REG - Rockfire Resources - Annual Results for the year ended 31 December 2021
30/05/2022 15:15
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RNS Number : 2822N Rockfire Resources PLC 30 May 2022
The information contained within this announcement is deemed by the Company to
constitute inside information pursuant to Article 7 of EU Regulation 596/2014
as it forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 as amended.
30 May 2022
Rockfire Resources plc
("Rockfire" or the "Company")
Annual Results for the year ended 31 December 2021
Rockfire Resources plc (LON: ROCK), the gold and base metal exploration
company, announces its audited results for the year ended 31 December 2021.
For further information on the Company, please
visit www.rockfireresources.com (http://www.rockfireresources.com/) or
contact the following:
Rockfire Resources plc: info@rockfireresources.com
David Price, Chief Executive Officer
Allenby Capital Limited (Nominated Adviser & Broker) Tel: +44 (0) 20 3328 5656
John Depasquale / George Payne (Corporate Finance)
Matt Butlin / Kelly Gardner (Sales and Corporate Broking)
Yellow Jersey PR rockfire@yellowjerseypr.com
Sarah Hollins / Henry Wilkinson Tel: +44 (0) 20 3004 9512
Notes to Editors
Rockfire Resources plc (LON: ROCK) is a mineral exploration company with a
portfolio of 100%-owned gold and copper projects in Queensland Australia and a
high-grade zinc deposit in Greece.
§ The Molaoi deposit in Greece has a JORC resource of 210,000 tonnes of zinc,
39,000 tonnes of lead and 3.5 million ounces of silver.
§ The Plateau deposit in Queensland has a JORC resource of 130,000 ounces of
gold and 800,000 ounces of silver.
§ The Copperhead deposit in Queensland has a JORC resource of 80,000 tonnes
of copper, 9,400 tonnes of molybdenum and 1.1 million ounces of silver.
CHAIRMAN'S STATEMENT
Throughout 2021, Rockfire made solid progress by increasing the JORC resources
of its exploration projects in Australia. The Company focussed its efforts on
delivering an upgraded JORC resource at its 100% owned Plateau gold project in
Queensland, and we were delighted to achieve that outcome with a resource of
208,000 ounces of gold.
In addition to the gold resource at Plateau, 2021 saw drilling focus on the
Copperhead porphyry project in Queensland, with the aim of delineating a
maiden copper resource for the Company. Drilling progressed throughout most of
the field season and concluded with the onset of the wet season in early
December 2021. The turnaround of assay results was impacted by slow laboratory
throughput rates, creating unfortunate delays in the return of analytical
results.
During the year, Rockfire participated in an Open International Tender for the
Molaoi zinc project in Greece. On 8 March 2022, Rockfire announced the winning
of an Open International Tender for a 30-year licence to explore and mine the
high-grade Molaoi Zn/Pb/Ag deposit, located in the Hellenic Republic of
Greece. Rockfire participated in the tender under a Memorandum of
Understanding with a local Greek company, Hellenic Minerals IKE ("Hellenic"),
the applicant in the tender. Subsequently, Rockfire has now acquired 100% of
the shares in Hellenic. The award of the licence to Hellenic and the
acquisition of Hellenic means that Rockfire owns 100% of the rights in the
project.
Administration
In light of the continued restricted numbers permitted by social distancing
rules, limitations on gatherings, and Covid-19 related protocols, the Company
again held its Annual General Meeting as a virtual meeting. All Board meetings
throughout the year were held remotely, with Directors meeting regularly
online.
Financial review
The income statement for the year shows a loss of £744,953 (2020: loss
£719,987).
On 26 February 2021, the Company announced that it had granted a total of
36,000,000 options to subscribe for ordinary shares in the Company to certain
Directors and employees of the Company as set out below:
Gordon Hart
Chairman
10,000,000
David Price Chief Executive
Officer 10,000,000
Edward Fry Exploration
Manager 10,000,000
Graeme Hogan Company Secretary
6,000,000
The 36,000,000 options are exercisable for a period of three years from the
date of the grant and have an exercise price of 2.1 pence, being a premium of
110% per cent to the closing mid-market share price on 25 February 2021, the
day prior to the announcement of the grant of the options.
Rockfire announced that it had successfully completed a placing of new
ordinary shares in the Company on 6 May 2021, raising gross proceeds of
£850,000. This placing was through the Company's sole broker, Allenby Capital
Limited, and comprised 121,429,200 new ordinary shares of 0.1 pence at a price
of 0.7 pence per share. This represented approximately 12.72 per cent. of the
enlarged issued share capital of the Company at the time and the shares were
subscribed for by a combination of new investors and existing shareholders.
Rockfire's largest shareholder and one of the Company's Non-executive
Directors, Nicholas Walley, subscribed for 6,000,000 shares in this placing,
thereby increasing his holding in the Company to 59,000,000 ordinary shares.
On 26 July 2021, the Company announced that it had successfully raised a
further £1.0 million (before expenses) with an institutional investor,
through a placing of 125,000,000 new ordinary shares of 0.1 pence at a price
of 0.8 pence per share. The placing was arranged by Allenby Capital Limited.
This resulted in the Company's issued ordinary share capital at the time being
1,079,997,653 ordinary shares.
Exploration Review
Lighthouse, Queensland
A resource upgrade at the Plateau gold prospect was announced on 29 January
2021, informing that 208,000 ounces of gold had been delineated at Plateau,
including 53,000 ounces of near-surface gold with an average grade of 1.1 g/t
Au. The deposit continues to expand with ongoing exploration and silver
credits are expected to add to the economics of any future production.
Management sees opportunities for more resources along strike to the east and
west, as well as repetitions of the favourable geological and structural
setting in the immediate vicinity of Plateau.
In March 2021, rock sampling and geological mapping was undertaken to confirm
targets close to Plateau. This work confirmed historical high-grade rock
samples and extended each target by around 100 m in strike. Rocks strongly
anomalous in gold and silver (16.8 g/t Au and 50.4 g/t Ag) have now been
traced for more than 150 m length at the Northwest Breccia. The gold trend
remains open to the east and west.
On 8 April 2021, Rockfire released the results from its preliminary scoping
study at Plateau. Results indicate the potential for a small-scale, open-pit
operation, delivering a range of net positive cash flow outcomes. When
multiple cost and technical scenarios are introduced, Plateau is cash-positive
on a small scale, assuming minimal capital costs, and based on toll treatment
of trucked ore to a nearby processing facility. Work required in the next
exploration phase includes metallurgical test work, infill drilling to close
gaps in the drilling pattern and extension drilling to test areas within the
optimised pit outline with little or no drilling.
Soil sampling at the Company's Bell Rock prospect, which lies approximately 5
km from Plateau, encountered high gold-in-soil values, which were announced on
3 February 2021. The identification of high soil anomalism within the
Lighthouse tenement provides further evidence that Lighthouse is a highly
endowed tenement located between multi-million-ounce operating gold mines.
Bell Rock is a very early-stage exploration prospect with ongoing steps
required including ground magnetics and detailed geological mapping to better
understand the geological setting. At the end of March 2021, the Company
informed investors of highly encouraging rock sample results from Bell Rock,
including one sample of 9.9 g/t Au and 21 g/t Ag. The target remains open to
the east and west.
Copperhead, Queensland
Rockfire's determination to identify large mineral deposits is starting to
bear fruit. The year commenced with a doubling of the Copperhead footprint,
following a helicopter-borne magnetic survey in January 2021. Only a small
portion of the geochemical and geophysical anomalism has been tested by
drilling.
By November 2021, the Company reported that the first drill hole into
Copperhead for more than 50 years hit visible copper veins along its length,
over 500 m downhole. Diamond drilling at Copperhead throughout the year is
interpreted to be in the quartz-sericite-pyrite ("Phyllic") alteration zone,
sitting above a potential main porphyry source.
Although grade remains relatively low, the system continued to expand with
each hole drilled during the drilling campaign. Hole BCH001 encountered a
lengthy interval of 244 m @ 0.20 % CuEq, as well as a more intense zone
of 62 m @ 0.30 % CuEq. Hole BCH002 returned 357 m grading 0.11 % CuEq. All
holes display a reasonably uniform grade distribution, with a peak assay of
2.28 % CuEq.
Molaoi, Greece
An Open International Tender process was in progress for most of 2021 for the
rights to explore and mine the Molaoi zinc deposit in Greece. Hellenic
Minerals IKE ("Hellenic"), a Greek-registered company, with the assistance of
Rockfire, completed the first phase of the process and was awarded "Preferred
Tenderer" status. The second and final phase of the process was also
completed, with Hellenic and Rockfire jointly being confirmed as the winners
of the tender.
The acquisition of the Molaoi project in Greece may represent a
transformational step for Rockfire. On 8 March 2022, Rockfire announced the
winning of an Open International Tender for a 30-year licence to explore and
mine the high-grade Molaoi Zn/Pb/Ag deposit, located in the Hellenic Republic
of Greece. Rockfire participated in the tender under a Memorandum of
Understanding with a local Greek company, Hellenic Minerals IKE ("Hellenic"),
the applicant in the tender. Subsequently, Rockfire has now acquired 100% of
the shares in Hellenic. The award of the licence to Hellenic and the
acquisition of Hellenic means that Rockfire owns 100% of the rights in the
project. Greece has both a proven and active mining industry, as well as a
Government proactive in securing sound investment in its resources sector.
Molaoi has significant development including 173 diamond drill holes, a portal
and a 700 m-long exploration decline, having been extensively diamond drilled
over a strike of approximately 1.5 km. The deposit lies 10 km by road from a
seaport and remains open along strike for an additional 5.5 km to the north
and is open at depth.
Copper Dome, Queensland
During April 2021, a high-resolution helicopter-borne magnetic survey was
flown at Copper Dome, resulting in a significantly larger target than
initially thought. Multiple plumes intruding upwards towards the surface were
identified in the magnetic imagery, with only one of these having been drill
tested to date and returning anomalous copper and gold. This provides the
potential for a much larger mineralised system to be discovered.
Summary
In summary, our team is working hard to build material value in Rockfire. The
Company's enviable portfolio includes:
· JORC resource of 208,000 ounces of gold at Plateau
· JORC resource of 1.5 million ounces of silver at Plateau
· JORC resource of 120,000 tonnes of copper equivalent at Copperhead
· JORC resource of 250,000 tonnes of zinc equivalent at Molaoi, Greece
Material events and reviews since the end of 2021
On 8 March 2022, Rockfire announced the winning of an Open International
Tender for a 30-year licence to explore and mine the high-grade Molaoi
Zn/Pb/Ag deposit, located in the Hellenic Republic of Greece. Rockfire
participated in the tender under a Memorandum of Understanding with a local
Greek company, Hellenic Minerals IKE ("Hellenic"), the applicant in the
tender. On 8 March 2022, Rockfire announced the winning of an Open
International Tender for a 30-year licence to explore and mine the high-grade
Molaoi Zn/Pb/Ag deposit, located in the Hellenic Republic of Greece. Rockfire
participated in the tender under a Memorandum of Understanding with a local
Greek company, Hellenic Minerals IKE ("Hellenic"), the applicant in the
tender. Subsequently, Rockfire has now acquired 100% of the shares in
Hellenic. The award of the licence to Hellenic and the acquisition of Hellenic
means that Rockfire owns 100% of the rights in the project. Molaoi is an
outstanding high-grade zinc deposit, and the addition of the project
strategically complements Rockfire's existing portfolio of precious and base
metal assets.
Achievements to date at Molaoi have been:
· Historical core has been located, sampled and photographed with
results in line with historical results (RNS dated 3 May 2022).
· A JORC resource of 2.1 million tonnes @ 12% Zn Eq. for a total of
250,000 tonnes of Zn Eq. has been announced (RNS dated 23 May 2022)
On 21 March 2022, Rockfire announced a maiden JORC resource of 120,000 tonnes
of copper equivalent at the Company's 100% owned Copperhead Cu-Mo-Ag deposit
in Queensland, Australia. The resource is quoted as 64 million tonnes @ 0.19
% Cu Eq. for 120,000 tonnes of Cu Eq. in the inferred category. The resource
remains open to the north, east, west and at depth, leaving scope for
significant, further resource increases. The copper price remains robust with
the continued strong demand for electric vehicles and green energy, including
wind turbines and solar panels.
Rockfire's Board is delighted with the progress being made by the Group across
its portfolio. We wish to thank all our shareholders for their continued
support as we create and sustain further value in our projects. With gold,
silver, and copper JORC resources and a high-grade zinc asset of quality, sees
opportunity for growth in a time of increasing commodity demand and rising
commodity prices.
I present the Annual Report for Rockfire for the financial year ended 31
December 2021 and look forward to a successful and rewarding 2022 for all our
shareholders.
