REG - Metals Exploration - Final Results for the Year Ended 31 December 2024
19/05/2025 07:00
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RNS Number : 1425J Metals Exploration PLC 19 May 2025
19 May 2025
METALS EXPLORATION PLC
Final Results for the Year Ended 31 December 2024
Metals Exploration plc (AIM: MTL) (the "Company" or the "Group"), a gold
production, exploration and development company with assets in the Philippines
and Nicaragua, announces its final audited results for the year ended 31
December 2024.
The financial information set out in this announcement does not comprise the
Group's statutory accounts for the years ended 31 December 2024 or 31 December
2023. The financial information has been extracted from the statutory accounts
of the Group and the Company for the years ended 31 December 2024 and 31
December 2023. The auditors reported on those accounts; the 31 December 2024
and 31 December 2023 reports were unqualified and did not contain a reference
to any matters to which the auditors drew attention by way of emphasis without
qualifying their report and did not contain a statement under either Section
498 (2) or Section 498 (3) of the Companies Act 2006. The statutory accounts
for the year ended 31 December 2023 have been delivered to the Registrar of
Companies, whereas those for the year ended 31 December 2024 will be delivered
to the Registrar of Companies following the Company's annual general meeting.
To access a full version of the 2024 annual report, please go to the Company
website investor centre webpage.
ABOUT METALS EXPLORATION
Gold producer, explorer and developer
Metals Exploration plc ("Metals Exploration", "MTL", the "Company", or the
"Group") is a gold production, exploration and development company with assets
in the Philippines and Nicaragua. In the Philippines it operates the Runruno
gold mine located 250 kilometres north of Manila in the mineral rich Nueva
Viscaya province, on Luzon island. In Nicaragua, the Company is aiming to
develop the La India gold project.
Group vision & mission statement
The Group's vision is to be the most admired gold producer in the Philippines
and Nicaragua. Our mission is to enhance the lives of our people and local
communities through the responsible management of our natural resources, to
build a multi-project business and to deliver performance that stakeholders
are proud of.
Well-defined values embedded into the business processes and structures along
with consistent leadership actions and behaviours provide the foundation for
corporate culture and its subsequent success. As a responsible mining company,
we ensure that our Group's core values reverberate across all aspects of our
business and represent the way we do business.
PRODUCTION AND FINANCIAL HIGHLIGHTS
FY2024 FY2023 % CHANGE
GOLD PRODUCTION (ounces)
83,897 oz 85,194 oz Down 1.5%
AVERAGE GOLD RECOVERY (% of head grade)
90.5% 88.7% Up 2.0%
LOST TIME INJURIES
NIL NIL N/A
SALES REVENUE (US$ MILLIONS)
$191.1 $166.7 Up 14.6%
OPERATING PROFIT (US$ MILLIONS)
$53.5 $29.2 Up 83.2%
Adjusted EBITDA (US$ MILLIONS)
(EBITDA less impairments)
$98.7 $82.6 Up 19.5%
FREE CASH GENERATED FROM OPERATIONS (US$ MILLIONS)
$96.7 $72.3 Up 33.7%
NET DEBT (US$ MILLIONS)
$6.8 $23.6 Down 71.2%
TOTAL GOVERNMENT TAXES & FEES (US$ MILLIONS)
$19.8 $18.2 Up 8.7%
TOTAL COMMUNITY PROGRAMME EXPENDITURE (US$ MILLIONS)
$1.9 $1.4 Up 35.7%
CHAIRMAN'S STATEMENT
Dear Shareholder,
2024 was a pivotal year for Metals Exploration, which saw us deliver record
performance at Runruno whilst implementing our strategy of pursuing M&A
opportunities to ensure the continuation of cashflow generation once
production at Runruno ceases. This was executed through the successful
acquisitions of Condor Gold Plc ("Condor") and the YMC Group ("YMC").
First, we must start with the strong performance at Runruno, which produced
83,897 oz of gold in 2024, exceeding the upper end production guidance for the
year. This resulted in record gold revenue of $191.1 million, and record free
cashflow of $96.7 million, supported by the strong gold price seen in 2024.
The Company is currently debt free, a significant milestone for us.
I am also very pleased to report to shareholders that for the year ended 31
December 2024, your Company achieved net adjusted earnings before interest,
tax, depreciation, amortisation and impairment charges of US$98.7 million
(2023: US$82.6 million). The excellent financial results are a testament to
the impressive work conducted by the management team, led by our CEO, Darren
Bowden, and the entire workforce in the Philippines.
The continued excellent performance at Runruno has allowed us to deliver on
our strategy of executing M&A opportunities to ensure continued value for
our shareholders through sustained cashflow generation. The Board has a clear
growth plan in place and is implementing this strategy with the longevity of
the business in mind. In December 2024, the Company announced its intention to
acquire Condor, owner of the La India gold project in Nicaragua. This
acquisition was completed in January 2025. In August 2024 we also acquired
YMC, which holds the Abra tenements in the Philippines. Metals Exploration is
well placed to unlock significant value from these assets whilst aiming to
replicate the operational success that we have demonstrated at Runruno.
The acquisition of Condor presents an exciting new growth opportunity, with
our immediate focus on La India. We have a defined development path to near
term production, and the project recently held its 'ground-breaking' ceremony.
Work is underway, in accordance with the approvals that are already in place,
with first gold pour targeted for the end of 2026. This target was recently
reaffirmed in March 2025 when we announced an agreement to purchase a gold ore
processing and concentrating plant, which will provide us with the ability to
fast track the La India Project, saving considerable development time in not
having to order long-lead time items. The target is to have the plant
dismantled, packaged and in transit from its current location in Alaska to the
La India project area in Nicaragua by the end of August 2025.
La India will provide cashflow at an opportune time, replacing that from
Runruno as the Company approaches the end of mining operations there. We will
be utilising existing and future cash generated from Runruno to fund the
construction of the La India project, thereby reducing dilution for
shareholders. Target annual production from La India for FY2027 is 145,000 oz.
La India is a district scale opportunity, spanning 587km(2) with several
high-priority exploration targets beyond the main La India deposit. The
district provides significant upside potential, and we are targeting a 5 Moz
gold district through further exploration drilling and the development of
additional prospects.
The acquisition of YMC enables the team to leverage its Philippine in-country
knowledge, experience and strong technical team. The Abra area is located c.
200km north of Runruno and the extensive exploration tenement holds multiple
prospective targets for both gold and copper in a geological region of scale
and historical production. The exploration team has identified two drill-ready
targets, Manikbel and Domenglay, which will be drilled once local community
agreements have been finalised. Our plan is to drill four initial holes at
Manikbel as part of the objective to compile an initial resource estimate by
Q4 2025.
Post period, in January 2025, we announced a further exciting potential growth
opportunity, an exploration target near the Runruno mine, called Dupax, which
could provide an extension to ore processing operations at Runruno beyond the
life of the current Runruno mine. The Dupax prospect is a Volcanogenic Massive
Sulphide ("VMS") target with rock samples indicating very high grades of up to
15.47 g/t gold and 7% copper, with minimal drilling expected to bring it into
a resource-ready basis for operation. Dupax could utilise the existing Runruno
process plant infrastructure and be re-purposed to accommodate a different
type of ore feed.
As we have previously stated, our goal in the Philippines is to be the most
admired gold producer in the country. Our achievements in-country have been
recognised through the receipt of a number of national and local awards,
including awards from the Philippine Government. This includes receiving the
Presidential Mineral Industry Environmental Award in the Surface Mining
Operation Category 2024 for the third consecutive year, as well as the Safest
Surface Mining Operation Award 2024. The Presidential award is the highest
Government mining award attainable in the Philippines, demonstrating the hard
work that the team has been carrying out on environmental protection, health
and safety management, and social/community development. This is in line with
our promise of enhancing the lives of local people and the communities in
which we operate.
At the beginning of April 2025, we were delighted to have released our 2024
Sustainability Report, which covers our sustainability performance in the
Philippines for the year ended 31 December 2024. The report, produced by the
operator of Runruno, FCF Minerals, is now in its fifth edition. The Board
recently took the decision to update the report from biennial to an annual
publication, in order to further enhance transparency and accountability. The
Sustainability Report provides a comprehensive overview of the work that FCF
Minerals is conducting to create net positive outcomes for all of our
stakeholders.
2024 was a very successful year for Metals Exploration, marking the start of a
new chapter for the Company. 2025 will see construction commencing at La
India, continued high levels of production at Runruno, the production of an
initial resource estimate for Abra and further exploration at Dupax. As we
begin our operations in Nicaragua, we are keen to build and maintain
relationships with the local communities within the project area, as well as
at a wider regional and national scale, so that we can replicate the approach
that we have taken in the Philippines. We will continue to invest in
infrastructure development, education, training programmes and livelihood
assistance, and promote inclusive economic growth through our policy of
prioritising local procurement and employment opportunities.
We are in an excellent position to capitalise on the historic record gold
price environment. This will support the Company's desire to generate large
amounts of free cashflow to fund the development of La India and exploration
programmes at Abra and Dupax, whilst minimising shareholder dilution.
We have entered 2025 with a strong balance sheet, record free cash flow, and
exciting exploration and development prospects, giving us confidence in our
ability to deliver sustainable value. The Board and I would like to take this
opportunity to thank our entire team for their hard work throughout the year.
I would also like to thank you, our shareholders, for your ongoing support. We
look forward to updating you with developments throughout the course of the
year.
Steven Smith, Non-Executive Chairman
16 May 2025
CHIEF EXECUTIVE OFFICER'S STRATEGIC REPORT
Metals Exploration is pleased to report on another excellent year with record
gold sales revenue that led the Group to become debt free in June 2024. Once
again, the Group closed out the year with gold production exceeding its
published, and re-stated, upper gold production guidance for the year.
Of great significance was the acquisition of 100% of Condor Gold plc and its
Nicaraguan gold assets (which completed in January 2025), being the Company's
first acquisition outside of the Philippines. This acquisition is the first
step in transforming the Group into a multi-project company. The Group's
continued robust business fundamentals will provide a strong platform from
which to advance the development of the Nicaraguan gold assets with the aim to
have the La India project in production prior to the end of gold production
from the Runruno mining license area.
Most importantly, the Group continues to create a net-positive impact for its
stakeholders and local communities. Our environmental, sustainability and
social programmes continue to be of a very high standard, ensuring the Company
continues to be accountable, transparent, and responsible in its corporate
purpose.
SAFETY AND HEALTH
Safety remains at the core of the Group's business. During the year there were
no material safety and health incidents throughout all Group operations. A
safe working culture is actively promoted by a dedicated occupational safety
and health department and is embraced across the Group and by all departments.
All staff recognise their individual responsibilities for their own safety and
the safety of others.
Evidence of adhering to these values is the excellent safety record that the
Group's employees and contractors have achieved. In the period from December
2016 to March 2025 the Group achieved in excess of 25 million man-hours with
no lost time incidents occurring. A lost time injury occurred on 30 March
2025, however, all staff and contractors are immensely proud of the Company's
remarkable safety achievements. All employees and contractors are to be
congratulated on this outstanding performance.
CORPORATE
Financial Year 2024 ("FY2024") Overview
Operational profit was US$53.5 million (FY2023: US$29.2 million) following
gold production for FY2024 of 83,897 ounces, slightly lower than FY2023's
record production of 85,194 ounces, notwithstanding a lower head grade of 1.34
g/t compared to 1.42 g/t in FY2023. The gold production was achieved with
average gold recovery improving to 90.5% from 88.7% in FY2023. The
all-in-sustaining-cost ("AISC") for FY2024 was US$1,135 per ounce (FY2023:
US$1,126 per ounce), which was slightly above the lower FY2024 AISC guidance
of US$1,125 per ounce.
During FY2024 the rising gold price resulted in an average sales price of
US$2,312 per ounce (FY2023: US$1,944 per ounce). Total sales for FY2024 were
US$191.1 million (FY2023: US$166.7 million).
During FY2024 the cash generated from operations was US$96.7 million (FY2023:
US$72.3 million). This enabled the Group to complete the repayment of the
Group's external debt in June 2024.
Financial Performance
Operations during FY2024 produced a strong financial outcome for the Group
with records achieved for several key metrics. A reconciliation of Operating
Profit to an alternate non-IFRS compliant performance measure is set out
below:
2024 2023
US$'000s US$'000s
Operating profit before income tax 34,640 119,555
Addback:
Interest 1,739 9,217
Depreciation and amortisation 53,274 51,518
EBITDA 89,653 180,290
Add Back:
Impairment reversals, net* 9,065 (97,738)
EBITDA and Impairments 98,718
82,552
* Impairment reversals, net
In December 2018 the Group raised a significant impairment charge against the
value of its property, plant and equipment ("PPE") based upon the then
expected recoverable amount of the Runruno project's discounted value in use
of the Runruno operations using cash flow projections over the remaining
expected life of mine ("LOM").
In FY2023, based on the then current assumptions, including the ongoing
historically high gold prices and the increased productivity of the Runruno
mine, the Group, in accordance with IAS 36 -- Impairment of Assets, booked an
impairment reversal of US$100 million. No impairment reversal has been booked
in FY2024.
Group Debt
Finalisation of the Group's senior and mezzanine debt facilities was
protracted due to an inability to effect the elevation of the mezzanine debt
to a fully secured status due to a dispute over the applicable interest rate
and several disputed debt covenant breaches. During June 2024, the Group
entered into full and final settlements with the lenders, including payment of
the final principal/interest and agreed appropriate lender legal fees.
During FY2024, senior and mezzanine debt payments totalled US$27.2 million
(FY2023: US$35.0 million). Included in the US$27.2 million debt payments was
$3.38 million loan interest.
In addition, as part of the settlement, the Revolving Credit Facility was
terminated in conjunction with the Runruno Holdings Limited ("RHL") Buy Back
and RHL Production fee agreements (refer note 35), with no termination fee
payable to either lender.
On 28 November 2024, MTL entered into a bridging loan agreement with its
second largest shareholder, Drachs Investments No. 3 Limited ("Drachs")
whereby Drachs provided a £5,500,000 loan (the "Loan") to be utilised in
connection with the acquisition of Condor. The Loan principal and interest was
repaid in March 2025 by a transfer of 94,730,594 new ordinary shares of
£0.0001 each in the capital of Metals Exploration ("Ordinary Shares") from
Treasury at a price of 6p per ordinary share.
RHL 18.6% Shareholding buy-back
During FY2024, the Company completed the off-market acquisition of 100% of
RHL's then 18.6% shareholding in the Company at 5p per share, being
393,513,302 Ordinary Shares for a total outlay of £19,675,665, as part of a
wider full and final settlement with RHL in relation to various finance
agreements and other matters. In the short-term these shares have been held in
treasury.
PHILIPPINES - RUNRUNO MINE
Mining Operations
Total material moved during FY2024 was above budget at 11.3Mt (million tonnes)
(FY2023: 12.4Mt).
Mining operations during FY2024 were conducted in Stages 3, 4 and 5; while
in-pit backfilling of Stage 1 was completed. Backfilling operations continue
in Stage 2. In-pit backfilling will reduce closure and environmental
restoration costs upon the eventual closure of the mine. Based on the current
mine schedule it is expected that mining of ore will be completed by December
2026.
All relevant permits for operations remain in place for the Runruno mine.
Gold Reserve Statement
Given the approaching end of mine life at Runruno there has been no
calculation of an updated ore reserve statement.
The most recent gold reserve statement was issued in February 2022, based on
data as at 1 August 2021, as follows:
Table 1 - Ore Reserve estimate - published in February 2022
Reserve Ore Gold
Category Mt g/t Moz
Proved - - -
Probable 9.9 1.35 0.43
Total 9.9 1.35 0.43
Inferred resources included in LOM model pit
Inferred material 9.9 1.11 0.02
Using a Surpac block model, the Group modelled an internal estimation of the
subsequent depletion of ore due to mining that has occurred since the above
model was calculated (the period 1 August 2021 to 31 December 2024). The
estimated resource depletion and the resulting depleted reserve statement
(note that these calculations have not been independently verified) as at 31
December 2024 are:
Table 2 - Ore depletion estimate
Reserve Ore Gold
Category Mt g/t Moz
Estimated ore mined from August 2021 to December 2024
6.7 1.37 0.29
Table 3 - December 2024 Depleted Ore Reserve estimate
Reserve Ore Gold
Category Mt g/t Moz
Proved - - -
Probable 3.2 1.32 0.14
Total 3.2 1.32 0.14
Inferred resources included in LOM model pit
Inferred material 0.5 1.13 0.02
Process Plant
Plant performance in FY2024 maintained high levels of gold recovery from both
the flotation and BIOX® circuits. During FY2024, the Group achieved an
overall gold recovery of 90.5%, an improvement upon FY2023 which was 88.7%.
Total gold produced in FY2024 was 83,897 ounces compared to 85,194 ounces in
FY2023, with the reduction in ounces produced reflecting the lower head grade
during FY2024.
During FY2024, operational improvements focussed on improving the ability to
control BIOX® temperatures. No further significant gains in production
efficiencies are anticipated.
Unplanned downtime during FY2024 resulted mainly from tails line failures and
repairs to the SAG mill girth gear, conveyor belts and return water line.
Overall unplanned downtime has reduced through the Group's programme of
proactive maintenance and improved powerline maintenance.
Notwithstanding the above, the process plant operated above design throughput
with the following points of note:
· The processing plant operated above design throughput at 2.15Mt of
ore (FY2023: 2.10Mt);
· The overall plant recovery increased to 90.5% (FY2023: 88.7%),
attributed to:
· The improved sulphur oxidation in the BIOX® circuit to 83.8% (FY2023:
76.1%), and consequently
· An improved CIL recovery of 92.9% (FY2023: 91.6%); and
· The maintenance department continued to promote a proactive
maintenance programme, managing power outages, the residue discharge lines and
other external disturbances effectively.
As at year end, in order to comply with IAS 36 - Impairment of Assets, there
remains a US$50 million impairment charge against the Runruno property, plant
and equipment assets, giving a net book value of approximately US$94
million. No additional impairment reversal was made in 2024 due to the IAS
36 ceiling. However, the directors consider the true value of these assets to
be significantly higher than this, especially if the Company's exploration
efforts at Dupax are successful and the existing Runruno process plant
infrastructure can be re-purposed to accommodate a different type of ore feed.
This would enable the Runruno infrastructure to be utilised well beyond the
impending completion of mining and processing of FTAA licence ore. Indeed, the
Company's Runruno fixed assets are insured to the value of US$155 million.
Residual Storage Impoundment
The Group's tailings products are delivered to a residual storage impoundment
("RSI") structure that has been designed and is being constructed to
international standards that relate to water storage dams. The standard to
which the RSI is being constructed far exceeds international standards that
apply to traditional mining tailings dam structures.
The final scheduled lift to the RSI has been completed, with construction of
the in-rock final spill-way underway. This final in-rock spillway will ensure
the RSI has the capacity to cope with a 'Probable Maximum Flood' event.
The RSI remains in compliance with local guidelines and local development
requirements, although it has not reached the final design stage of being
capable of successfully coping with a 'Probable Maximum Flood' event. The
in-rock final spillway is expected to be completed during FY2026.
The performance of the RSI is continuously monitored by independent
international consulting engineers.
Government Industry Awards
During Q4 2024, the Group was awarded the following Philippine Government
awards:
· Presidential Mineral Industry Environmental Award (PMIEA) in the
Surface Mining Operation Category 2024, awarded for the third consecutive
year.
· Safest Surface Mining Operation Award 2024.
These awards are given to mining companies in recognition of outstanding
levels of dedication, initiatives and innovations in the pursuit of excellence
in environmental protection, health & safety management and
social/community development. Winning the Presidential award is the highest
Government mining award attainable in the Philippines.
PHILIPPINES - EXPLORATION PROJECTS
ABRA
As noted in our 2023 Annual Report, it was the Group's strategy to investigate
acquiring other mining opportunities in the Philippines. A number of
Philippines located projects were reviewed and in January 2024 the Company
agreed to acquire a controlling interest in YMC, subject to lender and
shareholder approval. Following receipt of these approvals the Company
completed the acquisition of the Abra project in August 2024.
YMC holds an extensive exploration tenement in the Abra region of Luzon,
Philippines. The purchase price was US$1.6 million (offset by approximately
US$1.1 million cash held by the YMC group). A condition of the purchase was
that options to subscribe for up to 41 million new Ordinary Shares were issued
to replace YMC employee shares relinquished for no sale consideration. The
continuity of employment conditions attaching to the 41 million MTL options
mirror those that were attached to the YMC employee shares. Refer note 14.
The Abra tenement covers 16,200 hectares on Luzon, Philippines, approximately
200km north of the Company's Runruno mine, in the Cordillera region, which is
a prolific gold belt in the Philippines, with proven mineral endowment, having
produced over 40Moz of gold historically.
To date the Company has undertaken project mapping, geochemistry and
geophysical surveys, while consulting extensively with the local communities.
These activities have outlined two key highly prospective copper-gold porphyry
targets, Manikbel and Donenglay.
The primary prospect, Manikbel, shows a strong correlation between copper (Cu)
with encouraging assay results from rock samples (1% Cu from several outcrops)
centered on a magnetic low. This geophysical and geochemical alignment is a
significant indicator of a potential porphyry copper deposit. The presence of
these anomalies, combined with mapped porphyry-type intrusives and
hydrothermal alterations, underscores the high potential for a major porphyry
copper system in this area. The system accounting for the geochemistry
overlaying the geophysics is 2.5km by 0.8km.
Drill programmes for the Manikbel and Donenglay target areas have been
designed, however, the Company has deferred the start of these programmes to
late Q2 or early Q3 2025 to allow the National Commission for Indigenous
Peoples to further advance their consultation activities with the impacted
local communities.
DUPAX
The Dupax project is 20km trucking distance from the Runruno mine and has the
potential to extend ore processing operations at Runruno after ore feed from
the Runruno FTAA (Financial and Technical Assistance Agreement) tenement is
exhausted. The potential ore feed from Dupax could utilise the existing
Runruno process plant infrastructure and be re-purposed to accommodate a
different type of ore feed.
The Dupax tenement covers approximately 3,100 hectares. The project area hosts
a VMS target, at surface, with historical rock sample grades of up to 15.47
grammes per tonne (g/t) gold, and 7% Cu. Following initial mapping and
geochemistry surveys, drill targets have been outlined. It is expected that
the tenement will soon be issued, with drilling commencing in Q3 2025.
NICARAGUA - CONDOR GOLD PLC ACQUISITION
In January 2025 the Company completed the acquisition of 100% of Condor. Refer
to Note 36 for more information on the acquisition. The Condor group of
companies hold an extensive tenement package in the La India region,
approximately two hours drive from the Nicaraguan capital city, Managua.
Drilling of these areas have outlined a 2.2 Moz gold resource (refer Condor
announcements).
Since taking control of Condor, Metals Exploration has embarked on an
aggressive fast track programme of developing the La India project with the
aim to achieve gold production in Q4 2026.
Activities that have taken place in the post year end period include:
· The recruitment of key Spanish speaking executives to join the
Nicaraguan in-country management team, including the General Manager, VP
Sustainability and Project Manager - Construction;
· Establishing relationships with key government and community
representatives;
· Agreeing the process and compensation to relocate all local
artisanal miners from the La India project area;
· Ongoing review of the current gold reserve and resource statements;
· Designing a gold resource extension and verification drill
programme and issuing tenders to undertake the proposed drill programme, which
commenced in Q2 2025;
· Purchasing a fit for purpose second hand gold ore processing and
concentrating plant (including crushers, conveyors, grinding ball mill,
gravity circuit, elution, smelting equipment and laboratory), including all
component and construction drawings. This plant is being shipped to site from
North America and is scheduled to land in Nicaragua in Q3 2025;
· Designing and finalising the process facility flowsheet;
· Appointing GRES Engineering of Brisbane, Australia as the La India
project engineers who have commenced the detailed design for construction of
the La India project;
· Appointing Tierra Group to design and construct the La India
tailings facility; and
· Issuing in-country contracts for the La India earthworks, concrete
and fuel supply.
OUTLOOK
Annual production guidance for FY2025 for the Runruno mine has been set at
70,000 - 75,000 ounces at an AISC of between US$1,225 - US$1,325 per ounce.
FY2025 operations are expected to maintain the general operational results
produced during FY2024, such that free cash flow is maintained from a stable
consistent level of mining and gold production.
The Group intends to actively pursue development of the La India project in
Nicaragua with the aim to commence commercial production there by the end of
FY2026.
Exploration activities will be conducted in both the Philippines and Nicaragua
with the objective of defining new resources.
Finally, the Group will continue to pursue acquisition of additional
exploration and development opportunities, particularly in the Philippines.
