Interim Financial Report

RNS Number : 5889E

Artemis Resources Limited

14 March 2022

 

14 March 2022

Artemis Resources Limited

Interim Financial Report

For the six months ended 31 December 2021

The Directors of Artemis Resources Limited ("Artemis Resources" or the "Company") (ASX/AIM: ARV, FRA: ATY, US: ARTTF), an Australian-based mining exploration and development company, announce the Company's interim financial report for the half year ended 31 December 2021.

A copy of the Artemis Resources Half Year Report is also available on the Company's website at www.artemisresources.com.au .

Enquiries

For further information on the Company, please visit www.artemisresources.com.au or contact:

Artemis Resources Limited                Alastair Clayton	via Camarco
WH Ireland Limited (Nominated Adviser and Broker)  Jessica Cave / Megan Liddell (Corporate Finance) Harry Ansell / Daniel Bristowe (Corporate Broking)	Tel: [phone] Tel: [phone]
Camarco (Public Relations)    Gordon Poole / James Crothers Emily Hall / Rebecca Waterworth	Tel: [phone] Email: [e-mail]

This announcement contains inside information for the purposes of Article 7 of the UK version of Regulation (EU) No 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain .

HALF YEAR REPORT

31 December 2021

Consolidated Statement of Profit or Loss and Other Comprehensive Income

For the Half Year Ended 31 December 2021

		Consolidated
		31 December		31 December
		2021		2020
	Notes	A$		A$
Other income	3	21,629		91,017
Personnel costs		(31,706)		(20,345)
Occupancy costs		(58,522)		(10,278)
Legal fees		(27,617)		(477,633)
Consultancy costs		(187,926)		(316,658)
Compliance and regulatory expenses		(670,497)		(68,208)
Directors' fees		(290,313)		(391,049)
Travel		(2,674)		(4,147)
Borrowing costs		-		(27,922)
Project and exploration expenditure written off	6	(551,677)		(2,064,448)
Net fair value (loss)/gain on financial instruments designated as fair value through profit or loss		(138,472)		639,498
Share-based payments	11	-		(1,276,012)
Marketing expenses		(47,885)		(147,916)
Depreciation and amortisation		(67,074)		(46,215)
Interest expense				-
Unrealised foreign exchange (loss)/gain		(6,206)		2,943
Other expenses		(172,683)		(152,927)
LOSS BEFORE INCOME TAX		(2,231,623)		(4,270,300)
Income tax expense		-		-
LOSS FOR THE PERIOD		(2,231,623)		(4,270,300)
Other comprehensive income, net of tax		-		-
TOTAL COMPREHENSIVE LOSS FOR THE PERIOD		(2,231,623)		(4,270,300)
Basic loss per share - cents	4	(0.18)		(0.38)
Diluted loss per share - cents	4	(0.18)		(0.38)

The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the accompanying notes

 

Consolidated Statement of Financial Position

As at 31 December 2021

		Consolidated
		31 December				30 June
			2021				2021
	Notes		A$				A$
CURRENT ASSETS
Cash and cash equivalents			2,561,955				9,082,554
Other receivables			584,320				309,546
Assets held for sale	5		2,800,000				1,600,000
Other financial assets			1,969,569				533,542
TOTAL CURRENT ASSETS			7,915,844				11,525,642
NON-CURRENT ASSETS
Plant and equipment			118,923				90,507
Intangible assets			14,656				33,732
Exploration and evaluation expenditure	6		28,665,128				26,603,617
Development expenditure	7		26,141,749				23,473,919
TOTAL NON-CURRENT ASSETS			54,940,456				50,201,775
TOTAL ASSETS			62,856,300				61,727,417
CURRENT LIABILITIES
Trade and other payables	8		3,331,885				2,643,864
Employee benefits obligation			22,985				2,170
TOTAL CURRENT LIABILITIES			3,354,870				2,646,034
NON-CURRENT LIABILITIES
Provisions	9		4,064,793				1,413,123
TOTAL NON-CURRENT LIABILITIES			4,064,793				1,413,123
TOTAL LIABILITIES			7,419,663				4,059,157
NET ASSETS			55,436,637				57,668,260
EQUITY
Share capital	10	105,855,802				105,855,802
Reserves	11	3,376,640				3,376,640
Accumulated losses		(53,795,805)				(51,564,182)
TOTAL EQUITY		55,436,637				57,668,260

