10:18 Mon 24 May 2021
Sunrise Resources - Half-year Report
24 May 2021
SUNRISE RESOURCES PLC
(the "Company")
HALF-YEARLY REPORT 2021
Sunrise Resources plc, the AIM-traded company focusing on the development of its CS Pozzolan-Perlite Project in
Operational Highlights
Focus continues on flagship CS Pozzolan-Perlite Project,
· 500-ton pozzolan sample extracted in collaboration with large cement and ready-mix company (CRMC).
· CRMC test grind of bulk sample completed successfully.
· Commercial concrete pours, using Company product, are currently being organised.
· Positive results from recent perlite expansion trial.
· Additional 200-ton perlite sample mined and awaiting further processing.
Other Projects
Clayton Silver-Gold Project in
· Diamond drill hole, a twin of historic hole, validates the Company's belief that historic silver grades are likely under-reported.
· Recovered core from a 7.92m mineralised interval graded 303 g/t (8.84 ounces/ton) silver and 0.2 g/t gold - 84% higher grade than in historic hole.
· Seeking partner for project - discussions underway.
Sundance Gold Project,
· Nine claims staked in Walker Lane Mineral Belt in same area as 1.8 million ounce past producing
· Anomalous bedrock gold mineralisation in altered and quartz veined volcanics.
· Soil sampling programme completed - gold in soil anomaly identified for further testing.
Baker's Gold Project,
· Aboriginal Heritage Survey completed.
· Five RC drill holes completed to test three target areas including old mine workings, areas of gold nugget production and a large gold-in soil geochemical anomaly. Results awaited.
Financial Results Summary
Group loss for the six-months ended
· Interest income of
· Expensed pre-licence exploration costs totalling
· Impairment of deferred exploration asset of
Project expenditure of
Funding during the period
No equity or other funds were raised during the current reporting period except for a small amount raised through the exercise of warrants (
At
The Company relies upon periodic capital fundraisings until such time as cashflow can be derived either from sale of assets or future operations.
Further information:
Sunrise Resources plc |
Tel: +44 (0)1625 838 884 |
Beaumont Cornish Limited Nominated Adviser |
Tel: +44 (0)207 628 3396 |
Peterhouse Capital Limited Broker |
Tel: +44 (0)207 469 0930 |
Chairman's Statement
I am pleased to present the Company's unaudited financial results for the six-month period ended
In the first quarter of this period, we reported significant progress on our flagship CS industrial minerals project with a 500-ton bulk sample of pozzolan being mined and sent to an internationally recognised cement and ready-mix concrete company (CRMC) for testing and a 200-ton sample of horticultural grade raw perlite mined and held for further processing.
The CRMC's testing objective is to assess the suitability of their surplus cement milling facility for grinding the CS natural pozzolan to the target fine grain size and to then test the ground product in some commercial scale concrete pours. The grinding test has now been successfully completed and the target fine grain size achieved.
The concept under discussion with the CRMC is the use of its facility to allow for a low capital cost, low risk start up to production with a purpose-built process plant to be considered as the product gains market acceptance. The CRMC has a substantial ready-mix business that is potentially a captive customer for CS natural pozzolan to be used as a replacement for the large volumes of fly ash traditionally used in its concrete products.
Our expectations for the natural pozzolan market continue to grow as fly ash supplies decline, with rationing in some US markets. Recent moves by the Biden Administration to curb CO2 emissions and stimulate the economy, and infrastructure development in particular, are expected to increase demand for natural pozzolan and add value to our large mine-permitted deposits.
This financial reporting period coincides with the late winter and spring "growing season" in the horticultural perlite industry where demand for expanded perlite horticultural grade perlite is seasonally high and in 2021 our potential customers report that they have experienced exceptionally high demand and a large backlog in orders that need to be filled, as well as difficulties in getting supplies of raw perlite.
Paradoxically for the Company, this increase in demand for perlite has led to these potential customers being too busy to cease commercial production in order for their production facilities to be used to test the Company's product and, as a result, testing has been delayed or cut short. These delays continued into the second quarter of the reporting period, but now appear to be easing as the seasonal rush abates. So far the test results have been mixed due to the inclusion of too much fine perlite in the samples produced by the Company for testing, but it is expected that this issue can be resolved when the 200-ton sample is processed for further trials. The most recent customer feedback from testing completed last week is that, after allowing for the finer size the raw perlite supplied, the CS raw perlite produced a good low density expanded product with good rates and attractive appearance and would be a premium product for the US market.
We predict that mine supply of raw perlite to the independent expanders that we are targeting will reduce further following recent the recent acquisitions of two independent mine producers by large downstream integrated industrial mineral companies who seem likely to divert mine supply to their internal consumption, increasing the opportunities for our material.
