TIDMGRX
RNS Number : 7925J
GreenX Metals Limited
29 April 2022
GREENX METALS LIMITED
NEWS RELEASE | 29 April 2022
Quarterly Activities Report March 2022
HIGHLIGHTS
-- New copper targets identified at Arctic Rift Copper Project
in Greenland (ARC or Project) from ongoing geological analysis.
o Latest analysis identifies new "walk-up" native copper and
copper sulphide targets for upcoming field program.
o New priority, walk-up, at-surface target identified along the
Knuth Fault which is a Discovery Zone "lookalike" feature.
o Two additional exposures of native copper mineralisation
identified from recently unearthed historical documentation at
Neergaard Dal.
-- Company is preparing for its maiden exploration program on
the ground at ARC which will commence in the June quarter.
-- Completion of Entitlements Issue to fund new and current
activities announced concurrently with ARC earn-in. Following
interest from investors in the UK and Europe, GreenX raised gross
proceeds of A$4.5 million.
-- International arbitration claims against the Republic of
Poland under both the Energy Charter Treaty and the
Australia-Poland Bilateral Investment Treaty continue at pace.
-- Cash balance at 31 March 2022 of A$5.7 million to fund
activities at ARC plus A$9.4 million available to continue pursuing
GreenX's dispute against the Republic of Poland.
GreenX Metals Limited (ASX:GRX, LSE:GRX) (GreenX or Company) is
is pleased to present its Quarterly Activities Report for the
period during and subsequent to 31 March 2022.
ARC PROJECT SUMMARY
In October 2021 , GreenX entered into an Earn-in Agreement (EIA)
with Greenfields Exploration Limited (GEX) to acquire an interest
of up to 80% in ARC.
ARC is an exploration joint venture between GreenX and GEX.
GreenX can earn 80% of ARC by spending A$10 million by October
2026. ARC is targeting large scale copper in multiple settings
across a 5,774 km(2) Special Exploration Licence in eastern North
Greenland. The area has been historically underexplored yet is
prospective for copper, forming part of the newly identified
Kiffaanngissuseq metallogenic province.
GreenX and GEX consider the observed geological setting and
features of ARC to be indicative of an extensive mineral system
capable of hosting world-class copper deposits.
The large scale of the mineral system, widespread copper
anomalism, combined with dual mineralising events are analogous to
the largest copper systems known worldwide. Accordingly, GreenX
considers that ARC has the potential to be a globally significant
metallogenic province.
Structural Geology Review
In January 2022, GreenX announced that new copper targets had
been identified at ARC following ongoing geological analysis.
Latest analysis identifies new "walk-up" native copper and copper
sulphide targets for the upcoming field program. A new priority,
walk-up, at-surface target was identified along the Knuth Fault
which is a Discovery Zone "lookalike" feature. Further, two
additional exposures of native copper mineralisation were
identified from recently unearthed historical documentation at
Neergaard Dal.
A structural review of the currently available datasets of ARC's
geology was conducted by specialist consultant Dr Mark Munro(1) and
confirmed that the known copper mineralisation including the native
copper and Discovery Zone copper sulphides, is associated with
reverse faults. Reverse faults are considered to be an important
structural control on mineralisation at ARC, with the recent study
both extending the known reverse faults with associated
mineralisation and identifying new reverse faults.
The review reinforces evidence of a large-scale mineral system
and regional fertility related to identified faults and therefore
exploration targeting, and efficiency of upcoming field programs
can be greatly improved through enhanced geological understanding
of ARC.
ARC MAIDEN EXPLORATION PROGRAM
In the June quarter, the Company will commence its maiden
exploration programme at ARC. GEX are currently preparing to travel
to Greenland to initially complete:
-- Widespread geochemical sampling.
-- Sampling and analysis of the already identified walk-up targets, including the Discovery Zone
-- Passive seismic over the Minik Anomaly and 3D induced polarisation (IP) surveys.
-- High-resolution satellite mapping and the re-analysis of
historical samples and magnetic data to create an ARC 3D model.
CORPORATE
Entitlements Issue & Shortfall Offer
Following significant interest from potential new investors in
the UK and Europe, the Company completed the Entitlements issue to
raise total gross proceeds of A$4.5m.
