REG - Metals Exploration - Final Results for the Year Ended 31 December 2025
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RNS Number : 3564F Metals Exploration PLC 22 May 2026
Metals Exploration
3(rd) Floor,
22a St James Square, London, SW1Y 4JH
Email: info@metalsexploration.com (mailto:info@metalsexploration.com)
22 May 2026
METALS EXPLORATION PLC
Final Results for the Year Ended 31 December 2025
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 2025 ("FY2025" or the "Period").
The financial information set out in this announcement does not comprise the
Group's statutory accounts for the years ended 31 December 2025 or 31 December
2024. The financial information has been extracted from the statutory accounts
of the Group and the Company for the years ended 31 December 2025 and 31
December 2024. The auditors reported on those accounts; the 31 December 2025
and 31 December 2024 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 2024 have been delivered to the Registrar of
Companies, whereas those for the year ended 31 December 2025 will be delivered
to the Registrar of Companies following the Company's annual general meeting.
To access a full version of the 2025 annual report, please go to the Company
website investor centre webpage:
https://metalsexploration.com/investors/results-and-reports/
(https://metalsexploration.com/investors/results-and-reports/)
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 developing the
La India gold project, a two-hour drive north of Managua, the capital city.
Further, the Group has a portfolio of exploration projects in both the
Philippines and Nicaragua.
GROUP VISION & MISSION STATEMENT
The Group's vision is to be the most admired mining company 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.
GROUP VALUES
The core corporate values of the Group, as identified by our employees are:
Prevent Harm Care and Respect
Act Honestly Be Accountable
Seek Excellence Innovate
Acknowledge Success Be Fearless
GROUP GOLDEN RULES OF SAFETY
At all Group locations the following Golden Rules of Safety are in place and
reinforced regularly:
· 1 - FIT FOR DUTY
Do not carry out a task under the influence of alcohol and drugs and unless
fit and able for duty
· 2 - MOBILE EQUIPMENT
Do not operate mobile equipment without being trained and authorised
· 3 - WORKING AT HEIGHT
Never work over 1.8 meters without being trained and certified
· 4 - ISOLATION
All equipment shall be isolated correctly with lock and tag before being
worked on
· 5 - SAFETY DEVICES
Do not disable any safety protection system or safety devices
· 6 - LIFTING OPERATIONS
Never place any part of your body under a suspended load
· 7 - CONFINED SPACES
Do not enter a confined space unless trained and authorised
· 8 - EXPLOSIVES
Never handle explosives unless authorised
OPERATION AND FINANCIAL HIGHLIGHTS
FY2025 FY2024 CHANGE
GOLD PRODUCTION (ounces)
65,287 oz 83,897 oz Down 22.2%
AVERAGE GOLD RECOVERY (% of head grade)
88.4% 90.5% Down 2.3%
LOST TIME INJURIES
1 Nil Up 1
SALES REVENUE (US$ millions)
$208.4 $191.1 Up 9.1%
OPERATING PROFIT (US$ millions)
$61.6 $53.5 Up 15.1%
ADJUSTED EBITDA (US$ millions)
(EBITDA less other non-cash expenses - refer page 9)
$125.9 $98.7 Up 27.6%
FREE CASH GENERATED FROM OPERATIONS (US$ millions)
$115.3 $96.7 Up 19.2%
NET DEBT (US$ millions)
$Nil $6.8 Down 100%
LA INDIA GOLD PROJECT CONSTRUCTION (% completion)
33% - N/a
LA INDIA GOLD PROJECT CONSTRUCTION EXPENDITURE (US$ millions)
$72.6 - N/a
TOTAL PHILIPPINE GOVERNMENT TAXES & FEES (US$ millions)
$22.4 $19.8 Up 13%
TOTAL PHILIPPINE COMMUNITY PROGRAMME EXPENDITURE (US$ millions)
$2.0 $1.9 Up 5%
CHAIRMAN'S STATEMENT
Dear Shareholder,
The year ended 31 December 2025 represented a period of significant strategic
progress for Metals Exploration, during which the Board remained focused on
the continuation of strong cashflow generation from Runruno, and the
fast-tracked construction and development of the La India gold project in
Nicaragua.
Operations
In FY2025, the Group achieved its strongest financial performance in history,
with record gold revenue of US$208.4 million, resulting in record positive
free cashflow of US$115.3 million. This performance was supported by the
continued robust operational performance at Runruno, as well as the favourable
gold price environment.
Production from Runruno was at the lower end of the revised FY2025 lower
guidance, at 65,287 ounces. The reduction came as a result of production
delays caused by a BIOX cyanide contamination issue during Q3 2025, and the
impact of Super-typhoon Uwan in Q4 2025. Mining operations at Runruno are
expected to be completed during H2 2026, with processing operations set to
conclude at the end of FY2026.
In order to replace the cashflow generated by Runruno and continue the Group's
growth trajectory, in January 2025, Metals Exploration completed the
acquisition of Condor Gold plc ("Condor") and its 587 square kilometres
("km(2)") concession package in Nicaragua. Condor held key assets in the La
India Gold Mining District, including the La India gold project. The rationale
behind the acquisition was La India's attractive project economics and
construction-ready status, providing the Group with a low capex-intensity,
high-grade asset with proven scale and expected gold production of over
100,000 ounces per annum.
Following the completion of the acquisition, the Group's major priority during
the Period was advancing the construction and development of La India ahead of
first production, targeted for December 2026. The Group achieved significant
progress in this domain during FY2025, across management, permitting,
construction, and operational readiness, with project development at 33%
complete at year-end, slightly ahead of schedule and within budget.
Noteworthy developments during the Period include the establishment of a
strong in‑country leadership team through the recruitment of key
Spanish‑speaking executives. Constructive relationships have also been built
with government authorities and local communities, including the conclusion of
an agreement on the process and compensation for the relocation of artisanal
miners from the project area. Major capital items have been secured with the
purchase of a fit‑for‑purpose gold processing and concentrating plant, and
the project's growth potential has been strengthened by upgrading the plant
design throughput from 1.4 million tonnes per annum ("mtpa") to 1.8 mtpa. On
the ground, development has advanced well. Bulk earthworks for the
processing plant are now complete, the run-of-mine ("ROM") pad is finished and
first ore has been stockpiled. Additionally, the construction of key
infrastructure is progressing ahead of schedule, with camp and accommodation
buildings already operational.
Development of the La India project has continued to progress post-Period end,
with construction now approximately 50% complete and tracking ahead of
schedule. Core activities, including bulk earthworks, process plant
foundations and site infrastructure, are all progressing well. Key milestones
achieved include the award of major installation contracts, commencement of
tailings storage facility construction, and ongoing works on the 138-kilovolt
substation in partnership with ENATREL, Nicaragua's national electricity
transmission company. The Group also secured a 25‑year renewal of the main
mining concession, effective from January 2027.
To date, construction and development of La India has been entirely funded by
free cash flow generated from Runruno, and this is expected to continue until
first production. However, to avoid any delays to development or working
capital constraints as a result of the timing of cash flows generated from
Runruno, the Group has secured an undrawn US$30 million gold pre-pay facility.
Exploration
In tandem with construction activities at La India, the Group has conducted
exploration work to delineate the upside potential that the project provides.
To date, the Group has completed over 16,000 metres of drilling, with the
focus on step-out drilling from planned mining areas and exploration drilling
at the Cacao deposit. Currently, two drill rigs are operating at the La India
Project, with one rig dedicated to extension drilling adjacent to the planned
mining areas and the other dedicated to exploration at high priority targets.
Post-Period end in April 2026, the Group was granted four additional highly
prospective exploration concessions adjacent to the La India Project, covering
a combined area of 64,400 hectares. Within these concessions, four high
priority targets have been identified.
The Group continued to progress its exploration projects in the Philippines
during FY2025. At Dupax, following the grant of the exploration licence in
August 2025, initial geophysical surveys and limited drilling were undertaken.
The Group has concluded that an economic resource would not be able to be
defined in time to support the conversion of the Runruno process plant to
process Dupax ore. Consequently, no further short-term exploration at Dupax is
planned and alternative options for repurposing the Runruno plant are being
evaluated. At the Abra project, drilling was deferred during FY2025 pending
completion of mandated consultations with local indigenous communities. These
discussions are continuing, and the Group is targeting commencement of an
initial drill programme in the later part of 2026.
Health, Safety and Sustainability
Maintaining a safe working environment remains a key focus for Metals
Exploration. After more than eight years without a lost-time injury ("LTI"),
an incident at Runruno on 30 March 2025 resulted in an employee sustaining
burns and requiring hospital treatment. The employee has since returned to
work following a full recovery, and the Group has not experienced any further
LTIs since that date.
The Group also maintains its strong commitment to transparency and
sustainability, publishing an annual sustainability report, currently focused
on its Philippine operations. In April 2026, the Group released its 2025
sustainability report prepared in accordance with the Global Reporting
Initiative (GRI) Standards, providing stakeholders with a comprehensive
overview of sustainability performance, governance practices, and
climate-related risks. While this level of reporting is not yet applicable to
the La India project in Nicaragua, given that construction is ongoing, the
Group intends to implement appropriate protocols to ensure comparable
sustainability reporting once commercial production begins.
Outlook
FY2025 marked an excellent year for the Group, both in terms of cashflow
generation from Runruno, and the successful acquisition of, and construction
and development progress made at, La India. The Group entered 2026 debt free,
with significant cash in the bank from operations at Runruno, and a clear path
to production at La India, set for December 2026.
The Group has revised its FY2026 gold production guidance for Runruno to
40,000 - 48,000 ounces, reflecting BIOX circuit disruption from ore toxicity
in Stages 5 and 6, a geological model downgrade following grade control
drilling, and the impact of historical illegal small scale mining activity on
recoverable ounces. Despite these challenges and the reduction in production,
the Company expects to generate similar free cash flow during FY2026 to that
generated during FY2025 to continue to fund the development of La India.
The Board eagerly anticipates the commencement of gold production at La India
and looks forward to development updates throughout the course of FY2026,
ahead of the first gold pour in December 2026.
In addition, the Group will continue to undertake exploration activities
across its portfolio in the Philippines and Nicaragua and will continue to
evaluate further growth and M&A opportunities.
On behalf of the Board, I would like to thank the management team and our
teams in the Philippines and Nicaragua for their hard work in FY2025. I would
also like to thank our stakeholders and shareholders for their continued
support. We look forward to seeing the Group's success continue in FY2026.
Steven Smith
Non-Executive Chairman
21 May 2026
CHIEF EXECUTIVE OFFICER'S STRATEGIC REPORT
Metals Exploration is pleased to report on another excellent year with record
gold sales revenue and notable progress having been made in the construction
and development of the La India gold project in Nicaragua. Gold production for
the year was at the lower end of the revised annual gold production guidance
at 65,287 ounces. Gold production in H2 2025 was impacted by the cyanide
contamination of the BIOX circuit in Q3 2025 and the power loss due to damage
from Super-typhoon Uwan in Q4 2025.
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 pour its first gold doré prior to the end of gold
production from the Runruno mining licence area. Since year-end the Group has
expanded and strengthen its foothold in Nicaragua with both the renewal of the
main La India mining concession and the award of four new La India adjacent
concessions.
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. 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 made a full
recovery and returned to work in Q2 2025. The Group has not suffered a further
LTI.
A safe working culture is actively promoted by dedicated occupational safety
and health personnel 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.
All employees and contractors are to be congratulated on the Group's
outstanding performance in this area.
CORPORATE
Financial Year 2025 ("FY2025") Overview
Operational profit was US$61.6 million (FY2024: US$53.5 million) following
gold production for FY2025 of 65,287 ounces, lower than FY2024's production of
83,897 ounces. As forecast, the average head grade dropped to 1.21 grammes per
tonne ("g/t") in FY2025 compared to 1.34 g/t in FY2024. The gold production
was achieved with average gold recovery of 88.4%, down from 90.5% in FY2024,
having been impacted by both a cyanide contamination in Q3 2025 and the
processing of a large amount of lower recovery transitional material.
The all-in-sustaining-cost ("AISC") for FY2025 was US$1,368 per ounce ("/oz")
(FY2024: US$1,135 /oz), which was above the FY2025 AISC guidance of US$1,325
per ounce due to the lower ounces sold.
During FY2025, the rising gold price resulted in an average sales price of
US$3,154 /oz (FY2024: US$2,312 /oz). The average sales price achieved for
FY2025 was negatively impacted by the 15,800 ounces of historical gold price
hedges that were filled during the year at an average gold price of US$2,223
/oz.
Total sales during FY2025 were US$208.4 million (FY2024: US$191.1 million),
generating free cash from operations of US$115.3 million (FY2024: US$96.7
million).
Financial Performance
Despite some production setbacks in H2 2025, operations during FY2025 produced
a strong financial outcome for the Group. Set out below is a reconciliation of
Consolidated Operating Profit to an alternate non-IFRS compliant performance
measure that management believes provides a better measure of the Group's
performance for the year:
2025 2024
US$'000s US$'000s
Operating profit before income tax 45,120 34,640
Add back:
Interest 849 1,739
Depreciation and amortisation 59,254 53,274
EBITDA 105,223 89,653
Add back:
Impairment (reversal)/ expense, net* (909) 9,065
Share-based payment expense** 21,622 705
EBITDA, impairments and share-based payments 125,936 99,423
* Impairment reversals, net
The net impairment (reversal)/charge relates to:
2025 2024
US$'000s US$'000s
Receivables (note 8a) (800) 5,908
Exploration 1,362 874
Inventory 674 2,283
Property, plant and equipment (note 8a) (2,145) -
Net impairment (reversal)/charge (909) 9,065
** Share-based payment expense
The increase in the share-based payment expense relates mainly to the issue of
the Company's long-term incentive programme ("LTIP") options in February and
June 2025. As previously noted, the implementation of the LTIP had been
delayed for several years due to various disputes with the Group's debt
providers. Following satisfaction of vesting hurdles during the Period,
approximately 70% of the LTIP options were exercised. This has resulted in
bringing to account the full share-based payment expense relating to the
exercised options in FY2025, rather than having this expense spread over the
life of the options.
Group Debt
As at year end the Group was debt free.
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 94,127,854 new ordinary shares from
Treasury at a price of 6p per share.
PHILIPPINES - RUNRUNO MINE
Mining Operations
Total material moved during FY2025 was above forecast at 10.7 million tonnes
("Mt") (FY2024: 11.3Mt).
Mining operations during FY2025 were conducted in Stages 4, 5 and 6.
Unfortunately, mining operations in Stage 5 and 6 encountered significantly
more voids from illegal mining activities than had been expected. In-pit
backfilling of prior stages continued, thereby reducing 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 during H2 2026.
Given the approaching end of mine life at Runruno, there has been no
calculation of an updated ore reserve statement for the Runruno mine. Total
material movements forecast for FY2026 are 10.0Mt with 1.0Mt of ore expected
to be mined. Operations in FY2026 will mainly be conducted in Stages 5 and 6,
where limited resource definition drilling has been conducted. Ongoing grade
control drilling will determine the final amount of ore to be mined from these
stages. Unfortunately, these resource definition activities are continuing to
discover previously unmapped voids from illegal mining activity.
All relevant permits for operations remain in place for the Runruno mine.
Process Plant
During Q3 2025, gold processing was paused following a cyanide contamination
which impacted the BIOX circuit. This contamination required all BIOX tanks to
be emptied and cleaned before the tanks could be refilled with new material
and return the gold-in-circuit balance to normal levels.
