REG - ECR Minerals PLC - Annual Report & Audited Results YE 30th Sept 2023
02/04/2024 07:00
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RNS Number : 8959I ECR Minerals PLC 02 April 2024
ECR MINERALS plc
("ECR Minerals" or the "Company")
Audited Financial Results for Year Ended 30 September 2023
Annual Report
ECR Minerals plc is pleased to announce its audited financial statements for
the twelve months ended 30 September 2023 ("FY 2023").
Copies of the Annual Report and Accounts for FY2023 with the notice of annual
general meeting have been posted to shareholders and are available on the
Company's recently updated website at https://www.ecrminerals.com.
The Company intends to hold its annual general meeting at 11 am on Tuesday
April 23(rd) 2024 at Hurlingham Studios, Ranelagh Gardens, London SW6
3PA.
Below is an extract from comments made by Chairman Nick Tulloch in the Annual
Report for the year ending 30 September 2023:
"Despite the challenges thrown at ECR during 2023, we have significantly
advanced the value of our assets across the group and, hopefully, as
shareholders will observe, our pace of activity has accelerated into 2024. We
have made a conscious effort to re-energise our investment case and activity
levels are high - and reflected in increasing trading volumes on the stock
exchange - so we believe that we have much to look forward to in the coming
year.
It is important to me, and my fellow directors, that our Board is now fully
aligned with shareholders through our salary sacrifice and I very much look
forward to participating with you all as we aim to deliver transformative
value to our shareholders in the coming year.
Finally, my thanks to our shareholders for supporting us. I hope we can offer
you further cause for optimism as we seek to streamline operations and costs,
while adding value to ECR's key assets going forward. I look forward to
reporting back to you with further progress."
Nick Tulloch
Chairman
Financial Summary for Year Ending 30 September 2023
For the year to 30 September 2023, the Group recorded a total comprehensive
loss attributable to shareholders of the Company of £2,132,769, compared with
£2,272,658 for the year to 30 September 2022. The largest contributor to the
total comprehensive loss was the administrative expenses.
The Group's net assets as at 30 September 2023 were £5,012,403 in comparison
with £5,849,084 at 30 September 2022.
See below for detailed financial statements
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the UK version of Regulation (EU) No 596/2014 which is part of UK law by
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this inside information is now considered to be in the public domain.
FOR FURTHER INFORMATION, PLEASE CONTACT:
ECR Minerals plc Tel: +44 (0) 20 7929 1010
Nick Tulloch, Chairman
Andrew Scott, Director
Email:
info@ecrminerals.com (mailto:info@ecrminerals.com)
Website: www.ecrminerals.com
(http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.ecrminerals.com%2F&esheet=51817334&newsitemid=20180605005810&lan=en-US&anchor=www.ecrminerals.com&index=1&md5=820ad49dc1fc2c84a0538453c017bc1b)
WH Ireland Ltd Tel: +44 (0) 207 220 1666
Nominated Adviser
Katy Mitchell / Andrew de Andrade
Axis Capital Markets Limited Tel: +44 (0) 203 026 0320
Broker
Ben Tadd/Lewis Jones
SI Capital Ltd Tel: +44 (0) 1483 413500
Broker
Nick Emerson
Novum Securities Limited Tel: +44 (0) 20 7399 9425
Broker
Jon Belliss
Brand Communications Tel: +44 (0) 7976 431608
Public & Investor Relations
Alan Green
ABOUT ECR MINERALS PLC
ECR Minerals is a mineral exploration and development company. ECR's wholly
owned Australian subsidiary Mercator Gold Australia Pty Ltd ("MGA") has 100%
ownership of the Bailieston and Creswick gold projects in central Victoria,
Australia, has six licence applications outstanding which includes one licence
application lodged in eastern Victoria (Tambo gold project).
ECR also owns 100% of an Australian subsidiary LUX Exploration Pty Ltd ("LUX")
which has three approved exploration permits covering 946 km2 over a
relatively unexplored area in Lolworth Range, Queensland, Australia. The
Company has also submitted a license application at Kondaparinga which is
approximately 120km2 in area and located within the Hodgkinson Gold
Province, 80km NW of Mareeba, North Queensland.
Following the sale of the Avoca, Moormbool and Timor gold projects in
Victoria, Australia to Fosterville South Exploration Ltd (TSX-V: FSX) and the
subsequent spin-out of the Avoca and Timor projects to Leviathan Gold Ltd
(TSX-V: LVX), MGA has the right to receive up to A$2 million in payments
subject to future resource estimation or production from projects sold to
Fosterville South Exploration Limited. MGA also has approximately A$75
million of unutilised tax losses incurred during previous operations.
ECR holds a 90% interest in the Danglay gold project in the Philippines and a
royalty on the SLM gold project in La Rioja Province, Argentina which could
potentially receive up to US$2.7 million in aggregate across all licences.
ECR Minerals plc | Annual Report 2023
CHAIRMAN'S REVIEW For the period ended 30 September 2023
It feels a little curious to be reporting on ECR's performance in the year to
30 September 2023 when I spent slightly over two weeks in the role in the
period but, as you would expect any new management team to do, Mike Whitlow,
as COO, and I undertook some intensive learning and examination of ECR's
assets and business on our appointment and I hope the decisions we have made
and initiatives we have undertaken since resonate well with shareholders.
Firstly, I would like to express my appreciation to David Tang, our former
Chairman, who led ECR through a very challenging period with great diligence
and commitment. I was honoured that he asked me to take over as Chairman two
months ago and I thank him for all he has done for ECR so far. I am
particularly pleased that we will continue to benefit from his wise counsel
and detailed knowledge of our operations in his ongoing role on our board of
directors. I would also like to recognise the work that Andrew Haythorpe
undertook during his tenure as CEO in developing ECR's portfolio of assets.
Against a backdrop of exceptionally challenging markets, the progress made on
the ground has not been reflected in our market valuation and share price but
Mike and I would contend that it is a matter of when and not if that this will
be corrected - and perhaps this is beginning to become apparent over the past
six months since our appointment.
With a small market capitalisation, it is easy for investors to overlook the
potential in our portfolio. I have been saying since I joined that the Company
had somewhat lost its connection with investors and one of our first tasks is
to rebuild that. I hope, with the efforts we have made in the past five
months, that is starting to show through. It was important to me and Mike that
we demonstrated our conviction to shareholders and consequently we proposed to
the board a remuneration scheme for each of us that is almost 90 percent.
based in ECR shares and, furthermore, that those share issues are linked to
performance. We were flattered to be immediately joined in this concept by all
other members of the board through their salary sacrifice schemes and
cancellation of 54,000,000 historical share options. The salary sacrifice
scheme has already been extended twice. Together, and with this now clear
alignment of the board with shareholders, we hope to build further value to
ECR's assets in the coming year.
Mike and I both keep an eye on bulletin boards and other investor commentary.
Following from what I said above, we can't build a connection with investors
if we don't know what they are thinking. Opinions and comments are diverse as
you would expect but my stand-out favourite, made not long after our
appointment, was to nickname us "Ant and Dec". Quite whether the author meant
it this way, I am not sure, but I enjoyed it as an apt description. We joined
the company together as a double act and investors who know us will see that
we have very different skillsets and experience but we both share a common
desire to grow the Company in the public markets. Perhaps like our more famous
celebrity comparison, we work closely together, speaking several times most
days as we develop initiatives to "entertain" investors and develop ECR.
In contrast to ECR's share price, spot gold recovered sharply in March 2023,
and despite dipping in October 2023, the yellow metal has risen strongly since
then, remaining above the important US$2,000/ oz benchmark for much of the
past five months. Despite gold's safe haven status in a turbulent and
difficult world, the sharp rise in interest rates over the year to combat high
inflation rates have weighed heavily on markets and sentiment, resulting in
the widely discussed disconnect between the gold price and junior explorers.
Although this highly uncertain macro picture could yet continue, market
commentators are speculating that falling inflation may lead to falls in
interest rates early in 2024. If this happens, junior explorers, including
ECR, may find themselves back in favour.
When I took the helm in September 2023, along with Mike, we conducted a
detailed asset overview and evaluation. It was of no surprise to us that we
believe that ECR has a number of high quality assets, and the work that our
Chief Geologist Adam Jones and the field team have undertaken, particularly at
our Queensland projects over this year have delivered a tangible increase both
in our understanding of the terrain and the value of the licences. What
follows is a project by project assessment to date.
QUEENSLAND
Lolworth Project
Our primary focus during 2023 has been the development of our Queensland
assets, and in particular the gold and battery metals assets that field work
has revealed at our exploration licences EPM 27901, EPM 27902 and EPM 27903 at
the Lolworth Range area in Northern Queensland. The Lolworth Range area in
North Queensland has been closely monitored by ECR's Chief Geologist Adam
Jones for many years and is considered highly prospective for gold. An
extensive fieldwork campaign of soil sampling and rock chips has already been
successfully completed by our geological team led by Adam Jones, and the team
are now focused on identifying areas of high potential to help delineate a
series of future high-priority zones and drill targets. Soil sampling and rock
chip results already in from Reedy Creek, Gorge Creek and Woolshed Creek
(announced at the end of the period in question) continue to extend the
region's gold prospectivity, and post period end results from Gorge Creek are
increasingly highlighting Lolworth as a bona fide exploration opportunity.
