REG - Sunrise Resources - Audited Results for the year to 30 September 2022
13/12/2022 09:30
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20221213:nRSM5309Ja&default-theme=true
RNS Number : 5309J Sunrise Resources Plc 13 December 2022
SUNRISE RESOURCES PLC
("the Company")
AIM
Announcement
13 December 2022
Audited Results for the year to 30 September 2022
The Board of Sunrise Resources plc, the AIM-traded company, is pleased to
announce its audited results for the year ended 30 September 2022. The Company
will announce posting of its results which will be published on the Company's
website along with the Notice of the AGM in due course.
Operational Highlights for 2022
· Focus continues on development of the fully mine permitted CS
natural pozzolan and perlite deposit in Nevada.
· New developments during the year at the Hazen pozzolan and Pioche
sepiolite project as Company's business evolves in the industrial minerals
sector in Nevada.
· The depth of the Company's project portfolio of industrial
mineral and precious metal projects underlined this year with agreements
signed with major companies at our Pioche and Jackson's Wash projects.
CS Pozzolan-Perlite Project, Nevada, USA
Pozzolan
· Discussions held with multiple parties aimed at joint
development, custom testwork programmes completed by interested parties.
· Board is working on strategies to maximise the value of the
project and to demonstrate this value to our shareholders.
· CS Natural Pozzolan has now been conditionally approved by the
California Department of Transport ("Caltrans") for use in California State
infrastructure projects, having successfully passed compliance testing.
· Industry feedback continues to highlight the use of natural
pozzolan in key strategies being employed in the cement and concrete
industries towards net-zero CO2 emissions.
Perlite
· Customer testing continues including, most recently, by one of
the country's largest consumers of raw perlite.
Hazen Pozzolan Project, Nevada, USA
· Targeting distinct regional markets in northern California and
northern Nevada.
· Collaborative arrangement with an existing processor of natural
pozzolan for bulk sampling and commercial scale test grind
· 250-ton sample extracted; test grinding in progress, results
awaited.
Pioche Sepiolite Project, Nevada, USA
· Option to Purchase granted to US subsidiary of Spanish company
Tolsa S.A. ("Tolsa"), the world's largest producer of Sepiolite.
· Option can be exercised by payment of US$1.25 in cash and 3% net
revenue royalty for a 25-year period from the commencement of commercial
production (20% Finders fees payable to an independent third party).
· Surface mapping programme completed by Tolsa in July has
identified multiple sepiolite horizons throughout the project area.
· Trenching programme completed; samples being tested in Spain,
results awaited
· Sepiolite, an industrial mineral, has unique characteristics, is
scarce, with very few commercial deposits in the world.
Other Projects
Jacksons Wash, Nevada, USA
· Lease/purchase option agreement signed with Kinross early in the
reporting period. Active exploration planned for 2023.
Baker's Gold Project, Western Australia
· Mining lease application in progress. Agreement with Native Title
holder required prior to grant, and strategy under review.
More detailed information follows.
Further information:
Sunrise Resources plc Tel: +44 (0)1625 838 884
Patrick Cheetham, Executive Chairman
Tel: +44 (0)207 628 3396
Beaumont Cornish Limited
Nominated Adviser
James Biddle/Roland Cornish
Tel: +44 (0)207 469 0930
Peterhouse Capital Limited
Broker
Lucy Williams/Duncan Vasey
Market Abuse Regulation (MAR) Disclosure
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 which forms part of UK domestic law by virtue of the
European Union (Withdrawal) Act 2018 ('MAR'). Upon the publication of this
announcement via a Regulatory Information Service ('RIS'), this inside
information is now considered to be in the public domain.
Qualified Person Information:
The information in this release has been compiled and reviewed by Mr. Patrick
Cheetham (MIMMM, MAusIMM) who is a qualified person for the purposes of the
AIM Note for Mining and Oil & Gas Companies. Mr. Cheetham is a Member of
the Institute of Materials, Minerals & Mining and also a member of the
Australasian Institute of Mining & Metallurgy.
Chairman's Statement
Dear Shareholders,
I am pleased to present your Annual Report for 2022 which covers the financial
year ended 30 September 2022.
Our strategy continues to be to advance our fully mine permitted CS natural
pozzolan and perlite deposit in Nevada, whilst new developments during the
year at the Hazen pozzolan and Pioche sepiolite projects have seen the
Company's business evolve more broadly in the industrial minerals space in
Nevada.
In the first half of this year, following successful commercial trials of CS
natural pozzolan with a large cement and ready-mix company, our expectations
were high that a joint development agreement would be reached with that
company. However, we terminated negotiations after they became unnecessarily
protracted and have since prioritised discussions with other potential
partners. These companies have all required further samples for testing with
their own cements and concrete blends. This work has progressed throughout the
year and has now been successfully completed in each case confirming CS
pozzolan's high quality as a natural pozzolan. The Board is working hard to
capitalise this third-party interest and now that additional funds have been
secured, the Board is working on strategies to maximise the value of the
project and to demonstrate this value to our shareholders.
For example, a significant milestone for the CS Project this year was the
conditional approval of the CS natural pozzolan by the California Department
of Transport ("Caltrans"), the Government body responsible for the award of
State funded infrastructure construction projects in California. Caltrans
mandates the use of supplementary cementitious materials ("SCMs") such as
natural pozzolan in order to improve the durability and sustainability of
their projects and many concrete specifiers also look to this list as an
independent endorsement when specifying for a wider range of non-Caltrans
projects.
We also continue to advance the testing of the perlite from our CS Project and
further details are provided in the Operating Review. Previous testwork has
identified a number of potential customers and others are in the process of
testing our material including, most recently, one of the largest consumers of
raw perlite in the US.
In October I was pleased to announce the start of a collaborative arrangement
with an existing processor of natural pozzolan for mining and commercial scale
test grinding of a bulk sample from our second pozzolan project at Hazen,
Nevada. The CS Project is targeting the cement and concrete markets of
southern California and southern Nevada-Las Vegas, whilst our newer Hazen
Pozzolan Project is more favourably located for the cement and concrete
markets in northern California and northern Nevada. Approximately 250 tons of
natural pozzolan have been extracted from Hazen at no cost to Sunrise and is
currently being processed. The collaborative partner has the processing
facilities and marketing network to commercialise the Hazen deposit in the
future.
In May this year we issued an article through RNS Reach that highlighted the
key role that natural pozzolan has in cement decarbonisation in the western
USA and within multiple CO(2) net-zero strategies in the cement and concrete
industries, as well as its function in building more durable and sustainable
concrete structures. The energy crisis this year has served to reduce the rate
of decline of fly ash availability as some coal-fired power stations due to
close have been temporarily kept open, but this declining trend is set to
continue and our pozzolans are a natural replacement.
The depth of the Company's project portfolio of industrial mineral and
precious metal projects was underlined this year with agreements signed with
major companies at our Pioche and Jackson's Wash projects.
The Pioche Sepiolite Project has quickly risen to prominence after the world's
largest sepiolite producer, the Spanish company Tolsa S.A., took an option to
purchase the project. Sepiolite is a rare and valuable clay with unique
absorptive and gelling properties and only a handful of commercial deposits
around the world.
We have been very encouraged by the rapid start Tolsa has made in its
evaluation of the Pioche Project. In the summer, Tolsa completed a thorough
programme of surface mapping and evaluation, identifying multiple horizons of
sepiolite below our original discovery level and this autumn has completed a
programme of trenching to provide further exposures of the mineralisation to
enable a better evaluation of the thicknesses and quality of the Pioche
sepiolite deposits. Sepiolite samples from the trenching are being tested in
Spain and results are eagerly awaited. Tolsa must make an election to continue
its option by the end of this December 2022.
