TIDMBHL
RNS Number : 2334R
Bradda Head Lithium Ltd
25 October 2023
25 October 2023
Bradda Head Lithium Ltd
("Bradda Head", "Bradda", or the "Company")
Unaudited Interim Results for the six and three-months ended 31
August 2023
Bradda Head Lithium Ltd (AIM:BHL, TSX-V:BHLI, OTCQB:BHLIF), the
North America-focused lithium development group, is pleased to
announce that it has today published its unaudited financial
results for the six and three-months ended 31 August 2023, and the
Management's Discussion and Analysis for the same period.
Both of the above have been posted on the Company's website
www.braddaheadltd.com and are also available on SEDARplus (
www.sedarplus.ca/landingpage ).
Financial and operational highlights
- The Company's third drill programme at the lithium in clay
Basin project continued during the period, with the Company
finishing the fourteenth and final hole on August 10, 2023 for a
total drilled meterage of 2,355.
- Notable intervals from the final few sonic core holes
continued to be encouraging and include:
o 81.60m @ 944ppm Li in hole BES23-10, including 19.79m @ 1,325ppm,
o 82.30m @ 906ppm Li in hole BES23-07, including 20.87m @ 1,324ppm,
o 81.98m @ 867ppm Li in hole BES23-06, including 20.73m @ 1,363ppm,
o 88.70m @ 903ppm Li in hole BES23-11, including 12.51m @
1,427ppm, and
o 75.12m @ 983ppm Li in hole BES23-12, including 27.6m @
1,339ppm.
- Following the release of an updated Mineral Resource Estimate
("MRE") post period end, which included a contained LCE tonnage of
over 1Mt LCE, and as per the Royalty Agreement with the Lithium
Royalty Corporation ("LRC"), Bradda Head formally requested payment
of US$ 2.5 million from LRC, with funds being received during
October 2023.
- During August 2023, the Company also mobilised a drill rig at
its San Domingo pegmatite asset, with the Phase 3 drilling
programme commencing later in the month.
- In addition, the Company staked just under 8km(2) of new lode
claims at its San Domingo pegmatite project, further strengthening
its land holding in the area.
Ian Stalker, Chairman of Bradda Head, commented:
"The first half of the financial year has naturally been very
busy, with significant drilling programmes being undertaken at our
Basin and San Domingo Properties in Arizona, USA. This phase of
drilling is now completed at our Basin project. Positive assay
results received from the Basin work, enabled the release of an
updated MRE during September 2023, which included a contained LCE
tonnage of over 1Mt LCE. This new Resource number reported resulted
in the next stage of a royalty payment of US$ 2.5 million. The
Company is therefore well placed financially to continue its
planned work programme well into 2024. We also commenced our Phase
3 drilling programme at our San Domingo pegmatite asset during
August 2023. This is a follow on from our Phase 1 and Phase 2 drill
programmes, our aim being to extend the known lithium
mineralization in this dstrict. Assay results have been slow to
arrive due to the summer rush at the laboratory, and the Company
hopes to have news on San Domingo within the next few weeks as
preliminary results have started to arrive.
The pace of development will continue through the final half of
the year, and we look forward to updating our shareholders as we
receive the exploration results."
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF THE MARKET ABUSE REGULATION (EU No.596/2014) AS IT FORMS PART OF
UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT
2018. UPONTHE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY
INFORMATION SERVICE, THIS INSIDE INFORMATION IS NOWCONSIDERED TO BE
IN THE PUBLIC DOMAIN AND SUCH PERSONS SHALL THEREFORE CEASE TO BE
IN POSSESSION OF INSIDEINFORMATION.
For further information please visit the Company's website:
www.braddaheadltd.com
For further information, please contact:
Bradda Head Lithium Limited +44 (0) 1624 639 396
Ian Stalker, Executive Chairman
Denham Eke, Finance Director
Beaumont Cornish (Nomad)
James Biddle/Roland Cornish +44 20 7628 3396
Panmure Gordon (Joint Broker) +44 20 7886 2500
John Prior
Hugh Rich
Shard Capital (Joint Broker) +44 207 186 9927
Damon Heath
Isabella Pierre
Red Cloud (North American Broker) +1 416 803 3562
Joe Fars
Tavistock (PR) + 44 20 7920 3150
Nick Elwes braddahead@tavistock.co.uk
Adam Baynes
About Bradda Head Lithium Ltd.
Bradda Head Lithium Ltd. is a North America-focused lithium
development group. The Company currently has interests in a variety
of projects, the most advanced of which are in Central and Western
Arizona: The Basin Project (Basin East Project, and the Basin West
Project) and the Wikieup Project.
The Basin East Project has an Indicated Mineral Resource of 17
Mt at an average grade of 940 ppm Li and 3.4% K for a total of 85
kt LCE and an Inferred Mineral Resource of 210 Mt at an average
grade of 900 ppm Li and 2.8% K (potassium) for a total of 1.0 Mt
LCE. In the rest of the Basin Project SRK has determined an
Exploration Target of 250 to 830 Mt of material grading between 750
to 900 ppm Li, which is equivalent to a range of between 1 to 4 Mt
contained LCE. The Group intends to continue to develop its three
phase one projects in Arizona, whilst endeavouring to unlock value
at its other prospective pegmatite and brine assets in Arizona,
Nevada, and Pennsylvania. All Bradda Head's licences are held on a
100% equity basis and are in close proximity to the required
infrastructure. Bradda Head is quoted on the AIM of the London
Stock Exchange with the ticker of BHL, on the TSX Venture Exchange
with a ticker of BHLI, and on the US OTCQB market with a ticker of
BHLIF.
Forward-Looking Statements
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release. This News Release includes certain "forward-looking
statements" which are not comprised of historical facts.
Forward-looking statements include estimates and statements that
describe the Company's future plans, objectives or goals, including
words to the effect that the Company or management expects a stated
condition or result to occur. Forward-looking statements may be
identified by such terms as "believes", "anticipates", "intends
to", "expects", "estimates", "may", "could", "would", "will", or
"plan". Since forward-looking statements are based on assumptions
and address future events and conditions, by their very nature they
involve inherent risks and uncertainties. Although these statements
are based on information currently available to the Company, the
Company provides no assurance that actual results will meet
management's expectations. Risks, uncertainties, and other factors
involved with forward-looking information could cause actual
events, results, performance, prospects, and opportunities to
differ materially from those expressed or implied by such
forward-looking information. Forward looking information in this
news release includes, but is not limited to, following: The
Company's objectives, goals, or future plans. Factors that could
cause actual results to differ materially from such forward-looking
information include, but are not limited to: failure to identify
mineral resources; failure to convert estimated mineral resources
to reserves; delays in obtaining or failures to obtain required
regulatory, governmental, environmental or other project approvals;
political risks; future operating and capital costs, timelines,
permit timelines, the market and future price of and demand for
lithium, and the ongoing ability to work cooperatively with
stakeholders, including the local levels of government;
uncertainties relating to the availability and costs of financing
needed in the future; changes in equity markets, inflation, changes
in exchange rates, fluctuations in commodity prices; delays in the
development of projects, capital and operating costs varying
significantly from estimates; an inability to predict and
counteract the effects of COVID-19 on the business of the Company,
including but not limited to the effects of COVID-19 on the price
of commodities, capital market conditions, restriction on labour
and international travel and supply chains; and the other risks
involved in the mineral exploration and development industry, and
those risks set out in the Company's public documents filed on
SEDARplus. Although the Company believes that the assumptions and
factors used in preparing the forward-looking information in this
news release are reasonable, undue reliance should not be placed on
such information, which only applies as of the date of this news
release, and no assurance can be given that such events will occur
in the disclosed time frames or at all. The Company disclaims any
intention or obligation to update or revise any forward-looking
information, whether as a result of new information, future events
or otherwise, other than as required by law.
