REG - Mineral & Financial - Audited Results for Year Ended 30 June 2024
19/11/2024 18:00
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RNS Number : 8585M Mineral & Financial Invest. Limited 19 November 2024
Mineral and Financial Investments Limited
Audited Full Year Financial Results and NAV for Period ended 30 June 2024
HIGHLIGHTS
· Fiscal Year-end Net Asset Value £11.45M (FYE: 30/6/24) up 21.5%,
from £9.42M (FYE: 30/6/23)
· Net Asset Value Per Share ("NAVPS") FD 29.1p, up 19.8%, from 24.3p
(FYE: 30/6/23)
· Net Asset Value has increased at Compound Annual Growth Rate of
27.8% since 30 June 2018
· Investment Portfolio now totals £11.6m, up 30.5%, Year/Year from
£8.9M (FY: 30/6/23)
· NAVPS growth has exceeded that of the FTSE 350 Mining index and of
the S&P GSCI since 2018
Camana Bay, Cayman Island - 19 November 2024 - Mineral & Financial
Investments (LSE-AIM: MAFL) ("M&F" or the "Company") is very pleased to
announce its audited Net Asset value and audited results on its activities
for the 12 months ended 30 June 2024.
CHAIRMAN'S COMMENTS
During the 12-month period ending 30 June 2024, your company generated Gross
Income of £2.567 million which translated into a Pre-Tax Profit of £2.053
million. Net Profit after tax for the full year was £2.005 million or 5.4p
per share basic, or 5.3p per share on a Fully Diluted ("FD") basis for the
period. At the year-end of 30 June 2024, our Net Asset Value (NAV) was
£11.445 million an increase of 21.5% from the 30 June 2023 NAV of £9.423
million. The NAV per share - fully diluted (NAVPS-FD) as of 30 June 2024 was
29.1p, up 19.9% from the 30 June 2023 NAVPS-FD of 24.3p. Since 30 June 2018,
our NAV has appreciated on average by 27.8% annually. We continue to be
effectively debt free, with working capital of £11.6 million.
Summary of Financial Performance (Fig. 1)
30 June 2018 30 June 2019 30 June 2020 30 June 2021 30 June 2022 30 June 2023 30 June 2024 '18- '24 CAGR (%)
Net Asset Value ('000) £2,623 £5,114 £5,474 £6,438 £7,454 £9,423 £11,445 27.8%
Fully diluted NAV p/s 7.5p 14.5p 15.5p 18.2p 20.0p 24.3p 29.1p 25.4%
After a series of challenging years for the metals and mining sector, we
believe 2024 to have been the turning point. No longer are US dollar
denominated commodities fighting the headwinds of a rising US dollar, as
measured by the DXY Index. The DXY Index, a trade weighted index of the US
dollar composed of USD vs. six foreign currencies, was up 2.9% during our
reported fiscal year, and has since given up that gain, declining by more than
3% since our year end. This nominally favours US denominated commodities. Cost
inflation coupled with rising interest rates; mediocre metal price performance
resulted in "peak apathy" for the sector by investment markets in 2023.
Under-capitalized junior exploration companies will take some time to
recapitalize themselves and, we believe, take some time to recover. However,
we are beginning to see the "green shoots" of a recovery for the sector, we
noted in last year's Annual Report to shareholders that we believed that some
encouraging signs were manifesting themselves. The FTSE 350 Mining Index was
up 2.1% Yr./Yr. for the period ending 30 June 2024 (Fig.4). The S&P /
Goldman Sachs Commodity Index (see Fig.4) was also up by 7% during our fiscal
period.
Regular readers of our Annual Report to shareholders will be aware that we
normally refer to the International Monetary Fund's ("IMF") bi-annual economic
forecasts as a yardstick for global economic performance. It is a consistent,
not necessarily more accurate, attempt to measure and estimate global economic
performance. We believe that the IMF's economic forecast provides a clear
picture of the best-informed consensus estimates there are for global economic
performance.
Using this forecast, the industry has experienced slowing World growth (Fig.
2) from a COVID stimulus recovery high of 6% in 2021 to an estimated 3.3% in
2024 and 3.2% in 2025. A level of stable global growth forecasted by the IMF
is a good foundation for the mining sector. In 2022 World Consumer Prices
(Fig. 4) peaked at an 8.7% increase and is currently expected to gradually
decline to 4.2% globally in 2025 - However, it should be noted that "Advanced
Economies" ("AE") have been more successful in reducing its inflationary
pressures than the "Emerging Markets and Developing Economies" ("EM&DE").
The IMF forecasts that consumer prices growth for the AE's in 2025 will be
down 72.6% to 2.0% from 2022 levels. The EM&DE are expected by the IMF to
have consumer price growth of 5.9% in 2025, a reduction of 39.8% form the post
COVID peak of 9.8%. We believe that this could impact their currency's values.
Offsetting their lingering inflation is that EM&DE are expected to
continue to grow steadily by 4.2% in each of 2024 and 2025, 133% fast than
"Advanced Economies".
IMF - WORLD ECONOMIC OUTLOOK 1
(Fig. 2)
October 2023 2018 2019 2020 2021 2022 2023 2024(e) 2025 (f)
World Output 3.6% 2.8% -3.1% 6.0% 3.5% 3.3% 3.3% 3.2%
World Output - Advanced Economies 2.3% 1.7% -4.5% 5.2% 2.6% 1.7% 1.8% 1.8%
Emerging Markets and Developing Economies 4.5% 3.7% -2.1% 6.6% 4.1% 4.4% 4.2% 4.2%
World Consumer Prices 3.6% 3.5% 3.2% 4.7% 8.7% 6.7% 5.8% 4.2%
Consumer Prices - Advanced Economies 2.0% 1.4% 0.7% 3.1% 7.3% 4.6% 2.6% 2.0%
Emerging Markets and Developing Economies 4.9% 5.1% 5.1% 5.9% 9.8% 8.3% 7.9% 5.9%
In 2024, after M&F's FYE, we finally saw the US Federal Reserve Board (the
"Fed") reduce the Fed Fund rate by 50 basis points on 18 September 2024. The
cut was later in the year than many had expected, and the size of this
singular rate cut to date in 2024 was at the high end of the 25bp to 50 bp
expectations. However, since this Fed cut was announced, 10 yr. US Treasury
yields are up 86bp (4.47% vs 3.61%) providing us with a sense that another
rate cut in 2024 is less likely. US Inflation in September, as measured by the
CPI was +2.4% (down from +2.5% in August 2024), continuing its slowing
decline. The September CPI increase was slightly higher than expectations.
Moreover, CPI remains above the Fed.'s target level of 2.0%. As 75% of the
September CPI rise was food and housing costs, there is still a risk of
secondary upwards pressure in wage demands to offset these cost rises.
Moreover, inflation has echoes, in as much as after a period of inflation
there are secondary and tertiary waves of inflation as there are efforts for
wages to catch-up to cost inflation. Our view, though not popular, is that
rates are unlikely to be returning to the historically low levels seen in the
past 5 years. We base our planning on rates remaining in this current range.
It is noteworthy to recall that since 1871 US long rates have averaged 4.49%.
Additionally, the US federal government's deficit as a percent of GDP is
expected to be 7.0% 2 in 2024. This deficit, and the Fed's slow unwinding of
the various stimulus initiatives since 2007, must be funded in the global bond
markets. Barring any unexpected social-military-economic events, the so-called
"black swan" events, we will adhere to the belief that a reversion to this
long-term average interest rate for US long rates is a prudent assumption. The
net result is that we believe that the US dollar is not likely to outperform
other currencies and be positive for commodity prices in 2024.
