Annual Financial Report

RNS Number : 7050D

Wishbone Gold PLC

30 June 2021

 

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR")

Please click the following link to view the Annual Financial Report:

https://wishbonegold.com/images/2021/06/RA_WSBN_210630_2020_Annual_Report_01sd.pdf  

30 June 2021

Wishbone Gold Plc

("Wishbone" or the "Company")

Wishbone Gold Plc / Index: AIM: WSBN / Sector: Natural Resources / AQSE: WSBN

Final Results for the Year ended 31 December 2020

Wishbone Gold Plc (AIM: WSBN, AQSE: WSBN), the precious metals and gold trading and exploration company announces its final results for the year end 31 December 2020. The Chaiman's Statement and Financial Statement are set out below and the full Report and Accounts is attached and is available in the company's website www.wishbonegold.com .

Chairman's Statement

Dear Shareholders,

In March 2020 Emirates airlines, the lifeblood of Dubai, grounded all but a few of its fleet of nearly 300 planes. Overnight the thriving nexus of trade in Dubai from across the world stopped as if it had never existed. For us at Wishbone this cut off our supply of traded gold arriving on daily flights from African capitals and once our stocks were sold it was over.

Accordingly, during April and May, we restructured the company taking it back to its exploration roots in Australia. A recapitalization financing was announced on 2nd June 2020 at 1.35p giving us a market cap of £1.25m. As of writing (June 2021) our shares are at 18.5p and we have a market cap of £31.3m. Just over one year later, and we see great things for 2021 and beyond.

Wishbone Today

The restructuring which we implemented not only expanded our operations in Queensland but has also meant that we have added four new properties in the Pilbara region of Western Australia. Accordingly, the company now has six exploration properties in Australia: four in Western Australia (WA) in the Paterson Ranges area of the Pilbara and two (counting the Wishbone series as one property) in Queensland.

Figure 1: Wishbone Gold's Wishbone Project in Queensland, Australia - click PDF link to view

Figure 2: Wishbone Gold's exploration properties in Western Australia - click PDF link to view

Western Australia

Wishbone now has four exploration tenements in WA comprising the Red Setter group of three tenements and the Cottesloe tenement.

Red Setter and associated tenements

The major focus in WA is the Red Setter project. This is a 57.4 sq.km tenement, which is the major part of the 67 sq. km. package acquired in November 2020. Red Setter is located only 13 km south-west of the Newcrest[1] Mining's Telfer gold mine and about 60km west of Newcrest and Greatland[2] Gold's Havieron[3] discovery.

For sheer exploration sex appeal, it is hard to conceive of a better area to be in than the Paterson Ranges in the Pilbara. But to get a feel for why this whole area is one of the hottest exploration areas in the world you need to know the Havieron story. Greatland acquired Havieron towards the end of 2016 for A$250,000 and some contingent payments if they mine it. Havieron had been drilled previously and abandoned but Greatland's geologists believed that the drilling had simply not gone deep enough. Accordingly, they copied an existing hole and simply drilled deeper. They were right: BANG! Through the Permian cover, at a depth of about 1km and there it was: massive mineralization which drove Greatland to over £1bil market cap.

When something like this happens, it is a real head smacking moment for geologists the world over. All the previous models they have been using turn out to be wrong and there has been a scramble for properties in that region ever since.

We now employ some of the geologists who worked on Havieron and we have modelled and analyzed Red Setter which we will be drilling later this year. The modelling of the original government data looked promising but the acquisition of new 3D inversion ultra-detailed magnetics in February 2021 delineated 3 highly magnetic bodies over an expanded area covering 3km x 1km. The largest individual priority one magnetic target has a 1500m strike length with a width of 400m and starts at around 75m from surface. In addition, this survey revealed that all the magnetic targets are much shallower than 150m-250m depth previously modelled. The relatively shallower target depth is strongly advantageous both from an exploration and future development potential perspective.

In the RNS which we issued at the time there was this comment from Simon Beams, the Managing Director and Principal Geologist of Terra Search: "The detailed magnetic survey substantially expands and enhances Red Setter.  There are some very promising indications of a large hydrothermal system, with similarities to the new Havieron gold/copper discovery in the area. The previous drilling on the main 1.5km long target intersected similar alteration, and the right pathfinder metal indicators, peripheral to the main target. We now have multiple untested high-order magnetic targets across the entire prospect."

In May 2021 a Program of Work was approved by the Western Australian Government's Department of Mines. This includes a drilling program for up to 100 drill holes to depths of 300 metres. These are designed to test for potential gold and copper mineralization on the multiple magnetic targets.

Cottesloe Project

In March 2021 Wishbone acquired an option on 100% ownership of the 92.19 sq.km Cottesloe Project which is also in the Patersons Range region. Cottesloe is located 35km south east of Red Setter and around 55 km south of Newcrest's Telfer gold mine. Cottesloe consists of one granted exploration license E45/4543 and is considered highly prospective for precious and base metals.

We acquired Cottlesloe to give our exploration portfolio a balance by adding silver and lead: essential minerals for the manufacture of electric vehicles of all types. There is known mineralization at Cottesloe at surface and a few historic drilling results confirm high grades of silver in different parts of the property.

