REG - GreenRoc Mining PLC - Final Results and Notice of AGM
30/05/2024 07:00
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RNS Number : 3567Q GreenRoc Mining PLC 30 May 2024
30 May 2024
GreenRoc Mining plc
("GreenRoc" or the "Company")
2023 Full Year Results, Publication of Annual Report and Notice of AGM
GreenRoc Mining plc (AIM: GROC), a company focused on the development of
critical mineral projects in Greenland, today announces its audited results
for the year ended 30 November 2023.
The Financial Statements (including notes) and the statements of the Chairman
and CEO, set out below, have been extracted from GreenRoc's Annual Report,
which was approved by the Board on 29 May 2024 and will be made available on
the Company's website (www.greenrocmining.com (http://www.greenrocmining.com)
).
Highlights During the Year
· Near three-times increase declared in January 2023 in the Mineral
Resource Estimate ("MRE") for Amitsoq, with the MRE increasing to 23.05 Mt at
a grade of 20.41% C(g) for 4.71 Mt contained graphite.
· European Raw Materials Alliance declared its official support for the
Amitsoq Project in February 2023.
· MoU signed with Norwegian mining and construction group LNS in March
2023.
· GreenRoc named "Greenland's Prospector and Developer of the Year" at
PDAC Toronto in March 2023.
· Graphite samples delivered to a potential international off-take
customer.
· In October 2023, the UK Advanced Propulsion Centre's Automotive
Transformation Fund ("ATF") awarded GreenRoc a grant of £250k to part-finance
a Prefeasibility Study ("PFS") into the establishment of a processing plant to
produce active anode material ("AAM") from Amitsoq graphite concentrate .
· Also in October 2023, an independent Preliminary Economic Assessment
("PEA") was published for Amitsoq which validated the Project's potential to
become a globally significant producer of graphite concentrate, with a pre-tax
NPV8 of US$235M, an IRR of 31.1%, a life of mine (''LOM'') of 22 years, total
gross revenue of US$2.1Bn over the LOM, average net revenue of US$89.8M per
year and a 4-year payback period on capital from the start of production.
· GreenRoc raised a total of £1.9m during the year to fund additional
testing and work programmes to build on the highly successful second phase
drilling programme and fast-track the further development of the Amitsoq
Project.
Post Year-End Highlights
· In January 2024, the Company announced successful results from its
electrochemical battery test work and management undertook site visits to
processing plant manufacturers in China.
· In February 2024, GreenRoc noted that a recent change in Greenland's
mining laws is expected to significantly reduce the timeline for GreenRoc to
apply for and obtain an Exploitation Licence for Amitsoq.
· In March 2024, GreenRoc management was invited to attend and speak at
a high-level roundtable discussion focused on the challenges of the global
graphite supply chain, hosted by the Government of South Korea as part of the
multinational Minerals Security Partnership (''MSP'') and including senior
delegations from both the US and the EU.
· An enlargement to the Amitsoq exploration licence package was
approved in April 2024, with the result that GreenRoc now holds all ground
within the Nanortalik Graphite District which is known to host high-grade
graphite mineralisation.
· Also in April 2024, the Company received a Letter of Interest from US
EXIM Bank, the official export credit agency of the United States, indicating
its willingness to consider financing GreenRoc for up to US$3.5M of US export
contracts relating to goods and services ordered by the Company.
· In May 2024, GreenRoc announced the results of the AAM Plant PFS,
with compelling numbers indicating a pre-tax NPV8 of US$837m with an IRR of
33.8%, total gross revenue of US$6.5Bn over the 22-year period, total gross
profit totalling US$2.7Bn and a 4-year payback period on capital from start of
production, based on average annual processing of 80,000t of graphite
concentrate at 95% graphitic carbon (C(g)) for the production of 39,700t of
AAM.
· Finally, a share placing to raise £238k was completed in May 2024 to
further the Company's work to:
o supplement the AAM Plant PFS;
o continue the process of identifying the optimal AAM Plant location;
o conduct further test work (e.g., on expandable graphite production);
o prepare for Amitsoq public pre-consultation as precursor to applying for
an Exploitation Licence;
o enter the DigBee scheme for ESG performance benchmarking;
o prepare and submit an application to the EU for "Strategic Project" status
for Amitsoq; and
o continue discussions with potential strategic and offtake partners.
Notice of AGM
GreenRoc also announces that its Annual General Meeting will take place on 28
June 2024 at 11.30 am at its registered office, 6th Floor, 60 Gracechurch
Street, London EC3V 0HR. The Notice of Annual General Meeting will be made
available on the Company's website (www.greenrocmining.com
(http://www.greenrocmining.com) ). Shareholders will receive individual
notification and/or copies of relevant documents according to their
communication preferences held on file by the Company's Registrar.
Other than the customary resolutions to be proposed at the Annual General
Meeting, shareholders will also be asked to approve a resolution to change the
Company's name from Greenroc Mining Plc to GreenRoc Strategic Materials Plc.
The GreenRoc Board considers the new name to be more aligned to GreenRoc's
core business strategy, which has evolved since the Company's IPO and
Admission to AIM in September 2021, to create a vertically integrated graphite
anode business involving not only the mining of graphite from the Company's
world-class Amitsoq graphite deposit in south Greenland but also the
construction and operation of an anode processing plant in Europe or North
America for the production of coated spherical purified graphite (cSPG), a key
input material in the lithium-ion battery of an electric vehicle.
GreenRoc's Chairman, George Frangeskides, commented:
"During the past financial year, we have cemented Amitsoq's position as one of
the world's foremost graphite deposits. Our team's work has been focused not
just on bringing the Amitsoq Mine into production, but also on developing the
economic case for a vertically integrated graphite business at GreenRoc,
encompassing not only an upstream graphite mine and primary concentrate
production but also a downstream anode plant which will turn that graphite
concentrate into high-value cSPG for EV batteries. I am pleased to be able to
say that we remain firmly on track for that twin objective, with independent
economic assessments completed in the past year now providing a combined
pre-tax NPV for both sides of the business of more than US$1 billion.
"At the same time, it makes sense that our Company's name and branding should
reflect the evolution of our business strategy and it is for that reason that
we propose to change the Company's name from GreenRoc Mining to GreenRoc
Strategic Materials, reflecting our amibition to become one of the first
Western producers of high-value active anode material for electric vehicle
batteries."
Forward Looking Statements
This announcement contains forward-looking statements relating to expected or
anticipated future events and anticipated results that are forward-looking in
nature and, as a result, are subject to certain risks and uncertainties, such
as general economic, market and business conditions, competition for qualified
staff, the regulatory process and actions, technical issues, new legislation,
uncertainties resulting from potential delays or changes in plans,
uncertainties resulting from working in a new political jurisdiction,
uncertainties regarding the results of exploration, uncertainties regarding
the timing and granting of prospecting rights, uncertainties regarding the
timing and granting of regulatory and other third party consents and
approvals, uncertainties regarding the Company's or any third party's ability
to execute and implement future plans, and the occurrence of unexpected
events.
Actual results achieved may vary from the information provided herein as a
result of numerous known and unknown risks and uncertainties and other
factors.
This announcement contains inside information for the purposes of the UK
Market Abuse Regulation and the Directors of the Company are responsible for
the release of this announcement.
For further information, please contact:
GreenRoc Mining plc +44 20 3950 0724
Stefan Bernstein, CEO
Cairn Financial Advisers LLP (Nomad) +44 20 7213 0880
James Caithie / Sandy Jamieson / Louise O'Driscoll
Oberon Capital (Broker) +44 20 3179 5300
Nick Lovering / Adam Pollock
St Brides Partners Ltd (Financial PR & IR) +44 20 7236 1177
Paul Dulieu / Susie Geliher / Isabelle Morris greenroc@stbridespartners.co.uk
CHAIRMAN'S STATEMENT
I am pleased to present the GreenRoc Mining Plc group ("GreenRoc" or "the
Group") Annual Report for the year ended 30 November 2023.
