REG-ECR Minerals plc Final Results
03/04/2023 07:00
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Final Results
3 April 2023
ECR MINERALS plc
(“ECR Minerals”, “ECR” or the “Company”)
AUDITED FINANCIAL RESULTS FOR YEAR ENDED 30 SEPTEMBER 2022
ECR Minerals plc is pleased to announce its audited financial statements for
the twelve months ended 30 September 2022 (“FY 2022”). The information
presented below has been extracted from the Company’s Annual Report and
Accounts for FY2023.
Copies of the Annual Report and Accounts for FY2022 with the notice of annual
general meeting have been posted to shareholders and are 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=53372128&newsitemid=20230402005022&lan=en-US&anchor=www.ecrminerals.com&index=1&md5=7570fe5d38c0687521b4a16dc484eec6)
. The Company intends to hold its annual general meeting at 9am on 24 April
2023 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
Andrew Haythorpe, Chief Executive Officer
Adam Jones, 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=53372128&newsitemid=20230402005022&lan=en-US&anchor=www.ecrminerals.com&index=2&md5=75605ebfdead6ef0dd8171cafb9e68d7)
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
Brand Communications Tel: +44 (0)7976 431608
Public & Investor Relations
Alan Green
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 six licence applications outstanding which includes
one licence application lodged in eastern Victoria. (Tambo gold project). MGA
is currently drilling at the Bailieston Blue Moon Project (EL5433) and
undertaking geochemical exploration on the Creswick (EL6148) project and has
an experienced exploration team with significant local knowledge in the
Victoria Goldfields and wider region.
ECR also owns 100% of an Australian subsidiary LUX Exploration Pty Ltd
(“LUX”) which has three approved exploration permits covering 946 km2 over
a relatively unexplored area in Queensland, Australia.
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 90% 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 2022 for ECR Minerals plc (“ECR”, the “Company” or the
“Parent Company”) and its subsidiaries on a consolidated basis (the
“Group”)
Chairman’s Statement
Although the year to September 2022 has been a year of significant operational
progress, it was overshadowed for the most part by the untimely and tragic
death of long serving CEO Craig Brown. Craig was a close personal friend and
confidant of mine, and his death in October 2021 was a profound shock to us
all. A year on and his family are still with us as enthusiastic supporters and
shareholders, keen to see his legacy fulfilled.
As a result of Craig’s death, an interim management committee was set up to
oversee the continued smooth running of the Company, including the ongoing
drill campaigns underway in Victoria. This was not without its challenges, but
thanks to an experienced operational team on the ground in Victoria, our now
Technical Director Adam Jones oversaw the continued smooth running and restart
of diamond drilling activities at Bailieston.
The search for a CEO to replace Craig started at the end of 2021, and by April
2022, Andrew Haythorpe’s experience as a board member with numerous listed
mining companies put him in pole position as our clear favoured candidate.
Since his arrival, Andrew has adopted a structured and methodical approach in
assessing our existing assets and as we have seen post year end, he is now
bringing his own ideas and projects into the fold. The most significant
manifestation of this was the announcement post year end that ECR had been
granted a conditional option to acquire the entire issued share capital of
Placer Gold Pty Ltd, the beneficial holder of three granted mining tenements
(EPM 27518, EPM 25855 and EPM 19437) located in NE Queensland, together known
as the Hurricane Project. Following a fundraise announced post year end, the
Company is now in a position to potentially complete on the option acquisition
once the steps outlined in the agreement have been undertaken. Hurricane is a
late-stage exploration project that offers three tenements all highly
prospective for gold and antimony.
ECR’s operational hub is currently centred in the state of Victoria in
Australia, and through our wholly owned Australian subsidiary Mercator Gold
Australia Pty Ltd (“MGA”) we have continued to develop our projects at
Bailieston and Creswick. Through our other wholly owned subsidiary LUX
Exploration Pty Ltd (“LUX”) we are continuing to develop potential gold
and battery metals assets in the Lolworth Range area in Northern Queensland
and following the grant of exploration licences there in February 2022, our
field team have undertaken a comprehensive stream sediment sampling campaign,
with some impressive results announced post year end.
In Victoria, following the discovery of the highest-grade gold intercept yet
revealed at the Historic Reserve #3 (HR3) prospect, the MGA team completed a
series of intensive diamond drilling campaigns at HR3, including the
prospective Byron, Dan Genders, Scoulars and Maori Reefs, plus numerous
cross-structures. In August 2022, despite delays in receiving assay results
from the labs, results from several holes led to the discovery of two
mineralisation corridors within the Maori Anticline at Historic Reserve 3
(HR3). Post year end, we announced final gold results from the 2022 HR3 drill
programme and, along with the earlier results, the full dataset is now
undergoing evaluation prior to announcing our next steps for 2023. Also post
year end, a further two exploration licences were granted to MGA at
Bailieston, bringing our total land package there to 179 square km, including
our own property at Nagambie Rushworth Road, acquired in summer 2021.
Of all the Bailieston projects, it was Blue Moon that piqued our new CEO’s
interest due to its unusual geology. Blue Moon was finally drilled at the end
of the year in focus, and post year end an encouraging grade from the first
Blue Moon drill hole was reported.
Historically, a lot of investor interest has centred on our Creswick project,
where ECR also owns a second property at Springmount. Following a visit to the
Creswick tenements with Technical Director Adam Jones earlier this year,
Andrew Haythorpe took the decision that the Company should re-assay the
Creswick diamond drill core. This proved to be a master stroke, with high
grade results revealed including 0.7m @47.75 g/t Au (see announcement dated
[19 October 2022] for the full details of these results). Our key licence
there was renewed during the year for a further 5 years, and along with the
grant of the adjacent Ballarat East Nerrina Goldfield licence, our team are
gearing up for a new focus on Creswick in 2023.
ECR (through MGA) also owns two exploration licences in eastern Victoria,
known as the Tambo project. Licence EL007484 covering the Tambo River and
Swifts Creek region was granted in December 2021, and this territory will also
be in focus for exploration in 2023.
In December 2021, ECR formalised its 25% shareholding in Cordillera Tiger Gold
Resources, owner of Exploration Licence EP-006 at the Danglay Gold Project, N
Philippines. April 2022 saw ECR acquire further shares from an existing
shareholder to take a majority 70% stake in the project, bringing the nascent
value at Danglay back to the fore on our balance sheet. With our focus very
much on Australia, several options are being explored to crystallize value
here.
In maintaining intensive drilling campaigns and exploration activities,
ECR’s capital position has reduced during the year, and now stands at
£612,582. Following the previously mentioned post year end fundraising, and
the sale of the Bendigo property announced in August 2022. With further asset
disposals under consideration, the costs of our scheduled activities for the
coming year are in hand.
We have significantly advanced the value of our assets across the group during
the year, and now with Andrew’s leadership I believe we have never been
better positioned to deliver transformative value to our shareholders.
Weili (David) Tang
Chairman
31 March 2023
Chief Executive Officer Report
In my first report to you as your CEO, I must first pay tribute to my
predecessor Craig Brown. I am under no illusions that his are big shoes to
fill, but it is my sincere hope that with his family seeking fulfilment of his
legacy, I and your Board can bring some of these key assets to fruition.
I would also like to express my gratitude to the Interim Committee of Chairman
David Tang, Technical Director Adam Jones, and Non-Executive Director’s
Andrew Scott and Trevor Davenport for overseeing the day to day running of the
business before my arrival.
