REG - Great Southrn.Copper - Full Year Results and Publication of Annual Report
26/07/2024 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240726:nRSZ9247Xa&default-theme=true
RNS Number : 9247X Great Southern Copper PLC 26 July 2024
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE UK
VERSION OF THE MARKET ABUSE REGULATION NO 596/2014 WHICH IS PART OF ENGLISH
LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL) ACT 2018, AS AMENDED. ON
PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS
INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.
26 July 2024
Great Southern Copper plc
("GSC" or the "Company")
Full Year Results and Publication of Annual Report
Great Southern Copper plc (LSE: GSCU), the Company focused on copper-gold and
lithium exploration in Chile, announces its results for the year ended 31
March 2024.
HIGHLIGHTS
Especularita Project
· Exploration activities have identified a strong pipeline of high
priority drill targets.
· Results from mapping and sampling activity at the Victoria
prospect, showing assay grades in rock chips of up to 6.9% Cu and 1.85g/t Au.
· Results from mapping at sampling activity at Teresita prospect,
showing assay grades in rock chips of up to 5.97% Cu and 13.9g/t Au.
· Completed stream sediment sampling survey, setting stage for
follow-up mapping and sampling campaign to identify new prospects.
· Results from drone-magnetic survey, demonstrating high-grade
Abundante and Teresita Cu-Au prospects as magnetic anomalies.
Especularita post period
· On 9 April 2024, scout drilling at Teresita and Abundante
confirmed intrusive-related and breccia-hosted mineralisation systems with all
drill holes intersecting anomalous gold and copper mineralisation.
· Expanded footprint in highly prospective region:
o On 12 June 2024, signed agreement for Artemisa prospect adding 1,665 ha to
Especularita and began permitting process for drilling.
o On 8 July 2024, signed agreement for Cerro Negro prospect, including
historical Mostaza Mine, which has indicated presence high-grade Cu-Ag-Au
mineralisation, and commenced the permitting process for drilling.
San Lorenzo
· Received pleasing results from reconnaissance sampling at newly
acquired Suyay prospect, indicating potential porphyry-type mineralisation.
Monte Lithium
· Delivered strategic objective to acquire a third project, the
Monti Lithium Project - 33,100 ha in the Salar de Atacama, Chile's largest
lithium brine producing district.
Corporate
· Appointed Martin Page as Chief Financial Officer and member of
the Board.
· Raised £1m and £905,000 through well-supported placing and
subscription agreements.
Corporate post-period
· On 26 June 2024, raised £1.25m through a conditional placing and
subscription to fund drilling and exploration work at Especularita.
Sam Garrett, Chief Executive Officer of Great Southern Copper, said: "It has
been another strong year for GSC. We made good progress across our project
portfolio with excellent results from our exploration campaigns, establishing
a very strong pipeline of drill targets.
"Our Especularita copper-gold project remains our primary focus. The
impressive assay results and magnetic surveys have bolstered our confidence in
the project's potential and we are excited by to push forwards our follow-up
exploration activities. Our recent acquisitions of Artemisa and Cerro Negro
further expand our footprint at Especularita, strategically positioning us to
unlock value from these highly prospective areas with significant potential.
"The next six to twelve months promise to be an exciting period for the
Company with plans in place to drill our priority targets. Our strengthened
financial position enables us to accelerate our exploration activities,
ensuring that we maximise the value of our asset base."
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 (0) 20 4582 3500
SI Capital Limited
Nick Emerson +44 (0) 1483 413500
Gracechurch Group
Harry Chathli, Alexis Gore, Henry Gamble +44 (0) 20 4582 3500
About Great Southern Copper
Great Southern Copper PLC is a UK-listed mineral exploration company focused
on the discovery of copper-gold and lithium deposits in Chile. The Company has
the option to acquire rights to 100% of two projects in the under-explored
coastal belt of Chile that are prospective for large scale copper-gold
deposits. In addition, the Company has the option to acquire rights to 100% of
a lithium project located in the Salar de Atacama district of Chile. Chile is
a globally significant mining jurisdiction being the world's largest copper
producer and the second-largest producer of lithium.
The two, early-stage Cu-Au projects comprise the Especularita and San Lorenzo
Projects, both located in the coastal metallogenic belt of Chile which hosts
significant copper mines and deposits, including Teck's Carmen de Andacollo
copper mine, and boasts excellent access to infrastructure such as roads,
power and ports. Significant historical small-scale and artisanal workings for
both copper and gold are readily evident in both exploration project areas.
The Company's Monti Lithium project is strategically located in the pre-Andean
region of Salar de Atacama which is Chile's premier lithium-producing region
with well-established lithium mining operations and infrastructure.
Great Southern Copper is strategically positioned to support the global market
for copper and lithium - both critical battery metals in the clean energy
transition around the world. The Company is actively engaged in exploration
and evaluation work programmes targeting both large tonnage, low to medium
grade Cu-Au and Li deposits as well as 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
It has been an important year of progress for Great Southern Copper plc that
has laid the foundations for an exciting period of upcoming exploration. Over
the year, the Company was successful in both advancing its existing prospects
and identifying additional prospects to diversify our portfolio. The past 12
months have seen us maintain momentum, achieving several important milestones
across the business in line with our strategy.
Exploration projects
We remain excited by our portfolio of prospects in Chile, which includes
large-scale projects and multiple high-grade copper-gold ("Cu-Au") targets
ready to drill. During the period, GSC saw particularly encouraging
developments at our Especularita project, where we received strong results
from mapping and sampling activity across various prospects. Post period, in
April 2024, our confidence was further strengthened by the results from our
scout RC drilling programmes at the Abundante and Teresita prospects, all of
which delivered evidence of high grades of Cu-Au.
