REG - Critical Metals PLC - Final Results
31/10/2022 07:01
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20221031:nRSe5515Ea&default-theme=true
RNS Number : 5515E Critical Metals PLC 31 October 2022
Critical Metals plc / EPIC: CRTM / Market: Main Market
31 October 2022
Critical Metals plc
("Critical Metals" or the "Company")
Final Results
Critical Metals plc, a mining company established to acquire mining
opportunities in the critical and strategic metals sector, currently
developing an ex-producing copper cobalt mine in the Democratic Republic of
Congo ("DRC"), is pleased to announce its Final Results for the year ended 30
June 2022.
A copy of this announcement and the Annual Report for the year ended 30 June
2022 will be made available on the Company's website
at www.criticalmetals.co.uk (http://www.criticalmetals.co.uk/) .
Highlights:
· Completed the acquisition of a controlling stake of 57 percent in
Madini Occidental Limited, which holds an indirect 70 percent interest in the
Molulu Project
· Successful readmission of the Company to trading on the Main Market
of the London Stock Exchange
· Carried out a £1.8 million fundraise in conjunction with the
Acquisition
· Welcomed Lloyd Kirtley as DRC Project Field Manager
· Acquisition presents a value accretive opportunity to gain near-term
exposure to the demand for critical minerals
· Mine development underway with production expected to commence by the
end of the calendar year, generating near-term free cashflow going forward.
Statement from the Board
Dear Shareholder,
I am pleased to present the consolidated financial statements for Critical
Metals plc (the "Company" or "Critical Metals") for the year ended 30 June
2022. During the year under review, the Company and its advisers worked
tirelessly in its efforts to seek readmission of the Company to trading in
what transpired to be a time consuming and complex transaction spanning a
number of jurisdictions, negotiating and renegotiating agreements, completing
financial and 'on the ground' due diligence, and all in a testing macro
environment with headwinds from the global pandemic, and more recently much
geopolitical and economic instability.
I am thrilled to be able to report that post year end has been a
transformative time for Critical Metals, having successfully completed the
readmission of the Company to trading on the Main Market of the London Stock
Exchange ("LSE") following the completion of the acquisition of our interest
in the Molulu Project in early September ("Molulu Project" or the
"Acquisition"). The Board and I are pleased to have been able to bring this
Acquisition to fruition for our dedicated shareholders, acquiring a
controlling stake of 57 percent in Madini Occidental Limited, which holds an
indirect 70 percent interest in the Molulu Project. The Molulu Project is an
ex-producing medium-scale copper/cobalt asset in the Katangan Copperbelt,
Democratic Republic of Congo ("DRC"), adjacent to producing mines and
previously mined by artisanal miners from four pits, and importantly in
proximity to copper smelters which provides selling channels for copper &
cobalt production.
I was elated with the support we received from existing and new shareholders
in the £1.8 million fundraise in conjunction with the Acquisition, in what
can only be described as tumultuous time in the equity markets. With the
Company funded for the foreseeable future, we will use this capital, along
with existing cash resources, for drilling, mine site development and general
working capital purposes.
We remain certain that this Acquisition presents a fantastic opportunity to
gain near-term exposure to the demand for critical minerals. Copper is a key
commodity required for the global transition to Net Zero, needed in industrial
infrastructure, wind turbines, and electric vehicles amongst others, thus the
global demand is remaining strong. The copper price increased from US$2.14/lb
to a current price of around $3.40/lb since 2016 - driven by global economic
growth, increasing infrastructure investment and global supply-side deficit.
As Goldman Sachs has forecast copper to reach US$15,000/ton, or $6.80/lb by
2025, we are in the right place at the right time to benefit from this trend.
Interestingly, the DRC is the world's fourth largest producer of copper,
producing 1.6 million metric tonnes in 2020 and supplying 60% of the world's
cobalt. Cobalt is used across commercial, industrial, and military
applications but has risen in importance due to its role in the production of
rechargeable batteries to power electric vehicles, nuclear plant builds, and
energy storage from solar, wind, and renewable energy sources. Cobalt prices
are currently around $23/lb, averaging $25/lb over the last five years with
demand forecast to increase more than twentyfold by 2040, according to the
International Energy Agency.
Funding
Upon readmission in September, the Company successfully raised £1,800,000
(before expenses) via a placing of 9,000,000 new Ordinary Shares at an issue
price of 20 pence per share (the "Placing"). The net proceeds of the Placing,
in conjunction with the Company's existing cash resources, was allocated
primarily in connection with the consideration for the Acquisition, with the
balance used for drilling, mine site upgrades and general working capital
purposes.
