Empire Metals Limited (LON:EEE), the AIM-quoted resource exploration and development company, has provided an update on the drilling programme being undertaken by Artemis Resources Limited at the Munni Munni Palladium Project in the West Pilbara, Western Australia.
The Munni Munni project is subject to a proposed acquisition of a 58.6% interest in Munni Munni Pty Ltd, a subsidiary of ASX listed Artemis and the beneficial owner of a 70% interest in Munni Munni. Following completion, Empire will hold a controlling 41% interest in Munni Munni, the largest unexploited primary PGE Resource in Australia.
Drill Programme
We refer to the announcement released by Artemis earlier today. The Munni Munni Reverse Circulation (RC) drilling of 12 drill holes for 1,928 metre has been completed, with drill holes spread through the entire upper portion of the mineralisation, to a maximum depth of 200 metres. Samples are in transit to ALS Global and results are expected in 3-4 weeks’ time.
Transaction Update
The Company is working closely with Artemis to conclude the transaction announced on 27 April 2020. Completion is subject to a number of conditions precedent including completion of due diligence, execution of a formal joint venture agreement between the Parties, obtaining necessary regulatory approvals and obtaining all necessary third-party consents and approvals to give effect to the proposed acquisition. A significant amount of work has already taken place between the parties and it is expected that the conditions precedent will be completed in a timely manner.
Empire Metals Limited, also announced its final results for the year ended 31 December 2019.
The annual report and accounts for the year ended 31 December 2019 will be posted to shareholders today.
The annual report and accounts for the year ended 31 December 2019 are available for download on the Company’s website, www.empiremetals.co.uk.
Chairman’s Statement
As shareholders will be aware, our progress relating to the advancement of our Bolnisi Project in Georgia towards production was frustrated during the period under review by continuing delays by the government in Georgia regarding the extension of the exploration permit. Some of the uncertainty relating to this was somewhat alleviated shortly after the year end, in January 2020, when the Company’s joint venture company, Georgian Copper & Gold JSC (‘GCG’), in which Empire Metals Limited (“EEE” or “Empire Metals”) holds a 50% interest, received confirmation of tenure from the National Agency of Mines (‘NAM’) for two key deposits in the Bolnisi Project licence area, namely Kvemo Bolnisi East and Dambludi.
The confirmation of tenure over Kvemo Bolnisi East and Dambludi was a significant milestone in the Company’s ongoing efforts to obtain the extension to the permit in Georgia and marked the culmination of many months of work by the team and NAM. However, alongside this tenure confirmation, correspondence from NAM confirmed its intention to return the remainder of the Bolnisi Project licence area, including three further deposits identified by the Company, being Kvemo Bolnisi West, Tsitel Sopeli and Balichi, to the State. An appeal process is currently underway with the Minister of Economy and Sustainable Development in Georgia with the objective of GCG securing its rights to the remainder of the licence area. Further updates regarding the appeal process will be made as appropriate.
As reported in the Final Results for the year ended 31 December 2018, as a result of the previous delays to the confirmation of tenure over the Georgian exploration assets the Board determined that they did not, at that time, fully meet the capitalisation criteria under IFRS 6 and an impairment provision was recognised against these assets. As reported above, the confirmation of tenure over Kvemo Bolnisi East and Dambludi was received post period end and as such, the impairment has not been adjusted as at year end however, it is expected that a partial write back will be reflected in the Company’s interim accounts for the half year ended 30 June 2020.
Following the confirmation of tenure over Kvemo Bolnisi East and Dambludi on 28 January 2020, the Company updated its development schedule for these assets, particularly in respect of Kvemo Bolnisi East, the target which has been the focus of much of the Company’s investment to date. It had been the Company’s objective to re-commence activities at Kvemo Bolnisi East as soon as possible however, partly due to the various travel and work restrictions necessitated by the COVID-19 pandemic in March 2020, any planned recommencement of work has been postponed. Also, the necessary amendments to the licence to allow work to re-commence on these two projects are unlikely to be made whilst the current appeal process is still underway, and this has of course been further delayed by the pandemic. The Board will continue to manage and respond to the COVID-19 outbreak and will continue to act in the best interests of keeping its employees, contractors and the local community safe. Further updates relating to the Company’s activities in Georgia will be announced in due course.
