REG - Cloudbreak Discovery - Final Results for the Year Ended 30 June 2024
31/01/2025 07:00
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RNS Number : 3639V Cloudbreak Discovery PLC 31 January 2025
31 January 2025
Cloudbreak Discovery Plc
("Cloudbreak" or the "Company")
Final Results for the Year Ended 30 June 2024
Cloudbreak Discovery PLC (LSE: CDL), a London listed royalty company and
natural resources project generator, is pleased to announce its final results
for the year ended 30 June 2024.
The Annual Report and Financial Statements for the year ended 30 June 2024
will shortly be available on the Company's website
at www.cloudbreakdiscovery.com. A copy of the Annual Report and Financial
Statements will shortly be uploaded to the National Storage Mechanism where it
will be available for viewing
at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism)
--ENDS--
For additional information please contact:
Cloudbreak Discovery PLC Tel: +44 792 6 397 675
Andrew Male, Interim CEO andrew@westridgemi.com
Novum Securities Tel: +44 7399 9400
(Financial Adviser)
David Coffman / George Duxberry
Oberon Capital Tel: +44 20 3179 5355 /
(Broker) +44 20 3179 5315
Nick Lovering / Adam Pollock
INTERIM CEO'S REPORT
I am pleased to present the financial results of Cloudbreak Discovery Plc for
the year ended 30 June 2024.
The Company remains focused on building a specialist early-stage natural
resource investment project generator and development business seeking to
identify and secure potential acquisition opportunities within the mining and
oil & gas sectors. With a portfolio of mineral exploration projects and an
investment in a company that has an operating oil and gas field, that is
undergoing a turnaround and ramp up on production, the Group made a pre-tax
loss for the year of £855,966 (2023: £3,985,721). Cash at bank at the
year-end was £195,157 (2023: £244,074).
The Company has undertaken a major restructuring since March 2023, resulting
in the retirement of many of the corporate debts, a reduction in the overheads
and an ongoing review of its assets and projects under ownership and
management. In turn the balance sheet has seen improvement, and the Company is
even more streamlined and focused with its efforts.
Stock markets generally continue to be unkind to small, developing companies
for whom it can be quite difficult to raise funds. On the one hand, this
offers no shortage of good exploration and development propositions, often
with seasoned and professional management teams, that could provide excellent
opportunities for Cloudbreak to consider as investments or participation
projects which can create and build long-term value for shareholders.
Alternately, the Company's cash resources are limited such that any project
with either critical mass or unlocked future potential will require the
injection of new funds to invest in future growth. This means that Cloudbreak
will need to be seeking to find sources of new capital to fund the acquisition
and development of projects which themselves have run into difficulty doing
the same. The Directors of Cloudbreak believe that we have the skill set to
identify, secure and fund such deserving projects. However, in current markets
this is taking longer to achieve than we would like.
Outlook
We continue to look for suitable late-stage mining exploration and oil and gas
projects and companies, ideally with good operational management and technical
teams, particularly where existing resources are being upgraded to reporting
code standards for pre-feasibility and bankable feasibility studies and in
special situations where short-term routes to cash flow can be implemented
without significant capital expenditure. We are particularly interested in
projects exploring for or developing resources in precious and base metals and
will also consider energy mineral projects that meet certain criteria. Our
expertise lies particularly on the continents of North and South America and
Africa.
Project Portfolio
Apple Bay - Industrial Minerals Quarry held by Linceo Media Group Ltd.
Rupert - Copper Porphyry target presently held by Buscando Resources Ltd.
which are in default of property exploration commitments.
Atlin West - Gold target currently held by Power Group Projects Corp. which
are in default of property exploration commitments while completing a
restructuring of the company.
Yak - Gold target that was initially optioned by Moonbound Mining Corp., (now
Cape Lithium Corp.), where exploration work was completed and then Moonbound
relinquished the project back to Cloudbreak due to a change of direction and
effort.
Bobcat - Copper and Gold target currently beneficially owned by Longford
Capital Corp. with 50% interest to Cloudbreak.
Elk Creek and Franklin - Appalachian Lithium Brine target with leases
currently held until 2028.
The mining exploration projects held by Cloudbreak, while impaired
technically, have an underlying value and are in line with the Company's
business model. Securing early-stage exploration projects, completing
sufficient exploration work on these projects and then seeking financial and
exploration partners is specifically how Cloudbreak realises its investment
return.
Each of the projects noted above continue to be marketed to various mining
exploration companies. Transactions vary dependent on the project, location
and stage or commodity. In each case Cloudbreak has little to no carrying
costs and where the carrying cost of these projects becomes cumbersome,
Cloudbreak will make a commercial decision to hold or relinquish the project.
The opportunity to option or joint venture these projects outweigh the
expenses in many ways.
Optioned Projects
Lonestar Lithium Ltd. - Texas Lithium Brine target currently under option to
Lonestar
The Lonestar transaction is one whereby Cloudbreak developed a data set of
information and exploration opportunities and has optioned the project to
Lonestar. In return Cloudbreak received a commitment of cash, shares and
royalties, all based on a timeline that requires Lonestar to meet in order to
avoid penalties or default.
This is a typical transaction structure for Cloudbreak with its exploration
portfolio.
Operational Portfolio
G2 Energy Corp. - Operating oil and gas field.
Cloudbreak owns a USD $2.0m Convertible Debenture on G2 Energy which is a
producing oil and gas company in Texas. While production performance has
fluctuated, the security position of this debt instrument is strong. Working
closely with G2 and their team, Cloudbreak is looking forward that the return
on the instrument and by extension the royalties will prove profitable once
the additional capital is invested in the field to initially stabilize and
then enhance the production.
Financial Review
The Company currently only has interest income, and its cash reserves will be
used in the short term to cover professional service provider fees, initial
due diligence and other costs incidental to the identification and development
of acquisition opportunities are being borne by the Directors and key
stakeholders until such time as the Company can afford these fees.
The loss for the year was £855,966. Total expenditure during the year was
£943,302 (2023: £3,855,925) which consisted mainly of service providers to
aid the restructuring and clean-up of the Company of £795,379 and director
fees of £99,000, with the balance comprising corporate, regulatory and
administration expenses.
Financial Position
The Group's Statement of Financial Position as at 30 June 2024 and
comparatives at 30 June 2023 are summarised below:
2024 2023
£ £
Current assets 1,962,510 2,071,143
Non-current assets 526,999 1,632,752
Total assets 2,489,509 3,703,895
Current liabilities 770,633 1,704,437
Total liabilities 770,633 1,704,437
Net assets 1,718,876 1,999,458
Cloudbreak will continue to require additional funds and/or funding facilities
in order to fully develop its business plan.
The Directors believe that such funds are likely to come from the arrangement
of appropriate debt arrangements, and further equity issues. Ultimately the
viability of Cloudbreak is dependent on future liquidity of its investments
and in particular the successful development of G2 Energy Corp. The Directors'
assessment of going concern is set out in note 2.4 to the financial
statements.
UK Listing Category
On 29 July 2024, the Listing Rules were replaced by the UK Listing Rules
("UKLR") under which the existing Standard Listing category was replaced by
the Equity Shares (transition) category under Chapter 22 of the UKLR.
Consequently, with effect from that date the Company is admitted to Equity
Shares (transition) category of the Official List under Chapter 22 of the UKLR
and to trading on the London Stock Exchange's Main Market for listed
securities.
I would like to thank all our professional staff, consultants and advisors,
all of whom work tirelessly to accomplish our common goal of the turnaround of
the Company. And I would like to thank our Shareholders, and Directors for
their considerable support. I look forward to reporting further positive news
during 2025.
Andrew Male
CEO
30 January 2025
Interim CEO
STATEMENT OF FINANCIAL
POSITION
As at 30 June
2024
Company number: 06275976
Group Company
Note 30 June 2024 30 June 2023 30 June 2024 30 June 2023
£ £ £ £
Non-Current Assets
Royalty asset 7 1 1 - -
Intangible assets 5 80,870 236,518 - -
Investments 6 417,217 891,255 256,560 43,046
Investment in subsidiaries 6 - - 19,296 1,997,048
Leased Asset 28,911 29,810 - -
Convertible debenture receivables 8 - 475,168 - 475,168
526,999 1,632,752 275,856 2,515,262
Current Assets
Trade and other receivables 10 185,925 243,177 87,797 77,254
Cash and cash equivalents 11 195,157 244,074 94,586 18,684
Convertible debenture receivables 8 1,581,428 1,583,892 1,581,428 1,583,892
1,962,510 2,071,143 1,763,811 1,679,830
Total Assets 2,489,509 3,703,895 2,039,667 4,195,092
Current Liabilities
Trade and other payables 13 727,385 1,704,437 657,767 1,454,431
Convertible loan notes 14 43,248 - 43,248 -
770,633 1,704,437 701,015 1,454,431
Total Liabilities 770,633 1,704,437 701,015 1,454,431
Net Assets 1,718,876 1,999,458 1,338,652 2,740,661
Equity attributable to owners of the Parent
Share capital 15 900,167 778,635 900,167 778,635
Share premium 15 17,239,349 16,753,221 17,239,349 16,753,221
Other reserves 17 162,365 519,045 17,864 340,716
Reverse asset acquisition reserve (4,134,019) (4,134,019) - -
Retained losses (12,448,986) (11,917,424) (16,818,728) (15,131,911)
