TIDMSRES
RNS Number : 1886B
Sunrise Resources Plc
31 May 2023
31 May 2023
SUNRISE RESOURCES PLC
("Sunrise" or the "Company")
HALF-YEARLY REPORT 2023
Sunrise Resources plc, is pleased to announce its unaudited
interim results for the six months ended 31 March 2023, a copy of
which is also available on the Company's website,
www.sunriseresourcesplc.com.
Operational Highlights
CS Pozzolan-Perlite Project, Nevada
Ø Discussions continue with interested parties for the
development of the project.
Ø Interest in natural pozzolan accelerating in 2023 driven by
legislative pressures on the cement industry to decarbonise and a
growing acceptance that fly ash supplies in the US are not
sustainable.
Ø Cement Distribution Consultants commissioned to produce a
detailed market study on cement and pozzolans in California and
Nevada to provide the Company with additional market intelligence
and to identify additional partnership opportunities.
Ø Projections to 2030 indicate the combined market for cement
and pozzolans will grow from 12.6 million tons to 15.1 million tons
in the key California markets with growth to be met by increasing
production and inter-state imports of pozzolan including 2.4
million tons of natural pozzolan.
Ø CS Project is shovel ready; Company has a first mover
advantage.
Hazen Pozzolan Project, Nevada
Ø Collaborative arrangement with an existing processor of
natural pozzolan for mining and test grinding of a bulk sample of
the Company's Hazen natural pozzolan deposit in northern
Nevada.
Ø Test mining completed successfully, pozzolan is free
digging.
Ø Laboratory tests on bulk sample reported to be
satisfactory.
Ø Unusually severe winter storms have limited the availability
of silo space for the test grind which is still awaited.
Pioche Sepiolite Project, Nevada
Ø Project continues to be advanced by Tolsa, the world's largest
producer of sepiolite.
Ø Trenching programme confirmed multiple beds of sepiolite and
generated several mini-bulk samples, now under evaluation in
Spain.
Ø 31 additional mining claims staked to more than double the
size of the Pioche Project.
Ø Resource definition drilling scheduled for June 2023.
Ø Detailed site topographic survey in progress to better define
drill sites.
Ø Tolsa has made the US$50,000 interim payment, can purchase the
project for US$1.25m by 28 December 2023 and Sunrise will retain a
3% gross revenue royalty on all claims.
Reese Ridge Base Metal and Gold Project, Nevada
Ø New project located on the south side of the prospective
Humboldt Structural Zone.
Ø Numerous gossans and alteration zones at surface with grab
samples up to 15.8% zinc, 3.3% copper, 0.37g/t gold and 51g/t
silver in separate samples with multiple pathfinder elements,
including arsenic and thallium.
Ø Satellite imagery shows large alteration areas associated with
this mineralisation.
Ø Significant low resistivity target identified below the
surface mineralisation from past geothermal energy exploration
programme.
Ø Project prospective for a number of different styles of
mineralisation including carbonate replacement
lead-zinc-copper-silver and Carlin-style gold deposits.
Financial Results Summary
Group loss for the six months ended 31 March 2023 of GBP145,911
comprising:
-- Income includes GBP32,344 for granting option rights to
Tolsa, GBP4,043 from lease and GBP380 interest receivable.
-- Less administration costs of GBP180,426 and expensed
pre-licence exploration costs GBP2,252.
Project expenditure of GBP39,012 was capitalised.
Funding during the period
In November 2022, the Company issued a two-year zero-coupon
convertible security of GBP200,000 to Toward Net Zero LLC ("TNZ")
and in addition GBP80,000 (before expenses) was raised via a share
placing, both as part of a funding package of up to GBP480,000 with
TNZ.
Shares to the value of GBP20,116 were issued in January 2023 in
satisfaction of a portion of outstanding directors' fees.
On 31 March 2023, the Company held GBP180,896 in cash and cash
equivalents and listed investments with a current value of
GBP15,341.