As with Red Setter we have an approved program of works for drilling later this year which will give a clearer idea of what we have here.

Queensland

The Wishbone group of properties

In Queensland we have the Wishbone group of licences in the highly prospective Mingela area about 80km south of the major Queensland port city of Townsville. This is situated between two large producing areas with Charters Towers to the west and Ravenswood to the east. The latter was recently sold for approximately A$300 million.

The Wishbone property was recently compared to the 5m oz Ravenswood gold mine by Dr Simon Beams of Terra Search Australia at the annual AusIMM conference in June 2021. The presentation generated a lot of interest as it was again the application of new technology to existing resources leading to a revised view on the prospectivity of the region.  The presentation was announced in an RNS and is available on our website.

We have drilling programs planned for later this year.

White Mountains

We will also be continuing exploration at White Mountains where the Granite Castle deposit on the western boundary has recently been drilled by others to confirm significant gold and silver in grades and tonnage of potential economic significance. In addition, at the centre of White Mountains is an intrusion of an Ordovician-Silurian granitoid which hosts a trend of deposits, namely the Diecon Mine (gold); Edwards prospect (antimony) and Northeast Workings (gold). Grades up to 44 g/t Au (grams per tonne gold) were returned from NE Workings from stream sediments.

Financial effects of 2020

As a direct result of the COVID crisis and the grounding of Emirates the Group's revenue fell in 2020 to US$1.5m compared to US$10.8m in 2019. All of this revenue occurred in the first few months of 2020. We previously issued a trading update showing revenues of US$3.64m in the first quarter of 2020, but this has been restated to US$1.5m reflecting a reclassification of some trading income to commission only. This led to a commensurate increase in profits although for the year this is of course well short of previous performance. Given the effects of the COVID-19 lockdown on our trading business, we have impaired our investment in Precious Metals International Ltd, the parent company of Black Sand by a further US$249,114 taking that investment to zero.

During the year, there was depreciation of US$25,000 charged against the equipment in Honduras. This depreciation takes the book value of the equipment to zero.

Financial Review and Financing

At the end of the period under review, the accounts show that Wishbone held cash balances totalling US$2,188,311 (2019: US$17,179). Administrative costs, excluding interest during year, were US$ 1,045,475 (2019: US$939,352).

Subsequent to the year end the Company in January 2021, the Company announced that 98.54% of the warrants issued following the placing on 10 December 2020 had been exercised raising a further £1,034,662.56. In May 2021, the Company raised a further £1.4m with an additional placing.

The net effect of this restructuring and capital raises has been to leave the Company in a strong financial position to complete its planned exploration programs and with cash to pursue additional expansion.

In conclusion I would like to thank you all: staff, shareholders and advisers for your hard work and support. We will continue to announce news as soon as we are allowed by regulations to do so.

___________________________

R O'D Poulden

Chairman

30 June 2021

For further information, please contact:

Wishbone Gold Plc
Richard Poulden, Chairman	Tel: [phone]
Beaumont Cornish Limited
(Nominated Adviser and AQUIS Exchange Corporate Adviser)
Roland Cornish/Rosalind Hill Abrahams	Tel: [phone]
Peterhouse Capital Limited
(Broker)
Lucy Williams and Duncan Vasey	Tel: [phone]

Consolidated Income Statement
for the year ended 31 December 2020

	Notes	2020		2019
		US$		US$
Discontinued Operations
Revenue		1,400,729		10,760,770
Cost of sales		(1,390,322)		(10,705,008)
Gross profit		10,407		55,762
Administration expenses	5	(29,792)		(48,250)
Write-off of bad debts	8, 15	(48,804)		(598,844)
Loss from discontinued operations		(68,189)		(591,332)
Continuing Operations
Other income		64,000		-
Administration expenses	5	(1,015,683)		(891,102)
Operating loss		(951,683)		(891,102)
Gain on settlement of liability	13	198,772		64,980
Impairment of goodwill	10	(187,154)		(561,463)
Impairment of property, plant and equipment	9	-		(150,000)
Foreign exchange gain/(loss)		127,013		(9,539)
Finance costs		(9,177)		(21,093)
Loss from continuing operations - before taxation		(822,229)		(1,568,217)
Tax on loss		-		-
Loss from continuing operations		(822,229)		(1,568,217)
Loss for the financial year		(890,418)		(2,159,549)
Loss per share:
Basic and diluted (cents)	7	(0.031)		(0.077)
Loss per share: after capital reorganisation
Basic and diluted (cents)	7	(1.178)		(7.707)

There are no recognised gains or losses other than disclosed above and there have been no discontinued activities during the year except for the business operations in Black Sand FZE.

The notes on pages 32 to 53 form part of these financial statements.
 

