REG - Cobra Resources PLC - Final Results for the Year Ended 31 December 2022
28/04/2023 07:00
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RNS Number : 7767X Cobra Resources PLC 28 April 2023
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28 April 2023
Cobra Resources plc
("Cobra" or the "Company")
Final Results for the Year Ended 31 December 2022
Cobra, a gold, rare earth and IOCG exploration company focused on the Wudinna
Project in South Australia, announces its final results for the year ended 31
December 2022.
Highlights
· Executed several exploration programmes including 4,000m of Aircore
("AC") drilling, 800m of Reverse Circulation ("RC") drilling, re-analysis of
over 275 historical drillhole samples, and multiple geophysical surveys
· Programme defined Rare Earth Elements ("REE") resource above and
proximal to gold mineralisation, as well as further along-strike gold
mineralisation at the Clarke prospect
· Raised total of £2,279,500 through private placements to fast-track
rare earth and gold resource growth through exploration activities, and
provide sustaining capital
· Awarded additional exploration tenements considered highly
prospective for gold and rare earth mineralisation, expanding Cobra's Gawler
Craton landholding to 3,621 km(2)
· Cash and cash equivalents at year-end of £1,272,742 (31 December
2021: £264,480)
Post Year End
· Published in January 2023 a maiden rare earth JORC Mineral Resource
of 20.9 Mt at 658 ppm Total Rare Earth Oxides, enabling a strategic baseline
to advance an economically beneficial combination of gold and rare earth
resources
o Defined significant rare earth Exploration Target at the Thompson prospect
demonstrating district scale potential of rare earth mineralisation at Wudinna
· Completed in March 2023 20 RC drillholes for 2,466m across Barns,
White Tank and Clarke prospects aimed at gold resource expansion
o Drilling intersected encouraging geology supportive of further gold and
rare earth mineralisation across all three prospects
o Assays submitted to laboratory with initial results expected imminently
· Commenced in March 2023 a 6,000m AC drilling programme targeting rare
earth resource expansion and other objectives
· Announced in April 2023 the fulfillment of Stage 3 expenditure
obligations to increase ownership of the Wudinna Project to 75%
Greg Hancock, Chairman of Cobra, commented:
"I am pleased to report on a year of exceptional advancement for Cobra, where
we have not only expanded the extent of gold mineralisation outside of our
existing gold resources, but defined a complementary opportunity in overlying
rare earth mineralisation.
The Company is now in the enviable position to expand complementary gold and
rare earth resources in a time where fiscal uncertainty is driving a rising
gold market and the ethical sourcing of rare earths is critical to global
decarbonisation through electrification. To have this opportunity in a single
project benefitting from close spatial proximity of resources in an attractive
mining jurisdiction is an advantage not many junior explorers can claim."
Enquiries:
Cobra Resources plc via Vigo Consulting
Rupert Verco (Australia) +44 (0)20 7390 0234
Dan Maling (UK)
SI Capital Limited (Joint Broker) +44 (0)1483 413 500
Nick Emerson
Sam Lomanto
Shard Capital Partners LLP (Joint Broker)
+44 (0)20 7186 9952
Erik Woolgar
Damon Heath
Vigo Consulting (Financial Public Relations) +44 (0)20 7390 0234
Ben Simons
Charlie Neish
Kendall Hill
The person who arranged for the release of this announcement was Rupert Verco,
Managing Director of the Company.
About Cobra
Cobra is defining a unique multi-mineral resource at the Wudinna Project in
South Australia's Gawler Craton, a tier one mining and exploration
jurisdiction which hosts several world-class mines. Cobra's Wudinna tenements,
totalling 3,261 km(2), contain extensive orogenic gold mineralisation and are
characterised by potentially open-pitable, high-grade gold intersections, with
ready access to infrastructure. Cobra has 22 orogenic gold targets outside of
the current 211,000 Oz gold JORC Mineral Resource Estimate. In 2021, Cobra
discovered rare earth mineralisation proximal to and above the gold
mineralisation which has been demonstrated to be regionally scalable. In 2023,
Cobra published a maiden rare earth JORC Mineral Resource Estimate of 20.9 Mt
at 658 ppm Total Rare Earth Oxides enabling a strategic baseline to advance an
economically beneficial combination of gold and rare earth resources.
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CHAIRMAN'S STATEMENT
INTRODUCTION
I am pleased to report on a year of exceptional advancement for Cobra, where
we have not only expanded the extent of gold mineralisation outside of our
existing gold resources, but defined a complementary opportunity in overlying
rare earth mineralisation.
The team's approach to defining the economic potential of rare earths at
Wudinna has been considered and cost efficient. Initial metallurgy
demonstrates significant economic potential, whilst the knowledge gained of
the geological process that both enriches and develops various rare earth
mineral phases places us in a position to discover further rare earth
mineralisation with higher quantities of ionic mineralisation, and to advance
metallurgical testing of our defined rare earth resource.
During the year, we were awarded a South Australia Advanced Discovery
Initiative ("ADI") grant that has enabled us to test multiple geophysical
processes that have defined a number of targets peripheral to the Clarke
prospect and highlighted geophysical characteristics that define both gold and
rare earth mineralisation.
The Wudinna landholding was strategically grown during the year through the
awarding of additional mineral exploration tenements, which now see the
Company's Gawler Craton land tenure totalling 3,621 km(2).
In the midst of a year of significant rising expenses across our sector, the
team has managed to execute a number of exploration programmes, including a
regional Rotary Air Blast ("RAB") programme and the aforementioned geophysical
surveys, whilst we also defined over 15 rare earth occurrences through
re-analysis of historical drill samples. Despite an unseasonably wet spring
reducing our Reverse Circulation ("RC") programme, the results of drilling
extended gold mineralisation at the Clarke prospect to over 600m.
The Company is now in the enviable position to expand complementary gold and
rare earth resources in a time where fiscal uncertainty is driving a rising
gold market and the ethical sourcing of rare earths is critical to global
decarbonisation through electrification. To have this opportunity in a single
project benefitting from close spatial proximity of resources in an attractive
mining jurisdiction is an advantage not many junior explorers can claim.
BACKGROUND
Cobra began life as a publicly listed company with the aim of finding suitable
precious, base or other energy metals and minerals projects in Australia or
Africa. During 2019, the Board identified several potentially suitable
projects, which were reviewed in detail to evaluate their strengths, growth
potential and long-term value to shareholders.
The Wudinna Project has been the Company's primary focus since acquiring
earn-in rights to the project in 2019 through the negotiation of the "Wudinna
Heads of Agreement". The primary objective of the Company's exploration focus
to date has been to add to the existing 211,000 Oz gold JORC Mineral Resource
Estimate. The articulated strategy to achieve this has been through refining
resource extension opportunities, and defining near-resource targets through
low-cost, high-value geochemical domaining of elemental signatures reflective
of existing gold mineralisation.
Since Cobra's involvement in the Wudinna Project began in 2019, the Company's
approach to exploration has been to provide considered exposure to exploration
success across a range of commodities, considerate of cost and discovery
potential from a world-class mineral domain.
The balance of exploration activities executed in 2022 have focused on our
three-pronged approach:
1. Systematically grow existing gold resources towards 1 million Oz
2. Define the mineral potential of rare earths
3. Advance high-value IOCG targets
Our strategy is to advance exploration targeting by endorsing technological
advancement and implementing cost-effective exploration, where targets are
de-risked through geophysical and geochemical definition, yielding a pipeline
of targets from concept through to resource definition.
Owing to the discovery of rare earths at the Clarke prospect in 2021, the
Company defined a strategic and cost-efficient exploration programme with dual
considerations to advance gold resources, expand on the rare earth discovery
to define economic potential and advance copper-gold targets.
The Company's adopted approach maximises value from existing datasets, and
minimises costs and environmental disturbance. The Company was awarded a South
Australian ADI grant to execute two geophysical programmes aimed at testing
new techniques to define the magnetic and resistive features of mineralised
structures at the Clarke prospect, advancing prospect growth, and identifying
other regional targets.
