REG - Capital Metals PLC - Final Results
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RNS Number : 6200V Capital Metals PLC 18 August 2025
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE UK
VERSION OF THE MARKET ABUSE REGULATION NO 596/2014 WHICH IS PART OF ENGLISH
LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL) ACT 2018, AS AMENDED. ON
PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS
INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.
18 August 2025
Capital Metals PLC
("Capital Metals" or the "Company")
Final Results for the Year Ended 31 March 2025
Capital Metals (AIM: CMET), a mineral sands company approaching mine
development stage at the high-grade Taprobane Minerals Project in Sri Lanka
(the "Project"), announces its financial results for the financial year ended
31 March 2025 (the "Year").
The Company's Annual Report and Accounts, along with the Notice of Annual
General Meeting, will be posted to shareholders in due course. The Annual
Report and Accounts will also be available shortly on the Company's website at
www.capitalmetals.com/documents/ (http://www.capitalmetals.com/documents/) .
Key Points:
During the Year:
· Successfully reduced Stage 1 Project capex by one-third to
US$20.9 million, with further optimisation opportunities identified
o Fast-tracks production and enables Project to become self-funding quickly
o Targeting Final Investment Decision ("FID") before the end of this
calendar year in order to commence construction, with an expected 9-12-month
construction period until first production
· Advanced work with Mineral Technologies and Access Group on plant
engineering/design
· Sheffield Resources Limited (ASX: SFX) ("Sheffield") Executive
Chair, Bruce Grifin, joined the Board as a Non-Executive Director following
Sheffield's strategic investment in the Company
· Stuart Forrester, an experienced engineering professional with an
extensive background in mining, processing and project management including
throughout the lifecycle of heavy mineral sands projects, joined as Chief
Operating Officer (non-Board position)
· Commenced drilling in the Initial Mining Area with a goal to
significantly increase the existing 17.2Mt high grade Mineral Resource and
support mine planning
· Deepened CSR programme led by dedicated personnel aimed at
increasing local understanding of the Project and undertaking support
initiatives
Post Year End:
· Completed Phase 1 drilling and received first and second batches
of results demonstrating exceptional Heavy Mineral grades, positioning the
Project for a material Mineral Resource upgrade
· Raised over US$3.6 million including US$2 million from a
significant Sri Lankan partner, Ambeon Capital PLC ("Ambeon"), and follow-on
investment from Sheffield
o Ambeon has an option to invest up to a further US$2 million, of which, to
date, US$825k has been subscribed for (included in US$3.6 million figure
above) and the Board believes agreements for the remaining balance will be
reached imminently
o Funding events see the Company comfortably funded through to FID and
beyond
· Signed a non-binding MoU with Ambeon for an agreed path to fund
the project at FID - including the provision of US$20m in equity/debt at
Project level
· Prominent Sri Lankan directors joined the Board
o Cricket legend and business magnate, Aravinda De Silva, and leading
Investment Specialist and Ambeon Director, Savanth Sebastian
Greg Martyr, Executive Chairman of Capital Metals, commented:
"With an in-situ grade that is already one of the highest globally, massive
upside potential with the ongoing drilling programme, and the outline of a
pathway to fund the Project to profitability, we are feeling positive about
the outlook for Sri Lanka's most advanced mineral sands project. The Project's
exceptional grades, low environmental impact, and scalable development profile
provide it with compelling advantages. We believe that these strengths,
coupled with a collaborative approach to local engagement, will enable us to
generate sustainable value for shareholders, partners, and the communities in
which we operate."
For further information, please visit www.capitalmetals.com
(http://www.capitalmetals.com) or contact:
Capital Metals plc Via Vigo Consulting
Greg Martyr (Executive Chairman)
Vigo Consulting (Investor Relations) +44 (0)20 7390 0234
Ben Simons / Peter Jacob capitalmetals@vigoconsulting.com
Strand Hanson Limited (Nominated Adviser) +44 (0) 20 7409 3494
Ritchie Balmer / Christopher Raggett / David Asquith
Hannam & Partners (Broker & Financial Adviser) +44 (0)20 7907 8500
Andrew Chubb / Leif Powis
About Capital Metals
Capital Metals is a UK company listed on the London Stock Exchange (AIM:
CMET). We are developing the Taprobane Minerals Project in Sri Lanka,
approximately 220km east of Colombo, containing industrial minerals including
ilmenite, rutile, zircon, and garnet. The Project is one of the highest-grade
mineral sands projects globally, with potential for further grade and resource
expansion. In 2022, a third-party Preliminary Economic Assessment provided a
Project NPV of US$155-235m based on existing resources, with further
identified optimisation potential. We are committed to applying modern mining
practices and bringing significant positive benefits to Sri Lanka and the
local community. We expect over 300 direct new jobs to be created and over
US$150m in direct government royalties and taxes to be paid.
Visit our website:
www.capitalmetals.com (http://www.capitalmetals.com)
Follow us on social media:
X: @MetalsCapital (https://twitter.com/MetalsCapital)
LinkedIn: @Capital Metals plc (https://uk.linkedin.com/company/capitalmetals)
CHAIRMAN'S REPORT
Welcome to the Annual Report for Capital Metals plc ("the Company" and
together with its subsidiaries, "the Group") for the financial year ended 31
March 2025 ("the Year").
We made significant progress during the Year in advancing the Taprobane
Minerals Project ("the Project") towards a Final Investment Decision ("FID").
We materially reduced Stage 1 Project capex, worked with key suppliers to
advance engineering and plant design, strengthened our leadership and
in-country team, and commenced a drilling programme which is now positioning
the Company to materially enlarge its Mineral Resource.
Working with our colleagues in Sri Lanka, we have continued to build strong
local and national relationships that will enable us to deliver sustainable
value to all stakeholders from the development of one of the world's highest
grade mineral sands deposits.
Shortly after Year-end, the Company cemented an investment by Ambeon Capital
PLC ("Ambeon"), part of one of Sri Lanka's most successful organisations, that
funds the Company through to FID. At the same time, Capital Metals and Ambeon
signed an MoU for an agreed path to fund the Project at FID through to cash
flow positive, and discussions continue in this regard on finalising the
various funding avenues.
Project Advancement
During the Year, the Company began establishing a development plan which
significantly reduced the previous ~US$34 million funding requirement to get
the Project to positive cash flow based on the May 2022 Preliminary Economic
Assessment ("PEA"). Our new plan gets the Project into cash flow as fast as
practicable. Leveraging updated knowledge and implementing numerous process
improvements since the PEA, the outcome of this work was a reduction of Stage
1 capex to US$20.9 million, with further optimisation opportunities identified
for potential cost reductions.
The process rationalisation studies included: eliminating the need to wash the
concentrate (following numerous discussions with potential offtakers) and
reducing associated infrastructure at the port; transitioning to truck and
shovel mining to avoid costly in-pit mining units; and utilising an
off-the-shelf predesigned wet concentrator plant from Mineral Technologies.
As a result, the initial production rate of Heavy Mineral Concentrate in Stage
1, based on the same projected throughput rate in the PEA of 550,000 tonnes
per annum ("tpa"), is forecast to be 125,000 tpa, with upside based on
expected higher grades in the chosen Initial Mining Area.
This strategy also supports incremental expansions of production capacity and
product quality through various plant value additions over time. Subsequent
phases incorporate incremental mining rates of up to 1.65 million tpa, and
potentially beyond, subject to expected increases in the Mineral Resource; a
magnetic separation plant to produce final ilmenite and garnet products and
zircon and rutile in concentrate; and a non-magnetic separation plant in the
final stage to produce final zircon and rutile products in addition to the
ilmenite and garnet.
Drilling Programme
Capital Metals secured all the necessary consents to initiate a drilling
programme during the Year. We were pleased to formalise the Geological Survey
and Mines Bureau's own participation in this programme through the provision
of technical services. Their involvement reinforces our shared commitment to a
transparent, best-practice approach to mineral development in Sri Lanka.
The programme, which began towards the end of the Year, focused first on the
Initial Mining Area ("IMA") of the existing 17.2Mt high grade Mineral
Resource. The purpose of the drilling is to increase the Mineral Resource, as
well as to help with mine planning for the IMA. Previous hand auger drilling
used to define the Mineral Resource only went to an average depth of 1.6
metres, whereas the aircore rig involved in this programme is drilling to
depths of up to 15 metres before intersecting basement lithologies.
In addition to targeting extensions to the Mineral Resource, the drill
programme will assist the Company in outlining the perimeters of the IMA,
determining optimal locations for mining cells and the location of the Wet
Concentrator Plant site. Planned infill drilling will provide greater
definition of host material characteristics and mineral grade and assemblage
which will increase the certainty of the mine plan and product schedule
through different geological domains.
By June 2025, after the Year-end, we had completed Phase 1 of the drilling
programme and were already seeing indications of exceptional high-grade
resource extensions laterally and at depth. This was later confirmed with the
first and second batches of laboratory assays described below.
Leadership
In April 2024, we announced the appointment of Bruce Griffin as a
Non-Executive Director. Bruce is Executive Chair of Sheffield Resources
Limited (ASX: SFX) ("Sheffield"), approximately a 10% shareholder in Capital
Metals since March 2024. He is well respected throughout the global mineral
sands industry and recently played a key role in bringing Thunderbird in
Western Australia, one of the largest and highest-grade mineral sands
discoveries in the last 30 years, into production. This, coupled with his
decades of experience within mineral sands and the wider resources industries,
is already proving valuable to Capital Metals as we advance towards FID.
In July 2024, Stuart Forrester, an experienced engineering professional with
an extensive background in mining, processing and project management, was
appointed as Chief Operating Officer (non-Board position). Stuart's experience
at every stage of the life cycle of mineral sands mines with the likes of
Illuka Resources and Chemours is proving hugely valuable. Stuart is well
connected with the relevant service and equipment providers that we will be
working with to develop our staged approach to the Project. He is a passionate
team builder, and this is reflected in the tremendous culture Stuart is
fostering within our team in Sri Lanka. He has spent considerable time with us
in Sri Lanka already, building out the local team and supporting community
engagement.
Corporate Social Responsibility
Our Corporate Social Responsibility (CSR) initiatives reflect our commitment
to empowering local communities and fostering sustainable development. Under
Stuart's leadership, we expanded CSR initiatives during the Year. This
included an internship programme, providing local university students with
hands-on experience in the mining sector, offering mentorship and exposure to
the professional world. Several students gained valuable insights during their
time with us, reinforcing our dedication to supporting the next generation of
Sri Lankan mining engineers. We were also honoured to be the main sponsor of a
local Interschool Sports Meet - the first in over 20 years - where we helped
revive a cherished community tradition. We also proudly opened a fisherman's
hut at the Thandiyadu Lagoon, serving as a vital resting space for over 300
fishing and farming families in the surrounding villages.
Our environmental and community-based efforts go hand in hand with our core
operations. We launched a plant nursery project aimed at rejuvenating coastal
ecosystems, stabilising sand dunes, and promoting biodiversity. Multiple
nurseries are planned near our Project sites to ensure long-term ecological
benefits. These initiatives demonstrate our ongoing commitment to creating
meaningful, lasting impacts.
