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Armadale Capital Plc / Index: AIM / Epic: ACP / Sector: Investment Company
28 May 2019
Armadale Capital Plc (‘Armadale’ or ‘the Company’)
Final Results and Notice of AGM
Armadale, the AIM quoted investment company focused on natural resource projects in Africa, is pleased to announce its Final Results for the year ended 31 December 2018.
HIGHLIGHTS
Notable progress advancing the Mahenge Liandu Graphite Project in Tanzania Completed Scoping Study highlighting a potential NPV of US$349m and IRR of 122% On track to deliver Definitive Feasibility Study (‘DFS’) Q4 2019 and commence production 2021 First off-take MOU signed and discussions underway with other potential customers Engaged in discussions to secure project level funding mandate In January 2019, post period end, the Company signed an agreement to sell non-core Mpokoto Project to focus on primary value driver, whilst retaining upside exposure Ongoing review of quoted portfolio, the Directors believe there are opportunities for capital gains Continue to actively review further exciting investment opportunities Post period end, the Board strengthened with the appointment of Paul Johnson as a Non-executive DirectorNick Johansen, Director of Armadale said: “2018 has seen Armadale make considerable progress advancing Mahenge Liandu towards production in 2021. With the Scoping Study complete, which supported a pre-tax IRR of 122% and an NPV of US$349m, confirming the compelling economics of the Project, work has focussed on the advancement of the DFS and product marketing. In line with this, post period end, we signed our first off-take MOU and discussions are underway with other potential customers. This indication of interest highlights the increased global demand for high-quality graphite products; notably Mahenge Liandu is one of the largest high-grade resources in Tanzania with a high-grade JORC compliant indicated and inferred mineral resource estimate of 51.1Mt at 9.3% total graphite content.
“With various work streams underway towards the completion of the DFS in Q4 2019, shareholders can look forward to multiple value triggers in the coming months. We continue to actively review other exciting investment opportunities to add to our portfolio and look forward to providing updates on these and steps to realise the potential of Mahenge Liandu in the coming months.”
NOTICE OF AGM & POSTING OF ANNUAL REPORT
The Company announces that its Annual General Meeting (‘AGM’) will be held at St Brides Partners Limited, 4th Floor, Salisbury House, London Wall, London EC2M 5QQ on 27 June at 11.00 am. A notice of AGM, together with printed copies of the Company’s full Annual Report for the year ended 31 December 2018 will be posted to shareholders today.
Copies will also be available to view on the Company’s website: www.armadalecapitalplc.com.
STRATEGIC REPORT
To view a version of the strategic report with maps and figures, please go to the Company’s website at www.armadalecapitalplc.com.
During the year under review, Armadale continued to operate as a diversified investing company focused on natural resource projects in Africa. To this end, its portfolio is divided into two groups:
Actively managed investments where the Company has majority ownership of the investment Passively managed investments where the Company has a minority investment, typically in a quoted company, and does not have management control.Currently, its key actively managed investment is the Mahenge Liandu Graphite Project in Tanzania. With its large, high-grade open cut resource, and having completed a Scoping Study that highlighted a potential NPV of US$349m and IRR of 122%, the Company is on track to commence production at the Project during the course of 2021. This is timely given that global need for graphite is set to accelerate driven by demand for spherical graphite from the new energy sector as well as emerging demand for expandable graphite used in products such as fireproof insulation. Notably, the strength of the market was highlighted when, post period end, the Company signed its first off-take MOU. The Company is also currently reviewing other potential markets and customers within this space.
Additionally, the Company continued to actively review other investment opportunities with a view to targeting investments with similar quality and potential as Mahenge Liandu.
ACTIVELY MANAGED INVESTMENTS
Mahenge Liandu Graphite Project, Tanzania (‘Mahenge Liandu’ or the ‘Project’)
The Company continued to deliver encouraging results at its 100% owned Mahenge Liandu Graphite Project during 2018. The Project is located in a highly prospective region with a high-grade JORC compliant indicated and inferred mineral resource estimate announced February 2018 of 51.1Mt at 9.3% total graphite content (‘TGC’), including 38.7Mt Indicted at 9.3% and 12.4Mt at 9.1% TGC, making it one of the largest high-grade resources in Tanzania. The work to date has demonstrated Mahenge Liandu’s potential as a commercially viable deposit with significant tonnage, high-grade coarse flake and near surface mineralisation (implying a low strip ratio) contained within one contiguous ore body.
