IRR.L Regulatory News (IRR)

30 March 2020

IronRidge Resources Limited

Interim Results

Transformational Pre and Post Period End

Strong Cash Position, Milestone Maiden MRE and Highly Successful Operational Period

IronRidge Resources Limited, (AIM: IRR, "IronRidge" or the "Company"), the African focussed minerals exploration company, is pleased to announce its unaudited interim results for the half year ended 31 December 2019.

A full copy of today's report (including tables and/or diagrams) is available through the Investor Centre of the Company's website (www.ironridgeresources.com.au) or via the following link: 

 http://www.rns-pdf.londonstockexchange.com/rns/0049I_1-2020-3-30.pdf

FINANCIAL AND CORPORATE HIGHLIGHTS:

Ø Exploration and evaluation expenditure during the period was A$5.6 million, resulting in an overall total ofA$30.3 million at period end with continued exploration programs conducted across the Company's projects in Ghana, Ivory Coast and Chad.

Ø Cash position of A$4.3 million at 31 December 2019.

Ø Binding Memorandum of Understanding ("MoU") with GeoDrill Limited (TSX: GEO, "GeoDrill") for a drilling for equity program of up to US$4 million, or 40,000m of drilling.

Ø Successful raising of approximately £2 million before expenses through a subscription for, and placing of, in aggregate, 20,000,000 new ordinary shares in the Company at a price of 10 pence per share (the "Issue Price").

Ø Appointment of Mr Tetsunosuke Miyawaki ("Teddy Miyawaki") to the Board as Non-Executive Director in July 2019.

Commenting, Vincent Mascolo, Chief Executive Officer of IronRidge, said:

"Our exploration and drilling activities in Africa over the period have been very successful. We are delighted with the progress the Company has made to date across our portfolio, with activities undertaken continuing to add value to each of the projects.

"The Company achieved a key milestone with the JORC compliant maiden Mineral Resource estimate at the Ewoyaa Lithium Project in Ghana and now looks forward to further derisking and developing this compelling project. In turn, the recent condtional acquisition of Joy Transporters Ltd, and the full ownership of the Saltpond and Cape Coast Portfolios, which offer high-priority targets adjacent to the Ewoyaa Project, represent a further exciting opportunity.

"We are highly encouraged by assay results received from our flagship Zaranou Gold Project in Côte d'Ivoire, which continue to reaffirm our belief of the potential for a significant gold discovery. Furthermore, the recently completed conditional acquisition of the Bodite and Bianouan gold licenses complement our Zaranou Project and represent a highly prospective ground holding, with significant drilling intersections and high-priority soil anomalies.

"In light of developments regarding COVID-19 IronRidge has acted to adjust its activities and is winding down drilling and field programmes a few weeks earlier than originally planned before the upcoming wet season, in order to ensure the health and safety of all of its employees and contractors at this time. The Company's personnel are transitioning to working from home and sites will remain secured until safe working conditions can be re-established.

"Whilst the Company is winding down activities on the ground, other work continues with the analysis of soils and auger drilling samples submitted to date, review of results from field programmes and planning for further field programmes and drilling campaigns. Furthermore, the Company's range of corporate activities, including progressing the recently announced conditional acquisitions along with other new opportunities, will continue unabated.

"We will ensure that shareholders remain appraised of the Company's plans as they continue to evolve. We remain confident in our strategy for developing and sustaining value for the Company and its shareholders and look forward to updating the market with our progress to this regard in due course."

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

For any further information please contact:

Competent Person Statement

Information in this report relating to the exploration results is based on data reviewed by Mr Lennard Kolff (MEcon. Geol., BSc. Hons ARSM), Chief Geologist of the Company. Mr Kolff is a Member of the Australian Institute of Geoscientists who has in excess of 20 years' experience in mineral exploration and is a Qualified Person under the AIM Rules. Mr Kolff consents to the inclusion of the information in the form and context in which it appears.