Earlier this year we granted a lease/option to purchase our Jackson's Wash
claims to global gold producer Kinross Gold U.S.A. Inc. who is actively
exploring in the vicinity of our Jackson's Wash claims. If Kinross elect to
purchase the claims, we will hold a 2.5% Net Smelter Royalty on production. We
continue to hold royalty interests in the Garfield and Stonewall projects in
Nevada held by AIM aspirant Golden Metal Resources Ltd, and in the Junction
Copper Project held by TSX-V listed VR Resources Limited.
The Company is progressing its mining lease application at the Bakers Gold
Project in Western Australia where the mining law requires that the Company
reach agreement with the regional Native Title holder for its application to
be granted . The Company could face high legal costs to progress this
application but is considering options to defer those costs until such time as
the project is more advanced. Whilst the Company has yet to progress
discussions with the Native Title holder, in view of these potential costs, it
has taken the prudent step to impair the value for this project in the
Company's accounts until such time as the position is clearer when the
impairment could be reversed. Similarly, the value of the Myrtle Project was
impaired following the receipt of drilling results from a prior explorer which
downgraded the prospectivity of the Company's claim block.
Our activities this year have been funded out of existing cash resources, a
modest fund raise of £100,000 in July and the sale of the majority of our
shares in Power Metal Resources. After the year end, we closed an up to
£480,000 two-year convertible note financing facility with Net Zero
Strategies LLC, a US investment fund focused on the green economy. This
provides options on the amount we drawdown and the number of shares that may
need to be issued under the arrangement will, by-and-large, be based on our
future share price performance which was preferable to the prospect of a
placing at a discount to the current price.
At our next Annual General Meeting, to be held in London on 17 February 2023,
we will be proposing Mr Murphy for re-election and seeking approval for
resolutions to allow for the issue of new shares. I urge shareholders to
support these resolutions as, without their approval, the Company cannot raise
the funds it needs to continue as a going concern. For those who cannot attend
the AGM we are encouraging shareholders to appoint the Chairman as their
proxy.
With the CS Project, Hazen and Pioche, we now have three key projects moving
forward as well as a strong portfolio of royalty interests and wholly owned
projects available for joint venture or disposal. There are several potential
value catalysts within the Company's project portfolio and your Board believes
we can look forward to productive developments in 2023. I look forward to
reporting further progress.
Patrick Cheetham
Executive Chairman
9 December 2022
Strategic Report
The Directors of the Company and its subsidiary undertakings (which together
comprise "the Group") present their Strategic Report for the year ended 30
September 2022.
The principal activity of the Company is the acquisition, exploration and
development of mineral projects, primarily in the western USA.
Our strategy is to develop the CS Pozzolan-Perlite Project and other key
projects through to profitable production in order that the Company's
activities become self-funding and to unlock the value inherent in its
portfolio of mineral projects through sale, joint venture or other
arrangements, retaining royalty interests where possible.
The Company's Business Model is to acquire 100% ownership of mineral assets at
minimal expense. This usually involves staking claims as was the case for the
CS and NewPerl Projects or applying for exploration licences from the relevant
authority, as was the case in Australia. In other cases, rights are negotiated
with existing project owners for initially low periodic payments that rise
over time as confidence in the project value increases and this was the case
for the Bay State Silver Project.
The Group currently operates with a low-cost base to maximise the funds that
can be spent on value adding exploration and development activities. The
Company's administration costs are reduced via a cost sharing Management
Services Agreement with Tertiary Minerals plc.
The Strategic Plan is on track although the timeframe for first commercial
production from the CS Project has moved out due to delays in customer trials
and protracted offtake negotiations. Further details of our progress on the CS
Project are given in the Operating Review.
The Company's activities are financed by periodic capital raisings, through
private share placings and the issue of other financial instruments. For more
advanced projects such as the CS Project the Board will seek to secure
additional funding from a range of sources, for example debt funding,
pre-financing through offtake agreements and other joint arrangements.
Over the past few years, the Company has established a valuable portfolio of
drill-ready precious metal, base metal and industrial mineral projects. Our
strategy remains to valorise those projects through sale or other arrangements
seeking, wherever possible, free-carried exposure to increases in value and
production from the projects. Examples during the year include the agreement
with Kinross Gold on the Jacksons Wash Project and the agreement with Tolsa
USA Inc. on the Pioche Sepiolite Project as detailed in the Operating Review,
both of which include retained royalty interests.
Organisation Overview
The Group's business is directed by the Board and is managed by the Executive
Chairman. The Company has a Management Services Agreement with Tertiary
Minerals plc ("Tertiary") which was the original parent of the Company. Under
this cost sharing agreement, Tertiary provides all of the Company's
administration and technical services, including the technical and management
services of the Executive Chairman, at cost. Day-to-day activities are managed
from Tertiary's offices in Macclesfield in the United Kingdom, but the Group
operates in two other countries and the corporate structure of the Group
reflects the historical pattern of project acquisition by the Group and the
need, where appropriate, for fiscal and other reasons, to have incorporated
entities in particular territories.
The Group's exploration activity in Nevada, USA, is undertaken through two
local subsidiaries, SR Minerals Inc. and Westgold Inc.
In Australia the Company operates through an Australian subsidiary, Sunrise
Minerals Australia Pty Ltd.
The Board of Directors comprises two independent non-executive directors and
the Executive Chairman. The Executive Chairman is also Executive Chairman of
Tertiary, but otherwise the Board is independent of Tertiary. Tertiary is not
a significant shareholder (as defined under the AIM Rules) in the Company.
Financial & Performance Review
The Group is not yet producing minerals and so has no income other than a
small amount of bank interest. Consequently, the Group is not expected to
report profits until it disposes of or is able to profitably develop or
otherwise realise the value of its exploration and development projects.
The Group reports a loss of £478,223 for the year (2021: £335,252) after
administration costs of £291,860 (2021: £318,630). The loss includes
expensed pre-licence and reconnaissance exploration costs of £5,638 (2021:
£17,320), impairment of exploration assets of £194,247 (2021: £30,021) and
other income of £13,474. Administration costs include a charge of £1,087
(2021: £19,663) relating to the value of certain share warrants held by
employees of Tertiary Minerals Plc and by third parties calculated in
accordance with IFRS 2. Cash administration costs were £290,773 (2021:
£298,967).
The Financial Statements show that, at 30 September 2022, the Group had net
current assets of £155,776 (2021: £399,384). This represents the cash
position and receivables, less trade and other payables. These amounts are
shown in the Consolidated and Company Statements of Financial Position and are
also components of the Net assets of the Group. Net assets also include
various "intangible" assets of the Company. As the term suggests, these
intangible assets are not cash assets but include some of this year's and
previous years' expenditure on mineral projects where that expenditure meets
the criteria in Note 1(d) of the accounting policies. The intangible assets
total £2,503,812 (2021: £2,133,137) and a breakdown by project is shown in
Note 2 to the financial statements. Sterling weakness at the end of the
reporting period has had a positive effect on the value of intangible assets
denominated in US Dollars in the Company's US subsidiaries.
Details of intangible assets, property, plant and equipment, investments and
right of use assets are also set out in Notes 8, 9, 10 and 17 of the financial
statements.
Net assets also include the market value at year end of shares in VR Resources
Ltd and Power Metal Resources plc which are held as "available for sale"
investments as set out in Note 8.
Impairment
Expenditures which do not meet the criteria for capitalisation as exploration
and evaluation costs according to Note 1(d), such as pre-licence and
reconnaissance costs, are expensed and added to the Company's loss. The loss
reported in any year can also include expenditure for specific projects
carried forward in previous reporting periods as an intangible asset but which
the Board determines is "impaired" in this reporting period.
It is a consequence of the Company's business model that there will be
impairments of unsuccessful exploration projects from time to time. The extent
to which expenditure is carried forward as intangible assets is a measure of
the extent to which the value of the Company's expenditure is preserved.
Biannual reviews are carried out by the Directors as to whether there are any
indications of impairment of the Group's assets.
