REG - Kendrick Resources - Annual Financial Report
29/06/2022 18:30
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RNS Number : 7159Q Kendrick Resources PLC 29 June 2022
29 June 2022
Kendrick Resources Plc
("Kendrick" or the "Company")
Final Results for period to 29 December 2021
Kendrick Resources Plc, (LSE: KEN) a mineral exploration and development
company, with projects in Scandinavia, reports its full year results for the
year ended 29 December 2021.
The Annual Report and Financial Statements for the year ended 29 December 2021
will shortly be available on the Company's website. Copies of the Annual
Report and Financial Statements will be uploaded to the National Storage
Mechanism shortly.
This announcement contains information which, prior to its disclosure, was
inside information as stipulated under Regulation 11 of the Market Abuse
(Amendment) (EU Exit) Regulations 2019/310 (as amended).
For additional information please contact:
Kendrick Resources Plc: Tel: +44 203 961 6086
Chairman Colin Bird
Novum Securities Tel: +44 7399 9400
Financial Adviser David Coffman / Lucy Bowden
Joint Broker Jon Bellis
Shard Capital Partners LLP Tel: +44 207 186 9952
Joint Broker Damon Heath / Isabella Pierre
CHAIRMAN'S STATEMENT
Dear Shareholder,
Kendrick Resources Plc ("Kendrick") was successfully admitted to the Standard
List of the London Stock Exchange on 6(th) May 2022. Kendrick's Projects are
located in top mining jurisdictions within Scandinavia and are focused on the
new generation battery metals for both energy storage and the metals needed
for power generation. In Sweden and Finland, the Company has significant
tonnages of vanadium associated with magnetite capable of producing high-grade
vanadium magnetite concentrates for sale to global markets. Previous
metallurgical test work suggests that Kendrick's vanadium magnetite
concentrates are superior to most other concentrates globally, in that the
vanadium values in the concentrates are above 2% V2O5 and both the uranium and
titanium values are lower than the norm.
The Company has some 160 million tonnes of Inferred Mineral Resources with 44
million tonnes in Sweden and the balance in Finland. The defined Mineral
Resources at Airijoki (Sweden) and Koitelainen (Finland) are open-ended and
drilling programmes will take place as seasonal influences allow, with the
objective of increasing both Mineral Resources. In Finland the large intrusion
which contains the vanadium bearing magnetite, also contains chrome and PGM's
mineralization, which will be investigated. At Airijoki in Sweden extension of
the strike will be investigated.
Vanadium Redox Flow Batteries are emerging as an important battery storage
technology for the large-scale storage of energy generated from solar panels
and wind farms. Whilst this application is rapidly emerging, the traditional
uses of vanadium in steel manufacturing are also increasing (i.e. in the
production of high-quality steel for applications where strength and lightness
is important). Thus, lighter vehicles will require greater proportions of
vanadium, and estimates suggest that the vanadium content in new electric
vehicles may increase by up to 40%, putting upwards pressure on vanadium
prices.
The Company has several projects in central Sweden which have similar geology
and vanadium mineralisation to the Mineral Resources at the Airijoki Project
in northern Sweden. These projects which will be investigated for quantum
and quality, as seasonal influences allow.
The Company intends to carry out fast-track metallurgical test work on
vanadium mineralisation from the Airijoki Project, in order to determine a
suitable process to produce either vanadium pentoxide flakes or vanadium
electrolyte to add significant value against the alternative of producing a
vanadium magnetite concentrate. Previous metallurgical tests carried out by
Pursuit Minerals have been conducted on three samples across four grind
sizes. These have shown in that increasing grind size increases mass pull to
magnetic concentrate with only a slight loss of vanadium grade. As a result of
this we are confident that we will be able to increase the mass pull of
vanadium into the magnetite concentrate without affecting the overall vanadium
magnetite concentrate grade. If we are successful in this regard, the overall
project economics will improve dramatically.
In Norway, the Company has a number of nickel projects all of which are open
ended both on strike and at depth. Several of the projects are located in
close enough proximity to each other to potentially support a central
processing unit.
We are fortunate that we have a significant exploration database much of which
has not been fully utilised and we are currently assessing this database in
order to generate new projects and drill targets. The cost and time of
producing the historical exploration data would have been immense and we are
thus very fortunate to have a "paid for start" to our exploration programs.
Norway has long history of nickel production and to have significant resources
in the rapidly emerging nickel space is exciting especially when one considers
the location of the projects.
Nickel experienced a huge, abnormal price spike some three months ago, which
is now being normalised with prices hovering around the US$20,000 per tonne
mark. We believe that this price is sustainable although the economic
assessment of our projects will utilise the US$15,000 per tonne nickel price.
There is currently a shortage globally of nickel resources and 60% of
available known resources are oxides or laterites which have proven very
difficult to process in the past and little progress has been made in the cost
effective processing of nickel oxides and laterites. Kendrick is fortunate in
that our nickel resources in Norway are sulphides and therefore amenable to
conventional floatation technology which produces a concentrate for smelting.
We will be drilling the Norway nickel deposits on a continuing basis with the
objective of developing a Mineral Resource prior to undertaking feasibility
studies. A number of companies globally are now supplying relatively simple
options and co-venturing developing projects. This approach, if individual
tonnages and grade permit, may be an ideal way of fast-tracking nickel
concentrates from our Norwegian projects into European markets.
Our northern European location and industry contacts has already brought our
management team opportunities which were not obvious at the time of listing
the Company, and we look forward to pursuing these opportunities both
pro-actively and re-actively in the short-term.
I am excited about our projects and the competitive advantage we have in
northern Europe and the management team and I are looking forward to pursuing
the opportunities available and adding value for our shareholders in the
short-term future.
I would like to thank my fellow directors and the Kendrick Management Team for
their support during the pre-listing phase and their enthusiastic approach to
maximizing the benefit for shareholders from our existing project portfolio.
Results for the year
The Company reported a loss before taxation for the year of £325,000 (2020:
£33,000) mainly due to administrative costs of £289,000, including
professional, consulting and directors' fees . Net liabilities at 29
December 2021 amounted to £236,363 (2020: Net assets £89,000) including the
investment in the Nordic Projects and related transaction costs of £674,000
(2020: £Nil).
AGM and Resolutions
The resolutions for the forthcoming Annual General Meeting will be contained
in a separate Notice which will be made available to shareholders and on the
website www.kendrickresources.com (http://www.kendrickresources.com/) . The
Directors will recommend shareholders to vote in favour of all the resolutions
and a form of proxy will be dispatched to all shareholders for this purpose
Colin Bird
Chairman
29 June 2022
STRATEGIC REPORT
The Directors present their strategic report for the year ended 29 December
2021.
PRINCIPAL ACTIVITIES
The Company's principal activity is that of mining exploration and
development.
GOING CONCERN
As disclosed in Note 3, the Directors have a reasonable expectation that the
Company has adequate resources to continue in operational existence for a
period of at least, but not limited, 12 months from the date of approval of
the financial statements. For these reasons, the Directors continue to adopt
the going concern basis in preparing the financial statements
ENERGY CONSUMPTION
The Company consumed less than 40MWh during the period and as such is a Low
Energy User as defined in the Environmental Reporting Guidelines Including
streamlined energy and carbon reporting guidance March 2019 (Updated
Introduction and Chapters 1) and as such is not required to provide detailed
disclosures of energy and carbon information.
PROMOTION OF THE COMPANY FOR THE BENEFIT OF THE MEMBERS AS A WHOLE
The Directors' believe they have acted in the way most likely to promote the
success of the Company for the benefit of its members, as required by s172 of
the Companies Act 2006 as detailed below.
The requirements of s172 are for the Directors to:
- Consider the likely consequences of any decision in the long term
- Act fairly between the members of the Company,
- Maintain a reputation for high standards of business conduct,
- Consider the interests of the Company's employees,
- Foster the Company's relationships with suppliers, customers, and
others, and
- Consider the impact of the Company's operations on the community
and the environment.
Our Board of Directors remain aware of their responsibilities both within and
outside of the Group. Within the limitations of a Group with so few employees
we endeavour to follow these principles, and examples of the application of
the s172 are summarised and demonstrated below.
The Company operates as a mining exploration and development company which is
speculative in nature and at times may be dependent upon fund-raising for its
continued operation. The nature of the business is well understood by the
Company's members, employees and suppliers, and the Directors are transparent
about the cash position and funding requirements.
The Company is investing time in developing and fostering its relationships
with its key suppliers.
As a mining exploration company with future operations based in Scandinavia,
the Board takes seriously its ethical responsibilities to the communities
and environment in which it works.
The interests of future employees and consultants are a primary consideration
for the Board, and we have introduced an inclusive share-option programme
allowing them to share in the future success of the company. Personal
development opportunities are encouraged and supported.
KEY PERFORMANCE INDICATORS
Key performance indicators for the Company as a measure of financial control
are as follows:
Year ended Year ended
29 December 2021 29 December 2020
£ £
Total assets 885,096 254,434
Net assets/ (liabilities) (236,363) 88,623
Cash and cash equivalents 16,871 9,496
Trade and other payables (441,959) (165,811)
Loss before tax for the year (324,986) (33,433)
PRINCIPAL RISKS AND UNCERTAINTIES
The Company is subject to various risks similar to all exploration companies
operating in overseas locations relating to political, economic, legal,
industry and financial conditions, not all of which are within its control.
