Information  X 
Enter a valid email address

Tectonic Gold Plc (TTAU)

  Print      Mail a friend

Tuesday 30 June, 2020

Tectonic Gold Plc

Half-year Report

30 June 2020

TECTONIC GOLD PLC

(“Tectonic Gold” or the “Company”)

Unaudited Interim Results to 31 December 2019

MANAGING DIRECTOR’S STATEMENT

Dear Shareholder,

I am pleased to present the unaudited financial results for (“Tectonic Gold” and/or “the Company”) and its controlled entities (the Group) for the half year ended 31 December 2019.

During the period, management’s focus was on progressing the South African projects and finding a partner to commercialise the diamond mining contract. The Company also investigated heavy mineral sands coincident with the alluvial diamond ores and submitted an application for a mining tenement to extract and process heavy mineral sands.  The diamond project attracted investor interest and is now being funded into production by London listed specialist resources investment company, Kazera Global Investments Plc. Tectonic has retained a non-diluting 10% interest in the diamond mining subsidiary, Deep Blue Minerals Pty Ltd, as announced on 4 June 2020.

Tectonic Gold’s Australian subsidiary, Signature Gold Pty Ltd, has submitted an application for Queensland State Government funding assistance for a drilling program at the company’s Mount Cassidy project. A decision on this is expected by the end of July 2020 and if successful it is intended to undertake drilling in the October quarter.

On 11 March 2020, the World Health Organisation (“WHO”) declared the Coronavirus disease 2019 (COVID-19) a pandemic. The pandemic has adversely affected the global economy, including an increase in unemployment, decrease in consumer demand, interruptions in supply chains, and tight liquidity and credit conditions. Consequently, governments around the world have announced monetary and fiscal stimulus packages to minimise the adverse economic impact. However, the COVID-19 situation is still evolving, and its full economic impact remains uncertain.

The Company has several assets where the value may be impacted by COVID-19. At the date these financial statements were approved by the Directors the extent of the impact COVID-19 on the Company’s assets cannot be reasonably estimated at this time.

The pandemic has impacted the Company’s operations with Government mandated bans on mass gatherings and social distancing measures resulting in disruption to the Company’s operations, this disruption is expected to negatively impact the ability for the Company to conduct drilling and its parent entity’s ability to raise capital, refer Going Concern Note 2. 

The Directors and management are continually monitoring and managing the Company’s operations closely in response to COVID-19 however the extent of the impact COVID-19 may have on the Company’s future liquidity, financial performance and position and operations is uncertain and cannot be reasonably estimated at the date these financial statements were issued.

RESULTS AND COMPARITIVE INFORMATION

The Group incurred a profit after tax for the reporting period of £23,569 (31 Dec 2018: £102,888 profit as restated).

During the reporting period Signature Gold received a Research and Development (R&D) Tax Incentive Rebate of approximately £152,163 (2018: £$ 330,248) for the financial year ended 30 June 2019.

The R&D Tax Incentive Rebate is an Australian Government program under which eligible companies receive cash refunds of up to 45% of eligible expenditure on research and development.

Comparative period adjustments

The 2018 balances were restated in the 2019 financial statements as the Company’s auditor, PKF Littlejohn LLP found an error in the accounting treatment for the reverse acquisition during the 2019 audit. The 2018 balances were also restated to account for certain costs amounting to £45,250 that were not accrued for at the time and the fair value of options that were issued on 25 June 2018 which amount to £68,900. Accordingly, comparative information for the reporting period ended 31 December 2018 in this report has been re-stated.

For and on behalf of the Board.
Brett Boynton
Director
 

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 31 DECEMBER 2019

The accompanying notes form part of these financial statements.

