REG - Critical Metals PLC - Final Results
30/10/2024 14:15
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RNS Number : 2773K Critical Metals PLC 30 October 2024
Critical Metals plc / EPIC: CRTM / Market: Main Market
30 October 2024
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 a past-producing copper cobalt mine in the Democratic Republic of
Congo ("DRC"), is pleased to announce its Final Results for the year ended 30
June 2024.
A copy of this announcement and the Annual Report for the year ended 30 June
2024 will be made available on the Company's website
at www.criticalmetals.co.uk (http://www.criticalmetals.co.uk/) .
Summary
· Completion of 1000 meters of diamond drilling, encountering
encouraging copper intercepts
· Appointment of Dr Avinash Bisnath as a Non-Executive Director
· Completed 28 kilometre road rehabilitation
· Hired consultant to update the Environmental Impact Study (EIS) and
Environmental Management Plan (EMP)
· Submitted permit renewal documentation to Ministry of Mines
· The Company, in collaboration with the local community, built a
school where over 60 children attend, with teachers' salaries and school
supplies funded by Critical Metals
· Fundraise of approximately £1.6 million through a private placement
of convertible loan notes ("CLN") in April 2024 to advance exploration on the
ground and improve infrastructure
· Successful listing on the OTC Market enabling the Company with
exposure to the U.S., Canada and Mexican markets
Post Period
· On track to start delivering ore following the completion of the
rehabilitation of the 28 kilometre public road leading to the Molulu Project
· Agreed terms of renewed offtake agreement with O.M. Metals S.A.R.L.
("O.M. Metals ") following favourable copper grades from ore testing
· Potential to expand mineralised copper zones from one to three
following the discovery of three distinct ones of copper including the
possibility of a ROAN hosted copper zone in the south.
· Investment of £455,000 from NIU Invest SE announced in September
2024
Russell Fryer, CEO of Critical Metals said: "There were many positive
takeaways from the reporting period, mainly our exploration progress and our
decision to take a step back and reevaluate drilling targets, which lead to
the identification of two additional mineralized zones and the potential to
significantly increase resources. Post period we announced that we are on
track to deliver ore following the rehabilitation of the 28 kilometre public
road and the renewed offtake agreement with O.M. Metals. While funding
pressures persist, we remain cautiously optimistic about the year ahead, given
these developments."
For further information contact:
Critical Metals plc
Russell Fryer, CEO Tel: +44 (0)20 7236 1177
Fox-Davies Capital Limited Tel: +44 (0)20 3884 8450
Corporate Broker
Daniel Fox-Davies
St Brides Partners Ltd Tel: +44 (0)20 7236 1177
Financial PR Critical@stbridespartners.co.uk (mailto:Critical@stbridespartners.co.uk)
Ana Ribeiro/Charlotte Page
Chairman's Statement
Dear Shareholder,
The 2023/2024 financial period can be characterised as complex, intricate and
challenging.
Our diamond drilling ("DD") campaign at Molulu began with a Phase 1 diamond
drilling programme, focusing on three areas identified by mapping and
geophysics analysis completed earlier in the year. consisting of 1000 meters
of drilling in the oxide zone and aimed at increasing the geological
understanding of the Molulu Project while identifying other potential targets,
our goal was to increase the mineral resource with the objective of
establishing a JORC resource estimate for copper-cobalt mineralisation in the
area.
In July 2023, and on the back of initial drilling results, the Board made the
decision to temporarily halt exploration mining activities in order to
evaluate planned drilling targets with the aim of establishing a deeper
understanding of the copper zones and fault areas.
By then, and due to the significant work carried out prior to halting
exploration mining, the Company had stockpiled a meaningful amount of copper
oxide onsite, which lead to the Company being approached by several interested
buyers of the ore. Consequently, and after a series of negotiations in
September 2023, the Company entered into an offtake agreement with O.M. Metals
S.A.R.L. ("O.M. Metals") to purchase the copper ore from Molulu. This offtake
agreement was aimed at providing the Company with short-term cashflow for the
continued improvement of infrastructure, to further exploration activities,
and to optimisation of ground operations. One of the conditions of the offtake
agreement with O.M. Metals was the use of 40-tonne trucks and after a brief
submission period, the necessary permissions to deliver ore were granted.
October was a transformative social-licence month for your Company as the
Molulu team, with the help of villagers, made bricks from ant hill dirt, then
created a mud-covered fire kiln to dry and harden the bricks, and finally
built a school with two classrooms to provide the first elementary and middle
school education for the village children. The school has over sixty students
in attendance that are taught by two qualified teachers funded by Critical
Metals, that were previously working at the Molulu project as miners.
