17 Jan 2022 07:00
17 January 2022
Pembridge Strategy
Unaudited Balance Sheet as at 31 December 2021 &
Presentation on Strategy
THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY THE COMPANY TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014 AS AMENDED BY REGULATION 11 OF THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS 2019/310. UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA REGULATORY INFORMATION SERVICE, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.
London, United Kingdom - Pembridge Resources plc (LSE: PERE) ("Pembridge" or the "Company") is pleased to announce that the Board of Directors have reviewed strategic options for the future development of Pembridge and approved the strategy presented by management.
Highlights
· Equity of Company positive as at 31 December 2021 based on unaudited balance sheet
· Strategy approved by board of directors of Pembridge sets out target to expand investment portfolio focused on investments in the de-carbonisation of the energy market
· Equity of Company equivalent to 7.8p per share on fully diluted share capital after convertible loan conversion into equity or 10.5p per share without conversion
Unaudited Balance Sheet as at 31 December 2021
The Company's unaudited balance sheet as at 31 December 2021 shows equity of $10.9 million, which is a significant improvement on the negative equity situation as at 31 December 2020 after recognising unaudited Total Comprehensive Income of $20.6 million for 2021.
Unaudited Figures | 31 December 2021 | 31 December 2020 | ||
Assets | $'000 |
| $'000 | |
Investments | 16,036 |
| 9,202 | |
Receivable from Minto re Capstone | 5,000 |
| 0 | |
Receivable from Minto re funding | 4,106 |
| 3,802 | |
Cash and prepayments | 331 |
| 42 | |
| 25,473 |
| 13,046 | |
Liabilities |
|
|
| |
Borrowings and other payables | (9,579) |
| (5,433) | |
Deferred consideration to Capstone | (5,000) |
| (18,571) | |
| (14,579) |
| (24,004) | |
Net Assets | 10,894 |
| (10,958) | |
Equity |
|
|
| |
Share capital | 1,212 |
| 965 | |
Share premium and reserves | 9,682 |
| (11,923) | |
| 10,894 |
| (10,958) | |
Management Commentary
Investments | The Unaudited Investments figure of $16.0 million as at 31 December 2021 shows an increase of $6.8m on the prior year as a result of investing $3 million in the capital raise undertaken by Minto Metals Corp. ("Minto") during its listing on the TSXV in Q4 2021. The balance of $3.8m is attributable to the increase in the market valuation of the Company's investment in Minto. |
Receivable from Minto | The unaudited receivable from Minto includes C$4 million arising from funding by Pembridge of Minto Surety Account, plus accrued interest on this receivable, which are to be repaid on a quarterly basis during 2022. Included are also other receivable amounts of $0.4 million. |
Unaudited Share premium and reserves | Unaudited share premium and reserves of $9.7 million in the Company's unaudited balance sheet as at 31 December 2021 are as a result of 2021 unaudited Total Comprehensive Income of $20.6 million, of which $3.8 million is represented by an increase in the fair market valuation of the Company's investment in Minto and $18.6 million arising from Minto funding payment to Capstone Mining Corporation of the Minto acquisition price. |
Deferred consideration to Capstone | The Minto acquisition from Capstone purchase price amounted to $20 million. As at 31 December 2021 $15 million of this amount has been paid to Capstone and the remaining $5 million are to be paid by January 2023. |
Equity value per share | If the $3 million convertible loan made to the Company in June 2021 is converted into equity, total equity would be $13.9 million (£10.2 million at exchange rate of £:USD 1.37) which is equivalent to 7.8p per Pembridge share based on fully diluted share capital of 130.2 million shares. Without conversion of the convertible loan into equity, total diluted share capital would stand at 103.7 million Pembridge shares with equity of $10.9 million being equivalent to 10.5p per share.
|
Strategy
The Company set out its strategy in 2019 as follows:
1. Strengthen Pembridge so that it can meet its financial obligations until cash inflows commence from the Minto mine;
2. Bring the Minto mine into operation, establish its management team and confirm in a in a new 43-101 technical report that the life of the mine can be extended to 8 years;
3. Provide Minto with the capital needed to implement improvements, expand exploration and increase production; and
4. Identify new projects that the Company could invest in.
Following Minto's listing on the TSXV and C$31 million capital raise for that transaction and the publication of Minto's updated 43-101 Preliminary Economic Assessment Technical Report, the Company now believes that Minto is in a robust financial position and that the first three phases of the strategy outlined above have been fulfilled.
Investing in New Projects
Accordingly, the Company has approved a strategy of identifying new projects to invest in, that can deliver further value to its shareholders. The Company see a number of opportunities in the de-carbonisation of the energy market. To that extent it will review a wide range of projects that can range from mining of commodities related to the de-carbonisation of the energy market through to renewable energy projects.
