REG - Blencowe Resources - Half-year Report
14/06/2024 07:00
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RNS Number : 3824S Blencowe Resources PLC 14 June 2024
Date: 14 June 2024
Blencowe Resources Plc
("Blencowe" or the "Company")
Interim Consolidated Financial Statements
for the six month period ended 31 March 2024
The Company is pleased to announce its Interim Results for the six-month
period to 31 March 2024.
Electronic copies of the report will be available at the Company's website
www.blencoweresourcesplc.com (http://www.blencoweresourcesplc.com)
For further information please contact:
Blencowe Resources www.blencoweresourcesplc.com (http://www.blencoweresourcesplc.com)
Sam Quinn Tel: +44 (0) 1624 681 250
info@blencoweresourcesplc.com (mailto:info@blencoweresourcesplc.com)
Investor Enquiries Tel: +44 (0) 7891 677 441
Sasha Sethi sasha@flowcomms.com (mailto:sasha@flowcomms.com)
Tavira Securities Limited Tel: +44 (0)203 192 1733
Jonathan Evans jonathan.evans@tavirasecurities.com
(mailto:jonathan.evans@tavirasecurities.com)
Interim Management Report
This report covers the period 30 September 2023 to 31 March 2024, and
subsequent events to 30 April 2024.
Work has been progressing on many fronts, on four continents, as the
Orom-Cross Definitive Feasibility Study "(DFS") gathers momentum.
In September the long-awaited Technical Assistance Grant Agreement ("TAG") was
signed with the US Government's private sector investment arm, the Development
Finance Corporation ("DFC"). This is a US$5 million grant awarded to
Blencowe to assist with DFS costs and it is with pleasure I note that Blencowe
is the first pre-production graphite company to receive such a grant from the
US Government. Aside from the obvious advantages of having approximately 40%
of our overall DFS costs being funded for free the credibility of both our
Company and our Orom-Cross project are both significantly raised by having a
partner of this calibre. Blencowe wishes to state once again our
appreciation to DFC for this grant and all efforts will be made to deliver a
first class DFS as a result.
To date US$3 million of this grant funding has been received as tranches are
delivered on DFS milestones being achieved. It is our expectation that the
final US$2 million will be received over the next six months for further work
and ultimately completion of DFS. In addition, DFC is mandated to play a
role as lead partner in a funding solution for Orom-Cross implementation
ahead, and management are working closely with DFC to ensure that this will
happen as substantial funding solutions remain the largest challenge for any
new graphite project, so to have DFC involved adds significant weight and
prestige, and a potential funding party with US$5 million skin in the game.
During this period several key milestones have been met with regards to actual
DFS work. In 2H 2023 a 100-tonne bulk sample was mined and delivered to a
technical facility in northern China which is a leading expert on graphite
processing, and this ore was then beneficiated into 96% LOI concentrate.
This in turn provides offtakers with the knowledge that commercial scale
processing of Orom-Cross ore can deliver same high quality results as all
lab-scale testing has shown to date, and secondly to provide a substantial
quantum of 96% concentrate for Blencowe to send to various parties as samples,
for testing and review. Following the success of this action, and the
request of several tier one potential offtake partners, Blencowe has more
recently mined a further 600-tonne bulk sample and sent it to the same
facility, for the same reasons. This latest sample will also be beneficiated
beyond 96% concentrate to a 99.95% uncoated SPG (spheronised, purified
graphite) which is very near to what is used in the lithium-ion battery as
graphite content.
Ultimately Blencowe is seeking offtake contracts and this commercial scale
test work is designed to provide the samples and the results to qualify
Orom-Cross product for these contracts, which themselves form an integral part
of the DFS.
Other work continues within Uganda on infrastructure, community relations,
environmental updates and all other key aspects of the DFS, and Blencowe
remains working towards end-2024 as the delivery date for the DFS - subject to
all necessary funding received to deliver as such.
Specialist technical work has also been underway in this period in the USA,
considering the beneficiation of Orom-Cross concentrates to various high end
products, up to 99.99% which is military grade. To date all work has been
successful and provided evidence Orom-Cross has one of the most pure
concentrates and upgraded products and this will bode well in future offtake
discussions.
Despite all of this progress the Company is facing macro-challenges and the UK
market remains flat, which has a direct impact on both the share price and
market value. Blencowe will continue to market its achievements and remains
positive on the medium and longer term outlook for graphite. We will
continue to build our project and add value as this will ultimately be
significant as demand continues to rise, while supply of graphite
(particularly high quality) remains static.