The Company identifies and monitors the key risks and uncertainties affecting
the Company and runs its business in a way that minimises the impact of such
risks where possible.
The following risks factors, which are not exhaustive, are particularly
relevant to the Company's current and future business activities:
Licensing and title risk
Governmental approvals, licences and permits are, as a practical matter,
subject to the discretion of the applicable governments or government
offices. The Company must generally and specifically in relation to future
projects comply with known standards, existing laws and regulations that may
entail greater or lesser costs and delays depending on the nature of the
activity to be permitted and the interpretation of the laws and regulations by
the permitting authorities. New laws and regulations, amendments to existing
laws and regulations, or more stringent enforcement could have a material
adverse impact on the Company's result of operations and financial condition.
The Company's exploration activities are dependent upon the grant of
appropriate licences, concessions, leases, permits and regulatory consents
which may be withdrawn or made subject to limitation.
There is a risk that negotiations with the relevant government in relation to
the renewal or extension of a licence may not result in the renewal or grant
taking effect prior to the expiry of the previous licence and there can be no
assurance as to the terms of any extension, renewal or grant. This is a risk
that all resource companies are subject to, particularly when their assets are
in emerging markets. The Company continually seeks to do everything within its
control to ensure that the terms of each licence are met and adhered to.
Dependency on key personnel
Kendrick's management comprises a small team of experienced and qualified
executives. The Directors believe that the loss of any key individuals in the
team or the inability to attract appropriate personnel could impact Kendrick's
performance.
Although Kendrick has entered into contractual arrangements to secure the
services of its key personnel, the retention of these services and the future
costs associated therewith cannot be guaranteed.
Royalty arrangement and the Kabwe plant
Kendrick has a royalty over 11% of net earnings generated by the Kabwe
plant. The generation of revenues at the Kabwe plant is subject to the
timely construction, and successful operation, of the plant by Jubilee Metals
Group PLC.
Legal risk
The legal systems in the countries in which Kendrick's operations are
currently and prospectively located are different to that of the UK. This
could result in risks such as: (i) potential difficulties in obtaining
effective legal redress in the courts of such jurisdictions, whether in
respect of a breach of law or regulation, or in an ownership dispute; (ii) a
higher degree of discretion on the part of governmental authorities; (iii) the
lack of judicial or administrative guidance on interpreting applicable rules
and regulations; (iv) inconsistencies or conflicts between and within various
laws, regulation, decrees, orders and resolutions; and (v) relative
inexperience of the judiciary and courts in such matters.
In certain jurisdictions the commitment of local business people, government
officials and agencies and the judicial system to abide by legal requirements
and negotiated agreements may be more uncertain. In particular, agreements in
place may be susceptible to revision or cancellation and legal redress may be
uncertain or delayed. There can be no assurance that joint ventures, licences,
licence applications or other legal arrangements will not be adversely
affected by the actions of government authorities or others and the
effectiveness of and enforcement of such arrangements in these jurisdictions
cannot be assured.
Liquidity and financing risk
Although the Directors consider that Kendrick has sufficient funding in place,
there can be no guarantee that further funding will be available and on terms
that are acceptable to Kendrick should additional costs or delays arise. Nor
can there be any guarantee that the additional funding will be available to
allow Kendrick to obtain and develop additional projects in the necessary
timeframe.
The Directors review Kendrick's funding requirements on a regular basis, and
take such action as may be necessary to either curtail expenditures and / or
raise additional funds from available sources including asset sales and the
issuance of debt or equity.
Governmental approvals, licences and permits
Governmental approvals, licences and permits are, as a practical matter,
subject to the discretion of the applicable governments or government offices.
Kendrick must comply with known standards and existing laws and regulations,
any of which may entail greater or lesser costs and delays depending on the
nature of the activity to be permitted and the interpretation of the laws and
regulations by the permitting authorities. Delays in granting such approvals,
licences and permits, new laws and regulations, amendments to existing laws
and regulations, or more stringent enforcement could have a material adverse
impact on Kendrick's result of operations and financial condition. Kendrick's
activities are dependent upon the grant of appropriate licences, concessions,
leases, permits and regulatory consents which may be withdrawn or made subject
to limitation.
There is a risk that negotiations with the relevant government in relation to
the renewal or extension of a licence may not result in the renewal or grant
taking effect prior to the expiry of the previous licence and there can be no
assurance as to the terms of any extension, renewal or grant.
Liability and insurance
The nature of Kendrick's business means that Kendrick may be exposed to
potentially substantial liability for environmental damages. There can be no
assurance that necessary insurance cover will be available to Kendrick at an
acceptable cost, if at all, nor that, in the event of any claim, the level of
insurance carried by Kendrick now or in the future will be adequate.
Kendrick's operations are also subject to environmental and safety laws and
regulations, including those governing the use of hazardous materials. The
cost of compliance with these and similar future regulations could be
substantial and the risk of accidental contamination or injury from hazardous
materials with which it works cannot be eliminated. If an accident or
contamination were to occur, Kendrick would likely incur significant costs
associated with civil damages and penalties or criminal fines and in complying
with environmental laws and regulations. Kendrick's insurance may not be
adequate to cover the damages, penalties and fines that could result from an
accident or contamination and Kendrick may not be able to obtain adequate
insurance at an acceptable cost or at all.
Currency risk
The Company expects to present its financial information in Sterling although
part or all of its business may be conducted in other currencies. As a result,
it will be subject to foreign currency exchange risk due to exchange rate
movements which will affect Kendrick's transaction costs and the translation
of its results. The majority of the payments were in Euros and SEK (Swedish
Korna), but while there were significant fluctuations in the year the payments
were not significant at this early stage as there were limited operations.
Economic, political, judicial, administrative, taxation or other regulatory
factors
Kendrick may be adversely affected by changes in economic, political,
judicial, administrative, taxation or other regulatory factors, in the
territories in which Kendrick will operate particularly in the Scandinavian
region. .
Taxation
Any change in Kendrick's tax status or the tax applicable to holding Ordinary
Shares or in taxation legislation or its interpretation, could affect the
value of the investments or assets held by the Company, which in turn could
affect Kendrick's ability to provide returns to Shareholders and/or alter the
post-tax returns to Shareholders. Statements in this document concerning the
taxation of Kendrick and its investors are based upon current tax law and
practice which may be subject to change.
Approved by the Board of Directors and signed on behalf of the Board.
C Bird
Chairman
29 June 2022
BOARD OF DIRECTORS
Colin Bird
Executive Chairman Colin Bird is a chartered engineer and a Fellow of the
Institute of Materials, Minerals and Mining with more than 40 years'
experience in resource operations management, corporate management, and
finance. The formative part of his career was spent with the National Coal
Board in England where he was assistant underground manager. He moved to the
Zambian Copper Belt in 1970 as an assistant underground manager before joining
Anglo America Coal Division in 1974 as section manager. He then moved to
Botswana in 1979 to be mine manager of the BCL Nickel Copper Mine, a joint
venture between Anglo American Corporation, Amax, and the Botswana Government.
On his return to the UK, he worked with Hampton Gold Mine areas as a director
of their coal mines in Scotland before joining Costain Mining Ltd as technical
director in 1987 and thereafter Plateau Mining Plc as managing director in
1989. In 1993 he was appointed operations and technical manager for Petromin,
Saudi Arabia, of their gold mining activities with responsibility for an
underground mine producing 175,000oz of gold and three gold mines in various
stages of feasibility study and development. In October 1995 he joined Lion
Mining Finance Ltd in London as technical manager and is now managing director
and majority shareholder of that company. Colin founded and floated Jubilee
Metals Group Plc. He is Chairman and CEO of Galileo Resources Plc and Chairman
of Xtract Resources Plc. Colin serves as Chairman of Tiger Royalties and
Investments Plc, an AIM listed investment company and largest shareholder in
the Company. He is also a member of the board of the TSX listed exploration
company, Revelo Resources Corp, formerly known as Polar Star Mining Corp,
where he served as CEO for a period as well. Colin serves as executive
Chairman of Bezant Resources Plc. He joined the board of the Company as non-
executive Director in April 2018. He founded and floated Kiwara Plc which
discovered copper in northwest Zambia. The company was sold for US$260million
to First Quantum within 30 months of formation. Colin is also executive
chairman of African Pioneer plc which was admitted to trading on the LSE as a
Standard Listing on 1 June 2021.
Other current directorships
Includes African Pioneer Plc, Bezant Resources Plc, Bird Leisure and Admin
(Pty) Ltd, Braemore Resources Ltd, Camel Valley Holdings Inc, Crocus-Serv
Resources (Pty) Ltd, Dullstroom Plats (Pty) Ltd , Enviro Mining Ltd , Enviro
Processing Ltd, Enviro Props Ltd, Galagen (Pty) Ltd, Galileo Resources Plc,
Galileo Resources South Africa (Pty) Ltd, Glenover Phosphate (Pty) Ltd,
Holyrood Platinum (Pty) Ltd, Kabwe Operations Mauritius, Lion Mining Finance
Ltd, Maude Mining & Exploration (Pty) Ltd, Mitte Resources Investment
Ltd, New Age Metals Inc, NewPlats (Tjate) (Pty) Ltd, Newmarket
Holdings, Revelo Resources Corp, Sandown Holdings , Shamrock Holdings
Inc.,Tiger Resource Finance Plc, Tjate Platinum Corporation (Pty) Ltd,
Umhlanga Lighthouse Café CC, Windsor Platinum Investments (Pty) Ltd, Windsor
SA Pty Ltd ,Virgo Business Solutions (Pty) Ltd and Xtract Resources Plc.
