TIDMTTAU
30 June 2020
TECTONIC GOLD PLC
("Tectonic Gold" or the "Company")
Unaudited Interim Results to 31 December 2019
MANAGING DIRECTOR'S STATEMENT
Dear Shareholder,
I am pleased to present the unaudited financial results for ("Tectonic Gold"
and/or "the Company") and its controlled entities (the Group) for the half year
ended 31 December 2019.
During the period, management's focus was on progressing the South African
projects and finding a partner to commercialise the diamond mining contract.
The Company also investigated heavy mineral sands coincident with the alluvial
diamond ores and submitted an application for a mining tenement to extract and
process heavy mineral sands. The diamond project attracted investor interest
and is now being funded into production by London listed specialist resources
investment company, Kazera Global Investments Plc. Tectonic has retained a
non-diluting 10% interest in the diamond mining subsidiary, Deep Blue Minerals
Pty Ltd, as announced on 4 June 2020.
Tectonic Gold's Australian subsidiary, Signature Gold Pty Ltd, has submitted an
application for Queensland State Government funding assistance for a drilling
program at the company's Mount Cassidy project. A decision on this is expected
by the end of July 2020 and if successful it is intended to undertake drilling
in the October quarter.
On 11 March 2020, the World Health Organisation ("WHO") declared the
Coronavirus disease 2019 (COVID-19) a pandemic. The pandemic has adversely
affected the global economy, including an increase in unemployment, decrease in
consumer demand, interruptions in supply chains, and tight liquidity and credit
conditions. Consequently, governments around the world have announced monetary
and fiscal stimulus packages to minimise the adverse economic impact. However,
the COVID-19 situation is still evolving, and its full economic impact remains
uncertain.
The Company has several assets where the value may be impacted by COVID-19. At
the date these financial statements were approved by the Directors the extent
of the impact COVID-19 on the Company's assets cannot be reasonably estimated
at this time.
The pandemic has impacted the Company's operations with Government mandated
bans on mass gatherings and social distancing measures resulting in disruption
to the Company's operations, this disruption is expected to negatively impact
the ability for the Company to conduct drilling and its parent entity's ability
to raise capital, refer Going Concern Note 2.
The Directors and management are continually monitoring and managing the
Company's operations closely in response to COVID-19 however the extent of the
impact COVID-19 may have on the Company's future liquidity, financial
performance and position and operations is uncertain and cannot be reasonably
estimated at the date these financial statements were issued.
RESULTS AND COMPARITIVE INFORMATION
The Group incurred a profit after tax for the reporting period of GBP23,569 (31
Dec 2018: GBP102,888 profit as restated).
During the reporting period Signature Gold received a Research and Development
(R&D) Tax Incentive Rebate of approximately GBP152,163 (2018: GBP$ 330,248) for the
financial year ended 30 June 2019.
The R&D Tax Incentive Rebate is an Australian Government program under which
eligible companies receive cash refunds of up to 45% of eligible expenditure on
research and development.
Comparative period adjustments
The 2018 balances were restated in the 2019 financial statements as the
Company's auditor, PKF Littlejohn LLP found an error in the accounting
treatment for the reverse acquisition during the 2019 audit. The 2018 balances
were also restated to account for certain costs amounting to GBP45,250 that were
not accrued for at the time and the fair value of options that were issued on
25 June 2018 which amount to GBP68,900. Accordingly, comparative information for
the reporting period ended 31 December 2018 in this report has been re-stated.
For and on behalf of the Board.
Brett Boynton
Director
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE SIX MONTHSED 31 DECEMBER 2019
The accompanying notes form part of these financial statements.