The focus of activities was the commencement of a Definitive Feasibility Study (‘DFS’) based on the results of a Scoping Study that was completed in March 2018. The study was based on a throughput of 400,000 tpa over a 32-year mine life and showed the Project has robust economics and warrants further development. The Company believes the timing of the planned mine development will coincide with growing opportunities in the graphite market with strong outlook for increased graphite demand from the burgeoning lithium ion battery, expandable graphite, as well as traditional graphite markets.
| Tonnage (Mt) | Cutoff TGC (%) | Average TGC (%) | |||||
| Inferred | 12.4 | 3.3 | 9.1 | ||||
| Indicated | 38.7 | 3.5 | 9.3 | ||||
| Total | 51.1 | 3.5 | 9.3 |
Table 1. Mahenge Liandu Resource Statement
Project Location & Licences
The Mahenge Project is located in the Morogoro region, Ulanga district, of Tanzania close to existing transport infrastructure. It is 10km south of the Mahenge township and about 76km via a well-maintained dirt road to Ifakara after which it is 400km by sealed road from Dar-es-Salaam port. Other operators in the region include Blackrock Mining Limited and Kibaran Resources Limited, which have similar product purity and resource grades.
The Company holds following exploration tenements for Mahenge Liandu:
PL10846/2016 granted on 21/9/2016 expires 20/9/2020 area 7.34 square kilometres PL10840/2016 granted 21/9/2016 expires 20/9/2020 area 21.89 square kilometresProject Geology
The prospect is situated within the pan African Mozambique belt, which is the orogenic belt resulting from activities taking place in the Neoproterozoic time. The belt extends along the eastern border of Africa from Ethiopia through Kenya and Tanzania. The orogenic event resulted in a complex series of geological events including the rifting system. The belt consists of high-grade mid-crustal rocks with a Neoproterozoic metamorphic overprint. It is divided into the Western Granulite and Eastern Granulite. The deposit is situated in the Eastern Granulites. The belt has undergone retrograde metamorphism which resulted in the present upper amphibolite metamorphic facies in the Project area.
Furthermore, the systematic drilling indicated the existence of broad, shallow to steep dipping schists overlaying granitic gneisses/gneiss. The gneisses are underlaid by marble units. The graphitic schists form alternating compositional layering, with quartz being the content that differentiates these units. High grade graphite schists (graphite schist) have a lower composition of quartz. Medium to low grade graphite schists (quartz graphite schist) have a higher visual quartz percentage. The marble unit likely forms the base of the sequence (there has not been drilling done beyond the marble unit).
The drilling results have been very consistent with the structural measurements taken during the mapping programme which suggested gentle to steep dipping to the south and south-southwest. The mineralisation remains open in all directions.
Scoping Study
During 2018, a Scoping Study was completed for Mahenge Liandu, which included the completion of a mine optimisation study, infill drilling and the resource upgrade. The results of the Scoping Study were announced in March 2018.
Drilling
Drilling in 2018 comprised a diamond drilling programme completed with eight holes for a total of 489m and 18 RC holes. All holes intersected wide intervals of high-grade mineralisation from surface with up to 67m thickness. The 2018 drilling aimed at infill drilling the existing pattern to upgrade the resource classification, extend the available resources and better define the mineralised units laterally within the deposit. The drilling targeted a higher-grade zone within the deposit and drilling was concentrated in the northern part of the tenement. A map of all the drilling completed to date is shown below.
Process Description
The Scoping Study was based on a processing plant designed to treat 400,000 tpa of ore. The ore will be two-stage crushed, followed by grinding in a rod mill, with graphite recovered by flotation. The process includes separation of graphite into coarse and fine concentrates at an intermediate stage, followed by inter-stage re-grind milling and flotation to improve liberation and product purity. The flotation concentrate will then be then dewatered by filtration, dried, and bagged.
