REG - Corcel PLC - Final Audited Results for Year Ended 30 June 2024
16/12/2024 07:00
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RNS Number : 1409Q Corcel PLC 16 December 2024
Corcel PLC
("Corcel" or the "Company")
Final Audited Results
for the Year Ended 30 June 2024
16 December 2024
The Company's Annual Report and Financial Statements for 2024, extracts from
which are set out below, will be published and sent out to the Company's
shareholders shortly and will be available on the Company's website at
www.corcelplc.com (http://www.corcelplc.com) .
Chairman's Statement
Dear Shareholders,
I am pleased to present Corcel Plc's Annual Report and Accounts for the
financial year ending 30 June 2024. Our activities this year have set the path
for a true transformation of Corcel, characterised by strategic realignment,
commercial and operational milestones, and a strengthened commitment to
delivering significant sustainable value for our stakeholders.
Strategic and Operational Progress
In July 2023, with the acquisition of 90% of Atlas Petroleum Exploration
Worldwide Ltd ("APEX"), we embarked on a strategic pivot, focusing our efforts
on high-impact onshore oil and gas assets in Angola's Kwanza Basin, namely:
operated Block KON-16 and non-operated blocks KON-11 and KON-12. The operator
of KON-11, Angola's national oil company, Sonangol Pesquisa e Produção, S.A.
("Sonangol"), drilled two wells (TO-13 and TO-14) in the Tobias field during
Q3 and Q4 of 2023. Both wells had oil shows, indicating the presence of
hydrocarbons in the field. Detailed work is currently being undertaken to
assess the results and address the mechanical and performance issues, faced
during the testing of these two wells.
In our operated block KON-16, we initiated Geological and Geophysical
"G&G" studies and conducted an Enhanced Full Tensor Gradiometry Survey
("eFTG"), which was successfully acquired post year-end reporting during Q3,
2024, with processing ongoing. The eFTG is expected to provide highly accurate
geophysical representations of critical information for developing a detailed
exploration programme, comprising of a 2D seismic acquisition programme and an
exploration well to establish the shallow post-salt and deep pre-salt
prospectivity of KON-16.
In April 2024, to recalibrate the strategic direction, Mr. Scott Gilbert (a
co-founder of APEX) was appointed as interim CEO, bringing to the Company
extensive experience, operating in Brazil and in Angola, complementing the
experience of Ms. Geraldine Geraldo, Executive Director (also a co-founder of
APEX). In July 2024, post year end reporting, Scott was appointed as permanent
CEO and an Executive Director to the Board. The newly formed management team
delivered the following key milestones:
o Increased our equity in KON-16 from 31.5% to 49.5%, underscoring our
confidence in what we believe to be one of the most exciting blocks in the
onshore Kwanza Basin with not only a post-salt potential, but a significant
pre-salt potential as well (September 2024);
o Delivered critical G&G progress, including the completion of the eFTG
survey for developing prospectivity in KON-16 (Q2-Q3 2024);
o Signed a collaboration agreement with a Brazilian oil field services
company, which has resulted in our entry into the country through the option
agreement (with minimal dilution to shareholders) for the acquisition of gas
production from the Irai field, onshore Brazil. Our collaboration has enhanced
our operational capacity in Brazil, and we are presently reviewing several
promising production acquisition opportunities in the region (July 2024);
o Strengthened the technical and operational team with the appointment of
Chief Operating Officer, Richard Lane (November 2024);
o Secured new strategic investors with extensive experience in oil and gas
in both Angola and Brazil (September 2024);
o Completed a full review and analysis of the mining portfolio, paving the
way for operations to recommence in 2025 (Q3 2024).
Corcel is now firmly established as an energy company with three verticals,
which intend to deliver a) significant upside through our Angola exploration
assets, b) revenue from production through our entry into the Irai field and
other potential acquisitions in Onshore Brazil, and c) continued exposure to
rare earth and battery metals from our historical assets, which are very much
at the forefront of energy transition and global electrification trends.
Financial Discipline and Fundraising
Financial resilience remains a cornerstone of our approach. In May 2024, we
successfully raised £399,750 through equity issuances, reflecting continued
investor confidence in our vision. These funds have been deployed
strategically to advance our work programs in Angola, evaluate opportunities
in Brazil, and support ongoing operational needs.
Prior to year end reporting, in June 2024, we raised a further £500,000 from
strategic investors, again, reflecting investor confidence in the Company and
the management team. These modest raises were completed with the intention of
minimising dilution to shareholders, yet enabled the Company to deliver on
several of its newly set strategic objectives.
In September 2024, the Company completed a fundraising of £1,220,000, which
included the participation of several supportive long-term oil and gas
investors.
We report during the period that the Group incurred a loss of £3.03 million
(2023: loss of 1.26 million), primarily due to increases in administrative
expenses £2.57 million (2023: £1.44 million), related to the expansion of
the business and asset portfolio, and the impairment of £0.22 million to the
Company's Canegrass project in Australia (2023: £nil). Project costs during
the year held flat at £0.14 million (2023: £0.11 million) and finance costs
fell to £0.13 million (2023: £0.45 million) reflecting the Company's
transition to less expensive sources of capital.
Governance and Leadership
This year, we undertook a governance refresh to better align with our evolving
strategic priorities. I was honoured to assume the role of Non-Executive
Chairman. The Company is supported by a talented Board and an excellent
leadership team with deep expertise across oil and gas, finance and
international markets. Together, we are committed to ensuring robust
governance as a foundation for existing operations and our growth ambitions.
Outlook and Future Plans
The upcoming year is poised to be one of great importance for Corcel.
Our key priorities for 2024-2025 include:
o Advancing the exploration program on KON-16;
o Building on our first acquisition, expanding our footprint in Brazil
through strategic acquisitions targeting near-term production;
o Strengthening partnerships and working closely with the Operator in Angola
to maximize the value of KON-11 and KON-12;
o Maximising value potential from our Battery Metals and Rare Earth assets;
o Upholding financial prudence and operational efficiency to sustain
progress.
We remain steadfast in our commitment to building a balanced portfolio of
energy assets, combining near-term production with long-term exploration
upside, while delivering sustainable value for our shareholders.
On behalf of the Board, I extend my deepest gratitude to our shareholders for
their unwavering support, to our employees for their dedication, and to our
partners for their collaboration. Together, we are forging a resilient and
dynamic Corcel, poised to thrive in an evolving energy landscape.
Yours sincerely,
Pradeep Kabra
Independent Non-Executive Chairman
Corcel Plc
CEO's Statement
Dear Shareholders,
I am delighted to provide the following statement, which underscores a year
where we have laid the foundation for an ambitious transformation of our
Company, emerging as a dynamic and resilient player in the energy sector. Our
journey is characterised by a clear strategic vision, decisive actions, and an
unwavering commitment to unlocking the immense potential of our asset
portfolio across Angola, Brazil, and beyond, by investing and maturing our
three verticals:
o Exploration: high-impact oil and gas post-salt and pre-salt exploration
from the onshore Kwanza Basin in Angola;
o Production: low-risk production from oil and gas fields onshore Brazil for
near-term revenue generation;
o Energy Transition: through the development of our Battery Metals asset
portfolio.
Operational Achievements and Strategic Momentum
2024 has been a pivotal year for Corcel. The acquisition of a 90% interest in
APEX in June 2023 marked the beginning of a new chapter, enabling the business
to pivot our focus toward high-impact, high-potential oil and gas assets in
Angola's Kwanza Basin. In KON-16, our operated block, we made significant
progress, including the completion of the Enhanced Full Tensor Gradiometry
("eFTG") survey-an instrumental step in refining our exploration plans.
Additionally, our increased equity in KON-16, as disclosed in the Chairman's
Statement, underscores our confidence in this asset's transformative
potential, particularly its pre-salt prospectivity. These advancements
represent more than technical milestones; they signal Corcel's readiness to
lead in unlocking the untapped value in Angola's onshore energy landscape.
Beyond Angola, we entered Brazil with a strategic collaboration, signing an
option agreement to acquire gas production from the Irai field transaction
(post year-end). This entry not only diversifies our portfolio but also
establishes a beachhead for additional opportunities in a key market with
significant near-term production potential.
Financial Resilience and Strategic Investment
The financial discipline, we have exercised, has been instrumental in
achieving key operational objectives, while minimising shareholder dilution.
With successful fundraisings, strategic partnerships, and a shift toward
cost-effective capital, we have ensured Corcel's financial robustness even as
we scale our ambitions.
The Company's loss during the period reflects necessary investments in our
people, processes, and portfolio. These expenditures, while initiated under
previous management, are not merely costs but strategic steps toward Corcel's
future-a future rooted in operational excellence, technical innovation, and
long-term value creation. Since taking over as CEO after the year-end, I have
prioritised exercising tight cost control and adopting a more disciplined
approach to ensure that every investment aligns with our strategic objectives
and drives sustainable value. This marks a shift toward greater financial
prudence and accountability under my leadership.
People and Partnerships: Driving Progress
At the core of our transformation is a talented team of experts, supported by
strategic partnerships that amplify our operational capacity. The addition of
a seasoned leadership team and our collaboration with partners in Angola and
Brazil are critical enablers of our vision. We are building an organization
that thrives on collective expertise, delivering impactful results with
precision and accountability.
Looking Ahead: The Road to 2025
Corcel is entering an era of execution. Our focus for the year ahead includes
advancing exploration on KON-16, expanding our footprint in Brazil, and
maximising the value of KON-11 and KON-12 through close collaboration with
Sonangol. Simultaneously, we will work to maximise value from our Battery
Metals and Rare Earth assets to capture the opportunities, presented by the
energy transition.
As we execute on these priorities, we will remain uncompromising in our
commitment to financial prudence, operational excellence, and stakeholder
value. Corcel is poised to deliver a balanced portfolio that marries the
immediacy of production revenues with the upside potential of long-term
exploration.
A Shared Vision for Success
I am deeply grateful to our shareholders, to our employees, and our partners.
Together, we are not just building a Company-we are crafting a legacy of
sustainable growth, innovation, and resilience in the energy sector.
Thank you for your support as we take bold steps toward realising the full
potential of Corcel Plc.
Yours sincerely,
Scott Gilbert
Chief Executive Officer
Corcel Plc
Results and Dividends
The Group made a loss after taxation of £3.03million (2023: loss of £1.26
million) with the increase on the prior year, driven largely by the costs
associated with operating an expanded Group, inclusive of operations in
Angola, which had only been acquired at the end of the prior year. The
Directors do not recommend the payment of a dividend (2023: nil).
For further information, please contact:
Scott
Gilbert
Corcel Plc CEO & Director
Development@Corcelplc.com (mailto:Development@Corcelplc.com)
James Joyce / James Bavister / Andrew de Andrade
Zeus NOMAD & Broker
020 3829 5000
Jonathan Wright / Rupert Holdsworth
Hunt
Auctus Advisors Joint Broker
07711 627449
Patrick d'Ancona
Vigo Communications IR
0207 3900 230
The information, contained within this announcement, is deemed to constitute
inside information as stipulated under the Market Abuse Regulation (EU) No.
