Alba Mineral Resources plc (AIM: ALBA) is pleased to announce its Final Results for the year ended 30 November 2021.
OVERVIEW
Multiple projects advanced in the UK and Ireland
· Clogau-St David’s Gold Mine
· Circa 3,500 metres drilling undertaken from surface and underground since 2018, just under half of which was done during 2021
· Drilling resulted in identification of high-priority development targets, including discovery of Upper Lode in Llechfraith Payshoot and New Branch Lode in Main Lode System
· Ongoing discussions with Natural Resources Wales to dewater Llechfraith Shaft
· Waste tip returned elevated gold grades of up to 9.89 g/t from initial sampling programme in June 2021 and up to 11.35 g/t from bulk sample taken post year end
· Estimated up to 4,000 tonnes of fine material could be available for processing from waste tip
· Dolgellau Gold Exploration Project
· Granted additional exclusive mineral exploration licence for a further six years
· Refined existing regional geological model into six primary gold targets for follow-up investigation
· Identified new high-grade regional gold target, Hafod Owen, with grab samples grading up to 24 g/t
· Limerick Base Metals Project
· Identified three principal exploration target areas for follow-up exploration activities, with exploration drilling planned to commence H2 2022
· Gwynfynydd Gold Mine
· Undertook work comprising digitisation of a mine plan and 3D modelling, stream sediment sampling, and data compilation
Investee companies making excellent progress
· GreenRoc Mining plc (“GreenRoc”) (Alba: 54% interest), which is developing critical mineral projects in Greenland:
· Amitsoq Graphite Project –
o Maiden Resource declared at Amitsoq Island Deposit of 8.28 Mt at an average grade of 19.75%, giving a total graphite content of 1.63Mt.
o Exploration Target increased to a tonnage range of 5-15 Mt at a grade range of 18-22% Graphitic Carbon – to be tested by further exploration drilling in 2022
· Thule Black Sands Ilmenite Project –
o Phase 2 drilling completed in 2021, with significant upgrade in existing Mineral Resource expected
o Key EIA/SIA contractors appointed, which will ultimately provide basis for Mining Licence application
· Horse Hill Oil Field (Alba: 11.765% interest) – UK based producing oil field
· Environment Agency (“EA”) granted full Production Permit (“PP”) to the Operator, enabling production and water re-injection operations and drilling of further development wells. Operator can now proceed with conversion of Horse Hill-2z well into water injector 2022, which would remove the need for costly transportation and disposal of produced saline formation water.
Spin-out of Greenland assets to create value for Alba
· Admission of GreenRoc to AIM in Q3 2021, raising over £5 million (before costs) and Alba disposing of its four Greenland projects to GreenRoc for £6 million in shares, against a book value of £2.7 million, such that Alba now owns 54% majority stake in GreenRoc
· Spin-out has created a Greenland-focused vehicle with the sole purpose of fast-tracking GreenRoc’s advanced graphite and ilmenite projects through development and production
Focus on securing additional complementary assets
· Continuing to evaluate potential new projects to strengthen portfolio
CHAIRMAN’S STATEMENT
Our overall objective is to unearth hidden value from previously drilled or mined projects and to this end we are advancing multiple projects in the UK and Ireland including the Clogau-St David’s Gold Mine, the Gwynfynydd Gold Mine, the Dolgellau Gold Exploration Project, and the Limerick Base Metals Project. Additionally, we hold significant stakes in two investee companies: GreenRoc Mining plc (‘GreenRoc’), a Greenland-dedicated listed vehicle, which we spun out during the year to fast-track the development of its advanced graphite and ilmenite projects; and Horse Hill Developments Ltd (‘Horse Hill’), a UK based oil producer.
Much of our energy has been focused on our most advanced asset, the Clogau-St David’s Gold Mine, where we hope to commence commercial processing/production in the near future and take advantage of the strong gold price. Notably, Welsh gold fetches a premium over normal gold spot price, placing us in a strong position to pursue commercialisation opportunities such as entering into a JV/offtake with a luxury international brand or producing gold coins/bars for investment.
