Interim Results for the period ended 30 June 2024

Clontarf Energy PLC

16 September 2024

 

16^th September 2024

Clontarf Energy plc

("Clontarf" or the "Company")

Interim Statement for the period ended 30 June 2024

Clontarf Energy plc (AIM: CLON), the energy company focused on clean Bolivian Lithium brines, as well as petroleum in Australia and Africa, announces its unaudited financial results for the six months ended 30 June 2024:

Industry and Company Highlights

•    Bolivia commits itself to accelerating its battery-grade Lithium exports, with senior Government personnel changes announced, early contract negotiations and reform of the Lithium Law.

•    The EU is building a 'Team Europe' approach, passing a Critical Resource Minerals Act, and deploying circa €4 billion from the Global Gateway fund.

•    Our JV partner is completing its pilot-plant at a trusted site near Mumbai, India.  Initial testing of samples is encouraging.

•    The Bolivian authorities have verbally agreed to bulk samples, to be collected and despatched with the assistance of state owned Yacimientos de Litio Boliviano (YLB) once formal negotiations are underway.

•    Initial negotiations and due diligence are underway between YLB and 'Stream 1' companies that claim to operate existing Direct Lithium Extraction (DLE) plants.

•    'Stream 2' companies, with DLE technology close to production, are expected to be invited for negotiations shortly.  Clontarf has been assigned to 'Stream 2' and its negotiators are already in Bolivia.

•    Royalty increases through timely reform of the Lithium Law shows local communities how they will benefit from the coming Lithium boom.

•    Strong interest in long-term offtake contracts for reliable, high purity clean Lithium from brines - at higher than current spot prices.

Chairman's Statement

Recent months have witnessed accelerated work on Clontarf's key projects on several fronts - though information flow is constrained by regulatory permissions and commercial sensitivity.

Attitudes and management of Critical Resource Minerals are being transformed worldwide, as players grasp the scale and importance of securing adequate supplies of clean materials.  There are inadequate fresh projects to deliver the anticipated demand.

Offtakers worldwide are now keenly aware of the need to secure reliable, clean, as well as competitive materials.  It is hard to express how procurement attitudes have changed since 2000 - prompted by a successful Chinese industrial policy, which Europe and the USA are now forced to counter.

We think of Washington and Brussels as slow-moving behemoths, but the fast adoption and funding of the USA's Inflation Reduction Act, and the EU Commission's Critical Resource Minerals Act, shows how fast policy-makers can move when realisation of vulnerability dawns.  The EU Commission has pulled together a "Team Europe" of explorers, miners, processors and financiers to deliver some measure of materials diversity. 

The EU Commission's 'dream-team' focuses on practical steps necessary to reduce dependence on mining and processing in potentially hostile regions.  Included are financiers, refiners, chemical production experts, state and EU players, as well as explorers and developers.  Operators like Clontarf are key to achieving these objectives.

Though the EU was initially slow to react to Chinese, Japanese, and latterly US legislation, the EU is free of post-imperial baggage, which has proven an awkward legacy in Latin America.  Past US interventions, and the 1832 Monroe Doctrine cast a long shadow, and independently-minded countries are sensitive to the appearance of over-dependence on one, albeit large market.  This - together with ready Chinese money and lesser governance standards - explains the periodic flirtation of many rival countries with Russia and China.

Clontarf avoids such complications because its team has worked continuously in different industries in many parts of Bolivia since 1986.  We have become part of the furniture and can be helpful to different governments as an objective window on the world.  We have dealt fruitfully with indigenous communities - in the Bolivian highlands and elsewhere - for decades.  This was an important attraction for the EU institutions, as well as large commercial partners and offtakers.

Simultaneously, Bolivia has committed itself to becoming a key supplier to all key markets.  This requires urgent de-bottlenecking of licensing, clearer legal title, financing arrangements and high-throughput production of battery-grade Lithium salts.  For example, Clontarf saw how EU Global Gateway funds can provide 20-year money at circa 3% interest for state-allocated infrastructure projects to support new operations in fresh regions.  This effectively funds two-thirds of total capex, while meeting EU controls and respecting Bolivian sovereignty.

Clontarf has sourced the 320 IBCs (Intermediate Bulk Containers), to ship the bulk samples to Mumbai.