596/2014, which is part of UK law by virtue of the European Union (withdrawal)
Act 2018. Upon the publication of this announcement, this inside information
is now considered to be in the public domain.
About Corcel
Corcel has a notable oil and gas portfolio in onshore Angola that includes
brownfield redevelopment opportunities and significant exploration upside.
Corcel marked a new country entry into Brazil by acquiring rights to producing
gas and exploration assets, further diversifying its portfolio and enhancing
its growth potential.
Corcel's Angola portfolio consists of interests in three licences:
· KON - 16 Operated - 55% working interest - 49.5% net to CRCL
· KON - 11 Non-Operated - 20% working interest - 18% net to CRCL
· KON - 12 Non-Operated - 25% working interest - 22.5% net to CRCL
Corcel's Brazil portfolio consists of the option to acquire:
· a 20% interest in the IRAI gas field
· a right-of-first refusal ("ROFR") over the remaining 80% in the
IRAI field, and
· another ROFR for 100% of the adjacent TUC-T-172 exploration
block, located in the state of Bahia, onshore Brazil.
Independent Auditor's Report to the Members of Corcel Plc
Opinion
We have audited the Financial Statements of Corcel Plc (the "Company") and its
subsidiaries (the "Group") for the year ended 30 June 2024, which comprise the
Consolidated and Company Statements of Financial Position, the Consolidated
Income Statement, the Consolidated Statement of Comprehensive Income, the
Consolidated and Company Statements of Changes in Equity, the Consolidated and
Company Statements of Cash Flows and notes to the Financial Statements,
including 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 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 Company's affairs as at 30 June 2024 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 Company Financial Statements have been properly prepared in
accordance with UK-adopted international accounting standards 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 the 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 Company are reliant on raising additional funding in
order to meet commitments as they fall due, including working capital
requirements and funding of agreed work programmes. As stated in Note 1.2,
these events or conditions indicate that a material uncertainty exists that
may cast significant doubt on the Group's and the 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 Directors'
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 the 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;
· reviewing the cash flow forecasts for the ensuing twelve months from
the date of approval of these Financial Statements and critically analysing
the key inputs and assumptions used;
· reviewing the stress testing performed by management for
reasonableness;
· obtaining an understanding of committed spend versus spend that can
be deferred if needed, and how management is able to cut back costs should it
be needed to preserve cashflow in the short term;
· reconciling the opening bank balance as per the cashflow forecast to
the bank statements at the beginning of December 2024;
· reviewing management's going concern memorandum and holding
discussions with management regarding future plans and availability of
funding;
· reviewing the adequacy and completeness of disclosures in the Group
and Company Financial Statements; and
· reviewing post balance sheet events as they relate to the Group's
and Company's ability to raise funds.
Our responsibilities and the responsibilities of the Directors with respect to
going concern are described in the relevant sections of this report.
Our Application of Materiality
For the purposes of determining whether the Financial Statements are free from
material misstatement, we define materiality as a magnitude of misstatement,
including omission, that makes it probable that the economic decisions of a
reasonably knowledgeable person, relying on the Financial Statements, would be
changed or influenced. We have also considered those misstatements, including
omissions that would be material by nature and would impact the economic
decisions of a reasonably knowledgeable person based our understanding of the
business, industry and complexity involved.
We apply the concept of materiality both in planning and throughout the course
of audit, and in evaluating the effect of misstatements. Materiality is used
to determine the Financial Statements areas that are included within the scope
of our audit and the extent of sample sizes during the audit.
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. 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.
In determining materiality and performance materiality, we considered the
following factors:
· our cumulative knowledge of the Group and its environment,
including industry specific trends;
· any 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.
Materiality for the Group Financial Statements was set at £181,000 (2023:
£172,400). This was calculated at 3% of net assets (2023: 3% 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, mining tenements and joint venture.
Materiality for the significant components of the Group, ranged from £91,500
to £180,000 (2023: £87,600 to £171,000) calculated as a percentage of net
assets.
Performance materiality for the Group Financial Statements was set at
£126,700 (2023: £120,600), being 70% (2023: 70%) of materiality for the
Group Financial Statements as a whole.
Materiality and performance materiality for the Company was set at £180,000
(2023: £171,000) and £126,000 (2023: £119,700) respectively.
The materiality and performance materiality for the significant components,
including the Company, are calculated on the same factors as Group materiality
and performance materiality.
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 £9,050 (2023: £8,600) for the Group and for the Company a value in
excess of £9,000 (2023: £8,500). 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, being areas subject to significant
management judgement as well as areas of greatest complexity and size. The
scope of our audit was based on the significance of components' operations and
materiality. Each component was assessed as to whether they were significant
to the Group based on financial significance or risk.
The Group includes the listed Company in United Kingdom and a number of
subsidiaries based in different jurisdictions. The listed Company and one
subsidiary were considered to be significant components due to identified risk
and size.
In designing our audit, we determined materiality, as above, and assessed the
risk of material misstatement in the Financial Statements. We tailored the
scope of our audit to ensure that we performed sufficient work to be able to
give an opinion on the Financial Statements, considering the structure of the
Group.
We considered areas deemed to involve significant judgement and estimation by
the Directors, such as the key audit matters surrounding: the carrying value
of investments in subsidiaries, assets held for sale, and receivables from
other Group companies; and the carrying value of exploration and evaluation
assets. Other judgemental areas relate to the valuation of share options and
warrant instruments. 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 Group's and the Company's centralised accounting function is based in
United Kingdom and the audit work on all significant components was performed
by our Group audit team in London.
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.
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 investments in subsidiaries and receivables from subsidiary Our work in this area included:
(Company only) (Notes 10 and 13).
· Obtaining relevant documentation relating to the ownership of
Investments in subsidiaries and receivables from subsidiaries are significant investments at the year end;
balances in the financial statements.
· Reviewing management's assessment of recoverability of investments in
Investments: subsidiaries and receivable from subsidiary, including challenging and
corroborating key assumptions made therein;
The Company holds a 90% interest in Atlas Petroleum Exploration Worldwide Ltd
(carrying value of £966,000) and a 100% interest in Corcel Australasia · Consideration of the recoverability of these balances by reference to
(carrying value of £1,014,000). underlying net asset values, including the recoverability potential of the
underlying projects where applicable;
Receivable balance:
· Obtaining and reviewing any relevant agreements relating to
The Company currently has outstanding receivables due of £3,882,000 from investments (including shareholder agreements and licence agreements) to
subsidiary Atlas Petroleum Exploration Worldwide Ltd. ensure all terms were complied with;
As at 30 June 2024, these assets have material value in the Financial · Review of Board minutes and Regulatory News Service (RNS)
Statements. announcements to identify potential indicators of impairment to these assets;
and
Given the losses in these entities and uncertainty around the development as
the projects are in early stages of development, there is a risk that these · Considering the appropriateness of disclosures included in the
balances may be impaired. As determining the recoverability involves a high Financial Statements.
degree of management estimate and judgement, this is considered to be a key
audit matter.
Carrying value of exploration and evaluation assets (Group) (Note 21). 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 projects through
Group's Financial Statements. There is the risk that this amount is impaired inspection of relevant licenses, contracts and agreements;
and the capitalised amounts do not meet the recognition criteria as adopted by
the Group. The capitalisation of the costs and determination of the
recoverability of these assets are subject to a high degree of management
estimation and judgement and therefore there is a risk this balance is · Testing a sample of costs capitalised, including considerations of
materially misstated. Given the level of judgement involved, this is their appropriateness for capitalisation in accordance with IFRS 6-Exploration
considered to be a key audit matter. for and Evaluation of Mineral Resources and the Group's accounting policy;
· Reviewing management's impairment assessment in respect of the
carrying value, including challenging and obtaining corroborating evidence for
key assumptions used;
· Performing independent assessment of the existence of impairment
indicators as required by IFRS 6; and
· Considering the appropriateness of disclosures included in the
Financial Statements.
Accounting treatment and recoverability of assets held for sale (Group and Our work in this area included:
Company) (Notes 1.5 and 22).
· Obtaining the agreements signed in the disposal process and reviewing
The Group and Company hold a 41% interest in JV Company Oro Nickel Ltd. The the terms and conditions of the disposal;
sale agreement was entered into with the Buyer in October 2023 subject to
completion terms. This was treated as an asset held for sale in the previous
year in accordance with IFRS 5 Non-current assets held for Sale and
Discontinued operations. · Agreeing the consideration received or receivable to the underlying
calculations, agreements and other relevant supporting documentation;
The sale transaction could not be completed in the current year due to a
dispute raised by the JV partner in relation to pre-emption rights on the sale · Obtaining an understanding of progress made during the year and the
of the interest. appropriateness of classification of the relevant assets as held for sale in
accordance with IFRS 5;
At the year end, £3,000,000 (Company) and £2,975,000 (Group) have been
classified as Assets held for sale in relation to the Group's and Company's · Reviewing RNS announcements and Board minutes, as well as holding
investment in the JV, made up of equity investment and loan balance. This discussions with management, to understand the latest position with regard to
balance is material to the Financial Statements. the planned disposal and related dispute raised by the partner;
There is a risk that the balances relating to the Group's and Company's · Holding discussions with the Company's external lawyer with regard to
interest in Oro Nickel are inappropriately classified as Assets held for sale the dispute raised by the JV partner to understand the status of the claim and
and, further, that the carrying value is not held at the lower of carrying current proceedings;
value and fair value less costs to sell as required by IFRS 5. Given the
significance of these balances to the Financial Statements, we have considered
this to be a key audit matter.
· Independently considering indications that the carrying value of the
related IFRS 5 assets may need to be written down to fair value; and
· Considering the appropriateness of disclosures included in the
Financial Statements.
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 the 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 the 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 by the Company, or
returns adequate for our audit have not been received from branches not
visited by us; or
· the 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 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 the Company Financial Statements, the Directors are
responsible for assessing the Group and the 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 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 the 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 the Company in this regard to be those arising from:
o AIM Rules;
o QCA Corporate Governance Code;
o UK Companies Act 2006;
o UK-adopted international accounting standards;
o UK employment law;
o UK tax legislation;
o General Data Protection Regulations;
o Anti-Bribery Act;
o Anti-Money Laundering Regulations; and
o Local environmental and exploration regulations.
· We designed our audit procedures to ensure the audit team
considered, whether there were any indications of non-compliance by the Group
and the 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 and professional ledger accounts; and
o A review of Regulatory News Service Announcements
· We also identified the risks of material misstatement of the
Financial Statements due to fraud. Other than 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.
· Our review of non-compliance with laws and regulations,
incorporated all Group entities. The risk of actual or suspected
non-compliance was not sufficiently significant to our audit to result in our
response being identified as a key audit matter.
