BWA Group Plc - Second Interim Financial Results for the Six Months to 31 December 2022

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF REGULATION 11 OF THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS 2019/310.

28 June 2023

BWA Group PLC

 (“BWA” or the “Company”)    

Second Interim Financial Results for the Six Months to 31 December 2022

BWA Group plc [AQSE: BWAP], which has mineral exploration licences in both Cameroon and Canada at various stages of development and is quoted on London’s AQSE Growth Market, announces its unaudited financial results for the second interim period of six months to 31 December 2022, following the announcement of the extension of its financial reporting period to 30 June made on 19 June 2023.  The Company announced its unaudited financial results for the first interim period of the six months to 30 June 2022 on 29 September 2022, and expects to publish its audited financial results and report for the 18 months to 30 June 2023 during 4Q2023.

A version of this announcement including maps and photographs can be viewed on the Company’s website, http://www.bwagroupplc.com/bwa-announcements.html

Chairman’s Statement

The Company has continued to invest in the rutile sands project in Cameroon through our 90 per cent owned subsidiary, BWA Resources (UK) Limited (“BWAR”), and its two Cameroon domiciled subsidiaries, as announcements over the last 12 months attest. Whereas activity in the other 100 per cent subsidiary company in Canada, Kings of the North Corporation Inc. (“KOTN”), has been limited to maintaining the licences in the two remaining claim areas, Winterhouse and Isoukustouc, in the registered ownership of KOTN, with the Canadian government mining registry and ensuring that all licence fees are paid and the claims in good order.

Significantly, since the pervious First Interim Results announcement, BWAR through its two Cameroon subsidiaries has been awarded three additional licences for heavy mineral sands, primarily rutile, taking the total to five licences, totalling 1,269 sq. kms, and now hold licences to: Nkoteng 1 Nkoteng 2, Dehane 1, Dehane 2, and Dehane 3. There are two additional permits currently applied for: Songloulou 1 and Songloulou 2, totalling a further 1,000 sq. kms.

BWAR has carried out further exploration work on the two claims at Nkoteng and Dehane to which it has been granted exploration rights.  The initial results from the first surveys have been announced to the market and are published on the Company website, www.bwagroupplc.com/announcements.  

Due to the encouraging results from the original wide spaced reconnaissance pitting work, follow up closer-spaced mechanised auger drilling was carried out in Cameroon in the spring, primarily on Nkoteng 1 licence, testing an approximate 5km long target area for the potential development of initial heavy mineral resource estimates. The results of granulometric and size fractioning studies completed by BWA on 20 selected samples from this exploration work were published in late June 2022, the highlights of which are:

• Rutile is most abundant mineral, especially concentrated within the sand size fraction -600 to +180 µm.
• Major ilmenite was also observed.
• Minor HMS also observed in -150 µm size fraction.
• Minor kyanite observed in weathered clays.
• Plastic clays contain elevated ilmenite in select areas.
• Implications of the granulometric studies are not yet fully recognised, although suggest distinctive mineralised size fractions and preferred host strata.

Duplicate portions of samples used in granulometric studies, have been selected and shipped for submission to a specialist laboratory in Germany for heavy mineral separation and mineral composition test work, with results expected Q2 2023.

On 6 April 2023, BWA announced the results of its reconnaissance site visit on its recently approved Dehane 2 rutile sands Licence, located in Central Cameroon (“Dehane 2” or the “Dehane Project”).

The Dehane 2 licence covers an area of 54 km2 and includes an additional 14 km of strike length of the Nyong river system, an area known to be prospective for Ilmenite, Rutile, Zircon and Kyanite heavy mineral sand mineralisation. Moreover, the licence covers some 20 km of the mouth of the Nyong River and estuarine environment as it empties into the Gulf of Guinea. A river mouth can lead to a change in flow conditions that can cause the fluvial system to deposit any supplementary sediment including heavy mineral sand (HMS) it is carrying, where potentially economic accumulations of HMS are found within the lowest energy zone on the beach, the swash zone.

The field party observed coarse and medium grained rutile, ilmenite and kyanite in numerous thin continuous horizons, stacked upon each other throughout the riverbanks and beach sands.

The prolific amount of heavy sand mineralisation along the riverbeds and towards the mouth of the Nyong River was very noticeable and provides encouraging evidence for the potentially economic accumulations of heavy mineral sands within this marine/estuarine environment and certainly justifies the licence acquisition and further follow up exploration.

On 27 April 2023 BWA announced positive results from its Dehane 2 licence area.

The auger sample (DH2_001) from the RNS of 6 April 2023 underwent granulometric testwork involving sieve sized fraction studies and panned concentration, completed by BWA using the facilities at Afrigeolabs, Yaoundé, Cameroon. From field observations, sand is logged for the entirety of the 1.90 m deep auger hole. The particle size analysis is presented in the table below and shows that this sample is composed of six particle size fractions. Some 93% of the grains have a size between 180 and 600 microns, defined by Wentworth (1922) as medium to fine sand.

