TIDMGRX
RNS Number : 3454O
GreenX Metals Limited
31 January 2023
greenx metals limited
NEWS RELEASE 31 JANUARY 2023
Quarterly Activities Report December 2022
Highlights
-- During the quarter, the hearing for the international
arbitration claims against the Republic of Poland under both the
Energy Charter Treaty and the Australia-Poland Bilateral Investment
Treaty was concluded.
o Combined arbitration hearing took place in front of the
Arbitral Tribunal in London under the UNCITRAL Arbitration Rules
for GreenX's claims against Poland.
o Damages of up to GBP737 million (A$1.3 billion / PLN4.0
billion) have been claimed including the assessed value of GreenX's
lost profits and damages related to both the Jan Karski and
Debiensko projects, and accrued interest related to any
damages.
o The Company has funded the Claim proceedings under its US$12.3
million Litigation Funding Agreement (LFA).
-- In November, the Company announced highly encouraging results
from an initial site visit to ARC.
o Analysis of the site visit results is underway and will be key
to future work programs .
o GreenX can earn up to 80% of the ARC copper project in
Greenland. ARC is a significant, large-scale project (5,774km(2)
license area) with historical exploration results and recent
analysis indicative of an extensive mineral system with potential
to host world-class copper deposits.
-- Cash balance as at 31 December 2022 of A$2.6 million with a
further A$6.1 million available under the LFA.
GreenX Metals Limited (ASX:GRX, LSE:GRX) (GreenX or the Company)
is pleased to present its Quarterly Activities Report for the
period during and subsequent to 31 December 2022.
DISPUTE WITH POLISH GOVERNMENT
During the quarter, the Company reported the conclusion of the
hearing for the international arbitration claims (Claim) against
the Republic of Poland under both the Energy Charter Treaty (ECT)
and the Australia-Poland Bilateral Investment Treaty (BIT)
(together the Treaties). The hearing took place in London in
November 2022 and lasted two weeks.
Following completion of the hearing, the Arbitral Tribunal will
render an Award (i.e., the legal term used for a 'decision' by the
Tribunal) in due course with no specified date available for the
Tribunal decision.
As previously advised, the arbitration and hearing proceedings
in relation to the Claim are required to be kept confidential.
Details of the Claim
The Company's 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. The arbitration claims are being administered through
the Permanent Court of Arbitration in the Hague.
The evidentiary hearing phase of the arbitration proceedings has
now been completed in front of the Arbitral Tribunal. With
completion of the hearing, the Arbitral Tribunal will render an
Award in due course. There is no specified date for an Award to be
rendered. The Company's claims for damages against Poland are in
the amount of up to GBP737 million (A$1.3 billion/PLN4.0 billion),
which includes a revised assessment of the value of GreenX's lost
profits and damages related to both the Jan Karski and Debiensko
projects, and accrued interest related to any damages. The Claim
for damages has been assessed by independent external quantum
experts appointed by GreenX specifically for the purposes of the
Claim.
In July 2020, the Company announced it had executed the
Litigation Funding Agreement (LFA) for US$12.3 million with
Litigation Capital Management (LCM). The facility is currently
being drawn down to cover legal, tribunal and external expert costs
as well as defined operating expenses associated with the Claim.
The LFA is a limited recourse loan with LCM that is on a "no win -
no fee" basis.
In September 2020, GreenX announced that it had formally
commenced with the Claim by serving the Notices of Arbitration
against the Republic of Poland. In June 2021, GreenX announced that
it had formally lodged its Statement of Claim in the BIT
arbitration, including the first assessed claim for compensation.
The Company's Statement of Reply, the last material filing to be
made by the Company for the BIT arbitration proceedings, was
submitted in July 2021. The Statement of Reply addresses various
points raised by the Republic of Poland in their Statement of
Defence. The Statement of Reply also contains a re-evaluation of
the claim for damages based on responses to Poland's Statement of
Defence.
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 projects in Poland which effectively deprived 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.
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 bought against Poland.
HIGHLY ENCOURAGING RESULTS FROM INITIAL ARC SITE VISIT
During the quarter, GreenX and its joint-venture (JV) partner
Greenfields Exploration Ltd (Greenfields) announced the results of
from the first visit to the Arctic Rift Copper Project (ARC or the
Project) in Greenland.
The results of this work program have demonstrated the
high-grade nature of the known copper sulphide mineralisation and
wider copper mineralization in fault hosted Black Earth zones and
adjacent sandstone units. The exact position of a native copper
fissure at the Neergaard Dal prospect was also identified.
Analysis of this new information is underway and will be key to
future work programs.
A logistical base in Greenland was also secured as part of the
site visit. The Company successfully established depots, and field
trialed its SHERP vehicles and advanced satellite communications
systems.
CORPORATE
Financial Position
As at 31 December 2022, GreenX had cash of A$2.6 million with a
further A$6.1 million available to fund Claim related costs under
the LFA.
-S-
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, 22 January 2022 and 28 November 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.
