TIDMGRX
RNS Number : 5430H
GreenX Metals Limited
28 July 2023
GREENX METALS LIMITED
NEWS RELEASE 28 JULY 2023
Quarterly Activities Report June 2023
Highlights from and subsequent to the quarter
-- In July 2023, GreenX entered into an Option Agreement with
Greenfields Exploration Limited to acquire up to 100% of the
Eleanore North gold project (Eleanore North) in eastern
Greenland.
o Eleonore North has the potential to host a "reduced
intrusion-related gold system" (RIRGS), analogous to large
bulk-tonnage deposit types found in Canada.
o Option to earn 100% of the Project vests upon GreenX spending
A$600,000 on exploration on the Project within 12 months and can be
exercised in return for a 1.5% Net Smelter Royalty plus A$250,000
payable in cash and A$250,000 payable in either cash or GreenX
shares at GreenX's election.
o Transaction provides GreenX with gold exposure in Greenland
and complements GreenX's existing exploration prospect in
Greenland, the Arctic Rift Copper project (ARC).
-- In November 2022, the hearing for the Claim against the
Republic of Poland under both the Energy Charter Treaty and the
Australia-Poland Bilateral Investment Treaty was concluded.
o Combined arbitration hearing took place in front of the
Tribunal in London under the UNCITRAL Arbitration Rules
o Damages of up to GBP737 million (A$1.3 billion / PLN4.0
billion) have been claimed including the assessed value of GreenX's
lost profits and damages related to both the Jan Karski and
Debiensko projects, and accrued interest related to any damages
-- Subsequent to the quarter, GreenX completed a Placing to
issue 5.2 million new ordinary shares to raise gross proceeds of
approximately A$4.2 million (GBP2.1 million) from new and existing
investors (Placing). The next proceeds from the Placing will be
used for exploration activities at the Company's projects in
Greenland.
-- Cash balance as at 30 June 2023 and prior to the Placing was A$8.7 million.
Classification: 3.1 Additional regulated information required to
be disclosed under the laws of a Member State
GreenX Metals Limited (ASX:GRX, LSE:GRX) (GreenX or the Company)
is pleased to present its Quarterly Activities Report for the
period during and subsequent to 30 June 2023.
eleanore north gold project option acquisition
In July 2023, GreenX entered into an Option Agreement
(Agreement) with Greenfields Exploration Limited to acquire up to
100% of the Eleanore North gold project in eastern Greenland.
Eleonore North has the potential to host a "reduced
intrusion-related gold system" (RIRGS), analogous to large
bulk-tonnage deposit types found in Canada including Donlin Creek,
Fort Knox and Dublin Gulch.
Gold mineralisation documented at the high-priority Noa Pluton
prospect within Eleonore North.
-- Geophysical "bullseye" anomaly 6 km wide co-incident with
elevated gold mineralisation from historical geochemical
sampling.
-- Anomalous gold mineralisation associated with quartz veining
exposed at surface over a length of up to 15 km.
-- Historical sampling includes 4 m chip sample grading 1.93 g/t
Au and 1.9% Sb (refer to Appendix 1 of the Company's announcement
on 10(th) July 2023).
Eleonore North has potential to host large scale, shallow, bulk
tonnage gold deposits. The Project remains underexplored, with the
existence of a possible RIRGS being a relatively new geological
interpretation based on the historical data. Initial field work
consists of a seismic survey to determine the depth from surface to
the Noa Pluton to aid in drill targeting.
Eleonore North license area contains other gold targets as well
as copper, antimony and tungsten prospects. At Holmesø there is
copper and antimony mineralisation outcropping at surface.
Historical mapping and sampling in the 1970s at Holmesø show a
prospective horizon between 15 m and 20 m thick, with per cent
level grades for both metals.
