REG - Cobra Resources PLC - Final Results for the Year Ended 31 December 2023
30/04/2024 07:00
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RNS Number : 4998M Cobra Resources PLC 30 April 2024
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30 April 2024
Cobra Resources plc
("Cobra" or the "Company")
Final Results for the Year Ended 31 December 2023
Cobra (https://cobraplc.com/) (LSE: COBR)
(https://www.londonstockexchange.com/stock/COBR/cobra-resources-plc/company-page)
, an exploration company focused on the Wudinna Project in South Australia,
announces its final results for the year ended 31 December 2023.
Highlights
· Announced transformational discovery of ionic rare earth ("REE")
mineralisation at the Boland prospect which is amenable to low cost, low
disturbance in situ recovery ("ISR") mining
· Published maiden REE Mineral Resource Estimate ("MRE") of 20.9 Mt at
658 ppm Total Rare Earth Oxides ("TREO") in saprolite above and proximal to
gold mineralisation, which has since been upgraded to 41.6 Mt at 699 ppm TREO
(not yet inclusive of any resources for the Boland discovery)
· Increased gold MRE by 32% to 279,000 Oz
· Granted new tenement (Deloraine) in Tasmania considered highly
prospective for Ion Adsorption Clay ("IAC") hosted REE mineralisation
· Raised £991,300 through a two-stage placing (completed pre and post
year-end) to satisfy the cash consideration for the acquisition of the
remaining 25% of the Wudinna Project from Andromeda Metals (ASX: ADN) and to
advance the Boland ionic rare earth discovery
Post Year End
· Completed Sonic core drilling programme at Boland
o Preliminary results further demonstrate that the discovery could be a
world class source of magnet and heavy REEs and confirm the Company's thesis
that grade concentrations are high, mineralisation is amenable to ISR, and the
discovery has exceptional regional scale potential
· Finalised acquisition of the remaining 25% of the Wudinna Project
from Andromeda Metals
· Announced re-assay results from historical drillholes which support
regionally scalable, high grade REE mineralisation at Boland
· Raised £600,000 through a placing to accelerate the development of
the Boland discovery towards a Scoping Study
· Granted two new tenements (Smokey Bay and Pureba) on the Narlaby
Palaeochannel which is considered highly prospective for ionic REE
mineralisation
· Updated the Company's REE strategy to include tests for extensions to
roll-front uranium mineralisation identified at the adjacent Yarranna Uranium
Project held by IsoEnergy (TSX-V: ISO) which extends onto the newly granted
Pureba tenement
· Appointed David Clarke in an executive role as Director, Business
Development and Asset Marketing to help advance the commercialisation pathway
of the Boland discovery
Greg Hancock, Chairman of Cobra, commented:
"The Company has consciously allocated its capital to ensure that future
shareholder value is obtained through exploration success and the definition
of resources. Delivering substantial increases in gold and REE resources
provides a solid foundation but the upside post the discovery in 2023 of
Australia's only REE project with ISR potential is exceptional, and an
opportunity we look forward to advancing.
We are committed to unlocking the mineral wealth of the Wudinna Project and
the greater Eyre Peninsula region and to providing a low cost, low disturbance
supply of magnet and heavy REEs from outside of China."
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
Global Investment Strategy (Joint Broker) +44 (0)20 7048 9437
James Sheehan james.sheehan@gisukltd.com
Vigo Consulting (Financial Public Relations) +44 (0)20 7390 0234
Ben Simons cobra@vigoconsulting.com
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 1,832km(2), and other nearby tenement rights totalling 2,941km(2),
contain highly desirable and ionic rare earth mineralisation amenable to
low-cost, low impact in situ recovery mining, and critical to global
decarbonisation. Cobra's greater Wudinna tenements are also prospective for
uranium. Additionally, Cobra holds a 213km(2) exploration tenement in northern
Tasmania which is also considered highly prospective for ionic rare earth
mineralisation.
Cobra's Wudinna tenements also 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 279,000 Oz gold JORC Mineral Resource Estimate,
and several iron oxide copper gold (IOCG) targets.
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CHAIRMAN'S STATEMENT
INTRODUCTION
In 2023, Cobra made a game-changing ionic Rare Earth Element ("REE") discovery
at Boland that has the potential to reshape global supply of magnet and heavy
REEs, and materialised significant exploration success by gold and REE
resource growth. The unique geology of the Boland discovery lends itself to In
Situ Recovery ("ISR") mining. This is a huge advantage for the Company that
makes Boland highly cost competitive and unrivalled for environmental
credentials.
The value of ionic REE discoveries is defined from their cost-efficient
metallurgy and their simplistic mining process. Australia's long climate
history and relatively arid climate mean that many Australian clay hosted REE
discoveries lack the simple chemistry that enables cost efficient extraction.
Cobra is focusing on the efficiencies required to make REE mining successful.
This has been achieved through defining a 41.6Mt REE resource that sits within
clay overburden to a shallow 279,000 Oz gold resource, and discovering
standalone ionic REEs with excellent metallurgy that are present within a
geological setting that lends itself to ISR mining - the lowest cost method
available.
ISR mining has been highly successful in the uranium industry where over 50%
of the global average annual production is mined via ISR. The CAPEX, OPEX and
scale of these mines yield the lowest costs. We believe that by applying this
form of mining at Boland, a future operation could be cost competitive with
the ionic REE producers of southern China.
The Boland discovery is regionally scalable and the Company has expanded its
landholding along the Narlaby Palaeochannel from 3,621km(2) to 4,773km(2) to
have a controlling land position within a jurisdiction that actively regulates
and supports ISR mining.
During the year, the Company demonstrated both technical capability and
prudent use of finances through executing a 20-hole, 2,466m Reverse
Circulation ("RC") programme and a 95-hole, 3,950m Aircore ("AC") drilling
programme that contributed to:
· The Boland discovery that has yielded high grade ionic REEs with
favourable metallurgy, achieving recoveries of up to 79% Tb, 67% Dy, 60% Nd
and 47% Pr at pH3 with low acid consumptions
· A 109% increase in the complementary clay hosted REE resource
that occurs within gold resource overburden
· A 32% increase in the Wudinna Project gold mineral resource that
now stands at 279,000 Oz and is amenable to open pit mining
The Company is also pleased to have finalised its acquisition of the remaining
25% of the Wudinna Project, welcoming Andromeda Metals (ASX: ADN) to the share
register as a significant shareholder.
In the current turbulent gold and critical minerals markets, where gold prices
are at all-time highs but investment sentiment remains suppressed, it is
important for junior explorers to have upside exposure to a range of
commodities and the ability to advance the economic assessment of production
at an early stage. Cobra is well placed to provide shareholders with exposure
to:
· A scalable and low-cost source of magnet and heavy REEs which are
critical to electrification and from which we plan to demonstrate value
through ISR
· The rising gold price as we evaluate commercial opportunities for the
Wudinna gold resource
· The strong uranium market where our recently added land tenure
contains defined sandstone hosted uranium mineralisation - Cobra will look to
grow these assets as we demonstrate the regional scale of the Boland ionic REE
discovery
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 211,000 Oz gold JORC Mineral Resource Estimate
at the project, and the success of this strategy materialised during 2023 when
the Company increased the gold resource by 32% to 279,000 Oz whilst defining a
complementary source of REE metals in gold overburden.
