REG - Kodal Minerals PLC - Final Results
19/07/2022 07:00
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RNS Number : 8873S Kodal Minerals PLC 19 July 2022
The information contained within this announcement is deemed by the Company
to constitute inside information as stipulated under the UK Market Abuse
Regulations
Kodal Minerals Plc / Index: AIM / Epic: KOD / Sector: Mining
19 July 2022
Kodal Minerals plc
("Kodal" or the "Company" and together with its subsidiaries, the "Group")
Final Results
Kodal Minerals, the mineral exploration, and development company focused on
lithium and gold assets in West Africa, announces its final results for the
year ended 31 March 2022.
The Company's Annual Report and Accounts will be made available on the
Company's website www.kodalminerals.com (http://www.kodalminerals.com/)
shortly. The Company will confirm in due course when the Annual Report has
been posted to shareholders and will provide information about the date and
location of the Annual General Meeting.
Financial and Corporate Highlights
· Group loss before other comprehensive income for the year of
£903,000 (2021: £623,000)
· 370% increase in exploration and evaluation expenditure of
£2,547,000 (2021: £542,000)
· 63% increase in the value of the gold projects in Mail and Mali and
Cote d'Ivoire to £2,411,000 (2021: £1,476,000)
· 20% increase in value of the Bougouni lithium project in Mali to
£9,031.000 (2021: £7,488,000)
· Cash balance of £1,046,000 as at 31 March 2022 (2021: £2,433,000)
· Post period end, the Company successfully raised £3 million (before
expenses)
· Cash balance of £3,333,000 as at 8 July 2022
Operational Highlights
Bougouni Lithium Project, Mali ("Bougouni" or the Project")
· Mining Licence granted - the Project is now fully permitted for
development and construction
· Achieved 100% ownership of all concessions following the acquisition
of minority interests held by the original vendors (prior to formation of the
new mining company in which the Mali Government will have an interest of
between 10% and 20%)
· Initiated a six-month work programme focussed on updating the
original Feasibility Study
· Ongoing community engagement, consultation, and evaluation of the
impact of the proposed mining sites
· Robust economics confirmed by the updated Project Feasibility Study
announced post period end
o NPV7% of US$760 million (US$567 million post-tax) compared to US$293
million (US$201 million post tax) in the original Feasibility Study.
o Life of mine (8.5 years) revenue exceeding US$2,145,000,000 based on an
average sell price of US$1,060 per tonne (FOB basis).
o C1* cash costs of US$362 per tonne of 6% Li2O spodumene concentrate
("SC6"), and costs of US$474 per tonne including transportation and other
selling costs.
o Total SC6 production of 2,024,000 tonnes with an annual average production
of 238,000 tonnes.
o Development based on unchanged operating assumptions of open cut truck and
shovel contractor mining operation, feeding 2Mtpa of lithium ore to the
flotation processing plant, utilising a conventional flotation circuit to
maximise spodumene recovery.
o Capital cost of the Project increased approximately 20% to US$154 million
reflecting increased raw material and fuel costs
Fatou and Nielle and Dabakala Gold projects
· Significant exploration programmes at Fatou and Nielle gold
projects yielded positive results and identified wide gold intersections and
high-grade gold mineralised areas
· Infill geochemical sampling at Dakabala returned high-grade
surface samples at new discovery zones
Commenting on the results, Bernard Aylward, CEO of Kodal Minerals said:
"We are in the enviable position of owning 100% of the concessions of what I
believe will become one of the most significant lithium spodumene producing
projects in West Africa, and the first in Mali. The prices of lithium
spodumene have risen exponentially as global demand for this critical mineral
shows no sign of abating driven by the green agenda and the EV (electric
vehicle) revolution.
"The work carried out by our team on the ground resulted in the successful
receipt of our Mining Licence at Bougouni and initiated a six-month work
programme to update the original feasibility study carried out in 2020. The
results have further enhanced the Project's already robust economic
fundamentals with an IRR of 91%, a payback period of eight months and a life
of mine revenue of approximately US$2.14 billion, nearly a 50% increase on our
original feasibility study estimate.
"Looking ahead, we will continue to invest in exploration at our gold projects
following the excellent results from our reverse core drilling campaign.
However, our priority is to de-risk the Bougouni Project, by further reducing
expected operating costs whilst advancing discussions with potential partners
on funding for construction with the view of bringing the Project into
production."
* C1 cash cost includes all mining, processing and all general and
administration costs per tonne sold, and additional to that the costs of
transport to port and associated selling costs.
Chairman's Statement
I am pleased to present the Annual Report of Kodal Minerals plc for the year
ended 31 March 2022.
Kodal continues to make excellent progress towards achieving its overarching
objective of bringing its flagship lithium project in Bougouni, Mali,
("Bougouni Lithium Project" or "the Project") to fruition. During this
financial year, and continuing in subsequent months, Kodal has taken the
necessary steps to lay the technical and commercial foundations of the
Project, together with the mandatory permitting obligations, and we are now
tantalisingly close to pushing forward into financing and construction.
Indeed, the backdrop of the lithium market over recent months has provided a
significant tailwind, supporting our commercial and financing discussions.
The Company is continuing to review and discuss potential opportunities for
collaboration with third parties, including major mining groups, to support
the development of the Project providing Kodal with multiple routes through
which to capitalise on the inherent value of Bougouni.
Lithium prices continue to make headlines, with major producers such as ASX
listed Pilbara Minerals Limited achieving record sales prices for 5.5% Li2O
spodumene concentrate of US$6,350/t FOB. When compared with our initial
selling price input of US$680/t SC6 reported in the original feasibility study
in 2020, it is apparent just how far the industry has moved on over the past
24 months.
This pricing environment has been driven by the global appetite and awareness
for electric vehicles and efficient battery storage, together with concerns
from key decision makers about the security of lithium supply, along with
other critical minerals, from stable jurisdictions. Whilst some commentators
have recently asserted that these price rises are unsustainable in the
long-term, it remains widely accepted that demand is going to continue to
increase rapidly over the next decade, and new sources of supply may not
materialise within this critical timeframe. While a market like copper
typically grows by 2%-4% a year, providing producers and developers with a
degree of confidence as to the demand fundamentals, lithium analysts are
anticipating annual demand growth of more than 20% between 2021 and 2025.
This presents late-stage developers and pre-production companies such as Kodal
with a unique advantage, with the ability and agility to rapidly move projects
through the construction phase and into production in order to fulfil this
potential supply deficit.
With this in mind, the Board of Kodal is resolute in its objective to assemble
the requisite components to support Bougouni's successful transition into
production, including technical delivery, permitting approvals, environmental,
social and governance frameworks and commercial commitments.
Following the grant of the Mining Licence for Bougouni in November 2021, the
Company initiated a six-month work programme focussed on updating the
Feasibility Study. This was completed in June 2022 and demonstrated to the
market that the shift in market conditions have further enhanced the Project's
already robust economic fundamentals. Indeed, the updated feasibility study
highlighted an IRR of 91% and a payback period of only eight months. With
life of mine revenue anticipated to be in excess of US$2.14 billion, nearly
50% more than our original feasibility study estimate, our conversations with
potential partners have intensified with a view to reaching the optimum route
for delivery in as short timeframe as practicable. Further details of this
Feasibility Study update are included in the Operating Review.
Whilst simultaneously pushing closer to development at Bougouni, our
exploration team has also made solid progress across our gold portfolio.
Work has centred primarily on the Fatou Gold project in Mali, and the Nielle
Gold project in Cote d'Ivoire, both discoveries which we believe have
significant resource potential. Earlier stage but no less exciting is the
Dabakala Gold project in Cote d'Ivoire where geochemical sampling has
confirmed the continuity of high-grade gold anomalism extending for over 11km
and surface width up to 3km. I am confident that our gold portfolio has the
potential to yield new large gold deposits, and I look forward to reporting on
what the next field season delivers.
The next 12 months will be a pivotal time for Kodal as we seek to advance both
our gold portfolio and, more importantly, our flagship Bougouni Lithium
Project, supported by strategic investors and within a market environment
which remains very buoyant for quality near-term lithium assets. I look
forward to updating shareholders on a regular basis with updates on our
operational and corporate advancements.
Robert Wooldridge
Non-executive Chairman
18 July 2022
OPERATIONAL REVIEW
Kodal has maintained its sizeable tenure in Mali and Cote d'Ivoire, whilst
completing the acquisition of minority interests to become the 100% holder of
the flagship Bougouni Lithium Project located in Western Mali. Kodal's
management has continued to ensure that all government compliance, reporting
and fees are kept up to date and all concessions are retained in good
standing.
Mining Licence and Exploration Concession Review
Kodal's Bougouni and Bougouni West lithium exploration projects are located in
southern Mali, with the rights and concessions held by subsidiary company
Future Minerals SARL ("Future Minerals"), a Malian registered company owned
100% by the Group. In November 2021, Kodal acquired the minority shareholdings
of Bougouni from the original vendors of the Project and as a result, Kodal
through Future Minerals, now holds 100% interest in all concessions of the
Bougouni Lithium Project.