NOTE 6 MONTHS TO 31 DEC 2019  UNAUDITED 6 MONTHS TO 31 DEC 2018  UNAUDITED
Restated
12 MONTHS TO 30 JUNE 2019 AUDITED
GBP GBP GBP
Revenue from continuing operations 47,513 - 31,862
Expenses from continuing operations:
Accounting and audit fees (12,629) (37,567) (88,673)
Administration and office costs (9,656) (20,314) (27,077)
Corporate costs (33,564) (52,541) (115,806)
Amortisation and depreciation (882) (588) (1,338)
Employee benefits, management fees and on costs (22,824) (59,995) (89,777)
Exploration and tenement costs (25,922) (18,629) (36,388)
Insurance - (7,796) (17,233)
Legal expenses - 400 -
Options fee and associated costs - - 396
Impairment of exploration costs - - (703,936)
Business Development costs (9,257) - -
Bad debt expense - - (64,173)
Other expenses (61,373) (30,330) (38,945)
(Loss) from continuing operations before income tax (128,594) (227,360) (1,151,088)
Income tax benefit 152,163 330,248 326,214
Net profit/(loss) for the reporting period 23,569 102,888 (824,874)
Other comprehensive income, net of tax (46,344) (23,837) (34,430)
Total comprehensive (loss)/income for the year 22,775 79,051 (859,304)
Earnings per share attributable to owners of the company
Basic and diluted (pence per share)
From continuing operations 5 0.003 0.015 (0.120)


CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2019

31 DEC 2019 31 DEC 2018 30-JUN-19
GROUP
UNAUDITED
 GROUP UNAUDITED
Restated
GROUP AUDITED
NOTE GBP GBP GBP
ASSETS
NON-CURRENT ASSETS
Plant and equipment 5,504 7,398   6,603 
Exploration and evaluation expenditure 2,604,751 3,285,833   2,663,707
TOTAL NON-CURRENT ASSETS 2,610,255 3,293,231 2,670,310
CURRENT ASSETS
Cash and cash equivalents 130,224 177,009   34,875
Trade and other receivables 105 14,142   7,913
Investments - 40,122   40,122 
Other assets 6 339,485 358,498 360,412
TOTAL CURRENT ASSETS 469,814 589,771 443,322
TOTAL ASSETS 3,080,069 3,883,002 3,113,632
EQUITY
Share capital 6,100,615 6,099,615   6,100,615
Warrant reserves 60,146,216 60,117,216   60,146,216
RTO Reserve (57,976,182) (57,976,182) (57,976,182)
Warrant Reserves 95,098 95,098 95,098
Foreign exchange translation reserves (139,025) (82,088)   (92,681) 
Accumulated losses (5,739,788) (4,835,595)   (5,763,357)
TOTAL EQUITY 2,486,934 3,418,064 2,509,709

   

31 DEC 2019 31 DEC 2018 30-JUN-19
GROUP UNAUDITED GROUP
UNAUDITED

Restated
GROUP AUDITED
NOTE GBP GBP GBP
LIABILITIES
NON-CURRENT LIABILITIES
Trade and other payables 15,358   - 15,913 
Borrowings 228,664  166,741 236,793
Employee benefits -   10,713   11,363
TOTAL NON-CURRENT LIABILITIES 244,022   177,454   264,069
CURRENT LIABILITIES
Trade and other payables 249,113 272,218 275,680
Borrowings 100,000 -   50,000
Employee benefits - 15,266   14,174 
TOTAL CURRENT LIABILITIES 349,113 287,484   339,853
TOTAL LIABILITIES 593,135 464,938 603,923
TOTAL EQUITY AND LIABILITIES 3,080,069 3,883,002 3,113,632

The accompanying notes form part of these financial statements.

These financial statements were approved by the Board of Directors on 30 June 2020.

Signed on behalf of the Board by:
Brett Boynton
Managing Director 
Company number: 05173250


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 31 DECEMBER 2018

GROUP - UNAUDITED
31 DEC 2019
ISSUED
CAPITAL
SHARE
PREMIUM
WARRANT
RESERVE
RTO
RESERVE
FOREIGN
CURRENCY
RESERVE
ACCUMULATED LOSSES TOTAL
GBP GBP GBP GBP GBP GBP GBP
Balance at 1 July 2019 6,100,615 60,146,216 95,098 (57,976,182) (92,681) (5,763,357) 2,509,709
Total comprehensive loss for the period (46,344) 23,569 (22,775)
Transactions with owners, recorded directly in equity:
Shares Issued - - - - - - -
Balance as at 31 December 2019 6,100,615 60,146,216 95,098 (57,976,182) (139,025) (5,739,788) 2,486,934