This year has seen significant progress made at our world-class Amitsoq
Graphite project in South Greenland. The financial year began with us
announcing a near three times increase in the Mineral Resource Estimate for
Amitsoq, at the same time confirming Amitsoq's position as one of the very
highest-grade graphite deposits globally. In the middle of the year, a
potential international off-take customer for Amitsoq, having requested
graphite concentrate and spheronised graphite samples in order to conduct its
own testwork, confirmed itself to be satisfied with the quality of our
graphite. And towards the end of the year, we published an independent
Preliminary Economic Assessment ( "PEA") for Amitsoq which validated the
project's potential to become a globally significant producer of graphite
concentrate, with an after-tax NPV8 of US$179M, an IRR of 26.7%, a life of
mine (''LOM'') of 22 years, total gross revenue of US$2.1Bn over the LOM,
average net revenue of US$89.8M per year and a 4-year payback period on
capital from the start of production.
The PEA represents an assessment only of the economics around the upstream
mining and primary processing operation at Amitsoq, and does not factor in the
considerable upside potential from the downstream processing and conversion of
Amitsoq graphite concentrate into high-value active anode material ("AAM"). It
is significant, therefore, that during the year we also announced the award of
a grant of circa £250,000 by the UK Advanced Propulsion Centre's Automotive
Transformation Fund ("ATF") to part-finance a Prefeasibility Study ("PFS")
into the establishment of a processing plant to produce AAM from graphite
concentrate delivered from Amitsoq. The results of the PFS were published
last month, with an after tax NPV8 of US$545m, an IRR of 25.3% and a 4-year
payback period on the expected capex costs of US$321m for this downstream
segment of the Company's overall value creation strategy for Amitsoq. The
delivery of a robustly positive economic assessment of both the upstream and
the downstream operations provides for a greatly enhanced financial
proposition as we move forward in our discussions with offtakers, strategic
partners and government agencies.
In March of this year I attended the PDAC mining conference in Toronto, one of
the world's biggest annual gatherings of mining companies, governments,
regulators and financiers. PDAC provides an opportunity to gauge the overall
health of the mining sector, to spot emerging trends and gain insights into
the outlook for different commodities. From my conversations with various
industry participants during the conference, what has been clear is how much
the junior resources sector continues to be buffeted by the ongoing
geopolitical and economic shockwaves the world has faced over the past few
years, whether relating to the after-effects of the Covid pandemic or the
terrible conflicts which continue to rage across the world.
That being said, from GreenRoc's perspective PDAC also provided tangible
reasons for renewed optimism as we look forward to the next 12 months. In
particular, it was clear just how seriously Western governments are finally
taking the need to put measures in place to ensure the long-term security of
supply of battery materials, and how this is starting to flow into the promise
of support for companies like GreenRoc which will have a key role in
delivering that supply.
The United States, in particular, was very well represented at PDAC. Its
interest in Greenland specifically was demonstrated by the fact that the US
Under Secretary for Economic Growth, Energy, and the Environment, Jose
Fernandez, spoke during the conference's annual Greenland Day session, which
was hosted by the Government of Greenland. He also attended a high-level
roundtable discussion focused solely on the challenges of the global graphite
supply chain, which was hosted by the Government of South Korea as part of the
Minerals Security Partnership (''MSP''), formed to accelerate the development
of sustainable critical energy minerals' supply chains. MSP partners include
many European states, including the United Kingdom, France and Germany, as
well as India, Japan, the Republic of Korea, the US and EU.
In a sign of the increasing international recognition of the pivotal role the
Amitsoq deposit is set to play in addressing these graphite supply
constraints, GreenRoc's CEO Stefan Bernstein and I were invited by the Korean
Government to attend the MSP roundtable. In fact, GreenRoc was one of just
three global graphite mining companies invited to present their projects at
the session. Other speakers at the roundtable included senior
representatives from the European Commission, the International Finance
Corporation (IFC) and the US Development Finance Corporation (DFC).
Stefan and I also held various bilateral meetings with key US and other
international agencies, the outcomes of which have given us a renewed
confidence in the growing impetus of Western governments to make available te
necessary financial and strategic support to help us bring Amitsoq into
commercial production. Indeed, the first concrete action in that direction
came with our announcement last month that we had received a Letter of
Interest from the Export-Import Bank of the United States ("US EXIM Bank"),
the official export credit agency of the United States, to finance GreenRoc
for up to US$3.5M of US export contracts relating to goods and services
ordered by the Company. Such contracts could relate, for instance, to the
conduct of Pre- or Definitive Feasibility Studies ("PFS" and "DFS"
respectively) for the Amitsoq Mine and/or a DFS of the AAM Processing Plant.
As we continue into 2024, therefore, I believe we are in a very strong
position to capitalise on the increasing awareness of the critical role which
Amitsoq is set to play in the Western battery materials supply chain.
On behalf of the entire Board, I would like to take this opportunity to thank
GreenRoc's shareholders for their continued support.
George Frangeskides
Chairman
CHIEF EXECUTIVE OFFICER'S STATEMENT
INTRODUCTION
The major milestone achieved over the past year was the completion of a
Preliminary Economic Assessment of the Amitsoq Graphite project, which
confirmed a robust and positive economic outlook for the project. In addition
to the economic metrics (which are reported on further below), the PEA
contains a detailed evaluation of fundamental matters relating to mine design
and the siting of construction, accommodation and processing facilities which
are critical to a future mining operation at Amitsoq.
PROJECTS OVERVIEW
The Company's flagship project is the Amitsoq Graphite project in South
Greenland, a historic mine which the Company is pushing towards reopening as a
producing graphite mine by 2027/28. Two exploration licences associated with
this project are: the Amitsoq licence itself, MEL 2013-06, and the adjacent
licence MEL 2022-03, which contains evidence of high-grade graphite
mineralisation - none of which has ever been tested by drilling. In January
2024, the Company submitted an application for an enlargement of the ground
east of the MEL 2022-03 licence to include the remaining known graphite
mineralisation in the Nanortalik Graphite District. At the time of writing the
application is being processed by the Greenland Government. The grant of this
enlargement will cement GreenRoc's position as the sole and exclusive rights
holder over the emerging world-class Nanortalik Graphite District.
In North Greenland, GreenRoc holds exploration licence MEL 2017-29,
encompassing the Thule Black Sands (''TBS'') project, a heavy mineral sand
deposit spanning several kilometres of coastline. At the time of writing,
following its most recent drilling programme, the Company is awaiting an
updated mineral resource estimate.
Licence 2017-41 in Melville Bay, a prospective iron ore resource, was
relinquished at the end of 2023, as the Company seeks to focus its resources
on developing the world-class Amitsoq project as the best way to deliver
significant shareholder value.
The three licences held by the Company are in good standing with regard to
exploration obligations.
Amitsoq Graphite Project ("Amitsoq")
A PEA on Amitsoq was commenced in May 2023 and concluded in October 2023. This
assessment, by leading consultancy SLR Consulting Ltd represents the first
detailed independent study of the economic viability of the Amitsoq project.
The results of the PEA were very positive, with the headline points being as
follows:
· Pre-Tax Net Present Value at 8% discount rate (NPV(8)) of US$235M
with Internal Rate of Return (IRR) of 31.1%.
· After-tax NPV(8) of US$179M with IRR of 26.7%.
· Life of mine (LOM) is 22 years with potential to extend through
resource expansion.
· 4-year payback period on capital from start of production.
· Average Net Revenue of US$89.8M per year throughout the 22-year LOM.
· Total gross revenue of US$2.1Bn over a 22-year LOM, with total
undiscounted net pre-tax cash flow totalling US$794.7 M.