Gordon Hart
Chairman
27 May 2022
DIRECTORS' BIOGRAPHIES FOR THE YEAR ENDED 31 DECEMBER 2021
Gordon Hart, Chairman
Gordon has over 35 years of experience in the equity capital and financial
advisory markets. He has spent the last 12 years as Managing Director of
Venture Group Equities Pty. Ltd, where he advised on transactions involving
over US$300 million of funding. He is a graduate of the Australian Institute
of Company Directors and has a Graduate Diploma in Corporate Governance.
Gordon brings a wealth of corporate knowledge, equities and finance expertise
and emerging company experience to Rockfire.
David W Price, Chief Executive Officer and Managing Director
David is an experienced geologist and senior executive with over 30 years of
experience in the global mining industry and over 20 years' experience in
securing funding for exploration projects. David is a Fellow of the
Australasian Institute of Mining and Metallurgy (FAusIMM) and is a Competent
Person for Mineral Exploration under the guidelines of the JORC Code.
During his career, David has been involved with many resource projects. He was
Country Manager for Danae Resources during the drill-out and Pre-Approval
Study of the Sappes gold project in Greece. He was the Senior Consulting
Geologist during the drill-out of Australia's second-largest lithium resource
at Earl Grey in Australia.
David has previously held senior roles in both listed and private resource
companies, including CEO of Golden Tiger Mining Limited, CEO of Convergent
Minerals Limited and Managing Director of Millennium Mining Limited.
Ian Staunton, Non-executive Director
Ian has worked in the City of London for more than 40 years in a range of
role, including Audit Partner, Corporate Finance Partner, and Equity Partner
in various accounting firms. He is a retired Fellow of the Institute of
Chartered Accountants in England and Wales and has a Diploma in Corporate
Finance. Having worked as Equity Partner and Head of Capital Markets for
Chantrey Vellacott DFK LLP and a Senior Equity Partner for Moore Stephens
during the last 25 years, Ian provides Rockfire with a strong level of
accounting and audit experience. Such high-level accounting, audit and
compliance capability fulfils Rockfire's ambition to broaden its corporate
skill base and to bring unparalleled experience and expertise from London onto
the board. Ian is the Chairman of the Audit Committee.
Patrick Elliott, Non-executive Director
Pat is an experienced resources and industrial company director. In a career
spanning over 45 years, he has held senior executive positions with
Consolidated Gold Fields (Australia) Limited and Morgan Grenfell Australia
Limited. Pat has an MBA in Mineral Economics from Macquarie University and a B
Comm from the University of New South Wales. He has extensive management
experience in various fields, including manufacturing, mineral exploration,
and oil and gas exploration. Pat is currently Executive Chairman of Argonaut
Resources NL (an ASX-listed copper explorer), Cap-XX Limited and Tamboran
Resources Ltd. He is also a Non-Executive Director of Kirrama Resources
Limited (an unlisted explorer and developer of chromite and manganese projects
in Madagascar).
Nicholas Walley, Non-executive Director
Nicholas has a business background spanning multiple industries, including
agriculture, property, construction, plant hire, food and beverage packaging,
leisure, and charitable work. He has critical skills in logistics,
infrastructure, organisational management and sales.
STRATEGIC REPORT
ACTIVITY REVIEW
Plateau Project, Queensland
The year commenced with an announcement on 29 January of the update of the
JORC gold resource at Plateau in Queensland. The overall gold envelope at
Plateau (grades above 0.2 g/t Au) resulted in an indicated and
inferred mineral resource of 11.4 million tonnes @ 0.6 g/t Au and 4.0 g/t Ag
for a total of 208,278 ounces of gold and 1.5 million ounces of silver.
Within this envelope and using a higher cut-off (grades above 0.5 g/t Au),
the indicated and inferred mineral resource is 3.9 million tonnes @ 1.1 g/t
Au and 6.4 g/t Ag for 131,302 ounces of gold and 800,000 ounces of silver.
Using the same 0.5 g/t Au cut-off, a subset of the mineral resource at shallow
depths (0-100 m) is comprised 81% in the indicated category and 19% in
the inferred category. The near-surface gold resource is 1.4 million tonnes
@ 1.2 g/t Au and 8.8 g/t Ag, for a total of 53,336 ounces of gold and 390,000
ounces of silver.
The mineral resource category and classification has also resulted in an
upgrade of +37% of the gold ounces into the higher
confidence indicated level, using a 0.2 g/t Au cut-off. The mineral resource
remains open along strike and at depth, leaving scope for significant, further
resource increases.
Results from rock chip sampling, comprising 34 samples, were released to the
market on 29 March 2021. Sampling at the "Northwest Breccia" at the Plateau
gold deposit returned high-grade results up to 16.8 g/t Au and 50.4 g/t Ag.
The "Northern Breccia", which lies 250 m north of the Eastern Breccia JORC
gold resource, returned results up to 1.89 g/t Au and 24.2 g/t Ag.
Results from an early but important preliminary scoping study at the Plateau
prospect was announced to the market on 8 April 2021. A modest, net positive
cash flow, ranging from AUD $6.8 million to AUD $19.4 million (GBP £3.7
million to GBP £10.7 million), results from a small-scale, open-pit mine.
The range of anticipated cash flows depends on technical and operational
variables; however, five different scenarios all resulted in positive cash
flow outcomes. Multiple targets within the proposed pit outlines are yet to be
drilled, and the scoping study identified numerous opportunities to increase
gold ounces with additional shallow drilling.
Only the top 70 m was included in the scoping study, yet gold up to 16.9 g/t
Au has been intersected more than 400 m below the surface. Therefore, there is
significant potential to increase the economic outlook of the project based on
continued exploration success at depth.
The study assumed utilisation of one of the nearby existing processing
facilities. There are several processing plants within commercial trucking
distances of Plateau, and for this reason capital costs are deemed to be
minimal for the purpose of this study.
Average mined grades range between 1.26 g/t Au and 1.94 g/t Au from within the
optimised pit outlines, with grade variations depending on the pit shape and
depth. A spot gold price of AUD$ 2,220 (US$ 1,718) per ounce was used, and the
current study excludes any contribution from recovery of silver.
Lighthouse - Regional Targets, Queensland
On 3 February 2021, Rockfire announced soil sampling results from the Bell
Rock prospect, which lies less than 4 km southeast of Plateau. A +300 m long
and +100 m wide coincident gold/copper soil anomaly was identified, with the
highest gold-in-soil value being 1.7 g/t Au (1,700 ppb) and the highest
copper-in-soil value being 605 ppm Cu.
Coincident with the soil anomaly, previous rock sampling recorded a maximum of
23.4 g/t Au and 0.14 % Cu. Elevated gold and copper values extend beyond the
limits of the soil survey area.
Rock chip sampling results from Bell Rock were announced on 31 March 2021.
Rocks returned high-grade gold results including 9.9 g/t, 5.2 g/t, 5.0 g/t
and 4.1 g/t Au. Previous sampling by Rockfire in May 2020 returned
gold-in-rock results up to 23.4 g/t Au and the recent sampling has extended
this anomalism by a further 100 m in length, resulting in a total target
length of 350 m.
For the first time, exploration was conducted at the Otway prospect, located
approximately 4.5 km northwest of Plateau. On 31 March 2021, results from ten
rock chip samples from Otway were announced. Rocks returned highly anomalous
results, including 0.25 % Cu and 0.28 % Co. One rock sample had an elevated
nickel value of 817 ppm Ni, while two other rock samples contain nickel above
100 pm Ni.
The Jeddah prospect is located 2 km southwest of Plateau. In May 2018,
Rockfire announced high-grade continuous rock chip samples at Jeddah,
including 10 m @ 1.68 g/t Au and 8 m @ 1.23 g/t Au. Recent follow-up soil
sampling results were released on 10 February 2021, detailing a cohesive gold
anomaly covering an area of 250 m (east-west) by 150 m (north-south). The
anomaly is defined by a low-order zone of + 10 ppb Au, with a peak value of 62
ppb Au and is open towards the south.
Copperhead Porphyry Project, Queensland
On 6 January 2021, results from a helicopter magnetic survey completed
in December 2020 were announced. The survey doubled the copper target area
at Copperhead, with the copper target now defined with a minimum area of 5 km
east-west x 3 km north-south. Faults and fractures are clearly defined and
correlate well with known copper mineralisation already discovered in streams,
soils, and drilling completed by Carpentaria Exploration in 1972. The
Copperhead target remains open in all directions.
Throughout the year, diamond drilling progressed steadily at Copperhead, and
on 29 November 2021, results from the first diamond hole were announced. Hole
BCH001 is mineralised with visible copper veins for most of its length. A
lengthy interval of 501 m grading 0.14 % Cu Eq. was intersected, with the
drill hole finishing with visible copper in veins. This extensive interval
includes a stronger zone of 244 m @ 0.20 % Cu Eq, as well as a more intense
zone of 62 m @ 0.30 % Cu Eq.
An assay of 2.28 % Cu was encountered at 423 m depth and an assay of 0.50 % Cu
was intersected only 6m from the end of the hole. This announcement stated
that the tonnage potential for Copperhead has been significantly upgraded by
extending copper mineralisation a further 200 m deeper than historical
drilling.
Alteration and visible copper mineralisation in this and subsequent drill
holes indicate that our drilling is occurring in the upper, "Phyllic" levels
of an extensive porphyry copper system.
Drilling results from hole BCH002 were announced on 22 December 2021. This
hole returned 357 m grading 0.11 % Cu Eq., with the drill hole finishing with
visible copper in veins. Within this broad zone, an upper interval of 48 m @
0.21 % Cu Eq. occurs from 139 m downhole depth and a second interval of 32 m
@ 0.20 % Cu Eq. exists from 236 m downhole depth. A peak assay of 1.06 % Cu
Eq. was encountered.
Molaoi Zinc Project, Greece
In 2021, the Greek Government conducted an Open International Tender for
participants to apply for the exploration and mining licence over the Molaoi
zinc project in the Peloponnese region in southern Greece. Rockfire
participated in this tender under a Memorandum of Understanding ("MOU") with a
local Greek company, Hellenic Minerals I.K.E. ("Hellenic"), which is the
applicant in the tender. In December 2021, Hellenic was notified of its status
as one of three "Preferred Tenderers".
Molaoi is a volcanogenic massive sulphide ("VMS") deposit with stacked, folded
lodes and an initial non-JORC mineral estimate dating back to 1985. The
estimate was subsequently upgraded in 1988 following additional drilling by
the Greek Government. More than 170 drill holes, including diamond drilling,
have been drilled into the deposit.
In 1988, an underground portal and a 700m-long exploration decline were
developed by the Greek Government to access the western-most massive sulphide
lodes. The exploration decline was developed to obtain bulk samples for
metallurgical purposes.
Some of the many outstanding drill assay intervals from drilling in the 1980s
include the following examples. Most drilling was diamond drill core.
o 10.45 m @ 10.63% Zn, 1.45% Pb and 62 g/t Ag (Hole AN011 from 79.30 m)
o 15.0 m @ 11.94% Zn, 1.96% Pb and 66 g/t Ag (Hole AN017 from 136.40 m)
o 7.0 m @ 14.96% Zn, 2.13% Pb and 63 g/t Ag (Hole AN028 from 187.00 m)
o 7.0 m @ 19.17% Zn, 2.89% Pb and 76 g/t Ag (Hole B010 from 43.00 m)
o 9.9 m @ 18.06% Zn, 2.87% Pb and 91 g/t Ag (Hole B011 from 184.50 m)
o 2.8 m @ 26.51% Zn, 1.87% Pb and 80 g/t Ag (Hole BGXIII from 57.00 m)
No historical analysis for gold or copper has been undertaken, and Rockfire
intends to analyse for these additional elements.
Only 1.5 km of a strike of more than 6 km has been explored, providing
enormous upside for additional resource expansion. The entire 7 km of strike
is included in the area being applied for. Intermittent historical drilling
has intersected high-grade zinc in most holes drilled along the 7 km of
strike.
Terms of the acquisition of Hellenic
On 8 March 2022, Rockfire announced the winning of an Open International
Tender for a 30-year licence to explore and mine the high-grade Molaoi
Zn/Pb/Ag deposit, located in the Hellenic Republic of Greece. Rockfire
participated in the tender under a Memorandum of Understanding with a local
Greek company, Hellenic Minerals IKE ("Hellenic"), the applicant in the
tender. Subsequently, Rockfire has now acquired 100% of the shares in
Hellenic. The award of the licence to Hellenic and the acquisition of Hellenic
means that Rockfire owns 100% of the rights in the project. As consideration
for the transfer of shares, Rockfire has acquired a 100% shareholding in
Hellenic, with the issue of 50 million new ordinary shares in Rockfire, at a
nominal 1p share price to Georgios Skevas (the sole shareholder of Hellenic)
or his nominee/s.
On achieving a minimum JORC or NI43-101 resource of 400,000 tonnes of
zinc-equivalent metal content, Rockfire will make a 50% cash and 50% share
payment of a total value of £400,000, with shares being issued at a 5%
discount to the 5-day VWAP share price of Rockfire ordinary shares at the time
of the announcement of the JORC, to Mr Georgios Skevas or his nominee/s. It
is expected that this issue will occur within the first three years of
exploration.
