16:00 Wed 30 Sep 2020
Chesterfield Res Plc - Interim Results
Chesterfield Resources PLC / EPIC: CHF / Market: LSE / Sector: Mining
CHESTERFIELD RESOURCES PLC
("Chesterfield" or the "Company")
Interim Results
Chesterfield Resources PLC, the LSE listed mineral exploration company with projects in
Highlights
· Impact of Covid-19 on Chesterfield.
· Robust outlook for copper and gold.
· AMT geophysics programme commences.
Chairman's review of year to date
Impact of Covid-19
I imagine every Chairman's letter in company reports this year will be discussing the impact of the Covid-19 epidemic. We have been somewhat fortunate in that we had just completed our target development programme when the epidemic hit. This meant we thankfully went into lockdown with a relatively low-cost structure. However, the impact of the
Coming out of lockdown we then had the pleasant surprise of a bull market in mining stocks, the likes of which we haven't seen for a decade. The first commodity to start an upward trajectory was gold. We took the opportunity of the lockdown to conduct a desktop study of the gold potential of our exploration plays. The conclusion was that Cyprus VMS deposits are likely to have a larger than average gold content and are also relatively free of impurities. There is an opportunity for us because gold was never properly exploited when
However, our main exploration target remains copper. The price of copper has also taken off and is up more than 50% from its lows back in
The medium-term outlook for copper is also encouraging. The Covid-19 crisis has led to vast multi-trillion-dollar stimulus programmes, much of which will go into infrastructure.
The epidemic has been a wake-up call that the human race is vulnerable to global crises, and this has caused an even greater focus on environmental issues, notably climate change and clean air. Therefore, infrastructure spending is likely to be tilted towards to environmentally beneficial projects such as the electrification of energy and of transportation. "Clean and Green" in this context leads to copper demand, as anything electrical, from wiring to motors, consumes a great deal of copper. This includes wind-turbines, solar farms, electric railway projects (like HS2), electric cars and their charging infrastructure, among others. While recent demand for copper has come from
We were also fortunate that
However, in getting our drilling and survey programme underway we have encountered some issues bringing in teams from Covid-19 hotspots in
AMT geophysics survey commences
As I write this letter, the Company has commenced a programme of exploration test work on our Troodos West licence area. We spent 2019 developing an extensive list of targets and had started testing these with a percussion drill at the start of the year. Covid-19 then struck and this programme had to be postponed, with percussion drilling re-commencing in June. We commenced our diamond drill programme in mid-September. This programme is to be integrated with percussion drilling and an interesting type of geophysics survey called AMT.
AMT is an advanced technology that measures the natural electromagnetic signals in the earth's crust, and as such is often referred to as a "natural source" survey. It is a branch of geophysics called magnetotellurics (MT). AMT stands for audio magnetotellurics, because it measures natural high frequency signals in the audio range. These are natural electrical charges in the ground that are generated by the lightning strikes that continually hit the earth around the globe. These induce electric and magnetic fields into the earth's crust and oceans. These currents produce signals which can then be measured over a range of frequencies using probes placed in the ground. Rock resistivity values are then calculated from these AMT measurements, which are the basis creating a 3D image of the subsurface.
This type of survey has proven successful in detecting similar VMS (Volcanogenic Massive Sulphide) to those we are exploring for in, for example, the Iberian Pyrite Belt of southern
The survey by itself is not fool proof as it can give out false positives but, taken in conjunction with other geological data, helps provide a good target selection tool for our percussion drill. The percussion drill will then test these targets to verify that an anomaly indicated by the AMT survey is indeed sulphide mineralisation. If so, that in turn will be tested by the diamond drill to assay it for mineral grade. In this way we are using the three tools (AMT survey, percussion drill and diamond drill) in a sequenced programme to help maximise our chances of making a discovery.
In July we raised
We are looking forward to our test programmes and keeping shareholders updated.
Financials
As is to be expected with an exploration company, for the six-month period ended
Responsibility Statement
We confirm that to the best of our knowledge:
· the interim financial statements have been prepared in accordance with International Accounting Standards 34, Interim Financial Reporting, as adopted by the EU;
· give a true and fair view of the assets, liabilities, financial position and loss of the Company;
· the Interim report includes a fair review of the information required by DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the set of interim financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and
· The Interim report includes a fair review of the information required by DTR 4.2.8R of the Disclosure and Transparency Rules, being the information required on related party transactions.
The interim report was approved by the Board of Directors and the above responsibility statement was signed on its behalf by:
Executive Chairman
30 September 2020
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.
