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#GRX GreenX Metals LTD – Quarterly Activities Report December 2023
In July 2023 GreenX entered into an Option Agreement with Greenfields Exploration Limited (Greenfields) to acquire up to 100% of the Eleonore North Gold Project (Eleonore North) in eastern Greenland.
o 2023 field work at Eleonore North was focused on determining the depth of an intrusion within the project area by deployment of an array of seismic nodes. The nodes have been retrieved with the recorded data now being processed by a geophysics specialist consulting firm. Results from the seismic analysis, expected in the March 2024 quarter, will be used in the next phases of the exploration program at Eleonore North.
o During the quarter, GreenX visited the Geological Survey of Denmark and Greenland in Copenhagen and discussed general co-operation and data sharing in respect of the Eleonore North region. GreenX also met with specialised arctic logistics service providers having extensive experience in East Greenland.
o Eleonore North has the potential to host a “reduced intrusion-related gold system” (RIRGS), analogous to large bulk-tonnage deposit types found in Canada.
· In November 2022, the hearing for the claim against the Republic of Poland under both the Energy Charter Treaty and the Australia-Poland Bilateral Investment Treaty was concluded (Claim).
o Combined arbitration hearing took place in front of the Tribunal in London under the UNCITRAL Arbitration Rules.
o With completion of the hearing, the Tribunal will render an Award (decision) in due course.
o Damages of up to £737 million (A$1.3 billion / PLN4.0 billion) have been claimed including the assessed value of GreenX’s lost profits and damages related to both the Jan Karski and Debiensko projects, and accrued interest related to any damages.
· Cash balance as at 31 December 2023 was A$9.3 million.
Classification 2.2: This announcement contains inside information
GreenX Metals Limited (ASX:GRX, LSE:GRX) (GreenX or the Company) is pleased to present its Quarterly Activities Report for the period during and subsequent to 31 December 2023.
eleonore north gold project
In July 2023, GreenX entered into an Option Agreement (Agreement) with Greenfields to acquire up to 100% of the Eleonore North gold project in eastern Greenland.
Eleonore North has the potential to host a RIRGS, analogous to large bulk-tonnage deposit types found in Canada including Donlin Creek, Fort Knox and Dublin Gulch.
Gold mineralisation documented at the high-priority Noa Pluton prospect within Eleonore North.
· Geophysical “bullseye” anomaly 6 km wide co-incident with elevated gold mineralisation from historical geochemical sampling.
· Anomalous gold mineralisation associated with quartz veining exposed at surface over a length of up to 15 km.
· Historical sampling includes 4 m chip sample grading 1.93 g/t Au and 1.9% Sb (refer to Appendix 1 of the Company’s announcement on 10 July 2023).
Eleonore North has potential to host large scale, shallow, bulk tonnage gold deposits. Eleonore North remains underexplored, with the existence of a possible RIRGS being a relatively new geological interpretation based on the historical data. Initial field work consists of a seismic survey to determine the depth from surface to the Noa Pluton to aid in drill targeting.
Figure 1: Eleonore North licence area showing the 6km diameter geophysical anomaly co-incident with gold veining visible at surface over some 15km at the high priority Noa Pluton prospect
The Eleonore North license area contains other gold targets as well as copper, antimony and tungsten prospects. At Holmesø there is copper and antimony mineralisation outcropping at surface. Historical mapping and sampling in the 1970s at Holmesø show a prospective horizon between 15 m and 20 m thick, with per cent level grades for both metals.
Eleonore North provides GreenX with gold exposure in Greenland and complements GreenX’s existing exploration prospect in Greenland, the Arctic Rift Copper Project (ARC). There are significant synergies with regards to personnel, logistics and equipment in having multiple exploration projects in Greenland. Field works were conducted during the 2023 field season at Eleonore North, with data collected from the seismic survey presently being analysed to inform follow-on exploration program design.
Greenland is a mining friendly jurisdiction with strong Government support for expanding its mining industry, simple laws and regulations, and a competitive fiscal regime.
The primary target in Eleonore North is the Noa Pluton, followed by the Holmesø prospect and its source intrusion. The Noa Veins provide a near-term drill target, however, the Company’s 2023 field work was focussed on determining the depth of the causative intrusion with greater precision using a passive seismic survey. Once analysed, this information will validate the magnetic interpretation, provide more certainty for a future exploration program, and help identify the size of the intrusion within the well-defined hornfels.
