REG - GreenRoc Strateg PLC - Interim Results for the six months to 31 May 2024
14/08/2024 07:00
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RNS Number : 3084A GreenRoc Strategic Materials Plc 14 August 2024
GreenRoc Strategic Materials Plc / EPIC: GROC / Market: AIM / Sector: Mining
14 August 2024
GreenRoc Strategic Materials Plc
("GreenRoc" or the "Company")
INTERIM RESULTS FOR THE SIX MONTHS TO 31 MAY 2024
The Board of Directors of GreenRoc Strategic Materials Plc is pleased to
report the Company's interim results for the six months ended 31 May 2024.
These incorporate the results of its subsidiary companies: GreenRoc Graphite
Limited (formerly Obsidian Mining Limited ("OML"), White Eagle Resources
Limited ("WERL"), White Fox Resources Limited ("WFRL"), and its Greenlandic
subsidiary Greenland Graphite A/S (together, the "Subsidiary Companies",
collectively with GreenRoc, the "Group").
Highlights
· A change in Greenlandic law, with effect of January 1, 2024, allows
for a faster application process for an exploitation permit. GreenRoc expects
to be in a position to apply for an exploitation permit for licence MEL
2013-06 at Amitsoq before the end of 2024.
· In April 2024, GreenRoc's application for an enlargement of the
licence MEL 2022-03 was approved by the Government of Greenland. With that,
the Company now holds all of the prospective ground in South Greenland with
known graphite mineralisation - several of which hold exceptionally high
grades similar to those of Amitsoq.
· GreenRoc is experiencing increased international interest for its
Amitsoq graphite mine and graphite active anode material ("AAM") plant project
("AAM Plant"). As an example, GreenRoc was invited to present at the Mineral
Security Partnership ("MSP") meeting on graphite held in Toronto in March
2024, as one out of only three established global graphite companies and the
only graphite company from the northern hemisphere. The MSP is a collaboration
of 13 countries plus the EU and is designed to catalyse public and private
investment in responsible critical minerals supply chains globally.
· Another example is the receipt in April 2024 of a Letter of Interest
from US EXIM Bank inviting GreenRoc to apply for financing of up to US$ 3.5M
towards the Company's work programme.
· Amitsoq uncoated purified spherical graphite was analysed for its
electrochemical performance in a test battery cell at a specialised battery
research facility in Europe. The Amitsoq graphite anode performed well against
all studied parameters, was very stable and had no signs of damage or loss of
capacity after several cycles of both short and intensive charging.
· In January 2024, GreenRoc representatives visited key Chinese
manufacturers of graphite anode material processing equipment as part of the
Pre-Feasibility Study ("PFS") in respect of the Company's planned AAM Plant.
The PFS has been supported by a £250,000 grant from the UK's Automotive
Transformation Fund.
· Results of the AAM Plant PFS were published in May and July 2024 and
showed:
- Pre-Tax Net Present Value at 8% discount rate (NPV8) of US$942M with
Internal Rate of Return (IRR) of 35.4%.
- After-tax NPV8 of US$621M with IRR of 26.5%.
- Total gross revenue of US$6.5Bn over the 22-year period, with total
gross profit totalling US$3.1Bn.
- Years of operation set at 22 to match that planned for the Amitsoq
graphite mine.
- 4-year payback period on capital from start of production.
- Initial capital cost (Capex) of US$340M inclusive of a 25%
contingency.
- Average operating cost (Opex) of US$1,872 per tonne of CSPG.
- Average annual processing of 80,000t of graphite concentrate at 95%
graphitic carbon (C(g)) with production of 39,700t of active anode material in
the form of coated spherical purified graphite (CSPG).
Post period end highlights
· Successful equity placings in May and June 2024, raising gross
proceeds of £0.44 million. Funds to be used to supplement the Anode Plant
PFS, continue the process of identifying the ideal location for the AAM Plant,
finalise the Pressurised Flotation Cell beneficiation tests of Amitsoq
graphite ore, progress the Amitsoq Social Impact Assessment ("SIA") and
Environmental Impact Assessment ("EIA") programmes and support commercial
negotiations with potential offtake and financial partners.
· Further test work is ongoing, including application of novel
pressurised flotation cells on Amitsoq ore, conducted by FLSmidth & Co A/S
("FLSmidth") at its test facility in Utah, USA.