Appointments
The Company was delighted to welcome Lloyd Kirtley as DRC Project Field
Manager and a cornerstone member of the team in early October. Mr. Kirtley has
over 40 years' experience in mining and mineral exploration as a miner and
field manager including managing a number of logistics and field programmes at
several African based exploration and production companies. Mr. Kirtley will
support all activities at the Molulu Project, including all environmental and
social assessments, all start-up mining activities, camp management, and other
key field requirements. The appointment of Mr. Kirtley so swiftly after the
completion of our acquisition of the Molulu Project in DRC represents a
strategic move for the Company in transitioning this ex-producing
copper/cobalt asset in a highly prospective region, into production as swiftly
and economically as possible.
Outlook
The Board would like to acknowledge the support of our shareholders through
this complex and lengthy process, and I am confident that the experienced team
now assembled will be able to deliver a steady stream of news flow from this
project as we move towards developing an efficient copper and cobalt producing
operation.
Looking ahead, having completed the Molulu Project Acquisition and readmission
to trading on the LSE of the enlarged group, the Company has already begun
preparing for the next stages of mine development. As previously reported, the
Company intends on completing further exploration work and technical studies
required to assess the larger technical and economic viability, with the
mineralisation evident at the surface and at shallow depths. With close
proximity to copper smelters, we expect to bring this ex-producing
copper/cobalt asset, in a highly prospective region, into production in the
near-term, generating cashflow going forward.
As Chairman and Chief Executive Officer, I look forward to updating the market
with our progress at the Molulu Project site in the near future with various
operational and equipment updates. This is a very exciting time for Critical
Metals.
Russell S. Fryer
Executive Chairman & CEO
28 October 2022
**ENDS**
For further information on the Company please visit www.criticalmetals.co.uk
(http://www.criticalmetals.co.uk/) or contact:
Russell Fryer Critical Metals plc Tel: +44 (0)20 7236 1177
Lucy Williams / Peterhouse Capital Limited, Corporate Broker Tel: +44 (0)20 7469 0936
Heena Karani Tel: +44 (0)20 7469 0933
Catherine Leftley/Ana Ribeiro/Isabelle Morris St Brides Partners Ltd, Tel: +44 (0)20 7236 1177
Financial PR
About Critical Metals
Critical Metal's has acquired a
controlling 57% stake in Madini Occidental Limited, which holds an
indirect 70% interest in the Molulu copper/cobalt project, an ex-producing
medium-scale asset in the Katangan Copperbelt in the Democratic Republic of
Congo. In line with its investment strategy of focusing primarily on known
deposits, targeting projects with low entry costs and potential to generate
short-term cash flow; the Company intends on bringing the Molulu Project
into near term production at the earliest opportunity.
The Company will continue to identify future assets that are line with
its stated acquisition objective of low CAPEX and OPEX projects with near
term production, concentrating on minerals that are perceived to have
strategic importance to future economic growth and generate significant
value for shareholders.
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2022
Notes Period ended 30 June 2022 Period ended 30 June 2021 £
£
Revenue
Revenue from continuing operations - -
- -
Expenditure
Costs associated with listing 4 (202,594) (122,306)
Other expenses 4 (461,264) (225,278)
(663,858) (347,584)
Finance costs
Finance income 2,115 -
2,115 -
Loss on ordinary activities before taxation (661,743) (347,584)
Taxation on loss on ordinary activities - -
Loss and total comprehensive income for the year attributable to the owners of (661,743) (347,584)
the company
Earnings per share (basic and diluted) attributable to the equity holders 8 (1.59) (1.18)
(pence)
Consolidated Statement of Financial Position as at 30 June 2022
Notes 30 June 2022 £ 30 June 2021 £
NON-CURRENT ASSETS
Loan notes 9 39,827 -
TOTAL NON-CURRENT ASSETS 39,827 -
CURRENT ASSETS
Trade and other receivables 10 55,409 17,851
Cash at bank and in hand 11 824,251 1,483,544
TOTAL CURRENT ASSETS 879,660 1,501,395
TOTAL ASSETS 1,501,395
919,487
CURRENT LIABILITIES
Trade and other payables 13 110,890 31,055
TOTAL LIABILITIES 110,890 31,055
NET ASSETS 808,597 1,470,340
EQUITY
Called up share capital 14 208,298 208,298
Share premium account 14 1,735,315 1,735,315
Share based payment reserve 15 45,838 45,838
Retained earnings (1,180,854) (519,111)
TOTAL EQUITY 808,597 1,470,340
Consolidated Statement of Changes in Equity
For the year ended 30 June 2022
Issued Share Capital Share Premium SBP Reserve Retained Earnings Total Equity
£ £ £ £ £
As at 30 June 2020 71,428 68,572 - (171,527) (31,527)
Loss for the year - - - (347,584) (347,584)
Other comprehensive income - - - - -
Total comprehensive income for the year - - - (347,584) (347,584)
Shares issued during the year 136,870 1,754,331 - - 1,891,201
Share issue costs during the year - (87,588) - - (87,588)
Warrants issued during the year - - 45,838 - 45,838
Total transactions with owners 136,870 1,666,743 45,838 - 1,849,451
As at 30 June 2021 208,298 1,735,315 45,838 (519,111) 1,470,340
Loss for the year - - - (661,743) (661,743)
Other comprehensive income - - - - -
Total comprehensive income for the year - - - (661,743) (661,743)
Total transactions with owners - - - - -
As at 30 June 2022 208,298 1,735,315 45,838 (1,180,854) 808,597
