Home » Posts tagged 'ion'
Tag Archives: ion
#BRES Blencowe Resources PLC – MoU signed for Graphite Beneficiation in Uganda
Blencowe Resources (LSE: BRES.L) has signed a Memorandum of Understanding (“MOU”) with Singaporean graphite sales and marketing specialist Triessence Limited (“Triessence”) and a leading Asian SPG and Anode material producer (“SPG Partner”). This partnership aims to establish Joint Venture (JV) for a graphite beneficiation facility in Uganda producing 99.95% purified graphite for lithium-ion batteries. This venture will set Blencowe apart from competitors focused solely on producing graphite concentrate and provides a life-of-mine offtake partner near the Orom-Cross Project, offering significant additional commercial advantages.
With this JV, Blencowe’s has strategically aligned with two highly experienced Asian graphite specialists to ensure successful delivery.
Highlights:
· JV Formation: Blencowe and Triessence will each hold a 50% stake in in the SPG facility, with the SPG Partner providing operational expertise. Blencowe retains 100% ownership of Orom-Cross.
· Value Addition: Upgrading 96% graphite concentrate to high-value battery ready 99.95% uncoated SPG significantly enhances commercial returns compared to selling concentrate.
· Risk Mitigation: Partnering with graphite industry experts mitigates operational risk.
· Capital Investment: Triessence will fund 50% of capital costs for the SPG facility.
· SPG Offtake Secured: Triessence will purchase all end product, ensuring consistent revenue and premium pricing for some of the first 99.95% SPG produced ex-China.
· Non-China Focus: SPG product ultimately to be sold to OEMs outside China via Triessence, providing strong political, commercial and funding advantages.
· Next steps: Definitive Feasibility Study (DFS) for the SPG facility will be integrated with Orom-Cross DFS for a comprehensive development strategy.
Executive Chairman Cameron Pearce commented:
“Blencowe has long recognised the substantial advantages downstream upgrading of graphite in-country can offer and securing experienced partners who have the expertise to help us deliver successful SPG production was essential. I am delighted to say that this MOU is another significant milestone in enhancing both the value and distinctiveness for our Company.”
“Our JV team will now focus on the SPG facility feasibility study and integrating it with the Orom-Cross DFS, providing a comprehensive solution that adds considerable value. We anticipate minimal additional costs for this study as we are utilising our partners’ existing vast experience for all costings and design work, and no further bulk sample testing or further resource drilling is needed.”
In-Country SPG Strategy
Selling 99.95% uncoated SPG (spheronised purified graphite) unlocks significantly higher returns than small flake 96% concentrate, leveraging the value from additional processing. Providing high-value SPG products into world markets, and particularly products generated outside of China, addresses a significant market gap, especially if China restricts purified graphite exports.
Blencowe’s exclusive sale of Orom-Cross concentrate to the proposed SPG facility ensures a life-of-mine offtake partner, whilst also allowing the Company to benefit by participating in the downstream sale of higher-value 99.95% uncoated SPG products. As one of the only ex-China producers of uncoated SPG this facility will likely command premium prices from OEMs seeking to diversify their SPG supply chains outside of China.
This downstream SPG strategy focuses only on upgrading the lower value small flake concentrate, which is roughly half of Orom-Cross’s output, while the more valuable large flake concentrate will continue to be sold into traditional graphite markets as concentrate. Blencowe recently announced its first MOU for sale of 15,000tpa large flake concentrate.
SPG Joint Venture
A new Ugandan company will be established for the JV to develop the SPG facility.
A feasibility study for the SPG facility, using Orom-Cross concentrate, will be initiated and will leverage the SPG Partner’s experience for costing and design work, with Blencowe handling in-country requirements. With the upgrade of substantial Orom-Cross concentrate to uncoated SPG as part of the 600-tonne bulk sample test process, a key part of the technical DFS has already been completed and paid for. This SPG study will later integrate into the broader Orom-Cross DFS, aligning both projects. Triessence will finance 50% of construction and handle international SPG sales. The SPG Partner, a global leader and one of the largest graphite companies in the world currently producing around 100,000tpa of uncoated SPG, will oversee operations under a management contract.
The SPG facility’s proximity to the Orom-Cross mine considerably reduces logistics costs for Blencowe and access to low-cost Ugandan hydropower supports a premium grade green 99.95% SPG product.
Commercial Advantages
By channelling Orom-Cross small flake concentrate into the nearby JV SPG facility Blencowe bypasses pricing pressures that other graphite peers will face selling their concentrate into competitive Asian markets. This will secure both sales volumes and favourable market pricing for Orom-Cross.
With a 50% stake in the SPG facility, Blencowe will further benefit from selling uncoated 99.95% SPG at a higher ~US$2,000 per tonne compared to ~US$500 per tonne for 96% concentrate. Proximity to the SPG facility will materially lower Orom-Cross current logistics and operating costs, enhancing overall project economics.
This downstream processing strategy, backed by experienced partners, may attract additional funding options from entities who recognise this long-term value opportunity. The U.S. International Development Finance Corporation (DFC) remains the preferred funding partner for Orom-Cross and supports this strategy, as does the Ugandan Government. Both offer valuable backing.
For further information please contact:
|
Blencowe Resources Plc Sam Quinn |
www.blencoweresourcesplc.com Tel: +44 (0)1624 681 250 |
|
Investor Relations Sasha Sethi |
Tel: +44 (0) 7891 677 441 |
|
Tavira Financial Jonathan Evans |
Tel: +44 (0)20 3192 1733 |
#SVML Sovereign Metals LTD – Outstanding Battery Anode Material Produced
Kasiya graphite concentrate confirmed to be an excellent feedstock for natural graphite anode materials suitable for battery production
· Kasiya natural graphite presents a unique, low-cost opportunity to develop lithium-ion battery supply chains outside of China
· Very high quality Coated Spherical Purified Graphite (CSPG) anode material produced from Kasiya graphite concentrate has performance characteristics comparable to the highest quality natural graphite battery material produced by dominant Chinese anode manufacturers
o Electrochemical testing achieved very high first cycle efficiencies of 94.2% to 95.8% supporting long battery life
o Excellent initial discharge capacities greater than 360mAh/g as required for highest quality natural graphite anode materials.
o Very low specific surface areas (known as BET) of ≤2.0m2/g minimising the loss of lithium in the first battery charging cycle
o Excellent tap densities of 1.11 to 1.18g/cm3 meaning higher electrical storage
· Outstanding anode material results are attributed to the unique geological setting of the highly weathered Kasiya orebody compared to fresh rock hosted graphite deposits, including:
o high purity of the natural flake,
o near perfect crystallinity, and
o very low levels of sulphur and other impurities.
· Further optimisation testwork to commence using additional concentrate being generated at pilot-scale facility in South Africa
· Results will form the basis for ongoing and future discussions with potential offtakers
Managing Director Frank Eagar commented: “These results confirm that Kasiya graphite concentrate will be an excellent anode material feedstock to the battery industry. Not only is the weathered, saprolite-hosted graphite easy to purify to very high-grades, the anode material produced meets the highest industry specifications. Along with the very low BET specific surface area and high tap densities (both resulting in excellent first cycle efficiencies and initial battery discharge capacities), Kasiya has the potential to become a dominant source of graphite supply ex-China. Combining these excellent results with one of the largest graphite resources globally, industry low operating costs and lowest global warming potential, Kasiya is presenting significant advantages over its graphite peers. We look forward to further testwork and market updates as we continue to develop Kasiya as a supplier of premium quality, cost competitive natural graphite concentrate.”
Classification 2.2: This announcement includes Inside Information
ENQUIRIES
|
Frank Eagar (South Africa/Malawi) +61(8) 9322 6322 |
Sam Cordin (Perth) |
Sapan Ghai (London)
|
|
Nominated Adviser on AIM and Joint Broker |
|
|
SP Angel Corporate Finance LLP |
+44 20 3470 0470 |
|
Ewan Leggat Charlie Bouverat |
|
|
|
|
|
Joint Brokers |
|
|
Stifel |
+44 20 7710 7600 |
|
Varun Talwar |
|
|
Ashton Clanfield |
|
|
|
|
|
Berenberg |
+44 20 3207 7800 |
|
Matthew Armitt |
|
|
Jennifer Lee |
|
|
|
|
|
Buchanan |
+ 44 20 7466 5000 |
Sovereign Metals Limited (ASX:SVM; AIM:SVML; OTCQX: SVMLF) (the Company or Sovereign) is very pleased to announce an update on the downstream testwork conducted at leading independent consultancy ProGraphite GmbH (ProGraphite) in Germany.
The test work program demonstrated that CSPG produced from Kasiya natural flake graphite has performance characteristics comparable to the leading Chinese natural graphite anode materials manufacturers such as BTR New Material Group (BTR).
Electrochemical testing of the CSPG samples at a leading German institute achieved first cycle efficiencies (FCE) of 94.2% to 95.8%, with results above 95% a key specification for highest quality natural graphite anode materials under the Chinese standard.
Following spheronisation and purification testwork1 which produced spherical graphite with very high purities of 99.99%, the purified spherical graphite (PSG) samples were pitch coated and carbonised to produce CSPG.
The coating process produced CSPG with very low BET specific surface area of 2.0m2/g and lower and high tap densities of 1.11-1.18g/cm3 (Table 1).
A low specific surface area is required for anode materials to minimise the loss of lithium in forming a secondary protective coating on the anode material known as the Solid Electrolyte Interphase (SEI). The pitch coating process also assists in increasing the density of the anode material as measured by the tap density – a higher density assists in storing more electrical energy in the lithium-ion battery.
|
Table 1: CSPG Results |
||||
|
CSPG Sample |
||||
|
Sample |
Units |
1 |
2 |
3 |
|
D10 |
[µm] |
11.05 |
11.08 |
14.86 |
|
D50 |
[µm] |
17.46 |
17.27 |
23.71 |
|
D90 |
[µm] |
26.75 |
27.5 |
36.72 |
|
Tap Density |
[g/cm3] |
1.11 |
1.12 |
1.18 |
|
BET |
[m2/g] |
1.6 |
2.0 |
1.4 |
Electrochemical testing of the CSPG samples at a leading German institute achieved FCE of 94.2% to 95.8%, with results above 95% a key specification for highest quality natural graphite anode materials under the Chinese standard. A very high FCE minimises lithium losses in the initial formation cycles of a lithium-ion battery, supporting battery life. Kasiya CSPG also met the criteria for an initial discharge capacity of more than 360mAh/g (ampere-hours per gram) for highest quality anode materials, with initial capacities of 362-366mAh/g. These results will be used to fast-track discussions with potential offtakers.
|
Table 2: Electrochemical Results – China CSPG Standard |
|
|||||||||||
|
|
CSPG Sample |
China Standard GB/T-24533-2019
|
||||||||||
|
1 |
2 |
3 |
Grade I |
Grade II |
Grade III |
|||||||
|
First Cycle Efficiency |
[%] |
95.8 |
94.2 |
95.8 |
≥95 |
≥93 |
≥91 |
|
||||
|
Initial Capacity |
[mAh/g] |
362 |
364 |
366 |
≥360 |
≥360 |
≥345 |
|
||||
Furthermore, the testwork demonstrated that CSPG produced from Kasiya natural flake graphite has initial performance characteristics comparable to the leading Chinese natural graphite anode materials manufacturers such as BTR. BTR has a 20-year track record in the production of lithium-ion battery anode materials, is a dominant player in the market and has recently concluded anode material offtake agreements with global automotive companies including Ford. BTR’s highest specification CSPG materials, that have low swelling, long cycle life, good processability and outstanding electrochemical performance include their GSN17 and LSG17 products (with D50 of 17.0+/- 1.5μm).
|
Table 3: Electrochemical Results – BTR CSPG products |
|
|||||||||
|
|
CSPG Sample |
BTR3
|
||||||||
|
1 |
2 |
GSN 17 |
LSG 17 |
|||||||
|
First Cycle Efficiency |
[%] |
95.8 |
94.2 |
≥95 |
≥94 |
|
||||
|
Initial Capacity |
[mAh/g] |
362 |
364 |
≥360 |
≥355 |
|
||||
|
D50 |
[μm] |
17.5 |
17.3 |
17.0+/- 1.5 |
17.0+/- 1.5 |
|
||||
In December 2023, China imposed trade restrictions on graphite that required producers to apply to the government for permits to export high-grade graphite materials and related products. Given China’s dominance of natural graphite and graphite derived products such as CSPG, global EV production and Net Zero ambitions could be negatively impacted given the lack of anode industry development ex-China. In May 2024, the US government imposed a new 25% tariff on natural graphite from China, as part of a broader initiative that included an increase of tariffs on EVs and lithium-ion batteries.
