REG - Kodal Minerals PLC - Annual Results and Notice of AGM
03/09/2024 07:00
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RNS Number : 6114C Kodal Minerals PLC 03 September 2024
Kodal Minerals Plc / Index: AIM / Epic: KOD / Sector: Mining
3 September 2024
Kodal Minerals plc ("Kodal Minerals", the "Company" or the "Group")
Annual Results & Notice of AGM
Kodal Minerals, the mineral exploration and development company focused on
lithium and gold assets in West Africa, is pleased to provide its final
results for the year ended 31 March 2024.
The Company's Annual Report and Accounts will be made available on the
Company's website www.kodalminerals.com (http://www.kodalminerals.com) shortly
and will be posted to shareholders today. The Company's annual general meeting
("AGM") will be held at 11:00am on 26 September 2024 at Fieldfisher LLP, 9th
Floor, Riverbank House, 2 Swan Lane, London EC4R 3TT.
Operational Highlights:
Bougouni Lithium Project, Mali ("Bougouni" or the Project")
· Kodal finalised the US$117.75 million funding package to develop the
Bougouni Lithium Project Stage 1 ("Bougouni" or "the Project") with our
operating partner Hainan Mining Co. Limited ("Hainan"), a subsidiary of Fosun
International Ltd ("Fosun")
· Completed the transfer of the Project to Kodal Mining UK Limited
("KMUK"), , which is 51% owned by Hainan in return for US$100 million
investment, with Kodal retaining a 49% stake
· Additional US$17.75m investment into Kodal Minerals plc by Hainan to
fund the exploration of new investment opportunities
· Increased Bougouni's JORC compliant Mineral Resource Estimate ("MRE")
by 40% to 31.9Mt at 1.06% Li(2)O, following reverse circulation ("RC")
drilling completed in the first half of 2023
· Construction of Bougouni Stage 1 using a dense media separation
("DMS") approach now well underway, with the 2020 feasibility study capex
estimate of US$65m confirmed following a full project review
§ Appointment of Bougouni mining contractor in early 2024 - a consortium
consisting of Malian mining contractor EGTF Mining SARL ("EGTF") and Auxin
Mining Services Mali SARL ("Auxin"); earthwork and civil engineering works
commenced and completed post period end
§ Long lead items of DMS units and dual stream crushing modules ordered and
delivery to Port of Abidjan in Côte d'Ivoire received post period
§ Construction of all access roads to Bougouni site completed
· Appointed Lei ("David") Teng as Non-Executive Director to the Board
as Hainan's representative
· Received approval for the updated Environmental and Social Impact
Assessment ("ESIA") for Bougouni Stage 1 DMS from Mali's Department of the
Environment including Kodal's Community Development Plan
· Implementation of several targeted ESG community initiatives
including: funding a full-time school teacher at Kola Sokoura village;
donation of tractors to support agriculture; road upgrades; and installation
of solar capacity at community water well
· Project on track to becoming the first London-listed lithium producer
in West Africa with maiden production expected at the end of 2024.
Gold portfolio
o Strategic review of Group gold projects completed with the Fatou and
Niéllé Gold Projects prioritised as core assets
o Development of an exploration targeting assessment by Kodal's exploration
geologists to finalise planning of exploration programmes at both projects
o Company is well funded to undertake the required exploration at Fatou and
Niéllé prospects and advance projects towards maiden minerals resource
estimates.
Financial & Corporate Highlights:
• Group operating loss of £3,344,000 after impairments
and share based payments (2023: £1,461,000 loss)
• 7.9% decrease in exploration and evaluation
expenditure of £2,971,000 (2023: £3,227,000)
• Sale of the Bougouni Lithium Project to KMUK reduced
the carrying value of the lithium projects in Mali to £nil (2023:
£11,216,000)
• 34.6% decrease in the value of gold projects in Mali
and Cote d'Ivoire to £2,162,000 (2023: £3,306,000)
• 266% increase in Group net assets of £57,430,000
(2023: £15,683,000)
• Cash balance of £16,327,000 as at 31 March 2024
(2023: £545,000).
Commenting on the results, CEO Bernard Aylward said:
"The past 12 months have been truly transformational for Kodal as the Bougouni
Lithium Project has advanced in Mali and transitions from developer to
producer, with Stage 1 first production firmly on track for Q4 2024, which
would make Bougouni the first London-listed lithium producer.
This will be no small achievement and is testament to the team's strong
capital discipline maintaining capex within the US$65m estimate from the 2020
feasibility study, strong community relations in Mali thanks to KMUK's
inclusive ESG programme and operational expertise onsite led by Operations
Director Steve Zaninovich.
We are excited about the role Kodal lithium will play in the global EV
revolution, providing feedstock to Hainan's lithium hydroxide plant in China,
which, in turn, is supplying Asian markets including Japanese and Korean car
battery makers.
Additionally, we would like to thank Hainan for the huge support since
becoming our operating partners and largest shareholder in November, in
particular the invaluable experience our new Non-Executive Director David Teng
has brought to Kodal. Together, we will develop Bougouni into a truly prolific
lithium project in West Africa.
We are advancing the development of Bougouni firmly on schedule with the
delivery of DMS units and equipment at the Port of Abidjan expected this week.
I look forward to updating shareholders on progress in the months ahead and
would like to express our utmost gratitude for your unrelenting support as we
embark on the next crucial stage of our lithium mining journey."
**ENDS**
For further information, please visit www.kodalminerals.com or contact the
following:
Kodal Minerals plc
Bernard Aylward, CEO Tel: +61 418 943 345
Allenby Capital Limited, Nominated Adviser
Jeremy Porter/Vivek Bhardwaj/Nick Harriss Tel: 020 3328 5656
SP Angel Corporate Finance LLP, Financial Adviser & Joint Broker
John Mackay/Adam Cowl Tel: 020 3470 0470
Canaccord Genuity Limited, Joint Broker
James Asensio/Gordon Hamilton Tel: 0207 523 4680
Burson Buchanan, Financial PR
Bobby Morse/Oonagh Reidy Tel: +44 (0)20 7466 5000
kodal@buchanancomms.co.uk
CHAIRMAN'S STATEMENT
I am delighted to present the Annual Report of Kodal Minerals plc for the year
ended 31 March 2024.
This financial year saw our Group deliver on its near-term strategy of
developing the Bougouni Lithium Project into a significant producer of
spodumene concentrate, a product critical for the lithium-ion battery
industry. The completion of the financing by our operating partner Hainan, a
subsidiary of Fosun International, and the commencement of construction of
Bougouni, are key stepping stones in our broader strategy of becoming a
focused lithium explorer and developer participating in the rapidly expanding
global electric vehicle and battery storage industries.
The relationship with Hainan, Fosun's industrial platform for mining and
resources, is critical to the construction of Bougouni. This partnership was
cemented through the completion of the milestone funding package in November
2023, providing US$100m for the construction, development and commencement of
production at Bougouni, for a 51% stake in KMUK, which owns the Bougouni
asset. This funding also provides capital for an extensive exploration
programme across the Bougouni licence area. The transaction with Hainan gave
rise to a non-cash revaluation gain in the Group of £30.5 million, recognised
in the year to 31 March 2024.
As discussed in more detail in the Operational Review, significant progress
was made in the financial year, and has continued to be made over the last six
months, in constructing the mine and building the operational teams in Mali.
We have also continued to work with and support the local community through a
wide variety of local initiatives and look forward to continuing to build on
this strong relationship.
The Hainan agreement also provided additional funding for continued
exploration, and our ongoing drilling at the Boumou prospect continues to
exceed our expectations. The extension drilling has returned wide,
high-grade intersections that have allowed the Company to announce a
significant 40% increase to Bougouni's mineral resource, adding 10.6Mt to
bring the overall JORC compliant Mineral Resource Estimate ("MRE") to 31.9Mt
at 1.06% Li(2)O following 3,230 metres of reverse circulation ("RC") drilling
completed in the first half of 2023.
The Board has undertaken a review of the Group's gold projects during the year
and intends to focus ongoing attention on the Fatou and Niéllé gold
projects, where we believe there is a reasonable prospect of advancing the
projects towards mineral resource estimates.
The direct investment of US$17.75m into Kodal Minerals plc by Hainan, becoming
our largest single shareholder with a stake of 14.51%, has provided a platform
for the Company to seek additional investment opportunities in the lithium
sector.
Kodal took the opportunity to further strengthen the Board with the
appointment of Lei ("David") Teng, President and Vice Chairman of Hainan, as a
Non-executive Director in March 2024. David is able to draw on over fifteen
years' experience from his many roles in natural resources at the Fosun Group,
from Investment Director to Co-Chairman, and is a welcome addition to our
management team at a Board level as well as at project level in Mali. Dr
Qingtao Zeng, retired from the board in September 2023 and I would like to
thank him for his valuable contributions to the Group during his time as a
director.
Kodal remains firmly committed to the highest standards of corporate
governance and, as guided by the QCA Code, we are continuing to look to
further improve and strengthen our team as the Company evolves from
development into production.
Outlook
As Bougouni goes into production, expected by the end of 2024, the next twelve
months will see KMUK take the final steps to become a fully-fledged lithium
producer in West Africa. The transition from developer to producer is a
significant evolution in the business and scale of operations at Bougouni,
bringing with it many challenges as well as opportunities, and we remain
focussed on supporting KMUK in its successful execution of this important
milestone. We are confident that the successful development of the Bougouni
lithium mine will be achieved and that the resource base will continue to grow
in this highly prospective region which offers multiple opportunities for
future expansion.
We have had enormous support from our shareholders over the years, and most
recently from our operating partner, Hainan. We are grateful for the continued
interest and support from our shareholders, and we look forward to providing
regular updates for this exciting year ahead as Bougouni moves into
production.
Robert Wooldridge
Non-executive Chairman
2 September 2024
OPERATIONAL REVIEW
The year ended 31 March 2024 was a significant year in our progress towards
becoming West Africa's next lithium producer.
Despite the significant headwinds facing junior mining companies in most
international capital markets in recent years, the closure of the US$117.5m
financing is testament to the quality, long life and upside prospects of
Bougouni and our broader strategy. The project is now fully funded for
development and construction is well underway.
During the year, the Bougouni Lithium Project was transferred to KMUK and
Hainan took a 51% stake in KMUK for US$100m. Kodal retains a 49%
shareholding in KMUK and continues to hold significant influence over the KMUK
business. Although Kodal has a non-controlling 49% stake in KMUK, both your
Chief Executive Officer and your Operations Director are on the board of KMUK
and we are closely involved in the day-to-day decision making surrounding the
construction and development at Bougouni.
As the Bougouni Lithium Project remains the most important asset for the
Group, both in terms of management attention and impact on the financial
position, the main focus of this Operational Review is on the project's
progress and the strategy for completion of its development.
Following completion of the Hainan investment in November 2023, the team in
Bougouni were able to progress the onsite activity and construction of Stage
1 dense media separation ("DMS") processing plant at a more rapid rate, with
first production planned by the end of 2024. In addition, we continued our
exciting exploration and resource extension drilling that continued to
highlight significant potential for expansion of the Bougouni resource. A
summary of progress is provided below.