The early part of the year saw the gold price continue to build, pushing back
over US$2,000oz in March, nearly reaching the highs of US$2,067 oz in March
2020. That was the best performance segment of the year however, as rising
interest rates and hawkish outlooks from the US Fed and the European Central
Bank saw the gold price slide lower to close out the ECR financial year at
US$1,618 oz. It should be remembered that although gold is considered a hedge
against rising inflation, higher rates raise the opportunity cost of holding
non-yielding bullion, which will invariably weigh on the gold price. Post year
end we have seen a resurgence in value, which we believe is due to gold’s
compelling safe-haven status set against a highly uncertain macro picture.
Since my arrival in April 2022 I have focussed on ECR’s existing drilling
operations in Victoria, Australia. I took time to get to know the projects at
Bailieston and Creswick so I could form a judgement on how these assets could
fit into an expanding gold exploration Company. I was very impressed with what
I found. I spent time exploring the locations with Adam Jones, and as a
geologist I was highly impressed with both the work he’d overseen to date
and also his ideas on further developing each project.
With my knowledge of Northern prior experience exploring in North Queensland,
I was already aware of the history and relatively unexplored nature of
Lolworth Range near to the Charters Towers region, and, along with Adam Jones,
I am equally enthusiastic over the opportunity and visible gold observed in
the field with assays now returning from the initial field campaign. I also
look forward to exploring and possibly developing the Hurricane project, on
which ECR announced a conditional option to buy 100% for cash and shares in
2023 just after the financial year end.
Victoria Work Overview:
Bailieston:
The Bailieston area is sited 47 km east of Kirkland Lake Gold’s prolific
Fosterville gold mine, which produced 509,601 ounces in 2021, with head grades
approaching 23.7g/t. To date, ECR has drilled 9,485m at Bailieston across
several projects since Jan 2021. Following the discovery of the highest-grade
gold intercept yet revealed at the Historic Reserve #3 (HR3) prospect, the
team completed a series of intensive diamond drilling campaigns at HR3, and in
August 2022, results from several holes led to the discovery of two
mineralised corridors within the Maori Anticline at HR3. Post year end, we
announced final gold results from the 2022 HR3 drill programme and, along with
the earlier results, this full dataset is now being evaluated by our geology
team. Also post year end, a further two exploration licenses were granted at
Bailieston, bringing our total land package there to 179 square km, including
our own property at Nagambie Rushworth Road, acquired in summer 2021.
Of particular interest is the Blue Moon project due to its unusual geology and
mineralization style. It offers unusually broad width and consistency (true
width up to 7m). RC drilling in 2019 revealed 11m @ 5.13 g/t Au and 21m @ g/t
Au, with mineralisation open to the east, west and down-dip. Once all the
results are received, we can then make decisions on next steps.
Creswick:
During the summer of 2022, the management team came to London where I
presented our investment case at the Proactive One 2 One event. Post year end
I returned to London to attend 121 Mining Investment and Mines and Money. On
each visit I was struck by how much investor interest was centred around
Creswick in the wake of works and drilling undertaken there since 2019. It is
also here at Springmount that ECR owns a second property with some historical
mine workings on the land. Following my initial visit to the Creswick
tenements with Technical Director Adam Jones earlier this year, we decided
re-assay the Creswick diamond drill core. This proved to be a good decision,
and just after our year end, the re assay revealed high grade results
including 0.7m @47.75 g/t Au. Our key license there was renewed during the
year for a further 5 years, and along with the grant of the adjacent Ballarat
East Nerrina Goldfield license, armed with the re assay data our team are
gearing up for a new focus on Creswick in 2023.
Tambo:
There are two exploration licences one still in application and the other now
granted in eastern Victoria, known as the Tambo project. Licence EL007484
covering the Tambo River and Swifts Creek region was granted in December 2021,
and this territory will also be in focus for exploration in 2023. The
territory covers portions of the historic Swifts Creek/Omeo and Tambo River
Goldfields that have recorded historical gold production totalling 225,000 oz
(Geological Survey of Victoria). Tambo is considered to be prospective for
orogenic reef gold and additionally for intrusion-related gold and base metal
systems.
N Queensland Work Overview:
Lolworth Range
The Lolworth Range area in North Queensland has been closely monitored by
ECR’s Head Geologist Adam Jones for at least eight years and is considered
prospective for gold. In February 2022, exploration licences for tenements
EPM27901, EPM27902 and EPM27903 were granted (they will expire in five years
on 31 January 2027). ECR has a commitment expenditure of AUD$650,000 for the
first three years across the three licence areas, and our team wasted no time
in getting on the ground there, undertaking a comprehensive stream sediment
sampling campaign, with some impressive results announced post year end with
visible gold in 14% of the first 125 stream sediment samples. This is very
encouraging. Further anomalies with tin and tungsten, plus multiple pegmatites
(potential lithium sources) were observed and we are now putting together a
follow up plan of action.
Hurricane Project (Post Year End)
Post year end, ECR was granted a conditional option to acquire the entire
issued share capital of Placer Gold Pty Ltd, the beneficial holder of three
granted mining tenements (EPM 27518, EPM 25855 and EPM 19437) located in NE
Queensland, together known as the Hurricane Project. Hurricane was discovered
5 years ago by a geologist who followed the Hodgkinson River tributaries to
their source and discovered numerous gold veins at surface with grades ranging
from 1- 20g/t over widths of 0.5-7m. Here ECR has a conditional option to buy
outright for cash and shares in 2023, and with a modest A$200,000 spend
commitment, we now have a drilling campaign planned there for July 2023. The
acquisition will complete subject to those results. We consider Hurricane to
be a late-stage exploration project with three tenements all highly
prospective for gold and antimony.
Overview of Exploration Licence Portfolio
At the end of the financial year under review, ECR held three granted mineral
exploration licences in Victoria (EL005433, EL006148 and EL006907). The
granting of Creswick license EL006907 to the south of EL006148 links Creswick
to the Ballarat East-Nerrina Goldfield. ECR holds granted exploration licence
EL5433 at Bailieston and post year end has been granted Bailieston licenses
EK006911 and EL 006912. At Tambo ECR owns granted exploration licence EL007484
covering Swifts Creek and the Tambo River.
ECR holds three exploration licences (EPM27901, EPM27902 and EPM27903) in the
Lolworth area, North Queensland, and subject to exercise of the option to
acquire Placer Gold Ltd (Hurricane Project), will own granted exploration
licenses EPM 27518, EPM 25855 and EPM 19437.
These are augmented by exploration licence application EL007296 at Bailieston,
exploration licence application EL006713 at Creswick and exploration license
EL007486 at Tambo.
In November 2020, ECR lodged exploration licence application EL007537 for an
area which surrounds mining licences MIN5396 and MIN4847. These mining
licences, which are not held by ECR, 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 the 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
In December 2021, ECR formalised its 25% shareholding in Cordillera Tiger Gold
Resources, owner of Exploration License EP-006 at the Danglay Gold Project, N
Philippines. The project is located in a prolific gold and copper mining
district in the north of the Philippines. April 2022 saw ECR acquire further
shares from an existing shareholder to take a majority 70% stake in the
project, bringing the nascent value at Danglay back to the fore on the ECR
balance sheet. With our focus very much on Australia, several options are
being explored to crystallize value here. We will report back to the markets
in due course.
Avoca and Timor Exploration Licence 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; and
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 2022
As a Group which is not generating revenue from operations, means that profit
and loss is a metric of less utility than in many other businesses. For the
year to 30 September 2022 the Group recorded a total comprehensive loss of
£2,272,658 compared with £1,113,870 for the year to 30 September 2021. This
increase is reflected principally in the impairment of Danglay Gold project.