There has been diminished correlation in equity market performance during the
period. Chinese markets have declined reflecting the slower economic growth of
China during the past decade. However, since our 30 June 2024 year end the
Chinese government has initiated some economic stimulus policies that have
propelled the CSI 300 and the Hang Seng indices upwards. Underperforming Asian
equity markets have outperformed the other major indices we follow (Fig. 3)
after our year-end. Asian economic growth is necessary to aid metal prices out
of their doldrums. The US Equity market valuation, as measured by the S&P
500 P/E Index, had another strong year, rising 22.7% Yr./Yr. during our fiscal
period, despite US interest rates rising during the period by about 14.5%
(e.g. 10 yr. US Treasuries were yielding 4.4.% vs 3.84% one year prior).
Global Stock Index performance (Fig.3)
30/06/2024 30/06/2023 Yr/Yr % Ch.
Shanghai Shenzhen CSI 300 3462 3842 -9.9%
Standard & Poor 500 5460 4450 22.7%
Euro Stoxx 50 4892 4399 11.2%
Hang Seng 17719 18916 -6.3%
FTSE 100 8164 7532 7.9%
Nikkei 225 39583 33189 19.3%
Source: Bloomberg LLP
CHIEF EXECUTIVE'S OFFICER'S REPORT
Your company generated gross profit of £2.568 million during the year the
fiscal year ending 30 June 2024, a 7.3% improvement from the previous year's
gross profit of £2.394 million. The pre-tax profit for the full fiscal year,
was improved by 30.3% to £2.054 million versus last year's operating profit
of £1.576 million. Net Income after tax for the full year period ending 30
June 2024, was £2.005 million as compared to £1.550 million for the previous
fiscal year. The per share earnings for the full year were 5.4p (basic) or
5.3p (FD), from 2.6p (basic) and 2.4p (FD) for the 2023 fiscal year. The
overall cash and investment portfolios increased to £11.8 million or by 21.2%
on a year over year basis from £9.7 million.
Indexed Performance of M&F NAV and NAVPS
vs. Various Performance Yardsticks (Fig. 4)
During our fiscal year global commodity price performances (Fig. 5) were
broadly up. Precious metals were up with gold rising 21.1%, while silver was
up 27.8% and platinum was up 10.1%. Base metals were also generally up, the
notable exception being nickel, declining 13.7% during our fiscal year, ending
30 June 2024. Indonesia is now the world's largest producer of nickel,
producing 1.8Mt in 2023 from 345K in 2017 (+422%). The entirety of the world's
oversupply in 2023/24 is wholly accountable from the leap in Indonesian
production.
Price Performance of Various Commodities & Indices (Fig.5)
Commodity 2019 2020 2021 2022 2023 2024 % Ch. 2024 vs. 2023 CAGR
(30 June) (30 June) (30 June) (30 June) (30 June) (30 June) 2019 -2024
Gold (US$/oz) 1,389 1,784 1,784 1,809 1,920 2,325 21.1% 10.9%
Silver (US$/oz) 15.30 18.30 26.15 19.80 22.76 29.09 27.8% 13.7%
Platinum (US$/oz) 837 828 1083 881 903 994 10.1% 3.5%
Copper (US$/t) 5,969 6,120 9,279 7,901 8,257 9648 16.8% 10.1%
Nickel (US$/t) 12,670 13,240 18,172 23,229 19,869 17,154 (13.7%) 6.2%
Aluminium (US$/t) 1,779 1,598 2,514 2,659 2,104 2,524 20.0% 7.2%
Zinc (US$/t) 2,575 2,043 2,899 3,147 2,369 2,938 24.0% 2.7%
Lead (US$/t) 1,913 1,770 2,301 1,899 2,126 2,190 3.0% 2.7%
Uranium (US$/t) 54,454 71,871 70,768 108,027 124,561 187,968 50.9% 28.1%
WTI (US$/Bbl.) 60.06 40.39 75.25 107.86 70.64 81.54 15.4% 6.3%
Trade Weighted USD 96.56 96.68 92.66 105.09 102.91 105.87 2.9% 1.9%
FTSE 350 Mining Index 20,080 17,714 22,585 9,810 10,161 10,379 2.1% (12.4%)
In FY 2024 zinc reversed its FY 2023 price decline, by rising 24% in the
period. Zinc markets were impacted by supply chain issues. The International
Lead and Zinc Study Group (ILZSG) expects a 164,000-ton deficit in Zinc supply
in 2024. Aluminium was up 20% during our fiscal period due in large part to
curtailment of Russian supplies associated with export sanctions against
Russia. Although we suspect there is some Russian Aluminium making its way
through sanctions, nevertheless any lifting of sanctions would increase global
supplies. Uranium pricing benefited from the creation of several physical
U(3)O(8) investment funds, and ETF's as well as from increased energy
insecurity resulting from energy shortfalls caused by the Russian/Ukrainian
conflict. We admit to having missed the boom in the Lithium market and chose
not to chase the sector. Lithium prices have declined. We have purchased the
shares of a lithium explorer and post FYE 2024 we acquired shares in a lithium
producer. The share price of the latter has benefitted from Rio Tinto
announcing the US$6.7B acquisition of Arcadium Lithium.
We have been overweight in precious metals relative to overall industry
weightings. Since last year in our internal calculation of commodity
weightings we have chosen to split the Luca Mining, a polymetallic producer,
between precious metals and base metals, as it produces zinc, copper, lead,
silver and gold. Secondly, we also concluded that as so much damage has been
inflicted on the balance sheets of exploration companies, that they will lag
the sector. Thirdly we have concluded that the commodity prices will move
before the underlying producer will, therefore we have seized the opportunity
to invest in 660 oz gold bullion at US$1,750/oz of gold. Lastly, we are
actively attempting to increase our Copper weighting by adding producers to
our portfolio.
As can be seen in Fig. 7, our cash holdings would appear to be below our
desired range of 10% of NAV. However, if you include the deferred gold
delivery contracts to our £140K of actual cash, our "cash and bullion" would
be £1.354 Million (i.e. 3.5p per share). The spot gold price on 30 June
2024, was US$2,325/oz, today gold's spot price is 14% higher at US$2,650. This
would mean that our June 30 "cash and bullion" holding, if valued at today's
gold price, would be worth £1.523 Million (i.e. 4.1p per share). Our
over-weighting of precious metals, specifically bullion, significantly aided
our NAV performance. I expect that our cash holdings will return to a ratio
closer to our target range around 10% of NAV by this time next year and that
our gold bullion holdings will have been monetized.
If our expectations are correct and we are entering into a gentle, but long
term, corrective period for the US dollar and US markets. On this basis, we
believe this should see gold performing well from its current $2,650/oz spot
price, followed by the large gold producers, thereafter by the smaller
producers, and lastly by the exploration companies. When a sector has been out
of favour, but its fundamentals are improving - the larger cap companies will
receive the first wave of investments attention, followed by mid-caps and the
small caps are last to benefit from the markets' attention. We are
increasingly confident that copper firstly, and base metals secondarily will
provide metal price performance in 2025. However, the share performance of the
underlying mining companies has been very volatile, but on an upward trend.