Total Equity 1,718,876 1,999,458 1,338,652 2,740,661
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
30 June 2024 was £2,011,221 (loss for year ended 30 June 2023: £8,781,189).
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2024
Continued operations Note Year ended 30 June Year ended 30 June
2024 2023
£ (restated)
£
Profit on disposal of exploration & evaluation asset sales 45,279 364,968
Administrative expenses 25 (943,302) (3,855,925)
Foreign exchange (losses)/gains 50,529 (81,024)
Operating loss (847,494) (3,571,981)
Finance income 20 344,198 369,587
Finance costs (214,841) -
Other income 336,864 47,121
Impairment of loans 9 (172,221) (128,607)
Impairment of debentures (474,428) -
Impairment of investments (117,260) -
Impairment of intangible assets (107,684) (12,636)
Other gains 21 633,113 17,913
Realised Loss on disposal investments 22 (71,071) (866,421)
Unrealised fair value (loss)/gain on debentures (3,204) -
Unrealised fair value (loss)/gain on investments 6 (394,009) 309,896
Discontinued operations:
Gain/(loss) from discontinued operations 28 232,071 (150,593)
Profit/(Loss) before income tax (855,966) (3,985,721)
Income tax 23 - (12,178)
Loss for the year attributable to owners of the Parent (855,966) (3,997,899)
Basic and Diluted Earnings Per Share attributable to owners of the Parent 24
during the period (expressed in pence per share)
Continuing operations (0.1)p (1)p
Discontinuing operations - (0.0003)p
Year ended 30 June Year ended 30 June
2024 2023
£ £
Loss for the period (855,966) (3,997,899)
Other Comprehensive Income:
Items that may be subsequently reclassified to profit or loss
Currency translation differences (33,828) (123,367)
Other comprehensive income for the period, net of tax (889,794) (4,121,266)
Total Comprehensive Income attributable to owners of the parent (889,794) (4,121,266)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2024
Note Share capital Share premium Reverse asset acquisition reserve Other reserves Retained losses Total
£ £ £ £ £ £
Balance as at 1 July 2022 654,129 14,821,521 (4,134,019) 599,093 (7,919,525) 4,021,199
Loss for the year - - - - (3,997,899) (3,997,899)
Other comprehensive income for the year - - - - -
-
Items that may be subsequently reclassified to profit or loss - - - - -
-
Currency translation differences - - - (123,367) - (123,367)
Total comprehensive income for the year - - - (123,367) (4,121,266)
(3,997,899)
Issue of shares 15 124,506 1,934,700 - - - 2,059,206
Issue costs 15 - (3,000) - - - (3,000)
Options Granted 16 - - - 36,723 - 36,723
Warrants Granted 16 - - - 6,596 - 6,596
Total transactions with owners, recognised directly in equity 124,506 1,931,700 - 43,319 - 2,099,525
Balance as at 30 June 2023 778,635 16,753,221 (4,134,019) 519,045 (11,917,424) 1,999,458
Balance as at 1 July 2023 778,635 16,753,221 (4,134,019) 519,045 (11,917,424) 1,999,458
Loss for the year - - - - (855,966) (855,966)
Other comprehensive income for the year - - - - - -
Items that may be subsequently reclassified to profit or loss - - - - - -
Currency translation differences - - - (33,828) - (33,828)
Total comprehensive income for the year - - - (33,828) (855,966) (889,794)
Issue of shares 15 121,532 486,128 - - - 607,660
Options lapsed 16 - - - (75,281) 75,281 -
Warrants lapsed 16 - - - (249,123) 249,123 -
Equity component of CLN 14 - - - 1,552 - 1,552
Total transactions with owners, recognised directly in equity 121,532 486,128 - (322,852) 324,404 609,212
Balance as at 30 June 2024 900,167 17,239,349 (4,134,019) 162,365 (12,448,986) 1,718,876
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2024
Note Share capital Share premium Other reserves Retained losses Total equity
£ £ £ £ £
Balance as at 1 July 2022 654,129 14,821,521 297,397 (6,350,722) 9,422,325
Loss for the year - - - (8,781,189) (8,781,189)
Total comprehensive income for the year - - - (8,781,189) (8,781,189)
Issue of shares 15 124,506 1,934,700 - - 2,059,206
Issue Costs 15 - (3,000) - - (3,000)
Options granted 16 - - 36,723 - 36,723
Warrants Granted 16 - - 6,596 - 6,596
Total transactions with owners, recognised directly in equity 124,506 1,931,700 43,319 - 2,099,525
Balance as at 30 June 2023 778,635 16,753,221 340,716 (15,131,911) 2,740,661
Balance as at 1 July 2023 778,635 16,753,221 340,716 (15,131,911) 2,740,661
Loss for the year - - - (2,011,221) (2,011,221)
Total comprehensive income for the year - - - (2,011,221) (2,011,221)
Issue of shares 15 121,532 486,128 - - 607,660
Options lapsed 16 - - (75,281) 75,281 -
Warrants lapsed 16 - - (249,123) 249,123 -
Equity component of CLN 14 - - 1,552 - 1,552
Total transactions with owners, recognised directly in equity 121,532 486,128 (322,852) 324,404 609,212
Balance as at 30 June 2024 900,167 17,239,349 17,864 (16,818,728) 1,338,652
STATEMENTS OF CASH FLOWS
For the year ended 30 June 2024
Group Company
Note Year ended Year ended Year ended 30 June 2024 Year ended 30 June 2023
30 June 2024 30 June 2023 £ £
£ £
Cash flows from operating activities
Loss before income tax (855,966) (3,997,899) (2,011,221) (8,781,189)
Adjustments for:
Provision for bad debt 211,824 287,052 - 140,000
Realised loss on investments 71,071 866,421 - -
Change in fair value of investments 394,009 (309,896) 150,354 14,961
Change in fair value of convertible debentures 3,204 91,106 3,204 91,106
Impairment of loans and debentures 646,649 128,607 563,306 52,444
Impairment of intangible assets 107,684 12,636 - -
Impairment of investment 117,260 - 411,231 -
Impairment of intercompany investments - - 1,144,380 6,056,544
Interest income (262,885) (369,587) (199,299) (309,274)
Finance cost 177,000 - 177,000 -
Income on consideration shares 6 (316,343) - (316,343) -
Intercompany sales - - - (155,129)
Unrealised foreign exchange/(loss) (45,753) (100,977) 937 30,448
Share option expenses 25 - 43,306 - 43,306
Increase in trade and other receivables 10 (293,998) 773,143 (187,218) 1,614,494
(Decrease)/Increase in trade and other payables 13 (361,265) 282,930 (182,371) 108,424
Net cash used in operating activities (407,509) (2,293,158) (446,040) (1,093,865)
Cash flows from investing activities
Funds received on sale of investment 6 255,612 677,400 - -
Funds spent on investment 6 - (58,649) - (58,007)
Funds spent on leased assets - (29,810) - -
Funds received on sale of exploration assets 5 41,919 47,206 - -
Loans (to)/from subsidiaries 6 - - 422,140 (732,651)
Interest received 99,802 226,382 99,802 226,382
Exploration and evaluation expenses - (222,667) - -
Convertible debenture receivable 8 - (503,499) - (503,499)
Net cash generated from (used in) investing activities 397,333 136,363 521,942 (1,067,775)
Cash flows from financing activities
Proceeds from issue of share capital 15 - 2,059,206 - 2,059,206
Cost of shares issued 15 - (3,000) - (3,000)
Loans granted (38,741) 34,085 - -
Net cash generated from financing activities (38,741) 2,090,291 - 2,056,206
Net (decrease)/increase in cash and cash equivalents (48,917) (66,504) 75,902 (105,434)
Cash and cash equivalents at beginning of year 11 244,074 310,578 18,684 124,118
Cash and cash equivalents at end of year 195,157 244,074 94,586 18,684
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
1. General information
The Company is a public limited company incorporated and domiciled in England
(registered number: 06275976), which is listed on the London Stock Exchange.
The registered office of the Company is 6 Heddon Street, London, W1B 4BT.
2. Summary of significant Accounting Policies
The principal Accounting Policies applied in the preparation of these
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
The Financial Statements have been prepared in accordance with UK-adopted
international accounting standards (UK IAS) in accordance with the
requirements of the Companies Act 2006. The Financial Statements have also
been prepared under the historical cost convention.
The Financial Statements are presented in Pounds Sterling rounded to the
nearest pound.
The preparation of financial statements in conformity with UK IAS 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 mandatory for the first time for the
financial periods beginning on or after 30 June 2024.
The International Accounting Standards Board (IASB) issued various amendments
and revisions to International Financial Reporting Standards and IFRIC
interpretations. The amendments and revisions were applicable on or after the
year ended 30 June 2024 but did not result in any material changes to the
financial statements of the Group.
(b) New standards, amendments and interpretations in issue but not yet
effective or not yet endorsed and not early adopted.
Standards, amendments and interpretations that are not yet effective and have
not been early adopted are as follows:
Standard Impact on initial application Effective date
IAS 21 (Amendments) Lack of Exchangeability 1 January 2025
IAS 9 (Amendments) Classification and measurement of Financial Instruments 1 January 2026
The Group is evaluating the impact of the new and amended standards above
which are not expected to have a material impact on the Group's results or
shareholders' funds.
2.3. Basis of Consolidation
The Consolidated Financial Statements consolidate the financial statements of
the Company and its subsidiaries made up to 30 June. Subsidiaries are entities
over which the Group has control. Control is achieved when the Group is
exposed, or has rights, to variable returns from its involvement with the
investee and has the ability to affect those returns through its power over
the investee.
Generally, there is a presumption that a majority of voting rights result in
control. To support this presumption and when the Group has less than a
majority of the voting or similar rights of an investee, the Group considers
all relevant facts and circumstances in assessing whether it has power over an
investee, including:
· The contractual arrangement with the other vote holders of the
investee;
· Rights arising from other contractual arrangements; and
· The Group's voting rights and potential voting rights
The Group re-assesses whether or not it controls an investee if facts and
circumstances indicate that there are changes to one or more of the three
elements of control. Subsidiaries are fully consolidated from the date on
which control is transferred to the Group. They are deconsolidated from the
date that control ceases. Assets, liabilities, income and expenses of a
subsidiary acquired or disposed of during the period are included in the
consolidated financial statements from the date the Group gains control until
the date the Group ceases to control the subsidiary.
Investments in subsidiaries are accounted for at cost less impairment within
the Parent Company financial statements. Where necessary, adjustments are made
to the financial statements of subsidiaries to bring the accounting policies
used in line with those used by other members of the Group. All significant
intercompany transactions and balances between Group enterprises are
eliminated on consolidation.
2.4. Going concern
The Group Financial Statements have been prepared on a going concern basis.
The Directors are of the view that, the Group has funds to meet its planned
expenses over the next 12 months from the date of these financial statements.
As at 30 June 2024, the Group had cash and cash equivalents of £195,157.
The Directors have prepared cash flow forecasts to 31 December 2025, which
take into account the cost and operational structure of the Group and Parent
Company, property option income, debenture interest and any existing licence
and working capital requirements. These forecasts indicate that the Group and
Parent Company's cash resources are not sufficient to cover the projected
expenditure for a period of 12 months from the date of approval of these
financial statements. These forecasts indicate that the Group and Parent
Company, in order to meet their operational objectives, and meets their
expected liabilities as they fall due, will be required to raise additional
funds within the next 12 months.
In common with many entities in the resource sector, the Company will need to
raise further funds within the next 12 months in order to meet its expected
liabilities as they fall due. Whilst the Directors are confident that they
will be secure the necessary funding, the current conditions do indicate the
existence of a material uncertainty which may cast significant doubt about the
ability of the Group and parent company to continue as a going concern. No
adjustments have been made in the financial statements, should the Group not
be able to continue as a going concern.
2.5. Foreign currencies
a) Functional and presentation currency
Items included in the Financial Information are measured using the currency of the primary economic environment in which the entity operates (the 'functional currency'). The functional currency of the parent company is Pounds Sterling as is the functional currency of the UK subsidiary which is Imperial Minerals (UK) Limited. The functional currency of the Canadian subsidiary, Cloudbreak Exploration Inc. is Canadian Dollars. The functional currency of the US subsidiaries, Cloudbreak Discovery (US) Ltd. and Cloudbreak Energy (US) Ltd. is US Dollars. The Financial Information in The Group's overseas subsidiaries are translated in accordance with IAS 21 - The Effect of Changes in Foreign Exchange Rates.
During the year ended 30 June 2024, the Company disposed of Kudu Resources and
Kudu Resources Guinea as part of a settlement agreement.
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
year-end exchange rates of monetary assets and liabilities denominated in
foreign currencies are recognised in the Income Statement in other
comprehensive income. The financial statements are presented in Pounds
Sterling (£), the functional currency of Cloudbreak Discovery Plc is Pounds
Sterling, as is the functional currency of the UK subsidiary which is Imperial
Minerals (UK) Limited.
2.6. Fair value measurement
IFRS 13 establishes a single source of guidance for all fair value
measurements. IFRS 13 provides guidance on how to measure fair value under
IFRS when fair value is required or permitted. The resulting calculations
under IFRS 13 affected the principles that the Company uses to assess the fair
value, but the assessment of fair value under IFRS 13 has not materially
changed the fair values recognised or disclosed. IFRS 13 mainly impacts the
disclosures of the Company. It requires specific disclosures about fair value
measurements and disclosures of fair values, some of which replace existing
disclosure requirements in other standards.
2.7. Finance Income
Interest income is recognised using the effective interest method.
2.8. Other income
The other income of the Group comprises royalty income. It is measured at the
fair value of the consideration received or receivable after deducting
discounts and other withholding tax. The royalty income becomes receivable on
extraction and sale of the relevant underlying commodity, and by determination
of the relevant royalty agreement.
2.9. Cash and cash equivalents
Cash and cash equivalents comprise cash at hand and current and deposit
balances with banks and similar institutions, which are readily convertible to
known amounts of cash and which are subject to insignificant risk of changes
in value. This definition is also used for the Statement of Cash Flows.
