REG - Berkeley Energia - Half-Year Accounts
13/03/2024 07:15
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RNS Number : 6639G Berkeley Energia Limited 13 March 2024
BERKELEY ENERGIA LIMITED
Interim Financial Report for the Half Year Ended 31 December 2023
Informe financiero provisional correspondiente al semestre terminado el 31 de
diciembre de 2023
abn 40 052 468 569
CORPORATE DIRECTORY | DIRECTORIO CORPORATIVO
Directors Solicitors
Mr Ian Middlemas Chairman Spain
Mr Robert Behets Acting Managing Director
Herbert Smith Freehills, S.L.P
Mr Francisco Bellón Executive Director
Mr Adam Parker Non-Executive Director
Company Secretary United Kingdom
Mr Dylan Browne
Simmons & Simmons LLP
Spanish Office
Australia
Berkeley Minera España, S.A.
Thomson Geer
Carretera SA-322, Km 30
37495 Retortillo
Bankers
Salamanca
Spain
Spain
Santander Bank
Telephone: +34 923 193 903
Australia
London Office
National Australia Bank Ltd
Unit 3C, Princes House
Australia and New Zealand Banking Group Ltd
38 Jermyn Street
Share Registry
London SW1Y 6DN, United Kingdom
Spain
Iberclear
Registered Office
Level 9, 28 The Esplanade Plaza de la Lealtad, 1
Perth WA 6000
Australia 28014 Madrid, Spain
Telephone: +61 8 9322 6322
Facsimile: +61 8 9322 6558
United Kingdom
Computershare Investor Services PLC
Website
www.berkeleyenergia.com (http://www.berkeleyresources.com.au) The Pavilions, Bridgewater Road, Bristol BS99 6ZZ
Telephone: +44 370 702 0000
Email
info@berkeleyenergia.com
Australia
Computershare Investor Services Pty Ltd
Auditor Level 17, 221 St Georges Terrace
Spain Perth WA 6000
Telephone: +61 8 9323 2000
Ernst & Young España
Stock Exchange Listings
Spain
Madrid, Barcelona, Bilboa and Valencia Stock Exchanges (Code: BKY)
Australia
Ernst and Young Australia - Perth
United Kingdom
London Stock Exchange - Main Board(LSE Code: BKY)
Australia
Australian Securities Exchange (ASX Code: BKY)
CONTENTS | CONTENIDO
Directors' Report
Directors' Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Condensed Notes to the Financial Statements
Auditor's Independence Declaration
Auditor's Review Report
The Board of Directors of Berkeley Energia Limited present their report on the
consolidated entity of Berkeley Energia Limited ("the Company" or "Berkeley")
and the entities it controlled during the half year ended 31 December 2023
("Consolidated Entity" or "Group").
DIRECTORS
The names of the Directors of Berkeley in office during the half year and
until the date of this report are:
Mr Ian Middlemas Chairman
Mr Robert Behets Non-Executive
Director (Acting Managing Director)
Mr Francisco Bellón Executive
Director
Mr Adam Parker Non-Executive
Director
Unless otherwise disclosed, Directors were in office from the beginning of the
half year until the date of this report.
OPERATING AND FINANCIAL REVIEW
Summary
Summary for and subsequent to the half year end include:
· Project Update
During the period, Berkeley received formal notifications from the High Court
of Justice of Castilla y León ("TSJ") which upheld the appeals submitted by a
non-governmental organisation, Plataforma Stop Uranio, and the city council of
Villavieja de Yeltes (the appellants) to revoke the first instance judgements
related to the Authorization of Exceptional Use of the Land ("AEUL") and the
Urbanism Licence ("UL"), and annules both the AEUL and UL.
The AEUL and the UL were granted to the Company in July 2017 and August 2020
by the Regional Commission of Environment and Urbanism, and the Municipality
of Retortillo respectively.
The appellants subsequently filed administrative appeals against the AEUL and
the UL at the first instance courts in Salamanca. The administrative appeals
against the AEUL and UL were dismissed in September 2022 and January 2023
respectively.
One of the appellants subsequently lodged appeals before the TSJ, with the TSJ
delivering judgements in December 2023 to revoke the first instance judgements
and declare the AEUL and the UL null.
The Company strongly disagrees with the fundamentals of the TSJ's judgement
and has submitted appeals against the TSJ judgements before the Supreme Court
under Spanish law to defend its position and take all necessary actions to
preserve its rights.
The Company also previously submitted a contentious-administrative appeal
before the Spanish National Court following notification from the Ministry for
Ecological Transition and the Demographic Challenge ("MITECO") in relation to
the rejection of the administrative appeal filed by the Company against
MITECO's rejection of the Authorisation for Construction for the uranium
concentrate plant as a radioactive facility ("NSC II") at the Salamanca
project.
Whilst the Company's focus is on resolving the current permitting situation,
and ultimately advancing the Salamanca project towards production, the Company
will continue to strongly defend its position and take all necessary actions
to preserve its rights.
· Global Nuclear Power and Uranium Market:
Spot uranium prices continued to demonstrate extreme upside as the near-term
price indicator increased by 27% during the period and ended December at US$91
per pound. In January 2024 the uranium price surpassed US$100 per pound and is
currently ~US$100 per pound.
Price indicators reflecting the longer-term uranium market strengthened over
the period as the 3-year forward price increased to US$96 per pound with the
5-year forward price increasing to US$101 per pound by the end of December.
The Long-Term Price continued to rise incrementally reaching US$68 per pound
at the end of December.
The outlook for nuclear power and the uranium market continued to strengthen
during the period, with a number of important recent developments, including:
· European Union
o The European Parliament adopted its official position on the proposed
Net-Zero Industry Act ("NZIA"), which is designed to support Europe's
manufacturing output in technologies needed for decarbonisation. The Members
of the European Parliament included nuclear fission and fusion amongst the
list of 17 technologies addressed by the legislation.
o The NZIA sets a target for Europe to produce 40% of its annual deployment
needs in net zero technologies by 2030 and to capture 25% of the global market
value for these technologies.
o In response to calls from the nuclear industry, research community and
nuclear safety regulators, the European Commission will establish an
Industrial Alliance dedicated to small modular reactors in early 2024, the
European Commissioner for Energy announced.
o The European Investment Bank's new president has signalled openness to
fund new nuclear projects. In an interview with the Financial Times, Nadia
Calviño, a former Spanish economy minister who took over the EIB presidency
last month, said Europe "needs to be active because it cannot be behind the
curve" on "modular reactors", which are still in a research and development
stage in the bloc.
· International Energy Agency
o The general director of the International Energy Agency ("IEA") has said
that nuclear energy works in an "impeccable way" and that countries planning
to leave the sector, such as Spain and Germany, should "think twice" since the
alternatives increase polluting emissions or dependence on third parties.
· COP28
o During the World Climate Action Summit of the 28th Conference of the
Parties to the U.N. Framework Convention ("COP28"), more than 20 countries
lead by the United States, France, Japan Republic of Korea, United Arab
Emirates and the United Kingdom, launched the Declaration to Triple Nuclear
Energy. The Declaration "recognises the key role of nuclear energy in
achieving global net-zero greenhouse gas emissions by 2050 and keeping the
1.5-degree goal within reach."
