REG - Great Southrn.Copper - Full Year Results and Publication of Annual Report
31/07/2023 15:45
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RNS Number : 7777H Great Southern Copper PLC 31 July 2023
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
THE MARKET ABUSE REGULATION (EU) NO 596/2014 AS IT FORMS PART OF UK DOMESTIC
LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL) ACT 2018, AS AMENDED, ("MAR") AND
IS DISCLOSED IN ACCORDANCE WITH THE COMPANY'S OBLIGATIONS UNDER ARTICLE 17 OF
MAR. ON PUBLICATION OF THIS ANNOUNCEMENT, THIS INFORMATION IS CONSIDERED TO
BE IN THE PUBLIC DOMAIN.
31 July 2023
Great Southern Copper plc
("Great Southern Copper ", the "Group" or the "Company")
Full Year Results and Publication of Annual Report
Great Southern Copper plc (LSE: GSCU), the company focused on copper-gold
exploration in Chile, announces its results for the year ended 31 March 2023.
HIGHLIGHTS
Especularita Project
· Commenced exploration campaign at Especularita, targeting
porphyry-epithermal style copper-gold ("Cu-Au") mineralisation, and identified
targets for prospect-scale exploration
· Announced final assay results from the trial rock float sampling
programme at the Victoria prospect, demonstrating potential for high-grade
Cu-Au deposits
· Exploration concession area increased with 5,704 hectares ("ha")
added at Especularita
Especularita post period
· On 3 April, announced results from mapping and sampling at the
Victoria prospect, showing assay grades in rock chips of up to 6.9% Cu and
1.85g/t Au
· On 11 July, announced high-grade Cu-Au rock chip samples up to 5.97%
Cu and 13.7g/t Au from the Teresita prospect
· On 18 July, announced high-grade copper assay results from rock chip
samples up to 3.39% Cu from Abundante prospect
· Scout drilling programmes planned for the Teresita and Victoria
prospects
San Lorenzo Project
· Announced ground magnetic data that identified multiple shallow and
buried targets for follow-up exploration
· Completed reconnaissance diamond drilling, which targeted four
individual prospect zones
· Scout drilling results at the Cerro Chinchillon prospect confirm the
discovery of a large intrusive-related copper-gold mineralised system
· Exploration concession area increased, with 2,193 ha added at San
Lorenzo
Corporate
· On 15 May, secured £1m in funding to finance on-going exploration
programmes in Chile through a placing and subscription and a convertible loan
facility
· On 13 July, appointed Martin Page as Chief Financial Officer and
member of the board
Sam Garrett, Chief Executive Officer of Great Southern Copper, said: "This has
been a strong year for GSC as we have made significant progress across both
our projects in Chile. The discovery of an intrusive-related copper-gold
system at San Lorenzo, as well as high-grade copper-gold prospects at
Especularita, has established a strong platform for the Company to build from
in the future.
"The Green transition has underscored the importance of key strategic minerals
such as copper, and this continuing trend is expected to bolster demand,
particularly in light of the supply shortages foreshadowing this transition.
Our exploration work over the past year has highlighted the significant
potential of our projects, and the Board looks forward to advancing with
exploration campaigns to further understand the numerous promising targets
identified at our two projects."
Annual Report and Accounts
The Company will shortly be publishing its Annual Report and Accounts. It will
be made available on the Company's website at https://gscplc.com
(https://gscplc.com) and posted to shareholders.
Enquiries:
Great Southern Copper plc
Sam Garrett, Chief Executive Officer +44 20 4582 3500
SI Capital Limited
Nick Emerson +44 (0)14 8341 3500
Gracechurch Group
Harry Chathli, Alexis Gore, Henry Gamble +44 (0)20 4582 3500
About Great Southern Copper
Great Southern Copper is a mineral exploration company focused on copper-gold
deposits in Chile. The Company has the option to acquire rights to 100% of two
projects that are prospective for large scale copper-gold deposits in the
underexplored coastal belt of Chile, a globally significant mining
jurisdiction and the world's largest copper producer.
The two projects comprise the San Lorenzo Project, northeast of the coastal
town of La Serena in northern Chile, and the Especularita Project located
approximately 170km to the south of the San Lorenzo project. The two
early-stage Cu-Au exploration projects are within the same coastal
metallogenic belt as other major deposits including Teck's Andacollo copper
and gold mine and Pucobre's El Espino project. Significant historical
small-scale and artisanal workings for both copper and gold are readily
evident in both exploration project areas.
Great Southern Copper is strategically positioned to support the global market
for copper, a key metal in the clean energy transition around the world. The
Company is actively engaged in a two-year exploration and evaluation work
programme targeting both large tonnage, low to medium grade Cu-Au deposits as
well as low tonnage high-grade Cu-Au deposits.
Further information on the Company is available on the Company's website:
https://gscplc.com (https://gscplc.com)
Chairman's Statement
As Chairman of Great Southern Copper plc, ('the Company' and 'GSC'), I am
delighted to be able to introduce our second set of results as a public
company for the year ended 31 March 2023.
In December 2021, Great Southern Copper plc, a mineral exploration company
focused on the discovery of copper-gold resources in the coastal metallogenic
belt of Chile, successfully listed on the Official List (Standard Segment) of
the London Stock Exchange, at the same time raising some £3.5 million. Since
that time the Company has been actively involved in Chile, where it holds the
rights to two exploration projects.
Chile is the world's largest producer and exporter of copper and is recognised
as a jurisdiction for world class deposits. With a long history of mining and
metal processing, the country boasts one of strongest economies in South
America. Not only does it enjoy a strong mining culture, but the country also
benefits from an experienced and educated mining workforce, first-class
infrastructure and a robust legal framework, which includes provisions for
foreign companies to own 100% of mining assets. In recent years, the country
has moved to redesign its constitution, and in 2022 elected a new president
mandated to effect change. Although recent moves to enable State participation
in Chile's new lithium strategy have made international headlines, similar
changes that were proposed last year to copper mining rights were not approved
by the country's constitutional assembly. However, Chile's new royalty
proposals, which will increase Government take from producing miners, are now
very close to finalisation, but they have been modified with the aim of
ensuring that Chile remains internationally competitive and can continue to
attract foreign investment in its mining industry.
In the years leading up to our listing, the business strategically targeted
Chile and specifically its coastal metallogenic belt, for high quality,
large-scale, early-stage copper-gold exploration assets, where options over
the two projects, San Lorenzo and Especularita, were secured. The Board
believes these provide the Company with significant advantages compared to
many of its peers including low entry cost, a coastal location with excellent
infrastructure, large concession positions in areas of significant historical
mining, limited exploration activity and the potential to earn 100% of the
projects with no overhanging payments or royalty conditions.
In the last year, the Company has engaged in scout diamond drilling programmes
across four prospect areas in the San Lorenzo copper-gold project, resulting
in the discovery of a potentially significant intrusive-related copper-gold
system. We are fortunate to have an excellent team in-country and our thanks
go to them for their hard work and dedication. The Company also increased its
concession holding at San Lorenzo during the year and reconnaissance work
programmes are now being planned to allow the Company to explore the greater
area.
Reconnaissance exploration at the Especularita project during the reporting
period has been successful in identifying three copper-gold prospects that the
Company has been actively working up to drill-ready stage. High-grade
epithermal and skarn type copper and gold has been identified in surface
samples at the Victoria, Teresita and Aurelia prospects and the Company plans
to have these prospects ready for drill testing within the next reporting
period. In addition, regional sampling of streams across the project is
currently ongoing and is designed to deliver additional new prospects into the
exploration pipe-line at Especularita. Our team at Especularita believes that
the project is ideally located at the centre of a district-scale
mineralisation system that includes porphyry-epithermal copper-gold
mineralisation as well as distal base-metal skarn deposits. The Company's
tenement holding at Especularita has also been significantly increased with
the addition of new strategically located concessions.
Despite global economic headwinds effecting the industry this year, the
overall economic outlook for both copper and gold continues to look very
strong, particularly for copper, where supply shortages are foreshadowed as a
result of the global transition to green energy technologies. This is
reflected in the copper price which has increased over 60% in the last 3
years. (Source: www.lme.co/en/metals/non-ferrous
(http://www.lme.co/en/metals/non-ferrous) ).
The discovery of an intrusive-related copper-gold system at San Lorenzo, as
well as the discovery of high-grade copper-gold epithermal systems at
Especularita, has established a strong platform from which the Company will
progress its exploration activity over the coming years. Our management team
is also working to identify and secure a third project, which will further
enhance the Company's exploration assets and the potential to deliver growth
opportunities for the Company and our stakeholders well into the future.
I wish to thank the Board, our management, and particularly our team in Chile,
for their dedicated work in advancing the Company's exploration efforts and at
the same time ensuring that the values, beliefs and standards of the Company
are upheld and promoted.
Charles Bond
28 July 2023
Operations Report
The Company is exploring two projects in northern Chile for large-scale
copper-gold deposits, namely: the San Lorenzo Project and the Especularita
Project.
Both projects are strategically located within the coastal metallogenic belt
which affords the Company significant infrastructure advantages over explorers
who operate in the high-altitude Andean belt, including access to roads,
power, towns and ports. Both projects are along trend from major deposits and
exhibit significant evidence of historical artisanal mining. However, the
areas are relatively under-explored by comparison with the Andean regions.
The Company has the option to earn 100% of both projects with no attaching
royalty conditions or overhanging payment requirements.
To assist with the exploration activity across both projects the Company has
expanded its all-Chilean exploration team with the addition of a highly
experienced Chief Geologist as well as two graduate geologists.
Exploration activities at the projects for the period to 31 March 2023 are set
out below.
San Lorenzo Project
Previous exploration work at the Chinchillon prospect area of San Lorenzo has
determined that large-scale copper-gold mineralisation occurs within a
granodiorite, which in turn is intruded by dykes, sills and stocks of
monzonite and overprinted by an extensive calc-potassic alteration event. The
overprinting calc-potassic alteration is typically defined by swarms of
sheeted fractures of quartz-actinolite-magnetite-K feldspar-Fe-oxide with rare
evidence of copper oxides(1). Contact margins of the monzonite intrusive
bodies also exhibit strong evidence of copper-gold mineralisation typically
associated with unidirectional solidification textures (or UST).
Work at San Lorenzo this year included interpretation of a ground magnetic
survey (completed the previous year(2))(3) as well as scout drilling at four
prospect sites within the calc-potassic alteration zone(4). Managing and
maintaining the project's concession portfolio is on-going and includes the
addition of new concessions to the project(5).
During the reporting period, a scout diamond drilling programme comprising 13
holes for a total of 2,958m was completed across 4 prospect areas within the
Chinchillon prospect at San Lorenzo. The programme was designed with the aim
to(6);
- Target the oxide sheeted fracture-vein systems at depth to determine
if the fracture-vein sets host copper sulphides at depth below the base of
oxidation,
- Target monzonite and UST to evaluate the fertility of the monzonites
to potentially produce a Cu-Au deposit,
- Determine the controls on mineralisation, and
- Identify what exploration tools and methods might be best employed
to vector towards economic deposits.