The prime source of the contamination was identified as being residual cyanide
material found in several illegal miners' tunnels in Stages 5 and 6 of the
mine. This contamination resulted in an approximate six-week deferral of ore
processing at Runruno while the cause of the contamination was investigated,
and to allow new ore process monitoring and production procedures to be
implemented.
Ore from these areas will be stockpiled separately for eventual production
towards the end of processing operations at Runruno, after the BIOX circuit
has been decommissioned. This event led to a change in the mining schedule in
Q4 2025.
A further approximately seven day pause in processing operations occurred in
November 2025, due to the loss of mains power to site as a result of damage to
the National power grid caused by Super-typhoon Uwan. Production was paused
while repairs to the power grid were conducted in various parts of the Nueva
Viscaya province. Back-up generators ensured no loss of BIOX bacteria.
Apart from the above issues, the plant performance in FY2025 was satisfactory.
During FY2025, the Group achieved an overall gold recovery of 88.4%, down from
90.5% in FY2024. The drop in recovery rates is mainly a result of the cyanide
contamination issue, a lower head grade and the processing of a larger amount
of transitional material (lower recovery material) during the year.
Total gold produced in FY2025 was 65,287 ounces compared to 83,897 ounces in
FY2024, with the reduction in ounces produced reflecting the issues noted
above.
Processing operations are expected to continue through to the end of FY2026,
however it is not expected that any significant production will occur at
Runruno during FY2027.
Additional unplanned downtime during FY2025 resulted mainly from tails line
failures and repairs to the SAG mill girth gear, conveyor belts and return
water line.
As at year end, in order to comply with IAS 36 - Impairment of Assets, there
remains a US$47.9 million impairment charge against the Runruno property,
plant and equipment assets, giving a net book value of these assets
approximately US$46 million. An impairment reversal US$2.1 million was made in
2025 due to the ceiling imposed by application of IAS 36. However, the
directors consider the true value of these assets could be significantly
higher than this and an alternate use for these assets either in the
Philippines or elsewhere is being investigated.
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.
A final lift to the RSI is expected to be completed in Q2 2026, while
construction of the in-rock final spillway is expected to be completed in H2
2026. 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.
The performance of the RSI is continuously monitored by independent consulting
engineers.
Government and Industry Awards
During Q4 2025, the Group was awarded the following Philippine Government
awards:
· Presidential Mineral Industry Environmental Award (PMIEA) in the
Surface Mining Operation Category 2025, awarded for the fourth consecutive
year.
· Best Safety Inspector in Plant Category.
In addition, the Company once again represented the Philippines at the ASEAN
Mineral Awards, winning a 1st Runner up Mineral Processing Award.
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
Dupax
Upon grant of the Dupax exploration licence in August 2025, the Company
undertook an Induced Polarisation ("IP") ground geophysics survey designed to
assist in developing a 2,500 metre initial drill programme. The results of the
first drill programme indicated that the target ore zone is deeper than
expected, requiring significantly more drilling before an economic resource
can be outlined. As a result, the Company has concluded that an economic
resource at Dupax will not be able to be defined within a period such that the
Runruno process plant can be converted to process Dupax ore. As a result,
other options to re-purpose the Runruno plant are being considered. No further
exploration work at Dupax is planned in the short-term.
Abra
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 40 million ounces ("Moz") 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 three key highly prospective copper-gold
porphyry targets, Manikbel, Donenglay and Boliney.
No drilling activities were undertaken in FY2025 due to ongoing government
required consultations with the numerous local indigenous communities,
facilitated by the National Commission for Indigenous Peoples. These
consultations are advancing and the Company hopes to be able to commence its
initial drill programme on the Abra tenement later in H2 2026.
The primary prospect, Manikbel, shows a strong correlation between copper
("Cu") with encouraging assay results from rock samples (for example up to
3.5% Cu from several primary outcrops) centered on a magnetic low, with a
historical drill result for a 120-metre drill hole showing an average grade of
1.1% Cu open at depth. 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 of a significant scale measuring 2.5km by 1.5km.
NICARAGUA
Condor Gold plc Acquisition
In January 2025, the Company completed the acquisition of 100% of the issued
and to be issued share capital of Condor. Refer to note 14 for more
information on the acquisition. The Condor group of companies held an
extensive tenement package, including the construction ready La India gold
project, in the La India region, approximately two hours drive from the
Nicaraguan capital city, Managua.
La India Gold Project Construction and Development
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 an initial gold pour in December 2026. As at year end, the
development of the La India project was slightly ahead of schedule at 33%
complete and within the current budget. Key milestones achieved in FY2025
included:
· The recruitment of key Spanish speaking executives to join the
Nicaraguan in-country management team, including the General Manager, VP
Sustainability and Project Director - 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.
· Purchasing a fit for purpose second hand gold ore processing and
concentrating plant (including crushers, conveyors, grinding ball mill,
gravity circuit, smelting equipment and laboratory), including all component
and construction drawings.
· The processing plant throughput capacity design has been upgraded
to 1.8 mtpa from 1.4 mtpa, in anticipation of future growth opportunities.
· Completion of bulk earthworks for the processing plant and
technical services area.
· The ROM pad is complete, and the first ore has commenced
stockpiling.
· Construction of key infrastructure is continuing to progress ahead
of schedule; with several camp accommodation buildings completed and
operational.
La India Gold Reserves Statement
As part of the takeover of Condor, Metals Exploration has committed to a
minimum of 40,000 metres of drilling over an initial five year period, from
April 2025. Additional resources discovered from this initial drilling may
result in further takeover consideration being paid to Condor shareholders
(refer to note 14 for further details). The gold resources held by Condor at
the time of the takeover were based upon a gold resource statement issued in a
technical report dated October 2022 as follows.
Category Cut-off Tonnes (kt) Au Grade (g/t) Total oz contained gold Au (koz)
Indicated 0.5g/t (OP) 206 9.9 66
0.65g/t (OP) 8,487 3 827
2.0g/t (UG) 979 6.2 194
Subtotal Indicated: 9,672 3.5 1,088
Inferred 0.5g/t (OP) 1,939 3.3 208
0.65g/t (OP) 1,087 2.4 84
2.0g/t (UG) 5,616 5 898
Subtotal Inferred: 8,642 4.3 1,190
Total Indicated and Inferred 2,278
The level of drilling undertaken to date by the Company has not warranted a
new gold resource statement to be issued. It is expected that the Company will
issue an updated gold resource statement during H2 2026.
Tenement Holdings
At the time of acquisition Condor held a portfolio of concessions in three
locations of Nicaragua that covered an area of 648.66 km(2). The main La India
concession consists of 587.66 km(2). Since year-end the Company has secured a
25-year renewal of the La India concession. In addition, post year-end the
Company was awarded four new concessions adjacent to the La India project
area. Refer to the Company's announcement dated 10 April 2026.
La India exploration
After acquiring the La India Project, the Company mobilised a drill rig to the
La India site on 23 April 2025. In the Period to year-end, the Company
completed a total of 8,931 metres of drilling. To date, the Company's focus
has been on step-out out drilling from planned mining areas and exploration
drilling at Cacao. A second drill rig was mobilised to site in Q3 2025 to
accelerate drilling activity. The two drill rigs continue to operate at the La
Inda Project, with one rig dedicated to extensional drilling adjacent to the
planned mining areas and the other dedicated to exploration at high priority
targets.
The Company's own on-site laboratory will become fully operational by the end
of Q2 2026. Until then, assay samples needed to be dispatched to Canada for
processing requiring a long turn-around time A summary of the best drill
intersections to date are:
· Drilling at La India South Underground intersected high-grade
mineralisation:
o Drillhole LIGT612 intersected 31.18 metres at 4.37 g/t gold ("Au") from
181.6 metres to 212.8 metres including 0.48 metres at 138.4 g/t Au (from 187.6
to 188.1 metres) and 1.93 metres at 21.3 g/t Au (from 240.3 to 240.8 metres).
· Step-out drilling at La India Phase 1 - North Open Pit has returned
significant interceptions confirming and extension of the mineralised zone of
at least 30 metres:
o Drillhole LIDC620 intersected 9.58 metres at 1.68 g/t Au and 13.15 g/t
silver ("Ag") from surface to 9.58 metres.
o Drillhole LIDC621 intersected 10.55 metres at 1.11 g/t Au and 6.77 g/t Ag
from surface to 10.55 metres.
o Drillhole LIDC626 intersected 6.70 metres at 1.65 g/t Au and 1.64 g/t Ag,
including 1.50 metres at 5.33 g/t Au and 3.71 g/t Ag.
· Exploration drilling at Cacao has successfully identified a
high-grade ore shoot:
o Drillhole CCRD043 intersected 12.7 metres at 3.52 g/t Au from 270.8 metres
to 283.5 metres, including 2.0 metres at 19.7 g/t Au (from 276.5 to 278.5
metres).
o Drillhole CCRD044 intersected 10.7 metres at 1.92 g/t Au from 233.6 metres
to 244.3 metres, including 0.52 metres at 21.3 g/t Au (from 240.3 to 240.8
metres).
Across all targets, the campaign has identified several new zones of gold
mineralisation, with Cacao and La India South both demonstrating the potential
to host significant high-grade resources.
OUTLOOK
Annual production guidance for FY2026 for the Runruno mine has been set at
40,000 - 48,000 ounces at an AISC of between US$1,700 - US$2,000 per ounce.
Runruno is expected to maintain operational results, and free cash flow,
similar to that produced during FY2025, notwithstanding that FY2026 gold
production and average gold recoveries are expected to decline as operations
at Runruno move towards cessation. Mining operations are expected to cease
during H2 2026. Further, the majority of the remaining ore reserves are
expected to be processed by the end of FY2026. A minimal level of ore
production may roll over into Q1 2027, prior to the cessation of all
processing operations.
The development of the La India project in Nicaragua is expected to progress
to commissioning activities commencing in Q4 2026, with an initial gold pour
from commissioning during December 2026. Declaration of commercial production
at La India is targeted for Q1 2027.
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 the acquisition of additional
exploration and development opportunities, where appropriate.
Darren Bowden, Chief Executive Officer
21 May 2026
Competent Persons' Statement
The information contained in this report that relates to the La India Project
gold resources has been summarised or extracted from the technical report
entitled "Condor Gold Technical Report on the La India Gold Project,
Nicaragua", dated October 2022 (the "Technical Report"), prepared in
accordance with NI 43-101. The Technical Report was prepared by or under the
supervision of Tim Lucks, Principal Consultant (Geology & Project
Management), Fernando Rodrigues, Principal Consultant (Mining), Eric Olin,
Principal Consultant (Metallurgy) Benjamin Parsons, Principal Consultant
(Resource Geology), each of SRK Consulting (UK) Limited, each of whom is an
independent Qualified Person as such term is defined in NI 43-101.
Mr Maxwell Donald Tuesley, BSc (Hons) Economic Geology, a member of the
Australasian Institute of Mining and Metallurgy (No 111470 and employee of
the Company, has compiled, read and approved the technical disclosure in
relation to the exploration projects in this regulatory announcement 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.
BOARD OF DIRECTORS
Steven Smith Darren Bowden David Cather
Non-executive Chairman Chief Executive Officer and Executive Director Independent Non-executive Director
Appointed as Chairman: 21 March 2025 Appointed to the Board: 1 January 2019 Appointed to the Board: 1 November 2024
Appointed to the Board: 1 September 2021 Member of Remuneration Committee
Steven is currently a director of Candy Ventures S.À.R.L, a Luxembourg based Darren has over 30 years' experience building and developing mining projects David has in excess of 40 years' experience in the mining industry. David has
Venture Capital business, funded by British entrepreneur Nick Candy. Steven across Australia, North and South America. Darren has worked across all acted as CEO and COO of operating gold mining companies, and has held various
qualified as a Chartered Accountant at BDO and subsequently as a Chartered Tax aspects of the mining business from M&A to technical to operations and roles with a London-based fund manager and at Anglo- American plc. He has
Adviser whilst at KPMG. He lectured in Taxation at FTC for four years and then executive management. Some of the notable companies for which he has worked participated in numerous acquisitions and IPOs of mining companies on various
held several senior financial positions at large Public and Private Groups include Anglo Coal Australia, Glencore, Nyrstar and Mubadala. Some of the stock exchanges and has significant expertise in mine development. David is
culminating in him being appointed as CFO of a FTSE 250 company. Steven now projects in which Darren has been involved include the Minera San Cristobal a currently a non-executive director of several listed and private mining
holds a range of non-executive roles at companies including Audioboom Group silver, lead, zinc project in Bolivia (green field), the Prodeco coal project companies.
plc, an AIM quoted media business. Mr Smith is the Candy Group's appointee to (brown field) as the VPO and for Mubadala as the CEO on a large underground
the Board, and as such is not considered to be independent. gold project (green field), Minesa SA, in Bucaramanga. Darren is a Civil
Engineer (Hons) from University of New South Wales, Australia and is focused
on driving strategic development and the successful optimisation of companies.
Board meetings held: 5 Board meetings held: 5 Board meetings held: 5
Board meetings attended: 5 Board meetings attended: 5 Board meetings attended: 5
Remuneration meetings held: 5
Remuneration meetings attended: 5
Tim Livesey Andrew Chubb Rob Marshall
Independent Non-executive Director Non-executive Director Non-executive Director
Appointed to the Board: 5 May 2022 Appointed to the Board: 22 April 2021 Appointed to the Board: 1 November 2024
Remuneration Committee Chair Audit Committee Chair Member of Audit Committee
Member of Audit Committee Member of Remuneration Committee
Tim has over 30 years of professional exploration, project development and Andrew is currently a Partner and Head of Mining at natural resources focused Rob has been appointed as a non-executive director as a representative of the
mining experience in gold and base metals across Africa, Europe, the Middle investment bank Hannam & Partners. Previously, Andrew was a Managing Company's second largest shareholder, Drachs Investment No3 Limited. Rob is a
East and Asia. Tim's extensive career covers both technical and executive Director at Canaccord Genuity. He has a broad range of international corporate chartered accountant with over 20 years' professional and corporate advisory
management in the industry. He has managed significant projects across the finance, restructuring, capital markets and M&A experience focusing on the experience. Rob is currently the UK managing director and CFO of the Evans
globe for companies such as Anglo-American PLC and Barrick Gold Corporation mining and natural resources sectors. Andrew career has successfully advised Property Group, a global family investment business which is predominantly
and held executive and board level roles across junior, mid-tier and senior on numerous IPOs, public and private equity and convertible capital raises and real estate based.
companies. Alongside this, Tim is also a fellow of the Geological Society and M&A transactions including AIM, TSX, ASX, NASDAQ and Official List
a Member of the Aus.IMM having graduated from the University of Newcastle with companies. Andrew has a first-class law degree from Manchester University. As
an honour's degree in geology. Hannan & Partners act as the Company's joint Broker, Andrew is not
considered an independent director.
Board meetings held: 5 Board meetings held: 5 Board meetings held: 5
Board meetings attended: 5 Board meetings attended: 5 Board meetings attended: 5
Remuneration meetings held: 5 Remuneration meetings held: 5 Audit Committee meetings held: 3
Remuneration meetings attended: 5 Remuneration meetings attended: 5 Audit Committee meetings attended: 3
Audit Committee meetings held: 3 Audit Committee meetings held: 3
Audit Committee meetings attended: 3 Audit Committee meetings attended: 3
CORPORATE GOVERNANCE STATEMENT
As in previous years, the Company has continued to follow the QCA Corporate
Governance Code, and this year, the Company is reporting against the 2023
version of the QCA Code principles for the first time.