Darren Bowden, Chief Executive Officer
16 May 2025
Competent Persons' Statement
The information contained in this report that relates to the Runruno Gold
Reserves Estimate, issued in February 2022, was compiled by Paola Tuyor of
Metals Exploration and reviewed and verified by Grant Walker of Xenith
Consulting. Mr Walker is a Member of The Australasian Institute of Mining
and Metallurgy and is a Competent Person as defined by the JORC Code, 2012
Edition, having five years' experience that is relevant to the style of
mineralisation and type of deposit described in the Report.
Mr Darren Bowden, a director of the Company, a Member of the Australasian
Institute of Mining and Metallurgy and who has been involved in the mining
industry for more than 25 years, has compiled, read and approved the technical
disclosure in this regulatory announcement in relation to the Philippines
projects in accordance with the AIM Rules - Note for Mining and Oil &
Gas Companies.
The technical and scientific information in this report in relation to the
Nicaraguan projects was reviewed, verified and approved by Andrew Cheatle,
B.Geo., a former director of Condor Gold plc, and Gerald D. Crawford, B.E.,
the previous Chief Technical Officer of Condor Gold plc, each of whom is a
competent person in accordance with the AIM Rules - Note for Mining and Oil
& Gas Companies.
Forward Looking Statements
Certain statements relating to the estimated or expected future production,
operating results, cash flows and costs and financial condition of Metals
Exploration plc and the Group, planned work at the Company's projects and the
expected results of such work contained herein are forward-looking statements
which are based on current expectations, estimates and projections about the
potential returns of the Group, industry and markets in which the Group
operates in, the Directors' beliefs and assumptions made by the Directors.
Forward-looking statements are statements that are not historical facts and
are generally, but not always, identified by words such as the following:
"expects", "plans", "anticipates", "forecasts", "believes", "intends",
"estimates", "projects", "assumes", "potential" or variations of such words
and similar expressions. Forward-looking statements also include reference to
events or conditions that will, would, may, could or should occur. Information
concerning exploration results and mineral reserve and resource estimates may
also be deemed to be forward-looking statements, as it constitutes a
prediction of what might be found to be present when a project is actually
developed.
These statements are not guarantees of future performance or the ability to
identify and consummate investments and involve certain risks, uncertainties
and assumptions that are difficult to predict, qualify or quantify. Among the
factors that could cause actual results or projections to differ materially
include, without limitation: uncertainties related to raising sufficient
financing to fund the planned work in a timely manner and on acceptable terms;
changes in planned work resulting from logistical, technical or other factors;
the possibility that results of work will not fulfil projections/expectations
and realise the perceived potential of the Company's projects; uncertainties
involved in the interpretation of drilling results and other tests and the
estimation of gold reserves and resources; risk of accidents, equipment
breakdowns and labour disputes or other unanticipated difficulties or
interruptions; the possibility of environmental issues at the Company's
projects; the possibility of cost overruns or unanticipated expenses in work
programs; the need to obtain permits and comply with environmental laws and
regulations and other government requirements; fluctuations in the price of
gold and other risks and uncertainties.
The Company expressly disclaims any obligation or undertaking to disseminate
any updates or revisions to any forward looking statements contained herein to
reflect any change in the Group's expectations with regard thereto or any
change in events, conditions or circumstances on which any such statements are
based unless required to do so by applicable law or the AIM Rules.
AUDIT COMMITTEE REPORT
Dear Shareholders,
I am pleased to report to you on behalf of the Audit Committee.
The Group's established financial reporting structures have continued to
perform effectively in the year, and the Committee has continued to oversee
the proper maintenance of these structures. The Group's robust framework of
internal controls facilitated a smooth external audit process, helping to
ensure the integrity of the 2024 Annual Report.
Aims of the Audit Committee
The overall aim of the Audit Committee is to assist the Board in discharging
its duties regarding the financial statements, to ensure that a robust
framework of accounting policies is in place and enacted, and to oversee the
maintenance of proper internal financial controls and risk management. The
Committee monitors the integrity of the Financial Statements of the Interim
and Annual Reports and formal announcements relating to the Group's financial
performance, including advising the Board that the Annual Report taken as a
whole is fair, balanced and understandable.
The Committee reviews, in conjunction with the Group's auditors, significant
financial reporting issues, key judgements and accounting policies and
disclosures in financial reports, reviews the effectiveness of the Group's
internal control procedures and risk management systems and considers how the
Group's internal audit requirements shall be satisfied, making recommendations
to the Board. It reviews the independent auditor's audit strategy and
implementation plan and its findings in relation to the Annual Report and
Interim Financial Statements. It monitors the relationship with the Group's
independent auditor including the consideration of audit fees and
independence.
Membership and attendance
The Audit Committee consisted of myself, Andrew Chubb, as the Chair, together
with two other Non-Executive Directors.
The Committee aims to formally meet at least twice each year. The external
audit team and the Chief Financial Officer are invited to attend meetings of
the Committee, and I am satisfied that we were presented with papers of good
quality, and in a timely manner. Attendances at committee meetings during the
year were:
Audit committee member/qualifications Eligible to attend Attended
Andrew Chubb (B.Law (Hons)) - Chair 2 2
Tim Livesey (B.Sc (Hons) Geology) 2 2
Robert Marshall (B.Maths, FCA) (appointed 20 November 2024)
- -
Nick von Schirnding (B.A-LLPB)
(appointed 18 March 2024, resigned 21 March 2025)
2 2
The external auditors attended all committee meetings held during the year.
Key responsibilities
The main responsibilities of the Audit Committee are contained within its
terms of reference that have been approved by the Board and are available on
our website. The terms of reference and the key responsibilities of the Audit
Committee are set out below:
· Maintain the integrity of the annual and interim
financial statements of the Company and review any significant reporting
matters they contain;
· Review the Annual Report and Accounts and other financial
reports;
· Maintain the accuracy and fairness of the Company's
financial statements, including through ensuring compliance with applicable
accounting standards and the AIM Rules;
· Review the adequacy and effectiveness of the Company's
internal control environment and risk management systems;
· Review the adequacy and effectiveness of the Company's
Whistleblowing policies;
· To consider the need for, and to oversee, internal
audit activities; and
· Oversee the relationship with, and the remuneration of,
the external auditor, reviewing their performance and advising the Board
members on their appointment.
Activities of the Audit Committee during the year
On behalf of the Board, the Audit Committee has closely monitored the
maintenance of internal controls and risk management during the year. Key
financial risks are reported during each Audit Committee meeting, including
developments and progress made towards mitigating these risks.
The Committee received regular reports from the Chief Financial Officer
throughout the year and was satisfied with the effectiveness of internal
controls and risk mitigation. The Committee also received and considered
reports from the external auditor, PKF Littlejohn LLP ("PKF"), which included
control findings relevant to their audit.
Significant reporting matters
The Audit Committee has reviewed management's assessment of critical
accounting judgements and key sources of estimating uncertainty disclosed in
note 2.
As part of the review, the Committee considered whether:
· There are any material or sensitive omissions from the
Annual Report narrative;
· The Annual Report narrative is a true and balanced
reflection of events and performance in the year;
· There is consistency throughout the Annual Report and
Financial Statements; and
· There is a clear explanation of key performance
indicators, their link to performance and strategy and equal prominence of
statutory performance measures.
The Committee is satisfied that management have considered these matters
appropriately and that a reasonable conclusion has been reached, and
appropriate disclosure made, based on the information available to the Group.
The Committee is not aware of any significant failings or weaknesses in the
Company's existing system of internal controls. The Committee has determined
that an internal audit function is not an appropriate mechanism for the
Company in the context of the Company's current level of complexity of its
operations.
Going concern
The Directors consider the continuing strong operating and financial
performance of the Group provides ample evidence that there currently is no
material uncertainty surrounding the Company and the Group's ability to
continue as a going concern.
Accordingly, the Company and Group financial statements are prepared on a
going concern basis. Further detail regarding the reasoning behind this
conclusion can be found in the Directors' Report on page 33.
External audit
The Audit Committee considers various matters when reviewing the appointment
of an external auditor including their performance in conducting the audit and
its scope, terms of engagement including remuneration and their independence
and objectivity. Details of auditor's fees are included in the notes to the
financial statements.
PKF were re-appointed as Group and Company auditor at the Company AGM in June
2024. The Audit Committee has confirmed it is satisfied with PKF's industry
experience, knowledge of the Company and its effectiveness as external
auditor. PKF does not provide any non-audit services to the Group or the
Company. As such the Audit Committee has recommended the reappointment of PKF
at the forthcoming annual general meeting.
The year ahead
In light of the Group's expansion into a new jurisdiction, Nicaragua, post the
period end, the Audit Committee's focus is to ensure that a robust framework
of internal controls and risk management exists throughout the Group. As the
Group will be embarking on a significant construction project in a new sphere
of operations and taking over an existing listed company, proper reporting
procedures, monitoring, controls and risk management in relation to Nicaragua
will be a key focus of both the Audit Committee and the executive management
of the Company as we seek to move La India into construction and ultimately
production. Financial risk management will continue to be closely monitored,
and any potential risks mitigated where appropriate.
The Audit Committee will also continue its close dialogue with the Company's
external auditors, highlighting any emerging financial risks or matters facing
the Company throughout the coming year and ensuring that the Company's
financial reporting mechanisms continue to be constantly updated in line with
best practice and subjected to scrutiny and challenge.
Andrew Chubb, Chair of the Audit Committee
16 May 2025
REMUNERATION COMMITTEE REPORT
Dear Shareholders,
It is my pleasure to report to you on behalf of the Remuneration Committee.
Throughout 2024 the Committee has continued to focus on aligning reward with
performance and providing appropriate incentives. The full and final
settlement of all debt issues in June 2024 confirmed the debt free status of
the Company. Achieving this outcome removed operational covenants within the
Group's debt documents that required lender approvals of any equity incentive
schemes. Thus, the Company, in August 2024, finally established a long-term
incentive programme (LTIP) to align directors and senior management with
shareholders' interests, while providing operational flexibility to pursue
strategic opportunities to grow the Group's activities. Due to restrictions on
issuing these options arising from ongoing corporate matters, the LTIP options
were finally issued in February 2025.
Aims of the Remuneration Committee
The Committee's overall aim is to align employee remuneration with the
successful delivery of long-term shareholder value. Our core principles that
enable us to achieve this goal are:
1. To offer competitive remuneration to executive management that attracts,
retains and motivates highly skilled individuals;
2. To align remuneration packages with performance-related metrics that mirror
our short and long-term business strategies; and,
3. To encourage accountability in the workplace and link reward with success.
The Group currently operates the following remuneration framework:
· Annual salary and associated benefits;
· Annual discretionary bonuses that are granted following the Committee's
assessment of performance against certain key business indicators; and
· Long-term incentive equity awards.
Membership and attendance
The Remuneration Committee consisted of myself, Tim Livesey, as the Chair,
together with two other Non-Executive Directors.
The Committee aims to formally meet at least twice each year. Attendances at
Committee meetings during the year were:
Remuneration committee member Eligible to attend Attended
Tim Livesey - Chair 2 2
Andrew Chubb 2 2
David Cather (appointed 1 November 2024) - -
Nick von Schirnding (appointed 18 March 2024 - resigned 21 March 2025) 1 1
No Director is involved in any decisions relating to their own remuneration.
None of the Committee has any personal financial interest, conflicts of
interests arising from cross-directorships, or day-to-day involvement in
running the business.
Terms of reference
The terms of reference of the Remuneration Committee, that have been approved
by the Board and are available on our website, are set out below:
· Determine and propose to the Board the Company's overall
remuneration policy and monitor the efficacy of the policy on an ongoing
basis;
· Determine and propose to the Board the remuneration of
the Executive Directors and senior management;
· Determine the objectives and headline targets for any
performance-related bonus or incentive schemes;
· Monitor, review and approve the remuneration framework
for other senior employees; and,
· Review and approve any termination payment, such that
these are appropriate for both the individual and the Company.
Executive remuneration package and service contracts
There was no change to the CEO's base remuneration and no material changes to
other executive remuneration packages during the year. The Group's
remuneration framework includes payment of an annual salary and short term
bonus and, as noted above, as from February 2025 a long-term incentive option
issue. Executives are provided with life assurance cover equivalent to two
times their base salary (capped at £500,000). There are no
pension/superannuation schemes in place for executives or non-executive
directors. Termination of executive contracts are subject to a three month
notice period or an in lieu base salary termination payment.
Management Incentive Programme ("MIP") - 2024 Performance
The CEO and other senior executives are eligible to participate in a MIP. The
MIP awards an annual short-term bonus based on performance achieved against
pre-determined key performance indicators ("KPIs"). Given the Group priority
on being cash generative to reduce external debt, the FY2024 KPIs were focused
on operations and productivity performance.
The following table details the KPIs adopted by the Committee in its
assessment of the Group's performance and the quantum of the MIP bonus, which
were applied to FY2024.
Standard target weighting
Performance indicator 2024 Rating 2024 Performance
Zero LTIs recorded; TRIFR < 0.95, no material FTAA/RSI/Environmental
incidents
Environmental/Safety/Health and compliance 25% Exceptional
Free cash generated before debt principal/interest/fees Maximum target achieved Free cash generated 182% of budget.
35%
Maximum target achieved Average gold recovery 107.0% of budget
Gold Recovery v budget 25%
Standard target threshold exceeded
Total Expenditure v budget 5% Actual spend 96% of budget
Target threshold achieved Actual mined material 95.2% of budget
Total Material Movements v budget 5%
Maximum target achieved
Mill Throughput v plant design 5% Actual throughput 122.9% of design
Glossary:
KPI - Key performance indicator; LTI - Lost time injury; TRIFR - Total
reportable injury frequency rate
FTAA - Financial and Technical Assistance Agreement; RSI - Residual storage
impoundment
Of the total MIP bonus, 15% is satisfied by an issue of new Ordinary Shares,
at an issue price equal to the 14-day VWAP market value following the date the
MIP bonus was recommended by the Remuneration Committee.
In February 2025, the Company issued 4,350,077 new Ordinary Shares to
executives as part of the 2024 MIP bonus award. Also in February 2025, a
further 9,213,853 new Ordinary Shares were issued to the CEO, Darren Bowden,
in relation to the 2022 and 2023 MIP awards.
Non-executive director remuneration
All non-executive directors are appointed under a letter of engagement that
sets out the terms, responsibilities and remuneration attaching to their
appointment. The remuneration of non-executive directors is determined by the
full board.
Director remuneration
The Directors' remuneration for the year was as follows:
Fees/salary Short-term performance bonus Share- based payments Total
Year ended 31 December 2024 US$ US$
US$ US$
Darren Bowden(1) 800,917 751,703 - 1,552,620
Executive director/CEO
Nick von Schrinding 91,565 - 121.703 213,268
Independent Chairman
Steven Smith(2) 394,771 - - 394,771
Interim Chairman & Non-executive director
Tim Livesey(1) 95,257 - 5,371 100,628
Independent non-executive director
Andrew Chubb 70,324 - - 70,324
Non-executive director
David Cather 12,786 - - 12,786
Independent non-executive director (appointed 1 November 2024)
Rob Marshall 12,786 - - 12,786
Independent non-executive director (appointed 1 November 2024)
Guy Walker 47,857 - - 47,857
Non-executive director (resigned 3 September 2024)
1,526,263 751,703 127,075 2,405,041
Total
Fees/salary Short-term performance bonus Share based payments
Year ended 31 December 2023 US$ US$ Total
US$ US$
Darren Bowden(1) 805,610 (-) - 805,610
Executive director/CEO
Steven Smith(2) 70,117 - - 70,117
Interim Chairman & Non-executive director
Tim Livesey 84,764 - 20,947 105,710
Independent non-executive director
Andrew Chubb 62,326 - 5,210 67,537
Non-executive director
Guy Walker 73,545 - - 73,545
Non-executive director
David Cather(1) 70,117 - 5,210 75,327
Independent Chairman (resigned 18 September 2023)
1,166,479 - 31,367 1,197,846
Total
Notes:
¹ Includes consulting fees paid to private consulting companies.
(2) Fees paid in accordance with a Services Agreement between the Company and
MTL (Luxembourg) Sarl.
No element of the Directors' remuneration (other than the share options and
shares issued as part of the MIP bonus) is currently related to the Company's
future share price.
Director interests in shares
As at FY2024 year end, directors' interests in Ordinary Shares in the Company
were:
Director Opening balance Acquired during year Disposed during the year Closing balance
Darren Bowden 8,257,355 - - 8,257,355
David Cather 6,600,000* _ - 6,600,000
Andrew Chubb - 6,600,000 2,500,000 4,100,000
Tim Livesey - 6,600,000 - 6,600,000
Rob Marshall 7,820,928* - - 7,820,928
* Shares held at date of appointment
Director interests in options
Directors' beneficial interests in unissued ordinary shares granted by the
Company under share options as at FY2024 year-end are as follows:
Director Option expiry date and exercise price Opening balance Issued during year Exercised during the year Options held at year end
Andrew Chubb 6,600,000 - (6,600,000) -
Non-executive director On or before
28 October 2024 at nominal share value
Tim Livesey 6,600,000 - 6,600,000 -
Independent non-executive director On or before
17 June 2025 at nominal share value
Nick von Schirnding - 6,600,000(a) - 6,600,000
Independent Chairman On or before (2,200,000 fully vested)
28 June 2029 at nominal share value
Darren Bowden On or before 27 August 2031 at nominal share value - 9,500,000(b) - 9,500,000
CEO
Vesting/exercise conditions
a) Upon Mr von Schirnding's resignation as a director on 21 March 2025,
the Board used its discretion to fully vest the remaining 4,400,000 options
held by Mr von Schirnding.
b) These options were issued as a condition to the purchase of YMC and
provided the option-holder remains an employee of a Group company these
options will vest on 31 December 2025.
The relevant Non-Executive Directors' independence is not considered to be
compromised due to holding these options as the level of share options are
deemed to be sufficiently immaterial.
The year ahead/Long-term incentive programme
As noted in previous Remuneration Reports, under the Group's debt finance
agreements material changes to the Group's remuneration policies and the level
of executive and senior management remuneration required the approval of both
of the Group's two lenders. Despite this, the lenders recognised the need to
introduce a LTIP. The vesting hurdles applicable to an initial LTIP had been
formulated and agreed with the major lender in December 2022. Unfortunately,
the Company was unable to propose the establishment of an LTIP to shareholders
until the full repayment of all debt had been confirmed.
Thus, at the general meeting of shareholders in August 2024, the establishment
of an LTIP and an initial issue of options under this LTIP was approved by
shareholders. The issue of 318 million options under the LTIP occurred in
February 2025. Further annual LTIP awards may be made in the future as is
common within AIM quoted mining companies.
The annual discretionary bonus KPIs for FY2025 will be adjusted to take into
account the Group's operational footprint expansion into Nicaragua, combined
with the need to advance the Philippine exploration targets as an integral
element of planning for the potential closure of the Runruno mine as it heads
towards the end of mining activities.
Tim Livesey, Chair of the Remuneration Committee
16 May 2025
SUSTAINABILITY REPORT
Notwithstanding Philippine Government requirements that the Group issue a
biennial in-depth sustainability report, the Group recently took the decision
to move from biennial to an annual publication. In April 2025, a
sustainability report covering the activities and outcomes for the 2024
calendar year, titled 'Green and Gold: Prosperity and Sustainability in
Harmony' was issued. Shareholders are recommended to access this report, and
the last biennial sustainability report, titled 'Charting a Legacy', issued in
May 2024, covering the 2022 and 2023 calendar years, from the Company website
at www.metalsexploration.com/esg
(https://metalsexploration.com/esg/esg-overview/) .
The reports are prepared in accordance with the Global Reporting Initiative
(GRI) Standards and provides stakeholders with a transparent account and
comprehensive information on our sustainability performance and governance and
climate-risk related disclosures.
RISK MANAGEMENT
The Group's Code of Conduct enumerates its ethics. Operational procedural
standards, aligned with legal requirements, have been established for all
activities we undertake. Operations are certified with ISO 14001:2015
compliance and the Group is a member of the Chamber of Mines of the
Philippines "Towards Sustainable Mining" initiative. The reporting of any
infractions, particularly on safety concerns and potential environmental
non-compliance, is participatory and cuts across all employees regardless of
position.
COMMUNITY AND SOCIAL DEVELOPMENT
As part of our commitment to enriching the lives of local communities, the
Group allocates 1.5% of direct mining and processing costs to be applied in
its Social Development and Management Program ("SDMP"). Through the SDMP the
Group partners with local communities to identify and implement impactful
socio-economic programmes that drive sustainable development in our host and
neighbouring areas. Implementation of the SDMP passes through a series of
community consultations to identify appropriate socio-economic programmes. The
Group's SDMP programmes are focused on:
· Health;
· Education;
· Capacity building;
· Community development and empowerment;
· Enterprise development, improvement and networking;
· Infrastructure development; and
· Preservation and respect of socio-cultural values.
Total community programme expenditure for FY2024 was US$1.9 million, up from
US$1.4 million for FY2023 programmes. The reach of the programmes extends to
assist the residents of the Barangay of Runruno and surrounding Barangays, the
Municipality of Quezon and the Province of Nueva Vizcaya. The Company expects
to provide similar support to local communities once the LA India project in
Nicaragua is in production.
The Community Relations Department, the community interface arm of the Group,
maintains strong partnerships with various national agencies and local
governments from Barangay to Provincial level. They are primarily engaged in
managing the implementation of identified and prioritised projects within the
mandated SDMP and other programmes under them as a component of the Group's
commitment to its Corporate Social Responsibility ("CSR").
ANTI-SLAVERY AND HUMAN TRAFFICKING
Our anti-slavery policy reflects our commitment to acting ethically and with
integrity in all our business relationships and to implementing and enforcing
effective systems and controls to ensure slavery and human trafficking are not
taking place anywhere in our supply chains. Our Company abides by various
legislation and frameworks, including the UK Modern Slavery Act 2015, the
Philippine Anti-discrimination Act of 2011, Republic Act 7877, the Philippine
Anti-Sexual Harassment Act of 1995, and the United Nations Guiding Principles
on Business and Human Rights.
SAFETY AND HEALTH
A safety and health programme is created each year to establish a robust
foundation for the implementation of measures that prioritise the well-being
and protection of workers. This ensures that workers are provided with a just,
safe, and humane working environment. It is updated annually to ensure that
the programme remains up-to-date and sufficiently addresses the evolving
hazards and risks of the operations.
In FY2024 there were no material safety and health incidents throughout the
project site. A safe working culture is actively promoted by a dedicated
occupational safety and health department. The Group suffered its first lost
time injury on 30 March 2025, however prior to that it had accumulated in
excess of 25 million man-hours with no lost time incidents.
HUMAN CAPITAL
Employees are the lifeblood of our operations. Without their dedication to
exemplary performance, and a work ethic that aligns with the values of our
Company, the growth and development that the Group has achieved through the
years will not be attained. It is therefore crucial for our Company to invest
in our people to be able to power the business and continue operations, as
well as support them in their journey towards a rewarding career and
achievement of success that ripples through their lives and their communities.
Our policy is to recruit and retain the most talented and high-performing
people who share the Group's commitment to sustainable development. Great care
is taken in every step of the employment process with an emphasis on equality,
diversity, work-place safety and employee welfare.
ENVIRONMENT
The Group is active in promoting and implementing "responsible mining"
practices. It is a leader in the Philippine mining industry in its
environmental and environmental rehabilitation practices, having received
numerous government/industry awards in this area over a number of years. The
Group implements innovative technologies to enhance the efficiency and
effectiveness of existing programmes across all operational facets, including
our environment-related projects. Use of technologies like low-cost
hydroseeding technology combined with a zero waste initiative, and maintaining
a tree nursery and a clonal tree nursery research facility, are essential for
the sustainability of our environmental restoration efforts.
WASTE MANAGEMENT
Safe management of tailings and other waste products are crucial to the safety
of our communities and longevity of our operations. All tailings are sent to
the residual storage impoundment facility (RSI) which has been constructed to
international standards applicable to water storage dams, which are much
higher than international standards applicable to mining tailings.
While the Group has a strong waste management record to date, it understands
the risks associated with tailings management are a particular concern to our
stakeholders and the Group is determined to maintain high levels of safe
tailings management.
WATER MANAGEMENT
Mining activities require a large and constant supply of water, and the Group
recognises that access to safe water is a fundamental right for local
communities. We continue to prioritise effective water and wastewater
management as part of our environmental initiatives. Our commitment to
environmental stewardship reflects our dedication to balancing economic
success with environmental responsibility.