High performance CSPG materials manufactured from Kasiya natural graphite present an opportunity for development of ex-China supply chains for battery anode materials. Sovereign believes that the outstanding electrochemical results for Kasiya CSPG are as a result of the unique geological setting of the Kasiya orebody. The near perfect crystallinity i.e. fully ordered graphite resulting from the very high metamorphic grade of the underlying host rock (paragneiss metamorphosed to granulite facies) and the high purity of the natural flake being assisted by the highly weathered nature of the ore.2 This is as opposed to fresh rock hosted graphite deposits which generally have much higher impurity levels including sulphur, which negatively impacts electrochemical performance. The very low sulphur profile of Kasiya graphite is due to the fact that the primary sulphide minerals have been altered to sulphates by the intense weathering. The sulphates are water soluble and are leached from the ore during weathering.
Further optimisation testwork for anode materials is planned, using additional graphite concentrate currently being generated at pilot-scale in South Africa. This material will also be used to provide offtaker evaluation samples.
A program for assessing Kasiya concentrate for traditional refractories and foundry applications has also been developed. The coarse component of the pilot plant concentrate will be used for this testwork program.
1 Refer to ASX Announcement “Downstream Testwork Demonstrates High Quality Graphite” dated 15 May 2024
2 Refer to ASX Announcement “Kasiya Graphite Shows Excellent Suitability For Use In Lithium Ion Batteries” dated 8 June 2023
3 BTR anode material specs taken from this webpage: https://www.btrchina.com/en/NegativeProducts/info.aspx?itemid=1069
Competent Person Statement
The information in this report that relates to Lithium-Ion Battery Testwork is based on information compiled by Dr Surinder Ghag, PhD., B. Eng, MBA, M.Sc., who is a Member of the Australasian Institute of Mining and Metallurgy (MAusIMM). Dr Ghag is engaged as a consultant by Sovereign Metals Limited. Dr Ghag has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking, to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Dr Ghag consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
The information in this report that relates to Exploration Results (table 1) is based on information compiled by Mr Samuel Moyle, a Competent Person who is a member of The Australasian Institute of Mining and Metallurgy (AusIMM). Mr Moyle is the Exploration Manager of Sovereign Metals Limited and a holder of ordinary shares and unlisted performance rights in Sovereign Metals Limited. Mr Moyle has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Moyle consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
Forward Looking Statement
This release may include forward-looking statements, which may be identified by words such as “expects”, “anticipates”, “believes”, “projects”, “plans”, and similar expressions. These forward-looking statements are based on Sovereign’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 Sovereign, which could cause actual results to differ materially from such statements. There can be no assurance that forward-looking statements will prove to be correct. Sovereign 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.
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.
Appendix 1: JORC Code, 2012 Edition – Table 1
SECTION 1 – SAMPLING TECHNIQUES AND DATA
|
Criteria |
JORC Code explanation |
Commentary |
|
Sampling Techniques |
Nature and quality of sampling (e.g. cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling.
|
Metallurgical Composite Sample: The sample was a composite of 24 Hand Auger (HA) and Push Tube (PT) holes drilled in 2022 in the Kingfisher pit. All drilling samples within the pit shell were added to the composite resulting in a sample of 2,498kg. Specifically, the composite sample consisted of selected rutile mineralised zones from holes, NSHA0009, 0010, 0056, 0060, 0061, 0074, 0119, 0311, 0343, 0344, 0345, 0350 and NSPT 0011, 0013, 0014, 0015, 0017, 0020, 0021, 0023, 0024, 0025, 0026, 0027. The following workflow was used to generate a pre-concentrate graphite feed at AML: · Wet screen at 2mm to remove oversize · Two stage cyclone separation at a cut size of 45µm to remove -45µm material · Pass +45µm -2mm (sand) fraction through Up Current Classifier (UCC) · Pass UCC O/F through cyclone at cut point of 45µm · Pass UCC O/F cyclone U/F (fine) over MG12 Mineral Technologies Spiral · Pass UCC U/F (coarse) over MG12 Mineral Technologies Spiral · Spiral cons are combined for further processing. Fine and coarse gravity tailing samples contain approximately 75%-80% of the graphite present in the feed sample. The majority of the graphite lost is contained in the -45µm fines. |
|
Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.
|
Placer Consulting (Placer) Resource Geologists have reviewed Standard Operating Procedures (SOPs) for the collection of HA and PT drill samples and found them to be fit for purpose. Drilling and sampling activities are supervised by a suitably qualified Company geologist who is present at all times. All bulk 1-metre drill samples are geologically logged by the geologist at the drill site. The primary metallurgical composite sample is considered representative for this style of mineralisation. |
|
|
Aspects of the determination of mineralisation that are Material to the Public Report. In cases where ‘industry standard’ work has been done this would be relatively simple (e.g. ‘reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay’). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (e.g. submarine nodules) may warrant disclosure of detailed information.
|
HA drilling was used to obtain 1-metre samples. The bulk metallurgical sample was a composite of selected samples from routine resource drilling. Existing rutile and graphite exploration results were used to determine the 1-metre intervals suitable to contribute to the two bulk sample composites. |
|
|
Drilling Techniques |
Drill type (e.g. core, reverse circulation, open‐hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (e.g. core diameter, triple or standard tube, depth of diamond tails, face‐sampling bit or other type, whether core is oriented and if so, by what method, etc).
|
Hand-auger drilling is completed with 75mm diameter enclosed spiral bits with 1-metrelong steel rods. Each 1m of drill sample is collected into separate sample bags and set aside. The auger bits and flights are cleaned between each metre of sampling to avoid contamination. Placer has reviewed SOPs for hand-auger drilling and found them to be fit for purpose and support the resource classifications as applied to the MRE. |
|
Drill Sample Recovery |
Method of recording and assessing core and chip sample recoveries and results assessed.
|
The configuration of drilling and nature of materials encountered results in negligible sample loss or contamination. Samples are assessed visually for recoveries. Overall, recovery is good. Drilling is ceased when recoveries become poor generally once the water table has been encountered. Auger drilling samples are actively assessed by the geologist onsite for recoveries and contamination. |
|
Measures taken to maximise sample recovery and ensure representative nature of the samples.
|
The Company’s trained geologists supervise auger drilling on a 1 team 1 geologist basis and are responsible for monitoring all aspects of the drilling and sampling process.
|
|
|
Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.
|
No bias related to preferential loss or gain of different materials has occurred. |
|
|
Logging |
Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation mining studies and metallurgical studies.
|
All individual 1-metre auger intervals are geologically logged, recording relevant data to a set template using company codes.
|
|
Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc.) photography.
|
All logging includes lithological features and estimates of basic mineralogy. Logging is generally qualitative. |
|
|
The total length and percentage of the relevant intersection logged
|
100% of samples are geologically logged. |
|
|
Sub-sampling techniques and sample preparation |
If core, whether cut or sawn and whether quarter, half or all core taken.
|
Not applicable – no core drilling conducted.
|
|
If non-core, whether riffled, tube sampled, rotary split, etc. and whether sampled wet or dry. |
Primary individual 1-metre samples from all HA and PT holes drilled are sun dried, homogenised and riffle split.
|
|
|
For all sample types, the nature, quality and appropriateness of the sample preparation technique.
|
Metallurgical Composite Sample: 1-metre intervals selected for the 2,498kg metallurgical sample were divided into weathering units. MOTT and PSAP material were combined and homogenised in preparation for dispatch to Australian laboratory Intertek for TGC assay. Per Australian import quarantine requirements the contributing SOIL/FERP material from within 2m of surface was kept separate to undergo quarantine heat treatment at Intertek Laboratory on arrival into Australia. The two sub samples (SOIL/FERP and MOTT/PSAP) were then dispatched from Intertek to AML Laboratory (AML). AML sub-sampled and assayed the individual lithologies prior to combining and homogenising the sample in preparation for test-work. |
|
|
Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples.
|
The sample preparation techniques and QA/QC protocols are considered appropriate for the nature of this test-work.
|
|
|
Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling.
|
The sampling best represents the material in situ. |
|
|
Whether sample sizes are appropriate to the grain size of the material being sampled.
|
The sample size is considered appropriate for the nature of the test-work. |
|
|
Quality of assay data and laboratory tests |
The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total. |
Metallurgical Composite Sample: The following workflow was used to generate a graphite product; o Coarse and fine rougher graphite flotation o Polishing grind of coarse and fine rougher graphite concentrate o Cleaner flotation of coarse and fine graphite o Cleaner concentrate sizing at 180µm o Regrind of separate +180µm/-180µm fractions o Three stage recleaner flotation of +180µm/-180µm fractions
|
|
For geophysical tools, spectrometers, handheld XRF instruments, etc., the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc.
|
Acceptable levels of accuracy and precision have been established. No handheld methods are used for quantitative determination.
|
|
|
Nature of quality control procedures adopted (e.g. standards, blanks, duplicate, external laboratory checks) and whether acceptable levels of accuracy (i.e. lack of bias) and precision have been established.
|
Acceptable levels of accuracy and precision have been established in the preparation of the bulk sample composites. |
|
|
Verification of sampling & assaying |
The verification of significant intersections by either independent or alternative company personnel.
|
No drilling intersections are being reported. |
|
The use of twinned holes.
|
No twin holes completed in this program.
|
|
|
Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols. |
All data was collected initially on paper logging sheets and codified to the Company’s templates. This data was hand entered to spreadsheets and validated by Company geologists.
|
|
|
Discuss any adjustment to assay data.
|
No adjustment to assay data has been made.
|
|
|
Location of data points |
Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation.
|
A Trimble R2 Differential GPS is used to pick up the collars. Daily capture at a registered reference marker ensures equipment remains in calibration. No downhole surveying is completed. Given the vertical nature and shallow depths of the holes, drill hole deviation is not considered to significantly affect the downhole location of samples. |
|
Specification of the grid system used. |
WGS84 UTM Zone 36 South. |
|
|
Quality and adequacy of topographic control. |
DGPS pickups are considered to be high quality topographic control measures. |
|
|
Data spacing & distribution |
Data spacing for reporting of Exploration Results. |
Metallurgical Composite Sample: The hand-auger holes contributing to this metallurgical were selected from pit area Kingfisher and broadly represent early years of mining as contemplated in the PFS (Approximately the first three years).
It is deemed that these holes should be broadly representative of the mineralisation style in the general area.
|
|
Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied. |
Not applicable, no Mineral Resource or Ore Reserve estimations are covered by new data in this report. |
|
|
Whether sample compositing has been applied. |
Metallurgical Composite Sample: The sample was composited as described under Sampling Techniques in this Table.
|
|
|
Orientation of data in relation to geological structure |
Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known considering the deposit type
|
No bias attributable to orientation of sampling has been identified. |
|
If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material.
|
All holes were drilled vertically as the nature of the mineralisation is horizontal. No bias attributable to orientation of drilling has been identified. |
|
|
Sample security |
The measures taken to ensure sample security |
Samples are stored in secure storage from the time of drilling, through gathering, compositing and analysis. The samples are sealed as soon as site preparation is complete.
A reputable international transport company with shipment tracking enables a chain of custody to be maintained while the samples move from Malawi to Australia or Malawi to Johannesburg. Samples are again securely stored once they arrive and are processed at Australian laboratories. A reputable domestic courier company manages the movement of samples within Perth, Australia.
At each point of the sample workflow the samples are inspected by a company representative to monitor sample condition. Each laboratory confirms the integrity of the samples upon receipt. |
|
Audits or reviews |
The results of any audits or reviews of sampling techniques and data
|
It is considered by the Company that industry best practice methods have been employed at all stages of the exploration.