The QCA Code identifies 10 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 Ventures 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.
The Company's current compliance, or otherwise, with each of the ten
Principles of the QCA Code (2023) is detailed below.
Principle Disclosure
1 Establish a purpose, strategy and business model which promote long-term value The Company's vision and mission statement is set out on page 2 of this Annual
for shareholders Report. The Board regularly reviews the strategy and corporate plan of the
Company, which is to provide shareholders with capital growth potential,
delivered by developing mineral projects into profitable mines.
The strategic plan and business model are reviewed by the executive team on an
ongoing basis with relevant operational and management updates being reported
to the Board to demonstrate delivery and progress.
Decisions of the Board are made in line with the strategic plan and business
model for the Group. Further details of the Group's strategy can be found in
the CEO's Strategic Report.
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 in notes 33 and 34 to the
financial statements.
2 Promote a corporate culture that is based on ethical values and behaviours The Board leads by example and makes decisions that are in the best interests
of the Group and its stakeholders as a whole. Culture and ethics are
underpinned by a clear set of values which guide decision-making at all levels
in the business. These values and 'golden rules' are encouraged to be
universally adopted. Refer page 3.
The Board recognises that its decisions have an impact on 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 creates will greatly impact on the way employees behave and operate. The
importance of sound ethical values and behaviours is crucial to the ability of
the Company to successfully achieve its corporate objectives. The Company's
ethical approach to business is reflected in the way the Company has been able
to develop long-term and fruitful relationships with all stakeholders.
The Group 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 its business. The Board 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 sustained
real growth in future profitability.
3 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, and quarterly operations updates
play an important part in presenting all shareholders with an assessment of
the Company's position and prospects. During the reporting period the
Company's expansion into Nicaragua created additional shareholder engagement
opportunities.
The Company's website contains information on the Company's business,
corporate, ESG 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.
Formal feedback from shareholder meetings is provided by the Group's broker.
The Company has appointed BlytheRay to act as its main contact point for
shareholder queries and has made their contact details available on the
Company's website.
4 Take into account wider stakeholder interests, including social and The Company's long-term success relies upon good relations with all its
environmental responsibilities, and their implications for 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's 'social licence' to
operate is integral to all operational decisions. The executive team is
responsible for managing these stakeholder engagements/relationships.
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 annual executive bonus awards
are impacted by both safety/health and environmental performance throughout
the Group, encouraging adverse outcomes to be avoided.
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.
Detailed procedures are in place for employees to raise concerns in
confidence, and for such matters to be considered and for any appropriate
action can be taken.
The Company has a dedicated community relations departments that are active in
developing and assisting with various community social programmes with special
focus on health, education and infrastructure projects.
5 Embed effective risk management, internal controls and assurance activities, The Audit Committee, on behalf of the Board, is responsible for the Company's
considering both opportunities and threats, throughout the organisation system of internal controls and for 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 Group seeks to achieve
excellence and encourages its workforce to strive to succeed without being
burdened by a fear of failure.
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 covers 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.
The Audit Committee reviews the external auditor's performance and
independence on an annual basis.
6 Establish and maintain the Board as a well-functioning, balanced team led by The full Board is responsible and accountable to the shareholders for the
the Chair management and success of the Company and to provide effective controls to
assess and manage risks in the Group. There is a formal schedule of matters
specifically reserved for the Board that includes matters relating to strategy
& management; structure & capital; financial reporting & controls;
internal controls; contracts; communications; Board membership and other
appointments; delegation of authorities; and corporate governance. The Company
has two Non-Executive Directors, each considered to be independent by the
Board due to their relationship with the Company and their ability to act in
the best interests of all shareholders. Each Board Committee comprises a
majority of independent Non-Executive Directors. The Board provides an
overview of the skills and experience of each Director and how these align
with the strategic objectives of the Company.
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 Board keeps under review its current balance and composition to
ensure that it has a sufficiently wide range of skills and experience to
enable it to pursue its strategic goals and address anticipated issues in the
foreseeable future.
The Chair is responsible for leading the Board and ensuring that it remains
effective in fulfilling its role. He sets the Board's agenda and ensures that
there is appropriate focus on strategic issues and the monitoring of
performance. The Chair promotes a culture of openness and debate within the
Board, where Directors can discuss and challenge the actions of the executive
management, as well as the views of all Directors, promoting good
decision-making and ultimately supporting the Company's long-term, sustainable
success.
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. Skills and experience of
the Directors are included in the biographies on pages 16-17, of this Annual
Report and on the Company's website.
The Board has two independent non-executive directors, while a third, Mr
Chubb, would be considered independent if not for his role with the
Company's joint broker, Hannam & Partners. 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.
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 is supported by the Audit and Remuneration Committees, each with
delegated duties and responsibilities, 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.
Non-Executive directors have been awarded long-term incentive options
following extensive consultation with the Company's major shareholders.
As recommended by the QCA Code, all Directors will stand for re-election at
the Company's AGM.
7 Maintain appropriate governance structures and ensure that individually and Compliance with the QCA Code and corporate governance requirements generally
collectively directors have the necessary up-to-date experience, skills and are reviewed on an ongoing basis by the Board. The Company is not compliant
capabilities with the Code as it does not have a Nomination Committee, given the current
size of its operations; however, the balance and composition of the Board and
its Committees is periodically reviewed to ensure the skills and experience
needed for successful operation are in place.
Update training is undertaken periodically, and the skills and experience of
the Directors are kept under review by the Board, and any changes to the
strategy of the Company are taken into consideration when the make-up and
structure of the Board is considered. The experience and knowledge of each of
the Directors gives them the ability to constructively challenge strategy and
to scrutinise performance.
The Board's governance and framework sets out leadership and embeds delegated
responsibilities to enable informed and confident decision-making. The Board
Committees receive expert advice on the specific areas of operation as
required, such as on remuneration, governance and capital markets.
There is a clear division of responsibility between the Non-Executive Chairman
and the Chief Executive Officer.
MSP Corporate Services Limited, a professional company secretarial services
provider, acts as Company Secretary.
The Company has adopted several industry-standard governance policies
including a share dealing code, anti-bribery and whistleblowing policies.
8 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 8 in that it has no formal board
evaluation process. This position will be reviewed as the Company develops.
Succession planning for key executive roles is underway under the
responsibility of the Chairman. Given the size of the Company's operations the
establishment of a Nomination Committee is not considered necessary.
9 Establish a remuneration policy which is supportive of long-term value The Board is supported by a Remuneration Committee which oversees the
creation and the company's purpose, strategy and culture Company's Remuneration Policy and framework. The Committee is formed of three
Non-Executive Directors, two of whom are independent. The Remuneration
Committee periodically seeks external remuneration advice. The Committee, on
behalf of the Board, reviews the Remuneration Policy of the Company on an
annual basis to ensure it is aligned to the Company's purpose and strategy,
and sets the targets for the Company's senior executive team to ensure that
the senior management of the Company are motivated to promote the long-term
growth of shareholder value. The Company discloses the approach taken to
setting the Remuneration Policy as part of its disclosures in the Annual
Report and how it is aligned to the Company's purpose, strategy and culture.
The Remuneration Committee keeps a watching brief over the wider Company's
remuneration structure to ensure proportionality and consistency across the
Company.
From a corporate standpoint, FY2025 was busy year for the Company with the
acquisition of Condor Gold Plc and the overdue issue of long-term incentive
options to directors and management approved in FY2024. Given this, the FY2025
remuneration report is not considered representative of the Company's future
remuneration policies Consequently, at the Company's 2026 AGM the annual
remuneration report will not be put to an advisory shareholder vote on this
occasion, and so the Company will not comply with Principle 9(e).
During FY2026 an independent third party will advise the Company on its
executive remuneration and its incentive structures with the aim to adopt
policies commiserate with the Company's peers and reflective of its stage of
development.
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 key stakeholders integral to the continued success of the Group. The Company engages with its
shareholders through meetings, social media, webinars, presentations and
roadshows when appropriate.
The Board believes that the Annual Report and Accounts, the Interim Results
published at the half-year stage, and quarterly operations updates 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. Within the Annual
Report, a report from each of the Committees of the Board is included which
explains the role of each Committee, the activity it has undertaken throughout
the year, its delegated responsibility and how it interacts with the Board.
Further the Board is supported in its dialogue with shareholders by its
corporate brokers and an investor relations consultancy group.
AUDIT COMMITTEE REPORT
Aims of the Audit Committee
The principal purpose of the Audit Committee is to assist the Board in
discharging its duties regarding corporate governance, 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 and
management, 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, challenges the auditors over
key accounting and audit areas 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 ("CFO") are invited to attend
meetings of the Committee, and I am satisfied that we were presented with high
quality and accurate materials, and in a timely manner.
The external auditors and the CFO 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
During FY2025, the Group expanded into a new jurisdiction, Nicaragua,
requiring new procedures, protocols and risk management controls to be
introduced. On behalf of the Board, the Audit Committee has closely monitored
the introduction and maintenance of internal controls and risk management
during the year, and this process has been a key focus of both the Group, the
Audit Committee and the Board. Key financial risks are reported during each
Board and Audit Committee meeting, including developments and progress made
towards mitigating these risks.
The Committee received regular reports from the CFO 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 and the Auditors 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 necessary 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, combined with its existing cash holdings, provides
ample evidence that there currently is no material uncertainty surrounding the
Company and the Group's ability to continue as a going concern, and in
particular, to fund its construction and development activities in Nicaragua.
The Company remained debt free at year-end.
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 42.
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 was re-appointed as Group and Company auditor at the Company AGM in June
2025. 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. The Audit Committee has recommended the reappointment of PKF at the
forthcoming annual general meeting.
The year ahead
Following the Group's expansion into Nicaragua in FY2025, the Audit Committee
will continue to focus on ensuring that a robust framework of internal
controls and risk management exists throughout the entire Group. In
particular, the Audit Committee in conjunction with the executive management
of the Company will continue to develop reporting procedures, construction
cost and schedule monitoring, controls and risk management in Nicaragua as the
La India moves through construction into its production phase. Financial
disclosures and 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
21 May 2026
REMUNERATION COMMITTEE REPORT
Aims of the Remuneration Committee
The Committee's overall aim is to align employee remuneration with the
successful delivery of long-term shareholder value by rewarding performance
and providing appropriate incentives. 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 programme ("LTIP") 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. The Committee formally met five times
in FY2025.
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
During FY2025 the committee commissioned an independent peer review of the CEO
and CFO remuneration packages. There was no change to the CEO's base
remuneration and a modest increase to the CFO's base salary remuneration
component. There have been no material changes to other executive remuneration
packages during the year.
The Group's remuneration framework includes payment of an annual salary and an
annual short term bonus. Further, in February 2025 an LTIP was awarded to
executives after protracted negotiations with the previous Group lenders were
finalised. 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 twelve month
notice period or an in lieu base salary termination payment.
Management Incentive Programme ("MIP") - 2025 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"). The CEO is measured
against the corporate KPIs while each senior executive has a portion of their
bonus judged against personal KPI measures adjusted as appropriate to their
role within the Group.
The following table details the corporate KPIs adopted by the Committee in its
assessment of the Group's performance which were applied to FY2025.
Performance indicator 2025 Rating 2025 Performance
One LTI recorded in the Philippines, none in Nicaragua; no material
environmental/licensing incidents
Environmental/Safety/Health and compliance Award threshold achieved
Free cash generated before debt principal/interest/fees Maximum target achieved Free cash generated exceeded budget
Standard target achieved Construction on schedule and on budget
La India gold project construction
Standard target achieved
Total expenditure v budget Actual spend approximated budget
Award threshold not achieved Tenement awarded however the initial drill programme was unsuccessful
Dupax project development
Glossary:
KPI - Key performance indicator; LTI - Lost time injury
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 March 2026, the Company issued 1,182,210 new Ordinary Shares to executives
as part of the 2025 MIP bonus award.
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. All non-executive directors participated in the LTIP option issue
during the year.
Director remuneration
The Directors' remuneration for the year was as follows:
Fees/salary Short-term cash performance bonus Share- based payments - (Short and long term non-cash awards) Total
Year ended 31 December 2025 US$ US$ US$ US$
Darren Bowden(1) 801,016 1,160,121 12,136,073 14,097,210
Executive director/CEO
Steven Smith(2) 109,109 - 915,641 1,024,750
Chairman & non-executive director
Tim Livesey(1) 88,279 - 177,486 265,765
Independent non-executive director
Andrew Chubb 79,352 - 177,486 256,838
Non-executive director
David Cather 79,352 - 177,486 256,838
Independent non-executive director
Rob Marshall 79,352 - 215,808 295,160
Non-executive director
Nick von Schrinding 89,271 - 89,916 179,187
Independent Chairman (resigned 21 March 2025)
1,325,731 1,160,121 13,889,896 16,375,748
Total
Year ended 31 December 2024
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
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 2,405,040
Total
Notes:
¹ Includes consulting fees paid to private consulting companies.
(2) Fees paid in accordance with a Services Agreements between the Company and
MTL (Luxembourg) Sarl/Candy Investments Sarl.
No element of the Directors' remuneration (other than options and shares
issued as part of the LTIP and MIP bonus) is currently related to the
Company's future share price.
Director interests in shares
As at FY2025 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 8,257,355 191,051,895 - 199,309,250
David Cather 6,600,000 500,000 - 7,100,000
Andrew Chubb 4,100,000 564,901 - 4,664,901
Tim Livesey 6,600,000 - (2,500,000) 4,100,000
Rob Marshall 7,820,928 827,314 - 8,648,242
Director interests in options
Directors' beneficial interests in unissued ordinary shares granted by the
Company under share options as at FY2025 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
Steven Smith - 6,600,000 - 6,600,000
Chairman & non-executive director On or before
25 June 2032 at nominal share value
Andrew Chubb On or before - 4,000,000 - 4,000,000
Non-executive director 7 February 2032 at nominal share value
Tim Livesey - 4,000,000 - 4,000,000
Independent non-executive director On or before
7 February 2032 at nominal share value
David Cather - 4,000,000 - 4,000,000
Independent non-executive director On or before
7 February 2032 at nominal share value
Robert Marshall - 4,000,000 - 4,000,000
Independent non-executive director On or before
25 June 2032 at nominal share value
Darren Bowden On or before - 180,000,000 180,000,000 -
CEO 7 February 2032 at nominal share value
Darren Bowden On or before 27 August 2031 at nominal share value 9,500,000 - - 9,500,000
CEO
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.
Long-term Incentives
The full and final settlement of all debt issues in June 2024 removed the
operational covenants within the Group's historical debt documents that
required lender approval of any equity incentive schemes. Thus, the Company,
in August 2024, was able to establish a 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. Subsequent
LTIP options were issued to two further non-executive directors to fully align
all the board with the Company's aspirations.
The year ahead
The Committee aims to ensure that the quantum and structure of remuneration at
Board and senior management levels continue to be appropriate for the roles
and responsibilities, including with regard to any succession planning
activities. During FY2026 an independent third party will advise the Company
on its executive remuneration and its incentive structures with the aim to
adopt policies commiserate with the Company's peers and reflective of its
stage of development.