An impairment review of the carrying values of exploration and development
projects (and in the Company, the associated intercompany loans) as at
30 September 2022 was undertaken by the Directors under IFRS 6 and IAS 36. As
a result of the year-end review it was judged that the Bakers Project and
Myrtle Project expenditure were impaired. In the Company, the Sunrise Mineral
Australia Pty Ltd loan was also fully provided against. Further information on
the reasons for impairment can be found in the Operating Review. Projects
which are held for sale or joint venture have not been impaired as it is
anticipated that their carrying values will be recovered through sale or
through residual joint venture interests in future.
The intangible asset value of a project, shown at cost, should not be confused
with the realisable or market value of a particular project which will, in the
Directors' opinion, be at least equal in value and often considerably higher.
Hence the Company's market capitalisation on the AIM Market is usually in
excess of the net asset value of the Group.
The Company finances its activities through periodic capital raisings and
asset sales. As the Company's projects become more advanced there may be
strategic opportunities to obtain funding for some projects through joint
venture, production sharing, royalty and other marketing arrangements.
Key Performance Indicators
The financial statements of a mineral exploration and development company can
provide a moment in time snapshot of the financial health of a company but do
not provide a reliable guide to the performance of the Company or its Board.
The usual financial key performance indicators ("KPIs") are neither applicable
nor appropriate to measurement of the value creation of a company which is
involved in mineral exploration and development which currently has no
turnover. The Directors consider that the detailed information in the
Operating Review is the best guide to the Group's progress and performance
during the year.
Company does seek to reduce overhead costs, where practicable, and is
reporting administrative costs this financial year of £291,860 (2021:
318,630).
In exploring for valuable mineral deposits, we accept that not all our
exploration will be successful but also that the rewards for success can be
high. We therefore expect that our shareholders will be invested for the
potential for capital growth taking a long-term view of management's track
record in mineral discovery and development.
Fundraising
The Directors prepare annual budgets and cash flow projections that extend
beyond 12 months from the date of approval of this report. Given the Group's
cash position at year end (£96,126), these projections include the proceeds
of future fundraising necessary within the next 12 months to meet the Group's
overheads and planned discretionary project expenditure. The successful
raising of finance is required based on projections to enable the Group and
Company to meet their liabilities as they fall due and continue to operate on
a going concern basis.
Operating Review
The Company has continued its operations in Nevada, USA and Western Australia
with progress made on three key projects during the year.
Our focus continues to be the development of the CS Pozzolan-Perlite Project
but progress has also been made on our Hazen Pozzolan Project and our Pioche
Sepiolite Project, and the Company continues to unlock its valuable portfolio
of precious and base metal projects that can provide potential additional
growth and value accretion opportunities in future.
The CS Project is held in the Company's 100% owned subsidiary, SR Minerals
Inc. The Group's other Nevada projects are held through SR Minerals Inc. and
Westgold Inc. and its Baker's Gold project in Australia is held through an
Australian subsidiary, Sunrise Minerals Australia Pty Ltd.
SR MINERALS INC.
CS Pozzolan-Perlite Project, Nevada
The CS Project is located near Tonopah, in Nevada, USA, and contains deposits
of both natural pozzolan and perlite in three separate zones - the Main Zone,
the Tuff Zone and the Northeast Exploration Area.
The project is "mine ready" with the key permits required to operate the CS
Project in place and with no time constraints on when mining must start, save
for periodic renewals of the air quality permit and payment of annual claim
fees.
Natural Pozzolan
Natural pozzolan is a cementitious material that is used to partially replace
and reduce the use of Portland cement in concrete and mortars, a major source
of greenhouse gas. Natural pozzolan takes the place of coal fly ash pozzolans,
the supply of which is rapidly declining in the western world due to the
closure of coal-fired power stations.
The use of natural pozzolan in cement and concrete mixes requires that the
pozzolan be ground to a fine size before use and so the production options
being considered by the Company are:
· Direct use of run-of-mine or crushed ore and by-product perlite
by cement companies in their grinding facilities.
· Construction of a fixed process plant to grind the crushed
natural pozzolan for sale to cement companies and ready-mix concrete
companies.
Pozzolan can be crushed, if necessary, using the same mobile plant used for
perlite crushing and so the first of these options has the lowest capital and
operating cost but a fewer number of potential customers who would need to
have their own pozzolan grinding capacity.
Perlite
Perlite is a glassy raw material which expands on heating by up to 20 times in
volume into a white or pale coloured low-density material. Expanded perlite is
used in various industrial and household applications such as insulation,
paint texturing, plaster and concrete fillers, building materials fillers,
formed insulation and fire proofing. It also has application as filter aids,
insulating industrial cryogenic storage vessels and as a potting medium in
gardening and horticulture to aid water retention and aeration of the soil.
One of the largest areas of growing demand is for large scale hydroponic
farming resultant of the legalisation of cannabis in many states. Perlite is
also a natural pozzolan.
According to the United States Geological Survey ("USGS"), 860,000 tons of raw
perlite was mined in the USA in 2021, up by 2% on 2020. The consumers of raw
perlite are split between independent expanders and downstream integrated
mining-perlite expanding companies.
Two production options have been considered for perlite:
· Production of coarse horticultural grade perlite using mobile
crushing and screening equipment and use of undersized perlite as natural
pozzolan; and
· Construction of a fixed perlite processing plant to produce a
range of raw perlite products in coarse, medium and fine grades.
The first of these two options is attractive as production can start quickly
at a relatively low capital cost as the mobile plant is available from the
quarry industry and can be bought, rented or leased, subject to availability.
The Company's air quality permit, which primarily applies to an on-site
process plant, is based on the first of these options.
Different grinding technologies, plant capital and operating costs have been
considered for the second option of a stand-alone perlite grinding plant.
The Company has permission to construct the onsite fixed perlite processing
plant set out in the second option. This option has already been designed and
costed. However, it may be preferable to construct this at a more suitable,
rail-linked site elsewhere in Nevada.
Customer Trials and Discussions with Potential Customers
Natural pozzolan
The value of the market for pozzolan is substantially larger than that for
perlite and so the Company's focus to date has been on securing a partner from
within the cement and concrete industry that has existing grinding capacity
such that raw pozzolan can be supplied as direct mined ore.
During the first half of the reporting period, and for a protracted period
last year, the Company had been working with a large cement and ready-mix
company ("CRMC") in providing samples for industrial-scale application
testing, holding regular negotiations and discussing terms for a joint
development of the CS Natural Pozzolan-Perlite Project. However, in March
this year the Company terminated further negotiations with that CRMC as the
already extended discussions had failed to reach a satisfactory conclusion.
The Company has since been prioritising discussions with other potential
partners for the CS Project including other cement and ready-mix companies,
fly ash distributers, building materials companies and a new cement clean-tech
company.
Invariably these companies all need to test CS natural pozzolan with their own
specific in-house cements, blends and concrete mixes. These tests have been
time consuming but are now largely complete and, in all cases, have been
successful, confirming CS natural pozzolan as a versatile high quality
pozzolan.
Perlite
Due to the focus on natural pozzolan and limited budgets, the Company's work
on, the perlite side of the business has been more limited. Customer trials of
horticultural grade perlite from the CS Project continue and, following
interest from a very large consumer of raw perlite, a specific, tailored,
finer grade of raw perlite was produced at SGS Lakefield in Canada from the
Company's horticultural fines and supplied to that consumer for testing.
Results are awaited.
California Department of Transport ("Caltrans") Certification
A significant development during the year was the conditional approval by the
California Department of Transport ("Caltrans") of the use of CS natural
pozzolan in California State infrastructure projects after successfully
passing Caltrans's own independent compliance testing. As a result, CS natural
pozzolan is now listed on the Caltrans List of Approved Materials for
Cementitious Materials for use in Concrete.