Malawi Field and Laboratory visits have been completed by Richard Stockwell in May 2022. A high standard of operation, procedure and personnel was observed and reported.
|
SECTION 2 – REPORTING OF EXPLORATION RESULTS
|
Criteria |
Explanation |
Commentary |
|
Mineral tenement & land tenure status |
Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environment settings. |
The Company owns 100% of the following Exploration Licences (ELs) under the Mines and Minerals Act 2019 (Malawi), held in the Company’s wholly-owned, Malawi-registered subsidiaries: EL0609, EL0582, EL0492, EL0528, EL0545, EL0561, EL0657 and EL0710. A 5% royalty is payable to the government upon mining and a 2% of net profit royalty is payable to the original project vendor. No significant native vegetation or reserves exist in the area. The region is intensively cultivated for agricultural crops. |
|
The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area. |
The tenements are in good standing and no known impediments to exploration or mining exist. |
|
|
Exploration done by other parties
|
Acknowledgement and appraisal of exploration by other parties. |
Sovereign Metals Ltd is a first-mover in the discovery and definition of residual rutile and graphite deposits in Malawi. |
|
Geology |
Deposit type, geological setting and style of mineralisation |
The rutile deposit type is considered a residual placer formed by the intense weathering of rutile-rich basement paragneisses and variable enrichment by eluvial processes. Rutile occurs in a mostly topographically flat area west of Malawi’s capital, known as the Lilongwe Plain, where a deep tropical weathering profile is preserved. A typical profile from top to base is generally soil (“SOIL” 0-1m) ferruginous pedolith (“FERP”, 1-4m), mottled zone (“MOTT”, 4-7m), pallid saprolite (“PSAP”, 7-9m), saprolite (“SAPL”, 9-25m), saprock (“SAPR”, 25-35m) and fresh rock (“FRESH” >35m). The low-grade graphite mineralisation occurs as multiple bands of graphite gneisses, hosted within a broader Proterozoic paragneiss package. In the Kasiya areas specifically, the preserved weathering profile hosts significant vertical thicknesses from near surface of graphite mineralisation. |
|
Drill hole information |
A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes: easting and northings of the drill hole collar; elevation or RL (Reduced Level-elevation above sea level in metres of the drill hole collar); dip and azimuth of the hole; down hole length and interception depth; and hole length |
All intercepts relating to the Kasiya Deposit have been included in public releases during each phase of exploration and in this report. Releases included all collar and composite data and these can be viewed on the Company website. There are no further drill hole results that are considered material to the understanding of the exploration results. Identification of the broad zone of mineralisation is made via multiple intersections of drill holes and to list them all would not give the reader any further clarification of the distribution of mineralisation throughout the deposit.
|
|
If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case |
No information has been excluded. |
|
|
Data aggregation methods |
In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (e.g. cutting of high-grades) and cut-off grades are usually Material and should be stated. |
No data aggregation was required. |
|
Where aggregate intercepts incorporate short lengths of high-grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail. |
No data aggregation was required. |
|
|
The assumptions used for any reporting of metal equivalent values should be clearly stated. |
Not applicable |
|
|
Relationship between mineralisation widths & intercept lengths |
These relationships are particularly important in the reporting of Exploration Results. |
The mineralisation has been released by weathering of the underlying, layered gneissic bedrock that broadly trends NE-SW at Kasiya North and N-S at Kasiya South. It lies in a laterally extensive superficial blanket with high-grade zones reflecting the broad bedrock strike orientation of ~045° in the North of Kasiya and 360° in the South of Kasiya. No drilling intercepts are being reported. |
|
If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported. |
The mineralisation is laterally extensive where the entire weathering profile is preserved and not significantly eroded. Minor removal of the mineralised profile has occurred where alluvial channels cut the surface of the deposit. These areas are adequately defined by the drilling pattern and topographical control for the resource estimate. |
|
|
If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (e.g. ‘down hole length, true width not known’. |
No drilling intercepts are being reported. |
|
|
Diagrams |
Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported. These should include, but not be limited to a plan view of the drill collar locations and appropriate sectional views. |
Refer to figures in previous releases. These are accessible on the Company’s webpage. |
|
Balanced reporting |
Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high-grades and/or widths should be practiced to avoid misleading reporting of exploration results. |
All results are included in this report and in previous releases. These are accessible on the Company’s webpage. |
|
Other substantive exploration data |
Other exploration data, if meaningful and material, should be reported including (but not limited to: geological observations; geophysical survey results; geochemical survey results; bulk samples – size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances. |
Limited lateritic duricrust has been variably developed at Kasiya, as is customary in tropical highland areas subjected to seasonal wet/dry cycles. Lithological logs record drilling refusal in just under 2% of the HA/PT drill database. No drilling refusal was recorded above the saprock interface by AC drilling. Sample quality (representivity) is established by geostatistical analysis of comparable sample intervals.
|
|
Further work |
The nature and scale of planned further work (e.g. test for lateral extensions or depth extensions or large-scale step-out drilling). |
The Company is currently in a project optimisation phase with various work programs underway. |
|
Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive. |
Refer to diagrams in previous releases. These are accessible on the Company’s webpage. |
#SVML Sovereign Metals LTD – December 2023 Quarterly Report
Project Optimisation
· During the quarter, Sovereign advanced optimisation test work and technical studies for the Kasiya rutile-graphite project (Kasiya or the Project) with the Company’s strategic investor, Rio Tinto
· Significant field activities and a number of test work programs have commenced in order to provide data for the Project optimisation phase
· The Company aims to become the world’s largest, lowest cost and lowest-emissions producer of two critical minerals – titanium (rutile) and graphite
Key Management Appointments to Drive Project Optimisation and Development at Kasiya
· Appointment of experienced Africa-based mining executive, Mr Frank Eagar, as the new Managing Director and CEO
· Previous Managing Director Dr Julian Stephens has transitioned to Non-Executive Director
· Key technical appointments of experienced African engineering, social and environmental teams to work on advancing the Kasiya project
Lithium-Ion battery graphite program upscaled
· Over 60 tonnes of ore was extracted targeting production of an initial 600kg of natural graphite for lithium-ion battery anode test work and product qualification
· The upscaled graphite qualification program will support ongoing Project studies
· Sovereign and Rio Tinto have agreed to collaborate to qualify graphite from Kasiya, with a particular focus on supplying the spherical purified graphite (SPG) segment of the lithium-ion battery anode market
· This graphite qualification program coincides with China’s announced curbs on exports of natural graphite, a critical mineral for the US, EU, Japan and Australia
Highly-experienced social specialist appointed
· Africa-based social specialist consultancy, SocialEssence were appointed to lead social and community development programs for Sovereign in Malawi
· SocialEssence joins Sovereign’s Owners Team and will design, implement, and manage several social and community initiatives which will feed into Project studies and permitting
· SocialEssence has a strong and successful track record of implementing social responsibility programs across southern Africa, including at First Quantum Minerals’ Zambian project
Classification 2.2: This announcement includes Inside Information
ENQUIRIES
|
Mr Frank Eagar (South Africa/Malawi) +27 76 753 5377 |
Sam Cordin (Perth) |
Sapan Ghai (London)
|
|
Nominated Adviser on AIM and Joint Broker |
|
|
SP Angel Corporate Finance LLP |
+44 20 3470 0470 |
|
Ewan Leggat Charlie Bouverat Harry Davies-Ball |
|
|
|
|
|
Joint Brokers |
|
|
Berenberg |
+44 20 3207 7800 |
|
Matthew Armitt |
|
|
Jennifer Lee |
|
|
|
|
|
Buchanan |
+ +44 20 7466 5000 |
KASIYA PROJECT OPTIMISATION
The Pre-Feasibility Study (PFS) confirmed Kasiya as a potential major critical minerals project with an extremely low CO2-footprint delivering substantial volumes of natural rutile and graphite to global markets while generating significant economic returns.
At the completion of the PFS, the Company commenced an optimisation study phase prior to advancing to the Definitive Feasibility Study (DFS). During the quarter, significant field activities and test work commenced.
The optimisation phase will be conducted in collaboration with the Company’s strategic partner, Rio Tinto, following their investment into the Company in July 2023.
KEY MANAGEMENT APPOINTMENTS TO DRIVE PROJECT OPTIMISATION
Effective from 20 October 2023, the Company appointed Mr Frank Eagar as Managing Director and Chief Executive Officer (CEO). Dr Julian Stephens, transitioned to a Non-Executive Director of Sovereign, remaining as a consultant assisting and supporting the incoming technical and management team.
Mr Eagar has over 20 years’ experience in the financing, permitting, development and operation of mining projects with a strong focus in southern Africa.
Mr Eagar is a Chartered Accountant who has gained extensive corporate, commercial and technical experience in the mining sector throughout his career. Mr Eagar has previously held a number of senior executive positions in the resources sector, more recently with African mining focused private equity firm AMED Funds, which included acting as Chief Financial Officer (CFO) for AMED’s controlled company, Central Copper Resources PLC (Central Copper).
Prior to Central Copper, Mr Eagar was the CEO (and prior to that the CFO) of Baobab Steel Limited (Baobab) another AMED controlled company, where he managed the completion of a DFS and a joint venture with the World Bank’s IFC to procure strategic investors and raise project finance for Baobab’s US$1 Billion, fully permitted, integrated 500ktpa Steel and Vanadium Project in Mozambique.
Mr Eagar joined Sovereign in December 2022 as General Manager in Malawi, where he has already expanded the team with a focus on Malawian nationals, developed strong relationships with Government and developed a clear understanding of the Kasiya Project and its development landscape.
Sovereign has also made several key technical appointments as the Company transitions into project optimisation and development of the Kasiya Project and is poised to become a significant supplier of natural rutile and graphite. These key appointments bring a strong track record of successful large-scale project development and operations management, as well as extensive experience in southern Africa.
These management changes come at an important time for the Company as it transitions from the PFS into the next study phases including optimisation, community and stakeholder engagements and project permitting.
LITHIUM-ION BATTERY GRAPHITE PROGRAM UPSCALED
During the quarter, Sovereign completed the extraction of a 60 tonne bulk sample of ore from Kasiya to produce an initial 600kg of natural flake graphite. This sampling program is part of the Company’s graphite qualification, product development and downstream battery anode test work phase. A major component to graphite sales agreements is customer qualification with graphite produced from this program to be shared with prospective end-users in addition to being used for upscaled downstream test work.
The mechanised drill program used a bespoke 300mm diameter spiral auger to extract the material from across Kasiya’s planned future pits with sampling to a maximum 20m depth.
Figures 1 & 2: Bulk sample mechanised spiral drilling and sampling at Kasiya in November 2023
The bulk sample is undergoing pre-processing at the Company’s laboratory in Lilongwe, Malawi. The sample is being processed utilising the newly installed Kwatani 30-inch single and double-deck vibrating separators for sizing and de-sliming (Figure 3). The sand fraction is then processed over the new Holman Wilfley 2000 wet shaking table to produce a graphite pre-concentrate and a separate heavy mineral concentrate (HMC) containing the rutile (Figure 4). The graphite pre-concentrate is expected to grade 4-5% Ct.
Figure 3. Installation of the new Kwatani 30-inch single-deck and double-deck vibrating separators for sizing and de-sliming bulk samples at the Company’s Malawi laboratory and metallurgical facility
Figure 4: Holman-Wilfley 2000 Series shaking table operating at Sovereign’s Lilongwe laboratory in Malawi.
Final processing will then be completed at international commercial laboratories. The graphite pre-concentrate will undergo traditional flotation and polishing processes to target >96% Ct product suitable as a lithium-ion battery anode feedstock.
Downstream Test work
The initial ~600kg of flake graphite product produced will be used for downstream test-work and product qualification targeting the battery anode sector. Previously reported initial characterisation test work on Kasiya’s graphite has indicated excellent suitability for use in lithium-ion batteries with very high purity and very high crystallinity being the key features (refer to ASX Announcement dated 8 June 2023).
Downstream test-work and qualification on the flake graphite product will involve the following stages to be completed at recognised international battery sector laboratories;
– Purification to >99.95% Ct
– Micronisation
– Spheronisation
– Carbon coating
– Anode production
– Electrochemical characterisation
Raw flake graphite products plus final CSPG (coated spheronised graphite product) will be provided to potential offtakers for assessment and pre-qualification. Through Sovereign’s long-term experience in graphite, the Company has built a strong understanding of the graphite market and developed well-established relationships with offtakers and customers.
Figures 5 & 6: SEM micrograph of Kasiya graphite flotation concentrate from previous test work
Industry Developments
The upscaled graphite program comes as China implements curbs on exports of natural graphite under “national security” concerns. Effective 1 December 2023, China requires export permits for some graphite products including natural graphite and natural graphite products critical to EV production. China is the world’s top graphite producer and exporter and also refines more than 90% of the world’s graphite into the material that is used in virtually all EV battery anodes.
China’s commerce ministry said the move on graphite was “conducive to ensuring the security and stability of the global supply chain and industrial chain, and conducive to better safeguarding national security and interests”.
Since the restrictions, total exports of flake graphite dropped by 94% on a monthly basis in December, while exports of spherical graphite slumped by 92% (China customs data). Exports to major destinations also slowed notably in December. Flake graphite volumes to Japan fell from 6,138 tonnes in November to zero in December, while exports to the United States fell from 511 tonnes in November to zero in December (Fastmarkets). It was reported by Japan News, that, Japan, which depends on China for 90% of its graphite imports, likely needs to urgently diversify its procurement sources.
Kasiya is one of the world’s largest natural flake graphite deposits and has the potential to become a key source of long term strategic supply to the US, UK, EU, Japan and South Korea.
HIGHLY-EXPERIENCED SOCIAL SPECIALIST APPOINTED
Subsequent to the quarter, Sovereign appointed SocialEssence (Pty) Ltd (SocialEssence), an Africa-based specialist social performance consultancy, who will assist in the continued development of the Company’s stakeholder relations, social performance objectives and its Community and Social Responsibility (CSR) framework.