Since Cobra's involvement in the Wudinna Project began in 2019, the Company's
approach to exploration has been to provide 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 2023 focused on:
1. Adding ounces to the Wudinna Gold Resource
2. Defining a complementary REE resource that adds economic value to
gold resources and provides a competitive basis for REE extraction
3. Advancing an exploration model for ionic REEs amenable to cost
efficient ISR extraction
Since identifying REEs in saprolite at the Wudinna Project in 2021, the
Company has diligently assessed the economic, mineralogical and metallurgical
requirements that underpin a successful REE project and has considered that
the economic viability of clay hosted REEs is more dependent upon low mining
and processing costs, a consequence of mineralogy rather than grade. On this
basis, the Company has focused on:
1. REE resource expansion aimed at growing its complementary dual gold
and REE resources, where the spatial proximity of REE mineralisation to gold
enables cost efficient, value add potential
o This resulted in an REE JORC resource to date of 41.6Mt at 699 ppm TREO
overlying the Clarke and Baggy Green gold resources
2. Targeting low cost, easily extractable ionic clay hosted
mineralisation by defining and targeting conditions that promote ionic
mineralisation
By focusing on the environmental and chemical conditions that promote ionic
adsorption, the Company defined an exploration model that satisfied the
geological conditions for ionic adsorption and supported the potential for
cost-efficient ISR mining.
AC drilling confirmed the presence of REE mineralisation within palaeochannel
sediments at the Boland prospect in June 2023, where basket accumulations
contained both enriched and depleted zones of Heavy Rare Earths Elements
("HREEs"), a common trait of ionic REE deposits. Follow-up metallurgical tests
performed by Australia's Nuclear Science and Technology Organisation ("ANSTO")
confirmed high recoveries of heavy and magnet REEs across three zones, where
acid consumptions are low and recoveries are achieved over six hours. Owing to
the interbedded presence of highly permeable sand layers, the Company believed
that mineralisation could be recovered via ISR.
In November 2023, the Company finalised a deal to acquire the remaining 25% of
the Wudinna Project from Peninsula Resources and subsequently raised £993,000
to fund the acquisition and advance the Boland discovery. The strategy to
demonstrate the value of the discovery is to focus on advancing three key
components:
1. Scale: the Narlaby Palaeochannel is a significant system spanning
over 250km in length. Cobra holds over 1,000km(2) of palaeochannel ground
across the Narlaby, Yaninee and Corrobinnie systems - the geological units
that host ionic REEs occur across all these systems.
2. Grade concentration: the catalysts for ionic adsorption are believed
to be confined to, or within proximity to, geology with high permeability.
Samples from initial AC drilling were performed on 3m composites that were
unlikely to represent the true nature of the mineralisation.
3. ISR potential: aim to de-risk the ISR potential of Boland by
installing ISR infrastructure to advance the project to a pilot study.
OPERATIONAL REVIEW
Results from the 2023 exploration programme contributed to exploration success
and significant resource growth which was achieved through:
· Drilling of 20 RC holes for ~2,500m aimed at expanding existing gold
resources
· Drilling of 95 AC drillholes for over 3,950m aimed at expanding the
existing complementary REE resource and testing an alternate model for ionic
REEs
· Metallurgical testing of over 20 composite samples
AC Drilling - The Boland Discovery
A total of 17 holes for 775m were drilled at the Boland prospect. Significant
results included:
· CBAC0164: 3m at 942 ppm TREO (22% Magnet Rare Earth Oxides ("MREO"))
from 15m, and 3m at 1,333 ppm TREO (13% MREO) from 30m and 42m at 2,189 ppm
TREO (25% MREO) from 36m
· CBAC0163: 3m at 559 ppm TREO (24% MREO) from 18m, and 3m at 618 ppm
TREO (22% MREO) from 21m and 12m at 1,191 ppm TREO (27% MREO) from 36m
· CBAC0168: 12m at 948 ppm TREO (19% MREO) from 42m
· CBAC0176: 3m at 429 ppm TREO (23% MREO) from 27m, and 3m at 661 ppm
TREO (19% MREO) from 48m and 3m at 1,984 ppm TREO (22% MREO) from 54m
Results demonstrated:
· Mineralisation is most prominent along the eastern margin of the
tested area, where channel clays are in direct contact with granitic saprolite
· HREEs are depleted within saprolite zones and enriched in assemblage
within the palaeochannel sediments
· REE enrichment in playa smectite clays at discrete changes in sample
acidity/alkalinity
· Light Rare Earth Oxides ("LREO") enrichment in saprolite that is in
direct contact with palaeochannel sediments
· REE grades are highest where there are the greatest changes in
alkalinity/acidity i.e. between acidic saprolite and alkaline smectite clays
Confirmation of Ionic Mineralisation Through ANSTO Metallurgical Testing
A total of 15 composite samples from the Boland prospect were submitted to
ANSTO for ionic desorption testing. ANSTO is a world leader in REE metallurgy
and the development in REE metallurgical flowsheets. Diagnostic testing
parameters included:
· 0.5 M (NH4)2SO4 as lixiviant
· pH4; pH3
· pH4: 0.5 h & 6 h, pH3: 0.5 h, 2 h & 6 h
· Ambient temperature (~22°C)
· 4 wt% solids density
· Acidity maintained through the addition of H2SO4
Results confirmed highly recoverable ionic mineralisation within the
palaeochannel sediments with low acid consumptions. Higher recoveries were
achieved by increasing the acidity to pH3 and increasing the leach time to six
hours. Recoveries are summarised in the table below:
Average recoveries of tested composites by mineralisation zone.