The Group’s net assets at 30 September 2022 were £5,871,625 in comparison
with £7,657,684 at 30 September 2021.
We have taken measures to preserve cash going forward, including asset
disposals. ECR currently owns two properties in Victoria at Nagambie-Rushworth
Road, Bailieston and at Brewing Lane, Springmount in Creswick. A third
property close to Bendigo was disposed of during the year in question, raising
a further A$950,000 (£550,000) toward our project exploration campaigns.
Further disposals are under consideration, and post year end, the Company
raised a further £900,000 before expenses. The Group expect further disposal
in 2023, potential fundraising and exercising of outstanding warrants can
cover our scheduled exploration costs for the foreseeable future.
Finally I would like to put on record my thanks to ECR shareholders for their
continued support, and secondly for the welcome I have received from so many I
have met at events and shows throughout the year. I fully expect to deliver
some meaningful results from our key projects in the coming year, along with
some real shareholder value.
Andrew Haythorpe
CEO
31 March 2023
Independent Auditor’s Report
For the year ended 30 September 2022
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 2022 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 UK adopted
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 2022 and of
the group’s loss for the year then ended;
* the group financial statements have been properly prepared in accordance with
UK adopted 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 UK adopted 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.
Material uncertainty related to going concern
We draw attention to note 2 in the financial statements, which states that the
group’s and company’s ability to continue as a going concern is dependent
on the ability to secure additional funding and the Directors consider they
have various options to do so, including the issue of equity and asset
disposals. As stated in note 2, these events or conditions indicate that a
material uncertainty exists that may cast significant doubt on the group’s
and company’s ability to continue as a going concern. Our opinion is not
modified in respect of this matter.
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 a review of budgets and
cash flow forecasts covering a period of at least 12 months from the date of
approval of the financial statements, including challenge of management on the
basis of preparation, together with ascertaining the most recent cash position
of the group and company, and identifying subsequent events impacting the
going concern position.
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 £100,000 (2021: £55,000) based upon approximately 1.5% 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 £75,000 (2021:£50,000), based
upon 1.5% of gross assets and capped to be below group materiality.
Whilst materiality for the financial statements as a whole was set at
£100,000, each significant component of the group was audited to an overall
materiality ranging between £5,000 to £75,000 (2021: between £3,500 to
£50,000) with performance materiality set at 60% 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
£5,000 (2021: £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 2022 were located in the United
Kingdom, Australia and the Philippines. 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 2022 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 2022, which and that the group held good title.
are tested annually for impairment, is £4,957,218. 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.
The exploration permit for the Danglay project is due to expire in July 2023.
This was considered an indicator of impairment under IFRS 6. The Board have
determined to impair the carrying value down to nil as they are not seeking to
develop the project themselves and are, since the year end, seeking to dispose
of the project. Given the lack of an identified purchaser and the timeframe to
the expiry of the licence we consider this an appropriate treatment.
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 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 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.
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=53372128&newsitemid=20230402005022&lan=en-US&anchor=www.frc.org.uk%2Fauditorsresponsibilities&index=3&md5=a253fbb0a5837e288ca16355e982c00f)
. This description forms part of our auditor’s 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.
Daniel Hutson (Senior Statutory Auditor) 15 Westferry Circus
For and on behalf of PKF Littlejohn LLP Canary Wharf
Statutory Auditor London E14 4HD
31 March 2023
Consolidated Income Statement
For the year ended 30 September 2022
Year ended Year ended
30 September 2022 30 September 202120
Note £ £
Continuing operations
Other administrative expenses (1,214,398) (1,142,338)
Impairment of available for sale assets 12,887 -
Impairment of intangible assets 10 (1,576,822)
(Gain) or loss on other current assets (18,991) -
Currency exchange differences 27,174 (347,315)
Total administrative expenses (2,770,151) (1,489,653)
Operating loss 3 (2,770,151) (1,489,653)
Other financial assets – fair value movement 9 3,623 4,593
(2,766,528) (1,485,060)
Financial income 7 651 288
Other income 151,004 19,021
Finance income and costs 151,655 19,309
Loss for the year before taxation
(2,614,873) (1,465,751)
Income tax 5 - -
Loss for the year from continuing operations (2,614,873) (1,465,751)
Loss on disposal of subsidiary - -
Loss for the year from discontinued operations - -
Loss for the year - all attributable to owners of the parent (2,614,873) (1,465,751)
Earnings per share - basic and diluted
On continuing operations 4 (0.25)p (0.16)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 2022
Year ended Year ended
30 September 2022 30 September 2021
£ £
Loss for the year (2,614,873) (1,465,751)
Items that may be reclassified subsequently to profit or loss
Gain on exchange translation 342,215 52,545
Other comprehensive gain for the year 342,215 52,545
Total comprehensive loss for the year (2,272,658) (1,413,206)
Attributable to: -
Loss on continuing operations (2,272,658) (1,413,206)
The notes set out below are an integral part of these financial statements.
Consolidated & Company Statement of Financial Position
At 30 September 2022
Group Company
30 September 30 September 30 September 30 September
Note 2022 2021 2022 2021
£ £ £ £
Assets
Non-current assets
Property, plant and equipment 8 1,188,192 1,303,557 7,849 58,333
Investments in subsidiaries 9 - - 22,543 -
Intangible assets 10 3,760,919 3,321,481 147,985 1,410,144
Other receivables 11 - - 5,792,859 5,133,826
4,949,111 4,625,038 5,971,236 6,602,303
Current assets
Trade and other receivables 11 148,043 146,147 1,037,568 878,097
Inventory 70,641 75,722 - -
Financial assets at fair value through profit or loss 9 45,084 31,461 45,084 31,461
Cash and cash equivalents 12 842,889 2,982,046 233,106 1,467,835
1,106,657 3,235,376 1,315,758 2,377,393
Total assets 6,055,768 7,860,414 7,286,944 8,979,696
Current liabilities
Trade and other payables 14 206,684 202,731 135,925 41,198
206,684 202,731 135,925 41,198
Total liabilities 206,684 202,731 135,954 41,198
Net assets 5,849,084 7,657,683 7,151,069 8,938,498
Equity attributable to owners of the parent
Share capital 13 11,290,980 11,290,483 11,290,980 11,290,483
Share premium 13 53,057,125 52,593,562 53,057,125 52,593,562
Exchange reserve 926,213 583,998 - -
Other reserves 440,706 440,706 440,706 440,706
Retained losses (59,865,940) (57,251,067) (57,637,742) (55,386,525)
Total equity 5,849,084 7,657,683 7,151,069 8,938,498
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 £2,263,395 (2021: £800,558
loss).
The notes on pages 27 to 44 are an integral part of these financial
statements. The financial statements were approved and authorised for issue by
the Directors on 31 March 2023 and were signed on its behalf by:
Weili (David) Tang
Non–Executive Chairman
Trevor Davenport
Independent Non-Executive Director
Consolidated Statement of Changes in Equity
For the year ended 30 September 2022
Share Share Exchange Other Retained
capital
premium
reserve
reserves
reserves
(Note 13) (Note 13) Total
£ £ £ £ £ £
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
Loss for the year – – – – (2,614,873) (2,614,873)
Gain on exchange translation – – 342,215 – – 342,215
Total comprehensive loss – – 342,215 – (2,614,873) (2,272,658)
Shares issued 497 463,563 – – – 464,060
Share issue costs – – – – – –
Total transactions with owners, recognised directly in equity 497 463,563 – – – 464,060
Balance at 30 September 2022 11,290,980 53,057,125 926,213 440,706 (59,866,940) 5,848,084
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 2022
Share Share Other Retained
capital
premium
reserves
reserves
(Note 13) (Note 13) Total
£ £ £ £ £
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
Loss for the year – – – (2,251,490) (2,251,490)
Total comprehensive expense – – – (2,251,490) (2,251,490)
Shares issued 497 463,563 – – 464,060
Share issue costs – – – – –
Total transactions with owners, recognised directly in equity 497 463,563 – – 464,060
Balance at 30 September 2022 11,290,980 53,057,125 440,706 (57,637,742) 7,151,069
The notes set out below are an integral part of these financial statements.