Consolidated Statement of Financial Position
as at 31 December 2020

	Notes	2020		2019
		US$		US$
Current assets
Trade and other receivables	8	569,102		117,831
Cash and cash equivalents		2,188,311		17,179
		2,757,413		135,010
Non-current assets
Property, plant and equipment - net	9	-		25,000
Goodwill	10	-		187,154
Other intangible assets	10	1,394,914		388,169
		1,394,914		600,323
Total assets		4,152,327		735,333
Current liabilities	13	380,423		669,590
Equity
Share capital	14	3,933,921		3,776,911
Share premium		11,763,959		7,306,550
Foreign exchange reserve		(229,297)		(211,457)
Accumulated losses		(11,696,679)		(10,806,261)
		3,771,904		65,743
Total equity and liabilities		4,152,327		735,333

The financial statements were approved by the board and authorised for issue on 30 June 2021 and signed on its behalf by:

J.C. Harrison   R O'D Poulden

Director   Director

The notes on pages 32 to 53 form part of these financial statements.

Company Statement of Financial Position
as at 31 December 2020

	Notes	2020		2019
		US$		US$
Current assets
Trade and other receivables	8	2,465,628		20,389
Loans	15	1,823,558		1,181,210
Cash and cash equivalents		-		4,318
		4,289,186		1,205,917
Non-current assets
Investments	11	142,192		391,306
		142,192		391,306
Total assets		4,431,378		1,597,223
Current liabilities	13	206,368		638,856
Equity
Share capital	14	3,933,921		3,776,911
Share premium	14	11,763,959		7,306,550
Accumulated losses		(11,526,870)		(10,125,094)
		4,171,010		958,367
Total equity and liabilities		4,431,378		1,597,223

The financial statements were approved by the board and authorised for issue on 30 June 2021 and signed on its behalf by:

J.C. Harrison   R O'D Poulden

Director   Director

The notes on pages 32 to 53 form part of these financial statements.

Consolidated Statement of Cash Flows
for the year ended 31 December 2020

	Notes	2020		2019
		US$		US$
Cash flows from operating activities
Loss before tax		( 890,418 )		(2,159,549)
Reconciliation to cash generated from operations:
Foreign exchange (gain)/loss		(127,013)		9,539
Interest expense		9,177		21,093
Impairment of goodwill	10	187,154		561,463
Impairment of property, plant and equipment	9	-		150,000
Write-off of bad debts	8, 15	48,804		598,844
Write-off of receivables	5	14,031		126,279
Depreciation	9	25,000		37,500
Administrative expenses converted into ordinary shares	14	160,484		-
Gain on settlement of liability	13	(198,772)		(64,980)
Operating cash flow before changes in working capital		(771,553)		(719,811)
Decrease in receivables		111,614		81,054
Increase in payables		251,370		107,722
Net cash flows used in operations		(408,569)		(531,035)
Cash flows from an investing activity
Additions of intangible assets	10	(520,434)		(16,246)
Net cash flows used in investing activities		(520,434)		(16,246)
Cash flows from a financing activity
Issue of shares for cash	14	3,113,710		500,680
Net cash flows from financing activities		3,113,710		500,680
Effects of exchange rates on cash and cash equivalents, including effects of foreign exchange reserve		(13,575)		39,352
Net decrease in cash and cash equivalents		2,171,132		(7,249)
Cash and cash equivalents at 1 January		17,179		24,428
Cash and cash equivalents at 31 December		2,188,311		17,179

The notes on pages 32 to 53 form part of these financial statements.

Company Statement of Cash Flows
for the year ended 31 December 2020

	Notes	2020		2019
		US$		US$
Cash flows from operating activities
Loss before tax		(1,401,776)		(1,656,398)
Reconciliation to cash generated from operations:
Foreign exchange (gain)/loss		(127,013)		8,897
Interest expense		9,177		21,093
Provision for impairment of related party loans	21	637,726		292,204
Write-off of receivables	5	14,031		126,279
Impairment of investments	10	249,114		561,463
Gain on settlement of liability	13	(198,772)		(64,980)
Administrative expenses converted into ordinary shares	14	160,484		-
Operating cash flow before changes in working capital		(657,029)		(711,442)
Increase in receivables		(2,627,313)		(1,393)
Increases in payables		162,049		90,853
Net cash flows used in operations		(3,122,293)		(621,982)
Cash flows from financing activities
Issue of shares for cash	14	3,113,710		500,680
Collections from related party loans - net	21	-		126,604
Net cash flow from financing activities		3,113,710		627,284
Effects of exchange rates on cash and cash equivalents		4,265		(3,239)
Net (decrease)/ increase in cash and cash equivalents		(4,318)		2,063
Cash and cash equivalents at 1 January		4,318		2,255
Cash and cash equivalents at 31 December		-		4,318

The notes on pages 32 to 53 form part of these financial statements.

 

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[1] Newcrest is Australia's largest gold producer and one of the world's largest gold mining companies. It owns and operates mines in Australia, Papua New Guinea and Canada. Market Cap is A$23bil

[2] Greatland Gold plc is an LSE AIM-listed (AIM:GGP) company with a market Cap of £807m

[3] Havieron is Greatland's flagship asset a world class gold-copper deposit in the Paterson region of Western Australia. It is held in a joint venture with Newcrest Mining Ltd.

 

END

 

 

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