The Group operates a dynamic water management programme to avoid possible
impacts on the downstream water quantity, quality and aquatic environment. The
ASTER technology contained in the final segment of the process plant destroys
all cyanide species from tailings before the tailings are pumped into the RSI.
The Group aims to reduce its monthly average water consumption by at least 2%
per annum. This target was achieved during FY2024.
REFORESTATION AND REHABILITATION
The Group acts positively to reduce the potential environmental impacts of its
operations. It undertakes this obligation through immediate and continuous
rehabilitation activities, by the re-greening of disturbed areas, the
establishment of protection forests and the provision of habitat for wildlife
within the FTAA area.
These programmes demonstrably improve the environment within and surrounding
the Group's operations and are designed for beautification, stabilisation and
to off-set green-house gas emissions and the impacts of the Group's
operations. Through its various programmes, the Group has been responsible for
planting over 2 million endemic and cash crop trees.
A total of 6.62 hectares within the FTAA area were rehabilitated during FY2024
(FY2023: 5.21 hectares) to bring the total area rehabilitated since
commencement of mining to 56.56 hectares.
In addition, the Group participates in the National Forest Programme and the
National Greening Programme. During FY2024, the Group was responsible for a
further 155 hectares of reforestation (FY2023: 195 hectares).
As a manifestation of our unwavering and exemplary commitment, the Group has
received the Presidential Mineral Industry Environmental Award (PMIEA) in the
Surface Mining Operation Category for the third consecutive year.
CLIMATE-RELATED REPORTING
Climate change adaptation and mitigation encompass our approach to managing
the impacts, risks, and opportunities associated with climate change, as well
as the integration of these strategies into our business operations. This is
particularly relevant as mining activities can be substantial contributors to
climate change. The Group is committed to taking responsibility for its
actions and strives to minimise, if not eliminate, any negative environmental
impacts. Climate change commitments and initiatives are fully aligned with the
Group's Environmental Policy statements and it adheres to the Guidelines on
Resource Conservation and sets clear objectives, targets, and programmes aimed
at reducing GHG emissions, thereby supporting the effective implementation of
ISO 14001 Standards.
Task Force on Climate-related Financial Disclosures (TCFD)
The Group is committed to managing the impact of its operations on the planet
and the impact of climate change on its operations, particularly to ensure
continued operational and financial resilience in a changing world and
marketplace. The Group understands the importance of these matters to its
investors, partners, and regulatory authorities and considers the 4 TCFD
pillars of disclosure in the below.
TCFD PILLAR - Governance
Board Oversight
The Group recognises the threats and impacts posed by climate change and its
role in the transition to a low-carbon economy. The Group aims to align our
efforts to contribute to global climate goals and targets. One of the
ambitious goals of the Company is to become the first carbon neutral mining
operator in the Philippines. Development in Nicaragua will utilise modern
methods and equipment to minimise the Company's climate impact.
Management Oversight
Management is involved in identifying and evaluating risks that may affect the
operations. These risks are constantly assessed to prevent potential
environmental, economic and sociocultural impacts to our stakeholders. Within
the Group's operations the use of renewable energy is supported by purchasing
our power from a hydroelectric power company. In addition, the Group has
adopted methods and technologies that increase the efficiency of its
operations without causing significant harm to the environment. The Group
initiates efforts to include stakeholders in its programs and initiatives in
mitigating and addressing the impacts of climate change.
TCFD PILLAR - Strategy
Identified climate-related risks and opportunities
The identified key climate-related threats include increased risk of potential
emergencies such as earthquakes, floods, typhoons and dam failures. In
response to these identified threats, the Group has developed an emergency
control plan (ECP) to ensure preparedness for these potential emergency
situations. The ECP is shared with local communities to facilitate a planned
effective and timely response, aiming to mitigate threats and minimise
consequences to life, environment, and property.
Impact of climate-related risks and opportunities on strategy and planning
The Group has integrated climate scenarios into its strategic operational
planning and review process. Climate scenarios are identified based on
reliable publications such as Philippine Atmospheric, Geophysical, and
Astronomical Services Administration (PAGASA)'s Climate Change in the
Philippines
(https://www.pagasa.dost.gov.ph/information/climate-change-in-the-philippines)
study, MGB's Landslide and Flood Susceptibility Map
(https://sheltercluster.s3.eu-central-1.amazonaws.com/public/docs/Risk%20Map%20Region%20II%20Nueva%20Vizcaya%20Kasibu%20Landslide%20Flood.jpg)
, and the University of the Philippines' Project Nationwide Operational
Assessment of Hazards (https://noah.up.edu.ph/) . The Board strongly
encourages senior management to regularly assess principal and emerging
climate-related risks. Any changes in risks and newly identified opportunities
are reported to and discussed at the Board level, and subsequently
incorporated into the overall strategy and planning. Development in Nicaragua
will be undertaken utilising the best and most relevant information available
to help minimise climate impacts.
Resilience of strategy
Management has incorporated climate scenarios into the Group's strategic
operational planning and review process. The Board encourages senior
management to assess principal and emerging climate-related risks on a regular
basis. Any changes in risks identified are to be reported to and discussed at
Board level and incorporated into the strategy and planning of the Group.
TCFD Pillar - Risk Management
Processes for identifying and assessing climate-related risks
The Group's efforts to mitigate GHG emissions and identify climate-related
risks are fully embedded in its corporate policy, project and procurement
evaluation criteria, and overall risk management. This ensures consistent
application and management throughout our value chain.
Processes for managing climate-related risks
The Board and senior management co-ordinate the Group's analysis and planning
of the effects of climate change on our business. The Board regularly
discusses the impact of any risks identified through the organisation. The
mitigation of GHG emissions and identification of climate related risks has
been integrated into our corporate policies to ensure it is consistently
applied and managed. The Group continuously monitors and reports key
performance indications relating to environmental matters.
Process for integrating climate-related risks into the overall risk management
New or evolving climate change risks identified by both senior and local
management are reported to and discussed at Board level and incorporated into
the strategy, planning and climate policy of the Group. Where possible, plans
to mitigate the effect of climate change on our operations and our local
communities will be integrated into the Group's environmental management and
social and labour plans.
TCFD Pillar - Metrics and Targets
Metrics used by the Group
The Group annually sets targets to move forward towards its net-zero ambition.
Targets are set for the reduction of water, diesel, and electricity
consumption, and waste generation. Further, a target to increase reforestation
and restoration is also set.
Greenhouse Gas Emissions
The Group is committed to measuring and reporting our scope 1 and 2 greenhouse
gas emissions as noted below. Scope 3 emissions are not currently measured
given the size and life of Group's mine.
Targets used by the Group
At year end the Group has only the single Philippine located operation, with a
remaining life of mine of approximately two/three years. Annual targets are
set to reduce the Group's impacts to support the net-zero ambition for this
project. These targets are monitored and reviewed monthly and are being set
based on the previous year's effort and performance. In 2024, we achieved
positive results, with above target reductions in water, electricity and
diesel consumption, residual and hazardous waste generation, and GHG
emissions. There was an above target increase in the flora diversity species
index covering the FTAA area. Targets will be set for the LA India project as
this Nicaraguan project develops.
GREENHOUSE GAS EMISSIONS
Scope 1 GHG emissions from operations refers to direct activities that are
owned or controlled by the Group; primarily emissions from fuel consumed by
haul trucks, other vehicles and stationary plant at the Runruno project.
The calculation of GHG emissions is based on activity data, i.e. monitoring of
fuel consumption rates, fuel composition, etc multiplied by industry produced
conversion factors.
Scope 2 GHG emissions are indirect emissions from the generation of purchased
electricity consumed by operations that are owned or controlled by the Group.
Group Scope 2 emissions have been calculated using Philippine government
recorded supplier-specific emission factors. Within our operations we support
the use of renewable energy by purchasing our electricity from a hydroelectric
company.
These Scope 1 and 2 GHG emissions are regularly reported to the Philippines
mines department. Scope 3 emissions are not measured.
The Group's total carbon footprint (generated outside of the UK) was measured
as follows:
2024 CO(2)e Tonnes 2023 CO(2)e Tonnes
Scope 1 GHG emissions 16,983 21,429
Scope 2 GHG emissions 64,663 74,737
Operational GHG emissions Total 81,646 96,166
Total CO(2)e Tonnes per Total CO(2)e Tonnes per
ounces gold produces ounces gold produced
Operational GHG Emissions Intensity 0.97 1.13
The Company has successfully reduced its energy consumption by 100.79 TJ,
leading to a corresponding decrease in our overall greenhouse gas (GHG)
emissions. This achievement is attributed to our enhanced operational
practices, which include the use of energy efficient motors and the
implementation of scheduled preventive maintenance services.
ENVIRONMENTAL MONITORING
The Group maintains very high compliance standards and employs industry
leading initiatives to ensure the highest environmental performance. The Group
conducts regular internal comprehensive environmental monitoring to ensure
compliance with its licence provisions, Philippine Regulations and any
appropriate contemporary standards. This monitoring extends to reference sites
outside the immediate operational area. The Government undertakes quarterly
monitoring by an independent, community based Multipartite Monitoring Team;
while an independent third-party consultant group specialising in environment
monitoring services is also engaged to independently monitor the Group's
environmental performance.
LEGAL COMPLIANCE
High compliance standards are practiced across the Group. A large site-based
team is dedicated to managing the high levels of compliance mandated within
the Philippines. The site is regularly audited with upwards of 60 audits,
verifications or reviews of its operations undertaken annually by the various
regulators. The wide range of permits to operate in the Philippines are
secured from more than a dozen Government agencies and regulators.
CORPORATE GOVERNANCE STATEMENT
The Board has chosen to adopt the Quoted Companies Alliance's Corporate
Governance Code for small and mid-size quoted companies (the 'QCA Code').
The QCA Code identifies ten principles that focus on the pursuit of medium to
long-term value for shareholders without stifling the entrepreneurial spirit
in which the Company was created. The principles of the QCA Code are embedded
into the Company's internal reporting and governance structures to the extent
expected of a company of Metals Exploration's size, stage of development and
resources.
The Company's governance structures are further governed by the Company's
Articles of Association ('Articles') together with relationship agreements
(the 'Relationship Agreements') with the Company's two largest shareholder
groups, Candy Investments S.à r.l, Candy Venntures S.à r.l and MTL
(Luxembourg) S.à r.l. ('MTL Lux') (together the 'Candy Group') and Drachs
Investments No3 Limited ('Drachs').
The Relationship Agreements regulate the relationship between the Company and
its largest shareholders to ensure, amongst other things, that the Company and
its business shall be managed for the benefit of the shareholders of the
Company as a whole. The Relationship Agreements grant each shareholder group
the right to appoint one director, for so long as it (together with its
successors or assignees) continues to hold more than 15% of the voting rights
of the Company.
During the year a revolving credit facility (the 'RCF') with the Company's
lenders, MTL Lux and Runruno Holdings Limited ('RHL') terminated upon
settlement of all debt matters. Previously, the RCF required the prior consent
of both these lenders (together with its successors or assignees) for the
Company to undertake a number of operational decisions. Consequently, the
termination of the RCF has removed a number of corporate and operational
restrictions that previously existed.
The Company's current compliance, or otherwise, with each of the ten
principles of the QCA Code are detailed below.
Principle Disclosure
1 Establish a strategy and business model which promotes long-term value for The Board's strategy and corporate plan is to:
shareholders
- Provide shareholders with capital growth potential, delivered by
developing mineral projects into profitable mines.
- Undertake cost-effective and precise exploration on those
targets considered most likely to deliver future positive shareholder returns.
- Respect the indigenous culture of the exploration and
development areas and to promote social and economic development for the
traditional custodians.
- Manage the inherent value of its mining properties portfolio by
delivering an efficient mining operation.
- Conduct operations in a safe and environmentally responsible
manner to industry best practice standards.
- Offer employment opportunities to those who live in the project
area.
- Reward loyal and dedicated employees who drive the Company's
objectives.
- Consider acquisition opportunities to foster additional
long-term capital growth potential.
This Annual Report sets out key risks and uncertainties that may represent
challenges to the successful execution of the Company's strategy and business
model, and how such risks and uncertainties are managed by the Company. These
risks are set out in the Directors Report and notes 33 and 34 to the financial
statements.
2 Seek to understand and meet shareholder needs and expectations The Company engages openly with its shareholders via announcements made via a
regulatory information service, its corporate website and other social media
platforms and investor webinars. The Board encourages investors to
participate, if possible, at its Annual General Meeting and General Meetings.
The Board believes that the Annual Report and Accounts, and the Interim
Results published at the half-year stage, play an important part in presenting
all shareholders with an assessment of the Company's position and prospects.
The Company's website contains information on the Company's business,
corporate information and specific disclosures required under the AIM Rules
and the QCA Code. Management will also conduct periodic meetings either in
person or electronically to shareholders, private client brokers and
investment analysts.
3 Consider stakeholder and social responsibilities and their implications for The Company's long-term success relies upon good relations with all its
long term-success stakeholder groups, both internal and external. The Board affords highest
priority to ensuring that it maintains a strong understanding of the needs and
expectations of all stakeholders, monitoring feedback from them and considers
such feedback in developing future policy.
The Company undertakes its exploration and mining activities in a manner that
seeks to minimise or eliminate negative environmental impacts and to maximise
positive impacts of an environmental nature.
The Company operates a comprehensive safety and health programme to ensure the
wellness and security of its employees. The control and eventual elimination
of all work-related hazards requires a dedicated team effort involving the
active participation of all employees. A comprehensive safety and health
programme is the primary means for delivering best practices in safety and
health management.
Employment opportunities and regular training are offered to local community
members, while gender diversity policies are actively followed.
Employee involvement is fundamental in recognising and reporting unsafe
conditions and avoiding events that may result in injuries and accidents.
The Company has a dedicated community relations division that is active in
developing and assisting with various community social programs with special
focus on health, education and infrastructure projects.
4 Embed effective risk management, considering both opportunities and threats, The Board is responsible for the Company's system of internal controls and for
throughout the organisation reviewing its effectiveness. The system is designed to manage, rather than
eliminate, the risk of failure to achieve the execution of the Company's
strategic objectives and business model. The Board reviews this internal
reporting on a regular basis.
The Board monitors financial controls through the setting and approval of an
annual budget and a formal delegation of authority matrix combined with the
regular review of key risk areas and monthly management accounts. The
management accounts contain a number of indicators that are designed to reduce
the possibility of misstatement in the financial statements.
Each year, on behalf of the Board, the Audit Committee reviews the
effectiveness of the Company's system of internal controls. This is achieved
primarily via a comprehensive review of risks which cover both financial and
non-financial issues potentially affecting the Company and from discussions
with the external auditor. Details of the key risks, and their management, are
contained in the following Directors' Report and notes 33 and 34 to the
financial statements. The Board is not aware of any significant failings or
weaknesses in the Company's existing system of internal controls.
Operational risk management is a driver for how the Company does business and
dictates requirements to design, plan and adequately respond to internal and
external events. This ensures that proper incident response, and effective
monitoring can be implemented to minimise anticipated risks and reduce harm
and disruption to people, the environment, and the Company's operations.
5 Maintain the Board as a well-functioning, balanced team led by the Chair The purpose of the Board is to ensure that the business is managed for the
long-term benefit of all shareholders, whilst at the same time having regard
for employees, customers, suppliers and our impact on the environment and the
communities in which we operate. The full Board is responsible and accountable
to shareholders for the management and success of the Company and for
providing effective controls to assess and manage the risks that the Company
faces.
The Company's business is directed by the Board and is managed on a day-to-day
basis by the Chief Executive Officer ("CEO"). The Board monitors compliance
with the objectives and policies of the Company through monthly performance
reporting, budget updates and periodic operational reviews. The Board has
formal meetings at least four times a year, while restricted agenda meetings
are held on an ad hoc basis when required. Minutes of the meetings of the
Directors are circulated to the Board for approval.
On appointment, Non-Executive Directors commit to set aside sufficient time on
the business of the Company to maintain a full understanding of the business
which will include at least one annual visit to the Company's operations in
both the Philippines and Nicaragua.
Board membership and attendance:
Board member/role Meetings eligible to attend Meetings attended
Steven Smith - Non-Executive Chair 8 8
Darren Bowden - CEO & Executive Director 8 8
Tim Livesey - Independent Non-Executive Director
8 8
Andrew Chubb - Non-Executive Director 8 5
David Cather -Independent Non-Executive Director (appointed 1 November 2024)
4 3
Rob Marshall -Independent Non-Executive Director (appointed 1 November 2024)
4 4
Nick von Schirnding - Independent Non-Executive Chair (appointed 18 March 2024
-resigned 21 March 2025)
8 8
Guy Walker - Non-Executive Director (resigned 3 September 2024)
3 3
Steven Smith has been nominated to the Board by the Candy Group, while Rob
Marshall was nominated to the Board by Drachs. These two directors are not
independent but have relevant experience from which the Company can benefit.
Andrew Chubb is not independent, as he is a partner of the Company's corporate
broker and advises the Company in this role.
The members of the Board, as a whole, have suitable knowledge of the Company
and expertise to discharge their duties and responsibilities effectively. All
Directors are encouraged to use their independent judgement and to challenge
all matters, whether strategic or operational. Any Director must declare a
conflict of interest in relation to a particular item of business before
commencement of discussion on the topic.
The Board has delegated some of its responsibilities to various Committees,
which operate within specific terms of reference which can be found on the
Company's website. In the event of a proposal to appoint a new Director, each
Director is given the opportunity to meet the candidate prior to any formal
decision being taken. Due to the small size of the Company, no Nomination
Committee has been established.
The Company has established an Audit committee - refer to page 12 for the
Audit Committee Report. In addition, the Company has established a
Remuneration Committee - refer to page 15 for the Remuneration Committee
Report.
The remuneration and terms and conditions of appointment of Non-Executive
Directors are set by the Board and are governed by the Articles.
6 Ensure that between them the directors have the necessary up-to-date The skills and experience of the Board are set out in their biographical
experience, skills and capabilities details on the Company's website. The experience and knowledge of each of the
Directors gives them the ability to constructively challenge strategy and to
scrutinise performance.
MSP Corporate Services Limited, a professional company secretarial services
provider, acts as Company Secretary.
7 Evaluate Board performance based on clear and relevant objectives, seeking The collective performance of the Board is reflected in the success of the
continuous improvement business. Evaluation of the performance of the Board, its committees and
individual members has historically been implemented on an on-going and ad hoc
basis given the stage of the Company's development. The Company does not
therefore currently comply with Principle 7 in that it has no formal board
evaluation process.
Succession planning is currently the responsibility of the Board as a whole
and the establishment of a Nomination Committee is not considered necessary.
8 Promote a corporate culture that is based on ethical values and behaviours The Board recognises that its decisions will impact the corporate culture of
the Group as a whole and that this will affect the performance of the
business. The Board is also very conscious that the tone and culture that it
sets will greatly impact all aspects of the Group and the way that employees
behave and operate. The importance of maintaining sound ethical values and
behaviours is crucial to the ability of the Company to successfully achieve
its corporate objectives.
The Company seeks to ensure that responsible business practice is fully
integrated into the management of all its operations and into the culture of
all parts of the Company's business. It believes that the consistent adoption
of responsible business practice is essential for operational excellence,
which in turn is expected to ensure the delivery of its core objectives of,
inter alia, sustained real growth in future profitability.
In addition, employee involvement is recognised as fundamental in recognising
and reporting unsafe conditions and avoiding events that may result in
injuries and accidents, which, in turn, as a mining company, the Board
considers, to be a fundamental part of recognising and establishing ethical
values and behaviours throughout the Company's operations.
9 Maintain governance structures and processes that are fit for purpose and The Company maintains appropriate governance structures and processes
support good decision making by the Board according to its current size and complexity, and its stage of development and
level of resources.
There is a clear division of responsibility between the Non-Executive Chairman
and the CEO. The Chairman is responsible for running the business of the Board
and for ensuring appropriate strategic focus and direction. In addition, the
Chairman is responsible for the implementation and practice of sound corporate
governance.
The CEO is responsible for proposing the strategic focus to the Board,
implementing it once it has been approved and overseeing the management of the
Company's operations.
The role of Non-Executive Directors includes questioning and challenging the
CEO and assisting where possible in developing strategic proposals; reviewing
and commenting on the integrity of the Company's financial reporting systems
and the information they provide; recommending appropriate standards of
corporate governance; reviewing internal control systems; ensuring that risk
management systems are robust; and reviewing corporate performance and
ensuring that performance is appropriately reported to shareholders.
10 Communicate how the Company is governed and is performing by maintaining a The Company recognises that meaningful engagement with its shareholders is
dialogue with shareholders and other relevant stakeholders integral to the continued success of the Group. The Company engages with its
shareholders through meetings, webinars, presentations and roadshows when
appropriate.
The Board believes that the Annual Report and Accounts, and the Interim
Results published at the half-year stage, play an important part in presenting
all shareholders with an assessment of the Company's position and prospects.
All regulatory announcements are published on the Company's website. The
Annual General Meeting and General Meetings are an opportunity for
shareholders to discuss the Company's business with the Directors.
The Board is supported by the Audit and Remuneration Committees, each of which
has access to such information, resources and advice that it deems necessary,
at the Company's cost, to enable the committees to discharge their duties as
are set out in the Terms of Reference of each committee.
Further the Board is supported in its dialogue with shareholders by its
corporate broker and an investor relations consultancy group.
Steven Smith has been nominated to the Board by the Candy Group, while Rob
Marshall was nominated to the Board by Drachs. These two directors are not
independent but have relevant experience from which the Company can benefit.
Andrew Chubb is not independent, as he is a partner of the Company's corporate
broker and advises the Company in this role.
The members of the Board, as a whole, have suitable knowledge of the Company
and expertise to discharge their duties and responsibilities effectively. All
Directors are encouraged to use their independent judgement and to challenge
all matters, whether strategic or operational. Any Director must declare a
conflict of interest in relation to a particular item of business before
commencement of discussion on the topic.
The Board has delegated some of its responsibilities to various Committees,
which operate within specific terms of reference which can be found on the
Company's website. In the event of a proposal to appoint a new Director, each
Director is given the opportunity to meet the candidate prior to any formal
decision being taken. Due to the small size of the Company, no Nomination
Committee has been established.
The Company has established an Audit committee - refer to page 12 for the
Audit Committee Report. In addition, the Company has established a
Remuneration Committee - refer to page 15 for the Remuneration Committee
Report.
The remuneration and terms and conditions of appointment of Non-Executive
Directors are set by the Board and are governed by the Articles.
6
Ensure that between them the directors have the necessary up-to-date
experience, skills and capabilities
The skills and experience of the Board are set out in their biographical
details on the Company's website. The experience and knowledge of each of the
Directors gives them the ability to constructively challenge strategy and to
scrutinise performance.
MSP Corporate Services Limited, a professional company secretarial services
provider, acts as Company Secretary.
7
Evaluate Board performance based on clear and relevant objectives, seeking
continuous improvement
The collective performance of the Board is reflected in the success of the
business. Evaluation of the performance of the Board, its committees and
individual members has historically been implemented on an on-going and ad hoc
basis given the stage of the Company's development. The Company does not
therefore currently comply with Principle 7 in that it has no formal board
evaluation process.
Succession planning is currently the responsibility of the Board as a whole
and the establishment of a Nomination Committee is not considered necessary.
8
Promote a corporate culture that is based on ethical values and behaviours
The Board recognises that its decisions will impact the corporate culture of
the Group as a whole and that this will affect the performance of the
business. The Board is also very conscious that the tone and culture that it
sets will greatly impact all aspects of the Group and the way that employees
behave and operate. The importance of maintaining sound ethical values and
behaviours is crucial to the ability of the Company to successfully achieve
its corporate objectives.
The Company seeks to ensure that responsible business practice is fully
integrated into the management of all its operations and into the culture of
all parts of the Company's business. It believes that the consistent adoption
of responsible business practice is essential for operational excellence,
which in turn is expected to ensure the delivery of its core objectives of,
inter alia, sustained real growth in future profitability.
In addition, employee involvement is recognised as fundamental in recognising
and reporting unsafe conditions and avoiding events that may result in
injuries and accidents, which, in turn, as a mining company, the Board
considers, to be a fundamental part of recognising and establishing ethical
values and behaviours throughout the Company's operations.
9
Maintain governance structures and processes that are fit for purpose and
support good decision making by the Board
The Company maintains appropriate governance structures and processes
according to its current size and complexity, and its stage of development and
level of resources.
There is a clear division of responsibility between the Non-Executive Chairman
and the CEO. The Chairman is responsible for running the business of the Board
and for ensuring appropriate strategic focus and direction. In addition, the
Chairman is responsible for the implementation and practice of sound corporate
governance.
