REG - Blencowe Resources - Annual Financial Report
31/01/2025 09:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250131:nRSe4544Va&default-theme=true
RNS Number : 4544V Blencowe Resources PLC 31 January 2025
Blencowe Resources Plc
("Blencowe" or the "Company")
Annual Results for the year ended 30 September 2024
And Notice of Annual General Meeting
Blencowe Resources Plc, the natural resources company focused on the
development of the Orom-Cross Graphite Project in Uganda, is pleased to
announce its audited financial results for the year ended 30 September 2024
(the "Annual Report") and it's notice of Annual General Meeting ("Notice of
AGM").
The Annual Report which includes an unqualified audit report and audited
Financial Statement for the year ended 30 September 2024 & The Notice of
AGM and the associated Form of Proxy will be made available on the Company's
website at www.blencoweresourcesplc.com (http://www.blencoweresourcesplc.com)
. Hard copies will be posted to the Company's shareholders.
For further information, please contact:
Blencowe Resources www.blencoweresourcesplc.com (http://www.blencoweresourcesplc.com)
Sam Quinn Tel: +44 (0) 1624 681 250
info@blencoweresourcesplc.com
Investor Enquiries Tel: +44 (0) 7891 677 441
Sasha Sethi sasha@flowcomms.com (mailto:sasha@flowcomms.com)
Tavira Financial Limited Tel: +44 (0)20 7100 5100
Jonathan Evans jonathan.evans@tavirasecurities.com
(mailto:jonathan.evans@tavirasecurities.com)
First Equity Limited Tel: +44 (0)203 192 1733
Jason Robertson jasonrobertson@firstequitylimited.com
(mailto:jasonrobertson@firstequitylimited.com)
Chief Executive Officer's Statement for the period ended 30 September 2024
Shareholders and Stakeholders,
As we continue this journey to unlock the enormous value within the Orom-Cross
graphite project I am pleased to share with you some of the progress we have
made over the last 12 months.
Graphite remains an integral part of the global energy transition due to its
non-replaceable role within the lithium-ion battery that stores all renewable
energy. There are many other commercial applications for graphite through its
primary qualities, being high heat resistance and high conductivity, but it is
the role within batteries that most analysts are forecasting accelerated
growth ahead, as the world moves away from fossil fuels.
Whilst some analysts consider this energy transition "yesterday's news" due to
a perceived slow-down in demand for electric vehicles, we do not agree. In
fact, we'd suggest the transition has not even yet begun in earnest, and
graphite as a critical mineral will very definitely have its day in the sun;
particularly as we do not envisage most other graphite projects making it
through to production status ahead. This will ultimately create a
demand-supply imbalance and a huge opportunity for those projects that do
ultimately mine and process graphite and sell it into voracious world markets.
We therefore remain bullish for the future, and our efforts over the past 12
months have largely been focussed on how we complete the Orom-Cross Definitive
Feasibility Study (DFS) as the main requirement prior to decision to mine,
project funding, and ultimately production.
The DFS has three key elements within: firstly, all mining, plant and
infrastructure requirements at site, secondly securing offtaker partners to
sign sales agreements, and thirdly funding - both short term (to complete the
DFS itself) and long term (to fund the project). All these elements carry
equal weight and are critical to the successful completion of the study.
Together with our lead partner, CMC Engineering, our team has defined all
requirements at site and we are significantly advanced through the process of
design works, identifying plant and equipment suppliers, considering various
Engineering, Procurement and Construction (EPC) and other contractors
necessary to build the project, and costing everything. What is emerging is
that Orom-Cross will be one of the lowest cost (both operating and capital
costs) graphite projects worldwide, which will be a significant achievement
and a huge boost to ultimately bring the mine into production.
The process of getting our end-products qualified in the graphite market, with
resultant ability to engage and ultimately sign offtake contracts, is
challenging. We had two options, to either build our own pilot testing
facility on-site to showcase end-products to the Original Equipment
Manufacturers (OEMs), or to use existing pilot testing facilities elsewhere (a
more cost-effective route). We chose the latter and after sending 600 tonnes
of raw material to China in early 2024 we delivered circa 30 tonnes of
concentrate, and ultimately 7-8 tonnes of purified SPG (spheronised purified
graphite) which is the end-product that goes into the lithium-ion battery.
This end-product is now being tested at various OEM facilities as the final
step before offtake discussions. To date all testing has been positive and
we are confident we will emerge from this process with tier one partiers with
whom we will sell product into ahead. This qualification has taken other
graphite peers up to 4 years to complete and we can be proud of the fact we
have largely completed this exercise in just 18 months.
Blencowe announced its first offtake MOU for large flake concentrate in
mid-2024 and we anticipate others to follow shortly. What is emerging is
that Orom-Cross can deliver some of the highest quality graphite worldwide,
which bodes well for future sales relationships as quality is paramount in
this industry. We will finalise all bulk sample testing shortly and move
MOUs into offtake agreements in 2025.
The third key DFS activity is funding, and we continue to build strong funding
relationships that are ultimately the foundation of successful
implementation. As previously reported, Blencowe received a US$5 million
technical assistance grant from the US Government, via their private sector
lending arm the Development Finance Corporation (DFC), and to date US$3.5M of
this grant has been disbursed to Blencowe. This support has been critical,
and aside from the credibility our relationship with DFC provides we are
confident this tier one financial institution will play a cornerstone role in
the overall funding solution for Orom-Cross implementation. Other financial
institutions have also engaged with us and we are building a strong base upon
which we can be confident will ultimately bear fruit, and deliver the
substantial capital requirement to build our mining project.
Most recently Blencowe was awarded full accreditation by the Minerals Security
Partnership (MSP) which is an influential body formed by 14 of the largest
economies in the world, designed to support mining projects that might address
the critical minerals supply issues that the world faces. This is very
prestigious as accreditation has only been awarded to a select few projects
worldwide and it now puts Orom-Cross on many radars. Whilst this
relationship is still in its early stage we are confident this will bring in
further support for Orom-Cross ahead as the MSP grows in stature.
Blencowe is emerging as a unique, differentiated mining and processing
strategy and over the past year considerable effort has been placed on
building a relationship with experienced parties that can assist the Company
to move into the downstream processing part of the graphite cycle. This is
where the most substantial profits are made in this industry. In September
2024 Blencowe announced a partnership that has been formed with one of the
most significant SPG producers in the world, which paves the way for this
downstream beneficiation strategy to play out. The plan is to jointly build
an SPG facility near to Orom-Cross to become an offtaker for life of mine, to
beneficiate the concentrate and sell purified graphite products into world
markets. This would be some of the first purified graphite produced outside
of China and would likely deliver a premium as OEMs are seeking this product
delivered ex-China to reduce their risk exposure. A downstream SPG facility
DFS is underway to assess the full commercial outcome of this strategy and it
is anticipated that this standalone DFS will be completed in parallel with the
Orom-Cross DFS to assess both projects together as they are intertwined.
As can be seen this has been another busy year and the DFS continues to keep
the management team occupied. Despite many challenges in the macro-market
Blencowe has managed to keep the project moving forward and hopes to complete
the DFS around mid-2025. Every way by which we can add further value is
being considered and other exciting relationships and initiatives will emerge
as progress continues.
We continue to build and deepen relationships within Uganda and we appreciate
all the support given to us by parties within that country, at all levels.
I would particularly like to applaud our operational management team, led by
COO Iain Wearing, and our Ugandan team, led by our Country General Manager
Nabil Alam. They have been doing a fantastic job and continue to do so.
I would also like to thank our shareholders and the wider market for your
support, and in particular our major shareholders who have stuck by us through
what have been difficult market conditions. We offer a unique and
differentiated strategy and a graphite project which is the envy of many. We
hope that we can continue to justify your faith and your investment in all we
do moving forward.
Mike Ralston
Chief Executive officer
30 January 2025
Strategic Report for the year ended 30 September 2024
The Directors present the Strategic Report for the year ended 30 September
2024.
Results
The results are set out in the Consolidated Statements of Comprehensive Income
on page 29. The total comprehensive loss attributable to the equity holders of
the Group for the year was £902,801 (2023: £1,366,685).
The Group paid no distribution or dividends during the year (2023: Nil).
Business model, review of the business and future developments
The Group's principal activity is the exploration of Orom-Cross Graphite
Project in Northern Uganda, which it owns through its 100% subsidiary
Consolidated African Resources Limited 'CARU'. Blencowe also has a 100% owned
subsidiary, Blencowe Battery Mines Uganda- SMC Limited which is a dormant
Company.
The Group's aim is to create value for shareholders through the discovery and
development of economic mineral deposits. The Group's strategy is to continue
to progress the development of its existing project in Uganda and to evaluate
its existing and new mineral resource opportunities.
The Group's business is directed by the Board and is managed on a day-to-day
basis by the Executive Chairman, Cameron Pearce. The Board monitors compliance
with objectives and policies of the Group through performance reporting,
budget updates and periodic operational reviews.
Key performance indicators (KPIs)
Financial KPIs
Results for the year
With no income in the year the Group continues to monitor the loss before tax
to ensure the continued viability of the Group and ability to continue to
develop the Orom-Cross Graphite Project. The Group has made a loss before tax
of £961,941 for the year ended 30 September 2024 (2023: loss before tax of
£1,397,967).
Exploration expenditure - funding and development costs
At this stage in the Group's development, the Group is focusing on financing
and continued development of the Orom-Cross Graphite Project. Therefore, the
funding and development costs of Orom-Cross Graphite project have been chosen
as Key Performance Indicators.
The Group incurred £2,846,130 (2023: £1,450,063) of capitalised exploration
costs. These exploration costs are in line with the Board expectations.
In 2024 the Group raised funds of £825,023 net of issue costs (2023:
£1,313,820) from the equity markets. This amount was used to pay for the
continued development of the Orom-Cross Graphite project and other working
capital costs. Please see note 20 for events after the year end.
At 30 September 2024 the Group had a cash balance of £114,694 (2023:
£129,853).
Employees
There were two employees during the year apart from the directors, the Chief
Executive Officer ("CEO") and the Chief Operating Officer ("COO"), who are the
key management personnel. All current members of the Board and the key
management personnel are males. For more information about the Group's key
management personnel see note 7.
Social, Community and Human Rights Issues
The Orom-Cross Graphite Project is still at an early stage of project
development and further consideration will need to be given to social,
community and human rights issues affecting the Project. Currently a key
consideration is that under Ugandan law the Company is required to
rehabilitate the area affected by the mining activities. Accordingly, there
will be a potential cost associated with undertaking this obligation. At this
time, although the Group continues to explore and test the minerals, the land
has not been affected and therefore the Group has not accounted for any costs
associated with the rehabilitation of the area.
On 10 September 2022 CARU signed a revised agreement with the local communal
land association of Locomo village for the land surface rights and has agreed
to help provide local education and sensitisation of the local communities in
Akurumo parish on the opportunities and advantages of mining graphite. CARU
will give employment priorities to the local capable members of Akurumo
parish.
Since the acquisition of CARU the Group has donated to local causes, such as a
scholarship programme. In February 2024 the group donated to the local school,
supplies of notebooks, stationery supplies and sporting equipment to assist
students at the start of the new school year. As a part of the activities to
define the water resources required for the project, the company undertook to
refurbish three (3) bores within the local community , and to install new
solar power supply, off take points and pumps as well as infrastructure to
install a water supply to the local school and community health clinic. The
Group will continue to donate to the local communities around the region of
Uganda in which the Project Licences are located.
Principal risks and uncertainties and risk management
The Group operates in an uncertain environment and is subject to a number of
risk factors. The Directors have carried out a robust assessment on the
principal risks facing the Group, including those that threaten its business
model, future performance, solvency or liquidity.
The Group continues to monitor the principal risks and uncertainties with the
help of specialists to ensure that any emerging risk are identified, managed
and mitigated. There has been no significant impact to the Group from the
Russia-Ukraine conflict and the Israel-Palestine conflict.
Geological risks
Exploration activities are speculative in nature, and involve many geological
considerations. They may not be successful in identifying commercial mineral
resources. Following any discovery, it can then take several years from the
initial phases of drilling and identification of mineralisation until
construction of the infrastructure and production is possible, during which
time the economic feasibility of production may change.
On 19 July 2022, the Group completed the pre- feasibility study for the
Orom-Cross graphite project and a net present value (post tax) assessment of
$482million has been estimated from the project. The pre-feasibility study
indicates a robust, long-term, and profitable mining operation at Orom-Cross.
The Pre-feasibility study was managed by leading graphite technical experts
Battery Limits Pty Limited (Australia), who have delivered several other
graphite project feasibility study in the past. The estimated production per
annum will be 36,000tpa as 96-97% end products and increasing this to
147,000tpa in stages. It is estimated that 50% of the product is +100 to +50
mesh fractions. The pre-feasibility study estimated a US$1,307/t weighted
average selling price for a basket of end products and US$499/t operating
costs, underlining one of the lowest cost graphite projects worldwide.
On 11 January 2023 the Ugandan Government approved a landmark one-off permit
for Blencowe to export bulk sample graphite from Orom-Cross for key
Metallurgical final testing. 100 tonnes of bulk samples were mined, and fast
track delivered to China by air freight for initial off -site testing with a
Chinese experienced graphite processing specialist Jilin Huiyang New Material
Technology Company Limited. Blencowe also send an additional 5kg of
concentrate to Chicago-based graphite specialist AET Co, which is a recognized
industry expert in SPG (spheronised purified graphite) and expandability
testing.
On 23 January 2023, the group appointed a leading firm from Perth, CPC
Engineering to lead, develop and sign off the Definitive Feasibility study.
The Group uses other advisors with specialist knowledge in mining and related
environmental management for reducing the impacts of environmental risk.
On 12 February 2024 the Ugandan Government approved an additional landmark
one-off permit for Blencowe to export bulk sample graphite from Orom-Cross for
key Metallurgical final testing. 600 tonnes of bulk samples were mined, and
fast track delivered to China by sear freight for initial off -site testing
with a Chinese experienced graphite processing specialist Jilin Huiyang New
Material Technology Company Limited. The processing of the additional Bulk
sample and the associated generation of approximately 25t of concentrate
enabled Blencowe to send materials to specialized firms to generate
Spheronised Purified Graphite (SPG) and test the OROM-Cross product in a
commercial quantity for suitability for off-take parties. Blencowe also sent
an additional 5kg of concentrate to Chicago-based graphite specialist AET Co,
which is a recognized industry expert in the Graphite industry to generate and
test the OROM-Cross concentrate for micronisation processes.
