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Tectonic Gold Plc - Half-year Report

·14-min read

31 March 2021

TECTONIC GOLD PLC
(“Tectonic Gold” or the “Company”)

Unaudited Interim Results to 31 December 2020

MANAGING DIRECTOR’S STATEMENT

Dear Shareholder,

During the half year to December 2020, the Company focused on the development of its Australian gold portfolio. This followed a successful sell down of the South African diamond and heavy minerals project in June 2020 and the re-opening of the Queensland state borders after COVID-19 related lockdowns.

£402,800 was raised in early September 2020 to conduct a follow-up drilling program to extend copper and gold discoveries at the Specimen Hill project and to put a small initial drill sampling program into the Mount Cassidy project. Assays from the drilling confirmed success with copper and gold mineralisation intersected in every hole, proving once again the Company’s Intrusive Related Gold System exploration methodology.

Mapping at Specimen Hill has identified a copper and gold deposit with world class potential having a strike of over four kilometres. Widely spaced drilling over an initial 800m showed continuity of the mineralisation mapped at surface down to 100m depth. Gold grades ranged from 2g/t Au to over 15g/t gold and copper grades up to +1% Cu were returned.

On the back of this successful start to the program, warrants issued alongside the September 2020 capital raise were called. This had an excellent response from warrant holders who committed to exercise over 70 million 0.7p warrants generating more than £500,000 in additional capital for the campaign.

The focus of the program is to both infill and extend the initial 800m length of strike that has been drill tested, with a particular focus on the “Southern Copper” discovery. Deeper drilling has now been planned, to enlarge the tested envelope, which remains open at depth below the current drill testing. Drill density will also be revisited to ensure robust inputs for resource modelling. Independent experts and one of Australia’s leading geological consulting groups, Geos Mining, was retained to provide initiall modelling input.

At the time of writing, the Company has a large batch of drill samples from Specimen Hill being assayed. These have already been through pre-screening, which produced over 500 samples testing positive for copper. This is of particular importance as we prepare to revisit discussions with some of our neighbours such as Rio Tinto, Newcrest and others that have become increasingly active in our neighbourhood after COVID-19 made it difficult to work their international portfolios, especially in South America and South East Asia which are traditional copper and gold mining areas.

It should be noted that our diamond and heavy minerals joint venture partner, AIM listed Kazera Global PLC, has brought the South African diamond project into profitable operation and recently announced successful project financing of their own. Their share price is up over 200% from our entry price and our non-diluting 10% holding in the diamond project is performing well.

The last half has been very rewarding, with Tectonic’s share price rebounding to the Specimen HIll progress and recently trading up over 900% since the September capital raise. During a trading window earlier in the month I was finally allowed to purchase additional shares for my own account and support the register alongside the efforts of our warrant holders. It always gives me encouragement to announce that none of our directors or officers have ever sold a share and we remain fully committed to the ongoing success of our Company alongside all our shareholders.

RESULTS AND COMPARITIVE INFORMATION

The Group incurred a loss after tax for the reporting period of £60,084 (31 Dec 2019: £23,569 (profit).

For and on behalf of the Board.
Brett Boynton, CFA
Managing Director


CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 31 DECEMBER 2020

NOTE

6 MONTHS TO 31 DEC 2020
UNAUDITED

6 MONTHS TO 31 DEC 2019 UNAUDITED

12 MONTHS TO 30 JUNE 2020 AUDITED

GBP

GBP

GBP

Revenue from continuing operations

-

47,513

294,866

Expenses from continuing operations:

Accounting and audit fees

(15,388)

(12,629)

(59,715)

Administration and office costs

(6,377)

(9,656)

(10,496)

Corporate costs

(33,999)

(33,564)

(71,492)

Amortisation and depreciation

(788)

(882)

(1,515)

Employee benefits, management fees and on costs

(500)

(22,824)

5,682

Exploration and tenement costs

(4,034)

(25,922)

(10,231)

Insurance

(11,133)

-

(2,429)

Share based payments

(139,462)

-

-

Business Development costs

-

(9,257)

(9,257)

