REG - Armadale Capital PLC - Final Results and Notice of AGM
28/06/2024 17:15
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240628:nRSb4467Ua&default-theme=true
RNS Number : 4467U Armadale Capital PLC 28 June 2024
Armadale Capital Plc / Index: AIM / Epic: ACP / Sector: Investment Company
28 June 2024
Armadale Capital Plc
('Armadale' or 'the Company')
Final Results and Notice of AGM
Armadale Capital plc (LON: ACP), the AIM quoted investment group focused on
natural resource projects in Africa, is pleased to announce its final results
for the year ended 31 December 2023 ('Final Results' or 'Annual Report'). The
Company also announces that its Annual General Meeting ('AGM') will be held at
Level 2, 23 Railway Road, Subiaco, Western Australia 6008 on 30 July 2024 at
16.00 AWST (9.00 BST). A notice of AGM, together with printed copies of the
Company's full Annual Report for the year ended 31 December 2023, will be
posted to shareholders. Copies will also be available to view on the Company's
website: www.armadalecapitalplc.com
(https://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.armadalecapitalplc.com&esheet=52230450&newsitemid=20200603005976&lan=en-US&anchor=www.armadalecapitalplc.com&index=1&md5=9801c0c7a7343b17a80cecb854a43b6a)
.
Strategic Report
For the year ended 31 December 2023
Armadale Capital plc (LON: ACP), the AIM quoted investment group primarily
focused on natural
resource projects in Africa and the development of the long‐life low‐cost
Mahenge Liandu Graphite
Project in Tanzania is pleased to announce its Final Results for the Year
Ended 31 December 2023.
Operational and Corporate Highlights for Year Ended 31 December 2023
While it was a difficult year for the company and the graphite developers in
general progress was
made in delivering key accretive milestones in advancing the Mahenge Liandu
Graphite Project in
Tanzania
1. Armadale is accessing its option to recommence the FEED study now
that Blackrock Mining (ASX:BKT) have progressed project financing. This will
allow the company to optimise the Definitive Feasibility Study, ensuring
further de-risking of the production process.
2. In Logistics, routes for the product were assessed to determine the
optimum methods to ensure the final product will enter the market at the
desired price level. In light of the advancement of regional infrastructure
projects, Armadale are positioned to take advantage of future reductions in
CAPEX and OPEX, with final results to be incorporated into an updated DFS.
3. The Group is continuing discussions with several potential financing
partners regarding the debt and equity funding required for project
development. Armadale remains committed to sourcing terms that would prove to
be friendly to shareholders and reduce dilutionary risk.
4. The significantly improved market fundamentals for graphite
concentrates has made a steady impact on the interest from stakeholders
capable of providing long-term project finance.
5. Armadale continued to improve ESG credentials by continuing to
collect environmental baseline data for the compliance of the mining lease,
which will also assist in the design and planning of the proposed mining
operations.
6. Through the year, the Company's primary focus was on securing project
development funding for the Mahenge Liandu Graphite project while advancing
the permitting and local community engagement.
Post Period End
1. The Company continues to collect environmental baseline data as is
required for the compliance of the mining lease and to assist in the design
and planning of the proposed mining operations. In addition, the base line
data for temperature, pressure, wind, moon phase, humidity, solar radiation,
rainfall and stream flow data assists the local community to have access to
regional weather data for local planning requirements in the Mahenge region.
2. Earn-in of the high-grade "Canyon Silver" project in Idaho, USA. This
Silver-Lead-Zinc Project is located in the heart of a Silver producing
district and provides Armadale with a pathway to reducing the dilutionary risk
in developing Mahenge.
3. Logistics routes for the Mahenge Liandu product continue to be
assessed to determine the optimum methods to ensure the final product will
enter the market at the desired price level.
4. At Canon silver work commenced to re-open Number 2 and Number 3
portals to directly access the historical mineralisation. This includes
re-timbering, laying track and renovating the hoist room. Electrification, air
and power line installation are also part of the re-opening process.
5. At the Canyon Silver Project historically trucked grades include hand
sorted ore at 36 Oz/t (over 1,000 g/t) Ag, with 66% Pb and 10% Zn, in various
prior truckloads. These historic hand sorted ore batches represent the
possibility of a high-grade, simple operation to truck ore to nearby mills.
6. Addition of Greg Entwistle to the board. Greg's addition to the board
brings vast engineering experience to advance commercial production in a
shareholder friendly manner.
7. Share subscription for £650,000 to procure Canyon Silver and advance
Mahenge. This amount was raised in a challenging market and was Armadale's
first fundraise in over 3 years.
8. £100,000 of the issue was subscribed for by the Executive Director,
Matt Bull.
Ongoing review of quoted portfolio; the Directors are confident that there
are opportunities for capital gains.