Results of the Scoping Study
The Scoping Study confirmed the combination of high graphite feed grade and coarse flake high purity graphite product and provided highly robust and compelling economics for the Mahenge Liandu Project. The Scoping Study, based on a 400,000 tpa throughput, had following key economics:
Producing an average of 49,000 tpa of high-quality graphite products for a 32-year mine life The near surface nature of the deposit produced a low strip ratio of approximately 1:1 for the life of the mine The Project has a low operating cost of US$408/t and is based on an average life of mine grade of 12.5% Total Graphitic Carbon (‘TGC’) The Project has a pre-tax IRR of 122% and NPV of US$349m with a low development capex of US$35m The maximum drawdown during the construction of the Project is US$34.9m and the after-tax payback period is 1.2 years There remains significant scope to further improve returns, with staged expansions as the current mine plan is based on approximately 25% of the total resource| Summary of Project Financial Performance | |||||
| Financial Performance Summary | Units | LOM | |||
| Project Life | (years) | 31.8 | |||
| Total LOM Net Revenue | (US$ M, real) | 1,977.7 | |||
| Total LOM EBITDA | (US$ M, real) | 1,196.0 | |||
| Total LOM Net Cash Flows Before Tax | (US$ M, real) | 1,134.7 | |||
| Total LOM Net Cash Flows After Tax | (US$ M, real) | 794.3 | |||
| NPV @ 10.0% - before tax | (US$ M, real) | 348.7 | |||
| NPV @ 10.0% - after tax | (US$ M, real) | 239.1 | |||
| IRR - before tax | (%, real) | 122.5% | |||
| IRR - after tax | (%, real) | 89.3% | |||
| Project Capital Expenditure | (US$ M, real) | 34.9 | |||
| Payback Period - after tax - from 1st ore | (years) | 1.2 | |||
The Scoping Study results validate the Directors’ long held confidence in the commercial potential and economic value of the Mahenge Project. The Definitive Feasibility Study that is currently underway is based on the same parameters giving the Company confidence that the Project will continue to show excellent returns and will allow it to proceed to a decision to mine in 2020 provided project development funding can be secured.
Exploration and Development Programme
Definitive Feasibility Study
The DFS for Mahenge Liandu commenced in Q2 2018 and is expected to be complete by Q4 2019. The study will focus on defining graphite product quality with a wide diameter diamond core drilling programme aimed at generating samples for marketing.
The following activities are being carried out to support the study:
A diamond drilling programme to obtain samples for metallurgical test work and marketing Product marketing towards the goal of obtaining binding offtake agreements. The first MOU secured covering 60% of planned production was signed in February 2019 Environmental and social studies covering the Project area and completion of a Relocation Action Plan (‘RAP’) for the people who may be impacted through the development of the Project Granting of a mining permit A geotechnical drilling programme to define the final pit wall design Calculation of Proved and Probable Reserves Finalisation of production flowsheets and final plant design parametersEnvironmental and Social Studies
During August 2018, the Company announced the completion of field work for Environmental and Social baseline surveys and the Company has finalised the Environmental Social Impact Assessment (‘ESIA’) and Relocation Action Plan (‘RAP’) for submission to the National Environment Management Council (‘NEMC’).
To help increase local engagement in the Project area, the Company has appointed a community liaison officer who will aid understanding of the impact and benefits of mining in the region. Further information in respect of this work of will be provided as progress is made.
Product Marketing and Offtake Partners
In February 2019, the Company announced a MOU with the Matrass Group, a China based graphite mining and processing company, for high quality graphite products produced at Mahenge Liandu. This includes a proposed offtake of 30,000tpa of graphite concentrate for an initial five-year term at a price to be agreed based on the Chinese benchmark for the quality of the graphite produced, representing over 60% of average target annual production. The test work programme aimed to progress the MOU to a binding agreement is underway.
Discussions with other potential offtake partners for the remaining 19,000tpa of graphite concentrate are progressing positively.
The graphite market continues to strengthen with several Tanzanian based graphite projects securing binding offtakes over recent months. The rapid expansion of the electric vehicle market is expected to continue to drive this growth.
Project Level Financing
The Company is engaged in discussions to secure a project level funding mandate. Further details in respect of this element will be provided as material developments occur.
Mining Lease Application
Reflecting the progress of work to date, the Company expects to submit its application for a mining lease in August 2019.
Front End Engineering Design
Following completion of the DFS, the Company expects to commence the Front-End Engineering Design (‘FEED’) work programme in December 2019. The FEED process is a detailed technical project planning phase undertaken prior to the commencement of construction and used as a basis to secure project construction bids.
Project Construction
Subject to a successful and timely completion of the aforementioned preparatory work, suitable project level financing and receipt of relevant regulatory permits and licences, the Company expects to commence the construction phase in Q2 2020.
Production
Based on current estimates and assuming a construction phase of 10 months the first production would be achieved from the Mahenge Liandu Project around Q1 2021.