A gross Production Royalty on saleable product of 2% will be payable to
Georgios Skevas or his nominee/s following the commencement of commercial
production from the Project. Rockfire shall have the option to acquire the
Production Royalty for a cash consideration of £1,000,000 at any time. If a
commercial zinc mine is deemed feasible, the acquisition of the Royalty is
likely to occur following the first five years of exploration and successful
feasibility/environmental studies. The maximum consideration payable on this
transaction is £1,900,000.
Georgios Skevas established Hellenic in April 2018 with the sole purpose of
acquiring the Molaoi licence. It currently has no assets or liabilities and is
100% owned by Georgios Skevas. Subsequent to the transaction, it is proposed
that Mr Skevas will remain on the board to assist with the exploration and
development of the project.
David Price, Chief Executive Officer of Rockfire, first identified the Molaoi
project in 2005 from archived scientific reports. There is a historic
agreement between Hellenic and David Price, which entitles him to 50% of all
income (including shares and royalties) derived from the sale, joint venture
or farm-out of all projects acquired by Hellenic and/or the sale of the
company itself. The independent directors of Rockfire believe that the Molaoi
project represents excellent potential and expands Rockfire's existing base
and precious metal portfolio. The independent directors also believe the
acquisition of Hellenic is in the best interest of the Company and all
shareholders. David, due to his involvement with Molaoi and Hellenic,
abstained from the Board's decision to approve this transaction.
Copper Dome
Results from a helicopter-supported geophysical magnetic survey were released
to the market on 14 April 2021. This survey resulted in high-resolution
magnetic images, with the magnetic data detailing geology and structure
beneath the dome, which had previously not been possible at Copper Dome.
The revised target, based on the new aeromagnetic signature, was significantly
larger in area and now covered an area of 4 km x 3.5 km. At least three
separate intrusions were defined by the magnetics, with only one having been
historically drilled and copper found.
Abundant structures, including faults (and possibly veins) were identified,
providing a greater understanding of the structural setting for the
emplacement of the porphyries. A three-dimensional interpretation was
commissioned at the end of the year to determine the characteristics of the
magnetic response at depth.
KEY PERFORMANCE INDICATORS (KPIs)
The Board monitors KPIs which it considers appropriate for a group at
Rockfire's stage of development.
Financial KPIs
During the year, the Board monitored the following KPIs:
· Cash flow and working capital;
· Short-term and long-term cash flow models which include variance
analysis from original budgets.
RISK MANAGEMENT
The Board regularly reviews the risks to which the Group is exposed and
ensures through its meetings and regular reporting that these risks are
minimised as far as possible.
The principal risks and uncertainties facing the Group at this stage in its
development are:
COVID-19 risk
In the current business climate, the Board acknowledges the COVID-19 pandemic
risk and has implemented logistical and organisational changes to underpin the
Group's resilience to COVID-19, with the key focus being on protecting all
personnel, minimising the impact on critical work streams and ensuring
business continuity.
Exploration risk
The Group's business has been primarily mineral exploration and evaluation
which are speculative activities and, whilst the Directors are satisfied that
good progress is being made, there is no certainty that the Group will be
successful in the definition of economic mineral deposits, or that it will
proceed to the development of any of its projects or otherwise realise their
value.
The Group aims to mitigate this risk when evaluating new business
opportunities by targeting areas of potential where there is at least some
successful historical drilling or geological data available.
Resource risk
All mineral projects have risk associated with defined grade and continuity.
Mineral reserves and resources are calculated by the Group in accordance with
accepted industry standards and codes but are always subject to uncertainties
in the underlying assumptions which include geological projection and
commodity price assumptions.
The Group reports mineral resources and reserves in accordance with the
Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves ('the JORC Code'). The JORC Code is a professional code of
practice that sets minimum standards for public reporting of mineral
exploration results, mineral resources and ore reserves. Further information
on the JORC Code can be found at www.jorc.org (http://www.jorc.org) .
Environmental, landowner and native title risk
Exploration and development of a project can be adversely affected by
environmental legislation and the unforeseen results of environmental studies
carried out during evaluation of a project. Once a project is in production,
unforeseen events can give rise to environmental liabilities.
Access and compensation agreements are required to be negotiated between the
Company and the landowner at each project. Queensland legislation provides an
agreement template which may be modified by the Company and the landowner. The
Company cannot guarantee landowners will provide access, regardless of
existing laws in place to ensure such access is negotiated on fair terms.
Where native title exists, the Company obtains the necessary approvals for
access and working programmes according to legislation and the Company's
environmental, social and governance ("ESG") programme.
The Group is currently in the exploration stage. Any disturbance to the
environment during this phase is minimal and is rehabilitated in accordance
with the prevailing regulations of the countries in which we operate.
Financing and liquidity risk
The Group has an ongoing requirement to fund its activities through the equity
markets and in the future to obtain finance for project development. There is
no certainty such funds will be available when needed. To date, Rockfire has
managed to raise funds primarily through equity placements despite the very
difficult markets that currently exist for raising funding in the junior
mining industry.
Political risk
All countries carry political risk that can lead to interruption of activity.
Politically stable countries can have enhanced environmental and social
permitting risks, risks of strikes and changes to taxation whereas less
developed countries can have in addition, risks associated with changes to the
legal framework, civil unrest and government expropriation of assets.
Bribery risk
The Group has adopted an anti-corruption policy and whistle blowing policy
under the Bribery Act 2010. Notwithstanding this, the Group may be held liable
for offences under that Act committed by its employees or subcontractors,
whether or not the Group or the Directors had knowledge of the committing of
such offences.
Insurance coverage
The Group maintains a suite of insurance coverage that is appropriate for the
Group and Company. This is arranged via a specialist mining insurance broker
and coverage includes public and products liability, corporate and
professional, travel, property and medical coverage and assistance while Group
employees and consultants are travelling on Group business. This is reviewed
at least annually and adapted as the Group's scale and nature of activities
change.
Internal controls and risk management
The Directors are responsible for the Group's system of internal financial
control. Although no system of internal financial control can provide absolute
assurance against material misstatement or loss, the Group's system is
designed to provide reasonable assurance that problems are identified on a
timely basis and dealt with appropriately.
In carrying out their responsibilities, the Directors have put in place a
framework of controls to ensure as far as possible that ongoing financial
performance is monitored in a timely manner, that corrective action is taken
and that risk is identified as early as practically possible. The Directors
review the effectiveness of internal financial control at least annually.
The Board continuously monitors and upgrades its internal control procedures
and risk management mechanisms and assesses both for effectiveness during the
annual review. This process enables the Board to determine if the risk
exposure has changed during the year. In order to assist the risk management
function, the Company has a risk management policy, which is reviewed
annually. The Executive Directors report regularly to the Board on the
management of material business risks.
The Board, subject to delegated authority, reviews capital investment,
property sales and purchases, additional borrowing facilities, guarantees and
insurance arrangements.
CORPORATE SOCIAL RESPONSIBILITY
The Board takes account of the significance of social, environmental and
ethical matters affecting the business of the Group. At this stage in the
Group's development the Board has not adopted a specific policy on corporate
social responsibility as it has a limited pool of stakeholders other than its
shareholders. Rather, the Board seeks to protect the interests of Rockfire's
stakeholders through individual policies and through ethical and transparent
actions.
SHAREHOLDERS
The Directors are always prepared, where practicable, to enter into dialogue
with shareholders to promote a mutual understanding of objectives and
outcomes. The Annual General Meeting provides the Board with an opportunity to
informally meet and communicate directly with investors.
ENVIRONMENT
The Board recognises that the Group's principal activity, mineral exploration,
has the potential to impact on the local environment. To date, activities at
the various projects have been limited to surveying and drilling activities
and the Group does comply with local regulatory requirements with regard to
environmental compliance and rehabilitation. The impact on the environment of
the Group's activities has the potential to increase should our projects move
into a development or production phase. This is currently assessed through
baseline environmental studies that are being undertaken and identifying
resources needed to manage environmental compliance in the future.
Given the Group's size and scale it is not considered practical or cost
effective to collect and report data on carbon emissions.
EMPLOYEES
The Group engages its employees to understand all aspects of the Group's
business and seeks to remunerate its employees fairly, being flexible where
practicable. The Group gives full and fair consideration to applications for
employment received regardless of age, gender, colour, ethnicity, disability,
nationality, religious beliefs, transgender status or sexual orientation. The
Group takes account of employees' interests when making decisions and welcomes
suggestions from employees aimed at improving the Group's performance.
The Group now operates in Australia and Greece, where the Group recruits
locally as many of its employees and contractors as practicable.
SUPPLIERS AND CONTRACTORS
The Group recognises that the goodwill of its contractors, consultants and
suppliers is important to its business success and seeks to build and maintain
this goodwill through fair dealings. The Group has a prompt payment policy and
seeks to settle all agreed liabilities within the terms agreed with suppliers.
The Company encourages best practice from suppliers and contractors with
regards to environmental issues.
HEALTH AND SAFETY
The Board recognises that it has a responsibility to provide strategic
leadership and direction in the development of the Group's health and safety
strategy in order to protect all of its stakeholders. The Group has a
site-based health and safety protocol. This is re-evaluated as and when the
Group's nature and scale of activities change.
ENGAGEMENT WITH STAKEHOLDERS
The Board of Rockfire is proud of the high standard of corporate governance it
has established and maintains. The Board makes a conscious effort to
understand the interests and expectations of the Company's stakeholders, and
to reflect these in the choices it makes in its effort to create long-term
sustainable success for our business.
Engagement with our shareholders and wider stakeholder groups, including
employees, landowners, suppliers, contractors and government agencies, plays a
central role throughout Rockfire's business. The Board is aware that each
stakeholder group requires a specific and unique engagement approach in order
to create and maintain effective, sustainable and mutually beneficial
relationships.
The Board's understanding of various stakeholder interests is factored into
programme planning, boardroom discussions, strategy and budgets to assess
potential long-term impacts of our business on each group, and how we might
best address stakeholder expectations from our business.
Throughout this Annual Report, we provide examples of how we:
· Take into account the likely consequences of long-term
decisions;
· Foster relationships with stakeholders;
· Understand our impact on our local communities and the
environment; and
· Demonstrate the importance of behaving responsibly.
This engagement with stakeholders section forms our section 172 statement and
should be read in conjunction with other information included in this Annual
Report. Section 172 of the Companies Act 2006 requires the Directors to act in
a way that they consider, in good faith, would most likely promote the success
of the Company for the benefit of its members as a whole, taking into account
the factors listed in section 172.
The Directors continue to observe, plan for, and communicate the interests
of the Company's stakeholders, including the impact of its exploration
activities on local communities and the environment. Acting in good faith and
fairly between members, the Directors consider what is most likely to promote
the success of the Company for its members in the long term.
The Board regularly reviews its principal stakeholders and how it engages with
each. Stakeholder expectations are brought into the boardroom throughout the
annual cycle through information provided by management and by direct
engagement with stakeholders themselves. The priority of each stakeholder
group may increase or decrease, depending on the degree of impact any decision
may have on any particular stakeholder group. The Board therefore seeks to
consider the impact and priorities of each stakeholder group during its
discussions and as part of its decision making.
The table below sets out the key stakeholder groups, their interests and how
Rockfire has engaged with them over the reporting period. However, given the
importance of stakeholder focus, long-term strategy and reputation, these
themes are also discussed throughout this Annual Report.