The consolidated statement of financial position should be read in conjunction with the accompanying notes

Consolidated Statement of Changes in Equity

For the Half Year Ended 31 December 2021

Consolidated	Issued Capital	Accumulated Losses	Reserves	Total Equity
	A$	A$	A$	A$
Balance at 1 July 2021	105,855,802	(51,564,182)	3,376,640	57,668,260
Other comprehensive income
Loss for the period	-	(2,231,623)	-	(2,231,623)
Other comprehensive income	-	-	-	-
Total comprehensive loss for the period	-	(2,231,623)	-	(2,231,623)
Balance at 31 December 2021	105,855,802	(53,795,805)	3,376,640	55,436,637
Consolidated	Issued Capital	Accumulated Losses	Reserves	Total Equity
	A$	A$	A$	A$
Balance at 1 July 2020	92,294,878	(42,105,810)	3,257,318	53,446,386
Loss for the period	-	(4,270,300)	-	(4,270,300)
Other comprehensive income	-	-	-	-
Total comprehensive loss for the period	-	(4,270,300)	-	(4,270,300)
Issue of capital	7,265,343	-	-	7,265,343
Cost of capital issue	(654,695)	-	-	(654,695)
Share based payments	-	-	1,276,012	1,276,012
Balance at 31 December 2020	98,905,526	(46,376,110)	4,533,330	57,062,746

The consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

Consolidated Statement of Cash Flows

For the Half Year Ended 31 December 2021

		Consolidated
		31 December 2021		31 December 2020
		A$		A$
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers		17,739		-
Payments to suppliers and employees		(1,072,289)		(1,745,768)
Interest received		686		863
Government subsidies - cash flow boost		-		74,093
NET CASH USED IN OPERATING ACTIVITIES		(1,053,864)		(1,670,812)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for exploration and evaluation		(5,169,392)		(4,857,184)
Payments for property, plant and equipment		(56,683)		-
Payments for purchase investments		(224,499)		(244,205)
Proceeds on sale of investments		-		7,328,622
Proceeds on sale of project		-		369,000
Payment for development expenditure		(16,161)		(19,847)
NET CASH PROVIDED (USED IN)/BY INVESTING ACTIVITIES		(5,466,735)		2,576,386
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares		-		5,599,475
Cost of share issue		-		(302,665)
Exercise of options		-		1,313,838
NET CASH PROVIDED BY FINANCING ACTIVITIES		-		6,610,648
Net (decrease)/increase in cash held		(6,520,599)		7,516,222
Cash at the beginning of the period		9,092,554		412,138
CASH AT THE END OF THE PERIOD		2,561,955		7,928,360

The consolidated statement of cash flows is to be read in conjunction with the accompanying notes.

Notes to the Financial Statements

1.  Statement of significant accounting policies

Basis of Preparation

The half-year financial report is a general purpose financial report prepared in accordance with the requirements of the Corporations Act 2001 and AASB 134: Interim Financial Reporting. The Group is a for profit entity for financial reporting purposes under Australian Accounting Standards.

The half-year financial report does not include notes of the type normally included in an annual financial report. The half year financial report is to be read in conjunction with the most recent annual financial report for the year ended 30 June 2021 and any public announcements made by the Group during the half-year in accordance with continuous disclosure requirements arising under the Corporations Act 2001 and the ASX Listing Rules.

The consolidated financial statements have been prepared on the basis of historical costs, except for the revaluation of certain non-current assets and financial instruments. Cost is based on the fair value of the consideration given in exchange for assets. All amounts are presented in Australian dollars, unless otherwise stated.

The financial statements are presented in Australian dollars which is Artemis Resources Limited's functional and presentation currency.

These interim financial statements were authorised for issue on 14 March 2022.

New and revised Standards and amendments thereof and Interpretations effective for the current half-year that are relevant to the Group

The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are mandatory for the current reporting period that are relevant to its operations and effective for annual reporting periods beginning on or after 1 July 2021.

Going Concern

For the half-year ended 31 December 2021 the Group recorded a loss of $2,231,623 (2020: a loss of $4,270,300) and had net cash outflows from operating activities of $1,053,864 (2020: $1,670,812).