Mineralogically, rutile is the dominant heavy mineral in the coarse fractions and is in most of the fractions above 1000 microns, 600 microns and 355 microns, i.e., up to approximately 40% of the sieved sample. Kyanite crystals are also visible in this grain size range. In the (+) 180-micron fractions, ilmenite becomes the dominant mineral although rutile is still clearly visible, and in the smaller fractions (+ 150 microns and + 75 microns) ilmenite is predominant.

Using a high-resolution camera, a yellow mineral in this grain size range was also observed, which could potentially be monazite. However, further studies and analytical testwork is required to confirm the presence of monazite.

Highlights:

• Rutile most dominant (heavy) mineral in fractions above 1000 microns, 600 microns and 355 microns, i.e., up to approximately 40% of the sample.
• Ilmenite and rutile observed in smaller fractions.
• Implications of the granulometric studies are as yet not fully recognised, although are encouraging and certainly justifies the licence acquisition and follow up exploration and testwork.
• Abundance of heavy minerals observed in panned concentrates (presented in table below).
• Possible monazite observed and is found (like rutile) in the fractions above 1000, 600 and 355 µm. Further studies and analytical testwork is required to verify the observations.

During the period covered by these Interim results, BWA has raised an additional £74,000 in the form of Convertible Loan Notes and Short-Term Loans, to continue its Cameroon exploration program. Also, BWA has continued also to realise its shareholding in St-Georges Eco-Mining Corp (“St Georges”) from KOTN and the proceeds from realising part of its portfolio of investments has provided funds for the development of activities in Canada, Cameroon and the UK. 

In Canada we continue to consult with our legal advisers regarding potential claims against St Georges, its directors, staff, and others and it is noted that at the end of these Interims period, SX has subsequently commenced a related action against BWA in the UK for performance against BWA to enforce a conversion notice of Convertible loan Notes into BWA ordinary shares.  BWA is defending the action on the grounds that these securities are the subject of its action against SX in Canada and the SX litigation will fall away on settlement of the Canadian claim. Notwithstanding that, BWA and SX are continuing with discussions between directors and their respective solicitors.

After the period under review, BWA has been granted 2 additional HMS licences in Cameroon, designated as Nkoteng 2 and Dehane 2, virtually doubling its total exploration area from 721 Sq. Km to 1,269 Sq. Km.  It is the Board’s intention to seek the necessary funding to undertake field exploration and complete an initial JORC Mineral Resource Estimate and Preliminary Economic Assessment on theDehane 1 permit, by end-Q1 2024, and commence reconnaissance exploration work on the newly granted licences.

In view of the granting of the two additional licence areas the board has released provisions totalling £270,000 made against the investment in Cameroon at the last year end.

The Board continues to show their confidence in the future direction of the Company by capitalising one-half of their fees into new Ordinary Shares.

Richard Battersby, who has been Chairman of BWA for many years, indicated to the Board that he wished to retire and as a result, stood down as Chairman on 29 July 2022 and retired from the Board on 1 December 2022. The Board takes this opportunity to thank him for all his efforts on the Group’s behalf and wishes him well in his retirement. I have been appointed Interim Chairman, pending further changes to the Board in due course.

James Butterfield, Interim Chairman

The Board are responsible for the contents of this announcement.

Ends -

For further information: 

INCOME STATEMENT

All amounts relate to continuing activities.

STATEMENT OF OTHER COMPREHENSIVE INCOME

BALANCE SHEET

CASH FLOW STATEMENT

Notes to the Financial Statements

1. Status of these accounts

The interim accounts for the period from 1 July 2022 to 31 December 2022 are unaudited. The financial information set out in this statement does not constitute statutory accounts within the meaning of the Companies Act 2006.

2. Earnings per ordinary share

Basic and diluted earnings per share figures are based on the following profits / (losses) and numbers of shares:

Share capital

5. Valuation of Investments

The whole of the Company's investment in Cameroon, including loans made to BWA Resources (UK) Limited and BWA Resources (Cameroon) Limited, is carried in the balance sheet at £1,097,020. The Company's investment in Kings of the North Corp (‘KOTN’) is valued at £1,418,000. The valuation of unlisted investments requires the Directors to make judgements, estimates and assumptions that are believed to be reasonable under the circumstances, but which affect the reported fair value of those investments. The recoverability of the investments in Cameroon and KOTN is dependent on the future profitability of the underlying businesses. The Directors have reviewed the current position and, after taking into account a number of factors, believe that the valuations at 31 December 2022 remain appropriate.

6. Related Party Transactions

During the second interim period, the Company issued the following shares in part settlement of director fees.

In addition, the Company was advanced the following amounts on a short-term basis during the second interim period by its directors and a subsidiary director.