Appointments of Advisers
In March 2025, we were pleased to announce the appointment of Hannam &
Partners as Broker and Financial Adviser. Hannam & Partners is an
independent specialist natural resource sector investment bank which has
completed over £45 billion worth of transactions since 2013 including within
the heavy mineral sands sector where it has a deep network of industry
connections. Hannam & Partners' primary mandate is to assist with the
overall financing package for the Project. Hannam & Partners is
additionally providing broking services and has initiated equity research
coverage of the Company, which investors can access via our website.
We have also appointed Strand Hanson as Nominated Adviser. Both Strand Hanson
and Hannam & Partners have recently visited the Project in Sri Lanka and
have been impressed with our growing in-country team and presence in country.
We believe they are well placed to support Capital Metals as we look towards
FID and beyond.
Post Year End
Strategic & Other Investments
Post Year End, in May 2025, we announced a landmark strategic investment of
US$2 million into the Company by way of a share subscription by Ambeon,
together with an option to invest up to a further US$2 million (the "Ambeon
Option").
Ambeon is a Colombo Stock Exchange listed diversified conglomerate and part of
one of Sri Lanka's most successful organisations. Ambeon had been looking to
enter Sri Lanka's mineral sands sector via Capital Metals' Project and now
owns 13.9% of Capital Metals.
Ambeon and Capital Metals have also signed a non-binding Memorandum of
Understanding for an agreed path to fund the Project at FID to commence
construction, through arranging the provision of US$20m in equity/debt at
Project level. The funding is anticipated to be sufficient to complete Stage 1
development at which point the Project is expected to become self-funding. We
look forward to concluding a definitive agreement and to working with Ambeon
and its associates to deliver this exceptionally high-grade Project.
Alongside the Ambeon investment, we were delighted that our major shareholder,
Sheffield, exercised its right to maintain its 10% shareholding in the Company
with a further investment of $267,000. Other existing shareholders invested a
further £400,000 via an oversubscribed retail offer. In total, Capital Metals
raised over US$2.8 million in June 2025 with a further US$825,000 in August
2025 pursuant to the Ambeon Option. Based on ongoing discussions, the Board
believes that agreements for the remaining balance to be subscribed for under
the Ambeon Option are going to be reached imminently. These funding events are
expected to see the Company comfortably funded through to FID and beyond.
Drilling results
In July 2025, we received the first and second batches of drill assay results
from the Phase 1 drilling programme. The results were returned from the
Company's laboratory partner, Scientific Services Geological Laboratories,
based in Cape Town, South Africa.
The results show consistent exceptional Heavy Mineral grades with very low
slimes content from routine and QA samples assayed by Heavy Liquid Separation.
High grade mineralisation has been confirmed down to 15 metres, which is
significant considering the current Mineral Resource is only to an average
depth of 1.6m and the current cut-off grade is 5% (which we expect to
optimise). The results to date, together with what we expect from the
remainder of the drilling programme, should unearth a game-changing Mineral
Resource upgrade for the Company.
Board Appointments
It was my honour earlier this month to welcome two respected Sri Lankan
business leaders to the Board of Capital Metals as we work together to develop
the first major modern mineral sands operation in Sri Lanka and one of the
highest-grade mineral sands projects globally.
Aravinda De Silva is an ICC Cricket Hall of Fame inductee and national hero
who played a crucial part in Sri Lanka's 1996 World Cup-winning team. He is
making a significant positive impact in Sri Lanka as a businessman and
investor, and he is already playing a key role in the development of the
Taprobane Minerals Project.
Savanth Sebastian is a leading business figure in Sri Lanka with considerable
knowledge and expertise. He currently serves as a Director of Ambeon, helping
to shape its financial and investment strategies. He was a Director at Nations
Trust Bank PLC of Sri Lanka and serves on the board of Sri Lanka's largest IT
company.
Aravinda and Savanth played key roles in cementing Ambeon's strategic
investment in Capital Metals and outlining the path to fund the Project at FID
to commence construction. We are working hard with Aravinda and Savanth and
the Ambeon team on many fronts to develop a Project that will create
sustainable value for Sri Lanka in the form of jobs, skills, revenue,
education, and training.
Outlook
As we enter the second half of the calendar year, we do so with conviction in
Capital Metals' ability to deliver on near-term objectives, namely, expanding
our existing resource base and advancing towards FID. At the same time, we are
actively further refining our Stage 1 capex, identifying meaningful
efficiencies.
The next five months are set to be busy encompassing drilling and resource
analysis while aiming to conclude a Project funding agreement, enabling us to
reach FID to take the Project into construction.
With an in-situ grade that is already one of the highest globally, massive
upside potential with the ongoing drilling programme, and the outline of a
pathway to fund the Project to profitability, we are feeling positive about
the outlook for Sri Lanka's most advanced mineral sands project. The Project's
exceptional grades, low environmental impact, and scalable development profile
provide it with compelling advantages. We believe that these strengths,
coupled with a collaborative approach to local engagement, will enable us to
generate sustainable value for shareholders, partners, and the communities in
which we operate.
On behalf of the Board, I would like to thank our employees, partners, local
stakeholders, the GSMB, and our shareholders for their continued support in
bringing this opportunity to fruition.
Gregory Martyr
Executive Chairman
17 August 2025
CONSOLIDATED & COMPANY STATEMENTS OF FINANCIAL POSITION
For the year ended 31 March 2025
Company number: 05555087
Group Company
Note For the year ended 31 March 2025 For the year ended 31 March For the year ended 31 March 2025 For the year ended 31 March 2024
2024
$
$ $
$
Non-Current Assets
Property, plant and equipment 6 23,026 21,589 - -
Investment in subsidiaries 8 - - 34,502,223 33,658,512
Loans to subsidiaries 9 - - 3,936,340 2,796,677
Other loans 10 144,860 142,145 - -
Exploration & evaluation assets 7 6,055,291 5,332,471 - -
6,223,177 5,496,205 38,438,563 36,455,189
Current Assets
Trade and other receivables 11 80,731 44,637 713,389 459,181
Cash and cash equivalents 12 1,351,494 3,087,329 1,047,477 3,045,465
1,432,225 3,131,966 1,760,866 3,504,646
Total Assets 7,655,402 8,628,171 40,199,429 39,959,836
Non-Current Liabilities
Trade and other payables 13 600,000 600,000 - -
600,000 600,000 - -
Current Liabilities
Trade and other payables 13 883,958 847,637 173,206 126,423
883,958 847,637 173,206 126,423
Total Liabilities 1,483,958 1,447,637 173,206 126,423
Net Assets 6,171,444 7,180,534 40,026,223 39,833,412
Equity attributable to owners of the Parent
Share capital 15 6,455,344 6,455,344 6,455,344 6,455,344
Share premium 15 54,936,218 54,923,341 54,936,218 54,923,341
Other reserves 17 (38,907,313) (39,071,519) 33,286,975 32,320,298
Retained losses (16,192,907) (15,052,742) (54,652,314) (53,865,571)
Non-controlling interest (119,898) (73,890) - -
Total Equity 6,171,444 7,180,534 40,026,223 39,833,412
The Company has elected to take the exemption under Section 408 of the
Companies Act 2006 from presenting the Parent Company Income Statement and
Statement of Comprehensive Income. The loss for the Company for the year ended
31 March 2025 was $786,743 (year ended 31 March 2024: $594,166).
The Financial Statements were approved and authorised for issue by the Board
of Directors on 17 August 2025 and were signed on its behalf by:
Greg Martyr
Executive Chairman
CONSOLIDATED INCOME STATEMENT
For the year ended 31 March 2025
Continued operations Note For the year ended 31 March 2025 For the year ended 31 March 2024
$ $
Administrative expenses 23 (1,166,430) (899,473)
Share based payment charge 16 (4,611) (31,442)
Other losses (49) (2,142)
Operating loss (1,171,090) (933,057)
Finance income 30,158 1,480
Loss before income tax (1,140,932) (931,577)
Income tax 21 - -
Loss for the year attributable to owners of the Parent (1,140,932) (931,577)
Basic (Loss) Per Share attributable to owners of the Parent during the period 22 (0.16) (0.15)
(expressed in cent per share)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 March 2025
For the year ended 31 March 2025
$ For the year ended 31 March 2024
$
Loss for the year (1,140,932) (931,577)
Other Comprehensive Income:
Items that may be subsequently reclassified to profit or loss
Foreign exchange on translation 126,400 443,897
Retirement benefit obligation 767 (383)
Total other comprehensive income for the year, net of tax 127,167 443,514
Total comprehensive loss attributable to:
Owners of the Company (1,013,765) (488,063)
Non-controlling interests - -
Total comprehensive loss (1,013,765) (488,063)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 March 2025
Note Share capital Share premium Other reserves Retained losses Total Total
$ $ $ $ $ Non-controlling interest $
$
Balance as at 1 April 2023 6,062,403 48,946,676 (35,917,609) (15,570,928) 3,520,542 (103,430) 3,417,112
Loss for the year - - - (931,577) (931,577) - (931,577)
Other comprehensive income for the year
Items that may be subsequently reclassified to profit or loss
Currency translation difference - - 443,897 - 443,897 - 443,897
Retirement benefit obligation - - - (383) (383) - (383)
Total comprehensive income for the year - - 443,897 (931,960) (488,063) - (488,063)
Share issue 392,941 3,951,575 - - 4,344,516 - 4,344,516
Cost of share issue - (124,600) - - (124,600) - (124,600)
Issue of options/warrants - - 31,442 - 31,442 - 31,442
Foreign exchange on options/warrants - - 126 - 126 - 126
Cancelled options - - (1,103,946) 1,103,946 - - -
Expired warrants - 2,149,690 (2,495,891) 346,201 - - -
Foreign exchange movements on NCI - - (29,538) - (29,538) 29,538 -
Total transactions with owners, recognised directly in equity 392,941 5,976,665 (3,597,807) 1,450,147 4,221,946 29,538 4,251,485
Balance as at 31 March 2024 6,455,344 54,923,341 (39,071,519) (15,052,742) 7,254,424 (73,890) 7,180,534
Balance as at 1 April 2024 6,455,344 54,923,341 (39,071,519) (15,052,742) 7,254,424 (73,890) 7,180,534
Loss for the year - - - (1,140,932) (1,140,932) - (1,140,932)
Other comprehensive income for the year
Items that may be subsequently reclassified to profit or loss
Currency translation difference - - 126,400 - 126,400 - 126,400
Retirement benefit obligation - - - 767 767 - 767
Total comprehensive income for the year - - 126,400 (1,140,165) (1,013,765) - (1,013,765)
Issue of options - - 4,611 - 4,611 - 4,611
Foreign exchange on options - - 64 - 64 - 64
Expired warrants - 12,877 (12,877) - - - -
Foreign exchange movements on NCI - - 46,008 - 46,008 (46,008) -
Total transactions with owners, recognised directly in equity - 12,877 37,806 - 50,683 (46,008) 4,675
Balance as at 31 March 2025 6,455,344 54,936,218 (38,907,313) (16,192,907) 6,291,342 (119,898) 6,171,444
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 31 March 2025
Note Share capital Share premium Other reserves Retained Losses Total
$ $ $ $ $
Balance as at 1 April 2023 6,062,403 48,946,676 35,155,483 (54,721,552) 35,443,010
Loss for the year - - - (594,166) (594,166)
Other comprehensive income for the year
Items that may be subsequently reclassified to profit or loss
Currency translation difference - - 733,084 - 733,084
Total comprehensive income for the year - - 733,084 (594,166) 138,918
Share issue 392,941 3,951,575 - - 4,344,516
Cost of share issue - (124,600) - - (124,600)