2.10. Trade and other receivables and prepaids
Trade receivables are amounts due from third parties in the ordinary course of
business. If collection is expected in one year or less, they are classified
as current assets. If not, they are presented as non-current assets.
2.11. Royalty assets at fair value through profit and loss
Royalty financial assets are recognised or derecognised on completion date where a purchase or sale of the royalty is under a contract, and are initially measured at fair value, including transaction costs. All of the Group's royalty financial assets have been designated as at fair value through profit and loss ("FVTPL"). The royalty financial assets at FVTPL are measured at fair value at the end of each reporting period, with any fair value gains or losses recognised in the 'revaluation of royalty financial assets' line item of the income statement.
2.12. Investments in subsidiaries
Investments in Group undertakings are stated at cost, which is the fair value
of the consideration paid, less any impairment provision.
2.13. Intangible assets
Exploration and evaluation assets
The Group recognises expenditure as exploration and evaluation assets when it
determines that those assets hold potential to be successful in finding
specific resources. Expenditure included in the initial exploration and
evaluation assets relate to the acquisition of rights to explore,
topographical, geological, geochemical and geophysical studies, exploratory
drilling, trenching, sampling and activities to evaluate the technical
feasibility and commercial viability of extracting a resource. Capitalisation
of pre-production expenditure ceases when the prospective property is capable
of commercial production.
Exploration and evaluation assets are recorded and held at cost
Exploration and evaluation assets are not subject to amortisation, as such at the year-end all intangibles held have an indefinite life but are assessed annually for impairment. The assessment is carried out by allocating exploration and evaluation assets to cash generating units ('CGU's'), which are based on specific projects or geographical areas. The CGU's are then assessed for impairment using the criteria specified in IFRS 6.
Whenever the exploration for and evaluation of resources in cash generating units does not lead to the discovery of commercially viable quantities of resources and the Group has decided to discontinue such activities of that unit, the associated expenditures are written off to the Income Statement.
Exploration and evaluation assets recorded at fair-value on business
combination
Exploration assets which are acquired as part of a business combination are recognised at fair value in accordance with IFRS 3. When a business combination results in the acquisition of an entity whose only significant assets are its exploration asset and/or rights to explore, the Directors consider that the fair value of the exploration assets is equal to the consideration. Any excess of the consideration over the capitalised exploration asset is attributed to the fair value of the exploration asset.
2.14. Impairment of non-financial assets
Assets that have an indefinite useful life, for example, intangible assets not
ready to use, are not subject to amortisation and are tested annually for
impairment. 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.
2.15. Financial assets
The Group classifies its financial assets into one of the categories discussed below, depending on the purpose for which the asset was acquired. The Group's accounting policy for each category is as follows:
Fair Value through Profit or Loss (FVTPL)
Non-derivative financial assets comprising the Group's strategic financial
investments in entities not qualifying as subsidiaries or jointly controlled
entities. These assets are classified as financial assets at fair value
through profit or loss. They are carried at fair value with changes in fair
value recognised through the income statement. Where there is a significant or
prolonged decline in the fair value of a financial investment (which
constitutes objective evidence of impairment), the full amount of the
impairment is recognised in the income statement.
Due to the nature of these assets being unlisted investments or held for the
longer term, the investment period is likely to be greater than 12 months and
therefore these financial assets are shown as non-current assets in the
Statement of financial position.
Amortised Cost
These assets comprise the types of financial assets where 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.
The Group's financial assets measured at amortised cost comprise trade and other receivables, convertible debenture receivables and cash and cash equivalents in the consolidated statement of financial position. Cash and cash equivalents include cash in hand, deposits held at call with banks, other short term highly liquid investments with original maturities of three months or less, and - for the purpose of the statement of cash flows - bank overdrafts.
(a) Recognition and measurement
Amortised cost
Regular purchases and sales of financial assets are recognised on the trade
date at cost - the date on which the Group commits to purchasing or selling
the asset. 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.
Fair value through the profit or loss
Financial assets that do not meet the criteria for being measured at amortised
cost or FVTOCI are measured at FVTPL. The Group holds equity instruments that
are classified as FVTPL as these were acquired principally for the purpose of
selling.
Financial assets at FTVPL are measured at fair value at the end of each
reporting period, with any fair value gains or losses recognised in profit or
loss. Fair value is determined by using market observable inputs and data as
far as possible. Inputs used in determining fair value measurements are
categorised into different levels based on how observable the inputs used in
the valuation technique utilised are (the 'fair value hierarchy'):
- Level 1: Quoted prices in active markets for identical items (unadjusted)
- Level 2: Observable direct or indirect inputs other than Level 1 inputs
- Level 3: Unobservable inputs (i.e. not derived from market data).
The classification of an item into the above levels is based on the lowest
level of the inputs used that has a significant effect on the fair value
measurement of the item. Transfers of items between levels are recognised in
the period they occur.
The Group measures its investments in quoted shares using the quoted market
price. For shares held in unlisted entities, the share price is based on the
current financial and operational performance, as well as taking the potential
of future plans into account. Unlisted investments whose fair value cannot be
measured reliably, are measured at cost less impairment.
(b) Impairment of financial assets
The Group recognises an allowance for expected credit losses (ECLs) for all
debt instruments not held at fair value through profit or loss. ECLs are based
on the difference between the contractual cash flows due in accordance with
the contract and all the cash flows that the Group expects to receive,
discounted at an approximation of the original EIR. The expected cash flows
will include cash flows from the sale of collateral held or other credit
enhancements that are integral to the contractual terms.
ECLs are recognised in two stages. For credit exposures for which there has
not been a significant increase in credit risk since initial recognition, ECLs
are provided for credit losses that result from default events that are
possible within the next 12-months (a 12-month ECL). For those credit
exposures for which there has been a significant increase in credit risk since
initial recognition, a loss allowance is required for credit losses expected
over the remaining life of the exposure, irrespective of the timing of the
default (a lifetime ECL).
For trade receivables (not subject to provisional pricing) and other
receivables due in less than 12 months, the Group applies the simplified
approach in calculating ECLs, as permitted by IFRS 9. Therefore, the Group
does not track changes in credit risk, but instead, recognises a loss
allowance based on the financial asset's lifetime ECL at each reporting date.
Impairment provisions for receivables from related parties and loans to related parties 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, based on analysis of internal or external information. 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.
The Group considers a financial asset in default when contractual payments are
180 days past due. However, in certain cases, the Group may also consider a
financial asset to be in default when internal or external information
indicates that the Group is unlikely to receive the outstanding contractual
amounts in full before taking into account any credit enhancements held by the
Group. A financial asset is written off when there is no reasonable
expectation of recovering the contractual cash flows and usually occurs when
past due for more than one year and not subject to enforcement activity.
At each reporting date, the Group assesses whether financial assets carried at
amortised cost are credit impaired. A financial asset is credit-impaired when
one or more events that have a detrimental impact on the estimated future cash
flows of the financial asset have occurred.
(d) Derecognition
The Group derecognises a financial asset only when the contractual rights to
the cash flows from the asset expire, or when it transfers the financial asset
and substantially all the risks and rewards of ownership of the asset to
another entity.
On derecognition of a financial asset measured at amortised cost, the
difference between the asset's carrying amount and the sum of the
consideration received and receivable is recognised in profit or loss. This is
the same treatment for a financial asset measured at FVTPL.
2.16. Financial Investments
Non-derivative financial assets comprising the Group's strategic financial investments in entities not qualifying as subsidiaries, associates or jointly controlled entities. These assets are classified as financial assets at fair value through profit or loss. They are carried at fair value with changes in fair value recognised through the income statement. Where there is a significant or prolonged decline in the fair value of a financial investment (which constitutes objective evidence of impairment), the full amount of the impairment is recognised in the income statement.
Listed investments are valued at closing bid price on 30 June 2024. Unlisted investments that are not publicly traded and whose fair value cannot be measured reliably, are measured at cost less impairment.
2.17. 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;
· "Reverse asset acquisition reserve" represents the retained
losses of the Company before acquisition and the Company equity at reverse
acquisition.
· "Other reserves" represents the foreign currency translation
reserve, warrant reserve and share option reserve where;
o "Foreign currency translation reserve" represents the translation
differences arising from translating the financial statement items from
functional currency to presentational currency;
o "Warrant reserve" represents share warrants awarded by the Group;
o "Share option reserve" represents share options awarded by the Group;
· "Retained deficit or losses" represents retained losses.
2.18. Share based payments
The Group operates an equity-settled, share-based scheme under which the Group receives services from employees or contractors as consideration for equity instruments (options and warrants) of the Group. The fair value of the third-party suppliers' services received in exchange for the grant of the options is recognised as an expense in the Income Statement or charged to equity depending on the nature of the service provided. The value of the employee services received is expensed in the Income Statement and its value is determined by reference to the fair value of the options granted:
• including any market performance conditions;
• excluding the impact of any service and non-market performance vesting conditions (for example, profitability or sales growth targets, or remaining an employee of the entity over a specified time period); and
• including the impact of any non-vesting conditions.
The fair value of the share options and warrants are determined using the Black Scholes valuation model.
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.
2.19. Taxation
No current tax is payable for the year ended 30 June 2024 in view of the
losses to date for all entities in the Group (2023: £12,178).
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 will be recognised for taxable temporary differences
arising on investments in subsidiaries 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
The Group's activities expose it to a variety of financial risks: market risk
(foreign currency risk, price risk and interest rate 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 Canadian based management team under
policies approved by the Board of Directors.
3.1.Treasury policy and financial instruments
During the years under review, the financial instruments were cash and cash
equivalents, shares in listed and unlisted companies and other receivables
which were or will be required for the normal operations of the Group.
The Group operates informal treasury policies which include ongoing
assessments of interest rate management and borrowing policy. The Board
approves all decisions on treasury policy.
The risks arising from the Group's financial instruments are liquidity and
interest rate risk. The Directors review and agree policies for managing these
risks and they are summarised below:
Unlisted investments
The Company is required to make judgments over the carrying value of
investments in unquoted companies where fair values cannot be readily
established and evaluate the size of any impairment required. It is important
to recognise that the carrying value of such investments cannot always be
substantiated by comparison with independent markets and, in many cases, may
not be capable of being realised immediately. Management's significant
judgement in this regard is that the value of their investment represents
their cost less previous impairment.
Market risk & foreign currency risk
The Group is exposed to market risk, primarily relating to interest rate and
foreign exchange movements. The Group does not hedge against market or foreign
exchange risks as the exposure is not deemed sufficient to enter into forwards
or similar contracts.
Credit risk
Credit risk arises from cash and cash equivalents as well as outstanding
receivables. The amount of exposure to any individual counter party is subject
to a limit, which is assessed by the Board.
The Group considers the credit ratings of banks in which it holds funds in
order to reduce exposure to credit risk.
Liquidity risk and interest rate risk
The Group seeks to manage financial risk, to ensure sufficient liquidity is
available to meet foreseeable needs and to invest cash assets safely and
profitably. This is achieved by the close control by the Directors of the
Group in the day-to-day management of liquid resources. Cash is invested in
deposit accounts which provide a modest return on the Group's resources whilst
ensuring there is limited risk of loss to the Group.
3.2. Capital risk management
The Group's objectives when managing capital are to safeguard the Group's
ability to continue as a going concern in order to provide returns for
shareholders and benefits for other stakeholders and to maintain an optimal
capital structure to reduce the cost of capital.
4. Critical accounting estimates and judgements
The preparation of the Financial Information in conformity with UK adopted
IASs 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 Information and the reported
amount of expenses during the year. Actual results may vary from the estimates
used to produce this Financial Information.