· Sweden
o The Swedish government presented its climate policy action plan to meet
net zero by 2045. The climate action plan contains some 70 "concrete
proposals" to achieve emission reductions in all sectors and says "expanded
nuclear power is the single most important measure" to reduce emissions
through electrification, with the government's recently published roadmap for
new nuclear "one crucial piece of the puzzle.
The government also tabled a proposed amendment to the country's nuclear
energy regulations (Environmental Code) which would remove the current
stipulation that any new nuclear reactor can only be authorized if it replaces
a permanently closed reactor and must be built on a site where one of the
existing reactors is located. The recently-elected government is also pursuing
legislation which would address the potential development of small modular
reactors.
o Sweden's Climate and Environment Minister announced the launch of an
investigation to abolish the country's ban on uranium mining. The ministry
said the purpose of the investigation is "to remove a ban that is not needed".
"Extraction of uranium must be handled in the same way as extraction of other
metals, where the environmental assessment determines the conditions under
which it can be permitted," it noted. "If the European Union is to become the
first climate-neutral continent, access to sustainable metals and minerals
must be ensured," the Climate and Environment Minister said. The result of the
investigation must be reported by 15 May at the latest, at which point the
government can choose to proceed with a legislative proposal to parliament to
lift the ban on uranium mining
· U.S.A
o In December 2023, the U.S. House of Representatives passed the
"Prohibiting Russian Uranium Imports Act (H.R. 1042). If enacted, the bill
would ban Russian uranium imports 90 days after enactment, but would allow
individual utilities to request a waiver from the U.S. Department of Energy if
there are no other viable fuel sources available to support the operation of a
specific nuclear reactor or nuclear company. A companion bill must now be
passed by the U.S. Senate before the legislation can be signed into law by
President Biden.
· Balance Sheet
The Company is in a strong financial position with A$75 million in cash
reserves and no debt.
Operations
Salamanca Project Summary
The Salamanca project is being developed in a historic uranium mining area in
Western Spain about three hours west of Madrid.
The Project hosts a Mineral Resource of 89.3Mlb uranium, with more than two
thirds in the Measured and Indicated categories. In 2016, Berkeley published
the results of a robust Definitive Feasibility Study ("DFS") for Salamanca
confirming that the Project may be one of the world's lowest cost producers,
capable of generating strong after-tax cash flows.
In 2021, the Company received formal notification from MITECO that it had
rejected the NSC II application at Salamanca. This decision followed the
unfavourable NSC II report issued by the NSC in July 2021.
Berkeley strongly refutes the NSC's assessment and, in the Company's opinion,
the NSC has adopted an arbitrary decision with the technical issues used as
justification to issue the unfavourable report lacking in both technical and
legal support.
Berkeley submitted documentation, including an 'Improvement Report' to
supplement the Company's initial NSC II application, along with the
corresponding arguments that address all the issues raised by the NSC, and a
request for its reassessment by the NSC, to MITECO in July 2021.
Further documentation was submitted to MITECO in August 2021, in which the
Company, with strongly supported arguments, dismantled all of the technical
issues used by the NSC as justification to issue the unfavourable report. The
Company again restated that the project is compliant with all requirements for
NSC II to be awarded and requested its NSC II Application be reassessed by the
NSC.
In addition, the Company requested from MITECO access to the files associated
with the Authorisation for Construction and Authorisation for Dismantling and
Closure for the radioactive facilities at La Haba (Badajoz) and Saelices El
Chico (Salamanca), which are owned by ENUSA Industrias Avandas S.A., in order
to verify and contrast the conditions approved by the competent administrative
and regulatory bodies for other similar uranium projects in Spain.
Based on a detailed comparison of the different licensing files undertaken by
the Company following receipt of these files, it is clear that Berkeley, in
its NSC II submission, has been required to provide information that does not
correspond to: (i) the regulatory framework, (ii) the scope of the current
procedural stage (i.e., at the NSC II stage), and/or (iii) the criteria
applied in other licensing processes for similar radioactive facilities.
Accordingly, the Company considers that the NSC has acted in a discriminatory
and arbitrary manner when assessing the NSC II application for the Salamanca
project.
In Berkeley's strong opinion, MITECO has rejected the Company's NSC II
Application without following the legally established procedure, as the
Improvement Report has not been taken into account and sent to the NSC for its
assessment, as requested on multiple occasions by the Company.
In this regard, the Company believes that MITECO have infringed regulations on
administrative procedures in Spain but also under protection afforded to
Berkeley under the Energy Charter Treaty ("ECT"), which would imply that the
decision on the rejection of the Company's NSC II Application is not legal.
In April 2023, the Company's wholly owned Spanish subsidiary, Berkeley Minera
España ("BME") submitted a contentious-administrative appeal before the
Spanish National Court in an attempt to overturn the MITECO decision denying
NSC II.
Whilst the Company's focus is on resolving the current permitting situation,
and ultimately advancing the Salamanca project towards production, the Company
and BME will continue to strongly defend its position and take all necessary
actions to preserve its rights.
Initiation of the contentious-administrative appeal is necessary to preserve
BME's rights however, the Company reiterates that it is prepared to
collaborate with the relevant authorities and remains hopeful that the
permitting situation can be resolved amicably.
in December 2023, the TSJ delivered adverse judgements and declared the AEUL
and the UL null. The Company strongly disagrees with the fundamentals of the
TSJ's judgements and has submitted cassation appeals against the TSJ
judgements before the Supreme Court under Spanish law.
Project Update
During the period, the Company continued with its commitment to health, safety
and the environment as a priority.
Following the annual Internal Audit (IA) of the Environmental and Sustainable
Mining Management Systems completed in the September quarter, AENOR, an
independent Spanish institution, completed the External Audit ("EA") during
November 2023.
The EA successfully verified that the Company's management system complies
with the requirements of ISO Standards 14001:2015 "Environmental Management"
and UNE 22480/70:2019 "Sustainable Mining Management", and remains implemented
in an adequate and effective manner.
The conclusions of the EA highlighted the significant progress made towards
achievement of the Company's 2023 Sustainability Goals including involvement
in the management system at all levels of the organisation and the integration
of Sustainable Development Goals (SDGs) into the Company's strategy.
The certification process to obtain ISO 45001 certification for Health and
Safety Management is ongoing, with the internal audit and the integration of
the SDGs into the Company's strategy being successfully completed.
Solar Power System Study
As previously reported, Berkeley initiated a study evaluating the design,
permitting, construction and operation of a solar power system at the Project.
This study has been finalised, a formal application submitted to the relevant
authorities in Salamanca, and the permitting process continued during the
period.
The Project's location has a natural abundance of sunlight which is conducive
to solar power generation, which will become a reliable source of low cost and
carbon-free energy for the Project. In addition to making a significant
contribution to reduce carbon emissions, the proposed solar power system will
potentially contribute to reducing the Project's power related operating
costs.