In June 2024, we were pleased to expand our footprint at Especularita by
adding the Artemisa and Cerro Negro group of concessions. These acquisitions
consist of 1,748 additional hectares, encompassing five highly prospective
areas within the project. Subsequent to the year end GSC dropped a number of
non-core concessions at both Especularita and San Lorenzo, showing strong
discipline over its areas of interest.
In addition, we delivered our strategic objective to acquire a third project
and diversify our portfolio through the acquisition of the Monti Lithium
Project. The Monti Lithium Project concession applications surround the Salar
de Atacama in northern Chile, a premier lithium brine production region.
Chile, already the largest producer and exporter of copper globally, also
holds the world's largest reserves of lithium and is the second-largest
producer after Australia. The government's National Lithium Strategy,
initiated in 2023, aims to promote the development of lithium production,
making it an ideal location for exploration.
Chile's long history of mining and metal processing have provided the country
with a highly educated and experience workforce, supported by first-class
infrastructure and a robust legal framework which is highly receptive to
foreign ownership of mining assets. The Board believes these characteristics
provide GSC with an advantage in an underexplored area, given historical
evidence, excellent infrastructure, and the rights to earn 100% of the
projects with no overhanging payments.
As both copper and lithium are essential for powering the global drive towards
net zero, we believe GSC is well-positioned to support the critical metals
market, which is forecasted to experience growing pressure on supply. Global
demand for copper is rising, and the growth of the electric vehicle market
will further increase pressure on lithium supply.
Corporate
We were delighted to welcome Martin Page as Chief Financial Officer ("CFO")
and as a member of the Board. Martin brings with him more than 15 years of
experience in finance within the mineral resources sector and has been an
excellent addition to the team since taking the role in August 2023.
Despite the continuing headwinds in the capital markets we were able to secure
three fundraisings for the Company which raised a total of c. £3.15m
(including amounts raised in June 2024). Firstly, in May 2023 we secured a
total of £1.0m through a combination of a placing and subscription and a
convertible loan facility, and in November 2023, we raised another £905,000
through a well-supported placing and subscription. Most recently in June 2024,
we were successful in securing an additional £1.25m in funding supported by
existing, institutional and new investors, a testament to the strength of our
project portfolio, our strategy, and reputation within the investor community.
The funds will enable us to accelerate our exploration efforts with our strong
pipeline of targets.
Looking ahead
Our commitment remains to deliver value to our shareholders through strategic
exploration, disciplined capital allocation, and a focus on high-quality,
high-potential projects.
We are exploring in a tier one region, with excellent infrastructure, for
resources where there is high demand and increasing pressure on supply. Our
portfolio includes large-scale, promising prospects with significant potential
and numerous drill-ready targets. As a result, the Board is looking forward to
continuing our progress over the next twelve months and updating shareholders
as we advance our exploration campaigns.
Finally, I would like to thank our highly knowledgeable and dedicated team,
including the Board, our management and our team on the ground in Chile for
their passion and devotion towards advancing the Company's exploration efforts
whilst ensuring the values, beliefs and standards of the Company are upheld
and promoted.
Charles Bond
25 July 2024
Operations Report
The Company has three projects all located in Chile, Especularita, San Lorenzo
and Monti Lithium. Of these, the primary focus is its Especularita project
which is highly prospective for porphyry Cu-Au, intrusive related Cu-Au and
high-grade IOCG Skarn-type mineralisation.
The Company's Especularita and San Lorenzo projects are strategically located
within the coastal metallogenic belt, offering significant infrastructure
advantages over explorers operating in the high-altitude Andean belt including
access to roads, power, towns, and ports, which facilitate more efficient and
cost-effective operations. Geologically, the coastal metallogenic belt also
offers the company deposit style optionality being known for large IOCG
deposits as well as porphyry copper deposits.
Both projects are along trend from major deposits and exhibit substantial
evidence of historical artisanal mining, yet the areas remain relatively
underexplored compared to the Andean regions. This under-exploration presents
an opportunity for significant discoveries in a region with proven mineral
potential.
We have also acquired the Monti Lithium project in Chile during the period,
which is a lithium brine project located in the highly prospective Salar de
Atacama in Chile(1).
Exploration activities at the projects for the year to 31 March 2024 and
subsequent to the year end are set out below.
Especularita Project
At Especularita, we have seen some particularly exciting developments as we
advanced our exploration campaign through the year. We received strong results
from mapping and sampling activity at various prospect locations across the
project. Assay results from our rock chip sampling at Victoria, returned
grades up to 6.9% Cu and 1.85g/t Au, highlighting the significance of the
Victoria prospect with consistent high grades of copper and associated
gold-silver mapped and sampled in the outcrop(2).
The results of our drone-magnetics survey at Especularita were also highly
encouraging, which identified high grade Cu-Au prospects, Abundante and
Teresita, as magnetic anomalies, prompting plans to drill at these sites.(3)
It also identified multiple NE-trending targets within the Teresita magnetic
anomaly corridor and bullseye anomalies that potentially represent
breccia-pipe or pencil-porphyry type Cu deposits.
Building on these findings, we completed our scout drilling programme at the
Abundante and Teresita prospects(4). At Teresita, broad intervals of
anomalous Cu-Au results from scout RC drill-testing of the Gato Negro vein
validated our IRGS target models and we are now aggressively advancing our
follow-up exploration activities. Significantly, the Teresita drill results
also confirm the IRGS nature of mineralisation at the Company's Victoria
prospect.
Our initial exploration programme at the Aurelia prospect delivered another
high-grade copper target into the drilling prospect pipeline, with assay
grades up to 6.76% Cu(5). This success gave us the impetus for follow-up
exploration, including soil sampling and petrochemical surveys, setting the
stage for initial scout drilling at the prospect.
We also announced results from our latest mapping and sampling programme at
our Victoria prospect, which reported grades up to 4.04% Cu, 4.57g/t
Au and 26.7g/t Ag(6). These results continue to highlight the significance
of the Victoria prospect with consistent high grades of copper and associated
gold-silver mapped and sampled in outcrop. Work is now continuing at Victoria
with a view to better understanding the controls on mineralisation and
advancing the prospect toward being ready for drill testing.