Caltrans is the Government body responsible for the award of State funded
infrastructure construction projects in California. Caltrans Standard
Specifications for concrete mandate the use of supplementary cementitious
materials ("SCMs") such as natural pozzolan in order to improve the durability
and sustainability of its concrete structures.
It has only recently become possible for new sources of construction materials
to be approved on a conditional basis. Full approval is conditional until
six monthly test results from production runs have been submitted by the
Company showing compliance with specifications.
This is good news for the CS Project as California State Infrastructure
projects usually specify the use of material from the Approved Materials List
and many concrete specifiers look to this list as an independent endorsement
when specifying for a wider range of non-Caltrans projects.
Other Developments
The Company's claims at the CS Project include a number of claims that were
not a part of the permitted Mine Plan of Operations but which were staked on a
speculative basis to cover a deposit of diatomite.
The Company has been approached by an industrial producer of diatomite to sell
these claims. If an agreement for sale is reached, it will not affect the
existing permits or the ability of the Company to extract and process pozzolan
and perlite at the CS Project.
The Company notes that Allegiant Gold Limited is continuing exploration for
gold on its claim block that lies immediately south of the Company's CS
Project claims and has so far defined a deposit containing resource of 1.1
million ounces and 8.8 million ounces of silver just 380m away from the
southern boundary of the Company's CS Project claim block.
NewPerl Perlite Project, Nevada
The NewPerl Project is located approximately 85km from the CS Project in
Nevada, USA and contains a number of areas where surface samples have shown
excellent test results for production of horticultural grades of perlite.
Subject to further testing, this could be suitable for feed into the CS
Project in the future.
Drill testing of the NewPerl Project is scheduled for 2023.
Jackson Wash Perlite Project, Nevada
The Jackson Wash Project is located 16km from the NewPerl Project in Nevada
and is also a target for horticultural grade perlite.
Earlier in the reporting period the Company granted Kinross Gold U.S.A Inc. a
Lease and Option to purchase the Company's 25 Jackson Wash mining claims in
Nevada, USA. The Company retains the right to mine perlite on the project
claims during the lease/option period.
In addition to hosting large surface occurrences of perlite, the project
claims are located adjacent to the historic Montezuma silver, gold and mercury
mining centre being explored by Kinross. Kinross produces more than 2 million
ounces per year gold (equivalent) on a global basis.
Hazen Pozzolan Project, Nevada
The Hazen Pozzolan Project is located in Churchill County in Northern Nevada,
20 miles by road from the town of Fernley and 24 miles by road from the County
town of Fallon. Situated 9km from a rail siding on the arterial east-west
Union Pacific line, it is well positioned for rail transport to the regional
markets of northern California, points east, as well as the local markets
around Reno and northern Nevada.
The Hazen Project is therefore targeting different regional markets to the CS
Project.
The Company's mining claims were staked in June 2021 to cover a deposit of
glassy pumice targeted as a natural pozzolan. Pumice is currently mined
elsewhere in the US as natural pozzolan and at Hazen was mined as a
lightweight aggregate from a shallow open pit some decades ago. Further work
is required to determine the extent of the Hazen deposit although indications
are that the pumice extends several hundred meters beyond the limits of the
existing open pit.
Whilst the Hazen Project is less advanced than the CS Project, the Company's
laboratory testwork to date has shown that the material present in the pit is
of similar high quality to the CS Project pozzolan. It exceeds the
specifications of ASTM standard C618 and mitigates the deleterious alkali
silica reaction that occurs when concrete is made using reactive aggregates.
During the year a number of companies made field visits and tested samples
from Hazen. As a result the Company recently entered into a collaborative
arrangement with an existing processor of natural pozzolan for mining and test
grinding of a bulk sample from Hazen. Approximately 250 tons of natural
pozzolan was extracted and is being processed at no cost to the Company. The
owner of the process plant has the processing facilities and marketing network
in those regions targeted by the Hazen Project to commercialise the Hazen
deposit in the future. Results are awaited.
Pioche Sepiolite Project, Nevada
Despite being a relatively new project for the Company, the Pioche Project is
progressing quickly.
Sepiolite is a non-swelling, lightweight, porous clay with outstanding
sorption capacity. The largest market globally for sepiolite is for use in
lightweight non-clumping pet litters, where it has superior properties
compared to other clays used in this application. It is also used extensively
in agriculture as a slow-release absorbent and adsorbent carrier for chemicals
and pesticides, in animal feeds as a binder and carrier for nutrients and
growth promoter. It is also used as a suspending agent in paints, medicines,
pharmaceuticals and cosmetics, and in high temperature drilling muds.
Sepiolite is a very uncommon clay and there are very few commercial deposits
in the world, and, with one exception, there are no significant sepiolite
deposits known in the USA, so a large potential market would exist for any new
US producer of sepiolite.
The Pioche claims were staked to cover a historically documented occurrence of
sepiolite which was subsequently confirmed by the Company's initial
prospecting work. Following a field visit in December 2021, the Company
reached an agreement with Spanish company Tolsa S.A., the world's largest
producer of sepiolite, granting Tolsa an up to 18-month option to purchase the
Pioche Project for $1.25 million and an ongoing payment to Sunrise of a 3%
royalty. This option expires in December 2023, but Tolsa must make a payment
to Sunrise of $50,000 by 28 December 2022 to continue the exploration beyond
this payment date.
Tolsa has completed a detailed mapping and sampling programme at Pioche which
has defined multiple beds of sepiolite and this has guided a follow up
trenching programme which was recently completed. Samples are now being tested
in Spain and results are awaited.
Other SR Minerals Inc. Projects
SR Minerals Inc. continues to hold mining claims at a number of additional
projects in Nevada including the Bay State Silver Project, the County Line
Diatomite Project and the Ridge Limestone Project. These projects are
available for sale or joint venture.
An agreement was reached with the underlying owners of the Bay State Silver
Project claims to reduce the annual lease payments to a nominal amount for the
next three years.
SR Minerals Inc. also holds a 2% NSR royalty interest from Golden Metal
Resources plc ("GMR") on GMR's Garfield Copper-Gold Project. This is a key
project for GMR in its plans to list on AIM. The Garfield Project is
considered to be prospective for sediment hosted skarn and porphyry-style
copper-gold mineralisation.
SR Minerals Inc. also holds a 3% NSR royalty interest in the Junction
Copper-Gold-Silver Project held by VR Resources Ltd, although it is understood
that no work is currently planned for this Project.
WESTGOLD INC.
Westgold Inc. was set up under the project generator model and currently holds
interests in four projects in Nevada - Clayton, Myrtle, Newark and Stonewall.
Clayton Silver-Gold Project, Nevada
The property lies in the Walker Lane Mineral Belt. It is some 19 miles
southeast of the producing Mineral Ridge Gold Mine and 19 miles southwest of
the major historic mining centre of Goldfield, where a number of large
gold-silver deposits are currently under development.
The mineralisation at the Clayton Project was discovered in the 1980s when
drilling programmes were conducted by Freeport-McMoRan Gold and Coeur
Exploration. Wide intervals of low-grade silver mineralisation were
intersected and it was postulated that gold-silver values were under-reporting
due to loss of fines from the reverse circulation drilling method. The most
promising intersections were not followed up.
This historical drilling loss of silver was corroborated by the Company when a
twin diamond drill hole delivered an 84% increase in the silver grade compared
to an original Freeport hole.
The Clayton Project is available for joint venture although the Company will
consider follow up drilling as resources become available. No exploration was
conducted at the Clayton Project in the reporting period.
Newark Gold Project, Nevada
The Newark Gold Project is located at the southern end of the Battle
Mountain-Eureka (Cortez) gold trend. It lies 40 km south of, and along the
same structural zone as, the past-producing Alligator Ridge Mine, 13 km
southwest of the past producing Illipah Gold Mine and 20 km east of the Pan
Gold Mine.