Alongside the opportunities for horticultural perlite, the Company is also continuing its evaluation of production opportunities for industrial and construction grades of perlite which make up 84% of the perlite market and which have been produced successfully from CS Project perlite on a laboratory scale. Perlite can also be utilised as a natural pozzolan.
The CS Project continues to be the firm focus for management and expenditure, but in the meantime, and while product testing is concluded, the Company has allocated a modest budget into drilling, testing and advancing the Company's precious metal projects to assist the Company in its plans to valorise these non-core assets through farm-out or outright sale.
At our Clayton Silver Project in
We also acquired an additional gold exploration project within our Westgold subsidiary in
Most recently, and after the six-month period ended
Whilst we have been frustrated with a slower than anticipated progress on our flagship CS Project, due in no small part to delays in customer testing, our large mine-permitted deposits of natural pozzolan and perlite provide a valuable base on which to build and we believe that there is much to look forward to in the coming months, both for the CS Project and for the Company in general.
Executive Chairman
COVID-19
The Company has applied all government guidelines in its day-to-day operations and administration. The restrictions on international travel have impacted the ability of the Company to meet with potential customers in the US and the ability to supervise local operations. Fortunately, this has caused not caused any material delays or setbacks in the advancement of corporate objectives. Management and staff have carried out their duties diligently and efficiently in the circumstances of the "work-from-home" rules and social distancing. The Company is pleased to report that, to date, it has not incurred any positive cases of Coronavirus amongst its staff.
CAUTIONARY NOTICE
The news release may contain certain statements and expressions of belief, expectation or opinion which are forward looking statements, and which relate, inter alia, to the Company's proposed strategy, plans and objectives or to the expectations or intentions of the Company's directors. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the control of the Company that could cause the actual performance or achievements of the Company to be materially different from such forward-looking statements. Accordingly, you should not rely on any forward-looking statements and save as required by the AIM Rules for Companies or by law, the Company does not accept any obligation to disseminate any updates or revisions to such forward-looking statements.
MARKET ABUSE REGULATION (MAR) DISCLOSURE
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of
Consolidated Income Statement
for the six months to
|
Six months to 31 March 2021 Unaudited |
Six months to 31 March 2020 Unaudited
|
Twelve months to 30 September 2020 Audited |
|
£ |
£ |
£ |
|
|
|
|
Pre-licence exploration costs |
(12,985) |
(1,907) |
(4,183) |
|
|
|
|
Impairment of deferred exploration asset |
(7,428) |
- |
- |
|
|
|
|
Administration costs |
(165,581) |
(149,642) |
(298,980)
|
|
|
|
|
Operating loss |
(185,994) |
(151,549) |
(303,163) |
|
|
|
|
(Loss)/gain on disposal of intangible asset |
- |
- |
- |
|
|
|
|
Interest receivable |
39 |
171 |
261 |
|
|
|
|
|
|
|
|
Loss before income tax |
(185,955) |
(151,378) |
(302,902) |
|
|
|
|
Income tax
|
- |
- |
- |
|
|
|
|
Loss for the period attributable to equity holders of the parent |
(185,955) |
(151,378) |
(302,902)
|
|
|
|
|
Loss per share - basic and fully diluted (pence) (Note 2) |
(0.005) |
(0.005) |
(0.009) |
Consolidated Statement of Comprehensive Income
for the six months to
|
Six months to 31 March 2021 Unaudited |
Six months to 31 March 2020 Unaudited
|
Twelve months to 30September 2020 Audited |
|
£ |
£ |
£ |
|
|
|
|
Loss for the period |
(185,955) |
(151,378) |
(302,902) |
|
|
|
|
Other comprehensive income: |
|
|
|
|
|
|
|
Items that could be reclassified subsequently to the income statement: |
|
|
|
|
|
|
|
Foreign exchange translation differences on foreign currency net investments in subsidiaries |
(127,182) |
(13,754) |
