REG - Critical Metals PLC - Final Results
03/11/2023 07:15
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RNS Number : 2618S Critical Metals PLC 03 November 2023
Critical Metals plc / EPIC: CRTM / Market: Main Market
3 November 2023
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 2023.
A copy of this announcement and the Annual Report for the year ended 30 June
2023 will be made available on the Company's website
at www.criticalmetals.co.uk (http://www.criticalmetals.co.uk/) .
Highlights
· Readmitted to the Main Market of the London Stock Exchange in
September 2022
· Increased indirect ownership of the Molulu project from 40% to 70%,
streamlining the corporate structure.
· Raised £600,000 at a price of 25p per share and raised a further
£1.3 million at 25p per share from existing shareholders.
· Built a strong onsite team of experienced mining professionals with
the appointment of a mine manager and DRC field manager. Undertook a range of
activities at Molulu including road rehabilitation and the construction of
bridge.
· Commenced copper ore pre-production at Molulu in January 2023.
· Post period, the Company announced a US$3 million non-dilutive debt
facility with a major international financial institution. Also post period,
the Company announced the rental and proposed acquisition of 100% of the
Kastro plant assets for the processing of Molulu ore into copper cathode and
cobalt hydroxide.
· In October 2023, the Company announced that it had entered into an
off-take agreement with O.M Metal & Resources S.A.R.L, for a minimum of
20,000 tonnes of copper oxide ore.
For further information contact:
Critical Metals plc
Russell Fryer, CEO Tel: +44 (0)20 7236 1177
Peterhouse Capital Limited - Corporate Broker Tel: +44 (0)20 7469 0936 / +44 (0)20 7220 9797
Lucy William / Charles Goodfellow
St Brides Partners Ltd
Financial PR
Catherine Leftley /Ana Ribeiro/Isabelle Morris Tel: +44 (0)20 7236 1177
Dear Shareholder,
I am pleased to present the consolidated financial statements for Critical
Metals plc (the "Group" or "Critical Metals") for the year ended 30 June 2023.
During the year under review, the Group has been transformed from an explorer
into the next copper producer in the Democratic Republic of Congo ("DRC").
Since our readmission in September 2022 with no employees in the DRC, your
Board has worked tirelessly to create value for all shareholders. As of the
end of our financial year, your Group employed fifty-one (51) (on a
contractual basis) in the DRC, of which forty-nine (49) are DRC citizens.
During the mining build up, we simplified the Group's corporate structure and
increased our indirect holding in the exciting Molulu Project from 40% to 70%,
providing shareholders with a greater percentage of any future cashflows.
Copper ore pre-production began in January 2023 with the goal of producing
10,000 tonnes per month of oxide ore. Seasonal rains highlighted areas where
more groundwork was needed to achieve this goal, such as road rehabilitation
and the requirement to build a robust bridge across the river.
The period from January to May 2023 allowed your Group to undertake detailed
geophysics studies and ground surveys to better understand the Molulu lease
property. On 15 May 2023, the Group announced its decision to focus on the
much higher-grade sulphide copper ore, which has the potential to increase
profitability by orders of magnitude above mining the oxide zone only,
following the discovery of an 8.3% copper sulphide ore sample.
Also in May 2023, the Group's management decided to use the existing hired
dozer and excavator that were located at Molulu to rehabilitate the road that
connects the property to several ore buyers' processing plants. This
decision saved shareholders over US$50,000 in external contractor costs. The
dozer has rehabilitated the entire road and the bridge to allow large tipper
trucks to use the road to supply ore to the selected buyers has been
constructed enabling the use of 40-50 tonne tipper trucks. The decision to use
40-50 tonne trucks instead of 25 tonne trucks was driven by the ability of
delivering larger volumes of copper ore more efficiently, thereby reducing the
wear on both the bridge and road, while reducing variable unit costs.
As a Board, we were fully aware of the potential for the Molulu project to
become a significant copper producer in the DRC. The Molulu project met all
our investment criteria, including the potential of generating early cash flow
for shareholders.
As your Board is focused on cash flows to protect shareholders, subsequent to
year end, a copper ore offtake agreement was executed and after seven (7)
potential buyers had expressed interest in purchasing the Molulu copper ore.
First ore has already been delivered to the Buyer's plant and deliveries will
continue for the remainder of 2023.
The intention of adding a copper/cobalt processing facility had been well
signalled to market for approximately one year. Post year end, a transaction
has been announced to rent with the option to purchase a previously operating
copper cathode/cobalt hydroxide processing plant that is on
care-and-maintenance. This transaction will allow our Group to capture greater
margins from the Molulu ore.
Environmental, Social and Governance ("ESG") Programme
The Group continues to support the local community at Molulu. Through our
operations we have established a small but thriving economy at Molulu. I am
proud of the support we offer the Molulu community, including buying much of
the food consumed at the camp from local people, as well as providing Molulu
workers with a competitive wage. Molulu continues to have the support of the
local communities, and the board is committed to further developing this
relationship for the better of all parties involved.
Funding
In May 2023, the company announced that it had raised £600,000 at 25p per
share, a 4.2% premium to the closing price on 30 May 2023. Participants in the
placing included well known global mining investment bankers and five other
long-term shareholders. The Group went on to raise a further £1.3 million at
25p per share through the continued support of shareholders. Additionally,
post period, the Group announced that it had signed a US$3 million
non-dilutive debt facility with an international financial institution. These
funds will be used to meet the Group's aims of increasing production at the
Molulu Project, as well as funding any necessary due diligence on possible
acquisitions by the Group in the future.
Appointments
In the last year, we have worked to build our team on the ground. The
appointment of Lloyd Kirtley as DRC field Manager, and Mine Manager John
Greeff are valuable additions to the team. Last year, Lloyd and John,
supported by the wider team, were pivotal in ensuring that access to the ore
body was achieved as soon as reasonably possible. On 31 May, the Group
announced that it had hired an additional geologist, to support the team as
they work to further refine the understanding of the ore body.
The team on the ground have been working to increase production from the
original forecast of 10,000 tonnes of copper oxide per month. Preparations for
sales from Molulu, specifically the development of infrastructure including
the road rehabilitation and the construction of the bridge, to support the
weight of larger trucks, making the Molulu site more accessible.
