REG - Corcel PLC - Final Results Ended 30 June 2023 & Notice of AGM
30/11/2023 07:15
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20231130:nRSd1399Va&default-theme=true
RNS Number : 1399V Corcel PLC 30 November 2023
Corcel PLC
("Corcel" or the "Company")
Final Audited Results
for the Year Ended 30 June 2023 and
Notice of Annual General Meeting
30 November 2023
The Company's Annual Report and Financial Statements for 2023, extracts from
which are set out below, together with the Notice of the Company's Annual
General Meeting ("AGM"), have been published to shareholders and a copy of the
documents is now available on the Company's website at www.corcelplc.com.
The AGM is to be held at We Work, 125 Kingsway, London, WC2B 6HN at 10:00 am
on 22 December 2023.
Chairman's Statement
Corcel is an AIM-listed oil and gas company advancing towards first oil
through its interests in three blocks in onshore Angola. With drilling
having completed on the first well at Block KON-11 and now underway at the
second, the Company is making aggressive strides towards achieving its
mid-term hydrocarbon production goals.
Strategy Shift and Angola
During the course of the year, the Company began, and has now largely
completed, its transition from battery metals to oil and gas. Whilst it
retains several battery metal interests, including exposure to lithium and
rare earth elements, the Board believed that the opportunity for an attractive
entry into near-term hydrocarbon production in Angola is the best long-term
strategy to create value for shareholders. The Directors recognize the
global energy transition already underway, but believe that oil and gas will
remain key components in the world's energy mix for many years to come,
offering strong returns to those with the right assets and funding, willing to
invest in opportunities not always obvious to wider popular investor
sentiment.
The Company's cornerstone achievement during the year was the acquisition of
three interests in onshore blocks in Angola, KON-11/12/16, through the
acquisition of a 90% interest in Atlas Petroleum Exploration Worldwide Ltd
''APEX''. Corcel's agreement to bring these assets into the Company - at
what the Board considers very favourable pricing - has provided the Company
with a firm foundation in Angola on which to build, and several additional
opportunities are currently under consideration. The acquisition of APEX
brings with it a local team in Angola, led by our new MD Angola, Geraldine
Geraldo as well as a deep bench of experienced oil and gas technical experts,
all familiar with Angola, and with the onshore Kwanza basin in particular, a
brownfield basin, with significant historic production. We have after the
year-end added a new technical lead to our team, Jennifer Ayers, who is
ex-Chevron, and who arrives with many years of experience including operating
in Angola.
Progress on the ground in Angola has come quickly after the reporting period
year end, with initial drilling on TO-13, the first Well having concluded, and
the rig now having moved and spudded TO-14 at a second location. The Company
is very pleased with the results of the first well, which despite being
drilled downdip encountered the full 120m horizon of the Binga targeted, with
oil shows and multiple potential production horizons throughout. The Company
and the block consortium as a whole, led by the Angolan State Oil Company,
Sonangol, believe that these early results point towards significant
hydrocarbon potential remaining and dictate a move towards an early production
system at the field, targeting first oil during the course of 2024. This will
clearly be an important milestone for the company.
Rounding out the Company's transformation have been several board changes,
some of which were in progress at the time of writing and are expected to
conclude by the end of 2023. Once completed, a new fresh group of Executive
and Non-Executive senior managers and Directors will be in place to lead the
Company forward, with the right mix of experience and skills to propel Corcel
and its interests.
Battery Metals
Also during the year, the Company advanced its efforts to restructure its
battery metal interests, first through the entrance of a new cornerstone
investor at the end of 2022, led by new board member Yan Zhao, and then
through an agreement with International Battery Metals ("IBM") to form a joint
venture with the Company's 100% interest in Wowo Gap and 41% interest in the
Mambare project. Unfortunately, the Company's partner at Mambare attempted
to pre-empt only a portion of the transaction, delaying completion, and
forcing the future JV partners to split the transaction into two distinct
subsequent transactions. The first, the sale of Wowo Gap for up to US$2.8
million, completed before the year end and the second, the sale of Mambare for
up to US$4.1 million, was still in progress at the time of writing. These
two transactions will bind these assets to the Asian industrial off-takers
hungry for these metals, have brought significant cash into the business, and
offer Corcel a potential residual interest in battery metals through an
ongoing shareholding in IBM.
The Company has also been active in Australia where during the year it
acquired the Mt. Weld Rare Earth Element project for a modest consideration
and then farmed out 50% of the project now overdue and which we hope to see
before year-end. Also during the year the Company sold a 20% interest in the
project to Extraction SRL (a company controlled by the Corcel Chairman),
valuing the entire project at AUD5 million. Following the receipt of final
drill and metallurgical results, the Company expects to work with Extraction
and Riversgold to determine the next steps at the site.
The Company also agreed and then exercised an option to own 100% of the
lithium rights at the Canegrass project, in Western Australia. These rights
are overlain on an existing nickel project not currently owned by Corcel, and
the Company believes that the pegmatites found at the project could be very
prospective for lithium. At the time of writing the Company was concluding
its initial exploration activities at the project, which should lead to an
update on the project in the coming months and provide valuable data for
future decision making at the project.
Legacy Interests
The Flexible Grid Solutions business unit was formally shuttered during the
year, culminating in the sale of the Company's residual interests in the Tring
Road gas peaker plant site and the site of the Burwell Energy Storage project,
for a modest profit. Flexible energy production and storage, while an
exciting business in its own right, ultimately was not felt to be key to
Corcel's strategy going forward, and the Company was pleased to have
cash-based exits of these interests.
Financing and Results
During the course of the year, the Company overhauled both its shareholder
base through the introduction of several cornerstone investors, as well as
reducing and ultimately paying off the historic debt position in the Company,
which dated back to 2018. This was accomplished through the introduction of
Yan Zhou, now a board member, and the investments he led into Corcel in
October and then December 2022, with this group currently holding a 10.57%
interest. Subsequently, Extraction SRL (a company 45% owned by Corcel's
Chairman), agreed to invest over £1 million in several tranches, and
ultimately acquired a 19.15% interest in the Company, and finally the vendors
of APEX (several of whom are either set to join the Corcel Board or to become
key advisors to the Company), following the 90% sale of these interests to
Corcel, collectively hold some 17.19% of the business.
A shareholder base of this stature is a significant change from the manner in
which Corcel has been previously funded, and gives the Company a core group of
investors backing the Company to meet its longer-term goals, and supporting
the Company during the time it takes to generate cash flow from operations and
ultimately drive shareholder value over whatever market conditions may exist.
In alignment with this goal, the Company during the course of the year, first
refinanced and then by January 2023 paid off in full its corporate debt
originally due in October 2022. Subsequently the Company refinanced and
then, through a series of conversions and a cash repayment after the year-end,
retired the legacy debt of Regency Mines Plc (the Company's former name),
making the Company debt-free for the first time in several years and removing
the last of the short-term obligations that remained.
Also, after the year-end the Company agreed a series of convertible loan notes
with Extraction SRL (a company 45% owned by Corcel's Chairman) which would
allow immediate drawdown of £1 million, with a second £1 million before
January 2024, and an additional £8 million to be mutually agreed over the
three-year period. The Company has now agreed with Extraction SRL that the
balance of the loan will now be made available for early drawdown. This loan
is convertible at a 100% premium to the share price at the time it was agreed,
and fully aligns the Extraction investor group with both current and future
Corcel stakeholders.
We report during the period that the Group incurred a reduced loss of £1.187
million (2022: 2.128 million) whilst finance costs over the year increased to
£0.451 million (2022: £0.224m), reflecting increased interest and
refinancing fees (2022: £0.224million). Overall, administrative costs
increased slightly for the year to £1.442 million (2022: £1.26 million)
largely reflecting increased insurance costs, and the expansion of the team to
support operations in Angola. A gain on the disposal of the Flexible Grid
Solutions division and a portion of the Mt. Weld project led to income of
£1.146 million during the period.
While overall market conditions remain poor both on AIM generally and in the
oil and gas sector specifically, the Board believes that Corcel is uniquely
funded in a manner that distinguishes it from most of its peers, and when this
funding framework is tied with top tier appraisal and development assets in
onshore Angola, Corcel is positioned to succeed in this space where others
have failed.
We therefore are pleased to present the Annual Report and Accounts for the
year to 30 June 2023. We thank all stakeholders for their ongoing support and
we look forward with excitement to additional progress in 2024.
Antoine Karam
Executive Chairman
Results and Dividends
The Group made a loss after taxation of £1.26 million (2022: loss of £2.23
million). The Directors do not recommend the payment of a dividend (2022:
nil).
For further information, please contact:
Antoine
Karam
Corcel Plc Executive Chairman
Development@Corcelplc.com (mailto:Development@Corcelplc.com)
James Joyce / James Bavister /Andrew de Andrade WH Ireland Ltd NOMAD
& Broker 0207 220 1666
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.
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 2023 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 2023 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 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.
Conclusions Relating to Going Concern
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 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;
· performing sensitivity analysis on the cash flow forecasts
prepared by management;
· 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 financial statements; and
· reviewing post balance sheet events as they relate to the
group's ability to raise funds and restructure debt.
Based on the work we have performed, we have not identified any material
uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the group's or company's ability
to continue as a going concern for a period of at least twelve months from
when the financial statements are authorised for issue.
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; and
· the level of misstatements identified in prior periods.
Materiality for the group financial statements was set at £172,400 (2022:
£97,000). This was calculated at 3% of net assets (2022: 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.
Materiality for the significant components of the group ranged from £87,600
to £171,000, calculated as a percentage of net assets.
Performance materiality for the group financial statements was set at
£120,600 (2022: £67,900), being 70% (2022: 70%) of materiality for the group
financial statements as a whole.
Materiality and performance materiality for the company was set at £171,000
(2022: £96,000) and £119,700 (2022: £67,200) respectively.
The materiality and performance materiality for the significant components,
including the company, are calculated on the same basis 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 £8,600 (2022: £4,850) for the group and for the company a value in
excess of £8,500 (2022: £4,800). 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 accounting treatment of the
subsidiary acquired during the year, the accounting treatment of disposals of
various entities during the year, and the valuation of 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 company's 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.
Key Audit Matter How our scope addressed this matter
Carrying value of investments in subsidiaries, assets held for sale and Our work in this area included:
receivables from other group companies (Notes 10, 11, 13 and 24)
· Obtaining relevant documentation relating to the ownership of
investments at the year end;
Investments in subsidiaries (Company only), assets held for sale (Group & · Review of management's assessment of recoverability of
Company) and receivables from subsidiaries (Company only) are significant investments in subsidiaries, assets held for sale, and receivables from group
balances in the financial statements. companies, challenging and corroborating key assumptions made;
· Consideration of the recoverability of these balances by
reference to underlying net asset values, including the recoverability
Investments: potential of the underlying projects where applicable;
The company holds a 90% interest in Atlas Petroleum Exploration Worldwide Ltd · Review of Board minutes, RNS announcements, and holding
(£966k) and a 100% interest in Corcel Australasia (£1,013k). discussions with management surrounding the intended sale of JV Oro Nickel,
including review of the key terms of the post-year end sale to assess
recoverability at the year end; and
Assets Held for Sale: · Considering the appropriateness of disclosure included in the
financial statements.
