THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF REGULATION 2014/596/EU WHICH IS PART OF DOMESTIC UK LAW PURSUANT TO THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS (SI 2019/310) ("UK MAR"). UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION (AS DEFINED IN UK MAR) IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

 29 September 2023

MetalNRG plc

(the "Company" or "MetalNRG")

Interim Results to 30 June 2023

Operational Highlights

Key operational milestones achieved during the period:

In May 2023, the Company announced that  Phase 2 of the geo-chemical campaign at its Gold Ridge Gold mine property in Arizona had commenced, following the very encouraging results from phase 1 that paved a pathway to further exploration work which is now progressing.

The results from phase 1 showed the largest gold anomalies were found in historical areas mined for gold; however, a secondary zone of gold anomalies was found in an area previously unexplored and a new linear zone of gold mineralization was delineated in the Southern Precambrian block. We now await results from phase 2 which we anticipate being able to announce before the end of October 2023.

The Company's strategy, following results from phase 1 which confirmed MetalNRG's  belief that there is a real possibility of a larger un-discovered gold/base metal system at Gold Ridge; is to more fully understand the interconnectivity of the geological system which is likely to control the previously producing gold mines in the area and progress work towards a drilling program.

In June 2023, we confirmed that EQTEC Italia, our  joint investment with EQTEC Plc and two family offices in a waste to energy plant in Italy, located in Gallina, near Castiglione d'Orcia, Tuscany, Italy, had completed handover protocols to EQTEC Italia and was transferring plant operations to EQTEC Italia MDC srl ("Italia MDC").

This announcement followed the Company's March 2023 announcement that the Italia MDC was operational, having commenced export of electricity to the national power grid on 8 March 2023 and having produced biochar and commenced gasification in January 2023. 

A further announcement on the partnership with EQTEC was made on 4 September 2023 and stated that EQTEC Italia have agreed a loan facility of €2.9 million to refinance its Italian  waste to energy plant, located in Gallina, near Castiglione d'Orcia, Tuscany, Italy.

The term of the Facility is 48 months, with an annual interest rate of 2.5% over the six-month Euro Interbank Offered Rate (Euribor), which currently makes the interest rate c. 6.5%. It is offered by Banca del Fucino S.p.A., an historic private banking group based in Rome. The loan is guaranteed up to 80% by MedioCredito Centrale S.p.A., which is controlled by the Italian Ministry of Economy. Release of funds through the Facility is subject to the Plant's achievement of targeted performance criteria set by the Lender.

Corporate Development and Outlook

Having addressed most of the Company's legal issues, the only two legal processes outstanding are a claim brought by the Company against Mr Rocco and a claim with the Employment Tribunal brought by Mr Rocco against the Company.  The Executive backed by the Board is confident that it can now concentrate on operational matters and drive the Company forward.

On 4 September 2023, the Company announced that a strategic business review, which aims to capitalize on the Company's anticipation of a potential bull-market cycle in the metals & mining sector, was being completed, a further announcement was made on 28 September 2023.

The strategic business review has now been concluded and the Board has confirmed its decision to concentrate growth and value creation efforts on the mining sector. The initial focus will include gold and copper projects, alongside other precious and strategic metals, which face high demand due to global macroeconomic, energy transition, and technology trends.

As part of the review, we identified a number of potential reverse take-over targets which are being evaluated to determine the most suitable value acceleration for the benefit of its shareholders.

Going forward MetalNRG will be driven to build a global natural resources business, delivering industry leading returns and sustainable dividends to shareholders.

The Company will create shareholder value through indirect and direct investments targeting outright acquisitions, and majority or minority interests, in three types of projects:

1.    Late-stage development projects, that will be in production within 12 to 18 months and offer additional upside post-production

2.    Projects that are currently in production and offer substantial exploration and development upside

3.    Projects that offer blue sky growth opportunities that could become company-making mines of the future.

The Company appointed Chris Chadwick to the Board and Chris will be instrumental in the implementation process. Chris is a highly experienced mine operator with a demonstrated track record of success in shareholder value creation. Chris was previously the Chief Executive Officer of Gold One International and director of Sibanye-Stillwater, one of the world's largest primary producers of platinum, palladium, and rhodium and a top-tier gold producer. He is also the co-founder and CEO of African Gold Acquisition Corp. (NYSE: AGAC), a New York Stock Exchange-listed special purpose acquisition company, from which he will resign in due course to focus his experience and capabilities on MetalNRG. Chris has joined the MetalNRG Board as Executive Director and is now working alongside Rolf Gerritsen also Executive Director.

We also announced additional strengthening of the management team, with the appointment of Andrew Sekandi as a Risk & Compliance officer. Andrew brings 15+ years' experience advising global mining firms on risk, compliance, due diligence, and market entry. He has worked for global consulting firms KPMG, Kroll, and Control Risks Group, and is a Namibian trained (non-practising) lawyer.

Scott Gilbert joined as the Head of Operations. Scott brings 20+ years' experience as an operations, commercial and marketing executive, with a focus on the African mining and natural resources sector. He is currently the Financial and Commercial Operations director of the Middelvlei gold project in South Africa. Finally, Damon Chadwick has also joined the team in a senior project management role.  He will also take over the smooth running of all, I.T., marketing and office support functions. With the team in place, a clear direction to follow we now move full steam ahead into the implementation of our plans and  the Company will be making further announcements as we make progress.

The Company will continue to seek additional projects that meet its set investment criteria. The specific intention is to seek opportunities where we can deliver early positive cash flows from an asset and, where the cash generated from the operations allows us to explore and develop those projects further.