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 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 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 Company and the Company's members as
a body, for our audit work, for this report, or for the opinions we have
formed.
Imogen Massey (Senior Statutory Auditor)
15 Westferry Circus
For and on behalf of PKF Littlejohn
LLP
Canary Wharf
Statutory
Auditor
London E14 4HD
13 December 2024
Financial Statements
Consolidated Statement of Financial Position
as at 30 June 2024
Notes 30 June 30 June
2024 2023
£'000 £'000
ASSETS
Non-current assets
Exploration & evaluation assets 21 7,713 2,014
Property, plant and equipment 8 1
Financial instruments - fair value through other comprehensive income (FVTOCI) 12 1 1
Other receivables 13 173 2,231
Total non-current assets 7,895 4,247
Current assets
Cash and cash equivalents 18 268 257
Trade and other receivables 13 917 754
Total current assets 1,185 1,011
Assets held for sale 22 2,975 1,575
Total assets 12,055 6,833
EQUITY AND LIABILITIES
Equity attributable to owners of the Parent
Called up share capital 16 2,953 2,842
Share premium account 16 31,110 28,138
Other reserves 2,802 2,481
Retained earnings (30,980) (27,945)
Total equity attributable to owners of the Parent 5,885 5,516
Total equity 5,885 5,516
LIABILITIES
Current liabilities
Trade and other payables 14 4,840 715
Short-term borrowings 14 1,330 602
Total current liabilities 6,170 1,317
Total equity and liabilities 12,055 6,833
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 13 December 2024 and are signed on its behalf by:
Scott Gilbert
Executive Director
Registration number: 05227458
Consolidated Income Statement
for the year ended 30 June 2024
Notes Year to Year to
30 June 30 June
2024 2023
£'000 £'000
Gain on disposal of tenements 2 - 475
Gain on disposal of subsidiaries 2 - 287
Gain on disposal of JV's and associates 2 - 384
Project expenses (144) (114)
Impairment of investments in joint ventures and financial instruments held at 11 - (337)
fair value through profit and loss (FVTPL)
Impairment of E&E asset 21 (220) -
Administrative expenses 4 (2,572) (1,442)
Foreign currency gain/(loss) 14 (13)
Other income 43 25
Finance costs, net 5 (129) (451)
Share of loss of associates and joint ventures 11,22 - (76)
Loss for the year before taxation 3 (3,008) (1,262)
Taxation 6 - -
Loss for the year for continuing operations (3,008) (1,262)
Loss for the year for discontinued operations 22 (27) -
Loss per share attributable to:
Equity holders of the Parent (3,035) (1,262)
Non-controlling interest - -
(3,035) (1,262)
Earnings per share attributable to owners of the Parent:
Basic and diluted 9 9 (0.2) pence (0.2) pence
Basic and diluted (continued operations) 9 9 (0.2) pence (0.2) pence
Basic and diluted (discontinued operations) 9 9 (0.0) pence -
Consolidated Statement of Comprehensive Income
for the year ended 30 June 2024
30 June 30 June
2024 2023
£'000 £'000
Loss for the year (Continuing and discontinued operations) (3,035) (1,262)
Other comprehensive income
Items that will be not be reclassified subsequently to profit or loss
Unrealised foreign currency (loss)/gain on translation of foreign operations (17) 5
Total other comprehensive income for the year (17) 5
Total comprehensive loss for the year (Continuing and discontinued operations) (3,052) (1,257)
Total comprehensive loss attributable to:
Equity holders of the Parent (3,052) (1,257)
Non-controlling interest - -
(3,052) (1,257)
The accompanying notes form an integral part of these Financial Statements.
Consolidated Statement of Changes in Equity
for the year ended 30 June 2024
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
£'000 Equity
£'000
As at 1 July 2022 2,751 24,961 75 (26,758) 2,095 3,124 - 3,124
Changes in equity for 2023
Loss for the year - - - (1,262) - (1,262) - (1,262)
Other comprehensive income for the year
Unrealised foreign exchange loss arising on retranslation of foreign company - - - - 5 5 - 5
operations
Total comprehensive income for the year - - - (1,262) 5 (1,257) - (1,257)
Transactions with owners
Issue of shares, net of issue costs 91 3,177 - - - 3,268 - 3,268
Cancellation of shares to be issued - - (75) 75 - - - -
Options issued - - - - 53 53 - 53
Warrants issued - - - - 328 328 - 328
Total transactions with owners 91 3,177 (75) 75 381 3,649 - 3,649
As at 30 June 2023 and 1 July 2023 2,842 28,138 - (27,945) 2,481 5,516 - 5,516
Changes in equity for 2024
Loss for the year - - - (3,035) - (3,035) - (3,035)
Other comprehensive income for the year
Unrealised foreign exchange loss arising on retranslation of foreign company - - - - (17) (17) - (17)
operations
Total comprehensive income for the year - - - (3,035) (17) (3,052) - (3,052)
Transactions with owners
Issue of shares, net of issue costs 111 2,972 - - - 3,083 - 3,083
Options issued - - - - 216 216 - 216
Warrants issued - - - - 122 122 - 122
Total transactions with owners 111 2,972 - - 338 3,421 - 3,421
As at 30 June 2024 2,953 31,110 - (30,980) 2,802 5,885 - 5,885
See Note 15 for a description of each reserve included above.
Consolidated Statement of Changes in Equity
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 2022 (2) 116 1,450 531 2,095
Unrealised foreign exchange gain arising on retranslation of foreign company - - - 5 5
operations
Options granted during the year - 53 - - 53
Warrants granted during the year - - 328 - 328
As at 1 July 2023 (2) 169 1,778 536 2,481
Unrealised foreign exchange loss arising on retranslation of foreign company - - - (17) (17)
operations
Options granted during the year - 216 - - 216
Warrants granted during the year - - 122 - 122
As at 30 June 2024 (2) 385 1,900 519 2,802
See Note 15 for a description of each reserve included above.
Consolidated Statement of Cash Flows
for the year ended 30 June 2024
Year to Year to
30 June 30 June
2024 2023
£ £
Cash flows from operating activities (Continued and discontinued operations)
Loss before taxation (3,035) (1,262)
Impairment of investments in joint ventures and financial instruments held at 220 337
fair value through profit and loss (FVTPL)
Gain on disposal of subsidiaries - (287)
Gain on disposal of mineral tenements - (475)
Gain on disposals of Joint Ventures and Associates - (384)
Depreciation 1 10
Finance cost, net (Note 5) 129 451
Share-based payments 294 53
Share of loss in associates and joint ventures - 76
Equity settled expenses 12 201
Decrease/(Increase) in receivables 121 (139)
(Decrease) / increase in payables (181) 94
Unrealised foreign exchange (4) -
Net cash outflow from operations (2,443) (1,325)
Cash flows from investing activities
Purchase of property, plant and equipment (8) -
Expenditure on exploration & evaluation assets (Note 21) (1,601) (386)
Proceeds from disposal of Joint Ventures and Associates - 384
Proceeds from disposal of Subsidiaries 268 246
Proceeds from disposal of mineral tenements (Note 21) - 535
Proceeds from the partial disposal of assets held for sale (Note 22) 116 -
Net cash outflow from investing activities (1,225) 779
Cash inflows from financing activities
Proceeds from issue of shares net of issue costs 1,823 1,738
Proceeds of new borrowings, as received net of associated fees (Note 20) 2,344 -
Repayment of borrowings (Note 20) (471) (954)
Net cash inflow from financing activities 3,696 784
Net decrease in cash and cash equivalents 28 238
Cash and cash equivalents at the beginning of year 257 25
Foreign exchange on translation of foreign currency (17) (6)
Cash and cash equivalents at end of year 268 257
Major non-cash transactions are disclosed in Note 20.
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 2024
Notes 30 June 30 June
2024 2023
£ £
ASSETS
Non-current assets
Investments in subsidiaries 10 1,980 1,980
Investments in associates and joint ventures 11 - -
Investments in mineral tenements 21 184 392
Loans to subsidiaries 13 3,882 286
Financial assets with fair value through other comprehensive income (FVTOCI) 12 1 1
Other receivables 13 - 1,517
Total non-current assets 6,047 4,176
Current assets
Cash and cash equivalents 18 89 256
Trade and other receivables 13 265 453
Total current assets 354 709
Assets held for sale 22 3,000 1,775
Total assets 9,401 6,660
EQUITY AND LIABILITIES
Called up share capital 16 2,953 2,842
Share premium account 16 31,110 28,138
Other reserves 2,283 1,945
Retained earnings (30,459) (27,332)
Total equity 5,887 5,593
LIABILITIES
Current liabilities
Trade and other payables 14 1,862 465
Loans from subsidiaries 14 322 -
Short-term borrowings 14 1,330 602
Total current liabilities 3,514 1,067
Total equity and liabilities 9,401 6,660
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 £3,127,247 (2023: loss of £1,494,325). The Company's
total comprehensive loss for the financial year was £3,127,247 (2023: loss
£1,419,325).
These Financial Statements were approved by the Board of Directors and
authorised for issue on 13 December 2024 and are signed on its behalf by:
Scott Gilbert
Executive Director
The accompanying notes form an integral part of these Financial Statements.
Company Statement of Changes in Equity
for the year ended 30 June 2024
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 2022 2,751 24,961 75 (25,913) 1,564 3,438
Changes in equity for 2023
Loss for the year - - - (1,494) - (1,494)
Total comprehensive income for the year - - - (1,494) - (1,494)
Transactions with owners
Issue of shares, net of issue costs 91 3,177 - - - 3,268
Cancellation of shares to be issued - - (75) 75 - -
Share options granted - - - - 53 53
Share warrants granted during the year - - - - 328 328
Total transactions with owners 91 3,177 (75) 75 381 3,649
As at 30 June 2023 and 1 July 2023 2,842 28,138 - (27,332) 1,945 5,593
Changes in equity for 2024
Loss for the year - - - (3,127) - (3,127)
Total comprehensive income for the year - - - (3,127) - (3,127)
Transactions with owners
Issue of shares, net of issue costs 111 2,972 - - - 3,083
Share options granted - - - - 216 216
Share warrants granted during the year - - - - 122 122
Total transactions with owners 111 2,972 - - 338 3,421
As at 30 June 2024 2,953 31,110 - (30,459) 2,283 5,887
Company Statement of Changes in Equity
Other reserves FVTOCI Share-based Warrants reserve Total
financial payment £'000 other
asset reserve reserves
reserve £'000 £'000
£'000
As at 30 June 2022 (2) 116 1,450 1,564
Changes in equity for 2023
Transactions with shareholders in the year
Share options granted during the year - 53 - 53
Warrants issued during the year - - 328 328
Total transactions with shareholders - 53 328 381
As at 30 June 2023 and 1 July 2023 (2) 169 1,778 1,945
Changes in equity for 2024
Transactions with shareholders in the year
Share options granted during the year - 216 - 216
Warrants issued during the year - - 122 122
Total transactions with shareholders - 216 122 338
As at 30 June 2024 (2) 385 1,900 2,283
See Note 15 for a description of each reserve included above.
