REG-ECR Minerals plc Final Results
31/03/2022 14:00
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Final Results
31 March 2022
ECR MINERALS plc
(“ECR Minerals”, “ECR” or the “Company”)
AUDITED FINANCIAL RESULTS FOR YEAR ENDED 30 SEPTEMBER 2021
LONDON: 31 MARCH 2022 - ECR Minerals plc is pleased to announce its audited
financial statements for the twelve months ended 30 September 2021 (“FY
2021”). The information presented below has been extracted from the
Company’s Annual Report and Accounts for FY2021.
Copies of the Annual Report and Accounts for FY2021 with the notice of annual
general meeting will be posted to shareholders today and will be available
from today on the Company’s website www.ecrminerals.com
(https://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.ecrminerals.com&esheet=52636350&newsitemid=20220331005640&lan=en-US&anchor=www.ecrminerals.com&index=1&md5=6f086a7a10c7a78de53b4253f3cd5ac2)
. The Company intends to holds its annual general meeting at 9am on 25 April
2021 at Hurlingham Studios, Ranelagh Gardens, London SW6 3PA.
Market Abuse Regulations (EU) No. 596/2014
This announcement contains inside information for the purposes of Article 7 of
the UK version of Regulation (EU) No 596/2014 which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon
the publication of this announcement via a Regulatory Information Service,
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
Adam Jones, Non-Executive Director
Dr Trevor Davenport, Independent Non-Executive Director
Andrew Scott, Non-Executive Director
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=52636350&newsitemid=20220331005640&lan=en-US&anchor=www.ecrminerals.com&index=2&md5=bdf5ed2b31d7ed010c39d96d7e6ae6e5)
WH Ireland Ltd Tel: +44 (0)207 220 1666
Nominated Adviser
Katy Mitchell/Andrew de Andrade
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 (“MGA”) has
100% ownership of the Bailieston and Creswick gold projects in central
Victoria, Australia, has eight licence applications outstanding including two
licence applications lodged in eastern Victoria. (Tambo gold project). MGA is
currently drilling at both the Bailieston (EL5433) and Creswick (EL6148)
projects and has an experienced exploration team with significant local
knowledge in the Victoria Goldfields and wider region.
https://mercatorgold.com.au/
(https://cts.businesswire.com/ct/CT?id=smartlink&url=https%3A%2F%2Fmercatorgold.com.au%2F&esheet=52636350&newsitemid=20220331005640&lan=en-US&anchor=https%3A%2F%2Fmercatorgold.com.au%2F&index=3&md5=0439d756a894ce3ac668502670d001fc)
ECR also owns 100% of an Australian subsidiary LUX Exploration Pty Ltd
(“LUX”) which has three licence applications covering 900 km2 covering a
relatively unexplored area in Queensland, Australia.
https://luxexploration.com/
(https://cts.businesswire.com/ct/CT?id=smartlink&url=https%3A%2F%2Fluxexploration.com%2F&esheet=52636350&newsitemid=20220331005640&lan=en-US&anchor=https%3A%2F%2Fluxexploration.com%2F&index=4&md5=a662e30520b1463f6297989949dd9bfd)
Following the sale of the Avoca, Moormbool and Timor gold projects in
Victoria, Australia to Fosterville South Exploration Ltd (TSX-V: FSX) and the
subsequent spin-out of the Avoca and Timor projects to Leviathan Gold Ltd
(TSX-V: LVX), Mercator Gold Australia Pty Limited has the right to receive up
to A$2 million in payments subject to future resource estimation or production
from projects sold to Fosterville South Exploration Limited.
ECR holds 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, which has a 43-101 compliant resource. ECR also holds a
royalty on the SLM gold project in La Rioja Province, Argentina and can
potentially receive up to US$2.7 million in aggregate across all licences.
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 2021 for ECR Minerals plc (“ECR”, the “Company” or the
“Parent Company”) and its subsidiaries on a consolidated basis (the
“Group”)
Chairman’s Statement
As the COVID-19 pandemic continued to wreak havoc across the globe, for ECR
the twelve months ending 30 September 2021 was one of great operational
progress that saw our determined management team and workforce overcome
adversity to deliver solid progress.
All that was achieved during the year was, however, overshadowed by the
untimely and tragic death of our long serving CEO Craig Brown. Craig was a
close personal friend and confidant of mine. Although he died a few weeks
after the year-end, progress continued through our interim management
committee. I speak for everyone working with and associated with the Company
to say we miss him deeply.
