REG - Corcel PLC - 2022 Final Audited Results and Notice of AGM
28/11/2022 07:00
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RNS Number : 6995H Corcel PLC 28 November 2022
Corcel PLC
("Corcel" or the "Company")
Final Audited Results
for the Year Ended 30 June 2022 and Notice of Annual General Meeting
28 November 2022
The Company's Annual Report and Financial Statements for 2022, extracts from
which are set out below, together with the Notice of the Company's Annual
General Meeting (AGM) which will be published to shareholders on Tuesday 29
November 2022 and a copy of the documents will be available shortly on the
Company's website at www.corcelplc.com.
The AGM is to be held at We Work, 123 Buckingham Palace Rd, London, SW1W 9SH
at 10:00a.m. on Thursday, 22 December 2022.
Chairman and CEO Statement
Overview
Corcel is an AIM listed company strategically increasing its exposure to
critical battery metals prior to the widely expected supply crunch and
associated structural price increases. Of particular focus for the Company
are nickel and cobalt, which are both core battery metals with large supply
deficits widely expected in the mid-2020s as the electric vehicle revolution
and economic decarbonisation gains pace.
The Company owns 41% of the Mambare nickel-cobalt project in Papua New Guinea,
where recent focus by the joint venture has been on securing a mining lease
covering a DSO operation at the project. In line with its growth strategy,
the Company acquired a second material nickel-cobalt project in Papua New
Guinea (PNG) during the period, signing a share purchase agreement with RMI in
August 2021 to acquire 100% of the issued share capital in
Australian-registered Niugini Nickel Pty Ltd, which owns 100% of the Wowo Gap
nickel-cobalt project. As consideration for the acquisition, the Company
released all liabilities and obligations in connection with its previously
acquired AUD 4,761,087 senior debt position in Resource Mining Corporation
Limited (RMI.) The Company sees significant synergies between the two PNG
battery metal projects and views this acquisition as a significant step in its
evolution towards building a leading regional battery metal and nickel
/cobalt business with material scale.
Having successfully acquired the Wowo Gap project, the Company then sought to
de-risk the project technically and to prepare for a mining lease
application. The first steps in this process were to undertake a GAP
analysis in anticipation of a Bankable Feasibility Study (BFS) and the
establishment of a JORC 2012 compliant resource for the Wowo Gap project.
The JORC resource, which was announced on 17 May 2022, applies much more
stringent economic criteria and validates Corcel's underlying rationale for
the asset acquisition, confirming Wowo Gap as a similar size and grade deposit
to the Company's sister project at Mambare, also in PNG.
Following these advancements of the Wowo gap project, we have now, after the
period end, announced our intended structure to fund, continue to grow and
ultimately develop the enlarged battery metals portfolio through the creation
of a Singapore based upstream Battery Metal joint venture, which will, subject
to contract, own CRCL's positions in both the Mambare and Wowo Gap projects.
We also intend to add into this joint venture a third battery metal project,
namely the Doncella lithium salt brine project in Argentina. The intended
joint venture structure, called Integrated Battery Metals ("IBM") offers
Corcel a 50% interest carried for the first $1.5m of expenditure as well as a
1.5% gross revenue royalty. Corcel retains control of the JV and will
nominate half of the Board while progressing a shared vision with the other
parties to list the JV in Singapore.
Alongside the creation of this joint venture, the Company welcomes Shangdong
New Power COSMO AM&T ("NPC") as a new cornerstone investor with a
significant equity position and Board representation. NPC had previously
been in discussions with the Company as a potential offtaker for the PNG
portfolio, and ultimately will now invest in both Corcel directly as well as
the battery metal projects via the IBM structure.
Following the increased focus on upstream battery metals as its core strategy,
and given the looming economic recession, the Company is in the process of
strategically winding down its UK based gas peaker and battery storage
portfolio. This has been progressed via the announced sale of the Tring Road
gas peaker project, which lowers the Company's debt burden following a
restructuring in October 2022 with a view to freeing up further capital for
immediate operational and capital commitments. The Board is now actively
working to further de-leverage the Company by repaying all of its debts well
before they become due.
The Company has also recently further broadened its portfolio with the
application for the Star Mountains Gold-Copper tenement in PNG and in securing
an option on the Mt. Weld rare earth project in Western Australia. These
opportunities are potentially large upside projects for Corcel, which only
require minimal upfront capital to access.
Discussion of Results
We report during the period that the Group incurred a loss of £2.128 million
whilst finance costs over the year increased to £0.224 million, reflecting
increased interest and finance fees (2021: £0.065million). Overall,
administrative costs increased slightly for the year to £1.26 million (2021:
£1.0 million) largely reflecting increased insurance costs, professional
services costs, share based payments (non-cash) and payroll costs.
Prospects
During these challenging times in global and domestic markets, the Board is
very cognisant that the continued support of our key stakeholders, including
lenders, shareholders and the new cornerstone investor, remains critical.
We are amongst the first movers in this space in the micro-cap sector and we
believe that our shareholders will, in due course, see significant rewards
from the hard miles we have covered building the foundations to support our
present strategic positioning, which now includes both an intended Singapore
listed joint venture as well as investments from large industrial and
strategic partners.
James Parsons Scott Kaintz
Executive Chairman Chief Executive Officer
Results and Dividends
The Group made a loss after taxation of £2.128 million (2021: £1.227
million). The Directors do not recommend the payment of a dividend. The
following financial statements are extracted from the audited financial
statements, which were approved by the Board of Directors and authorised for
issuance on 25 November 2022.
For further information, please contact:
Scott Kaintz 020 7747
9960
Corcel Plc CEO
James Joyce / Andrew de Andrade 0207 220 1666 WH
Ireland Ltd NOMAD & Broker
Patrick d'Ancona 0207 3900
230
Vigo Communications IR
The information contained within this announcement is deemed to constitute
inside information as stipulated under the retained EU law version of the
Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK
law by virtue of the European Union (Withdrawal) Act 2018. The information is
disclosed in accordance with the Company's obligations under Article 17 of the
UK MAR. Upon the publication of this announcement, this inside information is
now considered to be in the public domain.
Independent Auditor's Report
to the members of Corcel Plc
Opinion
We have audited the financial statements of Corcel Plc (the "parent company")
and its subsidiaries (the "group") for the year ended 30 June 2022 which
comprise the Consolidated Income Statement, the Consolidated Statement of
Comprehensive Income, the Consolidated and Parent Company Statements of
Financial Position, the Consolidated and Parent Company Statements of Changes
in Equity, the Consolidated and Parent Company Statements of Cash Flows and
notes to the financial statements, including a summary of significant
accounting policies. The financial reporting framework that has been applied
in their preparation is applicable law and UK-adopted international accounting
standards and as regards the parent company financial statements, as applied
in accordance with the provisions of the Companies Act 2006.
In our opinion:
· the financial statements give a true and fair view of the state
of the group's and of the parent company's affairs as at 30 June 2022 and of
the group's loss for the year then ended;
· the group financial statements have been properly prepared in
accordance with UK-adopted international accounting standards;
· the parent company financial statements have been properly
prepared in accordance with UK-adopted international accounting standards (UK
IAS) and as applied in accordance with the provisions of the Companies Act
2006; and
· the financial statements have been prepared in accordance with
the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor's responsibilities for the
audit of the financial statements section of our report. We are independent of
the group and parent company in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the UK, including the
FRC's Ethical Standard as applied to listed entities, and we have fulfilled
our other ethical responsibilities in accordance with these requirements. We
believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to note 1.2 in the financial statements, which indicates
that the group and the parent company are reliant on securing further
financing to meet committed expenditure requirements and working capital needs
as they fall due. As stated in note 1.2, these events or conditions, along
with the other matters as set forth in note 1.2, 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.
In auditing the financial statements, we have concluded that the director's
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation of the directors'
assessment of the group's and parent company's ability to continue to adopt
the going concern basis of accounting included:
· consideration of the objectives, policies and processes in managing
its working capital as well as exposure to financial, credit and liquidity
risks;
· reviewing the cash flow forecasts for the ensuing twelve months from
the date of approval of these group financial statements and assessment
thereof;
· performing sensitivity analysis on the cash flow forecasts prepared
by management, and challenging the assumptions included thereto;
· reviewing the management's going concern memorandum assessment and
discussing with management regarding the future plans and availability of
funding;
· reviewing the adequacy and completeness of disclosures in the group
financial statements; and
· reviewing post balance sheet events demonstrating ability to raise
funds and restructure debt.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Emphasis of Matter
We draw attention to note 1.5, which discloses the significant judgements used
by the management to determine the recoverability of the loan to and
investments in the joint venture (Oro Nickel Ltd) and subsidiary (Niugini
Nickel Pty, Ltd).
The recoverability of the loan of £1,502,000 and investment of £1,651,000
pertaining to Oro Nickel Ltd is included in the Consolidated and Parent
Company Statements of Financial Position and is dependent on the successful
renewal of the exploration license. The license remains under renewal as at
the year end.
The recoverability of exploration and evaluation asset of £1,026,000 in the
Consolidated Statement of Financial Position and loan of £228,000 and
investment of £1,014,000 in the Parent Company Statement of Financial
Position pertaining to Niugini Nickel Pty, Ltd is dependent on the successful
renewal of the exploration license. The license remains under renewal as at
the year end.
The good standing of these licences is critical for project development and
subsequent value extraction, which is key to the recoverability of the loans
and investments. Should the licenses not be renewed, an impairment may be
required to the value of the loans and investments as at 30 June 2022.
Our application of materiality
For the purposes of determining whether the financial statements are free from
material misstatement, we define materiality as the magnitude of misstatement
that makes it probable that the economic decisions of a reasonably
knowledgeable person, relying on the financial statements, would be changed or
influenced. We also determine a level of performance materiality which we use
to assess the extent of testing needed to reduce to an appropriately low level
the probability that the aggregate of uncorrected and undetected misstatements
exceeds materiality for the financial statements as a whole.
We apply the concept of materiality both in planning and performing our audit,
and in evaluating the effect of misstatements. Materiality is used to
determine the financial statement areas that are included within the scope of
our audit and the extent of sample sizes during the audit. No significant
changes have come to light during the course of the audit which required a
revision to our materiality for the financial statements as a whole.
Materiality for the group financial statements was set at £97,000 (2021:
£122,000). This was calculated as a percentage of net assets. Using our
professional judgement, we have determined this to be the principal benchmark
within the group financial statements as it is from these net assets that the
group seeks to deliver returns for shareholders, in particular the value of
exploration and development projects the group is interested in through its
subsidiaries, associates and joint ventures.
Materiality for the significant components of the group ranged from £45,000
(2021: £120,000) to £96,000 (2021: £120,000) calculated as a percentage of
net assets and risk assessment.
Performance materiality for the group financial statements was set at £67,900
(2021: £97,600) being 70% (2021: 80%) of materiality for the group financial
statements as a whole. The performance materiality for the significant
components is calculated on the same basis as group materiality.
Materiality and performance materiality for the parent company was set at
£96,000 (2021: £120,000) and £67,200 (2021: £96,000) respectively. The
materiality and performance materiality for the significant components is
calculated on the same basis as group materiality.
In determining performance materiality, we considered the following factors:
· our cumulative knowledge of the group and its environment,
including industry specific trends;
· the change in the level of judgement required in respect of the
key accounting estimates;
· significant transactions during the year;
· the stability in key management personnel; and
· the level of misstatements identified in prior periods.
We agreed to report to those charged with governance all corrected and
uncorrected misstatements we identified through our audit with a value in
excess of £4,850 (2021: £6,100) for the group and for the parent company a
value in excess of £4,800 (2021: £6,000). We also agreed to report any other
audit misstatements below that threshold that we believe warranted reporting
on qualitative grounds.
Our approach to the audit
Our audit is risk based and is designed to focus our efforts on the areas at
greatest risk of material misstatement, together with areas subject to
significant management judgement.
In designing our audit, we looked at areas which deemed to involve significant
judgement and estimation by the directors, such as the key audit matter
surrounding the carrying value of investments in subsidiaries, joint ventures,
and associates, and receivables from other group companies. Other judgemental
areas are the accounting treatment of subsidiary acquired during the year, as
well as the valuation of share-based payment and warrants transactions. We
also addressed the risk of management override of controls, including
consideration of whether there was evidence of bias that represented a risk of
material misstatement due to fraud.
The scope of our audit is based on significance of operations and materiality
Each component was assessed as to whether they were significant or not to the
group by either their size or risk. The parent company and the one operating
subsidiary were considered to be significant due to identified risk and size.
Work on all significant components of the group has been performed by us as
group auditor.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those
which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. In addition to the matter
described in the Material uncertainty related to going concern section, we
have determined the matters described below to be the key audit matters to be
communicated in our report.
Key Audit Matter How our scope addressed this matter
Carrying value of investment in subsidiaries, joint ventures and associates Our work in this area included:
and intra-group balances. (Refer to notes 10, 11 and 14)
· Review of management's assessment of recoverability of intragroup
Investments in subsidiaries and intra-group loans (parent company only), as receivables in accordance with IFRS 9 Financial Instruments criteria;
well as joint ventures(JV) and associates balances (group and parent company),
are the most significant balances in the
financial statements. · Consideration of recoverability of investments and intragroup loans
by reference to underlying net asset values, including the recoverability
potential of the underlying exploration projects (Mambare Nickel-Cobalt
project; Dempster Vanadium project and Wowo Gap Nickel project);
Intra-group balances
· Review of Board impairment papers in respect of investments,
The parent company currently has outstanding receivables due of £278,000 from including challenge and obtaining corroboration for key assumptions used;
subsidiaries (Flexible Grid Solutions Limited and Niugini Nickel Pty Ltd) and
£1,502,000 from JV (Oro Nickel Ltd).
· Obtaining and reviewing any relevant agreements relating to
investments (shareholder agreements; JV agreements; license agreements etc) to
Investments ensure all terms are complied with; and
The group and parent company own 50% interest in DVY196 Holdings Corp
(£337,000), and a 41% interest in Oro Nickel Ltd (£1,651,000) as at 30 June
2022, both of which have material value in the financial statements. · Confirming the group and the parent company held good title to the
license area;
The parent company has a 100% investment in Flexible Grid Solutions (£1) and
Corcel Australasia (£482). Through Corcel Australasia, it owns 100% of · Review of disclosures made in respect of these balances in accordance
Niugini Nickel Pty Ltd (£1,014,000). Through Flexible Grid Solutions, it owns with the relevant IFRSs.
100% of Flexible Grid One Limited and Weirs Drove Development Limited.
As noted in the Emphasis of matter section ,the exploration license held by
Given the continuing losses in these entities, and delays in advancing Oro Nickel JV in respect of the Mambare project and Niugini Nickel Pty Ltd
developments at the underlying projects, there is a risk that the receivable in respect of the Wowo Gap Nickel project remains under renewal and the
and investment balances may be impaired. As determining the recoverable value mining/exploration licenses applied for are yet to be granted. If these
or recoverability involves high degree of management estimate and judgement, applications were to be unsuccessful, this may result in an impairment to the
there is a risk of management bias and override of control. carrying value of the investments and intra-group balances.