· Initial capital cost (Capex) of US$131M inclusive of 25% contingency.
· Average operating cost (Opex) of US$121 per tonne of milled ore.
· Average annual production of 77,000t of concentrate at a minimum 94%
grade.
· Mine plan assumes mining from the Lower Graphite Layer (LGL) only,
leaving considerable resources from the Upper Graphite Layer (UGL) available
for future production expansion or extension to the LOM.
The nominal mining rate was set at 400,000t per year. Importantly, the PEA is
calculated by mining only the Lower Graphite Layer (LGL), which is the
thickest and richest of the two main orebodies at Amitsoq. Also, about 75% of
the resource for the PEA Cash Flow Model is comprised of Indicated and
Measured Resources, leaving only about 25% coming from Inferred Resources.
Prioritizing the LGL in the mining model increases the global ore grade from
20.4% to 21.3% and makes for a simpler mining design, while reserving the UGL
for later expansion.
An important aspect of the selected mine design is the ability to use tailings
(the waste product left on site after processing the ore to a primary
concentrate) as backfill in the mine. With an annual nominal mining rate of
400,000t, ca. 3.8M m(3) of tailings will be produced throughout the LOM, of
which ca. 3.3M m(3) will be able to be used as backfill with only ca. 0.5M
m(3) remaining for surface storage. This is not only an environmentally
positive outcome for the project, with most tailings being returned
underground, it also means that the overall cost of tailings and waste
management at Amitsoq can be dramatically reduced.
A number of options have been considered for the storage of the relatively
modest volume of tailings, including both dry-stack and a wet storage
facility. Transport to the storage facility is planned to take place on
barges. In terms of infrastructure plans, we intend to utilise some of the
existing platform and mine adits from the historic mining activities which
ceased about 100 years ago, as well as some existing facilities in Nanortalik
town, which is only about 15km to the South of Amitsoq. Nanortalik has several
vacant houses and office buildings as well as a deep-water port. Mining is
envisaged to take place throughout the year, as the deep fjords surrounding
Amitsoq do not freeze over in the winter, and, being located in the South of
Greenland, the Nanortalik region enjoys relatively mild weather compared to
the rest of Greenland.
Test work is ongoing with respect to obtaining important data regarding the
precise characteristics of Amitsoq graphite ore and, therefore, the optimal
processing options. A 670kg bulk sample collected from the underground
workings at Amitsoq is undergoing tests at UVR-FIA GmbH, a German process
engineering firm specialising in mineral resources. In addition to achieve
constraints on processing parameters of Amitsoq ore, the test work will also
supply GreenRoc with graphite concentrate allowing the Company to conduct
further test work on producing downstream products for the battery industry
(see below) as well as understanding which processing units give the best
results. A further 160kg composite bulk sample is undergoing processing tests
with FLSmidth A/S, a Danish multinational technology and service supplier to
the global mining industry, using their newly developed pressurised flotation
cells. The reports from these tests will be available in Q2-Q3, 2024.
GreenRoc has held several information meetings with the Greenland Government
over the past year and has developed a very good relationship with frequent
interaction and mutual sharing of information. In parallel, GreenRoc has held
two information meetings with local communities in Nanortalik, in January and
November 2023. The feedback from the local communities has been overwhelmingly
positive, with genuine interest and support from the local community in seeing
the Amitsoq mine becoming active again.
Establishing a vertically integrated graphite business
The main market for graphite in the decades to come will be in the
electrification of vehicles, where graphite is extensively used as anode
material for Li-batteries. Another growing market is in energy storage
systems, both for domestic and industrial use. The demand for graphite in the
manufacturing of Li-based batteries for electric vehicles is set to rise four
times over the coming decade (Fastmarkets, 2023). Today, China accounts for
around two thirds of the world's graphite production and has a near monopoly
on the processing of graphite to active anode material (AAM). As such, Western
battery and electric car producers are wholly dependent on the import of
graphite anode material from China. The production of AAM requires natural
flake graphite concentrate (>94% purity) as feedstock. The processing of
that concentrate into AAM involves micronisation, shaping to rounded particles
(spheronisation), purification to a >99.95% pure graphite and finally
coating to make a coated spherical purified graphite (cSPG) product. AAM
typically sells at prices 5-10 times higher than the price of a simple
graphite concentrate.
By no means do all occurrences of natural flake graphite meet the exacting
requirements to qualify as feedstock in the production of AAM. In order to
confirm that Amitsoq graphite meets these standards, GreenRoc has commissioned
German graphite specialists ProGraphite GmbH to run a series of test
programmes, including the production of spherical purified graphite from
Amitsoq concentrate. The tests results have demonstrated very good performance
levels across all parameters, including when incorporated within a
laboratory-constructed Li-battery cell in order to mirror actual EV battery
conditions. These highly positive test results strengthen GreenRoc's resolve
to create a fully integrated business for the production of AAM. Further
support for the quality of our graphite has also been provided by a potential
large industry offtaker which requested Amitsoq graphite samples to carry out
their own test work in late 2023. They have since confirmed that our graphite
performed very well across all parameters.
GreenRoc's objective of establishing itself as a vertically integrated
producer of AAM for the European and/or US battery industries is motivated not
only by a desire to capture the significant value upside from the sale of AAM
but also because using our own fully owned source of high-quality graphite
feedstock as the input material into an anode production plant has several
advantages:
· supply security;
· ensuring a consistent quality of graphite feedstock and eliminating
the need for recalibration of processing routines;
· allowing for the development of bespoke spheronisation and
purification processes;
· the ability to demonstrate the highest ESG standards for our AAM; and
· localised production reducing sovereign and geopolitical risk and
operating costs, in turn making Amitsoq more attractive to potential strategic
partners and offtakers.
In September 2023, GreenRoc commenced a feasibility study on establishing an
AAM processing plant in Northern Europe. The plant will have a nominal annual
capacity to process 70-80,000t of graphite concentrate which in turn will
yield 30-40,000t of AAM, sufficient to make batteries for about 1 million
electric cars per annum. The feasibility study was managed by GreenRoc and
conducted by a consortium of leading specialist contractors: Benchmark Mineral
Intelligence (market analysis and AAM specifications), ProGraphite (technical
solutions, state-of-the-art instrumentation and supplier details), SLR
Consulting (pilot processing and full-scale processing plant outline, economic
model) and Decision Risk Analytics (dynamic risk/opportunity model). The
feasibility study has been supported by a £258,000 grant from the ATF and the
results of this study were reported in early May 2024. The results of the
study demonstrate the value of this vertical integration strategy, with a post
tax NPV8 of US$545m, IRR of 25.3% and Capex payback period of 4 years after
commencing production. The study includes an economic model, sensitivity
analysis and risk model providing GreenRoc with a solid foundation for a
decision to move forward with our integrated business model strategy.
As part of the anode plant feasibility study, a GreenRoc delegation, including
myself and a metallurgical expert from SLR Consulting, travelled to China in
January 2024 to visit three leading manufacturers of graphite processing
equipment, as well as a producing AAM plant. The visit was extremely useful
and provided us with valuable information about the latest state-of-the-art
processing equipment and the potential suppliers of such equipment.
Amitsoq - the year ahead
A change in Greenland's mining laws, effective 1 January 2024, now allows an
Exploitation Licence to be applied for and granted prior to the final approval
of a project's Environmental Impact Assessment ("EIA"), Social Impact
Assessment ("SIA") and Impact Benefit Agreement ("IBA"). Previously, an
Exploitation Licence could only be applied for once the lengthy EIA and SIA
processes had been completed and formally approved and an IBA between the
Government of Greenland, GreenRoc and the local Municipality had been
negotiated and signed.