Development progress
Following a formal tender process in the first quarter of 2024, KMUK entered
into contracts with the main contractors for the mine construction, all of
whom have made significant progress since the year end:
· The manufacture of the DMS processing plant and crushing circuit
modules was commissioned during the year and has now been completed in
China. The items are currently being shipped to the port of Abidjan prior to
transport to site.
· Structural steelwork fabrication is complete for the main process
plant buildings and is currently being transported to Bougouni, along with
spare parts, consumables and essential supplies.
· A consortium of mining contractors comprising Auxin Mining Services
Mali SARL ("Auxin") and Enterprise Générale Traoré et Frères SARL ("EGTF")
(the "Mining Contractors") was awarded the Mining Contract at Bougouni during
the financial year under review and mobilised to site in April 2024.
· The Mining Contractors have now completed site clearing, topsoil
removal and storage and have commenced the removal of overburden and waste at
the Ngoualana open-pit site in order to expose the Ngoualana spodumene bearing
ore in readiness for commissioning later in the year.
· Since the year end, the contract for the site civil construction has
been awarded to Bambara Resources SARL ("Bambara"), a local Malian company,
working together with an established and experienced Malian-based company, GZB
Mali ("GZB"), part of the China-based Gezhouba Group.
· The preparation of foundations and concreting for the processing
plant is continuing on schedule and is expected to be completed in advance of
the arrival of the plant and crushing circuit for construction on site.
· With the absence of reticulated power in the Bougouni region, a 5MW
diesel power plant was procured from Jiangsu Fukangsi in China, comprising
Cummins engines. The power solution will include in its design the
installation of complementary solar power, however due to the short time frame
for project construction the solar circuit will be deferred into the future;
likely after 12 months of operation.
The development schedule and capital budget for the Stage 1 DMS operation has
been reviewed in conjunction with the Hainan team, with costs updated to
reflect the awarded contracts and the finalisation of design and construction
of the plant items. The confirmed capital expenditure estimate to build the
Project remains at US$65 million, as per the 2020 feasibility study, a
testament to the conservative nature of our approach, further emphasised by
the ongoing inflationary environment within global supply chains.
Bougouni Development Activity
Registration of the KMUK's new subsidiary mining company in Mali, Le Mines de
Lithium de Bougouni SA ("LMLB"), has been completed and LMLB will be the
operator of the Bougouni lithium mine with the Government of Mali entitled to
a 10% free carried interest and the right to purchase an additional 10% equity
interest according to the 2019 Mining Code. The transfer of the Bougouni
mining licence from Future Minerals SARL to LMLB is still pending formal
approval of the Direction Nationale de la Geologie et des Mines ("DNGM")
in Mali, however the moratorium on dealing with mining concessions imposed by
the Malian Government has prevented the transfer to date. The Government
announced on 9 July 2024 that the moratorium will be lifted and Kodal
continues to liaise with the DNGM to secure completion of the transfers as
soon as possible.
DMS Plant and crushing circuit
The manufacture of the crushing circuit and the DMS processing equipment is
complete with both suppliers delivering on schedule all equipment and
associated spares. The material is now in transit in two cargo shipments
from China to the port of Abidjan in Côte d'Ivoire ahead of trucking to site.
The crushing modules were manufactured by Beijing HighDynamic Technology Co.,
Ltd. ("BHD"), and the DMS equipment manufactured by Haiwang Technology Group
("Haiwang") in Shandong Province, China. These fabrication groups are
specialists in the manufacture of mining plant and have completed several
projects of similar size and nature to Bougouni. The Haiwang group will send
key construction specialists to site to supervise the final installation and
remain for the commissioning of the plant to ensure full working order in
accordance with contractual performance warranties.
Mining Contract
The mining contract has been awarded to the Mining Contractors. EGTF, a
fully owned Malian company, mobilised earthworks equipment to the site in
April, and immediately commenced bush clearing, topsoil stripping, and bulk
earthworks.
The process plant area earthworks are completed, and assistance has been
provided to the civil concrete contractor to ensure the construction of
foundations and footings for the plant area continues on schedule.
In May 2024, the Mining Contractors commenced the removal of weathered
overburden and waste material from the Ngoualana open pit area that will be
the source of the ore to be processed at the Bougouni DMS plant.
Civil Construction - Concrete Contract
Following a tender process to four companies with local region experience and
based on the designs from Haiwang, the concrete contract was awarded under
budget to a Malian company, Bambara Resources SARL ("Bambara"). Bambara is a
Malian company established in 2017 to provide services to the mining industry
in Mali. Kodal Minerals plc worked with Bambara previously to acquire the
concessions at Mafélé Ouest and Nkeméné Ouest that formed the "Bougouni
West" project, further details of which were announced on 30 January 2019.
Bambara is engaged as the head contractor and will utilise under sub-contract
the services of GZB, an established and experienced Malian-based company with
a China parent. GZB boasts 13 years construction experience in Mali, which
includes the development of several prominent roads and bridges, and most
notably the supply of concrete to the third bridge over the Niger River in
Bamako.
Bambara will provide all local labour and services and manage GZB, which will
provide much of the equipment, engineering technicians and on-site
supervision. The Project team believes this contracting arrangement will be
crucial to correctly interpreting the designs and drawings during
construction, since they are developed in Chinese, as part of the Haiwang
package.
Offtake Agreement
In March 2024, we reached an agreement to terminate the right of first
refusal granted to Suay Chin over 80% of the spodumene product produced at
the Bougouni Lithium Project. Kodal and KMUK are continuing negotiations
with Hainan to finalise an offtake agreement with Hainan for 100% of the
spodumene product produced at the Bougouni Lithium Project. It has been
agreed between Kodal and Hainan that any offtake agreement reached between
KMUK and Hainan will be based on market prices for spodumene and will
require express written approval from Kodal as a shareholder of KMUK. The
offtake agreement with Hainan will initially relate to spodumene production
from only the Stage 1 DMS processing plant.
Exploration update
On the 14 November 2023, Kodal announced a significant 40% increase to
Bougouni's mineral resource, adding 10.6Mt to bring the overall JORC compliant
(refer notes below) MRE to 31.9Mt at 1.06% Li(2)O following 3,230 metres of
reverse circulation ("RC") drilling completed in the first half of 2023.
The updated JORC compliant Mineral Resource estimate for the Bougouni Lithium
Project, including the Sogola-Baoulé, Ngoualana and Boumou prospects is
tabulated below:
Prospect Indicated Inferred Total
Tonnes Li(2)O% Contained Li(2)O Tonnes Li(2)O% Contained Li(2)O Tonnes Li(2)O% Contained Li(2)O
(Mt) Grade (kt) (Mt) Grade (kt) (Mt) Grade (kt)
Ngoualana 3.2 1.19 38.0 3.5 0.82 28.5 6.7 1.00 66.7
Sogola-Baoulé 8.4 1.09 91.9 3.8 1.13 42.8 12.2 1.10 134.8
Boumou 13.1 1.04 135.8 13.1 1.04 135.8
TOTAL 11.6 1.12 129.9 20.4 1.02 207.1 32.0 1.06 337.3
Notes:
These mineral resources are reported in accordance with the Australasian Joint
Ore Reserves Committee Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves 2012 (the "JORC Code" or "the Code"). The Code
sets out minimum standards, recommendations and guidelines for Public
Reporting in Australasia of Exploration Results, Mineral Resources and Ore
Reserves.
Sogola-Baoulé resource estimate unchanged from 2019. A 0.5% Li(2)O lower
cut-off applied, and resource wireframe defined by a 0.3% Li(2)O selected
boundary. Estimate completed utilising Surpac software.
Ngoualana resource estimate reported utilising a 0.5% Li(2)O lower cut-off.
All pegmatite mineralisation modelled including zones of waste material for a
fully diluted model. Estimate completed using Leapfrog modelling software.
Boumou resource reported using a 0.75% Li(2)O lower cut-off. All pegmatite
mineralisation modelled including zones of waste material for a fully diluted
model. Estimate completed using Leapfrog modelling software.
Figures in table may not sum due to rounding. The contained metal is
determined by the estimate tonnage and grade.
The Boumou prospect, located centrally within the Bougouni granted mining
licence area, was a key driver in this increase with the drilling completed in
2023 highlighting wide, high grade pegmatite veins that remained open along
strike and at depth. Following the success of the 2023 campaign and the
expansion of the MRE for the Boumou prospect to 13.1Mt at 1.04% Li(2)O, the
exploration drilling continued in early 2024 with a focus on the continued
extension and definition to prepare for an updated mineral resource estimate
and future planning of the Project development strategy.
The 2024 drilling campaign has continued to return strongly mineralised
pegmatite intersections up to 66m at 1.26% Li(2)O from 72m in drill hole
KLRC211 and has added significantly to the strike length of the prospect.
Diamond core drilling is ongoing to provide detailed geological information to
support the interpretation of the mineralised zones. The initial geological
logging and comparison of the diamond drill core and the logging of the RC
drill holes has confirmed the continuity of the pegmatite veins and
highlighted the coarse nature of the spodumene mineralisation.
Bougouni Environmental Sustainability and Community Relations
We have achieved two key milestones during the year that are of critical
importance to the Project, the Company and our stakeholders; an updated
Environmental, Social Impact Assessment (ESIA) and the establishment of our
Community Development Programme.
Strong relations with the Malian government are key to our success at Bougouni
and in early 2024, KMUK received approval for the updated ESIA for Bougouni
Project Phase 1 DMS processing from Mali's Department of the Environment.
Professor Tiémoko Sangaré, Minister for Environment, was welcomed to the
Project site in early February 2024 and our team presented the Minister with
the features and plans for the Phase 1 DMS operation, with a specific focus on
the environment and our programme for future community development.
The approval of the ESIA alongside Kodal's Community Development Plan marks
the completion of all outstanding permitting. Our positive engagement with the
local community in Bougouni is crucial to the ongoing success of the Project,
and I am delighted with our team's continued work over the past twelve months.
KMUK's financing of current social initiatives has been informed by our
community consultations and includes the funding of a full-time school teacher
at Kola Sokoura, the village closest to Bougouni, and the donation of several
tractors to local communities to support sustainable agriculture. In addition,
KMUK has addressed key local infrastructure requirements with the replacement
of a broken water pump in the community, upgrades to existing access roads and
the installation of additional solar capacity at the local water well at
Ngoualana village.
We remain committed to open dialogue and ongoing engagement with community
leaders to ensure we maintain our active partnership, and to supporting the
communities directly and indirectly as a part of our Community Development
Programme.
Kodal Minerals 100% Controlled Assets
Kodal retains a portfolio of gold focussed exploration assets in Mali and
Côte d'Ivoire. Kodal's management has continued to review the projects with a
particular focus on the legal ownership, the age of concessions and
prospectivity and ensures that all government compliance, reporting and fees
are kept up to date and that future expenditure on the projects is in line
with the Company targets and expectations.