Former directorships in the last 5 years
1 Tara Bar and Restaurant CC, Add X Trading 810 CC, Afminco (Pty) Ltd, Dialyn
Café CC, Emanual Mining and Exploration (Pty) Ltd, Europa Metals Ltd, Isigidi
Trading 413 CC, Jubilee Metals Group Plc,,Jubilee Smelting & Refining
(Pty) Ltd, Jubilee Tailings Treatment Company (Pty) Ltd , M.I.T. Ventures
Group, Mokopane Mining & Exploration (Pty) Ltd, NDN Properties CC, Orogen
Gold Plc, Pilanesberg Mining Co (Pty) Ltd, Pioneer Coal (Pty) Ltd, PowerAlt
(Pty) Ltd, SacOil Holdings Ltd and Sovereign Energy Plc, Thos Begbie Holdings
(Pty) Ltd)
Kjeld Thygesen
Non-Executive Director Kjeld Thygesen is a mining investment veteran of more
than 45 years. After being a mining analyst at James Capel in the latter half
of the 1970's he was manager of the commodities department at Rothschild Asset
Management between 1980-89. In 1990 he formed Lion Resource Advisors as a
specialist adviser in the mining and natural resource sectors. LRA was the
advisor to the Midas Fund in the US between 1992 -2000, which was one of the
top performing funds during that period. From 2002-2008 he was Investment
director of Resources Investment Trust, a London listed investment trust which
returned a threefold investment during that period. He has served on several
mining company boards over the past twenty years.
Alex Borrelli
Non-Executive Director Alex Borrelli, FCA, initially studied medicine and then
qualified as a chartered accountant with Deloitte, Haskins & Sells, London
in 1982. He then worked in corporate finance at Guinness Mahon, Samuel Montagu
and as a corporate finance and main board director at Charterhouse. His
subsequent investment banking business included nine years as Head of
Corporate Finance and AIM Nomad qualified executive at Shore Capital. He has
acted on a wide variety of corporate transactions in a senior role for over 20
years, including flotations, takeovers, mergers, and acquisitions for private
and quoted companies. For the last 15 years, he has been acting as chairman
and director of various listed companies, including AIM-listed Greatland Gold
PLC, Xpediator PLC, Tiger Royalties and Investments PLC, Bradda Head Lithium
Limited and Red Rock Resources PLC.
Evan Kirby
Dr Kirby, aged 71, is a metallurgist with over 40 years' of international
involvement. He worked initially in South Africa for Impala Platinum, Rand
Mines and then Rustenburg Platinum Mines. Then in 1992, he moved to Australia
to work for Minproc Engineers and then Bechtel Corporation. After leaving
Bechtel in 2002, he established his own consulting company to continue with
his ongoing mining project involvement. Evan's personal "hands on" experience
covers the financial, technical, engineering and environmental issues
associated with a wide range of mining and processing projects.
Other current directorships
Technical director of Jubilee Metals Group PLC (Aim listed), Non-executive
director of Europa Metals Ltd (listed on AIM and AltX of the JSE), and
Director of private companies, Metallurgical Management Services Pty Ltd, and
Bezant Resources Plc
Former directorships in the last 5 years
Balama resources Pty Ltd, New Energy Minerals Limited (formerly Mustang
Resources Limited and ASX listed), Nyota Minerals Limited (listed on AIM and
ASX), Nyota Minerals (UK) Limited and Kefi Minerals (Ethiopia) Limited
(formerly named Nyota Minerals (Ethiopia) Limited).
DIRECTORS' REMUNERATION REPORT
This Remuneration Report sets out the Group's policy on the remuneration of
Directors, together with details of Directors' remuneration packages and
service contracts for the year ended 29 December 2021.
Directors' remuneration
Remuneration of the Directors for the years ended 29 December 2021 and 2020
was as follows:
2021 2020
Total Total
Emoluments
Emoluments
£ £
C Bird 60,000 32,250
K Thygesen - -
M A Borrelli - 47,040
E Kirby - -
A R Gardner-Hillman (resigned 27 October 2020) - 13,750
Total 60,000 93,040
M A Borrelli resigned as a director on 8 October 2020 and was reappointed on 9
February 2022. He was paid £16,000 for providing corporate and company
secretarial services during 2021.
Pension arrangements
There were no pensions or other similar arrangements in place with any of the
Directors during the years ended 29 December 2021 or 2020.
Directors' Interests
The interests (as defined in the Companies Act) of the Directors holding
office during the period to date in the share capital are shown below:
Ordinary shares of 0.0003p Ordinary shares of 1p
29 December 2021 29 December 2020
C Bird 16,875 506,250
K Thygesen - -
M A Borrelli 82,777 2,483,332
Former directors
A R Gardner-Hillman - -
Other than as set out above, none of the Directors at 29 December 2021 held
any interest in shares of the Company during the year.
The Company was admitted to the Standard Listing on the Official List trading
on the Main Market of the London Stock Exchange with effect from 6 May 2022
and hence the Companies Act 2006 requirements for a quoted company to prepare
a Directors remuneration report are not applicable for the financial year
ended 29 December 2021.
This report was approved by the Board on 29 June 2022 and signed on its behalf
by:
C Bird
Chairman
29 June 2022
CORPORATE GOVERNANCE STATEMENT
The Company is managed under the direction and supervision of the Board of
Directors. Among other things, the Board sets the vision and strategy for the
Company in order to effectively implement the Company's business model.
Good corporate governance creates shareholder value by improving performance
while reducing or mitigating risks that the Company faces as we seek to create
sustainable growth over the medium to long-term. It is my role as Chairman to
lead the Board effectively and to oversee the adoption, delivery and
communication of the Company's corporate governance model.
The Listing Rules to require all companies admitted to the Standard Segment of
the FCA's Official List to adopt and comply with a recognised corporate
governance code, the Board has adopted the Quoted Companies Alliance Corporate
Governance Code (the "Code"). It was decided that the Code was more
appropriate for the Company's size and stage of development than the more
prescriptive Financial Reporting Council's UK Corporate Governance Code.
The Company will hold timely board meetings as issues arise which require the
attention of the Board. The Board is responsible for the management of the
business of the Company, setting the strategic direction of the Company and
establishing the policies of the Company. It is the Directors' responsibility
to oversee the financial position of the Company and monitor the business and
affairs of the Company, on behalf of the Shareholders, to whom they are
accountable. The primary duty of the Directors is to act in the best interests
of the Company at all times. The Board also addresses issues relating to
internal control and the Company's approach to risk management and has
formally adopted an anti-corruption and bribery policy.
The Directors have established an audit committee and a remuneration committee
with formally delegated duties and responsibilities. There is no separate
Nomination Committee given the size of the Board and, during the year, no such
committee met. All Director appointments are approved by the Board as a whole.
Evan Kirby and Kjeld Thygesen are considered by the Board to be independent
Non-Executive Directors.
Audit committee
The audit committee, which currently comprises Alex Borrelli (Chairman of the
Audit Committee), Evan Kirby and Kjeld Thygesen and has the primary
responsibility for monitoring the quality of internal control and ensuring
that the financial performance of the Company is properly measured and
reported on and for reviewing reports from the Company's auditors relating to
the Company's accounting and internal controls. The committee is also
responsible for making recommendations to the Board on the appointment of
auditors and the audit fee and for ensuring the financial performance of the
Company is properly monitored and reported. The audit committee will meet not
less than three times a year.
Remuneration committee
The remuneration committee, which currently comprises Evan Kirby (Chairman of
the Remuneration Committee), Kjeld Thygesen and Alex Borrelli and is
responsible for the review and recommendation of the scale and structure of
remuneration for senior management, including any bonus arrangements or the
award of share options with due regard to the interests of the Shareholders
and the performance of the Company.
Share Dealing Code
The Company has adopted, with effect from Admission, a share dealing policy
regulating trading and confidentiality of inside information for the Directors
and other persons discharging managerial responsibilities (and their persons
closely associated) which contains provisions appropriate for a company whose
shares are admitted to trading on the Official List (particularly relating to
dealing during closed periods which will be in line with the Market Abuse
Regulation). The Company will take all reasonable steps to ensure compliance
by the Directors and any relevant employees with the terms of that share
dealing policy.
DIRECTORS' REPORT
The Directors present their report together with the audited financial
statements, for the year ended 29 December 2021.
RESULTS AND DIVIDENDS
The results for the period are set out in the Statement of Comprehensive
Income on page 24. The Directors do not recommend the payment of a dividend on
the ordinary shares (2020: nil).
DIRECTORS
The names of the Directors who served throughout the period and subsequent to
the year end, except where shown otherwise, are as follows:
C Bird
K Thygesen
M A Borrelli (appointed 9 February 2022)
E Kirby (appointed 9 February 2022)
DIRECTORS' REMUNERATION
The Directors' remuneration is detailed in the Directors' Remuneration Report
on pages 11 to 12
DIRECTORS' AND OFFICERS' INDEMNITY INSURANCE
The Group has purchased Directors' and Officers' liability insurance which
provides cover against liabilities arising against them in that capacity.
