TIDMABM
RNS Number : 7720H
African Battery Metals PLC
15 March 2018
15 March 2018
African Battery Metals plc
("ABM" or "the Company")
Audited Results for the Year Ended 30 September 2017
African Battery Metals plc, the AIM quoted African focused
exploration company, is pleased to announce its consolidated
audited results for the year ended 30 September 2017 for the
Company and its subsidiary, Blue Horizon (SL) Ltd, (together the
"Group").
Highlights from the year under review:
Operational
-- New Board appointments with Roger Murphy and Iain Macpherson
joining as Chief Executive Officer and Non-Executive Director,
respectively;
-- Renewal of the Company's 153km(2) Ferensola exploration
licence from Sierra Leone Government for a period of three years
with right to extend for a further two years ("SL Licence");
-- Completed second drill programme of 3,783m on the gold
project at Ferensola (the "Ferensola Gold Project") with some high
grade intersections generated at Sanama Hill and a new discovery
zone in the Southern Target;
-- Completed a third drill programme of 5,185m on the Ferensola
Gold Project with further high grade gold intersections generated
at both Sanama Hill and the Southern Target;
-- Structural geological interpretation of the Ferensola Gold
Project carried out by Tect Geological Consulting which identified
19 targets, including Sanama Hill and Southern Target; and
-- Conducted soil sampling programme on eight of the 19 targets,
returning anomalous levels of gold in most targets, providing
additional evidence that Ferensola hosts further gold sources.
Financial
-- Loss for the year to 30 September 2017 of GBP3.9 million (2016: GBP1.8 million);
-- Total equity of GBP5.4 million at year end (2016: GBP5.6 million); and
-- Raised, gross of issue costs, GBP3.9 million in new equity
financing, including GBP0.4 million via an equity swap facility,
from a combination of new and existing shareholders, including the
Directors, the net proceeds of which were used exclusively to
further the exploration activities and drill programmes on the
Ferensola Gold Project.
Post-year end:
-- Raised GBP1.75 million in new equity to acquire cobalt
assets, progress the Ferensola Gold Project and repay equity swap
facilities;
-- Adopted a lower-cost and slimmed down Board of Directors
following the resignations of Howard Baker (Non-executive Technical
Director) and Nick Warrell (Chief Operating Officer);
-- Company's exploration activities strengthened through the
exercise of an option over 70% of an exploration licence
prospective for cobalt-copper ("Kisinka") in the Democratic
Republic of the Congo ("DRC") and securing an option over a second
cobalt-copper licence in the DRC;
-- Incorporation of ABM Kobald SAS, the Company's 70% owned
subsidiary in the DRC, which holds the Kisinka licence, and through
which the Company commenced cobalt exploration activities in
January 2018; and
-- Company's name changed to African Battery Metals plc to
reflect its immediate focus of exploration activities on battery
metals, with a farm out or JV of Ferensola being pursued.
Roger Murphy, CEO of ABM said:
"2017 was a year of significant change for ABM, culminating in
the recent change in its name to African Battery Metals Plc. In
2018, we expect to significantly advance our exploration activities
in battery metals, especially cobalt. Cobalt is integral to the
make up of the batteries and the strong global drive to move away
from internal combustion engines and to replace these with electric
vehicles powered by batteries is underway and will not be
derailed.
Whilst our own exploration activities will be largely focussed
on battery metals, we remain committed to our assets in Sierra
Leone, in particular the significant gold potential and the proven
iron reserve within the Ferensola licence. We are optimistic about
the Group's future."
For further information please visit www.abmplc.com or contact
the following:
African Battery Metals plc
Roger Murphy (CEO) +44 (0) 20 7583 8304
WH Ireland Limited (Nominated Adviser and Broker)
Tim Feather / James Sinclair-Ford +44 (0) 20 7220 1666
SP Angel Corporate Finance (Broker)
Ewan Leggat +44 (0) 20 3470 0470
Blytheweigh (Public Relations)
Camilla Horsfall/ Nick Elwes +44 (0) 20 7138 3224
Madini (Financial and Technical Adviser)
Iain Macpherson / Ilja Graulich +27 (0) 11 469 0629
Chief Executive Officer's Statement
As at 30 September 2017, African Battery Metals plc (the
"Company") had one wholly owned subsidiary in Sierra Leone, which
holds the SL Licence, Blue Horizon (SL) Ltd ("Blue Horizon"). As at
the date of this report, the Company had two subsidiaries, Blue
Horizon and ABM Kobald SAS, the 70% owned subsidiary in the DRC
which holds the Kisinka licence ("ABM Kobald"), (together "ABM" or
the "Group").
Introduction
It gives me pleasure to write my second annual review as the CEO
of African Battery Metals, the Company's newly adopted name. As the
highlights above illustrate, FY2017 and the post year-end period,
was again a period of very significant change for the Group, and a
challenging period for everyone associated with the Group. I am
confident that we have met the challenges and emerged a stronger
Group as a result. I am optimistic about the future of our
Company.