GROUP - UNAUDITED
31 DEC 2018
ISSUED
CAPITAL
SHARE
PREMIUM
WARRANT
RESERVE
RTO
RESERVE
FOREIGN
CURRENCY
RESERVE
ACCUMULATED LOSSES TOTAL
GBP GBP GBP GBP GBP GBP GBP
Balance at 1 July 2018 8,266,848 - - - (58,251) (4,824,334) 3,384,263
Prior year adjustment (2,167,233) 60,117,216 95,098 (57,976,182) - (114,149) (45,250)
Balance at 1 July 2018 (restated) 6,099,615 60,117,216 95,098 (57,976,182) (58,251) (4,938,483) 3,339,013
Total comprehensive loss for the period (23,837) 102,888 79,051
Transactions with owners, recorded directly in equity:
Shares Issued - - - - - - -
Balance as at 31 December 2018 6,100,615 60,146,216 95,098 (57,976,182) (82,088) (4,835,595) 3,418,064

   

GROUP - AUDITED
30 JUNE 2019
ISSUED
CAPITAL
SHARE
PREMIUM
WARRANT
RESERVE
RTO
RESERVE
FOREIGN
CURRENCY
RESERVE
ACCUMULATED LOSSES TOTAL
GBP GBP GBP GBP GBP GBP GBP
Balance at 1 July 2018 8,266,848 - - - (58,251) (4,824,334) 3,384,263
Prior year adjustment (2,167,233) 60,117,216 95,098 (57,976,182) - (114,149) (45,250)
Balance at 1 July 2018 (restated) 6,099,615 60,117,216 95,098 (57,976,182) (58,251) (4,938,483) 3,339,013
Total comprehensive loss for the period (34,430) (824,874) (859,304)
Transactions with owners, recorded directly in equity:
Shares Issued – 1 June 2019 1,000 29,000 - - - - 30,000
Balance as at 30 June 2019 6,100,615 60,146,216 95,098 (57,976,182) (92,681) (5,763,357) 2,509,709

The accompanying notes form part of these financial statements

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2019

6 MONTHS TO 31 DEC 2019  UNAUDITED 6 MONTHS TO 31 DEC 2018  UNAUDITED 12 MONTHS TO 30 JUNE 2019 AUDITED
GBP GBP GBP
CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts in the course of operations - 38,301 62.832
Cash payments in the course of operations (131,029) (402,490) (586.464)
Research and Development Tax Incentive Claim 152,163 330,249 326.214
Interest received 761 - -
Net cash used in operating activities 21,895 (33,940) (197,418)
CASH FLOWS USED IN INVESTING ACTIVITIES
Payments for exploration and evaluation expenditure (63,341) (212,352) (279,351)
Payments for property, plant and equipment - (5,456) (6,911)
Payment for security deposit (272) - (276)
Proceeds from refund of security deposits 2,720 - -
Proceeds from sale of investment 86,844 - -
Net cash used in investing activities 25,951 (217,808) (286,538)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares - 280,000 280,000
Proceeds from borrowings 50,000 - 89,418
Repayment of borrowings - - -
Net cash provided by financing activities 50,000 280,000 369,418
Net (decrease)/increase in cash held and cash equivalents 97,846 28,252 (114,539)
Cash and cash equivalents at the beginning of the period 34,875 149,397 149,397
Effects of exchange rate changes on cash and cash equivalents (2,497) (640) 17
Cash and cash equivalents at the end of the period 130,224 177,009 34,875

The accompanying notes form part of these financial statements.


NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2019

1.  GENERAL INFORMATION

Tectonic Gold Plc is a company incorporated in the United Kingdom under the Companies Act 2006. The consolidated entity (the “Group”) consists of Tectonic Gold Plc (the “Company”) and the entities it controlled at the end of, or during, the six months ended 31 December 2019. The principal activity of the Group during the financial period was mineral exploration.

2.  BASIS OF PREPARATION

These condensed interim consolidated financial statements (“the interim financial statements”) of the Group are for the six months ended 31 December 2019 and are presented in Sterling which is the Company’s presentational currency. These interim financial statements have not been reviewed or audited.

The interim financial statements have been prepared in accordance with the recognition and measurement principles of IFRS as adopted by the European Union (EU) and on the same basis and using the same accounting policies as applied in the Company’s 2019 Annual Report and statutory accounts for the year ended 30 June 2019.