Bougouni Lithium Project - Mining Licence details:
Tenements Country Kodal Economic Ownership Project / Joint Venture Validity
Foulaboula Mali 100% ownership (80 to 90% upon Mali State's participation) / 10% free carried Bougouni Lithium Project Mining Licence N°2021-0774/PM-RM of November 5 2021. Permit is valid 12
+ up to 10% contributing interest years renewable for 10 years period each until depletion of the resources
Following the Company agreed-upon modifications to the Foulaboula, Sogola Nord
and Fariedele concessions which were changed to ensure all areas of
mineralisation, mining infrastructure and processing plant are included within
the one licence area, Kodal was granted the Foulaboula Permis d'Exploitation
number No2021-0774/PM-RM ("Mining Licence") in November 2021. This covered
the proposed open-pit mining and processing operation at Bougouni, making the
Project fully permitted for development and construction.
The Mining Licence is valid for an initial 12-year term and renewable in
ten-year blocks until all resources are mined. The Mining Licence is granted
under the 2019 Mining Code and extends over a 97.2 square km area that will be
a focus for Kodal's exploration programme to ensure further resources are
delineated to prolong the Bougouni Lithium Project mine life.
Table of Concessions - Kodal lithium Concessions in Mali:
Tenements Country Kodal Economic Ownership Project / Joint Venture Validity
Dogobala Mali 100% economic interest via direct ownership following completion of option Bougouni Lithium Project Licence valid and in good standing. Arrêté No. 2018-1115 granted on 13
payments April 2018 for initial 3-year period, with option for 2 extensions of 2 years
validity each
Application for first renewal has been lodged and all fees paid.
Renewal approval pending
Sogola Nord Mali 100% economic interest. Concession replaces part of the original Madina Bougouni Lithium Project Licence valid and in good standing. Arrêté number 2020-0072 granted 22
concession which had reached its time limit January 2020 for an initial 3-year period, with option for 2 extensions of 2
years validity each.
Licence area modified during 2020 to account for the future Foulaboula Mining
Licence.
Fariedele Mali 100% economic interest. Concession replaces part of the original Madina Bougouni Lithium Project Licence valid and in good standing. Arrêté number 2020-0073 granted 22
concession which had reached its time limit January 2020 for an initial 3-year period, with option for 2 extensions of 2
years validity each
Licence area modified during 2020 to account for the future Foulaboula Mining
Licence.
Mafele Ouest Mali Kodal completed all obligations of the Option to Purchase agreement and now is Bougouni West Lithium Licence valid and in good standing. Arrêté No. 2018-4537 granted on 31
the beneficial holder of 80% economic interest December 2018 for initial 3-year period, with option for 2 extensions of 2
years validity each. All taxes and renewal fees have been paid.
Renewal approval pending
NKemene Ouest Mali Kodal completed all obligations of the Option to Purchase agreement and now is Bougouni West Lithium Licence valid and in good standing. Arrêté No. 2018-4486 granted on 28
the beneficial holder of 80% economic interest December 2018 for initial 3-year period, with option for 2 extensions of 2
years validity each. All taxes and renewal fees have been paid.
Renewal approval pending
The Bougouni Lithium Project concessions surround the Foulaboula mining
licence and will be explored for additional pegmatite hosted resources that
can be added to the mining area through agreement with the Mali Government as
required. The concessions are all in good standing, and exploration
completed to date by Kodal has indicated priority sites for additional
exploration within the concessions.
The Bougouni West concessions remain in good standing with Kodal having
completed all obligations under the Option to Purchase agreement and now are
the beneficial holders of 80% of the licences. Kodal intends to undertake
future exploration in the concession areas.
Table of Concessions - Kodal Gold Concessions in West Africa:
Tenements Country Kodal Economic Ownership Project / Joint Venture 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.
Korhogo Côte d'Ivoire 100% direct ownership Gold Exploration Licence valid and in good standing. Renewal granted on 31 March 2020 for a 3
year-term.
Dabakala Côte d'Ivoire 100% direct ownership Gold Exploration Licence valid and in good standing. Renewal granted on 31 March 2020 for a 3
year-term.
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 the 28 February 2018 for a 3 year-
period. Second Renewal decree received 18 December 2020 for a 3 year-period.
Tiebissou Côte d'Ivoire 100% direct ownership Gold Exploration Licence valid and in good standing. Initial term expired 30 September
2018. An application for renewal has been lodged, fees paid and approved.
Renewal decree is pending signature.
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.
Djelibani Sud Mali 100% direct ownership Gold Exploration Licence valid and in good standing. Arrêté N° 2021-5133/MMEE-SG granted
on 28 December 2021 for an initial 3 year-period, with option for 2 extensions
of 3 years validity each. All taxes have been paid.
Nangalasso Mali 100% direct ownership following completion of option payments Nangalasso Project Nangalasso arrêté completed second renewal on 4 February 2021. A new
Convention application covering the same permit has been lodged with the DNGM
Gold Exploration and is awaiting approval.
Sotian Mali Completed Option agreement and is 100% beneficial owner of concession. Nangalasso Project Arrêté No. 2018-1925 granted on 12 June 2018 for initial 3 years period,
with option for 2 extensions of 3 years validity each
Gold Exploration
First renewal has been approved
Tiedougoubougou Mali Kodal completed Option agreement and is 100% beneficial owner of concession Nangalasso Project Arrêté No. 2018-3319 granted on 4 September 2018 for initial 3 years period,
with option for 2 extensions of 3 years validity each.
Gold Exploration
Application for first renewal has been lodged and all fees paid. Renewal
approval pending
Fininko Mali Held through Option Agreement giving right to acquire 100% ownership Fatou Project Licence in good standing. First renewal granted by Arrêté No.
2021-2876/MMEE-SG of August 6th 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 N°2017-0170/MM-SG of February 2nd 2017.
Gold Exploration Application for first renewal has been lodged and all fees and taxes have been
paid.
Renewal approval pending
Bougouni Lithium Project Status
Kodal Minerals was granted an Environmental Permit over the Project in
November 2019. The original Feasibility Study ("FS") was completed by Kodal
Minerals in January 2020, culminating in the granting of a large-scale Mining
Licence in November 2021 to the Company's Mali subsidiary company, Future
Minerals. The Mining Licence is valid for an initial 12-year term and
renewable in ten-year blocks until all resources are mined. The Mining
Licence is granted under the 2019 Mining Code and extends over 97.2 square
kilometres covering the proposed open-pit mining and processing operation at
Bougouni (refer to announcement of 8 November 2021).
The original Bougouni Lithium Project Feasibility study was completed in
January 2020 and following the grant of the mining licence, Kodal commenced
work on updating the study focussing on the engineering, process recovery and
capital cost for the Project as these key areas had undergone substantial
change over the previous 2 years. The results of the updated study were
announced on 15 June 2022.
The June 2022 Bougouni Project Feasibility Study update confirms a very robust
project with key metric highlights including:
· NPV7% of US$760M (US$567M post-tax) compared to US$293M (US$201M post
tax) in the original Feasibility Study.
· Life of mine (8.5 years) revenue exceeding US$2,145,000,000 based on
an average sell price of US$1,060 per tonne (FOB basis).
· C1* cash costs of US$362 per tonne of 6% Li2O spodumene concentrate
("SC6"), and costs of US$474 per tonne including transportation and other
selling costs.
· Total SC6** production of 2,024,000 tonnes with an annual average
production of 238,000 tonnes.
· Bougouni Lithium Project development based on unchanged operating
assumptions of open cut truck and shovel contractor mining operation, feeding
2Mtpa of lithium ore to the flotation processing plant, utilising a
conventional flotation circuit to maximise spodumene recovery.
· Capital cost of the Project increased approximately 20% to US$154M
reflecting increased raw material and fuel costs.
* C1 cash cost includes all mining, processing and all general and
administration costs per tonne sold, and additional to that the costs of
transport to port and associated selling costs
Kodal completed a technical site visit to Bougouni in January 2022 to continue
the development programme. A detailed LIDAR survey has been completed for
the Project area and is being used to provide detailed topographical
information to assist in the final planning of the processing plant and
associated infrastructure.
In addition, community engagement, consultation, and evaluation of the impact
of the proposed mining sites is continuing with our Environmental Consultants,
Digby Wells. This is a key component of Kodal's continuing engagement with
the Bougouni community and is fundamental to the Company achieving the
development of its mining operation and ensuring that it enjoys the support of
and returns benefits to these communities.
Kodal has continued its engineering work programme to optimise the capital
cost estimate for the development of the Project and complete a detailed
assessment to confirm the operating costs of the Project, including the review
of the proposed transport costs (details of which were previously announced on
27 January 2020), ahead of securing funding for mine development and
construction. This engineering work programme is continuing with a focus on
the process plant design and capital cost estimate, improvements in
metallurgical recovery and an update of the open pit optimisation of the
defined minerals resources.