The annual discretionary bonus corporate KPIs for FY2026 will focus the Group
completing the construction of the La India gold mine, on time and on budget,
maintaining strong cash flow from Runruno to fund the La India construction,
combined with the need to source additional near development projects,
particularly in the Philippines to leverage off the in-country expertise and
human resources as an integral element of planning for the end of mining
activities at Runruno.
Tim Livesey, Chair of the Remuneration Committee
21 May 2026
SUSTAINABILITY REPORT
The Group publishes an annual in-depth sustainability report covering its
Philippine operations. In April 2026, a sustainability report covering the
activities and outcomes for the 2025 calendar year, titled 'Beyond the Gold'
was issued. Shareholders are recommended to access this report, and
sustainability reports covering previous periods from the Company website at
https://metalsexploration.com/esg/esg-overview/
(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. With construction of the La India project in
Nicaragua underway this level of reporting is not yet available, however,
protocols will be introduced to enable the Group to report on how it deals
with these matters in its Nicaraguan operations once it commences commercial
production.
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. Philippine 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. Risk management protocols
that reflect the standards maintained in the Philippines have been introduced
in Nicaragua. 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
The Group is committed to enriching the lives of local communities that are
impacted by its operations and promote the participation of local community
and public institutions.
In the Philippines, 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 Philippine community programme expenditure for FY2025 was US$2.0 million
(2024: US$1.9 million). 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 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").
In Nicaragua, the Group already has significant community support programmes
in place. It is working with communities across local municipalities,
strengthening the business-community link and contributing to the social and
economic development of the region. Financial contributions have been
combined with the creation of local programmes focused on access to drinking
water, strengthening the local economy, providing community training,
promoting environmental sustainability and developing community
communication. The Group's initiatives have included:
· Supporting local infrastructure: Built a new community fire
station and enhanced local roads.
· Access to safe water: Launch of the Fresh Water Programme and with
a water treatment plant distributed more than 30,000 bottles of potable water.
· Revitalisation of the local economy: Promotion of entrepreneurship
through access to community credit, capacity building and technical support,
directly benefiting local entrepreneurs and promoting economic inclusion.
· Job creation and economic growth: Prioritisation of local labour
during the construction phase and procurement from local businesses; combined
with implementation of technical training programmes and trade courses.
· Environmental awareness and management: Collection of plastic and
electronic waste, along with environmental awareness actions that promote
sustainable practices in communities.
· Prioritisation of community relations: Active community engagement
and participation, including within the established Information Office,
providing transparent dialogue.
Significant progress has been achieved since the acquisition of La India,
demonstrating the Group's commitment to sustainability, inclusive development
and the well-being of the communities where it operates.
Total Nicaraguan community programme expenditure for FY2025 was US$331,000.
Once the La India project is in production the Group will formalise the
financial commitments it expects to provide to support local communities.
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, the Nicaragua Anti-Trafficking in Persons
Act (2015), the Nicaragua Code of Childhood and Adolescence, 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.
The Group suffered its first LTI in the Philippines since December 2016 when
on 30 March 2025 an employee suffered burns that required hospital treatment.
This employee made a full recovery and returned to work in Q2 2025. Since
March 2025 the Group has not suffered from a further LTI. Prior to that the
Company had accumulated more than 25 million man-hours with no lost time
incidents. A safe working culture is actively promoted by a dedicated
occupational safety and health department.
In Nicaragua, the operation has not recorded any LTIs, achieving the milestone
of more than 1,000,000 man-hours worked without a LTI, reflecting the
organisation's strong commitment to safety.
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 would not have been 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.
The Group emphasises employment from within the local community. In
Nicaragua, over 83% of personnel during the construction phase have been hired
in-country, and in the transition to the production phase this is expected to
increase further.
The recruitment and participation of the female workforce is a fundamental
core of our operations, to promote gender equality, social inclusion,
diversity of perspectives and sustainable development within the Group. Over
34% of the Nicaragua personnel are female, employed across operational,
technical and administrative roles.
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.
Since the acquisition of Condor, in Nicaragua the Group has introduced
environmental practices in compliance with our permit conditions, covering
management of waste, a nursery programme to grow native plants and trees,
monitoring of air and water quality, and providing environmental training to
staff and the local community.
WASTE MANAGEMENT
Safe management of tailings and other waste products are crucial to the safety
of our communities and longevity of our operations. At Runruno tailings are
sent to the RSI which has been constructed to international standards
applicable to water storage dams, which are much higher than international
standards applicable to mining tailings. At La India the tailings dam facility
is under construction and will be constructed to the appropriate international
standard.
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.
Across its operations the Group abides by laws and decrees for the management
and disposal of waste, and commitments established under its Environmental
Permits. The Group has implemented waste management systems covering
segregation, collection, transportation, recycling, and re-use. In
combination with this, the Group has established training programmes and
awareness campaigns for staff and the local community, to promote a culture of
recycling and good waste disposal.
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/groundwater water quantity, quality and aquatic
environment. The ASTER technology contained in the final segment of the
Runruno process plant destroys all cyanide species from tailings before the
tailings are pumped into the RSI. During FY2025, the Group continued to reduce
its monthly average water consumption at Runruno.
A key commitment to the local La India community is to assist in the supply of
potable water as an alternative to using the local ground water which has been
contaminated following years of unregulated artisanal processing operations.
The Group established a Fresh Water Programme and water treatment plant, which
has distributed more than 30,000 bottles of potable water to local community
members.
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.
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 in and around the Runruno
mine.
A total of 16.99 hectares within the FTAA area were rehabilitated during
FY2025 (FY2024: 6.22 hectares) to bring the total area rehabilitated since
commencement of mining to 73.55 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 fourth consecutive year.
In Nicaragua, the Group has established the Oro Verde Forest Nursery to grow
for annual planting forest, fruit and ornamental trees and plants. In 2025,
the Company carried out rehabilitation initiatives in collaboration with the
community whereby 9.7 hectares of diversified forest plantations were
reforested. This is in the final stages of the 5-year establishment phase.
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 emitters of
greenhouse gases ("GHG"). 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 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. Development in
Nicaragua is utilising modern methods and equipment to minimise the Company's
climate impact, with an efficient processing design to minimise the plant's
physical footprint.
It is noted that the Runruno operation is powered by hydroelectricity, while
hydroelectricity is also produced near to the La India project. At La India,
utilisation of solar energy for some aspects of the project is being studied.
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 Philippine 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 government/educational institutional publications. Development in
Nicaragua is being 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 reduce its net GHG emissions. Targets are
also set for the reduction of water, diesel, and electricity consumption, and
waste generation. Further, in the Philippines targets to increase
reforestation and restoration activities are 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 of the Group's activities.
Targets used by the Group
At year end the Group has only the single Philippine located producing
operation which will cease mining and processing activities within the next 12
months. Annual targets have been set to reduce the Group's impacts and to
reduce its net GHG emissions for this project. These targets are monitored and
reviewed monthly and are set based on the previous year's effort and
performance. In FY2025, we achieved positive results, with above target
reductions in water, electricity and diesel consumption, residual and
hazardous waste generation. There was a below target increase in the flora
diversity species index covering the FTAA area, due mainly to the impact of
numerous typhoons on various species.
As the Nicaraguan activities consist of construction and development the Group
has yet to set targets or measure its Scope 1 & 2 GHG emissions. Targets
will be set for the La India project once this project commences commercial
production.
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.
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 activities in Nicaragua are limited, in the main, to construction
and development activities using contractors equipment. Accordingly, as yet,
no GHG emission targets or tracking systems have been introduced.
The Group's carbon footprint for its Philippine operations (generated outside
of the UK) was measured as follows:
2025 CO(2)e Tonnes 2024 CO(2)e Tonnes
Scope 1 GHG emissions 17,207 16,983
Scope 2 GHG emissions 69,072 64,663
Operational GHG emissions Total 86,279 81,646
Total CO(2)e Tonnes per Total CO(2)e Tonnes per
ounces gold produced ounces gold produced
Operational GHG Emissions Intensity 1.32 0.97
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, government regulations and any
appropriate contemporary standards. This monitoring extends to reference sites
outside the immediate operational area. The Philippine 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. Quarterly
reporting obligations are also following in Nicaragua.
In Nicaragua, surface and groundwater monitoring took place in 2025 across the
La India concession, to provide a baseline of the current state of the
aquifer. This was undertaken in conjunction with environmental and
governmental departments, and local community leaders. Surface and
groundwater water levels are monitored on an ongoing basis across multiple
sites within the La India concession. Air quality is monitored in adherence
with government requirements.
LEGAL COMPLIANCE
High compliance standards are practiced across the Group. Specialised
site-based teams are dedicated to managing the high levels of compliance
mandated by the governments in the countries we operate in. The Runruno 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. Regular Nicaraguan government audits are
carried out to ensure compliance with local rules/regulations.
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 2025.
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 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.
FINANCIAL RESULTS
For the year ended 31 December 2025 the profit before tax of the Group for the
year was US$45.1 million (2024: US$34.6 million). Refer to page 9 for an
alternate non-IFRS compliant performance measure.
DIVIDENDS
A dividend payment is not recommended for the year ended 31 December 2025
(2024: US$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 5 and the Chief Executive Officer's
Strategic Report on page 8.
NOMINATED ADVISER & JOINT CORPORATE BROKERS
The Company's nominated adviser is Strand Hanson Limited. The Company's joint
corporate brokers are Hannam & Partners ('H&P Advisory Limited') and
Panmure Liberum.
AUDITOR
PKF Littlejohn LLP was re-appointed as auditor of the Company at the Annual
General Meeting held in 2025 and it is proposed that they be re-appointed as
auditor of the Company at the Company's forthcoming Annual General Meeting.
DIRECTORS
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)
David Cather (Independent
Non-Executive Director)
Tim Livesey (Independent Non-Executive
Director)
Andrew Chubb (Non-Executive Director)
Rob Marshall (Non-Executive
Director)
Nick Von Schirnding (Independent Non-Executive Chairman), appointed 18
March 2024 - resigned 21 March 2025
ARRANGEMENTS TO PURCHASE SHARES OR DEBENTURES
In accordance with the Company's LTIP, during FY2025 the Company issued to
directors:
· 180,000,000 options to acquire new Ordinary Shares to Mr Bowden,
· 6,600,000 options to acquire new Ordinary Shares to Mr Smith,
· 4,000,000 options to acquire new Ordinary Shares to each of Mr
Chubb, Mr Cather, Mr Marshall and Mr Livesey.
All vesting conditions attaching to these options (apart from the requirement
for Mr Marshall to serve as a director for a minimum of three years) have been
satisfied.
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.
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:
· Andrew Chubb is a director of H&P Advisory Limited trading as
Hannam & Partners, the Company's joint broker.
· 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.
DIRECTORS' INDEMNITY
As permitted by its Articles of Association, the Company has granted a
third-party indemnity to each Director against any liability that attaches to
them in defending proceedings brought against them, to the extent permitted by
English law. This indemnity was in force during the financial year and up to
the date of signing of this report. In addition, all Directors and officers of
the Company and its subsidiaries are covered by Directors' and Officers'
liability insurance.
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 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 will finish mining
operations during H2 2026. The mine plan for the La India gold project
projects production for a minimum 12-year period from 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; and all mining licences and
the ability to operate core assets are in place. However, 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, development 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, in the past, 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 continue the
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. This is an ongoing challenge given the
lack of experience of and knowledge of the benefits that sustainable and
environmental mining can bring to local communities.
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
consulting group.
Access to working capital
The Group has committed to the development of the La India gold project and is
seeking to fund this development predominantly from internally generated free
cash flow. To support these cash flows the Group has secured an undrawn US$30
million gold pre-pay facility. Should these sources of working capital be
insufficient, there is a risk the Group will be unable to source alternate
funding, be that equity or debt, to complete this development in the scheduled
timeframe .
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 Group closely monitors and manages its liquidity risk by means of a
centralised treasury function. Cash forecasts are regularly produced and
sensitivities run for different scenarios including, but not limited to,
changes in commodity prices and different production profiles from the Group's
assets. At year end the Group had US$41.2 million (FY24: US$31.2 million) of
cash.
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. In particular, these cash flows are
expected to be greater than the remaining construction and development costs
required to complete construction of the La India project by the end of 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
For FY2025 the key corporate performance indicators used by Directors to
monitor the performance of the Group were:
· 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
FY2025 and FY2024. Indeed, the focus on safety has been successful with over
25 million work-hours being recorded without a 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 made a full recovery and returned to work in Q2 2025.
Since March 2025 the Group has not suffered from a further LTI. 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 FY2025 and FY2024. Operations are subject to numerous environmental and
permit obligations and regulations. Dedicated departments monitor 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.
· Free cash flow - The Group's aggressive development timetable to
bring the La India project into production by Q4 2026 is largely dependent
upon the free cash flow produced from the Runruno mine. 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$115.3 million (FY2024: US$96.7
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, corporate event expenses and
all Nicaraguan operations approximated the total Group budget.
· La India construction - The key pillar to the Group's objective to
replace the cash flow from Runruno is the development of the La India project,
targeting first gold to be poured in Q4 2026. Physical construction and
development performance is measured against the original project schedules and
budgets and reported weekly and monthly, with ongoing revisions made
regularly. At year end the construction is on schedule and within budget.
· Dupax project development - The Dupax project had the potential to
re-purpose the Runruno process plant and was the first alternate Philippines
located project that the Company investigated to replace production from
Runruno. Access to the project to enable drill programmes to be undertaken
with the objective to outline an economic resource were the key performance
measures here. The project access was secured and an initial drill programme
commenced however no near surface potential economic deposit was discovered.
* TRIFR - Total reportable injury frequency rate
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 FY2025, the Group did not make any political expenditures or charitable
donations (FY2024: $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 to be held on 15 June 2026 at the offices of Squire
Patton Boggs in London, UK. The Notice of the AGM will be issued shortly.
In accordance with the recommendations of the Quoted Company's Alliance, all
directors will retire and will offer themselves for re-election at the AGM.
SHARE CAPITAL
On 31 December 2025, there were 2,940,856,680 ordinary shares of £0.0001 each
with voting rights in the capital of the Company in issue. A further
299,385,458 non-voting ordinary shares of £0.0001 each were held in Treasury.
SIGNIFICANT SHAREHOLDINGS
As at 31 December 2025, 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 at 31 December 2025 Voting % Shares held at 31 December 2024 Voting %
Nick Candy 653,000,000 22.20 651,000,000 37.7
Drachs Investments No3 Limited 600,202,630 20.41 317,532,143 18.4
Hargreaves Lansdown(1) 269,181,818 9.15 137,654,787 7.97
Interactive Investors(1) 230,433,359 7.84 91,263,780 5.28
Darren Bowden 199,309,250 6.78 8,257,355 0.48
AJ Bell Stockbrokers(1) 101,325,775 3.45 34,203,334 1.98
Baker Steel Capital Managers(2) 45,788,429 1.56 63,438,429 3.67
(1) Acting on behalf of its clients.
(2) Acting on behalf of various funds for which it acts as full discretionary
Investment Manager
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 83% of the workforce
are Nicaraguan. Workforce gender diversity policies are actively followed with
approximately 29% 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.
