Alexander Mining plc
Audited Results for the Year Ended 31 December 2016
Alexander Mining plc ("Alexander" or the "Company"), the AIM-listed mining and mineral processing technologies company, announces its audited results for the year ended 31 December 2016.
Highlights
· Continued interest from mining companies in leaching technologies
· Continued success in registration of patents
· Company well financed and reviewing complementary opportunities in the mining sector
Chairman's Statement
Commercialisation activities
The Company's activities during 2016 were conducted in an environment of increasing confidence for growth in the global economy and contemporaneously the fortunes of the mining industry. Reflecting this, the Company made some satisfactory progress towards its objective of commercialising its leaching technologies ("Leaching Technologies").
Since the beginning of 2016, mining companies have enjoyed rising prices for many important base metals and, pleasingly, for those of main interest to the Company - copper, zinc and cobalt; prices are up 22%, 45% and 132% respectively over the last 12 months. This bodes well for healthy activity in the sector, especially amongst those more innovative companies in the mining industry seeking to embrace, and adopt our Leaching Technologies with inherent economic, operational and environmental benefits.
Significant progress was announced in August 2016, with the signing of a licence agreement for Australia with Accudo Metals, a new Australian company which has been established to exploit Alexander's proprietary Leaching Technologies. Initial test work and a full scoping study on the first targeted opportunity, a copper project, has been completed, with positive results. Accudo is currently evaluating the scoping study in detail, with a view to deciding on the next stage of work, which would logically be starting work on a feasibility study. Accudo is negotiating with the owners of the copper project on a variety of matters, including the proposed feasibility study and commercial terms beyond. We look forward to Accudo advising us on the outcome as and when appropriate.
Under the licence agreement, Alexander has granted Accudo an exclusive licence ("Licence") for up to five mining projects (each a "Project") in Australia to use its Leaching Technologies, subject to securing commercial terms with the Project owners. In exchange, Alexander will receive a royalty linked to gross sales value of product produced using the Leaching Technologies of 3.5%.
In addition to the Royalty, Accudo, subject to certain conditions, will pay various progress payments for each Project. Moreover, subject to certain conditions, Accudo has an option to convert, for a significant payment, the non-exclusive component of the Licence into an exclusive Licence.
We are delighted to have signed this agreement with Accudo which is well financed and intent upon rigorously evaluating the use of Alexander's Leaching Technologies in Australia. In addition to the initial copper project, we have had in-depth discussions with them about a range of identified potential projects of interest and we look forward to developments with optimism.
In Turkey, we remain hopeful that we may benefit from a change in the ownership of the Sivas copper mineral property ("Sivas") in the Republic of Turkey and where we have had past interest.
Separately, Alexander has investigated several other commercialisation opportunities for its Leaching Technologies to recover copper, cobalt and zinc in various countries and of the world. In particular, we have had strong interest from companies active in Africa and also, post the period under review, signed a marketing agreement with Dr. Jadambaa Temuujin, currently Chief Research Scientist at the Institute of Chemistry and Chemical Technology, part of the Mongolian Academy of Sciences, for Mongolia.
Lithium recovery research and development
Post the period under review, in March 2017, Alexander announced an exciting new research and development joint venture project ("JV") for the recovery of lithium from hard rock sources. The JV is between the Company and Dr. Nicholas Welham, Alexander's Principal Technology Consultant for ammoniacal and hypochlorous acid leaching.
Alexander will be entitled to be the initial sole funder of the JV in return for an economic interest of up to 80 per cent in a worldwide exclusive licence ("Licence") to commercialise the new technology(ies). The JV will be in stages, with stage 1, proof of concept, budgeted to cost US$10,000 and expected to take approximately three to four months once suitable samples have been obtained. Thereafter, if stage 1 is favourable, Alexander may agree to fund part or all of the next stages, including a mini pilot plant, budgeted for an additional US$240,000 and to take 12-18 months.
As an acknowledged expert in lithium and hydrometallurgy, working with Dr. Welham on this project offers the exciting potential to develop new lithium processing intellectual property in a sector of major interest. The JV is complementary to our existing cobalt recovery technology as cobalt is an essential component in lithium ion batteries.
With this new development, the company is involved in innovative processing technology for three of the so-called 'technology metals of the future' - copper, cobalt and lithium. All of them have an essential use in electric vehicles' manufacture. Plus, lithium ion batteries also have huge growth potential for use in the battery mass electricity storage sector.