Information in this report relating to metallurgical results is based on data reviewed by Mr Noel O'Brien, Director of Trinol Pty Ltd. Mr O'Brien is a Fellow of the Australasian Institute of Mining and Metallurgy (AusIMM) and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the December 2012 edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" (JORC Code). Mr O'Brien consents to the inclusion in the report of the matters based upon the information in the form and context in which it appears.

Information in this report relating to Mineral Resources was compiled by Shaun Searle, a Member of the Australian Institute of Geoscientists. Mr Searle has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Searle is a director of Ashmore. Ashmore and the Competent Person are independent of the Company and other than being paid fees for services in compiling this report, neither has any financial interest (direct or contingent) in the Company.

CHAIRMAN STATEMENT:

"Results from our flagship Zaranou Gold Project in Côte d'Ivoire have identified the potential for a future large-scale, open pit gold mine and, unsurprisingly, this has attracted the interest of a number of major mining companies. 

In Ghana, the consolidation of our interests through acquisitions and the recent establishment of the maiden Mineral Resource estimate at the Ewoyaa Lithium Project has also attracted the interests of several potential strategic partners, targeting taking the project through to production. Discussions to this effect are ongoing.

With regards to the unprecedented COVID-19 outbreak, the wellbeing of our staff remains our ultimate priority.

Nevertheless the Company's range of corporate activities continues.

We are delighted with the positive momentum of the continued field and drilling programmes across the Company's African projects and we will update the market with our progress in due course.

We remain highly encouraged by the current status of each of the projects in our portfolio and we look forward to recommencing operations on-site as soon as we are able."

OPERATIONAL HIGHLIGHTS:

Cote D'Ivoire - Gold and Lithium

Zaranou License:

Ø Field mapping, sampling, aeromagnetics interpretation and drone imagery defined over 47km strike of highly prospective Shear Zone with coincident alluvial gold workings along its entirety and a 16km long high-priority hard-rock artisanal mining corridor within the central portion of the license area (refer Figure 2).

Ø Field teams completed detailed face mapping and channel sampling over 15 large scale and 130 small scale artisanal pits for a total 145 primary hard-rock artisanal mining pits within the 16km strike of hard-rock workings for a total of 324 reconnaissance channel and rock chip samples (refer Figure 3).

Ø Multiple high-grade channel sampling results including 6m @ 3.67g/t gold, 3m @ 4.13g/t gold and 4m @ 2.39g/t gold were returned with gold mineralisation encountered both within the schists and quartz veins. Rock-chip sampling returned multiple high-grade results including 69.6g/t, 48.8g/t, 25.3g/t and 20.5g/t gold in both schists and quartz vein material.

Bianouan and Bodite Portfolio:

Ø Results received for 115 AC drill holes for 3,903m of drilling completed over the Bianouan and Bodite licenses.

Ø A total of 1,415m of AC drilling for 28 holes to an average depth of 50m were completed at Bianouan. Drilling was designed to test coincident soils, auger and trenching gold geochemical anomalies at depth. At Bodite a total of 2,488m for 37 AC holes were drilled to an average depth of 30m to test the highest priority soil geochemical anomaly.

Ø A total of 2,123 samples, including quality assurance/quality control ("QAQC") samples, were submitted to ALS laboratory for assay and passed internal QAQC checks. All results are reported at 0.15g/t gold cut-off with maximum 2m of internal dilution.

Ø High-grade results including 12m @ 5.87g/t gold (including 2m @ 33.8g/t gold), 8m @ 1.29g/t gold (including 2m @ 3.17g/t gold) and 1m @ 3.13g/t gold at end of hole were returned at Bianouan (refer Appendix Table 1).

Ø At Bodite results returned broad, low level gold anomalism with best results including 10m @ 0.3g/t (including 2m @ 0.59g/t gold) from 12m and 22m @ 0.21g/t gold from surface. Results also returned narrow intervals including 2m @ 9.01g/t gold from 32m and 2m @ 2.74g/t gold from 14m (refer Appendix Table 2).