The results of the drilling have successfully confirmed that the sheeted
fracture system hosts copper sulphide mineralisation and that copper (and
gold+molybdenum) grades are dependent upon both fracture density and sulphide
speciation within the individual fractures. Assay results indicate that the
background copper content for unaltered-unmineralised granodiorite is very low
(<10-100ppm Cu). However, where the granodiorite is overprinted by sheeted
fracture alteration, the copper content increases significantly to
>300-1000ppm Cu. Drill holes SLD005-009 targeting the fracture-hosted
altered granodiorite all intersected anomalous Cu+Au-Mo on fractures with hole
SLD005 recording a best intercept of 94m of 480ppm Cu from 274m (SLD005)(6).
Maximum assays for individual samples (2m sample intervals) for hole SLD005
were 0.21% Cu and 0.11g/t Au. Additional highest assay results for the other
holes over 0.5-2m sample intervals include; 0.68% Cu (SLD006), 869ppm Cu and
1.13g/t Au (SLD007), 0.19% Cu and 0.5g/t Au (SLD008) and 0.37% Cu and 1.78g/t
Au (SLD009)(6). Whilst these results are not economic, they are significant in
demonstrating that the Chinchillon system is fertile and that a significant
volume of copper (and gold) has been added to the granodiorite presumably from
a large deeper source body, such as the monzonite. The company will now use
this information to target its next phase of exploration drilling.
Monzonitic dykes, sills and stocks are prevalent invading throughout the
calc-potassic altered granodiorite at Chinchillon. The monzonites are
characterised by UST magmatic textures (unidirectional solidification
textures) which are strongly indicative of a fertile mineralisation system
formed at a low erosional cupola level. Two monzonite intrusives were targeted
with scout drilling at the Las Hermanas and Cerro Blanco prospects. Assay
results indicate that the monzonite intrusives are highly elevated (up to 2
orders of magnitude) in copper (>300-1000ppm Cu), relative to the enclosing
granodiorite (<50-100ppm Cu), and as such they represent a potential
progenitor for the Cu+Au mineralising system at Chinchillon(6). Best Cu-Au
drill intercepts for holes targeting the monzonite-UST mineralisation
include(6);
· SLD010: 5.5m of 0.27% Cu, 0.54g/t Au from 70.7m,
including
0.5m of 1.65% Cu, 3.63g/t Au from 70.5m
· SLD013: 4.0m of 0.2% Cu, 0.1g/t Au from 5m, and
1.0m of 0.37g/t Au from 9m
Analysis of trace element ratios (Al3O(2)/TiO(2), Sr/Y and V/Sc ratios) from
drill core assay data for the monzonite dykes also suggests that the monzonite
geochemistry falls within the ranges for fertile Cu and Cu-Au producing
intrusives(7).
The results of the scout drilling programme confirm that GSC has discovered a
large intrusive-related copper-gold system at Chinchillon. The drilling
results are still being fully evaluated.
The San Lorenzo project is strategically located within the Coastal
metallogenic belt that is host to both porphyry and IOCG type copper-gold
deposits. The location benefits from excellent infrastructure due to its low
altitude and recent discovery successes in the belt by Hot Chili (ASX:HCH) and
Tribeca Resources (TSX:TRBC) emphasise the exploration potential of the
district. With this in mind GSC has acted to increase its concession-holding
over the year and now holds approximately 28,645 ha (286 km(2)) of mining and
exploration concessions both granted and in the process of being granted(5).
Especularita Project
The Especularita project comprises an extensive district-scale
porphyry-epithermal-skarn mineralisation system located within the Coastal
metallogenic belt and is host to significant small-scale mines and artisanal
workings for copper and gold. The centre of the mineralised system is
identified as a topographically distinct zone of advanced argillic altered
volcanics referred to locally as the La Colorada lithocap. Initial work by GSC
and its predecessor at Especularita was focussed on reconnaissance exploration
as well as maximising the Company's land position in the district(1).
Reconnaissance-scale mapping and sampling across the project during the
previous reporting period and into this reporting period, has led to the
discovery of outcropping high-grade copper-gold mineralisation (up to 7.22% Cu
and 13.1g/t Au)(8) in 3 prospect locations, namely; the Teresita, Victoria and
Aurelia prospects. In addition, porphyry style stockwork vein alteration has
been identified in several locations within and marginal to the La Colorada
advanced argillic altered lithocap(7). Further exploration is planned to
elevated these porphyry areas to prospect-scale targets.
The Teresita and Victoria prospects represent epithermal style
quartz-carbonate vein-breccia deposits with mineralisation hosted within
quartz-dominant zones of the breccias. Copper assay grades in surface samples
collected from detailed prospect mapping at Victoria during the reporting
period range up 6.9% Cu and 1.85g/t Au(9) gold up to 13.7g/t Au and up to
13.7g/t Au at Teresita(7). Assay results from preliminary prospect-scale
mapping and sampling at the Aurelia prospect are indicative of skarn type
mineralisation with samples from historical small-scale mines ranging up to
7.6% Cu and 2.9g/t Au(7). Scout RC drilling programmes are being planned for
both the Teresita and Victoria prospects.
A programme of first-pass stream sediment sampling has also been implemented
across the Especularita project area to provide geochemical exploration
vectors to new target areas particularly within the lithocap alteration
zone(5). Approximately 500 drainage samples have been collected during the
later half of the reporting period and assay results for the survey are
pending.
The Especularita project is located within a large mineral district and
includes significant historical evidence of artisanal mining and processing as
well as active small-scale Cu-Au mines. The project is strategically located
within a trend that includes both large porphyry and skarn type copper
deposits including Andacollo (Teck) and El Espino (Pucobre). During the
reporting period, the Company has worked to increase its concession position
within this under-explored district and now holds 18,209 ha (182 km2) of
mining and exploration concessions both granted and in the process of being
granted(5).
Sam Garrett
Chief Executive Officer
28 July 2023
References:
1. Prospectus for Great Southern Copper PLC (06 Dec 2021),
2. RNS 8499X (22 Jan 2022): Ground-based magnetic survey completed at
San Lorenzo project,
3. RNS 4007M (23 May 2022): Ground magnetics survey identifies
multiple targets at San Lorenzo,
4. RNS 9264R (11 Jul 2022): Diamond drilling commences at San Lorenzo
Cu-Au project, Chile,
5. RNS 3666Q (20 Feb 2023): Exploration update at Especularita and San
Lorenzo,
6. RNS 4946T (20 Mar 2023): Results for scout drilling programme,
7. RNS 1155A (22 May 2023): Corporate presentation
8. RNS 2146H (22 Nov 2022): Early exploration at Especularita
identifies Cu-Au targets and completion of drilling at San Lorenzo
9. RNS 0445V (03 April 2023): Rock chip assay grades up to 6.9% Cu and
1.85g/t Au in outcrop from Victoria prospect
Extract from Strategic Report
The Directors present their Strategic Report on the Group and Company for the
year ended 31 March 2023.
Strategy and Business Review
The Company's strategy is to create value for shareholders by using the
expertise of its management team to successfully explore for copper-gold
(Cu-Au) deposits in Chile and, potentially, to identify and acquire other
mineral exploration projects.
The Company's exploration projects in Chile comprise the San Lorenzo Cu-Au
project north east of the coastal town of La Serena in northern Chile and the
Especularita Cu-Au project located approximately 170km to the south of the San
Lorenzo project. Both projects are situated in the Coastal Cordillera of Chile
with good access to infrastructure.
The prospectivity of both projects is confirmed by both significant historical
small scale artisanal workings for copper and gold and the exploration work
completed to date. In the past year, the Company has undertaken geological
mapping, trenching and scout drilling at San Lorenzo. At Especularita, the
Company has carried out geological mapping, stream sediment sampling, rock
chip and float sampling. Exploration is still at an early stage at both
projects and has not yet matured to the stage where a mineral resource
estimate has been defined. Nevertheless, drilling at San Lorenzo has confirmed
the discovery of a large intrusive-related Cu-Au mineralised system and, at
Especularita, results have identified mineralised vein breccia targets for
follow-up work.
In December 2021, £3.5 million was raised to fund the Company's two-year
exploration programme at San Lorenzo and Especularita. In the past financial
year, £2,136,136 was spent according to the budget leaving a cash balance of
£653,940 as at 31 March 2023.
The outlook for copper is positive, given the lack of investment in new copper
discoveries over the last decade, which has lowered copper production at a
time when it needs to ramp up significantly to enable the transition to clean
energy. For copper exploration, Chile is a prime destination. It is the
largest copper producer in the world and one of South America's most promising
investment destinations. It is a stable and prosperous country with such
impressive mineral endowment, that all the world's major mining companies
operate there.
Details of the Company's results and prospects are set out in the Chairman's
Statement and in the Operations Report.
Subsequent Events
On 15 May 2023, the Company entered into an agreement with Foreign Dimensions
Pty Limited ("FD") whereby FD agreed to provide the Company with an unsecured
interest free convertible loan facility in the aggregate sum of £501,000. The
loan is to be made in two tranches:
· £250,000 on 31 August 2023; and
· £251,000 on 11 September 2023.
Automatic conversion of the loan into Ordinary Shares ("Conversion Shares") in
the Company at a price of 1.2p per share, and the grant of an equivalent
number of warrants exercisable at 2.4p, is subject to certain conditions, in
particular publication of a prospectus approved by the FCA in relation to, and
authority being granted by the Company's shareholders for, the allotment and
issue of the Conversion Shares and the grant of the warrants.
In the event that such authority is not granted, any advance already made is
repayable by the Company one year after the date of such advance.
On 19 May 2023, by way of a private placing, the Company issued a further
41,749,998 Ordinary Shares at a price 1.2p per share, raising £501,000 before
costs, each with the right to a warrant attached, also to be granted
conditional on satisfaction of the conditions above, and exercisable at 2.4p.
On the same date, the Company made loans of £10,000 each to two of the
Directors, Stuart Greene and Nick Briers to enable them each to subscribe for
shares in the abovementioned placing. These loans, which are interest free,
are being repaid from their after tax salaries. It is envisaged that both
loans will be repaid before 30 November 2023.
The Company has announced the appointment of Martin Page as Finance Director.
Mr Page will take up his appointment on 1 August 2023.
Principal Risks
The Directors have identified the following principal risks in regards to the
Company's future. The relative importance of these risks is likely to evolve
over time as the Company executes its strategy in Chile and as the external
economic and market environment changes.
Strategic Risk
The Company's strategy may not deliver the results anticipated by the
shareholders. The Directors regularly monitor the Company's progress and will
modify the strategy as required, based on internal and external developments
and exploration results. The strategy is monitored at the Company's regular
Board meetings.
Concentration Risk
The Company's activities are currently geographically concentrated in Chile.
