REG - Red Rock Resources - Final Results
29/12/2021 12:25
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RNS Number : 9630W Red Rock Resources plc 29 December 2021
Red Rock Resources PLC
("Red Rock" or the "Company")
Final Audited Results for the Year Ended 30 June 2021
29 December 2021
A copy of the Company's annual report and financial statements for 2021 -
extracts from which are set out below - will be made available on the
Company's website www.rrrplc.com (http://www.rrrplc.com/) shortly.
Chairman's Statement
Dear Shareholders,
The year from July 2020 to June 2021 we expected to be one of activity across
the board for us, and so it was. We progressed exploration in every principal
country of operation, and had it not been for the continuance of the travel
and work restrictions imposed by various countries in response to the Covid-19
pandemic of early 2020, those advances would have been greater and faster.
This has culminated in three important drill programmes that have kept us
constantly busy since the end of June 2021. We were drilling first for copper
and cobalt in Congo, then also for gold in Kenya. Just as the first phase of
drilling in Kenya ended in December 2021, diamond drilling for gold began in
Australia. We expect positive results from all three programmes, which will
come over the next few weeks.
If we divide the Company's exploration activities into those conducted on
Legacy Exploration Assets and activities on New Exploration Assets, the
progress over the last eighteen months and our success in creating a project
pipeline is more easily explained. Progress on the Legacy Exploration Assets
was slowed in various ways by Covid-19 factors, though not critically. The New
Exploration Assets were the direct product of opportunities that arose as a
result of Covid-19, so in this respect the virus worked in our favour, but the
impact is lagged and will be felt more fully during the course of 2022.
ACTIVITY ON LEGACY EXPLORATION ASSETS
During the year we conducted extensive geophysics over key licenses in the
Congo and Kenya, in the latter country with our own trained crew and
equipment, and were then able to start drill programmes in both countries as
well as to plan future work. These programmes have only recently concluded,
and we end the calendar year awaiting final laboratory results from Congo and
from the first half of the samples sent from Kenya.
Kenya
In Kenya, following the restoration of our licenses in August 2020, we
repaired the camp and vehicles, recruited a new team in Migori and in London,
and with them and with consultants CSA Global Ltd, shared and discussed data
on numerous Zoom calls as we prepared to announce in February 2021 a new
Estimated Mineral Resource under the JORC 2012 Code of 723,000 oz of Gold at
1.49 grams per ton.
The detailed work done in revisiting our data on the Kenya licenses, then 3.18
terabytes and now 3.65 terabytes, fed into the targeting for the 2,000 metre
initial reverse circulation drill programme which we began shortly after the
June year end after completing an Environmental Impact Assessment. This
programme has just finished and a new EIA is already being carried out for the
next phases of exploration planned for 2022.
Congo
In the Democratic Republic of Congo, we followed a similar path, completing
geophysics and then starting just before the end of the Financial Year what
became a 2,300 metre reverse circulation drill programme. In this case the
targets were copper and cobalt.
ACTIVITY ON NEW EXPLORATION ASSETS
Australia
The initial period of lockdown in 2020 initially froze much of our activity,
but by eliminating travel time and regular hours it provided us with the
leisure to engage in strategic thinking. We studied opportunities including an
intensive analysis of the Victoria Goldfields in Victoria, Australia, produced
a white paper, and concluded that a rising gold price and an increase in
exploration interest would lead to new discoveries in underexplored and
historically rich gold terrain that could benefit from the application of new
techniques. We applied for substantial acreage centred on the key historic
mining district of Ballarat; our applications sometimes beating other
applications only by a day or two, and were just in time to take a strategic
position that only a few weeks later would have already become impossible.
There is no doubt that the restrictions on travel in Australia slowed the
competition, and provided us with a window of which we were able to take full
advantage.
Because of the initial perceived risk in this step into a new area, we teamed
up with Power Metal Resources Plc in a joint venture.
By September 2020 we had an independent geological report prepared, but due to
the extremely rigorous lockdowns, and home working by officials, in Victoria,
the process of license grant was not as rapid as we hoped, and as gold drifted
off the July 2020 high of $2115 per ounce to just under $1800, the pandemic
excitement surrounding gold stocks dissipated. Our first grants came in
February 2021, totalling 215 square kilometres, and only in the last few days
has an updated geological report been completed and the total acreage of
granted licenses gone above 1,000 sq km to 1,501 sq km.
An excellent local team of geologists has been assembled by Dave Holden, an
experienced geologist and manager living on the license, and previously known
to us, and the detailed exploration work they have been doing has enabled us
already to identify promising drill-ready targets.
A 2,000 metre drilling campaign began on 13 December 2021 on the first of
three initial targets, and progress continues towards a listing for New
Ballarat Gold Corporation Plc, the new holding company for our joint venture
assets in Australia, in the New Year.
Côte d'Ivoire and Burkina Faso
At a time when both Kenya and the DRC were on the UK's Red List for travel,
meaning that a ten-day sojourn in a Government-run hotel would be required on
return to London, we decided at the end of one trip on the alternative of
revisiting Abidjan to see if it might be an opportune moment to breathe new
life into our former gold ventures there. Considerably assisted by the fact
that our recently recruited database manager and geologist in London, of
Burkinabe extraction, had been born and worked in the Côte d'Ivoire, we made
contact with experienced geologists in both countries, and from among them
found suitable hard working and conscientious local partners and managers.
After writing on our return a white paper, we concluded that the West African
Gold belts were still immature gold plays that presented a very great
opportunity if one were working with experienced partners. We established new
local subsidiaries, and having reviewed and analysed a long list of
opportunities, we whittled them down to short lists, and made applications for
those licenses we believe to be most prospective for commercial discoveries.
We expect early grant of some of these.
OTHER ASSETS
Our strategic investments included listed holdings in manganese producer
Jupiter Mines Ltd (ASX:JMS), diversified explorer Power Metal Resources PLC
(AIM:POW), and iron ore developer Juno Mines Ltd (ASX:JNO), as well as royalty
interests in Mt Ida (iron project, Australia), various gold projects, and the
El Limon gold mine in Colombia. An unlisted holding whose value started to
become apparent was Elephant Oil Corporation, formerly Elephant Oil Ltd, which
holds onshore oil acreage in Benin and Namibia, and which has just filed its
Form S1 with NASDAQ as part of the final preparation for an expected listing.
In the Congo, we are acting with despatch to assert our rights over valuable
properties forming part of a joint venture, with a freezing order now in place
as we move towards the judgement phase of proceedings. We may have other
causes of action in various jurisdictions, and look to various possible forms
of compensation and damages.
At the end of calendar 2020, we provided some assistance to the Australian
Administrator of Vector Mines Ltd (In Administration) in order to provide time
and space to mediate a solution in relation to a significant but disputed
Congolese gold asset. Knowing all the main parties involved, and the potential
of the asset, we believe that an outcome is possible in which we would play a
part and that would be beneficial to the parties in dispute.
PERSONNEL, ESG, AND ADMINISTRATION
We embrace the new emphasis worldwide on companies showing environmental and
social neighbourliness, and ensuring they offer a career open to the talents
that offers training where it is needed, widens experience where it is
lacking, and gives responsibility to the capable without consideration of
cultural background. We embrace it because we have always tried to behave in
these ways, for business as well as ethical reasons. Among our first hires
both in Australia and in Kenya have been environmental and community relations
officers, in Kenya now supplemented by an expert adviser on the Mining Law and
Governmental relations. We know how key it is now for what is sometimes termed
a social license to operate, that we are not only doing the right things but
are doing them in a quite visible way.
The key to our operations is local management. In Australia we are Australian,
with a local and very competent and well-regarded team built by the New
Ballarat Gold Corporation CEO. In Kenya our management is headed by our able
Kenyan Project Manager who has built the local team, trained our geophysics
team, and works with our Kenyan Camp Manager and Kenyan geologists, so that we
appear Kenyan while doing things in an international manner and to
international standards. On 17 December 2021 two of our geological team were
awarded their MSc degrees, a source of pride to us all. We were also proud to
be told recently by a very senior and respected mining official that he held
us out frequently as an example of how a company should conduct itself in
carrying out systematic and professional exploration in Kenya.
In Congo we have not yet fully built out the team, but the nucleus now, after
some earlier challenges, consists of extremely capable and reliable
professionals.
In Côte d'Ivoire and Burkina Faso the local managers and our partners are
chosen for their integrity, diligence, and long experience. They are working
with us because they know that they and our Burkinabe manager in London will
remain in key management and directorial positions as we move towards a
listing on these properties.
We have worked hard with all these people in the last year, and not just on
geology and community relations. We have together been setting up companies
and offices and bank accounts, building a small camp in Congo, renewing and
expanding the camp in Kenya, and establishing an administrative structure in
Australia. We thank them all, for we know how much we owe them in what have
not always been easy circumstances, and all of them have been willing to go
the extra mile when required.
Year Under Review - Financial Results
In the year to 30 June 2021, reported group loss for the year was £1.699
million after a reported profit of £5.156 million in the previous year.
This reflected primarily an increase in administrative and expensed project
development costs during the period, after the one-off 2020 write-back of the
Company's interest in the Kenyan gold assets in the previous year. Dividend
income received during the year dropped from £0.419 million to £0.125
million, reflecting a lower payout and ongoing reductions in Jupiter Mines Ltd
holding. Group payroll and related costs increased reflecting the additional
activity in Australia, Kenya, London and Congo.
We ended the June 2021 financial year with our cash supplemented by
£1,581,000 in marketable investments and a holding in Elephant Oil, where we
expect a listing in the New Year, held at a value of £173,846 but likely to
be traded at a much higher valuation once listed.
Outlook
After a successful year in which the Company took the many challenges
associated with the COVID-19 pandemic, and turned them into operational
advantages, we look forward to continued nurturing of the seeds planted during
the period in the year ahead. Our key Kenyan asset will remain a particular
focus, as we believe we have the potential to build a large gold resource
here, comparable to the better-known mines in Tanzania to the south. Red Rock
remains intent on creating value for all stakeholders through development of
its projects and investments, including through listings of Elephant Oil and
New Ballarat Gold Corporation, and through possible sales and joint ventures
as well as exploration, and we expect investors to be materially rewarded for
their support over the course of 2022.
Andrew Bell
Chairman and CEO
28 December 2021
Results and Dividends
The Group made a loss after taxation of £1.699 million (2020: Profit of
£5.156 million). The Directors do not recommend the payment of a
dividend. The following financial statements are extracted from the audited
financial statements, which were approved by the Board of Directors and
authorised for issuance on 28 December 2021.
This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the Company's obligations under Article 17 of
MAR.
For further information, please contact:
Andrew Bell 0207 747
9990
Chairman Red Rock Resources Plc
Roland Cornish/ Rosalind Hill Abrahams 0207 628 3396
NOMAD Beaumont Cornish Limited
Jason Robertson 020 7374
2212
Broker First Equity Limited
Financial Statements
Independent Auditor's Report
to the Members of Red Rock Resources Plc
Opinion
We have audited the Financial Statements of Red Rock Resources Plc (the
"Company" or the "Parent Company") and its subsidiaries (the "Group") for the
year ended 30 June 2021, which comprise the Consolidated Statement of
Financial Position, the Consolidated Income Statement and Consolidated
Statement of Comprehensive Income, the Consolidated Statement of Changes in
Equity, the Consolidated Statement of Cash Flows, the Parent Company Statement
of Financial Position, the Parent Company Statement of Changes in Equity, the
Parent Company Statement 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 international
accounting standards in conformity with the requirements of the Companies Act
2006 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 30 June 2021 and of
the Group's loss for the year then ended;
· The Group Financial Statements have been properly prepared in
accordance with international accounting standards in conformity with the
requirements of the Companies Act 2006;
· The Parent Company Financial Statements have been properly
prepared in accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006 and prepared in accordance
with the requirements of the Companies Act 2006 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.
Material Uncertainty Related to Going Concern
We draw attention to note 1.2 in the Financial Statements, which indicates
that the Group is required to raise funds within the going concern period. As
stated in note 1.2, these events or conditions, along with the other matters
as set forth in note 1.2, indicate that a material uncertainty exists that may
cast significant doubt on the Group's and Parent Company's ability to continue
as a going concern. Our opinion is not modified in respect of this matter.
In auditing the Financial Statements, we have concluded that the Director's
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 Company's ability to continue to adopt the going
concern basis of accounting included:
· Challenging the forecasts prepared by the directors in their
assessment of the Group's and Parent Company's ability to meet their financial
obligations as they fall due for a period of at least 12 months from the date
of approval of the financial statements. The forecasts demonstrated that the
Group and Parent Company will require additional funding, or will need to
dispose of investments, to meet their liabilities as and when they fall due.
· The forecasts also indicated that the current funding will not
be sufficient to meet the planned additional investments and exploration
activities.
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. We
set certain quantitative thresholds for materiality. These, together with
qualitative considerations, helped us to determine the scope of our audit and
the nature, timing extent of our audit procedures on the individual financial
statement line items and disclosures and in evaluating the effect of
misstatements, both individually and on the financial statements as a whole.
Based on our professional judgement, we consider gross assets to be most
significant determinant of the group's financial performance and most relevant
to investors and shareholders for an exploration group with a number of
investments and early-stage projects. Materiality of the parent company was
based upon the loss before tax in order to achieve sufficient coverage of
expenditure in our testing.
We also determine a level of performance materiality which we use to assess
the extent of testing needed to reduce to an appropriately low level the
probability that the aggregate of uncorrected and undetected misstatements
exceeds materiality for the financial statements as a whole. In determining
our overall audit strategy, we assessed the level of uncorrected misstatements
that would be material for the financial statements as a whole.
We determined the group and parent company materiality for the financial
statements as a whole to be £209,000 and £106,000 (2020: £114,000 and
£102,600) respectively. Performance materiality was set at 60% of overall
materiality for the group and parent company at £125,400 and £63,600 (2020:
£68,400 and £61,560) respectively, whilst the threshold for reporting
unadjusted differences to those charged with governance was set at £10,450
for the group and £5,300 (2020: £5,700 and £5,130) for the parent company.
We also agreed to report differences below that threshold that, in our view,
warranted reporting on qualitative grounds.
The component materiality was set at group performance materiality of
£125,400.
Our Approach to the Audit
In designing our audit, we determined materiality 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. 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.
The accounting records of the Parent Company and all subsidiary undertakings
are centrally located and audited by us based upon materiality or risk. 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. In addition to the matter
described in the Material uncertainty related to going concern section, we
have determined the matters described below to be the key audit matters to be
communicated in our report.
Key Audit Matter How Our Scope Addressed This Matter
Recoverability of exploration assets (see notes 1.5 and 13)
Exploration assets have a carrying value in the Financial Statements of Our work in this area included the following:
£13,515,000 at 30 June 2021 (2020: £11,858,000).
· Obtaining and challenging management's impairment review,
We identified an audit risk that exploration assets are incorrectly valued together with evaluating announcements and progress on the license areas,
because an impairment exists that has not been recognised, and additions including exploration results and updated mineral resource estimates;
expenditure had been capitalised which do not meet the eligibility criteria
under IFRS 6. · Obtaining copies of the exploration licenses to ensure good title
and check, where applicable, that any specific terms or conditions therein
have been adequately met;
This was assessed to be a key audit matter because exploration assets · Performed an independent assessment for indicators of impairment
represent 70% of the Group's total assets and management are required to use in accordance with the requirements of IFRS 6;
their judgement in assessing their recoverability.