Vavoua Portfolio:

Ø At Vavoua, auger drilling commenced over high priority coincident geochemical and geophysical targets. Southern Geoscience Consultants of Perth, Western Australia completed detailed litho-structural interpretation, which in-conjunction with field mapping and sampling results, defined fourteen (14) targets of which four (4) are priority one targets.

Ø A total of 3,000 first phase regional geochemical auger holes on a nominal 800m x 50m grid were commenced over the Priority one targets along strike from the 2.15Moz Abujar project (refer Figure 1 and Figure 5).

Kineta and Marahui Portfolio:

Ø At Kineta, the Company reported multiple narrow gold intersections in trenching at a 0.12g/t gold cut-off with maximum 2m of internal dilution, including 2m @ 4.04g/t gold and 6m @ 0.24g/t gold.

Ø At Marahui, a total of 5,129 soil samples, including QA/QC samples, were collected on initial 400m x 25m spaced lines and subsequently infilled to 200m and 100m line spacing across prospective trends. Significant soil anomalies between 30ppb to 2,500ppb gold were defined over broad 2km long by 100m to 200m wide north-northeast trending zones.

Ghana - Lithium

Ø Completed its third phase 12,669m Reverse Circulation ("RC") drilling programme and 350m diamond core ("DD") drilling programme at the Ewoyaa, Abonko and Kaampakrom projects, collectively the Ewoyaa Project.

Ø Multiple high-grade drilling intersections were returned at a 0.4% Li2O cut-off and maximum 4m of internal dilution, including highlights):

· 76m @ 1.81% Li2O from 43m and 33.5m @ 1.3% Li2O from 124m

· 69.74m @ 1.45% Li2O from 15.86m and 31.4m @ 1.78% Li2O from 92.6m

· 40m @ 1.45% Li2O from 54m

· 34m @ 1.43% Li2O from 76m

· 31m @ 1.5% Li2O from 72m

· 28m @ 1.49% Li2O from 37m

· 19m @ 1.82% Li2O from 103m

Ø Discovered new pegmatites at the Kaampakrom, Ndasiman and Krofo targets; all outside the current area of resource drilling.

Ø Continued to engage Ghanaian consultancy NEMAS for baseline studies over the project area and received a draft copy report of the wet season environmental and social baseline studies completed. Dry season baseline studies are now underway.

Ø Completed bulk sample test-work and delivered a high-grade spodumene concentrate using gravity separation.

Chad - Gold

Ø Ground based Induced Polarization surveys including Gradient Array and Dipole-Dipole completed by Terratec Geophysical Services over the Dorothe prospect.

Ø Multiple coincident resistivity and chargeability anomalies defined that coincide with the high-grade gold trenching anomalies; interpreted to be associated with quartz veining or silica alteration; typical host for gold mineralisation and possibly disseminated sulphides respectively.

Ø Highest priority geophysical anomaly associated with the Main Vein Zone; 1km long low resistivity mineralised vein zone with coincident chargeability anomaly dipping steeply to the east.

Ø Additional flat lying coincident resistivity anomalies with weaker chargeability anomalies associated with shallow west dipping sheeted vein systems. 

POST PERIOD-END HIGHLIGHTS:

Cote D'Ivoire - Gold and Lithium

Ø Entered into an agreement with Major Star to acquire 100% of the Bodite and Bianouan gold licenses, which gives IronRidge full ownership of a highly prospective gold exploration portfolio in Côte d'Ivoire.

Ø The acquisition of the Bodite and Bianouan Gold licenses in return for the issue of 1,550,388 shares in IronRidge at 18 pence per share; a significant premium to the share price.

Ø Reported multiple large-scale gold soil anomalies up to 4 kilometres long and additional high-grade and broad gold intersections from drilling assay results received for the first phase exploration programme completed at the Zaranou Gold Project.