Outlook
Looking forward to the coming year, I am greatly encouraged by the work we
have done. The Group will continue to optimise operations to increase the
overall production of Molulu whilst advancing the growth goals of the Group.
We will also work with our geologists to produce a JORC compliant mineral
assessment of Molulu, which we will announce to the market as soon as
available. I remain confident in the economic viability of Molulu, driven by
strong fundamentals and increased demand for copper. In line with the
Group's strategy, we will continue to assess further acquisition opportunities
when they arise whilst expanding operations at Molulu. I look forward to the
next twelve months with extreme optimism and thank my fellow Board members
Anthony Eastman and Marcus Edwards-Jones for their input, wisdom, and
friendship during this exciting journey.
Russell S. Fryer
Executive Chairman & CEO - 2 November 2023
CRITICAL METALS PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2023
Notes Year ended 30 Year ended 30 June 2022
June 2023
£ £
Revenue
Revenue from continuing operations - -
- -
Expenditure
Exploration & evaluation expenditure (139,274) -
Costs associated with the listing 4 - (202,594)
Administrative expenses 4 (2,491,522) (461,264)
Depreciation 10 (30,251) -
(2,661,047) (663,858)
Finance costs
Finance income/(expenses) - 2,115
Interest expense 18 (39,179) -
(39,179) 2,115
Loss on ordinary activities before taxation (2,700,226) (661,743)
Taxation on loss on ordinary activities 8 - -
Loss on ordinary activities after taxation (2,700,226) (661,743)
Other comprehensive income
Exchange differences on translation of foreign operations 5 43,490 -
Loss and total comprehensive income for the year attributable to the owners of (2,656,736) (661,743)
the Group
Earnings per share (basic and diluted) attributable to the equity holders 9 (4.95) (1.59)
(pence)
Loss attributable to:
Owners of the parent (2,485,974) (661,473)
Non-controlling interest (214,252) -
(2,700,226) (661,743)
The Company has taken advantage of section 408 of the Companies Act 2006 and
consequently a profit and loss account has not been presented for the Company.
The Company's loss for the financial period was £1,758,868 (2022 :
£661,743).
The accompanying notes on pages 42 to 69 form an integral part of these
consolidated financial statements.
CRITICAL METALS PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2023
Notes As at As at
30 June 2023 30 June 2022 £
£
NON-CURRENT ASSETS
Loan notes 12 - 39,827
Property, plant & equipment 10,11 4,007,454 -
TOTAL NON-CURRENT ASSETS 4,007,454 39,827
CURRENT ASSETS
Trade and other receivables 13 266,272 55,409
Cash at bank and in hand 15 411,696 824,251
TOTAL CURRENT ASSETS 677,968 879,660
TOTAL ASSETS 4,685,422 919,487
CURRENT LIABILITIES
Trade and other payables 17 1,528,340 110,890
Borrowings 18 805,729 -
TOTAL LIABILITIES 2,334,069 110,890
NET ASSETS 2,351,353 808,597
EQUITY
Called up share capital 19 311,561 208,298
Share premium account 19 5,606,918 1,735,315
Share based payment reserve 20 271,260 45,838
Foreign exchange reserve 5 43,490 -
Retained earnings (3,666,828) (1,180,854)
Equity attributable to equity holders of the parent 2,566,401 808,597
Non-controlling interest (215,048) -
TOTAL EQUITY 2,351,353 808,597
The accompanying notes on pages 42 to 69 form an integral part of these
consolidated financial statements
The financial statements were approved by the board on 2 November 2023 and
were signed on its behalf by:
Russell S. Fryer
Executive Chairman
CRITICAL METALS PLC
PARENT COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2023
Notes As at As at
30 June 2023 30 June 2022
£
£
NON-CURRENT ASSETS
Intercompany receivables 14 2,805,705 -
Loan notes 12 - 39,827
Investment in subsidiary 16 10,000 10,000
TOTAL NON-CURRENT ASSETS 2,815,705 49,827
CURRENT ASSETS
Trade and other receivables 13 233,942 55,409
Cash at bank and in hand 15 357,481 824,251
TOTAL CURRENT ASSETS 591,423 879,660
TOTAL ASSETS 3,407,128 929,487
CURRENT LIABILITIES
Trade and other payables 17 157,111 120,890
TOTAL LIABILITIES 157,111 120,890
NET ASSETS 3,250,017 808,597
EQUITY
Called up share capital 19 311,561 208,298
Share premium account 19 5,606,918 1,735,315
Share based payment reserve 20 271,260 45,838
Retained earnings (2,939,722) (1,180,854)
TOTAL EQUITY 3,250,017 808,597
The financial statements were approved by the board on 2 November 2023 and
were signed on its behalf by:
Russell S. Fryer
Executive Chairman
Russell S. Fryer
Executive Chairman
CRITICAL METALS PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
Issued Share Capital Share Premium Share Based Payments Reserve FCTR Retained Earnings NCI Total Equity
£ £ £ £ £ £ £
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 loss for the year - - - - (661,743) - (661,743)
Shares issued during the year - - - - - - -
Share issue costs during the year - - - - - - -
Warrants issued during the year - - - - - - -
Total transactions with owners - - - - - - -
As at 30 June 2022 208,298 1,735,315 45,838 - (1,180,854) - 808,597
Loss for the year - - - - (2,485,974) (214,252) (2,700,226)
Other comprehensive income - - - 43,490 - - 43,490
Total comprehensive loss for the year - - - 43,490 (2,485,974) (214,252) (2,656,736)
Acquisition of subsidiary - - - - - (796) (796)
Shares issued during the year 83,188 3,624,313 - - - - 3,707,501
Share issue costs during the year - (130,885) - - - - (130,885)
Warrants issued during the year 20,075 378,175 225,422 - - - 623,672
Total transactions with owners 103,263 3,871,603 225,422 - - (796) 4,199,492
As at 30 June 2023 311,561 5,606,918 271,260 43,490 (3,666,828) (215,048) 2,351,353
CRITICAL METALS PLC
PARENT COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
Issued Share Capital Share Premium Share Based Payment Reserve Retained Earnings Total Equity
£ £ £ £ £
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 loss for the year - - - (661,743) (661,743)
Share issued during the year - - - - -
Warrants issued during the year - - - - -
Share issue costs during the year - - - - -
Total transactions with the owners - - - - -