In July 2024 Blencowe appointed Environmental Geochemistry International (EGI)
to assess the Geohydrology of the project area to ascertain the supply of
water sufficient to sustain both the processing operations and the local
communities. Several water bores were drilled, and modelling completed that
confirmed the adequate supply of water to sustain both objectives over the
life of the project.
Government regulation and political risk
The Group's operating activities are subject to laws and regulations governing
expropriation of property, health and worker safety, employment standards,
waste disposal, protection of the environment, mine development, land and
water use, prospecting, mineral production, exports, taxes, labour standards,
occupational health standards, toxic wastes, the protection of endangered and
protected species and other matters. While the Group believes that it is in
substantial compliance with all material current laws and regulations
affecting its activities, future changes in applicable laws, regulations,
agreements or changes in their enforcement or regulatory interpretation could
result in changes in legal requirements or in the terms of existing permits
and agreements applicable to the Group or its properties, which could have a
material adverse impact on the Group's current operations or planned
exploration and development projects. Where required, obtaining necessary
permits and licences can be a complex, time consuming process and the Group
cannot assure whether any necessary permits will be obtainable on acceptable
terms, in a timely manner or at all. The costs and delays associated with
obtaining necessary permits and complying with these permits and applicable
laws and regulations could stop or materially delay or restrict the Group from
proceeding with any future exploration or development of its properties. Any
failure to comply with applicable laws and regulations or permits, even if
inadvertent, could result in interruption or closure of exploration,
development or mining operations or material fines, penalties or other
liabilities.
The Orom-Cross Graphite Project is located in Uganda. The Group's activities
may be affected in varying degrees by political stability and governmental
regulations. Any changes in regulations or shifts in political attitudes in
the country or any other countries in which the Group may operate are beyond
the control of the Group and may adversely affect its operations. To mitigate
this risk, the Board continues to review any changes on the government
regulations and the political stability in Uganda.
Pricing risk
The development and success of any project of the Group will be primarily
dependent on the future prices of graphite. The graphite prices are subject to
significant fluctuation and are affected by a number of factors which are
beyond the control of the Group. Such factors include, but are not limited to
exchange rates, fluctuations in the value of the United States dollar and
foreign currencies, global and regional supply and demand, and political and
economic conditions. The price of graphite and other commodities have
fluctuated widely in recent years, and future price declines could cause any
future development of and commercial production from the Group's property to
be impracticable. Although the Group expects the project to operate
economically, depending on the price of graphite, projected cash flow from
planned mining operations may not be sufficient for future operations and the
Group could be forced to discontinue any further development and may lose its
interest in, or may be forced to sell, some or all of its properties. Future
production from the Orom-Cross Graphite Project is dependent on the production
of graphite that is adequate to make the project economically viable. The
Board regularly monitors the prices of graphite and is prepared to raise
further capital if it is required.
Commodity and currency risk
As the Group's potential earnings will be largely derived from the sale of
graphite, the Group's future revenues and cash flows will be impacted by
changes in the prices and available market of this commodity. Any substantial
decline in the price of graphite or in transport or distribution costs may
have a material adverse effect on the Group.
Commodity prices fluctuate and are affected by numerous factors beyond the
control of the Group. These factors include current and expected future supply
and demand, forward selling by producers, production cost levels in major
mineral producing centres as well as macroeconomic conditions such as
inflation and interest rates.
Furthermore, the international prices of most commodities are denominated in
United States dollars while the Group cost base will be in Pounds Sterling and
Ugandan Shilling. Consequently, changes in the Pound Sterling and Ugandan
Shilling exchange rates will impact on the earnings of the Group. The exchange
rates are affected by numerous factors beyond the control of the Group,
including international markets, interest rates, inflation and the general
economic outlook. The Directors are confident that they have put in place a
strong management team capable of dealing with the above issues as they arise.
Financing
On 27 April 2023 the Group announced that it had found a strategic funding
partner for the Orom-Cross Graphite project, and this was completed on 22
September 2023. The Development Finance Corporation (DFC) engaged to fund 50%
of Project Definitive Feasibility Study costs by way of a technical assistance
grant. US International Development Finance Corporation is America's leading
development finance institution that partners with the private sector to
provide finance solutions for project development in markets deemed
critical. As of 30 September 2024, the Group received $3.5 million of the $5
million technical grant funding from the Development Finance Corporation. The
Group is likely to remain cash flow negative for some time and, although the
Directors have confidence in the future revenue earning potential of the Group
from its interests in the Orom-Cross Graphite Project, there can be no
certainty that the Group will achieve or sustain profitability or positive
cash flow from its operating activities. With regards to future capital
expenditure on the Orom-Cross Graphite Project, the Company will need to raise
additional capital during the next 12 months in order to fully fund completion
of the Definitive Feasibility Study.
The Group has been approached by potential strategic partners who may
eventually provide an offtake, funding or development scenario for the
Orom-Cross graphite project. If this is not successful, the Board may consider
stopping the project until further cash can be generated.
Future mineral prices, revenues, taxes, capital expenditures and operating
expenses and geological success will all be factors which will have an impact
on the amount of additional capital required. Additionally, if the Group
acquires further exploration assets or is granted additional permits and/or
exploration licences, this may increase its financial commitments in respect
of the Group's exploration activities.
In common with many exploration entities, the Group will need to raise further
funds in order to progress the Group from pre-construction phase of its
business and eventually into production of revenues.
Environmental and safety
The Orom-Cross Graphite Project is still at an early stage of project
development and further consideration will need to be given to environmental
and social issues affecting the Orom-Cross Graphite Project. During the year
the Company undertook to revise the Environmental and Social Impact Assessment
(ESIA) to account for the expanded project over the scale of project outlined
in the original ESIA and Environmental operating licence granted by the
Ugandan Environmental Agency NEMA -National Environmental Management Agency).
The updated ESIA was undertaken in consideration of future funding partners
with close adherence to the guidelines issued by IFC, EU and the Equator
Principles. The revised ESIA was Submitted in September 2024 and is currently
being assessed by NEMA. Along with the ESIA the company's Environmental
consultants have generated 10 Environmental and social Management plans in
areas such as Biodiversity, waste management, Mine Closure and Community
Development.
Environmental and safety legislation (e.g. in relation to reclamation,
disposal of waste products, protection of wildlife and otherwise relating to
environmental protection) may change in a manner that may require stricter or
additional standards than those now in effect, a heightened degree of
responsibility for companies and their directors and employees and more
stringent enforcement of existing laws and regulations. There may also be
unforeseen environmental liabilities resulting from both future and historic
exploration or mining activities, which may be costly to remedy. Risks may
include on-site sources of environmental contamination such as oil and fuel
from the mining equipment and rehabilitation of the site upon expiry of the
Project Licences. Under Ugandan law the Company is required to rehabilitate
the area affected by the mining activities, accordingly there will be a
potential cost associated with undertaking this obligation. It is currently
unknown what this could be but the funding of this could have a material
impact on the Group's financial position in the future.
If the Group is unable to fully remedy an environmental problem, it may be
required to stop or suspend operations or enter into interim compliance
measures pending completion of the required remedy. The potential exposure may
be significant and could have a material adverse effect on the Group.
The Group has not purchased insurance for environmental risks (including
potential liability for pollution or other hazards as a result of the disposal
of waste products occurring from exploration and production) as it is not
generally available at a price which the Group regards as reasonable.
Environmental management systems are in place to mitigate environmental hazard
risks. The Group uses advisors with specialist knowledge in mining and related
environmental management for reducing the impacts of environmental risk.
The Group commenced development of the Environmental and Social Sustainability
Governance guidelines which was independently assessed by an outside agency
and an initial certification provided from which the Group will now work
towards upgrading the certification levels.
Task Force on Climate -related Financial Disclosures (TCFD)
The Task Force on Climate-related Financial Disclosures was convened by the
Financial Stability Board to produce a common global framework for companies
to report on how climate change will affect their business.
To help investors and wider stakeholders understand how companies are managing
climate related financial risks, the TCFD recommends that companies make
disclosures across four key areas, often referred to as the four pillars.
The directors support the initiatives of the TCFD, and has prepared
disclosures to a level of detail that the directors consider to be consistent
with the TCFD recommended disclosures, and as appropriate to the current
position of the Group as an exploration entity.
The directors consider that several of the specific disclosures sought under
TCFD recommendations will be less meaningful to users at the current stage of
the Company's Orom-Cross Project and will have greater relevance at the
conclusion of the DFS (due to be completed by the end of May 2025) and
following the commissioning of the Orom-Cross Project.
1. Governance
The Company view climate related risks and opportunities as growing in
importance. The Board is ultimately responsible for the oversight and
compliance with local environmental laws at its exploration location in
Uganda, together with assessment of the impact of climate change on risk to
the organisation.
In advance of commissioning the project operations, the Group will establish a
Sustainability Committee, comprising the Chairman, the Chief Executive Officer
and a non-executive director, that will guide and support the Group's
environmental approach and plans with respect to climate-related matters. The
Committee will also consider and set appropriate Group policies that will
govern how management assess and manage the risks and opportunities following
commissioning.
Management of the group, who are involved with the ongoing DFS are responsible
for assessing and managing climate - related risks and opportunities through
the current study process. The DFS will incorporate these factors into
assessments related to the ESIA (environmental and social impact assessment)
and ESG (environmental, social and governance) components of the study.
2. Strategy
The Group's project at Orom-Cross is currently in the stage of completing its
Definitive Feasibility Study, the outcome of which in 2025 will include more
detail and assessment to define the Group's strategic approach to
climate-related matters.
The current global movement towards clean energy and storage solutions, in
which graphite forms an integral part, together with technological advances in
the use of graphite are an exciting opportunity for the Group to be a
significant part of sustainable energy solutions. As an example of these
solutions, the Group is focussing on current developments (and ongoing
improvements) in the use of electric and Hybrid vehicles in the excavation and
transport in the mining operations as well as logistic solutions for both
project consumables and final products.
3. Risk management
Identification and assessment of climate related risks and opportunities in
relation to the Group's activities is performed by management on an ad-hoc
basis. Management have not assessed there to be any significant
climate-related risks that impact on the current exploration activity in
Uganda.
The Group is currently completing the DFS, which will include ESIA and ESG
assessments that will assist management to detail the climate related risks
and opportunities relating to development of the project. Identification and
mitigation of these risks will be addressed by the planned Sustainability
Committee described in the Governance section of this statement.
At this time the Group operates no corporate offices either for the management
team, or in Uganda, and has no operational graphite production activity. As
such management have assessed that no significant greenhouse gas (GHG)
emissions are currently produced.
As the project progresses through the DFS, the risk management framework is
somewhat fluid and will be analysed, adapted and expanded as the various study
components of the DFS develop. The Group is identifying and developing a
'leave no trace' solution to development wherever possible including utilising
renewable energy supply and electrification options for operations. These
actions will be included in the output of the DFS.
Management have not identified any climate-related scenarios that are expected
to impact the resilience of the current exploration works performed by the
Group. Assessment of different climate scenarios will be included in the works
performed for the DFS.
During the year the Group completed a revised ESIA to cover the enlarged
project scope and the introduction of project alternatives to reduce risk in
this area such as the use of dry stack tailings 100% use of grid Hydropower.
The ESIA is currently under review by the relevant government authorities and
is expected to be approved in the first quarter of 2025. The Group also
undertook an independent assessment of its current ESG policies and procedures
as a base metric at the early stage of the project and to identify gaps and
shortcomings for continual risk reduction as the DFS is completed and the
project moves to implementation phases.
4. Metrics and targets
The Company will define the metrics and performance targets to assess the
climate-related risks and opportunities in line with its strategy and risk
management processes once the Orom-Cross operation has been commissioned.
Initially some of these will be outlined as part of the ESIA and ESG
assessments currently being undertaken for the project DFS.
As the current exploration operations of the Group have a minimal physical
presence, Greenhouse Gas emissions are not currently recorded. However as part
of the ESIA and ESG study works, the Group is developing the systems and
reporting standards to track these in preparation for development of the
project. The project reporting and management systems to provide reporting on
Greenhouse and CHG are currently being finalised following assessment under
the independent ESG certification and as a management plan commitment under
the ESIA. The Group are seeking to test the reporting as part of the
exploration drill program planned for Q1 2025. The development of the
operations and processing routes is an evolving process, as we develop the DFS
we are assessing and designing on processes that will improve on the GHG and
carbon off-sets. As the DFS is not yet completed and the processes still in
evaluation the reporting metrics for the project are being developed by the
ESG team in parallel.
Taxation
In the prior financial year, following an inspection by the Ugandan Revenue
Authority (URA) of the tax affairs of Consolidated African Resources Uganda
("CARU") covering the period between January 2014 and December 2022, the Group
has incurred a capital gains tax charge of £392,425 as set out in Note 8 to
the Financial Statements. This charge related to the acquisition by the
Company of CARU in 2019. The amount was chargeable to the former owners,
however this was not settled by them and under Ugandan legislation the
liability is reclaimable from the acquirer if it cannot be obtained from the
seller. The Group has agreed to a payment plan with URA and is currently
paying the liability.
Section 172 Statement
The Board believes they have acted in a way most likely to promote the success
of the Group for the benefit of its members as a whole, as required by section
172.
The requirements of section 172 are or the Board to:
· consider the likely consequences of any decision in the long
term,
· act fairly between the members of the Group,
· maintain a reputation for high standards of business conduct,
· consider the interest of the Group's employees,
· foster the Group's relationship with suppliers, customers and
others, and
· consider the impact of the Group's operations on the community and
the environment.
The Group operates a mineral exploration business, which is inherently
speculative in nature and, without regular income, is dependent upon
fund-raising for its continued operation. The pre-revenue nature of the
business is important to the understanding of the Group by its members,
employees and suppliers, and the Directors are as transparent about the cash
position and funding requirements as is allowed under LSE regulations.
The principal decisions taken by the Board during the year relate to the
ongoing research and development of the Orom-Cross Graphite Project, which is
still at an early stage of project development. The Board has looked to build
upon the information available and the exploration activities carried out by
the Subsidiary prior to its acquisition. Through work such as Metallurgical
testwork and preliminary economic assessment the board continues to gather
information on the long-term viability of the project and the impact on the
local community and the environment. The Board have outlined a work program
for the future strategy of the Project. In order to carry out its strategy,
the company has entered into a number of contracts with providers who are best
placed to undertake the necessary research and review.