This change, allowing the process for the grant of an Exploitation Licence to
run in parallel with the EIA and SIA processes, rather than having to wait for
the latter to be completed, means that the additional time required to achieve
an Exploitation Licence should be considerably reduced.
Under the new law, provided the holder of an Exploration Licence has
substantiated and delineated a viable mineral deposit which it intends to
exploit, and has complied with its licence obligations, the licence holder
will be entitled to be granted an Exploitation Licence. Before an Exploitation
Licence can be granted, the licence holder must submit a Project Description
and details of the Mineral Resource Estimate to the Government. The Project
Description must then be translated into Greenlandic and Danish and published
for public consultation for at least 35 calendar days. Once the applicant has
addressed any pertinent issues raised in the public consultation, it will then
be entitled to the grant of an Exploitation Licence.
GreenRoc believes this change in the law is likely to shorten the Exploitation
Licence permitting process for the Amitsoq Graphite project by several months
if not a full year, given that it has already formally submitted to the
Greenland Government its draft Project Description for Amitsoq, in December
2023. Further, GreenRoc has also fulfilled the condition requiring a viable
mineral deposit to be substantiated and delineated at Amitsoq, as supported by
the results of the PEA published in October 2023. It is expected, therefore,
that an application for an Exploitation Licence will be submitted in the first
half of 2024, paving the way to its possible grant before the end of 2024.
After the conclusion of the Pre-feasibility Study on the AAM Plant, and the
conclusion that it represents a very attractive business case for GreenRoc,
the next move is to locate the right site for such a plant. Presently, we are
looking at a handful of sites across four countries and are collecting data as
well as establishing business contacts at these locations. Along side, we are
exploring the possibilities of public support for the pre-construction
development of both the Amitsoq mine and the AAM plant in terms of grants and
loans.
Other developments
On 30 November 2023, the EU and Greenland signed a strategic partnership to
develop sustainable raw materials value chains. The partnership agreement is
in the form of a Memorandum of Understanding (MoU). Following the signature of
the MoU, the EU and Greenland will jointly develop a roadmap with concrete
actions to put the strategic partnership into practice.
GreenRoc's Amitsoq project is an obvious candidate to be designated a
strategic project under the EU's Critical Raw Materials Act, given that
natural flake graphite is on the EU's list of strategic raw materials.
Discussions with other EU bodies such as EIT Raw Materials and the European
Battery Alliance are also advancing. Lately, the European Battery Alliance
announced the establishment of a €500M fund to support the development of a
domestic supply of battery raw materials.
Thule Black Sands Ilmenite Project ("TBS")
Exclusive exploration licence MEL 2017-29 is located in northern Greenland
(see Fig. 3). The project, TBS, covers a long stretch of coast with
significant deposits of heavy mineral sands at or near surface. The mineral of
interest here is ilmenite, an iron-titanium oxide mineral, which is of great
economic importance because it is the main feedstock for producing titanium
dioxide pigment for enamel, paints and other coatings. Titanium is defined as
a critical raw materials by the EU and by the USA.
A large drilling programme was conducted at TBS in 2021 using a sonic drill
rig. The material from the drilling was sent to specialist mineral sands
consultants IHC Mining in Australia (IHC). The completion of the analytical
programme has been delayed due to a series of events outside the Company's
control. A final series of tests and analytical work having now been carried
out, at the time of writing IHC is in the process of completing itsfinal
report and revised mineral resource evaluation. IHC's Competent Person's
Report is expected shortly.
FINANCING
The Company completed four placings in the year: in December 2022, gross
proceeds of £333,000 were raised at 4.5 pence; in March £550,000 was raised
at 3.5 pence; in August 2023, gross proceeds of £470k were raised at 3.8
pence; and in November 2023, gross proceeds of approximately £461k were
raised at 2.5 pence, with an additional tranche of 3,000,000 shares issued at
2.5 pence issued immediately after the year end. The funds have been primarily
used to conduct the Amitsoq PEA and to support the funding of the Feasibility
Study into an AAM processing plant. In addition, funding has been directed to
conduct the ongoing Environmental and Social Impact Assessments, test work on
Amitsoq graphite concentrate and electrochemical test work of AAM produced
from Amitsoq graphite concentrate. Post year end, the Company undertook a
further placing of £238,311 to further support this work programme, along
with the working capital needs of the business as we advance the development
of these exciting projects.
OUTLOOK
GreenRoc has set its intention to become one of the first, if not the first,
vertically integrated producer of European, domestically sourced AAM for the
fast-growing battery industry. While prices for battery raw materials are
currently experiencing a down cycle, expert analysts agree that in the long
run, graphite producers will see a marked increase in commodity prices, driven
by the massive industry and consumer demand for electric vehicles, as well as
by the rapidly increasing use of graphite AAM for establishing large battery
energy storage facilities across the world, an emerging market which has been
largely overlooked in the past. Current low commodity prices, which graphite
shares with nickel, lithium and cobalt, among others, have little bearing on
the future profitability of GreenRoc's Amitsoq project as we are aiming at
commencing production from 2027, by which time all forecasts show a deficit in
global graphite supply resulting in elevated prices for AAM.
In a geopolitical landscape where Western nations are scrambling to secure
their supply chains of critical raw materials, Greenland is seeing an
increasing interest in its large-scale projects from the European Union, as
well as from individual countries such as the USA, the UK, Japan and South
Korea. We are already seeing the tangible results of this with a pipeline of
governmental support programmes having either been already implemented or
announced by a wide range of nations and intergovernmental bodies. This
support is expected to result in political and financial support to projects
which can deliver high-quality critical raw materials with high ESG standards
to support the energy transition in the Western world. One of the most obvious
candidates for this is GreenRoc and our Amitsoq Graphite Project.
Stefan Bernstein
Chief Executive Officer
CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 30 NOVEMBER 2023
Note Year ended 30 November 2023 Year ended 30 November 2022
£'000 £'000
Administrative expenses 3 (903) (1,030)
Impairment 1 (787) (199)
Operating loss 3 (1,690) (1,229)
Finance expense (1) (1)
Foreign Exchange (2) -
Loss for the period before tax (1,693) (1,230)
Taxation 5 - -
Loss for the period from continuing operations (1,693) (1,230)
Attributable to:
Equity holders of the parent (1,693) (1,230)
(1,693) (1,230)
Earnings per ordinary share attributable to the ordinary equity holders of the
parent
Basic and diluted 6 (1.26 pence) (1.10 pence)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30
NOVEMBER 2023
Year ended 30 November 2023 Year ended 30 November 2022
£'000 £'000
Loss after tax (1,693) (1,230)
Total comprehensive income (1,693) (1,230)
Total comprehensive income attributable to:
Equity holders of the parent (1,693) (1,230)
(1,693) (1,230)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 30 NOVEMBER 2023
Company No 13273964
Note Year ended 30 November 2023 Year ended 30 November 2022
£'000 £'000
Non-current assets
Intangible fixed assets 7 9,840 10,151
Total non-current assets 9,840 10,151
Current assets
Trade and other receivables 8 436 13
Cash and cash equivalents 9 152 126
Total current assets 588 139
Current liabilities
Trade and other payables 10 (397) (256)
Payable to parent entity 10 - (65)
Total current liabilities (397) (321)
Net current (liabilities)/assets 191 (182)
Non-current liabilities
Deferred tax 1, 5 (1,004) (1,004)
Total non-current liabilities (1,004) (1,004)
Net assets 9,027 8,965
Shareholders' equity
Share capital 11 215 161
Share premium 11 11,706 10,033
Share-based payment reserve 12 280 252
Retained earnings (3,174) (1,481)
Total equity 9,027 8,965
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 NOVEMBER 2023
Share capital Share premium Share-based payment reserve Retained earnings Total
£'000 £'000 £'000 £'000 £'000
At 30 November 2021 161 10,033 166 (306) 10,054
Loss for the period - - - (1,230) (1,230)
Total comprehensive income for the period - - - (1,230) (1,230)
Contributions by and distributions to owners
Fair value of share options awarded - - 141 - 141
Reversal of share options cancelled - - (55) 55 -
At 30 November 2022 161 10,033 252 (1,481) 8,965
Loss for the period - - - (1,693) (1,693)
Total comprehensive income for the period - - - (1,693) (1,693)
Contributions by and distributions to owners
Shares issued 54 1,673 - - 1,727
Fair value of share options awarded - - 28 - 28
At 30 November 2023 215 11,706 280 (3,174) 9,027
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 30 NOVEMBER 2023
Note Year ended 30 November 2023 Year ended 30 November 2022
£'000 £'000
Cash flows from operating activities
Operating loss (1,690) (1,229)
Adjustments for:
Share-based payment charge 24 141
Impairment 787 199
Bonuses settled in shares - -
(Decrease)/increasein creditors 141 (226)
(Increase)/decrease in trade and other receivables (423) 51
Net cash used in operating activities (1,161) (1,064)
Cash flows used in investing activities
Purchase of intangible assets 7 (476) (2,091)
Net cash used in investing activities (476) (2,091)
Cash flows from financing activities
Proceeds from the issue of shares 11 1,731 -
Repayment of loan from parent (65) -
Receipts of borrowings from parent - 13
Finance expense (3) (1)
Net cash generated from financing activities 1,663 12
Net increase in cash and cash equivalents 26 (3,143)
Cash and cash equivalents at beginning of period 126 3,269
Cash and cash equivalents at end of period 9 152 126
Significant non-cash transactions in the period included share-based payments
and the impairment of exploration and evaluation assets (see notes 1, 4, and
7).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. ACCOUNTING POLICIES AND BASIS OF PREPARATION
GreenRoc Mining Plc is a public limited company incorporated on 17 March 2021
and domiciled in England & Wales, whose shares are publicly traded on the
AIM market of the London Stock Exchange Group Plc. The registered office
address is 6th Floor 60 Gracechurch Street, London, United Kingdom, EC3V 0HR.