Stakeholder Their interests How we engage
Our investors · Comprehensive review of financial performance of the business · Annual Report
· Business sustainability · Company website
· High standard of governance · Shareholder circulars
· Success of the business · Podcasts and interviews
· Ethical behaviour · Corporate information including Company announcements and
presentations
· Director experience
· AGM results
· Awareness of long-term strategy and direction
· Conference presentations
· Project prospectivity
· Stock exchange announcements
· Improving market perception of the business
· Press releases
· Appointment of a public relations advisor
· Frequent communication through briefings with management
· Shareholder communication policy, which is renewed annually
· Specific shareholder liaison officer on the Board (Chief
Executive Officer)
· Social media
· One- to- one meetings with large existing or potential new
shareholders
Regulatory bodies · Compliance with regulations · Company website
· Worker pay and conditions · Stock Exchange announcements
· Health and safety · Annual Report
· Brand reputation · Regular contact with QCA, share registrar, LSE and Companies
House
· Waste and environment
· Compliance updates at Board meetings
· Insurance
· Risk management policy, updated annually
· Environmental protection
· Compliance with local regulatory requirements and industry
standard principles for environmental and social risk management
· Appointment of a nominated advisor in accordance with the AIM
Rules
· Appointment of a competent person in accordance with the AIM
Rules
· Adhere to laws and regulations of the jurisdictions in which
the Group operates
· Adoption of best practice policies recommended by the World
Bank and The International Council on Mining and Metals
Community · Sustainability · Philanthropy. Drilling of a water bore is offered to the
landowner during each drill programme
· Human rights
· Corporate responsibility is overseen by a dedicated exploration
· Community outreach manager
· Employment of local contractors wherever possible
· Prompt rehabilitation of drill sites
· Providing opportunity for local businesses to cater for our
exploration programs
· Local landowners are paid promptly
· Landowner access and compensation agreements
· Active communication with landowners and communities where
field work is taking place
· Adhere to Government guidelines for approaching landowner and
native title holder discussion
Environment · Energy usage · All operational waste is completely removed from site and taken
to a waste and/or recycling facility
· Recycling
· Detailed field operation guidelines to minimise any negative
· Waste management environmental impact of exploration activities
· Obtaining environmental permits for exploration works
· Ensuring operational protocols are in place and monitoring the
adherence to these protocols
Suppliers · Terms and conditions of contract · All supplies are sourced locally where possible
· Procurement opportunities · Our suppliers and contractors have received repeat business
from Rockfire, which is testimony to the fine working relationship established
· Workers' rights
· Supplier performance is continually monitored by a dedicated
· Supplier engagement exploration manager
· Sustainability · All field programs, including supplier quotes are authorised by
the Executive Directors prior to implementation
· Long-term partnerships
· Local suppliers are paid promptly
· Fair trading and payment terms
· Contact and feedback to suppliers is regular and personal via a
dedicated exploration manager
Contractors · Terms and conditions of contract · All contractors are sourced locally where possible
· Health and safety · Contractors are trained in senior first aid, paid for by
Rockfire
· Human rights and modern slavery
· On-the-job training is provided
· Working conditions
· Local contractors are paid promptly
· Diversity and inclusion
· Rockfire pays contractors standard industry rates, which are
well in excess of minimum average wages
· Communication with contractors is frequent through a dedicated
exploration manager
· Induction for health and safety is mandatory for contractors
visiting site
· Daily safety meetings have been implemented during all field
operations
· Rockfire has a whistle-blower policy and procedure in place to
ensure compliance, safety and governance
· Code of conduct providing a framework for ethical decision
making
· Contact and feedback to contractors is regular and personal via
a dedicated exploration manager
· Anti-corruption and bribery policy
On behalf of the Board
David W Price, Chief Executive Officer
27 May 2022
DIRECTORS' REPORT
Principal activities
The principal activities of the Group include exploration for gold and copper
resources in Queensland, Australia and exploration and development of base
metals in Greece. The Group's strategy is to explore for and, where the
Directors believe that it is commercially feasible, develop mineral deposits.
The Company strategy includes considering opportunities for project sale or
joint venture at a point when any of the Group's projects becomes
appropriately advanced enough to consider such options.
The Group currently holds five exploration permits for minerals (EPMs) in
Queensland, Australia and an exploration and exploitation licence in Greece.
Financial overview
The loss for the year is in line with the Directors' expectations. With
funding being raised during 2021, the Directors are confident that they will
be able to secure additional funding when required to do so. The Directors are
also of the view that the investment sentiment in the resource sector is
improving, to the extent that the exploration success the Company has achieved
to date should enable it to raise sufficient additional exploration funding to
continue its exploration programmes.
Further details of the Group's business, including its targets and strategies
is given in the Chairman's Statement and the Strategic Report.
Major events after the reporting period
For information regarding events after the reporting date, see note 19 to the
financial statements.
Dividends
The Directors are unable to recommend the payment of a dividend for the year
ended 31 December 2021 (2020: £nil).
Going concern
In the current business climate, the Board acknowledges the COVID-19 pandemic
and has implemented logistical and organisational changes to underpin the
Group's resilience to COVID-19, with the key focus being on protecting all
personnel, minimising the impact on critical work streams and ensuring
business continuity. COVID-19 may have a direct bearing on the Group's ability
to generate sufficient cash for working capital purposes. The Board is closely
monitoring commercial and technical aspects of the Group's operations to
mitigate the impact of the COVID-19 pandemic. The inability to gauge the
length of such disruption further adds to this uncertainty. For these
reasons, the generation of sufficient operating cash remains a risk. The
Board believes the Group will generate sufficient working capital to continue
in operational existence and will have the ongoing support of its
shareholders, as required, for the foreseeable future. Further details are
included in note 3 to the financial statements.
In May 2021, the Company raised gross proceeds of £850,000 through a placing
of 121,429,200 new ordinary shares of 0.1p each. In July 2021, the Company
raised a further £1,000,000 before costs through a placing of 125,000,000 new
ordinary shares of 0.1p each.
Directors
The Directors in office during the year are listed below. The interests of the
Directors in the shares of the Company, and share options were as follows:
As at 31 December 2021 As at 31 December 2020 Ordinary shares As at 31 December 2021 As at 31 December 2020
Ordinary shares Options Options
Gordon Hart 8,823,530 8,823,530 10,000,000 -
Patrick Elliott 12,469,823 8,848,490 6,000,000 6,000,000
Ian Staunton - - 6,000,000 6,000,000
Nicholas Walley 59,000,000 52,464,000 6,000,000 6,000,000
David W Price 13,850,000 13,850,000 10,000,000 -
Significant shareholdings
As at 27 May 2022, being the latest practical date prior to publication of
this document, the Company was aware of the following holdings of 3% or more
of the issued share capital of the Company:
Ordinary shares % of the Company's issued share capital
Nicholas Walley 59,000,000 5.45
Michael Somerset-Leeke 49,101,126 4.54
David W Price 38,850,000 3.42
Directors' remuneration
Full details of Directors' emoluments are set out in note 5 to the financial
statements.
Environmental policy
The Group's projects are subject to the relevant laws and regulations relating
to environmental matters in each jurisdiction in which the Group operates.
The Group's strategy is to explore for and, where the relevant studies
indicate that it is economically viable to do so, to develop mineral deposits.
It is the Group's intention to conduct its exploration and investigation
activities in a professional and responsible manner, for the benefit of the
Company's shareholders, its employees and the national and local communities
within which it operates.
The Group aims at all times to conduct its operations in an environmentally
responsible manner and in accordance with relevant legislation. The Group aims
to adopt best practice policies as recommended by the World Bank, the
International Council on Mining & Metals ("ICMM") and others where the
Group deems local legislation to be inadequate in terms of environmental
protection. The Group has in place a detailed field operations guidelines
manual which covers in considerable detail the measures to be taken by field
personnel to minimise any negative environmental impact of current exploration
activities on the environment.
The Group also recognises the enormous potential of its activities for
positive impact on the communities in which it operates and strives to
optimise these positive impacts as far as possible.
Directors' indemnities
The Group has directors and officers indemnity insurance to cover its
Directors and officers against the costs of defending themselves in legal
proceedings taken against them in that capacity and in respect of any damages
resulting from those proceedings.
Political contributions
No political contributions have been made.
Auditor
A resolution proposing that PKF Littlejohn LLP be re-appointed will be put to
the forthcoming Annual General Meeting.
Statement of disclosure to auditor
The Directors who held office at the date of approval of this Annual Report
confirm that, so far as they are each aware, there is no relevant audit
information of which the Company's auditor is unaware and each Director has
taken all steps that he ought to have taken as a Director in order to make
himself aware of any relevant audit information and to establish that the
Company's auditor is aware of that information.
Statement of Directors' responsibilities
The Directors are responsible for preparing the Strategic Report, the
Director's Report and the financial statements in accordance with applicable
law and regulations.
Company law requires the Directors to prepare financial statements for each
financial year. Under that law the Directors have prepared the Group and
Company financial statements in accordance with UK-adopted international
accounting standards and, as regards the Company financial statements, as
applied in accordance with the requirements of the Companies Act 2006.
Under company law the Directors must not approve the financial statements
unless they are satisfied that they give a true and fair view of the state of
affairs of the Group and the Company and of the profit or loss of the Group
for that period.
In preparing the Group and Company financial statements, the Directors are
required to:
· select suitable accounting policies and then apply them
consistently;
· make judgements and accounting estimates that are reasonable and
prudent;
· state whether they comply with UK-adopted international
accounting standards, subject to any material departures disclosed and
explained in the financial statements;
· prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group and Company will continue
in business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Group's and the Company's transactions and
disclose with reasonable accuracy at any time the financial position of the
Group and the Company and enable them to ensure that the financial statements
comply with the Companies Act 2006. They are also responsible for safeguarding
the assets of the Group and the Company and hence for taking reasonable steps
for the prevention and detection of fraud and other irregularities.
The Annual Report will be published on the Group's website and in this regard
the Directors accept responsibility for the maintenance and integrity of the
website.
Annual General Meeting and recommendation
The Board considers that the resolutions to be proposed at the Annual General
Meeting are in the best interests of the Company and the Group as a whole and
its unanimous recommendation is that shareholders support these proposals as
the Directors intend to do in respect of their own holdings. Further details
regarding the location and timing of the Company's forthcoming Annual General
Meeting will be provided shortly.
We welcome you to continue to take the journey with us as we build Rockfire
through exploration success and quality asset acquisition.
On behalf of the Board
David W Price, Chief Executive Officer
27 May 2022
CORPORATE GOVERNANCE STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2021
As Chairman of Rockfire, it is my responsibility to ensure that Rockfire has
both sound corporate governance and an effective Board. I do that by ensuring
that the Company and the Board are acting in the best interests of
shareholders, and by making sure that the Board discharges its
responsibilities. This includes creating the right Board dynamic and ensuring
that all important matters, in particular strategic decisions, receive
adequate time and attention at Board meetings.
My responsibilities include leading the Board effectively, overseeing the
Group's corporate governance model, communicating with shareholders and
ensuring that good information flows freely between the Executive and
Non-executive Directors in a timely manner.
To the extent applicable, and to the extent able (given the current size and
structure of the Company and the Board), the Company has adopted the Quoted
Companies Alliance Corporate Governance Code (the Code). Details of how the
Company complies with the Code are set out below, together with the principles
contained in the Code.
In light of the Company's size and nature, the Board considers that the
current Board is a cost effective and practical method of directing and
managing the Company. As the Company's activities develop in size, nature and
scope, the size of the Board and the implementation of additional corporate
governance policies and structures will be reviewed. Further disclosures under
the Code are included on the Company's website.
Principle 1 - Establish a strategy and business model which promote long-term
value for shareholders
Rockfire is an AIM-quoted mineral explorer with projects located in northern
Queensland, Australia and the Peloponnese region of Greece. The Company's
strategy is to identify mineral deposits which can be developed into mines to
create value and income for shareholders.
Throughout 2021, the Board has delivered on its strategy to achieve growth of
the Group, with highly successful exploration results at the Plateau gold
deposit and for copper at the Copperhead project, also in Queensland.
The Company continues to seek other resource projects.
Principle 4 - Embed effective risk management, considering both opportunities
and threats, throughout the organisation
The risks facing the Company are detailed in the risk management section of
the Strategic Report. The Board seeks to mitigate such risks so far as it is
able to do, but certain important risks cannot be controlled by the Board.
In setting and implementing the Company's strategies, the Board, having
identified the risks, seeks to limit the extent of the Company's exposure to
them having regard to both its risk tolerance and risk appetite.
Principle 5 - Maintain the board as a well-functioning, balanced team led by
the chair
Ian Staunton and Patrick Elliot are considered to be independent. Nicholas
Walley, as a significant shareholder, is not considered to be independent.
The Company is aware that having an Executive Chairman is not in line with the
recommendations made by the QCA. The role of Executive Chairman has been
primarily to ensure that best practice policies and procedures are implemented
through identifying and appointing the appropriate Directors, ensuring the
Board is run in an effective manner, and assisting the Chief Executive Officer
with legacy matters. There is a clear split of responsibilities between the
Executive Chairman and the Chief Executive Officer. The Board believes that
the skillsets of the Chairman and the non-independent Non-executive Director
are appropriate and beneficial for all shareholders and stakeholders.
All Directors are expected to devote the necessary time commitments required
by their position and are expected to attend all Board meetings. The Board
convenes outside these meetings on an ad hoc basis as and when it deems
necessary.
The Chief Executive Officer works full time for the Company. The Executive
Chairman is expected to devote sufficient time as to fulfil the needs of the
Company, The Non-executive Directors are expected to dedicate up to 3 days per
month to the Company's affairs. The Board is satisfied that each of the
Directors is able to allocate sufficient time to the Company to discharge
their responsibilities effectively.
The number of meetings of the Board and attendance for the year ended 31
December 2021 are set out below:
Meetings held Meetings attended
Gordon Hart 16 16
Patrick Elliott 16 10
Ian Staunton 16 15
Nicholas Walley 16 15
David W Price 16 16
Principle 6 - Ensure that between them the directors have the necessary
up-to-date experience, skills and capabilities
The Board comprises the Executive Chairman, Gordon Hart; the Chief Executive
Officer, David W Price; and three Non-executive Directors, Ian Staunton,
Patrick Elliott and Nicholas Walley. Further details on the Board can be found
on page 5 of this Annual Report.
