Interim Results

RNS Number : 9846M

Caerus Mineral Resources PLC

27 September 2021

 

27 September 2021

Caerus Mineral Resources PLC

('Caerus' or the 'Company')

Interim Results

Caerus Mineral Resources plc (LON:CMRS), the exploration and resource development company focused on developing mineral resources in Europe to support the global 'Clean Energy' initiative is pleased to announce its unaudited interim results for the six months ended 30 June 2021.

Highlights in H1 2021:

· Admission to the LSE in March 2021 with a cash raise of 2.2m GBP

· Increase of licences in portfolio to 16 through 2 targeted acquisitions

o  Acquisition of PR Ploutonic Resources Limited ("Ploutonic" or "PRL")

o  Acquisition of Gold Mines (Cyprus) Limited ("GMCL")

· Successful due diligence drill programme over a number of newly acquired assets

· Option Agreements signed with both Jubilee Metals Group PLC (AIM: JBL) ("Jubilee Metals") and Bezant Resources PLC (AIM:BZT) ("Bezant") to accelerate development towards production via joint ventures

Post Period:

· Announcement of a Placing and Subscription to raise a further 1.5m GBP (gross) to fund developments within these new licences

· Sale of non-core licences and assets

· Commencement of a diamond drill programme for NI 43-101 Mineral Resource Estimation for the Troulli and Kokkinapetra Licences

Commenting on the Interim Results, Chief Executive Officer Martyn Churchouse said " Over the past six month the Company has made considerable progress  since our Listing in London, and is well on its way to achieving its strategic objectives. Our dual programme of developing of hard rock copper-gold resources and building a resource of metal-bearing surface material within dumps, stockpiles and tailings has quickly gathered momentum. This activity has been bolstered by the acquisition of prospective licences, many of which host broadly defined copper-gold resources and have already shown indicated some prospective targets for future exploration.

Since the signing of the agreement we have and continue to work closely with Jubilee Metals and look forward to the results of on-going metallurgical test work aimed at developing an optimised mineral processing design as we move forward with our projects.  We recently raised additional funds specifically to provide the necessary means to ensure that new acquisitions can be advanced quickly and brought in-line with the current development status of existing projects. This is important to be able to deliver relevant technical information and samples to our prospective future JV Partner if they are to optimise plant design. We are also working closely with Bezant with forward-looking design discussions focusing on the most likely production scenarios for priority projects including plant throughput, feedstock-type scheduling and general logistics.

Caerus's exploration team continues to impress, particularly its' ability to adapt exploration programmes to fit the "Waste to Revenue" model and parallel hard rock resource development programme. Acutely aware of the economics of surface material reprocessing alongside traditional hard rock mining practices means the Team is focused on the important elements of exploration, improving delivery to our potential JV Partners and thereby bringing future cash flow generation that much closer"  

CAERUS MINERAL RESOURCES PLC

INTERIM REPORT - SIX MONTHS ENDED 30 JUNE 2021

Chairman's Review of Year to date

Caerus has delivered an exceptional performance for the six-month period under review, significantly expanding its asset base whilst building important strategic alliances alongside the fast-tracking of its resource development programmes.

Our exploration team has been able to continue work despite the on-going Covid-19 pandemic due in part to our key personnel being residents of Cyprus. The wealth of local knowledge gives Caerus a competitive advantage when it comes to identifying opportunities in the Country which is reflected in the additions, we have made to the licence portfolio during the short period since Listing.

The acquisition of Ploutonic was seen as a natural expansion of our licence portfolio due to its brownfield status, hosting a sizeable metal-bearing surface material resource together with known high-grade near-surface hard rock mineralisation. The Troulli Project has become a priority for the Company with diamond drilling for NI - 43-101 Mineral Resource estimation having already commenced.

The GMCL acquisition has provided three further licences, two with broadly delineated resources that can potentially be incorporated into existing project hubs for future development.

The Company's "Waste to Revenue" strategy, focusing on the reprocessing of large quantities of metal-bearing surface materials continues to identify resources suitable for treatment. This programme underpins the parallel assessment and development of hard rock copper and gold resources that are expected to be treatable in a common processing plant design.

Caerus's recent association with Jubilee demonstrates our commitment to using the best possible expertise available to the Company. As an industry leader in reprocessing of surface materials, Jubilee is an ideal potential partner for our "Waste to Revenue" ambitions.

The proposed future joint venture with Bezant reflects our confidence that we will, in the shortest possible timeframe, be in a position to start the process of mine planning and development, and a mining partner provides an opportunity to share the capital cost burden and reduce Shareholder exposure to mining risks.