Net fair value gain on financial assets at fair value through profit and loss

129,667

-

77,750

Other expenses

21,929

(61,373)

(5,578)

Profit/ (loss) from continuing operations before income tax

(60,084)

(128,594)

207,585

Income tax benefit

-

152,163

149,097

Profit/ (loss) for the reporting period from continuing operations

(60,084)

23,569

356,682

Discontinued operations

(Loss) for the year from discontinued operations

-

-

(73,934)

Profit/ (loss) for the reporting period attributable to the owners of the Company

(60,084)

23,569

282,748

Other comprehensive income:

Items that may be subsequently reclassified to profit and loss:

Exchange differences on translation of foreign subsidiaries

16,433

(46,344)

17,416

Total comprehensive profit/(loss)/ for the reporting period

(43,651)

22,775

300,162

Earnings per share attributable to owners of the company

Basic and diluted (pence per share)

From continuing operations

4

0.007

0.003

0.04

The accompanying notes form part of these financial statements.



CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2020

31 DEC 2020

31 DEC 2019

30-JUN-20

GROUP UNAUDITED

GROUP UNAUDITED

GROUP AUDITED

NOTE

GBP

GBP

GBP

ASSETS

NON-CURRENT ASSETS

Plant and equipment

4,335

5,504

5,075

Exploration and evaluation expenditure

2,921,388

2,604,751

2,695,681

Financial assets at fair value through profit and loss

454,074

-

224,407

TOTAL NON-CURRENT ASSETS

3,379,797

2,610,255

2,925,163

CURRENT ASSETS

Cash and cash equivalents

192,709

130,224

52,734

Trade and other receivables

21,265

105

1,865

Other assets

5

362,374

339,485

357,792

TOTAL CURRENT ASSETS

576,348

469,814

412,391

TOTAL ASSETS

3,956,145

3,080,069

3,337,554

EQUITY

Share capital

6,115,444

6,100,615

6,100,615

Warrant reserves

60,497,749

60,146,216

60,146,216

RTO Reserve

(57,976,182)

(57,976,182)

(57,976,182)

Warrant Reserves

260,925

95,098

95,098

Foreign exchange translation reserves

(58,832)

(139,025)

(75,265)

Accumulated losses

(5,540,694)

(5,739,788)

(5,480,609)

TOTAL EQUITY

3,298,410

2,486,934

2,809,873

LIABILITIES

NON-CURRENT LIABILITIES

Trade and other payables

16,263

15,358

16,060

Borrowings

172,387

228,664

226,908

TOTAL NON-CURRENT LIABILITIES

188,650

244,022

242,968


CURRENT LIABILITIES

Trade and other payables

312,399

249,113

284,712

Borrowings

156,685

100,000

-

TOTAL CURRENT LIABILITIES

469,085

349,113

284,712

TOTAL LIABILITIES

657,735

593,135

527,882

TOTAL EQUITY AND LIABILITIES

3,956,145

3,080,069

3,337,554

The accompanying notes form part of these financial statements.

These financial statements were approved by the Board of Directors on 31 March 2021.

Signed on behalf of the Board by:
Brett Boynton
Managing Director Company number: 05173250



CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 31 DECEMBER 2020

GROUP - UNAUDITED
31 DEC 2020

ISSUED
CAPITAL

SHARE
PREMIUM

WARRANT
RESERVE

RTO
RESERVE

FOREIGN
CURRENCY
RESERVE

ACCUMULATED LOSSES

TOTAL

GBP

GBP

GBP

GBP

GBP

GBP

GBP

Balance at 1 July 2019

6,100,615

60,146,216

95,098

(57,976,182)

(75,265)

(5,480,609)

2,809,873

Total comprehensive loss for the period

(60,084)

(60,084)

Transactions with owners, recorded directly in equity:

Foreign Currency Translation Reserve

-

-

-

-

16,433

16,433

Shares Issued

14,829

400,698

-

-

-

-

415,527

Share issue costs

-

(49,165)

-

-

-

-

(49,165)

Warrants issued

-

-

165,827

-

-

-

165,827

Balance as at 31 December 2020

6,115,444

60,497,749

260,925

(57,976,182)