Since assuming control of Molulu in December 2022, the Company has prioritized
community engagement and sustainability development initiations. Critical
Metals is committed to expanding educational opportunities in the future as
the Molulu project grows and, where possible, will continue to employ local
staff. More than 90% of our workforce at the Molulu project are DRC locals.
This is not only the right thing to do, but pivotal if we are to maintain our
licence to operate in the DRC.
Also in October, two representatives from Washington DC visited the Molulu
project with the goal of understanding how the Company is adding value at
Molulu and in the surrounding area. This information would be disseminated to
the various USA Government agencies in order to attract support for the
Company initiatives in the DRC.
In November 2023, trial copper ore deliveries began, and three trucks filled
with copper ore were delivered to O.M. Metals. However, it became apparent
that the existing road, which is also used by local villagers and is the only
road the Company can use to deliver ore to O.M. Metals, was unsuitable for
heavy equipment with the additional heavy traffic. Both parties agreed that
the road from Molulu to the Mabende village needed to be improved to an
all-weather road in order to handle the increased volume of traffic from both
the Molulu mine and several local villages.
In December, core from the partial Phase 1 drilling programme was initially
analysed using a handheld XRF unit. Out of twenty-four holes drilled, eighteen
holes had copper mineralisation of wide ranging but quite encouraging grades.
Activities at Molulu and in the DRC in general slowed in December as the
Presidential election date of 20 December 2023 approached. The election was
completed without mass public rioting or protests, and post year end, the
incumbent President was sworn in on 19 January 2024, again, without any mass
protests or voter rioting.
In April, we hired DRC Green to conduct an environmental impact study ("EIS")
and an environmental management plan ("EMP") for submission to the Ministry of
Mines for the renewal of the small-scale mining permit. The documents for the
renewal of the small scale mining permit renewal were submitted on time in
June 2024.
In May, we hired MCSC to conduct the study to rehabilitate the 28-kilometre
public road leading to the Molulu Project. The road was rehabilitated and
completed in July 2024, post period. With the improved road now in place,
sales of stockpiled copper ore can begin.
O.M. Metals visited Molulu in June to resample the ore stockpiles. Three
samples were taken and chemically tested at a laboratory to determine the
acid-soluble copper in the ore, with the grades returned being 3.56%, 1.97%,
and 1.11% copper. O.M. Metals is now preparing trucks to travel to Molulu for
ore loading and road permissions are being sought.
Alongside this rehabilitation work we have also been conducting detailed
geological work. The original understanding of the Project was that the copper
zones were contained in one system. However, our team of geologists have,
post-period end, identified what appears to be three distinct zones of copper,
including the possibility of a ROAN hosted copper zone in the south. The
copper zones are now identified as the Northern zone, the Central zone, and
the Southern zone. The Northern zone is the area where exploration mining
began in January 2023. The Central zone is the area where previous mechanised
mining occurred in the large pit before Molulu was acquired. The Southern zone
is the area where two artisanal pits were discovered but little exploration
work was done in the zone until recently.
This is a comprehensive analysis and underpins the strong development
potential of Molulu. Our focus will now be on undertaking further
exploration to better determine the resource potential. This includes a
1,000-meter diamond drill programme due to commence in Q1 2025, subject to
funding, which will conclude the 2,000-meter Phase 1 drilling plan we began in
2023. Data collected from this Phase 1 programme will be used to support a
JORC resource and initiate a block model study along with other geotechnical
activities.
Corporate
In May 2024 we received approval from the OTC Market Group for the Company's
ordinary share capital to cross-trade on the OTC Market's OTCQB trading
platform in the U.S. alongside our current LSE listing. Trading begun on 1
June 2024.
During the period under review, in March 2024, we were delighted to welcome
Dr. Avinash Bisnath to the Board as Non-Executive Director. As a qualified PhD
geologist, Dr. Bisnath has over 28 years' experience in the mining industry
with a focus on geological exploration. He has spent most of his
professional life within the African Continent, including the DRC, and his
understanding of geological dynamics has already made him an invaluable
addition to the Critical Metals team. Dr. Bisnath replaced Mr. Gordon Thompson
who stepped down from his position as Non-Executive Director due to other work
commitments and restrictions.
Financing
There is no question that we have made progress operationally, both on site
and in supporting the local community around us, however this has been limited
by financial restraints. Our inability to deliver ore to O.M. Metals as
planned, mainly due to poor road conditions, has resulted in a delay in
generating revenues which has had a continued negative impact on operations
and our ability to meet our financial commitments. There is no doubt, that we
would have been unable to achieve some of outlined activity above, had it not
been for the successful fundraise of £1.6 million via a private placement of
convertible loan notes announced in April 2024. This was followed by a
further cash injection by NIU Invest SE ("NIU") of approximately £455,000,
announced post period as part of an extensive funding round.