In February 2024, we announced our intention to expand the Company's footprint
at Especularita by signing binding letters of intent for two new high-priority
prospects, Artemisa and Cerro Negro(7), and in June and July 2024
respectively, we completed those agreements adding a total of 1,748 ha of new
concessions, including drill-ready targets.
The Artemisa group of concessions comprise five new prospect areas and
significantly expands the Company's Victoria and Lipa exploration targets. The
Cerro Negro option includes the historic Mostaza Cu-Ag-Au Mine which was
previously owned by Antofagasta Minerals. Due diligence work by GSC indicates
that mining in the past did not exhaust the Mostaza mineral inventory and as
such potential exists to expand the known deposit in all directions as well as
discover new deposits along trend.
San Lorenzo
San Lorenzo comprises both mining and exploration concessions covering 25,680
ha. The project area includes extensive historical mine workings for
high-grade Cu-Au as well as evidence of placer gold workings in two locations.
During the period, the Company received the results of reconnaissance
sampling at the newly acquired Suyay prospect with results up to 4.13g/t Au
and 1.75% Cu(8). The anomalous geochemistry combined with our early
understanding of the geology and controls on mineralisation now suggests that
there is potential at Suyay for a high-level gold-rich porphyry or
intrusive-related system. The Company has identified a number of large
radiometric anomalies potentially representative of porphyry-type
silica-clay-sericite alteration which it intends to target with regional
mapping and sampling programmes.
Monti Lithium
GSC made its first foray into lithium exploration with the acquisition of an
option over the Monti Lithium Project located in the Salar de Atacama region
of Chile.
The Group secured rights to 100% ownership of the Monti Lithium Project
comprising concession applications surrounding the Salar de Atacama, Chile's
premier lithium producing region. The Salar de Atacama is a tier 1 lithium
production region with estimated pre-mine resources greater than 6.0 Mt LiCO3.
Lithium is hosted in subterranean brine solutions which are pumped to the
surface, where the lithium is extracted via evaporation processes producing a
lithium carbonate (LiCO3) concentrate product.
The Monti Project initially comprised 81 concession applications for a total
combined concession area of 235 km(2) (23,500 ha).
In October 2023, the total concession application area of the Monti Lithium
project was expanded to 331 km(2) (33,100 ha), strategically targeting areas
where the Company believes the fluid-flow of Li-rich brines into the Salar de
Atacama basin is enhanced by large-scale structures(9).
GSC is now conducting due diligence on the project with a view to ranking the
concession areas on the basis of potential access to brine-rich horizons in
the basin in-flow regions. Work will include reconnaissance field trips to
undertake surface sampling and mapping programmes.
Outlook
It has been a positive year of progress as we continue to make significant
strides across our prospects, particularly at Especularita. Our exploration
campaigns have yielded encouraging results and we have established a very
strong pipeline of drill targets. Whilst acknowledging that GSC will need to
continue to raise funds for its activities, with a strengthened capital base,
we are poised to accelerate our exploration efforts, where we aim to commence
drilling shortly at our highly prospective targets.
Our Especularita project remains our primary focus, given its highly promising
potential for porphyry Cu-Au, intrusive-related Cu-Au, and high-grade IOCG
Skarn-type mineralisation. The impressive assay results and magnetic surveys
have reinforced our confidence in the project's potential, and we are
advancing with aggressive follow-up exploration activities. The expansion of
our footprint at Especularita, including the recent acquisition of Artemisa
and Cerro Negro, strategically positions us to unlock significant value from
these highly prospective areas. In addition, the team has shown strong
discipline in dropping certain non-core concessions subsequent to the year
end.
Looking ahead, our strategic priorities are clear and the next six to twelve
months promise to be an exciting period for the Company with our plans to
drill our priority targets, namely Cerro Negro, Victoria and Aurelia. All
drilling activities are subject to permitting approvals, rig availability and
community consultations. We will continue to prioritise and advance our
high-potential targets with a focused and disciplined approach aimed at
advancing prospects to drill-ready status. Our strengthened financial position
enables us to commence our exploration drilling plans at Cerro Negro, ensuring
that we maximise the value of our asset base.
Sam Garrett
Chief Executive Officer
25 July 2024
References:
1. RNS 9894M (20 Sep 2023): GSC Secures "Monti Lithium Project" in the
Prolific Salar de Atacama Region, Chile
2. RNS 0032C (05 Feb 2024): Rock Chip Sampling at Victoria Prospect
Delivers Assay Results up to 4.04% Cu, 4.16g/t Au and 26.7g/t Ag from Multiple
Quartz-Sulphide Vein Breccias
3. RNS 4849P (10 Oct 2023): Especularita Magnetics Survey Identifies
Multiple Targets
4. RNS 5914A (23 Jan 2024): Scout Drilling Completed at Abundante
Prospect, Especularita,
5. RNS 4473Q (18 Oct 2023): High Grade Rock Chips up to 6.76% Cu at
Aurelia Prospect, Especularita
6. RNS 0032C (05 Feb 2024): Rock Chip Sampling at Victoria Prospect
Delivers Assay Results up to 4.04% Cu, 4.16g/t Au and 26.7g/t Ag from Multiple
Quartz-Sulphide Vein Breccias,
(https://www.londonstockexchange.com/news-article/GSCU/sampling-at-victoria-delivers-strong-assay-results/16317303)
7. RNS 0741E (22 Feb 2024): GSC Expands Especularita Project with Two New
Agreements
8. RNS 4266J (16 Aug 2023): New "Suyay" Prospect Delivers High-Grade
Gold-Copper in Rock Chip Samples, San Lorenzo
9. RNS 7843R (31 Oct 2023): Monti Lithium Project Grows by 40% with New
Concession Filing
Extract from Strategic Report
The Directors present their Strategic Report on the Group and Company for the
year ended 31 March 2024.