We originally planned to deploy a pilot-plant to one or more Bolivian salares during summer 2024.  Because of logistics and weather issues, the Bolivian authorities opted for the operating companies to remain in their original plant location, until YLB could conduct due diligence visits.

The Clontarf Energy JV has submitted a proposed action plan for the coming months and years, subject to Bolivian rules and laws. We plan to collect samples from at least 2 salares; ideally one of high Lithium grade and one with both Lithium and Magnesium content. If we collect the samples during October 2024, they can be trucked to the nearest sea-port and shipped to our partners' Mumbai plant for January 2025 delivery.  Clontarf Energy will meanwhile have completed the necessary Indian paperwork with our partners.

On arrival at our partners' plant, the Bolivian bulk samples will be expedited through the production process.  We request a total of 320 tonnes since we plan to optimize recovery and throughput not just for Lithium, but also for Magnesium and other economic minerals.

This production process testing of the bulk samples and, hopefully including a YLB visit may be completed during February / March 2025.

Assuming positive results, we propose agreement negotiations as soon as appropriate.

Clontarf Energy is hoping to deploy a pilot plant (at a scale of 500 tonnes / year) to a Bolivian site for arrival by mid-2025 (i.e. 6 to 7 months after arrival of the bulk samples at the Indian plant), after which it will be promptly commissioned, connected to power and brine sources, under applicable laws and start work.

Longer-term, Clontarf Energy plans to deploy an additional production plant to a total of 5 separate salares, adding a new plant every 6 months.  Our plant size will accord with any restrictions under law, initially at a scale of 500 tonnes / year.

But our long-term aim is to produce 150,000 tonnes of LCE by 2030.

Funding

Subject to technical verification of its exploration projects, and permitting, Clontarf is confident of sourcing adequate funding, whether in London or Australia, for near to medium term ongoing activities.

We seek to minimise political and geological risks.

Projected offtaker demand for clean high-purity Lithium cannot be met without Bolivian supplies.  Fortune favours the brave.  The immediate future seems bright.

David Horgan

Chairman

13 September 2024

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014.

ENDS

For further information please visit http://clontarfenergy.com or contact:

Clontarf Energy David Horgan, Chairman Jim Finn, Director	[phone]
Nominated & Financial Adviser Strand Hanson Limited Rory Murphy Ritchie Balmer David Asquith	[phone]
Broker Novum Securities Limited Colin Rowbury	[phone]
Public Relations BlytheRay Megan Ray	[phone]
Teneo Luke Hogg Alan Tyrrell Fia Long Alan Reynolds	[phone]

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
	Six Months Ended		Year Ended
	30 June 24	30 June 23	31 Dec 23
	unaudited	unaudited	audited
	£'000	£'000	£'000
Administrative expenses	(334)	(288)	(696)
Impairment of exploration and evaluation assets	(69)	-	(174)
LOSS BEFORE TAXATION	(403)	(288)	(870)
Income Tax	-	-	-
COMPREHENSIVE INCOME FOR THE PERIOD	(403)	(288)	(870)
LOSS PER SHARE - basic and diluted	(0.01p)	(0.01p)	(0.02p)

CONDENSED CONSOLIDATED BALANCE SHEET				30 June 24		30 June 23		31 Dec 23
				unaudited		unaudited		audited
				£'000		£'000		£'000
ASSETS:
NON-CURRENT ASSETS
Intangible assets				625		868		694
Investment in Joint Venture				888		888		888
				1,513		1,756		1,582
CURRENT ASSETS
Other receivables				-		-		-
Cash and cash equivalents				601		381		182
				601		381		182
TOTAL ASSETS				2,114		2,137		1,764
LIABILITIES:
CURRENT LIABILITIES
Trade and other liabilities				(1,439)		(1,512)		(1,460)
				(1,439)		(1,512)		(1,460)
TOTAL LIABILITIES				(1,439)		(1,512)		(1,460)
NET ASSETS				675		625		304
EQUITY
Called-up share capital				6,409		6,209		6,209
Share premium				13,195		12,737		12,737
Share based payment reserve				731		354		615
Retained deficit				(19,660)		(18,675)		(19,257)
TOTAL EQUITY				675		625		304
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
	Called-up		Share based
	Share	Share	Payment		Retained
	Capital	Premium	Reserves		Deficit		Total
	£'000	£'000	£'000		£'000		£'000
As at 1 January 2023	5,927	10,985	248		(18,387)		(1,227)
Shares issued	282	1,849					2,131
Share issue expenses	-	(97)	-		-		(97)
Share based payment charge	-	-	106		-		106
Total comprehensive income					(288)		(288)
As at 30 June 2023	6,209	12,737	354		(18,675)		625
Share based payment charge	-	-	261		-		261
Total comprehensive income			-		(582)		(582)
As at 31 December 2023	6,209	12,737	615		(19,257)		304
Shares issued	200	500					700
Share issue expenses	-	(42)	-		-		(42)
Share based payment charge	-	-	116		-		116
Total comprehensive income	-	-	-		(403)		(403)
As at 30 June 2024	6,409	13,195	731		(19,660)		675