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
21 May 2026
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 2025 which comprise the Consolidated Statement of Comprehensive
Income, the Consolidated and Parent Company Statement of Financial Position,
the Consolidated and Parent Company Statements of Changes in Equity, the
Consolidated and Parent 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 2025 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 at least 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; 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 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 ($)
2025 2024 Basis 2025 2024 Basis
Overall materiality 2,080,000 1,915,000 1% of revenue 1,980,000 1,574,000 1% of net assets (2024: 1.5% of net assets)
Performance materiality 1,250,000 1,149,000 60% of materiality 1,190,000 944,000 60% of materiality
Triviality 104,000 95,000 5% of materiality 99,200 78,000 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 net assets 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 $104,000 ($99,200 for the parent) together with any other audit
misstatements below that threshold that we believe warranted reporting on
qualitative grounds.
We determined materiality for the components to be between (note one
significant component in 2024):
2025 ($) 2024 ($) Basis
Overall materiality 1,398,000 - 1,565,000 1,149,000 Based on a factor of overall group materiality
Performance materiality 838,000 - 939,000 1,000,000 60% of materiality
Triviality 69,000 - 78,000 83,000 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 below
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 Condor Gold 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 15 components, including the parent company, 3 were considered
(including the parent company - audited by PKF-Littlejohn) financially
significant and subject to full scope audits for group purposes. The remaining
components were not considered material to the group and we performed a
combination of detailed analytical review together with limited scope
substantive testing, as appropriate.
A full scope audit was performed for the one significant component in the
Philippines, two in Nicaragua and two in the United Kingdom. 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 a member of 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 2026 and performed an
on-site file review of the work performed by the component auditor. All
other components were audited by the PKF London audit team..
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) -
La India Project, Nicaragua
Our work in this area included:
Condor Gold Limited and its subsidiaries hold a significant balance of o Considering any potential impairment indicators through discussion with
non-current assets of circa US$178 million. These assets primarily relate to management and during the onsite visit to the La India project site during the
the La India Project mine acquired in the year which is currently under audit fieldwork, as well as the review of announcements to the market and
development, and is strategically significant to Metals Exploration Plc's board minutes for evidence of impairment;
expansion strategy and its objective to transition the project into a
producing asset and pivot away from the Runruno mine as it comes to the end of o Identifying and reviewing the cash generating units (CGUs) within the
its lifecycle. entity, ensuring that they are appropriately defined based on the smallest
identifiable group of assets that generate cash inflows largely independent of
Given the significant judgements and estimates used by management in other assets or group of assets;
determining the value in use of these assets, there is the risk that the
valuation of the assets is incorrect and not fully recoverable. o Obtaining and reviewing management's discounted cash flow model and
corroboration and challenge of the key underlying assumptions;
The accounting policy for undertaking the impairment assessment may not be in
line with IAS 36, 'Impairment of Assets', which requires companies to o Assessing and reviewing any indicators of impairment as per IAS 36;
determine a single estimate of the recoverable amount.
o Ensuring the basis of preparation of the model is in line with applicable
This has been identified as a key audit matter due to the quantum of the accounting standards;
balance and the level of judgements and estimate used by management when
considering the assets value in use. o Assessing the appropriateness of estimates and inputs including discount
rates, future operating and capital expenditures, and expected production
start date; and
o Ensuring inputs into the model are in line with the third party expert's
opinion of expected total mineral resources when the project reaches the
production stage.
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 parent company and
the sector in which they operate 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 experience of the sector.
· We determined the principal laws and regulations relevant to the
group and parent 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
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 for Condor Gold Limited
· 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) 30 Churchill Place
For and on behalf of PKF Littlejohn LLP London
Statutory Auditor
E14 5RE
20 May 2026
roperty, plant and equipm
CONSOLIDATED STATEMENT OF TOTAL COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2025
2025 2024
Notes US$ US$
Continuing Operations
Revenue 3 208,413,419 191,149,615
Cost of sales 3 (135,356,661) (128,630,976)
Gross profit 73,056,758 62,518,639
Administrative expenses (11,495,137) (8,984,213)
Operating profit 4 61,561,621 53,534,426
Impairment (loss)/gain 8 908,828 (9,065,277)
Other income/expenses 8 (22,798,678) (3,319,103)
Provision for gain/(loss) on derivatives 21 5,453,412 (6,521,465)
Share of (loss)/profit of associates 16 (5,158) 12,030
Profit before tax 45,120,025 34,640,611
Tax (expense) 9/10 (16,502,303) (9,064,743)
Profit for the period 28,617,722 25,575,868
Non-controlling interest 274,217 10,211
Profit for the period attributable to equity holders of the parent 28,891,939 25,586,079
Other comprehensive income:
Items that may be re-classified subsequently to profit or loss:
Exchange differences on translating foreign operations (1,560,023) (1,545,017)
Items that will not be re-classified subsequently to profit or loss:
Re-measurement of pension liabilities (53,375) (320,892)
Total comprehensive profit for the period attributable to equity holders of 27,278,541 23,720,170
the parent
Total comprehensive profit for the period attributable to equity holders of 27,004,324 23,709,959
the parent and non-controlling interests
Cents per voting share Cents per voting share
Earnings per voting share:
Basic cents per voting share 11 1.05 1.29
Diluted cents per voting share 11 0.97 1.28
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2025
2025 2024
Notes US$ US$
Non-current assets
Property, plant and equipment 12 218,147,243 93,544,640
Intangible assets 13 13,830,000 620,331
Investment in associate companies 16 128,253 133,411
Trade and other receivables 17 15,622,039 19,750,486
247,727,535 114,048,868
Current assets
Inventories 18 17,206,016 18,122,391
Trade and other receivables 17 17,047,585 10,891,450
Cash and cash equivalents 19 41,171,536 31,224,696
75,425,137 60,238,537
Non-current liabilities
Trade and other payables 23 (15,155,336) (70,850)
Retirement benefits obligations 22 (164,470) (3,154,594)
Deferred tax liabilities 10 (14,530,453) (557,047)
Provision for mine rehabilitation 25 (8,253,228) (4,270,571)
(38,103,487) (8,053,062)
Current liabilities
Trade and other payables 23 (28,483,299) (18,924,024)
Loans - current portion 24 - (6,890,400)
Derivative liabilities 21 (1,429,405) (6,869,769)
Retirement benefits obligations 22 (2,350,444) -
(32,263,148) (32,684,193)
Net assets 252,786,037 133,550,150
Equity
Share capital 26 387,136 235,366
Share premium account 26 79,260,654 313,458
Capital redemption reserve 38,266 50,401
Treasury shares 26 (19,278,326) (25,345,845)
Translation reserve 7,836,591 9,396,614
Re-measurement reserve (624,007) (570,632)
Other reserves 2,737,779 (4,289,234)
Profit and loss account 182,305,257 153,363,118
Equity attributable to equity holders of the parent 252,663,350 133,153,246
Non-controlling interests 122,687 396,904
Equity 252,786,037 133,550,150
The financial statements were approved by the Board of Directors on 20 May
2026 and were signed on its behalf by:
Darren Bowden, Chief Executive Officer
21 May 2026
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2025
Share capital Share premium account Capital redemption reserve Treasury shares 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$
Balance at 1 January 2025 235,366 313,458 50,401 (25,345,845) 9,396,614 (570,632) (4,289,234) 396,904 153,363,118 133,550,150
Exchange differences on translating foreign operations - - - - (1,560,023) - - - - (1,560,023)
After-tax change in pension liability - - - - - (53,375) - - - (53,375)
Profit for the year - - - - - - - (274,217) 28,891,939 28,617,722
Total comprehensive income/(loss) for the year - - - - (1,560,023) (53,375) (274,217) 28,891,939 27,004,324
- -
Share-based payment 28 - - - - - - 7,027,013 - 50,200 7,077,213
Share issued 26 151,770 78,947,196 (12,135) 6,067,519 - - - - - 85,154,350
Balance at 31 December 2025 387,136 79,260,654 38,266 (19,278,326) 7,836,591 (624,007) 2,737,779 122,687 182,305,257 252,786,037
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 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 and the
amounts recognised on acquiring additional equity in a controlled subsidiary
· 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 2024
Share capital Share premium account Capital redemption reserve Treasury shares 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$
Balance at 1 January 2024 282,783 144,350 - - 10,941,631 (249,740) (4,963,164) - 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 issued 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) 9,396,614 (570,632) (4,289,234) 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
· 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 share-based payments expense and the
amounts recognised on acquiring additional equity in a controlled subsidiary.
· Profit and loss account; being the cumulative profit attributable
to equity shareholders
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2025
2025 2024
Notes US$ US$
Net cash generated from operating activities 29 107,868,980 85,470,242
Investing activities
Purchase of subsidiaries, net of cash acquired 14 (21,599,629) (497,306)
Interest income 925,471 148,751
Pre-takeover loan to Condor - (2,500,000)
Purchase of property, plant and equipment (79,620,087) (6,053,563)
Net cash used in investing activities (100,294,245) (8,902,118)
Financing activities
Repayment of borrowing principal - (23,896,298)
Repayment of borrowing interest - (3,338,575)
Borrowings 24 - 6,890,400
Shares issued 4,173,479 2,503
Off-market share buy back 26 - (25,345,845)
4,173,479 (45,687,815)
Net cash used in financing activities
Net increase in cash and cash equivalents 11,748,214 30,880,309
Cash and cash equivalents at beginning of year 31,224,696 339,997
Foreign exchange difference (1,801,374) 4,390
Cash and cash equivalents at end of year 41,171,536 31,224,696
The following were material non-cash transactions during the year:
· The issue of 830,145,141 new Ordinary Shares at an issue price of
£0.057 per share as part consideration for the acquisition of Condor;
· the transfer from Treasury of 94,127,854 Ordinary Shares at a
price of £0.06 per Ordinary Share to fully repay the Drachs bridging loan;
and
· a share-based payment expense of US$21,621,805 in relation to
options issued and exercised during the year.
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2025
2025 2024
Notes US$ US$
Non-current assets
Investment in subsidiaries 15 105,761,508 -
Trade and other receivables 20 82,101,723 12,500,000
187,863,231 12,500,000
Current assets
Trade and other receivables 20 6,336,057 98,984,589
Cash and cash equivalents 19 20,824,729 27,281,596
27,160,786 126,266,185
Non-current liabilities
Trade and other payables 23 (14,570,940) (170,940)
(14, 570,940) (170,940)
Current liabilities
Loans 24 - (6,890,400)
Trade and other payables 23 (1,189,486) (1,548,304)
Derivative liabilities 21 (1,429,405) (519,589)
(2,618,891) (8,958,293)
Net assets 197,834,186 129,636,952
Equity
Share capital 26 387,136 235,366
Share premium account 26 79,260,654 313,458
Capital redemption reserve 38,266 50,401
Treasury shares 26 (19,278,326) (25,345,845)
Translation reserve 1,857,620 (4,135,798)
Other reserves 28 7,845,294 818,281
Profit and loss account 127,723,542 157,701,089
Equity attributable to equity holders of the parent 197,834,186 129,636,952
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 (loss) for the year ended 31
December 2025 dealt with in the financial statements of the Company was
US$(24,034,329) (2024: US$15,506,986 income).
The financial statements were approved by the Board of Directors on 20 May
2026 and were signed on its behalf by:
Darren Bowden; Chief Executive Officer
21 May 2026
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEARS ENDED 31 DECEMBER 2025 & 31 DECEMBER 2024
Share capital Share premium account Profit and loss account Total equity
Note Capital redemption reserve Treasury shares Translation reserve Other reserves
US$ US$ US$ US$ US$ US$ US$ US$
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)
- - - - 5,993,418 - - 5,993,418
Exchange differences on translating foreign currencies
Loss for the year - - - - - - (30,027,747) (30,027,747)
Total comprehensive loss for the year - - - - 5,993,418 (30,027,747) (24,034,329)
Share-based payment 28 - - - - - 7,027,013 50,200 7,077,213
Shares issued 26 151,770 78,947,196 (12,135) 6,067,519 - - - 85,154,350
387,136 79,260,654 38,266 (19,278,326) 1,857,620 7,845,294 127,723,542 197,834,186
Balance at 31 December 2025
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 share-based payments expense.
· Profit and loss account; being the cumulative profit attributable
to equity shareholders
COMPANY CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2025
2025 2024
Notes US$ US$
Net cash used in operating activities 29 (686,189) (2,020,715)
Investing activities
Purchase of subsidiaries, net cash invested (24,738,257) -
Interest income 920,659 147,809
Pre-takeover loan to Condor - (2,500,000)
Net cash used in investing activities (23,817,598) (2,352,191)
Financing activities
Repayment of borrowing principal - (23,893,712)
Repayment of borrowing interest - (3,338,575)
Net advances from subsidiaries 15,447,335 77,288,038
Borrowings 24 - 6,890,400
Shares issued 4,173,479 2,503
Off-market share buy back 26 - (25,345,845)
Net cash provided by financing activities 19,620,814 31,602,809
Net (decrease)/increase/ in cash and cash equivalents (4,882,973) 27,229,903
Cash and cash equivalents at beginning of year 27,281,596 51,034
Foreign exchange difference (1,573,894) 659
Cash and cash equivalents at end of year 20,824,729 27,281,596
The following were material non-cash transactions during the period:
· The issue of 830,145,141 new Ordinary Shares at an issue price of
£0.057 per share as part consideration for the acquisition of Condor;
· the transfer from Treasury of 94,127,854 Ordinary Shares at a price of
£0.06 per Ordinary Share to fully repay the Drachs bridging loan, and
· a share-based payment expense of US$21,621,805 in relation to options
issued and exercised during the year.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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 statements of the Group and the Company have been prepared in
accordance with UK adopted international accounting standards and the
Companies Act 2006 applicable to companies reporting under IFRS. The
financial information has been prepared under the historical cost convention,
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.
The anticipated free cash to be generated from Runruno is expected to be 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 2025. The new standards, interpretations and
amendments effective from 1 January 2025 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 2025. 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 issued and to be issued share
capital of Condor Gold plc. In assessing the acquisition, the Group determined
that the activities and assets acquired had the required inputs, processes and
outputs to constitute as a business under IFRS 3 - Business Combinations and
hence considered the acquisition has been accounted for as a business
combination.
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, initially to construction in
progress once technical feasibility and commercial viability of extracting a
mineral resource are demonstrable. Once commercial production is determined
these costs are transferred to tangible mining property assets. 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.
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.
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.
Mining properties under construction
A decision to develop a mine is made based upon consideration of project
economics, including future metal prices, reserves and resources, and
estimated operating and capital costs. Development costs relating to specific
mining properties are capitalised once management determines a property will
be developed. At this point prior capitalised exploration will be transferred
to construction in progress assets.
Capitalisation of costs incurred during the development phase ceases when the
property is capable of operating at levels intended by management and is
considered commercially viable. Costs incurred during the production phase to
increase future output by providing access to additional reserves are deferred
and depreciated on a units-of-production basis over the component of the
reserves to which they relate. Development costs incurred after the
commencement of production are capitalised to the extent they are expected to
give rise to a future economic benefit. Development costs are not depreciated
until such time as the areas under development enter commercial production.
The Group determines the commencement of commercial production at the point at
which the mine's plant becomes available for use as intended by management.
Determining when this is achieved is an assessment made by the Group's
management and includes the following factors:
· The level of development expenditure compared to project cost
estimates.
· Completion of a reasonable period of testing of the mine plant
and equipment (the commissioning period).
· Achieved mineral recoveries, plant availability and throughput
levels at a pre-determined percentage of design/forecast levels.
· The ability to produce gold into a saleable form.