· Assessing the appropriateness of the disclosures made in respect
of management's judgement on whether impairment indicators exist; and
· Testing additions in the period to ensure they meet the
eligibility criteria under IFRS 6.
Recoverability of non-current assets (see notes 1.5 and 17)
Non-current assets has a carrying value in the Financial Statements of Our work in this area included the following:
£1,344,000 at 30 June 2021 (2020: £1,432,000).
· Obtaining management's working for the valuation of the MFP sales
Non-current assets represent amounts expected to be receivable through a net proceeds and ensuring arithmetical accuracy of the workings;
smelter royalty, following the sale of MFP in a previous accounting period.
The asset is measured at fair value based on the net present value of future · Evaluating publicly available information on production
cash flows expected to be received in respect of the royalty proceeds. activities at the mine;
· Reviewing all model inputs and assumptions and ensuring they are
reasonable and appropriate;
We identified an audit risk that these assets are not recoverable and,
therefore, are incorrectly valued in the Financial Statements. · Considering whether management have included all possible factors
which could impact the valuation; and
· Considering whether there are indications of impairment in the
This was assessed to be a key audit matter because non-current assets are valuation or whether there are indications that the balance is not
financially significant and management are required to use their judgement and recoverable.
estimation in preparing the net present value of future cash flows from the
royalty stream.
Key Observations
In reviewing the calculations prepared by management, we noted the following
assumptions as key:
• Estimate production rate;
• Discount rate; and
• Gold price.
Commissioning and initial production at the mine commenced during 2021 with
production expected to ramp up to commercial levels during the forthcoming
year. Management anticipate significant growth rates in production from 2022
onwards.
We draw to the users attention the disclosure in note 1.5, which lists the key
assumptions in the calculation of fair value of non-current assets. The
Financial Statements do not include the adjustments that would be required if
the assumptions used are not accurate.
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 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 Parent
Company and its 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 statement of Directors' responsibilities, 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's and 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 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 cumulative audit knowledge and 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
international accounting standards, the Companies Act 2006 and the local laws
and regulations in the jurisdictions in which the Group operates.
· 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, enquiries of management, review of Board minutes and
a review of legal or regulatory correspondence.
· 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, that the risk of fraud related to the estimates, judgements and
assumptions applied by management in their assessment of impairment of
intangible assets, the valuation of unlisted investments and the
recoverability of non-current receivables. Refer to the Key Audit Matters
section above on how our audit scope addressed these matters.
· 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.
David Thompson (Senior Statutory Auditor)
15 Westferry Circus
For and on behalf of PKF Littlejohn
LLP
Canary Wharf
Statutory
Auditor
London E14 4HD
28 December 2021
Consolidated Statement of Financial Position
as at 30 June 2021
Notes 30 June 30 June
2021 2020
£'000 £'000
ASSETS
Non-current assets
Investments in associates and joint ventures 12 1,585 1,584
Exploration assets 13 13,515 11,858
Mineral tenements 124 31
Financial instruments - fair value through other comprehensive income (FVTOCI) 14 1,755 2,755
Non-current receivables 17 1,344 1,432
Total non-current assets 18,323 17,660
Current assets
Cash and cash equivalents 16 457 53
Loans and receivables 161 -
Financial instruments with fair value through profit and loss (FVTPL) 15 - 3
Other receivables 18 399 544
Total current assets 1,017 600
TOTAL ASSETS 19,340 18,260
EQUITY AND LIABILITIES
Equity attributable to owners of the Parent
Called up share capital 20 2,835 2,783
Share premium account 30,924 26,909
Other reserves 1,627 1,460
Retained earnings (18,741) (17,187)
Total equity attributable to owners of the Parent 16,645 13,965
Non-controlling interest (199) (135)
Total equity 16,446 13,830
LIABILITIES
Non-current liabilities
Trade and other payables 19 119 7
Borrowings 19 731 -
Total non-current liabilities 850 7
Current liabilities
Trade and other payables 19 1,075 3,345
Short-term borrowings 19 969 1,078
Total current liabilities 2,044 4,423
TOTAL EQUITY AND LIABILITIES 19,340 18,260
These Financial Statements were approved by the Board of Directors and
authorised for issue on 28 December 2021 and are signed on its behalf by:
Andrew Bell
Chairman and CEO
The accompanying notes form an integral part of these Financial Statements.
Consolidated Income Statement
for the year ended 30 June 2021
Continuing operations Notes Year to Year to
30 June 30 June
2021 2020
£'000 £;000
Administrative expenses 4 (699) (597)
Exploration expenses (105) (10)
Project development 6 (559) (42)
Other project costs 6 (305) (319)
Share based payments (350) -
Impairment of financial assets carried at amortised cost 1.5 - (250)
Reversal of previously impaired financial assets 1.5 - 5,280
Loss on revaluation of FVTPL financial assets 15 - (53)
Currency gains 34 32
Share of profits/(losses) of associates 12 - -
Other gains 5 290 143
Dividend income 5 126 419
Finance income, net 5 (131) 553
Profit/(loss) for the year before taxation (1,699) 5,156
Tax 7 - -
Profit/(loss) for the year (1,699) 5,156
Profit/(loss) for the year attributable to:
Equity holders of the Parent (1,625) 5,164
Non-controlling interest (74) (8)
(1,699) 5,156
Earnings per share attributable to owners of the Parent:
Basic earnings per share, pence 10 (0.18) 0.76
Diluted earnings per share, pence 10 (0.18) 0.64
Consolidated Statement of Comprehensive Income
for the year ended 30 June 2021
Notes 30 June 30 June
2021 2020
£'000 £'000
Profit/(loss) for the year (1,699) 5,156
Other comprehensive income
Items that will not be reclassified to profit or loss 14 (330) (806)
(Deficit) / surplus on revaluation of FVTOCI financial assets
Losses and transfer of FVTOCI financial assets on disposal (330) (82)
Items that may be reclassified subsequently to profit or loss 19 (4)
Unrealised foreign currency (loss) / gain arising upon retranslation of
foreign operations
Total other comprehensive income net of tax for the year (641) (892)
Total comprehensive income, net of tax for the year (2,340) 4,264
Total comprehensive income net of tax attributable to:
Owners of the Parent (2,266) 4,378
Non-controlling interest (74) (114)
(2,340) 4,264
The accompanying notes form an integral part of these Financial Statements.
Consolidated Statement of Changes in Equity
for the year ended 30 June 2021
The movements in equity during the period were as follows:
Share Share Retained Other Total Non-controlling Total
capital premium earnings reserves attributable interest equity
£'000 account £'000 £'000 to owners of £'000 £'000
£'000 the Parent
£'000
As at 1 July 2019 2,781 26,853 (22,668) 2,563 9,529 (21) 11,215
Changes in equity for 2020
Profit for the year - - 5,164 - 5,164 (8) 5,156
Partial disposal of a subsidiary - - 106 - 106 (106) -
Other comprehensive income for the year
Transfer of FVTOCI reserve relating to disposals - - - (293) (293) - (293)
Transfer of FVTOCI reserve relating to impaired FVTOCI financial assets - - - (806) (806) - (806)
Losses on sale of FVTOCI taken directly to reserves - - 211 - 211 - 211
Unrealised foreign currency (loss) / gain arising upon retranslation of - - - (4) (4) - (4)
foreign operations
Total comprehensive income for the year - - 5,481 (1,103) 4,378 (114) 4,264
Transactions with owners
Issue of shares 1 35 - - 36 - 36
Share issue in relation to SIP 1 21 - - 22 - 22
Total transactions with owners 2 56 - - 58 - 58
As at 30 June 2020 2,783 26,909 (17,187) 1,460 13,965 (135) 13,830
Changes in equity for 2021
Loss for the year - - (1,625) - (1,625) (74) (1,699)
Other comprehensive income for the year
Transfer of FVTOCI reserve relating to disposals - - - (401) (401) - (401)
Transfer of FVTOCI reserve relating to impaired FVTOCI financial assets - - - (330) (330) - (330)
Unrealised foreign currency (loss) / gain arising upon retranslation of - - - 19 19 - 19
foreign operations
Losses on sale of FVTOCI taken directly to reserves - - 71 - 71 - 71
Total comprehensive income for the year - - (1,554) (712) (2,266) (74) (2,340)
Transactions with owners
Issue of shares 52 4,163 - - 4,215 - 4,215
Share issue costs - (110) - - (110) - (110)
Share based payments - - - 66 66 - 66
Issue of warrants - (38) - 813 775 - 775
Total transactions with owners 52 4,015 - 879 4,946 - 4,946
As at 30 June 2021 2,835 30,924 (18,741) 1,627 16,645 (199) 16,446
FVTOCI financial instruments revaluation Foreign Share-based Total
reserve currency payment other
£'000 translation reserve Warrant reserve reserves
reserve £'000 £'000 £'000
£'000
As at 1 July 2019 2,256 143 164 - 2,563
Changes in equity for 2020
Other comprehensive income for the year
Transfer of FVTOCI reserve relating to disposals (293) - - - (293)
Transfer of FVTOCI reserve relating to impaired FVTOCI financial assets (806) - - - (806)
Unrealised foreign currency gains on translation of foreign operations - (4) - - (4)
Total comprehensive income / (expense) for the year (1,099) (4) - - (1,103)
As at 30 June 2020 1,157 139 164 - 1,460
Changes in equity for 2021
Other comprehensive income for the year
Transfer of FVTOCI reserve relating to disposals (401) - - - (401)
Transfer of FVTOCI reserve relating to impaired FVTOCI financial assets (330) - - - (330)
Unrealised foreign currency gains on translation of foreign operations - 19 - - 19
Share based payments - - 66 - 66
Warrants issued in the year - - - 813 813
Total comprehensive income / (expense) for the year (731) 19 66 813 148
As at 30 June 2021 426 158 230 813 1,627
See note 21 for a description of each reserve included above.
Consolidated Statement of Cash Flows
for the year ended 30 June 2021
Notes Year to Year to
30 June 30 June
2021 2020
£'000 £'000
Cash flows from operating activities
Profit/(loss) before tax (1,699) 5,156
Increase in receivables (281) (24)
Increase in payables 143 322
Share of (profit)/losses in associates 12 - -
Interest receivable and finance income, including income from MFP 5 (152) (330)
Dividend income 5 (126) (419)
Interest expense 5 128 196
Share-based payments 22 350 -
Foreign exchange gain/loss (50) (32)
Change in value in FVTPL financial assets 3 53
Reversal of previously impaired exploration asset 1.5 - (5,280)
Impairment of loans and other receivables 1.5 - 250
Write back of trade creditors 3 - (552)
Net cash outflow from operations (1,684) (660)
Corporation tax reclaimed/(paid) - -
Net cash used in operations (1,684) (660)
Cash flows from investing activities
Proceeds from sale of FVTOCI financial assets 14 403 504
Dividends received 126 419
Payments to acquire exploration asset (215) (43)
Payments to increase interest in associate (370) -
Payments for tenements (93) (31)
Payments to set up new joint ventures - (4)
Net cash (outflow) / inflow from investing activities (149) 845
Cash flows from financing activities
Proceeds from issue of shares 1,957 -
Share issue costs (110) -
Interest paid 24 (101) (130)
Proceeds from new borrowings 24 545 103
Repayments of borrowings 24 (50) (175)
Net cash inflow / (outflow) from financing activities 2,241 (202)
Net (decrease)/increase in cash and cash equivalents 408 (17)
Cash and cash equivalents at the beginning of period 53 64
Exchange (losses)/gains on cash and cash equivalents (4) 6
Cash and cash equivalents at end of period 16 457 53
Major non-cash transactions are disclosed in note 24.
The accompanying notes and accounting policies form an integral part of these
Financial Statements.
Company Statement of Financial Position
as at 30 June 2021
Notes 30 June 30 June
2020 2020
£'000 £'000
ASSETS
Non-current assets
Investments in subsidiaries 11 39 19
Investments in associates and joint ventures 12 1,666 1,665
Financial instruments - fair value through other comprehensive income (FVTOCI) 14 778 1,771
Exploration property 13 12,948 11,507
Exploration assets 13 567 351
Non-current receivables 17 1,950 1,429
Total non-current assets 17,948 16,742
Current assets
Cash and cash equivalents 16 366 32
Financial assets (FVTPL) 15 - 3
Loans and other receivables 18 365 715
Total current assets 731 750
TOTAL ASSETS 18,679 17,492
EQUITY AND LIABILITIES
Called up share capital 20 2,835 2,783
Share premium account 30,924 26,909
Other reserves 1,043 645
Retained earnings (19,003) (17,362)
Total equity 15,799 12,975
LIABILITIES
Current liabilities
Trade and other payables 19 1,043 3,316
Intra-group borrowings 19 1,079 276
Short-term external borrowings 19 758 925
Total current liabilities 2,880 4,517
TOTAL EQUITY AND LIABILITIES 18,679 17,492
Company Statement of Comprehensive Income
As permitted by Section 408 Companies Act 2006, the Company has not presented
its own Income Statement or Statement of Comprehensive Income. The Company's
(loss)/profit for the financial year was (£1.578 million) (2020: profit of
£5.080 million). The Company's total comprehensive income for the financial
year was (£2.122 million) (2020: income of £4.232 million).
These Financial Statements were approved by the Board of Directors and
authorised for issue on 28 December 2021 and are signed on its behalf by:
Andrew Bell
Chairman and CEO
The accompanying notes and accounting policies form an integral part of these
Financial Statements.
Company Statement of Changes in Equity
for the year ended 30 June 2021
The movements in equity during the period were as follows:
Share Share Retained Other Total
capital premium earnings reserves equity
£'000 account £'000 £'000 £'000
£'000
As at 1 July 2019 2,781 26,853 (22,590) 1,641 8,685
Changes in equity for 2020
Profit for the year - - 5,080 - 5,080
Other comprehensive income for the year
Transfer of FVTOCI reserve relating to disposals - - - (312) (312)
Transfer of FVTOCI reserve relating to impaired FVTOCI financial assets - - - (684) (684)
Losses on sale of FVTOCI taken directly to reserves - - 148 - 148
Total comprehensive income for the year - - 5,228 (996) 4,232
Transactions with owners
Issue of shares 1 35 - - 36
Share issues in relation to SIP 1 21 - - 22
Total transactions with owners 2 56 - - 58
As at 30 June 2020 2,783 26,909 (17,362) 645 12,975
Changes in equity for 2021
Loss for the year - - (1,578) - (1,578)
Other comprehensive income for the year
Transfer of FVTOCI reserve relating to impaired FVTOCI financial assets - - - (631) (631)
Transfer of FVTOCI reserve relating to disposals - - - 150 150
Losses on sale of FVTOCI taken directly to reserves - - (63) - (63)
Total comprehensive income for the year - - (1,641) (481) (2,122)
Transactions with owners
Issue of shares 52 4,163 - - 4,215
Share issuance costs - (110) - - (110)
Share based payments - - - 66 66
Issue of warrants - (38) - 813 775
Total transactions with owners 52 4,015 - 879 4,946
As at 30 June 2021 2,835 30,924 (19,003) 1,043 15,799
Company Statement of Changes in Equity
for the year ended 30 June 2021
FVTOCI financial assets revaluation Total
reserve Share-based other
£'000 payment Warrant reserves
reserve reserve £'000
£'000 £'000
As at 1 July 2019 1,477 164 - 1,641
Changes in equity for 2020
Other comprehensive income for the year
Transfer of FVTOCI reserve relating to disposals (312) - - (312)
Transfer of FVTOCI reserve relating to impaired FVTOCI financial assets (684) - - (684)
Total Other comprehensive income (996) - - (996)
As at 30 June 2020 481 164 - 645
Changes in equity for 2020
Other comprehensive income for the year
Transfer of FVTOCI reserve relating to impaired FVTOCI financial assets (631) - - (631)
Transfer of FVTOCI reserve relating to disposals 150 - - 150
Share based payments - 66 - 66
Issue of warrants - - 813 813
Total Other comprehensive income (481) 66 813 398
As at 30 June 2021 - 230 813 1,043
See note 21 for a description of each reserve included above.