Bradda Head Lithium Limited
Management discussion and analysis for the six and three-month
period ended August 31, 2023
This management's discussion and analysis ("MD&A") reports
on the operating results and financial condition of the Company for
the six and three-month period ended August 31, 2023, and is
prepared as of October 25, 2023. The MD&A should be read in
conjunction with Bradda Head Lithium Limited's (the "Company" or
"Bradda Head") audited consolidated financial statements for the
year ended February 28, 2023, and the notes thereto which were
prepared in accordance with International Financial Reporting
Standards ("IFRS").
All dollar amounts referred to in this MD&A are expressed in
United States dollars except where indicated otherwise.
(a) Overview
Bradda Head Lithium Limited was incorporated on October 28,
2009, in the British Virgin Islands under the British Virgin
Islands Companies Act with registered number 1553975 with the name
Copper Development Corporation. On October 5, 2015, the Company
changed its name from Copper Development Corporation to Life
Science Developments Limited, and on April 18, 2018, the Company
changed its name to Bradda Head Holdings Limited. On September 15,
2021, the Company changed its name to Bradda Head Lithium
Limited.
The Company has one business segment, being mineral exploration.
T he Company is focused on appraising and developing lithium mining
projects within North America and currently has interests in a
variety of projects in the United States.
Corporate and Exploration Highlights
Exploration Highlights
Set forth in this section is a description of the Company's
material mineral projects. All scientific and technical data
contained in this MD&A has been reviewed and approved by Joey
Wilkins, B.Sc., P.Geo., who is Chief Operating Officer at Bradda
Head and a Qualified Person as defined by National Instrument
43-101 - Standards of Disclosure for Mineral Projects ("NI
43-101").
Arizona Sedimentary Hosted Lithium Projects
Basin Project
Drilling at Basin East Extension ("BEE") continued during the
three-month period ended August 31, 2023. During July 2023, assay
results from a further five drill holes were received. The
programme continued to encounter better-than-expected thicknesses
of clay, confirming that lithium-bearing clays continue and thicken
to the west, northwest and north into the Company's BEE lease with
projected clay extensions into Basin West ("BW") claims. Drilling
has confirmed the clays extend into Basin North ("BN") where the
potential to expand is significant.
Notable intervals from these five widely spaced sonic core holes
continue to be encouraging and include:
o 81.60m @ 944ppm Li in hole BES23-10, including 19.79m @ 1,325ppm,
o 82.30m @ 906ppm Li in hole BES23-07, including 20.87m @ 1,324ppm and
o 81.98m @ 867ppm Li in hole BES23-06, including 20.73m @ 1,363ppm.
The results from these three holes indicate a high-grade unit
exists, as previously found in Basin East ("BE") and has similar
grades and maintains strong continuity across all of BEE, likely
extending into BW. This is very positive for any future mining
operation, as the high-grade unit sits in the upper clay unit which
forms the shallowest part of the deposit, essentially cropping out
at BE. The assay results also identified high levels of molybdenum
associated with drill holes BES23-06, 07, 09, and 10 and within the
high-grade unit of between 109ppm over 22.56m in hole 06 and 187ppm
over 16.44m in hole 10. To put that in context, Freeport's Bagdad
copper mine (c.6 miles from Basin) which extracts a healthy
molybdenum by-product credit, has a molybdenum Proven and Probable
Reserve grade of c.200ppm.
During August 2023, the final drill hole assay results were
received, with the highest single interval grade identified so far
of 2,791ppm Li over 0.40m and a separate sample of 641 ppm Mo over
1.22m.
Notable intervals from the next 2 widely-spaced sonic core holes
continue to be encouraging and include:
o 88.70m @ 903ppm Li in hole BES23-11, including 12.51m @
1,427ppm
o 75.12m @ 983ppm Li in hole BES23-12, including 27.6m @
1,339ppm
Basin East & East Extension Highlights
Hole ID Total Upper Clay Upper Clay High-grade High-grade Lower Clay Lower Clay
hole depth zone mean zone interval Interval Interval zone interval zone interval
grade (Li ppm) thickness, in grade in Intersection mean grade (Li thickness, in
meters * Upper zone length in ppm) meters*
over 1,000 meters*
ppm cut-off
(ppm)
BES-23-01 77.72 N/A N/A N/A N/A 484 31.97
----------- -------------- -------------- ------------- -------------- -------------- --------------
BES-23-02 102.87 826 46.24 1,005 13.38 596 17.49
----------- -------------- -------------- ------------- -------------- -------------- --------------
BES-23-03 137.92 954 63.12 1,327 24.32 729 34.24
----------- -------------- -------------- ------------- -------------- -------------- --------------
BES-23-04 111.25 1,077 66.92 1,602 18.30 686 15.23
----------- -------------- -------------- ------------- -------------- -------------- --------------
BES-23-05 191.11 944 63.71 1,029 32.93 701 32.92
----------- -------------- -------------- ------------- -------------- -------------- --------------
BES-23-06 181.97 867 81.98 1,363 20.73 657 32.33
----------- -------------- -------------- ------------- -------------- -------------- --------------
BES-23-07 221.28 906 82.30 1,324 20.87 642 21.96
----------- -------------- -------------- ------------- -------------- -------------- --------------
BES-23-08 205.13 838 71.94 1,221 8.99 686 9.14
----------- -------------- -------------- ------------- -------------- -------------- --------------
BES-23-09 139.29 812 74.21 1,262 11.89 Not drilled NA
----------- -------------- -------------- ------------- -------------- -------------- --------------
BES-23-10 211.23 944 81.60 1,325 19.79 Not drilled NA
----------- -------------- -------------- ------------- -------------- -------------- --------------
BES-23-11 197.21 903 88.7 1,427 12.51 Not drilled NA
----------- -------------- -------------- ------------- -------------- -------------- --------------
BES-23-12 172.82 983 75.13 1,339 27.6 742 11.12
----------- -------------- -------------- ------------- -------------- -------------- --------------
BES-23-13 183.79 Not received 82.30 Not received Not received Not drilled
----------- -------------- -------------- ------------- -------------- -------------- --------------
BES-23-14 221.59 Not received 86.11 Not received Not received Not drilled
----------- -------------- -------------- ------------- -------------- -------------- --------------
Note: all lengths represent true thickness as sedimentary
sequence is horizontal and holes are vertical (90 degrees to
stratigraphy)
The assay results from the final drill holes continued to detect
high levels of molybdenum within the high-grade unit, such as
289ppm Mo over 8.84m in BES23-11 within 21.04m of 167ppm and 15.56m
of 148 I BES23-12. A detailed XRD analysis of the Basin core is
under construction, with the intent of identifying the mineralogy
associated with high grade lithium and molybdenum. The remarkable
continuity and consistency of the lithium intercepts in the upper
clay suggest the presence of extensive lithium mineralisation
throughout the project area, indicating the potential for a
sizeable lithium deposit. Following completion of the drill
programme, the results were fed into an updated Mineral Resource
Estimate, released post quarter-end on 28 September 2023.
The lithium-clay mineralisation remains open to the west and
north, indicating further resource upside, as backed up by the
previously reported 1Mt to 6Mt LCE JORC-compliant Exploration
Target identified by SRK. The total upper clay unit is 78.40m in
width on average in BEE and the first hole into BN intercepted
86.11m of upper clay. To put that in context, the average thickness
of the upper clay unit at BE is 34.00m in all the previous 34 holes
that intercepted upper clay in the last 3 drill programmes (2018,
2021 and 2022).
The recent drill results on BEE and BN solidify Bradda Head's
belief in a widespread and continuous lithium-rich stratigraphic
sequence, with potential further into BN and across to BW that the
Company believes will lead to significant resource growth and
opportunity to become a Tier 1 lithium deposit. More drilling is
being planned at Basin North and Basin West upon receipt of the
Environmental Assessment ("EA") from the Bureau of Land Management,
expected during H2 2024. The area being permitted is over 11km (2)
, which is considerably larger than BE, BEE, and BN combined (c.6km
(2) ).
Wikieup Project
No significant work has been undertaken on this project during
the 3-month period.
Arizona Pegmatite District
San Domingo Project
During August 2023, the Company mobilised a drill rig at its San
Domingo pegmatite asset, with the Phase 3 drilling programme
commencing later in the month. This represents the second
large-scale drill programme conducted in less than 12 months at San
Domingo, underscoring the Company's commitment to exploring and
unlocking the potential of our 23km (2) land package within this
highly prospective pegmatite district.