Exploration Concession Review
The Company's gold projects have been reviewed, and the table below contains
the assets on which the Company will focus future exploration activity in Mali
and Côte d'Ivoire.
Table of Concessions - Kodal Gold Concessions in West Africa:
Tenements Country Kodal Economic Ownership Project Validity
Boundiali Côte d'Ivoire 100% direct ownership (under application) Gold Exploration Licence application submitted and in process. Application updated during
2020 and application remains in good standing.
Niéllé Côte d'Ivoire 100% direct ownership Gold Exploration Licence valid and in good standing. Initial licence expired on 7 January
2017, and Renewal decree received on 28 February 2018 for a 3 year- period.
Second Renewal decree received on 18 December 2020 for a 3 year-period.
On 8 March 2023 the Company received a further 2 year extension of the
Niéllé concession with Decree number No. 000298 MMPE/DGMG/DCM
M'Bahiakro Côte d'Ivoire 100% direct ownership Gold Exploration Licence application submitted and in process.
(under application) Application updated during 2020 and application remains in good standing.
Fininko Mali Held through option agreement giving right to acquire 100% ownership Fatou Project Licence in good standing. First renewal granted by Arrêté number
2021-2876/MMEE-SG of 6 August 2021 for a period of 3 years.
Gold Exploration
Foutiere Mali Held through option agreement giving right to acquire 100% ownership Fatou Project Licence in good standing. Arrêté number 2017-0170/MM-SG of 2 February 2017.
Gold Exploration Application for second three-year renewal has been lodged and all fees and
taxes have been paid.
Renewal approval pending.
The Board has undertaken a review of the Group's gold projects during the
year, which has resulted in certain of the Group's gold projects being removed
from the concession table.
The Dabakala and Tiebissou projects in Côte d'Ivoire have been removed from
the concession table due to significant delays in receiving approval for the
renewal of concession in the case of the Korhogo project, and for the Dabakala
project the ongoing review of the potential forestry permit and discussions
with the DGMG of Côte d'Ivoire have lowered confidence with these licences.
In Mali, the Djelibani Sud, Nangalasso, Sotian and Tiedougoubougou concessions
have been removed from the table following the Company's review of the age,
prospectivity and low potential for exploration expenditure relative to the
focus on the Fatou project. The Company has negotiated a sale of the
Djelibani Sud, Nangalasso, Sotian and Tiedougoubougou concessions to the
original vendors of the concessions which is being documented and these
concessions are therefore included within assets held for resale at the year
end.
As a result of the review of gold projects outlined above, an impairment
charge of £1,572,000 (2023: £nil) has been recognised in the year.
Gold Exploration Strategy
Following the completion of the Hainan financing transaction, Kodal is well
funded to undertake the necessary exploration at the Fatou and Niéllé
prospects to advance these projects towards maiden minerals resource
estimates. Kodal's exploration geologists have visited both the Fatou and
Niéllé sites during the year and developed an exploration targeting
assessment to finalise planning of the exploration programmes.
In northern Côte d'Ivoire, the Niéllé project remains a high priority for
infill and definition drilling along the 4.5km gold anomalous trend for which
previous drilling has returned significant gold intersections including 26m @
1.95 g/t Au from 32m, and 26m @1.79 g/t Au from 108m. The geological review
of this project highlights the potential for resource definition drilling
supported by additional geophysics and surface geochemistry to further extend
the prospective gold anomalous corridor.
In southern Mali, the Fatou project is a further priority for gold exploration
and geological field visits have confirmed the surface geochemical anomalies,
the presence of substantial artisanal mining sites and limited effective
historic drilling. Previous exploration at the Fatou project completed
between 2009 and 2014 targeted limited areas of artisanal workings and
concluded an historical resource estimate of approximately 350 koz Au. Kodal
geologists have outlined additional extensions to the historic exploration
drilling as well as identifying new priority areas. The Group has completed
one exploration drilling programme that returned drill intercepts of 23m @
1.63 g/t Au from 82m, and 6m @ 1.49 g/t Au from 40m.
Kodal retains a primary focus on the continued exploration and development of
the Bougouni Project, however as development is proceeding the Company is now
able to focus more attention on the priority projects of Fatou and Niéllé
and expects to undertake exploration programmes over the next 12 months to
include detailed geological review, geochemical sampling, geophysical surveys,
and drilling campaigns.
Outlook
In summary, the year to 31 March 2024 saw a rapid acceleration of our
transition from explorer to developer, whilst the next financial period will
see us emerge as a leading West African producer of high quality spodumene
concentrates, when Bougouni starts production as currently expected by the end
of 2024.
I look forward to reporting on construction progress at Bougouni and on our
exploration activities in the months ahead as we edge closer to becoming the
first ever London-listed Lithium producer in West Africa.
Finally, I would like to recognise the important contributions of all our
stakeholders and partners this year and thank them for their support. Along
with them, I look forward to our continued progress and success.
Bernard Aylward
Chief Executive Officer
2 September 2024
FINANCE REVIEW
Results of operations
For the year ended 31 March 2024, the Group reported an operating loss of
£3,344,000, including share-based payment costs of £242,000 (2023:
£517,000) and impairment of exploration and evaluation assets of £1,572,000
(2023: £nil), compared to a loss of £1,461,000 in the previous year. The
Group has continued to run the offices in Mali and Côte d'Ivoire and
significant additional exploration activity for both gold and lithium was
undertaken during the year, although lithium expenditure by the Group ceased
in November 2023 following the sale of the Bougouni Lithium Project to KMUK.
Further information is provided in the Operational Review above.
During the year, the Group invested £2,971,000 (2023: £3,227,000) in
exploration and evaluation expenditure on its various projects. The sale of
the Bougouni Lithium Project reduced the carrying value of exploration and
evaluation expenditure by £13,488,000. Following a strategic review, an
impairment charge of £1,572,000 was made against the Group's remaining gold
assets. As a result, the carrying value of the Group's capitalised exploration
and evaluation expenditure decreased from £14,522,000 to £2,162,000 after
taking account of the effects of foreign exchange. At 31 March 2024, after
taking account of the effects of foreign exchange, the carrying value of the
gold projects in Mali and Côte d'Ivoire was £2,162,000 (2023: £3,306,000)
and of the lithium projects in Mali was £nil (2023: £11,216,000).
On 15 November 2023 the Group transferred ownership of the Bougouni Lithium
Project into KMUK. The company completed a funding package with Hainan in
November 2023, that provided US$100m for the construction, development and
commencement of production at Bougouni, for a 51% stake in KMUK.
Kodal continues to hold significant influence over KMUK and is able to
participate in the financial and operating decisions of KMUK through its two
appointed board members. As a result, KMUK is recognised as an associate by
Kodal for the year ended 31 March 2024. The investment in KMUK is valued at
Kodal's share of the net assets of KMUK and Kodal's share of the profit or
loss of KMUK is shown in the consolidated statement of comprehensive income.
Kodal's share of the net assets of KMUK as at 31 March 2024 was £31.3 million
and of KMUK's loss for the period was £84,000.
As a results of the transaction with Hainan, Kodal has undertaken a
revaluation of its remaining 49% stake in KMUK, which has given rise to a gain
on sale of a subsidiary undertaking of £30.5 million, recognised in the year
to 31 March 2024. Hainan also made a direct equity investment of US$17.75m
into Kodal Minerals PLC.
Cash balances as at 31 March 2024 were £16,327,000, an increase of
£15,782,000 on the previous year's level of £545,000. Net assets of the
Group at the year-end were £57,430,000 (2023: £14,883,000).
Financing
In November 2023, the Company completed a funding transaction with the Hainan
group regarding the Bougouni Lithium Project in Mali. Alongside funding for
the Project, the transaction also included a US$17.75 million equity
subscription by the Hainan group into Kodal.
In addition, the Company has raised £700,000 during the year from the
exercise of share options, warrants and performance share rights in May 2023
and November 2023.
Going concern and funding
The Group is still in the exploration and development phase of its business
and the operations of the Group are currently being financed by funds which
the Company has raised from the issue of new ordinary shares.
The Directors have prepared cash flow forecasts for the period ending 31 March
2026. The forecasts include additional exploration expenditure for the
Group's gold assets, as well as covering ongoing overheads and include a
contingency for cash calls on the Bougouni Lithium Project during its
development phase. The forecasts show that the Group has sufficient cash
resources available to allow it to continue as a going concern and meet its
liabilities as they fall due for a period of at least twelve months from the
date of approval of these financial statements without the need for a further
financing. As at 27 August 2024, the Group has cash at bank amounting to
£18,477,000. Accordingly, the financial statements have been prepared on a
going concern basis.
Utilising key performance indicators ("KPIs")
The following KPIs are used by the Group to assist it in monitoring its cash
position and assessing costs and exploration and development activities:
KPI 31 March 2024 31 March 2023
Cash and cash equivalents (a) £16,327,000 £545,000
Administrative expense (b) £1,389,000 £944,000
Exploration and evaluation expenditure (c) £2,971,000 £3,227,000
The directors have provided more information on the state of the Group's
financing and operational activity above.
a. 'Cash and cash equivalents' is used to measure the Group's financial
liquidity. Cash and cash equivalents have increased by £15,782,000 in the
year following the equity investment by the Hainan group.
b. 'Administrative expenses' monitored as a KPI above excludes one-off
legal fees relating to the Hainan funding transaction, 'Administrative
expenses' is used to measure the Group's administrative costs and operating
results. Administrative expenses for the year were £1.39 million, an
increase of £0.4 million compared to the previous year. Group corporate
activity increased this year as negotiations were concluded regarding the
future of the Bougouni Lithium Project, following which the Remuneration
Committee approved increases to Directors' remuneration. The Group has also
continued to run the offices in Mali and Côte d'Ivoire.
c. 'Exploration and evaluation expenditure' is used to measure expenditure
on the Group's gold and lithium projects. Exploration and evaluation
expenditure in the year was £0.3 million lower than prior year. Investment
in the Bougouni Lithium Project continued until November 2023 when the project
was sold to KMUK. Expenditure after that date focussed on the Group's gold
assets which has continued at a lower level.
As the Bougouni Lithium Project enters the development and production phase,
additional KPIs are being developed and used by the Board to assist in
tracking KMUK's operational progress, including monitoring performance against
the production timetable and forecast construction spend and the level of
lithium reserves.
Financial risk management objectives and policies
The Group's principal financial instruments comprise cash and trade and other
payables. It is, and has been throughout the year under review, the Group's
policy that no trading in financial instruments shall be undertaken. The main
risks arising from the Group's financial instruments are liquidity risk, price
risk and foreign exchange risk. The Board reviews and agrees policies for
managing each of these risks and they are summarised below.
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash reserves
to fund the Group's exploration and operating activities. Management prepares
and monitors forecasts of the Group's cash flows and cash balances monthly and
ensures that the Group maintains sufficient liquid funds to meet its expected
future liabilities. The Group intends to raise funds in discrete tranches to
provide sufficient cash resources to manage the activities through to revenue
generation.
