Alexander Mining PLC Final Results (0224O)

TIDMAXM

RNS Number : 0224O

Alexander Mining PLC

14 May 2018

14 May 2018

Alexander Mining plc

Audited Results for the Year Ended 31 December 2017

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 2017.

Highlights

-- Successful placings to raise GBP750,000 and GBP600,000 to fund business development and working capital requirements, leaving the Company well financed to review complementary opportunities in the mining sector.

-- Accudo Metals Pty Ltd. commitment after completing a positive scoping study to proceed with a definitive feasibility study ("DFS") on the potential use of Alexander's leaching technology under the existing licence agreement, subject to completion of its funding arrangements.

-- Continued granting of important patents for leaching of oxides using AmmLeach(R) and sulphides using HyperLeach(R) in key mining jurisdictions, including Canada and USA respectively.

-- Continuing and increasingly broad mining industry interest in using AmmLeach(R) for base metals recovery from amenable deposits as the focus on limiting capital deployment and reduction in All in Sustaining Costs ("AISC") for mines remains a priority for the global mining industry.

-- Investigating exciting potential to use its leaching technologies for the recovery of cobalt, the key and currently irreplaceable component for delivery of thermal stability of most electric vehicle lithium ion batteries.

-- New research and development ("R&D") initiatives for the recovery of metals lithium and vanadium which have important use in high technology energy storage equipment and solutions.

Chairman's Statement & Review of the Year

Dear Shareholders and Investors.

Herewith I take pleasure on behalf of your Board of Directors in presenting for your consideration the Company's results for the year ended 31 December 2017, along with commentary on the operating environment and related outlook.

The year under review was filled with mixed sentiment in the global mining sector and was compounded by resource nationalism in some countries, in particular in Latin America and Africa. Generally, though, the mining and natural resources investment market remained positive. Within this volatile economic and political environment, precious metals prices, including gold and silver, increased the demand for risk hedging against government and public debt levels, US dollar weakness and fear of Fiat currency failure.

The price of base metals, Alexander's main area of activity, and related base metals equities continued to rise on LME stock depletion, stronger than expected economic demand and continued significant capital inflows. This is despite the advent of crypto-currencies which we believe have attracted significant funding from the usual junior resource investment market. Increased investment in exploration and development activity in the infrastructure commodities and energy storage or battery metals has continued during the year and underpinned these further potential price rises.

Some key operating environment features for the Company that we expect to impact in the year ahead and potentially beyond this horizon are as follows:

-- Junior mining company valuations are currently perceived as being generally positive and still trending upwards, in particular in the precious metals, infrastructure commodities, energy fuels and battery metals sectors.

-- AISC improvements, ongoing productivity initiatives and capital investment in technologies is also a continuing global trend in the mining sector.

-- Consolidation of companies' positions in highly prospective brownfield mining districts through joint-ventures and mergers & acquisitions, in search of critical mass and optionality for investors, particularly in the junior sector where Alexander operates.

-- Exploration programmes, project developments and old mines are being restarted, in particular in the base & precious metals commodities, but also in energy fuels (uranium & coal) or related energy storage metals, i.e. cobalt, vanadium and lithium.

Regardless of sentiment in general, at Alexander our management and Board have remained focused on our core activity of seeking and/or acquiring commercialisation opportunities for our technologies to release the embedded value in your Company.

During the year, the Company continued to add granted patents in key mining jurisdictions to its portfolio of intellectual property, as well as continuing with its R&D activities under various agreements and, where appropriate, make additional applications.

The Company broadened its range of metals of interest with its joint venture ("JV") project for the recovery of lithium from hard rock sources. This has generated significant industry interest, including the provision of samples, from several companies in the mining industry. Pursuant to this interest, the JV agreement between Alexander and Dr. Nicholas Welham was varied to include the testing of the potential process on a wider range of lithium bearing minerals, ores and concentrates.