Mpokoto Gold Project, DRC (‘MPOKOTO’)
The Mpokoto Project was the subject of a joint venture agreement with Kisenge Mining Pty Ltd (‘Kisenge Mining’) throughout the year under review and, as such, was considered a non-core investment asset of Armadale.
After the year under review, on 11 January 2019, Armadale entered into final formal sale agreement with African Royalty Company Pty Limited (a related company to Arrow Mining Pty Ltd) for the sale of the Mpokoto Gold Project.
This agreement crystallises the value of the Mpokoto Project with a company capable of obtaining the funding to bring the mine into production.
The transaction allows Armadale to focus on advancing its primary value driver, the high-grade Mahenge Liandu Graphite Project in Tanzania, whilst ensuring the Company retains exposure to the development upside of the Mpokoto Project.
Arrow Mining will take over the operations on the Mpokoto Project and is obliged to pay Armadale a 1.5% royalty on gold sales achieved once in production.
PASSIVELY MANAGED INVESTMENTS
Mine Restoration Investments Limited (‘MRI’), South Africa
The shares in MRI are being carried at Nil market value (2017: Nil) as MRI shares were suspended from trading on the Johannesburg Stock Exchange.
Quoted Portfolio
The Company has a small portfolio of quoted investments, principally in resource companies where the Directors believe there are opportunities for capital gain. The Company continues to keep its portfolio under review.
SUSTAINABLE DEVELOPMENT
The Company is committed to sustainable development and conducting its business ethically. Given that the Company invests in the mining industry, Armadale focuses on health and safety, being environmentally responsible, and supporting the communities close to its investments.
CORPORATE INFORMATION
Principal risks and uncertainties
There are known risks associated with the mineral industry, especially in Africa. The Board regularly reviews the risks to which the Group is exposed and endeavours to minimise them as far as possible. The following summary, which is not exhaustive, outlines some of the risks and uncertainties currently facing the Group:
The Group is exposed to two minerals namely gold and graphite. With gold, the Group is vulnerable to fluctuations in the prevailing market price of gold and to variations of the US dollar, in which sales will be denominated. Graphite is a relatively new commodity whose market is being driven by demand in renewable energy. It is thus vulnerable to global energy policies. The impact of Brexit on companies operating in the UK is still being monitored. Thus far Brexit has not impacted the Group’s ability to raise funds. The exploration for and development of mineral resources involves technical risks, infrastructure risks and logistical challenges, which even a combination of careful evaluation and knowledge may not eliminate. There can be no assurance that the Group’s projects will be fully developed in accordance with current plans. Future development work and subsequent financial returns arising may be adversely affected by factors outside the control of the Group. The availability and access to future funding within the global economic environment. The Group operates in multiple national jurisdictions and is therefore vulnerable to changes in government policies which are outside its control. The mining regulation changes in Tanzania are still being evaluated, however they seem to have minimal impact on investment in graphite mining. The Group continues to monitor the implementation of the new changes to evaluate and mitigate sovereign risks.Some of the mitigation strategies the Group applies in its present stage of development include, among others:
Proactive management to reducing fixed costs. Rationalisation of all capital expenditures. Maintaining strong relationships with government (employing local staff and partial government ownership), which improves the Group’s position as a preferred small mining partner. Engagement with local communities to ensure our activities provide value to the communities where we operate. Alternative and continued funding activities with a number of options to secure future funding to continue as a going concern.The Directors regularly monitor such risks and will take actions as appropriate to mitigate them. The Group manages its risks by seeking to ensure that it complies with the terms of its agreements, and through the application of appropriate policies and procedures, and via the recruitment and retention of a team of skilled and experienced professionals.
Key Performance Indicators
The Group’s current key performance indicators (‘KPIs’) are the performance of its underlying investments, measured in terms of the development of the specific projects they relate to, the increase in capital value since investment and the earnings generated for the Group from the investment. The Directors consider that it is still too early in the investment cycle of any of the investments held, for meaningful KPIs to be given.
Success is also measured through the identification and investment in suitable additional opportunities that fit the Group’s investment objectives. The acquisition of Mahenge Liandu Graphite Project is such success.
Board
Post period end, in March 2019, Paul Johnson was appointed to the Board as a Non-executive Director.