The Board is ultimately responsible for the direction, management, performance
and long-term sustainable success of the Group. It sets the Group's strategy
and objective considering the interest of all its stakeholders. A good
understanding of the Company's stakeholders enables the Board to factor the
potential impact of strategic decisions on each stakeholder group into a
boardroom discussion. By considering the Company's purpose, vision and values
together with its strategic priorities the Board aims to make sure that its
decisions are fair. The Board has always taken decisions for the long term and
consistently aims to uphold the highest standards of business conduct. Board
resolutions are always determined with reference to the interests of the
Company's employees, its business relationships with suppliers and customers.
Wherever possible, local communities are engaged in the geological operations
and support functions required for field operations providing much needed
employment and wider economic benefits to the local communities. In addition,
the Group contributes annually towards a scholarship programme for the local
community in Uganda. The Board takes seriously its ethical responsibilities to
the communities and environment in which it works. We abide by the local and
relevant UK laws on anti-corruption and bribery.
Cameron Pearce
Director
30 January 2025
Directors' Report for the year ended 30 September 2024
The Directors submit their report with the audited Financial Statements for
the year ended 30 September 2024.
General information
Blencowe Resources Plc ("the Company") is a public company incorporated in
England & Wales.
Blencowe's primary focus is on exploration of the Orom-Cross Graphite Project
located in Northern Uganda.
Results for the year and distributions
The Group results are set out in the Consolidated Statements of Comprehensive
Income. The total consolidated comprehensive loss attributable to the equity
holders of the Group for the financial year was £902,801 (2023: £1,366,685).
The Group received no income, and the full amount of the loss is due to
expenses incurred in capital raising (to the extent not deducted from share
premium), and general corporate overheads.
The Group paid no distribution or dividends during the financial year (2023:
£Nil).
The Board of Directors
The Directors who held office during the financial year and to the reporting
date, together with details of their interest in the shares of the Company at
the reporting date were:
Number of Ordinary Shares Percentage of Ordinary Shares
Sam Quinn 4,916,667 2.17%
Cameron Pearce 7,516,667 3.32%
Alexander Passmore 1,550,000 0.68%
The Board comprises of one Executive Director and two Non-Executive Directors
as detailed below:
Cameron Pearce - Executive Chairman
Cameron Pearce was a founder of the Company and has extensive professional
experience in both the Australian and United Kingdom finance industries. In
recent times he has provided corporate, strategic, financial and advisory
assistance to private and public companies in both Australia and the United
Kingdom. Mr Pearce is a member of the Australian Institute of Chartered
Accountants and has been in commerce over twenty years holding senior
financial and management positions in both publicly listed and private
enterprises in Australia, Europe, Asia, Africa and Central America. Mr Pearce
has considerable corporate and international expertise and over the past
decade has focussed on mining and exploration activities.
Sam Quinn - Non Executive Director
Sam Quinn is a corporate lawyer with over a decade's worth of experience in
the natural resources sector, in both legal counsel and executive management
positions. Mr Quinn was formerly the Director of Corporate Finance and Legal
Counsel for the Dragon Group, a London-based natural resources venture capital
firm and is currently a partner of Silvertree Partners, a natural resource
focussed back office outsourcing business. Mr Quinn has in addition held
several management roles for listed and unlisted natural companies and has
gained significant experience in the administration, operation, financing and
promotion of natural resource companies. Prior to working in the natural
resources sector, Mr Quinn worked as a corporate lawyer for Jackson McDonald
Barristers & Solicitors in Perth, Western Australia and for Nabarro LLP in
London.
Alex Passmore - Non Executive Director
Alex Passmore is an experienced corporate executive with strong financial and
technical background. Mr Passmore managed the arrangement of debt for many
well-known resources companies and has a wealth of experience in project
evaluation. He also managed the WA natural resources business of CBA which
comprised a substantial portfolio of loan, hedge, trade finance and working
capital products to ASX-listed and multi-national resource companies. Prior to
this, Mr Passmore held senior roles at Patersons Securities and was director
of corporate finance and head of research. Mr Passmore holds a BSc (Hons) in
Geology from the University of Western Australia and a graduate diploma of
Applied Finance and Investments from the Institute of Securities Australia.
Directors' indemnities
To the extent permitted by law and the Articles, the Company has made
qualifying third-party indemnity provisions for the benefit of its directors
during the year, which remain in force at the date of this report.
Policy for new appointments
Without prejudice to the power of the Company to appoint any person to be a
Director pursuant to the Articles the Board shall have power at any time to
appoint any person who is willing to act as a Director, either to fill a
vacancy or as an addition to the existing Board, but the total number of
Directors (other than alternate directors) must not be less than two and must
not be more than 15 in accordance with the Articles. Any Director so appointed
shall hold office only until the annual general meeting of the Company next
following such appointment and shall then be eligible for re-election but
shall not be taken into account in determining the number of Directors who are
to retire by rotation at that meeting. If not re-appointed at such annual
general meeting, he shall vacate office at the conclusion thereof.
Rules for amendments of articles
Directors cannot alter the Company's Articles unless a special resolution is
approved by the shareholders. A special resolution requires at least 75% of a
company's members to vote in favour for it to pass.
Substantial shareholders
The share capital of Blencowe consist of only one class: ordinary shares.
Therefore, all of the Company's shares rank pari passu and no preferential
rights apply. No single person directly or indirectly, individually or
collectively, exercises control over the Company. The Directors are aware of
the following persons, who had an interest in 3% or more of the issued
ordinary share capital of the Company as at 31 December 2024:
% of issued share capital of the Company
Shareholder
Pershing Nominees Limited 18.97%
Hargreaves Lansdown (Nominees) Limited 14.18%
Interactive investors services Nominees Limited 8.64%
Morgan Stanley Client Securities Nominees Limited 7.49%
JIM Nominees Limited 5.95%
Lawshare Nominees Limited 4.83%
ADT Drilling Limited 4.18%
Vidacos Nominees Limited 4.11%
The Bank of New York (Nominees) Limited 3.73%
The Directors are not aware of any changes in interests between 31 December
2024 and the date of approval of the financial statements.
Financial risk management
The Group's principal financial instruments comprise cash and cash
equivalents, trade and other payables and trade and other receivables arising
in the normal course of its operations.
The Group's objectives when managing capital are to safeguard the Group's
ability to continue as a going concern in order to provide returns for
shareholders and benefits for other stakeholders and to maintain an optimal
capital structure to reduce the cost of capital. In order to maintain or
adjust the capital structure, the Group may adjust the amount of dividends
paid to shareholders, return capital to shareholders, issue new shares, or
sell assets to reduce debt.
The Group's activities expose it to a variety of financial risks: market risk,
credit risk, liquidity risk and cash flow interest rate risk. See note 18.2
for more information on the financial risk management objectives and policies.
Greenhouse Gas (GHG) Emissions
The energy consumption has not been disclosed as the Group's consumption is
below 40,000 kWh
Responsibility statement
The Directors are responsible for preparing the Annual Report and the
Financial Statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each
financial year. Under that law, the Directors have elected to prepare the
financial statements in accordance with UK adopted international accounting
standards. Under company law, the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair view of
the state of affairs and profit or loss of the Company and Group for that
period.
In preparing these Financial Statements, the Directors are required to:
· select suitable accounting policies and then apply them consistently;
· make judgements and accounting estimates that are reasonable and
prudent;
· state whether UK adopted international accounting standards have been
followed, subject to any material departures disclosed and explained in the
financial statements; and
· prepare the financial statements on a going concern basis, unless it
is inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Company and
Group to enable them to ensure that the financial statements comply with the
requirements of the Companies Act 2006. They are also responsible for
safeguarding the assets of the Company and Group and hence for taking
reasonable steps for the prevention and detection of fraud and other
irregularities.
The Directors are responsible for preparing the Annual Report in accordance
with applicable law and regulations. The Directors consider the Annual Report
and the financial statements, taken as a whole, provide the information
necessary to assess the Group's position, performance, business model and
strategy and are fair, balanced and understandable.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website.
Legislation in the United Kingdom governing the preparation and dissemination
of financial statements may differ from legislation in other jurisdictions.
Directors' responsibilities pursuant to DTR4
The Directors confirm to the best of their knowledge:
· the financial statements have been prepared in accordance with UK
adopted international accounting standards and give a true and fair view of
the assets, liabilities, financial position and profit or loss of the Group;
and
· the management report includes a fair review of the development and
performance of the business and the financial position of the Group, together
with a description of the principal risks and uncertainties that they face.
Embed effective risk management, considering both opportunities and threats,
throughout the organisation
The Directors are responsible for maintaining the Group's systems of controls
and risk management in order to safeguard its assets.
Risk is monitored and assessed by the Board who meet regularly and are
responsible for ensuring that the financial performance of the Group is
properly monitored and reported. This process includes reviews of annual and
interim accounts, results announcements, internal control systems, procedures
and accounting policies.
Subsequent events
Please see note 20 for details of the Group's subsequent events.
Directors' confirmation
So far as the directors are aware, there is no relevant audit information of
which the Group's auditors are unaware, and they have taken all steps that
they ought to have taken as directors in order to make themselves aware of any
relevant audit information and to establish that the Group's auditors are
aware of that information.
Auditors
The auditors, Crowe U.K LLP, have expressed their willingness to continue in
office and a resolution to reappoint them will be proposed at the Annual
General Meeting.
By Order of the Board
Cameron Pearce
Director
30 January 2025
Corporate Governance
The Group recognises the importance of, and is committed to, high standards of
Corporate Governance. Whilst the Group is not formally required to comply
with the UK Corporate Governance Code 2018, the Group will try to observe,
where practical, the requirements of the UK Corporate Governance Code 2018, as
published by The Financial Reporting Council.
The Company intends to voluntarily observe the requirements of the UK
Corporate Governance Code 2018, save as set out below. As at the date of the
financial statements the Directors consider the Group to be in compliance with
the UK Corporate Governance Code 2018 with the exception of the following:
· The Company does not comply with the requirements of the UK Corporate
Governance Code in relation to the requirement to have a senior independent
director and the Audit Committee does not have three independent non-executive
directors. The Nomination & Remuneration Committees also do not include
independent directors.
· Due to the current size of the company, and the early stages of the
Project's life cycle, the Company has not developed a formal diversity policy,
and investment in and rewarding of the workforce. Furthermore, there have been
no board evaluations conducted within the year.
· All directors are not subject to annual re-election. Instead at least
one third of the current directors are put forward for re-election at each
annual general meeting, in accordance with the Company's Articles of
Association.
· Remuneration for the non-executive directors includes share options.
The awards are made in accordance with the Company's remuneration policy.
· The Board does not consider there to be a need for a formal
succession plan at this stage, but this will be monitored as the size and
complexity of the Company's activities develop.
As at the date of the financial statements, the Board has a share dealing code
that complies with the requirements of the Market Abuse Regulations. All
persons discharging management responsibilities (comprising only the Directors
at the date of this Document) shall comply with the share dealing code from
the date of Admission.
Set below are Blencowe Resources Plc's corporate governance practices for the
year ended 30 September 2024.
Leadership
The Company is headed by an effective Board which is collectively responsible
of the long-term success of the Company.
The role of the Board - The Board sets the Company's strategy, ensuring that
the necessary resources are in place to achieve the agreed strategic
priorities, and reviews management and financial performance. It is
accountable to shareholders for the creation and delivery of strong,
sustainable financial performance and long-term shareholder value. To achieve
this, the Board directs and monitors the Company's affairs within a framework
of controls which enable risks for the future success of the business to be
assessed and managed effectively. The Board also has responsibility for
setting the Company's core values and standards of business conduct and for
ensuring that these, together with the Company's obligations to its
stakeholders, are widely understood throughout the Company. The Board has a
formal schedule of matters reserved which is provided later in this report.
The Company aims to generate and preserve value over the long-term primarily
through the development of its principal asset, the Orom-Cross Graphite
project in the Republic of Uganda. The Company has previously completed a
preliminary feasibility study on the project and is now in the process of
completing a definitive feasibility study which will provide a risked and
independent project valuation to international standards. The DFS process is
rigorous and will result in an examination of all aspects of the project
including economic viability, principal risks as well as engineering and
geological matters.
Board Meetings - The core activities of the Board are carried out in scheduled
meetings of the Board. These meetings are timed to link to key events in the
Company's corporate calendar and regular reviews of the business are
conducted. Additional meetings and conference calls are arranged to consider
matters which require decisions outside the scheduled meetings. During the
year, the Board met on 6 occasions. Any concerns identified that cannot be
resolved in these meetings will be documented in written form to the Chairman
and recorded in the formal minutes of the Company. In addition to the
Board meetings linked to corporate transactions, the directors consider on an
ad hoc, non-formal basis their effectiveness and relevance, and that of
management.
Outside the scheduled meetings of the Board, the Directors maintain frequent
contact with each other to discuss any issues of concern they may have
relating to the Company or their areas of responsibility, and to keep them
fully briefed on the Company's operations.
Matters reserved specifically for Board - The Board has a formal schedule of
matters reserved that can only be decided by the Board. The key matters
reserved are the consideration and approval of:
· the Group's overall strategy;
· financial statements and dividend policy;
· management structure including succession planning, appointments
and remuneration;
· material acquisitions and disposal, material contracts, major
capital expenditure projects and budgets;
· capital structure, debt and equity financing and other matters;
· risk management and internal controls;
· the Group's corporate governance and compliance arrangements; and
· corporate policies
Summary of the Board's work in the financial year - During the year, the Board
considered all relevant matters within its remit, but focused in particular on
exploration and development of the Orom-Cross Graphite Project.
Attendance at meetings:
Member Meeting attended
Cameron Pearce Executive Chairman 5
Sam Quinn Non-Executive Director 5
Alexander Passmore Non-Executive Director 6
The Board is pleased with the level of attendance and participation of
Directors at Board and committee meetings.
The Chairman, Cameron Pearce, sets the Board Agenda and ensures adequate time
for discussion.
Non-executive Directors - The non-executive Directors bring a broad range of
business and commercial experience to the Company and have a particular
responsibility to challenge independently and constructively the performance
of the Executive management (where appointed) and to monitor the performance
of the management team in the delivery of the agreed objectives and targets.