Outlook
Despite challenging market conditions, there are a number of undisputable
facts, copper is a critical metal which will continue to play a pivotal role
in a number of sectors, including energy and defence to name a few. The
interest we experienced in our ore in the lead up to signing the offtake
agreement with O.M Metals demonstrates that there is significant demand for
the ore we are producing. Like all mining projects in complex jurisdictions,
there are challenges, but in my view the benefits far outweighs the risks. It
is evident, by the continued support of our existing shareholders and our
ability to negotiate alternative financial packages in challenging times, that
Molulu, a past-producing mine, has the potential to produce copper
economically within a relatively short period of time. When you consider the
time that it takes to bring a new discovery into production, estimated at 10
years plus, I believe that Molulu and Critical Metals, still represents an
excellent value proposition for shareholders who are looking to invest in near
production assets in a bullish commodity like copper.
Russell S. Fryer
Executive Chairman & CEO - 30 October 2024
CRITICAL METALS PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
COMPANY NUMBER 11388575
AS AT 30 JUNE 2024
Notes Year ended 30 Year ended 30
June 2024 June 2023
£ £
Revenue
Revenue from continuing operations - -
- -
Expenditure
Exploration & evaluation expenditure (345,153) (139,274)
Administrative expenses 4 (2,218,188) (2,491,522)
Depreciation 9 (52,607) (30,251)
(2,615,948) (2,661,047)
Finance costs
Finance income/(expenses) 16 (11,244) -
Interest expense 16 (158,682) (39,179)
(169,926) (39,179)
Loss on ordinary activities before taxation (2,785,874) (2,700,226)
Taxation on loss on ordinary activities 8 - -
Loss on ordinary activities after taxation (2,785,874) (2,700,226)
Other comprehensive income
Exchange differences on translation of foreign operations 5 9,567 43,490
Loss and total comprehensive income for the year attributable to the owners of (2,776,307) (2,656,736)
the Group
Earnings per share (basic and diluted) attributable to the equity holders 9 (3.79) (4.95)
(pence)
Loss attributable to:
Owners of the parent (2,489,614) (2,485,974)
Non-controlling interest (296,260) (214,252)
(2,785,874) (2,700,226)
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 £1,102,184 (2023:
£1,758,868).
The accompanying notes on pages 41 to 66 form an integral part of these
consolidated financial statements
The accompanying notes on pages 41 to 66 form an integral part of these
consolidated financial statements.
The financial statements were approved by the board on 30 October 2024 and
were signed on its behalf by:
Russell S. Fryer
Executive Chairman & CEO - 30 October 2024
CRITICAL METALS PLC
PARENT COMPANY STATEMENT OF FINANCIAL POSITION
COMPANY NUMBER - 11388575
AS AT 30 JUNE 2024
Notes As at As at
30 June 2024 30 June 2023
£ £
NON-CURRENT ASSETS
Intercompany receivables 12 4,940,935 2,805,705
Investment in subsidiary 14 10,000 10,000
TOTAL NON-CURRENT ASSETS 4,950,935 2,815,705
CURRENT ASSETS
Trade and other receivables 11 56,129 233,942
Cash at bank and in hand 13 46,862 357,481
TOTAL CURRENT ASSETS 102,991 591,423
TOTAL ASSETS 5,053,926 3,407,128
CURRENT LIABILITIES
Trade and other payables 15 441,795 157,111
Borrowings 16 2,058,634 -
TOTAL LIABILITIES 2,500,429 157,111
NET ASSETS 2,553,497 3,250,017
EQUITY
Called up share capital 17 336,948 311,561
Share premium account 17 5,981,996 5,606,918
Share based payment reserve 18 276,459 271,260
Retained earnings (4,041,906) (2,939,722)
TOTAL EQUITY 2,553,497 3,250,017
The financial statements were approved by the board on 30 October 2024 and
were signed on its behalf by:
Russell S. Fryer
Executive Chairman & CEO - 30 October 2024
CRITICAL METALS PLC
PARENT COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024
Issued Share Capital Share Premium Share Based Payments Reserve Foreign exchange currency reserve Retained Earnings Total equity attributable to shareholders Non-controlling interest Total Equity
£ £ £ £ £ £ £ £
As at 30 June 2022 208,298 1,735,315 45,838 - (1,180,854) 808,597 - 808,597
Loss for the year - - - - (2,485,974) (2,485,974) (214,252) (2,700,226)
Other comprehensive income - - - 43,490 - 43,490 - 43,490
Total comprehensive loss for the year - - - 43,490 (2,485,974) (2,442,484) (214,252) (2,656,736)
Acquisition of subsidiary - - - - - - (796) (796)
Shares issued during the year 83,188 3,624,313 - - - 3,707,501 - 3,707,501