Min Zone Lith Summary Acidity (pH) Pr Nd Tb Dy Acid consumption (kg/t)
Zone 1 Upper playa clay 4 16% 20% 31% 33% 15.9
3 22% 26% 31% 40% 29.1
Zone 2 Middle playa clay and sand interbeds 4 22% 25% 37% 41% 17.3
3 36% 40% 52% 54% 28.8
Zone 3 Organic rich - clayey sand 4 35% 45% 44% 49% 9.4
3 47% 60% 79% 67% 17.6
Upper Saprolite Weathered granite 4 8% 11% 21% 16% 10.9
3 9% 13% 27% 25% 29.2
Metallurgical results demonstrate:
· Desorption is greatest within palaeochannel clays
· Zone 3 exhibits the highest metallurgical recoveries with the lowest
acid consumption
· Recoveries increase with time and increasing acidity
· HREOs are recovered in greater ratios than LREOs
· Moderate desorption times are interpreted to be a consequence of
sample composite dilution. Faster desorption rates are likely with refined
sample compositing
· Acid consumption calculations includes ions (Mg, Na & K) that are
likely to be present in salts and therefore acid consumptions are likely to be
lower than presented
RC Drilling
A gold focused, 20-hole, 2,466m RC programme aimed at expanding the Wudinna
Project's existing gold and REE resources delivered the following gold
results:
White Tank
· CBRC0070 intersected 12m at 2.35 g/t Au from 54m (including 2m at 8.5
g/t Au from 55m) 40m east of RHBN-0248 that intersected 21m at 2.9 g/t Au from
59m (including 6m at 7.95 g/t Au from 61m)
· CBRC0069 intersected 9m at 0.41 g/t Au from 46m 80m east of RCBN-246
that intersected 3m at 0.53 g/t Au from 115m and represents the most southern
intersection at White Tank
Barns Prospect
· CBRC0072 intersected 2m at 0.69 g/t Au from 45m confirming up dip
extensions to the gold resource
· CBAC0092 intersected 2m at 1.00 g/t Au from 12m
At Clarke, drilling extended the strike of intersected gold mineralisation to
beyond 700m where:
· Mineralisation has been extended a further 50m to the south through:
o CBRC0075 intersecting 2m at 0.93 g/t Au from 58m and 1m at 0.56 g/t Au
from 73m
o CBRC0076 intersecting 8m at 0.63 g/t Au from 101m including 1m at 1.93 g/t
Au from 105m
· Mineralisation to the north increased in strike by a further 50m
beyond the 2022 drilling intersection of CBRC0059 that intersected 6m at 4.15
g/t Au from 34m (including 4m at 5.74 g/t Au) through:
o CBRC0082 intersecting 2m at 0.61 g/t Au from 137m
o CBRC0083 intersecting 1m at 0.80 g/t Au from 64m and 1m at 0.70 g/t Au
from 122m
· Down dip continuities were validated through additional
intersections, including:
o CBRC0077 intersecting 1m at 0.55 g.t Au from 91m and 4m at 0.80 g/t Au
from 96m (including 1m at 2.09 g/t Au)
o CBRC0078 intersecting 1m at 1.37 g/t Au from 81m and 1m at 1.50 g/t Au
from 90m and 37m at 0.50 g/t Au from 100m (including 2m at 4.58 g/t Au)
o CBRC0086 intersecting 3m at 1.13 g/t Au from 123m validating the down dip
continuity of the intersection received in CBRC0050 that intersected 33m at
1.03 g/t Au from 65m that was drilled in 2021
AC Drilling Programme
A total of 78 holes across seven targets were drilled to define REE resource
extensions, test priority REE targets and assess further gold anomalies
results, including at:
· Clarke North, where a further 1km(2) of REE mineralisation was
defined through the following intersections:
o CBAC0109: 25m at 739 ppm TREO from 12m, where the MREO equates to 26%,
including 9m at 1187 ppm TREO, where the MREO equates to 28%
o CBAC0108: 10m at 710 ppm TREO from 27m, where the MREO equates to 22%
o CBAC0105: 12m at 550 ppm TREO from 18m, where the MREO equates to 21%
o CBAC0105: 12m at 550 ppm TREO from 18m, where the MREO equates to 21%
o CBAC0104: 6m at 719 ppm TREO from 16m, where the MREO equates to 17%
o CBAC0103: 6m at 602 ppm TREO from 18m, where the MREO equates to 22% and
2m at 683 ppm TREO from 40m, where the MREO equates to 23%
o CBAC0102: 4m at 831 ppm TREO from 14m, where the MREO equates to 28%
· Clarke South, where results from 8 of 11 holes received demonstrated
further REE mineralisation beyond the southern extent of Clarke gold
mineralisation and the REE resource extent with the following intersections:
o CBAC0112: 6m at 621 ppm TREO from 24m, where the MREO equates to 23%
o CBAC0113: 15m at 607 ppm TREO from 18m, where the MREO equates to 23%,
including 3m at 1146 ppm TREO from 18m, where the MREO equates to 24%
o CBAC0114: 21m at 736 ppm TREO from 15m, where the MREO equates to 24%,
including 3m at 1298 ppm TREO from 33m, where the MREO equates to 22%
o CBAC0115: 3m at 674 ppm TREO from 21m, where the MREO equates to 29%
o CBAC0116: 3m at 634 ppm TREO from 21m, where the MREO equates to 26%, and
3m at 609 ppm TREO from 36m, where the MREO equates to 22%
o CBAC0130: 10m at 2,349 ppm TREO (23% MREO) from 21m, including 3m at 5,382
ppm TREO (23% MREO)
o CBAC0128: 23m at 847 ppm TREO (23% MREO) from 12m, including 3m at 1,701
ppm TREO (24% MREO) from 12m
o CBAC0133: 15m at 1,040 ppm TREO (22% MREO) from 24m, including 6m at 1,206
ppm TREO (22% MREO) from 27m
o CBAC0135: 3m at 1823 ppm TREO from 18m, where the MREO equates to 22%
o CBAC0137: 12m at 629 ppm TREO from 15m, where the MREO equates to 20%
· Grace, where 23 exploration holes were drilled to test structures
similar to gold and REE enriched structures at the Clarke prospect. Results
from 11 holes received include:
o CBAC0146: 3m at 544 ppm TREO from 18m, where the MREO equates to 23%
o CBAC0141: 9m at 756 ppm TREO from 21m, where the MREO equates to 21%
o CBAC0139: 13m at 698 ppm TREO from 24m, where the MREO equates to 21%
o CBAC0179: 18m at 2,854 ppm TREO (24% MREO) from 36m, including 6m at 5,066
ppm TREO (25% MREO) from 39m
o CBAC0180: 9m at 1,107 ppm TREO (22% MREO) from 39m
· Baggy Green West, where results from two of six holes drilled tested
demagnetised zones that demonstrate increased saprolite horizons prospective
for REE resource extensions, as supported by:
o CBAC0135: 3m at 1,823 ppm TREO from 18m, where the MREO equates to 22%
o CBAC0134: 18m at 1,123 ppm TREO from 21m, where the MREO equates to 21%,
including 3m at 3,568 ppm TREO from 24m, where the MREO equates to 21%
· Bradman, where 11 holes have verified the electromagnetic
interpretation of an extensive palaeo-drainage system. Here, the channel
sediments are more oxidised and clay intervals limited, and REE mineralisation
is enriched on the contact to the palaeo-sediments, where the following
intersections are present:
o CBAC0147: 9m at 977 ppm TREO from 12m, where the MREO equates to 19%,
including 3m at 1,719 ppm TREO from 12m, where the MREO equates to 19%
o CBAC0149: 9m at 897 ppm TREO from 54m, where the MREO equates to 23%,
including 6m at 1,076 ppm TREO from 54m, where the MREO equates to 23%
o CBAC0153: 6m at 821 ppm TREO from 27m, where the MREO equates to 19%
o CBAC0156: 15m at 825 ppm TREO from 45m, where the MREO equates to 25%,
including 3m at 1417 ppm TREO from 48m, where the MREO equates to 25%
o CBAC0158: 15m at 946 ppm TREO from 33m, where the MREO equates to 24%,
including 3m at 1687 ppm TREO from 33m, where the MREO equates to 22%
o CBAC0159: 6m at 637 ppm TREO from 54m, where the MREO equates to 23%
Update to Mineral Resource Estimates
During 2023, Cobra published three resource updates:
In January 2023, the Company released a maiden inferred REE JORC 2012 Mineral
Resource Estimate ("MRE") of 20.9Mt and 658 ppm TREO, where MREO equate to
23.6% of the TREO. The MRE covers the Clarke and Baggy Green prospects, where
underlying gold mineralisation is expected to improve future economic analysis
of the published resource.