Consolidated Statement of Cashflow
For the year ended 30 June 2022
30 June 2022 30 June 2021 £
£
Cash from operating activities
Loss for the year (661,743) (347,584)
Adjustments for:
Foreign exchange 26,095 8,009
Operating cashflow before working capital movements (635,648) (339,575)
Increase in trade and other receivables (37,558) (17,435)
Increase / (decrease)in trade and other payables 79,835 (62,960)
Net cash used in operating activities (593,371) (419,970)
Cash from financing activities
Proceeds on the issue of shares - 1,849,451
Net cash from financing activities - 1,849,451
Cash from investing activities
Accrued interest income (2,115) -
Purchase of convertible loan notes (37,712) -
Net cash from investing activities (39,827) -
Net (decrease) / increase in cash and cash equivalents (633,198) 1,429,481
Cash and cash equivalents at beginning of year 1,483,544 62,072
Foreign exchange gain (26,095) (8,009)
Cash and cash equivalents at end of period 10 824,251 1,483,544
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
1. General Information
Critical Metals plc and its subsidiary (the "Group") looks to identify
potential companies, businesses or asset(s) that have operations in the
natural resources exploration, development and production sector.
The Company is domiciled in the United Kingdom and incorporated and registered
in England and Wales as a public limited company. The Company's registered
office is The Broadgate Tower, 20 Primrose Street, London UK, EC2A 2EW. The
Company's registered number is 11388575.
2. Accounting policies
The principal accounting policies applied in preparation of these consolidated
financial statements ("financial statements") are set out below. These
policies have been consistently applied unless otherwise stated.
2.1. Basis of preparation
The financial statements for the period ended 30 June 2022 have been prepared
by Critical Metals Plc in accordance with UK adopted International Accounting
Standards ("IFRS") and with the requirements of the Companies Act 2006. The
financial statements have been prepared under the historical cost convention.
2.2. Going concern
The financial statements have been prepared on a going concern basis, which
assumes that the Company will continue to meet its liabilities as they fall
due.
The Company has cash and cash equivalents of £824,251 at 30 June 2022 however
on 12 September 2022 the Company successfully raised £1.8 million (before
costs) to fund its operations in the Democratic Republic of Congo. The
Directors have prepared detailed forecasts and analysis and are of the view
this is sufficient to fund the Companies expenditure over the next 12 months
from the date of approval of these financial statements, without raising funds
in this period.
The Company's auditors have made reference to the timing of cashflows in
relation to the Molulu Project by raising a material uncertainty based on an
assumption that the proposed mining development plan not progressing on
schedule, thus delaying the receipt of revenue from production. The Directors
do not foresee that the timeline would change materially and therefore
conclude that the Company has adequate resources to continue in operational
existence for the foreseeable future.
Accordingly, they continue to adopt the going concern basis in preparing the
financial statements.
2.3. Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand, and demand
deposits with banks and other financial institutions.
2.4. Foreign currency translation
The financial statements are presented in Sterling which is the Company's
functional and presentational currency.
Transactions in currencies other than the functional currency are recognised
at the rates of exchange on the dates of the transactions. At each balance
sheet date, monetary assets and liabilities are retranslated at the rates
prevailing at the balance sheet date with differences recognised in the
Statement of comprehensive income in the period in which they arise.
2.5. Basis of consolidation
The consolidated financial statements incorporate the financial statements of
the Company and entities controlled by the Company (its subsidiaries) made up
to 30 June each year. Per IFRS 10, control is achieved when the Company:
· has the power over the investee;
· is exposed, or has rights, to variable returns from its involvement
with the investee; and
· has the ability to use its power to affects its returns.
The Company reassesses whether or not it controls an investee if facts and
circumstances indicate that there are changes to one or more of the three
elements of control listed above. When the Company has less than a majority
of the voting rights of an investee, it considers that it has power over the
investee when the voting rights are sufficient to give it the practical
ability to direct the relevant activities of the investee unilaterally. The
Company considers all relevant facts and circumstances in assessing whether or
not the Company's voting rights in an investee are sufficient to give it
power, including:
· the size of the Company's holding of voting rights relative to the size
and dispersion of holdings of the other vote holders;
· potential voting rights held by the Company, other vote holders or
other parties;
· rights arising from other contractual arrangements; and
· any additional facts and circumstances that indicate that the Company
has, or does not have, the current ability to direct the relevant
activities at the time that decisions need to be made, including voting
patterns at previous shareholders' meetings.
Consolidation of a subsidiary begins when the Company obtains control over the
subsidiary and ceases when the Company loses control of the subsidiary.