Company Statement of Cash Flows
for the year ended 30 June 2024
Year to Year to
30 June 30 June
2024 2023
£'000 £'000
Cash flows from operating activities (Continued and discontinued operations)
Loss before taxation (3,127) (1,494)
Impairment of investments in joint ventures and financial instruments held at - 337
fair value through profit and loss (FVTPL)
Impairment of mineral tenements 220 -
Impairment of assets held for sale 175 -
Gain on disposal of tenements - (475)
Gain on disposal of subsidiaries - (247)
Gain on disposal of Joint Ventures and Associates - (384)
Finance costs (Note 5) 219 451
Share-based payments 294 53
Equity settled transactions 12 201
Decrease /(Increase) in receivables 110 (87)
Increase/(Decrease) in payables 204 (60)
Unrealised foreign exchange 7 -
Net cash outflow from operations (1,886) (1,705)
Cash flows from investing activities
Proceeds from disposal of mineral tenements - 535
Proceeds from disposal of Subsidiaries - 246
Proceeds from disposal of Joint Ventures and Associates - 384
Proceeds from the partial disposal of assets held for sale 116 -
Loans to subsidiaries (Note 10) (2,081) (8)
Investments in mineral tenements (12) -
Net cash outflows from investing activities (1,977) 1,157
Cash inflows from financing activities
Proceeds from issue of shares, net of issue costs (Note 16) 1,823 1,738
Proceeds of new borrowings (Note 20) 2,344 -
Repayments of borrowings (Note 20) (471) (954)
Net cash inflow from financing activities 3,696 784
Decrease in cash and cash equivalents (167) 236
Cash and cash equivalents at the beginning of period 256 20
Cash and cash equivalents at end of period 89 256
Major non-cash transactions are disclosed in Note 20.
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 2024, were authorised for issue
by the Board on 13 December 2024 and signed on the Board's behalf by Scott
Gilbert. Corcel Plc is a public limited company, incorporated and domiciled
in England and Wales. The Group's ordinary shares are traded on AIM. The
principal activity of the Group is the management of a portfolio of oil and
gas projects in Africa and Brazil and battery metals exploration and
development projects in Australia and PNG. The registered address of the Group
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 ("UK 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 and requirement of the Board to prepare the
Group and the Company Financial Statements on a going concern basis, unless
inappropriate to assume the Group will continue in business. At 30 June 2024,
the Group had cash and cash equivalents of £0.3 million (2023: £0.3 million)
and £1.3 million of borrowings (2023: £0.6). The Group has nil revenues.
The Directors note the necessity, given the limited cash resources currently
held by the Group, that additional funding be raised in the near term to meet
the ongoing spending projections and working capital requirements of the
business. This would most likely be through equity and/or debt issuances in
Q1 2025 with, dependent on the quantum of near term funding raised, further
resources required to be secured in the first quarter of 2025. Whilst the
Directors remain confident that funding will be secured as and when required
to continue to progress the Group's projects and meet its obligations, there
can be no certainty that the Company will be able to secure the necessary
funding when required. Consequently, there exists a material uncertainty over
the application of the going concern principle. See Note 1.2 to these
Financial Statements for further details.
Having considered the prepared cashflow forecasts and the Group budget,
expected operational costs and the continued support of the Company's
suppliers and shareholders, 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.
Notwithstanding the confidence and historical track record of the Board and
the Company in raising funding as and when required, there can be no certainty
that the Company will be successful in raising the additional funding,
necessary to continue to meet its obligations as and when they fall due.
Consequently, a material uncertainty exits, which may cast significant doubt
on the Group and the Company's ability to act as a going concern.
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:
· Amendments to IAS 1: Presentation of Financial Statements:
Classification of Liabilities as Current or Non-current (effective 1 January
2024);
· Amendments to IAS 1: Classification of Liabilities as Current or
Non-current - Deferral of Effective Date (effective 1 January 2024);
· Amendments to IAS 1: Presentation of Financial Statements and
IFRS Practice Statement 2: Disclosure of Accounting Policies (effective 1
January 2023);
· Amendments to IAS 8: Accounting policies, Changes in Accounting
Estimates and Errors - Definition of Accounting Estimates (effective 1 January
2023);
· Amendments to IAS 12: Income Taxes - Deferred Tax related to
Assets and Liabilities arising from a Single Transaction (effective 1 January
2023);
· Amendments to IAS 1 Presentation of Financial Statements:
Non-current Liabilities with Covenants (effective 1 January 2024);
· Amendments to IAS 12 International Tax Reform: Pillar Two Model
Rules (effective 1 January 2023);
· Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial
Instruments: Disclosures: Supplier Finance Arrangements (effective 1 January
2024);
· Amendments to IAS 21 The Effects of Changes in Foreign Exchange
Rate: Lack of Exchangeability (effective 1 January 2025).
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 Mineral Tenements and Exploration Property
Exploration licence and property acquisition costs are capitalised in
intangible assets. Licence costs, paid in connection with a right to explore
in an existing exploration area, are capitalised and held at cost. Licence and
property acquisition costs are reviewed at each reporting date to confirm that
there is no indication that the carrying amount exceeds the recoverable
amount. If no future activity is planned or the licence has been relinquished
or has expired, the carrying value of the licence and property acquisition
costs are written off through the statement of profit or loss and other
comprehensive income.
1.4.2 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.
1.4.3 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 is 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.
1.4.4 Taxation
Corporation tax payable is provided on taxable profits at the prevailing 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.
1.4.5 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
1.4.6 Non-Current Assets and Liabilities Classified as Held for
Sale and Discontinued Operations
A discontinued operation is a component of the Group that either has been
disposed of, or is classified as held for sale. A discontinued operation
represents a separate major line of the business. Profit or loss from
discontinued operations comprises the post-tax profit or loss of discontinued
operations and the post-tax gain or loss, recognised on the measurement to
fair value less costs to sell on the disposal group(s) constituting the
discontinued operation.
Non-current assets, classified as held for sale, are presented separately and
measured at the lower of their carrying amounts immediately prior to their
classification as held for sale and their fair value less costs to sell. Once
classified as held for sale, the assets are not subject to depreciation or
amortisation. See Note 22 for further details.
1.4.7 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"), the Angolan
Kwanza (''AOA'') and the US Dollar ("USD"). The Company's operations in
Angola are primarily conducted in 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.
1.4.8 Exploration Assets and Mineral Tenements
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.
1.4.9 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.
1.4.10 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 and warrants, granted to Directors and other
parties, 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. 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.
Where issued for services, fair value of services is used for determining the
value of options and if not determinable, a valuation model such as the
Black-Scholes model is used, 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. 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 and warrants), 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.
1.4.11 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.
1.4.12 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.
1.4.13 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 19.
1.4.14 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 and
qualifying as a business acquisition under IFRS 3, 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. Any acquisitions undertaken of interests, not
qualifying as a business under IFRS 3, is treated as an asset acquisition and
recognised at cost.
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.
1.4.15 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.
1.4.16 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.
1.4.17 Warrants and Share Options
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 holders of debt liabilities and issued together with
ordinary shares placement and share options issued to staff, are valued as
outlined above and charged to profit and loss over the period in which they
vest or, in the event of the instruments vesting on grant, in the period in
which they arise. Warrants and options, classified as equity instruments, are
not subsequently re-measured (i.e., subsequent changes in fair value are not
recognised). On expiry, exercise 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.
1.4.18 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.
1.4.19 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.
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; and
· 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.
1.4.20 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.
Recognition of Non Controlling Interest in APEX
In June 2023, the Company acquired a 90% interest in the equity of APEX in
Angola, which holds the KON-11, KON-12 and KON-16 oil and gas licences. The
commercial terms of at the acquisition are such that the remaining 10%
shareholders of APEX are carried through all exploration, appraisal and
development costs of the projects, essentially to the point of first oil. As
a consequence of this arrangement, Corcel is responsible for meeting 100% of
the funding requirements of APEX over this period.
The commercial intentions, behind the above legal agreement, was to achieve an
effective royalty arrangement, whereby the carried interest of the 10%
partners is realised through production revenues or, in this case net revenues
post production and corporate costs. However, it was determined that this
commercial end goal be achieved via a carried interest in equity rather than
the granting of a royalty interest.
The Company therefore considers that, whilst the legal structure of the
agreement is one of a 90/10 equity split, which primarily facie would give
rise to the recognition of NCI on consolidation of APEX, the commercial
substance of the arrangement more closely represents a profit royalty, arising
out of net production revenues. Consequently, it has not proposed to recognise
NCI on consolidation of the entity into the Group accounts with the amount
being immaterial.
Recoverability of Carrying Value of Joint Ventures and Exploration and
Evaluation Assets
The carrying amount of investments in joint ventures and mineral tenements 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 Company has assessed the viability of the Mambare nickel 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 following agreement during the year of terms for the disposal of the
investment. See below under heading "Assets Held for Sale - Oro Nickel" for
further details.
The Canegrass Lithium Project was purchased in April 2023 for £200,000 of new
ordinary shares in Corcel. The Company is currently conducting initial
exploration activities on the license and is currently considering its options
as relates to the project. The Company, following discussions with the
underlying tenement holders, Huntsman Exploration, have deemed it necessary to
impair the Canegrass Project in full as Huntsman intends to drop the tenements
and Corcel currently does not consider it possible to practically acquire
them. See Note 21 for further details.
The Group holds E&E assets of £7.7 million at 30 June 2024. Exploration
assets comprise exploration and evaluation costs, incurred on prospects at an
exploratory stage. These costs include the cost of acquisition of rights to
explore, 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. The most significant assumption for the Group is that exploration
and evaluation work undertaken to develop its key projects will ultimately
lead to successful recovery of these costs through production or sale. The
Group believes these costs are fully recoverable, based on information
available at this time.
The Company acquired the Mt. Weld Rare Earth Element project during the course
of the second half of 2022, and immediately entered into a farm out agreement
with Riversgold (ASX:RGL) ("RGL") for an immediate cash payment of AUD 30,000
and where RGL can earn a 50% interest through paying 100% of a work program
with a required spend of AUD 500,000 over 12 months. Subsequently, as
announced on 5 May 2023 the Company sold a 20% interest in Mt. Weld to
Extraction SRL for AUD 1,000,000, valuing the entirety at AUD 5 million and
Corcel's 80% interest at AUD 4 million (£3.29 million). During the year RGL
notified the Company of a rationalisation of its portfolio of projects,
resulting in its decision to discontinue work on the Mt Weld project. The
Company consequently retains its 80% interest in the project and is current
assessing its options to take the project forward in 2025.