These factors indicate a material uncertainty which may cast significant doubt as to whether the Company and Group will continue as going concerns and therefore whether they will realise their assets and extinguish their liabilities in the normal course of business and at the amounts stated in the financial report.

The Directors believe that it is reasonably foreseeable that the Company and Group will continue as going concerns and that it is appropriate to adopt the going concern basis in the preparation of the financial report after consideration of the following factors:

·The Group has cash at bank of $2,561,955, liquid investments of $1,969,569 and net assets of $55,436,637 as at 31 December 2021

Statement of significant accounting policies (continued)

·     The Company raised £5,000,000, before costs, on 7 February 2022 and listed on the London AIM on this date.

·     The Company has the ability to raise further capital to enable the Group to meet scheduled exploration expenditure requirements;

·     The Company has entered into a Binding Term sheet for the sale of its interest in the Munni Munni project, which should yield $250,000 in cash and $4,650,000 in listed securities; and

·     The Company has the ability to dispose of non-core assets and scale back certain parts of their activities that are non-essential so as to conserve cash.

Accordingly, the Directors believe that the Company and Group will be able to continue as going concerns and that it is appropriate to adopt the going concern basis in the preparation of the financial report.

Use of estimates and judgements

The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses.  Actual results may differ from these estimates.  Estimates and underlying assumptions are reviewed on an ongoing basis.  Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.

During the period the Group revised the discount rate used in the calculation of the present value of the restoration and rehabilitation provision for the Fox Radio Hill processing plant.

2.  SEGMENT INFORMATION

AASB 8 Operating Segments requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the Chief Operating Decision Maker in order to allocate resources to the segment and to assess its performance.

The Group's operating segments have been determined with reference to the monthly management accounts used by the Chief Operating Decision Maker to make decisions regarding the Group's operations and allocation of working capital. Due to the size and nature of the Group, the Board as a whole has been determined as the Chief Operating Decision Maker.

a. Description of segments

The Board has determined that the Group has two reportable segments, being mineral exploration activities and development expenditure. The Board monitors the Group based on actual versus budgeted expenditure incurred by area of interest. The internal reporting framework is the most relevant to assist the Board with making decisions regard the Group and its ongoing exploration activities.

2.  SEGMENT INFORMATION (Continued)

b. Segment information provided to the Board: 

31 December 2021	Exploration Activities
					Development		Unallocated
	Carlow Castle		Paterson		Activities Radio Hill		Corporate		Total
	$		$		$		$		$
Segment revenue	-		-		-		21,629		21,629
Segment expenses	-		-		-		(2,253,252)		(2,253,252)
Reportable segment loss	-		-		-		(2,231,623)		(2,231,623)
Reportable segment assets	14,822,043		4,567,523		26,141,749		17,324,985		62,856,300
Reportable segment liabilities	-		-		4,064,793		3,354,870		7,419,663
31 December 2020
	Exploration Activities				Development		Unallocated
	Carlow Castle		Paterson		Activities Radio Hill		Corporate		Total
	$		$		$		$		$
Segment revenue	-		-		-		91,017		91,017
Segment expenses	(2,064,448)		-		-		(2,296,869)		(4,361,317)
Reportable segment loss	(2,064,448)		-		-		(2,205,852)		(4,270,300)
Reportable segment assets	28,141,183		2,187,815		23,462,158		6,308,211		60,099,367
Reportable segment liabilities	-		-		1,413,123		1,623,498		3,036,621

3.  REVENUE

	Consolidated
	31 December 2021		31 December 2020
	$		$
Other income
Government subsidy - cash boost	-		74,093
Other income	20,943		6,116
Gain on sale of project	-		9,945
Interest received	686		863
	21,629		91,017

4.  LOSS per share

The calculation of basic loss and diluted loss per share at 31 December 2021 was based on the loss attributable to shareholders of the parent company of $2,231,623 (2020: $4,270,300):

	Consolidated
	31 December 2021		31 December 2020
	$		$
Basic loss per share	(0.18)		(0.38)
Diluted loss per share	(0.18)		(0.38)
	No of Shares		No of Shares
Weighted average number of ordinary shares:
Ordinary shares	1,254,997,651		1,114,213,871
Ordinary shares fully diluted	1,254,997,651		1,114,213,871

5.  assets held for sale

	Consolidated
	31 December 2021		30 June 2021
	$		$
Assets held for sale	2,800,000		1,600,000

The Company has entered into a binding term sheet with Alien Metals Limited (LON:UFO) (Alien) a company incorporated in the United Kingdom and listed on the London Stock Exchange (LSE) to sell Artemis' 70% joint venture interest in the Munni Munni platinum group metals project. Artemis' carrying value of the project is approximately $2.8 million.