The proposed facility will have an installed power of 20.1MW and will be able
to supply up to 75% of the power requirements at the Project. There is
flexibility with regard to storage capacity versus capital and operational
costs to ensure the optimal outcome for the Project.
The engineering, design, and cost estimation workstreams were completed and
the overall project was delivered during the period. The environmental studies
are well advanced, and once the scope of the environmental document is
confirmed by the Administration, the Environmental Assessment will be formally
submitted.
The decision to pursue a solar power system is in line with Berkeley's ongoing
commitment to environmental sustainability and to continue to have a positive
impact on the people, environment and society surrounding the mine.
Exploration
During the period, the Company continued with its initial exploration program
focusing on battery and critical metals in Spain. The exploration initiative
is targeting lithium, cobalt, tin, tungsten, rare earths, and other battery
and critical metals, within the Company's existing tenements in western Spain
that do not form part of Berkeley's main undertaking being the development of
the Salamanca uranium project. Further analysis of the mineral and metal
endowment across the entire mineral rich province and other prospective
regions in Spain is also being undertaken, with a view to identifying
additional targets and regional consolidation opportunities.
Investigation Permit Conchas
The Investigation Permit ("IP") Conchas is located in the very western part of
the Salamanca province, close to the Portuguese border (Figure 1). The
tenement covers an area of ~31km(2) in the western part of the Ciudad Rodrigo
Basin and is largely covered by Cenozoic aged sediments. Only the
north-western part of the tenement is uncovered and dominated by the Guarda
Batholith intrusion. The tenement hosts a number of sites where small-scale
historical tin and tungsten mining was undertaken. In addition, several
mineral occurrences (tin, tungsten, titanium, lithium) have been identified
during historical mapping and stream sediment sampling programs.
Billiton PLC undertook exploration on the IP Conchas between 1981 and 1983,
with a focus on tin and tantalum (lithium was not taken into account).
Billiton's work programs comprised regional and detailed geological mapping,
geochemistry, trenching and limited drilling.
Soil sampling programs completed by Berkeley in the northern and central
portions of the tenement during 2021 (200m by 200m) and 2022 (100m by 100m)
defined a tin-lithium anomaly covering approximately 1.1km by 0.7km which
correlated with a mapped aplo-pegmatitic leucogranite.
Based on the results of the soil sampling programs and information gleaned
from a review of the available historical data, a small initial drilling
program was implemented to test the tin-lithium anomaly. The drill program
comprised five broad spaced reverse circulation (RC) holes for a total of
282m. Anomalous results for lithium (Li), tin (Sn), rubidium (Rb), cesium
(Cs), niobium (Nb) and tantalum (Ta) obtained from multi-element analysis of
drill samples were reported in the March 2023 quarter.
The occurrence of these six elements is observed to be largely associated with
a sub-horizontal muscovitic leucogranite unit that locally outcrops at
surface. The muscovitic leucogranite has a mapped extent of approximately 2km
(in a NE-SW orientation) by 0.4km (in a NW-SE orientation) (Figure 1) and
varies in thickness from 7m to over 70m in the drill holes (Figure 2).
Mineralogical studies have been undertaken on 25 samples from the drilling at
ALS Laboratories (Perth, Australia) and the University of Oviedo (Oviedo,
Spain), to determine the mineral species present and understand their
characteristics and properties.
The results of the mineralogical study carried out by ALS Laboratories on the
samples of mineralised muscovitic leucogranite indicate they are composed
mainly of plagioclase (average content of 55%) and quartz (average content
of 25%), with potassium feldspar, muscovite mica, and Li-mica making up
remainder of the rock. The samples have an average Li-mica content of 3%.
Based on the conclusions of the studies carried out at the University of
Oviedo, IP Conchas demonstrates exploration potential for several critical and
strategic raw materials included in the European Commission's Critical Raw
Materials Act(1), particularly Li, Nb and Ta. Results from the mineralogical
study report conclude that the Li-bearing minerals in the mineralised
leucogranite are mainly Li-rich muscovites.
The Department of Geology at the Universidad del País Vasco (Spain) has also
undertaken an optical mineralogy and petrography study on thin sections from
six samples collected from surface outcrops of the Conchas mineralisation.
Four of the collected samples are representative of the main muscovitic
leucogranite and two are the same leucogranite but completely greisenised. The
study concludes that among the mineral phases identified within the
leucogranite and greisen samples, the micas can be considered as aluminum-rich
micas and they are the only minerals to contain Li. The micas also hosting the
highest contents of Rb and Cs.
The Company is currently advancing plans for a second drilling campaign at IP
Conchas focused on improving confidence in the geology, continuity, and grade
distribution of the zone of multi-element mineralisation.
Figure 1: IP Conchas Location Plans and Geology / Drill Hole Location Plan
Figure 2: IP Conchas Cross Section A-A(1)
Oliva and La Majada Projects
These projects comprise three tenements within two project areas in Spain
which are considered prospective for tungsten, cobalt, antimony, and other
metals.
The Company has designed exploration programs for both projects and
communicated with the relevant authorities to progress the pending grant of
the Investigation Permits for two of tenements.
Permitting
During the period, the Company received formal notifications from the TSJ
which upheld the appeals submitted by a non-governmental organisation,
Plataforma Stop Uranio, and the city council of Villavieja de Yeltes (the
appellants) to revoke the first instance judgements related to the AEUL and
the UL, and annules both the AEUL and UL.
The AEUL and the UL were granted to the Company in July 2017 and August 2020
by the Regional Commission of Environment and Urbanism, and the Municipality
of Retortillo respectively.
The appellants subsequently filed administrative appeals against the AEUL and
the UL at the first instance courts in Salamanca. The administrative appeals
against the AEUL and UL were dismissed in September 2022 and January 2023
respectively. One of the appellants subsequently lodged appeals before the
TSJ, with the TSJ delivering judgements to revoke the first instance
judgements and declare the AEUL and the UL null.
The Company strongly disagrees with the fundamentals of the TSJ's judgement
and it has submitted cassation appeals against the TSJ judgements before the
Supreme Court under Spanish law to defend its position and take all necessary
actions to preserve its rights.
Given the current permitting situation at the Salamanca project, the Company
applied for, and has been granted, a temporary suspension of activity work at
the C.E Retortillo-Santidad ('Retortillo mining licence') by the regional
mining authorities, whilst the NSC II related and abovementioned appeals
processes are ongoing. All environmental, health and safety measures will
continue to be maintained by the Company.
Spanish Politics
Following a failed vote in Congress for the Partido Popular (PP) leader,
Alberto Núñez Feijóo, to become Prime Minister in September 2023, the
Spanish Socialist Workers' Party (PSOE) leader, Pedro Sánchez, won
parliamentary support during the period to be re-elected as Spain's Prime
Minister, after striking a controversial agreement with Catalan separatists.