Issue of options/warrants - - 31,442 - 31,442
Foreign exchange on options/warrants - - 126 - 126
Cancelled options - - (1,103,946) 1,103,946 -
Expired warrants - 2,149,690 (2,495,891) 346,201 -
Total transactions with owners, recognised directly in equity 392,941 5,976,665 (3,568,269) 1,450,147 4,251,484
Balance as at 31 March 2024 6,455,344 54,923,341 32,320,298 (53,865,571) 39,833,412
Balance as at 1 April 2024 6,455,344 54,923,341 32,320,298 (53,865,571) 39,833,412
Loss for the year - - - (786,743) (786,743)
Other comprehensive income for the year
Items that may be subsequently reclassified to profit or loss
Currency translation difference - - 974,879 - 974,879
Total comprehensive income for the year - - 974,879 (786,743) 188,136
Issue of options - - 4,611 - 4,611
Foreign exchange on options - - 64 - 64
Expired warrants - 12,877 (12,877) - -
Total transactions with owners, recognised directly in equity - 12,877 (8,202) - 4,675
Balance as at 31 March 2025 6,455,344 54,936,218 33,286,975 (54,652,314) 40,026,223
STATEMENTS OF CASH FLOWS
For the year ended 31 March 2025
Group Company
Note Year ended Year ended Year ended Year ended
31 March 2025 31 March 2024 31 March 2025 31 March 2024
$ $ $ $
Cash flows from operating activities
Loss before income tax (1,140,932) (931,577) (786,743) (594,166)
Adjustments for:
Depreciation 6 6,546 4,021 - -
Share based payments 15/16 4,611 70,970 4,611 70,970
Foreign exchange (27,562) (16,153) (7,398) (26,389)
Interest received (30,158) (1,355) 28,436 -
Changes in working capital:
(Increase) in trade and other receivables (35,400) (9,106) (254,208) (219,793)
Increase/(decrease) in trade and other payables 36,323 5,749 46,783 (103,142)
Net cash used in operating activities (1,186,572) (877,451) (968,519) (872,520)
Cash flows from investing activities
Purchase of property plant and equipment 6 (9,119) (1,833) - -
Disposal of property, plant and equipment 6 1,477 441 - -
Cash expenditure on exploration and evaluation activity 7 (649,168) (436,175) - -
Loan to subsidiaries 9 - - (1,077,373) (440,658)
Interest received 30,158 1,355 (28,436) -
Net cash used in investing activities (626,652) (436,212) (1,105,809) (440,658)
Cash flows from financing activities
Proceeds from issue of share capital - 4,304,987 - 4,304,987
Transaction costs of share issue - (124,600) - (124,600)
Net cash generated from financing activities - 4,180,387 - 4,180,387
Net (Decrease)/increase in cash and cash equivalents (1,813,224) 2,866,724 (2,074,328) 2,867,209
Cash and cash equivalents at beginning of year 3,087,329 216,213 3,045,465 174,707
Exchange loss on cash and cash equivalents 77,389 4,392 76,340 3,549
Cash and cash equivalents at end of year 12 1,351,494 3,087,329 1,047,477 3,045,465
Non-cash investing and financing activities
Shares issued in respect of services - share based payment(1) 15 - 39,528 - 39,528
Share options and warrants issued(2,3) 16 4,611 31,422 4,611 31,442
( )
(1) Comprised of 737,082 shares at 4.25p to satisfy commissions payable.
(2) Share options and warrants over a total of 11,800,000 ordinary shares were
granted to Directors, management and employees in the period.
3 Share options over a total of 6,000,000 ordinary shares were
granted to management in the period.
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2025
1. General information
The principal activity of Capital Metals plc (the 'Company') and its
subsidiaries (together the 'Group') is the exploration and development of the
Taprobane Minerals Project located in the Ampara District of the Eastern
Province of Sri Lanka. The Company's shares are quoted on AIM of the London
Stock Exchange. The Company is incorporated and domiciled in England.
The address of its registered office is 6 Heddon Street, London, W1B 4BT.
2. Summary of significant Accounting Policies
The principal Accounting Policies applied in the preparation of these
Consolidated Financial Statements are set out below. These Policies have been
consistently applied to all the periods presented, unless otherwise stated.
2.1. Basis of preparation of Financial Statements
These financial statements have been prepared in accordance with UK adopted
International Accounting Standards and in accordance with the requirements of
the Companies Act 2006. The Financial Statements have also been prepared under
the historical cost convention, except as modified for assets and liabilities
recognised at fair value on business combination.
The Financial Statements are presented in US Dollars. The functional currency
of the Company is Pound Sterling.
The preparation of financial statements in accordance with the applicable
financial reporting framework requires the use of certain critical accounting
estimates. It also requires management to exercise its judgement in the
process of applying the Accounting Policies. The areas involving a higher
degree of judgement or complexity, or areas where assumptions and estimates
are significant to the Consolidated Financial Statements are disclosed in Note
4.
2.2. New and amended standards
(a) New and amended standards adopted by the Group and Company
A number of new and amended standards and interpretations issued by the
International Accounting Standards Board (IASB) have become effective for the
first time for financial periods beginning on (or after) 1 April 2024 and have
been applied by the Company and Group in these financial statements. None of
these new and amended standards and interpretations had a significant effect
on the Company or Group because they are either not relevant to the Company or
Group's activities or require accounting which is consistent with the Company
or Group's current accounting policies.
(b) New standards, amendments, and interpretations in issue but not yet
effective or not yet endorsed and not early adopted.
No material impact expected on the financial statements.
There are a number of standards, amendments to standards, and interpretations
which have been issued by the IASB that are effective in future accounting
periods and which have not been adopted early.
2.3. Basis of Consolidation
These consolidated financial statements comprise the financial statements of
Capital Metals plc and its subsidiaries as at 31 March 2025. Subsidiaries
are fully consolidated from the date on which control is transferred to the
Group and cease to be consolidated from the date on which control is
transferred out of the Group. Control exists where the company has the power
to govern the financial and operating policies of an entity so as to obtain
benefits from its activities. Where subsidiaries follow differing accounting
policies from those of the Group, those accounting policies have been adjusted
to align with those of the Group. Inter-company balances and transactions
between Group companies are eliminated on consolidation, though foreign
exchange differences arising on inter-company balances between subsidiaries
with differing functional currencies is recognised in profit or loss.
When the Group ceases to have control, any retained interest in the entity is
remeasured to its fair value at the date when control is lost, with the change
in carrying amount recognised in profit or loss. The fair value is the initial
carrying amount for the purposes of subsequently accounting for the retained
interest as an associate, joint venture or financial asset. In addition, any
previously recognised in other comprehensive income in respect of that entity
are accounted for as if the Group had directly disposed of the related assets
or liabilities. This may mean that amounts previously recognised in other
comprehensive income are reclassified to profit or loss.
During 2023, the Group completed a restructure which resulted in the disposal
of a subsidiary and disposal of an equity proportion of a subsidiary whilst
control was maintained. Refer to Note 18 for further details. Transactions
with non-controlling interests that do not result in loss of control are
accounted for as equity transactions - that is, as transactions with the
owners in their capacity as owners. The difference between fair value of any
consideration paid and the relevant share acquired of the carrying value of
net assets of the subsidiary is recorded in equity. Gains or losses on
disposals to non-controlling interests are also recorded in equity.
2.4. Going concern
These financial statements have been prepared on the going concern basis. The
Group's business activities, together with the factors likely to affect its
future development, performance and position are set out in the Chairman's
Statement and the Strategic Report.
As at 31 March 2025, the Group had cash and cash equivalents of $1.35m (2024:
$3.0m). Post year end, the Company has so far raised circa $2.8m through the
investment by Ambeon Capital, a further investment by Sheffield Resources and
a successful Retail Offer. A further $0.825m was raised in August through the
further allotment of shares. The Directors have prepared cash flow forecasts
to 31 March 2027, which take account of the cost and operational structure of
the Group and Company, planned exploration and evaluation expenditure, licence
commitments and working capital requirements. These forecasts, supported by
cash available to the Company, indicate that the Group and Company, will have
sufficient funds in order to meet their operational objectives, and meet their
expected liabilities as they fall due, for at least the next 12 months. Thus,
the Directors continue to adopt the going concern basis of accounting
preparing these financial statements.
2.5. Segment reporting
An operating segment is a group of assets and operations engaged in providing
products or services that are subject to risks and returns that are different
from those of other business segments.
The Directors are of the opinion that the Group operates in two geographical
areas, the UK and Sri Lanka. The Company operates in one geographical area,
the UK. Activities in the UK are mainly administrative in nature whilst
activities in Sri Lanka relate to exploration and evaluation of mineral sand
resources. The reports used by the chief operating decision maker are based on
these geographical segments.
2.6. Foreign currencies
(a) 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 functional currency of the UK
parent entity is Pound Sterling, the functional currency of the BVI
subsidiaries is US Dollars and the functional currency of the Sri Lankan
subsidiaries is Sri Lankan Rupee. The Financial Statements are presented in US
Dollars which is the Group's presentation currency.
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency
using the exchange rates prevailing at the dates of the transactions or
valuation where such items are re-measured. Foreign exchange gains and losses
resulting from the settlement of such transactions and from the translation at
period-end exchange rates of monetary assets and liabilities denominated in
foreign currencies are recognised in the income statement.
(c) Group companies
The results and financial position of all the Group entities (none of which
has the currency of a hyperinflationary economy) that have a functional
currency different from the presentation currency are translated into the
presentation currency as follows:
· assets and liabilities for each period end date presented are
translated at the period-end closing rate;
· income and expenses for each Income Statement are translated at
average exchange rates (unless this average is not a reasonable approximation
of the cumulative effect of the rates prevailing on the transaction dates, in
which case income and expenses are translated at the dates of the
transactions); and
· all resulting exchange differences are recognised in other
comprehensive income.
On consolidation, exchange differences arising from the translation of the net
investment in foreign entities, and of monetary items receivable from foreign
subsidiaries for which settlement is neither planned nor likely to occur in
the foreseeable future, are taken to other comprehensive income. When a
foreign operation is sold, such exchange differences are recognised in the
Income Statement as part of the gain or loss on sale.
