REG-ECR Minerals plc Annual Financial Report
23/03/2021 13:20
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Annual Financial Report
ECR MINERALS plc
(“ECR Minerals”, “ECR” or the “Company”)
AUDITED FINANCIAL STATEMENTS FOR YEAR ENDED 30 SEPTEMBER 2020
ECR Minerals plc is pleased to announce its audited financial statements for
the year ended 30 September 2020. The information presented below has been
extracted from the Company’s Annual Report and Accounts 2020.
Copies of the Annual Report and Accounts 2020 with the notice of annual
general meeting will be posted to shareholders tomorrow and will be available
on the Company’s website www.ecrminerals.com
(https://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.ecrminerals.com&esheet=52400123&newsitemid=20210323005725&lan=en-US&anchor=www.ecrminerals.com&index=1&md5=b018c1feb52dab9d8b1e2e6a2ce4ff1a)
. The Company intends to holds its annual general meeting at 9am on 19 April
2021 at Chester House, 81-83 Fulham High Street, Fulham Green, London SW6 3JA.
As a result of the current crisis of COVID-19 and the UK Government’s
restrictions on public gatherings, the holding of the Company’s AGM will be
facilitated by the Company to ensure a quorum is present. Shareholders should
therefore not attend the meeting in person and instead are strongly encouraged
to submit their proxy vote, appointing the Chairman of the meeting as their
proxy to ensure that their votes are registered. This can be done by
completing their form of proxy which must be received before the proxy voting
deadline of 9.00 a.m. on 15 April 2021.
Market Abuse Regulations (EU) No. 596/2014
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 (MAR). Upon the publication of this announcement via
Regulatory Information Service (RIS), this inside information is now
considered to be in the public domain.
FOR FURTHER INFORMATION, PLEASE CONTACT:
ECR Minerals plc Tel: +44 (0)20 7929 1010
David Tang, Non-Executive Chairman
Craig Brown, Director & CEO
Email:
info@ecrminerals.com (mailto:info@ecrminerals.com)
Website: www.ecrminerals.com
(https://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.ecrminerals.com%2F&esheet=52400123&newsitemid=20210323005725&lan=en-US&anchor=www.ecrminerals.com&index=2&md5=fcf117d37b98bc15903e5fea3673c6cb)
WH Ireland Ltd Tel: +44 (0)207 220 1666
Nominated Adviser
Katy Mitchell/James Sinclair-Ford
SI Capital Ltd Tel: +44 (0)1483 413500
Joint Broker
Nick Emerson
Novum Securities Limited Tel: +44 (0)2073 999400
Joint Broker
Jon Belliss
ABOUT ECR MINERALS PLC
ECR Minerals is a mineral exploration and development company. ECR’s wholly
owned Australian subsidiary Mercator Gold Australia Pty Ltd has 100% ownership
of the Bailieston and Creswick gold projects in central Victoria, Australia,
and two license applications lodged in eastern Victoria for the Tambo Gold
project. ECR is currently drilling high priority targets on the Bailieston
gold project using the Company’s own diamond drill rig, backed by a support
network at the company's central Victoria HQ at Bendigo. ECR has an
experienced exploration team with significant local knowledge in the Victoria
Goldfields and wider region.
Following the sale of the Avoca, Moormbool and Timor gold projects in
Victoria, Australia to Fosterville South Exploration Ltd (TSX-V: FSX), ECR has
the right to receive up to A$2 million in payments subject to future resource
estimation or production at those projects.
ECR has earned a 25% interest in the Danglay gold project, an advanced
exploration project located in a prolific gold and copper mining district in
the north of the Philippines, and holds a royalty on the SLM gold project in
La Rioja Province, Argentina.
FORWARD LOOKING STATEMENTS
This announcement may include forward looking statements. Such statements may
be subject to numerous known and unknown risks, uncertainties and other
factors that could cause actual results or events to differ materially from
current expectations. There can be no assurance that such statements will
prove to be accurate and therefore actual results and future events could
differ materially from those anticipated in such statements. Accordingly,
readers should not place undue reliance on forward looking statements. Any
forward-looking statements contained herein speak only as of the date hereof
(unless stated otherwise) and, except as may be required by applicable laws or
regulations (including the AIM Rules for Companies), the Company disclaims any
obligation to update or modify such forward-looking statements because of new
information, future events or for any other reason.
The Directors of ECR Minerals plc (the “Directors” or the “Board”)
present their report and audited financial statements for the year ended 30
September 2020 for ECR Minerals plc (“ECR”, the “Company” or the
“Parent Company”) and on a consolidated basis (the “Group”)
Chairman’s Statement
Despite the COVID-19 pandemic, the financial year ended 30 September 2020 and
the period since the year-end have been a time of much progress for ECR. The
centre of the Group’s operations remains the state of Victoria in Australia,
where ECR’s wholly owned Australian subsidiary Mercator Gold Australia Pty
Ltd (“MGA”) is concentrating on two highly promising gold exploration
projects: Bailieston and Creswick.
As I write, MGA is drilling at the Baillieston gold project using its newly
purchased diamond drill rig. The focus of initial drilling activity is the
Historic Reserve #3 (HR3) area, which comprises at least four closely-spaced
lines of reef, including the Byron, Dan Genders, Scoulars and Maori Reefs,
plus numerous cross-structures. This provides a number of drill-ready targets,
with Byron the first to be tested.
With the benefit of the Group’s strong cash position, which at the date of
this report is approximately £3.955m, the intention is that in-house drilling
activity will be sustained for a long period and the Directors believe this
programme has the potential to generate transformational results for the
Group. We therefore look to the future with great optimism.
MGA disposed of several non-core projects in Victoria during the year but
retains exposure to potential upside from those projects by way of contingent
payments of up to A$2 million in total. We remain open to the possibility of
further transactions in relation to MGA’s assets in Victoria, and we have
also taken steps to add to MGA’s Victorian gold project portfolio by
applying for two exploration licences in eastern Victoria, which will comprise
the Tambo project, and by applying for a licence surrounding the operating
Ballarat gold mine.
