MetalNRG PLC Interim Results to 30 June 2024

RNS Number : 1062G

MetalNRG PLC

30 September 2024

 

30 September 2024

 

MetalNRG plc

 

("MetalNRG", the "Company" or together with its subsidiaries the "Group")

 

Interim Results to 30 June 2024

 

MetalNRG plc (LON:MNRG), the natural resources and energy investment company, announces its unaudited interim results for the six months ended 30 June 2024 ("H1" or the "Period").

 

The focus for the Company during the Period has been implementing the conclusions of its strategic business review, as announced on 28 September 2023. The Company's executive team anticipated a potential bull-market cycle in the metals and mining sector, which is now materialising, and MetalNRG is positioning itself to benefit from the further predicted upside. MetalNRG is working towards building a global natural resources business to deliver industry leading returns to shareholders through a consolidation of tier two assets over the next five years.

 

As stated in the Company's annual results for the year ended 31 December 2023, announced on 30 April 2024, initially MetalNRG are concentrating primarily on copper projects to reposition the Company.

 

MetalNRG are focused on commodities which face high demand due to global macroeconomic, energy transition, and technology trends.  The Company's executive team has reviewed more than 100 projects globally and has now reduced this extensive list to a short-list of around ten projects which MetalNRG are progressing.  These projects include a number that, if acquired would constitute a reverse takeover under the Listing Rules as they would exceed 100% of the relevant class tests.  The current primary focus is on one particular copper project that the Company are in advanced discussions to secure.  The Company will make further announcements on this as appropriate.

 

During the Period the Company has also strengthened its advisory team including the appointment of Hannam & Partners as financial adviser, PKF as auditor, OHS Secretaries as company secretary and IFC Advisory as financial public relations and investor relations adviser.

 

As part of the Company's move to focus exclusively on the natural resources sector the Company sold its 10.97% stake in EQTEC Italia MDC Srl (Italia MDC"), a company operating a waste to energy plant in Italy, as announced on 31 May 2024.  The Company's stake in Italia MDC was sold to the provider of an unsecured facility agreement (the "Facility Agreement") entered into by the Company in July 2020.   The Facility Agreement had provided the Company with gross funding of £580,000, with £316,313 owed by the Company, including accrued interest, under the Facility Agreement at the time of the Italia MDC sale.  The provider of the Facility Agreement entered into agreement with the Company to acquire the Company's stake in Italia MDC for an amount equal to the outstanding balance under the Facility Agreement and the Facility Agreement was cancelled.

Investments and operations

IMC-Uranium Project in Kyrgyzstan

MetalNRG has a significant interest in the Kamushanovskoye Uranium Deposit, a uranium clean-up project in the Kyrgyz Republic, with low CAPEX requirements. The project is currently owned by International Mining Company Invest Inc ("IMC). MetalNRG holds a 9.9% stake in IMC, with an option to increase that interest. The value of MetalNRG's stake in IMC was fully impaired in 2022, and is held at zero value, due to the previous prohibition on uranium mining in the Kyrgyz Republic.

However, the Company announced on 17 June 2024 that the Parliament of Kyrgyzstan has approved a bill lifting the ban on prospecting, exploration, development and mining uranium and thorium in the Kyrgyz Republic.  This has now been signed into law by the country's President.

This latest development offers the Company additional optionality with regard to the Kamushanovskoye Uranium Deposit.  MetalNRG are exploring all available options to maximise shareholder value from this project, including pursuing the arbitration process that IMC lodged last year, while the ban was still in force, and the possible sale of the Company's interest in the project. The lead on this project is taken by our local partners, with whom we are working closely.

MetalNRG's internally estimated NPV of this project was, prior to the ban on uranium mining in Kyrgyzstan, approximately US$250 million (based on current prices of US$91/lb for U3O8). This figure is subject to revision following the reversal of the uranium mining ban.

