REG - Ferro-Alloy Resrcs. - 2025 Final Results
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RNS Number : 4800C Ferro-Alloy Resources Limited 30 April 2026
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET
ABUSE REGULATION (EU) NO. 596/2014 (INCLUDING AS IT FORMS PART OF THE LAWS OF
ENGLAND AND WALES BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018
("MAR").
30 April 2026
Ferro-Alloy Resources Limited
("Ferro-Alloy" or the "Group" or the "Company")
2025 Final Results
Ferro-Alloy Resources Limited (LSE:FAR), the vanadium producer and developer
of the large Balasausqandiq vanadium deposit in Southern Kazakhstan (the
"Project"), announces its final results for the year ended 31 December 2025
("FY25" or the "Period").
Operational Highlights
· During the Period, the Company announced the results of its
feasibility study (the "Feasibility Study") on Phase 1 of the Balasausqandiq
vanadium deposit. The Feasibility Study identified the strategic nature of the
Project and its potential to become one of the largest and lowest cost
vanadium producers globally.
· The results of the Feasibility Study confirmed a net present value
for the Phase 1 of the Project of US$748 million (after tax, discount rate of
8%), an internal rate of return of 22% and a funding requirement of US$520
million to enter production.
· Following the signing of a framework agreement in June 2025, the
Company subsequently announced in November 2025 that it had received an
indicative cost estimate of US$261 million from China National Chemical
Engineering Sixth Construction Co., Ltd ("CC6") for the engineering,
procurement and construction ("EPC") for the Project (excluding the relatively
minor costs of the equipment relating to uranium and molybdenum sorption).
· Taking into account the CC6 EPC cost estimate and the results of the
Feasibility Study, the revised compelling headline economics for Phase 1 of
the Project are as follows:
US$m
Capital expenditure (including working capital, strategic spares, owner's 313.2
costs, insurance etc.)
Contingency 42.4
Pre-production income, less costs (43.7)
Revised funding required to get into production 311.9
Net Present Value (after tax, discount rate of 8%) 931.6
Project Internal Rate of Return 31%
Cash cost of production (V(2)O(5) equivalent basis) US$4.35/lb
Cash cost of production net of by-products US$0.36/lb
Annual production of V(2)O(5) (tonnes) 8,500
Annual production of carbon black substitute (tonnes) 247,000
Mine life (ore-body 1 only, out of seven) 20 years
Financial and Corporate Summary
· Group revenues of US$4.53 million (2024: US$4.72 million), in line
with management expectations and the Group's strategy for the existing plant
to act primarily as a research and development centre for vanadium and carbon
black substitute ("CBS") products.
· Cost of sales decreased to US$6.3 million (2024: US$7.6 million),
driven by reductions in the costs of raw materials processed, wages and
general operating costs at the existing plant, leading to a gross loss of
US$1.7 million (2024: US$2.8 million).
· Continued capitalisation of the Group's feasibility study costs
incurred during the year as an exploration and evaluation asset, resulting in
recognised asset of US$10.5 million (2024: US$8.0 million).
· The Company completed a number of equity placings during the year to
support the Group's ongoing activities, resulting in the issue of 75,907,391
shares and a gross cash benefit to the Company of US$6,142,125 (comprised of a
combination of cash receipts and suppliers, as well as certain directors,
accepting Company shares in lieu of cash for balances owed).
· The Group made an overall net loss for the year of US$8.42 million
(2024: loss of US$9.43 million).
· Cash in the bank at 31 December 2025 was US$1.68 million
(2024:US$3.78 million). Cash in the bank at 31 March 2026 was US$2.16 million,
following an issue of equity in March 2026.
· During the Period, the Group appointed Northcott Capital Limited, in
partnership with Oval Advisory Limited, as lead financial adviser with respect
to the financing of the Project.
Research and Development Summary
During the Period, the Group progressed several ongoing research and
development initiatives, summarised as:
· Electrolyte for vanadium redox flow batteries
Successful development and testing of the technology for producing vanadium
mixed oxides, which would enable the production of vanadium electrolyte for
battery energy storage. The technological process has been defined and sample
products of sufficient high purity have been made. The Group is planning to
participate in a new Kazakhstan Science Fund project, which is aiming to
produce a 25 kW vanadium redox flow battery, by supplying high purity vanadium
pentoxide or vanadium trioxide for the purpose of producing the vanadium
electrolyte.
· Carbon black substitute
Continued development of the new form of CBS. Ongoing laboratory testing, in
conjunction with Qingdao Master Tyre Co., Ltd (see announcement dated 19
January 2026), has shown good results, demonstrating that this CBS can be
successfully partially substituted in a standard rubber tyre sidewall mix.
· Ferro-nickel
Development of a treatment process and preparation of an internal concept
study for the production of ferro-nickel in an electric arc furnace, utilising
the stockpiles of nickel-rich residues from the vanadium and molybdenum
extraction process held on site. This is a low-cost project, and discussions
are ongoing with potential customers to provide prepayment sufficient to cover
the cost of construction. The electric arc furnace will be available for
ferro-vanadium production following commissioning of the Project.
· Ferro-tungsten
Development and testing of a technological process for the production of
ferro-tungsten from tungsten concentrate. Negotiations are ongoing for the
sourcing of tungsten concentrates, with a view to starting production if
sufficiently attractive terms can be agreed.
· Roasting process
New technological process adopted to improve the current roasting process at
the existing plant. The new technology increases output by around 30% and
lowers the consumption of gas.
Commenting on the results, Nick Bridgen, CEO of Ferro-Alloy Resources said:
"The highlight of the year was the positive Feasibility Study, which showcased
the Balasausqandiq Project's highly compelling financial characteristics.
Whilst the study only covers Phase 1 of the Project, it serves as an
indication of the scale of the opportunity, with further phases primed to
supply the world shortage of vanadium that the roll out of vanadium redox flow
batteries is expected to create.
Meanwhile, the existing plant, acting primarily as a research and development
centre, has developed technologies that are going to be invaluable when
production starts. This early developmental work provides the Group with an
experienced workforce, high-quality specialists, and the technology to produce
high-purity vanadium oxides for electrolyte production.
I look forward to building on these successes through the remainder of the
year."
Publication of Annual Report
The Company's Annual Report will be available shortly on the Company's website
at www.ferro-alloy.com
For further information, visit www.ferro-alloy.com or contact:
Ferro-Alloy Resources Limited Nick Bridgen (CEO) / William Callewaert (CFO) info@ferro-alloy.com
Shore Capital Toby Gibbs / Lucy Bowden +44 207 408 4090
(Joint Corporate Broker)
Panmure Liberum Limited Scott Mathieson / John More +44 20 3100 2000
(Joint Corporate Broker)
BlytheRay (Financial PR) Megan Ray / Will Jones +44 20 7138 3204
ferro-alloy@blytheray.com
Notes to Editors
About Ferro-Alloy Resources Limited:
The Company's operations are all located at the Balasausqandiq deposit in
Kyzylordinskoye Oblast in the South of Kazakhstan.
Balasausqandiq is a very large deposit, with vanadium as the principal product
together with the carbon black substitute and several by-products. Owing to
the nature of the ore, the capital and operating costs are very much lower
than for other vanadium projects.
The most recent mineral resource estimate for ore-body one (of seven) provided
an Indicated Mineral Resource of 32.9 million tonnes at a mean grade of 0.62%
vanadium pentoxide ("V(2)O(5)") equating to 203,364 contained tonnes of
V(2)O(5). In the system of reserve estimation used in Kazakhstan the reserves
are estimated to be over 70 million tonnes in ore-bodies 1 to 5, but this does
not include the full depth of ore-bodies 2 to 5, or the remaining ore-bodies
which remain substantially unexplored.
The grade of carbon in the deposit is over 8%. The carbon flows through to the
tailings from where it is concentrated, in a simple low-cost operation, into a
40% carbon product, the CBS, that can be used in place of carbon black as a
reinforcing filler in the making of rubber.
The Project will be developed in two phases, Phase 1 and Phase 2, with Phase 1
treating 1.65 million tonnes per year.
There is an existing concentrate processing operation at the site of the
Balasausqandiq deposit. The production facilities were originally created from
a 15,000 tonnes per year pilot plant, which was then expanded and adapted to
recover vanadium, molybdenum and nickel from purchased concentrates.
Alongside this operation, there is a well-equipped laboratory and highly
skilled technical team, who have already developed the technology that is
being built into the feasibility study and is further developing and
optimising processes needed for future vanadium and carbon operations. The
plant will operate only when profitable concentrates are available and, when
not operating as a production facility, will operate on an expanded basis as
an R&D centre.
REVIEW OF THE YEAR
Feasibility Study
On 13 October 2025, the Company announced the results of its feasibility study
on Phase 1 of the Balasausqandiq vanadium deposit (the "Project") in Southern
Kazakhstan (the "Feasibility Study") that identified the strategic nature of
the Project and its potential to become one of the largest and lowest cost
vanadium producers globally.
The Company subsequently announced on 4 November 2025 that the Company had
received an indicative cost estimate from China National Chemical Engineering
Sixth Construction Co., Ltd ("CC6") for the engineering, procurement and
construction ("EPC") for the Project (excluding the relatively minor costs of
the equipment relating to uranium and molybdenum sorption) of US$261m.
Taking into account the CC6 EPC cost estimate and the results of the
Feasibility Study, the compelling economics of the Project (Phase 1 only) are
as follows:
Capital expenditure (including working capital, strategic spares, owner's US$313.2m
costs, insurance etc.)
Contingency US$42.4m
Pre-production income, less costs US$(43.7)m
Funding required to get into production US$311.9m
Net Present Value (after tax, discount rate of 8%) US931.6m
Project Internal Rate of Return 31%
Cash cost of production (V(2)O(5) equivalent basis) US$4.35/lb
Cash cost of production net of by-products US$0.36/lb
Annual production of V(2)O(5) (tonnes) 8,500
Annual production of carbon black substitute (tonnes) 247,000
Mine life (years) 20
Further phases of development after this are likely, based on six further
ore-bodies currently identified.
Background
Most of the world's vanadium is produced from vanadiferous titano-magnetite, a
form of iron ore, using a process which requires pre-concentration and high
temperature roasting. However, the Balasausqandiq ore-body benefits from being
a black shale, which does not require concentration or roasting, resulting in
a simpler flow sheet, with lower production costs and significantly reduced
environmental emissions.
The Group previously operated a large scale 15,000 tonnes per annum pilot
plant that enabled the process to be optimised. Around 20 tonnes of ammonium
metavanadate ("AMV") (a product which only requires a final heating stage to
convert to vanadium pentoxide ("V(2)O(5)")) was produced and sold
commercially. With certain modifications, the pilot plant operates today as a
research and development ("R&D") centre for the Group's carbon black
substitute ("CBS") products as well as for treating purchased concentrates.
Independent Feasibility Study results
In 2021, SRK Consulting (Kazakhstan) Limited ("SRK") in conjunction with Tetra
Tech Limited ("Tetra Tech"), were commissioned to produce a feasibility study
to independently verify the Group's processes. The Group also commissioned SGS
Canada Inc ("SGS"), an international independent laboratory testing
organisation, to carry out the detailed test work under the supervision of
Tetra Tech.
Value enhancement opportunities
During completion of the Feasibility Study, the Group identified areas for
optimisation and value enhancement beyond those included in the final
Feasibility Study. It is expected that further investigation during the
front-end engineering and design ("FEED") stage of the Project could lead to
significant further improvement in Project economics.
The following are the areas which the Company believes have potential for
optimisation which could reduce capital and operating costs, increase
production, and significantly improve the Project net present value and
internal rate of return.
Reagent consumption and metallurgical recovery
The Feasibility Study has incorporated the higher level of reagent consumption
that was indicated by the laboratory-scale test work carried out by SGS,
achieving a metallurgical recovery of 86.2%. Significantly lower reagent
consumptions were used in the much larger scale historical pilot test work
programme, also achieving a higher metallurgical recovery. The Group's
technical team believe that lower reagent consumption and higher recovery can
be achieved in actual operations, and this will be tested further.
Carbon recovery
Carbon concentrator recovery was tested by SGS but the potential to enhance
recoveries by recirculating the concentrator tailings is still to be
confirmed. Although a conservative estimate of recovery is included in the
Feasibility Study, there are indications that a higher recovery might be
achievable. This would be expected to increase the scale of CBS production,
expanding the Company's by-product value, and further reducing the Project's
already industry leading forecast net cash operating costs.
CBS dry milling
The Feasibility Study design for the milling of the CBS product is premised on
wet milling but the Group has installed and tested a 400 kg per hour dry
milling test plant and achieved excellent results, albeit testing with milled
ore rather than concentrate. The use of dry milling greatly simplifies the
operation as filtration and drying of finely milled powders is avoided. The
Company believes that it is likely that this part of the operation will be
changed to a dry milling process during the FEED stage of development,
delivering significant capital cost savings and further enhancement of Project
economics.
New CBS product
The Group has developed a new CBS product (see Company announcement dated 27
June 2025) which can be made from the high-carbon waste to be mined to access
the vanadium ores. This is in addition to the original CBS product which is
made by concentrating the carbon in the tailings from the vanadium treatment
plant. The new material has not been included in the Feasibility Study. No
scheduling of production has yet been carried out but the amounts of suitably
high carbon material within the waste already scheduled to be mined would
indicate that an average of around 225,000 tonnes of this new type of material
might be produced per year in addition to the 247,000 tonnes of the original
CBS that have been included in the Feasibility Study. This material is
available at no additional mining cost, requiring limited capital expenditure
on crushing and dry milling. Discussions with potential customers are
continuing after successful laboratory testing. Further bulk testing of this
product is planned.
Value engineering
The Group's operational team has gained considerable experience in procurement
and fabrication through the construction and development of the Group's
existing operations. The Company believes that there is the opportunity to
negotiate more favourable terms with suppliers than those included in the
Feasibility Study, particularly regarding local and regional services and
equipment.
Mineral Resources and Ore Reserves
Resource Class Weathering grade Mass (Mt) Grade (%) Material Content (tonnes)
V(2)O(5) Mo U C V(2)O(5) Mo U C
Measured - - - - - - - - - -
Indicated Resource Oxide 1.56 0.67 0.0139 0.0047 7.16 10,560 216 73 112,151
Transitional 1.25 0.66 0.0138 0.0045 7.17 8,260 172 56 89,869
Fresh - sulphide 30.08 0.61 0.0150 0.0052 8.83 184,814 4,523 1,554 2,655,454
Total 32.89 0.62 0.0149 0.0051 8.69 203,634 4,911 1,683 2,857,473
Inferred - - - - - - - - - -
* Differences may occur in totals due to rounding.
Ore Class Weathering grade Mass (Mt) Grade (%) Material Content (tonnes)
V(2)O(5) Mo U C V(2)O(5) Mo U C
Probable Reserve All Material Types 30.93 0.59 0.0143 0.0049 8.35 181,781 4,421 1,520 2,528,596
* The Balasausqandiq Ore Reserve Statement has its effective date as 30
September 2025, and is reported at a cut-off grade of 0.29% V(2)O(5) Eq
within an optimal pit shell.
The Reporting Standard adopted for reporting of the Mineral Resource and Ore
Reserve Statements for the Project is that defined by the terms and
definitions given in "The 2012 Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves as published by the Joint Ore
Reserves Committee of the Australasian Institute of Mining and Metallurgy,
Australian Institute of Geoscientists and Minerals Council of Australia" (the
"JORC Code (2012)").
The JORC Code (2012) has been aligned with the Committee for Mineral Reserves
International Reporting Standards ("CRIRSCO") reporting template.
Mining
The Balasausqandiq mine will comprise a conventional drill and blast, truck
and shovel open pit operation, with waste rock dumps located externally to the
pit. The open pit operation is planned to deliver 30.9 million tonnes ("Mt")
of ore from 167.7 Mt total material mined, over a mine life of 20 years, with
an average strip ratio of 4.4 tonnes of waste per tonne of ore, with average
grades of 0.59% V(2)O(5), 8.35% carbon, 0.005% uranium and 0.014% molybdenum.
Metallurgy
The Feasibility Study test work programme was designed to independently verify
the processes developed by the Group for the efficient extraction of vanadium,
molybdenum, uranium and carbon products from the Balasausqandiq black shale
ore. The bulk and variability testing programme at SGS used ore samples
representative of the Balasausqandiq mineralisation selected by Group
geologists and Tetra Tech. The tests completed on crushing, grinding,
leaching, impurity removal, product purification, carbon, solid liquid
separation and tailings management provided SRK and Tetra Tech validated
measurements to support performance parameters, equipment selection and
financial metrics. Additional process improvement opportunities have been
identified during the Feasibility Study that will be considered and
incorporated during the following detailed design phase.
Carbon
The ore at Balasausqandiq contains around 8.35% carbon which flows through to
the tailings from the vanadium extraction process. Test work carried out by
SGS indicated that the carbon level in these tailings can be concentrated to
40% carbon with a recovery of 72%. Further test work carried out by specialist
rubber testing consultants indicated that this material can be used as a
reinforcing filler in partial replacement for carbon black in making rubber.
When used in tyre sidewalls (a major use of carbon black) the tyre performance
was not materially different from tyres with the reinforcing filler made
wholly from carbon black. The Feasibility Study indicates that annual
production of this CBS product, following commissioning of the main plant,
will be around 247,000 tonnes. The Feasibility Study did not include the
newly developed second CBS product discussed as a potential value enhancement
above, which provides very significant upside potential.
Vanadium for electrolyte for the vanadium redox flow battery market
At the existing process plant, the Company has successfully tested the
production of high purity V(2)O(5), as well as vanadium trioxide suitable for
making battery electrolyte, and the electrolyte itself. The Feasibility Study
envisages the sale of V(2)O(5) flake, suitable for the steel industry, but it
is recognised that as the market for vanadium redox flow batteries ("VRFBs")
develops, an increasing proportion of the market will include these other
vanadium oxides, or the electrolyte itself. The necessary small changes to the
plant can be made either at a later date or during the engineering phase prior
to construction.
Currently, high purity vanadium is used for battery electrolyte, chemical,
aerospace and military purposes and sells for a premium price. This potential
benefit has not been incorporated into the financial model for the Feasibility
Study.
Markets
Vanadium
The Company commissioned CRU International Limited ("CRU") to assess the
available markets and pricing for standard grade V(2)O(5) and to take account
of the geography and logistics costs.
CRU advised that a deficit of supply is likely to emerge from 2029 onwards,
with use of V(2)O(5) in long term energy storage batteries rising rapidly to
account for some 76% of annual V(2)O(5) demand by 2040. Indeed, CRU foresee a
deficit of some 171,000 tonnes of V2O5 per annum arising by 2035, which is
larger than the entire market in 2024.
Subsequent to the Feasibility Study, CRU have forecast that the market deficit
might arise earlier than previously expected, with a deficit arising as early
as the end of 2026. This updated forecast has not been reflected in the
Feasibility Study results.
Bearing in mind logistics for different locations of customers, CRU forecast
net-back prices at factory gate for the Company of:
Net-back
Year Per lb V(2)O(5)
US$ 2025 real
2028 8.02
2029 8.67
2030 9.05
2031 9.43
2032 9.81
2033 10.19
2034 10.60
2035 10.60
2036 10.60
2037 onwards 10.59
CBS
Global market consultants, Smithers Information Limited ("Smithers") advised
that, based on the results of technical tests on rubber made from CBS, and by
comparison with other reinforcing fillers on the market, the material can be
sold for US$500 per tonne in the tyre market and up to US$600 per tonne in the
non-tyre market. The Company has utilised a price assumption of US$500 per
tonne in the Feasibility Study. Achievement of the higher US$600 per tonne
pricing would further increase the Project's forecast EBITDA by US$24.7m per
annum, solely from the Company's 247,000 tonnes of initial CBS production.
Further value may be derived from the saving to customers of emissions tariffs
owing to the much lower CO(2) embedded emissions of CBS compared with carbon
black.
Environment
Vanadium
When vanadium is used as an alloy, the additional strength and performance of
the resulting steel significantly reduces the quantities of steel required.
Steel production accounts, very broadly, for around 10% of world CO(2)
emissions, so increasing use of high quality vanadium containing steels can
play a significant role in minimising this source of global warming.
VRFBs are the leading technology for large scale, long duration, energy
storage batteries which are increasingly needed as the use of intermittent
renewable energy sources makes up an increasing proportion of energy
generation. The increase in demand for vanadium for this purpose is expected
by CRU to lead to a shortage of vanadium, starting in 2029. Balasausqandiq is,
therefore, essential to the world's move to renewable energy and the
mitigation of global warming.
CBS
Production of carbon black from current industrial manufacturers is a highly
polluting process, involving the combustion of heavy hydrocarbons in an oxygen
depleted atmosphere, resulting in CO(2) emissions of between 2 to 3 tonnes per
tonne of product, as well as other harmful polluting off-gases. However, the
Company's CBS products would be produced from the wastes from mining and
processing of vanadium ores, resulting in no additional emissions being
generated. Subsequent milling, drying, bagging and transport are expected to
amount to less than 0.25 tonnes of CO(2) emissions per tonne of CBS product.
The net benefit of the Company's CBS product versus conventional carbon black
products, would thus provide a forecast reduction in emissions of
approximately 90%.
Compliance with global standards
The Company's environmental consultants have undertaken numerous baseline
studies and other reviews taking into account the requirements of the various
environmental, social and governance ("ESG") based standards including the
Equator Principles and the IFC's Performance Standards. No issues have been
identified that would prevent the Project from progressing.
Feasibility Study service providers
The Feasibility Study service providers were SRK holding overall
responsibility for the Feasibility Study, Tetra Tech for metallurgy and
process plant design, SGS for laboratory test work, CRU providing V(2)O(5)
price forecasting and vanadium market insight and Smithers who carried out the
technical and marketing reports on the CBS.
Future phases
Phase 1 is based only on OB1, the first ore-body out of seven within the
Group's licence area for which there is geological evidence. Of the remaining
six ore-bodies, OB2,3&4 have been explored and full assay and mineral
resource estimates will be published in due course. However, preliminary
analysis, based on semi-quantitative x-ray fluorescence of OB2,3&4,
indicates that there will be ample resource to consider an additional Phase 2
operation at a scale of around three times larger than Phase 1 with a
similarly long mine life. No study has yet been made but the ore is known to
be very similar and mining and metallurgical processes are also expected to be
similar allowing further upside. The remaining ore-bodies have not been
explored but will remain for further future development.
Operational Review
The existing process plant continues to operate primarily as an R&D centre
but also recycles concentrates to recover vanadium, molybdenum and nickel on
an opportunistic basis.
Production
During the year, production of V(2)O(5) (mainly as AMV) and molybdenum (in
ferro-molybdenum) amounted to 316.8 tonnes (2024: 300.9 tonnes) and 47.7
tonnes (2024: 34.9 tonnes), respectively.
Production of Vanadium pentoxide Growth vs last year Production of Molybdenum
Quarter (tonnes) (tonnes)
Growth vs last year
Q1 76.5 -6.3% 17.0 +139.4%
Q2 74.5 -15.0% 10.8 +56.5%
Q3 100.0 +91.2& 13.9 +95.8%
Q4 65.8 -17.1% 5.9 -57.2%
2025 total 316.8 +5.2% 47.6 +36.4%
During the year, the plant also produced a concentrate from the nickel-rich
residues produced from the vanadium and molybdenum extraction process. Whilst
some sales were made, most of this material has been stockpiled awaiting
treatment on site. An internal concept study has been carried out for the
installation of an electric arc furnace and associated equipment to treat this
material to produce ferro-nickel.
Product prices (mid-market, as published) for V(2)O(5) and ferro-molybdenum
have broadly remained stable during the year as shown in the table below:
Start of 2025 Average for the year End of 2025 Current (24 April 2026)
Vanadium pentoxide (US$/lb) 5.37 5.20 5.8 6.11
Ferro-molybdenum (US$/kg of Mo) 49.8 51.9 52.4 65.1
Research and Development
Vanadium electrolyte
During 2025, the Group successfully developed and tested the technology for
the production of vanadium mixed oxides for the purpose of the production of
vanadium electrolyte for battery energy storage. The technological process has
been defined and sample products have been made. Following this project, the
Group is planning to participate in a new Kazakhstan Science Fund project
which is aiming to produce a 25 kW VRFB by supplying high purity V(2)O(5) or
vanadium trioxide for the purpose of producing the vanadium electrolyte.
Although the Feasibility Study envisages the production of V(2)O(5) flake,
suitable for use in the steel industry, this technology is now ready to be
incorporated into the development plan for the Balasausqandiq project if
offtake for electrolyte purposes is secured.
CBS
The Group is continuing to develop the new form of CBS (low-carbon
concentrate) noted above. The results of laboratory testing, in conjunction
with a large potential customer, have shown good results, demonstrating
already that this CBS can be successfully partially substituted in a standard
rubber tyre sidewall mix. The Group has prepared five tonnes of this CBS
concentrate for industrial testing by the customer which is now underway. In
cooperation with this customer, the Group has commissioned further research
aimed at increasing the potential substitution levels even further.
Ferro-nickel
The Group has continued to explore means of monetising the nickel-rich
residues from the vanadium and molybdenum extraction process. Although some
sales of this material have been made, the profitability has been low as a
result of high transport costs. Most of the production has, therefore, been
stockpiled, amounting now to some 5,000 tonnes of concentrate grading at
around 6% nickel content. The treatment of this free resource on site would,
therefore, be highly profitable. A treatment process has been prepared and
proven on both a laboratory scale and with industrial testing, and an internal
concept study has been prepared for the production of ferro-nickel in an
electric arc furnace. This is a low-cost project and discussions are ongoing
with potential customers to provide prepayment sufficient to cover the cost of
construction. The electric arc furnace will be available after the start of
the Balasausqandiq project for the production of ferro-vanadium if this is the
form of vanadium that offtakers would prefer.
Ferro-tungsten
At the end of 2025 the Group developed and tested a technological process for
the production of ferro-tungsten from tungsten concentrate. The technological
process was successful and in 2026 the Group is planning to negotiate the
sourcing of tungsten concentrates with a view to starting production if
sufficiently attractive terms can be agreed.
Roasting process
The Group has been working on a new process to improve the current roasting
process at the existing plant. The new technology increases output by around
30% and lowers the consumption of gas. This process was introduced during
April 2026 with good results.
Financial Review
Earnings
The Group reported revenues of US$4.5m for the year compared to US$4.7m in
2024, reflecting ongoing research and development activities of the Group in
addition to the opportunistic processing of concentrates when available.
US$'000 2025 2024
Revenue from shipments recorded at the price at time of dispatch 4,524 4,722
Adjustments to revenue after final price determination and fair value changes 7 16
Total revenue 4,531 4,738
Revenue is recognised at the time of transfer of control of the Group's
products to the customer but, as is common in the industry, the final pricing
determination may be based on assay and prices after arrival of the goods at
the final port of destination, particularly with respect to the sale of
V(2)O(5) products. The adjustments to revenue reflect these final pricing
determinations which occur after the relevant revenue is initially recognised.
Cost of sales decreased to US$6.3m from US$7.6m in 2024, driven by reductions
in the costs of raw materials processed, wages and general operating costs at
the existing plant. The largest part of the cost of sales is the purchase of
raw materials, the price for which is determined as a percentage of the value
of the content of vanadium or molybdenum at the market prices prevailing at
the time of purchase.
Administrative expenses of US$3.6m (2024: US$3.0m) have increased by
approximately US$0.6m during the year mainly as a result of the costs of the
equity fundraisings completed during the year and the cost of financial
advisers engaged to identify a further strategic investor for the Company.
The Group incurred net finance costs during the year of US$2.56m (2024:
US$1.98m) almost exclusively comprising of interest payable on the Company's
bond financing.
The Group made an overall loss for the year of US$8.42m (2024: loss of
US$9.43m).
Cashflow
Net cash outflows from operating activities, after changes in working capital,
for the year totalled US$0.9m (2024: US$4.2m) following adjustments for
depreciation, amortisation, share based payment expenses and net finance
losses.
Net cash outflows from investing activities totalled US$3.6m (2024: US$2.3m)
the majority of which was expenditure of US$3.4m (2024: US$2.1m) on the Phase
1 feasibility study capitalised as an exploration and evaluation asset (see
Note 13).
Net cash inflows from financing activities for the year were US$2.3m (2024:
US$8.4m), representing the proceeds of four equity issues completed during the
year totalling US$4.4 (2024: nil) net of interest payable to the Company's
bondholders of US$2.12m (2024: US$1.04m).
The Group held cash of US$1.68m at 31 December 2025 (2024: US$3.78m).
Balance sheet review
Total non-current assets increased to US$14.1m from US$12.5m principally due
to the continued capitalisation of the Group's feasibility study costs
incurred during the year as an exploration and evaluation asset (including the
transfer of prepayments previously made on account to the lead feasibility
study consultants).
Current assets decreased from US$6.7m to US$5.2m, driven mainly by a US$2.1m
decrease in cash and cash equivalents held by the Group at the year end offset
by an US$0.54m increase in raw materials held in year end inventories.
Total non-current liabilities decreased by approximately US$12.1m during the
year as a result of the reclassification of the Company's liabilities under
the Kazakh bond programme ("the Bond Programme") from non-current to current
given the maturity during 2026 of the majority of the tranches of bonds
historically issued by the Company.
Current liabilities at the year end were US$17.0m (2024: US$2.4m) representing
the reclassification noted above.
Corporate
During the year the Company completed a number of equity placings that
resulted in the issue of 75,907,391 shares and a gross cash benefit to the
Company of US$6,142,125 (comprised of a combination of cash receipts and
suppliers / certain directors accepting Company shares in lieu of cash for
balances owed).
Key performance indicators
The Group is in a period of development and its current operations, the
processing of bought-in secondary vanadium-containing materials for extraction
of vanadium and other metals and corresponding R&D, are relatively small
in comparison with the main objective of the Group to develop the
Balasausqandiq deposit and processing facility. Moreover, the current
operations are themselves undergoing a significant change which means that
operations are not in a steady state capable of meaningful inter-period
comparisons. The board of directors ("the Directors" or "the Board") are,
therefore, of the opinion that key performance indicators may be misleading if
not considered in the context of the development of the operation as a whole
for which the information for shareholders is better given in a descriptive
manner than in tabular form.
Sustainability Review
Our approach
The Company aims to maximise value for its investors and all stakeholders from
the responsible, efficient, and low-cost production of vanadium and other
commodities from the Balasausqandiq deposit. We seek to re-use or recycle
wherever possible and to minimise the environmental and social impacts of our
operations whilst ensuring the health and wellbeing of the Group's workforce.
Balasausqandiq is a unique vanadium deposit which also contains valuable
components of carbon, uranium and molybdenum. Vanadium and the other products
to be recovered from the Balasausqandiq ore will play an important role in the
world's transition to clean energy and a more sustainable future.
Development of appropriate frameworks
We have sought to minimise our environmental impacts whilst ensuring that all
employees can work safely, avoiding accidents and reducing the risk of
long-term health hazards. We aim to comply with all applicable laws, report
accurately where required, and implement appropriate governance standards.
As the Group grows to become a producer of critical commodities, it will
develop a comprehensive approach to address environmental, social, health and
safety issues within an appropriate governance framework. Such an approach
will recognise the requirements of all key stakeholders, including local
communities, governments, employees, and investors as well as customers.
To this end, the Company has appointed independent consultants to undertake an
analysis of our existing principles, controls, procedures, and performance
metrics by comparison to the standards they believe are reasonably applicable
to the Company and its lenders and investors, in particular, the Equator
Principles and the IFC Performance Standards. Following their initial report,
their conclusions and recommendations have been included within the
Feasibility Study.
Minimising impacts from production
We believe that any adverse environmental impact of the future operations at
Balasausqandiq will likely be significantly below those of our peer group. We
believe this can be a source of competitive differentiation for the Company
amongst customers who are increasingly reviewing supply chain ESG performance
when sourcing vital materials.
Most of the world's vanadium is made from titano-vanadiferous magnetite
("TVM"). The primary production of vanadium from TVM ore requires
pre-concentration and then roasting at approximately 1,100 degrees C to
convert the vanadium into a soluble form to enable recovery. Roasting alone
accounts for over 40% of the energy used by one major primary producer using
TVM ore. At Balasausqandiq, the ore is different, and the proposed process
does not require pre-concentration or roasting, significantly reducing CO(2)
emissions.
The proposed production process at Balasausqandiq involves leaching in
sulphuric acid which we expect to make by processing the sulphur that is
currently removed as an impurity from oil and gas production in Kazakhstan.
The process, which produces no CO(2), is exothermic and requires no
significant energy input. The waste heat produced will be used to make steam
for the hydrometallurgical process, further reducing energy requirements and
CO(2) emissions.
The production of carbon from the Balasausqandiq ore for use as carbon black
in making rubber is also much more energy efficient than competitive
processes. Carbon black is usually made by the incomplete combustion of
hydrocarbons, where only some 40% of the original hydrocarbon input is
recovered. The carbon from Balasausqandiq is naturally occurring and avoids
this combustion of hydrocarbons and the associated emissions of CO(2).
Social
The Group's operations utilise land which is unsuitable for agricultural use
and the nearest human habitation is 16 kilometres away in the village of
Aksumbe. Save for some unbounded grazing, there are no competing land uses or
requirement to re-locate communities as we develop operations. The social
impact of the operations will, therefore, be limited. The limited requirement
for additional infrastructure further reduces the impact on the local
population.
Economic impact on the local community
Nearly all the Group's employees are Kazakhstan nationals, and, with the
exception of specialists, most are hired from the local villages and the
nearby town of Shieli. The Group currently employs an operating and management
team of over 200 employees. As the Group grows, it will enhance and develop
its employment policies and procedures.
The Group pays salary taxes for employees including income tax, social
security tax and pension contributions, VAT on purchases and, in due course,
will pay corporation tax and withholding taxes. In addition, under the terms
of the Subsoil Use Agreement for the Balasausqandiq deposit, the operating
company is required, during the period of mining and based on the subsoil
activity, to pay:
· 1% of annual investment on education in Kazakhstan;
· 1.5% of annual investment on local development and infrastructure;
and
· 1% of annual profits on research and development.
In addition, the Group has signed an agreement with the Satbayev University
where selected post graduate students will be given technical work experience
opportunities with respect to the Group's operations.
Mine closure
The Company has prepared an environmental study in full compliance with the
laws of Kazakhstan and also aims to meet international standards. As part of
this study, a mine closure plan has been prepared and the Company is required
to contribute 1% of annual mining costs to a mine closure fund to ensure that
funds are available when the time comes. The Company will aim to back-fill the
open pit with waste rock from mining and contour surplus waste as mining
progresses.
Water
Water is almost fully recycled and no discharges are made from the site. In
2025 water consumption was 17,807 m(3) (2024: 21,519 m(3)).
A hydrogeological study has been carried out to assess the availability and
sufficiency of water for processing and human needs. Water is currently drawn
using natural pressure from a borehole. Currently, no water is discharged from
operations, although there are losses from evaporation. The Group already
recycles as much water as possible and plans to do the same for the
Balasausqandiq project. Water for the main project will be drawn from a
bore-hole some 20 km from the operating site and transported along a pipeline.
The Balasausqandiq project process has been designed to operate on a low
liquid: solid ratio to minimise water usage and associated reagent use.
Performance indicators
Health and safety
During the year, the Group had no reported health and safety incidents that
led to time lost, staff requiring medical treatment or hospitalisation and no
fatalities (2024: nil).
Energy and emissions
The table below discloses the Group's greenhouse gas emissions for 2025,
including both emissions resulting from activities for which the Group is
responsible e.g. the combustion of fuel (Scope 1 emissions) and emissions
resulting from the purchase of electricity, heat or steam cooling by the Group
for its own use (Scope 2 emissions).
All of the Group's emissions have been generated outside the United Kingdom
and offshore area.
Scope 1 (energy generated on site) 2025 2024
Process plant KwH CO(2)e KwH CO(2)e
(tonnes) (tonnes)
Coal for heating/steam 1,404,375 476 3,078,125 1,044
Diesel for roasting 36,960 10 239,121 64
Liquid gas for roasting 8,970,000 2,039 9,155,951 1,789
Other
Coal for heating 517,500 176 1,197,500 406
Diesel (vehicles) 152,292 40 233,308 20
Petrol (vehicles) 378,599 94 419,959 105
Total scope 1 11,459,726 2,835 14,323,964 3,428
Scope 2 (purchased electricity)
Process plant
Whole plant 2,898,368 1,739 3,083,166 *-
Total scope 2 2,898,368 1,739 3,083,166 -
Total scope 1 and scope 2 14,358,094 4,574 17,407,130 **3,428
*this information was not available in 2024
** includes Scope 1 only (2024)
Energy consumption
The Group has consumed 14,358,094 KwH (2024: 17,407,130 KwH) of energy during
the year.
All of the Groups's energy consumption has taken place outside the United
Kingdom and offshore area.
Intensity ratio
The Group will determine a suitable intensity ratio once all relevant data is
available.
Energy efficiency
The key energy efficiency adopted by the Group during the year has been to
continue to include energy saving initiatives within the Group's processing
plant future development planning.
Methodology
The Group has adopted the standard methodology issued by the Kazakhstan
Ministry of Ecology.
In disclosing the Group's emissions output and energy consumption during the
year, the Company has done so on an equity share approach. Accordingly, given
that all of the Company's subsidiary undertakings are wholly owned by the
Company, the activities of the entire group are included within the
disclosures made.
Climate Change Disclosures
As a responsible corporate entity operating in the natural resources sector,
the Company is committed to the recognition and disclosure of the potential
impacts of climate change on the Company's and Group's business activities.
The Company supports the initiatives and recommendations of the Task Force on
Climate-related Financial Disclosures ("TCFD") and has taken steps to develop
climate-related financial disclosures that it considers are consistent and
appropriate with both the recommended disclosures of the TCFD and the current
position of the Company. The Company will review future climate change
disclosures in light of relevant IFRS issued standards.
The TCFD recommended disclosure framework comprises four broad categories of
disclosure (pillars); governance, strategy, risk management and metrics and
targets. Within each category of recommended disclosure, the TCFD has
identified further specific disclosures that the Company should report on. The
Company has reported on this basis below.
The Company has considered the appropriate level of detail to be included
within the various disclosures having regard to the nature and size of the
Company's current operations and the planned future operations following the
construction of the mine processing facilities at the Balasausqandiq deposit.
The conclusion is that the majority of the specific disclosures sought by the
TCFD recommendations in the context of the current operation, the purchase and
treatment of vanadium-containing concentrates and research and development
activities, are unlikely to be either useful or meaningful to the reader of
these financial statements but that the disclosures will have far more
relevance and applicability following the commissioning of the main
Balasausqandiq mine processing facilities.
Accordingly, the disclosures noted below are provided generally in the context
of the operation of the bought-in concentrate processing plant in addition to
research and development activities and will be expanded to cover the future
operations upon construction of the Company's planned mine and associated
processing facilities.
The disclosures made below are consistent with the TCFD recommendations and
recommended disclosures.
Governance
1. Oversight of climate-related risks and opportunities
The Board is ultimately responsible for the oversight of the risks and
opportunities that are presented by the potential effects of climate change on
the Company's business activities. The Company's executive directors maintain
day-to-day responsibility for the recognition and effect of climate change on
the Company's operations.
In advance of the start of mining operations, the Company has constituted a
sustainability committee, comprising the chairman, the chief executive officer
and a non-executive director, that will guide and support the actions of the
Board with respect to climate-related matters.
2. Assessment and management of climate-related risks
The Board in conjunction with the sustainability committee will consider and
set appropriate Company policies that will govern how the Company's management
will assess and manage climate-related risks and opportunities in advance of
the commissioning of the mine.
The Company's executive directors and Group managers will be responsible for
the implementation and monitoring of the policies set.
The management of the current operation is responsible for assessing and
managing climate-related risks and opportunities at the existing plant.
Risk Management
3. Identification and assessment of climate-related risks
With respect to the existing operation, the identification and assessment of
climate-related risks and opportunities is carried out by management on an
ad-hoc basis.
Once the environmental and social impact assessment ("ESIA") with respect to
the Feasibility Study is completed, that document will identify and assess the
climate-related risks of the main mining project and how those risks can be
managed and mitigated.
4. Processes adopted for managing climate-related risks
With respect to the bought-in concentrate processing plant, no specific
climate change risks have been identified. The availability of concentrates is
expected to increase in the coming years as international regulations
prohibiting the burning of low-grade fossil fuels are implemented, requiring
more use of vanadium-containing catalysts for the refining of oil that
comprise the largest part of the Group's existing plant feed-stock. If a
climate-related risk is identified and assessed as likely to have an impact on
the operations of the plant, the plant's management will implement measures to
manage the impact.
In conjunction with the ESIA, an environmental and social management system
("ESMS") will be designed and developed and adopted in full once the
Balasausqandiq mine has been commissioned. The ESMS will identify the relevant
processes for the management of climate-related risks arising from the
operation of the mine.
5. Integration of climate-related risk management into the
organisation's overall risk management
The ESIA noted above is an integral element of the Balasausqandiq project.
Accordingly, the foreseen climate-related risks of the project (and the
management / mitigation of same) will be incorporated into the Company's
overall risk management by virtue of the adoption of the monitoring systems
and controls recommended by the ESIA and ESMS.
Strategy
6. Climate-related risks and opportunities
Opportunities
1. Vanadium
The main climate-related opportunity presented to the Company is the predicted
expansion of the global vanadium market as a result of the transition to a
lower-carbon world economy.
The demand for vanadium is expected to be driven by two factors - growth of
long-term energy storage solutions that use vanadium as a key component and an
increased use of vanadium in steel making, a high carbon dioxide emitting
industry, where vanadium as an alloy material can improve the strength of
steel and consequently reduce the quantity of steel needed.
2. Carbon
A secondary climate-related opportunity for the Company is the carbon material
found within the ore of the Balasausqandiq deposit.
The Company's expectation is that the carbon within the ore, once extracted,
will be capable of substituting for certain grades of carbon black used within
industries such as car tyre manufacturing.
Carbon black is usually produced by the incomplete combustion of hydrocarbons
in specific atmospheric conditions and typically generates significant levels
of carbon dioxide during production. The carbon in the Company's ore can be
recovered with relatively low-level emissions which are mostly necessary for
the extraction of the principal vanadium product. Car tyre manufacturers will,
therefore, be able to cut their supplier-related emissions by the use of this
product.
Risks
The climate-related risks of the project will be identified and evaluated by
the Company's ESIA in due course. No significant climate-change risks to the
current operation have been identified.
7. Impact of climate-related risks and opportunities on business,
strategy and financial planning
Climate-related risks and opportunities do not materially impact on the
business, strategy and financial planning for the existing plant given the
relatively small size of the operation.
The impact on the Balasausqandiq deposit mining operations will be considered
by the Company's ESIA.
8. Resilience of the organisation's strategy with respect to
climate-related scenarios
With respect to the bought-in concentrate processing plant and R&D centre,
the plant's management have not identified any particular climate-related
scenarios that would likely have a significant impact on its ongoing
operations. The plant already operates in an environment that is subject to
extreme weather conditions and is, therefore, considered to have a strong
resilience to existing and future climate-related scenarios.
The resilience to climate-related scenarios for the Balasausqandiq mining
operations will be identified and evaluated during the construction and
commissioning of the mine.
Metrics and Targets
9. Climate related risk / opportunity metrics
Given the small-scale nature of the bought-in concentrate processing plant and
R&D centre, the Company will develop metrics to assess climate-related
risks and opportunities in line with its strategy and risk management
processes once the Balasausqandiq mining operation has been commissioned.
10. Energy and emissions
Relevant emissions statistics are disclosed within the Sustainability Review
on page 12.
11. Climate-related risk / opportunity performance targets
Given the small-scale nature of the bought-in concentrate processing plant and
R&D centre, the Company will develop performance targets to manage
climate-related risks and opportunities in line with its strategy and risk
management processes once the Balasausqandiq mining operation has been
commissioned.
Alignment Status
The following table provides a summary of the Group's current alignment with
the TCFD recommendations:
TCFD pillar Recommended disclosure Current status Alignment
Governance Oversight of climate-related risks and opportunities Oversight provided by the board of directors. Sustainability committee formed. Comply
Assessment and management of climate-related risks
Current operations: climate-related risks assessed and managed by incumbent
management team. Main mine climate-related risks to be determined by the board
of directors following mine commissioning. Partial
Risk management Identification and assessment of climate-related risks Identification and assessment of climate-related risks for current operations Partial
completed by incumbent management. Identification and assessment of
climate-related risks for the main mine to be captured by the ESIA.
On an ad-hoc basis by the incumbent management team with respect to current
operations. ESMS being developed for the main mine for adoption on
commissioning of the main mine.
Processes adopted for managing climate-related risks
Integration to occur following the adoption of the ESIA and ESMS.
Partial
Integration of climate-related risk management into the organisation's overall
risk management
Planned
Strategy Climate-related risks and opportunities Identified and considered above. Comply
Impact of climate-related risks and opportunities on business, strategy and
financial planning
No material impact on current operations. Impact on the main mine to be Partial
Resilience of the organisation's strategy with respect to climate-related considered by the ESIA.
scenarios
No climate-related scenarios identified with respect to current operations.
Resilience of the strategy with respect to climate-related scenarios for the
main mine will be tested following construction and commissioning.
Partial
Metrics and targets Climate related risk / opportunity metrics To be adopted following the commissioning of the main mine. Planned
Energy and emissions
Disclosure with respect to current operations completed. Comply
Climate-related risk / opportunity performance targets
To be adopted following the commissioning of the main mine.
Planned
Principal Risks and Uncertainties
Description of principal risks, uncertainties and how they are managed
(a) Balasausqandiq project:
The Project is primarily dependent on long-term vanadium prices.
The Project is also dependent on raising finance to meet projected capital
costs (see below) and the successful construction and commissioning of the
Project's proposed mine processing facilities. It is not unusual for new
mining projects to experience unforeseen problems, incur unexpected costs and
be exposed to delays during construction, commissioning, and initial
production, all of which could have a material adverse effect on the Company's
operations and financial position. The Company has taken steps to mitigate
such potential adverse effects by engaging globally recognised engineers and
consultants to assist with the development and design of the key elements of
the Project in addition to the Group's own highly qualified workforce.
(b) Geopolitical situation:
While the ongoing invasion of Ukraine by Russia is not directly impacting the
Group, the Directors remain vigilant of the situation. The continued main risk
of the conflict is to the Group's transport routes, many of which involve
transit through Russia. Whilst these are currently operating without issue,
sanctions have been made against Russian and Belarusian vehicles transiting
through Europe (but not against vehicles registered in other jurisdictions in
the region such as Kazakhstan). There is a risk that further sanctions might
prevent transit through Russia into Latvia, through which the majority of the
Company's exports flow. The Company continues to review alternative transit
routes for raw material imports and product exports through the West of
Kazakhstan, either via the Caspian Sea or overland south of the Caspian Sea.
Routes to China are working normally.
With respect to the global sanctions imposed on certain Russian entities and
individuals, the Group monitors the implications of those sanctions on the
Group's trading activities on an ongoing basis.
The Company has not yet identified any risks applicable to the Group due to
the ongoing conflict in the Middle East but will continue to monitor the
situation.
(c) Financing risk:
The Balasausqandiq project will require substantial funds to be raised in debt
and equity which will be dependent upon market conditions at the time.
In March 2021 the Company signed an investment agreement with Vision Blue
Resources Ltd ("Vision Blue"). Under the terms of this agreement and in
addition to Vision Blue's participation in various secondary equity fundraises
completed by the Company, investments totalling US$16m have been made by
Vision Blue. Vision Blue holds options to subscribe up to US$30m at pre-agreed
prices to partially finance the construction of the project.
The favourable financial and other characteristics of the Feasibility Study
give the Directors confidence that the outcome of project will be successful.
(d) Climate change risk:
Refer to the Sustainability Review on page 12 and the Climate Change
Disclosures on page 16.
(e) Risks associated with the developing nature of the Kazakh economy:
According to the World Bank, Kazakhstan has transitioned from
lower-middle-income to upper-middle-income status in less than two decades.
Kazakhstan's regulatory environment has similarly developed and the Company
believes that the period of rapid change and high risk is coming to an end.
Nevertheless, the economic and social regulatory environment continues to
develop and there remain some areas where regulatory risk is greater than in
developed economies. The Company mitigates this risk by monitoring
developments in these regulatory environments on a regular basis and taking
relevant actions where required.
(f) Commodity price risk:
As already noted above, the success of the Company is dependent upon the
long-term prices of the products to be produced by the planned mine processing
facilities. As a result of there being no formally established trading markets
for the Company's principal products from the Project, there is a risk that
price fluctuations and volatility for these products may have an adverse
impact on the Company's future financial performance. The Company will
mitigate this risk by regularly reviewing third party commodity pricing
forecasts and considering hedging opportunities, as appropriate.
(g) Key personnel risk:
The Group is dependent upon its executive management team. Whilst it has
entered into contractual agreements at market rates with the aim of securing
the services of these personnel, the retention of their services cannot be
guaranteed. The development and success of the Group depends on its ability to
recruit and retain high quality and experienced staff. The loss of the service
of key personnel or the inability to attract additional qualified personnel as
the Group grows could have an adverse effect on future financial performance.
The Company mitigates this risk by regularly reviewing and revising, where
necessary, executive management remuneration and incentivisation packages
against market rates and by maintaining an open dialogue on key personnel
matters.
(h) Foreign currency risk:
Fluctuations in currency exchange rates, principally between the US Dollar and
Kazakhstan Tenge could adversely impact the Group's future earnings and cash
flows. The Company mitigates this risk by maintaining appropriate internal
foreign exchange rate policies.
GOVERNANCE
Governance statement
General
As a result of the ordinary shares of the Company being classified on the
Official List of the London Stock Exchange as Equity Shares (Transition), the
requirements of the UK Corporate Governance Code, published by the Financial
Reporting Council, do not apply to the Company. The Guernsey Finance Sector
Code of Corporate Governance does not apply to the Company since the Company
is not regulated by the Guernsey Financial Services Commission. However, the
Board recognises the importance of good corporate governance and has
implemented recognised corporate governance practices as far as is considered
appropriate by the Board whilst considering the size and nature of the
business.
The Board is responsible for the overall corporate governance of the
consolidated Group, guiding and monitoring the business and affairs of the
Company on behalf of the shareholders by whom they are elected and to whom
they are accountable.
Composition of the Board
Having regard to the Company's stage of development, the Directors believe
that the size of the current board comprising seven directors, three of whom
are executive and four are non-executive, is appropriate. The Directors
intend that there will always be at least as many non-executive directors as
there are executive directors.
Board committees
Audit
The Company has created an audit committee that is responsible for considering
all financial reporting matters and ensuring that they are properly reported
and monitored. It is also responsible for the review and assessment of the
independence of the external auditors and approval of any non-audit services,
review of the external audit strategy and findings, assessment of whether an
internal audit function is necessary considering the activities and size of
the business and oversight of significant financial reporting matters. The
committee is chaired by James Turian and Christopher Thomas is a member. Mr
Turian has a background in accounting, trust and management and is a director
of a firm of accountants in Guernsey which the Board considers to be recent
and relevant experience to carry out his responsibilities as chairman.
Remuneration
The Company has also created a remuneration committee to consider all matters
related to salary and benefits of senior staff and executive directors. The
remuneration of non-executive directors is a matter for the Board as a whole.
No director will take part in discussions concerning his own remuneration
package. Mr Thomas is the chairman of the committee and Mr Turian is a member.
Nomination
The Directors are of the opinion that due to the nature and size of the
Company and its current Board, the functions often carried out by a nomination
committee can be more successfully conducted by the full board of directors
and so no such committee has been created.
Sustainability
The Company has constituted a sustainability committee comprising the
chairman, the chief executive officer and a non-executive director that will
guide and support the actions of the Board with respect to sustainability
related matters, particularly once construction of the mine has commenced.
Code of conduct
The goal of establishing the Company as a significant mining and processing
company is underpinned by its core values of honesty, integrity, common sense
and respect for people. The Company desires to be a good corporate citizen
in all the jurisdictions within which it operates, and to appropriately
balance, protect and preserve all stakeholders' interests. In particular,
the Company gives paramount concern to the safety of its employees and the
maintenance of high environmental standards.
Shareholder communication
The Board aims to ensure that shareholders and investors have equal access to
Company information.
The Company aims to promote effective communication with shareholders and
encourage effective participation at general meetings through a policy of open
disclosure to shareholders, regulatory authorities and the broader community
of all material information with respect to the Company's affairs.
Internal control and risk management systems
The Company's accounting and finance team is relatively small and subject to
close control by the executive directors. For this reason, the audit committee
and the Board are of the opinion that it is not yet appropriate for there to
be a separate internal control department or internal audit function but has
implemented various procedures and internal controls to provide assurance to
the Directors that accounting and financial risks are adequately controlled.
These include:
· The preparation and regular updating of cash flow forecasts, changes
to which are closely monitored by the executive directors who discuss
necessary changes on an almost daily basis;
· Significant contracts require approval by the Directors and approval
must follow a specified approval processes; and
· All Group payments must be authorised by a director and payments by
the Company require two directors' signatures on all payments over US$10,000.
Board of Directors
Sir Mick Davis, Non-executive Chairman
Sir Mick Davis holds a number of directorships at private companies and is a
highly successful mining executive accredited with building Xstrata plc into
one of the largest mining companies in the world prior to its acquisition by
Glencore plc. Before listing Xstrata on the LSE as CEO he was CFO of Billiton
plc and Chairman of Billiton Coal which he joined from the position of Eskom
CFO.
During his career in mining he has raised almost US$40bn from global capital
markets and successfully completed over US$120bn of corporate transactions,
including the creation of the Ingwe Coal Corporation in South Africa; the
listing of Billiton on the LSE; the merger of BHP and Billiton; as well as
numerous transactions at Xstrata culminating in the sale to Glencore plc.
Sir Mick Davis is a Chartered Accountant by profession, and holds an honours
degree in Commerce from Rhodes University, South Africa and an Honorary
Doctorate from Bar Ilan University, Israel.
Nicholas Bridgen, Chief Executive Officer
Nick started his career in 1975 as a Chartered Accountant at Peat Marwick
Mitchell & Co (now KPMG). In 1979, he moved to the Rio Tinto Group,
becoming senior group accountant in 1981. He then moved to the Business
Evaluation Department for the Group in 1985 and was Group Planning Manager for
the RTZ Pillar Group which held the engineering, building products and
chemical companies. Nick spent 14 years with Rio Tinto. In the mid-1990s, he
was finance director at Bakyrchik Gold plc and in 1998, he founded Hambledon
Mining plc which acquired the Sekisovskoye gold project, listing the company
on AIM and taking the project from exploration, through construction and into
a producing mine.
Since 2006, Nick has been a director and more recently, CEO, of Ferro-Alloy
Resources Limited. In the role of CEO, Nick is ultimately responsible for all
aspects of the Ferro-Alloy Resources Group. He holds a Bachelor's degree with
honours from Exeter University, is a Chartered Accountant and has also studied
corporate finance at the London Business School. He speaks Russian.
Andrey Kuznetsov, Director of Operations
Andrey started his career in 1981 as an industrial engineer at Kirov
Engineering Plant in Almaty. After three years he became Chief of the
Scientific Department in the Central Committee of Youth (Comsomol). In 1987,
Andrey became general director of the Almaty NTTM "Kontakt" centre. In
1995-1996, he was the CEO of the Kazakhstan subsidiary of Alfa-Bank. Andrey
has been the general director of Firma Balausa LLC since 2006. He holds a
Specialist's degree in electrical engineering from Bauman Moscow State
Technical University and a PhD in informal mathematical logic. He has also
studied management at Coventry University.
As Director of Operations Andrey is responsible for the management of
operations in Kazakhstan and execution of the Company strategy and policies
approved by the Board.
William Callewaert, Chief Financial Officer
William graduated in 2002 from the University of Durham with an honours degree
in Law after which he trained as a Chartered Accountant in audit services with
leading tax, accounting and business advisory firm, Blick Rothenberg. Having
qualified in 2006, William's career progressed within advisory services at
Grant Thornton, KPMG and BDO in both the UK and offshore.
William is responsible for the overall management of the Group's finances,
future funding requirements and general statutory compliance. William is a
fellow of the Institute of Chartered Accountants in England and Wales.
Christopher Thomas, Non-executive Director (Chairman of the remuneration
committee and member of the audit committee)
Chris has nearly 35 years' experience in the communications industry. He has
held various high-level management positions including CEO of Proximity London
from 2003 to 2006 - one of the largest direct and digital agencies in London.
In 2006, Chris was appointed Chairman & CEO of BBDO and Proximity in Asia,
subsequently adding the Middle East and Africa to his responsibilities. He
worked with major multinational companies across the growth markets of SE
Asia, China, India and Africa. In May 2015, Chris moved to New York to take up
the role of CEO of BBDO in the Americas, with responsibility for 21 agencies
in the U.S., Canada and Latin America. In February 2019 he stepped down from
his Americas role to concentrate on his entrepreneurial interests. He also
served as a non-executive director on the board of Hambledon Mining from 2004
to 2011.
Chris is the chairman of the remuneration committee which considers and
approves the remuneration of all senior executives including that of the
executive directors. He is also a member of the Company's audit committee.
Petrus Nienaber, Non-executive Director
Peet has several decades of experience in the mining sector, most notably
spending over 24 years with what became Xstrata plc. At Xstrata he was
initially Head of Operations, spearheading the earliest days of the company,
including its growth to be the largest producer of ferrochrome. Thereafter he
spent 10 years as CEO of Xstrata Alloys, one of the largest producers of
ferrochrome and a leading producer of vanadium, with some 20,000 people under
Peet's leadership. After retiring from the position in 2012, Xstrata Alloys
subsequently went on to be acquired by Glencore plc.
Peet began his career as an engineer at Iscor Ltd before spending several
years in the ferroalloys industry at Samancor and Anglo American plc.
James Turian, Non-executive Director (Chairman of the audit committee and
member of the remuneration committee)
James started his career in 1986 and has a background in accounting, trust and
management. James has previously been involved with several mining companies
in Perth, Australia, including assisting Cooper Energy in their restructuring
in the early 2000s. From 2000 to 2011 James owned and operated a trust company
in Guernsey which he sold to concentrate on accountancy and currently is a
director of "Accounts For You Limited", a Guernsey accountancy firm. He holds
several other directorships. James is a Chartered Fellow of the Securities
Institute IAQ and is a Fellow of the Institute of Directors.
James is the chairman of the audit committee where he is responsible for
chairing the audit committee meetings.
Senior Management Team
Andrey Kuznetsov, Deputy Director of Operations
Having graduated from the Saint-Petersburg State University with a Masters in
Mathematics and Bachelor in Economics Andrey started his career as a
management consultant with boutique consultancy firm, Strategica. Andrey then
joined Danish company Dinex, in Russia, as a finance director for two years
before moving to Denmark to complete an MBA at the Copenhagen Business School.
Post MBA, Andrey joined Danish company ECCO where he spent almost 8 years in
various roles across Denmark, Netherlands and Russia. Andrey's final role at
ECCO was General Manager East, where he was responsible for ECCO distribution
markets in Russia, Ukraine, Georgia, Moldova and Bulgaria.
Andrey joined the Group in 2019 as the finance director of the Company's
Kazakhstan subsidiary, Firma Balausa LLC. In 2022, Andrey was appointed deputy
general director of Firma Balausa LLC to support the general director with
operations and the Feasibility Study.
Directors' Report
The Directors present their report and the audited consolidated financial
statements for the year ended 31 December 2025.
General
Ferro-Alloy Resources Limited ("the Company") is registered in Guernsey as a
non‐cellular limited company.
The Company's registered office is Maison Allaire, Smith Street, St Peter
Port, Guernsey, Channel Islands and the principal place of business of the
Group is Kazakhstan.
Principal activity
The Company is the holding company of a group of wholly owned companies which
carries on a mining and mineral processing business with operations located at
the Balasausqandiq vanadium/polymetallic mineral deposit in the
Kyzylordinskaya Oblast in southern Kazakhstan.
Review of business
A review of the business during the year is included within the Operational
Review at page 8.
The Group's business and operations and the results thereof are reflected in
the attached financial statements.
The principal risks and uncertainties facing the Company are summarised at
page 22.
Results and dividend
During the 12 months ended 31 December 2025, the Company reported a loss of
US$8.4m (2024: loss of US$9.4m).
No dividends have been declared or paid in respect of the years ending 2025 or
2024.
Share capital and funding
The ordinary shares of the Company were listed on the standard segment of the
main market of the London Stock Exchange on 28 March 2019 and, on a fully
fungible basis, on the Astana International Stock Exchange on 6 January 2020.
Full details of the Company's share capital, together with details of the
movements in the Company's issued share capital during the year, are set out
in Note 20 to the consolidated financial statements on page 63.
Directors
The Board is comprised of three executive directors and four non-executive
directors.
Current directors
The directors of the Company who held office during the year and to the date
of this report are as follows:
Sir Mick Davis
Nicholas Bridgen
Andrey Kuznetsov
William Callewaert
Christopher Thomas
Petrus Nienaber
James Turian
The biographical details of those directors that served during the year are
set out at pages 26 to 27.
Election and re-election of directors
In accordance with the Company's Articles of Incorporation, any director who
has been appointed by the Board since the date of the previous annual general
meeting or who has not previously retired at the two preceding annual general
meetings shall stand for election or re-election at the next general meeting.
However, for the purposes of good corporate governance, all directors put
themselves forward for re-election at each annual general meeting.
At the Company's annual general meeting held on 14 November 2025, all
appointed directors were re-elected to their respective roles.
Attendance at scheduled Company board meetings
Scheduled (5)
Sir Mick Davis 5
Nicholas Bridgen 5
Andrey Kuznetsov 5
William Callewaert 5
Christopher Thomas 5
Petrus Nienaber 5
James Turian 5
Remuneration
Salary/ fees ($'000) Benefits ($'000) Pension ($'000) Bonus/other ($'000) Total
($'000)
2024 2025 2024 2025 2024 2025 2024 2025 2024 2025
Sir Mick Davis - - - - - - - - - -
Nicholas Bridgen 271 273 47 62 - - - - 318 335
Andrey Kuznetsov 211 197 - - - - - - 211 197
William Callewaert 239 273 4 7 - - - - 243 280
Christopher Thomas 48 (1) 48 - - - - - - 48 48
Petrus Nienaber 48 (1)48 - - - - - - 48 48
James Turian 48 (1) 48 - - - - - - 48 48
Total 865 887 51 69 - - - - 916 956
(1) remuneration paid to each of these directors was by way of Company shares.
( )
Director's interests in the issued share capital of the Company
The interests of the Directors in the Company's issued share capital at 31
December 2025 and at the date of the signing of this report are as follows:
29 Apr 2026 Number of Ordinary Shares 29 Apr 2026 % of Share Capital 31 Dec 2025 Number of Ordinary Shares 31 Dec 2025 % of Share Capital 31 Dec 2024 Number of Ordinary Shares 31 Dec 2024 % of Share Capital
Sir Mick Davis (1) - - (1) - - (1) - -
Nicholas Bridgen 62,847,740 10.69 62,847,740 11.24 59,472,133 12.31
Andrey Kuznetsov 71,101,823 12.10 71,101,823 12.72 68,517,333 14.18
Christopher Thomas (2) 8,119,610 1.38 (2) 8,119,610 1.45 (2) 6,456,845 1.34
James Turian 1,662,765 0.28 1,662,765 0.30 500,000 0.10
Petrus Nienaber 1,193,162 0.20 1,193,162 0.21 - -
(1) Sir Mick Davis is the Chairman of Vision Blue Resources Limited and the
beneficiary of a Trust that is a shareholder in Vision Blue Resources Limited
and, therefore, he indirectly has an interest in that company's investment in
Ferro-Alloy Resources Limited arising from the investment agreement in place
between the two entities.
(2) including shares of Assiduous Group Limited which holds 7,574,898 (2024:
5,912,133) ordinary shares. Assiduous Group Limited is an investment vehicle
in which Christopher Thomas is the sole shareholder and director.
Substantial Shareholdings
A list of shareholders who beneficially hold more than 5% of the Company's
shares at 31 December 2025 is as follows:
Name of shareholder Number of Ordinary Shares Percentage of voting rights
Vision Blue Resources Limited 125,805,974 22.50%
Andrey Kuznetsov 71,101,823 12.72%
Nicholas Bridgen 62,847,740 11.24%
Directors' Indemnity Insurance
During the year, Director's and Officer's liability insurance was maintained
for the Directors and other officers of the Group.
Political Donations
The Group did not make any political donations during the year.
Electronic Communications
The Directors are responsible for ensuring that the Company's annual report
and financial statements are made available on a website. Financial statements
are published on the Company's website (www.ferro-alloy.com) in accordance
with applicable legislation in Guernsey governing the preparation and
dissemination of financial statements, which may vary from legislation in
other jurisdictions. The maintenance and integrity of the Company's website is
the responsibility of the Directors. The Directors' responsibility also
extends to the ongoing integrity of the financial statements contained
therein.
Board Diversity
In accordance with UK Listing Rule 22.3.30, the Company has not met the
required targets with respect to board diversity given the Company's stage of
development and size. The Directors recognise the importance of diversity in
both the workplace and at board level and will take steps towards achieving
the requirements of UK Listing Rule 22.3.30.
Going Concern
The consolidated financial statements have been prepared in accordance with
IFRS on a going concern basis.
The operations of the Group are financed from a combination of cash flows
generated by the existing operation, bond issues and funds raised from
shareholders and strategic investors. In common with many pre-production
entities, the Group will need to raise further funds in order to progress from
the feasibility study phase into construction and ultimately into production.
The Directors consider the ability of the Company to raise further funding to
be a material uncertainty.
With respect to the Bond Programme, a number of the tranches previously issued
under the programme will come to maturity during 2026 and the Company will
need to either fund these redemptions in cash or by alternative non-cash
methods. The Directors consider the ability of the Company to fund the
upcoming redemptions required by the Bond Programme to be a material
uncertainty. Further information on the tranches issued under the Bond
Programme is disclosed at Note 21.
These conditions indicate the existence of a material uncertainty, which may
cast doubt over the Group's ability to continue as a going concern, and
therefore that it may be unable to realise its assets and discharge its
liabilities in the normal course of business. The financial statements do not
include adjustments that would arise in the event of the Group not being able
to continue as a going concern.
Following the publication of the Feasibility Study, the Directors are
confident based on their previous experience and success in raising capital
that the Company will be able to secure further funding to address the
material uncertainties noted above and, therefore, the Company will continue
as a going concern for at least the next 12 months. Accordingly, the Directors
believe that it is appropriate that the Company adopts the going concern basis
of accounting in preparation of these financial statements.
Events Occurring After the Reporting Period
On 10 March 2026, the Company issued 28,621,701 shares raising gross proceeds
of £1,574,193.55.
Auditor
Crowe U.K. LLP has expressed its willingness to continue in office as auditor
and a resolution to re-appoint Crowe U.K. LLP will be proposed at the
Company's forthcoming annual general meeting.
Statement as to Disclosure of Information to Auditor
The Directors who were in office at the date of the approval of the
consolidated financial statements have confirmed that, as far as they are
aware, there is no relevant audit information of which the Company's auditor
is unaware and that each director has taken all the steps he ought to have
taken as a director to make himself aware of any relevant audit information
and to establish that the Company's auditor is aware of that information.
Approved by the Board of Directors and signed on its behalf
William Callewaert
Director
29 April 2026
Responsibility Statement
Directors' Responsibility Statement
The Companies (Guernsey) Law, 2008 requires the Directors to prepare financial
statements for each financial period which give a true and fair view of the
state of affairs of the Group for that period and of the profit or loss of the
Group for that period. Under that law they have elected to prepare the
financial statements in accordance with International Financial Reporting
Standards as adopted by the European Union and applicable law.
In preparing those financial statements the Directors are required to:
· Select suitable accounting policies and then apply them
consistently;
· Make judgements and estimates that are reasonable and prudent;
· State whether applicable accounting standards have been followed,
subject to any material departures disclosed and explained in the financial
statements; and
· Prepare the financial statements on the going concern basis unless
it is inappropriate to presume that the Group will continue in business.
The Directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
Group and to enable them to ensure that the financial statements have been
properly prepared in accordance with the Companies (Guernsey) Law, 2008. They
are also responsible for safeguarding the assets of the Group and hence for
taking reasonable steps for the prevention and detection of fraud and other
irregularities.
The Directors confirm that they have complied with the above requirements in
preparing the financial statements.
To the best of the Directors' knowledge:
a) the financial statements, prepared in accordance with International
Financial Reporting Standards as adopted by the European Union and applicable
law, give a true and fair view of the assets, liabilities, financial position
and profit or loss of Ferro-Alloy Resources Limited and the undertakings
included in the consolidation as a whole; and
b) the management report includes a fair review of the development and
performance of the business and the position of Ferro-Alloy Resources Limited
and the undertakings included in the consolidation taken as a whole, together
with a description of the principal risks and uncertainties that they face.
On behalf of the Board of Directors
William Callewaert
Director
29 April 2026
Independent Auditor's Report to the MEMBERS of FERRO-ALLOY RESOURCES LIMITED
Opinion
We have audited the financial statements of Ferro-Alloy Resources Limited and
its subsidiaries (the "Group") for the year ended 31 December 2025 which
comprise the consolidated statement of profit or loss or other comprehensive
income, consolidated statement of financial position, consolidated statement
of changes in equity and consolidated statement of cash flows and notes to the
financial statements, including significant accounting policies. The financial
reporting framework that has been applied in their preparation is applicable
law and International Financial Reporting Standards (IFRSs) as adopted by the
European Union.
In our opinion, the financial statements:
· give a true and fair view of the state of the Group's affairs as at
31 December 2025 and of its loss for the year then ended;
· have been properly prepared in accordance with International
Financial Reporting Standards as adopted by the European Union;
· have been prepared in accordance with the requirements of the
Companies (Guernsey) Law 2008.
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 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 1(d) in the financial statements, which indicates
that the Group will need to refinance its bonds that mature within twelve
months of the date of approval of the financial statements. They will also
require further funding to continue exploration and evaluation works on the
Balasuasqandiq project, and to fund its overheads during the going concern
assessment period.
As stated in note 1(d), these events or conditions, along with the other
matters as set forth in note 1(d), indicate that a material uncertainty exists
that may cast significant doubt on the Group'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 entity's ability to continue to adopt the going concern
basis of accounting included:
· Assessing the accuracy of forecasting by comparing previous forecasts
with actual results;
· Assessing the cash flow requirements of the Group over the duration
of the going concern period based on budgets and forecasts;
· Challenging the forecast expenditure that is committed, and that
which could be considered discretionary;
· Discussing with management their plans for refinancing the Group's
bonds, and assessing the feasibility of this, including consideration of
information provided by the Group's legal advisor;
· Considering the liquidity of existing assets in the statement of
financial position; and
· Considering the potential downside scenarios and the resultant impact
on available funds.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Overview of our audit approach
Materiality
In planning and performing our audit we applied the concept of materiality. An
item is considered material if it could reasonably be expected to change the
economic decisions of a user of the financial statements. We used the concept
of materiality to both focus our testing and to evaluate the impact of
misstatements identified.
Based on our professional judgement, we determined overall materiality for the
financial statements as a whole to be $280,000 (2024: $250,000), based on
approximately 1.5% of total assets.
We use a different level of materiality ('performance materiality') to
determine the extent of our testing for the audit of the financial
statements. Performance materiality is set based on the audit materiality as
adjusted for the judgements made as to the entity risk and our evaluation of
the specific risk of each audit area having regard to the internal control
environment. We determined performance materiality to be $196,000 (2024:
$175,000).
Where considered appropriate performance materiality may be reduced to a lower
level, such as, for related party transactions and directors' remuneration.
We agreed with the Audit Committee to report to it all identified errors in
excess of $14,000 (2024: $12,500). Errors below that threshold would also be
reported to it if, in our opinion as auditor, disclosure was required on
qualitative grounds.
Overview of the scope of our audit
The Group operates through the Parent Company based in Guernsey whose main
function is the incurring of administrative costs and providing funding to the
operating entities in Kazakhstan. In addition to the Parent Company, the
subsidiary Firma Balausa LLC was considered to be a significant component.
In establishing our overall approach to the Group audit, we determined the
type of work that needed to be performed in respect of each component. A full
scope audit of both the Parent Company and Firma Balausa LLC subsidiary was
carried out principally in Kazakhstan by a component auditor, at the direction
of instructions provided by the Group auditor. The consolidation was audited
by the Group auditor. The remaining components of the Group were considered
non-significant and these components were subject to analytical procedures
performed by the Group auditor.
Our involvement with component auditors
In respect of the work performed by the component auditor, we determined the
level of involvement needed in order to be able to conclude whether sufficient
appropriate audit evidence has been obtained as a basis for our opinion on the
consolidated financial statements as a whole. Our involvement with the
component auditor included the following:
· Detailed group instructions were sent to the component auditor, which
included the significant areas to be covered by the audit (including areas
that were deemed to be key audit matters as detailed below), the level of
component materiality, and set out the information required to be reported on
to the Group auditor;
· The Group auditor reviewed the component auditor's working papers at
their offices in Kazakhstan and held regular calls with the component auditor
throughout the engagement;
· We held calls and meetings with Group and component management to
discuss accounting and audit matters arising.
Members of the Group audit team visited Kazakhstan to meet with local
management and substantiate information and explanations provided during the
audit work.
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.
We identified going concern as a key audit matter and have detailed our
response in the section headed Material Uncertainty Related to Going Concern
above.
This is not a complete list of all risks identified in the audit.
Key audit matter How our scope addressed the key audit matter
1. Carrying value of Exploration and Evaluation assets (note 13) We obtained and reviewed the Directors' assessment of the indicators of
impairment, as set out in IFRS 6 "Exploration for and evaluation of mineral
The Group carried Exploration and Evaluation assets totalling $10.5m (2024: resources". The following procedures were performed to challenge the
$7.9m) in relation to the Balasausqandiq deposit in Kazakhstan. These costs Directors' conclusion that no indications of impairment were present:
have been capitalised in accordance with the requirements of IFRS 6.
· We obtained a copy of the Group's subsoil use agreement and confirmed
At each reporting date, the Directors are required to assess whether there are that it remains valid;
any indicators of impairment, that would require an impairment assessment to
be carried out. The Directors concluded that there were no indicators of · We reviewed correspondence with the Government licensing body during
impairment. the year, including in relation to the application for Addendum No. 5 to the
subsoil use agreement;
The Directors' consideration of the impairment indicators requires them to
make certain judgements, which makes this a key audit matter. · We made specific enquiries of the Directors and key staff involved in
the exploration work, and challenged management to demonstrate that further
exploration work in the area covered by the subsoil use agreement was planned
and had been incorporated in budgets and forecasts;
· We considered the output of the Definitive Feasibility Study in the
context of the commercial feasibility of the Balasausqandiq project, and in
the recoverability of capitalised exploration and development costs;
· We performed an assessment of the objectivity and competence of the
Experts who prepared the Definitive Feasibility Study;
· We held discussions with the Experts who prepared the Definitive
Feasibility Study to understand their approach and any further works required
to refine the results;
· We reviewed the adequacy of disclosures in the financial statements
in relation to the impairment consideration.
2. Revenue recognition (note 4) We performed the following procedures:
The Group generated revenues of $4.5m (2024: $4.72m) during the year. · We assessed the Group's contracts and revenue recognition policy
against the 5-step model of IFRS 15 to consider the appropriateness of the
In considering application of IFRS 15 "Revenue from Contracts with Customers", accounting policy;
particular attention was required in the following areas:
· We obtained and reviewed sales agreements for a sample of customers
- The identification of performance obligations in the contract, and to assess the appropriateness and application of the accounting policy.
the point at which performance obligations are satisfied and when revenue is Specific consideration was given to the identification of performance
recognised, which can be specific to each contract. obligations and the timing and circumstances at which these are satisfied;
- The accounting for variable consideration associated with estimates · We evaluated the appropriateness of management's accounting treatment
of quality and quantity for sales during the year, which are subject to final for the provisional pricing clauses for open sales, and for the estimation of
checks post year end. quality and quantity of amounts, comparing these to actual outcomes post year
end;
· We obtained sales confirmation letters from the Group's key
customers, covering 81% of revenue;
Given the level of judgement and estimation involved, we considered revenue · We agreed a sample of revenue transactions to documentation
recognition to represent a significant audit risk and therefore a key audit supporting shipping and delivery of goods, ensuring that revenue had been
matter. recognised at the appropriate point according to the terms of the contract.
· For a sample of sales around the year end, we vouched to
documentation supporting their inclusion in the correct accounting period;
· We reviewed financial statements disclosures to ensure these were
compliant with IFRS 15.
Our audit procedures in relation to these matters were designed in the context
of our audit opinion as a whole. They were not designed to enable us to
express an opinion on these matters individually and we express no such
opinion.
Other information
The directors are responsible for the other information contained within the
annual report. The other information comprises the information included in the
annual report, other than the financial statements and our auditor's report
thereon. Our opinion on the financial statements does not cover the other
information and, except to the extent otherwise explicitly stated in our
report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility
is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether 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.
Matters on which we are required to report by exception
Under The Companies (Guernsey) Law, 2008, we are required to report to you if,
in our opinion:
· we have not received all the information and explanations we require
for our audit; or
· proper accounting records have not been kept; or
· the financial statements are not in agreement with the accounting
records.
We have no exceptions to report arising from this responsibility.
Responsibilities of the directors for the financial statements
As explained more fully in the directors' responsibilities statement set out
on page 34, the directors are responsible for the preparation of the 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 financial statements, the directors are responsible for
assessing the Group'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 Company and
Group 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 legal and regulatory frameworks
that are applicable to the Group and the procedures in place for ensuring
compliance. These included the Companies (Guernsey) Law 2008, Listing Rules
and the significant laws and regulations in Kazakhstan including the terms of
the subsoil use agreement, tax legislation and environmental legislation.
· As part of our audit planning process, we assessed the different
areas of the financial statements, including disclosures, for the risk of
material misstatement. This included considering the risk of fraud where
direct enquiries were made with management and those charged with governance
concerning both whether they had any knowledge of any actual or suspected
fraud and their assessment of the susceptibility to fraud. We considered the
risk to be greater in areas involving significant management estimation or
judgement. Based on this assessment, we designed audit procedures to focus on
these specific areas.
· We tested the appropriateness of journal entries throughout the year
by vouching a risk-based sample of journals to supporting documentation and
explanations.
· A detailed review of the Group's year end adjusting entries was
performed. Any items that appeared unusual in nature or value were vouched to
supporting documentation.
Owing to the inherent limitations of an audit, there is an unavoidable risk
that some material misstatements of the financial statements may not be
detected, even though the audit is properly planned and performed in
accordance with the ISAs (UK). The potential effects of inherent limitations
are particularly significant in the case of misstatement resulting from fraud
because fraud may involve sophisticated and carefully organized schemes
designed to conceal it, including deliberate failure to record transactions,
collusion or intentional misrepresentations being made to us.
A further description of our responsibilities for the audit of the financial
statements is available on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditor's report.
Use of our report
This report is made solely to the company's members, as a body, in accordance
with Section 262 of the Companies (Guernsey) Law 2008. 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.
Matthew Stallabrass
Senior Statutory Auditor
For and on behalf of
Crowe U.K. LLP
Statutory Auditor
London, U.K.
Date: 29 April 2026
Consolidated Statement of Profit or Loss or Other Comprehensive Income for the year ended 31 December 2025
Note 2025 2024
$000
$000
Revenue from customers (pricing at shipment) 4 4,524 4,722
Final pricing adjustments after delivery 4 7 16
Total revenue 4 4,531 4,738
Cost of sales 5 (6,253) (7,550)
Gross loss (1,722) (2,812)
Other income 6 70 50
Administrative expenses 7 (3,565) (3,022)
Impairment loss 12 - (954)
Distribution expenses (137) (149)
Other expenses 8 (504) (563)
Loss from operating activities (5,858) (7,450)
Net finance costs 10 (2,557) (1,979)
Loss before income tax (8,415) (9,429)
11 - -
Income tax
Loss for the period (8,415) (9,429)
Other comprehensive loss
Items that may be reclassified subsequently to profit or loss
Exchange differences arising on translation of foreign operations (261) (1,080)
Total comprehensive loss for the period (8,676) (10,509)
Loss per share (basic and diluted) (US$) 20 (0.017) (0.020)
Consolidated Statement of Financial Position as at 31 December 2025
Note 31 December 2025 31 December 2024
$000
$000
ASSETS
Non-current assets
Property, plant and equipment 12 3,605 3,535
Exploration and evaluation assets 13 10,480 7,999
Intangible assets 14 18 18
Prepayments 18 - 971
Total non-current assets 14,103 12,523
Current assets
Inventories 16 1,318 874
Trade and other receivables 17 1,307 1,237
Prepayments 18 931 853
Cash and cash equivalents 19 1,684 3,777
Total current assets 5,240 6,741
Total assets 19,343 19,264
EQUITY AND LIABILITIES
Equity
Share capital 20 61,212 55,027
Additional paid-in capital 397 397
Share-based payment reserve 20 76 42
Foreign currency translation reserve (5,464) (5,202)
Accumulated losses (58,950) (50,535)
Total equity (2,729) (271)
Non-current liabilities
Loans and borrowings 21 5,000 17,134
Lease liabilities 85 -
Provisions 22 29 24
Total non-current liabilities 5,114 17,158
Current liabilities
Loans and borrowings 21 12,872 432
Trade and other payables 23 4,086 1,843
Deferred income 24 - 102
Total current liabilities 16,958 2,377
Total liabilities 22,072 19,535
Total equity and liabilities 19,343 19,264
These consolidated financial statements were approved and authorised by the
Board of Directors on 29 April 2026 and were signed on its behalf by:
William Callewaert
Director
The notes on pages 46 to 77 form part of these consolidated financial
statements.
Consolidated Statement of Changes in Equity for the year ended 31 December
2025
Share Additional paid in capital Share-based Foreign currency translation reserve Accumulated Total
capital
$000
payment
$000
losses
$000
$000
reserve
$000
$000
Balance at 1 January 2024 55,027 397 20 (4,122) (41,106) 10,216
Loss for the year - - - - (9,429) (9,429)
Other comprehensive expenses
Exchange differences arising on translation of foreign operations - - - (1,080) - (1,080)
Total comprehensive loss for the year - - - (1,080) (9,429) (10,509)
Transactions with owners, recorded directly in equity
Other transactions recognised directly in equity - - 22 - - 22
Balance at 31 December 2024 55,027 397 42 (5,202) (50,535) (271)
Balance at 1 January 2025 55,027 397 42 (5,202) (50,535) (271)
Loss for the year - - - - (8,415) (8,415)
Other comprehensive expenses
Exchange differences arising on translation of foreign operations - - - (262) - (262)
Total comprehensive loss for the year - - - (262) (8,415) (8,677)
Transactions with owners, recorded directly in equity
Shares issued, net of issue costs (Note 20) 6,185 - - - - 6,185
Other transactions recognised directly in equity - - 34 - - 34
Balance at 31 December 2025 61,212 397 76 (5,464) (58,950) (2,729)
Consolidated Statement of Cash Flows for the year ended 31 December 2025
2025 2024
$000
$000
Cash flows from operating activities
Loss for the year Note (8,415) (9,429)
Adjustments for:
Depreciation and amortisation 12, 14 441 962
Impairment of plant and equipment 12 - 954
Profit on sale of plant and equipment 12 - (42)
Write-off of property, plant and equipment 8 - 2
Write-down of inventory to net realisable value 8 205 71
Write-down of prepayments 8 40 273
Share-based payment expense 20 34 22
Net finance costs 10 2,557 1,979
Cash used in operating activities before changes in working capital (5,138) (5,208)
Change in inventories 16 (444) 1,109
Change in trade and other receivables 17 (70) 79
Change in prepayments 18 893 47
Change in trade and other payables 23 4,004 (298)
Change in deferred income 24 (102) -
Net cash used in operating activities (857) (4,271)
Cash flows from investing activities
Acquisition of property, plant and equipment 12 (281) (204)
Acquisition of exploration and evaluation assets 13 (3,387) (2,113)
Acquisition of intangible assets 14 - (3)
Proceeds from the disposal of plant and equipment 6 59 45
Net cash used in investing activities (3,609) (2,275)
Cash flows from financing activities
Proceeds from issue of share capital 20 4,381 -
Proceeds from borrowings 21 - 10,003
Issue costs on borrowings 21 - (565)
Interest paid 21 (2,120) (1,041)
Net cash from financing activities 2,261 8,397
Net (decrease) / increase in cash and cash equivalents (2,205) 1,851
Cash and cash equivalents at the beginning of the year 19 3,777 1,952
Effect of movements in exchange rates on cash and cash equivalents 112 (26)
Cash and cash equivalents at the end of the year 1,684 3,777
Notes to the consolidated financial statements for the year ended 31 December 2025
1 Basis of preparation
The consolidated financial statements for the year ended 31 December 2025
comprise the Company and the following subsidiaries:
Company Location Company's share in share capital Primary activities
Energy Metals Limited UK 100% Dormant
Vanadium Products LLC Kazakhstan 100% Performs services for the Group
Firma Balausa LLC Kazakhstan 100% Production and sale of vanadium and associated by-products
Balausa Processing Company LLC Kazakhstan 100% Dormant
(a) Statement of compliance
These financial statements have been prepared in accordance with International
Financial Reporting Standards as adopted by the European Union ("IFRS").
(b) Basis of measurement
The consolidated financial statements are prepared on the historical cost
basis. Historical cost is defined as the amount of cash or cash equivalents
paid or the fair value of the consideration given to acquire them at the time
of their acquisition.
(c) Functional and presentation currency
The national currency of Kazakhstan is the Kazakhstan Tenge ("KZT") which is
also the functional currency of the Group's operating subsidiaries. The
functional currency of the Company is US Dollars ("US$"). The presentation
currency of the consolidated financial statements is US Dollars.
(d) Going concern
The consolidated financial statements have been prepared in accordance with
IFRS on a going concern basis.
The operations of the Group are financed from a combination of cash flows
generated by the existing operation, bond issues and funds raised from
shareholders and strategic investors. In common with many pre-production
entities, the Group will need to raise further funds in order to progress from
the feasibility study phase into construction and ultimately into production.
The Directors consider the ability of the Company to raise further funding to
be a material uncertainty.
With respect to the Bond Programme, a number of the tranches previously issued
under the programme will come to maturity during 2026 and the Company will
need to either fund these redemptions in cash or by alternative non-cash
methods. The Directors consider the ability of the Company to fund the
upcoming redemptions required by the Bond Programme to be a material
uncertainty. Further information on the tranches issued under the Bond
Programme is disclosed at Note 21.
These conditions indicate the existence of a material uncertainty, which may
cast doubt over the Group's ability to continue as a going concern, and
therefore that it may be unable to realise its assets and discharge its
liabilities in the normal course of business. The financial statements do not
include adjustments that would arise in the event of the Group not being able
to continue as a going concern.
Following the publication of the Feasibility Study, the Directors are
confident based on their previous experience and success in raising capital
that the Company will be able to secure further funding to address the
material uncertainties noted above and, therefore, the Company will continue
as a going concern for at least the next 12 months. Accordingly, the Directors
believe that it is appropriate that the Company adopts the going concern basis
of accounting in preparation of these financial statements.