MetaLeach® registered patent summary
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Method |
Country |
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AmmLeach® family patents |
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Ammoniacal Leaching |
Peru, South Africa, African Regional Industrial Property Organisation ("ARIPO"), Australia, Mexico, Morocco, USA, Democratic Republic of the Congo, China, Canada |
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Extracting Zinc from Aqueous Ammoniacal Solutions |
ARIPO, Australia, Mexico, USA |
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Leaching Cobalt from Oxidised Cobalt Ores |
South Africa, USA |
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Leaching of a Copper-containing Ore |
Australia |
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Leaching Zinc from a Zinc Ore |
Australia, USA |
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Recovering Cobalt from Cobalt-Containing Ores |
Australia |
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Leaching of Copper and Molybdenum |
USA |
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HyperLeach® family patents |
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Oxidative Leaching of Molybdenum - |
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Rhenium Sulfide Ores and/or Concentrates |
Australia, Mongolia, USA, Chile |
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Oxidative Leaching of Sulfide Ores and/or Concentrates |
Australia, Mongolia |
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NB: ARIPO includes: Botswana, Namibia, Zambia and Zimbabwe. |
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Intellectual property
Continued success in the granting of important patents occurred during 2016, encompassing our AmmLeach ®and HyperLeach ® inventions, with more patent applications in the pipeline. The table above summarises those patents granted to date.
Financial
The Company continued with its policy of keeping administration costs to a minimum, whilst ensuring the protection of its intellectual property through patent applications. In May 2016 and in February 2017, the Company raised, through equity placings of new ordinary shares to institutional and other investors, gross amounts of £500,000 and £750,000 respectively. The net proceeds of the placings were for general working capital purposes and also in part in the most recent placing for a potential corporate opportunity.
New opportunities
As well as actively working on the commercialisation of our Leaching Technologies, given the mining industry background of the Company's directors and senior employees, we have recently investigated a range of potentially complementary corporate investment opportunities in the mining sector.
Whilst we have not yet been able to advance an opportunity to the stage for public disclosure we remain active in evaluating several of interest.
Outlook
I am encouraged by the better conditions for the mining sector and our prospects for the commercialisation of our Leaching Technologies. We still firmly believe that the scope for major operating and capital cost savings for existing and potential mines using our technology is of significant industry interest. Mining companies, wherever possible, still need to improve metal extraction recoveries and reduce operating costs. When coupled with the inherent positive environmental credentials, we believe our Leaching Technology is an attractive processing method for many mining operations with amenable ore when compared to conventional processes.
The initiative in lithium recovery research and development offers a complementary area of interest to our existing intellectual property portfolio.
Finally, I would like to thank the Company's shareholders for their support and our employees, consultants and directors for their efforts during the year.
Matt Sutcliffe
Executive Chairman
26 May 2017
For further information, please contact:
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Martin Rosser Chief Executive Mobile: +44 (0) 7770 865 341
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Matt Sutcliffe Executive Chairman Mobile: +44 (0) 7887 930 758 |
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Alexander Mining plc Tel: +44 (0) 20 7078 9566 Email: [email protected] Website: www.alexandermining.com |
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Northland Capital Partners Limited Matthew Johnson / Gerry Beaney +44 (0) 20 3861 6625 (Corporate Finance) John Howes (Corporate Broking)
Turner Pope Investments (TPI) Ltd James Pope / Ben Turner +44 (0) 20 3621 4120 |
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Consolidated income statement for the year ended 31 December 2016
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|
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2016 |
2015 |
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|
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£'000 |
£'000 |
|
|
|
|
|
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Continuing operations |
|
|
|
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Revenue |
|
- |
8 |
|
|
|
|
|
|
Gross profit |
|
- |
8 |
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Administrative expenses |
|
(435) |
(608) |
|
Research and development expenses |
|
(144) |
(249) |
|
|
|
|
|
|
Operating loss |
|
(579) |
(849) |
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Finance income |
|
- |
- |
|
Finance cost |
|
(4) |
- |
|
|
|
|
|
|
Loss before taxation |
|
(583) |
(849) |
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Income tax expense |
|
- |
- |
|
|
|
|
|
|
Loss for the year from continuing operations |
|
(583) |
(849) |
|
|
|
|
|
|
Basic and diluted loss per share (pence): from continuing operations |
|
(0.08)p |
(0.30)p |
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All components of profit or loss for the year are attributable to equity holders of the parent. |
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Consolidated statement of comprehensive income f or the year ended 31 December 2016
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2016 |
2015 |
|||
|
|
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£'000 |
£'000 |
|||
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Loss for the year |
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(583) |
(849) |
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|
|
|
|
|
|||
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Other comprehensive income: |
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4 |
- |
|||
|
|
|
|
|
|||
|
|
|
|||||
|
|
|
|
|
|||
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Total comprehensive loss for the year attributable to equity holders of the parent |
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(579) |
(849) |
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|
|
|
|
|
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Consolidated balance sheet as at 31 December 2016
|
|
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2016 |
2015 |
|
|
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£'000 |
£'000 |
|
|
|
|
|
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Assets |
|
|
|
|
Property, plant and equipment |
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- |
- |
|
|
|
|
|
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Total non-current assets |
