TIDMARCM
RNS Number : 6570E
Arc Minerals Limited
03 July 2023
3 July 2023
Arc Minerals Ltd
('Arc Minerals' or the 'Company')
Annual Report - December 2022
Arc Minerals Limited announces its audited results for the year
ended 31 December 2022 (the "Annual Report") which is available to
view at the following link:
http://www.rns-pdf.londonstockexchange.com/rns/6570E_1-2023-7-2.pdf
and has also been made available on the Company's website at
http://www.arcminerals.com/investors/document-library/default.aspx
. The Chairman's Statement and primary financial statements are set
out below.
In accordance with shareholders' consent(i) to receive
information electronically and in the absence of any requests
submitted to the Company for information in print, the Annual
Report has not been distributed to shareholders in printed
format.
Notice of the Company's Annual General Meeting will be announced
in due course.
Market Abuse Regulation (MAR) Disclosure
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR.
Forward-looking Statements
This news release contains forward-looking statements that are
based on the Company's current expectations and estimates.
Forward-looking statements are frequently characterised by words
such as "plan", "expect", "project", "intend", "believe",
"anticipate", "estimate", "suggest", "indicate" and other similar
words or statements that certain events or conditions "may" or
"will" occur. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors that could cause
actual events or results to differ materially from estimated or
anticipated events or results implied or expressed in such
forward-looking statements. Such factors include, among others: the
actual results of current exploration activities; conclusions of
economic evaluations; changes in project parameters as plans
continue to be refined; possible variations in ore grade or
recovery rates; accidents, labour disputes and other risks of the
mining industry; delays in obtaining governmental approvals or
financing; and fluctuations in metal prices. There may be other
factors that cause actions, events or results not to be as
anticipated, estimated or intended. Any forward-looking statement
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 statement,
whether as a result of new information, future events or results or
otherwise. Forward-looking statements are not guarantees of future
performance and accordingly undue reliance should not be put on
such statements due to the inherent uncertainty therein.
(i) Shareholder consent to receive information
electronically
At the Annual General Meeting of the Company held in September
2012, Shareholders approved electronic communication and
dissemination of information via the Company's official website,
including but not limited to Notices of General Meetings, Forms of
Proxy and Annual Reports and Accounts. Shareholders are reminded
that their right to request information in print remains unaffected
and that they can do so by contacting the Company giving no less
than 14 days' notice.
**S**
Contacts
Arc Minerals Ltd
Nick von Schirnding (Executive Chairman) +44 (0) 20 7917 2942
SP Angel (Nominated Adviser & Joint
Broker)
Ewan Leggat / Adam Cowl +44 (0) 20 3470 0470
WH Ireland Limited (Joint Broker)
Harry Ansell / Katy Mitchell +44 (0) 20 7220 1666
Chairman's Statement
2022 Overview
The past year was dominated by the Company's ongoing
negotiations with a subsidiary of Anglo American plc ("Anglo
American") to structure and finalise a joint venture in respect of
the Company's copper interests in North Western Zambia.
In May 2022 the Company announced that it, together with its
partners, had entered into an agreement with Anglo American with
the intention to form a joint venture in respect of its Zambian
copper interests. The key commercial terms of the Joint Venture
were that upon signing of a binding Joint Venture (which was
subsequently signed as announced on 20 April 2023 subject to
completing certain Conditions Precedent) Anglo American would have
an initial ownership interest of 70% with Arc and its partners the
balance.
The terms of the Joint Venture agreement included Anglo American
having the right to retain an Ownership Interest of 51% (Phase 1),
by funding exploration expenditures equal to $24m on or before 180
days after the third anniversary and making cash payments to Arc
Minerals' subsidiary Unico of $3m upon signing of the Joint Venture
Agreement and satisfying the Conditions Precedent and $1m per annum
for the following three years with a final payment of $8m by the
end of Phase 1.
Following the completion of Phase I, Anglo American will have
the right to retain an additional ownership interest equal to 9%
(for a total ownership interest of 60%) by funding $20m of
additional exploration expenditures within 2 years of the Phase I
end date and following the completion of Phase II, Anglo American
will have the right to retain an additional ownership interest
equal to 10% (for a total ownership interest of 70%) by funding
$30m within 2 years of the Phase II End Date.
At the date of this report the Company continues to work towards
finalising the Conditions Precedent referred to above.
Following the acquisition of Alvis-Crest (Propriety) Limited in
late 2021, the Company started initial exploration work on its
licenses in Botswana. These licenses lie within and adjacent to the
highly prospective Central Structural Corridor of the Kalahari
Copper Belt ("KCB") and within 10km and 50km of Khomecau's Zone 5
and Banana Zone copper projects respectively, known as the two
largest copper projects on the KCB.
These licenses already host two known copper-nickel anomalies,
both 2-3km in length overlying the favourable interpreted DKF-NPF
contact that have yet to be drill tested and now potentially may
have further targets. As a result of delays associated with the
Covid pandemic the two licenses in Botswana (PL 135/2017 and PL
162/2017) were renewed for an additional two years until 30
September 2024.
On 29 April 2022 the Company announced an update on the progress
of the acquisition of a 73.5% interest in the Misisi gold project
("Misisi") by Regency Mining Ltd ("Regency") from Golden Square
Equity Partners Limited ("Golden Square"). Regency replaced Rackla
Metals Inc. as the acquiror of Misisi. The terms of the transaction
saw Arc being paid US$250,000 with Regency procuring the issuance
to Arc of shares in a publicly listed company in Canada with a
value of US$1,250,000 ("Consideration Shares"). At the time of
writing the issuance of the shares in Canada were subject to
finalisation of an equity raise. The agreement also provides Arc
with a royalty agreement on the same terms as the previous Misisi
royalty agreement announced on 5 May 2021.
In addition, Arc held a US$5m secured loan note dated 19 March
2020 issued by Golden Square ("Loan Note"). The Loan Note has since
been replaced by the issuance to Arc of 3 million shares in a US
listed company, Tingo Inc. (OTC: TMNA) ("Security Shares"), a
agri-fintech business in Africa, in full and final settlement of
the Loan Note.
Sustainability
From an ESG perspective, I am proud to report that the Company
continued with its local outreach programme in some of the
communities where we operate in North West Zambia.
Outlook
Notwithstanding the current economic headwinds of higher energy
prices, the war in Ukraine and elevated levels of inflation and
interest rates the outlook for copper remains strong. Global demand
will require significant additional copper supply over and above
the current requirements. Prolonged underinvestment in exploration
and new mine development means the metal has a future that is well
supported by strong fundamentals.
President Hakainde Hichilema's government has prioritised
additional foreign investment into the mining sector and has made a
number of significant policy changes to support increased economic
growth in Zambia.
Acknowledgements
I would like to extend my gratitude to our shareholders for
their continued support over the past year and look forward to
reporting further on our progress.
Nicholas von Schirnding
Executive Chairman
2 July 2023
Consolidated Statement of Comprehensive Income for the year
ended 31 December 2022
31 December 31 December
2022 2021
Notes GBP 000s GBP 000s
Administrative expenses 3 (3,665) (5,447)
------------- -------------
Operating loss (3,665) (5,447)
Loss on disposal of Zamsort 4 (2,162) -
Loss for the year before tax (5,827) (5,447)
------------- -------------
Income tax expense 5 - -
Loss for the year (5,827) (5,447)
------------- -------------
Other comprehensive income:
Item that may be subsequently
reclassified to profit or loss
Currency translation differences 1,959 597
------------- -------------
Total comprehensive loss for
the year, net of tax (3,868) (4,850)
------------- -------------
Loss attributable to:
Equity holders of the parent (7,342) (5,359)
Non-controlling interest 1,515 (88)
------------- -------------
(5,827) (5,447)
------------- -------------
Total comprehensive loss attributable
to:
Equity holders of the parent (6,048) (5,142)
Non-controlling interest 2,180 292
------------- -------------
(3,868) (4,850)
------------- -------------
Earnings per share attributable to owners
of the parent during the year
- Basic (pence per share) 8 (0.50) (0.50)
- From continuing operations -
Basic 8 (0.50) (0.50)
Consolidated Statement of Financial Position as at 31 December
2022
31 December 31 December
2022 2021
Notes GBP 000s GBP 000s
ASSETS
Non-current assets
Intangible assets 10 5,233 4,490
Fixed assets 11 12 22
Total non-current assets 5,245 4,512
------------ ------------
Current assets
Trade and other receivables 14 1,096 3,971
Assets held for sale 4 - 3,592
Short term investments 16 1,738 439
Cash and cash equivalents 616 1,735
Total current assets 3,450 9,737
TOTAL ASSETS 8,695 14,249
------------ ------------
LIABILITIES
Current liabilities
Trade and other payables 18 (2,733) (1,338)
Total current liabilities (2,733) (1,338)
Non-current liabilities
Long term payables 9 (117) (4,735)
------------ ------------
TOTAL LIABILITIES (2,850) (6,067)
NET ASSETS 5,845 8,182
------------ ------------
Share Capital 19 - -
Share premium 21 64,272 62,019
Share based payment reserve 20 283 273
Warrant reserve 20 84 84
Foreign exchange reserve 1,045 (1,885)
Retained earnings (59,196) (53,385)
------------ ------------
Equity attributable to equity
holders of the parent 6,488 7,106
Non-controlling interest (643) 1,076
TOTAL EQUITY 5,845 8,182
------------ ------------
These financial statements were approved by the Board of
Directors on 2 July 2023 and signed on its behalf by:
Nicholas von Schirnding
Executive Chairman
Consolidated Statement of Cash Flows for the period ended 31
December 2022
31 December 31 December
2022 2021
Notes GBP 000s GBP 000s
--------------------------------------- ------- ------------ ------------
Cash flows from operating activities
Loss before income tax and including
discontinued operations (5,827) (5,447)
Share based payment and warrants
issued 20 27 23
Gain and losses on investments 16 2,519 -
Gain through profit and loss
on forgiven shareholder loans 3 (6,485) -
Loss through profit and loss
on disposal of Zamsort 3 5,517 -
Loss arising on deconsolidation
of Zamsort 4 2,162 -
Gains and Losses on foreign exchange 3 (168) 114
Depreciation and amortisation 10 31
Net cash used in operating activities
before changes in working capital (2,245) (5,279)
------------ ------------
Decrease in inventories - 15
Decrease (Increase) in trade
and other receivables 14 (1,004) (431)
Increase in trade and other payables 18 124 2,116
------------ ------------
Net cash used in operating activities (880) 1,700
------------ ------------
Cash flows from investing activities
Purchase of intangible assets 10 (675) (367)
Proceeds from Casa disposal 202 -
Proceeds on disposal of short
term investments 16 176 -
Net cash used in investing activities (297) (367)
------------ ------------
Cash flows from financing activities
Proceeds from issue of ordinary
shares - net of share issue costs 21 2,253 3,564
Proceeds from exercise of share
based payments - 1,199
Minority shareholder loans 50 292
Net cash from financing activities 2,303 5,055
------------ ------------
Net (decrease) increase in cash
and cash equivalents (1,119) 1,035
Cash and cash equivalents at
beginning of year 1,735 700
------------ ------------
Cash and cash equivalents at
end of the year 616 1,735
------------ ------------
Consolidated Statement of Changes in Equity as at 31 December
2022
Attributable to equity holders of the Company
Share Share Foreign Share Warrant Retained Total Non-controlling Total
capital premium exchange based reserve earnings interest equity
reserve payment
reserve
GBP GBP GBP GBP GBP
000s 000s GBP 000s 000s 000s GBP 000s 000s GBP 000s GBP 000s
Balance as at
1 January
2022 - 62,019 (1,885) 273 84 (53,385) 7,106 1,076 8,182
Loss for the
year - - - - - (5,827) (5,827) 1,515 (4,312)
Other
comprehensive
income(loss)
for the year
- currency
translation
differences - - 1,294 - - - 1,294 665 1,959
Total
comprehensive
income (loss)
for the year - - 1,294 - - (5,827) (4,533) 2,180 (2,353)
Share capital
issued - 2,253 - - - - 2,253 - 2,253
Share options
expired
during the
year - - - (16) - 16 - - -
Share options
expense
during the
year - - - 27 - - 27 - 27
Effect of
foreign
exchange on
opening
balance - - 2,550 (1) - - 2,549 (2,631) (82)
Disposal of
Zamsort - - (914) - - - (914) (1,268) (2,182)
Total
transactions
with owners,
recognised
directly in
equity - 2,253 1,636 10 - 16 3,915 (3,899) 16
--------- -------- --------- -------- -------- ---------- -------- ---------------- ---------
Balance as at
31 December
2022 - 64,272 1,045 283 84 (59,196) 6,488 (643) 5,845
--------- -------- --------- -------- -------- ---------- -------- ---------------- ---------
Attributable to equity holders of the Company
Share Share Foreign Share Warrant Retained Total Non-controlling Total
capital premium exchange based reserve earnings interest equity
reserve payment
reserve
GBP GBP GBP GBP GBP
000s 000s GBP 000s 000s 000s GBP 000s 000s GBP 000s GBP 000s
Balance as at
1 January
2021 - 55,755 (3,111) 1,368 84 (49,056) 5,040 506 5,546
Loss for the
year - - - - - (5,447) (5,447) - (5,447)
Other
comprehensive
income(loss)
for the year
- currency
translation
differences - - 597 - - - 597 - 593
Total
comprehensive
income (loss)
for the year - - 597 - - (5,447) (4,850) - (4,854)
Share capital
issued - 6,264 - - - - 6,264 - 6,264
Granted during
the year - - - 23 - - 23 - 23
Surrendered
during the
year - - - (1,118) - 1,118 - - -
Effect of
foreign
exchange on
opening
balance - - 629 - - - 629 145 774
Investment by
NCI in the
year - - - - - - - 425 425
Total
transactions
with owners,
recognised
directly in
equity - 6,264 629 (1,095) - 118 5,916 570 7,486
--------- -------- --------- -------- -------- ---------- -------- ---------------- ---------
Balance as at
31 December
2021 - 62,019 (1,885) 273 84 (53,385) 7,106 1,076 8,182
--------- -------- --------- -------- -------- ---------- -------- ---------------- ---------
Share capital represents the nominal value of the ordinary
shares.
Share Premium represents consideration less nominal value of
issued shares and costs directly attributable to the issue of new
shares.
Share based payment reserve represents stock options awarded by
the group.
Warrant reserve represents warrants granted by the group.
Foreign exchange reserve represents the translation differences
arising from translating the financial statement items from
functional currency to presentational currency and foreign exchange
differences arising on the elimination of intercompany loans
forming part of the investment of subsidiaries.
Retained earnings represents retained losses.
Non-controlling interest represents the interests of minority
shareholders in the assets and liabilities of the Group.
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