Carrying value of exploration and evaluation asset (group) (Refer to note 22) Our work in this area included:
The exploration and evaluation asset represents a significant balance in the · Confirming that the group has good title to the licences held;
group's financial statements. There is the risk that this amount is impaired
and the capitalised amounts do not meet the recognition criteria as adopted by
the group. The capitalisation of the costs and determination of the carrying
value of asset are subject to high degree of management estimate and judgement · Testing the capitalised costs including the considerations made
and therefore there is a risk of management bias and override of control. in respect of IFRS 6 and policy adopted by the group;
· Review of Board impairment papers in respect of carrying value,
including challenge and obtaining corroboration for key assumptions used;
· Assessed the competence and objectivity of the experts preparing
Competent Persons Report (CPR) and satisfied ourselves that they were
appropriately qualified to carry out the reserves estimation;
· Reviewed the Competent Persons Report prepared by a third party
expert and challenged the inputs used;
· Review of disclosures made in respect of these balances in accordance
with the relevant IFRSs.
As noted in the Emphasis of matter section, the exploration license held by
Niugini Nickel Pty Ltd in respect of the Wowo Gap Nickel project remains under
renewal and the exploration license applied for has yet to be granted. If
these applications were to be unsuccessful, this may result in an impairment
to the carrying value.
Other information
The other information comprises the information included in the annual report,
other than the financial statements and our auditor's report thereon. The
directors are responsible for the other information contained within the
annual report. Our opinion on the group and parent company financial
statements does not cover the other information and, except to the extent
otherwise explicitly stated in our report, we do not express any form of
assurance conclusion thereon. Our responsibility is to read the other
information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge
obtained in the course of the audit, or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether this gives rise to a
material misstatement in the financial statements themselves. If, based on the
work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
•the information given in the strategic report and the directors' report for
the financial year for which the financial statements are prepared is
consistent with the financial statements; and
•the strategic report and the directors' report have been prepared in
accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and parent
company and their environment obtained in the course of the audit, we have not
identified material misstatements in the strategic report or the directors'
report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
•adequate accounting records have not been kept, or returns adequate for our
audit have not been received from branches not visited by us; or
•the parent company financial statements are not in agreement with the
accounting records and returns; or
•certain disclosures of directors' remuneration specified by law are not
made; or
•we have not received all the information and explanations we require for
our audit.
Responsibilities of directors
As explained more fully in the statement of directors' responsibilities, the
directors are responsible for the preparation of the group and parent company
financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the directors determine is necessary to
enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the group and parent company financial statements, the directors
are responsible for assessing the group and parent company's ability to
continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the group or the parent company or to
cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:
· We obtained an understanding of the group and parent company and
the sector in which they operate to identify laws and regulations that could
reasonably be expected to have a direct effect on the financial statements. We
obtained our understanding in this regard through discussions with management.
We also selected a specific audit team based on experience with auditing
entities within this industry facing similar audit and business risks.
· We determined the principal laws and regulations relevant to the
group and parent company in this regard to be those arising from:
o AIM Rules;
o UK Companies Act 2006;
o UK-adopted international accounting standards
o UK employment law; and
o Local environmental and mining regulations.
· We designed our audit procedures to ensure the audit team
considered whether there were any indications of non-compliance by the group
and parent company with those laws and regulations. These procedures included,
but were not limited to:
o Making enquiries of management;
o A review of Board minutes;
o A review of legal ledger accounts; and
o A review of RNS announcements.
· We also identified the risks of material misstatement of the
financial statements due to fraud. Aside from the non-rebuttable presumption
of a risk of fraud arising from management override of controls, we did not
identify any significant fraud risks.
· As in all of our audits, we addressed the risk of fraud arising
from management override of controls by performing audit procedures, which
included, but were not limited to: the testing of journals, reviewing
accounting estimates for evidence of bias (refer to the Key audit matter
section) and evaluating the business rationale of any significant transactions
that are unusual or outside the normal course of business.
Because of the inherent limitations of an audit, there is a risk that we will
not detect all irregularities, including those leading to a material
misstatement in the financial statements or non-compliance with regulation.
This risk increases the more that compliance with a law or regulation is
removed from the events and transactions reflected in the financial
statements, as we will be less likely to become aware of instances of
non-compliance. The risk is also greater regarding irregularities occurring
due to fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities
(http://www.frc.org.uk/auditorsresponsibilities) . This description forms part
of our auditor's report.
Use of our report
This report is made solely to the parent company's members, as a body, in
accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit
work has been undertaken so that we might state to the parent company's
members those matters we are required to state to them in an auditor's report
and for no other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone, other than the parent company and
the parent company's members as a body, for our audit work, for this report,
or for the opinions we have formed.
Joseph Archer (Senior Statutory Auditor)
15 Westferry
Circus
For and on behalf of PKF Littlejohn
LLP
Canary Wharf
Statutory
Auditor
London E14 4HD
25 November 2022
Financial Statements
Consolidated Statement of Financial Position
as at 30 June 2022
Notes 30 June 30 June
2022 2021
£'000 £'000
ASSETS
Non-current assets
Investments in associates and joint ventures 11 1,988 2,380
Exploration & evaluation assets 22 1,026 -
Property, plant and equipment 52 62
Goodwill 10 - -
Financial instruments - fair value through other comprehensive income (FVTOCI) 12 1 7
Financial instruments at fair value through profit and loss (FVTPL) 13 - 72
Other receivables 14 1,502 1,362
Total non-current assets 4,569 3,883
Current assets
Cash and cash equivalents 19 25 392
Financial instruments with fair value through profit and loss (FVTPL) 13 - -
Trade and other receivables 14 277 1,215
Total current assets 302 1,607
Total assets 4,871 5,490
EQUITY AND LIABILITIES
Equity attributable to owners of the Parent
Called up share capital 17 2,751 2,746
Share premium account 17 24,961 24,161
Shares to be issued 17 75 75
Other reserves 2,095 2,018
Retained earnings (26,758) (24,630)
Total equity attributable to owners of the Parent 3,124 4,370
Non-Controlling interests - -
Total equity 3,124 4,370
LIABILITIES
Non-current liabilities
Long-term borrowings 15 - -
Total non-current liabilities - -
Current liabilities
Trade and other payables 15 324 237
Short-term borrowings 15 1,423 883
Total current liabilities 1,747 1,120
Total equity and liabilities 4,871 5,490
The accompanying notes form an integral part of these Financial Statements.
These Financial Statements were approved by the Board of Directors and
authorised for issue on 25 November 2022 and are signed on its behalf by:
James Parsons
Executive Chairman
Consolidated Income Statement
for the year ended 30 June 2022
Notes Year to Year to
30 June 30 June
2022 2021
£'000 £'000
Gain on sale of financial instruments designated as FVTPL - (5)
Project expenses (91) (121)
Impairment of investments in joint ventures and financial instruments held at 11,13 (488) -
fair value through profit and loss (FVTPL)
Impairment of goodwill - (25)
Administrative expenses 4 (1,218) (1,014)
Impairment of property, plant and equipment (61) -
Impairment of receivables (67) -
Foreign currency gain/(loss) 1 -
Other income 23 9
Finance costs, net 5 (224) (65)
Share of loss of associates and joint ventures 11 (3) (6)
Loss for the year before taxation 3 (2,128) (1,227)
Taxation 6 - -
Loss for the year (2,128) (1,227)
Loss per share attributable to:
Equity holders of the Parent (2,128) (1,227)
Non-controlling interest - -
(2,128) (1,227)
Earnings per share attributable to owners of the Parent*:
Basic 9 (0.5) pence (0.4) pence
Diluted 9 (0.5) pence (0.4) pence
Consolidated Statement of Comprehensive Income
for the year ended 30 June 2021
30 June 30 June
2022 2021
£'000 £'000
Loss for the year (2,128) (1,227)
Other comprehensive income
Items that will be not be reclassified subsequently to profit or loss
Revaluation of FVTOCI investments (6) 3
Unrealised foreign currency gain/(loss) on translation of foreign operations (4) -
Total other comprehensive income for the year (10) 3
Total comprehensive loss for the year (2,138) (1,224)
Total comprehensive loss attributable to:
Equity holders of the Parent (2,138) (1,224)
Non-controlling interest - -
(2,138) (1,224)
All of the Group's operations are considered to be continuing.
The accompanying notes form an integral part of these Financial Statements.
Consolidated Statement of Changes in Equity
for the year ended 30 June 2021
The movements in equity during the year were as follows:
Share Share Retained Other Total
capital premium earnings reserves Equity attributable to owners of the Parent
£'000 account £'000 £'000 £'000 Non-controlling interests
£'000 Shares to be issued £'000 Total Equity
£'000 £'000
As at 1 July 2020 2,726 23,032 - (23,403) 908 3,263 13 3,276
Changes in equity for 2021 -
Loss for the year - - - (1,227) - (1,227) - (1,227)
Acquisition of non-controlling interests - - - - - - (13) (13)
Other comprehensive income for the year
Revaluation of FVTOCI investments - - - - 3 3 - 3
Total comprehensive income for the year - - - (1,227) 3 (1,224) (13) (1,237)
Transactions with owners
Issue of shares 20 2,287 - - - 2,307 - 2,307
Shares to be issued - - 75 - - 75 - 75
Share issue costs - (51) - - - (51) - (51)
Warrants issued - (1,107) - - 1,107 - - -
Total transactions with owners 20 1,129 75 - 1,107 2,331 - 2,331
As at 1 July 2021 2,746 24,161 75 (24,630) 2,018 4,370 - 4,370
Changes in equity for 2022
Loss for the year - - - (2,128) - (2,128) - (2,128)
Other comprehensive income for the year
Revaluation of FVTOCI investments - - - - (6) (6) - (6)
Unrealised foreign exchange loss arising on retranslation of foreign company - - - - (4) (4) - (4)
operations
Total comprehensive income for the year - - - (2,128) (10) (2,138) - (2,138)
Transactions with owners
Issue of shares 5 848 - - - 853 - 853
Share issue costs - (48) - - - (48) - (48)
Options issued - - - - 17 17 - 17
Warrants issued - - - - 70 70 - 70
Total transactions with owners 5 800 - - 87 892 - 892
As at 30 June 2022 2,751 24,961 75 (26,758) 2,095 3,124 - 3,124
See Note 16 for a description of each reserve included above.
Other reserves FVTOCI Warrant reserve Foreign Total
financial £'000 currency other
asset Share-based translation reserves
reserve payment reserve £
£'000 reserve £
£'000
As at 1 July 2020 1 99 273 535 908
Revaluation of FVTOCI investments 3 - - - 3
Warrants granted during the year - - 1,107 - 1,107
As at 1 July 2021 4 99 1,380 535 2,018
Revaluation of FVTOCI investments (6) - - - (6)
Unrealised foreign exchange loss arising on retranslation of foreign company - - - (4) (4)
operations
Options granted during the year - 17 - - 17
Warrants granted during the year - - 70 - 70
As at 30 June 2022 (2) 116 1,450 531 2,095
See Note 16 for a description of each reserve included above.
Consolidated Statement of Cash Flows
for the year ended 30 June 2022
Year to Year to
30 June 30 June
2022 2021
£ £
Cash flows from operating activities
Loss before taxation (2,128) (1,227)
Impairment of Joint venture projects 416 -
Impairment of financial assets FVTPL 72 -
Impairment of goodwill related to WDD - 25
Impairment of property, plant and equipment 61 -
Gain on sale of FVTPL investments - (5)
Finance cost, net (Note 5) 153 65
Share-based payments 109 -
Share of loss in associates and joint ventures, net of tax (Note 11) 3 (6)
Equity settled transactions 11 -
Increase in receivables (31) (53)
Increase in payables 142 374
Decrease in lease liabilities - (42)
Net cash outflow from operations (1,192) (869)
Cash flows from investing activities
Proceeds from sale of FVTOCI and FVTPL investments (Note 12 and 13) - 14
Purchase of financial assets carried at amortised cost (Note 14) (26) (355)
Purchase of property, plant and equipment (23) (62)
Expenditure on exploration & evaluation assets (59) -
Cash acquired on business combination 2 -
Acquisition of non-controlling interest - (15)
Payments for investments in associates and joint ventures (Note 11) (151) (183)
Net cash outflow from investing activities (257) (601)
Cash inflows from financing activities
Proceeds from issue of shares net of issue costs 403 1,382
Interest paid (Note 21) - -
Proceeds of new borrowings, as received net of associated fees (Note 21) 950 65
Repayment of borrowings (Note 21) (265) -
Net cash inflow from financing activities 1,088 1,447
Net decrease in cash and cash equivalents (361) (23)
Cash and cash equivalents at the beginning of period 392 415
Foreign exchange on translation of foreign currency (6) -
Cash and cash equivalents at end of period 25 392
Major non-cash transactions are disclosed in Note 21.
The accompanying notes and accounting policies form an integral part of these
Financial Statements.
Company Statement of Financial Position
Corcel Plc (Registration Number: 05227458) as at 30 June 2022
Notes 30 June 30 June
2022 2021
£ £
ASSETS
Non-current assets
Investments in subsidiaries 10 1,014 -
Investments in associates and joint ventures 11 2,112 2,501
Loans to subsidiaries 278 -
Financial assets with fair value through other comprehensive income (FVTOCI) 12 1 7
Financial instruments with fair value through profit and loss (FVTPL) - 72
Other receivables 14 1,502 1,379
Total non-current assets 4,907 3,959
Current assets
Cash and cash equivalents 19 20 387
Trade and other receivables 14 257 1,148
Total current assets 277 1,535
Total assets 5,184 5,494
EQUITY AND LIABILITIES
Called up share capital 17 2,751 2,746
Share premium account 17 24,961 24,161
Shares to be issued 17 75 75
Other reserves 1,564 1,483
Retained earnings (25,913) (24,065)
Total equity 3,438 4,440
LIABILITIES
Non-current liabilities
Long-term borrowings 15 - -
Total non-current liabilities - -
Current liabilities
Trade and other payables 15 323 211
Short-term borrowings 15 1,423 883
Total current liabilities 1,746 1,094
Total equity and liabilities 5,184 5,494
Company Statement of Comprehensive Income
As permitted by Section 408 Companies Act 2006, the Company has not presented
its own Statement of Comprehensive Income. The Company's loss for the
financial year was £1,848,349 (2021: loss of £1,366,448). The Company's
Total comprehensive loss for the financial year was £1,853,978 (2021: loss
£1,363,300).
These Financial Statements were approved by the Board of Directors and
authorised for issue on 25 November 2022 and are signed on its behalf by:
James Parsons
Executive Chairman
The accompanying notes form an integral part of these Financial Statements.