Our operational hub is centred in the state of Victoria in Australia, where
ECR’s wholly owned subsidiary Mercator Gold Australia Pty Ltd (“MGA”)
has continued to develop Bailieston and Creswick, ECR’s two flagship gold
exploration projects. In addition, ECR Minerals formed a subsidiary company,
LUX Exploration Pty Ltd (“LUX”) in May 2021, to develop potential gold
licence assets in the Lolworth Range area in Northern Queensland, and on 3
February 2022 the three Lolworth exploration licences were granted.
Throughout the year MGA conducted intensive drilling and soil sampling
programmes at the Historic Reserve #3 (HR3) prospect, which includes the
prospective Byron, Dan Genders, Scoulars and Maori Reefs, plus numerous
cross-structures. Drilling results have provided us with some initial good
cross-sections of gold grades and a detailed understanding of the geology that
have, in turn, identified further targets. Post year-end results from core
logging and soil sample testing have left us enthusiastic with the scale and
development potential of HR3 as a whole.
An intensive campaign of drilling and soil sampling at Creswick has also
provided us with some good initial gold grades and again a detailed
understanding of the narrow vein geology of the region, which is similar in
many ways to the Ballarat gold mine located directly south of the Creswick
area. Unfortunately, the prevalence of COVID has resulted in delays to assay
results and supply chain disruption, but the team on the ground have worked
tirelessly to overcome these challenges.
Following a £2m (gross) fundraise in April 2021, ECR decided to use its
strong cash position to invest into three properties; 35 Brewing Lane,
Springmount (Creswick), 127 Nagambie –Rushworth Road (Bailieston) and 177
Bassett Road, Sebastian. Many mining groups operating in Victoria have
encountered difficulties with land access in the region, so immediately the
Brewing Lane and Nagambie-Rushworth Road properties provided full access and
working rights across our flagship projects, while the Bassett Road property
now provides accommodation for the Bendigo-based workforce. We believe that
the buoyant Victoria property market should in time see a comfortable increase
in the value of each property, giving ECR a far superior return to keeping
cash on deposit. Despite the loss of Craig, we are hugely optimistic with the
future and what we will achieve in the current year.
Through MGA, ECR also owns two exploration licence applications in eastern
Victoria, known as the Tambo project. Post year-end, one of the exploration
licences covering the Tambo River and Swifts Creek region was granted (see
announcement dated 15 Decmber 2021).
Separately, approaching the end of the financial year, our 25% interest in the
Danglay Gold project in the Philippines was confirmed. Previously,
uncertainties over formalising our stake in the asset saw the value written
down on our 2020 annual report, but I am happy to say this is no longer the
case. Discussion on the Danglay valuation is addressed by our auditors in this
report.
The costs of maintaining intensive drilling campaigns have all served to
reduce the cash position during the year, which as at 31 March 2022 stands at
£1.23m. Nonetheless, we have significantly advanced the value of our assets
across the Group, together with our Victoria properties at this stage we do
not believe there is an additional cash requirement in the immediate future.
Finally, while we look forward to progressing ECR interests in 2022, our
thoughts remain with Craig and his family.
Weili (David) Tang
Chairman
31 March 2022
Non-Executive Director Committee Report
Although we believe the gold price performance during FY2021 lacked some of
the excitement and growth of the previous year gold retained a value of
US$1737/oz at the end of the September 2021. Unlike 2020, the latter half of
FY2021 saw some disruptions in operations as a result of the COVID-19
pandemic, which affected the timing of assay results and associated supply
chains. This all paled into insignificance with the loss of our CEO and
colleague Craig Brown, and while we are now reporting to you as a committee,
his sudden death has affected us all.
As in the previous year, ECR’s operational focus remained on Victoria,
Australia, with intensive drilling campaigns at the Bailieston and Creswick
gold projects. LUX Exploration Pty Ltd, a new subsidiary company, was set up
to apply for and manage three new exploration licence applications in the
Lolworth Range area, near to the Charters Towers Region in North Queensland.
Initial exploration work will take place there in 2022.
ECR’s 25% interest in the Danglay Gold project in the Philippines, which has
an inferred MRE of 63,500 ounces of gold at 1.55g/t, was formalised at the end
of the year under review following the resolution of a long-standing legal
dispute.