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Figure 2: Map of Greenland showing GreenX’s ARC and Eleonore North license areas |
Figure 3: Map showing prospects and geological features within the Eleonore North license areas |
ARCTIC RIFT COPPER PROJECT
The ARC project is an exploration joint venture between GreenX and Greenfields. GreenX can earn-in up to 80% of ARC by spending A$10 million by October 2026. ARC is targeting large scale copper in multiple settings across a 5,774 km2 Special Exploration Licence in eastern North Greenland. The area has been historically underexplored yet is prospective for copper, forming part of the newly identified Kiffaanngissuseq metallogenic province.
The results of work program announced last year have demonstrated the high-grade nature of the known copper sulphide mineralisation and wider copper mineralization in fault hosted Black Earth zones and adjacent sandstone units. The exact position of a native copper fissure at the Neergaard Dal prospect was also identified.
Analysis of this information is underway and will be key to future planned work programs.
DISPUTE WITH POLISH GOVERNMENT
In November 2022, the Company reported the conclusion of the Claim against the Republic of Poland under both the Energy Charter Treaty (ECT) and the Australia-Poland Bilateral Investment Treaty (BIT) (together the Treaties). The hearing took place in London in and lasted two weeks.
Following completion of the hearing, the Tribunal will render an Award (i.e., the legal term used for a ‘decision’ by the Tribunal) in due course with no specified date available for the Tribunal decision.
As previously advised, the arbitration and hearing proceedings in relation to the Claim are required to be kept confidential.
Details of the Claim
The Company’s Claim against the Republic of Poland is being prosecuted through an established and enforceable legal framework, with GreenX and Poland agreeing to apply the United Nations Commission on International Trade Law Rules (UNCITRAL) rules to the proceedings. The arbitration claims are being administered through the Permanent Court of Arbitration in the Hague.
The evidentiary hearing phase of the arbitration proceedings has now been completed in front of the Arbitral Tribunal. With completion of the hearing, the Arbitral Tribunal will render an Award in due course. There is no specified date for an Award to be rendered. The Company’s claims for damages against Poland are in the amount of up to £737 million (A$1.3 billion/PLN4.0 billion), which includes a revised assessment of the value of GreenX’s lost profits and damages related to both the Jan Karski and Debiensko projects, and accrued interest related to any damages. The Claim for damages has been assessed by independent external quantum experts appointed by GreenX specifically for the purposes of the Claim.
In July 2020, the Company announced it had executed the LFA for US$12.3 million with LCM. US$10.7 million of the facility has been drawn down to cover legal, tribunal and external expert costs as well as defined operating expenses associated with the Claim. The Company does not anticipate further material drawdowns in relation to the ongoing BIT and ECT Tribunal proceedings. The LFA is a limited recourse loan with LCM that is on a “no win – no fee” basis.
In September 2020, GreenX announced that it had formally commenced with the Claim by serving the Notices of Arbitration against the Republic of Poland. In June 2021, GreenX announced that it had formally lodged its Statement of Claim in the BIT arbitration, including the first assessed claim for compensation. The Company’s Statement of Reply, the last material filing to be made by the Company for the BIT arbitration proceedings, was submitted in July 2021. The Statement of Reply addresses various points raised by the Republic of Poland in their Statement of Defence. The Statement of Reply also contains a re-evaluation of the claim for damages based on responses to Poland’s Statement of Defence.
GreenX’s dispute alleges that the Republic of Poland has breached its obligations under the applicable Treaties through its actions to block the development of the Company’s Jan Karski and Debiensko projects in Poland which effectively deprived GreenX of the entire value of its investments in Poland.
In February 2019, GreenX formally notified the Polish Government that there exists an investment dispute between GreenX and the Polish Government. GreenX’s notification called for prompt negotiations with the Government to amicably resolve the dispute and indicated GreenX’s right to submit the dispute to international arbitration in the event of the dispute not being resolved amicably.
GreenX’s investment dispute with the Republic of Poland is not unique, with international media widely reporting that the political environment and investment climate in Poland has deteriorated since the change in Government in 2015. As a result, there are a significant number of International Arbitration claims being bought against Poland.
CORPORATE
Financial Position
GreenX had cash of A$9.3m as at 31 December 2023.
