect of share capital over the nominal value of shares issued.

 

Share based payment reserve

The share based payment reserve arises on the grant of share options to directors and consultants under the share options plan.

 

Retained deficit

Retained deficit comprises accumulated losses in the current and prior financial years.

 

 

ARKLE RESOURCES PLC

 

CONSOLIDATED CASH FLOW STATEMENT

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2020

 

 

 


2020

2019


CASH FLOW FROM OPERATING ACTIVITIES






Loss for the financial year

(1,095,928)

(313,860)

Impairment of exploration and evaluation assets

330,000

-

Share based payments charge

42,679

6,679

Fair Value movement of warrants

441,829

18,644

Foreign exchange

(4,847)

(235)


 

 


(286,267)

(288,772)




MOVEMENTS IN WORKING CAPITAL



(Decrease)/Increase in trade and other payables

(30,688)

70,475

(Increase)/Decrease in other receivables

(18,059)

19,489


 

 

NET CASH USED IN OPERATING ACTIVITIES

(335,014)

(198,808)


 

 

CASH FLOW FROM INVESTING ACTIVITIES






Payments for exploration and evaluation

(218,247)

(124,719)


 

 

NET CASH USED IN INVESTING ACTIVITIES

(218,247)

(124,719)


 

 

CASH FLOW FROM FINANCING ACTIVITIES






Proceeds from issue of equity shares

1,254,049

256,892

Share issue expenses

(60,429)

-


 

 

NET CASH FROM FINANCING ACTIVITIES

1,193,620

256,892


 

 




NET INCREASE/(DECREASE) IN CASH AND CASH



EQUIVALENTS

640,359

(66,635)




Cash and cash equivalents at beginning



of financial year

39,631

106,031




Effect of exchange rate changes on cash held in foreign currencies

4,847

235


 

 

Cash and cash equivalents at end



of financial year

684,837

39,631


 

 

 



 

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 2019.  The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union.

 

2.  Loss per Share 


2020

2019





Loss per share - Basic and Diluted

(0.50c)

(0.24c)


 

 

 

Basic loss per share

The earnings and weighted average number of ordinary shares used in the calculation of basic loss per share are as follows:


2020

2019


Loss for the year attributable to equity holders of the parent

(1,095,928)

(313,860)


 

 





2020

2019


No.

No.

Weighted average number of ordinary shares for the



purpose of basic earnings per share

220,039,097

129,085,292


 

 




 

Basic and diluted loss per share is the same as the effect of the outstanding share options and warrants is anti-dilutive.

 

3.  Going Concern

 

The Group and Company incurred a loss for the financial year of €1,095,928 (2019: €313,860) and the Group had net current liabilities of €376,102 (2019: net current liabilities €182,501) at the balance sheet date leading to concern about the Company and Group's ability to continue as a going concern.

 

The Group and Company had a cash balance of €684,837 (2019: €39,631) and €684,510 (2019: €39,504) respectively, at the balance sheet date.

 

Included in current liabilities is an amount of €127,500 (2019: €82,500) 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. The cashflow projections include any anticipated impacts of the Covid-19 pandemic on the Group and Company as well as the minimum spend/cash call requirements in relation to licenses held by the Group. 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 completed capital raisings during the year.

 

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

 

Exploration and Evaluation:

2020

2019


Cost:



At 1 January

3,445,710

3,314,312

Additions

257,778

131,398

Impairment

(330,000)

-


 

 

At 31 December

3,373,488

3,445,710


 

 

Carrying amount:



At 31 December

3,373,488

3,445,710


 

 

 

In 2012 the Group entered into an agreement with Teck Ireland Limited ("Teck"), a subsidiary of Teck Resources Limited, which gave Teck the option of earning a 75% interest in licences held by the Group in Cavan/Meath by spending €1.35 million on the licences in order to earn the option to acquire 75% interest. As per the agreement the licences had been transferred into a new company, Oldcastle Zinc Limited. As at 31 December 2019 Teck had completed €1.35 million worth of expenditure to give them a total of 75% in the company.

 

On 10 November 2020, the Group and Teck Ireland Limited agreed to terminate the Oldcastle agreement and dissolve the joint venture. Accordingly, the directors have impaired in full all expenditure relating to the Oldcastle licences, resulting in an impairment charge of €330,000 in the current year.