Option to earn 100% of the Project vests upon GreenX spending
A$600,000 on exploration on the Project within 12 months and can be
exercised in return for a 1.5% Net Smelter Royalty plus A$250,000
payable in cash and A$250,000 payable in either cash or GreenX
shares at GreenX's election.
Transaction provides GreenX with gold exposure in Greenland and
complements GreenX's existing exploration prospect in Greenland,
the Arctic Rift Copper project (ARC). There are significant
synergies with regards to personnel, logistics and equipment in
having multiple exploration projects in Greenland. Field works for
the 2023 have already commenced at Eleonore North, with follow-on
exploration field activities for the ARC project currently being
planned.
Greenland is a mining friendly jurisdiction with strong
Government support for expanding its mining industry, simple laws
and regulations, and a competitive fiscal regime.
The primary target in Eleonore North is the Noa Pluton, followed
by the Holmesø prospect and its source intrusion. The Noa Veins
provide a near-term drill target, however, the Company plans to
determine the depth of the intrusion with greater precision using a
passive seismic survey. This information will validate the magnetic
interpretation, provide more certainty for a future drilling
program, and help identify the size of the intrusion within the
well-defined hornfels.
ARCTIC RIFT COPPER PROJECT
The Arctic Rift Copper Project (ARC) is an exploration joint
venture between GreenX and Greenfields Exploration Ltd
(Greenfields). GreenX can earn 80% of ARC by spending A$10 million
by October 2026. ARC is targeting large scale copper in multiple
settings across a 5,774 km(2) Special Exploration Licence in
eastern North Greenland. The area has been historically
underexplored yet is prospective for copper, forming part of the
newly identified Kiffaanngissuseq metallogenic province.
The results of work program announced last year have
demonstrated the high-grade nature of the known copper sulphide
mineralisation and wider copper mineralization in fault hosted
Black Earth zones and adjacent sandstone units. The exact position
of a native copper fissure at the Neergaard Dal prospect was also
identified.
Analysis of this information is underway and will be key to
future planned work programs.
DISPUTE WITH POLISH GOVERNMENT
In November 2022, the Company reported the conclusion of the
Claim against the Republic of Poland under both the Energy Charter
Treaty (ECT) and the Australia-Poland Bilateral Investment Treaty
(BIT) (together the Treaties). The hearing took place in London in
and lasted two weeks.
Following completion of the hearing, the Tribunal will render an
Award (i.e., the legal term used for a 'decision' by the Tribunal)
in due course with no specified date available for the Tribunal
decision.
As previously advised, the arbitration and hearing proceedings
in relation to the Claim are required to be kept confidential.
Details of the Claim
The Company's Claim against the Republic of Poland is being
prosecuted through an established and enforceable legal framework,
with GreenX and Poland agreeing to apply the United Nations
Commission on International Trade Law Rules (UNCITRAL) rules to the
proceedings. The arbitration claims are being administered through
the Permanent Court of Arbitration in the Hague.
The evidentiary hearing phase of the arbitration proceedings has
now been completed in front of the Arbitral Tribunal. With
completion of the hearing, the Arbitral Tribunal will render an
Award in due course. There is no specified date for an Award to be
rendered. The Company's claims for damages against Poland are in
the amount of up to GBP737 million (A$1.3 billion/PLN4.0 billion),
which includes a revised assessment of the value of GreenX's lost
profits and damages related to both the Jan Karski and Debiensko
projects, and accrued interest related to any damages. The Claim
for damages has been assessed by independent external quantum
experts appointed by GreenX specifically for the purposes of the
Claim.
In July 2020, the Company announced it had executed the LFA for
US$12.3 million with LCM. US$10.4 million of the facility has been
drawn down to cover legal, tribunal and external expert costs as
well as defined operating expenses associated with the Claim. The
Company does not anticipate further material drawdowns now that
funded costs relating to the claims have been dispersed. The LFA is
a limited recourse loan with LCM that is on a "no win - no fee"
basis.
