REG-Conroy Gold & Natural Resources Plc: Half-year Report
28/02/2022 07:15
28 February 2022
Conroy Gold and Natural Resources plc
(“Conroy Gold” or “the Company”)
Half-yearly results for the six months ended 30 November 2021
Conroy Gold (AIM: CGNR), the Irish-based resource company exploring and
developing gold projects in Ireland and Finland, is pleased to announce its
results for the six months ended 30 November 2021. Details of these can be
found below and a full copy of the statement can be viewed on the Company’s
website.
Highlights:
* Excellent technical results continued to be reported during the period
* New gold-in-soil anomoly near the Company’s Derryhennet-Clay Lake gold
target discovered
* Significant gold intersections reported from drilling completed in the
Cargalisgorran section of the Clay Lake gold target
* Negotiations with JV partner concluded post period
* Definitive agreement with Demir Export A.S. signed 31 December 2021
* The focus of the joint venture is the development of each of the licences
within the Company’s district scale gold trend to Construction Ready Status
and to build and operate a mine
Professor Richard Conroy, Chairman, commented:
“Excellent technical results continued to be reported and just after the
period end a joint venture partnership agreement with Demir Export A.S., a
large established mining company, was signed. I look forward to us working
together on the accelerated development and exploration programmes along the
65Km gold trend the Company has discovered, with the objective of bringing
into operation a gold mine, initially at Clontibret."
For further information please contact :
Conroy Gold and Natural Resources PLC Tel: +353-1-479-6180
Professor Richard Conroy, Chairman
Allenby Capital Limited (Nomad) Tel: +44-20-3328-5656
Nick Athanas/Nick Harriss
First Equity Limited (Broker) Tel: +44-20-7330-1883
Jason Robertson
Lothbury Financial Services Tel: +44-20-3290-0707
Michael Padley
Hall Communications Tel : +353-1-660-9377
Don Hall
Visit the website at: www.conroygold.com
Chairman's statement
I have great pleasure in presenting the Company's Half-Yearly Report and
Condensed Consolidated Financial Statements for the six-month period ended 30
November 2021. It has been one of continued successful progress.
A definitive agreement was reached for a joint venture partnership with Demir
Export A.S. (“Demir Export”). Shareholder approval for the joint
venture was sought, and obtained, on 22 December 2021, following which the
Company and Demir Export signed the formal agreement on 31 December 2021.
Excellent technical results continued to be reported during the period under
review, including the discovery of an extensive new gold target near the
Company's Clay Lake gold target.
Joint Venture Project with Demir Export A.S.
The primary focus of the joint venture (the “Demir Export JV” or
“Project Inis”) is the development of each of the licences within the
Company’s district scale gold trend to Construction Ready Status and then to
bring a gold mine or mines into operation. The initial focus of this work will
be on the existing gold deposit within the Clontibret licence. Achieving
“Construction Ready Status” includes, inter alia, securing all relevant
planning permissions and mining permits, together with an appropriate bank
feasibility study.
Demir Export is a long-established mining company with interests in iron,
coal, gold and base metals, including zinc and copper, in Turkey (Demir is the
Turkish for iron) As such it has a strong in-house technical team with both
mining and exploration expertise. It brings over 60 years of mine operating
experience to bear on the project and will place a strong emphasis on the
adoption of international environmental, and health and safety management
standards.
The Demir Export JV is deemed to be a fundamental change of business pursuant
to AIM Rule 15 and accordingly was conditional on the consent of Conroy
Gold’s shareholders being given at the extraordinary general meeting of the
Company held on 22 December 2021. Completion of the joint venture agreement is
also conditional on the necessary regulatory consents being granted in the
Republic of Ireland and Northern Ireland for the transfer of the licences to
the respective joint venture companies. The definitive agreement becomes
unconditional upon satisfaction of the outstanding conditions. As announced on
the 27 January 2022, the majority of the conditions have been met with various
licences transferred to the respective entities. Arrangements are still in
process for the Mines Royal options in Northern Ireland to be transferred by
the Company to Conroy Gold (Armagh) Limited which is the only outstanding
condition to completion of the JV.
Conroy Gold and Natural Resources PLC will, on completion, continue to be
classified pursuant to AIM Rule 15 as an operating company.