(58,832)

(5,540,694)

3,298,410


GROUP - UNAUDITED
31 DEC 2019

ISSUED
CAPITAL

SHARE
PREMIUM

WARRANT
RESERVE

RTO
RESERVE

FOREIGN
CURRENCY
RESERVE

ACCUMULATED LOSSES

TOTAL

GBP

GBP

GBP

GBP

GBP

GBP

GBP

Balance at 1 July 2019

6,100,615

60,146,216

95,098

(57,976,182)

(92,681)

(5,763,357)

2,509,709

Total comprehensive loss for the period

23,569

23,569

Transactions with owners, recorded directly in equity:

Foreign Currency Translation Reserve

-

-

-

-

(46,344)

-

(46,344)

Balance as at 31 December 2019

6,100,615

60,146,216

95,098

(57,976,182)

(139,025)

(5,739,788)

2,486,934

GROUP - AUDITED
FOR THE YEAR ENDED 30 JUNE 2020

ISSUED
CAPITAL

SHARE
PREMIUM

WARRANT
RESERVE

RTO
RESERVE

FOREIGN
CURRENCY
RESERVE

ACCUMULATED LOSSES

TOTAL

GBP

GBP

GBP

GBP

GBP

GBP

GBP

Balance at 1 July 2019

6,100,615

60,146,216

95,098

(57,976,182)

(92,681)

(5,763,357)

2,509,709

Total comprehensive income for the period

282,748

282,748

Transactions with owners, recorded directly in equity:

Foreign Currency Translation Reserve

-

-

-

-

17,416

-

17,416

Balance as at 30 June 2020

6,100,615

60,146,216

95,098

(57,976,182)

(75,265)

(5,480,609)

2,809,873

The accompanying notes form part of these financial statements


CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2020

6 MONTHS TO
31 DEC 2020 UNAUDITED

6 MONTHS TO
31 DEC 2019 UNAUDITED

12 MONTHS TO 30 JUNE 2020 AUDITED

GBP

GBP

GBP

CASH FLOWS FROM OPERATING ACTIVITIES

Cash receipts in the course of operations

-

-

20,136

Cash payments in the course of operations

(141,122)

(131,029)

(242,654)

Research and Development Tax Incentive Claim

-

152,163

149,097

Interest received

-

761

5,541

Net cash used in operating activities

(141,122)

21,895

(67,880)

CASH FLOWS USED IN INVESTING ACTIVITIES

Payments for exploration and evaluation expenditure

(113,470)

(63,341)

(58,777)

Proceeds from new owner of Deep Blue Minerals Pty Ltd

-

-

56

Payment for security deposit

-

(272)

(266)

Proceeds from refund of security deposits

-

2,720

2,665

Proceeds from sale of investments

-

86,844

86,844

Net cash used in investing activities

(113,470)

25,951

30,522

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from issue of shares

402,800

-

-

Proceeds from exercise of options

12,727

-

-

Payments for share issue costs

(22,800)

-

-

Loan to Tectonic SA

-

-

(10,830)

Proceeds from borrowings

-

50,000

66,048

Net cash provided by financing activities

392,727

50,000

55,218

Net (decrease)/increase in cash held and cash equivalents

138,135

97,846

17,858

Cash and cash equivalents at the beginning of the period

52,734

34,875

34,875

Effects of exchange rate changes on cash and cash equivalents

1,840

(2,497)

-

Cash and cash equivalents at the end of the period

192,709

130,224

52,734

The accompanying notes form part of these financial statements.



NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2020

1. GENERAL INFORMATION

Tectonic Gold Plc is a company incorporated in the United Kingdom under the Companies Act 2006. The consolidated entity (the “Group”) consists of Tectonic Gold Plc (the “Company”) and the entities it controlled at the end of, or during, the six months ended 31 December 2020. The principal activity of the Group during the financial period was mineral exploration.

2. BASIS OF PREPARATION

These condensed interim consolidated financial statements (“the interim financial statements”) of the Group are for the six months ended 31 December 2020 and are presented in Sterling which is the Company’s presentational currency. These interim financial statements have not been reviewed or audited.