Recoverability of Carrying Value of Investment In and Loan 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.
When assessing the recovery of these balances, the Directors consider the
likelihood that the subsidiaries will be able to settle amounts owing, either
out of future cashflows or though the recovery of balances receivable or
divestment of assets. Where recovery of these balances is driven by
receivable balances within the subsidiary, assessment of the likelihood of
recovery and present value of future cash inflows is undertaken to ensure the
amounts support the subsidiary loan carrying values in full.
No impairment of inter-company loans were deemed necessary in the year.
Determination of Fair Value of Share-Based Payments
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 without market based vesting conditions is
determined using the Black-Scholes model and the estimates used within this
model are disclosed in Note 17. Where market conditions exist for the
vesting of any options or warrants granted, alternative approaches such as a
probability weighted barrier model or Monte Carlo probability distribution
model is used.
Consideration Receivable on Disposal of Niugini Nickel
During the prior year, the Group divested of its subsidiary Niugini Nickel Pty
Ltd. Consideration for the disposal is receivable in three tranches, see
Note 22 for details. In arriving at determination of the fair value of the
consideration receivable, the Directors have had to make certain judgements as
to the discount rate to use for the present valuing of future cashflows,
arising from this consideration and the application of a risk, weighting to
the determination of fair value for the tranche of consideration that remains
conditional on the project, entering into production and generating a certain
level of profits. Management have assessed the recoverability of the
receivable and no risks have been identified.
Recoverability of Assets Held for Sale - Oro Nickel
During the prior year, the Group had entered into various discussions for the
divestment of its interest in the Oro Nickel joint venture. On 16 October
2023, the Group announced the agreement of a deal to sell its share of the
project to Integrated Battery Metals, the purchasers of the Niugini Nickel
project during the course of the year. As the consideration proceeds agreed
with the purchaser exceed the carrying value of the investment in the joint
venture, which is held for sale, the Directors have determined that no
impairment of this balance is necessary in these consolidated Financial
Statements (with an impairment of £175,000 being recognised in the Company
only Financial Statements as a result of the discounting of the present value
of the consideration). On 23 October 2023, the initial consideration proceeds
of USD 1.6 million, in the form of a loan for the divestment were received,
following the execution of the transaction agreements. Management have
assessed the recoverability of the receivable and no risks have been
identified.
The Company is assessing various spurious claims made by its Joint Venture
partner as regards to the project, including their purported rights to
pre-empt the transaction under an earlier version of the sale of the project
as originally announced on 14 April 2023 and terminated in October 2023.
Currently, the Company is working with Australian legal counsel on determining
the best manner in which to enforce its rights to complete this transaction as
announced on 16 October 2023. The completion of the sale of this asset
requires Joint Venture partner's administrative actions and processing in
order to effect the transfer of shares in the holding company of the project.
Final determination of both the timing of any disposal and of the ultimate
sale proceeds realised by the Company thus remain yet to be definitively
determined.
Refer to Note 24 for further information on how the criteria within IFRS 5
have been met to classify the investment as held for sale at the year end.
2. Segmental Analysis
In 2023, the focus of the Group changed from the development of battery metals
projects and flexible storage solutions to oil and gas exploration and
production. As a consequence, the nature of the operating segments for
disclosure has changed in the current year to include oil and gas activities
and exclude flexible grid solutions, to reflect this operational tilt toward
the former and away from the latter.
As the Group's main focus of operations becomes production of oil and gas, 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 2024 Battery Metals Oil Corporate Total
£'000 and Gas and £'000
£'000 unallocated
£'000
Management services - - 42 42
Other income - 1 1 2
Project expenses (19) (126) - (145)
Administrative expenses (9) (42) (2,520) (2,571)
Currency (loss)/gain (9) - 23 14
Impairment of Joint venture projects (221) - - (221)
Finance cost - net 90 - (219) (129)
Net loss before tax from continuing operations (168) (167) (2,454) (3,008)
Year to 30 June 2023 Battery Metals Flexible Grid Solutions Corporate Total
£'000 (UK) and £'000
£'000 unallocated
£'000
Management services - - 8 8
Other income - - 17 17
Project expenses (114) - - (114)
Administrative expenses (55) (28) (1,360) (1,443)
Currency (loss)/gain (7) - (5) (12)
Share of profits in joint ventures (76) - - (76)
Gain on sale of tenements 475 - - 475
Gain on sale of Joint venture projects and associates 384 - - 384
Gain on sale of subsidiaries 41 246 - 287
Impairment of Joint venture projects (337) - - (337)
Finance cost - net - - (451) (451)
Net loss before tax from continuing operations 311 218 (1,791) (1,262)
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 2024 UK Australia Papua Total
£'000 £'000 New Guinea Africa £'000
£'000 £'000
Revenue 42 - - - 42
Total segment revenue and other gains 42 - - - 42
Non-current assets
Property, plant and equipment - - - 8 8
Exploration & evaluation assets - 184 - 7,529 7,713
Receivable from sale of subsidiary - 173 - - 173
FVTOCI financial instruments 1 - - - 1
Total segment non-current assets 1 357 - 7,537 7,895
Year to 30 June 2023 UK Australia Papua Total
£'000 £'000 New Guinea Africa £'000
£'000 £'000
Revenue 8 - - - 8
Total segment revenue and other gains 8 - - - 8
Non-current assets
Property, plant and equipment 1 - - - 1
Exploration & evaluation assets - 392 - 1,622 2,014
Receivable from a joint venture - - 1,517 - 1,517
Receivable from sale of subsidiary - - 714 - 714
FVTOCI financial instruments 1 - - - 1
Total segment non-current assets 2 392 2,231 1,622 4,247
3. Loss on Ordinary Activities Before Taxation
Group 2024 2023
£'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 46 42
Company Financial Statements
Directors' emoluments (Note 8) 448 632
4. Administrative Expenses
Group Group Company Company
2024 2023 2024 2023
£'000 £'000 £'000 £'000
Staff costs
Payroll 816 498 807 498
Pension 24 27 23 27
Share-based payments 227 63 227 63
Staff Welfare 3 3 3 3
Employers NI 79 86 79 86
Professional services
Accounting 109 106 106 87
Legal 25 65 25 54
Business development 105 12 105 12
Marketing & Investor relations 81 32 81 32
Funding costs 347 94 347 94
Other 113 83 113 44
Regulatory compliance 145 125 145 125
Travel 283 60 283 60
Office and Admin
General 90 43 84 35
IT costs 8 8 9 8
Rent 33 29 32 29
Insurance 84 108 84 106
Total administrative expenses 2,572 1,442 2,553 1,363
5. Finance Costs, Net
Group 2024 2023
£'000 £'000
Interest expense (7) (123)
Share based payments - investors (122) (328)
(129) (451)
6. Taxation
2024 2023
£'000 £'000
Current period transaction of the Group
Corporation tax at blended rate of 20.00% (2022: 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 (3,008) (1,262)
Loss on ordinary activities at the average blended rate of 20% (2022: 19.00%) (602) (240)
Effect of non-deductible expense 120 75
Effect of tax benefit of losses carried forward 482 164
Tax losses brought forward - -
Current tax (credit) - -
Deferred tax amounting to £nil (2023: £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 and capital losses are
estimated at circa £4,309 thousand (2023: £3,827).
On 6 April 2023, the UK corporation tax rate increased from 19% to 25%,
affecting approx. 25% of the losses for the year of report. The Company and
the Group has elected not to apply a blended rate to the above calculations of
current tax on the grounds that any such adjustment would be immaterial.
7. Staff Costs
The aggregate employment costs of staff for the Group (including Directors)
for the year was:
2024 2023
£'000 £'000
Wages and salaries 807 534
Pension 24 27
Social security costs, net of allowances 80 87
Medical costs 3 3
Employee share-based payment charge 227 63
Total staff costs 1,141 714
The average number of Group employees (including Directors) during the year
was:
2024 2023
Number Number
Directors 4 3
Executives 2 2
Administration 2 1
8 6
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
2024 Directors' Share Incentive Plan Short term benefits Total
fees £'000 Pension £'000 £'000
£'000 Bonus contributions
£'000 £'000
Executive Directors
J Parsons* 191 - - 10 - 201
G Geraldo 31 - - 3 - 34
S Gilbert 22 - - - - 22
A Karam 80 - - - - 80
Non-executive Directors
E Ainsworth 29 - - - - 29
A Fairclough 21 - - - - 21
Y Zhao 40 - - - - 40
P Kabra 21 - - - - 21
435 - - 13 - 448
2023 Directors' Share Incentive Plan Short term benefits Total
fees £'000 Pension £'000 £'000
£'000 Bonus contributions
£'000 £'000
Executive Directors
J Parsons* 253 30 - 19 - 302
S Kaintz 182 35 2 17 - 236
A Karam 4 - - - - 4
Non-executive Directors
E Ainsworth 42 - - - - 42
H Bellingham 37 10 - - - 47
Y Zhao 2 - - - - 2
520 75 2 36 - 633
* 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 (2023:
nil).
During the year, the Company contributed to a Share Incentive Plan, more fully
described in the Directors' Report on page 20, where shares were issued to
employees, making a total of 3,556,362 (2023: 3,506,490) 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 on page 23.
188,943,480 options were granted to Directors in the current year. No options
were granted in the prior year.
2024 Number of Options Grant date Expiry date
Exercise price (pence)
Executive Directors
A Karam 125,962,320 0.1p 11 January 2024 12 January 2029
G Geraldo 31,490,580 0.1p 11 January 2024 12 January 2029
Non-executive Directors
P Kabra 31,490,580 0.1p 11 January 2024 12 January 2029
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.
2024 2023
Loss attributable to equity holders of the Parent Company, £'000 (3,035) (1,262)
Weighted average number of ordinary shares of £0.0001 in issue, used for 1,711,966,625 714,863,518
basic EPS
Earnings per share - basic, pence (0.2) (0.2)
Earnings per share - fully diluted, pence (0.2) (0.2)
At 30 June 2024 and at 30 June 2023, 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:
2024 2023
(a) Share options granted to employees - total, of them 333,720,567 26,687,412
· Vested at the end of reporting period 6,081,134 -
· Not vested at the end of the reporting period 327,639,433 26,687,412
(b) Number of warrants in issue 461,552,900 511,942,464
Total number of contingently issuable shares that could potentially dilute 795,273,467 538,629,876
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 2024, 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
2024 2023 2024 2023
£ £ £'000 £'000
Cost
At 1 July 1,980 1,014 - 131
Additions (Note 23) - 966 - -
At 30 June 2024 and 30 June 2023 1,980 1,980 - 131
Impairment
At 30 June 2024 and 30 June 2023 - - - (131)
Net book amount at 30 June 2024 1,980 1,980 - -
Net book amount at 30 June 2023 1,980 1,980 - -
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
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% Dormant
through ESTEQ Limited))I
Atlas Petroleum Exploration Worldwide Limited BVI Ordinary 90% Oil and gas exploration
Atlas Petroleum Exploration Worldwide - Sucursal Em Angola AO Ordinary 100% Oil and gas exploration
Corcel Australasia Pty Limited 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.