Lake Victoria Gold in Tanzania

The Company maintains a small 3% equity stake in Lake Victoria Gold, ("LVG") because of cash advances to LVG converting into shares after the Company terminated its investment in this gold project in Tanzania. LVG is a rapidly growing gold exploration and development company listed on the TSX Venture Exchange. LVG is principally focused on growth and consolidation in the highly prolific and prospective Lake Victoria Goldfield in Tanzania. LVG has a 100% interest in the Tembo Gold project which has over 50 thousand meters of drilling and is located adjacent to Barrick Gold's 20Moz Bulyanhulu Mine. LVG recently announced the acquisition of two deposits that support their objective of accretive growth and consolidation. The Imwelo (fully permitted for production) and Dora projects, located approximately 12 km from AngloGold Ashanti's flagship Geita Gold Mine, both have potential for significant resource growth. MetalNRG continues to maintain its position, but has no active role in LVG.

 

Gold Ridge - Gold in Arizona

 

Gold Ridge is the Company's 100% owned, previously producing gold mines in Arizona. Gold Ridge continue to offer upside for the Company. Following the completion, by SRK Consulting, of their Competent Persons Report March 2021 which pointed to the possibility of an open pit opportunity, the Company completed additional soil sampling which further confirmed the opportunity. The Company is now seeking earn in partners to enable further development of the asset and we expect to make further announcements on progress in the coming months.

 

BritNRG Limited

 

The Company announced on 24 January 2024 the signing of an out of court settlement of all litigation, current and pending, between the Company and BritENERGY Holdings LLP, BritNRG Limited and Mr Pierpaolo Rocco (together the "Counterparties"). MetalNRG and the Counterparties entered into a Global Settlement Agreement.  Under the Global Settlement Agreeement, BritENERGY Holdings LLP paid MetalNRG £20,000 as a costs contribution for the legal fees awarded to MetalNRG following the high court judgment against BritNRG and BritENERGY in September 2022.  Additionally, MetalNRG agreed to provide specific non-financial based support to the Counterparties, in respect of a professional negligence claim brought by the Counterparties against their former legal advisors (the "PN Claim"). Under the terms of the Global Settlement Agreement MetalNRG will receive 25% of any damages that are awarded in favour of the Counterparties in the PN Claim. The PN Claim relates to alleged negligence in the advice received during and after the transactions which led to the original claims brought by MetalNRG against the Counterparties. There can be no guarantee that MetalNRG will receive any payment under this arrangement.

 

Additionally, as part of the Global Settlement Agreement BritENERGY Holdings LLP will acquire (or will procure purchasers for) MetalNRG's remaining equity shareholding in BritNRG Limited, for a consideration of no less than £180,000 at a future date and in respect of which an interim payment of £40,000 was made. The Global Settlement Agreement also contained a comprehensive waiver of all claims and addressed the termination of all other arrangements (including obligations to regulators and third parties). No admission of liability was made by any of the parties.

 

Financial Review

 

MetalNRG reported an unaudited operating loss for the six months period ended 30 June 2024 of £1,374,111 which includes £20,344 in legal and professional fees relating to the BritNRG Ltd and related claims (six months period to 30 June 2023: an unaudited operating loss of £509,176).

 

Basic and diluted loss per share for the period was 0.09p (six months period to 30 June 2023: Basic loss per share and diluted loss per share was 0.04p).

 

Outlook

 

The remainder of the year presents the Company with large opportunities. We expect to see the culmination of the last 12 month's work come to fruition later in the year and the Company looks forward to supplying further updates as matters progress.

 

Responsibility Statement

 

We confirm that to the best of our knowledge:

 

·      The interim financial statements have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting, as adopted by the EU;

·      The interim financial statements give a true and fair view of the assets, liabilities, financial position and loss of the Group;

·      The interim report includes a fair review of the information required by DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the interim financial information, and a description of the principal risks and uncertainties for the remaining six months of the year; and

·      The interim financial information includes a fair review of the information required by DTR 4.2.8R of the Disclosure and Transparency Rules, being the information required on related party transactions.