With the receipt of suitable samples, the R&D laboratory work has been initiated. Due to procedural issues beyond Alexander's control, the test work suffered a delay and the Company has been working with Dr. Welham to rectify the matter.

In February 2017, the Company's joint broker, Turner Pope Investments, released a comprehensive research note on Alexander for the general market which is to be found on the Company's website. This was key as we seek to broaden and deepen the understanding of investors to the potential embedded within the Company's intellectual property and business in general.

The Company was granted in March 2017 an important patent for the leaching of zinc in Canada, one of the world's foremost mining sector jurisdictions. The patent, the Australia and USA equivalent of which was granted on 30 August 2012 and 3 February 2015 respectively, describes a method for leaching zinc from zinc-bearing carbonate ore. In November 2017, a further patent was added for our HyperLeach(R) technology in the USA and which describes a method for leaching one or more target metals from a sulphide ore and/or concentrate.

Accudo's commitment in June 2017 to proceed with a DFS on the potential use of our leaching technology under the existing licence agreement between us is highly significant, albeit being delayed in execution due to finalising of its own funding arrangements. We continue to look forward to working together closely on this copper project opportunity in Australia.

In August 2017, the Company signed an introducer's agreement with Duard Capital Ltd. ("Duard") for the potential introduction of commercial opportunities for its leaching technologies in Zambia. Zambia, with its world renowned Copperbelt geology, is a noted mining country with significant copper production growth potential. It is highly prospective for the use of Alexander's technology for the recovery of copper and cobalt.

In September 2017, Alexander announced that it had agreed a significant new R&D JV project ("Project") to investigate the potential recovery of vanadium from amenable ores ("Vanadium Leaching Technology"). Applications for vanadium have expanded dramatically over the last year as it found a new industrial use and is the key component of large 'flow-through' energy storage components known as Redox Batteries, which are already achieving commercial adoption for municipal size grid storage applications in the USA.

The Project is between Alexander, Australian company Multicom Resources Pty Ltd ("Multicom"), and John Webster Innovations Proprietary Limited. If the JV is successful, the potential use of a new Vanadium Leaching Technology would initially be focused on Multicom's Saint Elmo vanadium project in North Queensland, Australia.

Financial

The Company has continued to be assiduous in keeping its overheads to the minimum necessary, whilst maintaining required expenditure on business development and intellectual property protection. Expenses overall have once again been managed lower year-on-year.

In February 2017 and in November 2017, the Company raised, through equity placings of new ordinary shares to institutional and other investors, gross amounts of GBP750,000 and GBP600,000 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. The Company's cash position at 31 December was GBP995,000.

With the net proceeds from the placings and based on the current budget, the Company should have adequate working capital through until the end of June 2019.

Commercialisation activities

We remain optimistic that we may benefit from a change in the ownership of the Sivas copper mineral property ("Sivas") in the Republic of Turkey where we have maintained interest and involvement in developing the optimum processing method using Alexander technologies.

Separately, Alexander has investigated several other commercialisation opportunities for its Leaching Technologies to recover copper, cobalt and zinc in various countries. In particular, we have had strong interest from companies active in Africa and also signed a marketing agreement with Dr. Jadambaa Temujin, currently Chief Research Scientist at the Institute of Chemistry and Chemical Technology, part of the Mongolian Academy of Sciences, for Mongolia.

Lithium recovery R&D

In March 2017, Alexander announced an exciting new R&D 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 be completed in a few months' time following some procedural delays. 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 expected to take 12-18 months to complete.

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 initiative, the company is involved in innovative processing technology for four of the so-called 'technology metals of the future' - copper, cobalt, vanadium and lithium. All of them have an essential use in energy storage units or batteries for either electric vehicle ("EV") or Grid power storage unit manufacture. There is evidence to suggest that Lithium-Ion batteries also have significant growth potential for use in the grid power electricity storage sector with first commercial contracts now under adoption in the USA.

