Last checked at 30 Jun 2020 10:48
Trading Symbols
AIM: UFO FWB: I3A1
30 June 2020
Alien Metals Ltd("Alien" or "the Company")
Financial Results for the Year Ended 31 December 2019
Alien Metals Limited, the AIM quoted mining exploration and development company, announces the release of its audited, financial results for the year ended 31 December 2019.
The Company's full annual report including all notes to the accounts, is being sent to shareholders who requested a copy (alternatively, shareholders will receive notification by post of the availability of the annual report), from https://www.alienmetals.uk/investors/financials-mda.
Extracts of the Annual Report are set out below:
Chair & Chief Executive's statement
2019 marked a year of growth as the Company, headed by a high-quality geological team, focused on its strategy to advance its assets up the value curve; with new prospects in Western Australia added to our diversified portfolio, they lay the groundwork for 2020.
The Company's Technical Director, Bill Brodie Good, with over 25 years of experience in mineral exploration, embarked on an acquisition-led strategy. We focused on strengthening our portfolio of diversified assets to encompass silver and precious metals projects in Mexico and newly acquired silver and iron ore projects in Western Australia. Reducing overheads is a practice from previous years that has stayed with us. In 2019, we continued to bring value by acquiring or entering into joint ventures for projects within an established mining community that has a stable political background and assures a strong operation control.
During 2019, we are delighted to have acquired the Brockman and Hancock Ranges high grade iron ore projects with the potential of Direct Shipping Ore (DSO). High-grade iron ore (or 60%+ Fe) is highly sought after by steel mills as it reduces energy cost, increases efficiency and overall, reduces costs of production. We are pleased to have additionally broadened our silver portfolio by acquiring the historic Elizabeth Hill silver mine with significant unmined resources based on a 1999 resource estimation report. Both these acquisitions are in the region of Pilbara, Western Australia.
We are committed to delivering on the strategy of advancing our projects through the exploration phases with our high quality geological team's expertise while seeking to identify a suitable partner for an earned-in agreement or a joint ventured at a price which will not overly dilute existing Shareholders. We intend, in joining with a partner, to ensure the costs and capital commitments are minimised.
We believe that in order to successfully grow this vision, we need to focus on channeling the funds invested in it towards exploration activity and business development, and this is at the heart of everything we do.
The Company's work to identify suitable partners for a joint venture or earned-in agreement include our Mexican silver projects and gold and copper project. Alien works based on a strict selection criteria centred on assessing risk, appropriate scale and likely upside.
We look forward to sharing further results from our exploration work at our various sites following the completion of our Placing earlier in 2020 to fund work programmes and support business activities.
Business overview
Strategy and business model
Alien Metals' objective is to create a multi-commodity portfolio of mining projects in jurisdictions with established mining communities, stable political backgrounds, and where strong operational controls can be assured.
The Group has operated in Mexico for over ten years during which time it has established long-term relationships with local government, communities, and key stakeholders.
Alien Metals' geological experts assess and identify projects for potential mineralisation. Wherever possible, the projects are acquired on a low-cost option basis whilst preliminary exploration is undertaken to assess the merits of further work.
The Company routinely evaluates mining projects in jurisdictions other than Mexico. During 2019, this included Namibia, West Africa and Australia.
Where preliminary studies evidence sufficient mineralisation, increasingly comprehensive studies will be undertaken with a view to delineating a compliant mineral resource estimate in readiness of potential sale of the asset to a producing mining company, at which time a significant premium over its acquisition and development cost may be justified.
Financial highlights
All dollar amounts in this annual report and financial statements are US dollars, unless stated otherwise.
As at 31 December 2019, the Group had total assets of $0.7 million (2018: $0.7 million) of which $0.2 million (2018: $0.3 million) was cash. The Group had total liabilities of $0.1 million (2018: $0.1 million) of which $0.1 million were current liabilities (2018: $0.1 million).
In the year ended 2019 the Group made an operating loss of $1.0 million (2018: $1.5 million) and a loss per share of 0.1 cents (2018: 0.3 cents).
Overview of operations
During 2019, the Group completed its initial high level exploration programme over its portfolio of mining concessions covering an area of over approximately 1,500 hectares, to develop and direct future exploration work.
As at 31 December 2019, the Company held 12 fully owned mining concessions and options to acquire an interest in 3 additional projects.