Sovereign has engaged SocialEssence to design and execute social performance activities during the DFS phase. Founder, Mr Garth Lappeman, has over 16 years of on the ground social performance planning and implementation experience in accordance with IFC Performance Standards and World Bank Environmental, Health and Safety Guidelines. SocialEssence has been active in a number of countries working on projects in Angola, Botswana, Democratic Republic of Congo, Kenya, Kyrgyzstan, Liberia, Malawi, Mozambique, Namibia, Panama, Uganda, Sierra Leone, South Africa, Northern Sudan, Tanzania, Uzbekistan, and Zambia.
Most notably, in Zambia, SocialEssence’s Director was involved from early exploration through to steady state production of First Quantum Minerals Ltd’s (First Quantum Minerals) Trident operations, which includes the Sentinel Copper Mine which is of similar scale to Sovereign’s Kasiya project. Mr Lappeman was responsible for implementing and managing social and community initiatives for First Quantum Minerals as it established its large-scale commercial operations
SocialEssence will:
· prepare Kasiya’s Social Impact Assessment and Management Plan for the DFS and permitting;
· design, implement and manage social performance activities including stakeholder engagement, development of key relationships;
· prove the feasibility of critical social performance measures (including early local content, and piloting of livelihood restoration programs, and piloting of rehabilitation activities to restore land for agricultural use); and
· align with the Company’s ESG Framework.
NEXT STEPS
Sovereign is currently conducting an optimisation study prior to advancing to the DFS. The Company aims to become the world’s largest, lowest cost and lowest-emissions producer of two critical minerals – titanium (rutile) and graphite. The Company plans to update the market on the progress of the following in coming months:
· Further appointments to owner’s team to build on the Company’s execution capabilities;
· Results of graphite product development, downstream and qualification test work;
· Regional hand-auger drilling on mineralisation extensions;
· Progress on the optimisation work streams alongside Rio Tinto via the project Technical Committee; and
· Community and social engagements across Malawi and the Kasiya area.
Competent Person Statement
The information in this announcement that relates to the Mineral Resource Estimate is extracted from an announcement dated 5 April 2023 entitled ‘Kasiya Indicated Resource Increased by over 80%’ which is available to view at www.sovereignmetals.com.au and is based on, and fairly represents information compiled by Mr Richard Stockwell, a Competent Person, who is a fellow of the Australian Institute of Geoscientists (AIG). Mr Stockwell is a principal of Placer Consulting Pty Ltd, an independent consulting company. Sovereign 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 included in the original announcement continue to apply and have not materially changed; and c) the form and context in which the relevant Competent Persons’ findings are presented in this announcement have not been materially changed from the original announcement.
The information in this announcement that relates to Production Targets, Ore Reserves, Processing, Infrastructure and Capital Operating Costs, Metallurgy (rutile and graphite) is extracted from an announcement dated 28 September 2023 entitled ‘Kasiya Pre-Feasibility Study Results’ which is available to view at www.sovereignmetals.com.au. Sovereign 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 Production Target, and related forecast financial information derived from the Production Target included in the original announcement continue to apply and have not materially changed; and c) the form and context in which the relevant Competent Persons’ findings are presented in this presentation have not been materially modified from the Announcement.
|
Ore Reserve for the Kasiya Deposit |
|
||||||
|
Classification |
Tonnes |
Rutile Grade |
Contained Rutile |
Graphite Grade (TGC) (%) |
Contained Graphite |
RutEq. Grade* |
|
|
Proved |
– |
– |
– |
– |
– |
– |
|
|
Probable |
538 |
1.03% |
5.5 |
1.66% |
8.9 |
2.00% |
|
|
Total |
538 |
1.03% |
5.5 |
1.66% |
8.9 |
2.00% |
|
* RutEq. Formula: Rutile Grade x Recovery (100%) x Rutile Price (US$1,484/t) + Graphite Grade x Recovery (67.5%) x Graphite Price (US$1,290/t) / Rutile Price (US$1,484/t). All assumptions are from the Kasiya PFS ** Any minor summation inconsistencies are due to rounding
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 Statement
This release may include forward-looking statements, which may be identified by words such as “expects”, “anticipates”, “believes”, “projects”, “plans”, and similar expressions. These forward-looking statements are based on Sovereign’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 Sovereign, which could cause actual results to differ materially from such statements. There can be no assurance that forward-looking statements will prove to be correct. Sovereign 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.
APPENDIX 1: RELATED PARTY PAYMENTS
During the quarter ended 31 December 2023, the Company made payments of $461,000 to related parties and their associates. These payments relate to existing remuneration arrangements (executive salaries, director fees, superannuation and bonuses ($273,000)), business development services ($35,000) and provision of serviced office facilities, company secretarial services and administration services ($153,000).
APPENDIX 2: SUMMARY OF MINING TENEMENTS
As at 31 December 2023, the Company had an interest in the following tenements:
|
Licence |
Holding Entity |
Interest |
Type |
Licence Renewal Date |
Expiry Term Date1 |
Licence Area (km2) |
Status |
|
EL0609 |
MML |
100% |
Exploration |
25/09/2024 |
25/09/2028 |
440.5 |
Granted |
|
EL0582 |
SSL |
100% |
Exploration |
15/09/20232 |
15/09/2027 |
285.0 |
Granted |
|
EL0492 |
SSL |
100% |
Exploration |
29/01/2025 |
29/01/2025 |
935.4 |
Granted |
|
EL0528 |
SSL |
100% |
Exploration |
27/11/2023 |
27/11/2025 |
16.2 |
Granted |
|
EL0545 |
SSL |
100% |
Exploration |
12/05/2024 |
12/05/2026 |
53.2 |
Granted |
|
EL0561 |
SSL |
100% |
Exploration |
15/09/20232 |
15/09/2027 |
124.0 |
Granted |
|
EL0657 |
SSL |
100% |
Exploration |
3/10/2025 |
3/10/2029 |
2.3 |
Granted |
Notes:
SSL: Sovereign Services Limited, MML &McCourt Mining Limited
1 An exploration licence (EL) covering a preliminary period in accordance with the Malawi Mines and Minerals Act (No 8. Of 2019) (Mines Act) is granted for a period not exceeding three (3) years. Thereafter two successive periods of renewal may be granted, but each must not exceed two (2) years. This means that an EL has a potential life span of seven (7) years. ELs that have come to the end of their term can be converted by the EL holder into a retention licence (RL) for a term of up to 5 years subject to meeting certain criteria.
2 The Company submitted an extension application for EL0582 and EL0561 prior to the renewal date in accordance with the Mines Act .
APPENDIX 3: MINING EXPLORATION EXPENDITURES
During the quarter, the Company made the following payments in relation to mining exploration activities:
|
Activity |
A$’000 |
|
Drilling |
(291) |
|
Assaying and Metallurgical Test-work |
(162) |
|
Studies, Reserve/Resource Estimation, Programs |
(986) |
|
Malawi Operations – Site Office, Personnel, Field Supplies, Equipment, Vehicles and Travel |
(984) |
|
Total as reported in Appendix 5B |
(2,423) |
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 |
||
|
Sovereign Metals Limited |
||
|
ABN |
Quarter ended (“current quarter”) |
|
|
71 120 833 427 |
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 |
(2,423) |
(4,296) |
|
(a) exploration & evaluation |
|||
|
(b) development |
– |
– |
|
|
(c) production |
– |
– |
|
|
(d) staff costs |
(780) |
(1,107) |
|
|
(e) administration and corporate costs |
(414) |
(928) |
|
|
1.3 |
Dividends received (see note 3) |
– |
– |
|
1.4 |
Interest received |
673 |
745 |
|
1.5 |
Interest and other costs of finance paid |
– |
– |
|
1.6 |
Income taxes paid |
– |
– |
|
1.7 |
Government grants and tax incentives |
– |
– |
|
1.8.1 |
Other – Demerger Costs |
(41) |
(67) |
|
1.8 |
Other – Business Development |
(325) |
(595) |
|
1.9 |
Net cash from / (used in) operating activities |
(3,310) |
(6,248) |
|
2. |
Cash flows from investing activities |
– |
– |
|
2.1 |
Payments to acquire or for: |
||
|
(a) entities |
|||
|
(b) tenements |
– |
– |
|
|
(c) property, plant and equipment |
(243) |
(243) |
|
|
(d) exploration & evaluation |
– |
– |
|
|
(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 |
– |
34 |
|
2.4 |
Dividends received (see note 3) |
– |
– |
|
2.5 |
Other (provide details if material) |
– |
– |
|
2.6 |
Net cash from / (used in) investing activities |
(243) |
(209) |
|
3. |
Cash flows from financing activities |
– |
40,598 |
|
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 |
(13) |
(252) |
|
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 |
(13) |
40,346 |
|
4. |
Net increase / (decrease) in cash and cash equivalents for the period |
||
|
4.1 |
Cash and cash equivalents at beginning of period |
43,021 |
5,564 |
|
4.2 |
Net cash from / (used in) operating activities (item 1.9 above) |
(3,310) |
(6,248) |
|
4.3 |
Net cash from / (used in) investing activities (item 2.6 above) |
(243) |
(209) |
|
4.4 |
Net cash from / (used in) financing activities (item 3.10 above) |
(13) |
40,346 |
|
4.5 |
Effect of movement in exchange rates on cash held |
(18) |
(16) |
|
4.6 |
Cash and cash equivalents at end of period |
39,437 |
39,437 |
|
5. |
Reconciliation of cash and cash equivalents |
Current quarter |
Previous quarter |
|
5.1 |
Bank balances |
129 |
189 |
|
5.2 |
Call deposits |
39,308 |
42,832 |
|
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) |
39,437 |
43,021 |
|
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 |
461 |
|
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. |
||
|
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 |
Amount drawn at quarter end |
|
7.1 |
Loan facilities |
– |
– |
|
7.2 |
Credit standby arrangements |
– |
– |
|
7.3 |
Other (please specify) |
– |
– |
|
7.4 |
Total financing facilities |
– |
– |
|
|
|||
|
7.5 |
Unused financing facilities available at quarter end |
– |
|
|
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. |
||
|
|
|||
|
8. |
Estimated cash available for future operating activities |
$A’000 |
|
8.1 |
Net cash from / (used in) operating activities (item 1.9) |
(3,310) |
|
8.2 |
(Payments for exploration & evaluation classified as investing activities) (item 2.1(d)) |
– |
|
8.3 |
Total relevant outgoings (item 8.1 + item 8.2) |
(3,310) |
|
8.4 |
Cash and cash equivalents at quarter end (item 4.6) |
39,437 |
|
8.5 |
Unused finance facilities available at quarter end (item 7.5) |
– |
|
8.6 |
Total available funding (item 8.4 + item 8.5) |
39,437 |
|
8.7 |
Estimated quarters of funding available (item 8.6 divided by item 8.3) |
12 |
|
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. |
||
|
8.8 |
If item 8.7 is less than 2 quarters, please provide answers to the following questions: |
|
|
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? |
||
|
Answer: Not applicable |
||
|
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 |
||
|
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? |
||
|
Answer: Not applicable |
||
|
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. |
||
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.
#SVML Sovereign Metals LTD – Lithium-Ion Battery Graphite Program Upscaled
KASIYA LITHIUM-ION BATTERY GRAPHITE PROGRAM SIGNIFICANTLY UPSCALED
· Bulk sampling program underway at Kasiya to extract 100 tonnes of ore to produce over 1,000kg of natural graphite for lithium-ion battery anode testwork and product qualification
· The upscaled graphite qualification program will support upcoming project studies with our strategic partner, Rio Tinto
· Sovereign and Rio Tinto have agreed to collaborate to qualify graphite from Kasiya, with a particular focus on supplying the spherical purified graphite (SPG) segment of the lithium-ion battery anode market
· Previous testwork confirmed Kasiya’s graphite to have near perfect crystallinity and high purity – both key attributes for suitability in lithium-ion battery feedstock
· Kasiya’s recent Pre-Feasibility Study (PFS) confirmed it could be one of the world’s largest natural graphite producers at 244kt per annum with the lowest cash operating costs globally at US$404/t and the lowest CO2-footprint
· As one of the largest known natural graphite deposits globally, close to existing infrastructure connecting it to global markets, Kasiya is set to become a strategic source of long term, secure supply outside of China
· This graphite qualification program coincides with news of China’s curbs on exports of natural graphite, a critical mineral for the US, EU, Japan and Australia
Sovereign Metals Limited (ASX:SVM; AIM:SVML) (the Company or Sovereign) is pleased to announce that a bulk sampling program to extract over 100 tonnes of ore from Kasiya is underway. The bulk sampling program is part of the Company’s graphite bulk sample program for qualification, downstream testwork and product development. A major component to graphite sales agreements is customer qualification with graphite produced from this program to be shared with prospective end-users in addition to being used for upscaled downstream test-work.