Rare earth mineralisation has been defined across 15 targets where grades and
intersections are of economic interest. Through re-analysis and Aircore
drilling, sufficient drill density enabled the Company to announce a
post-period, maiden Rare Earth Elements ("REE") JORC resource estimate of 20.9
Mt at 658 ppm Total Rare Eearth Oxides ("TREO") where Magnet Rare Earth Oxides
("MREO") equate to 23.6% of the TREO. The rare earth mineral resource occurs
above and proximal to a defined 94, 000 Oz gold resource at the Baggy Green
prospect and overlies 500m of intersected gold mineralisation at the Clarke
prospect.
The regional rare earth prospectivity of the project is demonstrated by the
defined Exploration Target at the Thompson prospect of 81-233 Mt at an average
grade of 640-856 ppm TREO.
The defined rare earth resource from just 12 months of rare earth focused
work, together with its complementary nature to the Company's 211,000 Oz gold
resource, places the Company in a unique position to grow dual commodity
resources.
Through the 2022 exploration programme, the Company has achieved the 75%
project earn-in milestone defined under the terms of the Wudinna Heads of
Agreement between Lady Alice Mines Pty Ltd (a Cobra Resources Company) and
Peninsula Resources (an Andromeda Metals subsidory). Both parties are working
to consolidate the structure in which the parties intend to progress the
Wudinna Project.
OPERATIONAL REVIEW
Results from the 2022 exploration programme have been transformative in
defining a rare earth resource that is complementary to a growing gold
resource. The 2022 exploration programme included:
· The re-analysis of samples from over 275 (13,150m) historical
drillholes testing for lanthanides
· Drilling of 91 Aircore drillholes for over 4,000m
· 28.2 line km of Loupe TEM profiling at the Clarke prospect
· 12.6 line km of Controlled Source Audio-Frequency Magnetotellurics at
the Clarke prospect
· 800m of RC drilling at the Clarke prospect
Rare Earth Re-analysis of Historical Drill Samples
Available samples from historical drilling enabled the evaluation and
definition of rare earth mineralisation across gold resources and regional
gold targets. Signature intersections yielded from re-analysis included:
Clarke prospect:
· WUD6-0561 intersected a true width of 7m at 1,465 ppm TREO from 41m,
including 6m at 2,499 ppm TREO from 42m
· WUD6-0552 intersected 12m at 1124 ppm TREO from 18m
Thompson prospect:
· SCH-0922 intersected 31m at 1,427 ppm TREO from 12m, including 12m at
3,168 ppm TREO from 12m
· KO11S-1133 intersected 30m at 1,124 ppm TREO (MREO 27%) from 18m,
including 18m at 1,445 ppm TREO from 24m
· KO11S-1074 intersected 15m at 1,198 ppm TREO (MREO 29%) from 18m
· SCH-0939 intersected 6m at 1,839 ppm TREO from 36m
Baggy Green prospect:
· WUD6-0763 intersected 22m at 716 ppm TREO from 12m
· WUD6-0685 intersected 30m at 681 ppm TREO from 18m
Anderson prospect:
· WUD1-0231 intersected 18m at 2,024 ppm TREO from 24m, including 12m
at 2,767 ppm TREO from 30m, above the previously reported 1m at 1.013 g/t gold
from 79m
· WUD1-0383 intersected 40m at 641 ppm TREO from 12m, including 6m at
1,077 ppm TREO from 36m
· WUD1-0328 intersected 15.6m at 612 ppm TREO from 15.5m
Aircore Drilling Programme
Aircore drilling was used to follow-up rare earth re-analysis results, de-risk
follow-up gold focused RC drilling at Clarke, and to provide geochemical
samples to refine IOCG targets 1-3. Through this programme, Cobra:
· Defined further gold mineralisation at Clarke, where CBAC0014
intersected 12m at 1.25 g/t gold from 18m, increasing the intersected strike
extent at Clarke beyond 500m
· Refined further gold targets at Clarke, where broad zones of gold in
saprolite has been defined north of previously intersected gold
mineralisation. In comparison to drilled mineralisation zones, the anomalous
zones northwest of Clarke are more significant, supporting further
mineralisation down-dip and along-strike where notable saprolite intersections
included:
o 16m at 0.22 g/t gold from 12m, including 2m at 0.9 g/t gold from 16m
CBAC0020
o 12m at 0.29 g/t gold from 18m CBAC0013
o 18m at 0.14 g/t gold from 14m CBAC0007
o 6m at 0.31 g/t gold from 16m CBAC0027
o 10m at 0.16 g/t gold from 10m CBAC0016
o 12m at 0.10 g/t gold from 20m CBAC0009
o 8m at 0.12 g/t gold from 50m CBAC0017
· Expanded the zone of high-grade rare earth mineralisation at Clarke,
with significant intersections demonstrating basket assemblages, lithologies
and environmental conditions supportive of ionic adsorption mineralisation.
Signature intersections included:
o 14m at 3,703 ppm TREO from 18m, including 6m at 6,648 ppm TREO from 22m
CBAC0021
o 10m at 2,220 ppm TREO from 42m, including 2m at 8,163 ppm TREO from 48m
CBAC0022
o 34m at 854 ppm TREO from 16m, including 4m at 1,205 ppm TREO from 34m
CBAC0023
o 26m at 928 ppm TREO from 14m, including 6m at 2,046 ppm TREO from 22m
CBAC0027
· Yielded numerous rare earth intersections across nine regional
targets, demonstrating regional scalability and prospectivity for clay-hosted
rare earth mineralisation, where high-grade mineralisation supports scalable
footprints:
o At Thompson, where CBAC0085 intersected 32m at 1,336 ppm TREO from 8m,
with the MREO equating to 25% of the TREO
o At Barns, peripheral to the gold resource where CBAC0065 intersected 32m
at 920 ppm TREO from 24m, with the MREO equating to 26% of the TREO
o At Anderson, where CBAC0075 intersected 8m at 2,535 ppm TREO from 18m,
with the MREO equating to 29% of the TREO
o At Bradman, where CBAC0059 intersected 10m at 869 ppm TREO from 32m, with
the MREO equating to 24% of the TREO
· Tested saprolite above three of the Company's IOCG geophysical
targets, where geochemical analysis demonstrates prospectivity for copper/gold
porphyry style mineralisation
Due to the complexity of rare earth mineralisation, the Company's approach to
defining the economic potential of rare earth mineralisation was to identify
rare earth mineral phases, confirm clay adsorption and confirm metallurgical
potential. This was successfully achieved through collaborations with a number
of academic and world-leading research institutions. Technical studies
implemented to define rare earth mineralisation potential at the Wudinna
Project included:
Mineralogical determination by X-Ray Diffraction ("XRD") analysis, performed
by the Commonwealth Scientific and Industrial Research Institute ("CSIRO"),
where:
· XRD analysis supports that a component of rare earth bursary is
adsorbed to the primary clay particles, being kaolin and montmorillonite, in
similar fashion to the highly desirable IAC hosted deposits of southern China
Lithological analysis by HyLogger Spectral Analysis, performed by the Geology
Survey of South Australia ("GSSA"), which has demonstrated:
· Strong associations between elevated rare earths, kaolinite quantity,
and reducing crystallinity
· Strong associations between muscovite and phengite to gold
mineralisation
Rare earth phase determination by Scanning Electron Microscopy ("SEM")
performed by the Critical Minerals Institute ("UniSA") highlighted:
· Primary rare earth enrichment in alteration mineral assemblages
associated with hydrothermal gold mineralisation
· Secondary rare earth minerals formed within the saprock, where grade
peaks are not directly associated with elevated phosphate
· Elevated rare earth grades in clays where primary and secondary rare
earth phases are low
Diagnostic metallurgical testing carried out by the Australian Nuclear Science
and Technology Organisation ("ANSTO") focused on extraction techniques adopted
to ionic phase mineralisation using H(2)SO(4) as a lixiviant, yielding
recoveries of up to 34% TREE from samples across two holes at Clarke at
ambient temperatures.
Identification of clay adsorption potential from Aircore and RC drill samples.
The Company tested the sample acidity/alkalinity via standard soil pH tests of
over 240 samples. The resultant dataset highlight a strong association between
elevated grades and pH ranges 6-7 and 9-10. These conditions are identified
through academia as being conditions that best promote physisorption; the
process in which REEs ionically bind to clay particles.