Already there are indications that a much larger system may be in situ than
has been mapped at present. The next steps for Lolworth are trenching at
Flaggy Creek and Reedy Creek. We intend to trench across various outcrops and
follow up with reverse circulation drilling. We will also undertake further
reconnaissance for niobium and gold in streams over the eastern tenements
where geological mapping suggests the presence of pegmatite intrusion that
covers approximately 45 square kilometres.
Hurricane Project and Kondaparinga License ECR was granted a conditional
option to acquire the entire issued share capital of Placer Gold Pty Ltd, the
beneficial holder of three granted mining tenements (EPM 27518, EPM 25855 and
EPM 19437) located in North East Queensland, together known as the Hurricane
Project. An extensive campaign of field work was undertaken by Adam Jones and
the field team over the summer months, and while rock chip sampling confirmed
the area was prospective for gold and antimony, the Board decided that the
terms of the acquisition did not represent good value for ECR shareholders. I
would emphasise here that none of this is meant to imply that there is not
value in Hurricane - we simply felt the value was not representative of the
proposed cost. However, work done by Adam Jones and Andrew Haythorpe did
reveal to us several opportunities in the location.
We took the decision to terminate the proposed Hurricane acquisition in
October 2023 and shortly ahead of that applied for EPM 28910 at Kondaparinga.
This area is situated close to the original geological features that first
bought Hurricane to the attention of our board and field team. Significantly,
it is also twice the size of Hurricane.
Blue Mountain Project
In April 2023, ECR announced the conditional acquisition of the Blue Mountain
project, which consists of exploration permits EPM 27175 and EPM 27183 and
includes the Denny Gully Gold project, situated south west of Gladstone port
and south east of Biloela, the small regional pastoral-agricultural-coal
mining centre in Queensland. No work has yet been undertaken at Blue Mountain,
and a decision on whether or not to progress this project will be taken during
2024.
VICTORIA
ECR's operational hub remains in Bendigo, in Victoria, Australia, and from
here our field and drill team have continued to progress our projects at
Creswick and Bailieston.
Creswick
Historically, a considerable amount of investor interest has centred on our
Creswick project, where ECR owns licence tenements EL006184, EL006907 and
EL006713 and a property at Springmount. There is good reason for this
interest. Creswick sits in an impressive "postcode" with numerous historic
production sites in the vicinity and, more recently, growing interest again in
Victoria as a gold producing region. Creswick is in effect a continuous land
package from the Springmount property south through to the outskirts of
Ballarat, while licence EL006907 also links Creswick to the Ballarat
East-Nerrina Goldfields.
Following the re-assay of the Creswick diamond drill core, Adam Jones and the
field team returned to conduct further fieldwork and identified a potential
new parallel gold system to the south-east of the Springmount property within
the Dimocks Main Shale. Several prospects in this area demonstrated
considerable potential through positive soil and rock chip sampling results.
In addition, 10 short holes were drilled at Spring Hill Reef, adjacent to the
Springmount property and the 2019 reverse circulation drill holes. Ultimately,
the drill results at that time were disappointing, and coupled with the
challenging markets, the Board at the time took the decision to temporarily
suspend further work on Creswick and focus resources on its Queensland assets.
Since that date, and after the year end, we have returned to drill at
Creswick, this time at Davey Road and Kuboid Hill.
Whilst we are currently awaiting results from Kuboid Hill, bulk sample testing
at Davey Road indicated both extensive prevalence and pleasing grades of gold
with the best result being 41.03 g/ t Au over 1 metre thereby vindicating our
decision to re-examine our Creswick assets.
Bailieston
The extensive field work and drilling undertaken at the Bailieston property in
previous years maintains this asset as one of our most prominent. The final
phase of an ongoing drilling campaign in Spring 2023 at the Blue Moon prospect
resulted in some promising gold grades following on from the historic drill
holes from the 2019 RC drill programme. The unusual geology at Blue Moon gave
some indication of an extended grade trend but unfortunately did not expand at
depth and hopes for an extended grade trend failed to materialise. Unable to
confirm any potential for an immediate commercial discovery, and faced with
little support in the markets at that time, the Board took the decision to
suspend activities and focus resources on its Queensland assets.
Following the year end the Board has noted the 'spectacular' results announced
by ASX listed Southern Cross Gold at its Sunday Creek project sited to the
south of ECR's Bailieston assets as well as a general increase in activity
across the Victoria gold mining regions. We will commence a stream sampling
programme at Baileston in the current financial year. Separately, ECR also
received A$609,091 funds from the disposal of the Bailieston property at
Nagambie-Rushworth Road.
Tambo
ECR's exploration licences in eastern Victoria covering the Tambo River and
Swifts Creek region were granted in December 2021. We have previously recorded
22g/t gold in rock chips with silver and bismuth credits and expect to
commence reverse circulation drilling at Tambo in the coming year.
OTHER ASSETS
Danglay Gold Project, Philippines
In February 2023, an intercompany loan of 28,354,525 pesos (approximately
£420,800) owed to ECR by Cordillera Tiger Gold Resources Inc (" Cordillera
Tiger"), the owner of Exploration Licence EP-006 at the Danglay Gold Project,
Northern Philippines was satisfied by the issue of 6,666,667 new ordinary
shares in that company. As a result, ECR now owns 90 per cent. of Cordillera's
issued share capital.
However, during the period, the Group has reassessed its involvement in the
Philippines in accordance with IFRS 10's definition and guidance on control.
As a result of the officers and directors of Cordillera Tiger not acting in
accordance with the Group's instructions, the Group has concluded that it has
no significant influence and no outright control in making its judgement in
respect of its Philippines assets. The Board have considered the Group's
voting rights, the relative size and dispersion of the voting rights held by
other shareholders and the recent inactivity by those shareholders. Recent
experience demonstrates that enough of the smaller shareholders, who are also
directors of the Philippines company, have operated in such a way that has
prevented the Group from having the practical ability to direct and gain
access to financial and other information that is pertinent to running that
company. With our focus very much on Australia, we continue to explore options
to crystallise value here.
Avoca and Timor Exploration Licence Royalties
In April 2020, the Group's subsidiary Mercator Gold Australia Pty Ltd entered
into an agreement for the sale of Avoca and Timor exploration licences EL5387,
EL006280, EL006913 and EL006278 in Victoria to Currawong Resources Pty Ltd, a
wholly owned subsidiary of Fosterville South Exploration Ltd. A cash payment
of US$500,000 was received at the time and ECR continues to be entitled to:
1. A further payment of A$1 for every ounce of gold or gold equivalent of
measured resource, indicated resource or inferred resource estimated within
the area of one or more of the licences in any combination or aggregation of
the foregoing, up to a maximum of A$1,000,000 in aggregate; and
2. A further payment of A$1 for every ounce of gold or gold equivalent
produced from within the area of one or more of the licences, up to a maximum
of A$1,000,000 in aggregate. No payments under the Avoca and Timor exploration
licence royalties were received in the year.
SLM Gold Project Royalties
In February 2020, the Company sold its wholly owned Argentine subsidiary,
Ochre Mining SA, which holds the SLM gold project in La Rioja, Argentina. The
sale allows ECR to focus on its core gold exploration activities in Australia.
The purchaser, Hanaq Argentina SA ("Hanaq"), was a Chinese-owned company
engaged in lithium, base and precious metals exploration in north-west
Argentina including Salta, Jujuy and La Rioja, with a highly experienced
management team. ECR retains an NSR royalty of up to 2 per cent. to a maximum
of US$2.7 million in respect of future production from the SLM gold project,
owned by Hanaq. The Directors believe that Hanaq has the operational
capabilities and access to investment capital necessary to put the SLM project
into production, subject to the usual prerequisites such as further
exploration and feasibility studies being successfully completed (if deemed
necessary by Hanaq) and to the necessary permits for production being
obtained. No payments under the SLM gold project royalties were received in
the year.
Exploration Licence Overview and Summary
At the end of the financial year, ECR held eight active exploration licences
in Victoria. There are three granted mineral exploration licences at Creswick
(EL006184, EL006907 and EL006713), and four granted exploration licences
EL5433, EK006911, EL006912 and EL007296 at Bailieston. At Tambo ECR owns the
exploration licence EL007484 covering Swifts Creek and the Tambo River.
ECR holds three exploration licences (EPM 27901, EPM 27902 and EPM 27903) in
the Lolworth area, North Queensland and has applied for licence EPM 28910 at
Kondaparinga also in North Queensland. In November 2020, ECR lodged
exploration licence application EL007537 for an area which surrounds mining
licences M IN5396 and M IN4847. These mining licences, which are not held by
ECR, contain the operating Ballarat gold mine. The area of EL007537 includes
the southern extension of the Dimocks Main Shale, which is the principal
target of exploration at the Creswick gold project located a short distance to
the north, the northern extension of the Ballarat East line and the depth
extensions of the Ballarat West line. EL007537 is in a competitive bid with
three other applicants.