I am delighted by the progress made in the six months since Listing and look forward to updating Shareholders in the near future as our Mineral Resource estimation programmes start to generate results alongside the on-going routine exploration of our greenfield licences and the building of value through the accumulation of dump resources suitable for low-cost reprocessing and metal recovery.

Financials

During the period the Group made a pre-tax loss of 415,553 GBP (six months ended 30 June 2020: loss of 41,844 GBP). The total assets of the Group increased from 1,369,184 GBP as of 31 December 2020 to 4,137,791 GBP.

During the period, the net cash outflow from operating activities was 540,316 GBP and the net cash position increased by 1,730,815 GBP to 1,868,721 GBP.

Directors' Responsibility Statement

The Directors confirm that, to the best of their knowledge, the interim financial statements have been prepared in accordance with International Accounting Standards 34, Interim Financial Reporting, as adopted by the United Kingdom and the LSE Rule for Companies, and that the interim results give a true and fair view of the assets, liabilities, financial position and loss of the Group.

The interim report was approved by the Board of Directors and the above responsibility statement was signed on its behalf by:

Michael Johnson

Non- Executive Chairman

27 September 2020

Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income

		Six months to 31 June 2021 (unaudited)	Six months to 31 May 2020 (unaudited)
	Note	£	£
Administrative expenses	3	(414,543)	(41,844)
Finance costs		(1,010)	-
Operating loss and loss before taxation		(415,553)	(41,844)
Income tax expense		-	-
Loss after taxation		(415,553)	(41,844)
Loss for the period		(415,553)	(41,844)
Items that may be reclassified subsequently to profit and loss:
Exchange differences on translation of foreign operations		7,252	-
		(408,301)	(41,844)
Total comprehensive loss attributable to:
Owners of Caerus Mineral Resources plc		(403,761)	(41,844)
Non-controlling interests		(4,540)	-
Earnings per share:
Basic and diluted (£)	8	(0.0105)	(0.004)

All activities relate to continuing operations.

The above condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.

Condensed Consolidated Statement of Financial Position

		As at 30 June	As at 31 December
		2021	2020
	Note	£	£
ASSETS
Non-current assets
Intangible assets	4	2,619,820	1,690,536
Property, plant and equipment		1,892	-
Total non-current assets		2,621,712	1,690,536
Current assets
Cash and cash equivalents		1,868,721	137,906
Other receivables		155,499	10,709
Total current assets		2,024,220	148,615
Total assets		4,645,932	1,839,151
LIABILITIES
Non-current liabilities
Borrowings		(515)	(539)
Deferred tax liabilities		(209,611)	(125,801)
Financial liability - contingent consideration		(174,688)	(174,688)
Total non-current liabilities		(384,814)	(301,028)
Current liabilities
Trade and other payables		(123,327)	(168,939)
Total current liabilities		(123,327)	(168,939)
Total liabilities		(508,141)	(469,967)
Net assets		4,137,791	1,369,184
EQUITY
Share capital	6	537,113	239,000
Shares to be issued		-	100,000
Share premium	6	4,524,135	1,627,665
Foreign exchange reserve		(6,913)	(14,165)
Warrants reserve	7	87,185	-
Retained earnings		(1,106,643)	(691,090)
Capital and reserves attributable to owners of Caerus Mineral Resources plc		4,034,877	1,261,410
Non-controlling interests		102,914	107,774
Total equity		4,137,791	1,369,184

The above Condensed Consolidated Financial Statements should be read in conjunction with the accompanying notes.

The Financial Statements were approved and authorised for issue by the Board on 27 September 2021 and were signed on its behalf by:

Martyn Churchouse, Director

Condensed Consolidated Statement of Changes in Equity

	Share capital	Share premium	Shares paid not issued	Warrant reserve	Retained earnings	Foreign exchange reserve	Total
	£	£	£	£	£	£	£
Balance as at 30 November 2019	94,000	322,665	-	-	( 582,757)	-	(166,092)
Comprehensive income
Loss for the 7 months	-	-	-	-	(41,844)	-	(41,844)
Total comprehensive income for the 7 months	-	-	-	-	(41,844)	-	(41,844)
Transactions with owners recognised directly in equity	-	-	-	-	-	-	-
Balance as at 31 May 2020	94,000	322,665	-	-	( 624,601)	-	(207,936)
Comprehensive income
Loss for the 7 months	-	-	-	-	(66,489)	-	(66,849)
Exchange differences on translation of foreign operations	-	-	-	-	-	(14,165)	(14,165)
Total comprehensive income for the 7 months	-	-	-	-	(66,489)	(14,165)	(80,654)
Transactions with owners recognised directly in equity
Issue of shares	145,000	1,305,000	-	-	-	-	1,450,000
Shares paid but not issued	-	-	100,000	-	-	-	100,000
Balance as at 31 December 2020	239,000	1,627,665	100,000	-	(691,090)	(14,165)	1,261,410
Comprehensive income
Loss for the 6 months	-	-	-	-	(415,553)	-	(415,553)
Exchange differences on translation of foreign operations	-	-	-	-	-	7,252	7,252
Total comprehensive income for the 6 months	-	-	-	-	(415,553)	7,252	(408,301)
Transactions with owners recognised directly in equity
Issue of shares	298,113	3,101,887	(100,000)	-	-	-	3,300,000
Cost of shares issued	-	(205,417)	-	-	-	-	(205,417)
Issue of Warrants	-	-	-	87,185	-	-	87,185
Balance as at 30 June 2021	537,113	4,524,135	-	87,185	(1,106,643)	(6,913)	4,034,877

Condensed Consolidated Statement of Cash Flows

				6 month period ended  30 June 2021	6 month period ended  31 May 2020
			Notes	£	£
Cash flow from operating activities
Loss for the period before taxation				(415,553)	(41,844)
Adjustments for:
Interest expense				1,010	-
Share based payment expense			3	69,388	-
Foreign exchange gain on financial assets				-	(2,317)
Operating cash flows before movements in working capital				(345,155)	(44,161)
(Increase) in receivables				(144,790)	-
(Decrease)/increase in accounts payable and accrued liabilities				(50,371)	41,352
Net cash used in operating activities				(540,316)	(2,809)
Cash flow from investing activities
Expenditure on intangible assets				(88,347)	-
Expenditure on tangible assets				(1,892)	-
Net cash used in investing activities				(90,239)	-
Cash flow from financing activities
Interest paid				(1,010)	-
Proceeds from the issue of equity			6	2,550,000	-
Share issue costs			6	(187,620)	-
Net cash inflow from financing activities				2,361,370	-
Net increase/(decrease) in cash and cash equivalents				1,730,815	(2,809)
Cash and cash equivalent at beginning of the half year				137,906	3,492
Cash and cash equivalent at end of the half year				1,868,721	683

Significant non-cash transactions

The only significant non-cash transactions were the issue of shares detailed in note 6.

The above condensed Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes

Notes to the condensed interim financial statements

1.  General information

The principal activity of the Company and its subsidiaries (the Group) is in mineral exploration and the development of appropriate exploration projects. The Company's registered office is at Eccleston Yards, 25 Eccleston Place, London, SW1W 9NF.  Its shares are listed on the Main Market of the London Stock Exchange under the Standard Segment of the Official List under the ticker "LSE:CMRS".

2.  BASIS of PREPARATION

These condensed interim financial statements are for the six months ended 30 June 2021 and have been prepared in accordance with the accounting policies adopted in the Group's most recent annual financial statements for the year ended 31 December 2020, except for the new accounting policy noted below.

Share-based compensation

The Group issued warrants in the period which were accounted for as equity settled share based payment transactions with employees.  The fair value of the employees services received in exchange for these warrants is recognised as an expense in the profit and loss account with a corresponding increase in equity in the Warrants Reserve.  As there are no vesting conditions for these warrants the expense was recognised immediately and will not be subsequently revisited.  Fair value is determined using Black-Scholes option pricing models.

Share-based payments

The Group has two types of share based payments other than employee compensation.

Warrants issued for services rendered which are accounted for in accordance with IFRS 2 recognising either the cost of the services if it can be reliably measured or the fair value of the warrants (using Black-Scholes option pricing models).

Warrants issued as part of share issues have been determined as equity instruments under IAS 32.  Since the fair value of the shares issued at the same time is equal to the price paid, these warrants, by deduction are considered to have been issued at nil value.

The Group have chosen to adopt IAS 34 "Interim Financial Reporting" in preparing this interim financial information.  They do not include all the information required in annual financial statements, and  they should be read in conjunction with the consolidated financial statements for the year ended 31 December 2020 and any public announcements made by Caerus Mineral Resources Plc ("CMR") during the interim reporting period.

The business is not considered to be seasonal in nature.