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- |
- |
|
|
|
|
|
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Trade and other receivables |
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39 |
41 |
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Cash and cash equivalents |
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259 |
165 |
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Total current assets |
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298 |
206 |
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Total assets |
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298 |
206 |
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|
|
|
|
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Equity attributable to owners of the parent |
|
|
|
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Issued share capital |
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14,404 |
13,825 |
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Share premium |
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13,772 |
13,822 |
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Accumulated losses |
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(28,501) |
(27,971) |
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|
|
|
|
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Total equity |
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(325) |
(324) |
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|
|
|
|
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Liabilities |
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|
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Current liabilities |
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|
|
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Trade and other payables |
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623 |
530 |
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Total current liabilities |
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623 |
530 |
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Total liabilities |
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623 |
530 |
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|
|
|
|
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Total equity and liabilities |
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298 |
206 |
Consolidated statement of cash flows for the year ended 31 December 2016
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|
|
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2016 |
2015 |
|
|
|
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£'000 |
£'000 |
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Cash flows from operating activities |
|
|
|
|
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Operating loss - continuing operations |
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(579) |
(849) |
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Decrease / (Increase) in trade and other receivables |
|
|
(14) |
26 |
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Increase in trade and other payables |
|
|
93 |
92 |
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Increase/(Decrease) in provisions |
|
|
- |
(18) |
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Shares issued in payment of expenses |
|
|
- |
57 |
|
Share option & Warrant charge |
|
|
49 |
32 |
|
Inter-company recharges |
|
|
- |
- |
|
Net cash outflow from operating activities |
|
|
(451) |
(660) |
|
|
|
|
|
|
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Cash flows from investing activities |
|
|
|
|
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Amounts remitted to subsidiary companies |
|
|
- |
- |
|
Interest received |
|
|
- |
- |
|
Net cash inflow/(outflow) from investing activities |
|
|
- |
- |
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
Proceeds from the issue of share capital, net of issue costs |
|
|
549 |
709 |
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Proceeds from issue of share options |
|
|
- |
- |
|
Net cash inflow from financing activities |
|
|
549 |
709 |
|
|
|
|
|
|
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Net increase/(decrease) in cash and cash equivalents |
|
|
98 |
49 |
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Cash and cash equivalents at beginning of year |
|
|
165 |
116 |
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Exchange differences |
|
|
(4) |
- |
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Cash and cash equivalents at end of year |
|
|
259 |
165 |
|
|
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Share capital |
Share premium |
Accumulated losses |
Total equity |
|
|
|
£'000 |
£'000 |
£'000 |
£'000 |
|
At 1 January 2015 |
|
13,639 |
13,298 |
(27,211) |
(274) |
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Accumulated loss for year |
|
- |
- |
(849) |
(849) |
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Total comprehensive loss for the year attributable to equity holders of the parent |
|
- |
- |
(849) |
(849) |
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Share option & Warrant costs |
|
- |
- |
89 |
89 |
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Costs of share issue |
|
- |
(71) |
- |
(71) |
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Shares issued |
|
186 |
595 |
- |
781 |
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At 31 December 2015 |
|
13,825 |
13,822 |
(27,971) |
(324) |
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Accumulated loss for year |
|
- |
- |
(583) |
(583) |
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Translation difference |
|
- |
- |
4 |
4 |
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Total comprehensive loss for the year attributable to equity holders of the parent |
|
- |
- |
(579) |
(579) |
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Share option & Warrant costs |
|
- |
- |
49 |
49 |
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Costs of share issue |
|
- |
(34) |
- |
(34) |
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Shares issued including warrant charge |
|
579 |
(16) |
- |
563 |
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At 31 December 2016 |
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14,404 |
13,772 |
(28,501) |
(325) |
Notes
1. Financial statements
The financial information set out in this announcement does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006 for the year ended 31 December 2016 or for the year ended 31 December 2015, but is derived from those accounts. The financial statements for 2016 will be delivered to the Registrar of Companies following the Company's Annual General Meeting. The auditor has issued an unqualified opinion in respect of the financial statements which does not contain any statements under the Companies Act 2006, Section 498(2) or Section 498(3). The auditor has raised an Emphasis of Matter in relation to going concern and the availability of project finance as follows:
" In forming our opinion, which is not modified, we have considered the adequacy of the disclosures made in note 2(a) to the financial statements concerning the Company's recent equity fund raising and the anticipated requirement for further funding in the next twelve months. The Directors believe that the Company currently has a range of corporate development opportunities which could give rise to significant cash inflows in the next twelve months.
