TIDMTTAU
Wednesday, 29 March 2023
Tectonic Gold Plc
Half-year Report to 31 December 2022
29 March 2023
TECTONIC GOLD PLC
("Tectonic" or the "Company")
Unaudited Interim Results to 31 December 2022
MANAGING DIRECTOR'S STATEMENT
Dear Shareholder,
The half year to December 2022 saw a significant milestone for the Company with
the successful completion of our drilling campaign at Specimen Hill. After
fires, floods and COVID over the past few years, access to drilling rigs and
crew was limited, but we managed to secure a team to complete core testing of
the continuity of mineralisation below the old Goldsmith's Reef mine. Assays
returned grades of over 8g/t gold and 5.99 g/t silver at 110 meters down hole,
with additional intersections at 240 meters. Goldsmith's Reef is approximately
mid-way along the 4km+ strike that has delivered multiple discoveries for
Tectonic between the Main Lodes historic mine in the northeast where we started
field work and the Southern Copper discovery in the southwest which is our most
recent rediscovery.
These grades are in line with the medium to high grade production reports from
historic mining of Goldsmith's Reef in the early 1900's. The mine was operated
on a small scale down to approximately 30 meters but was abandoned during World
War I and never reworked. Tectonic's advanced geophysical surveying program
prior to COVID indicated that the textbook Intrusive Related Gold System (IRGS)
structure at Goldsmith's Reef plunged to over 500 meters depth. With positive
gold and copper assays from diamond drilling now confirming continuity of
mineralisation, we have been able to extend our database and attract parties
into due diligence to discuss a farm out investment into the project. This is
well underway and we hope to report progress in the coming weeks. Our objective
is to have a well-funded group complete initial resource definition on Specimen
Hill with a view to developing it as a copper-gold mining project. Tectonic
will utilise all of the experience from Specimen Hill in prosecuting our next
project area, Mt Cassidy. This is another textbook IRGS target which has
historic workings and drilling. We have conducted our advanced geophysics
reconnaissance and identified major structures below the old workings which we
expect to see continuity of mineralisation at depth in. We are also in
discussion to take our IRGS expertise into international gold exploration
opportunities.
The half year saw the team supporting our partnership with London listed Kazera
Global Plc ("Kazera") (LSE:KZG) on the Heavy Mineral Sands (HMS) and Diamond
project site in South Africa. Our joint venture with Kazera in HMS in was
awarded a mining license. This is the first and so far, only mining license
inside Alexkor, the South African Government controlled and operated diamond
fields at Alexander Bay. Previous testing has returned exceptional grades of
HMS and independent studies conducted for Kazera valued this project at £150
million.
Tectonic holds a 40% economic interest in this project via a non-diluting 10%
equity holding in Whale Head Minerals Pty Ltd (Whale Head) and a further 30%
economic interest via a sale and loan agreement with a Black Economic
Empowerment (BEE) consortium. In order to ensure compliance with South Africa's
BEE regulations requiring mining projects to have a 30% holding by qualifying
local investors, when Tectonic sold 60% of Whale Head to Kazera, the Company
sold a further 30% to a syndicate of local investors. Pricing for this 30% was
based on the £150 million independent valuation conducted on behalf of Kazera.
The BEE investor syndicate includes a South African private equity group headed
by a highly respected business leader, two experienced South African
entrepreneurs, a local community group and an employee group. Tectonic has
financed this 30% syndicate with a share loan program under which 80% of the
returns to the syndicate are paid to Tectonic until the £45 million in agreed
loan value has been repaid.
Tectonic holds a 10% non-diluting interest in Deep Blue Minerals Pty Ltd, Whale
Head's sister company that operates an alluvial diamond concession in the
Alexkor mine site. Diamond extraction is a regulated pre-requisite before the
tailings containing heavy minerals can be processed by Whale Head. Kazera has
announced that both Deep Blue and Whale Head are now funded to bring into
production. This could be a significant source of cash flows for Tectonic to
fund Mt Cassidy and new projects for the portfolio.
With success in our existing projects, real value being cemented in our joint
ventures and new opportunities to take our pioneering work in IRGS exploration
offshore, Tectonic is very optimistic about the future for our shareholders.
RESULTS AND COMPARATIVE INFORMATION
The Group incurred a loss after tax for the reporting period of £105,569 (31
Dec 2021: £198,977 (loss)).
For and on behalf of the Board.