Price risk
The Group is exposed to fluctuating prices of commodities, including gold and
lithium, and the existence and quality of these commodities within the licence
and project areas. The Directors will continue to review the prices of
relevant commodities as development of the projects continues and will
consider how this risk can be mitigated closer to the commencement of mining.
Foreign exchange risk
The Group operates in a number of overseas jurisdictions and carries out
transactions in a number of currencies including Sterling, CFA Franc, US
dollars and Australian dollars. The Group does not have a policy of using
hedging instruments but will continue to keep this under review. The Group
operates foreign currency bank accounts to help mitigate the foreign currency
risk.
Principal risks and uncertainties
The Group is exposed to a number of risks which it seeks to mitigate as set
out in the table below:
Risk Comment and Mitigating Actions
Operational risk
The Bougouni Lithium Project is operated through KMUK, in which the Group is a To help manage the operational risk and work in partnership with Hainan, our
minority shareholder and does not have control over matters such as costs CEO and Operations Director are on the board of KMUK, the JV vehicle, and our
associated with development or adherence to schedule. Operations Director has been appointed Deputy General Manager of Bougouni
Mining SA, the operations company building the mine and processing plant.
As the Bougouni Lithium Project enters the development phase, KMUK will be
entering into a significant number of new contracts for construction, mining, The Operations Director spends large amounts of his time in Mali and is very
transportation etc, which mean that the Project will be dependent on the involved in the day-to-day decision making.
performance of third parties. In addition, the Project will be employing a
large workforce and its success will depend on the team's ability to recruit
and retain key staff members.
The operation of KMUK is governed by a shareholder agreement between the
Hainan group and Kodal, with key decisions requiring the approval of
shareholders.
If the management team is unable to manage the increased operational risks,
the Bougouni Lithium Project may not be delivered on schedule and/or within
budget.
Financial Risk
The Bougouni Lithium Project is now entering the development phase and Kodal's CEO and Operations Director are on the board of KMUK and are closely
consequently has significant contracted financial commitments. Working involved in the financial management of KMUK. In addition, the Board
capital issues may arise for KMUK in the event of project delays and/or regularly reviews the progress of the Bougouni Lithium Project against budget
unbudgeted overspends. Depleted cash resources in KMUK may require the and schedule to ensure that it is on target.
shareholders, including Kodal, to invest more funds to ensure that the
Bougouni Lithium Project reaches production.
The Board regularly reviews the levels of discretionary spending on capital
items and exploration expenditure within the Group's projects. This includes
Aside from the interest in the Bougouni Lithium Project, the Group is an regularly updating working capital models, reviewing actual costs against
exploration company and does not generate revenue or self-sustaining funding budget and assessing potential impacts on future funding requirements and
at this stage. The Group requires funds to support ongoing exploration and performance targets.
future development of mineral properties. The Group's access to funding will
depend on its ability to obtain financing through the raising of equity
capital, joint venture projects, debt financing, farm outs or other means.
In the past, the Group has been successful in raising additional equity
finance to support its ongoing activities.
There is no assurance that the Group will be successful in obtaining the
necessary financing in a timely manner on acceptable terms to complete its
investment strategy. The equity markets and ability to raise finance remain Following the funding received by Company as part of the Hainan financing
challenging but there are recent signs of improvement. transaction, the Company has sufficient funds to support all future plans and
has no immediate plans for additional equity finance.
If the Group is unable to obtain additional financing as needed, some
interests may be relinquished, and / or the scope of the operations reduced.
Exploration Risk
The Group maintains exploration assets in Mali and Cote d'Ivoire and the There is no assurance that the Group's exploration and potential future
future success of the Company is dependent on the discovery and/or acquisition development activities will be successful, and statistically few properties
of new Mineral Reserves and Mineral Resources and the successful development that are explored are ultimately developed into profitable producing mines.
of mines therefrom. Significant risk exists within technical, legal and
financial aspects of the exploration for and the development of mines, which The Group ensures that there is regular review of projects, expenditure and
may have an adverse effect on the Group's business. exploration activity to maintain focus on targets and ensure best possible
information in the decision-making process to focus resources and expenditure
upon key exploration and development targets.
Reliability of Mineral Resources and Mineral Reserves
The Group's associated undertaking KMUK has reported Mineral Resources for its
Bougouni Lithium project in West Africa. Any estimates will be based on a
range of assumptions, including geological, metallurgical and technical The Mineral Resource estimates are prepared by third party consultants who
factors; there can be no assurance that the anticipated tonnages or grades have considerable experience and are certified by appropriate bodies.
will be achieved.
Mineral Resources are reported as general indicators and should not be
interpreted as assurances of minerals or the profitability of current or
future operations.
Licensing and Title Risk
The Group's exploration and future development opportunities are dependent The Group complies with existing laws and regulations.
upon maintaining clear tenure and access to licences as well as ensuring the
relevant operation licences, permits and regulatory consents are valid. The
licences and regulatory permits may be withdrawn or made subject to
limitations. The Group ensures that the regulatory reporting and the government compliance
requirements for each licence are met.
The granting of licences and permits are a practical matter subject to the
discretion of the applicable government or government office. The There is a risk that negotiations with a government in relation to the grant,
interpretations, amendments to existing laws and regulations, or more renewal or extension of a licence may not result in the grant, renewal or
stringent enforcement of existing laws and regulations could have a material extension taking effect prior to the expiry of the previous licence period,
adverse impact on the Group's results of operations and financial condition. and there can be no assurance of the terms of any extension, renewal or grant.
In August 2023 a new mining code (the "2023 Mining Code") passed before the The Group regularly monitors the good standing of its licences.
Republic of Mali Assemblie Nationale. The 2023 Mining Code has some
significant changes from the previous 2019 code including the intention of the
Government of Mali to increase its direct ownership of projects and changes to
certain taxes and exemptions previously applicable. The Group notes the new 2023 Mining code has been passed by the Government of
Mali, with a key element being the potential for the Government to purchase up
to an additional 20% interest in a project (previously 10% interest).
However the Company's licences where currently valid remain under the
provision of previous mining codes. The Group is maintaining regular
correspondence with the Mali government.
The Company retains the rights to the disposal proceeds of the NKéméné
Ouest concession. The Company has agreed to sell this asset, however the
completion of the transaction has been delayed due to the moratorium on the
renewal and transfer of mining concessions. The Company continues to discuss
with the DNGM and Government of Mali to progress this transfer and allow the
completion of the NKéméné Ouest sale, however no timing of the finalisation
can be provided.
Mali Mining Concessions
The Government has imposed a moratorium on the official dealings with mining The Group continues discussions with the Mali Government for all mining
concessions by the DNGM. This moratorium has resulted in significant delays concessions.
in the processing and approval of concession applications, concession renewals
and concession transfers.
The Group is impacted by the delay of the transfer of the Bougouni Mining
concession to the newly established mining company Les Mines de Lithium de
The new 2023 Mining Code was approved in August 2023, however the decree of Bougouni, a 100% owned subsidiary of KMUK. This transfer is a legally
application to provide the regulations for the operation of the new mining required transfer to allow the Mali Government to participate in the Project.
code was passed on the 4 July 2024. The licence was awarded to the KMUK's exploration subsidiary in Mali, Future
Minerals SARL, and remains in good standing.
At the date of this report, the moratorium on official dealings has not yet
been lifted. The Group is also impacted by the delay in completing the sale of the Bougouni
West concession Nkéméné Ouest as this concession is awaiting completion of
the renewal process. The Group confirms that the sale agreement remains in
good standing and it expects to complete the sale during 2024.
The Group has completed a review of the Mali gold exploration concessions and
in particular noted the age, renewal requirements where appropriate and the
requirement for new applications. The Group has determined that some
concessions are no longer appropriate to be maintained.
Political Risk
The Group has significant activities in Mali and Cȏte d'Ivoire in West A Transition Government was installed in Mali following the military coup of
Africa. The success of the Group will be influenced by the legal, political 24 May 2021. Presidential elections, originally scheduled for February 2024,
and economic situation in Mali, Cȏte d'Ivoire and the wider African region. have been postponed and no new timetable agreed.
Countries in the region have experienced political instability and economic
uncertainty in the past.
The Company maintains communications with the Government at the national
Ministry level and local levels to ensure that the Company's interests are
Government policy in the countries in which the Group operates can be promoted and protected where possible. The Company has maintained all
unpredictable, and the institutions of government and market economy may be regulatory compliance to ensure concessions and operations remain in good
unstable and subject to rapid change, which may result in a material adverse standing.
effect on the Group's operations.
The Company is monitoring the new position of the Mali Government and the
The renewal of exploration and exploitation licences is an area of risk given withdrawal from the ECOWAS bloc and formation of a new group between Mali,
the countries in which the Group operates. Whilst the Group has in place legal Burkina Faso and Niger. The potential impact on the Bougouni lithium
titles on the assets in its portfolio, there remains a risk to the Group that operation and current import and export routes, tax concessions and possible
changes within regimes could put the ownership of these assets at risk. currency risk is being investigated, however the full details have not yet
been finalised. The Company continues to operate under existing laws and
The Group is also at risk of taxation reviews that may change or apply more practices.
stringently the laws and regulations of the countries in which it operates.
In general, the security risk in Mali remains high. The security situation
The Government of Mali has announced its intention to withdraw form the West in the northeast of the country and neighbouring Burkina Faso and Niger
African trading and single currency bloc of ECOWAS. In addition the remains volatile with increased terrorist activities and civil unrest.
Government has announced to form a new group with the countries of Burkina
Faso and Niger. Negotiations are ongoing.
The Company's projects located in the south of Mali remain peaceful, however
the Company maintains regular security reviews and communication with Malian
officials to ensure the safety of all our people.
In Cȏte d'Ivoire, the political situation has been calm since 2011. The
election in 2015 returned the government of President Ouattara with increased
popular support and on 31 October 2020 President Ouattara was returned for a
further 5-year mandate.
The economic situation in Cȏte d'Ivoire is improving dramatically with
significant government expenditure on infrastructure and development activity.
S172 Statement
The Directors of the Company have a duty to promote the success of the
Company. A director of the Company must act in the way they consider, in good
faith, to promote the success of the Company for the benefit of its members,
and in doing so have regard (amongst other matters) to:
• the likely consequences of any decision in the long
term;
• the interests of the Company's employees;
• the need to foster the Company's business
relationships with suppliers, customers and others;
• the impact of the Company's operations on the
community and the environment;
• the desirability of the Company to maintain a
reputation for high standards of business conduct; and
• the need to act fairly between members of the Company.
The Directors are committed to developing and maintaining a governance
framework that is appropriate to the business and supports effective decision
making coupled with robust oversight of risks and internal controls.
The Board believes that long-term success requires good relations with a range
of different stakeholder groups both internal and external. The board has
identified Kodal's stakeholders to include employees and consultants working
for the Company, the local communities and governments in Mali and Côte
d'Ivoire in which it operates, suppliers and contractors, as well as
shareholders. With the Bougouni Lithium Project now fully funded in KMUK and
in construction, the relationships with our capital equipment suppliers, local
contractors and workforce and our operating partner Hainan are of particular
importance.
