Sunrise Resources PLC (LON:SRES)

Sunrise Resources PLC (LON:SRES)


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Sunrise Resources PLC RNS Release

Half-year Report


RNS Number : 6060A
Sunrise Resources Plc
30 May 2019
 
 
30 May 2019
SUNRISE RESOURCES PLC

(the "Company")

 

HALF-YEARLY REPORT

 

Sunrise Resources plc, the AIM-traded company focusing on the development of its CS Pozzolan-Perlite Project in Nevada, USA, announces its unaudited interim results for the six months ended 31 March 2019. A copy of the interim results will be available from the Company's website,

 

Operational Highlights

 

CS Pozzolan-Perlite Project, Nevada, USA

 

Permitting:

 

·      Plan of Operations and Reclamation Permit Application for production of pozzolan and perlite submitted to US Bureau of Land Management and Nevada State regulators.

 

·      Emissions Inventory completed for the Federal Environmental Assessment and State Air Quality Permit application.

 

·      Targeting completion of permitting in the 4th quarter of 2019.

 

Pozzolan:

 

·      Continuing closure of coal-fired power stations is increasing market opportunities for natural pozzolan as a coal fly ash replacement in concrete. Closure of the Navajo Generating Station in Arizona will remove 500,000 tons/year of fly ash from the western US market by year end.

 

·      Separate concrete tests by two major cement companies confirm CS Natural Pozzolan performs favourably with established pozzolan and fly ash sources.

 

·      18-ton pozzolan sample sent to custom milling facility to provide information on grinding characteristics and to provide larger ground samples for additional customer trials.

 

Perlite:

 

·      Latest testwork shows promise for production of premium-value super-coarse horticultural grades of perlite.

 

·      100-ton sample of perlite extracted for further processing and customer testing.

 

·      7-ton perlite sample submitted for crushing and screening for purpose of designing an appropriate mobile plant design for production of horticultural grade perlite.

 

 

NewPerl Project, Nevada, USA

 

·      Expandability testing continues to show that the majority of samples tested are suitable for production of horticultural grade perlite, including premium priced super-coarse grades.

 

·      Notice level permit application approved for drilling and bulk sampling.

 

·      Project being evaluated as "satellite" project for the CS Project for production of premium grades of horticultural perlite.

 

Junction Copper-Silver-Gold Project, Nevada, USA (Shareholding in VR & Royalty Interest)

·      VR Resources Ltd ("VR") advised the drill discovery of a Cretaceous-age porphyry copper mineralised system and that it will advance exploration in 2019 on the Denio Summit target.

 

 

 

 

County Line Diatomite Project, Nevada, USA

 

·      Approach from potential diatomite customer - Samples collected and submitted for manufacturing tests.

 

Results Summary

 

 

Group loss for the six-month period of £157,139 (six months to 31 March 2018: £174,517) comprising:

 

·      Interest income of £150; less

·      Administration costs of £155,241;

·      Expensed exploration costs totalling £2,281; and

·      Gain in value of accrued income on disposal of exploration asset of £233.

 

Funding during the period

 

·      On 6 November 2018, 7,650,968 new ordinary shares were issued at a price of 0.155p to the three directors in settlement of a portion of outstanding directors' fees totalling £11,564.

 

·      On 8 January 2019, a total of £350,000 (before expenses) was raised through the issue of 291,666,666 new ordinary shares by way of a placing at a price of 0.12p.

 

 

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

 

 

Further information

 

Sunrise Resources plc

Patrick Cheetham, Executive Chairman

Tel: +44 (0)1625 838 884

 

Beaumont Cornish Limited

Nominated Adviser

James Biddle/Roland Cornish

Tel: +44 (0)207 628 3396

 

SVS Securities Plc

Broker

Tom Curran/Ben Tadd

Tel: +44 (0)203 700 0093

 



 

Chairman's Statement

 

It has been a busy few months since my last report to shareholders in the 2018 Annual Report and, after several months of hard work by our small project team, we recently announced the submission of our combined CS Project Mine Plan of Operations/Nevada Reclamation Permit Application ("Plan of Operations") to US Bureau of Land Management and Nevada State Regulators.

 

The Plan of Operations sets out in detail how the mine will be developed for production of natural pozzolan and perlite over time and how the mine will be reclaimed over its lifetime and on closure.  It is a key document in triggering the Environmental Assessment which we aim to have completed during the last quarter of this year.