Investments
During the year under review, Armadale continued to operate as a diversified
investing group
focused on natural resource projects in Africa. To this end, its portfolio is
divided into two groups:
· actively managed investments where the Company has majority ownership
of the investment; and
· passively managed investments where the Company has a minority
investment, typically in a
quoted company, and does not have management control.
In the 2023 year, the Company's key actively managed investment is the Mahenge
Liandu Graphite
Project in Tanzania. At present, the Company is actively marketing the Project
to potential industry
partners and end users (offtakers) of graphite products.
Passively managed investments
The Company has a small portfolio of quoted investments, valued at £249,000
on 20 June 2024, principally in resource companies where the Directors believe
there are opportunities for capital gain. The Company continues to keep its
portfolio under review. The Company's strategy with its quoted portfolio is to
gain exposure in projects that have the potential to create short to medium
term returns for the Company as well as diversify the Company's exposure to a
broader range of commodities while being able to enter and exit the position
with minimal cost and time.
SUSTAINABLE DEVELOPMENT
The Company is committed to sustainable development and conducting its
business ethically. Given that the Company invests in the mining industry, one
of its key focuses is on maintaining a high level of health and safety,
environmental responsibility, and support for the communities close to its
investments.
CORPORATE INFORMATION
Principal Risks and Uncertainties
There are known risks associated with the mineral industry, especially
in Africa. The Board regularly reviews the risks to which the Group is
exposed and endeavours to minimise them as far as possible.
The following summary, which is not exhaustive, outlines some of the risks and
uncertainties currently facing the Group:
· Through the Mahenge Liandu Graphite Project the Group is very exposed
to graphite. Graphite is a relatively new commodity whose market is being
driven by demand in renewable energy. The Company believes it is thus
vulnerable to changing global energy policies.
· Obtaining development funding for the project is a significant risk
for the company and while some funding is becoming available to graphite
developers there has been limited projects that have successfully commenced
production over the last few years.
· The exploration for and development of mineral resources involves
technical risks, infrastructure risks and logistical challenges, which even a
combination of careful evaluation and knowledge may not eliminate.
· There can be no assurance that the Group's project will be fully
developed in accordance with current plans.
· Future development work and subsequent financial returns arising may
be adversely affected by factors outside the control of the Group.
· The availability and access to future funding within the global
economic environment.
· The Group operates in multiple national jurisdictions and is
therefore vulnerable to changes in government policies which are outside its
control. The mining regulation changes in Tanzania are still being
evaluated, however they seem to have minimal impact on investment in graphite
mining. The Group continues to monitor the implementation of the changes to
evaluate and mitigate sovereign risks.
Some of the mitigation strategies the Group applies in its present stage of
development include, among others:
· Proactive management to reducing fixed costs.
· Rationalisation of all capital expenditures.
· Maintaining strong relationships with government (employing local
staff and partial government ownership), which improves the Group's position
as a preferred small mining partner.
· Engagement with local communities to ensure our activities provide
value to the communities where w Alternative and continued funding activities
with a number of options to secure future funding to continue as a going
concern.
The Directors regularly monitor such risks and will take actions as
appropriate to mitigate them. The Group manages its risks by seeking to
ensure that it complies with the terms of its agreements, and through the
application of appropriate policies and procedures, and via the recruitment
and retention of a team of skilled and experienced professionals.
Provision for impairment
As is explained in accounting policy note 2.12 to the financial statements, at
each reporting period, the directors carry out a review of the carrying value
of the Company's assets to establish if there is any indication that the value
may have become impaired. In the opinion of the directors, the continuing lack
of certainty over the availability of the finance that will be needed to
develop the Mahenge project together with the fall in the market value of the
Company's shares constitute indicators of a possible impairment in the
carrying value of the project's exploration and evaluation assets. Whilst the
directors remain optimistic that the project will ultimately prove to be
capable of profitable development, in light of these indicators of possible
impairment, they have decided to make a provision for impairment of the assets
and, in the absence of an independent valuation, they have provided in full
against the exploration and evaluation costs of £5,377,000. If subsequent
reviews indicate that the carrying value should be reinstated in part or in
full, this provision will be released accordingly.
Key Performance Indicators
The Group's current key performance indicators ('KPIs') are the performance of
its underlying investments, measured in terms of the development of the
specific projects they relate to, the increase in capital value since
investment and the earnings generated for the Group from the investment. The
Directors consider that it is still too early in the investment cycle of any
of the investments held, for meaningful KPIs to be given.
Success is also measured through the identification and investment in suitable
additional opportunities that fit the Group's investment objectives.