Estimates and judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances.
Significant items subject to such estimates and assumptions include, but are
not limited to:
Share based payment transactions
The Group has made awards of options and warrants over its unissued share
capital to certain Directors and employees as part of their remuneration
package. Certain warrants have also been issued to shareholders as part of
their subscription for shares and to suppliers for various services received.
The valuation of these options and warrants involves making a number of
critical estimates relating to price volatility, future dividend yields,
expected life of the options and forfeiture rates.
Classification of royalty arrangements: initial recognition and subsequent
measurement
The Directors must decide whether the Group's royalty arrangements should be
classified as:
· Intangible assets in accordance with IAS 38 Intangible
Assets; or
· Financial assets in accordance with IFRS 9 Financial
Instruments
The Directors use the following selection criteria to identify the
characteristics which determine which accounting standard to apply to each
royalty arrangement:
Type 1 - Intangible assets: Royalties, are classified as intangible assets by
the Group. The Group considers the substance of a simple royalty to be
economically similar to holding a direct interest in the underlying mineral
asset. Existence risk (the commodity physically existing in the quantity
demonstrated), production risk (that the operator can achieve production and
operate a commercially viable project), timing risk (commencement and quantity
produced, determined by the operator) and price risk (returns vary depending
on the future commodity price, driven by future supply and demand) are all
risks which the Group participates in on a similar basis to an owner of the
underlying mineral licence. Furthermore, in a royalty intangible, there is
only a right to receive cash to the extent there is production and there are
no interest payments, minimum payment obligations or means to enforce
production or guarantee repayment. These are accounted for as intangible
assets under IAS-38.
Type 2 - Financial royalty assets (royalties with additional financial
protection): In certain circumstances where the risk is considered too high,
the Group will look to introduce additional protective measures. This has
taken the form of minimum payment terms. Once an operation is in production,
these mechanisms generally fall away such that the royalty will display
identical characteristics and risk profile to the intangible royalties;
however, it is the contractual right to enforce the receipt of cash which
results in these royalties being accounted for as financial assets under IFRS
9. There are currently no royalties classified as financial royalty assets.
Estimated impairment of convertible loan notes receivable & Convertible
debenture receivables
Anglo African Minerals Plc ('AAM')
The Group has assessed whether the AAM convertible loan notes receivable which
has been previously fully impaired in the prior year, should remain impaired
in the current year or be reversed. They have reassessed this asset and
determined that there are no conditions to reverse the impairment.
G2 Energy Corp. ("G2")
The Group also assessed whether the G2 convertible debenture receivable should
be impaired and based on the current production levels and the programme at
the Masten Unit Energy Project, they have determined it should not be impaired
as G2, through the funding from the Company, now have the funds required to
undertake the exploration activity and advance the project. The terms of the
debenture are still being met by both parties and G2 are expected to pay the
necessary interest payments. The directors assessed this debenture in
accordance with IFRS standards and concluded it is a financial asset accounted
for as amortised cost as the financial asset is held within a business model
with the objective to hold and collect the contractual cash flows which is in
the form of interest and principal payments. As part of the debenture
agreement, the Group received a 3.25% Overriding Royalty Interest in the
project which has limited production and revenues. In accordance with IFRS the
directors have assessed the royalty interest and accounted for it as
intangible assets in accordance with IAS 38 because there is only a right to
receive cash to the extent there is production and there are no interest
payments, minimum payment obligations or means to enforce production or
guarantee repayment. These are accounted for as intangible assets under IAS
38. The directors considered the fair value of the royalty assets which they
receive in exchange as part of the debenture agreement for which they did not
pay any consideration. Fair value is determined based on discounted cash flow
models (and other valuation techniques) using assumptions considered to be
reasonable and consistent with those that would be applied by a market
participant. The determination of assumptions used in assessing fair values is
subjective and the use of different valuation assumptions could have a
significant impact on financial results. The current royalty covers a very
small production site. During the year ended 30 June 2024, £39,000 was
received, with a total of £98,000 being received to date from this royalty.
Following their assessment, the directors concluded that the fair value of the
royalty agreement was not material and has not been recognised as intangible
asset. The group is in regular communication with G2 and is monitoring the
results of its exploration activities that will be undertaken as the result of
the funding by the Group to G2.
Texas Legacy Exploration LLC ("Texas Legacy")
The Group assessed whether the Texas Legacy convertible debenture receivable
should be impaired. After review from management, it was agreed that the
debenture be impaired in full as it was no longer recognised as a debenture
and was converted to royalty. As a result of the impairment, the initial $600k
payment was no longer considered payable. However, royalty payments will be
received should production commence in the future.
Unlisted investments
The Group is required to make judgments over the carrying value of investments
in unquoted companies where fair values cannot be readily established and
evaluate the size of any fair value movement required. It is important to
recognise that the carrying value of such investments cannot always be
substantiated by comparison with independent markets and, in many cases, may
not be capable of being realised immediately. Management's significant
judgement in this regard is that the value of their investment represents the
entities financial and operational performance, as well as their future
potential. This valuation method was considered the most appropriate by
management due to the limited information available related to the unlisted
investments as at 30 June 2024. Management have assessed whether any fair
value movement on the unlisted investments is required at 30 June 2024 and
have fully impaired one of their investments due to the lack of reported
activity and updates from the company.
Recovery of other receivables
Included in other receivables is an amount of £140,000 as at 30 June 2024 in
respect of unpaid ordinary share capital issued on 3 June 2021. The Directors
plan to take action to recover the amount owed and believe that the amount
will be recovered in full in due time, but because this outcome is not certain
and the balance has been owed for an extended period, a provision for bad debt
for the full amount has been implemented. This was recognised in the prior
year ended 30 June 2023 and still deemed appropriate to include in the year
ended 30 June 2024.
Valuation of exploration and evaluation assets
Exploration and evaluation costs have a carrying value of 30 June 2024 of
£80,870 (2023: £236,518). Such assets have an indefinite useful life as the
Group has the right to renew exploration licenses or options and the asset is
only amortised once extraction of the resource commences. The value of the
Group's exploration and evaluation expenditure will be dependent upon the
success of the Group in discovering economic and recoverable resources,
especially in the countries of operation where political, economic, legal,
regulatory and social uncertainties are potential risk factors. The future
revenue flows relating to these assets is uncertain and will also be affected
by competition, relative exchange rates and potential new legislation and
related environmental requirements. The Group's ability to continue its
exploration programs and develop its projects is dependent on future
fundraisings. The ability of the Group to continue operating within some of
the jurisdictions contemplated by management is dependent on a stable
political environment which is uncertain based on the history of the country.
This may also impact the Group's legal title to assets held which would affect
the valuation of such assets. There have been no changes made to any past
assumptions.
The Directors have undertaken a review to assess whether circumstances exist
which could indicate the existence of impairment as follows:
• The Group no longer has title to mineral leases or the title will expire
in the near future and is not expected to be renewed.
• A decision has been taken by the Board to discontinue exploration due to
the absence of a commercial level of reserves.
• Sufficient data exists to indicate that the costs incurred will not be
fully recovered from future development and participation.
• No further exploration or evaluation is planned or budgeted.
Following their assessment, the Directors concluded that an impairment charge
of £107,684 (2023: £12,636) was necessary on the Northern Treasure property
because the claims on the property had lapsed, and the Directors agreed that
it shouldn't be renewed.
5. Intangible assets
As at June 30, 2024, the Group's exploration and evaluation assets are as
follows:
Group
Exploration & Evaluation Assets 30 June 2024 30 June 2023
£ £
South Timmins, British Columbia 1 1
Atlin West Property 1 1
Yak Property 1 1
Rizz Property 1 1
Icefall Property 1 1
Northern Treasure Property - 111,023
Rupert Property, British Columbia 1 1
Apple Bay Property, British Columbia 1 1
Foggy Mountain, British Columbia - 43,220
Bobcat Property, Idaho 46,733 48,183
Elk Creek, Pennsylvania 34,130 34,085
As at June 30 80,870 236,518
As at June 30, 2024, the Group's reconciliation of exploration and evaluation
assets are as follows:
Group
Exploration & Evaluation Assets 30 June 2024 30 June 2023
£ £
Cost
As at 1 July 236,518 78,694
Additions - 222,667
Disposals (41,919) (47,206)
Impairments (107,684) (12,636)
Forex movement (6,045) (5,001)
As at June 30 80,870 236,518
South Timmins Property, Canada
During the year ended June 30, 2021, the Group paid $27,540 CAD (£16,080) in
asset staking costs to acquire twelve mineral titles in Ontario, Canada known
as the South Timmins property.
On 23 September 2021, the Group entered into an option agreement with 1315956
BC Ltd, under which 1315956 BC Ltd may acquire up to a 100% interest in the
Group's South Timmins property subject to a 1% net smelter return ("NSR") to
the Group. In order for 1315956 BC Ltd to fully exercise the option on the
South Timmins Property, they must pay the Group an aggregate of $495,000 CAD,
issue 2,250,000 common shares of 1315956 BC Ltd and incur exploration expenses
of $1,515,000 with a minimum of $265,000 CAD in the first year.
To date, the Group has received cash payments of $270,000 (£157,579) and
500,000 shares in relation to the option payments due under the agreement.
At the year ended 30 June 2024, a total balance of $75,000 CAD (£43,367) was
owed to the group in relation to the option payments due under the agreement.
750,000 shares were also outstanding during the period as part of the
agreement, which are yet to be received.
After a review from management related to recoverability, the total balance
owed was written off as bad debt.
Atlin West, Canada
On August 9 2021, the Group entered into an option agreement with 1315843 BC
Ltd to purchase 100% of the rights to the Atlin West Project located in
British Columbia, Canada. To earn a 100% interest, 1315843 BC Ltd would have
to make aggregate cash payments of $700,000 CAD, issue 8,000,000 shares in
1315843 BC Ltd and will make payments of $325,000 over a three-year period to
Cloudbreak. Upon completion of the work Cloudbreak would transfer 100%
interest. Cloudbreak will retain a net 2% NSR. The Group has previously
received cash payments of $100,000 CAD (£79,086) and 3,000,000 shares in
relation to the option payments due under the agreement.
At the year ended 30 June 2024, a total balance of $75,000 CAD (£43,367) was
owed to the group in relation to the option payments due under the agreement.
2,500,000 shares were also due during the period as part of the agreement.
After a review from management related to recoverability, the total balance
owed was written off as bad debt.
Yak, Canada
On October 13 2021, the Group entered into an option agreement with Moonbound
Mining Ltd ('Moonbound'). In respect of the Yak Project located in British
Columbia, Canada. Moonbound would issue Cloudbreak 2,700,000 common shares and
make aggregate cash payments of $145,000 CAD over a three-year period.
Additionally, Moonbound will commit to spending up to $700,000 CAD in
exploration expenditure on the property and enter into a public transaction
within six months of the agreement. Upon completion of the obligations,
Cloudbreak will transfer 100% interest and retain a net 2% NSR. The Group has
previously received cash payments of $35,000 CAD (£20,903) and 700,000 shares
in relation to the option payments due under the agreement.
At the year ended 30 June 2024, the total amount outstanding was $35,000 CAD
(£20,521). After a review from management related to recoverability, the
total balance owed was written off as bad debt.
Rizz, Canada
On February 25 2022, the Group entered into an option agreement with 1311516
BC Ltd in respect of the Rizz Project in British Colombia, Canada. 1311516 BC
Ltd will issue 3,000,000 common shares to Cloudbreak and make an aggregate of
$120,000 CAD in cash payments to the Group. Additionally, 1311516 BC Ltd will
commit to spending up to $750,000 CAD in exploration expenditure on the
property over three years. This will need to be done to earn an interest of
75% in the project. Upon completion of the terms, Cloudbreak and 1311516 BC
Ltd will enter a joint venture in which each party will be responsible for its
pro-rata share of expenditures on the project. Up to 30 June 2022, the Group
received cash payments of $25,000 CAD and 3,000,000 shares in relation to the
option payments due under the agreement.