Commodity Class Investment Allocation as at FYE 2024 vs. 2023
(Fig. 6)
INVESTMENT COMMODITY CLASSES Q4-2024 Q4-2023 (%) Q4-2023 (£,000) Q4-2023 (%) FYE 2023/
(£,000) 2022 % Ch
Cash £139.8 1.2% £795.6 8.2% -82.4%
Precious Metal & Minerals £6,321.2 53.7% £3,868.7 39.8% 63.4%
Base Metals £4,240.7 36.0% £3,943.7 39.5% 10.3%
Food, Energy, Services & Tech £1,080.6 9.2% £1,212.4 12.5% -10.9%
Total investments £11,782.3 100.0% £9,720.4 100.0% 21.2%
Precious metals represent 53.7% of our asset allocation as of 30 June 2024, up
significantly from 48.2% of our NAV in 2023. However, if our deferred gold
bullion investment is excluded from the Precious Metals and considered to be
part of our cash and near cash - The Precious Metal commodity class would be
44.1%, a slight decline from last year's 48.2% of total investments.
Additionally, if our Cash category included the deferred gold bullion
contracts, then our "cash" holding would be 11.2% of total investments. Base
metals now represent 36.0% versus 31.6% of our investable assets. Food Energy
and Technology declined as a percentage of our total investable assets to
9.2%, but also on an absolute dollar amount, due to selling some energy
investments. This year we saw a reversal of the underperformance of mining
share indices relative to the underlying commodity prices. Between 30 June
2024, and 30 September 2024, the FTSE 350 Mining Index rose 9.97%, while the
S&P Goldman Sachs Commodity Index was up 2.98%.
INVESTMENT PORTFOLIOS
We always have high expectations, and we have yet to exceed these
expectations. Nevertheless, FYE 2024 has been a year of improving performance
for many mining investment funds, including our own. Our performance in 2024
was both absolutely and relatively good. Our NAV rose 21.5% year over year,
while NAVPS rose by 19.9% Yr./Yr. These results exceed the performance
yardsticks by which we measure our performance as can be seen in Fig. 10.
The broader equity markets rose during our fiscal year: The Euro Stoxx 50 was
up a second year in a row, rising by 11.2%; The S&P 500, also rising a
second year in a row, being up 22.7% yr./yr. as of 30 June 2024, the CSI 300
(Shanghai) was down 9.9%, while the FTSE 100 did earn a gain of 7.9%. The more
specific comparable measures, such as - the S&P/TSX Global Mining Index
was up 11.0% during our fiscal period, while FTSE 350 Mining Index, comprised
of smaller market mining companies, was up 2.2%.
M&F Investable Capital 2024-2023
(Fig.7)
(£,000) 2024 2023 2024 As % of Inv. Capital % Ch. 2024 vs. 2023
Strategic £7,524.2 £6,721.3 63.9% 11.9%
Tactical £4,118.3 £2,203.5 34.9% 86.9
Cash £139.8 £795.6 1.2% -82.4%
Total £11,782.3 £9.720.4 100.0% 21.2%
CASH
As a percentage of Total Investments: 1.2%
Our liquidity as of 30 June 2024, was £140,000, a decline of 82.4% from the
£796,000 as at the end of fiscal 2023. During the period we provided finance
for an investee company (Golden Sun Resources) that had nearly completed its
mill (now completed and in production) but was capital constrained and
required some additional capital to complete and commission the mill.
Additionally, we were bullish on the gold bullion. As a solution, we agreed to
acquire gold bullion, to be delivered 6 months later either the physical gold
bullion or the financial equivalent, once the mill was in production. As
security for these deferred Gold Delivery Contracts, we were provided the
pledge of 143 hectares (i.e. 359 acres) of land overlooking the Pacific Ocean
as security if GSR defaults on the obligation. Our normal objective is to keep
the cash somewhere between 5% and 20% of our "Investable Capital" so that we
may take advantage of investment opportunities quickly when they present
themselves. Since 2017 our cash holding has averaged around 10%. Moreover, as
a rule of thumb we like to have a combined value of our Cash and the Tactical
portfolio to range between 25% and 60% depending on our level of market
conviction. For the past 3 years that Tactical Portfolio and cash have been
at 38.4% as of the end of 2021, we ended 2022 at 35.5% of Investable Capital
and as at FYE 2023 we were at 33%. On 30 June 2024 our cash and Tactical
Portfolio totalled 35.7% of Investable Capital. On 30 June 2024 our Tactical
and Cash holdings were 35.7% of Investable Capital. Our current stance is that
the greatest performance risk is underexposure to the mining sector. As the
mining cycle evolves, our objective will be to gradually advance to a higher
cash & tactical holding as we monetize our strategic investments and
marshal our cash holdings to protect our overall performance record.
TACTICAL
PORTFOLIO
As a percentage of Total Investments: 34.9%
The Tactical portfolios increased by 13.4% to end the year at £4,118.3M.
Tactical Investments increased in part because of performance and the
deployment of cash into deferred gold delivery agreements. We are finally
experiencing an abatement of the market's bearish sentiment towards mining
companies, and selectively there have been some rises in valuations. Our
early commitment to gold bullion has been timely. Elsewhere mining stocks have
performed better than in the past several years, but that is not a very high
bar. Inflation, and more specifically mining cost inflation has pushed metal
prices upwards as the industry's breakeven levels have increased. The
immediate impact has been on commodity prices. Latterly, as companies
attempted to manage cost inflation we have begun to see some positive share
price movement. With regards to gold, several factors are aiding its
performance: 1. A weaker US dollar. 2. Increased global socio-political risk
in the Middle east, and the nearly three-year-old Ukrainian-Russia conflict
persisting long beyond the initially expected resolution. 3. Continued
economic anxiety. The tactical portfolio now comprises 17 distinct investments
of our total portfolio.
STRATEGIC PORTFOLIO
As a percentage of Total Investments: 63.9%
Our Strategic Portfolio are longer term holdings, that we strongly believe
will outperform given sufficient time and capital. We believe we made these
"Strategic" investments at the bottom of the cycle. These investments were in
out-of-favour assets that we considered to have high return potential but
were, we acknowledge, higher risk and less liquid. We believe our competitive
advantage was that we were capable and willing to invest where and when others
would, or could, not invest in what we believe are good geologic assets. We
believe that the best return to risk ratio is to invest in good assets when
these are out of favour. Our Strategic Portfolio now totals £7,777.1M and
represents 64.4% of our Net Investable funds. The Strategic Portfolio was up
52.8% yr/yr in FY 2024. The next phase of our strategy is to gradually
monetize these investments when and where it makes sense and redeploy these
funds into more liquid investments that are out of favour but have strong long
term investment merits.
A more detailed description of the investment holdings and their performance
is available in the annual report, which will be available on the M&F
Internet site within a day of this Press release
Posting of Annual Report and Notice of AGM
The Company will be posting the Annual Report and Accounts, including the
Notice of Annual General Meeting ("AGM") on or around 22 November 2024 and
will be made available on the Company's website: www.mineralandfinancial.com
(http://www.mineralandfinancial.com) .