The Company's principal activities are the development of mining and
exploration interests in Greenland, where its subsidiaries hold three separate
exploration permits.
These consolidated Financial Statements have been prepared in accordance with
UK-adopted international accounting standards ("UK-adopted IAS") as they apply
to the Group for the period ended 30 November 2023 and with the Companies Act
2006. The reporting and functional currency of the Group is British Pounds
Sterling (GBP). Numbers have been rounded to £'000.
The consolidated Financial Statements have been prepared on the historical
cost basis, save for the revaluation of certain financial assets as a result
of fair value accounting. The principal accounting policies applied in the
preparation of these Financial Statements are set out below.
During the year, Alba Resources Plc ceased to be the Company's Ultimate
Controlling Party but remains the Company's largest shareholder , having held
38.17% of the ordinary share capital of the Company as at the year end (since
reduced to 37.49% as a result of placings after the year end), and has the
right to appoint two Directors to the Board. The next largest shareholder,
Kadupul Limited, currently holds 12.49% of the Company's share capital.
Going concern
In determining whether these financial statements should be prepared on the
going concern basis, the Directors must consider whether the business has
adequate financial resources to continue to operate and meet its obligations
for a period of at least 12 months from the date of this report.
Based on financial projections prepared by the Directors, the Group's current
cash resources are insufficient to enable the Group to meet its recurring
outgoings and planned exploration expenditure for the entirety of the next
twelve months.
As an explorer with assets in the exploration and development stage, the Group
does not generate revenue and is reliant on external funding such as capital
raisings to fund activities. The Directors intend to raise funds in advance of
fieldwork programmes in Greenland, in order to advance its mineral projects.
The precise nature and cost of those programmes are determined based on the
results of previous studies.
This fundraising activity is undertaken as and when required, and as such the
Group does not regularly carry cash reserves sufficient for 12 months of
expenditure. However, the Board has a reasonable expectation that the Group
will continue to be able to meet its commitments for the foreseeable future by
raising funds when required, based on the following:
· The Group has a track record in sourcing external funding, having
raised funds in multiple prior years;
· The Group has a supportive major shareholder (Alba Minerals Resources
Plc) which has a strong track record of raising funds for exploration over a
number of years;
· Results from the Group's graphite and ilmenite projects have been
positive and support the case for further investment;
· Forecasts contain a level of discretionary spend such that, in the
event that cash flows become constrained, action can be taken to enable the
Group to operate within available funding;
· The Group and Company may also consider future joint venture funding
arrangements in order to share the costs of the development of its exploration
assets, and/or to consider divesting of certain of its assets and realising
cash proceeds in that way in order to support the balance of its exploration
and investment portfolio.
The Directors have prepared cash flow forecasts to 30 June 2025 which take
into account committed exploration spend, costs and external funding. In
November/December 2023, the Company raised net proceeds of £500k through an
institutional placing, with an additional £238k having been raised in May
2024 post year end, and retains the capacity to undertake further fundraising
activity as and when determined necessary, either by way of placings of new
shares, partial monetisation of assets by way of partnership agreements (joint
ventures) or some combination of both. Nevertheless, the requirement for
external funding to be able to continue operations over the period of
assessment, and the fact that the availability of such funding cannot be
assured, represents a material uncertainty that may cast doubt on the Group's
ability to continue as a going concern.
As a consequence of the above, in the opinion of the Directors, the
preparation of these financial statements on the going concern basis remains
appropriate.
International Financial Reporting Standards
There are no significant changes within the International Financial Reporting
Standards (IFRS) framework which impact upon the Company and its subsidiaries
within the next financial reporting year.
Standards issued but not yet effective are as follows:
· Amendments to IAS 1: Classifications of current or non-current
liabilities (effective 1 January 2024) and Amendments to IAS 1: Classification
of Liabilities as Current or Non-current - Deferral of Effective Date -
effective 1 January 2024;
· Amendments to IAS 8: Accounting Policies, Changes to Accounting
Estimates and Errors (effective 1 January 2023);
· Amendments to IAS 12: Income Taxes - Deferred Tax arising from a
Single Transaction (effective 1 January 2023).
· Amendments to IAS 1: Presentation of Financial Statements and IFRS
Practice Statement 2: Disclosure of Accounting Policies (effective 1 January
2023)
· Amendments to IAS 12: Income Taxes - Deferred Tax arising from a
Single Transaction - applicable for annual periods beginning on or after 1
January 2023
· Amendments to IFRS 16 Leases: Lease liability in a Sale and Leaseback
- effective date 1 January 2024
· Amendments to IAS 1 Presentation of Financial Statements"
Classification of Liabilities as Current or Noncurrent - Deferral of Effective
Date - effective date 1 January 2024
· Amendments to IFRS 10 Consolidated Financial Statements and IAS 28
Investments in associates and Joint Ventures: Sale of Contribution of Assets
between and investor and its Associate or Joint Venture - effective date
optional.
Critical accounting estimates and judgements
The preparation of the Financial Statements requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities as well as the disclosure of contingent assets and liabilities at
the reporting date and the reported amounts of revenues and expenses during
the reporting period. Actual outcomes could differ from those estimates.
Estimates and judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances. The areas of judgement that
have the most significant effect on the amounts recognised in the Financial
Statements are as follows:
i) JUDGEMENTS
Capitalisation of exploration and evaluation costs
The capitalisation of exploration costs relating to the exploration and
evaluation phase requires management to make judgements as to the future
events and circumstances of a project, especially in relation to whether an
economically viable extraction operation can be established. In making such
judgements, the Directors take comfort from the findings from exploration
activities undertaken, the fact the Group intends to continue these activities
and that the Company expects to be able to raise additional funding to enable
it to continue the exploration activities.