2 Use of estimates and judgements
Preparing the financial statements requires management to make judgements,
estimates and assumptions that affect the application of accounting policies
and the reported amounts of assets and liabilities, income and expenses.
Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimates are revised and in any future periods affected.
Judgements that relate to estimation uncertainty
Inventories (Note 16)
The Group holds material inventories which are assessed for impairment at each
reporting date. The assessment of net realisable value requires consideration
of future cost to process and sell and spot market prices at year end less
applicable discounts. The estimates are based on market data and historical
trends.
Trade and other receivables (Note 17)
The Group holds trade and other receivable balances at the year end which are
assessed for recoverability at each reporting date. The assessment of
recoverability is based on estimates of future receipts taking into
consideration past receipt patterns and trends.
Judgements that do not relate to estimation uncertainty
Exploration and evaluation assets (Note 13)
The Group holds material exploration and evaluation assets and judgement is
applied in determining whether impairment indicators exist under the Group's
accounting policy. In determining that no impairment indicator exists
management have considered the Group's Feasibility Study on the asset, the
strategic plans for exploration and future development and the status of the
Subsoil Use Agreement. Judgement was required in determining that the
application for deferral of obligations under the Subsoil Use Agreement (Note
26) will be granted, given that approval is a procedural matter, and not
discretionary, under the Kazakhstan national Subsoil Use legislation.
Management anticipate such approvals being provided given their understanding
of the Kazakh market and plans for the asset. In the event that approval is
not received, the Group will consider the options available to it to effect
approval under the provisions of the Kazakhstan national Subsoil Use
legislation.
Additionally, judgement was required in determining that the Group's
exploration and evaluation asset should continue to be classified as such an
asset rather than transitioning to classification as a development asset.
Management has concluded that until the final investment decision for the
development of the asset has been determined by the Board then the asset
should continue to be classified as an exploration and evaluation asset.
3 Material accounting policies
The accounting policies set out below have been applied consistently to all
periods presented in these consolidated financial statements and have been
applied consistently by Group entities, except for the implementation of new
standards and interpretations.
(a) Basis of consolidation
(i) 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 financial statements of subsidiaries
are included in the consolidated financial statements from the date that
control commences until the date that control ceases. The accounting policies
of subsidiaries have been changed when necessary to align them with the
policies adopted by the Group.
(ii) Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses
arising from intra-group transactions, are eliminated in preparing the
consolidated financial statements. Unrealised losses are eliminated in the
same way as unrealised gains, but only to the extent that there is no evidence
of impairment.
(b) Foreign currency
(i) Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional
currencies of Group entities at exchange rates at the dates of the
transactions.
Monetary assets and liabilities denominated in foreign currencies at the
reporting date are translated to the functional currency at the exchange rate
at that date.
Non-monetary items in a foreign currency that are measured based on historical
cost are translated using the exchange rate at the date of the transaction.
Foreign currency differences arising in translation are recognised in profit
or loss.
(ii) Presentation currency
The assets and liabilities of foreign operations are translated to US$ at the
exchange rates prevailing at the reporting date. The income and expenses of
foreign operations are translated to US$ at the average exchange rate for the
period, which approximates the exchange rates at the dates of the
transactions. Where specific material transactions occur, such as impairments
or reversals of impairments, the daily exchange rate is applied when the
impact is material.
Foreign currency differences are recognised in other comprehensive income and
are presented within the foreign currency translation reserve in equity.
Foreign currency differences arising on intercompany loans, where the loans
are not planned to be repaid within the foreseeable future and form part of a
net investment, are recorded within other comprehensive income and are
presented within the foreign currency translation reserve in equity.
(c) Financial instruments
Financial assets and financial liabilities are recognised in the Group's
consolidated statement of financial position when the Group becomes a party to
the contractual provisions of the instrument.
(i) Financial assets
Financial assets are classified as either financial assets at amortised cost,
at fair value through other comprehensive income ("FVTOCI") or at FVTPL
depending upon the business model for managing the financial assets and the
nature of the contractual cash flow characteristics of the financial asset.
A loss allowance for expected credit losses is determined for all financial
assets, other than those at FVTPL, at the end of each reporting period. The
Group applies a simplified approach to measure the credit loss allowance for
trade receivables using the lifetime expected credit loss provision. The
lifetime expected credit loss is evaluated for each trade receivable taking
into account payment history, payments made subsequent to year end and prior
to reporting, past default experience and the impact of any other relevant and
current observable data. The Group applies a general approach on all other
receivables classified as financial assets. The general approach recognises
lifetime expected credit losses when there has been a significant increase in
credit risk since initial recognition.
The Group derecognises a financial asset when the contractual rights to the
cash flows from the asset expire, or when it transfers the financial asset and
substantially all the risks and rewards of ownership of the asset to another
party. The Group derecognises financial liabilities when the Group's
obligations are discharged, cancelled or have expired.
(ii) Customer contracts
Under some of its customer sale arrangements, the Group receives a provisional
payment upon satisfaction of its performance obligations based on the spot
price at that date, which occurs prior to the final price determination, with
the Group then subsequently receiving or paying the difference between the
final price and quantity and the provisional payment. As a result of the
pricing structure, the instrument is classified at FVTPL and measured at fair
value with changes in fair value recorded as other revenue.
(iii) Other receivables
Other receivables are accounted for at amortised cost. Other receivables do
not carry any interest and are stated at their nominal value as reduced by
appropriate expected credit loss allowances for estimated recoverable amounts
as the interest that would be recognised from discounting future cash payments
over the short payment period is not considered to be material.
(iv) Cash and cash equivalents
Cash and cash equivalents comprise cash balances in banks, call deposits and
highly liquid investments with maturities of three months or less from the
acquisition date that are subject to insignificant risk of changes in their
fair value, and petty cash.
(v) Financial liabilities
The Group has the following non-derivative financial liabilities: borrowings
and trade and other payables. Such financial liabilities are recognised
initially at fair value plus any directly attributable transaction costs.
Subsequent to initial recognition these financial liabilities are measured at
amortised cost using the effective interest method.
(vi) Long-term borrowings
After initial recognition, interest-bearing borrowings are subsequently
measured at amortised cost using the effective interest rate method. Gains and
losses are recognised in profit or loss. Amortised cost is calculated by
taking into account any discount or premium on acquisition and fees or costs
that are an integral part of the effective interest rate. The effective
interest rate amortisation is included as finance costs in the statement of
profit or loss.
(vii) Share capital
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of ordinary shares are recognised as a deduction
from equity, net of any tax effects.
(d) Property, plant and equipment
(i) Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated
depreciation and impairment losses. Land is measured at cost.
Cost includes expenditure that is directly attributable to the acquisition of
the asset. The cost of self-constructed assets includes the cost of materials
and direct labour, any other costs directly attributable to bringing the asset
into a working condition for its intended use, the costs of dismantling and
removing the items and restoring the site on which they are located.
When parts of an item of property, plant and equipment have different useful
lives, they are accounted for as separate items (major components) of
property, plant and equipment.
The gain or loss on disposal of an item of property, plant and equipment is
determined by comparing the proceeds from disposal with the carrying amount of
property, plant and equipment, and is recognised net within other income/other
expenses in profit or loss.
(ii) Subsequent costs
The cost of replacing part of an item of property, plant and equipment is
recognised in the carrying amount of the item if it is probable that the
future economic benefits embodied within the part will flow to the Group and
its cost can be measured reliably. The carrying amount of the replaced part is
derecognised. The costs of the day-to-day servicing of property, plant and
equipment are recognised in profit or loss as incurred.
(iii) Depreciation
Depreciation is based on the cost of an asset less its residual value.
Significant components of individual assets are assessed and if a component
has a useful life that is different from the remainder of that asset, that
component is depreciated separately.
Depreciation is recognised in profit or loss on a straight-line basis over the
estimated useful lives of each part of an item of property, plant and
equipment, since this most closely reflects the expected pattern of
consumption of the future economic benefits embodied in the asset. Leased
assets are depreciated over the shorter of the lease term and their useful
lives unless it is reasonably certain that the Group will obtain ownership by
the end of the lease term. Land is not depreciated.
The estimated useful lives for the current and prior periods are as follows:
· Buildings
10-50 years;
· Plant and equipment 4-20 years;
· Vehicles
4-7 years;
· Computers
3-6 years; and
·
Other
3-10 years.
Depreciation methods, useful lives and residual values are reviewed at each
financial year end and adjusted prospectively if appropriate.
Assets under construction are not depreciated and begin being depreciated once
they are ready and available for use in the manner intended by management.
(e) Exploration and evaluation assets
Exploration and evaluation expenditure for each area of interest once the
legal right to explore has been acquired, other than that acquired through a
purchase transaction, is carried forward as an asset provided that one of the
following conditions is met:
· Such costs are expected to be recouped through successful exploration
and development of the area of interest or, alternatively, by its sale; or
· Exploration and evaluation activities in the area of interest have
not yet reached a stage which permits a reasonable assessment of the existence
or otherwise of economically recoverable reserves, and active and significant
operations in relation to the area are continuing.
Exploration and evaluation costs are capitalised as incurred. Exploration and
evaluation assets are classified as tangible or intangible based on their
nature. Exploration expenditure which fails to meet at least one of the
conditions outlined above is written off. Administrative and general expenses
relating to exploration and evaluation activities are expensed as incurred.
The exploration and evaluation assets shall no longer be classified as such
once the final investment decision for the project related to those assets has
been determined by the Board.
Exploration and evaluation assets will be reclassified either as tangible or
intangible development assets and amortised on a unit-of-production method
based on proved reserves.
Exploration and evaluation assets are assessed for impairment when facts and
circumstances suggest that the carrying amount of exploration and evaluation
assets may exceed their recoverable amount, which is the case when: the period
of exploration license has expired and it is not expected to be renewed;
substantial expenditure on further exploration is not planned; exploration has
not led to the discovery of commercially viable reserves; or indications exist
that exploration and evaluation assets will not be recovered in full from
successful development or by sale.
Impairment losses recognised in prior periods are assessed at each reporting
date for any indications that the loss has decreased or no longer exists. An
impairment loss is reversed if there has been a change in the estimates used
to determine the recoverable amount.
(f) Intangible assets
(i) Intangible assets with finite useful lives
Intangible assets that are acquired by the Group, which have finite useful
lives, are measured at cost less accumulated amortisation and accumulated
impairment losses.
(ii) Subsequent expenditure
Subsequent expenditure is capitalised only when it increases the future
economic benefits embodied in the specific asset to which it relates. All
other expenditure, including expenditure on internally generated goodwill and
brands, is recognised in profit or loss as incurred.
(iii) Amortisation
Amortisation is calculated over the cost of the asset, or other amount
substituted for cost, less its residual value.
Amortisation is recognised in profit or loss on a straight-line basis over the
estimated useful lives of intangible assets from the date that they are
available for use since this most closely reflects the expected pattern of
consumption of future economic benefits embodied in the asset.
The estimated useful lives for the current and comparative periods are as
follows:
· Patents 10-20
years; and
· Mineral rights 20 years.
Amortisation methods, useful lives and residual values are reviewed at each
financial year end and adjusted if appropriate.
(g) Inventories
Inventories are measured at the lower of cost and net realisable value. The
cost of inventories is based on first-in first-out method, and includes
expenditure incurred in acquiring the inventories, production or conversion
costs and other costs incurred in bringing them to their existing location and
condition. In the case of manufactured inventories and work in progress, cost
includes an appropriate share of production overheads based on normal
operating capacity.
Net realisable value is the estimated selling price in the ordinary course of
business, less the estimated costs of completion and selling expenses.
(h) Impairment
(i) Non-financial assets
The carrying amounts of the Group's non-financial assets, such as exploration
and evaluation assets are reviewed at each reporting date to determine whether
there is any indication of impairment. With respect to exploration and
evaluation assets, impairment indicators would include expiration of
exploration rights at the Balasausqandiq deposit or no further budgeted or
planned exploration costs. If any such indication exists, then the asset's
recoverable amount is estimated. An impairment loss is recognised if the
carrying amount of an asset or its related cash-generating unit exceeds its
estimated recoverable amount.
The Group's corporate assets do not generate separate cash inflows. If there
is an indication that a corporate asset may be impaired, then the recoverable
amount is determined for the cash generating unit to which the corporate asset
belongs.
An impairment loss is recognised if the carrying amount of an asset or its
cash-generating unit exceeds its recoverable amount. Impairment losses are
recognised in profit or loss.
Impairment losses recognised in prior periods are assessed at each reporting
date for any indications that the loss has decreased or no longer exists. An
impairment loss is reversed if there has been a change in the estimates used
to determine the recoverable amount. An impairment loss is reversed only to
the extent that the asset's carrying amount does not exceed the carrying
amount that would have been determined, net of depreciation or amortisation,
if no impairment loss had been recognised.
(i) Employee benefits
(i) Defined contribution plans
The Group does not incur any expenses in relation to the provision of pensions
or other post-employment benefits to its employees. In accordance with
Kazakhstan state pension social insurance regulations, the Group withholds
pension contributions from Kazakhstan based employee salaries and transfers
them into State operated pension funds. Once the contributions have been paid,
the Group has no further pension obligations. Upon retirement of employees,
all pension payments are administered by the State pension funds directly.
(ii) Short-term benefits
Short-term employee benefit obligations are measured on an undiscounted basis
and are expensed as the related service is provided. A liability is recognised
for the amount expected to be paid under short-term cash bonus or
profit-sharing plans if the Group has a present legal or constructive
obligation to pay this amount as a result of past service provided by the
employee, and the obligation can be estimated reliably.
(j) Provisions
(i) Recognition and measurement
A provision is recognised if, as a result of a past event, the Group has a
present legal or constructive obligation that can be estimated reliably, and
it is probable that an outflow of economic benefits will be required to settle
the obligation. 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 the risks specific to the liability. The unwinding of
the discount is recognised as a finance cost.
(ii) Site restoration
In accordance with the Group's environmental policy and applicable legal
requirements, a provision for site restoration is recognised when the land is
disturbed as a result of pit development and plant decommissioning with a
corresponding increase in exploration and evaluation costs or property, plant
and equipment. Subsequent changes in the provision due to estimates are
recorded as a change in the relevant asset. The provision is discounted at a
risk-free rate with the costs incorporating risks relevant to the site
restoration and an unwinding charge is recognised within finance costs for the
unwinding of the discount.
(k) Revenue
(i) Goods sold
Revenue from customers comprises the sale of vanadium and molybdenum products
with other revenues from gravel and waste rock being non-significant. Revenue
from vanadium products is recognised at a point in time when the customer has
a legally binding obligation to settle under the terms of the contract and
when the performance obligations have been satisfied, which is once control of
the goods has transferred to the buyer at a designated delivery point at which
point possession, title and risk transfers.
The Group commonly receives a provisional payment at the date control passes
with reference to spot prices at that date. The final consideration is subject
to quantity / quality adjustments and final pricing based on market prices
determined after the product reaches its port of destination. The quantity /
quality adjustments represent a form of variable consideration and revenue is
constrained to record amounts for which it is highly probable no reversal will
be required. However, given the short period to delivery post year end the
final quantity / quality adjustments are known and revenue for the period is
adjusted to reflect the final quantity / quality occurring subsequent to year
end if material.
Changes in final consideration due to market prices is not determined to
qualify as variable consideration within the scope of the IFRS 15 "Revenue
from Customers". Changes in fair value as a result of market prices are
recorded within revenue as other revenue.
(l) Finance costs
Finance costs comprise interest expense on borrowings, unwinding of the
discount on provisions for historical costs and site restoration and foreign
currency losses. Borrowing costs that are not directly attributable to the
acquisition, construction or production of a qualifying asset are recognised
in profit or loss using the effective interest method.
Foreign currency gains and losses are reported on a net basis as either
finance income or finance cost depending on whether foreign currency movements
result in a net gain or loss, this includes exchange gains and losses that
arise on trade and other receivables and trade and other payables in foreign
currency.
(m) Income tax
Income tax expense comprises current and deferred tax. Current tax and
deferred tax are recognised in profit or loss except to the extent that they
relate to items recognised directly in equity or in other comprehensive
income.
Current tax is the expected tax payable or receivable on the taxable income or
loss for the year, using tax rates enacted or substantively enacted at the
reporting date, and any adjustment to tax payable in respect of previous
years. Deferred tax is recognised in respect of temporary differences between
the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes. Deferred tax is not
recognised for temporary differences on the initial recognition of assets or
liabilities in a transaction that is not a business combination and that
affects neither accounting nor taxable profit or loss and at the time of the
transaction, does not give rise to equal taxable and deductible temporary
differences. Deferred tax is measured at the tax rates that are expected to be
applied to the temporary differences when they reverse, based on the laws that
have been enacted or substantively enacted by the reporting date.
Deferred tax assets and liabilities are offset if there is a legally
enforceable right to offset current tax assets and liabilities, and they
relate to income taxes levied by the same tax authority on the same taxable
entity, or on different tax entities, but they intend to settle current tax
liabilities and assets on a net basis or their tax assets and liabilities will
be realised simultaneously.
A deferred tax asset is recognised for unused tax losses, tax credits and
deductible temporary differences, to the extent that it is probable that
future taxable profits will be available against which they can be utilised.
Deferred tax assets are reviewed at each reporting date and are reduced to the
extent that it is no longer probable that the related tax benefit will be
realised.