Also, following the year under review, in January 2022 approval was received
for one of the exploration licences covering the Tambo River and Swifts Creek
in eastern Victoria, Australia.
Exploration at Bailieston and Creswick Projects
An intensive drilling campaign began in January 2021 with the aim of fully
exploring the Historic Reserve #3 (HR3) prospect, which includes the Byron,
Dan Genders, Scoulars and Maori Reefs. Initial success was achieved in
drilling under the historic Byron Mine with hole BH3DD001 which intersected
0.6m @ 19 g/t Au from 110.9m drilled depth (see announcement dated[ 20 April
2021]). A total of eight drillholes were completed across parts of the HR3
goldfield by mid-2021. With initial first pass exploration completed at HR3,
the drill rig was moved to test the nearby Cherry tree (HR4) prospect where
drilling of ten diamond holes were completed by September 2021. Ultimately the
drill results were disappointing, although we now have a full structural
interpretation of the deposit. It was the intention to move to the Blue Moon
prospect located in the southern part of the Bailieston licence area once
compensation arrangements were made to land owners. (Following the year under
review, in January 2022, permission was received to access the Blue Moon
prospect to continue exploration). The Company’s drill rig moved back to HR3
to follow up results from the initial first-pass drilling. Drilling is still
continuing there into 2022 with a focus on the Maori, Hard-Up and Scoulers
Reef systems. In addition to drilling, soil sampling has been completed over
the central and eastern parts of the HR3 Goldfield along strike of the
Scoulers Reef.
Following the end of the period under review, results were received in
December 2021 that revealed four gold anomalies along the Scoulers and Dan
Genders Reef lines, at the convergence with the Hard-Up Reef. This resulted in
a proposed ‘dilational jog’ model. With further assays due, this is
looking like an exciting discovery.
Drilling at the Creswick project began during the winter of 2020 and continued
apace through to September 2021. The first hole (CSD001) intersected 0.95m @
9.68 g/t Au from 131.9m drilled depth (see announcement dated [19 July 2021]).
This was a significant development, being the first diamond hole drilled into
the Dimocks Main Shale (DMS) within the entire tenement. As further drilling
data came in, holes CSD003 returned the best gold intersections yet, with
0.95m @ 9.93 g/t Au and 0.95m @ 23.58 g/t Au from drilled depths of 84.2m and
89.05m respectively (see announcement dated [19 July 2021]). Head Geologist
Adam Jones summed up the geology and ‘coarse nature’ of the gold deposits
as gold within defined ‘mineral shoots’ similar in many ways to the
geology within the narrow vein gold mine at Ballarat.
Following the end of the year under review, delayed assay results from
Creswick revealed ‘erratic’ results due to the coarse nature of the gold
deposits, but armed with this new knowledge, ECR will continue to explore
Creswick licence EL006184, and will commence exploration on the newly approved
licence EL6907 located further south.
Property Purchase
There are well-documented problems in Victoria for mining exploration
companies seeking to access land to undertake exploration work. Land owners
have either refused access or demanded disproportionate compensation from the
explorers in order to grant access. Craig Brown saw an opportunity to solve
this issue by investing into three properties at 35 Brewing Lane, Springmount
(Creswick), 127 Nagambie –Rushworth Road (Bailieston) and 177 Bassett Road,
Sebastian.
Through owning these properties, our drilling and geology teams were afforded
full access and working rights across our flagship projects, along with
accommodation. In particular, Brewing Lane and Nagambie-Rushworth Road have
the potential to support mine works, and in the case of Creswick, a mine
decline, should an economic gold resource be found. The Bassett Road property
is already housing members of our workforce at Bendigo. The added benefit is
the properties were purchased amidst what the directors believe a
strengthening Victoria property market and given the recent sale prices of
similar properties in the area, we believe all three properties have
appreciated in value.
Tambo Gold Project
In September 2020, MGA lodged two new exploration licence applications in
eastern Victoria, EL007484 and EL007486, which comprise the Tambo gold
project, and which covers a sizeable area of prospective geology near historic
goldfields.
The applications cover portions of the historic Swifts Creek/Omeo and Tambo
River Goldfields that have a recorded historical gold production totalling
225,000 oz, 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.
On 15 December 2021 the license EL007484 covering Swifts Creek and the Tambo
River has been approved, and some preliminary exploration work is planned for
2022.