MetaLeach(R) registered patent summary

Method Country

AmmLeach(R) family patents

Ammoniacal Leaching Peru, South Africa, African Regional Intellectual Property Organization ("ARIPO"), Australia, Canada,

Mexico, USA, Democratic Republic of the Congo, China

   Extracting Zinc from Aqueous Ammoniacal Solutions                             Mexico, USA 

Leaching Cobalt from Oxidised Cobalt Ores ARIPO, South Africa

   Leaching of a Copper-containing Ore                                                      Australia 

Leaching Zinc from a Zinc Ore Canada, USA

Leaching Zinc Silicate Ore Australia

   Recovering Cobalt from Cobalt-Containing Ores                                      Australia 
   Leaching of Copper and Molybdenum                                                      USA 

HyperLeach(R) family patents

Oxidative Leaching of Molybdenum -

Rhenium Sulfide Ores and/or Concentrates Australia, Chile, Mongolia, USA,

Oxidative Leaching of Sulfide Ores and/or Concentrates Australia, Canada, Mongolia, USA

Note: ARIPO includes: Botswana, Namibia, Zambia and Zimbabwe.

Intellectual property

Continued success in the granting of important patents occurred during 2017, encompassing our AmmLeach(R) and HyperLeach(R) inventions, with more patent applications in the pipeline. The table above summarises those patents granted to date.

Directorate Change

During the latter part of the year the Board of Alexander announced the resignation of Matt Sutcliffe from his position as Executive Chairman and director of the Company due to health reasons.

Matt founded Alexander and has been a valued member of the board since the Company's admission to AIM in 2005. The board expresses its sincere appreciation to him for his tremendous contribution over the years, and wishes him all the very best. Matt remains a supportive shareholder of the Company.

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.

Shareholder voting process

To further reduce the environmental impact, we will be removing paper from the voting process for future meetings in favour of a quicker and more secure method of voting online via our registrars' website. You will however be able to request a paper proxy if you wish from our registrars at the appropriate time.

Outlook

Alexander will, we believe, begin to benefit significantly from its technological and market positioning during 2018 and beyond. In our view, there is a clear investment trend in physical and tradeable commodities. This includes infrastructure and energy related commodities, i.e. copper and zinc, both of which are already in or close to supply/demand deficit; battery metals for the EV markets (nickel, cobalt and lithium) which, with targeted technology adoption rates are driving major order of magnitude deficits; and grid storage markets (vanadium) and/or the junior mining equities that hold such assets or the technologies to enhance them, like Alexander.

This therefore continues to offer shareholders and potential investors strong fundamentals in the Alexander business and in the progressive project developments we are engaged in.

Your Board has remained focused in executing its clearly defined investment plans at all levels and given the background of the Company's directors and senior employees, we are also actively reviewing several complementary opportunities of interest in the mining sector. However, we continue to remain cautious with regards to the deployment of the Company's financial resources.

Finally, I would like to thank you, Alexander's valued shareholders, for your continuing support and our employees, directors, consultants and advisers for their commitment during difficult times past and for the bright future we see ahead.

Alan M. Clegg

Non-Executive Chairman

14 May 2018

For further information, please contact:

 
 Martin Rosser 
  Chief Executive 
  Mobile: [phone] 
  341 
 
 
   Alexander Mining plc 
   Tel: [phone] 
   Email: [e-mail] 
   Website: www.alexandermining.com 
 
 Northland Capital Partners 
  Limited 
  Matthew Johnson / Dugald 
  J. Carlean 
  (Corporate Finance) 
  John Howes 
  (Corporate Broking) 
  [phone] 
 
  Turner Pope Investments 
  (TPI) Ltd 
  Andy Thacker 
  [phone] 
 

Consolidated income statement for the year ended 31 December 2017

 
                                            2017      2016 
                                         GBP'000   GBP'000 
-------------------------------------   --------  -------- 
 
 Continuing operations 
 Revenue                                       -         - 
 
 Gross profit                                  -         - 
 Administrative expenses                   (329)     (435) 
 Research and development 
  expenses                                 (101)     (144) 
 
 Operating loss                            (430)     (579) 
 Finance income                                -         - 
 Finance cost                                  -       (4) 
 
 Loss before taxation                      (430)     (583) 
 Income tax expense                            -         - 
-------------------------------------   --------  -------- 
 
 Loss for the year from continuing 
  operations                               (430)     (583) 
 Loss for the year                         (430)     (583) 
 
 Basic and diluted loss per 
  share (pence): 
  from continuing operations             (0.03)p   (0.08)p 
 
   All components of profit or loss for the year 
   are attributable to equity holders of the parent. 
 