Consolidated & Company Cash Flow Statement
For the year ended 30 September 2022
Group Company
Year ended Year ended Year ended Year ended
30 September
30 September
30 September
30 September
Note 2022 2021 2022 2021
£ £ £ £
Net cash used in operations 20 (918,135) (1,398,242) (733,226) (1,006,026)
Investing activities
Purchase of property, plant & equipment 8 (90,321) (1,171,840) (2,541) (59,038)
Increase in exploration assets 10 (1,674,046) (1,452,297) (314,663) (76,862)
Investment in subsidiary - – (22,543) –
Investment in available for sale assets (10,000) – (10,000) –
Proceeds from sale of property, plant and equipment 88,634 – 42,952 –
Loan to subsidiary – – (659,033) (4,104,759)
Interest income 7 651 288 265 260
Net cash generated from / (used in) investing activities (1,685,082) (2,623,849) (965,563) (4,240,398)
Financing activities
Proceeds from issue of share capital (net of issue costs) 464,060 5,507,088 464,060 5,507,069
Net cash from financing activities 464,060 5,507,088 464,060 5,507,069
Net change in cash and cash equivalents (2,139,157) 1,484,815 (1,234,729) 260,645
Cash and cash equivalents at beginning of the year 2,982,046 1,497,231 1,467,835 1,207,190
Effect of change in foreign exchange rates - - - -
Cash and cash equivalents at end of the year 12 842,889 2,982,046 233,106 1,497,835
Non-cash transactions:
The notes set out below are an integral part of these financial statements.
Notes to the Financial Statements
For the year ended 30 September 2022
1 General information
The Company and the Group operated mineral exploration and development
projects. The Group’s principal interests are in Australia 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 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 of the Group for the 12 months ended 30
September 2022 have been prepared in accordance with UK adopted 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 2021
There were no new standards, amendments or interpretations effective for the
first time for periods beginning on or after 1 October 2021 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 IAS 1: Classifications of liabilities and Disclosure of
Accounting Policies (effective 1 January 2023);
* Amendments to IAS 8: Accounting Policies, Changes to Accounting Estimates and
Errors (effective 1 January 2023);
* Amendments to IAS 12: Income Taxes – Deferred Tax arising from a Single
Transaction (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
Where the Group has control over an investee, it is classified as a
subsidiary. The Group controls an investee if all three of the following
elements are present: power over the investee, exposure to variable returns
from the investee and the ability of the investor to use its power to affect
those variable returns. Control is reassessed whenever facts and circumstances
indicate that there may be a change in any of these elements of control.
De-facto control exists in situations where the Group has the practical
ability to direct the relevant activities of the investee without holding the
majority of the voting rights. 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.
The consolidated financial statements present the results of the Group as if
they formed a single entity. Intercompany transactions and balances between
group companies are eliminated in full.
The consolidated financial statements incorporate the financial statements of
the Company and one of its subsidiaries made up to 30 September 2022.
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.
Going concern
It is the prime responsibility of the Board to ensure the Group and Company
remains a going concern. At 17 February 2023, the Group has cash and cash
equivalents of £612,582 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 anticipate having to raise additional funding
over the course of the financial year to ensure sufficient available funds in
order to meet its contracted and committed expenditure. Further details are
included in Note 21 to the financial statements.
Having considered the prepared cashflow forecasts and the Group budgets, which
includes the possibility of Directors cutting expenses in certain area of
operations if required, the progress in activities post year-end, including
the anticipated sale of properties held in Australia and sale of the
Philippines, the Directors consider that they will have access to adequate
resources in the 12 months from the date of the signing of these Financial
Statements. As a result, they consider it appropriate to continue to adopt the
going concern basis in the preparation of the Financial Statements.
Should the Group be unable raise additional funding in the timescales
necessary to continue trading as a going concern, adjustments would have to be
made to reduce the value of the assets to their recoverable amounts, to
provide for further liabilities, which might arise, and to classify
non-current assets as current.
The Financial Statements have been prepared on the going concern basis and do
not include the adjustments that would result if the Group was unable to
continue as a going concern.
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 vehicles 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.
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, 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 UK adopted
international accounting standards 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 indications of impairment
annually. Where the carrying amount of an asset exceeds its recoverable amount
an impairment is recognised. 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 2022
30 September 2021
The operating loss is stated after charging: £ £
Depreciation of property, plant and equipment 104,165 51,822
Operating lease expenses 44,843 31,337
Auditors’ remuneration – fees payable to the Company’s auditor for the
audit of
the parent company and consolidated financial statements 32,000 26,000
4 Earnings per share
Basic and Diluted Year ended Year ended
30 September 2022
30 September 2021
Weighted number of shares in issue during the year 1,039,370,796 892,410,767
£ £
Loss from continuing operations attributable to owners of the parent (2,614,873) (1,413,206)
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 13.
5 Income tax
The relationship between the expected tax expense based on the corporation tax
rate of 19% for the year ended 30 September 2022 (2021: 19%) and the tax
expense actually recognised in the income statement can be reconciled as
follows:
Year ended Year ended
30 September
30 September
2022 2021
£ £
Group loss for the year (2,614,873) (1,413,206)
Loss on activities at effective rate of corporation tax of 19% (2021: 19%) (496,826) (268,509)
Expenses not deductible for tax purposes 11,540 63,927
Loss on disposal of subsidiary not deductible for tax purposes - -
Income not taxable 4,363 19,309
Depreciation in excess of capital allowances 104,165 51,822
Loss carried forward on which no deferred tax asset is recognised 376,758 133,451
Current tax expense – –
Deferred tax (see below) – –
Total income tax expense – –
The Company has unused tax losses of approximately £8,100,000 (2020
£6,950,000) to carry forward and set against future profits; and the Company
has capital losses of £197,000 to carry forward and set against future
capital gains of the Company. The related deferred tax asset has not been
recognised in respect of these losses as there is no certainty in regard to
the level and timing of future profits.
6 Staff numbers and costs
Group and Company Year ended Year ended
30 September 30 September
2022 2021
Number Number
Directors 4 3
Administration 3 3
Total 7 6
The aggregate payroll costs of these persons were as follows:
£ £
Staff wages and salaries 140,167 61,604
Directors’ cash based emoluments 198,739 277,353
Social security costs 24,544 22,817
Pension contributions 1,456 1,400
364,906 363,174
The remuneration of the directors, who are the key management personnel of the
Group, in aggregate for each of the categories specified in IAS 24 ‘Related
Party Disclosures’ was as follows:
£ £
Directors’ cash based emoluments 198,739 267,353
Employer’s national insurance contributions - 22,817
Pension contributions 1,456 1,316
200,195 291,486
Directors’ remuneration
As required by AIM Rule 19, details of remuneration earned in respect of the
financial year ended 30 September 2022 by each Director are set out below:
Salary Consulting fees Total
Paid Accrued Paid Accrued
Director £ £ £ £ £
C Brown 17,727 - - - 17,727
W Tang 48,000 - 28,300 400 76,700
A Jones 30,000 - 80,808 - 110,808
T Davenport 36,000 - 6,400 - 42,400
A Scott 27,000 - 7,000 - 34,000
158,727 - 122,508 400 281,635
6 Staff numbers and costs continued
Year ended 30 September 2021 Paid Salary Consulting Pension Total
Accrued
fees
Director £ £ £ £ £
C Brown 165,000 – – 1,316 166,316
W Tang 54,000 4,000 26,584 – 84,584
A Jones 22,500 2,500 – – 25,000
241,500 6,500 26,584 1,316 275,900
The highest paid Director received remuneration of £110,808 (2021:
£165,000), excluding share–based payments.
