Half-year Report

RNS Number : 8519P

Blencowe Resources PLC

23 June 2022

 

Date: 23 June 2022

Blencowe Resources Plc

("Blencowe" or the "Company")

Interim Consolidated Financial Statements

for the six month period ended 31 March 2022

The Company is pleased to announce its Interim Results for the six-month period to 31 March 2022.

Electronic copies of the report will be available at the Company's website www.blencoweresourcesplc.com

For further information please contact:

Blencowe Resources Sam Quinn	www.blencoweresourcesplc.com Tel: [phone] [e-mail]
Investor Enquiries Sasha Sethi	Tel: [phone] [e-mail]
Tavira Securities Limited Jonathan Evans	Tel: [phone] [e-mail]
First Equity Limited Jason Robertson	Tel: [phone] [e-mail]

Interim Management Report

The past six months (and subsequent events to 31 March 2022) have seen excellent progress at the Orom-Cross graphite project, and the Company's profile in Uganda as a whole.

An internally generated Preliminary Economic Assessment ("PEA") was delivered in October 2021 which highlighted a low cost, high margin mining operation with strong Net Present Value and other key performance indicators.  This PEA will be augmented by a Pre-Feasibility Study ("PFS") which is due mid-2022.

An extensive second diamond drilling programme at Orom-Cross in 2H 2021 delivered an updated JORC Standard Mineral Resource of 24.5Mt at 6.0% graphite, which was a 50% increment to the maiden JORC Resource delivered in 2021.  Furthermore, the high quantum of Indicated and Measured Resources within this total means that Blencowe has enough graphite for first 20 years life of mine, to be included within the PFS.  All necessary resource definition drilling for first production is now completed.

The Company has been working continuously with graphite technical experts SGS Lakeside in Canada to complete metallurgical test work showing what quality of concentrate may be delivered at Orom-Cross and results for this work have been outstanding.  The 96-97% LOI concentrate will be a premium grade product, and the specific attributes within this should ensure the end products are attractive to a wide range of end users.  Technical Data Sheets are being prepared right now to send to prospective end users across various industry sectors to gauge their initial interest for various Orom-Cross products.

During the period Blencowe engaged leading Sustainability consultants ERM to undergo a first stage program of working with the Company to ensure that Orom-Cross delivers strong ESG (environmental, social and governance) and sustainability credentials.  This is seen as a very important aspect moving forward and the Company is particularly keen to get this right from the start, to deliver as green an end product from as life cycle sustainable a project as possible.  Significant progress has already been made but this is an ongoing exercise that will continue forward as the project moves towards first production in 2023.

In 1Q 2022 the Company announced an earn-in agreement to complement the Orom-Cross graphite project with the highly prospective Akelikongo nickel project, also located in northern Uganda.  This is a synergistic exploration project located approximately 150kms from Orom-Cross that previous owners SIPA Resources and Rio Tinto had spent US$15 million on early stage development, including 19,000m of drilling.  There is already an 800m mineralised zone with both disseminated and massive nickel sulphides and Blencowe will look to add value to Akelikongo via extending this mineralised zone.  An airborne electromagnetic survey is underway to locate additional drill targets and, if successful, these will be drilled in 2H 2022.  Nickel is another key battery metal with forecast future high demand, similar to graphite.  Both projects will be managed via the same in-country team within Uganda.

Finally, in April 2022 Blencowe announced the first significant institutional investor on the register, with highly recognised and sought-after mining and resources fund RAB Capital taking a 10% stake in the Company by investing a further £800,000.  Their support is appreciated and Blencowe hopes for further market recognition once the PFS is delivered and the market is better able to appreciate the value within the Company's emerging portfolio of resource assets.

Despite Covid and the challenges this has presented, particularly to travel, the Company has made substantial progress in this period and will continue to do so ahead as further milestones are delivered.

Mike Ralston

Chief Executive Officer

Responsibility Statement of the Directors in respect of the Interim Report

The Directors are responsible for preparing the Interim Financial Statements in accordance with applicable law and regulations. In addition, the Directors have elected to prepare the Interim Financial Statements in accordance with International Financial Reporting Standards ("IFRSs"), as adopted by the United Kingdom ("UK").

The Interim Financial Statements are required to give a true and fair view of the state of affairs of the Group and of the profit or loss of the Group for that period.