The consideration will be $4,650,000 ordinary shares in the capital of Alien shares and $250,000 in cash. The shares will be subject to a voluntary escrow arrangement. It is expected that the transaction will be completed in early calendar year 2022.

In the prior period the Company had entered into a binding option agreement with GreenTech Metals Limited to sell GreenTech non-core tenements with carrying value of $1.6 million for cash and shares in GreenTech. The transaction was completed in the current period. 

6.  exploration and evaluation expenditure

	Consolidated
	31 December 2021		30 June 2021
	$		$
Exploration and evaluation expenditure	28,665,128		26.603,617

Exploration and Evaluation Phase Costs

Costs capitalised on areas of interest have been reviewed for impairment factors, such as resource prices, ability to meet expenditure going forward and potential resource downgrades.  It is the Directors' opinion that the Group has ownership or title to the areas of interest in respect of which it has capitalised expenditure and has reasonable expectations that its activities are ongoing.

Reconciliation of movement during the period:

	Consolidated
	31 December 2021		30 June 2021
	$		$
Opening balance	26,603,617		25,773,132
Expenditure capitalised in current period	5,413,188		10,038,567
Exploration expenditure written off	(551,677)		(7,113,105)
Carrying value of exploration sold	-		(494,977)
Transfer to assets held for sale	(2,800,000)		(1,600,000)
Closing balance	28,665,128		26,603,617

The recoverability of the carrying amount of the exploration and evaluation assets is dependent on successful development and commercial exploration, or, alternatively, sale of the respective area of interest.

7.  DEVELOPMENT EXPENDITURE

	Consolidated
	31 December 2021		30 June 2021
	$		$
Development expenditure	26,141,749		23,473,919

Reconciliation of movement during the period:

Opening balance	23,473,919		23,414,154
Additional rehabilitation provision ¹	2,651,670		-
Additions	16,160		59,765
Closing balance	26,141,749		23,473,919

¹ The increase of $2,651,670 in the provision at 31 December 2021 results from a revision in the discount rate used in the calculation of the present value of the future rehabilitation cost estimates (see Note 9).

8.  trade and other payables

	Consolidated
	31 December 2021		30 June 2021
	$		$
Trade and other payables	3,331,885		2,643,864

9.  Provisions

	Consolidated
	31 December 2021		30 June 2021
	$		$
Provision for restoration and rehabilitation	4,064,793		1,413,123

Reconciliation of movement during the period:

	Consolidated
	31 December 2021		30 June 2021
	$		$
Opening balance	1,413,123		1,413,123
Additional restoration and rehabilitation provision	2,651,670		-
Closing balance	4,064,793		1,413,123

The increase of $2,651,670 in the provision at 31 December 2021 results from a revision in the discount rate used in the calculation of the present value of the future rehabilitation cost estimates.

10.  SHARE CAPITAL

	Consolidated		Consolidated
	31 December 2021	30 June 2021	31 December 2021	30 June 2021
	No. of Shares	No. of Shares	$	$
Issued and Paid-up Capital
Ordinary shares, fully paid	1,254,997,651	1,254,997,651	105,855,802	105,855,802

Reconciliation of movement during the period:

	Shares		$
Opening balance	1,254,997,651		105,855,802
Closing balance	1,254,997,651		105,855,802

Term of Issue:

Ordinary Shares

Ordinary shares participate in dividends and are entitled to one vote per share at shareholders meetings.  In the event of winding up the Company, ordinary shareholders rank after creditors and are entitled to any proceeds of liquidation in proportion to the number of shares held.