The Board is therefore satisfied that it has a suitable balance between
independence on the one hand, and direct managerial and operational knowledge
of the Company on the other, which ensures that no individual or group may
dominate the Board's decisions. The Board is also satisfied that the Board has
sufficient knowledge of the Group and its operations to enable it to discharge
its duties and responsibilities effectively. All Directors use their
independent judgement to challenge all matters, whether strategic or
operational.
The Directors endeavour to ensure that their knowledge of best practices and
regulatory developments is up to date by technical reading and attending
relevant seminars and conferences as considered necessary. All Directors
receive regular updates on legal and governance issues. Nicholas Walley has
been attending various QCA seminars on remuneration. David Price has attended
various technical seminars. Gordon Hart has attended numerous webinars and
conferences held by the Australian Institute of Company Directors. All
Directors are encouraged to attend presentations, conferences and webinars
which improve their skill base.
Rockfire has a Company Secretary whose role is to work closely with the
Chairman to maintain high standards of corporate governance, ensuring that the
necessary information is supplied to the Directors on a timely basis and that
the Company complies with all applicable rules, regulations and obligations
governing its operation.
The Board has regular contact with its advisors to ensure that it is aware of
changes to generally accepted corporate governance procedures and requirements
and that the Group remains compliant with applicable rules and regulations.
The Company's nominated advisor supports the Board's development, specifically
providing guidance on corporate governance and other regulatory matters, as
required.
Each Director can take independent professional advice in the furtherance of
his duties, if necessary, at the Company's expense. In addition, the Directors
have direct access to the advice and services of the Company Secretary.
Neither the Board nor its committees have sought external advice on a
significant matter.
Principle 7 - Evaluate board performance based on clear and relevant
objectives, seeking continuous improvement
Given the current stage of the Company's development the Directors believe
that the Board operates efficiently and cost effectively and that the cost of
an external review process is not justified. Nevertheless, it is intended that
the Board will be strengthened in due course to reflect the Group's progress
with exploration and growth.
Principle 8 - Promote a corporate culture that is based on ethical values and
behaviours
The Board recognises that its decisions regarding strategy and risk will
impact the corporate culture of the Group as a whole and that this will impact
the performance of the Group. The Board is aware that the tone and culture set
by the Board will greatly impact all aspects of the Group and the way that
employees and other stakeholders behave. The Corporate Governance arrangements
that the Board has adopted are designed to ensure that the Company delivers
long term value to its shareholders, and that shareholders have the
opportunity to express their views in a manner that encourages open dialogue
with the Board. Therefore, the importance of sound ethical values and
behaviours is crucial to the ability of the Company to successfully achieve
its corporate objectives.
A large part of the Company's activities is centred upon an open and
respectful dialogue with employees, contractors, clients and other
stakeholders. The Board places great importance on this aspect of corporate
life and seeks to ensure that transparency and openness are evident in all
that the Company does. The Directors consider that at present the Company
has an open culture facilitating comprehensive dialogue and feedback and
enabling positive and constructive challenge.
The Board has adopted a code of conduct which provides a framework for ethical
decision-making and actions across the Group. The code of conduct reiterates
the Group's commitment to integrity and fair dealing in its business affairs
and its duty of care to all employees, contractors and stakeholders.
Each Board member's adherence to the Group's code of conduct is assessed
annually. Employees are assessed on their performance and their adherence to
the code of conduct through their annual performance review.
Principle 10 - Communicate how the company is governed and is performing by
maintaining a dialogue with shareholders and other relevant stakeholders
The Board attaches great importance to providing shareholders with clear and
transparent information on the Company's activities, strategy and financial
position.
The Company communicates with shareholders through the Annual Report,
full-year and half-year announcements, the Annual General Meeting and
one-to-one meetings with large existing or potential new shareholders.
The Company announces significant developments which are disseminated via
various outlets including the London Stock Exchange's Regulatory News Service
(RNS).
The audit committee is chaired by Ian Staunton and includes Patrick Elliott
and Gordon Hart, and their biographies can be found on page 5. The role of the
committee is to consider and approve the interim results, and with the
auditors to consider the annual report and matters raised by the auditors
based on their audit. So far as possible recommendations by the auditors are
immediately implemented. To date, audit committee matters have been discussed
in full Board meetings. As such no formal audit committee reports have been
required.
The remuneration committee is chaired by Nicholas Walley and includes Patrick
Elliott, and their biographies can be found on page 5. The remuneration
committee meets on an ad hoc basis, when required. Fees payable to the
Non-executive Directors are determined by the Executive Directors.
Additional information supplied by the remuneration committee has been
disseminated across this Annual Report, rather than included as a separate
committee report.
Gordon Hart, Chairman
27 May 2022
INDEPENDENT AUDITOR'S REPORT
Opinion
We have audited the financial statements of Rockfire Resources Plc (the
'parent company') and its subsidiaries (the 'group') for the year ended 31
December 2021 which comprise the Consolidated Statement of Comprehensive
Income, the Consolidated and Parent Company Statements of Financial Position,
the Consolidated and Parent Company Statements of Changes in Equity, the
Consolidated and Parent Company Statements of Cash Flows and notes to the
financial statements, including significant accounting policies. The financial
reporting framework that has been applied in their preparation is applicable
law and 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 31 December 2021 and
of the group's loss for the year then ended;
· the group financial statements have been properly prepared in
accordance with UK-adopted international accounting standards;
· the parent company financial statements have been properly
prepared in accordance with UK-adopted international accounting standards and
as applied in accordance with the provisions of the Companies Act 2006; and
· the financial statements have been prepared in accordance with
the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor's responsibilities for the
audit of the financial statements section of our report. We are independent of
the group and parent company in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the UK, including the
FRC's Ethical Standard as applied to listed entities, and we have fulfilled
our other ethical responsibilities in accordance with these requirements. We
believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to note 3 in the financial statements, which indicates that
the group will require further funds to be raised over the next 12 months in
order for the group to meet its exploration expenditure commitments and to
continue as a going concern. As stated in note 3, these events or conditions
indicate that a material uncertainty exists that may cast significant doubt on
the group'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 parent company's ability to continue to adopt
the going concern basis of accounting included a review of the cash flow
forecasts prepared by management, a review of management's assessment of going
concern and post year end information.
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
Materiality Basis for materiality
Group £97,000 (2020: £81,000) 2% of gross assets
Company £75,000 (2020: £61,000) Combination of 2% of gross assets and 5% of loss before tax
We consider gross assets to be the most significant determinant of the group's
financial position and performance used by shareholders, with the key
financial statement balances being intangible exploration and evaluation
assets and cash and cash equivalents. The going concern of the group is
dependent on its ability to fund operations going forward, as well as on the
valuation of its assets, which represent the underlying value of the group.
The basis for calculating materiality was unchanged from the prior year.
Whilst materiality for the group financial statements as a whole was set at
£97,000, materiality for the parent company and significant component was set
at £75,000 and £58,000 respectively (2020: £61,000 and £44,000
respectively). Performance materiality set at 70% for the group, parent
company and significant component at £67,900, £52,500 and £40,600
respectively (2020: £56,700, £42,700 and £30,800 respectively). We applied
the concept of materiality both in planning and performing our audit, and in
evaluating the effect of misstatements.
We agreed with the audit committee that we would report to the committee all
audit differences identified during the course of our audit in excess of
£4,850 (2020: £4,050) for the group and £3,750 (2020: £3,050) for the
parent company.
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 requiring the directors to make subjective judgements, for example in
respect of assessing the recoverability of exploration, evaluation and
development expenditure, the valuation of share-based payments, the carrying
value and recoverability of investments in subsidiaries at parent company
level, and the consideration of future events that are inherently uncertain.
We also addressed the risk of management override of internal controls,
including evaluating whether there was evidence of bias by the directors that
represented a risk of material misstatement due to fraud.
An audit was performed on the financial information of the group's significant
operating components which, for the year ended 31 December 2021, were located
in the United Kingdom and Australia.
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 matters
described in the Material uncertainty related to 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
Carrying value and appropriate capitalisation of Intangible Assets (refer Note
9) (GROUP)
The group carrying value of intangible assets in relation to capitalised Our work in this area included:
exploration costs for its Australian projects is material. There is a risk
that these assets have been incorrectly capitalised in accordance with the
requirements of IFRS 6 and that there are indicators of impairment as at 31
December 2021. · Confirmation that the group has good title to the applicable
exploration licences, and has fulfilled any specific conditions therein
particularly having regard to minimum expenditure requirements;
Particularly for early stage exploration projects, where the calculation of · Review and substantive testing of capitalised costs including
recoverable amount via value in use calculations is not possible, management's consideration of appropriateness for capitalisation under IFRS 6;
assessment of impairment under IFRS 6 requires significant estimation and
judgement. · Assessment of progress at the individual projects during the year
and post year-end;
· Consideration of management's impairment reviews in light of
impairment indicators identified in accordance with IFRS 6, including
corroboration and challenge thereof; and
· Evaluated the disclosures included within the financial
statements.
Recoverability of investments and intragroup balances (refer Notes 11 and 12)
(COMPANY)
Investments in subsidiaries and intragroup loans are significant assets in the Our work in this area included:
parent company's financial statements. Their recoverability is directly linked
to the recoverability of intangible assets in those entities, and hence may · Confirmation of ownership of the investments;
not be fully recoverable.
· Review of management's calculations of expected credit losses on
the intragroup balances to ensure the rationale and accounting treatment is in
accordance with IFRS 9; and
· Consideration of recoverability of investments and intragroup
loans by reference to underlying net asset values and exploration projects.
Other information
The other information comprises the information included in the annual report,
other than the financial statements and our auditor's report thereon. The
directors are responsible for the other information contained within the
annual report. Our opinion on the group and parent company financial
statements does not cover the other information and, except to the extent
otherwise explicitly stated in our report, we do not express any form of
assurance conclusion thereon. Our responsibility is to read the other
information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge
obtained in the course of the audit, or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether this gives rise to a
material misstatement in the financial statements themselves. If, based on the
work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
· the information given in the strategic report and the directors'
report for the financial year for which the financial statements are prepared
is consistent with the financial statements; and
· the strategic report and the directors' report have been prepared
in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent
company and their environment obtained in the course of the audit, we have not
identified material misstatements in the strategic report or the directors'
report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been received from
branches not visited by us; or
· the parent company financial statements are not in agreement with
the accounting records and returns; or
· certain disclosures of directors' remuneration specified by law
are not made; or
· we have not received all the information and explanations we
require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the
directors are responsible for the preparation of the group and parent company
financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the directors determine is necessary to
enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the group and parent company financial statements, the directors
are responsible for assessing the group's and the parent company's ability to
continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the group or the parent company or to
cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:
· We obtained an understanding of the group and parent company and
the sector in which they operate to identify laws and regulations that could
reasonably be expected to have a direct effect on the financial statements. We
obtained our understanding in this regard through discussions with management
and application of our cumulative audit knowledge and experience of the
industry. We ensured that the audit team collectively had the appropriate
experience with auditing entities within this industry, facing similar audit
and business risks, and of a similar size.
· We determined the principal laws and regulations relevant to the
group and parent company in this regard to be those arising from:
o AIM Rules;
o UK employment law; and
o Local tax laws and regulations.
· We designed our audit procedures to ensure the audit team
considered whether there were any indications of non-compliance by the group
and parent company with those laws and regulations. These procedures included,
but were not limited to:
o Making enquiries of management;
o A review of Board minutes;
o A review of legal ledger accounts; and
o A review of RNS announcements.