Advanced Discovery Initiative Geophysical Surveys
In June 2022, the Company executed a 28.2 line km Loupe TEM survey at the
Clarke prospect, which:
· Confirmed that defined gold mineralisation at Clarke is located along
distinct linear terminations bordering highly conductive zones. This is
interpreted to represent redial shear structures promoting dilation under N-S
compression
· Identified four additional repeat structures, branching from the
major regional E-W fault, within the survey. These are interpreted as
structural juxtaposition or "dilatational jolts" prospective for further gold
mineralisation and warrant follow-up drill testing
· Defined three conjugate NE trending structures north of Clarke which
correlate with highly anomalous gold in saprolite intersected in recent
Aircore drilling
· Demonstrated that high-grade rare earth mineralisation correlates to
highly conductive zones that define troughs of deep saprolite weathering
· Validated a cost-efficient method of defining and modelling zones
prospective for rare earth mineralisation
Across November and December 2022, the Company engaged Zonge Geophysics to
execute a 12.6 line km of Controlled Source Audio-Frequency Magnetotellurics
("CSAMT") at the Clarke prospect, which demonstrated that:
· Increases in saprolite depth are locally related to structures
containing gold mineralisation, hydrothermal alteration, sulphides and
subsequently elevated rare earths. Deeper weathering profiles are considered
to be a product of acidic weathering conditions that result from the presence
of sulphides
· A zone of moderate conductivity immediately adjacent to the
interpreted Clarke gold-bearing structure is interpreted to reflect sodic
alteration associated with gold mineralisation
· Regional, unmineralised structures display different geophysical
responses to localised mineralised structures. These include shallow saprolite
weathering and strong conductive down-plunge responses that are thought to be
related to the presence of saline groundwater
· Gold mineralisation is contained in second order structures where
dilation is likely increased by the relative proximity to primary structures,
and alteration subsequently yields a de-magnetised geophysical response
Structural observations made through the CSAMT survey have been applied to the
regional Airborne Electromagnetic ("AEM") survey conducted by Newmont in 2004.
A number of demagnetised zones are interpreted to contain first and second
order structures and are comparable to the structural interpretation at the
dual gold and rare earth Clarke prospect. Results support basement
interpretations and structural inferences derived from the Loupe TEM survey
completed in November 2022.
Seven additional targets with structural similarities and corresponding to
anomalous gold in calcrete were added to the March 2023 RC drill programme.
RC Drilling at the Clarke Prospect
A total of 11 RC holes were drilled in November 2022 totalling 800m, where:
· The strike of intersected gold mineralisation at the Clarke prospect
was increased to 600m, occurring outside of the existing 211,000 Oz MRE
through the following intersections:
o CBRC0059 intersected 6m at 4.15 g/t gold from 34m, including 4m at 5.74
g/t gold from 34m
o CBRC0057 intersected 18m at 0.6 g/t gold from 57m, including 1m at 1.80
g/t gold from 58m and 2m at 2.16 g/t gold from 68m
o CBRC0066 intersected 8m at 0.6 g/t gold from 58m, including 2m at 1.31 g/t
gold from 62m
· Further rare earth mineralisation intersected peripheral to expanded
gold strike further supports the Company's dual resource strategy. Rare earth
intersections included:
o CBRC0058 intersected 24m at 1,093 ppm TREO from 26m, where the MREO
equates to 26% of the TREO, including 19m at 1,243 ppm TREO from 29m (MREO:
26%)
o CBRC0062 intersected 20m at 683 ppm TREO from 31m, where the MREO equates
to 22% of the TREO, including 2m at 2,249 ppm TREO (MREO: 19%)
o CBRC0066 intersected 31m at 514 ppm TREO from 36m, where the MREO equates
to 22% of the TREO
o CBRC0057 intersected 21m at 519 ppm TREO from 13m, where MREO equates to
23% of the TREO
o CBRC0059 intersected 14m at 611 ppm TREO from 14m, where MREO equates to
23% of the TREO
Gold and rare earth drilling results from the 2022 exploration programme
demonstrated the growth potential of existing gold resources, formed the basis
of a maiden rare earth resource estimate, and demonstrated the scale potential
for further resource expansion as well as the potential for further
discoveries.
ISSUES OF SHARES DURING THE PERIOD
On 16 February 2022, 63,000,000 Ordinary shares were issued pursuant to an
oversubscribed private placement at 1.5 pence each, raising £945,000.
On 26 October 2022 and 1 November 2022, 88,966,668 Ordinary shares were issued
pursuant to an oversubscribed private placement at 1.5 pence each, raising
£1,334,500. 2,572,372 Ordinary shares were issued to former LAM owners at
1.5p each, and 600,000 Ordinary shares were issued to third party suppliers
for settlement of fees in lieu of cash on or around the same date.
POST PERIOD END EVENTS
In January 2023, the Company took a fundamental step towards defining a
globally unique mineral occurrence by announcing a maiden rare earth resource
of 20.9 Mt at 658 ppm TREO that encompasses the Clarke and Baggy Green gold
prospects and occurs within the saprolite above and proximal to gold
mineralisation. In addition, a defined Exploration Target at the Thompson
prospect demonstrates the district scale potential of rare earth
mineralisation at the Wudinna Project. In March 2023, the Company completed 20
RC drillholes for 2,466m across the Barns, White Tank and Clarke prospects
aimed at gold resource expansion. Drilling intersected encouraging geology
supportive of further gold and rare earth mineralisation across all three
prospects. Assays have been submitted to the laboratory with initial results
expected imminently. In March 2023, the Company also commenced a 6,000m AC
drilling programme targeting rare earth resource expansion and other
objectives.
CONCLUSION
The Company has managed to overcome challenging financial conditions and
record-breaking wet weather to deliver a year of exploration success which
culminated in a maiden rare earth resource and will contribute to an expanded
gold resource. This provides a unique and valuable mineral inventory from
which the Company can grow and commence the process of determining project
economics. I thank our shareholders for their continued commitment in
uncertain times - their loyal support has enabled the Company to achieve
exploration success and will enable further growth. I thank my fellow
directors for their contribution throughout the year, our Exploration Manager,
Robert Blythman, for his tireless efforts, our valued stakeholders, and our
contractors and service providers. We are committed to unlocking the mineral
wealth of the Wudinna Project.
Greg Hancock
Non-Executive Chairman
27 April 2023
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022
Notes 31 December 31 December
2022 2021
£ £
Other Income - -
Other Expenses 2 (488,608) (567,213)
Operating loss (488,608) (567,213)
Finance income and costs 3 (20,530) (1,110,298)
(509,138) (1,677,511)
Change in estimate of contingent consideration 14 - -
Loss before tax (509,138) (1,677,511)
Taxation 6 - -
Loss for the year attributable to equity holders (509,138) (1,677,511)
Earnings per Ordinary share
Basic and diluted loss per share attributable to owners of the Parent Company 7 (£0.0010) (£0.0073)
All operations are considered to be continuing.
The accompanying notes are an integral part of these financial statements.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
31 December 31 December
2022 2021
£ £
Loss for the year (509,138) (1,677,511)
Other Comprehensive income
Items that may subsequently be reclassified to profit or loss:
- Exchange differences on translation of foreign operations 290,754 (81,246)
Total comprehensive loss attributable to equity holders of the Parent Company (218,384) (1,758,757)
The accompanying notes are an integral part of these financial statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31 DECEMBER 2022
Notes
2022 2021
£ £
Non-current assets
Intangible Fixed Assets 9 2,727,290 2,012,405
Property, plant and equipment 10 1,428 1,680
Total non-current assets 2,728,718 2,014,085
Current assets
Trade and other receivables 11 84,469 36,891
Cash and cash equivalents 12 1,272,742 264,480
Total current assets 1,357,211 301,371
Current liabilities
Trade and other payables 13 79,999 50,336
Contingent consideration 14 148,914 187,500
Total current liabilities 228,913 237,836
Net assets 3,857,016 2,077,620
Capital and reserves
Share capital 15 5,152,495 3,601,104
Share premium account 2,794,647 1,378,561
Share based payment reserve (16,908) 962,201
Retained losses (4,348,182) (3,848,456)
Foreign currency reserve 274,964 (15,790)
Total equity 3,857,016 2,077,620
The accompanying notes are an integral part of these financial
statements.
These financial statements were approved and authorised for issue by the Board
of Directors on 27 April 2023.