Following the 2,466m RC and 3,950 AC drilling campaigns, the Company
incorporated both sets of drilling results and updated both gold and REE MREs.
This update yielded considerable increases in resources that are summarised
below (and are not yet inclusive of any REE resources for the Boland
discovery):
REE MRE Update:
· Upgraded REE MRE includes:
o +99% increase in tonnes
o +5% increase in MREO grade
o +109% increase in MREO metal content
· An exclusively unique REE resource that overlies the Baggy Green, and
now, Clarke gold resources, providing a competitive metric for low operational
costs
Gold MRE Update:
· Upgraded gold MRE includes:
o +32% increase in gold metal (+68,000 Oz)
o +1.4Mt increase in ore tonnes
o 33,000 Oz maiden MRE estimate at the Clarke prospect
· Shallow resource - all resource ounces occur within 200m of surface,
presenting as low cost, camp scale open pit extraction with enhanced economics
from REE overburden
· Total gold resource of 5.81Mt at 1.5 g/t Au for 279,000 Oz
· Gold ounce increases across all deposits, demonstrating potential for
additional growth through infill and further extensional drilling
The 2023 Gold and REE JORC MRE update is tabled below:
Gold Mineral Resource estimate REE Mineral Resource estimate
Category Deposit Tonnes Au Ounces Tonnes TREO MREO LREO HREO Pr(6)O(11) Nd(2)O(3) Dy(2)O(3) Tb(4)O(7)
Mt g/t oz Mt ppm ppm ppm ppm ppm ppm ppm ppm
Indicated Barns 0.44 1.3 18,000 - - - - - - - - -
Inferred 2.19 1.6 116,000 - - - - - - - - -
Inferred Baggy Green 2.12 1.4 96,000 15.1 652 142 512 140 29 97 14 2
Inferred Clarke 0.73 1.4 33,000 26.5 725 175 571 154 35 122 16 3
Inferred White Tank 0.33 1.5 16,000 - - - - - - - - -
Total 5.81 1.5 279,000 41.6 699 163 549 149 33 113 15 3
Resource estimates were prepared by external consultants Mrs Justine Tracey
and Mrs Christine Standing of Snowden Optiro.
Granting of New Project
In November 2023, the Company was granted a new tenement named "Deloraine",
located in northern Tasmania. The tenement ("EL22/2022") was staked in 2022 as
the Company considered that the ground was prospective for further extensions
to the neighbouring Deep Leads-Rubble Mound 52Mt 817 ppm TREO REE Resource
owned by ABX group. The Deep Leads-Rubble Mound REE project has ionic
metallurgy comparative to Cobra's Boland project.
Whilst this project will not be the Company's main focus going forward, Cobra
believes it can materially add value to the project by cost effectively:
1. Defining the extent of palaeovalley colluvium that hosts the ionic
mineralisation through low-cost Loupe TEM geophysics
2. Confirming the presence of REE mineralisation across mapped channels
by shallow auger drilling
3. Confirming ionic metallurgy through sighter testing
100% Wudinna Project Acquisition (refer to note 22 for further detail)
In November 2023, the Company announced that it had signed an agreement to
acquire the remaining 25% of the Wudinna project from Andromeda Metals for
A$500,000 cash and A$1,000,000 in consideration shares issued at 1p. Pursuant
to the Wudinna Subdivision and Sale Agreement, Cobra's wholly owned subsidiary
will acquire all the exploration rights in the relevant tenements held by
Andromeda's subsidiary Peninsula Resources Pty Ltd ("Peninsula") by Peninsula
relinquishing existing tenement rights and LAM applying for the grant of new
tenements over the areas. The partial surrender process is a preferred process
for acquisition as the granting of new tenements resets the tenement clocks,
enabling renewals of up to a further 18 years. The transaction process is
expected to be completed in May of this year.
ISSUES OF SHARES DURING THE PERIOD
On 21 November 2023, 74,400,000 shares were issued raising £744,000. A
further 2,730,000 shares were issued in lieu of fees. All shares were issued
at a 10% premium (1p) to the trading price. On 14 December 2023, shareholders
approved the acquisition of the remaining 25% of the Wudinna Project through
the issue of 52,000,000 "Consideration Shares".
Post period, a prospectus was published for the issue of the Consideration
Shares and to raise a further £220,000 through the issue of 22,000,000
shares.
POST PERIOD END EVENTS
As stated above, post period, a prospectus was published for the issue of the
Consideration Shares and to raise a further £220,000 through the issue of
22,000,000 shares.
Also, in January 2024, Cobra was granted two additional tenements (EL 6966
"Smokey Bay" and EL 6967 "Pureba"). The tenements cover a combined 1,512km(2)
and overlie a further 1,000km(2) of the Narlaby paleochannel, the system that
hosts the Boland ionic discovery located at the Wudinna Project. The
prospectivity of the new tenements can be summarised as follows:
· A review of historical datasets confirms that the geological units
host ionic REEs
· Cobra's newly granted tenement EL 6967 ("Pureba") covers the eastern
roll-front mineralisation of the Yarranna South East prospect, where numerous
intersections occur within broad > 200m spaced drilling from multiple
mapped roll-fronts where, on Cobra's tenement, they exceed 3km in length and
remain open. Intersections include(1):
o 1m at 708 ppm U(3)O(8) from 66m (IR1436)
o 3m at 340 ppm U(3)O(8) from 72m, including 1m at 420ppm U(3)O(8) from
73m (IR1435)
o 1m at 209 ppm U(3)O(8) from 68m (IR1448)
o 0.95m at 617 ppm eU(3)O(8) from 69.95m (IR1065)
· Historical plans and reports reference gamma eU3O8 grades of up to
1,000 ppm(2). Samples from these holes are being sought from the South
Australian core library to be analysed as part of Cobra's REE re-analysis
strategy to confirm the grade of uranium mineralisation.
· Similar geological mechanisms dictate REE and uranium mobilisation
through the palaeochannel system where economic occurrences may be recoverable
through low-cost, low disturbance ISR mining.
REEs and uranium are sourced from similar minerals such as zircon, monazite,
and xenotime within the enriched Hiltaba Suite granites of the Gawler Craton.
Natural weathering and supergene leaching mobilises both uranium and REEs
within acidic (and enriched) groundwaters that migrate through the Narlaby
system. Whilst the chemistry for the secondary deposition for REDOX and ionic
adsorption differ, the geological mechanisms that promote the oxidation for
REDOX roll-fronts are likely to produce chemical boundaries that promote
physisorption (the adsorption of REEs to clays). This warrants that the
exploration approach targets oxidation sources that promote the deposition of
both REEs and uranium.
On the 22 April 2024, the Company announced that subject to only departmental
and ministerial approvals, the Wudinna Sale Transaction, entitling Cobra to
100% ownership of the Wudinna Project had been completed.
