REG - Conroy Gold&Nat Res - Final Results
29/11/2022 18:00
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RNS Number : 9927H Conroy Gold & Natural Resources PLC 29 November 2022
29 November 2022
Conroy Gold and Natural Resources plc
("Conroy Gold" or "the Company")
FINAL RESULTS FOR THE YEAR TO 31 MAY 2022
NOTICE OF ANNUAL GENERAL MEETING
Conroy Gold and Natural Resources plc (AIM: CGNR), the gold and base metals
exploration and development company, is pleased to report its audited accounts
for the year to 31 May 2022.
Highlights:
· Joint venture ("JV") agreement, to develop the district scale gold
trend which the Company has discovered in Ireland, agreed and completed with
Demir Export. The JV agreement is an earn-in agreement
· The investment by Demir Export is directly into three operating
companies, wholly owned subsidiaries of Conroy Gold, which have been
established to hold and operate the various licences in the JV:
· A cash payment of €1 million was made to the Company upon
completion of the JV agreement in March 2022
· Expenditure of over €4.5 million by Demir Export in work
commitments is required for Demir Export to earn a 25% interest in each
project
· Subsequent expenditure of €4.5m plus will earn an additional 15%
· When construction ready status for mine development is achieved,
following funding of the necessary expenditure, Demir Export will earn a
further 17.5% interest, bringing their total holding to 57.5% in any given
development
· Three new prospecting licences in the Longford-Down Massif have been
granted to Conroy Gold. Is it intended to transfer these licences to the JV in
due course, which will make a total of 15 licences held by the JV and a total
JV area of approximately 1000 km²
· During the year and post period, exploration at Clontibret and
elsewhere in the Longford-Down Massif has continued with excellent results
achieved
· The current drill programme at Clontibret, which is being carried out
in conjunction with Demir Export, commenced in May 2022 and is designed to
build upon the previous work carried out by Conroy Gold with the objective of
enhancing the knowledge of the Clontibret deposit and increasing the existing
JORC resource figure
Chairman, Professor Richard Conroy, commented:
"The JV with Demir Export is now fully established. Initial JV drilling has
been completed and the results announced. The drilling and exploration
programme has been greatly expanded as we look to increase the defined
resource at Clontibret and potential targets elsewhere along the Longford-Down
gold trend, such as Clay Lake and Slieve Glah, with a view to developing a
gold mine at Clontibret and/or elsewhere along the trend.
"Overall, we have made excellent progress in the last year and we will look to
accelerate the pace of the work programme in the current year."
Annual Report and Accounts for the year to 31 May 2022
The full audited annual report and accounts for the year to 31 May 2022
("Annual Report") will be posted to shareholders today and will be published
on the Company's website (www.conroygoldandnaturalresources.com) shortly. Key
elements can also be viewed at the bottom of this announcement.
Annual General Meeting
The Annual General Meeting of the Company ("AGM") will be held at The Conrad
Dublin Hotel, Earlsfort Terrace, Dublin at 12 noon on 20 December 2022. A copy
of the notice of AGM can be viewed on the Company's website.
For further information please contact:
Conroy Gold and Natural Resources plc
Professor Richard Conroy, Chairman +353-1-479-6180
Allenby Capital Limited (Nomad)
Nick Athanas / Nick Harriss +44-20-3328-5656
First Equity Limited (Broker)
Jason Robertson +44-20-7330-1883
Lothbury Financial Services
Michael Padley +44-20-3290-0707
Hall Communications
Don Hall +353-1-660-9377
Visit the Company website at www.conroygold.com
Key Information Extracted from Annual Report
Chairman's Statement
Dear Shareholder,
I have great pleasure in presenting the Company's Annual Report and
Consolidated Financial Statements for the year ended 31 May 2022, which was a
transformational year for the Company.
During the year the Company agreed and completed a joint venture ("JV")
agreement to develop the district scale gold trend which the Company has
discovered in the Longford-Down Massif in Ireland with the primary aim being
the development of a mine at Clontibret in County Monaghan and/or elsewhere in
the Longford Down Massif.
The JV agreement is an earn-in agreement with the long established mining
company, Demir Export AŞ ("Demir Export"). Demir Export has interests in
iron, coal, gold and base metals in Turkey and has a strong in-house technical
team with mining and exploration expertise. Demir Export brings over 60 years
of mine operating experience to bear on the project and the company places a
strong emphasis on the adoption of international environmental, health and
safety management standards.
The investment by Demir Export is directly into operating companies, wholly
owned subsidiaries of Conroy, which have been established to hold and operate
the various licences in the JV. These companies are: Conroy Gold (Clontibret)
Limited, which holds the Clontibret Licence; Conroy Gold (Armagh) Ltd, which
holds the licences and Mines Royal options in Northern Ireland; and Conroy
Gold (Longford Down) Limited, which holds the remaining prospecting licences
in the Republic of Ireland.