2.7. Intangible assets
Exploration and evaluation assets
Exploration and evaluation assets include the cost of acquisition,
exploration, determination of resources and recoverable reserves, technical
studies, economic feasibility studies and all technical and administrative
overheads directly associated with these assets, where a mineral deposit has
development potential.
Exploration and evaluation assets which are acquired are recognised at fair
value. Capitalised exploration and evaluation expenditure is recorded and held
at cost.
The Group performs an impairment test on the exploration and evaluation assets
when specific facts and circumstances indicate an impairment test is required,
including:
i) the Group's right to explore in an area has expired, or
will expire in the near future without renewal;
ii) no further exploration or evaluation is planned or
budgeted for;
iii) a decision has been taken by the Board to discontinue
exploration and evaluation in an area due to the absence of a commercial level
of reserves; and
iv) sufficient data exists to indicate that the book value will
not be fully recovered from future development and production.
If any such facts or circumstances are noted, the Group, as a next step,
perform an impairment test in accordance with the provisions of IAS 36
"Impairment of Assets". In such circumstances, the aggregate carrying value of
the exploration and assets is compared against the expected recoverable amount
of the cash-generating unit. The recoverable amount is the higher of value in
use and the fair value less costs to sell. Management considers all licences
relating to the Project to represent one asset when undertaking their
impairment assessment.
2.8. Investments in subsidiaries
Investments in Group undertakings are stated at cost, which is the fair value
of the consideration paid, less any impairment provision.
2.9. Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation
and any accumulated impairment losses. Depreciation is provided on all
property, plant and equipment to write off the cost less estimated residual
value of each asset over its expected useful economic life on a straight-line
basis at the following annual rates:
Computer & office equipment - 3 years
Motor vehicles - 4 years
Field equipment - 5 years
Drilling equipment - 10 years
Furniture & fittings - 5 years
Subsequent costs are included in the asset's carrying amount or recognised as
a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the Group and the cost
of the item can be measured reliably. The carrying amount of the replaced part
is derecognised. All other repairs and maintenance are charged to the income
statement during the financial period in which they are incurred.
The assets' residual values and useful lives are reviewed, and adjusted if
appropriate, at the end of each reporting period.
An asset's carrying amount is written down immediately to its recoverable
amount if the asset's carrying amount is greater than its estimated
recoverable amount. If an impairment review is conducted following an
indicator of impairment, assets which are not able to be assessed for
impairment individually are assessed in combination with other assets within a
cash generating unit.
Gains and losses on disposal are determined by comparing the proceeds with the
carrying amount and are recognised within 'Other (losses)/gains' in the Income
Statement.
2.10. Impairment of non-financial assets
Assets that have an indefinite useful life, for example, intangible assets not
ready to use, and goodwill, are not subject to amortisation and are tested
annually for impairment. Property, plant and equipment is reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognised for
the amount by which the asset's carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of an asset's fair value less
costs to sell and value in use. For the purposes of assessing impairment,
assets are grouped at the lowest levels for which there are separately
identifiable cash flows (cash generating units). Non-financial assets that
suffered impairment are reviewed for possible reversal of the impairment at
each reporting date.
2.11. Financial assets
(a) Recognition and measurement
Management determines the classification of its financial assets at initial
recognition, the classification of which depends on the purpose for which the
financial assets were acquired.
Financial assets are classified in four categories:
i) amortised cost;
ii) fair value through other comprehensive income ("FVOCI")
with gains or losses recycled to profit or loss on derecognition;
iii) FVOCI with no recycling of gains or losses to profit or
loss on derecognition; and
iv) fair value through profit or loss ("FVTPL").
Financial assets are classified as at amortised cost only if both of the
following criteria are met:
· the asset is held within a business model whose
objective is to collect contractual cash flows; and
· the contractual terms give rise to cash flows that are
solely payments of principal and interest
The Group's financial assets comprise cash and receivables which are
classified as financial assets at amortised cost. The Company's financial
assets comprise cash and loans to subsidiaries and connected parties, which
are classified as financial assets at amortised cost.
The Company accounts for loan receivables at amortised cost as the objective
is to hold these assets in order to collect contractual cash flows and the
contractual cash flows are solely payments of principal and interest. After
classification as amortised cost, the financial assets are initially measured
at fair value plus directly attributable transaction costs, and subsequently
measured at amortised cost using the effective interest method, less provision
for impairment.
Financial assets are derecognized when the rights to receive cash flows from
the assets have expired or have been transferred, and the Group has
transferred substantially all of the risks and rewards of ownership.
(b) Impairment
Impairment provisions for loans to subsidiaries are recognised based on a
forward-looking expected credit loss model. The methodology used to determine
the amount of the provision is based on whether there has been a significant
increase in credit risk since initial recognition of the financial asset.
For those where the credit risk has not increased significantly since initial
recognition of the financial asset, twelve month expected credit losses along
with gross interest income are recognised. For those for which credit risk has
increased significantly, lifetime expected credit losses along with the gross
interest income are recognised. For those that are determined to be credit
impaired, lifetime expected credit losses along with interest income on a net
basis are recognised.
2.12. Financial liabilities
Financial liabilities are obligations to pay cash or other financial assets
and are recognised when the Group becomes a party to the contractual
provisions of the instrument.
All financial liabilities are initially recognised at fair value and
subsequently measured either as:
· amortised cost using the effective interest method, with
interest-related charges recognised as an expense in the income statement; or
· financial liabilities measured at FVTPL, re-measured at
subsequent reporting dates to fair value through the income statement.
During the reporting period, the Group's financial liabilities comprised trade
and other payables, deferred consideration payable, loans and convertible
bonds. The trade and other payables, and loans, are classified at amortised
cost.
The deferred consideration payable in respect of the acquisition of the
Project is treated as a financial liability measured at FVTPL.
The convertible bonds were assessed to contain an embedded derivative
conversion feature and the Group elected to treat the entire instrument as a
financial liability measured at FVTPL.
A financial liability is derecognised only when the obligation is
extinguished, that is, when the obligation is discharged or cancelled or
expires.
2.13. Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand.
2.14. Equity
Equity comprises the following:
· "Share capital" represents the nominal value of the Ordinary
shares;
· "Share Premium" represents consideration less nominal value of
issued shares and costs directly attributable to the issue of new shares;
· "Other reserves" represents the capital contribution reserve,
deferred share reserve, merger reserve, foreign currency translation reserve,
reverse acquisition reserve and share option and warrant reserve where;
o "Merger reserve" represents the difference between the fair value of an
acquisition and the nominal value of the shares allotted in a share exchange;
o "Foreign currency translation reserve" represents the translation
differences arising from translating the financial statement items from
functional currency to presentational currency;
o "Reverse acquisition reserve" represents a non-distributable reserve
arising on the acquisition of Capital Metals Limited;
o "Share option and warrant reserve" represents share options and warrants
awarded by the Group;
o Capital contribution reserve - represents capital contributed by one or
more of the members without taking shares in return or creating a debt.
o Deferred share reserve - represents shares to be issued upon certain
conditions being met.
o "Retained earnings" represents retained losses.
2.15. Share capital, share premium and deferred shares
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 the proceeds provided there is sufficient premium
available. Should sufficient premium not be available placing costs are
recognised in the Income Statement. All ordinary shares are fully paid and
carry full voting, dividend and capital distribution (including on winding up)
rights.
Deferred shares are classified as equity. Deferred shares represent shares to
be issued upon certain conditions being met. The holders of deferred shares do
not have any right to receive written notice of or attend, speak or vote at
any general meeting of the Company. As regards income, on any dividend or
other distribution of the Company, the holders of deferred shares shall be
entitled to payment in priority to any dividend or distribution to the holders
of any other class of shares in the Company, £1 in aggregate. Upon any
capital distribution of the Company (including upon winding up), the holders
of the deferred shares shall be entitled to payment in priority to any
distribution to the holders of any other class of shares in the Company, £1
in aggregate. The deferred shares may be cancelled by the Company at any
time at its determination for no payment and without obtaining sanction of
such holders.
2.16. Share based payments
The Group has granted options over its unissued share capital to certain
Directors, management, employees and consultants as part of their
remuneration. The fair value of options granted in respect of services
provided, is measured at the grant date and recognised as an expense over the
vesting period, with a corresponding increase in the Share warrants and
options reserve.
The fair value of the share options and warrants are determined using the
Black Scholes valuation model, taking into account the terms and conditions
upon which the warrants or options were issued or granted.
Non-market vesting conditions are included in assumptions about the number of
options that are expected to vest. The total expense or charge is recognised
over the vesting period, which is the period over which all of the specified
vesting conditions are to be satisfied. At the end of each reporting period,
the entity revises its estimates of the number of options that are expected to
vest based on the non-market vesting conditions. It recognises the impact of
the revision to original estimates, if any, in the Income Statement or equity
as appropriate, with a corresponding adjustment to a separate reserve in
equity.
When the options are exercised, the Group issues new shares. The proceeds
received, net of any directly attributable transaction costs, are credited to
share capital (nominal value) and share premium when the options are
exercised.
2.17. Taxation
No current tax is yet payable in view of the losses to date.
Deferred tax is recognised for using the liability method in respect of
temporary differences arising from differences between the carrying amount of
assets and liabilities in the consolidated financial statements and the
corresponding tax bases used in the computation of taxable profit. However,
deferred tax liabilities are not recognised if they arise from the initial
recognition of goodwill; deferred tax is not accounted for if it arises from
initial recognition of an asset or liability in a transaction other than a
business combination that at the time of the transaction affects neither
accounting nor taxable profit or loss.
In principle, deferred tax liabilities are recognised for all taxable
temporary differences and deferred tax assets (including those arising from
investments in subsidiaries), are recognised to the extent that it is probable
that taxable profits will be available against which deductible temporary
differences can be utilised.
Deferred income tax assets are recognised on deductible temporary differences
arising from investments in subsidiaries only to the extent that it is
probable the temporary difference will reverse in the future and there is
sufficient taxable profit available against which the temporary difference can
be used.
Deferred tax liabilities are recognised for taxable temporary differences
arising on investments in except where the Group is able to control the
reversal of the temporary difference and it is probable that the temporary
difference will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to offset current tax assets against current tax liabilities
and when the deferred tax assets and liabilities relate to income taxes levied
by the same taxation authority on either the same taxable entity or different
taxable entities where there is an intention to settle the balances on a net
basis.
Deferred tax is calculated at the tax rates (and laws) that have been enacted
or substantively enacted by the statement of financial position date and are
expected to apply to the period when the deferred tax asset is realised or the
deferred tax liability is settled.
Deferred tax assets and liabilities are not discounted.
3. Financial risk management
3.1. Financial risk factors
The Group's activities expose it to a variety of financial risks: market risk
(foreign currency risk), credit risk and liquidity risk. The Group's overall
risk management programme focuses on the unpredictability of financial markets
and seeks to minimise potential adverse effects on the Group's financial
performance. None of these risks are hedged.