Finally, I am pleased to welcome Adam Jones as a non-executive director of the
Company. Adam, is an experienced gold geologist who is based in Victoria
within easy reach of the Bailieston and Creswick gold projects. He already has
detailed knowledge of these projects, having assisted MGA as a consultant
since 2018, and I am sure as a director of ECR he will make a significant
contribution to the success of our activities.
Weili (David) Tang
Chairman
23 March 2021
Chief Executive Officer’s Report
With the gold price having exceeded USD 2,000/oz last year and trading largely
in a range between USD 1,700 and USD 1,900 in recent months, these are
exciting times for gold explorers such as ECR. We are also fortunate to have
experienced no significant operational disruption as a result of the COVID-19
pandemic, which has not affected Australia to the same extent as, for example,
the UK.
As in the previous year, the centre of the Group’s operations was Victoria,
Australia, with activities concentrated on the Bailieston and Creswick gold
projects. Several non-core projects in Victoria were disposed of by ECR’s
wholly owned Australian subsidiary Mercator Gold Australia Pty Ltd
(“MGA”), and a number of new exploration licences were applied for in
order to rejuvenate MGA’s project portfolio and maintain a pipeline of
opportunities for the future.
Interest from a number of third parties in joint venture or earn-in type
transactions in relation to either Bailieston or Creswick was explored
extensively during the financial year under review, and the Company continues
to consider opportunities as they arrive.
Following the year under review, in January 2021, MGA commenced drilling in
the Historic Reserve #3 (HR3) area of the Bailieston project, having taken
delivery of a new Cortech CSD1300G diamond drill rig in November 2020.
Drilling can now continue on a bespoke basis, supported by ECR’s strong cash
position.
Exploration at Bailieston and Creswick Projects
Notable outcomes of exploration work during the year ended 30 September 2020
included positive findings of an alteration study on reverse circulation (RC)
drill cuttings from the Creswick project, announced in March 2020, and
confirmation of high-grade gold mineralisation at Creswick by the completion
of ‘full bag’ testing, announced in November 2019.
At Bailieston, work during the year has included field mapping and
geochemistry across numerous gold prospects, which has enabled MGA’s
geologists to define a number of drill-ready targets. Drilling has now
commenced at the Byron prospect in the HR3 area, and after Byron, it is
planned that drilling will continue in the same area to test the Maori, Dan
Genders, Scoulars and Hard-Up reefs. This drilling will aim to provide for the
first time a framework of the geological structures hosting the reefs, which
will be used to attempt to target coalescing reef intersections.
From HR3, it is currently planned that the rig will be moved to test the
Cherry Tree prospect, or for further drilling at the Blue Moon discovery.
Cherry Tree and Blue Moon are also within the Bailieston project. The results
of 2019 drilling at Blue Moon by MGA included intersections of 15 metres at
3.81 g/t gold and 11 metres at 2.42 g/t gold (announced on 14 March 2019).
MGA is also keen to follow up on previous drilling results at Creswick, where
individual samples returned assays as high as 80.97 g/t gold over one metre
(announced on 5 November 2019). Further drill sites at Creswick have already
been determined and approval has been received from the relevant government
authorities. In addition, after the end of the period under review, in the
final quarter of calendar year 2020, MGA completed a soil geochemistry survey
of the Jackass Reef prospect at Creswick, the results of which, the Directors
believe, will assist drill targeting in that area at the appropriate time.
Overview of Victorian Exploration Licence Portfolio
At the end of the financial year under review, MGA held six granted mineral
exploration licences in Victoria (EL5387, EL5433, EL006184, EL006280, EL006278
and EL006913).
In April 2020 MGA entered into an agreement for the sale of exploration
licences EL5387 (the Avoca project), EL006278 (the Timor project), plus
EL006280 and EL006913 (the Moormbool project), and after the end of the period
under review, these licences were formally transferred to Currawong Resources
Pty Ltd.
At the time of this report, MGA has a total of eight exploration licence
applications pending in Victoria, and holds two granted exploration licences
(EL5433 and EL006184), which respectively forms part of the Bailieston and
Creswick projects. These are augmented, in the case of Bailieston, by
exploration licence applications EL006911, EL006912 and EL007296; and in the
case of Creswick, exploration licence applications EL006713 and EL006907.
In November 2020, MGA lodged exploration licence application EL007537 for an
area which surrounds mining licences MIN5396 and MIN4847. These mining
licences, which are not held by MGA, contain the operating Ballarat gold mine.
The area of EL007537 includes the southern extension of the Dimocks Main
Shale, which is the principal target of exploration at MGA’s Creswick gold
project located a short distance to the north, the northern extension of the
Ballarat East line and the depth extensions of the Ballarat West line.
EL007537 is a competitive bid with three other applicants.
New Gold Project: Tambo
In September 2020, MGA lodged two new exploration licence applications in
eastern Victoria, EL007484 and EL007486, to comprise the Tambo gold project,
which covers a sizeable area of prospective geology near historic goldfields
and has received little contemporary exploration.
The applications cover portions of the historic Swifts Creek/Omeo and Haunted
Stream goldfields. These goldfields have recorded historical gold production
of 205,000 and 25,000 oz respectively, according to figures published by the
Geological Survey of Victoria. MGA considers the application areas to be
prospective for orogenic reef gold and additionally for intrusion-related gold
and base metal systems.
Sale of Exploration Licences to Currawong Resources Pty Ltd
In April 2020 MGA entered into an agreement for the sale of exploration
licences EL5387, EL006280, EL006913 and EL006278 in Victoria (the
“Licences”) to Currawong Resources Pty Ltd, a wholly owned subsidiary of
Fosterville South Exploration Ltd (“Fosterville South”), which listed on
the TSX Venture Exchange in April 2020, for the following consideration:
1. A$500,000 in cash, which was paid to MGA immediately;
2. A further payment of A$1 for every ounce of gold or gold equivalent of
measured resource, indicated resource or inferred resource estimated within
the area of one or more of the Licences in any combination or aggregation of
the foregoing, up to a maximum of A$1,000,000 in aggregate;
3. A further payment of A$1 for every ounce of gold or gold equivalent
produced from within the area of one or more of the Licences, up to a maximum
of A$1,000,000 in aggregate.
All of the Licences had been formally transferred to Currawong by January
2021.