Since mid-2018, we have undertaken circa 3,500 metres drilling from surface and underground at Clogau, just under half of which was done during 2021, resulting in the identification of several high-priority development targets. New discoveries include the Upper Lode in the Llechfraith Payshoot and the New Branch Lode in the Main Lode System. As shareholders will be aware, Natural Resources Wales (‘NRW’) turned down our permit application to dewater the Llechfraith Shaft, but we remain hopeful of resolving the outstanding issues and proceeding with the dewatering so that we can access the Llechfraith Payshoot.
Notwithstanding this setback, having acquired and installed an operating pilot processing plant in late 2020, we have used the plant this year to process material from Clogau’s historic waste tip this coming year. The waste tip returned elevated gold grades of up to 9.89 g/t from an initial sampling programme in mid-June 2021, and gold grades of up to 11.35 g/t from a second programme post period end. Given the fine nature of the material that has the potential to filter downwards, we are exploring options to take a second bulk sample from the lower reaches of the waste tip that could further strengthen the project’s economic viability in tandem with developing a mining plan. Current estimations of the higher-grade portion of the dump indicate an in-situ tonnage of approximately 11,000 tonnes, of which up to 4,000 tonnes of fine material (<20mm) could be available for processing for gold.
We also made advances at our exploration licence which hosts the Gwynfynyndd Gold Mine located north of Clogau, as well as other exciting regional gold prospects, with work comprising digitisation of a mine plan and 3D modelling, stream sediment sampling, and data compilation including regional geophysics from the 1970s. We are now laying the groundwork to advance plans for more exploration work to define resources in previously unmined areas as well as in-mine targets.
The wider 188 km2 Dolgellau Gold Exploration Project, where there are some 300 historical workings and circa 11 past producing gold mines including Clogau and Gwynfynydd, is equally exciting. During the year, we were granted an additional exclusive mineral exploration licence for a further six years in line with our overall plan for continued regional exploration of the Dolgellau Gold Field. Having previously undertaken an extensive regional exploration campaign, including collecting and assaying circa 2,000 soil samples, our work in the year has refined the resulting data into six primary gold targets for follow-up investigation. This includes a 1.8 km long structure to the east of the Brintirion Fault, which cuts through and displaces the lodes between the Clogau and St David’s workings, and a 2 km long target in the north-east of the project area, previously partially tested by trenching in late 2020.
A new high-grade regional gold target, Hafod Owen, was also identified within the exploration licence in July 2021, with grab samples grading up to 24 g/t. We are now planning a high-resolution UAV (drone-based) aeromagnetic geophysical survey to pinpoint the bedrock sources of geochemical anomalies and refine targets for follow up groundwork including drilling.
As we move further into 2022, our Limerick Base Metals Project is also gaining traction. Located in the Irish Ore Field, home to some of Europe’s largest zinc-lead projects, this project is surrounded by active zinc-lead exploration projects including Stonepark, Carricklittle and Bulgadden. We have identified three principal exploration target areas for follow-up exploration activities and are currently in the process of planning for exploration drilling, which we hope will commence H2 2022.
A key event during the year was our successful spin-out listing on AIM of our portfolio of Greenlandic assets. The new AIM-quoted vehicle which now holds 100% of those assets, GreenRoc Mining plc, is led by an experienced, Greenland-focused senior management team. Post period end, GreenRoc announced the departure of CEO Kirk Adams and that Director Lars Brünner would be taking over as interim CEO pending confirmation of a permanent appointment. We are confident that GreenRoc is well positioned for significant growth in the year ahead. Alba has a 54% stake in GreenRoc.