At 30 June 2023, $25,000 CAD (£14,931) was due as a cash payment and is still
owed to the Group of in relation to the option payments due under the
agreement. After a review from management related to recoverability, the
balance owed was written off as bad debt.
At the year ended 30 June 2024, the total amount outstanding was $50,000 CAD
(£29,316).
After a review from management related to recoverability, the balance owed was
written off as bad debt.
Icefall, Canada
On March 3 2022, the Group entered into an option agreement with 1311516 BC
Ltd in respect of the Icefall Project in British Colombia, Canada. 1311516 BC
Ltd will issue 2,000,000 common shares to Cloudbreak's subsidiary Cloudbreak
Exploration Inc. and make an aggregate of $120,000 CAD in cash payments to the
Group. Additionally, 1311516 will commit to spending up to £700,000 CAD in
exploration expenditure on the property over three years. This will need to be
done to earn an interest of 75% in the project. Upon completion of the terms
Cloudbreak and 1311516 BC Ltd will enter a joint venture in which each party
will be responsible for its pro-rata share of expenditures on the project. Up
to 30 June 2022, the Group has received cash payments of $25,000 CAD and
2,000,000 shares in relation to the option payments due under the agreement.
During the year ended 30 June 2023 $25,000 CAD (£14,931) was due as a cash
payment and is still owed to the Group in relation to the option payments due
under the agreement. After a review from management related to recoverability,
the balance owed was written off as bad debt.
At the year ended 30 June 2024, the total amount outstanding was $50,000 CAD
(£29,316). After a review from management related to recoverability, the
balance owed was written off as bad debt.
Northern Treasure, Canada
During 2022, the Group staked the Northern Treasure property for $50,645 CAD
which is located in Northern British Columbia.
On 28 October 2022, Cloudbreak announced that Precision GeoSurveys has
completed a high-resolution helicopter-borne magnetic survey over the Northern
Treasure Project in British Columbia.
Following their assessment, the Directors impaired the Northern Treasure
property in full after the claims on the property lapsed, and the Directors
agreed that it shouldn't be renewed.
Rupert, Canada
On September 11, 2018, the Group entered into an asset purchase agreement with
a company controlled by a director of the Group and two unrelated persons to
purchase the Rupert Property, located in British Columbia, Canada. As
consideration for the property, the Group issued 2,000,000 common shares
valued at $100,000 CAD (£59,000) and granted a 2% NSR. At any time, 1% of the
NSR can be purchased by the Group for $1,500,000 CAD. Of the common shares
issued to acquire the property, 1,000,000 were issued to a company that was
controlled by a director of the Group. The Group also agreed to incur
aggregate expenditures on the property of $800,000 ($100,000 CAD - £59,000
incurred).
On December 11, 2020, the Group sold the Rupert Property to Buscando Resources
Corp. ("Buscando"), a company with a director in common. Payments to be
received by the Group are as follows:
• $150,000 CAD in total cash payments with $25,000 CAD (£14,750) on
closing (received), $50,000 CAD on or before 12 months after Buscando is
listed on a public exchange (still owed at 30 June 2024), $75,000 CAD on or
before 24 months after Buscando is listed on a public exchange;
• 3,750,000 shares in total issued to the Group with 1,000,000
shares issued on closing (received and valued at $50,000 CAD - £29,500 in the
year ended 30 June 2023), 1,250,000 on or before 12 months after Buscando is
listed on a public exchange (received and valued at $125,000 CAD - £74,653 in
the year ended 30 June 2023), 1,500,000 on or before 24 months after Buscando
is listed on a public exchange; and
• $200,000 expenditures incurred on the property with $100,000 CAD
on or before 12 months after Buscando is listed on a public exchange, $100,000
CAD on or before 24 months after Buscando is listed on a public exchange.
As a result of the sale to Buscando, the original vendors waived the
exploration commitments required by the Group under the September 11, 2018,
agreement.
As at the 30 June 2024, this asset was fully impaired.
Stateline, United States
On February 9 2022, Cloudbreak and Alianza Minerals entered into an option
agreement with Volt Lithium Corp (formerly known as Allied Copper Corp) in
respect of the Stateline Project in Colorado, United States. Volt Lithium will
issue the alliance (Cloudbreak and Alianza Minerals) 4,250,000 common shares
over a three-year period and make aggregate cash payments of $315,000 CAD
($40,000 CAD paid) with a further $50,000 CAD due on closing. Additionally,
Volt Lithium will commit to spending up to £3,750,000 CAD in exploration
expenditure on the property over three years. The alliance will retain a net
2% NSR, not subject to a buy down provision.
On August 9 2022, Cloudbreak and Alianza Minerals agreed to amend the terms of
the Stateline option agreement with Volt Lithium entered into on 9 February
2022. Under the modified terms, Volt Lithium will be able to delay the
issuance of shares and warrants whilst keeping the agreement in good
standing. Outstanding Volt Lithium shares will become payable to Alianza and
Cloudbreak as either party reduces its equity holding through sale or other
type of divesture, or if additional shares are issued in Volt Lithium which
would dilute either party's holdings. Up to 30 June 2022, the Group has
received cash payments of $65,000 CAD and 250,000 shares in relation to the
option payments due under the agreement.
To date, the Group has received cash payments of $25,000 CAD (£14,931) and
250,000 shares in relation to the option payments due under the agreement.
On 11 August 2023, the option agreement was terminated by Volt Lithium so no
further payments will be received. No amount was outstanding at 30 June 2024.
Foggy Mountain, Canada
In April 2022, the Group staked the Foggy Mountain property which is located
in Central British Columbia.
On 19 October 2022, Cloudbreak announced that that it has completed a
reconnaissance surface programme at the property.
During the year ended 30 June 2024, the Foggy Mountain Property was disposed
as part of a settlement agreement.
Bobcat, United States
On 6 December 2022, the Group entered a holding and cost share agreement with
Longford Capital Corp pertaining to the holding, exploration, operations and
development of the Bob Cat property in Idaho. The Group acquired 50% interest
in the property for $60,000 USD (£47,517).
Elk Creek, United States
On 21 November 2022, the Group acquired an oil and gas lease for $43,157 USD
(£34,178), for a property based in Pennsylvania, USA. The lease gives the
Group full permission to conduct any and all due diligence on the leased
premises, which includes inspections, tests, environmental assessments, soil
studies, surveys and more.
6. Investments in subsidiary undertakings
Company
30 June 2024 30 June 2023
£ £
Shares in Group Undertakings
At beginning of period 1,997,048 7,252,886
Shares transferred to CEI - (5,000)
Impairments (1,555,612) (6,056,544)
At end of period 441,436 1,191,342
(Repayments)/Loans to group undertakings (422,140) 805,706
Total 19,296 1,997,048
Investments held by Company
Company
30 June 2024 30 June 2023
£ £
At beginning of the period 43,046 68,056
Shares transferred to CEI - (68,056)
G2 Energy Corp 47,525 58,007
Lonestar Lithium Ltd 316,343 -
Fair value movement (150,354) (14,961)
Total 256,560 43,046
Subsidiaries
Details of the subsidiary undertakings at 30 June 2024 are as follows:
Name of subsidiary Registered office address Country of incorporation and place of business Proportion of ordinary shares held by parent (%) Proportion of ordinary shares held by the Group (%) Nature of business
Imperial Minerals (UK) Limited 6th Floor, 60 Gracechurch United Kingdom 100% 100% Dormant
Street, London, EC3V 0HR
Cloudbreak Exploration Inc. Suite 520/999 West Hastings Street, Vancouver BC V6C2W2 Canada 100% 100% A mineral property project generator
Cloudbreak Discovery (US) Ltd. 1209 Orange Street, Wilmington, New Castle, Delaware, 19801 USA 100% 100% Mineral exploration projects
Cloudbreak Energy (US) Ltd. 1209 Orange Street, Wilmington, New Castle, Delaware, 19801 USA 100% 100% Oil and Gas acquisitions
During the year ended 30 June 2024, Kudu Resources Limited and Kudu Resources
Guinea were disposed as part of a settlement agreement with Cronin Services.
The terms of the agreement also included the transfer of 950,000 Temas
Resources shares, 1,700,000 shares in Buscando Resources Corp., in addition to
the Foggy Mountain property being transferred.
During the year ended 30 June 2024, the loan and investment balances of the
Company held in Cloudbreak Exploration Inc. ('CEI') were impaired by a total
of £1,555,611. This was agreed after reviewing the net asset value of the
subsidiary and adjusting the value of the investment and loan balance with CEI
accordingly.
Investments held by Group
Financial assets at fair value through profit or loss are as follows:
Level 1 Level 2 Total
£ £ £
Level 3
£
30 June 2023 771,725 - 119,530 891,255
Additions 363,868 - - 363,868
Disposals (255,612) - - (255,612)
Fair value changes (394,009) - - (394,009)
Realised loss on investments (71,071) - - (71,071)
Foreign exchange 2,273 - (3,844) (1,571)
Impairment - - (115,643) (115,643)
30 June 2024 417,174 - 43 417,217
As at June 30, 2024, investments were classified as held for trading and
recorded at their fair values based on quoted market prices (if available).
Investments that do not have quoted market prices are measured at cost due to
the limited amount of information available related to the fair value of the
investments.
Calidus Resources Corp. and Canary Biofuels Inc. are Level 3 investments, all
other investments listed below are Level 1.
Temas Resources Corp.
On September 23, 2020, the Group sold its La Blache property to Temas
Resources Corp. ("Temas") for a cash payment of $30,000 CAD (£17,517) and
10,000,000 Temas shares which had a value at the time of $2,000,000 CAD
(£1,167,815). The Group retained a 2% NSR on the La Blache property. The
Temas shares are subject to pooling restrictions with 2,500,000 Temas shares
released March 23, 2021, and 7,500,000 Temas released September 23, 2021. In
2022, the Group sold 29,000 shares for $2,020 CAD (£1,290).
During the year ended 30 June 2023 the Group sold 457,000 of their shares in
Temas Resources for a total of $28,474 CAD (£17,006) and had a share
consolidation with a ratio of 9:1. At 30 June 2023, the fair value of the
Temas Resources shares was $147,996 CAD (£88,230).
During the year ended 30 June 2024, the Group sold all of their shares in
Temas Resources for a total of $63,531 CAD (£36,735).
Norseman Silver Inc.
On 23 August 2021, the Group received 380,000 shares in Norseman from the
option agreement for the Silver Switchback property for $129,200 CAD
(£74,235).
On 31 May 2021, the Group received 1,000,000 shares in Norseman from the
option agreement for the Caribou property for $170,000 CAD (£108,575).
During the year ended 30 June 2022, the Group sold 1,766,500 shares in
Norseman for a total of $352,002 CAD (£208,888).
During the year ended 30 June 2023, the Group received 1,200,000 warrants and
sold their shares in Norseman for a total of $528,200 CAD (£315,455). During
the year ended 30 June 2024, the 1,200,000 warrants expired.
There was no additional activity during the year ended 30 June 2024 from the
Group related to their investment in Norseman Silver.
Buscando Resources Corp.
On December 31, 2020, the Group sold the Rupert property to Buscando, in
exchange for 1,000,000 shares in Buscando at a value of $50,000 CAD
(£29,195).