As stated in last year's report, our activities at the start of
the year were focussed on the Group's most prospective commodity,
gold, found in our Ferensola Gold Project ("FGP") in Sierra Leone.
To that end, we completed 8,968m of diamond drilling split into two
drill campaigns between early March 2017 and late July 2017, before
the onset of the heavy rains, when drilling can be efficiently and
safely conducted. We followed this up with an extensive period of
review, analysis and planning during the rainy season when field
work is difficult and potentially unsafe.
Pleasingly, as detailed in the section on gold below, we
intersected some very high grade gold on Sanama Hill and also hit
gold in another new area, known as the Southern Target (TZ4). The
Eastern Target, in which we drilled six holes along a 4km long
Induced Polarisation ("IP") anomaly, failed to return significant
gold grades, although drilling did confirm the presence of the
large anomaly that remains a target for future programmes. Surface
sampling on the Eastern Target returned gold grades, but
pinpointing the gold bearing zones within the anomaly remained
elusive.
We noted in last year's report that the gold mineralisation
within the FGP was not controlled by one single, steeply-dipping,
sub planar zone, but rather by multiple, potentially stacked
shears. The drilling during the year under review confirmed that
the controls on mineralisation are structurally complex, indeed
more complex than we had previously anticipated. This point is
further developed in the gold section below.
The story of the year can also be seen in our share price. The
first half of FY2017 witnessed some strong price appreciation on
the back of the restructured management team and encouraging early
drill results, but as we announced further results later in the
year, which revealed the complexities of
the gold mineralisation on FGP, our share price appreciation
reversed and with that the ability to fund the Company became more
challenging. This situation intensified through the second half of
the year.
The structural complexity of the geology on FGP, coupled with
increasingly challenging capital markets, led to the Board's
decision to diversify the Group through the injection of additional
assets. This resulted, post year end, in the acquisition of a 70%
interest in a cobalt opportunity in the DRC and securing an option
to acquire a second licence in order to broaden the focus of the
Group into battery metals. We are grateful to our technical
advisers, Madini Minerals, for introducing us to this opportunity
and for their experience of operating in the DRC.
We also saw significant changes in your Board post-year end,
with both Howard Baker, Non-executive Technical Director, and Nick
Warrell, COO, leaving the Company. We thank them both for all their
considerable efforts and wish them well for the future.
Operations Review
Projects
Ferensola Gold Project
The bulk of our exploration activities during the year under
review were focussed on the FGP and consisted of two diamond drill
programmes totalling 8,968m. These were completed at the end of
July 2017 during the dry season ensuring efficient and safe
drilling before a planned period of review and analysis during West
Africa's rainy season which makes field work very difficult and
inefficient. The drilling we completed was all oriented core
diamond drilling. It is acknowledged that there is an intimate
control between gold mineralisation and geological structure
(folding, faulting and shearing) in Greenstone rocks like those
found at Ferensola. Consequently, in order to predict
mineralisation, it is essential to understand structure and
oriented core and detailed structural logging helps to provide that
understanding.
Most pleasingly, the 9km of drilling delivered some extremely
positive assay results, with the best drill result from borehole
FDD0014 on Sanama Hill intersecting 15.9g/t over 3.1m true width
within a wider mineralised envelope of 3.65g/t over 21m true width.
We also made several other high grade gold intersections, albeit of
lower thickness at Sanama Hill. Targeting gold within Greenstone
mineralisation is complex, requiring high drilling intensity. It is
testament to the skill of our technical teams, both in Sierra Leone
and elsewhere, that our success rate runs at well in excess of
50%.
Also on the positive side, we drilled into a new target area
within the FGP, TZ4 (the Southern Target), with our first hole
encountering 5.2g/t over 1.22m true width. A subsequent hole hit
very high grade gold at 19.3g/t over 1.2m true width which
confirmed our expectations and established that Ferensola hosts a
complex gold bearing structure with multiple targets over a large
area.
Unfortunately, however, the six holes drilled on another target
within the FGP, the large IP anomaly TZ2, known as the Eastern
Target, did not encounter significant gold mineralisation in spite
of the fact that surface sampling confirmed the presence of gold.
This was particularly frustrating as we had expected that the IP
would provide a reliable means of rapidly increasing the gold
inventory for future gold exploration throughout the FGP. Drilling
on the Eastern Target did confirm the presence of the anomaly
identified by geophysical means, but honing in on the contained
gold rich zones remains challenging.
Another disappointment was that step out drilling on Sanama Hill
has so far failed to pinpoint the continuation of the high grade
gold intersected at FDD0014 referenced above. This led us to
conclude that the controls on mineralisation are more structurally
complex than we had first hoped.
Nevertheless, as noted in previous commentary, there is abundant
evidence of gold mineralisation across the FGP as confirmed by our
relatively limited drilling to date, supported by surface sampling
and the active presence of local artisanal miners panning for gold
in most of the rivers that cross the licence.