Company Statement of Changes in Equity
for the year ended 30 June 2022
The movements in reserves during the year were as follows:
Share Share Retained Other Total
capital premium Shares to be issued earnings reserves equity
£'000 account £'000 £'000 £'000 £'000
£'000
As at 30 June 2020 2,726 23,032 - (22,698) 373 3,433
Changes in equity for 2021
Loss for the year - - - (1,367) - (1,367)
Other comprehensive income for the year
Revaluation of FVTOCI investments - - - - 3 3
Total comprehensive income for the year - - - (1,367) 3 (1,364)
Transactions with owners
Issue of shares 20 2,287 - - - 2,307
Shares to be issued - - 75 - - 75
Share issue and fundraising costs - (51) - - - (51)
Share warrants granted during the year - (1,107) - - 1,107 -
Total transactions with owners 20 1,129 75 - 1,107 2,331
As at 1 July 2021 2,746 24,161 75 (24,065) 1,483 4,400
Changes in equity for 2022
Loss for the year - - - (1,848) - (1,848)
Other comprehensive income for the year
Revaluation of FVTOCI investments - - - - (6) (6)
Total comprehensive income for the year - - - (1,848) (6) (1,854)
Transactions with owners
Issue of shares 5 848 - - - 853
Share issue costs - (48) - - - (48)
Share options granted - - - - 17 17
Share warrants granted during the year - - - - 70 70
Total transactions with owners 5 800 - - 87 892
As at 30 June 2022 2,751 24,961 75 (25,913) 1,564 3,438
Other reserves FVTOCI Share-based Warrants reserve Total
financial payment £'000 other
asset reserve reserves
reserve £'000 £'000
£'000
As at 30 June 2020 1 99 273 373
Changes in equity for 2021
Other comprehensive income for the year
Revaluation of FVTOCI investments 3 - - 3
Transfer of FVTOCI reserve relating to impaired assets and disposals - - - -
Share options granted during the year - - - -
Warrants issued during the year - - 1,107 1,107
Total Other comprehensive (expenses) / income 3 - 1,107 1,110
As at 1 July 2021 4 99 1,380 1,483
Changes in equity for 2022
Other comprehensive income for the year
Revaluation of FVTOCI investments (6) - - (6)
Share options granted during the year - 17 - 17
Warrants issued during the year - - 70 70
Total Other comprehensive expenses (6) 17 70 81
As at 30 June 2022 (2) 116 1,450 1,564
See Note 16 for a description of each reserve included above.
Company Statement of Cash Flows
for the year ended 30 June 2022
Year to Year to
30 June 30 June
2022 2021
£'000 £'000
Cash flows from operating activities
Loss before taxation (1,848) (1,366)
Impairment of Joint venture projects 416 -
Impairment of financial assets FVTPL 72 -
Impairment of loans to and investments in subsidiaries 101 -
Finance costs 154 65
Share-based payments 109 -
Equity settled transactions 11 -
(Increase)/Decrease in receivables (219) 13
Increase in payables 302 377
Net cash outflow from operations (902) (911)
Cash flows from investing activities
Payments for investments in and loans to associates and joint ventures (164) (183)
Purchase of financial assets carried at amortised cost - (355)
Investments and loans to subsidiaries (389) -
Net cash outflows from investing activities (553) (538)
Cash inflows from financing activities
Proceeds from issue of shares, net of issue costs 403 1,382
Interest paid (Note 21) - -
Proceeds of new borrowings (Note 21) 950 65
Repayments of borrowings (Note 21) (265) -
Net cash inflow from financing activities 1,088 1,447
Decrease in cash and cash equivalents (367) (2)
Cash and cash equivalents at the beginning of period 387 389
Cash and cash equivalents at end of period 20 387
Major non-cash transactions are disclosed in Note 21.
The accompanying notes and accounting policies form an integral part of these
Financial Statements.
Notes to Financial Statements
1. Principal Accounting Policies
1.1 Authorisation of Financial Statements and Statement of Compliance with
IFRS
The Group Financial Statements of Corcel Plc (the "Company", "Corcel" or the
"Parent Company"), for the year ended 30 June 2022, were authorised for issue
by the Board on 25 November 2022 and signed on the Board's behalf by James
Parsons. Corcel Plc is a public limited company, incorporated and domiciled
in England and Wales. The Company's ordinary shares are traded on AIM. The
principal activity of the Company is the management of a portfolio of battery
metals exploration and development projects in Papua New Guinea and Canada,
coupled with a Flexible Grid Solutions energy storage business in the UK.
The registered address of the Company is Salisbury House, Suite 425, London
Wall, London EC2M 5PS.
1.2 Basis of Preparation
The Financial Statements have been prepared in accordance with UK adopted
international accounting standards ('IAS') in conformity with the requirements
of the Companies Act 2006. They are presented in thousand Pounds Sterling
(£'000), unless stated otherwise.
The principal accounting policies adopted are set out below.
Going Concern
It is the prime responsibility of the Board to ensure the Company and the
Group remains a going concern. At 30 June 2022, the Group had cash and cash
equivalents of £0.025 million and £1.4 million of borrowings and, as at the
date of signing these Financial Statements the, cash balance was £0.052
million. As at 24 November 2022, current borrowings of £683k of principal
are due during the first half of 2023, with an additional £0.506 million due
31 March 2023. The Directors anticipate having to raise additional funding
over the course of the financial year.
Having considered the prepared cashflow forecasts and the Group budgets, which
includes the possibility of Directors reducing or foregoing their salaries if
required, the progress in activities post year-end, including an anticipated
fundraise, the Directors consider that they will have access to adequate
resources in the 12 months from the date of the signing of these Financial
Statements. As a result, they consider it appropriate to continue to adopt the
going concern basis in the preparation of the Financial Statements.
Should the Group be unable to continue trading as a going concern, adjustments
would have to be made to reduce the value of the assets to their recoverable
amounts, to provide for further liabilities, which might arise, and to
classify non-current assets as current. The Financial Statements have been
prepared on the going concern basis and do not include the adjustments that
would result if the Group was unable to continue as a going concern. Due to
the factors described above, a material uncertainty exits, which may cast
significant doubt on the Group and the Company's ability to act as a going
concern. The auditors have made reference to this within their Audit Report.
More details surrounding this may be found in the Audit Report .
Company Statement of Comprehensive Income
As permitted by Section 408 Companies Act 2006, the Company has not presented
its own Statement of Comprehensive Income. The Company's loss for the
financial year was £1.848 million (2021: loss of £1.366 million). The
Company's other comprehensive loss for the financial year was £1.854 million
(2021: loss £1.363 million).
New Standards, Amendments and Interpretations Not Yet Adopted
At the date of approval of these Financial Statements, the following standards
and interpretations, which have not been applied in these Financial Statements
were in issue but not yet effective:
· Annual Improvements: 2018 - 2020 Cycle (effective 1 January
2023);
· Amendments to IFRS 17: Insurance Contracts (effective 1 January
2023);
· Amendments to IAS 1: Classifications of liabilities (effective 1
January 2023);
· Amendments to IAS 8: Accounting Policies, Changes to Accounting
Estimates and Errors (effective 1 January 2023);
· Amendments to IAS 12: Income Taxes - Deferred Tax arising from a
Single Transaction (effective 1 January 2023).
The effect of these new and amended Standards and Interpretations, which are
in issue but not yet mandatorily effective, is not expected to be material.
Standards Adopted Early by the Group
The Group has not adopted any standards or interpretations early in either the
current or the preceding financial year.
1.3 Basis of Consolidation
The consolidated Financial Statements of the Group incorporate the Financial
Statements of the Company and entities controlled by the Company, its
subsidiaries, made up to 30 June each year.
Subsidiaries
Subsidiaries are entities over which the Group has the power to govern the
financial and operating policies so as to obtain economic benefits from their
activities. Subsidiaries are consolidated from the date on which control is
obtained, the acquisition date, until the date that control ceases. They are
deconsolidated from the date on which control ceases.
The acquisition method of accounting is used to account for the acquisition of
subsidiaries by the Group. The cost of an acquisition is measured as the fair
value of the assets given, equity instruments issued, contingent consideration
and liabilities incurred or assumed at the date of exchange. Costs, directly
attributable to the acquisition, are expensed as incurred. Identifiable assets
acquired and liabilities and contingent liabilities assumed in a business
combination are initially measured at fair value at the acquisition date.
Provisional fair values are adjusted against goodwill if additional
information is obtained within one year of the acquisition date about facts or
circumstances existing at the acquisition date. Other changes in provisional
fair values are recognised through profit or loss.
Intra-group transactions, balances and unrealised gains and losses on
transactions between Group companies are eliminated on consolidation, except
to the extent that intra-group losses indicate an impairment.
Goodwill is capitalised as an intangible asset with any impairment in carrying
value being charged to the Consolidated Statement of Comprehensive Income. Any
impairment recognised for goodwill is not reversed.
A change in the ownership interest of a subsidiary, without a loss of control,
is accounted for as an equity transaction. If the Group loses control over a
subsidiary, it:
· derecognises the assets (including goodwill) and liabilities of
the subsidiary;
· derecognises the carrying amount of any non-controlling interest;
· derecognises the cumulative translation differences recorded in
equity;
· recognises the fair value of the consideration received;
· recognises the fair value of any investment retained;
· recognises any surplus or deficit in profit or loss; and
· reclassifies the Parent's share of components previously
recognised in other comprehensive income to profit or loss or retained
earnings, as appropriate.
Non-Controlling Interests
Profit or loss and each component of other comprehensive income are allocated
between the Parent and non-controlling interests, even if this results in the
non-controlling interest having a deficit balance.
Transactions with non-controlling interests that do not result in loss of
control are accounted for as equity transactions. Any differences between the
adjustment for the non-controlling interest and the fair value of
consideration paid or received are recognised in equity.
1.4 Summary of Significant Accounting Policies
1.4.1 Investment in Associates
An associate is an entity over which the Company is in a position to exercise
significant influence, but not control or joint control, through participation
in the financial and operating policy decisions of the investee.
Investments in associates are recognised in the Consolidated Financial
Statements, using the equity method of accounting. The Group's share of
post-acquisition profits or losses is recognised in profit or loss and its
share of post-acquisition movements in other comprehensive income are
recognised directly in other comprehensive income. The carrying value of the
investment, including goodwill, is tested for impairment when there is
objective evidence of impairment. Losses in excess of the Group's interest in
those associates are not recognised unless the Group has incurred obligations
or made payments on behalf of the associate.
Where a Group company transacts with an associate of the Group, unrealised
gains are eliminated to the extent of the Group's interest in the relevant
associate. Unrealised losses are also eliminated unless the transaction
provides evidence of an impairment of the asset transferred in which case
appropriate provision is made for impairment.
Where the Company's holding in an associate is diluted, the Company recognises
a gain or loss on dilution in profit and loss. This is calculated as the
difference between the Company's share of proceeds received for the dilutive
share issue and the value of the Company's effective disposal.
In the Company accounts investments in associates are recognised and held at
cost. The carrying value of the investment is tested for impairment, when
there is objective evidence of impairment. Impairment charges are included in
the Company Statement of Comprehensive Income.
1.4.2 Interests in Joint Ventures
A joint venture is a joint arrangement, whereby the partners, who have joint
control of the arrangement, have rights to the net assets of the joint
arrangement. Joint control is the contractually agreed sharing of control of
the joint arrangement, which exists only when decisions on relevant activities
require the unanimous consent of the parties sharing control. The Group
recognises its interest in the entity's assets and liabilities, using the
equity method of accounting. Under the equity method, the interest in the
joint venture is carried in the balance sheet at cost plus post-acquisition
changes in the Group's share of its net assets, less distributions received
and less any impairment in value of individual investments. The Group Income
Statement reflects the share of the jointly controlled entity's results after
tax. In the Company only financial statements, the Company's interests in
Joint Ventures is recognised at historic cost less any impairment charged to
date.
Any goodwill arising on the acquisition of a jointly controlled entity is
included in the carrying amount of the jointly controlled entity and is not
amortised. To the extent that the net fair value of the entity's identifiable
assets, liabilities and contingent liabilities is greater than the cost of the
investment, a gain is recognised and added to the Group's share of the
entity's profit or loss in the period in which the investment is acquired.
Financial Statements of the jointly controlled entity will be prepared for the
same reporting period as the Group. Where necessary, adjustments are made to
bring the accounting policies used into line with those of the Group and to
reflect impairment losses where appropriate. Adjustments are also made in the
Group's Financial Statements to eliminate the Group's share of unrealised
gains and losses on transactions between the Group and its jointly controlled
entity. The Group ceases to use the equity method on the date from which it no
longer has joint control over, or significant influence in, the joint venture.
At 30 June 2022, the Group had following contractual arrangements, which were
classified as investments in associates and joint ventures:
· Oro Nickel Ltd (41% interest), a contractual arrangement with
Battery Metals Pty Ltd, which represents a joint venture established through
an interest in a jointly controlled entity, in order to develop and exploit
the Mambare nickel project;
· DVY196 Holdings Corp ("DVY"), 50% interest in a North American
vanadium and nickel project;
· ARL 021 Limited, a 40% interest in the Tring Road 50MW gas peaker
project.
1.4.3 Taxation
Corporation tax payable is provided on taxable profits at the prevailing UK
tax rate. The tax expense represents the sum of the current tax expense and
deferred tax expense.
The tax currently payable is based on taxable profit for the year. Taxable
profit differs from accounting profit as reported in the 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 that are
never taxable or deductible. The Group's liability for current tax is measured
using tax rates that have been enacted or substantively enacted by the
reporting date.
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amount of assets and liabilities in the Financial
Statements and the corresponding tax bases used in the computation of taxable
profit and is accounted for using the balance sheet liability method. Deferred
tax liabilities are 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. Such assets and liabilities are not recognised if
the temporary difference arises from the initial recognition of goodwill or
from the initial recognition, other than in a business combination, of other
assets and liabilities in a transaction, which affects neither the taxable
profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences
arising on investments in subsidiaries and associates and interests in joint
ventures, except where the Group is able to control the reversal of the
temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future.
Deferred tax is calculated at the tax rates that are expected to apply to the
period when the asset is realised or the liability is settled based upon tax
rates that have been enacted or substantively enacted by the reporting date.
Deferred tax is charged or credited in profit or loss, except when it relates
to items credited or charged directly to equity, in which case the deferred
tax is also dealt with in equity, or items charged or credited directly to
other comprehensive income, in which case the deferred tax is also recognised
in other comprehensive income.
Deferred tax assets and liabilities are offset where there is a legally
enforceable right to offset current tax assets and liabilities and the
deferred tax relates to income tax levied by the same tax authorities on
either:
· the same taxable entity; or
· different taxable entities, which intend to settle current tax
assets and liabilities on a net basis or to realise and settle them
simultaneously in each future period when the significant deferred tax assets
and liabilities are expected to be realised or settled.