Key Terms of the JV
The investment by Demir Export will be directly into three special purpose
companies: Conroy Gold (Clontibret) Limited, Conroy Gold (Armagh) Limited and
Conroy Gold (Longford-Down) Limited (currently wholly owned subsidiaries of
the Company) (together the “JV Companies”) each holding the relevant
licence or group of licences.
The Earn-in Period will be divided into three phases:
* Phase 1: Investment in the JV Companies by Demir Export in work commitments
(except Demir in-house costs and operator fees) for an aggregate amount of
expenditure of €5.5 million plus the costs to the JV Companies of the
minimum regulatory work commitments, will earn Demir Export a 25% interest in
each of the JV Companies.
* Phase 2: Investment in the JV Companies by Demir Export in work commitments
(except Demir in-house costs and operator fees) for an aggregate amount of
expenditure of €4.5 million plus the costs to the JV Companies of the
minimum regulatory work commitments, will earn Demir Export an additional 15%
in each of the JV Companies.
* Phase 3: Investment in the JV Companies by Demir Export for the additional
funds required to reach Construction Ready Status will earn an additional
17.5% interest in the relevant JV Company which has reached construction ready
status in respect of any Licence, thus increasing Demir Export’s holding to
a total of 57.5% in that JV Company.
Conroy Gold, after Construction Ready Status is achieved, may either retain
its 42.5% interest in that JV Company by participating pro rata in the
expenditures for mine construction, or avail itself of a number of options
including diluting its interest, being carried for the expenditures through to
commercial production with a “Carry Loan” for a 25% interest with pay back
on 50% of the net profits due to Conroy Gold within a maximum payback period
of six years, or having its interest in such JV Company converted into a 2%
net smelter revenue royalty.
The licences in the JV have been divided into three Licence Groups, namely the
Clontibret Licence, the two Northern Ireland Licences, and the nine Other
Irish Licences with the Joint Venture Companies, (being currently wholly owned
subsidiaries of Conroy Gold) each owning a different Licence Group.
The aggregate compensation for the transfer of the Licenses to the joint
venture companies will be €1 million which will be paid to Conroy Gold on
completion under the agreement as part of Phase 1 expenditures set out
above.
A joint management committee (“JMC”) will be established to oversee,
plan and execute the various plans, in the work programme of the JV. The JMC
will be comprised of four members, two from each party, but with a Demir
Export representative having a casting vote, with minority protection rights
contained in a shareholders agreement to be entered into on completion of the
Agreement. It is anticipated that Conroy will be appointed as operator for an
initial two-year period after which the matter of operatorship will be
reviewed.
Exploration Results
The Company announced in August 2021 a newly discovered gold-in-soil target
that lies between the Company’s Derryhennet-Clay Lake gold target, where
drilling and trenching have identified significant grades and widths of
gold-in-bedrock, and the site where the Clay Lake Gold nugget, with a weight
of 30.05g and gold content of 28g, was discovered in the 1980.
The new anomaly covers an area of approximately 40 acres (c.700 metres by
c.250 metres) and trends north northwest – south southeast. It is aligned
on a similar trend to the gold lodes in the Clontibret gold deposit where the
Company has a (JORC 2012) gold resource of 517,000 ounces Au (320,000 oz Au
indicated and 197,000 oz Au inferred).
The discovery adds further to the series of gold targets in the north-eastern
area of the Company’s licences in the Longford–Down Massif on which an
exploration target (JORC 2012) of 8.8 million ounces Au has been estimated
(announced 2 August 2018), in addition to the already defined JORC compliant
gold resource of 517,000 ounces Au referred to above.
During the year significant gold intersections were reported from drilling
completed in the Cargalisgorran section of the Company's Clay Lake gold
target.
COVID-19
Since the outbreak of the COVID-19 pandemic, the Company has taken necessary
measures in accordance with Government guidelines to protect the health,
safety and wellbeing of its employees, contractors and partners in Ireland and
Finland. The Company is looking forward to the gradual removal of
restrictions over the coming six to twelve months enabling the Company
progress with its objectives with increased expedition.
Finance
The loss after taxation for the half year ended 30th November 2021 was
€278,699 (for the six month period ended 30th November 2020 : €703,294)
and the net assets as at 30th November 2021 were €19,708,801 (30th November
2020 : €18,696,306).
Directors and Staff
I would like to thank my fellow directors, staff and consultants for their
support and dedication, which has enabled the continued success of the
Company.