The group and company hold a 41% interest in JV company Oro Nickel Ltd. During
the year the Board made the decision to sell its interest in Oro Nickel and,
following receipt of a revised offer post-year end, the sale process remains
ongoing at the date of this report. At the year end, £1,775k (company) and
£1,575k (group) have been classified as Assets held for sale in relation to
the group's investment in the JV via capital and loan.
Receivable balances:
The company currently has outstanding receivables due of £286k from
subsidiaries (Corcel Australasia and Atlas Petroleum Exploration Worldwide
Ltd) and the group and company also have outstanding receivables due of
£1,516k from a JV company (Oro Nickel Ltd).
As at 30 June 2023, these assets have material value in the financial
statements.
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
balances may be impaired. As determining the recoverability involves a high
degree of management estimate and judgement, there is a risk of material
misstatement.
Carrying value of exploration and evaluation assets (group and company) (Note Our work in this area included:
21)
· Confirming that the Group has good title to the projects through
The exploration and evaluation asset represents a significant balance in the inspection of relevant licenses, contracts and agreements;
group's financial statements. There is the risk that this amount is impaired,
and that the capitalised amounts do not meet the recognition criteria as · Testing a sample of costs capitalised including considerations of
adopted by the group. The capitalisation of the costs and determination of the their appropriateness for capitalisation in accordance with IFRS 6 and the
recoverability of these assets are subject to a high degree of management group's accounting policy;
estimation and judgement and therefore there is a risk this balance is
materially misstated. · Reviewing management's impairment assessment in respect of the
carrying value, including challenging and obtaining corroborating evidence for
key assumptions used; 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 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 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 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 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 Laws;
o General Data Protection Regulations;
o Anti-Bribery Act;
o Anti-Money Laundering Regulations; and
o Local environmental and mining regulations.
· We designed our audit procedures to ensure the audit team
considered whether there were any indications of non-compliance by the group
and 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 RNS(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
29 November 2023
Financial Statements
Consolidated Statement of Financial Position
as at 30 June 2023
Notes 30 June 30 June
2023 2022
£'000 £'000
ASSETS
Non-current assets
Investments in associates and joint ventures 11 - 1,988
Exploration & evaluation assets 21 2,014 1,026
Property, plant and equipment 1 52
Goodwill 10 - -
Financial instruments - fair value through other comprehensive income (FVTOCI) 12 1 1
Other receivables 13 2,231 1,502
Total non-current assets 4,247 4,569
Current assets
Cash and cash equivalents 18 257 25
Financial instruments with fair value through profit and loss (FVTPL) 12 - -
Trade and other receivables 13 754 277
Total current assets 1,011 302
Assets held for sale 24 1,575 -
Total assets 6,833 4,871
EQUITY AND LIABILITIES
Equity attributable to owners of the Parent
Called up share capital 16 2,842 2,751
Share premium account 16 28,138 24,961
Shares to be issued 16 - 75
Other reserves 16 2,481 2,095
Retained earnings (27,945) (26,758)
Total equity attributable to owners of the Parent 5,516 3,124
Non-Controlling interests - -
Total equity 5,516 3,124
LIABILITIES
Current liabilities
Trade and other payables 14 715 324
Short-term borrowings 14 602 1,423
Total current liabilities 1,317 1,747
Total equity and liabilities 6,833 4,871
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 29 November 2023 and are signed on its behalf by:
Antoine Karam
Executive Chairman
Consolidated Income Statement
for the year ended 30 June 2023
Notes Year to Year to
30 June 30 June
2023 2022
£'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 (114) (91)
Impairment of investments in joint ventures and financial instruments held at 11 (337) (488)
fair value through profit and loss (FVTPL)
Administrative expenses 4 (1,442) (1,218)
Impairment of property, plant and equipment - (61)
Impairment of receivables - (67)
Foreign currency gain/(loss) (13) 1
Other income 25 23
Finance costs, net 5 (451) (224)
Share of loss of associates and joint ventures 11,24 (76) (3)
Loss for the year before taxation 3 1,262 (2,128)
Taxation 6 - -
Loss for the year 1,262 (2,128)
Loss per share attributable to:
Equity holders of the Parent (1,262) (2,128)
Non-controlling interest - -
(1,262) (2,128)
Earnings per share attributable to owners of the Parent*:
(0.5) (0.5) pence
Basic and diluted 9 (0.2) pence (0.5) pence
Consolidated Statement of Comprehensive Income
for the year ended 30 June 2023
30 June 30 June
2023 2022
£'000 £'000
Loss for the year (1,262) (2,128)
Other comprehensive income
Items that will be not be reclassified subsequently to profit or loss
Revaluation of FVTOCI investments - (6)
Unrealised foreign currency gain/(loss) on translation of foreign operations 5 (4)
Total other comprehensive income for the year 5 (10)
Total comprehensive loss for the year (1,257) (2,138)
Total comprehensive loss attributable to:
Equity holders of the Parent (1,257) (2,138)
Non-controlling interest - -
(1,257) (2,138)
All of the Group's operations are considered to be continuing.
The accompanying notes form an integral part of these Financial Statements.
Consolidated Statement of Changes in Equity
for the year ended 30 June 2023
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 2021 2,746 24,161 75 (24,630) 2,018 4,370 - 4,370
Changes in equity for 2022 -
Loss for the year - - - (2,128) - (2,128) - (2,128)
Other comprehensive income for the year
Revaluation of FVTOCI investments - - - - (6) (6) - (6)
Unrealised foreign exchange loss arising on retranslation of foreign company - - - (4) (4) - (4)
operations
-
Total comprehensive income for the year - - - (2,128) (10) (2,138) - (2,138)
Transactions with owners
Issue of shares 5 848 - - - 853 - 853
Share issue costs - (48) - - - (48) - (48)
Options issued - - - - 17 17 - 17
Warrants issued - - - - 70 70 - 70
Total transactions with owners 5 800 - - 87 892 - 892
As at 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 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 2,842 28,138 - (27,945) 2,481 5,516 - 5,516
See Note 15 for a description of each reserve included above.
Other reserves FVTOCI Warrant reserve Foreign Total
financial £'000 currency other
asset Share-based translation reserves
reserve payment reserve £
£'000 reserve £
£'000
As at 1 July 2021 4 99 1,380 535 2,018
Revaluation of FVTOCI investments (6) - - - (6)
Unrealised foreign exchange loss arising on retranslation of foreign company - - - (4) (4)
operations
Options granted during the year - 17 - - 17
Warrants granted during the year - - 70 - 70
As at 1 July 2022 (2) 116 1,450 531 2,095
Unrealised foreign exchange loss 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 30 June 2023 (2) 169 1,778 536 2,481
See Note 15 for a description of each reserve included above.
Consolidated Statement of Cash Flows
for the year ended 30 June 2023
Year to Year to
30 June 30 June
2023 2022
£ £
Cash flows from operating activities
Loss before taxation (1,262) (2,128)
Impairment of investments in joint ventures and financial instruments held at 337 416
fair value through profit and loss (FVTPL)
Impairment of property, plant and equipment - 61
Gain on disposal of subsidiaries (287) -
Gain on disposal of mineral tenements (475) -
Gain on sale of FVTPL investments - 72
Gain on disposals of Joint Ventures and Associates (384) -
Depreciation 10 -
Finance cost, net (Note 5) 451 153
Share-based payments 53 109
Share of loss in associates and joint ventures 76 3
Equity settled expenses 201 11
Increase in receivables (139) (31)
Increase in payables 94 142
Net cash outflow from operations (1,325) (1,192)
Cash flows from investing activities
Purchase of financial assets carried at amortised cost (Note 19) - (26)
Purchase of property, plant and equipment - (23)
Expenditure on exploration & evaluation assets (386) (59)
Cash acquired on business combination - 2
Proceeds from disposal of Joint Ventures and Associates 384 -
Proceeds from disposal of Subsidiaries 246 -
Proceeds from disposal of mineral tenements (Note 21) 535 -
Net cash outflow from investing activities 779 (257)
Cash inflows from financing activities
Proceeds from issue of shares net of issue costs 1,738 403
Proceeds of new borrowings, as received net of associated fees (Note 20) - 950
Repayment of borrowings (Note 20) (954) (265)
Net cash inflow from financing activities 784 1,088
Net decrease in cash and cash equivalents 238 (361)
Cash and cash equivalents at the beginning of period 25 392
Foreign exchange on translation of foreign currency (6) (6)
Cash and cash equivalents at end of period 257 25
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 2023
Notes 30 June 30 June
2023 2022
£ £
ASSETS
Non-current assets
Investments in subsidiaries 10 1,980 1,014
Investments in associates and joint ventures 11 - 2,112
Investments in mineral tenements 21 392 -
Loans to subsidiaries 19 286 278
Financial assets with fair value through other comprehensive income (FVTOCI) 12 1 1
Other receivables 13 1,517 1,502
Total non-current assets 4,176 4,907
Current assets
Cash and cash equivalents 18 256 20
Trade and other receivables 13 453 257
Total current assets 709 277
Assets held for sale 24 1,775 -
Total assets 6,660 5,184
EQUITY AND LIABILITIES
Called up share capital 16 2,842 2,751
Share premium account 16 28,138 24,961
Shares to be issued 16 - 75
Other reserves 16 1,945 1,564
Retained earnings (27,332) (25,913)
Total equity 5,593 3,438
LIABILITIES
Current liabilities
Trade and other payables 14 465 323
Short-term borrowings 14 602 1,423
Total current liabilities 1,067 1,746
Total equity and liabilities 6,660 5,184
Company Statement of Comprehensive Income
As permitted by Section 408 Companies Act 2006, the Company has not presented
its own Statement of Comprehensive Income. The Company's loss for the
financial year was £1,494,325 (2022: loss of £1,848,349). The Company's
Total comprehensive loss for the financial year was £1,419,325 (2022: loss
£1,853,978).
These Financial Statements were approved by the Board of Directors and
authorised for issue on 29 November 2023 and are signed on its behalf by:
Antoine Karam
Executive Chairman
The accompanying notes form an integral part of these Financial Statements.