Consolidated statement of comprehensive income for the year ended 31 December 2017

 
                                    2017      2016 
                                 GBP'000   GBP'000 
-----------------------------   --------  -------- 
 Loss for the year                 (430)     (583) 
 
 Other comprehensive income:           -         4 
 
 Total comprehensive loss 
  for the year attributable 
  to equity holders of the 
  parent                           (430)     (579) 
------------------------------  --------  -------- 
 
 

Consolidated balance sheet as at 31 December 2017

 
                                       2017       2016 
                                    GBP'000    GBP'000 
-------------------------------   ---------  --------- 
 
 Assets 
 Trade and other receivables             37         39 
 Cash and cash equivalents              995        259 
--------------------------------  ---------  --------- 
 Total current assets                 1,032        298 
--------------------------------  ---------  --------- 
 Total assets                         1,032        298 
--------------------------------  ---------  --------- 
 
 Equity attributable to owners 
  of the parent 
 Issued share capital                15,352     14,404 
 Share premium                       14,044     13,772 
 Accumulated losses                (28,866)   (28,501) 
--------------------------------  ---------  --------- 
 
 Total equity                         (530)      (325) 
--------------------------------  ---------  --------- 
 
 Liabilities 
 Current liabilities 
 Trade and other payables               502        623 
 Total current liabilities              502        623 
--------------------------------  ---------  --------- 
 
 Total liabilities                      502        623 
--------------------------------  ---------  --------- 
 
 Total equity and liabilities         1,032        298 
--------------------------------  ---------  --------- 
 

Consolidated statement of cash flows for the year ended 31 December 2017

 
                                         2017      2016 
                                      GBP'000   GBP'000 
---------------------------------    --------  -------- 
 Cash flows from operating 
  activities 
 Operating loss - continuing 
  operations                            (430)     (579) 
 Decrease / (Increase) in 
  trade and other receivables               2      (14) 
 (Decrease) / Increase in 
  trade and other payables              (121)        93 
 Increase in provisions                     -         - 
 
 Share option & warrant 
  charge                                   21        49 
 Inter-company recharges                    -         - 
---------------------------------    --------  -------- 
 Net cash outflow from operating 
  activities                            (528)     (451) 
-----------------------------------  --------  -------- 
 
 Cash flows from investing 
  activities 
 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                           1,264       549 
 
 Net cash inflow from financing 
  activities                            1,264       549 
-----------------------------------  --------  -------- 
 
 Net increase in cash and 
  cash equivalents                        736        98 
 Cash and cash equivalents 
  at beginning of year                    259       165 
 Exchange differences                       -       (4) 
-----------------------------------  --------  -------- 
 Cash and cash equivalents 
  at end of year                          995       259 
-----------------------------------  --------  -------- 
 

