Alba Mineral Resources (ALBA) reported interim results for the 6 months ended 31 May 2023, detailing progress across its portfolio.
Alba's wholly-owned Welsh projects Clogau-St David's, Gwynfynydd and Dolgellau saw significant development during the period. Efforts were directed towards obtaining ecological permits for dewatering and exploring the Lower Llechfraith Workings at Clogau in north Wales. These workings possess favourable geological traits for high-grade gold mineralisation, with historical evidence suggesting significant untapped potential.
Access to the lower workings was hindered by flooding, necessitating a dewatering program. Alba secured ecological permits in July 2023, allowing dewatering to begin. Safety works at different levels have now completed, and there are ongoing efforts to address regulatory requirements. Severe rainfall temporarily halted progress, leading to requests for permit extensions. Once dewatered adequately, further exploration and sampling activities are expected.
Alba is also progressing toward submitting planning applications for exploration of the waste tip at Clogau. Additionally, plans for aerial geophysical surveys across the wider Dolgellau exploration project have faced delays but are set to commence in September 2023.
GreenRoc Mining
Alba may be best known for being the majority owner of GreenRoc Mining whose flagship Amitsoq asset in Greenland has been confirmed as one of the highest-grade graphite deposits in the world. Amitsoq has a resource estimate of 23.05 Mt at an average grade of 20.41% graphite, following January's 3x resource increase.
Post-period, fundraising by GreenRoc diluted Alba's stake to 42.97%. While no longer majority shareholder, Alba is still the largest shareholder by a good distance and remains heavily involved in the strategic direction and development of the company. As a result of the dilution in shareholding, GreenRoc is now treated as an associate rather than a subsidiary, resulting in a disposal and accounting gain for Alba.
Alba participated in GreenRoc's recent fundraising, contributing £115k to a total of £470k. Amitsoq has achieved significant progress recently, including a substantial 3x increase in resource size. Processing advancements and endorsements from European organisations, as well as an MOU with established Norwegian contractor LNS, have further highlighted the project's potential.
Amitsoq's Environmental Impact Assessment (EIA) and Social Impact Assessment (SIA) are both on track for delivery in 2024. An independent Preliminary Economic Assessment is also expected to contribute to discussions with potential offtake partners in the coming months.
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Overall, this is a positive update from Alba, summarising good operational progress across its portfolio, which was already largely known to investors. Despite the dilution in shareholding, GreenRoc with its Amitsoq graphite project in southern Greenland remains Alba's flagship asset.
There is clear demand for Amitsoq graphite, evidenced by ongoing discussions with offtake partners, including one who has requested material for own testing. GreenRoc is working to separate a 700kg bulk graphite sample that should facilitate further discussions with potential customers. Amitsoq's PEA will be reported in September, expected to further demonstrate the project's future profitability and help garner demand.
Graphite is a key metal in the production of EV batteries, and earlier this year GreenRoc confirmed that Amitsoq graphite could be purified to exceed the EV battery requirement of 99.95%. With global demand for graphite expected to soar, Amitsoq's vast deposit is set to play a key role in the transition to net zero.
On the financial front, Alba made a post-tax profit of £2.1m during the period, up from a loss of £815k in 2022, including an accounting profit in relation to the deconsolidation of GreenRoc of £2.67m. The transaction is presented unaudited so the accounting treatment may be revised in the full-year accounts. Alba's investment in GreenRoc is now categorised as an "investment in associate" on its balance sheet and worth £5.4m.
Operating losses were £449k compared to £814k last year, but the reduction in costs is again attributable to Alba's ceasing to consolidate GreenRoc on 9 March 2023. Otherwise, underlying operating losses remained similar year-on-year. During the period £202k was spent on exploration, and cash at period-end was £58k. However, post-period on 7 July 2023, Alba raised £750k in a share placing.
Overall, Alba remains in a strong financial and operational position to continue developing its portfolio. The company should soon gain the necessary permits to take its now-100%-owned Welsh gold projects to production. Likewise, Amitsoq is steadily moving toward production, with multiple milestones expected by year-end to keep investors engaged.
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