 

Rolf Gerritsen, Executive Director

27 September 2024

 

For further information, please contact:

MetalNRG PLC
Christopher Chadwick		[phone]
Rolf Gerritsen		[phone]
Hannam & Partners - Financial Adviser
Andrew Chubb		[phone]
Peterhouse Capital Limited - Joint Broker
Lucy Williams	+ 44 (0) 207 469 0930
Duncan Vasey	+ 44 (0) 207 469 0930
S I Capital Limited - Joint Broker
Nick Emerson	[phone]
IFC Advisory Limited - Financial PR and IR
Tim Metcalfe	[phone]
Florence Chandler	[phone]

 

 

Consolidated Statement of Profit or Loss

 

			6 months to		6 months to		Year ended 31 December 2023
			30 June 2024		30 June 2023
			Unaudited		Unaudited		Audited
			£		£		£
Revenue			-		-		-
Cost of sales			-		-		-
Gross profit			-		-		-
Administrative expenses			(1,291,223)		(543,267)		(1,587,903)
Other operating income			-		-		-
			-		-		-
Operating loss before tax			(1,291,223)		(543,267)		(1,587,903)
Taxation			-		-		-
Finance income			10,058		51,657		51,657
Finance costs			(92,946)		(17,566)		(92,263)
Revaluation of investments							175,000
Loss for the period			(1,374,111)		(509,176)		(1,453,509)
Attributable to:
Equity holders of the parent			(1,374,111)		(509,176)		(1,453,509)
Non-controlling interests			-		-		-
			(1,374,111)		(509,176)		(1,453,509)
Earnings per share - see note 3
Basic			(0.09) pence		(0.04) pence		(0.12) pence
Diluted			(0.09) pence		(0.04) pence		(0.12) pence

 

Consolidated Statement of Comprehensive Income

 

			6 months to  30 June 2024		6 months to  30 June 2023		Year ended 31 December 2023
			Unaudited £		Unaudited £		Audited £
Loss after tax			(1,374,111)		(509,176)		(1,453,509)
Items that may subsequently be reclassified to profit or loss:
-     Foreign exchange movements -     Share option charge			(1,536) 34,951		(848) 9,744		(136) 19,649
Total comprehensive loss			(1,340,696)		(500,280)		(1,433,996)
Attributable to:
Equity holders of the parent			(1,340,696)		(500,280)		(1,433,996)
Non-controlling interests			-		-		-
			(1,340,696)		(500,280)		(1,433,996)

Consolidated Statement of Financial Position

 

				6 months to 30 June 2024			6 months to  30 June 2023	Year ended 31 December 2023
				Unaudited £			Unaudited £	Audited £
Non-current assets Intangible fixed assets Tangible fixed assets Investments Investments in associates Available for sale assets				575,077 - 258,109 - -		575,077 - 863,387 - -			575,077 - 1,038,387 - -
Total non-current assets				833,186		1,438,464			1,613,464
Current assets Trade and other receivables Cash and cash equivalents				15,761 76		72,298 34,405			72,357 5,372
Total current assets				15,837		106,703			77,729
Current liabilities
Trade and other payables				(3,165,550)		(1,831,226)			(2,914,746)
Total current liabilities				(3,165,550)		(1,831,226)			(2,914,746)
Non-current liabilities
Other non-current liabilities				(21,094)		(25,969)			(22,191)
Total non-current liabilities				(21,094)		(25,969)			(22,191)
Net assets				(2,337,622)		(312,028)			(1,245,744)
Equity Share capital Share premium Share based payment reserve Retained losses Foreign currency reserve				384,631 6,717,248 92,248  (9,515,874) (15,875)		359,997 6,495,541 47,392  (7,197,430) (17,528)			359,997 6,495,541 57,298 (8,141,763) (16,817)
Equity attributable to equity holders of the parent				(2,337,622)		(312,028)			(1,245,744)
Non-controlling interests				-		-			-
Total equity				(2,337,622)		(312,028)			(1,245,744)