The Newark Project was originally targeted for Carlin-style gold
mineralisation by Freeport in the 1980s following the discovery of gold
anomalous values in silicified rocks in a favourable structural and
stratigraphic setting. Carlin-style deposits can be both large (e.g.
Goldstrike which contains 39 million ounces gold at a grade of 3.3 g/t) and
high-grade (e.g. Barrick's recent Goldrush discovery which contains 21 million
ounces gold at a grade of 6.9 g/t).
Freeport drilled a total of 16 holes. Significantly, hole NWK8 intersected 47m
of low-level gold (average 0.14 ppm gold) in jasperoid from 75m to the end of
the hole at 122m. Drilling is warranted to test this gold bearing jasperoid
and to deepen the hole through to about 400m depth to test the underlying
Joana Limestone which can be a significant host for Carlin-style gold
mineralisation.
The Company will consider a joint venture partner for this project. No
exploration was conducted at the Newark Project in the reporting period.
Myrtle Gold Project, Nevada
The Myrtle Gold-Silver Project (the "Project") is located 25km northwest of
Hawthorne, the administrative centre for Mineral County, Nevada.
The Project was acquired by claim staking in 2021. Promising assay results
have been obtained from reconnaissance field mapping and sampling but recently
obtained drill logs from exploration by a previous operator downgraded the
potential of Company's claims.
The Company has retained its claims but the carrying value for the Myrtle
Project has been fully impaired in this year's accounts.
Stonewall Gold Project, Nevada
Westgold Inc. holds a 2% Net Smelter Return Royalty from GMR in the Stonewall
project, also a key project for GMR's AIM listing. Stonewall is prospective
for epithermal-style gold-silver mineralisation.
SUNRISE MINERALS AUSTRALIA PTY LTD
Baker's Gold Project
The Baker's Gold Project comprises two adjacent prospecting licences P51/2837
and P51/2884 located 25km southeast of Meekatharra in the Murchison Goldfield
of Western Australia.
Since acquiring the Project the Company has carried out soil sampling and a
preliminary programme of drilling with significant mineralisation being
intersected in drill hole 21SBRC002 (2m interval from 64m down hole grading
14.4 g/t gold including 1m grading 26.5 g/t gold). The Company has recently
applied for mining Leases M51/903 and M51/904 to cover this mineralisation and
ensure the continuity of tenure before the expiry of the Company's prospecting
licences.
Since the Company completed its drill programme the Australian Federal Court
determined in favour of the Yugunga-Nya Aboriginal People ("YN PBC") Part A
native title claim. The determination of Native Title grants the claimants
official title and rights to the land along with government funding to support
the right to defend title.
The Company is required by law to reach agreement with YN PBC on compensation
for any loss of native title rights that might result from future mining
activities. YN PBC has provided the Company with a Draft Standard Negotiation
Protocol. It is open ended with respect of costs to be met by Sunrise with
Sunrise having to pay all of YN PBC's fees relating to legal advice, its
10-man negotiating team, in-person negotiations, environmental and technical
consultants, etc.
The Company is currently considering if the possible costs of negotiating a
Native Title agreement can be justified by the exploration results obtained to
date or if these negotiations can be deferred whilst further exploration is
carried out.
No discussions have yet been held with YN PBC but as a prudent measure, until
the position becomes clearer, the Company has impaired in full the carrying
value of the Bakers Project in this year's accounts. This impairment can be
reversed if justified by future developments.
The Role Of Natural Pozzolan In CO(2) Net-Zero Strategies
The development of the Company's natural pozzolan projects is taking place
against a background of fundamental change in the cement and concrete
industries; a change which is being driven by climate change targets to
achieve net-zero CO(2) emissions.
After water, concrete is the most used substance on Earth. Whilst 14 billion
cubic metres of concrete were poured globally in 2020, this is forecast to
increase to 20 billion cubic metres annually by 2050 with continuing global
urbanisation and population growth. This activity is currently responsible for
8% of the world's man-made emissions, half of which comes from the burning of
fuel and the other half by direct release of CO(2) from burning limestone in
the cement clinker making process.
Net-zero CO(2) targets are therefore a major challenge for the cement and
concrete industries but one they must meet. In the US, as elsewhere around the
world, these targets are enshrined in State legislation, industry-body
commitments and are increasingly driven by cement and concrete customers and
specifiers. In addition, one of the Implementation Priorities in US President
Biden's November 2021 Executive Order "Implementation of the $1.2 trillion
Infrastructure Investment and Jobs Act" is "building infrastructure that is
resilient and that helps combat the crisis of climate change". It seems likely
then that priority will be given to greener and more sustainable building
materials in contracts awarded under the Infrastructure Bill.
Another significant development which advances the potential of natural
pozzolan was the enactment of The Inflation Reduction Act of 2022. This act
includes a $5.8 billion package of grants, rebates and loans for
decarbonisation of heavy industries like steel and cement. A key element for
the transition of large cement companies to a lower carbon footprint is to
incorporate SRMs into their cement formulations. The packages introduced by
The Inflation Reduction Act of 2022 specifically provide funding for
manufacturers that install equipment capable of slashing greenhouse gas
emissions.
Southern California is a major target market for the Company's CS Project and
California has the largest economy of all the US States. In September 2021, in
the first law of its kind in the US, California's Carbon Cap-and-Trade scheme
was signed into legislation and directly targets greenhouse gas emissions
associated with the cement industry. This Cement Decarbonization legislation
is focused on achieving net-zero emissions from the industry by the end of
2045. It works by putting a periodically declining limit on carbon emissions
for a given entity, allows those entities to trade unused allowances but
imposes fines on any entity exceeding its allowance. Experts believe this will
pave the way for similar Federal legislation in the US. 2021 also saw the
publication by The US Portland Cement Association of its road map to carbon
neutrality. A key component for this road map is the reduction in the quantity
of cement used in cement and concrete mixes through the use of supplementary
cementitious materials ("SCMs") such as natural pozzolan.
It is important to understand how the cement industry is addressing net-zero
carbon targets and how natural pozzolan can play a key role. There are a
number of strategies currently being employed in the cement industry,
including:
· Use of alternative clean(er) fuels. e.g. biomass, chemical and
hazardous waste, and petroleum-based fuels but also natural gas; wind energy;
hydroelectric power; solar energy; hydrogen; and nuclear energy.
· Carbon capture and storage. In its most basic form CO(2) is
captured from the cement kiln where the fuel is burned and where CO(2) is
released from burnt limestone. The captured CO(2) is stored in underground
geological reservoirs such as spent oil or gas fields.
· Carbon curing. CO(2) is captured at the cement plant then
liquified and transported with cement to the concrete ready-mix plant where it
is reinjected into the concrete mix in the mixing truck. Here it combines with
the concrete mix and becomes locked into the concrete mix and assists in
concrete curing.
· Manufacture of so-called "clean-tech" cements. These cement
technologies do not produce Ordinary Portland Cement ("OPC") but produce
alternative cements by innovative carbon-neutral methods rather than OPC.
These cements can be used in partial or full replacement of OPC.
· Production of 1L (limestone) cement. C.10% limestone blended with
OPC with clinker. 10% reduction in CO(2) emission per ton of cement produced.
An easy win for the cement companies as limestone is always available locally
as the main source of cement clinker.
· Production of cements containing natural pozzolan or slag, e.g.
· 1P (pozzolan) cement. Up to 30% natural pozzolan blended with
OPC. Up to 30% reduction in CO(2) emission per ton of cement. Natural pozzolan
can replace fly ash pozzolan in cement or concrete. Fly ash supply is
declining due to the ongoing closure of coal-fired power stations.
· 1S (slag) cement. Up to 30% blast furnace slag pozzolan blended
with OPC. Up to 30% reduction in CO(2) emission per ton of cement. Blast
furnace slag is restricted in production quantities and locations.