APPIX 1: TENEMENT INFORMATION
As at 31 December 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(3) 100 Granted Mining & Exploration
Poland (includes gas
rights)
------------ ----------------------- ----------- -------------- ---------------------
Notes:
(1) In October 2021, the Company announced that it had entered
into an Earn-In Agreement (EIA) with Greenfields 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 formally commenced international arbitration claims
against the Republic of Poland under both the ECT and the BIT in
2021. 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. Refer to discussion of the Claim above.
(3) The Kaczyce 1 tenement was due to expire on 31 December
2021. The Company applied for an extension to the Kaczyce 1
tenement prior to its expiry and awaits a decision.
Appendix 2: Related Party Payments
During the quarter ended 31 December 2022, the Company made
payments of $166,000 to related parties and their associates. These
payments relate to existing remuneration arrangements (director
fees, consulting fees and superannuation of ($118,000) and the
provision of a serviced office and company secretarial and
administration services ($48,000).
Appendix 3: Exploration and Mining Expenditure
During the quarter ended 31 December 2022, the Company made the
following payments in relation to exploration activities:
Activity $000
--------------------------------------------------- -----
Greenland (ARC)
Project Management 163
Logistics (including transportation of equipment) 241
Site visit related costs 316
Other (field supplies, equipment, fuel, satellite
imagery, etc) 119
--------------------------------------------------- -----
Greenland sub-total as reported in the Appendix
5B (item 2.1(d)) 839
Poland
Legal and permitting related expenditure 52
Consultants - technical and Debiensko statutory
operations personnel 124
Other (VAT returned) (69)
--------------------------------------------------- -----
Poland sub-total as reported in the Appendix
5B (item 1.2(a)) 107
--------------------------------------------------- -----
Total 946
=================================================== =====
There were no mining or production activities and expenses
incurred during the quarter ended 31 December 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 December 2022
----------------------------------
Consolidated statement of cash Current quarter Year to date
flows
$A'000 (6 months)
$A'000
1. Cash flows from operating
activities
1.1 Receipts from customers - -
1.2 Payments for
(a) exploration & evaluation (107)* (471)*
(b) development - -
(c) production - -
(d) staff costs (122) (258)
(e) administration and corporate
costs (85) (204)
1.3 Dividends received (see note - -
3)
1.4 Interest received 15 28
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 (80) (141)
(b) Property rental and gas
sales 73 96
(c) Arbitration related expenses (862) (1,446)
(d) Receipt of arbitration
funding 420 1,187
(e) Occupancy (80) (415)
---------------- -------------
Net cash from / (used in)
1.9 operating activities (828) (1,624)
----------------- ----------------------------------- ---------------- -------------
*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 - -
(c) property, plant and equipment - -
(d) exploration & evaluation (839) (1,908)
(e) investments - -
(f) other non-current assets - -
2.2 Proceeds from the disposal
of:
(a) entities - -
(b) tenements - -
(c) property, plant and equipment - -
(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 (839) (1,908)
----------------- ----------------------------------- ---------------- -------------
3. Cash flows from financing
activities
3.1 Proceeds from issues of equity
securities (excluding convertible
debt securities) - -
3.2 Proceeds from issue of convertible
debt securities - -
3.3 Proceeds from exercise of - -
options
3.4 Transaction costs related
to issues of equity securities
or convertible debt securities - -
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)
---------------- -------------
3.10 Net cash from / (used in)
financing activities - -
----------------- ----------------------------------- ---------------- -------------
4. Net increase / (decrease)
in cash and cash equivalents
for the period
Cash and cash equivalents
4.1 at beginning of period 4,243 6,108
Net cash from / (used in)
operating activities (item
4.2 1.9 above) (828) (1,624)
Net cash from / (used in)
investing activities (item
4.3 2.6 above) (839) (1,908)
4.4 Net cash from / (used in)
financing activities (item
3.10 above) - -
4.5 Effect of movement in exchange
rates on cash held - -
---------------- -------------
Cash and cash equivalents
4.6 at end of period 2,576 2,576
----------------- ----------------------------------- ---------------- -------------
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 2,576 4,243
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) 2,576 4,243
----------------- ----------------------------------- ---------------- -----------------
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 (166)
----------------
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 18,036* 11,935
------------------- ----------------
7.2 Credit standby arrangements - -
------------------- ----------------
7.3 Other (please specify) - -
------------------- ----------------
7.4 Total financing facilities 18,036* 11,935
------------------- ----------------
Unused financing facilities available at
7.5 quarter end 6,101
----------------
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$18.0
million with the movement of the A$ 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$18.0
million), denominated in US$, 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) (828)
8.2 (Payments for exploration & evaluation classified
as investing activities) (item 2.1(d)) (839)
8.3 Total relevant outgoings (item 8.1 + item (1,667)
8.2)
8.4 Cash and cash equivalents at quarter end 2,576
(item 4.6)
8.5 Unused finance facilities available at quarter 6,101
end (item 7.5)
--------
8.6 Total available funding (item 8.4 + item 8,677
8.5)
--------
8.7 Estimated quarters of funding available
(item 8.6 divided by item 8.3) >5
--------
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: 31 January 2023
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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