Financial Position
As at 31 March 2022, GreenX had A$5.7 million cash available
plus A$9.4 million available to pursue its dispute against the
Republic of Poland.
DISPUTE WITH POLISH GOVERNMENT
The Company's international arbitration claims (Claim) against
the Republic of Poland is being prosecuted through an established
and enforceable legal framework, with GreenX and Poland agreeing to
apply the United Nations Commission on International Trade Law
Rules (UNCITRAL) rules to the proceedings.
Both the Australia-Poland Bilateral Investment Treaty (BIT) and
Energy Charter Treaty (ECT) claim Tribunals have been constituted,
with both Claim's being registered with the Permanent Court of
Arbitration in the Hague. The BIT and ECT claim proceedings proceed
at pace, with the Company now having filed a Claim for compensation
against Poland with the Tribunal in the amount of GBP806 million
(A$1.5 billion / PLN 4.2 billion), which includes an assessment of
the value of GreenX's lost profits and damages related to both the
Jan Karski mine and Debiensko mines, and accrued interest related
to any damages. The Claim for damages has been assessed by external
quantum experts appointed by GreenX specifically for the purposes
of the Claim.
In July 2020, the Company announced it had executed a Litigation
Funding Agreement for US$12.3 million with Litigation Capital
Management. The facility is currently being drawn down to cover
legal, tribunal and external expert costs and defined operating
expenses associated with the Claim.
In September 2020, GreenX announced that it had formally
commenced with the Claim by serving the Notices of Arbitration
against the Republic of Poland.
GreenX's dispute alleges that the Republic of Poland has
breached its obligations under the applicable Treaties through its
actions to block the development of the Company's Jan Karski and
Debiensko mines in Poland which effectively deprives GreenX of the
entire value of its investments in Poland.
In February 2019, GreenX formally notified the Polish Government
that there exists an investment dispute between GreenX and the
Polish Government. GreenX's notification called for prompt
negotiations with the Government to amicably resolve the dispute
and indicated GreenX's right to submit the dispute to international
arbitration in the event of the dispute not being resolved
amicably. The Company remains open to resolving the dispute with
the Polish Government amicably. However, as of the date of this
report, no amicable resolution of the dispute has occurred, since
the Polish Government has declined to participate in discussions
related to the dispute and accordingly the Company has formerly
submitted its Claim as discussed above.
GreenX's investment dispute with the Republic of Poland is not
unique, with international media widely reporting that the
political environment and investment climate in Poland has
deteriorated since the change in Government in 2015. As a result,
there are a significant number of International Arbitration claims
being brought against Poland in the natural resources and energy
sectors with damages claims ranging from US$120 million to over
US$1.3 billion and includes Bluegas NRG Holding (Gas), Lumina
Copper (Copper) and InvEnergy (wind farms).
Forward Looking Statements
This release may include forward-looking statements. These
forward-looking statements are based on GreenX's expectations and
beliefs concerning future events. Forward looking statements are
necessarily subject to risks, uncertainties and other factors, many
of which are outside the control of GreenX, which could cause
actual results to differ materially from such statements. GreenX
makes no undertaking to subsequently update or revise the
forward-looking statements made in this release, to reflect the
circumstances or events after the date of that release.
Competent Persons Statement
The information in this announcement that relates to Exploration
Results for ARC is extracted from the ASX announcements dated 6
October 2021 and 22 January 2022. Which are available to view at
www.greenxmetals.com.
GreenX confirms that (a) it is not aware of any new information
or data that materially affects the information included in the
original announcements; (b) all material assumptions and technical
parameters underpinning the content in the relevant announcements
continue to apply and have not materially changed; and (c) the form
and context in which the Competent Person's findings are presented
have not been materially modified from the original
announcements.
This announcement has been authorised for release by the
Company's Chief Executive Officer, Mr Ben Stoikovich.
To view this announcement in full including all figures, please
refer to www.greenxmetals.com .