Copper project
Donovan 2 project
The Company's 750 hectare Donovan 2 flagship project is located to the southeast of Zacatecas city and in close proximity to Alien's portfolio other wholly owned projects along the Mexican precious and base metals belt. The Teck Resources San Nicolás copper zinc deposit and Minera Frisco El Coronel gold mine are both located within 25km.
Alien Metals' preliminary exploration programme on this project, has identified several areas that exhibit pathfinder indicators of volcanogenic massive sulphide (VMS)-style mineralisation, and ground magnetic geophysics and induced polarisation have confirmed indications of sub-surface VMS-style mineralisation.
Silver projects
Elizabeth Hill project (Option to acquire 100%)
The Elizabeth Hill project is situated approximately 45 km south of Karratha in the 61,000 km2 Achaean Pilbara Block of the Pilbara Craton. The Project is well located, lying 40 km from the deep-water port at Dampier and 8 km from rail infrastructure.
The Elizabeth Hill Silver Project was mined between 1998 and 2000 via underground mining, primarily between the 62 m and 102 m levels. Silver production totalled approximately 16,800 tonnes of ore grading 2,195 g/t Ag (70.24 oz/t Ag) generating 1,170,000 ounces Ag, including some very large specimens of native silver.
Los Campos project
The Los Campos project comprises four concessions covering an area of approximately 500 hectares and is located on the south side of the city of Zacatecas and bounds the Endeavour Silver El Compas gold mine. The property encompasses at least two known veins: the Los Campos vein and the San Rafael vein, and is easily accessible 15-minutes' drive from the centre of the City of Zacatecas.
The Los Campos vein system has been developed along a strike distance of 3.3km and to depths exceeding 100m. Our geological mapping and sampling discovered additional veins running either parallel or nearly parallel to the Los Campos vein.
San Celso project
The 88 hectare San Celso project is located in the historic mining district of Pánfilo Natera- Ojocaliente and is surrounded by other concessions to the south and west. It encompasses two veins: the San Celso and Las Cristinitas veins. Work carried out during 2018 resulted in the surface extension of these veins of 800 metres. Samples taken to date have evidenced grades of up to 395g/t Ag, 13,700ppm Pb, and 13,900ppm Zn.
La Africana project
The La Africana project is a strategically located project covering approximately 15 hectares, 3 kilometres south west of Pánfilo Natera. The project encompasses a past-producing mine and work carried out on the project evidences significant zones of high-grade silver mineralisation over respectable widths.
Other silver mining concessions
Alien Metals holds two additional concessions not otherwise grouped into project groupings, covering almost 142 hectares. These concessions were acquired in 2006 because of their strategic position to the San Celso project. These concessions too require further exploratory work to fully assess their economic potential.
Hancock Ranges Iron Ore Project - 51%
The Hancock Ranges Iron Ore Project. E47/3954, is within 20kms of the Newman township and borders licences held by Fortescue Metals Group, Hancock Prospecting, BHP Billiton (Mount Whaleback), Hope Downs and Brockman Mining.
The License has been subject to historical exploration by Rio Tinto plc, BHP Group plc, and more recently Volta Mining Limited, where drilling intercepted mineralisation within the Brockman Iron Formation including 126m @ 60.28% Fe from surface (Hole 14SERC004).
Brockman Iron Project - 51%
This tenement hosts part of the historic BHP Deposit 20 iron ore target and the historic BHP Deposit 19 Fe target sits on the south-eastern boundary.
This tenement is dominated by the Brockman Iron Formation which underlies the majority of the tenement area. Recent alluvial cover is prevalent and covers the indicated Brockman Iron Formation.
BHP, as part of their much larger regional programme, identified these two 'deposits' from a combination of mapping and surface rock chip sampling. This sampling was undertaken by BHP at both the 19 and 20 prospects and the samples were analysed for a standard suit of iron ore related elements. The average iron content of four rock-chip samples from prospect 19 was 62% Fe and the average for five samples from prospect 20 was 63.3% Fe.
Future outlook
The Company has benefited from fresh leadership, a new perspective, and the financial support of experienced mining professionals through the injection of additional cash resources in 2019 & early 2020.
The directors have acted to reduce the Company's expenditures, especially in light of the COVID-19 pandemic, and to identify and acquire small but scalable projects in jurisdictions with stable governments, and in commodities considered to have strong futures, both in the short-to-medium, and long term.