· 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. 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)
For and on behalf of PKF Littlejohn LLP
Statutory Auditor
15 Westferry Circus
Canary Wharf
London E14 4HD
27 May 2022
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER
2021
Note 2021 2020
£ £
Impairment of intangible assets (12,334) (12,324)
Administrative expenses (732,619) (707,663)
Operating loss 6 (744,953) (719,987)
Loss before taxation (744,953) (719,987)
Taxation 7 - -
Loss for the year attributable to shareholders of the Company (744,953) (719,987)
Items that may be reclassified subsequently to profit or loss:
Foreign exchange translation movement (162,830) 50,591
Total comprehensive loss attributable to shareholders of the Company (907,783) (669,396)
Earnings per share attributable to shareholders of the Company
Basic and diluted 8 (0.08)p (0.10)p
CONSOLIDATED STATEMENT OF FINANCIAL POSITION FOR THE YEAR ENDED 31 DECEMBER
2021
Note 2021 2020
£ £
Assets
Non-current assets
Intangible assets 9 3,447,739 2,655,196
Property, plant and equipment 10 20,189 25,706
3,467,928 2,680,901
Current assets
Cash and cash equivalents 1,473,599 1,350,926
Trade and other receivables 12 124,261 39,383
1,597,860 1,390,309
Total assets 5,065,788 4,071,211
Equity and liabilities
Equity attributable to shareholders of the Company
Share capital 13 7,078,136 6,828,085
Share premium 14 18,180,659 16,658,354
Other reserves 14 2,295,035 2,295,035
Foreign exchange reserve 14 (190,006) (27,176)
Retained deficit (22,408,420) (21,779,517)
Total equity 4,955,404 3,974,781
Current liabilities
Trade and other payables 16 110,384 96,430
110,384 96,430
Total equity and liabilities 5,065,788 4,071,211
COMPANY STATEMENT OF FINANCIAL POSITION FOR THE YEAR ENDED 31 DECEMBER 2021
Company Registration No. 07791328
Note 2021 2020
£ £
Assets
Non-current assets
Intangible assets 9 13,380 -
Property, plant & equipment 10 690 -
Investments 11 648,000 648,000
662,070 648,000
Current assets
Cash and cash equivalents 1,420,801 1,236,174
Trade and other receivables 12 3,573,333 2,566,668
4,994,134 3,802,842
Total assets 5,656,204 4,450,842
Equity and liabilities
Equity attributable to shareholders of the Company
Share capital 13 7,078,136 6,828,085
Share premium 14 18,180,659 16,658,354
Other reserves 14 1,801,872 1,801,872
Retained deficit (21,489,448) (20,888,055)
Total equity 5,571,219 4,400,256
Current liabilities
Trade and other payables 16 84,985 50,585
84,985 50,585
Total equity and liabilities 5,656,204 4,450,842
As permitted by section 408 of the Companies Act 2006, the Company has not
presented its own income statement. The Company's total comprehensive loss for
the period was £717,442 (2020: loss of £679,732).
The financial statements were approved and authorised for issue by the Board
on 27 May 2022 and signed on its behalf by:
David W Price, Chief Executive Officer
The notes on pages 32 to 47 form part of these financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER
2021
Share capital Share premium Other reserves Foreign exchange reserve Retained deficit Total equity
£ £ £ £ £ £
As at 1 January 2020 6,625,077 14,736,107 2,295,035 (77,767) (21,163,812) 2,414,640
Loss for the financial year - - - - (719,987) (719,987)
Foreign exchange translation movement - - - 50,591 - 50,591
Total comprehensive loss - - - 50,591 (719,987) (669,396)
Shares issued during the year 203,008 2,033,400 - - - 2,236,408
Share issuance costs - (111,153) - - - (111,153)
Share-based expense - - - - 104,282 104,282
Total transactions with shareholders 203,008 1,922,247 - - 104,282 2,229,537
At 31 December 2020 6,828,085 16,658,354 2,295,035 (27,176) (21,779,517) 3,974,782
As at 1 January 2021 6,828,085 16,658,354 2,295,035 (27,176) (21,779,517) 3,974,782
Loss for the financial year - - - - (744,953) (744,953)
Foreign exchange translation movement - - - (162,830) - (162,830)
Total comprehensive loss - - - (162,830) (744,953) (907,783)
Shares issued during the year 250,051 1,630,995 - - - 1,881,046
Share issuance costs - (108,690) - - - (108,690)
Share-based expense - - - - 116,049 116,049
Total transactions with shareholders 250,051 1,522,305 - - 116,049 1,888,405
At 31 December 2021 7,078,136 18,180,659 2,295,035 (190,006) (22,408,420) 4,955,404
COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2021
Share premium Other reserves Retained deficit Total equity
Share capital
£ £ £ £ £
At 1 January 2020 6,625,077 14,736,107 1,801,872 (20,312,605) 2,850,451
Loss for the financial year - - - (679,732) (679,732)
Total comprehensive loss - - - (679,732) (679,732)
Shares issued during the year 203,008 2,033,400 - - 2,236,408
Share issuance cost - (111,153) - - (111,153)
Share-based expense - - - 104,282 104,282
Total transactions with shareholders 203,008 1,922,248 - 104,282 2,229,537
As at 31 December 2020 6,828,085 16,658,354 1,801,872 (20,888,055) 4,400,256
As at 1 January 2021 6,828,085 16,658,354 1,801,872 (20,888,055) 4,400,256
Loss for the financial year - - - (717,442) (717,442)
Total comprehensive loss - - - (717,442) (717,442)
Shares issued during the year 250,051 1,630,995 - - 1,881,046
Share issuance cost - (108,690) - - (108,690)
Share-based expense - - - 116,049 116,049
Total transactions with shareholders 250,051 1,522,305 - 116,049 1,888,405
At 31 December 2021 7,078,136 18,180,659 1,801,872 (21,489,448) 5,571,219
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2021
2021 2020
£ £
Cash flow from operating activities
Loss for the year before tax (744,953) (719,987)
Impairment of intangible assets 12,334 12,324
Depreciation 7,052 769
Expenses settled in shares - 38,000
Share-based expense 116,049 104,282
Foreign exchange differences (47,912) (60,986)
Decrease in trade and other receivables (61,748) 18,007
Decrease in trade and other payables (9,147) (55,802)
Net cash outflow from operating activities (728,326) (663,393)
Cash flow from investing activities
Exploration expenditure (918,667) (817,153)
Acquisition of property, plant and equipment (2,690) (18,844)
Net cash used in investing activities (921,357) (835,997)
Cash flow from financing activities
Proceeds from issuance of ordinary shares 1,881,046 2,198,409
Share issue costs (108,690) (111,153)
Net cash generated from financing activities 1,772,356 2,087,256
Net increase in cash and cash equivalents 122,673 587,866
Cash and cash equivalents at the beginning of the year 1,350,926 763,060
Cash and cash equivalents at the end of the year 1,473,599 1,350,926
The notes on pages 32 to 47 form part of these financial statements.
COMPANY STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2021
2021 2020
£ £
Cash flow from operating activities
Loss for the year before tax (717,442) (679,732)
Expenses settled in shares - 38,000
Depreciation 460 -
Share-based expense 116,049 104,282
Expected credit losses 168,482 180,874
Decrease in trade and other receivables 957,221 19,467
Increase/(Decrease) in trade and other payables 34,400 (73,040)
Net cash outflow from operating activities 559,170 (410,149)
Cash Flow from investing activities -
Exploration expenditure (13,380) -
-
Acquisition of property, plant and equipment (1,149)
Net cash used in investing activities
(14,529)
Cash flow from financing activities
Related party loans (2,132,370) (1,203,413)
Proceeds from issuance of ordinary shares 1,881,046 2,198,409
Share issue costs (108,690) (111,153)
Net cash generated from financing activities (360,014) 883,843
Net increase in cash and cash equivalents 184,627 473,694
Cash and cash equivalents at the beginning of the year 1,236,174 762,480
Cash and cash equivalents at the end of the year 1,420,801 1,236,174
Cash flow from financing activities
Related party loans
(2,132,370)
(1,203,413)
Proceeds from issuance of ordinary shares
1,881,046
2,198,409
Share issue costs
(108,690)
(111,153)
Net cash generated from financing activities
(360,014)
883,843
Net increase in cash and cash equivalents
184,627
473,694
Cash and cash equivalents at the beginning of the year
1,236,174
762,480
Cash and cash equivalents at the end of the year
1,420,801
1,236,174
The notes on pages 32 to 47 form part of these financial statements.
1 Reporting entity
Rockfire is a public limited company, quoted on AIM and is incorporated and
domiciled in England and Wales.
2 Adoption of new and revised standards
(i) New and amended standards, and interpretations issued and effective for
the financial year beginning 1 January 2021
The following new standards, amendments and interpretations are effective for
the first time in these financial statements. However, none has had a material
impact on the financial statements:
Standard Effective date
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16: Interest Rate 1 January 2021
Benchmark Reform - Phase 2;
Amendment to IFRS 16 in respect of Covid-19-Related Rent Concessions beyond 30 1 January 2021
June 2021
(ii) New standards, amendments and interpretations in issued but not yet
effective
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: (and in some cases not yet adopted by the
UK):
Standard Effective date
Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS 37); 1 January 2022
Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 1 January 2022
16);
Annual Improvements to IFRS Standards 2018-2020 (Amendments to IFRS 1, IFRS 9, 1 January 2022
IFRS 16 and IAS 41);
Amendments to IFRS 3: References to Conceptual Framework; 1 January 2022
Amendments to IAS 1 Presentation of Financial Statements: Classification of 1 January 2023
Liabilities as Current or Non-current*
Disclosure of accounting policies (Amendments to IAS 1)*; 1 January 2023
Definition of accounting estimates (Amendments to IAS 8)*; 1 January 2023
* Subject to UK endorsement
The Directors do not expect that the adoption of these standards will have a
material impact on the financial statements of the Group or Company in future
periods.
3 Basis of preparation and significant accounting
policies
a) Basis of preparation
These financial statements have been prepared in accordance with UK-adopted
international accounting standards and with the requirements of the Companies
Act 2006. The Financial statements are prepared under the historical cost
convention as modified by the measurement of certain financial instruments at
fair value.
The preparation of financial statements in conformity with IFRS requires the
use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Group's and Company's
accounting policies.
b) Basis of consolidation
Subsidiaries are entities controlled by the Group. Control is achieved when
the Group is exposed, or has rights, to variable returns from its involvement
with the investee and has the ability to affect those returns through its
power over the investee. Specifically, the Group controls an investee if, and
only if, the Group has:
· Power over the investee (i.e., existing rights that give it the
current ability to direct the relevant activities of the investee);
· Exposure, or rights, to variable returns from its involvement
with the investee; and
· The ability to use its power over the investee to affect its
returns.
Generally, when the Group has less than a majority of the voting or similar
rights of an investee, the Group considers all relevant facts and
circumstances in assessing whether it has power over an investee, including:
· The contractual arrangement(s) with the other vote holders of the
investee;
· Rights arising from other contractual arrangements; and
· The Group's voting rights and potential voting rights.
The Group re-assesses whether or not it controls an investee if facts and
circumstances indicate that there are changes to one or more of the three
elements of control. Subsidiaries are fully consolidated from the date that
control commences until the date that control ceases. Accounting policies of
subsidiaries have been changed where necessary to ensure consistency with the
policies adopted by the Group. Intra-group balances and any unrealised gains
or losses or income or expenses arising from intra-group transactions are
eliminated in preparing the Group financial statements.
c) Functional and presentation currency
These consolidated financial statements are presented in GB pounds sterling
(GBP), which is the Company's functional currency.
d) Going concern
The Company has prepared a cash flow forecast which supports the Directors'
expectation that the Group has adequate resources to continue in operational
existence for a period of not less than 12 months from the date of signing
these financial statements. This cash flow forecast assumes that the
exploration programmes, including minimum expenditure commitments, will only
continue with additional equity funding secured by the Group. This additional
funding is not guaranteed, however to date the Group has been successful in
securing funding when required. In May 2021, the Company raised gross proceeds
of £850,004 through a placing of 121,429,200 new ordinary shares of 0.1p
each. In July 2021, the Company raised gross proceeds of £1,000,000 through
placing 125,000,000 new ordinary shares of 0.1p each. As such, the financial
statements have been prepared assuming the Group and Company will continue as
a going concern.
In the current business climate, the Board acknowledges the continued effects
of the COVID-19 pandemic and has continued to update and implement logistical
and organisational changes to underpin the Group's resilience to COVID-19,
with the key focus being protecting all personnel, minimising the impact on
critical work streams and ensuring business continuity. COVID-19 may have a
direct bearing on the Group's ability to generate sufficient cash for working
capital purposes. The inability to gauge the length of such disruption
further adds to this uncertainty. For these reasons, the generation of
sufficient operating cash remains a risk.
The Directors believe the Group will generate sufficient working capital and
cash flows to continue in operational existence and will have the ongoing
support of its shareholders, if required, for the foreseeable future.
e) Business combinations
The Group applies the acquisition method in accounting for business
combinations. The consideration transferred by the Group to obtain control of
a subsidiary is calculated as the sum of the acquisition-date fair values of
assets transferred, liabilities incurred and the equity interests issued by
the Group, which includes the fair value of any asset or liability arising
from a contingent consideration arrangement. Acquisition costs are expensed as
incurred. Assets acquired and liabilities assumed are generally measured at
their acquisition-date fair value.
f) Property, plant and equipment
Items of property, plant and equipment are stated at historical cost less
accumulated depreciation.
Depreciation is provided at the following annual rates in order to write off
each asset over its estimated useful life.
· Motor vehicles - 20% straight line
· Office equipment - 25%
straight line
The assets' residual values and useful lives are reviewed, and adjusted if
appropriate, at each balance sheet date.
g) Intangible assets - exploration costs
Exploration costs comprise costs associated with the acquisition of mineral
rights and mineral exploration and are capitalised as intangible assets
pending the feasibility of the project. They also include certain
administrative costs that are allocated to the extent that those costs can be
related directly to exploration activities.