Non-executive Directors - Are initially appointed for a term of three years,
which may, subject to satisfactory performance and re-election by
shareholders, be extended by mutual agreement.
Other governance matters - All of the Directors are aware that independent
professional advice is available to each Director in order to properly
discharge their duties as a Director. In addition, each Director and Board
committee has access to the advice of the Company Secretary.
The Company Secretary - The Company Secretary is FIM Secretaries IOM Limited
which was appointed on 1 November 2024. FIM Secretaries IOM Limited is
available to Directors and advises the Board on UK compliance matters.
Effectiveness
For the period under review the Board comprised of an Executive Chairman and
two non-executive Directors.
The Directors are of the view that the Board and its committees consist of
Directors with an appropriate balance of skills, experience, independence and
diverse backgrounds to enable them to discharge their duties and
responsibilities effectively.
The Board believes it has the correct balance of skills, reflecting a broad
range of commercial and professional skills across geographies and relevant
industries that is necessary to ensure the Company is equipped to deliver its
investment objective. Additionally, each Director has experience in public
markets.
The Directors and their roles and key personnel are displayed on the Company's
website: Management & Directors - Blencowe Resources
(blencoweresourcesplc.com)
(https://blencoweresourcesplc.com/management-directors/)
Independence - None of the Directors are considered to be independent, as they
have shareholdings in the Company as noted on page 11. It is intended that
additional Directors will be appointed in future and that independence will be
one of the key factors considered at that time. As at the date of this Report
no prospective Directors have been identified and no arrangements exist
(formal or informal) for the appointment of any other Director.
Appointments - The Board is responsible for reviewing the structure, size and
composition of the Board and making recommendations to the Board with regards
to any required changes. The non-executive directors informally scrutinise and
hold to account the performance of management and the Executive Chairman,
there are no other Executives on the Board. The Board are satisfied with the
current size and composition of the Board and management.
Commitments - All Directors have disclosed any significant commitments to the
Board and confirmed that they have sufficient time to discharge their duties.
Induction - All new Directors received an induction as soon as practical on
joining the Board.
Conflict of interest - A Director has a duty to avoid a situation in which he
or she has, or can have, a direct or indirect interest that conflicts, or
possibly may conflict with the interests of the Company. The Board had
satisfied itself that there is no compromise to the independence of those
Directors who have appointments on the Boards of, or relationships with,
companies outside the Company. The Board requires Directors to declare all
appointments and other situations which could result in a possible conflict of
interest.
Accountability
The Board is committed to provide shareholders with a clear assessment of the
Group's position and prospects. This is achieved through this report and as
required other periodic financial and trading statements.
Going concern - As part of their going concern assessment set out in note 2.3,
the Board of Directors have reviewed cash flow forecasts for the 12 months
from the date these financial statements were signed and considered the
medium-term outlook through to December 2027 as described in the Viability
Statement. The Directors have a reasonable expectation that the Group will be
able to continue in operation and meet its liabilities as they fall due over
the period to December 2027, provided further funding can be raised as
required. Due to the requirement to raise additional funding, a material
uncertainty with regard to going concern has been disclosed at note 2.3.
Risk is monitored and assessed by the Board as a whole and are responsible for
ensuring that the financial performance of the Company is properly monitored
and reported. This process includes reviews of annual and interim accounts,
results announcements, internal control systems, procedures and accounting
policies. Risk management is carried out by the Board of Directors. The Board
identifies and evaluates financial risks, and the key risk factors for the
Company are contained in the Financial Statements for the year ended 30
September 2024.
Internal controls - The Board of Directors reviews the effectiveness of the
Company's system of internal controls in line with the requirement of the
Code. The internal control system is designed to manage the risk of failure to
achieve its business objectives. This covers internal financial and
operational controls, compliance and risk management. Key controls consist
of segregation of duties, authorisation and approval policies and accounting
controls such as monthly reconciliations. The Directors consider the Company
has appropriate and effective internal controls in place for the year under
review and up to the date of approval of the Annual Report and Financial
Statements. The Directors acknowledge their responsibility for the Company's
system of internal controls and for reviewing its effectiveness. Risk is
monitored, assessed and managed by the Board as a whole who are responsible
for ensuring that the financial performance of the Company is properly
monitored and reported. This process includes reviews of annual and interim
accounts, results announcements, internal control systems, procedures and
accounting policies. The finance function is outsourced to FIM Capital Limited
and details of the duties performed are in a formal agreement. The Board
confirms the need for an ongoing process for identification, evaluation and
management of significant risks faced by the Company. The Directors carry out
a risk assessment before signing up to any commitments.
The Audit Committee
The Audit Committee consists of Cameron Pearce, Chair of the Committee, and
Alex Passmore. It aims to meet at least twice a year and is responsible for
ensuring that the Group's financial performance is properly monitored,
controlled, and reported to the Board. During the review year, the Audit
Committee met twice.
The Committee oversees the scope and effectiveness of the external audit and
ensures the Group complies with statutory and other regulatory requirements.
Given the size of the Group and the relative simplicity of its systems, the
Board has determined that there is currently no need for an internal audit
function. The existing procedures for internal financial control, including
expenditure controls, regular reconciliations, and management accounts, are
deemed appropriate for a Group of this size. The need for an internal audit
function will remain under review as the Group's operations evolve and become
more complex, particularly with the planned development of the project.
In line with the UK Corporate Governance Code, the Audit Committee's work
during the year included:
· Reviewing significant issues relating to the financial
statements, such as the assessment of impairment of intangible assets, and
ensuring these were appropriately addressed.
· Assessing the independence and effectiveness of the external
audit process, which included considering the approach to the appointment or
reappointment of the external auditor. The Committee reviewed the length of
tenure of the current audit firm, discussed when a tender was last conducted,
and provided advance notice of any retendering plans, where applicable.
· Evaluating how auditor independence and objectivity are
safeguarded, particularly when non-audit services are provided by the external
auditor.
The Audit Committee monitors in discussion with the auditors:
· The integrity of the Group's financial statements and significant
financial reporting judgements, such as the assessment of impairment of
intangible assets.
· Any formal announcements relating to the Group's financial
performance.
· The Group's internal financial controls and risk management
systems.
· The external auditor's independence and objectivity and the
effectiveness of the audit process, taking into account relevant UK
professional and regulatory requirements.
The Directors are responsible for taking all reasonably available steps to
safeguard the Company's assets and to prevent and detect fraud and other
irregularities
External auditor's independence
Since the last tender which was conducted in 2018, Crowe U.K LLP has acted as
independent auditor for seven years. The Audit Committee have held discussions
with the external auditors to confirm there are no non-audit services
provided, and no other independence considerations they should be aware of.
Remuneration and Nominations Committee
A Remuneration and Nominations Committee was established during 2020 and is
made up of the two non-executive directors. The Committee comprises Sam Quinn,
chairman of the committee, and Alex Passmore. They are not considered to be
independent directors. The Board considers the committee composition of two
directors to be sufficient due to the size of the company at this time. The
Remuneration and Nomination Committee meets at least annually and is
responsible for setting the remuneration policy for all executive directors
and the Company's chairman, including any compensation payments; recommends
and monitors the level and structure of remuneration for senior management;
evaluates the board of directors and examines the skills and characteristics
required of board candidates. During the year of review, the Remuneration and
Nomination Committee met once.
Remuneration paid to Directors in the period under review is disclosed in the
Directors' Remuneration Report.
The Committee is dedicated to implementing a remuneration policy that promotes
long-term incentives and aligns the interests of directors with those of
shareholders. Share and option awards should be phased, contain performance
milestones where appropriate and encourage long term participation.
The Committee considers in defining the remuneration policy that arrangements
should be clear and transparent, should avoid undue complexity, and should be
proportional to the services provided in delivering the Company's strategy and
purpose.
The Remuneration Committee to date has focused on share options and bonus
payments as the main incentives for executives, given the stage of development
of the Company and to further align senior management with shareholder
interests. Typically share options are subject to vesting conditions, such as
completion of feasibility studies or the introduction of strategic partners.
In addition, share price hurdles have been used to provide further shareholder
alignment. Given the nature of the Company as the developer of a mining
project and the potential for rerating of the Company's value as the project
advances, having a direct equity exposure is deemed to be the most desirable
form of management incentive. In addition, cash bonus payments are generally
kept to a minimum to preserve the Company's capital. Share options will
typically expire three months following the cessation of employment.
In accordance with the Company's Articles of Association, at every annual
general meeting at least one third of the current directors who are subject to
retirement by rotation will be put forward to retire.
Shareholder relations
Communication and dialogue - Open and transparent communication with
shareholders is given high priority and there is regular dialogue with
institutional investors, as well as general presentations made at the time of
the release of the annual and interim financial results. All Directors are
kept aware of changes in major shareholdings in the Company and are available
to meet with shareholders who have specific interests or concerns. The Company
issues its results promptly to the market via RNS and also publishes them on
the Company's website: www.blencoweresourcesplc.com
(https://blencoweresourcesplc.com/) . Regular market news updates are made in
relation to the Company including the status of its exploration and
development programme which is also included on the Company's website.
Shareholders and other interested parties can subscribe to receive news
updates by email by registering online on the website free of charge.
The Directors are available to meet with institutional shareholders to discuss
any issues and gain an understanding of the Company's business, its strategies
and governance. Meetings are also held with the corporate governance
representatives of institutional investors when requested.
Annual General Meeting - At every AGM individual shareholders are given the
opportunity to put questions to the Chairman and to other members of the Board
that may be present. Notice of the AGM is sent to shareholders at least 21
working days before the meeting. Details of proxy votes for and against each
resolution, together with the votes withheld are announced to the London Stock
Exchange and are published on the Company's website as soon as practical after
the meeting.
Viability statement
In accordance with provision 31 of the UK Corporate Governance Code (2018),
the Board has assessed the prospects of the Group over a three-year period,
taking account of the Group's current position and principal risks. For
information regarding Group's going concern position and funding requirements
over the next twelve months, please see note 2.3.
Time frame
The Board believes that three years is currently the most appropriate time
frame over which the Board should assess the long-term viability of the Group.
The Group's current activities do not generate any revenues or positive
operating cash flow, and the completion of the Definitive Feasibility Study
for the Orom-Cross Graphite Project will require further capital expenditures.
Assessing viability
The main assumption in the Board making its viability assessment is the
ability of the Group to raise further funds in order to progress from the
exploration phase into feasibility and eventually into production of revenues.
The Group may not be able to obtain additional financing as and when needed
which could result in a delay or indefinite postponement of exploration and
development activities. The main development activities that the company will
be focused on in the next 3years, dependent upon raising the funds required,
will be the construction of the 5,000t/yr plant and commencement of production
in quarter 2 2026, the commencement of construction of the 50,000t/yr
processing plant in 2026 and production in 2027. The construction and
operation of the SPG plant is expected to run in parallel with the 50,000t
plant. The company will assess the commercial operations and costs in further
detail with the DFS and ongoing assessment of the operations and costs during
tendering and construction.
Principal risk
The Directors have conducted a robust assessment of the principal risks facing
the Group as described on the preceding pages including those that threaten
its business model, future performance, solvency or liquidity. The Directors
are confident that they have put in place a strong management team with
wide-ranging expertise in mineral exploration and development who are capable
of dealing with the risk management in order to safeguard the Group's assets.
The directors are aware that the risks that could have the most adverse effect
are funding and capital markets, potential other risks include the political
risk in the country of business.
Based on the financial impact of the analysis outlined above and the
associated risks, management actions and controls that are either in place or
could be implemented, the Board expects that the Company will be able to
deliver the Orom-Cross Graphite Project.
Confirmation of viability
Taking account of these matters, the Directors have a reasonable expectation
that the Group will be able to continue in operation and meet its liabilities
as they fall due over the period to December 2027, assuming that the financing
referred to above is completed as described. The Company's going concern
statement is detailed in note 2.3.
By Order of the Board
Cameron Pearce
Director
30 January 2025
Directors Remuneration Report
Statement of Blencowe Plc's policy on Directors'
Remuneration
The Directors' Remuneration Report sets out the Company's policy on the
remuneration of Directors together with the details of Directors' remuneration
packages and services contracts for the year ended 30 September 2024.
As set out in the Company's Prospectuses dated 30 March 2020 and 26 November
2024, each of the Directors may be paid a fee at such rate as may from time to
time be determined by the Board. All the Directors are entitled to be
reimbursed by the Company for travel, hotel and other expenses incurred by
them in the course of their directors' duties relating to the Company.
There have been no changes to the Directors' remuneration or remuneration
policy since the publication of the Company's Prospectus dated 30 March 2020
with the exception of those mentioned below. The terms and conditions of
appointment for all the members of the Board are available for inspection at
our registered office.
Terms of employment
Cameron Pearce was appointed on 8 June 2018 by the Company to act as a
Non-Executive Director and Chairman of the Company and from 1 July 2024 is
paid fees of £120,000 per annum. If there is a change of control (as defined
in the letter of appointment), Mr Pearce will be entitled to 100% of his
annual fee as a lump sum payment if the Company terminates his employment, or
if Mr Pearce chooses to terminate his appointment within 12 months following a
change of control.
Sam Quinn was appointed on 8 June 2018 by the Company to act as a
Non-Executive Director and from 1 July 2024 is paid fees of £60,000 per
annum. If there is a change of control (as defined in the letter of
appointment), Mr Quinn will be entitled to 100% of his annual fee as a lump
sum payment if the Company terminates his employment, or if Mr Quinn chooses
to terminate his appointment within 12 months following a change of control.
Alex Passmore was appointed on 8 June 2018 by the Company to act as a
Non-Executive Director and is from 1 July 2024 is paid fees of £24,000 per
annum. If there is a change of control (as defined in the letter of
appointment), Mr Passmore will be entitled to 100% of his annual fee as a lump
sum payment if the Company terminates his employment, or if Mr Passmore
chooses to terminate his appointment within 12 months following a change of
control.
Remuneration policy
Base salary levels will take into account market data for the relevant role,
internal relativities, the individual's experience and their current base
salary. Where an individual is recruited below market norms, they may be
re-aligned over time (e.g. two to three years), subject to performance in the
role. Benefits will generally be in accordance with the approved policy.
Currently, there are no benefits in place.
The appointment of each Director may be terminated by either party on six
months' notice, which the Company considers to be an appropriate notice period
to retain key personnel.
The Remuneration and Nomination Committee comprises Sam Quinn, who acts as
chairman of the committee and Alex Passmore, and meets at least annually.