The AGM will be held at 11:00 a.m. on 18 December 2024 at Stockley Park, The
Square, 6-9 The Square, Stockley Park, Heathrow, Uxbridge London, UB11 1FW,
UK
FINANCIAL STATEMENTS
Consolidated Income Statement
Year ended Year ended
30 June 2024 30 June 2023
Notes £'000 £'000
Investment income 20 119
Fee revenue - -
Net (losses)/gains on disposal of investments (239) 2,108
Net change in fair value of investments 2,786 167
2,567 2,394
Operating expenses 3 (444) (452)
Share based payment expense (17) (136)
Other gains and losses 5 (53) (230)
Profit before taxation 2,053 1,576
Taxation expense 6 (48) (26)
Profit for the year from continuing operations and total comprehensive income, 2,005 1,550
attributable to owners of the Company
Profit per share attributable to owners of the Company during the year from
continuing and total operations:
7 Pence Pence
Basic (pence per share) 5.4 4.4
Fully diluted (pence per share) 5.3 4.0
Consolidated Statement of Financial Position
2024 2023
Notes £'000 £'000
CURRENT ASSETS
Financial assets held at fair value through profit or loss 8 11,643 8,925
Trade and other receivables 10 19 25
Cash and cash equivalents 141 796
11,803 9,746
CURRENT LIABILITIES
Trade and other payables 11 195 194
Convertible unsecured loan notes 12 10 10
205 204
NET CURRENT ASSETS 11,598 9,542
NON-CURRENT LIABILITIES
Deferred tax provision 13 (153) (119)
NET ASSETS 11,445 9,423
EQUITY
Share capital 15 3,116 3,114
Share premium 15 6,203 6,182
Loan note equity reserve 16 6 6
Reserve for employee share schemes 17 222 228
Capital reserve 15,736 15,736
Retained earnings (13,838) (15,843)
Equity attributable to owners of the Company and total equity 11,445 9,423
The financial statements were approved by the Board and authorised for issue
on 19 November 2024
Mark T. Brown
Chairman
Consolidated Statement of Changes in Equity
Share Share Reserve for employee Loan note Capital Accumulated Total
capital premium share schemes reserve reserve losses equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000
At 30 June 2022 3,099 5,914 92 6 15,736 (17, 393) 7,454
Total comprehensive income for the year - - - - - 1,550 1,550
Share based payment expense - - 136 - - - 136
Issues of equity 15 268 - - - - 283
At 30 June 2023 3,114 6,182 228 6 15,736 (15,843) 9,423
Total comprehensive income for the year - - - - - 2,005 2,005
Share based payment expense - - 17 - - - 17
Issue of equity on exercise of Restricted Stock Units 2 21 (23) - - - -
At 30 June 2024 3,116 6,203 222 6 15,736 (13,838) 11,445
Consolidated Statement of Cash Flows
Year ended Year ended
30 June 2024 30 June 2023
Notes £'000 £'000
OPERATING ACTIVITIES
Profit before taxation 2,053 1,576
Adjustments for:
Loss/(profit) on disposal of trading investments 239 (2,108)
Fair value gain on trading investments (2,786) (167)
Investment income (20) (119)
Share based payment expense 17 136
Tax paid (14) -
Operating cash flow before working capital changes (511) (682)
(Increase)/decrease in trade and other receivables 6 (7)
Increase/(decrease) in trade and other payables 1 69
Net cash outflow from operating activities (504) (620)
INVESTING ACTIVITIES
Purchase of financial assets (1,563) (3,783)
Disposal of financial assets 1,392 4,396
Investment income 20 39
Net cash (outflow)/inflow from investing activities (151) 652
FINANCING ACTIVITIES
Proceeds of share issues - 282
Net cash inflow from financing activities - 282
Net (decrease)/increase in cash and cash equivalents (655) 315
Cash and cash equivalents as at 1 July 796 481
Cash and cash equivalents as at 30 June 141 796
Notes to the Financial Statements
1 1. general information
The Company was incorporated as a Corporation in the Cayman Islands which does
not prescribe the adoption of any particular accounting framework. The Board
has therefore adopted International Financial Reporting Standards as adopted
by the United Kingdom. The Company's shares are listed on the AIM market of
the London Stock Exchange. The Company is exempt from the requirement to
prepare, and file audited financial statements under Cayman Islands law, so
the Group consolidated financial statements have been prepared without the
inclusion of parent company information.
The Company is an investment company, mainly investing in natural resources,
minerals, metals, and oil and gas projects. The registered office of the
Company is as detailed in the Company Information on page 2.
These financial statements are prepared in pounds sterling which is the
Company's functional and presentational currency and rounded to the nearest
£'000.
2 2. PRINCIPAL ACCOUNTING POLICIES
BASIS OF PREPARATION
The financial statements have been prepared under the historical cost
convention, and in accordance with International Financial Reporting Standards
("IFRS"), as adopted by the United Kingdom, and International Financial
Reporting Interpretations Committee ("IFRIC") interpretations. All
accounting standards and interpretations issued by the International
Accounting Standards Board and IFRIC effective for the periods covered by
these financial statements have been applied.
The principal accounting policies of the Company are set out below and have
been consistently applied to all periods.
BASIS OF CONSOLIDATION
The Group financial statements incorporate the financial statements of the
Company and entities controlled by the Company (its subsidiaries). Control is
achieved where the Company has the power to govern the financial and operating
policies of an entity so as to obtain benefits from its activities. The
subsidiaries have a reporting date of 30 June.
The results of subsidiaries acquired or disposed of during the year are
included in the consolidated statement of comprehensive income from the
effective date of acquisition or up to the effective date of disposal, as
appropriate.
Where necessary, adjustments are made to the financial statements of
subsidiaries to bring their accounting policies in line with those used by
other members of the Group. All intra-group transactions, balances, income and
expenses are eliminated in full on consolidation.
Non-controlling interests in the net assets of consolidated subsidiaries are
identified separately from the Group's equity therein. Non-controlling
interests consist of the amount of those interests at the date of the original
business combination and the minority's share of changes in equity since the
date of the combination. Losses applicable to the non-controlling interests in
excess of the minority's interest in the subsidiary's equity are recorded as a
debit to non-controlling interest regardless of whether there is an obligation
in the part of the holders of non-controlling interests for losses.
GOING CONCERN
The Directors have prepared cash flow forecasts through to 31 December 2025
which assume no significant investment activity is undertaken unless
sufficient funding is in place to undertake the investment activity. The
expenses of the Group's continuing operations are minimal, and the cash flow
forecasts demonstrate that the Group is able to meet its obligations as they
fall due. The directors have also considered the impact of Covid-19 and have
concluded that there are no material factors which are likely to affect the
ability of the Group to continue as a going concern, as a result of the cash
reserves in place and given the Group's ongoing costs. On this basis, the
Directors have a reasonable expectation that the Group has adequate resources
to continue operating for the foreseeable future. For this reason they
continue to adopt the going concern basis in preparing the Group's financial
statements.
KEY ESTIMATES AND ASSUMPTIONS
Estimates and assumptions used in preparing the financial statements are
reviewed on an on-going basis and are based on historical experience and
various other factors that are believed to be reasonable under the
circumstances. The results of these estimates and assumptions form the basis
of making judgments about carrying values of assets and liabilities that are
not readily apparent from other sources:
SHARE BASED PAYMENTS
The calculation of the fair value of equity-settled share-based awards and the
resulting charge to the statement of comprehensive income requires assumptions
to be made regarding future events and market conditions. These assumptions
include the future volatility of the Company's share price. These assumptions
are then applied to a recognised valuation model in order to calculate the
fair value of the awards.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Group holds investments that have been designated as held at fair value
through profit or loss on initial recognition. The company determines the fair
value of quoted financial instruments using quoted prices in active markets
for identical assets or liabilities (level 1). Where practicable the Company
determines the fair value of the financial instruments that are not quoted
(Level 3) using the most recent bid price at which a transaction has been
carried out. These techniques are significantly affected by certain key
assumptions, such as market liquidity. Other valuation methodologies such as
discounted cash flow analysis assess estimates of future cash flows and it is
important to recognise that in that regard, the derived fair value estimates
cannot always be substantiated by comparison with independent markets and, in
many cases, may not be capable of being realised immediately.
CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES
The Company and its subsidiaries ("the Group") has adopted all new and amended
accounting standards and interpretations as adopted by the United Kingdom
(IFRSs) for the reporting periods beginning on or after 1 July 2023.
The Directors have reviewed all new Standards and Interpretations that have
been issued but are not yet effective for the year ended 30 June 2024. As a
result of this review, the Directors have determined that there is no material
impact of the new and revised Standards and Interpretations on the Group and,
therefore, no change is necessary to Group accounting policies.
INVESTMENT INCOME
Dividend income from financial assets at fair value through profit or loss is
recognised in the statement of comprehensive income on an ex-dividend basis.
Interest on fixed interest debt securities, designated at fair value through
profit or loss, is recognised using the effective interest rate method.
2 2. PRINCIPAL ACCOUNTING POLICIES (continued)
TAXATION
Current income tax assets and/or liabilities comprise those obligations to, or
claims from, fiscal authorities relating to the current or prior reporting
period, that are unpaid at the balance sheet date. They are calculated
according to the tax rates and tax laws applicable to the fiscal periods to
which they relate, based on the taxable result for the year. All changes to
current tax assets or liabilities are recognised as a component of tax expense
in the income statement.
Deferred income taxes are calculated using the liability method on temporary
differences. This involves the comparison of the carrying amounts of assets
and liabilities in the consolidated financial statements with their respective
tax bases. However, deferred tax is not provided on the initial recognition
of goodwill, nor on the initial recognition of an asset or liability, unless
the related transaction is a business combination or affects tax or accounting
profit. In addition, tax losses available to be carried forward as well as
other income tax credits to the Group are assessed for recognition as deferred
tax assets.
Deferred tax liabilities are always provided for in full. Deferred tax assets
are recognised to the extent that it is probable that they will be able to be
offset against future taxable income. Deferred tax assets and liabilities are
calculated, without discounting, at tax rates that are expected to apply to
their respective period of realisation, provided they are enacted or
substantively enacted at the balance sheet date.
Most changes in deferred tax assets or liabilities are recognised as a
component of tax expense in the income statement. Only changes in deferred tax
assets or liabilities that relate to a change in value of assets or
liabilities that is charged directly to equity are charged or credited
directly to equity.
FINANCIAL ASSETS
The Group's financial assets comprise investments held for trading, cash and
cash equivalents and loans and receivables, and are recognised in the Group's
statement of financial position when the Group becomes a party to the
contractual provisions of the instrument.
FINANCIAL ASSET INVESTMENTS
CLASSIFICATION OF FINANCIAL ASSETS
The Group holds financial assets including equities and debt securities.
On the initial recognition, the Group classifies financial assets as measured
at amortised cost or fair value through profit or loss("FVTPL"). A financial
asset is measured at amortised cost if it meets both of the following
conditions and is not designated as at FVTPL:
· It is held within a business model whose objective is to hold
assets to collect contractual cash flows; and
· its contractual terms give rise on specific dates to cash flows
that are Solely Payments of Principal and Interest (SPPI).
All other financial assets of the Group are measured at FVTPL.
2 2. PRINCIPAL ACCOUNTING POLICIES (continued)
BUSINESS MODEL ASSESSMENT
In making an assessment of the objective of the business model in which a
financial asset is held, the Company considers all of the relevant information
on how the business is managed, including:
· the documented investment strategy and the execution of this
strategy in practice. This includes whether the investment strategy focuses on
earning contractual interest income, maintaining a particular interest rate
profile, matching the duration of the financial assets to the duration of any
related liabilities or expected cash outflows or realised cash flows through
the sale of the assets;
· how the performance of the portfolio is evaluated and reported to
the Company's management;
· the risks that affect the performance of the business model (and
the financial assets held within that business model) and how those risks are
managed;
· how the investment advisor is compensated e.g. whether
compensation is based on the fair value of the assets managed or the
contractual cashflows collected
IFRS 9 subsection B4.1.1-B4.1.2 stipulates that the objective of the entity's
business model is not based on management's intentions with respect to an
individual instrument, but rather determined at a higher level of aggregation.
The assessment needs to reflect the way that an entity manages its business.
The company has determined that it has two business models.
· Held-to-collect business model: this includes cash and cash
equivalents, balances due from brokers and other receivables. These financial
assets are held to collect contractual cash flows.
· Other Business model: this includes structured finance products,
equity investments, investments in unlisted private equities and derivatives.
These financial assets are managed and their performance is evaluated, on a
fair value basis with frequent sales taking place in respect to equity
holdings.
If the credit risk on a financial instrument has increased significantly since initial recognition, the loss allowance is equal to the lifetime expected credit losses. If the credit risk has not increased significantly, the loss allowance is equal to twelve month expected credit losses.
VALUATION OF FINANCIAL ASSET INVESTMENTS
Investment transactions are accounted for on a trade date basis. Assets are
de-recognised at the trade date of the disposal. Assets are sold at their fair
value, which comprises the proceeds of sale less any transaction cost. The
valuations in respect of unquoted investments (Level 3 financial assets) are
explained in note 8. Changes in the fair value of investments held at fair
value through profit or loss and gains and losses on disposal are recognised
in the consolidated statement of comprehensive income as "Net gains/(losses)
on investments". Investments are initially measured at fair value plus
incidental acquisition costs. Subsequently, they are measured at fair value.
This is either the bid price or the last traded price, depending on the
convention of the exchange on which the investment is quoted.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash on hand and demand deposits, together
with other short-term, highly liquid investments that are readily convertible
into known amounts of cash and which are subject to an insignificant risk of
changes in value.
TRADE AND OTHER RECEIVABLES
Trade receivables are initially recognised at fair value and subsequently
measured at amortised cost using the effective interest method, less any
allowance for expected credit losses. Trade receivables are generally due for
settlement within 30 days.
The consolidated entity has applied the simplified approach to measuring
expected credit losses, which uses a lifetime expected loss allowance. To
measure the expected credit losses, trade and other receivables have been
grouped based on days overdue.
Generally there are no trade receivables.
Other receivables are recognised at amortised cost, less any allowance for
expected credit losses.
2 2. PRINCIPAL ACCOUNTING POLICIES (continued)
EQUITY
An equity instrument is any contract that evidences a residual interest in the
assets of the company after deducting all of its liabilities. Equity
instruments issued by the Company are recorded at the proceeds received net of
direct issue costs.
The share premium account represents premiums received on the initial issuing
of the share capital. Any transaction costs associated with the issuing of
shares are deducted from share premium.
The share option reserve represents the cumulative cost of share-based
payments.
The loan note reserve represents the value of the equity component of the
nominal value of the loan notes issued.
The capital reserve represents amounts arising in connection with reverse
acquisitions.
Retained earnings include all current and prior period results as disclosed in
the statement of comprehensive income.