The structural geology interpretation we commissioned from Tect
Geological Consulting ("TGC") towards the end of the year under
review corroborates this. TGC's report identified 19 gold targets,
including Sanama Hill and Southern Target. Interestingly, the
Eastern Target, which the IP had identified as a gold target, did
not feature in the TGC report. We subsequently conducted a soil
sampling programme on eight of the commissioned structural geology
interpretation from TGC's report which returned anomalous levels of
gold in most targets, providing encouragement that FGP hosts
further gold sources.
Although we have identified some very high grade bore hole
intersections and discovered a new gold bearing area in TZ4, we
have so far been unable to establish detailed continuity between
the intersections. Accordingly, we have concluded that the
structural controls are more complex than we initially understood.
This appreciation of the structural complexity and the need for
more detailed work has led us to conclude that the best way to add
further value to the FGP is through a farm out or joint venture
with a partner who has, not only the requisite geological skills to
supplement our own capability, but also has access to capital to
undertake the necessary intensive drilling programmes clearly
required to build gold inventory.
Whilst we pursue this JV or farm out deal, we intend to maintain
a work programme on the SL Licence to increase our understanding.
As I write this report, we are initiating a new programme of soil
sampling and mapping, in conjunction with deeper investigation of
artisanal activities, to focus on the regional picture, with the
objective of further developing our understanding of the gold
controls to enable us to generate further gold targets and enhance
future exploration.
Iron
Whilst no work was conducted on our iron ore resource during the
financial year under review, we remain very aware of the potential
value of our JORC compliant Mineral Resource Estimate ("MRE") of
total oxide resource of 55.5Mt @ 45.39% with a total resource of
514.5Mt @ 31.8% that we declared on the SL Licence. We also note
that iron ore prices have strengthened over the financial year -
rising from around $55/tonne at the beginning of the period to
upwards of $75/tonne as at the date of this report. Iron ore is a
bulk commodity and our location would necessitate access to rail to
reach port. Shandong Iron & Steel Group, the Chinese mining
group, are mining Tonkolili which is contiguous with our iron ore
resource. Furthermore Tonkolili is well served by infrastructure as
the railway goes from Tonkolili to the port. Should the iron ore
price continue to rise, the Board will consider commencing
discussions with potential joint venture partners to unlock this
potential value for the benefit of all the Company's
shareholders.
Cobalt
As outlined in the report above, the Board recognised the
challenges presented by the Company's historical exclusive focus on
the FGP and resolved to target alternative commodities in other
jurisdictions leveraging the Company's capability and
experience.
We were delighted to announce in December 2017 that the Company
had acquired 70% of the Kisinka licence in the Katanga Province of
the Democratic Republic of the Congo (DRC) for the payment of
$50,000 with a second tranche of $50,000 to be paid in May 2018.
ABM has also acquired the option to acquire 70% of a second licence
in the DRC, Sakania, on the same payment terms. We originally had
until the end of January 2018 to exercise the Sakania option and
pay the first tranche, but this deadline has since been extended to
30 April 2018.
Kisinka is a 55km(2) licence on the Roan, the type of rocks
which host most of the DRC's copper and cobalt mineralisation. It
is within 30km of the large regional city, Lubumbashi, and has at
least seven large producing copper-cobalt mines within 25km as well
as a larger number of smaller artisanal mines close by.
Sakania is a 150km(2) licence in south east of the DRC, an area
that is seeing a lot of new artisanal mining activity for cobalt
and copper. We initiated an exploration programme on Kisinka in
late January 2018.
Coltan
No work was performed on coltan in the year under review.
Corporate Social Responsibility ("CSR")
The Company maintains a prominent CSR programme in the region
and we continued to provide funding and resources for projects in
Sierra Leone, in particular in the Diang, Samia Bendugu and Nieni
Chiefdoms.
Financial Review
The Group recorded an audited loss before tax for the year to 30
September 2017 of GBP3.9 million (2016: GBP1.8 million). The loss
per share was 0.13p (2016: 0.24p).
The Group's exploration activities during the financial year
under review were funded through the issue of shares to either
raise cash or in lieu of fees. In aggregate, 2,216,087,141 new
ordinary shares were issued during the financial year, raising a
total of approximately GBP4.3 million of cash or cash equivalent
before placement costs (2016: GBP1.0 million).
As announced on 21 August 2017, requiring funds to complete the
drill programme on the FGP, the Company entered into an equity swap
agreement with Riverfort Global Capital Limited, which was
subsequently repaid and terminated as part of the GBP1.75 million
equity fund raise as announced in December 2017.
We ended the financial year with a cash balance of GBP0.1
million (2016: GBP0.2 million), which was enhanced post year end by
a further equity issue of approximately GBP1.75 million (before
costs) in December 2017, through a combination of direct
subscriptions and institutional placements.