In addition, three new prospecting licenses in the Longford Down Massif have
been granted to Conroy Gold and Natural Resources (PL3131, PL4554, and
PL4559). It is intended that application will be made for these licences to be
transferred to Conroy Gold (Longford Down) Limited, which would bring the
number of licences held by the JV in the Longford Down Massif to (fifteen) and
the total area held by the Joint Venture in the Longford Down Massif to
approximately 1000 km².
Under the terms of the JV agreement a cash payment of €1 million was made to
the Company upon completion of the JV agreement in March 2022. Further
expenditure of over €4.5 million by Demir Export in work commitments is
required for Demir Export to earn a 25% interest in each project. Subsequent
expenditure of €4.5m plus by Demir Export will earn an additional 15%
interest. The additional expenditure required to reach construction ready
status for mine development will earn an additional 17.5% interest to bring
Demir Export's total holding to 57.5% in any given development.
Thereafter Conroy may continue to retain a 42.5% interest in the mine
development by participating pro rata in the expenditures required for mine
development, or avail itself of a number of alternatives, such as being
carried for these expenditures through a "carry loan" for a 25% interest with
a payback over a six year period from the net profit due to the Company.
The Company has as a result, during the year, moved from its activities
primarily being mineral exploration to having mine development as its main
focus. This is a major, and transformational, event in the Company's history.
We are confident that the Company has enough data and background knowledge to
warrant this shift in emphasis and in Demir Export we have an experienced JV
partner who have already, in a short space of time, contributed significantly
to the JV partnership.
Although the primary aim of the joint venture is the development of a mine on
the Clontibret gold deposit and/or elsewhere in the Longford Down Massif,
exploration along the 65km (40 mile) gold trend will continue. A number of
other gold targets, in addition to the Clontibret gold deposit, have already
been discovered and we expect the exploration programmes to discover further
gold targets. Possible base metal targets in the Longford Down Massif will
also be followed up.
An EGM was held during the period under review at which shareholder's approval
was sought, and granted, for the joint venture. Completion of the joint
venture was also conditional on the necessary regulatory consents being
granted in the Republic of Ireland and Northern Ireland for the transfer of
the relevant licences to the various joint venture companies which were set up
under the joint venture agreement. These regulatory consents were received in
the first quarter of 2022.
During the year and post period, exploration at Clontibret and elsewhere in
the Longford-Down has continued. Excellent results included the widest yet
gold intercept drilled to date at Clontibret - 94.5m grading 1.0g/t Au,
including 45m grading 1.5g/t Au, in the stockwork zone. The drill hole also
intersected lodes which assayed 6m grading 4.4g/t Au, 2.7m grading 5g/t Au and
1.55m grading 4.0g/t Au. An initial c.3000m joint venture step out drilling
programme also commenced in April 2022 at Clontibret and results to date have
included the discovery of four new gold zones and further continuity of the
gold mineralization in the stockwork, including an intersection of 22m@0.6g/t
gold (as announced by the Company on 1 September 2022).
Other exploration work, including drilling, deep overburden sampling and
geophysics work, was also carried out during the year with highly encouraging
results.
The current drill programme at Clontibret, which is being carried out in
conjunction with Demir Export, is designed to build upon the previous work
carried out by Conroy over many years, by enhancing our knowledge of the
Clontibret deposit and increasing the existing JORC resource figure.
Environmental, Social and Governance issues
Great emphasis is placed by the Company on Environmental, Social and
Governance issues. The Company is committed to high standards of corporate
governance and integrity in all of its activities and operations including
rigorous health and safety compliance, environmental consciousness and the
promotion of a culture of good ethical values and behaviour.
The Company conducts its business with integrity, honesty and fairness and
requires its partners, contractors and suppliers to meet similar ethical
standards. Individual staff members must ensure that they apply and maintain
these standards in all their actions.
It is a requirement of the Chairman of the Board to regularly monitor and
review the Company's ethical standards and cultural environment and where
necessary, take appropriate action to ensure proper standards are maintained.
Covid-19
Covid-19 measures continued to be taken by the Company during the year in
accordance with government guidelines to protect the health, safety and
well-being of its employees, contractors and partners.
Financials
The loss after taxation from continuing operations for the financial year
ended 31 May 2022 was €256,484 (31 May 2021: profit of €211,010).
As at 31 May 2022, the Group had cash reserves of €1,216,097 (31 May 2021:
€1,513,286) and net assets of €19,730,738 (31 May 2021: €19,987,222).
Directors and Staff
I would like to express my deep appreciation for the support and dedication of
the Directors, staff and consultants which has made possible the excellent
progress and success which the Company has achieved during the year, in
particular to those that helped with the successful conclusion of the joint
venture with Demir Export.
Professor Richard Conroy
Chairman
29 November 2022
Extract from the Independent Auditor's Report
The following section is extracted from the Independent Auditor's Report but
shareholders should read in full the Independent Auditor's Report contained in
the Annual Report.
In auditing the financial statements, we have concluded that the directors'
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate.
We draw your attention to Note 1 in the financial statements, which indicates
that during the year ended 31 May 2022, the group and parent company incurred
a loss of €256,484 and, as of that date, the group and parent company had
net current liabilities of €2,113,516 and €1,476,293 respectively.