The CEO is responsible for proposing the strategic focus to the Board,
implementing it once it has been approved and overseeing the management of the
Company's operations.
The role of Non-Executive Directors includes questioning and challenging the
CEO and assisting where possible in developing strategic proposals; reviewing
and commenting on the integrity of the Company's financial reporting systems
and the information they provide; recommending appropriate standards of
corporate governance; reviewing internal control systems; ensuring that risk
management systems are robust; and reviewing corporate performance and
ensuring that performance is appropriately reported to shareholders.
10
Communicate how the Company is governed and is performing by maintaining a
dialogue with shareholders and other relevant stakeholders
The Company recognises that meaningful engagement with its shareholders is
integral to the continued success of the Group. The Company engages with its
shareholders through meetings, webinars, presentations and roadshows when
appropriate.
The Board believes that the Annual Report and Accounts, and the Interim
Results published at the half-year stage, play an important part in presenting
all shareholders with an assessment of the Company's position and prospects.
All regulatory announcements are published on the Company's website. The
Annual General Meeting and General Meetings are an opportunity for
shareholders to discuss the Company's business with the Directors.
The Board is supported by the Audit and Remuneration Committees, each of which
has access to such information, resources and advice that it deems necessary,
at the Company's cost, to enable the committees to discharge their duties as
are set out in the Terms of Reference of each committee.
Further the Board is supported in its dialogue with shareholders by its
corporate broker and an investor relations consultancy group.
DIRECTORS' REPORT
The Directors present their Annual Report together with the audited financial
statements of Metals Exploration plc (the 'Company') and its subsidiary
undertakings (the 'Group'), for the year ended 31 December 2024.
PRINCIPAL ACTIVITIES
The principal activity of the Group is to identify, acquire, explore and
develop mining and processing projects, mining companies, businesses or
opportunities with particular emphasis on precious and base metals mining
opportunities in the Philippines, and subsequent to year-end in Nicaragua.
The Company was incorporated on 8 April 2004 under the Companies Act 1985 (now
Companies Act 2006) and is registered in England and Wales with registered
number 05098945. The Company was admitted to trading on AIM in October 2004.
The principal activity of the Company is that of a holding company for its
subsidiary undertakings, which are set out in note 15 of the financial
statements.
FINANCIAL RESULTS
For the year ended 31 December 2024 the profit before tax of the Group for the
year was US$34.6 million (2023: US$119.6 million). This result included a net
impairment of assets charge of US$9.1 million (2023: impairment reversal of
US$97.7 million).
DIVIDENDS
A dividend payment is not recommended for the year ended 31 December 2024
(2023: US$nil).
BUSINESS REVIEW AND FUTURE DEVELOPMENTS
A review of the current and future development of the Group's business is
given in the Chairman's Statement on page 3 and the Chief Executive Officer's
Strategic Report on page 5.
NOMINATED ADVISER & CORPORATE BROKER
The Company's nominated adviser is Strand Hanson Limited. The Company's
corporate broker is Hannam & Partners ('H&P Advisory Limited').
AUDITOR
PKF Littlejohn LLP were re-appointed as auditor of the Company at the Annual
General Meeting held in 2024 and it is proposed that they be re-appointed as
auditor of the Company at the Company's forthcoming Annual General Meeting.
DIRECTORS & DIRECTORS' INTERESTS
The Directors of the Company during the year and since the year end were:
Steven Smith (Chairman and
Non-Executive Director)
Darren Bowden (Chief Executive Officer and
Executive Director)
Tim Livesey (Independent
Non-Executive Director)
Andrew Chubb (Non-Executive Director)
David Cather (Independent
Non-Executive Director), appointed 1 November 2024
Rob Marshall (Non-Executive
Director), appointed 1 November 2024
Nick Von Schirnding (Independent Non-Executive Chairman),
appointed 18 March 2024 - resigned 21 March 2025
Guy Walker (Non-Executive
Director); resigned 3 September 2024
ARRANGEMENTS TO PURCHASE SHARES OR DEBENTURES
During FY2024 the Company issued to directors:
· 6,600,000 options to acquire new Ordinary Shares to Mr von
Schirnding.
· 9,500,000 options to acquire new Ordinary Shares to Mr Bowden in
relation to the acquisition of the YMC group.
These options are subject to vesting conditions as noted in the Remuneration
Report.
There was no issue of securities to directors during FY2023.
Apart from outstanding share options, a full summary of which is disclosed in
the Remuneration Report, there are no other arrangements entered into to
enable the Directors of the Company to acquire benefits by means of the
acquisition of shares in, or debentures of, the Company or any other body
corporate; except that pursuant to the terms of the Metals Exploration plc
2022 and 2023 Management Incentive Plans, in February 2025, Mr Bowden was
awarded additional 9,213,853 Ordinary Shares.
DIRECTORS' INTEREST IN CONTRACTS OF SIGNIFICANCE
No contract of significance to which the Company, or any of its subsidiary
companies was a party and in which a Director of the Company had a material
interest, whether directly or indirectly, subsisted at the end of the
financial year or at any time during the year; other than:
· Steven Smith is a 10% shareholder in MTL Guernsey Limited ('MTLG'),
previously a Senior Debt lender.
· Andrew Chubb is a director of H&P Advisory Limited trading as
Hannam & Partners, the Company's broker and financial adviser.
· Darren Bowden held a 37.5% interest in Yamang Mineral Corporation
acquired by the Group.
· Robert Marshall is the nominee director of Drachs which in November
2024 provided the Company with a short-term £5.5 million loan. The principal
and interest of this loan was repaid in March 2025 by the transfer of
94,127,854 Ordinary Shares held in treasury to Drachs at an issue price of
£0.06 per Ordinary Share.
PRINCIPAL RISKS AND UNCERTAINTIES FACING THE GROUP
The Board of Directors review the principal risks and uncertainties facing the
Group on an ongoing and regular basis. Assessments are made as to how to
manage these and mitigate as much risk as possible through various controls.
Many of these risks and uncertainties are common to all mining projects. The
principal risks and uncertainties facing the Group are identified as follows:
Market risk
The profitability of the Group's projects is impacted by the risks associated
with the gold market. Profitability can be affected by factors beyond the
Group's control, such as a prolonged decline in world gold prices. The Group
regularly tracks gold prices and regularly refines its models on financial
profitability in order to have available for the Board at all times, a current
view on the future financial viability of its active projects. The Group has
attempted to mitigate this risk by entering into limited hedge arrangements in
relation to future gold prices. Refer note 21.
The Group is exposed to currency risks in its operations; particularly in
relation to Philippine domestic peso currency exposure from costs associated
with mining and gold recovery. Currency exposures are carefully monitored, and
USD:PHP forward contracts are in place to insure against major adverse
currency movement risk. Refer note 21.
Nature of mining, resource estimation and mineral processing
Mineral resource and reserves estimation provides no assurance that the
potential tonnage and grades will be achieved. The exploration of mineral
rights is speculative in nature and any published results are expressions of
judgement developed using industry tested measuring techniques, none of which
can be relied upon with complete certainty. Each set of published results
builds upon the previous published information and includes any new and
reliable information from systematic drill results, mining, and recovery and
reconciliation activities and is independently verified by qualified persons.
However, this still involves experience, judgement, skill and estimation, all
of which are imprecise, interpretative and open to challenge. The actual
results of mining may differ upwards or downwards from the published reserves
upon which the Group relies in its business projections.
The size of the deposit, its grade, depth and type of orebody, are only some
of the particular attributes which determine the costs and recovery methods
required to be employed. There is also the length of haul to the processing
plant, age and maintenance programmes for plant and equipment, land access,
environmental protection and community relations, capital costs, reclamation
and closure costs and labour and host community relations. The quantities,
costs and assumptions used to identify and interpret these variables can be
modelled to the lowest level of detail possible, but they do not provide
absolute certainty that the expected cost of mining will be achieved.
The metallurgy of the Group's ore requires a complex set of processes to
extract economic levels of gold doré. Maintaining efficient processing
operations requires specialised equipment and consumables, combined with an
experienced and motivated processing team. It is also subject to numerous
factors some of which are within the Group's ability to control, and some that
are external factors outside the control of the Group.
Reserves and viable mining operations
Based upon the Group's current delineated gold reserves and planned mining
schedule it is predicted that the Runruno project's remaining life of mine is
approximately until Q4 2026 or Q1 2027.
To maintain or increase production levels in the long term, the Group must
replace its gold reserves that are depleted by its mining activities. To
replace its reserves, the Group must engage in an exploration and development
programme, which is speculative by nature, to acquire or discover and develop
new mineral deposits.
The exploration and development of mineral deposits involves significant
risks, which even a combination of careful evaluation, experience and
technical knowledge may not eliminate. The economics of exploration and the
eventual development of mineral properties are affected by many factors,
including the cost of future operations, availability of capital, assumptions
about the price of gold, the grade and recoverability of minerals, the ratio
of waste to ore, sufficiency of water, resettlement costs and other factors,
such as government regulations. As a result, there can be no assurances that
the Group's exploration or development activities will result in profitable
commercial mining operations. Exploration and development of mineral deposits
involve a wide range of significant risks and require a significant investment
over an extended period. These risks are seldom constant with new types
invariably arising and adding to the industry's and Group's challenges.
Mining regulatory risk
Mining investors are exposed to a high level of regulatory risk, and a wide
array of 'rules and regulations' ('Rules') imposed by the governing bodies
responsible for the mining sectors in the countries the Group operates in. The
Rules are created and enforced by several layers of government and government
agencies nationally, provincially and locally. The mining industry is subject
to frequent audit and review activity by regulatory agencies.
Failure to receive, extend or amend any Regulatory Approval, or delays in
receiving, extending or amending any Regulatory Approval may adversely affect
the properties, business or operations of the Group including, but not limited
to, increasing the costs of the Group's activities; limiting the Group's
capacity to produce gold; delaying the implementation of any planned changes
to the Group's activities; or requiring the full or partial suspension of the
Group's operations.
In the Philippines the Group annually has almost 500 approvals, licences and
permits to conduct mining, processing and related activities at its Runruno
Gold Project in the Philippines (collectively "Regulatory Approvals") and is
routinely required to obtain new permits and Regulatory Approvals or to amend,
renew or extend its existing permits and Regulatory Approvals.
As at the date of this Report, neither the Group nor its any of its projects
are subject to any suspension or closure order. The Group has applied for, or
is in the process of, applying for the issue, extension or renewal of a number
of Regulatory Approvals and cannot be certain that they will be issued,
extended or renewed on acceptable terms or within the required timeframes.
Key personnel
The Group depends on its Directors, senior managers, employees and third-party
contractors with relevant experience to explore for mineral reserves and
resources, develop projects and operate mines. As a result of the limited life
of mine of the Runruno Mine, the Group may experience difficulty in retaining
existing employees or third-party contractors, or in replacing them with
appropriate staff.
The Group's success depends, to a large degree, upon the continued service and
skills of its existing management team. The Group's management team has
significant experience and has been intimately involved in the turn-around of
the Group's gold recovery and financial condition. If the Group loses the
services of any key member of its management team and is unable to find a
suitable replacement in a timely manner, the Group may be unable to
effectively manage its business and execute its strategy. In addition, the
Group depends on skilled employees to carry out its operations, in particular
with regard the BIOX process. The loss of these people or the Group's
inability to attract and retain additional highly skilled employees required
for the implementation of its business plan and ongoing development and
expansion of operating assets may have a material adverse effect on the
Group's business or future operations.
Environmental risk
Mining operations are by nature environmentally risky ventures. As a
responsible miner the Group takes its environmental responsibilities very
seriously and is subject to stringent rules and regulations before, during and
after its period of exploration and mining development. Open pit mining is
mining on a large-scale and has the potential to become entangled in
environmental disputes. The Group employs every effort to avoid and mitigate
even the most minor of damage to the environment, but it is aware it will
always be exposed to these risks for as long as it is present at Runruno.
Any breach of its environmental code or obligations to the environment as
dictated in its Financial or Technical Assistance Agreement ('FTAA') or its
Environmental Compliance Certificate may result in a temporary suspension of
operations, fines, and even the possibility of closure of mining operations at
Runruno. The Group is aware there may be further environmental standards
imposed throughout the life of its mining operations which will involve
further costs, time and compromises to be compliant.
Political and country risk
The Group has mining and exploration projects in both the Philippines and
Nicaragua. These are challenging jurisdictions for foreign mining companies to
succeed. Philippine and Nicaraguan political and country perceived risk issues
may have hindered the development of the mining industry in these countries.
The Group has no control or influence in these matters and these risks are a
constant.
In the Philippines, to reduce these risks, the Group applied for and was
granted a FTAA, a contract in law with the government. The 1995 Mining Act
allows 100% foreign ownership of mining entities where there is a US$50
million investment or higher, through the ownership of a FTAA. Mines operating
under a FTAA have recourse for disputes to be arbitrated offshore. Despite
opposition to the 1995 Mining Act successive Presidents have supported the
framework.
In Nicaragua all necessary permits are in place for the Group to commence
development of the La India gold project.
Access to tenement areas
The Group's social licence to operate is not guaranteed and every effort is
made to ensure the local communities near our areas of operation are
supportive of the Group's endeavours.
RSI integrity
The Group's Runruno mine tailings waste is directed to a residual storage
impoundment ('RSI') facility. The RSI is being constructed to standards
applicable to international water dam construction, which has significantly
higher standards than normal mine tailings facilities. However, the failure of
the RSI would be catastrophic, and as such the continued integrity of this
structure is of the utmost importance.
Third party audits of the design and construction integrity of the RSI are
conducted, and the RSI remains in compliance with local guidelines and local
development requirements. Construction of the final in-rock spillway commenced
in Q1 2023 and is expected to be completed during FY2026. This final in-rock
spillway will ensure the RSI has the capacity to cope with a 'Probable Maximum
Flood' event.
The performance of the RSI is continuously monitored by an independent
international consulting group.
GOING CONCERN
The consolidated financial statements of the Group have been prepared on a
going concern basis, which contemplates the continuity of business activities
and the realisation of assets and the settlement of liabilities in the normal
course of business.
The Board of Directors believe that the Runruno mine will continue to operate
successfully and produce positive cash flows ensuring the continuing viability
of the Group and its ability to operate as a going concern, meeting its
commitments as and when they fall due.
Continued free cash generated from Runruno is more than sufficient to fund the
mine development and plant acquisitions required to bring the Nicaraguan La
India project into production by Q4 2026.
As a result, the Directors believe there is no material uncertainty over the
Group's going concern and that it is appropriate that the financial statements
should be prepared on a going concern basis.
KEY PERFORMANCE INDICATORS
The Directors monitor the performance of the Group through the following key
performance indicators:
· Safety - Safety is at the core of the Group's business. The Group
aspires to a world class TRIFR target of <0.95, which was achieved both in
FY2024 and FY2023. Indeed, the focus on safety has been successful with over
25 million work-hours being recorded without a lost-time-injury ('LTI') in the
period up to 30 March 2025. Unfortunately, on 30 March 2025, the Group
suffered its first LTI since December 2016, when an employee suffered burns
that required hospital treatment. This employee is expected to make a full
recovery and return to work in Q2 2025. Maintaining a safe working environment
at all times, for all employees and contractors, is of paramount importance to
the Group. Safety is the lead item for consideration at all management
meetings, with safety briefings and safety protocol reviews regularly
undertaken. Management remains determined to minimise and where possible
eliminate potential safety risks.
· Environment/permit compliance - The Group aims to have no major
environmental/permitting incidents and <3 minor reportable
environmental/permitting incidents per annum. This target was achieved during
both FY2024 and FY2023. Operations are subject to numerous environmental and
permit obligations and regulations. A dedicated department monitors the
Group's performance in this regard. Regular reporting of compliance with these
obligations and regulations is strictly adhered to. The Group is confident of
its satisfaction of the compliance obligations imposed on its operations and
its ability to maintain and renew permits as required.
· Gold recovery - Overall gold recovery measured against budget
reflects the outcome of ongoing technical work undertaken to maintain/improve
operational performance. The average gold recovery in FY2024 was 90.5%
(FY2023: 88.7%) surpassing the average gold recovery target. Gold recoveries
are continuously monitored providing detailed information on day-to-day
performance.
· Free cash flow - Given the Group's historical high debt level the
amount of free cash flow produced to pay down Group debt has been of paramount
importance; and performance is determined by comparison of actual results
against budget. The cost efficiencies of operations are measured against
budgets and forecasts on a weekly and monthly basis. Detailed annual budgets
are approved by the Board. Free cash generated from operations of US$96.7
million (FY2023: US$72.3 million) exceeded budget.
· Total expenditure - Total operating cost and CAPEX expenditure is
measured against budget on a weekly, monthly and annual basis. Projected costs
are re-forecast at regular intervals. Total operating cost and CAPEX
expenditure, excluding debt interest/fees, taxes and corporate event expenses,
for FY2024 of US$83.1 million (FY2023: US$87.6 million) was slightly lower
than budget.
· Total movement of material - Actual physical mining performance,
both ore and waste, compared to budget is a key driver to ongoing mining
operations. Mine schedules are constantly being reviewed to ensure sufficient
ore is delivered to the process plant on a timely basis at an economic grade.
Actual tonnes mined during the year was slightly below budget at 11.3Mt
(FY2023: 12.4Mt).
· Mill throughput - Actual tonnes milled of 2.1Mt (FY2023: 2.1Mt)
compared to the 1.75Mt name-plant design of the process plant indicates the
degree of success plant modifications have made on the Group's ability to
increase production rates above original design expectations.
EVENTS AFTER THE BALANCE SHEET DATE
Details of significant events occurring after the balance sheet date are set
out in note 36 to the financial statements.
FINANCIAL RISK MANAGEMENT
Details of the Group's policies with respect to financial risk management are
given in note 34 to the financial statements.
Although monitoring financial risk falls within the terms of reference of the
audit committee, this matter is a standard agenda item at all board meetings.
The Group's finance departments implement policies set by the Board of
Directors.
CORPORATE RESPONSIBILITY AND ENVIRONMENTAL POLICY
The Group's policy is to conduct operations in a safe and environmentally
responsible manner to industry best practice standards, to respect the
indigenous culture of the mining project areas, to promote social and economic
development and to offer employment and training opportunities to those who
live in the mining project areas.
POLITICAL CONTRIBUTIONS AND CHARITABLE CONTRIBUTIONS
During FY2024, the Group did not make any political expenditures or charitable
donations (FY2023: $nil).
ANNUAL GENERAL MEETING
This report and the financial statements will be presented to shareholders for
their approval at the Annual General Meeting ('AGM').
The Company's AGM is expected to be held on 16 June 2025 at the offices of
Squire Patton Boggs in London. The Notice of the AGM will be issued shortly.
In accordance with the Company's Articles of Association, all directors, will
retire and will offer themselves for re-election at the AGM.
SHARE CAPITAL
On 31 December 2024, there were 1,728,216,415 ordinary shares of £0.0001 each
with voting rights in the capital of the Company in issue. A further
393,513,302 non-voting ordinary shares of £0.0001 each were held in Treasury.
SIGNIFICANT SHAREHOLDINGS
As at 31 December 2024, the Company is either aware of or has been notified of
the following shareholders who hold disclosable interests of 3% or more of the
nominal value of the Company's Ordinary Shares:
Significant Shareholders Shares held as of Voting % Shares held as of Voting %
31 December 31 December
2024 2023
Nick Candy 651,000,000 37.7 969,532,143 46.6%
Drachs Investments No3 Limited 317,532,143 18.4 - -
Hargreaves Lansdown² 137,654,787 7.97 85,083,121 4.1%
Interactive Investor² 91,263,780 5.28 87,747,000 4.2%
Baker Steel Capital Managers LLP¹ 63,438,429 3.67 113,488,429 5.4%
(1) Baker Steel Capital Managers LLP acting on behalf of various funds for
which it acts as full discretionary Investment Manager.
(2) Acting on behalf of its clients.
BOARD ENGAGEMENT WITH STAKEHOLDERS - SECTION 172 STATEMENT
Section 172 of the Companies Act 2006 requires a Director of a company to act
in the way he or she considers, in good faith, and would be most likely to
promote the success of the company for the benefit of its members as a whole.
The Directors use the Board meetings as a mechanism for giving careful
consideration to the factors set out above in discharging their duties under
section 172.
Stakeholder engagement
Key stakeholder groups we engage with are listed below, together with an
explanation of why we focus on them and how we engage them.
Employees
The success of the Group is dependent upon the hard work and dedication of all
our employees. The Board ensures a continuing investment in existing employees
who are supported through professional, technical and on-the-job training
relevant to their functional areas. The Board directs executives and senior
managers to keep staff informed of the progress and development of the Group
on a regular basis through formal and informal operational updates, meetings
and other regular communications. In addition, the Board ensures funds are
provided for regular events to encourage employee participation in local
community initiatives.
The Group strives to create an equal opportunity work environment where
employees can be safe and healthy at all times, while feeling valued and
supported. Employees are encouraged to speak out about anything that impacts
their performance and/or safety.
The Board is conscious of its social obligation to impart skills and knowledge
onto local employees. Accordingly, in the Philippines over 98% of the Group's
workforce is Philippine; while in Nicaragua approximately 95% of the workforce
are Nicaraguan. Workforce gender diversity policies are actively followed with
approximately 28% of the Group workforce being female.
Government Agencies & Local Communities
The Group operates in the highly regulated mining business. The Board ensures
the Group adopts a positive focus on maintaining productive relations with
local communities and all levels of government. As a result, the Chief
Executive Officer and senior managers regularly conduct consultations with
multi-levels of government agencies to ensure that all regulatory approvals
and permits remain in good order. Development of local community improvement
programmes are undertaken with consultation of local government and community
representatives.
Contractors & Suppliers
Our contractors and suppliers are key business partners, and the quality of
goods and services we receive are essential to supporting operations and to
provide the Group with the opportunity to produce positive cash flows.
As directed by the Board, management collaborates and continually works with
our contractors and the full supply chain, sharing best practice and seeking
out synergies to improve performance.
Lenders
For the entire reporting period, the CEO and the CFO, on behalf of the Board,
were in regular contact with its lenders regarding the Group's performance in
an endeavour to manage expectations.
Customers
The Group's business in mining and selling gold doré means it only deals with
a small number of end customers, being refiners of doré and/or gold
concentrate. The Board ensures a close relationship is maintained with senior
personnel at each customer group.
Investors
Investors are considered key stakeholders, and consequently investor relations
are a focus area for Directors. Where possible the Board engages investors on
Group performance following trading updates and results announcements.
DISCLOSURE OF INFORMATION TO THE AUDITORS
The Directors at the date of approval of this Annual Report individually
confirm that:
· so far as the Director is aware, there is no relevant audit
information of which the Group's auditors are unaware; and
· the Director has taken all the steps that he ought to have taken as
a Director in order to make himself aware of any relevant audit information
and to establish that the Group's auditors are aware of that information.
This confirmation is given and should be interpreted in accordance with the
provision of Section 418 of the Companies Act 2006.
Approved by the Board of Directors and signed on behalf of the Board
Darren Bowden, Chief Executive Officer
16 May 2025
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the Corporate Governance Report,
Strategic Report, Directors' Report and the financial statements in accordance
with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each
financial year. Under that law, the Directors have elected to prepare the
financial statements in accordance with applicable law and in accordance with
UK-adopted international accounting standards. Under Company law the Directors
must not approve the financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the Company and of the
Group and of the profit or loss of the Group for that period. In preparing
these financial statements, the Directors are required to:
· select suitable accounting policies and then apply them
consistently;
· make judgments and accounting estimates that are reasonable and
prudent;
· state whether UK-adopted international accounting standards have
been followed, subject to any material departures disclosed and explained in
the financial statements; and
· prepare the financial statements on the going concern basis unless
it is inappropriate to presume that the Company and Group will continue in
business.
The Directors are responsible for:
· keeping adequate accounting records that are sufficient to show and
explain the Company's transactions and disclose with reasonable accuracy at
any time the financial position of the Company and enable them to ensure that
the financial statements comply with the Companies Act 2006. They are also
responsible for safeguarding the assets of the Company and the Group and hence
for taking reasonable steps for the prevention and detection of fraud and
other irregularities;
· ensuring that they meet their responsibilities under the AIM Rules;
and
· the maintenance and integrity of the corporate and financial
information included on the Company's website. Legislation in the United
Kingdom governing the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF METALS EXPLORATION PLC
Opinion
We have audited the financial statements of Metals Exploration Plc (the
'parent company') and its subsidiaries (the 'group') for the year ended 31
December 2024 which comprise the Consolidated Statement of Total Comprehensive
Income, the Consolidated and Company Statements of Financial Position, the
Consolidated and Company Statements of Changes in Equity, the Consolidated and
Company Statements of Cash Flows and notes to the financial statements,
including significant accounting policies. The financial reporting framework
that has been applied in their preparation is applicable law and UK-adopted
international accounting standards and as regards the parent company financial
statements, as applied in accordance with the provisions of the Companies Act
2006.