 

Consolidated Statement of Cash Flows

 

				6 months to  30 June 2024		6 months to  30 June 2023		Year ended 31 December 2023
				Unaudited £		Unaudited £		Audited £
Cash flow from operating activities
Operating loss				(1,374,111)		(509,177)		(1,453,509)
Loss on sale of investment				-		-		-
Revaluation of investments				-		-		(175,000)
Foreign exchange				941		(848)		(136)
Finance income				(10,058)		(51,657)		(51,657)
Finance costs				92,946		17,566		92,263
Bonus shares issued				-		-		-
Share option charge				34,951		9,744		19,650
Increase/(decrease) in creditors				352,273		3,513		684,372
Decrease/(increase) in debtors				66,654		560,912		(560,853)
Net cash used in operating activities				(836,405)		30,054		(323,164)
Cash flows from investing activities
Payments for intangible assets				-		-		-
Payments for tangible fixed assets				-		-		-
Proceeds from sale of investments				780,279		-		-
Purchase of investments				-		(2,543)		(2,543)
Net cash used in investing activities				780,279		(2,543)		(2,543)
Cash flows from financing activities
Proceeds from issue of shares and warrants				231,341		-		-
Cost of shares issued				15,000		-		-
Convertible loan note repayment				(318,291)		(32,830)		(32,830)
Bridging loan repayment				-		-		(69,624)
Bridging and other loan financing				122,780		15,000		408,809
Net cash generated from financing activities				50,830		(17,830)		306,355
Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of period				(5,296)   5,372		9,681   24,724		(19,352)   24,724
Cash and cash equivalents at end of period				76		34,405		5,372

 

 

 

Consolidated Statement of Changes in Equity
		Share capital	Share premium	Share based payment reserve	Retained earnings	Foreign currency reserve	Non-controlling interest	Total
		£	£	£	£	£	£	£
As at 30 June 2022		350,349	6,422,036	27,770	(5,469,766)	(14,249)	-	1,316,140
Loss for the period		-	-	-	(1,218,488)	-	-	(1,218,488)
Translation differences		-	-	-	-	(2,431)	-	(2,431)
Total comprehensive income		-	-	-	(1,218,488)	(2,431)	-	(1,220,919)
Share option charge		-	-	9,878	-	-	-	9,878
Shares issued		9,648	68,255	-	-	-	-	77,903
Share issue costs			5,250					5,250
Total contributions by and distributions to owners of the Company		9,648	73,505	9,878	-	-	-	93,031
As at 31 December 2022		359,997	6,495,541	37,648	(6,688,254)	(16,680)	-	188,252
Loss for the period		-	-	-	(509,176)	-	-	(509,176)
Translation differences		-	-	-	-	(848)	-	(848)
Total comprehensive income		-	-	-	(509,176)	(848)	-	(510,024)
Share option charge			-	9,744	-	-	-	9,744
Shares issued		-	-	-	-	-	-	-
Total contributions by and distributions to owners of the Company		-	-	9,744	-	-	-	9,744
As at 30 June 2023		359,997	6,495,541	47,392	(7,197,430)	(17,528)	-	(312,028)
Loss for the period		-	-	-	(944,333)	-	-	(944,333)
Translation differences		-	-	-	-	711	-	711
Total comprehensive income		-	-	-	(944,333)	711	-	(943,622)
Share option charge			-	9,906	-	-	-	9,906
Shares issued		-	-	-	-	-	-	-
Total contributions by and distributions to owners of the Company		-	-	9,906	-	-	-	9,906
As at 31 December 2023		359,997	6,495,541	57,298	(8,141,763)	(16,817)	-	(1,245,744)
Loss for the period		-	-	-	(1,374,111)	-	-	(1,374,111)
Translation differences					-	941	-	941
Total comprehensive income		-	-	-	(1,374,111)	941	-	(1,373,170)
Share option charge		-	-	34,951	-	-	-	34,951
Shares issued		24,634	221,707	-	-	-	-	246,341
Total contributions by and distributions to owners of the Company		24,634	221,707	34,951	-	-	-	281,292
For the period to 30 June 2024		384,631	6,717,248	92,248	(9,515,874)	(15,875)	-	(2,337,622)

 

 

Half-yearly report notes

 

1. Half-yearly report

This interim report was approved by the Board of Directors on 27 September 2024.