In February 2021, Leviathan Gold Ltd (“Leviathan”) listed on the TSX
Venture Exchange. Leviathan is a ‘spin-out’ from Fosterville South, and
has acquired rights to EL5387 (the Avoca project) and EL006278 (the Timor
project) from Currawong. MGA still has the right to further payments in
respect of EL5387 and/or EL006278 based on resource estimation or production,
as set out above.
Disposal of Ochre Mining SA and SLM Gold Project
In February 2020, the Company sold its wholly owned Argentine subsidiary Ochre
Mining SA, which holds the SLM gold project in La Rioja, Argentina. The sale
allows ECR to focus on its core gold exploration activities in Australia. The
purchaser, Hanaq Argentina SA (“Hanaq”), is a Chinese-owned company
engaged in lithium, base and precious metals exploration in Northwest
Argentina including Salta, Jujuy and La Rioja, with a highly experienced
management team.
ECR retains an NSR royalty of up to 2% to a maximum of USD 2.7 million in
respect of future production from the SLM gold project. The Directors believe
that Hanaq has the operational capabilities and access to Chinese investment
capital necessary to put the SLM project into production, subject to the usual
prerequisites such as further exploration and feasibility studies being
successfully completed (if deemed necessary by Hanaq) and to the necessary
permits for production being obtained.
The founder and CEO of Hanaq Group, of which Hanaq Argentina SA is part, is Mr
Xiaohuan (Juan) Tang, who has a substantive track record in Latin America,
including responsibility for the successful permitting of the Pampa de Pongo
iron ore project in Peru in his former capacity as General Manager of Jinzhao
Mining Peru. Pampa de Pongo is one of the largest iron ore deposits in Latin
America. Mr Tang has degrees from Tsinghua University in China, and Imperial
College, Cambridge University and Oxford University in the UK.
Danglay Gold Project, Philippines
ECR is entitled to a 25% interest in the Danglay gold project in the
Philippines, which is held by a Philippine corporation called Cordillera Tiger
Gold Resources, Inc. (“Cordillera Tiger”) under an Exploration Permit, the
renewal of which is pending. The issuance of a 25% shareholding in Cordillera
Tiger to the Company is expected in due course, but has been delayed since
2016, largely due to a court case filed by an individual who is a minority
shareholder and former director of Cordillera Tiger. The court issued a
decision in the case in June 2020 which is discussed in the Strategic Report.
The Directors believe the political climate for the minerals industry in the
Philippines is on course to improve in future, and consider that the Danglay
gold project, which is located in a prolific gold and copper mining district
in the north of the country, has potential for further exploration to build
upon the existing inferred mineral resource estimate of 63,500 ounces of gold
at 1.55 g/t gold. This resource was reported by ECR in 2015 to the Canadian
NI43-101 standard, based on exploration carried out at Danglay by ECR during
2014 and 2015. In addition to the resource, an NI43-101 target for further
exploration (conceptual potential quantity and grade of mineralisation
expressed as ranges) of 95,000 to 170,000 ounces of gold at 5 to 7.5 g/t was
reported. Further information regarding Cordillera Tiger and the Danglay gold
project is provided in the Strategic Report.
FINANCIAL RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2020
For the year to 30 September 2020 the Group recorded a total comprehensive
loss of £2,595,002, compared with £762,586 for the year to 30 September
2019.
The largest contributor to the total comprehensive loss was the loss on
disposal of Ochre Mining SA and the SLM gold project which amounted to
£1,986,469. Excluding the loss on disposal of Ochre Mining SA and the SLM
gold project the loss for the year to 30 September 2020 was less than the
total comprehensive loss for the year to 30 September 2019. Although the
disposal resulted in a loss the Group has the potential to recover more than
this loss through future royalty payments from Ochre Mining SA.
The Group’s net assets at 30 September 2020 were £3,563,819, in comparison
with £3,640,604 at 30 September 2019. The decrease is due to the disposal of
Ochre Mining and SLM gold project during the year. The increase is due to
increased exploration assets as a result of the capitalisation of exploration
expenditure during the year, and an increase in cash as a consequence of the
sale of projects by MGA to Currawong Resources Pty Ltd and the exercise of
share warrants issued by the Company in previous years. At the time of
writing, the Group cash position is approximately £4m.
Craig Brown
Chief Executive Officer
23 March 2021
Independent Auditor’s Report
For the year ended 30 September 2020
Independent Auditor’s Report to the Members of ECR Minerals Plc
Opinion
We have audited the financial statements of ECR Minerals Plc (the ‘parent
company’) and its subsidiaries (the ‘group’) for the year ended 30
September 2020 which comprise the Consolidated Income Statement, the
Consolidated Statement of Comprehensive Income, the Consolidated and Parent
Company Statements of Financial Position, the Consolidated and Parent Company
Statements of Changes in Equity, the Consolidated and Parent Company
Statements of Cash Flows and notes to the financial statements, including a
summary of significant accounting policies. The financial reporting framework
that has been applied in their preparation is international accounting
standards in conformity with the Companies Act 2006 and as regards the parent
company financial statements, as applied in accordance with the provisions of
the Companies Act 2006.
In our opinion:
* the financial statements give a true and fair view of the state of the
group’s and of the parent company’s affairs as at 30 September 2020 and of
the group’s and parent company’s loss for the year then ended;
* the group financial statements have been properly prepared in accordance with
international accounting standards in conformity with the Companies Act 2006;
* the parent company financial statements have been properly prepared in
accordance with international accounting standards in conformity with the
Companies Act 2006 and as applied in accordance with the provisions of the
Companies Act 2006; and
* the financial statements have been prepared in accordance with the
requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor’s responsibilities for the
audit of the financial statements section of our report. We are independent of
the group and parent company in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the UK, including the
FRC’s Ethical Standard as applied to listed entities, and we have fulfilled
our other ethical responsibilities in accordance with these requirements. We
believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to
which the ISAs (UK) require us to report to you where:
* the directors’ use of the going concern basis of accounting in the
preparation of the financial statements is not appropriate; or
* the directors have not disclosed in the financial statements any identified
material uncertainties that may cast significant doubt about the group’s or
the parent company’s ability to continue to adopt the going concern basis of
accounting for a period of at least twelve months from the date when the
financial statements are authorised for issue.