We thank our shareholders and other stakeholders for their continued support
and we look forward to continuing to kick goals ahead to deliver the DFS and
success for the Company.
Mike Ralston
Chief Executive Officer
Responsibility Statement of the Directors in respect of the Interim Report
The Directors are responsible for preparing the Interim Financial Statements
in accordance with applicable law and regulations. In addition, the Directors
have elected to prepare the Interim Financial Statements in accordance with
International Financial Reporting Standards ("IFRSs"), as adopted by the
United Kingdom ("UK").
The Interim Financial Statements are required to give a true and fair view of
the state of affairs of the Group and of the profit or loss of the Group for
that period.
In preparing these Interim Financial Statements, the Directors are required
to:
· select suitable accounting policies and then apply them consistently;
· present information and make judgements that are reasonable, prudent
and provides relevant, comparable and understandable information;
· provide additional disclosures when compliance with the specific
requirements in IFRS is insufficient to enable users to understand the impact
of particulars transactions, other events and conditions on the entity's
financial position and financial performance; and
· make an assessment of the Group's ability to continue as a going
concern.
The Directors are responsible for keeping proper accounting records that are
sufficient to show and explain the Group's transactions and disclose with
reasonable accuracy at any time its financial position of the Group to enable
them ensure that the financial statements comply with the requirements of the
Companies Act 2006. They have general responsibility for taking such steps as
are reasonably open to them to safeguard the assets of the Group and to
prevent and detect fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the
corporate and Interim Financial Statements. Legislation governing the
preparation and dissemination of Interim Financial Statements may differ from
one jurisdiction to another.
We confirm that to the best of our knowledge:
· the Interim Financial Statements, prepared in accordance with
International Financial Reporting Standards as adopted by the UK, give a true
and fair view of the assets, liabilities, financial position and profit or
loss of the Group for the period;
· the Director's report includes a fair review of the development
and performance of the business and the position of the group, together with a
description of the principal risks and uncertainties that they face; and
· the interim report and financial statements, taken as a whole, are
fair, balanced and understandable and provide the information necessary for
shareholders to assess the group's performance, business model and strategy.
Consolidated Statement of Comprehensive Income for the six month period ended 31 March 2024
6 months ended 6 months ended 12 months ended
31 Mar 2024 31 Mar 2023 30 Sep 2023
(Unaudited) (Unaudited) (Audited)
Notes GBP GBP GBP
Exploration costs (23,669) (16,642) (53,347)
Administrative fees and other expenses 5 (682,486) (446,424) (1,298,872)
Operating loss (706,155) (463,066) (1,352,219)
Finance costs (19,685) (23,010) (45,748)
Loss before tax (725,840) (486,076) (1,397,967)
Income tax - - -
Loss after tax (725,840) (486,076) (1,397,967)
Other comprehensive income
Exchange differences on translation of foreign operation 64,153 7,807 31,282
Other comprehensive income, net of tax 64,153 7,807 31,282
Total comprehensive loss (661,687) (478,269) (1,366,685)
Basic and diluted loss per share (pence) 10 (0.31) (0.28) (0.70)
There was no other comprehensive income for the period ended on 31 March 2024.
The accompanying notes on form an integral part of the Interim Financial
Statements.
Consolidated Statement of Financial Position as at 31 March 2024
As at As at As at
31 Mar 2024 31 Mar 2023 30 Sept 2023
(Unaudited) (Unaudited) (Audited)
Notes GBP GBP GBP
Non-Current Assets 6 7,061,967 7,065,820 7,604,564
Current assets
Trade and other receivables 7 113,470 135,901 31,863
Cash and cash equivalents 444,991 130,740 129,853
Total current assets 558,461 266,641 161,716
Total assets 7,620,428 7,332,461 7,766,280
Current liabilities
Creditors: Amounts falling due within one year 8 (1,238,944) (414,843) (1,076,169)
Total current liabilities (1,238,944) (414,843) (1,076,169)
Non-current liabilities
Surface liabilities 9 (783,549) (785,520) (818,915)
Total liabilities (2,022,493) (1,200,363) (1,895,084)
Net assets 5,597,935 6,132,098 5,871,196
Equity
Share capital 12 1,377,801 1,275,066 1,338,566
Share premium 12 8,986,590 8,099,579 8,637,399
Warrants reserves 428,342 402,148 428,342
Translation reserve 94,892 7,264 30,739
Retained earnings (5,289,690) (3,651,959) (4,563,850)
Total equity 5,597,935 6,132,098 5,871,196
The accompanying form an integral part of the Interim Financial Statements.