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 key exploration projects in Chile comprise the Especularita
Cu-Au project located approximately 350km north of Santiago and the San
Lorenzo Cu-Au project north east of the coastal town of La Serena in northern
Chile. Both projects are situated in the Coastal Cordillera of Chile with good
access to infrastructure. In addition, the Company has an option over the
Monti Lithium project located in the Salar de Atacama district of northern
Chile.
Subsequent Events
On 26 June 2024, the Company completed a fund-raising through the placing and
subscription for 104,416,667 new ordinary shares of 1p each at £0.012 per
share raising £1.25m before expenses.
On 12 June 2024, the Company signed a binding purchase option agreement to
acquire the Artemisa copper project at the Company's Especularita project in
Chile.
On 29 June 2024, the Company signed a binding purchase option agreement to
acquire the Cerro Negro copper project at the Company's Especularita project
in Chile.
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 licences and operations of the Company are in jurisdictions outside of the
UK and there will, therefore, be a number of risks that the Company will be
unable to control.
Whilst the Company will make 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 adoption of a mining royalty tax in Chile may
adversely affect the Company's operations in the future.
On 10 August 2023, a mining royalty law was enacted which introduces a new
royalty system payable by copper mining companies. The law contains a variable
royalty rate, dependent on the quantity of copper sold and will apply to
companies producing more than 50,000 metric tonnes of fine copper per annum.
The Company is aware of the law and will continue to monitor relevant
regulations and any other proposed changes and specifically the impact they
could have on any potential future operations of the Company.
Permitting
The Company's rights to the exploration 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 currently 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. Pursuant to article 112 of the Mining Code, amended by Law No.
21,420 of 4 February 2022 which became effective on 1 January 2024,
exploration concessions will have a duration of 4 years counted since their
constitution (and the 4-year period cannot be extended).
Exploitation concessions are valid indefinitely so long as annual fees are
paid to the Chilean government. Pursuant to article 142 bis of the Mining
Code, added by Law No. 21,420 of February 4, 2022 which became effective on 1
January 2024, the annual fee for proving the start and maintenance of mining
works will be US$8/ha. In the event that the exploitation concessions do not
comply with such requirement (maintenance of mining works), a progressive
annual fee will be applied for the aforementioned measure, as follows:(i)
USD32/ha for the first 5 years of validity; (ii) USD64/ha from year 6 to year
10; (iii) USD72/ha from year 11 to year 15; (iv) USD96/ha from year 16 to year
20; (v) USD240/ha from year 21 to year 25; (vi) USD580/ha from year 26 to year
30; and (vi) USD960/ha from year 31. Pursuant to article 142 bis of the Mining
Code, added by Law No. 21,420 of February 4, 2022 which became effective on 1
January 2024, the annual fee for proving the start and maintenance of mining
works will be US$8/ha.
The process to incorporate an exploitation 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 an exploitation 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 PTRC's granted exploration concessions, or
any exploration concessions granted in the future, will be renewed.
Additionally, there is no guarantee that PTRC's 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 the 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. Whilst PTRC is satisfied that it has
submitted all option agreements not currently registered in the Chilean Mining
Registrar for registration, 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 and could be subject to
potential litigation by third parties claiming an interest in them.
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 condition 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 Pacific Trends Resources Chile Spa ("PTRC") meets
its environmental and social obligations in Chile.
· Ensuring that the Group maintains as low an impact on climate
change as possible
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 Especularita;
· identified mineralised vein breccia targets for follow up work;
and
· added a third project to the Company - being the Monti lithium
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 a number of 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 2024.
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 (2023: £nil).
Subsequent Events
Further details on subsequent events can be found in note 24 and in the
strategic report on page 19 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 2024, the Group's cash at bank amounted to £503k; at the date
of signing this report, the balance of cash and committed funds amounted to
£1,005k.
The Board has reviewed the Group's cash flow forecast up to 31 July 2025 and
are aware that additional funds will 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 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, however the requirement for further uncommitted fundings casts
significant doubt over the Group's ability to continue as a going concern.
The auditors have acknowledged this going concern uncertainty in their
unqualified audit report.