Section 172 Statement
Section 172(1): A director of a company must act in the way he considers, in
good faith, would be most likely to promote the success of the company for the
benefit of its members as a whole, and in Section 172(1) (b) the interests of
the company's employees,
Company's Comment: While the Company is largely staffed by contractor
employees (rather than direct employees of the Company), the directors
consider that continuing active work on the Mahenge Liandu Graphite
Project to be in the best interest of such staff to utilise their skills and
develop their local communities. The board seeks regular feedback from its key
stakeholders (including staff and advisers) to ensure that the corporate
culture of the Company remains highly ethical in terms of our Company's values
and behaviours.
Section 172(1) (c) the need to foster the company's business
relationships with suppliers,
customers and others,
Company's Comment: The directors ensure that suppliers are available and
meeting commitments and there is good communication with staff as a key
requirement for high levels of engagement. This is done by periodic and ad-hoc
briefings and discussions.
Reasons to engage shareholders are to meet regulatory requirements and
understand shareholder sentiments on the business, its prospects and
performance of management.
This is done by regulatory news releases, keeping the investor relations
section of the website up to date, annual and half-year reports and
presentations and AGM.
Section 172(1) (d) the impact of the company's operations on the
community and the environment,
Company's Comment: The Company's activities impact communities in the places
where we operate and elsewhere. The Company engages communities with
employment / business development arrangements within guidelines. Through
preparation and compliance with environmental and social management plans,
which include the regulatory requirements for the Company on its Mahenge
Liandu Graphite Project, the directors ensure that wherever possible its
activities have a positive impact on the community and avoid adverse
environmental impacts. The company has a policy of employing Tanzanians where
possible in country.
The Company has engaged the services of a local manager in Liandu who provides
information to the community about our intended project activities and is
responsible for managing local affairs and feedback to the Company as well as
monitoring the weather and rainfall on site.
Section 172(1) (e) the desirability of the company maintaining a reputation
for high standards of business conduct, and
Company's Comment: The directors consider standards of business conduct in all
dealings of the Company. The members of the board have a collective
responsibility and obligation to promote the interests of the Company and are
collectively responsible for defining standards of business conduct which
includes corporate governance arrangements. The board provides strategic
leadership for the Company and operates within the scope of our corporate
governance framework and sets the strategic goals for the Company.
d Section 172(1) (f) the need to act fairly as between members of the company.
Company's Comment: The board takes feedback from a wide range of shareholders
(large and small) and endeavours at every opportunity to pro-actively engage
with all shareholders (via regular news reporting-RNS) and engage with any
specific shareholders in response to particular queries they may have from
time to time. The board considers that its key decisions during the year have
impacted equally on all members of the Company.
Board
In March 2024, Nicholas Johansen resigned as a director and Greg Entwhistle
was appointed. The Board continues to consider potential replacements for
other former Board members with a focus on a potential appointment of a UK
based director.
Financial Results
For the year ended 31 December 2023 the Group did not earn any revenues as
its business related solely to the making of investments in non-revenue
producing resource projects and companies. The Group made a loss after tax
of £6.2 million (2022: £0.206 million) for the year ended 31 December
2023, including the impairment provision of £5.4 million referred to above.
Expenditure on the Mahenge Liandu project during the year amounted to £0.114
million (2022: £0.468 million) At 31 December 2023, the Group had cash
of £45,000 (2022: £1,406,000) and no debt finance (2021: nil). At 27
June 2024 the Group had cash of £125,000 and investments worth £249,000
Outlook
While the market conditions in the junior exploration sector have been
difficult over the past year, the Company remains optimistic that the growth
in the demand for graphite will continue to increase allowing the development
of our flagship project. The Company notes increased investment activity and,
in particular, the commencement of production at Walkabout Resources'
Tanzanian graphite project.
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2023
2023 2022
£'000 £'000
Administrative expenses (386) (309)
Change in fair value of investments (123) 103
Impairment of exploration and evaluation assets (5,377) -
Loss before taxation (5,886) (206)
Taxation - -
Loss after taxation (5,886) (206)
Other comprehensive income
Items that may be reclassified to profit or loss:
Exchange differences on translating foreign entities (359) 252
Total comprehensive (loss)/profit attributable to the equity holders of the (6,245) 46
parent company
Loss per share attributable to the equity holders of the parent company Pence Pence
Basic and diluted loss per share (1.00) (0.04)
Consolidated Statement of Financial Position
At 31 December 2023
2023 2022
£'000 £'000
Assets
Non-current assets
Exploration and evaluation assets - 5,483
Investments 942 562
942 6,045
Current assets
Trade and other receivables 20 150
Cash and cash equivalents 45 1,046
65 1,196
Total assets 1,007 7,241
Equity and liabilities
Equity
Share capital 3,324 3,324
Share premium 25,153 25,153
Shares to be issued 286 286
Share option and warrant reserve 276 362
Foreign exchange reserve (41) 318
Retained earnings (28,079) (22,279)
Total equity 919 7,164
Current liabilities
Trade and other payables 88 77
Total Liabilities 88 77
Total equity and liabilities 1,007 7,241
.