Atlas Petroleum Exploration Worldwide Limited registered office is Simmonds
Building, Wickam's Cay 1, P.O Box 961, Road Town, Tortola, BVI.
Atlas Petroleum Exploration Worldwide, - Sucursal Em Angola with registered
office at Escritório 72, 7 Andar Edifício Galáxia, Rua Amílcar Cabral,
Município das Ingombotas, Luanda, Angola
Niugini Nickel Pty Ltd
On 26 June 2023, the Group disposed of its 100% interest in Niugini Nickel Pty
Ltd. See Note 22 for further details. Disposal of the subsidiary in the
prior year gave rise to a gain of £41,000.
11. Investments in Associates and Joint Ventures
Group Company
Carrying balance £'000 £'000
At 1 July 2022 1,988 2,112
Additions - -
Share of loss in joint venture (76) -
Impairment of investment in associate (337) (337)
Transfer to assets held for sale (Note 24)* (1,575) (1,775)
Net book amount at 30 June 2023 and 30 June 2024 - -
*During the prior year the Group undertook the decision to dispose of its JV
interests in Oro Nickel. Consequently it has been reclassified as assets
held for sale in the prior year and remains held as assets held for sale at
the end of the current year, pending finalisation of the disposal process.
See Note 24 for further details.
At 30 June 2024, 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 2023 Group at 30 June 2022 Status at
30 June 2023
Direct
Oro Nickel Ltd (Held indirectly through Papua New Guinea Ordinary 41% 41% 30 June 2024
Oro Nickel Vanuatu) (Joint Venture)
Active
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.
Summarised financial information for the Company's associates and joint
ventures, where available, is given below for the year as at 30 June 2024:
Company Revenue Loss Assets Liabilities Net Assets
£'000 £'000 £'000 £'000 £'000
Oro Nickel Ltd - (184) 4,683 (4,219) 464
Oro Nickel DVY196 Total Group
Carrying balance £'000 £'000 £'000
At 30 June 2023 and 2024 - - -
12. Financial Instruments with Fair Value through Other
Comprehensive Income (FVTOCI)
30 June 2024 30 June 2023 30 June 2024 30 June 2023
Group Group Company Company
£'000 £'000 £'000 £'000
FVTOCI financial instruments at the beginning of the period 1 1 1 1
Transferred from Available-for-sale category - - - -
Additions - - - -
Disposals - - - -
Revaluations and impairment - - - -
FVTOCI financial assets at the end of the period 1 1 1 1
Market Value of Investments
The market value as at 30 June 2024 of the investments', available for sale
listed and unlisted investments, was as follows:
30 June 2024 30 June 2023 30 June 2024 30 June 2023
Group Group Company Company
£'000 £'000 £'000 £'000
Quoted on other foreign stock exchanges 1 1 1 1
At 30 June 1 1 1 1
13. Trade and Other Receivables
Group Company
2024 2023 2024 2023
£ £ £ £
Non-current
Amounts owed by Group undertakings - - 3,882 286
Purchased debt - - - -
Amounts owed by related parties
- due from associates and joint ventures - 1,517 - 1,517
- due from sale of subsidiary 173 714 - -
Total non-current 173 2,231 3,882 1,803
Current
Sundry debtors 203 371 187 64
Prepaid directors fees - J Parsons - 79 - 79
Prepayments 78 168 78 174
Debt from issue of shares - 136 - 136
Amounts owed by related parties
- due from sale of subsidiary 636 - - -
Total current 917 754 265 453
14. Trade and Other Payables
Group Company
2024 2023 2024 2023
£ £ £ £
Trade and other payables 4,786 177 1,808 213
Accruals 54 538 54 252
Trade and other payables 4,840 715 1,862 465
Loans from subsidiaries - - 322 -
Borrowings (note 20) 1,330 602 1,330 602
Total 6,170 1,317 3,514 1,067
The increase in trade and other payables in the year arise from the
undertaking of drilling activity on the KON-11 and KON-12 licences in
Angola. Consolidated trade payables includes all costs, incurred but not
settled, in support of this activity, whereas Company only trade and other
payables includes only those costs, which have been recognised by the Parent
Company on behalf of the subsidiary Atlas Petroleum.
Borrowings in the year take the form of a loan from Integrated Battery Metals
(IBM). The loan is interest free and repayable out of the proceeds from
completion of the proposed sale of the Mambare JV to IBM or in cash by 14
October 2025 (being the earlier of the two events).
Short Term Borrowings Maturity
2024 2023
£'000 £'000
14 October 2025 (see above re IBM loan) 1,265 -
31 January 2025 65 -
30 September 2024 - 547
Due by 31 January 2024 - 55
Total long-term borrowings 1,330 602
YA PN II - Riverfort
In the current year, £390,749 of the principle was repaid by the Company in
cash and £200,000 of the principal was converted into ordinary shares of the
Company, fully retiring all outstanding obligations.
CLN - Extraction SRL
During the year, Extraction SRL provided funding of £1,000,000, which
included interest of £47,836 in the year all of which was repaid via
converted shares in the Company.
More details on all the borrowing are given in Note 25.
15. Reserves
Share Premium
The share premium account represents the excess of consideration received for
shares, issued above their nominal value net of transaction costs.
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.
16. 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 2024 2023
£'000 £'000
2,458,300,515 ordinary shares of £0.0001 each (2023: 1,344,381,984) 246 135
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 2,953 2,842
Movement in ordinary shares Number
Nominal, £ Share Premium, £
As at 30 June 2022 - ordinary shares of £0.0100 each 440,878,296 44,089 24,961,184
Issued on 27 July 2022 at £0.004 per share (cash placing) 84,000,000 8,400 302,234
Issued on 22 August 2022 at £0.004 (cash placing) 5,330,000 533 20,787
Issued on 31 October 2022 at £0.004 per share (cash placing) 50,000,000 5,000 195,000
Issued on 23 December 2022 at £0.004 per share (non-cash acquisition of 50,000,000 5,000 195,000
asset)
Issued on 4 January 2023 at £0.004 per share (cash placing) 116,500,000 11,650 454,350
Issued on 5 January 2023 at £0.004 per share (non-cash creditor settlement) 5,000,000 500 19,500
Issued on 5 January 2023 at £0.00210003 per share (non-cash creditor 37,028,094 3,703 74,057
settlement))
Issued on 3 February 2023 at £0.0026 per share (non- cash salary settlement) 16,910,618 1,691 42,277
Issued on 20 April 2023 at £0.0035 per share (cash placing) 85,714,185 8,572 291,429
Issued on 9 May 2023 at £0.004 per share (non-cash acquisition of asset) 50,000,000 5,000 195,000
Issued on 5 June 2023 at £0.00385 per share (non- cash SIP) 1,870,128 187 7,013
Issued on 5 June 2023 at £0.0033 per share (non- cash SIP) 1,636,362 164 5,236
Issued on 6 June 2023 at £0.004 per share (non-cash acquisition of asset) 28,240,839 2,824 110,139
Issued on 6 June at £0.0033 per share (non-cash acquisition of asset) 200,000,000 20,000 640,000
Issued on 6 June at £0.004 per share (non-cash acquisition of asset) 70,685,250 7069 275,672
Issued on 9 June 2023 at £0.0035 per share (cash placing) 85,714,285 8,571 291,429
Issued on 20 June 2023 at £0.004 per share (non- cash salary settlement) 14,873,828 1,487 58,008
As at 30 June 2023 - ordinary shares of £0.0100 each 1,344,381,885 134,440 28,138,315
Issued on 6 July 2023 at £0.0035 per share (cash placing) 130,147,004 13,015 442,500
Issued on 18 September 2023 at £0.004 per share (non-cash creditor 25,000,000 2,500 97,500
settlement)
Issued on 27 September 2023 at £0.004 per share (non-cash creditor 25,000,000 2,500 97,500
settlement)
Issued on 27 September 2023 at £0.0021 per share (cash placing) 75,000,000 7,500 150,000
Issued on 28 December 2023 at £0.0021 per share (cash placing) 39,285,714 3,928 78,571
Issued on 1 January 2024 at £0.008 per share (non-cash creditor settlement) 32,061,643 3,206 253,287
Issued on 8 January 2024 at £0.0035 per share (cash placing) 5,000,000 500 17,000
Issued on 29 February 2024 at £0.008 per share (non- cash creditor 98,917,808 9,892 781,451
settlement)
Issued on 5 March 2024 at £0.0021 per share (cash placing) 100,000,000 10,000 200,000
Issued on 8 April 2024 at £0.005 per share (cash placing) 79,950,000 7,995 391,755
Issued on 24 May 2024 at £0.00375 per share (non- cash SIP) 1,920,000 192 7,008
Issued on 24 May 2024 at £0.0033 per share (non- cash SIP) 1,636,362 164 5,236
Issued on 14 June 2024 at £0.001 per share (cash placing) 350,000,000 35,000 315,000
Issued on 14 June 2024 at £0.001 per share (cash placing) 150,000,000 15,000 135,000
As at 30 June 2024 - ordinary shares of £0.0100 each 2,458,300,416 245,832 31,110,123
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.
Warrants
At 30 June 2024, the Company had 461,552,900 warrants in issue (2023:
511,942,464) with exercise prices ranging £0.004-£0.25 (2023:
£0.004-£0.25). The weighted average remaining life of the warrants at 30
June 2024 was 437 days (2023: 482 days).
Details related to valuation of all warrants are disclosed below.
2024 2023
Group and Company number of warrants number of
warrants
Outstanding at the beginning of the period 511,942,464 171,999,329
Granted during the period 291,052,900 444,582,214
Exercised during the period (219,285,714) -
Lapsed during the period (122,156,750) (104,639,079)
Outstanding at the end of the period 461,552,900 511,942,464
At 30 June 2024, the Company had the following warrants to subscribe for
shares in issue:
Warrant exercise price Number of post consolidation warrants
Grant date Expiry date
17 July 2019 1 July 2024 £0.25 200,000
14 Dec 2021 13 December 2024 £0.015 3,800,000
17 Oct 2022 16 Oct 2025 £0.004 50,000,000
20 Dec 2022 20 Dec 2025 £0.004 116,500,000
1 Jan 2024 25 April 2025 £0.008 211,102,900
8 April 2024 8 April 2026 £0.010 39,975,000
9 April 2024 9 April 2026 £0.010 39,975,000
Total warrants in issue at 30 June 2024 461,552,900
The aggregate fair value recognised in warrants reserve in relation to the
share warrants, granted during the reporting period was £122,294 (2022:
£327,660) and has been recognised in finance costs during the year.