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, whose names and functions are listed on page 7 and 8 of
the Annual Report, 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
25 July 2024
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
YEAR ENDED 31 MARCH 2024
Year ended Year ended
31 March 2024 31 March 2023
£'000 £'000
Note
Continuing operations
Administrative expenses 6 (1,759) (1,299)
Operating loss (1,759) (1,299)
Loss before taxation (1,759) (1,299)
Taxation 9 - -
Loss for the year attributable to the owners of the Company
(1,759) (1,299)
Other comprehensive income
Items that may be reclassified subsequently to
profit or loss:
Exchange rate differences on translation of foreign 29
operations
1
Total comprehensive loss attributable to the owners of the Company
(1,758) (1,270)
Pence Pence
Earnings per share - basic and diluted 10 (0.638) (0.610)
The notes form part of these financial statements
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2024
2024 2023
Note £'000 £'000
Assets
Non-current assets
Intangible assets 11 3,202 2,479
Property, plant and equipment 12 1 2
Total non-current assets 3,203 2,481
Current assets
Trade and other receivables 14 93 190
Cash and cash equivalents 15 503 654
Total current assets 596 844
Total assets 3,799 3,325
Liabilities
Current Liabilities
Trade and other payables 16 (204) (126)
Total liabilities (204) (126)
Net current assets 392 718
Net assets 3,595 3,199
Equity
Share capital 18 3,435 2,133
Share premium 20 3,816 3,176
Share based payment reserve 19 342 236
Foreign currency translation reserve 20 6 5
Retained earnings 20 (4,004) (2,351)
Total equity attributable to the owners of the Company
3,595 3,199
The notes form part of these financial statements
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2024
2024 2023
Note £'000 £'000
Assets 13
Non-current assets
Investments 5,269 3,992
Total non-current assets 3,992
Current assets
Trade and other receivables 14 72 133
Cash and cash equivalents 15 492 651
Total current assets 564 784
Total assets 5,833 4,776
Liabilities
Current liabilities
Trade and other payables 16 (138) (104)
Total liabilities (138) (104)
Net current assets 426 680
Net assets 5,695 4,672
Equity
Share capital 18 3,435 2,133
Share premium 20 3,816 3,176
Share based payments reserve 19 342 236
Retained earnings 20 (1,898) (873)
Total equity 5,695 4,672
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 was
£1,131k (2023: £479k)
The notes form part of these financial statements
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
YEAR ENDED 31 MARCH 2024
Foreign currency translation reserve
Share £'000
Share Share based Retained earnings
capital premium payments £'000 Total Equity
£'000
£'000 £'000 £'000
As at 1 April 2022 2,131 3,176 140 (24) (1,072) 4,351
Loss for the year - - - - (1,299) (1,299)
Exchange rate differences on translation of foreign operations - - - 29 - 29
Total comprehensive income for the year - - - 29 (1,299) (1,270)
Transactions with shareholders:
Issue of share capital, net of issue costs 2 - (22) - 20 -
Share based payments - - 118 - - 118
As at 31 March 2023 2,133 3,176 236 5 (2,351) 3,199
Loss for the year - - - - (1,759) (1,759)
Exchange rate differences on translation of foreign operations - - - 1 - 1
Total comprehensive income for the year - - - 1 (1,759) (1,758)
Transactions with shareholders:
Issue of share capital, net of issue costs (note 18) 1,302 640 - - - 1,942
Share based payments - - 212 - - 212
Cancellation of share options - - (106) - 106 -
As at 31 March 2024 3,435 3,816 342 6 (4,004) 3,595
COMPANY STATEMENT OF CHANGES IN EQUITY
YEAR ENDED 31 MARCH 2024
Share Share premium Share Based payments Retained earnings Total
capital £'000 £'000 £'000 equity
£'000 £'000
As at 1 April 2022 2,131 3,176 140 (414) 5,033
Loss for the year - - - (479) (479)
Total comprehensive income for the year - - - (479) (479)
Transactions with shareholders:
Issue of shares, net of issue costs 2 - (22) 20 -
Share based payments - - 118 - 118
As at 31 March 2023 2,133 3,176 236 (873) 4,672
Loss for the year - - - (1,131) (1,131)
Total comprehensive income for the year - - - (1,131) (1,131)
Transactions with shareholders:
Issue of shares, net of issue costs (note 18) 1,302 640 - - 1,942
Share based payments - - 212 - 212
Cancellation of share options - - (106) 106 -
As at 31 March 2024 3,435 3,816 342 (1,898) 5,695
CONSOLIDATED STATEMENT OF CASH FLOWS
YEAR ENDED 31 MARCH 2024
Year ended Year ended
31 March 31 March
2024 2023
£'000 £'000
Cash flows from operating activities
Loss for the year (1,759) (1,299)
Adjustments for:
Share based payments 212 89
Depreciation 1 1
Remuneration settled through issue of shares 68 29
Net foreign exchange losses 57 -
Working capital adjustments
Decrease in trade and other receivables 73 148
Increase/(decrease) in trade and other payables 78 (179)
Net cash outflow from operations (1,270) (1,211)
Cash flows from investing activities
Purchase of intangible assets (759) (924)
Purchase of plant, property and equipment - (2)
Net cash used in investing activities (759) (926)
Cash flows from financing activities
Issue of ordinary share capital, net of issue costs 1,376 -
Proceeds from convertible loan note 501 -
Net cash generated from financing activities 1,877 -
Net decrease in cash and cash equivalents (152) (2,137)
Exchange gains on cash and cash equivalents 1 39
Cash and cash equivalents brought forward 654 2,752
Cash and cash equivalents carried forward 503 654
Significant non-cash transactions from investing and financing activities are
as follows:
2024 2023
£'000 £'000
Share option charge 212 89
Remuneration settled through issue of shares 68 29
Shares issued to redeem convertible loan note 501 -
Issuance of shares in lieu of option payment 20 -
COMPANY STATEMENT OF CASH FLOWS
YEAR ENDED 31 MARCH 2024
Year ended Year ended
31 March 31 March
2024 2023
£'000 £'000
Net cash flows from operating activities
Loss for the year (1,131) (479)
Adjustments for:
Share based payments 212 89
Remuneration settled through issue of shares 68 29
Working capital adjustments
Increase in long term receivables (1,257) (1,350)
Decrease in trade and other receivables 37 129
Increase/(decrease) in trade and other payables 35 (92)
Net cash used in operations (2,036) (1,674)
Cash flows from financing activities
Issue of ordinary share capital, net of issue costs 1,376 -
Proceeds from convertible loan note 501 -
Net cash generated from financing activities 1,877 -
Net decrease in cash and cash equivalents (159) (1,674)
Cash and cash equivalents brought forward 651 2,325
Cash and cash equivalents carried forward 492 651
Significant non-cash transactions from investing and financing activities are
as follows:
2024 2023
£'000 £'000
Share option charge 212 89
Remuneration settled through issue of shares 68 29
Shares issued to redeem convertible loan note 501 -
Issuance of shares in lieu of option payment 20 -
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH 2024
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 thousand 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. The financial statements are presented in £ Sterling and
rounded to the nearest £'000 unless otherwise stated.
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 2024, the Group's cash at bank amounted to £503k; at the date
of signing this report, the balance of cash and committed funds amounted to
£1,005k.
The Board has reviewed the Group's cash flow forecast up to 31 July 2025 and
are aware that additional funds will 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 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, however the requirement for further uncommitted fundings casts
significant doubt over the Group's ability to continue as a going concern.