Share issue costs during the year - (130,885) - - - (130,885) - (130,885)
Warrants issued during the year 20,075 378,175 225,422 - - 623,672 - 623,672
Total transactions with owners 103,263 3,871,603 225,422 - - 4,200,288 (796) 4,199,492
As at 30 June 2023 311,561 5,606,918 271,260 43,490 (3,666,828) 2,566,401 (215,048) 2,351,353
Loss for the year - - - - (2,489,614) (2,489,614) (296,260) (2,785,874)
Other comprehensive income - - - 9,567 - 9,567 - 9,567
Total comprehensive loss for the year - - - 9,567 (2,489,614) (2,480,047) (296,260) (2,776,307)
Shares issued during the year 25,387 385,327 - - - 410,714 - 410,714
Share issue costs during the year - (10,249) - - - (10,249) - (10,249)
Warrants issued during the year - - 5,199 - - 5,199 - 5,199
Total transactions with owners 25,387 375,078 5,199 - - 405,664 - 405,664
As at 30 June 2024 336,948 5,981,996 276,459 53,057 (6,156,442) 492,018 (511,308) (19,290)
CRITICAL METALS PLC
PARENT COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024
Issued Share Capital Share Premium Share Based Payment Reserve Retained Earnings Total Equity
£ £ £ £ £
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 transaction 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
Loss for the year - - - (1,102,184) (1,102,184)
Other comprehensive income - - - - -
Total comprehensive loss for the year - - - (1,102,184) (1,102,184)
Share issued during the year 25,387 385,327 - - 410,714
Share issue costs during the year - (10,249) - - (10,249)
Warrants issued - - 5,199 - 5,199
Total transaction with the owners 25,387 375,078 5,199 - 405,664
As at 30 June 2024 336,948 5,981,996 276,459 (4,041,906) 2,553,497
CRITICAL METALS PLC
CONSOLIDATED STATEMENT OF CASHFLOW
FOR THE YEAR ENDED 30 JUNE 2024
30 June 2024 30 June 2023
£
£
Cash from operating activities
Loss for the year (2,785,874) (2,700,226)
Adjustments for:
Interest payable 158,682 38,993
Depreciation 10 52,607 30,251
Finance charge 11,244 -
Foreign exchange 6,870 335,122
Share-based payments - 225,422
Operating cashflow before working capital movements (2,556,471) (2,070,438)
Decrease/ (increase) in trade and other receivables (5,100) 297,037
Increase trade and other payables 356,325 64,648
Net cash outflow from operating activities (2,205,246) (1,708,753)
Cash from financing activities
Proceeds from borrowings 1,956,427 -
Repayment of borrowings (80,847) -
Proceeds on the issue of shares net of transaction costs 17 351,919 3,232,049
Proceeds on the exercise of warrants 17 195,713 398,250
Net cash from financing activities 2,423,212 3,630,299
Cash from investing activities
Cash on acquisition of asset group - 24,554
Payments for asset group (74,597) (1,582,908)
Payments for property, plant and equipment 10 (496,006) (773,341)
Net cash outflow from investing activities (570,603) (2,331,695)
Net decrease in cash and cash equivalents (352,637) (410,149)
Cash and cash equivalents at beginning of year 411,696 824,251
Foreign exchange 2,057 (2,406)
Cash and cash equivalents at end of period 13 61,116 411,696
There were no material non-cash transactions in the year.
The accompanying notes on pages 41 to 66 form an integral part of these
consolidated financial statements.
CRITICAL METALS PLC
PARENT COMPANY STATEMENT OF CASHFLOW
FOR THE YEAR ENDED 30 JUNE 2024
30 June 2024 30 June 2023
£ £
Cashflow from operating activities
Loss for the year (1,102,184) (1,758,868)
Adjustments for:
Finance charge 11,244 -
Interest receivable (287,545) (92,138)
Interest payable 109,948
Foreign exchange - 108,891
Non-cashflow transaction-management recharge 218,562
Share based payments - 225,423
Operating cashflow before working capital movements (1,049,975) (1,516,692)
(Increase)/decrease in trade and other receivables (206,052) 11,664
Increase in trade and other payables 377,713 188,499
Net cash outflow from operating activities (878,314) (1,316,529)
Cashflow from financing activities
Proceeds of borrowings 1,956,427 -
Repayment of borrowings (80,847) -
Proceeds of borrowings (interco) -
8,281
Issue of funds to group companies (1,855,517) (2,788,821)
Proceeds on the issue of shares net of transaction costs 351,919 3,232,049
Proceeds on the exercise of warrants 195,713 398,250
Net cash from financing activities 567,695 849,759
Net decrease in cash and cash equivalents (310,619) (466,770)
Cash and cash equivalents at beginning of year 357,481 824,251
Cash and cash equivalents at end of period 13 46,862 357,481
There were no other material non-cash transactions in the year.