PARENT COMPANY STATEMENT OF FINANCIAL POSITION
31 DECEMBER 2022
Notes
2022 2021
£ £
Non-current assets
Investment in subsidiary 8 432,260 432,260
Property, plant and equipment 10 1,428 1,680
Intangible Fixed Assets 9 33,251 33,251
Total non-current assets 466,939 467,190
Current assets
Trade and other receivables 11 2,664,401 2,009,103
Cash and cash equivalents 12 1,075,372 200,088
Total current assets 3,739,773 2,209,191
Current liabilities
Trade and other payables 13 11,873 31,960
Contingent consideration 14 148,914 187,500
Total current liabilities 160,787 219,460
Net assets 4,045,925 2,456,921
Capital and reserves
Share capital 15 5,152,495 3,601,104
Share premium account 2,794,647 1,378,561
Share based payment reserve (16,908) 962,201
Retained losses (3,884,309) (3,484,945)
Equity shareholders' funds 4,045,925 2,456,921
The Company has taken advantage of the exemption allowed under section 408 of
the Companies Act 2006 and has not included its own income statement and
statement of comprehensive income in these financial statements. The Parent
Company's loss for the period amounted to £399,363 (2021: £1,485,505 loss).
The accompanying notes are an integral part of these financial statements.
These financial statements were approved and authorised for issue by the Board
of Directors on 27 April 2023.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
Share Share Share based Retained Foreign Total
capital premium payment losses currency
reserve reserve
£ £ £ £ £ £
As at 1 January 2021 2,829,566 564,173 1,006,238 (2,239,982) 65,456 2,225,451
Loss for the year - - - (1,677,511) - (1,677,511)
Translation differences - - - - (81,246) (81,246)
Comprehensive loss for the year - - - (1,677,511) (81,246) (1,758,757)
Shares issued - - - - - -
Share based payment expired - - (69,037) 69,037 - -
Exercise of options & warrants - - - - - -
Cost of share issue 771,538 814,388 - - - 1,585,926
Share warrant charge - - - - - -
Share option charge - 25,000 - - 25,000
At 31 December 2021 3,601,104 1,378,561 962,201 (3,848,456) (15,790) 2,077,620
Loss for the year - - - (509,138) - (509,138)
Translation differences - - - 9,413 290,754 300,167
Comprehensive loss for the year - - - (499,725) 290,754 (208,971)
Shares issued 1,551,390 640,289 (44,576) - - 2,147,104
Share issue cost (207,735) (207,735)
Warrants expired - 924,906 (924,906) - - -
Warrants issued 58,626 (58,626)
Share option charge 49,000 - - 49,000
At 31 December 2022 5,152,495 2,794,647 (16,908) (4,348,181) 274,964 3,857,017
The following describes the nature and purpose of each reserve within equity:
Share capital: Nominal value
of shares issued
Share premium: Amount
subscribed for share capital in excess of nominal value, less share issue
costs
Share based payment reserve: Cumulative fair value of warrants and
options granted
Retained losses: Cumulative net gains
and losses, recognised in the statement of comprehensive income
Foreign currency reserve: Gains/losses arising on
translation of foreign controlled entities into pounds sterling.
The accompanying notes are an integral part of these financial statements.
PARENT COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
Share Share Share based Retained Total
capital premium payment losses
reserve
£ £ £ £ £
At 1 January 2021 2,829,566 564,173 1,006,238 (2,068,475) 2,331,502
Loss for the year - - - (1,485,506) (1,485,506)
Comprehensive loss for the year - - - (1,485,506) (1,485,506)
Shares issued 771,538 814,388 - - 1,585,926
Lapsed warrants - - (69,037) 69,037 -
Exercise of options & warrants - - - - -
Cost of share issue - - - - -
Share warrant charge - - - - -
Share option charge - - 25,000 - 25,000
At 31 December 2021 3,601,104 1,378,561 962,201 (3,484,944) 2,456,921
Loss for the year - - - (399,363) (399,363)
Comprehensive loss for the year - - - (399,363) (399,363)
Shares issued net of costs 1,551,391 640,289 (44,576) - 2,147,104
Warrants expired - 924,906 (924,906) - -
Share issuance costs - (207,735) - (207,735)
Issuance of warrants 58,626 (58,626) -
Share option charge - - 49,000 - 49,000
At 31 December 2022 5,152,495 2,794,647 (16,908) (3,884,307) 4,045,927
The following describes the nature and purpose of each reserve within equity:
Share capital: Nominal value of
shares issued
Share premium: Amount subscribed for
share capital in excess of nominal value, less share issue costs
Share based payment reserve: Cumulative fair value of warrants and
options granted
Retained losses: Cumulative net gains
and losses, recognised in the statement of comprehensive income
The accompanying notes are an integral part of these financial statements.
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022
Notes 31 December 31 December
2022 2021
£ £
Cash flows from operating activities
Loss before tax (509,138) (1,677,511)
Equity settled share based payments 49,000 45,000
Loss on derecognition of financial liability - 1,077,607
Depreciation 10 252 719
Foreign exchange 159,015 (78,137)
(Increase) / decrease in trade and other receivables 11 (13,493) 32,517
Decrease in trade and other payables 13 (34,254) (118,978)
Shares issued in lieu of cash - 33,251
Net cash used in operating activities (348,618) (685,532)
Cash flows from investing activities
Payments for exploration and evaluation activities 9 (714,885) (516,886)
Net cash used in investing activities (714,885) (516,886)
Cash flows from financing activities
Proceeds from the issue of shares 2,279,500 128,044
Payment for share issuance costs (207,735) -
Net cash generated from financing activities 2,071,765 128,044
Net increase/(decrease) in cash and cash equivalents 1,008,262 (1,074,371)
Cash and cash equivalents at beginning of year 264,480 1,338,851
Cash and cash equivalents at end of year 12 1,272,742 264,480
The accompanying notes are an integral part of these financial statements
PARENT COMPANY CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022
Notes 31 December 31 December
2022 2021
£ £
Cash flows from operating activities
Loss before tax (399,363) (1,485,505)
Equity settled share based payments 49,000 45,000
Loss on derecognition of financial liability - 1,077,607
Depreciation 10 252 719
Foreign exchange loss/gain - 3,110
Increase in trade and other receivables 11 (196,283) (9,897)
Decrease in trade and other payables 13 (20,087) (63,676)
Shares issued in lieu of cash - 33,251
Net cash used in operating activities (1,113,083) (399,391)
Cash flows from investing activities
Loan to Subsidiary 11 - (362,729)
Net cash used in investing activities - (362,729)
Cash flows from financing activities
Proceeds from the issue of shares 1,649,500 128,044
Proceeds of shares and warrants issued (207,735) -
Net cash generated from financing activities 1,441,765 128,044
Net increase/(decrease) in cash and cash equivalents 875,284 (634,076)
Cash and cash equivalents at beginning of year 200,088 834,164
Cash and cash equivalents at end of year 12 1,075,372 200,088
NOTES TO THE FINANCIAL STATEMENTS
1. ACCOUNTING POLICIES AND BASIS OF PREPARATION
General information
The Company is a public company limited by shares which is incorporated in
England. The registered office of the Company is 9(th) Floor, 107 Cheapside,
London, EC2V 6DN, United Kingdom. The registered number of the Company is
11170056.
The principal activity of the Group is to objective is to explore, develop and
mine precious and base metal projects.
Summary of significant accounting policies
The principal accounting policies applied in the preparation of these
Financial Statements are set out below ('Accounting Policies' or 'Policies').
These Policies have been consistently applied to all the periods presented,
unless otherwise stated.
Accounting policies
Basis of preparation of Financial Statements
The Group and Company Financial Statements have been prepared in accordance
with UK-adopted international accounting standards. The Group financial
statements have been prepared in accordance with International Financial
Reporting Standards (IFRS) and IFRS Interpretations Committee (IFRS IC)
interpretations as adopted by the United Kingdom applicable to companies under
IFRS. The Group and Company Financial Statements have also been prepared under
the historical cost convention, except as modified for assets and liabilities
recognised at fair value on an asset acquisition.
The Financial Statements are presented in pounds sterling, which is the
functional currency of the Parent Company. The functional currency of Lady
Alice Mines Pty Ltd is Australian Dollars.