The auditors have acknowledged this going concern uncertainty in their
unqualified audit report.
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.
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.
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.
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.
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.
Convertible loan notes
The convertible loan note issued during the year is considered to be a
compound financial instrument comprising a financial liability (loan) and an
embedded derivative (equity). At the date of issue both elements were included
in the balance sheet as liabilities and held at fair value as the equity
element was considered immaterial. The fair value of the loan element was
estimated using the prevailing market interest rate for similar non
convertible debt. Subsequently the loan element was accounted for at amortised
cost. On conversion of the loan note to equity, the difference between the
nominal value of the equity issued and the contracted conversion price was
credited to the share premium account.
Accounting Developments
There have been no new standards, amendments and interpretations adopted in
the preparation of the financial statements. 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 2024 total exploration and evaluation costs capitalised amounted to
£3,202,080 (2023: £2,478,738). 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. The impairment review is
carried out under IAS 36 - Impairment of assets and assesses impairment
indicators such as market value declines, negative changes in the industry and
obsolescence of the underlying assets. At 31 March 2024, the carrying value
amounted to £5,269,417 (2023: £3,992,000). Refer to note 13 for more
information.
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.
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:
2024 2023
£'000 £'000
Exploration - Chile (628) (820)
Corporate - UK (1,131) (478)
Loss before tax (1,759) (1,299)
Taxation - -
Loss after tax (1,759) (1,299)
Segment assets and liabilities:
Non current assets 2024 2023
£'000 £'000
Exploration - Chile 3,202 2,481
Corporate - UK - -
Total 3,202 2,481
Total assets 2024 2023
£'000 £'000
Exploration - Chile 3,234 2,541
Corporate - UK 565 784
Total 3,799 3,325
Total liabilities 2024 2023
£'000 £'000
Exploration - Chile (64) (21)
Corporate - UK (140) (105)
Total (204) (126)
6. Operating Expenses
2024 2023
£'000 £'000
Staff costs (including share based payments) 700 494
Foreign exchange loss/(gain) 68 (27)
Auditor's remuneration 80 63
Travel expenses 90 46
Legal, professional & consultancy fees 250 231
Insurance 36 32
Subcontracted labour 252 202
Other administrative expenses 283 257
Total 1,759 1,299
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
2024 2023
£'000 £'000
Fees payable to the Company's auditor for the audit of the parent and
consolidated annual accounts
55 60
Total audit fees 55 60
Audit-related assurance services 35 3
Total non-audit fees 35 3
8. Employee Numbers and Costs
The average monthly number of people employed was:
Group Company
2024 2023 2024 2023
Number Number Number Number
Average number of employees: Directors 5 4 5 4
Administrative staff 5 5 - 1
Total 10 9 5 5
The aggregate remuneration of all employees, including Directors, comprises:
Group Company
2024 2023 2024 2023
£'000 £'000 £'000 £'000
Wages and salaries 451 341 324 243
Social security costs 23 22 13 14
Other pension costs 14 13 14 13
Share based payments 212 118 219 118
Total 700 494 570 388
Details of Directors' remuneration and pension entitlements are disclosed in
the Remuneration Report on page 16 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 (2023: £Nil).
9. Taxation
2024 2023
£'000 £'000
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
25% (2023: 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 2024.
The tax charge for the year can be reconciled to the loss per the income
statement as follows:
2024 2023
£'000 £'000
Loss before tax (1,759) (1,299)
Tax charge at 25.0 % (2023: 19.0%) (440) (247)
Expenses not deductible for tax 56 19
Remeasurement of deferred tax for changes in tax rates - (23)
Adjustments to losses - 1
Difference in overseas tax rates - (49)
Movement in deferred tax not recognised 384 299
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 £1,344,970 (2023: £449,169) carried forward.
The Group has tax losses of £3,344,205 (2023: £1,809,391) 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:
2024 2023
£'000 £'000
Loss for the year (1,759) (1,299)
Number Number
Weighted average number of shares in issue 275,726,884 212,819,244
Weighted average number of shares - basic 275,726,884 212,819,244
Share options 154,531,593 160,030,082
Weighted average number of shares - diluted 430,258,477 372,849,326
Pence Pence
Earnings per share - basic (0.638) (0.610)
Earnings per share - diluted (0.638) (0.610)
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 £'000
As at 1 April 2022 1,489
Additions 924
Exchange difference 66
As at 1 April 2023 2,479
Additions 779
Exchange difference (56)
As at 31 March 2024 3,202
Accumulated Amortisation
As at 1 April 2022 -
Charge for the period -
As at 1 April 2023 -
Charge for the year -
As at 31 March 2024 -
Carrying Amount:
As at 31 March 2024 3,202
As at 31 March 2023 2,479
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 the year end the Group dropped a number of non-core concession
areas, none of which has had any material expenditure from historic drilling
or exploration campaigns.
Following their assessment, the Directors concluded that no impairment charge
was necessary for the year ended 31 March 2024 (2023: £Nil).
The Company had no intangible assets at 31 March 2024 or 31 March 2023.
12. Property, Plant and Equipment
Group Computer equipment
Cost £'000
As at 1 April 2022 -
Additions 2
Exchange difference -
As at 1 April 2023 2
Additions -
Exchange difference -
As at 31 March 2024 2
Accumulated Depreciation
As at 1 April 2022 -
Charge for the period -
As at 1 April 2023 -
Charge for the year (1)
Exchange difference -
As at 31 March 2024 (1)
Carrying Amount:
As at 31 March 2024 1
As at 31 March 2023 2
The Company had no plant, property and equipment at 31 March 2024 or 31 March
2023.