Company Statement of Changes in Equity
for the year ended 30 June 2023
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 2021 2,746 24,161 75 (24,065) 1,483 4,400
Changes in equity for 2022
Loss for the year - - - (1,848) - (1,848)
Other comprehensive income for the year
Revaluation of FVTOCI investments - - - - (6) (6)
Total comprehensive income for the year - - - (1,848) (6) (1,854)
Transactions with owners
Issue of shares 5 848 - - - 853
Shares issue costs - (48) - - - (48)
Share options granted - - - - 17 17
Share warrants granted during the year - - - - 70 70
Total transactions with owners 5 800 - - 87 892
As at 1 July 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 91 3,177 - - - 3,268
Cancellation of shares to be issued - - (75) 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 2,482 28,138 - (27,332) 1,945 5,593
Other reserves FVTOCI Share-based Warrants reserve Total
financial payment £'000 other
asset reserve reserves
reserve £'000 £'000
£'000
As at 30 June 2021 4 99 1,380 1,483
Changes in equity for 2022
Other comprehensive income for the year
Revaluation of FVTOCI investments (6) - - (6)
Transfer of FVTOCI reserve relating to impaired assets and disposals - - - -
Share options granted during the year - 17 - 17
Warrants issued during the year - - 70 70
Total Other comprehensive (expenses) / income (6) 17 70 81
As at 1 July 2022 (2) 116 1,450 1,564
Changes in equity for 2023
Other comprehensive income for the year
Share options granted during the year - 53 - 53
Warrants issued during the year - - 328 328
Total Other comprehensive expenses - 53 328 381
As at 30 June 2023 (2) 169 1,778 1,945
See Note 15 for a description of each reserve included above.
Company Statement of Cash Flows
for the year ended 30 June 2023
Year to Year to
30 June 30 June
2023 2022
£'000 £'000
Cash flows from operating activities
Loss before taxation (1,494) (1,848)
Impairment of investments in joint ventures and financial instruments held at 337 416
fair value through profit and loss (FVTPL)
Impairment of financial assets FVTPL - 72
Impairment of loans to and investments in subsidiaries - 101
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) 451 154
Share-based payments 53 109
Equity settled transactions 201 11
Increase in receivables (87) (219)
Decrease/(increase) in payables (60) 302
Net cash outflow from operations (1,705) (902)
Cash flows from investing activities
Payments for investments in and loans to associates and joint ventures (Note - (164)
11)
Proceeds from disposal of mineral tenements 535 -
Proceeds from disposal of Subsidiaries 246 -
Proceeds from disposal of Joint Ventures and Associates 384 -
Investments and loans to subsidiaries (8) (389)
Net cash outflows from investing activities 1,157 (553)
Cash inflows from financing activities
Proceeds from issue of shares, net of issue costs 1,738 403
Proceeds of new borrowings (Note 20) - 950
Repayments of borrowings (Note 20) (954) (265)
Net cash inflow from financing activities 784 1,088
Decrease in cash and cash equivalents 236 (367)
Cash and cash equivalents at the beginning of period 20 387
Cash and cash equivalents at end of period 256 20
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 2023, were authorised for issue
by the Board on 29 November 2023 and signed on the Board's behalf by James
Parsons. Corcel Plc is a public limited company, incorporated and domiciled
in England and Wales. The Company's ordinary shares are traded on AIM. The
principal activity of the Company is the management of a portfolio of battery
metals exploration and development projects in Papua New Guinea and Canada,
coupled with a Flexible Grid Solutions energy storage business in the UK.
The registered address of the Company is Salisbury House, Suite 425, London
Wall, London EC2M 5PS.
1.2 Basis of Preparation
The Financial Statements have been prepared in accordance with UK adopted
international accounting standards ('IAS') in conformity with the requirements
of the Companies Act 2006. They are presented in thousand Pounds Sterling
(£'000), unless stated otherwise.
The principal accounting policies adopted are set out below.
Going Concern
It is the prime responsibility of the Board to ensure the Company and the
Group remain going concerns. At 30 June 2023, the Group had cash and cash
equivalents of £0.257 million and £0.602 million of borrowings and, as at
the date of signing these Financial Statements, the cash balance was £0.185
million with post-year end borrowings of £1m. Post year-end the Company
has agreed terms on a £10m convertible loan note facility that is to be made
available to fund the business through the next stages of its development, of
which £1m has been drawn as at the signing date and is due for settlement in
October 2026. The balance of the convertible loan notes have been agreed
with the lender to be made available to the Company immediately.
The notes are to be issued at par and are convertible into new ordinary shares
of £0.0001 of Corcel Plc, at a fixed price of £0.008 per share. Conversion
may take place beginning 30 days after the initial issuance at the investor's
discretion. The notes will attract an interest rate of 12% per annum,
accruing daily. Any drawn down amounts, including interest outstanding after
36 months are to be repaid to the lender in either cash or shares at the
discretion of the lender. The Directors anticipate having to raise
additional funding to meet the ongoing spending projections and working
capital requirements of the business, most likely through debt instruments
over the course of the financial year.
Having considered the prepared cashflow forecasts and the Group budget,
expected operational costs in Angola, as well as legacy battery metals
projects, 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.
Company Statement of Comprehensive Income
As permitted by Section 408 Companies Act 2006, the Company has not presented
its own Statement of Comprehensive Income. The Company's loss for the
financial year was £1.494 million (2022: loss of £1.848 million). The
Company's other comprehensive loss for the financial year was £1.419 million
(2022: loss £1.854 million).
New Standards, Amendments and Interpretations Not Yet Adopted
At the date of approval of these Financial Statements, the following standards
and interpretations, which have not been applied in these Financial Statements
were in issue but not yet effective:
· Amendments to IAS 1: Classifications of current or non-current
liabilities (effective 1 January 2024);
· Amendments to IAS 8: Accounting Policies, Changes to Accounting
Estimates and Errors (effective 1 January 2023);
· Amendments to IAS 12: Income Taxes - Deferred Tax arising from a
Single Transaction (effective 1 January 2023).
· Amendments to IAS 1: Presentation of Financial Statements and
IFRS Practice Statement 2: Disclosure of Accounting Policies (effective 1
January 2023).
The effect of these new and amended Standards and Interpretations, which are
in issue but not yet mandatorily effective, is not expected to be material.
Standards Adopted Early by the Group
The Group has not adopted any standards or interpretations early in either the
current or the preceding financial year.
1.3 Basis of Consolidation
The consolidated Financial Statements of the Group incorporate the Financial
Statements of the Company and entities controlled by the Company, its
subsidiaries, made up to 30 June each year.
Subsidiaries
Subsidiaries are entities over which the Group has the power to govern the
financial and operating policies so as to obtain economic benefits from their
activities. Subsidiaries are consolidated from the date on which control is
obtained, the acquisition date, until the date that control ceases. They are
deconsolidated from the date on which control ceases.
The acquisition method of accounting is used to account for the acquisition of
subsidiaries by the Group. The cost of an acquisition is measured as the fair
value of the assets given, equity instruments issued, contingent consideration
and liabilities incurred or assumed at the date of exchange. Costs, directly
attributable to the acquisition, are expensed as incurred. Identifiable assets
acquired and liabilities and contingent liabilities assumed in a business
combination are initially measured at fair value at the acquisition date.
Provisional fair values are adjusted against goodwill if additional
information is obtained within one year of the acquisition date about facts or
circumstances existing at the acquisition date. Other changes in provisional
fair values are recognised through profit or loss.
Intra-group transactions, balances and unrealised gains and losses on
transactions between Group companies are eliminated on consolidation, except
to the extent that intra-group losses indicate an impairment.
Goodwill is capitalised as an intangible asset with any impairment in carrying
value being charged to the Consolidated Statement of Comprehensive Income. Any
impairment recognised for goodwill is not reversed.
A change in the ownership interest of a subsidiary, without a loss of control,
is accounted for as an equity transaction. If the Group loses control over a
subsidiary, it:
· derecognises the assets (including goodwill) and liabilities of
the subsidiary;
· derecognises the carrying amount of any non-controlling interest;
· derecognises the cumulative translation differences recorded in
equity;
· recognises the fair value of the consideration received;
· recognises the fair value of any investment retained;
· recognises any surplus or deficit in profit or loss; and
· reclassifies the Parent's share of components previously
recognised in other comprehensive income to profit or loss or retained
earnings, as appropriate.
Non-Controlling Interests
Profit or loss and each component of other comprehensive income are allocated
between the Parent and non-controlling interests, even if this results in the
non-controlling interest having a deficit balance.
Transactions with non-controlling interests that do not result in loss of
control are accounted for as equity transactions. Any differences between the
adjustment for the non-controlling interest and the fair value of
consideration paid or received are recognised in equity.
1.4 Summary of Significant Accounting Policies
1.4.1 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 amortised over the term
of the permit. 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 will be prepared for the
same reporting period as the Group. Where necessary, adjustments are made to
bring the accounting policies used into line with those of the Group and to
reflect impairment losses where appropriate. Adjustments are also made in the
Group's Financial Statements to eliminate the Group's share of unrealised
gains and losses on transactions between the Group and its jointly controlled
entity. The Group ceases to use the equity method on the date from which it no
longer has joint control over, or significant influence in, the joint venture.
At 30 June 2023, the Group had following contractual arrangements, which were
classified as investments in associates and joint ventures:
· Oro Nickel Ltd (41% interest), a contractual arrangement with
Battery Metals Pty Ltd, which represents a joint venture established through
an interest in a jointly controlled entity, in order to develop and exploit
the Mambare nickel project;
· DVY196 Holdings Corp ("DVY"), 50% interest in a North American
vanadium and nickel project.
1.4.4 Taxation
Corporation tax payable is provided on taxable profits at the prevailing UK
tax rate. The tax expense represents the sum of the current tax expense and
deferred tax expense.
The tax currently payable is based on taxable profit for the year. Taxable
profit differs from accounting profit as reported in the Statement of
Comprehensive Income because it excludes items of income or expense that are
taxable or deductible in other years
and it further excludes items that are never taxable or deductible. The
Group's liability for current tax is measured using tax rates that have been
enacted or substantively enacted by the reporting date.
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amount of assets and liabilities in the Financial
Statements and the corresponding tax bases used in the computation of taxable
profit and is accounted for using the balance sheet liability method. Deferred
tax liabilities are recognised for all taxable temporary differences and
deferred tax assets
are recognised to the extent that it is probable that taxable profits will be
available against which deductible temporary differences can be utilised. Such
assets and liabilities are not recognised if the temporary difference arises
from the initial recognition of goodwill
or from the initial recognition, other than in a business combination, of
other assets and liabilities in a transaction, which affects neither the
taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences
arising on investments in subsidiaries and associates and interests in joint
ventures, except where the Group is able to control the reversal of the
temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future.
Deferred tax is calculated at the tax rates that are expected to apply to the
period when the asset is realised or the liability is settled based upon tax
rates that have been enacted or substantively enacted by the reporting date.
Deferred tax is charged or credited in profit or loss, except when it relates
to items credited or charged directly to equity, in which case the deferred
tax is also dealt with in equity, or items charged or credited directly to
other comprehensive income, in which case the deferred tax is also recognised
in other comprehensive income.
Deferred tax assets and liabilities are offset where there is a legally
enforceable right to offset current tax assets and liabilities and the
deferred tax relates to income tax levied by the same tax authorities on
either:
· the same taxable entity; or
· different taxable entities, which intend to settle current tax
assets and liabilities on a net basis or to realise and settle them
simultaneously in each future period when the significant deferred tax assets
and liabilities are expected to be realised or settled.