Consolidated statement of comprehensive income For the year ended 31 December 2019
(Tabulated amounts expressed in thousands of US dollars unless otherwise stated)
| Note | 2019 | As restated 2018 |
Continuing operations |
|
|
|
Administrative expenses |
| (1,042) | (1,531) |
Operating loss | 4 | (1,042) | (1,531) |
Net investment income |
6 |
(4) |
(2) |
Loss for the year before taxation |
| (1,046) | (1,533) |
Tax | 7 | - | - |
Loss for the year attributable to equity shareholders of the parent | (1,046) | (1,533) | |
Other comprehensive income that may be reclassified to profit or loss: |
|
|
|
Foreign exchange translation differences recognised directly in equity | 10 | (70) | |
Movement in equity instrument | 17 | (81) | (56) |
Other comprehensive income for the year | (71) | (126) | |
Total comprehensive income for the year attributable to equity shareholders of the parent | (1,117) | (1,659) | |
Basic and diluted loss per share (US cents/share) | 8 | (0.1) | (0.3) |
The accompanying notes are an integral part of these consolidated financial statements.
Consolidated statement of financial position As at 31 December 2019
(Tabulated amounts expressed in thousands of US dollars unless otherwise stated)
Note |
2019 |
2018 | |
Assets |
|
| |
Financial asset investments | 17 | - | 78 |
Intangible assets | 9 | 492 | 231 |
Property, plant and equipment | 10 | 1 | 3 |
Total non-current assets | 344 | 493 | |
Trade and other receivables |
11 | 63 | 94 |
Cash and cash equivalents | 12 | 166 | 298 |
Total current assets | 392 | 229 | |
Total assets | 736 | 722 | |
Equity attributable to equity shareholders of the parent |
|
| |
Share capital | 13 | 56,814 | 53,870 |
Warrant reserve | 13 | 261 | 2,183 |
Share-based payment reserve | 13 | 1,121 | 1,057 |
Equity investment reserve | 17 | (272) | (185) |
Foreign exchange translation reserve | 13 | 1,887 | 1,871 |
Accumulated losses |
| (59,212) | (58,166) |
Total equity | 662 | 599 | |
Liabilities |
|
123 |
74 |
Trade and other payables | 15 | ||
Total current liabilities | 123 | 74 | |
Total liabilities | 123 | 74 | |
Total equity and liabilities | 722 | 704 | |
The financial statements were approved and authorised for issue by the Board of Directors on 30 June 2020 and were signed on its behalf by:
Dan Smith
Non-executive Chairman
Consolidated statement of cash flows For the year ended 31 December 2019
(Tabulated amounts expressed in thousands of US dollars unless otherwise stated)
Note | 2019 | 2018 | |
Cash flows from operating activities |
|
|
|
Loss before tax from continuing operations |
| (1,046) | (1,533) |
Adjustments for non-cash items: |
|
|
|
Depreciation | 10 | 2 | 3 |
Exchange difference |
| (6) | 60 |
Finance charges | 6 | 5 | - |
Equity-settled share-based payment transactions |
| 64 | 260 |
(Increase)/decrease in trade and other receivables | 11 | 34 | (40) |
(Decrease) in trade and other payables | 15 | 46 | (18) |
Cash used in operating activities | (901) | (1,298) | |
Cash flows from investing activities |
|
|
|
Interest received | 6 | (1) | - |
Purchase of intangible assets | 9 | (261) | (27) |
Cash used in investing activities | (262) | (27) | |
Cash flows from financing activities |
|
|
|
Proceeds from convertible loan | 13 | 264 |
|
Proceeds from issue of share capital and warrants | 13 | 834 | 813 |
Issue costs | 13 | (76) | (16) |
Cash from financing activities | 1,022 | 797 | |
Net (decrease) / increase in cash and cash equivalents |
|
(141) |
(528) |
Cash and cash equivalents at 1 January |
| 298 | 876 |
Effect of exchange rate fluctuations on cash held |
| 9 | (50) |
Cash and cash equivalents at 31 December | 12 | 166 | 298 |
Consolidated statement of changes in equity For the year ended 31 December 2019
(Tabulated amounts expressed in thousands of US dollars unless otherwise stated)
| Share capital | Warrant reserve | Share based payment reserve |
Equity investment reserve | As restated
Foreign exchange translation reserve
| Accumulated losses | As restated
Total
| |
Balance: 31 December 2017 | 52,965 | 2,166 | 1,389 | (129) | 1,941 | (57,099) | 1,233 | |
Loss for the year | - | - | - | - | - | (1,533) | (1,533) | |
Foreign exchange translation differences recognised directly in equity
| - | - | - |
- | (38) | - | (38) | |
Movement on equity investment fair value | - | - | - | (56) | - | - | (56) | |