As a result of this concentration, the Company may be disproportionately
exposed to the impact of local delays or interruptions to development of, and
future production from, these locations caused by significant changes to
governmental regulation, interruption to transportation together with capacity
constraints, curtailment of future production, natural disasters, adverse
weather conditions, civil unrest, labour disputes or other events which impact
this area.
Exploration Risk
The Company's projects are regarded as 'early-stage exploration', are highly
speculative in nature, and may not result in success. There is no guarantee
that further mineralisation or recoverable economic resources will be found.
Whilst the Directors endeavour to apply their skills to assess the projects,
exploration is costly, highly speculative and often unsuccessful. For
instance, factors such as adverse weather conditions, natural disasters,
equipment or services shortages, procurement delays or difficulties arising
from the environmental and other conditions in the areas where the potential
resources are located, may increase costs and make it uneconomical to advance
or develop the Company's projects. Failure to discover new mineral resources
or maintain existing mineral rights could materially and adversely affect the
Company's results of operations, cash flows, financial conditions and
prospects.
Government Regulation
The concessions and operations of the Company are located in jurisdictions
outside of the UK and there are, therefore, a number of risks that the Company
is unable to control.
Whilst the Company makes every effort to ensure that it has robust commercial
agreements in place, there is a risk that the Company may be adversely
affected by political factors such as taxes and charges, suspension of
licences and changes to the laws governing mineral exploration and extraction
activities.
The current Chilean government's legislative programme includes a proposal to
change the taxation of mining activities in Chile. A draft bill that would
modify the mining royalty regime is under discussion in Congress. The proposed
royalty has a hybrid nature and combines an ad valorem component that would be
applied to annual sales of copper and a variable element linked to the mining
operating margin. The royalty tax would apply to mining companies producing
over 12,000 tonnes of fine copper per year.
Despite the fact that the Company's operations are currently limited to
exploration activities, the enactment of the aforementioned bill could
considerably increase mining taxes, potentially affecting the viability of
future exploitation projects in Chile, as well as those of the Company,
which could become uneconomic. The Company will continue to monitor the
proposed changes and the potential adoption of a Mining Royalty Tax, which may
adversely affect potential future operations of the Company.
Modifications to the Chilean mining code expected to be introduced in 2023 but
now postponed to January 2024, include extending the duration of an
exploration concession from two to four years but eliminating the possibility
of requesting an extension to an exploration concession given the increased
duration. The Company will continue to monitor the various modifications to
the mining code that are being discussed by Congress and their potential
impact on the Company, including the impact on the concessions to which the
Company has rights at the time the new laws come into force.
Permitting
The Company's rights to the San Lorenzo and Especularita projects are defined
by option agreements that its subsidiary, PTRC, has over the exploration and
exploitation concessions at these projects. The option agreements and all of
the concessions are in good standing.
Exploration concessions in Chile last for 2 years, counted since their
constitution by judicial ruling, and are subject to the payment of annual fees
to the Chilean Treasury. If these fees are not paid in a timely manner, the
claim can only be restored to good standing by paying double the annual fee
the following year. At the end of the two-year period, the exploration
concession may i) be renewed for an additional two years, in which case at
least 50% of the surface area of the exploration concession must be
relinquished, or ii) be converted, totally or partially, into an exploitation
concession.
Exploitation concessions are valid in perpetuity so long as annual fees are
paid to the Chilean government. The process to incorporate a mining concession
is based on the principle that grants preference to the first petitioner
before the local court. The holder of an exploration concession in good
standing has the preferential right to incorporate an exploitation concession
within the boundaries of its exploration concession. Notwithstanding, anyone
can request the incorporation of a mining concession within the limits of the
exploration concession of a different owner, in which case the holder has to
file a claim opposing the aforementioned constitution, within 30 days, counted
from the date of publication of the application made by the interested third
party. Exploration and exploitation concessions do not necessarily imply a
right to mine, except on a small scale. However, they give the owner the right
to mine subject to the granting of permits.
There is no guarantee that any of the granted exploration concessions, or any
exploration concessions granted in the future, will be renewed. Additionally,
there is no guarantee that the exploitation concessions granted or to be
granted can be effectively maintained by payment of the appropriate annual
licence fees or by means of compliance with any new regulation that may
control the granting and maintenance of exploitation concessions in the
future. If these exploration and exploitation concessions are not renewed or
maintained, or if new exploration and exploitation concessions are applied for
and not granted, this could have a material adverse effect on the Company's
business, prospects, financial conditions and results of operations.
Whilst the Company is satisfied that it has taken reasonable measures to
ensure an unencumbered right to explore its projects in Chile, the relevant
concessions may be subject to undetected defects. If a defect does exist, it
is possible that PTRC may lose all or part of its interest in one or more of
the concessions to which the defect relates and its exploration and
exploitation rights over the areas related to such concessions and prospects
of commercial production may accordingly be adversely affected.
Exploration concessions, which PTRC has the right to acquire through option
agreements, need to be duly registered in the Chilean Mining Registrar in
order for them to be enforceable. If PTRC fails to register any option
agreement in the Chilean Mining Registrar, then it may be unable to enforce
the benefit of them and PTRC's title to the exploration concession could be
subject to potential litigation by third parties claiming an interest in them.
PTRC has submitted all option agreements not currently registered in the
Chilean Mining Registrar for registration and has no reason to believe that
any of the option agreements will not be registered.
Environmental and Other Regulatory Requirements
Currently the Group's environment impact is limited to the activities
associated with exploration and is therefore minimal. The development of any
project into a mining operation will have a considerable impact on the local
landscape and communities. There may at some point be opposition to mining by
some parties and this may impact the ability of the Company to progress these
projects towards production.
Although the Company believes that its projects are currently in compliance
with all relevant environmental and health and safety laws and regulations,
there can be no guarantee that new laws or regulations, or amendments to
current laws or regulations will not be introduced and they may have a
material impact on the Company and its projects. The Company will continue to
maintain the highest standards and aim to comply with all appropriate laws and
regulations. The Company will also continue to engage with local communities
and non-governmental and governmental bodies to ensure any impacts of current
and future activities are minimised and managed appropriately.
Financing
The Company is in the exploration stage of its development and will only
become revenue producing once successful exploration has been achieved and an
operating mine developed. Consequently, the Company will be dependent on
either equity funding or bringing in partners to finance its operations. The
Company may not be successful in the procurement of the required funds and may
therefore have to adjust its exploration strategy accordingly.
Commodity Prices
The market prices of copper and gold, like many commodities, are volatile and
are affected by numerous factors which are beyond the Company's control.
Sustained downward movements in copper and gold prices could render less
economic, or uneconomic, the mineral projects that the Company is exploring
and could negatively impact the availability of equity finance to the Company
for it to continue to fund its exploration activities.
Foreign Currency and Exchange Rates
The Company may be exposed to ongoing currency risk, however no forex
sensitivities have been included as they are deemed to be immaterial. Proceeds
of fundraises are expected to be mostly in Sterling; the Company's financial
statements are stated in Sterling and certain ongoing management costs will be
denominated in Sterling. Its operational costs are largely in Chilean Peso
(CLP). As a result, fluctuations in the exchange rates of these currencies may
adversely affect the Company's exploration budgets, operating results, cash
flows or financial condition to a material extent.
Market Conditions
The Company cannot predict the extent of periods of slow or negative economic
growth and any resultant weakening of consumer and business confidence. This
might result in difficulties in raising capital and lower the level of demand
for many products across a wide variety of industries, including those
industries for which commodities in the natural resources sector are an
important raw material. Accordingly, the Company's estimate of the results of
operations, financial conditions and prospects of the Company, and of any
future acquisition targets, will be uncertain and may be adversely impacted by
unfavourable general global, regional and national macroeconomic conditions.
Dependence on Key Personnel
The Company's success depends to a significant extent on the quality of its
management. The Company's business may be disrupted, additional cost may be
incurred or its future may be jeopardised by a loss of, or failure to retain,
sufficient numbers and quality of management staff or senior personnel.
To mitigate this risk, measures are in place and are under review to reward
and retain key individuals and to protect the Company from the impact of staff
turnover.
Social, Community and Human Rights
It is the Company's intention to operate for the benefit of all
stakeholders. In this regard, it will ensure that PTRC:
· Adopts fair, non-discriminatory employment practices;
· Ensures safe working practices for all employees;
· Positively engages with local communities and is sensitive to any
concerns that they may have regarding land usage, water resources,
biodiversity, cultural sites and artefacts; and
· Will treat local suppliers fairly.
Whilst the projects are still at an early stage of exploration, the Company
recognises that for any mine to be developed at the project sites, it must be
able to demonstrate to all stakeholders, a clear positive benefit that
respects social, community and human rights.
Key Performance Indicators (KPIs)
Given that the Company is at an early stage in its development, has no
turnover and is dependent on raising funds in the equity market to finance its
activities, many of the quantifiable KPIs that companies in other industries
may present are not applicable here. Nevertheless, management is monitoring
key performance indicators or the process associated with:
· Company expenses and the cash balance to ensure that the Company can
meet its expected obligations as they fall due and to inform the required
timing of the next fund raising;
· The progress of the exploration programme and the status and
commitments with regards to the exploration concessions; and
· Ensuring that PTRC meets its environmental and social obligations in
Chile.
The Directors are of the opinion that, for an early-stage mineral exploration
company, the audited accounts, the Chairman's Statement and the Operations
Report are the best means of assessing the performance of the Company during
the year.
Section 172(1) Statement
The Directors believe they have acted in the way that they consider, in good
faith, would be most likely to promote the success of the Company for the
benefit of its members as a whole (as required by s172 of the Companies Act
2006), and in doing so have had regard (amongst other matters) to the
following factors:
· The likely consequences of any decision in the long term;
· The interests of the Company's employees;
· The need to foster the Company's business relationships with
suppliers, customers and others;
· The impact of the Company's operations on the community and the
environment;
· The desirability of the Company maintaining a reputation for high
standards of business conduct; and
· The need to act fairly as between members of the Company.
The application of the s172 requirements can be demonstrated by the actions
and key decisions of the Company during the year including:
· In pursuit of the Company's strategy of creating value for
shareholders via the exploration for copper mineral deposits in Chile, the
Company has, in the past year:
· carried out exploration and identified copper mineralisation at its
two projects in Chile;
· confirmed the discovery of a large intrusive-related copper-gold
mineralised system at San Lorenzo;
· identified mineralised vein breccia targets for follow up work; and
· reviewed a number of new projects that could be brought into the
Company as a 'third' project.
· In order to pursue the strategy outlined, the Directors are aware of
the importance of developing the skills of its employees and establishing a
good team work ethic where team members work well together and communicate
openly with each other. In pursuit of this objective, the CEO visited the
projects in Chile on four occasions during the year, working with team members
and, together with the Company's experienced exploration manager, imparting
the benefit of their expertise to more junior team members.