1.4.5 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 24 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") 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 granted to Directors and others, in respect of
services provided, is recognised as an expense in the Income Statement with a
corresponding increase in equity reserves - the share-based payment reserve
until the award has been settled and then make a transfer to share capital. On
exercise or lapse of share options, the proportion of the share-based payment
reserve, relevant to those options is retained in the share-based payment
reserve. On exercise, equity is also increased by the amount of the proceeds
received.
The fair value is measured at grant date and charged over the vesting period
during which the option becomes unconditional.
The fair value of options is calculated using the Black-Scholes model, taking
into account the terms and conditions upon which the options were granted. The
exercise price is fixed at the date of grant.
Non-market conditions are performance conditions that are not related to the
market price of the entity's equity instruments. They are not considered, when
estimating the fair value of a share-based payment. Where the vesting period
is linked to a non-market performance condition, the Group recognises the
goods and services it has acquired during the vesting period, based on the
best available estimate of the number of equity instruments expected to vest.
The estimate is reconsidered at each reporting date, based on factors such as
a shortened vesting period, and the cumulative expense is "trued up" for both
the change in the number expected to vest and any change in the expected
vesting period.
Market conditions are performance conditions that relate to the market price
of the entity's equity instruments. These conditions are included in the
estimate of the fair value of a share-based payment. They are not taken into
account for the purpose of estimating the number of equity instruments that
will vest. Where the vesting period is linked to a market performance
condition, the Group estimates the expected vesting period. If the actual
vesting period is shorter than estimated, the charge is be accelerated in the
period that the entity delivers the cash or equity instruments to the
counterparty. When the vesting period is longer, the expense is recognised
over the originally estimated vesting period.
For other equity instruments, granted during the year (i.e. other than share
options), fair value is measured on the basis of an observable market price.
Share Incentive Plan
Where the shares are granted to the employees under Share Incentive Plan, the
fair value of services provided is determined indirectly by reference to the
fair value of the free, partnership and matching shares granted on the grant
date. Fair value of shares is measured on the basis of an observable market
price, i.e. share price as at grant date and is recognised as an expense in
the Income Statement on the date of the grant. For the partnership shares, the
charge is calculated as the excess of the mid-market price on the date of
grant over the employee's contribution.
1.4.11 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, the Company
re-measures its previously held equity interests in the acquiree at its
acquisition-date fair value and recognises the resulting gain or loss, if any,
in profit or loss. Any gains or losses, previously recognised in other
comprehensive income, are transferred to profit and loss.
Investments in associates and joint ventures are classified as non-current
assets and included in the Statement of Financial Position of the Company at
cost at the date of acquisition less any identified impairment.
1.4.15 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 by
residual method 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 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.
IFRS 16 was adopted 1 June 2019 without restatement of comparative figures.
On initial recognition, the carrying value of the lease liability also
includes:
· amounts expected to be payable under any residual value
guarantee;
· the exercise price of any purchase option granted in favour of
the Group if it is reasonably certain to assess that option;
· any penalties payable for terminating the lease if the term of
the lease has been estimated on the basis of termination option being
exercised.
Lease liabilities are subsequently measured at the present value of the
contractual payments due to the lessor over the lease term.
Right of use assets are initially measured at the amount of the lease
liability, reduced for any lease incentives received and increased for:
· lease payments made at or before commencement of the lease;
· initial direct costs incurred; and
· the amount of any provision recognised, where the Group is
contractually required to dismantle, remove or restore the leased asset.
1.4.20 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.
Impairment of Investments in and loans to Joint Ventures and Investments in
Mineral Tenements
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 continued progress at the Mambare nickel/cobalt project during the year,
when considered alongside the continued strength in nickel prices, have
encouraged the Board to continue to hold the value of its stake in the Mambare
joint venture at the previous valuation of £1.65 million alongside a £1.5
million receivable. The Company believes that the carrying values reflect
the sizeable JORC resource and work done to date as well as the potential to
progress the project to a mining license and Direct Shipping Ore "DSO"
production in 2023 and beyond. The Company has assessed the viability of the
project, given current and expected nickel prices and the anticipated cost of
a DSO operation, and believes the project can be successfully taken into
production in the mid-term with a mining lease application already at a very
advanced stage with the PNG mining authorities. The Board further believes
that the likelihood of recovery of the receivable has remained firm over the
past 12-24 months due to the agreement post balance sheet date 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. As such, the Directors believe that the project
should remain on the balance sheet at the cost of acquisition pending a
decision on the next steps.
The Group holds E&E assets of £2.014m at 30 June 2023. 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) 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$5M and Corcel's 80% interest at
AUD$4M (£3.29M). Given the fact that a very recent cash based transaction
value exists for the project, the Directors believe that the holding level of
the residual 80% interest in the project should be marked to market
appropriately.
The Company, following a desktop study and assessment of the likelihood of
developing the project to production and revenue generation has deemed
necessary to impair the Dempster Vanadium/Nickel Project in full.
Impairment of Investments in and loans to Subsidiaries
The carrying amount of investments in and loans made to subsidiaries is tested
for impairment annually and this process is considered to be key judgement
along with determining whenever events or changes in circumstances indicate
that the carrying amounts for those assets may not be recoverable. 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.
Share-Based Payment Transactions
The Group measures the cost of equity-settled transactions with employees and
the issuance of warrants to investors by reference to the fair value of the
equity instruments at the date at which they are granted. The fair value of
share options and warrants is determined using the Black-Scholes model and the
estimates used within this model are disclosed in Note 17.
Consideration receivable on disposal of Niugini Nickel
During the 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.
Assets held for sale - Oro Nickel
During the 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 financial statements. On 23
October 2023 the initial consideration proceeds of US1.6M, in the form of a
loan for the divestment were received following the execution of the
transaction agreements. The directors believe that the divestment agreement
will after a shareholder vote achieve commercial close in the near term either
through a sale to Integrated Battery Metals or through pre-emption being
exercised by Battery Metals Australasia Pty Ltd, and consequently do not
believe that any impairment or discounting of these amounts receivable are
necessary in these financial statements. 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
During the year, the focus of the Group changed form the development of
battery metals projects and flexible storage solutions to oil & gas
exploration and production. However, the Group had no revenue or operating
expenses in this segment during the year, having acquired interests in its
APEX oil & gas project immediately prior to the balance sheet date. As a
consequence, segmental analysis by industry omits oil & gas for the
current year and prior year comparatives.
Once the Group's main focus of operations becomes the exploration for and
production of oil & 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 2022 Battery Metals Flexible Grid Solutions Corporate Total
£'000 (UK) and £'000
£'000 unallocated
£'000
Revenue - - - -
Management services - - 23 23
Project expenses (82) (9) - (91)
Exploration expenses - - - -
Administrative expenses (92) (66) (1,060) (1,218)
Currency (loss)/gain 1 - - 1
Share of profits in joint ventures (3) - - (3)
Impairment of receivables - - (61) (61)
Impairment of property, plant and equipment - - (67) (67)
Impairment of Joint venture projects - (488) - (488)
Finance cost - net - - (224) (224)
Net loss before tax from continuing operations (176) (563) (1,389) (2,128)
Year to 30 June 2023 Battery Metals Flexible Grid Solutions Corporate Total
£'000 (UK) and £'000
£'000 unallocated
£'000
Revenue - - - -
Management services - - 8 8
Other income - - 17 17
Project expenses (114) - - (114)
Exploration expenses - - - -
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 2022 UK Australia Papua Canada Total
£'000 £'000 New Guinea USA £'000 £'000
£'000 £'000
Revenue 23 - - - - 23
Total segment revenue and other gains 23 - - - - 23
Non-current assets
- - 1,650 - 338 1,988
Investments in associates and joint ventures
Goodwill - - - - - -
Property, plant and equipment 1 - 51 - - 52
Exploration & evaluation assets - - 1,026 - - 1,026
Receivable from a joint venture - - 1,502 - - 1,502
Purchased debt - - - - - -
FVTOCI financial instruments 1 - - - - 1
Total segment non-current assets 2 - 4,229 - 338 4,569
Year to 30 June 2023 UK Australia Papua Canada Total
£'000 £'000 New Guinea Africa £'000 £'000
£'000 £'000
Revenue 8 - - - - 8
Total segment revenue and other gains 8 - - - - 8
Non-current assets
Investments in associates and joint ventures - - - - - -
Goodwill - - - - - -
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
Financial assets - FVTOCI - - - - - -
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 2023 2022
£'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 42 33
Company Financial Statements
Directors' emoluments (Note 8) 632 496
4. Administrative Expenses
Group Group Company Company
2023 2022 2023 2022
£'000 £'000 £'000 £'000
Staff costs
Payroll 498 514 498 514
Pension 27 20 27 20
Share-based payments 63 39 63 39
Consultants - - - -
Staff Welfare 3 8 3 8
Employers NI 86 53 86 53
Professional services
Accounting 106 94 87 70
Legal 65 46 54 4
Business development 12 3 12 3
Marketing & Investor relations 32 25 32 25
Funding costs 94 21 94 21
Other 83 111 44 25
Regulatory compliance 125 116 125 115
Travel 60 14 60 13
Office and Admin
General 43 35 35 32
IT costs 8 12 8 12
Rent 29 14 29 14
Insurance 108 93 106 91
Total administrative expenses 1,442 1,218 1,363 1,059
5. Finance Costs, Net
Group 2023 2022
£'000 £'000
Interest expense (123) (154)
Share based payments - investors (328) (70)
(451) (224)
6. Taxation
2023 2022
£'000 £'000
Current period transaction of the Group
UK corporation tax at 19.00% (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 (1,262) (2,128)
Loss on ordinary activities at the average UK standard rate of 19% (2022: (240) (404)
19.00%)
Effect of non-deductible expense 75 22
Effect of tax benefit of losses carried forward 164 382
Tax losses brought forward - -
Current tax (credit) - -
Deferred tax amounting to £nil (2022: £nil), relating to the Group's
investments was recognised in the Statement of Comprehensive Income. No
deferred tax charge has been recognised due to uncertainty as to the timing of
future profitability of the Group. Unutilised trading losses are estimated at
circa £3,827 thousand (2022: £3,663) and capital losses estimated circa
£nil (2022: £nil).
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
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:
2023 2022
£'000 £'000
Wages and salaries 534 514
Pension 27 20
Social security costs, net of allowances 87 53
Medical costs 3 8
Employee share-based payment charge 63 39
Total staff costs 714 634
The average number of Group employees (including Directors) during the year
was:
2023 2022
Number Number
Directors 3 4
Executives 2 0
Administration 1 1
6 5
During the year, for all Directors and employees, who have been employed for
more than three months, the Company contributed to a defined contributions
pension scheme as described under Directors' remuneration in the Directors'
Report and a Share Incentive Plan ("SIP") as described under Management
incentives in the Directors' Report.