Suay Chin and Off-take arrangement Update
Kodal has been informed that there has been a restructuring of the ownership
of Suay Chin International Pte Ltd ('Suay Chin'). Suay Chin is the Company's
major shareholder with 14.18% of the issued share capital.
Suay Chin is now indirectly controlled by Zhejiang Kanglongda Special
Protection Technology Co., Ltd ("Kanglongda") which is listed on the Shanghai
Stock Exchange. Kanglongda's previous business focus was in the area of
functional labour protection gloves, but it has recently developed a new
strategy of investment in the lithium industry.
Kodal confirms that the binding term sheet (the "Off-take Term Sheet") entered
into between Kodal and Suay Chin in March 2017 remains in place. The
Off-take Term Sheet contemplates that the parties will negotiate an extended
off-take agreement for between 80% and 100% of the spodumene product produced
at the Project for a period of three years. The Off-take Term Sheet sets out
certain agreed off-take principles that are to be included in the off-take
agreement including the parties agreeing to buy and sell the contract quantity
as well as the formal agreement including a right to match any third party
off-take terms agreed for a period of three years following the expiry of the
formal agreement. Whilst a formal agreement has not been entered into, Suay
Chin retains the first right of refusal for a period of three years from first
production of product from the Project whereby Kodal may not enter into any
agreement with a third party to sell more than 20% of future production from
the Project without having first offered to sell the production to Suay Chin
on the terms offered by the third party. There can be no guarantee on the
timing of completion of a formal off-take agreement or if any such agreement
will ultimately be agreed.
Gold Exploration Projects and Exploration Programme
In addition to the progress made at the Bougouni Lithium Project, the Company
has also made strong progress at its various gold projects situated across
West Africa.
At the Nielle project in northern Cote d'Ivoire, Kodal has completed a 1,000m
reverse core ("RC") drilling programme which has returned wide intersections
of gold mineralisation and includes zones of high-grade gold mineralisation
including results such as 13m at 5.7g/t from 12m. The Company has also
completed the 5,000m aircore drill programme which has confirmed a 4.5km gold
mineralised trench with an extension of up to 1.5km south and over 1km north.
At the Dabakala project also in Cote d'Ivoire, infill geochemical sampling has
continued to return high-grade surface samples at new discovery zone with the
new assay results confirming up to 1.97g/t gold with further results
confirming continuity of high-grade gold anomalism extending for over 11km and
surface width up to 3km.
At the Fatou project in Mali, Kodal has completed the initial RC drilling
programme of 1,242m and has returned results including 23m at 1.63 g/t gold
from 82m. The completion of the campaign has confirmed multiple mineralised
zones and highlights extensions to the north and south requiring additional
drilling to test the Fatou prospect.
Future Activity
Kodal is focussed on the advancement and development of its Bougouni Lithium
Project. The Company is continuing to undertake engineering studies to
investigate opportunities to decrease capital costs and future operating
costs. These studies will be pursued in more detail during the coming year
as the Company advances the Project to development stage.
Key areas that have the potential to enhance the Bougouni Lithium Project
include:
· Resource growth and increase of head grade from further exploration
in the highly prospective areas contained within existing exploration leases;
· Reduction in capital cost through further optimisation of the
flowsheet and engaging with experienced Chinese and other manufacturers;
· Investigate more favourable power supply solutions to reduce
operating costs, which is currently under way on the basis of connecting to
the future high-voltage grid approximately 15km from the site (the new
Bougouni substation is being constructed presently under the 225 kV
Sikasso-Bougouni-Sanankoroba-Bamako Transmission line project by the Mali
power authority - Energies de Mali);
· Optimisation of mine scheduling and drill and blast strategy; and
· Cost savings relating to the construction of the tailings storage
facility ("TSF"). Currently the design of Stage 1 is based on 24 months of
capacity to combat potential for adverse climatic conditions. Potentially
this could be reduced to about 18 months' capacity if the sequencing of
construction is favourable with respect to maximising construction in the dry
season.
As Kodal focusses on the technical planning, engineering and optimisation of
the proposed development, the Company will be seeking to finalise financial
options for the construction of the Bougouni mining and processing
operation. It is looking to move to production as quickly as possible to
take advantage of the current high prices of its Lithium Spodumene product in
a rising demand cycle.
I look forward to reporting on our advances during the year.
Bernard Aylward
Chief Executive Officer
18 July 2022
FINANCE REVIEW
Results of operations
For the year ended 31 March 2022, the Group reported a loss before other
comprehensive income for the year of £903,000, including share based payment
costs of £343,000 (2021: £78,000), compared to a loss of £623,000 in the
previous year. Administrative expenses have remained broadly in line with
last year as the Group has continued to review the development opportunity
presented by the Bougouni Project and run the offices in Mali and Côte
d'Ivoire, but significant additional exploration activity for both gold and
lithium was undertaken during the year. Further information is provided in
the Operational Review above.
During the year, the Group invested £2,547,000 (2021: £542,000) in
exploration and evaluation expenditure on its various projects. As a result,
the carrying value of the Group's capitalised exploration and evaluation
expenditure increased from £8,964,000 to £11,442,000 after taking account of
the effects of foreign exchange rates. At 31 March 2022, after taking
account of the effects of foreign exchange rates, the carrying value of the
gold projects in Mali and Cote d'Ivoire was £2,411,000 (2021: £1,476,000)
and of the lithium projects in Mali was £9,031.000 (2021: £7,488,000).
Cash balances as at 31 March 2022 were £1,046,000, a decrease of £1,387,000
on the previous year's level of £2,433,000. Net assets of the Group at the
year-end were £12,091,000 (2021: £12,636,000).
Financing
The Group did not undertake any fundraisings in the year although £1.8m of
proceeds were received in April 2021 relating to a fundraising which took
place in late March 2021.
Subsequent to the year end, on 4 May 2022 the Company announced that it has
raised £3,000,000 (before expenses) via a subscription for 130,142,857 shares
and an oversubscribed placing of 941,285,712 shares at a price of 0.28 pence
per Placing Share (the 'Placing'). The funds raised will support Kodal in
the continuing development and preparation for financing and construction of
its flagship Bougouni Lithium Project in Mali.
Going concern and funding
The Group has not earned revenue during the year to 31 March 2022 as it is
still in the exploration and development phases of its business. The
operations of the Group are currently being financed from funds which the
Company has raised from the issue of new ordinary shares and other equity
linked instruments.
The Directors have prepared cash flow forecasts for the period ending 30
September 2023. The forecasts include payments for the ongoing review of the
development opportunity presented by the Bougouni mining licence, additional
exploration activity for both gold and lithium as well as covering ongoing
overheads.
On 4 May 2022 the Company announced that it has raised £3,000,000 (before
expenses). Further funding will be required in due course, but 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 to raise further financing. 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 2022 31 March 2021
Cash and cash equivalents (a) £1,046,000 £2,433,000
Administrative expense (b) £541,000 £513,000
Exploration and evaluation expenditure (c) £2,547,000 £542,000
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 decreased by of £1.4 million in
the year.
b. 'Administrative expenses' is used to measure the Group's administrative
costs and operating results. Administrative expenses for the year were
£541,000, broadly in line with £513,000 in the previous year as the Group
has continued to review the development opportunity presented by the Bougouni
Project and 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 £2.5 million higher than prior year as
significant additional exploration activity for both gold and lithium was
undertaken during the year following the lifting of Covid-19 restriction.
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.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 MARCH
2021
Note Year ended 31 March Year ended 31 March
2022 2021
£ £
Continuing operations
Administrative expenses (540,655) (512,885)
Share based payments 5 (342,876) (77,979)
OPERATING LOSS (883,531) (590,864)
Finance charge (19,556) (32,506)
LOSS BEFORE TAX 2 (903,087) (623,370)
Taxation 6 - -
LOSS FOR THE YEAR FROM CONTINUING OPERATIONS
(903,087) (623,370)
OTHER COMPREHENSIVE INCOME
Items that may be subsequently reclassified to profit or loss
Currency translation loss (108,167) (223,635)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR (1,011,254) (847,005)
Loss per share
Basic and diluted (pence) 4 (0.0057)
(0.0054)
CONSOLIDATED AND PARENT COMPANY STATEMENTS OF FINANCIAL POSITION AS AT 31
MARCH 2022
Group Group Company Company
31 March 2022 31 March 2021 31 March 2022 31 March 2021
Note £ £ £ £
NON-CURRENT ASSETS
Intangible assets 7 11,442,403 8,964,089 - -
Property, plant and equipment 8 3,309 8,677 - -
Amounts due from 9
subsidiary undertakings - - 10,785,230 7,916,150
Investments in subsidiary
undertakings 9 - - 512,373 512,373
11,445,712 8,972,766 11,297,603 8,428,523
CURRENT ASSETS
Other receivables 10 5,769 1,854,908 5,769 1,854,908
Cash and cash equivalents 1,045,515 2,432,807 949,844 2,376,329
1,051,284 4,287,715 955,613 4,231,237
TOTAL ASSETS 12,496,996 13,260,481 12,253,216 12,659,760
CURRENT LIABILITIES
Trade and other payables 11 (406,341) (624,616) (100,959) (321,851)
TOTAL LIABILITIES (406,341) (624,616) (100,959) (321,851)
NET ASSETS 12,090,655 12,635,865 12,152,257 12,337,909
EQUITY
Attributable to owners of the parent:
Share capital 12 4,947,595 4,916,364 4,947,595 4,916,364
Share premium account 12 15,933,071 15,841,134 15,933,071 15,841,134
Share based payment reserve 1,150,678 807,802 1,150,678 807,802
Translation reserve (318,627) (210,460) - -
Retained deficit (9,622,062) (8,718,975) (9,879,087) (9,227,391)
TOTAL EQUITY 12,090,655 12,635,865 12,152,257 12,337,909
The Company's loss for the year ended 31 March 2022 was £651,696 (2021:
£518,711).