· The achievement of a pre-set percentage level of continuous
production.
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 - Revenue from Contracts with Customers 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.
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.
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 2025, the
derivative instruments held by the Group were USD:PHP exchange rate forward
contracts.
Both the Group and the Company have recognised derivative liabilities as at 31
December 2025 arising from 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 and purchase price allocations
The acquisition of all the issued and unissued share capital of Condor Gold
plc ('Condor') required that an assessment be made on whether the purchase
involved identifiable assets, such as cash, specific equipment and mining
properties, 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
constituted 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 have the required characteristics above
and the purchase was classified as a business combination. The excess
consideration paid to acquire Condor was adjudged to relate entirely to the
value of the mineral property assets held by Condor.
Further, the Group has needed to determine the purchase price allocation, in
accordance with IFRS3, to determine the fair values of the identifiable assets
and liabilities at the acquisition date and to allocate the total purchase
price accordingly. In addition, the Group was required to consider the
likelihood of whether either or both of the Condor Contingent Value Right
payment obligations will crystalise.
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 of the Runruno operational
assets, 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.
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 FY2024 the Company booked a reversal of previous impairments made against
loans receivable from its Philippine operations, recognising the improved
trading outcomes of operating subsidiaries.
During FY2025 significant Group loans were made to the recently acquired
Nicaraguan subsidiaries, made in the main to advance the construction of the
La India project. These advances to the Nicaraguan subsidiaries total US$76.5
million as at year-end. These advances are expected to be fully recovered from
future operations.
Condor Contingent Value Rights ("CVRs")
The Condor takeover consideration included two CVRs. The first CVR relating to
the first gold pour from a fully commissioned process plant processing ore
mined from Condor tenement areas becomes due upon the first gold pour from
commercial operations at La India. Upon completing the Condor takeover the
Group embarked on an aggressive construction process aimed to have the La
India project developed such that a first gold pour is expected to occur in Q4
2026, with the declaration of commercial production expected to be made during
Q1 2027. Thus, it was estimated that the first CVR will in due course be paid
to Condor shareholders. As a result, this liability has therefore been brought
to account in this period, as a component of the total Condor purchase price.
The second CVR, relating to an increase in total resources discovered within
the Condor tenement areas, is dependent upon future exploration success and as
such the Company cannot be certain that this obligation will eventually be
paid, in part, in full or not at all. As a result, the second CVR tranche that
is related to the growth in gold resources on the Condor tenements has been
treated as a contingent liability at the acquisition date, and is not included
in the Condor purchase price.
Refer note 14.
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. Operating income
2025 2024
A) Revenue US$ US$
Sale of gold doré 207,524,124 189,889,686
Sale of gold concentrate 889,295 1,259,929
208,413,419 191,149,615
All gold doré sales are made to a single refinery customer with 100% of sales
proceeds received within 5-10 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.
2025 2024
B) Cost of sales US$ US$
Depreciation 59,246,960 53,283,160
Materials and supplies 25,898,257 28,553,441
Professional and consultancy fees 14,553,269 12,626,674
Utilities 13,286,575 12,794,878
Taxes, permits, licences 11,683,980 10,542,130
Personnel costs 7,152,159 7,113,961
Insurance 1,424,054 1,401,130
Other 2,111,406 2,315,602
135,356,660 128,630,976
4. Operating profit for the year is stated after charging:
2025 2024
US$ US$
Depreciation of property, plant and equipment (note 12) 59,254,031 53,266,786
Amortisation (note 13) - 7,664
Foreign exchange losses 702,348 99,867
Share based payments expense 21,621,805 705,298
Staff costs (note 7) 17,765,701 12,314,666
Auditor's remuneration (note 5) 200,124 171,944
5. Auditor's remuneration
2025 2024
US$ US$
Fees payable to the Group and Company's auditor for the audit of the Group and 196,073 168,108
Company's accounts
Fees payable to the auditor for other services 4,051 3,836
200,124 171,944
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. For FY2025, the primary segments have been identified into three
geographic areas of the UK, Philippines and Nicaragua. 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 FY2025 and FY2024 and the reconciliation of the
segment measures to the respective statutory items in the consolidated
financial information are as follows:
Year ended 31 December 2025 UK Philippines Nicaragua Total
US$ US$ US$ US$
Segment results
Sales revenue - 208,413,419 - 208,413,419
Group operating (loss)/profit (6,655,316) 69,101,902 (884,965) 61,561,621
Other income and expenses (20,975,379) (1,795,870) (27,429) (22,798,678)
Impairment reversals - 908,828 - 908,828
Provision for derivative gain - 5,453,412 - 5,453,412
Share of (loss) of associates - (5,158) - (5,158)
(Loss)/profit before tax (27,630,695) 73,663,114 (912,394) 45,120,025
Segment assets
Segment tangibles & intangibles - 87,797,795 144,179,448 231,977,243
Segment receivables & inventories 1,387,634 48,424,729 63,277 49,875,640
Segment cash 21,749,541 17,754,543 1,667,452 41,171,536
Equity-accounted investees - 128,253 - 128,253
Total segment assets 23,137,175 154,105,320 145,910,177 323,152,672
Segment liabilities
Segment loans - - - -
Segment trade & other payables (15,435,149) (25,865,331) (2,338,155) (43,638,635)
Segment provisions and retirement benefits obligations - (10,768,142) - (10,768,142)
Segment derivative liabilities (1,429,405) - - (1,429,405)
Segment deferred tax - (700,453) (13,830,000) (14,530,453)
Total segment liabilities (16,864,554) (37,333,926) (16,168,155) (70,366,635)
6,272,621 116,771,394 129,742,022 252,786,037
Total segment net assets
Segment other information
Amortisation of intangible assets - - - -
Depreciation of property, plant and equipment - 59,254,031 - 59,254,031
Additions to property, plant and equipment - 10,021,770 73,345,037 83,366,807
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 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 & charges (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 34,640,611
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
Amortisation of intangible assets - 7,664 7,664
Depreciation of property, plant and equipment - 53,266,786 53,266,786
Additions to property, plant and equipment - 6,178,568 6,178,568
* The Nicaraguan assets were acquired in January 2025 and hence there are no
Nicaraguan located FY2024 comparatives.
7. Staff numbers and costs - Group
2025 2024
The average number of persons, including Directors, was: Number Number
Administration 66 13
Development & operations 953 846
1,019 859
2025
Staff costs of the above persons were: US$
Wages and salaries 16,275,692 11,758,799
Social security costs 1,136,101 533,905
Retirement and pension costs 353,908 21,962
17,765,701 12,314,666
Refer to the Remuneration Report on pages 26-30 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.
Share options held by Directors:
As at 31 December 2025, 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 2024 31 December 2025
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
7 February 2025 £0.0001 7 February 2032 - 12,000,000 - 12,000,000
25 June 2025 £0.0001 25 June 2032 - 10,600,000 - 10,600,000
8. Other charges and income applied against profit and
loss
8(a). Impairment reversal and impairment charge
Property, plant and equipment (PPE) - Runruno
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 life of mine ("LOM") and at appropriate discount rates.
The Runruno mine is in its last year of production with mining activities
forecast to complete during H2 2026 and processing operations likely to finish
by or around the year end. The April 2026 projected cash flow model shows that
FCF should produce free cash flows in FY2026 of greater than the carrying
value of the PPE.
The recoverable amount estimate was based on the following key assumptions and
source information:
· gold resources to be mined based on current estimated FY2026 gold
production;
· estimated average FY2026 gold recoveries forecast to be 75.9%;
· estimated FY2026 capital expenditure of US$11.5 million;
· estimated FY2026 operating and administration costs; and
· FY2026 gold revenues based upon December 2025 industry consensus
gold price predictions.
Given this is the final year of operations this free cash flow model has not
been discounted.
As a result, management's assessment of impairment indicators is that the
Runruno CGU is not impaired; notwithstanding there remains an historic
impairment charge from FY2018.
However, in order to comply with IAS 36 -- Impairment of Assets, any PPE
impairment reversal can only be of a magnitude such that the PPE net book
value does not exceed the theoretical net book value had the original PPE
impairment charge never been made. As a result, in FY2025 the impairment
reversal is limited to the headroom available to it while remaining compliant
with IAS 36. Thus, in FY2025, an impairment reversal of US$2.14 million was
made, while no impairment reversal of PPE was made in FY2024.
The impact of complying with IAS 36 is that at December 2025 the Company still
carries an impairment charge against Runruno PPE of US$47.86 million with the
net book value of the Runruno PPE of US$46.44 million.
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 of 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 103 of the annual report.
8(a). Impairment charge and impairment reversal)
Receivables due - Group
Impairment charges have been raised against trade and other receivables due in
relation to Philippine 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 has not
been able to secure 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, a provision for loss has been raised against
this asset in relation to VAT the Group does not expect to fully recover.
(Refer note 17).
Investments in, and receivables due from, subsidiaries- Company
The Company's operating subsidiaries have funded by loans from the parent
Company. The historic loans to fund the Runruno project CGU have since
year-end been fully repaid. The improved performance of this group of
subsidiaries has resulted in the impairment in the investment in the Singapore
located holding company being fully reversed in FY2025.
In FY2025, substantial new parent Company loans have been advanced to the
Nicaraguan group of subsidiaries. The Company's estimates that its Nicaraguan
operations will produce future cash flows of an order that will enable the
full repayment of the parent Company loans and its investment in these
subsidiaries.
8(b). Other income and expenses
2025 2024
US$ US$
Condor Gold takeover direct costs (note 14) (913,452) (1,252,312)
Exchange (loss)/gain (373,730) 744,37)
Interest income 921,159 148,751
Interest expenses (849,103) (2,332,796)
Share based payment expense (note 28) (21,621,805) (673,930)
Sundry income 38,253 46,813
Other income and expenses (22,798,678) (3,319,103)
9. Taxation
The taxation expense comprises the following
2025 2024
US$ US$
Current year corporate income tax payable 11,056,460 8,945,430
Current year FTAA 2025 government profit share tax* 5,284,645 -
Current year deferred tax expense 161,198 119,313
Total tax expense for the year 16,502,303 9,064,743
* Under the terms of the FTAA the Philippine government is entitled to a
government profit share tax as calculated in accordance with the FTAA fiscal
conditions.
The total tax expense for the year can be reconciled to profit for the year as
follows:
Profit before tax 45,456,619 34,640,611
Tax on profit at UK corporation tax rate of 25% (2024: 25%) 11,364,155 8,660,153
Effects of:
Overseas income/(expenses) not taxable 486,505 116,123
Differing tax rates in different jurisdictions (12,008) -
Tax losses (utilised)/carried over not previously recognised (1,747,533) 4,652,264
Non-taxable and non-allowable items 200,753 (3,980,627)
Tax paid/(credits) relating to prior periods 925,786 (383,170)
FTAA 2025 government profit share tax 5,284,645 -
Total taxation expense for the year 16,502,303 9,064,743
10. Deferred tax liabilities/assets
Deferred tax liabilities 2025 2024
US$ US$
Opening balance 556,515 544,695
Charge for period 143,938 11,820
Acquisition movements* 13,830,000 -
14,530,453 556,515
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 2025 whereas the foreign currency
composition of the statement of total comprehensive income is translated using
the average rate for the whole of the year.
* This relates to the application of IAS 12 - Income Taxes requiring a
deferred tax liability to be charged in respect of the fair value uplift of
the Condor mining properties. Refer note 14.
10. Deferred tax liabilities/assets (continued)
Deferred tax assets
For the year ended 31 December 2025 the Group has net unused tax losses of
US$109.5 million (2024: US$63.1 million) available for offset against future
profits. However, due to the restricted ability to apply UK losses against
Group income together with the Nicaraguan tax losses only being able to be
utilised for 3 years after being incurred, the deferred asset has not been
recognised on the Consolidated Balance Sheet due to uncertainty over its
future reversal.
For the year ended 31 December 2025 the Group has net unused tax losses
available for offset against future profits as follows:
2025 2024
US$ US$
UK 104,351,344 63,122,755
Nicaragua 5,176,582 -
Group unused tax losses available 109,527,926 63,122,755
11. Earnings per voting share
2025 2024
US$ US$
Earnings
Net profit attributable to equity shareholders for the purpose of basic and
diluted earnings per voting share
28,891,939 25,586,079
Number of shares
Weighted average number of ordinary shares for the purpose of
basic earnings per voting share
2,759,500,878 1,988,200,730
209,389,388 17,302,732
Number of dilutive shares under option/warrant
Weighted average number of ordinary shares for the purpose of 2,968,890,267 2,005,503,462
diluted earnings per voting share
Earnings per voting share
Cents per voting share Cents per voting share
Basic earnings 1.05 1.29
Diluted earnings 0.97 1.28
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 Land, 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 2024 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
Additions - 550 83,248 1,738,582 77,614,689 155,727 - 3,774,011 83,366,807
Acquired on subsidiary purchase - - 4,264,046 - 94,081,045 - - - 98,345,091
As at 31 December 2025 1,837,982 1,679,483 8,516,655 37,019,135 178,852,095 119,314,219 39,628,712 146,127,410 532,975,691
Impairment
As at 1 January 2024 - - - - - - - (50,000,000) (50,000,000)
Reversal (refer note 8(a)) - - - - - - - - -
31 December 2024 - - - - - - - (50,000,000) (50,000,000)
Reversal (refer note 8(a)) - - - - - - - 2,144,736 2,144,736
As at 31 December 2025 - - - - - - - (47,855,264) (47,855,264)
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 2024 (1,330,395) (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 (1,547,648) (1,650,145) (3,707,030) (28,677,331) - (87,325,918) (29,432,427) (55,378,654) (207,719,153)
Charge for the period (202,702) (21,487) (372,093) (5,482,018) - (21,353,684) (6,873,884) (24,948,163) (59,254,031)
As at 31 December 2025 (1,750,350) (1,671,632) (4,079,123) (34,159,349) - (108,679,602) (36,306,311) (80,326,817) (266,973,185)
Net book value
As at 31 December 2025 87,632 7,851 4,437,532 2,859,786 178,852,095 10,634,617 3,322,401 17,945,329 218,147,243
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
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$ US$
Cost
As at 1 January 2024 - - 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
Additions 620,978 - - 620,978
Intangibles arising from acquisition - 13,830,000 - 13,830,000
As at 31 December 2025 857,997 14,213,312 707,388 15,778,697
Amortisation and impairment
As at 1 January 2024 - - (699,724) (699,724)
Amortisation charge for the period - - (7,664) (7,664)
As at 31 December 2024 - - (707,388) (707,388)
Amortisation charge for the period (857,997) (383,312) - (1,241,309)
As at 31 December 2025 (857,997) (383,312) (707,388) (1,948,697)
Net Book Value
As at 31 December 2025 - 13,830,000 - 13,830,000
As at 31 December 2024 237,019 383,312 - 620,331
14. Business Combination
Acquisition of Condor Gold plc ('Condor')
On 15 January 2025, the Company acquired the entire issued, and to be issued,
share capital of Condor, a publicly quoted company incorporated in England
& Wales, via a court approved Scheme of Arrangement ("Scheme"). Condor is
the parent of a group of entities that 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 the Scheme
conversion share price of £0.057 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. Refer note 27.
In addition, each Condor shareholder received one Contingent Value Right
("CVR") per Condor share held 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 3.158 Moz of gold, subject to a cap of 800,000oz above 3.158 Moz.