Asset Review
As the Group is not generating revenue from operations, the Directors consider
that profit and loss is a metric of less utility than in many other
businesses. For the year to 30 September 2023 the Group recorded a total
comprehensive loss of £1,772,670 compared with £2,614,873 for the year to 30
September 2022. This is reflected principally in the impairment of investment
held in Cordillera Tiger and administrative expenses. The Group's net assets
at 30 September 2023 were £5,012,403 in comparison with £5,849,083 at 30
September 2022.
In maintaining intensive drilling campaigns and exploration activities, ECR's
capital position has reduced during the year. However, the Company raised
£900,000 before expenses in December 2022, and following the board
restructuring, a further conditional fundraise of £580,000 was executed just
prior to the year end from high net worth individuals and institutional
investors without payment of commissions. In October 2023, a cross-board
salary sacrifice scheme in lieu of shares was agreed to further save cash. To
date, the Board has sacrificed £80,000 of salary in return for 22,857,142 new
ordinary shares at a price of 0.175 pence issued in December 2023 and a
further issue of new ordinary shares to be made at the end of March. Following
the year end, Director options over 54 million options were cancelled on 20
October 2023 as part of our efforts to fully align with shareholders amid the
challenging market conditions. Furthermore a placing to raise £585,000 at 0.3
pence per ordinary share was announced earlier this month with settlement
scheduled for 8 April 2024. This fundraising is a significant achievement for
ECR, coming at a more than 70 per cent. premium to our raise in September
2023. Importantly, we are now fully funded for our 2024 exploration programme.
Since my arrival in September 2023, we have introduced additional measures to
preserve cash going forward. Most recently, and after the year end, we
successfully sold a drilling rig and an excavator for a combined consideration
of A$420,000 (with payments for the rig being spread over nine months),
ECR also owns a property at Brewing Lane, Springmount (within the Creswick
licence area), on which the Group is in the process of obtaining planning
permission for a residential house pending putting the property up for sale.
For a modest outlay, we believe that, with planning permission, the land value
should increase and, equally importantly, so will the likely audience of
buyers.
Despite the challenges thrown at ECR during 2023, we have significantly
advanced the value of our assets across the group and, hopefully, as
shareholders will observe, our pace of activity has accelerated into 2024. We
have made a conscious effort to re-energise our investment case and activity
levels are high - and reflected in increasing trading volumes on the stock
exchange - so we believe that we have much to look forward to in the coming
year. It is important to me, and my fellow directors, that our Board is now
fully aligned with shareholders through our salary sacrifice and I very much
look forward to participating with you all as we aim to deliver transformative
value to our shareholders in the coming year.
Finally, my thanks to our shareholders for supporting us. I hope we can offer
you further cause for optimism as we seek to streamline operations and costs,
while adding value to ECR's key assets going forward. I look forward to
reporting back to you with further progress.
Nick Tulloch
Chairman
31 March 2024
Financial Statements:
Year ended Year ended
30 September 2023 30 September 2022
Note £ £
Continuing operations
Other administrative expenses (1,320,357) (1,214,398)
Impairment of intangible assets - (1,576,822)
Loss on other current assets (149,282) (18,991)
Disposal of assets (4,233) -
Impairment of investments (112,928)
Share based payment (156,380) -
Currency exchange differences (6,049) 27,173
Total administrative expenses (1,749,229) (2,783,038)
Operating loss 3 (1,749,229) (2,783,038)
Assets held at fair value through profit and loss (34,695) 16,510
(1,783,924) (2,766,528)
Financial income 7 3,111 651
Other income 8,142 151,004
Finance income and costs 11,253 151,655
Loss for the year before taxation
(1,772,670) (2,614,873)
Income tax 5 - -
Loss for the year from continuing operations (1,772,670) (2,614,873)
Loss for the year - all attributable to owners of the parent (1,772,670) (2,614,873)
Earnings per share - basic and diluted
On continuing operations 4 (0.15)p (0.25)p
The period to which this consolidate statement of comprehensive income applies
was the 12-month period from 1 October 2022 to 30 September 2023.
There was no other comprehensive income in the period. All activities relate
to continuing operations.
The notes on pages 59 to 82 are an integral part of these financial
statements.
Year ended Year ended
30 September 2023 30 September 2022
£ £
Loss for the year (1,772,670) (2,614,873)
Items that may be reclassified subsequently to profit or loss
(Loss)/gain on exchange translation (360,099) 342,215
Other comprehensive gain for the year (360,099) 342,215
Total comprehensive loss for the year (2,132,769) (2,272,658)
The notes on pages 59 to 82 are an integral part of these financial
statements.
Group Company
30 September 30 September 30 September 30 September
Note 2023 2022 2023 2022
£
£ £ £
Assets
Non-current assets
Property, plant and equipment 8 567,672 1,188,192 7,297 7,849
Investments in subsidiaries 9 - - 1 22,543
Intangible assets 10 4,420,597 3,760,919 347,984 147,985
Other receivables 11 - - 4,005,390 5,792,859
4,988,269 4,949,111 4,360,672 5,971,236
Current assets
Trade and other receivables 11 85,383 148,043 1,065,853 1,037,568
Inventory - 70,641 - -
Financial assets at fair value through profit or loss 9 10,390 45,084 10,390 45,084
Cash and cash equivalents 12 82,462 842,889 6,589 233,106
178,235 1,106,657 1,082,832 1,315,758
Total assets 5,166,504 6,055,768 5,443,504 7,286,944
Current liabilities
Trade and other payables 14 154,101 206,684 101,042 135,925
Total liabilities 154,101 206,684 101,042 135,954
Net assets 5,012,403 5,849,084 5,342,462 7,151,069
Equity attributable to owners of the parent
Share capital 13 11,292,415 11,290,980 11,292,415 11,290,980
Share premium 13 54,195,398 53,057,125 54,195,398 53,057,125
Exchange reserve 566,114 926,213 - -
Other reserves 597,086 440,706 597,086 440,706
Retained losses (61,638,610) (59,865,940) (60,742,437) (57,637,742)
Total equity 5,012,403 5,849,084 5,342,462 7,151,069
The Company has elected to take the exemption under section 408 of the
Companies Act 2006 from presenting the parent company profit and loss account.
The loss for the parent company for the year was £3,104,695 (2022:
£2,263,395 loss).
The notes on pages 59 to 82 are an integral part of these financial
statements. The financial statements were approved and authorised for issue by
the Directors on 31 March 2024 and were signed on its behalf by:
Weili (David)
Tang
Nick Tulloch
Share capital Share premium Exchange reserve Other reserves Retained reserves Total
(Note 13) (Note 13)
£ £ £ £ £ £
Balance at 30 September 2021 11,290,483 52,593,562 583,998 440,706 (57,251,067) 7,657,683
Loss for the year - - - - (2,614,873) (2,614,873)
Gain on exchange translation - - 342,215 - - 342,215
Total comprehensive loss - - 342,215 - (2,614,873) (2,272,658)
Shares issued 497 463,563 - - - 464,060
Share issue costs - - - - - -
Total transactions with owners, recognised directly in equity 497 463,563 - - - 464,060
Balance at 30 September 2022 11,290,980 53,057,125 926,213 440,706 (59,865,940) 5,848,084
Loss for the year - - - - (1,772,670) (1,772,670)
Loss on exchange translation - - (360,099) - - (360,099)
Total comprehensive loss - - (360,099) - (1,772,670) (2,132,769)
Shares issued 1,352 1,132,356 - - - 1,133,708
Share issue costs - (42,000) - - - (42,000)
Shares issued for services 83 47,917 - - - 48,000
Share based payment - - - 156,380 - 156,380
Total transactions with owners, recognised directly in equity 1,435 1,138,273 - - - 1,296,088
Balance at 30 September 2023 11,292,415 54,195,398 566,114 597,086 (61,638,610) 5,012,403
Share capital Share premium Other reserves Retained reserves Total
(Note 13) (Note 13)
£ £ £ £ £
Balance at 30 September 2021 11,290,483 52,593,562 440,706 (55,386,253) 8,938,498
Loss for the year - - - (2,251,490) (2,251,490)
Total comprehensive expense - - - (2,251,490) (2,251,490)
Shares issued 497 463,563 - - 464,060
Share issue costs - - - - -
Total transactions with owners, recognised directly in equity 497 463,563 - - 464,060
Balance at 30 September 2022 11,290,980 53,057,125 440,706 (57,637,742) 7,151,069
Loss for the year - - - (3,104,695) (3,104,695)
Total comprehensive expense - - - (3,104,695) (3,104,695)
Shares issued 1,352 1,132,356 - - 1,133,708
Share issue costs - (42,000) - - (42,000)
Shares issued for services 83 47,917 - - 48,000
Share based payments - - 156,380 - 156,380
Total transactions with owners, recognised directly in equity 1,435 1,138,273 156,380 - 1,296,088
Balance at 30 September 2023 11,292,415 54,195,398 597,086 (60,742,437) 5,342,462
The accompanying notes on pages 59 to 82 form part of these financial
statements.