The Role Of Natural Pozzolan In Sustainable Development
In addition to building greener structures, a key part of sustainability in
the concrete industry is the building of more durable structures with longer
life.
Whereas "Roman concrete" structures made with natural pozzolan have survived
for millennia, some concrete structures from parts of the 20(th) century made
with OPC are susceptible to "concrete cancer". This is due to reaction of
alkalis in OPC with "reactive" silica in concrete aggregates and results in
expansion, cracking and spalling of the concrete (Alkali Silica Reaction or
"ASR").
As high-quality aggregate supplies for concrete become scarcer, the concrete
industry is having to use more reactive aggregates that can severely impact
the quality of the resulting concrete.
The use of high quality SCMs such as natural pozzolan will mitigate ASR by
tying up and immobilising the alkalis in cement, preventing their reaction
with silica in the aggregates. So much so that the use of pozzolans is often
mandated by State Departments of Transport for public infrastructure
construction work to ensure more sustainable structures.
Sustainability, and ASR mitigation in particular, is therefore a significant
factor in choosing the use of natural pozzolan in net-zero CO(2) strategies.
Of all the strategies being adopted by the cement and concrete industries,
only the use of SCMs can mitigate ASR and so we expect to see natural pozzolan
used in conjunction with other CO(2) reduction strategies.
Use Of Natural Pozzolan Is A Win-Win For Cement Companies
In order for cement companies to reduce the embodied carbon in their cements
it helps if there is a strong business case for doing so. Cap-and-Trade is a
"carrot and stick" approach and customers and specifiers are increasingly
looking for greener cements.
The use of 1P cement not only provides for more durable and sustainable
concrete with lower embodied carbon but it also allows the cement company to
sell more cement per ton of OPC clinker capacity. The production of cement
clinker in the cement kiln is often the volume limiting step to cement
production at a cement plant.
This is an important consideration particularly as cement companies are
currently operating at capacity and are all sold out.
These ongoing developments serve to strengthen the place of natural pozzolans
in future cement formulations and the CS and Hazen Projects are well placed,
being fully permitted and ready to mine.
Risks & Uncertainties
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 and in the foreseeable future are detailed below together with
risk mitigation strategies employed by the Board.
Risk Mitigation Strategies
Exploration Risk
The Group's business is mineral exploration and development which are The directors bring many years of combined mining and exploration experience
speculative activities. There is no certainty that the Group will be and an established track record in mineral discovery.
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 Company maintains a portfolio of exploration projects, including projects
at the drill stage, in order to spread the risk associated with mineral
exploration.
Resource/Reserve Risk
All mineral projects have risk associated with defined grade and continuity. When relevant, Mineral Resources and Reserves are estimated by independent
Mineral Resources and Reserves are always subject to uncertainties in the specialists on behalf of the Group and reported in accordance with accepted
underlying assumptions which include the quality of the underlying data, industry standards and codes. The directors are realistic in the use of metal
geological interpretations, technical assumptions and price forecasts. and mineral price forecasts and impose rigorous practices in the QA/QC
programmes that support its independent estimates.
Development and Marketing Risk
Delays in permitting, financing, mine commissioning and marketing a project To reduce development risk the directors will ensure that its permitting,
and its products may result in delays to the Group meeting production targets. financial evaluation and financing and market mechanisms are robust and
thorough and will seek to position the Company as a low-cost producer.
Commodity Price Risk
Changes in commodity prices can affect the economic viability of mining The Company consistently reviews commodity prices and trends for its key
projects and affect decisions on continuing exploration activity. projects throughout the development cycle.
Mining and Processing Technical Risk
Notwithstanding the completion of metallurgical testwork, test mining and From the earliest stages of exploration, the directors look to use consultants
pilot studies indicating the technical viability of a mining operation, and contractors who are leaders in their field and in future will seek to
variations in mineralogy, mineral continuity, ground stability, groundwater strengthen executive management and the Board with additional technical and
conditions and other geological conditions may still render a mining and financial skills as the Company transitions from exploration to production.
processing operation economically or technically non-viable.
Environmental and Social Governance (ESG) Risk The development of industrial minerals projects such as the CS Project carry a
lower level of environmental and social liability than gold or base metal
Exploration and development of a project can be adversely affected by projects due to low levels of toxic contaminants in the ore and processing
environmental and social legislation and the unforeseen results of chemicals.
environmental and social impact studies carried out during evaluation of a
project. Once a project is in production unforeseen events can give rise to
environmental liabilities.
The Company has adopted an Environmental, Social and Governance Policy (the
"ESG Policy") and avoids the acquisition of projects where liability for
legacy environmental issues might fall upon the Company.
The ESG Policy will be updated in future to reflect the status of the
Company's projects.
Political Risk
All countries carry political risk that can lead to interruption of activity. The Company's strategy restricts its activities to stable, democratic and
Politically stable countries can have enhanced environmental and social mining friendly jurisdictions.
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.
The Company has adopted a strong Bribery & Anti-Corruption Policy and a
Code of Conduct and these are strictly enforced.
Partner Risk
Whilst there has been no past evidence of this, the Group can be adversely The Board's policy is to maintain control of certain key projects so that it
affected if joint venture partners are unable or unwilling to perform their can control the pace of exploration and development and reduce partner risk.
obligations or fund their share of future developments.
For projects where other parties are responsible for critical payments and
expenditures the Company's agreements legislate that such payments and
expenditures are met.
Financing & Liquidity Risk
The Company has an ongoing requirement to fund its activities through the The Company maintains a good network of contacts in the capital markets that
equity markets and in future to obtain finance for project development. There has historically met its financing requirements. The Company's low overheads
is no certainty such funds will be available when needed. and cost-effective exploration strategies help reduce its funding requirements
and currently the outstanding directors' fees are settled in shares.
Nevertheless, further equity issues will be required over the next 12 months.
Financial Instruments
Details of risks associated with the Group's Financial Instruments are given The directors are responsible for the Group's systems of internal financial
in Note 19 to the financial statements. control. Although no systems of internal financial control can provide
absolute assurance against material misstatement or loss, the Group's systems
are 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, and they have
reviewed the effectiveness of internal financial control.
The Board, subject to delegated authority, reviews capital investment,
property sales and purchases, additional borrowing facilities, guarantees and
insurance arrangements.
Exchange Rate Risk
The value of the Company's assets held in overseas subsidiaries will vary with The Company's project expenditures are discretionary and subject to constant
exchange rate fluctuations, especially in the US Dollar/Pound Sterling review and changing priorities. The Company does not speculate on exchange
exchange rate. rates or hedge its foreign currency exposures but will consider doing so once
expenditures become more predictable and locked in.
As much of the Company's exploration costs are incurred in US Dollars, the
Company's budget costs will be subject to exchange rate variations when
actually incurred.
Forward-Looking Statements
This Annual Report may contain certain statements and expressions of belief,
expectation or opinion which are forward-looking statements, and which relate,
inter alia, to the Company's proposed strategy, plans and objectives or to the
expectations or intentions of the Company's directors. Such forward-looking
statements involve known and unknown risks, uncertainties and other important
factors beyond the control of the Company that could cause the actual
performance or achievements of the Company to be materially different from
such forward-looking statements.
Section 172 (1) Statement
Section 172 of the Companies Act 2006 requires a director of a company to act
in the way he or she considers, in good faith, would be most likely to promote
the success of the company for the benefit of its members as a whole. This
requires a director to have regard, among other matters, to: the likely
consequences of any decision in the long term; the interests of the Company's
employees; the need to foster the Company's business relationships with
suppliers, clients, joint arrangement partners and others; the impact of the
Company's operations on the community and the environment; the desirability of
the Company maintaining a reputation for high standards of business conduct;
and the need to act fairly with members of the Company.