(75,659) |
|
|
|
|
|
|
|
|
|
(127,182) |
(13,754) |
(75,659) |
Items that will not be reclassified to the Income Statement: |
|
|
|
Changes in the fair value of equity investments |
758 |
(10,583) |
(1,660) |
|
|
|
|
|
758 |
(10,583) |
(77,319) |
Total comprehensive loss for the period attributable to equity holders of the parent |
(312,379) |
(175,715) |
(380,221) |
Consolidated Statement of Financial Position
as at
|
As at 31 March 2021 Unaudited |
|
As at 31 March 2020 Unaudited
|
|
As at 30 September 2020 Audited |
|
£ |
|
£ |
|
£ |
|
|
|
|
|
|
Non-current assets |
|
|
|
|
|
Intangible assets |
1,997,911 |
|
1,830,071 |
|
1,867,218 |
Right of use assets |
15,178 |
|
21,457 |
|
18,431 |
Other investments |
19,614 |
|
11,405 |
|
19,765 |
|
|
|
|
|
|
|
2,032,703 |
|
1,862,933 |
|
1,905,414 |
|
|
|
|
|
|
Current assets |
|
|
|
|
|
Receivables |
130,521 |
|
66,557 |
|
51,980 |
Cash and cash equivalents |
637,834 |
|
318,581 |
|
1,089,417 |
|
|
|
|
|
|
|
768,355 |
|
385,138 |
|
1,141,397 |
|
|
|
|
|
|
Current liabilities Trade and other payables |
(93,723) |
|
(80,836) |
|
(90,677) |
Lease liability |
(2,248) |
|
(2,437) |
|
(2,364) |
|
|
|
|
|
|
Net current assets |
672,384 |
|
301,865 |
|
1,048,356 |
|
|
|
|
|
|
Non Current liabilities Lease liability |
(4,553) |
|
(7,553) |
|
(7,336) |
Reclamation Liability |
(25,792) |
|
- |
|
- |
|
(30,345) |
|
(7,553) |
|
(7,336) |
|
|
|
|
|
|
Net assets |
2,674,742 |
|
2,157,245 |
|
2,946,434 |
|
|
|
|
|
|
Equity |
|
|
|
|
|
Called up share capital |
3,695,860 |
|
3,296,130 |
|
3,677,997 |
Share premium account |
5,666,997 |
|
5,056,109 |
|
5,655,781 |
Share warrant reserve |
40,774 |
|
21,738 |
|
33,893 |
Fair value reserve |
43,511 |
|
33,830 |
|
42,753 |
Foreign currency reserve |
(77,743) |
|
111,344 |
|
49,439 |
Accumulated losses |
(6,694,657) |
|
(6,361,906) |
|
(6,513,429) |
|
|
|
|
|
|
Equity attributable to owners of the parent |
2,674,742 |
|
2,157,245 |
|
2,946,434 |
|
|
|
|
|
|
Consolidated Statement of Changes in Equity
|
Share capital |
Share premium account |
Share warrant reserve |
Fair value reserve |
Foreign currency reserve |
Accumulated losses |
Total |
|
£ |
£ |
£ |
£ |
£ |
£ |
£ |
At |
2,749,760 |
5,059,244 |
24,476 |
44,413 |
125,098 |
(6,220,042) |
1,782,949 |
Loss for the period |
- |
- |
- |
- |
- |
(151,378) |
(151,378) |
Change in fair value |
- |
- |
- |
(10,583) |
- |
- |
(10,583) |
Exchange differences |
- |
- |
- |
- |
(13,754) |
- |
(13,754) |
Total comprehensive |
|
|
|
|
|
|
|
loss for the period |
- |
- |
- |
(10,583) |
(13,754) |
(151,378) |
(175,715) |
Share issue |
546,370 |
(3,135) |
- |
- |
- |
- |
543,235 |
Share based payments expense |
- |
- |
6,776 |
- |
- |
- |
6,776 |
Transfer of expired warrants |
- |
- |
(9,514) |
- |
- |
9,514 |
- |
At |
3,296,130 |
5,056,109 |
21,738 |
33,830 |
111,344 |
(6,361,906) |
2,157,245 |
Loss for the period |
- |
- |
- |
- |
- |
(151,523) |
(151,523) |
Change in fair value |
- |
- |
- |
8,923 |
- |
- |
8,923 |
Exchange differences |
- |
- |
- |
- |
(61,905) |
- |
(61,905) |
Total comprehensive |
|
|
|
- |
|
|
|
loss for the period |
- |
- |
- |
8,923 |
(61,905) |
(151,523) |
(204,505) |
Share issue |
381,867 |
599,672 |
- |
- |
- |
- |
981,539 |
Share based payments expense |
- |
- |
12,155 |
- |
- |
- |
12,155 |
At |
3,677,997 |
5,655,781 |
33,893 |
42,753 |
49,439 |
(6,513,429) |
2,946,434 |
Loss for the period |
- |
- |
- |
- |
- |
(185,955) |
(185,955) |
Change in fair value |
- |
- |
- |
758 |
- |
- |
758 |
Exchange differences |
- |
- |
- |
- |
(127,182) |
- |
(127,182) |
Total comprehensive |
|
|
|
|
|
|
|
loss for the period |
- |
- |
- |
758 |
(127,182) |
(185,955) |
(312,379) |
Share issue |
17,863 |
11,216 |
- |
- |
- |
- |
29,079 |
Share based payments expense |
- |
- |
11,608 |
- |
- |
- |
11,608 |
Transfer of expired warrants |
- |
- |
(4,727) |
- |
- |
4,727 |
- |
At
|
3,695,860 |
5,666,997 |
40,774 |
43,511 |
(77,743) |
(6,694,657) |
2,674,742 |
Consolidated Statement of Cash Flows
for the six months to
|
Six months to 31 March 2021 Unaudited |
|
Six months to 31 March 2020 Unaudited
|
|
Twelve months to 30 September 2020 Audited |
|
£ |
|
£ |
|
£ |
Operating activity
|
|
|
|
|
|
Operating Loss |
(185,994) |
|
(151,549) |
|
(303,163) |
Depreciation/interest charge |