Brett Boynton, CFA
Managing Director
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE
SIX MONTHSED 31 DECEMBER 2022
6 MONTHS 6 MONTHS 12 MONTHS
TO 31 TO 31 TO 30 JUNE
DEC 2022 DEC 2021 22 AUDITED
UNAUDITED UNAUDITED
£ £ £
Revenue - - 149,677
Expenses:
Accounting and audit fees (18,710) (25,478) (68,766)
Administration and office costs (3,216) (3,495) (6,218)
Corporate costs (29,493) (72,671) (150,823)
Amortisation and depreciation (694) (507) (1,080)
Employee benefits, management fees and (40,000) (143,333) (226,752)
on costs
Exploration and tenement costs (9,909) (5,588) (18,826)
Insurance (7,829) (7,440) (15,391)
Share based payments - (30,000) -
Net foreign exchange gain/(loss (19,492) (17,376) 107,624
Fair value gain on disposal of 26,450 165,594 -
financial assets at fair value through
profit and loss
Net loss on sale of investment - (81,246) (81,246)
Fair value loss on financial assets at - - (25,000)
fair value through profit and loss
Fair value gain on financial assets at - 25,000 28,429
fair value through profit and loss
Other expenses (2,676) (2,437) (2,599)
Loss before income tax (105,569) (198,977) (310,971)
Income tax benefit - - 157,659
Loss for the reporting period from (105,569) (198,977) (153,312)
continuing operations
Discontinued operations
Loss for the year from discontinued - - -
operations
Loss for the year attributable to the - - -
owners of the Company
(105,569) (198,977) (153,312)
Other comprehensive income:
Items that may be subsequently
reclassified to profit and loss:
Exchange differences on translation of (11,083) (12,549) 60,086
foreign subsidiaries
Total comprehensive loss for the (116,652) (211,526) (93,226)
reporting period
Earnings per share attributable to
owners of the company
Basic and diluted (pence per share)
From continuing operations 4 (0.01) (0.02) (0.02)
The accompanying notes form part of these financial statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2022
31 DEC 2022 31 DEC 2021 30-JUN-22
GROUP GROUP GROUP
UNAUDITED UNAUDITED AUDITED
NOTE £ £ £
ASSETS
NON-CURRENT ASSETS
Plant and equipment 2,101 1,753 2,808
Exploration and evaluation 3,553,618 3,179,584 3,379,113
expenditure
Financial assets at fair value 3 125,003 75,003
through profit and loss
TOTAL NON-CURRENT ASSETS 3,555,722 3,306,340 3,456,924
CURRENT ASSETS
Cash and cash equivalents 196,757 396,453 403,328
Trade and other receivables 12,317 12,694 21,089
Other assets 5 380,954 360,222 380,929
TOTAL CURRENT ASSETS 590,028 769,369 805,346
TOTAL ASSETS 4,145,750 4,075,709 4,262,270
EQUITY
Share capital 6,126,579 6,125,163 6,126,579
Share premium account 61,323,350 61,186,874 61,323,350
RTO Reserve (57,976,182) (57,976,182) (57,976,182)
Warrant Reserves 588,554 588,554 588,554
Foreign exchange translation (63,412) (124,964) (52,329)
reserves
Accumulated losses (6,325,048) (6,265,144) (6,219,479)
TOTAL EQUITY 3,673,841 3,534,301 3,790,493
LIABILITIES
NON-CURRENT LIABILITIES
Trade and other payables 16,172 15,456 16,304
Borrowings 150,747 170,125 170,862
TOTAL NON-CURRENT LIABILITIES 166,919 185,581 187,166
CURRENT LIABILITIES
Trade and other payables 304,990 355,827 284,611
TOTAL CURRENT LIABILITIES 304,990 355,827 284,611
TOTAL LIABILITIES 471,909 541,408 471,777
TOTAL EQUITY AND LIABILITIES 4,145,750 4,075,709 4,262,270
The accompanying notes form part of these financial statements.
These financial statements were approved by the Board of Directors on 28 March
2023.
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 2022
GROUP - UNAUDITED ISSUED SHARE WARRANT RTO FOREIGN ACCUMULATED TOTAL
31 DEC 2022 CAPITAL PREMIUM RESERVE RESERVE CURRENCY LOSSES
RESERVE
£ £ £ £ £ £ £
Balance at 1 July 6,126,579 61,323,350 588,554 (57,976,182) (52,329) (6,219,479) 3,790,493
2022
Total comprehensive (105,569) (105,569)
loss for the period
Transactions with
owners, recorded
directly in equity:
Issue of shares - - - - - - -
Share issue costs - - - - - - -
Foreign Currency - - - - (11,083) - (11,083)
Translation Reserve
Balance as at 31 6,126,579 61,323,350 588,554 (57,976,182) (63,412) (6,325,048) 3,673,841
December 2022
GROUP - UNAUDITED ISSUED SHARE WARRANT RTO FOREIGN ACCUMULATED TOTAL
31 DEC 2021 CAPITAL PREMIUM RESERVE RESERVE CURRENCY LOSSES
RESERVE
£ £ £ £ £ £ £
Balance at 1 July 2021 6,124,902 61,157,135 588,554 (57,976,182) (112,415) (6,066,167) 3,715,827
Total comprehensive (198,977)
loss for the period (198,977)
Transactions with
owners, recorded
directly in equity:
Shares Issued 261 29,739 - - - 30,000
-
Share issue costs - - - - - - -
Foreign Currency - - - - (12,549) - (12.549)
Translation Reserve
Balance as at 31 6,125,163 61,186,874 588,554 (57,976,182) (124,964) (6,265,144) 3,534,301
December 2021
GROUP - AUDITED ISSUED SHARE WARRANT RTO FOREIGN ACCUMULATED TOTAL
30 JUNE 2022 CAPITAL PREMIUM RESERVE RESERVE CURRENCY LOSSES
RESERVE
£ £ £ £ £ £ £
Balance at 1 July 2021 6,124,902 61,157,135 588,554 (57,976,182) (112,415) (6,066,167) 3,715,827
Total comprehensive (153,312)
income for the period (153,312)
Transactions with
owners, recorded
directly in equity:
Issue of shares 1,677 166,215 - - - - 167,892
Share issue costs - - - - - - -
Foreign Currency - - - - 60,086 - 60,086
Translation Reserve
Balance at 30 June 2022 6,126,579 61,323,350 588,554 (57,976,182) (52,329) (6,219,479) 3,790,493
The accompanying notes form part of these financial statements.