In the Corporate Governance Report, we explain the regular engagement with
employees, communities and local governments in West Africa where we operate;
and the impact assessment we have performed on the environment and local
society as part of our permitting process. We also comment on the
decision-making for the long-term success of the Company, its governance and
culture; as well as the nature and methods of communication with all
shareholders.
The Group relies heavily on having suppliers and contractors with appropriate
levels of experience and expertise of working successfully with junior miners
in West Africa, as well as professional advice for AIM quoted companies in
London. Accordingly, Kodal is committed to maintaining constructive
relationships with all its suppliers and advisers and operating in line with
its Corporate Code of Conduct.
Signed on behalf of the Board
Bernard Aylward
Chief Executive Officer
2 September 2024
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
Note Year ended 31 March Year ended 31 March
2024 2023
£ £
CONTINUING OPERATIONS
Impairment of exploration and evaluation assets 7 (1,572,302) -
Administrative expenses 2 (1,530,114) (944,473)
Share based payments 5 (241,888) (516,581)
Operating loss (3,344,304) (1,461,054)
Finance income 92,693 -
Revaluation gain on sale of subsidiary undertakings 9 30,521,645 -
Share of loss of an associate 9 (83,610) -
Profit / (loss) before tax 2 27,186,424 (1, 461,054)
Taxation 6 - -
Profit / (loss) for the year from continuing operations
27,186,424 (1, 461,054)
Other comprehensive income
Items that may be subsequently reclassified to profit or loss
Currency translation gain / (loss) 3,230 331,259
Total comprehensive income for the year 27,189,654 (1,129,795)
Profit / (loss) per share from continuing operations
Basic (pence) 4 0.1491 (0.0087)
Diluted (pence) 4 0.1431 (0.0087)
The profit / (loss) for the current and prior years and the total
comprehensive income for the current and the prior years are wholly
attributable to owners of the parent company.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2024
Registered number: 07220790
Group Group
31 March 2024 31 March 2023
Note £ £
NON-CURRENT ASSETS
Intangible assets 7 2,162,452 14,521,888
Property, plant and equipment 8 664 91,771
Investment in associate undertaking 9 31,260,186 -
Amounts due from associated undertaking 11
4,312,785 -
37,736,087 14,613,659
CURRENT ASSETS
Trade and other receivables 11 3,427,357 11,175
Cash and cash equivalents 16,326,507 544,988
Non-current assets classified as held for sale 7 79,606 513,109
19,833,470 1,069,272
TOTAL ASSETS 57,569,557 15,682,931
CURRENT LIABILITIES
Trade and other payables 12 (139,301) (800,007)
TOTAL LIABILITIES (139,301) (800,007)
NET ASSETS 57,430,256 14,882,924
EQUITY
Attributable to owners of the parent:
Share capital 13 6,325,349 5,315,619
Share premium account 13 32,624,071 18,765,206
Share based payment reserve 1,147,664 1,537,779
Translation reserve 15,862 12,632
Retained surplus / (deficit) 17,317,310 (10,748,312)
TOTAL EQUITY 57,430,256 14,882,924
The Company's loss for the year ended 31 March 2024 from continuing operations
was £2,949,953 (2023: £1,206,922) and total comprehensive loss for the
year was £2,949,953 (2023: £1,206,922).
The financial statements were approved and authorised for issue by the board
of directors on 2 September 2024 and signed on its behalf by
Charles Joseland
Director
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
Attributable to the owners of the Parent
Share capital Share premium account Share based payment reserve Retained surplus / (deficit) Total equity
Translation reserve
Group £ £ £ £ £ £
4,947,595 15,933,071 (9,622,062) 12,090,655
At 31 March 2022 1,150,678 (318,627)
Comprehensive income
Loss for the year - - - - (1,461,054) (1, 461,054)
Other comprehensive income
Currency translation gain - - - 331,259 - 331,259
Total comprehensive income for the year - - (1,461,054) (1,129,795)
- 331,259
Transactions with owners
Share based payment - - 721,905 - - 721,905
Proceeds from shares issued 334,821 2,665,179 - - - 3,000,000
Proceeds from exercise of share options 33,203 309,171 - - 342,374
-
Share options lapse - - (334,804) - 334,804 -
Share issue expenses - (142,215) - - - (142,215)
At 31 March 2023 5,315,619 18,765,206 1,537,779 12,632 (10,748,312) 14,882,924
Comprehensive income
Profit for the year - - - - 27,186,424 27,186,424
Other comprehensive income
Currency translation gain - - - 3,230 - 3,230
Total comprehensive income for the year - - 27,186,424 27,189,654
- 3,230
Transactions with owners
Share based payment - - 489,083 - - 489,083
Proceeds from shares issued 918,063 13,251,199 - - - 14,169,262
Proceeds from exercise of share options 91,667 607,666 - - 699,333
-
Reserves movement for exercised / lapsed options - - (879,198) 879,198 -
-
At 31 March 2024 6,325,349 32,624,071 1,147,664 15,862 17,317,310 57,430,256
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2024
Group Group
Year ended Year ended
31 March 2024 31 March 2023
Note £ £
Cash flows from operating activities
Profit / (loss) before tax 27,186,424 (1,461,054)
Adjustments for non-cash items:
Revaluation gain on sale of subsidiary undertaking (30,521,645) -
Impairment of exploration and evaluation assets 1,572,302 -
Share based payments 241,888 516,581
Share of loss from associate 83,610 -
Interest income (92,694) -
Operating cash flow before movements in working capital (1,530,115) (944,473)
Movement in working capital
Increase in receivables (343,785) (5,406)
(Decrease) / increase in payables (660,702) 393,666
(1,004,487) 388,260
Net movements in working capital
(2,534,602) (556,213)
Net cash outflow from operating activities
Cash flows from investing activities
Purchase of tangible assets 8 - (103,633)
Purchase of intangible assets 7 (2,736,084) (3,006,324)
Disposal of intangible assets 400,000 -
Loan repayments from associated undertakings 5,807,937
3,471,853 (3,109,957)
Net cash outflow from investing activities
Cash flow from financing activities
Interest income 28,258 -
Net proceeds from share issues 14,169,262 2,857,785
Net proceeds from exercise of share options 699,333 342,374
Net cash inflow from financing activities 14,896,853 3,200,159
Increase / (decrease) in cash and cash equivalents 15,834,104 (466,011)
Cash and cash equivalents at beginning of the year
544,988 1,045,515
Exchange gain / (loss) on cash (52,585) (34,516)
Cash and cash equivalents at end of the year 16,326,507 544,988
Cash and cash equivalents comprise cash on hand and bank balances.
FINANCIAL INFORMATION
The financial information set out above does not constitute the Company's
statutory accounts for the years ended 31 March 2024 or 2023 but is derived
from those accounts.
Statutory accounts for 2023 have been delivered to the registrar of companies,
and those for 2024 will be delivered in due course.
The auditor's report for the 2023 accounts was (i) unqualified, (ii) contained
a material uncertainty in respect of going concern to which the auditor drew
attention by way of emphasis without modifying its opinion and (iii) did not
contain a statement under s.498(2) or (3) of the Companies Act 2006.
The auditor's report for the 2024 accounts was (i) unqualified, (ii) did not
contain any matter to which the auditor drew attention by way of emphasis
without modifying its opinion and (iii) did not contain a statement under
s.498(2) or (3) of the Companies Act 2006.
Basis of preparation
The consolidated financial statements of Kodal Minerals Plc are prepared in
accordance with the historical cost convention and in accordance with
UK-adopted International Accounting Standards. The Company's ordinary shares
are quoted on AIM, a market operated by the London Stock Exchange.
In accordance with the exemption allowed by Section 408(3) of the Companies
Act 2006, the Company has not presented its own income statement or statement
of comprehensive income.
Going concern
The Group is still in the exploration and development phase of its business
and the operation of the Group are currently being financed by funds which the
Company has raised from the issue of new ordinary shares.
The Directors have prepared cash flow forecasts for the period ending 31 March
2026. The forecasts include additional exploration expenditure for the
Group's gold assets, as well as covering ongoing overheads. The forecasts,
which include a contingency for cash calls on the Bougouni Lithium Project
during its development phase, show that the Group has sufficient cash
resources available to allow it to continue as a going concern and meet its
liabilities as they fall due for a period of at least twelve months from the
date of approval of these financial statements without the need for a further
financing. As at 27 August 2024, the Group has cash at bank amounting to
£18,477,000. Accordingly, the financial statements have been prepared on a
going concern basis.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
1. SEGMENTAL REPORTING
The operations and assets of the Group in the year ended 31 March 2024 are
focused in the United Kingdom and West Africa and comprise one class of
business: the exploration and evaluation of mineral resources. Management have
determined that the Group had three operating segments being the West African
Gold Projects, the West African Lithium Projects and the UK administration
operations. The Parent Company acts as a holding company. At 31 March 2024,
the Group had not commenced commercial production from its exploration sites
and therefore had no revenue for the year.
UK West Africa Total
Year ended 31 March 2024
West Africa
Gold Lithium
£ £ £ £
Impairment of exploration and evaluation assets - (1,572,302) (1,572,302)
-
Administrative expenses (1,407,702) (80,926) (41,486) (1,530,114)
Share based payments (241,888) - - (241,888)
Finance income 92,693 - - 92,693
Revaluation gain on sale of subsidiary undertaking - - 30,521,645
30,521,645
Share of loss from associate - - (83,610)
(83,610)
Profit from continuing operations for the year (1,556,897) (1,653,228) 27,186,424
30,396,549
At 31 March 2024
Trade and other receivables 18,605 - 7,740,142
7,721,537
Cash and cash equivalents
16,284,228 42,279 16,326,507
Non-current assets classified as held for sale
- 79,606 79,606
Trade and other payables (139,301) (139,301)
Intangible assets - exploration and evaluation expenditure 2,162,452 2,162,452
Investment in associate undertaking 31,260,186
31,260,186
Property, plant and equipment 664 664
Net assets at 31 March 2024 16,163,532 2,285,001 57,430,256
38,981,723
Year ended 31 March 2023 UK West Africa Total
West Africa
Gold Lithium
£ £ £ £
Administrative expenses (912,390) (4,288) (27,795) (944,473)
Share based payments (516,581) - - (516,581)
Loss for the year (1,428,971) (4,288) (27,795) (1,461,054)
At 31 March 2023
Other receivables 11,175 - - 11,175
Cash and cash equivalents
425,704 90,426 28,858 544,988
Non-current assets classified as held for sale
- - 513,109 513,109
Trade and other payables (129,332) - (670,675) (800,007)
Intangible assets - exploration and evaluation expenditure
- 3,305,948 11,215,940 14,521,888
Property, plant and equipment
- 1,042 90,729 91,771
Net assets at 31 March 2023
307,547 3,397,416 11,177,961 14,882,924
2. PROFIT / LOSS BEFORE TAX
The profit / loss before tax from continuing activities is stated after
charging:
Group Group
Year ended Year ended
31 March 2024 31 March 2023
£ £
Impairment of exploration and evaluation assets 1,572,302 -
Fees payable to the Company's auditor 100,000 53,000
Share based payments (note 5) 241,888 516,581
Directors' salaries and fees 471,840 182,247
Employer's National Insurance 33,476 10,598
Amounts payable to RSM UK Audit LLP and its associates in respect of audit
services are as follows;
Group Group
Year ended Year ended
31 March 2024 31 March 2023
£ £
Audit services
- statutory audit of parent and consolidated accounts 100,000 53,000
3. EMPLOYEES AND DIRECTORS' REMUNERATION
The average number of people employed in the Company and the Group is as
follows:
Group Group Company Company
31 March 2024 31 March 2023 31 March 2024 31 March 2023
Number Number Number Number
Average number of employees (including directors): 60 45
5 5
The directors are key management personnel of the Company. The remuneration
expense for directors and employees is as follows:
Group Group Company Company
31 March 2024 31 March 2023 31 March 2024 31 March 2023
£ £ £ £
Directors' remuneration 471,840 182,247 471,840 182,247
Employee wages and salaries 24,726 - 12,000 -
Social security costs 33,476 10,598 33,476 10,598
Total 530,042 192,845 517,316 192,845
In addition to the amounts included above, £273,777 (2023: £282,267) of the
directors' remuneration cost and £194,032 (2023: £150,525) of employee wages
and local social security costs have been treated as Exploration and
Evaluation expenditure within the Group.