Lolworth Range Gold Project
In May 2021, exploration licences for tenements EPM27901, EPM27902 and
EPM27903 were applied for by ECR Minerals’ subsidiary company LUX
Exploration Limited (LUX). The tenements are located within the Lolworth Range
area, North Queensland. The area has been closely monitored by ECR’s Head
Geologist Adam Jones for at least eight years and is considered prospective
for gold. The exploration licences for all three areas were granted to LUX on
1 February 2022. The tenements will expire in five years (on 31 January 2027)
and, while they will be available for renewal after the initial 5-year term,
the area available for renewal will be reduced by 50%, which is a standard
term of exploration licences to encourage companies to focus their exploration
activities.
LUX has a commitment expenditure of AUD$650,000 for the first three years
across the three licence areas, which is expected to be funded from ECR’s
existing cash resources.
Overview of Exploration Licence Portfolio
At the end of the financial year under review, MGA held two granted mineral
exploration licences in Victoria (EL5433 and EL6148).). At the time of
publishing, MGA has applied to renew Creswick license EL006184, and has
received approval for EL006907 to the south, linking Creswick to the Ballarat
East-Nerrina Goldfield. MGA holds granted exploration licence EL5433 at
Bailieston, licence EL007484 covering Swifts Creek and the Tambo River and
three new exploration licences (EPM27901, EPM27902 and EPM27903) in the
Lolworth area, North Queensland. 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.
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 in a competitive bid with three other applicants.
Danglay Gold Project, Philippines
Following the end of the year under review, ECR Minerals received formal
recognition for its 25% shareholding in Philippines-based company Cordillera
Tiger Gold Resources, Inc. (“Cordillera Tiger”), having invested some
£1.2 million in the Danglay gold project to date. In July 2021, Cordillera
Tiger successfully renewed Exploration License EP-006 at the Danglay gold
project, which is located in a prolific gold and copper mining district in the
north of the Philippines.
The ECR Board believes the political climate for the minerals industry in the
Philippines is improving and considers that the Danglay gold project 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.
Avoca and Timor Exploration License Royalties
In April 2020 MGA entered into an agreement for the sale of Avoca and Timor
exploration licences EL5387, EL006280, EL006913 and EL006278 in Victoria to
Currawong Resources Pty Ltd, a wholly owned subsidiary of Fosterville South
Exploration Ltd. A cash payment of US$500,000 was received, and ECR is
entitled to:
1. 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;
2. 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.
SLM Gold Project Royalties
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, owned by Hanaq
Argentina SA (Hanaq). 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.
FINANCIAL RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2021
For the year to 30 September 2021 the Group recorded a total comprehensive
loss of £1,413,206 compared with £2,595,002 for the year to 30 September
2020.
The Group’s net assets at 30 September 2021 were £7,657,683 in comparison
with £3,563,819 at 30 September 2020. The increase is due to an increase in
exploration assets as a result of the capitalisation of exploration
expenditure during the year, and purchase of two properties as a result of the
current aggressive drilling programme.
Exploration activity took place in Central Victoria, Australia during the year
to 30 September 2021, as discussed in the Interim Committee Report and later
under “Operating Review”. Capitalised exploration assets are valued in the
Consolidated Statement of Financial Position at cost; this value should not be
confused with the realisable value of the relevant projects or be considered
to determine the value accorded to the projects by the stock market, which in
both cases may be considerably different.
Weili (David) Tang
Non-Executive Chairman
31 March 2022
Independent Auditor’s Report
For the year ended 30 September 2021
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 2021 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
significant accounting policies. The financial reporting framework that has
been applied in their preparation is applicable law and international
accounting standards in conformity with the requirements of 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 2021 and of
the group’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 requirements of the
Companies Act 2006;
* the parent company financial statements have been properly prepared in
accordance with international accounting standards in conformity with the
requirements of 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
In auditing the financial statements, we have concluded that the directors’
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation of the directors’
assessment of the group’s and parent company’s ability to continue to
adopt the going concern basis of accounting included evaluating management’s
cash flow forecasts for a period of at least 12 months from the date of
approval of the financial statements, including challenge of the underlying
assumptions, evaluating subsequent events impacting going concern and
sensitising the cash flows for possible changes which could impact the
available headroom.
