Empire Metals Limited / LON: EEE / Sector: Natural Resources

18 September 2024

Empire Metals Limited

("Empire" or "the Company")

Interim Results

Empire Metals Limited (LON: EEE), the AIM-quoted resource exploration and development company, is pleased to announce its interim results for the six-month period ended 30 June 2024.

Highlights:

·     Unprecedented exploration results from the giant mineral system discovery at the Pitfield Project ("Pitfield") which hosts titanium mineralisation of globally significant size and grade, associated with a 40km by 8km by 5km deep magnetics anomaly.

·     100% success rate during 2024 reverse circulation drilling ("RC") and diamond core drilling campaigns with every hole, and every metre of every hole, intersecting titanium mineralisation from surface, or near surface, and with each and every hole terminating in titanium mineralisation that is open at depth.

·     Identification of higher TiO₂ grades within a high-purity anatase-rich weathered cap zone found at or near surface across Pitfield's two primary target areas, Cosgrove and Thomas.

·     Declaration of JORC-Code Exploration Target, covering the Thomas and Cosgrove mineral prospects, estimated to contain between 26.4 to 32.2 billion tonnes with a grade range of 4.5 to 5.5% TiO₂*.

·     Included within the total Exploration Target above is a subset that covers the weathered cap zone, which extends from surface to an average vertical depth of 30m to 40m and is estimated to contain between 4.0 to 4.9 billion tonnes with a grade range of 4.8 to 5.9% TiO₂*.

·     Confirmation of favourable mineralogy and metallurgy which is expected to lead to a relatively  straight forward processing flowsheet involving mineral separation and hydrometallurgical stages to produce a highly concentrated, high-value commercial end product.

·     Talented exploration and development team established in Western Australia and further bolstered post period end with the addition of highly experienced professionals to support the rapid development of Pitfield.

·     Completed a £3 million fundraise led  by a supportive Saudi Strategic Investor and the single largest shareholder of Empire.

·     Strong balance sheet of £2.4 million as at 17 September 2024 to support further exploration and development work into 2025.

*The potential quantity and grade of the Exploration Target is conceptual in nature. There has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource.

Shaun Bunn, Managing Director, commented: "Our focus remains firmly on the accelerated development of Pitfield, with huge leaps forward being made in terms of our understanding of the geology and mineralogy, the metallurgy and associated processing options, as well as the addition of multiple process testwork studies all aimed at unlocking this giant mineral deposit's value.  Our project has created a buzz throughout the mining and metals world, and our technical team and board are united in their ambition to keep this momentum up and make Pitfield a highly profitable commercial operation in as short timeframe as practicable.   

"In line with this, earlier this month I was delighted to report that diamond core drilling has recommenced at Pitfield, focusing specifically on better characterising the higher grade weathered cap zone, including thickness, grade and shape, as well as obtaining additional drill core samples for metallurgical test work.  This weathered cap zone presents an enormous opportunity for the Company to accelerate its plans to become the next fully integrated "mine to high-quality TiO₂ product" project.  Alongside this drilling campaign, which is expected to cost in the region of £150,000, our immediate work remains on confirming the process route, delineating a maiden Mineral Resource Estimate and defining high-value commercial end products.  The numerous workstreams that we have underway, supported by our healthy bank balance which presently stands at £2.4 million, will deliver frequent news flow over the coming weeks and months as we edge closer to commercialisation."

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014, as incorporated into UK law by the European Union (Withdrawal) Act 2018, until the release of this announcement.

For further information please visit www.empiremetals.co.uk  or contact:

CHAIRMAN'S STATEMENT

Our Pitfield Project has gone from strength to strength during the period, surpassing our own expectations on numerous occasions.  Word continues to spread about our giant mineral system discovery, and its potential to become a fully integrated, mining, processing and refining operation on an internationally significant scale. 

The primary objectives at the start of the year were to expand and characterize our discovery through additional exploration and begin the mineralogical studies and metallurgical test work required to accelerate the economic development of Pitfield.