CONDENSED CONSOLIDATED CASH FLOW	Six Months Ended		Year Ended
	30 June 24	30 June 23	31 Dec 23
	unaudited	unaudited	audited
	£'000	£'000	£'000
CASH FLOW USED IN OPERATING ACTIVITIES
Loss for the period	(403)	(288)	(870)
Impairment of exploration and evaluation assets	69	-	174
Share based payment charge	116	106	367
Exchange movements	1	2	(8)
	(217)	(180)	(337)
Decrease in trade and other payables	(21)	(1,516)	(1,568)
CASH USED BY OPERATIONS	(238)	(1,696)	(1,905)
NET CASH USED IN OPERATING ACTIVITIES	(238)	(1,696)	(1,905)
CASH FLOWS USED IN INVESTING ACTIVITIES
Payments for intangible assets	-	(406)	(406)
NET CASH USED IN INVESTING ACTIVITIES	-	(406)	(406)
CASH FLOW FROM FINANCING ACTIVITIES
Issue of shares	700	1,650	1,650
Share issue expenses	(42)	(97)	(97)
NET CASH GENERATED FROM FINANCING ACTIVITIES	658	1,553	1,553
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS	420	(549)	(758)
Cash and cash equivalents at beginning of the period	182	932	932
Exchange variance on cash and cash equivalents	(1)	(2)	8
CASH AND CASH EQUIVALENT AT THE END OF THE PERIOD	601	381	182

Notes:

1.    INFORMATION

The financial information for the six months ended 30 June 2024 and the comparative amounts for the six months ended 30 June 2023 are unaudited. The financial information above does not constitute full statutory accounts within the meaning of section 434 of the Companies Act 2006.

The Interim Financial Report has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the U.K. The accounting policies and methods of computation used in the preparation of the Interim Financial Report are consistent with those used in the Group 2023 Annual Report, which is available at www.clontarfenergy.com

The interim financial statements have not been audited or reviewed by the auditors of the Group pursuant to the Auditing Practices board guidance on Review of Interim Financial Information.

2.    DIVIDEND

No dividend is proposed in respect of the period.

3.    GOING CONCERN

The Group incurred a loss for the period of £403,233 (2023: loss of £870,061) and had net current liabilities of £837,583 (2023: £1,277,374) at the balance sheet date. These conditions, as well as those noted below, represent a material uncertainty that may cast doubt on the Group's ability to continue as a going concern. Included in current liabilities is an amount of £910,082 (2023: £988,926) owed to directors in respect of directors' remuneration due at the balance sheet date.

The Group had a cash balance of £600,757 (2023: £182,516) at the balance sheet date. The directors have prepared cashflow projections for a period of at least 12 months from the date of approval of the financial statements which indicate that the group may require additional finance to fund working capital requirements and develop existing projects. As the Group is not revenue or cash generating it relies on raising capital from the public market.

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 the adjustments that would result if the Group and Company were unable to continue as a going concern

4.    LOSS PER SHARE

Basic loss per share is computed by dividing the loss after taxation for the year attributable to ordinary shareholders by the weighted average number of ordinary shares in issue and ranking for dividend during the year. Diluted earnings per share is computed by dividing the loss after taxation for the year by the weighted average number of ordinary shares in issue, adjusted for the effect of all dilutive potential ordinary shares that were outstanding during the year.