The following describes the nature and purpose of each reserve within equity:
Reserve Description and purpose
Share capital Amount subscribed for share capital at the nominal value of £0.01 per
ordinary share
Share premium Amount subscribed for share capital in excess of nominal value, net of share
issue costs
Share based payments reserve Amounts recognised for share-based payment transactions including share
options granted to employees and other parties
Retained earnings / (loss) Cumulative net gains and losses recognised in the consolidated statement of
comprehensive income
Group Company
Year ended 30 September Year ended 30 September Year ended Year ended 30 September
30 September
Note 2023 2022 2023 2022
£ £ £ £
Net cash used in operations 20 (1,183,552) (918,135) (869,282) (733,226)
Investing activities
Purchase of property, plant & equipment 8 (167,948) (90,321) (5,410) (2,541)
Increase in exploration assets 10 (779,251) (1,674,046) - (314,663)
Investment in subsidiary - - - (22,543)
Investment in available for sale assets - (10,000) - (10,000)
Proceeds from sale of property, plant and equipment 509,212 88,634 - 42,952
Loan to subsidiary - - (210,931) (659,033)
Interest income 7 3,112 651 1,106 265
Net cash used in investing activities (434,875) (1,685,082) (215,235) (965,563)
Financing activities
Proceeds from issue of share capital (net of issue costs) 858,000 464,060 858,000 464,060
Net cash from financing activities 858,000 464,060 858,000 464,060
Net change in cash and cash equivalents (760,427) (2,139,157) (226,517) (1,234,729)
Cash and cash equivalents at beginning of the year 842,889 2,982,046 233,106 1,467,835
Effect of change in foreign exchange rates - - - -
Cash and cash equivalents at end of the year 12 84,462 842,889 6,589 233,106
Non-cash transactions:
Shares issued for exploration assets 199,999
Shares issued for services
81,709
The accompanying notes on pages 59 to 82 form part of these financial
statements.
Notes to the Financial Statements:
1. GENERAL INFORMATION
1.1 Group
The Company and the Group operated mineral exploration and development
projects. The Group's principal interests are located in Australia and the
Philippines.
The Company is a public limited company incorporated and domiciled in England.
The registered office of the Company and its principal place of business is
Office T3, Hurlingham Studios, Ranelagh Gardens, London SW6 3PA. The Company
is quoted on the Alternative Investment Market (AIM) of the London Stock
Exchange.
1.2 Company income statement
The Company has taken advantage of Section 408 of the Companies Act 2006 and
has not included its own profit and loss account in these financial
statements. The loss for the financial period dealt with in the accounts of
the Company amounted to £3,104,695.
2. PRINCIPAL ACCOUNTING POLICIES
2.1 Overall considerations
The principal accounting policies that have been used in the preparation of
these consolidated financial statements are set out below. The policies have
been consistently applied unless otherwise stated.
2.2 Basis of preparation
The Consolidated Financial Statements of the Group and Company have been
prepared in accordance with UK-adopted international accounting standards in
conformity with the requirements of the Companies Act 2006 and regulations
made under it. The Company Financial Statements have been prepared under the
historical cost convention. The principal accounting policies are set out
below and have, unless otherwise stated, been applied consistently for all
periods presented in these Consolidated Financial Statements.
The financial statements are prepared in pounds sterling and amounts are
rounded to the nearest thousand.
(i) New and amended standards, and interpretations issued and
effective for the financial year beginning 1 October 2022
There were no new standards, amendments or interpretations effective for the
first time for periods beginning on or after 1 October 2022 that had a
material effect on the Group or Company financial statements.
(ii) New standards, amendments and interpretations in issue but
not yet effective
At the date of approval of these financial statements, the following standards
and interpretations which have not been applied in these financial statements
were in issue for the period beginning 1 January 2023 but not yet effective:
§ Amendments to IAS 1: Classifications of current or non-current liabilities
(effective 1 January 2024);
§ Amendments to IAS 8: Accounting Policies, Changes to Accounting Estimates
and Errors (effective 1 January 2023);
§ Amendments to IAS 12: Income Taxes - Deferred Tax arising from a Single
Transaction (effective 1 January 2023).
§ Amendments to IAS 1: Presentation of Financial Statements and IFRS Practice
Statement 2: Disclosure of Accounting Policies (effective 1 January 2023).
§ Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates
and Errors -Definition of Accounting Estimates - effective 1 January 2023
§ Amendments to IAS 12 Deferred Tax Related to Assets and Liabilities arising
from a Single Transaction - effective 1 January 2023
The Directors do not expect that the adoption of these standards will have a
material impact on the financial information of the Group or Company in future
periods.
2.3 Basis of consolidation
Where the Group has control over an investee, it is classified as a
subsidiary. The Group controls an investee if all three of the following
elements are present: power over the investee, exposure to variable returns
from the investee and the ability of the investor to use its power to affect
those variable returns. Control is reassessed whenever facts and circumstances
indicate that there may be a change in any of these elements of control.
De-facto control exists in situations where the Group has the practical
ability to direct the relevant activities of the investee without holding the
majority of the voting rights. The Group controls an entity when the Group is
exposed to, or has rights to, variable returns from its involvement with the
entity and has the ability to affect those returns through its power over the
entity.
The consolidated financial statements present the results of the Group as if
they formed a single entity. Intercompany transactions and balances between
group companies are eliminated in full.
The consolidated financial statements incorporate the financial statements of
the Company and one of its subsidiaries made up to 30 September 2023.
Subsidiary undertakings acquired during the period are recorded under the
acquisition method of accounting and their results consolidated from the date
of acquisition, being the date on which the Company obtains control, and
continue to be consolidated until the date such control ceases.
The subsidiaries included are as follows:
Mercator Gold Australia Pty Ltd
Lux Exploration Pty Ltd
Cordillera Tiger International Resources Inc. (up to 19 June 2023 - see Note
10)
Warm Springs Renewable Energy Corporation
Copper Flat Corporation (formerly New Mexico Copper Corporation)
2.4 Going concern
The Financial Statements have been prepared on the going concern basis and do
not include the adjustments that would result if the Group was unable to
continue as a going concern. The financial statements have been prepared on
a going concern basis which assumes that the Company will continue in
operational existence for the foreseeable future.
The Company is currently financed through investment by its shareholders and
during the period the Company raised £900,000 before costs, from the issue of
shares. The Company made a loss for the period of £1,772,670 before taxation
and foreign exchange adjustments. Nonetheless, the Company held bank balances
of £84,338 at the year end.
In assessing whether the going concern assumption is appropriate, the
Directors consider all available information for the foreseeable future, in
particular for the twelve months from the date of approval of the financial
statements. This information includes management prepared cash flows
forecasts, the Company's current cash balances and the Company's existing and
projected monthly running costs. Furthermore, the Directors are mindful that,
if the Company needs to raise further funds over the 12 months following
approval of the financial statements to execute its strategy and for working
capital, it has the ability to access additional financing, if required, over
the next 12 months. Specifically, the Company successfully completed two
fundraisings in 2023 through the issue of new ordinary shares and, in
addition, has raised a further £585,000 before costs in March 2024.
Therefore, the Directors have made an informed judgement at the time of
approving the financial statements that there is a reasonable expectation that
the Company has adequate resources to continue in operational existence for
the foreseeable future. Thus, they continue to adopt the going concern basis
of accounting in preparing the financial statements. However, as there can
be no certainty that required cash can be readily raised from future
financings, there remains a material uncertainty that may cause significant
doubt about the Group to continue as a going concern.
The auditors have made reference to going concern by way of a material
uncertainty within their audit report.
2.5 Foreign currency translation
The consolidated financial statements are presented in pounds sterling which
is the functional and presentational currency representing the primary
economic environment of the Group.
Foreign currency transactions are translated into the respective functional
currencies of the Company and its subsidiaries using the exchange rates
prevailing at the date of the transaction or at an average rate where it is
not practicable to translate individual transactions. Foreign exchange gains
and losses are recognised in the income statement.
Monetary assets and liabilities denominated in a foreign currency are
translated at the rates ruling at the Statement of Financial Position date.
The assets and liabilities of the Group's foreign operations are translated at
exchange rates ruling at the Statement of Financial Position date. Income and
expense items are translated at the average rates for the period. Exchange
differences are classified as equity and transferred to the Group's exchange
reserve. Such differences are recognised in the income statement in the
periods in which the operation is disposed of.
2.6 Cash and cash equivalents
Cash includes petty cash and cash held in current bank accounts. Cash
equivalents include short-term investments that are readily convertible to
known amounts of cash and which are subject to insignificant risk of changes
in value.
2.7 Investment in subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an
entity when it is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns
through its power over the entity.
The investments in subsidiaries held by the Company are valued at cost less
any provision for impairment that is considered to have occurred, the
resultant loss being recognised in the income statement.
2.8 Financial instruments
Financial assets
The Group's financial assets comprise equity investments held as financial
assets at fair value through profit or loss as required by IFRS 9, and
financial assets at amortised cost, being cash and cash equivalents and
receivables balances. Financial assets are assigned to the respective
categories on initial recognition, based on the Group's business model for
managing financial assets, which determines whether cash flows will result
from collecting contractual cash flows, selling the financial assets, or both.
Financial assets at amortised cost are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active market. These
assets are initially measured at fair value plus transaction costs directly
attributable to their acquisition or issue, and are subsequently carried at
amortised cost using the effective interest rate method, less provision for
impairment under the expected credit loss model.
The Group's receivables fall into this category of financial instruments.
Discounting is omitted where the effect of discounting is immaterial.