· In the past year, the Company has acted fairly, in good faith and
without problems with all of the service providers.
· At this stage of the Company's development, it has no customers.
· The Directors are very aware of the need to carefully manage
environmental and social matters in Chile in order to ensure that it has a
social licence to explore and, if successful, to ultimately mine at the
project sites. The Company has prepared a 'Sustainability' statement which
appears on the Company's website and has commenced work on an Environmental,
Social and Corporate Governance ("ESG") policy to govern how members of the
team manage these matters and to ensure that the Company operates to the
highest standards.
· The Company's values of business conduct are described in the
Corporate Governance Statement. Additionally, the culture of the Company is
illustrated by the following statements that appear on the Company's website:
· We will be guided by our company values to act with integrity at all
times both within the workplace and within the community more broadly; and
· We will communicate transparently and honestly with all stakeholders
· Retaining investor support is important to the Company and,
therefore, the Directors intend to keep shareholders fully and equally
informed. In the past year, the Company has kept shareholders informed of
progress via news releases, web podcasts, the Company's website, attending a
mining conference and through direct contact. Moving forward, management
will continue to attend mining conferences where they will be available to
meet shareholders in person.
Extract from the Directors' report
The Directors have pleasure in submitting their report together with the
audited financial statements for Great Southern Copper plc (the 'Company' and
together with its subsidiary, the 'Group') for the year ended 31 March 2023.
Principal Activities
The Group is currently focussed upon the exploration for copper and gold in
Chile. Further detail is covered in the Chairman's Statement and also in the
Operations Report.
Dividends
No dividends are planned (2022: £nil).
Subsequent Events
Further details on subsequent events can be found in note 23 and in the
strategic report on page 21 of the Annual Report.
Going Concern
In common with many other mineral exploration companies, the Group has raised
equity and debt finance for its exploration activities. The Board recognises
that further finance will need to be raised as and when required to progress
its exploration projects and add shareholder value. The Board also
acknowledges that previous success in raising funds does not necessarily
provide any guarantee that the Group will be able to do so in the future.
As at 31 March 2023, the Group's cash at bank amounted to £653,940; at the
date of signing this report, the balance amounted to £534,460.
The Board has reviewed the Group's cash flow forecast up to 31 July 2024 and
are aware that additional funds will likely need to be sourced in order to
continue to advance its exploration activities and continue as a going concern
for a period of at least 12 months from the approval of these financial
statements. The auditors have acknowledged this going concern uncertainty in
their unqualified audit report.
The Directors are confident that they will be able to secure the necessary
funding in order to enable the Group to continue to advance its projects.
The Group recently signed a £501,000 unsecured, convertible interest free
loan agreement with the Company's major shareholder, Foreign Dimensions Pty
Limited (refer to the 'Subsequent Events' note in the Strategic Report for
details). The Board continues to closely monitor its cash position, allocate
funds in line with its detailed budget and maintain a strict control over
non-project spend. The Directors remain confident in the Company's ability
to raise additional funds as required, from existing and/or new investors and
therefore consider it appropriate to continue to adopt the going concern basis
of accounting in preparing these financial statements.
Extracted from Directors' responsibility statement pursuant to Disclosure and
Transparency Rules
Each of the Directors, confirms that to the best of his knowledge and belief:
· The financial statements prepared in accordance with UK-adopted
International Accounting Standards and in conformity with the Companies Act
2006, give a true and fair view of the assets, liabilities, financial position
and loss of the Group and parent company; and
· The Annual Report and financial statements, including the Operations
Report, includes a fair review of the development and performance of the
business and the position of the Group and parent company, together with a
description of the principal risks and uncertainties that they face.
Approved by the Board of Directors and signed on behalf of the Board by:
Charles Bond
Chairman
28 July 2022
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended 31 March 2023
Year ended Year ended
31 March 2023 31 March 2022
£ £
Note
Continuing operations
Administrative expenses 6 (1,298,711) (1,037,076)
Operating loss (1,298,711) (1,037,076)
Loss before taxation (1,298,711) (1,037,076)
Taxation 9 - -
Loss for the year attributable to the owners of the Company
(1,298,711) (1,037,076)
Other comprehensive income
Items that may be reclassified subsequently to
profit or loss:
Exchange rate differences on translation of foreign 28,748 (24,178)
operations
Total comprehensive loss attributable to the owners of the Company
(1,269,963) (1,061,254)
Pence Pence
Earnings per share - basic and diluted 10 (0.610) (0.938)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 March 2023
2023 2022
Note £ £
Assets
Non-current assets
Intangible assets 11 2,478,738 1,489,379
Property, plant and equipment 12 1,609 -
Total non-current assets 2,480,347 1,489,379
Current assets
Trade and other receivables 14 189,814 333,292
Cash and cash equivalents 15 653,940 2,751,676
Total current assets 843,754 3,084,968
Total assets 3,324,101 4,574,347
Liabilities
Current Liabilities
Trade and other payables 16 (124,733) (223,063)
Total liabilities (124,733) (223,063)
Net current assets 719,021 2,861,905
Net assets 3,199,368 4,351,284
Equity
Share capital 18 2,133,364 2,124,761
Share premium 20 3,175,962 3,175,962
Share based payment reserve 19 235,903 140,160
Shares to be issued 20 - 6,196
Foreign currency translation reserve 20 4,570 (24,178)
Retained earnings 20 (2,350,431) (1,071,617)
Total equity attributable to the owners of the Company
3,199,368 4,351,284
COMPANY STATEMENT OF FINANCIAL POSITION
Year ended 31 March 2023
2023 2022
Note £ £
Assets 13
Non-current assets
Investments 3,991,550 2,641,245
Total non-current assets 3,991,550 2,641,245
Current assets
Trade and other receivables 14 132,960 261,842
Cash and cash equivalents 15 650,857 2,325,365
Total current assets 783,817 2,587,207
Total assets 4,775,367 5,228,452
Liabilities
Current liabilities
Trade and other payables 16 (103,541) (195,763)
Total liabilities (103,541) (195,763)
Net current assets 680,276 2,391,444
Net assets 4,671,826 5,032,689
Equity
Share capital 18 2,133,364 2,124,761
Share premium 20 3,175,962 3,175,962
Share based payments reserve 19 235,903 140,160
Shares to be issued 20 - 6,196
Retained earnings 20 (873,403) (414,390)
Total equity 4,671,826 5,032,689
The Company has taken advantage of the exemption under section 408 of the
Companies Act 2006 by choosing not to present its individual Statement of
Comprehensive Income and related notes that form part of these approved
financial statements. The Company's loss for the period from operations is
£478,910 (2022: £379,849)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Year ended 31 March 2023
Foreign currency translation reserve
Share £
Share Share Shares to be issued based Retained earnings Total Equity
£
capital premium £ payments £
£ £ £
As at 1 April 2021 50,000 - - - - (34,541) 15,459
Loss for the year - - - - - (1,037,076) (1,037,076)
Exchange rate differences on translation of foreign operations - - - - (24,178) - (24,178)
Total comprehensive income for the year - - - - (24,178) (1,037,076) (1,061,254)
Transactions with shareholders:
Issue of share capital, net of issue costs
2,074,761 3,175,962 - - - - 5,250,723
Shares to be issued - - 6,196 - - - 6,196
Share based payments - - - 140,160 - - 140,160
As at 31 March 2022 2,124,761 3,175,962 6,196 140,160 (24,178) (1,071,617) 4,351,284
Loss for the year - - - - - (1,298,711) (1,298,711)
Exchange rate differences on translation of foreign operations - - - - 28,748 - 28,748
Total comprehensive income for the year - - - - 28,748 (1,298,711) (1,269,963)
Transactions with shareholders:
Issue of share capital, net of issue costs (note 18)
8,603 - (6,196) (22,304) - 19,897 -
Share based payments - - - 118,047 - - 118,047
As at 31 March 2023 2,133,364 3,175,962 - 235,903 4,570 (2,350,431) 3,199,368
COMPANY STATEMENT OF CHANGES IN EQUITY
Year ended 31 March 2023
Share Share premium Shares to be issued Share Based payments Retained earnings Total
capital £ £ £ £ equity
£ £
As at 1 April 2021 50,000 - - - (34,541) 15,459
Loss for the year - - - - (379,849) (379,849)
Total comprehensive income for the year - - - - (379,849) (379,849)
Transactions with shareholders:
Issue of shares, net of issue costs 2,074,761 3,175,962 - - - 5,250,723
Shares to be issued - - 6,196 - - 6,196
Share based payments - - - 140,160 - 140,160
As at 31 March 2022 2,124,761 3,175,962 6,196 140,160 (414,390) 5,032,689
Loss for the year - - - - (478,910) (478,910)
Total comprehensive income for the year - - - - (478,910) (478,910)
Transactions with shareholders:
Issue of shares, net of issue costs (note 18) 8,603 - (6,196) (22,304) 19,897 -
Share based payments - - - 118,047 - 118,047
As at 31 March 2023 2,133,364 3,175,962 - 235,903 (873,403) 4,671,826
CONSOLIDATED STATEMENT OF CASH FLOWS
Year ended 31 March 2023
Year ended Year ended
31 March 31 March
2023 2022
£ £
Cash flows from operating activities -
Loss for the year (1,298,711) (1,037,076)
Adjustments for:
Share based payments 118,047 83,796
Depreciation 551 -
Working capital adjustments
Increase in trade and other receivables 148,353 (155,383)
Increase/(decrease) in trade and other payables (178,642) (24,214)
Net cash outflow from operations (1,210,402) (1,132,877)
Cash flows from investing activities
Purchase of subsidiary undertaking - (10,450)
Net cash acquired with subsidiary undertaking - 2,735
Purchase of intangible assets (923,529) (191,753)
Purchase of plant, property and equipment (2,205) -
Net cash used in investing activities (925,734) (199,468)
Cash flows from financing activities
Issue of ordinary share capital, net of issue costs - 4,020,976
Net cash generated from financing activities - 4,020,976
Net (decrease)/increase in cash and cash equivalents (2,136,136) 2,688,631
Exchange gains on cash and cash equivalents 38,400 13,045
Cash and cash equivalents brought forward 2,751,676 50,000
Cash and cash equivalents carried forward 653,940 2,751,676
Significant non-cash transactions from investing and financing activities are
as follows:
Year ended Year ended
31 March 31 March
2023 2022
£ £
Equity consideration for business combination - 1,211,111
Share option charge 88,607 83,796
Broker warrants - 56,364
Remuneration settled through issue of shares 29,440 6,196
COMPANY STATEMENT OF CASH FLOWS
Year ended 31 March 2023
Year ended Year ended
31 March 31 March
2023 2022
£ £
Net cash flows from operating activities
Loss for the year (478,910) (379,849)
Adjustments for:
Share based payments 118,047 83,796
Working capital adjustments
Increase in long term receivables (1,350,305) (1,419,683)
Decrease/(increase) in trade and other receivables 128,882 (186,841)
(Decrease)/increase in trade and other payables (92,222) 167,417
Net cash used in operations (1,674,508) (1,735,161)
Cash flows from investing activities
Payments to acquire investments - (10,450)
Net cash from investing activities - (10,450)
Cash flows from financing activities
Issue of ordinary share capital - 4,020,976
Net cash generated from financing activities - 4,020,976
Net (Decrease)/increase in cash and cash equivalents (1,674,508) 2,275,365
Cash and cash equivalents brought forward 2,325,365 50,000
Cash and cash equivalents carried forward 650,857 2,325,365
Significant non-cash transactions from investing and financing activities are
as follows:
Year ended Year ended
31 March 31 March
2023 2022
£ £
Equity consideration for business combination - 1,211,111
Share option charge 88,607 83,796
Broker warrants - 56,364
Remuneration settled through issue of shares 29,440 6,196
NOTES TO THE FINANCIAL STATEMENTS
Year ended 31 March 2023
1. General Information
Great Southern Copper plc ('the Company') and its subsidiaries
(together 'the Group') principal activity is currently focused upon the
exploration for copper and gold in Chile. Further detail is covered in the
Chairman's Statement and also in the Operations Report.