Mr. Johnson is an experienced public company director and is a former Chief Executive Officer of natural resource investing company Metal Tiger plc (LON:MTR). He has also previously held the roles of Chairman at ECR Minerals plc (LON:ECR); Chief Executive Officer at China Africa Resources plc (now Pembridge Resources plc - LON:PERE) and Metal NRG plc (LON:MNRG); and Non-executive Director at Greatland Gold plc (LON:GGP), Papua Mining plc (now Rockfire Resources plc LON:ROCK) and Thor Mining plc (LON:THR).
Mr. Johnson is the Chief Executive Officer of Value Generation Limited, a family investment and advisory company focused on the natural resource and related fintech sectors. He is also Executive Director of African Battery Metals plc (LON:ABM) an AIM quoted exploration and development company focused on battery metal projects in Africa.
Financial Results
For the year ended 31 December 2018 the Group did not earn any revenues as its business related solely to the making of investments in non-revenue producing resource projects and companies.
The Group made a loss after tax of £0.648 million (2017: £6.177 million) for the year ended 31 December 2017.
The Directors successfully negotiated the sale of the Mpokoto Project and recognise an impairment charge of £0.194 million based on the reassessment of the carrying value of the Project to nil. Other than this, the loss comprises the administrative expenses associated with operating a public company and finance costs.
Funds raised during the year amounted in total to £0.85 million of which £0.65 million came from a placing of shares and £0.2 million from the initial drawdown of a new loan facility of £0.4 million. Other share issues during the year were in respect of loan note conversions and the discharge of certain consultants’ invoices.
At 31 December 2018, the Group had cash of £44,000 (2017: £65,000) and debt of £677,000 (2016: £634,000).
Since the year end, a further £0.964 million has been raised from a placing of shares and the balance of the new loan facility, £0.2 million, remains available for drawdown. The Group is in discussions with third parties which may provide project level financing for the development of the Mahenge Liandu Project. Furthermore, and dependant on the working capital requirements at project level, and considering working capital needs in respect of corporate operations, the Group considers it will have access to adequate additional financing as and when required from new equity issues and additional loan facilities. As a result, the financial statements have been prepared on the going concern basis as, in the opinion of the Directors, there is a reasonable expectation that the Group and the Company will continue in operational existence for the foreseeable future.
Outlook
Looking to the future, with its clear development path to production commencing with the execution of the DFS currently underway, the Directors believe that Mahenge Liandu represents an exciting opportunity for the Group. Furthermore, other notable investment opportunities are under review, which the Board believe could replicate this success and deliver significant value to shareholders.
Emmanuel S Mahede
Director
23 May 2019
| Consolidated Statement of Comprehensive Income For the year ended 31 December 2018 | |||||||
| Note | 2018 | 2017 | |||||
| £ | £ | ||||||
| Other administrative expenses | (392,945) | (399,938) | |||||
| Operating loss | (392,945) | (399,938) | |||||
| Finance costs | (17,459) | (44,478) | |||||
| Loss before taxation | 6 | (410,404) | (444,416) | ||||
| Taxation | 9 | - | - | ||||
| Loss for the year from continuing operations | (410,404) | (444,416) | |||||
| Loss from discontinued operations, net of tax | 14 | (237,616) | (5,732,598) | ||||