In January 2024, we released details of the analytical lab results from the RC programme conducted at the end of 2023.  These results confirmed that Titanium Dioxide (TiO₂) mineralisation was present in virtually every drilled metre, starting from or near surface, in all of the 40 holes drilled, that all 40 drillholes ended in Titanium Dioxide  mineralisation, and that broad, higher-grade Titanium Dioxide mineralisation was identified in the sandstone-rich beds, which consistently return higher-grade Titanium Dioxide results than the adjacent conglomerate or siltstone-rich beds.  We could not have planned for a better outcome from our drilling.

Based on these findings, and with the geological model developed from our extensive exploration work since Q2 2023, the technical team's focus has now narrowed in on demonstrating Pitfield's viability for economic development through mineralogical studies, metallurgical test work and processing flow sheet design.

In March 2024, Empire demonstrated the favourable mineralogy and metallurgy in high-grade Titanium Dioxide  samples drilled at Pitfield; indicating potential for a relatively simple processing flowsheet and a highly concentrated, high-value commercial end product.  Importantly titanite, a calcium titanium silicate, was confirmed as the most abundant titanium-bearing mineral in the unweathered sandstone host rock, accounting for approximately 67% of the total contained Titanium Dioxide and approximately 20% of the potential Pitfield ore by mass.

Subsequent work, in the form of diamond core and RC drill chip logging, confirmed extensive weathering of the uppermost 40m of mineralised bedded sandstones, coincident with high Titanium Dioxide grades, forming a 'weathered cap'.  This weathered cap covers the extent of the 40km long titanium-rich mineral system and is a discrete and significant Titanium Dioxide discovery in its own right, containing abundant, highly concentrated Titanium Dioxide in the form of predominantly anatase and lesser rutile.  These twin sister minerals are both highly valuable Titanium Dioxide minerals that contain >95% Titanium Dioxide and are both important feedstocks for the titanium pigment and titanium metal markets. 

This naturally occurring anatase-rich deposit was created simply by the weathering of the underlying mineralised sandstones, through the disintegration of the host sandstone and complete alteration of the primary titanite (the principal titanium ore mineral in the unweathered bedrock) to the more concentrated and pure Titanium Dioxide minerals.  Additional lab results received post period end, confirmed that the weathered cap contains an abundance of high-purity anatase, containing up to 98.5% Titanium Dioxide and accounting for more than 5% of the mass of the near-surface weathered bedrock, being 4 to 5 times higher Titanium Dioxide concentration than that typically found in mineral sand deposits.

This weathered cap reinforces the potential for Empire to develop a fully integrated, single-site, mine to high quality Titanium Dioxide product project and it opens up the possibility of a new, staged development plan whereby the Company can look to develop this high-grade, high-value, easily mined, anatase-rich ore deposit located at surface, whilst it achieves development of an optimal processing flowsheet for the vast, underlying titanite-rich ore deposit.

A further milestone event for Empire was the announcement of a JORC Exploration Target, covering the Thomas and Cosgrove mineral prospects, which was estimated to be between 26.4 to 32.2 billion tonnes with a grade range of 4.5 to 5.5% Titanium Dioxide*.  Included within the total Exploration Target above is a subset that covers the weathered sandstone cap zone, which extends from surface to an average vertical depth of 30m to 40m and is estimated to contain between 4.0 to 4.9 billion tonnes with a grade range of 4.8 to 5.9% Titanium Dioxide*.  In the world of mining, size matters; with this Exploration Target, Empire has certainly demonstrated the potential for a project that has international importance.

It is also important to note that the total Exploration Target covers a combined area of approximately 59km², extends down to 150m vertical depth only, and has been constrained at a 2% Titanium Dioxide cut-off grade.  This means that the total Exploration Target covers less than 20% of the area of the overall 40km by 8km mapped mineral system at Pitfield.  Furthermore, given that geophysics and other supportive data indicates a 5km depth extent of the mineral system, this Exploration Target potentially only covers the top 3% of the vertical extent of mineralization.  With this in mind, the resource potential for Pitfield to continue growing is truly considerable and unmatched anywhere.

Earlier this month we announced that diamond drilling had commenced again and is expected to continue through October.  This is a relatively small but focused drilling campaign, expected to cost in the region of £150,000, and is targeting the shallow, near-surface, weathered sandstone-hosted, high-purity anatase-rich mineralisation in order to further define the geological characteristics of this weathered cap Titanium Dioxide deposit, including thickness, grade and shape, as well obtaining important drill core samples for metallurgical test work.