If an exploration project is deemed successful based on feasibility studies,
the related expenditure is transferred to development and production assets
and amortised over the estimated useful life of the ore reserves on a unit of
production basis. Where a project is abandoned or considered to be no longer
economically viable, the related costs are written off to profit or loss.
To date, the Group has not progressed to the development and production stage
in any area of operation.
h) Impairment of non-financial assets
The Group assesses at each reporting date whether there is an indication that
an asset may be impaired. If any such 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 fair value less costs to sell and its value in use
and is determined for an individual asset, unless the asset does not generate
cash inflows that are largely independent from those of other assets or groups
of assets. Where the carrying value of an asset 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, an
appropriate valuation model is used.
Exploration projects at an early stage of development are assessed under the
following areas, in accordance with the criteria contained within IFRS 6, for
circumstances that may indicate the existence of impairment:
· The Group's right to explore in an area has expired, or will
expire in the near future without renewal;
· No further exploration or evaluation is planned or budgeted;
· A decision has been taken by the Board to discontinue exploration
and evaluation in an area due to the absence of a commercial level of
reserves; or
· Sufficient data exists to indicate that the book value will not
be fully recovered from future development.
Impairment losses of continuing operations are recognised in profit or loss in
those expense categories consistent with the function of the impaired asset.
For impaired assets, an assessment is made at each reporting date as to
whether there is any indication that previously recognised impairment losses
may no longer exist or may have decreased. If such indication exists, the
Group makes a revised estimate of recoverable amount. A previously recognised
impairment loss is reversed only if there has been a change in the estimates
used to determine the asset's recoverable amount since the last impairment
loss was recognised. If that is the case the carrying amount of the asset is
increased to its recoverable amount. That increased amount cannot exceed the
carrying amount that would have been determined, net of depreciation, had no
impairment loss been recognised for the asset in prior years.
i) Financial instruments
Financial assets
Classification
The Group classifies its financial assets at amortised cost. Financial assets
do not comprise prepayments. Management determines the classification of its
financial assets at initial recognition. The classification of financial
assets at initial recognition that are debt instruments depends on the
financial asset's contractual cash flow characteristics and the business model
for managing them. In order for a financial asset to be classified and
measured at amortised cost it needs to give rise to cash flows that are solely
payments of principal and interest (SPPI) on the principal amount
outstanding.
Amortised cost
The Group's financial assets held at amortised cost comprise trade and other
receivables and cash and cash equivalents in the statement of financial
position. These assets are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. They arise
principally through the provision of goods and services to customers (e.g.,
trade receivables), but also incorporate other types of contractual monetary
asset. 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 method, less provision
for impairment.
Impairment of financial assets
An impairment provision is recognised when there is objective evidence of a
default event (e.g., significant financial difficulties on the part of the
counterparty or default or significant delay in payment) such that the Group
may be unable to collect all of the amounts due under the terms receivable,
the amount of such a provision being the difference between the net carrying
amount and the present value of the future expected cash flows associated with
the impaired asset.
Impairment provisions for trade receivables and other receivables are
recognised based on the simplified approach within IFRS 9 using lifetime
expected credit losses (ECLs). During this process the probability of
non-payment of receivables is assessed. This probability is then multiplied by
the amount of expected loss arising from the default to determine the ECL.
Financial liabilities
The Group classifies its financial liabilities in the category of financial
liabilities at amortised cost. All financial liabilities are recognised in the
statement of financial position when the Group becomes a party to the
contractual provision of the instrument. Trade and other payables and
borrowings are included in this category.
Borrowings
Borrowings are recognised initially at fair value, net of transaction costs
incurred. Borrowings are subsequently carried at amortised cost. Any
difference between the proceeds (net of transaction costs) and the redemption
value is recognised in the statement of comprehensive income over the period
of the borrowings using the effective interest method.
Borrowings are de- recognised from the balance sheet when the obligation
specified in the contract is discharged, is cancelled or expires. The
difference between the carrying amount of a financial liability that has been
extinguished or transferred to another party and the consideration paid,
including any non-cash assets transferred or liabilities assumed, is
recognised in profit or loss as other operating income or finance costs.
Borrowings are classified as current liabilities unless the Group has an
unconditional right to defer settlement of the liability for at least 12
months after the reporting period.
Trade and other payables
Trade and other payables are initially recognised at fair value and
subsequently measured at amortised cost using the effective interest method.
Accounts payable are classified as current liabilities if payment is due
within one year or less. If not, they are presented as non-current
liabilities.
j) Provisions
A provision is recognised in the balance sheet when the Group has a present
legal or constructive obligation as a result of a past event, and it is
probable that an outflow of economic benefit will be required to settle the
obligation. If the effect is material, provisions are determined by
discounting the expected future cash flows at a pre-tax rate that reflects the
current market assessment of the time value of money and where appropriate,
the risks specific to the liability.
k) Current and deferred tax
Tax represents the sum of current and deferred tax.
Tax payable or 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 consolidated statement of comprehensive income because it excludes items
of income or expense that are taxable or deductible in other years and further
excludes items that are never taxable or deductible. 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 amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profit and is accounted for using the balance sheet liability method.
Deferred tax liabilities are generally recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent that it is
probable that future taxable profits will be available, against which
deductible temporary differences can be utilised.
l) Pensions
Pension costs charged in the financial statements represent the contributions
payable by the Group during the year into defined contribution pension
schemes.
m) Foreign currencies
The individual financial statements of each Group entity are presented in the
currency of the primary economic environment in which the entity operates (its
functional currency). For the purpose of the financial statements, the results
and financial position of each entity are expressed in GBP.
In preparing the financial statements of the individual entities, transactions
in currencies other than the entity's functional currency (foreign currencies)
are recorded at the rates of exchange prevailing on the dates of the
transactions. At each balance sheet date, monetary items denominated in
foreign currencies are retranslated at the rates prevailing at the balance
sheet date.
Exchange differences arising on the settlement of monetary items and on the
retranslation of monetary items are included in the statement of comprehensive
income for the period.
For the purpose of presenting consolidated financial statements, the assets
and liabilities of the Group's foreign operations are expressed in GBP using
exchange rates prevailing at the balance sheet date. Income and expense items
are translated at the average exchange rates for the period. Exchange
differences arising, if any, are classified as other comprehensive income and
are transferred to the Group's translation reserve.
When the settlement of a monetary item receivable from or payable to a foreign
operation is neither planned nor likely in the foreseeable future, foreign
currency gains and losses arising from such items are considered to form part
of a net investment in the foreign operation and are recognised in other
comprehensive income and presented in the exchange reserve in equity.
n) Investments
Investments held as non-current assets comprise investments in subsidiary
undertakings and are stated at cost less any provision for impairment.
o) Share capital
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of ordinary shares are recognised as a deduction
from equity, net of any tax effects.
p) Share-based payments
The Group makes equity-settled share-based payments to certain Directors and
employees. Equity-settled share-based payments are measured at fair value at
the date of grant by reference to the fair value of the equity instruments
granted.
The fair value determined at the grant date of equity-settled share-based
payments is expensed on a straight-line basis over the vesting period, based
on the Group's estimate of the number of instruments that will eventually vest
with a corresponding adjustment to equity. Fair value is measured by use of
the Black Scholes model. The expected life used in the model has been
adjusted, based on management's best estimate, for the effect of
non-transferability, exercise restrictions, and behavioural considerations.
Non-vesting and market vesting conditions are taken into account when
estimating the fair value of the option at grant date. Service and non-market
vesting conditions are taken into account by adjusting the number of options
expected to vest at each reporting date.
q) Critical accounting estimates and judgements
The Group makes estimates and assumptions concerning the future. The resulting
estimates will, by definition, seldom equal the actual results. Estimates and
judgements are continually evaluated and are based on historical experience
and other factors, including expectations of future events that are believed
to be reasonable under the circumstances. Certain amounts included in the
financial statements involve the use of judgement and/or estimation. These
judgements and estimates are based on management's best knowledge of the
relevant facts and circumstances, but actual results may differ from the
amounts included in the financial statements. The Board has considered the
critical accounting estimates and assumptions used in the financial statements
and concluded that the areas of judgement that have the most significant
effect on the amounts recognised in the financial statements are as set out
below.
Recoverability of deferred exploration costs
All costs directly attributable to exploration are capitalised on a project
basis, pending a decision on the economic feasibility of the project. The
capitalisation of such costs gives rise to an intangible asset in the
consolidated and parent company statements of financial position. Exploration
costs are capitalised where it is considered likely that the amount will be
recovered by future exploitation, sale or alternatively where the activities
have not reached a stage which permits a reasonable assessment of the
existence of reserves. This requires management to make estimates and
assumptions as to the future events and circumstances, especially in relation
to whether an economically viable extraction operation can be established.
Such estimates are subject to change and should it become apparent that
recovery of the expenditure is unlikely, the relevant amount is written off in
the statement of comprehensive income.
Receivables from Group undertakings
The Company makes assumptions when implementing the forward-looking ECL model.
This model is used to assess intercompany loans for impairment.
Estimates are made regarding the credit risk and the underlying probability of
default in each of the credit loss scenarios. The scenarios identified by the
Company are production, divestment, fire-sale and failure. The Directors make
judgements on the expected likelihood and outcome of each of the scenarios,
and these expected values are applied to the loan balances.
4 Segmental reporting
During the year, the Group had one business segment which was exploration for
gold and copper resources in Australia. Accordingly, no segmental analysis is
appropriate.
5 Staff costs
Number of employees
The monthly average number of employees (excluding Directors) of the Group
during the year was:
2021 2020
No. No.
Technical 2 1
Employment costs (excluding directors) 2021 2020
£ £
Wages and salaries 106,422 95,817
Post-employment benefits 10,363 9,103
Total 116,785 104,920
Directors' emoluments
2021
Short-term benefits Post-employment benefits Total
£ £ £
David W Price 150,000 14,639 164,639
Gordon Hart 79,992 7,985 87,977
Ian Staunton 30,000 - 30,000
Patrick Elliott 28,000 - 28,000
Nicholas Walley 30,000 - 30,731
Total 317,992 22,624 340,616
2020
Short-term benefits Post-employment benefits Total
£ £ £
David W Price 150,000 14,249 164,249
Gordon Hart 85,826 8,334 94,160
Ian Staunton 30,000 - 30,000
Patrick Elliott 28,000 - 28,000
Nicholas Walley 30,000 - 30,000
Total 323,826 22,583 346,409
The key management personnel of the Group are considered to be the Directors.
6 Operating loss
Operating loss is stated after charging:
2021 2020
£ £
Fees payable to the Group auditor for the audit of the Group and Company 24,750 24,000
financial statements
Fees payable to the Group auditor for the taxation services 1,850 1,850
Impairment of intangible assets 12,334 12,324
7 Taxation
2021 2020
£ £
Factors affecting tax charge for the year
Loss on ordinary activities before taxation (744,953) (719,987)
Loss on ordinary activities at the UK standard rate of 19% (2020: 19%) (141,541) (136,798)
Effects of:
UK carried forward losses 82,253 72,634
Non-deductible expenses 24,491 22,155
Losses of overseas subsidiaries carried forward 34,797 42,008
Current tax charge - -
The Group has estimated UK tax losses of approximately £5,061,000 (2020:
£4,628,000), and Australian tax losses of approximately £863,000 (2020:
£680,000) available to carry forward against future trading profits. The
Group has not recognised a deferred tax asset on any losses carried forward
due to the uncertainty of future profits.
8 Earnings per share
2021 2020
£ £
Loss for the purpose of basic and diluted loss per share (744,953) (719,987)
Weighted average number of ordinary shares for the purpose of basic and 974,997,979 725,751,806
diluted loss per share
Loss per share - basic (pence) (0.08) (0.10)
Loss per share - diluted (pence) (0.08) (0.10)
Earnings per share has been calculated by dividing the loss for the year by
the weighted average number of ordinary shares in issue during the year.