Outlook
I look forward to the Company, together with its Joint Venture partner - Demir
Export - making accelerated progress in both the development and exploration
programmes on the district scale gold trend the Company has discovered in the
Longford-Down Massif, with the primary objective of bringing into operation a
gold mine.
Yours faithfully,
__________________
Professor Richard Conroy
Chairman
28 February 2022
Condensed consolidated income statement and condensed consolidated statement
of comprehensive income for the six-month period ended 30 November 2021
Condensed consolidated income statement
Note Six month period ended 30 November 2021 (Unaudited) € Six month period ended 30 November 2020 (Unaudited) € Year ended 31 May 2021 (Audited) €
Continuing operations
Operating expenses (283,339) (318,332) (752,619)
Operating expenses – share-based payment expense - (395,097) (71,596)
Movement in fair value of warrants 6 14,750 - 1,055,490
Operating (loss)/profit (268,589) (713,429) 231,275
Finance income – interest 29 4 13
Interest expense (10,139) (10,139) (20,278)
(Loss)/Profit before taxation (278,699) (703,294) 211,010
Income tax expense - - -
(Loss)/Profit for the financial period/year (278,699) (703,294) 211,010
(Loss)/Profit per share
Basic and diluted (loss)/earnings per ordinary share 2 (€0.0071) (€0.0117) €0.0065
Condensed consolidated statement of comprehensive income
Six month period ended 30 November 2021 (Unaudited) € Six month period ended 30 November 2020 (Unaudited) € Year ended 31 May 2021 (Audited) €
(Loss)/Profit for the financial period/year (278,699) (703,294) 211,010
(Expense)/Income recognised in other comprehensive income - - -
Total comprehensive (expense)/income for the financial period/year (278,699) (703,294) 211,010
Condensed consolidated statement of financial position as at 30 November 2021
Note 30 November 2021 (Unaudited) 30 November 2020 (Unaudited) Year ended 31 May 2021 (Audited)
€ € €
Assets
Non-current assets
Intangible assets 4 23,357,402 22,525,305 22,988,974
Property, plant and equipment 8,531 10,416 9,474
Total non-current assets 23,365,933 22,535,721 22,998,448
Current assets
Cash and cash equivalents 742,199 503,879 1,513,286
Other receivables 346,600 229,608 458,769
Total current assets 1,088,799 733,487 1,972,055
Total assets 24,454,732 23,269,208 24,970,503
Equity
Capital and reserves
Called up share capital 39,263 32,260 39,263
Called up deferred share capital 10,504,431 10,504,431 10,504,431
Share premium 15,256,556 14,472,322 15,256,556
Capital conversion reserve fund 30,617 30,617 30,617
Share based payments reserve 42,664 919,893 42,664
Other reserve 79,929 8,333 79,929
Retained losses (6,244,659) (7,271,550) (5,966,238)
Total equity 19,708,801 18,696,306 19,987,222
Liabilities
Non-current liabilities
Convertible loan 5 388,219 367,941 378,080
Warrant Liabilities 6 828,254 - 843,004
Total non-current liabilities 1,216,473 367,941 1,221,084
Current liabilities
Trade and other payables: amounts falling due within one year 3,392,259 3,627,554 3,625,198
Related party loans 7 137,199 577,407 136,999
Total current liabilities 3,529,458 4,204,961 3,762,197
Total liabilities 4,745,931 4,572,902 4,983,281
Total equity and liabilities 24,454,732 23,269,208 24,970,503
Condensed consolidated statement of cash flows for the six-month period ended
30 November 2021
Six month period ended 30 November 2021 (Unaudited) € Six month period ended 30 November 2020 (Unaudited) € Year ended 31 May 2021 (Audited) €
Cash flows from operating activities
(Loss)/Profit for the financial period/year (278,699) (703,294) 211,010
Adjustments for:
Depreciation 943 942 1,885
Share based payment - 395,097 71,596
Interest expense 10,139 10,139 20,278
Movement in fair value of warrants (14,750) - (1,055,490)
Decrease/(Increase) in other receivables 61,730 (139,659) (368,821)
(Decrease)/increase in trade and other payables (232,939) (188,688) (32,105)
Payments to Karelian Diamond Resources P.L.C - - (228,402)
Net cash used in operating activities (453,576) (625,463) (1,380,049)
Cash flows from investing activities
Investment in exploration and evaluation (368,428) (194,562) (658,230)
Purchase of property plant and equipment - (667) (667)
Net cash used in investing activities (368,428) (195,229) (658,897)
Cash flows from financing activities
Issue of share capital - 1,393,721 3,643,044
Share issue cost 278 (34,533) (125,657)
Directors Loans 200 - -
Payments from/(to) Karelian Diamond resources P.L.C 50,439 (69,462) -
Payments to related parties - (82,425) (82,425)