As at 30 June 2022 208,298 1,735,315 45,838 (1,180,854) 808,597
Loss for the year - - - (1,758,868) (1,758,868)
Other comprehensive income - - - - -
Total comprehensive loss for the year - - - (1,758,868) (1,758,868)
Share issued during the year 83,188 3,624,313 - - 3,707,501
Share issue costs during the year - (130,885) - - (130,885)
Warrants issued during the year 20,075 378,175 225,422 - 623,672
Total transactions with the owners 103,263 3,871,603 225,422 - 4,200,288
As at 30 June 2023 311,561 5,606,918 271,260 (2,939,722) 3,250,017
CRITICAL METALS PLC
CONSOLIDATED STATEMENT OF CASHFLOW
FOR THE YEAR ENDED 30 JUNE 2023
Notes 30 June 2023 30 June 2022
£
£
Cash from operating activities
Loss for the year (2,700,226) (661,743)
Adjustments for:
Interest payable 38,993 -
Depreciation 10 30,251 -
Foreign exchange 335,122 26,095
Share-based payments 20 225,422 -
Operating cashflow before working capital movements (2,070,438) (635,648)
Decrease/ (increase) in trade and other receivables 297,037 (37,558)
Increase trade and other payables 64,648 79,835
Net cash outflow from operating activities (1,708,753) (593,371)
Cash from financing activities
Proceeds on the issue of shares net of transaction costs 3,232,049 -
Proceeds on the exercise of warrants 398,250 -
Net cash from financing activities 3,630,299 -
Cash from investing activities
Cash on acquisition of asset group 11 24,554 -
Payments for asset group 11 (1,582,907) -
Payments for property, plant and equipment 10 (773,341) -
Accrued interest income - (2,115)
Purchase of convertible loan notes - (37,712)
Net cash outflow from investing activities (2,331,695) (39,827)
Net decrease in cash and cash equivalents (410,149) (633,198)
Cash and cash equivalents at beginning of year 824,251 1,483,544
Foreign exchange (2,406) (26,095)
Cash and cash equivalents at end of period 15 411,696 824,251
The following were material non-cash items during the year:
· £ 161,452 relating to invoices settled through funds received for
shares issued; and
· £178,938 shares issue outstanding at year end included within other
receivables.
The accompanying notes form an integral part of these consolidated financial
statements.
CRITICAL METALS PLC
PARENT COMPANY STATEMENT OF CASHFLOW
FOR THE YEAR ENDED 30 JUNE 2023
Notes 30 June 2023 30 June 2022
£ £
Cashflow from operating activities
Loss for the year (1,758,868) (661,743)
Adjustments for:
Interest receivable (92,138) -
Foreign exchange 108,891 26,095
Share based payments 225,423 -
Operating cashflow before working capital movements (1,516,692) (635,648)
(Increase)/decrease in trade and other receivables 11,664 (37,558)
Increase in trade and other payables 188,499 79,835
Net cash outflow from operating activities (1,316,529) (593,371)
Cashflow from financing activities
Proceeds of borrowings (interco) 8,281 -
Issue of funds to group companies (2,788,821)
Proceeds on the issue of shares net of transaction costs 19 3,232,049 -
Proceeds on the exercise of warrants 19 398,250 -
Net cash from financing activities 849,759 -
Cashflow from investing activities
Accrued interest income - (2,115)
Purchase of convertible loan notes - (37,712)
Net cash from investing activities - (39,827)
Net decrease in cash and cash equivalents (466,770) (633,198)
Cash and cash equivalents at beginning of year 824,251 1,483,544
Foreign exchange - (26,095)
Cash and cash equivalents at end of period 15 357,481 824,251
The following were material non-cash items during the year:
£ 161,452 relating to invoices settled through funds received for shares
issued; and
£178,938 shares issue outstanding at year end included within other
receivables .
CRITICAL METALS PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
1. General Information
Critical Metals plc and its subsidiary (the "Group") looks to develop its
existing asset's and identify other 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 2023 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.
The functional currency for each entity in the Group is determined as the
currency of the primary economic environment in which it operates. The
functional currency of the parent company is Pounds Sterling (£) as this is
the currency that finance is raised in. The functional currency of its
subsidiaries is US Dollars (USD) as this is the currency that mainly
influences labour, material and other costs of providing services. The Group
has chosen to present its consolidated financial statements in Pounds Sterling
(£), as the Directors believe it is the most relevant presentational currency
for users of the consolidated financial statements. Foreign operations are
included in accordance with the policies set out at note 2.4.
2.2. Going concern
The Group commenced mine development and processing operations at the Molulu
project in the first half of 2023 and is currently continuing development
activities. The Group expects its first sales of ore to occur in Q4 of 2023.
The Group's financial statements have been prepared on the going concern
basis, which contemplates that the Group will be able to realise its assets
and discharge liabilities in the normal course of business. Despite this,
there can be no assurance that the Group will either achieve or maintain
profitability in the future and financial returns arising therefrom, may be
adversely affected by factors outside the control of the Group.
The Group has had recurring losses since incorporation, and its continuation
as a going concern is dependent on the Group's ability to successfully fund
its operations by generating sufficient cash flow from operations, and where
required obtaining additional financing from equity injections and / or the
raising of cash through bank loans or other debt instruments, to meet any
working capital deficits and fund the Group's exploration activities and new
mine developments.
This indicates that a material uncertainty exists that may cast significant
doubt over the Group's ability to continue as a going concern and therefore
their ability to realise their assets and discharge their liabilities in the
normal course of business.