Our application of materiality
The scope of our audit was influenced by our application of materiality. The
quantitative and qualitative thresholds for materiality determine the scope of
our audit and the nature, timing and extent of our audit procedures. Group
materiality was £55,000 (2019: £60,000) based upon 2% of gross assets. We
consider gross assets to be the main driver of the business as the group is
still in the exploration stage and therefore no revenues are currently being
generated, and that current and potential investors will be most interested in
the recoverability of the exploration and evaluation assets. The parent
company materiality was £45,000 (2019: £40,000) based upon an average of 2%
of gross assets and 5% of adjusted loss before tax.
Whilst materiality for the financial statements as a whole was set at
£55,000, each significant component of the group was audited to an overall
materiality ranging between £40,000 – £45,000 with performance materiality
set at 70% for all entities.
We agreed with the audit committee that we would report to the committee all
audit differences identified during the course of our audit in excess of
£2,750 (2019: £3,000) as well as differences below these thresholds that, in
our view, warranted reporting on qualitative grounds.
An overview of the scope of our audit
In designing our audit, we determined materiality and assessed the risk of
material misstatement in the financial statements. In particular, we looked at
areas requiring the directors to make subjective judgements, for example in
respect of significant accounting estimates including the carrying value of
intangible assets and the consideration of future events that are inherently
uncertain. We also addressed the risk of management override of internal
controls, including evaluating whether there was evidence of bias by the
directors that represented a risk of material misstatement due to fraud.
An audit was performed on the financial information of the group’s operating
entities which for the year ended 30 September 2020 were located in the United
Kingdom and Australia. The Argentine operations which were previously held by
the group were disposed of during the year. The audit work on each significant
component was performed by us as group auditor based upon materiality or risk
profile, or in response to potential risks of material misstatement to the
group.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those
which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
Key Audit Matter How the scope of our audit responded to the key audit matter
Recoverability of intangible assets – exploration and evaluation assets Our work in this area included:
(refer to note 10)
▪ Sample testing of exploration and evaluation expenditure to assess their
The group as at 30 September 2020 had ongoing early stage exploration projects eligibility for capitalisation under IFRS 6 by corroborating to the original
in the Philippines and Australia. source documentation.
There is a risk that the expenditure is not correctly capitalised in ▪ Inspection of the current exploration licences to verify they remained
accordance with IFRS 6. There is also a risk that the capitalised exploration valid and that the group held good title.
costs are not recoverable and should be impaired. The carrying value of
intangible exploration and evaluation assets as at 30 September 2020, which is ▪ Review of correspondence (where applicable) with licensing authorities to
tested annually for impairment, is £1,869,184. The impairment assessment ensure compliance and assess the risk of non-renewal. We assessed the sampling
requires management judgement and estimation of a range of applicable factors. results and progress of the projects and whether they indicate the existence
of commercially viable projects.
▪ Review and challenge of management’s documented consideration of
Specifically, there is an ongoing dispute over the Danglay Project impairment by individual project.
(Philippines) where ECR believe they have fulfilled the criteria of the
Earn-in and JV Agreement such that ECR has earned a 25% interest. ▪ Establishing the intention of the Board to undertake future exploration
work.
▪ Review of any internal / external resource estimates produced during the
Relevant disclosures in the financial statements are made in Note 2 year.
surrounding critical accounting judgements, and in Note 10 for Intangible
assets. ▪ Discussion of status of all projects with management.
As disclosed in Note 10 to the financial statements, the group has not yet
formally acquired title to its 25% interest in Cordillera Tiger Gold
Resources, Inc. (“Cordillera”) which is the holder of the exploration
permit for the Danglay gold project in the Philippines. The conditions for the
earn-in have been satisfied but the relevant shareholding has yet to be
issued, despite the Board of Cordillera authorising the issue. In addition,
the exploration permit for the Danglay gold project held by Cordillera expired
on 30 September 2015. Cordillera is currently waiting for the Philippine
authority to formally grant its renewal application. This indicates the
existence of a material uncertainty over the recoverability of the carrying
value of the Danglay gold project, which amounted to £1,185,297 as at 30
September 2020.
Other information
The other information comprises the information included in the annual report,
other than the financial statements and our auditor’s report thereon. The
directors are responsible for the other information. Our opinion on the group
and parent company financial statements does not cover the other information
and, except to the extent otherwise explicitly stated in our report, we do not
express any form of assurance conclusion thereon. In connection with our audit
of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge
obtained in the audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material misstatements, we
are required to determine whether there is a material misstatement in the
financial statements or a material misstatement of the other information. If,
based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
* the information given in the strategic report and the directors’ report for
the financial year for which the financial statements are prepared is
consistent with the financial statements; and
* the strategic report and the directors’ report have been prepared in
accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent
company and their environment obtained in the course of the audit, we have not
identified material misstatements in the strategic report or the directors’
report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
* adequate accounting records have not been kept by the parent company, or
returns adequate for our audit have not been received from branches not
visited by us; or
* the parent company financial statements are not in agreement with the
accounting records and returns; or
* certain disclosures of directors’ remuneration specified by law are not
made; or
* we have not received all the information and explanations we require for our
audit.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement, the
directors are responsible for the preparation of the group and parent company
financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the directors determine is necessary to
enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the group and parent company financial statements, the directors
are responsible for assessing the group’s and the parent company’s ability
to continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the group or the parent company or to
cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities
(https://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.frc.org.uk%2Fauditorsresponsibilities&esheet=52400123&newsitemid=20210323005725&lan=en-US&anchor=www.frc.org.uk%2Fauditorsresponsibilities&index=3&md5=bb9f6361ca1b9bc57d0b67ee93f9f55b)
.( )This description forms part of our auditor’s report.
Use of our report
This report is made solely to the company’s members, as a body, in
accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work
has been undertaken so that we might state to the company’s members those
matters we are required to state to them in an auditor’s report and for no
other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone, other than the company and the company's
members as a body, for our audit work, for this report, or for the opinions we
have formed.