Equity investments are held as financial assets at fair value through profit
or loss. These assets are initially recognised at fair value and subsequently
carried in the financial statements at fair value, with net changes recognised
in profit or loss.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part
of a group of similar financial assets) is primarily derecognised (i.e.,
removed from the Group's consolidated statement of financial position) when:
• The rights to receive cash flows from the asset have expired;
or
• The Group has transferred its rights to receive cash flows
from the asset or has assumed an obligation to pay the received cash flows in
full without material delay to a third party under a 'pass-through'
arrangement; and either (a) the Group has transferred substantially all the
risks and rewards of the asset, or (b) the Group has neither transferred nor
retained substantially all the risks and rewards of the asset, but has
transferred control of the asset.
Impairment of financial assets
The Group recognises an allowance for expected credit losses ("ECLs") for all
debt instruments not held at fair value through profit or loss.
The amount of the expected credit loss is measured as the difference between
all contractual cash flows that are due in accordance with the contract and
all the cash flows that are expected to be received (i.e. all cash
shortfalls), discounted at the original effective interest rate (EIR).
For trade receivables (not subject to provisional pricing) and other
receivables due in less than 12 months, the Group applies the simplified
approach in calculating ECLs, as permitted by IFRS 9. Therefore, the Group
does not track changes in credit risk, but instead, recognises a loss
allowance based on the financial asset's lifetime ECL at each reporting date.
Financial liabilities
All financial liabilities are recognised initially at fair value and, in the
case of loans and borrowings and payables, net of directly attributable
transaction costs.
The Group's financial liabilities include trade and other payables and are
held at amortised cost. After initial recognition, trade and other payables
are subsequently measured at amortised cost using the EIR method. Gains and
losses are recognised in the statement of profit or loss and other
comprehensive income when the liabilities are derecognised, as well as through
the EIR amortisation process.
Derecognition
A financial liability is derecognised when the associated obligation is
discharged or cancelled or expires. When an existing financial liability is
replaced by another from the same lender on substantially different terms, or
the terms of an existing liability are substantially modified, such an
exchange or modification is treated as the derecognition of the original
liability and the recognition of a new liability. The difference in the
respective carrying amounts is recognised in profit or loss and other
comprehensive income.
2.9 Exploration and Development costs
All costs associated with mineral exploration and investments are capitalised
on a project-by-project basis, pending determination of the feasibility of the
project. Costs incurred include appropriate technical and administrative
expenses but not general overheads. If an exploration project is successful,
the related expenditures will be transferred to mining assets and amortised
over the estimated life of the commercial ore reserves on a unit of production
basis. Where a licence is relinquished or a project abandoned, the related
costs are written off in the period in which the event occurs. Where the Group
maintains an interest in a project, but the value of the project is considered
to be impaired, a provision against the relevant capitalised costs will be
raised. The recoverability of all exploration and development costs is
dependent upon continued good title to relevant assets being held, the
discovery of economically recoverable reserves, the ability of the Group to
obtain necessary financing to complete the development of reserves and future
profitable production or proceeds from the disposition thereof.
2.10 Property, Plant and Equipment
Tangible fixed assets are measured at historical cost, less accumulated
depreciation and any provision for impairment losses. Historical cost includes
expenditure that is directly attributable to bringing the assets to the
location and condition necessary for it to be capable of operating in the
manner intended by management.
Depreciation is charged on each part of an item of tangible fixed assets so as
to write off the cost of assets less the residual value over their estimated
useful lives, using the straight-line method. Depreciation is charged to the
income statement. The estimated useful lives are as follows:
Office equipment 3 years
Furniture and fittings 5 years
Machinery and equipment 5 years
Motor Vehicles 5 years
Land Not depreciated
Useful economic lives and estimated residual values are reviewed annually and
adjusted as appropriate.
Expenses incurred in respect of the maintenance and repair of property, plant
and equipment are charged against income when incurred. Refurbishments and
improvements expenditure, where the benefit is expected to be long lasting, is
capitalised as part of the appropriate asset.
An item of property, plant and equipment ceases to be recognised upon disposal
or when no future economic benefits are expected from its use or disposal. Any
gain or loss arising on cessation of recognition of the asset (calculated as
the difference between the net disposal proceeds and the carrying amount of
the asset) is included in the income statement in the year the asset ceases to
be recognised.
2.11 Impairment testing of intangible and tangible assets
At each balance sheet date, the Company assesses whether there is any
indication that the carrying value of any asset may be impaired. If any such
indication exists, the recoverable amount of the asset is estimated in order
to determine the extent of the impairment loss (if any).
2.12 Leases
Assets and liabilities arising from a lease are initially measured on a
present value basis. The lease payments are discounted using the interest rate
implicit in the lease. If that rate cannot be readily determined, the lessee's
incremental borrowing rate is used, being the rate that the individual lessee
would have to pay to borrow the funds necessary to obtain an asset of similar
value to the right-of-use asset. Lease payments are allocated between
principal and finance cost. All other short term leases are regarded as
operating leases and the payments made under them are charged to the income
statement on a straight-line basis over the lease term.
2.13 Equity
Equity comprises the following:
· "Share capital" represents the nominal value of equity shares, both
ordinary and deferred.
· "Share premium" represents the excess over nominal value of the fair
value of consideration received for equity shares, net of expenses of the
share issues.
· "Other reserves" represent the fair values of share options and
warrants issued.
o "Retained reserves" include all current and prior year results, including
fair value adjustments on financial assets, as disclosed in the consolidated
statement of comprehensive income.
"Exchange reserve" includes the amounts described in more detail in the
following note on foreign currency below.
2.14 Share-based payments
During the period, the Company issued share options to directors and employees
and shares were issued to certain PR consultants as part of their fees. The
issue of share options constituted a modification to share options that had
previously been issued by the Company as explained further in Note 2.21 below.
All goods and services received in exchange for the grant of any share-based
payment are measured at their fair values. Where employees are rewarded using
share-based payments, the fair values of employees' services are determined
indirectly by reference to the fair value of the instrument granted to the
employee.
The fair value is appraised at the grant date and excludes the impact of
non-market vesting conditions. Fair value is measured by use of the Black
Scholes model. The expected life used in the model has been adjusted, based on
management's best estimate, for the effects of non-transferability, exercise
restrictions, and behavioural considerations.
All equity-settled share-based payments are ultimately recognised as an
expense in the income statement with a corresponding credit to "other
reserves".
If vesting periods or other non-market vesting conditions apply, the expense
is allocated over the vesting period, based on the best available estimate of
the number of share options expected to vest. Estimates are subsequently
revised if there is any indication that the number of share options expected
to vest differs from previous estimates. Any cumulative adjustment prior to
vesting is recognised in the current period. No adjustment is made to any
expense recognised in prior years if share options ultimately exercised are
different to that estimated on vesting.
Upon exercise of share options, the proceeds received net of attributable
transaction costs are credited to share capital and, where appropriate, share
premium.
A gain or loss is recognised in profit or loss when a financial liability is
settled through the issuance of the Company's own equity instruments. The
amount of the gain or loss is calculated as the difference between the
carrying value of the financial liability extinguished and the fair value of
the equity instrument issued.
2.15 Taxation
The tax expense for the period comprises current tax. Tax is recognised in the
income statement, except to the extent that it relates to items recognised
directly in equity. In this case the tax is also recognised directly in other
comprehensive income or directly in equity, respectively.
The current income tax charge is calculated on the basis of the tax laws
enacted or substantively enacted at the end of the reporting period in the
countries where the Group operates and generates taxable income. Management
periodically evaluates positions taken in tax returns with respect to
situations in which applicable tax regulation is subject to interpretation. It
establishes provisions where appropriate on the basis of amounts expected to
be paid to the tax authorities.
Deferred tax represents the tax expected to be payable or recoverable on the
temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for taxation purposes.
The Company has tax losses which can be used to offset future profits.
A deferred tax asset is recognised only to the extent that it is probable
that future taxable profits will be available against which the asset can be
utilised. No deferred tax asset has been recognised in the current period.
2.16 Provisions
A provision is recognised in the Statement of Financial Position when the
Group or Company has a present legal or constructive obligation as a result of
a past event, and it is probable that an outflow of economic benefits will be
required to settle the obligation. If the effect is material, provisions are
determined by discounting the expected future cash flows at a pre-tax rate
that reflects current market assessments of the time value of money and, where
appropriate, the risks specific to the liability.
2.17 Critical accounting judgements and key sources of estimation
uncertainty
In the process of applying the entity's accounting policies, management makes
estimates and assumptions that have an effect on the amounts recognised in the
financial information. Although these estimates are based on management's best
knowledge of current events and actions, actual results may ultimately differ
from those estimates. The key assumptions concerning the future, and other
key sources of estimation uncertainty at the balance sheet date, that have a
significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial period, are those relating to
the valuation of share based payments.
Capitalisation and recoverability of exploration costs (Note 10):
Capitalised exploration and evaluation costs consist of direct costs, licence
payments and fixed salary/consultant costs, capitalised in accordance with
IFRS 6 "Exploration for and Evaluation of Mineral Resources". The group and
company recognises expenditure as exploration and evaluation assets when it
determines that those assets will be successful in finding specific mineral
assets. Exploration and evaluation assets are initially measured at
cost. Exploration and evaluation costs are assessed for indications of
impairment at each reporting date. Where the carrying amount of an asset
exceeds its recoverable amount an impairment is recognised. Any impairment
is recognised directly in profit or loss.