As stated in Note 1, these events or conditions indicate that a material
uncertainty exists that may cast significant doubt on the group's and parent
company's ability to continue as a going concern. Our opinion is not modified
in respect of this matter.
Our evaluation of the directors' assessment of the group and parent company's
ability to continue to adopt the going concern basis of accounting included:
· obtaining an understanding of the group and parent company's relevant
controls over the preparation of cash flow forecasts and approval of the
projections and assumptions used in cash flow forecasts to support the going
concern assumption;
· assessing the design and determining the implementation of these
relevant controls;
· evaluating directors' plans and their feasibility by agreeing the
inputs used in the cash flow forecast to expenditure commitments and other
supporting documentation;
· challenging the reasonableness of the assumptions applied by the
directors in their going concern assessment;
· obtaining confirmations received by the group and parent company from
the directors and former directors evidencing that they will not seek
repayment of amounts owed to them by the group and parent company within 12
months of the date of approval of the financial statements, unless the group
and/or parent company has sufficient funds to repay;
· assessing the mechanical accuracy of the cash flow forecast model;
and
· assessing the adequacy of the disclosures made in the financial
statements.
Consolidated Income Statement for the financial year ended 31 May 2022
2022 2021
€ €
Continuing operations
Operating expenses (832,340) (752,619)
Movement in fair value of warrants 585,954 1,055,490
Share-based payment expense - (71,596)
Operating (loss)/profit (246,386) 231,275
Finance income - interest 41 13
Interest expense (10,139) (20,278)
Net finance cost (10,098) (20,265)
(Loss)/profit before taxation (256,484) 211,010
Income tax expense - -
(Loss)/profit for the financial year (256,484) 211,010
(Loss)/earnings per share
Basic (loss)/earnings per share (0.0065) 0.0065
The total (loss)/profit for the financial year is entirely attributable to
equity holders of the Company.
Consolidated statement of comprehensive income for the financial year ended 31
May 2022
2022 2021
€ €
(Loss)/profit for the financial year (256,484) 211,010
Income recognised in other comprehensive income - -
Total comprehensive (loss)/profit for the financial year (256,484) 211,010
The total comprehensive profit/(loss) for the financial year is entirely
attributable to equity holders of the Company.
Consolidated statement of financial position as at 31 May 2022
31 May 31 May
2022 2021
€ €
Assets
Non-current assets
Intangible assets 23,888,833 22,988,974
Property, plant and equipment 7,589 9,474
Total non-current assets 23,896,422 22,998,448
Current assets
Cash and cash equivalents 1,216,097 1,513,286
Other receivables 429,329 458,769
Total current assets 1,645,426 1,972,055
Total assets 25,541,848 24,970,503
Equity
Capital and reserves
Share capital presented as equity 10,543,694 10,543,694
Share premium 15,256,556 15,256,556
Capital conversion reserve fund 30,617 30,617
Share-based payments reserve 42,664 42,664
Other reserve 79,929 79,929
Retained deficit (6,222,722) (5,966,238)
Total equity 19,730,738 19,987,222
Non-controlling interests
Convertible shares 1,406,899 -
Total non-controlling interests 1,406,899 -
Liabilities
Non-current liabilities
Convertible loans 388,219 378,080
Warrant liabilities 257,050 843,004
Total non-current liabilities 645,269 1,221,084
Current liabilities
Trade and other payables 3,621,943 3,625,198
Related party loans 136,999 136,999
Total current liabilities 3,758,942 3,762,197
Total liabilities 4,404,211 4,983,281
Total equity, non-controlling interests and liabilities 25,541,848 24,970,503
The financial statements were approved by the Board of Directors on 29
November 2022 and authorised for issue on 29 November 2022.