Consolidated Statement of Changes in Equity
For the year ended 31 December 2023
Share Capital Share Premium Shares to be issued Share Foreign Exchange Reserve Retained Earnings Total
Option and Warrant Reserve
£'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2022 3,275 23,906 286 925 66 (22,636) 5,822
Loss for the year - - - - - (206) (206)
Other comprehensive income - - - - 252 - 252
Total comprehensive income for the year - - - - 252 (206) 46
Issue of shares and warrants 49 1,247 - - - - 1,296
Transfer on exercise and expiry of warrants - - - (563) - 563 -
Total other movements 49 1,247 - (563) - 563 1,296
At 31 December 2022 3.324 25,153 286 362 318 (22,279) 7,164
Loss for the year - - - - - (5,886) (5,886)
Other comprehensive loss - - - - (359) - (359)
Total comprehensive loss for the year - - - - (359) (5,886) (6,245)
Transfer on exercise and expiry of warrants - - - (86) - 86 -
Total other movements - - - (86) - 86 -
At 31 December 2023 3,324 25,153 286 276 (41) (28,079) 919
* Consolidated Statement of Cash Flows
For the year ended 31 December 2023
2023 2022
£'000 £'000
Cash flows from operating activities
Loss before taxation (5,886) (206)
Adjustment for:
Impairment of exploration and evaluation assets 5,377 -
Change in fair value of investments 125 (102)
Bad debts written off 120 -
(264) (308)
Changes in working capital 11 (11)
Receivables
Payables 10 12
Net cash used in operating activities (243) (307)
Cash flows from investing activities
Expenditure on exploration and evaluation assets (234) (518)
Purchase of listed investments (663) (411)
Sale of listed investments 139 89
Net cash used in investing activities (758) (840)
Cash flows from financing activities
Proceeds from share issues - 1,307
Net cash from financing activities - 1,307
Net (decrease)/increase in cash and cash equivalents (1,001) 160
Cash and cash equivalents at 1 January 1,046 886
Cash and cash equivalents at 31 December 45 1,046
Going Concern
The financial statements have been prepared on the going concern basis as, in
the opinion of the Directors, there is a reasonable expectation that the Group
and the Company will continue in operational existence for the foreseeable
future.
At 31 December 2023, the Group had cash of £45,000 (2022, £1,046,000) and no
debt finance (2022, nil).
In March 2024, the company secured new equity finance of £650,000 of which
£150,000 is yet to be received. At 27 June 2024, the Company had cash of
£125,000, a possible further £150,000 which the Company hopes to receive
from the equity placing and listed investments with a traded value of
£249,000. The Directors have prepared a cash flow forecast for the next
twelve months which shows that the cash in hand together with expected further
receipts from the fundraising and cash that can be realised from listed
investments should be sufficient to meet current commitments in respect of
exploration expenditure and corporate overheads for a period of at least
twelve months, after which further fundraising will be required. Should the
remaining £150,000 not be received then further funds will be required in
less than twelve months. The Company is considering options to JV or sell
some of its assets to reduce ongoing expenditure and bring in additional funds
to enable it develop the Company's assets as planned.
The Company's ability to continue as a going concern and to achieve its long
term strategy of developing its exploration projects is dependent on further
fundraising. Against the background of the significant potential of the
Company's investment projects and the Company's history of raising funds
through the issue of equity, the Directors consider that there is a reasonable
expectation that the required capital can be raised. However, there are
currently no binding agreements in place. Should the Directors be unable to
raise sufficient funds, the Company may be unable to realise its assets and
discharge its liabilities in the normal course of business.
These factors indicate the existence of a material uncertainty which may cast
significant doubt over the Group's and Company's ability to continue as a
going concern. The financial statements do not include the adjustments that
would result if the Group or Company were unable to continue as a going
concern.
*ENDS**
Enquiries:
Armadale Capital Plc +44 (0) 20 7236 1177
Matt Bull, Director
Tim Jones, Company Secretary
Nomad and Broker: Cavendish Capital Markets Limited +44 (0) 20 7220 0500
Simon Hicks / Seamus Fricker
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR UWRNRSVUNUARRecent news on Armadale Capital
See all newsREG - Armadale Capital PLC - Posting of Circular and Notice of GM
AnnouncementREG - Armadale Capital PLC - Proposed Cancellation of Admission, Notice of GM
AnnouncementREG - Armadale Capital PLC - Result of AGM
AnnouncementREG - Armadale Capital PLC - Interim Results
AnnouncementREG - Armadale Capital PLC - Canyon Silver Project Update
Announcement