 

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 2020 was owned 23.44% (2019: 23.44%) by Limerick Zinc Limited (subsidiary of Arkle Resources plc) and 76.56% (2019: 76.56%) by Group Eleven Resources Corp (third party).

 

On 13 September 2017 t he 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.

 

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:

 

The Group's exploration activities are subject to a number of significant and potential risks including:

 

  - uncertainties over development and operational risks;

  - compliance with licence obligations;

  - liquidity risks; and

  - going concern risks;

 

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 2020 the directors are satisfied that the value of the intangible asset is not less than carrying value.

 

 

Segmental Analysis


2020

2019





Limerick

1,600,424

1,537,931

Oldcastle

-

330,000

Rest of Ireland

1,773,064

1,577,779


 

 


3,373,488

3,445,710


 

 

 

5.  Share Capital and Share Premium


2020

2019


Authorised:



500,000,000 Ordinary shares of €0.0025 each (2019: €0.01)

5,000,000

5,000,000

500,000,000 Deferred shares of €0.0075 each (2019:Nil)

 

 

 

Deferred Shares - nominal value of €0.0075



Share

Share


Number

Capital

Premium







At 22 April 2020

132,311,593

992,337

-


 

 

 

31 December 2020

132,311,593

992,337

-


 

 

 

 

 

Ordinary Shares - nominal value of €0.0025 (2019: €0.01)

Allotted, Called-Up and Fully Paid:



Share

Share


Number

Capital

Premium







At 1 January 2019

113,911,593

1,139,116

6,136,298

Issued during the financial year

18,400,000

184,000

72,892


 

 

 

At 31 December 2019

132,311,593

1,323,116

6,209,190

Transfer to deferred shares

-

(992,337)

-

Issued during the financial year

164,733,333

411,833

396,491


 

 

 

31 December 2020

297,044,926

742,612

6,605,681


 

 

 

 

Movement in shares

 

On 5 March 2019, a total of 18,400,000 shares were issued at a price of 1.25p 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 1.8p per share until 11 September 2020, refer to Note 7 below.

 

On 27 March 2020, a total of 50,400,000 shares were issued at a price of 0.5p 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 22 April 2022, refer to Note 7 below.

 

On 22 April 2020 the authorised shares of the Company were subdivided via special resolution in 500,000,000 deferred shares of 0.75 cent each and 500,000,000 ordinary shares of 0.25 cent each.

 

On 18 May 2020, a total of 33,333,333 shares were issued at a price of 0.75p per share to provide additional working capital and fund development costs. 

 

On 17 August 2020, a total of 75,000,000 shares were issued at a price of 0.8p 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 1.2p per share until 7 September 2022, refer to Note 7 below.

 

On 3 November 2020, a total of 4,000,000 shares were issued on the exercise of 4,000,000 warrants at a price of 0.5p per share to provide additional working capital and fund development costs. 

 

On 7 December 2020, a total of 2,000,000 shares were issued on the exercise of 2,000,000 warrants at a price of 0.5p per share to provide additional working capital and fund development costs.  

 

6.  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. 

 

OPTIONS

 


2020

2020

2019

2019


Options

Weighted average exercise price in pence

Options

Weighted average exercise price in pence

Outstanding at beginning of the financial year

2,800,000

2.276

2,800,000

2.276

Granted during the financial year

10,300,000

0.93

-

-

Outstanding at the end of the financial year

13,100,000

1.22

2,800,000

2.276

Exercisable at the end of the financial year

13,100,000

1.22

2,800,000

2.276






 

 

 

On 19 May 2020 a total of 9,000,000 options with an exercise price of 0.95p per option were granted to the directors with a fair value of €71,156. The fair value was calculated using the Black-Scholes valuation model.

 

The inputs into the Black-Scholes valuation model were as follows:

 

Weighted average share price at date of grant (in pence)

0.95p

Weighted average exercise price (in pence)

0.95p

Expected volatility

83.98%

Expected life

7 years

Risk free rate

0.1%

Expected dividends

none

 

 

On 16 September 2020 a total of 1,300,000 options with an exercise price of 0.80p per option were granted to individuals who have performed services for the Group with a fair value of €11,054. The fair value was calculated using the Black-Scholes valuation model.