Ø At Zaranou, the Company completed a first pass exploration drill programme for a total of 7,448m of Air-Core ("AC") in 151 holes and 1,593m of RC in 10 holes along seven drill traverses over 8km strike. Drilling intersected multiple broad and high-grade intervals at a 0.2g/t gold cut-off and maximum 2m of internal dilution in both weathered and fresh material for every traverse completed over the 8km strike drill tested to date. Highlights include:

· 6m @ 15.11g/t gold from 26m, including 2m @ 36g/t and 2m @9.29g/t

· 22m @ 3.39g/t gold from 8m, including 4m @ 13.55g/t and 4m @ 3.96g/t

· 6m @ 6.72g/t gold from surface, including 2m @ 15g/t and 2m @ 3.72g/t

· 6m @ 6.44g/t gold from 132m, including 2m @ 8.81g/t and 2m @ 9.18g/t

· 4m @ 5.16g/t gold from 110m, including 2m @ 9.43g/t

· 18m @ 0.31g/t gold from 32m, including 2m @ 0.58g/t

· 14m @ 0.66g/t gold from 128m, including 2m @ 2.72g/t

Ø At Zaranou, the Company completed 800m line spaced soils across the entire 47km strike length of prospective structure and returned multiple high-priority soil anomalies for follow-up.

Ghana - Lithium

Ø 14.5Mt at 1.31% Li2O maiden Mineral Resource estimate (reported in accordance with the 2012 JORC Code) in Indicated and Inferred status announced at the Ewoyaa Project.

Ø Successful battery grade lithium conversion trials conducted on coarse spodumene concentrate samples taken from the Ewoyaa Lithium Project; lithium carbonate at a grade of 99.92% lithium carbonate (Li2CO3) was produced, which exceeds most published specifications for battery grade quality.

Ø Entered into the agreement with Joy Transporters Ltd ("Joy Transporters") for the acquisition of 100% of the share capital of Joy Transporters giving IronRidge full ownership of a further and highly prospective lithium exploration portfolio in Ghana (the "Saltpond and Cape Coast Portfolio").

Ø The acquisition of Joy Transporters is in return for the issue of 2,360,035 shares in IronRidge Resources at a price of 22.5 pence per Ordinary Share; a significant premium to the share price.

FINANCIAL HIGHLIGHTS:

CONSOLIDATED statement of financial position

As at 31 December 2019

The above consolidated statement of financial position should be read in conjunction with the accompanying notes.

CONSOLIDATED statement of changes in equity

For the half year ended 31 December 2019

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

CONSOLIDATED statement of cash flows

For the half year ended 31 December 2019

The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.

Notes to the financial statements

For the half year ended 31 December 2019

Note 1: Summary of Significant Accounting Policies

Corporate information

The consolidated financial report of IronRidge Resources Limited (the "Company") for the half-year ended 31 December 2019 was authorised for issue in accordance with a resolution of the Directors on 30 March 2020. IronRidge Resources Limited (the Parent) is a public company limited by shares incorporated and domiciled in Australia. The Company's registered office is located at Level 27, 111 Eagle Street, Brisbane, QLD 4000.

Basis of preparation

This half-year financial report for the period ended 31 December 2019 prepared in accordance with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001, comprises the Company and its subsidiaries (together referred to as the "Group").

The half-year financial report does not include all notes of the type normally included within the annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the Group as the full financial report.

Accordingly, this half year financial report is to be read in conjunction with the annual financial report for the year ended 30 June 2019 and any public announcements made by the Company during the half-year reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

The accounting policies and methods of computation are the same as those adopted in the most recent annual financial report.

Going concern

The half year financial report has been prepared on a going concern basis which contemplates the continuity of normal business activities and the realisation of assets and discharge of liabilities in the ordinary course of business. The Group has not generated revenues from operations.

In addition, as detailed in Note 9, subsequent to reporting date, the World Health Organisation (WHO) announced a global health emergency because of a new strain of coronavirus (COVID-19) and the risks to the international community as the virus spreads globally. Because of the rapid increase in exposure globally, the WHO classified the COVID-19 outbreak as a pandemic. These events are having a significant negative impact on world stock markets, currencies and general business activities which could negatively impact the Company in a material adverse manner.