Risk management is carried out by the management team under policies approved
by the Board of Directors.
Market risk
(a) Foreign currency risk
The Group operates internationally and is exposed to foreign exchange risk
arising from various currency exposures, primarily with respect to the Sri
Lankan Rupee (LKR), US Dollar (USD), Australian Dollar (AUD) and the British
Pound Sterling (GBP or £). Foreign exchange risk arises from future
commercial transactions, recognised assets and liabilities and net investments
in foreign operations.
The Group negotiates all material contracts for activities in relation to its
subsidiaries in either LKR, AUD or USD. The Group does not hedge against the
risks of fluctuations in exchange rates. The volume of transactions is not
deemed sufficient to enter into forward contracts as most of the foreign
exchange movements result from the retranslation of intercompany loans. The
Group has sensitised the figures for fluctuations in foreign exchange rates,
as the Directors acknowledge that, at the present time, the foreign exchange
retranslations have resulted in rather higher than normal fluctuations and is
predominantly due to the exceptional nature of the LKR exchange rate in the
current economic climate.
As at 31 March 2025, the exposure of the Group to foreign exchange rates is
summarised as follows:
Group Group Company Company
2025 2024 2025 2024
Cash and cash equivalents $ $ $ $
US Dollar 184,972 19,091 23,123 18,355
Sri Lankan Rupee 142,168 41,128 - -
Australian Dollar 30,201 662,072 30,201 662,072
Pound Sterling 994,153 2,365,038 994,153 2,365,038
1,351,494 3,087,329 1,047,477 3,045,465
Other receivables
US Dollar - - - -
Sri Lankan Rupee - - - -
Australian Dollar - - - -
Pound Sterling 36,023 24,198 26,223 22,767
36,023 24,198 26,223 22,767
1,387,517 3,111,527 1,073,700 3,068,232
As at 31 March 2025, if Pound Sterling had gained or lost 10 per cent. against
the USD, the impact on comprehensive loss would have been as follows:
Group Group Company Company
2025 2024 2025 2024
Impact on comprehensive loss $ $ $ $
+10% GBP/USD 103,018 238,924 102,038 238,780
-10% GBP/USD (103,018) (238,924) (102,038) (238,780)
As at 31 March 2025, if the Sri Lankan Rupee had gained or lost 10 per cent.
against the USD, the impact on comprehensive loss would have been as follows:
Group Group Company Company
2025 2024 2025 2024
Impact on comprehensive loss $ $ $ $
+10% LKR/USD 14,217 4,113 - -
-10% LKR/USD (14,217) (4,113) - -
As at 31 March 2025, if the Australian Dollar had gained or lost 10 per cent.
against the USD, the impact on comprehensive loss would have been as follows:
Group Group Company Company
2025 2024 2025 2024
Impact on comprehensive loss $ $ $ $
+10% AUD/USD 3,020 66,207 3,020 66,207
-10% AUD/USD (3,020) (66,207) (3,020) (66,207)
Credit risk
Credit risk is the risk of financial loss to the Group if a counterparty to a
financial instrument fails to meet its contractual obligations.
Credit risk relating to the Group's financial assets which comprise
principally cash and cash equivalents, arises from the potential default of
counterparties. The credit risk on liquid funds is limited because the
counterparties are reputable banks with high credit ratings assigned by
international credit-rating agencies.
The carrying amount of financial assets represents the maximum credit
exposure, which at the reporting date was:
Group Group Company Company
2025 2024 2025 2024
$ $ $ $
Cash and bank balances 1,351,494 3,087,329 1,047,477 3,045,465
Trade and other receivables 80,731 21,870 713,389 459,181
Loan to subsidiaries - - 3,936,340 2,796,677
1,432,225 3,109,199 5,697,206 6,301,323
The expected credit risk for both the Group and the Company was assessed as
not material.
Liquidity risk
In keeping with similar sized mineral exploration groups, the Group's
continued future operations depend on the ability to raise sufficient working
capital through the issue of equity share capital or debt. The Directors are
reasonably confident that adequate funding will be forthcoming with which to
finance operations. Controls over expenditure are carefully managed.
With exception to deferred taxation, financial liabilities are all due within
one year. The significant liabilities of the Group are not discounted and as
such, no undiscounted future cashflow analysis provided.
3.2. Capital risk management
The Directors consider the Group's capital to comprise of share capital and
reserves stated on the statement of financial position. The Group manages its
capital to ensure the Group will be able to continue on a going concern on a
long-term basis while ensuring the optimal return to shareholders and other
stakeholders through an effective debt and equity balance. No changes were
made in the objectives, policies and processes during the current or previous
year.
The share capital, including share premium, and reserves totalling $6,171,444
(2024: $7,180,534) provides the majority of the working capital required by
the Group. Management reviews the capital structure and makes adjustment to it
in the light of changes in economic conditions.
4. Critical accounting estimates and judgements
The preparation of the Financial Statements requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amount of expenses during the
period. Actual results may vary from the estimates used to produce these
Financial Statements.
Estimates and judgements are regularly evaluated and are based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances.
Items subject to such estimates and assumptions, that have a significant risk
of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial years, include but are not limited to:
Impairment of intangible assets - exploration and evaluation costs
Management makes the judgement as to which costs are directly associated with
the exploration and evaluation assets and are to be capitalised, including the
allocation of applicable salary and overhead costs.
Exploration and evaluation costs have a carrying value at 31 March 2025 of
$6,055,291 (31 March 2024 $5,332,471). Such assets have an indefinite useful
life as the Group has a right to renew exploration licences and the asset is
only amortised once extraction of the resource commences. Management tests for
impairment annually whether exploration projects have future economic value in
accordance with the accounting policy stated in Note 2.7. Each exploration
project is subject to an annual review by either a consultant or senior
company geologist to determine if the exploration results returned during the
period warrant further exploration expenditure and have the potential to
result in an economic discovery. This review takes into consideration long
term metal prices, anticipated resource volumes and supply and demand outlook.
In the event that a project does not represent an economic exploration target
and results indicate there is no additional upside a decision will be made to
discontinue exploration; an impairment charge will then be recognised in the
Income Statement.
Given that the Geological Survey and Mines Bureau accepted IML applications
over all of the grids in the EL168 area, granted IMLs in the EL168 area and
provided exclusivity over the former exploration license area by refraining
from accepting applications from other third parties, management are of the
judgement that there is a reasonable expectation, based on the ongoing
discussions with the Geological Survey and Mines Bureau, that the remaining
IMLs will be approved in due course. Given this judgement it was deemed that
no impairment test was required to be performed. Should the Group not be
successful with the remaining IML applications then the Directors would
consider an impairment of the E&E assets. See Note 7 for further
considerations at the year end.
DEL and EML have now initiated the process to apply for new additional
exploration licenses over six grids and is concluding the preliminary
requirements and approvals.
Carrying value of intercompany loans
At 31 March 2025 management reassessed the recovery profile of the Company
loans granted to subsidiaries and noted the updated project development
timetable would mean that it is unlikely that repayments from subsidiaries
would commence in the next 12 months and accordingly the loans continue to be
classified as non-current receivables in the current year. See Note 9 for
further information.
Share based payment transactions
Management measured the cost of equity-settled transactions by reference to
the fair value of the equity instruments at the date at which they are
granted. The fair value of shares was determined by the share price at the
date of grant. The fair value of options and warrants was determined using
the Black-Scholes model. Management estimated the number of options that are
expected to vest based on the non-market vesting conditions. The valuation of
these options and warrants involved making a number of critical estimates
relating to price volatility, future dividend yields, expected life of the
options and forfeiture rates. These assumptions are described in more detail
in Note 16.
Control and consolidation of Damsila Exports (Pvt) Limited
If an entity with a 40% shareholding has a contractual arrangement that gives
it the power to direct the relevant activities of the other entity, it can
maintain control and is required to consolidate the financial statements of
the other entity. After the restructure of the Group during the prior year,
the contractual arrangements in place to determine whether they have the power
to direct the relevant activities of another entity and, as a result, maintain
control were carefully assessed and it was concluded Redgate Lanka maintains
control of Damsila Exports and as such they shall remain consolidated within
the Group accounts. No non-controlling interest has been recognised against
the net assets as the Group continues to have full rights to the returns of
the subsidiary. Please refer to Note 18 for details of the Group restructure.
Fair value of deferred and contingent consideration
Deferred consideration represents amounts payable in respect of the
acquisitions of Damsila Exports (Pvt) Limited and Eastern Minerals (Pvt)
Limited. The amounts fall due and payable upon completion of certain
milestones within the Group, being for each of Damsila Exports (Pvt) Limited
and Eastern Minerals (Pvt) Limited: $625,000 in cash (recognised at 95% of
face value) upon completion of feasibility studies and all approvals on the
relevant project and $750,000 in cash (recognised at 80% of face value) upon
commencement of first commercial production from the relevant project. At the
reporting year end, the probability estimated for the likelihood of completion
of Tranche 2 and 3 of the deferred and contingent consideration was
considered, and management continue to estimate 95% probability for Tranche 2
and 80% probability for Tranche 3. If these estimates prove incorrect then the
amounts payable in respect of the acquisition may be different to those stated
within the financial statements.
5. Segment information
As at 31 March 2025, the Group operates in two geographical areas, the UK and
Sri Lanka. The Company operates in one geographical area, the UK. Activities
in the UK are mainly administrative in nature whilst activities in Sri Lanka
relate to exploration and evaluation of mineral sand resources. The reports
used by the chief operating decision maker are based on these geographical
segments.
The Group generated no revenue during the year ended 31 March 2025 (2024:
$Nil).
2025 Sri Lanka UK Total
$ $ $
Administrative expenses (293,744) (872,686) (1,166,430)
Share based payment charge - (4,611) (4,611)
Other gains/(losses) (49) - (49)
Finance income 1,535 28,623 30,158
Operating loss from continued operations per reportable segment (292,258) (848,674) (1,140,932)
Reportable segment assets 6,538,703 1,116,699 7,655,402
Reportable segment liabilities (1,310,750) (173,208) (1,483,958)
Reportable segment net assets/(liabilities) 5,227,953 943,491 6,171,444
2024 Sri Lanka UK Total
$ $ $
Administrative expenses (130,071) (769,402) (899,473)
Share based payment charge - (31,442) (31,442)
Other gains/(losses) (121) (2,021) (2,142)
Finance income 1,355 125 1,480
Operating loss from continued operations per reportable segment (128,837) (802,740) (931,577)
Reportable segment assets 5,540,595 3,087,576 8,628,171
Reportable segment liabilities (1,321,214) (126,423) (1,447,637)
Reportable segment net assets/(liabilities) 4,219,381 2,961,153 7,180,534
Segment assets and liabilities are allocated based on geographical location.