Company Statement of Cash Flows
for the year ended 30 June 2021
30 June 30 June
2020 2020
£'000 £'000
Cash flows from operating activities
Profit/(loss) before taxation (1,578) 5,080
Increase in receivables (239) (55)
(Decrease) / Increase in payables (440) 308
Dividend income (125) (310)
Interest income and other finance income (185) (330)
Interest expense 128 196
Share-based payments 350 -
Reversal of previously impaired exploration asset - (5,280)
Income from forgiven creditors - (552)
Impairment of loans and receivables - 250
Change in value in FVTPL financial assets 3 53
Foreign exchange loss / (gain) 118 (39)
Net cash outflow from operations (1,968) (679)
Corporation tax - -
Net cash used in operations (1,968) (679)
Cash flows from investing activities
Dividends received 126 310
Proceeds from sale of FVTOCI financial assets 150 501
Payments to acquire exploration asset (215) (43)
Net cash outflow from investing activities 61 768
Cash flows from financing activities
Proceeds from issue of shares 1,957 -
Transaction costs of issue of shares (110) -
Interest paid (101) (130)
Proceeds from new borrowings 545 205
Re-payments of borrowings (50) (175)
Net cash inflow from financing activities 2,241 (100)
Net increase/(decrease) in cash and cash equivalents 334 (11)
Cash and cash equivalents at the beginning of period 32 43
Cash and cash equivalents at end of period 366 32
The accompanying notes and accounting policies form an integral part of these
Financial Statements.
Notes to the Financial Statements
1. Principal Accounting Policies
1.1 Authorisation of Financial Statements and Statement of Compliance
with IFRS
The Group Financial Statements of Red Rock Resources Plc, for the year ended
30 June 2021, were authorised for issue by the Board on 28 December 2021 and
the Statement of Financial Position signed on the Board's behalf by Andrew
Bell. Red Rock Resources Plc is a public limited company incorporated and
domiciled in England and Wales. The Company's ordinary shares are traded on
AIM.
1.2 Basis of Preparation
The Financial Statements have been prepared in accordance with international
accounting standards in conformity with the requirements of the Companies Act
2006. The Financial Statements have been prepared on the cost basis, except
for certain financial instruments, which are carried as described in the
respective sections in the policies below. The principal accounting policies
adopted are set out below.
Going Concern
It is the prime responsibility of the Board to ensure the Company and the
Group remains a going concern. At 30 June 2021, the Group had cash and cash
equivalents of £0.457 million and £0.969 million of borrowings and, as at
the date of signing these Financial Statements, the cash balance was £0.062
million. The Directors anticipate having to raise additional funding over the
course of the going concern period.
Having considered the prepared cashflow forecasts and the Group budgets, which
includes the possibility of Directors reducing or foregoing their salaries if
required, the progress in activities post year-end, including the anticipated
asset sales of £0.953 million, the Directors consider that they will have
access to adequate resources in the 12 months from the date of the signing of
these Financial Statements. As a result, they consider it appropriate to
continue to adopt the going concern basis in the preparation of the Financial
Statements.
Should the Group be unable to continue trading as a going concern, adjustments
would have to be made to reduce the value of the assets to their recoverable
amounts, to provide for further liabilities, which might arise, and to
classify non-current assets as current. The Financial Statements have been
prepared on the going concern basis and do not include the adjustments that
would result if the Group was unable to continue as a going concern.
Amendments to Published Standards Effective for the year Ended 30 June 2021
New Standards, Amendments and Interpretations
The Group and the Parent Company have adopted all of the new and amended
standards and interpretations, issued by the International Accounting
Standards Board that are relevant to its operations and effective for
accounting periods commencing on or after 1 July 2020.
The following new IFRS standards and/or amendments to IFRS standards were
adopted for the first time during the year, none of which had a material
impact on the Financial Statements:
· Amendments to IFRS 3: Business Combinations (effective 1
January 2020);
· Amendments to IAS 1 and IAS 8: Definition of Material
(effective 1 January 2020); and
· Amendments to IFRS 9, IAS 39 and IFRS 17: Interest Rate
Benchmark Reform (effective 1 January 2020).
No standards or interpretations, that came into effect for the first time for
the financial year beginning 1 July 2020, have had an impact on the Group or
the Company.
New Standards, Amendments and Interpretations Not Yet Adopted
At the date of approval of these Financial Statements, the following standards
and interpretations, which have not been applied in these Financial Statements
were in issue but not yet effective:
· Amendments to IAS 1: Presentation of Financial Statements -
Classification of Liabilities as Current or Non-current (effective date not
yet confirmed);
· Amendments to IFRS 3: Business Combinations - Reference to
Conceptual Framework (effective 1 January 2022);
· Amendments to IAS 16: Property, Plant and Equipment (effective
1 January 2022);
· Amendments to IAS 37: Provisions, Contingent Liabilities and
Contingent Assets (effective 1 January 2022);
· Annual Improvements to IFRS Standards 2018-2020 Cycle
(effective 1 January 2022);
· Amendments to IAS 8: Accounting Policies, Changes to Accounting
Estimates and Errors (effective date not yet confirmed); and
· Amendments to IAS 12: Income Taxes - Deferred Tax arising from
a Single Transaction (effective date not yet confirmed).
The effect of these new and amended standards and interpretations, which are
in issue but not yet mandatorily effective, is not expected to be material.
Standards Adopted Early by the Group
The Group has not adopted any standards or interpretations early in either the
current or the preceding financial year.
1.3 Basis of Consolidation
The Consolidated Financial Statements of the Group incorporate the Financial
Statements of the Company and subsidiaries controlled by the Company made up
to 30 June each year.
Subsidiaries
Subsidiaries are entities over which the Group has the power to govern the
financial and operating policies so as to obtain economic benefits from their
activities. Subsidiaries are consolidated from the date on which control is
obtained, the acquisition date, up until the date that control ceases.
The acquisition method of accounting is used to account for the acquisition of
subsidiaries by the Group. The cost of an acquisition is measured as the fair
value of the assets given, equity instruments issued, contingent consideration
and liabilities incurred or assumed at the date of exchange. Costs, directly
attributable to the acquisition, are expensed as incurred. Identifiable assets
acquired and liabilities and contingent liabilities assumed in a business
combination are initially measured at fair value at the acquisition date.
Provisional fair values are adjusted against goodwill if additional
information is obtained within one year of the acquisition date, about facts
or circumstances, existing at the acquisition date. Other changes in
provisional fair values are recognised through profit or loss.
Non-controlling interests in subsidiaries are measured at the proportionate
share of the fair value of their identifiable net assets.
Intra-group transactions, balances and unrealised gains and losses on
transactions between the Group companies are eliminated on consolidation,
except to the extent that intra-group losses indicate an impairment.
At 30 June 2021, the Consolidated Financial Statements combine those of the
Company with those of its subsidiaries, Red Rock Australasia Pty Ltd, RRR Coal
Ltd, Red Rock Resources Congo S.A.U., RedRock Kenya Ltd and Red Rock Resources
(HK) Ltd.
The Group's dormant subsidiary Intrepid Resources Ltd, Red Rock Resources
Inc., RRR Kenya Ltd., Ivory Coast, Red Rock Cote D'Ivoire SARL and Basse Terre
SARL, have been excluded from consolidation on the basis of the exemption
provided by Section 405(2) of the Companies Act 2006 that their inclusion is
not material for the purpose of giving a true and fair view.
Non-Controlling Interests
Profit or loss and each component of other comprehensive income are allocated
between the Parent and non-controlling interests, even if this results in the
non-controlling interest having a deficit balance.
Transactions with non-controlling interests, that do not result in loss of
control, are accounted for as equity transactions. Any differences between the
adjustment for the non-controlling interest and the fair value of
consideration paid or received are recognised in equity.
1.4 Summary of Significant Accounting Policies
1.4.1 Mineral Tenements and Exploration Property
Exploration licence and property acquisition costs are capitalised in
intangible assets. Licence costs, paid in connection with a right to explore
in an existing exploration area, are capitalised and amortised over the term
of the permit. Licence and property acquisition costs are reviewed at each
reporting date to confirm that there is no indication that the carrying amount
exceeds the recoverable amount. If no future activity is planned or the
licence has been relinquished or has expired, the carrying value of the
licence and property acquisition costs are written off through the statement
of profit or loss and other comprehensive income.
1.4.2 Investment in Associates
An associate is an entity over which the Group has the power to exercise
significant influence, but not controlled or jointly controlled by the Group,
through participation in the financial and operating policy decisions of the
investee.
Investments in associates are recognised in the Consolidated Financial
Statements, using the equity method of accounting. The Group's share of
post-acquisition profits or losses is recognised in profit or loss and its
share of post-acquisition movements in other comprehensive income is
recognised directly in other comprehensive income.
The carrying value of the investment, including goodwill, is tested for
impairment, when there is objective evidence of impairment. Losses in excess
of the Group's interest in those associates are not recognised, unless the
Group has incurred obligations or made payments on behalf of the associate.
Where the Group transacts with an associate of the Group, unrealised gains are
eliminated to the extent of the Group's interest in the relevant associate.
Unrealised losses are also eliminated, unless the transaction provides
evidence of an impairment of the asset transferred, in which case appropriate
provision is made for impairment.
In the Company Financial Statements, investments in associates are recognised
and held at cost. The carrying value of the investment is tested for
impairment, when there is objective evidence of impairment.
1.4.3 Interests in Joint Ventures
The Group recognises its interest in the jointly controlled entity's assets
and liabilities, using the equity method of accounting. Under the equity
method, the interest in the joint venture is carried in the Statement of
Financial Position at cost plus post-acquisition changes in the Group's share
of its net assets, less distributions received and less any impairment in
value of individual investments. The Group Income Statement reflects the share
of the jointly controlled entity's results after tax.
Any goodwill, arising on the acquisition of a jointly controlled entity, is
included in the carrying amount of the jointly controlled entity and is not
amortised. To the extent that the net fair value of the entity's identifiable
assets, liabilities and contingent liabilities is greater than the cost of the
investment, a gain is recognised and added to the Group's share of the
entity's profit or loss in the period in which the investment is acquired.
Where necessary, adjustments are made to bring the accounting policies in line
with those of the Group's and to reflect impairment losses where appropriate.
Adjustments are also made in the Group's Financial Statements to eliminate the
Group's share of unrealised gains and losses on transactions between the Group
and its jointly controlled entity. The Group ceases to use the equity method
on the date from which it no longer has joint control over, or significant
influence in, the joint venture.
1.4.4 Taxation
Corporation tax is provided on taxable profits or losses at the current rate.
The tax expense/credit represents the sum of the current tax expense/credit
and deferred tax.
The tax currently payable/receivable is based on taxable profit or loss for
the year. Taxable profit or loss differs from accounting profit or loss as
reported in the Statement of 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 Group's
liability for current tax is measured using tax rates that have been enacted
or substantively enacted by the reporting date.
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amount of assets and liabilities in the Financial
Statements and the corresponding tax bases used in the computation of taxable
profit or loss and is accounted for using the balance sheet liability method.
Deferred tax liabilities are recognised for all taxable temporary differences
and deferred tax assets are recognised to the extent that it is probable that
taxable profits will be available against, which deductible, temporary
differences can be utilised. Such assets and liabilities are not recognised if
the temporary difference arises from the initial recognition of goodwill or
from the initial recognition (other than in a business combination) of other
assets and liabilities in a transaction, which affects neither the taxable
profit or loss nor the accounting profit or loss.
Deferred tax liabilities are recognised for taxable temporary differences,
arising on investments in subsidiaries and associates, and interests in joint
ventures, except where the Group is able to control the reversal of the
temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future.
Deferred tax is calculated at the tax rates that are expected to apply to the
period, when the asset is realised or the liability is settled, based upon tax
rates that have been enacted or substantively enacted by the reporting date.
Deferred tax is charged or credited in profit or loss, except when it relates
to items credited or charged directly to equity, in which case the deferred
tax is also dealt with in equity, or items charged or credited directly to
other comprehensive income, in which case the deferred tax is also recognised
in other comprehensive income.
Deferred tax assets and liabilities are offset, where there is a legally
enforceable right to offset current tax assets and liabilities, and the
deferred tax relates to income tax levied by the same tax authorities on
either:
· The same taxable entity; or
· Different taxable entities, which intend to settle current tax
assets and liabilities on a net basis or to realise and settle them
simultaneously in each future period, when the significant deferred tax assets
and liabilities are expected to be realised or settled.
1.4.5 Foreign Currencies
Both the functional and presentational currency of Red Rock Resources Plc is
Sterling ("£"). Each Group entity determines its own functional currency and
items, included in the Financial Statements of each entity, are measured,
using that functional currency.
The functional currency of the foreign subsidiaries are Australian Dollars
("AUD"), the Congolese Franc, and Kenyan Shillings.
Transactions in currencies other than the functional currency of the relevant
entity are initially recorded at the exchange rate, prevailing on the dates of
the transaction. At each reporting date, monetary assets and liabilities, that
are denominated in foreign currencies, are translated at the exchange rate,
prevailing at the reporting date. Non-monetary assets and liabilities, carried
at fair value that are denominated in foreign currencies, are translated at
the rates, prevailing at the date when the fair value was determined. Gains
and losses, arising on translation, are included in profit or loss for the
period, except for exchange differences on non-monetary assets and
liabilities, which are recognised directly in other comprehensive income, when
the changes in fair value are recognised directly in other comprehensive
income.
On consolidation, the assets and liabilities of the Group's overseas
operations are translated into the Group's presentational currency at exchange
rates, prevailing at the reporting date. Income and expense items are
translated at the average exchange rates for the period, unless exchange rates
have fluctuated significantly during the year, in which case the exchange rate
at the date of the transaction is used. All exchange differences arising, if
any, are recognised as other comprehensive income and are transferred to the
Group's foreign currency translation reserve.
1.4.6 Share-Based Payments
Share Options
The Group operates an equity-settled share-based payment arrangement, whereby
the fair value of services provided is determined indirectly by reference to
the fair value of the instrument granted.
The fair value of options, granted to Directors and others in respect of
services provided, is recognised as an expense in the Income Statement, with a
corresponding increase in equity reserves - the share-based payment reserve,
until the award has been settled and then make a transfer to share capital.
On exercise or lapse of share options, the proportion of the share-based
payment reserve, relevant to those options, is transferred to retained
earnings. On exercise, equity is also increased by the amount of the proceeds
received.
The fair value is measured at grant date and charged over the vesting period,
during which the option becomes unconditional.
The fair value of options is calculated using the Black-Scholes model, taking
into account the terms and conditions upon which the options were granted. The
exercise price is fixed at the date of grant.
Non-market conditions are performance conditions that are not related to the
market price of the entity's equity instruments. They are not considered, when
estimating the fair value of a share-based payment. Where the vesting period
is linked to a non-market performance condition, the Group recognises the
goods and services it has acquired during the vesting period, based on the
best available estimate of the number of equity instruments expected to vest.