Recoverability of investment in subsidiaries including intra group receivables
(Note 9 and 11)
The recoverability of investments in subsidiaries, including intra group
receivables, is directly linked to the recoverability of the exploration
assets in those entities, which is subject to the same estimates and
judgements as explained above.
3. OPERATING LOSS
Year ended Year ended
30 September 30 September 2022
2023
The operating loss is stated after charging: £ £
Depreciation of property, plant and equipment 131,541 104,165
Operating lease expenses 46,004 44,843
Auditors' remuneration - fees payable to the Company's auditor for the audit 40,000 32,000
of the parent company and consolidated financial statements
Auditors' remuneration - fees payable to the Company's auditor for non-audit 3,978 3,456
of the parent company and consolidated financial statements
4. EARNINGS PER SHARE
Basic and Diluted Year ended 30 September 2023 Year ended 30 September 2022
Weighted number of shares in issue during the year 1,150,924,615 1,039,370,796
£ £
Loss from continuing operations attributable to owners of the parent (1,772,670) (2,614,873)
Basic earnings per share has been calculated by dividing the loss attributable
to equity holders of the company after taxation by the weighted average number
of shares in issue during the year. There is no difference between the basic
and diluted earnings per share as the effect on the exercise of options and
warrants would be to decrease the earnings per share.
Details of share options and warrants that could potentially dilute earnings
per share in future periods is set out in Note 13.
5. INCOME TAX
The relationship between the expected tax expense based on the corporation tax
rate of 25% for the year ended 30 September 2023 (2022: 19%) and the tax
expense actually recognised in the income statement can be reconciled as
follows:
Year ended 30 September Year ended
30 September
2023 2022
£ £
Group loss for the year (1,772,670) (2,614,873)
Loss on activities at effective rate of corporation tax of 25% (2022: 19%) (443,167) (496,826)
Expenses not deductible for tax purposes 14,424 11,540
Loss on disposal of subsidiary not deductible for tax purposes - -
Income not taxable 11,253 4,363
Depreciation in excess of capital allowances 131,541 104,165
Loss carried forward on which no deferred tax asset is recognised 285,948 376,758
The Company has unused tax losses of approximately £8,386,000 (2022
£8,100,000) to carry forward and set against future profits; and the Company
has capital losses of £197,000 to carry forward and set against future
capital gains of the Company. The related deferred tax asset has not been
recognised in respect of these losses as there is no certainty in regard to
the level and timing of future profits.
6. STAFF NUMBERS AND COSTS
Group and Company
Year ended 30 September Year ended 30 September
2023 2022
Number Number
Directors 5 4
Administration 3 3
Total 8 7
The aggregate payroll costs of these persons were as follows:
£ £
Staff wages and salaries 109,281 140,167
Directors' cash based emoluments 203,294 198,739
Social security costs 10,209 24,544
Pension contributions 4,877 1,456
327,661 364,906
The remuneration of the directors, who are the key management personnel of the
Group, in aggregate for each of the categories specified in IAS 24 'Related
Party Disclosures' was as follows:
£ £
Directors' cash based emoluments 203,294 198,739
Pension contributions - 1,456
203,294 200,195
Directors' remuneration
As required by AIM Rule 19, details of remuneration earned in respect of the
financial year ended 30 September 2023 by each Director are set out below:
Salary Consulting fees Total
Paid Accrued Paid Accrued
Director £ £ £ £ £
W Tang 40,000 8,000 1,150 - 49,150
N Tulloch - 500 - - 500
A Jones 25,000 5,000 51,644 - 81,644
T Davenport 30,000 6,000 - - 36,000
A Scott 30,000 6,000 - - 36,000
125,000 25,000 52,794 - 203,294
Year ended 30 September 2022:
Salary Consulting fees Total
Paid Accrued Paid Accrued
Director £ £ £ £ £
C Brown 17,727 - - - 17,727
W Tang 48,000 - 28,300 400 76,700
A Jones 30,000 - 80,808 - 110,808
T Davenport 36,000 - 6,400 - 42,400
A Scott 27,000 - 7,000 - 34,000
158,727 - 122,508 400 281,635
The highest paid Director received remuneration of £81,644 (2022: £110,808),
excluding share-based payments.
7. FINANCE INCOME
Year ended 30 September 2023 Year ended 30 September 2022
Finance income £ £
Interest on cash and cash equivalents 3,111 651
3,111 651
8. TANGIBLE FIXED ASSETS
Group Furniture & fittings Office Equipment Machinery & equipment Land & Building Total
Cost £ £ £ £ £
At 1 October 2022 3,681 41,239 553,723 766,220 1,364,863
Additions 759 4,651 162,537 - 167,947
Disposal - - (273,707) (461,130) (734,837)
FX Rate Differences (50,246) (27,270) (77,516)
At 30 September 2023 4,440 45,890 392,307 277,821 720,457
Depreciation
At 1 October 2022 3,158 25,071 148,443 - 176,672
Depreciation for the year 251 7,802 123,512 - 131,565
Disposal - - (158,253) - (136,304)
FX Rate Differences - - (19,124) - (19,124)
At 30 September 2023 3,409 32,873 116,526 - 152,808
Net book value
At 1 October 2022 523 16,168 405,281 766,220 1,188,192
At 30 September 2023 1,031 13,017 275,781 277,821 567,649
Company Furniture & fittings Office Equipment Machinery & equipment Land and Building Total
Cost £ £ £ £ £
At 1 October 2022 1,589 29,778 6,824 - 38,191
Additions 759 4,651 - - 5,410
At 30 September 2023 2,348 34,429 6,824 - 43,601
Depreciation
At 1 October 2022 1,066 22,453 6,824 - 30,343
Depreciation for the year 251 5,710 - - 5,961
At 30 September 2023 1,317 28,163 6,824 - 36,304
Net book value
At 1 October 2022 523 7,325 - - 7,848
At 30 September 2023 1,031 6,266 - - 7,297
The Group and the Company's property, plant and equipment are free from any
mortgage or charge. The comparable table for 2022 is detailed below.
Group Furniture & fittings Office Equipment Machinery & equipment Land and Building Total
Cost £ £ £ £ £
At 1 October 2021 2,982 37,240 513,136 822,705 1,376,063
Additions 699 3,999 85,623 90,321
Disposal - - (45,036) (56,485) (101,521)
At 30 September 2022 3,681 41,239 553,723 766,220 1,364,863
-
Depreciation 2,982 17,415 52,110 72,507
At 1 October 2021
Depreciation for the year 176 7,656 96,333 - 104,165
At 30 September 2022 3,158 25,071 148,443 - 176,672
Net book value
At 1 October 2021 - 19,825 461,027 822,705 1,303,557
At 30 September 2022 523 16,168 405,281 766,220 1,188,192
Company Furniture & fittings Office Equipment Machinery & equipment Land and Building Total
Cost £ £ £ £ £
At 1 October 2021 890 27,936 51,860 - 80,686
Additions 699 1,842 - - 2,541
Disposal - - (45,036) - (45,036)
At 30 September 2022 1,589 29,778 6,824 - 38,191
Depreciation
At 1 October 2021 890 17,040 4,424 - 22,354
Depreciation for the year 176 5,413 2,400 - 7,989
At 30 September 2022 1,066 22,453 6,824 - 30,343
Net book value
At 1 October 2021 - 10,896 47,436 - 58,493
At 30 September 2022 523 7,325 - - 7,848
9. INVESTMENTS
Investment in subsidiaries
£
Cost as at 1 October 2022 22,543
Impairment (22,542)
Balance at 30 September 2023 1
The comparable table for 2022 is detailed below:
Investment in subsidiaries
£
Cost as at 1 October 2021 272
Additions 22,543
Disposal (272)
Balance at 30 September 2022 22,543
Investment in subsidiaries
At 30 September 2023, the Company had interests in the following subsidiary
undertakings:
Subsidiaries: Principal country of incorporation Principal activity Description and effective country of operation Proportion of shares held
Mercator Gold Australia Pty Ltd Australia Mineral Exploration Australia 100%
Warm Springs Renewable Energy Corporation USA Dormant USA 90%
Copper Flat Corporation USA Dormant USA 100%
Lux Exploration Pty Ltd Australia Mineral Exploration Australia 100%
Corderilla Tiger International Resources Philippines Mineral Exploration Philippines 90%
Inc.*
*As explained in Note 10, Corderilla Tiger International Resources Inc. has
been deconsolidated from the Group accounts with effect from 19 June
2023.
Registered office addresses of the subsidiaries are as follows:
Mercator Gold Australia Pty Ltd 58 Gipps Street, Collingwood Victoria, 3066, Australia
Warm Springs Renewable Energy Corporation 315 Paseo de Peralta, Santa Fe, NM 87501, USA
Copper Flat Corporation (formerly New Mexico Copper Corporation) 315 Paseo de Peralta, Santa Fe, NM 87501, USA
Lux Exploration Pty Ltd 58 Gipps Street, Collingwood Victoria, 3066, Australia
Cordillera Tiger International Resources RM 2 4/F D Restaurant Bldg. Dangwa Terminal Baguio
Inc.