All emoluments presented for current and comparative years, except for
pension, are short-term in nature.
8. Directors' Emoluments
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
519 75 2 36 - 632
2022 Directors' Share Incentive Plan Short term benefits Total
fees £'000 Pension £'000 £'000
£'000 Bonus contributions
£'000 £'000
Executive Directors
J Parsons* 152 30 - 10 - 192
S Kaintz 175 35 7 16 3 236
Non-executive Directors
E Ainsworth 40 - - - - 40
H Bellingham 28 - - - - 28
395 65 7 26 3 496
* 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 (2022:
nil).
In the current year, amounts totalling £59,034 (2022: £nil) to J Parsons and
£2,936 (2022: £nil) to Scott Kaintz relating to directors fees and bonuses
respectively, net of tax and national insurance deductions, were settled in
shares. In the year to 30 June 22, J Parsons was awarded a £60k bonus and S
Kaintz a £70k bonus, half of which was paid in the prior year and half of it
was paid in the current year.
During the year, the Company contributed to a Share Incentive Plan, more fully
described in the Directors' Report, where shares were issued to each employee,
including Directors, making a total of 3,506,490 (2022: 896,549) 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.
No options were granted in the current year. In the prior year the following
options were granted to the Directors of the Company with a total FV charge to
the profit for the year of £15,829.
2022 Number of Options Grant date Expiry date
Exercise price (pence)
Executive Directors
J Parsons 6,547,197 1.7p 28 February 2022 27 February 2027
S Kaintz 6,547,197 1.7p 28 February 2022 27 February 2027
Non-executive Directors
E Ainsworth 2,805,942 1.7p 28 February 2022 27 February 2027
H Bellingham 2,805,942 1.7p 28 February 2022 27 February 2027
9. Earnings per Share
The basic earnings/(loss) per share is derived by dividing the loss for the
year attributable to ordinary shareholders of the Parent by the weighted
average number of shares in issue. Diluted earnings/(loss) per share is
derived by dividing the loss for the year attributable to ordinary
shareholders of the Parent by the weighted average number of shares in issue
plus the weighted average number of ordinary shares that would be issued on
conversion of all dilutive potential ordinary shares into ordinary shares.
2023 2022
Loss attributable to equity holders of the Parent Company, £'000 (1,262) (2,128)
Weighted average number of ordinary shares of £0.0001 in issue, used for 714,863,518 401,737,832
basic EPS
Earnings per share - basic, pence (0.18) (0.5)
Earnings per share - fully diluted, pence (0.18) (0.5)
At 30 June 2023 and at 30 June 2022, 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:
2023 2022
(a) Share options granted to employees - total, of them 26,687,412 26,783,412
· Vested at the end of reporting period - 96,000
· Not vested at the end of the reporting period 26,687,412 26,687,412
(b) Number of warrants in issue 511,942,464 171,999,329
Total number of contingently issuable shares that could potentially dilute 538,629,876 198,782,741
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 2023, 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
2023 2022 2023 2022
£ £ £'000 £'000
Cost
At 1 July 2021 and 1 July 2022 1,014 - 131 131
Additions (Note 23) 966 1,014 - -
At 30 June 2023 and 30 June 2022 1,980 1,014 131 131
Impairment
At 1 30 June 2023 and 30 June 2022 - - (131) (131)
Net book amount at 30 June 2023 1,980 - - -
Net book amount at 30 June 2022 1,014 1,014 - -
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% Energy storage and trading and grid backup
through ESTEQ Limited))
Atlas Petroleum Exploration Worldwide Limited BVI Ordinary 90% Oil and gas exploration
Corcel Australasia Pty Limited and Niugini Nickel Pty Ltd registered office is
c/o Paragon Consultants PTY Ltd, PO Box 903, Claremont WA, 6910, Australia.
Flexible Grid Solutions Limited registered office is Salisbury House, London
Wall, London EC2M 5PS, United Kingdom.
Flexible Grid One Limited registered office is Salisbury House, London Wall,
London EC2M 5PS, United Kingdom.
Atlas Petroleum Exploration Worldwide Limited registered office is 18000
Groschke Rd. Bldg A-1, Houston, Texas, 77084, USA
Weirs Drove Development Limited (indirectly owned through Flexible Grid
Solutions Limited)
On 19 June 2020, the Company announced an investment acquiring a 50% stake in
Weirs Drove Development Limited, a developer of UK based energy storage and
flexible production projects. The cost of the transaction was an initial
investment and directly attributable acquisitions costs, totalling £37,750,
with the agreement to extend a further £100,000, following the project
meeting all shovel ready criteria. At year end, these conditions had not been
met and so the Company has impaired the value of the project to £nil, pending
further developments. Goodwill in the amount of £25,250 was recognised in
relation to this acquisition and subsequently impaired to £nil as at 30 June
2022.
On 1 December 2020, the Company announced the acquisition of the remaining 50%
interest in Weirs Drove Development Limited, thereby becoming the 100% owner
of the Burwell project for consideration of £90,000. This total potential
consideration was broken down into £15,000 payable in cash and £75,000
payable in new Corcel ordinary shares due at financial close of the initial
50MW of capacity of the Burwell project.
In the year ended June 2022, the investment in Weirs Drove Development Limited
was fully impaired.
On 25 January 2023, the Company disposed of 100% interest in Weirs Drove
Development Limited for £250,000 as financial close of the initial
acquisition of the remaining 50% interest in Weirs Drove Development Limited
noted above never took place prior to disposal, the £75,000 payable in Corcel
new ordinary shares to the vendors were not issued and therefore these amounts
have been recycled from shares to issue reserve to retained earnings. As the
project was held at a carrying value of £4,000 in the group accounts at the
point of disposal, a gain on disposal of £246,000 has been recognised in the
current year Statement of Comprehensive Income.
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
year gave rise to a gain of £41,000.
In aggregate, the Group has realised a gain on disposal of Wiers Drove
Development Limited and Niugini Nickel Pty Ltd of £287,000.
11. Investments in Associates and Joint Ventures
Group Company
Carrying balance £'000 £'000
At 1 July 2021 2,380 2,500
Additions 11 12
Share of loss in joint venture (3) -
Impairment of investment in associate (400) (400)
At 30 June 2022 1,988 2,112
Additions - -
Share of loss in joint venture (76) -
Impairment of investment in associate - DVY (337) (337)
Transfer to assets held for sale (Note 24) (1,575) (1,775)
Net book amount at 30 June 2023 - -
At 30 June 2023, 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 2023
Oro Nickel Vanuatu) (Joint Venture)
Active
DVY196 Holdings Corp (Joint Venture) UK Ordinary 50% 50% Inactive 30 Sept 2022
Oro Nickel Ltd registered office is c/o Sinton Spence Chartered Accountants,
2(nd) Floor, Brian Bell Plaza, Turumu Street, Boroko, National Capital
District, Papua New Guinea.
DVY196 Holdings Corp registered office is 3081 3(rd) Avenue, Whitehorse,
Yukon, Canada Y1A 4Z7.
Summarised financial information for the Company's associates and joint
ventures, where available, is given below for the year as at 30 June 2023:
Company Revenue Loss Assets Liabilities Net Assets
£'000 £'000 £'000 £'000 £'000
Oro Nickel Ltd - (184) 4,683 (4,219) 463
Oro Nickel DVY196 Total Group
Carrying balance £'000 £'000 £'000
At 1 July 2022 1,651 337 1,988
Additions - - -
Share of loss in joint venture (76) - (76)
Impairment - (337) (337)
Transfer to assets held for sale (1,575) - (1,575)
Net book amount at 30 June 2023 - - -
The investment in DVY196 has been fully impaired in the year as the directors
now consider that realisation of the value of this investment is unlikely, and
no further work on the licenses will be undertaken.
12. Financial Instruments with Fair Value through Other Comprehensive Income
(FVTOCI)
30 June 2023 30 June 2022 30 June 2023 30 June 2022
Group Group Company Company
£'000 £'000 £'000 £'000
FVTOCI financial instruments at the beginning of the period 1 7 1 7
Transferred from Available-for-sale category - - - -
Additions - - - -
Disposals - - - -
Revaluations and impairment - (6) - (6)
FVTOCI financial assets at the end of the period 1 1 1 1
Market Value of Investments
The market value as at 30 June 2023 of the investments', available for sale
listed and unlisted investments, was as follows:
30 June 2023 30 June 2022 30 June 2023 30 June 2022
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
30 June 2023 30 June 2022 30 June 2023 30 June 2022
Group Group Company Company
£ £ £ £
FVTPL financial instruments at the beginning of the period - 72 - 72
Additions - - - -
Disposals - - - -
Revaluations - (72) - (72)
FVTPL financial assets at the end of the period (audited) - - - -
13. Trade and Other Receivables
Group Company
2023 2022 2023 2022
£ £ £ £
Non-current
Amounts owed by Group undertakings - - 286 278
Purchased debt - - - -
Amounts owed by related parties
- due from associates and joint ventures 1,517 1,502 1,517 1,502
- due from sale of subsidiary 714 - - -
Total non-current 2,231 1,502 1,803 1,780
Current
Sundry debtors 371 130 64 116
Prepaid directors fees - J Parsons 79 - 79 -
Prepayments 168 147 173 141
Debt from issue of shares 136 - 136 -
Amounts owed by related parties
- due from key management - - - -
Total current 754 277 453 257
Sundry debtors include a balance of:
· £57,493 (2022: £48,493) owed by Curzon Energy Plc, a related
party entity as a result of having a common Director.
· £36,000 (2022: £Nil) owed by Arlington Energy Limited, owner of
the Tring Road project disposed of in the year.
14. Trade and Other Payables
Group Company
2023 2022 2023 2022
£ £ £ £
Trade and other payables 177 191 213 209
Amounts due to related parties: - 10 - 10
· due to Red Rock Resources plc
Accruals 538 123 252 104
Trade and other payables 715 325 465 322
Borrowings (note 20) 602 1,423 602 1,423
Total 1,317 1,747 1,067 1,745
Short Term Borrowings Maturity
2023 2022
£'000 £'000
31 October 2022 - 778
30 September 2024 547 645
Due by 31 January 2024 55 -
Total long-term borrowings 602 1,423
C4 Energy Notes - YA PN II - Riverfort
During the prior year, £100,000 of principal was repaid by the Company in
cash and £128,586 of the principal was converted into ordinary shares of the
Company. In the current year, £175,000 of the principle was repaid by the
Company in cash, no conversions had taken place in the year.
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.
Shares to be Issued
The shares to be issued account represents the share capital that has been
committed to be issued in settlement of the consideration for the acquisition
of the remaining 50% interest in Wiers Drove Developments limited in December
2020. See note 16 below for more details.
Foreign Currency Translation Reserve
The translation reserve represents the exchange gains and losses that have
arisen on the retranslation of overseas operations.