The accompanying notes on pages 41 to 66 form an integral part of these
consolidated financial statements.
CRITICAL METALS PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
1. General Information
Critical Metals plc and its subsidiary (the "Group") looks to develop its
existing asset 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 2024 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 main
subsidiary 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 below.
2.2. Going concern
The Group commenced mine development and processing operations at the Molulu
project in the final half of the 2022 financial year, which were halted during
the current financial year to continue its exploration activities, along with
major improvement works being made on the road to and from Molulu. The Group
expects its first sales to occur in mid 2025.
The Group's financial statements have been prepared on the going concern
basis, which contemplates that the Group will be able to realize 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 mid 2025;
· 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 at 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 and are held on behalf of the institutions
with reputable banks.
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 prior year, the Company, through its subsidiary Critical Metals
Mauritius Limited, acquired the entire share capital of Madini Occidental
Limited in two stages, 57% was acquire upon the re-admission to the LSE in
September 2022 and the remaining 43% acquired in December 2022, which holds
70% of Amani Minerals Katanga SARL. In assessing the acquisition, the Group
applied the concentration test under IFRS3 and determined that the acquired
set of activities and assets at the time of acquisition did not constitute a
business, 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 2024 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 recognized, 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
Convertible loan notes classified as financial liabilities and 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.
Estimates
Classification of costs and valuation of development costs
The Group's development assets constitute a major component of the
consolidated statement of financial position, requiring management and the
Directors to assess, under IAS 36, whether any impairment indicators suggest a
potential decline in their carrying value. This process involves substantial
judgment and estimation, creating a risk that impairment evaluations may not
be accurately performed, potentially leading to material overstatement of
asset values. Additionally, there is a risk that any capitalized additions
within the year may not meet the criteria for recognition as assets, resulting
in improper capitalization.
Intercompany receivable recoverability
The carrying amount of the intercompany receivables represents the most
material portion of the Company's total assets and therefore the Company
assesses 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.
Judgements
Classification of costs and valuation of development costs
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.
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
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
Amendments to IAS21 Lack of exchangeability 1 January 2025
Amendments IFRS 9 and IFRS 7 - Financial instruments Classification and measurement of financial instruments 1 January 2026
IFRS 18 - Presentation and Disclosure in Financial Statements Presentation and Disclosure of financial Statements 1 January 2027
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 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 2024 (2023:
£nil).
Segmental results are detailed below
Mining Corporate Total
£ £ £
Operating loss from continued operations per reportable segment (1,467,760) (1,318,114) (2,785,874)
Reportable segment assets 4,461,900 112,990 4,574,890
Reportable segment liabilities 2,093,752 2,500,428 4,594,180
Net assets/ (liabilities) 2,368,148 (2,387,438) (19,290)
And 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
4. operating loss
This is stated after charging:
30 June 2024 30 June 2023
£ £
Consultancy fees (447,700) (398,099)
Employment costs (381,469) (497,938)
Subcontractors (514,900) (248,249)
Insurance (18,328) (5,488)
Professional fees (506,884) (676,317)
Travel expenditure (119,871) (200,517)
Foreign exchange (29,130) (190,442)
Administrative expenses (199,906) (274,472)
(2,218,188) (2,491,522)
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 2024 30 June 2023
£ £
Opening Balance 43,490 -
Foreign exchange impact 9,567 43,490
Closing Balance 53,057 43,490
6. Employees
The average number of persons employed by the Group (including directors)
during the period ended 30 June 2024 was:
30 June 2024 No of employees 30 June 2023 No of employees
Directors 3 3
Employees 1 -
4 3
2024 2023
The aggregate payroll costs of these persons were as follows: £ £
Wages and salaries 371,250 281,833
Share-based payments - 214,165
National insurance 10,219 1,940
381,469 497,938
7. AUDITORS REMUNERATION
2024 2023
£ £
Fees payable to the Group's auditor for the audit of parent company and 73,500 70,000
consolidated group financial statements:
Reporting accountant fee - 60,000
Prior year overruns 9,167 -
Audit of subsidiary undertakings 4,100
86,767 130,000
8. taxation
As at 30 June 2024 As at 30 June 2023
£ £
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 for the year (2,785,874) (2,700,226)
Tax credit at the applicable rate of 24.7% (2023: 19%) (688,110) (666,955)
Expenditure disallowable for taxation 30,511 53,192
Tax losses on which no deferred tax asset has been recognised 657,599 613,763
Total tax (charge)/credit - -
The weighted average applicable tax rate of 24.7% (2023: 24.7%) used is a
combination of the 25% standard rate of corporation tax in the UK (2023:19%),
28% standard rate of corporation tax in the DRC (2023: 28%) and nil
corporation tax rate in Mauritius (2023: nil).