The Company is a public limited Company, which is listed on the
London Stock Exchange and incorporated and domiciled in England and Wales. The
address of its registered office is Salisbury House, London Wall, London,
United Kingdom, EC2M 5PS.
2. Basis of Preparation
The consolidated Group financial statements and Company financial
statements have been prepared in accordance with United Kingdom ("UK") adopted
International Accounting Standards ('IFRS') and those parts of the Companies
Act 2006 applicable to companies reporting under IFRS. The consolidated Group
financial statements and Company financial statements are presented in
Sterling and rounded to the nearest whole pound unless otherwise indicated.
The financial statements are prepared on the historical cost basis, except for
certain financial instruments and share-based payments that have been measured
at fair value.
Going Concern Basis
In common with many other mineral exploration companies, the Group has raised
equity and debt finance for its exploration activities. The Board recognises
that further finance will need to be raised as and when required to progress
its exploration projects and add shareholder value. The Board also
acknowledges that previous success in raising funds does not necessarily
provide any guarantee that the Group will be able to do so in the future.
As at 31 March 2023, the Group's cash at bank amounted to £653,940; at the
date of signing this report, the balance amounted to £534,460.
The Board has reviewed the Group's cash flow forecast up to 31 July 2024 and
are aware that additional funds will likely need to be sourced in order to
continue to advance its exploration activities and continue as a going concern
for a period of at least 12 months from the approval of these financial
statements. The auditors have acknowledged this going concern uncertainty in
their unqualified audit report.
The Directors are confident that they will be able to secure the necessary
funding in order to enable the Group to continue to advance its projects.
The Group recently signed a £501,000 unsecured, convertible interest free
loan agreement with the Company's major shareholder, Foreign Dimensions Pty
Limited (refer to the 'Subsequent Events' note in the Strategic Report for
details). The Board continues to closely monitor its cash position, allocate
funds in line with its detailed budget and maintain a strict control over
non-project spend. The Directors remain confident in the Company's ability
to raise additional funds as required, from existing and/or new investors and
therefore consider it appropriate to continue to adopt the going concern basis
of accounting in preparing these financial statements.
3. Accounting Policies
The principal accounting policies adopted are set out below.
Basis of Consolidation
The consolidated financial statements incorporate the assets,
liabilities, income and expenses of the Company and entity controlled by the
Company (its subsidiary) made up to the Company's accounting reference date.
Control is achieved when the Company has the power over the investee, is
exposed or has rights to variable return from its involvement with the
investee and has the ability to use its power to affect its returns. The
Company reassesses whether or not it controls an investee if facts and
circumstances indicate that there are changes to one or more of the three
elements of control listed above.
Consolidation of a subsidiary begins when the Company obtains control over the
subsidiary and ceases when the Company loses control of the subsidiary.
Specifically, the results of subsidiaries acquired or disposed of during the
period are included in the consolidated income statement from the date that
the Company gains control until the date when the Company ceases to control
the subsidiary.
Where necessary, adjustments are made to the financial statements of
a subsidiary to bring the accounting policies used into line with the Group's
accounting policies. All intra Group assets and liabilities, equity, income,
expenses and cash flows, relating to transactions between the members of the
Group, are eliminated on consolidation.
The results of overseas subsidiaries are translated at the monthly
average rates of exchange during the period and their statements of financial
position at the rates ruling at the reporting date. Exchange differences
arising on translation of the opening net assets and on foreign currency
borrowings or deferred consideration, to the extent that they hedge the
Group's investment in such subsidiaries, are reported in the statement of
comprehensive income. The financial statements of the subsidiary are drawn up
to 31 December, with management information utilised to take this out to 31
March in line with the reporting period of the Group.
Currencies
Presentational Currency
Items included in the financial statements are measured using the
currency of the primary economic environment in which the ultimate parent
undertaking operates which is Sterling (£). The functional currency of the
only subsidiary of the group is the United States Dollar ($).
Transactions and Balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the transactions
or at an average rate for a period if the rates do not fluctuate
significantly. Foreign exchange gains and losses, resulting from the
settlement of such transactions and from the translation at year end exchange
rates of monetary assets and liabilities denominated in foreign currencies,
are recognised in the income statement. Non-monetary items that are measured
in terms of historical cost in a foreign currency are not retranslated.
Revenue Recognition
Revenue is recognised in the individual company financial statements
in respect of management fees charged to the subsidiary company. Revenue is
recognised in respect of the period that the service has been completed.
3. Accounting Policies (continued)
Intangible Assets - Exploration and Evaluation Expenditure
Mineral exploration and evaluation expenditure relates to costs
incurred in the exploration and evaluation of potential mineral resources and
includes exploration and mineral licences, researching and analysing
historical exploration data, exploratory drilling, trenching, sampling and the
costs of pre-feasibility studies.
Exploration and evaluation expenditure for each area of interest,
other than that acquired from another entity, is charged to profit or loss as
incurred except when the expenditure is expected to be recouped from future
exploitation or sale of the area of interest and it is planned to continue
with active and significant operations in relation to the area, or at the
reporting period end, the activity has not reached a stage which permits a
reasonable assessment of the existence of commercially recoverable reserves,
in which case the expenditure is capitalised. Purchased exploration and
evaluation assets are recognised at their fair value at acquisition. As the
capitalised exploration and evaluation expenditure asset is not available for
use, it is not depreciated.
Exploration and evaluation assets have an indefinite useful life and
are assessed for impairment when facts and circumstances may suggest an
impairment and circumstances suggest that the carrying amount of an asset may
exceed its recoverable amount. The assessment is carried out by allocating
exploration and evaluation assets to cash generating units, which are based on
specific projects or geographical areas. IFRS 6 permits impairments of
exploration and evaluation expenditure to be reversed should the conditions
which led to the impairment improve. The Group continually monitors the
position of the projects capitalised and impaired.
Whenever the exploration for and evaluation of mineral resources in
cash generating units does not lead to the discovery of commercially viable
quantities of mineral resources and the Group has decided to discontinue such
activities of that unit, the associated expenditures are written off to profit
or loss.
Income Tax
The tax expense or credit represents the sum of the tax currently
payable or recoverable and the movement in deferred tax assets and
liabilities.
Current Income Tax
Current tax is based upon taxable income for the year and any
adjustment to tax from previous years. Taxable income differs from net income
in the income statement because it excludes items of income or expense that
are taxable or deductible in other years or that are never taxable or
deductible. The calculation uses the latest tax rates for the year that have
been enacted or substantively enacted by the reporting date.
Deferred Tax
Deferred tax is calculated at the latest tax rates that have been
substantively enacted by the reporting date that are expected to apply when
settled. It is charged or credited to profit or loss, except when it relates
to items credited or charged directly to equity, in which case it is also
dealt with in equity.
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities in the
financial statements and the corresponding tax bases used in the computation
of taxable income and is accounted for using the liability method. Deferred
tax liabilities and assets are not discounted.
3. Accounting Policies (continued)
Deferred Tax
Deferred tax liabilities are generally recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent that it is
probable that taxable income will be available against which the asset can be
utilised. Such assets are reduced to the extent that it is no longer probable
that the asset can be utilised.
Deferred tax assets and liabilities are offset when there is a right to offset
current tax assets and liabilities and when the deferred tax assets and
liabilities relate to taxes levied by the same taxation authority, on either
the same taxable entity or different taxable entities, where there is an
intention to settle the balances on a net basis.
Payroll Expense and Related Contributions
The Group provides a range of benefits to employees, including annual
bonus arrangements, paid holiday arrangements and defined contribution pension
plans.
Short-term benefits, including holiday pay and other similar
non-monetary benefits, are recognised as an expense in the period in which the
service is received.
Pension Costs
The Group operates a defined contribution pension scheme for employees. The
annual contributions payable are charged to profit or loss.
Share-Based Compensation
The Group issues share-based payments to certain employees and
Directors. Equity-settled share-based payments are measured at fair value at
the date of grant and expensed on a straight-line basis over the vesting
period, along with a corresponding increase in equity. The Group has measured
share based payments using the Black Scholes and Monte Carlo option (note 19)
models.
At each reporting date, the Group revises its estimate of the number of equity
instruments expected to vest as a result of the effect of non-market based
vesting conditions. The impact of any revision is recognised in profit or
loss, with a corresponding adjustment to equity reserves.
The fair values of share options are determined using the Monte Carlo
and Black Scholes models, taking into consideration the best estimate of the
expected life of the option and the estimated number of shares that will
eventually vest.
Financial Instruments
Financial assets and financial liabilities are recognised in the
Statement of Financial Position when the Group becomes party to the
contractual provisions of the instrument. Financial assets are
derecognised when the contractual rights to the cash flows from the financial
asset expire or when the contractual rights to those assets are transferred.
Financial liabilities are derecognised when the obligation specified in the
contract is discharged, cancelled or expired.
3. Accounting Policies (continued)
Impairment of Financial Instruments
The Group recognises an allowance for expected credit losses ('ECLs')
for all debt instruments not held at fair value through profit or loss. ECLs
are based on the difference between the contractual cash flows due in
accordance with the contract and all the cash flows that the Group expects to
receive, discounted at an approximation of the original effective interest
rate ('EIR'). The expected cash flows will include cash flows from the sale of
collateral held or other credit enhancements that are integral to the
contractual terms
IFRS 9.5.5.1 ECLs are recognised in two stages. For credit exposures
for which there has not been a significant increase in credit risk since
initial recognition, ECLs are provided for credit losses that result from
default events that are possible within the next 12-months (a 12-month ECL).
For those credit exposures for which there has been a significant increase in
credit risk since initial recognition, a loss allowance is required for credit
losses expected over the remaining life of the exposure, irrespective of the
timing of the default (a lifetime ECL).