The Remuneration Committee reviews the scale and structure of the Directors'
fees, considering the interests of the shareholders and the performance of the
Company and Directors. Bonuses, pay rises and the grant of long term
incentives such as share options are linked to the achievement of key funding
and project milestones that are set from time to time by the Committee.
The items included in this report are unaudited unless otherwise stated.
The Company maintains contact with its shareholders about remuneration in the
same way as other matters and, as required by Section 439 of the Companies Act
2006, this remuneration report will be put to an advisory vote of the
Company's shareholders at the forthcoming Annual General Meeting.
Directors' emoluments and compensation (audited)
Set out below are the emoluments of the Directors:
Cameron Pearce Sam Quinn Alexander Passmore Total
30 September 2023
Base fee 96,000 24,000 18,000 138,000
Share Based Payments 5,239 5,239 2,619 13,097
Total 30 September 2023 101,239 29,239 20,619 151,097
30 September 2024
Base fee 102,000 30,000 19,500 151,500
Share based payments - - - -
Total 30 September 2024 102,000 30,000 19,500 151,500
The percentage of directors' emoluments of the total administrative costs for
the year is 19% (2023: 12%). The directors' base fees increased by £13,500,
reflecting the fee increases applicable from 1 July 2024 (2023: Nil increase)
while the base salary costs of the key management employees did not increase
(2023: Nil increase).
Statement of Directors' shareholding and share interest (audited)
The Directors who served during the year ended 30 September 2024, and their
interests at that date, are disclosed on page 11.
Issue of options
As at the reporting date, the number of shares options that the Company has
issued to the Board and Senior Management are as follow;
Cameron Pearce (Chairman) 5,000,000
Mike Ralston (CEO) 5,500,000
Lionshead Consultants Ltd (Sam Quinn) (Non Exec Director) 3,750,000
Alexander Passmore (Non Exec Director) 1,750,000
Iain Wearing (COO) 5,000,000
For further information, please see note 17.
Other matters
The Company does not currently have any annual or long-term incentive schemes
(other than the one stated above) in place for any of the Directors and as
such there are no disclosures in this respect.
The Company does not have any pension plans for any of the Directors and does
not pay pension amounts in relation to their remuneration.
The Company has not paid out any excess retirement benefits to any Directors
or past Directors. The Company has not paid any compensation to past
Directors.
By Order of the Board
Sam Quinn
Director
30 January 2025
Independent Auditor's Report to the Members of Blencowe Resources Plc
Opinion
We have audited the financial statements of Blencowe Resources Plc (the
"Company") and its subsidiaries (the 'Group') for the year ended 30 September
2024 which comprise the Consolidated statement of comprehensive income,
Consolidated statement of financial position, Parent statement of financial
position, Consolidated statement of changes in equity, Parent statement of
changes in equity, Consolidated statement of cash flows, Parent statement of
cash flows and notes to the financial statements, including accounting
policies. The financial reporting framework that has been applied in the
preparation of the Group and Company financial statements is applicable law
and UK-adopted international accounting standards.
In our opinion:
· the financial statements give a true and fair view of the state
of the Group's and of the Company's affairs as at 30 September 2024 and of the
Group's loss for the year then ended;
· the Group and the Company financial statements have been properly
prepared in accordance with UK-adopted international accounting standards; and
· the financial statements have been prepared in accordance with
the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor's responsibilities for the
audit of the financial statements section of our report. We are independent of
the Group and the Company in accordance with the ethical requirements that are
relevant to our audit of the financial statements in the UK, including the
FRC's Ethical Standard as applied to listed public interest entities, and we
have fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Material uncertainty in relation to going concern
We draw attention to note 2.3 to the financial statements, which explains that
the Group and Company's ability to continue as a going concern is dependent on
the availability on further fundraising to complete the Definitive Feasibility
Study and meet its obligations as they fall due. These conditions indicate the
existence of a material uncertainty which may cast significant doubt over the
Group's and Company's ability to continue as a going concern. Our opinion is
not modified in respect of this matter.
In auditing the financial statements, we have concluded that the directors'
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate. We have highlighted going concern as a
key audit matter due to the estimates and judgements the Directors are
required to make in their going concern assessment, and their effect on our
audit strategy. Our audit work in response to this key audit matter included:
· We obtained the going concern assessment prepared by the
directors, and performed a detailed review of the supporting cash flow
forecasts.
· We assessed the systems and controls in place for the preparation
of management's going concern projections.
· We reviewed the prior year going concern projections against the
actual performance in the current financial year, in order to assess
management's ability to forecast accurately.
· We checked the mathematical accuracy of the projections and
agreed the opening cash position to bank statements. We ensured that the
period of going concern assessment covered at least twelve months from the
date of approval of the financial statements, and enquired regarding any
matters shortly after this date that would impact the going concern
consideration.
· We challenged the key assumptions based on expected activity
within the going concern period, and comparison to historical actual monthly
expenditure.
· We considered other potential indicators of matters impacting
going concern, including title to the Group's principal mineral license
ML1959.
· We reviewed the requirements of the remaining tranches of the
grant awarded by the US Development Funding Council and discussed with the
directors how these were factored into budgets and exploration plans during
the going concern assessment period.
· We held discussions with the directors on how they plan to raise
the additional funding required by the cash flow forecasts. This was
considered against their previous success in fundraising for the project.
· We reviewed the completeness of disclosures made in the financial
statements in relation to going concern, and that these are in line with the
going concern assessment provided to us by the directors.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Overview of our audit approach
Materiality
In planning and performing our audit we applied the concept of materiality. An
item is considered material if it could reasonably be expected to change the
economic decisions of a user of the financial statements. We used the concept
of materiality to both focus our testing and to evaluate the impact of
misstatements identified.
Based on our professional judgement, we determined overall materiality for the
financial statements as a whole to be £150,000 (2023 £155,000), based on
approximately 2% of total assets. Materiality for the Company financial
statements as a whole was set at £137,000 (2023: £140,000) based on
approximately 2% of total assets.
We use a different level of materiality ('performance materiality') to
determine the extent of our testing for the audit of the financial
statements. Performance materiality is set based on the audit materiality as
adjusted for the judgements made as to the entity risk and our evaluation of
the specific risk of each audit area having regard to the internal control
environment. Performance materiality was set at 70% of materiality for the
financial statements as a whole, which equates to £105,000 (2023: £108,500)
for the Group and £95,900 (2023: £98,000) for the Company.
Where considered appropriate performance materiality may be reduced to a lower
level, such as, for related party transactions and directors' remuneration.
We agreed with the Audit Committee to report to it all identified errors in
excess of £7,500 (2023: £7,700). Errors below that threshold would also be
reported to it if, in our opinion as auditor, disclosure was required on
qualitative grounds.
Overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and its
environment, including the Group's system of internal control, and assessing
the risks of material misstatement in the financial statements. We also
addressed the risk of management override of internal controls, including
assessing whether there was evidence of bias by the Directors that may have
represented a risk of material misstatement.
The Group operates through the Company based in the United Kingdom which
performs administrative functions and provides funding to its exploration
subsidiary in Uganda Consolidated Africa Resources Ltd- ("CARU"). The Company,
and its Ugandan subsidiary CARU, were considered to be significant components.
In establishing our overall approach to the group audit, we determined the
type of work that needed to be performed in respect of each component. As
significant components, full scope audit were performed for both the Company
and CARU. Risk assessment analytical procedures were performed over the
results of Blencowe Battery Mines Uganda - SMC Ltd. All audit work was carried
out by the group audit team.
Given CARU is in the exploration stage of its work, we did not consider it
necessary to visit Uganda. Documentation and explanations from Uganda were
obtained by email and through telephone calls.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those
which had the greatest effect on the overall audit strategy, the allocation of
resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
We set out below, together with the material uncertainty in relation to going
concern above, those matters we considered to be key audit matters.
Key audit matter How our scope addressed the key audit matter
1. Carrying value of intangible assets - (note 9) We performed the following procedures as part of our audit of management's
assessment of the carrying value of intangible assets:
The Group holds intangible assets totalling £7.6m (2023: £7.9m) in relation
to the Orom-Cross project in Uganda. These costs are capitalised in accordance · We obtained and reviewed the directors' assessment of the
with the requirements of IFRS 6. indicators of impairment, as set out in IFRS 6 "Exploration for and evaluation
of mineral resources".
At each reporting date, the directors are required to assess whether there are
any indicators of impairment, that would require an impairment assessment to
be carried out. The directors concluded there were no indicators of
impairment. · We assessed the design and implementation of controls over the
impairment assessment process.
The directors' consideration of the impairment indicators requires them to
make certain judgements, and may include certain estimates. These matters are
considered to make this a key audit matter.
· We obtained copies of all licenses held by the Group, and
performed procedures to confirm the Group's control of the licenses, that they
remain valid.
· Where the term of certain exploration licenses had expired, we
assessed if these are expected to be renewed in the normal course of business.
· We made specific enquiries of the directors and key staff
involved in the exploration work, and reviewed budgets and forecasts to
support the Group continuing with further exploration work in each of its
license areas.
· We considered the results of the bulk sampling works completed
during the period, for any matters that may indicate impairment.
· We considered other matters detailed within IFRS 6 that may give
rise to an indication of impairment.
· We reviewed the adequacy of disclosures in the financial
statements in relation to the impairment consideration and the impairment
charge recognised.
Based on our work performed, management recorded an impairment charge of
£103,279 relating to exploration license EL00104. After recording this
impairment charge we consider the directors' final position on impairment, and
the financial statements disclosures to be appropriate.
Our audit procedures in relation to these matters were designed in the context
of our audit opinion as a whole. They were not designed to enable us to
express an opinion on these matters individually and we express no such
opinion.
Other information
The other information comprises the information included in the annual report
other than the financial statements and our auditor's report thereon. The
directors are responsible for the other information contained within the
annual report.
Our opinion on the financial statements does not cover the other information
and, except to the extent otherwise explicitly stated in our report, we do not
express any form of assurance conclusion thereon. Our responsibility is to
read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements or our
knowledge obtained in the course of the audit, or otherwise appears to be
materially misstated. If we identify such material inconsistencies or apparent
material misstatements, we are required to determine whether this gives rise
to a material misstatement in the financial statements themselves. If, based
on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion the part of the directors' remuneration report to be audited
has been properly prepared in accordance with the Companies Act 2006.
In our opinion based on the work undertaken in the course of our audit:
· the information given in the strategic report and the directors'
report for the financial year for which the financial statements are prepared
is consistent with the financial statements; and
· the directors' report and strategic report have been prepared in
accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and the Company
and their environment obtained in the course of the audit, we have not
identified material misstatements in the strategic report or the directors'
report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept by the Company, or
returns adequate for our audit have not been received from branches not
visited by us; or
· the Company financial statements and the part of the directors'
remuneration report to be audited are not in agreement with the accounting
records and returns; or
· certain disclosures of directors' remuneration specified by law
are not made; or
· we have not received all the information and explanations we
require for our audit.
Corporate governance statement
We have reviewed the directors' statement in relation to going concern,
longer-term viability and that part of the Corporate Governance Statement
relating to the entity's voluntary compliance with the provisions of the UK
Corporate Governance Statement specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each
of the following elements of the Corporate Governance Statement is materially
consistent with the financial statements and our knowledge obtained during the
audit:
· Directors' statement with regards the appropriateness of adopting
the going concern basis of accounting and any material uncertainties
identified set out on page 17;
· Directors' explanation as to their assessment of the Group's
prospects, the period this assessment covers and why they period is
appropriate set out on page 19.
· Directors' statement on whether they have a reasonable
expectation that the Group will be able to continue in operation and meets its
liabilities set out on page 17;
· Directors' statement on fair, balanced and understandable set out
on page 13;
· Board's confirmation that it has carried out a robust assessment
of the emerging and principal risks set out on page 5;
· Section of the annual report that describes the review of
effectiveness of risk management and internal control systems set out on page
17; and
· Section describing the work of the audit committee set out on
page 18.
Responsibilities of the directors for the financial statements
As explained more fully in the directors' responsibilities statement set out
on page 13, the directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view, and
for such internal control as the directors determine is necessary to enable
the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for
assessing the Group's and the Company's ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the directors either intend to
liquidate the Group or the Company or to cease operations, or have no
realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:
· We obtained an understanding of the legal and regulatory
frameworks that are applicable to the Group, and the procedures in place for
ensuring compliance. The most significant regulations identified were the
Companies Act 2006, listing rules of the London Stock Exchange and the
requirements of the Group's mining and exploration licenses. Our work included
direct enquiry of the directors, who oversee all legal proceedings, reviewing
Board minutes and inspection of correspondence.
· We made enquiries of management, the Audit Committee and the
Group's external legal counsel in Uganda about any litigations and claims and
compliance with local legislation in Uganda.
· We reviewed management's correspondence with the mining
authorities in Uganda for any instances of non-compliance with laws and
regulations.
· We reviewed legal expenditure accounts to understand the nature
of expenditure incurred, and to consider any undisclosed instances of
non-compliance.
· We reviewed board minutes and RNS announcements for any
indication of non-compliance with laws and regulations.
· We communicated the relevant laws and regulations identified to
all members of the engagement team, and remained alert to any indication of
non-compliance with laws and regulations, or potential fraud, throughout our
audit work.
· As part of our audit planning process we assessed the different
areas of the financial statements, including disclosures, for the risk of
material misstatement. This included considering the risk of fraud where
direct enquiries were made of management and those charged with governance
concerning both whether they had any knowledge of actual or suspected fraud
and their assessment of the susceptibility of fraud. We considered the risk
was greater in areas that involve significant management estimate or
judgement. Based on this assessment we designed audit procedures to focus on
the key areas of estimation or judgement, this included risk-based testing of
journal transactions using data analytic software, both at the year end and
throughout the
year.
Owing to the inherent limitations of an audit, there is an unavoidable risk
that some material misstatements of the financial statements may not be
detected, even though the audit is properly planned and performed in
accordance with the ISAs (UK). The potential effects of inherent limitations
are particularly significant in the case of misstatement resulting from fraud
because fraud may involve sophisticated and carefully organised schemes
designed to conceal it, including deliberate failure to record transactions,
collusion or intentional misrepresentations being made to us.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditor's report.