The estimate is reconsidered at each reporting date, based on factors such as
a shortened vesting period, and the cumulative expense is "trued up" for both
the change in the number expected to vest and any change in the expected
vesting period.
Market conditions are performance conditions that relate to the market price
of the entity's equity instruments. These conditions are included in the
estimate of the fair value of a share-based payment. They are not taken into
account for the purpose of estimating the number of equity instruments that
will vest. Where the vesting period is linked to a market performance
condition, the Group estimates the expected vesting period. If the actual
vesting period is shorter than estimated, the charge is accelerated in the
period that the entity delivers the cash or equity instruments to the
counterparty. When the vesting period is longer, the expense is recognised
over the originally estimated vesting period.
For other equity instruments, granted during the year (i.e. other than share
options), fair value is measured on the basis of an observable market price.
Warrants or options, issued to parties other than employees, are valued based
on the value of the service provided.
Share Incentive Plan
Where shares are granted to employees under the Share Incentive Plan, the fair
value of services provided is determined indirectly by reference to the fair
value of the free, partnership and matching shares, granted on the grant date.
Fair value of shares is measured on the basis of an observable market price,
i.e. share price as at grant date, and is recognised as an expense in the
Income Statement on the date of the grant. For the partnership shares, the
charge is calculated as the excess of the mid-market price on the date of
grant over the employee's contribution.
1.4.7 Pension
The Group operates a defined contribution pension plan, which requires
contributions to be made to a separately administered fund. Contributions to
the defined contribution scheme are charged to profit or loss as they become
payable.
1.4.8 Exploration Assets
Exploration assets comprise exploration and development costs incurred on
prospects at an exploratory stage. These costs include the cost of
acquisition, exploration, determination of recoverable reserves, economic
feasibility studies and all technical and administrative overheads directly
associated with those projects. These costs are carried forward in the
Statement of Financial Position as non-current intangible assets less
provision for identified impairments.
Recoverability of exploration and development costs is dependent upon
successful development and commercial exploitation of each area of interest
and will be amortised over the expected commercial life of each area once
production commences. The Group and the Company currently have no exploration
assets, where production has commenced.
The Group adopts the "area of interest" method of accounting, whereby all
exploration and development costs, relating to an area of interest, are
capitalised and carried forward until abandoned. In the event that an area of
interest is abandoned, or if the Directors consider the expenditure to be of
no value, accumulated exploration costs are written off in the financial year
in which the decision is made. All expenditure incurred prior to approval of
an application is expensed with the exception of refundable rent, which is
raised as a receivable.
Upon disposal, the difference between the fair value of consideration
receivable for exploration assets and the relevant cost within non-current
assets is recognised in the Income Statement.
1.4.9 Impairment of Non-Financial Assets
The carrying values of assets, other than those to which IAS 36 "Impairment of
Assets" does not apply, are reviewed at the end of each reporting period for
impairment, when there is an indication that the assets might be impaired.
Impairment is measured by comparing the carrying values of the assets with
their recoverable amounts. The recoverable amount of the assets is the higher
of the assets' fair value less costs to sell and their value-in-use, which is
measured by reference to discounted future cash flow.
An impairment loss is recognised immediately in the Consolidated Statement of
Comprehensive Income.
When there is a change in the estimates used to determine the recoverable
amount, a subsequent increase in the recoverable amount of an asset is treated
as a reversal of the previous impairment loss and is recognised to the extent
of the carrying amount of the asset that would have been determined (net of
amortisation and depreciation) had no impairment loss been recognised. The
reversal is recognised in profit or loss immediately, unless the asset is
carried at its revalued amount, in which case the reversal of the impairment
loss is treated as a revaluation increase.
1.4.10 Finance Income/Expense
Finance income and expense is recognised as interest accrues, using the
effective interest method. This is a method of calculating the amortised cost
of a financial asset and allocating the interest income over the relevant
period, using the effective interest rate, which is the rate that exactly
discounts estimated future cash receipts or re-payments through the expected
life of the financial asset or liability to the net carrying amount of the
financial asset or liability.
1.4.11 Financial Instruments
The Group classifies its financial assets into one of the categories discussed
below, depending on the purpose for which the asset was acquired. The Group's
accounting policy for each category is as follows:
Fair Value through Profit or Loss (FVTPL)
This category comprises in-the-money derivatives and out-of-money derivatives,
where the time value offsets the negative intrinsic value. They are carried in
the Statement of Financial Position at fair value, with changes in fair value
recognised in the Consolidated Statement of Comprehensive Income in the
finance income or expense line. Other than derivative financial instruments,
which are not designated as hedging instruments, the Group does not have any
assets held for trading nor does it voluntarily classify any financial assets
as being at fair value through profit or loss.
Amortised Cost
These assets comprise the types of financial assets, where the objective is to
hold these assets in order to collect contractual cash flows and the
contractual cash flows are solely payments of principal and interest. They are
initially recognised at fair value plus transaction costs that are directly
attributable to their acquisition or issue and are subsequently carried at
amortised cost, using the effective interest rate method, less provision for
impairment. Impairment provisions, for current and non-current trade
receivables. are recognised, based on the simplified approach within IFRS 9,
using a provision matrix in the determination of the lifetime expected credit
losses.
During this process, the probability of the non-payment of the trade
receivables is assessed. This probability is then multiplied by the amount of
the expected loss, arising from default to determine the lifetime expected
credit loss for the trade receivables. For the receivables, which are reported
net, such provisions are recorded in a separate provision account, with the
loss being recognised in the Consolidated Statement of Comprehensive Income.
On confirmation that the receivable will not be collectable, the gross
carrying value of the asset is written off against the associated provision.
Impairment provisions, for receivables from related parties and loans to
related parties, are recognised, based on a forward-looking expected credit
loss model. The methodology, used to determine the amount of the provision, is
based on whether there has been a significant increase in credit risk since
initial recognition of the financial asset, based on analysis of internal or
external information. For those where the credit risk has not increased
significantly since initial recognition of the financial asset, twelve month
expected credit losses along with gross interest income are recognised. For
those for which credit risk has increased significantly, lifetime expected
credit losses, along with the gross interest income, are recognised. For those
that are determined to be credit impaired, lifetime expected credit losses,
along with interest income on a net basis, are recognised.
The Group considers a financial asset in default, when contractual payments
are 180 days past due. However, in certain cases, the Group may also consider
a financial asset to be in default, when internal or external information
indicates that the Group is unlikely to receive the outstanding contractual
amounts in full, before taking into account any credit enhancements held by
the Group. A financial asset is written off, when there is no reasonable
expectation of recovering the contractual cash flows.
The Group's financial assets, measured at amortised cost, comprise trade and
other receivables and cash and cash equivalents in the Consolidated Statement
of Financial Position. Cash and cash equivalents include cash in hand,
deposits held at call with banks, other short term highly liquid investments
with original maturities of three months or less, and, for the purpose of the
Statement of Cash Flows, bank overdrafts. Bank overdrafts are shown within
loans and borrowings in current liabilities on the Consolidated Statement of
Financial Position.
Fair Value through Other Comprehensive Income (FVTOCI)
The Group has a number of strategic investments in listed and unlisted
entities, which are not accounted for as subsidiaries, associates or jointly
controlled entities. For those investments, the Group has made an irrevocable
election to classify the investments at fair value through other comprehensive
income rather than through profit or loss as the Group considers this
measurement to be the most representative of the business model for these
assets. They are carried at fair value, with changes in fair value recognised
in other comprehensive income, and accumulated in the fair value through other
comprehensive income reserve. Upon disposal, any balance, within fair value
through other comprehensive income reserve, is reclassified directly to
retained earnings and is not reclassified to profit or loss.
Dividends are recognised in profit or loss, unless the dividend clearly
represents a recovery of part of the cost of the investment, in which case,
the full or partial amount of the dividend is recorded against the associated
investments carrying amount.
Purchases and sales of financial assets, measured at fair value through other
comprehensive income, are recognised on settlement date with any change in
fair value between trade date and settlement date, being recognised in the
fair value through other comprehensive income reserve.
Fair Value Measurement
Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at
the measurement date. The fair value measurement is based on the presumption
that the transaction to sell the asset or transfer the liability takes place
either:
· In the principal market for the asset or liability; or
· In the absence of a principal market, in the most advantageous
market for the asset or liability.
The principal or the most advantageous market must be accessible by the Group.
The fair value of an asset or a liability is measured, using the assumptions
that market participants would use when pricing the asset or liability,
assuming that market participants act in their economic best interest.
A fair value measurement, of a non-financial asset, takes into account a
market participant's ability to generate economic benefits by using the asset
in its highest and best use or by selling it to another market participant
that would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances
and for which sufficient data are available to measure fair value, maximising
the use of relevant observable inputs and minimising the use of unobservable
inputs.
All assets and liabilities, for which fair value is measured or disclosed in
the Financial Statements, are categorised within the fair value hierarchy,
described as follows, based on the lowest level input that is significant to
the fair value measurement as a whole:
· Level 1 - Quoted (unadjusted) market prices in active markets
for identical assets or liabilities;
· Level 2 - Valuation techniques for which the lowest level input
that is significant to the fair value measurement is directly or indirectly
observable; and
· Level 3 - Valuation techniques for which the lowest level input
that is significant to the fair value measurement is unobservable.
For assets and liabilities that are recognised in the Financial Statements on
a recurring basis, the Group determines, whether transfers have occurred
between levels in the hierarchy by re-assessing categorisation (based on the
lowest level input that is significant to the fair value measurement as a
whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Group has determined classes of
assets and liabilities on the basis of the nature, characteristics and risks
of the asset or liability and the level of the fair value hierarchy as
explained above.
Financial Liabilities
The Group classifies its financial liabilities into one of two categories,
depending on the purpose for which the liability was acquired:
Fair Value through Profit or Loss (FVTPL)
This category comprises out-of-the-money derivatives, where the time value
does not offset the negative intrinsic value or any liabilities held for
trading. They are carried in the consolidated statement of financial position
at fair value with changes in fair value recognised in the Consolidated
Statement of Comprehensive Income. The Group did not hold any such liabilities
at the date of IFRS 9 adoption or at the end of the reporting year.
Other Financial Liabilities
Other financial liabilities include:
- Borrowings, which are initially recognised at fair value net
of any transaction costs directly attributable to the issue of the instrument.
Such interest-bearing liabilities are subsequently measured at amortised cost,
using the effective interest rate method, which ensures that any interest
expense over the period to repayment is at a constant rate on the balance of
the liability carried in the Consolidated Statement of Financial Position. For
the purposes of each financial liability, interest expense includes initial
transaction costs and any premium payable on redemption as well as any
interest or coupon payable while the liability is outstanding;
- Liability components of convertible loan notes are measured as
described further below; and
- Trade payables and other short-term monetary liabilities,
which are initially recognised at fair value and subsequently carried at
amortised cost, using the effective interest method.
1.4.12 Investments
Investments in subsidiaries are classified as non-current assets and included
in the Statement of Financial Position of the Company at cost at the date of
acquisition less any identified impairments.
For acquisitions of subsidiaries or associates achieved in stages, the Company
re-measures its previously held equity interests in the acquiree at its
acquisition-date fair value and recognises the resulting gain or loss, if any,
in profit or loss. Any gains or losses, previously recognised in other
comprehensive income, are transferred to profit and loss.
Investments in associates and joint ventures are classified as non-current
assets and included in the Statement of Financial Position of the Company at
cost at the date of acquisition less any identified impairment.
1.4.13 Dividend Income
Dividends, received from strategic investments, are recognised, when they
become legally receivable. In case of interim dividends, this is when
declared. In case of final dividends, this is when approved by the
shareholders at the Annual General Meeting.
1.4.14 Share Capital
Financial instruments, issued by the Group, are classified as equity only to
the extent that they do not meet the definition of a financial liability or
financial asset. The Group's ordinary shares are classified as equity
instruments.
1.4.15 Convertible Debt
The proceeds, received on issue of the Group's convertible debt, are allocated
into their liability and equity components. The amount initially attributed to
the debt component equals the discounted cash flows, using a market rate of
interest that would be payable on a similar debt instrument that does not
include an option to convert. Subsequently, the debt component is accounted
for as a financial liability, measured at amortised cost until extinguished on
conversion or maturity of the bond. The remainder of the proceeds is allocated
to the conversion option and is recognised in the "Convertible debt option
reserve" within shareholders' equity, net of income tax effects.
1.4.16 Warrants
Derivative contracts, that only result in the delivery of a fixed amount of
cash or other financial assets for a fixed number of an entity's own equity
instruments, are classified as equity instruments. When warrants are issued,
attached to specific loan notes, the Company estimates the fair value of the
issued warrants, using the Black-Scholes pricing model, taking into account
the terms and conditions upon which the warrants were issued, value of such
warrants is deducted from the balance of loan notes, a directly attributable
transaction cost. Warrants, relating to equity finance and issued together
with ordinary shares placement, are valued by residual method and treated as
directly attributable transaction costs and recorded as a reduction of share
premium account based on the fair value of the warrants. Warrants, classified
as equity instruments, are not subsequently re-measured.
1.5 Significant Accounting Judgements, Estimates and Assumptions
The preparation of the Group's Consolidated Financial Statements, requires
management to make judgements, estimates and assumptions that affect the
reported amounts of revenues, expenses, assets and liabilities at the end of
the reporting period. However, uncertainty, about these assumptions and
estimates, could result in outcomes that require a material adjustment to the
carrying amount of the asset or liability affected in future periods.
Significant Judgements in Applying the Accounting Policies
In the process of applying the Group's accounting policies, management has
made the following judgements, which have the most significant effect on the
amounts, recognised in the Consolidated Financial Statements:
Recognition of Holdings Less Than 20% as an Associate
The Company owns 15% of the issued share capital of Mid Migori Mining Company
Ltd ("MMM"). Andrew Bell is a member of the board of MMM. In accordance with
IAS 28, the Directors of the Company consider that, the agreements whereby the
Company owns the beneficial interest in the Kenyan assets, and the input of
resource by the Company in respect of drilling and analytical activities, to
provide the Group with significant influence as defined by the standard. As
such, MMM has been recognised as an associate for the years ended 30 June
2021, 30 June 2020 and 30 June 2019.
The effect of recognising MMM as an FVTOCI financial asset would be to
decrease the profit by £25 (2020: decrease the profit by £25).
Significant Accounting Estimates and Assumptions
The carrying amounts of certain assets and liabilities are often determined
based on estimates and assumptions of future events. The key estimates and
assumptions, that have a significant risk of causing a material adjustment to
the carrying amounts of certain assets and liabilities within the next annual
reporting period, include the impairment determinations, the useful lives of
property, plant and equipment, the bad debt provision and the fair values of
our financial assets and liabilities.
Fair value of Mineras Four Points Sales Proceeds Receivable
In estimating the fair value of the Company's future gold royalties from
Colombia, the Directors have made assumptions about the future cash flows,
which include the following key assumptions:
· Gold price (US$/oz) - US$1,750 (2020: US$1,800);
· Discount rate - 10% (2020: 10%); and
· Annual production rate - 10,000oz (2020: 10,530oz)
The fair value is directly sensitive to any changes in the key assumptions.