Net cash provided by financing activities 50,917 1,207,301 3,434,962
(Decrease)/increase in cash and cash equivalents (771,087) 386,609 1,396,016
Cash and cash equivalents at beginning of financial period/year 1,513,286 117,270 177,270
Cash and cash equivalents at end of financial period/year 742,199 503,879 1,513,286
Condensed consolidated statement of changes in equity for the six-month period
ended 30 November 2021
Share capital Share premium Capital conversion reserve fund Share- based payment reserve Other reserve Retained deficit Total equity
€ € € € € € €
Balance at 1 June 2021 10,543,694 15,256,556 30,617 42,664 79,929 (5,966,238) 19,987,222
Share issue - - - - - - -
Share issue costs - - - - - 278 278
Share based payments - - - - - - -
Transfer from share-based payment reserve to retained deficit - - - - - - -
Loss for the financial year - - - - - (278,699) (278,699)
Balance at 30 November 2021 10,543,694 15,256,556 30,617 42,664 79,929 (6,244,659) 19,708,801
Balance at 1 June 2020 10,530,645 13,084,647 30,617 574,875 8,333 (6,583,802) 17,645,315
Share issue 6,046 1,387,675 - - - - 1,393,721
Share issue costs - - - - - (34,533) (34,533)
Share based payments - - - 395,097 - - 395,097
Transfer from share-based payment reserve to retained deficit - - - (50,079) - 50,079 -
Loss for the financial period - - - - - (703,294) (703,294)
Balance at 30 November 2020 10,536,691 14,472,322 30,617 919,893 8,333 (7,271,550) 18,696,306
Share capital
The share capital comprises the nominal value share capital issued for cash
and non-cash consideration. The share capital also comprises deferred share
capital. The deferred share capital arose through the restructuring of share
capital which was approved at General Meetings held on 26 February 2015 and 14
December 2015.
Authorised share capital:
The authorised share capital at 30 November 2021 comprised 11,995,569,058
ordinary shares of €0.001 each, 306,779,844 deferred shares of €0.02 each,
and 437,320,727 deferred shares of €0.00999 each (€22,500,000), (30
November 2020: 11,995,569,058 ordinary shares of €0.001 each, 306,779,844
deferred shares of €0.02 each, and 437,320,727 deferred shares of €0.00999
each (€22,500,000)).
Share premium
The share premium reserve comprises the excess consideration received in
respect of share capital over the nominal value of the shares issued.
Capital conversion reserve fund
The ordinary shares of the Company were re-nominalised from €0.03174435 each
to €0.03 each in 2001 and the amount by which the issued share capital of
the Company was reduced, was transferred to the capital conversion reserve
fund.
Share based payment reserve
The share based payment reserve represents the amount expensed to the
condensed consolidated income statement in addition to the amount capitalised
as part of intangible assets of share-based payments granted which are not yet
exercised and issued as shares. During the six month period ended 30 November
2021 no warrants expired. During the six month period ended 30 November 2020 a
number of unexercised warrants expired resulting in a transfer of €50,079
from this reserve to retained losses.
Retained losses
This reserve represents the accumulated losses absorbed by the Company to the
condensed consolidated statement of financial position date.
The accompanying notes form an integral part of these condensed consolidated
financial statements
1. Accounting policies
Reporting entity
Conroy Gold and Natural Resources plc (the “Company”) is a company
domiciled in Ireland. The unaudited condensed consolidated financial
statements for the six month period ended 30 November 2021 comprise the
condensed financial statements of the Company and its subsidiaries (together
referred to as the “Group”).
Basis of preparation and statement of compliance
Basis of preparation
The condensed consolidated financial statements have been prepared in
accordance with International Accounting Standard (“IAS”) 34: Interim
Financial Reporting.
The condensed consolidated financial statements do not include all the
information and disclosures required in the annual consolidated financial
statements, and should be read in conjunction with the Group’s annual
consolidated financial statements as at 31 May 2021, which are available on
the Group’s website - www.conroygold.com . The accounting policies adopted
in the presentation of the condensed consolidated financial statements are
consistent with those followed in the preparation of the Group’s annual
consolidated financial statements for the year ended 31 May 2021.