13. Investments
Company Amounts owed by subsidiary Shares in group undertakings
£'000 £'000 Total
£'000
At 1 April 2023 2,770 1,222 3,992
Additions 1,277 - 1,277
Carrying value at end of the year 4,047 1,222 5,269
At 31 March 2024 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
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
2024 2023
£'000 £'000
Other receivables 8 50
Prepayments 85 140
93 190
Company
2024 2023
£'000 £'000
Other receivables 8 34
Prepayments 64 99
72 133
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
2024 2023
£'000 £'000
Cash at bank 503 654
Company
2024 2023
£'000 £'000
Cash at bank 492 651
Banking facilities utilised by the Group are rated as follows:
· Bendigo and Adelaide Bank A-
(Fitch)
· Revolut
No rating available
· Banco Security
BBB (Fitch)
Cash was held in the following currencies:
Group
2024 2023
£'000 £'000
GBP Sterling 421 33
US Dollars 11 592
Australian Dollars 62 25
Chilean Peso 9 4
503 654
16. Trade and Other Payables
Group
2024 2023
£'000 £'000
Other payables 136 55
Accruals 68 71
204 126
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
2024 2023
£'000 £'000
Other payables 70 34
Accruals 68 70
138 104
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
2024 2023
£'000 £'000
Cash and cash equivalents 503 654
Other receivables (excluding VAT and prepayment) - 42
503 696
Financial Liabilities
The Group held the following financial liabilities, classified as other
financial liabilities at amortised cost:
Group
2024 2023
£'000 £'000
Other payables and accruals 204 125
204 125
Financial Assets
The Company held the following financial assets at amortised cost:
Company
2024 2023
£'000 £'000
Cash and cash equivalents 492 651
Other receivables (excluding VAT and prepayments) - 26
492 677
Financial Liabilities
The Company held the following financial liabilities, classified as other
financial liabilities at amortised cost:
Company
2024 2023
£'000 £'000
Other payables and accruals 138 104
138 104
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.
The following is a note of the assets and liabilities denominated at each
period end in US Dollars:
Group
2024 2023
$'000 $'000
Other receivables 10 19
Cash and cash equivalents 14 736
Other payables (170) (26)
(146) 729
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 2024 the Group had borrowings of £Nil (2023: £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
2024
Ordinary share capital Number £'000
Authorised, Issued and fully paid:
Ordinary shares of £0.01 as at 1 April 2023 212,336,411 2,133
Issued during the year 130,155,076 1,302
Ordinary shares of £0.01 as at 31 March 2024 343,491,487 3,435
Rights of Share Capital
Ordinary shares carry rights to dividends and other distributions from the
Company, as well as carrying voting rights.
On 19 May 2023, the Company issued 41,749,998 ordinary shares with a nominal
value of £0.01 per share, through a placing and subscription at a share price
of £0.0120, raising £501,000 before costs.
On 14 December 2023, the Company issued 40,222,206 ordinary shares with a
nominal value of £0.01 per share, through a placing and subscription at a
share price of £0.0225, raising £905,000 before costs.
On 14 December 2023, the Company issued 41,749,995 ordinary shares with a
nominal value of £0.01 per share, following the conversion of a convertible
loan facility between the Company and its major shareholder, at a share price
of £0.0120 per share (see note 23).
On 14 December 2023, the Company issued 1,693,767 ordinary shares with a
nominal value of £0.01 per share, as part payment to the vendors of the San
Lorenzo project, at a share price of £0.0120 per share.
On 14 December 2023, the Company issued 4,436,834 ordinary shares 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 £60,656.
On 16 January 2024, the Company issued 302,276 ordinary shares 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 £7,817.
19. Share Based Payments
The Group had warrants and share option schemes in place during the year ended
31 March 2024 and 31 March 2023 as follows:
Warrants - outstanding at the beginning of the year
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 the above warrants, with the exception of the Broker Warrants entitled the
holder to subscribe for one ordinary share at a price of £0.10 per share. The
warrants became exercisable on admission and had a maximum life of two years.
All warrants, excepting the Broker Warrants time expired during the year. The
Broker warrants have an exercise price of £0.05 and a life of three years.
Warrants - granted during the year
On 19 May 2023, the Company issued 41,749,998 warrants (conditional on the
publication of a prospectus that was subsequently issued on 7 December 2023)
in relation to a share placing and subscription.
On 19 May 2023, the Company issued 41,749,995 warrants (conditional on the
publication of a prospectus that was subsequently issued on 7 December 2023)
in relation to a convertible loan note (see note 23).
The above warrants entitled the holder to subscribe for one ordinary share at
a price of £0.024 per share. The warrants became immediately exercisable
and had a maximum life of three years.
On 14 December 2023, the Company issued 40,222,206 warrants in relation to a
share placing and subscription. The warrants entitled the holder to
subscribe for one ordinary share at a price of £0.045 per share. The
warrants became immediately exercisable and had a maximum life of two years
Weighted average exercise price Weighted average exercise price
Number of Number of warrants
warrants
2024 2024 2023 2023
Outstanding at beginning of the year 148,327,850 £0.10 148,327,850 £0.10
Granted during the year 123,722,199 £0.03 1,407,300 £0.05
Cancelled during the year - - (1,407,300) £0.05
Lapsed during the year (146,920,550) £0.10 - -
Outstanding at the end of the year 125,129,499 £0.03 148,327,850 £0.10
Exercisable at the end of the year 125,129,499 £0.03 148,327,850 £0.10
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 8 months, whilst the remaining average contractual life is 1 year 11
months (2023: 8 months).
Share options
On 19 September 2023 the Company issued 22,500,000 options to director and
other personnel employed within the group. These options all carry an
exercise price of £0.01 and vest in 3 tranches, 1/3 on the first anniversary
of the grant, 1/3 on the second anniversary of the grant and 1/3 on the third
anniversary of the grant and expire on 19 September 2030.
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.
On 19 September 2023, in relation to the issuance of the new 2023 share
options, 4,800,138 share options (as described in 1b above) were cancelled.