David Thompson (Senior Statutory Auditor) 15 Westferry Circus
For and on behalf of PKF Littlejohn LLP Canary Wharf
Statutory Auditor London E14 4HD
23 March 2021
Consolidated Income Statement
For the year ended 30 September 2020
Year ended Year ended
30 September 2020 30 September 2019
Note £ £
Proceeds from disposal of licenses 275,701 -
Less: expenditure on licences disposed (169,509) -
Gain on disposal 106,192 -
Continuing operations
Other administrative expenses (799,585) (833,203)
Currency exchange differences (33,497) (6,051)
Gain from hyperinflation adjustment - 113,310
Total administrative expenses (833,082) (725,944)
Operating loss 3 (726,890) (725,944)
Other financial assets – fair value movement 9 13,683 (8,112)
Aborted transaction option fee (25,000)
(713,207) (759,056)
Financial income 7 478 1,846
Other income 8,316 -
Finance income and costs 8,794 1,846
Loss for the year before taxation (704,413) (757,210)
Income tax 5
Loss for the year from continuing operations (704,413) (757,210)
Loss on disposal of subsidiary (1,986,469) -
Loss for the year from discontinued operations (1,986,469) -
Loss for the year - all attributable to owners of the parent (2,690,882) (757,210)
Earnings per share - basic and diluted
On continuing operations 4 (0.14)p (0.18)p
On discontinued operations (0.39)p -
The notes set out below are an integral part of these financial statements.
Consolidated Statement of Comprehensive Income
For the year ended 30 September 2020
Year ended Year ended
30 September 2020 30 September 2019
£ £
Loss for the year (2,690,882) (757,210)
Items that may be reclassified subsequently to profit or loss
Gain/(Loss) on exchange translation 95,880 (5,375)
Other comprehensive gain/(loss) for the year 95,880 (5,375)
Total comprehensive loss for the year (2,595,002) (762,586)
Attributable to: -
Loss on continuing operations (608,533) (762,586)
Loss on discontinued operations (1,986,469) -
The notes set out below are an integral part of these financial statements.
Consolidated & Company Statement of Financial Position
At 30 September 2020
Group Company
30 September 30 September 30 September 30 September
Note 2020 £ 2019 2020 £ 2019
£ £
Assets
Non-current assets
Property, plant and equipment 8 183,539 1,041 2,737 548
Investments in subsidiaries 9 - – - 852,728
Intangible assets 10 1,869,184 3,295,996 1,333,282 2,272,553
Other receivables 11 - – 1,029,067 983,864
2,052,723 3,297,037 2,365,086 4,109,694
Current assets
Trade and other receivables 11 108,617 108,654 726,689 616,190
Financial assets at fair value through profit or loss 9 26,870 13,187 26,870 13,187
Cash and cash equivalents 12 1,497,231 268,517 1,207,190 227,508
1,632,718 390,358 1,960,749 856,885
Total assets 3,685,441 3,687,395 4,325,835 4,966,578
Current liabilities ,
Trade and other payables 14 121,622 46,791 93,848 22,990
121,622 46,791 93,848 22,990
Total liabilities 121,622 46,791 93,848 22,990
Net assets 3,563,819 3,640,604 4,231,987 4,943,589
Equity attributable to owners of the parent
Share capital 13 11,286,928 11,284,845 11,286,928 11,284,845
Share premium 13 47,090,048 45,391,202 47,090,048 45,391,202
Exchange reserve 531,453 (394,876) - –
Other reserves 440,706 742,698 440,706 742,698
Retained losses (55,785,316) (53,383,265) (54,585,695) (52,475,157)
Total equity 3,563,819 3,640,604 4,231,987 4,943,589
The Company has elected to take the exemption under section 408 of the
Companies Act 2006 from presenting the parent company profit and loss account.
The loss for the parent company for the year was £2,399,369 (2019: £623,683
loss).
The notes set out below are an integral part of these financial statements.
The financial statements were approved and authorised for issue by the
Directors on 23 March 2021 and were signed on its behalf by:
Weili (David) Tang Craig Brown
Non–Executive Chairman Director & Chief Executive Officer
Consolidated Statement of Changes in Equity
For the year ended 30 September 2020
Share capital Share premium Exchange reserve Other reserves Retained reserves
(Note 13) (Note 13) Total
£ £ £ £ £ £
Balance at 30 September 2018 11,283,756 44,460,171 (389,501) 1,381,998 (53,084,878) 3,651,546
Loss for the year – – – – (757,120) (757,120)
Loss on exchange translation – – (5,375) – – (5,375)
Total comprehensive loss – – (5,375) – (757,120) (762,586)
Shares issued 1,039 737,745 – – – 738,784
Share issue costs – (38,040) – – – (38,040)
Lapsed or expired share-based payments – 180,476 – (639,300) 458,824 –
Shares issued in payment of creditors 50 50,850 – – – 50,900
Total transactions with owners,
recognised directly in equity 1,089 931,031 – (639,300) 458,824 751,644
Balance at 30 September 2019 11,284,845 45,391,202 (394,876) 742,698 (53,383,264) 3,640,604
Loss for the year – – – – (2,690,882) (2,690,882)
Gain on exchange translation – – 95,880 – – 95,880
Total comprehensive loss – – 95,880 – (2,690,882) (2,595,002)
Shares issued 2,067 1,754,986 – – – 1,757,053
Share issue costs – (77,000) – – – (77,000)
Share based payments – 13,161 – (301,992) 288,831 –
Recycled through profit or loss on disposal of subsidiary – – 830,449 – – 830,449
Share issued in payment of creditors 15 7,699 – – – 7,714
Total transactions with owners, recognised directly in equity
2,083 1,698,846 830,449 (301,992) 288,831 2,518,216
Balance at 30 September 2020 11,286,928 47,090,048 531,453 440,706 (55,785,316) 3,563,819
The notes set out below are an integral part of these financial statements.