The Group considers a financial asset in default when contractual
payments are 90 days past due. However, in certain cases, the Group may also
consider a financial asset to be in default when internal or external
information indicates that the Group is unlikely to receive the outstanding
contractual amounts in full before taking into account any credit enhancements
held by the Group. A financial asset is written off when there is no
reasonable expectation of recovering the contractual cash flows and usually
occurs when past due for more than one year and not subject to enforcement
activity.
At each reporting date, the Group assesses whether financial assets
carried at amortised cost are credit impaired. A financial asset is
credit-impaired when one or more events that have a detrimental impact on the
estimated future cash flows of the financial asset have occurred.
Property Plant and Equipment
Property, plant and equipment are stated at cost net of
accumulated depreciation and accumulated impairment losses. Cost comprises
purchase cost together with any incidental costs of acquisition.
Depreciation is provided to write down the cost less the estimated
residual value of all tangible fixed assets by equal instalments over their
estimated useful economic lives on a straight-line basis. The following rates
are applied.
Computer equipment 3 years straight line
The gain or loss arising on the disposal of an asset is determined as
the difference between the sale proceeds and the carrying value of the asset
and is credited or charged to profit or loss.
Trade and Other Receivables
Trade and other receivables, and amounts owed by Group undertakings,
are classified at amortised cost and recognised initially at fair value and
subsequently measured at amortised cost using the effective interest method
(except for short-term receivables where interest is immaterial) less
provisions for impairment. These assets are held to collect contractual cash
flows being solely the payments of the principal amount and interest.
Provisions for impairment of trade receivables are recognised for expected
lifetime credit losses using the simplified approach. Impairment reviews of
other receivables, including those due from related parties, use the general
approach whereby twelve month expected losses are provided for and lifetime
credit losses are only recognised where there has been a significant increase
in credit risk, by monitoring the creditworthiness of the other party.
3. Accounting Policies (continued)
Cash and Cash Equivalents
Cash and cash equivalents are held at amortised cost and consist of
cash on hand, demand deposits and other short-term highly liquid investments
that are readily convertible to a known amount of cash and are subject to an
insignificant risk of changes in value. Further details are given in note 15.
Trade and Other Payables
Trade and other payables are initially measured at their fair value
and are subsequently measured at their amortised cost using the effective
interest rate method. This method allocates interest expense over the relevant
period by applying the 'effective interest rate' to the carrying amount of the
liability.
Classification As Debt Or Equity
Debt and equity instruments issued by the Group are classified as
either financial liabilities or as equity in accordance with the substance of
the contractual arrangements and the definitions of a financial liability and
an equity instrument.
Equity Instruments
An equity instrument is any contract that evidences a residual
interest in the assets of an entity after deducting all of its liabilities.
Equity instruments issued by the Group are recognised at the proceeds
received, net of direct issue costs.
Accounting Developments
New standards, amendments and interpretations adopted in the
preparation of the financial statements.
The IASB has issued the following standards and amendments, which
have been adopted by the Group in either the current or comparative period,
none of which have had a material impact on the financial statements.
Standard Impact
Initial Application of IFRS 17 and IFRS 9 - Comparative Information The Group adopted the amendments References to the Conceptual Framework for
IFRS Standards for the accounting period commencing 1 April 2022.
Deferred Tax related to Assets and Liabilities arising from a Single The Group adopted the amendments References to the Conceptual Framework for
Transaction IFRS Standards for the accounting period commencing 1 April 2022.
The Group does not expect any standards issued by the IASB, but not
yet effective, to have a material impact on the Group.
4. Critical Accounting Estimates and Judgements
The preparation of these financial statements requires management to
make judgements and estimates that affect the reported amounts of assets and
liabilities at each reporting date and the reported results. Actual results
could differ from these estimates. Information about such judgements and
estimations is contained in individual accounting policies.
Accounting Estimates and Judgements
The key accounting estimates and judgements used in the preparation
of the financial statements are as follows:
Recognition And Valuation of Exploration Assets
Exploration and evaluation assets include mineral rights and
exploration and evaluation costs, including geophysical, topographical,
geological and similar types of costs. Exploration and evaluation costs are
capitalised if management concludes that future economic benefits are likely
to be realised and determines that economically viable extraction operation
can be established as a result of exploration activities and internal
assessment of mineral resources. According to 'IFRS 6 Exploration for and
evaluation of mineral resources', the potential indicators of impairment
include: management's plans to discontinue the exploration activities, lack of
further substantial exploration expenditure planned, expiry of exploration
licences in the period or in the nearest future, or existence of other data
indicating the expenditure capitalised is not recoverable. At the end of each
reporting period, management assesses whether such indicators exist for the
exploration and evaluation assets capitalised, which requires significant
judgement. As of 31 March 2023 total exploration and evaluation costs
capitalised amounted to £2,478,738 (2022 - £1,489,379). Refer to note 11 for
more information.
Carrying Value of Investments in Subsidiary Undertakings
Management must consider the carrying value of investments in
subsidiary companies based on the ongoing performance of said company. The
nature of the judgement will impact whether or not there is deemed to be any
indicators of impairment, which could materially impact the carrying value of
those investments. The key driver of the assessment is linked to the
impairment review carried out in respect of exploration assets.
Share Based Payments
The Group measures the cost of equity-settled transactions with
employees by reference to the fair value of the equity instruments at the date
at which they are granted. The fair value is determined by using either the
Monte Carlo or Black-Scholes model taking into account the terms and
conditions upon which the instruments were granted, see note 19 for further
details.
5. Operating Segments
Operating segments are reported in a manner that is consistent with
the internal reporting provided to the chief operating decision maker. The
chief operating decision maker has been identified as the Board. The Board is
responsible for allocating resources and assessing performance of operating
segments.
The Group has two reportable segments, exploration and corporate,
which are the Group's strategic divisions. For each of the strategic divisions
the Board reviews internal management reports on a regular basis.
5. Operating Segments (continued)
The Group's reportable segments are:
Exploration: the exploration segment is presented as an aggregate of all Chile
licences held. Expenditure on exploration activities for each licence is used
to measure agreed upon expenditure targets for each licence to ensure the
licence clauses are met.
Corporate: the corporate segment includes the holding company costs in respect
of managing the group.
Segment result:
2023 2022
£ £
Exploration - Chile (819,801) (657,227)
Corporate - UK (478,910) (379,849)
Loss before tax (1,298,711) (1,037,076)
Taxation - -
Loss after tax (1,298,711) (1,037,076)
Segment assets and liabilities:
Non current assets 2023 2022
£ £
Exploration - Chile 2,480,347 1,489,379
Corporate - UK - -
Total 2,480,347 1,489,379
Total assets 2023 2022
£ £
Exploration - Chile 2,540,284 1,987,140
Corporate - UK 783,817 2,587,207
Total 3,324,101 4,574,347
Total liabilities 2023 2022
£ £
Exploration - Chile (21,192) (27,300)
Corporate - UK (103,541) (195,763)
Total (124,733) (223,063)
6. Operating Expenses
2023 2022
£ £
Staff costs (including share based payments) 494,261 272,738
Foreign exchange (gain)/loss (26,730) (25,036)
Auditor's remuneration 62,500 108,500
Travel expenses 46,421 38,409
IPO Costs - 222,473
Legal, professional & consultancy fees 231,366 230,012
Insurance 32,045 17,326
Subcontracted labour 202,132 28,831
Other administrative expenses 256,716 143,823
Total 1,298,711 1,037,076
As per the accounting policy disclosed in note 3 the Group has made the policy
choice to only capitalise specific identifiable exploration costs as an
intangible asset. Related administration and contractor costs (including
staff and labour costs) are expensed as incurred.
7. Auditor's Remuneration
2023 2022
£ £
Fees payable to the Company's auditor for the audit of the parent and 60,000 40,000
consolidated annual accounts
Total audit fees 60,000 40,000
Audit-related assurance services 2,500 68,500
Total non-audit fees 2,500 68,500
8. Employee Numbers and Costs
The average monthly number of people employed was:
Group Company
2023 2022 2023 2022
Number Number Number Number
Average number of employees: Directors 4 4 4 4
Administrative staff 5 2 1 1
Total 9 6 5 5
8. Employee Numbers and Costs (continued)
The aggregate remuneration of all employees, including Directors, comprises:
Group Company
2023 2022 2023 2022
£ £ £ £
Wages and salaries 341,076 158,322 242,972 144,359
Social security costs 21,755 23,622 13,998 22,494
Other pension costs 13,382 6,998 13,282 6,998
Share based payments 118,047 83,796 118,047 83,796
Total 494,260 272,738 388,299 257,647
Details of Directors' remuneration and pension entitlements are
disclosed in the Remuneration Report on page 15 of the Annual Report. Please
refer to the Directors Remuneration report and related party note (note 21)
for additional disclosure relating to key management personnel.
The aggregate amount of gains made by Directors on the exercise of
share options was £Nil (2022: £Nil).
9. Taxation
2023 2022
£ £
Current tax
Current period - UK corporation tax - -
Adjustments in respect of prior periods - -
Foreign current tax expense - -
Total current tax - -
Deferred tax
Origination and reversal of temporary differences - -
Adjustments in respect of prior periods - -
Impact of change in tax rate - -
Total deferred tax - -
Total tax charge - -
The standard rate of tax applied to reported profit on ordinary activities is
19% (2022: 19%). The Finance Act 2021, which was substantively enacted on 24
May 2021, created a 25% main rate, 19% small profits rate and a marginal rate
which is effective from 1 April 2023.
9. Taxation (continued)
The tax charge for the year can be reconciled to the loss per the
income statement as follows:
2023 2022
£ £
Loss before tax (1,298,711) (1,037,076)
Tax charge at 19.0 % (2022: 19.0%) (246,755) (197,044)
Expenses not deductible for tax 19,169 138,115
Remeasurement of deferred tax for changes in tax rates (22,502) (14,822)
Adjustments to losses 564 -
Difference in overseas tax rates (49,188) (39,434)
Movement in deferred tax not recognised 298,712 113,185
Total tax expense - -
Deferred tax in relation to carried forward losses is not recognised as there
is deemed to be uncertainty over when they will be recoverable.
The Company has tax losses of £449,169 (2022: £68,296) carried forward. The
Group has tax losses of £1,809,391 (2022: £997,083) carried forward.
10. Earnings Per Share
Basic earnings per share is calculated by dividing the net income for
the period attributable to ordinary equity holders by the weighted average
number of ordinary shares outstanding during the period.
Diluted earnings per share amounts are calculated by dividing the
profit attributable to owners of the parent by the weighted average number of
ordinary shares in issue during the financial year, adjusted for the effects
of potentially dilutive options. The dilutive effect is calculated on the full
exercise of all potentially dilutive ordinary share options granted by the
Group, including performance-based options which the Group considers to have
been earned
The calculations of earnings per share are based upon the following:
2023 2022
£ £
Loss for the year (1,298,711) (1,037,076)
Number Number
Weighted average number of shares in issue 212,819,244 110,584,402
Weighted average number of shares - basic 212,819,244 110,584,402
Share options 160,030,082 49,981,998
Weighted average number of shares - diluted 372,849,326 160,566,400
Pence Pence
Earnings per share - basic (0.610) (0.938)
Earnings per share - diluted (0.610) (0.938)
In accordance with IAS 33, basic and diluted earnings per share are
identical for the Group as the effect of the exercise of the share options
would be to decrease the loss per share.