(1) Munro, Mark (2021). "Structural Review of the Arctic Rift
Copper Project, Greenland", Munro Geoscience Pty Ltd
APPIX 1: TENEMENT INFORMATION
As at 31 March 2022, the Company has an interest in the
following tenements:
Location Tenement Percentage Status Tenement Type
Interest
------------ ----------------------- ----------- -------------- ---------------------
Greenland Arctic Rift Copper -(1) Granted Exploration Licence
Project (Licence
No. 2021-07 MEL-S)
Jan Karski, Jan Karski Mine 100 In dispute(2) Exclusive Right
Poland Plan Area (K-4-5, to apply for
K6-7, K-8 and K-9)(2) a mining concession
Debiensko, Mining
Poland Debiensko 1 100 Granted(2)
Debiensko, Kaczyce 1 100 Granted Mining & Exploration
Poland (includes gas
rights)
------------ ----------------------- ----------- -------------- ---------------------
Notes:
(1) In October 2021, the Company announced that it had entered
into the EIA with GEX to acquire an interest of up to 80% in ARC.
As at the date of this announcement, the Company held no beneficial
interest in ARC, other than through the EIA.
(2) GreenX commenced international arbitration claims against
the Republic of Poland under both the ECT and the BIT. GreenX
alleges that the Republic of Poland has breached its obligations
under the Treaties through its actions to block the development of
the Company's Jan Karski and Debiensko mines in Poland.
Appendix 2: Related Party Payments
During the quarter ended 31 March 2022, the Company made
payments of $212,000 to related parties and their associates. These
payments relate to existing remuneration arrangements (director
fees, consulting fees and superannuation of ($132,000) and the
provision of a serviced office and company secretarial and
administration services ($80,000).
Appendix 3: Exploration and Mining Expenditure
During the quarter ended 31 March 2022, the Company made the
following payments in relation to exploration activities:
Activity $000
------------------------------------------------- -----
Greenland (ARC)
Project Management 163
Geochem and imagery 8
Other (field supplies, travel, fuel, satellite
imagery, etc) 248
------------------------------------------------- -----
Greenland sub-total as reported in the Appendix
5B (item 2.1(d)) 419
Poland
Legal and permitting related expenditure 91
Consultants - technical and Debiensko statutory
operations personnel 87
Other 79
------------------------------------------------- -----
Poland sub-total as reported in the Appendix
5B (item 1.2(a)) 257
------------------------------------------------- -----
Total 676
================================================= =====
There were no mining or production activities and expenses
incurred during the quarter ended 31 March 2022.
Appendix 5B
Mining exploration entity or oil and gas exploration entity
quarterly cash flow report
Name of entity
-----------------------------------------------------
GreenX Metals Limited
ABN Quarter ended ("current quarter")
--------------- ----------------------------------
23 008 677 852 31 March 2022
----------------------------------
Consolidated statement of cash Current quarter Year to date
flows
$A'000 (9 months)
$A'000
1. Cash flows from operating
activities
1.1 Receipts from customers - -
1.2 Payments for
(a) exploration & evaluation (257)* (781)*
(b) development - -
(c) production - -
(d) staff costs (175) (516)
(e) administration and corporate
costs (449) (1,052)
1.3 Dividends received (see note - -
3)
1.4 Interest received 5 14
1.5 Interest and other costs of - -
finance paid
1.6 Income taxes paid - -
1.7 Government grants and tax - -
incentives
Other (provide details if
1.8 material)
(a) Business Development (17) (125)
(b) Property rental and gas
sales 77 169
(c) Arbitration related expenses (501) (1,242)
(d) Receipt of arbitration
funding 240 1,178
---------------- -------------
Net cash from / (used in)
1.9 operating activities (1,077) (2,355)
----------------- ----------------------------------- ---------------- -------------
*includes legal and permitting expenditure and payments made
to consultants (Debiensko technical statutory operations personnel).