Company Statement of Changes in Equity
For the year ended 30 September 2020
Share capital Share premium Other reserves Retained reserves
(Note 13) (Note 13) Total
£ £ £ £ £
Balance at 30 September 2018 11,283,756 44,460,171 1,381,998 (52,310,297) 4,815,628
Loss for the year – – – (623,682) (623,682)
Total comprehensive expense – – – (623,682) (623,682)
Shares issued 1,039 737,745 – – 738,784
Share issue costs – (38,040) – – (38,040)
Lapsed or expired share based payments 180,476 (639,300) 458,824 –
Shares issued in payment of creditors 50 50,850 – – 50,900
Total transactions with owners, recognised directly in equity
1,089 931,031 (639,300) 458,824 751,644
Balance at 30 September 2019 11,284,845 45,391,202 742,698 (52,475,156) 4,943,589
Loss for the year – – – (2,399,369) (2,399,369)
Total comprehensive expense – – – (2,399,369) (2,399,369)
Shares issued 2,067 1,754,986 – – 1,757,054
Share issue costs – (77,000) – – (77,000)
Share based payment – 13,161 (301,992) 288,831 –
Shares issued in payment of creditors 15 7,699 – – 7,714
Total transactions with owners, recognised directly in equity 2,083 1,698,846 (301,992 ) 288,831 1,687,768
Balance at 30 September 2020 11,286,928 47,090,048 440,706 (54,585,695) 4,231,987
The notes set out below are an integral part of these financial statements.
Consolidated & Company Cash Flow Statement
For the year ended 30 September 2020
Group Company
Year ended 30 September Year ended 30 September Year ended 30 September Year ended 30 September
Note 2020 2019 2020 2019
£ £ £ £
Net cash used in operations 20 (668,377) (773,318) (694,408) (761,915)
Investing activities
Purchase of property, plant & equipment 8 (186,307) – (5,963) –
Increase in exploration assets 10 (180,653) (436,522) - (16,244)
Proceeds from disposal of licenses 275,701 – – –
R&D tax credits on exploration 307,818 - - -
Loan to subsidiary – – - (455,370)
Interest income 7 478 1,846 - 1,268
Net cash generated from / (used in) investing activities 217,037 (434,676) (5,963) (460,346)
Financing activities
Proceeds from issue of share capital (net of issue costs) 1,680,054 700,744 1,680,054 700,744
Net cash from financing activities 1,680,054 700,744 1,680,054 700,744
Net change in cash and cash equivalents 1,228,714 (507,250) 979,682 (521,517)
Cash and cash equivalents at beginning of the year 268,517 781,142 227,508 749,025
Effect of changes in foreign exchange rates – (5,375) – –
Cash and cash equivalents at end of the year 12 1,497,231 268,517 1,207,190 227,508
Non-cash transactions:
1. Settlement of creditors of £7,715 (2019: £89,684) with ordinary shares.
The notes on pages 28 to 44 are an integral part of these financial
statements.
Notes to the Financial Statements
For the year ended 30 September 2020
1 General information
The Company and the Group operated mineral exploration and development
projects. The Group’s principal interests are located in Australia,
Argentina and the Philippines.
The Company is a public limited company incorporated and domiciled in England.
The registered office of the Company and its principal place of business is
Unit 119, Chester House, 81-83 Fulham High Street, Fulham Green, London SW6
3JA. The Company is quoted on the Alternative Investment Market (AIM) of the
London Stock Exchange.
2 Accounting policies
Overall considerations
The principal accounting policies that have been used in the preparation of
these consolidated financial statements are set out below. The policies have
been consistently applied unless otherwise stated.
Basis of preparation
a) Statement of compliance
The consolidated financial statements have been prepared in accordance with
international accounting standards in conformity with the Companies Act 2006.
The financial statements are prepared on the historical cost basis or the fair
value basis where the fair valuing of relevant assets or liabilities has been
applied.
b) (i) New and amended standards, and interpretations issued and effective for
the financial year beginning 1 October 2019
There were no new standards, amendments or interpretations effective for the
first time for periods beginning on or after 1 October 2019 that had a
material effect on the Group or Company financial statements
(ii) New standards, amendments and interpretations in issue but not yet
effective
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 had not been adopted by
the EU):
* Amendments to References to Conceptual Framework in IFRS Standards –
effective 1 January 2020
* Definition of Material (Amendments to IAS 1 and IAS 8) – effective 1 January
2020
* Amendment to IFRS 3 Business Combinations – effective 1 January 2020
* Amendments to IFRS 9, IAS 39 and IFRS 17: Interest Rate Benchmark Reform –
effective 1 January 2020
* Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16: Interest Rate
Benchmark Reform – Phase 2 – effective 1 January 2021*
* Amendment to IFRS 3 Business Combinations – Reference to the Conceptual
Framework – effective 1 January 2022*
* Amendments to IAS 37: Provisions, Contingent Liabilities and Contingent Assets
– effective 1 January 2022*
* Annual Improvements to IFRS Standards 2018-2020 Cycle – effective 1 January
2022*
* Amendments to IAS 1 Presentation of Financial Statements: Classification of
Liabilities as Current or Non-current and Amendments to IAS 1: Classification
of Liabilities as Current or Non-current – Deferral of Effective Date –
effective 1 January 2023*
*subject to EU endorsement
The Group and Company intend to adopt these standards when they become
effective. The introduction of these new standards and amendments is not
expected to have a material impact on the Group or Company.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of
the Company and one of its subsidiaries made up to 30 September 2020.
Subsidiary undertakings acquired during the period are recorded under the
acquisition method of accounting and their results consolidated from the date
of acquisition, being the date on which the Company obtains control, and
continue to be consolidated until the date such control ceases.
The Group controls an entity when the Group is exposed to, or has rights to,
variable returns from its involvement with the entity and has the ability to
affect those returns through its power over the entity.
Going concern
It is the prime responsibility of the Board to ensure the Group and Company
remains a going concern. At 15 March 2021, the Group has cash and cash
equivalents of £3,954,919 and no borrowings.
The Group’s financial projections and cash flow forecasts covering a period
of at least twelve months from the date of approval of these financial
statements show that the Group will have sufficient available funds in order
to meet its contracted and committed expenditure. Further details are included
in Note 21 to the financial statements.
Based on their assessment of the financial position, the Directors have a
reasonable expectation that the Group and Company will be able to continue in
operational existence for the next 12 months and continue to adopt the going
concern basis of accounting in preparing these Financial Statements.
Cash and cash equivalents
Cash includes petty cash and cash held in current bank accounts. Cash
equivalents include short–term investments that are readily convertible to
known amounts of cash and which are subject to insignificant risk of changes
in value.