Bradda Head was granted an exploration permit to drill at its
Northern claim block in the San Domingo Pegmatite district. The
Phase 3 drill programme has been rigorously designed, benefiting
from a comprehensive array of data and analyses. Bradda's team of
geologists conducted an extensive soil geochemistry survey,
undertook a thorough structural mapping programme, reviewed
previous GPR geophysical data, and carried out additional ground
truthing to optimize the locations and potential effectiveness of
this exploration campaign. Several new high priority targets have
been identiifed, which the Company is excited about and anticipates
making new discoveries and extending known lithium mineralization
from the previous programme.
The first two phases of drilling, completed in March 2023,
yielded promising results, with the best intercept reported as
31.85m at 1.6% Li (2) O at the Midnight Owl prospect in the
Northern claim block. Phase 3 drilling will aim to extend this
known lithium mineralization.
Following positive results of soil sampling completed in
February 2023 that identified further spodumene in outcrops at San
Domingo, and to strengthen our land holding position, Bradda Head
staked just under 8km(2) of new lode claims at its San Domingo
asset. This is the 4th round of claim expansion at San Domingo, and
the land holding has grown from c.13km(2) to now c.31km(2) since
July 2021.
The soil sampling survey conducted in February 2023 highlighted
specific areas within the existing claim block that displayed
highly prospective indicators for lithium exploration. Follow-up
field work on select geochemical anomalies positively identified
lithium bearing minerals at nearly all anomalies, dominated by the
presence of spodumene. By expanding the current claim block to
trace these areas along strike, the Company aims to maximise the
potential for significant lithium resources and solidify its
position in the region's rapidly evolving lithium market.
Additionally, the newly staked claims provide a buffer zone,
ensuring effective management and protection of the Company's
interests in the area.
The Company looks forward to keeping shareholders updated on the
progress of the ongoing drill programme at San Domingo.
Nevada Lithium Brine Projects
Wilson Project
No significant work has been undertaken on this project during
the 3-month period.
Eureka Project
No significant work has been undertaken on this project during
the 3-month period.
Corporate Highlights
During June 2023, the Company appointed PKF Littlejohn LLP as
new auditors of the Company, replacing KPMG Audit LLC. As the
Company is listed on the TSX Venture Exchange, the Company is
required to retain an auditor recognised by the Canadian Public
Accountability Board ("CPAB"). KPMG Audit LLC, who has been the
Company's auditor since 2009, is not a participating auditor firm
with CPAB and therefore resigned at the request of the Company.
Bradda Head appointed PKF Littlejohn LLP, a CPAB-recognised
auditor, to audit the Company's financial statements as at and for
the year ended February 28, 2023.
On 29 August 2023, the Company announced the resignation of
Charles FitzRoy as CEO of the Company. During the previous 30
months, Charles was a key figure in a number of milestones, most
notably listing the Company on AIM in Summer 2021 where GBP6.2
million was raised, securing a royalty partnership later that same
year, and in raising approximately GBP10 million of fresh
equity-capital in the Spring of 2022. The search for a new CEO is
ongoing.
(b) Selected Financial Information
The following table sets forth selected financial information
with respect to the Company for the six and three-month period
ended August 31, 2023 and the year ended February 28, 2023. The
selected financial information has been derived from the audited
financial statements for the period indicated. The following should
be read in conjunction with the said financial statements and
related notes that are available on the Company's website -
www.braddaheadltd.com.
The annual financial statements and interim financial statements
are presented in US dollars and are prepared in accordance with
IFRS, See "Summary Financial Data" and "Currency Information".
Six-month period ended Three-month period ended Year ended February 28,
August 31, 2023 August 31, 2023 2023
(Audited) (Audited) (Audited)
(US$) (US$) (US$)
---------------------------- ---------------------------- ----------------------------
Statement of Operations:
---------------------------- ---------------------------- ----------------------------
Total Operating Expenses
(net of other income) (2,320,724) (1,177,429) (3,899,858)
---------------------------- ---------------------------- ----------------------------
Net Finance income 90,872 31,770 12,270
---------------------------- ---------------------------- ----------------------------
Net Loss (2,229,852) (1,145,659) (3,887,588)
---------------------------- ---------------------------- ----------------------------
Loss per Share (cents) (0.57) (0.29) (1.018)
---------------------------- ---------------------------- ----------------------------
Balance Sheet Data:
---------------------------- ---------------------------- ----------------------------
Cash & cash equivalents,
including cash deposits 2,930,730 2,930,730 7,746,519
---------------------------- ---------------------------- ----------------------------
Total Assets 15,467,509 15,467,509 18,198,559
---------------------------- ---------------------------- ----------------------------
Total Liabilities (531,799) (531,799) (1,213,619)
---------------------------- ---------------------------- ----------------------------
Accumulated Deficit (15,680,663) (15,680,663) (13,631,433)
---------------------------- ---------------------------- ----------------------------
Total Shareholder's Equity 14,935,710 14,935,710 16,984,940
---------------------------- ---------------------------- ----------------------------
MANAGEMENT DISCUSSION AND ANALYSIS: QUARTERED AUGUST 31,
2023
(c) Introduction
(d) This interim Management Discussion and Analysis (the "
interim MD&A ") should be read in conjunction with the audited
financial statements of the Company for the year ended February 28,
2023, and related notes. This MD&A is made as of October 25,
2023.
(e) Results of Operations for the six and three-months ended August 31, 2023
The Company's net loss after tax for the six-month period to
August 31, 2023 was US$ 2,229,852, compared to a loss of US$
1,165,319 for the comparative period ended August 31, 2022. The
major expenses for the six-month period ended August 31, 2023 were
operational expenses incurred on the Company's exploration
projects, and are broken down in the respective projects as
follows:
Project Expensed Exploration Expenditure
Six-Month Period Ended August 31, 2023 Three-Month Period Ended August 31, 2023
(Unaudited) (Unaudited)
US$ US$
--------------------------------------- -----------------------------------------
Basin Project 582,140 332,742
--------------------------------------- -----------------------------------------
San Domingo Project 614,674 327,892
--------------------------------------- -----------------------------------------
Wikieup Project 12,424 150
--------------------------------------- -----------------------------------------
Other projects 4,740 1,327
--------------------------------------- -----------------------------------------
TOTAL 1,213,978 662,111
--------------------------------------- -----------------------------------------
During this six-month time period, the Company incurred and
capitalised exploration expenditures of US$ 2,306,867, compared to
US$ 965,140 for the comparative six-month period to August 31,
2022.
The capitalied exploration costs for the six-month period ended
August 31, 2023 have been allocated amongst the Company's
exploration projects in approximately the following amounts:
Project Capitalised Capitalised Capitalised Capitalised
exploration costs expenditures for exploration costs expenditires for
licences and permits licences and permits
Six-Month Period Ended Six-Month Period Three-Month Period Three-Month Period
August 31, 2023 Ended August 31, 2023 Ended August 31, 2023 Ended August 31, 2023
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
US$ US$ US$ US$
----------------------- ---------------------- ---------------------- ----------------------
Basin Project 910,384 65,505 489,370 65,505
----------------------- ---------------------- ---------------------- ----------------------
San Domingo Project 790,644 312,370 263,213 62,370
----------------------- ---------------------- ---------------------- ----------------------
Wikieup Project - 89,925 - 89,928
----------------------- ---------------------- ---------------------- ----------------------
Other Project - 138,039 - 107,742
----------------------- ---------------------- ---------------------- ----------------------
TOTAL 1,701,028 605,839 752,583 325,545
----------------------- ---------------------- ---------------------- ----------------------
The exploration expenditures have been primarily costs
associated with drilling, assaying, resource and mining
consultants, metallurgical testing, environmental studies, project
team fees, acquisition of new leases, and annual renewal of
existing leases.