Based on the work we have performed, we have not identified any material
uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the group's or parent company’s
ability to continue as a going concern for a period of at least twelve months
from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Our application of materiality
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 (2020: £55,000) based upon 2% of gross assets,
capped at the prior period materiality in order to obtain additional coverage
of additions in the year. 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 £50,000
(2020:£45,000), based upon 2% of gross assets and capped to be below group
materiality.
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 £3,500 to £50,000 (2020: between £40,000 to
£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 (2020: £2,750) as well as differences below these thresholds that, in
our view, warranted reporting on qualitative grounds.
Our approach to the 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 2021 were located in the United
Kingdom and Australia. 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 our scope addressed this matter
Recoverability of intangible assets – exploration and evaluation assets
(refer to note 10)
The group as at 30 September 2021 had ongoing early stage exploration projects Our work in this area included:
in the Philippines and Australia.
*Sample testing of exploration and evaluation expenditure to assess their
There is a risk that the expenditure is not correctly capitalised in eligibility for capitalisation under IFRS 6 by corroborating to the original
accordance with IFRS 6. There is also a risk that the capitalised exploration source documentation.
costs are not recoverable and should be impaired. The carrying value of
*Inspection of the current exploration licences to verify they remained valid
intangible exploration and evaluation assets as at 30 September 2021, which and that the group held good title.
are tested annually for impairment, is £3,350,663. Comprising early stage
*Review of correspondence (where applicable) with licensing authorities to
exploration projects, the impairment assessment requires management judgement ensure compliance and assess the risk of non-renewal. We assessed the sampling
and estimation of a range of applicable factors. results and progress of the projects and whether they indicate the existence
of commercially viable projects.
Relevant disclosures in the financial statements are made in Note 2
*Review and challenge of management’s documented consideration of impairment
surrounding critical accounting judgements, and in Note 10 for Intangible by individual project.
assets.
*Establishing the intention of the Board to undertake future exploration work.
*Review of any internal / external resource estimates produced during the year.
*Discussion of status of all projects with management.
As disclosed in subsequent events, the group has now 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 exploration permit for the
Danglay project, which originally expired on 30 September 2015, was renewed in
July 2021. There is however continued uncertainty within the Philippines
government regarding their policy towards the mining sector. This indicates
the existence of a material uncertainty over the recoverability of the
carrying value of the Danglay gold project, which amounted to £1,254,284 as
at 30 September 2021.
Other information
The other information comprises the information included in the annual report,
other than the financial statements and our auditor’s report thereon. The
directors are responsible for the other information contained within the
annual report. Our opinion on the group and 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. Our responsibility is to read the other
information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge
obtained in the course of the audit, or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether this gives rise to a
material misstatement in the financial statements themselves. If, based on the
work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
* the information given in the strategic report and the directors’ report for
the financial year for which the financial statements are prepared is
consistent with the financial statements; and
* the strategic report and the directors’ report have been prepared in
accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the 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 Report of the Directors, 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 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.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:
* We obtained an understanding of the group and parent company and the sector in
which they operate to identify laws and regulations that could reasonably be
expected to have a direct effect on the financial statements. We obtained our
understanding in this regard through discussions with management, application
of cumulative audit knowledge and experience of the sector.
* We determined the principal laws and regulations relevant to the group and
parent company in this regard to be those arising from international
accounting standards, the Companies Act 2006, tax laws and regulations, local
employment law and conditions stipulated in the exploration licenses.
* We designed our audit procedures to ensure the audit team considered whether
there were any indications of non-compliance by the group and parent company
with those laws and regulations. These procedures included, but were not
limited to:
* Enquiries of management
* Review of Board minutes
* Review of legal and regulatory correspondence
* We also identified the risks of material misstatement of the financial
statements due to fraud. We considered, in addition to the non-rebuttable
presumption of a risk of fraud arising from management override of controls,
that the judgements and estimates made by management in their assessment of
the recoverability of intangible assets represented the most significant risk
of material misstatement. Refer to the key audit matter above.
* We addressed the risk of fraud arising from management override of controls by
performing audit procedures which included, but were not limited to: the
testing of journals; reviewing accounting estimates for evidence of bias; and
evaluating the business rationale of any significant transactions that are
unusual or outside the normal course of business.
* We obtained sufficient appropriate audit evidence regarding the financial
information of the entities or business activities within the group to express
an opinion on the consolidated financial statements. We are responsible for
the direction, supervision and performance of the group audit. We remain
solely responsible for the audit opinion.