The following table sets out the computation for basic and diluted earnings per share ("EPS"):

	Six Months Ended		Year Ended
	30 June 24	30 June 23	31 Dec 23
	£'000	£'000	£'000
Loss for the year attributable to equity holders	(403)	(288)	(870)
Denominator	Number	Number	Number
For basic and diluted EPS	6,025,351,235	4,385,660,371	4,791,613,788
Basic and diluted EPS	(0.01p)	(0.01p)	(0.02p)

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

5.    INTANGIBLE ASSETS

	30 June 24	30 June 23	31 Dec 23
	£'000	£'000	£'000
Exploration and evaluation assets
Cost:
At 1 January	12,735	12,735	12,735
Additions	-	-	-
Closing Balance	12,735	12,735	12,735
Impairment:
At 1 January	12,041	11,867	11,867
Provision for impairment	69	-	174
Closing Balance	12,110	11,867	12,041
Carrying value:
At 1 January	694	868	868
At period end	625	868	694

Exploration and evaluation assets relate to expenditure incurred in prospecting and exploration for lithium, oil and gas in Bolivia and Ghana. The directors are aware that by its nature there is an inherent uncertainty in exploration and evaluation assets and therefore inherent uncertainty in relation to the carrying value of capitalised exploration and evaluation assets.

During 2018 the Group resolved the outstanding issues with the Ghana National Petroleum Company (GNPC) regarding a contract for the development of the Tano 2A Block. The Group has signed a Petroleum Agreement in relation to the block and this agreement awaits ratification by the Ghanian government.

As ratification had not yet been achieved in the prior year the directors, as a matter of prudence, opted to write down 20% of the carrying value of the Tano 2A Block historic expenditure.  Accordingly, an impairment charge of £173,609 was recorded in the prior year.  In the current period the directors impaired a further £69,442 of the historical costs.

The directors believe that there were no facts or circumstances indicating that the carrying value of the remaining intangible assets may exceed their recoverable amount and thus no additional impairment review was deemed necessary by the directors. The realisation of these intangibles assets is dependent on the successful discovery and development of economic deposit resources and the ability of the Group to raise sufficient finance to develop the projects. It is subject to a number of potential significant risks, as set out below.

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

·        licence obligations;

·        exchange rate risks;

·        uncertainties over development and operational costs;

·        political and legal risks, including agreements with Governments for licences, profit sharing and taxation;

·        foreign investment risks including increases in taxes, royalties and renegotiation of contracts;

·        title to assets;

·        financial risk management;

·        going concern; and

·        ability to raise finance.

6.    INVESTMENT IN JOINT VENTURE

	30 June 24	30 June 23	31 Dec 23
	£'000	£'000	£'000
Cost:
At 1 January	888	-	-
Additions	-	888	888
Closing Balance	888	888	888
Carrying value:
At period end	888	888	888

On 15 February 2023 the Group announced a heads of agreement around the potential formation of a 50:50 Joint Venture with US based, OTC Markets traded, technology company, NEXT-ChemX Corporation ("NCX") covering testing, marketing, and deploying of NCX's proprietary (patent pending) Direct Lithium Extraction ("DLE") technology in Bolivia. Formation of the JV was subject to final due diligence and the parties entering into formal documentation.

The terms of the JV are:

§  A 50:50 joint venture company to be formed on completion of due diligence covering the exclusive rights to the marketing, testing and deployment of the NCX DLE technology in Bolivia.

§  Clontarf Energy plc to contribute $500,000 in cash towards the pilot plant construction and testing as an exclusivity fee for the use of the NCX technology.

§  NCX will then issue shares equal to $500,000 at its next financing (CHMX:OTC) to Clontarf Energy plc. 

§  Clontarf Energy plc will issue shares as follows to NCX:

i.      385 million new Ordinary Shares on proceeding with the Pilot Plant;

ii.     250 million new Ordinary Shares after successful pilot processing of Bolivian brines through the NCX pilot plant; and

iii.    250 million new Ordinary Shares after entry into a construction and processing contract between the JV and the Bolivian authorities on processing of Bolivian brines utilising NCX processing technology.

             On 5 May 2023 the Company announced that all conditions precedent had been satisfied with respect to the JV with NCX coming into force. In this regard, Clontarf paid NCX US$500,000 and issued 385 million new Ordinary Shares in the capital of Clontarf of which half will be subject to a 12-month lock in requirement.

As at 30 June 2024 no trading activity had commenced in the JV and as such there are no results or expenses recorded. 