Share-Based Payment Transactions
The Group measures the cost of equity-settled transactions with employees by
reference to the fair value of the equity instruments at the date at which
they are granted. The fair value of share options is determined using the
Black-Scholes model. The model has its strengths and weaknesses and requires
six inputs as a minimum: 1) the share price; 2) the exercise price; 3) the
risk-free rate of return; 4) the expected dividends or dividend yield; 5) the
life of the option; and 6) the volatility of the expected return. The first
three inputs are normally, but not always, straightforward. The last three
involve greater judgement and have the greatest impact on the fair value.
Impairment of Financial Assets
A financial asset, or a group of financial assets, is deemed to be impaired
if, and only if, there is objective evidence of impairment as a result of one
or more events that has occurred after the initial recognition of the asset
(an incurred "loss event") and that loss event has an impact on the estimated
future cash flows of the financial asset or the group of financial assets that
can be reliably estimated. This determination requires significant judgement.
In making this judgement, the Group evaluates, among other factors, the
duration and extent to which fair value of an investment is less than its
cost.
In the case of equity investments, classified as financial instruments with
fair value movements through other comprehensive income (FVTOCI), objective
evidence would include a significant or prolonged decline in the fair value of
the investment below its cost. "Significant" is evaluated against the original
cost of the investment and "prolonged" against the period in which the fair
value has been below its original cost. Mining share prices typically have
more volatility than most other shares and this is taken into account by
management, when considering if a significant decline in the fair value of its
mining investments has occurred. Management would consider that there is a
prolonged decline in the fair value of an equity investment, when the period
of decline in fair value has extended to beyond the expectation management
have for the equity investment. This expectation will be influenced
particularly by the Company development cycle of the investment.
Impairment of Non-financial Assets
The Group follows the guidance of IAS 36 to determine, when a non-financial
asset is impaired. The Group assesses, at each reporting date, whether there
is an indication that an asset may be impaired. If any indication exists, or
when annual impairment testing for an asset is required, the Group estimates
the asset's recoverable amount. An asset's recoverable amount is the higher of
an asset's or cash-generating unit's (CGU) fair value less costs to sell and
its value in use. Recoverable amount is determined for an individual asset,
unless the asset does not generate cash inflows that are largely independent
of those from other assets or groups of assets. When the carrying amount of an
asset or CGU exceeds its recoverable amount, the asset is considered impaired
and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to
their present value, using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the
asset. In determining fair value less costs to sell, recent market
transactions are taken into account. If no such transactions can be
identified, an appropriate valuation model is used. These calculations are
corroborated by valuation multiples, quoted share prices for publicly traded
companies or other available fair value indicators.
The Group bases its impairment calculation on detailed projections, which are
prepared separately for each of the Group's CGUs to which the individual
assets are allocated. These projections generally cover a period of five years
with a terminal value or salvage value applied.
Impairment losses of continuing operations are recognised in the Income
Statement in expense categories, consistent with the function of the impaired
asset.
For investments in associates and joint ventures, the Group assesses
impairment after the application of the equity method.
2. Segmental Analysis
The Group consider its mining and exploration activities as separate segments.
These are in addition to the investment activities, which continue to form a
significant segment of the business.
The Group has made a strategic decision to concentrate on several commodities,
ranging from gold to manganese and copper/cobalt, and as such further
segmental analysis by commodity has not been considered useful or been
presented. Transfer prices, between operating segments, are on an arm's length
basis in a manner similar to transactions with third parties.
Year to 30 June 2021 Gold Gold Copper Investments Corporate Total
Exploration Exploration Exploration £'000 and £'000
Australia Kenya DRC unallocated
£'000 £'000 £'000 £'000
Exploration expenses - (98) - - (7) (105)
Administration expenses - (5) (4) - (690) (699)
Project development - - (559) - - (559)
Other project costs (138) (40) - - (127) (305)
Share based payments - - - - (350) (350)
Currency gain (9) - - - 43 34
Other income - - - - 290 290
Dividend income - - - 126 - 126
Finance income, net - - - (2) (129) (131)
Net profit/(loss) before tax from continuing operations (147) (143) (563) 124 (970) (1,699)
Year to 30 June 2020 Gold Gold Copper Investments Corporate Total
Exploration Exploration Exploration £'000 and £'000
Australia Kenya DRC unallocated
£'000 £'000 £'000 £'000
Exploration expenses - (10) - - - (10)
Administration expenses (2) (6) - - (589) (597)
Project development - - (32) - (10) (42)
Other project costs - (158) - - (161) (319)
Currency gain - - - - 32 32
Previous impairment reversal in relation to Kenyan licences - 5,280 - - - 5,280
Other income - - - - 562 562
Impairment of loans and other receivables - - - - (250) (250)
Gain/(Loss) on sales of FVTPL investments - - - - (53) (53)
Finance income, net - - - 419 134 553
Net profit/(loss) before tax from continuing operations (2) 5,106 (32) 419 (335) 5,156
Information by Geographical Area
Presented below is certain information by the geographical area of the Group's
activities. Revenue, from investment sales and the sale of exploration assets,
is allocated to the location of the asset sold.
Year ended 30 June 2021 UK Africa Australia Total
£'000 £'000 £'000 £'000
Non-current assets
Investments in associates and joint ventures - 1,585 - 1,585
Mineral tenements - - 124 124
Exploration properties - 12,948 - 12,948
Exploration assets - 567 - 567
FVTOCI financial assets 736 1,019 - 1,755
Non-current receivables 1,341 - 3 1,344
Total segment non-current assets 2,077 16,119 127 18,323
Year ended 30 June 2020 UK Africa Australia Total
£'000 £'000 £'000 £'000
Non-current assets
Investments in associates and joint ventures - 1,584 - 1,584
Mineral tenements - - 31 31
Exploration properties - 11,507 - 11,507
Exploration assets - 351 - 351
FVTOCI financial assets 166 2,589 - 2,755
Non-current receivables 1,429 - 3 1,432
Total segment non-current assets 1,595 16,031 34 17,660
3. (Loss)/Profit for the Year Before Taxation
(Loss)/profit for the year before taxation is stated after charging:
2021 2020
£'000 £'000
Auditor's remuneration:
- fees payable to the Company's auditor for the audit of consolidated and 25 24
Company Financial Statements
Directors' emoluments (note 9) 312 257
- Share Incentive plan - Directors 11 14
- Share Incentive plan - staff 7 -
Other gains - 552
- Write back of trade creditors more than 7 years old
- Government support grant (COVID-19) - 10
4. Administrative Expenses
Group Group Company Company
2021 2020 2021 2020
£'000 £'000 £'000 £'000
Staff costs
Payroll 307 234 307 234
Pension 20 18 20 18
Consultants 15 15 15 15
HMRC / PAYE 28 19 28 19
Professional services
Accounting and Audit 42 73 40 67
Legal 15 11 14 11
Marketing 64 35 64 35
Other - 1 - 1
Regulatory compliance 105 85 105 85
Travel 24 27 24 27
Office and Admin
General 22 19 17 10
IT costs 8 5 8 5
Rent 35 48 35 48
Insurance 13 7 13 7
Total administrative expenses 699 597 690 582
5. Finance Income/(Costs), Net
Group 2021 2020
£'000 £'000
Interest income (other than MFP finance income) 290 311
Dividend income 126 419
Interest expense (131) (196)
Total finance income (other than MFP finance income) 285 534
MFP finance expense / (income) - 19
Total finance income 285 553
Interest income (other than Mineras Four Points ("MFP") finance income) comes
from non-current receivables from an associate. Please refer to note 17 and
note 18 respectively. Dividend income represents the money received from the
Group's 0.53% holding in Jupiter Mines Limited (2020: holding in Jupiter Mines
Limited of 0.81%).
6. Project Development and Other Project Expenses
Project development expenses include costs, incurred during the assessment and
due diligence phases of a project, when material uncertainties exist
regarding, whether the project meets the Company's investment and development
criteria and, whether as a result, the project will be advanced further.
Other Project Expenses include costs associated with current and previous
projects and include remediation and administration expenses.
Group and Company
2021 2020
£'000 £'000
Project development expenses
VUP (Congo) 392 -
Zlata Bana 42 -
Galaxy (Congo) 14 -
Kilbowe (Congo) - 32
Luanshimba (Congo) 19 -
Kinsevere 92 -
Power project (Zambia) - 10
Total project development expenses 559 42
Other project costs
Mid Migori Mines (Kenya) 40 158
Greenland 126 158
Other 139 3
Total other project expenses 305 319
7. Taxation
2021 2020
£'000 £'000
Current period taxation on the Group
UK corporation tax at 19.00% (2020: 19.00%) on profit/(loss) for the period - -
- -
Deferred tax
Origination and reversal of temporary differences - -
Deferred tax assets not recognised - -
Tax credit - -
Factors affecting the tax charge/(credit) for the year
Profit/(loss) on ordinary activities before taxation (1,699) 5,156
Profit/(loss) on ordinary activities at the average UK standard rate of 19.00% (323) 980
(2020: 19.00%)
Income not taxable - (1,115)
Effect of expenditure not deductible 67 58
Losses brought forward utilised in the current period - 71
Tax losses carried forward 256 6
Tax charge - -
No deferred tax asset, relating to the Group's investments, was recognised in
the Statement of Comprehensive Income (2020: £nil). No deferred tax charge
has been made due to the availability of trading losses. Unutilised tax
losses, arising in the UK, amount to £4.1 million (2020: £3.9 million).
8. Staff Costs
The aggregate employment costs of staff (including Directors) for the year in
respect of the Group was:
2021 2020
£'000 £'000
Wages and salaries 322 219
Pension 20 18
Social security costs 28 19
Employee share-based payment charge 66 14
Total staff costs 436 270
The average number of Group employees (including Directors) during the year
was:
2021 2020
Number Number
Executives 4 4
Administration 1 1
Exploration 1 -
6 5
The key management personnel are the Directors and their remuneration is
disclosed within note 9.
360,000 free shares were issued to five employees (2020: nil), including
Directors. 4,589,418 partnership and 9,178,836 matching shares, making the
total of 15,568,254, were issued in the year ended 30 June 2021 (2020:
4,905,930 partnership, 9,811,860 matching, 14,717,790 total).
9. Directors' Emoluments
2021 Directors' Directors' fees - discretionary bonus Consultancy Share Pension Social Total
fees £'000 fees Incentive Plan contributions security costs £'000
£'000 £'000 £'000 £'000 £'000
Executive Directors
A R M Bell 88 17 15 7 7 10 144
Other Directors
S Kaintz 65 15 - 7 6 7 100
M C Nott 15 7 - 7 1 1 31
S Quinn 19 7 - 7 2 2 37
187 46 15 28 16 20 312
2020 Directors' Directors' fees - discretionary bonus, Consultancy Share Pension Social Total
fees £'000 fees Incentive Plan contributions security costs £'000
£'000 £'000 £'000 £'000 £'000
Executive Directors
A R M Bell 82 3 15 4 7 10 121
Other Directors
S Kaintz 65 3 - 4 6 7 85
M C Nott 18 1 - 3 2 1 25
S Quinn 18 1 - 3 1 2 26
183 8 15 14 16 20 257
The number of Directors, who exercised share options in the year was nil
(2020: nil).
10. Earnings Per Share
The basic earnings/(loss) per share is derived by dividing the loss for the
year, attributable to ordinary shareholders of the Parent by the weighted
average number of shares in issue. Diluted earnings/(loss) per share is
derived by dividing the loss for the year, attributable to ordinary
shareholders of the Parent by the weighted average number of shares in issue
plus the weighted average number of ordinary shares that would be issued on
conversion of all dilutive potential ordinary shares into ordinary shares.
2021 2020
(Loss)/profit attributable to equity holders of the parent company, £ (1,698,983) 5,163,595
Adjusted for interest accrued on the convertible notes - 102,435
Adjusted (loss) / profit attributable to equity holders of the parent company (1,698,983) 5,266,030
used for diluted EPS calculation
Weighted average number of ordinary shares of £0.0001 in issue, used for 939,293,986 679,826,248
basic EPS
from potential ordinary shares that would have to be issued, if all loan - 144,640,518
notes, convertible at the discretion of the noteholder, converted at the
beginning of the period or at the inception of the instrument, whichever is
later
Weighted average number of ordinary shares of £0.0001 in issue, including 939,293,986 824,466,766
potential ordinary shares, used for diluted EPS
2021 2020
(Loss)/earnings per share - basic (0.18 pence) 0.76 pence
(Loss)/earnings per share - fully diluted (0.18 pence) 0.64 pence
At 30 June 2021, the effect of all the instruments (fully vested and in the
money) is anti-dilutive as it would lead to a further reduction of loss per
share, therefore, they were not included into the diluted loss per share
calculation.
Options and warrants, that could potentially dilute basic EPS in the future,
but were not included in the calculation of diluted EPS for the periods
presented:
2021 2020
Share options granted to employees - either not vested and/or out of the money 63,320,000 48,320,000
Number of warrants given to shareholders as a part of placing equity 380,197,618 101,740,195
instruments - out of the money
Total number of contingently issuable shares, that could potentially dilute 443,517,618 150,060,195
basic earnings per share in future, and anti-dilutive potential ordinary
shares, that were not included into the fully diluted EPS calculation
There were no ordinary share transactions such as share capitalisation, share
split or bonus issue after 30 June 2021, that could have changed the EPS
calculations significantly, if those transactions had occurred before the end
of the reporting period.
11. Investments in Subsidiaries
Company 2021 2020
£ £
Cost
At 1 July 20 20
Investment in subsidiaries 20 -
At 30 June 40 20
Impairment
At 1 July (1) (1)
Charge in the year - -
At 30 June (1) (1)
Net book value 39 19
As at 30 June 2021 and 30 June 2020, the Company held interests in the
following subsidiary companies:
Company Country of Class Proportion Proportion Nature of business
registration Held Held
At 30 June 2021 At 30 June 2020
Red Rock Australasia Pty Ltd Australia Ordinary 50,1% 100% Mineral exploration
RedRock Kenya Ltd Kenya Ordinary 87% 87% Mineral exploration
RRR Kenya Ltd Kenya Ordinary 100% 100% Mineral exploration Natural resources
Red Rock Resources Inc* USA Ordinary 100% 100%
Red Rock Resources (HK) Ltd Hong Kong Ordinary 100% 100% Holding company
Red Rock Resources Congo S.A.U. DRC Ordinary 100% 100% Holding company
RRR Coal Ltd UK Ordinary 100% 100% Holding company
Jimano Ltd Cyprus Ordinary 100% - Royalty Holdings
Red Rock Galaxy SA DRC Ordinary 80% - Holding company
* Red Rock Resources Inc incorporated on 12 November 2015 and dissolved on 10
March 2020.
Red Rock Australasia Pty Ltd registered office is c/o Paragon Consultants PTY
Ltd, PO Box 903, Claremont WA, 6910, Australia.
RedRock Kenya Ltd registered office is PO Box 9306 - 003000, Nairobi, Kenya.
RRR Kenya Ltd registered office is PO Box 9306 - 00300, Nairobi, Kenya.
Red Rock Resources Inc registered office is Corporation Trust Center, 1209
Orange Street, Wilmington, New Castle County, Delaware 19801, United States of
America.
Red Rock Resources (HK) Ltd registered office is Suites 1601-1603, Kinwick
Centre, 32 Hollywood Road, Central, Hong Kong.
Red Rock Resources Congo S.A.U. registered office is Boulevard Du 30 Juin et
Avenue Batetela, Immeuble Crown Tower, 5 Eme Niveau, Local 504, Gombe,
Kinshasa.