Specifically, the results of subsidiaries acquired or disposed of during the
year are included in profit or loss from the date the Company gains control
until the date when the Company ceases to control the subsidiary. Where
necessary, adjustments are made to the financial statements of subsidiaries to
bring the accounting policies used into line with the Group's accounting
policies.
All intragroup assets and liabilities, equity, income, expenses and cash flows
relating to transactions between the members of the Group are eliminated on
consolidation.
The Group recognises any non-controlling interest in the acquired entity at
the non-controlling interest's proportionate share of the acquired entity's
net identifiable assets. Subsequent to acquisition, the carrying amount of
non-controlling interests is the amount of those interests at initial
recognition plus the non-controlling interests' share of subsequent changes in
equity.
Profit or loss and each component of other comprehensive income are attributed
to the owners of the Company and to the non-controlling interests. Total
comprehensive income of the subsidiaries is attributed to the owners of the
Company and to the non-controlling interests even if this results in the
non-controlling interests having a deficit balance.
2.6. Investment in subsidiary
The consolidated financial statements incorporate the results of subsidiaries
using the acquisition method. In the statement of financial position, the
acquiree's identifiable assets, liabilities and contingent liabilities are
initially recognised at their fair values at the acquisition date. The results
of acquired operations are included in the consolidated statement of
comprehensive income from the date on which control is obtained. They are
deconsolidated from the date on which control ceases.
2.7. Financial instruments
IFRS 9 requires an entity to address the classification, measurement and
recognition of financial assets and liabilities.
a) Classification
The Company classifies its financial assets in the following measurement
categories:
· those to be measured subsequently at fair value (either through
OCI or through profit or loss);
· those to be measured at amortised cost; and
· those to be measured subsequently at fair value through profit or
loss.
The classification depends on the Company's business model for managing the
financial assets and the contractual terms of the cash flows.
For assets measured at fair value, gains and losses will be recorded either
in profit or loss or in OCI. For investments in equity instruments that are
not held for trading, this will depend on whether the Company has made an
irrevocable election at the time of initial recognition to account for the
equity investment at fair value through other comprehensive income (FVOCI).
b) Recognition
Purchases and sales of financial assets are recognised on trade date (that
is, the date on which the Company commits to purchase or sell the asset).
Financial assets are derecognised when the rights to receive cash flows
from the financial assets have expired or have been transferred and the
Company has transferred substantially all the risks and rewards of
ownership.
c) Measurement
At initial recognition, the Company measures a financial asset at its fair
value plus, in the case of a financial asset not at fair value through profit
or loss (FVPL), transaction costs that are directly attributable to the
acquisition of the financial asset.
Transaction costs of financial assets carried at FVPL are expensed in profit
or loss.
Debt instruments
Amortised cost: Assets that are held for collection of contractual cash flows,
where those cash flows represent solely payments of principal and interest,
are measured at amortised cost. Interest income from these financial
assets is included in finance income using the effective interest rate
method. Any gain or loss arising on derecognition is recognised directly in
profit or loss and presented in other gains/(losses) together with foreign
exchange gains and losses. Impairment losses are presented as a separate line
item in the statement of profit or loss.
Equity instruments
The Company subsequently measures all equity investments at fair value.
Dividends from such investments continue to be recognised in profit or loss
as other income when the Company's right to receive payments is established.
Changes in the fair value of financial assets at FVPL are recognised in other
gains/(losses) in the statement of profit or loss as applicable. Impairment
losses (and reversal of impairment losses) on equity investments measured
at FVOCI are not reported separately from other changes in fair value.
d) Impairment
The Company assesses, on a forward-looking basis, the expected credit losses
associated with any debt instruments carried at amortised cost.
The impairment methodology applied depends on whether there has been a
significant increase in credit risk. For trade receivables, the Company
applies the simplified approach permitted by IFRS 9, which requires expected
lifetime losses to be recognised from initial recognition of the receivables.
2.8. Equity
Share capital is determined using the nominal value of shares that have been
issued.
The Share premium account includes any premiums received on the initial
issuing of the share capital. Any transaction costs associated with the
issuing of shares are deducted from the Share premium account, net of any
related income tax benefits.
Equity-settled share-based payments are credited to a share-based payment
reserve as a component of equity until related options or warrants are
exercised or lapse.
Based on IFRS 2, for equity-settled share-based payment transactions, the
entity shall measure the goods or services received, and the corresponding
increase in equity, directly, at the fair value of the goods or services
received, unless that fair value cannot be estimated reliably. The fair value
of the service received in exchange for the grant of options and warrants is
recognised as an expense , other than those warrants that were issued in
relation to the listing which have been recorded against share premium in
equity. If the entity cannot estimate reliably the fair value of the goods or
services received, the entity shall measure their value, and the corresponding
increase in equity, indirectly, by reference to the fair value of the equity
instruments granted. The seed warrants issued to the investors and directors
in raising private equity funds is not within the scope of IFRS 2 and
accounting policy mentioned doesn't apply.