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:
Warrant exercise price, £ Share price at the grant date, (p) UK risk-free rate at the date of grant, %
Number of warrants Warrant life, years FV of 1 warrant, £ FV of all warrants, £
Volatility, %
Grant date Expiry date
1 Jan 24 25 April 25 211,102,900 2 0.008 0.335 3.7510 58.79 0.0004 74,968
8 April 24 8 April 25 39,975,000 2 0.010 0.425 4.2260 64.55 0.0006 23,789
9 April 24 9 April 25 39,975,000 2 0.010 0.425 4.1920 64.29 0.0006 23,537
Total at 30 June 2024 291,052,900 122,294
Expected volatility values, used in the calculation of fair value for options
and warrants, have been determined by reference to the historical volatility
of the Company over the same backward looking period as the expected exercise
period of the option or warrant on the date of grant.
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.
17. 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 2024, the Company had outstanding options to subscribe for
post-consolidation Ordinary shares as follows:
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 Options issued 11 January 2024 exercisable at £0.001 per share, expiring on Total
5 December 2024 31 January 2025 27 February 2027 12 January 2029
Number
S Gilbert - - - 31,490,580 31,490,580
G Geraldo - - - 31,490,580 31,490,580
P Kabra - - - 31,490,580 31,490,580
A Karam - - - 125,962,320 125,962,320
E Ainsworth - - 2,805,942 - 2,805,942
Employees 3,040,567 3,040,567 17,800,336 86,599,095 110,480,565
Total 3,040,567 3,040,567 20,606,278 307,033,155 333,720,567
2024 2023
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 26,687,412 0.0195 26,783,412 0.022
Granted during the year 307,033,155 0.0001 - -
Lapsed during the period - - (96,000) 0.008
Outstanding at the end of the period 333,720,567 0.0017 26,687,412 0.0195
The exercise price of options outstanding at 30 June 2024 and 30 June 2023,
ranged between £0.0001 and £0.80. Their weighted average contractual life
was 4.35 years (2023: 4.176 years).
As the vesting conditions for the options granted in the year were based on
market conditions, the Monte-Carlo valuation model has been used to determine
the vesting period and probability of the vesting conditions to provide a fair
value based off the results calculated by the model. The probabilities are
53%, 27% and 15% for T1, T2 and T3 respectfully and the vesting periods are
1.72 years, 3.3 years and 4.45 years for T1, T2 and T3 respectfully.
Of the total number of options outstanding at 30 June 2024, 6,081,134 (2023:
nil) had vested and were exercisable. The weighted average share price (at the
date of exercise) of options, exercised during the year, was nil (2023: nil)
as no options were exercised during the reporting year (2023: nil).
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 £217,000 (2023: £52,167).
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 3,556,362 free, matching and partnership
shares were awarded (2023: 3,506,490), resulting in a share-based payment
charge of £10,800 (2023: £10,800), included into administrative expenses
line in the Consolidated Income Statement.
18. Cash and Cash Equivalents
Group 30 June 30 June
2024 2023
£'000 £'000
Cash in hand and at bank 268 257
Company 30 June 30 June
2024 2023
£'000 £'000
Cash in hand and at bank 89 256
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.
19. Financial Instruments
19.1 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 2024 2023
30 June
£'000 £'000
Financial assets
Fair value through other comprehensive income financial assets
Quoted equity shares (Note 12) 1 1
Total financial assets carried at fair value, valued at observable market 1 1
price
Cash and cash equivalents 268 257
Loans and receivables
Receivable from JVs - 1,517
Receivable from sale of subsidiary 809 714
Other receivables 281 754
Total financial assets held at amortised cost 1,090 2,985
Total financial assets 1,358 3,243
Total current 1,185 1,011
Total non-current 173 2,232
Company 2024 2023
30 June
£'000 £'000
Financial assets
Fair value through other comprehensive income financial assets
Quoted equity shares 1 1
Total FVTOCI financial assets 1 1
Fair value through profit and loss financial assets
Investments in a project of a private entity - -
Total financial assets carried at fair value, valued using valuation -
techniques
Cash and cash equivalents 89 256
Loans and receivables
Receivable from JVs - 1,517
Receivable from subsidiaries 3,882 287
Other receivables 265 453
Total financial assets held at amortised cost 4,147 2,257
Total financial assets 4,236 2,514
Total current 354 709
Total non-current 3,882 1,805
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:
2024 2023
Group £'000 £'000
30 June
Financial liabilities at amortised cost
Loans and borrowings
Trade and other payables 4,840 715
Borrowings 1,330 602
Total financial liabilities 6,170 1,317
2024 2023
Company £'000 £'000
30 June
Financial liabilities at amortised cost
Loans and borrowings
Trade and other payables 2,184 715
Borrowings 1,330 602
Total financial liabilities 3,514 1,317
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 the principal owing and accrued interest as at the reporting date.
The loans are due in January 2025 and October 2025 and impact of discounting
the present value of future cashflows is immaterial and, therefore, not
included into the valuation. See Note 14 for further detail.
19.2 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 2024
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 2023
Financial assets at fair value through other comprehensive income 1 - - 1
- Quoted equity shares
Financial assets at fair value through profit and loss - - - -
19.3 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 13.
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, United Stated Dollars, Papua New Guinea Kina and United
Kingdom Pounds 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 AOA Total
30 June 2024
£'000 £'000 £'000 £'000 £'000 £'000
Cash and cash equivalents 89 1 - - 178 268
Amortised cost financial assets - Other receivables 265 - 636 - 16 917
FVTOCI financial assets - - - 1 - 1
Amortised costs financial assets - Non-current receivables - - 173 - - 173
Trade and other payables, excluding accruals 407 - 4,379 - - 4,786
Short-term borrowings - - 1,330 - - 1,330
Group GBP AUD USD CAD Total
30 June 2023
£'000 £'000 £'000 £'000 £'000
Cash and cash equivalents 257 - - - 257
Amortised cost financial assets - Other receivables 452 302 - - 754
FVTOCI financial assets - - - 1 1
Amortised costs financial assets - Non-current receivables 2,231 - - - 2,231
Trade and other payables, excluding accruals 177 - - - 177
Short-term borrowings 602 - - - 602
Company GBP AUD USD CAD Total
30 June 2024
£'000 £'000 £'000 £'000 £'000
Cash and cash equivalents 89 - - - 89
Amortised cost financial assets - Other receivables 265 - - - 265
FVTOCI financial assets - - - 1 1
Trade and other payables, excluding accruals 443 - 1,365 - 1,808
Loans from subsidiaries 322 - - - 322
Short-term borrowings - - 1,330 - 1,330
Company GBP AUD USD CAD Total
30 June 2023
£'000 £'000 £'000 £'000 £'000
Cash and cash equivalents 256 - - - 256
Amortised cost financial assets - Other receivables 453 - - - 453
FVTOCI financial assets - - - 1 1
Amortised costs financial assets - Non-current receivables 1,517 - - - 1,517
Trade and other payables, excluding accruals 465 - - - 465
Short-term borrowings 602 - - - 602
Exposures to foreign exchange rates vary during the year, depending on the
volume and nature of overseas transactions.
20 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 2023 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 2024
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
IBM loan - 1,257 - - 8 - - - 1,265
CLN Extraction SRL - 1,000 - (1,048) - 48 - - -
C4 / Riverfort Capital and YA II PN Ltd loan 547 - - (200) - 44 (391) - -
Premium Credit Finance 55 87 - - - 3 (80) - 65
Total 602 2,344 - (1,248) 8 95 (471) - 1,330
Significant non-cash transactions from financing activities in relation to
raising new capital are disclosed in Note 16.
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 (share-based payments in the form of options
and warrants), in the amount of £10,800 (2023: £10,800), disclosed in Notes
16 and 17;
· Prepayment of £79,000 of salary to James Parsons through the
issuance of ordinary shares of the same value in the prior year, which have
been expensed in the current year within Administrative expenses;
· Share settled transactions to settle loan balances £1,247,836
(2022: £97,760).
· Extraction SRL converted £1,047,836 at a price of £0.008 for
130,979,451 Ordinary shares. A related party transaction as a result of having
a common director.
21 Exploration & Evaluation Assets and Mineral Tenements
Movements in exploration & evaluation assets and mineral tenements in the
year were as follows:
Group Wowo Gap Mt Weld Canegrass APEX Total
30 June 2024
GBP GBP GBP GBP £'000
£'000 £'000 £'000 £'000
B/f - 172 220 1,622 2,014
Impairment of mineral rights assets - - (220) - (220)
Additions in the year - 12 - 5,907 5,919
c/f - 184 - 7,529 7,713
Group Wowo Gap Mt Weld Canegrass APEX Total
30 June 2023
GBP GBP GBP GBP £'000
£'000 £'000 £'000 £'000
B/f 1,026 - - - 1,026
Acquisitions of new licences/tenements - 215 220 - 435
Disposal of derecognition of subsidiaries (1,026) - - - (1,026)
Acquired on business combination - - - 966 966
Additions in the year - - - 656 656
Partial disposal on farmout of tenements - (43) - - (43)
c/f - 172 220 1,622 2,014
Company Mt Weld Canegrass Total
30 June 2024
GBP GBP £'000
£'000 £'000
B/f 172 220 392
Impairment of mineral rights assets - (220) (220)
Additions in the year 12 - 12
c/f 184 - 184
Company Mt Weld Canegrass Total
30 June 2023
GBP GBP £'000
£'000 £'000
B/f - - -
Acquisitions of new licences/tenements 215 220 435
Partial disposal on farmout of tenements (43) - (43)
c/f 172 220 392
The total value of mineral tenements at the year-end for the Group and Company
was £184,000 (2023: £392,000) and the total value of Exploration and
evaluation assets at the year end for the Group was £7,529,000(2023:
£2,014,000) and for the Company was £nil (2023: £nil).
22 Discontinued Operations
On 16 October 2023, the Group announced an agreement with Integrated Battery
Metals (the Purchaser) for the disposal of its 41% interest in the Mambare
nickel/cobalt project held via its interest in Oro Nickel Ltd, following
extensive discussions with the Purchaser over the course of the financial year
ended 30 June 2023. The Group then notified its partner in the joint venture
of the receipt of a bonafide offer for its interest, which started a 45-day
period in which the partner was able to legally pre-empt the transaction. This
pre-emption period subsequently expired with no notification of pre-emption
from the joint venture partner. The Company further requested and received
shareholder approval for the sale in December of 2023 at a General Meeting of
the Company.
Following the pre-emption period, the Company has taken legal advice and has
been advised to attempt to complete the sale of its interest to Integrated
Battery Metals, a process, which requires multiple inputs and actions from the
joint venture partner, which to date have not been forthcoming. The Company is
currently exploring its options as to how best to complete the transaction as
previously announced.