6. Property, plant and equipment
The movement on the property, plant and equipment asset accounts are shown in
aggregate as follows:
Group Total
$
Cost
As at 1 April 2023 79,306
Exchange Differences 7,323
Additions 1,833
Disposals (457)
As at 31 March 2024 88,005
As at 1 April 2024 88,005
Exchange Differences (4,963)
Additions 9,119
Disposals (1,477)
As at 31 March 2025 90,684
Depreciation
As at 1 April 2023 53,715
Charge for the year 4,021
Disposals (441)
Exchange differences 9,121
As at 31 March 2024 66,416
As at 1 April 2024 66,416
Charge for the year 7,998
Disposals (1,452)
Exchange differences (5,304)
As at 31 March 2025 67,658
Net book value as at 31 March 2024 21,589
Net book value as at 31 March 2025 23,026
7. Intangible assets
Intangible assets comprise exploration and evaluation costs. The movement on
the exploration and evaluation assets was as follows:
Group
Exploration & Evaluation Assets - Cost and Net Book Value
$
Cost
As at 31 March 2023 4,451,811
Additions 436,175
Exchange differences 444,485
As at 31 March 2024 5,332,471
Additions 649,168
Exchange differences 73,652
As at 31 March 2025 6,055,291
All exploration and evaluation assets relate to Group subsidiaries and the
Taprobane Minerals Project in Sri Lanka.
The Directors undertook a review of the impairment indicators, and none were
identified. In performing their review, the Directors noted the following:
· the Group has formally applied for the renewal of DEL licence
EL430.
· EML has been granted an extension on licence EL199 of up to two
years by the GSMB which enables the extension for one year from the date of
the first-year retention fee payment, being 10 July 2024, and a further year
thereafter on payment of the annual extension fee.
· the EIA process for EL199 is now underway and is expected to be
concluded before the end of 2025, at which time EML will make IML
applications.
· Commenced drilling in the Initial Mining Area with a goal to
significantly increase the existing 17.2Mt high grade Mineral Resource.
· Drilling programme progressing with the cooperation and
participation of the GSMB.
It is also noted, the total resource of the Taprobane Minerals Project
comprises:
· EL199 - comprises 37 1x1km grids which is under retention.
· EL168 - comprises 47 1x1km grids which is currently secured by
the existing IML applications at the GSMB. There are seven outstanding IML
applications being processed and two partially processed IML applications in
coverage of all of the 47 grids. Until the finalisation of these remaining
applications, the tenement areas are exclusively locked in and will not be
available for use by other parties.
· EL430 - comprises 6 1x1km grids which is under renewal.
Based on the above, management is of the judgement that there is a reasonable
expectation, that the remaining IML applications will be approved in due
course.
Following their assessment, the Directors concluded that no impairment charge
was required at 31 March 2025.
8. Investments in subsidiaries
Company
For the year ended 31 March 2025 For the year ended 31 March 2024
$ $
At beginning of period 33,658,512 32,988,373
Additions - -
Impairment charge - -
Foreign exchange differences 843,711 670,139
Investment at end of period 34,502,223 33,658,512
Investments in Group undertakings are stated at cost, which is the fair value
of the consideration paid, less any impairment provision.
Subsidiaries
Name of subsidiary Country of incorporation and place of business Parent company Proportion of ordinary shares held by the Group (%) Nature of business
Company number
Capital Metals Limited British Virgin Islands 1890161 Capital Metals plc 100% Holding company
Brighton Metals Limited British Virgin Islands 1893384 Capital Metals Limited 100% Holding company
Redgate Lanka (Pvt) Limited Sri Lanka 119784 Brighton Metals Limited 100% Holding/Investment
Damsila Exports (Pvt) Limited Sri Lanka PV8591 Keynes Investments Lanka (Pvt) Limited 60.01% Exploration
Sri Lanka PV8591 Redgate Lanka (Pvt) Limited 39.99% Exploration
Eastern Minerals (Pvt) Limited Sri Lanka PV81273 Redgate Lanka (Pvt) Limited 100% Exploration
Green Tech Minerals (Pvt) Limited Sri Lanka 00277939 Brighton Metals Limited 100% Holding/Investment
All subsidiary undertakings are included in the consolidation.
The proportion of the voting rights in the subsidiary undertakings held
directly by the parent company do not differ from the proportion of ordinary
shares held.
Following an assessment, the Directors concluded that, in the context of the
current market capitalisation, the post year end strategic investment of $2m,
progress of the drilling programme and a year-end cash balance of
approximately $1.35 million, the Company is now both well-funded and in the
best position to unlock material shareholder value, therefore no impairment
was required at 31 March 2025.
9. Loans to subsidiaries
Company
For the year ended 31 March 2025 For the year ended 31 March 2024
$ $
At beginning of period 2,796,677 2,278,546
Additions 1,077,373 440,658
Foreign exchange differences 62,290 77,473
Loan at end of period 3,936,340 2,796,677
The fair value of all receivables is the same as their carrying values stated
above and are repayable on demand. Interest on the principal of the loans is
charged at a rate of 2% per annum.
The Directors have assessed that there are no expected credit losses to
recognise in respect of the loans to subsidiaries as at the balance sheet
date, based on their assessment of the recovery strategies, which indicate
that the Company would fully recover the outstanding balance of the loans. As
such the Directors concluded that no impairment was required at 31 March 2025.
Please refer to Note 7 for further details.
At 31 March 2025 Management reassessed the recovery profile of the Company
loans to subsidiaries and note the updated project development timetable would
mean that it is unlikely that repayments from subsidiaries would commence in
the next 12 months and accordingly the loans continue to be classified as
non-current receivables in the current year.
10. Other loans
For the year ended 31 March 2025 For the year ended 31 March 2024
$ $
Keynes Investment Lanka (Pvt) Limited 140,212 137,569
KPRS Resources (Pvt) Limited 4,648 4,576
Loans at end of period 144,860 142,145
11. Trade and other receivables
Group Company
Current For the year ended 31 March 2025 For the year ended 31 March 2024 For the year ended 31 March 2025 For the year ended 31 March 2024
$ $ $ $
Trade receivables - - 644,168 417,070
Prepayments 44,708 20,439 42,999 19,344
VAT receivable 26,222 22,767 26,222 22,767
Other receivables 9,801 1,431 - -
Total 80,731 44,637 713,389 459,181
The fair value of all receivables is the same as their carrying values stated
above. The Directors have assessed that there are no expected credit losses to
recognise in respect of the trade and other receivables.
The Company trade receivables relate to management recharges to the subsidiary
companies. Further details can be found in Note 25.
A further breakdown of the foreign currency denominated trade and other
receivables can be found in Note 3.
12. Cash and cash equivalents
Group Company
For the year ended 31 March 2025 For the year ended 31 March 2024 For the year ended 31 March 2025 For the year ended 31 March 2024
$ $ $ $
Cash at bank and in hand 1,351,494 3,087,329 1,047,477 3,045,465
All of the UK entities cash at bank is held with institutions with high credit
ratings. The Sri Lankan entities cash at bank is held with institutions whose
credit rating is unknown. $3,817 (2024: $3,315) is held as a fixed deposit by
Damsila Exports Private Limited.
The denomination of the currencies of the cash and cash equivalents can be
found in Note 3.
13. Trade and other payables
Group Company
For the year ended 31 March 2025 For the year ended 31 March 2024 For the year ended 31 March 2025 For the year ended 31 March 2024
$ $ $ $
Current
Trade payables 159,901 156,747 53,841 36,346
Accrued expenses 121,738 91,650 119,365 90,077
Social security and other taxation 8,569 5,490 - -
Deferred consideration 593,750 593,750 - -
Total current liabilities 883,958 847,637 173,206 126,423
Non-current
Deferred consideration 600,000 600,000 - -
Total non-current liabilities 600,000 600,000 - -
Deferred consideration represents amounts payable in respect of the
acquisitions of Damsila Exports (Pvt) Limited and Eastern Minerals (Pvt)
Limited. The amounts fall due and payable upon completion of certain
milestones within the Group, being for each of Damsila Exports (Pvt) Limited
and Eastern Minerals (Pvt) Limited: $625,000 in cash (recognised at 95% of
face value) upon completion of feasibility studies and all approvals on the
relevant project and $750,000 in cash (recognised at 80% of face value) upon
commencement of first commercial production from the relevant project.
Management anticipates the completion of these milestones to take place within
12 months of the balance date, and accordingly the deferred consideration in
respect of this milestone is classified as a current liability.
At the reporting period end, the probability estimated for the likelihood of
completion of Tranche 2 and 3 was considered, and management continue to
estimate 95% probability for Tranche 2 and 80% probability for Tranche 3. If
these estimates prove incorrect then the amounts payable in respect of the
acquisition may be different to those stated within the financial statements.
The total deferred consideration payable if all milestones are achieved would
be $1,375,000. The value of deferred consideration recognised as at 31 March
2025 was $1,193,750 (2024: $1,193,750).
14. Financial Instruments by Category
The notional amounts of financial assets and liabilities with a maturity of
less than one year (including trade and other receivables, cash and cash
equivalents and trade and other payables) are assumed to approximate their
fair value.
Group
31 March 2025 31 March 2024
Amortised cost Total Amortised cost Total
Assets per Statement of Financial Performance $ $ $ $
Cash and cash equivalents 1,351,494 1,351,494 3,087,329 3,087,329
1,351,494 1,351,494 3,087,329 3,087,329
31 March 2025 31 March 2024
Amortised cost Fair value through profit and loss Total Amortised cost Fair value through profit and loss Total
Liabilities per Statement of Financial Performance $ $ $ $ $ $
Trade and other payables 281,642 - 281,642 248,397 - 248,397
Deferred consideration - 593,750 593,750 - 593,750 593,750
281,642 593,750 875,392 248,397 593,750 842,147
Company
31 March 2025 31 March 2024
Amortised cost Total Amortised cost Total
Assets per Statement of Financial Performance $ $ $ $
Trade and other receivables (excluding prepayments) 670,390 670,390 439,838 439,838
Loans to subsidiaries 3,936,340 3,936,340 2,796,677 2,796,677
Cash and cash equivalents 1,047,477 1,047,477 3,045,465 3,045,465
5,654,207 5,654,207 6,281,980 6,281,980
31 March 2025 31 March 2024
Amortised cost Total Amortised cost Total
Liabilities per Statement of Financial Performance $ $ $ $
Trade and other payables 173,206 173,206 126,423 126,423
173,206 173,206 126,423 126,423
15. Share capital and premium
Group and Company Number of shares Share capital
No. Nominal value £ $
Ordinary shares 344,806,209 0.0020 689,612 903,344
Deferred shares 356,277,502 0.0099 3,527,147 5,552,000
Total 701,083,711 4,216,759 6,455,344
Number of Ordinary shares Share capital Share premium Total
Issued at 0.02 pence per share $ $ $
As at 31 March 2024 344,806,209 903,344 54,923,341 55,826,685
Expiry of warrants (cost of capital) - - 12,877 12,877
As at 31 March 2025 344,806,209 903,344 54,936,218 55,839,562
Number of Deferred shares Share capital
Deferred Shares (nominal value of 0.0099 pence per share) $
As at 31 March 2023 356,227,502 5,552,000
As at 31 March 2024 356,227,502 5,552,000
16. Share based payments
Options
The Company has established a share option scheme for Directors, employees and
consultants to the Group. Share options outstanding and exercisable at the end
of the period have the following expiry dates and exercise prices:
Options
Grant Date Vesting Date Exercise price Exercise price hurdle Expiry Date 31 March 2025 31 March 2024
13/01/2021 13/01/2021 12.0p 18.0p 13/01/2026 666,667 666,667
13/01/2021 13/07/2021 12.0p 18.0p 13/01/2026 666,667 666,667
13/01/2021 13/01/2022 12.0p 24.0p 13/01/2026 666,667 666,667
15/09/2021 15/09/2025 12.0p - 15/09/2025 1,000,000 1,000,000
01/08/2023 01/08/2023 3.0p - 01/08/2028 3,683,333 3,683,333
01/08/2023 01/08/2024 3.0p - 01/08/2028 3,683,333 3,683,333
01/08/2023 01/08/2025 3.0p - 01/08/2028 3,683,333 3,683,333
25/03/2024 25/03/2024 5.0p - 25/03/2029 250,000 250,000
25/03/2024 25/03/2025 5.0p - 25/03/2029 250,000 250,000
25/03/2024 25/03/2026 5.0p - 25/03/2029 250,000 250,000
01/07/2024 01/07/2025 3.2p 01/07/2034 2,000,000 -
01/07/2024 Milestone dependant 3.2p 01/07/2034 4,000,000 -
20,800,000 14,800,000
The Company and Group have no legal or constructive obligation to settle or
repurchase the options or warrants in cash.