In preparing these Interim Financial Statements, the Directors are required to:

· select suitable accounting policies and then apply them consistently;

· present information and make judgements that are reasonable, prudent and provides relevant, comparable and understandable information;

· provide additional disclosures when compliance with the specific requirements in IFRS is insufficient to enable users to understand the impact of particulars transactions, other events and conditions on the entity's financial position and financial performance; and

· make an assessment of the Group's ability to continue as a going concern.

The Directors are responsible for keeping proper accounting records that are sufficient to show and explain the Group's transactions and disclose with reasonable accuracy at any time its financial position of the Group to enable them ensure that the financial statements comply with the requirements of the Companies Act 2006. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the corporate and Interim Financial Statements.  Legislation governing the preparation and dissemination of Interim Financial Statements may differ from one jurisdiction to another.

We confirm that to the best of our knowledge:

· the Interim Financial Statements, prepared in accordance with International Financial Reporting Standards as adopted by the UK, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group for the period;

· the Director's report includes a fair review of the development and performance of the business and the position of the group, together with a description of the principal risks and uncertainties that they face; and

· the annual report and financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the group's performance, business model and strategy.

Consolidated Statement of Comprehensive Income  for the six month period ended 31 March 2022

		6 months ended 31 Mar 2022	6 months ended 31 Mar 2021	12 months ended 30 Sep 2021
		(Unaudited)	(Unaudited)	(Audited)
	Notes	GBP	GBP	GBP
Exploration costs		(2,744)	(1,999)	(11,690)
Administrative fees and other expenses	5	(331,617)	(304,238)	(815,415)
Adjustments to Liability to Land Owners		-	-	117,639
Operating loss		(334,361)	(306,237)	(649,466)
Finance costs		(21,974)	(23,444)	(45,260)
Loss before tax		(356,336)	(629,681)	(694,726)
Income tax		-	-	-
Loss after tax		(356,336)	(329,681)	(694,726)
Other comprehensive income
Exchange differences on translation of foreign operation		(2,061)	-	3,662
Other comprehensive income, net of tax		(2,061)	-	3,662
Total comprehensive loss		(358,397)	(329,681)	(691,064)
Basic and diluted loss per share (pence)	9	(0.27)	(0.01)	(0.61)

There was no other comprehensive income for the period ended on 31 March 2022.

Consolidated Statement of Financial Position as at 31 March 2022

		As at 31 Mar 2022	As at 31 Mar 2021	As at 30 Sept 2021
		(Unaudited)	(Unaudited)	(Audited)
	Notes	GBP	GBP	GBP
Non-Current Assets		5,815,114	4,390,956	5,296,289
Current assets
Trade and other receivables	6	248,413	84,717	52,580
Cash and cash equivalents		968,693	611,231	93,288
Total current assets		1,217,106	695,948	145,868
Total assets		7,032,220	5,086,904	5,442,157
Current liabilities
Creditors: Amounts falling due within one year		282,217	377,415	280,071
Total current liabilities		282,217	377,415	280,071
Non-current liabilities
Surface liabilities		924,359	764,494	887,560
Total liabilities		1,206,576	1,141,909	1,167,631
Net assets		5,825,644	3,944,995	4,274,526
Equity
Share capital		1,101,316	878,258	901,316
Share premium		6,841,596	4,884,146	5,132,081
Warrants reserves		317,876	164,601	317,876
Translation reserve		1,601	-	3,662
Retained earnings		(2,436,745)	(1,982,010)	(2,080,409)
Total equity		5,825,644	3,944,995	4,274,526

Consolidated Statement of Changes in Equity for the six month period ended 31 March 2022