Whilst acknowledging this material uncertainty, the directors consider it
appropriate to prepare the consolidated financial statements on a going
concern basis for the following reasons:
· The Group has commenced mining and processing operations at the
Molulu project and is forecasting positive operating cashflow to be generated
from that project in Q4 of 2023;
· The Group has received committed funding from a leading financial
institution for $3,000,000 USD to fund future exploration activities and
corporate working capital requirements. This amount is sufficient to cover all
budgeted discretionary expenditure;
· The Group is not required to pay back the loan from Baobab Asset
Management LLC for at least 12 months after the signing of the accounts;
· The Group has no committed exploration expenditure on its granted
mining licenses in the Molulu and has the ability to reduce all spend in the
event that it needs to conserve cash balances; and
· The Group's Board of Directors have significant experience in the
debt and equity capital markets and specifically have a successful track
record in funding mining operations, new mine development and exploration
activities and are further considered capable of securing ongoing debt and
equity capital financing for the Group.
The consolidated financial statements do not include the adjustments that
would result if the Group were unable to continue as a going concern.
The auditors have made reference to going concern by way of a material
uncertainty within 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. A material amount of
cash and cash equivalents is held with alternative financial institutions.
These funds are fully unrestricted.
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.
Asset Acquisition
During the year, the Company, through its subsidiary Critical Metals Mauritius
Limited, acquired the entire share capital of Madini Occidental Limited and
the remaining 43% , which hold 70% of Amani Minerals Katanga SARL. In
assessing the acquisition, the Group determined that the activities and assets
acquired did not have the required inputs, processes and outputs to constitute
as a business under IFRS 3, hence considered it to be an asset acquisition.
2.6. Property, Plant & Equipment
Items of property, plant and equipment are stated at cost of acquisition or
production cost less accumulated depreciation and impairment losses.
Depreciation is charged so as to write off the cost or valuation of assets
over their estimated useful lives, using the straight-line method, on the
following bases:
Plant and equipment - 20%
Roads and Buildings - 20%
Motor vehicles - 20%
Due to the tough conditions in the DRC, The Group has reduced the useful life
of the Property, Plant & Equipment to better reflect the lifecycle of the
assets.
A lease liability is recognized in accordance with requirements of IFRS 16. It
requires a lessee to recognise assets and liabilities for all leases with a
term of more than 12 months, unless the underlying asset is of low value. As
at 30 June 2023 the Group has not entered into any leases with a term greater
than 12 months.
Exploration and evaluation
Intangible assets represent exploration and evaluation assets (IFRS 6 assets),
being the cost of acquisition by the Group of rights, licences and other
associated items. Such expenditure requires the immediate write-off of
exploration and development expenditure that the Directors do not consider to
be supported by the existence of commercial reserves.
All costs associated with mineral exploration and investments, are capitalised
on a project-by-project basis, pending determination of the feasibility of the
project. Costs incurred include appropriate technical and administrative
expenses but not general overheads and these assets are not amortised until
technical feasibility and commercial viability is established. If an
exploration project is successful, the related expenditures will be
transferred to "mining assets" and amortised over the estimated life of the
commercial ore reserves on a unit of production basis.
The recoverability of all exploration and development costs is dependent upon
the discovery of economically recoverable reserves, the ability of the Group
to obtain necessary financing to complete the development of reserves and
future profitable production or proceeds from the disposition thereof.
Exploration and evaluation assets shall no longer be classified as such when
the technical feasibility and commercial viability of extracting mineral
resources are demonstrable. When relevant, such assets shall be assessed for
impairment, and any impairment loss recognised, before reclassification to
"Mine development".
Mine development
Mine development costs are included within property, plant and equipment.
These costs include the costs attributable to the establishment of mining and
processing operations, groundworks and site preparation.
Whilst the mine is under development no depreciation will be recognised until
such time that production commences.
2.7. 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.
2.8. Borrowings
Borrowings are recognised initially at fair value, net of transaction costs.
After initial recognition, loans are subsequently carried at amortised cost.
Any difference between the proceeds (net of transaction costs) and the
redemption value is recognised in the statement of comprehensive income over
the period of the borrowings using the effective interest method. Fees paid on
the establishment of loan facilities are included in the initial recognition
of the loan note.
Borrowings are classified as current liabilities unless the Group has an
unconditional right to defer settlement of the liability or at least 12 months
after the end of the reporting period
2.9. Trade and other receivables
Trade and other receivables are measured at amortised cost, using the
effective interest method, less any impairment loss. An allowance for
impairment of trade and other receivables is established based on the twelve
month expected credit losses unless the credit quality has deteriorated since
inception, in which case it is based on lifetime losses.
2.10. Financial instruments
IFRS 9 requires an entity to address the classification, measurement and
recognition of financial assets and liabilities.
a) Classification
The Group 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 Group'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 Group 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 Group 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 Group
has transferred substantially all the risks and rewards of ownership.
c) Measurement
At initial recognition, the Group 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 Group 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 Group'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 Group 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 Group applies
the simplified approach permitted by IFRS 9, which requires expected lifetime
losses to be recognised from initial recognition of the receivables.
2.11. 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.
2.12. 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 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.
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 Group intends to settle its current tax assets and
liabilities on a net basis.
2.13. Critical accounting judgements and key sources of estimation
uncertainty
The preparation of the financial statements requires management to make
judgements, estimates and assumptions that affect the amounts reported for
revenues and expenses during the period and the amounts reported for assets
and liabilities at the balance sheet date. However, the nature of estimation
means that the actual outcomes could differ from those 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 significant
accounting judgements and key sources of estimation uncertainty affecting the
Group are disclosed below.
Estimation of fair value of warrants issued in the year
The fair value of the warrants issued during the period have been calculated
using a Black Scholes model which requires a number of assumptions and inputs,
see Note 20 below.
Recoverable value of exploration and development asset
Costs capitalised in respect of the Group's mining assets are required to be
assessed for impairment under the provisions of IFRS 6. Such an estimate
requires the Group to exercise judgement in respect of the indicators of
impairment and also in respect of inputs used in the models which are used to
support the carrying value of the assets prior to reclassification from
exploration and evaluations assets to developments assets. Such inputs
include estimates of mineral reserves, production profiles, commodity prices,
capital expenditure, inflation rates, and pre-tax discount rates that reflect
current market assessments of (a) the time value of money; and (b) the risks
specific to the asset for which the future cash flow estimates have not been
adjusted. As at year end the Group performed an impairment assessment over
both asset classes. The Directors concluded that there was no impairment as at
30 June 2023.
Capitalisation of development assets
Development expenditure is transferred from 'Exploration and evaluation
assets' to 'Development Assets' once the work completed to date supports the
future development of the property and such development receives appropriate
approvals. There is significant judgement around the date in which the
exploration expenditure can be transferred to the development asset.