 

The inputs into the Black-Scholes valuation model were as follows:

 

Weighted average share price at date of grant (in pence)

1.0p

Weighted average exercise price (in pence)

0.80p

Expected volatility

84.75%

Expected life

7 years

Risk free rate

0.1%

Expected dividends

none

 

Expected volatility was determined by management based on their cumulative experience of the movement in share prices over the years.

 

The terms of the options granted do not contain any market conditions within the meaning of IFRS 2.

 

The Group capitalised expenses of €39,531 and expensed costs of €42,679 relating to equity-settled share-based payment transactions during the financial year.

 

7.  Warrants

 

Fair Value




2020

2019

At 1 January

18,644

-

FV of warrants issued during the year at grant date

445,725

18,644

Movement in fair value

478,633

-

 

At 31 December

906,198

18,644




 

 

 

 

 

Number

   


2020

2020

2019

2019


Warrants

Weighted average exercise price in pence

Warrants

Weighted average exercise price in pence

Outstanding at beginning of the financial year

46,203,312

4.7

39,431,219

5.9

Granted during the financial year

125,400,000

1.4

18,400,000

1.8

Expired during the financial year

(46,203,312)

4.7

(11,627,607)

4.41

Exercised during the financial year

(6,000,000)

0.5

-

-

Outstanding and exercisable at the end of the financial year

119,400,000

1.4

46,203,312

4.7






 

On 27 March 2020 a total of 50,400,000 warrants with an exercise price of 0.5p per warrant were granted as part of the placing with a fair value of €160,396. On 31 December 2020 the fair value for the warrants were €414,200. The loss due to the movement in fair value of €253,805 was expensed to the Consolidated Statement of Comprehensive Income. The fair value was calculated using the Black-Scholes valuation model.

 

The inputs into the Black-Scholes valuation model as at 31 December 2020 were as follows:

 

Weighted average share price at 31 December 2020 (in pence)

1.18p

Weighted average exercise price (in pence)

0.50p

Expected volatility

106.185%

Expected life

1.25 years

Risk free rate

0.1%

Expected dividends

none

 

On 17 August 2020 a total of 75,000,000 warrants with an exercise price of 1.2p per warrant were granted as part of the placing with a fair value of €285,329. On 31 December 2020 the fair value for the warrants were €510,157. The loss due to the movement in fair value of €224,828 was expensed to the Consolidated Statement of Comprehensive Income. The fair value was calculated using the Black-Scholes valuation model.

 

The inputs into the Black-Scholes valuation model were as follows:

 

Weighted average share price at 31 December 2020 (in pence)

1.18p

Weighted average exercise price (in pence)

1.2p

Expected volatility

105.23%

Expected life

1.6 years

Risk free rate

0.1%

Expected dividends

none

 

 

On 8 March 2020, a total of 27,803,312 warrants at a price of 7p per warrant expired. On 11 September 2020, a total of 18,400,000 warrants at a price of 1.8p, with a fair value of €18,644 expired.

 

During November and December 2020, a total of 6,000,000 warrants with a fair value of €18,160 were exercised at a price of 0.5p per warrant.

 

8.  Post Balance Sheet Events

 

There are no material post balance sheet events affecting the Group.  

 

9.  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 2021 at 12.30pm (the "AGM").

 

We are closely monitoring the Coronavirus (COVID-19) situation. The Board takes its responsibility to safeguard the health of its shareholders, stakeholders and employees very seriously and so certain measures will be put in place for the AGM in response to the COVID-19 pandemic. Details of these measures will be provided in a letter that will be attached to the Notice of AGM.

 

General Information

 

The financial information set out above does not constitute the Company's financial statements for the year ended 31 December 2020.  The financial information for 2019 is derived from the financial statements for 2019 which have been delivered to the Companies Registration Office.  The auditors have reported on 2019 statements; their report was unqualified with an emphasis of matter in respect of considering the adequacy of the disclosures made in the financial statements concerning the valuation of intangible assets, investment in subsidiaries and amounts due by group undertakings.  The financial statements for 2020 will be delivered to the Companies Registration Office.

 

A copy of the Company's Annual Report and Accounts for 2020 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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