Quarterly Activities Report September 2023
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- In July 2023, GreenX entered into an Option Agreement with Greenfields Exploration Limited (Greenfields) to acquire up to 100% of the Eleonore North gold project (Eleonore North) in eastern Greenland.
o Option to earn 100% of the Project vests upon GreenX spending A$600,000 on exploration on Eleonore North within 12 months and can be exercised in return for a 1.5% Net Smelter Royalty plus A$250,000 payable in cash and A$250,000 payable in either cash or GreenX shares at GreenX's election.
o Transaction provides GreenX with gold exposure in Greenland and complements GreenX's existing exploration prospect in Greenland, the Arctic Rift Copper project (ARC).
- During the quarter, GreenX completed a Placing to issue 5.2 million new ordinary shares to raise gross proceeds of approximately A$4.2 million (~£2.1 million) from new and existing investors (Placing). Proceeds from the Placing will be used for exploration activities at the Company's projects in Greenland and general corporate activities.
o Damages of up to £737 million (A$1.3 billion / PLN4.0 billion) have been claimed including the assessed value of GreenX's lost profits and damages related to both the Jan Karski and Debiensko projects, and accrued interest related to any damages
- Cash balance as at 30 September 2023 was A$10.7 million.
GreenX Metals Limited (ASX:GRX, LSE:GRX) (GreenX or the Company) is pleased to present its Quarterly Activities Report for the period during and subsequent to 30 September 2023.
eleonore north gold project option acquisition
In July 2023, GreenX entered into an Option Agreement (Agreement) with Greenfields to acquire up to 100% of the Eleonore North gold project in eastern Greenland.
Eleonore North has the potential to host a "reduced intrusion-related gold system" (RIRGS), analogous to large bulk-tonnage deposit types found in Canada including Donlin Creek, Fort Knox and Dublin Gulch.
Gold mineralisation documented at the high-priority Noa Pluton prospect within Eleonore North.
- Historical sampling includes 4 m chip sample grading 1.93 g/t Au and 1.9% Sb (refer to Appendix 1 of the Company's announcement on 10 July 2023).
Eleonore North license area contains other gold targets as well as copper, antimony and tungsten prospects. At Holmesø there is copper and antimony mineralisation outcropping at surface. Historical mapping and sampling in the 1970s at Holmesø show a prospective horizon between 15 m and 20 m thick, with per cent level grades for both metals.
Option to earn 100% of the project vests upon GreenX spending A$600,000 on exploration on Eleonore North within 12 months and can be exercised in return for a 1.5% Net Smelter Royalty plus A$250,000 payable in cash and A$250,000 payable in either cash or GreenX shares at GreenX's election.
Transaction provides GreenX with gold exposure in Greenland and complements GreenX's existing exploration prospect in Greenland, the ARC project. There are significant synergies with regards to personnel, logistics and equipment in having multiple exploration projects in Greenland. Field works for the 2023 field season have already been completed at Eleonore North, with follow-on exploration field activities for the ARC project currently being planned.
The primary target in Eleonore North is the Noa Pluton, followed by the Holmesø prospect and its source intrusion. The Noa Veins provide a near-term drill target, however, the Company's 2023 field work was focussed on determining the depth of the intrusion with greater precision using a passive seismic survey. Once analysed, this information will validate the magnetic interpretation, provide more certainty for a future drilling program, and help identify the size of the intrusion within the well-defined hornfels.
ARCTIC RIFT COPPER PROJECT
The ARC project is an exploration joint venture between GreenX and Greenfields. GreenX can earn-in upto 80% of ARC by spending A$10 million by October 2026. ARC is targeting large scale copper in multiple settings across a 5,774 km2 Special Exploration Licence in eastern North Greenland. The area has been historically underexplored yet is prospective for copper, forming part of the newly identified Kiffaanngissuseq metallogenic province.
Analysis of this information is underway and will be key to future planned work programs.
ShARE PLACING
In July 2023, the Company announced that it had successfully completed a Placing of 5.2 million new ordinary shares at a price of A$0.80 (41 pence) per share for gross proceeds of approximately A$4.2 million (~£2.1 million) from new and existing investors.
The net proceeds from the Placing will be used for exploration activities at the company's projects in Greenland and will help ensure that GreenX retains a strong balance sheet position.
DISPUTE WITH POLISH GOVERNMENT
Details of the Claim
The evidentiary hearing phase of the arbitration proceedings has now been completed in front of the Arbitral Tribunal. With completion of the hearing, the Arbitral Tribunal will render an Award in due course. There is no specified date for an Award to be rendered. The Company's claims for damages against Poland are in the amount of up to £737 million (A$1.3 billion/PLN4.0 billion), which includes a revised assessment of the value of GreenX's lost profits and damages related to both the Jan Karski and Debiensko projects, and accrued interest related to any damages. The Claim for damages has been assessed by independent external quantum experts appointed by GreenX specifically for the purposes of the Claim.