The Company’s upscaled graphite program comes as China implements curbs on exports of natural graphite under “national security” concerns. Kasiya is one of the world’s largest natural graphite deposits outside of China and has the potential to become a key source of strategic supply to the US, UK, EU, Japan and South Korea. According to industry experts Benchmark Mineral Intelligence, China currently produces 61% of all flake graphite used in the production of lithium-ion battery anodes and accounts for 93% of all graphite anode production globally.
Classification: 3.1 Additional regulated information required to be disclosed under the laws of a Member State
ENQUIRIES
|
Frank Eagar (South Africa/Malawi) +61(8) 9322 6322 |
Sam Cordin (Perth) |
Sapan Ghai (London) |
|
Nominated Adviser on AIM and Joint Broker |
|
|
SP Angel Corporate Finance LLP |
+44 20 3470 0470 |
|
Ewan Leggat Charlie Bouverat Harry Davies-Ball |
|
|
|
|
|
Joint Brokers |
|
|
Berenberg |
+44 20 3207 7800 |
|
Matthew Armitt |
|
|
Jennifer Lee |
|
|
|
|
|
Tavistock PR |
+44 20 7920 3150 |
The recently released PFS confirmed Kasiya as a potential major critical minerals project with an extremely low CO2-footprint delivering significant long-term volumes of natural rutile (the highest-grade, purest, natural titanium feedstock) and graphite (a key component of an electric vehicle battery) while generating significant economic returns. Both titanium and natural graphite are critical to several of the world’s economies as well as crucial to decarbonisation solutions required to meet “Net-Zero” and other targets set by policymakers.
BULK SAMPLING PROGRAM
The mechanised drill program will use a custom-made 300mm diameter spiral auger to extract over 100 tonnes of material from across Kasiya’s planned future pits with sampling to a maximum 20m depth (Figure 1).
The sampling program forms part of the Company’s program for graphite qualification, downstream testwork and product development, and is designed to produce over 1,000kg each of flake graphite and natural rutile products.
The bulk sample will be processed at the Company’s laboratory in Lilongwe, Malawi. This will be achieved with the newly installed Kwatani 30-inch single and double-deck vibrating separators for sizing and de-sliming (Figure 2). The sand fraction will then be processed over the new Holman Wilfley 2000 wet shaking table to produce a graphite pre-concentrate and a separate heavy mineral concentrate (HMC) containing the rutile (Figure 3). The graphite pre-concentrate is expected to grade 4-5% Ct whilst the HMC is expected to grade ~30% contained rutile.
Figure 1. Mechanised drill with custom-made 300mm diameter spiral auger
Figure 2. Installation of the new Kwatani 30-inch single-deck and double-deck vibrating separators for sizing and de-sliming bulk samples at the Company’s Malawi laboratory and metallurgical facility
Figure 3: Holman-Wilfley 2000 Series shaking table to be installed at Sovereign’s Lilongwe laboratory in Malawi.
Final processing will then be completed at commercial metallurgical laboratories in Canada and Australia. The graphite pre-concentrate will undergo traditional flotation and polishing processes to target >96% Ct product for lithium-ion battery anode feedstock. The HMC will undergo gravity spiral cleaner stages followed by electrostatic and magnetic separation stages to produce a +95% TiO2 natural rutile products.
PLANNED DOWNSTREAM TESTWORK
The 1,000kg of flake graphite product produced will be used for downstream test-work and initial product qualification targeting the battery anode sector. Previously reported initial characterisation testwork on Kasiya’s graphite has indicated excellent suitability for use in lithium-ion batteries with very high purity and very high crystallinity being the key features.
Downstream test-work and qualification on the 1,000kg flake graphite product produced will involve the following stages to be completed at recognised international battery sector laboratories;
– Purification via an optimised HF-free reagent scheme to >99.95% Ct
– Micronisation
– Spheronisation
– Carbon coating
– Anode production
– Electrochemical characterisation
Raw flake graphite products plus final CSPG (coated spheronised graphite product) will be provided to potential offtakers for assessment and pre-qualification. Through Sovereign’s well-established experience in graphite, the Company has built a strong understanding of the product’s market and developed relationships with well-established offtakers and customers.
A major component to graphite sales agreements is customer qualification, and this is a key reason for initiating the graphite bulk sample program and scaling up in-country facilities in order to continuously produce bulk samples. The graphite produced from this program will be shared with prospective end-users and is an important next step for Sovereign to qualify the Kasiya graphite product.
Sovereign’s recent initial graphite characterisation testwork conducted by an independent German industrial minerals specialist demonstrated superior qualities and excellent suitability for its use in lithium-ion batteries. Further downstream testwork is planned that will use the graphite concentrate produced from this current bulk sampling program.
Figures 4 & 5: SEM micrograph of Kasiya graphite flotation concentrate from previous testwork
INDUSTRY DEVELOPMENTS
On 20 October 2023, Reuters reported, effective 1 December 2023, that China would require export permits for some graphite products including natural graphite and natural graphite products critical to EV production. China is the world’s top graphite producer and exporter and also refines more than 90% of the world’s graphite into the material that is used in virtually all EV battery anodes.
China’s commerce ministry said the move on graphite was “conducive to ensuring the security and stability of the global supply chain and industrial chain, and conducive to better safeguarding national security and interests”.
Competent Person Statement
The information in this announcement that relates to Production Targets, Ore Reserves, Processing, Infrastructure and Capital Operating Costs, Metallurgy (rutile and graphite) is extracted from an announcement dated 28 September 2023 entitled ‘Kasiya Pre-Feasibility Study Results’ which is available to view at www.sovereignmetals.com.au. Sovereign 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 Production Target, and related forecast financial information derived from the Production Target included in the original announcement continue to apply and have not materially changed; and c) the form and context in which the relevant Competent Persons’ findings are presented in this presentation have not been materially modified from the Announcement.
Forward Looking Statement
This release may include forward-looking statements, which may be identified by words such as “expects”, “anticipates”, “believes”, “projects”, “plans”, and similar expressions. These forward-looking statements are based on Sovereign’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 Sovereign, which could cause actual results to differ materially from such statements. There can be no assurance that forward-looking statements will prove to be correct. Sovereign 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.
#FCM First Class Metals PLC – Half-year Report
I. Operational Highlights
In early May FCM announced that field work had been initiated on its projects in Canada, with three exploration teams deployed:
· Channel Sampling of the Rare Earth Element (REE) Diatreme at McKellar underway.
· Sunbeam historic review widened to encompass detailed core review from historical drill holes. Grades up to 93.3g/t Gold (Au).
· Field base set up and exploration soon to commence on the North Hemlo and Esa properties to follow up on the successes of 2022.
A property wise summary of the exploration work conducted in the first six months of 2023 is enumerated as follows:
North Hemlo
· The Dead Otter Lake area is situated 20.5km North of the iconic Barrick Hemlo 23m oz producing gold mine.
· The main event of significance is the Identification of a +3km long gold (‘Au’) and molybdenum (‘Mo’) anomalous trend – named the Dead Otter Lake trend (‘DOT’), which is situated to the southeast of the historic Dead Otter Lake occurrence. Grab samples recorded up to 19.6g/t Au along the trend. Sampling has extended anomalous Au/Mo mineralisation for +3km to the SE from the historic showing (3.7 g/t Au, 0.59% Mo). The mineralised structure closely mimics the granite contact. The 19.6 g/t Au sample, in the extreme SE of the trend could be where one of potentially two subparallel arcuate structures intersects the trend.
· The Exploration currently in progress at North Hemlo is with a clear focus on drill preparation. Visible gold has been observed in multiple grab samples from the Dead Otter Trend.
· Exploration permit has been submitted to the Provincial authorities, reflecting our confidence in our exploration progress and our commitment to fulfilling all necessary regulatory requirements.
In May, FCM signed an exclusivity agreement for an Option cum Earn-In arrangement with Ongold a private company in respect to its claims contiguous to North Hemlo.
Zigzag
· The signing of the Earn-in Agreement with Nuinsco Resources Limited (“Nuinsco”) completes the process outlined in the ‘Exclusivity Agreement’ announced on the 12th of December 2022 for the Zigzag hard rock lithium property in NW Ontario.
· The project funding was also announced in the same news release, James Goozee a High Net Worth Individual (“HNWI”) who is a battery metals focussed investor took the full £300,000 private subscription at 16p per share.
· Historic grades reported at surface were up to 1.68% lithium (Li20) over 7.9m and 0.168% tantalum (Ta205) over 2.54m. The claim group covers the historic Tebishogeshik occurrence as well as other mineralised occurrences.
· The pegmatite hosting the deposit is reported to be more than 800m in length and 20m thick at surface.
· Sampling by Nuinsco returned strongly anomalous lithium, tantalum, and rubidium, peaking at 3.55% Li20 with significant tantalum and rubidium results at 836 ppm Ta₂O5, and 4,003 ppm Rubidium Rb₂2O.
· Exploration Permit already in place, allowing for exploration activities which may include stripping, trenching, and drilling.
· The property is located 10.5km from the Green Technology Metals Limited (ASX: GT1) Seymour Project and several other hard rock lithium properties. It is also close to nearby current and future planned key infrastructure.
· Zigzag Lithium-Initial reconnaissance trip with the property completely under the cover of snow returns grades of Lithium (Li) up to 1.00% and Tantalum (Ta) up to 198 ppm.
Sunbeam
· The historic data and core reviews have been completed.
· Extensive prospecting, sampling, and mapping programs were conducted, this includes rediscovery of a 3m wide quartz vein on the Pettigrew Trend with over 200 samples collected.
· Project being prepared for stripping / channel sampling in order to identify preferred drill locations.
West Pickle Lake (‘WPL’)
· First Class Metals is delighted to report assay results from the West Pickle Lake massive sulphide discovery.
· These drill results reinforce both the high-grade nature of the West Pickle Lake Zone and the potential for tonnage as reported in hole TK22-114, the widths and grades are similar to the Palladium One RJ Zone approx. 2.5km to the East and further develops the theory of the chonolith / feeder dykes in the area to host significant mineralisation.
Selected highlights reported by Palladium One from the West Pickle Zone:
o TK-22-072 2.0% Ni, 0.9% Cu, 0.04% Co, 0.36 g/t Total Precious Metals (“TPM”) (Pt+Pd+Au) over 4.1 meters of massive and semi-massive sulphides in hole
o Including 5.3 Ni%, 1.5% Cu, 0.12% Co, 0.67 g/t TPM over 1.5 meters
o ThesTK-22-073 7.2% Ni, 2.0% Cu, 0.10% Co, 0.56 g/t Total Precious Metals (“TPM”) (Platinum (Pt) + Palladium (Pd) + Gold (Au)) over 2.6 meters of massive sulphides in hole.
o Including 10.3% Ni, 2.9% Cu, 0.15% Co, 0.80 g/t TPM over 1.8 meters
o TK-22-074 3.9% Nickel (Ni), 2.5% Copper (Cu), 0.05% Co, 0.55 g/t Total Precious Metals (“TPM”) (Pt+Pd+Au) over 2.0 meters of massive and semi-massive sulphides in hole
o Including 8.1% Ni, 2.8% Cu, 0.11% Co, 1.05 g/t TPM over 0.9 meters
o TK22-114 0.6% Ni, 0.4% Cu, 0.01% Co, 0.08 g/t Total Precious Metals (“TPM”) (Pt+Pd+Au) over 28.2 meters
o Including 2.0% Ni, 0.6% Cu, 0.04% Co, 0.12 g/t TPM over 3.2 meters
o TK22-118 0.43% Ni, 0.26% Cu, 0.01% Co, 0.06 g/t TPM over 27.0 meters.
o Including 2.0% Ni, 0.7% Cu, 0.04% Co, 0.14 g/t TPM over 1.0 meters
o TK22-116 1.5% Ni, 0.7% Cu, 0.02% Co, 0.30 g/t TPM over 8.0 meters.
o Including 10.0% Ni, 4.47% Cu, 0.14% Co, 2.13 g/t TPM over 1.0 meters
· Hole TK22-76 drilled just off the 100% owned FCM North Hemlo Property boundary by Palladium One intercepts 46.3m of anomalous nickel mineralisation in an east west trending structure, further proving up Palladium One’s property wide feeder dyke/chonolith geological model.
· West Pickle mineralised strike length increased to over 600 meters, remains open to the east and west.
· To date a total of 32 holes, totalling 6,766 meters have been drilled in the vicinity of the West Pickle Discovery.