Investment Criteria
The approved strategy sets out key investment criteria guidance based on which potential projects are to be evaluated. The Strategy sets out preference for projects that are in production or close to production stage and have technical reports confirming resources and/or reserves. The key investment criteria approved in the Company's strategy are for each investment not to exceed £15 million and in all cases equity stakes acquired to be above 10% in projects with IRR above 12% and preference for projects with NPV8% above $30 million.
Projects in copper mining will be considered as long as they have minimum annual production of 10 million lbs, minimum life of mine 7 years, and maximum All In Sustaining Cost (AISC) of $2.65/lb. Projects in gold mining will be considered as long as they have minimum annual production of 10,000 oz, minimum life of mine 7 years, and maximum AISC of $800/oz.
Funding New Projects
Pembridge expects to receive C$4 million from Minto during 2022, with the first payment of C$1 million at the end of Q1 2022, being the repayment of historic advances by Pembridge into the Minto surety account. Further cashflows are expected into the Company in due course resulting from the payment of dividends, based on its 11.2% economic interest in Minto. Pembridge's proportional share of the overall project cashflows from the current mine life at Minto, based on its shareholding, are expected to be US$17M to US$30M (assuming copper price range of US$3.10 to US$3.75 per tonne and including receivable of $4.1 million from Minto). These cashflows, which are dependent on the dividend policy of Minto, are expected to provide significant funding to advance any new projects that Pembridge invests in.
[The strategy presentation is available through the attached link and on the Company's website]
www.pembridgeresources.comhttp://www.rns-pdf.londonstockexchange.com/rns/5591Y_1-2022-1-16.pdf
Gati Al-Jebouri, Chief Executive Officer and Chairman of the Board of Pembridge said:
"This is an exciting time for Pembridge. Having achieved what, we set out to do with our investment in Minto Metals Corp. we are now in a position to consider the future of growing Pembridge itself. Our single asset portfolio is a very strong basis for growing Pembridge by identifying and investing in new investments that will add value to our company.
In the Strategy Presentation that we have released today, we have set out the nature of projects that we are looking to invest in, and what we would look for in such projects in the copper mining, gold mining, oil and gas and renewable energy sectors. I look forward to updating the market as soon as we identify a project that meets our investment criteria."
Cautionary Statement
This News Release includes certain "forward-looking statements" which are not comprised of historical facts. Forward-looking statements include estimates and statements that describe the Company's future plans, objectives or goals, including words to the effect that the Company, or management, expects a stated condition or result to occur. Forward-looking statements may be identified by such terms as "believes", "anticipates", "expects", "estimates", "may", "could", "would", "will", or "plan". Since forward-looking statements are based on assumptions and address future events and conditions, by their very nature they involve inherent risks and uncertainties. Although these statements are based on information currently available to the Company, the Company provides no assurance that actual results will meet management's expectations. Risks, uncertainties and other factors involved with forward-looking information could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information. Forward-looking information in this news release includes, but is not limited to, the Company's intentions regarding its objectives, goals or future plans and statements. Factors that could cause actual results to differ materially from such forward-looking information include, but are not limited to, the Company's ability to predict or counteract the potential impact of COVID-19 coronavirus on factors relevant to the Company's business, failure to identify additional mineral resources, failure to convert estimated mineral resources to reserves with more advanced studies, the inability to eventually complete a feasibility study which could support a production decision, the preliminary nature of metallurgical test results may not be representative of the deposit as a whole, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, political risks, uncertainties relating to the availability and costs of financing needed in the future, changes in equity markets, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of projects, capital, operating and reclamation costs varying significantly from estimates and the other risks involved in the mineral exploration and development industry, and those risks set out in the Company's public documents. Although the Company believes that the assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such information, which only applies as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law.
ENDS
NOTES TO EDITORS
Pembridge is a mining company that is listed on the standard segment of the Official List of the FCA and trading on the main market for listed securities of London Stock Exchange plc. Pembridge has an investment in Minto Metals Corp, a British Columbia incorporated business listed on the TSX Venture Exchange under the symbol "MNTO" that operates the Minto mine in Yukon, Canada.
About Minto Metals Corp
Minto Metals Corp operates the underground copper-gold-silver mine located in central Yukon, approximately 240 kilometres north of the capital Whitehorse along the Klondike Highway. In excess of US$350 million of capital expenditure has been invested into Minto operations since site construction began in 2006. The Minto mine was in continuous production between 2007 and 2018, when the mine was placed onto temporary care and maintenance. Pembridge acquired the Minto mine from Capstone Mining Corporation in June 2019 and restarted operations in October 2019.
Enquiries:
Pembridge Resources plc: +44 (0)7905 125740
Gati Al-Jebouri, Chief Executive Officer and Chairman of the Board
David James, Chief Financial Officer
Tavira Securities - United Kingdom: +44 (0)20 7100 5100
Jonathan Evans