In July 2020, the Company announced it had executed the LFA for US$12.3 million with LCM. US$10.4 million of the facility has been drawn down to cover legal, tribunal and external expert costs as well as defined operating expenses associated with the Claim. The Company does not anticipate further material drawdowns now that funded costs relating to the claims have been dispersed. The LFA is a limited recourse loan with LCM that is on a "no win - no fee" basis.
CORPORATE
Financial Position
Following the successful completion of the Placing, GreenX had cash of A$10.7m as at 30 September 2023.
APPENDIX 1: TENEMENT INFORMATION
As at 30 September 2023, the Company has an interest in the following tenements:
| Location | Tenement | Percentage Interest | Status | Tenement Type |
|---|---|---|---|---|
| Greenland | Arctic Rift Copper Project (Licence No. 2021-07 MEL-S) | - 1 | Granted | Exploration Licence |
| Greenland | Eleonore North gold project (Licence No's 2018-19 and 2023-39) | - 2 | Granted | Exploration Licence |
| Jan Karski, Poland | Jan Karski Mine Plan Area (K-4-5, K6-7, K-8 and K-9) 2 | - 3 | In dispute 3 | Exclusive Right to apply for a mining concession 3 |
| Debiensko, Poland | Debiensko 1 | - 3 | In dispute 3 | Mining 3 |
Notes:
1 In October 2021, the Company announced that it had entered into an Earn-In Agreement (EIA) with Greenfields to acquire an interest of up to 80% in ARC. As at the date of this announcement, the Company held no beneficial interest in ARC, other than through the EIA.
2 In July 2023, the Company announced that it had entered into an Option Agreement with Greenfields to acquire an interest of up to 100% in Eleonore North. As at the date of this announcement, the Company held no beneficial interest in Eleonore North, other than through the Option Agreement.
Appendix 2: Related Party Payments
During the quarter ended 30 September 2023, the Company made payments of A$241,000 to related parties and their associates. These payments relate to existing remuneration arrangements (director fees, consulting fees and superannuation of A$166,000 and the provision of a serviced office and company secretarial and administration services of A$75,000).
Appendix 3: Exploration and Mining Expenditure
During the quarter ended 30 September 2023, the Company made the following payments in relation to exploration activities:
| Activity | $000 |
| Greenland (Eleonore North and ARC) | |
| Project Management | 173 |
| Exploration program, including sampling | 152 |
| Transport costs (including equipment and fuel) | 429 |
| Personnel costs | 96 |
| Other (field supplies, equipment, fuel, satellite imagery, etc) | 192 |
| Total as reported in the Appendix 5B (item 2.1(d)) | 1,042 |
Appendix 5B
Mining exploration entity or oil and gas exploration entity
quarterly cash flow report
Name of entity
GreenX Metals Limited
| ABN | Quarter ended ("current quarter") | ||
| 23 008 677 852 | 30 September 2023 | ||
| Consolidated statement of cash flows | Current quarter $A'000 | Year to date (3 months) $A'000 | |
| 1. | Cash flows from operating activities | - | - |
| 1.1 | Receipts from customers | ||
| 1.2 | Payments for | - | - |
| (a) exploration & evaluation | |||
| (b) development | - | - | |
| (c) production | - | - | |
| (d) staff costs | (375)* | (375)* | |
| (e) administration and corporate costs | (363) | (363) | |
| 1.3 | Dividends received (see note 3) | - | - |
| 1.4 | Interest received | 93 | 93 |
| 1.5 | Interest and other costs of finance paid | - | - |
| 1.6 | Income taxes paid | - | - |
| 1.7 | Government grants and tax incentives | - | - |
| 1.8 | Other (provide details if material) (a) Business Development (b) Property rental and gas sales (c) Arbitration related expenses (d) Receipt of arbitration funding (e) Occupancy | (114) 6 - - (194) | (114) 6 - - (194) |
| 1.9 | Net cash from / (used in) operating activities | (947) | (947) |
*includes legal and permitting expenditure and payments made to consultants (Debiensko technical statutory operations personnel).