FINANCIAL LIABILITIES
Financial liabilities are recognised in the Group's balance sheet when the
Group becomes a party to the contractual provisions of the instrument. All
interest related charges are recognised as an expense in finance cost in the
income statement using the effective interest rate method.
The Group's financial liabilities comprise convertible loan notes, and trade
and other payables.
The fair value of the liability portion of the convertible loan notes is
determined using a market interest rate for an equivalent non-convertible loan
note. This amount is recorded as a liability on an amortised cost basis
until extinguished on conversion or maturity of the loan notes. The
remainder of the proceeds is allocated to the conversion option, which is
recognised and included in shareholders' equity, net of tax effects.
Trade payables are recognised initially at their fair value and subsequently
measured at amortised cost less settlement payments.
SHARE BASED PAYMENTS
The Group operates equity settled share-based remuneration plans for the
remuneration of its employees.
All services received in exchange for the grant of any share-based
remuneration are measured at their fair values. These are indirectly
determined by reference to the fair value of the share options awarded. Their
value is appraised at the grant date and excludes the impact of any non-market
vesting conditions (for example, profitability and sales growth targets).
Share based payments are ultimately recognised as an expense in the income
statement with a corresponding credit to retained earnings in equity, net of
deferred tax where applicable. If vesting periods or other vesting conditions
apply, the expense is allocated over the vesting period, based on the best
available estimate of the number of share options expected to vest. Non-market
vesting conditions are included in assumptions about the number of options
that are expected to become exercisable. Estimates are subsequently revised,
if there is any indication that the number of share options expected to vest
differs from previous estimates. No adjustment is made to the expense or share
issue cost recognized in prior periods if fewer share options ultimately are
exercised than originally estimated.
Upon exercise of share options, the proceeds received net of any directly
attributable transaction costs up to the nominal value of the shares issued
are allocated to share capital with any excess being recorded as share
premium.
Where share options are cancelled, this is treated as an acceleration of the
vesting period of the options. The amount that otherwise would have been
recognised for services received over the remainder of the vesting period is
recognised immediately within profit or loss.
2 2. PRINCIPAL ACCOUNTING POLICIES (continued)
FOREIGN CURRENCIES
The Directors consider Sterling to be the currency that most faithfully
represents the economic effects of the underlying transactions, events and
conditions. The financial statements are presented in Sterling, which is the
Company's functional and presentation currency.
Foreign currency transactions are translated into Sterling using the exchange
rates prevailing at the date of the transactions. Foreign currency exchange
gains and losses resulting from the settlement of such transactions and from
the translation of monetary assets and liabilities denominated in foreign
currencies at year end exchange rates are recognised in the income
statement. Non-monetary items that are measured at historical costs in a
foreign currency are translated at the exchange rate at the date of the
transaction. Non-monetary items that are measured at fair value in a foreign
currency are translated into the functional currency using the exchange rates
at the date when the fair value was determined.
SEGMENTAL REPORTING
A segment is a distinguishable component of the Group's activities from which
it may earn revenues and incur expenses, whose operating results are regularly
reviewed by the Group's chief operating decision maker to make decisions about
the allocation of resources and assessment of performance and about which
discrete financial information is available.
As the chief operating decision maker reviews financial information for and
makes decisions about the Group's investment activities as a whole, the
directors have identified a single operating segment, that of holding and
trading in investments in natural resources, minerals, metals, and oil and gas
projects. The directors consider that it would not be appropriate to
disclose any geographical analysis of the Group's investments.
3 OPERATING PROFIT
2024 2023
£'000 £'000
Profit from operations is arrived at after charging:
Directors' fees 105 105
Other salary costs - 23
Share based payment expense 17 136
Registrar's fees 34 36
Corporate adviser and broking fees 26 37
Other professional fees 167 197
Foreign exchange differences 53 230
Other administrative expenses 90 34
Fees payable to the Group's auditor:
For the audit of the Group's consolidated financial statements 22 20
514 818
4 EMPLOYEE REMUNERATION
The expense recognised for employee benefits is analysed below; the Group has
no employees other than the directors of the parent company and its
subsidiary; average number of employees, including executive directors, 2
(2023, 2):
2024 2023
£'000 £'000
Wages and salaries 105 127
Share based payment expense 17 136
122 263
Details of Directors' employee benefits expense are included in the Report on
Remuneration.
Remuneration for key management of the Company, including amounts paid to
Directors of the Company, is as follows:
2024 2023
£'000 £'000
Short-term employee benefits 105 105
Share based payment expense 11 118
116 223
5 OTHER GAINS AND LOSSES
2024 2023
£'000 £'000
Foreign currency exchange differences (53) (230)
(53) (230)
6 INCOME TAX EXPENSE
2024 2023
£'000 £'000
Deferred tax charge relating to unrealised gains on investments 34 26
Other tax payable 14 -
48 26
The tax on the Group's profit before tax differs from the theoretical amount
that would arise using the weighted average rate applicable to the results of
the Consolidated entities as follows:
2024 2023
£'000 £'000
Profit before tax from continuing operations 2,053 1,576
Profit before tax multiplied by rate of federal and cantonal tax in 300 230
Switzerland of 14.6% (2023: 14.6%)
Less abatement in respect of long-term investment holdings (252) (207)
Unrelieved tax losses - -
Under/(overprovided) in previous period - 3
Total tax 48 26
7 EARNINGS PER SHARE
The basic and diluted earnings per share are calculated by dividing the profit
attributable to owners of the Company by the weighted average number of
ordinary shares in issue during the year.
2024 2023
£'000 £'000
Profit attributable to owners of the Company
- Continuing and total operations 2,005 1,550
2024 2023
Weighted average number of shares for calculating basic earnings per share 37,091,117 35,611,416
Weighted average number of shares for calculating fully diluted earnings per 38,188,380 38,511,416
share
Earnings per share from continuing and total operations
- Basic (pence per share) 5.4 4.4
- Fully diluted (pence per share) 5.3 4.0
8 INVESTMENTS HELD AT FAIR VALUE THROUGH PROFIT OR LOSS
2024 2023
£'000 £'000
1 July - Investments at fair value 8,925 7,183
Cost of investment purchases 1,563 3,783
Proceeds of investment disposals (1,392) (4,396)
Profit on disposal of investments (239) 2,108
Fair value adjustment 2,786 167
Accrued interest on loan notes - 80
30 June - Investments at fair value 11,643 8,925
Categorised as:
Level 1 - Quoted investments 2,951 3,835
Level 3 - Unquoted investments 8,692 5,090
11,643 8,925
The Group has adopted fair value measurements using the IFRS 13 fair value
hierarchy.
Categorisation within the hierarchy has been determined on the basis of the
lowest level of input that is significant to the fair value measurement of the
relevant asset as follows:
Level 1 - valued using quoted prices in active markets for identical assets.
Level 2 - valued by reference to valuation techniques using observable inputs
other than quoted prices included in Level 1.
Level 3 - valued by reference to valuation techniques using inputs that are
not based on observable market criteria.
LEVEL 3 investments
Reconciliation of Level 3 fair value measurement of investments
2024 2023
£'000 £'000
Brought forward 5,090 4,946
Purchases 1,022 307
Proceeds of investment disposals - (238)
Profit on disposal of investments - 90
Fair value adjustment 2,580 (15)
Carried forward 8,692 5,090
Level 3, unquoted investments are valued on the basis of the last fund raise,
except for Redcorp where the value has been based on the net present value of
the cash flows from the project. Valuation techniques used by the Group are
explained on page 32 (Fair value of financial instruments)
The Group's largest Level 3 investment is Redcorp Empreendimentos Mineiros LDA
("Redcorp").