11. Intangible Assets
Group Exploration
assets
Cost £
As at 1 April 2021 -
Business combinations 1,229,076
Additions 191,753
Exchange difference 68,550
As at 1 April 2022 1,489,379
Additions 923,529
Exchange difference 65,830
As at 31 March 2023 2,478,738
Accumulated Amortisation
As at 1 April 2021 -
Charge for the period -
As at 1 April 2022 -
Charge for the year -
As at 31 March 2023 -
Carrying Amount:
As at 31 March 2023 2,478,738
As at 31 March 2022 1,489,379
Exploration projects in Chile are at an early stage of development
and there are no JORC (Joint Ore Reserves Committee) or non-JORC compliant
resource estimates available to enable value in use calculations to be
prepared.
In accordance with IFRS 6, the Directors undertook an assessment of the
following areas and circumstances which could indicate the existence of
impairment:
· The Group's right to explore in an area has expired, or will
expire in the near future without renewal.
· No further exploration or evaluation is planned or budgeted for.
· A decision has been taken by the Board to discontinue exploration
and evaluation in an area due to the absence of a commercial level of
reserves.
· Sufficient data exists to indicate that the book value may not be
fully recovered from future development and production.
Following their assessment, the Directors concluded that no
impairment charge was necessary for the year ended 31 March 2023 (2022:
£Nil).
The Company had no intangible assets at 31 March 2023 or 31 March
2022.
12. Property, Plant and Equipment
Group Computer equipment
Cost £
As at 1 April 2021 -
Additions -
Exchange difference -
As at 1 April 2022 -
Additions 2,205
Exchange difference (59)
As at 31 March 2023 2,146
Accumulated Amortisation
As at 1 April 2021 -
Charge for the period -
As at 1 April 2022 -
Charge for the year (551)
Exchange difference 14
As at 31 March 2023 (537)
Carrying Amount:
As at 31 March 2023 1,609
As at 31 March 2022 -
The Company had no plant, property and equipment at 31 March 2023 or 31 March
2022.
13. Investments
Company Amounts owed by subsidiary Shares in group undertakings
£ £ Total
£
At 1 April 2022 1,419,684 1,221,561 2,641,245
Additions 1,350,305 - 1,350,305
Carrying value at end of the year 2,769,989 1,221,561 3,991,550
At 31 March 2023 the Company owned the following subsidiary:
Registered Office Holding Proportion of Nature of Business
Voting Rights and Shares Held
Pacific Trends Resources Chile SpA 1 Ordinary Shares 100% Mining and exploration
13. Investments (continued)
1. Avenue El Bosque Central No. 92, 7th floor, Borough of Las Condes,
Metropolitan Region
The credit risk of related parties is estimated based on the expected
recoverable amount, taking into account the creditworthiness of the other
party. Any expected credit loss is calculated based on the general approach as
set out in IFRS 9. The Directors have determined that there has not been an
increased credit risk within the year and no impairment charge has been
recognised against these balances.
Amounts owed by group undertakings are interest free and are due on demand.
The recoverability of this debt is dependent upon the liquidity of the
subsidiary's intangible assets. More details can be found in note 11.
14. Trade and Other Receivables
Group
2023 2022
£ £
Other receivables 49,528 159,337
Prepayments and accrued income 140,286 173,955
189,814 333,292
Company
2023 2022
£ £
Other receivables 33,997 157,548
Prepayments and accrued income 98,963 104,296
132,960 261,842
Other receivables consist of amounts owed in respect of shares subscribed for
as part of the IPO, as well as amounts due in respect of VAT.
15. Cash and Cash Equivalents
Group
2023 2022
£ £
Cash at bank 653,940 2,751,676
Company
2023 2022
£ £
Cash at bank 650,857 2,325,365
In the prior year, cash at bank amounting to £2,078,502 was held on trust by
PTR Holdings Limited, a registered Company in Australia, which is a related
party by virtue of common control. The cash was held in a bank account under
the name of PTR Holdings Limited and was governed by a treasury agreement,
specifying that the cash belonged to the Group and would be used to settle
Group expenses. On the basis that the movement of cash was controlled by the
Group it has been included within these financial statements as cash and cash
equivalents of the Group. All cash held was transferred to a Group bank
account on 1 April 2022.
15. Cash and Cash Equivalents (continued)
Banking facilities utilised by the Group are rated as follows:
· Bendigo and Adelaide Bank
A- (Fitch)
· Revolut
No rating available
· Banco
Security
BBB (Fitch)
16. Trade and Other Payables
Group
2023 2022
£ £
Other payables 54,810 107,277
Accruals 69,772 115,646
Other taxes and social security 151 140
124,733 223,063
Other payables principally consist of amounts outstanding for trade purchases
and ongoing costs. They are non-interest bearing and are typically settled on
30 to 60 day terms.
The Directors consider that the carrying value of trade and other payables
approximates their fair value. Trade and other payables are denominated in
Sterling. Great Southern Copper plc has financial risk management policies in
place to ensure that all payables are paid within the credit time frame and no
interest has been charged by any suppliers as a result of late payment of
invoices during the period.
Company
2023 2022
£ £
Other creditors 33,769 80,117
Accruals 69,772 115,646
103,541 195,763
17. Financial Instruments
Principal Financial Instruments
The principal financial instruments used by the Group, from which financial
instrument risk arises, are as follows:
Financial Assets
The Group held the following financial assets at amortised cost:
Group
2023 2022
£ £
Cash and cash equivalents 653,940 2,751,676
Other receivables (excluding VAT and prepayment) 41,946 81,564
695,886 2,833,239
17. Financial Instruments (continued)
Financial Liabilities
The Group held the following financial liabilities, classified as other
financial liabilities at amortised cost:
Group
2023 2022
£ £
Other payables and accruals 124,582 222,923
124,582 222,923
Financial Assets
The Company held the following financial assets at amortised cost:
Company
2023 2022
£ £
Cash and cash equivalents 650,857 2,325,365
Other receivables (excluding VAT and prepayments) 26,416 79,774
677,273 2,405,139
Financial Liabilities
The Company held the following financial liabilities, classified as other
financial liabilities at amortised cost:
Company
2023 2022
£ £
Other payables and accruals 103,541 195,763
103,541 195,763
The Group's activities expose it to certain financial risks: market risk,
credit risk and liquidity risk. The overall risk management programme focuses
upon the unpredictability of financial markets and seeks to minimise potential
adverse effects on the Group's financial performance. Risk management is
carried out by the Directors, who identify and evaluate financial risks in
close cooperation with key members of staff.
Market Risk
Market risk is the risk of loss that may arise from changes in market factors
such as interest rates and foreign exchange rates.
Foreign Currency Risk Management
Currency risk is the risk that the financial results of the Group will be
adversely affected by changes in exchange rates to which the Group is exposed.
No foreign currency sensitivities have been included as they are deemed to be
immaterial. The Group undertakes certain transactions denominated in foreign
currencies. The majority of the Company's expenditures are denominated in
Pound Sterling, while its exploration expenses are incurred in US Dollars,
accordingly, the result for the year are adversely impacted by depreciation of
the Pound Sterling against the US$ while the Group's assets are positively
impacted by appreciation of the US$ against the Pound. Currency risk is
monitored on a regular basis.
17. Financial Instruments (continued)
The following is a note of the assets and liabilities denominated at each
period end in US Dollars:
Group
2023 2022
$ $
Other receivables 19,209 2,348
Cash and cash equivalents 735,765 582,899
Other payables (26,026) (34,891)
728,948 550,356
Liquidity Risk
Liquidity risk is the risk that the Group will not be able to meet its
financial obligations as they fall due. This risk relates to the Group's
prudent liquidity risk management and implies maintaining sufficient cash. The
Directors monitor rolling forecasts of the Group's liquidity and cash and cash
equivalents based upon expected cash flow.
Credit Risk
Credit risk is the risk that a customer may default or not meet its
obligations to the Group on a timely basis, leading to financial losses to the
Group. Credit risk arises from cash and deposits kept with banks, advances
paid and other receivables. The maximum exposure to credit risk at the
reporting date to recognised financial assets is the carrying amount, net of
any provisions for impairment of those assets, as disclosed in the statement
of financial position and notes to the financial statements. The consolidated
entity does not hold any collateral.
Generally, other receivables are written off when there is no reasonable
expectation of recovery. Indicators of this include the failure of a debtor to
engage in a repayment plan, no active enforcement activity and a failure to
make contractual payments for a period greater than 1 year.
Capital Risk Management
The Group's objectives when managing capital are to safeguard the Group's
ability to continue as a going concern, to enable the Group to continue its
exploration and evaluation activities, and to maintain an optimal capital
structure to reduce the cost of capital. In order to maintain or adjust the
capital structure, the Group may adjust the issue of shares or sell assets to
reduce debts.
At 31 March 2023 the Group had borrowings of £Nil (2022: £Nil) and defines
capital based on the total equity of the Group. The Group monitors its level
of cash resources available against future planned exploration and evaluation
activities and may issue new shares in order to raise further funds from time
to time.
Fair Value Estimation
The carrying value of other receivables and payables are assumed to
approximate to their fair values because of the short-term nature of such
assets and the effect of discounting liabilities is negligible.
The Group is exposed to the risks that arise from its financial instruments.
The policies for managing those risks and the methods to measure them are
described earlier in this note.
Maturity Of Financial Assets And Liabilities
All of the Group's non-derivative financial liabilities and its financial
assets at the reporting date are either payable or receivable within one year.
18. Share Capital
Number of Shares in Issue
2023
Ordinary share capital Number £
Authorised, Issued and fully paid:
Ordinary shares of £0.01 as at 1 April 2022 212,476,100 2,124,761
Issued during the year 860,311 8,603
Ordinary shares of £0.01 as at 31 March 2023 213,336,411 2,133,364
Rights of Share Capital
Ordinary shares carry rights to dividends and other distributions from the
Company, as well as carrying voting rights.
On 29 July 2022, the Company issued ordinary shares of 336,365 with a nominal
value per share of £0.01 as remuneration for work performed by key management
personnel. The amount of remuneration in relation to the share issue amounted
to £14,019.
On 7 November 2022, the Company issued ordinary shares of 232,784 with a
nominal value per share of £0.01 as remuneration for work performed by key
management personnel. The amount of remuneration in relation to the share
issue amounted to £7,328.
On 27 February 2023, the Company issued ordinary shares of 291,162 with a
nominal value per share of £0.01 as remuneration for work performed by key
management personnel. The amount of remuneration in relation to the share
issue amounted to £7,154.