Impairment assessment of exploration and evaluation costs
At each reporting date, management make a judgment as to whether circumstances
have changed following the initial capitalisation and whether there are
indicators of impairment. If there are such indicators, an impairment review
will be performed which could result in the relevant capitalised amount being
written off to the income statement.
During the year to 30 November 2023, all capitalised costs in respect of the
Melville Bay project were impaired on the basis of the Company's decision to
discontinue activity on that licence area. The impairment charge arising as a
result of this decision was £787k.
All of the other current exploration projects are being actively progressed
and the Company does not believe any circumstances have arisen to indicate
these assets require impairment.
ii) ESTIMATES
Share-based payments
Share-based payments represent the fair value of shares issued to employees of
the Company, and warrants issued to third parties in consideration for
services provided. The cost of these share-based payments is based on the
number of options or warrants awarded, the grant date and exercise price, the
vesting period, and calculated based on a Black-Scholes model whose input
assumptions are derived from market and other estimates. These estimates
include volatility rates, the risk-free rate and the expected term of the
options. For further details, see note 4.
ACCOUNTING POLICIES
Basis of consolidation
The consolidated Financial Statements incorporate the Financial Statements of
the Company and companies controlled by the Company, namely the Subsidiary
Companies, drawn up to 30 November each year.
Control is recognised where the Company has the power to govern the financial
and operating policies of an investee entity to obtain benefits from its
activities. The results of subsidiaries acquired or disposed of during the
period are included in the consolidated income statement from the effective
date of acquisition or up to the effective date of disposal, where
appropriate.
Where necessary, adjustments are made to the Financial Statements of
subsidiaries to bring the accounting policies used into line with those used
by the Group. All intra-group transactions, balances, income and expenses
are eliminated on consolidation. Non-controlling interests in the net assets
of consolidated subsidiaries are identified separately from the Group's equity
therein.
Foreign currency
For the purposes of the consolidated Financial Statements, the results and
financial position of each Group entity are expressed in pounds sterling,
which is the presentation currency for the consolidated Financial Statements.
Each Group entity determines its own functional currency and items included in
the Financial Statements of each entity are measured using that functional
currency.
The functional currencies of the foreign subsidiaries are the Danish Kroner
("DKK").
In preparing the Financial Statements of the individual entities, transactions
in currencies other than the entity's functional currency (foreign currencies)
are recorded at the rates of exchange prevailing at the dates of the
transactions. At each reporting date, monetary items denominated in foreign
currencies are retranslated at the rates prevailing at the reporting date.
Exchange differences arising are included in the profit or loss for the
period.
On consolidation, the assets and liabilities of the Group's overseas
operations are translated into the Group's presentational currency at exchange
rates prevailing at the reporting date. Income and expense items are
translated at the average exchange rates for the period unless exchange rates
have fluctuated significantly during the year, in which case, the exchange
rate at the date of the transaction is used. All exchange differences arising,
if any, are recognised as other comprehensive income and are transferred to
the Group's foreign currency translation reserve.
Share-based payments
Share-based compensation benefits are made on an ad-hoc basis on the
recommendations of the Remuneration Committee. The fair value of warrants or
options granted is recognised as an employee benefits expense, with a
corresponding increase in the share-based payment reserve. The total amount to
be expensed is determined by reference to the fair value of the options
granted:
· including any market performance conditions (e.g., the entity's share
price);
· excluding the impact of any service and non-market performance
vesting conditions (e.g., profitability, sales growth targets and remaining an
employee of the entity over a specified time period); and
· including the impact of any non-vesting conditions (e.g., the
requirement for employees to save or hold shares for a specific period of
time).
The total expense is recognised over the vesting period, which is the period
over which all of the specified vesting conditions are to be satisfied. At the
end of each period, the entity revises its estimates of the number of options
that are expected to vest based on the non-market vesting and service
conditions. It recognises the impact of the revision to original estimates, if
any, in profit or loss, with a corresponding adjustment to the share-based
payment reserve.
Warrants issued as part of the cost of an equity raise (for example as part of
advisers' fees) are recorded at fair value as a cost of that financing within
Share Premium and Share-based Payment Reserve.
Intangible assets: capitalised exploration and evaluation costs
Pre-licence costs are expensed in the period in which they are incurred.
Expenditure on licence renewals and new licence applications covering an area
previously under licence are capitalised in accordance with the policy set out
below.
Once the legal right to explore has been acquired, exploration costs and
evaluation costs arising are capitalised on a project-by-project basis,
pending determination of the technical feasibility and commercial viability of
the project. Costs include appropriate technical and administrative expenses.
If a project is successful, the related expenditures will be reclassified as
development and production assets and amortised over the estimated life of the
commercial reserves. Prior to this, no amortisation is recognised in respect
of such costs. When all licences comprising a project are relinquished, a
project is abandoned or is considered to be of no further commercial value to
the Company, the related costs will be written off to administrative expense
within profit or loss. Deferred exploration costs are carried at historical
cost less any impairment losses recognised.
Impairment reviews for capitalised exploration and evaluation expenditure are
carried out on a project-by-project basis, with each project representing a
potential single cash generating unit. In accordance with the requirements of
IFRS 6, an impairment review is undertaken when indicators of impairment arise
such as:
· unexpected geological occurrences that render the resource
uneconomic;
· title to the asset is compromised;
· variations in mineral prices that render the project uneconomic;
· substantive expenditure on further exploration and evaluation of
mineral resources which is neither budgeted nor planned; and
· the period for which the Group has the right to explore has expired
and is not expected to be renewed.
Where an impairment loss subsequently reverses, the carrying amount of the
asset (or cash-generating unit) is increased to the revised estimate of its
recoverable amount, but so that the increased carrying amount does not exceed
the carrying amount that would have been determined had no impairment loss
been recognised for the asset (or cash-generating unit) in prior years. A
reversal of an impairment loss is recognised in profit or loss for the year.
Financial instruments
Financial assets and financial liabilities are recognised in the statement of
financial position when the Group becomes a party to the contractual
provisions of the instrument.
Financial assets are classified as either:
· those to be measured subsequently at fair value (either through other
comprehensive income or through profit or loss); or
· those to be measured at amortised cost.
The classification is dependent on the business model adopted for managing the
financial assets and the contractual terms of the cash flows expected to be
derived from the assets.
For assets measured at fair value, gains and losses will either be recorded in
profit or loss or other comprehensive income. For investments in equity
instruments that are not held for trading, this will depend on whether the
Group has made an irrevocable election at the time of initial recognition to
account for the equity investment at fair value through other comprehensive
income.
The Group's financial assets comprise equity instruments and debt instruments
as described below.
Impairment provisions for receivables and loans to related parties are
recognised based on a forward-looking expected credit loss model. The
methodology used to determine the amount of the provision is based on whether
there has been a significant increase in credit risk since initial recognition
of the financial asset. For those where the credit risk has not increased
significantly since initial recognition of the financial asset, twelve month
expected credit losses along with gross interest income are recognised. For
those for which credit risk has increased significantly, lifetime expected
credit losses along with the gross interest income are recognised. For those
that are determined to be credit impaired, lifetime expected credit losses
along with interest income on a net basis are recognised.
Investment in subsidiaries: Investment in subsidiaries, comprising equity
instruments and capital contributions, are recognised initially at cost less
any provision for impairment.
Loans to subsidiaries: Loans to subsidiaries, other than capital
contributions, are held for the collection of contractual cash flows and are
classified as being measured at amortised cost, net of provision for
impairment. Impairment is initially based on the expected lifetime credit loss
as applied to the portfolio of loans. The loans are interest free and have no
fixed repayment terms. As such the loans are assessed as being credit impaired
on inception and lifetime expected credit losses are recognised with the
amount of provision being recognised in the profit or loss.