The condensed consolidated financial statements have been prepared under the
historical cost convention, except for derivative financial instruments which
are measured at fair value at each reporting date.
The condensed consolidated financial statements are presented in Euro
(“€”). € is the functional currency of the Group.
The preparation of condensed 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 financial
period in which the estimate is revised and in any future financial periods
affected. Details of critical judgements are disclosed in the accounting
policies detailed in the annual consolidated financial statements.
The financial information presented herein does not amount to statutory
consolidated financial statements that are required by Chapter 4 part 6 of the
Companies Act 2014 to be annexed to the annual return of the Company. The
statutory consolidated financial statements for the financial year ended 31
May 2021 were annexed to the annual return and filed with the Registrar of
Companies. The audit report on those consolidated financial statements was
unqualified.
These condensed consolidated financial statements were authorised for issue by
the Board of Directors on 28 February 2022.
Going concern
The Group incurred a loss of €278,699 for the six month period ended 30
November 2021 (six month period ended 30 November 2020: €703,294). The Group
had net current liabilities of €2,440,659 at that date (30 November 2020:
€3,471,474).
The Board of Directors have considered carefully the financial position of the
Group and in that context, have prepared and reviewed cash flow forecasts for
the period to 28 February 2023. In reviewing the proposed work programme for
exploration and evaluation assets, the results obtained from the exploration
programme and the prospects for raising additional funds as required, the
Board of Directors are satisfied that it is appropriate to prepare the
condensed consolidated financial statements on a going concern basis.
Recent accounting pronouncements
The Group and the Company has adopted the following amendments to standards
for the first time for its interim reporting period commencing from 1 June
2021:
* Amendments 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.
The adoption of the above amendments to standards and interpretations has been
considered for the purposes of these interim financial statements and is not
considered material.
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 interim period 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.
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;
* IFRS 1 amendments resulting from Annual Improvements to IFRS Standards
2018–2020 (subsidiary as a first-time adopter) – Effective date 1 January
2022;
* IFRS 3 amendments updating a reference to the Conceptual Framework –
Effective date 1 January 2022;
* 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;
* 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 17 Insurance contracts – Effective date deferred to 1 January 2023;
* IAS 1 amendments regarding the classification of liabilities - Effective
date 1 January 2023;
* IAS 1 amendments regarding the disclosure of accounting policies -
Effective date 1 January 2023;
* IAS 8 amendments regarding the definition of accounting estimates –
Effective date 1 January 2023;
* Amendments to IAS 12 Income taxes: Deferred tax related to assets and
liabilities arising from a single transaction – Effective date 1 January
2023;
* 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.
1. Loss per share
Basic earnings per share Six month period ended 30 November 2021 (Unaudited) € Six month period ended 30 November 2020 (Unaudited) € Year ended 31 May 2021 (Audited) €
(Loss)/Profit for the financial period/year attributable to equity holders of the Company (278,699) (703,294) 211,010
Number of ordinary shares at start of financial period/year 39,262,880 26,213,872 26,213,872
Number of ordinary shares issued during the financial period/year - 6,045,833 13,049,008
Number of ordinary shares at end of financial period/year 39,262,880 32,259,705 39,262,880
Weighted average number of ordinary shares for the purposes of basic earnings per share 39,262,880 29,249,769 32,257,188
Basic (loss)/earnings per ordinary share (€0.0071) (€0.0240) €0.0065
Weighted average number of ordinary shares for the purposes of diluted earnings per share 39,262,880 29,249,769 32,257,188
Diluted (loss)/earnings per ordinary share (€0.0071) (€0.0240) €0.0065
1. Subsidiaries
Shares in subsidiary companies (Unlisted shares) at cost: 30 November 2021 (Unaudited) € 30 November 2020 (Unaudited) € 31 May 2021 (Audited) €
Conroy Gold Limited – 100% owned - - -
Armagh gold Limited – 100% owned 3 - 3
Trans International Mineral Exploration Limited – 100% owned - 2 -
3 2 3
Trans International Mineral Exploration Limited was dissolved during the year
ended 31 May 2021.
The registered office of the above non-trading subsidiaries is 3300 Lake
Drive, Citywest Business Campus, Dublin 24, D24 TD21, Ireland.