The financial statements were approved and authorised for issue by the board
of directors on 18 July 2022 and signed on its behalf by
Charles Joseland
Director
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH 2022
Share capital Share premium account Share based payment reserve Retained deficit Total equity
Translation reserve
Group £ £ £ £ £ £
At 31 March 2020 2,889,606 12,514,604 729,823 13,175 (8,095,605) 8,051,603
Comprehensive income
Loss for the year - - - - (623,370) (623,370)
Other comprehensive income
Currency translation loss - - - (223,635) - (223,635)
Total comprehensive income for the year - - (623,370) (847,005)
- (223,635)
Transactions with owners
Share based payment - - 77,979 - - 77,979
Proceeds from shares issued 2,026,758 3,548,315 - - - 5,575,073
Share issue expenses - (221,785) - - - (221,785)
4,916,364 15,841,134 (8,718,975) 12,635,865
At 31 March 2021 807,802 (210,460)
Comprehensive income
Loss for the year - - - - (903,087) (903,087)
Other comprehensive income
Currency translation loss - - - (108,167) - (108,167)
Total comprehensive income for the year - - (903,087) (1,011,254)
- (108,167)
Transactions with owners
Share based payment - - 342,876 - - 342,876
Proceeds from shares issued 31,231 91,937 - - - 123,168
Share issue expenses
4,947,595 15,933,071 (9,622,062) 12,090,655
At 31 March 2022 1,150,678 (318,627)
PARENT COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH 2021
Share Capital Share premium account Share based payment reserve Retained deficit Total equity
Company £ £ £ £ £
At 31 March 2020 2,889,606 12,514,604 729,823 (8.708,680) 7,425,353
Comprehensive income
Loss for the year - - - (518,711) (518,711)
Total comprehensive income for the year - (518,711) (518,711)
- -
Transactions with owners
Share based payment - - 77,979 - 77,979
Proceeds from shares issued 2,026,758 3,548,315 - - 5,575,073
Share issue expenses - (221,785) - - (221,785)
At 31 March 2021 4,916,364 12,337,909
15,841,134 807,802 (9,227,391)
Comprehensive income - - - (651,696) (651,696)
Loss for the year
Total comprehensive income for the year - (651,696)
- - (651,696)
Transactions with owners
Share based payment
Proceeds from shares issued - - 342,876 - 342,876
Share issue expenses 31,231 91,937 - - 123,168
At 31 March 2022
4,947,595 15,933,071 12,152,257
1,150,678 (9,879,087)
CONSOLIDATED AND PARENT COMPANY STATEMENTS OF CASH FLOWS FOR THE YEAR
ENDED 31 MARCH 2021
Group Group Company Company
Year ended Year ended Year ended Year ended
31 March 2022 31 March 2021 31 March 2022 31 March 2021
Note £ £ £ £
Cash flows from operating activities
Loss before tax (903,087) (623,370) (651,698) (518,711)
Adjustments for non-cash items:
Write back of impairment of intercompany balances - -
(196,000) -
Share based payments 342,876 77,979 342,876 77,979
Operating cash flow before movements in working capital (560,211) (545,391)
(504,822) (440,732)
Movement in working capital
Decrease in receivables 10,244 3,965 10,244 3,965
(Decrease) / increase in payables (218,275) (34,097) (220,892) 82,621
(208,031) (30,132)
Net movements in working capital (210,648) 86,586
(768,242) (575,523)
Net cash outflow from operating activities (715,470) (354,146)
Cash flows from investing activities
Purchase of tangible assets 8 (1,600) - - -
Purchase of intangible assets 7 (2,474,768) (535,947) - -
Loans to subsidiary undertakings - - (2,673,079) (812,065)
Net cash outflow from investing activities (2,476,368) (535,947)
(2,673,079) (812,065)
Cash flow from financing activities
Net proceeds from share issues 12 1,962,064 2,419,241 1,962,064 2,419,241
Net proceeds from convertible loan notes - 1,095,152 - 1,095,152
Net cash inflow from financing activities 1,962,064 3,514,393 1,962,064 3,514,393
Increase / (decrease) in cash and cash equivalents (1,282,546) 2,402,923
(1,426,485) 2,348,182
Cash and cash equivalents at beginning of the year
2,432,807 33,221 2,376,329 28,147
Exchange (loss) / gain on cash (104,746) (3,337) - -
Cash and cash equivalents at end of the year 1,045,515 2,432,807
949,844 2,376,329
Cash and cash equivalents comprise cash on hand and bank balances.
PRINCIPAL ACCCOUNTING POLICIES FOR THE YEAR ENDED 31 MARCH 2022
The Group has adopted the accounting policies set out below in the preparation
of the financial statements. All of these policies have been applied
consistently throughout the period unless otherwise stated.
The Company is incorporated in England and Wales with registered number
07220790. The Company's registered office is at Prince Frederick House,
35-39 Maddox Street, London W1S 2PP.
Financial Information
The financial information set out above does not constitute the Company's
statutory accounts for the years ended 31 March 2022 or 2021 but is derived
from those accounts. Statutory accounts for 2021 have been delivered to the
registrar of companies, and those for 2022 will be delivered in due course.
The auditor has reported on those accounts; their reports were (i)
unqualified, (ii) did not include a reference to any matters to which the
auditor drew attention by way of emphasis without qualifying their report and
(iii) did not contain a statement under section 498 (2) or (3) of the
Companies Act 2006.
Annual Report and Accounts and Annual General Meeting
The 2022 Annual Report and Accounts will be published on the Group's website
at www.kodalminerals.com (http://www.kodalminerals.com) shortly. The Company
will confirm in due course when the Annual Report has been posted to
shareholders and will provide information about the date and location of the
Annual General Meeting.
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 has not earned revenue during the year to 31 March 2022 as it is
still in the exploration and development phases of its business. The
operations of the Group are currently being financed from funds which the
Company has raised from the issue of new shares and other equity linked
instruments.
At 31 March 2022, the Group held cash balances of £1,046,000 (2021:
£2,433,000). The Group's cash balances at 8 July 2022 were £3,333,000.
The Directors have prepared cash flow forecasts for the period ending 30
September 2023. The forecasts include payments for the ongoing review of the
development opportunity presented by the Bougouni mining licence, additional
exploration activity for both gold and lithium as well as covering ongoing
overheads.
On 4 May 2022 the Company announced that it has raised £3,000,000 (before
expenses). Further funding will be required in due course, but 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 to raise further financing. Accordingly, the
financial statements have been prepared on a going concern basis.
Basis of consolidation
The Group financial statements consolidate those of the Company and all of its
subsidiary undertakings drawn up to the statement of financial position date.
Subsidiary undertakings are entities over which the Group has the power to
control the financial and operating policies so as to obtain benefits from
their activities. The Group obtains and exercises control through voting
rights.
Unrealised gains on transactions between the Company and its subsidiaries are
eliminated on consolidation. Unrealised losses are also eliminated unless the
transaction provides evidence of an impairment of the asset transferred.
Amounts reported in the financial statements of subsidiaries have been
adjusted where necessary to ensure consistency with the accounting policies
adopted by the Group.
Foreign currency translation
Items included in the Group's consolidated financial statements are measured
using the currency of the primary economic environment in which the Group
operates ("the functional currency"). The financial statements are presented
in pounds sterling ("£"), which is the functional and presentational currency
of the Parent Company and the presentational currency of the Group. End of
year balances in the Group's West African subsidiary undertakings were
converted using an end of year rate of XOF 1 : £0.00129 (2021: XOF 1 :
£0.00130).
Transactions in foreign currencies are recorded using the rate of exchange
ruling at the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies are translated using the rate of exchange
ruling at the reporting date and the gains or losses on translation are
included in profit and loss. Non-monetary items that are measured in terms
of historical cost in a foreign currency are translated using the exchange
rates as at the dates of the original transactions. Non-monetary items
measured at fair value in a foreign currency are translated using the exchange
rates at the date when the fair value was determined.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation
and any recognised impairment loss. Depreciation, which is included in
administrative expenses, is charged so as to write off the costs of assets
down to their residual value, over their estimated useful lives, using the
straight-line method, on the following basis:
Plant and machinery
4 years
Motor vehicles
4 years
Fixtures, fittings and equipment 4 years
Where property, plant and equipment are used in exploration and evaluation
activities, the depreciation of the assets is capitalised as part of the cost
of exploration and evaluation assets. The assets' residual values and useful
lives are reviewed, and adjusted if appropriate, at the end of each reporting
period.