In exchange for supporting Sanchez's PSOE, nationalists from the Spanish
region of Catalonia secured a commitment from the PSOE to pass an amnesty law
that would pardon those linked to a failed Catalan bid for independence six
years ago. PSOE also struck controversial agreements with other nationalist
parties, including from the Basque Country, to secure their support.
Additional Information on the Global Nuclear Power and Uranium Market
The outlook for nuclear power and the uranium market continued to strengthen
during the period, with several important recent developments, including:
· The International Atomic Energy Agency ("IAEA") released its latest
nuclear power forecast up to 2050. The international nuclear regulatory agency
now foresees a high case installed nuclear generating capacity in 2050 of
890GWe (compared with today's 369GWe), an increase over the 2020 forecast of
24%.
Large-scale reactors remain the dominant form of nuclear power in all
scenarios, including advanced reactor designs, but the development of and
growing interest in small modular reactors increases the potential for nuclear
power.
· The Swedish government unveiled a roadmap which envisages the
construction of new nuclear generating capacity equivalent to at least two
large-scale reactors by 2035, with up to ten new large-scale reactors coming
online by 2045.
The parliament subsequently approved a bill that will clear the way for new
nuclear power in the country by removing the current limit on the number of
nuclear reactors in operation, as well as allowing reactors to be built on new
sites. The amendment entered into force on 1 January 2024.
Sweden and France also signed a declaration of intent to develop long-term
cooperation in the field of nuclear energy.
· Norsk Kjernkraft, submitted a proposal to Norway's Ministry of Oil
and Energy for an assessment into the construction of a power plant based on
multiple small modular reactors in the municipalities of Aure and Heim. The
company said it marks the first formal step towards the possible construction
of the country's first nuclear power plant. Once approved by the government
agency, the environmental impact assessment phase could begin.
· Slovenia's Ministry of the Environment, Climate and Energy
presented a draft resolution on the long-term peaceful use of nuclear energy
in the country, which envisages long-term use of nuclear energy, a second
reactor at the Krško nuclear power plant and a secure electricity supply
through a mix of nuclear and renewable energy sources, the Slovenian Press
Agency reported.
· The Estonian government's Nuclear Energy Working Group concluded
that introducing nuclear energy to the country would help to meet climate
goals and increase energy security, with small modular reactors deemed to be
the most suitable for the country.
· The Council of Ministers of Bulgaria have approved the construction
of two additional reactors. The target date for commercial operation of the
first reactor is set at 2033 while the second reactor would follow 2-3 years
later. The planned capacity of the two reactors will total 2,300MWe.
· The British government launched a roadmap for reaching its ambition
for the UK to have 24GWe of nuclear generating capacity by 2050, representing
about 25% of the country's projected electricity demand.
· The EURATOM Supply Agency ("ESA") distributed its Annual Report for
2022 which documents various aspects of the nuclear fuel cycle within the
European Union.
According to the ESA's survey of the 103 reactors operating in 13 Member
Countries as of the end of 2022, future uncovered uranium requirements through
2031 range from a minimum of 51.9 million pounds (assuming all current supply
agreements are honoured) and a maximum of 87.5 million pounds (assuming
Russian-sourced agreements are not completed as scheduled).
Total uranium inventories held by EU utilities at the end of 2022 approximated
92.8 million pounds, a decrease from the aggregate inventories held at the end
of 2021 (95.7 million pounds).
During 2022, the purchases of Russian-origin uranium declined by 16% to 5.2
million pounds as compared to 2021 buying levels.
· Kazatomprom released its September 2023 quarter Operations and
Trading Update, which reported a slight decline in Kazakh uranium production
for the first nine months of the year (2023 - 39.8 million pounds. compared to
2022 - 40.2 million pounds), but reconfirming the 2023 guidance at 53.3 - 55.9
million pounds. However, the world's largest producer of uranium cautioned
that "issues associated with limited access to certain key materials, such as
sulfuric acid, remain persistent, and might potentially have a negative impact
on 2024 production."
· Orano took the decision to expand uranium enrichment capacity at
the Georges Besse 2 Uranium Enrichment Plant, located at Tricastin, France.
The facility entered operation in 2011 reaching its current full production
capacity of 7.5 million Separative Work Units (SWU) in 2016, based on
centrifuge technology. The Orano Board approved the planned expansion of 2.5
million SWU at a cost of €1.7 billion.
Results of Operations
The net loss of the Consolidated Entity for the half year ended 31 December
2023 was $3,451,000 (31 December 2022: $849,000). Significant items
contributing to the current half year loss and the substantial differences
from the previous half year include the following:
(i) Interest income of $1,668,000 (31 December 2022: $268,000),
this is largely attributable to the increase in interest rates from 0.0% to
4.6% on the US$49 million held in cash by the Company;
(ii) Exploration and evaluation expenses of $1,897,000 (31 December
2022: $1,494,000), which are attributable to the Group's accounting policy of
expensing exploration and evaluation expenditure incurred subsequent to the
acquisition of the rights to explore and up to and until a decision to develop
or mine is made;
(iii) Non-cash share-based payment expense of $437,000 (31 December
2022: $374,000) was recognised in respect of incentive securities granted to
directors, employees and key consultants of the Group as part of the long-term
incentive plan to reward directors, employees and key consultants for the
long-term incentive of the Group. The Company's policy is to expense the
incentive securities over the vesting period. During the period the Company
issued 1,900,000 (31 December 2022: nil) incentive options ("Incentive
Options") which relates to the current period expense;
(iv) Fair value movement gain of $251,000 (31 December 2022: gain of
$633,000) on unlisted options that expired during the period. These financial
liabilities increase or decrease in size as the share price of the Company
fluctuates. During the period, 25,221,562 (31 December 2022: 10,088,625)
unlisted options expired; and
(v) Foreign exchange loss of $2,304,000 (31 December 2022: gain of
$1,220,000) largely attributable on the US$49 million held in cash by the
Group following the strengthening of the AUD against the USD by some 3% during
the half year period.
Financial Position
At 31 December 2023, the Group is in a strong financial position with cash
reserves of $75,134,000 (30 June 2023: $78,776,000). The Company had cash
outflows during the year totalling $1,350,000, plus a foreign exchange loss of
$2,292,000 following the movement of the AUD against the USD by some 3% during
the period.
The Group had net assets of $84,121,000 at 31 December 2023 (30 June 2023:
$87,316,000), a decrease of 3.8% compared with 30 June 2023. The decrease is
consistent with the decrease in cash which has been offset by the decrease in
total liabilities.
Business Strategies and Prospects for Future Financial Years
Berkeley's strategic objective is to create long-term shareholder value with
the Company's primary focus continuing to be on progressing the approvals
required to commence construction of the Salamanca mine and bring it into
production.
To achieve its strategic objective, the Company currently has the following
business strategies and prospects:
· Continue in the defence of the Company's rights with respect to
the Salamanca project;
· Continue to assess other business development and investment
opportunities at the Salamanca project; and
· Continue to assess other business and development opportunities in
the resources sector.
