Empire Metals Ltd (EEE.L) Final Results

Empire Metals Limited, the AIM-quoted exploration and resource development company, announces its final results for the year ended 31 December 2020.

The annual report and accounts for the year ended 31 December 2020 will be posted to shareholders today and will be available for download on the Company’s website, www.empiremetals.co.uk, later today.

Chairman’s Statement

2020 was a significant year in so many ways, but for Empire Metals it was a year of significant forward momentum and marked the emergence of a new and reenergised strategy, a new flagship asset and a new jurisdiction of focus. These fresh dimensions to our company have clearly resonated with investors and from both an operational and corporate perspective, I am delighted with the progress that we made during the year.

The decisions made over the past 14 months have resulted in Empire now holding a 75% interest in a highly prospective gold asset which is poised for rapid advancement up the exploration and development curve. With the Eclipse Gold Project, I am confident that we are in the right place, at the right time and in the right commodity.

As investors may be aware, we are bearing witness to a modern-day gold rush in Western Australia. Exploration activity in the region hit a five-year high in 2020 despite initial fears earlier that it would be severely impacted due to the COVID-19 pandemic. Mines Minister Bill Johnson reported in H2 2020 that gold projects accounted for 70% of applications, prompted in part by the strong gold price performance during 2020 and forecasts for further gains in 2021 and beyond.

There have certainly been some notable winners in the gold exploration and development industry in the region, with junior miners and majors alike jostling for prime positions in Western Australia, which is set to become one of the largest gold producing regions globally. The combination of security of tenure, exceptionally mineralised terrane and increasing metals prices has triggered a review of both greenfield and brownfield projects alike. Additionally, working in Western Australia has been far less affected by Covid-19 restrictions than most regions of the world, and coupled with its world-class gold potential and its top 5 ranking over past 5 years in the Fraser Institute survey of best mining investment jurisdictions, Western Australia is clearly a great address for value creative mineral exploration and mine development.

Thanks to our acquisition of the Eclipse Gold Project, we believe Empire is ideally placed to be among the winners in the region. Located 55km north-east of Kalgoorlie, in a prime gold district of Western Australia, the Eclipse Gold Project produced 954 tonnes @ 24.6 g/t Au for 754.25 oz Au from the Eclipse shaft which operated up to 1910. In addition to the known mineralisation at and surrounding the Eclipse old workings, recent geophysics and geochemistry work has highlighted further potential mineralisation at two additional targets north-west of Eclipse, the Houdini and Easy prospects. The licence has been held by one private individual for the past 30 years, during which time only cursory modern exploration had been applied to a very small part of the entire ~300ha licence area, highlighting the significant opportunity to prove up known gold occurrences and make new gold discoveries.

Having announced the acquisition of a controlling interest in the Eclipse option in August 2020, Empire quickly set to work applying modern exploration programmes to this large, high-grade and previously producing mining licence. To date, the Company has conducted two phases of drilling at Eclipse and consistently encouraging results have been returned. A total of 2,578 metres of RC drilling was completed at the Eclipse and Houdini prospects in October and November 2020, with a second round of drilling commencing in January 2021. Highlights from this programme included 14m at 3.78 g/t gold (‘Au’) from 22m, including 1m @ 21.4 g/t Au, and 1m @ 16.65 g/t Au. This hole includes three different clusters of quartz veining mainly associated with the higher grades, confirming there is more than one mineralised structure.

A total of 4,589m of RC drilling was completed in this second phase, which was concluded in February 2021. Importantly, this programme confirmed the existence of a number of parallel veins in addition to the main Eclipse vein, including a different stockwork style of near-surface mineralisation in the vicinity of the Jack’s Dream old workings, and including one intercept of 24m @ 1.44 g/t Au from 46m downhole (containing 2m @ 2.86 g/t Au; and 3m @ 5.08 g/t Au). The interpretation of these results is underway, and a further work programme will be announced shortly which is likely to include preparation of a JORC compliant resource and initial pit optimisation studies.

Outside of the Company’s activities at Eclipse, the Board has made progress on various corporate developments principally concerning Empire’s legacy interest in the Bolnisi Project in Georgia. A Sale and Purchase Agreement was agreed in October 2020 with TSXV-listed Candelaria Mining Corporation to acquire Empire’s interest in the joint venture in Georgia, but the offer was subject to a right-of-first-refusal (“ROFR”) on behalf of Empire’s joint venture partner in Georgia. A long period of negotiations with the partner then ensued, and at the time of writing this is approaching a resolution. Throughout this period the Company has focussed on achieving the best possible outcome for shareholders and the Board is confident the Company will soon be able to put the frustrations of the Georgian joint venture behind us and focus the majority of our efforts on building on the new platform for growth in the Western Australian gold mining industry.

Financial Results

As an exploration and development group which has no revenue we are reporting a loss for the twelve months ended 31 December 2020 of £572,989 (31 December 2019: loss of £675,592).

The Group’s cash position at the date of signing this report (16 April 2021) is £1.23 million.

Corporate

In keeping with the Company’s focus on Western Australia, Mike Struthers, who has led the Company as CEO since January 2018, stepped down from his executive role in February 2021. I am delighted that Mike will remain a key Empire team member through his position as a Non-Executive Director of the Company, as well as being engaged as a Technical Consultant, providing technical guidance on the development of the Company’s projects across its portfolio. At the same time, Non-Executive Director David Ajemian also resigned from the Empire board. The Board has an active search underway for a new CEO.

Outlook

Empire has made significant progress during 2020 and we are not breaking our stride as we move into 2021. The Eclipse Gold Project has demonstrated its potential as a standalone mine development, and we are now focussed on moving our exploration activities through to resource definition and into the feasibility phase. The project, region and commodity continue to generate significant interest in the market, and we are confident that we have a highly valuable asset poised for rapid value accretion. We will also be on the lookout for additional value-accretive acquisitions in 2021.

Our genesis as a value-driven Australian-focussed resource company will be cemented on the appointment of a new CEO, which we anticipate in the coming weeks, as we look forward to what we believe is a very bright future in this region.

I would like to thank shareholders and my board colleagues, both past and present, as we advance our strategy in Western Australia and look to deliver further high impact news flow throughout 2021.

Neil O’Brien

Non-Executive Chairman

16 April 2021


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