Other matters which we are required to address
We were appointed by the Board of Directors on 14 December 2018 to audit the
financial statements for the period ending 30 September 2018. Our total
uninterrupted period of engagement is seven years, covering the periods ending
30 September 2018 to 30 September 2024.
The non-audit services prohibited by the FRC's Ethical Standard were not
provided to the Group or the Company and we remain independent of the Group
and the Company in conducting our audit.
Our audit opinion is consistent with the additional report to the audit
committee.
Use of our report
This report is made solely to the Company's members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the Company's members those matters we
are required to state to them in an auditor's report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company's members as a
body, for our audit work, for this report, or for the opinions we have formed.
Nick Jones
Senior Statutory Auditor
For and on behalf of
Crowe U.K. LLP
Statutory Auditor
London, U.K.
Date: 30 January 2025
Consolidated Statement of Comprehensive Income
for the year ended 30 September 2024
Notes 30 Sep 2024 30 Sep 2023
GBP GBP
Exploration costs (23,668) (53,347)
Impairment of intangible assets (103,279) -
Administrative fees and other expenses 5 (789,707) (1,298,872)
Operating loss (916,654) (1,352,219)
Finance costs 15 (44,987) (45,748)
Loss before tax (961,641) (1,397,967)
Taxation 8 - -
Loss for the year attributable to owners of the parent (961,641) (1,397,967)
Other comprehensive income
Items that may be reclassified to profit or loss:
Exchange differences on translation of foreign operation: 58,840 31,282
Other comprehensive income, net of tax 58,840 31,282
Total comprehensive loss attributable to owners of the parent (902,801) (1,366,685)
Basic and diluted loss per share (pence) 10 (0.45) (0.70)
Consolidated Statement of Financial Position as at 30 September 2024
Notes 30 Sep 2024 Restated 30 Sep 2023
GBP GBP
Non-current assets
Intangible assets 9 7,603,793 7,863,650
Current assets
Trade and other receivables 13 24,442 31,863
Cash and cash equivalents 114,694 129,853
Total current assets 139,136 161,716
Total assets 7,742,929 8,025,366
Current liabilities
Creditors: Amounts falling due within one year 14 (1,020,375) (1,335,255)
Surface liabilities 15 (134,953) -
Total current liabilities (1,155,328) (1,335,255)
Non-current liabilities
Surface liabilities 15 (794,183) (818,915)
Total liabilities (1,949,511) (2,154,170)
Net assets 5,793,418 5,871,196
Equity
Share capital 16 1,423,759 1,338,566
Share premium 16 9,377,229 8,637,399
Share options reserve 428,342 428,342
Translation reserve 2.9ii 89,579 30,739
Accumulated losses (5,525,491) (4,563,850)
Total equity 5,793,418 5,871,196
These financial statements were approved by the Board of Directors and
authorised for issue on 30 January 2025 and signed on its behalf by:
Cameron Pearce
Sam Quinn
Director
Director
Parent Statement of Financial Position as at 30 September 2024
Notes 30 Sep 24 Restated 30 Sep 23
GBP GBP
Fixed assets
Investment in subsidiaries 11 6,287,027 6,287,027
Other fixed assets 12 676,950 671,905
Total fixed assets 6,963,977 6,958,932
Current assets
Trade and other receivables 13 415,525 342,197
Cash and cash equivalents 114,694 129,853
Total current assets 530,219 472,050
Total assets 7,494,196 7,430,982
Current liabilities
Creditors: Amounts falling due within one year 14 (588,873) (826,954)
Total current liabilities (588,873) (826,954)
Net assets 6,905,323 6,604,028
Equity
Share capital 16 1,423,759 1,338,566
Share premium 16 9,377,229 8,637,399
Share options reserve 428,342 428,342
Accumulated losses (4,324,007) (3,800,279)
Total equity 6,905,323 6,604,028
The Company has taken advantage of the exemption allowed under section 408 of
the Companies Act 2006 and has not presented its own Statement of
Comprehensive Income in these financial statements. The loss after tax of the
parent company for the year was £523,728 (2023: loss of £653,348).
The Financial Statements were approved and authorised for issue by the Board
of Directors on 30 January 2025 and were signed on its behalf by:
Cameron
Pearce Sam
Quinn
Director
Director
Consolidated Statement of Changes in Equity for the year ended 30 September 2024
Share Share premium Share options reserve Accumulated losses Total equity
capital Translation reserve
GBP GBP GBP GBP GBP GBP
Balance as at 30 Sep 2022 1,181,316 7,480,829 402,148 (543) (3,165,883) 5,897,867
Loss for the year - - - - (1,397,967) (1,397,967)
Exchange differences on translation of foreign operations - - - - 31,282
31,282
Total comprehensive loss - - - 31,282 (1,397,967) (1,366,685)
Transactions with owners
New shares issued (note 16) 157,250 1,227,750 - - - 1,385,000
Share issue costs (note 16) - (71,180) - - - (71,180)
Share based payment charge - 26,194 - - 26,194
Total transactions with owners 157,250 1,156,570 26,194 - 1,340,014
-
Balance as at 30 Sep 2023 1,338,566 8,637,399 428,342 30,739 (4,563,850) 5,871,196
Loss for the year - - - - (961,641) (961,641)
Exchange differences on translation of foreign operations - - - - 58,840
58,840
Total comprehensive loss - - - 58,840 (961,641) (902,801)
Transactions with owners
New shares issued (note 16) 85,193 766,733 - - - 851,926
Share issue costs (note 16) - (26,903) - - - (26,903)
Total transactions with owners 85,193 739,830 - - 825,023
-
Balance as at 30 Sep 2024 1,423,759 9,377,229 428,342 89,579 (5,525,491) 5,793,418
Parent Statement of Changes in Equity for the year ended 30 September 2024
Share Share premium Share option reserve Accumulated losses Total equity
capital
GBP GBP GBP GBP GBP
Balance as at 30 Sep 2022 1,181,316 7,480,829 402,148 (3,146,931) 5,917,362
Loss for the year - - - (653,348) (653,348)
Total comprehensive loss - - - (653,348) (653,348)
Total transactions with owners
New shares issued (note 16) 157,250 1,227,750 - - 1,385,000
Share issue costs (note 16) - (71,180) - - (71,180)
Share based payment charge - - 26,194 - 26,194
Total transactions with owners 157,250 1,156,570 26,194 - 1,340,014
Balance as at 30 Sep 2023 1,338,566 8,637,399 428,342 (3,800,279) 6,604,028
Loss for the year - - - (523,728) (523,728)
Total comprehensive loss - - - (523,728) (523,728)
Total transactions with owners
New shares issued (note 16) 85,193 766,733 - - 851,926
Share issues costs (note 16) - (26,903) - - (26,903)
Total transactions with owners 85,193 739,830 - - 825,023
Balance as at 30 Sep 2024 1,423,759 9,377,229 428,342 (4,324,007) 6,905,323
Consolidated Statement of Cash Flows for the year ended 30 September 2024
Notes 30 Sep 2024 30 Sep 2023
GBP GBP
Operating activities
Loss after tax (961,641) (1,397,967)
Finance costs 44,987 45,748
Impairment 103,279 -
Share based payment 17 - 26,194
Unrealised currency translation 204,739 182,264
Changes in working capital
Decrease in trade and other receivables 7,422 53,984
(Decrease)/increase in trade and other payables (139,893) 272,664
Net cash flows utilised by operating activities (741,107) (817,113)
Cash flows from investing activities
Government grant 9 2,787,090 -
Investment in exploration assets 9 (2,846,130) (713,848)
Net cash flows utilised by investing activities (59,040) (713,848)
Cash flows from financing activities
Shares issued (net of issue cost) 16 784,988 1,313,820
Net cash flows from financing activities 784,988 1,313,820
Decrease in cash and cash equivalents (15,159) (217,141)
Cash and cash equivalents at the beginning of the year 129,853 346,994
Cash and cash equivalents at the end of the year 114,694 129,853
Net debt note
Cash at bank Surface Total
and in hand Liability
GBP GBP GBP
At 1 October 2022 346,994 (978,255) (631,261)
Cash flows (217,141) - (217,141)
Other non-cash changes - 159,340 159,340
As 30 September 2023 129,853 (818,915) (689,062)
As 1 October 2023 129,853 (818,915) (689,062)
Cash flows (15,159) - (15,159)
Other non-cash changes - (110,221) (110,221)
As 30 September 2024 114,694 (929,136) (814,442)
Parent Statement of Cash Flows for the year ended 30 September 2024
30 Sep 2024 30 Sep 2023
Notes GBP GBP
Operating activities
Loss after tax (523,728) (653,348)
Less finance income (79,881) (55,873)
Increase in bad debt provision 12,13 31,289 11,742
Share based payment 17 - 26,194
Changes in working capital
Increase in trade and other receivables (73,328) (27,167)
Decrease in trade and other payables (198,046) (58,641)
Net cash flows from operating activities (843,694) (757,093)
Cash flows from investing activities
Loan advanced to subsidiary (472,553) (105,828)
Government grant 2,787,090 -
Investment in subsidiary, relating to exploration costs paid 11 (2,270,990) (668,040)
Net cash flows used in investing activities 43,547 (773,868)
Cash flows from financing activities
Shares issued (net of issue cost) 16 784,988 1,313,820
Net cash flows from financing activities 784,988 1,313,820
Decrease in cash and cash equivalents (15,159) (217,141)
Cash and cash equivalents at the beginning of the year 129,853 346,994
Cash and cash equivalents at the end of the year 114,694 129,853
Notes to the Financial Statements for the year ended 30 September 2024
1. General
Blencowe Resources Plc (the "Company") is a public limited company
incorporated and registered in England and Wales with registered company
number 10966847. Its registered office is situated at 167-169 Great Portland
Street, Fifth Floor London, W1W 5PF.
The Group did not earn any trading income during the year under review but
incurred expenditure associated with financing and operation of the Group and
developing its principal assets.
2. Accounting policies
2.1 Basis of preparation
The principal accounting policies applied in the preparation of the Company
and Group's Financial Statements are set out below. These policies have been
consistently applied to the periods presented, unless otherwise stated.
The Company and Group's Financial Statements have been prepared in accordance
with UK adopted international accounting standards ("IFRS").
The Group's Financial Statements are presented in GBP, which is the Company's
functional currency. All amounts have been rounded to the nearest pound,
unless otherwise stated.
Prior year adjustment
The Consolidated and Parent statements of financial position have been
restated to recognise exploration expenditure in relation to a material
invoice of £259,086 that was received several months after the prior year
end, relating to works done in the year ended 30 September 2023. This resulted
in an increase of this amount to intangible assets and trade payables in the
Group accounting records, and in the Parent, accounting records an increase to
investment in subsidiary and trade payables of this amount (Note 9,11 and 14).
There is no impact to the statement of comprehensive income. As the invoice
does not affect the opening position at 1 October 2022, a second comparative
statement of financial position has not been presented.
2.2 Basis of consolidation
The Consolidated Financial Statements comprise the financial statements of the
Company and its subsidiaries Consolidated African Resources Limited ("CARU")
and Blencowe Battery Mines Uganda - SMC Limited.
Subsidiaries are fully consolidated from the date of acquisition, being the
date on which the Group obtains control. Control is achieved when the Group
is exposed, or has rights, to variable returns from its involvement with the
investee and has the ability to affect those returns through its power over an
investee, including:
• the contractual arrangement with the other vote
holders of the investee;
• rights arising from other contractual arrangements;
and
• the Group's voting rights and potential voting rights
The Group re-assesses whether or not it controls an investee if facts and
circumstances indicate that there are changes to one or more of the three
elements of control. Subsidiaries are fully consolidated from the date on
which control is transferred to the Group. They are deconsolidated from the
date that control ceases. Assets, liabilities, income and expenses of a
subsidiary acquired or disposed of during the period are included in the Group
Financial Statements from the date the Group gains control until the date the
Group ceases to control the subsidiary.
All intra-group balances, transactions, income and expenses and profits and
losses resulting from intra-group transactions that are recognised, are
eliminated in full.
2.3 Going concern
At 30 September 2024, the Group had £7,742,929 of total assets (2023:
£8,025,366), of which £114,694 are held as cash and cash equivalents (2023:
£129,853).
In making an assessment of going concern for the Group and Company, the Board
of Directors have reviewed cash flow forecasts covering a period of 12 months
from the date these financial statements were approved, and have concluded
that it is appropriate to prepare the financial statements on a going concern
basis.
The Company has successfully agreed a US$5 million grant through the US
Development Finance Corporation (DFC). This funding is being provided in a
number of tranches aligned to completion of works related to the Definitive
Feasibility Study, with $3.5m of this funding having been advanced as of 30
September 2024. As the DFC grant does not cover the entirety of the Definitive
Feasibility Study costs, further funding in addition to the amounts already
raised after the year end will be required during the going concern assessment
period. Management will pursue options for this funding including share
placements and other potential sources. Details on the funds raised from
equity transactions subsequent to the year end are detailed in note 20.
These conditions indicate the existence of a material uncertainty, which may
cast doubt over the Group's and Company's ability to continue as a going
concern. The financial statements do not include adjustments that would arise
in the event of the Group and Company not being able to continue as a going
concern.
2.4 Changes in material accounting policies
The Group and Company have adopted all new IFRS and amendments to IFRS
applicable for this period. There has been no change to the Group's accounting
policies as a result, and no other material impact to the financial
statements.
2.5 Standards, amendments and interpretations to published standards not yet effective
The Directors have reviewed the IFRS standards in issue but not in effect as
of the period end. In their view, none of these standards would have a
material impact on the financial statements of the Group.
2.6 Intangible assets
Exploration and evaluation assets
The Group recognises expenditure as exploration and evaluation assets when it
determines that those assets will be successful in finding specific mineral
resources. Expenditure included in the initial measurements of exploration and
evaluation assets and which are classified as intangible assets relate to the
acquisition of rights to explore, exploratory drilling, sampling and
activities to evaluate the technical feasibility and commercial viability of
extracting a mineral resource. Capitalisation of pre-production expenditure
ceases when the mining property is capable of commercial production.
Impairment
Exploration and evaluation assets are not subject to amortisation until
production commences but are assessed for impairment when an event or trigger
requires an assessment to be carried out. The assessment is carried out by
allocating exploration and evaluation assets to cash generating units
("CGU's"), which are based on specific projects or license areas. Currently
there is one minng license relating to the Orom-Cross Project, with a number
of nearby exploration licenses. Whenever the exploration for and evaluation of
mineral resources in cash generating units does not lead to the discovery of
commercially viable quantities of mineral resources and the Group has decided
to discontinue such activities of that unit, the associated expenditures are
written off to the Statement of Comprehensive Income.