A loan is fully impaired when the relevant subsidiary recognises an impairment
of its deferred exploration expenditure, such that the subsidiary is not
expected to be able to repay the loan from its existing assets.
Trade and other receivables: Trade and other receivables are held for the
collection of contractual cash flows and are classified as being measured at
amortised cost. They are recognised initially at fair value and subsequently
measured at amortised cost using the effective interest method less provision
for impairment.
Cash and cash equivalents: Cash and cash equivalents include cash on hand and
deposits held at call with banks.
Trade and other payables: Trade and other payables are not interest bearing
and are recognised initially at fair value and subsequently measured at
amortised cost.
Financial liabilities:
· Trade payables and other short-term monetary liabilities are
initially recognised at fair value and subsequently carried at amortised cost
using the effective interest method.
· There are no financial liabilities classified as being at fair value
through profit or loss.
· Borrowings are initially recognised at fair value net of any
transaction costs directly attributable to the issue of the instrument. Such
interest-bearing liabilities are subsequently measured at amortised cost using
the effective interest rate method. Interest expense includes initial
transaction costs and any premium payable on redemption, as well as any
interest or coupon payable while the liability is outstanding.
· Liability components of convertible loan notes are measured as
described further below.
Share capital: The Company's ordinary and deferred shares are classified as
equity.
Warrants: Warrants are stated at their fair value, which is estimated using a
Black Scholes model where they are not issued as part of a cash transaction.
Taxation
The charge for taxation is based on the profit or loss for the period and
takes into account deferred tax. The Group's liability for current tax is
calculated using tax rates that have been enacted or substantively enacted by
the reporting date. Deferred tax is the tax expected to be payable or
recoverable on differences between the carrying amounts of assets and
liabilities in the Financial Statements and the corresponding tax bases used
in the computation of taxable profit or loss, and is accounted for using the
liability method.
Deferred tax assets are only recognised to the extent that it is probable that
future taxable profit will be available in the foreseeable future against
which the temporary differences can be utilised.
2. ANALYSIS OF SEGMENTAL INFORMATION
The Group currently only has one primary reporting business segment,
exploration and development. The Group exploration assets and investments
along with capital expenditures are presented on this basis below:
2023 2022
£'000 £'000
Total assets
Exploration and evaluation 9,840 10,151
Current assets 436 13
Cash 152 126
10,428 10,290
Capitalised exploration and evaluation expenditure
Exploration and evaluation - Greenland 476 2,091
476 2,091
The Group's primary business activities are the exploration projects in
Greenland and its corporate head office in the UK. The split of total assets
and capitalised exploration and evaluation expenditure between these locations
is set out below:
2023 2022
£'000 £'000
Total assets
Greenland 9,868 10,151
United Kingdom 560 139
10,428 10,290
The administrative expenditure in the income statement primarily relates to
central costs.
3. OPERATING LOSS
2023 2022
£'000 £'000
This is stated after charging:
Share-based payments charge 24 141
Auditor's remuneration
- Group audit services 40 35
- Group taxation advice - 9
Administration expenses are made up as follows:
2023 2022
£'000 £'000
Staff costs (including share-based payments) 411 534
Professional fees 225 162
Office, travel, and other 192 171
Fees for services - parent 75 163
Total 903 1,030
4. DIRECTORS' EMOLUMENTS AND STAFF COSTS
During the period there were six permanent employees, being the Directors (who
are the key management personnel). There were no temporary employees.
2023 2022
£'000 £'000
Staff and Directors' Remuneration
Salaries 320 349
Share based payment charge 24 141
Pension contributions 1 10
Total remuneration 345 500
Average number of employees 6 6
Remuneration of each Director is set out below for 2023.
2023 2022
Salary Bonus Pension FV of options Total Salary Bonus Pension FV of options Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Directors
Kirk Adams - - - - - 101 - - 38 139
Stefan Bernstein 110 - - 3 113 41 - 9 2 52
Jim Wynn(2) 38 - 1 3 42 38 - 1 18 57
George Frangeskides 54 - - 13 67 54 - - 69 123
Lars Brünner 44 - - 1 45 55 - - - 55
Mark Austin 30 10 - 3 43 30 - - 14 44
Mark Rachovides 30 - - 1 31 30 - - - 30
Andrew Panteli(3) 4 - - - 4 - - - - -
Total 310 10 1 24 345 349 - 10 141 500
(1) Kirk Adams retired from the Board on 6 May 2022
(2) Jim Wynn retired from the Board on 11 October 2023
(3) Andrew Panteli was appointed on 11 October 2023
A bonus of £10k was paid to Mark Austin during 2023 (2022: nil).
During the year, Stefan Bernstein was the highest-paid employee, receiving
remuneration totalling £110,000 (2022: £139k). There were no employees
other than Directors, whose remuneration is fully disclosed in the above
table.
During the year the Company granted share options to the Directors as follows:
No options Date of grant Exercise price
Lars Brunner 300,000 14-Apr-23 £0.10
Mark Rachovides 300,000 14-Apr-23 £0.10
Total options granted in 2023 600,000
The above share options vest after the following periods have elapsed since
the date of grant: 75% after 12 months; 12.5% after 24 months; and 12.5% after
36 months.
Total options held by Directors at year end were as follows:
No options Date of grant Exercise price
Stefan Bernstein 1,000,000 8-Jul-22 £0.10
George Frangeskides 1,500,000 28-Sep-21 £0.10
Mark Austin 300,000 28-Sep-21 £0.10
Lars Brunner 300,000 14-Apr-23 £0.10
Mark Rachovides 300,000 14-Apr-23 £0.10
Total options at 30 November 2023 3,400,000
The total estimated value of the share-based remuneration provided to
Directors was £24k (2022:£141k), which is expensed over the vesting period
of each tranche. These values were derived from a Black Scholes model as
described in note 1.
5. INCOME TAXES
a) Analysis of charge in the period
2023 2022
£'000 £'000
United Kingdom corporation tax at 19% (2022: 19%) - -
Deferred taxation - -
- -
b) Factors affecting tax charge/(credit) for the period
The tax assessed on the loss for the period before tax differs from the
standard rate of corporation tax in the UK which is 19%. The differences are
explained below:
2023 2022
£'000 £'000
Loss before tax (1,693) (1,230)
Loss multiplied by standard rate of tax (19%) 322 234
Effects of:
Disallowed expenses (154) (65)
Deferred tax assets not recognised (168) (169)
- -
A deferred tax asset has not been recognised in respect tax losses and
accelerated capital allowances, due to uncertainty that the potential asset
will be recovered.
In 2021, a deferred tax liability of £1.0 million was recognised as part of
the fair value accounting for the acquisition of the Alba subsidiaries,
representing the taxation impact of the fair value uplift of the intangible
assets acquired, which would not be an allowable deduction from tax profits in
future periods.
6. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the loss attributed to
ordinary shareholders of £1.7 million (2022: £1.2 million) by the weighted
average number of shares of 134,217,972 (2022: 111,200,001) in issue during
the period. At 30 November 2023 and at 30 November 2022, the effect of all the
potentially dilutive instruments in issue is anti-dilutive as it would lead to
a further reduction of loss per share, therefore no fully diluted loss per
share has been disclosed.
7. INTANGIBLE ASSETS - EXPLORATION & EVALUATION ASSETS
Amitsoq Thule Black Sands Inglefield Melville Bay Total
£'000 £'000 £'000 £'000 £'000
Net Book Value at 30 November 2021 3,275 4,011 199 774 8,259
Additions 1,717 374 - - 2,091
Impairment - - (199) - (199)
Net Book Value at 30 November 2022 4,992 4,385 - 774 10,151
Additions 451 12 - 13 476
Impairment - - - (787) (787)
Net Book Value at 30 November 2023 5,443 4,397 - - 9,840
As all exploration and evaluation assets remain in the early, pre-production
stages of the asset life cycle, no amortisation has been recorded in respect
of these assets.