-ENDS-
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 (‘MAR’). Upon the publication of this announcement via Regulatory Information Service (‘RIS’), this inside information is now considered to be in the public domain.
Forward Looking Statements
This release may include forward-looking statements. These forward-looking statements are based on GreenX’s expectations and beliefs concerning future events. Forward looking statements are necessarily subject to risks, uncertainties and other factors, many of which are outside the control of GreenX, which could cause actual results to differ materially from such statements. GreenX makes no undertaking to subsequently update or revise the forward-looking statements made in this release, to reflect the circumstances or events after the date of that release.
Competent Persons Statement
The information in this report that relates to exploration results were extracted from the ASX announcement dated 10 July 2023 which is available to view at www.greenxmetals.com.
GreenX confirms that (a) it is not aware of any new information or data that materially affects the information included in the original announcement; (b) all material assumptions and technical parameters underpinning the content in the relevant announcement continue to apply and have not materially changed; and (c) the form and context in which the Competent Person’s findings are presented have not been materially modified from the original announcement
APPENDIX 1: TENEMENT INFORMATION
As at 31 December 2023, the Company has an interest in the following tenements:
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Location |
Tenement |
Percentage |
Status |
Tenement Type |
|
Greenland |
Arctic Rift Copper Project (Licence No. 2021-07 MEL-S) |
–1 |
Granted |
Exploration Licence |
|
Greenland |
Eleonore North gold project |
–2 |
Granted |
Exploration Licence |
|
Jan Karski, Poland |
Jan Karski Mine Plan Area (K-4-5, K6-7, K-8 and K-9)2 |
–3 |
In dispute3 |
Exclusive Right to apply for a mining concession3 |
|
Debiensko, Poland |
Debiensko 1 |
–3 |
In dispute3 |
Mining3 |
Notes:
1 In October 2021, the Company announced that it had entered into an Earn-In Agreement (EIA) with Greenfields to acquire an interest of up to 80% in ARC. As at the date of this announcement, the Company held no beneficial interest in ARC, other than through the EIA.
2 In July 2023, the Company announced that it had entered into an Option Agreement with Greenfields to acquire an interest of up to 100% in Eleonore North. As at the date of this announcement, the Company held no beneficial interest in Eleonore North, other than through the Option Agreement.
3 GreenX formally commenced international arbitration claims against the Republic of Poland under both the ECT and the BIT in 2021. GreenX alleges that the Republic of Poland has breached its obligations under the Treaties through its actions to block the development of the Company’s Jan Karski and Debiensko projects in Poland. Refer to discussion of the Claim above. The Company has received notice from the relevant Polish authority that the Debiensko mining licence has been extinguished.
Appendix 2: Related Party Payments
During the quarter ended 31 December 2023, the Company made payments of A$241,000 to related parties and their associates. These payments relate to existing remuneration arrangements (director fees, consulting fees and superannuation of A$146,000 and the provision of a serviced office and company secretarial and administration services of A$95,000).
Appendix 3: Exploration and Mining Expenditure
During the quarter ended 31 December 2023, the Company made the following payments in relation to exploration activities:
|
Activity |
A$000 |
|
Greenland (Eleonore North and ARC) |
|
|
Project Management |
178 |
|
Exploration program, including sampling |
27 |
|
Transport costs (including equipment and fuel) |
5 |
|
Other (field supplies, equipment, fuel, satellite imagery, etc) |
1 |
|
Total as reported in the Appendix 5B (item 2.1(d)) |
211 |
There were no mining or production activities and expenses incurred during the quarter ended 31 December 2023.