Consolidated statement of changes in equity for the year ended 31 December 2017

 
                                Share      Share   Accumulated     Total 
                              capital    premium        losses    equity 
                              GBP'000    GBP'000       GBP'000   GBP'000 
 At 1 January 2016             13,825     13,822      (27,971)     (324) 
--------------------------  ---------  ---------  ------------  -------- 
 Accumulated loss 
  for year                          -          -         (583)     (583) 
 Translation differences            -          -             4         4 
--------------------------  ---------  ---------  ------------  -------- 
 Total comprehensive 
  loss for the year 
  attributable to 
  equity holders 
  of the parent                     -          -         (579)     (579) 
--------------------------  ---------  ---------  ------------  -------- 
 Share option & 
  warrant costs                     -          -            49        49 
 Costs of share 
  issue                             -       (34)             -      (34) 
 Shares issued 
  including warrant 
  charge                          579       (16)             -       563 
--------------------------  ---------  ---------  ------------  -------- 
 At 31 December 
  2016                         14,404     13,772      (28,501)     (325) 
--------------------------  ---------  ---------  ------------  -------- 
 Accumulated loss 
  for year                          -          -         (430)     (430) 
 Total comprehensive 
  loss for the year 
  attributable to 
  equity holders 
  of the parent                     -          -         (430)     (430) 
--------------------------  ---------  ---------  ------------  -------- 
 Share option & 
  warrant costs                     -          -            21        21 
 Costs of share 
  issue                             -      (100)             -     (100) 
 Shares issued 
  including warrant 
  charge                          948        372            44     1,364 
--------------------------  ---------  ---------  ------------  -------- 
 At 31 December 
  2017                         15,352     14,044      (28,866)     (530) 
--------------------------  ---------  ---------  ------------  -------- 
 

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 2017 or for the year ended 31 December 2016, but is derived from those accounts. The financial statements for 2017 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 a point in relation to going concern as follows:

"Material uncertainty related to going concern

We draw attention to Note 2(a) to the financial statements concerning the group and company's ability to continue as a going concern. The matters explained in Note 2(a) relating to the group's current cash position and uncertainty surrounding the group's ability to generate positive operating cash flows, indicate the existence of a material uncertainty which may cast significant doubt over the group and company's ability to continue as a going concern. Our opinion is not modified in respect of this matter."

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. It is not currently anticipated that further funding will be required in the next twelve months due to the relatively strong cash position of GBP995,000 at 31 December 2017. The cash flow forecasts prepared by the directors indicate that the Company should be able to cover its operating costs for a twelve months period, however the minimal headroom in the forecast together with the uncertainty surrounding the Group's ability to generate positive operating cash flows indicates a significant risk relating to going concern.

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 Group will generate positive operating cash flows. 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 (2016: nil).

4. Post balance sheet events

On 29 January 2018 Alexander reported that it had received notification that its MetaLeach Limited ("MetaLeach") subsidiary has been granted a patent for a Method of Oxidative Leaching of Sulfide Ores and/or Concentrates in Canada, patent number 2,763,371. The patent has a standard term of 20 years from the effective date of 26 May 2010 (being the date of original filing - 'HyperLeach(R) ' Patent).

On 21 February 2018 Alexander reported a commercial and technical partnership agreement with Proses Mühendislik, Danı manlık, İn aat ve Tasarım AS ("Proses"), a mineral processing specialist consultancy based in Turkey, Iran and the rest of the Middle-East, to investigate the commercial use of Alexander's base metals leaching technology. Subject to securing the necessary funding, Proses proposes to design and construct a semi industrial scale processing plant ("SISP") using Alexander's technology in Turkey and/or Iran. Proses plans to investigate a potential SISP at the world class Mehdiabad zinc project in Iran. There is the potential for Alexander to agree a technology licence agreement with suitable project owners introduced by Proses, with an agreed success fee payable to Proses.

On 26 February 2018 Alexander reported that it has received notification that its MetaLeach Limited ("MetaLeach") subsidiary had been granted an African Regional I.P.O. ("ARIPO") Patent in Zambia for a Method for leaching cobalt from oxidised cobalt ores, patent number AP 4394. The patent has a standard term of 20 years from the effective date of 6 August 2010 (being the date of original filing of the PCT Application from which the ARIPO patent is derived).

Annual Report

The Annual Report will be posted to all shareholders by 1 June 2018 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 2(nd) 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 10:30am on Thursday 28 June 2018. 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(R) and HyperLeach(R) 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.

This information is provided by RNS

The company news service from the London Stock Exchange

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May 14, 2018 11:19 ET (15:19 GMT)