During the year ended 30 June 2022, the Group purchased an additional 50,000
shares in Buscando for a total of $6,840 CAD (£4,305)
During the year ended 30 June 2023, the Group purchased 10,000 shares for a
total of $1,080 CAD (£645) and received 1,250,000 shares for $0.10 CAD each
from the Rupert Property option agreement.
At 30 June 2023, fair value of the Buscando shares was $246,000 CAD
(£146,657).
During the year ended 30 June 2024, the Group received 150,000 shares from
Buscando Resources, and sold 1,7000,000 for a total of $59,500 CAD (£34,405)
as part of the settlement agreement outlined in note 6.
At 30 June 2024, fair value of the Buscando shares is $106,400 CAD (£61,524).
Linceo Resources Corp.
On August 17, 2019, the Group sold the Granny Smith and Fuji mineral claims to
Linceo Media Group ("Linceo"), a company with a director in common, for 4,000
shares in Linceo at a value of $47,600 CAD (£27,793) and retained a 2.5% NSR
on each property. During the year ended June 30, 2021, the Group impaired the
shares in Linceo to $1. Management assessed the value at year end and
confirmed there is no further changes to the fair value of the Linceo shares.
AAM shares
On June 2, 2021, the Group acquired 12,500,000 AAM share purchase warrants
that had a conversion price of $0.03 USD and expiry date of July 1, 2021 and
acquired 11,000,000 AAM ordinary shares. The Group issued 1,200,000 ordinary
shares to acquire the 12,500,000 AAM share purchase warrants (£36,000 value)
and 3,520,000 ordinary shares (£105,600 value) to acquire the 11,000,000 AAM
ordinary shares. The warrants expired on July 1, 2021, with the £36,000
impaired to $1. During the year ended June 30, 2021, the Group impaired the
shares in AAM to $1. Management assessed the value at year end and confirmed
there is no further changes to the fair value of the AAM shares.
Calidus Resources Corp.
On September 1, 2021, the Group received 500,000 shares from Calidus Resources
Corp. for the option agreement for the South Timmins property for $500 CAD
(£320).
This is a level 3 investment, with no public information available so
management have kept the value at cost.
Volt Lithium Corp (formerly known as Allied Copper Corp.)
On 3 February 2022, the Group received 1,000,000 shares from Volt Lithium
Corp. from the option agreement for the Klondike project for $225,000
(£130,661).
During the year ended 30 June 2023, the Group sold 959,500 shares in Volt
Lithium Corp. for a total of $249,082 CAD (£148,758).
At 30 June 2023, fair value of the Volt Lithium Corp. shares was $75,530 CAD
(£45,029).
During the year ended 30 June 2024, the Group sold all of their shares in Volt
Lithium Corp. for a total of $70,170 CAD (£40,574).
Canary Biofuels Inc.
On 28 June 2022, the Group purchased 59,700 shares from Canary Biofuels Inc.
for $200,095 (£127,753). This is a level 3 investment, with no public
information available so management have kept the value at cost.
At 30 June 2023, the cost of the Canary Biofuels Inc. shares was $200,095 CAD
(£119,230). This value remained the same for the year ended 30 June 2024.
After review from management, the investment in Canary Biofuels Inc. was
impaired in full in the year ended 30 June 2024 due to the lack of activity
within the company.
Lithos Energy Inc. (formerly known as Alchemist Mining Inc.)
On 14 January 2022, the Group purchased 1,250,000 shares from Lithos Energy
Inc. for $93,750 (£54,184).
During the year ended 30 June 2023, the Group sold 305,000 shares in Lithos
Energy for a total of $106,022 (£63,319). At 30 June 2023, fair value of the
Lithos Energy shares was $614,250 (£366,194).
During the year ended 30 June 2024, the Group sold 614,500 shares in Lithos
Energy for a total of $248,860 (£155,463). At 30 June 2024, fair value of the
Lithos Energy shares was $94,193 (£54,465).
1311516 B.C. Ltd
On 3 March 2022, the Group received 3,000,000 shares from 1311516 B.C. Ltd
from the option agreement for the Rizz property for $5,010 CAD (£2,963).
On 9 March 2022, the Group received 2,000,000 shares from 1311516 B.C. Ltd
from the option agreement for the Icefall property for $3,340 CAD (£1,978).
Management assessed the value at year end and confirmed there is no further
changes to the fair value of the 1311516 B.C. Ltd shares.
G2 Energy Corp.
During the year ended 30 June 2023, the Group received 6,017,000 shares from
G2 Energy Corp. 5,110,000 of these shares were received in place of the
quarterly interest that was due to be paid to the Group as part of the
debenture agreement entered on 31 May 2022, and 907,000 of the shares were
received for legal fees covered by the Group, for G2.
At 30 June 2023, fair value of the G2 Energy Corp. shares was $72,204 CAD
(£43,046).
During the year ended 30 June 2024, G2 Energy Corp had a share consolidation
with a ratio of 5:1. At 30 June 2024, fair value of the G2 Energy Corp. shares
is $33,381 CAD (£19,302).
Lonestar Lithium Ltd
During the year the Company acquired 2,000,000 shares in Lonestar Lithium Ltd
at a valued price of $0.2 USD per share as part of sale of the Group's
knowledge and lithium datasets in the USA (Pennsylvania and Texas).
7. Royalty Asset
Apple Bay Property, Canada
On April 5, 2017, the Group purchased a 1.50% production royalty on the Apple
Bay property located in British Columbia, Canada. The production royalty was
purchased for 3,000,000 shares of the Group at a deemed value of $0.10 CAD
(£0.058) per share from a company controlled by the CEO of the Group. During
the year ended June 30, 2021, the Group determined that the royalty was
impaired and reduced the balance to £1. As at June 30, 2024, included in
Royalty Assets is £1 (June 30, 2023 - £1) attributed to the Apple Bay
property.
8. Debentures Receivable
Group
30 June 2024 30 June 2023
£ £
Opening 2,059,060 1,657,900
Additions - 503,499
Royalty payments related to previous year - (11,233)
Fair Value Movement (3,204) (91,106)
Impairment (474,428) -
At end of period 1,581,428 2,059,060
Masten Unit, United States
On 31 May 2022, the Group entered into an agreement with G2 Energy Corp.
('G2') on the Masten Unit Energy Project located in Cochran County Texas,
United States. Whereby the Company will provide G2 with a $2,000,000 USD
debenture on a two-year term in exchange for a 3.25% Overriding Royalty
Interest in the Project. G2 will pay 12% per annum interest to the Company,
calculated and paid quarterly in cash or shares at the discretion of the
Company. As part of the agreement, the Group received 6,500,000 warrants for
G2, however management have deemed that these warrants have no value at this
stage as the assets held by G2 are predominantly made up of the early-stage
exploration assets on which they have received from the Company. The group is
in regular communication with G2 and is monitoring the results of its
exploration activities that will be undertaken as the result of the funding by
the Group to G2. On 30 June 2024, the residual value of the debenture in pound
sterling was £1,581,428.
Butte Strawn, United States
On 16 August 2022, the Company entered into an agreement with Iron Forge
Holdings (III) Ltd (IF3). Whereby the company will provide IF3 with a
$1,500,000 USD debenture for the Butte Strawn Energy Project located in Irion
County, Texas. $500,000 USD was paid on signing. IF3 will pay 12.5% per annum
interest to the Company, calculated and paid quarterly in cash or shares at
the discretion of the Company. The Company received 6,000,000 warrants with a
strike price of $0.35 CAD with a three-year term from financial close. On 16
June 2023, it was agreed that the principal value of the debenture be reduced
from $1,500,000 USD to $600,000 USD with no further obligations for the Group.
All accrued interest not paid as of the date of the agreement has been
forgiven and both parties agreed to cancelling the warrants. The overriding
royalty was reduced from 6% to 2%.
After review from management during the year ended 30 June 2024, it was agreed
that the debenture should be de-recognised and impaired in full. This is
because it was agreed that the principal amount of $600,000 USD (£474,428)
was no longer due as it would be recognised as royalty, rather than a
debenture, and the Company will receive royalty payments in future, when
production commences.
9. Convertible loans
Group
30 June 2024 30 June 2023
£ £
Convertible loan note $500,000 USD (£395,975) 82,194 76,163
Convertible loan note $420,000 USD (£332,668) 48,930 28,157
Convertible loan note $49,790 USD (£39,437) 10,358 6,573
Convertible loan note $250,000 USD (£6,573) 30,739 17,714
Impairment provision (172,221) (128,607)
- -
On March 20, 2019, the Group issued a $500,000 USD (£361,847) unsecured
convertible loan note to Anglo-African Minerals plc ("AAM"). The convertible
loan note bears interest at 10% per annum and compounds monthly, is unsecured,
and had an original maturity date of September 20, 2019. The convertible loan
note is convertible into common shares of AAM at $0.01 USD per share. The
maturity date of the convertible loan note was subsequently extended to March
20, 2020, and the Group was issued 21,029,978 AAM warrants per the terms of
the extension. These warrants have a strike price of $0.025 USD per share,
with an expiry date of September 19, 2021. As at June 30, 2021, the Group
impaired the balance down to $Nil as collectability was considered doubtful.
As at June 30, 2024, management have accrued interest amounting £82,194 (2023
- £76,163) on the convertible loan and this same value has been impaired
during the year.
On June 2, 2021, the Group acquired an unsecured convertible loan note that was issued to AAM from Cronin Services Ltd., a company controlled by the former Chairman and CEO of the Group, that had a principal value of $420,000 USD (£303,744) and accrued interest of $61,261 (£44,304) for total value of $481,261 USD (£348,048). The Group issued 14,166,790 ordinary shares and 7,083,395 share purchase warrants to acquire this note. Each share purchase warrant may be converted into one ordinary share of the Group at £0.05 per ordinary share and expires June 2, 2025. The convertible loan note bears interest at 10% per annum and compounds monthly, is unsecured, and had a maturity date of May 31, 2021. The convertible loan note is convertible into common shares of AAM at $0.01 USD per share. As at June 30, 2021, the Group impaired the balance down to $Nil as collectability was considered doubtful. As at June 30, 2024, management have accrued interest amounting £48,930 (2023 - £28,157) on the convertible loan and this same value has been impaired during the year. The overall decrease is from foreign exchange movement on interest and principal.
On June 2, 2021, the Group acquired an unsecured convertible loan note that was issued to AAM from Cronin Capital Corp., a company controlled by the former Chairman and CEO of the Group, that had a principal value of $49,790 USD (£35,949) and accrued interest of $9,826 USD (£7,094) for total value of $59,617 USD (£43,043). The Group issued 1,630,832 ordinary shares and 1,630,832 share purchase warrants to acquire this note. Each share purchase warrant may be converted into one ordinary share of the Group at £0.05 per ordinary share and expires 2025 June 2. The convertible loan note bears interest at 15% per annum and compounds monthly, is unsecured, and had a maturity date of 30 September 2020. The convertible loan note is convertible into common shares of AAM at $0.005 USD per share. As at June 30, 2021, the Group impaired the balance down to $Nil as collectability was considered doubtful. As at June 30, 2024, management have accrued interest amounting £10,358 (2023 - £6,573) on the convertible loan and this same value has been impaired during the year.
On June 2, 2021, the Group acquired an unsecured convertible loan note that was issued to AAM by Reykers Nominees Limited that had a principal value of $250,000 USD (£180,500) and accrued interest of $52,776 (£38,104) for total value of $302,776 USD (£218,604). The Group also acquired 12,500,000 AAM share purchase warrants that had a conversion price of $0.03 USD and expiry date of July 1, 2021 and acquired 11,000,000 AAM ordinary shares. The Group issued 8,912,756 ordinary shares to acquire this convertible note, 1,200,000 ordinary shares to acquire the 12,500,000 AAM share purchase warrants and 3,520,000 ordinary shares to acquire the 11,000,000 AAM ordinary shares. The convertible loan note bears interest at 10% per annum and compounds monthly, is unsecured, and had a maturity date of 30 June 2020. The convertible loan note is convertible into common shares of AAM at $0.01 USD per share. As at June 30, 2021, the Group impaired the balance down to $Nil as collectability of the convertible loan was considered doubtful and the shares and warrants impaired. As at June 30, 2024, management have accrued interest amounting £30,739 (2023 - £17,714) on the convertible loan and this same value has been impaired during the year.