Basis of consolidation
The condensed consolidated financial statements include the condensed
financial statements of Conroy Gold and Natural Resources plc 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 condensed
financial statements of subsidiaries are included in the condensed
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 condensed consolidated financial statements.
1. Intangible assets
Exploration and evaluation assets
Cost 30 November 2021 (Unaudited) € 30 November 2020 (Unaudited) € 31 May 2021 (Audited) €
At 1 June 22,988,974 22,330,743 22,330,743
Expenditure during the financial period/year
* License and appraisal costs 7,780 23,902 299,113
* Other operating expenses 360,648 170,660 359,118
* Equity settled share based payments - - -
At 30 November/31 May 23,357,402 22,525,305 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 as a result of 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 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.
1. Convertible loan
On 15 July 2019, the Company entered into an unsecured convertible loan
agreement for €250,000 with Hard Metal Machine Tools Limited (the
“Lender”). A further unsecured convertible loan note for €100,000 was
issued on 30 October 2019 to the Lender. The 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
loan notes (including interest accrued) are convertible into ordinary shares
in the capital of the Company at any time during the term of the loan notes at
a conversion price of 7 pence sterling per share in respect of the first loan
note and 6 pence sterling per share in respect of the second loan note
agreement.
As the convertible loans are made up of both equity and liability components,
they are considered to be compound financial instruments. At initial
recognition, the carrying amount of a compound financial instrument is
allocated to its equity and liability components. The fair value of the
conversion feature is taken directly to equity. The fair value of the
liability, which is the difference between the transaction price and the fair
value of the conversion feature, is recognised as a liability in the
consolidated statement of financial position. The liability is subsequently
measured at amortised cost. The Company accounts for the interest expense of
the convertible loan notes at the effective interest rate. The difference
between the effective interest rate and interest rate attached to the
convertible loan increases the carrying amount of the liability so that, on
maturity, the carrying amount is equal to the capital cash repayment that the
Company may be required to pay.
6. Warrant Liabilities
The Company holds Euro and Sterling based warrants. The Company estimates
the fair value of the sterling based warrants using the Binomial Lattice
Model. The determination of the fair value of the warrants is affected by the
Company’s share price along with other assumptions. The fair value of the
warrants in issue at 30 November 2021 was €828,254. The movement in fair
value for the six month period to 30 November 2021 resulted in a non-cash gain
of €14,750. There were no new warrants issued during the period and none
were exercised or lapsed.
7. Related party transactions
(a) Directors’ and former Directors’ loans 30 November 2021 (Unaudited) € 30 November 2020 (Unaudited) € 31 May 2021 (Audited) €
At 1 June 136,999 659,832 659,832
Loan adjustment 200 - -
Loan conversion to equity - - (440,408)
Loan repayment - (82,425) (82,425)
At 30 November/31 May 137,199 577,407 136,999
The Directors’ and former Directors’ loan amounts relate to monies owed to
Professor Richard Conroy (Chairman) amounting to €102,199 (30 November 2020:
€101,999) and Seamus Fitzpatrick amounting to €35,000 (30 November 2020:
€35,000).
Seamus 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). Seamus Fitzpatrick is not classified as
a related party under the AIM Rules for Companies. This loan is unsecured
with no interest payable and there is no repayment or maturity terms.
1. Apart from Directors’ remuneration, and loans from Directors, there have
been no contracts or arrangements entered into during the six month period in
which a Director of the Group had a material interest.
1. The Group shares accommodation and staff with Karelian Diamond Resources
plc which have certain common Directors and shareholders. For the six month
period ended 30 November 2021, the Group incurred costs totalling €50,311
(30 November 2020: €39,388) on behalf of Karelian Diamond Resources plc.
These costs were recharged to Karelian Diamond Resources plc by the Group. At
30 November 2021, the Group is owed €169,804 (30 November 2020: €50,381)
from Karelian Diamond Resources plc.
As a result of entering into a joint venture agreement with Demir Export
A.S. (Dex) on 31 December 2021, all work commitments for the forthcoming year
in respect of prospecting licences held by the Group will be met by Dex.
9. Subsequent events
There were no material events subsequent to the reporting date which
necessitate revision of the figures or disclosures included in the financial
statements.
10. Approval of the condensed consolidated financial statements
These condensed consolidated financial statements were approved by the Board
of Directors on 28 February 2022. A copy of the condensed consolidated
financial statements will be available on the Group’s website
www.conroygold.com on 28 February 2022.
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