7 Finance income
Year ended Year ended
30 September 30 September
2022 2021
Finance income £ £
Interest on cash and cash equivalents 651 288
651 288
8 Property, plant and equipment
Group Furniture & Office Machinery & Land and Total
fittings
Equipment
equipment
Building
Cost £ £ £ £ £
At 1 October 2021 2,982 37,240 513,136 822,705 1,376,063
Additions 699 3,999 85,623 90,321
Disposal - - (37,427) (56,485) (93,912)
At 30 September 2022 3,681 41,239 561,332 766,220 1,372,472
Depreciation -
At 1 October 2021 2,982 17,415 52,110 72,507
Depreciation for the year 176 7,656 103,941 - 111,773
At 30 September 2022 3,158 25,071 156,051 - 184,280
Net book value
At 1 October 2021 - 19,825 461,027 822,705 1,303,557
At 30 September 2022 523 16,168 405,281 766,220 1,188,192
Company Furniture & Office Machinery & Land and Total
fittings
Equipment
Building
equipment
Cost £ £ £ £ £
At 1 October 2021 890 27,936 51,860 - 80,686
Additions 699 1,842 - - 2,541
Disposal - - (45,036) - (45,036)
At 30 September 2022 1,589 29,778 6,824 - 38,191
Depreciation
At 1 October 2021 890 17,040 4,424 - 22,354
Depreciation for the year 176 5,413 2,400 - 7,989
At 30 September 2022 1,066 22,453 6,824 - 7,848
Net book value
At 1 October 2021 - 20,200 47,436 - 67,636
At 30 September 2022 523 7,325 - - 17,512
The Group and the Company’s property, plant and equipment are free from any
mortgage or charge. The comparable table for 2021 is detailed below.
Group Furniture & Office Machinery & Land and Total
fittings
Equipment
equipment
Building
Cost £ £ £ £ £
At 1 October 2020 2,982 18,880 184,209 - 206,071
Additions - 18,360 328,927 822,705 1,169,992
At 30 September 2021 2,982 37,240 513,136 822,705 1,376,063
Depreciation -
At 1 October 2020 2,880 14,157 5,495 22,532
Depreciation for the year 102 3,258 46,615 - 51,822
At 30 September 2021 2,982 17,415 52,110 - 74,354
Net book value
At 1 October 2020 102 4,723 180,517 - 185,341
At 30 September 2021 - 19,825 461,027 822,705 1,303,557
Company Furniture & Office Machinery & Land and Total
fittings
Equipment
Building
equipment
Cost £ £ £ £ £
At 1 October 2020 890 18,880 3,865 - 23,635
Additions - 18,360 47,995 - 66,355
At 30 September 2021 890 37,240 51,860 - 89,990
Depreciation
At 1 October 2020 890 14,157 3,865 - 18,912
Depreciation for the year - 2,883 559 - 3,442
At 30 September 2021 890 17,040 4,424 - 22,354
Net book value
At 1 October 2020 161 - 387 - 548
At 30 September 2021 - 20,200 47,436 - 67,636
8 Investments
Investment in subsidiaries
£
Cost as at 1 October 2021 272
Disposal (272)
Balance at 30 September 2022 -
The comparable table for 2021 is detailed below:
Investment in subsidiaries
£
Cost as at 1 October 2020 -
Addition 272
Balance at 30 September 2021 272
Investment in subsidiaries
At 30 September 2022, the Company had interests in the following subsidiary
undertakings:
Subsidiaries: Principal Principal Description Proportion of
country of
activity
and effective
shares held
incorporation
country of
operation
Mercator Gold Australia Pty Ltd Australia Mineral Exploration Australia 100%
Warm Springs Renewable Energy Corporation USA Dormant USA 90%
Copper Flat Corporation USA Dormant USA 100%
Lux Exploration Pty Ltd Australia Mineral Exploration Australia 100%
Corderilla Tiger International Resources Inc. Philippines Mineral Exploration Philippines 70%
Registered office address of the subsidiaries:
Mercator Gold Australia Pty Ltd 58 Gipps Street, Collingwood Victoria, 3066, Australia
Warm Springs Renewable Energy Corporation 315 Paseo de Peralta, Santa Fe, NM 87501, USA
Copper Flat Corporation (formerly New Mexico Copper Corporation) 315 Paseo de Peralta, Santa Fe, NM 87501, USA
Lux Exploration Pty Ltd 58 Gipps Street, Collingwood Victoria, 3066, Australia
Cordillera Tiger International Resources Inc. RM 2 4/F D Restaurant Bldg. Dangwa Terminal Baguio
Financial assets at fair value through profit or loss
2022 2021
£ £
Quoted investments
At 1 October 31,461 26,870
Additions 10,000 -
Fair value movements 3,623 4,591
At 30 September 45,084 31,461
10 Intangible assets – exploration and development costs Group Company
2022 2021 2022 2021
£ £ £ £
At 1 October 3,321,481 1,869,184 1,410,144 1,333,282
Additions 1,993,719 1,452,297 292,123 76,862
Impairment (1,554,281) - (1,554,281) -
At 30 September 3,760,919 3,321,481 147,985 1,410,144
The financial asset at 30 September 2022 and 2021 comprises shares in Tiger
International Resources, Inc., and is held at fair value through profit or
loss in accordance with IFRS 9 Financial Instruments
An operating segment level summary of exploration and development costs of the
Group is presented below:
2022 2021
£ £
Danglay Gold Project, Philippines - 1,261,158
Central Victorian Gold Projects, Australia 3,760,919 2,060,323
At 30 September 3,760,919 3,321,481
Danglay Gold Project, Philippines
In April 2013 ECR entered into an earn-in and joint venture agreement (the
“Agreement”) in relation to the Danglay gold project in the Philippines.
Cordillera Tiger Gold Resources, Inc. (“Cordillera Tiger”) is a Philippine
corporation and the holder of the exploration permit (the “EP”) which
represents the Danglay project.
Activities under the Agreement commenced in December 2013 and ceased when the
Earn-In Option (as that term is defined in the Agreement) was terminated in
August 2016. The Philippine mining industry is enduring a period of
significant political and regulatory upheaval, which has been particularly
intense and unpredictable since June 2016. In light of this, termination of
the Earn-In Option was considered a prudent step for the Company to take.
The Agreement gave ECR the exclusive right and option to earn a 25% or 50%
interest in Cordillera Tiger and thereby in the Danglay project. Under the
terms of the Agreement, ECR was the operator of the Danglay project, through
Cordillera Tiger. The completion of various exploration programmes generated
valuable data which is relevant to the assessment of the project’s economic
potential.
In December 2015, the Company published an NI43-101 technical report (the
“Report”) in relation to the Danglay project. The Report also disclosed a
target for further exploration, as permitted by NI43-101. The Report supports
the disclosure on 5 November 2015 of an inferred mineral resource estimate for
oxide gold mineralisation at Danglay.
Under the Agreement, the estimation of this mineral resource and the making of
expenditures exceeding US$500,000 in connection with the Danglay project,
entitled ECR to a 25% interest in Cordillera Tiger.