	Share capital	Share premium	Share option reserves	Retained earnings	Translation reserve	Total equity
	GBP	GBP	GBP	GBP	GBP	GBP
Balance as at 30 Sep 2020	783,333	3,876,650	100,471	(1,453,551)	-	3,306,903
Total comprehensive loss for 6 months
Loss for the period	-	-	-	(329,681)	-	(329,681)
Total comprehensive loss	-	-	-	(329,681)	-	(329,681)
Contributions from equity holders
New shares issued	94,925	1,093,992	-	-	-	1,188,917
Share issue costs	-	(86,496)	-	-	-	(86,496)
Issue of warrants	-	-	77,194	-	-	77,194
Warrants exercised	-	-	(13,064)	13,064	-	-
Total contributions from equity holders	94,925	1,007,496	64,130	13,064	-	1,178,615
Balance as at 31 Mar 2021	878,258	4,884,146	164,601	(1,770,168)	-	4,156,837
Total comprehensive loss for 6 months
Loss for the period	-	-	-	(365,045)	-	(365,045)
Total comprehensive loss	-	-	-	(365,045)	-	(365,045)
Contributions from equity holders
New shares issued	23,058	250,308	-	-	-	273,366
Share issue costs	-	(2,373)	-	-	-	(2,373)
Issue of warrants	-	-	208,079	-	-	208,079
Warrants exercised			(54,804)	54,804	-	-
Exchange differences on translation of foreign operations	-	-	-	-	3,662	3,662
Total contributions from equity holders	23,058	247,935	153,275	54,804	3,662	482,734
Balance as at 30 Sep 2021	901,316	5,132,081	317,876	(2,080,409)	3,662	4,274,526
Total comprehensive loss for 6 months
Loss for the period	-	-	-	(356,336)	-	(356,336)
Total comprehensive loss	-	-	-	(356,336)	-	(356,336)
Contributions from equity holders
New shares issued	200,000	1,800,000	-	-	-	2,000,000
Share issued costs	-	(90,485)	-	-	-	(90,485)
Exchange differences on translation of foreign operations	-	-	-	-	(2,061)	(2,061)
Total contributions from equity holders	200,000	1,709,515	-	-	(2,061)	1,907,454
Balance as at 31 Mar 2022	1,101,316	6,841,596	317,876	(2,436,745)	1,601	5,825,644

Consolidated Statement of Cash Flows for the six month period ended 31 March 2022

		As at 31 Mar 2022	As at 31 Mar 2021	As at 30 Sept 2020
		(Unaudited)	(Unaudited)	(Audited)
	Notes	GBP	GBP	GBP
Operating activities
Loss after tax	5	(356,336)	(329,681)	(694,726)
Amortisation		-	1,349	-
Finance costs		21,974	23,444	45,260
Adjustment to Surface Liability		-	-	(177,639)
Share issue/warrant cost		-	64,130	285,273
Unrealised currency translation		(61,217)	-	55,785
Changes in working capital
Decrease/(increase) in trade and other receivables		(195,833)	(12,697)	19,441
Increase/(decrease) in trade and other payables		38,945	(229,635)	(9,494)
Net cash flows from operating activities		(552,467)	(483,090)	(476,100)
Cash flows from financing activities
Investment in exploration assets		(481,643)	(213,956)	(976,084)
Net cash flows from investment activities		(481,643)	(213,956)	(976,084)
Financing activities
Shares issued		2,000,000	1,188,917	-33,798
Shares issued (cost)		(90,485)	(86,496)	1,373,414
Net cash flows from financing activities		1,909,515	1,102,421	1,339,616
Increase in cash and short-term deposits		875,404	405,375	(112,568)
Cash and short-term deposits brought forward		93,288	205,856	205,856
Cash and cash equivalents at end of period		968,692	611,231	93,288

Notes to the Financial Statements for the six month period ended 31 March 2022

1.  General

Blencowe Resources Plc (the "Company") is a public limited company incorporated and registered in England and Wales on 18 September 2017 with registered company number 10966847 and its registered office situated in England and Wales at 25 Bilton Road, Rugby, CV22 7AG.

The Group did not earn any trading income during the period under review but incurred expenditure in developing its principal assets.

The Consolidated Interim Financial Statements of the Company for the six month period ended 31 March 2022 comprise the financial statements of the Company and its subsidiaries (together referred to as the "Group").

2.  Accounting Policies

Basis of preparation

The Interim Financial Statements of the Group are unaudited condensed financial statements for the 6 month period ended 31 March 2022.

The accounting policies applied by the Group in these Interim Financial Statements, are the same as those applied by the Group in its consolidated financial statements, and have been prepared on the basis of the accounting policies applied for the financial year to 30 September 2021 which have been prepared in accordance with IFRS as adopted by UK for. The Group Financial Statements have been prepared using the measurement bases specified by IFRS each type of asset, liability, income and expense.

The Group Financial Statements are presented in £, which is the Group's functional currency. All amounts have been rounded to the nearest pound, unless otherwise stated.

Comparative figures

The comparative figures have been presented as the Group Financial Statements cover the 6 month period ended 31 March 2021 and the 12 month period ended 30 September 2021.

3.  Critical accounting estimates and judgments

In preparing the Group 's Interim Financial Statements, the Directors have to make judgments on how to apply the Group's accounting policies and make estimates about the future. The Directors do not consider there to be any critical judgments that have been made in arriving at the amounts recognised in the Group Financial Statements.