At the time of the acquisition the Company expected that the first tranche CVR
obligation will be paid to Condor shareholders in mid-2027, and this liability
has therefore been brought to account in this period. The payment of the
second CVR tranche is dependent upon future exploration success and as such
the Company cannot be certain that this obligation will eventually be paid, in
part, in full or not at all. As a result, the second CVR tranche that is
related to the growth in gold resources on the Condor tenements has been
treated as a contingent liability at the acquisition date.
The main assets held by Condor included mineral tenement licences, various
process plant items, vehicles and land holdings. At the time of acquisition,
the La India project was development ready with all necessary government
approvals in place. Further, Condor had an appropriate workforce implementing
necessary environmental, community and social initiatives such that once
funded, Condor could commence development of the La India project. As a
result, the transaction was treated as a business combination rather than an
asset acquisition.
In assessing whether the acquisition met the definition of a business under
IFRS 3 - Business Combinations, the Group concluded that Condor possessed a
substantive set of inputs (including mineral tenement licenses, exploration
data, development permits, and physical assets) together with substantive
processes (including geological evaluation procedures, mine‑development
planning, environmental and social‑impact management systems, and an
assembled workforce with technical and operational expertise). These inputs
and processes were capable of being applied to generate outputs in the form of
a fully permitted and development‑ready gold mining project expected to
produce economic benefits once funded.
The Group also determined that it obtained control of Condor at the
acquisition date through acquiring 100% of its issued and to‑be‑issued
share capital, thereby gaining the power to direct relevant activities, access
substantially all future economic benefits, and assume associated risks.
The estimated 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 2025 are:
Carrying value
Net Condor assets acquired US$'000s
Cash 1,627
Other receivables 815
Plant and equipment 9,728
Mineral properties 45,656
Other liabilities (4,479)
Total identifiable net assets 53,347
Fair value adjustment - mineral properties 46,099
Deferred tax liability re fair value adjustment (13,830)
Total identifiable net assets at fair value 85,616
Goodwill on acquisition 13,830
99,446
Net assets acquired
Consideration paid
Cash 24,726
Shares issued 57,722
Share-based payment expense re options issued 2,598
Potential CVR deferred consideration 14,400
99,446
Total potential consideration
A fair value adjustment has been attributable to the value of the gold
exploration licences held by Condor. The acquisition provided a significant
growth opportunity for the Group as the La India project was construction
ready with all necessary development approvals in place. Since acquiring
Condor, the Group has commenced construction of the La India project with the
aim to commence gold production by the end of 2026, at which time operations
at Runruno in the Philippines will be winding down.
The fair value adjustment to mineral properties is considered to reflect the
actual value of the assets acquired as the final takeover consideration was
determined following a competitive bidding process between potential
purchasers. The fair value adjustment to mineral properties is not expected
to be deductible for tax purposes, and will be amortised over the expected
life of the La India mine once commercial production has commenced.
A deferred tax liability of US$13,830,000 has been recognised on the fair
value uplift of US$46,099,000 attributable to the Condor mineral properties.
This liability arises from the taxable temporary difference between the fair
value of the mineral properties recognised in the consolidated financial
statements under IFRS 3 and the tax base of those assets in Nicaragua, being
their historical cost as recognised in the Nicaraguan operating entities. This
deferred tax liability is recognised as a consolidation adjustment and does
not appear in the individual financial statements of any group entity. The
recognition of the deferred tax liability gives rise to goodwill of
US$13,830,000 in accordance with IAS 12 paragraph 66, representing the
mechanical consequence of the deferred tax recognition rather than economic
goodwill arising from the combination.
The goodwill of US$13,830,000 recognised on the acquisition of Condor
represents the deferred tax liability recognised on the fair value uplift of
the mineral properties in accordance with IAS 12. It does not represent
synergies, assembled workforce or other economic value arising from the
combination. The goodwill is allocated to the La India cash generating unit
and will be tested for impairment annually in accordance with IAS 36.
From the date of acquisition Condor has not contributed any revenue to the
Group's Statement of Comprehensive Income while in the same period it has
incurred an after-tax loss of US$1 million.
The Company incurred once-off acquisition costs of US$2.23 million within the
FY2024 and FY2025 Other income/expenses in the Consolidated Statement of
Comprehensive Income, comprising legal, compliance and professional fees.
15. Investments in subsidiaries - Company
2025 2024
US$ US$
Cost 105,761,508 8,783,629
Impairment - (8,783,629)
At 31 December 105,761,508 -
The substantial increase in investments is subsidiaries in FY2025 reflects the
acquisition of Condor Gold in January 2025 (FY2025: US$97,749,395 - FY2024:
US$nil). Further in FY2025, the impairment charge against the Company's
investment in Metals Exploration Pte Ltd, the Singaporean registered holding
company was fully reversed given the improved trading performance and balance
sheet strength of MEPL's investments in the Group's Philippine located
companies (FY2025: US$8,012,113 - FY2024 US$nil).
16. Investments in associates - Group
2025 2024
US$ US$
At 1 January 133,411 121,381
Share of (losses)/profits of associates (5,158) 12,030
At 31 December 128,253 133,411
Domicile Assets Liabilities Equity Sales Gains/(losses) Ownership of
US$ US$ at 31 Dec 2025 US$ US$ ordinary shares
Associate company US$ on issue
%
Philippines 39.99%
Cupati Holdings Corporation 2,129,885 (284,987) 86,976 42,353
2,498,806
Woggle Corporation Philippines 1,419,655 1,631,021 582,591 - (55,247) 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 2025 2024
US$ US$
Pre-takeover loan to Condor - 2,500,000
Other receivables 15,622,039 17,250,486
15,622,039 19,750,486
Other receivables include Philippine 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. At
year-end a provision for loss of US$3.1 million has been raised against these
receivables (FY2024: US$13.0 million).
As part of the Scheme of Arrangement to acquire Condor the Company had
provided Condor with a twelve month unsecured US$2,500,000 loan at an annual
interest rate of 10% per annum. On maturity this loan was reclassified as an
intragroup non-current loan.
Group - Due within one year 2025 2024
US$ US$
Receivables from gold sales 12,972,171 7,983,137
Other receivables 3,294,375 2,079,280
Prepayments 781,039 828,977
17,047,585 10,891,394
100% of receivables from gold doré sales are received within 10 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 10 days of year end, the Group had collected 100%
(2024: 95%) of the year-end trade receivables outstanding. 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 (2024: Nil).
18. Inventories - Group
2025 2024
US$ US$
Gold doré on hand 2,321,683 2,499,509
Gold in circuit 574,092 1,302,836
Gold in ore stockpiles 5,978,200 4,459,003
Consumable inventories 10,332,041 12,891,526
Provision for obsolete consumable inventories (2,000,000) (3,030,483)
17,206,016 18,122,391
Gold inventories are recorded at the lower of cost and net realisable value.
During FY2025, consumable inventories recognised as an expense in cost of
sales was US$27.96 million (2024: US$30.52 million). Consumable inventories
written off in FY2025 totalled US$1.7 million (FY2024: US$1.5 million).
19. Cash and cash equivalents
Group 2025 2024
US$ US$
Cash on hand 58,230 7,438
Current and short-term deposit accounts 41,113,306 4,039,076
Cash held in escrow account - 27,178,182
41,171,536 31,224,696
Company 2025 2024
US$ US$
Current accounts and short-term deposit 20,824,729 103,414
Cash held in escrow account - 27,178,182
20,824,729 27,281,596
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.
Cash was held in an escrow account as at 31 December 2024 to satisfy the cash
consideration conditions pertaining to the offer to acquire Condor.
20. Trade and other receivables - Company
Company - Due after one year 2025 2024
US$ US$
Pre-takeover loan to Condor - 2,500,000
Receivables from subsidiaries 82,081,723 10,000,000
82,081,723 12,500,000
Company - Due within one year 2025 2024
US$ US$
Receivables from subsidiaries 5,786,361 98,634,010
Other receivables 294,129 282,167
Prepayments 255,567 68,412
6,336,057 98,984,589
21. Derivative instruments
Gold option contracts
During FY2025 gold price hedge contracts covered 15,800 ounces (FY2024: 49,200
ounces) of gold production. As a result of the increase in gold price after
entering into the contracts, all call options were 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 FY2025, due to the exercise
of these prior sold call options was US$14.9 million (2024: US$5.9 million).
The Group and the Company had recognised a current liability as at 31 December
2024 of US$6.35 million in relation to these contracts.
The final historic gold price hedge was settled in October 2025 and there are
no gold price hedge contracts in place as at 31 December 2025. As such there
is no current liability as at 31 December 2025 in relation to open gold price
hedge contracts.
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 FY2026 and FY2027 totalling US$43 million at an average FOREX rate of
56.86 (FY2024: US$39 million at 57.11).
The Group and the Company have recognised a current liability as at 31
December 2025 of US$1.4 million (2024: US$0.5 million) being the change in the
fair value of the forward contracts based on the same USD:PHP exchange rate.
22. Retirement benefits obligations - Group
The Group has an unfunded, non-contributory defined benefit retirement plan
covering substantially all regular Filipino employees who have rendered at
least six months of continuous service. Benefits are dependent on the years of
service and the respective employee's compensation. The valuation of the
retirement plan obligation is determined using the projected unit credit
actuarial cost method. There was no planned termination, curtailment or
settlement in either 2025 or 2024.
The relevant Philippine regulatory framework, RA 7641, known as the
'Retirement Pay Law', requires a provision for retirement pay to qualified
private sector employees in the absence of any retirement benefits under any
collective bargaining and other agreements being not less than those provided
under the law.
The amounts of retirement benefits costs recognised in the statements of
comprehensive income are determined as follows:
2025 2024
US$ US$
Current service costs 466,947 289,178
Past service costs (271,231) -
Interest costs 158,143 130,406
353,859 419,584
The amounts were distributed as follows:
2025 2024
US$ US$
Cost of sales 186,455 275,098
Administration costs 9,261 14,080
Interest costs 158,143 130,406
353,859 419,584
Changes in the present value of the retirement benefits liability are
determined as follows:
2025 2024
US$ US$
Balance at beginning of year 3,154,594 2,471,289
Current service costs 466,947 289,178
Interest costs 158,143 130,406
Reclassifications 46,813 -
Benefits paid (103,322) (164,134)
Past service costs (271,231) -
Actuarial loss/(gain) due to:
Changes in financial assumptions (25,283) 75,666
Experience adjustments 96,450 352,189
Total liability 3,523,111 3,154,594
Less: Plan assets balance at year-end (1,008,197) -
Net liability at year end 2,514,914 3,154,594
The principal assumptions used in determining the defined benefit retirement
plan obligations are as follows:
2025 2024
Discount rate 6.09% 5.99%
Salary increase rate 3.00% 2.00%
Expected remaining working lives of employees 1 year 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 of the total benefits liability 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/ 2025 2024
(decrease) US$ US$
Discount rates +1% 3,154,365 2,879,677
-1% 3,204,838 2,960,928
Salary pay increases +1% 3,259,745 2,975,966
Shown below is the maturity analysis of the net benefit liability:
2025 2024
US$ US$
Less than one year 2,350,444 57,122
More than one year to five years 164,470 3,820,264
2,514,914 3,877,386
23. Trade and other payables
Due within one year
Group 2025 2024
US$ US$
Trade payables 11,658,929 8,141,209
Other payables and accruals 1,001,768 2,265,177
Income and FTAA government profit share tax payable 15,352,830 8,184,977
Other tax and social security payable 876,560 332,661
28,890,087 18,924,024
Company 2025 2024
US$ US$
Trade payables 341,868 1,202,458
Other tax and social security payable 624,529 113,109
Accruals 223,089 232,737
1,189,486 1,548,304
Due after one year
Group 2025 2024
US$ US$
Amount owing to associate 70,850 70,850
Other payables 684,486 -
Contingent value rights 14,400,000 -
15,155,336 70,850
Company 2025 2024
US$ US$
Amount owing to associate 70,850 70,850
Amount owing to subsidiary 100,090 100,090
Contingent value rights 14,400,000 -
14,570,940 170,940
Trade payables comprise amounts outstanding for trade purchases and on-going
costs, and together with other payables and accruals are measured at amortised
cost. The CVR liability relating to the first gold poured from commercial
operations at La India is expected to be paid during FY2027.
24. Loans
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 by the transfer from Treasury
of 94,127,854 Ordinary Shares at a price of £0.06 per Ordinary Share.
As at 31 December 2025 the outstanding loan position was:
Group and company 2025 2024
US$ US$
Short-term bridging loan 6,890,400 -
Opening balance
Loan drawdown - 6,890,400
Loan repayment (6,890,400) -
Closing balance - 6,890,400
25. Provision for mine rehabilitation and decommissioning
2025 2024
US$ US$
At 1 January 4,207,571 4,145,567
Change in estimate (1,448,134) -
Addition 5,257,855 -
Unwinding of discount 235,936 125,004
At 31 December 8,253,228 4,270,571
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. With the Runruno mine is in
its last year of production such that closure activities are expected to
commence early in FY2027 these estimated costs are being regularly reviewed
and can be estimated with a greater degree of certainty. These costs include
labour, equipment hire, consumables and transportation for disposal, with the
provision being unwound for inflation and interest charges for FY2025.
However, actual costs will ultimately depend upon future market prices for the
necessary works required which will reflect market conditions at the relevant
time.
In FY2025 the Company has increased the closure provision to cover the
expected costs of dismantling the Runruno processing plant and transporting it
to a port, ready for deployment to a new Company project that will utilise
this and re-purpose this plant and equipment. Previously it had been assumed
that the Runruno processing plant would be sold to a third party and the
associated dismantling costs would be at the third party's cost.
No provision for rehabilitation at La India has been created as at year-end as
there were no material rehabilitation obligations arising from the early
stages of development and construction. The Group intends to commence
accounting for rehabilitation obligations at La India during FY2026 as the
project moves towards the construction completion and commencement of gold
production.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
26. Called up share capital and share premium
During FY2025 the Company made the following issues of new ordinary shares of
£0.0001 each ("Ordinary Shares"):
· On 15 January 2025, 830,145,141 new Ordinary Shares at an issue
price of £0.057 per share as part consideration for the acquisition of
Condor;
· On 12 February 2025, 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;
· On 3 June 2025, 229,600,000 new Ordinary Shares at an issue price
of £0.0001 per share being the exercise of options issued in accordance with
the Company's LTIP;
· On 3 June 2025, 11,122,524 new Ordinary Shares at an issue price of
£0.0725 per share being the exercise of options issued to Condor shareholders
as part consideration for the acquisition of Condor;
· On 3 June 2025, 9,889,058 new Ordinary Shares at an issue price of
£0.0605 per share being the exercise of warrants issued in relation to the
acquisition of Condor;
· On 30 June 2025, 1,233,818 new Ordinary Shares at an issue price of
£0.0605 per share being the exercise of warrants issued in relation to the
acquisition of Condor;
· On 23 July 2025, 1,161,555 new Ordinary Shares at an issue price of
£0.0605 per share being the exercise of warrants issued in relation to the
acquisition of Condor;
· On 23 July 2025, 6,947,280 new Ordinary Shares at an average issue
price of £0.0602 per share being the exercise of options issued in relation
to the acquisition of Condor;
· On 23 September 2025, 1,033,818 new Ordinary Shares at an issue
price of £0.0605 per share being the exercise of warrants issued in relation
to the acquisition of Condor;
· On 23 October 2025, 868,410 new Ordinary Shares at an issue price
of £0.0829 per share being the exercise of options issued in relation to the
acquisition of Condor;
· On 30 October 2025, 173,681 new Ordinary Shares at an issue price
of £0.0605 per share being the exercise of warrants issued in relation to the
acquisition of Condor;
· On 19 December 2025, 12,773,206 new Ordinary Shares at an average
issue price of £0.07.33 per share being the exercise of options issued in
relation to the acquisition of Condor.