Investments in subsidiaries
Investments in subsidiaries are stated at cost less any provision for
impairment. Where the recoverable amount of the investment is less than the
carrying amount, an impairment is recognised.
Exploration and evaluation expenditure
In accordance with IFRS 6 (Exploration for and Evaluation of Mineral
Resources), exploration and evaluation costs incurred before the Group obtains
legal rights to explore in a specific area (a "project area") are taken to
profit or loss.
Upon obtaining legal rights to explore in a project area, the fair value of
the consideration paid for acquiring those rights and subsequent exploration
and evaluation costs are capitalised as exploration and evaluation assets. The
costs of exploring for and evaluating mineral resources are accumulated with
reference to appropriate cost centres being project areas or groups of project
areas.
Upon the technical feasibility and commercial viability of extracting the
relevant mineral resources becoming demonstrable, the Group ceases further
capitalisation of costs under IFRS 6.
Exploration and evaluation assets are not amortised prior to the conclusion of
appraisal activities, but are carried at cost less impairment, where the
impairment tests are detailed below.
Exploration and evaluation assets are carried forward until the existence (or
otherwise) of commercial reserves is determined:
· where commercial reserves have been discovered, the carrying value of
the exploration and evaluation assets are reclassified as development and
production assets and amortised on an expected unit of production basis; or
· where a project area is abandoned, or a decision is made to perform
no further work, the exploration and evaluation assets are written off in full
to profit or loss.
Exploration and evaluation assets - impairment
Project areas, or groups of project areas, are determined to be cash
generating units for the purposes of assessment of impairment.
With reference to a project area or group of project areas, the exploration
and evaluation assets (along with associated production and development
assets) are assessed for impairment when such facts and circumstances suggest
that the carrying amount of the assets may exceed the recoverable amount.
Such indicators include, but are not limited to, those situations outlined in
paragraph 20 of IFRS 6 and include the point at which a determination is made
as to whether or not commercial reserves exist.
The aggregate carrying value is compared against the expected recoverable
amount, generally by reference to the present value of the future net cash
flows expected to be derived from production of the commercial reserves.
Where the carrying amount exceeds the recoverable amount, an impairment is
recognised in profit or loss.
Intangible assets and impairment
Externally acquired intangible assets are initially recognised at cost and
subsequently amortised over their useful economic lives. Amortisation, which
is included in administrative expenses, is charged so as to write off the
costs of intangible assets, over their estimated useful lives, using the
straight-line method, on the following basis:
Software
3 years
Deferred taxation
Deferred tax is provided in full, using the liability method, on temporary
differences arising between the tax bases of assets and liabilities and their
carrying amounts in the consolidated financial statements. Deferred tax is
determined using tax rates (and laws) that have been enacted or substantively
enacted by the reporting date and are expected to apply when the related
deferred tax is realised, or the deferred liability is settled.
Deferred tax assets are recognised to the extent that it is probable that the
future taxable profit will be available against which the temporary
differences can be utilised.
Financial instruments
Financial assets and financial liabilities are recognised on the Statement of
Financial Position when the Group becomes a party to the contractual
provisions of the instrument.
IFRS 7 (Financial Instruments: Disclosures) requires information to be
disclosed about the impact of financial instruments on the Group's risk
profile, how the risks arising from financial instruments might affect the
entity's performance, and how these risks are being managed. The required
disclosures have been made in Note 14 to the financial statements.
The Group's policies include that no trading in derivative financial
instruments shall be undertaken.
Cash and cash equivalents
Cash and cash equivalents in the Statement of Financial Position comprise cash
at bank and in hand.
Other receivables
Other receivables are carried at amortised cost less provision made for
impairment of these receivables. A provision for impairment of receivables is
established when there is an expected credit loss on amounts due according to
the original terms of the receivables. The amount of the provision is the
difference between the assets' carrying amount and the recoverable amount.
Provisions for impairment of receivables are included in profit or loss.
Trade and other payables
Trade payables and other payables represent liabilities for goods and services
provided to the Group prior to the end of the financial year that are unpaid
and arise when the Group becomes obliged to make future payments in respect of
the purchase of these goods and services. These amounts are carried at
amortised cost. The amounts are unsecured and are usually paid within 30 days
of recognition.
Provisions
A provision is recognised when a present obligation (legal or constructive)
has arisen as a result of a past event and it is probable that a future
outflow of resources will be required to settle the obligation, provided that
a reliable estimate can be made of the amount of the obligation.
When the effect of discounting is material, the amount recognised for a
provision is the present value at the end of the reporting period of the
future expenditures expected to be required to settle the obligation. The
increase in the discounted present value amount arising from the passage of
time is included in profit or loss.
Share capital
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of new shares are shown in equity as a deduction
from the proceeds.
Equity settled transactions (Share based payments)
The Group has issued shares as consideration for services received. Equity
settled share-based payments are measured at fair value at the date of issue.
The Group has also granted equity settled options and warrants. The cost of
equity settled transactions is measured by reference to the fair value at the
date on which they were granted and is recognised as an expense over the
vesting period, which ends on the date the recipient becomes fully entitled to
the award. Fair value is determined by using the Black-Scholes option
pricing model.
In valuing equity settled transactions, no account is taken of any service and
performance conditions (vesting conditions), other than performance conditions
linked to the price of the shares of the Company (market conditions). Any
other conditions which are required to be met in order for the recipients to
become fully entitled to an award are considered to be non-vesting conditions.
Market performance conditions and non-vesting conditions are taken into
account in determining the grant value.
No expense is recognised for awards that do not ultimately vest, except for
awards where vesting is conditional upon a market or non-vesting condition,
which are vesting irrespective of whether or not the market or non-vesting
condition is satisfied, provided that all other performance or service
conditions are satisfied.
At each reporting date before vesting, the cumulative expense is calculated;
representing the extent to which the vesting period has expired and
management's best estimate of the number of equity instruments that will
ultimately vest. The movement in the cumulative expense since the previous
reporting date is recognised in profit and loss, with a corresponding entry in
equity.
Where the terms of the equity-settled award are modified, or a new award is
designated as replacing a cancelled or settled award, the cost based on the
original award terms continues to be recognised over the original vesting
period. In addition, an expense is recognised over the remainder of the new
vesting period for the incremental fair value of any modification, based on
the difference between the fair value of the original award and the fair value
of the modified award, both as measured on the date of the modification. No
reduction is recognised if the difference is negative.
Where an equity-based award is cancelled (including when a non-vesting
condition within the control of the entity or employee is not met), it is
treated as if it had vested on the date of the cancellation, and the cost not
yet recognised in profit and loss for the award is expensed immediately. Any
compensation paid up to the fair value of the award at the cancellation or
settlement date is deducted from equity, with any excess over fair value being
treated as an expense.
Segmental reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the Board of Directors, which has been identified as the
Chief Operating Decision Maker. The Board of Directors is responsible for
allocating resources and assessing performance of the operating segments in
line with the strategic direction of the Company.
Critical accounting judgements and estimates
The preparation of these consolidated financial statements in accordance with
UK-adopted International Accounting Standards ("IFRS") requires the use of
accounting estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the consolidated financial statements
and the reported amounts of income and expenses during the reporting period.
Although these estimates are based on management's best knowledge of current
events and actions, actual results ultimately may differ from those
estimates. IFRS also require management to exercise its judgement in the
process of applying the Group's accounting policies.
The estimates and assumptions that have a significant risk of causing a
material adjustment to the carrying amounts of the assets and liabilities
within the next financial year are addressed below.
Exploration and evaluation expenditure
In accordance with the Group's accounting policy for exploration and
evaluation expenditure, after obtaining licences giving legal rights to
explore in the project area, all exploration and evaluation costs for each
project are capitalised as exploration and evaluation assets.
The exploration and evaluation assets for each project are assessed for
impairment when such facts and circumstances suggest that the carrying value
of the assets may exceed the recoverable amount.
The directors have assessed the Group's gold Projects in Mali and Côte
d'Ivoire that are not part of the joint venture agreements and determined that
they remain prospective. Accordingly, the directors have determined to
continue to maintain these licences and explore ways for the Group to advance
these prospective areas most effectively. Accordingly, no impairment review
has been conducted on these assets.
The directors have assessed the Group's Bougouni Lithium Project in Mali,
taking into account the Preliminary Feasibility Study and the recently
announced Study Update. This project continues to be evaluated and has not
yet entered into development; there is no indication of impairment.
Accordingly, no impairment review has been conducted on these assets.