General and administrative expenses for the six-month period to
August 31, 2023 totalled US$ 2,593,928, compared to US$ 2,551,978
for the comparative six-month period to August 31, 2022. General
and administrative expenses are broken down as follows:
Project General and administrative expenditures
Six-Month Period Ended August 31, Three-Month Period Ended August 31,
2023 2023
(Unaudited) (Unaudited)
US$ US$
-------------------------------------- --------------------------------------
Auditors' fees 16,440 (3,160)
-------------------------------------- --------------------------------------
Directors and management fees and
salaries 291,157 153,616
-------------------------------------- --------------------------------------
Legal and accounting 201,584 117,971
-------------------------------------- --------------------------------------
Contractor costs 1,213,978 662,111
-------------------------------------- --------------------------------------
Professional and marketing costs 404,552 200,350
-------------------------------------- --------------------------------------
Other administrative costs 466,217 204,199
-------------------------------------- --------------------------------------
TOTAL 2,593,928 1,335,087
-------------------------------------- --------------------------------------
During the six-month period to August 31, 2023, there have been
no changes in financial performance or other elements that relate
to non-core business activities and operations.
(f) Cash flows
During the six-month period ended August 31, 2023, the Company
had net cash outflows of US$ 6,242,378, compared to inflows of US$
6,990,172 during the comparative six-month period to August 31,
2022. Net cash inflows for the current three-month period ended
August 31, 2023, include placing cash amounts on short term
deposits and receipt of cash from matured deposits, totalled US$
411,283. The cashflows for the two periods are shown below:
Six-Month Period Ended August 31, Three-Month Period Ended August 31,
2023 2023
(Unaudited) (Unaudited)
US$ US$
Statement of cashflows
-------------------------------------- --------------------------------------
Cash flows from operating activities (2,787,748) (1,206,056)
-------------------------------------- --------------------------------------
Cash flows from investing activities (2,118,913) (893,424)
-------------------------------------- --------------------------------------
Cash flows from financing activities
* (1,335,717) 2,510,763
-------------------------------------- --------------------------------------
Net cash flows during the period (6,242,378) 411,283
-------------------------------------- --------------------------------------
Cash balances at beginning of the
period 7,746,519 1,092,858
-------------------------------------- --------------------------------------
Cash balances at the end of the
period 1,504,141 1,504,141
-------------------------------------- --------------------------------------
* includes US$ 1,426,589 placed on short term deposit during the
six-month period ended August 31, 2023, and receipt of maturing
deposits of US$ 2,478,993 during the three-month period ended
August 31, 2023 .
(g) Liquidity and Capital Resources
As at August 31, 2023, the Company had cash and cash equivalents
(including short term cash deposits) of US$ 42,930,730, and a
working capital surplus of US$ 2,619,378. As of February 28, 2023,
the Company had cash and cash equivalents of US$ 7,746,519, and a
working capital surplus of US$ 7,135,119.
Post period end on 28 September 2023, the Company announced an
updated Mineral Resource Estimate ("MRE") at the Company's Basin
Project, Arizona. As per the Gross Overriding Royalty Agreement
with the Lithium Royalty Company ("LRC"), this new contained LCE
Tonnage, which was well over the contracted threshold of 1 million
tonnes LCE, enabled the Company to trigger the payment of US$2.5
million from LRC, which was received by the Company in October
2023.
(h) Outstanding Share Data
As of August 31, 2023, the following securities were
outstanding:
Shares 390,609,439
Warrants 81,698,305
------------
Stock options 37,131,304
------------
Fully diluted shares outstanding 509,439,048
------------
The Company's objectives when managing capital are to safeguard
its ability to continue as a going concern, so that it can continue
to provide returns for shareholders, benefits for other
stakeholders and to maintain an optimal capital structure to reduce
the cost of capital.
The capital structure of the Company includes cash and cash
equivalents, equity attributable to equity holders comprised of
contributed equity, reserves and accumulated losses. In order to
maintain or adjust the capital structure, the Company may issue new
shares, sell assets or adjust the level of activities undertaken by
the Company.
The Company monitors capital based on cash flow requirements for
operational, exploration and evaluation expenditures. The Company
has no debt or other borrowings as at the date of this Application.
The Company will continue to use capital market issuances to
satisfy anticipated funding requirements.
The availability of equity capital, and the price at which
additional equity could be issued, is dependent upon the success of
the Company's exploration activities, and upon the state of the
capital markets generally. Additional financing may not be
available on terms favourable to the Company or at all. If the
Company does not receive future financing, it may not be possible
for the Company to advance the exploration and development of its
mineral exploration properties. If the Company is not able to fund
these minimum expenditures, it may not be able to maintain part or
all of its mineral exploration property interests. See "Risk
Factors".
(i) Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet
arrangements.
(j) Transactions with Related Parties
The Company has conducted transactions with officers, directors
and persons or companies related to directors or officers and paid
or accrued amounts as follows:
Edgewater Associates Limited ("Edgewater")
During the six-month period ended 31 August 2023, Directors and
Officers insurance was obtained through Edgewater, which is a 100%
subsidiary of Manx Financial Group ("MFG"). James Mellon and Denham
Eke are Directors of MFG and Denham Eke is a Director of
Edgewater.
During the period, the premium payable on the policy was US$
96,724 (year ended 28 February 2023: US$ 49,318), of which US$
33,424 was prepaid as at the period end (28 February 2023: US$
14,497).
(k) Critical Accounting Estimates
The preparation of financial statements in conformity with IFRS
requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements and reported amounts of revenues and expenses during the
reporting period. Such estimates and assumptions affect the
carrying value of assets, and impact decisions as to when
exploration and development costs should be capitalized or
expensed.
As at August 31, 2023, the Company had incurred total
capitalised exploration expenditures, including capitalised licence
and permit costs, of US$ 11,881,133. Changes in management's
judgment as to the prospective nature, assessment of the existence
or otherwise of economically recoverable reserves, technical
feasibility and/or commercial viability of the relevant tenements
and the Company's intentions with respect to the relevant
tenements, could affect the assessment of the recoverable
amount.
The Company regularly reviews its estimates and assumptions:
however, actual results could differ from these estimates and these
differences could be material.
Bradda Head Lithium Limited
Unaudited Condensed Consolidated Interim Financial
Statements
For the six and three-month period ended August 31, 2023
Chairman's statement
Introduction
I am pleased to present the unaudited Interim Results for Bradda
Head Lithium Limited (the "Company" or "Bradda Head") for the
six-month period ended 31 August 2023.
Operational review
The six-month period to 31 August 2023 has been both exciting
and extremely busy for the Company, focussing on our key
projects.
Basin Project
Drilling continued at our Basin clay project in Arizona, with
the third drill programme in the area finishing the fourteenth and
final hole on August 10, 2023 for a total drilled meterage of
2,355. The programme encountered better-than-expected thicknesses
of clay, further confirming that lithium-bearing clays continue and
appear to thicken to the north into the Company's Basin North
("BN") claims, and likely west into the Basin West ("BW") claims.
The highest single interval grade to date was encountered during
the programme, with assay results identifying a grade of 2,791ppm
Li over 0.40m and a separate sample of 641 ppm Li over 1.22m.