1.4.4 Property, Plant and Equipment
Property, plant and equipment acquired and identified as having a useful life
that exceeds one year is capitalised at cost and is depreciated on a
straight-line basis at annual rates that will reduce book values to estimated
residual values over their anticipated useful lives as follows:
Office furniture, fixtures and fittings - 33% per annum
Leasehold improvements - 5% per annum
1.4.5 Foreign Currencies
Both the functional and presentational currency of Corcel Plc is Sterling
(£). Each Group entity determines its own functional currency and items
included in the Financial Statements of each entity are measured using that
functional currency.
The functional currencies of the foreign subsidiaries and joint ventures are
the Australian Dollar ("AUD"), the Papua New Guinea Kina ("PNG") and the US
Dollar ("USD").
Transactions in currencies other than the functional currency of the relevant
entity are initially recorded at the exchange rate prevailing on the dates of
the transaction. At each reporting date, monetary assets and liabilities that
are denominated in foreign currencies are retranslated at the exchange rate
prevailing at the reporting date. Non-monetary assets and liabilities carried
at fair value that are denominated in foreign currencies are translated at the
rates prevailing at the date, when the fair value was determined. Gains and
losses arising on retranslation are included in profit or loss for the period,
except for exchange differences on non-monetary assets and liabilities, which
are recognised directly in other comprehensive income, when the changes in
fair value are recognised directly in other comprehensive income.
On consolidation, the assets and liabilities of the Group's overseas
operations are translated into the Group's presentational currency at exchange
rates prevailing at the reporting date. Income and expense items are
translated at the average exchange rates for the period unless exchange rates
have fluctuated significantly during the year, in which case, the exchange
rate at the date of the transaction is used. All exchange differences arising,
if any, are recognised as other comprehensive income and are transferred to
the Group's foreign currency translation reserve.
Exploration Assets
Exploration assets comprise exploration and evaluation costs, incurred on
prospects at an exploratory stage. These costs include the cost of
acquisition, exploration, determination of recoverable reserves, economic
feasibility studies and all technical and administrative overheads directly
associated with those projects. These costs are carried forward in the
Statement of Financial Position as non-current intangible assets less
provision for identified impairments. Costs associated with an exploration
activity will only be capitalised if, in management's opinion, the results
from that activity led to a material increase in the market value of the
exploration asset, which is determined by management to be following the
economic feasibility stage.
The Group adopts the "area of interest" method of accounting whereby all
exploration and development costs, relating to an area of interest, are
capitalised and carried forward until either abandoned or an indicator of
impairment is determined. In the event that an area of interest is abandoned,
or if, following determination of an impairment indicator being present, the
Directors consider the expenditure to be of no value, accumulated exploration
costs are written off in the financial year in which the decision is made. All
expenditure incurred prior to approval of an application is expensed, with the
exception of refundable rent, which is raised as a receivable.
Upon disposal, the difference between the fair value of consideration
receivable for exploration assets and the relevant cost within non-current
assets is recognised in the Income Statement.
1.4.6 Impairment of Non-Financial Assets
The carrying values of assets, other than those to which IAS 36 "Impairment of
Assets" does not apply, are reviewed at the end of each reporting period for
impairment, when there is an indication that the assets might be impaired.
Impairment is measured by comparing the carrying values of the assets with
their recoverable amounts. The recoverable amount of the assets is the higher
of the assets' fair value less costs to sell and their value-in-use, which is
measured by reference to discounted future cash flow.
An impairment loss is recognised immediately in the Consolidated Statement of
Comprehensive Income.
When there is a change in the estimates, used to determine the recoverable
amount, a subsequent increase in the recoverable amount of an asset is treated
as a reversal of the previous impairment loss and is recognised to the extent
of the carrying amount of the asset that would have been determined (net of
amortisation and depreciation) had no impairment loss been recognised. The
reversal is recognised in profit or loss immediately, unless the asset is
carried at its revalued amount, in which case the reversal of the impairment
loss is treated as a revaluation increase.
1.4.7 Share-Based Payments
Share Options
The Group operates equity-settled share-based payment arrangements, whereby
the fair value of services provided is determined indirectly by reference to
the fair value of the instrument granted.
The fair value of options granted to Directors and others, in respect of
services provided, is recognised as an expense in the Income Statement with a
corresponding increase in equity reserves - the share-based payment reserve
until the award has been settled and then make a transfer to share capital. On
exercise or lapse of share options, the proportion of the share-based payment
reserve, relevant to those options is retained in the share-based payment
reserve. On exercise, equity is also increased by the amount of the proceeds
received.
The fair value is measured at grant date and charged over the vesting period
during which the option becomes unconditional.
The fair value of options is calculated using the Black-Scholes model, taking
into account the terms and conditions upon which the options were granted. The
exercise price is fixed at the date of grant.
Non-market conditions are performance conditions that are not related to the
market price of the entity's equity instruments. They are not considered, when
estimating the fair value of a share-based payment. Where the vesting period
is linked to a non-market performance condition, the Group recognises the
goods and services it has acquired during the vesting period, based on the
best available estimate of the number of equity instruments expected to vest.
The estimate is reconsidered at each reporting date, based on factors such as
a shortened vesting period, and the cumulative expense is "trued up" for both
the change in the number expected to vest and any change in the expected
vesting period.
Market conditions are performance conditions that relate to the market price
of the entity's equity instruments. These conditions are included in the
estimate of the fair value of a share-based payment. They are not taken into
account for the purpose of estimating the number of equity instruments that
will vest. Where the vesting period is linked to a market performance
condition, the Group estimates the expected vesting period. If the actual
vesting period is shorter than estimated, the charge is be accelerated in the
period that the entity delivers the cash or equity instruments to the
counterparty. When the vesting period is longer, the expense is recognised
over the originally estimated vesting period.
For other equity instruments, granted during the year (i.e. other than share
options), fair value is measured on the basis of an observable market price.
Share Incentive Plan
Where the shares are granted to the employees under Share Incentive Plan, the
fair value of services provided is determined indirectly by reference to the
fair value of the free, partnership and matching shares granted on the grant
date. Fair value of shares is measured on the basis of an observable market
price, i.e. share price as at grant date and is recognised as an expense in
the Income Statement on the date of the grant. For the partnership shares, the
charge is calculated as the excess of the mid-market price on the date of
grant over the employee's contribution.
1.4.8 Pension
The Group operates a defined contribution pension plan, which requires
contributions to be made to a separately administered fund. Contributions to
the defined contribution scheme are charged to the profit and loss account as
they become payable.
1.4.9 Finance Income/Expense
Finance income and expense is recognised as interest accrues, using the
effective interest method. This is a method of calculating the amortised cost
of a financial asset and allocating the interest income over the relevant
period, using the effective interest rate, which is the rate that exactly
discounts estimated future cash receipts/re-payments through the expected life
of the financial asset or liability to the net carrying amount of the
financial asset or liability.
1.4.10 Financial Instruments
The Group classifies its financial assets into one of the categories discussed
below, depending on the purpose for which the asset was acquired. Other than
financial assets in a qualifying hedging relationship, the Group's accounting
policy for each category is as follows:
Fair Value through Profit or Loss (FVTPL)
This category comprises in-the-money derivatives and out-of-money derivatives,
where the time value offsets the negative intrinsic value. They are carried in
the Statement of Financial Position at fair value with changes in fair value
recognised in the Consolidated Statement of Comprehensive Income in the
finance income or expense line. Other than derivative financial instruments,
which are not designated as hedging instruments, the Group does not have any
assets held for trading nor does it voluntarily classify any financial assets
as being at fair value through profit or loss.
Amortised Cost
These assets comprise the types of financial assets, where the objective is to
hold these assets in order to collect contractual cash flows and the
contractual cash flows are solely payments of principal and interest. They are
initially recognised at fair value plus transaction costs that are directly
attributable to their acquisition or issue and are subsequently carried at
amortised cost, using the effective interest rate method, less provision for
impairment. Impairment provisions for current and non-current trade
receivables are recognised, based on the simplified approach within IFRS 9,
using a provision matrix in the determination of the lifetime expected credit
losses. During this process, the probability of the non-payment of the trade
receivables is assessed. This probability is then multiplied by the amount of
the expected loss arising from default to determine the lifetime expected
credit loss for the trade receivables. For the receivables, which are reported
net, such provisions are recorded in a separate provision account, with the
loss being recognised in the consolidated statement of comprehensive income.
On confirmation that the receivable will not be collectable, the gross
carrying value of the asset is written off against the associated provision.
Impairment provisions, for receivables from related parties and loans to
related parties, are recognised based on a forward-looking expected credit
loss model. The methodology used to determine the amount of the provision is
based on whether there has been a significant increase in credit risk since
initial recognition of the financial asset. For those, where the credit risk
has not increased significantly since initial recognition of the financial
asset, twelve month expected credit losses along with gross interest income
are recognised. For those for which credit risk has increased significantly,
lifetime expected credit losses along with the gross interest income are
recognised. For those that are determined to be credit impaired, lifetime
expected credit losses along with interest income on a net basis are
recognised.
The Group's financial assets measured at amortised cost comprise trade and
other receivables and cash and cash equivalents in the Consolidated Statement
of Financial Position. Cash and cash equivalents include cash in hand,
deposits held at call with banks, other short term highly liquid investments
with original maturities of three months or less, and - for the purpose of the
statement of cash flows - bank overdrafts. Bank overdrafts are shown within
loans and borrowings in current liabilities on the Consolidated Statement of
Financial Position.
Fair Value through Other Comprehensive Income (FVTOCI)
The Group held a number of strategic investments in listed and unlisted
entities, which are not accounted for as subsidiaries, associates or jointly
controlled entities. For those investments, the Group has made an irrevocable
election to classify the investments at fair value through other comprehensive
income rather than through profit or loss as the Group considers this
measurement to be the most representative of the business model for these
assets. They are carried at fair value with changes in fair value recognised
in other comprehensive income and accumulated in the fair value through other
comprehensive income reserve. Upon disposal any balance within fair value
through other comprehensive income reserve is reclassified directly to
retained earnings and is not reclassified to profit or loss.
Dividends are recognised in profit or loss, unless the dividend clearly
represents a recovery of part of the cost of the investment, in which case the
full or partial amount of the dividend is recorded against the associated
investments carrying amount.
Purchases and sales of financial assets, measured at fair value through other
comprehensive income, are recognised on settlement date with any change in
fair value between trade date and settlement date being recognised in the fair
value through other comprehensive income reserve.
Financial Liabilities
The Group classifies its financial liabilities into one of two categories,
depending on the purpose for which the liability was acquired:
Other Financial Liabilities
Other financial liabilities include:
· Borrowings, which are initially recognised at fair value net of
any transaction costs, directly attributable to the issue of the instrument.
Such interest-bearing liabilities are subsequently measured at amortised cost,
using the effective interest rate method, which ensures that any interest
expense over the period to repayment is at a constant rate on the balance of
the liability carried in the Consolidated Statement of Financial Position. For
the purposes of each financial liability, interest expense includes initial
transaction costs and any premium payable on redemption as well as any
interest or coupon payable, while the liability is outstanding.
· Liability components of convertible loan notes are measured as
described further below.
· Trade payables and other short-term monetary liabilities, which
are initially recognised at fair value and subsequently carried at amortised
cost, using the effective interest method.
Fair Value Measurement
Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at
the measurement date. The fair value measurement is based on the presumption
that the transaction to sell the asset or transfer the liability takes place
either:
· In the principal market for the asset or liability; or
· In the absence of a principal market, in the most advantageous
market for the asset or liability.
The principal or the most advantageous market must be accessible by the Group.
The fair value of an asset or a liability is measured, using the assumptions
that market participants would use when pricing the asset or liability,
assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market
participant's ability to generate economic benefits by using the asset in its
highest and best use or by selling it to another market participant that would
use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances
and, for which sufficient data are available to measure fair value, maximising
the use of relevant observable inputs and minimising the use of unobservable
inputs.
All assets and liabilities, for which fair value is measured or disclosed in
the Financial Statements, are categorised within the fair value hierarchy,
described as follows, based on the lowest level input that is significant to
the fair value measurement as a whole:
· Level 1 - Quoted (unadjusted) market prices in active markets for
identical assets or liabilities;
· Level 2 - Valuation techniques for which the lowest level input
that is significant to the fair value measurement is directly or indirectly
observable; and
· Level 3 - Valuation techniques for which the lowest level input
that is significant to the fair value measurement is unobservable.
For assets and liabilities that are recognised in the Financial Statements on
a recurring basis, the Group determines whether transfers have occurred
between levels in the hierarchy by re-assessing categorisation (based on the
lowest level input that is significant to the fair value measurement as a
whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Group has determined classes of
assets and liabilities on the basis of the nature, characteristics and risks
of the asset or liability and the level of the fair value hierarchy as
explained above.
More information is disclosed in Note 20.
1.4.11 Investments in the Company Accounts
Investments in subsidiary companies are classified as non-current assets and
included in the Statement of Financial Position of the Company at cost at the
date of acquisition less any identified impairments.
For acquisitions of subsidiaries or associates achieved in stages, the Company
re-measures its previously held equity interests in the acquiree at its
acquisition-date fair value and recognises the resulting gain or loss, if any,
in profit or loss. Any gains or losses, previously recognised in other
comprehensive income, are transferred to profit and loss.
Investments in associates and joint ventures are classified as non-current
assets and included in the Statement of Financial Position of the Company at
cost at the date of acquisition less any identified impairment.
1.4.12 Share Capital
Financial instruments, issued by the Group, are classified as equity only to
the extent that they do not meet the definition of a financial liability or
financial asset. The Group's ordinary shares are classified as equity
instruments.
1.4.13 Convertible Debt
The proceeds, received on issue of the Group's convertible debt, are allocated
into their liability and equity components. The amount, initially attributed
to the debt component, equals the discounted cash flows, using a market rate
of interest that would be payable on a similar debt instrument that does not
include an option to convert. Subsequently, the debt component is accounted
for as a financial liability, measured at amortised cost until extinguished on
conversion or maturity of the bond. The remainder of the proceeds is allocated
to the conversion option and is recognised in the "Convertible debt option
reserve" within shareholders' equity, net of income tax effects.
1.4.14 Warrants
Derivative contracts, that only result in the delivery of a fixed amount of
cash or other financial assets for a fixed number of an entity's own equity
instruments, are classified as equity instruments. Warrants, relating to
equity finance and issued together with ordinary shares placement, are valued
by residual method and treated as directly attributable transaction costs and
recorded as a reduction of share premium account, based on the fair value of
the warrants. Warrants, classified as equity instruments, are not subsequently
re-measured (i.e., subsequent changes in fair value are not recognised). On
expiry or lapse of such instruments, the fair value of the instruments in
question is retained in the warrant reserve and is not transferred to retained
earnings.
1.4.15 Segment Reporting
Operating segments are reported in a manner consistent with the internal
reporting, provided to the chief operating decision-maker as required by IFRS
8 "Operating Segments". The chief operating decision-maker, responsible for
allocating resources and assessing performance of the operating segments, has
been identified as the Board of Directors. The accounting policies of the
reportable segments are consistent with the accounting policies of the Group
as a whole. Segment profit/(loss) represents the profit/(loss) earned by each
segment without allocation of foreign exchange gains or losses, investment
income, interest payable and tax. This is the measure of profit that is
reported to the Board of Directors for the purpose of resource allocation and
the assessment of segment performance. When assessing segment performance and
considering the allocation of resources, the Board of Directors review
information about segment non-current assets. For this purpose, all
non-current assets are allocated to reportable segments.