2.7 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of
one entity and a financial liability or equity instrument of another.
(i) Financial assets
Financial assets are classified at initial recognition. The classification of
financial assets at initial recognition that are debt instruments depends on
the financial asset's contractual cash flow characteristics and the Group's
business model for managing them. The Group initially measures a financial
asset at its fair value plus, in the case of a financial asset not at fair
value through profit or loss, transaction costs.
In order for a financial asset to be classified and measured at amortised
cost, it needs to give rise to cash flows that are 'solely payments of
principal and interest (SPPI)' on the principal amount outstanding. This
assessment is referred to as the SPPI test and is performed at an instrument
level.
Classification and measurement is based on both whether contractual cash flows
are solely payments of principal and interest; and whether the debt instrument
is held to collect those cash flows. In the case of the Group, all financial
assets meet this criteria and they are held at amortised cost.
Impairment of financial assets
IFRS 9's impairment requirements use more forward-looking information to
recognise expected credit losses - the ECL model.
ECLs are based on the difference between the contractual cash flows due in
accordance with the contract and all the cash flows that the Company expects
to receive, discounted at the original effective interest rate. The expected
cash flows will include cash flows from the sale of collateral held or other
credit enhancements that are integral to the contractual terms.
ECLs are recognised in two stages. For credit exposures for which there has
not been a significant increase in credit risk since initial recognition, ECLs
are provided for credit losses that result from default events that are
possible within the next 12 months (a '12-month ECL'). For those credit
exposures for which there has been a significant increase in credit risk since
initial recognition, a loss allowance is required for credit losses expected
over the remaining life of the exposure, irrespective of the timing of the
default (a 'lifetime ECL').
For the Company's receivables from its subsidiary, management have assessed a
12 month ECL at 5% to be appropriate for the current year.
(ii) Financial liabilities
Financial liabilities are classified, at initial recognition, as financial
liabilities at amortised cost. The Group's financial liabilities include trade
and other payables and surface liabilities.
Subsequent measurements
Surface liabilities and trade and other payables.
After initial recognition, surface liabilities and trade and other payables
are subsequently measured at amortised cost using the effective interest rate
method. Gains and losses are recognised in the statement of profit or loss
when the liabilities are derecognised, as well as through the effective
interest rate amortisation process.
Amortised cost is calculated by taking into account any discount or premium on
acquisition and fees or costs that are an integral part of the effective
interest rate. The effective interest rate amortisation is included as finance
costs in the statement of profit or loss.
2.8 Share capital
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of new shares or options are shown in equity as a
deduction, net of tax, from proceeds.
Warrants
Warrant options have classified as equity since they meet the definition of
IAS 32 as equity.. The fair value of the warrants has been calculated using
the Black-Scholes option pricing model. For more information, please see
note 17.
Share options
The Group accounts for the equity-settled share options it has issued in
accordance with IFRS 2. The share options are recognised at their fair value
at the date of grant. The total share based payment charge expensed is
recognised over the vesting period, which is the period over which performance
conditions are to be satisfied. The fair value is calculated using the
Black-Scholes option pricing model, adjusted for the probability of meeting
market based vesting conditions where these are included. The inputs used in
the model are based on management's best estimate.
No expense is recognised for options that do not ultimately vest, except for
awards where vesting is conditional on a market condition or non-vesting
condition, which are treated as vesting irrespective of whether or not the
market or non-vesting condition is satisfied, provided all other performance
or service conditions are satisfied.
2.9 Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements of each of the group's entities are
measured using the currency of the primary economic environment in which the
entity operates ('the functional currency'). The consolidated financial
statements are presented in Great British Pounds currency (GBP).
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency
using the exchange rates at the dates of the transactions. Monetary assets and
liabilities denominated in foreign currencies at the reporting date are
retranslated to the functional currency at the exchange rate at that date.
Foreign exchange gains and losses resulting from the settlement of such
transactions, and from the translation of monetary assets and liabilities
denominated in foreign currencies at year end exchange rates, are generally
recognised in profit or loss.
Non-monetary items in a foreign currency that are measured in terms of
historical cost are translated using the exchange rate at the date of the
transaction. Foreign currency differences arising on the consolidation of
the Group's companies are accumulated in the translation reserve. The
Company's subsidiaries Consolidated African Resources Limited and Blencowe
Battery Mines Uganda SMC Limited, whose functional currency is USD.
2.10 Earnings per share
The Company presents basic and, when appropriate, diluted earnings per share
("EPS") data for its Ordinary Shares. Basic EPS is calculated by dividing the
profit or loss attributable to ordinary shareholders of the Company by the
weighted average number of Ordinary Shares outstanding during the year.
Diluted EPS is calculated by adjusting the earnings and number of shares for
the effects of dilutive potential Ordinary Shares.
2.11 Income tax
Income tax expense comprises current tax and deferred tax.
Current income tax
A 19% rate of corporate income tax applies to the Company. From 1 April 2023
the main corporation tax increased from 19% to 25%, and a new 19% small
profits rate of corporation tax was introduced for companies whose profits do
not exceed £50,000.
Deferred income tax
Deferred tax is recognised in profit or loss except to the extent that it
relates to a business combination, or items recognised directly in equity or
in other comprehensive income. Deferred income tax is recognised on temporary
differences arising between the tax bases of assets and liabilities and their
carrying amounts in the Financial Statements. Deferred income tax assets and
liabilities are measured on an undiscounted basis at the tax rates that are
expected to apply to the period when the related asset is realised or the
liability is settled, based on tax rates (and tax laws) that have been enacted
or substantively enacted at the date of the Consolidated Statement of
Financial Position.
2.12 Investment in subsidiary
Investments in subsidiary are measured at cost less impairment. The investment
in subsidiary balance includes any exploration costs paid on behalf of the
subsidiary. The balance also includes the impact of the government grant
received from the US Government. Refer to Note 2.14.
2.13 Cash and cash equivalents
Cash and cash equivalents in the Company and Group statements of financial
position comprise bank balances only.
2.14 Government grants
Government grants are recognised once the entity has complied with conditions
attaching to the government grant and the grant funds have been received.
Government grants are accounted for using the capital approach. Under this
approach, the grant funds are recognised outside the statement of
comprehensive income. Government grants related to intangible assets, shall be
presented in the statement of financial position by deducting the grant funds
from the intangible asset in arriving at the carrying amount of the intangible
asset. The grant funds are recognised in the statement of comprehensive income
over the life of a depreciable asset as a reduced depreciation expense.
3. Critical accounting estimates and judgements
In preparing the Company and Group Financial Statements, the Directors are
required to make judgements, estimates and assumptions that affect the amounts
reported. These estimates and judgements are continually reviewed and are
based on experience and other factors, including expectations of future events
that are believed to be reasonable under the circumstances.
Accounting estimates and assumptions are made concerning the future and, by
their nature, may not
accurately reflect the related actual outcome. There are no key assumptions
and other sources of estimation uncertainty that have a significant risk of
causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year.
Critical accounting estimates
Interest charge on amounts falling after one year
At year end, the NPV of the liability for surface rights to the owners of
the land was £929,136 (2023: £818,915). Interest is charged on the
liabilities at a rate of 5%, if the discount rate used to calculate the
present value of the liabilities was to increase by 1%, the carrying value of
the surface rights liability would increase by around £36,685 (2023:
£34,506). The interest charged during the year was for the surface rights was
£61,687 (2023: £45,748), if the rate was increased by 1% then the interest
charge would increase by approximately £6,168 (2023: £6,235). For further
information on the lease, please see note 15.
Critical accounting judgements
Impairment of intangible assets - exploration and evaluation costs
IFRS 6 requires entities recognising exploration and evaluation assets to
perform an impairment test on those assets when specific facts and
circumstances indicate an impairment test is required. The assessment involves
judgement as to the status of licenses and the likelihood of renewal of
exploration licenses which expire in the near future. The directors also make
a judgement on the ability to meet license obligations, budgets and plans for
future exploration activity, the results of that exploration activity, and to
assess the recoverability of the capitalised exploration and evaluation costs
on development of the project.
Surface Iiability
Management are required to make judgements on when the terms of certain
instalment payments under the surface rights agreement are met. The value of
the surface liability is measured at the present value of the estimated
payments due to the Landowner's Association over the lease term. If the
payments for which judgement is required were made one year later the
difference in the liability to the Landowners would decrease by £3,161.
Going concern
In their assessment of going concern, the Directors have prepared cash flow
forecast showing the Groups' expected future expenditure. The Directors were
required to make estimates and judgements over future cash flows and funding.
For further information about the Group's going concern, please see note 2.3.
4. Operating segment activities
The Group is engaged in the business of mining. At this stage in the Group's
development, the Group is focusing on financing and continued development of
the Orom-Cross Graphite Project in Uganda. This is considered to be the only
operating segment.
5. Administrative fees and other expenses
30 Sep 2024 30 Sep 2023
GBP GBP
Directors' remuneration (see note 6) 153,556 140,051
Professional fees 129,617 226,471
Salaries (see note 7) 150,000 150,000
Listing fees 43,238 41,123
Audit fees 42,000 35,000
Share option/warrant cost (see note 17) - 26,194
Administration fees 47,000 47,000
Broker fees 33,241 41,000
Travelling expenses 16,395 16,852
Ugandan taxes (note 8) - 392,425
Miscellaneous fees 42,884 72,625
Foreign currency loss 131,776 110,131
Total 789,707 1,298,872
Key management remuneration, together with any share-based payments, are
disclosed in note 7.
6. Directors' remuneration
30 Sep 2024 30 Sep 2023
GBP GBP
Base fees 151,500 138,000
Employer NI 2,056 2,051
Share based payments - 13,097
Total 153,556 153,148
7. Key management personnel
The number of key management (excluding members the Board) employees
throughout the year was as follows;
30 Sep 2024 30 Sep 2023
By the Company 2 2
By the Group 2 2
The key management employees who served during the year, together with details
of their interest in the shares of the Company as at the reporting date were:
Number of shares Value of the shares 30 Sep 2024
Michael Ralston - CEO 3,225,000 £177,375
Iain Wearing - COO 408,333 £22,458
Number of shares Value of the shares
30 Sep 2023
Michael Ralston - CEO 3,225,000 £188,950
Iain Wearing - COO 408,333 £22,500
The total base salary costs recognised as an expense for the year was
£150,000 (2023: £150,000). A further £90,000 (2023: £90,000) was
capitalised as they are related to the Orom-Cross Graphite Project. Total
share-based payments for the year were nil (2023: £13,097). There was no
other component of compensation.
8. Taxation
Analysis of charge in the year 30 Sep 2024 30 Sep 2023
GBP GBP
Current tax:
UK Corporation tax on loss for the year - -
Deferred tax - -
Tax on loss - -
30 Sep 2024 30 Sep 2023
GBP GBP
Loss before tax (961,641) (1,397,967)
Tax credit at 19% (182,711) (265,614)
Tax effect of expenses not deductible for tax 22,914 24,993
Tax losses for which no deferred tax asset is recognised 159,797 240,621
Taxation charge for the year - -
The Parent Company has accumulated tax losses arising in the UK of £3,405,762
(2023: £3,002,632) that are available, under current legislation, to be
carried forward against future profits.
Following an inspection by the Ugandan tax authorities of the tax affairs of
CARU covering the period between January 2014 and December 2022, the Group
incurred a capital gains tax charge of £392,425. This related to the
acquisition by the Company of CARU in 2019. The amount was chargeable to the
former owners, however this was not settled by them and under Ugandan
legislation the liability is reclaimable from the acquirer if it cannot be
obtained from the seller. This amount was included within administrative
expenses in the financial year 2023, as it does not relate to the profits or
gains made by the Group. Please refer to note 5.
9. Intangible and other assets
For the year ended 30 September 2024 intangible assets represent only
capitalised costs associated with the Group's exploration, evaluation and
development of mineral resources.
Group Exploration assets Government Grant Total
GBP GBP GBP
Balance at 30 September 2022 6,615,253 - 6,615,253
Additions - during the year 1,450,063 - 1,450,063
Exchange differences (201,666) - (201,666)
Balance at 30 September 2023 (Restated) 7,863,650 - 7,863,650
Additions - during the year 2,846,130 - 2,846,130
Impairment (103,279) (103,279)
Government grant - (2,787,090) (2,787,090)
Exchange differences (215,618) - (215,618)
Balance at 30 September 2024 10,390,883 (2,787,090) 7,603,793
Intangible assets have been restated due to an invoice that was received post
year end for £259,086 and this is above the materiality level.
Additions during the year represent exploration costs at Orom-Cross Graphite
Project.
Management performed a review for indications of impairment as at 30 September
2024 and concluded impairment was required for exploration license EL00104
which had expired and could not be renewed further. Management have applied
for a new exploration license covering a similar area to EL00104 and this is
currently being assessed by the licensing authorities.
The company signed a US$5 million agreement with the U.S. International
Development Finance Corporation ("DFC") in order to provide substantial
funding for the Orom Cross Definitive Feasibility Study programme, via a
Technical Assistance Grant ("TAG"). The DFC is a proxy for the US Government
which funds the organisation and ultimately sets its vision, parameters and
funding distribution. DFC payments will be made upon as agreed feasibility
study milestones are achieved. As part of the US$5 million Technical
Assistance Grant ("TAG") the DFC has a right of first refusal on commercial
terms to arrange project financing for the Orom-Cross project, which may
deliver Blencowe with a full funded solution to bring Orom-Cross into
production with support from a major financial institution. The agreement is
subject to various events of default.
10. Loss per share
The calculation of the basic and diluted loss per share is based on the
following data:
30 Sep 2024 30 Sep 2023
Earnings
Loss from continuing operations for the year attributable to the equity (961,641) (1,397,967)
holders of the Company (£)
Number of shares
Weighted average number of Ordinary Shares for the purpose of basic and 216,036,425 200,041,594
diluted earnings per share
Basic and diluted loss per share (pence) (0.45) (0.70)
11. Investment in subsidiaries
Details of the Company's subsidiary at 30 September 2024 are as follows:
Name of the subsidiary Place of incorporation Portion of ordinary shares held Principal activity
Consolidated African Resources Limited Uganda 100% Exploration
Uganda 100% Mining Extraction
Blencowe Battery Mines Uganda - SMC Limited
Restated
30 Sep 2024 30 Sep 2023
GBP GBP
Investments in subsidiary
Investments at the beginning of the year as previously stated 6,287,027 4,892,924
Additions during the year 2,270,990 1,394,103
Government grant (2,270,990) -
Total investment in subsidiary 6,287,027 6,287,027
The investment in subsidiary at 30 September 2023 have been restated because
of an investment amount of £259,086 paid by the Parent on behalf of the
Subsidiary for project costs.