The Group's exploration activities and future development opportunities are
dependent upon maintaining the necessary licences and permits to operate,
which typically require periodic renewal or extension. In Mali and Côte
d'Ivoire, the process of renewal or extension of a licence can only be
initiated on expiry of the previous term and takes time to be processed by the
relevant government authority. Until formal notification is received there is
a risk that renewal or extension will not be granted.
As detailed in the Operational Review, at the date of these financial
statements, the Group's key exploration licences are current. As detailed in
note 7, the total carrying value of the exploration and evaluation assets at
31 March 2022 was £11.4 million (2021: £9.0 million). The Group complies
with the prevailing laws and regulations relating to these licences and
ensures that the regulatory reporting and government compliance requirements
for each licence are met.
Valuation of warrants and share options
In accordance with the Group's accounting policy for equity settled
transactions, all equity settled share-based payments are measured at fair
value at the date of issue. Fair value is determined by using the
Black-Scholes option pricing model based on the terms of the options and
warrants, the Company's share price at the time and assumptions for volatility
and exercise date. The assumptions used to value the options and warrants
are detailed in note 5.
For options awarded to the directors, the award has been considered to be in
relation to their overall contribution to the Group and, accordingly, the
charge has been included within operating costs in the Consolidated Statement
of Comprehensive Income rather than treated as an exploration and evaluation
cost and capitalised against specific projects. For the award of warrants
associated with the raising of funds through the issue of new shares, the
charge has been treated as a share issue expense and offset against the share
premium account.
Recoverability of Intercompany Balances to Subsidiary Undertakings
The Company has outstanding intercompany balances from its directly held
subsidiaries resulting from the primary method of financing the activity of
those subsidiaries. The balances are shown in the Company Statement of
Financial Position. However, there is a risk that the subsidiaries will not
commence sufficient revenue generating activities and that the carrying amount
of the intercompany balances will, therefore, exceed the recoverable amount.
Under the requirements of IFRS 9 management has run various scenarios on the
expected credit loss of the Company's intercompany balances, including the
project being put into operation, the project being sold and the project
collapsing. Management has updated its calculations reflecting additional
amounts advanced to its subsidiaries for work on its lithium and gold projects
during the year, the reduced the risk of credit loss given improvements since
last year in the financial, lithium and gold markets and the reduced risk of
project collapse following the granting of the mining license. At 31 March
2022 a credit loss provision of £681,000 is held against amounts due from
subsidiaries (2021: £877,000).
Adoption of New and Revised Standards
The Group has adopted all of the new or amended Accounting Standards and
interpretations issued by the International Accounting Standards Board
("IASB") that are mandatory and relevant to the Group's activities for the
current reporting period.
New standards and interpretations not applied
At the date of authorisation of these consolidated financial statements,
certain new standards, amendments and interpretations to existing standards
have been published but are not yet effective and have not been adopted early
by the Group. These are listed below. The Board anticipates that all of the
pronouncements will be adopted in the Group's accounting policies for the
first period beginning after the effective date of the pronouncement. The
amendments to the standards noted below are not expected to have a material
impact on the Group's consolidated financial statements.
Standard Details of amendment / New Standards and Interpretations Annual periods beginning on or after
IAS 1 Presentation of Financial Statements Amendments to IAS 1 Presentation of Financial Statements to specify the Deferred until no earlier than 1 January 2024
requirements for classifying liabilities as current or non-current.
IAS 1 Presentation of Financial Statements Amendments to IAS 1 Presentation of Financial Statements to specify the 1 January 2023
requirements for disclosure of accounting policies.
There are other standards and amendments in issue but not yet effective, which
are not likely to be relevant to the Group which have therefore not been
listed.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022
1. SEGMENTAL REPORTING
The operations and assets of the Group in the year ended 31 March 2022 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 2022,
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 2022 West Africa
Gold Lithium
£ £ £ £
Administrative expenses 538,625 866 1,164 540,655
Share based payments 342,876 - - 342,876
Finance charge 19,556 - - 19,556
Loss for the year 901,057 866 1,164 903,087
At 31 March 2022
Other receivables 5,769 - - 5,769
Cash and cash equivalents 949,850 38,481 57,184 1,045,515
Trade and other payables (100,959) - (305,382) (406,341)
Intangible assets - exploration and evaluation expenditure - 2,410,787 11,442,403
9,031,616
Property, plant and equipment - - 3,309
3,309
Net assets at 31 March 2022 854,660 2,449,268 12,090,655
8,786,727
2. LOSS BEFORE TAX
The loss before tax from continuing activities
is stated after charging:
Group Group
Year ended Year ended
31 March 2022 31 March 2021
£ £
Fees payable to the Company's auditor 40,000 35,000
Share based payments (note 5) 342,876 77,979
Directors' salaries and fees 167,980 115,014
Employer's National Insurance 5,980 5,672
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 2022 31 March 2021
£ £
Audit services
- statutory audit of parent and consolidated accounts 40,000 35,000
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 2022 31 March 2021 31 March 2022 31 March 2021
Number Number Number Number
Average number of employees (including directors): 19 18
4 4
The remuneration expense for directors of the Company is as follows:
Year ended Year ended
31 March 2022 31 March 2021
£ £
Directors' remuneration 167,980 115,014
Directors' social security costs 5,980 5,673
Total 173,960 120,687
In addition to the amounts included above, £79,469 (2021: £62,496) of the
directors' remuneration cost has been treated as Exploration and Evaluation
expenditure.
Directors' salary and fees year ended Share based payments
31 March 2022 year ended Total
31 March year ended
2022 (see note 5) 31 March
2022
£ £ £
Bernard Aylward (a) 132,449 222,793 355,242
Charles Joseland 45,000 1,164 46,164
Robert Wooldridge 45,000 44,798 89,798
Qingtao Zeng (b) 25,000 2,549 27,549
247,449 271,304 518,753
Directors' salary and fees year ended Share based payments
31 March 2021 year ended Total
31 March year ended
2021 (see note 5) 31 March
2021
£ £ £
Bernard Aylward (a) 96,510 - 96,510
Charles Joseland 35,000 - 35,000
Robert Wooldridge 27,250 - 27,250
Qingtao Zeng (b) 18,750 - 18,750
177,510 - 177,510
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 2022 and received fees of £97,449 (2021: £76,094). These
fees are included within the remuneration figure shown for Bernard Aylward.
b 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 year ended 31 March 2022 and received fees of £27,136 (2021:
£10,595).
4. LOSS PER SHARE
Basic loss per share is calculated by dividing the 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:
Loss Weighted average number of shares Basic loss per share (pence)
£
Year ended 31 March 2022 (903,087) 15,809,383,877 0.0057
Year ended 31 March 2021 (623,370) 11,529,513,459 0.0054
Diluted loss per share is calculated by dividing the loss attributable to
ordinary equity holders of the parent by the weighted average number of
ordinary shares outstanding during the year plus the weighted average number
of ordinary shares that would be issued on conversion of all the dilutive
potential ordinary shares into ordinary shares. Options in issue are not
considered diluting to the loss per share as the Group is currently loss
making. Diluted loss per share is 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 2022 31 March 2021
Share options outstanding Number Number
Opening balance 205,000,000 205,000,000
Issued in the year 45,000,000 -
Closing balance 250,000,000 205,000,000
Year ended Year ended
31 March 2022 31 March 2021
Performance share rights outstanding Number Number
Opening balance - -
Issued in the year 175,000,000 -
Closing balance 175,000,000 -
Year ended Year ended
31 March 2022 31 March 2021
Warrants outstanding Number Number
Opening balance 285,355,663 205,000,000
Issued in the year - 389,282,755
Exercised in the year (80,355,663) (308,927,092)
Closing balance 205,000,000 285,355,663
Options and performance share rights outstanding for each of the directors at
the year-end are outlined below:
Exercisable between Bernard Aylward Robert Wooldridge Qingtao Zeng Charles Joseland
8 May 2017 - 8 May 2022 25,000,000 12,500,000 - -
8 May 2018 - 8 May 2023 12,500,000 6,250,000 - -
8 May 2019 - 8 May 2024 12,500,000 6,250,000 - -
20 Nov 2017 - 20 Nov 2022 - - 5,000,000 -
20 Nov 2018 - 20 Nov 2023 - - 2,500,000 -
20 Nov 2019 - 20 Nov 2024 - - 2,500,000 -
18 April 2019 - 18 April 2024 - - - 3,333,334
18 April 2020 - 18 April 2025 - - - 3,333,333
18 April 2021 - 18 April 2026 - - - 3,333,333
6 November 2021 30,000,000 - - -
To be determined (Note 1) 40,000,000 - - -
To be determined (Note 2) 75,000,000 - - -
27 Aug 2021 - 27 Aug 2026 - 15,000,000 7,500,000 -
27 Aug 2022 - 27 Aug 2027 - 7,500,000 3,750,000 -
27 Aug 2023 - 27 Aug 2028 - 7,500,000 3,750,000 -
Closing balance 195,000,000 55,000,000 25,000,000 10,000,000
1. Exercisable from date of securing the finance for construction of the
Bougouni mine
2. Exercisable from date of date for first commercial production from
the Bougouni Lithium Project
Included within operating losses is a charge for issuing share options and
making share-based payments of £342,876 (2021: £77,979).