Under IFRS 5, the interest in Oro Nickel Ltd is classified as an Asset Held
for Sale, as the Directors had made a definitive determination to dispose of
the asset prior to the reporting date of these Financial Statements. As
such, the carrying value of the investment £1,459,000 (2023: £1,575,000) was
reclassified as held for sale in the prior year. In the prior year, the loan
receivable from the JV of £1,516,000 was considered recoverable separately
from the proposed sale of the JV equity interest and so was retained as a loan
receivable in the prior year Financial Statements. In October 2023, a revised
proposal for the sale of the JV interest was agreed with the purchaser, giving
rise to the assessment that the loan receivable from the JV would now be
recovered via the sale of the JV equity interests to the purchaser under these
new deal terms. As a consequence, the loan receivable from the JV of
£1,516,000 (2023: £1,516,000) has also been reclassified in the current year
as forming part of the asset held for sale, giving rise to a total carrying
value of assets held for sale of £2,975,000 (2023: £1,575,000). The same
reclassification of the investment in JV in the prior year and loans to the JV
in the current year has been undertaken in the Company only Financial
Statements, with the year end carrying value of assets held for sale
consequently being £3,000,000 (2023: £1,775,000).
In the Company only Financial Statements, an impairment of £175,000 has been
recognised in regard to the carrying value of the asset held for sale in the
to align the carrying value to the present value of the expected transaction
proceeds. The total carrying value of the asset held for sale in the Company
only Financial Statements is £2,999,846 (2023: £1,775,000) The Group's loss
for the year for discontinued operations is £26,746 (2023: £nil) and the
Company's loss for the year for discontinued operations is £201,530 (2023:
£nil).
Cashflows, arising from discontinued operations in the year amount, to
£16,000 of legal fees paid in support of the transaction settlement process
(2023: £nil).
23 Significant Agreements and Transactions
Financing
· On 11 October 2023, the Company entered into a subscription
agreement with Extraction SRL for up to £10,000,000 Convertible Bonds,
resulting in the initial drawdown of £1,000,000 in convertible loan notes on
the agreement date. Subsequent to this, in the year, the full amount plus
interest was converted at a price of £0.008 per share for a total of
130,979,451 Ordinary shares. On 15 April 2024, the Company announced the
termination of the remaining facility, with all amounts having been fully
settled via conversions in the year.
· On 19 September 2023, the Company announced the conversion of
£100,000 of outstanding convertible loan notes into 25 million ordinary
shares.
· On 15 April 2024, the Company announced the placing of 259.95
million new ordinary shares at £0.005 per share to raise approx. £1.3
million in gross funding proceeds. Settlement of the placing took place in two
tranches, with Tranche 1 (£800,000) taking place on 13 May 2024 and Tranche 2
(£500,000) taking place following the Company AGM. On 17 June 2024, the
Company announced that the Tranche 2 fundraising would be re-placed to
alternative investors at a price of £0.001 per share, raising £500,000 in
gross funds via the allotment of 500 million new ordinary shares
Battery Metals Joint Venture
· On 16 October 2023, the Company announced it had received a
revised offer from Integrated Battery Metals ("IBM") for the purchase of
Corcel's 41% interest in the Mambare Nickel project, held via its interest in
Oro Nickel Limited, the Joint Venture vehicle. The key terms of the revised
offer were:
- USD 1.6 million in cash, payable on completion of the sale of
Corcel's 41% interest in the JV vehicle;
- USD 1.4 million in cash or fully paid ordinary shares in IBM (at
the election of Corcel), payable on completion of the sale of Corcel's 41%
interest in the JV vehicle;
- USD 1.0 million in cash or fully paid ordinary shares in IBM (at
the election of Corcel), payable 24 months after completion of the sale of
Corcel's 41% interest in the JV vehicle;
- USD 148,000 payable immediately to Corcel for the sale of its
gross smelter royalty interest in the Mambare project (held as a separate
interest to the Company's 41% equity interest in the project).
· As part of the terms of the above disposal, IBM further agreed to
provide the Company with a USD 1.6 million loan (interest free), to be settled
on completion of the above transaction, following the waiving of the
pre-emption rights, held by Corcel's JV partner Battery Metals Australia
("BMA"). In the event that BMA elected to exercise its pre-emption rights,
then the loan is to be settled on completion of the sale of the Company's
interests in the JV to BMA.
· Completion of the above disposal agreement with IBM remains
pending completion of discussions regarding BMA's pre-emption rights under the
JV agreement.
Mt. Weld Rare Earth Element Project
· On 4 January 2023, the Company announced that had agreed a
farm-out with Riversgold Ltd (ASX:RGL), covering its rare earth element
project at Mt. Weld. The transaction consisted of a AUD 30,000 immediate
payment to Corcel, with RGL agreeing to fund a AUD 500,000 work programme over
the next year in exchange for a 50% interest in the project. CRCL further
had the right but not the obligation to allow the farm-in of a further 20% for
an additional AUD 1,000,000 in a subsequent period.
· On 5 May 2023, the Company announced that it had sold a 20%
interest in the Mt. Weld Rare Earth Element Project to Extraction SRL, a
private Italian company, controlled by Mr. Antoine Karam, for cash
consideration of AUD 1,000,000, payable by 31 May 2023. Extraction SRL is a
shareholder of Corcel, having held 9.61% and Mr. Karam was expected to join
the Board of Corcel, following perfunctory regulatory checks. Riversgold
agreed to waive its pre-emption rights over the sale of this interest and
Extraction SRL would then become a party to original joint venture agreement.
The 20% interest in Mt. Weld being sold was held in the Company's interim
accounts balance sheet at £43,000, leaving a net profit after costs on
disposal of approximately £475,472.
· On 28 March 2024, the Company announced that Riversgold,
following a review of its project portfolio to determine strategic fit with
its corporate objectives, had elected to withdraw from the earn-in agreement,
with Corcel's interest in the project reverting to 80% following this
election. The Company has determined that the strategic nature of the decision
to withdraw from the project, which involved a focusing of the Riversgold
business on lithium assets, does not give rise to an indication of impairment
of the asset. The Company is assessing its options for further development of
the project.
Canegrass Lithium Project
· On 18 March 2024, the Company announced the results of initial
exploration/evaluation work on its 100% owned Canegrass project, noting the
presence of Lithium, Vanadium and Nickel bearing structures. Following
discussions with Huntsman Exploration, the Company has been informed that
Huntsman intends to drop the underlying tenements, and that it is currently
not economically sensible for Corcel to acquire them. As such, the project has
been fully impaired as at 30 June 2024.
APEX Angola
· During the year, Drilling activity was undertaken by Sonangol,
the Angolan state oil company and operator of the KON-11 block in which the
Company holds a 20% interest. The Company paid approx. USD 1.6 million in cash
calls to Sonangol over the period (and a payment plan for the balance of 2024
and all of 2025 agreed budgets for both KON-11 and KON-12 was agreed with
Sonangol in October 2024). The results of the drilling activity were
inconclusive, following substantial drilling challenges, with Sonangol noting
its intention to fully analyse the data, extracted from the wells, and
determine the optimal means for continued development of the wells and the
block as a whole. The Company has determined that the challenges, encountered
in these wells were of an engineering/execution nature and so do not reflect
the underlying prospectivity of the assets and, as such, do not give rise to
an indication of impairment of these prospects.
24 Commitments
As at 30 June 2024, 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 and did not give rise to a legal or constructive obligation as at
the date of report.
· On 1 March 2024, the Company extended its existing lease at We
Work, Aldwych House, through to 31 March 2025. Total lease rentals, payable to
March 2025, are £21,467.
25 Related Party Transactions
· Related party receivables and payables, between Group companies, are
disclosed in Notes 13 and 14, respectively.
· The key management personnel are the Directors and their
remuneration is disclosed within Note 8.
· During the year, the following Directors participated in funding
activity undertaken by the Company:
o Extraction Srl, in which Antoine Karam holds a 45% interest, provided
£1,000,000 in convertible loan funding in the year, which was fully converted
by the reporting date into a total of 130,979,451 ordinary shares. During the
year interest totalling to £47,835 was accrued on this loan and was converted
along with the principal;
o Geraldine Geraldo subscribed for 39.975 million new ordinary shares at a
price of £0.005 per share;
o Integrated Battery Metals (IBM), a company of which Yan Zhao is a
director, agreed to the purchase of the Company's interests in the Mambare
Joint Venture in the year for total consideration of USD 4.1 million in staged
tranches, see Note 23 for further details. During the year, IBM also provided
the Company with a loan of USD 1.6 million, which is interest free and
repayable out of the first tranche of consideration, payable of the purchase
of the Mambare JV.
26 Events After the Reporting Period
· On 10 July 2024, the Company announced it had entered into a
collaboration agreement with Conterp Serviços Téchnicos Ltda ("Conterp"), a
Brazilian energy services company, for the purposes of identifying onshore oil
and gas production opportunities in Brazil.
· On 12 July 2024, the Company announced the resignation of Antoine
Karam as Chairman of the Board (noting he remains a Non-Executive Director of
the Company), the appointment of Andrew Fairclough as acting Non-Executive
Chairman and the appointment of Scott Gilbert as Chief Executive Officer of
the Company.
· On 10 September 2024, the Company announced the completion of the
data acquisition phase of its KON-16 program (over which the Company holds a
35% interest and operatorship). The Company is now engaging in processing and
interpretation work over the data to further refine the prospectivity of the
block ahead of further exploration work.
· On 24 September 2024, the Company announced the acquisition of a
further 20% interest in its operated KON-16 block in Angola, bringing the
total interest of the Company to 55% gross (49.5% net to Corcel, considering
its 90% interest in APEX Angola). The acquisition was undertaken for no
consideration, following the exit of one of the JV partners from the block.
· On 24 September 2024, the Company announced the raising of £1.22
million in gross funding through the placement of 1.22 billion new ordinary
shares to a group of strategic investors, at a price of £0.001 per share.
· On 4 November 2024, the Company announced that Antoine Karam had
resigned from the Board with immediate effect.
· On 18 November 2024, the Company announced that it had agreed an
option to acquire a 20% interest in the IRAI gas field, onshore Brazil, as
well as a right of first refusal over the remaining 80% and a separate right
of first refusal over 100% of the adjacent TUC-T-172 exploration block. The
Company agreed to provide a loan of USD 550,000 to Petroborn to conduct the
first two workovers in the field, after which the Company would have the
choice whether to exercise the option. Further tranches of USD 0.850 million
and USD 2.1 million would be payable to fund operations in 2025 and 2026,
following execution of the option. The Company would receive an additional 10%
of future cash flows to accelerate repayment of its investments in the
field.
· On 19 November 2024, the Company announced that existing
Non-Executive Director, Pradeep Kabra, would take over the role of
Non-Executive Chairman, and Andrew Fairclough, the current Non-Executive
Chairman, would step down and remain on the Board as an Independent
Non-Executive Director.
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 2024 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 2024 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 2024 will be delivered to the
Registrar of Companies by 31 December 2024.
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