Consolidated statement of changes in equity for the financial year ended 31
May 2022
Share capital Share premium Capital conversion reserve fund Share-based payment reserve Other Retained Total equity
reserve deficit
€ € € € € € €
10,543,694 15,256,556 30,617 42,664 79,929 (5,966,238) 19,987,222
Balance at 1 June 2021
Loss for the financial year - - - - - (256,484) (256,484)
Balance at 31 May 2022 10,543,694 15,256,556 30,617 42,664 79,929 (6,222,722) 19,730,738
Share capital Share premium Capital conversion reserve fund Share-based payment reserve Other Retained Total
reserve deficit equity
€ € € € € € €
10,530,645 13,084,647 30,617 574,875 8,333 (6,583,802) 17,645,315
Balance at 1 June 2020
Share issue (see Note 15) 13,049 4,070,403 - - - - 4,083,452
Share issue costs - - - - - (125,657) (125,657)
Warrant issue - (1,898,494) - - - - (1,898,494)
Warrant exercise - - - - 71,596 - 71,596
Transfer from share-based payment reserve to retained deficit - - - (532,211) - 532,211 -
Profit for the financial year - - - - - 211,010 211,010
Balance at 31 May 10,543,694 15,256,556 30,617 42,664 79,929 (5,966,238) 19,987,222
2021
Consolidated statement of cash flows for the financial year ended 31 May 2022
2022 2021
€ €
Cash flows from operating activities
(Loss)/profit for the financial year (256,484) 211,010
Adjustments for non-cash items:
Movement in fair value of warrants (585,954) (1,055,490)
Interest expense 10,139 20,278
Depreciation 1,885 1,885
Share-based payment - 71,596
(830,414) (750,721)
Payments from/(payment to) Karelian Diamond Resources P.L.C. 70,000 (228,402)
Increase in receivables (40,560) (368,821)
Decrease in payables (3,255) (32,105)
Net cash used in operating activities (804,229) (1,380,049)
Cash flows from investing activities
Expenditure on intangible assets (899,859) (658,230)
Purchase of property, plant and equipment - (667)
Net Cash used in investing activities (899,859) (658,897)
Cash flows from financing activities
Convertible shares 1,406,899 -
Share issue costs - (125,657)
Issue of share capital - 3,643,044
Payments to related parties - (82,425)
Net cash (used in)/provided by financing activities 1,406,899 3,434,962
(Decrease)/ increase in cash and cash equivalents (297,189) 1,396,016
Cash and cash equivalents at beginning of financial year 1,513,286 117,270
Cash and cash equivalents at end of financial year 1,216,097 1,513,286
1. Accounting policies
Reporting entity
Conroy Gold and Natural Resources P.L.C. (the "Company") is a company
domiciled in Ireland. The consolidated financial statements of the Company for
the financial year ended 31 May 2022 comprise the financial statements of the
Company and its subsidiaries (together referred to as the "Group"). The
Company is a public limited company incorporated in Ireland under registration
number 232059. The registered office is located at 3300 Lake Drive, Citywest
Business Campus, Dublin 24, D24 TD21, Ireland.
Basis of preparation
The consolidated financial statements are presented in euro ("€"). The €
is the functional currency of the Company. The consolidated financial
statements are prepared under the historical cost basis except for derivative
financial instruments, where applicable, which are measured at fair value at
each reporting date.
The preparation of consolidated financial statements requires the Board of
Directors and management to use judgements, estimates and assumptions that
affect the application of policies and reported amounts of assets,
liabilities, income and expenses. Actual results may differ from those
estimates. Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the period in which
the estimate is revised and in any future periods affected. Details of
critical judgements are disclosed in the accounting policies. The consolidated
financial statements were authorised for issue by the Board of Directors on 29
November 2022.
Going Concern
The Group and the Company recorded a loss of €256,484 (31 May 2021: profit
of €211,010) for the financial year ended 31 May 2022. The Group and the
Company had net assets of €19,730,738 (31 May 2021: €19,987,222) at that
date. The Group had net current liabilities of €2,113,516 (31 May 2021:
€1,790,142) and the Company had net current liabilities of €1,476,293 (31
May 2021: €1,271,009) at that date. The Group had cash and cash equivalents
of €1,216,097 at 31 May 2022 (31 May 2021: €1,513,286). The Company had
cash and cash equivalents of €964,997 at 31 May 2022 (31 May 2021:
€1,513,286). The Directors, namely Professor Richard Conroy, Maureen T.A.
Jones, Professor Garth Earls, Brendan McMorrow, Howard Bird and former
Directors, namely, James P. Jones, Séamus P. Fitzpatrick, C. David Wathen,
Dr. Sorċa Conroy and Michael E. Power, have confirmed that they will not seek
repayment of amounts owed to them by the Group and the Company of €3,069,148
(31 May 2021: €3,119,148) which are included in net current liabilities,
within 12 months of the date of approval of the financial statements, unless
the Group has sufficient funds to repay.
On 31 March 2022, the Company announced that the Joint Venture Agreement with
Demir Export was completed, all outstanding conditions having been met and a
payment of €1 million made to the Company. The 3000 metre drilling programme
as part of the Joint Venture Agreement started in the second half of April
2022.
The Board of Directors have considered carefully the financial position of the
Group and the Company and in that context, have prepared and reviewed cash
flow forecasts for the period until 30 November 2023. The Directors have fully
considered both current and future capital expenditure commitments and the
options to fund such commitments in the twelve month period to November 2023.
The Directors recognise that the Group's net current liabilities of
€2,113,516 (31 May 2021: €1,790,142) is a material uncertainty that may
cast significant doubt on the Group and the 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. In reviewing the
proposed work programme for exploration and evaluation of assets, the results
obtained from the exploration programme, the prospects for raising additional
funds as required and the completed Joint Venture Agreement, the Board of
Directors are satisfied that it is appropriate to prepare the financial
statements on a going concern basis. The consolidated and the Company's
financial statements do not include any adjustments to the carrying value and
classification of assets and liabilities that would arise if the Group and the
Company were unable to continue as going concern.