Directors' salary and fees year ended Gain on exercise of share options
31 March 2024 year ended Total
31 March year ended
2024 31 March
2024
£ £ £
Bernard Aylward (a) 308,442 349,125 657,567
Charles Joseland 68,332 105,000 173,332
David Teng - - -
Robert Wooldridge 88,335 26,375 114,710
Steven Zaninovich (b) 269,000 89,333 358,333
Qingtao Zeng (c) 11,508 - 11,508
745,617 569,833 1,315,450
Included within the amounts shown above for Directors' salary and fees for the
year ended 31 March 2024, £43,500 has been recharged to the associated
undertaking (2023: £nil).
Directors' salary and fees year ended Gain on exercise of share options
31 March 2023 31 March Total
2023 year ended
31 March
2023
£ £ £
Bernard Aylward (a) 177,847 3,860 181,707
Charles Joseland 50,000 20,044 70,044
Robert Wooldridge 45,000 10,509 55,509
Steven Zaninovich (b) 166,667 4,632 171,299
Qingtao Zeng (c) 25,000 - 25,000
464,514 39,045 503,559
a Matlock Geological Services Pty Ltd ("Matlock") a company wholly owned by
Bernard Aylward, provided consultancy services to the Group during the year
ended 31 March 2024 and received fees of £224,694 (2023: £139,514). These
fees are included within the remuneration figure shown for Bernard Aylward.
b Zivvo Pty Ltd ("Zivvo") a company wholly owned by Steven Zaninovich, provided
consultancy services to the Group during the year ended 31 March 2024 and
received fees of £210,000 (2003: £140,000 in the period after his
appointment as director on 27 July 2022). These fees are included within the
remuneration figure shown for Steven Zaninovich.
c In addition to the amounts included above, Geosmart Consulting Pty Ltd, a
company wholly owned by Qingtao Zeng, provided consultancy services to the
Group during the prior year and received fees of £nil (2023: £24,627).
4. PROFIT / (LOSS) PER SHARE
Basic profit / (loss) per share is calculated by dividing the profit / (loss)
for the year attributable to ordinary equity holders of the parent by the
weighted average number of ordinary shares outstanding during the year.
The following reflects the result and share data used in the computations:
Profit / (loss) Weighted average number of shares Diluted weighted average number of shares Basic (profit) / loss per share (pence) Diluted (profit) / loss per share (pence)
£
Year ended 31 March 2024 27,186,424 18,228,192,472 19,000,275,806 0.1491 0.1431
Year ended 31 March 2023 (1,461,054) 16,812,417,355 16,812,417,355 (0.0087) (0.0087)
Diluted profit / (loss) per share is calculated by dividing the profit /
(loss) attributable to ordinary equity holders of the parent by the weighted
average number of ordinary shares outstanding during the year plus the number
of ordinary shares that would be issued on conversion of all the dilutive
potential ordinary shares into ordinary shares. In previous years, options
in issue were not considered diluting to the loss per share as the Group was
loss making. Diluted loss per share was therefore the same as the basic
loss per share.
5. SHARE BASED PAYMENTS
The share-based payment reserve is used to recognise the value of
equity-settled share-based payments provided to employees, including key
management personnel, as part of their remuneration.
Year ended Year ended
31 March 2024 31 March 2023
Share options outstanding Number Number
Opening balance 582,500,000 250,000,000
Lapsed in the year (43,333,333) (77,500,000)
Issued in the year - 470,000,000
Exercised in the year (186,666,667) (60,000,000)
Closing balance 352,500,000 582,500,000
Year ended Year ended
31 March 2024 31 March 2023
Performance share rights outstanding Number Number
Opening balance 240,000,000 175,000,000
Issued in the year - 75,000,000
Exercised in the year (80,000,000) (10,000,000)
Closing balance 160,000,000 240,000,000
Year ended Year ended
31 March 2024 31 March 2023
Warrants outstanding Number Number
Opening balance 326,250,000 205,000,000
Lapsed in the year - (12,500,000)
Issued in the year - 170,000,000
Exercised in the year (26,666,666) (36,250,000)
Closing balance 299,583,334 326,250,000
Group profit for the year was stated after a share based payment charge of
£241,888 (2023: £516,581). In addition, a share based payment charge of
£247,195 (2023: £205,324) has been treated as Exploration Expenditure
within the Group. The reference to 'share based payments' relates to a
theoretical calculation of the non-cash cost to the Group of share options and
warrants that have been awarded and have yet to vest.
Options, warrants and performance share rights outstanding for each of the
directors at the year-end are outlined below:
Exercisable date Bernard Aylward Robert Wooldridge Charles Joseland Steven Zaninovich
6 November 2021 - - - 33,333,334
To be determined (Note 1) - - - 90,000,000
To be determined (Note 1) 75,000,000 - - -
27 Aug 2021 - - 5,000,000 - -
27 Aug 2026
27 Aug 2022 - - 7,500,000 - -
27 Aug 2027
27 Aug 2023 - - 7,500,000 - -
27 Aug 2028
15 November 2023 30,000,000 72,500,000
To be determined (Note 1) 40,000,000 77,500,000
To be determined (Note 2) 60,000,000 95,000,000
18 Aug 2022 - 23,333,334 - -
18 Aug 2027
18 Aug 2023 - 33,333,333 - -
18 Aug 2028
18 Aug 2024 - 33,333,333 25,000,000 -
18 Aug 2029
Closing balance 205,000,000 110,000,000 25,000,000 368,333,334
1. Exercisable from date of first commercial production from the Bougouni
Project
2. Exercisable from date of production of 175,000 tonnes of spodumene
concentrate from the Bougouni project
Details of share options outstanding at 31 March 2024:
Date of grant Number of options Option
price Exercisable between
8 May 2017
12,500,000 0.38
pence 8 May 2019 - 8 May 2024
27 August 2021
5,000,000 0.36
pence 27 Aug 2021 - 27 Aug 2026
27 August 2021
7,500,000 0.36
pence 27 Aug 2022 - 27 Aug 2027
27 August 2021
7,500,000 0.36
pence 27 Aug 2023 - 27 Aug 2028
18 August 2022
37,500,000 0.3
pence To be determined
18 August 2022
47,500,000 0.34
pence To be determined
18 August 2022
70,000,000 0.38
pence To be determined
18 August 2022
26,666,668 0.3
pence 18 Aug 2022 - 18 Aug 2027
18 August 2022
36,666,666 0.34
pence 18 Aug 2023 - 18 Aug 2028
18 August 2022
61,666,666 0.34
pence 18 Aug 2024 - 18 Aug 2029
Details of performance share rights outstanding at 31 March 2024:
Date of grant Number of performance
Option price Exercisable between
share
rights
27 August 2021
85,000,000
nil To be
determined
27 July 2022
25,000,000
nil To be
determined
27 July 2022
25,000,000
nil To be
determined
27 July 2022
25,000,000
nil To be
determined
Details of warrants outstanding at 31 March 2024:
Date of grant Number of warrants Option price
Exercisable between
22 May 2017
6,250,000 0.38
pence 22 May 2019 - 22 May 2024
23 November 2018 33,333,334
0.14-0.38 pence To be determined
23 November 2018 90,000,000
0.14-0.38 pence To be determined
27 July 2022
47,500,000 0.28
pence To be determined
27 July 2022
52,500,000 0.325
pence To be determined
27 July 2022
70,000,000 0.38
pence To be determined
Additional disclosure information:
Weighted average exercise price of share options and warrants:
· outstanding at the beginning of the period
0.27 pence
· granted during the period
N/A
· outstanding at the end of the period
0.28 pence
· exercisable at the end of the period
0.34 pence
Weighted average remaining contractual life of
share options outstanding at the end of the period
5.2 years
Warrants, Options and Performance Share Rights issued in the year to 31 March
2023
On 27 July 2022 the Company granted warrants over 170,000,000 ordinary shares
and Performance Share Rights of up to 75,000,000 ordinary shares to Steven
Zaninovich. The warrants are registered in the name of Zivvo Pty Ltd, a
company wholly owned by Steven Zaninovich.
The Warrants and Performance Share Rights carry vesting conditions that are
linked to achievement of milestones critical to the development of the
Bougouni Project as follows:
· Securing of finance for the Bougouni mine and completion of all Mali
Government Agreements, Update and Variation of Mining Licence and
Environment permitting in relation to the Bougouni Project;
· Receipt of funds from first sale of spodumene concentrate from the
Bougouni Project within 18 months of receipt of finance; and
· 175,000 tonnes of spodumene concentrate produced from the Bougouni
Project.
Subject to the vesting conditions being satisfied, Mr Zaninovich may call for
Ordinary Shares, as set out in the table below, to be issued to him at any
time within five years of the vesting condition being met and upon payment by
them of the nominal value for the Ordinary Shares in relation the Performance
Share Rights and the exercise price in relation to the share options.
Vesting criteria Warrants Performance Share Rights
Exercise Price Number
Securing of finance for the Bougouni mine £0.00280p 47,500,000 25,000,000 capped at £250,000 value
Receipt of funds from first sale of spodumene concentrate from Bougouni within £0.00325p 52,500,000 25,000,000 capped at £250,000 value
18 months of receipt of finance
Production of 175,000 tonnes of spodumene concentrate from Bougouni £0.00380p 70,000,000 25,000,000 capped at £250,000 value
Total £0.00335p average 170,000,000 75,000,000 total capped at £750,000 value
On 18 August 2022 the Company granted options over 155,000,000 ordinary shares
to Bernard Aylward and Mohamed Niare (Country Manager, Mali).
