IronRidge Resources announces 2021 financial results

Financial highlights

• Exploration and evaluation expenditure held on the balance sheet for the year ended 30 June 2021 was AUS$51.4 million (2020: AUS$34 million), representing an increase of AUS$17.4 million with continued exploration programmes conducted across the company's projects in Ghana, Côte d'Ivoire and Chad.
• Successful capital raisings during the financial year for approximately AUS$33.8 million, allowed the company to continue exploration activities across its portfolio throughout the period, and left the company in a strong financial position at year end.
• Cash position at 30 June 2021 of AUS$19.1 million (2020: AUS$7.3 million).

Corporate highlights

• Announcement of the company's intention to progress a demerger of the company's gold assets in Côte d'Ivoire and Chad into a new gold focused entity structured to permit quotation on a recognised stock exchange.
• Appointment of Liberum Capital Ltd as joint broker to the company.
• Appointment of Amanda Harsas as Company Secretary and Chief Financial Officer to the company.
• Appointment of Christelle van der Merwe to the Board of the company as a Non-Executive Director.
• Chad gold projects renewed for a further four years.
• IronRidge accepted as a member of the European Battery Alliance (EBA250).
• Divestment of its non-core May Queen gold project in Western Australia.

Post period end highlights

• Secured agreement with Piedmont Lithium Inc. (PLI), a Nasdaq listed lithium exploration and development company, to fully fund and fast track development of the industry standout Ewoyaa Lithium Project, part of the company's Ghanaian Cape Coast Lithium Portfolio (CCLP), to production for US$102 million.
• Conditions precedent to the execution of the binding agreement now satisfied.
• Commitment of IronRidge's senior management team for the next phase of the company's project and corporate developments.
• High-grade lithium pegmatite drill intersections reported at new targets adjacent to Ewoyaa.
• Best drill intersection to date reported for the resource expansion programme at the Ewoyaa North target.

Vincent Mascolo, CEO of IronRidge, commented: “This year has been highly successful for IronRidge, culminating in the transformative post period end agreement with Piedmont Lithium to fully fund the company's Ewoyaa Lithium Project through to production.

“In Ghana, we reported an exceptional scoping study for Ewoyaa, that supports a business case for a 2 million tpy production operation, with life of mine revenues exceeding US$1.55 billion. This was the foundation for the transformative agreement subsequent to the reporting period with Piedmont Lithium to fully fund the project through to production. The landmark nature of our progression of this project is a testament to the strategic direction we have taken in Ghana and at this project.

“We have continued to progress exploration at the Zaranou Gold Project in Côte d'Ivoire during the period. The company completed drilling activities at the Zaranou gold license and focused drilling efforts at the Ehuasso-Coffee Bean-Mbasso target, as well as commencing drilling at the Ebilassokro and Yakassé targets. The announcement of the Company's intention to progress a demerger of the company's gold assets in Côte d'Ivoire and Chad into a new gold focused entity will further unlock the value of Zaranou and our other gold assets.

“In line with the company's core strategy to advance its lithium development project in Ghana and gold exploration portfolios in Côte d'Ivoire and Chad, the Board has elected to surrender its non-core bauxite and iron ore interests in Australia and Gabon. The company is now at a stage where this portfolio rationalisation will provide for better capital allocation and more focussed management time, commensurate with the more advanced status of our lithium and gold portfolio.

“Our strong cash position, standing at AUS$19.1 million at period end, and our successful capital raisings during the financial year, raising approximately AUS$33.8 million, has allowed the company to continue our exploration activities across our portfolio and left the company in a strong financial position at year end.

“We are grateful that COVID-19 and its impact on global travel has not provided a major barrier to the successful operation of the company and our projects. Nevertheless, management has continued to institute health and safety measures across all of our operations to minimise disruption and protect the health of our staff and partners. I would once again like to thank all our staff for their dedication and hard work during these unprecedented times.

“After a highly productive year for the company, we bring great optimism into the year ahead. I would like to thank our loyal shareholders for their continued support and I look forward to updating the market of our progress."

Chairman, Neil Herbert, added: “IronRidge has made impressive progress across its project portfolio this year. Focus and resources have understandably been directed more towards the Ewoyaa Lithium Project in Ghana, however, simultaneously, considerable exploration success has been achieved in Côte d'Ivoire.

“This strategy has proven fruitful, with the continued hard work at Ewoyaa delivering incredible scoping study results, which in turn has resulted in the milestone agreement with Piedmont, post period end, to fully fund Ewoyaa through to production. We have always been confident that Ewoyaa had the potential to become an industry-standout project and now the scoping study and funding agreement have affirmed this belief. Our efforts now turn to developing Ewoyaa through the next stages to production and commercialisation.

“In Côte d'Ivoire, the Zaranou Gold Project has continued to deliver high-grade results and significant mineralisation has been confirmed at new surrounding targets, including Mbasso, Ehuasso and Yakassé. With only 12 km of the 47 km identified strike along the Zaranou license having been drill tested, and with regional soils confirming prospectivity along the structure, we look forward to a pipeline of further positive drill results in the coming months. We are also pleased to have strengthened our gold portfolio in-country through the completion of the acquisitions of the Vavoua license and Bodite and Bianouan licenses, providing IronRidge with additional highly prospective ground to explore.