In our opinion:
· the financial statements give a true and fair view of the state of
the group's and of the parent company's affairs as at 31 December 2024 and of
the group's profit for the year then ended;
· the group financial statements have been properly prepared in
accordance with UK-adopted international accounting standards;
· the parent company financial statements have been properly prepared
in accordance with UK-adopted international accounting standards and as
applied in accordance with the provisions of the Companies Act 2006; and
· the financial statements have been prepared in accordance with the
requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor's responsibilities for the
audit of the financial statements section of our report. We are independent of
the group and parent company in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the UK, including the
FRC's Ethical Standard as applied to listed entities, and we have fulfilled
our other ethical responsibilities in accordance with these requirements. We
believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors'
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation of the directors'
assessment of the group's and parent company's ability to continue to adopt
the going concern basis of accounting included:
· Testing the integrity of management's forecast model for a period
of 12 months from the date of approval of the financial statements and
further, checking the mathematical accuracy of the model, including
challenging the appropriateness of key assumptions and inputs with reference
to empirical data and external evidence with specific focus on the following
key assumptions: gold price, production, costs, gold grade, recoveries and
assessed their consistency with approved budgets and the mine development
plan, as applicable;
· Comparing budgets to actual figures achieved to assess the
reliability of management's forecasts;
· Evaluating management's sensitivity analysis and performing our own
sensitivity analysis in respect of the key assumptions and inputs underpinning
the forecasts. We assessed the validity of any mitigating actions identified
by management;
· Confirming the terms of all borrowing facilities in place and that
the terms are not breached and reviewing the repayments of loans and ensuring
that they were reflected in the cash flow forecast; and
· Assessing if the going concern disclosures in the financial
statements are appropriate and in accordance with the revised ISA UK 570 going
concern standard.
Based on the work we have performed, we have not identified any material
uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the group's or parent company's
ability to continue as a going concern for a period of at least twelve months
from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Our application of materiality
The scope of our audit was influenced by our application of materiality. The
quantitative and qualitative thresholds for materiality determine the scope of
our audit and the nature, timing and extent of our audit procedures.
We determined materiality for the group and parent financial statements to be:
Group ($) Parent ($)
2024 2023 Basis 2024 2023 Basis
Overall materiality 1,915,000 1,689,000 1% of revenue 1,574,000 1,654,000 1.5% of net assets (2023: 5% of profit before tax
Performance materiality 1,149,000 1,013,400 60% of materiality 944,000 992,400 60% of materiality
Triviality 95,000 84,450 5% of materiality 78,000 82,700 5% of materiality
In determining group materiality, we consider revenue to be the primary
measure used by the shareholders in assessing the performance of the group,
driving profitability within the group and revenue is expected to provide a
more stable measure year on year. The percentage applied to this benchmark
of 1% has been selected to bring into scope all significant classes of
transactions, account balances and disclosures relevant for the shareholders,
and also to ensure that matters that would have a significant impact on the
reported profit were appropriately considered.
In determining parent materiality, we consider profit before tax to be the
primary measure used by the shareholders in assessing the performance of the
company. The parent is generating consultancy revenue from its subsidiaries,
and holds little fixed assets for these reasons. The percentage applied to
this benchmark of 5% has been selected to bring into scope all significant
classes of transactions, account balances and disclosures relevant for the
shareholders, and also to ensure that matters that would have a significant
impact on the reported profit were appropriately considered.
We use performance materiality to reduce to an appropriately low level the
probability that the aggregate of uncorrected and undetected misstatements
exceeds overall materiality. Specifically, we use performance materiality in
determining the scope of our audit and the nature and extent of our testing of
account balances, classes of transactions and disclosures. We set the
performance materiality at 60% of materiality.
In determining performance materiality, we considered the following factors:
· Our knowledge of the group and parent and its environment,
including industry specific trends;
· Significant transactions during the year; and
· The level of judgement required in respect of the key accounting
estimates.
We agreed with the audit committee that we would report all individual audit
differences identified for the group during the course of our audit in excess
of $84,450 ($82,700 for the parent) together with any other audit
misstatements below that threshold that we believe warranted reporting on
qualitative grounds.
We determined materiality for the significant component to be:
2024 ($) 2023 ($) Basis
Overall materiality 1,149,000 1,500,000 Based on a factor of overall group materiality
Performance materiality 1,000,000 900,000 60% of materiality
Triviality 83,000 75,000 5% of materiality
We applied the concept of materiality in planning and performing our audit and
in evaluating the effects of misstatement.
Our approach to the audit
Our audit is risk based and is designed to focus our efforts on the areas at
greatest risk of material misstatement, aspects subject to significant
management judgement as well as greatest complexity, risk and size.
As part of designing our audit, we determined materiality, as above, and
assessed the risk of material misstatement in the financial statements. In
particular, we looked at areas involving significant accounting estimates and
judgement by the directors and considered future events that are inherently
uncertain. These areas of estimation and judgement included:
o Valuation of property, plant and equipment as outlined in the Key audit
matters section above
o Recoverability of investments in subsidiaries and receivables from
subsidiaries
o Valuation of inventory
o Accuracy and completeness of rehabilitation provision
o Valuation of the purchase price allocation of YMC group
We also addressed the risk of management override of internal controls,
including among other matters consideration of whether there was evidence of
bias that represented a risk of material misstatement due to fraud.
Of the group's 10 components, including the parent company, 2 were considered
(including the parent company - audited by PKF-Littlejohn) financially
significant and subject to full scope audit for group purposes. The remaining
components were not considered material and we performed a limited scope
analytical review together with substantive testing, as appropriate.
A full scope audit was performed for the one significant component in the
Philippines. In establishing our overall approach to the Group audit, we
determined the scope, direction of the audit process, and the type of work
that needed to be undertaken by the component team. The component team is one
of the largest professional services networks in the world. We determined
the appropriate level of involvement to enable us to determine that sufficient
audit evidence had been obtained as a basis for our opinion on the Group as a
whole. We monitored their work through regular collaborative meetings,
review progress and evaluating adherence to timeliness and accuracy of
deliverables. We carried out a site visit to the Philippines in April 2025
and performed an on-site file review of the work performed by the component
auditor.
The key audit matters and how these were addressed are outlined below.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those
which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
Key Audit Matter How our scope addressed this matter
Carrying value and impairment of property, plant and equipment (Valuation)
Our work in this area included:
The group holds a significant balance of tangible non-current assets of $94m · Considering any potential impairment indicators through discussion
which are key to the Group's mining operations. Management assess the with management and the onsite visit to the mine site during the audit
recoverable amounts of these balances on a cash generating unit (CGU) based on fieldwork, as well as reviewing of announcements to the market and board
the value-in use of the Runruno operations using cash flow projections over minutes for evidence of impairment.
the remaining expected life of the mine (LOM) which is ending in December 2026
and at appropriate discount rates. · Obtaining and reviewing management's discounted cash flow model;
· Assessing and reviewing indicators of impairment as per IAS 36;
Given the significant judgements and estimates used by management in · Ensuring the basis of preparation of the model is in line with
determining the value in use of these assets, there is the risk that the applicable accounting standards;
carrying value is not fully recoverable, taking into consideration all
applicable factors including current and future mined ore grades, production · Assessing the appropriateness of estimates and inputs including ore
quantities, revenues, direct costs and discount rates, which all feed into the grade, commodity price, production, operating costs, capital costs, discount
value in use calculations. rates, foreign exchange rates;
The accounting policy for determining impairment charges or reversals for the · Ensuring inputs into the model are in line with third party
carrying amount of the property, plant and equipment may not be in line with expert's opinion of total mineral resources; and
IAS 36, 'Impairment of Assets', which requires companies to determine a single
estimate of the recoverable amount. · Considering whether an impairment reversal should be recorded and
challenging management thereon.
Further, the classification of the basis on which the impairment reversal (if
any) allocated to the individual assets within the CGU may not be in
accordance with paragraphs 122 and 123 of IAS 36.
The disclosure is provided in the financial statements under Note 8.
Other information
The other information comprises the information included in the annual report,
other than the financial statements and our auditor's report thereon. The
directors are responsible for the other information contained within the
annual report. Our opinion on the group and parent company financial
statements does not cover the other information and, except to the extent
otherwise explicitly stated in our report, we do not express any form of
assurance conclusion thereon. Our responsibility is to read the other
information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge
obtained in the course of the audit, or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether this gives rise to a
material misstatement in the financial statements themselves. If, based on the
work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
· the information given in the strategic report and the directors'
report for the financial year for which the financial statements are prepared
is consistent with the financial statements; and
· the strategic report and the directors' report have been prepared
in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent
company and their environment obtained in the course of the audit, we have not
identified material misstatements in the strategic report or the directors'
report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been received from
branches not visited by us; or
· the parent company financial statements are not in agreement with
the accounting records and returns; or
· certain disclosures of directors' remuneration specified by law are
not made; or
· we have not received all the information and explanations we
require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the
directors are responsible for the preparation of the group and parent company
financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the directors determine is necessary to
enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the group and parent company financial statements, the directors
are responsible for assessing the group and the parent company's ability to
continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the group or the parent company or to
cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:
· We obtained an understanding of the group and company and the
sector in which it operates to identify laws and regulations that could
reasonably be expected to have a direct effect on the financial statements. We
obtained our understanding in this regard through discussions with management
and our expertise of the sector.
· We determined the principal laws and regulations relevant to the
company in this regard to be those arising from Companies Act 2006, UK-adopted
international accounting standards, the AIM Rules for Companies, as well as
local laws and regulations in the jurisdiction in which the group and parent
company operate.
· Compliance with laws and regulations at the subsidiary level was
ensured through enquiry of management, communication with component auditors
and review of correspondence for any instances of non-compliance.
· We designed our audit procedures to ensure the audit team and
component auditors considered whether there were any indications of
non-compliance by the group and parent company with those laws and
regulations. These procedures included, but were not limited to:
o conducting enquiries of management regarding potential instances of
non-compliance;
o reviewing RNS announcements;
o reviewing legal and professional fees for evidence of any litigation or
claims against the company; and
o reviewing board minutes and other correspondence from management.
· We also identified the risks of material misstatement of the
financial statements due to fraud. We considered, in addition to the
non-rebuttable presumption of a risk of fraud arising from management override
of controls, whether key management judgements could include management bias
in relation to:
o Valuation of property, plant and equipment as outlined in the Key audit
matters section above
o Recoverability of investments in subsidiaries and receivables from
subsidiaries
o Valuation of inventory
o Accuracy and completeness of rehabilitation provision
o Valuation of the purchase price allocation of YMC group
· As in all of our audits, we addressed the risk of fraud arising
from management override of controls by performing audit procedures which
included, but were not limited to: the testing of journals; reviewing
accounting estimates for evidence of bias; and evaluating the business
rationale of any significant transactions that are unusual or outside the
normal course of business.
Because of the inherent limitations of an audit, there is a risk that we will
not detect all irregularities, including those leading to a material
misstatement in the financial statements or non-compliance with regulation.
This risk increases the more that compliance with a law or regulation is
removed from the events and transactions reflected in the financial
statements, as we will be less likely to become aware of instances of
non-compliance. The risk is also greater regarding irregularities occurring
due to fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities
(http://www.frc.org.uk/auditorsresponsibilities) . This description forms part
of our auditor's report.
Use of our report
This report is made solely to the company's members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the company's members those matters we
are required to state to them in an auditor's report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone, other than the company and the company's members as
a body, for our audit work, for this report, or for the opinions we have
formed.
Joseph Archer (Senior Statutory Auditor)
15 Westferry Circus
For and on behalf of PKF Littlejohn
LLP
Canary Wharf
Statutory
Auditor
London E14 4HD
16 May 2025
CONSOLIDATED STATEMENT OF TOTAL COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
2024 2023
Notes US$ US$
Continuing Operations
Revenue 3 191,149,615 166,682,876
Cost of sales (128,630,976) (129,422,805)
Gross profit 62,518,639 37,260,071
Administrative expenses (8,984,213) (8,086,753)
Operating profit 4 53,534,426 29,173,318
Impairment (loss)/gain 8 (9,065,277) 97,737,620
Other income/expenses 8 (3,319,103) (7,341,829)
Provision for (loss) on derivatives 21 (6,521,465) (29,759)
Share of profit of associates 16 12,030 15,970
Profit before tax 34,640,611 119,555,320
Tax (expense) 9/10 (9,064,743) (306,582)
Profit for the period 25,575,868 119,248,738
Non-controlling interest 10,211 -
Profit for the period attributable to equity holders of the parent 25,586,079 119,248,738
Other comprehensive income:
Items that may be re-classified subsequently to profit or loss:
Exchange differences on translating foreign operations (1,545,017) (3,479,370)
Items that will not be re-classified subsequently to profit or loss:
Re-measurement of pension liabilities (320,892) 222,909
Total comprehensive profit for the period attributable to equity holders of 23,720,170 115,992,277
the parent
Total comprehensive profit for the period attributable to equity holders of 23,709,959 115,992,277
the parent and non-controlling interests
Cents per voting share Cents per voting share
Earnings per voting share:
Basic cents per voting share 11 1.29 5.70
Diluted cents per voting share 11 1.28 5.64
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2024
2024 2023
Notes US$ US$
Non-current assets
Property, plant and equipment 12 93,544,640 140,597,506
Intangible assets 13 620,331 7,664
Investment in associate companies 16 133,411 121,381
Trade and other receivables 17 19,750,486 16,720,701
114,048,868 157,447,252
Current assets
Inventories 18 18,122,391 18,695,048
Trade and other receivables 17 10,891,450 5,000,515
Cash and cash equivalents 19 31,224,696 339,997
60,238,537 24,035,560
Non-current liabilities
Trade and other payables 23 (70,850) (70,850)
Retirement benefits obligations 22 (3,154,594) (2,471,289)
Deferred tax liabilities 10 (557,047) (544,697)
Provision for mine rehabilitation 25 (4,270,571) (4,145,567)
(8,053,062) (7,232,403)
Current liabilities
Trade and other payables 23 (18,924,024) (16,063,666)
Loans - current portion 24 (6,890,400) (23,896,298)
Derivative liabilities 21 (6,869,769) (357,546)
(32,684,193) (40,317,510)
Net assets 133,550,150 133,932,899
Equity
Share capital 26 235,366 282,783
Share premium account 26 313,458 144,350
Capital redemption reserve 50,401 -
Treasury shares 26 (25,345,845) -
Acquisition of non-controlling interest reserve (5,107,515) (5,107,515)
Translation reserve 9,396,614 10,941,631
Re-measurement reserve (570,632) (249,740)
Other reserves 28 818,281 144,351
Profit and loss account 27 153,363,118 127,777,039
Non-controlling interests 14 396,904 -
133,550,150 133,932,899
Equity attributable to equity holders of the parent
The financial statements were approved by the Board of Directors on 16 May
2025 and were signed on its behalf by:
Darren Bowden, Chief Executive Officer
16 May 2025
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
Share capital Share premium account Capital redemption reserve Treasury shares Acquisition of non-controlling interest reserve Translation reserve Re-measurement reserve Other reserves Minority interests Profit and loss account Total equity
Note US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ US$
Balance at 1 January 2024 282,783 144,350 - - (5,107,515) 10,941,631 (249,740) 144,351 - 127,777,039 133,932,899
Exchange differences on translating foreign operations - - - - - (1,545,017) - - - (1,545,017)
Change in pension liability - - - - - - (320,892) - - - (320,892)
Profit for the year - - - - - - - - (10,211) 25,586,079 25,575,868
Total comprehensive income/(loss) for the year - - - - - (1,545,017) (320,892) - (10,211) 25,586,079 23,709,959
Share buy back (50,401) - 50,401 (25,345,845) - - - - - - (25,345,845)
Share-based payment 28 - - - - - - 673,930 - - 673,930
Share issue 26 2,984 169,108 - - - - - - - 172,092
Subsidiary acquisition - - - - - - - - 407,115 - 407,115
Balance at 31 December 2024 235,366 313,458 50,401 (25,345,845) (5,107,515) 9,396,614 (570,632) 818,281 396,904 153,363,118 133,550,150
Equity is the aggregate of the following:
· Share capital; being the nominal value of shares issued
· Share premium account; being the excess received over the nominal
value of shares issued less direct issue costs
· Capital redemption reserve; being the share capital of ordinary
shares held in Treasury
· Acquisition of non-controlling interest reserve; being the
amounts recognised on acquiring additional equity in a controlled subsidiary
· Translation reserve; being the foreign exchange differences on
the translation of foreign subsidiaries
· Re-measurement reserve; being the cumulative actuarial gains and
losses, return on plan assets and changes in the effect of the asset ceiling
(excluding net interest on defined benefit liability) that relate to the
Philippine pension obligations, recognised in other comprehensive income
· Other reserves; being the share-based payments expense
· Non-controlling interest; being the share of equity owned by
minority parties
· Profit and loss account; being the cumulative profit attributable
to equity shareholders
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
Share capital Share premium account Acquisition of non-controlling interest reserve Translation reserve Re-measurement reserve Other reserves Profit and loss account Total equity
Note US$ US$ US$ US$ US$ US$ US$ US$
Balance at 1 January 2023 281,638 - (5,107,515) 14,421,001 (472,649) 1,639,920 7,001,364 17,763,759
Exchange differences on translating foreign operations - - - (3,479,370) - - (3,479,370)
-
Change in pension liability - - - - 222,909 - - 222,909
Profit for the year - - - - - - 119,248,738 119,248,738
Total comprehensive income/(loss) for the year - - - (3,479,370) 222,909 - 119,248,738 115,992,277
Share-based payment 28 - - - - - 31,368 - 31,368
Share issued 26 1,145 144,350 - - - - - 145,495
Transfer of other reserve to profit and loss account 27 - - - - - (1,526,937) 1,526,937 -
Balance at 31 December 2023 282,783 144,350 (5,107,515) 10,941,631 (249,740) 144,351 127,777,039 133,932,899
Equity is the aggregate of the following:
· Share capital; being the nominal value of shares issued
· Share premium account; being the excess received over the nominal
value of shares issued less direct issue costs
· Acquisition of non-controlling interest reserve; being the
amounts recognised on acquiring additional equity in a controlled subsidiary
· Translation reserve; being the foreign exchange differences on
the translation of foreign subsidiaries
· Re-measurement reserve: being the cumulative actuarial gains and
losses, return on plan assets and changes in the effect of the asset ceiling
(excluding net interest on defined benefit liability) that relate to the
Philippine pension obligations, recognised in other comprehensive income
· Other reserves: being the cumulative fair value of warrants
associated with certain mezzanine debt facilities and share-based payments
expense. Upon the expiry of the relevant warrants the cumulative fair value of
warrants was transferred to profit and loss account
· Profit and loss account; being the cumulative profit attributable
to equity shareholders
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2024
2024 2023
Notes US$ US$
Net cash generated from operating activities 29 85,470,242 74,561,005
Investing activities
Purchase of subsidiaries, net cash acquired 14 (497,306) -
Interest income 148,751 374
Loan to Condor 17 (2,500,000) -
Purchase of property, plant and equipment (6,053,563) (10,250,030)
Net cash used in investing activities (8,902,118) (10,249,656)
Financing activities
Repayment of borrowing principal (23,896,298) (61,430,747)
Repayment of borrowing interest (3,338,575) (3,369,253)
Borrowings 24 6,890,400 -
Share issue 2,503 280
Off-market share buy back 26 (25,345,845) -
(45,687,815) (64,799,720)
Net cash used in financing activities
Net increase/(decrease) in cash and cash equivalents 30,880,309 (488,371)
Cash and cash equivalents at beginning of year 339,997 861,069
Foreign exchange difference 4,390 (32,701)
Cash and cash equivalents at end of year 31,224,696 339,997
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2024
2024 2023
Notes US$ US$
Non-current assets
Trade and other receivables 20 12,500,000 101,370,146
12,500,000 101,370,146
Current assets
Trade and other receivables 20 98,984,589 65,568,651
Cash and cash equivalents 19 27,281,596 51,034
126,266,185 65,619,685
Non-current liabilities
Trade and other payables 23 (170,940) (70,850)
(170,940) (70,850)
Current liabilities
Loans 24 (6,890,400) (23,893,712)
Trade and other payables 23 (1,548,304) (4,037,934)
Derivative liabilities 21 (519,589) (357,546)
(8,958,293) (28,289,192)
Net assets 129,636,952 138,629,789
Equity
Share capital 26 235,366 282,783
Share premium account 26 313,458 144,350
Capital redemption reserve 50,401 -
Treasury shares 26 (25,345,845) -
Translation reserve (4,135,798) (2,354,705)
Other reserves 28 818,281 144,351
Profit and loss account 27 157,701,089 140,413,010
Equity attributable to equity holders of the parent 129,636,952 138,629,789
The Company has taken advantage of the exemption provided under section 408 of
Companies Act 2006 not to publish an income statement or a statement of total
comprehensive income. The total comprehensive income for the year ended 31
December 2024 dealt with in the financial statements of the Company was
US$15,506,986 (2023: US$120,642,670).
The financial statements were approved by the Board of Directors on16 May 2025
and were signed on its behalf by:
Darren Bowden; Chief Executive Officer
16 May 2025
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEARS ENDED 31 DECEMBER 2024 & 31 DECEMBER 2023
Share capital Share premium account Profit and loss account Total equity
Note Capital redemption reserve Treasury shares Translation reserve Other reserves
US$ US$ US$ US$ US$ US$ US$ US$
281,638 - - (1,090,923) 1,639,920 16,979,621 17,810,256
Balance at 31 December 2022
- - - (1,263,782) - - (1,263,782)
Exchange differences on translating foreign currencies
Profit for the year - - - - - - 121,906,452 121,906,452
Total comprehensive income for the year - - - - (1,263,782) - 121,906,452 120,642,670
Share-based payment 28 - - - - - 31,368 - 31,368
Shares issued 1,145 144,350 - - - - - 145,495
Transfer of other reserve to profit and loss account - - - - - (1,526,937) 1,526,937 -
282,783 144,350 (2,354,705) 144,351 140,413,010 138,629,789
Balance at 31 December 2023 - -
- - (1,781,093) - - (1,781,093)
Exchange differences on translating foreign currencies - -
Profit for the year - - - - - - 17,288,079 17,288,079
Total comprehensive income for the year - - - - (1,781,093) - 17,288,079 15,506,986
Share buy-back (50,401) - 50,401 (25,345,845) - - - (25,345,845)
Share-based payment 28 - - - - - 673,930 - 673,930
Shares issued 2,984 169,108 - - - - 172,092
235,366 313,458 50,401 (4,135,798) 818,281 157,701,089 129,636,952
Balance at 31 December 2024 (25,345,845)
Equity is the aggregate of the following:
· Share capital; being the nominal value of shares issued
· Share premium account; being the excess received over the nominal
value of shares issued less direct issue costs
· Capital redemption reserve; being the share capital of ordinary
shares held in Treasury
· Translation reserve; being the foreign exchange differences
arising on the change of presentational currency and upon on the translation
of foreign currencies
· Other reserves: being the cumulative fair value of warrants
associated with certain mezzanine debt facilities and the share-based payments
expense. Upon the expiry of the relevant warrants the cumulative fair value of
warrants was transferred to profit and loss account
· Profit and loss account; being the cumulative profit attributable
to equity shareholders
COMPANY CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2024
2024 2023
Notes US$ US$
Net cash used in operating activities 29 (2,020,715) (112,740)
Investing activities
Interest income 147,809 -
Loan to Condor 20 (2,500,000) -
Net cash used in investing activities (2,352,191) -
Financing activities
Repayment of borrowing principal (23,893,712) (61,430,747)
Repayment of borrowing interest (3,338,575) (3,369,253)
Advances from subsidiaries 77,288,038 64,800,000
Borrowings 24 6,890,400 -
Shares issued 2,503 280
Off-market share buy back 26 (25,345,845) -
Net cash provided by financing activities 31,602,809 280
Net increase/(decrease) in cash and cash equivalents 27,229,903 (112,460)
Cash and cash equivalents at beginning of year 51,034 168,614
Foreign exchange difference 659 (5,120)
Cash and cash equivalents at end of year 27,281,596 51,034
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
1. Accounting policies
The principal accounting policies are summarised below. Except as elsewhere
disclosed, the accounting policies have all been applied consistently
throughout the period covered by these financial statements.