Property, plant and equipment
Property, plant and equipment are stated at cost, less accumulated
depreciation and any provision for impairment losses.
Depreciation is charged on each part of an item of property, plant and
equipment so as to write off the cost of assets less the residual value over
their estimated useful lives, using the straight–line method. Depreciation
is charged to the income statement. The estimated useful lives are as follows:
Office equipment 3 years
Furniture and fittings 5 years
Machinery and equipment 5 years
Expenses incurred in respect of the maintenance and repair of property, plant
and equipment are charged against income when incurred. Refurbishments and
improvements expenditure, where the benefit is expected to be long lasting, is
capitalised as part of the appropriate asset.
An item of property, plant and equipment ceases to be recognised upon disposal
or when no future economic benefits are expected from its use or disposal. Any
gain or loss arising on cessation of recognition of the asset (calculated as
the difference between the net disposal proceeds and the carrying amount of
the asset) is included in the income statement in the year the asset ceases to
be recognised.
Exploration and development costs
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. 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. Where a licence is relinquished or a project abandoned, the related
costs are written off in the period in which the event occurs. Where the Group
maintains an interest in a project, but the value of the project is considered
to be impaired, a provision against the relevant capitalised costs will be
raised.
The recoverability of all exploration and development costs is dependent upon
continued good title to relevant assets being held (or, in the case of the
Company’s interest in the Danglay gold project, to good title being
secured), 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.
Impairment testing
Individual assets are tested for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may exceed its
recoverable amount, being the higher of net realisable value and value in use.
Any such excess of carrying value over recoverable amount or value in use is
taken as a debit to the income statement.
Intangible exploration assets are not subject to amortisation and are tested
annually for impairment.
Provisions
A provision is recognised in the Statement of Financial Position when the
Group or Company has a present legal or constructive obligation as a result of
a past event, and it is probable that an outflow of economic benefits will be
required to settle the obligation. If the effect is material, provisions are
determined by discounting the expected future cash flows at a pre–tax rate
that reflects current market assessments of the time value of money and, where
appropriate, the risks specific to the liability.
Leased assets
Assets and liabilities arising from a lease are initially measured on a
present value basis. The lease payments are discounted using the interest rate
implicit in the lease. If that rate cannot be readily determined, the
lessee’s incremental borrowing rate is used, being the rate that the
individual lessee would have to pay to borrow the funds necessary to obtain an
asset of similar value to the right-of-use asset. Lease payments are allocated
between principal and finance cost. All other short term leases are regarded
as operating leases and the payments made under them are charged to the income
statement on a straight-line basis over the lease term.
Taxation
There is no current tax payable in view of e losses to date.
Deferred income taxes are calculated using the Statement of Financial Position
liability method on temporary differences. Deferred tax is generally provided
on the difference between the carrying amounts of assets and liabilities and
their tax bases. However, deferred tax is not provided on the initial
recognition of goodwill or on the initial recognition of an asset or liability
unless the related transaction is a business combination or affects tax or
accounting profit. Deferred tax on temporary differences associated with
shares in subsidiaries and joint ventures is not provided if reversal of these
temporary differences can be controlled by the Company and it is probable that
reversal will not occur in the foreseeable future. In addition, tax losses
available to be carried forward as well as other income tax credits to the
Company are assessed for recognition as deferred tax assets.
Deferred tax liabilities are provided in full, with no discounting. Deferred
tax assets are recognised to the extent that it is probable that the
underlying deductible temporary differences will be able to be offset against
future taxable income. Current and deferred tax assets and liabilities are
calculated at tax rates that are expected to apply to their respective period
of realisation, provided they are enacted or substantively enacted at the
Statement of Financial Position date.
Changes in deferred tax assets or liabilities are recognised as a component of
tax expense in the income statement, except where they relate to items that
are charged or credited directly to equity, in which case the related current
or deferred tax is also charged or credited directly to equity.
Investments in subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an
entity when it is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns
through its power over the entity.
The investments in subsidiaries held by the Company are valued at cost less
any provision for impairment that is considered to have occurred, the
resultant loss being recognised in the income statement.
Equity
Equity comprises the following:
* “Share capital” represents the nominal value of equity shares, both
ordinary and deferred.
* “Share premium” represents the excess over nominal value of the fair value
of consideration received for equity shares, net of expenses of the share
issues.
* “Other reserves” represent the fair values of share options and warrants
issued.
* “Retained reserves” include all current and prior year results, including
fair value adjustments on financial assets, as disclosed in the consolidated
statement of comprehensive income.
* “Exchange reserve” includes the amounts described in more detail in the
following note on foreign currency below.
Foreign currency translation
The consolidated financial statements are presented in pounds sterling which
is the functional and presentational currency representing the primary
economic environment of the Group.
Foreign currency transactions are translated into the respective functional
currencies of the Company and its subsidiaries using the exchange rates
prevailing at the date of the transaction or at an average rate where it is
not practicable to translate individual transactions. Foreign exchange gains
and losses are recognised in the income statement.
Monetary assets and liabilities denominated in a foreign currency are
translated at the rates ruling at the Statement of Financial Position date.
The assets and liabilities of the Group’s foreign operations are translated
at exchange rates ruling at the Statement of Financial Position date. Income
and expense items are translated at the average rates for the period. Exchange
differences are classified as equity and transferred to the Group’s exchange
reserve. Such differences are recognised in the income statement in the
periods in which the operation is disposed of.
Share–based payments
The Company awards share options to certain Company Directors and employees to
acquire shares of the Company. Additionally, the Company has in previous years
issued warrants to providers of equity finance.
All goods and services received in exchange for the grant of any share–based
payment are measured at their fair values. Where employees are rewarded using
share–based payments, the fair values of employees’ services are
determined indirectly by reference to the fair value of the instrument granted
to the employee.
The fair value is appraised at the grant date and excludes the impact of
non–market vesting conditions. Fair value is measured by use of the Black
Scholes model. The expected life used in the model has been adjusted, based on
management’s best estimate, for the effects of non–transferability,
exercise restrictions, and behavioural considerations.
All equity–settled share–based payments are ultimately recognised as an
expense in the income statement with a corresponding credit to “other
reserves”.