Retained losses includes all current and prior period results as disclosed in
the income statement.
2.9. Taxation
Tax currently payable is based on taxable profit for the period. Taxable
profit differs from profit as reported in the income statement because it
excludes items of income and expense that are taxable or deductible in other
years and it further excludes items that are never taxable or deductible. The
liability for current tax is calculated using tax rates that have been enacted
or substantively enacted by the balance sheet date.
Deferred tax is recognised on differences between the carrying amounts 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 generally
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 initial recognition of goodwill or from the initial recognition (other
than in a business combination) of other assets and liabilities in a
transaction that 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 Company 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.
The carrying amount of deferred tax assets is reviewed at each balance sheet
date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be
recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled or the asset realised. Deferred tax is
charged or credited to profit or loss, except when it relates to items charged
or credited directly to equity, in which case the deferred tax is also dealt
with in equity.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same taxation
authority and the Company intends to settle its current tax assets and
liabilities on a net basis.
2.10. Critical accounting judgements and key sources of estimation
uncertainty
The preparation of the financial statements in conformity with IFRSs requires
management to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets,
liabilities, income and expense. Actual results may differ from these
estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimates are revised and in any future periods affected. The directors have
concluded that there are no areas involving a higher degree of judgement or
complexity, or areas where assumptions and estimates are significant to the
financial statements.
2.11. New standards 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 (and in some cases have not yet been
adopted by the UK):
Standard Impact on initial application Effective date
Annual Improvements 2018-2020 Cycle 1 January 2023
IFRS 17 Insurance Contracts 1 January 2023
IAS 1 Classification of liabilities as Current or Non-current 1 January 2023
IAS 8 Accounting estimates 1 January 2023
IAS 12 Deferred tax arising from a single transaction 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.
The directors are evaluating the impact that these standards may have on the
financial statements of Company.
3. Segmental analysis
The Company manages its operations in one segment, being seeking a suitable
investment within the natural resources development and production sector in
the continent of Africa. The results of this segment are regularly reviewed by
the board as a basis for the allocation of resources, in conjunction with
individual investment appraisals, and to assess its performance. Following the
acquisition of Madini Occidental the board will likely review operations and
decide on whether multiple segments have come into existence.
4. operating loss
This is stated after charging:
30 June 2022 £ 30 June 2021 £
Costs associated with the listing - (122,306)
Costs associated with the re-listing (202,594) -
Professional fees (128,195) (90,306)
Director Fees (126,000) (57,000)
Consultancy fees (42,399) (23,412)
Insurance (17,651) (7,220)
Travel expenditure (53,508) (45,860)
Foreign exchange 26,096 8,009
Administrative expenses (119,606) (9,489)
(663,858) (347,584)
5. Employees
The average number of persons employed by the Company (including directors)
during the period ended 30 June 2022 was:
30 June 2022 No of employees 30 June 2021 No of employees
Management 3 3
3 3
The aggregate payroll costs of these persons were as follows: 2022 £ 2021
Wages and salaries 126,000 57,000
National insurance 2,528 -
128,528 57,000
6. AUDITORS REMUNERATION
2022 £ 2021 £
Fees payable to the Company's auditor for the audit of parent company 25,800 15,000
financial statements:
Corporate finance fees 52,000 90,000
77,800 105,000
7. Taxation
As at 30 June 2022 £ As at 30 June 2021 £
The charge / credit for the year is made up as follows:
Corporation taxation on the results for the year - -
Taxation charge / credit for the year - -
A reconciliation of the tax charge / credit appearing in the income statement
to the tax that would result from applying the standard rate of tax to the
results for the year is:
Loss per accounts (661,743) (347,584)
Tax credit at the standard rate of corporation tax in the UK of 19% (2022: (125,731) (66,041)
19%)
Other tax adjustments 125,731 66,041
- -
The Company has total carried forward losses of £1,180,854 (2021: £519,111).
The taxed value of the unrecognised deferred tax asset is £224,362 (2021:
£98,631) and these losses do not expire. The Company is yet to lodge its
first returns and these amounts will be subject to a review by a tax
professional and confirmed once returns have been lodged with HM Revenue and
Customs. As the Company is currently in a loss making position there will be
no material adjustment to the Company. No deferred tax assets in respect of
tax losses have not been recognised in the accounts because there is currently
insufficient evidence of the timing of suitable future taxable profits against
which they can be recovered.
On 23 September 2022 the Chancellor announced that he has cancelled the
planned corporation tax increase and rather than rising to 25 percent from
April 2023, the rate will remain at 19 percent for all firms, regardless of
the amount of profit made.