 

The market for our natural pozzolan is as a replacement for pozzolanic coal-fired power station fly ash in cement and concrete mixes. Coal-fired powers stations in the US and around the world are closing at a rapid pace as coal is not cost competitive with natural gas or, increasingly, renewables and is not seen as compatible with a low carbon future. The fly ash supply situation in the western US will be heavily impacted by the closure this year of the Navajo Generating Station in Arizona which will take 500,000 tons/year of fly ash from the western US market that traditionally uses 2 million tons/year. By substituting high quality natural pozzolan for Portland cement in concrete the mix is greener, stronger and less susceptible to cracking.

 

The Company also continues to advance its concept for low-cost production of horticultural grade perlite at the CS Project using mobile processing plant. A 7-ton sample was sent to equipment manufacturers for trial processing and refinement of the process flow sheet. In addition, a 100-ton bulk sample was recently taken for further customer testing. Testwork on perlite samples from the CS and NewPerl Projects to produce super-coarse grades of horticultural perlite have been encouraging.

 

Whilst we remain firmly focused on developing the CS Project in 2019, we now have enough confidence in the quality of the perlite on the NewPerl claims to consider this as a future "satellite" feed to the CS Project and in particular for premium grades of perlite. The Company has recently received regulatory approval for a programme of drilling and bulk sampling at NewPerl which will allow the Company to move to commercial testing at an earlier stage than was possible at the CS Project.

 

Elsewhere in Nevada I was encouraged to see VR Resources recently reported the discovery of a major copper porphyry system on the Junction Project which includes the Denio target where we hold a royalty interest. We hold shares in VR Resources and in Block Energy where we have seen a sharp increase in the value of our holding since the half-year end after Block Energy reported exciting developments for its Georgian oil interests. At our County Line Diatomite Project in Nevada there has been renewed interest from a potential customer that is now testing samples.

 

These developments serve as a reminder of the value not only in the CS and NewPerl Projects but also our non-core projects as we continue our efforts to turn these to account.  In anticipation of a busy second half of the financial year we look forward to reporting further progress as we develop the CS Project toward production.

 

I would like to thank shareholders for their support.

 

 

Patrick Cheetham

Executive Chairman

30 May 2019

 

 

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.



 

Consolidated Income Statement

for the six months to 31 March 2019

 

 

 

Six months

to 31 March

2019

Unaudited

 

Six months

to 31 March

2018

Unaudited

 

 

Twelve months to

30 September

2018

Audited

 

£

£

£

 

 

 

 

Pre-licence exploration costs

2,281

5,786

10,473

 

 

 

 

Impairment of deferred exploration asset

-

17,433

483,169

 

 

 

 

Administration costs

155,241

150,760

290,023

 

 

 

 

 

Operating loss

(157,522)

(173,979)

(783,665)

 

 

 

 

(Loss)/gain on disposal of intangible asset

233

(593)

(3,112)

 

 

 

 

Interest receivable

150

55

105

 

 

 

 

 

 

 

 

Loss before income tax

(157,139)

(174,517)

(786,672)

 

 

 

 

Income tax

 

-

-

-

 

 

 

 

Loss for the period attributable to equity

holders of the parent

 

(157,139)

 

(174,517)

 

(786,672)

 

 

 

 

 

Loss per share - basic and fully diluted (pence) (Note 2)

(0.006)

(0.009)

(0.04)

 

 

 



 

Consolidated Statement of Comprehensive Income

for the six months to 31 March 2019

 

 

 

 

 

 

Six months

to 31 March

2019

Unaudited

 

Six months

to 31 March

2018

Unaudited

 

 

Twelve months

to 30 September

2018

Audited

 

£

£

£

 

 

 

 

Loss for the period

(157,139)

(174,517)

(786,672)

 

 

 

 

Other comprehensive income:

 

 

 

 

 

 

 

Items that could be reclassified subsequently to the income statement:

 

 

 

 

 

 

 

Foreign exchange translation differences on foreign currency net investments in subsidiaries

 

(1,234)

 

(77,165)

 

11,657

 

 

 

 

Fair value movement on available for sale investment

 

-

 

(586)

 

(11,007)

 

 

 

 

 

(1,234)

(77,751)