REDCORP EMPREENDIMENTOS MINEIROS LDA
Redcorp is a Portuguese exploration development and mining company whose main
asset is the Polymetallic) Lagoa Salgada Volcanogenic Massive Sulphide (VMS)
Project, which has resources of zinc, lead, copper, gold, silver, tin, and
indium.
8 INVESTMENTS HELD AT FAIR VALUE THROUGH PROFIT OR LOSS (Continued)
In June 2018, TH Crestgate entered into an agreement with Ascendant Resources
Inc ("Ascendant") under which Ascendant initially acquired 25% of the equity
in Redcorp for a consideration of US$2.45 million, composed of US$1.65 million
in Ascendant shares and US$800,000 in cash.
The second part of the Agreement was an Earn-in Option under which Ascendant
had the right to earn a further effective 25% interest via staged payments
amounting to US$3.5 million. In addition, Ascendant was required to spend a
minimum of US$9.0 million directly on the Lagoa Salgada Project within 48
months of the closing date, to fund exploration drilling, metallurgical test
work, economic studies and other customary activities for exploration and
development.
Under the last part of the agreement Ascendant was able to acquire an
additional 30% taking its total interest to 80% by the payment of US$2,500,000
on or before 22 Dec 2022 This date was amended so that the cash payment had to
be received on/or before 22 June 2023. In addition, a feasibility study was to
be delivered by 22 August 2023.
Redcorp currently owns 100% of the Lagoa Salgada project. M&F agreed in
June 2017 with Empresa Desenvolvimento Mineiro SA (EDM), a Portuguese
State-owned company, to re-acquire EDM's 15% rights on the project resulting
in Redcorp holding a 100% ownership of the project. The 2017 agreement was
subject to the Portuguese Secretary of State's approval which was not
received. Redcorp and M&F continue to explore ways and means to complete
the purchase. EDM's right is an option, if exercised, to receive a 15% working
interest ("WI") in the Lagoa Salgada Project. This 15% WI is subject to a
Right of First Refusal ("ROFR") if EDM exercises the Option and choses to sell
its interest. The WI is subject to standard dilution features if financial
obligations are unsatisfied. This option has been extended due to
administrative issues relating to a change of government in Portugal (RNS
September 2024). The extension has been granted by the Company's 80% owned
subsidiary, Redcorp, and extends the deadline for exercise from September 30,
2024 to 120 days from the date on which the following conditions are
satisfied: (i) issuance of the Environmental Impact Statement on theProject,
and (ii) completion of the optimization study of the Project's feasibility
study clarifying technical and metallurgical matters (the "EDM Option").
M&F has granted Ascendant conditional options that would, if exercised,
result in Ascendant owning (net) 80% interest in the Project if M&F is
unsuccessful in re-acquiring EDM's rights/interest. Within 6 months & 10
days after the delivery of the Feasibility Study. If EDM opt to not exercise
its Option, M&F would retain its 20% Carried Interest and the adjusting
call options held by Ascendant would be nullified. If EDM exercises its option
to the 15% CI, then M&F would retain a (net) 5% CI. M&F has the right
to sell its (net) 5% CI to Ascendant at a price representing M&F's 5%
share of the NPV of the PLS Project as estimated in the Feasibility Study
(using a 10.5% Discount Rate). Ascendant Resources Inc. currently recognizes
the obligation value of this put on its balance sheet as US$6.158 million in
its most recent publicly filed financial statements
9 SUBSIDIARY COMPANIES
The Group's subsidiary companies are as follows:
Name Principal activity Country of incorporation Proportion of ownership
and principal interest and voting rights
place of business held by the Group
Mineral & Financial Investments AG Investment Steinengraben 18 100%
company 4051 Basel, Switzerland
M&FI Services Ltd Service company 5 Bath Road, London, 100%
United Kingdom, W4 1LL
All intergroup transactions and balances are eliminated on consolidation.
10 TRADE AND OTHER RECEIVABLES
2024 2023
£'000 £'000
Other receivables 3 10
Prepayments 16 15
Total 19 25
The fair value of trade and other receivables is considered by the Directors
not to be materially different to the carrying amounts.
At the balance sheet date in 2024 and 2023 there were no trade and other
receivables past due.
11 TRADE AND OTHER PAYABLES
2024 2023
£'000 £'000
Trade payables 10 12
Other payables 120 114
Accrued charges 65 68
Total 195 194
The fair value of trade and other payables is considered by the Directors not
to be materially different to carrying amounts.
12 CONVERTIBLE UNSECURED LOAN NOTES
The outstanding convertible loan notes are zero coupon, unsecured and unless
previously purchased or converted they are redeemable at their principal
amount at any time on or after 31 December 2014.
The net proceeds from the issue of the loan notes have been split between the
liability element and an equity component, representing the fair value of the
embedded option to convert the liability into equity of the Company as
follows:
2024 2023
£'000 £'000
Liability component at beginning and end of period 10 10
The Directors estimate the fair value of the liability component of the loan
notes at 30 June 2024 to be approximately £10,000 (2023: £10,000)
13 DEFERRED TAX PROVISION
2024 2023
£'000 £'000
As at 1 July 119 93
Provision relating to unrealised gains on investments 34 26
As at 30 June 153 119
14 EMPLOYEE SHARE SCHEMES
SHARE OPTIONS
On 10 June 2022 the Company granted 2,350,000 options to directors, advisers
and consultants, exercisable at 13.5p per share, representing a 15% premium to
the closing mid-market price on 9 June 2022. The options vest in three
tranches, one third on the date of grant, one third on the anniversary of the
date of grant, and one third on the second anniversary of the date of grant.
The options can be exercised at any time from the date of vesting for a period
of 5 years whilst the recipient is employed or engaged by the Company.
The fair value of the options granted during the year was determined using the
Black-Scholes pricing model. The significant inputs to the model in respect
of the options were as follows:
Date of grant 10 June 2022
Share price at date of grant 11.75p
Exercise price per share 13.50p
No. of options 2,350,000
Risk free rate 1.0%
Expected volatility 50%
Life of option 5 years
Calculated fair value per share 4.6797p
The share-based payment charge for the year was £17,000 (2023: £52,000).
The share options movements and their weighted average exercise price are as
follows:
2024 2023
Weighted average Weighted average
exercise price exercise price
Number (pence) Number (pence)
Outstanding at 1 July 2,350,000 13.50 2,350,000 13.50
Granted - - - -
Exercised - - - -
Lapsed - - - -
Outstanding at 30 June 2,350,000 13.50 2,350,000 13.50
14 EMPLOYEE SHARE SCHEMES (continued)
RESTRICTED SHARE UNITS ("RSUs")
On 10 June 2022 the Company granted 1,150,000 RSUs to directors. The RSUs
vest in three tranches, one third on the date of grant, one third on the
anniversary of the date of grant, and one third on the second anniversary of
the date of grant. They can be exercised at any time from the date of
vesting for a period of 5 years whilst the recipient is employed or engaged by
the Company, with a reference price of 11.75p being the closing mid-market
price on 9 June 2022.
The fair value of the RSUs granted during the year was determined to be the
reference price of 11.75p per share, and the share-based payment charge for
the year in respect of the RSUs was £Nil (2023: £84,000).