Esa
· Total of 478 soil samples were collected from 11 predominantly subparallel, north – south soil lines in 2022.
· An intermittent 4km anomalous zone has been identified corresponding to the surface expression of the inferred shear.
· Multiple 10-95 ppb gold (Au) and key pathfinder elements including molybdenum (Mo), antimony (Sb) and arsenic (As).
· Anomalous trends identified by the soil sampling as well as the background magnetics highlighting NE structures intersecting the shear, including: Hemlo ‘look alike’ angular boulder identified, which reported 0.7ppm Au which is considered significant.
· Extensive soil sampling campaign completed to build on the successful 2022 program with 539 samples now awaiting assay results.
McKellar
“McKellar Trend” – Volcanic Massive Sulphide (“VMS”) conceptual trend supported by reconnaissance and assay results, extending over 550m, open ‘along strike’ in both directions.
· Over 100 grab samples taken with highlights including 4.82% Zinc (Zn) 80 g/t Silver (Ag)
· Work programme further proves up conceptual VMS model and extension of historical high grade metal occurrences across the property.
· Eight contiguous claims have been staked, adjoining the southern boundary of the McKellar property.
· McKellar has a proven potential for Rare Earth Elements (“REE”), confirmed by sawn channel sampling of diatreme verifies historical findings and further evidenced REE system.
Enable
· Field work identified a new gold (Au) with significant silver (Ag) ‘showing’ on the property.
· The historic West Perch Lake showing of ~2ppm Au confirmed and expanded.
· An exploration permit application is being drafted which will allow ‘mechanical exploration’ including drilling.
· The winter 2023 exploration campaign was completed with a programme of lake sediment sampling.
Sugar Cube
· In Q1 2023 a geophysics survey consisting of 578 line km comprising a helicopter borne low level 100m line spacing magnetic as well as electromagnetic (EM) survey was completed.
II. Operational Overview
North Hemlo & Esa
Figure showing the relative location of North Hemlo (including OnGold), Esa and Magical in respect to the Williams gold mine and the district scale shears associated with mineralisation
North Hemlo
Overview
The Flagship North Hemlo property historically comprised of three claim areas: Pezim I, Pezim II, and Wabikoba, which weren’t contiguous. However, the addition of the Hemlo North block, acquired from Power Metals Plc., brought North Hemlo together as one cohesive block.
The property now extends across 448 claims covering ~98km². Note: 33 claims are effectively under a Joint Venture agreement with Palladium One and FCM’s ownership is reduced to 20%.
There were limited historical showings on the property, the most important being the gold / molybdenum showing at Dead Otter Lake. The geology / geophysical signature of the Dotted Lake / Fairservice prospect continues onto the North Hemlo block. Furthermore, the JV – Earn-in with Palladium One has significantly enhanced the base, battery, and critical metal potential of the block.
Further potential is derived from the arcuate inferred shears which mimic the shear hosting the Hemlo gold mine.
In May, FCM signed exclusivity agreement for an Option cum Earn-In arrangement with Ongold a private company in respect to its 163 claims, covering 34 km² contiguous to the north of the North Hemlo property.
An Exploration permit, required for ‘invasive’ exploration such as trenching, stripping and drilling, has been drafted and after discussion with the First Nations submitted to the Ontario Provincial Mining authority for review.
Esa
Overview
The Esa property contains 86 claims, covers 20.6km², and is located approximately 11km northeast from the Barrick Hemlo gold mine, immediately south of FCM’s North Hemlo property.
The claim block is dissected by a geological / geophysical feature, which adds significant merit to the block’s potential. This structure is considered one of three subparallel, arcuate trends contained in the Hemlo ‘north limb’, which mirror the Hemlo trend to the south. Re-interpretation of geophysical data further enhanced the property’s prospectivity. Extensive exploration was conducted along this feature in 2022, and further soils sampling and prospecting conducted in 2023.
The assessment credits generated during the year will maintain the property in good standing through 2023.
An Exploration permit, required for ‘invasive’ exploration such as trenching, stripping, and drilling has been drafted and after discussion with the First Nations submitted to the Ontario Provincial Mining authority for review.
Work Conducted in 2023
A team was mobilised in early May to continue the exploration at Esa, focusing on the anomalous soil sample results as well as the 0.7ppm boulder identified in the central eastern sector as detailed in the recent news release.
A Further 534 soil samples and 5 rock chip samples have been collected, both subparallel to the shear – orthogonal to the north striking magnetic features- as well as in the areas of higher Au anomalism in the previous programme. Results have not yet been received.
Exploration at North Hemlo project started later in the month when the snow cover thawed. To advance the prospect towards drill ready status, the intention is to follow up the encouraging sampling on the Dead Otter Lake trend which has returned anomalous gold results along its 3km plus strike up to 19.6 g/t Au. Over the winter months ninety-six lake sediment samples as well as a number of rock samples were collected from North Hemlo, with very positive results being reported.
Discussions are ongoing with drill companies to undertake a maiden drilling programme at Esa and or North Hemlo. To this end the Application for an Exploration permit has been submitted to the Provincial authorities.
Sunbeam
Overview
The Sunbeam Gold Property includes the historic Sunbeam Mine. This was a high-grade underground gold mine which operated from 1898 to 1905. The core of the Property consists of 104 unpatented mining claims covering 20.2km² in the Ramsay-Wright Township in North-western Ontario.
The Option to purchase was signed with Nuinsco in October 2022. Nuinsco holds the claims through an underlying agreement with several prospectors who held the claims. In February 2023, FCM made a second payment to Nuinsco, and the claim ownership was transferred to FCMC for the central Sunbeam area. The third and final payment, (in total Cdn$700,00), was made in June. The Sunbeam extended (English Option extending over 24.8km²) is still part of an Option agreement with Nuinsco and the claim owner, which FCM has assumed.
Work conducted in 2023
Historic data and core reviews completed alongside extensive prospecting, sampling, and mapping program which includes rediscovery of a 3m wide quartz vein on the Pettigrew Trend. Mechanical stripping and then a targeted, systematic channel sampling programme has been undertaken at potential drill locations at the Pettigrew and Roy occurrences. Trail access for a drill rig into the same areas was also completed.
McKellar
Overview
The McKellar property, originally comprising 58 claims, covers ~10.1km² and is situated in prime geological terrain within the Coldwell complex. Located to the west of Generation Mining’s Palladium Project, McKellar is roughly 25 kilometres from the town of Marathon, the main service centre for Barrick’s Hemlo mine. McKellar has a number of historic ‘showings’ with significant values in both base (battery) and precious metals. McKellar was the second largest of the claim blocks that formed the Power Metals Resources PLC claim acquisition. Field work conducted in 2022 generated assessment credits that cover the property into 2023. Eight contiguous claims were ‘staked’ in February 2023 in the southern area of the claim block, extending the total claim area to 12.3km².
An exploration permit, required for ‘invasive’ exploration such as trenching, stripping and drilling has been drafted and after discussion with the First Nations, summited to the Provincial authorities.
Work conducted in 2023
In 2023, 18 sawn channel samples of approximately 1m were collected across the exposed diatreme, which historically reported REE. In addition, local scale prospecting resulted in 5 grab samples also being collected for assay.
Results of the 2023 programme (highest two samples) and other assayed samples from the diatreme area are included in the table below.
|
Element |
Historical assay results for selected elements (including REE’s), McKellar Creek Diatreme: |
FCM recent 2023 sampling showing two highest values, all ppm |
|
Gold Au |
25 ppb |
N/A |
|
Platinum Pt |
17 ppb |
N/A |
|
Neodymium Nd |
300 ppm |
259, 205 |
|
Lanthanum La |
400 ppm |
362, 253 |
|
Beryllium Be |
2.8 ppm |
5 all others BLD |
|
Cerium Ce |
513 ppm |
653, 503 |
|
Yttrium Y |
214 ppm |
287, 193 |
|
Strontium Sr |
1280 ppm |
1410, 1360 |
|
Thorium Th |
180 ppm |
145, 140 |
|
U308 |
38 ppm |
U: 32.8 23.4 |
Table showing historic as well as FCM generated sample results from the McKellar diatreme
Zigzag
Overview
The 6-unit claim group spans approximately 1.2km and covers the historic Tebishogeshik lithium occurrence as well as other mineralized sites. The claims are a part of an ‘Option’ Agreement with Nuinsco signed in March 2023. Nuinsco, whilst not the registered owners, hold an Option to Purchase agreement with the claim owner. By virtue of this agreement, FCM has committed to a four-year work programme as well as staged payments to Nuinsco, which can be accelerated. At the fulfilment of these obligations, FCM will own the claim option on an 80:20 arrangement with Nuinsco. At this point a JV would be entered into between FCM and Nuinsco for the further development of the mining claims. Should either party not wish to contribute to the JV they would be diluted as per an agreed dilution formula. If either Nuinsco or FCM is diluted to 10% ownership their entire remaining ownership would be automatically converted into an NSR.
Work conducted in 2023
During a winter reconnaissance of the Zigzag property in order to assess access the team identified an old trench for which sample information was not available. Four samples were collected from the in-situ debris flanking the trench. The results, tabulated below validate previous sampling, with values up to 1.0% (10,000ppm):
|
Sample number |
Lithium (Li) ppm |
Tantalum (Ta) ppm |
|
A1104880 |
1390 |
184 |
|
A1104881 |
5070 |
84.7 |
|
A1104882 |
10000 |
139 |
|
A1104883 |
1180 |
198 |
Table showing Zigzag grab sampling results
Sugar Cube
The Sugar Cube claim block of 205 claims, covering ~43km², is contiguous to the north-west of Silver Lake’s 1.6Moz+ Sugar Zone gold mine. Sugar Cube was one of the ‘seed’ properties that formed the pre-IPO company portfolio.
Work Conducted in 2023
Whilst virtually no ground-based exploration was conducted in 2022, in Q1 2023 a 578 line km geophysics survey comprising a helicopter borne low level 100m line spacing magnetic as well as electromagnetic (EM) survey was completed, which will provide sufficient credits to maintain this entire block through 2023
The survey data was processed by the contractor then passed to Paterson Grant Watson (PGW) who undertook a detailed interpretation. This interpretation will determine future field work to ‘ground-truth’ any identified anomalies.
Other Properties:
FCMC Inc. holds a further 85 claims totalling 18km² in three Properties in the Hemlo area, (Enable, Coco East and Magical), however, either no work was conducted, or no work reported in the public domain associated with these Properties.
III. Corporate and Financial Highlights
The start of 2023 has witnessed several corporate actions by the Company as the business positions itself to exploit the remarkable team and network it has developed. FCM now moves into a period of development that will see a major upturn in work across its portfolio of assets.
· On 7th February 2023 the Company announced the 2nd Instalment of the Sunbeam option was completed with a payment of CAD$150,000 made to Nuinsco.
· On 9th March 2023 the Company announced the Earn-In into the Zigzag Lithium project, which included a cash payment of $50,000 on signing and the issue of CAD$25,000 equivalent in ordinary shares.
· On 15th March 2023, the Company announced that it had received notice of an exercise of a total of 600,000 warrants with an exercise price of 12.5p, raising gross proceeds of £75,000 for the Company. Admission of the shares took place on the 21st of March 2023.
· On 29th March 2023 we announced receipt of the final payment of CAD$140,000 of the 2022/3 Ontario Junior Exploration Grant (“OJEP”) for work completed on the North Hemlo property.
· On 26th June 2023 the Company announced the placing, subscription, and exercise of warrants of 10,491,700 ordinary shares raising gross proceeds £1,049,170 all at the price of 10p per share. Admission of these shares took place on or before 10th July 2023.
· The Annual General Meeting (“AGM”) of the Company was held on 29th June 2023, at which all resolutions were duly passed.
James Knowles, Chairman commented:
The first half of 2023 has been an exciting time for First Class Metals. Following on from the IPO in July 2022 and successful inaugural field season we looked to develop our diverse portfolio of precious and base metal focused assets in Ontario further.
With fieldwork planned and in operation across Sunbeam, North Hemlo, Esa, Enable and Zigzag the year started with a very active program. Behind the field work the Company’s board progressed drilling permits and amendments to existing permitted properties.
With the addition of the Zigzag Lithium project ‘earn-In’ we now have exposure to a key battery metal project, located in an area of Ontario which holds numerous other developing hard rock lithium projects and future processing infrastructure.
The progress of the Company during the period has been tremendous and with the successful completion of our fund raise, on 26th June 2023, First Class Metals is funded to continue to drive through the exciting planned workstreams ahead.
I would like to take this opportunity thank and congratulate our teams and partners in Canada for their hard work and results and to state that we very much look forward to continuing to push this exciting portfolio of assets onwards.