“In order to allow the company to prioritise the developments of its core gold and lithium assets, the Board has taken the decision to surrender its bauxite and iron ore interests in Australia and Gabon. The company believes that its intended demerger of its gold assets into a new gold-focused entity should enable the company's gold and lithium portfolios to realise their true values and deliver value accordingly to shareholders.

“The company is now in a strong position to capitalise upon the progress made to date and make the year ahead even more successful than the year just completed. As such, we look forward to providing updates to the market on all of our activities in due course."

Operational highlights

Ghana: lithium

• Exceptional scoping study results announced at Ewoyaa, supporting a business case for a 2 million t production operation with life of mine (LOM) revenues exceeding US$1.55 billion and significant potential to extend LOM.
• The study highlighted an eight-year LOM operation, producing an average 295 000 tpy of 6% lithium oxide (Li₂O) spodumene concentrate using conventional opencast mining operation from surface with low strip ratios, with LOM revenues exceeding US$1.55 billion, post-tax NPV₈ of US$345 million, average EBITDA of US$105 million/y and IRR of 125% over eight years.
• Further metallurgical test work was completed on the first stage of improvement, with P1 mineralisation being tested at a larger scale using a 100 mm dense media separation (DMS100) cyclone as well as testing the effect of re-crushing middlings. P2 mineralisation was similarly tested, but at smaller scale using Heavy Liquid Separation (HLS).
• After re-crushing P1 gravity middlings and testing it again in the DMS100, the recovery of lithium improved for both the fresh and transitional material whilst maintaining a product grade of 6% Li₂O.
• Commenced a 12 500 m reverse circulation (RC) drilling programme designed to add resource tonnes within the immediate Ewoyaa resource area and test seven new target zones defined within a 12 896 m exploration auger drilling programme.
• The RC programme was further extended to 16 500 m total to test strike extensions where high-grade mineralisation remained open in adjacent holes.
• Drilling remains ongoing with multiple high-grade drill intersections reported to date within new targets including Anokyi Main, Anokyi South, Okwesikrom and Ewoyaa North.
• Completed the acquisition of 100% of the share capital of Joy Transporters Ltd, providing IronRidge full ownership of the highly prospective Saltpond license and Cape Coast application in Ghana.
• Post-period, the company announced additional broad and high-grade lithium pegmatite drill intersections at the Grasscutter, Ewoyaa North and Anokyi Main targets adjacent to the Ewoyaa mineral resource estimate.

Côte D'Ivoire: gold and lithium

Zaranou Portfolio

• Completed drilling activities at the Zaranou gold license and focused drilling efforts at the Ehuasso-Coffee Bean-Mbasso target where artisanal workings are most intense and commenced drilling at the Ebilassokro and Yakassé targets.
• Secured unverified historical soils and drilling data from previous explorers AngloGold Ashanti and Etruscan Resources, including data for a total of 279 rotary air blast (RAB) holes for 8025 m to a maximum depth of 50 m and 186 reverse circulation (RC) holes for 9759 m to a maximum depth of 80 m over the Yakassé target in the extreme south-west of the license area.
• Completed a second phase drill programme for a total of 20 312 m in 404 air core (AC) holes and 2077 m in 12 RC holes. Drilling focused within the Ehuasso target along 160 m spaced AC and RC drill traverses to test mineralisation continuity, in addition to two exploration AC drill traverses at the Ebilassokro soil anomaly.
• Completed the third phase programme for 51 539 m of drilling including 20 323 m in 110 RC holes and 31 216 m in 611 AC holes at the Ehuasso, Ebilassokro, Yakassé, Mbasso and Coffee Bean/Super pit targets at 80 m and 160 m spaced drill traverses. The company also completed a 645 m diamond drilling programme in three holes at the Ehuasso target for geology, RC twinning and density work.
• Announced the 100% acquisition of the Bodite and Bianouan Gold licenses from Major Star SA.

Vavoua Portfolio

• Announced the 100% acquisition of the Vavoua Gold license from CAPRI Metals SARL.
• The company commenced an exploration auger drilling programme over geophysical anomalies defined from the aeromagnetics survey and along strike from the 3.35 million oz Abujar Project. Auger drilling is ongoing.

Kineta Portfolio

• Completed 2442 m for 18 holes of RC drilling at the Kineta North gold license to test below previously reported trenching intersections including 2 m at 4.04 g/t gold and 6 m at 0.24 g/t gold within a broader 2 km long by 250 m wide >30 ppb gold soils anomaly with coincident underground artisanal workings over a 700 m strike.
• Completed 1590 m of trenching at the Marahui license, following up regional soil anomalies.

Chad: gold

• Successfully renewed its Dorothe, Echbara and Am Ouchar licenses for a further four years with requisite area reductions for a total 746.25 km2 of highly prospective tenure where it has defined a significant gold target at Dorothe.
• The company is assessing timing to recommence field activities with the intention to focus on a maiden drilling programme to test the Dorothe target in the new year.

Read the article online at: https://www.globalminingreview.com/finance-business/30092021/ironridge-resources-announces-2021-financial-results/