Given the intensive work programmes which are certainly merited at Pitfield, and the Company's confidence in its ultimate commercial value, the Board took the decision to rationalise its wider portfolio during the period and release certain non-core assets.  As a consequence of this, the Board decided not to extend the Gindalbie Tribute Agreement, which was due to expire on 24 February 2024, or complete the acquisition of the Stavely Project, which expired on 6 April 2024.

Corporate

Empire has built a team that can transform the Pitfield Project from an exploration discovery into an economic mine development project as its next stage of evolution, and ultimately a highly profitable commercial operation.

During the period, Empire announced the appointment of Narelle Marriott as the Company's Process Development Manager and that it had secured the services of two senior titanium industry consultants, Dr. Trevor Nicholson and Eugene Dardengo, who together have over 72 years of experience in the titanium processing and extraction industry.   The Company also appointed Carrie Pritchard as Environmental Manager and David Parker as Commercial Manager; both highly experienced professionals in the mining industry who will provide invaluable support to Empire as it advances Pitfield.  Post period end, the Company announced the appointment of a new Senior Geologist, Tsog Batsaikhan.  Tsog is an experienced resource and exploration geologist, with degrees in Geology, Metallurgy and Computer Science, and he will assist with the exploration drilling and help build both the geometallurgical and mineral resource estimate models.

The Company will continue to seek out experienced and talented professionals to join our small and motivated development team as we move closer towards commercialisation of Pitfield.

Financial Results

As an exploration and development group which has no revenue, we are reporting a loss for the 6 months ended 30 June 2024 of £1,389,318 (30 June 2023: loss of £1,037,128).

At the beginning of the period, on 22 January 2024, the Company announced that it had raised £3 million before expenses by way of a placing of 27,272,728 new ordinary shares of no par value in the capital of the Company at 11p to a strategic investor in Saudi Arabia and existing shareholders.

The Group's cash position as at 30 June 2024 was £3.14 million.  Cash at bank as at 17 September is £2.4 million.

Outlook

Empire has a defined project development path, spanning the next 12-18 months that is the critical next step towards commercialisation.  Our immediate plan remains focused on confirming the processing route, delineating a maiden Mineral Resource Estimate and defining on-site commercial products.  The drill programme that is currently underway at Pitfield is a key element of this plan as the recovered diamond core will be used to provide additional substantial quantities of high-grade, high-purity anatase-rich ore samples to accelerate the mineral processing test work that recently commenced on the weathered cap samples.

The rapid pace of development at Pitfield has been impressive, and the entire Empire team is committed to ensuring this momentum is sustained.  Each and every work programme that our team has carried out at Pitfield has not only generated successful results in a responsible, safe and efficient manner, but has clearly demonstrated and acted to further reveal the true global significance of this giant mineral system discovery and our ability as a company to quickly evolve to unlock and develop its potential into one of the world's great orebodies and commercial operations that will benefit all stakeholders, both local and afar.  I would like to take this opportunity to thank our shareholders and wider stakeholders once again for their support during the period, and I look forward to sharing further updates in the coming weeks and months. 

Neil O'Brien

Non-Executive Chairman

17 September 2024

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014, as incorporated into UK law by the European Union (Withdrawal) Act 2018, until the release of this announcement.

 CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONDENSED CONSOLIDATED BALANCE SHEET

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

NOTES TO THE INTERIM FINANCIAL STATEMENTS

1.    General Information

The principal activity of Empire Metals Limited ('the Company') and its subsidiaries (together 'the Group') is the exploration and development of precious and base metals. The Company's shares are quoted on the AIM Market of the London Stock Exchange. The Company is incorporated in the British Virgin Islands and domiciled in the United Kingdom. The Company was incorporated on 10 February 2010 under the name Gold Mining Company Limited. On 10 October 2016 the Company changed its name from Noricum Gold Limited to Georgian Mining Corporation and subsequently on 10 February 2020 changed its name from Georgian Mining Corporation to Empire Metals Limited.

The address of the Company's registered office is Craigmuir Chambers, PO Box 71, Road Town, Tortola BVI.