1.4.16 Leases
All leases are accounted for by recognising a right-of-use asset and a lease
liability except for:
· Leases of low value assets; and
· Leases with a duration of 12 months or less.
IFRS 16 was adopted 1 June 2019 without restatement of comparative figures.
On initial recognition, the carrying value of the lease liability also
includes:
· amounts expected to be payable under any residual value
guarantee;
· the exercise price of any purchase option granted in favour of
the Group if it is reasonably certain to assess that option;
· any penalties payable for terminating the lease if the term of
the lease has been estimated on the basis of termination option being
exercised.
Lease liabilities are subsequently measured at the present value of the
contractual payments due to the lessor over the lease term.
Right of use assets are initially measured at the amount of the lease
liability, reduced for any lease incentives received and increased for:
· lease payments made at or before commencement of the lease;
· initial direct costs incurred; and
· the amount of any provision recognised, where the Group is
contractually required to dismantle, remove or restore the leased asset.
1.4.17 Asset Acquisitions
Acquisitions of mineral exploration licences through the acquisition of
non-operational corporate structures that do not represent a business, and
therefore do not meet the definition of a business combination, are accounted
for as the acquisition of an asset.
The consideration for the asset is allocated to the assets based on their
relative fair values at the date of acquisition.
Inter-company transactions, balances and unrealised gains on transactions
between group companies are eliminated. Unrealised losses are also eliminated.
1.5 Significant Accounting Judgements, Estimates and Assumptions
The preparation of the Group's Consolidated Financial Statements, requires
management to make judgements, estimates and assumptions that affect the
reported amounts of revenues, expenses, assets and liabilities at the end of
the reporting period. However, uncertainty about these assumptions and
estimates could result in outcomes that require a material adjustment to the
carrying amount of the asset or liability affected in future periods.
Significant Judgements and Accounting Estimates
In the process of applying the Group's accounting policies, management has
made the following judgements and estimates, which have the most significant
effect on the amounts recognised in the Consolidated Financial Statements:
Impairment of Investments in Associates and Joint Ventures
The carrying amount of investments in joint ventures is tested for impairment
annually and this process is considered to be key judgement along with
determining whenever events or changes in circumstances indicate that the
carrying amounts for those assets may not be recoverable.
The continued progress at the Mambare nickel/cobalt project during the year,
when considered alongside the continued strength in nickel prices, have
encouraged the Board to continue to hold the value of its stake in the Mambare
joint venture at the previous valuation of £1.65 million alongside a £1.5
million receivable. The Company believes that the carrying values reflect
the sizeable JORC resource and work done to date as well as the potential to
progress the project to a mining license and Direct Shipping Ore "DSO"
production in 2023 and beyond. The Company has assessed the viability of the
project, given current and expected nickel prices and the anticipated cost of
a DSO operation, and believes the project can be successfully taken into
production in the mid-term with a mining lease application already at a very
advanced stage with the PNG mining authorities. The Board further believes
that the likelihood of recovery of the receivable has remained firm over the
past 12-24 months due to the progress made on the JV, and that full repayment
of this figure is likely through either a disposal and trade sale prior to
production or through dividends once the project begins shipping ore if not
beforehand.
The Company, following a desktop study that broadened the scope of the project
to include nickel as well as vanadium, believes that continuing to hold the
Dempster asset at cost is a prudent decision pending further developments at
the project in Canada.
On 18 October 2021, the Company completed the acquisition of Australian
registered Niugini Nickel Pty Ltd ("Niugini Nickel"), which owns 100% of the
Wowo Gap nickel-cobalt project in Papua New Guinea. Consideration for the
acquisition was the release of all liabilities and obligations in connection
with its AUD 4.7m senior debt position held in the vendor, Resource Mining
Corporation Limited ("RMI"), which the Company had acquired for £987,000.
Additional legal costs associated with the acquisition of Niugini Nickel bring
the total cost of acquisition to £1.014m, which forms the fair value of
acquisition as detailed in note 22.
During the prior year, The Company acquired a 40% interest in ARL 021, which
gave it partial ownership of the Tring Road gas peaker plant. During the
year, the Company has carried out funding and sale efforts, which have
resulted in the Company impairing this investment by 100% of its carrying
value. The Company has further decided to write-off its existing investment
in Weirs Drove Development, owner of the Burwell Energy Storage project, as
the project is currently working through potential delays relating to grid
congestion and potential network upgrades in the area. While the Burwell
project may successfully progress to financial close, there remains
uncertainty around the timeframe in which this is likely to
occur.
The Company has also made judgements in respect of the success of licence
renewals on the core battery metal projects.
Impairment of Investments in and loans to Subsidiaries
The carrying amount of investments in and loans made to subsidiaries is tested
for impairment annually and this process is considered to be key judgement
along with determining whenever events or changes in circumstances indicate
that the carrying amounts for those assets may not be recoverable.
During the year, loans to Wiers Drove Developments totalling £28,471 and to
Flexible Grid Solutions totalling £71,526 have been impaired pending progress
on the Burwell battery storage project and determination of the recoverability
of these loan balances. Amounts receivable from Flexible Grid Solutions
totalling £50,000 remains unimpaired as this amount is backed by funds
deposited against the future grid connection for the Burwell battery storage
project which are refundable in the event that the project is cancelled.
Share-Based Payment Transactions
The Group measures the cost of equity-settled transactions with employees and
the issuance of warrants to investors by reference to the fair value of the
equity instruments at the date at which they are granted. The fair value of
share options and warrants is determined using the Black-Scholes model and the
estimates used within this model are disclosed in Note 18.
Valuation of a receivable from Oro Nickel JV
The Directors believe that the receivable from the Oro Nickel Joint Venture
will be fully recoverable in light of the project's ongoing progress towards a
mining lease, supporting a shipping ore operation at the site. Progress has
been made on the mining lease application during the course of the year end.
While the existing exploration licenses remain under renewal at the year, the
Company and the joint venture partners believe there remains a high likelihood
of renewal, given ongoing dialogue with the PNG authorities, and would expect
to have these renewed independently of any outcome of the mining lease
application.
2. Segmental Analysis
Once the Group's main focus of operations becomes production of battery metal
mineral resources or flexible production and storage of energy, the nature of
management information, examined by the Board, will alter to reflect the need
to monitor revenues, margins, overheads and trade balances as well as cash.
IFRS 8 requires the reporting of information about the revenues derived from
the various areas of activity and the countries in which revenue is earned
regardless of whether this information is used in by management in making
operating decisions. Management determined that the most useful presentation
of revenues and expenses came from an analysis by operational type as opposed
to geographic representation due to the similar nature of the revenues and
expenses when grouped in these categories.
Year to 30 June 2022 Battery Metals Flexible Grid Solutions Corporate Total
£'000 (UK) and £'000
£'000 unallocated
£'000
Revenue - - - -
Management services - - 23 23
Project expenses (82) (9) - (91)
Exploration expenses - - - -
Administrative expenses (92) (66) (1,060) (1,218)
Currency (loss)/gain 1 - - 1
Share of profits in joint ventures (3) - - (3)
Impairment of receivables - - (61) (61)
Impairment of property, plant and equipment - - (67) (67)
Impairment of Joint venture projects - (488) - (488)
Finance cost - net - - (224) (224)
Net loss before tax from continuing operations (176) (563) (1,389) (2,128)
Year to 30 June 2021 Battery Metals Flexible Grid Solutions Corporate Total
£'000 (UK) and £'000
£'000 unallocated
£'000
Revenue - - - -
Project expenses - (121) - (121)
Administrative expenses - - (1,014) (1,014)
Impairment of goodwill - (25) - (25)
Share of profits in joint ventures (6) - - (6)
Loss on sale of financial instruments FVTPL - - (5) (5)
Other income - - 9 9
Finance cost - net - - (65) (65)
Net loss before tax from continuing operations (6) (146) (1,075) (1,227)
Information by Geographical Area
Presented below is certain information by the geographical area of the Group's
activities. Investment sales revenue and exploration property sales revenue
are allocated to the location of the asset sold.
Year to 30 June 2022 UK Australia Papua Canada Total
£'000 £'000 New Guinea USA £'000 £'000
£'000 £'000
Revenue 23 - - - - 23
Total segment revenue and other gains 23 - - - - 23
Non-current assets
Investments in associates and joint ventures - - 1,650 - 338 1,988
Goodwill - - - - - -
Property, plant and equipment 1 - 51 - - 52
Exploration & evaluation assets - - 1,026 - - 1,026
Receivable from a joint venture - - 1,502 - - 1,502
Purchased debt - - - - - -
FVTOCI financial instruments 1 - - - - 1
Total segment non-current assets 2 - 4,229 - 338 4,569
Year to 30 June 2021 UK Australia Papua Canada Total
£'000 £'000 New Guinea USA £'000 £'000
£'000 £'000
Revenue - - - - - -
Total segment revenue and other gains - - - - - -
Non-current assets
Investments in associates and joint ventures 472 - 1,654 - 326 2,452
Goodwill - - - - - -
Property, plant and equipment 62 - - - - 62
Receivable from a joint venture 12 - 1,349 - - 1,351
Purchased debt - - 987 - - 987
FVTOCI financial instruments - - - - 7 7
Total segment non-current assets 546 - 3,990 - 333 4,869
3. Loss on Ordinary Activities Before Taxation
Group 2022 2021
£'000 £'000
Loss on ordinary activities before taxation is stated after charging:
Auditor's remuneration:
- fees payable to the Company's auditor for the audit of consolidated and 33 30
Company Financial Statements
Directors' emoluments (Note 8) 496 449
4. Administrative Expenses
Group Group Company Company
2022 2021 2022 2021
£'000 £'000 £'000 £'000
Staff costs
Payroll 514 453 514 465
Pension 20 31 20 19
Share-based payments 39 - 39 -
Consultants - - - -
Staff Welfare 8 2 8 1
Employers NI 53 50 53 50
Professional services
Accounting 94 67 70 65
Legal 46 33 4 33
Business development 3 25 3 2
Marketing & Investor relations 25 108 25 100
Funding costs 21 - 21 -
Other 111 - 25 -
Regulatory compliance 116 127 115 127
Travel 14 7 13 4
Office and Admin
General 35 21 32 22
IT costs 12 46 12 45
Rent 14 16 14 16
Insurance 93 28 91 28
Total administrative expenses 1,218 1,014 1,059 978
5. Finance Costs, Net
Group 2022 2021
£'000 £'000
Interest expense (154) (65)
Share based payments - investors (70) -
(224) (65)
6. Taxation
2022 2021
£'000 £'000
Current period transaction of the Group
UK corporation tax at 19.00% (2021: 19.00%) on profits for the period - -
Deferred tax
Origination and reversal of temporary differences - -
Deferred tax assets derecognised - -
Tax (credit) - -
Factors affecting the tax charge for the year
Loss on ordinary activities before taxation (2,128) (1,227)
Loss on ordinary activities at the average UK standard rate of 19% (2021: (404) (233)
19.00%)
Effect of non-deductible expense 22 37
Effect of tax benefit of losses carried forward 382 196
Tax losses brought forward - -
Current tax (credit) - -
Deferred tax amounting to £nil (2021: £nil), relating to the Group's
investments was recognised in the Statement of Comprehensive Income. No
deferred tax charge has been recognised due to uncertainty as to the timing of
future profitability of the Group. Unutilised trading losses are estimated at
circa £3,663 thousand (2021: £3,281) and capital losses estimated circa
£nil (2021: £nil).
7. Staff Costs
The aggregate employment costs of staff for the Group (including Directors)
for the year was:
2022 2021
£'000 £'000
Wages and salaries 514 453
Pension 20 31
Social security costs, net of allowances 53 50
Medical costs 8 2
Employee share-based payment charge 39 -
Total staff costs 634 536
The average number of Group employees (including Directors) during the year
was:
2022 2021
Number Number
Directors 4 4
Administration 1 1
5 5
During the year, for all Directors and employees, who have been employed for
more than three months, the Company contributed to a defined contributions
pension scheme as described under Directors' remuneration in the Directors'
Report and a Share Incentive Plan ("SIP") as described under Management
incentives in the Directors' Report.
All emoluments presented for current and comparative years, except for
pension, are short-term in nature.
8. Directors' Emoluments
2022 Directors' Consultancy Share Incentive Plan Short term benefits Total
fees fees £'000 Pension £'000 £'000
£'000 £'000 Bonus contributions
£'000 £'000
Executive Directors
J Parsons* 152 - 30 - 10 - 192
S Kaintz 175 - 35 7 16 3 236
Non-executive Directors
E Ainsworth 40 - - - - - 40
H Bellingham 28 - - - - - 28
395 - 65 7 26 3 496
2021 Directors' Consultancy Share Incentive Plan Short term benefits Total
fees fees £'000 Pension £'000 £'000
£'000 £'000 Bonus contributions
£'000 £'000
Executive Directors
J Parsons* 146 - 14 - 12 - 172
S Kaintz 175 - 15 7 15 2 214
Non-executive Directors
N Burton 23 - - - - - 23
E Ainsworth 30 10 - - - - 40
374 10 29 7 27 2 449
* Includes 8% pension contribution paid in cash as a part of gross salary.
The number of Directors, who exercised share options in year, was nil (2021:
nil).
During the year, the Company contributed to a Share Incentive Plan, more fully
described in the Directors' Report where shares were issued to each employee,
including Directors, making a total of 896,549 (2021: 1,116,994) partnership
and matching shares. Those shares were issued in relation to services provided
by those employees during the reporting year.
The Company also operates a contributory pension scheme, more fully described
in the Directors' Report in the section Directors' Remuneration.
During the year, the following options were granted to the Directors of the
Company with a total FV charge to the profit for the year of £15,829. No
options were granted in the prior year.
2022 Number of Options Grant date Expiry date
Exercise price (pence)
Executive Directors
J Parsons 6,547,197 1.7p 28 February 2022 27 February 2027
S Kaintz 6,547,197 1.7p 28 February 2022 27 February 2027
Non-executive Directors
E Ainsworth 2,805,942 1.7p 28 February 2022 27 February 2027
H Bellingham 2,805,942 1.7p 28 February 2022 27 February 2027
9. Earnings per Share
The basic earnings/(loss) per share is derived by dividing the loss for the
year attributable to ordinary shareholders of the Parent by the weighted
average number of shares in issue. Diluted earnings/(loss) per share is
derived by dividing the loss for the year attributable to ordinary
shareholders of the Parent by the weighted average number of shares in issue
plus the weighted average number of ordinary shares that would be issued on
conversion of all dilutive potential ordinary shares into ordinary shares.