(n) Earnings per share
The Company presents basic and diluted earnings per share ("EPS") data for its
ordinary shares. Basic EPS is calculated by dividing the profit or loss
attributable to ordinary shareholders of the Company by the weighted average
number of ordinary shares outstanding during the period, adjusted for own
shares held. Diluted EPS is determined by adjusting the profit or loss
attributable to ordinary shareholders and the weighted average number of
ordinary shares outstanding, adjusted for own shares held, for the effects of
all dilutive potential ordinary shares.
(o) Segment reporting
The Group's operations are split into three segments based on the nature of
operations: processing, subsoil operations (being operations related to
exploration and mining) and corporate segment for the purposes of IFRS 8:
Operating Segments. The Group's assets are primarily concentrated in the
Republic of Kazakhstan and the Group's revenues are derived from operations
in, and connected with, the Republic of Kazakhstan.
(p) Government grants
Government grants are initially recognised as deferred income once the Group
has reasonable assurance that the grant will be received and that the Group
will be in a position to comply with any terms or conditions associated with
the grant.
Grants relating to the purchase of plant and equipment are recognised as
deferred income and they are credited to profit or loss on a straight-line
basis over the expected lives of the related assets.
Grants that compensate the Group for expenses incurred are recognised in
profit or loss on a systematic basis in the periods in which the expenses are
recognised.
(q) New and amended standards adopted
No new standards and interpretations issued by the IASB have had a significant
impact on the consolidated financial statements. The Company expects that IFRS
18 Presentation and Disclosure in Financial Statements, effective 1 January
2027, will likely impact the future presentation of the consolidated financial
statements.
4 Revenue
2025 2024
$000
$000
Sales of vanadium products 2,550 3,076
Sales of ferro-molybdenum 1,929 1,517
Sales of gravel and waste rock 45 -
Service revenue - 129
Total revenue from customers under IFRS 15 4,524 4,722
Other revenue - change in fair value of customer contracts 7 16
Total revenue 4,531 4,738
Vanadium and molybdenum products
Under certain sales contracts the single performance obligation is the
delivery of AMV to the designated delivery point at which point possession,
title and risk on the product transfers to the buyer. The buyer makes an
initial provisional payment based on volumes and quantities assessed by the
Company and market spot prices of V(2)O(5) for AMV at the date of shipment.
The final payment is received once the product has reached its final
destination with adjustments for quality / quantity and pricing. The final
pricing is based on the historical average market prices during a quotation
period based on the date the product reaches the port of destination and an
adjusting payment or receipt will be made to the revenue initially received.
Where the final payment for a shipment made prior to the end of an accounting
period has not been determined before the end of that period, the revenue is
recognised based on the spot price that prevails at the end of the accounting
period.
Other revenue related to the change in the fair value of amounts receivable
and payable under the sales contracts between the date of initial recognition
and the period end resulting from market prices are recorded as other revenue.
5 Cost of sales
2025 2024
$000
$000
Materials 4,361 4,729
Wages, salaries and related taxes 1,225 1,401
Depreciation 375 783
Electricity 136 139
Other 156 498
6,253 7,550
6 Other income
2025 2024
$000
$000
Currency conversion gain 11 5
Other (sales of equipment) 59 45
70 50
7 Administrative expenses
2025 2024
$000
$000
Wages, salaries and related taxes 1,781 1,688
Professional services 235 332
Taxes other than income tax 54 71
Listing and reorganisation expenses 498 163
Audit 170 124
Materials 36 48
Rent 64 37
Repairs and maintenance - 1
Depreciation and amortisation 66 70
Insurance 46 45
Staff training 15 69
Bank fees 18 18
Travel expenses 37 44
Utilities 4 4
Communication and information services 15 16
Other 526 292
3,565 3,022
8 Other expenses
2025 2024
$000
$000
Currency conversion loss 57 49
Write-down of inventory to net realisable value 205 71
Write-down of obsolete assets - 2
Write-down of prepayments 40 273
Share-based payment expense 34 22
Other 168 146
504 563
9 Personnel costs
2025 2024
$000
$000
Wages, salaries and related taxes 2,997 3,640
2,997 3,640
During 2025 personnel costs of US$694,000 (2024: US$1,401,000) have been charged to cost of sales, US$1,884,000 (2024: US$1,688,000) to administrative expenses and US$523,000 (2024: US$551,000) were charged to cost of inventories which were not yet sold as at the year end.
The average number of Group employees, excluding the Directors, during the
year was 176 (2024: 196).
10 Finance costs
2025 2024
$000
$000
Net foreign exchange costs 558 337
Unwinding of discount on bonds Q 3 302
Interest expense on financial liabilities (bonds) 1,996 1,340
Net finance costs 2,557 1,979
11 Income tax
The Group's applicable tax rates in 2025 are an income tax rate of 20% for
Kazakhstan registered subsidiaries (2024: 20%) and 0% (2024: 0%) for Guernsey
registered companies. The Kazakh tax rate has been applied below as this is
most reflective of the Group's trading operations and tax profile.
During the years ended 31 December 2025 and 2024 the Group incurred tax losses
and, therefore, did not recognise any current income tax expense.
Unrecognised deferred tax assets are described in Note 15.
Reconciliation of effective tax rate:
2025 2024
$000 % $000 %
Loss before tax (Group) (8,415) 100 (9,429) 100
Income tax at the applicable tax rate (1,683) 20 (1,886) 20
Effect of unrecognised deferred tax assets / (losses carried forward) 2,424 (31) 822 (7)
Net non-deductible expenses/non-taxable income or loss (741) 11 1,064 (13)
- - - -
12 Property, plant and equipment
Land and buildings Plant and equipment Vehicles Computers Other Construction in progress Total
$000
$000
$000
$000
$000
$000
$000
Cost
Balance at 1 January 2024 5,015 3,822 522 49 256 242 9,906
Additions - 64 - 2 50 88 204
Transfers 62 186 - - - (248) -
Disposals - (104) (2) (3) (3) - (112)
Foreign currency translation difference (667) (520) (68) (6) (36) (16) (1,313)
Balance at 31 December 2024 4,410 3,448 452 42 267 66 8,685
Balance at 1 January 2025 4,410 3,448 452 42 267 66 8,685
Additions 28 250 - - 3 - 281
Disposals - (126) - (10) (22) - (158)
Foreign currency translation difference 185 151 18 1 9 2 366
Balance at 31 December 2025 4,623 3,723 470 33 257 68 9,174
Depreciation and impairment
Balance at 1 January 2024 851 2,621 361 33 89 - 3,955
Depreciation for the period 432 438 33 6 52 - 961
Impairment charge - 954 - - - - 954
Disposals - (102) (2) (3) (2) - (109)
Foreign currency translation difference (75) (463) (51) (5) (17) - (611)
Balance at 31 December 2024 1,208 3,448 341 31 122 - 5,150
Balance at 1 January 2025 1,208 3,448 341 31 122 - 5,150
Depreciation for the period 378 28 26 4 19 - 455
Disposals - (126) - (10) (4) - (140)
Foreign currency translation difference 61 13 15 1 14 - 104
Balance at 31 December 2025 1,647 3,363 382 26 151 - 5,569
Carrying amounts
At 1 January 2024 4,164 1,201 161 16 167 242 5,951
At 31 December 2024 3,202 - 111 11 145 66 3,535
At 31 December 2025 2,976 360 88 7 106 68 3,605
During 2025 a depreciation expense of US$375,000 (2024: US$783,000) has been
charged to cost of sales, excluding cost of finished goods that were not sold
at year end, US$66,000 (2024: US$70,000) to administrative expenses, and
US$94,000 has been charged to cost of finished goods that were not sold at the
year end (2024: US$189,000).
Impairment
On 2 December 2024, the Company announced that save where profitable
concentrates could be sourced and treated, the Company's existing plant would
be switched to research and development activities to complete and optimise
the ongoing feasibility study, including the development of markets for the
Company's carbon black substitute product.
IAS 36 stipulates that an entity shall assess at the end of each reporting
period whether there is any indication that an asset may be impaired. If any
such indication exists, the entity shall estimate the recoverable amount of
the asset.
With reference to IAS 36, during 2024 the Directors determined that the plant
and equipment elements of the Company's property, plant and equipment i.e.
those assets attributable to the existing operation, should be impaired in
full until such time that the existing operation reverted back to operating as
a full time concentrate processing plant or other cash generating commercial
activities. During 2025 the existing plant continued to undertake R&D
activities and accordingly the Directors have determined that the impairment
charge recognised in 2024 (US$954,000) should not be reversed during
2025.
13 Exploration and evaluation assets
The Group's exploration and evaluation assets relate to the Balasausqandiq
deposit. During the year, the Group capitalised the cost of technical design,
sample assaying and project management costs, all relating to the Company's
Feasibility Study. As at 31 December 2025 the carrying value of exploration
and evaluation assets was US$10.5m (2024: US$8.0m).
2025 2024
$000
$000
Balance at 1 January 7,999 7,145
Additions (Stage 1 feasibility study) 3,387 1,619
Foreign currency translation difference (906) (765)
Balance at 31 December 10,480 7,999
14 Intangible assets
Mineral rights Patents Computer software Total
$000
$000
$000
$000
Cost
Balance at 1 January 2024 84 34 3 121
Additions - 2 1 3
Foreign currency translation difference (11) (5) (1) (17)
Balance at 31 December 2024 73 31 3 107
Balance at 1 January 2025 73 31 3 107
Foreign currency translation difference 3 2 - 5
Balance at 31 December 2025 76 33 3 112
Amortisation
Balance at 1 January 2024 84 14 3 101
Amortisation for the year - 1 - 1
Foreign currency translation difference (11) (2) - (13)
Balance at 31 December 2024 73 13 3 89
Balance at 1 January 2025 73 13 3 89
Amortisation for the year - 1 - 1
Foreign currency translation difference 3 1 - 4
Balance at 31 December 2025 76 15 3 94
Carrying amounts
At 1 January 2024 - 20 - 20
At 31 December 2024 - 18 - 18
At 31 December 2025 - 18 - 18
During 2025 and 2024 the amortisation of intangible assets was charged to
administrative expenses.
15 Deferred tax assets and liabilities
Unrecognised deferred tax assets
2025 2024
$000 $000
Temporary deductible differences (203) 599
Tax losses carried forward 30,380 23,791
Unrecognised tax deferred tax assets (30,177) (24,390)
- -
Deferred tax assets have not been recognised in respect of these items given
the taxable loss in the year and because the Kazakhstan processing operations
benefit from a tax incentive agreement which reduces the tax payable to nil
and it is, therefore, uncertain that future taxable profit will be available
against which the Group can utilise the benefits therefrom. The tax incentive
agreement is effective for ten years starting from 2018.
The increase in carried forward tax losses comprises the tax loss for the period and the effect of resubmissions of previous tax filings which contributed to an increase in tax losses.
Temporary deductible differences mostly relate to property, plant and equipment. Unutilised tax losses expire after 10 years from the year of origination.
Expiry dates of unrecognised deferred tax assets in respect of tax losses carried forward at 31 December 2025 are presented below:
Expiry year $000
2026 708
2027 424
2028 455
2029 1,898
2030 2,991
2031 1,392
2032 3,489
2033 2,695
2034 10,137
2035 5,806
29,995
Unrecognised deferred tax assets above are calculated based on the Kazakh tax rate of 20%.
16 Inventories
2025 2024
$000
$000
Raw materials and consumables 1,060 516
Finished goods 230 287
Work in progress 28 71
1,318 874
During 2025 inventories expensed to profit and loss amounted to US$4.4m (2024:
US$4.7m).
17 Trade and other receivables
Current 2025 2024
$000 $000
Trade receivables from third parties 264 319
Due from employees 76 -
VAT receivable 1,040 781
Other receivables - 195
1,380 1,295
Expected credit loss provision for receivables (73) (58)
1,307 1,237
The expected credit loss provision for receivables relates to credit impaired
receivables which are in default and the Group considers the probability of
collection to be remote given the age of the receivable and default status.
18 Prepayments
2025 2024
$000
$000
Non-current
Prepayment for E&EA - 964
Other prepayments 1 7
1 971
Current
Prepayments for goods and services 931 853
931 853
19 Cash and cash equivalents
2025 2024
$000
$000
Cash at current bank accounts 1,613 209
Cash at bank deposits 70 3,567
Petty cash 1 1
Cash and cash equivalents 1,684 3,777
20 Equity
(a) Share capital
Number of shares unless otherwise
stated
Ordinary shares
31 December 2025 31 December 2024
Par value - -
Outstanding at beginning of year 483,222,238 483,222,238
Shares issued 75,907,391 -
Outstanding at end of year 559,129,629 483,222,238
Reconciliation of shares
issued
Date of admission Number of shares issued Cash proceeds (US$) Non cash benefit (US$)
6 January 2025 1,764,983 10,000 208,377
12 March 2025 8,657,115 - 872,553
10 July 2025 16,666,667 1,310,276 54,188
11 November 2025 20,638,879 1,329,181 289,692
10 December 2025 28,179,747 1,731,499 336,359
Total 75,907,391 4,380,956 1,761,169
Ordinary shares
All shares rank equally. The holders of ordinary shares are entitled to
receive dividends as declared from time to time and are entitled to one vote
per share at meetings of the Company.
Reserves
Share capital: Value of shares issued less costs of issuance.
Additional paid in capital: Amounts due to shareholders which were waived.
Share-based payment: Share options issued.
Foreign currency translation reserve: Foreign currency differences on
retranslation of results from functional to presentational currency and
foreign exchange movements on intercompany balances considered to represent
net investments which are considered as permanent equity.
Accumulated losses: Cumulative net losses.
(b) Share options
Summary
All share options are issued under the Company's share option plan. The share
option plan is a scheme that entitles key management personnel to purchase
shares in the Company at the market price of the shares at the date of grant.
The following table summarises the activities and status of the Company's
share option plan during the year and at the year end.
2025 share options
Outstanding at the beginning of the year 1,000,000
Granted during the year 1,000,000
Exercised during the year -
Expired / cancelled during the year -
Outstanding at the year end 2,000,000
Share options in force at the year end were as follows:
Grant date Number of options Exercise date Exercise price per share (US$) Expiry date
29 June 2022 250,000 29 June 2025 0.162 29 June 2027
22 September 2022 250,000 22 September 2025 0.151 22 September 2027
12 September 2023 500,000 12 September 2026 0.116 12 September 2028
2 May 2025 1,000,000 2 May 2028 0.088 2 May 2030
2,000,000
No options that vested during the year were exercised or forfeited.
Share-based payment reserve
The following table summarises the changes in the Company's share-based
payment reserve during the year:
Share-based payment reserve (US$)
At 1 January 2025 42,210
Exercise of share options -
Issue of options -
Payment expense recognised for the year 34,439
At 31 December 2025 76,649
Share-based payment expense
During the year, the Company recognised US$34,439 (2024: US$22,447) of
share-based payment expense. The fair value of the share-based compensation
was estimated on the dates of grant using the Black-Scholes option pricing
model with the following assumptions:
Grant date 2 May 2025
Share price at grant date (US$) 0.0829
Exercise price (US$) 0.0829
Expected volatility* 197.3%
Expected life (years) 3
Expected dividend yield (US$) -
Risk-free interest rate** 3.995%
Fair value per option (US$) 0.076
*expected volatility is derived from the Company's historical share price
volatility
**the risk-free rate of return is based on UK government gilts for a term
consistent with the option life
All share options granted during the year have non-market vesting conditions
that were not considered in measuring fair value.
(c) Dividends
No dividends were declared for the year ended 31 December 2025 (2024: US$
nil).
(d) Loss per share (basic and diluted)
The calculation of the basic and diluted loss per share has been based on the
loss attributable to ordinary shareholders and weighted-average number of
ordinary shares outstanding. There are no convertible bonds and convertible
preferred stock, so basic and diluted losses are equal.
(i) Loss attributable to ordinary shareholders (basic and diluted)
2025 2024
$000
$000
Loss for the year, attributable to owners of the Company (8,415) (9,429)
Loss attributable to ordinary shareholders (8,415) (9,429)
(ii) Weighted-average number of ordinary shares (basic and diluted)
Shares 2025 2024
Issued ordinary shares at 1 January (after subdivision) 483,222,238 483,222,238
Effect of shares issued (weighted) 22,090,787 -
Weighted-average number of ordinary shares at 505,313,025 483,222,238
31 December
Loss per share of common stock attributable to the Company (basic and diluted) (0.017) (0.020)
(US$)
21 Loans and borrowings
In 2023 the Company launched the US$20m Bond Programme in Kazakhstan and has
issued four tranches of unsecured corporate bonds under the Bond Programme
with effective interest rates of 9.2%, 10.4%, 11% and 13.5% respectively.
With respect to the first tranche of bonds, investors have subscribed for a
total of 1,500 bonds with a nominal value of US$2,000 each. These bonds are
unsecured, have a three-year term and bear a coupon rate of 9%, paid
twice-yearly. The bonds have been listed on AIX with ISIN number KZX000001474.
This tranche reaches maturity on 27 July 2026.
With respect to the second tranche of bonds, investors have subscribed for a
total of 50,000 bonds with a nominal value of US$100 each. These bonds are
unsecured, have a three-year term and bear a coupon rate of 10%, paid
quarterly. The bonds have been listed on AIX with ISIN number KZX000001623.
This tranche reaches maturity on 19 September 2026.
With respect to the third tranche of bonds, investors have subscribed for a
total of 50,000 bonds with a nominal value of US$100 each. These bonds are
unsecured, have a two and a half year term and bear a coupon rate of 11%, paid
quarterly. The bonds have been listed on AIX with ISIN number KZX000001946.
This tranche reaches maturity on 30 July 2026.
With respect to the fourth tranche of bonds, investors have subscribed for a
total of 50,000 bonds with a nominal value of US$100 each. These bonds are
unsecured, have a three-year term with an option to redeem 12 months early and
bear a coupon rate of 13.5%, paid quarterly. The bonds have been listed on AIX
with ISIN number KZX000003348. This tranche reaches maturity on 29 November
2027 with an option for early redemption on 29 November 2026.