The functional currency for each entity in the Group is determined as the currency of the primary economic environment in which it operates.  The functional currency of the parent company CMR is Pounds Sterling (£) as this is the currency that finance is raised in.  The functional currency of NCC, TDL and PRL is the Euro as this is the currency that mainly influences labour, material and other costs of providing services. The Group has chosen to present its consolidated financial statements in Pounds Sterling (£), as the Directors believe it is a more convenient presentational currency for users of the consolidated financial statements.  Foreign operations are included in accordance with the policies set out in the Annual Report and Accounts.

The condensed interim financial statements have been approved for issue by the Board of Directors on 27 September 2021. 

New standards, amendments and interpretations adopted by the Group.

During the current period the Group adopted all the new and revised standards, amendments and interpretations that are relevant to its operations and are effective for accounting periods beginning on 1 January 2021.  This adoption did not have a material effect on the accounting policies of the Group.

New standards, amendments and interpretations not yet adopted by the Group.

The standards and interpretations that are relevant to the Group, issued, but not yet effective, up to the date of these interim Financial Statements have been evaluated by the Directors and they do not consider that there will be a material impact of transition on the financial statements.

Going concern

The condensed interim financial statements have been prepared on the assumption that the Group will continue as a going concern. Under the going concern assumption, an entity is ordinarily viewed as continuing in business for the foreseeable future with neither the intention nor the necessity of liquidation, ceasing trading or seeking protection from creditors pursuant to laws or regulations. In assessing whether the going concern assumption is appropriate, the Directors take into account all available information for the foreseeable future, in particular for the twelve months from the date of approval of the condensed interim financial statements.

Following the review of ongoing performance and cash flows, the Directors have a reasonable expectation that the Group has adequate resources to continue operational existence for the foreseeable future. The Board have also considered the consequences of Covid-19 and other events and conditions, and it has determined that they do not create a material uncertainty that casts significant doubt upon the entity's ability to continue as a going concern.

Risks and uncertainties

The Directors continuously assess and monitor the key risks of the business. The key risks that could affect the Group's medium-term performance and the factors that mitigate those risks have not substantially changed from those set out in the Group's most recent annual financial statements for the year ended 31 December 2020.

Critical accounting estimates

The preparation of condensed interim financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the end of the reporting period. Significant items subject to such estimates are set out in Group's most recent annual financial statements for the year ended 31 December 2020.  The nature and amounts of such estimates have not changed during the interim period.

3.  ADMINISTRATIVE EXPENSES

Current period expenses include legal costs of £86,849, audit fees of £32,830, regulatory fees of £25,351, foreign exchange costs of £19,747, Directors fees of £77,669 and share based payment charges for warrants of £69,388.  These costs were significantly increased due to the process of Listing.

4.  INTANGIBLE ASSETS

The intangible assets held by the Group increased primarily as a result of the acquisition of PR Ploutonic Resources Limited.  See note 5 for further information.

	Exploration and Evaluation assets
	£
Cost and carrying amount
At 31 December 2020	1,690,536
Exploration and evaluation assets acquired at fair value (note 5)	838,562
Additions to exploration assets	90,722
At 30 June 2021	2,619,820

5.  ACQUISITION OF SUBSIDIARY

On 11 June 2021 CMR acquired 100% of the issued share capital in PR Ploutonic Resources Ltd ("PRL"), an exploration and production of copper, gold and other minerals company, for consideration of £750,000.  The acquisition provides CMR with the opportunity to expand its mineral exploration programme.

On acquisition, the Company paid a purchase price of £750,000 which was satisfied by the issue of consideration shares. The consideration shares were fair valued, at the Volume Weighted Average Price ("VWAP") based on 30 trading days following the announcement of the acquisition on 6 April 2021.

The amounts recognised in respect of the identifiable assets acquired and liability assumed as a result of the acquisition are as follows:

	Net book value of assets acquired	Fair value adjustments	Fair value of assets acquired
	£	£	£
Intangible assets	84,270	754,292	838,562
Financial liabilities	(4,752)	-	(4,752)
Deferred tax liability	-	(83,810)	(83,810)
Total identifiable assets acquired and liabilities assumed	79,518	670,482	750,000
Fair Value of Consideration Paid:
Shares issued			750,000
Total consideration			750,000

Under IFRS 3, a business must have three elements: inputs, processes and outputs.  PRL is an early stage exploration company and has no mineral reserves and no plan to develop a mine.  PRL does have titles to mineral properties but these could not be considered inputs because of their early stage of development.  PRL has no processes to produce outputs and has not completed a feasibility study or a preliminary economic assessment on any of its properties and no infrastructure or assets that could produce outputs.  Therefore, the Directors conclusion is that the transaction is an asset acquisition and not a business combination.  The fair value adjustment to intangible assets of £670,482 represents the excess of the purchase consideration of £750,000 over the excess of the net assets acquired (net assets of £79,518) and a deferred tax liability of £83,810.