Financial assets at fair value through profit or loss
2023 2022
£ £
Quoted investments
At 1 October 45,084 31,461
Additions - 10,000
Fair value movements (34,694) 3,623
At 30 September 10,390 45,084
The financial asset at 30 September 2023 and 2022 comprises shares in Tiger
International Resources, Inc. and Unicorn Mineral Resources which are held at
fair value through profit or loss in accordance with IFRS 9 Financial
Instruments.
10. INTANGIBLE ASSETS - exploration and development costs
Group Company
2023 2022 2023 2022
£ £ £ £
At 1 October 3,760,919 3,321,481 147,985 1,410,144
Additions 979,251 1,993,719 199,999 292,123
Impairment - (1,554,281) - (1,554,281)
FX Rate Difference (319,573) - - -
At 30 September 4,420,597 3,760,919 347,984 147,985
A summary of exploration and development costs of the Group is presented
below:
2023 2022
£ £
Central Victorian Gold Projects, Australia 4,032,544 3,760,919
Queensland Gold Projects, Australia 388,053 -
At 30 September 4,420,597 3,760,919
Danglay Gold Project, Philippines
As at 30 September 2023, the Group reassessed its involvement in the
Philippines in accordance with IFRS 10's definition and guidance on control.
As a result of the officers and directors of Cordillera Tiger not acting in
accordance with the Group's instructions during the period, the Group has
concluded it has no significant influence and no outright control in making
its judgement in respect of its Philippines assets. Management have considered
the Group's voting rights, the relative size and dispersion of the voting
rights held by other shareholders and the recent inactivity by those
shareholders. Recent experience demonstrates that a sufficient number of the
smaller shareholders, who are also directors of the Philippines company, have
operated in such a way that has prevented the Group from having the practical
ability to direct and gain access to financial and other information that is
pertinent to running that company.
With effect from 19 June 2024 the Board has considered that the Group ceased
to be able to exercise control over CTGRI and therefore it has derecognised
the assets and liabilities of the subsidiary at their carrying amounts.
Subsequent to that date, the Group has accounted for all amounts previously
recognised in other comprehensive income in relation to CTGRI as if the Group
had directly disposed of the related assets or liabilities. The consequences
of losing control of CTGRI is insignificant as Group is mainly focussed on its
main operations in Australia. Furthermore, the Group believes it has no
further or ongoing liabilities in respect of CTGRI as it has no contractual
arrangements that require the Group to provide financial support or assist
CTGRI with other sources of funding. Consequently, there is no potential
exposure to any further loss.
11. TRADE AND OTHER RECEIVABLES
Group Company
2023 2022 2023 2022
£
£
£
£
Non-current assets
Amount owed by a subsidiary - - 4,005,390 5,792,859
Current assets
Amount owed by a subsidiary - - 1,085,560 938,073
Other receivables 43,145 99,365 18,713 50,933
Prepayments and accrued income 42,238 48,678 38,072 48,563
85,383 148,043 1,142,345 1,037,568
12. CASH AND CASH EQUIVALENTS
Cash and cash equivalents
Group Company
2023 2022 2023 2022
£
£
£ £
Cash and cash equivalents consisted of the following:
Deposits at banks 82,462 842,889 6,587 233,106
82,462 842,889 6,587 233,106
13. SHARE CAPITAL AND SHARE PREMIUM ACCOUNTS
The share capital of the Company consists of three classes of shares: ordinary
shares of 0.001p each which have equal rights to receive dividends or capital
repayments and each of which represents one vote at shareholder meetings; and
two classes of deferred shares, one of 9.9p each and the other of 0.099p each,
which have limited rights as laid out in the Company's articles.
In particular deferred shares carry no right to dividends or to attend or vote
at shareholder meetings and deferred share capital is only repayable after the
nominal value of the ordinary share capital has been repaid.
a) Changes in issued share capital and share premium
Deferred Deferred 'B' Deferred
Number of shares Ordinary shares 9.9p 0.099p 0.199p Total shares Share premium
shares shares shares Total
£ £ £ £ £ £ £
At 1 October 2022 1,064,464,551 10,644 7,194,816 3,828,359 257,161 11,290,980 53,057,125 64,348,105
Issue of shares 135,185,790 1,352 - - - 1,352 1,132,355 1,133,707
less costs - - - - - - (42,000) (42,000)
Shares issued in payment of creditors 8,325,674 83 - - - 83 47,917 48,000
Balance at 1,207,976,015 12,079 7,194,816 3,828,359 257,161 11,292,415 54,195,397 65,487,812
30 September 2023
All the shares issued are fully paid up and none of the Company's shares are
held by any of its subsidiaries.
b) Potential issue of ordinary shares
Share options
The number and weighted average exercise prices of share options valid at the
year-end are as follows:
Weighted average exercise price Number of Weighted average exercise price Number of
options options
2023 2023 2022 2022
£ £
Exercisable at the beginning of the year 0.023 60,276,984 0.0113 17,035,127
Granted during the year 0.020 57,000,000 0.027 45,000,000
Exercised during the year - - - -
Expired during the year 0.01125 (1,200,000) 0.0175 (1,758,143)
Exercisable at the end of the year 0.022 116,076,984 0.023 60,276,984
The options outstanding at 30 September 2023 have a weighted average remaining
contractual life of 3 year and 2 months (2022: four year and three months).
Subsequent to the year end, the Company cancelled 54,000,000 share options.
The options outstanding at the end of the year have the following expiry date
and exercise prices:
Date granted Expiry Date Exercise Price No. of Options
27 February 2017 28 October 2024 £0.01725 4,076,984
30 July 28 October 2024 £0.01125 10,000,000
2018
23 January 22 January 2027 £0.022 35,000,000
2022
23 January 22 January 2027 £0.044 10,000,000
2022
16 April 15 April 2028 £0.011 19,000,000
2023
16 April 15 April 2028 £0.022 19,000,000
2023
16 April 15 April 2028 £0.033 19,000,000
2023
Share-based payments
There were no options exercised during the year.
Share warrants Weighted average exercise price 2023 Number of warrants exercised price 2023 Weighted average exercise price 2022 Number of warrants exercised price 2022
Exercisable at the beginning of the year 0.0375 49,999,999 0.02878 159,940,371
Exercised during the year - - 0.01 (47,906,000)
Expired during the year (0.0375) (49,999,999) 0.0205 (62,034,372)
Granted during the year 0.015 99,999,986 - -
Exercisable at the end of the year 0.015 99,999,986 0.0375 49,999,999
There were no warrants outstanding at the end of the year.
14. TRADE AND OTHER PAYABLES
Group Company
2023 2022 2023 2022
£ £ £ £
Trade payables 62,902 149,938 35,183 109,098
Social security and employee taxes 16,637 16,489 2,432 2,226
Other creditors and accruals 74,562 40,257 63,427 24,601
156,101 206,684 101,042 135,925
Trade payables and accruals principally comprise amounts outstanding for trade
purchases and continuing costs. The Directors consider that the carrying
amount of trade and other payables approximates to their fair value. See
also Note 18.
15. CAPITAL MANAGEMENT
The Group's objective when managing capital is to safeguard the entity's
ability to continue as a going concern and develop its mineral exploration and
development and other activities to provide returns for shareholders and
benefits for other stakeholders.
The Group's capital structure comprises all the components of equity (all
share capital, share premium, retained earnings when earned and other
reserves). When considering the future capital requirements of the Group and
the potential to fund specific project development via debt, the Directors
consider the risk characteristics of the underlying assets in assessing the
optimal capital structure.
16. RELATED PARTY TRANSACTIONS
Group Company
2023 2022 2023 2022
£ £ £ £
Amounts owed to Directors 25,000 400 25,000 479
Details of Directors' emoluments are disclosed in Note 6. The amounts owed to
Directors relate to accrued emoluments, consulting fees and expenses due.
During the year the Company provided additional advances of £188,149 under a
loan to Mercator Gold Australia Pty Ltd and charged expenses and management
fees of £147,487. The balance owed to the Company is shown in Note 11.
The Company and the Group have no ultimate controlling party.
17. COMMITMENTS AND CONTINGENCIES
Capital expenditure commitment
As at 30 September 2023, the Group has a commitment expenditure of A$650,000
for the first three years across the three licence areas in the Lolworth
Range, Queensland and a commitment expenditure of A$314,000 for its three
tenements in Victoria.
Contingencies
The Group entered into no agreements during the year ended 30 September 2023
which would result in disclosure of contingent assets or liabilities.
Leases
The Company has no operating leases.
18. FINANCIAL INSTRUMENTS
Group 2023 2022
£ £
Financial assets (amortised cost)
Trade and other receivables (excluding prepayments) 43,145 99,072
Cash and cash equivalents 82,462 842,889
125,607 941,961
Financial assets (fair value through profit or loss)
Equity investments 10,390 45,084
10,390 45,084
Financial liabilities (amortised cost)
Trade and other payables 154,101 206,684
154,101 206,684
2023 2022
Company £ £
Financial assets (amortised cost)
Trade and other receivables (excluding prepayments) 1,027,781 989,006
Cash and cash equivalents 6,589 233,106
Long-term borrowings, intra-group 4,005,390 5,792,859
5,039,760 7,014,971
Financial assets (fair value through profit or loss)
Equity investments 10,390 45,084
10,390 45,084
Financial liabilities (amortised cost)
Trade and other payables 101,042 135,925
101,042 135,925
Risk m
Management objectives and policies
The Group's principal financial assets comprise cash and cash equivalents,
trade and other receivables, investments and prepayments. The Group's
liabilities comprise trade payables, other payables including taxes and social
security, and accrued expenses.