Because of the inherent limitations of an audit, there is a risk that we will
not detect all irregularities, including those leading to a material
misstatement in the financial statements or non-compliance with regulation.
This risk increases the more that compliance with a law or regulation is
removed from the events and transactions reflected in the financial
statements, as we will be less likely to become aware of instances of
non-compliance. The risk is also greater regarding irregularities occurring
due to fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities
(https://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.frc.org.uk%2Fauditorsresponsibilities&esheet=52636350&newsitemid=20220331005640&lan=en-US&anchor=www.frc.org.uk%2Fauditorsresponsibilities&index=5&md5=c4466f6d08312535d6e9e32a44fc9bac)
.( )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
31 March 2022
Consolidated Income Statement
For the year ended 30 September 2021
Year ended Year ended
30 September 2021 30 September 202020
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 (1,142,338) (799,585)
Currency exchange differences (347,315) (33,497)
Total administrative expenses (1,489,653) (833,082)
Operating loss 3 (1,489,653) (726,890)
Other financial assets – fair value movement 9 4,593 13,683
(1,485,060) (713,207)
Financial income 7 288 478
Other income 19,021 8,316
Finance income and costs 19,309 8,794
Loss for the year before taxation
(1,465,751) (704,413)
Income tax 5 - -
Loss for the year from continuing operations (1,465,751) (704,413)
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 (1,465,751) (2,690,882)
Earnings per share - basic and diluted
On continuing operations 4 (0.16)p (0.14)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 2021
Year ended Year ended
30 September 2021 30 September 2020
£ £
Loss for the year (1,465,751) (2,690,882)
Items that may be reclassified subsequently to profit or loss
Gain on exchange translation 52,545 95,880
Other comprehensive gain for the year 52,545 95,880
Total comprehensive loss for the year (1,413,206) (2,595,002)
Attributable to: -
Loss on continuing operations (1,413,206) (608,533)
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 2021
Group Company
30 September 30 September 30 September 30 September
Note 2021 £ 2020 2021 2020
£ £ £
Assets
Non-current assets
Property, plant and equipment 8 1,303,557 183,539 58,333 2,737
Investments in subsidiaries 9 - - - -
Intangible assets 10 3,321,481 1,869,184 1,410,144 1,333,282
Other receivables 11 - - 5,133,826 1,029,067
4,625,038 2,052,723 6,602,303 2,365,086
Current assets
Trade and other receivables 11 221,869 108,617 878,097 726,689
Financial assets at fair value through profit or loss 9 31,461 26,870 31,461 26,870
Cash and cash equivalents 12 2,982,046 1,497,231 1,467,835 1,207,190
3,235,376 1,632,718 2,377,393 1,960,749
Total assets 7,860,414 3,685,441 8,979,696 4,325,835
Current liabilities
Trade and other payables 14 202,731 121,622 41,198 93,848
202,731 121,622 41,198 93,848
Total liabilities 202,731 121,622 41,198 93,848
Net assets 7,657,683 3,563,819 8,938,498 4,231,987
Equity attributable to owners of the parent
Share capital 13 11,290,483 11,286,928 11,290,483 11,286,928
Share premium 13 52,593,562 47,090,048 52,593,562 47,090,048
Exchange reserve (583,998) 531,453 - -
Other reserves 440,706 440,706 440,706 440,706
Retained losses (57,251,067) (55,785,316) (55,386,252) (54,585,695)
Total equity 7,657,683 3,563,819 8,938,498 4,231,987
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 £800,558 (2020: £2,399,369
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 31 March 2021 and were signed on its behalf by:
Weili (David) Tang xx
Non–Executive Chairman Non-Executive Director
Consolidated Statement of Changes in Equity
For the year ended 30 September 2021
Share capital Share premium Exchange reserve Other reserves Retained reserves
(Note 13) (Note 13) Total
£ £ £ £ £ £
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)
Loss 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
Shares 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
Loss for the year – – – – (1,465,751) (1,465,751)
Gain on exchange translation – – 52,545 – – 52,545
Total comprehensive loss – – 52,545 – (1,465,751) (1,413,206)
Shares issued 3,556 5,631,514 – – – 5,635,070
Share issue costs – (128,000) – – – (128,000)
Share based payments – – - – - -
Total transactions with owners, recognised directly in equity 3,556 5,503,514 - – - 5,507,070
Balance at 30 September 2021 11,290,483 52,593,562 583,998 440,706 (57,251,067) 7,657,683
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 2021
Share capital Share premium Other reserves Retained reserves
(Note 13) (Note 13) Total
£ £ £ £ £
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 payments – 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
Loss for the year – – – (800,558) (800,558)
Total comprehensive expense – – – (800,558) (800,558)
Shares issued 3,556 5,631,514 – – 5,635,070
Share issue costs – (128,000) – – (128,000)
Total transactions with owners, recognised directly in equity 3,556 5,503,514 – - 5,507,070
Balance at 30 September 2021 11,290,483 52,593,562 440,706 (55,386,253) 8,938,498
The notes set out below are an integral part of these financial statements.