| Loss after taxation | (648,020) | (6,177,014) | |||||
| Other comprehensive income | |||||||
| Items that may be reclassified to profit or loss: | |||||||
| Exchange differences on translating foreign entities | 83,407 | (771,989) | |||||
| Total comprehensive (loss) / income attributable to the equity holders of the parent company | (564,613) | (6,949,003) | |||||
| Loss per share attributable to the equity holders of the parent company | Pence | Pence | |||||
| Basic and diluted total loss per share | 10 | (0.23) | (2.58) | ||||
| Basic and diluted loss per share from continuing operations | 10 | (0.14) | (0.19) | ||||
| Consolidated Statement of Financial Position At 31 December 2018 | |||||||
| Note | 2018 £ | 2017 £ | |||||
| Assets Non-current assets | |||||||
| Exploration and evaluation assets | 11 | 3,192,999 | 2,384,036 | ||||
| Investments | 12 | 973 | 6,705 | ||||
| 3,193,972 | 2,390,741 | ||||||
| Current assets | |||||||
| Trade and other receivables | 13 | 53,486 | 54,563 | ||||
| Cash and cash equivalents | 44,310 | 65,163 | |||||
| 97,796 | 119,726 | ||||||
| Non-current assets classified as held for sale | 14 | 128,011 | 322,412 | ||||
| 225,807 | 442,138 | ||||||
| Total assets | 3,419,779 | 2,832,879 | |||||
| Equity and liabilities | |||||||
| Equity | |||||||
| Share capital | 18 | 3,038,605 | 2,980,211 | ||||
| Share premium | 20 | 20,569,844 | 19,720,193 | ||||
| Shares to be issued | 20 | 286,000 | 286,000 | ||||
| Share option reserve | 20 | 94,884 | 94,884 | ||||
| Foreign exchange reserve | 20 | 421,252 | 337,845 | ||||
| Retained earnings | 20 | (22,129,940) | (21,481,920) | ||||
| Total equity | 2,280,645 | 1,937,213 | |||||
| Current liabilities | |||||||
| Trade and other payables | 15 | 333,653 | 133,619 | ||||
| Loans | 16 | 677,470 | 431,406 | ||||
| 1,011,123 | 565,025 | ||||||
| Liabilities directly associated with non-current assetsclassified as held for sale | 14 | 128,011 | 128,011 | ||||
| 1,139,134 | 693,036 | ||||||
| Non-current liabilities | |||||||
| Long term borrowings | 17 | - | 202,630 | ||||
| Total Liabilities | 1,139,134 | 895,666 | |||||
| Total equity and liabilities | 3,419,779 | 2,832,879 | |||||
| Company Statement of Financial Position At 31 December 2018 | |||||||
| Note | 2018 £ | 2017 £ | |||||
| Assets Non-current assets | |||||||
| Investments | 12 | 1,600,973 | 1,606,705 | ||||
| Other receivables | 13 | 1,394,461 | 972,544 | ||||
| 2,995,434 | 2,579,249 | ||||||
| Current assets | |||||||
| Investments held for disposal | 12 | - | 194,401 | ||||
| Trade and other receivables | 13 | 13,439 | 43,750 | ||||
| Cash and cash equivalents | 4,240 | 10,809 | |||||
| 17,679 | 248,960 | ||||||
| Total assets | 3,013,113 | 2,828,209 | |||||
| Equity and liabilities | |||||||
| Equity | |||||||
| Share capital | 18 | 3,038,605 | 2,980,211 | ||||
| Share premium | 20 | 20,569,844 | 19,720,193 | ||||
| Shares to be issued | 20 | 286,000 | 286,000 | ||||
| Share option reserve | 20 | 94,884 | 94,884 | ||||
| Retained earnings | 20 | (21,753,522) | (20,953,744) | ||||
| Total equity | 2,235,811 | 2,127,544 | |||||
| Current liabilities | |||||||
| Trade and other payables | 15 | 99,832 | 66,629 | ||||
| Loan notes | 16 | 677,470 | 431,406 | ||||
| 777,303 | 498,035 | ||||||
| Non-Current liabilities | |||||||
| Long term borrowings | 17 | - | 202,630 | ||||
| Total liabilities | 777,303 | 700,665 | |||||
| Total equity and liabilities | 3,013,113 | 2,828,209 | |||||
The Company has taken advantage of the exemption conferred by section 408 of Companies Act 2006 from presenting its own statement of comprehensive income. A loss after taxation of £605,270 (2017: £6,006,511) has been included in the financial statements of the parent company.