As such, the Group's ability to continue to adopt the going concern assumption will depend upon a number of matters including subsequent successful raisings in the future of necessary funding and the successful exploration and subsequent exploitation of the Group's tenements.

These conditions give rise to material uncertainty which may cast significant doubt over the Group's ability to continue as a going concern. The Directors believe that the going concern basis of preparation is appropriate as the Directors believe there is sufficient cash available for the Group to continue operating until it can raise sufficient further capital to funds its ongoing activities. The Group has a proven ability to raise the necessary funding or settle debts via the issuance of shares, as evidenced by the raising of $4,509,799 during the half year ended 31 December 2019.

Should the Group be unable to continue as a going concern, it may be required to realise its assets and extinguish its liabilities other than in the ordinary course of business, and at amounts that differ from those stated in the financial report.

Notes to the financial statements

For the half year ended 31 December 2019

Note 1: Summary of Significant Accounting Policies (Continued)

New or amended Accounting Standards and Interpretations adopted

The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ("AASB") that are mandatory for the current reporting period.

Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.

The following Accounting Standards and Interpretations are most relevant to the consolidated entity:

AASB 16 Leases

The Group has adopted AASB 16 from 1 July 2019. The standard replaces AASB 117 'Leases' and for lessees eliminates the classifications of operating leases and finance leases. Except for short-term leases and leases of low-value assets, right-of-use assets and corresponding lease liabilities are recognised in the statement of financial position. Straight-line operating lease expense recognition is replaced with a depreciation charge for the right-of-use assets (included in operating costs) and an interest expense on the recognised lease liabilities (included in finance costs). In the earlier periods of the lease, the expenses associated with the lease under AASB 16 will be higher when compared to lease expenses under AASB 117. For classification within the statement of cash flows, the interest portion is disclosed in operating activities and the principal portion of the lease payments are separately disclosed in financing activities. The adoption of this standard did not have a material impact of the Group's financial statements for the period ended 31 December 2019.

Notes to the financial statements

For the half year ended 31 December 2019

Note 2: Segment Information

The Group has identified its operating segment based on the internal reports that are reviewed and used by the Board of Directors (chief operating decision makers) in assessing performance and determining the allocation of resources. The Group is managed primarily on a geographic basis, that is, the location of the respective areas of interest (tenements) in Queensland, and Gabon. Operating segments are determined based on financial information reported to the Board for the Group as a whole. The Group does not yet have any products or services from which it derives an income.

Accordingly, management currently identifies the Group as having only one reportable segment, being exploration for base and precious metals. The financial results from this segment are equivalent to the financial statements of the Group. There have been no changes in the operating segments during the half year.

Geographical information

Note 5: Earnings Per Share (EPS)

Notes to the financial statements

For the half year ended 31 December 2019

Ordinary shares participate in dividends and the proceeds on winding up the Company. At shareholder meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on show of hands.

(1) On 3 October 2019, 1,186,806 £0.14 (equivalent to $0.26) ordinary shares were issued to a contractor in partial consideration for services rendered.

(2) On 7 November 2019, 20,000,000 £0.10 (equivalent to $0.19) ordinary shares were issued pursuant to a private placement.

(3) On 14 November 2019, 1,094,432 £0.1329 (equivalent to $0.25) ordinary shares and 638,333 £0.13 (equivalent to $0.25) ordinary shares were issued to a contractor in partial consideration for services rendered.

(4) On 16 December 2019, 150,000 £0.10 (equivalent to $0.19) ordinary shares were issued by way of employee remuneration.

(c) Options

As at 31 December 2019, there were 58,200,000 unissued ordinary shares of IronRidge Resources Limited under option and 600,000 options exercised under the company funded loan plan (treated as an in-substance options) held as follows:

(1) Prior to expiry on 20 January 2019, modification was made to extend the expiry date to 20 January 2020 through a loan funded share plan.

During the half year there were no options exercised.

Notes to the financial statements

For the half year ended 31 December 2019

Note 6: Issued Capital (continued)

(d) Performance Rights

As at 31 December 2019, there were 12,150,000 of performance rights on issue held as follows:

During the half year no performance rights matured and converted to ordinary shares.

Note 7: Share based payments

The expense recognised for share based payments received during the half year is shown in the table below:

Employee share option plan (ESOP)

Share options are granted to employees. The employee share option plan is designed to align participants' interests with those of shareholders by increasing the value of the Company's shares.

When a participant ceases employment after the vesting of their share options, the share options are forfeited after 90 days unless cessation of employment is due to termination for cause, whereupon they are forfeited immediately or death. The Company prohibits KMP from entering into arrangements to protect the value of unvested ESOP awards.

Each option can be exercised from vesting date to expiry date for one share with the exercise price payable in cash.

Notes to the financial statements

For the half year ended 31 December 2019

Note 7: Share based payments

Options granted during the period

On 29 November 2019, 11,250,000 IronRidge Resources Ltd share options were granted to Directors under the Employee Share Option Plan. The options are to take up one ordinary share in IronRidge Resources at £0.25 per share. The options vested immediately and are due to expire on 29 November 2021.

On 16 December 2019, 12,700,000 IronRidge Resources Ltd share options were granted to employees under the Employee Share Option Plan. The options are to take up one ordinary share in IronRidge Resources at £0.25 per share. The options vested immediately and are due to expire on 12 December 2021.

Performance rights issued during the period

There were no performance rights issued during the half year ended 31 December 2019.

Note 8: Contingent Assets and Contingent Liabilities

The Directors are not aware of any contingent assets or contingent liabilities at the date of this report.

Note 9: Subsequent Events

On 20 January 2020, 854,643 ordinary shares were issued to a contractor in partial consideration for services rendered.

On 28 January 2020, the Company announced a maiden Mineral Resource estimate ("MRE") of 14.5Mt at 1.31% Li2O for the Ewoyaa, Abonko and Kaampakrom deposits (combined the "Ewoyaa Project") within the Cape Coast Lithium Portfolio in Ghana, West Africa. The Mineral Resource is reported in accordance with the JORC Code (2012).

On 2 March 2020, the Company announced that it had entered into an agreement with Major Star to acquire 100% of the Bodite and Bianouan gold licenses for the issue of 1,550,388 ordinary shares at an issue price of £0.18, a significant premium to the current share price, which gives IronRidge full ownership of a highly prospective gold exploration portfolio in Côte d'Ivoire.

On 12 March 2020, the Company announced that it had entered into an agreement with Joy Transporters Ltd for the acquisition of 100% of the share capital of Joy Transporters giving IronRidge full ownership of a further and highly prospective lithium exploration portfolio in Ghana for the issue of 2,360,035 ordinary shares at an issue price of £0.225, a significant premium to the current share price.

The full impact of the COVID-19 outbreak continues to evolve at the date of this report. In light of COVID-19, the Company has acted to adjust its activities and is winding down drilling programmes a few weeks earlier than originally planned before the upcoming wet season, in order to ensure the health and safety of all of its employees and contractors at this time. The Company's personnel are transitioning to working from home and sites will remain secured until safe working conditions can be re-established. Other work continues with the review and analysis of results from field programmes, processing of drill results yet to be received, preparation and planning for further field programmes and drilling campaigns. Furthermore, the Company's range of corporate activities, including progressing the recently announced acquisitions, will continue unabated.

Given the continued evolution of the COVID-19 outbreak and the various governmental restrictions being imposed to curb its spread, the Company is presently not able to estimate a timeframe for the normal resumption of its operations and financial condition. The Board will continue to monitor the situation and tailor the Company's operating model to ensure its continued viability until the restrictions have been lifted.

There have been no other events since the end of the half year that impact the financial report as at 31 December 2019.