The fair value of the share options was determined using the Black Scholes
valuation model. The parameters used are detailed below:
2021 Options 2022 Options
Granted on: 13 January 2021 15 September 2021
Estimated Life (years) 5 years 4 years
Share price (pence per share) 19.05p* 9.75p
Risk free rate 1.05% 1.71%
Expected volatility 120% 7.94%
Total fair value ($) 1,459,455 694
2023 Options 2024 Options
Granted on: 01 August 2023 25 March 2024
Estimated Life (years) 5 years 5 years
Share price (pence per share) 1.15p 4.75p
Risk free rate 4.02% 4.02%
Expected volatility 37.24% 45.54%
Total fair value (£) 11,564 12,408
2025 Options
Granted on: 01 July 2024
Estimated Life (years) 10 years
Share price (pence per share) 1.55p
Risk free rate 4.26%
Expected volatility 48.27%
Total fair value (£) 36,145
* This is the volume weighted average share price. In determining the expected
volatility, consideration is usually given to the historical company
volatility. However, given prior to 13 January 2021 the Company was operating
as an investment vehicle, as opposed to a mineral sands company, as such the
future share price volatility pattern of the Company, will be materially
different from the historic volatility. It has been deemed appropriate to use
the median 5-year monthly volatility of a basket of listed comparable
companies with exposure to mineral sands.
The risk-free rate of return is based on zero yield government bonds for a
term consistent with the option life.
A reconciliation of options granted over the year to 31 March 2025 is shown
below:
31 March 2025 31 March 2024
Number Weighted average exercise price (£) Number Weighted average exercise price (£)
Outstanding at beginning of period 14,800,000 12.0p 12,250,000 12.0p
Expired - - - -
Cancelled - - (9,250,000) -
Exercised - - - -
Granted 6,000,000 3.0p 11,800,000 3.0p
Outstanding as at period end 20,800,000 14,800,000
Exercisable at period end 12,866,677 3,933,333
The options outstanding at 31 March 2025 have a weighted average contractual
life of 4.7 years (2024: 3.8 years).
The options granted on 13 January 2021 vest in three tranches of one-third on
13 January 2021 ("Tranche 1"), one-third on 13 July 2021 ("Tranche 2") and
one-third on 13 January 2022 ("Tranche 3"). Tranche 1 and Tranche 2 have a
market based vesting condition (i.e. the Company's shares having traded any
time following admission of the shares to trading on the AIM market at a 50%
premium to the exercise price). Tranche 3 has a market based vesting condition
(i.e., the Company's shares having traded any time following admission of the
shares to trading on the AIM market at a 100% premium to the exercise
price).
Of the options granted on 1 August 2023, 6,000,000 vest in 3 tranches of
2,000,000 each with tranche 1 and 2 vesting upon the fulfilment of certain
performance conditions and tranche 3 vesting with market based vesting
conditions (i.e., when the 30-day volume weighted average share price of the
Company exceeds 5 pence).
Of the options granted on 1 July 2024, 4,000,000 vest in 2 tranches of
2,000,000 each with tranche 1 vesting when the Project receives all approvals
to enable the commencement of construction as approved by any funding
arrangements with third parties on or before the 1st anniversary of the Grant
Date and tranche 2 vesting when the Project achieves, for 30 consecutive days,
the production capacity described in the IHC Report as Stage 1A of the Study
Case Process CAPEX to HMC Production (Mining 0.55Mtpa), or any other
production milestone agreed between the parties, on or before the 2nd
anniversary of the Grant Date per the Option Deed.
During the period there was a charge of $4,611 (2024: $30,122) in respect of
share options. The full charge is being recognised over the life of the
options.
Warrants
As at 31 March 2025, there were 1,735,294 warrants outstanding by the Company
(2024: 2,568,627).
Warrants
Grant Date Exercise price Expiry Date 31 March 2025 31 March 2024
08/09/2020 £0.080 08/09/2023 - -
13/01/2021 £0.080 13/01/2024 - -
13/01/2021 £0.120 13/01/2024 - -
13/01/2021 £0.156 13/01/2024 - -
13/01/2021 £0.156 13/01/2024 - -
13/01/2021 £0.156 13/01/2024 - -
15/02/2022* £0.075 15/02/2025 - 833,333
01/08/2023*** £0.030 01/08/2028 1,000,000 1,000,000
10/12/2023**** £0.042 10/12/2026 735,294 735,294
1,735,294 2,568,627
The fair value of the warrants was determined using the Black Scholes model.
The parameters used are detailed below:
2022 Warrants 2023 Warrants
Granted on: 15 February 2022 1 August 2023
Life (years) 3 years 5 years
Price at grant 7.75p 1.15p
Risk free rate 1.71% 4.02%
Volatility 88.90% 37.24%
*The estimated fair value of the warrants granted on 15 February 2022 was
assessed as $13,000 and charged to the share premium to recognise the cost of
issuing the warrants. The expected volatility was determined by reference to
the historical volatility of the Company's share price.
**On 20 June 2023 warrants to subscribe for 2,500,000 shares were issued to
the Company Broker. The Warrants were exercisable at the Placing Price for a
period of 3 years from the date of Admission. 1,625,000 warrants were
subsequently exercised on 23 October 2023 and 875,000 on 15 January 2024.
Please refer to Note 15 for further details.
***The estimated fair value of the warrants granted on 1 August 2023 was
assessed as $1,320 and charged to the share premium to recognise the cost of
issuing the warrants. The expected volatility was determined by reference to
the historical volatility of the Company's share price.
****735,294 warrants were issued to the Company Broker as part of the placing
which took place on 11 December 2023. The Warrants are exercisable at the
placing price of 4.25p for a period of 3 years from the date of Admission.
A reconciliation of the movement of warrants over the year to 31 March 2025 is
shown below:
31 March 2025 31 March 2024
Number Weighted average exercise price (£) Number Weighted average exercise price (£)
Outstanding at beginning of period 2,568,627 11.0p 18,275,904 11.0p
Expired (833,333) - (17,442,571) -
Cancelled - - - -
Exercised - - (2,500,000) -
Granted - - 4,235,294 3.0p
Outstanding as at period end 1,735,294 2,568,627
Exercisable at period end 1,735,294 2,568,627
The warrants outstanding at 31 March 2025 have a weighted average contractual
life of 2.6 years (2024: 2.7 years).
17. Other reserves
Group
Capital contribution reserve Deferred share reserve Merger reserve Share warrants and options reserve Foreign currency translation reserve Total
$ $ $ Reverse acquisition reserve $ $ $
$
At 31 March 2023 1,250,000 1,968,750 35,633,822 (75,441,159) 4,170,967 (3,499,989) (35,917,609)
Currency translation differences - - - - - 443,897 443,897
Issue of options/warrants - - - - 31,442 - 31,442
Foreign exchange on options/warrants - - - - 126 - 126
Cancelled options - - - - (1,103,946) - (1,103,946)
Expired warrants - - - - (2,495,891) - (2,495,891)
Transfer to NCI - - - - - (29,538) (29,538)
At 31 March 2024 1,250,000 1,968,750 35,633,822 (75,441,159) 602,698 (3,085,630) (39,071,519)
At 1 April 2024 1,250,000 1,968,750 35,633,822 (75,441,159) 602,698 (3,085,630) (39,071,519)
Currency translation differences - - - - - 126,400 126,400
Issue of options - - - - 4,611 - 4,611
Foreign exchange on options - - - - 64 - 64
Expired warrants - - - - (12,877) - (12,877)
Transfer to NCI - - - - - 46,008 46,008
At 31 March 2025 1,250,000 1,968,750 35,633,822 (75,441,159) 594,496 (2,913,222) (38,907,313)
Company
Merger reserve Share warrants and options reserve Foreign currency translation reserve Total
$ $ $ $
At 1 April 2023 35,633,822 4,195,967 (4,674,306) 35,155,483
Currency translation differences - - 733,084 733,084
Issue of options/warrants - 31,442 - 31,442
Foreign exchange on options/warrants - 126 - 126
Cancelled options - (1,103,946) - (1,103,946)
Expired options - (2,495,891) - (2,495,891)
At 31 March 2024 35,633,822 627,698 (3,941,222) 32,320,298
At 1 April 2024 35,633,822 627,698 (3,941,222) 32,320,298
Currency translation differences - - 974,879 974,879
Issue of options - 4,611 - 4,611
Foreign exchange on options - 64 - 64
Expired warrants - (12,877) - (12,877)
At 31 March 2025 35,633,822 619,496 (2,966,343) 33,286,975
18. Group Restructure
On 10 February 2023, following receipt of the notice from Sri Lanka's GSMB to
the Company's Sri Lankan IML-holding subsidiary Damsila Exports (Pvt) Limited
("Damsila"), the Company had been in frequent and productive dialogue with
senior GSMB and other officials in Colombo seeking to resolve concerns around
the ownership structure of Damsila. While the Company's legal position
remained that the ownership structure conformed with the relevant
requirements, the Board's objective had been to derive a pragmatic solution to
satisfy the GSMB that the spirit of the law requiring local ownership of
mining and primary processing activities was reflected. This resulted in a
restructuring of the Group.
Under the Restructuring, an effective 60 percent of the ownership of Damsila
has been issued to a Sri Lankan national who is known to, and who has worked
with, the Company since 2015. As the Company will continue to fund the
capital and operations of the Project, the Restructuring has been completed
without materially impacting the Company's economic value in the Project.