Statement of compliance
The consolidated financial statements have been prepared in accordance with
International Financial Reporting Standards ("IFRS") as adopted by the
European Union ("EU") and the requirements of the Companies Act 2014. The
Company's financial statements have been prepared in accordance with Financial
Reporting Standard 101: Reduced Disclosure Framework ("FRS101") and the
requirements of the Companies Act 2014.
Recent accounting pronouncements
(a) New and amended standards adopted by the Group and the Company
The Group and the Company have adopted the following amendments to standards
for the first time for its annual reporting year commencing 1 June 2021:
· Amendments to IFRS 4, IFRS 7, IFRS 9, IFRS 16, and IAS 39 regarding
replacement issues in the context of the IBOR reform - Phase 2 - Effective
date 1 January 2021;
· Amendments to IFRS 4 Insurance Contracts- deferral of IFRS 9 -
Effective 1 January 2021;
The adoption of the above amendments to standards had no significant impact on
the financial statements of the Group and the Company either due to being not
applicable or immaterial.
(b) New standards and interpretations not yet adopted by the Group and the
Company
Certain new accounting standards and interpretations have been published that
are not mandatory for 31 May 2022 reporting periods and have not been early
adopted by the Group and the Company.
The following amendments to standards adopted and endorsed by the EU have been
issued by the International Accounting Standards Board to date and are not yet
effective for the financial year from 1 June 2021. The Board of Directors is
currently assessing whether these standards once adopted by the Group and the
Company will have any impact on the financial statements of the Group and the
Company.
· IFRS 4 amendments regarding the expiry date of the deferral approach
- Effective date 1 January 2023;
· IAS 8 amendments regarding the definition of accounting estimates -
Effective date 1 January 2023;
· IAS 1 amendments regarding the disclosure of accounting policies -
Effective date 1 January 2023;
· IFRS 17 Insurance contracts - Effective date deferred to 1 January
2023;
· Amendment to IFRS 16 about providing lessees with an extension of one
year to exemption from assessing whether a COVID-19-related rent concession is
a lease modification - Effective date 1 April 2021;
· IFRS 3 amendments updating a reference to the Conceptual Framework -
Effective date 1 January 2022;
· IAS 16 amendments prohibiting a company from deducting from the cost
of property, plant and equipment amounts received from selling items produced
while the company is preparing the asset for its intended use - Effective date
1 January 2022; and
· IAS 37 amendments regarding the costs to include when assessing
whether a contract is onerous - Effective date 1 January 2022.
· IFRS 1 amendments resulting from Annual Improvements to IFRS
Standards 2018-2020 (subsidiary as a first-time adopter) - Effective date 1
January 2022; and
· IFRS 9 amendments resulting from Annual Improvements to IFRS
Standards 2018-2020 (fees in the ''10 per cent'' test for derecognition of
financial liabilities) - Effective date 1 January 2022;
The following new standards and amendments to standards have been issued by
the International Accounting Standards Board but have not yet been endorsed by
the EU, accordingly, none of these standards have been applied in the current
year. The Board of Directors is currently assessing whether these standards
once endorsed by the EU will have any impact on the financial statements of
the Group and the Company.
· Amendments to IFRS 10 and IAS 28: Sale or contribution of assets
between an investor and its associate or joint venture - Postponed
indefinitely;
· Amendments to IAS 12 Income taxes: Deferred tax related to assets and
liabilities arising from a single transaction - Effective date 1
January 2023;
· Amendments to IFRS 16 Leases: Lease liability in a sale and leaseback
- Effective date 1 January 2024; and
· Amendments to IAS 1 Presentation of Financial Statements:
Classification of liabilities as current or non-current and classification of
liabilities as current or non-current - Effective date 1 January 2024.
Basis of consolidation
The consolidated financial statements include the financial statements of
Conroy Gold and Natural Resources P.L.C. and its subsidiaries. Subsidiaries
are entities controlled by the Company. Control exists when the Group is
exposed to or has the right to variable returns from its involvement with the
entity and has the ability to affect those returns through its control over
the entity. In assessing control, potential voting rights that presently are
exercisable are taken into account. The financial statements of subsidiaries
are included in the consolidated financial statements from the date that
control commences until the date that control ceases. Intra-Group balances,
and any unrealised income and expenses arising from intra-Group transactions
are eliminated in preparing the consolidated financial statements. The Company
recognises investment in subsidiaries at cost less impairment.
2. (Loss) / earnings per share
2022 2021
€ €
(Loss)/earnings for the financial year attributable to equity holders of the (256,484) 211,010
Company
Basic earnings per share
No. of shares No. of shares
Number of ordinary shares at start of financial year 39,262,880 26,213,872
Number of ordinary shares issued during the financial year - 13,049,008
Number of ordinary shares at end of financial year 39,262,880 39,262,880
Weighted average number of ordinary shares for the purposes of basic earnings 39,262,880 32,257,188
per share
(Loss)/earnings per ordinary share (0.0065) 0.0065
Diluted earnings/(loss) per share
The effect of share options and warrants is anti-dilutive.