NOTE 6 MONTHS TO 6 MONTHS TO 12 MONTHS
31 DEC 31 DEC TO 30 JUNE
2019 2018 2019
UNAUDITED UNAUDITED AUDITED
Restated
GBP GBP GBP
Revenue from continuing operations 47,513 - 31,862
Expenses from continuing operations:
Accounting and audit fees (12,629) (37,567) (88,673)
Administration and office costs (9,656) (20,314) (27,077)
Corporate costs (33,564) (52,541) (115,806)
Amortisation and depreciation (882) (588) (1,338)
Employee benefits, management fees and (22,824) (59,995) (89,777)
on costs
Exploration and tenement costs (25,922) (18,629) (36,388)
Insurance - (7,796) (17,233)
Legal expenses - 400 -
Options fee and associated costs - - 396
Impairment of exploration costs - - (703,936)
Business Development costs (9,257) - -
Bad debt expense - - (64,173)
Other expenses (61,373) (30,330) (38,945)
(Loss) from continuing operations before (128,594) (227,360) (1,151,088)
income tax
Income tax benefit 152,163 330,248 326,214
Net profit/(loss) for the reporting 23,569 102,888 (824,874)
period
Other comprehensive income, net of tax (46,344) (23,837) (34,430)
Total comprehensive (loss)/income for 22,775 79,051 (859,304)
the year
Earnings per share attributable to
owners of the company
Basic and diluted (pence per share)
From continuing operations 5 0.003 0.015 (0.120)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2019
31 DEC 2019 31 DEC 2018 30-JUN-19
GROUP GROUP GROUP AUDITED
UNAUDITED UNAUDITED
Restated
NOTE GBP GBP GBP
ASSETS
NON-CURRENT ASSETS
Plant and equipment 5,504 7,398 6,603
Exploration and evaluation 2,604,751 3,285,833 2,663,707
expenditure
TOTAL NON-CURRENT ASSETS 2,610,255 3,293,231 2,670,310
CURRENT ASSETS
Cash and cash equivalents 130,224 177,009 34,875
Trade and other receivables 105 14,142 7,913
Investments - 40,122
40,122
Other assets 6 339,485 358,498 360,412
TOTAL CURRENT ASSETS 469,814 589,771 443,322
TOTAL ASSETS 3,080,069 3,883,002 3,113,632
EQUITY
Share capital 6,100,615 6,099,615 6,100,615
Warrant reserves 60,146,216 60,117,216 60,146,216
RTO Reserve (57,976,182) (57,976,182) (57,976,182)
Warrant Reserves 95,098 95,098 95,098
Foreign exchange translation (139,025) (82,088) (92,681)
reserves
Accumulated losses (5,739,788) (4,835,595) (5,763,357)
TOTAL EQUITY 2,486,934 3,418,064 2,509,709
31 DEC 2019 31 DEC 30-JUN-19
2018
GROUP GROUP GROUP
UNAUDITED UNAUDITED AUDITED
Restated
NOTE GBP GBP GBP
LIABILITIES
NON-CURRENT LIABILITIES
Trade and other payables 15,358 - 15,913
Borrowings 228,664 166,741 236,793
Employee benefits - 10,713
11,363
TOTAL NON-CURRENT LIABILITIES 244,022
177,454 264,069
CURRENT LIABILITIES
Trade and other payables 249,113 272,218 275,680
Borrowings 100,000 -
50,000
Employee benefits - 15,266
14,174
TOTAL CURRENT LIABILITIES 349,113 287,484
339,853
TOTAL LIABILITIES 593,135 464,938 603,923
TOTAL EQUITY AND LIABILITIES 3,080,069 3,883,002 3,113,632
The accompanying notes form part of these financial statements.
These financial statements were approved by the Board of Directors on 30 June
2020.