Impairment losses of £787,000 have been recorded in the current year (2022:
£199,000) following a determination by the Company not to continue to pursue
the development of its Melville Bay asset, with the licence having been
formally relinquished following the reporting date.
8. TRADE AND OTHER RECEIVABLES
2023 2022
Current receivables £'000 £'000
VAT receivable 45 13
Share subscriptions receivable 387 -
Prepayments 4 -
436 13
VAT receivable relates to input VAT on supplies during the period.
As at 30 November 2023, £387k in share subscription funding remained
receivable from investors for the placing of new ordinary shares on 22
November 2023, with such funds having been received in settlement of this
receivable on 4 December 2023.
9. CASH AND CASH EQUIVALENTS
2023 2022
£'000 £'000
Cash at bank and in hand 152 126
The fair value of cash at bank is the same as its carrying value.
10. TRADE AND OTHER PAYABLES
2023 2022
Current £'000 £'000
Trade creditors 200 138
Accruals and deferred income 150 118
Other creditors 47 -
Loan due to parent entity - 65
397 321
The fair value of trade and other payables approximates to their book value.
Other creditors are the amounts received for a placing made after year end.
11. CALLED UP SHARE CAPITAL
Number of Share capital Deferred shares Share premium Total
shares
£'000 £'000 £'000 £'000
Allotted, called up and fully paid
Ordinary shares of £0.001 pence 165,114,162 165 - 11,706 11,871
Deferred shares of £0.099 500,000 - 50 - 50
Total 165,614,162 165 50 11,706 11,921
A total of 53,914,161 ordinary shares were issued in the year ended 30
November 2023 (2022: nil). The movement in shares in issue, share capital,
deferred share capital and share premium during 2023 was as follows:
Ordinary Shares Deferred Shares Share capital Deferred shares Share premium Total
of £0.001 of £0.099 £'000 £'000 £'000 £'000
At 30 November 2022 111,200,001 500,000 111 50 10,033 10,194
Movement during year 53,914,161 - 54 - 1,673 1,727
At 30 November 2023 165,114,162 500,000 165 50 11,706 11,921
12. RESERVES
The following describes the nature and purpose of certain reserves within
owners' equity:
Share premium Amounts subscribed for share capital in excess of nominal value less costs of
issue.
Share-based payment reserve Amounts charged each period in relation to share options and warrants.
The share-based payment reserve movement of £28k (2022: £86k) in the year
consisted of £24k (2021: £141k) in respect of the fair value of employee
share options and £4k (2022: nil) in respect of warrants granted. During
2022, the fair value of employee share options were offset by £55k in respect
of share options which were cancelled in the period (whose accumulated fair
value was reversed through the profit and loss reserve).
13. CAPITAL COMMITMENTS
As at 30 November 2023, the Company had no undischarged capital expenditure
commitments on its Greenland licences due to its historic expenditures having
been substantially in excess of minimum obligations in previous years, with
the excess expenditure carried forward more than offsetting these obligations
at all of its licences.
14. CONTINGENT LIABILITIES
The Company had no contingent liabilities at the end of the period.
15. FINANCIAL INSTRUMENTS
The Group's financial instruments comprise investments, cash at bank, and
various items such as debtors, loans, and creditors. The Group has not entered
into derivative transactions, nor does it trade financial instruments as a
matter of policy.
Credit risk
The Group's credit risk arises primarily from cash at bank, other debtors, and
the risk the counterparty fails to discharge its obligations.
The Company holds its cash with MetroBank Plc whose credit rating is B+.
Funding risk
Funding risk is the possibility that the Group might not have access to
the financing it needs. The Group's continued future operations depend on the
ability to raise sufficient working capital through the issue of equity share
capital. The Directors are confident that adequate funding will be forthcoming
with which to finance operations. The Directors have a strong track record of
raising funds as required both as GreenRoc as well as within Alba. Controls
over expenditure are carefully managed and activities planned to ensure that
the Group has sufficient funding.
Liquidity risk
Liquidity risk arises from the management of cash funds and working capital.
The risk is that the Group will fail to meet its financial obligations as they
fall due. The Group operates within the constraints of available funds and
cash flow projections are produced and regularly reviewed by management.
Interest rate risk profile of financial assets
The only financial assets (other than short term debtors) are cash at bank and
in hand, which comprises money at call. The interest earned in the period was
negligible. The Directors believe the fair value of the financial instruments
is not materially different to the book value.
Foreign currency risk
The Group incurs costs denominated in foreign currencies (including Danish
Krone and Euros) which gives rise to short term exchange risk. The Group does
not currently hedge against these exposures as they are deemed immaterial and
there is no material exposure as at the period end.
Market risk
The underlying value of the Group's assets is exposed to the spot price in the
relevant commodities, notably graphite (Amitsoq) and ilmenite (TBS).
Categories of financial instrument
2023 2022
£'000 £'000
Financial assets
Held at amortised cost:
Trade and other receivables 432 13
Cash at bank 152 126
584 139
Financial liabilities
Loan due to parent entity - 65
Trade creditors 200 138
Other creditors 47 -
247 203
16. CAPITAL MANAGEMENT
The Group's objective when managing capital is to safeguard the entity's
ability to continue as a going concern and develop its mining and exploration
activities to provide returns for shareholders. The Group's funding to date
has been comprised of equity. The Directors consider the Company's capital and
reserves to be capital. When considering the future capital requirements of
the Group and the potential to fund specific project development via debt, the
Directors consider the risk characteristics of all the underlying assets in
assessing the optimal capital structure.
17. RELATED PARTY TRANSACTIONS
Alba Mineral Resources Plc, which owned 38.17% of the Company's issued shares
as at year end (and 37.49% at the date of this report as a result of a
subsequent share placing), charged fees for services in the period amounting
to £75k (2022: £163k). These fees were calculated in accordance with the
terms of the Services Agreement entered into between the Company and Alba in
September 2021, and relate to finance, management, exploration, technical and
other professional activities, as well as the pass-through of certain costs
settled by Alba on behalf of GreenRoc (for example travel expenditures for the
Greenland field trips during the year). These charges were at arm's-length
rates.
The Financial Statements for Alba are available on their website at
www.albamineralresources.com (http://www.albamineralresources.com) .
18. EVENTS AFTER THE REPORTING PERIOD
· On 1 December 2023 the Company allotted 3,000,000 new ordinary shares
to investors for 2.5 pence per share in settlement of a share placing
announced on 27 November 2023.
· On 31 January 2024, the Company announced the successful completion
of preliminary testing of the Company's graphite from the Amitsoq licence area
for suitability as an active anode material during electrochemical battery
test work undertaken by ProGraphite GmbH. The results indicate that the
Amitsoq graphite will be highly suitable as a feedstock for battery grade
anode material and acts as a critical step in the ongoing Processing Plant
Feasibility Study workstream currently underway.
· On 7 February 2024, the Company announced that changes to the
Greenland mining laws enacted on 1 January 2024 facilitated an acceleration of
the process for applying for, and being awarded, an exploitation licence over
the Company's Amitsoq licence area, with the Company noting that an
application for an exploitation licence was expected to be filed in 1H2024 and
award expected by end 2024.
· On 7 February 2024 the Company announced the relinquishment of its
Melville Bay exploration licence.
· On 7 May 2024 the Company announced the results of the anode plant
feasibility study, noting a pre-tax NPV8 of US$837m, post tax NPV8 of US$545m,
post tax IRR of 25.3% and 4 year payback period on capex of US$321m (with 25%
contingency).
· On 28 May 2024 the Company announced the placing of 13,239,499 new
ordinary shares at 1.8 pence per share raising gross funds of £238,311 to be
applied against further project development costs and general working capital
purposes.
There were no other significant post-balance sheet events.
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