Consolidated & Company Cash Flow Statement
For the year ended 30 September 2021
Group Company
Year ended 30 September Year ended 30 September Year ended 30 September Year ended 30 September
Note 2021 2020 2021 2020
£ £ £ £
Net cash used in operations 20 (1,369,242) (668,377) (1,006,026) (694,408)
Investing activities
Purchase of property, plant & equipment 8 (1,171,840) (186,307) (59,038) (5,963)
Increase in exploration assets 10 (1,481,479) (180,653) (76,862) –
Investment in subsidiary - – – –
Proceeds from disposal of licenses – 275,701 – –
R&D tax credits on exploration – 307,818 – –
Loan to subsidiary - – (4,104,759) –
Interest income 7 288 478 260 –
Net cash generated from / (used in) investing activities (2,653,031) 217,037 (4,240,398) (5,963)
Financing activities
Proceeds from issue of share capital (net of issue costs) 5,507,088 1,680,054 5,507,069 1,680,054
Net cash from financing activities 5,507,088 1,680,054 5,507,069 1,680,054
Net change in cash and cash equivalents 1,484,815 1,228,714 260,645 979,682
Cash and cash equivalents at beginning of the year 1,497,231 268,517 1,207,190 227,508
Cash and cash equivalents at end of the year 12 2,982,046 1,497,231 1,467,835 1,207,190
Non-cash transactions:
1. Settlement of creditors of £nil (2020: £7,715) 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
Office T3, Hurlingham Studios, Ranelagh Gardens, London SW6 3PA. The Company
is quoted on AIM, a market 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
1. Statement of compliance
The consolidated financial statements have been prepared in accordance with
international accounting standards (IAS) as adopted BY the UK 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.
1. (i) New and amended standards, and interpretations issued and effective for
the financial year beginning 1 October 2020
There were no new standards, amendments or interpretations effective for the
first time for periods beginning on or after 1 October 2020 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 2021.
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 31 March 2022, the Group has cash and cash
equivalents of £1,226,328 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
Motor Vechiles 5 years
Land Not depreciated
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.
Inventory
Inventory are stated at cost less any provision for impairment losses. Costs
are assigned to individual items of inventory on the basis of weighted average
costs. Costs of purchased inventory are determined after deducting rebates and
discounts. Net realisable value is the estimated selling price in the ordinary
course of business less the estimated costs of completion and the estimated
costs necessary to make the sale. Where inventory are acquired at no cost, or
for nominal consideration, their costs shall be their fair value as at the
date of acquisition. Raw materials and stores, work in progress and finished
goods are stated at the lower of cost and net realisable value.
When inventories are sold, exchanged or distributed the carrying amount of
those inventories shall be recognized as an expense in the period in which the
related revenue is recognized. If there is no related revenue, the expense is
recognized when the goods are distributed, or related service is rendered. The
amount of any write-down of inventories to net realizable value and all losses
of inventories shall be recognized as an expense in the period the write-down
or loss occurs. The amount of any reversal of any write–down of inventories,
arising from an increase in net realizable value, shall be recognized as a
reduction in the amount of inventories recognized as an expense in the period
in which the reversal occurs.
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 2021
2020
The operating loss is stated after charging: £ £
Depreciation of property, plant and equipment 51,822 3,809
Operating lease expenses 31,337 23,768
Auditors’ remuneration – fees payable to the Company’s auditor for the
audit of
the parent company and consolidated financial statements 26,000 25,750
4 Earnings per share
Basic and Diluted Year ended 30 September Year ended 30 September
2021 2020
Weighted number of shares in issue during the year 892,410,767 512,411,527
£ £
Loss from continuing operations attributable to owners of the parent (1,413,206) (704,413)
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.
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