IV. Financial Review
Funding
At the period end, the Group was funded through investment from its shareholders following successful post-IPO fund raising events. A sum of £1,186,478.20 was raised through warrant conversion and private placement.
Current Assets
At 30th June 2023, the Group had trade and other receivables of £157,632 (Dec 2022: £226,217, June 2022: £31,177).
Liquidity, cash and cash equivalents
At 30th June 2023, the Group held £844,131 (Dec 2022: £712,715, 30 June 2022: £227,683) of cash and cash equivalents, all of which are denominated in pound sterling.
Going concern
The financial information has been prepared on the basis that the Group will continue as a going concern.
As a junior exploration company, the Directors are aware that the Company must seek funds from the market to meet its investment and exploration plans and to maintain its listing status.
The Group’s reliance on a successful fund raising presents a material uncertainty that may cast doubt on the Group’s ability to continue to operate as planned and to pay its liabilities as they fall due.
The Company successfully raised £1,186,478.20 in the period ended 30th June 2023 through a combination of issuing new shares and warrant conversions.
The Directors are aware of the reliance on fund raising within the next 12 months and the material uncertainty this presents but having reviewed the Group’s working capital forecasts they believe the Group is well placed to manage its business risks successfully providing the fund raising is successful.
Statement of Directors’ Responsibilities
The Directors are responsible for preparing this report and the financial statements in accordance with applicable United Kingdom law and regulations and UK adopted International Financial Reporting Standards (“IFRS”).
Company law requires the Directors to prepare financial statements for each financial period which present fairly the financial position of the Company and the financial performance and cash flows of the Company for that period. In preparing those financial statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;
• state whether applicable IFRS standards have been followed, subject to any material departures disclosed and explained in the financial statements;
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business; and
• provide additional disclosures when compliance with the specific requirements in IFRS standards is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity’s financial position and financial performance.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the Company financial statements comply with the Companies Act 2006 and Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report, Directors’ Report, Directors’ Remuneration Report and Corporate Governance Statement that comply with that law and those regulations, and for ensuring that the Annual report includes information required by the Listing Rules of the Financial Conduct Authority.
The financial statements are published on the Company’s website https://www.firstclassmetalsplc.com/. The work carried out by the Auditor does not involve consideration of the maintenance and integrity of this website and accordingly, the Auditor accepts no responsibility for any changes that have occurred to the financial statements since they were initially presented on the website. Visitors to the website need to be aware that legislation in the United Kingdom covering the preparation and dissemination of the financial statements may differ from legislation in their jurisdiction.
The Directors confirm that to the best of their knowledge the Company financial statements give a true and fair view of the assets, liabilities, financial position of the Company.
V. Half yearly accounts
Consolidated Income Statement for the Period from 1 January 2023 to 30 June 2023
|
6 months to |
6 months to |
12 months to |
|
|
Revenue |
– |
– |
– |
|
Cost of sales |
– |
– |
– |
|
Gross loss |
– |
– |
– |
|
Administrative expenses |
(693,460) |
(159,790) |
(693,583) |
|
Operating loss |
(693,460) |
(159,790) |
(693,583) |
|
Finance income |
2,058 |
12 |
461 |
|
Finance costs |
(53,298) |
– |
(7,918) |
|
Net finance cost |
(51,240) |
12 |
(7,457) |
|
Loss before tax |
(744,700) |
(159,778) |
(701,040) |
|
Loss for the period |
(744,700) |
(159,778) |
(701,040) |
|
Profit/(loss) attributable to: |
|||
|
Owners of the company |
(744,700) |
(159,778) |
(701,040) |
|
Loss for the period |
(744,700) |
(159,778) |
(701,040) |
|
|
Items that may be reclassified subsequently to profit or loss |
||||
|
Foreign currency translation (losses)/gains |
(84) |
123,772 |
98 |
|
|
Total comprehensive (loss)/income for the period |
(744,784) |
(36,006) |
(700,942) |
|
|
Total comprehensive (loss)/income attributable to: |
||||
|
Owners of the company |
(744,784) |
(36,006) |
(700,942) |
|
|
Loss per share: |
(1.06)p |
(0.17)p |
(1.31)p |
|
Consolidated Statement of Financial Position as at 30 June 2023
|
Note |
30 June |
30 June |
31 December |
|
|
Assets |
||||
|
Non-current assets |
||||
|
Property, plant and equipment |
5 |
1,169 |
– |
812 |
|
Mineral property exploration and evaluation |
4 |
2,914,105 |
1,751,778 |
2,256,720 |
|
2,915,274 |
1,751,778 |
2,257,532 |
||
|
Current assets |
||||
|
Trade and other receivables |
7 |
157,632 |
31,177 |
226,217 |
|
Cash and cash equivalents |
8 |
844,131 |
227,683 |
712,715 |
|
1,001,763 |
258,860 |
938,932 |
||
|
Total assets |
3,917,037 |
2,010,638 |
3,196,464 |
|
|
Equity and liabilities |
||||
|
Equity |
||||
|
Share capital |
9 |
(79,551) |
(50,944) |
(69,049) |
|
Share premium |
(4,470,806) |
(1,486,947) |
(3,395,168) |
|
|
Equity reserve |
(22,201) |
– |
(10,258) |
|
|
Foreign currency translation reserve |
(14) |
– |
(98) |
|
|
Retained earnings |
1,614,079 |
204,700 |
869,379 |
|
|
Equity attributable to owners of the company |
(2,958,493) |
(1,333,191) |
(2,605,194) |
|
|
Non-current liabilities |
||||
|
Other non-current financial liabilities |
– |
– |
(15,353) |
|
|
Current liabilities |
||||
|
Trade and other payables |
12 |
(459,558) |
(377,448) |
(357,325) |
|
Loans and borrowings |
10 |
(498,986) |
(300,000) |
(218,592) |
|
(958,544) |
(677,448) |
(575,917) |
||
|
Total liabilities |
(958,544) |
(677,448) |
(591,270) |
|
|
Total equity and liabilities |
(3,917,037) |
(2,010,639) |
(3,196,464) |
|
Consolidated Statement of Changes in Equity for the Period from 1 January 2023 to 30 June 2023
|
Unaudited |
Share capital |
Share premium |
Equity reserve |
Foreign currency translation |
Retained earnings |
Total equity |
|
At 1 January 2023 |
69,049 |
3,395,168 |
10,258 |
98 |
(869,379) |
2,605,194 |
|
Loss for the period |
– |
– |
– |
– |
(744,700) |
(744,700) |
|
Other comprehensive income |
– |
– |
– |
(84) |
– |
(84) |
|
Total comprehensive income |
– |
– |
– |
(84) |
(744,700) |
(744,784) |
|
New share capital subscribed |
10,502 |
1,075,638 |
– |
– |
– |
1,086,140 |
|
Other equity reserve movements |
– |
– |
11,943 |
– |
– |
11,943 |
|
At 30 June 2023 |
79,551 |
4,470,806 |
22,201 |
14 |
(1,614,079) |
2,958,493 |
|
Unaudited |
Share capital |
Share premium |
Equity reserve |
Foreign currency translation |
Retained earnings |
Total equity |
|
At 1 January 2022 |
943 |
1,536,947 |
– |
– |
(168,339) |
1,369,551 |
|
Loss for the period |
– |
– |
– |
– |
(36,006) |
(36,006) |
|
Other comprehensive income |
– |
– |
– |
– |
– |
– |
|
Total comprehensive income |
– |
1,536,947 |
– |
– |
(204,345) |
(1,333,545) |
|
New share capital subscribed |
50,000 |
(50,000) |
– |
– |
– |
– |
|
Other equity reserve movements |
– |
– |
– |
– |
– |
– |
|
At 30 June 2022 |
50,943 |
1,486,947 |
– |
– |
(204,345) |
(1,333,545) |
|
Audited |
Share capital |
Share premium |
Equity reserve |
Foreign currency translation |
Retained earnings |
Total equity |
|
At 1 January 2022 |
943 |
1,536,947 |
– |
– |
(168,339) |
1,369,551 |
|
Loss for the period |
– |
– |
– |
– |
(701,040) |
(701,040) |
|
Other comprehensive income |
– |
– |
– |
98 |
– |
98 |
|
Total comprehensive income |
– |
– |
– |
98 |
(701,040) |
(700,942) |
|
New share capital subscribed |
68,106 |
1,858,221 |
– |
– |
– |
1,926,327 |
|
Other equity reserve movements |
– |
– |
10,258 |
– |
– |
10,258 |
|
At 31 December 2022 |
69,049 |
3,395,168 |
10,258 |
98 |
(869,379) |
2,605,194 |
Consolidated Statement of Cash Flows for the Period from 1 January 2023 to 30 June 2023
|
Note |
6 months to |
6 months to |
12 months to |
|
|
Cash flows from operating activities |
||||
|
Loss for the period |
(744,700) |
(36,006) |
(701,040) |
|
|
Adjustments to cash flows from non-cash items |
||||
|
Depreciation and amortisation |
266 |
(123,771) |
162 |
|
|
Foreign exchange loss/(gain) |
80,474 |
– |
(29,831) |
|
|
Finance income |
(2,058) |
(12) |
(461) |
|
|
Finance costs |
53,298 |
934 |
7,918 |
|
|
(612,720) |
(158,855) |
(723,252) |
||
|
Working capital adjustments |
||||
|
Decrease/(increase) in trade and other receivables |
7 |
68,585 |
(1,985) |
(176,917) |
|
Increase in trade and other payables |
12 |
102,233 |
270,866 |
266,096 |
|
Net cash flow from operating activities |
(441,902) |
110,026 |
(634,073) |
|
|
Cash flows from investing activities |
||||
|
Interest received |
2,058 |
– |
461 |
|
|
Acquisitions of property plant and equipment |
(624) |
– |
(974) |
|
|
Acquisition of mineral property exploration and evaluation |
4 |
(729,823) |
(572,081) |
(1,013,050) |
|
Net cash flows from investing activities |
(728,389) |
(572,081) |
(1,013,563) |
|
|
Cash flows from financing activities |
||||
|
Proceeds from issue of ordinary shares, net of issue costs |
1,098,083 |
– |
1,593,549 |
|
|
Proceeds from other borrowing draw downs |
280,394 |
300,000 |
587,180 |
|
|
Foreign exchange loss/(gain) |
– |
123,771 |
– |
|
|
Repayment of other borrowing |
(15,353) |
– |
(23,747) |
|
|
Net cash flows from financing activities |
1,363,124 |
423,771 |
2,156,982 |
|
|
Net increase in cash and cash equivalents |
192,833 |
(38,284) |
509,346 |
|
|
Cash and cash equivalents at 1 January |
712,715 |
267,244 |
267,244 |
|
|
Effect of exchange rate fluctuations on cash held |
(61,417) |
(1,277) |
(63,875) |
|
|
Cash and cash equivalents at 30 June |
844,131 |
227,683 |
712,715 |
|
Notes to the Financial Statements for the Period from 1 January 2023 to 30 June 2023
|
1 |
General information |
The Company is a public company limited by share capital, incorporated and domiciled in England and Wales.
The principal activity of the Company was that of a holding company.
The principal activity of the Group was that of the exploration of gold and other semi-precious metals as well as battery metals critical to energy storage and power generation solutions.
The Company’s ordinary shares are traded on the London Stock Exchange (LSE) under the ticker symbol FCM.
The address of its registered office is:
Suite 16 Freckleton Business Centre
Freckleton Street
Blackburn
Lancashire BB2 2AL
United Kingdom
These unaudited interim results comprise the Company and its subsidiary, First Class Metals Canada Inc.
The Company’s interim report and accounts for the six months ended 30 June 2023 have been prepared using the recognition and measurement principles of International Accounting Standards in conformity with the requirements of the Companies Act 2006.
These interim financial statements for the six months ended 30 June 2023 should be read in conjunction with the financial statements for the year ended 31 December 2022, which have been prepared in accordance with International Financial Reporting Standards (“IFRSs”) as applied in accordance with the provisions of the Companies Act 2006. The interim report and accounts do not include all the information and disclosures required in the annual financial statements.
The interim report and accounts have been prepared in accordance with IAS34 (interim financial statements) and on the basis of the accounting policies, presentation and methods of computation as set out in the Company’s December 2022 Annual Report and Accounts, except for those that relate to new standards and interpretations effective for the first time for periods beginning on (or after) 1 January 2023 and will be adopted in the 2023 annual financial statements.
The financial information is presented in Pounds Sterling, rounded to the nearest pound and has been prepared under the historical cost convention.
The interim report and accounts do not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. These interim financial statements were approved by the Board of Directors on 28 September 2023. The results for the six months to 30 June 2023 and the comparative results for the six months to 30 June 2021 are unaudited. The figures for the year ended 31 December 2022 are extracted from the audited statutory accounts of the Company for that period.