Targets for 2018
Our operational targets for 2018 are:
-- To complete the first round of exploration on Kisinka, our
first DRC cobalt-copper operation. This is expected to include
geophysics, soil sampling, trenching, pitting and drilling. The
first phase of exploration is expected to be completed by mid-2018
and, dependent on results therefrom, could be followed by a second
round of exploration which may include additional drilling;
-- Dependent on the results of our due diligence, to exercise the option to acquire the second cobalt-copper exploration licence area in the DRC, Sakania. If we determine to acquire, Sakania, exploration activities are expected to start towards the end of Q2 2018 and will involve a similar programme of work to that of Kisinka;
-- To enhance the value of our SL Licence either through a joint venture or farm-out; and
-- To continue to gather information on other battery metals
assets in Africa, including considering additional cobalt licences
in the DRC. We would consider lithium licences, where Zimbabwe has
a number of interesting projects including some producing mines. It
could also include vanadium, which is more widely used in
stationary batteries. Both Zimbabwe and South Africa have vanadium
assets and mines.
Board Changes
At the beginning of the year under review Iain Macpherson and I
joined the Board as Non-Executive Director and CEO,
respectively.
I am a geologist by background with field exploration experience
in gold in Africa. However, I have spent most of my career in the
equity markets in London, focused on raising capital for resources
companies in particular. I was previously Head of Sales for
Canaccord Adams and a Member of its London Executive Committee and
most recently I was Managing Director, Investment Banking and Head
of London, for Dundee Securities Europe Ltd.
Mr Macpherson, a highly experienced mining engineer, has run and
built mines across Africa, including gold mines in West Africa in a
career spanning over 30 years. Iain was previously CEO of
ASX-listed Elemental Minerals, which was exploring and developing a
potash project in The Republic of Cameroon. Iain is a founding
shareholder of Madini Minerals, ABM's strategic partner and largest
shareholder, through its subsidiary, Madini Occidental.
Post year end, the Board was slimmed down with the resignations
of Howard Baker and Nick Warrell.
Outlook
2017 was a year of significant change for ABM, culminating in
the recent change in direction of the Group and its name change to
African Battery Metals Plc.
In 2018, we expect to significantly advance our exploration
activities in battery metals, especially cobalt. The strong global
drive to move away from internal combustion engines and to replace
these with electric vehicles powered by batteries is underway and
will not be derailed. Cobalt is integral to the make up of the
batteries used in electric vehicles and, although there may be
attempts to substitute away from cobalt towards more widely
available and lower cost metals, in our view this trend will occur
slowly and will be more than offset by the growth in demand for
batteries.
Whilst our own exploration activities will be largely focussed
on battery metals, we remain committed to our assets in Sierra
Leone, in particular the significant gold potential and the proven
iron reserve within the Ferensola licence. We are currently
carrying out a sampling programme on the licence and remain in
discussions with a number of interested parties concerning a
possible JV or farm out of the licence and we will keep
shareholders updated on developments as they progress. The board
remains optimistic for the future of the Group.
Finally, I would like to take this opportunity to express my
gratitude to my fellow directors, management and professional
advisers, past and present, for their dedication. I would also like
to thank our shareholders for their loyal support. I look forward
to providing future updates on the Group's development in due
course.
R Murphy
Chief Executive Officer
14 March 2018
CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME Notes 2017 2016
FOR THE YEARED 30 SEPTEMBER GBP'000 GBP'000
2017
Continuing
operations
Revenue - -
Cost of - -
sales
Gross - -
profit
Operating expenses 4 (3,312) (1,778)
Loss from operating
activities (3,312) (1,778)
Finance costs (633) -
Loss before tax (3,945) (1,778)
Taxation - -
Loss for the year (3,945) (1,778)
Other comprehensive income
Items that will or may be reclassified
to profit or loss;
Exchange translation (41) 400
Total comprehensive expense for
the year (3,986) (1,378)
Basic and diluted loss per share
(pence) 9 (0.18) (0.24)
CONSOLIDATED STATEMENT OF FINANCIAL 2017 2016
POSITION GBP'000 GBP'000
AS AT 30 SEPTEMBER 2017 Notes
Assets
Property, plant and
equipment 5 141 179
Intangible assets 6 5,661 5,716
Non-current assets 5,802 5,895
Trade and other receivables 7 111 60
Cash and cash equivalents 180 101
Current assets 291 161
Total assets 6,093 6,056
Equity
Share capital 8 6,330 4,114
Share premium 9,049 7,422
Shares to be issued - 152
Warrant reserve 365 197
Share based payment
reserve 648 648
Exchange reserve 531 572
Retained deficit (11,497) (7,552)
Total equity 5,426 5,553
Liabilities
Trade and other payables 10 519 472
Short term borrowings 15 31
Derivative financial 133 -
liability
Current liabilities 667 503
Total liabilities 667 503
Total equity and liabilities 6,093 6,056
The financial statements of African Battery Metals plc, company
number 07800337, were approved by the board of Directors and
authorised for issue on 14 March 2018.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 30 SEPTEMBER 2016
Share Share Shares Warrant Share Exchange Retained Total
capital premium to be Reserve based reserve deficit equity
issued payment
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1
October
2015 3,635 7,178 - - 565 172 (5,774) 5,776