Highlights from the 2023 Basin East ("BE") and Basin East
Extension ("BEE") drill programme
Hole ID Total Upper Clay Upper Clay High-grade High-grade Lower Clay Lower Clay
hole depth zone mean zone Interval Interval zone interval zone interval
grade (Li interval grade in Intersection mean grade thickness, in
ppm) thickness, Upper zone length in (Li ppm) meters
in meters over 1,000 meters
ppm cut-off
(ppm)
BES-23-01 77.72 N/A N/A N/A N/A 484 31.97
------------ -------------- ------------- ------------- ------------- -------------- --------------
BES-23-02 102.87 826 46.24 1,005 13.38 596 17.49
------------ -------------- ------------- ------------- ------------- -------------- --------------
BES-23-03 137.92 954 63.12 1,327 24.32 729 34.24
------------ -------------- ------------- ------------- ------------- -------------- --------------
BES-23-04 111.25 1,077 66.92 1,602 18.30 686 15.23
------------ -------------- ------------- ------------- ------------- -------------- --------------
BES-23-05 191.11 944 63.71 1,029 32.93 701 32.92
------------ -------------- ------------- ------------- ------------- -------------- --------------
BES-23-06 181.97 867 81.98 1,363 20.73 657 32.33
------------ -------------- ------------- ------------- ------------- -------------- --------------
BES-23-07 221.28 906 82.30 1,324 20.87 642 21.96
------------ -------------- ------------- ------------- ------------- -------------- --------------
BES-23-08 205.13 838 71.94 1,221 8.99 686 9.14
------------ -------------- ------------- ------------- ------------- -------------- --------------
BES-23-09 139.29 812 74.21 1,262 11.89 Not drilled NA
------------ -------------- ------------- ------------- ------------- -------------- --------------
BES-23-10 211.23 944 81.60 1,325 19.79 Not drilled NA
------------ -------------- ------------- ------------- ------------- -------------- --------------
BES-23-11 197.21 903 88.7 1,427 12.51 Not drilled NA
------------ -------------- ------------- ------------- ------------- -------------- --------------
BES-23-12 172.82 983 75.13 1,339 27.6 742 11.12
------------ -------------- ------------- ------------- ------------- -------------- --------------
Note: all lengths represent true thickness as sedimentary
sequence is horizontal and holes are vertical (90 degrees to
stratigraphy)
The high-grade unit previously found in BE has similar grades
and maintains strong continuity across all of BEE and now confirmed
into BN, likely extending into BW. This is positive for any future
mining operation, as the high-grade unit sits in the upper clay
unit which forms the shallowest part of the deposit and cropping
out at BE. The remarkable continuity and consistency of the lithium
intercepts in the upper clay suggest the presence of extensive
lithium mineralisation throughout the project area, indicating the
potential for a sizeable lithium deposit.
Following completion of the drill programme, the results were
fed into an updated MRE conducted by SRK Consulting (UK) Ltd
("SRK"), an independent mining consultancy, released post
quarter-end on 28 September 2023. Based on 2,355.20m of sonic
drilling completed as part of the 2023 Basin drill programme,
Bradda Head added 729 kt of Lithium Carbonate Equivalent ("LCE") to
the Inferred Mineral Resource, for an updated total Inferred LCE
content of 1.0 Mt. The total new Mineral Resource now comprises
17.0 million tonnes in the Indicated category at 940 ppm carrying
85kt LCE, and 210 million tonnes in the Inferred category at 900
ppm, carrying 1,000 kt LCE.
Mineral Resource Statement for Basin East, Basin East Extension
and Basin North effective 1 September 2023
Classification Domain Tonnes Mean Grade Contained Metal
Mt Li (ppm) K (%) LCE (kt) K (kt)
------- --------- ------ --------- -------
Indicated Upper Clay 11 720 3.5 42 380
--------------- ------- --------- ------ --------- -------
Upper Clay HG 6 1350 3.2 43 190
-------------------------------- ------- --------- ------ --------- -------
Lower Clay - - - - -
--------------- ------- --------- ------ --------- -------
SubTotal 17 940 3.4 85 570
-------------------------------- ------- --------- ------ --------- -------
Inferred Upper Clay 143 790 2.7 600 3,800
--------------- ------- --------- ------ --------- -------
Upper Clay HG 48 1290 3.1 330 1,500
-------------------------------- ------- --------- ------ --------- -------
Lower Clay 19 690 2.8 70 530
-------------------------------- ------- --------- ------ --------- -------
SubTotal 210 900 2.8 1,000 5,800
-------------------------------- ------- --------- ------ --------- -------
-- Mineral Resource statement has an effective date of 1 September 2023.
-- The Mineral Resource is reported using a cut-off grade of 550
ppm Li and is constrained to an optimised open pit shell, which was
generated using the following assumptions: lithium carbonate metal
prices of 22,000 USD/tLCE; State of Arizona royalty (selling cost)
of 6%; operating costs of 40 USD/ tore; Li recovery of 72%; mining
dilution and recovery of 0% and 100%; and pit slope angle of
45deg.
-- Tonnages are reported in metric units.
-- Rounding as required by reporting guidelines may result in
apparent summation differences between tonnes, grade and contained
metal content which are not considered material.
-- Conversion factor of Li metal to LCE = 5.323
-- The figures above are reported on a gross basis given
Bradda's 100% interest in the property
The average in situ grade of the Inferred Basin East Mineral
Resource has increased from 694 to 900 ppm Li, a 30% increase.
Following the release of the updated MRE, which included a
contained LCE tonnage of over 1Mt LCE, and as per the Royalty
Agreement with LRC, Bradda Head formally requested payment of US$
2.5 million from LRC, with funds being received during October
2023.
SRK were selected to complete the Mineral Resource Update
analysis and applied a stringent approach to both the in-situ
density measurement and the cut-off grade utilised. A lower in situ
density and higher cut-off grade than previously reported resulted
in a more robust estimate. A significant and pragmatic building
block to develop the on-going test-work plan.
The recent drill results on BEE and BN solidify Bradda Head's
belief in a widespread and continuous lithium-rich stratigraphic
sequence, with potential further into BN and across to BW that the
Company believes will lead to significant resource growth and
opportunity to become a Tier 1 lithium deposit. More drilling is
being planned at BN where a low impact Notice of Intent level
exploration permit is in place and BW upon receipt of the
Environmental Assessment ("EA") from the Bureau of Land Management,
expected during in H2 2024. The area being permitted is over 11km
(2) , which is considerably larger than BE, BEE, and BN combined
(c.6km (2) ).
San Domingo Project
On 10 August 2023, the Company mobilised a drill rig for its
Phase 3 drill programme at the San Domingo pegmatite district in
Arizona, with drilling commencing later in the month. This
represents the second large-scale drill programme conducted in less
than one year at San Domingo, which underscores the Company's
commitment to exploring and unlocking the potential of the 23km (2)
land package held within this highly prospective pegmatite
district.
Bradda Head was granted an exploration permit to drill at its
Northern claim block in the San Domingo pegmatite district. The
Phase 3 drill programme has been rigorously designed, benefiting
from a comprehensive array of data and analyses. Bradda Head's team
of geologists conducted an extensive soil geochemistry survey,
undertook a thorough structural mapping programme, reviewed
previous GPR geophysical data, and carried out additional ground
truthing to optimize the locations and potential effectiveness of
this exploration campaign. The results of this identified several
new high priority targets, which the Company is excited about and
anticipates making new discoveries and extending known lithium
mineralization from the previous programme, completed during March
2023.
Following positive results of soil sampling completed in
February 2023 that identified further spodumene in outcrops at San
Domingo, and in order to strengthen our land holding position,
Bradda Head staked just under 8km(2) of new lode claims at its San
Domingo asset. This is the 4th round of claim expansion at San
Domingo, and the land holding has grown from c.13km(2) to now
c.31km(2) since July 2021.
The soil sampling survey conducted in February 2023 highlighted
specific areas within the existing claim block that displayed
highly prospective indicators for lithium exploration. Follow-up
field work on select geochemical anomalies positively identified
lithium bearing minerals at nearly all anomalies, dominated by the
presence of spodumene. By expanding the current claim block to
trace these areas along strike, the Company aims to maximise the
potential for significant lithium resources and solidify its
position in the region's rapidly evolving lithium market.
Additionally, the newly staked claims provide a buffer zone,
ensuring effective management and protection of the Company's
interests in the area.
The Company looks forward to keeping shareholders updated on the
progress of ongoing drill programme at San Domingo.
Financial Review
During the six-month period ended 31 August 2023, the Company
recorded a loss for the period of US$ 2,229,852 (period ended 31
August 2022: US$ 1,165,319). As at period end, cash and cash
deposit balances stood at US$ 2,930,730 (28 February 2023: US$
7,746,519), capitalised deferred mining, exploration, licence and
permit costs stood at US$ 11,881,133 (28 February 2023: US$
9,574,266), and total assets were US$ 15,467,509 at 31 August 2023
(28 February 2023: US$ 18,198,559).