Retained Earnings
Retained earnings represent the cumulative profit and loss net of
distributions to owners.
FVTOCI Revaluation Reserve
The fair value through other comprehensive income (FVTOCI) reserve represents
the cumulative revaluation gains and losses in respect of FVTOCI investments.
Share-Based Payment Reserve
The share-based payment reserve represents the cumulative charge for options
granted, still outstanding and not exercised.
Warrant Reserve
The warrant reserve represents the cumulative charge for warrants granted,
still outstanding and not exercised.
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 2023 2022
£'000 £'000
1,344,381,984 ordinary shares of £0.0001 each (2022: 440,878,295)) 135 44
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 2,842 2,751
Movement in ordinary shares Number
Nominal, £ Share Premium, £
As at 30 June 2021 - ordinary shares of £0.0100 each 384,787,602 38,480 24,161,469
Issued on 21 February 2022 at £0.015 per share (non cash creditor settlement) 7,200,000 720 107,280
Issued on 28 February 2022 at £0.015 per share (non cash conversion of debt) 8,572,400 857 127,729
Issued on 16 March 2022 at £0.015 per share (cash placing) 25,793,332 2,579 384,321
Share issue costs in relation to shares issued on 16 March 2022 - - (48,250)
Issued on 16 March 2022 at £0.015 per share (non cash conversion of debt) 11,333,333 1,133 168,867
Issued on 4 April 2022 at £0.01525 per share (cash placing) 2,295,080 230 34,770
· Issued on 5 April 2022 at £0.0145 per share (non- cash SIP) 496,550 50 14,288
· Issued on 5 April 2022 at £0.0135 per share (non- cash SIP) 399,999 40 10,710
As at 30 June 2022 - ordinary shares of £0.0100 each 440,878,296 44,089 24,961,184
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 1,344,381,984 134,438 28,138,443
The Company's share capital consists of three classes of shares, being:
· Ordinary shares with a nominal value of £0.0001, which are the
company's listed securities;
· Deferred shares with a nominal value of £0.0009;
· A Deferred shares with a nominal value of £0.000095;
· B Deferred share with a nominal value of £0.000099
Subject to the provisions of the Companies Act 2006, the deferred shares may
be cancelled by the Company, or bought back for £1 and then cancelled. These
deferred shares are not quoted and carry no rights whatsoever.
Shares to be Issued
On 1 December, 2020 the Company acquired the remaining 50% interests in WDD
for potential consideration of £90,000, payable in £15,000 in cash and
£75,000 in new ordinary shares. The £75,000 consideration, payable in
shares, was dependant on the financial close of the initial 50MW of capacity
of the Burwell Project. Financial close is defined as having a fully funded
SPV to take the project forward to operational capacity or any potential
disposal or sale.
On 25 January 2023, the Company disposed of 100% interest in Weirs Drove
Development Limited as financial close of the initial acquisition of the
remaining 50% interest in the 50MW Burwell Project noted above never took
place prior to disposal, the £75,000 payable in Corcel new ordinary shares to
the vendors were not issued and therefore these amounts have been recycled
from shares to issue reserve to retained earnings.
Warrants
At 30 June 2023, the Company had 511,942,464 warrants in issue (2022:
171,999,329) with exercise prices ranging £0.004-£0.25 (2022:
£0.01245-£0.60). The weighted average remaining life of the warrants at 30
June 2023 was 482 days (2022: 406 days).
On 21 December 2022 20 million warrants issued on 12 May 2021 were repriced
from a strike price of 2.5p to 0.4p. No adjustments to the fair value of these
warrants have been recognised in these financial statements as a result from
this repricing.
On 21 December 2022 30 million warrants issued on 21 February 2022 were
cancelled with 214.29 million new warrants being issued at a strike price of
0.21p. An additional IFRS 2 charge of £179,080 associated with this
reissuance of warrants has been recognised in these financial statements in
the current year.
Details related to valuation of all warrants are disclosed below.
2023 2022
Group and Company number of warrants number of
warrants
Outstanding at the beginning of the period 171,999,329 170,399,328
Granted during the period 444,582,214 33,800,000
Exercised during the period - -
Lapsed during the period (104,639,079) (32,199,999)
Outstanding at the end of the period 511,942,464 171,999,329
At 30 June 2023, 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
23 Oct 2020 22 Oct 2023 £0.016 13,630,250
12 May 2021 12 May 2024 £0.015 20,000,000
14 December 2021 13 December 2024 £0.015 3,800,000
21 February 2022 20 February 2024 £0.015 30,000,000
20 July 2022 20 July 2023 £0.005 84,000,000
15 Aug 2022 15 Aug 2023 £0.005 5,330,000
15 Aug 2022 15 Aug 2023 £0.004 4,466,500
17 Oct 2022 16 Oct 2025 £0.004 50,000,000
20 Dec 2022 20 Dec 2025 £0.004 116,500,000
21 Dec 2022 31 March 2025 £0.0021 184,285,714
Total warrants in issue at 30 June 2023 511,942,464
The aggregate fair value recognised in warrants reserve in relation to the
share warrants granted during the reporting period was £327,660 (2022:
£70,400) 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, £ 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
20 July 2022 20 July 2023 84,000,000 1 0.005 0.0038 2.2330 21.99 0.0001 4,960
15 Aug 2022 15 Aug 2023 5,330,000 1 0.005 0.0043 2.1700 30.76 0.0003 1,670
15 Aug 2022 15 Aug 2023 4,466,500 1 0.004 0.0043 2.1700 30.76 0.0003 3,210
17 Oct 2022 16 Dec 2025 50,000,000 3 0.004 0.0038 3.1505 57.09 0.0003 74,560
20 Dec 2022 20 Dec 2025 116,500,000 3 0.004 0.0025 3.1495 50.22 0.0003 64,180
21 Dec 2022 31 Mar 2025 184,285,714 2.277 0.0021 0.0026 3.4010 43.94 0.0003 179,080
Total at 30 June 2023 444,582,214 327,660
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 Comp[any 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 2023, 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 Total
5 December 2024 31 January 2025 27 February 2027
Number
S Kaintz - 3,040,567 6,547,197 9,683,764
J Parsons 3,040,567 - 6,547,197 9,587,764
E Ainsworth - - 2,805,942 2,805,942
H Bellingham - - 2,805,942 2,805,942
Employees - - 1,900,000 1,900,000
Total 3,040,567 3,040,567 20,606,278 26,687,412
2023 2022
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 26,783,412 0.022 6,212,534 0.42
Granted during the year - - 20,606,278 0.017
Lapsed during the period (96,000) 0.008 (35,400) 0.45
Outstanding at the end of the period 26,687,412 0.0195 26,783,412 0.022
The exercise price of options outstanding at 30 June 2023 and 30 June 2022,
ranged between £0.017 and £0.80. Their weighted average contractual life was
4.176 years (2022: 4.161 years).
Of the total number of options outstanding at 30 June 2023, £nil (2022:
96,000) had vested and were exercisable. The weighted average share price (at
the date of exercise) of options, exercised during the year, was nil (2022:
nil) as no options were exercised during the reporting year (2022: 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 £52,167 (2022: £17,436).
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 3,506,490 free, matching and partnership
shares were awarded (2022: 896,549), resulting in a share-based payment charge
of £10,800 (2022: £21,500), included into administrative expenses line in
the Consolidated Income Statement.
18. Cash and Cash Equivalents
Group 30 June 30 June
2023 2022
£'000 £'000
Cash in hand and at bank 257 25
Company 30 June 30 June
2023 2022
£'000 £'000
Cash in hand and at bank 256 20
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 2023 2022
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 257 25
Loans and receivables
Receivable from JVs 1,517 1,502
Receivable from sale of subsidiary 714
Other receivables 754 277
Total financial assets held at amortised cost 2,985 1,779
Total financial assets 3,243 1,805
Total current 1,011 302
Total non-current 2,232 1,503
Company 2023 2022
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 256 20
Loans and receivables
Receivable from JVs 1,517 1,502
Purchased debt - current - -
Receivable from subsidiaries 287 278
Other receivables 453 257
Total financial assets held at amortised cost 2,257 2,037
Total financial assets 2,514 2,058
Total current 709 277
Total non-current 1,805 1,780
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:
2023 2022
Group £'000 £'000
30 June
Financial liabilities at amortised cost
Loans and borrowings
Trade and other payables 715 323
Borrowings 602 1,423
Total financial liabilities 1,317 1,746
Trade Receivables and Trade Payables
Management assessed that other receivables and trade and other payables
approximate their carrying amounts largely due to the short-term maturities of
these instruments.
Borrowings
The carrying value of interest-bearing loans and borrowings is determined by
calculating present values at the reporting date, using the issuer's borrowing
rate. The loans are due in January 2024 and September 2024 and impact of the
discounting is immaterial and, therefore, not included into the valuation.
Both loans have been repaid post year end. 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 2023
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 2022
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 UK
Sterling. To mitigate the Group's exposure to foreign currency risk,
non-Sterling cash flows are monitored. Fluctuation of +/- 10% in currencies,
other than UK Sterling, would not have a significant impact on the Group's net
assets or annual results.
The Group does not enter forward exchange contracts to mitigate the exposure
to foreign currency risk as amounts paid and received in specific currencies
are expected to largely offset one another.
These assets and liabilities are denominated in the following currencies as
shown in the table below:
Group GBP AUD USD CAD Total
30 June 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
FVTPL financial assets - warrants - - - - -
FVTPL financial assets - - - - -
Amortised costs financial assets - Non-current receivables 2,231 - - - 2,231
Trade and other payables, excluding accruals 177 - - - 177
Short-term borrowings 602 - - - 602
Group GBP AUD USD CAD Total
30 June 2022
£'000 £'000 £'000 £'000 £'000
Cash and cash equivalents 25 - - - 25
Amortised cost financial assets - Other receivables 258 19 - - 277
FVTOCI financial assets - - - 1 1
FVTPL financial assets - warrants - - - - -
FVTPL financial assets - - - - -
Amortised costs financial assets - Non-current receivables 1,502 - - - 1,502
Trade and other payables, excluding accruals 287 36 - - 323
Short-term borrowings 1,423 - - - 1,423
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
FVTPL financial assets - - - - -
Amortised costs financial assets - Non-current receivables 1,517 - - - 1,517
465 - - - 465
Trade and other payables, excluding accruals
Short-term borrowings 602 - - - 602
Company GBP AUD USD CAD Total
30 June 2022
£'000 £'000 £'000 £'000 £'000
Cash and cash equivalents 20 - - - 20
Amortised cost financial assets - Other receivables 257 - - - 257
FVTOCI financial assets - - - 1 1
FVTPL financial assets - - - - -
Amortised costs financial assets - Non-current receivables 1,780 - - - 1,780
Trade and other payables, excluding accruals 322 - - - 322
Short-term borrowings 1,423 - - - 1,423
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 2022 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 2023
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Align Research Ltd loan 778 - - (78) - 79 (779) - -
C4 / Riverfort Capital and YA II PN Ltd loan 645 - - - - 77 (175) - 547
Total 1,423 - - (78) - 156 (954) - 547
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 and Director remuneration (share-based
payments in the form of options and warrants), in the amount of £10,800
(2022: £21,500), disclosed in Notes 16 and 17;
· Impairment of associates and joint venture projects in the amount
of £337,425 (2022: £400,000);
· Impairment of FVTPL assets in the amount of £nil (2022:
£72,000);
· Share settled transactions to settle creditor balances £97,760
(2022: £72,000).