| Consolidated Statement of Changes in Equity For the year ended 31 December 2018 | |||||||||||||||||
| ShareCapital | SharePremium | Sharesto beissued | ShareOptionReserve
| Loan Note Reserve
| ForeignExchangeReserve | RetainedEarnings | Total | ||||||||||
| £ | £ | £ | £ | £ | £ | £ | £ | ||||||||||
| At 1 January 2017 | 2,946,587 | 19,009,592 | 286,000 | 85,850 | 37,500 | 1,109,844 | (15,342,406) | 8,132,957 | |||||||||
| Loss for the year | - | - | - | - | - | - | (6,177,014) | (6,177,014) | |||||||||
| Other comprehensive loss | - | - | - | - | - | (771,989) | - | (771,989) | |||||||||
| Total comprehensive loss for the year | - | - | - | - | - | (771,989) | (6,177,014) | (6,949,008) | |||||||||
| Issue of shares | 33,624 | 771,501 | - | - | - | - | - | 805,125 | |||||||||
| Expenses of issue | - | (60,900) | - | - | - | - | - | (60,900) | |||||||||
| Share based payment charges | - | - | - | 9,034 | - | - | - | 9,034 | |||||||||
| Transfer on conversion of loan notes | - | - | - | - | (37,500) | - | 37,500 | - | |||||||||
| Total other movements | 33,624 | 710,601 | - | 9,034 | (37,500) | - | 37,500 | 753,259 | |||||||||
| At 31 December 2017 | 2,980,211 | 19,720,193 | 286,000 | 94,884 | - | 337,845 | (21,481,920) | 1,937,213 | |||||||||
| Loss for the year | - | - | - | - | - | - | (648,020) | (648,020) | |||||||||
| Other comprehensive loss | - | - | - | - | - | (84,407) | (2,377) | ||||||||||
| Total comprehensive loss for the year | - | - | - | - | - | (84,407) | (648,020) | (650,397) | |||||||||
| Issue of shares | 58,394 | 905,106 | - | - | - | - | - | 963,500 | |||||||||
| Expenses of issue | - | (55,455) | - | - | - | - | - | (55,455) | |||||||||
| Total other movements | 58,394 | 849,651 | - | - | - | - | - | 908,045 | |||||||||
| At 31 December 2018 | 3,038,605 | 20,569,844 | 286,000 | 94,884 | - | 422,252 | (22,169,940) | 2,194,861 | |||||||||
The following describes the nature and purpose of each reserve within owners’ equity:
| Reserve | Description and purpose | ||
| Share capital | amount subscribed for share capital at nominal value | ||
| Share premium | amount subscribed for share capital in excess of nominal value, net of | ||
| allowable expenses | |||
| Shares to be issued | share capital to be issued in connection with the acquisition of | ||
| Netcom | |||
| Share option reserve | cumulative charge recognised under IFRS 2 in respect of share-based | ||
| payment awards | |||
| Loan note reserve | equity element of convertible loan notes | ||
| Foreign exchange | reserve gains/losses arising on re-translating the net assets of overseas | ||
| operations into sterling | |||
| Retained earnings | cumulative net gains and losses recognised in the statement of | ||
| comprehensive income | |||
| Company Statement of Changes in Equity For the year ended 31 December 2018 | |||||||||||||||
| ShareCapital | SharePremium | Shares tobe issued | ShareOptionReserve
| Loan Note Reserve
| RetainedEarnings | Total | |||||||||
| £ | £ | £ | £ | £ | £ | ||||||||||
| At 1 January 2017 | 2,946,587 | 19,009,592 | 286,000 | 85,850 | 37,500 | (14,984,733) | 7,380,796 | ||||||||
| Loss for the year | - | - | - | - | - | (6,006,511) | (6,006,511) | ||||||||
| Total comprehensive loss forthe year | - | - | - | - | - | (6,006,511) | (6,006,511) | ||||||||
| Issue of shares | 33,624 | 771,501 | - | - | - | - | 805,125 | ||||||||
| Expenses of issue | - | (60,900) | - | - | - | (60,900) | |||||||||
| Share based payment charges | - | - | - | 9,034 | - | - | 9,034 | ||||||||
| Transfer on conversion ofloan notes | - | - | - | - | (37,500) | 37,500 | - | ||||||||
| Total other movements | 33,624 | 710,601 | - | 9,034 | (37,500) | 37,500 | 753,259 | ||||||||
| At 31 December 2017 | 2,980,211 | 19,720,193 | 286,000 | 94,884 | - | (20,953,744) | 2,127,544 | ||||||||
| IFRS 9 Adjustment tointercompany debt | (194,508) | (194,508) | |||||||||||||
| At 1 January 2018 | 2,980,211 | 19,720,193 | 286,000 | 94,884 | - | (21,148,252) | 1,933,036 | ||||||||
| Loss for the year | (605,270) | (605,270)) | |||||||||||||
| Total comprehensive loss forthe year | (605,270) | (605,270) | |||||||||||||
| Issue of shares | 58,394 | 905,106 | - | - | - | - | 963,500 | ||||||||
| Expenses of share issue | - | (55,455) | - | - | - | - | (55,455) | ||||||||
| Share based payment charges | - | - | - | - | - | - | - | ||||||||