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 for a further two years. In
October 2021, 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.
In April 2022, the Cordillera Chairman and Vice President agreed to sell to
ECR Minerals his shareholding of 1,499,996. The consideration for the
additional 1,499,996 shares in Cordillera was 1,499,996 Philippine pesos
(approx. £22,000), which has been paid for in cash. Following this
acquisition, ECR holds 2,333,329 Ordinary Shares in Cordillera representing
70% of its issued share capital. At that stage the current management of
Cordillera was kept in place.
The carrying value of Danglay as at 30 September 2022 was £1,554,281 which is
based on historical spend by ECR Minerals plc. As the Group’s focus is on
gold and battery metals exploration in Australia and as such, upon the
conclusion of a review of operations post period, the Board decided to explore
several options in relation to the Danglay project, including potential sale
of the asset. Despite numerous interests, ECR is yet to receive a material
offer that would bring value to shareholders. Post period, the Group has
significantly reduced spending on the asset and subsequently produced a sales
presentation to distribute to potential buyers. The Board acknowledge the
several challenges in valuing the potential of the Danglay asset such as
quantifying the value of Exploration License EP-006, Cordillera holds no value
and the net assets are nil, and Cordillera Tiger Gold Resources Inc recorded
no revenues or profits. Under advisement and discussions, the Board believes
it would not be prudent to carry the book value of the asset forward based on
the expenditure to date and current market conditions and has therefore
impaired the project in full. Nevertheless, ECR continues to explore other
potential sales opportunities for the Danglay Gold project.
11 Trade and other receivables Group Company
2022 2021 2022 2021
£
£
£
£
Non-current assets
Amount owed by a subsidiary - - 5,792,859 5,133,826
Current assets
Amount owed by a subsidiary - - 938,073 818,566
Other receivables 99,365 100,406 50,933 33,919
Prepayments and accrued income 48,678 45,741 48,563 25,612
148,043 146,147 1,037,568 878,097
The short–term carrying values are considered to be a reasonable
approximation of the fair value.
12 Cash and cash equivalents Group Company
2022 2021 2022 2021
£
£
£ £
Cash and cash equivalents consisted of the following:
Deposits at banks 842,889 2,982,046 233,106 1,467,835
Cash on hand
842,889 2,982,046 233,106 1,467,835
13 Share capital and share premium accounts
The share capital of the Company consists of three classes of shares: ordinary
shares of 0.001p each which have equal rights to receive dividends or capital
repayments and each of which represents one vote at shareholder meetings; and
two classes of deferred shares, one of 9.9p each and the other of 0.099p each,
which have limited rights as laid out in the Company’s articles.
In particular deferred shares carry no right to dividends or to attend or vote
at shareholder meetings and deferred share capital is only repayable after the
nominal value of the ordinary share capital has been repaid.
a) Changes in issued share capital and share premium
Deferred Deferred ‘B’ Deferred
Number of Ordinary 9.9p 0.099p 0.199p Total Share
shares
shares
shares
shares
premium
shares shares Total
£ £ £ £ £ £ £
At 1 October 2021 1,016,558,551 10,165 7,194,816 3,828,359 257,161 11,290,453 52,593,562 58,376,975
Issue of shares
less costs 47,906,000 497 - - - 497 463,563 464,042
Balance at 30 September 2022 1,064,464,551 10,644 7,194,816 3,828,359 257,161 11,290,980 53,057,125 63,884,063
All the shares issued are fully paid up and none of the Company’s shares are
held by any of its subsidiaries.
b) Potential issue of ordinary shares
Share options
The number and weighted average exercise prices of share options valid at the
year–end are as follows:
Weighted Number of Weighted Number of
average
average
exercise price options
exercise price options
2022 2022 2021 2021
£ £
Exercisable at the beginning of the year 0.0113 17,035,127 0.051 8,209,968
Granted during the year 0.027 45,000,000 0.0113 25,000,000
Exercised during the year - - 0.0117 (16,118,841)
Expired during the year 0.0175 (1,758,143) 5 (56,000)
Exercisable at the end of the year 0.023 60,276,984 0.0113 17,035,127
The options outstanding at 30 September 2022 have a weighted average remaining
contractual life of four year and three months (2021: two year and seven
months).
The options outstanding at the end of the year have the following expiry date
and exercise prices:
Date granted Expiry Date Exercise Price in No. of Options
27 February 2017 28 October 2024 £0.01725 4,076,984
30 July 2018 29 July 2023 £0.01125 1,200,000
30 July 2018 28 October 2024 £0.01125 10,000,000
23 January 2022 22 January 2027 £0.022 35,000.000
23 January 2022 22 January 2027 £0.044 10,000,000
Share-based payments
There were no options issued during the year.
Share warrants Weighted Number of Weighted Number of
average
warrants
average
warrants
2022
exercise price
exercise price
2021
2022
2021
£ £
Exercisable at the beginning of the year 0.02878 159,940,371 0.01625 425,384,824
Exercised during the year 0.01 (47,906,000) 0.0138 (310,603,127)
Expired during the year 0.0205 (62,034,372) 0.0125 (4,841,325)
Granted during the year - - 0.0375 49,999,999
Exercisable at the end of the year 0.0375 49,999,999 0.02878 159,940,371
The warrants outstanding at the end of the year have the following expiry date
and exercise prices:
Date granted Expiry Date Exercise Price No. of Warrants
£
30 April 2021 29 April 2023 0.0375 49,999,999
14 Trade and other payables Group Company
2022 2021 2022 2021
£ £ £ £
Trade payables 149,938 156,301 109,098 9,605
Social security and employee taxes 16,489 34,034 2,226 19,197
Other creditors and accruals 40,257 12,397 24,601 12,397
206,684 202,731 135,924 41,198
15 Capital management
The Group’s objective when managing capital is to safeguard the entity’s
ability to continue as a going concern and develop its mineral exploration and
development and other activities to provide returns for shareholders and
benefits for other stakeholders.
The Group’s capital structure comprises all the components of equity (all
share capital, share premium, retained earnings when earned and other
reserves). When considering the future capital requirements of the Group and
the potential to fund specific project development via debt, the Directors
consider the risk characteristics of the underlying assets in assessing the
optimal capital structure.
16 Related party transactions
Group Company
2022 2021 2022 2021
£ £ £ £
Amounts owed to Directors 400 10,606 479 10,606
Details of Directors’ emoluments are disclosed in Note 6. The amounts owed
to Directors relate to accrued emoluments, consulting fees and expenses due.
During the year the Company provided additional advances of £659,033 under a
loan to Mercator Gold Australia Pty Ltd and charged expenses and management
fees of £139,507. The balance owed to the Company is shown in Note 11.
During the year the Company provided additional advance of £314,664 through
project cost to Cordillera Tiger International Resources Inc. The balance owed
to the Company is shown in Note 10.
The Company and the Group have no ultimate controlling party.
17 Commitments and contingencies
Capital expenditure commitment
As at 30 September 2022, the Group has a commitment expenditure of AUD$650,000
for the first three years across the three licence areas in Lolworth Range.
The Group is committed to issuing a further AUD 150,000 worth of Ordinary
Shares in ECR contingent on commercial production being established from the
Bailieston projects.
Contingencies
The Group entered into no agreements during the year ended 30 September 2022
which would result in disclosure of contingent assets or liabilities.