The share-based payment expense in relation to these options was accelerated
and fully recognised in the year totalling £79,123.
The remaining options must be exercised by the third anniversary of admission,
being 20 December 2024.
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 above options (2) must be exercised by 7 December 2026.
Weighted average exercise price Weighted average exercise price
Number of Number of options
options
2024 2024 2023 2023
Outstanding at beginning of the year 11,702,232 £0.04 11,702,232 £0.04
Exercised during the year - - - -
Granted during the year 22,500,000 £0.01 - -
Cancelled during the year (4,800,138) £0.05 - -
Outstanding at the end of the year 29,402,094 £0.02 11,702,232 £0.04
Exercisable at the end of the year 6,649,455 9,485,747
The weighted average contract length on the options was 6 years (2023: 4
years). The remaining average contractual life of the options was 5 years 2
months (2023: 3 years 8 months).
Valuation
Given the existence of market based vesting conditions in certain of the
options, the valuation exercise was 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 on 7 December 2021 valued - 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 %
Options granted on 7 December 2021 valued - Black Scholes Model
Share price at date of grant £0.0455
Fair value at the year end - £0.01 options £0.02
Fair value at the year end - £0.05 options £0.01
Exercise price £0.05; £0.01
Time to expiry (years) 3 and 5 years
Risk-free rate (%) - £0.01 options 0.35%
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
Options granted on 19 September 2023 valued - Black Scholes Model
Share price at date of grant £0.025
Fair value at the year end - £0.01 options £0.017
Exercise price £0.01
Time to expiry (years) 7 years
Risk-free rate (%) - £0.01 options 0.35%
Volatility (%) 70.0%
Dividend yield (%) 0%
Employee retention rate (%) 100% for employees with £0.01 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 £212,005 (2023: £88,607).
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:
2024 2023
£'000 £'000
Short-term remuneration* 330 257
Other pension costs 13 13
Share-based payments 177 94
520 364
Reconciliation of short-term remuneration
* As above 330 257
Less: Employer's National Insurance (13) (13)
Previous Chief Financial Officer's remuneration (32) (70)
Add: Remuneration settled through issue of shares - 29
Total per Directors' Remuneration Report - Page 16 in the Annual Report 285 203
Transactions And Balances With Key Personnel - Group
Balances outstanding to key personnel at year end totalled to £9,504 (2023:
£13,357).
As at 31 March 2024 a balance of £14,150 was owed to the largest shareholder
(2023: £14,150).
SI Capital Limited are a related party through common key management
personnel. The charge in relation to Broker warrants of £Nil (2023: £nil) is
included within share premium. At 31 March 2024 amounts owed to the Group by
SI Capital Limited totalled £nil (2023: £25,000).
During the year payments were made to third parties in respect of services
provided by one of the Directors. Payments made to SI Capital Limited totalled
£25,000 (2023: £21,758) respectively. During the year £25,000 (2023:
£25,000) broker 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 £138,137 (2023: £105,714).
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$100,000 due
by March 2024 specified in such agreements, have been paid in full. There are
no royalty, third party payments, or other obligations in favour of third
parties regarding the option payments or the concessions to which they relate.
The Company's commitments to meeting and finalising its purchase of the
mineral concessions under the Option Agreements, if it chooses to do so, are
summarised in the following table:
Especularita San Lorenzo
Date Payment Date Payment
01/03/2025 Final Payment US$ 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 on 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, which it has opted to do.
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$100,000 per additional year, which it has opted to do.
In September 2023, the Company signed a binding term sheet which allows the
Company to earn 100% of the mining rights of the Monti Lithium project once
its concessions are granted. Details of the related commitments are given in
the table below:
Monti
Date Cash US$ Value in GSC equity US$
01/03/2024 (due payable) US$50,000 -
01/09/2024 US$50,000 US$50,000
01/09/2025 US$50,000 US$50,000
01/09/2026 US$1,000,000 US$1,000,000
23. Convertible loan note
On 15 May 2023, the Company entered into a convertible loan totalling
£501,000 with its major shareholder Foreign Dimensions Pty Ltd. The loan
was interest free, unsecured and automatically converted to equity on issuance
of a prospectus. Following the publication of a prospectus on 7 December
2023, the loan was fully redeemed by conversion to 41,749,995 ordinary shares
with a nominal value of £0.01 per share (see note 18). No amounts remained
due or payable under the facility at the balance sheet date.
£'000
As at 1 April 2023 -
Convertible loan drawn in the year 501
Conversion of loan to equity (501)
As at 31 March 2024 -
The convertible loan note was initially recognised as a compound financial
instrument. The host contract was recognised as a liability on the balance
sheet. The conversion element would have been recognised as equity, although
the balance was calculated as immaterial, and not relevant at the year end
given the full conversion of the instrument as detailed above.
24. Post Balance Sheet Events
On 26 June 2024, the Company completed a fund-raising through the placing and
subscription for 104,416,667 new ordinary shares of 1p each at £0.012 per
share raising £1.25m before expenses.
On 12 June 2024, the Company signed a binding purchase option agreement to
acquire the Artemisa copper project at the Company's Especularita project in
Chile.
On 29 June 2024, the Company signed a binding purchase option agreement to
acquire the Cerro Negro copper project at the Company's Especularita project
in Chile.
25. Ultimate Controlling Party
In the opinion of the Directors, there is considered to be no ultimate
controlling party.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR RAMPTMTATBRIRecent news on Great Southern Copper
See all newsREG - Great Southrn.Copper - Grant of Share Options
AnnouncementREG - Great Southrn.Copper - Exploration Results Extend Cerro Negro
AnnouncementREG - Great Southrn.Copper - Exercise of Warrants
AnnouncementREG - Great Southrn.Copper - Diamond Drilling Commences at Viuda Negra Prospect
AnnouncementREG - Great Southrn.Copper - Scout RC Drilling at Viuda
Announcement