8. EARNINGS per share
The calculation of the basic and diluted earnings per share is calculated by
dividing the profit or loss for the year by the weighted average number of
ordinary shares in issue during the year
2022 2021
£ £
Loss for the year from continuing operations 661,743 347,584
Weighted number of ordinary shares in issue 41,659,735 29,398,013
Basic earnings per share from continuing operations - pence (1.59) (1.18)
There is no difference between the diluted loss per share and the basic loss
per share presented. Share options and warrants could potentially dilute basic
earnings per share in the future but were not included in the calculation of
diluted earnings per share as they are anti-dilutive for the year presented.
9. Loan notes
gROUP
30 June 2022 £ 30 June 2021 £
Convertible loan notes 39,827 -
39,827 -
company
30 June 2022 £ 30 June 2021 £
Convertible loan notes 39,827 -
39,827 -
In the period the Company entered into an agreement to purchase loan notes in
Madini Occidental Ltd. These notes have a long stop date of 30 September 2022
and in the event that they have not been redeemed by this date the noteholders
have the option to convert their notes into equity. Interest is payable on the
notes at a rate of 10% per annum and Madini Occidental may redeem the paid
amount of the notes in full or part subject to first serving 5 business days
prior written notice to the noteholders. See note 21 for developments in
relation to convertible loan notes.
10. TRADE AND OTHER RECEIVABLES
group
30 June 2022 £ 30 June 2021 £
Prepayments 9,593 417
Other debtors 10,000 10,000
VAT receivable 35,817 7,434
55,409 17,851
company
30 June 2022 £ 30 June 2021 £
Prepayments 9,593 417
Other debtors 10,000 17,434
VAT receivable 35,817 -
55,409 17,851
11. Cash at bank and in hand
group
30 June 2022 £ 30 June 2021 £
Cash at bank 824,251 1,483,544
824,251 1,483,544
company
30 June 2022 £ 30 June 2021 £
Cash at bank 824,251 1,483,544
824,251 1,483,544
12. Investment in subsidiaries
company
30 June 2022 £ 30 June 2021 £
Critical Metal Mauritius Ltd 10,000 -
10,000 -
As at 30 June 2022, the Group owned interests in the following subsidiary
undertakings, which are included in the consolidated financial statements:
Name Incorporation date Holding Business activity Country of incorporation Registered address
Critical Metal Mauritius Ltd 14 September 2021 100% Critical Metals Plc Dormant Mauritius The Broadgate Tower, 20 Primrose street, London, EC2A 2EW
13. TRADE AND OTHER PAYABLES
GROUP
30 June 2022 £ 30 June 2021 £
Trade payables 78,010 20,166
Other payable and accruals 32,880 10,889
110,890 31,055
company
30 June 2022 £ 30 June 2021 £
Trade payables 78,010 20,166
Other payable and accruals 42,880 10,889
120,890 31,055
14. Share capital and share premium
Number of Shares on Issue Share Capital £ Share Premium £ Total £
Balance at 1 July 2020 14,285,714 71,428 68,572 140,000
Ordinary shares of £0.005 each issued at £0.05 on Admission on 29 September 16,000,000 80,075 720,675 800,750
2020
Exercise of £0.10 warrants during the year 10,450,000 52,250 992,750 1,045,000
Exercise of £0.05 warrants during the year 909,021 4,545 40,906 45,451
Cost of share issues 15,000 - (87,588) (87,588)
Balance at 30 June 2021 41,659,735 208,298 1,735,315 1,943,613
Balance at 30 June 2022 41,659,735 208,298 1,735,315 1,943,613
The Company has only one class of share. All ordinary shares have equal voting
rights and rank pari passu for the distribution of dividends and repayment of
capital.
15. SHARE OPTIONS
Share options or warrants
There were no new options or warrants issued in the period. The number and
weighted average exercise price of share options and warrants issued in
previous periods is detailed below:
2022 2021
Weighted average exercise price Number of options Weighted average exercise price Number of options
Outstanding at the beginning of the year 8.1p 9,240,714 5p 2,285,714
Granted during the year (Share options) - - 5p 2,174,021
Granted during the year (Share options) - - 10p 16,140,000
Exercised during the year (Share options) - - 5p (909,021)
Exercised during the year (Share options) - - 10p (10,450,000)
Outstanding at the end of the year 8.1p 9,240,714 8.1p 9,240,714
Exercisable at the end of the year 8.1p 9,240,714 8.1p 9,240,714
£0.05 Warrants £0.10 Warrants
Issue date 29 September 2020 29 September 2020
Time to expiry 2 years 2 years
Share price at date of issue of warrants £0.05 £0.05
Exercise price £0.05 £0.10
Expected volatility 50% 50%
Risk free interest rate 0.01% 0.01%
There were no new options or warrants issued in the period and hence no value
attributed to the share bases payments reserve (2020: £45,838) as reflected
above and the amount of outstanding warrants remains as per the end of the
last period.