--------- --------- -------- --------- --------- --------- --------- --------
Loss for the year - - - - - - (1,778) (1,778)
Total other
comprehensive
income - - - - - 400 - 400
--------- --------- -------- --------- --------- --------- --------- --------
Total
comprehensive
income /
(expense)
for the year - - - - - 400 (1,778) (1,378)
--------- --------- -------- --------- --------- --------- --------- --------
Issue of ordinary
shares 479 324 152 197 - - - 1,152
Costs of share
issues - (80) - - - - - (80)
Share-based
payments - - - - 83 - - 83
--------- --------- -------- --------- --------- --------- --------- --------
479 244 152 197 83 - - 1,155
--------- --------- -------- --------- --------- --------- --------- --------
Balance at 30
September
2016 4,114 7,422 152 197 648 572 (7,552) 5,553
========= ========= ======== ========= ========= ========= ========= ========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 30 SEPTEMBER 2017
Share Share Shares Warrant Share Exchange Retained Total
capital premium to be Reserve based reserve deficit equity
issued payment
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1
October
2016 4,114 7,422 152 197 648 572 (7,552) 5,553
--------- --------- -------- --------- --------- --------- --------- --------
Loss for the year - - - - - - (3,945) (3,945)
Total other
comprehensive
expense - - - - - (41) - (41)
-------- --------- --------- --------- --------
Total
comprehensive
expense for the
year - - - - - (41) (3,945) (3,986)
--------- --------- -------- --------- --------- --------- --------- --------
Issue of ordinary
shares 2,064 1,882 - 168 - - - 4,114
Issue of shares
held
for issue 152 - (152) - - - - -
Costs of share
issues - (255) - - - - - (255)
-------- --------- --------- ---------
2,216 1,627 (152) 168 - - - 3,859
Balance at 30
September
2017 6,330 9,049 - 365 648 531 (11,497) 5,426
========= ========= ======== ========= ========= ========= ========= ========
CONSOLIDATED STATEMENT OF CASH 2017 2016
FLOWS GBP'000 GBP'000
AS AT 30 SEPTEMBER 2017
Cash flows used in operating
activities
Loss for the period (3,945) (1,778)
Adjustments for:
- Depreciation 90 132
- Impairment of fixed assets 15 -
- Expenses settled in shares 175 -
- Loss on disposal of fixed
assets - 10
- Equity settled share-based
payments - 83
* Foreign exchange differences 4 87
633 -
* Loss on derivative
---------
(3,028) (1,466)
Changes in:
- Trade and other receivables (55) 12
- Trade and other payables 55 229
--------- ---------
Net cash from operating
activities (3,028) (1,225)
--------- ---------
Cash flows from investing
activities
Acquisition of property,
plant and equipment (70) (29)
--------- ---------
Net cash flows from investing
activities (70) (29)
--------- ---------
Cash flows from financing
activities
Proceeds from issue
of share capital 3,939 1,000
Proceeds from issue
of shares to be admitted - 152
Issue costs (255) (80)
Funds from short term
loans - 31
Funds applied to short (16) -
term loans
Loan under equity agreement (500) -
--------- ---------
Net cash flows from
financing activities 3,168 1,103
--------- ---------
Increase/(decrease)
in cash and cash equivalents 70 (151)
Cash and cash equivalents
at beginning of period 101 250
Exchange gains on cash and
cash equivalents 9 2
Cash and cash equivalents
at 30 September* 180 101
========= =========
(*) Cash and cash equivalents includes bank overdrafts that are
repayable on demand and form an integral part of the Group's cash
management.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 30 SEPTEMBER 2017
1. Reporting entity
African Battery Metals Plc is a public company limited by shares
which is incorporated and domiciled in England and Wales. The
address of the Company's registered office is 201 Temple Chambers,
3-7 Temple Avenue, London EC4Y 0DT. The consolidated financial
statements of the Company as at and for the year ended 30 September
2017 include the Company and its subsidiary. The Group is primarily
involved in the exploration and exploitation of mineral resources
in Sierra Leone.
2. Going concern
After making enquiries and preparing forecasts for 12 months
from the date the financial statements were signed, the Directors
have formed a judgement that, as at the date of approving the
financial statements, there is a reasonable expectation that the
Group and the Company have adequate resources to continue in
existence for the foreseeable future, however for the Company to
continue with its exploratory activities, the Directors' believe
that it would need to obtain further funding either from a
strategic partner or subsequent equity raisings in the next
financial year, which the Company has succeded in obtaining over
recent years. For this reason, the Directors have adopted the going
concern basis in preparing the financial statements. In forming
this judgement, the Directors have taken account of funds raised
through to February 2018 and believe these funds are adequate for,
inter alia, the Group's ongoing administration costs and current
exploration programme.
3. Intangible assets Prospecting and exploration rights
Rights acquired with subsidiaries are recognised at fair value
at the date of acquisition. Other rights acquired and development
expenditure are recognised at cost.
Development expenditure is capitalised only if development costs
can be measured reliably, the product or process is technically and
commercially feasible, future economic benefits are probable, and
the Group intends to and has sufficient resources to complete
development and to use or sell the asset. Development costs will
only be capitalised when the Directors have reasonable beliefs that
a JORC compliant resource estimate will be obtained. The
expenditure capitalised includes the cost of materials, direct
labour, overhead costs that are directly attributable to preparing
the asset for its intended use, and capitalised borrowing costs.