---------------------------------------------------------------------------------------
2. Cash flows from investing
activities
2.1 Payments to acquire or for:
(a) Entities - -
(b) Tenements - (30)
(c) property, plant and equipment (296) (543)
(d) exploration & evaluation (419) (805)
(e) investments - -
(f) other non-current assets - -
2.2 Proceeds from the disposal
of:
(a) entities - -
(b) tenements - -
(c) property, plant and equipment 18 278
(d) investments - -
(e) other non-current assets - -
2.3 Cash flows from loans to other - -
entities
2.4 Dividends received (see note - -
3)
2.5 Other (provide details if
material) - -
---------------- -------------
Net cash from / (used in)
2.6 investing activities (697) (1,100)
----------------- ----------------------------------- ---------------- -------------
3. Cash flows from financing
activities
Proceeds from issues of equity
securities (excluding convertible
3.1 debt securities) 3,552 4,453
3.2 Proceeds from issue of convertible
debt securities - -
3.3 Proceeds from exercise of - -
options
Transaction costs related
to issues of equity securities
3.4 or convertible debt securities (99) (122)
3.5 Proceeds from borrowings - -
3.6 Repayment of borrowings - -
3.7 Transaction costs related
to loans and borrowings - -
3.8 Dividends paid - -
3.9 Other (provide details if - -
material)
---------------- -------------
Net cash from / (used in)
3.10 financing activities 3,453 4,331
----------------- ----------------------------------- ---------------- -------------
4. Net increase / (decrease)
in cash and cash equivalents
for the period
Cash and cash equivalents
4.1 at beginning of period 3,960 4,762
Net cash from / (used in)
operating activities (item
4.2 1.9 above) (1,077) (2,355)
Net cash from / (used in)
investing activities (item
4.3 2.6 above) (697) (1,100)
Net cash from / (used in)
financing activities (item
4.4 3.10 above) 3,453 4,331
Effect of movement in exchange
4.5 rates on cash held 35 36
---------------- -------------
Cash and cash equivalents
4.6 at end of period 5,674 5,674
----------------- ----------------------------------- ---------------- -------------
5. Reconciliation of cash and Current quarter Previous quarter
cash equivalents $A'000 $A'000
at the end of the quarter
(as shown in the consolidated
statement of cash flows) to
the related items in the accounts
5.1 Bank balances 5,674 3,960
5.2 Call deposits - -
5.3 Bank overdrafts - -
5.4 Other (provide details) - -
---------------- -----------------
Cash and cash equivalents
at end of quarter (should
5.5 equal item 4.6 above) 5,674 3,960
----------------- ----------------------------------- ---------------- -----------------
6. Payments to related parties of the entity Current quarter
and their associates $A'000
Aggregate amount of payments to related
parties and their associates included in
6.1 item 1 (212)
----------------
6.2 Aggregate amount of payments to related
parties and their associates included in
item 2 -
----------------
Note: if any amounts are shown in items 6.1 or 6.2, your quarterly
activity report must include a description of, and an explanation
for, such payments.
7. Financing facilities Total facility
Note: the term "facility' amount at quarter Amount drawn
includes all forms of financing end at quarter end
arrangements available to $A'000 $A'000
the entity. Add notes as necessary
for an understanding of the
sources of finance available
to the entity.
7.1 Loan facilities 16,400* 7,020
------------------- ----------------
7.2 Credit standby arrangements - -
------------------- ----------------
7.3 Other (please specify) - -
------------------- ----------------
7.4 Total financing facilities 16,400* 7,020
------------------- ----------------
Unused financing facilities available at
7.5 quarter end 9,380
----------------
7.6 Include in the box below a description of each facility
above, including the lender, interest rate, maturity date
and whether it is secured or unsecured. If any additional
financing facilities have been entered into or are proposed
to be entered into after quarter end, include a note providing
details of those facilities as well.
----------------- ---------------------------------------------------------------------------
On 30 June 2020, the Company executed a Litigation Funding
Agreement (LFA) for US$12.3 million (*now worth A$16.4
million with the movement of the A$ compared to the $US)
with LCM Funding UK Limited a subsidiary of Litigation
Capital Management Limited (LCM), to pursue damages claims
in relation to the investment dispute between GreenX and
the Polish Government that has arisen out of certain measures
taken by Poland in breach of the Energy Charter Treaty
and the Australia - Poland Bilateral Investment Treaty
(BIT). LCM will provide up to US$12.3million (A$16.4
million), denominated in US$, in limited recourse financing
which is repayable to LCM in the event of a successful
Claim or settlement of the Dispute that results in the
recovery of any monies. If there is no settlement or award,
then LCM is not entitled to any repayment of the financing
facility. In return for providing the financing facility,
LCM shall be entitled to receive repayment of any funds
drawn plus an amount equal to between two and five times
the total of any funds drawn from the funding facility
during the first five years, depending on the time frame
over which funds have remained drawn, and then a 30% interest
rate after the fifth year until receipt of damages payments.