In September 2020, GreenX announced that it had formally
commenced with the Claim by serving the Notices of Arbitration
against the Republic of Poland. In June 2021, GreenX announced that
it had formally lodged its Statement of Claim in the BIT
arbitration, including the first assessed claim for compensation.
The Company's Statement of Reply, the last material filing to be
made by the Company for the BIT arbitration proceedings, was
submitted in July 2021. The Statement of Reply addresses various
points raised by the Republic of Poland in their Statement of
Defence. The Statement of Reply also contains a re-evaluation of
the claim for damages based on responses to Poland's Statement of
Defence.
GreenX's dispute alleges that the Republic of Poland has
breached its obligations under the applicable Treaties through its
actions to block the development of the Company's Jan Karski and
Debiensko projects in Poland which effectively deprived GreenX of
the entire value of its investments in Poland.
In February 2019, GreenX formally notified the Polish Government
that there exists an investment dispute between GreenX and the
Polish Government. GreenX's notification called for prompt
negotiations with the Government to amicably resolve the dispute
and indicated GreenX's right to submit the dispute to international
arbitration in the event of the dispute not being resolved
amicably.
GreenX's investment dispute with the Republic of Poland is not
unique, with international media widely reporting that the
political environment and investment climate in Poland has
deteriorated since the change in Government in 2015. As a result,
there are a significant number of International Arbitration claims
being bought against Poland.
ShARE PLACING
In July 2023, the Company announced that it had successfully
completed a bookbuild and secured commitments for 5.2 million new
ordinary shares at a price of A$0.80 (41 pence) per share for gross
proceeds of approximately A$4.2 million (GBP2.1 million) from new
and existing investors.
Together with the Company's existing cash resources (A$8.7
million as at 30 June 2023), the proceeds of the Placing will help
ensure that GreenX retains a strong balance sheet position.
The net proceeds from the Placing will be used for exploration
activities at the company's projects in Greenland.
CORPORATE
Financial Position
Prior to the successful completion of the Placing, GreenX had
cash of A$8.7 million as at 30 June 2023.
-S-
Forward Looking Statements
This release may include forward-looking statements. These
forward-looking statements are based on GreenX's expectations and
beliefs concerning future events. Forward looking statements are
necessarily subject to risks, uncertainties and other factors, many
of which are outside the control of GreenX, which could cause
actual results to differ materially from such statements. GreenX
makes no undertaking to subsequently update or revise the
forward-looking statements made in this release, to reflect the
circumstances or events after the date of that release.
This announcement has been authorised for release by the
Company's Chief Executive Officer, Mr Ben Stoikovich.
To view this announcement in full, including all illustrations
and figures, please refer to www.greenxmetals.com .
APPIX 1: TENEMENT INFORMATION
As at 30 June 2023, the Company has an interest in the following
tenements:
Location Tenement Percentage Status Tenement Type
Interest
------------- ------------------------ ----------- -------------- ---------------------
Greenland Arctic Rift Copper -(1) Granted Exploration Licence
Project (Licence
No. 2021-07 MEL-S)
Jan Karski, Jan Karski Mine -(2) In dispute(2) Exclusive Right
Poland Plan Area (K-4-5, to apply for
K6-7, K-8 and K-9)(2) a mining concession
Debiensko, Mining
Poland Debiensko 1 -(2) In dispute(2)
Mining & Exploration
Debiensko, (includes gas
Poland Kaczyce 1 -(3) -(3) rights)
------------- ------------------------ ----------- -------------- ---------------------
Notes:
(1) In October 2021, the Company announced that it had entered
into an Earn-In Agreement (EIA) with Greenfields to acquire an
interest of up to 80% in ARC. As at the date of this announcement,
the Company held no beneficial interest in ARC, other than through
the EIA.