All of these activities are inherently risky and the Board is unable to
provide certainty that any or all of these activities will be able to be
achieved. The material business risks faced by the Company that are likely to
have an effect on the Company's future prospects, and how the Company manages
these risks, include but are not limited to the following:
· Litigation risk - All industries, including the mining industry,
are subject to legal and arbitration claims. Specifically, in November 2022,
the Company submitted a written notification of an investment dispute to the
Prime Minister of Spain and the MITECO informing the Kingdom of Spain of the
nature of a dispute and the ECT breaches relating to the Company's rejection
of NSCII, and that it proposes to seek prompt negotiations for an amicable
solution pursuant to article 26.1 of the ECT. The Company remains open to
resolving the dispute with the Spanish government amicably, however, as of the
date of this report, the Spanish government has declined to participate in any
discussions related to the dispute and as a result Berkeley will continue to
strongly defend its position and take relevant actions to pursue its legal
rights regarding the Salamanca project. However, there is no certainty that
any claim, should it be made in the future, will be successful.
· Mining licences and government approvals required - In 2021,
received formal notification from MITECO that it had rejected the NSC II
application at the Salamanca project. This decision followed the unfavourable
NSC II report issued by the NSC in July 2021.
Berkeley strongly refutes the NSC's assessment and, in the Company's opinion,
the NSC has adopted an arbitrary decision with the technical issues used as
justification to issue the unfavourable report lacking in both technical and
legal support.
Berkeley submitted documentation, including an 'Improvement Report' to
supplement the Company's initial NSC II application, along with the
corresponding arguments that address all the issues raised by the NSC, and a
request for its reassessment by the NSC, to MITECO in July 2021.
Further documentation was submitted to MITECO in August 2021, in which the
Company, with strongly supported arguments, dismantled all of the technical
issues used by the NSC as justification to issue the unfavourable report. The
Company again restated that the project is compliant with all requirements for
NSC II to be awarded and requested its NSC II Application be reassessed by the
NSC.
In addition, the Company requested from MITECO access to the files associated
with the Authorisation for Construction and Authorisation for Dismantling and
Closure for the radioactive facilities at La Haba (Badajoz) and Saelices El
Chico (Salamanca), which are owned by ENUSA Industrias Avandas S.A., in order
to verify and contrast the conditions approved by the competent administrative
and regulatory bodies for other similar uranium projects in Spain.
Based on a detailed comparison of the different licensing files undertaken by
the Company following receipt of these files, it is clear that Berkeley, in
its NSC II submission, has been required to provide information that does not
correspond to: (i) the regulatory framework, (ii) the scope of the current
procedural stage (i.e., at the NSC II stage), and/or (iii) the criteria
applied in other licensing processes for similar radioactive facilities.
Accordingly, the Company considers that the NSC has acted in a discriminatory
and arbitrary manner when assessing the NSC II application for the Salamanca
project.
In Berkeley's strong opinion, MITECO has rejected the Company's NSC II
Application without following the legally established procedure, as the
Improvement Report has not been taken into account and sent to the NSC for its
assessment, as requested on multiple occasions by the Company.
In this regard, the Company believes that MITECO have infringed regulations on
administrative procedures in Spain but also under protection afforded to
Berkeley under the ECT, which would imply that the decision on the rejection
of the Company's NSC II Application is not legal.
In April 2023, the Company's wholly owned Spanish subsidiary, BME submitted a
contentious-administrative appeal before the Spanish National Court in an
attempt to overturn the MITECO decision denying NSC II.
Whilst the Company's focus is on resolving the current permitting situation,
and ultimately advancing the Salamanca project towards production, the Company
and BME will continue to strongly defend its position and take all necessary
actions to preserve its rights.
Initiation of the contentious-administrative appeal was necessary to preserve
BME's rights however, the Company reiterates that it is prepared to
collaborate with the relevant authorities and remains hopeful that the
permitting situation can be resolved amicably.
Further, Berkeley received formal notifications from the TSJ in December 2023
which upheld the appeals submitted by a non-governmental organisation,
Plataforma Stop Uranio, and the city council of Villavieja de Yeltes (the
appellants) to revoke the first instance judgements related to the
Authorization of AEUL and the UL, and annules both the AEUL and UL.
The AEUL and the UL were granted to the Company in July 2017 and August 2020
by the Regional Commission of Environment and Urbanism, and the Municipality
of Retortillo respectively.
The appellants subsequently filed administrative appeals against the AEUL and
the UL at the first instance courts in Salamanca. The administrative appeals
against the AEUL and UL were dismissed in September 2022 and January 2023
respectively.
One of the appellants subsequently lodged appeals before the TSJ, with the TSJ
delivering judgements in December 2023 to revoke the first instance judgements
and declare the AEUL and the UL null.
The Company strongly disagrees with the fundamentals of the TSJ's judgement
and has submitted cassation against the TSJ judgements before the Supreme
Court under Spanish law to defend its position and take all necessary actions
to preserve its rights. However, there is no guarantee that the cassation
appeals will be admitted by the Supreme Court or be successful.
Further, various appeals and adverse judgements have also been made against
other permits and approvals (such as the waste water discharge permit) the
Company had previously received for the Salamanca project, as allowed for
under Spanish law. The Company expects that further appeals will be made
against these and any future permits and approvals.
However, the successful development of the Salamanca mine will be dependent on
the granting, or re-granting of all permits and licences necessary for the
construction and production phases, in particular the grant of NSC II, UL and
AEUL which will allow for the construction of the plant as a radioactive
facility.
However, with any development project, there is no guarantee that the Company
will be successful in applying for and maintaining all required permits and
licences to complete construction and subsequently enter into production. If
the required permits and licences are not granted, or are granted, appealed
against and withdrawn (as in the case of the UL, AEUL and surface water
capture and waste water discharge permits), then this could have a material
adverse effect on the Group's financial performance, which has led to a
reduction in the carrying value of assets which may materially jeopardise the
viability of the Salamanca project and the price of its ordinary shares.
· The Company may not successfully acquire new projects - In
conjunction with seeking to overturn the negative MITECO and TSJ decisions,
the Company is also searching for and assessing other new business
opportunities at the Salamanca project, as well as new business
opportunities in the resources sector which could have the potential to build
shareholder value. These new business opportunities may take the form of
direct project acquisitions, joint ventures, farm-ins, acquisition of
tenements/permits, or direct equity participation.
The Company's success in its acquisition activities depends on its ability to
identify suitable projects, acquire them on acceptable terms, and integrate
the projects successfully, which the Company's Board is experienced in doing.