9 Intangible assets
Group Exploration costs
£
At 1 January 2020 1,731,760
Additions 821,278
Impairment (12,324)
Foreign exchange differences 114,482
At 31 December 2020 2,655,196
At 1 January 2021 2,655,196
Additions 918,667
Impairment (12,334)
Foreign exchange differences (113,790)
At 31 December 2021 3,447,739
As at 31 December 2021, the Group had future commitments of £9,342,018 in
relation to exploration projects:
Rent Minimum
spend
£ £
1 year 61,143 1,162,132
Later than 1 year but no more than 5 years 811,341 7,307,402
Total 872,484 8,469,534
Company Exploration costs
£
At 1 January 2020 -
At 31 December 2020 -
At 1 January 2021 -
Additions 13,380
At 31 December 2021 13,380
10 Property, plant and equipment
Group Motor vehicles Office equipment Total
£ £ £
Cost
At 1 January 2020 12,963 - 12,963
Additions 15,833 3,011 18,844
Foreign exchange differences 1,649 154 1,803
At 31 December 2020 30,445 3,165 33,610
At 1 January 2021 30,445 3,165 33,610
Additions - 2,690 2,690
Foreign exchange differences (1,468) (178) (1,646)
At 31 December 2021 28,977 5,677 34,654
Depreciation
At 1 January 2020 2,593 - 2,593
Charge for the year - 769 769
Depreciation capitalised 4,125 - 4,125
Foreign exchange differences 379 38 417
At 31 December 2020 7,097 807 7,904
At 1 January 2021 7,097 807 7,904
Charge for the year - 2,619 2,619
Depreciation capitalised 4,433 - 4,433
Foreign exchange differences (417) (74) (491)
At 31 December 2021 11,113 3,352 14,465
Net book value
At 31 December 2020 23,348 2,358 25,706
At 31 December 2021 17,864 2,325 20,189
Company Office equipment Total
£ £
Cost
At 1 January 2020 - -
At 31 December 2020 - -
At 1 January 2021 - -
Additions 1,150 1,150
At 31 December 2021 1,150 1,150
Depreciation
At 1 January 2020 - -
Charge for the year - -
At 31 December 2020 - -
At 1 January 2021 - -
Charge for the year 460 460
At 31 December 2021 460 460
Net book value
At 31 December 2020 - -
At 31 December 2021 690 690
11 Investments
Company 2021 2020
£ £
At beginning and end of the year 648,000 648,000
The Group's subsidiary undertakings at 31 December 2021, were as follows:
Proportion held Class of shareholding Nature of business Country of incorporation Registered office
Papua Mining Limited 100% Ordinary Dormant British Virgin Islands c/o AA Corporate Management 13, Boulevard Princesse Charlotte, Monte Carlo,
Monaco, MC98000
BGM Investments Pty Limited 100% Ordinary Exploration Australia c/o WSC Group Accountants, 11/800-812 Old Illawarra Road, Menai, NSW 2234,
Australia
12 Trade and other receivables
2021 2020
Group £ £
Other receivables 124,261 38,240
2021 2020
Company £ £
Amounts owed by Group undertakings 3,493,473 2,552,123
Other receivables 79,860 14,545
Total 3,573,333 2,566,668
Receivables due from Group undertakings are net of ECLs of £618,869 (2020:
£450,387). Other receivables comprise prepayments.
13 Share capital
Group and Company
Issued share capital 2021 2020
No. No.
Ordinary shares of £0.001 each 1,082,466,125 832,415,592
Deferred shares of £0.099 each 51,215,534 51,215,534
2021 2020
£ £
Balance at the beginning of the year 6,828,085 6,625,077
Shares issued during the year 250,051 203,008
Balance at 31 December (fully paid) 7,078,136 6,828,085
Issues of ordinary shares
On 16 February 2021, the Company announced that 1,152,861 new ordinary shares
had been issued to Patrick Elliot in settlement of Director's fees for the
period 01 October 2020 to 31 December 2020, at a price of 0.87p.
On 06 May 2021, the Company announced that 121,429,200 new ordinary shares had
been issued, raising gross proceeds of £850,000.
On 26 July 2021, the Company announced that it completed a placing of
125,000,000 new ordinary shares, raising gross proceeds of £1,000,000.
On 06 August 2021, the Company announced that 1,640,069 new ordinary shares
had been issued to Patrick Elliot in settlement of Director's fees for the
period 01 January 2021 to 30 June 2021, at a price of 0.85p.
On 16 December 2021, the Company announced that 828,403 new ordinary shares
had been issued to Patrick Elliot in settlement of Director's fees for the
period 01 July 2021 to 30 September 2021, at a price f 0.85p.
The GBP value of fully paid issued share capital includes an historical
cumulative translation difference of £925,332, being the effect of the
Group's presentational currency being US$ prior to 2017.
14 Reserves
Share premium
The share premium account represents amounts subscribed for share capital in
excess of nominal value, net of directly attributable issue costs.
Foreign currency translation reserve
Cumulative gains and losses on translating the net assets of overseas
operations to the presentation currency.
Other reserves
Represents the reserve arising from a share for share exchange as part of a
group reorganisation in 2011.
15 Share options and warrants
Share options
2021 2020
Options Weighted Options Weighted
average exercise average exercise
price price
No. £ No. £
Outstanding at 1 January 18,000,000 0.02 9,000,000 0.02
Granted during the year 36,000,000 0.02 18,000,000 0.02
Lapsed during the year - - (9,000,000) 0.02
Outstanding at 31 December 54,000,000 0.02 18,000,000 0.02
Exercisable at 31 December 54,000,000 0.02 18,000,000 0.02
The weighted average life of the outstanding and exercisable options was 2
years and 163 days effective from 31 December 2021.
On 26 February 2021, 36,000,000 options to subscribe for new ordinary shares
in the Company were granted to Directors and employees. The options are
exercisable at £0.02 for three years from the date of grant.
The fair value of the options granted during the year were calculated using
the Black Scholes Model with the following assumptions:
Risk free interest
rate
0.224%
Expected
volatility
110.938%
Expected dividend
yield
0.00%
Life of the
option
1.5 years
Share price at measurement
date £0.01
£116,049 has been recognised as a share-based expense in the Statement of
Comprehensive Income related to the grant of share options.
Share options held by Directors were as follows:
2021 2020
No. No.
David W Price 10,000,000 -
Gordon Hart 10,000,000 -
Ian Staunton 6,000,000 6,000,000
Patrick Elliot 6,000,000 6,000,000
Nicholas Walley 6,000,000 6,000,000
Warrants 2021 2020
Warrants Weighted Warrants Weighted
average exercise average exercise
price price
No. £ No. £
Outstanding at 1 January 30,899,999 0.010 103,968,628 0.013
Lapsed during the year - - (58,235,295) 0.015
Exercised during the year - - (14,833,334) 0.010
Outstanding and exercisable at 31 December 30,899,999 0.010 30,899,999 0.010
The weighted average life of the outstanding and exercisable warrants was 279
days effective from 31 December 2021.
16 Trade and other payables
2021 2020
Group £ £
Trade payables 47,006 31,040
Other payables 17,128 26,390
Accruals 46,250 39,000
Total 110,384 96,430
2021 2020
Company £ £
Trade payables 46,242 9,928
Other payables 3,086 1,658
Accruals 35,657 39,000
Total 84,985 50,586
17 Financial instruments
In common with other businesses, the Group is exposed to risks that arise from
its use of financial instruments. This note describes the Group's objectives,
policies and processes for managing those risks and the methods used to
measure them. Further quantitative information in respect of these risks is
presented throughout these financial statements.
The significant accounting policies regarding financial instruments are
disclosed in note 3.
The Group does not have any derivative products or any long-term borrowings.
The Group is not exposed to interest-bearing indebtedness. The exploration
activities of the Group are financed by the proceeds of share issues.
Principal financial instruments
The principal financial instruments used by the Group, from which financial
instrument risk arises, are as follows:
2021 2020
Group £ £
Financial assets
Cash and cash equivalents 1,473,599 1,350,926
Trade and other receivables - -
Total 1,473,599 1,350,926
Financial liabilities
Trade payables 47,007 31,040
Other payables 62,650 55,255
Total 109,657 86,295
Company
Financial assets
Cash and cash equivalents 1,420,801 1,236,174
Trade and other receivables 4,112,412 3,002,580
Total 5,533,213 4,238,754
Financial liabilities
Trade payables 46,242 9,932
Other payables 38,746 38,269
Total 84,988 48,201
The Directors consider that the fair value of the above financial instruments
is equal to the carrying values.
General objectives, policies and processes
The Directors have overall responsibility for the determination of the Group's
risk management objectives and policies. The Board regularly reviews the
effectiveness of the processes put in place and the appropriateness of the
objectives and policies it sets.
The overall objective of the Directors is to set policies that reduce risk as
far as possible without unduly affecting the Group's competitiveness and
flexibility.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or
counterparty to a financial instrument fails to meet its contractual
obligations.
The carrying amount of financial assets represents the maximum credit
exposure. The maximum exposure to credit risk at the reporting date was as
follows:
2021 2020
Group £ £
Financial assets
Cash and cash equivalents 1,473,599 1,350,926
Trade and other receivables - -
Total 1,473,599 1,350,926
Company
Financial assets
Cash and cash equivalents 1,420,801 1,236,174
Trade and other receivables 4,112,412 3,002,580
Total 5,533,213 4,238,754
Liquidity risk
Liquidity risk relates to the ability of the Group to meet future obligations
and financial liabilities. To date the Group has relied upon shareholder
funding of its activities. Future exploration and development activities is
dependent upon the Group's ability to obtain further financing through equity
financing or other means.
The following table shows the Group's financial liabilities:
2021 2020
Group £ £
Financial liabilities
Trade payables 47,007 31,040
Other payables 62,650 55,255
Total 109,657 86,295
Company
Financial liabilities
Trade payables 46,242 9,932
Other payables 38,746 38,269
Total 84,988 48,201
The financial statements have been prepared on a going concern basis and note
3(d) provides further information in this regard.
Foreign currency risk
Foreign currency risk refers to the risk that the value of a financial
commitment, recognised asset or liability will fluctuate due to changes in
foreign currency rates.
The Group operates primarily in Australia. Transactions are substantially
denominated in Australian dollars (AUD) and GBP. As such the Group is exposed
to transaction foreign exchange risk. The mix of currencies and terms of trade
with its suppliers are such that the Directors believe that the Group's
exposure is minimal and consequently they have not, to date, specifically
sought to hedge that exposure. Most of the Group's funds are in GBP with only
sufficient funds held overseas to meet local costs. The Group and Company's
net exposure to foreign currency risk at the reporting date is as follows:
Group Company
Net foreign currency financial Year Year Year Year
(liabilities)/assets ended 31 December 2021 ended 31 December 2020 ended 31 December 2021 ended 31 December 2020
£ £ £ £
AUD 69,075 93,775 (2,727) 364
Sensitivity analysis
The following table details the impact of changes in foreign exchange rates on
financial assets and liabilities at the balance sheet date, illustrating the
(decrease)/increase in Group operating result caused by a 10 per cent
strengthening of GBP compared to the year-end spot rate. The analysis assumes
that all other variables remain constant.
Profit or loss Equity
Net foreign currency financial Year Year Year Year
(liabilities)/assets ended 31 December 2021 ended 31 December 2020 ended 31 December 2021 ended 31 December 2020
£ £ £ £
AUD (6,907) (9,377) (6,907) (9,377)
Commodity price risk
Commodity price risk is the risk that the Group's future earnings will be
adversely impacted by changes in the market prices of commodities. The Group
is not currently exposed to commodity price risk, but future revenues will be
determined by reference to market commodity prices.
Capital management
The Group's objectives when managing capital is to maintain its ability to
continue as a going concern in order to provide returns for shareholders and
benefits for other stakeholders and to ensure sufficient resources are
available to meet day to day operating requirements. The Group defines capital
as 'equity' and 'cash' as shown in the consolidated statement of financial
position. As at 31 December 2021 the Group held equity and cash balances of
£4,955,404 and £1,473,599 (2020: £3,974,781 and £1,350,926), respectively.
The Board takes full responsibility for managing the Group's capital and does
so through Board meetings and reviews of financial information.
The Group's policy is to invest its cash in deposits with high credit worthy
financial institutions with short term maturity.
18 Related party transactions
During the year, the Company advanced funds to BGM Investments Pty Ltd
totalling £1,109,832 (2020: £1,203,413). The loan is repayable in GBP on
demand and as at 31 December 2021, £4,112,412 (2020: £3,002,924) was
outstanding. A cumulative expected credit loss ("ECL") of £618,869 (2020:
£450,387) has been recognised at the year-end in respect of the loan.
19 Subsequent events
On 8 March 2022, Rockfire announced the winning of an Open International
Tender for a 30-year licence to explore and mine the high-grade Molaoi
Zn/Pb/Ag deposit, located in the Hellenic Republic of Greece. Rockfire
participated in the tender under a Memorandum of Understanding with a local
Greek company, Hellenic Minerals IKE ("Hellenic"), the applicant in the
tender. Subsequently, Rockfire has now acquired 100% of the shares in
Hellenic. The award of the licence to Hellenic and the acquisition of Hellenic
means that Rockfire owns 100% of the rights in the project. Molaoi is an
outstanding high-grade zinc deposit, and the addition of the project
strategically complements Rockfire's existing portfolio of precious and base
metal assets.
On 18 March 2022, the Company issued 1,228,070 new ordinary shares to Patrick
Elliott in settlement of Director's fees.
On 13 May 2022, the Company issued 1,750,000 new ordinary shares to Patrick
Elliott in settlement of Director's fees.
On 16 May 2022, the Company issued 50,000,000 new ordinary shares to the
vendors of Hellenic Minerals as settlement of Tranche 1 of the acquisition
agreement for the Molaoi project in Greece. David Price (or his related party
nominees) was issued 25,000,000 of these new ordinary shares in the Company as
per the historic agreement which is outlined in the Strategic Report.
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