Post period end on 28 September 2023, the Company announced an
updated MRE at the Company's Basin Project, Arizona. As per the
Gross Overriding Royalty Agreement with LRC, this new contained LCE
Tonnage, which was well over the contracted threshold of 1 million
tonnes LCE, enabled the Company to trigger the payment of US$2.5
million from LRC, which was received by the Company in October
2023.
The Board are in ongoing discussions with legal advisors
regarding the options available to recover the fraudulent option
exercise payment, as communicated to shareholders on 29 March 2022.
Updates will be provided when available.
Approach to Risk and Corporate Governance
The Company's general risk appetite is a moderate, balanced one
that allows it to maintain appropriate growth, profitability and
scalability, whilst ensuring full corporate compliance.
The Group's primary risk drivers include:
- Strategic, Reputational, Credit, Operational, Market,
Liquidity, Foreign Exchange, Capital and Funding, Compliance and
Conduct.
Our risk appetite has been classified as high under an "impact"
matrix defined as Zero, Low, Medium and High. Appropriate steps
have been taken and adequate controls implemented to monitor the
risks of the Company, and the appropriate committees and reporting
structures have been established, which under the Chairmanship of
the Chairman, will monitor risks facing the Company .
Corporate
During June 2023, the Company appointed PKF Littlejohn LLP as
new auditors of the Company, replacing KPMG Audit LLC. As the
Company is listed on the TSX Venture Exchange, the Company is
required to retain an auditor recognised by the Canadian Public
Accountability Board ("CPAB"). KPMG Audit LLC, who has been the
Company's auditor since 2009, is not a participating auditor firm
with CPAB and therefore resigned at the request of the Company.
Bradda Head appointed PKF Littlejohn LLP, a CPAB-recognised
auditor, to audit the Company's financial statements as at and for
the year ended February 28, 2023.
On 29 August 2023, the Company announced the resignation of
Charles FitzRoy as CEO of the Company. During the previous 30
months, Charles was a key figure in a number of milestones, most
notably listing the Company on AIM in Summer 2021 where GBP6.2
million was raised, securing a royalty partnership later that same
year, and in raising approximately GBP10 million of fresh
equity-capital in the Spring of 2022. The search for a new CEO is
ongoing.
Strategy and Outlook
Global demand for lithium is estimated to increase
significantly. A report published by Popular Mechanics during
January 2023, and prepared based on data from the International
Energy Agency, shows that the electrified economy in 2030 is
estimated to need anywhere from 250,000 to 450,000 tonnes of
lithium. During 2021, only 105 tonnes of lithium was produced.
Lithium is an important building block for many components of
renewable energy technology and infrastructure. In the clean energy
race, the United States has been lagging behind in recent years.
Under the Biden Administration, the United States is determined to
break away from the dependence of China for production and
manufacturing of lithium.
We believe that Bradda Head, with its diversified portfolio of
projects located in the USA, is in a unique position to take
advantage of this significant growth in US-based lithium demand,
and in turn create value for shareholders.
John 'Ian' Stalker
Chairman
25 October 2023
Condensed Interim Consolidated Statement of Comprehensive
Income
for the period ended 31 August 2023
Six-month period ended 31 August 2023 Six-month period ended 31 August 2022 Three-month period ended 31 August 2023 Three-month period ended 31 August 2022
(unaudited) (unaudited) (unaudited) (unaudited)
Notes US$ US$ US$ US$
Expenses
General and
administrative 2 (2,593,928) (2,551,978) (1,335,087) (1,346,449)
Share based
payment and
warrant
expense 10 (180,622) (1,285,743) - (91,539)
Foreign
exchange
gain/(loss) 195,791 (1,004,583) 59,316 (694,061)
-------------- -------------- -------------- --------------
Operating loss (2,578,759) (4,842,304) (1,275,771) (2,132,049)
Other income
Warrant fair
value
re-measurement 11 210,061 3,679,505 63,476 849,161
Unrealised
gain/(loss) on
investment 47,974 (2,520) 34,866 (2,520)
Finance income 90,872 - 31,770 -
-------------- -------------- -------------- --------------
Loss before
income tax (2,229,852) (1,165,319) (1,145,659) (1,285,408)
Income tax - - - -
expense
-------------- -------------- -------------- --------------
Loss for the
period (2,229,852) (1,165,319) (1,145,659) (1,285,408)
Other
comprehensive - - - -
income -
foreign
currency
translation
reserve
-------------- -------------- -------------- --------------
Total
comprehensive
loss for the
period (2,229,852) (1,165,319) (1,145,659) (1,285,408)
Basic and
diluted loss
per share (US
cents) 12 (0.57) (0.33) (0.29) (0.33)
The notes on pages 12 to 19 form an integral part of these
condensed consolidated interim financial statements.
Condensed Interim Consolidated Statement of Financial
Position
as at 31 August 2023
Notes 31 August 2023 28 February 2023
(unaudited) (audited)
US$ US$
Non-Current assets
Deferred mining and exploration costs 3 9,162,879 7,461,851
Exploration permits and licences 4 2,718,254 2,112,415
Plant and equipment 8 104,982 79,602
Advances and deposits 6 190,482 104,192
Investment 139,735 91,761
-------------- --------------
Total non-current assets 12,316,332 9,849,821
-------------- --------------
Current assets
Cash and cash equivalents 1,504,141 7,746,519
Cash deposits 1,426,589 -
Advances and deposits 6 61,379 385,624
Trade and other receivables 6 159,068 216,595
-------------- --------------
Total current assets 3,151,177 8,348,738
-------------- --------------
Total assets 15,467,509 18,198,559
Equity
Share premium 9 30,616,373 30,616,373
Retained deficit (15,680,663) (13,631,433)
-------------- --------------
Total equity 14,935,710 16,984,940
-------------- --------------
Current liabilities
Trade and other payables 7 511,659 983,418
Warrant liability 11 20,140 230,201
-------------- --------------
Total current liabilities 531,799 1,213,619
-------------- --------------
Total equity and liabilities 15,467,509 18,198,559
The notes on pages 12 to 19 form an integral part of these
condensed consolidated interim financial statements.
These financial statements were approved by the Board of
Directors on 25 October 2023 and were signed on their behalf
by:
Denham Eke
Director
Condensed Interim Consolidated Statement of Changes in
Equity
for the period ended 31 August 2023
Share premium Retained deficit Total
US$ US$ US$
Balance at 1 March 2023 (audited) 30,616,373 (13,631,433) 16,984,940
Total comprehensive loss for the period
Loss for the period - (2,229,852) (2,229,852)
-------------- -------------- --------------
Total comprehensive loss for the period - (2,229,852) (2,229,852)
Transactions with owners of the Company
Equity settled share-based payments
(note 10) - 180,622 180,622
-------------- -------------- --------------
Total transactions with owners of the
Company - 180,622 180,622
-------------- -------------- --------------
Balance at 31 August 2023 (unaudited) 30,616,373 (15,680,663) 14,935,710
The notes on pages 12 to 19 form an integral part of these
condensed consolidated interim financial statements.
Condensed Interim Consolidated Statement of Changes in
Equity
for the period ended 31 August 2023 (continued)
Share premium Retained deficit Total
US$ US$ US$
Balance at 1 March 2022 (audited) 23,434,385 (11,177,220) 12,257,165
Total comprehensive loss for the period
Loss for the period - (1,165,319) (1,165,319)
-------------- -------------- --------------
Total comprehensive loss for the period - (1,165,319) (1,165,319)
Transactions with owners of the Company
Issue of ordinary shares (note 9 and note 11) 7,581,351 - 7,581,351
Share issue costs capitalised (note 9) (547,916) - (547,916)
Equity settled share-based payments (note 10) - 1,285,743 1,285,743
-------------- -------------- --------------
Total transactions with owners of the Company 7,033,435 1,285,743 8,319,178
-------------- -------------- --------------
Balance at 31 August 2022 (unaudited) 30,467,820 (11,056,796) 19,411,024
The notes on pages 12 to 19 form an integral part of these
condensed consolidated interim financial statements.