RRR Coal Ltd registered office is Salisbury House, London Wall, London EC2M
5PS.
Jimano Ltd registered office Strovolou, 77 Strovolos Center, 4(th) Floor
Office 401, Nicosia, Cyprus
Red Rock Galaxy SA office is 1320 Av Meteo 2 Q/Meteo C/Lumbumbashi, DRC
12. Investments in Associates and Joint Ventures
Group Company
2021 2020 2021 2020
£'000 £'000 £'000 £'000
Cost
At 1 July 1,805 1,805 1,668 1,668
Additions during the year 1 - 1 -
At 30 June 1,806 1,805 1,669 1,668
Impairment
At 1 July (221) (221) (3) (3)
Profit/(loss) during the year - - - -
At 30 June (221) (221) (3) (3)
Net book amount at 30 June 1,585 1,584 1,666 1,665
The Company, at 30 June 2021 and at 30 June 2020, had significant influence by
virtue other than shareholding over 20% over Mid Migori Mining Company Ltd.
Company Country of Class of Percentage of Accounting year ended
incorporation shares held issued capital
Mid Migori Mining Company Limited Kenya Ordinary 15.00% 30 September 2020
Summarised financial information for the Company's associates and joint
ventures, where available, is given below:
For the year as at 30 June 2021:
Company Revenue Loss Assets Liabilities
£'000 £'000 £'000 £'000
Mid Migori Mining Company Limited - - 2,559 (2,623)
For the year as at 30 June 2020:
Company Revenue Profit Assets Liabilities
£'000 £'000 £'000 £'000
Mid Migori Mining Company Limited - - 2,559 (2,623)
Mid Migori Mining Company Ltd
The Company owns 15% of the issued share capital of Mid Migori Mining Company
Ltd ("MMM"), incorporated in Kenya. The Company has entered into agreements
under which it manages MMM's development projects and has representation on
the MMM board. In accordance with IAS 28, the involvement with MMM meets the
definition of significant influence and, therefore, has been accounted for as
an associate (note 1.5).
VUP Musonoi Mining SA
On 2 March 2019, Vumilia Pendeza S.A. ("VUP") and Bring Minerals S.A.U.
("B.Min"), the joint venture partners, Red Rock Resources Congo S.A.U.
("RRRC"), a wholly owned local subsidiary of the Company, signed the "Statutes
of VUP Musonoi Mining SA" ("VMM S.A."), the joint venture company
(incorporated in the Democratic Republic of Congo) through which the JV
Project will be pursued. RRRC owns 50.1% of VMM S.A, however, the entity is
operated jointly and managed by the board of Musonoi Mining S.A. with no party
classified as having formal control. The Company announced on 16 November
2021 that it had served an Ordonnance de Saisie Conservatoire (precautionary
attachment) order on VUP and taken other measures locally to protect its
interests as relates to this joint venture.
Mid Migori VUP Musonoi Mining SA Total
Mining Company £'000 £'000
Limited
£'000
Cost
At 1 July 2020 1,082 583 1,665
Additions during the year 1 - 1
At 30 June 2021 1,083 583 1,666
Impairment and losses during the year
At 1 July 2020 (81) - (81)
The Group's share of profit/(loss) during the year - - -
At 30 June 2021 (81) - (81)
Carrying amount
At 30 June 2021 and 30 June 2020 1,002 583 1,585
13. Exploration Assets
Group and Company 2021 2020
£'000 £'000
At 1 July 11,858 235
Additions 1,657 116
Amounts payable under earn-in agreement - 2,028
Reclassification from non-current financial assets - 9,479
At 30 June 13,515 11,858
Exploration assets were capitalised:
· For the Galaxy (DRC) project since 17 October 2018, when
exploration commenced at the project license in the DRC; and
· For the VUP (DRC) project since 22 November 2018, when the joint
venture agreement was finalised.
Under a 2018 agreement with MMM partner Kansai Mining Corporation Ltd, in the
event of a renewal or reissue of licenses, covering the relevant assets, the
Company was within three months to make further payment of US$2.5 million
(£2.028 million) to Kansai Mining Corporation Ltd. For further details of the
payments see note 25.
Management have considered the recoverability of this asset and have
considered the recent announcement regarding the restoration of the Kenyan
gold licenses as well as the potential to complete a transaction, involving
these assets and considers the likely proceeds from such a transaction would
exceed the value of the exploration property.
14. Financial Instruments with Fair Value Through Other Comprehensive
Income (FVTOCI)
Group Company
2021 2020 2021 2020
£'000 £'000 £'000 £'000
Opening balance 2,755 4,210 1,711 3,163
Additions 143 146 143 146
Disposals (401) (795) (697) (853)
Change in fair value (742) (806) (379) (685)
At 30 June 1,755 2,755 778 1,771
Market Value of Investments
The market value as at 30 June of the listed and unlisted investments was as
follows:
Group Company
2021 2020 2021 2020
£'000 £'000 £'000 £'000
Quoted on London AIM 562 146 562 146
Quoted on other foreign stock exchanges 1,019 2,471 42 1,487
Unquoted investments at fair value 174 138 174 138
1,755 2,755 778 1,771
Jupiter Mines Limited
During the reporting year, Jupiter Mines Limited has made distributions
recognised as dividends and included into the Dividend line in the
Consolidated Income Statement in the amount of £0.126 million (2020: £0.419
million).
At 30 June 2021, Red Rock retains a 0.53% stake in the share capital of
Jupiter Mines Limited (2020:0.81%).
Elephant Oil Ltd
Following discussions with the management team of Elephant Oil Ltd and
internal analysis, conducted on the Company's projects and prospects for
onshore oil exploration activities in Benin, the fair value of the investment
held is £173,866 (2020: £137,500).
Corcel Plc
During the reporting year, the Company sold 3,383,633 shares in Corcel Plc to
maintain the Company's working capital. Gain on sale of these shares
recognised in the Statement of Other Comprehensive Income amounted to
£65,606.
Juno Minerals Limited
At 30 June 2021, Red Rock retains a 0.29% stake in the share capital of Juno
Minerals Limited (2020:nil).
Details of the fair value measurement hierarchy are included in Note 23.
15. Financial Instruments with Fair Value Through Profit and Loss
Group and Company 30 June 30 June
2021 2020
£'000 £'000
Warrants in Soma Gold Corp. ordinary shares - 3
- 3
At 30 June 2021, the Company was holding no warrants in Soma Gold Corp.
(formerly Para Resources Inc.) (2020: 232,500). The warrants held in Soma Gold
Corp expired on 4 June 2021.
Warrant exercise price Number of warrants Grant date Expiry date Fair value of individual warrant
CAD CAD
0.30 232,500 4 June 2018 4 June 2021 0.024
The following information is relevant, in the determination of the fair value
of the warrants, granted during the year:
Valuation model Black-Scholes model
Warrant exercise price, CAD$ 0.30
Weighted average share price at valuation date, CAD$ 0.25
Weighted average contractual life, years 0.93
Expected volatility, % 160%
Expected dividend growth rate, % 0
Risk-free interest rate (Canadian Government three-year bond), % 0.158
Calculation of volatility involves significant judgement by the Directors and
it is based on the Para Resources Inc trading data, directly preceding the
grant date.
16. Cash and Cash Equivalents
Group 30 June 30 June
2021 2020
£'000 £'000
Cash in hand and at bank 457 53
457 53
For the purpose of the statement of cash flows, cash and cash equivalents
comprise cash at bank and in hand.
Company 30 June 30 June
2021 2020
£'000 £'000
Cash in hand and at bank 366 32
366 32
Credit Risk
The Group's exposure to credit risk, or the risk of counterparties defaulting,
arises mainly from notes and other receivables. The Directors manage the
Group's exposure to credit risk by the application of monitoring procedures on
an ongoing basis. For other financial assets (including cash and bank
balances), the Directors minimise credit risk by dealing exclusively with high
credit rating counterparties. The Company defines default through a
framework of qualitative "unlikeliness to pay" with a more objective 90 days
past due timeline. The qualitative criteria allows the Company to identify
exposure early on in the process, with the 90 day past due limit providing a
clear final metric.
Credit Risk Concentration Profile
The Group's receivables do not have significant credit risk exposure to any
single counterparty or any group of counterparties, having similar
characteristics. The Directors define major credit risk as exposure to a
concentration exceeding 10% of a total class of such asset.
The Company maintains its cash reserves in Coutts & Co, which maintains an
A-1 credit rating from Standard & Poor's.
17. Non-Current Receivables
Group Group Company Company
2021 2020 2021 2020
£'000 £'000 £'000 £'000
MFP sale proceeds 1,344 1,432 1,341 1,429
1,344 1,432 1,341 1,429
The Mineras Four Points ("MFP") sale proceeds represent the fair value of the
non-current portion of the deferred consideration receivable for the sale of
MFP. The fair value was estimated based on the consideration offered by the
buyer adjusted to its present value based on the timing for which the
consideration is expected to be received. The most significant inputs are the
offer price per tranches, discount rate and estimated royalty stream. The
estimated royalty stream takes into account current production levels,
estimates of future production levels and gold price forecasts.
18. Other Receivables
Group Company
2021 2020 2021 2020
£'000 £'000 £'000 £'000
Current trade and other receivables
Prepayments 42 17 42 17
Related party receivables:
- due from subsidiaries - - 162 327
Short-term loan to related party:
- due from a Director of a JV partner 85 37 85 37
Other receivables 272 490 76 334
Total 399 544 365 715
19. Trade and Other Payables
Group Company
2021 2020 2021 2020
£'000 £'000 £'000 £'000
Non-current liabilities
Trade and other payables 119 7 - -
Short term borrowings 731 - 731 -
Total non-current liabilities 850 7 731 -
Current liabilities
Trade payables 835 1,042 803 1,013
Accruals 240 273 240 273
Due to Partners in associate (note 26) - 2,029 - 2,029
Due to key management - 1 - 1
Total trade and other payables 1,075 3,345 1,043 3,316
Intra-group borrowings - - 1,079 276
Short-term borrowings 969 1,078 27 925
Total current liabilities 2,044 4,423 2,149 4,517
During the year, on 6 November 2020, the Company's 100% owned subsidiary, RRR
Coal Ltd, refinanced its existing loan facility with Riverfort Global
Opportunities PCC Limited and YA II PN Ltd, increasing the total amount
available for draw-down to USD 2.0 million, and drawing down an initial gross
amount of USD 1.0 million with additional tranches available at the lenders'
absolute discretion. The notes are secured on 6,302,000 shares in Jupiter
Mines Limited as well as 20,000,000 shares in Power Metal Resources Plc, which
were transferred from the Company to an escrow account for the duration of the
loan as well as by a corporate guarantee, executed by Red Rock Resources
Plc. The notes carry an interest rate of 10% and come with a 7.5%
implementation fee and are repayable over a six-month period, starting in June
2021.
20. Share Capital of the Company
The share capital of the Group and the Company is as follows:
Authorized, Issued and fully paid 2021 2020
£'000 £'000
1,216,708,801 (2020: 696,767,452) ordinary shares of £0.0001 each 122 70
2,371,116,172 deferred shares of £0.0009 each 2,134 2,134
6,033,861,125 A deferred shares of £0.000096 each 579 579
As at 30 June 2,835 2,783
Movement in ordinary shares Number Nominal
£'000
As at 30 June 2019 - ordinary shares of £0.0001 each 676,049,662 68
Issued 10 March 2020 at 0.6 pence per share (non-cash, settlement for DRC 6,000,000 1
interests)
Issued 13 May 2020 at 0.145 pence per share (non-cash, SIP) 14,717,790 1
As at 30 June 2020 - ordinary shares of £0.0001 each 696,767,452 70
Issued 28 Sep 2020 at 0.8 pence per share (cash) 125,000,000 13
Issued 18 Nov 2020 at 0.7 pence per share (non-cash, Kansai settlement for 3,571,429 -
MMM)
Issued 14 Dec 2020 at 0.6 pence per share (non-cash, convertible loan note 42,493,333 4
conversion)
Issued 18 Dec 2020 at 0.6 pence per share (non-cash, convertible loan note 34,313,378 3
conversion)
Issued 22 Dec 2020 at 0.6 pence per share (non-cash, convertible loan note 70,466,665 7
conversion)
Issued on 12 Feb 2021 at 1.05 pence per share (cash) 95,238,095 10
Issued on 22 Mar 2021 at 1.05 pence per share (non-cash, Kansai settlement) 101,550,000 10
Issued on 9 Apr 2021 at 0.75 pence per share (cash, exercise of warrants) 980,392 -
Issued on 12 Apr 2021 at 1 pence per share (non-cash, SIP) 1,800,000 -
Issued on 12 Apr 2021 at 0.155 pence per share (non-cash, SIP) 13,768,254 1
Issued on 15 Apr 2021 at 0.75 pence per share (cash, exercise of warrants) 1,838,235 -
Issued on 19 Apr 2021 at 0.75 pence per share (cash, exercise of warrants) 980,392 -
Issued on 20 Apr 2021 at 0.75 pence per share (cash, exercise of warrants) 980,392 -
Issued on 4 Jun 2021 at 0.75 pence per share (cash, exercise of warrants) 26,960,784 3
As at 30 June 2021 - ordinary shares of £0.0001 each 1,216,708,801 122
Ordinary shares represent the Company's basic voting rights and reflect the
equity ownership of the Company. Ordinary shares carry one vote per share and
each share gives equal right to dividends. These shares also give right to the
distribution of the Company's assets in the event of winding-up or sale.
Subject to the provisions of the Companies Act 2006, the deferred shares may
be cancelled by the Company, or bought back for £1 and then cancelled. The
deferred shares are not quoted and carry no rights whatsoever.
Warrants
At 30 June 2021, the Company had 380,197,618 warrants in issue (2020:
101,740,195) with a weighted average exercise price of £0.0015 (2020:
£0.0087). Weighted average remaining life of the warrants, at 30 June 2021,
was 582 days (2020: 631 days). All the warrants were issued by the Group to
its shareholders in the capacity of shareholders and, therefore, are outside
of IFRS 2 scope.
Group and Company 2021 2020
number of warrants number of warrants
Outstanding at the beginning of the year 101,740,195 109,552,695
Granted during the period 323,322,618 57,500,000
Exercised during the period (44,865,195) -
Cancelled during the period - (57,500,000)
Lapsed during the period - (7,812,500)
Outstanding at the end of the year 380,197,618 101,740,195
During the year ended 30 June 2021, the Company had the following warrants to
subscribe for shares in issue:
Grant date Expiry date Warrant exercise price, £ Number of warrants
10 Dec 2019 19 Dec 2022 0.009 56,875,000
28 Sep 2020 27 Mar 2023 0.012 137,500,000
6 Nov 2020 6 Nov 2023 0.016 8,000,000
6 Nov 2020 6 Nov 2023 0.024 8,000,000
18 Nov 2020 17 Nov 2023 0.007 71,428,571
12 Feb 2021 12 Feb 2023 0.020 47,619,047
1 Mar 2021 18 Mar 2023 0.020 50,775,000
Total warrants in issue at 30 June 2021 380,197,618
The aggregate fair value, related to the share warrants granted during the
reporting period, was £1,195,797 (2020: £nil).
Capital Management
Management controls the capital of the Group in order to control risks,
provide the shareholders with adequate returns and ensure that the Group can
fund its operations and continue as a going concern. The Group's debt and
capital includes ordinary share capital and financial liabilities, supported
by financial assets (note 23). There are no externally imposed capital
requirements. Management effectively manages the Group's capital by
assessing the Group's financial risks and adjusting its capital structure in
response to changes in these risks and in the market. These responses include
the management of debt levels, distributions to shareholders and share issues.