However, there can be no guarantee that any proposed acquisition will be
completed or be successful and the Directors are not able to assess the
likelihood or timing of a successful acquisition. If a proposed acquisition is
completed the usual risks associated with a new project and/or business
activities will remain. Further, any new acquisition may require the
establishment of a new business. The Company's ability to generate revenue
from a new business will depend on the Company being successful in exploring,
identifying mineral resources and establishing mining operations in relation
to a new project. Whilst the Directors have extensive industry experience,
there is no guarantee that the Company will be successful in exploring and
developing a new project;
· The Company's activities are subject to Government regulations and
approvals - The Company's exploration and any future mining activities are
dependent upon the maintenance and renewal from time to time of the
appropriate title interests, licences, concessions, leases, claims, permits,
environmental decisions, planning consents and other regulatory consents which
may be withdrawn or made subject to new limitations. The maintaining or
obtaining of renewals or attainment and grant of title interests often depends
on the Company being successful in obtaining and maintaining required
statutory approvals for its proposed activities. The mining licence for the
Salamanca Project was granted in April 2014 and is valid until April 2044 (and
renewable for two further periods of 30 years each). Given the current
permitting situation at the Salamanca project, the Company applied for, and
has been granted a temporary suspension of activity work at the Retortillo
mining licence by the regional mining authorities, whilst the NSC II related
and abovementioned appeals processes are ongoing.
The Company closely monitors the status of its mining and exploration permits
and licences and works closely with the relevant government departments in
Spain (as discussed above) to ensure the various licences are maintained and
renewed when required. However, there is no assurance that such title
interests, licenses, concessions, leases, claims, permits, decisions or
consents will not be revoked, significantly altered or not renewed to the
detriment of the Company or that the renewals and new applications will be
successful.
If such title interests, licences, concessions, leases, claims, permits,
environmental decisions, planning consents and other regulatory consents are
not maintained or renewed then this could have a material adverse effect on
the Company's financial performance and the price of its Ordinary Shares.
There can also be no assurances that the Company's interests in its properties
and licences are free from defects. The Company has investigated its rights
and believes that these rights are in good standing. There is no assurance,
however, that such rights and title interests will not be revoked or
significantly altered to the detriment of the Company.
In April 2021, the parliament in Spain (the "Spanish Parliament") approved an
amendment to the draft climate change and energy transition bill relating to
the investigation and exploitation of radioactive minerals (e.g. uranium). The
Spanish Parliament reviewed and approved the amendment to Article 10 under
which: (i) new applications for exploration, investigation and direct
exploitation concessions for radioactive materials, and their extensions,
would not be accepted following the entry into force of this law; and (ii)
existing concessions, and open proceedings and applications related to these,
would continue as per normal based on the previous legislation. The new law
was published in the Official Spanish State Gazette and came into effect in
May 2021.
The Company currently holds legal, valid and consolidated rights for the
investigation and exploitation of its mining projects, including the 30-year
mining licence (renewable for two further periods of 30 years) for the
Salamanca project, however any new proceedings opened by the Company is now
not allowed under the aforementioned new law. This could create uncertainty
and pose a risk on future applications, renewals or proceedings the Company
may have to make in the future at the Salamanca project or elsewhere, which if
unfavourable could have a detrimental effect on the viability of the Salamanca
project or the Company's pursuit of other development opportunities.
Therefore, there can be no assurances that the Company's rights and title
interests will not be challenged or impugned by third parties or governments
in the future. To the extent that any such rights or title interests are
revoked or significantly altered to the detriment of the Company, then this
could have a material adverse effect on the Group's financial performance and
the price of its ordinary shares;
· The Company may be adversely affected by fluctuations in commodity
prices - The price of uranium has fluctuated widely since the Fukushima
nuclear power plant disaster in March 2011 and is affected by further numerous
factors beyond the control of the Company. Future production, if any, from the
Salamanca project will be dependent upon the price of uranium being adequate
to make these properties economic. The Company currently does not engage in
any hedging or derivative transactions to manage commodity price risk, but as
the Company's Salamanca Project advances, this policy will be reviewed
periodically;
· The Group's projects are not yet in production - As a result of
the substantial expenditures involved in mine development projects, mine
developments are prone to material cost overruns versus budget. The capital
expenditures and time required to develop new mines are considerable and
changes in cost or construction schedules can significantly increase both the
time and capital required to build the mine; and
· Global financial conditions may adversely affect the Company's
growth and profitability - Many industries, including the mineral resource
industry, are impacted by these market conditions. Some of the key impacts of
the current financial market turmoil include contraction in credit markets
resulting in a widening of credit risk, devaluations and high volatility in
global equity, commodity, foreign exchange and energy markets, and a lack of
market liquidity. A slowdown in the financial markets or other economic
conditions may adversely affect the Company's growth and ability to finance
its activities.
SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD
There were no significant events occurring after balance date requiring
disclosure.
ROUNDING
The amounts contained in the half year financial report have been rounded to
the nearest $1,000 (where rounding is applicable) where noted ($000) under the
option available to the Company under ASIC Corporations (Rounding in
Financial/Directors' Reports) Instrument 2016/191. The Company is an entity to
which this legislative instrument applies.
AUDITOR'S INDEPENDENCE DECLARATION
Section 307C of the Corporations Act 2001 requires our auditors, Ernst &
Young, to provide the Directors of Berkeley Energia Limited with an
Independence Declaration in relation to the review of the half year financial
report. This Independence Declaration is on page and forms part of this
Directors' Report.
Signed in accordance with a resolution of Directors.
Robert Behets
Acting Managing Director
13 March 2024
Forward Looking Statements
Statements regarding plans with respect to Berkeley's mineral properties are
forward-looking statements. There can be no assurance that Berkeley's plans
for development of its mineral properties will proceed as currently expected.
There can also be no assurance that Berkeley will be able to confirm the
presence of additional mineral deposits, that any mineralisation will prove to
be economic or that a mine will successfully be developed on any of Berkeley
mineral properties. These forward-looking statements are based on Berkeley's
expectations and beliefs concerning future events. Forward looking statements
are necessarily subject to risks, uncertainties and other factors, many of
which are outside the control of Berkeley, which could cause actual results to
differ materially from such statements. Berkeley makes no undertaking to
subsequently update or revise the forward-looking statements made in this
announcement, to reflect the circumstances or events after the date of that
report.
Competent Persons Statement
The information in this report that relates to Exploration Results is
extracted from the March 2023 Quarterly Report which is available to view on
Berkeley's website at www.berkeleyenergia.com (http://www.berkeleyenergia.com)
. Berkeley confirms that: a) it is not aware of any new information or data
that materially affects the information included in the original announcement;
b) all material assumptions and technical parameters underpinning the
Exploration Results in the original announcement continue to apply and have
not materially changed; and c) the form and context in which the relevant
Competent Persons' findings are presented in this announcement have not been
materially modified from the original announcement.
The information in this report that relates to the Mineral Resource Estimate
is extracted from the announcement dated 30 August 2023 entitled 'Annual
Report 2023', which is available to view on Berkeley's website at
www.berkeleyenergia.com (http://www.berkeleyenergia.com) and is based on, and
fairly represents information compiled by Mr Enrique Martínez, a Competent
Person who is a Member of the Australasian Institute of Mining and Metallurgy.
Berkeley confirms that: a) it is not aware of any new information or data that
materially affects the information included in the original announcement; b)
all material assumptions and technical parameters underpinning the Mineral
Resource Estimate in the original announcement continue to apply and have not
materially changed; and c) the form and context in which the relevant
Competent Persons' findings are presented in this announcement have not been
materially modified from the original announcement.