ISSUES OF SHARES, OPTIONS AND WARRANTS
There were no issues of ordinary shares and no share options were granted
during the year.
Shareholders approved at the AGM on 4 February 2021 a new share option scheme
("Executive Share Option Scheme") for its directors, senior management,
consultants and employees on the following terms: (i) the number of options to
be issued shall not exceed 10% of the issued share capital of the Company from
time to time; (ii) the exercise price of the options shall be determined by
the remuneration committee of the Board of Directors of the Company based on
a) the last fundraising by the Company whilst its shares are not traded on a
stock exchange; and b) once the Company's shares are traded on a stock
exchange the volume weighted average share price of the Company in the 30 days
preceding the issue of the options save that in the 30 days post admission of
the Company's shares to trading on a stock exchange ("Admission") any options
may be issued at the placing price of any fundraising completed at Admission;
(iii) the allocation of the options shall be determined by the remuneration
committee of the Board of Directors of the Company; (iv) the options should
vest in accordance with the terms of the Executive Share Option Scheme; and
(v) the options should be exercised within ten years of the date of this
resolution. This resolution revokes and replaces all unexercised authorities
previously granted to the Company to establish any share option schemes for
its directors, senior management, consultants and employees but without
prejudice to any allotment of shares or grant of rights already made, offered
or agreed to be made pursuant to such authorities.
FINANCIAL INSTRUMENTS
An explanation of the Company's financial risk management objectives, policies
and strategies is set out in note 18
COVID-19
The COVID-19 pandemic announced by the World Health Organisation in the period
initially had a markedly negative impact on global stock markets although many
sectors and stock market losses have been recovered there is increased
volatility as stock markets react to ongoing news in relation to the
short-term and long-term impact of COVID-19 and the financial implications of
the economic stimulus packages adopted by most governments to protect and / or
support their economies this has also, affected currencies and general
business activity.
The Company has developed a work at home policy and adopts local procedures
for exploration activities to address the health and wellbeing of its
directors, consultants and contractors, and their families, in the face of the
COVID-19 outbreak. As such COVID-19 is no longer expected to have an impact on
the operations of the company.
IMPACT OF UKRAINE CONFLICT
The Directors are aware of the Ukraine conflict and related sanctions but
there is no impact on the Company as it has no assets or business activities
or suppliers with links in Ukraine or Russia and is not aware of any persons
sanctioned in relation to the Ukraine conflict owning shares in the Company.
EVENTS AFTER THE REPORTING DATE
Events after the reporting date have been disclosed in Note 21 to the
Financial Statements.
STATEMENT AS TO THE DISCLOSURE OF INFORMATION TO THE AUDITORS
The Directors, who were in office at the date of approval of this report,
confirm that, so far as they are aware, there is no relevant audit information
of which the Company's auditor is unaware and that they have taken all
reasonable steps to make themselves aware of any relevant audit information
and to establish that the Company's auditor is aware of that information.
The Directors are responsible for preparing the financial statements in
accordance with the Disclosure and Transparency Rules of the United Kingdom's
Financial Conduct Authority ("DTR") and with International Financial Reporting
Standards as adopted by the United Kingdom.
The Directors confirm to the best of their knowledge that:
• the financial statements have been prepared in accordance with the
relevant financial reporting framework and give a true and fair view of the
assets, liabilities, financial position and profit or loss of the Group and
the Company; and
• the Strategic Report and Directors' Report include a fair review of the
development and performance of the business and the financial position of the
Group and the Company, together with a description of the principal risks and
uncertainties that it faces; and
• the annual report and financial statements, taken as a whole, are fair,
balanced, and understandable and provide the information necessary for
shareholders to assess the Group's position, performance, business model and
strategy.
This confirmation is given and should be interpreted in accordance with the
provisions of Section
418 of the Companies Act 2006.
AUDITORS
Crowe U.K. LLP have expressed their willingness to continue in office as
auditors.
A resolution proposing the re-appointment of the auditors Crowe U.K. LLP will
be put to shareholders at the Annual General Meeting.
Approved by the Board of Directors and signed on behalf of the Board.
C Bird
Chairman
29 June 2022
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report and the
financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each
financial year. 'Under that law the directors have prepared financial
statements in accordance with UK adopted International Accounting Standards
(IFRSs)'
The financial statements are required by law and IFRSs as adopted by the UK
to present fairly the financial position of the Company and the financial
performance of the Company. The Companies Act 2006 provides in relation to
such financial statements that references in the relevant part of that Act to
financial statements giving a true and fair view are references to their
achieving a fair presentation.
Under company law the Directors must not approve the financial statements
unless they are satisfied that they give a true and fair view of the state of
affairs of the Company and of the profit or loss of the Company for that
period.
In preparing the financial statements, the Directors are required to:
· select suitable accounting policies and then apply them consistently;
· make judgements and accounting estimates that are reasonable and
prudent;
· state whether applicable accounting standards have been followed,
subject to any material departures disclosure and explained in the financial
statements;
· prepare the Strategic Report and Directors' report which comply with
the requirements of the Companies Act 2006; and
· prepare financial statements on the going concern basis unless it is
inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Company and
enable them to ensure that the financial statements comply with the Companies
Act 2006. They are also responsible for safeguarding the assets of the Company
and hence for taking reasonable steps for the prevention and detection of
fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Kendrick Resources PLC
website www.kendrickresources.com (http://www.kendrickresources.com) .
Legislation in the United Kingdom governing the preparation and dissemination
of financial statements may differ from legislation in other jurisdictions.
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF
KENDRICK RESOURCES PLC
Opinion
We have audited the financial statements of Kendrick Resource plc (the
"Company") for the year ended 29 December 2021 which comprise the statement of
comprehensive income, statement of financial position, statement of cash flow,
statement of changes in equity and notes to the financial statements,
including significant accounting policies. The financial reporting framework
that has been applied in their preparation is applicable law and UK-adopted
international accounting standards.
In our opinion, the financial statements:
· give a true and fair view of the state of the company's affairs as at
29 December 2021 and of its loss for the year then ended;
· have been properly prepared in accordance with UK-adopted
international accounting standards;
· have been prepared in accordance with the requirements of the
Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor's responsibilities for the
audit of the financial statements section of our report. We are independent of
the Company in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the FRC's Ethical
Standard, and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
Material uncertainty relating to going concern
We draw attention to note 3 in the financial statements, which indicates that
the Company requires funding from time to time to finance its exploration and
ongoing administrative activities. Management has successfully raised money in
the past, but there can be no guarantee that adequate funds will be available
when needed in the future. These events or conditions, indicate that a
material uncertainty exists that may cast significant doubt on the company's
ability to continue as a going concern. Our opinion is not modified in respect
of this matter.
In auditing the financial statements, we have concluded that the directors'
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation of the directors'
assessment of the company's ability to continue to adopt the going concern
basis of accounting included
We assessed the appropriateness of the approach, assumptions and arithmetic
accuracy of the model used by management when performing their going concern
assessment. We evaluated the Directors' assessment of the Group's ability to
continue as a going concern, including challenging the underlying data and key
assumptions used to make the assessment.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Overview of our audit approach
Materiality
In planning and performing our audit we applied the concept of materiality. An
item is considered material if it could reasonably be expected to change the
economic decisions of a user of the financial statements. We used the concept
of materiality to both focus our testing and to evaluate the impact of
misstatements identified.
Based on our professional judgement, we determined overall materiality for the
financial statements as a whole to be £10,000 (2020: £3,900), based on a
percentage of the Company's total assets (2021: 2%; 2020: 2%)
We use a different level of materiality ('performance materiality') to
determine the extent of our testing for the audit of the financial
statements. Performance materiality is set based on the audit materiality as
adjusted for the judgements made as to the entity risk and our evaluation of
the specific risk of each audit area having regard to the internal control
environment. Performance materiality was set at 70% of materiality for the
financial statements as a whole, which equates to £7,000 (2020: £2,700).
Where considered appropriate performance materiality may be reduced to a lower
level, such as, for related party transactions and directors' remuneration.
We agreed with the Audit Committee to report to it all identified errors in
excess of £300 (2020: £120). Errors below that threshold would also be
reported to it if, in our opinion as auditor, disclosure was required on
qualitative grounds.
Overview of the scope of our audit
Our audit approach was developed by obtaining a thorough understanding of the
company's activities and is risk based. Based on this understanding we
assessed those aspects of the company's transactions and balances which were
most likely to give rise to a material misstatement and were most susceptible
to irregularities including fraud or error. Specifically, we identified what
we considered to be key audit matters and planned our audit approach
accordingly. We undertook a fully substantive audit with a combination of
analytical procedures and substantive testing on significant transactions,
balances and disclosures. The accounting records of the Company are
maintained in the UK and due to the nature of the Company during the year,
there were no operating locations that the audit team considered it necessary
to visit.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those
which had the greatest effect on the overall audit strategy, the allocation of
resources in the audit; and directing the efforts of the engagement team.
Going concern was identified as the only key audit matter and has been
addressed within the "Material uncertainty relating to going concern" section
of the audit report.
Our audit procedures in relation to this matter were designed in the context
of our audit opinion as a whole. They were not designed to enable us to
express an opinion on these matters individually and we express no such
opinion.
Other information
The other information comprises the information included in the annual report
other than the financial statements and our auditor's report thereon. The
directors are responsible for the other information contained within the
annual report.