GreenRoc’s graphite and ilmenite projects are particularly exciting:
· Amitsoq, in southern Greenland, is one of the highest-grade graphite deposits in the world. Post period end, having completed a drill programme during 2021, GreenRoc announced a maiden Mineral Resource at the Amitsoq Island Deposit of 8.28 million tonnes (Mt) at an average grade of 19.75%, giving a total graphite content of 1.63 Mt. This includes a particularly high-grade contribution from the Lower Graphite Layer of 3.67 Mt at a grade of 21.19%, for 0.775 Mt of contained graphite. The Exploration Target at the Amitsoq Island Deposit has also increased to a tonnage range of 5-15 Mt at a grade range of 18-22% Graphitic Carbon (Cg). GreenRoc is now in the process of planning and procuring drilling services to drill out the remaining extent of the Exploration Target area at the Amitsoq Island deposit this summer, after which it is hoped to have the resource basis to undertake a detailed feasibility study on the deposit. Further upside is expected from the as yet undrilled Kalaaq Deposit to the south of Amitsoq.
· Thule Black Sands (or TBS) is a high-grade ilmenite project in north-west Greenland, extensively drilled with 10km of mineralised strike length and moving into the development phase. With Phase 2 drilling completed in 2021 to provide the basis for a Scoping Study, EIA/SIA and, ultimately, mining licence application, we are hopeful of a significant upgrade in the quantum and classification of the existing Mineral Resource at TBS.
Recent welcome news from the Horse Hill oil field, in which we have an investment of 11.675% via our holding in Horse Hill Developments Limited, is the grant of a full Production Permit (“PP”) from the Environment Agency, enabling production and water re-injection operations, incineration of waste gas, maintenance/workovers and the drilling of further development wells under a single permit, a move forward from the umbrella of testing permits in place to date. We look forward to hearing of the Operator’s plans for enhancing productivity and delivering on the inherent, and to date largely untapped, value of the Horse Hill Oil Field.
As well as developing our existing assets and supporting our investee companies, all with a view to moving from explorer to developer/producer, we remain focused on securing additional complementary assets that meet our requirements of being either brownfield (ex-production) sites or advanced exploration (previously drilled) assets. We will update the market in this regard when appropriate.
Financial Review
The most significant financial event during the year ended 30 November 2021 was the group reorganisation and IPO to create the new Greenland-focused, AIM listed group, GreenRoc Mining plc. As Alba owns 54 per cent of the GreenRoc group after the IPO, GreenRoc group is fully consolidated within Alba Group with a significant non-controlling interest arising in the balance sheet.
GreenRoc paid Alba £6 million in shares before costs for the Greenlandic projects, against a book value of £2.7 million, a tangible vote of confidence in Alba’s strategy to unearth hidden value from previously drilled or mined projects. That market valuation cannot be reflected in the balance sheet of the new Group (as it is treated as intragroup profit and eliminated from the accounts), but the benefits of the transaction to the Group are clear with a cash injection of £5 million from the IPO to progress the Greenland projects.
Outlook
Our objective remains to expose our shareholders to a continuous stream of high impact activity, and in line with this we are focused on ensuring 2022 builds on the successes we have had over the past few years with multiple exploration and development programmes underway or planned. We also anticipate a steady stream of news flow from our investee companies, principally GreenRoc, as it fast-tracks the development of its exciting projects in the critical minerals space. As recent events in eastern Europe have reminded us, the need for Britain, Europe and the US to ensure ongoing security of supply of critical natural resources and to phase out overreliance on any one producer state, is set to become ever more pressing in the months and years ahead.
Our focus at Alba on near-term projects in safe jurisdictions with multiple follow-up targets, access to existing infrastructure and relatively short timelines to achieving value-enhancing development milestones has served us well. We intend to build on this going forward and while there is still much value to be generated in our existing assets, we continue to evaluate potential new projects to strengthen our portfolio further.
I look forward to providing shareholders with further updates on our progress as we focus on ensuring the underlying value of our assets and investments is more fully reflected in our share price.
Finally, I would like to take this opportunity to thank the Board and our management team for their continued dedication and support over the course of the year. I look forward to continuing our work in the year ahead as we focus on delivering on our overriding objective, which is to generate significant value for all our shareholders.
George Frangeskides
Executive Chairman
18 May 2022
For further information, please visit www.albamineralresources.com or contact:
Alba Mineral Resources plc
George Frangeskides, Executive Chairman +44 20 3950 0725