Mineral Resource at the Salamanca project
Deposit Resource Category Tonnes U(3)O(8) U(3)O(8)
Name (Mt) (ppm) (Mlbs)
Retortillo Measured 4.1 498 4.5
Indicated 11.3 395 9.8
Inferred 0.2 368 0.2
Total 15.6 422 14.5
Zona 7 Measured 5.2 674 7.8
Indicated 10.5 761 17.6
Inferred 6.0 364 4.8
Total 21.7 631 30.2
Alameda Indicated 20.0 455 20.1
Inferred 0.7 657 1.0
Total 20.7 462 21.1
Las Carbas Inferred 0.6 443 0.6
Cristina Inferred 0.8 460 0.8
Caridad Inferred 0.4 382 0.4
Villares Inferred 0.7 672 1.1
Villares North Inferred 0.3 388 0.2
Total Retortillo Satellites Total 2.8 492 3.0
Villar Inferred 5.0 446 4.9
Alameda Nth Zone 2 Inferred 1.2 472 1.3
Alameda Nth Zone 19 Inferred 1.1 492 1.2
Alameda Nth Zone 21 Inferred 1.8 531 2.1
Total Alameda Satellites Total 9.1 472 9.5
Gambuta Inferred 12.7 394 11.1
Salamanca Project Total Measured 9.3 597 12.3
Indicated 41.8 516 47.5
Inferred 31.5 395 29.6
Total (*) 82.6 514 89.3
*rounding errors may occur
DIRECTORS' DECLARATION
In accordance with a resolution of the Directors of Berkeley Energia Limited,
I state that:
In the opinion of the Directors:
(a) the financial statements and notes are in accordance with the
Corporations Act 2001, including:
(i) complying with Accounting Standard AASB 134 Interim Financial
Reporting and the Corporations Regulations 2001; and
(ii) giving a true and fair view of the Consolidated Entity's
financial position as at 31 December 2023 and of its performance for the half
year ended on that date.
(b) the Directors Report, which includes the Operating and
Financial Review, provides a fair review of:
(i) important events during the first six months of the current
financial year and their impact on the half year financial statements, and a
description of the principal risks and uncertainties for the remaining six
months of the year; and
(ii) related party transactions that have taken place in the first six
months of the current financial year and that have materially affected the
financial position or performance of the Group during that period, and any
changes in the related party transactions described in the last annual report
that could have such a material effect; and
(c) there are reasonable grounds to believe that the Company will
be able to pay its debts as and when they become due and payable.
On behalf of the Board
Robert Behets
Acting Managing Director
13 March 2024
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE HALF YEAR ENDED 31 DECEMBER 2023
Note Half Year Ended Half Year Ended
31 December
31 December
2023
2022
$000
$000
Interest income 1,668 268
Exploration and evaluation costs (1,897) (1,494)
Corporate and administration costs (602) (582)
Prospectus preparation costs - (393)
Business development expenses (129) (127)
Share based payments expenses 9(a) (437) (374)
Fair value movements on financial liabilities 5 251 633
Foreign exchange movements (2,305) 1,220
Loss before income tax (3,451) (849)
Income tax expense - -
Loss after income tax (3,451) (849)
Other comprehensive income, net of income tax:
Items that may be reclassified subsequently to profit or loss:
Exchange differences arising on translation of foreign operations (181) 387
Other comprehensive income, net of income tax (181) 387
Total comprehensive loss for the half year attributable to Members of Berkeley (3,632) (462)
Energia Limited
Basic and diluted loss per share (cents per share) (0.77) (0.19)
The above Consolidated Statement of Profit or Loss and Other Comprehensive
Income should be read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
Note 31 December 2023 30 June 2023
$000
$000
ASSETS
Current Assets
Cash and cash equivalents 75,134 78,776
Other receivables 824 880
Total Current Assets 75,958 79,656
Non-current Assets
Property, plant and equipment 6 9,420 9,594
Other financial assets 106 107
Total Non-Current Assets 9,526 9,701
TOTAL ASSETS 85,484 89,357
LIABILITIES
Current Liabilities
Trade and other payables 799 1,221
Financial liabilities 7 - 248
Other liabilities 564 572
Total Current Liabilities 1,363 2,041
TOTAL LIABILITIES 1,363 2,041
NET ASSETS 84,121 87,316
EQUITY
Issued capital 8 206,404 206,404
Reserves 9 (1,216) (1,268)
Accumulated losses (121,067) (117,820)
TOTAL EQUITY 84,121 87,316
The above Consolidated Statement of Financial Position should be read in
conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE HALF YEAR ENDED 31 DECEMBER 2023
Issued Capital Share Based Payments Reserve Foreign Currency Translation Reserve Accumulated Losses Total
$000 $000 $000 $000 $000
As at 1 July 2023 206,404 613 (1,881) (117,820) 87,316
Total comprehensive income for the period:
Net loss for the period - - - (3,451) (3,451)
Other comprehensive income/(loss):
Exchange differences arising on translation of foreign operations - - (181) - (181)
Total comprehensive loss - - (181) (3,451) (3,632)
Expiry of Incentive Options - (204) - 204 -
Recognition of share-based payment expense - 437 - - 437
As at 31 December 2023 206,404 846 (2,062) (121,067) 84,121
As at 1 July 2022 206,404 341 (2,528) (116,584) 87,633
Total comprehensive income for the period:
Net loss for the period - - - (849) (849)
Other comprehensive income/(loss):
Exchange differences arising on translation of foreign operations - - 387 - 387
Total comprehensive income/(loss) - - 387 (849) (462)
Expiry of Incentive Options - (137) - 137 -
Recognition of share-based payment expense - 374 - - 374
As at 31 December 2022 206,404 578 (2,141) (117,296) 87,545
The above Consolidated Statement of Changes in Equity should be read in
conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE HALF YEAR ENDED 31 DECEMBER 2023
Half Year Ended Half Year Ended
31 December
31 December
2023
2022
$000
$000
Cash flows from operating activities
Payments to suppliers and employees (3,018) (2,666)
Interest received 1,668 268
Net cash outflow from operating activities (1,350) (2,398)
Net decrease in cash and cash equivalents held (1,350) (2,398)
Cash and cash equivalents at the beginning of the period 78,776 79,943
Effects of exchange rate changes on cash and cash equivalents (2,292) 1,315
Cash and cash equivalents at the end of the period 75,134 78,860
The above Consolidated Statement of Cash Flows should be read in conjunction
with the accompanying notes.
CONDENSED NOTES TO THE FINANCIAL STATEMENTS
FOR THE HALF YEAR ENDED 31 DECEMBER 2023
1. REPORTING ENTITY
Berkeley Energia Limited is a company domiciled in Australia. The interim
financial report of the Company is as at and for the six months ended 31
December 2023.
The annual financial report of the Company as at and for the year ended 30
June 2023 is available upon request from the Company's registered office or is
available to download from the Company's website at www.berkeleyenergia.com
(http://www.berkeleyenergia.com) .