The preparation of the Financial Statements in conformity with IFRS requires
the use of certain critical accounting estimates. It also requires the Board
to exercise its judgement in the process of applying the Group's accounting
policies. The areas involving a higher degree of judgement or complexity, or
areas where assumptions and estimates are significant to the Financial
Statements are disclosed in Note 1.
Changes in accounting policies
i) New and amended standards adopted by the Group and
Company
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 for the period
ended 31 December 2022 but did not result in any material changes to the
financial statements of the Group or Company.
Of the other IFRS and IFRIC amendments, none are expected to have a material
effect on the future Group or Company Financial Statements.
ii) New 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 1 (Amendments) Presentation of Financial Statements: Disclosure of Accounting Policies 1 January 2023
IAS 12 (Amendments) Income Taxes - Deferred Tax related to Assets and Liabilities 1 January 2023
IAS 8 (Amendments) Accounting policies, changes in accounting estimates and errors: Definition of 1 January 2023
Accounting Estimates
IAS 1 (Amendments) Presentation of Financial Statements: Classification of Liabilities as Current TBC
or Non-Current
None are expected to have a material effect on the Group or Company Financial
Statements.
Going concern
The Financial Statements have been prepared on a going concern basis. In
assessing whether the going concern assumption is appropriate, the Directors
have taken into account all relevant available information about the current
and future position of the Group and Company, including the current level of
resources and the required level of spending on exploration and evaluation
activities. As part of their assessment, the Directors have also taken into
account the ability to raise additional funding whilst maintaining sufficient
cash resources to meet all commitments.
The Group meets its working capital requirements from its cash and cash
equivalents. The Company is pre-revenue, and to date the Company has raised
finance for its activities through the issue of equity and debt.
The Group has £1,252,742 of cash and cash equivalents at 31 December 2022.
The Group's and Company's ability to meet operational objectives and general
overheads is reliant on raising further capital in the near future.
The Directors are confident that further funds can be raised and it is
appropriate to prepare the financial statements on a going concern basis,
however there can be no certainty that any fundraise will complete. These
conditions indicate existence of a material uncertainty related to events or
conditions that may cast significant doubt about the Group's and Company's
ability to continue as a going concern, and, therefore, that it may be unable
to realise its assets and discharge its liabilities in the normal course of
business. These financial statements do not include the adjustments that
would be required if the Group and Company could not continue as a going
concern.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of
the Parent Company and companies controlled by the Parent Company, the
Subsidiary Companies, drawn up to 31 December each year.
Control is recognised where the Company has the power to govern the financial
and operating policies of an investee entity so as to obtain benefits from its
activities, and is exposed to, or has rights to, variable returns from its
involvement in the subsidiary. The results of subsidiaries acquired or
disposed of during the year are included in the consolidated income statement
from the effective date of acquisition or up to the effective date of
disposal, where appropriate.
Where necessary, adjustments are made to the financial statements of
subsidiaries to bring the accounting policies used into line with those used
by the Group. All intra-group transactions, balances, income and expenses are
eliminated on consolidation.
The Group applies the acquisition method of accounting to account for business
combinations. The consideration transferred for the acquisition of a
subsidiary is the fair values of the assets transferred, the liabilities
incurred to the former owners of the acquiree and the equity interests issued
by the Group. The consideration transferred includes the fair value of any
asset or liability resulting from a contingent consideration arrangement.
Identifiable assets acquired and liabilities and contingent liabilities
assumed in a business combination are measured initially at their fair values
at the acquisition date.
Acquisition-related costs are expensed as incurred unless they result from the
issuance of shares, in which case they are offset against the premium on those
shares within equity.
Any contingent consideration to be transferred by the Group is recognised at
fair value at the acquisition date. Subsequent changes to the fair value of
the contingent consideration that is deemed to be an asset or liability is
recognised either in profit or loss or as a change to other comprehensive
income. Contingent consideration that is classified as equity is not
re-measured, and its subsequent settlement is accounted for within equity.
Investments in subsidiaries are accounted for at cost less impairment.
Segmental reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-maker. The chief operating
decision-maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the Board of
Directors that makes strategic decisions.
The Group's operations are located Australia with the head office located in
the United Kingdom. The main tangible assets of the Group, cash and cash
equivalents, are held in the United Kingdom and Australia. The Board ensures
that adequate amounts are transferred internally to allow all companies to
carry out their operational on a timely basis.
The Directors are of the opinion that the Group is engaged in a single
segment of business being the exploration of gold in Australia. The Group
currently has two geographical reportable segments - United Kingdom and
Australia.
Foreign currencies
For the purposes of the consolidated financial statements, the results and
financial position of each Group entity are expressed in pounds sterling,
which is the presentation currency for the consolidated financial statements.
In preparing the financial statements of the individual entities, transactions
in currencies other than the entity's functional currency (foreign currencies)
are recorded at the rates of exchange prevailing at the dates of the
transactions. At each reporting date, monetary items denominated in foreign
currencies are retranslated at the rates prevailing at the reporting date.
Exchange differences arising are included in the profit or loss for the
period.
For the purposes of preparing consolidated financial statements, the assets
and liabilities of the Group's foreign operations are translated at exchange
rates prevailing on the reporting date. Income and expense items are
translated at the average exchange rates for the period. Gains and losses from
exchange differences so arising are shown through the Consolidated Statement
of Changes in Equity.
Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation
and any accumulated impairment losses. Depreciation is provided on all
property, plant and equipment to write off the cost less estimated residual
value of each asset over its expected useful economic life on a straight-line
basis at the following annual rates: Office Equipment: 33.33% per annum
The assets' residual values and useful lives are reviewed, and adjusted if
appropriate, at the end of each reporting period. An asset's carrying amount
is written down immediately to its recoverable amount if the asset's carrying
amount is greater than its estimated recoverable amount. Gains and losses on
disposal are determined by comparing the proceeds with the carrying amount and
are recognised within 'Other (losses)/gains' in the Statement of Comprehensive
Income.
Impairment of tangible fixed assets
A review for indicators of impairment is carried out at each reporting date,
with the recoverable amount being estimated where such indicators exist. Where
the carrying value exceeds the recoverable amount, the asset is impaired
accordingly. Prior impairments are also reviewed for possible reversal at each
reporting date.
For the purposes of impairment testing, when it is not possible to estimate
the recoverable amount of an individual asset, an estimate is made of the
recoverable amount of the cash-generating unit to which the asset belongs. The
cash-generating unit is the smallest identifiable group of assets that
includes the asset and generates cash inflows that largely independent of the
cash inflows from other assets or groups of assets.
Exploration and evaluation assets
Exploration and evaluation assets comprises all costs which are directly
attributable to the exploration of a project area. The Group recognises
expenditure as exploration and evaluation assets when it determines that those
assets will be successful in finding specific mineral resources. Expenditure
included in the initial measurement of exploration and evaluation assets and
which are classified as intangible 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 mineral
resource. Capitalisation of pre-production expenditure ceases when the mining
property is capable of commercial production.
Exploration and evaluation assets recorded at fair-value on acquisition
Exploration assets which are acquired are recognised at fair value. When an
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.
Impairment of intangible assets
Intangible assets that have an indefinite useful life are not subject to
amortisation and are tested annually for impairment, or more frequently if
events or changes in circumstances indicate that they might be impaired. Other
assets are tested for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. An impairment loss
is recognised in profit or loss 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 of disposal and value in use. For the
purposes of assessing impairment, assets are grouped at the lowest levels for
which there are separately identifiable cash inflows which are largely
independent of the cash inflows from other assets or groups of assets
(cash-generating units). Early stage exploration projects are assessed for
impairment using the methods specified in IFRS 6.
Financial Assets
Loans and Receivables
(a) Classification and receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an instrument level.
The Group's and Company's business model for managing financial assets refers
to how it manages its financial assets in order to generate cash flows. The
business model determines whether cash flows will result from collecting
contractual cash flows, selling the financial assets, or both.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in
four categories:
• financial assets at amortised cost (debt instruments);
• financial assets at fair value through OCI with recycling of
cumulative gains and losses (debt instruments);
• financial assets designated at fair value through OCI with no
recycling of cumulative gains and losses upon derecognition (equity
instruments); and
• financial assets at fair value through profit or loss.
