URU Metals is pleased to announce its interim results for the period ended 30 September 2019.
I am pleased to present to our shareholders and stakeholders the consolidated financial statements of the Group for the period ended 30 September 2019.
The exciting Zebediela Project remains the focus of the Company’s activities. Geological modelling using historical data and the information from surrounding projects has improved the likelihood of proving up a resource with higher nickel grades and associated platinum group metals mineralization close to surface, helping with advancing the project to a mining stage.
The highlights of our progress during the six months ended 30 September 2019 and to the date of this report can be summarised as follows:
Zebediela Nickel Project
Good progress continues to be made on the various licensing aspects of the project. An application for a mining right over the Zebediela Project was made and accepted in August 2019. The mining right application was submitted over the portions of the four farms that comprise the Zebediela Project, namely portions of the farms Uitloop 3 KS, Bloemhof 4 KS, Amatava 41 KS and Piet Potgietersrust Town and Townlands 44 KS, totaling approximately 4,661 hectares.
A major component of the mining right application process is the environmental authorization process, which consists of a scoping phase and an environmental impact assessment phase. The public consultation process for the scoping phase ended on 02 December 2019 and a public open day was held on 14 November 2019. Over 103 interested and affected parties (“I&AP’s”) attended the open day and the comments received were incorporated into the Final Scoping Report which was submitted to the South African Department of Mineral Resources and Energy (“DMRE”) for review on 10 December 2019. The scoping phase of the study is conducted in order to:
- Identify the relevant polices and legislation relevant to the activity;
- Motivate the need and desirability of the proposed activity, including the need and desirability of the activity in the context of the preferred location;
- Identify and confirm the preferred activity and technology alternatives through an impact and risk assessment and ranking process;
- Identify and confirm the preferred site, through a detailed site selection process, which includes an impact and risk assessment process inclusive of cumulative impacts and a ranking process of all the identified alternatives focusing on the geographical, physical, biological, social, economic, and cultural aspects of the environment;
- Identify the key issues to be addressed in the assessment phase;
- Agree on the key issues addressed in the assessment phase, including the methodology to be applied, the expertise required as well as the extend of further consultation to be undertaken to determine the impacts and risks the activity will impose on the preferred site through the life of the activity, including the nature, significance, consequence, extent, duration and probability of the impacts to inform the location of the development footprint within the preferred site; and
- Identify suitable measures to avoid, manage, or mitigate identified impacts and to determine the extent of the residual risks that need to be managed and monitored.
A positive response on the submitted scoping report is expected from the DMRE in Q1 2020, whereby the Environmental Impact Assessment phase of the Environmental Authorisation will commence. This is then expected to take about 12 months to complete. The team remains excited about the progress made on the project and continues to strategically align the project for development on the back of the high nickel and palladium prices.
Investment in Management Resource Solutions PLC (MRS)
On 1 March 2017, The Company acquired 7,550,000 shares of Management Resource Solutions Plc (“MRS”) from Scopn Pty Ltd. (“Scopn”) at a price of £0.05 per share. As consideration the Company issued to Scopn 25,166,666 new shares of the Company (each at an implied price of £0.045). On 10 April 2017 the Company subscribed for an additional 10,000,000 shares of MRS at a price of £0.05 per share for total cash consideration of £500,000 bringing the Company’s aggregate interest in MRS to 17,550,000 shares (representing 9.59% of its current issued share capital). The Group believed operational efficiencies can be realised to restore MRS’ profitability and the potential exists for significant revenue growth as a result of re-opening and/or expanding of mining operations in New South Wales, coupled with the continual demand for New South Wales coal from the Chinese, South Korean and Japanese markets.
On 5 May 2017, trading in MRS shares resumed on the AIM market of the London Stock Exchange.
On 04 September 2019, MRS requested a temporary suspension of trading on AIM of its shares with immediate effect following notification that an Australian firm providing insolvency solutions, stating that certain of their officers have been appointed as Voluntary Administrators of five of the Company’s operating subsidiaries pursuant to Section 436C of the Corporations Act 2001. On 19 September 2019, MRS announced that two of its main subsidiaries in Australia, Bachmann Plant Hire Pty Ltd (“BPH”) and MRS Subzero Pty Ltd (trading as MRS Services Group, “MRSSG”), were put in voluntary administration. Accordingly, the Group impaired the investment in MRS during the year ended 31 March 2019. Subsequently MRS announced on 23 December 2019 that the administrators have advised that at the concurrent meeting of creditors on 19 December 2019, it was resolved that the companies (Bachmann Plant Hire Pty Ltd, MRS Services Group Pty Ltd, MRS Property No1 Pty Ltd, Holdings (MRS) Pty Ltd and Management Resource Solutions Pty Ltd, the “companies”) will be wound up voluntarily and Jirsch Sutherland be appointed as Joint and Several Liquidators. The MRS is continuing to explore options for a solvent future for MRS in order to avoid liquidation and further announcements will be made by MRS as appropriate.
As at 30 September 2019, the Company had cash and cash equivalents of $78,000. The Company continues to manage its working capital position carefully and will need to raise further capital in the future.
URU continues to believe that the long-term fundamentals of the base minerals industries remain positive and will be working hard in the coming year to unlock the value of our projects for our shareholders. The Company maintains its core strategy to develop its nickel assets, as the Board anticipates growing demand and price appreciation for nickel in the short to medium term.
Non-executive Chairman 30 December 2019