Signed on behalf of the Board by:
Brett Boynton
Managing Director
Company number: 05173250
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHSED 31 DECEMBER 2018
GROUP - UNAUDITED ISSUED SHARE WARRANT RTO FOREIGN ACCUMULATED TOTAL
31 DEC 2019 CAPITAL PREMIUM RESERVE RESERVE CURRENCY LOSSES
RESERVE
GBP GBP GBP GBP GBP GBP GBP
Balance at 1 July 2019 6,100,615 60,146,216 95,098 (57,976,182) (92,681) (5,763,357) 2,509,709
Total comprehensive loss (46,344) 23,569 (22,775)
for the period
Transactions with owners,
recorded directly in
equity:
Shares Issued - - - - - - -
Balance as at 31 December 6,100,615 60,146,216 95,098 (57,976,182) (139,025) (5,739,788) 2,486,934
2019
ISSUED SHARE WARRANT RTO FOREIGN ACCUMULATED TOTAL
CAPITAL PREMIUM RESERVE RESERVE CURRENCY LOSSES
RESERVE
GROUP - UNAUDITED
31 DEC 2018
GBP GBP GBP GBP GBP GBP GBP
Balance at 1 July 2018 8,266,848 - - - (58,251) (4,824,334) 3,384,263
Prior year adjustment (2,167,233) 60,117,216 95,098 (57,976,182) - (114,149) (45,250)
Balance at 1 July 2018 6,099,615 60,117,216 95,098 (57,976,182) (58,251) (4,938,483) 3,339,013
(restated)
Total comprehensive loss (23,837) 102,888 79,051
for the period
Transactions with owners,
recorded directly in
equity:
Shares Issued - - - - - - -
Balance as at 31 December 6,100,615 60,146,216 95,098 (57,976,182) (82,088) (4,835,595) 3,418,064
2018
GROUP - AUDITED ISSUED SHARE WARRANT RTO FOREIGN ACCUMULATED TOTAL
30 JUNE 2019 CAPITAL PREMIUM RESERVE RESERVE CURRENCY LOSSES
RESERVE
GBP GBP GBP GBP GBP GBP GBP
Balance at 1 July 2018 8,266,848 - - - (58,251) (4,824,334) 3,384,263
Prior year adjustment (2,167,233) 60,117,216 95,098 (57,976,182) - (114,149) (45,250)
Balance at 1 July 2018 6,099,615 60,117,216 95,098 (57,976,182) (58,251) (4,938,483) 3,339,013
(restated)
Total comprehensive loss (34,430) (824,874) (859,304)
for the period
Transactions with owners,
recorded directly in
equity:
Shares Issued - 1 June 1,000 29,000 - - - - 30,000
2019
Balance as at 30 June 2019 6,100,615 60,146,216 95,098 (57,976,182) (92,681) (5,763,357) 2,509,709
The accompanying notes form part of these financial statements
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHSED 31 DECEMBER 2019
6 MONTHS TO 6 MONTHS TO 12 MONTHS
31 DEC 31 DEC TO 30 JUNE
2019 2018 2019
UNAUDITED UNAUDITED AUDITED
GBP GBP GBP
CASH FLOWS FROM OPERATING
ACTIVITIES
Cash receipts in the course of - 38,301 62.832
operations
Cash payments in the course of (131,029) (402,490) (586.464)
operations
Research and Development Tax 152,163 330,249 326.214
Incentive Claim
Interest received 761 - -
Net cash used in operating 21,895 (33,940) (197,418)
activities
CASH FLOWS USED IN INVESTING
ACTIVITIES
Payments for exploration and (63,341) (212,352) (279,351)
evaluation expenditure
Payments for property, plant - (5,456) (6,911)
and equipment
Payment for security deposit (272) - (276)
Proceeds from refund of 2,720 - -
security deposits
Proceeds from sale of 86,844 - -
investment
Net cash used in investing 25,951 (217,808) (286,538)
activities
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from issue of shares - 280,000 280,000
Proceeds from borrowings 50,000 - 89,418
Repayment of borrowings - - -
Net cash provided by financing 50,000 280,000 369,418
activities
Net (decrease)/increase in cash held 97,846 28,252 (114,539)
and cash equivalents
Cash and cash equivalents at the 34,875 149,397 149,397
beginning of the period
Effects of exchange rate changes on (2,497) (640) 17
cash and cash equivalents
Cash and cash equivalents at the end 130,224 177,009 34,875
of the period
The accompanying notes form part of these financial statements.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHSED 31 DECEMBER 2019
1. GENERAL INFORMATION
Tectonic Gold Plc is a company incorporated in the United Kingdom under the
Companies Act 2006. The consolidated entity (the "Group") consists of Tectonic
Gold Plc (the "Company") and the entities it controlled at the end of, or
during, the six months ended 31 December 2019. The principal activity of the
Group during the financial period was mineral exploration.
2. BASIS OF PREPARATION
These condensed interim consolidated financial statements ("the interim
financial statements") of the Group are for the six months ended 31 December
2019 and are presented in Sterling which is the Company's presentational
currency. These interim financial statements have not been reviewed or audited.
The interim financial statements have been prepared in accordance with the
recognition and measurement principles of IFRS as adopted by the European Union
(EU) and on the same basis and using the same accounting policies as applied in
the Company's 2019 Annual Report and statutory accounts for the year ended 30
June 2019.