Our opinion on the financial statements does not cover the other information
and, except to the extent otherwise explicitly stated in our report, we do not
express any form of assurance conclusion thereon. Our responsibility is to
read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements or our
knowledge obtained in the course of the audit, or otherwise appears to be
materially misstated. If we identify such material inconsistencies or apparent
material misstatements, we are required to determine whether this gives rise
to a material misstatement in the financial statements themselves. If, based
on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion the part of the directors' remuneration report to be audited
has been properly prepared in accordance with the Companies Act 2006.
In our opinion based on the work undertaken in the course of our audit
· the information given in the strategic report and the directors'
report for the financial year for which the financial statements are prepared
is consistent with the financial statements; and
· the directors' report and the strategic report have been prepared in
accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Company and its
environment obtained in the course of the audit, we have not identified
material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept by the company, or
returns adequate for our audit have not been received from branches not
visited by us; or
· the financial statements and the part of the directors' remuneration
report to be audited are not in agreement with the accounting records and
returns; or
· certain disclosures of directors' remuneration specified by law are
not made; or
· we have not received all the information and explanations we require
for our audit
Responsibilities of the directors for the financial statements
As explained more fully in the Statement of directors' responsibilities set
out on page 18 the directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the directors determine is necessary to
enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for
assessing the Company's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the Company or
to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:
· We obtained an understanding of the legal and regulatory frameworks
within which the company operates, focusing on those laws and regulations that
have a direct effect on the determination of material amounts and disclosures
in the financial statements. The laws and regulations we considered in this
context were relevant company law and taxation legislation in the UK
jurisdictions in which the Group operates.
· We identified the greatest risk of material impact on the financial
statements from irregularities, including fraud, to be the override of
controls by management. Our audit procedures to respond to these risks
included enquiries of management about their own identification and assessment
of the risks of irregularities, sample testing on the posting of journals and
reviewing accounting estimates for biases.
Owing to the inherent limitations of an audit, there is an unavoidable risk
that some material misstatements of the financial statements may not be
detected, even though the audit is properly planned and performed in
accordance with the ISAs (UK). The potential effects of inherent limitations
are particularly significant in the case of misstatement resulting from fraud
because fraud may involve sophisticated and carefully organized schemes
designed to conceal it, including deliberate failure to record transactions,
collusion or intentional misrepresentations being made to us. A further
description of our responsibilities for the audit of the financial statements
is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditor's report.
Other matters which we are required to address
We were appointed by the board on 09 June 2022 to audit the financial
statements for the period ending 29 December 2021. Our total uninterrupted
period of engagement is 8 years, covering the periods ending 30 June 2014 to
29 December 2021.
The non-audit services prohibited by the FRC's Ethical Standard were not
provided to the company and we remain independent of the company in conducting
our audit.
Subsequent to the year end, we have provided corporate finance services in
relation to the Company's admission to the Main Market of the London Stock
Exchange in May 2022.
Our audit opinion is consistent with the additional report to the audit
committee.
Use of our report
This report is made solely to the company's members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the company's members those matters we
are required to state to them in an auditor's report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company and the company's members as a
body, for our audit work, for this report, or for the opinions we have formed.
John Glasby
Senior Statutory Auditor
For and on behalf of
Crowe U.K. LLP
Statutory Auditor
London
29 June 2022
STATEMENT OF COMPREHENSIVE INCOME
Year ended 29 December 2021
Notes Year to Year to
29 December 29 December
2021 2020
£ £
Administrative expenses (289,255) (190,623)
Gain on disposal of investment 51,931 14,663
(Loss)/Gain in fair value of investment (86,413) 142,778
Impairment charge - -
Operating profit/(loss) 5 (323,737) (33,182)
Finance expense (1,249) (251)
Profit/(Loss) before tax (324,986) (33,433)
Taxation 8 - -
Profit/(Loss) for the period (324,986) (33,433)
Other comprehensive income - -
Total comprehensive loss for the year (324,986) (33,433)
The notes on page 28 to 44 form part of these of financial statements.
All amounts are derived from continuing operations.
STATEMENT OF FINANCIAL POSITION
As at 29 December 2021
Company No. 02401127
Notes 29 December 29 December
2021 2020
£ £
Assets
Non-current assets
Property, plant and equipment 10 2,050 10,670
Investment in Nordic Projects and related transaction costs 12 673,755 -
675,805 10,670
Current assets
Current asset investment 11 102,932 223,340
Trade and other receivables 13 89,488 10,928
Cash and cash equivalents 16,871 9,496
209,291 243,764
Total assets 885,096 254,434
Liabilities
Current liabilities
Trade and other payables 14 441,959 165,811
Convertible loan notes 17 679,500 -
Total liabilities 1,121,459 165,811
Net assets/(liabilities) (236,363) 88,623
Equity
Share capital 15 22,929,743 22,929,743
Share premium 15 25,027,278 25,027,278
Merger reserve 1,824,000 1,824,000
Accumulated losses (50,017,384) (49,692,398)
Total equity (236,363) 88,623
The financial statements were approved by the Board of Directors and
authorised for issue on 29 June 2022 and were signed on its behalf by
C Bird
Chairman
STATEMENT OF CASH FLOW
for the year ended 29 December 2021
Year to 29 December Year to 29 December
2021 2020
£ £
Cash flows from operating activities
Loss before tax (324,986) (33,433)
Adjustments to reconcile net losses to cash utilised :
Depreciation of property, plant and equipment 10 8,620 10,056
Gain on disposal of investment shares (38,444) (14,663)
Loss/(Gain) in fair value of investment at reporting date 86,413 (142,778)
Operating cash outflows before movements in working capital
(268,397) (180,818)
Changes in:
Trade and other receivables (78,560) 90,992
Trade and other payables 276,148 3,517
Net cash outflow from operating activities (70,809) (86,309)
Investing activities
Proceeds of sale of Investment shares 72,439 58,409
Investment in Nordic Projects and related transaction costs 12 (673,755) -
Net cash inflow from investing activities: (601,316) 58,409
Cash flows from financing activities
Proceeds from issue of convertible loan notes 679,500 -
Net cash inflow from financing activities 679,500 -
Net increase/(decrease) in cash and cash equivalents 7,375 (27,900)
Cash and cash equivalents at beginning of period 9,496 37,396
Cash and cash equivalents at end of period 16,871 9,496
STATEMENT OF CHANGES IN EQUITY
Year ended 29 December 2021
Share capital Share premium Merger Accumulated losses Total equity
reserve
£ £ £ £ £
As at 29 December 2019 22,929,743 25,027,278 1,824,000 (49,658,965) 122,056
Total comprehensive loss for the year - - (33,433) (33,433)
-
Other comprehensive income - - - - -
As at 29 December 2020 22,929,743 25,027,278 1,824,000 (49,692,398) 88,623
Total comprehensive loss for the year - - (324,986) (324,986)
-
Other comprehensive income - - - - -
As at 29 December 2021 22,929,743 25,027,278 1,824,000 (50,017,384) (236,363)
Reserves Description and purpose
Share capital - amount subscribed for share capital at nominal value
Share premium - amounts subscribed for share capital in
excess of nominal value
Merger reserve - amount arising from the issue of shares for non-cash
consideration
Accumulated losses - cumulative net gains and losses recognised in the
consolidated income statement
NOTES TO THE FINANCIAL STATEMENTS
Year ended 29 December 2021
1. GENERAL INFORMATION
Kendrick Resources PLC (the 'Company' or "Kendrick") is incorporated and
domiciled in the United Kingdom. The address of the registered office is 7/8
Kendrick Mews, London SW7 3HG.
The Company's period being reported on in these accounts is for the year to 29
December 2021. The comparative period is for the year to 29 December 2020.
2. ADOPTION OF NEW AND REVISED STANDARDS
A number of new standards and amendments to standards and interpretations have
been issued but are not yet effective and, in some cases, have not yet been
adopted by the UK.
The directors do not expect that the adoption of these standards will have a
material impact on the financial statements of the Company in future periods.
3. SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation
The financial statements have been prepared in accordance with UK-adopted
international accounting standards ('IFRS') and those parts of the Companies
Act 2006 applicable to companies reporting under IFRSs.
The principal accounting policies adopted are set out below.
The financial statements are presented in Pounds Sterling ("£").
Going concern
The operational requirements of the Company comprise maintaining a Head Office
in the UK with a Board of one executive Director and three non-executive
Directors, and one consultant for, amongst other things, determining and
implementing strategy and managing operations.
As at 29 December 2021, the company had net liabilities of £236,363.
Subsequent to the year end the Company has raised £3.25m from the issue of
ordinary shares following the admission to the Standard Listing on the
Official List trading on the Main Market of the London Stock Exchange on 6 May
2022. The Directors have prepared financial projections and plans for a period
of at least 12 months from the date of approval of these financial statements.
Based on the current management plan, management believes that these funds are
sufficient for the expenditure to date as well as the planned exploration
activities for the forthcoming twelve months.
The company currently has no income and meets its working capital requirements
through raising development finance. In common with many businesses engaged in
exploration and evaluation activities prior to production and sale of minerals
the company will require additional funds and/or funding facilities in order
to fully develop its business plan. Ultimately the viability of the company is
dependent on future liquidity in the exploration period and this, in turn,
depends on the company's ability to raise funds to provide additional working
capital to finance its ongoing activities. Management has successfully raised
money in the past, but there is no guarantee that adequate funds will be
available when needed in the future. As there can be no guarantee that the
required future funding can be raised in the necessary timeframe, a material
uncertainty exists that may cast significant doubt on the Company's future
ability to continue as a going concern.