Outside of Georgia, the Company has made progress with its strategy to identify compelling new assets through which the Company can add short term value. Post period end, Empire Metals raised £600,000 by way of an equity placing and subscription of new ordinary shares with new and existing shareholders in the Company announced on 28 February 2020, to advance this process.
The Board evaluated a large number of potential targets and narrowed its search down to a small number of opportunities which it believed met its stringent investment criteria. Following this, on 27 April 2020, EEE announced that it had entered into a Binding Heads of Agreement with ASX listed Artemis Resources Limited (“Artemis”) to acquire a 41% interest in the Munni Munni Palladium Project in the West Pilbara, Western Australia and has first right of refusal on a further 29% interest in the project.
Munni Munni comprises four granted mining leases and an exploration licence covering a 64km2 tenement area. It is the largest unexploited primary PGE resource in Australia and contains the largest intrusion in the West Pilbara hosting a JORC-compliant 2004 Resource of 24Mt @ 2.9 g/t Platinum Group Element (PGE) and gold (12.4Mt Measured, 9.8Mt Indicated, and 1.4Mt Inferred), containing 1,140,000 ounces palladium, 830,000 ounces platinum, 152,000 ounces gold and 76,000 ounces rhodium. The teams at Artemis and Empire Metals are making progress toward the completion of the acquisition and in the meantime have agreed to commence with the planned drilling programme at the project in order to take advantage of the current drilling season. The programme is designed to extend primary reef mineralisation and test historical assay grades from diamond drilling using RC drilling, test for the presence of a second reef below the primary PGE reef, and generate data that may contribute to a JORC 2012 Mineral Resources Estimate in the future.
The Board is very excited about the opportunity that the Munni Munni Project offers. It satisfies Empire Metal’s objective of de-risking the Company’s growth strategy by diversifying away from a single jurisdiction investment, combining an exceptional project with an attractive and mature investment environment, and I look forward to updating shareholders on completion and further plans for Munni Munni in due course.
Financial Results
As an exploration and development group which has no revenue we are reporting a loss for the twelve months ended 31 December 2019 of £675,592 (31 December 2018: loss of £8,785,533).
The Group’s cash position at the date of signing this report is £363,000.
Corporate
Post period end, the Company announced the appointment of David Ajemian, a prominent natural resources and growth company investor and entrepreneur, as a Non-Executive Director. At the same time, Laurie Mutch, who had held the position of Non-Executive Director since March 2017, stepped down from the Board in order to concentrate on his other business interests. During his time on the Board, Laurie was a hugely supportive force behind the business and his many contributions to the Company will be missed.
As shareholders will be aware, the Board also agreed that to reflect the Company’s developing growth strategy, particularly with regard to the investment in, and advancement of, projects in new jurisdictions outside of Georgia, a change of name would be appropriate. The Company’s new name – Empire Metals Limited – came into effect on 10 February 2020.
The Company’s website can now be found at www.empiremetals.co.uk.
Outlook
Following the confirmation of tenure over two of the Company’s key Georgian projects in January, along with the successful fundraising in February and the agreement to acquire a controlling interest in the Munni Munni Project in April, the Board is positive about the future for EEE. Emerging from the difficult and frustrating year that was 2019, the Company has been strengthened both financially and corporately in 2020 and on behalf of the Board, I am optimistic about our ability to deliver on our key strategic aims this year. We are of course cognisant of the unprecedented global disruption which the COVID-19 pandemic is creating for communities and economies worldwide, however the Board has adopted a prudent and responsible approach to both our financial and operational activities and we are confident that EEE is well equipped to weather the current market downturn.
We look forward to reporting on our activities in Georgia and in new jurisdictions over the second half of 2020. I would like to take this opportunity to thank our shareholders and my fellow directors for their continued support as we look forward to a bright future as Empire Metals Limited.
Neil O’Brien
Non-Executive Chairman
30 June 2020