2022 2021
Loss attributable to equity holders of the Parent Company, £'000 (2,128) (1,227)
Weighted average number of ordinary shares of £0.0001 in issue, used for 401,737,832 279,406,266
basic EPS,
Earnings per share - basic, pence (0.5) (0.4)
Earnings per share - fully diluted, pence (0.5) (0.4)
At 30 June 2022 and at 30 June 2021, the effect of all the instruments in
issue is anti-dilutive as it would lead to a further reduction of loss per
share, therefore, they were not included into the diluted loss per share
calculation.
Options and warrants with conditions not met at the end of the period, that
could potentially dilute basic EPS in the future, but were not included in the
calculation of diluted EPS for the periods presented:
2022 2021
(a) Share options granted to employees - total, of them 26,783,412 6,212,534
- Vested at the end of reporting period 96,000 122,900
- Not vested at the end of the reporting period 26,687,412 6,089,634
(b) Number of warrants in issue 171,999,329 170,399,328
Total number of contingently issuable shares that could potentially dilute 198,782,741 182,824,396
basic earnings per share in future and anti-dilutive potential ordinary shares
that were not included into the fully diluted EPS calculation
There were no ordinary share transactions after 30 June 2022, that that could
have changed the EPS calculations significantly if those transactions had
occurred before the end of the reporting period.
10. Investments in Subsidiaries and Goodwill
Company Investments in subsidiaries Investments in subsidiaries Goodwill Goodwill
2022 2021 2022 2021
£ £ £'000 £'000
Cost
At 1 July 2020 and 1 July 2021 - - 131 131
Additions (Note 22) 1,014 - - -
At 30 June 2022 and 30 June 2021 1,014 - 131 131
Impairment
At 1 30 June 2022 and 30 June 2021 - - (131) (131)
Net book amount at 30 June 2022 1,014 - - -
Net book amount at 30 June 2021 - - - -
The Parent Company of the Group holds more than 50% of the share capital of
the following companies, the results of which are consolidated:
Company Name Country of Class Proportion Nature of
registration held by business
Group
Corcel Australasia Pty Limited Australia Ordinary 100% Mineral exploration
Niugini Nickel Pty Ltd Australia Ordinary 100% Mineral exploration
Flexible Grid Solutions Limited (former ESTEQ Limited) UK Ordinary 100% Holding company
Flexible Grid One Limited (former Allied Energy Services Ltd (indirectly owned UK Ordinary 100% Energy storage and trading and grid backup
through ESTEQ Limited))
Weirs Drove Development Limited UK Ordinary 100% Energy storage
Corcel Australasia Pty Limited and Niugini Nickel Pty Ltd registered office is
c/o Paragon Consultants PTY Ltd, PO Box 903, Claremont WA, 6910, Australia.
Flexible Grid Solutions Limited registered office is Salisbury House, London
Wall, London EC2M 5PS, United Kingdom.
Flexible Grid One Limited registered office is Salisbury House, London Wall,
London EC2M 5PS, United Kingdom.
Weirs Drove Development Limited registered office is 20-22 Wenlock Road,
London N1 7GU, United Kingdom.
Flexible Grid One Limited (FGO) (former Allied Energy Services Ltd (indirectly
owned through Flexible Grid Solutions Limited))
On 10 November 2017, Corcel formed a 100% owned subsidiary, Flexible Grid
Solutions Limited, to act as the vehicle for development of opportunities in
the battery and energy storage technology sector across the UK. On 15 March
2018, Flexible Grid Solutions Limited committed to investing up to £250,000
into Flexible Grid One Limited, representing an 80% interest in that entity.
Non-controlling shareholders brought with them a development pipeline,
including land rights and connections for combined battery and gas and
anaerobic digestion generation plants to be constructed and operated across
the UK. On 3 January 2020, the Company announced the completion of a buy-out
of the 20% minority shareholders in Flexible Grid One Limited through the
issuance of 2,461,538 new ordinary shares in the Company. The investment in
Flexible Grid One Limited was subsequently written off in the year ended 30
June 2020.
Weirs Drove Development Limited (indirectly owned through Flexible Grid
Solutions Limited)
On 19 June 2020, the Company announced an investment acquiring a 50% stake in
Weirs Drove Development Limited, a developer of UK based energy storage and
flexible production projects. The cost of the transaction was an initial
investment and directly attributable acquisitions costs, totalling £37,750,
with the agreement to extend a further £100,000, following the project
meeting all shovel ready criteria. At year end, these conditions had not been
met and so the Company has impaired the value of the project to £nil, pending
further developments. Goodwill in the amount of £25,250 was recognised in
relation to this acquisition and subsequently impaired to £nil as at 30 June
2022.
On 1 December 2020, the Company announced the acquisition of the remaining 50%
interest in Weirs Drove Development Limited, thereby becoming the 100% owner
of the Burwell project for consideration of £90,000. This total potential
consideration was broken down into £15,000 payable in cash and £75,000
payable in new Corcel ordinary shares due at financial close of the initial
50MW of capacity of the Burwell project.
11. Investments in Associates and Joint Ventures
Group Company
Carrying balance £'000 £'000
At 1 July 2020 1,947 2,067
Additions 439 439
Share of loss in joint venture (6) (6)
Impairment of investment in associate - -
At 30 June 2021 2,380 2,500
Additions 11 12
Share of loss in joint venture (3) -
Impairment of investment in associate (400) (400)
Net book amount at 30 June 2022 1,988 2,112
At 30 June 2022, the Parent Company of the Group had a significant influence
by virtue other than a shareholding of over 20% or had joint control through a
joint venture contractual arrangement in the following companies:
Company Name Country of Class Proportion Proportion Accounting
registration held by held by year end
Group at 30 June 2022 Group at 30 June 2021 Status at
30 June 2021
Direct
Oro Nickel Ltd (Held indirectly through Papua New Guinea Ordinary 41% 41% 30 June 2022
Oro Nickel Vanuatu) (Joint Venture)
Active
DVY196 Holdings Corp (Joint Venture) UK Ordinary 50% 50% Active 30 Sept 2022
ARL 021 Limited (Associate) UK Ordinary 40% 40% Active 31 July 2022
Oro Nickel Ltd registered office is c/o Sinton Spence Chartered Accountants,
2(nd) Floor, Brian Bell Plaza, Turumu Street, Boroko, National Capital
District, Papua New Guinea.
DVY196 Holdings Corp registered office is 3081 3(rd) Avenue, Whitehorse,
Yukon, Canada Y1A 4Z7.
ARL 021 Limited registered office is 70 Jermyn Street, London, UK SW1Y 6NY
Summarised financial information for the Company's associates and joint
ventures, where available, is given below for the year as at 30 June 2022:
Company Revenue Loss Assets Liabilities Net Assets
£'000 £'000 £'000 £'000 £'000
Oro Nickel Ltd - (8) 4,467 (3,797) 670
DVY196 Holdings Corp 5 6 5 8 (3)
ARL 021 Limited - - 400 - 400
Oro Nickel DVY196 ARL 021 Total Group
Carrying balance £'000 £'000 £'000 £'000
At 1 July 2021 1,654 326 400 2,380
Additions - 11 - 11
Share of loss in joint venture (3) - - (3)
Impairment - - (400) (400)
Net book amount at 30 June 2022 1,651 337 - 1,988
12. Financial Instruments with Fair Value through Other Comprehensive Income
(FVTOCI)
30 June 2022 30 June 2021 30 June 2022 30 June 2021
Group Group Company Company
£'000 £'000 £'000 £'000
FVTOCI financial instruments at the beginning of the period 7 4 7 4
Transferred from Available-for-sale category - - - -
Additions - - - -
Disposals - - - -
Revaluations and impairment (6) 3 (6) 3
FVTOCI financial assets at the end of the period 1 7 1 7
Market Value of Investments
The market value as at 30 June 2022 of the investments', available for sale
listed and unlisted investments, was as follows:
30 June 2022 30 June 2021 30 June 2022 30 June 2021
Group Group Company Company
£'000 £'000 £'000 £'000
Quoted on other foreign stock exchanges 1 7 1 7
At 30 June 1 7 1 7
13. Financial instruments with Fair Value through Profit and Loss (FVTPL)
30 June 2022 30 June 2021 30 June 2022 30 June 2021
Group Group Company Company
£ £ £ £
FVTPL financial instruments at the beginning of the period 72 5 72 -
Additions - 72 - 72
Disposals - (5) - -
Revaluations (72) - (72) -
FVTPL financial assets at the end of the period (audited) - 72 - 72
14. Trade and Other Receivables
Group Company
2022 2021 2022 2021
£ £ £ £
Non-current
Amounts owed by Group undertakings - - 278 17
Purchased debt - - - -
Amounts owed by related parties
- due from associates and joint ventures 1,502 1,362 1,502 1,362
Total non-current 1,502 1,362 1,780 1,379
Current
Sundry debtors 130 142 116 76
Prepayments 147 86 141 86
Purchased debt - 987 - 987
Amounts owed by related parties
- due from key management - - - -
Total current 277 1,215 257 1,149
Sundry debtors include a balance of:
· £12,630 (2021: £nil) owing to Red Rock Resources Plc, a related
party entity as a result of having a common Director;
· £48,493 (2021: £33,733) owing to Curzon Energy Plc, a related
party entity as a result of having a common Director.
Debt Purchased from Resource Mining Corporation Limited
On 7 April 2020, the Company completed the acquisition of a AUD 1.7m
(£907,000) debt position in ASX listed Resource Mining Corporation Limited
for consideration of £178,096 and 13,288,982 new ordinary shares of Corcel.
The Company's share price on the date of transaction was £0.011. For this
consideration, the Company also acquired a six-month option to buy the balance
of Resource Mining Corporation Limited debt for the same proportional term,
AUD 640,000 in cash and 23,711,018 new ordinary shares in Corcel. The option
was exercised, for more details please see Note 25.
On 28 October 2020, the Company has also exercised the 6-month option to
purchase the remaining RMI debt of AUD 3.05 million for consideration of
23,711,018 new ordinary shares and AUD 640,000 in cash (£355,259), which
represents a similar discount to the initial acquisition. All the loan notes
are interest free and unsecured.
Directly attributable transactions costs were also included in the carrying
value of the debt, bringing the total of the debt value to £987,121 on 30
June 2021.
On 18 October 2021, the entirety of the above debt was forgiven in
consideration for the acquisition of the entire share capital of Niugini
Nickel Pty, Ltd from Resource Mining Corporation Limited ("Niugini Nickel").
The Prior year carrying value of the debt of £987,121, along with certain
cash transaction costs totalling £26,180, have formed the base cost of the
acquisition of Niugini Nickel. See note 22 for further details.
15. Trade and Other Payables
Group Company
2022 2021 2022 2021
£ £ £ £
Trade and other payables 191 202 209 176
Amounts due to related parties: 10 - 10 -
- due to Red Rock Resources plc
Accruals 123 35 104 35
Trade and other payables 325 237 322 211
Borrowings (note 21) 1,423 883 1,423 883
Total 1,747 1,120 1,745 1,094
Trade and other payables, include a balance of £10,202 (2021: £nil), owing
to Red Rock Resources Plc, a related party entity as a result of having common
Directors.
Short Term Borrowings Maturity
2022 2021
£'000 £'000
31 October 2022 778 -
23 June 2023 645 -
Due by 30 December 2021 - 818
Due by 28 April 2022 - 65
Total long-term borrowings 1,423 883
C4 Energy Notes - YA PN II - Riverfort
During the year, £100,000 of principal was repaid by the Company in cash and
£128,586 of the principal was converted into ordinary shares of the Company.
On 31 October 2022, after the year end, the Company announced that it had made
a £150,000 repayment to the lenders of corporate debt originally due 31
October 2022, with the balance of £627,600 now due 31 March 2023.
More details on all the borrowing are given in Note 23.
16. Reserves
Share Premium
The share premium account represents the excess of consideration received for
shares issued above their nominal value net of transaction costs.
Shares to be Issued
The shares to be issued account represents the share capital that has been
committed to be issued in settlement of the consideration for the acquisition
of the remaining 50% interest in Wiers Drove Developments limited in December
2020. See note 17 below for more details.
Foreign Currency Translation Reserve
The translation reserve represents the exchange gains and losses that have
arisen on the retranslation of overseas operations.
Retained Earnings
Retained earnings represent the cumulative profit and loss net of
distributions to owners.
FVTOCI Revaluation Reserve
The fair value through other comprehensive income (FVTOCI) reserve represents
the cumulative revaluation gains and losses in respect of FVTOCI investments.
Share-Based Payment Reserve
The share-based payment reserve represents the cumulative charge for options
granted, still outstanding and not exercised.
Warrant Reserve
The warrant reserve represents the cumulative charge for warrants granted,
still outstanding and not exercised.
17. Share Capital, Share Premium and Shares to be Issued of the Company
The share capital of the Company is as follows:
Authorised, issued and fully paid 2022 2021
£'000 £'000
440,878,295 ordinary shares of £0.0001 each (2021: 384,787,602) 44 38
1,788,918,926 deferred shares of £0.0009 each 1,610 1,610
2,497,434,980 A deferred shares of £0.000095 each 237 237
8,687,335,200 B Deferred shares of £0.000099 each 860 860
As at 30 June 2,751 2,745
Movement in ordinary shares Number
Nominal, £ Share Premium
As at 30 June 2020 - ordinary shares of £0.0001 each 189,910,596 18,991 23,031,649
Issued on 26 Oct 2020 at £0.0100 per share (cash) 75,000,000 7,500 742,500
Share issuance costs in relation to shares issued on 26 Oct 2020 - - (45,000)
Issued on 26 Oct 2020 at £0.0100 per share (non cash creditor settlement) 3,000,000 300 29,700
Issued on 26 Oct 2020 37,500,000 investor warrants issued at time of fundraise - - (210,000)
Issued on 28 Oct 2020 at £0.0098 per share (RMI debt acquisition) 23,711,018 2,371 229,997
Issued on 17 Feb 2021 at £0.0125 per share (non-cash, creditor settlement 2,880,000 288 35,712
- Issued on 17 Feb 2021 51,200,000 investor warrants issued at time of - - (276,480)
fundraise
- Issued on 17 Feb 2021 23,000,000 investor warrants issued at time of - - (230,769)
fundraise
Share issuance costs in relation to shares issued on 17 Feb 2021 - - (9,000)
Issued on 18 Feb 2021 at £0.0125 per share (cash) 24,000,000 2,400 297,600
Issued on 18 Feb 2021 at £0.0125 per share (non cash creditor settlement) 2,880,000 288 19,713
Issued on 15 Apr 2021 at £0.0160 per share (cash, warrants exercised) 8,500,000 850 135,150
Issued on 20 Apr 2021 at £0.0160 per share (cash, warrants exercised) 500,000 50 7,950
Issued on 20 Apr 2021 at £0.0160 per share (cash, warrants exercised) 12,639,750 1,264 200,972
Issued on 22 Apr 2021 at £0.0160 per share (cash, warrants exercised) 2,500,000 250 39,750
Issued on 10 May 2021 at £0.0200 per share (non-cash, Tring Road interest) 12,026,168 1,203 248,797
Issued on 12 May 2021 25,000,000 investor warrants issued at time of fundraise - - (150,000)
Issued on 12 May 2021 20,000,000 investor warrants issued at time of fundraise - - (240,000)
Issued on 12 May 2021 at £0.0130 per share (non-cash creditor settlement) 23,076,924 2,308 277,692
Issued on 12 May 2021 at £0.0001 per share (non- cash creditor settlement) 1,846,152 185 1,656
Issued on 12 May 2021 at £0.0200 per share (non- cash interest settlement) 1,200,000 120 23,880
Issued on 12 May 2021 at £0.0001 per share (non- cash SIP) 1,116,994 112 -
As at 30 June 2021 - ordinary shares of £0.0100 each 384,787,602 38,480 24,161,469
Issued on 21 February 2022 at £0.015 per share (non cash creditor settlement) 7,200,000 720 107,280
Issued on 28 February 2022 at £0.015 per share (non cash conversion of debt) 8,572,400 857 127,729
Issued on 16 March 2022 at £0.015 per share (cash placing) 25,793,332 2,579 384,321
Share issue costs in relation to shares issued on 16 March 2022 - - (48,250)
Issued on 16 March 2022 at £0.015 per share (non cash conversion of debt) 11,333,333 1,133 168,867
Issued on 4 April 2022 at £0.01525 per share (cash placing) 2,295,080 230 34,770
Issued on 5 April 2022 at £0.0145 per share (non- cash SIP) 496,550 50 14,288
Issued on 5 April 2022 at £0.0135 per share (non- cash SIP) 399,999 40 10,710
As at 30 June 2022 - ordinary shares of £0.0100 each 440,878,296 44,089 24,961,184
The Company's share capital consists of three classes of shares, being:
· Ordinary shares with a nominal value of £0.0001, which are the
company's listed securities;
· Deferred shares with a nominal value of £0.0009;
· A Deferred shares with a nominal value of £0.000095;
· B Deferred share with a nominal value of £0.000099
Subject to the provisions of the Companies Act 2006, the deferred shares may
be cancelled by the Company, or bought back for £1 and then cancelled. These
deferred shares are not quoted and carry no rights whatsoever.