Prior to the restructure, Damsila had 26,354,812 shares in issue. The
Restructuring involved Damsila issuing 39,548,694 new shares to Keynes
Investment Lanka (Pvt) Limited ("Keynes"), which is 99.98% owned by a Sri
Lankan national, Mr Dinal Peiris, who is well known to the Company, with the
remaining 0.02% owned by an existing Capital Metals shareholder, giving Keynes
a 60.01 percent interest in Damsila and the Sri Lankan national an effective
60.0 percent of Damsila. The consideration for the above issue of ordinary
shares in Damsila to Keynes is 1 Sri Lankan rupee per share (equivalent to
US$108,353 at 365 SLR: 1 USD).
If an entity with a 40% shareholding has a contractual arrangement that gives
it the power to direct the relevant activities of the other entity, it can
maintain control and is required to consolidate the financial statements of
the other entity in accordance with IFRS 10. After the restructure of the
Group, the contractual arrangements in place to determine whether they have
the power to direct the relevant activities of another entity and, as a
result, maintain control were carefully assessed. It was concluded that as
Directors have the majority of the voting rights, the Company will benefit
from all future production of any offtake agreements and that Redgate Lanka
maintains control of Damsila. As such Damsila shall remain consolidated within
the Group accounts. Damsila is now accounted for as a non-controlling
interest. No NCI has been recognised on the net assets of Damsila as the Group
has full rights to returns from the subsidiary. An equity transfer has been
made only in relation to historic OCI movements through the foreign exchange
reserve.
As a result of the restructure, Keynes Investment Lanka (Pvt) Limited was
deconsolidated and is no longer part of the Group. There was no material
impact on the financial statements. A loan to Keynes Investment Lanka (Pvt)
Limited has arisen due to the restructure of the Group (please refer to Note
10). The loan balance is a loan balance held with Damsila that had previously
been eliminated on consolidation.
19. Employee benefit expense
Group Company
Staff costs (excluding Directors) Year ended Year ended Year ended Year ended
31 March 2025 31 March 2024 31 March 2025 31 March 2024
$ $ $ $
Salaries and wages 139,267 94,426 - -
Social security costs - - - -
Other employment costs - - - -
139,267 94,426 - -
The average monthly number of employees for the Group during the year was 26
(year ended 31 March 2024: 14).
20. Directors' and Key Management remuneration
Salaries & fees Share based payments Year ended 31 March 2025 Year ended 31 March 2024
$ $ $
$
Executive Directors
Michael Frayne* - - - 4,500
Gregory Martyr 180,645 - 180,645 207,066
Non-executive Directors
James Leahy 50,662 - 50,662 38,731
Teh Kwan Wey 30,617 - 30,617 21,365
Bruce Griffin - - - -
Key Management
Iranga Dunuwille 82,000 - 82,000 78,000
Stuart Forrester 172,773 172,773
516,697 - 516,697 349,662
*Michael Frayne resigned on 30 June 2023.
As at 31 March 2025, there were no directors receiving defined contribution
pension schemes benefits (2024: Nil).
Of the above costs, $216,647 (year ended 31 March 2024: $138,266) has been
capitalised in accordance with IFRS 6 as exploratory related costs and are
shown as an intangible addition in the year.
Details of fees paid to companies of which the Directors detailed above are
Directors have been disclosed in Note 25.
The remuneration of Directors and key management is determined by the
remuneration committee having regard to the performance of individuals and
market trends.
There are no current year director's fees/remuneration paid through the
issuance of shares.
21. Income tax expense
No charge to taxation arises due to the losses incurred.
The tax on the Group's loss before tax, applicable to the losses of the
consolidated entities, is as follows:
Group
For the year ended 31 March 2025 For the year ended 31 March 2024
$ $
Loss before tax (1,140,932) (931,577)
Tax at the applicable rate of 25% (2024: 25%) (285,233) (232,894)
Effects of:
Expenditure not deductible for tax purposes 11,068 13,579
Deferred tax asset not recognised 274,165 219,315
Tax charge - -
No deferred tax assets have been recognised in relation to the historic losses
in the year (2024: nil), this is as a result of the uncertainty of future
profits within the Group.
The Group has tax losses of approximately $13,564,300 (31 March 2024:
$12,467,638) available to carry forward against future taxable profits.
The Company has tax losses of approximately £2,765,086 (31 March 2024:
£1,937,846) available to carry forward against future taxable profits.
22. Loss per share
Group
The calculation of the total basic loss per share of 0.16 cents (2024: 0.15
cents) is based on the total comprehensive loss attributable to equity holders
of the parent company of $1,140,932 (2024: $931,577) and on the weighted
average number of ordinary shares of 701,083,711 (2024: 622,139,698) in issue
during the year.
In accordance with IAS 33, basic and diluted earnings per share are identical
for the Group as the effect of the exercise of share options would be to
decrease the earnings per share. Details of share options that could
potentially dilute earnings per share in future periods are set out in Note
16.
23. Expenses by nature
Group
Year ended Year ended
31 March 2025 31 March 2024
$ $
Operations 211,744 130,071
Director fees & employment tax contributions 300,050 211,396
Audit 92,490 110,598
Accountancy 110,454 79,329
Exchange related costs 134,488 130,159
Professional & consultancy fees 129,731 132,621
Office expenses 15,199 14,196
Insurance 12,325 2,189
Depreciation 3,773 4,021
Travel & entertainment 104,767 34,005
Acquisition related costs 25,514 18,852
Other expenses 25,895 32,036
Total administrative expenses 1,166,430 899,473
The above Director fees were $516,697 prior to the capitalisation of $216,647
of exploration related costs (year ended 31 March 2024: $138,266) in
accordance with IFRS 6. Refer to Note 20.
Services provided by the Company's auditor and its associates
During the year, the Group (including overseas subsidiaries) obtained the
following services from the Company's auditors and its associates:
Group
Year ended 31 March 2025 Year ended 31 March 2024
$ $
Fees payable to the Company's auditor and its associates for the audit of the 92,490 110,598
Parent Company and Consolidated Financial Statements
24. Commitments
License commitments
Capital Metals plc through its subsidiaries owns two mineral exploration
licenses and two IMLs in Sri Lanka. These licences include commitments to pay
annual licence fees and minimum spend requirements.
As at 31 March 2025 these are as follows:
2025 2024
Group Licence fees Minimum spend requirement Total
$ $ $
Minimum spend requirement
Licence fees $ Total
$
$
Not later than one year 725,700 - - - - -
Later than one year and no later than five years - 152,981 152,981 - 602,406 602,406
Total 725,700 152,981 152,981 - 602,406 602,406
The minimum spend requirement is for the 24 grids previously covered by EL430.
The renewal application is for six grids only.
25. Related party transactions
Loans to Group undertakings
Amounts receivable as a result of loans granted to subsidiary undertakings are
as follows:
Company
31 March 2025 31 March 2024
$ $
Brighton Metals Limited 2,366,182 1,461,044
Capital Metals Limited 962,002 915,837
Damsila Exports Private Ltd 607,620 419,796
Eastern Minerals Private Ltd 268 -
Redgate Lanka Private Ltd 268 -
At 31 March 2025 3,936,340 2,796,677
These amounts are unsecured and repayable in US Dollars on demand from the
Company. Interest on the principal of the loan is charged at a rate of 2% per
annum.
Amount receivable as a result of management recharges are as follows:
Company
31 March 2025 31 March 2024
$ $
Brighton Metals Limited 36,016 35,136
Capital Metals Limited 36,016 35,136
Damsila Exports Private Ltd 294,784 167,615
Eastern Minerals Private Ltd 236,081 138,922
Redgate Lanka Private Ltd 41,271 40,261
At 31 March 2025 644,168 417,070
All intra Group transactions are eliminated on consolidation.
Other transactions
The Group defines its key management personnel as the Directors of the Company
as disclosed in the Directors' Report.
Limerston Pty Limited, a limited company of which Michael Frayne is a
director, was paid a fee of $Nil for the year ended 31 March 2025 (31 March
2024: $15,773) for the provision of corporate management and consulting
services to the Company. There was a balance of $Nil owing at year end (31
March 2024: $Nil).
Hogan's Bluff Capital Pty Ltd, a limited company of which Greg Martyr is a
director, was paid a fee of $233,982 for the year ended 31 March 2025 (31
March 2024: $236,468) for consulting services to the Company and expenses.
There was a balance of $Nil owing at year end (31 March 2024: $Nil).
KL-Kepong International Ltd, a limited company of which is fully owned by
Kuala Lumpur Kepong Berhad Ltd of which Teh Kwan Wey is an employee of, was
paid a fee of $30,617 for the year ended 31 March 2025 (31 March 2024:
$16,652) for consulting services to the Company. There was a balance of $Nil
owing at year end (31 March 2024: $Nil).
Inverness Consulting Pty Ltd, a limited company of which Stuart Forrester is a
director, was paid a fee of $185,104 for the year ended 31 March 2025 (31
March 2024: $Nil) for consulting services to the Company. There was a balance
of $Nil owing at year end (31 March 2024: $Nil).
Ventureflex (Pvt) Ltd, a limited company of which Iranga Dunuwille is a
director, was paid a fee of $36,000 for the year ended 31 March 2025 (31 March
2024: $43,000) for consulting services to the Company. There was a balance of
$Nil owing at year end (31 March 2024: $Nil).
Related party transactions were made on terms equivalent to those that prevail
in arm's length transactions only when such terms can be substantiated.
26. Ultimate controlling party
The Directors believe there is no ultimate controlling party.
27. Events after the reporting date
On 2 April 2025, the Company issued 344,052 new ordinary shares of 0.2 pence
at a price of 2.1799 pence per share in consideration of Broker and Financial
Advisor fees.
On 29 May 2025, the Company issued 59,701,000 new ordinary shares of 0.2 pence
at a price of 2.5 pence per share for gross proceeds of $2m.
On 29 May 2025, the Company issued 7,984,000 new ordinary shares of 0.2 pence
at a price of 2.5 pence per share for gross proceeds of $267,000.
On 2 June 2025, the Company issued 16,000,000 new ordinary shares of 0.2 pence
at a price of 2.5 pence per share for gross proceeds of £400,000.
On 13 June 2025, the Company issued 283,355 new ordinary shares of 0.2 pence
at a price of 2.6106 pence per share in consideration of Broker and Financial
Advisor fees.
On 16 July 2025, the Company granted share options to subscribe for 600,000
new Ordinary Shares in consideration of Adviser fees.
On 16 July 2025, the Company issued 783,677 new ordinary shares of 0.2 pence
at a price of 2.5 pence per share in consideration of Fee Shares.
On 29 July 2025, the Company announced Strand Hanson Limited had been
appointed as Nominated Adviser.
On 4 August 2025, the Company announced the appointment of Aravinda De Silva
and Savanth Sebastian as Non-Executive Directors
On 5 August 2025, the Company issued 22,713,704 new ordinary shares of 0.2
pence at a price of 2.75 pence per share for gross proceeds of $825,000.
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