10. Trade and other receivables
The following table sets out the fair values of financial assets within Trade
and other receivables.
Group Company
30 June 2024 30 June 2023 30 June 2024 30 June 2023
£ £ £ £
Other Receivables 89,139 69,879 324 47,523
Tax Receivables 17,203 18,372 - -
Sundry Receivables 225,874 142,475 225,874 142,475
Trade Receivables 350,987 272,247 - -
Prepayments 1,599 27,256 1,599 27,256
Provision for bad debt (498,877) (287,052) (140,000) (140,000)
185,925 243,177 87,797 77,254
The fair value of all current receivables is as stated above.
Included in sundry receivables is an amount of £140,000 (2023: £140,000) as
at 30 June 2024 in respect of unpaid ordinary share capital issued on 3 June
2021. A provision of £140,000 has been included for this after review from
management.
The maximum exposure to credit risk at the year-end date is the carrying value
of each class of receivable mentioned above. The Group does not hold any
collateral as security. Trade and other receivables are all denominated in £
sterling.
The carrying amounts of the Group and Company's trade and other receivables
are denominated in the following currencies:
Group Company
30 June 2024 30 June 2023 30 June 2024 30 June 2023
£ £ £ £
UK Pounds 89,146 83,604 87,797 77,254
Canadian Dollars 96,770 146,250 - -
US Dollars 9 8 - -
Guinea Franc - 13,315 - -
185,925 243,177 87.797 77,254
11. Cash and cash equivalents
Group Company
30 June 2024 30 June 2023 30 June 2024 30 June 2023
£ £ £ £
Cash at bank and in hand 195,157 244,074 94,586 18,684
The majority of the entities cash at bank is held with institutions with at
least a AA- credit rating. A bank account in the UK which holds a small
percentage of cash is held with institutions whose credit rating is unknown.
The carrying amounts of the Group and Company's cash and cash equivalents are
denominated in the following currencies:
Group Company
30 June 2024 30 June 2023 30 June 2024 30 June 2023
£ £ £ £
UK Pounds 84,389 6,523 84,389 1,593
US Dollars 10,197 17,091 10,197 17,091
Canadian Dollars 100,571 220,460 - -
195,157 244,074 94,586 18,684
12. Financial Instruments by Category
General objectives, policies and processes
The Board has overall responsibility for the determination of the Group's risk
management objectives and policies and, whilst retaining ultimate
responsibility for them, it has delegated authority for designing and
operating processes that ensure the effective implementation of the objectives
and policies to the Group's finance function. The Board receives monthly
reports through which it reviews the effectiveness of the processes put in
place and the appropriateness of the objectives and policies it sets.
The overall objective of the Board is to set policies that seek to reduce risk
as far as possible without unduly affecting the Group's competitiveness and
flexibility.
The Group reports in Sterling. Internal and external funding requirements and
financial risks are managed based on policies and procedures adopted by the
Board of Directors. The Group does not use derivative financial instruments
such as forward currency contracts, interest rate and currency swaps or
similar instruments. The Group does not issue or use financial instruments of
a speculative nature.
Capital management
The Group's objectives when maintaining capital are:
· to safeguard the entity's ability to continue as a going concern,
so that it can continue to provide returns for shareholders and benefits for
other stakeholders; and
· to provide an adequate return to shareholders.
The capital structure of the Group consists of total shareholders' equity as
set out in the 'Statement of Changes in Equity'. All working capital
requirements are financed from existing cash resources. After discussions
between management, the Crescita drawdown facility was cancelled during the
year ended 30 June 2024.
Capital is managed on a day-to-day basis to ensure that all entities in the
Group are able to operate as a going concern. Operating cash flow is
primarily used to cover the overhead costs associated with operating as a main
market-listed company.
Liquidity risk
Liquidity risk arises from the Group's management of working capital. It is
the risk that the Group will encounter difficulty in meeting its financial
obligations as they fall due.
Whilst the Group's payables exceed the cash at bank, the Directors are
confident they can raise the funds required to meet its obligations.
The Board receives forward looking cash flow projections at periodic intervals
during the year as well as information regarding cash balances. At the balance
sheet date, the Group had cash balances of £195,157 and the financial
forecasts indicated that the Group is expected to raise funds to meet its
obligations under all reasonably expected circumstances and will not need to
establish overdraft or other borrowing facilities.
Interest rate risk
As the Group only has borrowings in the form of convertible loan notes, which
aren't impacted by varied interest rates, it only has limited interest rate
risk. The impact is on income and operating cash flow and arises from changes
in market interest rates. Cash resources are held in current, floating rate
accounts.
Market risk
Market price risk arises from uncertainty about the future valuations of
financial instruments held in accordance with the Group's investment
objectives. These future valuations are determined by many factors but include
the operational and financial performance of the underlying investee
companies, as well as market perceptions of the future of the economy and its
impact upon the economic environment in which these companies operate. This
risk represents the potential loss that the Group might suffer through holding
its financial investment portfolio in the face of market movements, which was
a maximum of £417,217 (2023: £891,255).
The investments in equity of quoted companies that the Group holds are less
frequently traded than shares in more widely traded securities. Consequently,
the valuations of these investments can be more volatile.
Market price risk sensitivity
The table below shows the impact on the return and net assets of the Group if
there were to be a 20% movement in overall share prices of the financial
investments held at 30 June 2024.
2024 2023
Other comprehensive income and Other comprehensive income and
Net assets Net assets
£ £
Decrease if overall share price falls by 20%, with all other variables held (83,443) (178,251)
constant
(1.23)
Decrease in other comprehensive earnings and net asset value per Ordinary (0.45)
share (in pence)
Increase if overall share price rises by 20%, with all other variables held 83,443 178,251
constant
Increase in other comprehensive earnings and net asset value per Ordinary 0.45 1.23
share (in pence)
The impact of a change of 20% has been selected as this is considered
reasonable given the current level of volatility observed and assumes a market
value is attainable for the Group's unlisted investments.
Currency risk
The Directors consider that there is minimal significant currency risk faced
by the Group. The current foreign currency transactions the Group enters are
denominated in CAD$ and USD$ in relation to transactions associated with
exploration and evaluation option payments and property expenditures. The
Group maintains minimal foreign currency holdings to minimize this risk.
Credit risk
Credit risk is the risk that a counterparty will fail to discharge an
obligation or commitment that it has entered into with the Group. The Group's
maximum exposure to credit risk is:
2024 2023
£ £
Cash at bank 195,157 244,074
Other receivables 185,925 243,177
Convertible debenture receivable 1,581,428 2,059,060
2,546,311
1,962,510
The Group's cash balances are held in accounts with HSBC, BLK.FX, Bank of
Montreal and with its Investment Broker accounts.
Fair value of financial assets and liabilities
Financial assets and liabilities are carried in the Statement of Financial
Position at either their fair value (financial investments) or at a reasonable
approximation of the fair value (trade and other receivables, trade and other
payables and cash at bank).
The fair values are included at the amount at which the instrument could be
exchanged in a current transaction between willing parties, other than in a
forced or liquidation sale.
Trade and other receivables
The following table sets out the fair values of financial assets within Trade
and other receivables.
2024 2023
Financial assets £ £
Trade and other receivables - Non interest earning 185,925 243,177
There are no financial assets which are past due and for which no provision
for bad or doubtful debts has been made.
Trade and other payables
The following table sets out financial liabilities within Trade and other
payables. These financial liabilities are predominantly non-interest bearing,
excluding the existing convertible loan notes. Other liabilities include tax
and social security payables and provisions which do not constitute
contractual obligations to deliver cash or other financial assets.
2024 2023
Financial liabilities £ £
Trade and other payables - Non interest earning 727,385 1,704,437
13. Trade and other payables
The following table sets out the fair values of financial liabilities within
trade and other payables.
Group Company
30 June 2024 30 June 2023 30 June 2024 30 June 2023
£ £ £ £
Trade payables 489,420 1,493,943 419,937 1,303,186
Accruals 90,115 151,396 90,115 139,687
Other Creditors 147,850 59,098 147,715 11,558
Trade and other payables 727,385 1,704,437 657,767 1,454,431
The carrying amounts of the Group and Company's trade and other payables are
denominated in the following currencies:
Group Company
30 June 2024 30 June 2023 30 June 2024 30 June 2023
£ £ £ £
UK Pounds 657,767 1,497,746 657,767 1,454,431
Canadian Dollars 69,618 172,606 - -
US Dollars - 34,085 - -
727,385 1,704,437 657,767 1,454,431
14. Convertible loan notes
On 11 July 2023, the Company issued convertible loan notes (CLN) to Crestmont
Invest, Logic Nominees, Thomas Solomon and Paul Gurney. The gross proceeds
totalled £340,000 and the loan notes have an annual interest rate of 12%.
CLN 1 CLN 2 CLN 3 CLN 4 30 June 2024
£ £ £ £ £
Convertible loan note 200,000 100,000 25,000 15,000 340,000
Interest
Accrued interest 22,027 11,014 3,000 1,800 37,841
Conversion (222,027) (111,014) - - (333,041)
Total - - 28,000 16,800 44,800
Equity
Amount classified as equity - - 1,023 529 1,552
Total - - 1,023 529 1,552
15. Share capital and premium
Number of Share capital Share premium Total
shares £ £ £
As at 30 June 2022 483,174,200 654,129 14,821,521 15,475,650
Issue of new shares - 5 July 2022 16,800,000 16,800 361,200 378,000
Issue of new shares - 19 July 2022 26,027,776 26,028 556,597 582,625
Issue of new shares - 5 August 2022 10,000,000 10,000 169,000 179,000
Issue of new shares - 1 September 2022 12,000,000 12,000 168,000 180,000
Issue of new shares - 28 September 2022 14,000,000 14,000 166,180 180,180
Issue of new shares - 25 October 2022 18,500,000 18,500 185,000 203,500
Issue of new shares - 2 December 2022 15,000,000 15,000 161,850 176,850
Issue of new shares - 27 January 2023 4,300,000 4,300 42,570 46,870
Issue of new shares - 18 April 2023 7,876,829 7,878 121,303 129,181
As at 30 June 2023 607,678,805 778,635 16,753,221 17,531,856
Issue of new shares - 20 May 2024 121,531,891 121,532 486,128 607,660
As at 30 June 2024 729,210,696 900,167 17,239,349 18,139,516
On 20 May 2024, the Group issued and allotted 121,531,891 new ordinary shares
at a price of 0.5 pence per share as part of a shares for debt settlement. No
cash was received from the issue of these shares. The debts settled mainly
included amounts owed to suppliers of the Group, the directors of the Company
and individuals that provided convertible loans to the Company.