The statutory accounts for the year ended 30 June 2019 have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

The interim financial statements have been prepared on a going concern basis under the historical cost convention. The Directors believe that the going concern basis is appropriate for the preparation of these interim financial statements as the Company is in a position to meet all its liabilities as they fall due.

The interim financial statements for the six months ended 31 December 2019 were approved by the Board on 30 June 2019.

3.  DIVIDEND

The Board is not recommending the payment of an interim dividend for the period ended 31 December 2019.

4.  PRIOR YEAR ADJUSTMENT

The  consolidated statement of profit and loss and other comprehensive income as at 31 December 2018 has been restated to account for certain costs amounting to £45,250 that were not accrued for on completion of the reverse takeover by Signature Gold Pty Ltd on 25 June 2018  and the fair value of options that were issued on 25 June 2018 which amount to £68,900. Details are set out below.

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME (extract) Signed
31 Dec 2018
accounts
2018
Loss Decrease

Restated for
31 Dec 2018
Note GBP GBP GBP
Expenses from continuing operations:
Administration and office costs (i) (34,064) 13,750 (20,314)
Corporate costs (i) (84,041) 31,500 (52,541)
Fair value of warrants issued and vested (ii) (68,900 68,900 -
(118,105) 114,150 (72,855)

(i)  The prior year adjustments are comprised of printing costs amounting to £13,750 and consulting fees of £31,500 that were incurred in connection with the reverse takeover by Signature Gold Pty Ltd.

(ii)  The prior year adjustment of £68,900 represents the fair value of options that were issued on 25 June 2018 and not recorded as at 30 June 2018.

Basic and diluted earnings per share for the prior year have also been restated. Refer to Note 5.

4.  PRIOR YEAR ADJUSTMENT (CONTINUED)

GROUP STATEMENT OF FINANCIAL POSITION Signed accounts at 31 Dec 2018 Adjustments Restated
as at 31 Dec 2018
Note GBP GBP GBP
ASSETS
NON-CURRENT ASSETS
Plant and equipment 7,398 - 7,398
Exploration and evaluation expenditure 3,285,833 - 3,285,833
TOTAL NON-CURRENT ASSETS 3,293,231 - 3,293,231
CURRENT ASSETS
Cash and cash equivalents 177,009 - 177,009
Trade and other receivables 14,142 - 14,142
Investments 40,122 - 40,122
Other assets 3,584,988 - 3,584,988
TOTAL CURRENT ASSETS 3,816,261 - 3,816,261
TOTAL ASSETS 7,109,492 - 7,109,492
EQUITY
Share capital (i) 8,266,848 (2,167,233) 6,099,615
Share premium (i) - 60,117,216 60,117,216
RTO reserve (i) - (57,976,182) (57,976,182)
Warrant reserve (ii) 68,900 26,198 95,098
Foreign exchange translation reserves (82,088) - (82,088)
Accumulated losses (4,835,596) - (4,835,596)
TOTAL EQUITY 3,418,064 - 3,418,064
LIABILITIES
NON-CURRENT LIABILITIES
Borrowings 166,741 - 166,741
Employee benefits 10,713 - 10,713
TOTAL NON-CURRENT LIABILITIES 177,454 - 177,454
CURRENT LIABILITIES
Trade and other payables 272,218 - 272,218
Employee benefits 15,266 - 15,266
TOTAL CURRENT LIABILITIES 287,484 - 287,484
TOTAL LIABILITIES 464,938 - 464,938
TOTAL EQUITY LIABILITIES 3,883.002 - 3,883,002

(i)  The 2018 balances have been restated in the 2019 financial statements due to an error in the accounting treatment for the reverse acquisition identified during the 2019 audit.

(ii)  The prior period adjustment to warrant reserves of £26,198 is the recycling of the share-based payment expense in respect of warrants and share options that had either lapsed or been exercised prior to completion of the reverse takeover on 25 June 2018.

5.  EARNINGS PER SHARE

The basic earnings per share is based on the profit/(loss) for the year divided by the weighted average number of shares in issue during the reporting period. The weighted average number of ordinary shares for the reporting period assumes that all shares have been included in the computation based on the weighted average number of days since issue.