4.  Significant accounting policies

The accounting policies adopted are consistent with those followed in the preparation of the annual financial statements of Blencowe Resources Plc for the year ended 30 September 2021.  A copy of these financial statements is available on the Group website at https://blencoweresourcesplc.com/

5.  Administrative fee and other expenses

	6 months ended  31 Mar 2022	6 months ended 31 Mar 2021	12 Months ended 30 Sep 2021
	(Unaudited)	(Unaudited)	(Audited)
	GBP	GBP	GBP
Directors' remuneration	70,046	68,741	138,787
Professional fees	130,655	47,627	100,256
Salaries	60,000	18,000	58,000
Listing fees	19,783	19,593	42,535
Audit fees	4,375	12,500	25,000
Share issue/warrant cost	-	77,194	285,273
Administration fees	23,500	28,500	52,000
Broker fees	29,542	3,244	48,990
Travelling expenses	-	971	1,529
Miscellaneous fees	(6,284)	27,868	63,045
Total	331,617	304,238	815,415

The Group did not employ any staff during the period other than Directors. The Directors are the only members of key management and their remuneration related solely to short term employee benefits.

6.  Trade and other receivables

	6 months ended  31 Mar 2022	6 months ended 31 Mar 2021	12 Months ended 30 Sep 2021
	(Unaudited)	(Unaudited)	(Audited)
	GBP	GBP	GBP
Other receivables	37,997	22,002	8,752
Prepayments	210,416	62,715	43,828
Total	248,413	84,717	52,580

7.  Creditors: Amounts falling due within one year

	6 months ended  31 Mar 2022	6 months ended 31 Mar 2021	12 Months ended 30 Sep 2022
	(Unaudited)	(Unaudited)	(Audited)
	GBP	GBP	GBP
Payables	268,067	131,138	238,614
Land Owners Liability	-	233,049	-
Accruals and provision	14,150	13,228	41,457
Total	282,217	377,415	280,071

8.  Creditors: Amounts falling after one year

CARU, the Company's subsidiary entered into an agreement for surface rights over the land in the mineral area of the licence. The land owners granted CARU a 49 year lease over an area. The liability to the land owners is to be paid in 10 instalments on a section basis as the project progresses. The progress on each section is not limited to any time frames and is at the Group's discretion.

	6 months ended  31 Mar 2022	6 months ended 31 Mar 2021	12 Months ended 30 Sep 2021
	(Unaudited)	(Unaudited)	(Audited)
	GBP	GBP	GBP
Total payable at the beginning of the period	887,560	1,024,737	1,024,737
Change in estimate	-	-	(177,639)
Interest charged during the period	21,975	22,685	45,260
Exchange loss on valuation	14,825	(49,879)	(4,798)
Total payable as at period end	924,359	997,543	887,560
Analysis between current and non-current liability
Payable within 12 months	-	-	-
Payable after 12 months	924,359	997,543	887,560
	924,359	997,543	887,560

The value of the lease is measured at the present value of the contractual payments due to the lessor

over the lease term, with the discount rate of 5%.

9.  Loss per share

The calculation of the basic and diluted loss per share is based on the following data:

	6 months ended  31 Mar 2022	6 months ended 31 Mar 2021	12 Months ended 30 Sep 2021
	(Unaudited)	(Unaudited)	(Audited)
Earnings	GBP	GBP	GBP
Loss from continuing operations for the period attributable to the equity holders of the Group	(353,336)	(329,681)	(694,726)
Number of shares
Weighted average number of Ordinary Shares for the purpose of basic and diluted earnings per share
	133,655,997	98,345,650	114,070,173
Basic and diluted loss per share (pence)	(0.27)	(0.34)	(0.61)

There are no potentially dilutive shares in issue.

10. Related party transactions

The are no related party transactions during the period except for the Directors' remuneration, which have been disclosed in note 5.

Sam Quinn is a director and shareholder of the Company and a Director of Lionshead Consultants Limited.  During the period, Lionshead Consultants Limited charged fees for consultancy fees of £26,400 (31 March 2021: £12,000 and 30 Sep 2021: £24,000).

11. Events after the reporting date

On 16 April 2022, the Company issued 16,000,000 new ordinary shares of 0.06p at a price of 5p per new ordinary share. In addition, the holder of these share will receive 1 warrant per 2 placing shares, exercisable at 8p for 3 years from admission.

 

END

 

 

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