2. STATEMENT OF COMPLIANCE
The interim financial report is a general purpose financial report which has
been prepared in accordance with Accounting Standard AASB 134: Interim
Financial Reporting and the Corporations Act 2001.
This interim financial report does not include all the information of the type
normally included in an annual financial report. Accordingly, this report is
to be read in conjunction with the annual report of Berkeley Energia Limited
for the year ended 30 June 2023 and any public announcements made by Berkeley
Energia Limited during the interim reporting period in accordance with the
continuous disclosure requirements of the Corporations Act 2001.
(a) Basis of Preparation of Half Year Financial Report
The amounts contained in the half year financial report have been rounded to
the nearest $1,000 (where rounding is applicable) under the option available
to the Company under ASIC Corporations (Rounding in Financial/Directors'
Reports) Instrument 2016/191.
The financial statements have been prepared on the going concern basis, which
contemplates the continuity of normal business activity and the realisation of
assets and the settlement of liabilities in the normal course of business.
(b) Historical cost convention
These financial statements have been prepared under the historical cost
convention, as modified where applicable by the revaluation of certain
financial assets and liabilities at fair value through profit or loss.
3. MATERIAL ACCOUNTING POLICIES
Accounting policies applied by the Consolidated Entity in this consolidated
interim financial report are the same as those applied by the Consolidated
Entity in its consolidated financial report for the year ended 30 June 2023.
In the current period, the Group has adopted all of the new and revised
Accounting Standards and Interpretations issued by the Australian Accounting
Standards Board (the AASB) that are relevant to its operations and effective
for annual reporting periods beginning on or after 1 July 2023.
New and revised Standards and amendments thereof and Interpretations effective
for the current half year that are relevant to the Group include:
· AASB 2020-6 Amendments to Australian Accounting Standards -
Classification of Liabilities as Current or Non-Current - Deferral of
Effective Date
· AASB 2021-2 Amendments to Australian Accounting Standards -
Disclosure of Accounting Policies and Definition of Accounting Estimates
· AASB 2021-5 Amendments to Australian Accounting Standards -
Deferred Tax related to Assets and Liabilities arising from a Single
Transaction
· AASB 2023-2 Amendments to AASs - International Tax Reform
Pillar Two Model Rules 29
The adoption of the aforementioned standards has resulted in no impact on
interim financial statements of the Group as at 31 December 2023.
(a) Issued standards and interpretations not early adopted
Australian Accounting Standards and Interpretations that have recently been
issued or amended but are not yet effective have not been adopted by the Group
for the reporting period ended 31 December 2023. Those which may be relevant
to the Group are set out in the table below, but these are not expected to
have any significant impact on the Group's financial statements:
Standard/Interpretation Application Date of Standard Application Date for Company
AASB 2020-1 Amendments to Australian Accounting Standards - Classification of 1 January 2024 1 July 2024
Liabilities as Current or Non-Current
AASB 2021-7(a-c) Amendments to Australian Accounting Standards - Effective 1 January 2025 1 July 2025
Date of Amendments to AASB 10 and AASB 128 and Editorial Corrections
4. SEGMENT INFORMATION
AASB 8 requires operating segments to be identified on the basis of internal
reports about components of the Consolidated Entity that are regularly
reviewed by the chief operating decision maker in order to allocate resources
to the segment and to assess its performance.
The Consolidated Entity operates in one operating segment, being exploration
for mineral resources within Spain. This is the basis on which internal
reports are provided to the Directors for assessing performance and
determining the allocation of resources within the Consolidated Entity. All
material non-current assets excluding financial instruments are located in
Spain.
5. FAIR VALUE MOVEMENTS
Consolidated Consolidated
31 December 2023
31 December 2022
$000
$000
Fair value movement on financial liabilities through profit and loss 251 633
Please refer to note 7 for further disclosure.
6. NON-CURRENT ASSETS - PROPERTY, PLANT AND EQUIPMENT
Land
$000
Carrying amount at 1 July 2023 9,594
Foreign exchange differences (174)
Carrying amount at 31 December 2023 9,420
- at cost 9,420
- accumulated depreciation, amortisation and impairment -
7. FINANCIAL LIABILITIES
Consolidated Consolidated
31 December 2023
30 June 2023
$000
$000
(a) Financial liabilities at fair value through profit and loss:
Unlisted Options - 248
- 248
Consolidated Consolidated
30 June
31 December 2023
2023
Opening Balance Fair Value Change Foreign Exchange Loss Total
$000
$000
$000
$000
(b) Reconciliation:
Unlisted Options 248 (251) 3 -
Total fair value 248 (251) 3 -
(c) Fair Value Estimation
The fair value of the unlisted options was determined using a binomial option
pricing model. The fair value movement of the unlisted options has been
recognised in the Statement of Profit and Loss. Fair value measurements are a
Level 2 valuation in the fair value hierarchy. Given all unlisted options
expired prior to the end of 31 December 2023, no fair value estimations were
required.
8. CONTRIBUTED EQUITY
(a) Issued and Paid Up Capital
Consolidated Consolidated
31 December 2023
30 June 2023
$000
$000
445,797,000 (30 June 2023: 445,797,000) fully paid ordinary shares 206,404 206,404
(b) Movements in Ordinary Share Capital during the Six Month Period ended 31 December 2023:
There were no movements in fully paid ordinary shares during the past six
months.
9. RESERVES
Consolidated Consolidated
31 December 2023
30 June 2023
$000
$000
Share based payments reserve (Note 10(a)) 846 613
Foreign currency translation reserve (2,062) (1,881)
(1,216) (1,268)
(a) Movements in Options during the Six Month Period ended 31 December 2023:
Date Details Number of Options $000
'000
1 Jul 23 Opening Balance 11,400 613
24 Jul 23 Issue of Incentive Options 1,900 -
31 Dec 23 Expiry of Incentive Options (3,700) (204)
Jul 23 to Dec 23 Share based payment expense - 437
31 Dec 23 Closing Balance 9,600 846
10. DIVIDENDS PAID OR PROVIDED FOR
No dividend has been paid or provided for during the half year (2022: nil).
11. FAIR VALUE OF FINANCIAL INSTRUMENTS
The majority of the Group's financial instruments consist of those which are
measured at amortised cost including trade and other receivables, security
bonds, trade and other payables and other financial liabilities. The carrying
amount of these financial assets and liabilities approximate their fair value.
Please refer to notes 5 and 7 for details on the fair value of non-cash
settled financial liabilities classified as fair value through profit and
loss.
12. CONTINGENT LIABILITIES
There have been no changes to contingent liabilities since the date of the
last annual report.
13. RELATED PARTY DISCLOSURE
Balances and transactions between the Company and its subsidiaries, which are
related parties to the Company, have been eliminated on consolidation. There
have been no other transactions with related parties during the half-year
ended 31 December 2023, other than remuneration with Key Management Personnel.
14. SUBSEQUENT EVENTS AFTER BALANCE DATE
There were no significant events occurring after balance date requiring
disclosure.
AUDITOR'S INDEPENDENCE DECLARATION
AUDITOR'S REVIEW REPORT
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