-----------------
8. Estimated cash available for future operating $A'000
activities
Net cash from / (used in) operating activities
8.1 (item 1.9) (1,077)
8.2 (Payments for exploration & evaluation classified
as investing activities) (item 2.1(d)) (419)
8.3 Total relevant outgoings (item 8.1 + item (1,496)
8.2)
8.4 Cash and cash equivalents at quarter end 5,674
(item 4.6)
8.5 Unused finance facilities available at quarter 9,380
end (item 7.5)
--------
8.6 Total available funding (item 8.4 + item 15,054
8.5)
--------
8.7 Estimated quarters of funding available
(item 8.6 divided by item 8.3) >10
--------
Note: if the entity has reported positive relevant outgoings
(ie a net cash inflow) in item 8.3, answer item 8.7 as
"N/A". Otherwise, a figure for the estimated quarters
of funding available must be included in item 8.7.
8.8 If item 8.7 is less than 2 quarters, please provide answers
to the following questions:
8.8.1 Does the entity expect that it will continue to
have the current level of net operating cash flows for
the time being and, if not, why not?
---------------------------------------------------------------------------------------
Answer: Not applicable
---------------------------------------------------------------------------------------
8.8.2 Has the entity taken any steps, or does it propose
to take any steps, to raise further cash to fund its operations
and, if so, what are those steps and how likely does it
believe that they will be successful?
---------------------------------------------------------------------------------------
Answer: Not applicable
---------------------------------------------------------------------------------------
8.8.3 Does the entity expect to be able to continue its
operations and to meet its business objectives and, if
so, on what basis?
---------------------------------------------------------------------------------------
Answer: Not applicable
---------------------------------------------------------------------------------------
Note: where item 8.7 is less than 2 quarters, all of questions
8.8.1, 8.8.2 and 8.8.3 above must be answered.
---------------------------------------------------------------------------------------
Compliance statement
1 This statement has been prepared in accordance with accounting
standards and policies which comply with Listing Rule 19.11A.
2 This statement gives a true and fair view of the matters disclosed.
Date: 29 April 2022
Authorised by: Company Secretary
(Name of body or officer authorising release - see note 4)
Notes
1. This quarterly cash flow report and the accompanying activity
report provide a basis for informing the market about the entity's
activities for the past quarter, how they have been financed and
the effect this has had on its cash position. An entity that wishes
to disclose additional information over and above the minimum
required under the Listing Rules is encouraged to do so.
2. If this quarterly cash flow report has been prepared in
accordance with Australian Accounting Standards, the definitions
in, and provisions of, AASB 6: Exploration for and Evaluation of
Mineral Resources and AASB 107: Statement of Cash Flows apply to
this report. If this quarterly cash flow report has been prepared
in accordance with other accounting standards agreed by ASX
pursuant to Listing Rule 19.11A, the corresponding equivalent
standards apply to this report.
3. Dividends received may be classified either as cash flows
from operating activities or cash flows from investing activities,
depending on the accounting policy of the entity.
4. If this report has been authorised for release to the market
by your board of directors, you can insert here: "By the board". If
it has been authorised for release to the market by a committee of
your board of directors, you can insert here: "By the [name of
board committee - eg Audit and Risk Committee]". If it has been
authorised for release to the market by a disclosure committee, you
can insert here: "By the Disclosure Committee".
5. If this report has been authorised for release to the market
by your board of directors and you wish to hold yourself out as
complying with recommendation 4.2 of the ASX Corporate Governance
Council's Corporate Governance Principles and Recommendations, the
board should have received a declaration from its CEO and CFO that,
in their opinion, the financial records of the entity have been
properly maintained, that this report complies with the appropriate
accounting standards and gives a true and fair view of the cash
flows of the entity, and that their opinion has been formed on the
basis of a sound system of risk management and internal control
which is operating effectively.
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