2025 2024
$000
$000
Non-current liabilities 5,000 17,134
Bonds payable
5,000 17,134
Current liabilities 12,563 -
Bonds payable
Interest payable 309 432
12,872 432
During the year, no bonds came to maturity or were repaid to bondholders
(2024: US$ nil)
The terms and conditions of outstanding the bonds (which are not subject to
any covenants) as at 31 December 2025 were as follows:
USD Currency Effective interest rate Nominal amount Actual Coupon rate Coupon Interest
amount
paid
$000
$000
Bonds payable USD 9.2% 3,000 2,898 9% 270 271
Bonds payable USD 10.4% 5,000 4,874 10% 625 500
Bonds payable USD 11.0% 5,000 5,003 11% 550 550
Bonds payable USD 13.5% 5,000 5,000 13.5% 675 675
18,000 17,775 2,120 1,996
Non-cash transactions from financing activities are shown in the
reconciliation of liabilities from financing transactions.
Loans and borrowings 2025 2024
$000 $000
At 1 January 17,566 7,527
Cash flows:
-Interest paid (2,120) (1,041)
-Repayment of loans and borrowings - -
-Proceeds from loans and borrowings - 10,003
Total 15,446 16,489
Non-cash flows
- Interest accruing in period 1,996 1,340
- Bond discount / premium 430 (263)
At 31 December 17,872 17,566
22 Provisions
2025 2024
$000
$000
Balance at 1 January 24 31
Change in estimate 4 (3)
Foreign currency translation difference 1 (4)
Balance at 31 December 29 24
Non-current 29 24
29 24
Site restoration
A provision has been recognised in respect of the Group's obligation to
rectify environmental issues at the Balasausqandiq deposit in the Kyzylorda
region.
In accordance with Kazakhstan environmental legislation, any land contaminated
by the Group in the Kyzylorda region must be restored before the end of 2043.
The provision was estimated by considering the risks related to the amount and
timing of restoration costs based on the known level of damage. Because of the
long-term nature of the liability, the main uncertainty in estimating the
provision is the costs that will be incurred. In particular, the Group has
assumed that the site will be restored using technology and materials that are
available currently. A fund to cover this liability will be collected via
annual statutory contributions to the special liquidation fund at the rate of
1% of mining expenses as stipulated in the Subsoil Use Agreement. Based on the
working program which forms part of the Subsoil Use Agreement the total amount
is expected to reach KZT 675m or c. US$1,290,000. The present value of
restoration costs was determined by discounting the estimated restoration cost
using a Kazakh risk-free rate (15%) for the respective period, and average
inflation for the 2024 was 8.6%. The estimated period for discounting was 19
years (2024: 20 years). Environmental legislation in Kazakhstan continues to
evolve and it is difficult to determine the exact standards required by the
current legislation in restoring sites such as this. Generally, the standard
of restoration is determined based on discussions with the Kazakh government
at the time that restoration commences.
23 Trade and other payables
2025 2024
$000
$000
Trade payables 2,910 1,273
Debt to employees 189 188
Other taxes 186 310
Advances received 801 72
4,086 1,843
24 Deferred income
2025 2024
$000
$000
Government grants - 102
- 102
During 2023, the Group was awarded grant funding by the Kazakhstan National Scientific Council for the development of technology for the production of mixed vanadium oxides for use in VRFBs.
25 Financial instruments and risk management
(a) Overview
The Group has exposure to the following risks from its use of financial
instruments:
· credit risk;
· liquidity risk; and
· market risk.
This note presents information about the Group's exposure to each of the above
risks, the Group's objectives, policies and processes for measuring and
managing risk, and the Group's management of capital. Further quantitative
disclosures are included throughout these consolidated financial statements.
Risk management framework
The Chief Executive has overall responsibility for the establishment and
oversight of the Group's risk management framework.
The Group's risk management policies are established to identify and analyse
the risks faced by the Group, to set appropriate risk limits and controls, and
to monitor risks and adherence to limits. Risk management policies and systems
are reviewed to reflect changes in market conditions and the Group's
activities. The Group aims to develop a disciplined and constructive control
environment in which all employees understand their roles and obligations.
(b) Credit risk
Credit risk is the risk of financial loss to the Group if a customer or
counterparty to a financial instrument fails to meet its contractual
obligations and arises principally from the Group's receivables from
customers.
(i) Exposure to credit risk
The carrying amount of financial assets represents the maximum credit
exposure. The maximum exposure to credit risk at the reporting date was:
Carrying amount
2025 2024
$000
$000
Trade and other receivables, excluding amounts due from employees and VAT 264 319
receivable
Cash and cash equivalents 1,683 3,777
1,947 4,096
The maximum exposure to credit risk for trade and other receivables at the
reporting date by geographic region was:
Carrying amount
2025 2024
$000
$000
Kazakhstan 264 319
264 319
The maximum exposure to credit risk for trade and other receivables at the
reporting date by type of customer was:
Carrying amount
2025 2024
$000
$000
Trade receivables:
Wholesale customers 264 319
1 264 319
The ageing of trade and other receivables at the reporting date was:
Gross Impairment Net Gross Impairment Net
2025 2025 2025 2024 2024 2024
$000
$000
$000
$000
$000
$000
Not past due 264 - 264 319 - 319
Past due more than 180 days 73 (73) - 58 (58) -
337 (73) 264 377 (58) 319
The movement in the allowance for expected credit losses in respect of other
receivables during the year was as follows:
2025 2024
$000
$000
Balance at beginning of the year 58 47
Expected gain change 15 11
Balance at end of the year 73 58
Amounts due from customers at the year end have been mainly subsequently
collected in 2026, except for credit impaired amounts. No additional expected
credit loss provision has been applied.
(ii) Cash and cash equivalents
As at 31 December 2025 the Group held cash of US$1.68m (2024: US$3.78m), of
which balances of US$1.68m (2024: US$3.78m) represent its maximum credit
exposure on these assets (which excludes petty cash). Of these balances 88%
(2024: 97%) is held in banks with credit ratings of A+ to AA and 12% in banks
with credit ratings of B to BB (2024: 3%). Credit ratings are provided by the
rating agency FitchRatings.
(c) Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting
the obligations associated with its financial liabilities that are settled by
delivering cash or another financial asset. The Group's approach to managing
liquidity is to ensure, as far as possible, that it will always have
sufficient liquidity to meet its liabilities when due, under both normal and
stressed conditions, without incurring unacceptable losses or risking damage
to the Group's reputation.
The following are the contractual maturities of financial liabilities. It is
not expected that the cash flows included in the maturity analysis could occur
significantly earlier, or at significantly different amounts:
2025
Carrying Contractual cash flows On demand 0-6 mths 6 months - 1 year 1-3 years
amount
$000
$000
$000
$000
$000
$000
Financial liabilities
Trade and other payables 2,910 2,910 - 2,910 - -
Loans and borrowings 17,872 17,872 - 863 13,735 3,274
20,782 20,782 - 3,773 13,735 3,274
2024
Carrying Contractual cash flows On demand 0-6 mths 6 months - 1 year 1-3 years
amount
$000
$000
$000
$000
$000
$000
Financial liabilities
Trade and other payables 1,273 1,273 - 1,273 - -
Loans and borrowings 17,566 21,970 - 1,430 998 19,542
18,839 23,243 - 2,703 998 19,542
(d) Market risk
Market risk is the risk that changes in market prices, such as foreign
exchange rates, interest rates and equity prices will affect the Group's
income or the value of its holdings of financial instruments. The objective of
market risk management is to manage and control market risk exposures within
acceptable parameters, while optimising the return.
In order to ascertain market risk the Group analyses the impact of different
levels of vanadium pentoxide and molybdenum prices on profitability as well as
closely monitoring the market conditions for other leading international
organisations operating in the vanadium industry.
(i) Currency risk
The Group is exposed to currency risk on sales, purchases and borrowings that
are denominated in a currency other than the respective functional currency of
Group entities.
In respect of monetary assets and liabilities denominated in foreign
currencies, the Group ensures that its net exposure is kept to an acceptable
level by buying or selling foreign currencies at spot rates when necessary to
address short term imbalances.
Exposure to currency risk
The Group's exposure to foreign currency risk was as follows based on notional
amounts:
2025 US$-denominated GBP- EUR- RUB- KZT-
denominated
denominated
denominated
denominated
2025 2025 2025 2025 2025
$000
$000
$000
$000
$000
Cash and cash equivalents 1 1,480 - - 203
Trade and other payables - - - - (4,085)
Loans and borrowings (17,872) - - - -
Net exposure (17,871) 1,480 - - (3,882)
2024 US$-denominated GBP- EUR- RUB- KZT-
denominated
denominated
denominated
denominated
2024 2024 2024 2024 2024
$000
$000
$000
$000
$000
Cash and cash equivalents 3,500 142 - 5 130
Trade and other payables (959) - (98) (43) (895)
Loans and borrowings (17,566) - - - -
Net exposure (15,025) 142 (98) (38) (765)
The following significant exchange rates applied during the year:
in US$ Average rate Reporting date spot rate
2025 2024 2025 2024
KZT 1 0.0019 0.0021 0.0020 0.0019
GBP 1 1.3184 1.2784 1.3518 1.2589
RUB 1 0.0120 0.0108 0.0128 0.0095
EUR 1 1.1304 1.0818 1.1773 1.0438
(ii) Interest rate risk
Changes in interest rates do not significantly impact the Group's position as
at 31 December 2025. Management does not have a formal policy of determining
how much of the Group's exposure should be to fixed or variable rates.
However, at the time of raising new loans or borrowings management uses its
judgment to decide whether it believes that a fixed or variable rate would be
more favourable to the Group over the expected period until maturity.
Bond interest rates are fixed by agreement.
Changes in interest rates at the reporting date would not significantly affect
profit or loss.
(iii) Other risks
IAS 1 requires the disclosure of the risks and measures to meet the risks
related to external capital requirements.
The Group manages its capital to ensure that entities in the Group will be
able to continue as going concerns while maximising returns to shareholders
through the optimisation of the debt and equity balance. The Group's overall
strategy remains unchanged from 2023.
The capital structure of the Group consists of net debt (see Note 21) and the
equity of the Group (see Note 20).
The Group is not subject to any externally imposed capital requirements.
The Group reviews the capital structure on a regular basis giving
consideration to the cost of capital and the risks associated with each class
of capital.
Debt is defined as long- and short-term borrowings as detailed in Note 21.
Equity includes all capital and reserves of the Group that are managed as
capital.
(e) Fair values versus carrying amounts
Management believes that the fair value of the Group's financial assets and
liabilities approximates their carrying amounts.
Categories of financial instruments
2025 2024
$000 $000
Financial assets (includes cash)
Trade and other receivables 264 319
Cash at amortised cost 1,683 3,777
1,947 4,096
Financial liabilities - measured at amortised cost
Trade and other payables at amortised cost 2,910 1,273
Loans and borrowings at amortised cost 17,872 17,566
20,782 18,839
The basis for determining fair values is disclosed below.
Financial instruments measured at fair value are presented by level within
which the fair value measurement is categorised. The levels of fair value
measurement are determined as following:
· Level 1: quoted prices (unadjusted) in active markets for identical
assets or liabilities.
· Level 2: inputs other than quoted prices included in Level 1 that are
observable for the asset or liability, either directly (i.e. as prices) or
indirectly (i.e. derived from prices).
· Level 3: inputs for the asset or liability that are not based on
observable market data (unobservable inputs).
The Group's contract receivables and liabilities at the year end are recorded
at fair value through profit and loss and fair valued based on the estimated
forward prices that will apply under the terms of the sales contracts upon the
product reaching the port of destination. The trade receivable fair value
reflects amounts receivable from the customer adjusted for forward prices
expected to be realised.
In the absence of observable forward prices the forward price is estimated
using a valuation methodology which is based on vanadium spot prices at 31
December 2025 adjusted for the discount for AMV, time value of money and carry
costs. Given the short period to final pricing the time value of money and
carry costs are not significant and the forward price materially approximates
the spot price at year end with the adjustment to reflect the difference
between vanadium pentoxide prices and AMV. Any fair value of trade receivables
and payables at FVTPL are categorised at Level 3. During the year there were
no transfers between levels of fair value hierarchy.
26 Commitments
Under the conditions of the Subsoil Use Agreement under which the Group has
the right to develop and exploit the Balasausqandiq deposit, the Group is
obliged to undertake a minimum level of mining and to make certain levels of
expenditure on the training of Kazakh employees, research and development and
the development of the Shieli region. There is also an obligation to set aside
funds to provide for the eventual costs of mine closure and or site
reclamation.
The current obligations of the Group under the Subsoil Use Agreement, as
modified by Addendum 4, are as follows:
· Minimum quantity of ore to be mined:
Year Tonnes
2023 567,700
2024 788,100
2025 1,102,300
2026 1,102,300
2027 1,102,300
2028 1,102,300
2029 onwards 1,102,300
· Training costs should be equal to 1% of the Group's capital
expenditures on subsoil activities. Costs in 2025: US$15,000 (2024: US$60,000)
· Research and development should be equal to 1% of the Group's income
from subsoil activities. Costs in 2025: US$ nil (2024: US$15,000)
· The addition to the liquidation fund should be equal to 1% of the
Group's costs of mining ore. Costs in 2025: US$ nil (2024: US$12,000)
· Expenditure on social development of the Shieli region should be
equal to 1.5% of the Group's costs of mining ore. Costs in 2025: US$ nil
(2024: US$18,500).
All obligations of the Subsoil Use Agreement have been complied with except
for certain exploration work programme requirements, specifically the volume
of ore to be mined.
The Group has requested formal amendments to the Subsoil Use Agreement that
relate to the transfer of the mining of certain levels of ore to future years.
As a result, and if the amendments are granted, the obligation for mining in
2023 and 2024 will be equal to 16,500 tonnes of ore, 2025 to 2026 will be
equal to 33,100 tonnes of ore, 2027 will be equal to 555,100 tonnes, 2028 will
be equal to 1,102,300 tonnes and starting from 2029 1,653,400 tonnes of ore,
per year. The request is in the process of review with the relevant
authorities of the Kazakh government.
27 Contingencies
(a) Insurance
The insurance industry in the Kazakhstan is in a developing state and many
forms of insurance protection common in other parts of the world are not yet
generally or economically available. The Group does not have full coverage for
its plant facilities, business interruption or third party liability in
respect of property or environmental damage arising from accidents on Group
property or relating to Group operations. There is a risk that the loss or
destruction of certain assets could have a material adverse effect on the
Group's operations and financial position.
(b) Taxation
The taxation system in Kazakhstan is relatively new and is characterised by
frequent changes in legislation, official pronouncements and court decisions
which are often unclear, contradictory and subject to varying interpretations
by different tax authorities. Taxes are subject to review and investigation by
various levels of authorities which have the authority to impose severe fines,
penalties and interest charges. A tax year generally remains open for review
by the tax authorities for five subsequent calendar years but under certain
circumstances a tax year may remain open longer.
These circumstances may create tax risks in Kazakhstan that are more
significant than in other countries. Management believes that it has provided
adequately for tax liabilities based on its interpretations of applicable tax
legislation, official pronouncements and court decisions. However, the
interpretations of the relevant authorities could differ and the effect on
these consolidated financial statements, if the authorities were successful in
enforcing their interpretations, could be significant.
There are no tax claims or disputes at present.
28 Segment reporting
The Group's assets are primarily concentrated in the Republic of Kazakhstan
and the Group's revenues are derived from operations in, and connected with,
the Republic of Kazakhstan.
2025
Processing Subsoil Corporate Total
$000
$000
$000
$000
Revenue 4,531 - - 4,531
Cost of sales (6,253) - - (6,253)
Other income 69 - 1 70
Administrative expenses (1,078) (28) (2,459) (3,565)
Other expenses (470) - (34) (504)
Distribution expenses (137) - - (137)
Finance costs (525) - (2,032) (2,557)
Loss before tax (3,863) (28) (4,524) (8,415)
2024
Processing Subsoil Corporate Total
$000
$000
$000
$000
Revenue 4,738 - - 4,738
Cost of sales (7,550) - - (7,550)
Other income 49 - 1 50
Administrative expenses (1,132) (40) (1,850) (3,022)
Impairment charge (954) - - (954)
Other expenses (541) - (22) (563)
Distribution expenses (149) - - (149)
Finance costs 394 - (2,373) (1,979)
Loss before tax (5,145) (40) (4,244) (9,429)
Included in revenue arising from processing are revenues of US$4,420,000
(2024: US$4,500,000) which arose from sales to four of the Group's largest
customers. No other single customer contributes 10 per cent or more to the
Group's revenue.
All of the Group's assets are attributable to the Group's processing
operations.
Sales to the Group's largest customers in 2024 were as follows:
Customer
A
US$0.3m (8%) (2024: US$1.5m (31%))
Customer B
US$1.9m (52%) (2024: US$1.9m (40%))
Customer
C
US$0.8m (19%) (2024: US$ nil (0%))
Customer
D
US$0.8m (19%) (2024: US0.7m (14%))
29 Related party transactions
Transactions with management and close family members
Management remuneration
Key management personnel received the following remuneration during the year,
which is included in personnel costs (see Note 9):
2025 2024
$000
$000
Wages, salaries and related taxes 1,074 1,053
The amount of wages and salaries outstanding at 31 December 2025 is equal to
US$ nil (2024: US$16,400).
30 Subsequent events
On 10 March 2026, the Company issued 28,621,701 shares raising gross proceeds
of £1,574,193.55.
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