(2) GreenX formally commenced international arbitration claims
against the Republic of Poland under both the ECT and the BIT in
2021. GreenX alleges that the Republic of Poland has breached its
obligations under the Treaties through its actions to block the
development of the Company's Jan Karski and Debiensko projects in
Poland. Refer to discussion of the Claim above. During the quarter,
the Company received notice from the relevant Polish authority that
the Debiensko licence has been extinguished.
(3) During the quarter, the Company completed the sale of the
Kaczyce 1 licence infrastructure to a third party following the
expiry of the licence.
Appendix 2: Related Party Payments
During the quarter ended 30 June 2023, the Company made payments
of A$249,000 to related parties and their associates. These
payments relate to existing remuneration arrangements (director
fees, consulting fees and superannuation (A$177,000)) and the
provision of a serviced office and company secretarial and
administration services (A$72,000).
Appendix 3: Exploration and Mining Expenditure
During the quarter ended 30 June 2023, the Company made the
following payments in relation to exploration activities:
Activity $000
--------------------------------------------------- -----
Greenland (ARC)
Project Management 163
Other (field supplies, equipment, fuel, satellite
imagery, etc) 2
--------------------------------------------------- -----
Greenland sub-total as reported in the Appendix
5B (item 2.1(d)) 165
Poland
Legal and permitting related expenditure 83
Consultants - technical and Debiensko statutory
operations personnel 111
Other (including VAT returned) 11
Poland sub-total as reported in the Appendix
5B (item 1.2(a)) 205
--------------------------------------------------- -----
Total 370
=================================================== =====
There were no mining or production activities and expenses
incurred during the quarter ended 30 June 2023.
Appendix 5B
Mining exploration entity or oil and gas exploration entity
quarterly cash flow report
Name of entity
-----------------------------------------------------
GreenX Metals Limited
ABN Quarter ended ("current quarter")
--------------- ----------------------------------
23 008 677 852 30 June 2023
----------------------------------
Consolidated statement of cash Current quarter Year to date
flows
$A'000 (12 months)
$A'000
1. Cash flows from operating
activities
1.1 Receipts from customers - -
1.2 Payments for
(a) exploration & evaluation (205)* (1,007)*
(b) development - -
(c) production - -
(d) staff costs (279) (756)
(e) administration and corporate
costs (14) (333)
1.3 Dividends received (see note - -
3)
1.4 Interest received 87 131
1.5 Interest and other costs of - -
finance paid
1.6 Income taxes paid - -
1.7 Government grants and tax - -
incentives
Other (provide details if
1.8 material)
(a) Business Development (100) (309)
(b) Property rental and gas
sales - 164
(c) Arbitration related expenses - (1,722)
(d) Receipt of arbitration
funding - 2,007
(e) Occupancy (319) (935)
---------------- --------------
Net cash from / (used in)
1.9 operating activities (830) (2,760)
----------------- ----------------------------------- ---------------- --------------
*includes legal and permitting expenditure and payments made
to consultants (Debiensko technical statutory operations personnel).