For further information please visit www.chesterfieldresourcesplc.com or contact:
Chesterfield Resources plc |
|
Tel: +44 (0) 7901 552277 |
|
Tel: +44 20 3884 8450 |
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
|
Notes |
6 months to £ |
6 months to £ |
Continuing operations |
|
|
|
Revenue |
|
- |
- |
Administration expenses |
|
(257,465) |
(303,704) |
Operating loss |
|
(257,465) |
(303,704) |
Income tax |
|
- |
- |
Loss for the period |
|
(257,465) |
(303,704) |
Other comprehensive income |
|
|
|
Items that may be reclassified to profit or loss |
|
|
|
Currency translation differences |
|
78,387 |
(1,285) |
Total comprehensive income for the period |
|
(179,078) |
(304,989) |
Total comprehensive income for the period attributable to equity holders |
|
(179,078) |
(304,989) |
Earnings per share from continuing operations attributable to the equity owners of the parent |
|
|
|
Basic and diluted (pence per share) |
5 |
(0.416)p |
(0.492)p |
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
|
Notes |
As at £ |
As at £ |
As at £ |
Non-Current Assets |
|
|
|
|
Property, plant and equipment |
|
15,056 |
20,778 |
21,263 |
Intangible assets |
6 |
1,913,612 |
1,675,562 |
1,473,940 |
|
|
1,928,668 |
1,696,340 |
1,495,203 |
Current Assets |
|
|
|
|
Trade and other receivables |
|
83,148 |
89,498 |
69,129 |
Cash and cash equivalents |
|
316,478 |
748,596 |
1,282,523 |
|
|
399,626 |
838,094 |
1,351,652 |
Total Assets |
|
2,328,294 |
2,534,434 |
2,846,855 |
|
|
|
|
|
Non-Current Liabilities |
|
|
|
|
Deferred tax liabilities |
|
(127,450) |
(127,450) |
(119,747) |
Current Liabilities |
|
|
|
|
Trade and other payables |
|
(41,895) |
(68,957) |
(115,572) |
|
|
|
|
|
Total Liabilities |
|
(169,345) |
(196,407) |
(235,319) |
Net Assets |
|
2,158,949 |
2,338,027 |
2,611,536 |
Capital and Reserves Attributable to Equity Holders of the Company |
|
|
|
|
Share capital |
|
159,933 |
159,933 |
159,933 |
Share premium |
|
3,534,597 |
3,534,597 |
3,534,597 |
Other reserves |
|
54,026 |
(20,003) |
21,089 |
Retained losses |
|
(1,589,607) |
(1,336,500) |
(1,104,083) |
Total Equity |
|
2,158,949 |
2,338,027 |
2,611,536 |
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
|
|
|
Attributable to owners of the Parent |
|
||||
|
Note |
Share capital £ |
Share premium £ |
Other reserves £ |
Retained losses £ |
Total equity £ |
||
Balance as at |
|
159,933 |
3,534,597 |
22,374 |
(800,379) |
2,916,525 |
||
Loss for the period |
|
- |
- |
- |
(303,704) |
(303,704) |
||
Other comprehensive income for the year |
|
|
|
|
|
|
||
Items that may be subsequently reclassified to profit or loss |
|
|
|
|
|
|
||
Currency translation differences |
|
- |
- |
(1,285) |
- |
(1,285) |
||
Total comprehensive income for the year |
|
- |
- |
(1,285) |
(303,704) |
(304,989) |
||
Total transactions with owners, recognised in equity |
|
- |
- |
- |
- |
- |
||
Balance as at |
|
159,933 |
3,534,597 |
21,089 |
(1,104,083) |
2,611,536 |
||
|
|
|
|
|
|
|
||
Balance as at |
|
159,933 |
3,534,597 |
(20,003) |
(1,336,500) |
2,338,027 |
||
Loss for the period |
|
- |
- |
- |
(257,465) |
(257,465) |
||
Other comprehensive income for the year |
|
|
|
|
|
|
||
Items that may be subsequently reclassified to profit or loss |
|
|
|
|
|
|
||
Currency translation differences |
|
- |
- |
78,387 |
- |
78,387 |
||
Total comprehensive income for the year |
|
- |
- |
78,387 |
(257,465) |
(179,078) |
||
Expiry of options |
|
- |
- |
(4,358) |
4,358 |
- |
||
Total transactions with owners, recognised in equity |
|
- |
- |
(4,358) |
4,358 |
- |
||
Balance as at |
|
159,933 |
3,534,597 |
54,026 |
(1,589,607) |
2,158,949 |
||
|
|
|
|
|
|
|
||
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
|
|
Notes |
6 months to Unaudited £ |
6 months to £ |
Cash flows from operating activities |
|
|
|
|
Loss before taxation |
|
|
(257,465) |
(303,704) |
Adjustments for: |
|
|
|
|
Depreciation |
|
|
6,703 |
4,657 |
Increase/(decrease) in trade and other receivables |
|
|
6,348 |
7,940 |
Increase in trade and other payables |
|
|
(27,061) |
18,729 |
Foreign exchange |
|
|
6,185 |
178 |
Net cash used in operations |
|
|
(265,290) |
(272,200) |
Cash flows from investing activities |
|
|
|
|
Purchase of property, plant & equipment |
|
|
- |
(12,061) |
Exploration and evaluation activities |
|
6 |
(166,828) |
(318,942) |
Net cash used in investing activities |
|
|
(166,828) |
(331,003) |
Net cash generated from financing activities |
|
|
- |
- |
Net decrease in cash and cash equivalents |
|
|
(432,118) |
(603,203) |
Cash and cash equivalents at beginning of period |
|
|
748,596 |
1,885,726 |
Cash and cash equivalents at end of period |
|
|
316,478 |
1,282,523 |
NOTES TO THE INTERIM FINANCIAL STATEMENTS
1. General Information
Chesterfield Resources plc is a minerals company exploring primarily for copper and gold in Cyprus and listed on the Standard segment of the Main Market of the London Stock Exchange.