Impairment loans to subsidiaries
The Group and the Company assess at each reporting date whether there is any
objective evidence that loans to subsidiaries are impaired. To determine
whether there is objective evidence of impairment, a considerable amount of
estimation is required to determine future credit losses over the 12 month
period of life time of the loan.
Business combination
The acquisition of the Madini group required that management make an
assessment on whether the purchase involved identifiable assets, such as
specific equipment, intellectual property rights, or a particular division,
without the concurrent acquisition of processes, workforce, or other essential
inputs required for a going concern under IFRS 3. Additionally, they must
verify that the acquired set of activities does not constitute a business as
defined by IFRS 3, which includes inputs, processes applied to those inputs,
and outputs, resulting in returns to investors. Management determined that the
purchase did not have the required characteristics above and was classified as
an asset purchase.
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
Amendments to IAS 12: Income Taxes Deferred Tax related to Assets and Liabilities arising from a Single 1 January 2023
Amendments to IAS 1 Classification of liabilities as Current or Non-current, effective from 1 1 January 2024
January 2024
or Non-current
Amendments to IFRS 16 Leases Lease Liability in a Sale and Leasebacks 1 January 2024
Amendments to IAS 1 Presentation of Financial Statements Non-current Liabilities with Covenants 1 January 2024
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 the Group.
3. Segmental analysis
The Group has two reportable segments, Mining and Corporate, which are the
Group's strategic divisions. For each of the strategic divisions, the Board
reviews internal management reports on a regular basis.
The Group's reportable segments are:
Mining: the mining operating segment is presented as an aggregate of all the
DRC related activity and the associated Mauritian holding companies.
Corporate: the corporate segment is the UK head company and the costs in
respect of managing the Group. This includes the cost of director share
options granted by the Company.
The Group generated no revenue during the year ended 30 June 2023 (2022:£0).
Segmental results are detailed below:
For the year ended 30 June 2023:
Mining Corporate Total
£ £ £
Operating loss from continued operations per reportable segment (941,358) (1,758,868) (2,700,226)
Reportable segment assets 4,094,001 591,421 4,685,422
Reportable segment liabilities 2,176,959 157,110 2,334,069
Net assets 1,917,042 434,311 2,351,353
And for the year ended 30 June 2022:
Exploration Corporate Total
£ £ £
Operating loss from continued operations per reportable segment - (661,743) (661,743)
Reportable segment assets - 919,487 919,487
Reportable segment liabilities - 110,890 110,890
Net assets - 808,597 808,597
4. operating loss
This is stated after charging:
30 June 2023 30 June 2022
£ £
Consultancy fees (398,099) (42,399)
Employment costs (497,938) (126,000)
Subcontractors (248,249) -
Insurance (5,488) (17,652)
Costs associated with the re-listing - (202,594)
Professional fees (676,317) (128,195)
Travel expenditure (200,517) (53,508)
Foreign exchange (190,442) 26,096
Administrative expenses (274,472) (119,606)
(2,491,522) (663,858)
5. Other comprehensive incomE
Items credited/(charged) to the other comprehensive income line of the
statement of comprehensive income relate to the translation of foreign
operations. The corresponding movement is offset against the foreign exchange
reserve in the statement of financial position.
30 June 2023 30 June 2022
£ £
Opening Balance - -
Foreign exchange impact 43,490 -
Closing Balance 43,490 -
6. Employees
The average number of persons employed by the Group (including directors)
during the period ended 30 June 2023 was:
30 June 2023 No of employees 30 June 2022 No of employees
Directors 3 3
Employees - -
3 3
2023 2022
The aggregate payroll costs of these persons were as follows: £ £
Wages and salaries 281,833 126,000
Share-based payments 214,165 -
National insurance 1,940 2,528
497,938 128,528
7. AUDITORS REMUNERATION
2023 2022
£ £
Fees payable to the Group's auditor for the audit of parent company and 70,000 25,800
consolidated group financial statements:
Reporting accountant fee 60,000 52,000
130,000 77,800
8. taxation
As at 30 June 2023 As at 30 June 2022
£ £
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 (2,700,266) (661,743)
Tax credit at the applicable rate of 24.7% (2022: 19%) (666,955) (125,731)
Expenditure disallowable for taxation 53,192 -
Tax losses on which no deferred tax asset has been recognised 613,763 125,731
Total tax (charge)/credit - -
The weighted average applicable tax rate of 24.7% (2022: 19.0%) used is a
combination of the 25% standard rate of corporation tax in the UK (2022:19%),
28% standard rate of corporation tax in the DRC (2022: 28%) and nil
corporation tax rate in Mauritius (2022: nil).
The Group has total carried forward losses of £3,203,095 (2022 £715,638).
The taxed value of the unrecognised deferred tax asset is £791,164 2022:
(£224,362) and these losses do not expire. No deferred tax assets in respect
of tax losses have 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.
9. 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
2023 2022
£ £
Loss for the year from continuing operations (2,700,226) (661,743)
Weighted number of ordinary shares in issue 54,520,971 41,659,735
Basic earnings per share from continuing operations - pence (4.95) (1.59)
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.