The Company relies upon periodic capital fundraisings until such
time as cashflow can be derived either from the sale of assets or
future operations.
Further information:
Sunrise Resources plc Tel: +44 (0)1625 838 884
Patrick Cheetham, Executive
Chairman
Tel: +44 (0)207 628 3396
Beaumont Cornish Limited
Nominated Adviser
James Biddle/Roland Cornish
Tel: +44 (0)207 469 0930
Peterhouse Capital Limited
Broker
Lucy Williams/Duncan Vasey
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 which forms part of
UK domestic law by virtue of the European Union (Withdrawal) Act
2018 ('MAR'). Upon the publication of this announcement via
Regulatory Information Service ('RIS'), this inside information is
now considered to be in the public domain.
Chairman's Statement
I am pleased to present the Company's unaudited financial
results for the six months' period ended 31 March 2023.
In the period under review we have continued and extended our
efforts to secure the future development of our flagship CS
Pozzolan-Perlite project in Nevada, USA. Our experience, and that
of others in the pozzolan business, is that cement companies are
incredibly conservative and slow to act. However, the evidence from
the 2023 NPA Symposium, where attendance levels were up 300%, is
that 2023 may prove to be a pivotal year as the cement companies
react to the realities of climate change legislation. I encourage
shareholders to read the recent RNS Reach announcement in which
some key points from the NPA Symposium are discussed.
Portland cement is responsible for 8% of the global man-made
carbon dioxide emissions and Net-zero CO(2) targets are therefore a
major challenge for the cement and concrete industries. In the US,
these targets are enshrined in Federal and State legislation and
industry-body commitments and are increasingly driven by cement and
concrete customers and specifiers. One of the Implementation
Priorities in US President Biden's November 2021 Executive Order
"Implementation of the $1.2 trillion Infrastructure Investment and
Jobs Act" is "building infrastructure that is resilient and that
helps combat the crisis of climate change". The Inflation Reduction
Act of 2022 includes a $5.8 billion financial package for
decarbonisation of heavy industries like steel and cement.
California has the largest economy of all the US States and
southern California is a major target market for the CS Project. In
September 2021 California's Carbon Cap-and-Trade scheme was signed
into legislation and directly targets greenhouse gas emissions
associated with the cement industry. These legislative changes are
driving strong interest in natural pozzolan which can replace up to
30% of Portland cement in cement and concrete mixes and be a major
contributor to net-zero strategies.
The CS Project is shovel ready. We are in a favourable position
to take advantage of these projections and the increasing interest
in natural pozzolan. This interest is coming not just from the
cement companies, but also from the established fly ash
distributers who see the writing on the wall for fly ash and the
opportunities both for the production of fly ash/pozzolan mixes to
extend remaining fly ash supplies, and the rise of blended cements
with a substantially reduced carbon footprint.
Our focus in the reporting period at the CS Project has been on
the markets for pozzolan rather than perlite as this is the larger
business opportunity, having the better potential to attract
external funding, and recognising that our perlite deposits can
also be utilised as natural pozzolan.
Our Hazen Pozzolan Project is a much earlier stage project, but
has a favourable location close to rail and the cement markets of
northern California. This has attracted the attention of an
existing producer of natural pozzolan already serving this market
and we have agreed a collaborative programme to test mine and grind
a bulk sample of Hazen pozzolan. The mining exercise completed
successfully, demonstrated that the Hazen pozzolan is free digging
and so cheap to mine and we await the results of the test grind
which has been delayed by a particularly difficult winter which has
prevented silo space from becoming available.
In order to provide additional market intelligence and identify
additional partnership opportunities we have commissioned a
detailed, granular, study of the markets for cements and pozzolans
in California and Nevada with independent Cement Distribution
Consultants ("CDC"). CDC has also provided us with its projections
on the US and individual State markets to 2030. This assumes that
ordinary Portland cement production will remain steady whilst
increasing demand for cement and concrete will be met by blended
cements using natural and other pozzolans. These projections
identify a US wide shortfall by 2030 of 18.8 million tons of
pozzolan, 2.7 million tons in California alone. In California this
shortfall is predicted to be met by increased consumption of
natural pozzolan from other states.