3. Intangible Assets
Exploration and evaluation assets
Group: Cost 31 May 2022 31 May 2021
€ €
At 1 June 22,988,974 22,330,743
Expenditure during the financial year
· License and appraisal costs 30,986 299,113
· Other operating expenses 868,873 359,118
At 31 May 23,888,833 22,988,974
Exploration and evaluation assets relate to expenditure incurred in the
development of mineral exploration opportunities. These assets are carried at
historical cost and have been assessed for impairment in particular with
regard to the requirements of IFRS 6: Exploration for and Evaluation of
Mineral Resources relating to remaining licence or claim terms, likelihood of
renewal, likelihood of further expenditure, possible discontinuation of
activities over specific claims and available data which may suggest that the
recoverable value of an exploration and evaluation asset is less than its
carrying amount.
The Irish licenses in relation to Clontibret, Long-ford Down and Armagh were
transferred to the three new subsidiaries during the year. See Note 7. All
prior costs capitalised in line with IFRS 6 as above, in relation to these
three licenses, were transferred to the subsidiaries where the licenses are
now held. Costs incurred in the current year in relation to the three licenses
were also transferred to the subsidiaries.
The Board of Directors have considered the proposed work programmes for the
underlying mineral resources. They are satisfied that there are no indications
of impairment.
The Board of Directors note that the realisation of the intangible assets is
dependent on further successful development and ultimate production of the
mineral resources and the availability of sufficient finance to bring the
resources to economic maturity and profitability. Please refer to Note 16 of
the consolidated financial statements for details of further work commitments
Mineral interests are categorised as follows:
Group: Ireland 31 May 31 May
Cost 2022 2021
€ €
At 1 June 20,506,725 19,920,213
Expenditure during the financial year
· License and appraisal costs 28,752 281,261
· Other operating expenses 550,984 305,251
At 31 May 21,086,461 20,506,725
Group: Finland 31 May 31 May
Cost 2022 2021
€ €
At 1 June 2,482,249 2,410,530
Expenditure during the financial year
· License and appraisal costs 2,234 17,851
· Other operating expenses 317,889 53,868
At 31 May 2,802,372 2,482,249
4. Cash and Cash equivalents
Group 31 May 31 May
2022 2021
€ €
Cash held in bank accounts 1,216,097 1,513,286
1,216,097 1,513,286
5. Current liabilities
Trade and other payables
Group 31 May 31 May
2022 2021
€ €
Other creditors and accruals 552,795 506,050
Amounts falling due within one year:
Accrued Directors' remuneration
Fees and other emoluments 2,368,045 2,368,045
Pension contributions 164,675 164,675
Accrued former Directors' remuneration
Fees and other emoluments 507,345 507,345
Pension contributions 29,083 79,083
3,621,943 3,625,198
It is the Group's practice to agree terms of transactions, including payment
terms with suppliers. It is the Group's policy that payment is made according
to the agreed terms. The carrying value of the trade and other payables
approximates to their fair value.
The Directors, namely Professor Richard Conroy, Maureen T.A. Jones, Professor
Garth Earls, Brendan McMorrow, Howard Bird and former Directors, namely James
P. Jones, Séamus P. Fitzpatrick, C. David Wathen, Dr. Sorċa Conroy and
Michael E. Power, have confirmed that they will not seek repayment of amounts
owed to them by the Group and the Company of €3,069,148 (31 May 2021:
€3,119,148) for a minimum period of 12 months from the date of approval of
the consolidated financial statements, unless the Group has sufficient funds
to repay.
Related party loans - Group and Company
Related party loans 31 May 31 May
2022 2021
€ €
Opening balance 1 June 136,999 659,832
Loan conversion to equity - (440,408)
Loan repayments - (82,425)
Closing balance 31 May 136,999 136,999
The related party loans amounts relate to monies owed to Professor Richard
Conroy amounting to €101,999 (31 May 2021: €101,999), Maureen T.A. Jones
amounting to €Nil (31 May 2021: €Nil), Séamus P. Fitzpatrick (former
Director) amounting to €35,000 (31 May 2021: €35,000) and Dr. Sorċa
Conroy (former Director) amounting to €Nil (31 May 2021: €Nil). During the
prior year, as part of the share issuance on 16 March 2021, the following
amounts were converted to equity from the respective Directors' loans in
exchange for a total of 1,147,726 shares in the Company; €225,000 was
converted on the loan of Dr. Sorċa Conroy, €180,919 was converted on the
loan of Professor Richard Conroy and €34,489 was converted on the loan of
Séamus P. Fitzpatrick. The Directors and former Directors have confirmed that
they will not seek repayment of the remaining loan balances owed to them by
the Group and Company at 31 May 2022 within 12 months of the date of approval
of the consolidated financial statements, unless the Group has sufficient
funds to repay. There is no interest payable in respect of these loans, no
security has been attached to these loans and there is no repayment or
maturity terms. Séamus P. Fitzpatrick is a former director in the Company
having left the board in August 2017 (and is a shareholder of the Company
owning less than 3% of the issued share capital of the Company).