Condensed Interim Consolidated Statement of C ash Flows
for the period ended 31 August 2023
Six-month period ended 31 August 2023 Six-month period ended 31 August 2022 Three-month period ended 31 August 2023 Three-month period ended 31 August 2022
Notes (unaudited) (unaudited) (unaudited) (unaudited)
US$ US$ US$ US$
Cash flows from operating activities
Loss before income tax (2,229,852) (1,165,319) (1,145,659) (1,285,408)
Adjusted for non-cash and non-operating
items:
Depreciation 8 24,620 14,176 13,699 9,532
Unrealised fair value gain on
investment (47,974) 2,520 (34,866) 2,520
Equity settled share based payments
expense 10, 11 180,622 1,285,743 - 91,539
Warrant fair value re-measurement 11 (210,061) (3,679,505) (63,476) (849,161)
Unrealised FX on cash balances - 1,004,583 - 694,061
Cash interest income (90,872) - (31,770) -
-------------- -------------- -------------- --------------
(2,373,517) (2,537,802) (1,262,072) (1,336,917)
Change in trade and other receivables 57,525 (460,495) 9,800 (171,491)
Change in trade and other payables (471,756) (743,903) 46,216 7,723
-------------- -------------- -------------- --------------
Net cash flows used by operating
activities (2,787,748) (3,742,200) (1,206,056) (1,500,685)
Cash flows from investing activities
Amounts paid for deferred mining and
exploration costs 3 (1,701,028) (275,343) (752,583) (262,582)
Amounts paid for licences and permits 4 (605,839) (689,797) (325,545) (395,374)
Cash paid for bonding deposit received 237,954 - 184,704 -
Equipment purchased 8 (50,000) (58,672) - -
-------------- -------------- -------------- --------------
Net cash flows used by investing
activities (2,118,913) (1,023,812) (893,424) (657,956)
Cash flows from financing activities
Cash received from shares and warrants
issued 9 - 12,304,100 - -
Share issue costs paid 9 - (547,916) - -
Cash interest income 90,872 - 31,770 -
Short term deposits placed/(returned) (1,426,589) - 2,478,993 -
-------------- -------------- -------------- --------------
Net cash flows from financing
activities (1,335,717) 11,756,184 2,510,763 -
-------------- -------------- -------------- --------------
(Decrease) / increase in cash and cash
equivalents (6,242,378) 6,990,172 411,283 (2,158,641)
Cash and cash equivalents at
beginning of period 7,746,519 7,327,303 1,092,858 16,165,594
Effect of foreign exchange on cash
balances - (1,004,583) - (694,061)
-------------- -------------- -------------- --------------
Cash and cash equivalents at end of
period 1,504,141 13,312,892 1,504,141 13,312,892
The notes on pages 12 to 19 form an integral part of these
condensed consolidated interim financial statements.
1 Reporting Entity
Bradda Head Lithium Limited (the "Company") is a company
domiciled in the British Virgin Islands. The address of the
Company's registered office is Craigmuir Chambers, Road Town,
Tortola, British Virgin Islands. The Company and its subsidiaries
together are referred to as the "Group".
The Company is a lithium exploration Group focused on developing
its projects in the USA.
These interim financial statements have been prepared in
accordance with IAS 34 Interim Financial Reporting and should be
read in conjunction with the last annual consolidated financial
statements as at and for the year ended 28 February 2023 ("last
annual financial statements"). They do not include all of the
information required for a complete set of IFRS financial
statements. However, selected explanatory notes are included to
explain events and transactions that are significant to an
understanding of the changes in the Group's financial position and
performance since the last annual financial statements.
The financial information in this report has been prepared in
accordance with the Company's accounting policies and in
consistency with the last annual financial statements. Full details
of the accounting policies adopted by the Company are contained in
the financial statements included in the Company's annual report
for the year ended 28 February 2023, which is available on the
Group's website: www.braddheadltd.com . These unaudited condensed
consolidated interim financial statements should be read in
conjunction with the audited Consolidated Financial Statements for
the year ended 28 February 2023.
2 General and administrative
The Group's general and administrative expenses include the
following:
Six-month period Six-month period Three-month period Three-month period
ended 31 August 2023 ended 31 August 2022 ended 31 August 2023 ended 31 August 2022
(unaudited) (unaudited) (unaudited) (unaudited)
US$ US$ US$ US$
Auditors' fees 16,440 101,441 (3,160) 19,600
Directors and
management fees and
salaries 291,157 269,276 153,616 136,602
Legal and accounting 201,584 174,937 117,971 74,631
Contractor costs 1,213,978 1,260,523 662,111 694,697
Professional and
marketing costs 404,552 609,567 200,350 302,239
Other administrative
costs 466,217 136,234 204,199 118,680
-------------- -------------- -------------- --------------
Total 2,593,928 2,551,978 1,335,087 1,346,449
3 Deferred mine exploration costs
The schedule below details the exploration costs capitalised to
date:
Total
US$
Cost and net book value
At 28 February 2022 (audited) 4,183,744
--------------
Capitalised during the year 3,278,107
--------------
At 28 February 2023 (audited) 7,461,851
Capitalised during the period 1,701,028
--------------
At 31 August 2023 (unaudited) 9,162,879
Cost and net book value
At 31 August 2023 (unaudited) 9,162,879
At 28 February 2023 (audited) 7,461,851
The recoverability of the carrying amounts of exploration and
evaluation assets is dependent on the successful development and
commercial exploitation or sale of the respective area of interest,
as well as maintaining the assets in good standing. The Group
assessed the DMEC relating to areas for which licenses and permits
are held, for impairment as at 31 August 2023. The Board concluded
that no facts and circumstances have been identified which suggest
the recoverable amount of these assets would not exceed the
carrying amount and, as such, no impairment was recognised during
the period.
During the year ended 28 February 2023, an impairment charge of
US$ Nil was recognised.
4 Exploration permits and licences
The schedule below details the exploration permit and licence
costs capitalised to date:
Total
US$
Cost and net book value
At 28 February 2022 (audited) 1,549,076
Capitalised during the year 582,809
Impairment (19,470)
--------------
At 28 February 2023 (audited) 2,112,415
Capitalised during the period 605,839
--------------
At 31 August 2023 (unaudited) 2,718,254
Cost and net book value
At 31 August 2023 (unaudited) 2,718,254
At 28 February 2023 (audited) 2,112,415
The Group assessed the carrying amount of the licences and
permits held for impairment as at 31 August 2023. The Board
concluded that no facts and circumstances have been identified
which suggest the recoverable amount of these assets would not
exceed the carrying amount and, as such, no impairment was
recognised during the period.
During the year ended 28 February 2023, an impairment charge of
US$ 19,470 was recognised as a result of project licences and
permits that were not renewed.
5 Investment in subsidiary undertakings
As at 31 August 2023, the Group had the following
subsidiaries:
Name of company Place of Ownership Principal activity
incorporation interest
Bradda Head Limited* BVI 100% Holding company of entities
below
Zenolith (USA) LLC USA 100% Holds USA lithium licences
and permits
Verde Grande LLC USA 100% Holds USA lithium licences
and permits
Gray Wash LLC USA 100% Holds USA lithium licences
and permits
San Domingo LLC USA 100% Holds USA lithium licences
** and permits
* Held directly by the Company. All other holdings are
indirectly held through Bradda Head Limited
** Formed on 8 May 2023
As at 28 February 2023, the Group had the following
subsidiaries:
Name of company Place of Ownership Principal activity
incorporation interest
Bradda Head Limited* BVI 100% Holding company of entities
below
Zenolith (USA) LLC USA 100% Holds USA lithium licences
and permits
Verde Grande LLC USA 100% Holds USA lithium licences
and permits
Gray Wash LLC USA 100% Holds USA lithium licences
and permits
* Held directly by the Company. All other holdings are
indirectly held through Bradda Head Limited
The condensed interim consolidated financial statements include
the results of the subsidiaries for the full interim period from 1
March 2023 to 31 August 2023, and up to the date that control
ceases.