The Company has total carried forward losses of £5,852,909 (2023:
£3,203,095). The taxed value of the unrecognised deferred tax asset is
£1,445,669 (2023: £791,164) and these losses do not expire. 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.
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
2024 2023
£ £
Loss for the year from continuing operations (2,785,874) (2,700,226)
Weighted number of ordinary shares in issue 65,637,849 54,520,971
Basic earnings per share from continuing operations - pence (3.79) (4.95)
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 Work-in-progress Exploration & Evaluation Total
£ £ £ £ £ £
Cost
Opening balance - 1 July 2023 230,520 31,663 3,774,098 - - 4,036,281
Additions - - 324,226 171,780 - 496,006
Foreign exchange (306) (43) (6,524) - - (6,873)
Transfer - - - (788) - (788)
At 30 June 2024 230,214 31,620 4,091,800 170,992 - 4,524,626
Depreciation
Opening balance - 1 July 2023 28,695 132 - - - 28,827
Charge for the period 46,254 6,353 - - - 52,607
Foreign exchange (273) (30) - - - (303)
At 30 June 2024 74,676 6,455 - - - 81,131
Net book value 30 June 2024 155,538 25,165 4,091,800 170,992 - 4,443,496
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
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 amortized over the mine
life of the area.
There is no property, plant and equipment at the Company level.
11. TRADE AND OTHER RECEIVABLES
30 June 2024 30 June 2023
£ £ £ £
Group Company Group Company
Prepayments 5,219 - 19,934 16,917
Other debtors 30,410 30,015 233,414 204,101
VAT receivable 34,649 26,114 12,924 12,924
70,278 56,129 266,272 233,942
12. Intercompany receivables
30 June 2024 30 June 2023
£ £ £ £
Group Company Group Company
Intercompany loan-Critical Metals Mauritius - 4,940,935 - 2,805,705
- 4,940,935 - 2,805,705
Intercompany receivables represent an intra-group loan facility from Critical
Mauritius PLC to its subsidiary Critical 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 2024 (2023. £nil).
13. Cash at bank and in hand
30 June 2024 30 June 2023
£ £ £ £
Group Company Group Company
Cash at bank 61,116 46,862 411,696 357,481
61,116 46,862 411,696 357,481
The carrying amounts of the Group and Company's cash and cash equivalents are
denominated in the following currencies:
30 June 2024 30 June 2023
£ £ £ £
Group Company Group Company
UK Pounds 44,100 44,100 341,687 341,686
US Dollars 14,297 43 64,557 10,343
South African Rand 192 192 1,175 1,175
Euro 2,527 2,527 4,277 4,277
61,116 46,862 411,696 357,481
14. Investment in subsidiaries
30 June 2024 30 June 2023
£ £
Company Company
Critical Metal Mauritius Ltd 10,000 10,000
10,000 10,000
As at 30 June 2024, 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
15. TRADE AND OTHER PAYABLES
30 June 2024 30 June 2023
£ £ £ £
Group Company Group Company
Trade payables 984,644 339,223 757,603 111,379
Other payable and accruals 213,968 102,572 100,749 45,732
Deferred consideration 399,734 - 585,741 -
Provision for option relinquishment 84,136 - 84,247 -
1,682,482 441,795 1,528,340 157,111
Deferred consideration relates to $505,764 (2023: $733,588) USD payable for
the acquisition of the Madini Group. As at report date the amount has not been
paid.
16. Borrowings
30 June 2024 30 June 2023
£ £ £ £
Group Company Group Company
Loan from related party (1) 632,286 - 633,127 -
Accrued interest (1) 220,833 - 172,602 -
Loan facility (2) 478,530 478,530 - -
Convertible loan note (3) 1,580,104 1,580,104 - -
2,911,753 2,058,634 805,729 -
1- 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 22 for further information. The total interest cost recorded through
the profit and loss was £48,690.
2- Borrowings consist of a unsecured facility of up to $3,000,000, with
multiple advances subject to a fixed interest rate of 15%. As at 30 June 2024
$650,000 USD has been paid to the Company and $100,000 USD has been repaid. An
additional $80,000 was transferred to the convertible loan facility. Included
In this amount is $79,500 of convertible loan notes. £73,967 of interest
was recorded through the profit and loss in the current year.