There have been no changes in the strategy, adopted by management to control
the capital of the Group since the prior year.
21. Reserves
Share Premium
The share premium account represents the excess of consideration, received for
shares issued above their nominal value net of transaction costs.
Foreign Currency Translation Reserve
The translation reserve represents the exchange gains and losses that have
arisen from the retranslation of overseas operations.
Retained Earnings
Retained earnings represent the cumulative profit and loss net of
distributions to owners.
Fair Value Through Other Comprehensive Income Financial Assets Revaluation
Reserve
The available for sale trade investments reserve represents the cumulative
revaluation gains and losses in respect of available for sale trade
investments.
Share-Based Payment Reserve
The share-based payment reserve represents the cumulative charge for options
granted, still outstanding and not exercised.
Warrant Reserve
The warrant reserve represents the cumulative charge for warrants granted,
still outstanding and not exercised.
22. Share-Based Payments
Employee Share Options
In prior years, the Company established employee share option plans to enable
the issue of options as part of the remuneration of key management personnel
and Directors to enable them to purchase ordinary shares in the Company. Under
IFRS 2 "Share-based Payments", the Company determines the fair value of the
options issued to Directors and employees as remuneration and recognises the
amount as an expense in the statement of income with a corresponding increase
in equity.
At 30 June 2021, the Company had outstanding options to subscribe for ordinary
shares as follows:
Options issued Options issued Options issued on Options issued on Total
14 June 2016 13 January 2017 exercisable at 0.8p per share, expiring on 24 August 2020 at 0.2p per share, expiring on 24 August 2020 at 0.25p per share, expiring on
exercisable at 13 January 2023 19 August 2025 19 August 2025
0.45 pence per
share expiring
29 January 2022 Number
Number Number
Number Number
A R M Bell 5,760,000 12,000,000 5,500,000 5,500,000 17,760,000
S Kaintz 4,680,000 11,000,000 2,250,000 2,250,000 15,680,000
S Quinn 900,000 3,000,000 - - 3,900,000
Employees 1,080,000 3,000,000 1,250,000 1,250,000 4,080,000
Total 12,420,000 29,000,000 10,500,000 10,500,000 63,320,000
Company and Group
2021 2020
Number of Weighted Number of Weighted
options average options average
exercise exercise
price price
pence pence
Outstanding at the beginning and the end of the year 48,320,000 0.70 48,320,000 0.70
Options issued in the year 21,000,000 0.225 - -
Options lapsed in the year (6,000,000) 0.80 -
Of them vested and exercisable 63,320,000 0.46 24,160,000 0.70
21,000,000 share options were granted by the Company in the reporting year
(2020: none). The weighted average fair value of each option granted during
the year was £0.002 (2020: nil). The exercise price of options, outstanding
at 30 June 2021, ranged between £0.0020 and £0.0045 (2020: £0.0045 and
£0.008). Their weighted average contractual life was 2.41 years (2020: 2.28
years).
Share-based remuneration expense, related to the share options grant, is
included in the administration expenses line in the Consolidated Income
Statement in the amount of £42,000 (2020: nil).
Share Incentive Plan
In January 2012, the Company implemented a tax efficient Share Incentive Plan,
a government approved scheme, the terms of which provide for an equal reward
to every employee, including Directors, who have served for three months or
more at the time of issue. The terms of the plan provide for:
· Each employee to be given the right to subscribe any amount up
to £150 per month with Trustees, who invest the monies in the Company's
shares ("Partnership Shares");
· The Company to match the employee's investment by contributing
an amount equal to double the employee's investment ("Matching Shares"); and
· The Company to award free shares to a maximum of £3,600 per
employee per annum ("Free Shares").
The subscriptions remain free of taxation and national insurance if held for
five years.
All such shares are held by Share Incentive Plan Trustees and the ordinary
shares cannot be released to participants until five years after the date of
the award.
During the financial year, a total of 13,768,254 Partnership and Matching
Shares were awarded and 1,800,000 Free Shares (2020: 14,717,790 Free,
Partnership and Matching Shares were awarded) with a fair value of £0.00155
for the Partnership and the Matching Shares and £0.01 for the Free Shares
(2020: £0.00145), resulting in a share-based payment charge of £39,341
(2020: £14,227), included in the administration expenses line in the Income
Statement.
23. Financial Instruments
23.1 Categories of Financial Instruments
The Group and the Company hold a number of financial instruments, including
bank deposits, short-term investments, loans and receivables, borrowings and
trade payables. The carrying amounts for each category of financial instrument
are as follows:
30 June Group Group Company Company
2021 2020 2021 2020
£'000 £'000 £'000 £'000
Financial assets
Available for sale financial assets at fair value through OCI
Unquoted equity shares 174 138 174 138
Quoted equity shares 1,581 2,617 604 1,633
Total available for sale financial assets at fair value through OCI 1,755 2,755 778 1,771
Financial assets FVTPL (Para warrants) - 3 - 3
Total financial assets carried at fair value through profit and loss - 3 - 3
Cash and cash equivalents 457 53 366 32
Loans and receivables
Non-current receivables 1,344 1,432 1,950 1,429
Other receivables - current 560 544 365 715
Total loans and receivables carried at amortised cost 1,904 1,976 2,315 2,144
Total financial assets 4,116 4,787 3,459 3,950
Total current financial assets 1,067 601 731 750
Total non-current financial assets 3,099 4,186 2,728 3,200
Financial liabilities
Short-term borrowings, including intra-group 969 1,078 1,106 1,201
Long-term borrowings 731 - 731 -
Trade and other payables, excluding accruals 954 3,346 803 3,317
Total current financial liabilities 2,654 4,424 2,640 4,518
Other Receivables and Trade Payables
Management assessed that fair values of other receivables and trade and other
payables approximate their carrying amounts largely due to the short-term
maturities of these instruments.
Non-Current Receivables
Long-term fixed-rate receivables are evaluated by the Group, based on
parameters such as interest rates, recoverability and risk characteristics of
the financed project. Based on this evaluation, allowances are taken into
account for any expected losses on these receivables.
Loans and Borrowings
The carrying value of interest-bearing loans and borrowings is determined by
calculating present values at the reporting date, using the issuer's borrowing
rate.
The carrying value of current financial liabilities in the Company is not
materially different from that of the Group.
23.2 Fair Values
Financial assets and financial liabilities, measured at fair value in the
Statement of Financial Position, are grouped into three levels of a fair value
hierarchy. The three levels are defined based on the observability of
significant inputs to the measurement as follows:
· Level 1: Quoted (unadjusted) market prices in active markets
for identical assets or liabilities;
· Level 2: Valuation techniques for which the lowest level input,
that is significant to the fair value measurement, is directly or indirectly
observable; and
· Level 3: Valuation techniques for which the lowest level input,
that is significant to the fair value measurement, is unobservable.
The carrying amount of the Company's financial assets and liabilities is not
materially different to their fair value. The fair value of financial assets
and liabilities is included at the amount at which the instrument could be
exchanged in a current transaction between willing parties, other than in a
forced or liquidation sale. Where a quoted price in an active market is
available, the fair value is based on the quoted price at the end of the
reporting period. In the absence of a quoted price in an active market, the
Group uses valuation techniques, that are appropriate in the circumstances,
and for which sufficient data are available to measure fair value, maximising
the use of relevant observable inputs and minimising the use of unobservable
inputs.
The following table provides the fair value measurement hierarchy of the
Group's assets and liabilities.
Group Level 1 Level 2 Level 3 Total
30 June 2021
£'000 £'000 £'000 £'000
FVTOCI financial assets
- Unquoted equity shares - - 174 174
- Quoted equity shares 1,581 - - 1,581
FVTPL (Para warrants) - - - -
Company Level 1 Level 2 Level 3 Total
30 June 2021
£'000 £'000 £'000 £'000
FVTOCI financial assets
- Unquoted equity shares - - 174 174
- Quoted equity shares 604 - - 604
FVTPL (Para warrants) - - - -
Group Level 1 Level 2 Level 3 Total
30 June 2020
£'000 £'000 £'000 £'000
FVTOCI financial assets
- Unquoted equity shares - - 138 138
- Quoted equity shares 2,617 - - 2,617
FVTPL (Para warrants) - - 3 3
Company Level 1 Level 2 Level 3 Total
30 June 2020
£'000 £'000 £'000 £'000
FVTOCI financial assets
- Unquoted equity shares - - 138 138
- Quoted equity shares 1,633 - - 1,633
FVTPL (Para warrants) - - 3 3
23.3 Financial Risk Management Policies
The Directors monitor the Group's financial risk management policies and
exposures and approve financial transactions.
The Directors' overall risk management strategy seeks to assist the
consolidated Group in meeting its financial targets, while minimising
potential adverse effects on financial performance. Its functions include the
review of credit risk policies and future cash flow requirements.
Specific Financial Risk Exposures and Management
The main risks, the Group are exposed to through its financial instruments,
are credit risk and market risk, consisting of interest rate risk, liquidity
risk, equity price risk and foreign exchange risk.
Credit Risk
Exposure to credit risk, relating to financial assets, arises from the
potential non-performance by counterparties of contract obligations that could
lead to a financial loss for the Group.
Credit risk is managed through the maintenance of procedures (such procedures
include the utilisation of systems for the approval, granting and renewal of
credit limits, regular monitoring of exposures against such limits and
monitoring of the financial liability of significant customers and
counterparties), ensuring, to the extent possible, that customers and
counterparties to transactions are of sound creditworthiness. Such monitoring
is used in assessing receivables for impairment.
Risk is also minimised through investing surplus funds in financial
institutions that maintain a high credit rating, or in entities that the
Directors have otherwise cleared as being financially sound.
Other receivables, which are neither past due nor impaired, are considered to
be of high credit quality.
The consolidated Group does have a material credit risk exposure with Mid
Migori Mining Company Ltd, an associate of the Company. See note 1.5,
"Significant accounting judgements, estimates and assumptions" for further
details.
Liquidity Risk
Liquidity risk arises from the possibility that the Group might encounter
difficulty in settling its debts or otherwise meeting its obligations related
to financial liabilities. The Group manages this risk through the following
mechanisms:
· Monitoring undrawn credit facilities;
· Obtaining funding from a variety of sources; and
· Maintaining a reputable credit profile.
The Directors are confident that adequate resources exist to finance
operations for commercial exploration and development and that controls over
expenditure are carefully managed.
Management intend to meet obligations as they become due through ongoing
revenue streams, the sale of assets, the issuance of new shares, the
collection of debts owed to the Company and the drawing of additional credit
facilities.
Market Risk
Interest Rate Risk
The Company is not exposed to any material interest rate risk.
Equity Price Risk
Price risk relates to the risk that the fair value or future cash flows of a
financial instrument will fluctuate because of changes in market prices
largely due to demand and supply factors for commodities, but also include
political, economic, social, technical, environmental and regulatory factors.
Foreign Currency Risk
The Group's transactions are carried out in a variety of currencies, including
Sterling, Australian Dollar, US Dollar, Kenyan and Shilling.
To mitigate the Group's exposure to foreign currency risk, non-Sterling cash
flows are monitored. The Group does not enter into forward exchange contracts
to mitigate the exposure to foreign currency risk as amounts paid and received
in specific currencies are expected to largely offset one another and the
currencies most widely traded in are relatively stable.
The Directors consider the balances, most susceptible to foreign currency
movements, to be financial assets with FVTOCI.
These assets are denominated in the following currencies:
Group GBP AUD USD CAD Other Total
30 June 2021
£ £ £ £ £ £
Cash and cash equivalents 387 29 7 - 34 457
Amortised cost financial assets - Other receivables 254 1 144 - 161 560
FVTOCI financial assets 604 977 174 - - 1,755
Amortised costs financial assets - Non-current receivables - 3 1341 - - 1,344
Trade and other payables, excluding accruals 57 26 699 - 53 835
Short-term borrowings 969 - - - - 969
Group GBP AUD USD CAD Other Total
30 June 2020
£'000 £'000 £'000 £'000 £'000 £'000
Cash and cash equivalents 29 5 19 - - 53
Amortised cost financial assets - Other receivables 243 1 144 - 156 544
FVTOCI financial assets 147 2,470 138 - - 2,755
FVTPL financial assets - warrants - - - 3 - 3
Amortised costs financial assets - Non-current receivables - 3 1,429 - - 1,432
Trade and other payables, excluding accruals 37 26 2,106 866 39 3,074
Short-term borrowings 925 - 153 - - 1,078
Company GBP AUD USD CAD Other Total
30 June 2021
£'000 £'000 £'000 £'000 £'000 £'000
Cash and cash equivalents 361 5 - - - 366
Amortised cost financial assets - Other receivables 204 - 161 - - 365
FVTOCI financial assets 604 - 174 - - 778
Amortised costs financial assets - Non-current receivables - - 1,341 - - 1,341
Trade and other payables, excluding accruals 57 - 693 - 53 803
Short-term borrowings, including intra-group 27 - - - - 27
Company GBP AUD USD CAD Other Total
30 June 2020
£'000 £'000 £'000 £'000 £'000 £'000
Cash and cash equivalents 27 5 - - - 32
Amortised cost financial assets - Other receivables 572 - 144 - - 716
FVTOCI financial assets 147 1,487 138 - - 1,772
FVTPL financial assets - warrants - - - 3 - 3
Amortised costs financial assets - Non-current receivables - - 1,429 - - 1,429
Trade and other payables, excluding accruals 37 - 2,106 866 36 3,045
Short-term borrowings, including intra-group 925 - 276 - - 1,201
Exposures to foreign exchange rates vary during the year, depending on the
volume and nature of overseas transactions.
24. Reconciliation of Liabilities Arising from Financing Activities and
Major Non-Cash Transactions
Group 30 June 2020 Cash flow loans received Cash flow principal re-payment Cash flow Non-cash flow Forex movement Non-cash flow -Conversion Non-cash flow Interest and arrangement fee accreted Non-cash flow 30 June 2021
Interest paid Introducers fee accrued
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Loan from institutional investors 153 878 (27) (61) (35) - 34 - 942
Convertible notes 925 - (50) (24) - (884) 33 - -
Total 1,078 878 (77) (85) (35) (884) 67 - 942
Company 30 June 2020 Cash flow loans received Cash flow loans re-payment Cash flow Non-cash flow Forex movement Non-cash flow - Conversion Non-cash flow Interest and arrangement fee accreted Non-cash flow 30 June 2021
Interest paid Repayment with Jupiter shares
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Loan from subsidiary RRR Coal 276 1,327 (149) (19) 35 - 75 (466) 1,079
Convertible notes 925 - (50) (24) - (884) 33 - -
Total 1,201 1,327 (199) (43) 35 (884) 108 (466) 1,079
Significant non-cash transactions from financing activities, in relation to
raising new capital, are disclosed in note 20.
Significant non-cash transactions from operating activities were as follows:
· Impairment of other receivables in the amount of £nil (2020:
£0.249 million);
· Income recognised from the reversal of previous impairment in
the amount of £nil (2020: £5.28 million); and
· Income recognised from forgiven creditors in the amount of
£nil (2020: £0.551 million).
25. Significant Agreements and Transactions
The following are the significant agreements and transactions recently
undertaken having an impact in the year under review. For the sake of
completeness and of clarity, some events after the reporting year may be
included here and in note 27.