· On the 3 February 2023 J Parsons was paid £43,968 in shares in
relation to salary.
· During the year the company acquired a subsidiary in which part
of the consideration was shares in the value of £772,963 - See note 23 for
details
· J Parsons received a prepayment of salary in the form of shares
issued amounting to £41,493
· S Kaintz was paid in the form of shares issued amounting to
£18,002
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 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 - - - 966 951
Additions in the year - - - 656 671
Partial disposal on farmout of tenements - (43) - - (43)
c/f - 172 220 1,622 2,014
Group Wowo Gap Mt Weld Canegrass APEX Total
30 June 2022
GBP GBP GBP GBP £'000
£'000 £'000 £'000 £'000
B/f - - - - -
Acquired on business combination 1,026 - - - 1,026
c/f 1,026 - - - 1,026
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 £392,000 (2022: £nil) and the total value of Exploration and evaluation
assets at the year end for the Group was £2,014,000 (2022: £1,026) and for
the Company was £nil (2022: £nil).
22. Disposal of Niugini Nickel Pty Ltd
On 26 June 2023 the Company, via its 100% owned subsidiary Corcel Australasia
Pty Ltd, completed the disposal of 100% of the shares in Niugini Nickel Pty
Ltd ("NN") from Resource Mining Corporation Pty Ltd ("RMC").
The Company has determined the fair value of the assets and liabilities of NN
to be derecognised in these consolidated financial statements as follows:
Fair value recognised on derecognition
£(000's)
Assets
Cash 4
Receivables 34
Property, plant and equipment 41
Exploration and evaluation assets 967
Foreign exchange reserve 43
Total Assets 1,089
Liabilities
Trade and other payables (20)
ST borrowings (95)
Total liabilities (115)
Total identifiable net assets at fair value 974
Total Present Value of consideration 1,015
Gain on disposal 41
Consideration for the disposal of Niugini Nickel is receivable in three
tranches, being:
· Tranche 1 - US$500,000 on completion of the transaction, less
carried costs of running the project;
· Tranche 2 - US$900,000 24 moths from completion of the
transaction; and
· Tranche 3 - US$1,400,000 once the mine has been developed to
production and has generated US$2,400,000 in net profits.
The Company has undertaken a fair value exercise to determine the appropriate
recognition value for the consideration receivable on completion of the
disposal, including (a) discounting Tranche 2 for the 24 month period prior to
receipt and (b) assessing the likely point in time for the satisfaction of the
conditions for Tranche 3 (estimated to be 5 years), discounting the value of
the receivable to present value over this 5 year term and applying a risk
weighting factor of 25% to the receivable to reflect the commercial risks
inherent in a successful development of the project. Following this process
the fair value of the consideration receivable has been determined as:
· Tranche 1 - £301,283
· Tranche 2 - £561,424
· Tranche 3 - £152,579
· Total - £1,015,305
23. Acquisition of Atlas Petroleum Exploration Worldwide Limited
On 22 May 2023 the company completed the acquisition of 90% of the shares in
Atlas Petroleum Exploration Worldwide Limited (APEX) from Quantum Investment
Group Inc. The company has accounted for the fair value of this consideration
cost to acquire the asset.
The company has determined the fair value of the asset of APEX to be
recognised in these consolidated financial statements as follows:
Fair value recognised on acquisition
£(000's)
Assets
Exploration and evaluation assets 966
966
Total Assets
Total identifiable net assets at fair value 966
Total PV of consideration 966
Under IFRS 3, a business must have three elements: inputs, processes and
outputs. APEX is an early stage exploration company and has no near term plans
to develop a mine. APEX does have titles to mineral properties but these could
not be considered inputs because of their early stage of development. APEX has
no processes to produce outputs and had not completed a feasibility study or a
preliminary economic assessment on any of its properties at the time of
acquisition, nor did it hold any infrastructure or assets that could produce
outputs. Therefore, the Directors' conclusion is that the transaction is an
asset acquisition and not a business combination. The fair value adjustment to
intangible assets of £966,000 represents the consideration in relation to the
purchase.
The company acquired had no assets or liabilities other than its exploration
assets and so 100% of the FV of the consideration paid for the acquisition has
been ascribed to the E&E assets. At the point of acquisition consideration
payable included shares to issue of £800k (subsequently issued prior to year
end at a fair market value of £660k), shares issued of £113k and amounts
payable in cash of £178k.
24. 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.
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 in the joint venture held in the
group was £1,575,000 (2022: £1,651,000) at the reporting date, and has been
reclassified on the balance sheet as Assets Held for Sale. The Company valued
the investment at £1,775,000 (2022: £1,775,000).
The results of the entity for the year are presented below:
£(000's)
Income Statement
Administration expenses (183)
(183)
The associated loss to Corcel at 41% interest is £75,571.
25. Significant Agreements and Transactions
Financing
· On 27 July 2022 the Company completed a fundraising of £357,320
including a Broker Option, resulting in the issuance of a further 5,330,000
new ordinary shares and 5,330,000 warrants.
· On 17 October 2022, the Company announced that it had agreed
terms with a new cornerstone investor, who would receive a board seat, and
would invest $200,000 at a price of £0.004 with 1 for 1 warrants exercisable
at £0.005 per share.
· On 31 October 2022, the Company announced that it had
successfully restructured its debt position originally due 31 October 2022, by
making a £150,000 immediate payment with the balance at that time of
£627,600 deferred to 31 March 2023. The Company agreed a refinancing fee of
£77,760 to be paid in shares at the lowest VWAP traded between 31 October 22
and 20 December 2022. The lenders were also given the right to convert any
outstanding balances at this same price between 20 December 2022 and 31 March
2022. Outstanding balances were to accrue a monthly coupon of 1%. A series
of potential repayment scenarios linked to asset sales were also put in place
at that time. Lastly the Company acquired the option to by 20 December 2022
either pay a fee of £475,000 in cash or to extend 112,500,000 existing
warrants priced at £0.004 until 31 March 2025 with a resetability clause
extended to 31 December 2023. On 21 December 2022, the Company further
announced that it had paid the lenders a refinancing fee of £77,759 in the
form of 37,028,094 new ordinary shares. The Company further issued 5,000,000
new ordinary shares in full satisfaction of the ESA fee termination
obligation. Lastly the Company had elected to extend and increase
112,500,000 warrants to 214,285,714 warrants allowing the investor to purchase
that number of new ordinary shares at a new price of £0.0021 until 31 March
2025.
· On 14 December 2022, the Company announced that it had raised
proceeds of £466,000 at a 95% premium to the current share price, from
Auspect Investment Pty Ltd, a private Australian investment company,
introduced by incoming Director, Yan Zhao. Gross proceeds of £466,000 were
raised from the issue of 116,500,00 new ordinary shares at £0.004 per
share. The Company also issued the investor with one warrant for every one
share exercisable at £0.005 per share for three years. On 21 December 2022,
the Company further announced that Yan Zhao would personally subscribe for
1/3(rd) of the placing, being a total of 38,833,333 shares through his family
office, Mountain Stone Australia Trust, managed by OZJ Global Pty Ltd, with
the balance of the shares to be taken by Auspect Investment Pty Ltd.
· On 25 January 2023 the Company announced that it had reduced
total corporate debt outstanding by £777,600 and completely repaid the debt
due originally in October 2022. Following these payments the balance of
outstanding corporate debt was £672,941 with an initial payment due 23
January 2023, and smaller monthly payments due through June 2023.
· On 30 January 2023 the Company announced that it had agreed with
its lenders to make a cash payment of £235,671, and then refinance a new
principal amount of £471,343. This new balance would be subject to a 12
month repayment holiday and then repaid in 8 equal instalments starting in
February 2024. The balance of the loan would carry a 6% interest rate and
will be convertible at a fixed price of £0.004 per share, a 54% premium to
the closing price of 27 January 2023. The Company retains the right to repay
the loan early in cash subject to a 5% early repayment fee.
· On 31 January 2023, the Company announced that James Parsons, the
Executive Chairman, would accept 16,910,618 new ordinary shares in Corcel at a
price of £0.00265, in lieu of salary payments originally due from February
2023 to May 2023 as well as some historic obligations due to him.
· On 28 March 2023 the Company announced that pursuant to its
recent pivot to oil and gas, that the Company had agreed a placing with a new
cornerstone investor group. The fundraising was for a total of £1,055,515
through the issue of 301,575,574 new ordinary shares at a price of £0.0035
per share payable to the Company in three tranches. The investors were also
to receive 211,102,900 warrants enabling their owners to purchase new ordinary
shares at a price of £0.008 per share for a period of two years. Upon
completion of the fundraising, the group has nominated Antoine Karam as a
non-Executive to the Board of the Company.
· On 24 May 2023, simultaneous to the acquisition of a 90% interest
in APEX in Angola, the Company announced an investment in Corcel of £282,741
in four tranches by APEX shareholders and investors from the oil and gas
sector in Brazil and Angola, which would result in the issuance of 70,685,250
new ordinary shares at a price of £0.004.
· On 14 June 2023 the Company announced that James Parsons had
agreed to receive a portion of his salary in his new role as CEO for the next
six months in the form of new ordinary shares in the Company. As such Mr.
Parsons had been issued 12,447,965 new ordinary shares at a price of £0.004
per share. The Company further announced that it had agreed to settle other
historic employee obligations through the issuance of 2,425,863 new ordinary
shares also at a price of £0.004.
Battery Metals Joint Venture
· On 17 October 2022 the Company announced that it had entered into
an MOU to reorganize the Company's battery metal interest into a new carried
battery metal joint venture to be listed in Asia. The transaction, subject
to contract would give Corcel a 50% interest in the proposed joint venture,
which would own Corcel's 100% interest in the Wowo Gap project as well as its
41% interest in the Mambare nickel project. The counterparty has agreed to
contribute a stake in the Doncella lithium project in Argentina. Corcel
would benefit from a $1.5m carried interest and a 1.5% gross revenue royalty
on the Wowo Gap project, and would nominate half of the board of the joint
venture.
