MetalNRG PLC (LON:MNRG) Half-year Report

MetalNRG plc (LSE:MNRG), the natural resource investing and exploration company, announces its results for the six months ended 31st August 2019.

Operational Highlights

Key operational milestones achieved during the period:

• The build up to August this year was mostly focused on delivering admission of the Company’s shares to the standard segment of the official list of the FCA and to trading on the main market of the London Stock Exchange plc (“Admission”) which was planned and based on the Company’s principal assets being in uranium and gold. Unfortunately, plans in relation to the uranium project in the Republic of Kyrgyz were suspended in light of a proposed ban by the local government of any exploitation of uranium. As a result, focus was shifted to securing Admission concentrating on the development of the Gold Ridge Project.

• Due to the proposed ban on uranium mining in the Republic of Kyrgyz not being resolved, it was agreed with the in-country partner that the Company will not invest any further in the project until there is clarity on this issue, and if the Company is to re-consider the position, there will be the opportunity to potentially revisit the valuation of that project.

• In September 2019, work commenced on the Gold Ridge Mine, one of three historic mines within the Gold Ridge Project in Arizona, with an assessment of whether a plan to generate cash flows from the mine to finance further development, was commercially viable. Results to date indicate this to be a realistic proposition and work continues on the development plan.

• During site visits to the Gold Ridge Mine samples were taken from waste dumps outside level 6 of the mine; these were tested and the results were encouraging. The Company is currently considering monitisation options. While completing the assessment of samples on the waste dumps it was also determined that certain parts of the internal workings of the mines could be accessed safely. A number of samples were taken of pillars that had been left behind from previous workings. The results of the samples from the pillars were announced to the market yesterday.

• As a result of work carried out and the review of historical data the Company believes that the three historical producing mines, including the Gold Ridge Mine, within the Gold Ridge Project area are part of one system. Review work will continue in greater detail to establish if this is the case.

Corporate and Financial Highlights

• In July of this year, the Company’s listing moved from the NEX Exchange Growth Market to the standard segment of the official list of the FCA and trading commenced on the main market of the London Stock Exchange plc. On 23rd July 2019, the Company’s existing ordinary shares and 94,333,326 new ordinary shares issued in connection with a share placing were admitted to listing on the standard segment of the Official List and to trading on the main market for listed securities. The listing process took longer than anticipated due to the issues mentioned above with our uranium investment. As a result, our prospectus set out, as the Company’s focus, the development of the Gold Ridge Project, which had been acquired from Winston Gold Corporation in November last year.

• The plan is now to develop the Gold Ridge Mine by generating cash flow from the operation and exploring for further upside, while at the same time assessing new projects as investment opportunities. All new opportunities will need to offer an opportunity to generate short term cashflow from the operations while offering additional exploration upside.

• In August, at the Company’s AGM, all resolutions were passed by shareholders as reported in the RNS announcement on 27th August.

Corporate and Financial Highlights, continued

• On 23rd September, Gervaise Heddle’s resignation from the Board was announced. The Board would like to take this opportunity to thank Gervaise for his support over the last three years and wish him well for the future.

• On 29th November, it was announced that the Company had entered into an exclusivity agreement to purchase an interest in an oil and gas project in Romania; that announcement was followed by the announcement that PierPaolo Rocco will be joining the MNRG board to drive forward that project.

Christopher Latilla-Campbell, Chairman, commented: We are encouraged by the positive exploration results from our Gold Ridge Project and the work on plans to monitise these continue apace. Rolf and his team are also pursuing additional projects in parallel to these and we hope to be able to disclose these shortly.

Operational Review

As a result of the review of all available data on the Gold Ridge Mine in Arizona, the Company is now laying out its plan for the next stage of work, leading towards the monitising of the waste dump outside level 6 and completing a series of samples on the pillars inside the mine at that level.

The results from the samples from the waste dump outside level 6 confirm a viable 1.74g/t recoverable gold, which is made up of 2,753 tonnes containing 4,785.39 grams of gold. The Company is now in the process of identifying a processing plant that will take the waste for processing; the Company is currently in negotiations with two plants, both in close proximity to the mine. The Company is also assessing the optimal way to load and transport the resource from the waste dump and aims to be able to report back on negotiations in December 2019.

One sample, taken from a boulder on the side of the waste dump, which originated from one of the pillars left behind from internal mine workings at level 6, returned potentially very favourable results, as reported in the RNS announcement on 30th September 2019. This sample, along with data left behind in the various data bases on the operations by the previous miners, suggest the potential to monitise the pillars. There are a significant number of pillars left behind at level 6 and it is planned to take a series of samples from these. The sampling of the pillars, to achieve a statistically relevant sample size, was completed at the beginning of November, with samples being sent to the ALS Global laboratory. Results are expected in December 2019.

While work at the Gold Ridge Mine is progressed, the Company will also be looking at how best to move the Palomino project in Australia forward.

Corporate Development

The Company will continue to seek additional projects that meet the set investment criteria. The intention is specifically to seek opportunities where we can deliver early cashflow from an asset and where the cashflow from the operations allows us to explore further development upside on each particular project. The announcement on the proposed oil and gas project is an encouraging development for the Company, allowing a diversification our investment and risk.

Financial Review

MetalNRG reported an unaudited operating loss for the six months ended 31st August 2019 of £260,228 (six months to 31st August 2018: loss of £238,108). Basic and diluted loss per share for the period was 0.12p and 0.10p respectively (six months to 31stAugust 2018: Basic loss per share 0.14p and Diluted loss per share 0.12p).


The Gold Ridge Mine will be the immediate focus of the Company’s work and it will seek to exploit the opportunities offered by it, while at the same time actively seeking additional new investment projects.

Responsibility Statement

The Company confirms that to the best of its knowledge:

• The interim financial statements have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting, as adopted by the EU;

• Give a true and fair view of the assets, liabilities, financial position and loss of the Company;

• The interim report includes a fair review of the information required by DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the interim financial information, and a description of the principal risks and uncertainties for the remaining six months of the year; and

• The interim financial information includes a fair review of the information required by DTR 4.2.8R of the Disclosure and Transparency Rules, being the information required on related party transactions.

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