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE SIX MONTHSED 31 DECEMBER 2022
6 MONTHS 6 MONTHS 12 MONTHS
TO 31 TO 31 TO 30 JUNE
DEC 2022 DEC 2021 2022
UNAUDITED UNAUDITED AUDITED
£ £ £
CASH FLOWS FROM OPERATING
ACTIVITIES
Cash payments in the course of (95,057) (122,821) (269,939)
operations
Net cash used in operating (95,057) (122,821) (269,939)
activities
CASH FLOWS USED IN INVESTING
ACTIVITIES
Payments for exploration and evaluation (194,117) (201,709) (229,645)
expenditure
Payment for shares acquired in - (100,000) (100,000)
Kazera Global Plc
Proceeds from sale of financial - 280,657 -
asset at fair value through
profit and loss
Payments for property, plant - - (1,487)
and equipment
Payment for security deposit - - (273)
Proceeds from sale of shares in - - 61,957
VOX
Proceeds from sale of shares 101,450 - 218,700
in Kazera
Research and Development Tax - - 157,659
Incentive Claim
Net cash used in investing (92,667) (21,052) 106,911
activities
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from issue of shares - - 10,000
Repayment of borrowings (20,000) - -
Net cash provided by financing (20,000) - 10,000
activities
Net (decrease)/increase in cash held (207,724) (143,873) (153,028)
and cash equivalents
Cash and cash equivalents at the 403,329 541,835 541,835
beginning of the period
Effects of exchange rate changes on 1,152 (1,509) 14,521
cash and cash equivalents
Cash and cash equivalents at the end of 196,757 396,453 403,328
the period
The accompanying notes form part of these financial statements.
NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHSED 31 DECEMBER 2022
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 ("Tectonic" or the "Company") and the entities it controlled at the
end of, or during, the six months ended 31 December 2022. 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
2022 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 2022 Annual Report and statutory accounts for the year ended 30
June 2022.
The statutory accounts for the year ended 30 June 2022 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 2022 were
approved by the Board on 28 March 2023.
3. DIVID
The Board is not recommending the payment of an interim dividend for the period
ended 31 December 2022.
4. LOSS 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 2022 31 DEC 2021 30 JUNE 2022
UNAUDITED UNAUDITED AUDITED
£ £ £
Profit/(Loss) for the (105,569) (197,177) (153,312)
year attributable to
owners of the Company
Weighted average number 957,188,591 941,850,465 947,318,146
of ordinary shares in
issue for basic
earnings*
Weighted average number 957,188,591 941,850,465 947,318,146
of ordinary shares in
issue for fully diluted
earnings*
(Loss)/gain per share
(pence per share)
Basic (0.01) (0.02) (0.02)
Diluted (0.01) (0.02) (0.02)
5. OTHER ASSETS
31 DEC 2022 31 DEC 2021 30 JUNE
UNAUDITED UNAUDITED 2022 AUDITED
£ £ £
Prepayments(i) 351,780 336,208 354,656
Other prepayments 25,518 20,789 22,587
Security deposits 3,656 3,225 3,686
380,954 360,222 380,929
I. In 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 Gold and Tectonic
Gold. Titeline has been engaged to complete 10,000 meters of diamond
drilling to produce core samples for analysis, assay and metallogenic
studies from the Company's Biloela Project site. A review to be completed
after 2,500 metres of drilling has been completed. However, as at the date
of this report the completion program required to be mutually agreed prior
to the credit being applicable to the remaining 7,500 metres has not been
produced and until such time as this program has been produced, this credit
may not be utilised. As at 30 June 2022, the balance of the prepayment to
Titeline is £354,656 (A$625,386).
As at 31 December 2022, the balance of the prepayment to Titeline is £351,780
(A$625,386), (2021:£336,208 /A$625,386) remains prepaid to Titeline.
6. EVENTS AFTER THE REPORTING PERIOD
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.
7. DISTRIBUTION
Copies of these interim financial statements is available on the Company's
website (www.tectonicgold.com) or directly from the Company at its registered
address.
For further information, please contact:
Tectonic Gold plc +61 2 9241 7665
Brett Boynton
Sam Quinn
www.tectonicgold.com
@tectonic_gold
Aquis Stock Exchange Corporate Adviser and Broker
VSA Capital Limited +44 20 3005 5000
Andrew Raca - Corporate Finance
Andrew Monk - Corporate Broking
Ends
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