The Share Options carry vesting conditions that are linked to achievement of
milestones critical to the development of the Bougouni Project as follows:
· Securing of finance for the Bougouni mine and completion of all Mali
Government Agreements, Update and Variation of Mining Licence and
Environment permitting in relation to the Bougouni Project;
· Receipt of funds from first sale of spodumene concentrate from the
Bougouni Project within 18 months of receipt of finance; and
· 175,000 tonnes of spodumene concentrate produced from the Bougouni
Project.
Subject to the vesting conditions being satisfied, the holders of the Share
Options may call for Ordinary Shares, as set out in the table below, to be
issued to them at any time within five years of the vesting condition being
met.
Share Options
Exercise price
Vesting criteria Bernard Aylward Mohamed Niare
Securing of finance for the Bougouni mine 0.3 pence Up to 30 million ordinary shares Up to 7.5 million ordinary shares
Receipt of funds from first sale of spodumene concentrate 0.34 pence Up to 40 million ordinary shares Up to 7.5 million ordinary shares
175,000 tonnes of spodumene concentrate produced 0.38 pence Up to 60 million ordinary shares Up to 10 million ordinary shares
Total Up to 130 million ordinary shares Up to 25 million ordinary shares
On 18 August 2022, the Company granted options over 315,000,000 Ordinary
Shares to members of the management team, of which those granted to
Non-Executive Directors were as set out in the table below. The options will
vest in equal tranches with the first one third vesting immediately and
exercisable at 0.3 pence per share, and the remaining two thirds vesting in
two equal tranches on the first and second anniversaries of the grant and
exercisable at 0.34 pence per share.
Director Number of Options granted
Charles Joseland 75,000,000
Robert Wooldridge 100,000,000
Qingtao Zeng 130,000,000
The fair values of the options and warrants granted were calculated using the
Black-Scholes valuation model. The inputs to the model were:
27 July 2022 18 August 2022
Strike price 0.00p - 0.38p 0.30p - 0.38p
Share price 0.11p - 0.25p 0.11p - 0.26p
Volatility 75% 75%
Expiry date 15/3/28 - 15/12/30 15/3/28 - 15/12/30
Risk free rate 0.24% - 0.26% 0.23% - 0.30%
Dividend yield 0.0% 0.0%
6. TAXATION
Group Group
Year ended Year ended
31 March 2024 31 March 2023
£ £
Taxation charge for the year - -
Factors affecting the tax charge for the year
Profit / (loss) from continuing operations before income tax 27,186,424 (1,461,054)
Revaluation gain on sale of subsidiary undertakings (30,521,645) -
Profits subject to corporation tax (3,335,221)
Tax at 25% (2023: 19%) (833,805) (277,600)
Expenses not deductible 354 636
Losses carried forward not deductible 772,979 178,814
Deferred tax differences 60,472 98,150
Income tax expense - -
During the year the UK corporation tax rate was increased from 19% to 25%.
The Group has tax losses and other potential deferred tax assets (including in
relation to share options) totalling £3,993,000 (2023: £3,759,000) which
will be able to be offset against future income. No deferred tax asset has
been recognised in respect of these losses as their utilisation is uncertain
at this stage.
7. INTANGIBLE ASSETS
Exploration and evaluation
GROUP £
COST
11,442,403
At 1 April 2022
Additions in the year 3,226,956
Classified as held for sale (513,109)
Effects of foreign exchange 365,638
At 1 April 2023 14,521,888
Additions in the year 2,971,083
Disposals in the year (13,488,010)
Classified as held for sale (79,606)
Licences written off in the year (1,572,302)
Effects of foreign exchange (190,601)
At 31 March 2024 2,162,452
NET BOOK VALUES
At 31 March 2024 2,162,453
At 31 March 2023 14,521,888
At 31 March 2022 11,442,403
The Company did not have any
Intangible Assets as at 31 March 2022, 2023 and 2024.
Group Group
31 March 2024 31 March 2023
£ £
Non-current assets classified as held for sale 79,606 513,109
79,606 513,109
During the year the Group received an offer of US$100,000 to purchase the gold
projects at Djelibani Sud, Nangalasso, Sotian and Tiedougoubougou. The
carrying value of these projects was impaired by £877,422 and the projects
transferred to current held as assets for sale at 31 March 2024. The assets
relating to the Bougouni West project were held as assets held for sale at 31
March 2023. These assets were transferred to Kodal Mining UK Limited in
November 2023 as part of the Hainan financing transaction. However, Kodal
remains entitled to receive the sale proceeds (see note 18).
8. PROPERTY, PLANT AND EQUIPMENT
Plant and machinery
GROUP £
COST
At 1 April 2022 27,633
Additions in the year 103,633
Effects of foreign exchange 137
At 1 April 2023 131,403
Disposals in the year (101,148)
Effects of foreign exchange (2,702)
At 31 March 2024 27,555
DEPRECIATION
At 1 April 2022 24,324
Depreciation charge 15,308
At 1 April 2023 39,632
Disposals in the year (25,883)
Depreciation charge 13,140
At 31 March 2024 26,889
NET BOOK VALUES
At 31 March 2024 664
At 31 March 2023 91,771
At 31 March 2022 3,309
All tangible assets are wholly associated with exploration and development
projects and therefore the amounts charged in respect of depreciation are
capitalised as evaluation and exploration assets within intangible assets.
The Company did not have any Property, Plant and Equipment as at 31 March
2022, 2023 and 2024.
9. ASSOCIATED UNDERTAKING
On 15 November 2023, the Group's interest in Kodal Mining UK Limited ("KMUK")
reduced to 49% as a result of Hainan's subscription for 51% of the newly
issued share capital of KMUK. Prior to the transaction with Hainan, KMUK was
accounted for as a subsidiary undertaking of the Group. With the reduction to
a 49% interest and loss of control but retention of significant interest, KMUK
has been accounted for as an associated undertaking from that date.
As a result of the transaction with Hainan, Kodal has revalued its remaining
49% stake in KMUK to fair value, reflecting the price paid by Hainan for its
51% stake, and the payment for the termination of the Suay Chin offtake
agreement. This has given rise to a non-cash gain on partial disposal of a
subsidiary undertaking of £30.5 million. The fair value has been used as the
cost for the initial recognition of KMUK as an associate.
The assets and liabilities of KMUK at 15 November 2023 and at 31 March 2024
were:
15 November 2023 31 March 2024
£ £
Assets
Cash and cash equivalents 71,113,968 70,813,016
Other debtors - 43,003
Property, plant and equipment 107,179 357,588
Intangible assets - Exploration and Evaluation 14,659,493 18,937,151
Accounts receivable 8,557,667 -
Liabilities
Trade and other payables (30,525,750) (26,408,836)
Net Assets 63,912,557 63,741,922
Group's share in equity - 49% 31,317,153 31,233,543
Goodwill 26,643 26,643
Group's carrying value of the investment 31,343,796 31,260,186
Trade and other payables includes an amount of £11,144,868 payable to Suay
Chin for the termination of their off-take agreement. From the date of
acquisition, KMUK contributed a loss of £83,610 to the profit before tax from
continuing operations of the Group:
Period to 31 March 2024
Financing income 443,225
Administrative expenses (482,451)
Financing costs (131,407)
Loss before tax (170,633)
Group's share of loss for the year (83,610)
The associate had no contingent liabilities or capital commitments at 15
November 2023 and 31 March 2024.
10. SUBSIDIARY UNDERTAKINGS
The consolidated financial statements include the following subsidiary
companies:
Country of Registered office Equity holding Nature of
Company Subsidiary of incorporation business
Kodal Norway (UK) Ltd Kodal Minerals Plc United Kingdom Prince Frederick House, 100% Operating company
35-39 Maddox Street, London W1S 2PP
International Goldfields (Bermuda) Limited Kodal Minerals Plc Bermuda MQ Services Ltd 100% Holding company
Victoria Place,
31 Victoria Street,
Hamilton HM 10
Bermuda
International Goldfields Côte d'Ivoire SARL International Goldfields (Bermuda) Limited Côte d'Ivoire Abidjan Cocody Les Deux Plateaux 7eme Tranche 100% Mining exploration
BP Abidjan
Côte d'Ivoire
International Goldfields Mali SARL International Goldfields (Bermuda) Limited Mali Bamako, Faladi, Mali Univers, Rue 886 B, Porte 487 100% Mining exploration
Mali
Jigsaw Resources CIV Ltd International Goldfields (Bermuda) Limited Bermuda MQ Services Ltd 100% Holding company
Victoria Place,
31 Victoria Street,
Hamilton HM 10
Bermuda
Corvette CIV SARL Jigsaw Resources CIV Ltd Côte d'Ivoire Abidjan Cocody Les Deux Plateaux 7eme Tranche 100% Mining exploration
BP Abidjan
Côte d'Ivoire
11. CURRENT AND NON-CURRENT RECEIVABLES
Group Group
31 March 2024 31 March 2023
£ £
Non-current receivables
Receivable from the associate 4,312,785 -
-
4,312,785
Current receivables
Trade receivables 336,355 -
Receivable from the associate
3,072,398 -
Other receivables 18,604 11,175
3,427,357 11,175
No receivables are past due. The Directors consider that the carrying amount
of all receivables, both current and non-current, approximates their fair
value and there are no expected credit losses.
Amounts receivable from the associate relate to amounts advanced to KMUK and
its subsidiary undertakings, all of which is repayable on demand. £4.3
million of this balance, shown as a non-current receivable, was advanced under
the terms of a facility agreement and accrues interest at a rate of 4% per
annum.
12. TRADE AND OTHER PAYABLES
Group Group
31 March 2024 31 March 2023
£ £
Trade payables 37,369 616,877
Other payables 101,932 183,130
139,301 800,007
All trade and other payables at each reporting date are
current. The Directors consider that the carrying amount of the trade and
other payables approximates their fair value.
13. SHARE CAPITAL
GROUP AND COMPANY
Allotted, issued and fully paid:
Note Nominal Value Number of Ordinary Shares Share Capital Share Premium
£ £
At 31 March 2022 15,832,302,387 4,947,595 15,933,071
May 2022 a £0.0003125 1,071,428,569 334,821 2,522,964
March 2023 b £0.0003125 106,250,000 33,203 309,171
At 31 March 2023 17,009,980,956 5,315,619 18,765,206
May 2023 c £0.0003125 12,500,000 3,906 43,594
November 2023 d £0.0003125 2,937,801,971 918,064 13,251,198
November 2023 e £0.0003125 280,833,333 87,760 564,073
At 31 March 2023 20,241,116,260 6,325,349 32,624,071
a) On 10 May 2022, a total of 1,071,428,569 shares were issued via a
placing and subscription at a price of 0.28 pence per share.
b) On 20 March 2023, a total of 106,250,000 shares were issued pursuant to
the exercise of options, warrants and Performance Share Rights from certain
directors, senior management and consultants of the Company. The shares were
issued at between 0.14 and 0.38 pence per share.
c) On 12 May 2023, a total of 12,500,000 shares were issued pursuant to
the exercise of options by a former director of the Company. The shares were
issued at 0.38 pence per share.
d) On 14 November 2023, 2,937,801,971 share were issued via a subscription
to Xinmao Investment Co. Limited for gross proceeds of US$17.75 million.
e) On 16 November 2023, 280,833,333 shares were issued pursuant to the
exercise of options, warrants and Performance Share Rights from certain
directors, senior management and consultants of the Company. The shares were
issued at between par and 0.38 pence per share.