Details of share options outstanding at 31 March 2022:
Date of grant Number of options
Option price
Exercisable between
20 December 2013
13,333,333 0.7
pence 30 Dec 2014 - 30
Dec 2024
20 December 2013
13,333,333 0.7
pence 30 Dec 2015 - 30
Dec 2025
20 December 2013
13,333,333 0.7
pence 30 Dec 2016 - 30
Dec 2026
8 May 2017
72,500,000 0.38
pence 8 May 2017 - 8 May
2022
8 May 2017
36,250,000 0.38
pence 8 May 2018 - 8 May
2023
8 May 2017
36,250,000 0.38
pence 8 May 2019 - 8 May
2024
20 November 2017 5,000,000
0.38 pence 20 Nov 2017 - 20 Nov
2022
20 November 2017 2,500,000
0.38 pence 20 Nov 2018 - 20 Nov
2023
20 November 2017 2,500,000
0.38 pence 20 Nov 2019 - 20 Nov
2024
18 April 2019 3,333,334
0.14-0.25 pence 18 April 2020 - 18
April 2025
18 April 2019 3,333,333
0.14-0.25 pence 18 April 2021 - 18
April 2026
18 April 2019 3,333,333
0.14-0.25 pence 18 April 2022 - 18
April 2027
27 August 2021
22,500,000 0.36
pence 27 Aug 2021 - 27 Aug
2026
27 August 2021
11,250,000 0.36
pence 27 Aug 2022 - 27 Aug
2027
27 August 2021
11,250,000 0.36
pence 27 Aug 2023 - 27 Aug
2028
Details of performance share rights outstanding at 31 March 2022:
Date of grant Number of performance
Option price Exercisable between
share rights
27 August 2021
40,000,000
nil
6 November 2021
27 August 2021
50,000,000
nil
To be determined
27 August 2021
85,000,000
nil
To be determined
Details of warrants outstanding at 31 March 2022:
Date of grant Number of warrants
Option price Exercisable
between
22 May 2017
12,500,000 0.38
pence 22 May 2017 - 22 May
2022
22 May 2017
6,250,000 0.38
pence 22 May 2018 - 22 May
2023
22 May 2017
6,250,000 0.38
pence 22 May 2019 - 22 May
2024
23 November 2018
39,999,999 0.14-0.38
pence 1 March 2019 - 1 March 2024
23 November 2018
50,000,001 0.14-0.38
pence To be determined
23 November 2018
90,000,000 0.14-0.38
pence To be determined
Additional disclosure information:
Weighted average exercise price of share options and warrants:
· outstanding at the beginning of the period
0.35 pence
· granted during the period
0.07 pence
· outstanding at the end of the period
0.25 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
6.0 years
Options and Performance Share Rights issued in the year to 31 March 2022
On 27 August 2021 the Company granted Performance Share Rights of up to
175,000,000 ordinary shares to Bernard Aylward and Mohamed Niare (Country
Manager, Mali).
The Performance Share Rights carry vesting conditions that are linked to
achievement of milestones critical to the development of the Bougouni Lithium
Project as follows:
· Award of mining licence;
· Securing the finance for construction of the Bougouni mine; and
· First commercial production from the Bougouni Lithium Project
Subject to the vesting conditions being satisfied, the holders of the
Performance Share Rights 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 and upon payment by them of the nominal value for the
Ordinary Shares
Performance Share Rights over New Ordinary Shares
Vesting criteria Bernard Aylward Mohamed Niare
Award of mining licence Up to 30 million New Ordinary Shares (capped at value on vesting of £300,000) Up to 10 million New Ordinary Shares (capped at value on vesting of £100,000)
Securing the finance for construction of the Bougouni mine Up to 40 million New Ordinary Shares (capped at value on vesting of £400,000) Up to 10 million New Ordinary Shares (capped at value on vesting of £100,000)
First commercial production from the Bougouni Lithium Project Up to 75 million New Ordinary Shares (capped at value on vesting of £750,000) Up to 10 million New Ordinary Shares (capped at value on vesting of £100,000)
Total Up to 145 million New Ordinary Shares (capped at value on vesting of £1.45m) Up to 30 million New Ordinary Shares (capped at value on vesting of £300,000)
In the event of a change of control of the Company, 50 per cent. of any
unvested Performance Share Rights will vest immediately, provided that the
Company's share price at the time of the change of control exceeds 0.34 pence,
being the share price when the awards were made.
On 27 August 2021, options over Ordinary Shares were granted to Robert
Wooldridge and Qingtao Zeng as set out in the table below. The Options are
exercisable at 0.36 pence per share, with 50 per cent of the Options vesting
immediately and the remaining 50 per cent. vesting in two equal tranches on
the first and second anniversaries of the grant. All unvested options will
vest immediately on a change of control of the Company.
Director Number of Options granted
Robert Wooldridge 30,000,000
Qingtao Zeng 15,000,000
Warrants issued in the year to 31 March 2021
The Company entered into option agreements dated 7 April 2020, 15 July 2020
and 27 October 2020 with Riverfort Global Opportunities PCC Limited and YA II
PN Ltd under which the following warrants were issued:
Date Warrants issued Exercise price
7 April 2020 228,571,428 0.04375 pence
15 July 2020 97,580,016 0.061 pence
27 October 2020 63,131,311 0.09 pence
All of the warrants had been exercised prior to the year end.
6. Taxation
Group Group
Year ended Year ended
31 March 2022 31 March 2021
£ £
Taxation charge for the year - -
Factors affecting the tax charge for the year
Loss from continuing operations before income tax (903,087) (623,370)
Tax at 19% (2021: 19%) (171,587) (118,440)
Losses carried forward not deductible 106,440 103,624
Deferred tax differences 65,147 14,816
Income tax expense - -
The Group has tax losses and other potential deferred tax assets totalling
£2,978,000 (2021: £2,425,000) which will be able to be offset against future
income. No deferred tax asset has been recognised in respect of these losses
as the timing of their utilisation is uncertain at this stage.
7. Intangible Assets
Exploration and evaluation
GROUP £
COST
At 1 April 2020 8,642,568
Additions in the year 541,772
Effects of foreign exchange (220,251)
8,964,089
At 1 April 2021
Additions in the year 2,546,686
Effects of foreign exchange (68,372)
At 31 March 2022 11,442,403
AMORTISATION
At 1 April 2020 and 1 April 2021 and 31 March 2022 -
NET BOOK VALUES
At 31 March 2022 11,442,403
At 31 March 2021 8,964,089
At 31 March 2020 8,642,568
The Company did not have any Intangible Assets as at 31 March 2020, 2021 and
2022.
8. PROPERTY, PLANT AND EQUIPMENT
Plant and machinery
GROUP £
COST
1 April 2020 27,024
Additions in the year 526
Effects of foreign exchange (1,471)
At 1 April 2021 26,079
Additions in the year 1,600
Effects of foreign exchange (47)
At 31 March 2022 27,633
DEPRECIATION
At 1 April 2020 12,475
Depreciation charge 5,825
Effects of foreign exchange (898)
At 1 April 2021 17,402
Depreciation charge 6,922
Effects of foreign exchange
At 31 March 2022 24,324
NET BOOK VALUES
At 31 March 2022 3,309
At 31 March 2021 8,677
At 31 March 2020 14,549
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
2020, 2021 and 2022.
9. SUBSIDIARY UNDERTAKINGS
a. AMOUNTS DUE FROM SUBSIDIARY UNDERTAKINGS
Company Company
31 March 2022 31 March 2021
£ £
Amounts due from subsidiary undertakings 10,785,230 7,916,150
10,785,230 7,916,150
Under the requirements of IFRS 9 management has run various scenarios on the
expected credit loss of the Company's intercompany balances, including the
Project being put into operation, the Project being sold and the Project
collapsing. Management has updated its calculations reflecting:
a) additional amounts advanced to its subsidiaries for work on its
lithium and gold projects during the year;
b) the reduced risk of credit loss given improvements since last year in
the financial, lithium and gold markets; and
c) the reduced risk of project collapse following the grant of the
mining license, assessed at 5% compared to 10% in prior year.
The review has concluded that at 31 March 2022 a credit loss provision of
£681,000 should be held against amounts due from subsidiaries (2021:
£877,000).
b. INVESTMENTS IN 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
Future Minerals SARL International Goldfields (Bermuda) Limited Mali Bamako, Faladi, Mali Univers, Rue 886 B, Porte 487 100% Mining exploration
Mali
Kodal Minerals plc has issued a guarantee under section 479C to its
subsidiary, Kodal Norway (UK) Ltd ("Kodal Norway", company number 08491224) in
respect of its activities for the year ended 31 March 2022 to allow Kodal
Norway to take advantage of the exemption under s479A of the Companies Act
2006 from the requirements of the Act relating to audit of its individual
accounts for the year ended 31 March 2022.