The RSU movements and their weighted average reference price are as follows:
2024 2023
Weighted average Weighted average
Reference price Reference price
Number (pence) Number (pence)
Outstanding at 1 July 1,150,000 11.75 1,150,000 11.75
Granted - - - -
Exercised (200,000) 11.75 - -
Lapsed - - - -
Outstanding at 30 June 950,000 11.75 1,150,000 11.75
15 SHARE CAPITAL
Number of Nominal Share
shares Value premium
£'000 £'000
AUTHORISED
At 30 June 2023 and 30 June 2024
Ordinary shares of 1p each 160,000,000 1,600
Deferred shares of 24p each 35,000,000 8,400
10,000
ISSUED AND FULLY PAID
At 30 June 2023
Ordinary shares of 1p each 36,905,871 369
Deferred shares of 24p each 11,435,062 2,745
3,114 6,182
Ordinary shares issued in year to 30 June 2024 200,000 2 21
At 30 June 2024
Ordinary shares of 1p each 37,105,871 371
Deferred shares of 24p each 11,435,062 2,745
3,116 6,203
The ordinary shares carry no rights to fixed income but entitle the holders to
participate in dividends and vote at Annual and General meetings of the
Company.
The restricted rights of the deferred shares are such that they have no
economic value.
16 LOAN NOTE EQUITY RESERVE
2024 2023
£'000 £'000
Equity component of convertible loan notes at 1 July 6 6
Equity component of convertible loan notes at 30 June 6 6
17 RESERVE FOR EMPLOYEE SHARE SCHEMES
2024 2023
£'000 £'000
Brought forward at 1 July 228 92
Transfer to equity on exercise of Restricted Stock Units (23) -
Share based payment charge 17 136
Carried forward at 30 June 222 228
18 RISK MANAGEMENT OBJECTIVES AND POLICIES
The Company is exposed to a variety of financial risks which result from both
its operating and investing activities. The Company's risk management is
coordinated by the board of directors and focuses on actively securing the
Company's short to medium term cash flows by minimising the exposure to
financial markets.
MARKET PRICE RISK
The Company's exposure to market price risk mainly arises from potential
movements in the fair value of its investments. The Company manages this
price risk within its long-term investment strategy to manage a diversified
exposure to the market. If each of the Company's equity investments were to
experience a rise or fall of 10% in their fair value, this would result in the
Company's net asset value and statement of comprehensive income increasing or
decreasing by £1,164,000 (2023: £893,000).
FOREIGN CURRENCY RISK
The Group holds investments and cash balances denominated in foreign
currencies and investments quoted on overseas exchanges; consequently,
exposures to exchange rate fluctuations arise. The Group does not hedge its
foreign currency exposure and its liabilities in foreign currencies are
limited to the trade payables of Mineral & Financial Investments AG which
are not material.
The carrying amounts of the Group's foreign currency denominated monetary
assets at the reporting date are as follows:
2024 2023
£'000 £'000
US Dollar 8,554 5,740
Canadian Dollar 2,985 3,142
Swiss franc 26 201
Euro 64 115
FOREIGN CURRENCY SENSITIVITY ANALYSIS
The Group is mainly exposed to the US Dollar and the Canadian Dollar in
respect of investments which are either denominated in or valued in terms of
those currencies. The following table details the Group's sensitivity to a 5
per cent increase and decrease in pounds sterling against the US Dollar,
Canadian Dollar and Swiss franc. The Group's exposure to the Australian Dollar
and the Euro are not considered material.
2024 2023
£'000 £'000
US Dollar 5% increase in exchange rate against GBP 428 287
5% decrease in exchange rate against GBP (428) (287)
Canadian Dollar 5% increase in exchange rate against GBP 149 157
5% decrease in exchange rate against GBP (149) (157)
Swiss franc 5% increase in exchange rate against GBP 1 10
5% decrease in exchange rate against GBP (1) (10)
Euro 5% increase in exchange rate against GBP 3 6
5% decrease in exchange rate against GBP (3) (6)
CREDIT RISK
The Company's financial instruments, which are exposed to credit risk, are
considered to be mainly cash and cash equivalents and the Company's
receivables are not material. The credit risk for cash and cash equivalents
is not considered material since the counterparties are reputable banks.
The Company's exposure to credit risk is limited to the carrying amount of the
financial assets recognised at the balance sheet date, as summarised below:
18 RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
2024 2023
£'000 £'000
Cash and cash equivalents 141 796
Other receivables 3 10
144 806
No impairment provision was required against other receivables which are not
past due.
LIQUIDITY RISK
Liquidity risk is managed by means of ensuring sufficient cash and cash
equivalents are held to meet the Company's payment obligations arising from
administrative expenses.
CAPITAL RISK MANAGEMENT
The Company's objectives when managing capital are:
· to safeguard the Company's ability to continue as a going concern, so
that it continues to provide returns and benefits for shareholders.
· to support the Company's growth; and
· to provide capital for the purpose of strengthening the Company's
risk management capability.
The Company actively and regularly reviews and manages its capital structure
to ensure an optimal capital structure and equity holder returns, taking into
consideration the future capital requirements of the Company and capital
efficiency, prevailing and projected profitability, projected operating cash
flows, projected capital expenditures, and projected strategic investment
opportunities. Management regards total equity as capital and reserves, for
capital management purposes.
19 FINANCIAL INSTRUMENTS
FINANCIAL ASSETS BY CATEGORY
The IFRS 9 categories of financial assets included in the balance sheet and
the headings in which they are included are as follows:
2024 2023
£'000 £'000
Financial assets:
Cash and cash equivalents 141 796
Loans and receivables 3 10
Investments held at fair value through profit and loss 11,643 8,925
11,787 9,731
FINANCIAL LIABILITIES BY CATEGORY
The IFRS 9 categories of financial liability included in the balance sheet and
the headings in which they are included are as follows:
2024 2023
£'000 £'000
Financial liabilities at amortised cost:
Convertible unsecured loan notes 10 10
Trade and other payables 130 126
140 136
20 Contingent LIABILITIES AND CAPITAL COMMITMENTS
There were no contingent liabilities or capital commitments at 30 June 2024 or
30 June 2023.
21 POST YEAR END EVENTS
Details of post year end events are set out in the Directors Report
22 RELATED PARTY TRANSACTIONS
Key management personnel, as defined by IAS 24 'Related Party Disclosures'
have been identified as the Board of Directors, as the controls operated by
the Group ensure that all key decisions are reserved for the Board of
Directors. Details of the directors' remuneration and the options and RSUs
granted to directors are disclosed in the remuneration report.
23 ULTIMATE CONTROLLING PARTY
The Directors do not consider there to be a single ultimate controlling party.
FOR MORE INFORMATION:
Jacques Vaillancourt, Mineral & Financial Investments Ltd.
+44 780 226 8247
Katy Mitchell and Sarah Mather, Zeus Capital Limited
+44 203 829 5000
Jon Belliss, Novum Securities Limited
+44 207 382 8300
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 (MAR) as in force in the United Kingdom pursuant to the
European Union (Withdrawal) Act 2018. Upon the publication of this
announcement via Regulatory Information Service (RIS), this inside information
is now considered to be in the public domain.
1 International Monetary Fund, "World Economic Outlook Update: Policy Pivot,
Rising Threats" - October 2024
2 US Congressional Budget Office: An Update to the Budget and Economic
Outlook: 2020 to 2034 - June 18, 2024
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