11.  SHARE-BASED PAYMENT RESERVE

	Consolidated		Consolidated
	31 December 2021	30 June 2021	31 December 2021	30 June 2021
	No. of options/rights	No. of options/rights	$	$
Share based payments
Options	138,729,195	145,300,624	3,376,640	3,376,640
Performance rights	6,000,000	-	- ¹	-

¹ The performance rights were granted on 30 December 2021. As the share based payment expense for the two day period to 31 December 2021 is not material it has not been recorded.

The unlisted options issued during the half year were valued using the Black-Scholes model. The options outstanding as at 31 December 2021 were determined on the date of grant using the following assumptions:

	Series 5	Series 6	Series 7
Grant date	31/7/2019	22/07/2019	01/05/2020
Exercise price ($)	0.08	0.08	0.04
Expected volatility (%)	100	100	100
Risk-free interest rate (%)	1.13	0.935	0.63
Expected life (years)	3	3	3
Share price at this date ($)	0.036	0.029	0.031
Fair value per option ($)	0.0165	0.0121	0.0181
Number of options	13,729,195	10,000,000	1,000,000

	Class A Director	Class B Director	Class A Broker	Class B Broker
Grant date	30/04/2020	30/04/2020	01/05/2020	01/05/2020
Exercise price ($)	0.05	0.07	0.05	0.07
Expected volatility (%)	89	103	89	103
Risk-free interest rate (%)	0.64	0.63	0.64	0.63
Expected life (years)	2.4	2.9	2.2	3.2
Share price at this date ($)	0.032	0.032	0.031	0.031
Fair value per option ($)	0.01301	0.01507	0.0117	0.0154
Number of options	43,500,000	43,500,000	7,500,000	7,500,000

	Class E Director	Class F Director	Class G Director
Grant date	2/12/2020	2/12/2020	20/12/2021
Exercise price ($)	0.18	0.25	0.15
Expected volatility (%)	93	93	95
Risk-free interest rate (%)	0.142	0.142	0.391
Expected life (years)	3	5	3
Share price at this date ($)	0.15	0.15	0.086
Fair value per option ($)	0.08123	0.07053	0.0408
Number of options	5,000,000	5,000,000	2,000,000

The Company issued 2,000,000 Class G director options on 20 December 2021. As the share-based payment expense for this issue was not material it was not recorded. As a result, for the half-year ended 31 December 2021, the Group has recognised $Nil of share-based payment expense (2020: $1,276,012).

Performance Rights

On the 30 December 2021 the Company issued 6 million performance rights to employees and consultants of the Company.

The hurdles for the performance rights, which have a performance end date of 31 December 2021 are as follows:

1.  3,000,000 performance rights to vest on the share price achieving a 30 day VWAP in period of $0.025 (tranche 1 rights);

2.  3,000,000 performance rights to vest on Carlow Castle mineral resource reaching 1.0m oz Au equivalent (tranche 2 rights).

The performance rights were valued by 22 Corporate using a Monte Carlo Simulation Methodology (MCSM), using an underlying share price of $0.081 a term of 1.003 years, a risk free rate of 0.279% and a volatility of 90%.

On this basis the tranche 1 rights have been valued at $0.0204 per right and tranche 2 rights have been valued at $0.081 per right. The total value of the tranche 1 performance rights of $61,200 will be expensed over the performance period.

No vesting expense has been recorded for tranche 2 rights as at balance date it is seen as unlikely that these rights will vest.

12.  FINANCIAL INSTRUMENTS

The Directors consider that the carrying amounts of financial instruments are a reasonable approximation of their fair values.

13.  commitments, contingent liabilities and contingent assets

There are no contingent liabilities or contingent assets since the last annual reporting period.

14.  Events subsequent to 31 december 2020

On the 7 February 2022, the Company issued 133,333,333 shares at £0.0375 per share, raising £5,000,000 before costs. The Company also dual listed on the London AIM exchange on this date.

Mr Guy Robertson was appointed a director on 17 January 2022.

Other than as outlined above there are no events subsequent to the end of the period that would have a material effect on the Group's financial statements at 31 December 2021.  

15.  RELATED PARTY TRANSACTIONS

On 20 December 2021 the Group issued Dr. Simon Dominy (Non-Executive Director) with 2,000,000 class G Options. As the share-based payment expense for the period was not material it was not recorded.

Refer to Note 11 for further details on these share-based payment arrangements.

 

END

 

 

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