| 2. | Cash flows from investing activities | - | - |
| 2.1 | Payments to acquire or for: | ||
| (a) Entities | |||
| (b) Tenements | - | - | |
| (c) property, plant and equipment | - | - | |
| (d) exploration & evaluation | (1,042) | (1,042) | |
| (e) investments | - | - | |
| (f) other non-current assets | - | - | |
| 2.2 | Proceeds from the disposal of: | - | - |
| (a) entities | |||
| (b) tenements | - | - | |
| (c) property, plant and equipment | - | - | |
| (d) investments | - | - | |
| (e) other non-current assets | - | - | |
| 2.3 | Cash flows from loans to other entities | - | - |
| 2.4 | Dividends received (see note 3) | - | - |
| 2.5 | Other (provide details if material) | - | - |
| 2.6 | Net cash from / (used in) investing activities | (1,042) | (1,042) |
| 3. | Cash flows from financing activities | 4,164 | 4,164 |
| 3.1 | Proceeds from issues of equity securities (excluding convertible debt securities) | ||
| 3.2 | Proceeds from issue of convertible debt securities | - | - |
| 3.3 | Proceeds from exercise of options | - | - |
| 3.4 | Transaction costs related to issues of equity securities or convertible debt securities | (136) | (136) |
| 3.5 | Proceeds from borrowings | - | - |
| 3.6 | Repayment of borrowings | - | - |
| 3.7 | Transaction costs related to loans and borrowings | - | - |
| 3.8 | Dividends paid | - | - |
| 3.9 | Other (provide details if material) | - | - |
| 3.10 | Net cash from / (used in) financing activities | 4,028 | 4,028 |
| 4. | Net increase / (decrease) in cash and cash equivalents for the period | ||
| 4.1 | Cash and cash equivalents at beginning of period | 8,674 | 8,674 |
| 4.2 | Net cash from / (used in) operating activities (item 1.9 above) | (947) | (947) |
| 4.3 | Net cash from / (used in) investing activities (item 2.6 above) | (1,042) | (1,042) |
| 4.4 | Net cash from / (used in) financing activities (item 3.10 above) | 4,028 | 4,028 |
| 4.5 | Effect of movement in exchange rates on cash held | 2 | 2 |
| 4.6 | Cash and cash equivalents at end of period | 10,715 | 10,715 |
| 5. | Reconciliation of cash and cash equivalents at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts | Current quarter $A'000 | Previous quarter $A'000 |
| 5.1 | Bank balances | 2,715 | 4,174 |
| 5.2 | Call deposits | 8,000 | 4,500 |
| 5.3 | Bank overdrafts | - | - |
| 5.4 | Other (provide details) | - | - |
| 5.5 | Cash and cash equivalents at end of quarter (should equal item 4.6 above) | 10,715 | 8,674 |
| 6. | Payments to related parties of the entity and their associates | Current quarter $A'000 | |
| 6.1 | Aggregate amount of payments to related parties and their associates included in item 1 | (241) | |
| 6.2 | Aggregate amount of payments to related parties and their associates included in item 2 | - | |
| 7. | Financing facilities Note: the term "facility' includes all forms of financing arrangements available to the entity. Add notes as necessary for an understanding of the sources of finance available to the entity. | Total facility amount at quarter end $A'000 | Amount drawn at quarter end $A'000 |
| 7.1 | Loan facilities | 19,101* | 16,204 |
| 7.2 | Credit standby arrangements | - | - |
| 7.3 | Other (please specify) | - | - |
| 7.4 | Total financing facilities | 19,101* | 16,204 |
| 7.5 | Unused financing facilities available at quarter end | 2,897 | |
On 30 June 2020, the Company executed a Litigation Funding Agreement ( LFA ) for US$12.3 million (*now worth A$19.1 million with the movement of the A$ compared to the $US) with LCM Funding UK Limited a subsidiary of Litigation Capital Management Limited ( LCM ), to pursue damages claims in relation to the investment dispute between GreenX and the Polish Government that has arisen out of certain measures taken by Poland in breach of the Energy Charter Treaty and the Australia - Poland Bilateral Investment Treaty ( BIT ). LCM will provide up to US$12.3million (~A$19.1 million), denominated in US$, in limited recourse financing which is repayable to LCM in the event of a successful Claim or settlement of the Dispute that results in the recovery of any monies. If there is no settlement or award, then LCM is not entitled to any repayment of the financing facility. In return for providing the financing facility, LCM shall be entitled to receive repayment of any funds drawn plus an amount equal to between two and five times the total of any funds drawn from the funding facility during the first five years, depending on the time frame over which funds have remained drawn, and then a 30% interest rate after the fifth year until receipt of damages payments.
| 8. | Estimated cash available for future operating activities | $A'000 |
| 8.1 | Net cash from / (used in) operating activities (item 1.9) | (947) |
| 8.2 | (Payments for exploration & evaluation classified as investing activities) (item 2.1(d)) | (1,042) |
| 8.3 | Total relevant outgoings (item 8.1 + item 8.2) | (1,989) |
| 8.4 | Cash and cash equivalents at quarter end (item 4.6) | 10,715 |
| 8.5 | Unused finance facilities available at quarter end (item 7.5) | 2,897 |
| 8.6 | Total available funding (item 8.4 + item 8.5) | 13,612 |
| 8.7 | Estimated quarters of funding available (item 8.6 divided by item 8.3) | 7 |
| 8.8 | If item 8.7 is less than 2 quarters, please provide answers to the following questions: |
Answer: Not applicable
Answer: Not applicable
Answer: Not applicable
Compliance statement
2 This statement gives a true and fair view of the matters disclosed.
Date: 13 October 2023
Authorised by: Company Secretary
(Name of body or officer authorising release - see note 4)
Notes
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