On 26 April 2024, the Company announced the completion of a share placement
raising £600,000 through the issue of 60,000,000 ordinary shares. The shares
will be admitted to trading after the date of signing this report, on 2 May
2024.
Boland Project Advancement
In February 2024, Cobra completed a five drillhole sonic core drilling
programme aimed at advancing the Boland ionic REE discovery by:
· Installing x5 cased bores to form the infrastructure for a future ISR
pilot study
· Gaining better understanding of the nature of the ionic REE
mineralisation and its amenability to ISR
· Obtaining samples to perform bench scale ISR tests and to obtain
sufficient samples to advance the development of a processing flow sheet
In March 2024, Cobra announced preliminary results from the drilling programme
which further demonstrated that the discovery could be a world class source of
magnet and heavy rare earths.
Sonic core drilling provided greater geological detail which confirmed the
Company's thesis that grade concentrations are high, mineralisation is
amenable to low-cost extraction via ISR, and the discovery has exceptional
province scale potential. Results demonstrated:
· High grade concentrations across three zones of mineralisation
· High grades in geological formations with high permeabilities
amenable to ISR
· Modelled mineralised units support exceptional scale
In April 2024, Cobra announced re-assay results from historical drillholes
which support regionally scalable, high grade REE mineralisation at Boland
which is amenable to ISR.
CONCLUSION
The Company has consciously allocated its capital to ensure that future
shareholder value is obtained through exploration success and the definition
of resources. Delivering substantial increases in gold and REE resources
provides a solid foundation but the upside post the discovery of Australia's
only REE project with ISR potential is exceptional, and an opportunity we look
forward to advancing. I thank my fellow directors for their contribution
throughout the year, our CEO Rupert Verco, and Exploration Manager Robert
Blythman, for their tireless efforts, our valued stakeholders, and our
contractors and service providers. We are committed to unlocking the mineral
wealth of the Wudinna Project and the greater Eyre Peninsula region and to
providing a low cost, low disturbance supply of magnet and heavy REEs from
outside of China.
Greg Hancock
Non-Executive Chairman
29 April 2024
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
Notes 31 December 31 December
2023 2022
£ £
Other Expenses 2 (885,029) (488,608)
Operating loss (885,029) (488,608)
Finance income and costs 3 (21,773) (20,530)
(906,802) (509,138)
Change in estimate of contingent consideration 14 (14,311) -
Loss before tax (921,113) (509,138)
Taxation 6 - -
Loss for the year attributable to equity holders (921,113) (509,138)
Earnings per Ordinary share
Basic and diluted loss per share attributable to owners of the Parent Company 7 (£0.0018 (£0.0010)
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 2023
31 December 31 December
2023 2022
£ £
Loss for the year (921,113) (509,138)
Other Comprehensive income
Items that may subsequently be reclassified to profit or loss:
- Exchange differences on translation of foreign operations (132,058) 290,754
Total comprehensive loss attributable to equity holders of the Parent Company (1,053,171) (218,384)
The accompanying notes are an integral part of these financial statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31 DECEMBER 2023
Notes
2023 2022
£ £
Non-current assets
Intangible Fixed Assets 9 3,258,753 2,727,290
Property, plant and equipment 10 1,649 1,428
Other non-current assets 11 31,036 -
Total non-current assets 3,291,438 2,728,718
Current assets
Trade and other receivables 11 36,248 84,469
Cash and cash equivalents 12 638,475 1,272,742
Total current assets 674,723 1,357,211
Current liabilities
Trade and other payables 13 198,687 79,998
Contingent consideration 14 163,225 148,914
Total current liabilities 361,912 228,912
Net assets 3,604,249 3,857,017
Capital and reserves
Share capital 15 5,923,794 5,152,494
Share premium account 2,785,366 2,794,649
Share based payment reserve 21,476 (16,908)
Retained losses (5,269,293) (4,348,182)
Foreign currency reserve 142,906 274,964
Total equity 3,604,249 3,857,017
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 29 April 2024.
Signed on behalf of the Board of Directors
Greg Hancock, Non-Executive Chairman, Company No. 11170056
PARENT COMPANY STATEMENT OF FINANCIAL POSITION
31 DECEMBER 2023
Notes
2023 2022
£ £
Non-current assets
Investment in subsidiary 8 432,260 432,260
Property, plant and equipment 10 1,428 1,428
Intangible Fixed Assets 9 - 33,251
Total non-current assets 433,688 466,939
Current assets
Trade and other receivables 11 3,841,258 2,664,404
Cash and cash equivalents 12 313,071 1,075,372
Total current assets 4,154,329 3,739,776
Current liabilities
Trade and other payables 13 166,739 11,873
Contingent consideration 14 163,225 148,914
Total current liabilities 329,964 160,787
Net assets 4,258,053 4,045,928
Capital and reserves
Share capital 15 5,923,794 5,152,494
Share premium account 2,785,366 2,794,649
Share based payment reserve 21,476 (16,908)
Retained losses (4,472,583) (3,884,307)
Equity shareholders' funds 4,258,053 4,045,928
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 £588,276 (2022: £399,363 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 29 April 2024.
Signed on behalf of the Board of Directors
Greg Hancock, Non-Executive Chairman, Company No. 11170056
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
Share Share Share based Retained Foreign Total
capital premium payment losses currency
reserve reserve
£ £ £ £ £ £
As at 1 January 2022 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 - - - 9,414 290,754 300,168
Total Comprehensive loss for the year - - - (499,724) 290,754 (208,970)
Shares issued 1,551,390 640,291 (44,576) - - 2,147,105
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
Total transactions with owners 1,551,390 1,416,088 (979,108) - - 1,998,370
At 31 December 2022 5,152,494 2,794,649 (16,908) (4,348,182) 274,964 3,857,017
Loss for the year - - - (921,113) - (921,113)
Translation differences - - - - (132,058) (132,058)
Total Comprehensive loss for the year - - - (921,113) (132,058) (1,053,171)
Shares issued 771,300 - - - - 771,300
Share issue cost - (6,900) - - - (6,900)
Warrants issued - (2,383) 2,383 - - -
Share options charge - - 36,000 - - 36,000
Total transactions with owners 771,300 (9,283) 38,383 - - 800,400
At 31 December 2023 5,923,794 2,785,366 21,476 (5,269,293) 142,906 3,604,249
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 2023
Share Share Share based Retained Total
capital premium payment losses
reserve
£ £ £ £ £
At 1 January 2022 3,601,104 1,378,561 962,201 (3,484,944) 2,456,921
Loss for the year - - - (399,363) (399,363)
Total Comprehensive loss for the year - - - (399,363) (399,363)
Shares issued 1,551,390 640,291 (44,576) - 2,147,105
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
Total transactions with owners 1,551,390 1,416,088 (979,108) - 1,998,370
At 31 December 2022 5,152,494 2,794,649 (16,908) (3,884,307) 4,045,928
Loss for the year - - - (588,276) (588,276)
Total Comprehensive loss for the year - - - (588,276) (588,276)
Shares issued 771,300 - - - 771,300
Share issue costs - (6,900) - - (6,900)
Warrants issued - (2,383) 2,383 - -
Share option charge - - 36,000 - 36,000
Total transactions with owners 771,300 (9,283) 38,383 - 800,400
At 31 December 2023 5,923,794 2,785,366 21,476 (4,472,583) 4,258,053
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 2023
Notes 31 December 31 December
2023 2022
£ £
Cash flows from operating activities
Loss before tax (921,113) (509,138)
Share-based payments 36,000 49,000
Depreciation 10 - 252
Foreign exchange (23,104) 159,015
Interest income 3 (5,708) -
Change in fair value of contingent consideration 14,311 -
Increase in contingent consideration 14 14,311 -
(Increase) in trade and other receivables 11 (13,850) (13,493)
Increase in Other non-current assets 11 31,036 -
Increase / (decrease) in trade and other payables 13 131,678 (34,254)
Net cash used in operating activities (736,439) (348,618)
Cash flows from investing activities
Payments for exploration and evaluation activities 9 (640,414) (714,885)
Payments for property, plant and equipment 10 (222) -
Interest received 3 5,708 -
Net cash used in investing activities (634,928) (714,885)
Cash flows from financing activities
Proceeds from the issue of shares 744,000 2,279,500
Payment for share issuance costs (6,900) (207,735)
Net cash generated from financing activities 737,100 2,071,765
Net increase/(decrease) in cash and cash equivalents (634,267) 1,008,262
Cash and cash equivalents at beginning of year 1,272,742 264,480
Cash and cash equivalents at end of year 12 638,475 1,272,742
Major non-cash transactions
During the year £27,300 in fees owing to suppliers and directors were settled
via the issue of 2,730,000 Ordinary shares at 1p each.