The Company's directors give careful consideration to these factors in
discharging their duties. The stakeholders we consider are our shareholders,
employees, suppliers (including consultants and contractors), our joint
arrangement partners, the regulatory bodies that we engage with and those that
live in the societies and geographical areas in which we operate. The
directors recognise that building strong, responsible and sustainable
relationships with our stakeholders will help us to deliver our strategy in
line with our long-term objectives.
Having regard to:
The likely consequences of any decision in the long-term:
The Company's Aims and Business Model are set out at the head of this
Strategic Report and in the Chairman's Statement. The Company's mineral
exploration and development business is, by its very nature, long-term and so
the decisions of the Board always consider the likely long-term consequences
and take into consideration, for example, trends in metal and minerals supply
and demand, the long-term political stability of the countries in which the
Company operate and the potential impact of its decisions on its stakeholders
and the environment. As the Company aims to transition the CS Project into
production other projects also become important to the long-term future of the
Company and this has framed the Board's decision to allocate a portion of
capital to the testing of some of the Company's precious metal projects and to
acquiring new projects. The Board's approach to general strategy and long-term
risk management are set out in the Corporate Governance Statement (Principle
1) and the section on Risks and Uncertainties.
The interests of the Company's employees:
Other than the Board, the Company has no employees. It relies on the employees
of Tertiary Minerals plc who are engaged through a services agreement, but all
of these employees have daily access to the Executive Chairman and their views
are considered in the Board's decision making. Further details on the Board's
employment policies, health and safety policy and employee engagement are
given in the Corporate Governance Statement (Principle 8).
The need to foster the Company's business relationships with its stakeholders:
The sustainability of the Company's business long-term is dependent on
maintaining strong relationships with its stakeholders. The factors governing
the Company's decision making and the details of stakeholder engagement are
set out in the Corporate Governance Statement (Principles 2, 3, 8 and 10).
Having regard to the impact of the Company's operations on the community and
the environment:
The Company requires a "social licence" to operate sustainably in the mining
industry and so the Board makes careful consideration of any potential impacts
of its activities on the local community and the environment. The Board
strives to maintain good relations with the local communities in which it
operates and with local businesses. For example, in permitting the CS Project
for production the Board has carried out extensive work and consultation with
regulators and the local community representatives to evaluate the benefits
and impacts of its CS Project. Further discussion of these activities and
Board considerations can be found in the Environmental, Social and Governance
("ESG") Statement and in the Corporate Governance Statement (Principle 3).
The desirability of the Company maintaining a reputation for high standards of
business contact:
The Board recognises that its reputation is key to its long-term success and
depends on maintaining high standards of corporate governance. It has adopted
the QCA Code of Corporate Governance and sets out in detail how it has
complied with the 10 key principles of the QCA Code in the Corporate
Governance Statement. This contains details of various Company policies
designed to maintain high standards of business conduct such as the Share
Dealing Policy; ESG Policy; Health and Safety Policy, and Bribery &
Anti-Corruption Policy and Code of Conduct.
The need to act fairly between Members of the Company:
The Board ensures that it takes decisions in the interests of the members
(shareholders) as a whole and aims to keep shareholders fully informed of
significant developments, ensuring that all shareholders receive Company news
at the same time. The Executive Chairman devotes time to answering genuine
shareholder queries, no individual or group of shareholders is given
preferential treatment. Further information is provided in the Corporate
Governance Statement (Principles 2 and 10).
This Strategic Report was approved by the Board of Directors on 9 December
2022 and signed on its behalf.
Patrick Cheetham
Executive Chairman
Directors' Responsibilities
The directors are responsible for preparing the Strategic Report, the
Directors' Report and the financial statements in accordance with applicable
law and regulations.
Company law requires directors to prepare financial statements for a company
for each financial year. Under that law the directors have elected to prepare
the Group and Company financial statements in accordance with applicable law
and UK adopted International Accounting Standards Under company law the
directors must not approve the financial statements unless they are satisfied
that they give a true and fair view of the state of affairs of the Group and
Company and of the profit or loss of the Group for that period. The directors
are also required to prepare the financial statements in accordance with the
AIM Rules of the London Stock Exchange for companies trading securities on the
AIM market.
In preparing these 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 have been prepared in accordance with
applicable law and UK adopted International Accounting Standards, subject to
any material departures disclosed and explained in the financial statements;
and
· prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company and the Group will
continue in business.
The directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Company and
enable them to ensure that the financial statements comply with the
requirements of the Companies Act 2006. They are also responsible for
safeguarding the assets of the Company and hence for taking reasonable steps
for the prevention and detection of fraud and other irregularities.
They are further responsible for ensuring that the Strategic Report and the
Directors' Report and other information included in the Annual Report and
financial statements are prepared in accordance with applicable law in the
United Kingdom.
Website Publication
The maintenance and integrity of the Sunrise Resources plc website is the
responsibility of the directors. Legislation in the United Kingdom governing
the preparation and dissemination of the accounts and the other information
included in annual reports may differ from legislation in other jurisdictions.
Information from the Directors' Report
The directors are pleased to submit their Annual Report and audited financial
statements for the year ended 30 September 2022.
The Strategic Report contains details of the principal activities of the
Company and includes the Operating Review which provides detailed information
on the development of the Group's business during the year and indications of
likely future developments and events that have occurred after the financial
year end.
Going Concern
In common with many exploration companies, the Company raises finance for its
exploration and appraisal activities in discrete tranches. Further funding is
raised as and when required. When any of the Group's projects move to the
development stage, specific project financing will be required.
The directors prepare annual budgets and cash flow projections that extend
beyond 12 months from the date of this report. Given the Group's cash position
at the year-end of £96,126 (2021: £371,740) these projections include the
proceeds of future fundraising necessary within the next 12 months to meet the
Group's overheads and planned discretionary project expenditures and to
maintain the Company and its subsidiaries as going concerns. Although the
Company has been successful in raising finance in the past, there is no
assurance that it will obtain adequate finance in the future. This represents
a material uncertainty related to events or conditions which may cast
significant doubt on the Group and Company's ability to continue as going
concerns and, therefore, that they may be unable to realise their assets and
discharge their liabilities in the normal course of business. However, the
directors have a reasonable expectation that they will secure additional
funding when required to continue meeting corporate overheads and exploration
costs for the foreseeable future and therefore believe that the going concern
basis is appropriate for the preparation of the financial statements.
Dividend
The directors do not recommend the payment of any dividend.
Financial Instruments and Other Risks
The business of mineral exploration and evaluation has inherent risks. Details
of the Group's financial instruments and risk management objectives and of the
Group's exposure to risk associated with its financial instruments are given
in Note 19 to the financial statements.
Details of risks and uncertainties that affect the Group's business are given
in the Strategic Report.
Directors
The directors holding office in the period were:
Mr P L Cheetham - Chairman of the Board and Chairman of the Nomination
Committee.
Mr R D Murphy - Chair of the Remuneration Committee and a member of the
Nomination and Audit Committees.
Mr J Cole - Chair of the Audit Committee and member of the Nomination and
Remuneration Committees
Attendance at Board and Committee Meetings
The Board retains control of the Group with day-to-day operational control
delegated to the Executive Chairman. The full Board meets four times a year
and on any other occasions it considers necessary.
Board Meetings Nomination Committee Audit Committee Remuneration Committee
Director Attended Held Attended Held Attended Held Attended Held
P L Cheetham 11 11 2 2 3 3 1 1
R D Murphy 11 2 3 1
J Cole 11 2 3 1
The directors' shareholdings are shown in Note 16 to the financial statements.
Events After The Year-End
On 29 November 2022 the Company raised £280,000 through a placement of
80,000,000 new ordinary shares and the issue of a £200,000 convertible
security. The agreement, with US institutional investor Towards Net Zero LLC,
allows the Company to issue a further convertible security within 6 months of
the Closing Date, 6 December 2022, to raise a further £200,000 subject to
certain conditions precedent.