Financial assets at amortised cost (debt instruments)
This category is the most relevant to the Group and Company. The Group and
Company measure financial assets at amortised cost if both of the following
conditions are met:
• the financial asset is held within a business model with the
objective to hold financial assets in order to collect contractual cash flows;
and
• the contractual terms of the financial asset give rise on
specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.
Financial assets at amortised cost are subsequently measured using the
effective interest rate ("EIR") method and are subject to impairment. Interest
received is recognised as part of finance income in the statement of profit or
loss and other comprehensive income. Gains and losses are recognised in profit
or loss when the asset is derecognised, modified or impaired. The Group's and
Company's financial assets at amortised cost include trade and other
receivables (not subject to provisional pricing) and cash and cash
equivalents.
Derecognition
A financial asset is primarily derecognised when:
• the rights to receive cash flows from the asset have expired; or
• the Group and Company have transferred their rights to receive
cash flows from the asset or has assumed an obligation to pay the received
cash flows in full without material delay to a third party under a
'pass-through' arrangement; and either (a) the Group and Company have
transferred substantially all the risks and rewards of the asset, or (b) the
Group and Company have neither transferred nor retained substantially all the
risks and rewards of the asset, but has transferred control of the asset.
Impairment of financial assets
The Group and Company recognise 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 and
Company expect 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.
Financial liabilities
Financial liabilities are classified, at initial recognition, as financial
liabilities at fair value through profit or loss, loans and borrowings,
payables, or as derivatives designated as hedging instruments in an effective
hedge, as appropriate. All financial liabilities are recognised initially at
fair value and, in the case of loans and borrowings and payables, net of
directly attributable transaction costs.
Subsequent measurement
After initial recognition, trade and other payables are subsequently measured
at amortised cost using the EIR method. Gains and losses are recognised in the
statement of profit or loss and other comprehensive income when the
liabilities are derecognised, as well as through the EIR amortisation process.
Derecognition
A financial liability is derecognised when the associated obligation is
discharged or cancelled or expires.
Cash and cash equivalents
The Company considers any cash on short-term deposits and other short-term
investments to be cash and cash equivalents.
Share capital
The Company's Ordinary shares of nominal value £0.01 each ("Ordinary Shares")
are recorded at such nominal value and proceeds received in excess of the
nominal value of Ordinary Shares issued, if any, are accounted for as share
premium. Both share capital and share premium are classified as equity. Costs
incurred directly to the issue of Ordinary Shares are accounted for as a
deduction from share premium, otherwise they are charged to the income
statement.
Current and deferred income tax
Tax represents income tax and deferred tax. Income tax is based on profit or
loss for the year. Taxable profit or loss differs from the loss for the year
as reported in the Consolidated Statement of Comprehensive Income because it
excludes items of income or expense that are taxable or deductible in other
years and it further excludes items of income or expense that are never
taxable or deductible. The liability for current tax is calculated using tax
rates that have been enacted or substantively enacted by the Statement of
Financial Position date.
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the Historical
Financial Information and the corresponding tax bases used in the computation
of taxable profit, and is accounted for using the liability method. Deferred
tax liabilities are generally recognised for all taxable temporary differences
and deferred tax assets are recognised to the extent that it is probable that
taxable profits will be available against which deductible temporary
differences can be utilised.
Deferred tax assets and liabilities are offset where there is a legally
enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same taxation
authority and the intention is to settle current tax assets and liabilities on
a net basis.
Share based payments
The fair value of services received in exchange for the grant of share
warrants is recognised as an expense in share premium or profit or loss, in
accordance with thenature of the service provided. A corresponding increase is
recognised in equity.
Judgements and key sources of estimation uncertainty
The preparation of the Financial Statements in conformity with IFRS requires
the directors to make judgements, estimates and assumptions that affect the
amounts reported. These estimates and judgements are continually reviewed and
are based on experience and other factors, including expectations of future
events that are believed to be reasonable under the circumstances.
Accounting estimates and assumptions are made concerning the future and, by
their nature, may not accurately reflect the related actual outcome. Share
options and warrants are measured at fair value at the date of grant. The fair
value is calculated using the Black Scholes method for both options and
warrants as the management views the Black Scholes method as providing the
most reliable measure of valuation.
Contingent consideration, resulting from business combinations, is valued at
fair value at the acquisition date as part of the business combination. The
determination of fair value is based on key assumptions involving estimation
of the probability of meeting each performance target and the timing thereof.
As part of the acquisition of Lady Alice Mines Pty Ltd, contingent
consideration with an estimated fair value of £296,536 was recognised at the
acquisition date. See note 18 for further details. The Group is required to
remeasure the contingent liability at fair value at each reporting date with
changes in fair value recognised in accordance with IFRS 9. Therefore, as at
31 December 2022, the contingent consideration reflects an estimated fair
value of £148,914.
2. EXPENSES BY NATURE
31 December 31 December
2022 2021
£ £
Administrative expense 79,905 73,819
Corporate expense and Finance 169,813 191,230
Professional fees 960 960
Wages & Salaries expense 237,927 301,204
488,605 567,213
3. FINANCE COSTS
31 December 31 December
2022 2021
£ £
Loss on settlement of settlement of financial liability - 1,077,607
Other finance costs 20,530 32,691
20,530 1,110,298
4. SEGMENT INFORMATION
The Group's prime business segment is mineral exploration.
The Group operates within two geographical segments, the United Kingdom and
Australia. The UK sector consists of the parent company which provides
administrative and management services to the subsidiary undertaking based in
Australia.
The following tables present expenditure and certain asset information
regarding the Group's geographical segments for the years ended 31 December
2022 and 2021:
Operational Results 31 December 31 December
2022 2021
£ £
Revenue - -
Loss after taxation
- United Kingdom (399,363) (1,485,507)
- Australia (109,776) (192,004)
Total (509,139) (1,677,511)
2022 Australia United Kingdom Total
£ £ £
Non-current assets 2,261,779 466,939 2,728,718
Current assets 242,603 3,739,773 3,982,376
Total liabilities (34,131) (160,787) (194,918)
2021 Australia United Kingdom Total
£ £ £
Non-current assets 1,546,895 467,190 2,014,085
Current assets 92,244 209,127 301,371
Total liabilities (18,376) (219,460) (237,836)
5. DIRECTORS' EMOLUMENTS
There were no employees during the period apart from the directors, who are
the key management personnel. No directors had benefits accruing under money
purchase pension schemes.
Year ended 31 December 2022 Remuneration Fees Bonus Share Based payment Total
£ £ £ £ £
G Hancock - 36,361 - 8,143 44,504
R Verco 131,516 - - - 131,516
D Maling - 24,000 - 7,714 31,714
D Clarke - 24,000 - 8,143 32,143
131,516 84,361 - 24,000 239,877
· During the year £36,361 (2021: 38,422) was paid to Hancock Corporate
Investments Pty Ltd, a company in which Greg Hancock is a Director, in respect
of Directors fees and consultancy services.
· During the year £24,000 (2021: £24,227) was paid to Dan Maling, in
respect of Directors fees.
· During the year £24,000 (2020: £31,066) was paid to The Springton
Trust & Queens Road Mines, in which David Clarke is a Trustee, in respect
of Directors fees and consultancy services.
Year ended 31 December 2021 Remuneration Fees Bonus Share Based payment Total
£ £ £ £ £
C Moulton 92,178 - - 20,000 112,178
G Hancock - 38,422 - 8,143 46,565
D Maling - 24,227 - 8,714 32,941
D Clarke - 31,066 - 8,143 39,209
92,178 93,715 - 45,000 230,893
· During the year £112,178 (2020: £179,727) was paid to Craig Moulton
in respect of Wages & Salaries and Share based payments. The share based
payments include £20,000 for 1,333,333 shares per his employment contract.
· During the year £38,422 (2020: £22,167) was paid to Hancock Corporate
Investments Pty Ltd, a company in which Greg Hancock is a Director, in respect
of Directors fees and consultancy services.
· During the year £24,227 (2020: £13,584) was paid to Dan Maling, in
respect of Directors fees.
· During the year £31,066 (2020: £13,667) was paid to The Springton
Trust & Queens Road Mines, in which David Clarke is a Trustee, in respect
of Directors fees and consultancy services.