18 Financial instruments
Categories of financial instrument
Group 2022 2021
£ £
Financial assets (amortised cost)
Trade and other receivables (excluding prepayments) 99,072 100,406
Cash and cash equivalents 842,889 2,982,046
941,961 3,082,452
Financial assets (fair value through profit or loss)
Equity investments 45,084 31,463
45,084 31,463
Financial liabilities (amortised cost)
Trade and other payables 206,684 232,185
206,684 232,185
2022 2021
Company £ £
Financial assets (amortised cost)
Trade and other receivables (excluding prepayments) 989,006 852,485
Cash and cash equivalents 233,106 1,467,835
Long-term borrowings, intra-group 5,792,859 5,133,826
7,014,971 7,454,146
Financial assets (fair value through profit or loss)
Equity investments 45,084 31,463
45,084 31,463
Financial liabilities (amortised cost)
Trade and other payables 135,925 41,198
135,925 41,198
Risk management objectives and policies
The Group’s principal financial assets comprise cash and cash equivalents,
trade and other receivables, investments and prepayments. The Group’s
liabilities comprise trade payables, other payables including taxes and social
security, and accrued expenses.
The Board determines as required the degree to which it is appropriate to use
financial instruments, commodity contracts or other hedging contracts to
mitigate financial risks.
Credit risk
The Group’s cash and cash equivalents are held with major financial
institutions. The Group monitors credit risk by reviewing the credit quality
of the financial institutions that hold the cash and cash equivalents and
restricted cash. The fair value of cash and cash equivalents at 30 September
2022 and 30 September 2021 did not differ materially from their carrying
value.
Management believes that the Group’s exposure to credit risk is manageable.
The Company manages its current VAT receivables by submitting VAT returns on a
quarterly basis. This allows the Company to receive the VAT in a timely matter
while any amounts that may come under scrutiny. Management has no formal
credit policy in place for customers and the exposure to credit risk is
approved and monitored on an ongoing basis individually for all significant
customers. The maximum exposure to credit risk is represented by the carrying
amount of each financial asset in the statement of financial position. The
Group does not require collateral in respect of financial assets.
Market risk
The Group’s financial instruments potentially affected by market risk
include bank deposits, and trade payables. An analysis is required by IFRS 7,
intended to illustrate the sensitivity of the Group’s financial instruments
(as at period end) to changes in market variables, being exchange rates and
interest rates. The Group’s exposure to market risk is not considered to be
material.
Interest rate risk
The Group has no material exposure to interest rate risk. Since the interest
accruing on bank deposits was relatively immaterial there is no material
sensitivity to changes in interest rates.
Foreign currency risk
The Group is exposed to foreign currency risk in so far as some dealings with
overseas subsidiary undertakings are in foreign currencies. Bank accounts are
held in Great British Pounds (“GBP), Australian Dollars (“AUD”) and
United States of American Dollars (“USD”). The Company has payables that
originate in GBP, AUD, USD and Philippines Peso (“PHP”). As such the
Company is affected by changes in the GBP exchange rate compared to the
following currencies; AUD, USD, and PHP.
As at 30 September 2022 GBP AUD PHP
Cash and cash equivalents 233,106 1,033,117 44,789
Accounts receivable 1,037,568 77,251 -
Accounts payable (135,923) (114,461) (220,200)
Net foreign exchange exposure 1,134,751 995,907 175,411
Translation to GBP - 0.5783 0.0153
GBP equivalent 1,134,751 1,722,150 2,684
As at 31 December 2021 GBP AUD PHP
Cash and cash equivalents 1,467,835 2,126,534 -
Accounts receivable 878,097 102,765 -
Accounts payable (41,198) (161,533) -
Net foreign exchange exposure 2,304,734 2,067,767 -
Translation to GBP - 0.5367 -
GBP equivalent 2,304,734 1,109,818 -
Fair value of financial instruments
The fair values of the Company’s financial instruments at 30 September 2022
and 30 September 2021 did not differ materially from their carrying values.
The Group measures fair values using the following fair value hierarchy that
reflects the significance of the inputs used in making the measurements:
* Level 1: quoted prices (unadjusted) in active markets for identical assets or
liabilities;
* Level 2: valuation techniques based on observable inputs either directly (i.e.
as prices) or indirectly (i.e. derived from prices);
* Level 3: valuation techniques that include inputs for the asset or liability
that are not based on observable market data (unobservable inputs).
The following table provides an analysis of financial instruments that are
measured subsequent to initial recognition at fair value, by the level in the
fair value hierarchy into which the measurement is categorised.
Group and Company
30 September 2022 Level 1 Level 2 Level 3 Total
£ £ £ £
Financial assets at fair value through profit or loss 45,084 – – 45,084
45,084 – – 45,084
Group and Company
Level 1 Level 2 Level 3 Total
30 September 2021 £ £ £ £
Financial assets at fair value through profit or loss 31,463 – – 31,463
31,463 – – 31,463
Liquidity risk
The Group finances its operations primarily through the issue of equity share
capital and debt in order to ensure sufficient cash resources are maintained
to meet short–term liabilities and future project development requirements.
Management monitors availability of funds in relation to forecast expenditures
in order to ensure timely fundraising. Funds are raised in discrete tranches
to finance activities for limited periods.
Funds surplus to immediate requirements may be placed in liquid, low risk
investments.
The Group’s ability to raise finance is subject to market perceptions of the
success of its projects undertaken during the year and subsequently. Due to
the uncertain state of financial markets there can be no certainty that future
funding will continue to be available.
The table below sets out the maturity profile of financial liabilities as at
30 September 2022.
2022 2021
£
£
Due in less than 1 month 206,684 232,185
Due between 1 and 3 months – –
Due between 3 months and 1 year – –
Due after 1 year – –
206,684 232,185
19 Segmental report
The Group is engaged in mineral exploration and development and is considered
to have one business segment. The Chief Operating Decision Maker is considered
to be the Board of Directors, who segment exploration activities by
geographical region in order to evaluate performance individually. The
segmental breakdown of exploration assets is shown in Note 10. As disclosed in
the Note 10, the exploration activities in the Philippines have been impaired
in full and all remaining mineral exploration assets are in Australia.
Management information in respect of profit or loss expenditures is not
segmented but is considered at Group level.
20 Cash used in operations
Group Company
Year ended Year ended Year ended Year ended
30 September
30 September
30 September 30 September
2022 2021 2022 2021
Note £ £ £ £
Operating activities
Loss for the year before tax (2,614,873) (1,413,206) (2,251,490) (800,558)
Adjustments:
Loss on disposal of subsidiary - -
Depreciation expense property, plant and equipment 8 104,165 51,822 7,989 3,442
(Gain)/Loss on financial assets at fair value (3,623) (4,593) (3,623) (4,593)
Impairment of intangible assets 1,576,822 - 1,576,822 -
Interest income (651) (288) (265) (260)
Profit and loss on disposal 12,887 2,086
Decrease/(Increase) in accounts receivable (1,896) (37,531) (159,471) (151,408)
Decrease/(Increase) in inventory 5,081 (75,722)
Foreign exchange on operating activities - (15) - -
Increase/(Decrease) in accounts payable 3,954 81,109 94,726 (52,650)
Net cash used in operations (918,135) (1,398,424) (733,226) (1,006,026)
21 Events after the reporting date
* On 4 October 2022, the Company announced an update on the stream sediment
sampling campaign currently in progress on its tenements at Lolworth Range,
North Queensland, Australia. ECR Minerals announced that the project is close
to 75% complete, that more than 91 samples have been despatched and awaiting
results from the laboratory whilst follow-up sampling work will continue.
* On 11 October 2022 the Company provided an update on the second drilling rig
stating the rig purchase has now been completed, following the agreement of a
meaningful discount, on what the board consider to be competitive and
attractive terms. Arrangements are currently being made for the rig to be
loaded onto a ship for delivery to Melbourne Port.