----------------------------------------------------------------------------------------
2. Cash flows from investing
activities
2.1 Payments to acquire or for:
(a) Entities - -
(b) Tenements - -
(c) property, plant and equipment (9) (9)
(d) exploration & evaluation (165) (2,251)
(e) investments - -
(f) other non-current assets - -
2.2 Proceeds from the disposal
of:
(a) entities - -
(b) tenements - -
(c) property, plant and equipment - -
(d) investments - -
(e) other non-current assets - -
2.3 Cash flows from loans to other - -
entities
2.4 Dividends received (see note - -
3)
2.5 Other (provide details if
material) - -
---------------- --------------
Net cash from / (used in)
2.6 investing activities (174) (2,260)
----------------- ----------------------------------- ---------------- --------------
3. Cash flows from financing
activities
Proceeds from issues of equity
securities (excluding convertible
3.1 debt securities) - 7,730
3.2 Proceeds from issue of convertible
debt securities - -
3.3 Proceeds from exercise of - -
options
Transaction costs related
to issues of equity securities
3.4 or convertible debt securities (69) (222)
3.5 Proceeds from borrowings - -
3.6 Repayment of borrowings - -
3.7 Transaction costs related
to loans and borrowings - -
3.8 Dividends paid - -
3.9 Other (provide details if - -
material)
---------------- --------------
Net cash from / (used in)
3.10 financing activities (69) 7,508
----------------- ----------------------------------- ---------------- --------------
4. Net increase / (decrease)
in cash and cash equivalents
for the period
Cash and cash equivalents
4.1 at beginning of period 9,725 6,108
Net cash from / (used in)
operating activities (item
4.2 1.9 above) (830) (2,760)
Net cash from / (used in)
investing activities (item
4.3 2.6 above) (174) (2,260)
Net cash from / (used in)
financing activities (item
4.4 3.10 above) (69) 7,508
Effect of movement in exchange
4.5 rates on cash held 22 78
---------------- --------------
Cash and cash equivalents
4.6 at end of period 8,674 8,674
----------------- ----------------------------------- ---------------- --------------
5. Reconciliation of cash and Current quarter Previous quarter
cash equivalents $A'000 $A'000
at the end of the quarter
(as shown in the consolidated
statement of cash flows) to
the related items in the accounts
5.1 Bank balances 4,174 5,225
5.2 Call deposits 4,500 4,500
5.3 Bank overdrafts - -
5.4 Other (provide details) - -
---------------- -----------------
Cash and cash equivalents
at end of quarter (should
5.5 equal item 4.6 above) 8,674 9,725
----------------- ----------------------------------- ---------------- -----------------
6. Payments to related parties of the entity Current quarter
and their associates $A'000
Aggregate amount of payments to related
parties and their associates included in
6.1 item 1 (249)
----------------
6.2 Aggregate amount of payments to related
parties and their associates included in
item 2 -
----------------
Note: if any amounts are shown in items 6.1 or 6.2, your quarterly
activity report must include a description of, and an explanation
for, such payments.
7. Financing facilities Total facility
Note: the term "facility' amount at quarter Amount drawn
includes all forms of financing end at quarter end
arrangements available to $A'000 $A'000
the entity. Add notes as necessary
for an understanding of the
sources of finance available
to the entity.
7.1 Loan facilities 18,520* 15,711
------------------- ----------------
7.2 Credit standby arrangements - -
------------------- ----------------
7.3 Other (please specify) - -
------------------- ----------------
7.4 Total financing facilities 18,520* 15,711
------------------- ----------------
Unused financing facilities available at
7.5 quarter end 2,809
----------------
7.6 Include in the box below a description of each facility
above, including the lender, interest rate, maturity date
and whether it is secured or unsecured. If any additional
financing facilities have been entered into or are proposed
to be entered into after quarter end, include a note providing
details of those facilities as well.
----------------- ---------------------------------------------------------------------------
On 30 June 2020, the Company executed a Litigation Funding
Agreement (LFA) for US$12.3 million (*now worth A$18.5
million with the movement of the A$ compared to the $US)
with LCM Funding UK Limited a subsidiary of Litigation
Capital Management Limited (LCM), to pursue damages claims
in relation to the investment dispute between GreenX and
the Polish Government that has arisen out of certain measures
taken by Poland in breach of the Energy Charter Treaty
and the Australia - Poland Bilateral Investment Treaty
(BIT). LCM will provide up to US$12.3million (A$18.5
million), denominated in US$, in limited recourse financing
which is repayable to LCM in the event of a successful
Claim or settlement of the Dispute that results in the
recovery of any monies. If there is no settlement or award,
then LCM is not entitled to any repayment of the financing
facility. In return for providing the financing facility,
LCM shall be entitled to receive repayment of any funds
drawn plus an amount equal to between two and five times
the total of any funds drawn from the funding facility
during the first five years, depending on the time frame
over which funds have remained drawn, and then a 30% interest
rate after the fifth year until receipt of damages payments.