· Development of an improved, more environmentally friendly
purification process for Amitsoq spheronised graphite, using less (or
completely eliminating the use of) hydrofluoric acid.
· GreenRoc to register with DigBee as a means to benchmark project
ESG performance.
GreenRoc's CEO, Stefan Bernstein, commented:
"The recent release of the very positive results of the PFS on our planned
anode material plant, which calculated a post-tax NPV of well over half a
billion dollars, has added to the enormous potential upside of GreenRoc's
business, building on a projected profitable mining operation at Amitsoq in
South Greenland - with one of the highest graphite grades in the world and
with estimated mineral resources open in several directions.
"We are working keenly on progressing the technical work related to both the
Amitsoq graphite ore and the graphite anode material plant. For instance, we
are testing new purification methods which will serve to reduce the need for
hazardous chemicals and potentially also reduce the operating costs at the
plant. Similarly, we are engaged with FLSmidth to test their newly developed
and very promising pressurised flotation cells which could be ideal for the
Amitsoq minei because of their reduced consumption of energy and water.
"I'm also very pleased to see the increased interest for our projects and in
our ambition to set-up a European vertically integrated production of graphite
active anode material - both from governments and also, increasingly, from
potential off-takers. Thanks to our shareholders for your support - we will
continue to work hard to grow and unlock the value of our graphite and anode
material projects."
Amitsoq Graphite Project
Key points about Amitsoq:
· Amitsoq is located in the Nanortalik region of southern
Greenland, in year-round ice-free waters and on the same latitude as far
northern Scotland.
· GreenRoc is focused on fast-tracking the development of Amitsoq
into a producing mine in the shortest possible timeframe to meet critical
demand from Electric Vehicle ('EV') manufacturers in Europe and North America
for new, high grade and conflict-free sources of graphite.
· The Amitsoq Island Deposit has a total inferred, indicated and
measured JORC Resource of 23.05 million tonnes (Mt) at an average grade of
20.41% Graphitic Carbon ("C(g)"), giving a total graphite content of 4.71 Mt.
This makes Amitsoq one of the highest-grade graphite projects in the world.
· Significant further resource upside exists at Amitsoq as the
Amitsoq Island Deposit is open in at least two directions, with potential for
considerable further expansion via the similarly high-grade Kalaaq Mainland
Deposit as well as a series of other high-grade targets within GreenRoc's
licence package.
· The Amitsoq Island Deposit was in small-scale production about
100 years ago, and there remains considerable underground mine development in
place from that time, which will be of considerable benefit to GreenRoc in the
mine construction phase.
· In GreenRoc's test work programmes:
o Micronisation and spheronisation test work has proven that Amitsoq
graphite can be readily upgraded to high-grade, anode-quality graphite, known
as high purity spherical graphite or cSPG, a critical component in the Li-ion
battery of an EV.
o Amitsoq spheronised graphite has achieved higher than 99.95% purity with
relatively little energy input and processing and using a milder alkaline
purification method compared to the industry standard hydrofluoric acid,
boding well for future production costs and sustainability commitments.
o Electrochemical testing of Amitsoq graphite anode material within a test
Li-ion battery cell has shown that it performs very well, in part due to its
good crystallinity.
· The results of a Preliminary Economic Assessment (or PEA) for
Amitsoq released on 31 October 2023 give a post-tax NPV8 for the Project of
US$179M, an IRR of 26.7% and capex estimated at US$131M (including a 25%
contingency). These figures solely relate to the economics of a mining and
primary processing operation in South Greenland and do not take into account
any potential upside from a downstream processing operation which GreenRoc
intends to establish in Europe or the USA.
· In relation to that downstream business, GreenRoc has now
completed a Feasibility Study into the establishment of a graphite
spheronisation processing plant to produce cSPG from graphite concentrate
delivered from Amitsoq. This Feasibility Study has been part-financed by a
grant of approximately £250,000 from the UK's Automotive Transformation Fund
and the results were published in the announcements of 7 May and 10 July 2024
which showed a post-tax NPV8 for the Project of US$621M, an IRR of 26.5% and
capex estimated at US$340M (including a 25% contingency).