19. Share Based Payments
The Group had warrants and share option schemes in place during the year ended
31 March 2023 and 31 March 2022 as follows:
Warrants
On 7 December 2021 the Company issued 148,327,850 warrants. The warrants were
granted in the following tranches:
1.) 60,555,550 granted to Pacific Trends Resources Pty Ltd following the
acquisition of Pacific Trends Resources Chile SpA.
2.) 1,407,300 Broker warrants grated as part of the IPO.
3.) 70,365,000 placing warrants granted as part of the IPO.
4.) 16,000,000 conversion warrants granted to Foreign Dimensions Pty Ltd,
the largest individual shareholder.
All warrants with the exception of the Broker Warrants entitle the holder to
subscribe for one ordinary share at a price of £0.10 per share. The warrants
became exercisable on admission and have a maximum life of two years. If the
warrants have not been exercised within that time they will expire. The Broker
warrants have an exercise price of £0.05 and a life of three years.
19. Share Based Payments (continued)
During the year, the Company became aware that the terms of the 1,407,300
warrants granted to its broker on the 7 December 2021 did not correctly
reflect the terms set out on 6 October 2020. As a result, these warrants have
been cancelled and regranted. The new warrants granted during the year have an
exercise price of £0.05 and a life of three years.
Weighted average exercise price Weighted average exercise price
Number of Number of warrants
warrants
2023 2023 2022 2022
Outstanding at beginning of the year 148,327,850 £0.10 - -
Exercised during the year - - - -
Granted during the year 1,407,300 £0.05 148,327,850 £0.10
Cancelled during the year (1,407,300) £0.10 - -
Lapsed during the year - - - -
Outstanding at the end of the year 148,327,850 £0.10 148,327,850 £0.10
Exercisable at the end of the year 148,327,850 148,327,850
Broker warrants fall within the scope of IFRS 2 - Share Based Payments as
there is an associated service attached to their issue, whilst the other
warrants referred to above do not confer any such service so have not been
subject to valuation. The weighted average contract length of the warrants is
2 years, whilst the remaining average contractual life is 8 months (2022: 1
year and 8 months).
Valuation
The warrants were originally valued at 2% of the capital raised by SI Capital.
This totalled £Nil (2022: £56,364) and has been debited to share premium.
Share options
On 7 December 2021 the Company issued 11,702,232 options to directors and key
personnel employed within the group as follows:
1.) 10,105,554 options were granted to directors and a key employee of Great
Southern Copper Plc. These options are split into 2 equal tranches, all carry
an exercise price of £0.05 per share and have the following vesting
conditions:
a.) 50% vest in 3 tranches, 1/3 on admission, 1/3 on the first anniversary of
admission and 1/3 on the second anniversary of admission.
b.) 50% vest in 3 tranches, 1/3 when the share price reaches £0.10, 1/3 when
the share price reaches £0.15 and 1/3 when the share price reaches £0.20.
19. Share Based Payments (continued)
The options must be exercised by the third anniversary of admission.
2.) 1,596,678 options were granted to other key personnel, including employees
of Pacific Trends Resources Chile SpA. These options all carry an exercise
price of £0.01 and vest in 3 tranches, 1/3 on admission, 1/3 on the first
anniversary of admission and 1/3 on the second anniversary of admission.
The options must be exercised by 7 December 2026.
Weighted average exercise price Weighted average exercise price
Number of Number of options
options
2023 2023 2022 2022
Outstanding at beginning of the year 11,702,232 £0.04 - -
Exercised during the year - - - -
Granted during the year - - 11,702,232 £0.04
Lapsed during the year - - - -
Outstanding at the end of the year 11,702,232 £0.04 11,702,232 £0.04
Exercisable at the end of the year 9,485,747 7,269,262
The weighted average contract length on the options was 4 years (2022: Nil).
The remaining average contractual life of the options was 2 years 8 months
(2022: 3 years 8 months).
Valuation
Given the existence of market based vesting conditions in certain of the
options, the valuation exercise has been split into 2 parts with the options
including those conditions being valued using a Monte Carlo option pricing
model, whilst the other options have been valued using the Black Scholes
option pricing model.
Options granted in the year to 31 March 2022 - Monte Carlo Model
Share price at date of grant £0.0455
Fair value at the year end £0.02
Exercise price £0.05
Time to expiry (years) 3 years
Risk-free rate (%) - 3 years 0.46%
Volatility (%) 70.0%
Dividend yield (%) 0%
Employee retention rate (%) 100 %
19. Share Based Payments (continued)
Options granted in the year to 31 March 2022 - Black Scholes Model
Share price at date of grant £0.0455
Fair value at the year end - £0.01 options £0.04
Fair value at the year end - £0.05 options £0.02
Exercise price £0.05; £0.01
Time to expiry (years) 3 and 5 years
Risk-free rate (%) - £0.01 options 0.46%
Risk-free rate (%) - £0.05 options 0.46%
Volatility (%) 70.0%
Dividend yield (%) 0%
Employee retention rate (%) 100% for employees with £0.01 options,
100% for employees with £0.05 options
Volatility is measured using a weekly share price over a period of 5 years
prior to the date of grant.
The risk-free rate is derived using a 3 and 5 year gilt rate.
The total share-based payment expense in relations to warrants and options in
the year is £88,607 (2022: £83,796).
During the year, there is a share based payment expense relating to directors
remuneration of £29,440 (2022: £56,364).
20. Reserves
Share Premium
Consideration received for shares issued above their nominal value net of
transaction costs.
Share Based Payments
The cumulative share-based payment expenses of unvested awards that have not
been exercised.
Shares To Be Issued
Shares to be issued to a director in lieu of cash remuneration.
Foreign Currency Translation
Cumulative gains and losses in respect of the translation of the results of
overseas subsidiaries into the presentational currency of the Group.
Retained Earnings
Cumulative profit and loss net of distributions to owners.
21. Related Party Transactions
Remuneration Of Key Personnel - Group
Remuneration of key management personnel, considered to be the Directors and
other senior management of the Group is as follows:
2023 2022
£'000 £'000
Short-term remuneration* 256,970 166,853
Other pension costs 13,382 6,998
Share-based payments 93,958 55,930
364,310 229,781
Reconciliation of short-term remuneration
* As above 256,970 166,853
Less: Employer's National Insurance (13,998) (3,760)
Chief Financial Officer's remuneration (70,270) (30,772)
Add: Remuneration settled through issue of shares 29,440 6,196
Total per Directors' Remuneration Report in the Annual Report 202,142 138,517
Transactions And Balances With Key Personnel - Group
Balances outstanding to key personnel at year end totalled to £13,357 (2022:
£489).
During the prior year the majority shareholder provided funding to the Group,
in advance of the IPO, totalling £821,668. As part of the IPO £800,000 of
this loan was converted into 16,000,000 ordinary shares of the Company. As
at 31 March 2023 a balance of £14,150 was owed to the shareholder (2022:
£21,668).
SI Capital Limited are a related party through common key management
personnel. During the prior year £222,274 was paid to SI Capital Limited for
the services relating to the IPO. In addition to this, SI Capital Limited were
issued with broker warrants (see note 19). The charge in relation to Broker
warrants of £Nil (2022: £56,364) is included within share premium. At 31
March 2023 amounts owed to the Group by SI Capital Limited totalled £25,000
(2022: £75,000).
During the year payments were made to third parties in respect of services
provided by two of the Directors. Payments made to Hillstone Resources and SI
Capital Limited totalled £Nil (2022: £20,617) and £25,000 (2022: £21,758)
respectively. During the year £25,000 (2022: £Nil) management fees were
charged by SI Capital Limited.
During the year the charge for the services of the Chief Executive were made
through Metal Ventures Inc totalling £105,714 (2022: £69,984), with £12,931
outstanding at year end (2022: £16,209).
The Directors' disclosures have been included in the Directors Remuneration
report.
22. Contingencies and Commitments
The option agreements held by the Company in relation to the San Lorenzo and
Especularita projects give the Company the discretionary right to acquire the
relevant concessions, provided the annual option fees totalling US$125,000 due
by March 2024 specified in such agreements, have been paid in full. There are
no royalty, third party payments, or other obligations in favour of third
parties regarding the option payments or the concessions to which they relate.
The Company's commitments to meeting and finalising its purchase of the
mineral concessions under the Option Agreements, if it chooses to do so, are
summarised in the following table:
Especularita San Lorenzo
Date Payment Date Payment
01/03/2024 Final Payment US$ 1,100,000 01/06/2024 US$ 50,000
Extension of final payment to 01/03/2025 US$ 100,000 01/06/2025 Final Payment US$ 1,610,000
Extension of final payment to 01/03/2026 US$ 100,000 Extension of final payment to 01/06/2026 US$ 100,000
Extension of final payment to 01/06/2027 US$ 100,000
To acquire 100% of the Especularita project a total payment of US$1.5m is
required (of which US$400,000 has been paid to date) with the final payment
due before 01/03/2024. The Company may defer the final payment for a period of
2 years at a cost of US$100,000 per additional year. To acquire 100% of the
San Lorenzo project a total payment of US$2.0m is required (of which
US$340,000 has been paid to date), with a quota of US$50,000 due before
01/06/2024 and the final payment due before 01/06/2025. The Company may defer
the final payment for a period of 2 years at a cost of US$100,000 per
additional year.
23. Post Balance Sheet Events
On 15 May 2023, the Company entered into an agreement with Foreign Dimensions
Pty Limited ("FD") whereby FD agreed to provide the Company with a convertible
unsecured loan facility in the aggregate sum of £501,000. The loan is to be
made in two tranches:
· £250,000 on 31 August 2023; and
· £251,000 on 11 September 2023.
Automatic conversion of the loan into Ordinary Shares ("Conversion Shares") in
the Company at a price of 1.2p per share, and the grant of an equivalent
number of warrants exercisable at 2.4p is subject to certain conditions, in
particular publication of a prospectus approved by the FCA in relation to, and
authority being granted by the Company's shareholders for, the allotment and
issue of the Conversion Shares and the grant of the warrants.
On 19 May 2023, by way of a private placing, the Company issued a further
41,749,998 Ordinary Shares at a price 1.2p per share, raising £501,000 before
costs, each with the right to a warrant attached, also to be granted
conditional on satisfaction of the conditions above, and exercisable at 2.4p.
23. Post Balance Sheet Events (continued)
On the same date, the Company made loans of £10,000 each to two of the
Directors, Stuart Greene and Nick Briers to enable them each to subscribe for
shares in the abovementioned placing. These loans, which
are interest free, are being repaid from their after tax salaries. It is
envisaged that both loans will be repaid before 30 November 2023.
The Company has announced the appointment of Martin Page as Finance Director.
Mr Page will take up his appointment on 1 August 2023.
24. Ultimate Controlling Party
In the opinion of the Directors, there is considered to be no ultimate
controlling party.
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