3- The Convertible Loan Note (CLN) issued by Critical Metals PLC
involves a principal amount of £1,603,600 with a fixed interest rate of 10%
per annum repayable on 9(th) April 2025. £36,025 of interest was recorded
through the profit and loss in the current year. The notes are to be redeemed
after one year unless converted into ordinary shares at a specified conversion
price upon a Conversion Event. The CLN is unsecured and ranks equally with
other unsecured obligations.
17. Share capital and share premium
Number of Shares on Issue Share Capital £ Share Premium £
Total £
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
£0.10 Warrants Exercised 1,100,000 5,500 104,500 110,000
£0.05 Warrants Exercised 1,714,286 8,572 77,143 85,715
Fundraise - £0.215m @ £0.095 2,263,159 11,315 203,684 214,999
Cost of share issues - - (10,249) (10,249)
Balance at 30 June 2024 67,389,680 336,948 5,981,996 6,318,944
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.
18. SHARE BASED PAYMENTS RESERVE
Group and Company 2024 2023
£ £
Opening balance 271,260 45,838
Directors warrants issued - 214,164
LEJ & Broker warrants issued - 11,258
FD warrants ( ) 5,199 -
At 31 December 276,459 271,260
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 FD warrants
warrants
Issue date 12 Sep 2022 12 Sep 2022 9 April 2024
Time to expiry 3 years 3 years 3 years
Share price at date of issue of warrants £0.20 £0.20 £.0495
Exercise price £0.05 £0.20 £0.05
Expected volatility 46.5% 46.5% 46.5%
Risk free interest rate 3.4% 3.4% 3.86%
During the year 2,000,000 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.
2024 2023
Weighted average exercise price Number of options Weighted average exercise price Number of options
Outstanding at the beginning of the year (2,3) 26p 19,698,914 8.1p 9,240,714
Exercised during the year (Share options) 8p (2,814,286) - (4,015,000)
Expired during the year 10p (240,000)
Granted during the year (Share options) (5) 10p 2,000,000 - -
Granted during the year (Share options) 5p 600,675 - -
Granted during the year (Share options) (1) - - 40p 9,000,000
Granted during the year (Share options (4) - - 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 8.8p 19,245,303 26p 19,698,914
Exercisable at the end of the year 8.8p 19,245,303 26p 19,698,914
During the year the Company extended the exercise period of all outstanding
warrants along with the exercise repricing of certain warrants as follows:
1- a total of 9,000,000 warrants, which are exercisable on or before the
31 March 2024 at 40 pence per share ("RTO Warrants") to be extended to 31
March 2025 and exercise price adjusted to 10 pence per share;
2- a total of 400,000 warrants which are exercisable on or before 31
March 2023 at 10 pence per share ("10p Warrants") to be extended to 31 March
2025
3- a total of 1,771,428 warrants which are exercisable on or before 31
March 2023 at 5 pence per share ("5p Warrants") to be extended to 31 March
2025;
4- A total of 2,400,000 warrants exercisable on or before 31 May 2024 at
40 pence per share ("May 2023 Warrants") to be extended to 31 March 2025 and
exercise price adjusted to 10 pence per share
5- A total of 2,000,000 warrants exercisable on or before 15
September 2024 at 40 pence per share ("Loan Funding Warrants") to be extended
to 31 March 2025 and exercise price adjusted to 10 pence per share.
These RTO Warrants were granted at the time of re-admission of the Company's
Ordinary Shares to the standard segment of the Official List and to trading on
the main market for listed securities of the London Stock Exchange plc on 12
September 2022 and extended in September 2023, whilst the 10p Warrants and 5p
Warrants were granted at the time of re-admission of the Company's Ordinary
Shares to the standard segment of the Official List and to trading on the main
market for listed securities of the London Stock Exchange plc on 29 September
2020 and extended in March 2023, September 2023 and January 2024. The May 2023
Warrants were issued as part of the May 2023 fundraise whilst the Loan Funding
Warrants were issued as part of the loan funding received in September 2023.
19. 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.
Borrowings and interest rate risk
The Group currently has three separate debt facilities as at 30 June 2024
refer to note 17 for further details. 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 as each facility has
a fixed interest rate over the term of the loans.
Liquidity risk
During the period ended 30 June 2024 and year ended 30 June 2023, 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 2024
Trade payables 984,644 984,644 -
Borrowings 2,911,753 - 2,911,753
Other payable and accruals 622,505 622,505 622,505
Deferred consideration 399,734 - 399,734
Option relinquishment 84,136 - 84,136
5,002,772 1,607,149 6,609,921
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 -
Borrowings 805,729 - 805,729
Deferred consideration 585,741 585,741 -
Provision for option relinquishment 84,247 - 84,247
2,334,069 1,444,093 889,976
And for the Company:
Total £ Within 2 months £ Within 2-6 months £
At 30 June 2024
Trade payables 339,223 339,223 -
Borrowings 2,058,634 - 2,058,634
2,397,857 339,223 2,058,634
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 -
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.