10. Property, plant & Equipment
Group
Plant and equipment Buildings Development Exploration & Evaluation Total
£ £ £ £ £
Cost
Opening balance - 1 July 2022 - - - - -
Acquisition of Madini Group - - - 3,590,274 3,590,274
Additions 241,906 33,227 356,367 141,841 773,341
Foreign exchange (11,386) (1,564) (16,773) (297,611) (327,334)
Transfer - - 3,434,504 (3,434,504) -
At 30 June 2023 230,520 31,663 3,774,098 - 4,036,281
Depreciation
Opening balance - 1 July 2022 - - - - -
Charge for the period 30,113 138 - - 30,251
Foreign exchange (1,418) (6) - - (1,424)
At 30 June 2023 28,695 132 - - 28,827
Net book value 1 July 2022 - - - - -
Net book value 30 June 2023 201,825 31,531 3,774,098 - 4,007,454
Company
Plant and equipment Buildings Development Exploration & Evaluation Total
£ £ £ £ £
Cost
Opening balance - 1 July 2022 - - - - -
Additions - - - - -
Foreign exchange - - - - -
Transfer - - - - -
At 30 June 2023 - - - - -
Depreciation
Opening balance - 1 July 2022 - - - - -
Charge for the period - - - - -
Foreign exchange - - - - -
At 30 June 2023 - - - - -
Net book value 1 July 2022
Net book value 30 June 2023 - - - - -
Development assets relate specifically to commercial interests held by
Critical Metals PLC and its subsidiaries. The Group currently operates in 1
area of interest via its subsidiaries or commercial interests being the Molulu
project in the Democratic Republic of the Congo.
The Group has begun the development of the mine site for the Molulu project.
Costs relating to the physical construction of the site have been capitalised.
Once the mine has been completed the amount will be amortised over the mine
life of the area.
11. Acquisition of Amani Mining Katanga SA (AMK) and Madini
Occidental Group
On 12 September 2022, Critical Metals PLC via its 100% owned subsidiary,
Critical Metals Mauritius acquired 57% of the equity instruments of Madini
Occidental (MO) a Mauritian based company. Within the same period Critical
Metals Mauritius subsequently acquired the remaining share capital of MO .
On the same date as the above MO via its 100% owned subsidiary, MO RDC,
acquired 70% of the share capital of Amani Mining Katanga SA (AMK) which has
the rights to the Molulu Project in the DRC.
This brings Critical Metals indirect ownership of the project to 70%. Both
acquisitions were assessed as being in-line with the Groups aim to be a
producer of critical metals and commodities.
Under IFRS 3, a business must have three elements: inputs, processes and
outputs to constitute a business combination.
At acquisition AMK and Madini Occidental Group were dormant exploration
companies with little underlying assets. Whilst AMK had the title to mineral
properties this could not be considered inputs because of their early stage of
development.
Additionally AMK and the Madini Group had no processes including a
workforce to produce outputs and had not completed a feasibility study or a
preliminary economic assessment on any of its properties and had no
infrastructure or assets that could produce outputs. Therefore, the Directors
conclusion was that the transaction was an asset acquisition and not a
business combination.
The details of Critical Mauritius's acquisition of MO are as follows
Net asset group acquired £
Exploration assets 3,590,274
Cash and cash equivalents 24,554
Other current liabilities (1,060,059)
Borrowing (561,055)
Other 5,648
Total 1,999,362
Total purchase price £
Amount settled in cash 1,582,907
Deferred consideration 416,455
Total 1,999,362
12. Loan notes
30 June 2023 30 June 2022
£ £ £ £
Group Company Group Company
Convertible loan notes - - 39,827 39,827
- - 39,827 39,827
In the prior year 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. As at balance date the
notes have not been converted to equity.
13. TRADE AND OTHER RECEIVABLES
30 June 2023 30 June 2022
£ £ £ £
Group Company Group Company
Prepayments 19,934 16,917 9,592 9,592
Other debtors 233,414 204,101 10,000 10,000
VAT receivable 12,924 12,924 35,817 35,817
266,272 233,942 55,409 55,409
Included in other debtors is an amount of £178,939 (2022: nil) which
represents shares that have been issued but remain unpaid at year end.
Subsequent to year end the full amount was collected.
14. Intercompany receivables
30 June 2023 30 June 2022
£ £ £ £
Group Company Group Company
Intercompany loan-Critical Metals Mauritius - 2,805,705 - -
- 2,805,705 - -
Intercompany receivables represents an intra-group loan facility from Critical
Mauritius PLC to its subsidiary Critcal Metals Mauritius Ltd. The loan is
denominated in USD and attracts interest at 8% per annum. The loan becomes
repayable when the excess cashflows from operations exceed a certain threshold
agreed upon by both parties.
The Group has recognised a loss of £Nil in the profit or loss in respect of
the expected credit losses for the year ended 30 June 2023.
15. Cash at bank and in hand
30 June 2023 30 June 2022
£ £ £ £
Group Company Group Company
Cash at bank 411,696 357,481 824,251 824,251
411,696 357,481 824,251 824,251
Majority of the entities cash at bank is held with alternative financial
institutions.
The carrying amounts of the Group and Company's cash and cash equivalents are
denominated in the following currencies:
30 June 2023 30 June 2022
£ £ £ £
Group Company Group Company
UK Pounds 341,687 341,686 634,501 634,501
US Dollars 64,557 10,343 183,398 183,398
South African Rand 1,175 1,175 3,651 3,651
Euro 4,277 4,277 2,701 2,701
411,696 357,481 824,251 824,251
16. Investment in subsidiaries
30 June 2023 30 June 2022
£ £
Company Company
Critical Metal Mauritius Ltd 10,000 10,000
10,000 10,000
As at 30 June 2023, 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 Holding Mauritius The Broadgate Tower, 20 Primrose street, London, EC2A 2EW
Madini Occidental Ltd 27 March 2019 100% Critical Metals Mauritius Ltd Holding Mauritius 3(rd) Floor, Tower A, 1 Cybercity, Ebene, Mauritius 72201
Madini Holding RDC SARL 14 March 2019 100% Madini Occidental Ltd Dormant Democratic Republic of the Congo Local 7, 4 Eme Niveau, C/Gombe, V/Kinshasa, P/Kinshasa
MO RDC SA 22 September 2019 100% Madini Occidental Ltd Holding Democratic Republic of the Congo Conseil, 60 Avenue Uvira, Immeuble Aimee Tower, 11 eme Etage, Gombe, Kinshasa
Minière Molulu SARL 5 April 2019 100% MO RDC SA Dormant Democratic Republic of the Congo Local 7, 4 Eme Niveau, C/Gombe, V/Kinshasa, P/Kinshasa
Amani Minerals Katanga SA 7 August 2019 70% MO RDC SA Mining & Exploration Democratic Republic of the Congo 33132 Ave Colonel Mondjiba, Quartier Basoko, Ngaliema, Kinshasa, DRC
17. TRADE AND OTHER PAYABLES
30 June 2023 30 June 2022
£ £ £ £
Group Company Group Company
Trade payables 757,603 111,379 78,010 78,010
Other payable and accruals 100,749 45,732 32,880 42,880
Deferred consideration 585,741 - - -
Provision for option relinquishment 84,247 - - -
1,528,340 157,111 110,890 120,890
Deferred consideration relates to $733,588 USD payable for the acquisition of
the Madini Group. As at report date the amount has not been paid.
