Alba Mineral Resources plc (LSE: ALBA.L) has released its Half Year report for the six months to 31 May 2020.
Operational Highlights
A significant amount of operational progress has been made despite the limitations on groundwork due to the Covid-19 lockdown measures introduced halfway through the period.
In particular, the Gold and Graphite projects in Wales and Greenland respectively were put on hold due to the inability to get personal and equipment to the sites during lockdown.
Clogau
However, the team in Wales utilised the enforced downtime from the end of March to good use by further developing and refining the underground drilling programmes and sampling at the Clogau-St David’s Gold Mine in Dolgellau Wales, leading to the planning authority granting permission for an ambitious programme of underground drilling and bulk sampling to proceed at the Mine post period end.
The next phase of work at Clogau is described by management as “genuinely exciting” and represents the first concerted underground exploration campaign at the Mine for several decades.
Amitsoq
Meanwhile in Greenland, which the COVID-19 ruled out plans to drill a JORC resource at Amitsoq, the team has appointed the highly reputable industry consultants Golder & Associates to undertake a detailed conceptual study on the Melville Bay Iron Ore Project.
While the Company had always planned this next work phase for the project, with iron ore prices currently at a six-year high, the case for commissioning an evaluation of the economic potential of undertaking mining operations at Melville Bay became even more compelling and urgent.
Shares in ALBA have traded strongly over the past there months from lows of 0.08p per share in June 2020 to open at 0.14p following publication of the 1H20 results.
Financial Highlights
Operating Loss for the period was £0.30m (1H19: £0.38m) with net cash outflow from operations of £0.26m (1H19: £0.34m).
Whilst the Balance Sheetshows cash at Bank as of 31 May 2020 of £0.1m, investors should note the Company raised £0.45m (gross) in a share placing at a price of 0.065 pence per ordinary share post period end, with one share warrant also being issued for every two shares subscribed for at an exercise price of 0.13p per share and an expiration date of 24 months from the date of issue.
Furthermore, the Company announced in February that it had entered into a convertible securities issuance deed with a U.S.-based institutional investment fund managed by Bergen Asset Management, LLC ("Bergen") to provide up to £1,054,500 of funding in the form of the issuance by the Company of a series of unsecured zero coupon convertible securities.
In early March, the Company announced that it had issued the first convertible security (nominal value of: £223,000) to Bergen, 000 with Bergen converting the First Convertible Security into Alba shares in tranches commencing in April 2020, the final tranche being converted in August 2020.
Outlook
Importantly for Investors, it is worth noting that Gold has risen sharply over the past six months to trade currently above $1,900, which will have a significantly positive impact for Alba.
The next operating period for ALBA therefore looks particularly exciting with drilling operations in Wales looking to identify new and unexploited gold zones, which will support a decision to re-open the Clogau-St David’s Mine for commercial production, further metallurgical test work in relation to the high-grade Amitsoq Graphite Project in Greenland, and the most important work undertaken in relation to the Melville Bay Iron Ore Project since the drilling and declaration of a maiden JORC resource back in 2011-2012.