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Block Commodities Ltd (BLCC)
Block Commodities Ltd: Interim Results
29-March-2019 / 16:19 GMT/BST
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
Block Commodities Limited / Epic: BLCC / Sector: Mining
29 March 2019
Block Commodities Limited ('Block Commodities' or 'the Company')
Interim Results
Chairman's Statement
During the period under review, the Company continued its evolution from a
junior exploration company with its Lac Dinga potash exploration licence, to
a forward-thinking agri-tech company in sub-Saharan Africa, deploying new
technologies to maximise value in African agriculture. Leveraging its
connections in Africa, the Company is developing a platform to empower small
scale farmers ("SSF") to raise productivity and secure better returns for
produce, while establishing African communities as significant future global
agricultural players. The platform uses blockchain technology to provide
loans of utility tokens to the SSF which are then used to procure inputs
from the Company.
Trading
During the period the Company prepared to roll out its commodities
eco-system in a Zambian pilot, as an alternative to the Government's limited
e-voucher scheme. An off-taker was secured and a group of local farmers
engaged to run a pilot over 300ha. However, with the seasonal rains arriving
earlier than forecast and delays in procuring inputs, the pilot has had to
be postponed.
Uganda
Work continues with our off-take partner Pure Grow Africa Limited, to
develop a pilot program for the Farmer 3.0 Ecosystem. It was initially
envisaged to engage with up to 1,000 farmers, however delays in obtaining
the necessary product import licences, mean that the initial pilot will be
of a smaller scale using product procured in country. This is now ready to
be rolled out, with work expected to commence in the final quarter.
Lac Dinga
The Company retains its interest in the exploration side of the fertiliser
industry through its 70% interest in La Société des Potasses et des Mines
S.A. ('SPM'), which holds the exclusive right to conduct exploration
activities for potash salts over the Lac Dinga Project Area ('Lac Dinga' or
the 'Project'). The farm out agreement with African Agronomix limited
("AAX") signed in July 2017, states that the licence must be in good
standing before AAX can commence work on the Project. The Company continues
to await formal approval of its application to extend the term of the
licence for the third term permitted under the mining code of the Republic
of Congo.
Financial results
The results for the period showed an operating loss of $0.5m (HY18: loss
$0.7m). Finance charges increased to $0.2m (HY18: $0.1m) resulting in a loss
before tax of $0.6m (HY18: $0.8m). Cash balances at 31 December 2018 were
$1,000, (2017: $206,000).
At 31 December 2018, the Group is reporting Net Liabilities of $427,000. The
Company is currently in negotiations with the lender of the loan note with a
view to the conversion of the loan note into equity. This would both return
the Group balance sheet to a net asset position, as well as eliminate the
accruing finance costs going forward.
New commodity opportunity: entry into the cannabis market
The Board has identified a n opportunity to enter the fast-growing legal
medical cannabis market as the operator of medical cannabis production in
jurisdictions where this is legally permitted.
The global legal medicinal cannabis market [1] is expected to reach USD
146.4 billion by end of 2025, according to Grand View Research, Inc. The CBD
market has huge potential and now with growing awareness of its beneficial
nature, has rapidly increasing usage. The European medical cannabis market
alone is expected to be worth 55 billion euros a year by 2028, according to
London-based cannabis industry market intelligence firm Prohibition Partners
[2]. It reckons the total legal market in Europe, including CBD, will be
worth 123 billion euros by then.
Entering the cannabis market represents a strategic move for Block
Commodities. Leveraging on its existing connections in Africa, the Board
believes that the use of blockchain technology can add significant value to
the production and distribution of cannabis products.
Over the last six months, the Company has worked to develop a number of
opportunities to access the development of medicinal cannabis in low-cost
jurisdictions.
To date, Block Commodities has signed an option with shareholders of
Greenbelt Company Limited to acquire a 100% interest ("Sale Shares").
Greenbelt was granted a licence by the Sierra Leone Minister of Agriculture
and Forestry for medical cannabis production and processing in November
2018. Block Commodities plans to fast-track and streamline operations in
Sierra Leone as soon as the acquisition is finalised.
Financing
As announced on 27 March 2019 the company has raised a minimum of GBP400,000
to enable it to acquire an option to acquire an exclusive licence to
produce, process and market medicinal cannabis and for general working
capital purposes.
Scientific Advisory Board and collaboration agreement with Hexis Lab Limited
To help deliver our strategy to enter the medicinal cannabis market, we
announced earlier today a collaboration agreement with Hexis Lab Limited and
the formation of a Scientific Advisory board (SAB). We welcome Dr. Olusola
Idowu the CEO of Hexis Lab and Ian C. Tordoff, an advisor and strategist
specialised in health sector innovation to the SAB.
The Board believe that the Company now has a firm foundation upon which to
build a growing revenue generating business built around our blockchain
platform and look forward to reporting continued progress in the remainder
of the current year
Chris Cleverly
Executive Chairman
29 March 2019
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2018
Unaudited Consolidated Income Statement
For the half year to 31 December 2018
Unaudited Unaudited Audited
6 months to 6 months to Year ended
31 December 31 December 30 June
2018 2017 2018
Note $'000 $'000 $'000
Other trading - - (12)
income / (loss)
Operating (453) (263) (948)
expenses
Impairment of:
- exploration - (271) -
assets
(50) - (100)
- loan to
unquoted company
- - (86)
- fixed assets
- (101) -
- investment in
associate
Other gains 97 (44) (20)
/(losses)
Operating loss (406) (679) (1,166)
Net finance (158) (103) (357)
expense
Loss before (564) (782) (1,523)
taxation
Income tax - - -
expense
Loss for the (564) (782) (1,523)
period
attributable to
owners of the
parent company
Loss per share: 5 (0.01 cents) (0.04 cents) (0.05 cents)
basic and
diluted
All results relate to continuing activities
Unaudited Consolidated Comprehensive Income Statement
For the half year to 31 December 2018
Unaudited Unaudited Audited
6 months to 6 months to Year ended
31 December 31 December 30 June
2018 2017 2018
$'000 $'000 $'000
Loss for the period (564) (782) (1,523)
Other comprehensive income
Exchange translation (12) 89 4
differences on foreign
operations
Total comprehensive income (576) (693) (1,519)
for the period attributable
to owners of the parent
company
Unaudited Consolidated Statement of Financial Position
As at 31 December 2018
Unaudited Unaudited Audited
31 31 30 June
December December
2018
2018 2017
Note $'000 $'000 $'000
Non-current
assets
Intangible assets: exploration 3,000 3,000 3,000
activities 6
Property plant and equipment 3 82 6
Total non-current 3,003 3,082 3,006
assets
Current assets
Inventory - 68 10
Trade and other 1 109 92
receivables
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