During the period since acquisition,  PRL contributed a loss of £nil to the Group. If the acquisition had occurred on 1 January 2020, consolidated pro-forma loss for the half-year ended 30 June 2021 would have been £80,166.

6.  SHARE CAPITAL AND SHARE PREMIUM

		Number of shares - Ordinary	Share Capital £	Share Premium £	Total £
As at 31 May 2020		9,400,000	94,000	322,665	416,665
Issued 29 September 2020		8,500,000	85,000	765,000	850,000
Issued 13 November 2020		6,000,000	60,000	540,000	600,000
As at 31 December 2020		23,900,000	239,000	1,627,665	1,866,665
Issued 19 March 2021		26,500,000	265,000	2,385,000	2,650,000
Issued 11 June 2021		3,311,258	33,113	716,887	750,000
Cost of shares issued		-	-	(205,417)	(205,417)
As at 30 June 2021		53,711,258	537,113	4,524,135	5,061,248

On 19 March 2021, the Company completed a placing of 21,000,000 new Ordinary shares at 10p, a Subscription Agreement for an aggregate 1,500,000 new Ordinary Shares at 10p and issued a further 4,000,000 shares to EV Metals Limited in return for a further £400,000 investment in the Company.

On 11 June 2021, the Company issued 3,311,258 new Ordinary shares of £0.01 each at a deemed price of £0.23 per share to the owners of PRL as part of the consideration for the acquisition of said company. 

7.  WARRANTS

The Group has issued the following warrants, which are still in force at the balance sheet date.

Date of Issue	Reason for issue	No. of warrants	Exercise price pence per share	Life in years
25/01/2018	Founder warrants - dated from Admission	2,100,000	5.0	3
25/01/2018	Seed/investor warrants - dated from Admission	3,300,000	5.0	2
19/03/2021	Broker warrants - Share Issue	3,360,000	12.5	2
19/03/2021	Bonus warrants - Employee Compensation	2,000,000	12.5p	2
16/06/2021	Performance warrants- Employee Compensation	2,000,000	25.0p	1.75
16/06/2021	Introduction warrants - Cost of Services	441,174	17.0p	1.75

The Founder and Seed/Investor warrants have been determined as equity instruments under IAS 32 and as such have been issued at nil cost.

The Broker warrants have been fair valued at £17,797 in accordance with IFRS 2 and are measured at the fair value of the services received. This amount is attributable to the cost of shares issued and therefore has been accounted for in the Share Premium reserve.

The remaining warrants are valued in accordance with IFRS 2, as equity settled share based payment transactions.  £51,158 has been recognised as the fair value of employee compensation and £18,230 as the fair value of Broker Introduction services received during the period.

8.  EARNINGS PER SHARE

The calculation for basic earnings per Ordinary Share is based on the profit after income tax attributable to equity Shareholder for the period and is as follows:

	Six months to 30 June 2021	Six months to 31 May 2020
Loss attributable to equity Shareholders (£)	(415,553)	(41,844)
Weighted average number of Ordinary shares	39,413,411	9,400,000
Loss per Ordinary share (£)	(0.0105)	(0.004)

Earnings per Ordinary share are calculated using the weighted average number of Ordinary shares in issue during the period.  A loss was made during the period and diluted EPS are therefore equal to undiluted EPS.

9.   RELATED PARTY TRANSACTIONS

During the half-year ended 30 June 2021, CMR acquired PRL, one of the owners of this company is the Director Andrew Daniels who was issued 1,931,457 shares, fair valued at £444,235 for his 58.33% ownership in this company.

10.  SUBSEQUENT EVENTS

On 9 August 2021, the Company announced the completion of its acquisition of GC Gold Mines (Cyprus) Ltd ("GMCL").  This was acquired for a total cash consideration of £300,000, which was funded through the disposal of the Black Pine nickel-cobalt project and associated licences as announced on 29 July 2021.

On 22 September 2021, the Company announced a proposed Placing of up to 7.2 million shares at a price of 20p per ordinary share to raise £1.44m.  A parallel subscription of 300k shares to raise £60k has also been completed with a single subscriber under the same terms and condition as the Placing.  For every 2 Placing and Subscription shares a warrant will be issued, exercisable for two years from completion at a price of 30p per new ordinary share.

 

END

 

 

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