Appendix 5B
Mining exploration entity or oil and gas exploration entity
quarterly cash flow report
|
Name of entity |
||
|
GreenX Metals Limited |
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|
ABN |
Quarter ended (“current quarter”) |
|
|
23 008 677 852 |
31 December 2023 |
|
|
Consolidated statement of cash flows |
Current quarter |
Year to date |
|
|
1. |
Cash flows from operating activities |
– |
– |
|
1.1 |
Receipts from customers |
||
|
1.2 |
Payments for |
– |
– |
|
(a) exploration & evaluation |
|||
|
(b) development |
– |
– |
|
|
(c) production |
– |
– |
|
|
(d) staff costs |
(412) |
(787) |
|
|
(e) administration and corporate costs |
(574) |
(937) |
|
|
1.3 |
Dividends received (see note 3) |
– |
– |
|
1.4 |
Interest received |
159 |
252 |
|
1.5 |
Interest and other costs of finance paid |
– |
– |
|
1.6 |
Income taxes paid |
– |
– |
|
1.7 |
Government grants and tax incentives |
– |
– |
|
1.8 |
Other (provide details if material) (a) Business Development (b) Property rental and gas sales (c) Occupancy |
(105) 4 (236) |
(219) 10 (430) |
|
1.9 |
Net cash from / (used in) operating activities |
(1,164) |
(2,111) |
|
2. |
Cash flows from investing activities |
– |
– |
|
2.1 |
Payments to acquire or for: |
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|
(a) Entities |
|||
|
(b) Tenements |
– |
– |
|
|
(c) property, plant and equipment |
(2) |
(2) |
|
|
(d) exploration & evaluation |
(211) |
(1,253) |
|
|
(e) investments |
– |
– |
|
|
(f) other non-current assets |
– |
– |
|
|
2.2 |
Proceeds from the disposal of: |
– |
– |
|
(a) entities |
|||
|
(b) tenements |
– |
– |
|
|
(c) property, plant and equipment |
– |
– |
|
|
(d) investments |
– |
– |
|
|
(e) other non-current assets |
– |
– |
|
|
2.3 |
Cash flows from loans to other entities |
– |
– |
|
2.4 |
Dividends received (see note 3) |
– |
– |
|
2.5 |
Other (provide details if material) |
– |
– |
|
2.6 |
Net cash from / (used in) investing activities |
(213) |
(1,255) |
|
3. |
Cash flows from financing activities |
– |
4,164 |
|
3.1 |
Proceeds from issues of equity securities (excluding convertible debt securities) |
||
|
3.2 |
Proceeds from issue of convertible debt securities |
– |
– |
|
3.3 |
Proceeds from exercise of options |
– |
– |
|
3.4 |
Transaction costs related to issues of equity securities or convertible debt securities |
(18) |
(154) |
|
3.5 |
Proceeds from borrowings |
– |
– |
|
3.6 |
Repayment of borrowings |
– |
– |
|
3.7 |
Transaction costs related to loans and borrowings |
– |
– |
|
3.8 |
Dividends paid |
– |
– |
|
3.9 |
Other (provide details if material) |
– |
– |
|
3.10 |
Net cash from / (used in) financing activities |
(18) |
4,010 |
|
4. |
Net increase / (decrease) in cash and cash equivalents for the period |
||
|
4.1 |
Cash and cash equivalents at beginning of period |
10,715 |
8,674 |
|
4.2 |
Net cash from / (used in) operating activities (item 1.9 above) |
(1,164) |
(2,111) |
|
4.3 |
Net cash from / (used in) investing activities (item 2.6 above) |
(213) |
(1,255) |
|
4.4 |
Net cash from / (used in) financing activities (item 3.10 above) |
(18) |
4,010 |
|
4.5 |
Effect of movement in exchange rates on cash held |
(2) |
– |
|
4.6 |
Cash and cash equivalents at end of period |
9,318 |
9,318 |
|
5. |
Reconciliation of cash and cash equivalents |
Current quarter |
Previous quarter |
|
5.1 |
Bank balances |
1,818 |
2,715 |
|
5.2 |
Call deposits |
7,500 |
8,000 |
|
5.3 |
Bank overdrafts |
– |
– |
|
5.4 |
Other (provide details) |
– |
– |
|
5.5 |
Cash and cash equivalents at end of quarter (should equal item 4.6 above) |
9,318 |
10,715 |
|
6. |
Payments to related parties of the entity and their associates |
Current quarter |
|
6.1 |
Aggregate amount of payments to related parties and their associates included in item 1 |
(241) |
|
6.2 |
Aggregate amount of payments to related parties and their associates included in item 2 |
– |
|
Note: if any amounts are shown in items 6.1 or 6.2, your quarterly activity report must include a description of, and an explanation for, such payments. |
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|
7. |
Financing facilities Add notes as necessary for an understanding of the sources of finance available to the entity. |
Total facility amount at quarter end |
|
|
7.1 |
Loan facilities |
18,040* |
15,709 |
|
7.2 |
Credit standby arrangements |
– |
– |
|
7.3 |
Other (please specify) |
– |
– |
|
7.4 |
Total financing facilities |
18,040* |
15,709 |
|
|
|||
|
7.5 |
Unused financing facilities available at quarter end |
2,331 |
|
|
7.6 |
Include in the box below a description of each facility above, including the lender, interest rate, maturity date and whether it is secured or unsecured. If any additional financing facilities have been entered into or are proposed to be entered into after quarter end, include a note providing details of those facilities as well. |