The Group's new subsidiary Blencowe Battery Mines Uganda - SMC Limited had no
significant transactions during the year.
As described in note 9, the Company received amounts totalling £2,787,090 as
a grant from the U.S. International Development Finance Corporation ("DFC")
relating to expenditure incurred on the Orom Cross Definitive Feasibility
Study programme. Of the total expenditure, £2,279,990 was incurred by the
parent company and recognised as an increase in its investment in the
subsidiary Consolidated Africa Resources Limited ("CARU"). The remaining
amount was incurred by CARU and recognised as an increase to the intercompany
loan with the parent company (note 12). The grant receipts have accordingly
been recorded in the parent company accounts to offset the relevant
Feasibility Study costs included in the investment value and the intercompany
loan.
12. Other fixed assets
Restated
30 Sep 2024 30 Sep 2023
Group Company Group Company
GBP GBP GBP GBP
Loan to subsidiaries (see below) - 739,352 - 707,268
Less: ECL provision - (62,402) - (35,363)
Total - 676,950 - 671,905
On 18 December 2020 the Company and its subsidiary entered into a loan
agreement. The facility is for an amount up to £5,000,000 and carries a base
interest of 5% plus Bank of England interest rate per annum chargeable at year
end. The loan is considered to be a long-term asset.
During the year, the Company agreed to cover some expenses for Consolidated
African Resources Limited (CARU) for the value of £575,140 (2023: £96,051).
The amount borrowed at the year end was £736,760 (2023: £589,062). The total
interest charged for the year ended 30 September 2024 is £79,448 (2023:
£55,873). The interest payable at the year end was £197,655 (2023:
£118,206).
The value of the loan is subject to 12 months ECL of 5%, representing the
possible default events over the next 12 months of the financial instrument.
Due to the increase of expenses paid by the Company on behalf of CARU, the
loan and its interest has increased, this has led to an increase in the
provision during the year.
30 Sep 2024 30 Sep 2023
Group Company Group Company
GBP GBP GBP GBP
Brought forward ECL provision - 35,363 - 27,471
Provision expense - 27,039 - 7,892
Carried forward ECL provision - 62,402 - 35,363
13. Trade and other receivables
30 Sep 2024 30 Sep 2023
Group Company Group Company
GBP GBP GBP GBP
Other receivables 8,948 8,948 9,421 9,421
Amounts due from subsidiary - 391,084 - 310,334
Prepayments 15,494 15,493 22,442 22,442
Total 24,442 415,525 31,863 342,197
Included within other receivables is amounts receivable from CARU.
30 Sep 2024 30 Sep 2023
Group Company Group Company
GBP GBP GBP GBP
Amount receivable from CARU (formerly BRUL) - 411,667 - 326,667
Less: ECL provision - (20,583) - (16,333)
Total - 391,084 - 310,334
In the current year the value of the receivable was subject to 12 months ECL
of 5%. The increase in the provision expense is due to the charge of
management fees from the Company to its subsidiary CARU. As of the year end,
the amount that CARU owes the Company on management services was £411,667
(2023: £326,667).
30 Sep 2024 30 Sep 2023
Group Company Group Company
GBP GBP GBP GBP
Brought forward ECL provision - 16,333 - 12,083
Provision expense - 4,250 - 4,250
Carried forward ECL provision - 20,583 - 16,333
14. Creditors: Amounts falling due within one year
30 Sep 2024 30 Sep 2023
Restated Restated
Group Company Group Company
GBP GBP GBP GBP
Trade payables 634,918 512,825 903,671 787,794
Ugandan taxes (note 8) 309,409 - 392,425 -
Accruals 76,048 76,048 39,159 39,159
Total 1,020,375 588,873 1,335,255 826,953
Trade payables have been restated in the prior year to recognise a creditor
balance relating to exploration expenditure costs for the period of £259,086
(note 2.1).
15. Creditors: Amounts falling after one year
The Ugandan Mining Act 2003 requires an applicant for a mining lease to obtain surface rights from landowners in the mineral area before the respective mining lease can be granted. Accordingly, when the Group acquired its subsidiary, it obtained surface rights by way of 49 years lease over the area. The liability to the landowners is to be paid in 10 instalments on a section basis as the project progresses. The progress on each section is not limited to any time frames and is at the Group's discretion.
On 10 September 2022 the surface rights agreement was revised and signed
between the Locomo Communal Land Association and Consolidated African
Resources Limited, the surface rights remain at 49 years. The liability to the
land owners will be paid in 8 instalments at defined dates, which are subject
to certain conditions being achieved with the final payment due in 2035.
30 Sep 2024 30 Sep 2023
GBP GBP
Balance as at 1 October 818,915 978,255
Change in estimate 148,468 -
Utilisation - (148,468)
Interest charged during the period 44,987 45,748
Exchange gain (83,234) (56,620)
Total payable as at 30 September 929,136 818,915
Analysis between current and non-current liability
Payable within 12 months 134,953 -
Payable after 12 months 794,183 818,915
929,136 818,915
The value of the liability is measured at the present value of the contractual
payments due to the Land Owners' Association over the lease term, with the
discount rate of 5%.
At the statement of financial position date, the Group undiscounted amount
payable to the Land Owners is;
2024 2023
GBP GBP
Payable within 1 years 134,953 -
Payable within 2-5 years 269,907 290,388
Payable after 5 years 809,720 871,164
1,214,580 1,161,552
16. Share capital
Number of shares issued Nominal value per share Share capital Share premium Total share capital
GBP GBP GBP GBP
At 30 Sep 2022 177,929,950 1,181,316 7,480,829 8,662,145
Issue of Ordinary shares 18,750,000 0.005 93,750 656,250 750,000
Issue of Ordinary shares 12,700,000 0.005 63,500 571,500 635,000
Share issue costs - - - (71,180) (71,180)
At 30 Sep 2023 209,379,950 0.005 1,338,566 8,637,399 9,975,965
Issue of Ordinary shares 17,038,520 0.005 85,193 766,733 851,926
Share issue costs - - - (26,903) (26,903)
At 30 Sep 2024 226,418,470 0.005 1,423,759 9,377,229 10,800,988
During the year ended 30 September 2024, the Company issued the following
shares;
Date Number of Ordinary shares issued Nominal share value Share price
GBP GBP
06 February 2024 7,847,000 0.005 0.0500
30 July 2024 9,191,520 0.005 0.0500
All of the shares issued are classed as ordinary and have similar rights
attached to them. No warrants were issued in the current financial year.
As at 30 September 2024 the number of shares issued and fully paid were
225,158,174 (2023: 209,344,950), 1,260,296 shares are unpaid at 30 September
2024 (2023: unpaid shares 35,000).
17. Share based payments
Warrants
The following warrants were issued in exchange for a good or service:
30 Sep 2024 30 Sep 2023
Warrants Number warrants Weighted average exercise price Number warrants Weighted average exercise price
Outstanding on 1 Oct - - 1,250,000 6.00p
Cancelled/ exercised - - (1,250,000) 6.00p
Outstanding on 30 Sep - - - -
Weighted average remaining contractual Life - 0.57 years
The warrants have no vesting period and have been recognised in full upon
issue. If the warrants remain unexercised after a period of three years from
the date of grant, they will expire. The holder may exercise the subscription
right at any time within the subscription period.
The above warrants were valued using the Black Scholes valuation method. The
assumptions used are detailed below. The expected future volatility has been
determined by reference to the average volatility of similar entities:
Warrants 30 Sep 2022
Weighted Average Share Price 6.00p
Weighted Average Exercise Price 6.00p
Expected Volatility 56%
Expected Life 3 years
Risk-free Rate 0.23%
Expected Dividend Nil
Weighted Average Fair Value (GBP) 32,603
Options
The following options were issued in exchange for a good or service:
30 Sep 2024 30 Sep 2023
Options Number of options Weighted average exercise price Number Options Weighted average exercise price
Outstanding on 01 Oct 21,000,000 5.76p 16,000,000 6.00p
Issued during the year - - 5,000,000 5.00p
Outstanding on 30 Sept 21,000,000 5.76p 21,000,000 5.76p
Weighted average remaining contractual Life 2.17 years 3.23 years
The options issued prior to 1 October 2021 have no vesting periods and have
been recognised upon issue. If the options remain unexercised after a period
of five years from the date of grant, they will expire. The share options
cannot be exercised if the holder has ceased employment.
The options issued in the prior year include a market based vesting condition,
the share options would only vest if the share price of the Company trades in
excess of 10p per share for 10 consecutive days.
The above options were valued using the Black Scholes valuation method,
adjusted for the probability of meeting the market-based vesting condition.
The assumptions used for the options granted in the prior period are detailed
below. The expected future volatility has been determined by reference to the
average volatility of similar entities during the year:
Options 30 Sep 2023
Share Price 4.6p
Exercise Price 5.00p
Expected Volatility 67%
Expected Life 5 years
Risk-free Rate 3.47%
Expected Dividend Nil
Fair Value (GBP) 26,194
Deferred tax
No deferred tax asset has been recognised in respect of share options and
warrants due to the uncertainty of the future trading profits.
18. Financial instruments
18.1 Categories of financial instruments
30 Sep 2024 30 Sep 2023
Group Company Group Company
GBP GBP GBP GBP
Financial assets at amortised cost
Trade and other receivables 8,948 400,032 9,421 319,755
Cash and cash equivalents 114,694 114,694 129,853 129,853
Financial liabilities at amortised cost
Trade and other payables 944,327 588,873 1,296,096 787,794
Surface liability 929,136 - 818,915 -
18.2 Financial risk management objectives and policies
The Company's major financial instruments include cash and cash equivalents, trade and other payables and other receivables. The fair value of the Group's financial instruments are equal to their carrying value. Details of these financial instruments are disclosed in respective notes. The risks associated with these financial instruments, and the policies on how to mitigate these risks are set out below. Management monitors these exposures to ensure appropriate measures are implemented in a timely and effective manner.
Currency risk
The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the United States Dollar ("USD") Ugandan shilling ("UGX") and Australian Dollar ("AUD"). Foreign exchange risk arises from recognised monetary assets and liabilities. The Group also exposes to currency exposure, BRUL expenses are paid in both USD, UGX and AUD, with the amount payable to the land owners denominated in UGX.
The table below summaries the financial assets and liabilities denominated in
foreign currencies.
30 Sep 2024 30 Sep 2023
USD UGX AUD USD UGX AUD
Financial assets 133 - - 891 - -
Financial liabilities 46,483 1,238,545 435,741 41,827 818,915 35,001
With all other variables held constant, the effect on profit and loss had the
GBP weakened or strengthened against USD/UGX/AUD by 5% at the year end results
in a (£17,796) (2023: £27,782) change in value.
Credit risk
Credit risk arises on cash balances. The amount of credit risk is equal to the
amounts stated in the statements of financial position for each of the assets
(notes 12 & 13).
The Group's policy to manage this risk is to deal with banks that are
regulated entities. The Group's principal banker, Barclays Bank PLC, is
regulated by the United Kingdom Financial Services Authority, and has a credit
rating of A2 (2023: A1).
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and
marketable securities and the availability of funding through an adequate
amount of committed credit. The Company aims to maintain flexibility in
funding.
The maturity of the Company's financial liabilities at the statement of
financial position date, based on the contracted undiscounted payments are
disclosed in note 14 and surface liability included in note 15, falls within
one year and payable on demand.
Capital risk
The Company defines capital as the total equity of the Company. The Company's
objectives when managing capital are to safeguard the Company's ability to
continue as a going concern in order to provide returns for shareholders and
benefits for other stakeholders and to maintain an optimal capital structure
to reduce the cost of capital.
19. Related party transactions
Details of Directors 'remuneration are disclosed in note 6.
Sam Quinn is a director and shareholder of the Company and a Director of
Lionshead Consultants Limited. During the year, Lionshead Consultants
Limited charged consultancy fees of £42,000 (2023: £36,000).
20. Events after the year end
On 6 November 2024, the Group successfully raised a total of £1,500,000
through the issue of 37,500,000 new ordinary shares at 4 pence per share
("Fundraise"). The Fundraise comprises a £1 million placing of 25,000,000 new
ordinary shares ("Firm Placing") arranged through its broker Tavira Financial
("Tavira") and a conditional £500,000 subscription for 12,500,000 new
ordinary shares from senior management ("Conditional Subscription"). The
Conditional Subscription was subject to FCA approval of a Prospectus by the
Company. Investors in the Fundraise will be issued 1 warrant per 1 Placing
Share ("Investor Warrants"), exercisable at 6p for a 3-year period from
Admission. Therefore, the Company will issue an aggregate of 37,500,000
warrants, which if fully exercised, would result in gross proceeds of £2.25
million in additional funding. On 7 November the Board announced that the
retail offer for the issue of 2,946,890 new shares had closed and raised
£117,876.
On 26 November 2024, the Company published a Prospectus for the issue of
37,711,260 New Ordinary Shares in connection with the July and November
Subscription and the issue of Fee Shares to strategic partners of the
Definitive Feasibility Study. The Company made an application for the
37,711,260 New Ordinary Shares to be admitted to trading on the Equity Shares
on 2 December 2024 resulting in a total share capital and total voting rights
of 292,076,620. 10,700,000 new share options were issued to the Directors.
On 9 December 2024, the Directors and Senior Management gave notice that they
had exercised 3,150,000 warrants at 4 pence and raised £126,000. The Company
made an application for 3,150,000 new ordinary shares resulting in a total
issued share capital and total voting rights of 295,226,620.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR UASWRVBUAORRRecent news on Blencowe Resources
See all newsREG - Stock Exch Notice - Admission to Trading - 24/04/2025
AnnouncementREG - Official List - Official List Notice
AnnouncementREG - Blencowe Resources - Results of Retail Offer
AnnouncementREG - Blencowe Resources - Fundraise of £1m to support completion of the DFS
AnnouncementREG - Blencowe Resources - Retail Offer to Raise up to £100,000
Announcement