16. Share based payments
The outstanding share options and warrants as at 30 June 2024 are shown below:
Options Warrants Weighted average exercise price (£)
As at 30 June 2022 14,650,000 23,221,692 0.04
Options - Cancelled (150,000) - 0.03
Options - Issued 7,250,000 - 0.02
Warrants - Issued - 2,950,000 0.02
Warrants - Expired - (7,926,968) 0.05
As at 30 June 2023 21,750,000 18,244,724 0.04
Options - Lapsed (13,100,000) - 0.03
Warrants - Lapsed - (8,714,227) 0.05
Warrants - Expired - (9,530,497) 0.04
As at 30 June 2024 8,650,000 - 0.04
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 and warrants was determined using the
Black Scholes valuation model. The parameters used are detailed below:
2021 Warrants 2021 Warrants 2022 Warrants 2022 Warrants 2023 Warrants
Granted on: 2/06/2021 2/06/2021 13/8/2021 1/3/2022 9/8/2022
Number of warrants 4,530,497 8,714,227 2,750,002 400,000 2,950,000
Life (years) 2.71 years 4 years 2 years 2 years 1 year
Share price (pence per share) 0.10p 0.05p 0.025p 0.10p 0.025p
Risk free rate 0.55% 0.81% 0.58% 0.80% 2.07%
Expected volatility 100% 100% 20.28% 140.94% 51.43%
Expected dividend yield - - - - -
Total fair value £46,092 £157,695 £2,750 £27,314 6,596
2021 Options 2022 Options
2023 Options
Granted on: 2/06/2020 25/8/2021 9/8/2022
Number of options 5,050,000 11,250,000 7,250,000
Life (years) 3.08 years 4 years 3 years
Share price (pence per share) 0.025p 0.03p 0.025p
Risk free rate 0.64% 0.62% 1.78%
Expected volatility 100% 20.55% 51.43%
Expected dividend yield - - -
Total fair value £99,572 £11,238 £36,723
The expected volatility of the options is based on historical volatility for
the six months prior to the date of granting. No options or warrants were
granted during the year ended 30 June 2024.
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 and warrants granted over the year to 30 June 2024
is shown below:
2024 2023
Range of exercise prices (£) Weighted average exercise price (£) Number of shares Weighted average remaining life expected (years) Weighted average remaining life contracted (years) Weighted average exercise price (£) Number of shares Weighted average remaining life expected (years) Weighted average remaining life contracted (years)
0 - 0.029 0.02 5,550,000 3.510 3.510 0.02 14,750,000 3.047 3.047
0.03 - 0.049 0.03 3,100,000 1.150 1.150 0.03 11,600,000 1.431 1.431
0.05 - 0.099 - - - - 0.05 8,714,227 1.971 1.971
0.10 - 0.15 - - - - 0.10 4,930,497 0.650 0.650
17. Other reserves
Group - year ended 30 June 2023
Share option reserve Warrant option reserve Foreign currency translation reserve Total
£ £ £ £
At 30 June 2022 84,667 212,717 301,709 599,093
Currency translation differences - - (123,367) (123,367)
Issued Options 36,723 - - 36,723
Issued Warrants - 6,596 - 6,596
At 31 June 2023 121,390 219,313 178,342 519,045
Group - year ended 30 June 2024
Share option reserve Warrant option reserve Foreign currency translation reserve Contingent share reserve Total
£ £ £ £ £
At 30 June 2023 121,390 219,313 178,342 - 519,045
Currency translation differences - - (33,828) - (33,828)
Lapsed options (75,281) - - - (75,281)
Lapsed warrants - (249,123) - - (249,123)
Equity component of convertible loan note - - - 1,552 1,552
At 30 June 2024 46,109 (29,810) 144,514 1,552 162,365
18. Employee benefit expense
The total number of Directors who served in the year was 3 (2023: 4). There
are no employees of the Group.
The following amounts were paid during the year to Directors:
Group
Staff costs Year ended Year ended
30 June 2024 30 June 2023
£ £
Directors Fees and Consulting Fees 216,000 315,000
Employee salaries and Tax - 33,515
216,000 348,515
Amounts included in Directors fees and salaries include £216,000 (2023:
£315,000) in relation to director fees and consulting fees. Details of fees
paid to Companies and Partnerships of which the Directors detailed above are
Directors and Partners have been disclosed in Note 27.
19. Directors' remuneration
Year ended 30 June 2024
Short-term benefits Total
£ £
Directors
Paul Gurney 33,000 33,000
Emma Priestley 33,000 33,000
Andrew Male* 150,000 150,000
216,000 216,000
Remuneration hasn't been paid in full to all directors, the amounts referenced
above have either been accrued or partially paid. Refer to note 27 for amounts
still owning to the Directors.
*Andrew Male's remuneration also includes his consulting fees related to his
Company; Westridge Management International Limited.
Year ended 30 June 2023
Short-term benefits Share based payments Total
£ £ £
Directors
Kyler Hardy 120,000 6,329 126,329
Paul Gurney 30,000 3,798 33,798
Emma Priestley 45,000 3,798 48,798
Andrew Male 120,000 3,798 123,798
315,000 17,723 332,723
20. Finance income
Group
Year ended Year ended
30 June 2024 30 June 2023
£ £
Interest income on convertible loan 153,400 143,224
G2 Technology - debenture interest 190,798 197,061
Texas Legacy Exploration - debenture interest - 29,302
Finance Income 344,198 369,587
The interest income on the convertible loan is interest on the AAM convertible
loans. This interest is subsequently impaired. Refer to note 9 for further
information.
21. Other gains
Group
Year ended Year ended
30 June 2024 30 June 2023
£ £
Other gains 633,113 17,913
Other gains 633,113 17,913
The other gains balance is made up of the net gains that were realised after
the transactions that took place as part of the settlement agreement with
Cronin Services. The settlement led to net gains on payables that were
extinguished, in addition to receivables and loan balances being written off.
22. Loss on disposal of investments
Group
Year ended Year ended
30 June 2024 30 June 2023
£ £
Realised loss on disposal of investments 71,071 866,421
Loss on disposal of investments 71,071 866,421
The realised loss on investment comes from the loss realised after the Group
disposed of the shares they previously owned during the year ended 30 June
2024.
23. Income tax expense
No charge to taxation arises due to the losses incurred.
The tax on the Group's loss before tax differs from the theoretical amount
that would arise using the weighted average tax rate applicable to the losses
of the consolidated entities as follows:
Group
Year ended Year ended
30 June 2024 30 June 2023
£ £
Loss before tax (855,966) (3,997,899)
Tax at the applicable rate of 15.9% (2023: 18%) (136,099) (719,622)
Effects of:
Expenditure not deductible for tax purposes - 8,179
Net tax effect of losses carried forward 136,099 723,621
Tax (charge)/refund - (12,178)
The weighted average applicable tax rate of 15.9% (2023: 18%) used is a
combination of the 19% standard rate of corporation tax in the UK, 15%
Canadian corporation tax and 21% US corporation tax.
The Company has tax losses of approximately £2,989,637 (2023: £2,853,785)
available to carry forward against future taxable profits. No deferred tax
asset has been recognised on accumulated tax losses because of uncertainty
over the timing of future taxable profits against which the losses may be
offset.
24. Earnings per share
Group
The calculation of the basic loss per share of 0.1 pence (2023: 1 pence) is
based on the loss the loss attributable to equity owners of the group of
£855,966 (2023: loss of £3,997,899), and on the weighted average number of
ordinary shares of 621,330,333 (2023: 578,496,992) in issue during the period.
In accordance with IAS 33, no diluted earnings per share is presented as the
effect on the exercise of share options or warrants would be to decrease the
loss per share.
Details of share options and warrants that could potentially dilute earnings
per share in future periods are set out in Note 16.
25. Expenses by nature
Group
Year ended 30 June 2024 Year ended 30 June 2023 (restated)
£ £
Professional fees 308,546 1,123,570
Consulting fees 154,654 1,500,735
Employees and Contractors 216,000 228,515
Travel 473 94,302
Insurance 33,651 37,312
IT & Software services 783 13,938
Public Relations 48,117 147,278
Premises and Office costs 9,481 10,447
Property costs/exploration costs - 425,643
Share option expense - 43,306
Other expenses 171,597 230,879
Total administrative expenses 943,302 3,855,925
26. Commitments
License commitments
The Group owns a number of exploration licences in Canada. These licences
include commitments to pay minimum spend requirements. The Group have entered
into option agreements on all of their properties aside from newly staked
properties, Northern Treasure and Foggy Mountain - which was disposed of as
part of the settlement agreement detailed in note 6. As part of these option
agreements, the minimum spend obligations have been passed onto the Optionees.
Refer to note 5 for further information.
As at 30 June 2024 these are as follows:
Group
Minimum spend requirement
£
Not later than one year 493,041
Later than one year and no later than five years 61,258
Total 554,299
27. Related party transactions
Details of the Directors' remuneration can be found in Note 18. Key Management
Personnel are considered to be the Directors.
During the year, the Group remitted amounts totalling £110,724 (2023:
£59,000) to Westridge Management International Ltd. A company controlled by
Andrew Male, a Director of the group. £50,274 of the payments were paid via
the issue of 10,144,850 shares at £0.005 per share. The amount outstanding
owing to Westridge Management at the year-end was £90,276 (2023: £65,000).
During the year, the Group remitted amounts totalling £24,171 (2023: nil) to
Windy Apple Ventures Ltd. A company controlled by Paul Gurney, who was a
Director of the group during the year ended 30 June 2024 (resigned 18 October
2024). £8,171 of the payments were paid via the issue of 1,634,261 shares at
£0.005 per share The amount accrued and outstanding owing to Windy Apple
Ventures Ltd. at the year-end was £48,240 (2023: £22,500).
On 3 July 2023, the Company issued a convertible loan note (CLN) to Paul
Gurney. The gross proceeds totalled £15,000 and the loan had an annual
interest rate of 12%.
During the year, the Group remitted amounts totalling £16,000 (2023: nil) to
Emma Priestley. The amount accrued and outstanding to Emma at the year-end was
£47,000 (2023: £30,000).
28. Discontinued operation
During the year, the Company disposed of Kudu Resources Limited, a subsidiary
of the Company for CAD 5,000 (£2,775). Kudu Resources Limited had net
liabilities of £222,190. The Group has recognised a gain from the subsidiary
at the point of disposal amounting to £232,071 and this was recognised in the
statement of comprehensive income.
As the operations of Kudu Resources Limited were discontinued, the comparative
profit and loss has been restated in accordance with IFRS 5 to move the costs
in 2023 that relate to the subsidiary to discontinued operations.
The profit and loss for Kudu Resources Limited is below:
Year ended 30 June 2024 Year ended 30 June 2023
£ £
Revenue - -
Administration expenses (228) (150,593)
Gain from disposal of entity 232,299 -
Foreign exchange (losses)/gains - -
Operating profit/(loss) 232,071 (150,593)
29. Ultimate controlling party
The Directors believe there is no ultimate controlling party.
30. Contingent liability
There is an ongoing dispute between Cloudbreak Discovery Exploration
(subsidiary) and the Canada Revenue Agency ("CRA") related to an incorrect tax
being charged to the subsidiary for their 2021 tax return. The CRA claimed
that an outstanding liability of $304,597 CAD is due in relation to the
return, which the Group disagree with due to their loss-making position over
the previous years. An amended return has been sent by the subsidiary to the
CRA to correct this amount and management have been engaging with the CRA to
resolve the matter.
31. Events after the reporting date
On 25 July 2024, the Company issued 403,864,936 new ordinary shares of £0.001
each as follows:
· 16,652,055 new ordinary shares issued at a price of £0.004 per
Share, to correct the position created by the conversion of convertible loan
notes on 22 May 2024, where too few ordinary shares were issued as a result of
the miscalculation of the conversion price;
· 305,832,210 new ordinary shares issued at a price of £0.002968
per Share, pursuant to the conversion of an outstanding debt owed by the
Company to the value of £907,710; and
· 81,380,671 new ordinary shares issued at a price of £0.002968
per Share to certain creditors of the Company to capitalise amounts owed to
them for the provision of their services to the Company
On 18 October 2024, Paul Gurney resigned from the Board.
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