Shares to be Issued
On 1 December, 2020 the Company acquired the remaining 50% interests in WDD
for potential consideration of £90,000, payable in £15,000 in cash and
£75,000 in new ordinary shares. The £75,000 consideration, payable in
shares, is dependant on the financial close of the initial 50MW of capacity of
the Burwell Project. Financial close is defined as having a fully funded SPV
to take the project forward to operational capacity or any potential disposal
or sale. As at 30 June 2022, these consideration had not been met and as such
£75,000 remains in shares to be issued.
Warrants
At 30 June 2022, the Company had 171,999,329 warrants in issue (2021:
170,399,328) with exercise prices ranging £0.01245-£0.60 (2021:
£0.01245-£0.60). Out of those, nil (2021: 3,999,999) have market performance
conditions that accelerate the expiry date. The weighted average remaining
life of the warrants at 30 June 2022 was 406 days (2021: 695 days).
Details related to valuation of all warrants are disclosed below.
Group and Company 2022 2021
number of warrants number of
warrants
Outstanding at the beginning of the period 170,399,328 60,839,078
Granted during the period 33,800,000 156,776,923
Exercised during the period - (47,216,673)
Lapsed during the period (32,199,999) -
Outstanding at the end of the period 171,999,329 170,399,328
At 30 June 2022, the Company had the following warrants to subscribe for
shares in issue:
Grant date Expiry date Warrant exercise price Number of post consolidation warrants
14 Jan 2019 12 Dec 2022 £0.60 915,873
17 July 2019 1 July 2024 £0.25 200,000
31 Jan 2020 30 Jan 2023 £0.0285 438,596
7 Apr 2020 6 Apr 2023 £0.01245 4,909,610
7 Apr 2020 6 Apr 2023 £0.016 29,375,000
19 Jun 2020 18 Jun 2023 £0.016 21,000,000
23 Oct 2020 22 Oct 2023 £0.016 13,630,250
17 Feb 2021 16 Feb 2023 £0.020 48,000,000
12 May 2021 12 May 2024 £0.015 20,000,000
14 December 2021 13 December 2024 £0.015 3,800,000
21 February 2022 20 February 2024 £0.015 30,000,000
Total warrants in issue at 30 June 2022 171,999,329
The aggregate fair value recognised in warrants reserve in relation to the
share warrants granted during the reporting period was £70,400 (2021:
£1,107,249).
The following information is relevant in the determination of the fair value
of warrants granted during the reporting period. Black-Scholes valuation model
was applied for all the warrants below:
Grant date Expiry date Number of warrants Warrant life, years Warrant exercise price, £ Share price at the grant date, £ UK risk-free rate at the date of grant, % Volatility, % FV of 1 warrant, £ FV of all warrants, £
13 Dec 2021 12 Dec 2024 3,800,000 3 0.015 0.0115 0.458 160.99 0.0094 35,600
21 Feb 2022 20 Feb 2024 30,000,000 2 0.015 0.0123 1.29 28.19 0.0012 34,800
Total at 30 June 2022 33,800,000 70,400
Capital Management
Management controls the capital of the Group in order to control risks,
provide the shareholders with adequate returns and ensure that the Group can
fund its operations and continue as a going concern. The Group's debt and
capital, includes ordinary share capital and financial liabilities, supported
by financial assets such as cash, receivables and investments. There are no
externally imposed capital requirements.
Management effectively manages the Group's capital by assessing the Group's
financial risks and adjusting its capital structure in response to changes in
these risks and in the market. These responses include the management of debt
levels, distributions to shareholders and share issues. There have been no
changes in the strategy adopted by management to control the capital of the
Group since the prior year.
18. Share-Based Payments
Employee Share Options
In prior years, the Company established an employee share option plan to
enable the issue of options as part of the remuneration of key management
personnel and Directors to enable them to purchase ordinary shares in the
Company. Under IFRS 2 "Share-based Payments", the Company determines the fair
value of the options issued to Directors and employees as remuneration and
recognises the amount as an expense in the Income Statement with a
corresponding increase in equity.
At 30 June 2022, the Company had outstanding options to subscribe for
post-consolidation Ordinary shares as follows:
Options issued 9 September 2016 exercisable at £0.8 per share, expiring on 9 Options issued 5 December 2019, exercisable at £0.0275 per share, expiring on Options issued 31 January 2020 exercisable at £0.0285 per share, expiring on Options issued 28 February 2022 exercisable at £0.017 per share, expiring on Total
September 2022, 5 December 2024 31 January 2025 27 February 2027
Number
Number
S Kaintz 96,000 - 3,040,567 6,547,197 9,683,764
J Parsons - 3,040,567 - 6,547,197 9,587,764
E Ainsworth - - - 2,805,942 2,805,942
H Bellingham - - - 2,805,942 2,805,942
Employees - - - 1,900,000 1,900,000
Total 96,000 3,040,567 3,040,567 20,606,278 26,783,412
2022 2021
Company and Group Weighted Weighted
Number of average Number of average
options exercise options exercise
Number price Number price
£ Pence
Outstanding at the beginning of the period 6,212,534 0.42 6,212,534 0.42
Granted during the year 20,606,278 0.017 - -
Lapsed during the period (35,400) 0.45 - -
Outstanding at the end of the period 26,783,412 0.022 6,212,534 0.42
The exercise price of options outstanding at 30 June 2022 and 30 June 2021,
ranged between £0.017 and £0.80. Their weighted average contractual life was
4.161 years (2021: 3.462 years).
Of the total number of options outstanding at 30 June 2022, 96,000 (2021:
122,900) had vested and were exercisable. The weighted average share price (at
the date of exercise) of options, exercised during the year, was nil (2021:
nil) as no options were exercised during the reporting year (2021: nil).
The following information is relevant in the determination of the fair value
of share options granted during the reporting period to the Company Directors.
Black-Scholes valuation model was applied to value the options with the inputs
detailed in the table below:
Grant date Number of options Vesting period, years Life of the option, years Option exercise price, £ Share price at the grant date, £ UK risk-free rate at the date of grant, % Volatility, % FV of 1 option, £ FV of all options, £
28 Feb 2022 20,606,278 3 5 0.017 0.01405 1.03 92.05 0.0076 17,437
Total at 30 June 2022 20,606,278
Share-based remuneration expense, related to the share options granted during
the reporting period, is included in the Administrative expenses line in the
Consolidated Income Statement in the amount of £17,436 (2021: £23,193).
Share Incentive Plan
In January 2012, the Company implemented a tax efficient Share Incentive Plan
(SIP), a government approved scheme, the terms of which provide for an equal
reward to every employee, including Directors, who have served for three
months or more at the time of issue. The terms of the plan provide for:
· each employee to be given the right to subscribe any amount up to
£150 per month with Trustees, who invest the monies in the Company's shares;
· the Company to match the employee's investment by contributing an
amount equal to double the employee's investment ("matching shares"); and
· the Company to award free shares to a maximum of £3,600 per
employee per annum.
The subscriptions remain free of taxation and national insurance if held for
five years.
All such shares are held by SIP Trustees and the shares cannot be released to
participants until five years after the date of the award.
During the financial year, a total of 896,549 free, matching and partnership
shares were awarded (2021: 1,116,994), resulting in a share-based payment
charge of £21,500 (2021: £5,400), included into administrative expenses line
in the Consolidated Income Statement.
19. Cash and Cash Equivalents
Group 30 June 30 June
2022 2021
£'000 £'000
Cash in hand and at bank 25 392
Company 30 June 30 June
2022 2021
£'000 £'000
Cash in hand and at bank 20 387
Credit Risk
The Group's exposure to credit risk, or the risk of counterparties defaulting,
arises mainly from notes and other receivables. The Directors manage the
Group's exposure to credit risk by the application of monitoring procedures on
an ongoing basis. For other financial assets (including cash and bank
balances), the Directors minimise credit risk by dealing exclusively with high
credit rating counterparties.
Credit Risk Concentration Profile
The Group's receivables do not have significant credit risk exposure to any
single counterparty or any group of counterparties, having similar
characteristics. The Directors define major credit risk as exposure to a
concentration exceeding 10% of a total class of such asset.
The Company maintains its cash reserves in Coutts & Co, which maintains an
A-1 credit rating from Standard & Poor's.
20. Financial Instruments
20.1 Categories of Financial Instruments
The Group and the Company holds a number of financial instruments, including
bank deposits, short-term investments, loans and receivables and trade
payables. The carrying amounts for each category of financial instrument are
as follows:
Group 2022 2021
30 June
£'000 £'000
Financial assets
Fair value through other comprehensive income financial assets
Quoted equity shares (Note 12) 1 7
Total financial assets carried at fair value, valued at observable market 1 7
price
Fair value through profit and loss financial assets
Investments in warrant of a listed entity (Note 13) - -
Investments in a project of a private entity - 72
Total financial assets carried at fair value, valued using valuation - 72
techniques
Cash and cash equivalents 25 392
Loans and receivables
Receivable from JVs 1,502 1,362
Purchased debt - current (Note 14) - 987
Other receivables 277 228
Total financial assets held at amortised cost 1,779 2,577
Total financial assets 1,805 3,048
Total current 302 1,686
Total non-current 1,503 1,362
Company 2022 2021
30 June
£'000 £'000
Financial assets
Fair value through other comprehensive income financial assets
Quoted equity shares 1 7
Total FVTOCI financial assets 1 7
Fair value through profit and loss financial assets
Investments in a project of a private entity - 72
Total financial assets carried at fair value, valued using valuation - 72
techniques
Cash and cash equivalents 20 387
Loans and receivables
Receivable from JVs 1,502 1,362
Purchased debt - current (Note 14) - 987
Receivable from subsidiaries 278 17
Other receivables 257 161
Total financial assets held at amortised cost 2,037 2,527
Total financial assets 2,058 2,993
Total current 277 1,631
Total non-current 1,780 1,362
Financial Instruments Carried at Fair Value Using Valuation Techniques Other
than Observable Market Value
Financial instruments, valued using other valuation techniques, can be
reconciled from beginning to ending balances as follows:
2022 2021
Group £'000 £'000
30 June
Financial assets
Purchased debt - 987
FVTPL - 72
Total financial assets valued using valuation techniques - 1,059
Financial liabilities
Loans and borrowings
Trade and other payables 323 232
Borrowings 1,423 818
Total financial liabilities 1,746 1,050
Trade Receivables and Trade Payables
Management assessed that other receivables and trade and other payables
approximate their carrying amounts largely due to the short-term maturities of
these instruments.
Borrowings
The carrying value of interest-bearing loans and borrowings is determined by
calculating present values at the reporting date, using the issuer's borrowing
rate. The loan is due in December 2021 and impact of the discounting is
immaterial and, therefore, not included into the valuation.
20.2 Fair Values
Financial assets and financial liabilities, measured at fair value in the
statement of financial position, are grouped into three levels of a fair value
hierarchy. The three levels are defined, based on the observability of
significant inputs to the measurement, as follows:
· Level 1: Quoted (unadjusted) market prices in active markets for
identical assets or liabilities;
· Level 2: Valuation techniques for which the lowest level input
that is significant to the fair value measurement is directly or indirectly
observable; and
· Level 3: Valuation techniques for which the lowest level input
that is significant to the fair value measurement is unobservable.
The carrying amount of the Group and the Company's financial assets and
liabilities is not materially different to their fair value. The fair value of
financial assets and liabilities is included at the amount at which the
instrument could be exchanged in a current transaction between willing
parties, other than in a forced or liquidation sale. Where a quoted price in
an active market is available, the fair value is based on the quoted price at
the end of the reporting period. In the absence of a quoted price in an active
market, the Group uses valuation techniques that are appropriate in the
circumstances and for which sufficient data are available to measure fair
value, maximising the use of relevant observable inputs and minimising the use
of unobservable inputs.
The following table provides the fair value measurement hierarchy of the
Group's assets and liabilities:
Group and Company Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
30 June 2022
Financial assets at fair value through other comprehensive income 1 - - 1
- Quoted equity shares
Financial assets at fair value through profit and loss - - - -
Group and Company Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
30 June 2021
Financial assets at fair value through other comprehensive income 7 - - 7
- Quoted equity shares
Financial assets at fair value through profit and loss - - 72 72
20.3 Financial Risk Management Policies
The Directors monitor the Group's financial risk management policies and
exposures, and approve financial transactions.
The Directors' overall risk management strategy seeks to assist the
consolidated Group in meeting its financial targets, while minimising
potential adverse effects on financial performance. Its functions include the
review of credit risk policies and future cash flow requirements.
Specific Financial Risk Exposures and Management
The main risks the Group is exposed to through its financial instruments are
credit risk and market risk, consisting of interest rate risk, liquidity risk,
equity price risk and foreign exchange risk.