The statutory accounts for the year ended 30 June 2019 have been filed with the
Registrar of Companies. The auditor's report on those financial statements was
unqualified and did not contain a statement under section 498 (2) or (3) of the
Companies Act 2006.
The interim financial statements have been prepared on a going concern basis
under the historical cost convention. The Directors believe that the going
concern basis is appropriate for the preparation of these interim financial
statements as the Company is in a position to meet all its liabilities as they
fall due.
The interim financial statements for the six months ended 31 December 2019 were
approved by the Board on 30 June 2019.
3. DIVID
The Board is not recommending the payment of an interim dividend for the period
ended 31 December 2019.
4. PRIOR YEAR ADJUSTMENT
The consolidated statement of profit and loss and other comprehensive income
as at 31 December 2018 has been restated to account for certain costs amounting
to GBP45,250 that were not accrued for on completion of the reverse takeover by
Signature Gold Pty Ltd on 25 June 2018 and the fair value of options that were
issued on 25 June 2018 which amount to GBP68,900. Details are set out below.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS Signed 2018
AND OTHER COMPREHENSIVE INCOME (extract) 31 Dec Loss Restated
2018 Decrease for
accounts 31 Dec 2018
Note GBP GBP GBP
Expenses from continuing operations:
Administration and office costs (i) (34,064) 13,750 (20,314)
Corporate costs (i) (84,041) 31,500 (52,541)
Fair value of warrants issued and vested (ii) (68,900 68,900 -
(118,105) 114,150 (72,855)
(i) The prior year adjustments are comprised of printing costs amounting to
GBP13,750 and consulting fees of GBP31,500 that were incurred in connection with
the reverse takeover by Signature Gold Pty Ltd.
(ii) The prior year adjustment of GBP68,900 represents the fair value of
options that were issued on 25 June 2018 and not recorded as at 30 June 2018.
Basic and diluted earnings per share for the prior year have also been
restated. Refer to Note 5.
4. PRIOR YEAR ADJUSTMENT (CONTINUED)
GROUP STATEMENT OF FINANCIAL Signed Adjustments Restated
POSITION accounts at as at 31 Dec
31 Dec 2018 2018
Note GBP GBP GBP
ASSETS
NON-CURRENT ASSETS
Plant and equipment 7,398 - 7,398
Exploration and evaluation 3,285,833 - 3,285,833
expenditure
TOTAL NON-CURRENT ASSETS 3,293,231 - 3,293,231
CURRENT ASSETS
Cash and cash equivalents 177,009 - 177,009
Trade and other receivables 14,142 - 14,142
Investments 40,122 - 40,122
Other assets 3,584,988 - 3,584,988
TOTAL CURRENT ASSETS 3,816,261 - 3,816,261
TOTAL ASSETS 7,109,492 - 7,109,492
EQUITY
Share capital (i) 8,266,848 (2,167,233) 6,099,615
Share premium (i) - 60,117,216 60,117,216
RTO reserve (i) - (57,976,182) (57,976,182)
Warrant reserve (ii) 68,900 26,198 95,098
Foreign exchange translation (82,088) - (82,088)
reserves
Accumulated losses (4,835,596) - (4,835,596)
TOTAL EQUITY 3,418,064 - 3,418,064
LIABILITIES
NON-CURRENT LIABILITIES
Borrowings 166,741 - 166,741
Employee benefits 10,713 - 10,713
TOTAL NON-CURRENT LIABILITIES 177,454 - 177,454
CURRENT LIABILITIES
Trade and other payables 272,218 - 272,218
Employee benefits 15,266 - 15,266
TOTAL CURRENT LIABILITIES 287,484 - 287,484
TOTAL LIABILITIES 464,938 - 464,938
TOTAL EQUITY LIABILITIES 3,883.002 - 3,883,002
(i) The 2018 balances have been restated in the 2019 financial statements
due to an error in the accounting treatment for the reverse acquisition
identified during the 2019 audit.
(ii) The prior period adjustment to warrant reserves of GBP26,198 is the
recycling of the share-based payment expense in respect of warrants and share
options that had either lapsed or been exercised prior to completion of the
reverse takeover on 25 June 2018.
5. EARNINGS PER SHARE
The basic earnings per share is based on the profit/(loss) for the year divided
by the weighted average number of shares in issue during the reporting period.