Basis of preparation
The financial information has been prepared on a historical cost basis, except
for derivative financial instruments, which are measured at fair value, and in
accordance with UK-adopted international accounting standards.
For the Group and its subsidiaries, US Dollars is both the functional and
presentational currency. Although the Company's functional currency is pounds
sterling, it uses US Dollars as its presentational currency, to better reflect
the underlying performance of that entity.
Going concern
The consolidated financial statements of the Group have been prepared on a
going concern basis, which contemplates the continuity of business activities
and the realisation of assets and the settlement of liabilities in the normal
course of business.
The Board of Directors believe that the Runruno Project will continue to
operate successfully and produce positive cash flows ensuring the continuing
viability of the Group and its ability to operate as a going concern, meeting
its commitments as and when they fall due.
Continued free cash generated from Runruno is more than sufficient to fund the
mine development and plant acquisitions required to bring the Nicaraguan La
India project into production by Q4 2026.
As a result, the Directors believe there is no material uncertainty over the
Group's going concern and that it is appropriate that the financial statements
should be prepared on a going concern basis.
Changes in accounting policies and disclosures
The accounting policies and disclosures applied in the preparation of these
financial statements are consistent with the accounting policies and
disclosures applied in the preparation of the prior period financial
statements.
New standards and interpretations
The financial statements have been drawn up on the basis of accounting
standards, interpretations and amendments effective from the beginning of the
accounting period on 1 January 2024. The new standards, interpretations and
amendments effective from 1 January 2024 had no significant impact on the
Group.
There are a number of international accounting standards, amendments to
standards, and interpretations which have been issued that are effective in
future accounting periods and which have not been adopted early. None of these
standards, amendments to standards or interpretations are expected to have a
significant effect on the Group.
Basis of consolidation
The Group's financial statements incorporate the financial statements of the
Company and its subsidiary undertakings for the year ended 31 December 2024. A
subsidiary is an entity controlled, directly or indirectly, by the Group.
Control exists when the Group is exposed, or has rights, to variable returns
from its involvement with the investee and has the ability to affect those
returns through its power over the investee.
The financial statements of the subsidiary companies have been included in the
Group's financial statements from the date of acquisition when control was
passed to the Group using the acquisition method of accounting. The Group
financial statements include the results of the Company and its subsidiaries
as if they were a single reporting entity. On consolidation, intra-Group
transactions and balances are eliminated.
Asset Acquisition
During the year, the Group acquired the entire share capital of Yamang Mineral
Corp Pte Ltd and 72.5% of the share capital of Yamang Mineral Corporation. In
assessing the acquisition, the Group determined that the activities and assets
acquired did not have the required inputs, processes and outputs to constitute
as a business under IFRS 3 and hence considered it to be an asset acquisition.
Foreign currency
The financial statements are presented in United States Dollar ("US$"). All
Group revenue, significant expenses and major sources of financing are
transacted in US$. Items included in the financial statements of the Company
are measured using the currency of the primary economic environment in which
the entity operates ("functional currency"). Individual companies in the
Group have different functional currencies,
Transactions in currencies different to the company's functional currency are
recorded at the rates of exchange prevailing on the dates of the transactions.
At each balance sheet date, monetary assets and liabilities that are
denominated in foreign currencies are retranslated at the rates prevailing on
the balance sheet date. Exchange gains and losses on the settlement of
monetary items are recognised in the statement of total comprehensive income.
On consolidation, the assets and liabilities are translated to US Dollars at
the rates prevailing at the balance sheet date. Income and expenses are
translated at the average exchange rates for the period. Exchange differences
are recognised within other comprehensive income in the consolidated statement
of total comprehensive income.
Share-based payments
The Company may enter into equity-settled share-based transactions with its
Directors, employees of its subsidiaries, its contractors or its lenders in
which the counterparty provides services/goods to the Company in exchange for
remuneration in the form of certain equity instruments of the Company. The
equity instruments can comprise of shares, warrants and share options.
The services/goods received by the Company in these share-based transactions
are measured by reference to the fair value of the equity instruments at the
date of grant and are recognised as an expense in the statement of total
comprehensive income with a corresponding increase other reserves in equity.
Inventories
Inventories of finished goods (bullion), gold in circuit and stockpiles of
processed ore are brought to account and stated at the lower of costs and
estimated net realisable value. Cost comprises direct materials, direct labour
and an appropriate proportion of variable and fixed overhead expenditure, the
latter being allocated based on normal operating capacity. Costs are
assigned to ore stockpiles and gold in circuit items of inventory based on
weighted average costs. Net realisable value is the estimated selling price
in the ordinary course of business (excluding derivatives) less the estimated
costs of completion and the estimated costs necessary to make the sale.
Consumables have been valued at cost less an appropriate provision for
obsolescence. Cost is determined on a first-in-first-out basis.
Taxation and deferred tax
Current tax is based on the taxable profit for the period. Taxable profit
differs from net profit as reported in the statement of total comprehensive
income because it excludes items of income or expense that are taxable or
deductible in other years and it further excludes items that are never taxable
or deductible. The Company's liability for current tax is calculated using tax
rates that have been substantively enacted by the balance sheet date.
Deferred tax is recognised on differences between the carrying amounts of
assets and liabilities in the financial statements and the corresponding tax
base used in the computation of taxable profit and is accounted for using the
balance sheet liability method. Deferred tax liabilities are generally
recognised for all taxable temporary differences and deferred tax assets are
recognised only to the extent it is probable that future taxable profits will
be available against which deductible temporary differences can be utilised.
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled or the asset realised. Deferred tax is
charged or credited, as applicable, as a taxation debit/credit to the
statement of total comprehensive income, except when it relates to items
charged or credited directly to other comprehensive income in which case, the
deferred tax is recognised in the other comprehensive income section within
the statement of total comprehensive income.
Deferred tax assets and liabilities are offset when the Group has a legally
enforceable right to offset current tax assets and liabilities and the
deferred tax assets and liabilities relate to taxes levied by the same tax
authority, on either the same taxable Group Company or different Group
entities, which intend to settle current tax assets and liabilities on a net
basis, or to realise the assets and settle the liabilities simultaneously, in
each future period in which significant amounts of deferred tax assets or
liabilities are expected to be settled or recovered.
Intangible assets
Exploration costs and mineral properties
Costs relating to acquiring mineral properties and the exploration of precious
and base metal properties are capitalised as intangible assets in the balance
sheet once the Group has obtained the legal right to explore an area.
Capitalised exploration costs are reclassified to tangible assets once
technical feasibility and commercial viability of extracting a mineral
resource are demonstrable. The capitalised exploration costs are tested for
impairment annually.
Where exploration costs have been incurred and capitalised for a specific
tenement and the commercial and technical requirements to demonstrate positive
economic returns using approved mining techniques has not been established,
the Company recognises these costs as an intangible asset and tests these
costs annually for impairment. These costs are considered fully impaired
unless the results of exploration indicate the presence of mineral resources
that have the potential to be defined as an inferred resource in accordance
with industry standards.
Other intangible assets
Other intangible assets relate to the excess consideration paid over net asset
value when making an asset acquisition.
Investments
Investments in subsidiaries are recognised at cost less any impairment losses
in the Company accounts.
Equity accounting is applied to investments in associates on a Group basis.
Investments in associates are recognised at the cost of investment as adjusted
for post-acquisition changes in the Group's share of net assets of the
associate. Losses of an associate in excess of the Group's interest in that
associate are recognised only to the extent that the Group has incurred legal
or constructive obligations or made payments on behalf of the associate.
Property, plant and equipment
Property, plant and equipment are initially recognised at cost plus directly
attributable expenses and are subsequently carried at cost less accumulated
depreciation and impairment losses. Property, plant and equipment are
depreciated over their expected useful lives, using the straight-line method.
The classes of depreciable assets, their expected useful lives and their
depreciation methods are:
Buildings & leasehold improvements 10
years
Straight-line
Drilling
equipment
5 years Straight-line
Motor
vehicles
3-5 years Straight-line
Fixtures, fittings and equipment 3
years Straight-line
Process
plant
applying the units of production over the useful life of the mine.
Residual Storage Impoundment applying
the units of production over the useful life of the mine.
Mining properties
applying the units of production over the useful life of the mine.
Mining properties costs have arisen entirely because of a reclassification of
the intangible assets deferred exploration costs, mine development costs,
advances to surface occupants, and mining licenses. As of 20 October 2011, the
extraction of gold from the Runruno site was assessed as being both
technically feasible and commercially viable. Further costs since this date
have been capitalised directly to mining properties.
Construction in progress costs are allocated to a property, plant and
equipment tangible asset category, once the relevant asset has been assessed
as being available for use as intended by management. The costs will be
treated as being reclassified and will be depreciated according to the adopted
method of the appropriate asset category.
Provision for mine rehabilitation and decommissioning
Provision is made for close down, restoration and environmental rehabilitation
costs (which include the dismantling and demolition of infrastructure, removal
of residual materials and remediation of disturbed areas) at the end of the
reporting period when the related environmental disturbance occurs, based on
the estimated future costs using information available at the end of the
reporting period. The provision is discounted using a current market-based
pre-tax discount rate and the unwinding of the discount is classified as net
finance and other costs in the statement of total comprehensive income. At
the time of establishing the provision, a corresponding asset is capitalised
and depreciated over future production from the operations to which it
relates.
The provision is reviewed on an annual basis for changes to obligations or
legislation or discount rates that affect change in cost estimates or life of
operations. The cost of the related asset is adjusted for changes in the
provision resulting from changes in the estimated cash flows or discount rate,
and the adjusted cost of the asset is depreciated prospectively.
Where rehabilitation is conducted systematically over the life of the
operation, rather than at the time of closure, provision is made for the
estimated outstanding continuous rehabilitation work at each end of the
reporting period and the cost is charged to the statement of total
comprehensive income.
Revenue recognition
Gold sales
The Group is principally engaged in the business of producing gold. Revenue is
recognised when the Group transfers control of its gold to a customer at the
amount at which payment is expected. Sales revenue represents the gross
proceeds receivable from the customer.
For gold sales, the enforceable contract is each purchase order, which is an
individual, short-term contract, while the performance obligation is the
delivery of the metals.
Recognition of sales revenue for the gold is based on determined metal in
concentrate and the London Bullion Market Association (LBMA) quoted prices,
net of smelting and related charges.
Revenue is recognised when control passes to the customer, which occurs at a
point in time when the metal concentrate is credited to the buyer's account
and provisionally paid by the buyer. Under the terms of offtake agreements
with the customer, the Company issues a provisional invoice for the entire
volume of concentrate loaded to the customer's vessel. A final invoice is made
thereafter upon customer's outturn of concentrates delivered and submission of
their final assay report. Adjustment is accordingly made against the final
invoice with respect to provisional collections received by the Company within
two days to determine amounts still owing from/to customers.
As the enforceable contract for the arrangements is the purchase order, the
transaction price is determined at the date of each sale (i.e., for each
separate contract) and, therefore, there is minimal future variability within
scope of IFRS 15 and no further remaining performance obligations under those
contracts.
Revenue from the immaterial sale of by-products such as silver is accounted
for as a credit to the cost of sales.
Financial instruments
Financial Assets
Financial assets are classified, at initial recognition, as subsequently
measured at amortised cost, fair value through other comprehensive income and
fair value through profit or loss.
Financial assets at amortized cost (debt instruments)
The Company measures financial assets at amortized cost if both of the
following conditions are met:
· The financial asset is held within a business model with the
objective to hold financial assets in order to collect contractual cash flows;
and
· The contractual terms of the financial asset give rise on
specified dates to cash flows that are solely for payments of principal and
interest on the principal amount outstanding.
Financial assets at amortised cost are subsequently measured using the
effective interest (EIR) method and are subject to impairment. Gains and
losses are recognised in the statement of comprehensive income when the asset
is derecognised, modified or impaired.
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial
liabilities at fair value through profit or loss, loans and borrowings,
payables, or as derivatives designated as economic, as appropriate.
All financial liabilities are recognised initially at fair value and, in the
case of loans and borrowings and other financial liabilities, net of directly
attributable transaction costs. The Company's financial liabilities include
payables, loans and borrowings and derivative forward contracts.
Subsequent measurement
Payables
This category pertains to financial liabilities that are not held for trading
or not designated as at fair value through profit or loss upon the inception
of the liability. These include liabilities arising from operations (e.g.,
accounts payable and accrued liabilities).
Payables, which include trade and other payables, are recognised initially at
fair value and are subsequently carried at amortised cost, taking into account
the impact of applying the EIR method of amortisation (or accretion) for any
related premium, discount and any directly attributable transaction cost.
Cash and cash equivalents
Cash consists of cash on hand, cash in banks and cash held in an escrow
account. Cash on hand is intended for small payments not covered by cheques or
direct transfers. Cash in banks are savings and current accounts in major
banks of high-quality credit standing, which earn interest at respective bank
rates. Cash held in escrow was cash held, in a high-quality bank, to satisfy
the cash consideration conditions pertaining to the offer to acquire Condor.
Loans and borrowings
After initial recognition, interest-bearing loans and borrowings are
subsequently measured at amortised cost using the EIR method. Gains and losses
are recognised in the profit or loss when the liabilities are derecognised as
well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on
acquisition and fees or costs that are an integral part of the EIR. The EIR
amortisation is included as finance costs in the statements of total
comprehensive income.
Derecognition
A financial liability is derecognised when the obligation under the liability
is discharged or cancelled or expires. When an existing financial liability
is replaced by another from the same lender on substantially different terms,
or the terms of an existing liability are substantially modified, such an
exchange or modification is treated as the de-recognition of the original
liability and the recognition of a new liability. The difference in the
respective carrying amounts is recognised in the statements of total
comprehensive income.
Derivative assets and liabilities
Derivative financial instruments (e.g. commodity derivatives such as forwards
and options to economically hedge exposure to fluctuations in gold prices and
foreign exchange rates) are initially recognised at fair value on the date on
which a derivative contract is entered into and are subsequently re-measured
at fair value. Derivatives are carried as assets when the fair value is
positive and as liabilities when the fair value is negative.
Derivatives are accounted for at fair value through profit or loss, where any
gains or losses arising from changes in fair value on derivatives are taken
directly to profit or loss for the year. As at 31 December 2024, the
derivative instruments held by the Group were gold price put/call option
contracts and USD:PHP exchange rate forward contracts.
Both the Group and the Company have recognised derivative liabilities as at 31
December 2024 arising from both gold price hedges and currency exchange rate
forward contracts.
Treasury shares
Shares held in Treasury are presented in other equity at the consideration
paid for them. No gain or loss on the purchase, sale, issue or cancellation is
recognised. Where such shares are subsequently reissued any consideration
received, net of directly attributable transaction costs and related income
tax effects, is included in equity attributable to the owners of the Company.
2. Critical accounting judgements and key sources of
estimation uncertainty
The preparation of financial statements in conformity with generally accepted
accounting practice requires management to make estimates, assumptions and
judgements that affect the application of policies, and reported amounts of
assets and liabilities as well as the disclosure of contingent assets and
liabilities at the balance sheet date.
Estimates and judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances. Actual results may differ
from reported amounts in the financial statements.
The key sources of estimation uncertainty and judgements which have a
significant risk of causing material adjustment to the carrying amounts of
assets and liabilities are:
Judgements
Impairment and impairment reversals of asset values
The Group assesses at each reporting date whether there are any indicators
that its assets and cash generating units (CGUs) may be impaired or require
previous impairment provisions to be reversed. Operating and economic
assumptions which could affect the valuation of assets using discounted cash
flow models are regularly reviewed and updated as part of the Group's
monitoring of operational and financial performance and forecasting processes.
Judgement is required in determining the level at which these assessments are
made, be that at the asset or CGU level. Further judgment of whether operating
and economic changes are significant and impact the performance potential of
an asset or CGU is required. These judgements determine whether there is an
indication of impairment or an impairment reversal is required. Such assets
are recorded in the consolidated balance sheet at their recoverable amount at
the date of the last impairment assessment (less annual
depreciation/amortisation); therefore a change in operational plans,
assumptions or economic conditions could result in further impairment or an
impairment reversal if an indicator is identified. Refer note 8.
Business combination
The acquisition of the majority of the Yamang Mineral Corp group ('YMC')
required that an assessment be made on whether the purchase involved
identifiable assets, such as cash, specific equipment and intellectual
property rights, without the concurrent acquisition of processes, workforce or
other essential inputs required for a going concern under IFRS 3.
Additionally, verification of whether the acquired set of activities does not
constitute a business as defined by IFRS 3, which includes inputs, processes
applied to these inputs and outputs , resulting in returns to investors. The
Group determined that the purchase did not have the required characteristics
above and the purchase was classified as an asset purchase. Refer note 14.
Estimates
Impairment and impairment reversals of asset values
An annual review is made of the carrying amount of an asset which may not be
recoverable, or has previously been subject to an impairment charge. An
asset's carrying value is written down, or conversely written up, to its
estimated recoverable amount (being the higher of the fair value less costs to
sell and value in use). To determine value in use the Group reviews future
operations using the latest life of mine (LOM) model detailing future cash
flows that the Runruno operation is expected to produce. The key assumptions
for these value-in-use calculations are those regarding risk discount rates,
the price of gold, gold recovery levels, plant availability levels, changes in
the resource statements and forecast changes in operational and CAPEX costs,
and the ability to renew its mining permit(s).
The net present value of these expected future cash flows is used, in
accordance with the requirements and limitations of IAS 36 - Impairment of
Assets, to determine if an impairment, or impairment reversal, is required.
Recovery of intercompany receivable accounts
Receivables due from group companies are assessed under the expected credit
losses model. In each case, the most appropriate assessment is for the Company
to consider the output from the impairment tests and value-in-use calculations
carried out in respect of the Group's mining properties, plant and equipment
assets.
In both FY2024 and FY2023 the Company booked a partial reversal of previous
impairments made against loans receivable from its subsidiaries. These
impairment reversals recognise the improved trading outcomes of operating
subsidiaries such that it is estimated that the Company will receive a larger
than previously estimated recovery of loans made to subsidiaries. The timing
of the repayment of these loans is unknown hence the split between current and
non-current receivables continues to be estimated.
Determination of mineral resources and ore reserves
The determination of mineral resources and ore reserves impacts the accounting
for asset carrying values, depreciation and amortisation rates, deferred
stripping costs and provisions for pensions and for decommissioning and
restoration.
There are numerous uncertainties inherent in estimating mineral resources and
ore reserves and assumptions that are valid at the time of estimation may
change significantly when new information becomes available. These estimates
are based upon the mineral resources and ore reserves estimate publicised in
February 2022, adjusted for mining depletion since that calculation was
performed. Refer page 7.
Changes in the forecast prices of commodities, exchange rates, production
costs or recovery rates may change the economic status of reserves and may,
ultimately, result in the reserves being restated which may impact asset
carrying values, depreciation and amortisation rates, deferred stripping costs
and relevant provisions.
Estimating gold-in-circuit and gold stockpile inventories
Gold-in-circuit is measured by the Company's metallurgists based on the gold
grade/recovery across different structures of the process plant. Stockpiles
are measured by estimating the number of tonnes added and removed from the
stockpile, the number of contained concentrates in dry metric tonnes is based
on assay data, and the estimated recovery percentage is based on the expected
processing outcomes. Stockpile tonnages are verified by periodic surveys.
Refer to note 18.
Although regular assay data is collected, and production recoveries closely
monitored, these estimates that are valid at the time of estimation may be
significantly different to the final gold recovered once processing of the
gold inventories is completed.
3. Revenue
2024 2023
US$ US$
Sale of gold doré 189,889,686 165,612,180
Sale of gold concentrate 1,259,929 1,070,696
191,149,615 166,682,876
All gold doré sales are made to a single refinery customer with 95% of sales
proceeds received within 3-5 days of the gold doré having been shipped from
the Runruno operation. Gold concentrate is sold with 50% received upon export
and the balance received following further assaying and final processing.
4. Operating profit for the year is stated after charging:
2024 2023
US$ US$
Depreciation of property, plant and equipment (note 12) 53,266,786 51,492,601
Amortisation (note 13) 7,664 25,385
Foreign exchange losses/(gains) 99,867 (2,642,249)
Staff costs (note 7) 12,314,666 12,154,186
Auditor's remuneration (note 5) 171,944 234,282
5. Auditor's remuneration
2024 2023
US$ US$
Fees payable to the Group and Company's auditor for the audit of the Group and 168,108 167,134
Company's accounts
- 11,447
Current auditor
Previous auditor*
Fees payable to the auditor for other services 3,836 -
Fees payable to the previous auditor for other services* - 13,660
Fees payable to the previous auditor for taxation compliance services* - 42,041
171,944 234,282
* fees paid to CLA Evelyn Partners Limited who served as the Group's external
auditor until December 2023
6. Segmental analysis
Operating segments have been identified based on the Group's internal
reporting to the Chief Operating Decision Maker ('CODM'). The CODM has been
determined to be the Board of Directors as it is primarily responsible for the
allocation of resources to segments and the assessment of performance of the
segments. The primary segments have been identified into two geographic areas
of the UK and Philippines (which includes Singapore holding companies). The
CODM uses 'profit/(loss) before tax', 'cash & cash equivalents' and 'total
liabilities' as the key measures of the segments' results and these measures
reflect the segments' underlying performance for the period under evaluation.
The segment results for FY2024 and FY2023 and the reconciliation of the
segment measures to the respective statutory items in the consolidated
financial information are as follows:
Year ended 31 December 2024 UK Philippines Total
US$ US$ US$
Segment results
Sales revenue - 191,149,615 191,149,615
Group operating (loss)/profit (2,566,383) 56,100,809 53,534,426
Other income and expenses (959,350) (2,359,753) (3,319,103)
Impairment charges - (9,065,277) (9,065,277)
Provision for derivative loss - (6,521,465) (6,521,465)
Share of profits of associates - 12,030 12,030
(Loss)/profit before tax (3,525,733) 38,166,344 36,640,611
Segment assets
Segment tangibles & intangibles - 94,164,971 94,164,971
Segment receivables & inventories 350,579 48,416,748 48,767,327
Segment cash 27,279,647 3,945,049 31,224,696
Equity-accounted investees - 133,411 133,411
Total segment assets 27,630,226 146,660,179 174,290,405
Segment liabilities
Segment loans (6,890,400) - (6,890,400)
Segment trade & other payables (1,313,509) (17,681,365) (18,994,874)
Segment provisions and retirement benefits obligations - (7,425,165) (7,425,165)
Segment derivative liabilities (519,589) (6,350,180) (6,869,769)
Segment deferred tax - (557,047) (557,047)
Total segment liabilities (8,723,498) (32,013,757) (40,737,255)
18,906,728 114,646,422 133,553,150
Total segment net assets
Segment other information
Income tax expense - 9,064,743 9,064,743
Amortisation of intangible assets - 7,664 7,664
Depreciation of property, plant and equipment - 53,266,786 70,475,909
Additions to property, plant and equipment - 6,178,568 6,178,568
Segment net assets are analysed net of intercompany transactions.
The results of each segment have been prepared using accounting policies
consistent with those of the Group as a whole.
Year ended 31 December 2023 UK Philippines Total
US$ US$ US$
Segment results
Sales revenue - 166,682,876 166,682,876
Group operating (loss)/profit (1,809,503) 30,982,821 29,173,318
Other income & charges (61,127) - (61,127)
Impairment reversal - 97,737,620 97,737,620
Finance costs (5,834,144) (1,476,317) (7,310,461)
Share of profits of associates - 15,970 15,970
(Loss)/profit before tax (7,704,774) 127,260,094 119,555,320
Segment assets
Segment tangibles & intangibles - 140,605,170 140,605,170
Segment receivables & inventories 192,001 40,224,263 40,416,264
Segment cash 49,074 290,923 339,997
Equity-accounted investees - 121,381 121,381
Total segment assets 241,075 181,241,737 181,482,812
Segment liabilities
Segment loans (23,893,712) (2,586) (23,896,298)
Segment trade & other payables (3,814,786) (12,319,730) (16,134,516)
Segment provisions and retirement benefits obligations - (6,616,856) (6,616,856)
Segment derivative liabilities (357,546) - (357,546)
Segment deferred tax - (544,697) (544,697)
Total segment liabilities (28,066,044) (19,483,869) (47,549,913)
(27,824,969) 161,757,868 133,932,899
Total segment net (liabilities)/assets
Segment other information
Income tax (benefit) - (306,582) (306,582)
Amortisation of intangible assets - 25,385 25,385
Depreciation of property, plant and equipment - 51,492,601 51,492,601
Additions to property, plant and equipment - 10,630,889 10,630,889
7. Staff numbers and costs - Group
2024 2023
The average number of persons, including Directors, was: Number Number
Administration 13 22
Development & operations 846 764
859 786
2024 2024
Staff costs of the above persons were: US$ US$
Wages and salaries 11,758,799 11,317,760
Social security costs 533,905 497,361
Retirement and pension costs 21,962 339,065
12,314,666 12,154,186
Refer to the Remuneration Report on pages 15-19 that includes details of the
components of Directors' emoluments and forms part of these financial
statements. The Directors are considered to be the key management personnel.