Based on the Board's assessment that the Company will be able to raise
additional funds, as and when required, to meet its working capital and
capital expenditure requirements, the Board have concluded that they have a
reasonable expectation that the Group can continue in operational existence
for the foreseeable future. For these reasons the financial statements have
been prepared on the going concern basis, which contemplates continuity of
normal business activities and the realisation of assets and discharge of
liabilities in the normal course of business. The financial statements do
not include the adjustments that would result if the Company was unable to
continue in operation.
Taxation
The tax expense represents the sum of the tax currently payable and deferred
tax.
The tax currently payable is based on taxable profit for the year. Taxable
profit differs from net profit as reported in the income statement because it
excludes items of income or expense that are taxable or deductible in other
years and it further excludes items that are never taxable or deductible. The
Company's liability for current tax is calculated using tax rates that have
been enacted or substantively enacted by the balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on temporary
differences between the carrying amounts of assets and liabilities in the
financial statements and the corresponding tax bases used in the computation
of taxable profit, and is accounted for using the balance sheet liability
method. 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 profits will be available against which
deductible temporary differences can be utilised. Such assets and liabilities
are not recognised if the temporary difference arises from the initial
recognition of goodwill or from the initial recognition (other than in a
business combination) of other assets and liabilities in a transaction that
affects neither the tax profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences
arising on investments in subsidiaries and associates, and interests in joint
ventures, except where the Company is able to control the reversal of the
temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet
date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be
recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled, or the asset is realised. Deferred tax
is charged or credited in the income statement, except when it relates to
items charged or credited directly to equity, in which case the deferred tax
is also dealt with in equity.
Property, plant and equipment
Property, plant and equipment are carried at cost less accumulated
depreciation and any recognised impairment loss.
Depreciation and amortisation is charged so as to write off the cost or
valuation of assets, other than land, over their estimated useful lives, using
the straight-line method, on the following bases:
Office equipment and
computers
The gain or loss arising on disposal or retirement of an asset is determined
as the difference between the sales proceeds and the carrying amount of the
asset and is recognised in the income statement.
Investment in subsidiaries
In the Company's financial statements, investment in subsidiaries are stated
at cost and reviewed for impairment if there are any indications that the
carrying value may not be recoverable.
Financial instruments
Recognition of financial assets and financial liabilities
Financial assets and financial liabilities are recognised on the Company's
balance sheet when the Company becomes a party to the contractual provisions
of the instrument.
De-recognition of financial assets and financial liabilities
The Company derecognises a financial asset only when the contractual rights to
cash flows from the asset expire; or it transfers the financial asset and
substantially all the risks and rewards of ownership of the asset to another
entity. If the Company neither transfers nor retains substantially all the
risks and rewards of ownership and continues to control the transferred asset,
the Company recognises its retained interest in the asset and an associated
liability for the amount it has to pay. If the Company retains substantially
all the risks and rewards of ownership of a transferred financial asset, the
Company continues to recognise the financial asset and also recognises a
collateralised borrowing for the proceeds received. The Company derecognises
financial liabilities when the Company's obligations are discharged, cancelled
or expired.
Loans and receivables
Trade and other receivables are measured at initial recognition at fair value,
and are subsequently measured at amortised cost less any provision for
impairment.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, and other
short-term highly liquid investments that are readily convertible to a known
amount of cash with three months or less remaining to maturity and are subject
to an insignificant risk of changes in value.
Impairment of financial assets
The Company assesses on a forward-looking basis the expected credit losses
associated with its receivables carried at amortised cost. The impairment
methodology applied depends on whether there has been a significant increase
in credit risk. For trade and other receivables, the Company applies the
simplified approach permitted by IFRS 9, resulting in trade and other
receivables recognised and carried at amortised cost less an allowance for any
uncollectible amounts based on expected credit losses.
Trade and other payables
Trade and other payables are initially measured at fair value, and are
subsequently measured at amortised cost, using the effective interest rate
method.
Provisions
Provisions are recognised when the Company has a legal or constructive
obligation, as a result of past events, for which it is probable that an
outflow of economic resource will result and that outflow can be reliably
measured.
Share-based payments
The Company applies IFRS 2 Share-based Payment for all grants of equity
instruments.
The Company issues equity-settled share-based payments to its employees.
Equity-settled share-based payments are measured at fair value at the date of
grant. The fair value determined at the grant date of the equity-settled
share-based payments is expensed on a straight-line basis over the vesting
period, based on the Company's estimate of the shares that will eventually
vest.
Fair value is measured using the Black Scholes model. The expected life used
in the model is adjusted, based on management's best estimate, for the effects
of non-transferability, exercise restrictions and behavioural considerations.
The inputs to the model include: the share price at the date of grant,
exercise price expected volatility, risk free rate of interest.
Share capital
Financial instruments issued by the Company are treated as equity only to the
extent that they do not meet the definition of a financial liability. The
Company's ordinary shares are classified as equity instruments.
The Company considers its capital to be total equity. There have been no
changes in what the Company considers to be capital since the previous period.
The Company is not subject to any externally imposed capital requirements.
4. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION
UNCERTAINTY
In the application of the Company's accounting policies, which are described
in note 3, the Directors are required to make judgements, estimates and
assumptions about the carrying amounts of the assets and liabilities that are
not readily apparent from other sources. The estimates and associated
assumptions are based on historical experience and other factors that are
considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period or in the period
of the revision and future periods if the revision affects both the current
and future periods.
The only critical judgement and estimation that the Directors have made in the
process of applying the Company's accounting policies and that have the most
significant effect on the amounts recognised in the financial statements is
Going Concern which has been included in note 3.
5. LOSS FOR THE YEAR
The loss for the period has been arrived at after charging / (crediting):
2021 2020
£ £
Depreciation of property, plant and equipment (note 8,620 10,056
10)
Staff costs (note 60,000 93,040
7)
Gain on sale of (38,444) (14,663)
investments
Loss/(Gain) in fair value of investment at reporting date 86,413 (142,778)
Finance charge 1,249 251
6. AUDITORS' REMUNERATION
The remuneration of the auditors can be analysed as follows:
2021 2020
£ £
Fees payable to the company's auditor for the audit of the company's financial 30,000 15,000
statements
Fees payable to the company's auditor for other services:
Other services relating to taxation work - 1,150
30,000 16,150
7. STAFF COSTS
2021 2020
Number Number
Directors 2 3
Consultants 2 1
The average monthly number of employees 4 4
Their aggregate remuneration comprised:- £ £
Fees 60,000 93,040
60,000 93,040
Included within staff costs £60,000 (2020: £93,040) relates to amounts in
respect of Directors. The highest paid director's emoluments were £60,000
(2020: £47,040)
8. TAXATION
No liability to corporation tax arose for the year ended 29 December 2021 and
year ended 29 December 2020, as a result of underlying losses brought forward.
Reconciliation of effective tax rate:
2021 2020
£ £
Loss before tax (324,986) (33,433)
Tax credit at the standard rate of tax in the UK 61,747 6,352
Tax effect of non-deductible expenses (1,638) (1,911)
Deferred tax not provided (60,109) (4,441)
Tax for the period - -
The standard rate of corporation tax in the UK applied during the year was 19%
(2020: 19%).
At 29 December 2021, the Company are carrying forward estimated tax losses of
£6.3m (2020: £6.3m) in respect of various activities over the years. No
deferred tax asset was recognized in respect to these accumulated tax losses
as there is insufficient evidence that it is probable that the amount will be
recovered in future years.
9. LOSS PER SHARE
The loss per share of 2.90 pence (2020: loss 0.01 pence) has been calculated
on the basis of the loss of £325,000 (2020: loss £33,000) and on 11,190,363
(2020: 335,710,863) ordinary shares, being the weighted average number of
ordinary shares in issue during the year ended 29 December 2021. During the
year, the company consolidated 30 existing shares to 1 (note 15).
10. PROPERTY PLANT AND EQUIPMENT
Office equipment and computer Total
£ £
COMPANY
Cost
At 29 December 2019 60,587 60,587
Additions - -
At 29 December 2020 60,587 60,587
Additions - -
At 29 December 2021 60,587 60,587
Accumulated depreciation
At 29 December 2019 (39,861) (39,861)
Charge for the period (10,056) (10,056)
At 29 December 2020 (49,917) (39,861)
Charge for the period (8,620) (8,620)
At 29 December 2021 (58,537) (58,537)
Carrying amount
At 29 December 2021 2,050 2,050
At 29 December 2020 10,670 2,050
11. CURRENT ASSET INVESTMENT
29 Dec 2021 29 Dec 2020
£ £
Balance as at 29 December 2020 223,340 124,308
Additions 13,488 -
Disposals (33,996) (43,746)
Fair value through profit and loss (99,900) 142,778
Balance as at 29 December 2021 102,932 223,340
The investment represents the acquisition of 24,615,385
new ordinary shares of Galileo Resources Plc resulting from the sale of Star
Zinc. At the start of the year the Company held 15,952,866 shares, 6,731,794
shares were disposed of during the year leaving a balance of 9,221,072 held.