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On 30 June 2020, the Company executed a Litigation Funding Agreement (LFA) for US$12.3 million (*now worth A$18.0 million with the movement of the A$ compared to the $US) with LCM Funding UK Limited a subsidiary of Litigation Capital Management Limited (LCM), to pursue damages claims in relation to the investment dispute between GreenX and the Polish Government that has arisen out of certain measures taken by Poland in breach of the Energy Charter Treaty and the Australia – Poland Bilateral Investment Treaty (BIT). LCM will provide up to US$12.3million (~A$18.0 million), denominated in US$, in limited recourse financing which is repayable to LCM in the event of a successful Claim or settlement of the Dispute that results in the recovery of any monies. If there is no settlement or award, then LCM is not entitled to any repayment of the financing facility. In return for providing the financing facility, LCM shall be entitled to receive repayment of any funds drawn plus an amount equal to between two and five times the total of any funds drawn from the funding facility during the first five years, depending on the time frame over which funds have remained drawn, and then a 30% interest rate after the fifth year until receipt of damages payments. |
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|
8. |
Estimated cash available for future operating activities |
$A’000 |
|
8.1 |
Net cash from / (used in) operating activities (item 1.9) |
(1,164) |
|
8.2 |
(Payments for exploration & evaluation classified as investing activities) (item 2.1(d)) |
(211) |
|
8.3 |
Total relevant outgoings (item 8.1 + item 8.2) |
(1,375) |
|
8.4 |
Cash and cash equivalents at quarter end (item 4.6) |
9,318 |
|
8.5 |
Unused finance facilities available at quarter end (item 7.5) |
2,331 |
|
8.6 |
Total available funding (item 8.4 + item 8.5) |
11,649 |
|
8.7 |
Estimated quarters of funding available (item 8.6 divided by item 8.3) |
8 |
|
Note: if the entity has reported positive relevant outgoings (ie a net cash inflow) in item 8.3, answer item 8.7 as “N/A”. Otherwise, a figure for the estimated quarters of funding available must be included in item 8.7. |
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8.8 |
If item 8.7 is less than 2 quarters, please provide answers to the following questions: |
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|
8.8.1 Does the entity expect that it will continue to have the current level of net operating cash flows for the time being and, if not, why not? |
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Answer: Not applicable |
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8.8.2 Has the entity taken any steps, or does it propose to take any steps, to raise further cash to fund its operations and, if so, what are those steps and how likely does it believe that they will be successful? |
||
|
Answer: Not applicable |
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8.8.3 Does the entity expect to be able to continue its operations and to meet its business objectives and, if so, on what basis? |
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Answer: Not applicable |
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Note: where item 8.7 is less than 2 quarters, all of questions 8.8.1, 8.8.2 and 8.8.3 above must be answered. |
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Compliance statement
1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.
2 This statement gives a true and fair view of the matters disclosed.
Date: 31 January 2024
Authorised by: Company Secretary
(Name of body or officer authorising release – see note 4)
Notes
1. This quarterly cash flow report and the accompanying activity report provide a basis for informing the market about the entity’s activities for the past quarter, how they have been financed and the effect this has had on its cash position. An entity that wishes to disclose additional information over and above the minimum required under the Listing Rules is encouraged to do so.
2. If this quarterly cash flow report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. If this quarterly cash flow report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report.
3. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.
4. If this report has been authorised for release to the market by your board of directors, you can insert here: “By the board”. If it has been authorised for release to the market by a committee of your board of directors, you can insert here: “By the [name of board committee – eg Audit and Risk Committee]”. If it has been authorised for release to the market by a disclosure committee, you can insert here: “By the Disclosure Committee”.
5. If this report has been authorised for release to the market by your board of directors and you wish to hold yourself out as complying with recommendation 4.2 of the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations, the board should have received a declaration from its CEO and CFO that, in their opinion, the financial records of the entity have been properly maintained, that this report complies with the appropriate accounting standards and gives a true and fair view of the cash flows of the entity, and that their opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.