Subsequent to year end 2.55m, £0.10 warrants were exercised (Note 21), along
with the Company extending the last exercise date of the £0.05 and £0.10
warrants that were expiring on 28 September 2022 to 31 March 2023.
16. Risk Management
General objectives and policies
The overall objective of the Board is to set policies that seek to reduce as
far as practical without unduly affecting the Company's competitiveness and
flexibility. Further details regarding these policies are:
Policy on financial risk management
The Company's principal financial instruments comprise cash and cash
equivalents, trade and other receivables, loan notes and trade and other
payables. The Company's accounting policies and methods adopted, including the
criteria for recognition, the basis on which income and expenses are
recognised in respect of each class of financial asset, financial liability
and equity instrument are set out in note 1 - "Accounting Policies".
The Company does not use financial instruments for speculative purposes. The
carrying value of all financial assets and liabilities approximates to their
fair value.
Derivatives, financial instruments and risk management
The Company does not use derivative instruments or other financial instruments
to manage its exposure to fluctuations in foreign currency exchange rates,
interest rates and commodity prices.
Foreign currency risk management
The scope and level of operations that the Company is undertaking has
increased in the current year and will continue to increase in years to come.
With the acquisition of an asset based in the Democratic Republic of Congo the
Company will also increase its exposure to foreign currency risk. Despite the
increase in exposure the directors believe that it is within a reasonable
threshold that it does not materially adversely affect the operations of the
Company and hence they have not entered into any strategies to mitigate the
risk at this stage. In the current period the impact of foreign currency
movement is limited to the impact it has on the relatively small denominations
of currency that the Company holds in foreign currencies.
Credit risk
Credit risk refers to the risk that a counterparty will default on its
contractual obligations resulting in financial loss to the Company.
The Company has adopted a policy of only dealing with creditworthy
counterparties. The Company's exposure and the credit ratings of its
counterparties are monitored by the board of directors to ensure that the
aggregate value of transactions is spread amongst approved counterparties.
The Company applies IFRS 9 to measure expected credit losses for receivables,
these are regularly monitored and assessed. Receivables are subject to an
expected credit loss provision when it is probable that amounts outstanding
are not recoverable as set out in the accounting policy. The impact of
expected credit losses was immaterial.
The Company's principal financial assets are cash and cash equivalents, loan
notes and trade and other receivables. Cash equivalents include amounts held
on deposit with financial institutions.
The credit risk on liquid funds held in current accounts and available on
demand is limited because the Company's counterparties are banks with high
credit-ratings assigned by international credit-rating agencies.
No financial assets have indicators of impairment.
The Company's maximum exposure to credit risk is limited to the carrying
amount of financial assets recorded in the financial statements.
Borrowings and interest rate risk
The Company currently has no borrowings. The Company's principal financial
assets are cash and cash equivalents, loan notes and trade and other
receivables. Cash equivalents include amounts held on deposit with financial
institutions. The effect of variable interest rates is not significant.
Liquidity risk
During the period ended 30 June 2022 and year ended 30 June 2021, the Company
was financed by cash raised through equity funding. Funds raised surplus to
immediate requirements are held as short-term cash deposits in Sterling.
The maturities of the cash deposits are selected to maximise the investment
return whilst ensuring that funds will be available as required to maintain
the Company's operations.
In managing liquidity risk, the main objective of the Company is to ensure
that it has the ability to pay all of its liabilities as they fall due. The
Company monitors its levels of working capital to ensure that it can meet its
liabilities as they fall due.
The table below shows the undiscounted cash flows on the Company's financial
liabilities on the basis of their earliest possible contractual maturity.
Total £ Within 2 months £ Within 2-6 months £
At 30 June 2022
Trade payables 78,050 34,780 43,270
Other payable and accruals 32,880 32,880 -
110,890 67,660 43,270
Total £ Within 2 months £ Within 2-6 months £
At 30 June 2021
Trade payables 20,166 20,166 -
Other payable and accruals 10,889 10,889 -
31,055 31,055 43,270
Capital management
The Company manages its capital to ensure that it will be able to continue as
a going concern while maximising the return to stakeholders. The overall
strategy of the Company is to minimise costs and liquidity risk.
The capital structure of the Company consists of equity attributable to equity
holders of the Company, comprising issued share capital, reserves and retained
earnings as disclosed in the consolidated statement of changes of equity.
The Company is exposed to a number of risks through its normal operations, the
most significant of which are interest, credit, foreign exchange, commodity
and liquidity risks. The management of these risks is vested to the board of
directors.
The sensitivity has been prepared assuming the liability outstanding was
outstanding for the whole period. In all cases presented, a negative number in
profit and loss represents an increase in finance expense / decrease in
interest income.