* On 14 October 2022 the Company announced the final gold results from the 2022
drill program at the HR3 prospect at Bailieston. ECR Minerals plc has 100%
ownership of the Bailieston Project (EL5433), which contains the gold
prospects known as HR3, Cherry Tree, Blue Moon and Black Cat. The projects are
operated by ECR’s Australian wholly owned subsidiary Mercator Gold Australia
Pty Ltd (“MGA”). The Company announced the best results in BH3DD043 with a
composited grade of 9.01 g/t Au over a drilled width of 4 metres. Along with
further results from the Maori Anticline include 1m @ 4.96 g/t Au (BH3DD042)
at a depth of 273m. With multiple intersections along strike of the Scoulers
Reef including 0.2m @ 9.22 g/t Au (BH3DD042), 0.5m @ 4.55 g/t Au (BH3DD037)
and 1m @ 3.34 g/t Au (BH3DD038).
* On 19 October 2022 the Company announced results from a re-assay of selected
diamond drill core from the Creswick diamond drilling program completed in
2021. The Company stated that Duplicate sampling of selected
quartz-mineralised intercepts from the diamond drilling campaign of 2021 shows
significant increase in reportable gold grades including of 0.7m @ 47.75 g/t
Au from 147m in hole CSD001, 1.1m @ 6.13 g/t Au from 98m in hole CJD002 and 1m
@ 3.9 g/t Au from 86.5m, also in hole CJD002. Ongoing surface exploration in
the immediate area is testing for follow-up drill targets.
* On 27 October 2022 the Company was pleased to announce entering into a Binding
Term Sheet pursuant to which it has been granted a conditional option to
acquire the entire issued share capital of Placer Gold Pty Limited (“Placer
Gold”) (the “Option”). To secure the option ECR has to pay a A$200,000
(approximately £144k) option fee (“Option Fee”), which is to be satisfied
by a contribution to costs, the implementation of a work programme over the
assets (details below) and a balancing cash payment to the shareholders of
Placer Gold ("Vendors”). Once the Option Fee has been fully satisfied ECR
can then exercise the Option at any time prior to 30 September 2023, at its
absolute discretion. If the Option Fee is fully satisfied and the Option is
exercised, the total consideration for the acquisition of Placer Gold is
A$6.9m (approximately £3.8m, including the Option Fee, a further cash payment
of A$200,000 payable in the event of certain milestones being reached, and a
2% net smelter royalty payable in the event the Hurricane Project is taken
into production in the future, capped at £3m).
* On 17 November 2022 the Company pleased announce gold results from the first
drillhole for 2022 (BBMDD004) completed at Blue Moon with results from the
first diamond drillhole for 2022 are encouraging with 0.5m @ 7.29 g/t Au from
96.9m. Drilling continues with three out of a planned four-hole program
completed to date with samples awaiting results pending.
* On 23 November 2022 the Company announced it will issue A$120,000 to GoldOz PL
in satisfaction of all fees owing to them as adviser in connection with the
recent option agreement and potential acquisition of Placer Gold Pty Limited
as announced on 27 October 2022. This fee is to be satisfied by a payment of
A$60,000 in cash and A$60,000 in shares through the issue of 3,272,608 shares
at a price of 1.03p calculated by reference to the 30 day VWAP.
* On 12 December 2022 the Company announced a raise of £900,000 by way of a
placing and direct subscription at a price of 0.9p per share. Both the Placing
Shares and the Subscription Shares were also accompanied by the issue of one
warrant to subscribe for one ordinary share in the Company for each new share
issued (the “New Warrants”). When issued, the New Warrants will be
exercisable at any time, for a period of 2 years from the date of admission of
the Placing Shares and the Subscription Shares (as applicable) at an exercise
price of 1.5p each.
* On 12 December 2022 the Company announced the first round of results from the
recent stream sediment sampling campaign undertaken at the Lolworth Range
project, North Queensland, Australia. The results are as followed 21 out of
125 stream sediment samples to date are anomalous with gold, with results up
to 152.5 ppm Au. 18 of the 125 samples show visible gold and further samples
are awaiting results including 212 stream sediment samples and 33 rock chips
and Multiple pegmatites observed throughout the tenements.
* On 13 December 2022 the Company are pleased to announce two new exploration
tenements have been granted to ECR’s wholly owned subsidiary Mercator Gold
Australia Pty Ltd (“MGA”) at Bailieston, Victoria, Australia. The two new
exploration tenements (EK006911 and EL 006912) adjacent to EL5433 have been
formally granted to ECR’s wholly owned subsidiary MGA. Total exploration
land package at Bailieston (EL5433, EL006911, EL006912) now totals 179 square
kilometres.
* On 22 December 2022 the Company plc announced updated soil sampling results
from the on-going geochemistry exploration on EL006184 at Creswick, Victoria,
Australia. These results highlight a potential new parallel gold system within
the Dimocks Main Shale (DMS).
* On 23 December 2022 the Company announced encouraging Lithium, Tantalum and
Niobium anomalies identified within the first round of results from the recent
stream sediment sampling campaign undertaken at the Lolworth Range project,
North Queensland, Australia.
* On 3 January 2023 the Company announce it has received approval for two new
exploration tenements in Victoria, Australia. The New tenement EL007296 now
completes the total exploration package at Bailieston, Victoria. New Creswick
tenement EL006713 effectively connects EL006184 and EL006907, creating a
continuous land package from ECR’s Springmount property south through to the
outskirts of Ballarat.
* On 23 January 2023 the Company announce updated results from soil sampling and
other on-going exploration activities within licence EL006184 at Creswick,
Victoria, Australia.
* On 1 February 2023 the Company announced high gold grades from recent in-situ
rock chips sited within license EL006184 and newly acquired license EL006713
at the Creswick Project, Victoria, Australia. With results of 0.7m @ 189.42
g/t Au and 0.4m @ 86.51 g/t Au from (EL006184); 0.25m @ 441.23 g/t Au, 0.15m @
140.83 g/t Au and 0.25m @ 24.92 g/t Au from (EL006713).
* On 15 February 2023 the Company is pleased to announce that it has executed a
sale and purchase agreement for the sale of the Company’s ‘Bailieston’
property located at 127 Nagambie-Rushworth Road within the Company’s 100%
owned Bailieston license area. For a cash sale price of A$670,000 has been
agreed for the Nagambie-Rushworth Road property, with a deposit of A$67,000
already received.
* On 22 February the Company announced that it has executed a sale and purchase
agreement for the sale of the Company’s ‘Bailieston’ property located at
127 Nagambie-Rushworth Road within the Company’s 100% owned Bailieston
license area for a cash sale price of A$670,000 has been agreed for the
Nagambie-Rushworth Road property, with a 10% deposit already received.
* On 24 February the Company was pleased to announce an increase from 70% to 90%
with its ownership stake Cordillera Tiger Gold Resources, Inc
(“Cordillera”), owner of Exploration License EP-006 at the Danglay gold
project in the north of the Philippines.
* On 1 March the Company provided an update on results from three more drill
holes from the Blue Moon Prospect, Bailieston, Victoria, including our best
gold intercept for this 2022 drilling campaign in hole BBMDD010. With an
impressive composite grade of 6.35m @4.56 g/t from 84.9m down.
* On 3 March the Company is pleased to provide an update on the second drilling
rig. the rig has arrived 1 March 2023 at Melbourne Port and the team
immediately collected and fitted out the rig with support equipment for
deployment.
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ECR Minerals plc
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