The interim financial statements have been prepared in accordance with the recognition and measurement principles of IFRS as adopted by the European Union (EU) and on the same basis and using the same accounting policies as applied in the Company’s 2019 Annual Report and statutory accounts for the year ended 30 June 2020.

The statutory accounts for the year ended 30 June 2020 have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

The interim financial statements have been prepared on a going concern basis under the historical cost convention. The Directors believe that the going concern basis is appropriate for the preparation of these interim financial statements as the Company is in a position to meet all its liabilities as they fall due.

The interim financial statements for the six months ended 31 December 2020 were approved by the Board on 31 March 2020.

3. DIVIDEND

The Board is not recommending the payment of an interim dividend for the period ended 31 December 2020.

4. EARNINGS PER SHARE

The basic earnings per share is based on the profit/(loss) for the year divided by the weighted average number of shares in issue during the reporting period. The weighted average number of ordinary shares for the reporting period assumes that all shares have been included in the computation based on the weighted average number of days since issue.

6 MONTHS TO
31 DEC 2020 UNAUDITED

6 MONTHS TO
31 DEC 2019
UNAUDITED

12 MONTHS TO
30 JUNE 2020 AUDITED

GBP

GBP

GBP

Profit/(Loss) for the year attributable to owners of the Company

(60,084)

23,569

282,748

Weighted average number of ordinary shares in issue for basic earnings*

788,632,702

656,562,746

697,562,746

Weighted average number of ordinary shares in issue for fully diluted earnings*

788,632,702

710,562,746

710,562,746

(Loss)/gain per share (pence per share)

Basic

(0.007)

0.003

0.04

Diluted

(0.007)

0.003

0.04

5. OTHER ASSETS

31 DEC 2019 UNAUDITED

31 DEC 2019 UNAUDITED

30 JUNE 2020 AUDITED

GBP

GBP

GBP

Prepayments(i)

353,780

333,956

349,341

Other prepayments

5,200

2,325

5,100

Security deposits

3,394

3,204

3,351

362,734

339,485

357,792

(i) In 2018 the Company paid Titeline Drilling Pty Ltd ACN 096 640 201 (Titeline) for future drilling services in accordance with the heads of agreement dated 28 March 2018 between Titeline, Signature Gold and Tectonic Gold.

(ii) Titeline has been engaged to complete 10,000 meters of diamond drilling to produce core samples for analysis, assay and metallogenic studies from the Company’s Biloela Project site. A review to be completed after 2,500 metres of drilling has been completed and the completion program for the remaining 7,500 metres to be mutually agreed.

As at 31 December 2020, GBP353,780 or A$625,386 (31 Dec 2019: GBP333,956 or $A625,386) remains prepaid to Titeline

As at 30 June 2020, the balance of the prepayment to Titeline is GBP 349,341 (A$625,386).

6. EVENTS AFTER THE REPORTING PERIOD

In January 2021, the Company continued to generate successful results from the drilling program at the Specimen Hill and Mt Cassidy projects and on 5 March 2021 formally called on holders of warrants issued on 9 September 2020 to exercise those warrants within the allowed 30-day period from the call. As of 31 March 2021, 26,654,502 warrants were exercised to purchase shares at 0.7p per share and funds totalling £186,581.51 were received. Commitments to exercise a further 69,090,908 warrants have been received with funding of a further £483,636.36 expected prior to the 5 April 2021.

Other than as stated elsewhere in this report, Directors are not aware of any other matters or circumstances at the date of this report that have significantly affected or may significantly affect the operations, the results of the operations or the state of affairs of the Company in subsequent financial years.

7. DISTRIBUTION

Copies of these interim financial statements is available on the Company's website (www.tectonicgold.com) or directly from the Company at its registered address.

For further information, please contact:

Tectonic Gold plc
Brett Boynton
Sam Quinn
www.tectonicgold.com
@tectonic_gold

+61 2 9241 7665

Aquis Stock Exchange Corporate Adviser and Broker
VSA Capital Limited
Andrew Raca – Corporate Finance
Andrew Monk – Corporate Broking

+44 20 3005 5004

Ends