Kenya Licensing
On 17 August 2020, the anticipated renewals of Prospecting Licenses
PL/2018/0202 and PL/2018/0203 (formerly SPLs 122 and 202) had been received
for a period of three years from 2 August 2020.
Performance Option Award
On 24 August 2020, the Company announced the grant of 21,000,000 performance
options to Directors and key staff, representing in aggregate 3.01% of the
existing share capital of the Company, split between two pools of 10,500,00
performance options at a price of £0.002 per share and £0.0025 per share A
pool of 6,000,000 options has been created for distribution at the Board's
discretion to key consultants and advisors.
Option over Slovak Gold Assets
On 7 September 2020, the Company announced that it had entered into an option
over former gold and silver mining and exploration assets at Zlata Bana,
Slovakia. A EUR 10,000 payment was made for a due diligence period to 21
September 2020. Red Rock then made a payment EUR 23,000 in order to acquire
a 50% interest in the Zlata Bana License, covering an area of approximately 12
sq km. Upon exercise of the option, Red Rock would acquire a 50% interest in
the other assets, including interests in land and buildings, vehicles and
mining equipment, a permit over a mineral stockpile and mining information and
data. The consideration, for exercise of the option, would be the issue upon
the execution of documentation to transfer the interest in the assets
("Transfer") of EUR 250,000 of new Red Rock shares at an issue price equal
to the prior 5 day average VWAP. A further issue of EUR 100,000 of new Red
Rock shares would occur upon completion of the process of Transfer, at an
issue price per share equal to the 5 day prior average VWAP. A Joint Venture
will be established between Red Rock and Mr Lubomir Konkol. Red Rock would be
responsible for certain expenditures ("Committed Expenditure") of the Joint
Venture in the period after execution of the option, which was expected to
amount to not less that EUR 100,000 in 2020. Following due diligence, the
option was not exercised.
Update on Jupiter Mines Limited Dividend and Iron Ore Spin Off
On 7 September 2020, the Company announced that the Board of Jupiter Mines
Limited had approved the execution of the IPO of its Central Yilgarn Iron Ore
Assets. Jupiter Mines Limited also announced that the Board of Tshipi e Ntle
had declared a dividend to its shareholders of ZAR 330 million for the first
half of FY2021. Jupiter Mines Limited will received ZAR156 million and ZAR25
million in marketing profits.
Financing to Raise £1,000,000
On 28 September 2020, the Company announced that it had raised £1,000,000 by
way of a placing of 125,000,000 new ordinary shares of £0.0001 each at a
price of £0.008 per share with 1 for 1 warrants exercisable at a price of
£0.012 per share for thirty months. 12,500,000 warrants were issued to First
Equity Ltd in part payment for its services as placing agent.
Jupiter Mines Limited - Dividend
On 28 October, Jupiter Mines Limited announced an interim unfranked dividend
for the half year period to 31 August 2020 of AUD 0.01 per ordinary share.
Issue of Shares and Warrants - Kenya Update
On 18 November 2020, the Company announced an update regarding a transaction,
whereby Red Rock acquired the remaining beneficial interest in the project
from a subsidiary of Kansai Mining Corporation Limited. The renewal of the
license triggered a payment of £25,000 to Kansai by the issue of 3,571,429
Red Rock Shares at a price of £0.007 per share. Issuance of a USD 1,000,000
promissory note, payable in 15 months to Kansai. Grant to Kansai of £500,000
of warrants, exercisable for 30 months into shares at £0.007 a share. In
addition, Red Rock announced that it had issued to Riverfort Global
Opportunities PCC Limited and YA II PN Ltd a total of 16,000,000 thirty-six
month warrants, half exercisable at £0.016 and half at £0.024 per share in
consideration of the extension of existing facilities and grant of a six month
repayment holiday on drawn amounts.
Issue of Shares upon Exercise of Convertible Loan Notes
On 14 December 2020, the Company announced that it had received notice of
conversion of £254,960 of convertible loan notes into 42,493,333 shares at a
price of £0.006 per share.
Issue of Shares upon Exercise of Convertible Loan Notes
On 18 December 2020, the Company announced that it had received notice of
conversion of £205,880 of convertible loan notes into 34,313,378 shares at a
price of £0.006 per share.
Right to Acquire Loans - Funding of Arbitration
On 21 December 2020, the Company announced that it had entered into a funding
deed and a deed of agreement to create conditions in which the Company was
able to fund arbitration proceedings and to give Red Rock the right for two
years to acquire the loans of the secured creditors of Vector Resources
Limited, for a consideration equal to their net book cost as the time
acquisition, with half of the consideration to be paid in Red Rock shares at
the then current price. These loans are secured on Vector's primary asset, a
majority holding in the Adidi-Kanga gold project in the Democratic Republic of
Congo. The obligation to date, on Red Rock, was USD 90,000.
Issue of Shares upon Exercise of Convertible Loan Notes
On 22 December 2020, the Company announced that it had received notice of
conversion of £422,800 of convertible loan notes into 70,466,665 shares at a
price of £0.006 per share.
IPO of Juno Minerals Limited
On 21 January 2021, the Company announced that in relation to its investment
in Jupiter Mines Limited, Jupiter Mines Limited had made an announcement on
the ASX, detailing the demerger and initial public offering of its Central
Yilgam Iron Ore Assets, through a newly created company, Juno Minerals
Limited. Jupiter Mines Limited and Juno Minerals Limited had lodged a notice
of meeting and a prospectus respectively.
Financing to Raise £1,000,000
On 12 February 2021, the Company announced that it had raised £1,000,000 by
way of a placing of 95,238,095 new ordinary shares of £0.0001 each in the
Company at a price of £0.0105 per share. The placing was carried out through
Monecor (London) Limited, trading as ETX Capital. The placing was conditional
on admission of shares to trading on AIM. The Company indicated that it would
seek approval at a General Meeting for the issue of non-transferable warrants
with a life of two years and an exercise price of £0.02 to be issued to
subscribers to the placing on the basis of one warrant for each two placing
shares.
Announcement by Jupiter Mines Limited
On 18 February 2021, the Company announced that in relation to its investment
in Jupiter Mines Limited, Jupiter Mines Limited had announced that the Board
of Tshipi é Ntle Manganese Mining Proprietary Limited has declared a final
dividend to its shareholders of
ZAR 1.1 billion for FY2021. Jupiter will receive ZAR 521.5 million
(approximately AUD 46.1 million; net of withholding tax). Jupiter Mines
Limited will also receive ZAR 30.6 million (approximately AUD 2.7 million) in
marketing profits.
Australian JV - Start of IPO Process and Update
On 1 March 2021, the Company announced that it had begun the Canadian IPO
process for its 50.1% owned subsidiary Red Rock Australasia Pty Ltd with the
appointment of legal counsel in Canada. Following the grant of the first three
licenses, announced on 2 February 2021, a further seven applications are at an
advanced stage of processing. The Company further noted that a new application
was made for a 227 sq km EL 45/5859 in Western Australia, which will be
subject to a ballot between Red Rock Australasia Pty Ltd and Rumble Resources
Limited.
Completion of Purchase - Conditional Issue of Shares and Warrants
On 1 March 2021, the Company announced, that further to its announcement of 18
November 2020, 17 August 2020 and 31 December 2020, the terms of the
fulfilment of its remaining obligations to Kansai Mining Corporation Ltd under
the transaction, announced on 15 June 2018, whereby Red Rock was to acquire
the remaining beneficial interest in the Mikei gold project in Kenya from a
subsidiary of Kansai, following the renewal of the project licenses.
The Company has paid USD 1,000,000 of the USD 2,500,000 payment obligation by
paying USD 1,000,000 in cash and Kansai has elected to receive the balance of
the USD 1,500,000 in the form of an issue of 101,550,000 new ordinary shares
of £0.0001 in the Company at a price of £0.0105 per share to Kansai. The
issue of shares was conditional on the approval of Red Rock shareholders. At
the same time, Kansai has agreed to sell 52,437,048 shares to be issued to it
to a number of substantial private investors in a transaction arranged by
Bespoke Capital Solutions Limited. The Company will seek approval at a General
Meeting for the issue of the shares, required under the transaction and for
the issue of non-tradeable warrants with a life of two years and an exercise
price of £0.02 to be issued to Kansai or its nominees on the basis of one
warrant for each two shares issued in the transaction.
Completion of Purchase
On 22 March 2021, the Company announced that following fulfilment of the
shareholder approval condition the Company has now issued the 101,550,000 new
ordinary shares of £0.0001 in the Company at a price of £0.0105 per share
due to Kansai Mining Corporation Ltd or its nominees in settlement of the
acquisition of Kansai's remaining beneficial interest in the Mikei gold
project in Kenya. Non-tradeable warrants, with a life of two years and an
exercise price of £0.02, will also now be issued to the places, in the share
placing, announced on 11 February 2021, and to Kansai or its nominees, on the
basis of one warrant for every two shares issued under the placing, and one
warrant for every two shares issued under the purchase of the project.
Exercise of Warrants
On 9 April 2021, the Company announced that it had received notice to exercise
warrants over 980,392 warrants into shares at an exercise price of £0.0075
per share.
On 15 April 2021, the Company announced that it had received notice to
exercise warrants over 1,838,235 warrants into shares at an exercise price of
£0.0075 per share.
On 19 April 2021, the Company announced that it had received notice to
exercise warrants over 980,392 warrants into shares at an exercise price of
£0.0075 per share.
On 20 April 2021, the Company announced that it had received notice to
exercise warrants over 980,392 warrants into shares at an exercise price of
£0.0075 per share.
On 3 June 2021, the Company announced that it had received notice to exercise
warrants over 26,960,784 warrants into shares at an exercise price of £0.0075
per share.
26. Related Party Transactions
· The costs incurred on behalf of the Company by Corcel Plc were
deemed as a related party for the 30 June 2020 year end. In the current year
Corcel Plc is no longer deemed a related party. Amounts are invoiced at each
month end and settled on a quarterly basis. By agreement, the Company pays
interest at the rate of 0.5% per month on all balances outstanding at each
month end until they are settled. The total charge for the year was £nil
(2020: £21,589). Of this, £nil was outstanding at 30 June 2021 (2020:
£16,549).
· The costs incurred by the Company, on behalf of Corcel Plc,
were £nil (2020: £25,562) in relation to shared services during the year.
Of this, £nil was outstanding at 30 June 2021 (2020: £7,962).
· Power Metal Resources Plc are the Company's partner and holder
of 49.9% in the Company's 50.1% owned subsidiary Red Rock Australasia Pty Ltd
("RRAL"). The costs incurred by the Company on behalf of Power Metal Resources
Plc were £76,422 (2020: £9,918) in relation to shared costs paid on behalf
of RRAL during the year. Of this, £6,000 was outstanding at 30 June 2021
(2020: £nil).
· Related party receivables and payables are disclosed in notes
18 and 19.
· The Company held 25,000,000 shares (2.18%) in Power Metal
Resources Plc as at 30 June 2021 (2020: 25,000,000 (6.89%)).
· The direct and beneficial interests of the Board in the shares
of the Company as at 30 June 2021 and at 30 June 2020 are shown in the
Director's Report.
· The key management personnel are the Directors and their
remuneration is disclosed within note 9.
27. Significant Events After the Reporting Period
On 26 July 2021, the Company announced the appointment to the Board of Alex
Borrelli as an independent Non-Executive Director with immediate effect.
On 29 September 2021, the Company announced that it had disposed of a
substantial part of its remaining holding in Jupiter Mines Limited through
market sales at an average price of AUD 0.304 per share for proceeds of AUD
2,327,052.70 (approximately £1,239,489.34). The Company retains 5,870,693
Jupiter Mines Limited shares, with the current share price of Jupiter Mines
Limited at AUD 0.225, which is 26% below the average price of Red Rock's
recent sales.
On 18 October 2021, the Company announced that it had made applications for
five exploration permits through a wholly owned Cote d'Ivoire subsidiary
LacGold Resources SARL. The five licenses area totalling 1,907.07 square km
were selected, based on a detailed and comprehensive screening and ranking of
possible target areas.
On 7 December 2021 the Company announced that it had exchanged its shares in
Red Rock Australasia for 50.1% of the newly formed New Ballarat Gold
Corporation Plc, a UK public company which now owned 100% of RRAL and which
would be the vehicle for a possible public listing in London.
28. Commitments
As at 30 June 2021, the Company had entered into the following commitments:
· Exploration commitments: On-going exploration expenditure is
required to maintain title to the Group mineral exploration permits. No
provision has been made in the Financial Statements for these amounts as the
expenditure is expected to be fulfilled in the normal course of the operations
of the Group.
· On 26 June 2015, the Company announced an agreement with Kansai
Mining Corporation Ltd, pursuant to which Red Rock's farm in agreement was
replaced by agreements, under which any interest in the Migori Gold Project or
the other assets of Mid Migori Mines, that may be retained or granted to Mid
Migori Mines or Red Rock, would be shared 75% to Red Rock and 25% to Kansai.
Kansai's interest was to be carried up the point of an Indicated Mineral
Resource of 2m oz of gold. Red Rock was to have full management rights of
the operations and of the conduct of legal proceedings on behalf of both Mid
Migori Mines and itself. On 15 June 2018, Red Rock announced a revision to
this agreement. The effect of the revision is that Kansai exchanged its 25%
carried interest under the 2015 agreement for a USD 50,000 payment, leaving
Red Rock with a 100% interest. In the event of a renewal or reissue of
licenses, covering the relevant assets, the Company will within three months
make further payments, subject to such renewal or reissue not being on unduly
onerous terms, as follows: (1) USD 2.5 million payable in cash; (2) a USD 1
million promissory note, payable 15 months after issue; and (3) £0.500
million of warrants into Red Rock shares at a price 20% above their average
closing price on the three trading days prior to issue. This agreement was
further amended on 21 December 2020 through agreement with Kansai to pay USD 1
million, of which USD 0.5 million has been paid on 24 December 2020, and to
defer payment of USD 1.5 million until 29 January 2021, at which time the
balance could be paid in cash or shares at Kansai's discretion, with any
shares to be issued at the closing price of the Company's shares on the 21 of
December 20201.
· On 1 March 2021, the Company has paid USD 1,000,000 of the USD
2,500,000 payment obligation by paying USD 1,000,000 in cash
and Kansai has elected to receive the balance of USD 1,500,000 in the form
of an issue of 101,550,000 new ordinary shares of £0.0001 in the Company
("Shares" and "Share Payment") at a price of £0.0105 per Share to Kansai.
The Issue of Shares for the Share Payment is conditional on the approval of
Red Rock shareholders and was subsequently approved.
· On 23 November 2021, the Company entered into a new lease
agreement for office space with WeWork Aldwych House. The initial lease runs
from 1 January 2022 through 30 June 2022 and is non-cancellable during this
period. Thereafter, the lease can be terminated by giving one full calendar
month notice.
29. Control
There is considered to be no controlling party.
30. These results are audited, however the information does not constitute
statutory accounts as defined under section 434 of the Companies Act 2006.
The consolidated statement of financial position at 30 June 2021 and the
consolidated income statement, consolidated statement of comprehensive income,
consolidated statement of changes in equity and the consolidated cash flow
statement for the year then ended have been extracted from the Group's 2021
statutory financial statements. Their report was unqualified and contained
no statement under sections 498(2) or (3) of the Companies Act 2006. The
financial statements for 2021 will be delivered to the Registrar of Companies
by 31 March 2022.
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