Going Concern
The Directors have confirmed their intention to support the Company whilst it is in the process of raising funds to achieve its business plans. The Directors consider that sufficient resources are available to support the Company’s operations for the foreseeable future and therefore believe that the going concern basis of preparation is appropriate.
2 Loss per share
|
|
|
6 months ended 30 June 2023 |
6 months ended 30 June 2022 |
12 months ended 31 December 2022 |
|
|
|
(unaudited) |
(unaudited) |
(audited) |
|
|
|
|
|
|
|
Loss from operations |
£ |
(744,700) |
(36,006) |
(701,040) |
|
Weighted average number of shares |
|
70,410,322 |
21,673,976 |
53,456,619 |
|
Basic and fully diluted loss per share |
Pence |
(1.06) |
(0.17) |
(1.31) |
Basic loss per share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period.
There are potentially issuable shares all of which relate to share warrants issued as part of placings in 2022. However, due to the losses for the year the impact of the potential additional shares is anti-dilutive and has therefore not been recognised in the calculation of the fully diluted loss per share.
|
3 |
Earnings per share |
The calculation of the basic and diluted earnings per share (EPS) has been based on the loss attributable to ordinary shareholders and weighted-average number of ordinary shares outstanding.
|
4 |
Mineral property exploration and evaluation |
|
|||
|
|
Mineral property exploration and evaluation |
|
|||
|
|
Cost or valuation |
||||
|
|
At 1 January 2022 |
1,179,697 |
|||
|
|
Additions |
1,013,050 |
|||
|
|
Foreign exchange movements |
63,973 |
|||
|
|
At 31 December 2022 |
2,256,720 |
|||
|
|
At 1 January 2023 |
2,256,720 |
|||
|
|
Additions |
729,823 |
|||
|
|
Foreign exchange movements |
(72,438) |
|||
|
|
At 30 June 2023 |
2,914,105 |
|||
|
|
Amortisation |
||||
|
|
At 30 June 2023 |
– |
|||
|
|
Carrying amount |
||||
|
|
At 30 June 2023 |
2,914,105 |
|||
|
|
At 1 January 2022 |
1,179,697 |
|||
|
5 |
Property, plant and equipment |
|
|||
Group
|
|
Furniture, fittings and equipment |
|||||
|
|
Cost |
|
||||
|
|
Additions |
974 |
|
|||
|
|
At 31 December 2022 |
974 |
|
|||
|
|
At 1 January 2023 |
974 |
|
|||
|
|
Additions |
624 |
|
|||
|
|
At 30 June 2023 |
1,598 |
|
|||
|
|
Depreciation |
|
||||
|
|
Charge for year |
162 |
|
|||
|
|
At 31 December 2022 |
162 |
|
|||
|
|
At 1 January 2023 |
162 |
|
|||
|
|
Charge for the period |
267 |
|
|||
|
|
At 30 June 2023 |
429 |
|
|||
|
|
Carrying amount |
|
||||
|
|
At 30 June 2023 |
1,169 |
|
|||
|
|
At 31 December 2022 |
812 |
|
|||
|
6 |
Investments |
|
||||
Group subsidiaries
Details of the group subsidiaries as at 30 June 2023 are as follows:
|
Name of subsidiary |
Principal activity |
Registered office |
Proportion of ownership interest and voting rights held |
2022 |
|
First Class Metals Canada Inc.* |
Mining of other non-ferrous metal ores |
55 York Street Canada |
100% |
100% |
* indicates direct investment of the company
|
7 |
Trade and other receivables |
|
|||||
|
|
30 June |
30 June |
31 December |
||||
|
|
Accrued income |
– |
– |
85,979 |
|||
|
|
Prepayments |
60,479 |
8,220 |
67,919 |
|||
|
|
Other receivables |
97,153 |
22,957 |
72,319 |
|||
|
|
157,632 |
31,177 |
226,217 |
||||
|
|
|||||||
|
8 |
Cash and cash equivalents |
|
|||||||
|
|
30 June |
30 June |
31 December |
||||||
|
|
Cash at bank |
844,131 |
227,683 |
712,715 |
|||||
|
9 |
Share capital |
|
|||||||
|
|
|||||||||
Allotted, called up and fully paid shares
|
|
30 June |
31 December |
||||
|
|
No. |
£ |
No. |
£ |
||
|
|
Ordinary shares of £0.001 each |
79,551,294 |
79,551 |
69,048,707 |
69,049 |
|
|
|
||||||
|
10 |
Loans and borrowings |
|
||||
|
30 June |
30 June |
31 December |
|
|
Current loans and borrowings |
|||
|
Finance lease liabilities |
– |
– |
13,433 |
|
Convertible debt |
498,986 |
300,000 |
205,159 |
|
498,986 |
300,000 |
218,592 |
|
The group’s exposure to market and liquidity risks, including maturity analysis, relating to loans and borrowings is disclosed in note 15 “Financial risk review”.
In October 2022, the company has access to a drawdown facility of £1,000,000, of which £500,000 was drawn down as of June 30, 2023.
|
11 |
Leases |
Lease liabilities maturity analysis
A maturity analysis of lease liabilities based on undiscounted gross cash flow is reported in the table below:
|
|
30 June |
30 June |
31 December |
|||
|
|
Less than one year |
– |
– |
13,433 |
||
|
12 |
Trade and other payables |
|
||||
|
|
30 June |
30 June |
31 December |
|||
|
|
Trade payables |
183,257 |
161,062 |
82,006 |
||
|
|
Accrued expenses |
269,562 |
32,051 |
236,810 |
||
|
|
Social security and other taxes |
4,875 |
3,535 |
7,667 |
||
|
|
Outstanding defined contribution pension costs |
1,864 |
– |
– |
||
|
|
Other payables |
– |
180,800 |
30,842 |
||
|
|
459,558 |
377,448 |
357,325 |
|||
|
13 |
Financial risk review |
|
||||
Group
Principle risks & uncertainties are detailed in the most recent Annual report (page 41 & 42) which can be found on the company’s website and remain unchanged. This Annual Report can be found at: 2022+Annu\al+Report+&+Financial+Statements.pdf (squarespace.com)
In addition, this note presents information about the group’s exposure to financial risks and the group’s management of capital.
Capital risk management
The Group’s objectives when managing capital are: (a) To maintain a flexible capital structure which optimizes the cost of capital at acceptable risk; (b) To meet external capital requirements on debt and credit facilities; (c) To ensure adequate capital to support long-term growth strategy; and (d) To provide an adequate return to shareholders. The Group continuously monitors and reviews the capital structure to ensure the objectives are met. Management defines capital as the combination of its indebtedness and equity balances, as disclosed in note 13, and manages the capital structure within the context of the business strategy, general economic conditions, market conditions in the power industry and the risk characteristics of assets. The Group’s objectives in managing capital and the definition of capital remain unchanged throughout the period. External factors, such as the economic environment, have not altered the Group’s objectives in managing capital.
Credit risk
The group’s definition of credit risk is Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. At present the Group does not have any customers and its risk on cash and bank is mitigated by holding of the funds in an “A” rated bank.
Liquidity risk
The group’s definition of liquidity risk is Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they become due. The Group manages liquidity risk by maintaining adequate cash balances.
Market risk
The group’s definition of market risk is Market risk is the risk that changes in market prices, such as commodity prices, will affect the Group’s earnings. The objective of market risk management is to identify both the market risk and the Group’s option to mitigate this risk.
A majority of the Group’s operating costs will be incurred in US and Canadian dollars, whilst the Group has raised capital in £ Sterling. The Group will incur exploration costs in US and Canadian Dollars, but it has raised capital in £ Sterling. Fluctuations in exchange rates of the US Dollar and Canadian Dollar against £ Sterling may materially affect the Group’s translated results of operations. In addition, given the relatively small size of the Group, it may not be able to effectively hedge against risks associated with currency exchange rates at commercially realistic rates. Accordingly, any significant adverse fluctuations in currency rates could have a material adverse effect on the Group’s business, financial condition and prospects to a much greater extent than might be expected for a larger enterprise.
Interest rate risk is the risk that the fair value of the future cash flows of a financial instrument will fluctuate because of changes in market rates of interest. As the Group has no significant interest bearing assets or liabilities, the group’s operating cash flows are substantially independent of changes in market interest rates. Therefore, the Group is not exposed to significant interest rate risk.
|
14 |
Post balance sheet events In July FCM announced that it has signed an agreement with OnGold Investment Corp (“OnGold”) in respect to the Pickle Lake Property, McGill Township in Ontario . The property consists of 163 single cell mining claims, comprising 3,455ha (hectares). Contiguous to both First Class Metals, North Hemlo Property and Palladium One (TSXV:PDM) Tyko Project. Eleven high priority targets defined on the property from previous operators work program. Winter Lake Sediment sampling by FCM across the area as part of the due diligence process returned gold grades of up to 103ppb gold (Au) which is deemed to be extremely high for the wider area.
|
|
|
15 |
Related party transactions |
|
Parties are considered to be related if one party has the ability (directly or indirectly) to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered related if they are subject to common control or common significant influence. Related parties may be individuals or corporate entities.
During the period, the Group incurred consultancy and travel expenses in relation to the intangible assets from Specialist Exploration Services (Scotland) Limited, a company controlled by a common director. The services were for £53,850.46 (Dec 2022: £121,965) of which £7,350 (Dec 2022: £7,000) was outstanding at the year end.
On the 26th Of June 2023 Marc J Sale subscribed to £37,500 shares in a private placement totalling 375,000 shares. The shares will be held in the name of Specialist Exploration Services Scotland Ltd which is a UK registered company controlled by Mr Marc J Sale.
#TM1 Technology Minerals Plc – Recyclus appoints Head of Research and Development
Technology Minerals Plc (LSE: TM1), the first listed UK company focused on creating a sustainable circular economy for battery metals, is pleased to announce that its 49% owned battery recycling business, Recyclus Group Ltd (“Recyclus”), has appointed Nick Pickard as Head of Research and Development, effective from 3 January 2023.
Nick has more than 30 years’ experience designing, manufacturing and servicing recycling machinery. He has worked with some of the largest mining corporate partners across Europe, Australia, South Africa, India and the UK in the design and build ofshredding, crushing and size reducing mining systems. Examples include Osborn GmbH, Kawasaki Heavy Industries Limited, Krupp Fördertechnik GmbH, Böhringer Group and Meta Nikel Kobalt A.Ş.
More recently, Nick has designed and developed turnkey solutions for a full range of battery recycling systems for both lead-acid and lithium-ion and led the design and build of Recyclus’ lithium-ion battery recycling plant. His knowledge and expertise in this field will help to further develop Recyclus’ recycling machinery and its applications.
During his career, Nick has developed a range of heavy-duty recycling machinery and systems, covering various materials including tyres, mattresses, plastics, commercial waste, glass, ferrous and non-ferrous metals. Previously, Nick designed a semi-mobile weapons destruction system for use in Kosovo following the Balkan conflict. The machine recycles and separates the materials for reuse in agricultural equipment including ploughs, tools and other items to help rebuild war-torn communities.
Robin Brundle, Chairman of Technology Minerals, said: “Nick is a truly talented engineer and innovator, who has already contributed so much to Recyclus through his valuable contributions to the design of our lithium-ion battery shredding plant. I look forward to seeing him apply his inventive mind to further improving our battery shredding plants and keep us at the cutting-edge of battery recycling technology.”
Nick Pickard, incoming of Head of Research and Development at Recyclus, said: “It is great to be joining the company at such an exciting time. Improving battery recycling is a passion for me and I am thrilled to be working with the team here to create new methods, and improve existing ones, to recycle batteries and help support the green transition.”
Enquiries
|
Technology Minerals Plc |
|
|
Robin Brundle, Executive Chairman Alexander Stanbury, Chief Executive Officer |
+44 (0)20 4582 3500 |
|
Oberon Investments Limited |
|
|
Nick Lovering, Adam Pollock |
+44 (0)20 3179 0535 |
|
|
|
|
Arden Partners Plc |
|
|
Ruari McGirr |
+44 (0)207 614 5900 |
|
Gracechurch Group |
|
|
Harry Chathli, Alexis Gore, William Dobinson |
+44 (0)20 4582 3500 |
Technology Minerals Plc
Technology Minerals is developing the UK’s first listed, sustainable circular economy for battery metals, using cutting-edge technology to recycle, recover, and re-use battery technologies for a renewable energy future. Technology Minerals is focused on extracting raw materials required for Li-ion batteries, whilst solving the ecological issue of spent Li-ion batteries, by recycling them for re-use by battery manufacturers. With the increasing global demand for battery metals to supply electrification, the group will explore, mine, and recycle metals from spent batteries. Further information on Technology Minerals is available atwww.technologyminerals.co.uk