The information relating to the six months periods to 30 June 2024 and 30 June 2023 are unaudited.

The information relating to the year ended 31 December 2023 is extracted from the audited financial statements of the Company which have been filed at Companies House and on which the auditors issued an unqualified audit report. The condensed interim financial statements have been reviewed by the Company's auditor.

2. Basis of accounting

The interim financial statements have been prepared using accounting policies and practices that are consistent with those adopted in the statutory financial statements for the year ended 31 December 2023, although the information does not constitute statutory financial statements within the meaning of the Companies Act 2006. The interim financial statements have been prepared under the historical cost convention.

These interim financial statements are prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union and the Disclosure and Transparency Rules of the UK Financial Conduct Authority.

This interim report does not include all the notes of the type normally included in an annual financial report. Accordingly, this interim report should be read in conjunction with the annual report for the year ended 31 December 2023, which have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. 

The Company will report again for the full year to 31 December 2024.

Going concern

The Company's day to day financing is from its available cash resources.

The Company is confident of raising funds to enable it to continue to develop its targeted investments and exploration campaigns across its key projects over the next 12-18 months and the Directors are confident that adequate funding can be raised as required to meet the Company's current and future liabilities.

For the reasons outlined above, the Directors are satisfied that the Company will be able to meet its current and future liabilities, and continue trading, for the foreseeable future and, in any event, for a period of not less than twelve months from the date of approving this interim report. The preparation of these interim financial statements on a going concern basis is therefore considered to remain appropriate.

Critical accounting estimates

The preparation of condensed interim financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the end of the reporting period. Significant items subject to such estimates are set out in the Company's 2023 Annual Report and Financial Statements. The nature and amounts of such estimates have not changed significantly during the interim period.

Intangible assets

Exploration and development costs

All costs associated with mineral exploration and investments are capitalised on a project-by-project basis, pending determination of the feasibility of the project. Costs incurred include appropriate technical and administrative expenses but not general overheads. If an exploration project is successful, the related expenditures will be transferred to mining assets and amortised over the estimated life of economically recoverable reserves on a unit of production basis.

 

Intangible assets

Exploration and development costs

Where a licence is relinquished or a project abandoned, the related costs are written off in the period in which the event occurs. Where the Group maintains an interest in a project, but the value of the project is considered to be impaired, a provision against the relevant capitalised costs will be raised.

The recoverability of all exploration and development costs is dependent upon the discovery of economically recoverable reserves, the ability of the Group to obtain necessary financing to complete the development of reserves and future profitable production or proceeds from the disposition thereof.

3. Earnings per share

			6 months to  30 June 2024		6 months to  30 June 2023		Year ended 31 December 2023
			Unaudited £		Unaudited £		Audited £
These have been calculated on a loss of:			(1,374,111)		(509,176)		(1,453,509)
The basic weighted average number of shares used was:   The diluted weighted average number of shares used was:			1,478,045,122     1,629,352,010		1,231,704,269     1,899,265,537		1,231,704,269     1,546,243,103
Basic loss per share:			(0.09) pence		(0.04) pence		(0.12) pence
Diluted loss per share:			(0.09) pence		(0.04) pence		(0.12) pence

 

4. Events after the reporting period

There were no reportable events after the reporting period other than those highlighted in the 'Financial Review'. 

 

The Condensed interim financial statements were approved by the Board of Directors on 27 September 2024.

 

By order of the Board

 

Rolf Gerritsen

Director

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