6. Non-current liabilities
Warrant liabilities
During the year ended 31 May 2022, no new warrants were issued. During the
prior year, 11,005,065 warrants were issued with a sterling exercise price and
a range of expiry times from six to twenty-four months. The fair value at
grant date amounted to €1,921,971 and was recorded as warrant liabilities
with a corresponding charge to share premium for those warrants issued as part
of the share issuance. At 31 May 2022, the warrants in issue were again fair
valued resulting in a movement in fair value of €585,954 being recorded in
the income statement and as a reduction in warrant liabilities. See note 18 to
the consolidated financial statements for further details.
Convertible loan
During the year ended 31 May 2020, the Company raised €350,000 through the
issue of two unsecured convertible loan notes ("Convertible Loan Notes") to
Hard Metal Machine Tools Limited (the "Lender"). Both Convertible Loan Notes
have a term of three years and attract interest at a rate of 5% per annum
which is payable on the redemption or conversion of the Convertible Loan
Notes. The Convertible Loan Notes are unsecured. The first Convertible Loan
Note has a monetary amount of €250,000 and was issued on 15 July 2019. This
Convertible Loan Note, including the total amount of accrued but unpaid
interest, is convertible at the conversion price of £0.07 at any time. The
second Convertible Loan Note has a monetary amount of €100,000 and was
issued on 30 October 2019. This Convertible Loan Note, including the total
amount of accrued but unpaid interest, is convertible at the conversion price
of £0.06 at any time. The convertible loans amount to €388,219 (31 May
2021: €378,080) at 31 May 2022.
31 May 31 May
2022 2021
€ €
Opening Balance 378,080 357,802
Interest payable 10,139 20,278
388,219 378,080
7. Non-controlling interests
Under the terms of the joint venture and related agreements entered into
between the Company and Demir Export on 31 December 2021, in return for
fulfilling funding and other obligations as set out in the agreements, Demir
Export will earn an equity interest in the following wholly owned subsidiaries
of the Company: Conroy Gold (Clontibret) Limited, Conroy Gold (Longford Down)
Limited and Conroy Gold (Armagh) Limited. The investment by Demir Export is
effected by the issuance of convertible shares in each subsidiary company
which have no voting or participation rights.
When all of the conditions (including, inter-alia a minimum of €5.5 million
in cash investment) in relation to the first phase of the joint venture
operation (Phase 1) have been fulfilled, the convertible shares will be
converted into ordinary shares in each subsidiary company such that Demir
Export will hold a 25% ordinary equity interest in each company. Demir Export
can earn further equity in each subsidiary company by meeting the commitments
set down in Phases 2 and 3 of the joint venture.
At 31 May 2022, Demir Export had invested €1,406,899 in the subsidiary
companies with convertible shares issued for the first €1,000,000 of this
investment and the balance to be issued post year end in line with the
agreement. This amount is recorded as a non-controlling interest at the year
end.
The joint venture agreements provide that in certain limited circumstances,
Demir Export will be entitled to a net smelter royalty in the licences, capped
at the level of investment made, in lieu of their convertible shares should it
exit or terminate its involvement in the joint venture during the current
Phase 1 stage.
31 May 31 May
2022 2021
€ €
Conroy Gold Clontibret Limited 1,206,899 -
Conroy Gold Longford Down Limited 100,000 -
Conroy Gold Armagh Limited 100,000 -
1,406,899 -
8. Commitments and contingencies
Exploration and evaluation activities
The Group has received prospecting licences under the Republic of Ireland
Mineral Development Acts 1940 to 1995 for areas in Monaghan and Cavan. It has
also received licences in Northern Ireland for areas in Armagh in accordance
with the Mineral Development Act (Northern Ireland) 1969.
At 31 May 2022, the Group had work commitments of €328,055 (31 May 2021:
€520,000) for year to May 2023, in respect of these prospecting licences
held. These commitments will be funded by Demir Export A.S., the JV partner on
Longford Down Massif as per the agreed terms of the JV agreement.
The Group also hold prospecting license in Finland which are currently under
application for extending, however there are no work or financial commitments
in respect of these licenses as at 31 May 2022 (31 May 2021: €Nil)
9. Related party transactions
a) Details as to shareholders and Directors' loans and share capital
transactions with Professor Richard Conroy, Maureen T.A. Jones, Séamus P.
Fitzpatrick (former Director) and Dr. Sorċa Conroy (former Director) are
outlined in in Note 12 of the consolidated financial statements. The loans do
not incur interest, are not secured and will not be called upon within twelve
months from the date of signing of these consolidated financial statements.
b) For the financial year ended 31 May 2022, the Company incurred costs
totalling €99,873 (31 May 2021: €54,872) on behalf of Karelian Diamond
Resources P.L.C., which has certain common shareholders and Directors. These
costs were recharged to Karelian Diamond Resources P.L.C. This intercompany
account does not incur interest and no final settlement of the balance has
been agreed. Both entities will continue to incur and share costs as with
prior years.