7.    SHARE CAPITAL

Deferred Shares - nominal value of 0.24p
	Number	Share Capital £'000	Share Premium £'000
At 1 January 2023	2,370,826,117	5,690	-
At 31 December 2023 and 30 June 2024	2,370,826,117	5,690	-
Ordinary Shares - nominal value of 0.01p
Allotted, called-up and fully paid:
	Number	Share Capital	Share Premium
		£'000	£'000
At 1 January 2023	2,370,826,117	237	10,985
Issued during the period	2,822,500,000	282	1,849
Share issue expenses		-	(97)
At 30 June 2023	5,193,326,117	519	12,737
Issued during the period	-	-	-
At 31 December 2023	5,293,326,117	519	12,737
Issued during the period	2,000,000,000	200	500
Share issue expenses	-	-	(42)
At 30 June 2024	7,293,326,117	719	13,195

       Movements in issued share capital

On 18 March 2024 the Company raised £400,000 via a placing of 1,142,857,143 ordinary shares of 0.01p each at a price of 0.035p per share. Proceeds raised will be used to provide additional working capital and fund developments costs.

On 23 May 2024 the Company raised £300,000 via a placing of 857,142,857 ordinary shares of 0.01p each at a price of 0.035p per share. Proceeds raised will be used to provide additional working capital and fund developments costs.

8.    SHARE BASED PAYMENTS

SHARE OPTIONS

The Group issues equity-settled share-based payments to certain Directors and individuals who have performed services for the Group. Equity-settled share-based payments are measured at fair value at the date of grant.

Fair value is measured by the use of a Black-Scholes model.

The Group plan provides for a grant price equal to the average quoted market price of the ordinary shares on the date of grant.

	30 Jun 24		30 Jun 23		31 Dec 23
	Options Number '000	Weighted average exercise price in pence	Options Number '000	Weighted average exercise price in pence	Options Number '000	Weighted average exercise price in pence
At 1 January	500,500	0.03	40,500	0.7	40,500	0.7
Issued	320,000	0.0365	160,000	0.0725	460,000	0.08
Outstanding at end of period	820,500	0.1	200,500	0.2	500,500	0.3
Exercisable at end of period	820,500	0.1	200,500	0.2	500,500	0.3

On 9 April 2024 a total of 160,000,000 options were granted with a fair value of £56,981 to Directors and individuals who have performed services for the Group. On 16 June 2024 a total of 160,000,000 options were granted with a fair value of £59,321 to Directors and individuals who have performed services for the Group. These fair values were calculated using the Black-Scholes valuation model.

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

Grant 9 April 2024

Weighted average share price at date of grant (in pence)                             0.0365p

Weighted average exercise price (in pence)                                                     0.0365p

Expected volatility                                                                                                 165.90%

Expected life                                                                                                           7 years

Interest free rate                                                                                                    4.25%

Expected dividends                                                                                                none

Grant 17 June 2024

Weighted average share price at date of grant (in pence)                             0.0385p

Weighted average exercise price (in pence)                                                     0.0385p

Expected volatility                                                                                                 153.03%

Expected life                                                                                                           7 years

Interest free rate                                                                                                    4.25%

Expected dividends                                                                                                none

Expected volatility was determined by management based on their cumulative experience of the movement in share prices. The terms of the options granted do not contain any market conditions within the meaning of IFRS 2.

The Group capitalised expenses of £Nil (2023: £Nil) and expensed costs of £116,303 (2023: £106,632) relating to equity-settled share-based payment transactions during the year.

Warrants

	30 Jun 24		30 Jun 23		31 Dec23
	Warrants Number '000	Weighted average exercise price in pence	Warrants Number '000	Weighted average exercise price in pence	Warrants Number '000	Weighted average exercise price in pence
At 1 January	533,183	0.22	435,683	0.25	435,683	0.25
Issued	-	-	97,500	0.065	97,500	0.065
Exercisable at end of period	533,183	0.22	533,183	0.22	533,183	0.22

There were no warrants issued in the current period.

9.    POST BALANCE SHEET EVENTS

There are no significant post balance sheet events affecting the Company.

10. The Interim Report for the six months to 30 June 2024 was approved by the Directors on 13 September 2024.

11. The Interim Report will be available on the Company's website at www.clontarfenergy.com. 

 

END