6. INCOME TAXES
a) Analysis of tax in the period
31 December 31 December
2022 2021
£ £
Current tax - -
Deferred taxation - -
- -
b) Factors affecting tax charge or credit for the period
The tax assessed on the loss on ordinary activities for the period differs
from the standard rate of corporation tax in the UK of 19% (2021: 19%) and
Australia of 25% (2021: 26%). The differences are explained below:
31 December 31 December
2022 2021
£ £
Loss on ordinary activities before tax (509,138) (1,677,511)
Loss multiplied by weighted average applicable rate of tax (112,010) (332,167)
Effects of:
Expenses not deductible for tax - 225,471
Losses carried forward not recognised as deferred tax assets 112,010 106,696
- -
The weighted average applicable tax rate of 22% (2021: 19.8%) used is a
combination of the standard rate of corporation tax rate for entities in the
United Kingdom of 19% (2021: 19%), and 25% (2021: 25%) in Australia.
7. EARNINGS PER SHARE
Basic and diluted loss per share is calculated by dividing the loss attributed
to ordinary shareholders of £509,138 (2021: £1,677,511 loss) by the weighted
average number of shares of 515,249,550 (2021: 360,110,510 ) in issue during
the year.
The basic and dilutive loss per share are the same as the effect of the
exercise of share warrants and options would be anti-dilutive.
8. INVESTMENTS IN SUBSIDIARY UNDERTAKINGS
Investments Loans Total
Company £ £ £
At 1 January 2022 432,260 - 432,260
At 31 December 2022 432,260 - 432,260
Investments in Group undertakings are stated at cost less impairment. In 2019
the Company acquired 100% of the issued share capital of Lady Alice Mines Pty
Ltd and in turn, 100% of the units in the Lady Alice Trust which is wholly
owned by Lady Alice Mines Pty Ltd.
At 31 December 2021 the Company held the following interests in subsidiary
undertakings, which are included in the consolidated financial statements and
are unlisted.
Name of company Registered office address Proportion held Business
Lady Alice Mines Pty Ltd Level 2, 40 Kings Park Road, West Perth, WA, Australia 100% Mining
Lady Alice Mines Unit Trust(1) Level 2, 40 Kings Park Road, West Perth, WA, Australia 100% Mining
( )
(1)Lady Alice Mines Unite Trust is a wholly owned entity of Lady Alice Mines
Pty Ltd.
9. INTANGIBLE FIXED ASSETS
Intangible assets comprise exploration and evaluation costs. Exploration and
evaluation assets are all internally generated except for those acquired at
fair value as part of a business combination.
Total
Group £
At 1 January 2021 1,495,519
Additions 516,886
At 1 January 2022 2,012,405
Additions 714,885
At 31 December 2022 2,727,290
Total
Company £
At 1 January 2021 33,251
Additions -
At 1 January 2022 33,251
Additions -
At 31 December 2022 33,251
The Directors undertook an assessment of the following areas and circumstances
that could indicate the existence of impairment:
• The Group's right to explore in an area has expired, or will expire in the
near future without renewal;
• No further exploration or evaluation is planned or budgeted for;
• A decision has been taken by the Board to discontinue exploration and
evaluation in an area due to the absence of a commercial level of reserves; or
• Sufficient data exists to indicate that the book value will not be fully
recovered from future development and production.
Following their assessment, the Directors concluded that no impairment charge
was necessary for the year ended 31 December 2022.
10. PROPERTY, PLANT AND EQUIPMENT - Group and Company
Office Equipment Total
2022
Cost £ £
At 31 December 2021 4,407 4,407
Additions during the year - -
At 31 December 2022 4,407 4,407
Depreciation
At 31 December 2021 (2,727) (2,727)
Charge for the year (252) (252)
At 31 December 2022 (2,979) (2,979)
Net book value
At 31 December 2022 1,428 1,428
Office Equipment Total
2021
Cost £ £
At 31 December 2020 4,407 4,407
Additions during the year - -
At 31 December 2021 4,407 4,407
Depreciation
At 31 December 2021 (2,727) (2,727)
Charge for the year (252) (252)
At 31 December 2022 (2,979) (2,979)
Net book value
At 31 December 2022 1,428 1,428
11. TRADE AND OTHER RECEIVABLES
Group Group Company
31 Dec 2022 31 Dec 2021 31 Dec 2022 Company
31 Dec 2021
Current £ £ £ £
Prepayments 45,211 - - -
Intercompany debtors - - 2,659,160 2,000,064
Goods & Services Tax 33,995 27,852 - -
Other debtors 5,263 9,039 5,240 9,039
84,469 36,891 2,664,400 2,009,103
The fair value of trade and other receivables approximates to their book
value. Other classes of financial assets included within trade and other
receivables do not contain impaired assets.
The carrying amounts of the Group and Company's trade and other receivables
are denominated in the following currencies:
Group Group Company 31 Dec 2022 Company 31 Dec 2021
31 Dec 2022 31 Dec 2021
£ £ £ £
UK pounds 5,240 9,039 2,664,401 2,009,103
Australian dollars 79,229 27,852 - -
84,469 36,891 2,664,401 2,009,103
12. CASH AND CASH EQUIVALENTS
Group Group Company 31 Dec 2022 Company 31 Dec 2021
31 Dec 2022 31 Dec 2021
£ £ £ £
Cash at bank and in hand 1,272,742 264,480 1,075,372 200,088
1,272,742 264,480 1,075,372 200,088
The fair value of cash at bank is the same as its carrying value.
The carrying amounts of the Group and Company's cash and cash equivalents are
denominated in the following currencies:
Group Group Company 31 Dec 2022 Company 31 Dec 2021
31 Dec 2022 31 Dec 2021
£ £ £ £
UK pounds 1,075,373 200,088 1,075,372 200,088
Australian dollars 197,370 64,392 - -
1,272,743 264,480 1,075,372 200,088
13. TRADE AND OTHER PAYABLES
Group Group Company 31 Dec 2022 Company 31 Dec 2021
31 Dec 2022 31 Dec 2021
Current £ £ £ £
Trade creditors 81,536 20,642 18,124 9,360
Accruals and deferred income 1,249 22,600 1,249 22,600
Other payables (2,786) 7,094 (7,500) -
79,999 50,336 11,873 31,960
The fair value of trade and other payables approximates to their book value.
The carrying amounts of the Group and Company's trade and other payables are
denominated in the following currencies:
Group Group Company 31 Dec 2022 Company 31 Dec 2021
31 Dec 2022 31 Dec 2021
£ £ £ £
UK pounds 38,073 31,960 11,873 31,960
Australian dollars 41,926 18,376 - -
79,999 50,336 11,873 31,960
14. CONTINGENT CONSIDERATION
2021 Total
Group and Company £
Amounts payable under business combination
At 31 December 2021 187,500
Categorised as:
Current liabilities 187,500
Non-current liabilities -
Refer to note 18 for further detail.
2022 Total
Group and Company £
Amounts payable under business combination 187,500
Less payment 38,586
At 31 December 2022 148,914
Categorised as:
Current liabilities 148,914
Non-current liabilities -
15. SHARE CAPITAL
Dec 2022 Dec 2022 Dec 2021 Dec 2021
Number Number
of shares £ of shares £
Issued, called up and fully paid
Ordinary shares of £0.01
As at the start of the year 360,110,510 3,601,104 282,956,585 2,829,566
Issued in the year 155,139,040 1,551,391 77,153,925 771,538
Total 515,249,550 5,152,495 360,110,510 3,601,104
On 16 February 2022, 63,000,000 Ordinary shares were issued pursuant to a
private placement at 1.5 pence each.
On 26 October 2022, 88,966,668 Ordinary shares were issued pursuant to a
private placement at 1.5 pence each, 2,572,372 Ordinary shares were issued to
former LAM owners at 1.5p each, and 600,000 Ordinary shares were issued to
third party suppliers for settlement of fees in lieu of cash.
As at 31 December 2022 the Company had 49,613,334 warrants outstanding (2020:
67,543,461).
Each Ordinary share is entitled to one vote in any circumstances. Each
Ordinary share is entitled pari passu to dividend payments or any other
distribution and to participate in a distribution arising from a winding up of
the Company.