" However, the outcome of these corporate developments and the funding arising from them cannot presently be determined. These conditions, along with the other matters explained in note 2(a) to the financial statements, indicate the existence of a material uncertainty which may cast significant doubt about the Company's and the Groups' ability to continue as a going concern. The financial statements do not include the adjustments that would result if the Company and Group was unable to continue as a going concern. "
2. Summary of significant accounting policies
a) Basis of preparation
The financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRSs") in force at the reporting date and their interpretations issued by the International Accounting Standards Board ("IASB") as adopted for use within the European Union.
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) made up to 31 December each year.
Going Concern
In common with many mining, exploration and intellectual property development companies, the Company has raised finance for its activities in discrete tranches to finance its activities for limited periods. As explained more fully in Note 4, Post Balance Sheet events, on the 8 February 2017 the Company announced that it had conditionally raised £750,000 before expenses by way of an equity placing and the proceeds have now been received by the Company. It is anticipated that further funding will be required in the next twelve months and the Directors believe that the Company has a range of corporate development opportunities which could give rise to significant net cash inflows over the next twelve months.
On this basis, the Directors have concluded that it is appropriate to draw up the financial statements on the going concern basis. However, there can be no certainty that the corporate development opportunities will be secured and give rise to the further funding in the necessary timescales. This indicates the existence of a material uncertainty that may cast significant doubt on the ability of the Company and the group to continue as a going concern and therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business. The financial statements do not include the adjustments that would result if the Company and Group were unable to continue as a going concern.
b) Research and development expenditure
Research costs are recognised in the income statement as an expense as incurred. Development costs are recognised in the income statement as an expense as incurred unless the development project meets specific criteria for deferral and amortisation. No development costs have been deferred to date because there is insufficient information at the balance sheet date to quantify the expected future economic benefits from the proprietary leaching technologies.
3. Dividends
The directors do not recommend the payment of a dividend (2015: nil).
4 . Post balance sheet events
On the 01 February 2017, the Company issued 1,769,772 shares for cash of 0.2p each to raise £3,539.55 following the exercise of bonus warrants issued to existing shareholders of the company at 4.30pm on the 24 May 2016 on the basis of 1 warrant per every 4 qualifying shares held by shareholders.
On the 01 February 2017, the Company issued 10,000,000 shares for cash of 0.1p each to raise £10,000.00 following the exercise of broker warrants issued to Cornhill Capital in connection with the 20 May 2016 placing.
On the 15 February 2017, the Company issued 359,000,000 new shares of 0.1p each for cash at 0.14p each to raise £502,600 (gross).
On the 28 February 2017, the Company issued 176,715,000 new shares of 0.1p each for cash at 0.14p each to raise £247,401 (gross).
Following admission of the above shares the Company has a total of 1,488,730,149 ordinary shares in issue with each share carrying the right to one vote.
Annual Report
The Annual Report will be posted to all shareholders by 5 June 2017 and will be available on the Company's website at www.alexandermining.com. Additional copies will be made available to the public, free of charge, from the Company's registered office at 2nd Floor, 85-87 Borough High Street, London, SE1 1NH.
Annual General Meeting
The Company's Annual General Meeting will be held at the offices of Druces LLP, Salisbury House, London Wall,
London, EC2M 5PS at 10:00am on Thursday 29 June 2017. The Notice of the AGM and the associated explanatory notes relating to the resolutions to be proposed at that meeting will accompany the Company's annual report.
Disclaimers and forward looking statements
Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.
This news release contains forward looking or future-oriented financial information, being information which is not historical fact, including, without limitation, statements regarding potential results of metallurgical testwork, anticipated applications for the Company's intellectual property and discussions of future plans and objectives. Although the Company believes that the expectations reflected by such information are reasonable, these statements are based on assumptions and factors concerning future events that may prove to be inaccurate. Such statements are necessarily based upon a number of estimates and assumptions based on information available to the Company about itself and the business in which it operates. Information used in developing forward-looking information has been acquired from various sources including third party consultants, suppliers, regulators and other sources and is subject to numerous risks and uncertainties that could cause actual results and future events to differ materially from those anticipated or projected. Important factors that could cause actual results to differ materially from the Company's expectations are the continuing availability of capital resources to fund the commercialisation of Alexander's technologies; continued positive results from trials and applications of Alexander's AmmLeach® and HyperLeach® technologies and other factors as disclosed in Company documents filed from time to time. Management uses forward-looking statements because it believes they provide useful information to the shareholders with respect to proposed transactions involving Alexander, and cautions readers that the information may not be appropriate for other purposes and should not be read as guarantees of future performance or results.
The Company disclaims any intention or obligation to revise or update such statements unless required by law.