Total comprehensive income before restatement
| - | - | - | (56) | (38) | (1,533) | (1,627) | |
Restated foreign exchange translation differences recognised directly in equity (As restated) (note 19) | - | - | - |
- | (32) | - | (32) | |
Total comprehensive income (As restated) | - | - | - | (56) | (70) | (1,533) | (1,659) | |
Shares issued for cash | 984 | - | - | - | - | - | 984 | |
Share issue costs | (62) | - | - | - | - | - | (62) | |
Lapse of share options | - | - | (466) | - | - | 466 | - | |
Share based payment | - | - | 134 | - | - | - | 134 | |
Fair value of warrants issued | (17) | 17 | - | - | - | - | - | |
Balance: 1 January 2019 (As restated) | 53,870 | 2,183 | 1,057 | (185) | 1,871 | (58,166) | 630 | |
Loss for the year | - | - | - | - | - | (1,046) | (1,046) | |
Foreign exchange translation differences recognised directly in equity | - | - | - |
(6)
| 16 | - | 10 | |
Movement in equity instrument | - | - | - | (81) | - | - | (81) | |
Total comprehensive income | - | - | - | (87) | 16 | (1,046) | (1,117) | |
Shares issued | 1,098 | - | - | - | - | - | 1,098 | |
Share issue costs | (76) | - | - | - | - | - | (76) | |
Share based payment | - | - | 64 | - | - | - | 64 | |
Fair value of warrants issued | (244) | 244 | - | - | - | - | - | |
Cancellation of warrants | 2,166 | (2,166) | - | - | - | - | - | |
Balance: 31 December 2019 | 56,814 | 261 | 1,121 | (272) | 1,887 | (59,212) | 599 | |
The accompanying notes are an integral part of these consolidated financial statements.
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014.
For further information please visit the Company's website at www.alienmetals.uk, or contact:
Alien Metals Limited Bill Brodie Good, Technical Director St-James' Corporate Services, Company SecretaryTel: +44 20 7796 8644
| First Equity Limited (Joint Broker) Jason Robertson Tel +44 (0)20 7374 2212 |
Beaumont Cornish Limited (Nomad) James Biddle/ Roland Cornish www.beaumontcornish.com Tel: +44 (0) 207 628 3396 | Novum Securities Limited (Joint Broker) Jon Belliss Tel +44 (0)20 7399 9425 |
Blytheweigh (Financial PR) Megan Ray/Rachael Brooks Tel: +44 (0) 207 138 3204 |
Turner Pope Investments (TPI) Limited (Joint Broker) Andy Thacker/ Zoe Alexander Tel +44 (0)20 3657 0050 |
Notes to Editors
Alien Metals Ltd is a mining exploration and development company listed on AIM of the London Stock Exchange (LSE: UFO). The Company's focus is on precious and base metal commodities.
Alien Metals has embarked upon an acquisition-led strategy headed by a high-quality geological team to build a strong portfolio of diversified assets including two recent acquisitions in 2019. These include the Brockman and Hancock Ranges high-grade (Direct Shipping Ore) iron ore projects and the Elizabeth Hill Silver projects both located in the Pilbara region, Western Australia.
In addition to progressing and developing its portfolio of assets and following its strategic review of its portfolio of silver and precious metals projects in Mexico, Alien Metals has identified priority exploration targets within its 12 mining concessions which it is working to advance systematically. The Company's silver projects are located in the Zacatecas State, Mexico's largest silver producing state which produced over 190m oz of silver in 2018 alone accounting for 45% of the total silver production of Mexico for that year.
Forward-Looking Information
This press release contains certain "forward-looking information". All statements, other than statements of historical fact that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future are deemed forward-looking information.
This forward-looking information reflects the current expectations or beliefs of the Company based on information currently available to the Company as well as certain assumptions, including the availability of sufficient funds. Forward-looking information is subject to a number of significant risks and uncertainties and other factors that may cause the actual results of the Company to differ materially from those discussed in the forward-looking information, and even if such actual results are realised or substantially realised, there can be no assurance that they will have the expected consequences to, or effects on the Company.
Any forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise. Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein.