TIDMREE
RNS Number : 1474R
Altona Rare Earths PLC
24 October 2023
24 October 2023
ALTONA RARE EARTHS PLC
("Altona" or "the Company")
FINAL RESULTS
Altona (LSE: REE), a resource exploration and development
company focused on Rare Earths in Africa, is pleased to announce
its final results for the year ended 30 June 2023. A copy of the
Annual Report will be available shortly on the Company's website:
www.altonaRE.com/investors/documents . A further announcement will
be made with the date of the Annual General Meeting in due
course.
PERIOD HIGHLIGHTS
-- Successful listing on the London Stock Exchange ("LSE") on 9 June 2023
-- Fundraise of GBP2.0 million at 5 pence per share completed in
conjunction with the LSE listing
POST-PERIOD HIGHLIGHTS
-- Mineral Resource Estimate published on 25 September 2023, reporting:
- 13.6 million at 2.42% Total Rare Earths Oxide ("TREO")
- 58% of tonnage reported as Indicated, balance as Inferred.
-- Scoping Study published on 18 October 2023, reporting:
- Post tax NPV8 of US$283.3 million
- Post tax IRR of 25%
- Life of Mine ("LoM") of 18 years
- LoM EBITDA of US$1.67 billion
-- The Scoping Study:
- Provides sufficient confidence to proceed to Prefeasibility Study (PFS) stage;
- Identified several potential upsides to be developed during PFS.
The financial information set out below does not constitute the
Company's statutory accounts for the year ending 30 June 2023.
FINANCIAL HIGHLIGHTS
-- Net Assets increased to GBP1.9 million (FY 22: GBP1.1 million)
-- Cash at year end increased to GBP1.1 million (30 June 22: GBP0.3 million)
-- Loss for the year increased to GBP1.3 million (FY 22: GBP0.8
million), mainly due to the cost of the LSE listing and
fundraise
Cedric Simonet, CEO of Altona, commented, "For Altona, the
Financial Year 2023 ended on a positive note, with the Company
completing its long-anticipated move to the Main Market of the
London Stock Exchange on 9 June 2023. The simultaneous fundraise
allowed the Company to complete its Phase 2 deliverables (the MRE
and Scoping Study) and to meet the requirements to increase
Altona's holding in the Monte Muambe Project to 51%.
"The Scoping Study serves as an affirmative initial validation
of the potential economic viability of the Project and provides a
solid foundation for its subsequent progression to the
Prefeasibility Study stage.
"We are looking forward to a busy and exciting time ahead as we
enter Phase 3 and continue de-risking the Monte Muambe project
whilst delivering on the Prefeasibility Study, a Mining Concession
and the subsequent increase in our holding of the Project to
70%."
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-ends-
Altona Rare Earths Plc
Cedric Simonet, CEO +44 (0) 7778 866 108
Christian Taylor-Wilkinson, Business Development +44 (0) 7795
168 157
Novum Securities Ltd (Corporate Finance) +44 (0) 20 7399
9400
David Coffman
Daniel Harris
George Duxberry
Allenby Capital Ltd (Joint Broker) +44 (0)20 3328 5656
Kelly Gardiner / Guy McDougall (Sales)
Nick Athanas (Corporate Finance)
Optiva Securities (Joint Broker) +44 (0) 20 3411 1882
Daniel Ingram
Yellow Jersey PR (Financial PR) +44 (0) 20 3004 9512
Sarah Hollins
Annabelle Wills
Soraya Jackson
About Altona Rare Earths Plc
Altona is a resource exploration and development company focused
on Rare Earths in Africa. The Company is listed on the Main Market
of the London Stock Exchange.
Rare Earths are a group of 17 chemical elements, many of which
are critical to the W orld's ongoing transition from carbon-based
to renewable energies, and to the defence and communication
sectors.
The Company currently focuses on the development of Monte
Muambe, its flagship Magnet Rare Earths Project, located in
Northwest Mozambique. The Project was acquired in June 2021, and
the Company has so far drilled over 7,800m, and defined a maiden
JORC Mineral Resource Estimate of 13.6 million tons at 2.42% TREO.
A Competent Person Report including the Scoping Study for Monte
Muambe was published on 18 October 2023. The Project is now
entering its Prefeasibility Study stage.
Altona continues to take advantage of its position in Africa to
assess other possible Rare Earths opportunities on the
Continent.
CHAIRMAN'S STATEMENT
It has been a transformational year for Altona Rare Earths as we
completed our move from the AQSE Growth Market to the LSE Main
Market Standard Segment list and announced an impressive maiden
resource at our flagship Monte Muambe Project.
Monte Muambe's encouraging Scoping Study, published on 18
October 2023, underpins the speed with which we are progressing and
de-risking the Project, and will continue to do so as work on the
Prefeasibility Study is now starting.
I am particularly pleased with the advancements we made
considering the unfavourable macroeconomic conditions and general
business environment we are currently navigating.
Continued global inflation, and the high interest rates that the
Bank of England (and other central banks) is employing to combat
it, has reduced the amount of disposable income, making it one of
the main factors contributing to generally disappointing returns
across the small cap resource sector this year.
To compound this general lethargy, rare earth spot prices sank
to their lowest levels since 2020 on soft demand from green energy
companies and a rising supply from China. I suspect this is driven
by lower consumer demand which in turn has stemmed primarily from
the aforementioned higher interest rates. Less consumer demand
means lower need for inventory from green energy companies and
lower internal demand in China leaves higher balances for export,
depressing global spot prices.
But, the case for green metals and particularly rare earths
remains structurally sound. The green revolution is a real thing
and embedded in the government policies of nations as disparate as
the UK, China, USA, France, Germany, Canada, Tanzania and Ecuador,
with even petro economies like Saudi Arabia investing heavily in
the post carbon economy.
The UK government remains at the forefront of the green
revolution with its legal commitment to net zero emissions and we
are seeing progressively more signs of this and other governments
growing willingness to give meaningful assistance to nascent
companies looking to be part of the solution.
At Altona Rare Earths we remain confident that we are putting in
place the building blocks for a viable mining operation in
Mozambique and we are excited about driving Monte Muambe forward
while continuing our search for further high quality rare earths
assets to add to our portfolio.
Martin Wood
Chairman
Altona Rare Earths Plc
CEO'S STATEMENT
For Altona, the Financial Year 2023 ended on a positive note,
with the Company completing its long-anticipated move to the Main
Market of the London Stock Exchange on 9 June 2023. The Company
simultaneously raised GBP2 million in new funds (the "Fundraise"),
to cover the completion of Monte Muambe's Phase 2 and the increase
of Altona's holding in the project to 51%.
The listing process took longer than expected, and this
admittedly resulted in delays in the completion of Monte Muambe's
maiden mineral resource estimate ("MRE") and Scoping Study,
although the Company managed to complete sufficient resource
drilling at Target 1 and Target 4 by the end of November 2022 to
support the MRE.
The Company, however, drawing on the experience of more advanced
projects in its peer group, has developed a focused strategy to
concentrate its efforts and resources on the areas of the deposit
that have the highest likelihood to be viable, as opposed to
"drilling for numbers". The continued implementation of this
strategy through the Monte Muambe Prefeasibility Study and beyond
is expected to offer opportunities to make up for these delays.
As funds became available in June 2023, the Company immediately
engaged Snowden Optiro to rapidly process collected data and
finalise the work on the MRE and the Scoping Study.
The maiden MRE published in late September 2023 reported 13.6
million tonnes at 2.42% total rare earth oxide ("TREO"), which
included 0.31% NdPr Oxide (at a 1.5% TREO cut-off). Importantly,
through the implementation of a well-designed drilling plan, Altona
ensured that 58% of the tonnage was in the Indicated category,
while the rest was in the Inferred category. This resource forms a
solid base for a future ore reserve. The 2024 drilling campaign
will be focused on increasing the MRE's tonnage, and degree of
confidence to the measured and indicated categories. This will be
achieved through down-dip drilling at Target 1 and Target 4,
in-fill drilling and resource drilling on other targets at Monte
Muambe.
On 18 October 2023, Altona published the Monte Muambe Scoping
Study. The study covers an open pit mining operation considering
Target 1 and Target 4 over an 18-year life of mine, and the
extraction and processing of 750,000 tons of ore per year. A mixed
rare earths carbonate ("MREC") will be produced through a two-step
process involving comminution and flotation to produce a
concentrate, followed by gangue leaching and caustic cracking.
With a NPV8 of USD 283.3 million, an IRR of 25%, and a life of
mine EBIDTA of USD 1.67 billion, the Scoping Study serves as an
affirmative initial validation of the potential economic viability
of the Monte Muambe project ("the Project") and provides, together
with the MRE, a solid foundation for the Project's subsequent
progression. It also enables the Company to establish its presence
amongst other prospective REE producers in Africa in a niche but
critically important industry.
The completion of the Scoping Study also means the increase of
Altona's holding in the Project to 51%. As at the date of this
report, the contractual and administrative processes to effect this
change have commenced, therefore further de-risking the project and
increasing shareholder value.
Numerous avenues for increases of the Project's value
proposition have been identified in the Scoping Study and will be
developed in the Prefeasibility Study. These include:
-- Increasing the resource base and the life of mine
-- Mining, Processing, Energy Mix and Logistics optimisation
-- Considering further on-site, in-country or regional separation and refining
-- Responsible Sourcing systems
The market for magnet metals is projected to grow five-fold by
2040, and the existing NdPr Oxide supply deficit to grow to 90,000
tonnes by that time [1] . This growth is largely driven by the
world's green energy transition, which relies on rare earths based
permanent magnets as an essential component of wind turbines and
electric vehicles. In addition, the current dominance of China over
the rare earths supply chain is seen as a geopolitical and
strategic threat by the rest of the world ("RoW") and in particular
Western governments. Supported by new Critical Minerals policies
and legislations, RoW supply chains are rapidly developing.
The future of the rare earths and magnet metals supply chain
though, is more likely to reflect an integration of China and RoW
supply chains rather than a separation. A key development that the
Company anticipates, however, is the increased importance of the
consumers demand for products manufactured with responsibly sourced
products. It is expected that sources certified and verified as
responsible will have competitive advantage as opposed to other
sources. The continued development of the Project will therefore
encompass responsible sourcing aspects and systems at an early
stage.
As Monte Muambe enters the Prefeasibility Stage, the Company
will now focus on completing exploration activities on targets
other than Target 1 and Target 4, to firm up the 2024 resource
upgrade drilling plan, and on extensive metallurgical testing. The
objective is to define, by the end of 2024, an updated MRE with an
increased tonnage and level of confidence which can be converted
into an ore reserves statement as part of the Prefeasibility
Study.
Monte Muambe is Altona's flagship project, and the Company will
therefore continue to drive its rapid development, following its
strategy focussed on viability. However, the Company, taking
advantage of its position, geological knowledge and networks in
Africa, will continue to assess new rare earths opportunities with
a view to adding more quality projects to its portfolio. This will
be done with a focus on short timelines to production, as well as
diversifying the Company's exposure in terms of deposit type (ionic
clays) and of rare earths basket (heavy rare earths).
We are looking forward to a busy and exciting time ahead as we
continue de-risking Monte Muambe with our next deliverables: the
Prefeasibility Study, a Mining Concession and our holding increased
to 70%.
Dr Cédric Simonet
CEO
Altona Rare Earths Plc
OPERATIONS REVIEW
Pre-Financial Year activities
The 2022 field campaign started in February 2022, with a
thorough soil sampling survey, and continued with Reverse
Circulation drilling at Target 1 and Target 4 in May 2022.
Work done up to 30 June 2022 allowed the Company to:
-- Identify 5 new drilling targets on the basis of soil sampling
results (Targets 1E, 7, 8, 9 and 10)
-- Confirm the shape, orientation and extent of Target 1 at
target level, and plan appropriately additional drill holes.
-- Confirm the validity of Target 4 for resource drilling
-- Gain additional understanding on the characteristics of REE
mineralisation at Monte Muambe, in particular with respect to the
existence of two different types of ore: low grade ore, with 0.5
and 1% TREO and some Niobium, and high-grade ore, with 2.4 to 2.5%
TREO in average and no Niobium, and to the geometry of the
mineralised bodies.
The high-grade mineralisation, as can be seen on this cross
section of Target 1, forms consistent and continuous zones from
surface.
Financial Year 2023 activities
Monte Muambe licence successfully renewed and transferred to
Monte Muambe Mining Limitada ("MMM")
On 26 October 2022, Prospecting Licence LPP7573L was renewed for
a further 3-year term (up to 22 May 2025) and transferred to Monte
Muambe Mining Limitada, the project's Special Purpose Vehicle.
Field activities
After a brief interruption to review drilling data, drilling
activities at Monte Muambe resumed on 12 July 2022. Activities
during the reporting year were focused on building the project's
database to back a maiden Mineral Resource Estimate, with a focus
on Target 1 and Target 4.
Drilling completed during the period totalled 2,201 meters (21
holes). This included 4 exploration holes at Target 9, while the
rest was at Target 1.
Hole Total Completion
No Target X Y Z Azimuth Dip Depth Date
-------- --------- -------------- ---------------- ---------- --------- ----- -------- ------------
MM076 T9 616,709.690 8,193,847.957 510.441 90 -55 54.8 Jul 12, 22
-------- --------- -------------- ---------------- ---------- --------- ----- -------- ------------
MM077 T9 616,770.253 8,193,844.485 539.416 90 -55 84.8 Jul 15, 22
-------- --------- -------------- ---------------- ---------- --------- ----- -------- ------------
MM078 T9 616,830.119 8,193,850.715 567.111 90 -55 84.7 Jul 16, 22
-------- --------- -------------- ---------------- ---------- --------- ----- -------- ------------
MM073 T1 617,074.876 8,195,826.149 553.284 213 -55 84.75 Jul 20, 22
-------- --------- -------------- ---------------- ---------- --------- ----- -------- ------------
MM053 T1 617,113.490 8,195,851.378 546.097 213 -55 84.87 Jul 21, 22
-------- --------- -------------- ---------------- ---------- --------- ----- -------- ------------
MM054 T1 617,168.973 8,195,792.119 562.715 213 -55 84.85 Jul 26, 22
-------- --------- -------------- ---------------- ---------- --------- ----- -------- ------------
MM074 T1 617,203.181 8,195,844.416 553.251 213 -55 150.8 Jul 27, 22
-------- --------- -------------- ---------------- ---------- --------- ----- -------- ------------
MM079 T1 617,146.434 8,195,901.754 537.240 213 -55 150.7 Jul 29, 22
-------- --------- -------------- ---------------- ---------- --------- ----- -------- ------------
MM091 T1 617,091.345 8,195,958.888 526.924 213 -55 132 Aug 4, 22
-------- --------- -------------- ---------------- ---------- --------- ----- -------- ------------
MM093 T1 617,057.290 8,195,909.039 526.968 213 -55 84.7 Aug 6, 22
-------- --------- -------------- ---------------- ---------- --------- ----- -------- ------------
MM063 T1 617,375.902 8,195,669.974 562.403 213 -55 84.8 Aug 8, 22
-------- --------- -------------- ---------------- ---------- --------- ----- -------- ------------
MM065 T1 617,483.587 8,195,688.624 548.008 213 -55 150.75 Aug 10, 22
-------- --------- -------------- ---------------- ---------- --------- ----- -------- ------------
MM066 T1 617,451.982 8,195,641.067 551.211 213 -55 84.75 Aug 13, 22
-------- --------- -------------- ---------------- ---------- --------- ----- -------- ------------
MM094 T1 616,994.254 8,195,951.692 517.843 213 -55 72.8 Aug 15, 22
-------- --------- -------------- ---------------- ---------- --------- ----- -------- ------------
MM095 T1 617,440.120 8,195,767.399 552.447 213 -55 55 Nov 9, 22
-------- --------- -------------- ---------------- ---------- --------- ----- -------- ------------
MM096 T1 617,379.712 8,195,822.855 554.475 213 -55 156 Nov 15, 22
-------- --------- -------------- ---------------- ---------- --------- ----- -------- ------------
MM100 T1 617,448.312 8,195,763.258 551.998 213 -55 36 Nov 15, 22
-------- --------- -------------- ---------------- ---------- --------- ----- -------- ------------
MM097 T1 617,293.751 8,195,839.825 555.826 213 -55 120 Nov 18, 22
-------- --------- -------------- ---------------- ---------- --------- ----- -------- ------------
MM098 T1 617,242.484 8,195,901.002 545.401 213 -55 144 Nov 22, 22
-------- --------- -------------- ---------------- ---------- --------- ----- -------- ------------
MM099 T1 617,188.363 8,195,955.179 534.597 213 -55 150 Nov 24, 22
-------- --------- -------------- ---------------- ---------- --------- ----- -------- ------------
MM101 T1 617,427.188 8,195,796.987 552.743 213 -55 150 Nov 28, 22
-------- --------- -------------- ---------------- ---------- --------- ----- -------- ------------
Collar information of holes drilled during the FY 2023
In August 2022, Altona published an updated Competent Person
Report including an Exploration Target estimate based on drilling
results at Target 1 and Target 4 up to 5 July 2023.
Tonnes (millions) TREO%
--------------- -------------------------- --------------------------
cutoff TREO% 0.5% Grade 1.0% Grade 0.5% Grade 1.0% Grade
Shell Shell Shell
--------------- ------------ ------------ ------------ ------------
1.00% 56.6 21.7 1.65 1.78
--------------- ------------ ------------ ------------ ------------
2.00% 11.5 6.5 2.41 2.47
--------------- ------------ ------------ ------------ ------------
The Exploration Target estimate:
-- provided a first-pass estimation of the potential size of the deposit,
-- confirmed the presence of high-grade zones in the mineralised system,
-- helped review and confirm the drilling plan for the remainder of the year.
Drilling done after the publication of the Exploration Target
estimate focused on the deeper parts of Target 1.
In November 2022, the Company commissioned a real time kinetics
(RTK) system on site and undertook a complete RTK survey of all
holes drilled in 2021 and 2022 as well as legacy holes.
All selected samples from the 2022 drilling campaign, as well as
re-composited samples from the 2021 drilling campaign, were shipped
to Intertek laboratories' facility in Johannesburg by early
December 2022 for preparation, and subsequently forwarded to
Intertek Perth for assay.
In addition, a batch of 20 samples was sent for mineralogical
studies. XR Diffraction results for this batch were received in
January 2023.
In June 2023, Altona contracted Snowden-Optiro, a reputable
geological consultancy company, to prepare its maiden JORC Mineral
Resource Estimate.
Post-Financial Year activities
Maiden JORC Mineral Resource Estimate
On 25 September 2023, Altona published Monte Muambe's maiden
JORC Mineral Resource Estimate, reported in the Table below using a
1.5% TREO cut-off.
Notes:
-- Million tonnes are rounded to one decimal place. Grades are
rounded to two decimal places for % and whole numbers for ppm.
-- The MRE has been reported in consideration of reasonable
prospects for eventual economic extraction (RPEEE) using a pit
shell based on a 1.5% TREO cut-off, revenue of 24.65 USD/kg TREO
MREC and average total recovery to MREC of 48%.
-- Mineral resources are reported as dry tonnes on an in-situ basis.
-- Rare earth elements are inclusive of the TREO and not additional to it.
-- "NdPr Oxide" is the sum of Nd2O3 and Pr6O11.
The MRE represents an increase in tonnage compared to the
high-grade part of the Exploration Target estimate, consistent with
the fact that additional drilling was done at Target 1 after the
Exploration Target estimate was compiled.
Estimate Parameters Tonnes (millions) Grade % TREO
Exploration
Target August
2022 1% TREO grade shell
and 2% TREO cut-off
(range) grade 6.5 2.47
------------------------- ------------------- --------------
0.5% TREO grade shell
2% TREO cut-off grade 11.5 2.41
------------------------------------------- ------------------- --------------
1.5% TREO cut-off
MRE Indicated Optimized pit shells
and Inferred Target 1 and Target
Sept 2023 4 13.6 2.42
------------------------- ------------------- --------------
Reconciliation between 2022 Exploration Target and 2023 MRE
The MRE's tonnage and grade compares favourably to Ore Reserve
Statements of more advanced carbonatite REE-projects in Monte
Muambe's peer group in Africa and in Australia.
In 2024, the Company intends to increase the tonnage and the
level of confidence of the existing MRE through:
-- In-fill drilling at Target 1 and Target 4 (to take the MRE on
these two mineralised bodies to Measured and Indicated levels);
-- Down-dip drilling at Target 1 and Target 4 (to increase the tonnage);
-- A re-evaluation of the potential viability of Target 6, which
has known high-grade mineralisation at a depth of 30 to 50m below
the surface;
-- Resource drilling at Targets 3, 9 and 11 among others.
Scoping Study
On 18 October 2023, Altona published an updated CPR including a
Scoping Study (the "Study") for the Monte Muambe project.
The Study was prepared by geology and mining consultancy firm
Snowden-Optiro, to assess the potential viability of an open pit
mining and MREC production operation, to assess project development
options, and to give sufficient confidence to the Company to
advance to the Prefeasibility Study stage.
The Study is preliminary in nature and includes material
assumptions outlined in the CPR, including product price
assumptions. Capex estimates qualify as Class 4 estimates as per
the Association for the Advancement of Cost Engineering (AACE)
Recommended Practice 47R-11. The accuracy of the opex and of the
initial capex estimate is assessed at +35 % to -30 %. The base case
includes an indicative life of mine extraction and production
schedule, which is based on a Mineral Resource Estimate, 58% of
which classified as Indicated and 42% as Inferred.
The Study takes into consideration open-pit mining of Target 1
and Target 4, at a Life of Mine ("LOM") strip ratio of 1.6, over a
period of 18 years. An anticipated 750,000 tonnes of ore per annum
will be extracted and processed through a beneficiation plant to
produce a rare earths concentrate. The beneficiation process will
include crushing, milling and flotation. The concentrate will then
be processed through a hydrometallurgical plant to produce an
average of about 15,000 tonnes of MREC per annum. The
hydrometallurgical process will involve a weak acid gangue leach,
followed by rare earths leaching and purification. The MREC product
will be packaged and transported via existing road infrastructure
to the port of Beira, in Mozambique, for export.
Schematic layout of the Monte Muambe project
Base Case Technical and Economic parameters are summarised in
the table below:
Parameter Unit Value
Ore processed Mt 13.5
------------------------- -------- --------
MREC produced kt 270.7
------------------------- -------- --------
Initial Capex M US$ 276.3
------------------------- -------- --------
Sustaining Capex M US$ 63.0
------------------------- -------- --------
Opex LoM M US$ 1,519
------------------------- -------- --------
Opex per ton MREC US$/t 5,613
------------------------- -------- --------
Gross Revenue LoM M US$ 3,670
------------------------- -------- --------
Net Revenue LoM M US$ 3,193
------------------------- -------- --------
EBITDA LoM M US$ 1,674
------------------------- -------- --------
Revenue per ton MREC US$/t 13,558
------------------------- -------- --------
Payback from first
MREC years 2.5
------------------------- -------- --------
Post tax NPV 8 M US$ 283.3
------------------------- -------- --------
Post tax NPV 10 M US$ 207.0
------------------------- -------- --------
Post tax NPV 8 (Upside
Scenario) M US$ 409.9
------------------------- -------- --------
Post tax IRR % 25%
------------------------- -------- --------
Operating margin % 42%
------------------------- -------- --------
Sensitivity Analysis
Using an NPV of US$283.3 million with an applied real discount
rate of 8%, the Project is most sensitive to revenue (price,
recovery, grade and exchange rates), less sensitive to opex and
least sensitive to capex.
Project sensitivity analysis
The Scoping Study demonstrates the potential for Monte Muambe to
become a viable mining operation.
Considerable upside potential has been identified in the Scoping
Study and will be developed further in the Prefeasibility Study
("PFS"). This includes:
-- Increase of the resource base, as well as of the LoM and/or ore extraction rate;
-- Mining parameters optimisation;
-- Processing and Metallurgy, both for the beneficiation and hydrometallurgical plants;
-- Energy sources mix and logistics options;
-- Evaluation of the possibility of doing further onsite,
in-country or regional separation and refining;
-- Setting up Responsible Sourcing systems.
Completion of Phase 2 and holding increase to 51%
On 24 October, in accordance with the Farm-Out Agreement, the
Company notified the original shareholders of Monte Muambe Mining
Lda of the successful completion of Phase 2 and of its intention to
proceed to Phase 3.
At the date of this report the contractual and administrative
processes have been initiated and completion is expected in the
next few weeks.
Phase 3 activities
Progressing Monte Muambe towards PFS
As a short-term objective, the Company intends to continue
de-risking the project through:
-- Lodging a Mining Concession application, and an application for land-rights
-- Starting the EIA Licensing process for the mining operation
-- Starting Prefeasibility Study activities with a priority on:
o Grass-root exploration activities on targets other than Target
1 and Target 4 to firm up the 2024 resource upgrade drilling
plan
o Extensive metallurgical testing and process flowsheet
development
-- Drilling aimed at producing an upgrade MRE, convertible into
an Ore Reserves Statement, by Q1 2025.
New Projects
Target generation and business development activities will also
continue, with the view of securing at least one new project during
the course of the year.
Outlook
The robust financial forecasts of the Monte Muambe Scoping Study
serve as an affirmative initial validation of the Project's
economic viability, enabling the Company to establish its presence
amongst other prospective REE producers in Africa. It provides,
together with the MRE, a solid foundation for the Project's
subsequent progression . As the Project moves into its PFS stage,
the Company will continue to work towards de-risking Monte Muambe
and, with its local partners, to optimise its technical, commercial
and financial parameters. We believe the timing for this
achievement is impeccable, at a time where the global rare earths
supply chain is diversifying away from China's decades-long
domination, and Western processing facilities are starting to come
online .
The magnet metals present at Monte Muambe are critical
components of the global green energy transition. The supply
deficit for Neodymium and Praseodymium Oxide is forecast to grow to
90,000 tonnes per year by 2040 and, to allow the decarbonisation of
energy sources, more magnet metals mines must come on stream in the
following years.
Altona intends to play its part in supporting this crucial
agenda, by working in a responsible manner to reduce the dependence
on China for critical mineral supplies. As Monte Muambe progresses,
the Company will continue to make the most of its knowledge of
African geology, local networks, and presence on the ground to
acquire and develop new projects. This will be done with a focus on
short timelines to production, as well as diversifying the
Company's exposure in terms of deposit type (ionic clays) and of
rare earths basket (heavy rare earths).
Dr Cédric Simonet
CEO
Altona Rare Earths Plc
CORPORATE REVIEW
Financial Review
Balance sheet -investment, capital expenditure, equity placing
and asset growth
The Group's total assets have increased from GBP1.4m to GBP2.7m,
largely due to the GBP2m fundraise which the Company completed on 9
June 2023 in conjunction with its LSE admission. These proceeds
were used to fund the ongoing exploration at MMM and meet corporate
debts and expenditure. Total non-current assets increased by
GBP0.4m, to give total non-current assets at year end of GBP1.4m.
This mainly correlates to the intangible assets, such as
capitalised drilling, assay studies and licence costs in relation
to MMM's LPP7573L.
The cash position increased from GBP0.3m to GBP1.1m, giving the
Group sufficient funds to complete the MRE and Scoping Study at
MMM, and commence Phase 3 of the Farm-Out Agreement in the final
quarter of 2023.
Total liabilities increased from GBP0.3m to GBP0.8m, mainly due
to convertible loan note that was entered into in February 2023 to
enable the Group to continue to meet its working capital
obligations.
Overall, this resulted in an increase in the Group's net assets
from GBP1.1 million as at 30 June 2022 to GBP1.9m at 30 June
2023.
Income Statement
The loss for the year was GBP1.3m as compared with a GBP0.8m
loss in the prior year. This increase mainly corresponds to the
increase in legal and professional fees of GBP0.2m arising from the
change in exchange (from AQSE to LSE) and the Fundraise. The
Company also incurred finance costs of GBP0.2m which arose from the
GBP0.2m loans and GBP0.3m CLNs that were arranged during the
year.
The Company is focused on controlling administration costs and
aims to keep these to a minimum. Management use a KPI to monitor
the ratio between operating costs and corporate costs and ensure
that, as far as possible, it is maximised.
Liquidity and Cash Flow
The Group monitors its cash position, cash forecasts and
liquidity regularly.
Net cash used in operating activities decreased from GBP0.8m to
GBP0.6m, this decrease is mainly due to the increase in creditors
which were all paid down post year end. Cash used in investing
activities also decreased from GBP0.9m to GBP0.5m as Phase 2 was
extended whilst the Company waited for further monies to be raised
at the Fundraise.
During the last quarter of 2022, the Company entered into a
short term loan agreement for a GBP0.2m loan, and this was paid
back before year end. In February 2023, it also issued GBP0.3m of
convertible loan notes with an interest rate of 15%. These will be
converted into shares or paid back in full in May 2024 and have
been included in the balance sheet as a short term liability.
Warrants extension
In March 2023, the Company extended the expiry date of all
existing warrants to 31 March 2025 (in prior year the Company
replaced all 20 pence warrants with new warrants with an exercise
price of 12 pence per Ordinary Shares). This exercise was completed
to recognise the value of shareholders who had previously invested
in the Company and were yet to see the expected growth.
Board appointments
On 9 June 2023:
-- Cédric Simonet, the Company's Chief Operating Officer, was
appointed Chief Executive Officer
-- Louise Adrian, the Company's Financial Controller, was
appointed Chief Financial Officer and an Executive Director
-- Simon Charles was appointed as an Independent Non-Executive Director.
Christian Taylor-Wilkinson stepped down as both Chief Executive
Officer and Director on 9 June 2023. He remains as an employee of
the Company in a Business Development capacity.
Simon Tucker resigned as a Non-Executive Director on 2 August
2022.
London Stock Exchange Listing
On 1 June 2023, the Company announced that it had raised GBP2.0
million via an oversubscribed placing of GBP1,677,300 and a
subscription of GBP322,700 through the issue of 40 million new
ordinary shares at 5 pence per share, together the "Fundraise". The
Company also issued 4.9 million fee shares to various advisers and
Directors.
On 9 June 2023, the Company announced the Admission of the
Company's entire issued share capital to the O fficial List of the
Financial Conduct Authority by way of a Standard Listing under
Chapter 14 of the Listing Rules and to trading on the London Stock
Exchange's Main Market for listed securities ("Admission"). The
Company's shares are listed under the new ticker "REE".
Post Balance Sheet Events
On 25 September 2023, the Company announced the Monte Muambe
Project's maiden JORC Mineral Resource Estimate, with a total of
13.6 million tonnes at 2.42% TREO at a cut-off grade of 1.5%
TREO.
On 18 October 2023, the Company announced the completion of an
updated Competent Person Report for Monte Muambe, including a
Scoping Study. More information is given in the Operations
Review.
Louise Adrian
CFO
Altona Rare Earths Plc
STATEMENT OF CONSOLIDATED PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME
For the year ended 30 June 2023
2023 2022
GBP'000 GBP'000
Continuing operations:
Administrative expenses (1,068) (642)
Exploration costs (not capitalised) - (59)
Listing costs (48) (100)
Operating loss (1,116) (801)
Finance costs (180) -
---------- ----------
Loss before taxation (1,296) (801)
Income tax - -
---------- ----------
Loss for the year from continuing operations (1,296) (801)
Total loss for the year attributable
to:
Owners of Altona Rare Earths Plc (1,221) (774)
Non-controlling interests (75) (27)
---------- ----------
(1,296) (801)
Other comprehensive income
Items that may be reclassified subsequently
to profit and loss:
Exchange differences on translation of
foreign operations 17 2
(1,279) (799)
---------- ----------
Total comprehensive loss attributable
to:
Owners of Altona Rare Earths Plc (1,205) (773)
Non-controlling interests (74) (26)
---------- ----------
(1,279) (799)
========== ==========
Earnings per share (expressed in pence
per share)
- Total Basic and Diluted earnings per
share (3.23)p (2.72)p
---------- ----------
STATEMENT OF CONSOLIDATED FINANCIAL POSITION
As at 30 June 2023
2023 2022
GBP'000 GBP'000
ASSETS
Non-current assets
Intangible assets 1,290 866
Tangible assets 146 173
---------- ----------
Total non-current assets 1,436 1,039
Current assets
Trade and other receivables 168 119
Cash and cash equivalents 1,130 283
---------- ----------
Total current assets 1,298 402
TOTAL ASSETS 2,734 1,441
---------- ----------
LIABILITIES
Non-current liabilities
Deferred tax liabilities - (77)
---------- ----------
Total non-current liabilities - (77)
Current liabilities
Trade and other payables (593) (314)
Convertible loan notes (256) -
---------- ----------
Total current liabilities (849) (314)
TOTAL LIABILITIES (849) (391)
---------- ----------
NET ASSETS 1,885 1,050
========== ==========
EQUITY
Share capital 2,239 1,790
Share premium 22,950 21,404
Share-based payment reserve 121 14
Other equity - CLN reserve 12 -
Foreign exchange reserve 17 1
Retained deficit (23,360) (22,139)
---------- ----------
1,979 1,070
---------- ----------
Non-controlling interest (94) (20)
TOTAL EQUITY 1,885 1,050
========== ==========
STATEMENT OF CONSOLIDATED CASH FLOWS
For the year ended 30 June 2023
2023 2022
GBP'000 GBP'000
Cash flows from operating activities
Loss for the year before taxation (1,296) (801)
Adjustments for:
Finance costs 65 -
Depreciation 24 5
Shares issued for services 306 10
Foreign exchange movements 25 2
Operating cashflows before movements
in working capital (876) (784)
Increase in trade and other receivables (49) (98)
Increase in trade and other payables 277 50
228 (48)
Net cash used in operating activities (648) (832)
Cash flows from investing activities
Investment/acquisition of subsidiary,
net of cash acquired (40) (80)
Purchases of property, plant and
equipment (3) (178)
Purchases on intangible assets (462) (617)
---------- ----------
Net cash used in investing activities (505) (875)
Cash flows from financing activities
Proceeds from issue of shares 2,000 1,688
Costs of issue (207) (78)
Proceeds from Convertible loan 275 -
notes
Costs of Convertible loan notes (28) -
Proceeds from loans 150 -
Repayment of loans (150) (56)
Finance costs (40) -
Net cash generated from financing
activities 2,000 1,554
Net increase/(decrease) in cash
and cash equivalents 847 (153)
---------- ----------
Cash and cash equivalents at beginning
of the year 283 436
Cash and cash equivalents at
the end of the year 1,130 283
========== ==========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2023
Share-based
Foreign payment
Share Share exchange reserve CLN Retained Total
capital premium reserve Issue deficit NCI equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 30
June
2021 1,632 19,869 - - - (21,365) - 136
---------- ---------- ------------ ------------- --------- ----------- --------- -----------
Comprehensive
income
Loss for the
year - - - - - (774) (27) (801)
Currency
translation - - 2 - - - - 2
NCI share in
translation
difference - - (1) - - - 1 -
---------- ---------- ------------ ------------- --------- ----------- --------- -----------
Total
comprehensive
income - - 1 - - (774) (26) (799)
Transactions
with
owners
recognised
directly in
equity
Issue of shares 158 1,627 - - - - - 1,785
Cost of shares
issued - (92) - 14 - - - (78)
Additional
transactions
with NCI - - - - - - 6 6
---------- ---------- ------------ ------------- --------- ----------- --------- -----------
Total
transactions
with owners
recognised
directly in
equity 158 1,535 - 14 - - 6 1,713
---------- ---------- ------------ ------------- --------- ----------- --------- -----------
Balance at 30
June
2022 1,790 21,404 1 14 - (22,139) (20) 1,050
---------- ---------- ------------ ------------- --------- ----------- --------- -----------
Comprehensive
income
Loss for the
year - - - - - (1,221) (75) (1,296)
Currency
translation - - 17 - - - - 17
NCI share in
translation
difference - - (1) - - - 1 -
---------- ---------- ------------ ------------- --------- ----------- --------- -----------
Total
comprehensive
income - - 16 - - (1,221) (74) (1,279)
Transactions
with
owners
recognised
directly in
equity
Issue of shares 449 1,797 - - - - - 2,246
Cost of shares
issued - (251) - 41 - - - (210)
Share-based
payments - - - 66 - - - 66
CLN Issue - - - - 12 - - 12
Total
transactions
with owners
recognised
directly in
equity 449 1,546 - 107 12 - - 2, 114
---------- ---------- ------------ ------------- --------- ----------- --------- -----------
Balance at 30
June
2023 2,239 22,950 17 121 12 (23,360) (94) 1,885
---------- ---------- ------------ ------------- --------- ----------- --------- -----------
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
ACCOUNTING POLICIES
GENERAL INFORMATION
Altona Rare Earths Plc (the "Company") is incorporated and
domiciled in England & Wales, with registered number 05350512.
Its registered office is at Eccleston Yards, 25 Eccleston Place,
London SW1W 9NF.
On 9 June 2023, the Company announced its admission to the Main
Market of the London Stock Exchange under the Standard Segment of
the Official List under the ticker "LSE:REE". The Company ceased
trading on the AQSE Growth Market on 17 March 2023.
The principal activity of the Company and its subsidiaries (the
"Group") is in rare earths exploration, and the development of
appropriate exploration projects, focusing on opportunities in
Africa. The Group is made up of the Company and the subsidiaries as
set out in note 10 below.
BASIS OF PREPARATION
The consolidated financial statements have been prepared in
accordance with UK-adopted international accounting standards and
the requirements of the Companies Act 2006. The principal
accounting policies are summarised below. They have been applied
consistently throughout the year. The financial statements have
been prepared on the historical cost basis, except for the assets
acquisition which was measured at fair value.
The functional currency for each entity in the Group is
determined as the currency of the primary economic environment in
which it operates. The functional currency of the parent company is
Pounds Sterling (GBP) as this is the currency that finance is
raised in. The functional currency of its main subsidiary is
Mozambique Meticals (MTN) as this is the currency that mainly
influences labour, material and other costs of providing services.
The Group has chosen to present its consolidated financial
statements in Pounds Sterling (GBP), as the Directors believe it is
the most relevant presentational currency for users of the
consolidated financial statements. All values are rounded to the
nearest thousand pounds (GBP'000) unless otherwise stated. Foreign
operations are included in accordance with the policies set out
below.
The preparation of financial statements requires the use of
certain critical accounting estimates. It also requires management
to exercise its judgement in the process of applying the Group's
accounting policies. The areas involving a higher degree of
judgement or complexity, or areas where assumptions and estimates
are significant to the financial information are disclosed in Note
2.
GOING CONCERN
The Company raises money for exploration and capital projects as
and when required. There can be no assurance that the Company's
projects will be fully developed in accordance with current plans
or completed on time or to budget. Future work on the development
of these projects, the levels of production and financial returns
arising therefrom, may be adversely affected by factors outside the
control of the Company.
An operating loss is expected in the 12 months subsequent to the
date of these financial statements. As a result the Group will need
to raise funding to provide additional working capital within the
next 12 months. The ability of the Group to meet its projected
expenditure is dependent on these further equity injections and /
or the raising of cash through bank loans or other debt
instruments, and/or government grants, and/or loans. These
conditions necessarily indicate that a material uncertainty exists
that may cast significant doubt over the Group's ability to
continue as a going concern and therefore their ability to realise
their assets and discharge their liabilities in the normal course
of business. Whilst acknowledging this material uncertainty, the
Directors remain confident of raising finance and therefore, the
Directors consider it appropriate to prepare the consolidated
financial statements on a going concern basis. The consolidated
financial statements do not include the adjustments that would
result if the Group were unable to continue as a going concern.
The Auditors have made reference to going concern by way of a
material uncertainty within the financial statements.
POST REPORTING DATE EVENTS
On 11 July 2023 an additional 1,033,600 Ordinary Shares were
issued in lieu of fees of GBP51,680, including an amount of
GBP50,000 to settle fees owed to Leander PR Limited, a company
wholly owned by Christian Taylor-Wilkinson.
On 25 July 2023, Cedric Simonet transferred the 0.1% of the
share capital of Altona Mozambique, Lda and Altona Mozambique II,
Lda that he was holding on behalf of Altona Rare Earths Mauritius
Limited to Altona Rare Earths Mauritius Limited, (both for nil
consideration), giving it a 100% total holding of the share capital
in both companies.
On the same day, Altona Rare Earths Mauritius Limited,
transferred 5% of the share capital of Altona Mozambique, Lda and
Altona Mozambique II Lda, ( for nil consideration), to Ossanzaya
Empreendimentos Lda, a company registered in Mozambique.
On 25 September 2023, the Company published its Maiden Resource
Estimate which reported that there is an estimated 13.6 million
tons at 2.42% TREO with a cut-off grade of 1.5% TREO. The Scoping
Study published on 18 October 2023 demonstrated the potential for
Monte Muambe to become a viable mining operation and provided the
Company with sufficient confidence to proceed with the
Prefeasibility Study and with Phase 3 of the Farm-Out
Agreement.
The Company has also initiated the contractual and
administrative process to increase its holding in MMM to 51% for a
further consideration of GBP40,000 and one million shares.
-ends-
[1] Adamas Intelligence, "Rare Earth Magnet Market Outlook to
2040", Q2 2023
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END
FR NKQBQNBDDFKB
(END) Dow Jones Newswires
October 24, 2023 09:50 ET (13:50 GMT)
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