As a result of the Company's strategic review, our partnership with EQTEC and our investment in EQTEC Italia is now considered non-core and the Company will be seeking the most suitable exit from this investment and we will keep the market informed of our progress on this.

The second part of the year presents the Company with enormous opportunities and further announcements of the Company's plans will be made in the coming months.

Legal Process

During the first half of last year, MetalNRG focused on addressing its legal challenges. The year started with certain shareholders requesting a General Meeting to remove certain board members and replace them with their own nominees. At the General Meeting, held in January 2023, the Resolutions set out in the Notice of General Meeting were not passed by shareholders.

The legal process continued and in summary the Corporate Defendants lost their case in the first instance and had paid £450,000 of the £1.02 million claimed to the Company.  The Corporate Defendants had then sought the right to appeal the summary judgement issued previously in respect of the £574,000 balance (having already had such permission denied on the papers). The Corporate Defendants also appealed a portion of the prior costs award made in the Company's favour. The Court found in favour of the Company in both respects; refusing the Corporate Defendants leave to appeal and denying their substantive appeal on costs. The Corporate Defendants have now been ordered to pay the Company's costs of these failed appeals.

April saw another court case come to a successful conclusion for the Company when we announced the outcome of the appeal brought by Mr Rocco against the Company in Scotland.

We believe that the most relevant cases have been concluded in our favour and that we can move on with developing the business, while still managing the outstanding legal processes in the UK High Court and the Employment Tribunal in Scotland.

Financial Review

MetalNRG reported an unaudited operating loss for the six months period ended 30 June 2023 of £509,176 which includes £205,579 in legal and professional fees relating to the BritNRG Ltd and related claims (six months period to 30 June 2022: an unaudited operating loss of £999,949). Basic and diluted loss per share for the period was 0.04p and 0.04p respectively (six months period to 30 June 2202: Basic loss per share was 0.09p and diluted loss per share was 0.09p).

Responsibility Statement

We confirm that to the best of our knowledge:

·      The interim financial statements have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting, as adopted by the EU;

·      The interim financial statements give a true and fair view of the assets, liabilities, financial position and loss of the Group;

·      The interim report includes a fair review of the information required by DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the interim financial information, and a description of the principal risks and uncertainties for the remaining six months of the year; and

·      The interim financial information includes a fair review of the information required by DTR 4.2.8R of the Disclosure and Transparency Rules, being the information required on related party transactions.

Consolidated Statement of Profit or Loss

Consolidated Statement of Comprehensive Income

Consolidated Statement of Financial Position

Consolidated Statement of Cash Flows

Consolidated Statement of Changes in Equity

Half-yearly report notes

1. Half-yearly report

This interim report was approved by the Board of Directors on 28 September 2023.

The information relating to the six months periods to 30 June 2023 and 30 June 2022 are unaudited.

The information relating to the year ended 31 December 2022 is extracted from the audited financial statements of the Company which have been filed at Companies House and on which the auditors issued an unqualified audit report. The condensed interim financial statements have been reviewed by the Company's auditor.

2. Basis of accounting

The interim financial statements have been prepared using accounting policies and practices that are consistent with those adopted in the statutory financial statements for the year ended 31 December 2022, although the information does not constitute statutory financial statements within the meaning of the Companies Act 2006. The interim financial statements have been prepared under the historical cost convention.

These interim financial statements are prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union and the Disclosure and Transparency Rules of the UK Financial Conduct Authority.

This interim report does not include all the notes of the type normally included in an annual financial report. Accordingly, this interim report should be read in conjunction with the annual report for the year ended 31 December 2022, which have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. 

The Company will report again for the full year to 31 December 2023.

Going concern

The Company's day to day financing is from its available cash resources.

The Company is confident of raising funds to enable it to continue to develop its targeted investments and exploration campaigns across its key projects over the next 12-18 months and the Directors are confident that adequate funding can be raised as required to meet the Company's current and future liabilities.

For the reasons outlined above, the Directors are satisfied that the Company will be able to meet its current and future liabilities, and continue trading, for the foreseeable future and, in any event, for a period of not less than twelve months from the date of approving this interim report. The preparation of these interim financial statements on a going concern basis is therefore considered to remain appropriate.

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 at the end of the reporting period. Significant items subject to such estimates are set out in the Company's 2022 Annual Report and Financial Statements. The nature and amounts of such estimates have not changed significantly during the interim period.

Intangible assets

Exploration and development costs

All costs associated with mineral exploration and investments are capitalised on a project-by-project basis, pending determination of the feasibility of the project. Costs incurred include appropriate technical and administrative expenses but not general overheads. If an exploration project is successful, the related expenditures will be transferred to mining assets and amortised over the estimated life of economically recoverable reserves on a unit of production basis.

Intangible assets

Exploration and development costs

Where a licence is relinquished or a project abandoned, the related costs are written off in the period in which the event occurs. Where the Group maintains an interest in a project, but the value of the project is considered to be impaired, a provision against the relevant capitalised costs will be raised.

The recoverability of all exploration and development costs is dependent upon the discovery of economically recoverable reserves, the ability of the Group to obtain necessary financing to complete the development of reserves and future profitable production or proceeds from the disposition thereof.

3. Earnings per share

4. Events after the reporting period

There were no reportable events after the reporting period other than those highlighted in the 'Financial Review'. 

The Condensed interim financial statements were approved by the Board of Directors on 28 September 2023.

For the purposes of UK Mar, the person responsible for arranging for the release of this announcement on behalf of the Company is Rolf Gerritsen, Chief Executive Officer.

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