650

 
Items that will not be reclassified to the Income Statement:



 

 
Changes in the fair value of equity investments

 

1,821

 

-

 

-

 



 

 

1,821

-

-

 
Total comprehensive loss for the period attributable to equity holders of the parent

 

 

(156,552)

 

 

(252,268)

 

 

(786,022)

 

 
 
 


 

Consolidated Statement of Financial Position

as at 31 March 2019

 

 

 

As at

31 March

2019

Unaudited


 

As at

31 March

2018

Unaudited

 


 

As at

30 September

2018

Audited

 

£

 

£

 

£

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

Intangible assets

1,513,066

 

1,456,639

 

1,363,360

Available for sale investment

-

 

29,539

 

19,697

Financial assets at fair value through other comprehensive income

27,105

 

-

 

-

 

 

 

 

 

 

 

1,540,171

 

1,486,178

 

1,383,057

 

 

 

 

 

 

Current assets

 

 

 

 

 

Receivables

57,110

 

55,926

 

76,220

Cash and cash equivalents

234,509

 

320,712

 

235,722

 

 

 

 

 

 

 

291,619

 

376,638

 

311,942

 

 

 

 

 

 

Current liabilities

Trade and other payables

 

(57,419)

 

 

(123,949)

 

 

(106,346)

 

 

 

 

 

 

Net current assets

234,200

 

252,689

 

205,596

 

 

 

 

 

 

Net assets

1,774,371

 

1,738,867

 

1,588,653

 

 

 

 

 

 

Equity

 

 

 

 

 

Called up share capital

2,736,228

 

2,144,151

 

2,436,910

Share premium account

5,058,567

 

4,926,718

 

5,016,526

Share warrant reserve

23,239

 

67,230

 

68,204

Fair value reserve

1,609

 

10,209

 

(212)

Foreign currency reserve

30,172

 

(57,416)

 

31,406

Accumulated losses

(6,075,444)

 

(5,352,025)

 

(5,964,181)

 

 

 

 

 

 

Equity attributable to owners of the parent

1,774,371

 

1,738,867

 

1,588,653

 

 

 

 

 

 

 

 

 

 

 


Consolidated Statement of Changes in Equity

 

 

 

 

Share

capital

 

Share

premium

account

 

Share

warrant reserve

 

Fair

value

reserve

 

Foreign

currency

reserve

 

 

 Accumulated

losses

 

 

 

Total

 

£

£

£

£

£

£

£

At 30 September 2017

1,804,016

4,792,790

89,248

10,795

19,749

(5,200,294)

1,516,304

Loss for the period

-

-

-

-

-

(174,517)

(174,517)

Change in fair value

-

-

-

(586)

-

-

(586)

Exchange differences

-

-

-

-

(77,165)

-

(77,165)

Total comprehensive

 

 

 

 

 

 

 

loss for the period

-

-

-

(586)

(77,165)

(174,517)

(252,268)

Share issue

340,135

133,928

-

-

-

-

474,063

Share based payments expense

-

-

768

-

-

-

768

Transfer of expired warrants

-

-

(22,786)

-

-

22,786

-

At 31 March 2018

2,144,151

4,926,718

67,230

10,209

(57,416)

(5,352,025)

1,738,867

Loss for the period

-

-

-

-

-

(612,156)

(612,156)

Change in fair value

-

-

-

(10,421)

-

-

(10,421)

Exchange differences

-

-

-

-

88,822

-

88,822

Total comprehensive

 

 

 

-

 

 

 

loss for the period

-

-

-

(10,421)

88,822

(612,156)

(533,755)

Share issue

292,759

89,808

-

-

-

-

382,567

Share based payments expense

-

-

974

-

-

-

974

At 30 September 2018

2,436,910

5,016,526

68,204

(212)

31,406

(5,964,181)

1,588,653

Loss for the period

-

-

-

-

-

(157,139)

(157,139)

Change in fair value

-

-

-

1,821

-

-

1,821

Exchange differences

-

-

-

-

(1,234)

-

(1,234)

Total comprehensive

 

 

 

 

 

 

 

loss for the period

-

-

-

1,821

(1,234)

(157,139)

(156,552)

Share issue

299,318

42,041

-

-

-

-

341,359

Share based payments expense

-

-

911

-

-

-

911

Transfer of expired warrants

-

-

(45,876)