18. Borrowings
30 June 2023 30 June 2022
£ £ £ £
Group Company Group Company
Loan from related party 633,127 - - -
Accrued interest 172,602
805,729 - - -
Borrowings consist of an $800,000 USD loan to Madini Occidental from Baobab
investments LLC, an entity controlled by the CEO Russell Fryer. Refer to note
24 for further information. The loan is unsecured and payable within 12 months
of signing. An interest charge of £39,179 (2022:nil) was recorded in the
Statement of Comprehensive Income.
19. Share capital and share premium
Number of Shares on Issue Share Capital £ Share Premium £
Total £
Balance at 1 July 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
Shares issued at re-listing at £0.20 9,000,000 45,000 1,755,000 1,800,000
£0.10 warrants exercised 3,150,000 15,750 299,250 315,000
Adviser shares issued 37,500 188 7,313 7,501
Placement at £0.25 5,200,000 26,000 1,274,000 1,300,000
£0.05 Warrants Exercised 15,000 75 675 750
£0.10 Warrants Exercised 600,000 3,000 57,000 60,000
£0.10 Warrants Exercised 200,000 1,000 19,000 20,000
£0.05 Warrants Exercised 50,000 250 2,250 2,500
Fundraise - £0.6m @ £0.25 2,400,000 12,000 588,000 600,000
Cost of share issues - - (130,885) (130,885)
Balance at 30 June 2023 62,312,235 311,561 5,606,918 5,918,479
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.
20. SHARE BASED PAYMENTS RESERVE
Group and Company 2022 2021
£ £
Opening balance 45,838 45,838
Directors warrants issued (1) ( ) 214,164 -
LEJ & Broker warrants issued (2) 11,258 -
At 31 December 271,260 45,838
(1- On 12 September 2022 upon the successful re-admission to the LSE
2,750,000 warrants were issued to the directors of the Company. The warrants
vest immediately with further details below.)
(2- On 12 September 2022 upon the successful re-admission to the LSE
3,233,200 warrants were issued to brokers and third parties who assisted in
the admission. The warrants vest immediately with further details below.)
The fair value of the services received in return for the warrants granted are
measured by reference to the fair value of the warrants granted. The estimate
of the fair value of the warrants granted is measured based on the
Black-Scholes valuations model. Measurement inputs and assumptions are as
follows:
Director warrants LEJ and Broker
warrants
Issue date 12 Sep 2022 12 Sep 2022
Time to expiry 3 years 3 years
Share price at date of issue of warrants £0.20 £0.20
Exercise price £0.05 £0.20
Expected volatility 46.5% 46.5%
Risk free interest rate 3.4% 3.4%
During the year 11,400,000 warrants were issued alongside share placements. As
the warrants were issued as 'free and attaching' they are considered part of
the underlying share and fall outside the scope of IFRS 2 and have not been
valued.
2023 2022
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 8.1p 9,240,714
Exercised during the year (Share options) - (4,015,000) - -
Granted during the year (Share options) 40p 9,000,000 - -
Granted during the year (Share options) 40p 2,400,000 - -
Granted during the year (Share options) 5p 2,750,000 - -
Granted during the year (Share options) 20p 323,200 - -
Outstanding at the end of the year 26p 19,698,914 8.1p 9,240,714
Exercisable at the end of the year 26p 19,698,914 8.1p 9,240,714
During the year 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 and
then to 30 September 2023 and subsequent to year end, these were further
extended to 31 December 2023.
21. 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 Group's competitiveness and
flexibility. Further details regarding these policies are:
Policy on financial risk management
The Group's principal financial instruments comprise cash and cash
equivalents, trade and other receivables, loan notes and trade and other
payables. The Group'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 Group 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 Group 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 Group 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 Group
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 Group 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 Group 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 Group. The Group
has adopted a policy of only dealing with creditworthy counterparties. The
Group'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 Group 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 Group'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 Group's counterparties are banks with high
credit-ratings assigned by international credit-rating agencies.
No financial assets have indicators of impairment.
The Group's maximum exposure to credit risk is limited to the carrying amount
of financial assets recorded in the financial statements.
As at 30 June 2023 the foreign currency risk exposure of the Group was
comprised of the following:
As at
30 June 2023
GBP
CURRENT ASSETS
Other current assets 32,329
Cash at bank and in hand 64,557
TOTAL ASSETS 96,886
NON-CURRENT LIABILITIES
Borrowings 805,729
CURRENT LIABILITIES
Trade and other payables 1,371,232
TOTAL LIABILITIES 2,176,961
NET POSITION (2,080,075)
Borrowings and interest rate risk
The Group currently has an unsecured loan to Baobab Asset Management LLC. The
loan compounds interest at 6% per annum and has no fixed repayments. The Group
has no other borrowings. The Group'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 2023 and year ended 30 June 2022, the Group
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 Group's operations.
In managing liquidity risk, the main objective of the Group is to ensure that
it has the ability to pay all of its liabilities as they fall due. The Group
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 Group's financial
liabilities on the basis of their earliest possible contractual maturity.
For the Group:
Total £ Within 2 months £ Within 2-6 months £
At 30 June 2023
Trade payables 757,603 757,603 -
Other payable and accruals 100,749 100,749 -
Deferred consideration 585,741 585,741 -
Provision for option relinquishment 84,247 - 84,247
1,528,340 1,444,093 84,247
Total £ Within 2 months £ Within 2-6 months £
At 30 June 2022
Trade payables 78,010 78,010 -
Other payable and accruals 32,880 32,880 -
110,890 110,890 -
And for the Company:
Total £ Within 2 months £ Within 2-6 months £
At 30 June 2023
Trade payables 111,379 111,379 -
Other payable and accruals 45,732 45,732 -
157,111 157,111 -
Total £ Within 2 months £ Within 2-6 months £
At 30 June 2022
Trade payables 78,010 78,010 -
Other payable and accruals 32,880 32,880 -
110,890 110,890 -
Capital management
The Group 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 Group is to minimise costs and liquidity risk.