16. SHARE BASED PAYMENTS
2022
Warrants
Warrants Number Weighted average exercise price
Warrants at 31 December 2021 67,543,461 0.03p
Granted during year 49,613,334 0.03p
Exercised during year - -
Lapsed during year (67,543,461) 0.03p
49,613,334 0.03p
Warrants at 31 December 2022
Exercisable at year end 49,613,334 0.03p
At 31 December 2022 the weighted average remaining contractual life of the
warrants outstanding was 2.78 years.
2021
Warrants
Warrants Number Weighted average exercise price
Warrants at 31 December 2020 127,796,891 0.02p
Granted during year - -
Exercised during year (5,934,801) 0.02p
Lapsed during year (54,318,629) 0.02p
67,543,461 0.03p
Warrants at 31 December 2021
Exercisable at year end 67,543,461 0.03p
At 31 December 2021 the weighted average remaining contractual life of the
warrants outstanding was 0.82 years.
2022
Options
Options Number Weighted average exercise price
Options at 31 December 2021 15,672,336 0.033p
Issued during the period - -
Exercised during the year - -
Options at 31 December 2022 15,672,336 0.033p
Exercisable at year end 672,336 0.015p
At 31 December 2022 the weighted average remaining contractual life of the
options outstanding was 2.43 years.
2021
Options
Options Number Weighted average exercise price
Options at 31 December 2020 15,672,336 0.033p
Issued during the period - -
Exercised during the year - -
Options at 31 December 2021 15,672,336 0.033p
Exercisable at year end 672,336 0.015p
At 31 December 2021 the weighted average remaining contractual life of the
options outstanding was 3.43 years.
The fair value of equity settled share options and warrants granted is
estimated at the date of grant using a Black-Scholes option pricing model,
taking into account the terms and conditions upon which the options were
granted. The following table lists the inputs to the model:
Options Warrants Warrants
Date of grant 14 July 2020 16 February 2022 26 October 2022
Expected volatility 94.59% 104.98% 96.35%
Expected life 5 3 3
Risk-free interest rate 0.10% 1.29% 3.36%
Expected dividend yield 0.00% 0.00% 0.00%
Fair value per option/warrant
£0.008 £0.013 £0.009
17. FINANCIAL INSTRUMENTS
Group Group Company Company
31 Dec 2022 31 Dec 2021 31 Dec 2022 31 Dec 2021
£ £ £ £
Financial assets at amortised cost
Trade and other receivables excluding prepayments 50,474 36,891 2,664,401 2,009,103
Cash and cash equivalents 1,272,742 264,480 1,075,373 200,088
1,323,216 301,371 3,739,774 2,209,191
Financial liabilities
Trade and other payables (at amortised cost) (46,004) (27,736) (11,873) (9,360)
Deferred consideration (at FVPL) (148,914) (187,500) (148,914) (187,500)
(194,918) (215,236) (160,787) (196,860)
18. BUSINESS COMBINATION
Lady Alice Mines Pty Ltd
On 7 March 2019, the Company acquired 100% of the share capital of Lady Alice
Mines Pty Ltd ('LAM') and its wholly owned subsidiary The Lady Alice Trust
(the 'Trust'), for total consideration of £432,260 which is to be satisfied
via a mix of cash and share consideration which is shown below. In addition,
the Company agreed to settle existing liabilities due to unitholders of the
Trust of up to A$250,000. The share based payment consideration was settled on
16 January 2020 upon the successful re-admission to the London's Stock
Exchange Main Market. 10,815,297 shares were issued at a close price of 1.25p.
The Trust has an entitlement to earn a 75% equity interest in tenements near
Wudinna in South Australia for gold exploration (the 'Wudinna Agreement'), and
is also the sole owner of the right, title and interest in the Prince Alfred
Licence, a formerly producing copper mine.
The principal terms of the Wudinna Agreement are as follows:
· Stage 1: the Trust will fund A$2.1 million within three years to earn
a 50% equity position
· Stage 2: at the completion of Stage 1, a joint venture vehicle can be
formed, or alternatively the Trust can spend a further A$1.65 million over an
additional two years to earn a 65% equity interest
· Stage 3: at the completion of Stage 2, a joint venture vehicle can be
formed, or alternatively the Trust can spend a further A$1.25 million within
one year to earn a 75% equity interest
The contingent consideration is due to the unitholders on satisfying the
following project milestones:
· First Option - 14% of the total issued share capital on completion of
Stage 1
· Second Option - 21% of the total issued share capital on completion
of Stage 2
· Third Option - 30,000,000 ordinary shares on announcement of a
JORC-compliant Indicated Mineral Resource for the Wudinna Project of not less
than 750,000 ounces of gold
The Directors have calculated the consideration payable on a probability basis
of satisfying the project milestones in accordance with IFRS 3 Business
Combinations. The Directors have also estimated the number of shares to be
issued at each milestone and the share price. This has been fixed at the
number of consideration shares issued at the time of the RTO and the share
price at that time. Management believe this is a best estimate.
19. RELATED PARTY TRANSACTIONS
Save as disclosed below there were no related party transactions during the
year other than remuneration to Directors disclosed in note 5.
During the year, the Group paid £9,000 in advisor fees to Orana Corporate
LLP, an entity in which Daniel Maling is a Partner.
During the year, the Group paid £131,516 to Rupert Verco, Chief Executive
Officer of the Company Mr Verco was appointed as CEO with effect from 12 July
2021.
As at 31 December 2022 included in the other receivables is £2,659,160 due
from Lady Alice Mines Pty Ltd, a subsidiary company. The loan is interest free
and repayable on demand.
20. FINANCIAL RISK MANAGEMENT
20.1 Financial risk factors
The Group's activities expose it to a variety of financial risks: market 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.
Risk management is carried out by executive management.
a) Market risk
The Group is exposed to market risk, primarily relating to foreign exchange
and commodity prices. The Group does not hedge against market risks as the
exposure is not deemed sufficient to enter into forward contracts. The Company
has not sensitised the figures for fluctuations in foreign exchange or
commodity prices as the Directors are of the opinion that these fluctuations
would not have a significant impact on the Financial Statements at the present
time. The Directors will continue to assess the effect of movements in market
risks on the Group's financial operations and initiate suitable risk
management measures where necessary.
b) Credit risk
Credit risk arises from cash and cash equivalents as well as outstanding
receivables. To manage this risk, the Group periodically assesses the
financial reliability of customers and counterparties.
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. The Company will only keep its
holdings of cash with institutions which have a minimum credit rating of 'A'.
c) Liquidity risk
The Company's continued future operations depend on the ability to raise
sufficient working capital through the issue of equity share capital or debt.
The Directors are reasonably confident that adequate funding will be
forthcoming with which to finance operations. Controls over expenditure are
carefully managed.
The following table summarizes the Group's significant remaining contractual
maturities for financial liabilities at 31 December 2022.
Contractual maturity analysis as at 31 December 2022
2022 2021
Less than 12 Less than 12
Months 1 - 5 Months 1 - 5
£ Year Total £ Year Total
£ £ £ £
Accounts payable 81,536 - 81,536 20,642 - 20,642
Accrued liabilities 1,249 - 1,249 22,600 - 22,600
82,785 - 82,785 43,242 - 43,242
20.2 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 enable the Group to
continue to explore, develop and mine precious and base metal projects. In
order to maintain or adjust the capital structure, the Group may adjust the
issue of shares or sell assets to reduce debts.
The Group defines capital based on the total equity and reserves of the Group.
The Group monitors its level of cash resources available against future
planned operational activities and may issue new shares in order to raise
further funds from time to time.
21. CAPITAL COMMITMENTS & CONTINGENT LIABILITIES
As at 31 December 2022 the Group had £69,396 of capital commitments in
relation to operating activities at the Wudinna Gold Project.
There were no changes to contingent liabilities as at 31 December 2022.
22. POST YEAR END EVENTS
On the 9 January 2023 the Company announced a maiden JORC compliant rare earth
resource estimate at the Clarke and Baggy Green Gold prospects of 20.9Mt at
658ppm TREO.
On the 1 February 2023, the Company provided access to Andromeda Metals for an
independent audit of its project expenditure in relation to confirmation of
achieving the Stage 3 expenditure milestone of the Wudinna Heads of Agreement.
Audit findings subsequently confirmed the Group's expenditure, and
acknowledged the Group's 75% ownership.
23. ULTIMATE CONTROLLING PARTY
There is no ultimate controlling party.
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