These costs are analysed as
follows:
2022 2021
€ €
Office salaries 72,469 49,048
Rent and rates 15,850 -
Other operating expenses 11,554 5,824
99,873 54,872
c) At 31 May 2022, the Company recorded a receivable of €199,806 from
Karelian Diamond Resources P.L.C. (31 May 2021: €169,933). Amounts from
Karelian Diamond Resources P.L.C. are included within "Trade and other
receivables" in the current and prior financial year statements. During the
financial year ended 31 May 2022, €70,000 was paid by (31 May 2021:
€173,530 paid to) Karelian Diamond Resources P.L.C. to the Company. During
the financial year ended the Company charged Karelian Diamond Resources P.L.C.
€99,873 (31 May 2021: €54,872) in respect of the allocation of certain
costs as detailed in (b) above. The Group and the Company will not seek
repayment of amounts owed to it by Karelian Diamond Resources P.L.C. within 12
months of the date of approval of the consolidated financial statements. No
interest is incurred on this intercompany account and there are no other terms
or conditions attached.
d) At 31 May 2022, Conroy Gold Limited owed €519,133 (31 May 2021:
€519,133) to the Company.
e) At 31 May 2022, the Company was owed €13,933 (31 May 2021:
€22,903) by Trans-International Oil Exploration Limited. Professor Richard
Conroy and Maureen T.A. Jones are Directors of Trans-International Oil
Exploration Limited. Professor Richard Conroy holds 50.7% of the share capital
of this company. A further €35,885 (31 May 2021: €28,961) is owed by
Conroy P.L.C., a company in which Professor Richard Conroy has a controlling
interest. Amounts totalling €3,076 (31 May 2021: €5,290) were owed by
companies in which Professor Richard Conroy and Maureen T.A. Jones hold a 50%
interest each. The amounts owed by the various companies are included within
"Other receivables" in the current and previous financial year's consolidated
statement of financial position and company's statement of financial position.
f) At 31 May 2022, the Company was owed €107,596 (31 May
2021:€Nil) by Conroy Gold Clontibret Limited, €101,412 (31 May
2021:€Nil) by Conroy Gold Longford-Down Limited and €44,620 (31 May
2021:€Nil) by Conroy Gold Armagh Limited. These balances relate to
administration expenses that are recharged to the subsidiaries from the
Company as per the agreements with the companies.
g) Details of key management compensation which comprises Directors'
remuneration is as set out in detail in Note 2 of the consolidated
financial statements.
h) Professor Garth Earls invoiced the Group for €9,785 (31 May 2021:
€24,068) during the financial year for professional services rendered to the
Group. At 31 May 2022, Professor Garth Earls was owed €33,331 (31 May 2021:
€33,331) in respect of these services. Brendan McMorrow invoiced the Group
for €14,725 (31 May 2021: €24,500) during the financial year for
professional services rendered to the Group. At 31 May 2022, Brendan McMorrow
was owed €26,189 (31 May 2021: €26,189) in respect of these services.
i) The Company raised €350,000 through the issue of two unsecured
Convertible Loan Notes to Hard Metal Machine Tools Limited (the "Lender")
during the year ended 31 May 2020. The Lender is a company 99% owned by an
existing shareholder of the Company. Refer to Note 13 to the consolidated
financial statements for details of the interest charged and the conditions
attached to the loans.
10. Post balance sheet events
Post year end, the Company announced that it has received notice of conversion
from the Lender in relation to the convertible loan notes which were issued as
on 15 July 2019 and 30 October 2019. The loan and all accrued interest will be
converted into new ordinary shares in the Company. The Company has made the
application to the London Stock Exchange for the new ordinary shares to be
admitted to trading on AIM. Upon admission to the AIM, Mr. Philip Hannigan
will have a beneficial interest in ordinary shares in the Company representing
19.19% of the issued share capital of the Company.
The Company announced the results from the four drill holes in the 3,000 metre
eight-hole step-out drilling programme on its Clontibret Gold deposit in
Ireland that was carried out in conjunction with the Company's joint venture
partner, Demir Export A.S.
The Company announced the issue of new ordinary shares to its former
non-executive director, Charles David Wathen, in lieu of his outstanding fees.
The Company made the application to the London Stock Exchange for the new
ordinary shares issued to be admitted to trading on AIM and these shares were
admitted to trading on AIM on 23 August 2022. As a result of these issues of
ordinary shares post year-end, the total number of ordinary shares in issue at
the date of signing of these financial statements is 44,756,101.
There were no further material events after the reporting year requiring
adjustment to or disclosure in these audited consolidated and company's
financial statements.
11. Approval of the audited consolidated financial statements for the
financial year ended 31 May 2022
These audited consolidated financial statements were approved by the Board of
Directors on 29 November 2022. A copy of the audited consolidated financial
statements will be available on the Company's website
www.conroygoldandnaturalresources.com
(http://www.conroygoldandnaturalresources.com) and will be available from the
Company's registered office at 3300 Lake Drive, Citywest Business Campus,
Dublin 24, D24 TD21, Ireland.
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