Share capital Share premium Share option reserves Retained earnings Translation reserve Total equity
GBP GBP GBP GBP GBP GBP
Balance as at 30 Sep 2022 1,181,316 7,480,829 402,148 (3,165,883) (543) 5,897,867
Total comprehensive loss for 6 months
Loss for the period - - - (486,076) - (486,076)
Total comprehensive loss - - - (486,076) - (486,076)
Contributions from equity holders
New shares issued 93,750 656,250 - - - 750,000
Share issue costs - (37,500) - - - (37,500)
Exchange differences on translation - - - - 7,807 7,807
Total contributions from equity holders 93,750 618,750 - - 7,807 720,307
Balance as at 31 Mar 2023 1,275,066 8,099,579 402,148 (3,651,959) 7,264 6,132,098
Total comprehensive loss for 6 months
Loss for the period - - - (911,891) - (911,891)
Total comprehensive loss - - - (911,891) - (911,891)
Contributions from equity holders
New shares issued 63,500 571,500 - - - 635,000
Share issue costs - (33,680) - - - (33,680)
Warrants reserve - - - - - -
Exchange differences on translation of foreign operations - - 26,194 - 23,475 49,669
Total contributions from equity holders 63,500 537,820 26,194 - 23,475 650,989
Balance as at 30 Sep 2023 1,338,566 8,637,399 428,342 (4,563,850) 30,739 5,871,196
Consolidated Statement of Changes in Equity for the six month period ended 31 March 2024
Total comprehensive loss for 6 months
Loss for the period - - - (725,840) - (725,840)
Total comprehensive loss - - - (725,840) - (725,840)
Contributions from equity holders
New shares issued 39,235 353,115 - - - 392,350
Share issued costs - (3,924) - - - (3,924)
Exchange differences on translation of foreign operations - - - - 64,153 64,153
Total contributions from equity holders 39,235 349,191 - - 64,153 452,579
Balance as at 31 Mar 2024 1,377,801 8,986,590 428,342 (5,289,690) 94,892 5,597,935
The accompanying notes on form an integral part of the Interim Financial
Statements.
Consolidated Statement of Cash Flows for the six month period ended 31 March 2024
As at As at As at
31 Mar 2024 31 Mar 2023 30 Sept 2023
(Unaudited) (Unaudited) (Audited)
Notes GBP GBP GBP
Operating activities
Loss after tax (725,839) (486,076) (1,397,967)
Depreciation - 104 -
Finance costs 19,685 23,010 45,748
Adjustment to Surface Liability - - -
Share issue/warrant cost - - 26,194
Unrealised currency translation 126,864 261,566 182,264
Changes in working capital
Decrease/(increase) in trade and other receivables 7 (81,607) (50,054) 53,984
Increase/(decrease) in trade and other payables 8 162,775 (39,568) 272,664
Net cash flows from operating activities (498,122) (291,018) (817,113)
Investment activities
Purchase of fixed assets - (748) -
Investment in exploration assets (1,175,345) (621,988) (713,848)
Net cash flows from investment activities (1,175,345) (622,736) (713,848)
Financing activities
DFC Government grant 6 1,600,178 - -
Shares issued (net of issue cost) 388,427 697,500 1,313,820
Net cash flows from financing activities 1,988,605 697,500 1,313,820
Increase in cash and short-term deposits 315,138 (216,254) (217,141)
Cash and short-term deposits brought forward 129,853 346,994 346,994
Cash and cash equivalents at end of period 444,991 130,740 129,853
The accompanying notes form an integral part of the Interim Financial
Statements.
Notes to the Financial Statements for the six month period ended 31 March 2024
1. General
Blencowe Resources Plc (the "Company") is a public limited company
incorporated and registered in England and Wales on 18 September 2017 with
registered company number 10966847 and its registered office situated in
England and Wales at 167-169 Great Portland Street, Fifth Floor, London,
England W1W 5PF.
The Group did not earn any trading income during the period under review but
incurred expenditure in developing its principal assets.
The Consolidated Interim Financial Statements of the Company for the six month
period ended 31 March 2024 comprise the financial statements of the Company
and its subsidiaries (together referred to as the "Group").