· On 1 March 2023 the Company announced that it had entered into
agreements with Integrated Energy Metals ("IEM") to restructure the Company's
PNG nickel/cobalt assets into a new carried vehicle, Integrated Battery Metals
("IBM"). The intention was to list IBM in Australasia once the transaction
was completed. Completion of the transaction was conditional on the
following:
o Corcel's Mambare partner's pre-emption rights being waived during a 45-day
review period
o Hanacolla shares being transferred into IBM
o Initial funding of Corcel's carried interest being demonstrated in the
form of US$1m deposited into IBM's bank account by IEM via a convertible loan
structure
o Consent and assignment of Corcel's existing gross smelter royalty over
Mambare to IBM
o Execution and commencement of the IBM shareholders agreement
The Company further announced that arrangements had been put in place to begin
Corcel's carried interest period as of 1 January 2023. Initial funding into
IBM would be in the form of a 3 year convertible loan note, with a 5% annual
coupon which would convert at the lower of US$1.35 or the price of any IPO
completed by this time. The agreement included standard drag and tag
provisions in the event of a sale of the equity of IBM.
· On 14 April 2023 the Company announced that it had been notified
by Battery Metals Pty Ltd, its partner at the Mambare nickel/cobalt project,
of its intention to exercise its pre-emption rights and buy out Corcel's 41%
interest in the project. The Company clarified that it was following up on
several details of this notional acceptance, and would make additional
announcements in due course.
Sale of Wowo Gap Nickel/Cobalt Project
· On 12 June 2023 the Company announced that it had agreed to sell
its 100% interest in the Wowo Gap nickel project in Papua New Guinea to
Integrated Battery Metals for up to US$2.8M. This agreement was noted to
supersede that covering the battery metals joint venture previously announced
on 1 March 2023, as the parties had agreed to restructure the original
transaction into two separate sale processes.
Mt. Weld Rare Earth Element Project
· On 19 October 2022 the Company announced that had signed an
exclusive 45-day option to acquire 100% of the Mt. Weld REE project, a granted
mineral tenement located 1.4KM from the Lynas Rare Earth Limited Mine, near
Laverton, Western Australia. The transaction consisted of a £15,000
non-refundable deposit with the option price set at £200,000 payable via the
issuance of 50,000,000 new ordinary shares in Corcel at a price of £0.004.
· On 5 December 2022, the Company announced that it had exercised
the option to acquire a 100% interest in the Mt. Weld REE project through the
issuance of 50,000,000 new ordinary shares at £0.004 equating to £200,000 of
total consideration.
· On 4 January 2023, the Company announced that had agreed a
farm-out with Riversgold Ltd (ASX:RGL) covering its recently acquired 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.
Canegrass Lithium Project
· On 22 February 2023, the Company announced that it had agreed on
a 30-day option with Huntsman Exploration Inc. ("HMAN") to acquire 100% of the
lithium rights at the Canegrass Lithium Project, consisting of several granted
tenements in Western Australia. Corcel agreed to pay an AUD 20,000 option
payment and would commence due diligence on the project. If Corcel chose to
exercise the option, it would issue HMAN 50,000,000 new ordinary shares at a
deemed price of £0.004 equating to £200,000.
· On 4 April 2023, the Company announced that it had exercised its
option over the Canegrass Lithium project, and as such would issue 50,000,000
new ordinary shares at the previously agreed price of £0.004 per share
equating to £200,000 of total consideration.
APEX Angola Acquisition
· On 24 May 2023 the Company announced that it had acquired a 90%
interest in Atlas Petroleum Worldwide Limited ("APEX") with several working
interests in the Kwanza Basin, Angola. Consideration for the acquisition
would be settled through the issuance of 200,000,000 new ordinary shares at a
price of £0.0033 and locked up for 18 months. The Company announced that
Mr. Scott Gilbert, a vendor, would join the board as a non-executive subject
to customary regulatory checks. At the same time the Company announced that
it had agreed to buy out a local exploration and production company, whereby
this entity would have had entitlements to 25% of the APEX position in the
three licenses. This buy-out included Corcel issuing 28,240,839 new ordinary
shares and paying US225,000 in cash. The buy-out shares were to be locked in
for 18 months after the transaction. A second vendor, a Luanda based
ex-Chevron oil and gas professional, would join the Company as Managing
Director Angola.
Flexible Grid Solutions
· On 16 November 2023 the Company announced that it along with its
partners had agreed a sales price of £317,946 for the Tring Road Gas Peaker
Plant, with £121,146 to be paid immediately, and a further £196,800 at
completion. The completion of this sale was subsequently announced on 7
December 2022.
· On 25 January 2023 the Company announced the sale of its 100%
interest in the Burwell Energy Storage Project for cash proceeds of £200,000
plus a reimbursement of Corcel's grid deposit of £50,000. The sale
constituted the formal closure of the Flexible Grid Solutions division.
26. Commitments
As at 30 June 2023, the Company had entered into the following commitments:
· Exploration commitments: On-going exploration expenditure is
required to maintain title to the Group mineral exploration permits. No
provision has been made in the Financial Statements for these amounts as the
expenditure is expected to be fulfilled in the normal course of the operations
of the Group.
· On 1 March 2023, the Company extended its existing lease at We
Work, Aldwych House, through to 31 March 2024.
27. Related Party Transactions
· Related party receivables and payables are disclosed in Notes 13
and 14, respectively.
· The key management personnel are the Directors and their
remuneration is disclosed within Note 8.
28. Events After the Reporting Period
· On 14 July 2023 the Company announced that it had paid $821,000
for its three Angolan oil block licenses to ANPG (Agência Nacional de
Petróleo, Gás e Biocombustíveis) in the form of required signature
bonuses.
· On 19 July 2023 the Company announced Mr. James Parsons had
resigned from the Board with immediate effect and would continue to work with
the Company in an advisory capacity during his notice period.
· On 25 August 2023, the Company announced that it had received
notice from the operator, that activities had commenced including preparations
for drilling and appraisal activities, at KON-11, where the Company holds a
20% working interest.
· On 7 September 2023, the Company announced that the first well at
Block KON-11, the Tobias-13 well, had spudded successfully, and that the
initial workplan was focused on the consortium moving directly to early oil
production should the drilling programme be successful.
· On 18 September 2023, the Company announced that had agreed terms
with Extraction SRL, a Company controlled by the Executive Chairman, to extend
a total of £10m to the Company in the form of convertible loan notes. The
Company had agreed with Extraction on an immediate drawdown of £1m in October
2023, and a further £1m by January 2024. A further £8m was to be made
available over the three-year term and has now agreed with Extraction SRL to
allow for immediate drawdown of the entire balance of £9m remaining. The loan
would be convertible into new ordinary shares of the Company at a fixed price
of £0.008, a 79.8% premium from the most recent closing price, and would bear
a 12% interest rate per annum. Conversion may take place at any point
following 30 days from drawdown, at the election of the debt holder, with full
settlement of the facility owing on maturity, being 36 moths from the date of
entering into the facility, in either cash or shares at the election of the
debto holder.
· On 19 September 2023 the Company announced that it had received
notice of the conversion of £100,00 of outstanding loan notes from its
lenders, into 25,000,00 new ordinary shares at a price of £0.004.
· On 27 September 2023, the Company announced that had received
notice of the exercise of 75,000,000 warrants at a price of £0.0021 per share
for gross proceeds of £157,500. Accordingly, the Company issued 75,000,00
new ordinary shares to the investor. The Company further announced that it
had received notice of the conversion of £100,000 of outstanding loan notes
and as such had issued 25,000,00 new ordinary shares at a price of £0.004 per
share. Lastly, the Company announced that it had notified its lenders that
it had repaid the balance of the loan outstanding following this conversion,
which fully retired the facility.
· On 16 October 2023 the Company announced that had received a
revised offer from Integrated Battery Metals to purchase the Company's 41%
interest in the Mambare nickel/cobalt project. IBM had conditional agreed to
purchase this interest and all outstanding shareholder loans for up to US$4.1,
broken out as follows:
o US$1.6M due at completion of the sale and purchase of Corcel's 41%
interest in Oro Nickel Vanuatu("ONV"), the project holding company
o Also at completion, a further US$1.4M payable in cash or the issuance of
1.5M shares of IBM at an issue price of USD1 per share at the discretion of
Corcel
o 24 months after completion a further payment of US$1.0M either in cash or
in IBM shares (at the sole discretion of Corcel); The IBM shares are to be
valued as follows:
§ If listed, then priced at the 5-day volume weighted average price on the
last five days prior to the 2nd anniversary or;
§ If IBM is not publicly listed then USD1.0 per share
o Separately, and not included in the main transaction, US$0.148M for the
sale and purchase of Corcel's gross smelter royalty in respect of the Mambare
nickel/cobalt project
· The Company indicated that a disposal of this size relative to the
size of the Company constituted a fundamental disposal according to rule 15 of
the AIM Rules for Companies and that the sale of the Wowo Gap project to the
same buyer would need to be aggregated with the Mambare disposal in accordance
with rule 16 of the AIM Rules for Companies. As such it would be a
requirement of the AIM Rules for Companies that the disposal be approved by
shareholders at a general meeting, which would be convened in due course.
Following Corcel shareholder approval the Company would then notify its
partner at the project of a bonafide and unconditional offer for its interest,
starting a 45-day pre-emption period in which the partner could legally
pre-empt the transaction.
· On 3 November 2023 the Company announced that it had been
informed by the operator at KON-11, Sonangol, the state oil company, that the
TO-13 well had now completed at a downdip location from historic production at
a planned target depth of 958.5m. The full target Binga reservoir section of
approximately 120m had been encountered with several productive zones seen in
multiple intervals, and these results confirmed the ability to reactivate
production at the Block through the use of an early production system;
implying significant hydrocarbon potential remaining. The operator further
confirmed that a rig move to the TO-14 well, a second well location to be
drilled, was underway.
· On 13 November 2023 the Company announced that the Tobias-14
well, where the company has 20% working interest (18% net) had spudded in
KON-11, in the Kwanza Basin, onshore Angola.
· On 22 November 2023 the Company announced that it had
commissioned APEX Geoscience to conduct initial exploration activities at the
Company's 100% Canegrass lithium project in Western Australia.
· Over the course of July 2023 and September 2023, the Company
repaid approx. £390,000 in debt owing on the C4/Riverfort Capital loan
facility which stood at £547,000 as at the reporting date of these financial
statements.
29. Control
There is considered to be no controlling party.
30. 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 2023
and the consolidated income statement, consolidated statement of comprehensive
income, consolidated statement of changes in equity and the consolidated cash
flow statement for the year then ended have been extracted from the Group's
2022 statutory financial statements. Their report was unqualified and
contained no statement under sections 498(2) or (3) of the Companies Act 2006.
The financial statements for 2023 will be delivered to the Registrar of
Companies by 31 December 2023.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR PPGQAGUPWPPBRecent news on Corcel
See all newsREG - Corcel PLC - KON-16 Environmental Impact Assessment Contract
AnnouncementREG - Corcel PLC - TR-1: Notification of major holdings
AnnouncementREG - Corcel PLC - Half-year Report
AnnouncementREG - Corcel PLC - TR-1: Notification of major holdings
AnnouncementREG - Corcel PLC - TR-1: Notification of major holdings
Announcement