Other development expenditure is recognised in profit or loss as
incurred.
Capitalised development expenditure will be measured at cost
less accumulated amortisation and impairment losses.
4. Operating expenses
2017 2016
Operating expenses include: GBP'000 GBP'000
Staff costs 874 818
Depreciation 90 132
Impairment of fixed assets 15 -
Foreign exchange (loss) (10) (21)
Auditor's remuneration
- audit services 25 20
Auditor's remuneration in respect of the Company amounted to
GBP20,000 (2016: GBP20,000).
5. Property, plant and equipment
Group
Land Plant Fixtures
and buildings and equipment and fittings Total
GBP'000 GBP'000 GBP'000 GBP'000
Cost
Balance at 1 October
2015 82 515 36 633
Additions - 27 2 29
Disposals - (24) - (24)
Effect of movements in
exchange rate 15 93 7 115
Balance at 30 September
2016 97 611 45 753
--------------- --------------- -------------- ----------
Balance at 1 October 2016 97 611 45 753
Additions 69 2 - 71
Effect of movements in
exchange rate (7) (18) (1) (26)
--------------- --------------- -------------- ----------
Balance at 30 September
2017 159 595 44 798
--------------- --------------- -------------- ----------
Depreciation
Balance at 1 October 2015 58 297 23 378
Depreciation 12 105 15 132
Disposals - (14) - (14)
Effect of movements in
exchange rate 11 62 5 78
Balance at 30 September
2016 81 450 43 574
--------------- --------------- -------------- ----------
Balance at 1 October
2016 81 450 43 574
Depreciation 19 71 - 90
Impairment - 15 - 15
Effect of movements in
exchange rate (3) (18) (1) (22)
--------------- --------------- -------------- ----------
Balance at 30 September
2017 97 518 42 657
--------------- --------------- -------------- ----------
Carrying amounts
At 30 September 2017 62 77 2 141
=============== ============== ==========
At 30 September
2016 16 161 2 179
=============== =============== ============== ==========
6. Intangible assets
Group Prospecting and
exploration rights
GBP'000
Cost at 1 October 2015 5,428
Effect of movements in
exchange rate 288
--------------------
Balance at 30 September
2016 5,716
--------------------
Cost at 1 October 2016 5,716
Effect of movements in
exchange rate (55)
--------------------
Balance as at 30 September
2017 5,661
--------------------
Carrying amounts
Balance at 30 September
2017 5,661
======
Balance at 30 September
2016 5,716
======
The opening balance of intangible assets was initially
recognised on the acquisition of the subsidiary, Blue Horizon (SL)
Ltd.
The Directors regularly assess the carrying value of the Group's
assets, including its prospecting and exploitation rights, and
write off any exploration expenditure that they believe to be
unrecoverable.
At the year end, the Group held one exploration licence, the
153km(2) licence in Sierra Leone, known as Ferensola, which is
prospective for gold and iron. The licence was renewed by the Group
during the year under review for a period of 3 years, with the
right to extend for a further 2 years. It is the Group's policy to
capitalise any exploration expenditure which, in the opinion of the
Directors, will lead directly to a JORC compliant MRE being
declared. To that end, the Group has capitalised the exploration
costs relating to its iron exploration activities on which a JORC
MRE was declared in 2014 which accounts for all of the Group's
total carrying value of GBP5.6 million at the year end. The
estimated value of the iron assets obtained in the JORC MRE
significantly exceeded the carrying value of the asset and, as a
result, no impairment was made.
At present, no exploration activities relating to the Group's
gold exploration activities on the Ferensola Gold Project ("FGP")
have been capitalised. All of the Group's exploration activities
carried out during the year, which amounted to approximately GBP1.3
million were expensed during the year due, in the Directors'
opinion, to the need for further drilling activities in order to
declare a JORC MRE on the FGP in addition to the 9,000m of drilling
carried out by the Group to date. Whilst the Directors continue to
believe that the exploration activities undertaken by the Group to
date on the FGP will deliver a significant financial return to the
Company's shareholders, with the Group's current finite financial
resources, the Directors believe that the best way to deliver value
from the FGP is to enter a JV or farm-out arrangement with a third
party such that ABM will be able to take a carry in any success
delivered by further exploration activities on the FGP. At present,
there are a number of interested parties carrying out due diligence
on the FGP, but it is too early to say at this point whether any JV
or farm-out arrangement will be finalised. Should the Group be
unsuccessful in securing a JV or farm-out partner for Ferensola,
the Directors will consider, at that time, the need for any
impairment on its carrying value of its intangible assets.
Intangible assets are not pledged as security or held under any
restriction of title.