The weighted average number of ordinary shares for the reporting period assumes
that all shares have been included in the computation based on the weighted
average number of days since issue.
6 MONTHS TO 6 MONTHS TO 12 MONTHS TO
31 DEC 2019 31 DEC 2018 30 JUNE 2019
UNAUDITED UNAUDITED AUDITED
Restated
GBP GBP GBP
Profit/(Loss) for the 23,569 102,888 (824,874)
year attributable to
owners of the Company
Weighted average number 656,562,746 687,562,746 688,357,267
of ordinary shares in
issue for basic
earnings*
Weighted average number 710,562,746 700,562,746 688,357,267
of ordinary shares in
issue for fully diluted
earnings*
(Loss)/gain per share
(pence per share)
Basic 0.003 0.015 (0.12)
Diluted 0.003 0.015 (0.12)
6. OTHER ASSETS
31 DEC 2019 31 DEC 30 JUNE 2019
UNAUDITED 2018 AUDITED
UNAUDITED
GBP GBP GBP
Prepayments(i) 333,956 347,902 346,151
Other prepayments 2,325 3,014 6,440
Security deposits 3,204 7,582 7,821
339,485 358,498 360,412
(i) In June 2018, the Company paid Titeline Drilling Pty Ltd ACN 096 640
201 (Titeline) for future drilling services in accordance with the heads of
agreement dated 28 March 2018 between Titeline, Signature and StratMin.
Titeline has been engaged to complete 10,000 metres of diamond drilling on a
50:50 cash and equity basis to produce core samples for analysis, assay and
metallogenic studies from the Company's Queensland Project sites. A review to
be completed after 2,500 metres of drilling has been completed and the
remaining 7,500 metres is in planning for the second half of 2019. The cash
component of the drilling contract is expected to be met from revenues
generated by the diamond mining joint venture with VAST Mineral Sands Pty Ltd
announced on February 18, 2019.
As at 30 June 2018, the prepayment of GBP 633,825 (A$1,125,000) to Titeline was
comprised of:
- GBP 126,765 (A$225,000 excluding GST) paid in cash; and
- pre-paid technical services amounting to GBP 507,060 ($A90,000)
settled with the issue of 5,544,484 fully paid ordinary shares issued in the
Company at an issue price of A$0.162 per share.
As at 31 December 2019, GBP 333,956 ($A625,386) remains prepaid to
Titeline
7. EVENTS AFTER THE REPORTING PERIOD
On 11 March 2020, the World Health Organisation ("WHO") declared the
Coronavirus disease 2019 (COVID-19) a pandemic. The pandemic has adversely
affected the global economy, including an increase in unemployment, decrease in
consumer demand, interruptions in supply chains, and tight liquidity and credit
conditions. Consequently, governments around the world have announced monetary
and fiscal stimulus packages to minimise the adverse economic impact. However,
the COVID-19 situation is still evolving, and its full economic impact remains
uncertain.
The Company has several assets where the value may be impacted by COVID-19. At
the date that these financial statements were approved by the Directors the
extent of the impact COVID-19 on the Company's assets cannot be reasonably
estimated at this time.
The pandemic has impacted the Company's operations with Government mandated
bans on mass gatherings and social distancing measures resulting in disruption
to the Company's operations, this disruption is expected to negatively impact
the ability for the Company to conduct drilling and its parent entity's ability
to raise capital, refer Going Concern Note 2 of the Company 20919 annual
report.
The Directors and management are continually monitoring and managing the
Company's operations closely in response to COVID-19 however the extent of the
impact COVID-19 may have on the Company's future liquidity, financial
performance and position and operations is uncertain and cannot be reasonably
estimated at the date these financial statements were issued.
Other than as stated elsewhere in this report, Directors are not aware of any
other matters or circumstances at the date of this report that have
significantly affected or may significantly affect the operations, the results
of the operations or the state of affairs of the Company in subsequent
financial years.
8. DISTRIBUTION
Copies of these interim financial statements are available on the Aquis
Exchange website, the Company website (www.tectonicgold.com) or directly from
the Company at its registered address.
The Directors of the Company accept responsibility for the contents of this
announcement.
For further information, please contact:
Tectonic Gold plc +61292417665
Brett Boynton
Sam Quinn
www.tectonicgold.com
@tectonic_gold
Ends
END
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