20. FINANCiaL ASSETS AND FINANCIAL LIABILITIES
For the Group:
2024 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 - 30,410 - 30,410
Cash and cash equivalents - 61,116 - 61,116
Trade and other payables - - (984,664) (984,664)
Borrowings - - (2,911,753) (2,911,753)
Deferred consideration - - (399,734) (399,734)
- 91,526 (4,296,151) (4,204,625)
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 - - (942,599) (942,599)
Borrowings - - (805,729) (805,729)
Deferred consideration - - (585,741) (585,741)
- 658,034 (2,334,071) (1,676,037)
For the Company:
2024 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 - 30,015 - 30,015
Cash and cash equivalents - 46,862 - 46,862
Trade and other payables - - (339,223) (339,223)
Borrowings - - (2,058,634) (2,058,634)
- 76,877 (2,397,857) (2,320,980)
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
21. RECONCILIATION OF NET CASHFLOWS TO MOVEMENT IN DEBT
As at 1 July 2023 Cash flows Non cash charges As at 30 June 2024
£ £ £ £
Cash and cash equivalents
Cash 411,696 (352,637) 2,057 61,116
Borrowings
Loan (805,729) (1,875,580) (230,444) (2,911,753)
Total (394,033) (2,228,217) (228,387) (2,850,637)
Material non cash charges for the year are £158,682 of accrued interest
expense and £11,244 of finance charges.
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 824,521 (434,703) (536,501) (247,080) (394,033)
For the Company:
As at 1 July 2023 Cash flows Non cash As at 30 June 2024
charges
£ £ £ £
Cash and cash equivalents
Cash 357,481 (310,619) - 46,862
Borrowings
Loan - (1,875,847) (182,787) (2,058,634)
Total 357,481 (2,186,466) (182,787) (2,011,772)
Material non cash charges for the year are £109,984 of accrued interest
expense and £11,244 of finance charges.
As at 1 July 2022 Cash flows Acquisition Non cash charges As at 30 June 2023
£ £ £ £ £
Cash and cash equivalents
Cash 824,251 (466,770) - - 357,481
Total 824,521 (466,770) - - 357,481
22. Related party transactions
Details of directors' remuneration during the year are given in Directors'
Report.
Provision of Services
During the year, £53,653 (2023: £45,180) was incurred for the provision of
administrative and corporate accounting services from Orana Corporate LLP, an
entity related to director Anthony Eastman. As at 30 June 2024 Orana Corporate
is not considered a related party of the Group.
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. As at 30 June 2024 the balance of
the loan and accrued interest is $1,080,549.
Introduction fee
As part of the January 2024 fundraising £5,000 was awarded to Lloyd
Edwards-Jones, a related party of Marcus Edwards-Jones, for fundraising
consulting work.
Warrant repricing and extension
During the year The Company extended the exercise period of certain
outstanding warrants along with the exercise repricing of which the directors
partially held:
Russell Fryer holds the following warrants:
· 25,000 of the 9,000,000 warrants exercisable at 40 pence per share,
extended to 31 March 2025, with the exercise price adjusted to 10 pence.
· 400,000 of the 400,000 warrants exercisable at 10 pence per share,
extended to 31 March 2025.
· 571,248 of the 1,771,428 warrants exercisable at 5 pence per share,
extended to 31 March 2025.
· 40,000 of the 2,400,000 warrants exercisable at 40 pence per share,
extended to 31 March 2025, with the exercise price adjusted to 10 pence.
Marcus Edwards-Jones holds:
· 200,000 of the 1,771,428 warrants exercisable at 5 pence per share,
extended to 31 March 2025.
23. commitmentS And contingencies
There were no capital commitments or contingent liabilities at 30 June 2024
(2023: nil).
24. ultimate controlling party
The Directors consider that there is no controlling or ultimate controlling
party of the Company.
25. POST BALANCE SHEET EVENTS
On 11(th) September 2024 it was announced that there was a £350,000
investment by NIU Invest SE as part of a larger potential £2.5 million
commitment. NIU, a German investor, previously invested £1 million in
convertible loan notes in April 2024 and an additional £105,000 in bridge
financing in August 2024. The investment includes warrants for NIU, with 1.9
million shares exercisable immediately and an additional 12.1 million shares
conditional upon shareholder approval.
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