In addition 8,174,387 shares in Bezant Resources Plc were acquired, which were
also held at 29 December 2021.
12. INVESTMENT IN THE NORDIC PROJECTS AND RELATED TRANSACTION COSTS
The investment in the Nordic Projects represents the amounts paid in taking up
and extending the option to acquire various Scandinavian assets described
below together with costs incurred in running the projects prior to the
proposed acquisition including the costs associated with the proposed listing.
On 20 January 2021, the Company was assigned by Lion Mining Finance Ltd and
Camden Park Trading Limited, companies controlled by Colin Bird (see Note 19),
a conditional agreement with Pursuit Minerals Ltd listed on the ASX
("Pursuit") to acquire nickel and vanadium projects in Norway, Sweden and
Finland (the "Nordic Projects") (the "Conditional Pursuit SPA") (the
"Assignment Agreement"). The Assignment Agreement is conditional on the
Company acquiring the Nordic Projects and the consideration under the
Assignment Agreement of £802,000 is to be settled £52,000 in cash and
£750,000 to be settled by the issue of ordinary shares in the Company at the
Loan Note Conversion Price (A 40% discount to the Fund Raising Price of 3.25p
per share at the time of the listing).
The Conditional Pursuit SPA is conditional upon the Company; i) listing its
shares on the London Stock Exchange (the "Listing") ii) raising a minimum of
£1,500,000 at the Listing (the "Minimum Fundraising at Listing" iii)
completing legal due diligence on the entities owning the Nordic Projects and
on the mining titles underlining the Nordic Projects by the long stop date
which was 31 March 2021 and has been extended to 31 December 2021 by the
payment in aggregate of A$235,000 (approx. £126,000). Further extensions up
to 15 May 2022 (the "Long Stop Date") were agreed by increasing the amount of
the consideration payable in respect of the Consideration Shares in clause
2(b) from £1,250,000 to £1,475,000 satisfied through the issue by the
Company of fully paid ordinary shares at the Fund Raising Price Per Share
(3.25p) at the time of listing.
The consideration payable to Pursuit upon completion of the Conditional
Pursuit SPA is i) A$50,000 (approx. £27,000) which has been paid ii)
£1,475,000 to be settled by the Company issuing ordinary shares in the
Company at the same price (3.25p per share) as the Minimum Fundraising at
Listing at completion of the Listing. These conditions were all met and the
acquisitions crystalised when the Company was listed following the admission
to the Standard Listing on the Official List trading on the Main Market of the
London Stock Exchange on 6 May 2022.
In addition there will be deferred consideration based on two accretive value
milestones being achieved;
a) Milestone One which triggers a A$250,000 (approx. £136,000) payment in
cash, is the completion by the Company (or any successor or assignee) of a
Feasibility Study, as defined by the JORC Code (2012), on any individual
project area in the Nordic Projects, demonstrating an internal rate of return
of not less than 25%; and
b) Milestone Two which triggers a A$500,000 (approx. £272,000) payment in
cash is a decision to mine being made by the Company (or any successor or
assignee) in respect of any project area in the Nordic Projects.
The Nordic Projects comprise vanadium projects in Sweden and Finland which are
owned by Pursuit and consist of competently and comprehensively well drilled
tonnages of vanadium ore, estimated at approximately 160 million tonnes.
Kendrick has paid currently due 2021 licence fees and all projects are in
governmental good standing. The Norwegian projects are for nickel and are
under an option agreement with Eurasian Minerals Sweden AB and have been
partially explored with reconnaissance programmes indicating the potential
for strike extension. Certain nickel projects have not been invasively
explored by Pursuit, but desk research indicates that potential for nickel
discovery exists.
Nickel prices have improved over the year and the metal is expected to play a
significant role in tomorrow's energy and production world.
13. TRADE AND OTHER RECEIVABLES
2021 2020
£ £
Other receivables 890 890
Vat receivable 24,598 10,038
Other debtors 64,000 -
89,488 10,928
The fair value of trade and other receivables is not significantly different
from the carrying value and none of the balances are past due.
14. TRADE AND OTHER PAYABLES
2021 2020
£ £
Trade and other payables 263,299 68,311
Amount owed to director 143,750 83,500
Accruals 34,910 14,000
441,959 165,811
15. SHARE CAPITAL AND SHARE PREMIUM
2021 2020
Issued equity share capital Number £ Number £
Issued and fully paid
Ordinary shares of £0.0003 each 11,190,363 3,357 335,710,863 3,357,109
Deferred shares of £0.00999 each 335,710,863 3,353,752 - -
Deferred shares of £0.009 each 1,346,853,817 12,121,684 1,346,853,817 12,121,684
Deferred shares of £0.01 each 19,579,925 195,799 19,579,925 195,799
Deferred shares of £0.04 each 181,378,766 7,255,151 181,378,766 7,255,151
22,929,743 22,929,743
1) At the Annual General Meeting held on 4 February 2021, shareholders
approved that the 335,710,863Existing Ordinary Shares in issue be subdivided
each into one new ordinary share of £0.00001 ("New Ordinary Share") and one
deferred share of £0.00999 ("2020 Deferred Share) in the capital of the
Company. The New Ordinary Shares carry the same rights as attached to the
Existing Ordinary Shares (save for the reduction in their nominal value). The
2020 Deferred Shares have no voting rights and have no rights as to dividends
and only very limited rights on a return of capital. They will not be admitted
to trading or listed on any stock exchange and will not be freely
transferable. The holders of the 2020 Deferred Shares are not entitled to any
further right of participation in the assets of the Company. As such, the 2020
Deferred Shares effectively have no value.
2) At the Annual General Meeting held on 25 October 2021, shareholders
approved an ordinary resolution that for every thirty (30) issued and unissued
ordinary share of £0.00001 each in the share capital of the Company
("Existing Shares") be consolidated into one (1) ordinary share of £0.0003
each ("New Shares") such New Shares having the same rights and being subject
to the same restrictions, save as to nominal value, as the Existing Shares.
The deferred shares of £0.01 each and £0.009 each confer no rights to vote
at a general meeting of the Company or to a dividend. On a winding-up the
holders of the deferred shares are only entitled to the paid up value of the
shares after the repayment of the capital paid on the ordinary shares and
£5,000,000 on each ordinary share.
The deferred shares of £0.04 each have no rights to vote or to participate in
dividends and carry limited rights on return of capital. No shares were issued
during the year.
16. SHARE OPTIONS
Share Options
The Company's previous share options scheme for directors and consultants
ceased on 12 June 2020 and no options were exercised prior to this date.
A new Executive Share Option Scheme for the directors, senior management,
consultants and employees was approved at the AGM on 4 February 2021, as
outlined in the Directors Report.
17. CONVERTIBLE LOAN NOTES
On 30 December 2020, the Company executed a £210,000 unsecured convertible
loan note instrument and received subscriptions of £210,000 in January 2021
in respect of the December 2020 Convertible Loan Note from private investors.
The December 2020 Convertible Loan Note does not pay interest and was repaid
at Admission by the issue of 10,000,000 New Ordinary Shares at a 40% discount
to the Placing.
On 2 July 2021, the Company executed a £350,000 unsecured convertible loan
note instrument (the "July 2021 Convertible Loan Note") and has received
subscriptions of £350,000 in respect of the July 2021 Convertible Loan Note
from private investors and £30,000 from Kjeld Thygesen and £48,000 from
Colin Bird, who are directors of the Company. The July 2021 Convertible Loan
Note did not pay interest and was repaid at Admission by the issue of i)
13,333,333 New Ordinary Shares at a 25% discount to the Placing Price of which
1,142,857 was issued to Kjeld Thygesen and 1,828,571 to Colin Bird and ii) one
(1) warrant for each New Ordinary Share issued to the noteholders at a strike
price of the Placing Price. The 13,333,333 warrants will be valid for a period
of 18 months from Admission and 1,142,857 of the warrants will be issued to
Kjeld Thygesen and 1,828,571 to Colin Bird.
On 15 November 2021, the Company executed a £150,000 unsecured convertible
loan note instrument which was, with the consent of the noteholder,
subsequently increased to £150,000 (the "November 2021 Convertible Loan
Note") and has received subscriptions of £119,500 in respect of the November
2021 Convertible Loan Note from private investors including £37,000 from Lion
Mining Finance Ltd, a company controlled by Colin Bird, a director of the
Company. The November 2021 Convertible Loan Note did not pay interest and was
repaid at Admission by the issue of i) 4,552,381 New Ordinary Shares at a 25%
discount to the Placing Price of which 1,409,524 was issued to Lion Mining
Finance Ltd and ii) one (1) warrant for each New Ordinary Share issued to the
noteholders at a strike price of the Placing Price. The 4,552,381 warrants
will be valid for a period of 18 months from Admission and 1,409,524 of the
warrants will be issued to Lion Mining Finance Ltd.
The Convertible loan notes have been treated as liability as it closely
resembles the charaterstics of a financial liability.
18. FINANCIAL INSTRUMENTS
Capital risk management
The Company manages its capital to ensure that it will be able to continue as
a going concern, while maximising the return to shareholders.
The capital resources of the Company comprises issued capital, reserves and
retained earnings as disclosed in the Statement of Changes in Equity. The
Company's primary objective is to provide a return to its equity shareholders
through capital growth. Going forward the Company will seek to maintain a
yearly ratio that balances risks and returns of an acceptable level and also
to maintain a sufficient funding base to the Company to meet its working
capital and strategic investment needs.