The accompanying notes are an integral part of these financial statements.
PARENT COMPANY CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
Notes 31 December 31 December
2023 2022
£ £
Cash flows from operating activities
Loss before tax (588,276) (399,363)
Share based payments 36,000 49,000
Depreciation 10 - 252
Change in fair value of contingent consideration 14,311 -
Increase in contingent consideration 14 14,311 -
Increase in trade and other receivables 11 (1,143,601) (196,283)
Increase/(decrease) in trade and other payables 13 167,854 (20,087)
Net cash used in operating activities (1,499,401) (566,481)
Cash flows from investing activities
Loan to Subsidiary 11 - -
Net cash used in investing activities - -
Cash flows from financing activities
Proceeds from the issue of shares 744,000 1,649,500
Share issue costs (6,900) (207,735)
Net cash generated from financing activities 737,100 1,441,765
Net increase/(decrease) in cash and cash equivalents (762,301) 875,284
Cash and cash equivalents at beginning of year 1,075,372 200,088
Cash and cash equivalents at end of year 12 313,071 1,075,372
Major non-cash transactions
During the year £27,300 in fees owing to suppliers and directors were settled
via the issue of 2,730,000 Ordinary shares at 1p each.
The accompanying notes are an integral part of these financial statements.
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
These financial statements have been prepared in accordance with UK-adopted
international accounting standards and with the requirements of the Companies
Act 2006. 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 2023 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: Classification of Liabilities as Current 1 January 2024
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 Board regularly reviews market
conditions, the Group's cash balance in alignment with the Company's forward
commitments and shall where deemed necessary revise expenditure commitments,
defer director payments and terminate short term contracts as a means of cash
preservation. Post-period end, on 26(th) April the Company announced a share
placement raising £600,000 before costs (refer to note 22).
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 £638,475 of cash and cash equivalents at 31 December 2023.
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, held as intangible fixed assets on the
statement of financial position 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
capitalised as exploration and evaluation assets relates 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) Classified as 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 through profit or loss (debt instruments);
• financial assets designated at fair value through OCI with no
recycling of cumulative gains and losses upon derecognition through profit or
loss (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.
Financial liabilities at fair value through profit or loss include contingent
liability. Gains or losses are recognised in the consolidated income
statement.
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 and options is recognised as an expense in share premium or profit or
loss, in accordance with the nature of the service provided. A corresponding
increase is recognised in equity.
The total expense to be apportioned over the vesting period of the benefit is
determined by reference to the fair value (excluding the effect of non
market-based vesting conditions) at the date of grant. Fair value is measured
by the use of the Black-Scholes model. The expected life used in the model has
been adjusted, based on management's best estimate, for the effects of the
non- transferability, exercise restrictions and behavioural considerations. A
cancellation of a share award by the Group is treated consistently, resulting
in an acceleration of the remaining charge within the consolidated income
statement in the year of cancellation.
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.
Recoverability of exploration and evaluation assets
Exploration and evaluation costs have a carrying value at 31 December 2023 of
£3,258,753 (2022: £2,727,290). Such assets have an indefinite useful life as
the Group has a right to renew exploration licences and the asset is only
amortised once extraction of the resource commences. Management tests for
impairment annually whether exploration projects have future economic value in
accordance with the accounting policy stated in Note 2. Each exploration
project is subject to an annual review to determine if the exploration results
during the period warrant further exploration expenditure and have the
potential to result in an economic discovery. This review takes into
consideration long term prices, anticipated resource volumes and supply and
demand outlook. In the event that a project does not represent an economic
exploration target and results indicate there is no additional upside, a
decision will be made to discontinue exploration; an impairment charge will
then be recognised in the statement of comprehensive income.
As a result of the exploration results received to date, budget for further
exploration works and licences being in good standing, Management do not
consider that the exploration and evaluation assets are impaired as at 31
December 2023 and 2022.
Share-based payments valuations
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
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
which are judgement based decisions made by Management. 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 through profit or loss in accordance with IFRS 9. Therefore, as at
31 December 2023, the contingent consideration reflects an estimated fair
value of £163,225.
Recoverable value of investment in subsidiary and intercompany debtors
As at 31 December 2023, the Company recognised an investment in subsidiary of
£432,260 (2022: £432,260), and loans to the subsidiary of £3,810,385 (2022
£2,659,164). The carrying values of the investment and loans are assessed for
indications of impairment, as set out in IFRS 9, on an annual basis. As part
of this impairment assessment, the recoverable value of the investment and
loans is required to be estimated.
The main consideration for Management when considering recoverability is the
probability of realising value from the exploration intangible assets owned by
the subsidiary which will generate future cashflow to enable both repayment of
the loans and realisation of value of investment.
As a result of the exploration results received to date, budget for further
exploration works in 2024 and licences being in good standing, Management do
not consider that the investment in subsidiary, or loans to subsidiary are
impaired as at 31 December 2023 and 2022.
These estimates and assumptions are subject to risk and uncertainty and
therefore a possibility that changes in circumstances will impact the
assessment of impairment indicators.