-----------------
8. Estimated cash available for future operating $A'000
activities
Net cash from / (used in) operating activities
8.1 (item 1.9) (830)
8.2 (Payments for exploration & evaluation classified
as investing activities) (item 2.1(d)) (165)
8.3 Total relevant outgoings (item 8.1 + item (995)
8.2)
8.4 Cash and cash equivalents at quarter end 8,674
(item 4.6)
8.5 Unused finance facilities available at quarter 2,809
end (item 7.5)
-------
8.6 Total available funding (item 8.4 + item 11,483
8.5)
-------
8.7 Estimated quarters of funding available
(item 8.6 divided by item 8.3) >10
-------
Note: if the entity has reported positive relevant outgoings
(ie a net cash inflow) in item 8.3, answer item 8.7 as
"N/A". Otherwise, a figure for the estimated quarters
of funding available must be included in item 8.7.
8.8 If item 8.7 is less than 2 quarters, please provide answers
to the following questions:
8.8.1 Does the entity expect that it will continue to
have the current level of net operating cash flows for
the time being and, if not, why not?
---------------------------------------------------------------------------------------
Answer: Not applicable
---------------------------------------------------------------------------------------
8.8.2 Has the entity taken any steps, or does it propose
to take any steps, to raise further cash to fund its operations
and, if so, what are those steps and how likely does it
believe that they will be successful?
---------------------------------------------------------------------------------------
Answer: Not applicable
---------------------------------------------------------------------------------------
8.8.3 Does the entity expect to be able to continue its
operations and to meet its business objectives and, if
so, on what basis?
---------------------------------------------------------------------------------------
Answer: Not applicable
---------------------------------------------------------------------------------------
Note: where item 8.7 is less than 2 quarters, all of
questions 8.8.1, 8.8.2 and 8.8.3 above must be answered.
---------------------------------------------------------------------------------------
Compliance statement
1 This statement has been prepared in accordance with accounting
standards and policies which comply with Listing Rule 19.11A.
2 This statement gives a true and fair view of the matters disclosed.
Date: 28 July 2023
Authorised by: Company Secretary
(Name of body or officer authorising release - see note 4)
Notes
1. This quarterly cash flow report and the accompanying activity
report provide a basis for informing the market about the entity's
activities for the past quarter, how they have been financed and
the effect this has had on its cash position. An entity that wishes
to disclose additional information over and above the minimum
required under the Listing Rules is encouraged to do so.
2. If this quarterly cash flow report has been prepared in
accordance with Australian Accounting Standards, the definitions
in, and provisions of, AASB 6: Exploration for and Evaluation of
Mineral Resources and AASB 107: Statement of Cash Flows apply to
this report. If this quarterly cash flow report has been prepared
in accordance with other accounting standards agreed by ASX
pursuant to Listing Rule 19.11A, the corresponding equivalent
standards apply to this report.
3. Dividends received may be classified either as cash flows
from operating activities or cash flows from investing activities,
depending on the accounting policy of the entity.
4. If this report has been authorised for release to the market
by your board of directors, you can insert here: "By the board". If
it has been authorised for release to the market by a committee of
your board of directors, you can insert here: "By the [name of
board committee - eg Audit and Risk Committee]". If it has been
authorised for release to the market by a disclosure committee, you
can insert here: "By the Disclosure Committee".
5. If this report has been authorised for release to the market
by your board of directors and you wish to hold yourself out as
complying with recommendation 4.2 of the ASX Corporate Governance
Council's Corporate Governance Principles and Recommendations, the
board should have received a declaration from its CEO and CFO that,
in their opinion, the financial records of the entity have been
properly maintained, that this report complies with the appropriate
accounting standards and gives a true and fair view of the cash
flows of the entity, and that their opinion has been formed on the
basis of a sound system of risk management and internal control
which is operating effectively.
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