· Following a detailed evaluation process, the European Raw
Materials Alliance has expressed its support of GreenRoc and its Amitsoq
graphite project, stating that: "GreenRoc's graphite resource is of global
importance and, together with the Company's strategy, will enable the European
Union to achieve a certain level of independence for the electrical vehicle
supply chain. ERMA has approved the Amitsoq Graphite project and will engage
to support its development and financing to produce these critical raw
materials for the benefit of the European Union goals (see RNS dated 8
February 2023).
· The Company recently received a Letter of Interest from the US
EXIM Bank with an indication to finance up to US$ 3.5M of the Company's work
program on the Amitsoq mine and the downstream cSPG plant (see RNS of 15 April
2024).
Thule Black Sands Ilmenite Project
Test work to determine the ilmenite content of the coarser grain fraction
within drill core samples from Thule Black Sands ("TBS"), GreenRoc's ilmenite
mineral sands project in North Greenland, is near completion and is expected
to be reported this autumn.
Corporate
In April 2024, it was announced that Oberon Capital ("Oberon") had been
appointed as sole broker to the Company.
Successful equity placings were completed in May and June 2024, raising gross
proceeds of approximately £438k. This included the participation by GreenRoc
directors and executives in the placing for a total subscription of
approximately £20,000.
On 28 June 2024 the Company's shareholders approved the Company's change of
name to GreenRoc Strategic Materials Plc. The purpose of the name change was
to more closely align GreenRoc's name with its core business strategy. This
strategy, which has evolved since the Company's IPO and Admission to AIM in
September 2021, is 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.
Financial Results
The Group made a loss attributable to equity holders of the parent for the
period, after taxation, of £399k (May 2023: £417k). The Company was
incorporated in March 2021, but activity only commenced on 28 September 2021,
when the Company acquired Alba Mineral Resources plc's Greenland mining
portfolio in conjunction with GreenRoc's IPO and Admission to AIM. Since then,
corporate overheads, consisting primarily of salaries and professional and
listing costs, have been expensed as incurred, while exploration expenditure
has been capitalised as an intangible asset in line with the Group's
accounting policy.
At the end of the reporting period, the Group's cash was £70k, a net cash
outflow of £82k. This included exploration expenditure of £160k, £12k of
creditor settlements, administration costs of £413k (including £215k of
salaries and other costs associated with the GreenRoc in-house technical and
geological team), and net funding of £75k (being second tranche of the
November 2023 placing which formally cleared in December 2023). In June 2024,
the Company completed equity placings which raised gross proceeds of
approximately £438k. As these placings completed shortly after the end of the
reporting period, the proceeds are not included in the above cash balance for
the end of the reporting period.
The basic and diluted loss per share was 0.24 pence (May 2023: loss of 0.35
pence).
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.
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
Company'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.
For further information, please contact:
GreenRoc Strategic Materials 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
Susie Geliher / Paul Dulieu / Isabelle Morris
About GreenRoc
GreenRoc Strategic Materials plc is an AIM-quoted company which is developing
mining projects in Greenland in critical, high-demand and high-value
minerals.
Led by a group of highly experienced mining industry professionals, GreenRoc's
100% owned projects comprise:
· The Amitsoq Graphite Project in south Greenland, one of the
highest-grade graphite deposits in the world with a combined Measured,
Indicated and Inferred JORC Resource of 23.05 million tonnes (Mt) at an
average grade of 20.41% graphite, giving a total graphite content of 4.71
Mt; and
· The Thule Black Sands Ilmenite Project in north Greenland, which
has an initial Mineral Resource of 19Mt at 43.6% Total Heavy Minerals with an
in-situ ilmenite grade of 8.9%.
UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 31 MAY 2024
Unaudited Unaudited Audited
Six months ended 31 May 2024 Six months ended 31 May 2023 12 months ended 30 Nov 2023
£'000 £'000 £'000
Other income 23 - -
Gross profit 23 - -
Administrative expenses (420) (416) (903)
Impairment - - (787)
Operating loss (397) (416) (1,690)
Finance expense (1) (2) (1)
Foreign Exchange (1) - (2)
Loss for the period before tax (399) (418) (1,693)
Taxation - - -
Loss for the period from continuing operations (399) (418) (1,693)
Loss attributable to equity holders of the parent (399) (418) (1,693)
Other comprehensive income
Items that may be subsequently reclassified to profit or loss:
Exchange loss on translating foreign operations - (2) -
Total comprehensive income attributable to equity (399) (420) (1,693)
Earnings per ordinary share attributable to the ordinary equity holders of the
parent
Basic and diluted (pence) (0.24) (0.35) (1.26)
UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 31 MAY 2024
Unaudited Unaudited Audited Year 30 Nov 2023
31 May 2024 31 May 2023
£'000 £'000 £'000
Non-current assets
Intangible fixed assets 10,000 10,285 9,840
Total non-current assets 10,000 10,285 9,840
Current assets
Trade and other receivables 23 7 436
Cash and cash equivalents 70 210 152
Total current assets 93 217 588
Current liabilities
Trade and other payables (385) (36) (397)
Payable to parent entity - (57) -
Total current liabilities (385) (93) (397)
Net current assets/(liabilities) (292) 124 191
Non-current liabilities
Deferred tax (1,004) (1,004) (1,004)
Total non-current liabilities (1,004) (1,004) (1,004)
Net assets 8,704 9,405 9,027
Capital and reserves
Share capital 218 184 215
Share premium 11,778 10,851 11,706
Share-based payment reserve 281 271 280
Translation reserve - (2) -
Retained earnings (3,573) (1,899) (3,174)
Total equity 8,704 9,405 9,027
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 31 MAY 2024
Share capital Share premium Share-based payment reserve Translation Reserve Retained earnings Total
£'000 £'000 £'000 £'000 £'000 £'000
At 1 December 2022 161 10,033 252 - (1,481) 8,965
Loss for the period - - - - (418) (418)
Translation differences - - - (2) - (2)
Total comprehensive income for the period - - - (2) (418) (420)
Shares issued 23 818 - - - 841
Fair value of share options awarded - - 19 - - 19
At 31 May 2023 184 10,851 271 (2) (1,899) 9,405
At 1 December 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)
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
Loss for the period - - - - (399) (399)
Total comprehensive income for the period - - - - (399) (399)
Shares issued 3 72 - - - 75
Fair value of share options awarded - - 1 - - 1
At 31 May 2024 218 11,778 281 - (3,573) 8,704
UNAUDITED CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 31 MAY 2024
Unaudited Unaudited Audited
Six months ended 31 May 2024 Six months ended 31 May 2023 12 months ended 30 Nov 2023
£'000 £'000 £'000
Cash flows from operating activities
Operating loss (397) (415) (1,690)
Adjustments for:
Share-based payment charge 1 19 24
Impairment - 787
(Decrease)/increase in creditors (12) (221) 141
Decrease/(increase) in debtors 413 6 (423)
Net cash used in operating activities 5 (611) (1,161)
Cash flows from investing activities
Capitalised exploration expenditure (160) (134) (476)
Net cash used in investing activities (160) (134) (476)
Cash flows from financing activities
Proceeds from issue of shares 75 883 1,731
Cost of issue - (42) -
Repayment of loan from parent - (8) (65)
Receipts of borrowings from parent - - -
Finance expense (2) (2) (3)
Net cash generated from financing activities 73 831 1,663
Net increase/(decrease) in cash and cash equivalents (82) 86 26
FX on cash and cash equivalents - (2) -
Cash and cash equivalents at beginning of period 152 126 126
Cash and cash equivalents at end of period 70 210 152
NOTES TO THE HALF-YEARLY FINANCIAL INFORMATION
1. Basis of preparation
The Group consolidates the financial statements of the Company and its
subsidiary undertakings.
The financial information has been prepared under the historical cost
convention in accordance with UK-adopted International Accountant Standards
("UK-adopted IAS") as they apply to the Group for the six months ended 31 May
2024.
2. Taxation
No charge for corporation tax for the period has been made due to the expected
tax losses available.
3. Loss per share
Basic loss per share is calculated by dividing the loss attributable to
ordinary shareholders of £399k (May 2023: 417k; November 2023: £1,693k) by
the weighted average number of shares of 166,610,052 (May 2023: 118,862,168;
November 2023: 134,217,972) in issue during the period. The diluted loss per
share calculation is identical to that used for basic loss per share as the
exercise of warrants would have the effect of reducing the loss per ordinary
share and therefore is not dilutive under the terms of Financial Reporting
Standard 22 "Earnings Per Share".
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