Our partner on the Pioche Sepiolite Project, our third key
project, is Tolsa, the world's largest producer of sepiolite. Tolsa
continues to make progress with testwork ongoing in Spain on bulk
samples extracted during last years' trenching programme. Planning
is also well underway for drill testing this summer of the
extensive sepiolite beds now known to exist as Tolsa moves towards
its decision to purchase the Pioche project by year end. This has
potential to provide a significant injection of funds into the
Company and, moreover, we will retain a gross revenue royalty which
has potential to provide a significant cash flow in future
years.
We were pleased to see Golden Metal Resources plc ("GMR") make
its recent IPO debut on AIM. We hold royalty interests on two of
the four projects held by GMR in Nevada and we look forward to
their further exploration of these projects. Cash flow from
royalties commands a higher valuation than cash flow from equity
participation as royalty cash flow is risk free and unrelated to
profitability.
In the longer term we see the potential to build up a valuable
portfolio of mining royalties from the sale of other projects held
by the Company. We continue to add to our project interests where
opportunities are presented at low cost, and in the reporting
period we staked claims at the Reese Ridge Project where we have
found high values of base metals in gossans at surface and where
there is a compelling target for drill testing.
The Company's projects were recently reviewed and valued by our
broker, Peterhouse, in a recently published research note which
highlights a substantial undervaluation of the Company by the
market. It also identifies a number of triggers for further value
appreciation. This research note can be accessed via our
website.
I would like to thank shareholders for their patient support,
and we look forward to bringing you further news from our key
projects this summer.
Patrick Cheetham
Executive Chairman
31 May 2023
Consolidated Income Statement
for the six months to 31 March 2023
Six months Six months Twelve months
to 31 March to 31 March to
2023 2022 30 September
Unaudited Unaudited 2022
Audited
GBP GBP GBP
------------------------------------ -------------- -------------- ----------------
Pre-licence exploration costs (2,252) (4,133) (5,638)
Impairment of deferred exploration
assets - - (194,247)
Administration costs (180,426) (160,623) (291,860)
Other income 36,387 11,422 13,474
------------------------------------ -------------- -------------- ----------------
Operating loss (146,291) (153,334) (478,271)
Interest receivable 380 11 48
Loss before income tax (145,911) (153,323) (478,223)
Income tax - - -
Loss for the period attributable
to equity
holders of the parent (145,911) (153,323) (478,233)
==================================== ============== ============== ================
Loss per share - basic and fully
diluted (pence) (Note 2) (0.004) (0.004) (0.013)
==================================== ============== ============== ================
Consolidated Statement of Comprehensive Income
for the six months to 31 March 2023
Six months Six months Twelve months
to 31 March to 31 March to 30 September
2023 2022 2022
Unaudited Unaudited Audited
GBP GBP GBP
-------------------------------------- -------------- -------------- ------------------
Loss for the period (145,911) (153,323) (478,223)
-------------------------------------- -------------- -------------- ------------------
Other comprehensive income:
Items that could be reclassified
subsequently to the income
statement:
Foreign exchange translation
differences on foreign currency
net investments in subsidiaries (246,823) 61,117 441,434
Items that will not be reclassified
to the Income Statement:
Changes in the fair value
of equity investments (3,119) (14,282) (22,962)
(249,942) (14,282) 418,472
Total comprehensive loss for
the period attributable to
equity holders of the parent (395,853) (106,488) (59,751)
====================================== ============== ============== ==================
Consolidated Statement of Financial Position
as at 31 March 2023
As at As at As at
31 March 31 March 30 September
2023 2022 2022
Unaudited Unaudited Audited
GBP GBP GBP
-------------------------------- ------------ ------------ ---------------
Non-current assets
Intangible assets 2,292,959 2,228,941 2,503,812