Year ended Year ended
Carrying value of investment in subsidiaries 31 March 2022 31 March 2021
£ £
Opening balance 512,373 512,373
Impairment in the year - -
Closing balance 512,373 512,373
10. OTHER RECEIVABLES
Group Group Company Company
31 March 2022 31 March 2021 31 March 2022 31 March 2021
£ £ £ £
Share issue proceeds receivable - 1,838,895 - 1,838,895
Other receivables 5,769 16,013 5,769 16,013
5,769 1,854,908 5,769 1,854,908
All receivables at each reporting date are current. No receivables are past
due. The Directors consider that the carrying amount of the other
receivables approximates their fair value and there are no expected credit
losses.
11. TRADE AND OTHER PAYABLES
Group Group Company Company
31 March 2022 31 March 2021 31 March 2022 31 March 2021
£ £ £ £
Trade payables 348,505 357,514 44,359 55,401
Other payables 57,836 267,102 56,600 266,451
406,341 624,616 100,959 321,852
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.
12. SHARE CAPITAL
GROUP AND COMPANY
Allotted, issued and fully paid
Note Nominal Value Number of Ordinary Shares Share Capital Share Premium
£ £
At 31 March 2020 9,246,741,119 2,889,606 12,514,604
April 2020 a £0.0003125 1,428,571,429 446,429 202,102
April 2020 b £0.0003125 378,323,379 118,226 14,187
June 2020 c £0.0003125 56,987,211 17,809 2,137
September 2020 d £0.0003125 228,571,428 71,429 28,571
October 2020 e £0.0003125 125,034,486 39,073 40,199
November 2020 f £0.0003125 85,063,264 26,582 27,348
December 2020 g £0.0003125 118,600,205 37,063 38,130
January 2021 h £0.0003125 176,190,315 55,059 56,645
January 2021 i £0.0003125 347,078,879 108,462 111,586
February 2021 j £0.0003125 153,379,428 47,931 74,314
March 2021 k £0.0003125 128,080,136 40,025 68,131
March 2021 l £0.0003125 210,896,619 65,905 114,538
March 2021 m £0.0003125 168,489,949 52,653 91,507
March 2021 n £0.0003125 2,800,000,000 875,000 2,424,075
March 2021 o £0.0003125 48,790,008 15,247 14,515
March 2021 p £0.0003125 31,565,656 9,864 18,545
At 31 March 2021 15,732,363,511 4,916,364 15,841,134
May 2021 q £0.0003125 48,790,008 15,247 14,515
May 2021 r £0.0003125 31,565,656 9,864 18,545
November 2021 s £0.0003125 19,583,212 6,120 58,877
At 31 March 2022 15,832,302,387 4,947,595 15,933,071
a) On 7 April 2020, a total of 1,428,571,429 shares were
issued to Riverfort Global Opportunities PCC Limited and YA II PN Ltd (the
"Investors") in connection with the Equity Sharing Agreement ("ESA"). The
shares issued under the ESA were issued at an average price of 0.04686 pence
per share. Share issue expenses of £20,860 were offset against the share
premium account.
b) On 7 April 2020, a total of 378,323,379 shares were
issued at an issue price of 0.035 pence per share to a number of Directors and
senior management as payment for salaries or fees owed.
c) On 29 May 2020, a total of 56,987,211 shares were
issued at a price of 0.035 pence per share to satisfy payment of certain third
party professional fees.
d) On 7 September 2020, a total of 228,571,428 shares
were issued to the Investors at a price of 0.04375 pence per share in
connection with the exercise of warrants issued in connection with the ESA.
e) On 15 October 2020, the Investors elected to convert
a total amount of $102,352.31 (equivalent to £79,271.86), made up of a
principal amount of US$100,004.40 and accrued interest of $2,347.91, into
125,034,486 ordinary shares at a price of 0.06340 pence per share.
f) On 2 November 2020, the Investors elected to
convert a total amount of $70,358.92 (equivalent to £53,930.11), made up of a
principal amount of $70,000.00 and accrued interest of $358.92, into
85,063,264 ordinary shares at a price of 0.06340 pence per share.
g) On 15 December 2020, the Investors elected to convert
a total amount of $101,160.41 (equivalent to £75,192.53), made up of a
principal amount of $100,000.00 and accrued interest of $1,160.41, into
118,600,205 ordinary shares at a price of 0.06340 pence per share.
h) On 5 January 2021, the Investors elected to convert a
total amount of $150,809.59 (equivalent to £111,704.66), made up of a
principal amount of $150,000.00 and accrued interest of $809.59, into
176,190,315 ordinary shares at a price of 0.06340 pence per share.
i) On 8 January 2021, the Investors elected to convert
a total amount of $300,242.88 (equivalent to £220,048.01), made up of a
principal amount of $300,000.00 and accrued interest of $242.88, into
347,078,879 ordinary shares at a price of 0.06340 pence per share.
j) On 19 February 2021, the Investors elected to
convert a total amount of $169,384.70 (equivalent to £122,244.94), made up of
a principal amount of $150,000.00 and accrued interest of $19,384.70, into
153,379,428 ordinary shares at a price of 0.079701 pence per share.
k) On 17 March 2021, the Investors elected to convert a
total amount of $150,971.51 (equivalent to £108,155.99), made up of a
principal amount of $150,000 and accrued interest of $971.51, into 128,080,136
ordinary shares at a price of 0.084444 pence per share.
l) On 22 March 2021, the Investors elected to convert
a total amount of $250,337.33 (equivalent to £180,443.15), made up of a
principal amount of $250,000 and accrued interest of $337.33, into 210,896,619
ordinary shares at a price of 0.08556 pence per share.
m) On 22 March 2021, the Investors elected to convert a
total amount of US$200,000 (equivalent to £144,160), made up of a principal
amount of US$200,000 and no accrued interest, into 168,489,949 ordinary shares
at a price of 0.08556 pence per share.
n) On 25 March 2021, a total of 2,800,000,000 shares
were issued in a placing at a price of 0.125 pence per share. Share issue
expenses of £200,925 were offset against the share premium account.
£1,838,895 of the proceeds of this share issue were received in April 2022.
o) On 25 March 2021, a total of 48,790,008 shares were
issued to the Investors at a price of 0.061 pence per share in connection with
the exercise of warrants.
p) On 25 March 2021, a total of 31,565,656 shares were
issued to the Investors at a price of 0.09 pence per share in connection with
the exercise of warrants.
q) On 18 May 2021, a total of 48,790,008 shares were
issued to the Investors at a price of 0.061 pence per share in connection with
the exercise of warrants.
r) On 18 May 2021, a total of 31,565,656 shares were
issued to the Investors at a price of 0.09 pence per share in connection with
the exercise of warrants.
s) On 5 November 2021, a total of 19,583,212 shares were
issued pursuant to the Company's agreement with Bambara Resources SARL at
0.3319p per share
13. 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.
14. 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 2022 earned interest of £nil (2021:
£nil). Due to the Group's relatively low level of interest-bearing assets
and the very low interest rates available in the market the Group is not
exposed to any significant interest rate risk.
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.
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 2022
Assets
Other receivables 5,769 - 5,769
Cash and cash equivalents 1,045,515 - 1,045,515
Total 1,051,284 - 1,051,284
Liabilities
Trade and other payables - (406,341) (406,341)
Total - (406,341) (406,341)
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 and
Australian Dollars 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 NOK AUD XOF Total
31 March 2022
Assets
Other receivables 5,769 - - - - 5,769
Cash and cash equivalents 949,850 - - - 95,665 1,045,515
Total 955,619 - - - 95,665 1,051,284
Liabilities
Trade and other payables (64,671) (304,145) - (36,289) (1,236) (406,341)
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.
15. RELATED PARTY TRANSACTIONS
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 2022, the Company paid fees to SP Angel of £30,000
(2021: £240,381). The balance due to SP Angel at 31 March 2022 was £nil
(2021: £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 2022 and received fees of £97,450 (2021: £76,094).
These fees are included within the remuneration figure shown for Bernard
Aylward in note 3. The balance due to Matlock at 31 March 2022 was £nil
(2021: £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 2022 and received fees of £27,136 (2021: £10,595). The
balance due to Geosmart at 31 March 2022 was £14,528 (2021: £nil).
16. CONTROL
No one party is identified as controlling the
Group.
17. CAPITAL COMMITMENTS
The Group had capital commitments to
exploration and evaluation expenditure of £nil (2021: £nil).
18. EVENTS AFTER THE REPORTING PERIOD
On 4 May 2022 the Company announced that it has raised £3,000,000 (before
expenses) via a subscription for 130,142,857 shares and an oversubscribed
placing of 941,285,712 shares at a price of 0.28 pence per Placing Share (the
'Placing'). The funds raised will support Kodal in the continuing
development and preparation for financing and construction of its flagship
Bougouni Lithium Project in Mali.
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