Categories of financial instruments
2021 2020
£ £
Financial assets
Current asset investment 102,932 223,340
Cash and cash equivalents 16,871 9,496
Other receivables 89,488 10,928
209,291 243,764
Financial liabilities classified as held at amortised cost
Trade and other payables 263,299 68,311
Convertible loan notes 679,500 -
942,799 68,311
Fair value of financial assets and liabilities
Fair value is the amount at which a financial instrument could be exchanged in
an arm's length transaction between informed and willing parties, other than a
forced or liquidation sale and excludes accrued interest. Where available,
market values have been used to determine fair values.
Fair value hierarchy
The Company uses the following hierarchy for determining and disclosing the
fair value of financial instruments which are measured at fair value by
valuation technique:
Level 1: Quoted (unadjusted) prices in active markets for identical assets or
liabilities
Level 2: Other techniques for which all inputs which have a significant effect
on the recorded fair value are observable, either directly or indirectly;
Level 3: Techniques which use inputs that have a significant effect on the
recorded fair value that are not based on observable market data
Management assessed that the fair values of current asset investment, cash and
short-term deposits, other receivables, trade and other payables and other
current liabilities approximate their carrying amounts largely due to the
short-term maturities of these instruments.
Financial risk management objectives
Management provides services to the business, co-ordinates access to domestic
and international financial markets, monitors and manages the financial risks
relating to the operations of the Company through internal risks reports which
analyse exposures by degree and magnitude of risks. These risks include
foreign currency risk, credit risk, liquidity risk and cash f low interest
rate risk. The Company does not enter into or trade financial instruments,
including derivative financial instruments, for speculative purposes.
As the Company has no committed borrowings, the Company is not exposed to any
risks associated with fluctuations in interest rates on loans. Fluctuation in
interest rates applied to cash balances held at the balance sheet date would
have minimal impact on the Company.
Foreign exchange risk and foreign currency risk management
Foreign currency exposures are monitored on a monthly basis. Funds are
transferred between the Sterling and US Dollar accounts in order to minimise
foreign exchange risk. The Company holds the majority of its funds in
Sterling.
The carrying amounts of the Company's foreign currency denominated financial
assets and monetary liabilities at the reporting date are as follows:
Financial liabilities Financial assets
2021 2020 2021 2020
£ £ £ £
US Dollars - - 167 3,682
Swedish Krona 118,342 - - -
Euros 1,387 - - -
Australian Dollars 1,846 - - -
Credit risk management
Credit risk refers to the risk that a counter party will default on its
contractual obligations resulting in financial loss to the Company. The
Company does not have any significant credit risk exposure on trade
receivables. The Company makes allowances for impairment of receivables where
there is an identified event which, based on previous experience, is evidence
of a reduction in the recoverability of cash flows.
The credit risk on liquid funds (cash) is considered to be limited because the
counterparties are financial institutions with high credit ratings assigned by
international credit-rating agencies.
The carrying amount of financial assets recorded in the financial statements
represents the Company's maximum exposure to credit risk.
Liquidity risk management
Liquidity risk is the risk that the Company will not be able to meet its
financial obligations as they fall due. Management monitor forecasts of the
Company's liquidity reserve, comprising cash and cash equivalent, on the basis
of expected cash flow. At 29 December 2021, the Company held cash and cash
equivalent of £16,871 (2020: £9,496) and the directors assess the liquidity
risk as part of their going concern assessment (see note 3).
The maturity of the Company's financial liabilities at the statement of
financial position date, based on the contracted undiscounted payments as
disclosed in note 14, falls within one year and payable on demand.
The Company aim to maintain appropriate cash balances in order to meet its
liabilities as they fall due.
Maturity analysis
Company Between Between Between
2021 On In 1 and 6 6 and 12 1 and 3
Total demand 1 month months months years
£ £ £ £ £ £
Trade and other payables 441,959 - 219,669 222,290 - -
Convertible loan notes 679,500 - - 679,500 - -
Company
2020 Between Between Between
On In 1 and 6 6 and 12 1 and 3
Total demand 1 month months months years
£ £ £ £ £ £
Trade and other payables
165,811 - 61,000 107,811 - -
19. RELATED PARTY TRANSACTIONS
Remuneration of key management personnel
The key management personnel of the Company are considered to be the
Directors. Details of their remuneration are covered in note 7.
On 20 April 2021 the Company entered into the Assignment Agreement referred to
in Note 12. The parties to the Assignment Agreement are Lion Mining Finance
Limited (a company controlled by Colin Bird, a director of the Company), the
Company and Camden Park Trading Ltd (a company controlled by Colin Bird, a
director of the Company). The Assignment Agreement was conditional on the
Company acquiring the Nordic Projects, which occurred when the Company listed
on 6 May 2022 and the consideration under the Assignment Agreement of
£802,000 was settled £52,000 in cash and £750,000 settled by the issue of
ordinary shares in the Company at the Loan Note Conversion Price (see Note
17).
The interests of the Directors in the issued share capital of the Company
following Admission, , was as follows:
Prior to Admission Post Admission
Director Number of Ordinary Shares Percentage of issued ordinary share capital Number of Ordinary Shares Percentage of issued ordinary share capital
Colin Bird* 16,875 0.15% 45,069,227 20.53%
Kjeld Thygesen - - 2,142,857 0.98%
Alex Borrelli 82,777 0.74% 82,777 0.04%
Evan Kirby - - - -
* At Admission, includes 3,695,238 shares held by Lion Mining Finance Ltd and
33,428,571 shares held by Camden Park Trading Ltd, companies controlled by
Colin Bird
Colin Bird pursuant to the Placing agreed to subscribe for 1,571,400 of the
Placing Shares at the Placing Price at Admission and also was issued at
Admission 1,571,400 Placing Warrants. To conserve working capital during the
period prior to Admission, the Company agreed with Colin Bird that fees
accruing to him would be settled by the issue to him of Ordinary Shares at the
Placing Price. Colin Bird was issued with 4,528,571 Ordinary Shares in
satisfaction of all directors fees amounting to GBP158,500 due to him in
relation to the 4 year period from April 2018 to April 2022 at Admission
Kjeld Thygesen pursuant to the Subscription has agreed to subscribe for
1,000,000 Subscription Shares at the Placing Price and will also be issued at
Admission 1,000,000 Subscription Warrants,
Included in the £350,000 in respect of the July 2021 Convertible Loan Notes
subscriptions received was £30,000 from Kjeld Thygesen and £48,000 from
Colin Bird, both directors of the Company. Included in the £150,000 in
respect of the November 2021 Convertible Loan Notes subscriptions received was
£37,000 from Lion Mining Finance Limited, a company controlled by Colin Bird,
a director of the Company. These subscriptions by Colin Bird, Kjeld Thygesen
and Lion Mining Finance Limited were on the same terms as the other
subscribers to these convertible loan notes which are detailed in Note 17.
Colin Bird was non-executive chairman of Jubilee Metals Group Plc (he resigned
on 26 May 2022) which has an interest of 1.48% in the Company. There were no
transactions with Jubilee during the year.
The Company entered into a licence agreement dated 1 February 2022 with Lion
Mining Finance Limited (a company controlled by Colin Bird, a director of the
Company). Pursuant to this agreement, the Company has been granted a licence
to use the premises at 7-8 Kendrick Mews, London SW7 for a period of 12 months
with effect from 1 December 2021 for a licence fee of £1,000 per month. In
addition, Lion Mining Finance Limited provides basic administrative and
support services as required by the Company from time-to-time.
20. NET DEBTS RECONCILIATION
2021 2020
£ £
Cash and cash equivalent 16,871 9,496
Net debt 16,871 9,496
Net debt as at 29 December 9,496 37,396
Cash flow from operations (70,809) (86,309)
Proceeds from convertible loan notes 679,500 -
Investment in Nordic Projects and related transaction costs (673,755) -
Cash flow from sale of Investment shares 72,439 58,409
Net debt 16,871 9,496
21. EVENTS AFTER THE REPORTING DATE
On 6 May 2022 the Company's shares were admitted to the Official List (by way
of a Standard Listing under Chapter 14 of the Listing Rules) and to trading on
the Main Market of the London Stock Exchange. This followed a £3.25million
fundraising (before expenses) at a placing price of 3.5 pence per share. At
the time of listing the Company issued 208,321,253 new ordinary shares for
fundraising purposes and to complete the acquisition of Northern X Finland OY
and Northern X Scandinavia AB running the Nordic projects as outlined in note
12.
On 13 May 2022 the Company exercised its option to conditionally acquire the
Espedalen, Hosanger and Sigdal nickel-copper-cobalt exploration projects in
Norway from EMX Scandinavia AB (previously named Eurasian Minerals Sweden AB)
("EMX") by the issue of 20,226,757 new ordinary shares in the Company.
Kendrick has also made a payment of US$81,949 to EMX to meet a shortfall of
this amount in the exploration expenditure to be incurred during the option
period. The acquisition is conditional upon the Norwegian Directorate for
Mineral Administration approving the transfer of the licenses to a wholly
owned subsidiary of Kendrick. At the time this process is completed, the
Company will apply for the 20,226,757 new ordinary shares to be admitted to
trading on the Standard Segment of the London Stock Exchange.
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