2. EXPENSES BY NATURE
31 December 31 December
2023 2022
£ £
Administrative expense 163,312 79,908
Corporate expense and Finance 451,420 169,813
Professional fees - 960
Wages & Salaries expense 270,297 237,927
885,029 488,608
Auditor's remuneration
31 December 31 December
2023 2022
£ £
Fees payable to the Group's auditor for the audit of the Group's annual 30,000 21,000
accounts
30,000 21,000
3. FINANCE COSTS
31 December 31 December
2023 2022
£ £
Interest income (5,708) -
Other finance costs 27,481 20,530
Net finance costs 21,773 20,530
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
2023 and 2022:
Operational Results 31 December 31 December
2023 2022
£ £
Revenue - -
Loss after taxation
- United Kingdom (588,276) (399,363)
- Australia (332,837) (109,776)
Total (921,113) (509,139)
2023 Australia United Kingdom Total
£ £ £
Non-current assets 2,979,789 280,613 3,260,402
Current assets 279,846 425,913 705,759
Total liabilities (31,948) (329,964) (361,912)
2022 Australia United Kingdom Total
£ £ £
Non-current assets 2,261,779 466,939 2,728,718
Current assets 242,603 1,114,608 1,357,211
Total liabilities (55,480) (173,433) (228,913)
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 2023 Salaries Fees Other Share Based payment charge Total
£ £ £ £ £
G Hancock - 31,166 - 8,143 39,309
R Verco 138,934 - - 11,000 149,934
D Maling - 24,000 19,000 8,714 51,714
D Clarke - 24,000 - 8,143 32,143
138,934 79,166 19,000 36,000 273,100
· During the year £31,166 (2022: 36,361) 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 (2022: £24,000) was paid to Dan Maling, in
respect of Directors fees.
· During the year £24,000 (2022: £24,000) was paid to The Springton
Trust & Queens Road Mines, in which David Clarke is a Trustee, in respect
of Directors fees and consultancy services.
Rupert Verco was the highest paid Director for the year who received
remuneration of £149,934.
Year ended 31 December 2022 Remuneration Fees Share Based payment charge 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
· In 2022, £36,361 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.
· In 2022, £24,000 was paid to Dan Maling, in respect of Directors fees.
· In 2022, £24,000 was paid to The Springton Trust & Queens Road
Mines, in which David Clarke is a Trustee, in respect of Directors fees and
consultancy services.
Rupert Verco was the highest paid Director for the year who received
remuneration of £131,516.
6. INCOME TAXES
a) Analysis of tax in the period
31 December 31 December
2023 2022
£ £
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% (2022: 19%) and
Australia of 25% (2022: 25%). The differences are explained below:
31 December 31 December
2023 2022
£ £
Loss on ordinary activities before tax (921,113) (509,138)
Loss multiplied by weighted average applicable rate of tax (202,645) (112,010)
Effects of:
Expenses not deductible for tax - -
Losses carried forward not recognised as deferred tax assets 202,645 112,010
- -
The weighted average applicable tax rate of 22% (2022: 22%) used is a
combination of the standard rate of corporation tax rate for entities in the
United Kingdom of 19% (2022: 19%), and 25% (2022: 25%) in Australia.
No deferred tax asset has been recognised due to uncertainty over future
profits. Tax losses in the United Kingdom of approximately £1,522,000 (2022:
£1,072,000) have been carried forward.
7. EARNINGS PER SHARE
Basic and diluted loss per share is calculated by dividing the loss attributed
to ordinary shareholders of £921,113 (2022: £509,138 loss) by the weighted
average number of shares of 524,970,043 (2022: 515,249,550) 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 Total
Company £ £
At 1 January 2023 432,260 432,260
At 31 December 2023 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 2023 and 2022 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 Pty Ltd is the Trustee company of the Lady Alice Mines
Unit Trust.
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 2022 2,012,405
Additions 714,885
At 1 January 2023 2,727,290
Additions 640,414
Foreign exchange movement (108,951)
At 31 December 2023 3,258,753
Total
Company £
At 1 January 2022 33,251
Additions -
At 1 January 2023 33,251
Reclassification (33,251)
At 31 December 2023 -
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 2023 and 2022.
10. PROPERTY, PLANT AND EQUIPMENT
Office Equipment Total
2023 - Group
Cost £ £
At 31 December 2022 4,407 4,407
Additions during the year 222 222
At 31 December 2023 4,629 4,629
Depreciation
At 31 December 2022 (2,980) (2,980)
Charge for the year - -
At 31 December 2023 (2,980) (2,980)
Net book value
At 31 December 2023 1,649 1,649
Office Equipment Total
2023 - Company
Cost £ £
At 31 December 2022 4,407 4,407
Additions during the year - -
At 31 December 2023 4,407 4,407
Depreciation
At 31 December 2022 (2,980) (2,980)
Charge for the year - -
At 31 December 2023 (2,980) (2,980)
Net book value
At 31 December 2023 1,428 1,428
11. TRADE AND OTHER RECEIVABLES
Group Group Company
31 Dec 2023 31 Dec 2022 31 Dec 2023 Company
31 Dec 2022
Current £ £ £ £
Prepayments 30,000 45,211 30,000 -
Intercompany debtors - - 3,810,385 2,659,164
Goods & Services Tax - 33,995 - -
Other debtors 6,248 5,263 873 5,240
36,248 84,469 3,841,258 2,664,404
The intercompany debt is interest free and repayable on demand.
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 2023 Company 31 Dec 2022
31 Dec 2023 31 Dec 2022
£ £ £ £
UK pounds 30,873 5,240 3,841,258 2,664,400
Australian dollars 5,375 79,229 - -
36,248 84,469 3,841,258 2,664,400
Group Group Company
31 Dec 2023 31 Dec 2022 31 Dec 2023 Company
31 Dec 2022
Non-Current £ £ £ £
Other non-current assets 31,036 - - -
31,036 - - -
Other non-current assets are environmental bonds on the Group's exploration
licences and are all denominated in Australian Dollars.
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.
12. CASH AND CASH EQUIVALENTS
Group Group Company 31 Dec 2023 Company 31 Dec 2022
31 Dec 2023 31 Dec 2022
£ £ £ £
Cash at bank and in hand 638,475 1,272,742 313,071 1,075,372
638,475 1,272,742 313,071 1,075,372
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 2023 Company 31 Dec 2022
31 Dec 2023 31 Dec 2022
£ £ £ £
UK pounds 309,881 1,075,372 309,881 1,075,372
Australian dollars 328,594 197,370 - -
638,475 1,272,742 309,881 1,075,372
13. TRADE AND OTHER PAYABLES
Group Group Company 31 Dec 2023 Company 31 Dec 2022
31 Dec 2023 31 Dec 2022
Current £ £ £ £
Trade creditors 107,726 81,535 78,759 18,124
Accruals 87,980 1,249 87,980 1,249
Other payables 2,981 (2,786) - (7,500)
198,687 79,998 166,739 11,873
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 2023 Company 31 Dec 2022
31 Dec 2023 31 Dec 2022
£ £ £ £
UK pounds 188,206 38,072 166,739 11,873
Australian dollars 10, 481 41,926 - -
198,687 79,998 166,739 11,873
14. CONTINGENT CONSIDERATION
2023 Total
Group and Company £
Amounts payable under business combination 148,914
Remeasurement of contingent consideration 14,311
At 31 December 2023 163,225
Categorised as:
Current liabilities 163,225
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 -
During the year 2023, there has been a movement in the Contingent
Consideration of £14,311 reflecting a change in fair value estimates. The
Contingent Consideration as at 31 December 2023 of £163,225, reflects the
fair value amount still outstanding. Fair value measurement was based on a
quoted price in an active market (Level 1).