2.    Basis of Preparation

The condensed consolidated interim financial statements have been prepared in accordance with the requirements of the AIM Rules for Companies. As permitted, the Company has chosen not to adopt IAS 34 "Interim Financial Statements" in preparing this interim financial information. The condensed interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 December 2023, which have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union.

The interim financial information set out above does not constitute statutory accounts.  They have been prepared on a going concern basis in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRS) as adopted by the European Union. Statutory financial statements for the year ended 31 December 2023 were approved by the Board of Directors on 10 June 2024. The report of the auditors on those financial statements was unqualified.

Going concern

The Directors, having made appropriate enquiries, consider that adequate resources exist for the Group to continue in operational existence for the foreseeable future and that, therefore, it is appropriate to adopt the going concern basis in preparing the condensed interim financial statements for the period ended 30 June 2024.

The factors that were extant in the 31 December 2023 Annual Report are still relevant to this report and as such reference should be made to the going concern note and disclosures in the 2023 Annual Report.

Risks and uncertainties

The Board continuously assesses and monitors the key risks of the business. The key risks that could affect the Group's medium-term performance and the factors that mitigate those risks have not substantially changed from those set out in the Group's 31 December 2023 Annual Report and Financial Statements, a copy of which is available on the Group's website: https://www.empiremetals.co.uk. The key financial risks are liquidity risk, foreign exchange risk, credit risk, price risk and interest rate risk.

Critical accounting estimates

The preparation of condensed interim financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, income and expenses, and disclosure of contingent assets and liabilities at the end of the reporting period. Significant items subject to such estimates are set out in note 4 of the Group's 31 December 2023 Annual Report and Financial Statements. Actual amounts may differ from these estimates. The nature and amounts of such estimates have not changed significantly during the interim period.

3.    Accounting Policies

The same accounting policies, presentation and methods of computation have been followed in these condensed interim financial statements as were applied in the preparation of the Group's annual financial statements for the year ended 31 December 2023.

3.1   Changes in accounting policy and disclosures

(a) New and amended standards mandatory for the first time for the financial periods beginning on or after 1 January 2024.

The International Accounting Standards Board (IASB) issued various amendments and revisions to International Financial Reporting Standards and IFRIC interpretations. The amendments and revisions were applicable for the period ended 30 June 2024 but did not result in any material changes to the Financial Statements of the Group.

b) New standards, amendments and interpretations in issue but not yet effective or not yet endorsed and not early adopted.

There are a number of standards, amendments to standards, and interpretations which have been issued by the IASB that are effective in future accounting periods and which have not been adopted early. 

4.    Administrative expenses

5.    Dividends

No dividend has been declared or paid by the Company during the six months ended 30 June 2024 (2023: nil).

6.    Intangible Assets

The Exploration & Evaluation additions in the current period primarily relates to work performed at the Company's Pitfield project.

The Directors do not consider the asset to be impaired.

7.    Held for Sale Asset

The Company continue to work on a potential divestment of the Eclipse project and are actively engaged with a number of Australian companies operating in the gold mining sector to find a buyer. Management are committed to the sale of the Eclipse licence and given the recent increase in the gold price this asset has become significantly more attractive. The expectation is that this sale will be completed in the next 6 months.

8.    Trade and Other Payables

9.    Share capital and share premium

10.  Earnings per share

The calculation of the total basic loss per share of 0.230 pence (30 June 2023: 0.225 pence) is based on the loss attributable to equity owners of the parent company of £1,389,318 (30 June 2023: £1,037,128) and on the weighted average number of ordinary shares of 595,703,671 (30 June 2023: 461,625,336) in issue during the period.

Details of share options that could potentially dilute earnings per share in future periods are disclosed in the notes to the Group's Annual Report and Financial Statements for the year ended 31 December 2023.

8,500,000 options were granted during the period. The total number of options outstanding at 30 June 2024 is 72,900,000.

11.  Commitments

Commitments stated in the Group's Annual Financial Statements for the year ended 31 December 2023 remain.

12.  Events after the balance sheet date

There have been no events after the reporting date of a material nature.

13.  Approval of interim financial statements

The condensed interim financial statements were approved by the Board of Directors on 17 September 2024.