The Board determines as required the degree to which it is appropriate to use
financial instruments, commodity contracts or other hedging contracts to
mitigate financial risks.
Credit risk
The Group's cash and cash equivalents are held with major financial
institutions. The Group monitors credit risk by reviewing the credit quality
of the financial institutions that hold the cash and cash equivalents and
restricted cash. The fair value of cash and cash equivalents at 30 September
2023 and 30 September 2022 did not differ materially from their carrying
value.
Management believes that the Group's exposure to credit risk is manageable.
The Company manages its current VAT receivables by submitting VAT returns on a
quarterly basis. This allows the Company to receive the VAT in a timely
matter while any amounts that may come under scrutiny. Management has no
formal credit policy in place for customers and the exposure to credit risk is
approved and monitored on an ongoing basis individually for all significant
customers. The maximum exposure to credit risk is represented by the
carrying amount of each financial asset in the statement of financial
position. The Group does not require collateral in respect of financial
assets.
Market risk
The Group's financial instruments potentially affected by market risk include
bank deposits, and trade payables. An analysis is required by IFRS 7, intended
to illustrate the sensitivity of the Group's financial instruments (as at
period end) to changes in market variables, being exchange rates and interest
rates. The Group's exposure to market risk is not considered to be material.
Interest rate risk
The Group has no material exposure to interest rate risk. Since the interest
accruing on bank deposits was relatively immaterial there is no material
sensitivity to changes in interest rates.
Foreign currency risk
The Group is exposed to foreign currency risk in so far as some dealings with
overseas subsidiary undertakings are in foreign currencies. Bank accounts are
held in Great British Pounds ("GBP), Australian Dollars ("AUD") and United
States of American Dollars ("USD"). The Company has payables that originate
in GBP, AUD, USD and Philippines Peso ("PHP"). As such the Company is
affected by changes in the GBP exchange rate compared to the following
currencies; AUD, and PHP.
As at 30 September 2023 GBP AUD PHP
Cash and cash equivalents 6,589 143,933 129,771
Accounts receivable 1,065,853 65,348 1,000
Accounts payable (101,043) (135,171) (315,800)
Net foreign exchange exposure 971,400 344,451 446,571
Translation to GBP 1 0.5271 0.0144
GBP equivalent 971,400 181,560 6,431
GBP AUD PHP
As at 30 September 2022
Cash and cash equivalents 233,106 1,033,117 44,789
Accounts receivable 1,037,568 77,251 -
Accounts payable (135,923) (114,461) (220,200)
Net foreign exchange exposure 1,134,751 995,907 175,411
Translation to GBP 1 0.5783 0.0153
GBP equivalent 1,134,751 575,933 2,684
Fair value of financial instruments
The fair values of the Company's financial instruments at 30 September 2023
and 30 September 2022 did not differ materially from their carrying values.
The Group measures fair values using the following fair value hierarchy that
reflects the significance of the inputs used in making the measurements:
• Level 1: quoted prices (unadjusted) in active markets
for identical assets or liabilities;
• Level 2: valuation techniques based on observable inputs
either directly (i.e. as prices) or indirectly (i.e. derived from prices);
• Level 3: valuation techniques that include inputs for
the asset or liability that are not based on observable market data
(unobservable inputs).
The following table provides an analysis of financial instruments that are
measured subsequent to initial recognition at fair value, by the level in the
fair value hierarchy into which the measurement is categorised.
Group and Company
30 September 2023 Level 1 Level 2 Level 3 Total
£ £ £ £
Financial assets at fair value through profit or loss 10,390 - - 10,390
10,390 - - 10,390
Group and Company
Level 1 Level 2 Level 3 Total
30 September 2022 £ £ £ £
Financial assets at fair value through profit or loss 45,084 - - 45,084
45,084 - - 45,084
Liquidity risk
The Group finances its operations primarily through the issue of equity share
capital and debt in order to ensure sufficient cash resources are maintained
to meet short-term liabilities and future project development requirements.
Management monitors availability of funds in relation to forecast expenditures
in order to ensure timely fundraising. Funds are raised in discrete tranches
to finance activities for limited periods.
Funds surplus to immediate requirements may be placed in liquid, low risk
investments.
The Group's ability to raise finance is subject to market perceptions of the
success of its projects undertaken during the year and subsequently. Due to
the uncertain state of financial markets, there can be no certainty that
future funding will continue to be available. The table below sets out the
maturity profile of financial liabilities as at 30 September 2023.
2023 2022
£ £
Due in less than 1 month 156,074 206,684
Due between 1 and 3 months - -
Due between 3 months and 1 year - -
Due after 1 year - -
156,074 206,684
19. SEGMENTAL REPORTING
The Group is engaged in mineral exploration and development and is considered
to have one business segment. The Chief Operating Decision Maker is considered
to be the Board of Directors, who segment exploration activities by
geographical region in order to evaluate performance individually. The
segmental breakdown of exploration assets is shown in Note 10. As disclosed in
the Note 10, the exploration activities in the Philippines have been impaired
in full and all remaining mineral exploration assets are in Australia.
Management information in respect of profit or loss expenditures is not
segmented but is considered at Group level.
20. CASH USED IN OPERATIONS
Group Company
Year ended 30 September 2023 Year ended 30 September 2022 Year ended 30 September 2023 Year ended 30 September 2022
£ £ £ £
Note
Operating activities
Loss for the year before tax (1,772,670) (2,614,873) (3,104,695) (2,251,490)
Adjustments:
Depreciation expense property, plant and equipment 131,541 104,165 5,961 7,989
Share based payments 156,380 - 156,380 -
Loss/(gain) on disposal of fixed assets 219,923 - - -
Loss/(gain) on financial assets at fair value 34,694 (3,623) 34,694 (3,623)
Impairment of intangible assets - 1,576,822 22,542 1,576,822
Impairment of subsidiary - - 1,998,399 -
Disposal of inventory - 5,081 -
Interest income (3,112) (651) (1,106) (265)
Profit and loss on disposal - 12,887 - 2,086
Decrease/(Increase) in accounts receivable 62,660 (1,896) (28,285) (159,471)
(Decrease)/Increase in accounts payable (12,968) 3,954 46,829 94,726
Net cash used in operations (1,183,552) (918,135) (869,281) (733,226)
21. EVENTS AFTER THE REPORTING DATE
Subsequent to the year end, on 10 October 2023, the Company issued 338,249,985
new ordinary shares pursuant to a subscription which raised £580,000. This
included shares issued to advisers in lieu of expenses.
On 20 October 2023, the Company determined not to proceed with the proposed
Hurricane acquisition and shortly ahead of that applied for EPM28910 at
Kondaparinga. This area is situated close to the original geological features
that first bought Hurricane to the attention of our board and field team.
Significantly, it is also twice the size of Hurricane. The Company's
investment in the project was accordingly impaired at 30 September 2023.
Also on 20 October 2023, the Company cancelled share options over 54,000,000
ordinary shares.
On 1 December 2023, the Company issued 22,857,142 new ordinary shares to
certain Directors who opted to take shares in lieu of salaries.
On 12 December 2023, the Company confirmed that access to the relevant sites
has been granted and accordingly reverse circulation ("RC") drilling programme
has commenced at the Creswick gold project in central Victoria, Australia
with Drilling is underway at Kuboid Hill and Davey Road prospects.
On 14 December 2023, the Company issued 25,714,284 new ordinary shares to its
Managing Director members of its board and Chief Operating Officer as part of
their remuneration and a further 2,585,092 new ordinary shares in lieu
of £6,000 of fees owed to an adviser.
On 18 December 2023, the Company announced that it had agreed to effect the
sale of two under-utilised non-core assets, a drilling rig and an excavator,
for a total consideration is A$420,000.
On 15 January 2024, the Company confirmed receipt of the first payment
of A$53,000 (excluding GST) relating to the hire purchase sale agreement
with a mining operations company for its Coretech Drilling Rig.
On 23 January 2024, the Company announced Technical Director Adam
Jones stepped down from the board of directors with immediate effect but will
continue in his role with ECR as chief geologist and technical director of
exploration.
On 15 February 2024, the Company announced that David Tang has stepped down as
Chairman of the Company and Nick Tulloch has been appointed Chairman in his
place, in addition to his role as Executive Director of the Company. David
Tang has remained on the board as a non-executive director.
On 14 March 2024, the Company issued 19,396,550 new ordinary shares to members
of its board and management team as part of their remuneration and a further
2,307,692 new ordinary shares in lieu of £6,000 of fees owed to an adviser.
Also on 14 March 2024, the Company announced that it has successfully raised,
subject only to admission (which is expected to be on 8 April 2024), £585,000
before expenses through the placing of 195,000,000 new ordinary shares at a
price of 0.30 pence per new ordinary share.
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. END FR EFLFBZZLZBBLRecent news on ECR Minerals
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