Right of use assets 7,749 11,603 11,147
Other investments 15,341 49,553 20,075
2,316,049 2,290,097 2,535,034
-------------------------------- ------------ ------------ ---------------
Current assets
Receivables 151,325 147,358 167,425
Cash and cash equivalents 180,896 183,923 96,126
-------------------------------- ------------ ------------ ---------------
332,221 331,281 263,551
Current liabilities
Trade and other payables (54,930) (103,178) (104,936)
Lease liability (2,587) (1,171) (2,839)
--------------------------------
Net current assets 274,704 226,932 155,776
-------------------------------- ------------ ------------ ---------------
Non-Current liabilities
Lease liability - (3,632) (2,874)
Share subscription loan (200,000)
Provisions for liabilities and
charges (29,129) (24,458) (32,079)
-------------------------------- ------------ ------------ ---------------
(229,129) (28,090) (34,953)
-------------------------------- ------------ ------------ ---------------
Net assets 2,361,624 2,488,939 2,655,857
================================ ============ ============ ===============
Equity
Called up share capital 3,933,675 3,711,086 3,833,559
Share premium account 5,680,316 5,683,695 5,680,316
Share warrant reserve 39,136 39,015 40,101
Fair value reserve 7,021 18,820 10,140
Foreign currency reserve 157,280 23,786 404,103
Accumulated losses (7,455,804) (6,987,463) (7,312,362)
-------------------------------- ------------ ------------ ---------------
Equity attributable to owners
of the parent 2,361,624 2,488,939 2,655,857
================================ ============ ============ ===============
Consolidated Statement of Changes in Equity
Share Share Fair Foreign
Share premium warrant value currency Accumulated
capital account reserve reserve reserve losses Total
GBP GBP GBP GBP GBP GBP GBP
----------------------------- ---------- ---------- ---------- ---------- ----------- -------------- ----------
At 30 September 2021 3,701,805 5,675,616 40,164 33,102 (37,331) (6,835,289) 2,578,067
----------------------------- ---------- ---------- ---------- ---------- ----------- -------------- ----------
Loss for the period - - - - - (153,323) (153,323)
Change in fair value - - - (14,282) - - (14,282)
Exchange differences - - - - 61,117 - 61,117
----------------------------- ---------- ---------- ---------- ---------- ----------- -------------- ----------
Total comprehensive
loss for the period - - - (14,282) 61,117 (153,323) (106,488)
----------------------------- ---------- ---------- ---------- ---------- ----------- -------------- ----------
Share issue 9,281 8,079 - - - - 17,360
Share based payments expense - - - - - - -
Transfer of expired warrants - - (1,150) - - 1,150 -
----------------------------- ---------- ---------- ---------- ---------- ----------- -------------- ----------
At 31 March 2022 3,711,086 5,683,695 39,014 18,820 23,786 (6,987,462) 2,488,939
----------------------------- ---------- ---------- ---------- ---------- ----------- -------------- ----------
Loss for the period - - - - - (324,900) (324,900)
Change in fair value - - - (8,680) - - (8,680)
Exchange differences - - - - 380,317 - 380,317
----------------------------- ---------- ---------- ---------- ---------- ----------- -------------- ----------
Total comprehensive -
loss for the period - - - (8,680) 380,317 (324,900) 46,737
----------------------------- ---------- ---------- ---------- ---------- ----------- -------------- ----------
Share issue 122,473 (3,379) - - - - 119,094
Share based payments expense - - 1,087 - - - 1,087
Transfer of expired warrants - - - - - - -
At 30 September 2022 3,833,559 5,680,316 40,101 10,140 404,103 (7,312,362) 2,655,857
----------------------------- ---------- ---------- ---------- ---------- ----------- -------------- ----------
Loss for the period - - - - - (145,911) (145,911)
Change in fair value - - - (3,119) - - (3,119)
Exchange differences - - - - (246,823) - (246,823)
----------------------------- ---------- ---------- ---------- ---------- ----------- -------------- ----------
Total comprehensive
loss for the period - - - (3,119) (246,823) (145,911) (395,853)
----------------------------- ---------- ---------- ---------- ---------- ----------- -------------- ----------
Share issue 100,116 - - - - - 100,116
Share based payments expense - - 1,504 - - - 1,504
Transfer of expired warrants - - (2,469) - - 2,469 -