6 Trade and other receivables and advances and deposits
Non-current
31 August 2023 28 February 2023
(unaudited) (audited)
US$ US$
Advances and deposits 190,482 104,192
Current
US$ US$
Trade and other receivables 159,068 216,595
Advances and deposits 61,379 385,624
7 Trade and other payables
31 August 2023 28 February 2023
(unaudited) (audited)
US$ US$
Trade payables 500,859 904,944
Accrued expenses and other payables 10,800 78,474
-------------- --------------
511,659 983,418
8 Plant and equipment
Motor vehicle Total
Cost US$ US$
As at 28 February 2022 (audited) 55,718 55,718
Additions during the period 58,672 58,672
------------ ------------
As at 28 February 2023 (audited) 114,390 114,390
Additions during the period 50,000 50,000
------------ ------------
As at 31 August 2023 (unaudited) 164,390 164,390
Motor vehicle Total
Accumulated depreciation US$ US$
As at 28 February 2022 (audited) (1,548) (1,548)
Depreciation charge for the period (33,240) (33,240)
------------ ------------
As at 28 February 2023 (audited) (34,788) (34,788)
Additions during the period (24,620) (24,620)
------------ ------------
As at 31 August 2023 (unaudited) (59,408) (59,408)
Carrying amount
As at 31 August 2023 (unaudited) 104,982 104,982
As at 28 February 2023 (audited) 79,602 79,602
9 Share premium
Authorised
The Company is authorised to issue an unlimited number of nil
par value shares of a single class.
Shares Share capital Share premium
Issued ordinary shares of US$0.00 each US$ US$
At 28 February 2022 (audited) 317,413,879 - 23,434,385
Shares issued for cash (note 11) 73,195,560 - 7,729,904
Share issue costs capitalised - - (547,916)
-------------- -------------- --------------
At 28 February 2023 (audited) 390,609,439 - 30,467,820
31 August 2023 (unaudited) 390,609,439 - 30,467,820
10 Equity settled share based payments
The cost of equity settled transactions with certain Directors
of the Company and other participants ("Participants") is measured
by reference to the fair value at the date on which they are
granted. The fair value is determined based on the Black-Scholes
option pricing model.
Options and warrants
The total number of share options and warrants in issue as at
the period end is set out below.
Recipient Grant Term Exercise Number at 1 Number Issued Number Lapsed/ Number Number at 31 Fair value
Date in Price March 2023 cancelled/expired Exercised August 2023
years (audited) (unaudited)
Options US$
Directors and
Participants April 2018 5 US$ 0.15668 1,606,304 - - - 1,606,304 24,028
Directors and
Participants June 2021 5 US$ 0.048 18,000,000 - - - 18,000,000 1,110,556
Directors and
Participants September 2021 5 GBP0.09 3,500,000 - - - 3,500,000 314,962
Directors and
Participants April 2022 5 GBP0.18 8,925,000 - (550,000) - 8,375,000 1,022,183
Directors and
Participants December 2022 5 GBP0.105 1,000,000 - - - 1,000,000 273,727
Directors and
Participants April 2023 5 GBP0.18 - 4,800,000 (150,000) - 4,650,000 174,978
Warrants
Supplier warrants July 2021 5 GBP0.0550 1,818,182 - - - 1,818,182 124,482
Supplier warrants July 2021 3 GBP0.0825 2,254,545 - - - 2,254,545 8,275
Shareholder December
warrants 2021 2 GBP0.0885 1,185,687 - - - 1,185,687 44,858
Supplier warrants April 2022 2 GBP0.1350 3,244,331 - - - 3,244,331 284,918
-------------- -------------- -------------- -------------- -------------- --------------
41,534,049 4,800,000 (700,000) - 45,634,049 3,382,967
10 Equity settled share based payments (continued)
The amount expensed in the income statement has been calculated
by reference to the fair value at grant date of the equity
instrument and the estimated number of equity instruments to vest
after the vesting period.
Six-month period Six-month period Three-month period Three-month period
ended 31 August 2023 ended 31 August 2022 ended 31 August 2023 ended 31 August 2022
(unaudited) (unaudited) (unaudited) (unaudited)
US$ US$ US$ US$
Share based payments
charge (180,622) (1,285,743) - (91,539)
The inputs used in the measurement of the fair values at grant
date of the equity-settled share-based payment plans issued during
the period are as follows:
April 2023 options
Award date and exercise price
Fair value at grant date GBP0.0303
Exercise price GBP0.06
Weight average expected volatility 78.50%
Weighted average expected life (years) 5
Risk-free interest rate (based on comparable companies) 3.82%
Terms of the issued options are as follows:
- 4,800,000 options have been granted that vest fully on grant
date. All un-exercised options expire after a period of 5 years
from admission date. It is assumed that options are exercised
within 5 years from date of grant. The applied volatility is based
on historical volatility.
-
11 Warrants
The cost of equity warrants granted during the period are
measured by reference to the fair value at the date on which they
are granted. The fair value is determined based on the
Black-Scholes option pricing model.
During the six-month period ended 31 August 2023, no new
warrants were issued (period ended 31 August 2022: 73,195,560
warrants).
The total number of warrants in issue as at the period end is
set out below.
Recipient Grant Term Exercise Warrants at 1 Number of Number of Number of Number of Fair value
Date in Price March 2023 Warrants Warrants Lapsed/ Warrants Warrants at 31
years (audited) Issued cancelled/expired Exercised August 2022
(unaudited)
Warrants US$
Shareholder April
warrants 2022 2 GBP0.2100 73,195,560 - - - 73,195,560 20,140
-------------- -------------- -------------- -------------- -------------- --------------
73,195,560 - - - 73,195,560 20,140
Guidance as per IAS 32: Financial Instruments has been applied
in classifying these as a financial liability. This is due to the
exercise price and the Company's functional currency being
different. As a result, the fair value applied to the shareholder
warrants has been classified as a financial liability. At period
end, the warrant liability has been re-measured to fair value, with
a corresponding entry to profit and loss of US$ 210,061 (period
ended 31 August 2022: Nil) within Warrant Fair Value
Re-Measurement.
Reconciliation of warrant liability fair value:
Fair value
US$
Balance at 1 March 2023 230,201
Fair value re-measurement (210,061)
--------------
Balance at 31 August 2023 20,140
12 Basic and diluted loss per share
The calculation of basic profit per share of the Company is
based on the loss for the period of US$ 2,229,852 (six-month period
to 31 August 2022: loss of US$ 1,165,319) and the weighted average
number of shares of 390,609,439 (at 31 August 2022: 349,139,509) in
issue during the period.
Diluted loss per share is calculated by adjusting the weighted
average number of ordinary shares outstanding to assume conversion
of all dilutive potential ordinary shares such as warrants and
options. An adjustment for the dilutive effect of share options and
warrants in the current period has not been reflected in the
calculation of the diluted loss per share, as the effect would have
been anti-dilutive, due the Company recognising a loss for the
period.
13 Related party transactions and balances
Edgewater Associates Limited ("Edgewater")
During the six-month period ended 31 August 2023, Directors and
Officers insurance was obtained through Edgewater, which is a 100%
subsidiary of Manx Financial Group ("MFG"). James Mellon and Denham
Eke are Directors of MFG and Denham Eke is a Director of Edgewater
.
During the period, the premium payable on the policy was US$
96,724 (year ended 28 February 2023: US$ 49,318), of which US$
33,424 was prepaid as at the period end (28 February 2023: US$
14,497).
14 Commitments and contingent liabilities
The Group has certain obligations to expend minimum amounts on
exploration works on mining tenements in order to retain an
interest in them, which would be approximately US$ 405,000 during
the next 12 months. This includes annual fees in respect of licence
renewals. These obligations may be varied from time to time,
subject to approval and are expected to be filled in the normal
course of exploration and development activities of the
Company.
15 Events after the reporting date
On 28 September 2023, the Company announced an updated Mineral
Resource Estimate ("MRE") at the Company's Basin Project, Arizona.
As per the Gross Overriding Royalty Agreement with the Lithium
Royalty Company ("LRC"), this new contained LCE Tonnage, which was
well over the contracted threshold of 1 million tonnes LCE, enabled
the Company to trigger the payment of US$2.5 million from LRC,
which was received by the Company in October 2023.
ENDS
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END
IR FIFLEIRLEFIV
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October 25, 2023 02:00 ET (06:00 GMT)
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