Further, on 7 March 2025, the Company repaid its bridging loan, principal and
interest, by the transfer from Treasury of 94,127,854 Ordinary Shares at a
price of £0.06 per Ordinary Share.
During FY2024 the Company made the following issues of new Ordinary Shares:
· On 5 April 2024, 6,600,000 new Ordinary Shares at an issue price of
£0.0001 per share, following the exercise of options;
· On 20 June 2024, 13,200,000 new Ordinary Shares at an issue price
of £0.0001 per share, following the exercise of options;
· On 27 August 22024, 3,785,446 Ordinary Shares at an average issue
price of £0.0353 per share in accordance with the Company's 2023 short-term
management incentive programme.
During August and September 2024, the Company completed the off-market buy
back of 393,513,302 Ordinary Shares (representing an 18.6% interest at that
time) at a price of 5p per Ordinary Share, and placing these Ordinary Shares
into Treasury. In March 2025, 94,127,854 Ordinary Shares were transferred from
Treasury to ordinary share capital at a price of 6p per Ordinary Share. As at
31 December 2025, 299,385,458 shares were held in Treasury. Shares held in
Treasury have no voting 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. The issued
capital of the Company is:
December 2025 December 2024 December 2025 December 2024
Ordinary shares of £0.0001 par value Number of shares Number of shares US$ US$
Opening balance 2,121,729,717 2,098,144,271 235,366 282,783
Shares issued 1,118,512,421 23,585,446 139,635 2,984
Treasury shares (299,685,458) (393,513,302) 12,135 (50,401)
Closing balance - voting shares 2,940,556,680 1,728,216,415 387,136 235,366
Non-voting Treasury shares of £0.0001 par value
Opening balance 393,513,302 - 25,345,845 -
Shares transferred (from)/into treasury (94,127,844) 393,513,302 (6,067,519) 25,345,845
Closing balance - non-voting shares 299,385,458 393,513,302 19,278,326 25,345,845
Share premium
Opening balance 313,458 144,350
Shares issued 78,947,196 169,108
Closing balance 79,260,654 313,458
27. Share options and warrants
Movements in the year in options over Ordinary Shares were as below:
Expiry date Exercise price Opening balance Issued during period Exercised during the period Lapsed during the period Closing balance
£
31 May 2025* 0.0725 - 15,805,057* 11,122,524 4,682,533 -
31 May 2026* 0.0829 - 20,647,890* 12,505,104 - 8,142,786
13 September 2027* 0.0492 - 20,595,783* 4,544,679 - 16,051,104
5 July 2028* 0.0397 - 22,804,442* 644,413 - 22,160,029
29 May 2029* 0.0484 - 28,339,112* 2,894,700 25,444,412
28 June 2029 0.0001 6,600,000 - 6,600,000 - -
27 August 2031 0.0001 38,500,000 - - (500,000) 38,000,000
7 February 2032** 0.0001 - 318,000,000** 223,000,000 - 95,000,000
25 June 2032** 0.0001 - 10,600,000** - - 10,600,000
* Issued to Condor option holders in accordance with the Scheme of Arrangement
takeover of Condor.
** Issued to directors and senior management in accordance with the Company's
("LTIP") approved by shareholders at the 27 August 2024 general meeting.
Movements in the year in warrants over Ordinary Shares were as below:
Expiry date Exercise price Opening balance Issued during period Exercised during the period Lapsed during the period Closing balance
£
21 January 2028* 0.0605 - 31,671,104* 13,491,930 - 18,179,174
* Issued to Condor warrant holders in accordance with the Scheme of
Arrangement takeover of Condor.
28. Share-based payments
Options issued during the year contributing to the FY2025's share-based
expense were:
Long-term incentive options ("LTIP")
An issue of LTIP options was made to directors and senior management in both
February and June 2025. Refer to the Remuneration Report, pages 29, for
commentary on the implementation of the LTIP.
LTIP options 2025
Number of options
Opening balance -
Options issued 328,600,000
Options exercised (223,000,000)
Options on issue at 31 December 105,600,000
Options that have vested and are exercisable as at 31 December 68,600,000
( )
( )These options were subject to vesting conditions set significantly prior
to the options being issued including conditions surrounding the repayment of
the Group's external debt and some market price hurdles that were satisfied
prior to the LTIP options being issued. The only remaining vesting hurdle,
besides a three-year continuity of employment condition, was that the 30-day
volume weighted average price of each Company share traded on AIM had to
exceed £0.075 during the life of the option. This vesting hurdle was
satisfied during the year.
Following satisfaction of vesting hurdles, approximately 70% of the LTIP
options were exercised. This has resulted in bringing to account the full
share-based payment expense relating to the exercised options in FY2025,
rather than having this expense spread over the life of the options.
The fair value measurement of the LTIP options issued in February 2025 was
independently valued, using a Monte Carlo Simulation valuation model, ranging
from £0.04851 to £0.05098 per option, based upon the following:
· Share price at the date of option issue of £0.0525,
· Option exercise price of £0.0001,
· Estimated share volatility of 57%,
· Option life of 7 years,
· Nil dividends during the life of the options,
· Risk-free interest rate of 4.2%,
The fair value measurement of the LTIP options issued in June 2025, using a
Black-Scholes option valuation method and the same assumptions as above, was
£0.1049 per option.
Condor takeover options
In accordance with the Scheme of Arrangement takeover of Condor new MTL
options were issued to replace existing Condor options. The separate Condor
takeover options issued were:
Expiry date Exercise price £ Issued during period Black-Scholes option value £
31 May 2025 0.0725 15,805,057 0.0022
31 May 2026 0.0829 20,647,890 0.0088
13 September 2027 0.0492 20,595,783 0.0224
5 July 2028 0.0397 22,804,442 0.0290
29 May 2029 0.0484 28,339,112 0.0279
28. Share-based payments (continued)
( )The Condor takeover options have no vesting conditions.
The fair value measurement of the Condor takeover options, using a Black
Scholes option valuation method, was based upon the following:
· Share price at the date of option issue of £0.056,
· Estimated share volatility of 50%,
· Nil dividends during the life of the options,
· Risk-free interest rate of 4.23%.
Prior financial year option issues that contributed to the FY 2025 share based
payment expense consisted of:
Directors' on-boarding options
In previous years the Company issued options, exercisable at nominal par
value, as part of securing the services of non-executive directors to the
board. No new director on-boarding share options were issued during FY2025.
FY2024 tranche 2025 2024
Number of options Number of options
Opening balance 6,600,000 -
Options issued - 6,600,000
Options exercised (6,600,000) -
Options on issue at 31 December - 6,600,000
YMC purchase Tranche B options
In August 2024, the Company issued 41 million Tranche B options, as a
condition to the purchase of the YMC group. The Tranche B options are
exercisable at nominal par value, on or before 27 August 2031.
Tranche B options 2025 2024
Number of options Number of options
Options on issue at 1 January 38,500,000 -
Options issued - 41,000,000
Options lapsed (500,000) (2,500,000)
Options on issue at 31 December 38,000,000 38,500,000
Options that have vested as at 31 December 38,000,000 -
29. Net cash generated from/(used in) operating activities
Group 2025 2024
US$ US$
Profit after tax 28,617,722 25,575,868
Depreciation and amortisation 59,254,031 53,274,450
Provisions (5,217,476) 6,521,465
Impairment (charge)/reversal, net (908,828) 9,065,277
Share of losses/(profits) of associates 5,158 (12,030)
Share based payment expense 21,621,805 673,930
Shares issued in lieu of cash bonus 577,984 169,589
Interest income (925,471) (148,751)
Finance expenses - 1,588,425
Foreign exchange loss/(gain) 2,158,130 2,977,540
(Increase) in receivables (5,201,695) (14,152,125)
Decrease/(Increase) in inventories 242,849 (1,710,092)
Increase in payables 7,644,771 1,646,696
Net cash generated from operating activities 107,868,980 85,470,242
Company 2025 2024
US$ US$
(Loss)/profit after tax (30,027,747) 17,288,079
Impairment (reversal) (1,317,905) (16,340,839)
Provisions 896,768 171,285
Share based expense 21,621,805 673,930
Shares issued in lieu of cash bonus 577,984 169,589
Finance expenses - 714,451
Interest income (1,165,361) (147,809)
Foreign exchange loss 9,125,704 2,162,346
(Increase) in receivables (38,619) (4,222,115)
(Decrease) in payables (358,818) (2,489,632)
Net cash (used in) operating activities (686,189) (2,020,715)
30. Reconciliation of liabilities from financing activities
1 January 2025 Non-cash movements 31 December 2025
Group Cash flow
US$ US$ US$ US$
Loans (current) 6,890,400 - (6,840,400) -
6,890,400 - (6,840,400) -
Company
Loans (current) 6,890,400 - (6,840,400) -
6,890,400 - (6,840,400) -
The short term Drachs bridging loan was repaid by the transfer from Treasury
of 94,127,854 Ordinary Shares at a price of £0.06 per Ordinary Share.
31. Capital commitments
As at 31 December 2025 the Group had the below outstanding capital commitments
(2024: US$nil):
· Commitments in place for La India project capital expenditure
including new mining fleet equipment, civil and general infrastructure works,
electrical and general process plant items totalled US$66.4 million. These
commitments are all expected to be funded during FY2026.
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.
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 FY2025, the total fees paid by the Company to Hannam &
Partners were US$90,000 (2024: US$250,653).
Refer to note 24 for loans payable to related parties.
During the year, the Company received US$89.5 million in loan repayments from
FCF Minerals (2024: US$77.2 million); while a total of US$74.0 million was
advanced to the Condor group of companies. At the year end, the loans due to
the Company from its subsidiaries totalled US$82.1 million (2024: US$97.8
million).
At the year end, the Group owed US$70,850 (2024: US$70,850) to its associates
and the Group was owed US$2.72 million (2024: US$2.72 million) from its
associates. This amount owing has been fully written off.
33. Financial instruments
The Group's financial instruments comprise cash and cash equivalents,
borrowings, derivative gold price and currency contracts, and items such as
trade payables and trade receivables which arise directly from its operations.
The main purpose of these financial instruments is to provide finance for the
Group's operations.
The carrying values of financial assets at the year-end are as follows:
Trade and other receivables
Group Cash and cash equivalents
Total
US$ US$ US$
As at 31 December 2025 41,171,536 17,775,682 58,947,218
As at 31 December 2024 31,224,696 14,006,970 45,231,666
Company
As at 31 December 2025 20,824,729 6,177,233 27,001,962
As at 31 December 2024 27,281,596 111,206,628 138,488,224
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 2025 11,658,929 16,157,104 1,429,405 - 29,245,438
As at 31 December 2024 8,141,641 2,336,027 6,869,769 6,890,400 24,237,837
Company
As at 31 December 2025 341,868 14,794,029 1,429,405 - 16,565,302
As at 31 December 2024 1,202,458 403,675 519,589 6,890,400 9,016,122
Trade payables, accruals and other payables and loans are held at amortised
cost. Accruals and other payables excludes VAT and other government
taxes/payables.
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 FY2024 and FY2025 and surplus funds have been applied, in the
main, in FY2024 to reduce the Group's borrowings, and FY2025 to development of
the La India project.
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 2025
1 - 6 months 28,483,299 255,522 - 28,738,821
6 - 12 months - 923,187 - 923,187
1 - 2 years 15,084,486 250,696 - 15,335,182
2 - 5 years 70,850 - - 70,850
Total contractual cash flows 43,638,635 1,429,405 - 45,068,040
As at 31 December 2024
1 - 6 months 10,739,047 4,441,097 6,890,400 22,070,544
6 - 12 months - 2,428,672 - 2,428,672
1 - 2 years - - - -
2 - 5 years 70,850 - - 70,850
Total contractual cash flows 10,809,897 6,869,769 6,890,400 24,570,066
Company Trade and other payables Derivative liabilities Loans Total
US$ US$ US$ US$
As at 31 December 2025
1 - 6 months 1,189,486 255,522 - 1,445,008
6 - 12 months - 923,187 - 923,187
1 - 2 years 14,400,000 250,696 - 14,650,696
2 - 5 years 170,940 - - 170,940
Total contractual cash flows 15,760,426 1,429,405 - 17,189,831
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
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 2025 the gold price ranged from US$2,650 to US$5,270 per ounce,
and the Group received an average gold selling price of US$3,154 per ounce
(2024: US$2,312 per ounce).
Since 30 September 2025 the Company has had no financial instruments with
exposure to gold prices. Refer to note 21 for details of the Group's historic
financial instruments with exposure to gold prices.
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$20.8 million (2024: US$19.1
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.
For most of the year and at year-end the Group was debt free.
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, Nicaraguan
Cordoba 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 2025, the
Group converted US$77.0 million into Philippine Peso (2024: US$77.9 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$7.0 million higher or US$8.6 million lower (2024: US$7.1 million higher or
US$8.7 million lower).
As at 31 December 2025 the Group had Philippine Pesos denominated assets and
liabilities including cash of US$696,000 and current liabilities of
US$23,324,000 (2024: cash of US$296,000 and current liabilities of
US$15,154,000). The currency risk exposure from these assets and liabilities
is covered by the Philippine currency forward contracts in place as at 31
December 2025. There is no currency risk exposure to Nicaraguan Cordobas as
this currency is currently pegged to the USD.
Refer to note 21 for details of the Group's hedging instruments to protect
against currency risk.
Credit risk
Credit risk is the risk of financial loss to the Group or Company if the
counterparty to a financial instrument fails to meet its contractual
obligations. The Group and Company are exposed to credit risk attributable to
its cash balances; however, this risk is limited because the counterparties
are predominantly large international banks.
The Group is exposed to credit risk for trade receivables due from third
parties. This risk is limited because the counterparties to the gold sales are
internationally recognised substantial organisations. Further, the Group can
elect to receive significant payment for the gold upon the presentation of
transportation documents. Based on the above, the Group considers the expected
credit loss to be immaterial and no provision for expected credit loss has
been required (2024: US$nil).
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.
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.
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 2025
(2024: US$nil) other than:
· There is potentially up to a further US$14.4 million of deferred
consideration payable as part of the acquisition of Condor on the basis of
US$18 per ounce of additional contained gold JORC Mineral Resource discovered,
within 5 years from 23 April 2025, on the Condor tenement areas in excess of a
total 3.158 Moz of gold, subject to a cap of 800,000oz above 3.158 Moz. This
potential liability has been treated as a contingent liability as it is not
possible to predict with certainty the amount, if any, that will be payable,
given it is dependent upon future exploration drilling success on the Condor
tenements; and
· In June 2024, the Company entered into a Production Fee agreement
with Runruno Holdings Limited ("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).
The Company does not expect that any Production Fee payments will be made.
36. Post balance sheet events
Equity issues
Post year end 39,213,892 ordinary shares have been issued at an average issue
price of 3.44p following the exercise of options and warrants.
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 21.91% and Drachs owns
20.14% 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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