6 MONTHS TO 31 DEC 2019 UNAUDITED 6 MONTHS TO 31 DEC 2018  UNAUDITED
Restated
12 MONTHS TO 30 JUNE 2019 AUDITED
GBP GBP GBP
Profit/(Loss) for the year attributable to owners of the Company 23,569 102,888 (824,874)
Weighted average number of ordinary shares in issue for basic earnings* 656,562,746 687,562,746 688,357,267
Weighted average number of ordinary shares in issue for fully diluted earnings* 710,562,746 700,562,746 688,357,267
(Loss)/gain per share (pence per share)
Basic 0.003 0.015 (0.12)
Diluted 0.003 0.015 (0.12)

6.  OTHER ASSETS

 31 DEC 2019 UNAUDITED  31 DEC 2018  UNAUDITED  30 JUNE 2019 AUDITED
GBP GBP GBP
Prepayments(i) 333,956 347,902 346,151
Other prepayments 2,325 3,014 6,440
Security deposits 3,204 7,582 7,821
339,485 358,498 360,412

(i)  In June 2018, the Company paid Titeline Drilling Pty Ltd ACN 096 640 201 (Titeline) for future drilling services in accordance with the heads of agreement dated 28 March 2018 between Titeline, Signature and StratMin.

Titeline has been engaged to complete 10,000 metres of diamond drilling on a 50:50 cash and equity basis to produce core samples for analysis, assay and metallogenic studies from the Company’s Queensland Project sites. A review to be completed after 2,500 metres of drilling has been completed and the remaining 7,500 metres is in planning for the second half of 2019. The cash component of the drilling contract is expected to be met from revenues generated by the diamond mining joint venture with VAST Mineral Sands Pty Ltd announced on February 18, 2019.

As at 30 June 2018, the prepayment of GBP 633,825 (A$1,125,000) to Titeline was comprised of:

-  GBP 126,765 (A$225,000 excluding GST) paid in cash; and

-  pre-paid technical services amounting to GBP 507,060 ($A90,000) settled with the issue of 5,544,484 fully paid ordinary shares issued in the Company at an issue price of A$0.162 per share.

  As at 31 December 2019, GBP 333,956 ($A625,386) remains prepaid to Titeline

7.  EVENTS AFTER THE REPORTING PERIOD

On 11 March 2020, the World Health Organisation (“WHO”) declared the Coronavirus disease 2019 (COVID-19) a pandemic. The pandemic has adversely affected the global economy, including an increase in unemployment, decrease in consumer demand, interruptions in supply chains, and tight liquidity and credit conditions. Consequently, governments around the world have announced monetary and fiscal stimulus packages to minimise the adverse economic impact. However, the COVID-19 situation is still evolving, and its full economic impact remains uncertain.

The Company has several assets where the value may be impacted by COVID-19. At the date that these financial statements were approved by the Directors the extent of the impact COVID-19 on the Company’s assets cannot be reasonably estimated at this time.

The pandemic has impacted the Company’s operations with Government mandated bans on mass gatherings and social distancing measures resulting in disruption to the Company’s operations, this disruption is expected to negatively impact the ability for the Company to conduct drilling and its parent entity’s ability to raise capital, refer Going Concern Note 2 of the Company 20919 annual report.

The Directors and management are continually monitoring and managing the Company’s operations closely in response to COVID-19 however the extent of the impact COVID-19 may have on the Company’s future liquidity, financial performance and position and operations is uncertain and cannot be reasonably estimated at the date these financial statements were issued.

Other than as stated elsewhere in this report, Directors are not aware of any other matters or circumstances at the date of this report that have significantly affected or may significantly affect the operations, the results of the operations or the state of affairs of the Company in subsequent financial years.

8.  DISTRIBUTION

Copies of these interim financial statements are available on the Aquis Exchange website, the Company website (www.tectonicgold.com) or directly from the Company at its registered address.

The Directors of the Company accept responsibility for the contents of this announcement.

For further information, please contact:

Tectonic Gold plc
Brett Boynton
Sam Quinn
www.tectonicgold.com
@tectonic_gold
+61292417665

Ends


a d v e r t i s e m e n t