2,250 |
|
1,464 |
|
3,700 |
Share based payment charge |
11,608 |
|
6,776 |
|
18,932 |
Shares issued in settlement of outstanding salaries |
16,254 |
|
16,734 |
|
30,724 |
Shares issued in settlement of invoices |
- |
|
- |
|
17,550 |
Impairment of deferred exploration asset |
7,428 |
|
- |
|
- |
(Increase)/decrease in receivables |
(78,542) |
|
(12,816) |
|
1,761 |
Increase/(decrease) in trade and other payables |
3,046 |
|
7,848 |
|
17,690 |
|
|
|
|
|
|
Net cash outflow from operating activity |
(223,950) |
|
(131,543) |
|
(212,806) |
|
|
|
|
|
|
Investing activity |
|
|
|
|
|
|
|
|
|
|
|
Interest received |
39 |
|
171 |
|
261 |
Water lease payments |
(2,325) |
|
(12,931) |
|
(12,431) |
Project development expenditures |
(247,797) |
|
(93,669) |
|
(188,587) |
|
|
|
|
|
|
Net cash outflow from investing activity |
(250,083) |
|
(106,429) |
|
(200,757) |
|
|
|
|
|
|
Financing activity |
|
|
|
|
|
|
|
|
|
|
|
Issue of share capital (net of expenses) |
12,825 |
|
526,500 |
|
1,476,500 |
|
|
|
|
|
|
Net cash inflow from financing activity |
12,825 |
|
526,500 |
|
1,476,500 |
|
|
|
|
|
|
Net (decrease)/increase in cash and cash equivalents |
(461,208) |
|
288,528 |
|
1,062,937 |
|
|
|
|
|
|
Cash and cash equivalents at start of period |
1,089,417 |
|
27,069 |
|
27,069 |
Exchange differences |
9,625 |
|
2,984 |
|
(589) |
|
|
|
|
|
|
Cash and cash equivalents at end of period |
637,834 |
|
318,581 |
|
1,089,417
|
Notes to the Interim Statement
1. Basis of preparation
The consolidated interim financial information has been prepared in accordance with the accounting policies that are expected to be adopted in the Group's full financial statements for the year ending
The financial information in this statement relating to the six months ended
The directors prepare annual budgets and cash flow projections for a 15-month period. These projections include the proceeds of future fundraising necessary within the period to meet the Company's and Group's planned discretionary project expenditures and to maintain the Company and Group as a going concern. Although the Company has been successful in raising finance in the past, there is no assurance that it will obtain adequate finance in the future. These factors represent a material uncertainty related to events or conditions which may cast significant doubt on the entity's ability to continue as a going concern and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business. However, the directors have a reasonable expectation that they will secure additional funding when required to continue meeting corporate overheads and exploration costs for the foreseeable future and therefore believe that the going concern basis is appropriate for the preparation of the financial statements.
2. Loss per share
Loss per share has been calculated on the attributable loss for the period and the weighted average number of shares in issue during the period.
|
Six months to 31 March 2021 Unaudited
|
Six months to 31 March 2020 Unaudited
|
Twelve months to 30 September 2020 Audited
|
|
|
|
|
Loss for the period (£) |
(185,955) |
(151,378) |
(302,902) |
Weighted average shares in issue (No.) |
3,383,046,491 |
3,078,155,111 |
3,237,733,688 |
|
|
|
|
Basic and diluted loss per share (pence) |
(0.005) |
(0.005) |
(0.009) |
The loss attributable to ordinary shareholders and weighted average number of shares for the purpose of calculating the diluted earnings per share are identical to those used for the basic earnings per share. This is because the exercise of share warrants would have the effect of reducing the loss per share and is therefore not dilutive under the terms of IAS33.
3. Share capital
During the six months to
An issue of 6,772,459 0.1p Ordinary Shares at 0.24p per share to three directors, for a total consideration of
An issue of 9,090,909 0.1p Ordinary Shares at 0.11p per share for a total consideration of
An issue of 500,000 0.1p Ordinary Shares at 0.16p per share for a total consideration of
An issue of 750,000 0.1p Ordinary Shares at 0.16p per share for a total consideration of
An issue of 750,000 0.1p Ordinary Shares at 0.11p per share for a total consideration of
The total number of shares in issue on
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