7. Trade and other receivables
2017 2016
GBP'000 GBP'000
Other receivables 13 14
Prepayments 98 46
---------
111 60
========= =========
8. Share capital
Number of ordinary
shares
2017 2016
Ordinary shares
in issue at 1 October 902,681,924 423,515,260
Issued for cash 2,216,087,141 479,166,664
In issue at 30 September - fully
paid (par value 0.1p) 3,118,769,065 902,681,924
============== ============
Number of deferred
shares
Deferred shares - -
Issued on subdivision 356,848,594 356,848,594
356,848,594 356,848,594
============== ============
Ordinary
share capital
2017 2016
GBP'000 GBP'000
Balance at beginning
of year 4,114 3,635
Share issues 2,216 479
--------------
Balance at 30 September 6,330 4,114
============== ============
All ordinary shares rank equally with regard to the Company's
residual assets.
The holders of ordinary shares are entitled to receive dividends
as declared from time to time, and are entitled to one vote per
share at meetings of the Company.
The deferred shares do not entitle the holders thereof to
receive notice of or attend and vote at any general meeting of the
Company or to receive dividends or other distributions or to
participate in any return on capital on a winding up unless the
assets of the Company are in excess of GBP1,000,000,000,000. The
Company retains the right to purchase the deferred shares from any
shareholder for a consideration of one penny in aggregate for all
that shareholder's deferred shares. As such, the deferred shares
effectively have no value. Share certificates will not be issued in
respect of the deferred shares.
Issue of ordinary shares
On 13 October 2016, the Company announced that it would be
raising GBP300,000 (before expenses), through a placing of
304,642,410 new Ordinary shares of 0.1p each in the Company at a
price of 0.1p per share. Additionally, in lieu of the commission
payable in cash in relation to the Subscription, 15,232,120 fully
paid new Ordinary shares were issued to Madini Minerals or its
nominated subsidiary.
On 24 November 2016, the Company raised GBP1,170,000 (before
expenses), through a placing and direct subscriptions for, in
aggregate, of 558,733,765 new Ordinary Shares at a price of 0.21p
per share. This includes 22,935,932 Ordinary shares issues to
Madini Minerals in lieu of placing fees.
On 13 December 2016, the Company issued 65,468,750 new Ordinary
shares of 0.1p each at a price of 0.16p per share further to the
exercise of certain warrants. The gross proceeds of the exercise
amounted, in aggregate, to GBP104,750.
On 21 December 2016, the Company raised GBP300,000 (before
expenses), through an open offer and rump placing of, in aggregate,
108,657,749 Ordinary shares at an Issue price of 0.21p per share.
Further to this, certain members of the group's directors and
advisers were paid, in aggregate, 8,809,524 new Ordinary shares in
lieu of certain accrued salaries and fees owed.
On 24 February 2017, the Company issued 9,375,000 new Ordinary
shares of 0.1p each at a price of 0.16p per share further to the
exercise of certain warrants. The gross proceeds of the exercise
amounted, in aggregate, to GBP15,000.
On 17 March 2017, the Company raised GBP500,000 (before
expenses), through a subscription of 128,594,765 new Ordinary
Shares at an issue price of 0.40p per share.
On 26 May 2017, the Company completed payment to Equity Drilling
Ltd ("Equity") by issuing 52,425,474 new Ordinary shares to Equity
based upon a price of 0.43p per share.
On 19 June 2017, the Company raised GBP400,000 (before
expenses), through a subscription of 160,000,000 new Ordinary
shares at an issue price of 0.25p per share.
On 7 July 2017, the Company issued 7,920,000 new ordinary shares
or 0.1p each in settlement of fees incurred from a number of its
advisers. The ordinary shares were issued at a price of 0.25 per
share.
On 8 August 2017, the Company completed payment to Equity
Drilling Ltd ("Equity") by issuing 67,290,037 new Ordinary shares
to Equity based upon a price of 0.225p per share.
On 22 August 2017, the Company raised GBP900,000 (before
expenses), through a subscription of 606,438,356 ordinary shares of
0.1p each at a price of 0.146p per share, to investors secured by
Riverfort Global Capital Ltd.
9. Loss per share
Basic and diluted loss per share
The calculation of basic and diluted loss per share is based on
the loss attributable to ordinary shareholders of GBP3,945,000
(2016: GBP1,778,000), and a weighted average number of ordinary
shares in issue of 2,136,646,311 (2016: 753,917,125).
As detailed in note 26, the Company issued a number of shares
subsequent to the year end which would have significantly increased
the number of ordinary shares in issue if these transactions had
occurred prior to the end of the year. The issues would have had an
anti-dilutive effect. All existing warrants and options are also
anti-dilutive.
No Directors exercised options or warrants in the year ended 30
September 2017 (2016: Nil).
10. Trade and other payables
Group
2017 2016
GBP'000 GBP'000
Trade payables 226 221
Other payables 144 60
Accrued expenses 149 191
---------
519 472
========= =========
11. Derivative financial liability
In August 2017, the Company raised GBP900,000 (before expenses)
through the issue of 616,438,356 Ordinary Shares at a price of
0.146p per share to investors ("Investors") designated by RiverFort
Global Capital Ltd ('Riverfort'). The Company simultaneously
entered into an Equity Sharing Agreement ('ESA') with the
Investors, in which GBP500,000 of the subscription proceeds were
loaned to the Investors. The ESA entitled the Company to receive
back the payment of GBP500,000 on a pro-rata monthly basis until
September 2018, subject to adjustment upwards or downwards each
month depending on the Company's share price at the time as against
a benchmark price of 0.161 pence per Ordinary Share ("Benchmark
Price").