15. SHARE CAPITAL
Dec 2023 Dec 2023 Dec 2022 Dec 2022
Number Number
of shares £ of shares £
Issued, called up and fully paid
Ordinary shares of £0.01
As at the start of the year 515,249,550 5,152,494 360,110,510 3,601,103
Issued in the year 77,130,000 771,300 155,139,040 1,551,391
Total 592,379,550 5,923,794 515,249,550 5,152,494
On 15 November 2023, 74,400,000 Ordinary shares were issued pursuant to a
private placement at 1.0 pence each.
On 15 November 2023, 2,730,000 Ordinary shares were issued at 1.0 pence each
to third party suppliers for settlement of fees in lieu of cash.
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.
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.
As at 31 December 2023 the Company had 126,743,334 warrants outstanding and
exercisable (2022: 49,613,334).
16. SHARE BASED PAYMENTS
2023
Warrants
Warrants Number Weighted average exercise price
Warrants at 31 December 2022 49,613,334 £0.03
Granted during year 77,130,000 £0.01
Exercised during year - -
Lapsed during year - -
126,743,334 £0.02
Warrants at 31 December 2023
Exercisable at year end 126,743,334 £0.02
At 31 December 2023 the weighted average remaining contractual life of the
warrants outstanding was 2.46 years.
2022
Warrants
Warrants Number Weighted average exercise price
Warrants at 31 December 2021 67,543,461 £0.03
Granted during year 49,613,334 £0.03
Exercised during year - -
Lapsed during year (67,543,461) £0.03
49,613,334 £0.03
Warrants at 31 December 2022
Exercisable at year end 49,613,334 £0.03
At 31 December 2022 the weighted average remaining contractual life of the
warrants outstanding was 2.78 years.
2023
Options
Options Number Weighted average exercise price
Options at 31 December 2022 18,672,336 £0.033
Issued during the period - -
Exercised during the year - -
Lapsed during the year (672,336) £0.015
Options at 31 December 2023 18,000,000 £0.033
Exercisable at year end - -
At 31 December 2023 the weighted average remaining contractual life of the
options outstanding was 1.79 years.
The fair value of options is valued using the Black-Scholes pricing model. An
expense of £36,000 (2022: £49,000) has been recognised in the year in
respect of share options granted.
2022
Options
Options Number Weighted average exercise price
Options at 31 December 2021 15,672,336 £0.033
Issued during the period 3,000,000 £0.03
Exercised during the year - -
Options at 31 December 2022 18,672,336 £0.033
Exercisable at year end 672,336 £0.015
At 31 December 2022 the weighted average remaining contractual life of the
options outstanding was 2.43 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 Options Warrants Warrants
Date of grant 14 July 2020 14 January 2022 16 February 2022 26 October 2022
Expected volatility 94.59% 107.33% 104.98% 96.35%
Expected life 5 5 3 3
Risk-free interest rate 0.10% 0.25% 1.29% 3.36%
Expected dividend yield 0.00% 0.00% 0.00% 0.00%
Fair value per option/warrant
£0.008 £0.009 £0.013 £0.009
17. FINANCIAL INSTRUMENTS
Group Group Company Company
31 Dec 2023 31 Dec 2022 31 Dec 2023 31 Dec 2022
£ £ £ £
Financial assets at amortised cost
Trade and other receivables excluding prepayments 6,248 50,474 3,811,254 2,664,401
Cash and cash equivalents 638,475 1,272,742 313,471 1,075,373
644,723 1,323,216 4,124,725 3,739,774
Financial liabilities
Trade and other payables (at amortised cost) (198,687) (46,004) (166,739) (11,873)
Deferred consideration (at FVPL) (163,225) (148,914) (163,225) (148,914)
(361,912) (194,918) (329,964) (160,787)
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 that the fair value of contingent
consideration was £163,225 (2022: £148,914) as at reporting date.
19. RELATED PARTY TRANSACTIONS
Group
Transactions between the Company and its subsidiary, which are related
parties, have been eliminated on consolidation and are disclosed in this part
of the note.
Key management compensation
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 JAS Capital, an
entity in which Daniel Maling is a Director.
During the year, the Group paid £10,000 in shares to Hydrogen Future
Industries in lieu of consulting fees, an entity in which Daniel Maling is an
Executive Director
During the year, the Group paid £138,934 to Rupert Verco, Chief Executive
Officer of the Company Mr Verco was appointed as CEO with effect from 12 July
2021 and as Managing Director from 13 August 2022.
Company
Management charges payable by the subsidiary were £81,970 (2022: £nil), and
are included in the balance of the receivables due from Lady Alice Mines Pty
Ltd.
As at 31 December 2023 included in the other receivables is £3,810,385 (2022:
£2,659,160) due from Lady Alice Mines Pty Ltd, a subsidiary company. A loan
of £81,970 is subject to interest and is repayable on demand. The remainder
of the loans are 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 asses
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 2023 and 2022.
Contractual maturity analysis as at 31 December 2023 and 2022
2023 2022
Less than 12 Less than 12
Months 1 - 5 Months 1 - 5
£ Year Total £ Year Total
£ £ £ £
Accounts payable 107,726 - 107,726 81,535 - 81,535
Accrued liabilities 87,980 - 87,980 1,249 - 1,249
Other payables 2,981 - 2,981 (2,786) (2,786)
198,687 - 198,687 79,998 - 79,998
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 2023 the Group had £101,500 of minimum licence expenditure
commitments required in order to maintain its exploration licences in good
standing, but is not committed capital expenditure at year end
There were no changes to contingent liabilities as at 31 December 2023.
22. POST YEAR END EVENTS
On the 1(st) of January 2024, David Clarke commenced as Executive Director.
Post period, a prospectus was published for the issue of the Consideration
Shares and to raise a further £220,000 through the issue of 22,000,000 shares
and issuing 52,100,000 shares to Andromeda Metals in alignment to the Wudinna
Sale Agreement.
Also, in January 2024, Cobra was granted two additional tenements (EL 6966
"Smokey Bay" and EL 6967 "Pureba"). The tenements cover a combined 1,512km(2)
and overlie a further 1,000km(2) of the Narlaby paleochannel, the system that
hosts the Boland ionic discovery located at the Wudinna Project.
In February 2024, Cobra completed a five drillhole sonic core drilling
programme aimed at advancing the Boland ionic REE discovery.
In March 2024, Cobra announced preliminary results from the drilling programme
which further demonstrated that the discovery could be a world class source of
magnet and heavy rare earths.
On the 22 April 2024, the company announced that subject to only departmental
and ministerial approvals, the Wudinna Sale Transaction, entitling Cobra to
100% ownership of the Wudinna Project had been completed.
On 26 April 2024, the Company announced the completion of a share placement
raising £600,000 through the issue of 60,000,000 ordinary shares. The shares
will be admitted to trading after the date of signing this report, on 2 May
2024.
23 ULTIMATE CONTROLLING PARTY
There is no ultimate controlling party.
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