The capital structure of the Group consists of equity attributable to equity
holders of the Group, comprising issued share capital, reserves and retained
earnings as disclosed in the consolidated statement of changes of equity.
The Group 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.
22. FINANCiaL ASSETS AND FINANCIAL LIABILITIES
For the Group:
2023 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 - 246,338 - 246,338
Cash and cash equivalents - 411,696 - 411,696
Trade and other payables - - (942,601) (942,601)
Borrowings - - (805,729) (805,729)
Deferred consideration - - (585,741) (585,741)
- 658,034 (2,334,071) (1,676,037)
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 - 55,409 - 55,409
Loan Notes - 39,827 - 39,827
Cash and cash equivalents - 824,251 - 824,251
Trade and other payables - - (120,890) (120,890)
- 919,487 (120,890) 798,597
For the Company:
2023 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 - 217,025 - 217,025
Cash and cash equivalents - 357,481 - 357,481
Trade and other payables - - (111,379) (111,379)
- 574,506 (111,379) 463,127
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 - 55,409 - 55,409
Loan Notes 39,827 39,827
Cash and cash equivalents - 824,251 824,251
Trade and other payables - - (110,890) (110,890)
- 919,487 (110,890) 808,597
23. RECONCILIATION OF NET CASHLOWS TO MOVEMENT IN NET DEBT
For the Group:
As at 1 July 2022 Cash flows Acquisition Non cash charges As at 30 June 2023
£ £ £ £ £
Cash and cash equivalents
Cash 824,251 (434,703) 24,554 (2,406) 411,696
Borrowings
Loan - - (561,055) (244,674) (805,729)
Total 824,251 (434,703) (536,501) (247,080) (394,033)
For the Company:
As at 1 July 2022 Cash flows Acquisition Non cash As at 30 June 2023
charges
£ £ £ £ £
Cash and cash equivalents
Cash 824,251 (466,770) - - 357,481
Total 824,251 (466,770) - - 357,481
24. Related party transactions
Details of directors' remuneration during the year are given in Directors'
Report on page 18 to 19.
Provision of Services
During the year, £45,180 (2022: £18,360) was incurred for the provision of
administrative and corporate accounting services from Orana Corporate LLP, an
entity related to director Anthony Eastman. £11,688 (2022: 1,848) was owing
at year end and is included in trade payables - note 17.
Purchase of Share Capital of Madini Occidental Limited
During the year the Group acquired the remaining 21.5% of the share capital of
Madini Occidental from the Chief Executive Officer , Russell Fryer . Total
consideration was £450,000 in cash paid on completion and a further £200,000
was due on or before 1 October 2023, to be paid in Critical Metals PLC shares
at a price equal to the 10 day volume weighted average or cash, at the
Company's election. The amount has not been paid as at the date of this
report.
Loan to Baobab Asset Management LLC
As part of the acquisition of Madini Occidental the Group acquired a $800,000
USD loan from Baobab Asset Management LLC, a company controlled by the CEO
Russell Fryer, to Madini Occidental. The loan accrues interest at 6%
,compounds annually and is payable on demand.
Issue of warrants
In the current year the directors were awarded the following warrants:
Russell Fryer - 1,500,000
Anthony Eastman - 750,000
Marcus Edwards-Jones - 500,000
As part of the re-admission 226,750 warrants were issued to Lloyd
Edwards-Jones, a related party of Marcus Edwards-Jones, for fundraising
consulting work. Further details can be found in note 20.
25. commitmentS And contingencies
There were no capital commitments or contingent liabilities at 30 June 2023
(2022 nil).
26. ultimate controlling party
The Directors consider that there is no controlling or ultimate controlling
party of the Company.
27. Events subsequent to year end
Exercise of warrants and term extension
On 11(th) September 2023 the Company has received warrant exercise notices to
subscribe for a total of 2,814,286 new ordinary shares of £0.005 each in the
capital of the Company split between 1,100,000 Ordinary Shares at an exercise
price of £0.10 per Ordinary Share and an additional 1,714,286 Ordinary Shares
at an exercise price of £0.05 per Ordinary Share. A total of 2,814,286
Warrant Shares have been exercised resulting in total gross proceeds to the
Company of £195,714.30.
Additionally the exercise period of a total of 9,000,000 warrants, which are
exercisable on or before the 11 September 2023 at 40 pence per share were
extended to 31 March 2024, and a total of 2,171,428 warrants held by the
Directors which are exercisable on or before 30 September 2023 to 31 December
2023.
Finance agreement
On 18 September 2023 the Company entered into a non-dilutive finance
agreement. The debt term is for 9 months from the date of execution of the
agreement for the first US$500,000 instalment, with a committed further
tranche of US$500,000 available at the Company's election following the
satisfaction of the funding conditions (being committed sales for the existing
stockpiles). The Company also has the ability to request further funds are
available up to the maximum utilisation of US$3 million.
The key funding terms are:
- 15% fixed coupon for the term;
- The second tranche is available for 150 days after the first
tranche;
- Repayable at any time at the election of the Company;
- Personal guarantee from Russell Fryer by way of the pledge of
his ordinary shares in the Company; and
- Grant of 2,000,000 warrants over ordinary shares in the Company.
Revenue offtake agreement
On 9(th) October the Company announced that it had entered into an offtake
agreement with OM Metal & Resources S.A.R.L for the sale of a minimum of
20,000 tonnes of copper oxide ore from the Group's Molulu copper/cobalt
project in the Democratic Republic of Congo.
The Agreement is valid from 4 October 2023 to 31 December 2023 and can be
renewed on mutual agreement from both parties. During the contract, and
where possible, Critical Metals will provide the Buyer with copper ore with an
average minimum acid soluble copper grade of 1.5%.
There have been no other events subsequent to year end.
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