14. RESERVES
Reserve Description and purpose
Share premium Amount subscribed for share capital in excess of nominal value.
Share based payment reserve Cumulative fair value of options and share rights recognised as an expense.
Upon exercise of options or share rights, any proceeds received are credited
to share capital. The share-based payment reserve remains as a separate
component of equity.
Translation reserve Gains/losses arising on re-translating the net assets of overseas operations
into sterling.
Retained earnings Cumulative net gains and losses recognised in the consolidated statement of
financial position, including both distributable and non-distributable
earnings
15. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT
The Group's principal financial instruments comprise cash and cash
equivalents, other receivables and trade and other payables.
The main purpose of cash and cash equivalents is to finance the Group's
operations. The Group's other financial assets and liabilities such as other
receivables and trade and other payables, arise directly from its operations.
It has been the Group's policy, throughout the periods presented in the
consolidated financial statements, that no trading in financial instruments
was to be undertaken, and no such instruments were entered in to.
The main risk arising from the Group's financial instruments is market risk.
The Directors consider other risks to be more minor, and these are summarised
below. The Board reviews and agrees policies for managing each of these risks.
Market risk
Market risk is the risk that changes in market prices, and market factors such
as foreign exchange rates and interest rates will affect the Group's results
or the value of its assets and liabilities.
The objective of market risk management is to manage and control market risk
exposures within acceptable parameters while optimising the return.
Interest rate risk
The Group does not have any borrowings and does not pay interest.
The Group's exposure to the risks of changes in market interest rates relates
primarily to the Group's cash and cash equivalents with a floating interest
rate. These financial assets with variable rates expose the Group to interest
rate risk. All other financial assets and liabilities in the form of
receivables and payables are non-interest bearing.
In regard to its interest rate risk, the Group periodically analyses its
exposure. Within this analysis consideration is given to alternative
investments and the mix of fixed and variable interest rates. The Group does
not engage in any hedging or derivative transactions to manage interest rate
risk.
The Group in the year to 31 March 2024 earned interest of £92,694 (2022:
£nil).
Credit risk
Credit risk refers to the risk that a counterparty could default on its
contractual obligations resulting in financial loss to the Group. The Group's
principal financial assets are cash balances and other receivables, including
receivables from the associated undertaking. The Company's financial assets
also include amounts receivable from subsidiary undertakings.
The Group has adopted a policy of only dealing with what it believes to be
creditworthy counterparties and would consider obtaining sufficient collateral
where appropriate, as a means of mitigating the risk of financial loss from
defaults. The Group's exposure to and the credit ratings of its counterparties
are continuously monitored. An allowance for impairment is made where there is
objective evidence that the Group will not be able to collect all amounts due
according to the original terms of the receivables concerned.
Other receivables consist primarily of prepayments and other sundry
receivables and none of the amounts included therein are past due or impaired.
Financial instruments by category - Group
Other financial liabilities at amortised cost
Financial assets at amortised cost
Total
31 March 2024
Assets
Amounts due from associated undertaking 4,312,785 - 4,312,785
Trade and other receivables 3,427,357 - 3,427,357S
Cash and cash equivalents 16,326,507 - 16,326,507
Total 24,066,649 - 24,066,649
Liabilities
Trade and other payables - (139,301) (139,301)
Total - (139,301) (139,301)
31 March 2023
Assets
Other receivables 11,175 - 11,175
Cash and cash equivalents 544,988 - 544,988
Total 556,163 - 556,163
Liabilities
Trade and other payables - (800,007) (800,007)
Total - (800,007) (800,007)
Foreign exchange risk
Throughout the periods presented in the consolidated financial statements, the
functional currency for the Group's West African subsidiaries has been the CFA
Franc.
The Group incurs certain exploration costs in the CFA Franc, US Dollars,
Australian Dollars and South African Rand and has exposure to foreign exchange
rates prevailing at the dates when Sterling funds are translated into other
currencies. The CFA Franc has a fixed exchange rate to the Euro and the Group
therefore has exposure to movements in the Sterling : Euro exchange rate.
The Group has not hedged against this foreign exchange risk as the Directors
do not consider that the level of exposure poses a significant risk.
The Group continues to keep the matter under review as further exploration and
evaluation work is performed in West Africa and other countries and will
develop currency risk mitigation procedures if the significance of this risk
materially increases.
The Group's consolidated financial statements have a low sensitivity to
changes in exchange due to the low value of assets and liabilities
(principally cash balances) maintained in foreign currencies. Once any
project moves into the development phase a greater proportion of expenditure
is expected to be denominated in foreign currencies which may increase the
foreign exchange risk.
Financial instruments by currency - Group
GBP USD ZAR AUD XOF EUR Total
31 March 2024
Assets
Amounts due from associated undertaking - 4,312,785 - - - - 4,312,785
Trade and other receivables 3,354,961 72,396 - - - 3,427,357
Cash and cash equivalents 12,477,576 3,799,067 - - 42,282 7,582 16,326,507
Total 15,832,537 8,184,248 42,282 7,582 24,066,649
Liabilities
Trade and other payables (139,301) - - - - - (139,301)
GBP USD ZAR AUD XOF EUR Total
31 March 2023
Assets
Other receivables 11,175 - - - - - 11,175
Cash and cash equivalents -
425,704 - - - 119,284 544,988
-
Total 436,879 - - - 119,284 556,163
Liabilities
Trade and other payables
(122,278) (446,098) (98,621) (65,094) (67,916) - (800,007)
Liquidity risk
Liquidity risk is the risk that the entity will not be able to meet its
financial obligations as they fall due.
The objective of managing liquidity risk is to ensure, as far as possible,
that the Group will always have sufficient liquidity to meet its liabilities
when they fall due, under both normal and stressed conditions.
The Group has established policies and processes to manage liquidity risk.
These include:
· Monitoring the maturity profiles of financial assets and liabilities
in order to match inflows and outflows;
· Monitoring liquidity ratios (working capital); and
· Capital management procedures, as defined below.
Capital management
The Group's objective when managing capital is to ensure that adequate funding
and resources are obtained to enable it to develop its projects through to
profitable production, whilst in the meantime safeguarding the Group's ability
to continue as a going concern. This is to enable the Group, once projects
become commercially and technically viable, to provide appropriate returns for
shareholders and benefits for other stakeholders.
The Group has historically relied on equity to finance its growth and
exploration activity, raised through the issue of shares. In the future, the
Board will utilise financing sources, be that debt or equity, that best suits
the Group's working capital requirements and taking into account the
prevailing market conditions.
Fair value
The fair value of the financial assets and financial liabilities of the Group,
at each reporting date, approximates to their carrying amount as disclosed in
the Statement of Financial Position and in the related notes.
The fair values of the financial assets and liabilities are included at the
amounts at which the instrument could be exchanged in a current transaction
between willing parties, other than in a forced or liquidation sale.
The cash and cash equivalents, other receivables, trade payables and other
current liabilities approximate their carrying value amounts largely due to
the short-term maturities of these instruments.
Disclosure of financial instruments and financial risk management for the
Company has not been performed as they are not significantly different from
the Group's position described above.
16. RELATED PARTY TRANSACTIONS
During the year ended 31 March 2024, the associated undertaking repaid to the
Group expenses paid on its behalf of £336,355 (2023: £nil). The balance
due to the Group at 31 March 2024 was £7,385,182 (2023: £nil). Further
information on the balance is shown in note 11.
The Directors represent the key management personnel of the Group and details
of their remuneration are provided in note 3.
Robert Wooldridge, a director, is a member of SP Angel Corporate Finance LLP
("SP Angel") which acts as financial adviser and broker to the Company. During
the year ended 31 March 2024, the Company paid fees to SP Angel of £32,500
(2023: £173,605). The balance due to SP Angel at 31 March 2024 was £nil
(2023: £nil).
Matlock Geological Services Pty Ltd ("Matlock") a company wholly owned by
Bernard Aylward, a director, provided consultancy services to the Group during
the year ended 31 March 2024 and received fees of £224,694 (2023:
£139,514). These fees are included within the remuneration figure shown for
Bernard Aylward in note 3. The balance due to Matlock at 31 March 2024 was
£nil (2023: £nil).
Geosmart Consulting Pty Ltd ("Geosmart"), a company wholly owned by Qingtao
Zeng, a director, provided consultancy services to the Group during the year
ended 31 March 2024 and received fees of £nil (2023: £24,627). The balance
due to Geosmart at 31 March 2024 was £nil (2023: £nil).
Zivvo Pty Ltd ("Zivvo"), a company wholly owned by Steven Zaninovich, a
Director, provided consultancy services to the Group during the year ended 31
March 2024 and received fees of £210,000 (2023: £140,000). These fees are
included within the remuneration figure shown for Steven Zaninovich in note
3. The balance due to Zivvo at 31 March 2024 was £nil (2023: £nil).
17. CONTROL
No one party is identified as controlling the Group.
18. CAPITAL COMMITMENTS AND CONTINGENCIES
The Group had capital commitments to exploration and
evaluation expenditure of £nil (2022: £nil).
With respect to the sale of Bougouni West as agreed with Leo Lithium in April
2023, one of the licences, N'kemene Ouest, has not yet been renewed by the
Mali mining authorities (a sale condition), pending the completion of the new
mining code and related regulations, and the moratorium on the renewal and
transfer of mining concessions. Accordingly, the Company has not yet
recognised the income from the sale proceeds of £1.5 million. The licence is
considered to be of good standing and the renewal is expected to occur but no
timing of finalisation can be provided
The Company and KMUK have continued to be in discussion with the Ministry of
Mines and the Ministry of Economy and Finance in Mali in the context of the
mining licence transfer from Future Minerals to Les Mines de Lithium de
Bougouni (a subsidiary undertaking of KMUK). In recent communications the
ministries have sought information on various aspects of the Hainan funding
transaction and the development and future operation of the Bougouni Lithium
Project. There has been no challenge to the validity of the licence or to its
transfer to LMLB.
At the current time, the Company cannot determine the outcome of the
discussions, and hence the nature and amount of any payments or concessions
which may be required, if any, and which may result in an economic outflow
from the Company. The Company and KMUK will continue to work with
the authorities to provide the information and explanations requested.
19. EVENTS AFTER THE REPORTING PERIOD
On 12 May 2024, the Company received notice for the exercise of warrants from
an adviser to the Company to subscribe for a total of 6,250,000 ordinary
shares at an exercise price of 0.38 pence per share. The exercise of the
warrants generated proceeds of £23,750 for the Company.
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