2. Accounting Policies
Basis of preparation
The Interim Financial Statements of the Group are unaudited condensed
financial statements for the six month period ended 31 March 2024.
The accounting policies applied by the Group in these Interim Financial
Statements, are the same as those applied by the Group in its consolidated
financial statements and have been prepared on the basis of the accounting
policies applied for the financial year to 30 September 2023 which have been
prepared in accordance with IFRS as adopted by UK. The Group Financial
Statements have been prepared using the measurement bases specified by IFRS
each type of asset, liability, income and expense.
The Group Financial Statements are presented in GBP, which is the Group's
functional currency. All amounts have been rounded to the nearest pound,
unless otherwise stated.
Government grants
This is the first reporting period the Group is recognising government grants.
Government grants are recognized once the entity has complied with conditions
attaching to them and they have been received. Governments grants are
accounted for using the capital approach under which a grant is recognized
outside the profit and loss. Government grants related to assets, are
presented in the statement of financial position by deducting the grant in
arriving at the carrying amount of the asset. The grant is recognized in
profit or loss over the life of a depreciable asset as a reduced depreciation
expense.
Comparative figures
The comparative figures have been presented as the Group Financial Statements
cover the 6 month period ended 31 March 2023 and the 12 month period ended 30
September 2023. During 2024, the Group discovered that share premium had been
erroneously classified as share capital and administration expenses captured
as share issue costs for interim accounts as at 31 March 2023. Refer to Note
12.
3. Critical accounting estimates and judgments
In preparing the Group's Interim Financial Statements, the Directors have to
make judgments on how to apply the Group's accounting policies and make
estimates about the future. The Directors do not consider there to be any
critical judgments that have been made in arriving at the amounts recognised
in the Group Financial Statements.
4. Significant accounting policies
The accounting policies adopted are consistent with those followed in the
preparation of the annual financial statements of Blencowe Resources Plc for
the year ended 30 September 2023. A copy of these financial statements is
available on the Group website at https://blencoweresourcesplc.com.
5. Administrative fee and other expenses
6 months ended 6 months ended 12 Months ended
31 Mar 2024 31 Mar 2023 30 Sep 2023
(Unaudited) (Unaudited) (Audited)
GBP GBP GBP
Directors' remuneration 69,857 70,023 140,051
Professional fees 80,001 121,692 226,471
Salaries 75,000 75,000 150,000
Listing fees 20,933 18,218 41,123
Audit fees 33,498 21,644 35,000
Share issue/warrant cost - - 26,194
Administration fees 23,500 23,500 47,000
Sponsorship 5,690 - -
Broker fees 18,434 20,500 41,000
Travelling expenses 11,034 7,959 16,852
Ugandan taxes 342,751 - 392,425
Miscellaneous fees 4,445 87,888 72,625
Royalties 1,244 - -
Foreign currency (gain)/loss (3,901) - 110,131
Total 682,486 446,424 1,298,872
The Group had two employees who are key management personnel and three
Directors. The Directors and the key management personnel's remuneration
related solely to short term employee benefits.
6. Non-Current assets
For the period ended 31 March 2024 intangible assets represents capitalised
costs associated with the Group's exploration, evaluation and development of
mineral resources net of any Government grants received.
6 months ended 6 months ended 12 months ended
31 Mar 2024 31 Mar 2023 30 Sept 2023
(Unaudited) (Unaudited) (Audited)
GBP GBP GBP
Exploration assets 8,662,145 7,065,176 7,604,564
Property, Plant and Equipment - 644 -
Grant from US Government (Refer below) (1,600,178) - -
Total 7,061,967 7,065,820 7,604,564
The company signed a US$5 million agreement with the U.S. International
Development Finance Corporation ("DFC") in order to provide substantial
funding for the Orom Cross Definitive Feasibility Study programme, via a
Technical Assistance Grant ("TAG"). The DFC is a proxy for the US Government
which funds the organisation and ultimately sets its vision, parameters and
funding distribution. DFC payments will be made as agreed feasibility study
milestones are achieved. As part of the US$5 million Technical Assistance
Grant ("TAG") the DFC has a right of first refusal on commercial terms to
arrange project financing for the Orom-Cross project, which may deliver
Blencowe with a full funded solution to bring Orom-Cross into production with
support from a major financial institution. The agreement is subject to
various events of default.