| Transfer on conversion ofloan notes | - | - | - | - | - | - | - | ||||||||
| Total other movements | 58,394 | 849,651 | - | - | - | - | 908,045 | ||||||||
| At 31 December 2018 | 3,038,605 | 20,569,844 | 286,000 | 94,884 | - | (21,753,522) | 1,949,812 | ||||||||
The following describes the nature and purpose of each reserve within owners’ equity:
| Reserve | Description and purpose | ||
| Share capital | amount subscribed for share capital at nominal value | ||
| Share premium | amount subscribed for share capital in excess of nominal value, net of | ||
| allowable expenses | |||
| Shares to be issued | share capital to be issued in connection with the acquisition of | ||
| Netcom | |||
| Share option reserve | cumulative charge recognised under IFRS 2 in respect of share-based | ||
| payment awards | |||
| Loan note reserve | equity element of convertible loan notes | ||
| Retained earnings | cumulative net gains and losses recognised in the statement of | ||
| comprehensive income | |||
| Consolidated Statement of Cash Flows For the year ended 31 December 2018 | |||||||
| 2018 | 2017 | ||||||
| £ | £ | ||||||
| Cash flows from operating activities | |||||||
| Loss before taxation | (648,020) | (6,177,014) | |||||
| Adjustment for: | |||||||
| Depreciation | - | 1,806 | |||||
| Impairment charge | 194,401 | 5,726,445 | |||||
| Share based payment charge | - | 9,034 | |||||
| Shares issued in settlement of liabilities | - | 67,500 | |||||
| Finance costs | 17,459 | 44,478 | |||||
| (436,160) | (327,751) | ||||||
| Changes in working capitalReceivables
| 1,077 | (36,133) | |||||
| Payables | 98,048 | 72,101 | |||||
| Net cash used in operating activities | (309,483) | (287,577) | |||||
| Cash flows from investing activities | |||||||
| Expenditure on exploration and evaluation assets | (224,095) | (548,766) | |||||
| Sale of listed investments | 5,732 | - | |||||
| Net cash used in investing activities | (218,363) | (548,766) | |||||
| Cash flows from financing activities | |||||||
| Proceeds from share placement | 560,000 | 650,753 | |||||
| Issue costs | (25,455) | (60,900) | |||||
| Proceeds from loan (Note 18) | - | 200,000 | |||||
| Net cash from financing activities | 534,545 | 789,851 | |||||
| Net decrease in cash and cash equivalents | (20,853) | (50,698) | |||||
| Cash and cash equivalents at 1 January | 65,163 | 115,861 | |||||
| Cash and cash equivalents at 31 December | 44,310 | 65,163 | |||||
| Company Statement of Cash Flows For the year ended 31 December 2018 | ||||
| 2018 | 2017 | |||
| £ | £ | |||
| Cash flows from operating activities | ||||
| Loss before taxation | (605,270) | (6,006,511) | ||
| Adjustment for: | ||||
| Share based payment charge | - | 9,034 | ||
| Impairment charge | 454,745 | 5,730,587 | ||
| Shares issued in settlement of liabilities | - | 67,500 | ||
| Finance costs | 12,708 | 44,478 | ||
| (137,817) | (154,912) | |||
| Changes in working capital | ||||
| Receivables | 30,311 | (36,894) | ||
| Payables | 33,203 | (20,078) | ||
| Net cash used in operating activities | (74,303) | (211,884) | ||
| Cash flows from investing activities | ||||
| Advances to subsidiaries | (422,606) | (668,037) | ||
| Sale of listed investments | 5,732 | - | ||
| Net cash used in investing activities | (416,874) | (668,037) | ||
| Cash flows from financing activities | ||||
| Proceeds from share placement | 560,000 | 650,751 | ||
| Issue costs | (25,455) | (60,900) | ||
| Proceeds from loan (Note 18) | - | 200,000 | ||
| Net cash from financing activities | 534,545 | 789,851 | ||
| Net decrease in cash and cash equivalents | (6,569) | (90,070) | ||
| Cash and cash equivalents at 1 January | 10,809 | 100,879 | ||
| Cash and cash equivalents at 31 December | 4,240 | 10,809 | ||
**ENDS**
For further information, please visit the Company’s website www.armadalecapitalplc.com, follow Armadale on Twitter @ArmadaleCapital or contact:
| Enquiries: | |||
| Armadale Capital Plc Tim Jones, Company Secretary | +44 20 7236 1177 | ||
| Nomad and broker: finnCap Ltd Christopher Raggett / Max Bullen-Smith | +44 20 7220 0500 | ||
| Joint Broker: SVS Securities Tom Curran / Ben Tadd | +44 20 3700 0093 | ||
| Press Relations: St Brides Partners Ltd Isabel de Salis / Juliet Earl | +44 20 7236 1177 |
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