17. FINANCiaL ASSETS AND FINANCIAL LIABILITIES
2022 Financial assets at fair value through profit or loss Financial assets at amortised cost Financial liabilities at amortised cost Total
Financial assets / liabilities £ £ £ £
Trade and other receivables - 55,408 - 55,408
Loan notes - 39,827 - 39,827
Cash and cash equivalents - 824,251 - 824,251
Trade and other payables - - (120,890) (120,890)
- 911,772 (120,890) 798,596
2021 Financial assets at fair value through profit or loss Financial assets at amortised cost Financial liabilities at amortised cost Total
Financial assets / liabilities £ £ £ £
Trade and other receivables - 17,851 - 17,851
Cash and cash equivalents - 1,483,544 - 1,483,544
Trade and other payables - - (31,055) (31,055)
- 1,501,395 (31,055) 1,470,340
18. Related party transactions
Details of directors' remuneration during the year are given in Directors'
Report on page 13.
Provision of Services
During the year, £18,360 (2021: £13,500) was incurred for the provision of
administrative and corporate accounting services from Orana Corporate LLP, an
entity related to director Anthony Eastman, £1,848 (2021: £3,648) was owing
at year end and are included in trade payables - note 13.
Loans to related parties
During the year, the Company made loans to the related parties Madini
Occidental totalling £39,827. Since year end the Company has successfully
completed the acquisition of a majority interest in Madini Occidental and
therefore the loan is now considered to be an inter-company loan.
19. commitmentS And contingencies
Contingent re-admission expenses
As part of re-admission to the LSE and reverse acquisition of the Madini Group
there were a number of contingent expenses. These expenses are listed below:
- Peterhouse commission on fundraise: £59,795
- Peterhouse success fee:
£12,000
- Strand Hanson Advisory success fee: £121,290
These expenses were contingent as at year end however since have become
payable and have been settled by the Company.
Other than those listed above there were no capital commitments or contingent
liabilities at 30 June 2022 (2021: nil).
20. ultimate controlling party
The Directors consider that there is no controlling or ultimate controlling
party of the Company.
21. Events subsequent to year end
Issue of equity
Subsequent to period end there have been the following issues of equity:
Date Shares Issue price Total shares post issue Purpose
(£)
26.08.22 2,000,000 0.10 43,659,735 Exercise of warrants
12.09.22 9,000,000 0.20 52,659,735 Fundraising for operations
23.09.22 550,000 0.10 53,209,735 Exercise of warrants
23.09.22 37,500 0.20 53,247,235 Fee shares
Convertible loan notes in Madini Occidental
As disclosed in Note 9 in the year the Company entered into an agreement to
purchase convertible loan notes from Madini Occidental. Subsequent to year the
long stop date of 30 September 2022 was passed and instead of converting the
notes to equity the Company agreed with Madini Occidental that the notes would
convert into an ordinary loan. Interest payable on the loan will remain at the
original 10% and will be repayable on demand.
Extension of expiry date of warrants
As disclosed in Note 15, the Company extended the last exercise date of the
£0.05 and £0.10 warrants that were expiring on 28 September 2022 to 31 March
2023.
Acquisition of Madini Occidental and related placing/subscription
On 12 September 2022 the Company completed the acquisition of 57% of the share
capital of Madini Occidental Limited and its subsidiaries, ("MO"). At the
same time the Company completed the placing of 9 million shares which were
issued at 20 pence per share raising £1.8m million for the Company before
costs and was successfully readmitted to trading on the London Stock Exchange.
The Company acquired its 57% interest MO, which holds an indirect 70 percent.
interest in the Molulu Project for a total consideration of US$750,000 less
approximately US$129,000 and EUR 33,400, being costs of the target group paid
by the Company prior to Admission.
The initial estimate of the fair value of the assets acquired and liabilities
assumed of MO at the date of acquisition based upon the MO balance sheet at 12
September 2022 are as follows:
USD$
Trade and other receivables 4,056
Cash and cash equivalents 5,545
Trade and other payables (1,218,594)
Loans and other borrowings (1,014,595)
Provisions (106,452)
Total identifiable net assets acquired (2,330,040)
Consideration
- US$750,000 total consideration 750,000
Total consideration 750,000
Exploration and evaluation assets acquired 3,080,040
Exploration and evaluation assets relate to the accumulated "know how" and
expertise of the business and its staff. None of the exploration and
evaluation assets are expected to be deducted for income tax purposes.
As the acquisition is likely to be treated as a reverse acquisition it will
fall outside the scope of IFRS 3. The Company has 12 months from the date of
acquisition to finalise the accounting treatment in relation to the
acquisition and therefore is incomplete as at the date of these financial
statements given the short period of time since the acquisition was completed.
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 BKFBNPBDDFKBRecent news on Critical Metals
See all newsREG - Critical Metals PLC - Extension of CLN Repayment Date
AnnouncementREG - Critical Metals PLC - Extension of CLN Repayment Date
AnnouncementREG - Critical Metals PLC - Interim Results
AnnouncementREG - Critical Metals PLC - Financial and Corporate Restructuring
AnnouncementREG - Critical Metals PLC - Debt Restructuring Update
Announcement