If vesting periods or other non–market vesting conditions apply, the expense
is allocated over the vesting period, based on the best available estimate of
the number of share options expected to vest. Estimates are subsequently
revised if there is any indication that the number of share options expected
to vest differs from previous estimates. Any cumulative adjustment prior to
vesting is recognised in the current period. No adjustment is made to any
expense recognised in prior years if share options ultimately exercised are
different to that estimated on vesting.
Upon exercise of share options, the proceeds received net of attributable
transaction costs are credited to share capital and, where appropriate, share
premium.
A gain or loss is recognised in profit or loss when a financial liability is
settled through the issuance of the Company’s own equity instruments. The
amount of the gain or loss is calculated as the difference between the
carrying value of the financial liability extinguished and the fair value of
the equity instrument issued.
Financial instruments
Financial assets
The Group’s financial assets comprise equity investments held as financial
assets at fair value through profit or loss as required by IFRS 9, and
financial assets at amortised cost, being cash and cash equivalents and
receivables balances. Financial assets are assigned to the respective
categories on initial recognition, based on the Group’s business model for
managing financial assets, which determines whether cash flows will result
from collecting contractual cash flows, selling the financial assets, or both.
Financial assets at amortised cost are non–derivative financial assets with
fixed or determinable payments that are not quoted in an active market. These
assets are initially measured at fair value plus transaction costs directly
attributable to their acquisition or issue, and are subsequently carried at
amortised cost using the effective interest rate method, less provision for
impairment under the expected credit loss model.
The Group’s receivables fall into this category of financial instruments.
Discounting is omitted where the effect of discounting is immaterial.
Equity investments are held as financial assets at fair value through profit
or loss. These assets are initially recognised at fair value and subsequently
carried in the financial statements at fair value, with net changes recognised
in profit or loss.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part
of a group of similar financial assets) is primarily derecognised (i.e.,
removed from the Group’s consolidated statement of financial position) when:
• The rights to receive cash flows from the asset have expired
Or
• The Group has transferred its rights to receive cash flows from the asset
or has assumed an obligation to pay the received cash flows in full without
material delay to a third party under a ‘pass-through’ arrangement; and
either (a) the Group has transferred substantially all the risks and rewards
of the asset, or (b) the Group has neither transferred nor retained
substantially all the risks and rewards of the asset, but has transferred
control of the asset.
Impairment of financial assets
The Group recognises an allowance for ECLs for all debt instruments not held
at fair value through profit or loss.
The amount of the expected credit loss is measured as the difference between
all contractual cash flows that are due in accordance with the contract and
all the cash flows that are expected to be received (i.e. all cash
shortfalls), discounted at the original effective interest rate (EIR).
For trade receivables (not subject to provisional pricing) and other
receivables due in less than 12 months, the Group applies the simplified
approach in calculating ECLs, as permitted by IFRS 9. Therefore, the Group
does not track changes in credit risk, but instead, recognises a loss
allowance based on the financial asset’s lifetime ECL at each reporting
date.
Financial liabilities
All financial liabilities are recognised initially at fair value and, in the
case of loans and borrowings and payables, net of directly attributable
transaction costs.
The Group’s financial liabilities include trade and other payables and are
held at amortised cost. After initial recognition, trade and other payables
are subsequently measured at amortised cost using the EIR method. Gains and
losses are recognised in the statement of profit or loss and other
comprehensive income when the liabilities are derecognised, as well as through
the EIR amortisation process.
Derecognition
A financial liability is derecognised when the associated obligation is
discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an existing liability
are substantially modified, such an exchange or modification is treated as the
derecognition of the original liability and the recognition of a new
liability. The difference in the respective carrying amounts is recognised in
profit or loss and other comprehensive income.
Critical accounting estimates and judgements
The preparation of financial statements in conformity with IFRSs requires
management to make judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets and liabilities, income
and expenses. The estimates and associated assumptions are based on historical
experience and various other factors that are believed to be reasonable under
the circumstances, the results of which form the basis of making the
judgements about carrying values of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these
estimates.
The estimates and underlying assumptions are reviewed on an on–going basis.
Revisions to accounting estimates are recognised in the year in which the
estimate is revised if the revision affects only that year or in the year of
the revision and future years if the revision affects both current and future
years.
The most critical accounting policies and estimates in determining the
financial condition and results of the Group and Company are those requiring
the greater degree of subjective or complete judgement. These relate to:
Capitalisation and recoverability of exploration costs (Note 10):
Capitalised exploration and evaluation costs consist of direct costs, licence
payments and fixed salary/consultant costs, capitalised in accordance with
IFRS 6 "Exploration for and Evaluation of Mineral Resources". The group and
company recognises expenditure as exploration and evaluation assets when it
determines that those assets will be successful in finding specific mineral
assets. Exploration and evaluation assets are initially measured at cost.
Exploration and evaluation costs are assessed for impairment when facts and
circumstances suggest that the carrying amount of an asset may exceed its
recoverable amount. Any impairment is recognised directly in profit or loss.
Recoverability of investment in subsidiaries including intra group receivables
(Note 9 and 11)
The recoverability of investments in subsidiaries, including intra group
receivables, is directly linked to the recoverability of the exploration
assets in those entities, which is subject to the same estimates and
judgements as explained above.
3 Operating loss
Year ended Year ended
30 September
30 September 2020
2019
The operating loss is stated after charging: £ £
Depreciation of property, plant and equipment 3,809 1,701
Operating lease expenses 23,768 23,746
Auditors’ remuneration – fees payable to the Company’s auditor for the
audit of
the parent company and consolidated financial statements 25,750 21,500
4 Earnings per share
Basic and Diluted Year ended 30 September Year ended 30 September
2020 2019
Weighted number of shares in issue during the year 512,411,527 423,047,928
£ £
Loss from continuing operations attributable to owners of the parent (704,413) (757,210)
Loss from discontinued operations attributable to owners of the parent (1,986,469) -
Basic earnings per share has been calculated by dividing the loss attributable
to equity holders of the company after taxation by the weighted average number
of shares in issue during the year. There is no difference between the basic
and diluted earnings per share as the effect on the exercise of options and
warrants would be to decrease the earnings per share.
Details of share options and warrants that could potentially dilute earnings
per share in future periods is set out in Note 1.
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