-

-

45,876

-

At 31 March 2019

2,736,228

5,058,567

23,239

1,609

30,172

(6,075,444)

1,774,371


Consolidated Statement of Cash Flows

for the six months to 31 March 2019

 


Six months

to 31 March

2019

Unaudited


Six months

to 31 March

2018

Unaudited

 


Twelve months

to 30 September

2018

Audited

 

£

 

£

 

£

Operating activity

 

 

 

 

 

 

Operating Loss

(157,522)

 

(173,979)

 

(783,665)

Share based payment charge

911

 

768

 

1,741

Shares issued in settlement of outstanding wages

11,859

 

11,564

 

22,131

Impairment charge - deferred exploration asset

-

 

17,433

 

483,169

Increase/(decrease) in accrued income

(5,353)

 

(939)

 

(2,501)

(Increase)/decrease in receivables

19,110

 

6,216

 

(14,078)

Increase/(decrease) in trade and other payables

(48,927)

 

11,048

 

(6,555)

 

 

 

 

 

 

Net cash outflow from operating activity

(179,922)

 

(127,889)

 

(299,758)

 

 

 

 

 

 

Investing activity

 

 

 

 

 

 

 

 

 

 

 

Interest received

150

 

55

 

                105

Disposal of development asset

-

 

-

 

(390)

Development expenditures

(150,596)

 

(238,658)

 

(550,132)

 

 

 

 

 

 

Net cash outflow from investing activity

(150,446)

 

(238,603)

 

(550,417)

 

 

 

 

 

 

Financing activity

 

 

 

 

 

 

 

 

 

 

 

Issue of share capital (net of expenses)

329,500

 

462,500

 

834,500

 

 

 

 

 

 

Net cash inflow from financing activity

329,500

 

462,500

 

834,500

 

 

 

 

 

 

Net increase/(decrease) in cash and cash equivalents

(868)

 

96,008

 

(15,675)

 

 

 

 

 

 

Cash and cash equivalents at start of period

  235,722

 

  234,181

 

234,181

Exchange differences

(345)


(9,477)

 

17,216

 


 

 

 

 

 

Cash and cash equivalents at end of period

 

 234,509

 

 

320,712

 

 

235,722

 

 



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 30 September 2019 which are not expected to be significantly different to those set out in Note 1 of the Group's audited financial statements for the year ended 30 September 2018. These are based on the recognition and measurement principles of IFRS in issue as adopted by the European Union (EU) or that are expected to be adopted and effective at 30 September 2019. The implementation of new standards and interpretations has not led to any changes in the Group's accounting policies (other than presentation and disclosure) or had any other material impact on its financial position. The financial information has not been prepared (and is not required to be prepared) in accordance with IAS 34. The accounting policies have been applied consistently throughout the Group for the purposes of preparation of this financial information.

 

The financial information in this statement relating to the six months ended 31 March 2019 and the six months ended 31 March 2018 has neither been audited nor reviewed by the Auditors pursuant to guidance issued by the Auditing Practices Board. The financial information presented for the year ended 30 September 2018 does not constitute the full statutory accounts for that period. The Annual Report and Financial Statements for the year ended 30 September 2018 have been filed with the Registrar of Companies. The Independent Auditor's Report on the Annual Report and Financial Statements for the year ended 30 September 2018 was unqualified, although did draw attention to matters by way of emphasis in relation to going concern.

 

          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. This represents 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

2019

Unaudited

 

 

Six months

to 31 March

2018

Unaudited

 

 

Twelve months

to 30 September

2018

Audited

 

 


 

 

Loss for the period (£)

(157,139)

(174,517)

(786,672)

 

Weighted average shares in issue (No.)

 

2,574,415,872

 

2,020,282,088

 

2,136,387,359

 

 

 

 

Basic and diluted loss per share (pence)

(0.006)

(0.009)

(0.04)

 

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 31 March 2019 the following share issues took place:

 

An issue of 7,650,968 0.1p Ordinary Shares at 0.155p per share to three directors, for a total consideration of £11,859, in satisfaction of a portion of outstanding directors' fees (6 November 2018).

 

An issue of 291,666,666 0.1p Ordinary Shares at 0.12p per share, by way of placing, for a total consideration of £350,000 before expenses (8 January 2019).

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
 
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