(1) Includes consulting fees paid to private consulting companies.
(2) Includes fees that were paid to his appointee, MTL Luxembourg Sarl in
accordance with a Relationship Agreement dated 23 October 2020.
Share options held by Directors:
As at 31 December 2024, the following share options, held by directors, were
outstanding:
Date of grant Exercise price Expiry date Number of Options Issued during year Options exercised during year Number of Options
31 December 2023 31 December 2024
28 October 2022 £0.0001 28 October 2025 6,600,000 - (6,600,000) -
17 June 2023 £0.0001 17 June 2025 6,600,000 - (6,600,000) -
28 June 2024 £0.0001 28 June 2027 - 6,600,000 - 6,600,000
27 August 2024 £0.0001 27 August 2031 - 9,500,000 - 9,500,000
8. Other charges and income applied against profit and
loss
8(a). Impairment reversal and impairment charge - Group
The FY2024 impairment charge of US$9.1 million consists of:
· PPE - US$nil impairment reversal (2023: US$100 million reversal),
· Receivables - US$5.9 million impairment expense (2023: US$0.9
million expense),
· Exploration expenditure - US$0.9 million impairment expense (2023:
US$0.4 million expense), and
· Inventory - US$2.3 million impairment expense (2023: US$1.7 million
expense).
Property, plant and equipment (PPE)
Under IAS 36 - Impairment of Assets, each asset that forms a cash generating
unit (CGU) should be tested at least annually for impairment. The Group
considers that the entire Runruno project (encompassing capitalised property,
plant and equipment, mining property costs and the provision for mine
rehabilitation and decommissioning) comprises a single cash generating unit as
the separate assets do not have the capacity to generate separate and distinct
cash flow streams. Accordingly, the annual recoverable value assessment made
in accordance with IAS 36 is made on a whole of project basis.
The Group assesses the recoverable amount of the Runruno project CGU based on
the value in use of the Runruno operations using cash flow projections over
the remaining expected LOM and at appropriate discount rates. Based on
assumptions current as at 31 December 2024 the Group reviewed its recent
operational performance and its future expectations based on the current
planned mining schedule to estimate the recoverable amount the Runruno project
could deliver.
The recoverable amount estimate was based on the following key assumptions and
source information:
· gold resources to be mined based on current estimated reserves and
resources and LOM mining schedule, adjusted for forecast mine and grade
dilution (refer to page 7 for the current estimate of gold resources);
· estimated average gold recoveries forecast to be achieved over the
remaining LOM based on average gold recoveries expected over the remaining
LOM, being 88.5%;
· estimated ongoing capital expenditure required for the remaining
LOM of US$10.1 million;
· estimated operating and administration costs for the remaining LOM
including a 3% inflation factor;
· future gold revenues based upon December 2024 the industry
consensus gold price predictions; and
· risk discount rate of 14.1% (2023: 13.3%).
Although the year ended December 2024 estimated recoverable value of the
Runruno project calculated in accordance with IAS 36 exceeded the book value
of the Group's property, plant and equipment (PPE), less the provision for
mine rehabilitation and decommissioning, no impairment reversal was made to
the Group's PPE book value during FY 2024 (2023: US$100 million impairment
reversal). Under IAS 36, the reversal of an impairment loss for an asset
(excluding goodwill) is limited to the extent that it does not exceed the
carrying amount that would have been determined (net of depreciation or
amortisation) had no impairment loss been recognised for the asset in prior
periods. This ensures that the asset's carrying amount does not surpass its
original value before impairment. Therefore, the remaining US$50 million
impairment shown in Note 12 has not been reversed due to this limitation.
The Company considered sensitivities of the carrying amount to changes in key
assumptions. This exercise confirmed that the range of reasonably possible
outcomes of the recoverable amount estimate was consistent with the Company's
valuation of these assets. Of the above key assumptions, the future price of
gold is considered the most important, and least certain, input in that
fluctuations as this variable has the greatest impact on future cash flows.
Additional commentary on the market risk and sensitivity analysis of gold
prices is contained on page 93 of the annual report.
Receivables due
Impairment charges have been raised against trade and other receivables due in
relation to VAT on importations and other goods and services. Under the fiscal
terms incorporated into the FTAA, the Group considers that these taxes and
duties were not payable up to June 2021. However, the Group continues to have
no success in securing appropriate refunds of these taxes up to the period
ended 30 June 2021. VAT refunds have been received in relation to periods from
the September 2021 quarter. However, the Group has not received 100% of its
VAT claims for various reasons. It is expected that the future recovery of VAT
will continue in a similar basis. Accordingly, an impairment charge was raised
during the year in relation to VAT the Group does not expect to fully
recover. (Refer note 17).
The total impairment charges raised against VAT receivables was US$5.7 million
(2022: US$0.9 million).
8(b). Impairment charge and impairment reversal - Company
Receivables due
To a large extent the Runruno project has been funded by loans from the parent
Company and these together with the Company's investment in its subsidiaries
and associates is represented by the value of the Runruno project CGU.
Previously the value of the Runruno project CGU resulted in these loans and
investments being fully impaired.
Subsequent reviews of the future estimated cash flows that the Runruno project
may produce have estimated that the Company's subsidiaries should be able to
repay a significant portion of these past parent Company advances. During
FY2024 the subsidiary loan receivable was reduced by US$77.2 million by
repayments to the parent Company.
The Company's estimates that its operations will produce future cash flows of
an order that will enable the full repayment of the parent Company loan to
some of its subsidiaries. As a result, the Company has booked an impairment
reversal in FY2024 of US$16.0 million in relation to loans due from both
Metals Exploration Pte Ltd and FCF Minerals Corporation.
8(c). Other income and expenses
2024 2023
US$ US$
Condor Gold takeover direct costs (note 36) (1,252,312) -
Exchange (loss)/gain (744,371) 3,421,672
Interest income 148,751 374
Loan interest and fees (note 24) (2,332,796) (10,732,507)
Share based payment expense (note 28) (673,930) (31,368)
Sundry income 46,813 -
Other income and expenses (3,319,103) (7,341,829)
9. Taxation
The taxation expense comprises the following
2024 2023
US$ US$
Current year corporation tax payable 8,945,430 410,227
Current year deferred tax expense/(benefit) 119,313 (103,645)
Total tax expense for the year 9,064,743 306,582
The total tax expense for the year can be reconciled to profit for the year as
follows:
Profit before tax 34,640,611 119,555,320
Tax on profit at UK corporation tax rate of 25% (2023: 19%) 8,660,153 22,715,511
Effects of:
Overseas income/(expenses) not taxable 116,123 (7,575)
Differing tax rates in different jurisdictions* - 7,854,159
Tax losses (utilised)/carried over not previously recognised 4,652,264 (7,470,974)
Non-taxable and non-allowable items** (3,980,627) (22,784,539)
Credit for tax paid in prior periods (383,170) -
Total taxation expense for the year 9,064,743 306,582
* No difference in tax rates between jurisdictions in FY2024.
** The main reason for the reduction is the tax impact of the US$100 million
PPE impairment reversal in FY2023.
10. Deferred tax liabilities
2024 2023
US$ US$
Undepleted asset retirement obligation 457,539 338,754
Capitalised expenses 131,638 131,638
Other (32,662) 74,303
556,515 544,695
The differences between the deferred tax expense through the Consolidated
Statement of Total Comprehensive Income and the deferred tax liability on the
Consolidated Balance Sheet has occurred from translation differences arising
on consolidation. Liabilities are translated using the closing foreign
exchange rate prevailing at 31 December 2024 whereas the foreign currency
composition of the statement of total comprehensive income is translated using
the average rate for the whole of the year.
Deferred tax asset
For the year ended 31 December 2024 the Group has net unused tax losses of
US$63.1 million (2023: US$64.4 million) available for offset against future
profits. However, due to the restricted ability to apply UK losses against
Group income, the deferred asset has not been recognised on the Consolidated
Balance Sheet due to uncertainty over its future reversal.
For the year ended 31 December 2024 the Group has net unused tax losses
available for offset against future profits as follows:
2024 2023
US$ US$
UK 63,122,755 64,419,462
Group unused tax losses available 63,122,755 64,419,462
11. Earnings per voting share
2024 2023
US$ US$
Earnings
Net profit attributable to equity shareholders for the purpose of basic and
diluted earnings per voting share
25,586,079 119,248,738
Number of shares
Weighted average number of ordinary shares for the purpose of
basic earnings per voting share
1,988,200,730 2,092,720,603
17,302,732 19,800,000
Number of dilutive shares under option
Weighted average number of ordinary shares for the purpose of 2,005,503,462 2,112,520,603
diluted earnings per voting share
Earnings per voting share
Cents per voting share Cents per voting share
Basic earnings 1.29 5.70
Diluted earnings 1.28 5.64
The earnings per voting share was calculated on the basis of net profit
attributable to equity shareholders divided by the weighted average number of
Ordinary Shares in issue, excluding Ordinary Shares held in Treasury.
12. Property, plant and equipment - Group
Motor vehicles Office furniture & equipment Buildings & leasehold improvements Drilling, mining & milling equipment Construction in progress (CIP) Residual Storage Impoundment Mining properties Total
Process plant (RSI)
US$ US$ US$ US$ US$ US$ US$ US$ US$
Cost
As at 1 January 2023 1,639,405 1,652,492 4,157,855 29,715,394 5,885,725 117,605,739 32,486,689 141,275,685 334,418,984
Additions 171,429 - 11,506 3,341,583 4,632,862 1,018,440 406,096 1,048,973 10,630,889
Re-classification - - - - (6,674,810) - 6,674,810 - -
As at 31 December 2023 1,810,834 1,652,492 4,169,361 33,056,977 3,843,777 118,624,179 39,567,595 142,324,658 345,049,873
Additions 27,148 26,441 - 2,188,224 3,312,584 534,313 61,117 28,741 6,178,568
Acquired on subsidiary purchase - - - 35,352 - - - - 35,352
As at 31 December 2024 1,837,982 1,678,933 4,169,361 35,280,553 7,156,361 119,158,492 39,628,712 142,353,399 351,263,793
Impairment
As at 1 January 2023 - - - - - (34,738,122) - (115,261,878) (150,000,000)
Reversal (refer note 8(a)) - - - - - 34,738,122 - 65,261,878 100,000,000
31 December 2023 - - - - - - - (50,000,000) (50,000,000)
As at 31 December 2024 - - - - - - - (50,000,000) (50,000,000)
Motor vehicles Office furniture & equipment Buildings & leasehold improvements Drilling, mining & milling equipment Construction in progress (CIP) Residual Storage Impoundment Mining properties Total
Process plant (RSI)
US$ US$ US$ US$ US$ US$ US$ US$ US$
Depreciation
As at 1 January 2023 (1,136,567) (1,601,008) (2,858,713) (19,292,413) - (45,223,819) (16,324,038) (16,523,208) (102,959,766)
Charge for the period (193,827) (26,532) (423,380) (4,278,287) - (20,852,988) (6,257,812) (19,459,774) (51,492,601)
As at 31 December 2023 (1,330,394) (1,627,540) (3,282,093) (23,570,700) - (66,076,807) (22,581,850) (35,982,982) (154,452,367)
Charge for the period (217,253) (22,605) (424,937) (5,106,631) - (21,249,111) (6,850,577) (19,395,672) (53,266,786)
As at 31 December 2024 (1,547,647) (1,650,145) (3,707,030) (28,677,331) - (87,325,918) (29,432,427) (55,378,654) (207,719,153)
Net book value
As at 31 December 2024 290,334 28,788 462,331 6,603,222 7,156,361 31,832,574 10,196,285 36,974,745 93,544,640
As at 31 December 2023 480,440 24,952 887,268 9,486,277 3,843,777 52,547,372 16,985,745 56,341,676 140,597,506
Refer note 8(a) for impairment charge/reversal consideration of these assets.
There are no security charges held over the Group's property, plant and
equipment.
13. Intangible assets
Group Evaluation and exploration assets
Other intangibles Software Total
US$ US$ US$
Cost
As at 1 January 2023 418,804 - - 1,126,192
Additions 631,019 - - 631,019
Written off in period (1,049,823) - - (1,049,823)
As at 31 December 2023 - - 707,388 707,388
Additions - 122,041 - 122,041
Intangibles arising from acquisition 237,019 261,271 - 498,290
As at 31 December 2024 237,019 383,312 707,388 1,327,719
Amortisation and impairment
As at 1 January 2023 (418,804) - (674,339) (1,093,143)
Written off in period 418,804 - - 418,804
Impairment charge for the period - - (25,385) (25,385)
As at 31 December 2023 - - (699,724) (699,724)
Amortisation charge for the period - - (7,664) (7,664)
As at 31 December 2024 - - (707,388) (707,388)
Net Book Value
As at 31 December 2024 237,019 383,312 - 620,331
As at 31 December 2023 - - 7,664 7,664
Other intangibles of US$261,271 relate to the excess consideration paid in
acquiring the YMC group together with the impact of the non-controlling
interests in the YMC Group. Refer Note 14.
14. Acquisition of Yamang Mineral Corp ("YMC") group
On 27 August 2024, the Group completed the acquisition of 100% of Yamang
Mineral Corp Pte Ltd, a Singaporean incorporated company and 72.5% of Yamang
Mineral Corporation, a Philippine incorporated company; for cash consideration
of US$1.6 million. Further, a condition of the sale was the issue of options
to subscribe for up to 41 million new Ordinary Shares, in exchange for
receiving no sale consideration upon YMC 'employee' shares that had been
issued with continuity of employment conditions. The Company issued options
mirror the employment conditions that were attached to the YMC employee
shares. The share-based payment expense relating to these options will be
expensed through profit and loss over the FY2024 and FY2025 periods.
Also, on 27 August 2024 the Group transferred 2.5% of Yamang Mineral
Corporation to the FCF Minerals Senior Staff Annuity Corporation.
The assets of the YMC companies included cash, ore processing rights, a
purpose built drill rig and drill consumables, and mineral title rights. YMC
had no significant direct workforce or infrastructure and a very early stage
exploration tenement that could not produce outputs and as a result the
transaction was treated as an asset acquisition rather than a business
combination.
Details of the YMC acquisition are as follows:
27 August 2024
Net YMC assets acquired US$
Cash 1,102,694
Other receivables 6,746
Evaluation and exploration assets 237,019
Intangibles arising from acquisition 261,271
Other liabilities (7,730)
1,600,000
Net assets acquired
Consideration paid
Cash 1,600,000
Total purchase price
1,600,000
15. Investments in subsidiaries - Company
2024 2023
US$ US$
Cost 8,783,629 8,783,629
Impairment brought forward (8,783,629) (8,783,629)
At 31 December - -
The Group subsidiaries are:
Company Registered office and country of incorporation Percentage holding Nature of business
Metals Exploration Pte Ltd 1 Harbourfront Avenue 100% Holding and investment company
#14-08 Keppel Bay Tower
098632 Singapore
FCF Minerals Corporation Unit 1407, Pacific Star Building, Sen. Gil Puyat Avenue cor. Makati Avenue, 100% FTAA licensee, holder of mining rights and gold production
Makati City, 1200 Philippines
MTL Philippines Ltd Unit 1407, Pacific Star Building, Sen. Gil Puyat Avenue cor. Makati Avenue, 100% To hold exploration rights
Makati City, 1200 Philippines
Faratuk Exploration and Mining Corporation Unit 1407, Pacific Star Building, Sen. Gil Puyat Avenue cor. Makati Avenue, 100% To hold exploration rights
Makati City, 1200 Philippines
Yamang Mineral Corporation Pte Ltd 1 Marina Boulevard, 100% Holding and investment company
#21-01 One Marina Boulevard
0189891 Singapore
Yamang Mineral Corporation Unit 1407, Pacific Star Building, Sen. Gil Puyat Avenue cor. Makati Avenue, 70.0% To hold exploration rights
Makati City, 1200 Philippines
Yamang Mineral Abra Corporation Unit 1407, Pacific Star Building, Sen. Gil Puyat Avenue cor. Makati Avenue, 79.0% To hold exploration rights
Makati City, 1200 Philippines
The principal place of business of the subsidiary companies listed above is
the same as their country of registration.
16. Investments in associates - Group
2024 2023
US$ US$
At 1 January 121,381 105,411
Share of profits of associates 12,030 15,970
At 31 December 133,411 121,381
Domicile Assets Liabilities Equity Sales Gains/(losses) Ownership of
US$ US$ at 31 Dec 2024 US$ US$ ordinary shares
Associate company US$ on issue
%
Philippines 2,616,645 2,283,783 332,862 87,131 45,781 39.99%
Cupati Holdings Corporation
Woggle Corporation Philippines 268,132 428,051 (159,919) - (15,707) 39.99%
The investments in associates are held indirectly by Metals Exploration Plc
through its investment in Metals Exploration Pte Ltd.
17. Trade and other receivables - Group
Group - Due after one year 2024 2023
US$ US$
Loan to Condor 2,500,000 -
Other receivables 17,250,486 16,720,701
19,750,486 16,720,701
Other receivables include VAT on importations and other goods and services.
Notwithstanding that until July 2021 the Group operated under an exemption
from paying these taxes, the Group has been unable to recover these past
government imposts that were paid prior to July 2021. Further, for periods
since then VAT recoveries have not been 100% of the VAT paid. As a result, an
impairment charge of US$5.7 million has been raised in FY2024 (FY2023: US$0.9
million).
As part of the Scheme of Arrangement to acquire Condor the Company had
provided Condor with an unsecured US$2,500,000 loan at an annual interest rate
of 10%. Upon the Company completing the takeover of Condor in January 2015
this loan has been classified as non-current.
Group - Due within one year 2024 2023
US$ US$
Receivables from gold sales 7,983,137 3,039,560
Other receivables 2,079,280 1,737,431
Prepayments 828,977 223,524
10,891,394 5,000,515
95% of receivables from gold doré sales are received within 3-5 days of the
gold doré having been shipped from the Runruno operation. The Group's trade
receivables are derived through sales of gold doré to a sole refinery
customer whose credit quality is assessed by considering the customers
financial position, past performance and other factors. The Group also sells
small amounts of gold concentrate to other refiners. Terms of trade for these
sales are 50% upon export with the balance received following further assaying
and final processing. Within 5 days of year end, the Group had collected 95%
(2023: 95%) of the trade receivables outstanding as at 31 December 2024. The
Group believes the credit risk is limited as the customers pay within a short
period of time and no provision for impairment of receivables has been made
(2023: Nil).
18. Inventories - Group
2024 2023
US$ US$
Gold doré on hand 2,499,509 1,850,797
Gold in circuit 1,302,836 1,249,891
Gold in ore stockpiles 4,459,003 4,578,999
Consumable inventories 12,891,526 13,265,361
Provision for obsolete consumable inventories (3,030,483) (2,250,000)
18,122,391 18,695,048
Gold inventories are recorded at the lower of cost and net realisable value.
During FY2024, consumable inventories recognised as an expense in cost of
sales was US$30.52 million (2023: US$31.04 million).
19. Cash and cash equivalents
Group 2024 2023
US$ US$
Cash on hand 7,438 8,193
Current accounts 4,039,076 331,804
Cash held in escrow account 27,178,182 -
31,224,696 339,997
Company 2024 2023
US$ US$
Current accounts 103,414 51,034
Cash held in escrow account 27,178,182 -
27,281,596 51,034
The Directors consider that the carrying amount of these assets is a
reasonable approximation of their fair value. The credit risk on liquid funds
is limited because the counter-parties are banks with a high credit rating.
At year end cash was held in an escrow account to satisfy the cash
consideration conditions pertaining to the offer to acquire Condor.
20. Trade and other receivables - Company
Company - Due after one year 2024 2023
US$ US$
Loan to Condor 2,500,000 -
Receivables from subsidiaries 10,000,000 101,370,146
12,500,000 101,370,146
Company - Due within one year 2024 2023
US$ US$
Receivables from subsidiaries 98,634,010 65,376,650
Other receivables 282,167 101,695
Prepayments 68,412 90,306
98,984,589 65,568,651
A provision for impairment of receivables from subsidiaries was raised in
FY2018 using an expected credit loss model, as the recovery of amounts from
the subsidiaries was uncertain. Based upon the expected future cash flows to
be generated from the Runruno mining operations the loans due from both FCF
Minerals Corporation and Metals Exploration Pte Ltd are no longer considered
impaired. Accordingly, in FY2024, an impairment reversal of US$16.0 million
has been booked against the FY2018 impairment. Refer to note 8(b).
The split between current and non-current receivables from subsidiaries has
been estimated based upon the expected loan repayments to be made to the
parent Company by the subsidiaries during FY2025.
21. Derivative instruments
Gold option contracts
During the period the Group's gold price hedge policy was extended, at the
request of its lenders, to cover a 24 month period rather than a 12 month
period, with the aim of ensuring the full debt repayment irrespective of a
significant drop in the gold price. The Group did this by contracting zero
cost gold price collar contracts that consist of buying put options, offset by
selling call options.
During FY2024 hedge contract price protection covered 49,200 ounces of gold
production. During FY2024, gold price increases resulted in several prior sold
call options being exercised such that gold production was delivered at prices
lower than spot prices at the time of delivery. The total gold sales revenue
forgone, in FY2024, due to the exercise of these prior sold call options was
US$5.9 million (2023: US$Nil).
During FY2023 hedge contract price protection covered 36,000 ounces of gold
production. These contracts settled at no profit or loss to the Group.
As at 31 December 2024, the Group had outstanding hedge contracts in place
over 15,800 ounces of gold production; with put options at US$1,850 offset by
sold call options ranging from US$2,0179 - US$2,275 per ounce (FY2023: 34,500
ounces with put options ranging from US$1,745 to US$1,850 offset by sold call
options ranging from US$2,053 - US$2,435 per ounce).
The Group and the Company have recognised a current liability as at 31
December 2024 of US$6.35 million (2023: US$Nil) being the estimated future
sales revenue forgone arising from the exercise of prior sold call options
based upon the spot price of gold as at 31 December 2024.
Philippine Peso forward contracts
The Group incurs significant costs in Philippine Peso and acquires forward
USD:Peso exchange contracts as insurance against adverse foreign exchange
movements.
As at year-end, the Group has forward contracts to purchase Philippine Peso
during FY2025 and FY2026 totalling US$39 million at an average FOREX rate of
57.11 (FY2024: US$22.5 million at 54.26).
The Group and the Company have recognised a current liability as at 31
December 2024 of US$0.5 million (2023: US$0.4 million) being the change in the
fair value of the forward contract value based on the same USD:PHP exchange
rate.
22. Retirement benefits obligations - Group
The Group has an unfunded, non-contributory defined benefit retirement plan
covering substantially all regular employees who have rendered at least six
months of continuous service. Benefits are dependent on the years of service
and the respective employee's compensation. The valuation of the retirement
plan obligation is determined using the projected unit credit actuarial cost
method. There was no planned termination, curtailment or settlement in either
2024 or 2023.
The relevant Philippine regulatory framework, RA 7641, known as the
'Retirement Pay Law', requires a provision for retirement pay to qualified
private sector employees in the absence of any retirement benefits under any
collective bargaining and other agreements being not less than those provided
under the law.