----------------------------- ---------- ---------- ---------- ---------- ----------- -------------- ----------
At 31 March 2023 3,933,675 5,680,316 39,136 7,021 157,280 (7,455,804) 2,361,624
----------------------------- ---------- ---------- ---------- ---------- ----------- -------------- ----------
Consolidated Statement of Cash Flows
for the six months to 31 March 2023
Six months Six months Twelve months
to 31 March to 31 March to 30 September
2023 2022 2022
Unaudited Unaudited Audited
GBP GBP GBP
---------------------------------------------- ------------- ------------- -----------------
Operating activity
Operating Loss (146,291) (153,323) (478,271)
Depreciation/interest charge 2,286 2,285 5,595
Share based payment charge 1,504 - 1,087
Shares issued in lieu of net wages 20,116 16,685 31,279
Shares issued via exercise of warrants - 675 -
Impairment of deferred exploration
asset - - 194,247
Reclamation provision - (2,950) -
(Increase)/decrease in receivables 16,098 (16,553) (36,620)
Increase/(decrease) in trade and other
payables (50,007) 2,317 4,075
Net cash outflow from operating activity (156,294) (150,864) (278,608)
---------------------------------------------- ------------- ------------- -----------------
Investing activity
Interest received 380 11 48
Receipts from disposal of equity investments - - 23,263
Project development expenditures (39,012) (37,145) (137,490)
Net cash outflow from investing activity (38,632) (39,571) (114,179)
---------------------------------------------- ------------- ------------- -----------------
Financing activity
Issue of share capital (net of expenses) 80,000 - 104,500
Issue of shares via exercise of warrants - 675 675
Share subscription loan 200,000
Lease payments (2,587) (2,437) (2,874)
Net cash inflow from financing activity 277,413 1,762 102,301
---------------------------------------------- ------------- ------------- -----------------
Net increase/(decrease) in cash and
cash equivalents 82,487 (189,760) (290,486)
Cash and cash equivalents at start
of period 96,126 371,740 371,740
Exchange differences 2,283 1,943 14,872
Cash and cash equivalents at end
of period 180,896 183,923 96,126
============================================== ============= ============= =================
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 2023 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 2022. These
are based on the recognition and measurement requirements of
applicable law and UK adopted International Accounting Standards.
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 2023 and the six months ended 31 March 2022
has neither been audited nor reviewed by the Independent Auditor
pursuant to guidance issued by the Auditing Practices Board. The
financial information presented for the year ended 30 September
2022 does not constitute the full statutory accounts for that
period. The Annual Report and Financial Statements for the year
ended 30 September 2022 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 2022 was
unqualified, although it 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 the Group's planned discretionary project
expenditures and to maintain the Company and the 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 Six months Twelve months
to 31 March to 31 March to 30 September
2023 2022 2022
Unaudited Unaudited Audited
---------------------------- ---------------- ---------------- ------------------
Loss for the period (GBP) (145,911) (153,323) (478,223)
Weighted average shares
in issue (No.) 3,894,814,406 3,705,826,898 3,734,454,207
Basic and diluted loss per
share (pence) (0.004) (0.004) (0.013)
============================ ================ ================ ==================
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 2023 the following share
issues took place:
An issue of 80,000,000 Ordinary Shares of 0.1p at 0.1p per share
for a total consideration of GBP80,000, as part of a share placing
with Toward Net Zero LLC (30 November 2022).
An issue of 20,116,000 Ordinary Shares of 0.1p at 0.1p per share
to three directors, for a total consideration of GBP20,116, in
satisfaction of a portion of outstanding directors' fees (17
January 2023).
The total number of Ordinary Shares in issue on 31 March 2023
was 3,933,675,087 (30 September 2022: 3,833,559,087).
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