7. Trade and other receivables
6 months ended 6 months ended 12 Months ended
31 Mar 2024 31 Mar 2023 30 Sep 2023
(Unaudited) (Unaudited) (Audited)
GBP GBP GBP
Other receivables 35,166 21,526 9,421
Prepayments 78,304 114,375 22,442
Total 113,470 135,901 31,863
8. Creditors: Amounts falling due within one year
6 months ended 6 months ended 12 Months ended
31 Mar 2024 31 Mar 2023 30 Sep 2023
(Unaudited) (Unaudited) (Audited)
GBP GBP GBP
Payables 707,912 103,980 644,585
Surface liabilities (Note 9) - 143,036 -
Accruals and provision 194,352 167,827 39,159
Ugandan taxes 336,680 - 392,425
Total 1,238,944 414,843 1,076,169
9. Surface liabilities
Blencowe Resources Uganda Limited, the Company's subsidiary entered into an
agreement for surface rights over the land in the mineral area of the licence.
The land owners granted Blencowe Resources Uganda Limited a 49 year lease over
an area. The liability to the land owners is to be paid in 8 instalments at
defined dates with the final payment due in 2035.
6 months ended 6 months ended 12 Months ended
31 Mar 2024 31 Mar 2023 30 Sep 2023
(Unaudited) (Unaudited) (Audited)
GBP GBP GBP
Total payable at the beginning of the period 818,915 978,255 978,255
Utilisation - - (148,468)
Interest charged during the period 19,685 23,010 45,748
Exchange loss on valuation (55,051) (72,709) (56,620)
Total payable as at period end 783,549 928,556 818,915
Analysis between current and non-current liability
Payable within 12 months - 143,036 -
Payable after 12 months 783,549 785,520 818,915
783,549 928,556 818,915
The value of the lease is measured at the present value of the contractual
payments due to the lessor
over the lease term, with the discount rate of 5%.
10. Loss per share
The calculation of the basic and diluted loss per share is based on the
following data:
6 months ended 6 months ended 12 Months ended
31 Mar 2024 31 Mar 2023 30 Sep 2023
(Unaudited) (Unaudited) (Audited)
Earnings GBP GBP GBP
Loss from continuing operations for the period attributable to the equity (661,687) (478,269) (1,397,967)
holders of the Group
Number of shares
Weighted average number of Ordinary Shares for the purpose of basic and
diluted earnings per share
210,540,876 168,803,923 200,041,594
Basic and diluted loss per share (pence) (0.31) (0.28) (0.70)
There are no potentially dilutive shares in issue.
11. Related party transactions
The are no related party transactions during the period except for the
Directors' remuneration, which have been disclosed in note 5.
Sam Quinn is a director and shareholder of the Company and a Director of
Lionshead Consultants Limited. During the period, Lionshead Consultants
Limited charged fees for consultancy fees of £18,000 (31 March 2023: £18,000
and 30 Sep 2023: £36,000).
12. Reclassification
During 2024, the Group discovered that share premium had been erroneously
classified as share capital and administration expenses captured as share
issue costs for interim accounts as at 31 March 2023. These errors has been
corrected by restating each of the affected financial statement line items for
prior periods. The following table summarises the impact on the Group's
consolidated accounts.
Impact of reclassification
As previously reported Restatement As restated
GBP GBP GBP
Total assets 7,332,461 - 7,332,461
Total liabilities (1,215,363) 15,000 (1,200,363)
Net assets 6,117,098 15,000 6,132,098
Share capital 1,931,316 (656,250) 1,275,066
Share premium 7,428,329 671,250 8,099,579
Warrants reserve 402,148 - 402,148
Translation reserve 7,264 - 7,264
Retained earnings (3,651,959) - (3,651,959)
Total Equity 6,117,098 15,000 6,132,098
There is no material impact on the Group's basis or diluted earnings per share and no impact on the total operating, investing or financing cashflows for the half year ended 31 March 2023.
13. Events after the reporting date
On 10 April 2024, the Company announced the receipt of its third tranche US$1
million funding from the United States International Development Finance
Corporation ("DFC"). This payment, representing a further 20% of the full
US$5 million DFC grant further supports the ongoing Orom-Cross Definitive
Feasibility Study ("DFS") costs, bringing the total received to US$3 million
since the agreement was signed in Sept 2023. The DFC is the primary US
Government finance institution set up to provide financially sound solutions
for private sector initiatives pertaining to critical challenges facing the
world.
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