The amounts of retirement benefits costs recognised in the statements of
comprehensive income are determined as follows:
2024 2023
US$ US$
Current service costs 289,178 348,957
Interest costs 130,406 136,307
419,584 485,264
The amounts were distributed as follows:
2024 2023
US$ US$
Cost of sales 275,098 333,782
Administration costs 14,080 15,175
Interest costs 130,406 136,307
419,584 485,264
Changes in the present value of the unfunded retirement benefits liability are
determined as follows:
2024 2023
US$ US$
Balance at beginning of year 2,471,289 2,463,112
Current service costs 289,178 348,957
Interest costs 130,406 136,307
Benefits paid (164,134) (179,876)
Actuarial loss/(gain) due to:
Changes in financial assumptions 75,666 13,924
Experience adjustments 352,189 (311,135)
Balance at year end 3,154,594 2,471,289
22. Retirement benefits obligations - Group (continued)
The principal assumptions used in determining the defined benefit retirement
plan obligations are as follows:
2024 2023
Discount rate 6.18% 5.99%
Salary increase rate 3.50% 2.00%
Expected remaining working lives of employees 2 years 2 years
14% at age 18 decreasing to 0% at age 60 14% at age 18 decreasing to 0% at age 60
Turnover rate
2017 Philippine Intercompany Mortality Table 2017 Philippine Intercompany Mortality Table
Mortality rate
1952 Disability Study, Period 2, Benefit 5 1952 Disability Study, Period 2, Benefit 5
Disability rate
The sensitivity analyses below has been determined based on reasonably
possible changes of each significant assumption on the defined benefits
retirement liability as at the end of the reporting period, assuming all other
assumptions were held constant:
Increase/ 2024 2023
(decrease) US$ US$
Discount rates +1% 2,879,677 2,241,045
-1% 2,960,928 2,346,926
Salary pay increases +1% 2,975,966 2,360,103
Shown below is the maturity analysis of the undiscounted benefit payments:
2024 2023
US$ US$
Less than one year 57,122 24,205
More than one year to five years 3,820,264 3,355,889
3,877,386 3,380,094
23. Trade and other payables
Due within one year
Group 2024 2023
US$ US$
Trade payables 8,141,209 8,864,315
Other payables 208,076 1,083,842
Income tax payable 8,184,977 -
Other tax and social security payable 332,661 222,174
Accruals 2,057,101 2,413,573
Provisions - 3,479,762
18,924,024 16,063,666
Company 2024 2023
US$ US$
Trade payables 1,202,458 282,873
Other tax and social security payable 113,109 116,622
Accruals 232,737 158,677
Provisions - 3,479,762
1,548,304 4,037,934
Due after one year
Group 2024 2023
US$ US$
Amount owing to associate 70,850 70,850
70,850 70,850
Company 2024 2023
US$ US$
Amount owing to associate 70,850 70,850
Amount owing to subsidiary 100,090 -
170,940 70,850
Trade payables comprise amounts outstanding for trade purchases and on-going
costs, and together with other payables and accruals are measured at amortised
cost. FY2023 provisions included accruals related to potential extra mezzanine
loan interest and associated legal fees.
24. Loans
In October 2020 the Group completed a debt restructuring of its senior and
mezzanine debt together with the creation of a £100,000 revolving credit
facility ('RCF'). Under the debt restructure the Group was not required to
meet any fixed interest and principal repayment schedule.
Finalisation of the Group's senior and mezzanine debt facilities was
protracted due to an inability to effect the elevation of the mezzanine debt
to a fully secured status due to a dispute over the applicable interest rate
and several disputed debt covenant breaches. However, in June 2024, the Group
entered into full and final settlements with the lenders, including payment of
the final principal/interest and agreed appropriate lender legal fees.
During FY2024, total senior debt payments of US$2,817 (FY2023: US$ Nil) were
made. During FY2024, total mezzanine debt payments of US$27.2 million were
made (FY2023: US$35.0 million). Included in the US$27.2 million debt payments
was $3.4 million loan interest.
In addition, as part of the settlement, the Revolving Credit Facility was
terminated as part of the RHL Buy Back (refer note 26) and RHL Production fee
agreements (refer note 35), with no termination fee payable to either lender.
On 28 November 2024, MTL entered into a bridging loan agreement with its
second largest shareholder, Drachs whereby Drachs provided a £5,500,000
short-term loan to be utilised in connection with the acquisition of Condor.
The Drachs loan was fully repaid in March 2025.
As at 31 December 2024 the outstanding loan position was:
Group 2024 2023
US$ US$
Senior loans due within one year - 2,586
Mezzanine loans due within one year - 23,893,712
Short-term bridging loan 6,890,400 -
Total loans due within one year 6,890,400 23,896,298
Company
2024 2023
US$ US$
Mezzanine loans due within one year - 23,893,712
Short-term bridging loan 6,890,400 -
6,890,400 23,893,712
25. Provision for mine rehabilitation and decommissioning
2024 2023
US$ US$
At 1 January 4,145,567 3,764,708
Unwinding of discount and effect of change in estimate 125,004 380,859
At 31 December 4,270,571 4,145,567
The Group makes provision for the future cost of rehabilitation of the process
plant on a discounted basis. Provision for mine rehabilitation and
decommissioning represents the present value of future rehabilitation and
decommissioning costs. These provisions have been created based on the Group's
internal estimates, updated on a periodic basis. These estimated costs were
reviewed in December 2024 and include labour, equipment hire, consumables and
transportation for disposal, with the provision being unwound for inflation
and interest charges for FY2024. Assumptions, based on the current economic
environment, have been made which management believes are a reasonable basis
upon which to estimate the future liability. However, actual costs will
ultimately depend upon future market prices for the necessary works required
which will reflect market conditions at the relevant time. Furthermore, the
timing of the rehabilitation and expenditure of other costs is likely to
depend on when the mine ceases to produce at economically viable rates, and
the timing that the event for which the other provisions provided for will
occur.
26. Called up share capital and share premium
During August and September 2024, the Company completed the off-market buy
back of the RHL's then 18.6% interest in the ordinary shares in issue. As at
31 December 2024 these 393,513,302 shares were held in Treasury and have no
voting rights.
In April and June 2024, following the exercise of options, the Company issued
19,800,000 new Ordinary Shares. In August 2024, the Company issued 3,785,446
new Ordinary Shares in lieu of a cash bonus to management.
In June 2023, the Company issued 7,147,850 new Ordinary Shares in lieu of a
cash bonus to management. In December 2023, following the exercise of options,
the Company issued 2,200,000 new Ordinary Shares.
The issued capital of the Company is:
December 2024 December 2023 December 2024 December 2023
Number of shares Number of shares US$ US$
Ordinary shares of £0.0001 par value
Opening balance 2,098,144,271 2,088,796,421 282,783 281,638
Shares issued 23,585,446 9,347,850 2,984 1,145
Treasury shares (393,513,302) - (50,401) -
Closing balance - voting shares 1,728,216,415 2,098,144,271 235,366 282,783
Share premium
Opening balance 144,350 -
Shares issued 169,108 144,350
Closing balance 313,458 144,350
Share rights
Ordinary Shares confer the right to vote and to participate in dividends,
capital, and other distributions including on winding up. Ordinary Shares are
not redeemable. Shares held in Treasury do not have voting rights.
27. Profit and loss
During August and September 2024, the Company completed the off-market buy
back of 393,513,302 shares at an acquisition price of 5p per share. The
premium in excess of the share capital applicable to these shares has been
offset against accumulated profits. In FY2023 the warrant fair value reserve
was transferred from other reserves to profit and loss following the expiry of
the relevant warrants.
The movement in the profit and loss account is:
2024 2023
US$ US$
Group 127,777,039 7,001,364
Opening balance
Profit for the year attributable to equity holders of the parent 25,586,079 119,248,738
Transfer from other reserves - 1,526,937
At 31 December 153,363,118 127,777,039
Company
Opening balance 140,413,010 16,979,621
Profit for the year 17,288,079 121,906,452
Transfer from other reserves - 1,526,937
At 31 December 157,701,089 140,413,010
28. Share-based payments
Directors' share options
During FY2024 the Company issued 6,600,000 options, exercisable at nominal par
value, on or before 28 June 2029. No share options were issued during FY2023.
Total director options on hand as at 31 December were:
FY2021 tranche 2024 2023
Number of options Number of options
Options on issue at 1 January 13,200,000 19,800,000
Options exercised (13,20,000) -
Options lapsed - (4,400,000)
Options on issue at 31 December - 15,400,000
Options that have vested as at 31 December - 11,000,000
FY2023 tranche
Opening balance 6,600,000 -
Options exercised (6,600,000) 6,600,000
Options on issue at 31 December - 6,600,000
Options that have vested as at 31 December - 2,200,000
FY2024 tranche(1)
Opening balance - -
Options issued 6,600,000 -
Options on issue at 31 December 6,600,000 -
Options that have vested as at 31 December 2,200,000 -
(1 ) These options are subject to the following vesting conditions:
· Provided the option holder remains a director then, one third vest
upon issue, one third vest on the first anniversary of issue and one third
vest upon the second anniversary of issue;
· The FY2024 issued options has a vesting hurdle that the Company's
30 day volume weighted average price of each Company share traded on AIM has
to exceed £0.04862 during the life of the option. This vesting hurdle has
been satisfied as at year end.
The share-based payment expense, based upon a fair value measurement of the
options, recognised in FY2024 was US$124,560 (2023: US$31,368).
The fair value measurement of the FY2024 options, using a Black-Scholes option
valuation model, was £0.0247 per option, based upon the following:
· Share price at the date of option issue of £0.037,
· Option exercise price of £0.0001,
· Estimated share volatility of 110%,
· Option life of 3 years,
· Nil dividends during the life of the options,
· Risk-free interest rate of 4.6%,
· Discount to factor the market price exercise hurdle - 33%.
The fair value measurement, using a Black-Scholes option valuation model, of
the FY2023 options was £0.0076 per option, based upon the following:
· Share price at the date of option issue of £0.0115,
· Option exercise price of £0.0001,
· Estimated share volatility of 105%,
· Option life of 3 years,
· Nil dividends during the life of the options,
· Risk-free interest rate of 2.3%,
· Discount to factor the market price exercise hurdle - 33%
YMC purchase Tranche B options(2)
In August 2024, the Company issued 41 million Tranche B options, as a
condition to the purchase of the YMC group (refer note 14). The Tranche B
options are exercisable at nominal par value, on or before 27 August 2031.
Tranche B options(2) 2024 2023
Number of options Number of options
Options on issue at 1 January - -
Options issued 41,000,000 -
Options lapsed (2,500,000) -
Options on issue at 31 December 38,500,000 -
Options that have vested as at 31 December - -
(2) These options are subject to the holder continuing to be an
employee/consultant to the Group until 31 December 2025.
The share-based payment expense in relation to the Tranche B options, based
upon a fair value measurement of the options, recognised in FY2024 was
US$549,370 (2023: US$nil).
The fair value measurement of the Tranche B options, using a Black-Scholes
option valuation model, was £0.0534 per option, based upon the following:
· Share price at the date of issue of £0.0535,
· Option exercise price of £0.0001,
· Estimated share volatility of 50-65%,
· Option life of 3 years,
· Nil dividends during the life of the options,
· Risk-free interest rate of 4.23%,
29. Net cash generated from/(used in) operating activities
Group 2024 2023
US$ US$
Profit after tax 25,575,868 119,248,738
Depreciation and amortisation 53,274,450 51,517,985
Provisions 6,521,465 29,759
Impairment (reversal net) 9,065,277 (97,318,816)
Share of (profits) of associates (12,030) (15,970)
Share based payment expense 673,930 31,368
Shares issued in lieu of cash bonus 169,589 145,215
Interest income (148,751) (374)
Finance expenses 1,588,425 10,732,133
Foreign exchange loss/(gain) 2,977,540 (2,642,249)
(Increase) in receivables (14,152,125) (10,048,701)
(Increase)/Decrease in inventories (1,710,092) 820,441
Increase in payables 1,646,696 2,061,476
Net cash generated from operating activities 85,470,242 74,561,005
Company 2024 2023
US$ US$
Profit after tax 17,288,079 121,906,452
Impairment (reversal) (16,340,839) (127,385,827)
Provisions 171,285 29,759
Share based expense 673,930 31,368
Shares issued in lieu of cash bonus 169,589 145,215
Finance expenses 714,451 10,433,567
Interest income (147,809) -
Foreign exchange loss/(gain) 2,162,346 (4,599,498)
Increase in receivables (4,222,115) (3,606,499)
(Decrease)/increase in payables (2,489,632) 2,932,723
Net cash used in operating activities (2,020,715) (112,740)
30. Reconciliation of liabilities from financing activities
1 January 2024 Non-cash movements 31 December 2024
Group Cash flow
US$ US$ US$ US$
Loans (current) 23,896,298 (17,005,898) - 6,890,400
23,896,298 (17,005,898) - 6,890,400
Company
Loans (current) 23,893,712 (17,003,312) - 6,890,400
23,893,712 (17,003,312) - 6,890,400
31. Capital commitments
As at 31 December 2024 the Group had US$nil outstanding capital commitments
(2023: US$nil).
32. Related party transactions
Only members of the Board of Directors of Metals Exploration plc are deemed to
be key management personnel. The Board has responsibility for planning,
controlling and directing the activities of the Group. Key management
compensation is disclosed in the Remuneration Committee report, Directors'
emoluments section and note 28, Share-based payments. At period end the
following amounts were due in relation to Directors' emoluments:
Amounts owing to Directors 2024 2023
US$ US$
G Walker - 5,194
Fees in relation to corporate broking and research services were paid to
Hannam & Partners, of which Non-Executive Director Mr A Chubb is a
partner. In FY2024, the total fees paid to Hannam & Partners were
US$250,653 (2023: US$70,000).
Refer to note 24 for loans payable to related parties.
During the year, the Company received US$77.2 million in loan repayments from
a subsidiary (2023: US$64.8 million). At the year end, the Company had loans
due by its subsidiaries totalling US$97.8 million (2023: US$171 million). As
at 31 December 2024 loans owed by subsidiaries were impaired to a net
recoverable amount of US$95.8 million (2023: US$155 million). (Refer note
8(b)).
At the year end, the Group owed US$70,850 (2023: US$70,850) to its associates
and the Group was owed US$2.72 million (2023: US$2.27 million) from its
associates. This amount owing has been fully written off.
33. Financial instruments
The Group's financial instruments comprise cash and cash equivalents,
borrowings, derivative gold price and currency contracts, and items such as
trade payables and trade receivables which arise directly from its operations.
The main purpose of these financial instruments is to provide finance for the
Group's operations.
The carrying values of financial assets at the year-end are as follows:
Trade and other receivables
Group Cash and cash equivalents
Total
US$ US$ US$
As at 31 December 2024 31,224,696 14,006,970 45,231,666
As at 31 December 2023 339,997 5,861,738 6,201,735
Company
As at 31 December 2024 27,281,596 111,206,628 138,488,224
As at 31 December 2023 51,034 166,837,102 166,888,136
Cash and cash equivalents and trade and other receivables are held at
amortised cost. Trade and other receivable financial assets excludes VAT and
other government receivables.
The carrying values of financial liabilities at the year-end are as follows:
Accruals and other payables
Group Trade payables Derivative liabilities
Loans Total
US$ US$ US$ US$ US$
As at 31 December 2024 8,141,641 2,336,027 6,869,769 6,890,400 24,237,837
As at 31 December 2023 8,864,315 7,048,027 357,546 23,896,298 40,166,186
Company
As at 31 December 2024 1,202,458 403,675 519,589 6,890,400 9,016,122
As at 31 December 2023 282,873 3,709,289 357,546 23,893,712 28,243,420
Trade payables, accruals and other payables and loans are held at amortised
cost.
The Group's operations expose it to a variety of financial risks including
liquidity risk, foreign currency exchange rate risk, commodity price risk and
credit risk. The policies set by the Board of Directors are implemented by the
Group's finance departments and senior management.
Liquidity risk
The Group actively monitors its cash resources to ensure it has sufficient
available funds for operations and planned expansions. The Group was cash flow
positive in both FY2023 and FY2024 and surplus funds have been applied, in the
main, to reduce the Group's borrowings.
The contractual maturities of the financial liabilities at the year-end are as
follows:
Group
Trade and other payables Derivative liabilities Loans Total*
US$ US$ US$ US$
As at 31 December 2024
1 - 6 months 10,739,047 4,441,097 6,890,400 22,070,976
6 - 12 months - 2,428,672 - 2,428,672
1 - 2 years - - - -
2 - 5 years 70,850 - - 70,850
Total contractual cash flows 10,810,329 6,869,769 6,890,400 24,570,498
As at 31 December 2023
1 - 6 months 16,063,666 211,804 23,896,298 40,171,768
6 - 12 months - 145,742 - 145,742
1 - 2 years - - - -
2 - 5 years 70,850 - - 70,850
Total contractual cash flows 16,134,516 357,546 23,896,298 40,388,360
Company Trade and other payables Derivative liabilities Loans Total*
US$ US$ US$ US$
As at 31 December 2024
1 - 6 months 1,548,302 181,137 6,890,400 8,619,839
6 - 12 months - 338,452 - 338,452
1 - 2 years - - - -
2 - 5 years 170,940 - - 170,940
Total contractual cash flows 1,719,242 519,589 6,890,400 9,129,231
As at 31 December 2023
1 - 6 months 4,037,934 211,804 23,893,712 28,143,450
6 - 12 months - 145,742 - 145,742
1 - 2 years - - - -
2 - 5 years 70,850 - - 70,850
Total contractual cash flows 4,108,784 357,546 23,893,712 28,360,042
Credit risk
Credit risk is the risk of financial loss to the Group or Company if the
counterparty to a financial instrument fails to meet its contractual
obligations. The Group and Company are exposed to credit risk attributable to
its cash balances; however, this risk is limited because the counterparties
are large international banks.
The Group is exposed to credit risk for trade receivables due from third
parties. This risk is limited because the counterparties to the gold sales are
internationally recognised substantial organisations. Further, the Group
receives significant payment for the gold upon the presentation of
transportation documents. Based on the above, the Group considers the expected
credit loss to be immaterial and no provision for expected credit loss has
been required (2023: US$nil).
Other receivables include VAT on importations and other goods and services
paid by the Group. An impairment charge has been raised on the basis that the
Group does not expect to fully recover these amounts. As at 31 December 2024
an accumulated impairment charge of US$13.0 million (2023: US$7.3 million) has
been recognised.
The Company is exposed to credit risk to the extent that amounts owed by its
subsidiaries and associates may not be recoverable in the future. An
impairment reversal has been raised in relation amounts owed by its
subsidiaries to partly reverse a FY2018 expected credit loss.
The maximum exposure to credit risk at the year-end is best represented by the
carrying amounts of trade and other receivables, and cash and cash
equivalents.
Market risk and sensitivity analysis
Commodity price risk
The market price of gold is one of the most significant factors in determining
the profitability of the Group's operations. The price of gold is subject to
volatile price movements over short periods of time and is affected by
numerous industry and macro-economic factors that are beyond the Group's
control. In 2024 the gold price ranged from US$1,990 to US$2,790 per ounce,
and the Group received an average gold selling price of US$2,312 per ounce
(2023: US$1,944 per ounce).
Refer to note 21 for details of the Group's financial instruments with
exposure to gold prices beyond December 2024.
The impact of a 10% increase/decrease in the Group's average gold sale price
achieved during the financial year would have resulted in the Group's profit
before tax being decreased/increased by US$19.1 million (2023: US$16.7
million). The impact is expressed on the assumption that the market price
changes by 10% with all other variables held constant.
Interest rate risk
The Group has interest bearing assets comprising cash and cash equivalents
which earn interest at a variable rate. Interest income is not material to the
Group.
At year-end the Group had a short-term any interest-bearing liability that was
fully repaid in March 2025. During FY2024 the Group recorded an interest
expense of US$1,739,059 (2023: US$9,216,477).
Foreign currency exchange rate risk
The Group and Company are exposed to foreign currency exchange rate risk
having cashflows predominantly in US Dollars, Philippine Pesos and Pounds
Sterling. The Group monitors exchange rates actively and converts funds raised
to other currencies when deemed appropriate in order to meet expected future
foreign currency commitments.
The Group's major currency risk is the USD:PHP exchange rate. During 2024, the
Group converted US$77.9 million into Philippine Peso (2023: US$80.6 million).
A 10% increase/decrease in the US Dollar during the year, with all other
variables held constant, would have resulted in the profit before tax being
US$7.1 million higher or US$8.7 million lower (2023: US$7.3 million higher or
US$9.0 million lower).
As at 31 December 2024 the Group had Philippine Pesos denominated assets and
liabilities including cash of US$296,000 and current liabilities of
US$15,154,000 (2023: cash of US$188,000 and current liabilities of
US$8,824,000). The currency risk exposure from these assets and liabilities is
covered by the Philippine currency forward contracts in place as at 31
December 2024.
Refer to note 21 for details of the Group's hedging instruments to protect
against currency risk.
34. Capital risk management
The Group's objectives when managing capital are to safeguard the Group's
ability to continue as a going concern, to provide returns for shareholders
and maintain an optimal capital structure to reduce the cost of capital.
The capital structure of the Group consists of net debt, which includes
borrowings (note 24), cash and cash equivalents (note 19) and equity (note
26).
The Group is not subject to any externally imposed capital requirements.
35. Contingent liabilities
The Group has no contingent liabilities identified as at 31 December 2024
(2023: US$nil) other than;
· As part of the acquisition of Condor Gold plc the Company has
committed to pay deferred consideration of:
a) US$14.4 million to Condor contingent value right ('CVR') holders should
gold production commence at the Condor within 5 years from 23 April 2025; and
b) US$18 per ounce to Condor CVR holders should total gold resources be
identified on the Condor tenements, within 5 years from 23 April 2025, in
excess of 3,198k ounces, capped at an additional 800,000 ounces (US$14.4
million); and
· In June 2024, the Company entered into a Production Fee agreement
with RHL as part of the settlement of all debt related issues. Under this
agreement the Company will pay RHL production fee of US$164 per ounce of gold
produced from the Runruno contract area on any production from 1 May 2024 that
exceeds 204,269 ounces (being equal to approximately 105 per cent. of the then
current forecast for production from such date on the basis of the Group's
life of mine plan for the Runruno mine). It is not currently possible to
determine whether any Production Fee payments will be made.
36. Post balance sheet events
Acquisition of Condor Gold plc
On 15 January 2025, the Company completed the acquisition of 100% of Condor
via a court approved Scheme of Arrangement. Condor holds significant gold
exploration licences in Nicaragua.
The initial consideration paid to Condor shareholders was satisfied as
follows:
· Cash payment of £20.27 million (US$24.73 million);
· The issue of 830,145,141 new Ordinary Shares at an issue price of
£0.057 per share;
· The issue of 31,671,104 warrants to acquire new Ordinary Shares on
or before 21 January 2028 at an exercise price of £0.0605 per share; and
· The issue of 108,192,284 options to acquire new Ordinary Shares at
various expiry dates up to 29 May 2029, at various exercise prices ranging
from £0.0397 to £0.0829 per share.
In addition, each Condor shareholder received one CVR that provides for
potential future consideration, to be earned within 5 years from 23 April
2025, as follows:
· Cash payment of US$14.4 million upon the first gold doré pour from
a fully commissioned process plant processing ore mined from Condor tenement
areas; and
· Up to a maximum of a further US$14.4 million, paid in either cash
or MTL shares, on the basis of US$18 per ounce of additional contained gold
JORC Mineral Resource discovered on the Condor tenement areas in excess of a
total 3.158million ounces ('Moz') of gold, subject to a cap of 800,000 ounces
above 3.158 Moz.
The initial estimate of the fair value of Condor's assets acquired and
liabilities assumed, at the date of acquisition based upon an unaudited Condor
consolidated balance sheet as at 15 January 2015 are:
Net Condor assets acquired US$'000s
Cash 1,543
Other receivables 815
Plant and equipment 9,727
Mineral properties 44,739
Other liabilities (4,479)
Total identifiable net assets 52,345
Excess consideration paid 34,184
86,529
Net assets acquired
Consideration paid*
Cash 24,726
Direct acquisition costs 1,327
Shares issued 57,722
Share-based payment expense re warrants and options 2,754
86,529
Total consideration
* A further maximum US$28.8 million may be payable to Condor shareholders
subject to achieving certain hurdles over the next 5-year period - refer note
35.
The initial accounting for the acquisition of Condor is incomplete as at the
date of these financial statements given the short time since the acquisition
was completed.
Equity issues
· On 5 February 2025, the Company issued 318 million options to
acquire new Ordinary Shares in accordance with the Company's long-term
incentive programme;
· On 12 February 2025, the Company issued 13,563,930 Ordinary Shares
at an average issue price of £0.03439 per share in accordance with the
Company's 2022, 2023 and 2024 short-term management incentive programmes; and
· On 7 March 2025, the Company repaid its bridging loan by the
transfer from Treasury of 94,127,854 Ordinary Shares at a price of 6p per
Ordinary Share.
Other than noted above there has not been any matter or circumstance that has
arisen after balance date that has significantly affected, or may
significantly affect, the operations of the Group, the results of those
operations, or the state of affairs of the Group in future financial periods.
37. Ultimate controlling parties
Although the Company has no ultimate controlling party, as at the date of this
report, companies associated with the Candy Group owns 24.5% and Drachs owns
16.1% of the Company's voting shares. These groups are considered to be
parties holding significant influence. Under separate relationship agreements
with the Company both Candy and Drachs have the right to appoint a director to
the Company's board while they own more than 15% of the Company's voting
shares.
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