Credit Risk
Exposure to credit risk, relating to financial assets, arises from the
potential non-performance by counterparties of contract obligations that could
lead to a financial loss to the Group.
Credit risk is managed through the maintenance of procedures (such procedures
include the utilisation of systems for the approval, granting and renewal of
credit limits, regular monitoring of exposures against such limits and
monitoring of the financial liability of significant customers and
counterparties), ensuring, to the extent possible, that customers and
counterparties to transactions are of sound creditworthiness. Such monitoring
is used in assessing receivables for impairment.
Risk is also minimised through investing surplus funds in financial
institutions that maintain a high credit rating or in entities that the
Directors have otherwise cleared as being financially sound.
Trade and other receivables, that are neither past due nor impaired, are
considered to be of high credit quality. Aggregates of such amounts are as
detailed in Note 14.
There are no amounts of collateral held as security in respect of trade and
other receivables.
The consolidated Group does not have any material credit risk exposure to any
single receivable or group of receivables under financial instruments entered
into by the consolidated Group.
Liquidity Risk
Liquidity risk arises from the possibility that the Group might encounter
difficulty in settling its debts or otherwise meeting its obligations related
to financial liabilities. The Group manages this risk through the following
mechanisms:
· monitoring undrawn credit facilities;
· obtaining funding from a variety of sources; and
· maintaining a reputable credit profile.
The Directors are confident that adequate resources exist to finance
operations and that controls over expenditures are carefully managed. All
financial liabilities are due to be settled within the next twelve months.
Market Risk
Interest Rate Risk
The Company is not exposed to any material interest rate risk because interest
rates on loans are fixed in advance.
Equity Price Risk
Price risk relates to the risk that the fair value, or future cash flows of a
financial instrument, will fluctuate because of changes in market prices,
largely due to demand and supply factors for commodities, but also include
political, economic, social, technical, environmental and regulatory factors.
Foreign Exchange Risk
The Group's transactions are carried out in a variety of currencies, including
Australian Dollars, Canadian Dollars, United Stated Dollars, Papua New Guinea
Kina and UK Sterling. To mitigate the Group's exposure to foreign currency
risk, non-Sterling cash flows are monitored. Fluctuation of +/- 10% in
currencies, other than UK Sterling, would not have a significant impact on the
Group's net assets or annual results.
The Group does not enter forward exchange contracts to mitigate the exposure
to foreign currency risk as amounts paid and received in specific currencies
are expected to largely offset one another.
These assets and liabilities are denominated in the following currencies as
shown in the table below:
Group GBP AUD USD CAD Total
30 June 2022
£'000 £'000 £'000 £'000 £'000
Cash and cash equivalents 25 - - - 25
Amortised cost financial assets - Other receivables 258 19 - - 277
FVTOCI financial assets - - - 1 1
FVTPL financial assets - warrants - - - - -
FVTPL financial assets - - - - -
Amortised costs financial assets - Non-current receivables 1,502 - - - 1,502
Trade and other payables, excluding accruals 287 36 - - 323
Short-term borrowings 1,423 - - - 1,423
Group GBP AUD USD CAD Total
30 June 2021
£'000 £'000 £'000 £'000 £'000
Cash and cash equivalents 392 - - - 392
Amortised cost financial assets - Other receivables 228 987 - - 1,215
FVTOCI financial assets 7 - - - 7
FVTPL financial assets - warrants - - - - -
FVTPL financial assets 72 - - - 72
Amortised costs financial assets - Non-current receivables 1,362 - - - 1,362
Trade and other payables, excluding accruals 237 - - - 237
Short-term borrowings 883 - - - 818
Company GBP AUD USD CAD Total
30 June 2022
£'000 £'000 £'000 £'000 £'000
Cash and cash equivalents 20 - - - 20
Amortised cost financial assets - Other receivables 257 - - - 257
FVTOCI financial assets - - - 1 1
FVTPL financial assets - - - - -
Amortised costs financial assets - Non-current receivables 1,780 - - - 1,780
Trade and other payables, excluding accruals 322 - - - 322
Short-term borrowings 1,423 - - - 1,423
Company GBP AUD USD CAD Total
30 June 2021
£'000 £'000 £'000 £'000 £'000
Cash and cash equivalents 387 - - - 387
Amortised cost financial assets - Other receivables 161 987 - - 1,148
FVTOCI financial assets 7 - - - 7
FVTPL financial assets 72 - - - 72
Amortised costs financial assets - Non-current receivables 1,362 - - - 1,362
Trade and other payables, excluding accruals 211 - - - 211
Short-term borrowings 883 - - - 818
Exposures to foreign exchange rates vary during the year, depending on the
volume and nature of overseas transactions.
21. Reconciliation of Liabilities Arising from Financing Activities and Major
Non-Cash Transactions
Significant non-cash transactions, from financing activities in relation to
loans and borrowings, are as follows:
30 June 2021 Cash flows Loans received Non-cash flow Restructured Non-cash flow Conversion Non-cash flow Forex movement Non-cash flow Interest and arrangement fees accreted Cash flows Principal repaid Cash flows Interest repaid 30 June 2022
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Align Research Ltd loan - 950 - (170) - 98 (100) - 778
Premium Credit 65 - - - - - (65) - -
C4 / Riverfort Capital and YA II PN Ltd loan 818 - - (129) - 56 (100) - 645
Total 883 950 - (299) - 154 (265) - 1,423
Significant non-cash transactions from financing activities in relation to
raising new capital are disclosed in Note 17.
There were no significant non-cash transactions from investing activities in
the current year.
Significant non-cash transactions from operating activities were as follows:
· Payment for services and Director remuneration (share-based
payments in the form of options and warrants), in the amount of £15,829
(2021: £nil), disclosed in Notes 17 and 18;
· Impairment of associates and joint venture projects in the amount
of £400,000 (2021: £nil);
· Impairment of FVTPL assets in the amount of £72,000 (2021:
£nil);
· Share based payments to settle creditor balances £72,000 (2021:
£392,000).
22. Acquisition of Niugini Nickel Pty Ltd
On 18 October 2021 the Company, via its 100% owned subsidiary Corcel
Australasia Pty Ltd, completed the acquisition of 100% of the shares in
Niugini Nickel Pty Ltd ("NN") from Resource Mining Corporation Pty Ltd
("RMC"). Consideration paid by the Company for the acquisition of NN was the
forgiveness of the corporate debt held by the Company and payable by RMC
totalling AUD 4,761,087. The Company has accounted for the fair value of
this consideration based on the cost to acquire the debt, at a substantial
discount to face value, plus transaction costs. As at 18 October 2021 the
total cost of acquisition of the debt payable by RMC stood at £1,013,302.
The Company has determined the fair value of the assets and liabilities of NN
to be recognised in these consolidated interim financial statements as
follows:
Fair value recognised on acquisition
£(000's)
Assets
Cash 2
Receivables 18
Property, plant and equipment 41
Exploration and evaluation assets 967
Total Assets 1,028
Liabilities
Trade and other payables (15)
Total liabilities (15)
Total identifiable net assets at fair value 1,013
Purchase consideration 1,013
Under IFRS 3, a business must have three elements: inputs, processes and
outputs. Niugini Nickel is an early stage exploration company and has no near
term plans to develop a mine. Niugini Nickel does have titles to mineral
properties but these could not be considered inputs because of their early
stage of development. Niugini Nickel has no processes to produce outputs and
had not completed a feasibility study or a preliminary economic assessment on
any of its properties at the time of acquisition, nor did it hold any
infrastructure or assets that could produce outputs. Therefore, the Directors
conclusion is that the transaction is an asset acquisition and not a business
combination. The fair value adjustment to intangible assets of £967,499
represents the excess of the purchase and contingent consideration of
£1,013,302 over the excess of the net assets acquired (net assets of
£45,803).
23. Significant Agreements and Transactions
Financing
· During the year the Company drew down on £500,000 of principal
debt under a facility entered into on 12 May 2021 bearing interest at 8% and
repayable on 30 April 2022. 3,800,000 warrants exercisable at 1.5 pence each
for 3 years were issued to the finance providers on 14 December 2021. The
facility was settled via £100,000 in cash payments, £170,000 on conversion
into 11,333,333 shares in the Company at 1.5 pence on 16 March 2022 and
£270,000 on novation into a further financing agreement entered into on 21
February 2022.
· On 21 February 2022 the Company entered into a financing
agreement with Align Research and Riverfort Global Opportunities Fund for the
provision of a facility of up to £720,000. Of the facility, £450,000 was
drawn down as cash in the year with the remaining £270,000 representing a
novation of amounts due under a separate facility entered into with the
finance providers in the prior year (see above). 30,000,000 warrants
exercisable at 1.5 pence each for 2 years were issued to the facility
providers as part of the agreement. Principal and interest totalling
£777,500 as at 30 June 2022 is repayable by 31 October 2022.
· On 22 December 2021 the Company settled £100,000 of principal
due to C4 in cash, with a further £128,586 of principal and interest being
converted into 8,572,400 shares at 1.5 pence on 28 February 2022. As at 30
June 2022 the remaining £645,213 of principal and interest under the loan is
due for settlement on 23 June 2023.
· On 21 February 2022 the Company issued 7,200,000 shares at 1.5
pence each in settlement of creditor balances totalling £108,000.
· On 16 March 2022 the Company undertook an institutional placing,
issuing 25,793,332 shares at 1.5p raising a total of £386,900 in new funds.
· On 4 April 2022 the Directors of the Company subscribed for
2,295,080 shares in the Company at 1.525 pence each, raising £35,000 in new
funds.
Niugini Nickel Pty Ltd - Wowo Gap Nickel/Cobalt Project
· On 18 October 2021 the Company completed the acquisition of 100%
of the shares in Niugini Nickel Pty Ltd from resource Mining Corporation
Limited ("RMC"). Consideration for the acquisition was the forgiveness of
debt payable to the Company by RMC. See note 22 for further details.
Nickel Offtake MOU
· On 10 January 2022 the Company announced that it had signed an
MOU with Shandong New Powder COSMO AM&T for the supply of nickel from the
Company's Mambare and Wowo Gap nickel/cobalt projects in PNG. NPC indicated
that it is seeking to purchase up to 0.5Mt per annum of nickel DSO products,
and the parties agreed to negotiate a binding agreement for this production.
Partnership with Altana Social Impact Partnership
· On 28 April 2022 the Company announced that it had signed a Heads
of Terms with the Altana Social Impact Partnership in order to fund its
current and future UK energy storage and generation projects. The heads of
terms included an option to directly invest in Corcel's UK Flexible Grid
Solutions subsidiary.
24. Commitments
As at 30 June 2022, the Company had entered into the following commitments:
· Exploration commitments: On-going exploration expenditure is
required to maintain title to the Group mineral exploration permits. No
provision has been made in the Financial Statements for these amounts as the
expenditure is expected to be fulfilled in the normal course of the operations
of the Group.
· On 8 November 2021, the Company entered into a new lease
agreement for office space with WeWork Aldwych House. The initial lease ran
from 1 January 2022 through 30 June 2022 and was non-cancellable during this
period. Thereafter, the lease can be terminated by giving one full calendar
month notice.
25. Related Party Transactions
· Related party receivables and payables are disclosed in Notes 14
and 15, respectively.
· The key management personnel are the Directors and their
remuneration is disclosed within Note 8.
· On 28 February 2022 the Company announced that C4, a UK
incorporated private entity where James Parsons, Chairman of Corcel Plc is
both a director and a shareholder, would convert £128,586 of outstanding
principal and interest into 8,572,400 new ordinary shares of the Company.
Amounts remaining to be paid under the loan as at 30 June 2022 were £645,213.
26. Events After the Reporting Period
· On 20 July 2022 the Company announced a fundraising of up to
£600,000 including a placing of £336,000 at a price of £0.004 with warrants
exercisable at £0.005 per share and a broker option of up to £300,0000 on
the same terms. The Company further announced that 15,000,000 warrants
issued on 12 May 2021 would be repriced to £0.004 per new ordinary share, and
that 30,000,000 warrants priced at £0.015 per share had been cancelled and
replaced with 112,500,000 new warrants now priced at £0.004 per new ordinary
share. On 27 July 2022 the Company announced the conclusion of the
fundraising at a total value of £357,320 resulting in the issuance of a
further 5,330,000 new ordinary shares at a price of £0.004 and 5,330,000
warrants to buy shares at a price of £0.005. The Company also announced the
issuance of 4,466,500 broker warrants at a price of £0.004.
· On 17 October 2022 the Company announced the intention to create
a Singapore based upstream battery metal joint venture consolidating the
Company's interests in the Wowo Gap and Mambare nickel/cobalt projects and
adding to them an interest in the Doncella lithium project in Argentina. The
Company would own 50% of the new JV, have board representation and benefit
from a $1.5m carried interest generally and a 1.5% gross revenue royalty over
the Wowo Gap project. NPC further agreed to invest £200,000 into the
Company at a price of £0.004 with 1 for 1 warrants exercisable at a price of
£0.005 per share and was to be offered a board seat at Corcel.
· On 31 October 2022 the Company announced that it had agreed with
its lenders of a debt position due 31 October 2022, to make an immediate
repayment of £150,000 with the residual balance of £627,600 being deferred
to 31 March 2023. The Company has further agreed a refinancing fee of
£77,760 to be paid by 23 December 2022 in new ordinary shares of the Company
to be priced at the lowest VWAP of the Company's shares as traded between 31
October 2022 and 20 December 2022. The Lenders will have the right to
convert any outstanding balances into equity at the Strike Price between 20
December 2022 and 31 March 2023. The outstanding balances will accrue a
monthly coupon of 1%. The Company further agreed to a series of potential
accelerated repayment scenarios in the event that asset sales for cash or new
equity placings were completed before the balance of the loan amounts fell
due. The Company also agreed that before 20 December 2022 it would either
pay a fee of £475,000 in aggregate to the Lenders or extend 112,500,000 of
existing warrants currently allowing purchase of new ordinary shares at a
price of £0.004 until 20 February 2024, to an extended term where they remain
exercisable until 31 March 2025, with a related resettability clause
associated with these warrants to also be extended until 31 December 2023.
· On 16 November 2022 the Company announced that it had completed
the sale of its 40% interest in the Tring Road Gas Peaking Project to Terra
Firma Ltd. The Company has agreed a sales price of £317,946, with £121,146
to be paid immediately and a further £196,800 at completion, which was
expected on or about 1 December 2022.
27. Control
There is considered to be no controlling party.
28. These results are audited, however the information does not constitute
statutory accounts as defined under section 434 of the Companies Act 2006.
The consolidated statement of financial position at 30 June 2022 and the
consolidated income statement, consolidated statement of comprehensive income,
consolidated statement of changes in equity and the consolidated cash flow
statement for the year then ended have been extracted from the Group's 2022
statutory financial statements. Their report was unqualified and contained
no statement under sections 498(2) or (3) of the Companies Act 2006. The
financial statements for 2022 will be delivered to the Registrar of Companies
by 31 December 2022.
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