The ESA provided for a monthly payment to be made by the
Investors to the Company, being GBP41,666(the "Monthly Payment").
This payment may be adjusted up or down depending on whether the
"Market Price", (calculated as the average of the lowest ten daily
volume weighted average prices of the Ordinary Shares during the
relevant month), is above or below the Benchmark Price. If the
Market Price is above the Benchmark Price, then the Monthly Payment
is increased based on the following formula:
Settlement Formula
GBP41,666 - (51,369,863 Ordinary Shares x 0.75 x (Market Price -
Benchmark Price).
If the Market Price is below the Benchmark Price then the
Monthly Payment is reduced based on the following formula:
GBP41,666 - (51,369,863 Ordinary Shares x (Benchmark Price -
Market Price)
Assuming the Market Price equals the Benchmark Price on the date
of each and every settlement, the Company would have received
aggregate repayments of GBP500,000 from the ESA.
As at the end of the financial year under review, due to the
Market Price having been significantly below the Benchmark Price,
the Company had received an aggregate of only GBP9,168 pursuant the
ESA. The fair value of the derivative financial liability entered
into in 2017 has been determined by reference to the Company's then
prevailing share price and has been estimated as follows
2017 2016
GBP'000 GBP'000
Derivative financial asset / (liability)
Fair Value at inception 500 -
Loss on revaluation of derivative (633) -
financial asset recognised in the
year
Total derivative financial liability (133) -
========= =========
On 8 December 2017, it was mutually agreed by the Company and
the Investors that the ESA be settled by a payment of GBP141,463.
This payment represented the fair value of the derivative at the
time of settlement.
12. Subsequent events
In October 2017, the Company announced that Howard Baker,
Non-Executive Technical Director resigned.
In October 2017, the Company issued 152,977,298 new ordinary
shares to Equity Drilling Ltd in final settlement for the completed
Phase 3 drilling of 5,184 metre on its Ferensola gold project.
In November 2017, the Company announced that Nick Warrell, Chief
Operating Officer, resigned as director and stepped down from the
Board.
At a General Meeting of the Company held on 8 December 2017, the
Company's shareholders approved resolutions to, inter alia,
subdivide each ordinary share of 0.1p each into 1 new ordinary
share of 0.001p each and 1 deferred share of 0.099p each.
The ordinary shares of 0.01p each carry the same rights as those
previously attached to the ordinary shares of 0.001p each (save for
the reduction in nominal value).
In December 2017, the Company acquired a controlling interest in
a Cobalt Licence and had conditionally raised GBP1,750,000 (before
expenses) through the placing of 3,000,000,000 new ordinary shares,
and a subscription for 500,000,000 new ordinary shares at a price
of 0.05p each.
The proceeds of the above fundraising is to be used to
capitalise a new company incorporated in the Dominican Republic of
Congo, (70% owned by ABM and 30% by the Vendor which will hold the
Cobalt Licence); to buy-back shares from D-Beta, and for general
working capital purposes.
In December 2017, it was mutually agreed by the Company and the
Investors designated by RiverFort Global Capital Ltd, that the
remaining balance due from Investors of GBP390,832 be waived and an
additional settlement payment be made of GBP141,463 in order
terminate the agreement.
In December 2017, the Company announced the purchase of
532,438,356 of its own ordinary shares of 0.001p each from D-Beta,
an Investor designated by Riverfort Gloabal Capital Limited and a
party to the equity sharing agreement. These shares were then
cancelled in January 2018.
In January 2018, the directors announced the Company was renamed
to African Battery Metals Plc.
13. Annual General Meeting and Distribution of Accounts to Shareholders
The Company's Annual General Meeting will take place on 9 April
2018 at the Company's registered office, 201 Temple Chambers, 3-7
Temple Avenue, London, EC4Y 0DT. The Company's Annual Report and
Accounts for the year ended 30 September 2017 will be posted to
shareholders shortly. Copies of the Notice of AGM and the Annual
Report and Accounts will also be available on the Company's website
at www.abmplc.com in due course.
14. Statutory Accounts
The audited financial information in this announcement, which
was approved by the Board of Directors on 14 March 2018, does not
constitute the Company's statutory accounts for the year ended 30
September 2017, but is derived from those accounts. The Company's
auditor, Moore Stephens LLP, has signed their report on the
financial statements for the year ended 30 September 2017.
Statutory accounts for the year ended 30 September 2016 have been
delivered to the Registrar of Companies and those for the year
ended 30 September 2017 will be delivered following the Company's
Annual General Meeting.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR FKQDQDBKBFND
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March 15, 2018 03:01 ET (07:01 GMT)
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