The Company is domiciled in the United Kingdom and incorporated and registered in England and Wales, with registration number 10545738. The Company's registered office is
2. Basis of Preparation
The condensed interim financial statements have been prepared in accordance with IAS 34 "Interim Financial Statements" as adopted by the European Union and the Disclosure and Transparency Rules of the UK Financial Conduct Authority. The condensed interim financial statements should be read in conjunction with the annual financial statements for the period ended
The interim financial information set out above does not constitute statutory accounts within the meaning of the Companies Act 2006. It has been prepared on a going concern basis in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRS) as adopted by the European Union.
Statutory financial statements for the period ended
Going concern
The Group is managing the impact of the COVID-19 pandemic on its business and the uncertainty it creates. The Company has taken swift pre-emptive action to ensure the safety of its employees, contractors and supply chain. This includes a full financial and strategic review designed to safeguard and ensure the stability and longevity of Chesterfield's activities for the benefit for all its stakeholders.
The Directors, having made appropriate enquiries, consider that adequate resources exist for the Company to continue in operational existence for the foreseeable future and that, therefore, it is appropriate to adopt the going concern basis in preparing the condensed interim financial statements for the period ended
Risks and uncertainties
The Board continuously assesses and monitors the key risks of the business. The key risks that could affect the Company's medium term performance and the factors that mitigate those risks have not substantially changed from those set out in the Company's 2019 Annual Report and Financial Statements, a copy of which is available on the Company's website: www.chesterfieldresourcesplc.com. The key financial risks are liquidity risk, credit risk, interest rate risk and fair value estimation.
Critical accounting estimates
The preparation of condensed interim financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the end of the reporting period. Significant items subject to such estimates are set out in Note 2 of the Company's 2019 Annual Report and Financial Statements. The nature and amounts of such estimates have not changed significantly during the interim period.
3. Accounting Policies
Except as described below, the same accounting policies, presentation and methods of computation have been followed in these condensed interim financial statements as were applied in the preparation of the Company's annual financial statements for the period ended
3.1 Changes in accounting policy and disclosures
(a) New and amended standards mandatory for the first time for the financial year beginning
The following new IFRS standards and/or amendments to IFRS standards are mandatory for the first time for the Company:
Standard |
|
Effective date |
|
|
|
IFRS 3 (Amendments) |
Business Combinations |
|
IAS 1 (Amendments) |
Presentation of Financial Statements |
|
IAS 8 (Amendments) |
Accounting policies, Changes in Accounting Estimates |
|
The Directors believe that the adoption of these standards has not had a material impact on the financial statements other than changes to disclosures.
(b) New standards, amendments and Interpretations in issue but not yet effective or not yet endorsed and not early adopted
The standards and interpretations that are issued, but not yet effective, up to the date of issuance of the condensed interim financial statements are listed below. The Company intends to adopt these standards, if applicable when they become effective.
Standard |
|
Effective date |
|
|
|
IAS 1 (Amendments) |
Classification of Liabilities as Current or Non-Current. |
|
Various |
Annual improvements to IFRS Standards 2018-2020 |
|
*Not yet endorsed by the EU.
The Company is evaluating the impact of the new and amended standards above. The Directors believe that these new and amended standards are not expected to have a material impact on the Company's results or shareholders' funds.
4. Dividends
No dividend has been declared or paid by the Company during the six months ended
5. Loss per Share
The calculation of loss per share is based on a retained loss of £257,465 for the six months ended
No diluted earnings per share is presented for the six months ended
6. Intangible fixed assets
The movement in capitalised exploration and evaluation costs during the period was as follows:
Exploration & Evaluation at Cost and Net Book Value |
£ |
Balance as at |
1,675,562 |
Additions |
166,828 |
Exchange rate variances |
71,222 |
As at |
1,913,612 |
7. Events after the balance sheet date
On
On
On
On
On
8. Approval of interim financial statements
The Condensed interim financial statements were approved by the Board of Directors on
**ENDS**
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