Shareholders
As at the date of this report the following interests of 3% or more in the
issued share capital of the Company appeared in the share register.
As at 9 December 2022 Number % of share
of shares capital
Interactive Investor Services Nominees Limited SMKTISAS 381,926,048 9.76
Barclays Direct Investing Nominees Limited CLIENT1 354,368,893 9.05
Interactive Investor Services Nominees Limited SMKTNOMS 337,994,996 8.64
Smith & Williamson Nominees Limited 292,784,545 7.48
Hargreaves Lansdown (Nominees) Limited VRA 259,185,379 6.62
Hargreaves Lansdown (Nominees) Limited 15942 248,498,152 6.35
Interactive Investor Services Nominees Limited TDWHSIPP 177,343,871 4.53
HSDL Nominees Limited 145,495,033 3.72
Hargreaves Lansdown (Nominees) Limited HLNOM 139,952,577 3.58
Disclosure of Audit Information
Each of the directors has confirmed that so far as they are aware, there is no
relevant audit information of which the Company's Auditor is unaware, and that
they have taken all the steps that they ought to have taken as a director in
order to make themselves aware of any relevant audit information and to
establish that the Company's Auditor is aware of that information.
Auditor
A resolution to reappoint Crowe U.K. LLP as Auditor of the Company will be
proposed at the forthcoming Annual General Meeting.
Charitable and Political Donations
During the year, the Group made no charitable or political donations.
Annual General Meeting
The Company's Annual General Meeting will be held on Friday 17 February 2023
at 10.00 a.m.
Conflicts of Interest
The Companies Act 2006 permits directors of public companies to authorise
directors' conflicts and potential conflicts, where appropriate, where the
Articles of Association contain a provision to this effect. The Company's
Articles contain such a provision. Procedures are in place in order to avoid
any conflict of interest between the Company and Tertiary Minerals plc.
Tertiary provides corporate and project management services to Sunrise.
Approved by the Board on 9 December 2022 and signed on its behalf.
Patrick Cheetham
Executive Chairman
Board of Directors
The Directors and Officers of the Company during the financial year were:
Patrick Cheetham
Executive Chairman
Key Strengths:
· Founding director
· Mining geologist with 40 years' experience in mineral exploration
· 35 years in public company management
Appointed: March 2005
Committee Memberships: Chairman of the Nomination Committee
External Commitments: Executive Chairman of Tertiary Minerals plc
Roger Murphy
Non-Executive Director
Key Strengths:
· Career focus in capital raising for mining and oil &
gas companies
· Former MD, Investment Banking, of Dundee Securities
Europe Ltd
· Geologist
Appointed: May 2016
Committee Memberships: Chairman of the Remuneration Committee and Member of
Audit and Nomination Committees
External Commitments: Partner and non-executive Director of Maini Minerals,
Executive Director of Zamari Minerals Ltd, Sarn Helen Gold Limited and TREO
Minerals Ltd.
James Cole
Non-Executive Director
Key Strengths:
· Chartered Accountant with strong commercial background and track
record of success in fundraising, mergers, disposals and acquisitions in
resource sector
· Previously Finance Director for the Goal Group Limited. Formerly
Chief Financial Officer Cominco Resources Ltd, AIM/TSX traded European
Minerals Corporation plc and TSX/OSE traded Crew Gold Corporation.
Appointed: May 2021
Committee Memberships: Chairman of the Audit Committee and a Member of the
Remuneration and Nomination Committees
External Commitments: Not applicable.
Rod Venables
Company Secretary
Key Strengths:
· Qualified company/commercial solicitor
· Director and Head of Company Secretarial Services at City Group
PLC
· Experienced in both Corporate Finance and Corporate Broking
Appointed: July 2019
External Commitments: Company Secretary for Tertiary Minerals plc and other
clients of City Group PLC
Corporate Governance
Chairman's Overview
There is no prescribed corporate governance code for AIM companies and the
London Stock Exchange prefers to give companies the flexibility to choose from
a range of codes which suit their specific stage of development, sector and
size.
The Board considers the corporate governance code published by the Quoted
Companies Alliance to be the most suitable code for the Company. Accordingly,
the Company has adopted the principles set out in the QCA Corporate Governance
Code (the "QCA Code") and applies these principles wherever possible, and
where appropriate given its size and available resources. The Company's
Corporate Governance Statement was reviewed by the Board on 9 December 2022.
The Company has set out on its website and in its Corporate Governance
Statement the 10 principles of the QCA Code and details of the Company's
compliance.
Patrick Cheetham, in his capacity as Chairman, has overall responsibility for
the corporate governance of the Company and the Board is responsible for
delivering on our well-defined business strategy having due regard for the
associated risks and opportunities.
The Company's corporate governance arrangements now in place are designed to
deliver a corporate culture that understands and meets shareholder and
stakeholder needs and expectations whilst delivering long-term value for
shareholders.
The Board recognises that its principal activity, mineral exploration and
development, has potential to impact on the local environment and communities
and consequently has adopted an Environmental, Social and Governance ("ESG")
Policy to ensure that the Group's activities have minimal environmental and
social impact. Where appropriate the Group's contracts with suppliers and
contractors legally bind those suppliers and contractors to do the same. The
Group's activities, carried out in accordance with the ESG Policy, have had
only minimal environmental and social impact at present and this policy is
regularly reviewed. Where appropriate, all work is carried out after advance
consultation with affected parties.
The Board recognises the benefits that social media engagement can have in
helping the Company reach out to shareholders and other stakeholders, but it
also recognises that misuse or abuse of social media can bring the Company
into disrepute. To facilitate the responsible use of social media the Company
has adopted a Social Media Policy.
The Board has also adopted a Share Dealing Code for dealings in shares of the
Company by directors and employees and a Bribery & Anti-Corruption Policy
and Code of Conduct applicable to employees, 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 amount shown in the Consolidated and Company Statements of Financial
Position in respect of trade payables at the end of the financial year
represents 13 days of average daily purchases (2021: 4 days). This amount is
calculated by dividing the creditor balance at the year end by the average
daily Group spend in the year.
The Board recognises 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 employees and other stakeholders. The Company has
developed a Health and Safety Policy to clearly define roles and
responsibilities and in order to identify and manage risk.
Your Board currently comprises three directors of which two are non-executive
and considered by the Board to be independent of management. We believe that
this balance provides an appropriate level of independent oversight. The Board
has the ability to seek independent advice although none was deemed necessary
in the year under review. The Board is aware of the need to refresh its
membership from time to time and to match its skill set to those required for
the development of its mineral interests and will consider appointing
additional independent non-executive directors in the future.
Patrick Cheetham
Executive Chairman
Environmental, Social and Governance Statement
Sunrise Resources plc and its subsidiaries ("the Company") practice
responsible exploration as reflected in this Environmental, Social and
Governance ("ESG") policy statement and as demonstrated by our actions. By
doing so we reduce project risk, avoid adverse environmental and social
impacts, optimising benefits for all stakeholders while adding value to our
projects.
Our business associates, consultants and contractors ("Associated Parties")
perform much of our primary activities at our projects and therefore we
require that all Associated Parties working on our behalf or for our
subsidiaries accept and adhere to the principles set out in this policy. We
encourage input from those with local knowledge and we review this policy on a
regular basis.
Our ESG policy is guided by the Prospectors & Developers Association of
Canada's (PDAC) Framework for Responsible Exploration (known as e3 Plus) which
encourages mineral exploration companies to support and improve social,
environmental and health and safety performance across all exploration
activities around the world.
Adopting Responsible Governance and Management
The Company is committed to environmentally and socially responsible mineral
exploration and has developed and implemented policies and procedures for
corporate governance and ethics. We ensure that all staff and key Associated
Parties are familiar with these and have appropriate level of knowledge of
these policies and procedures.
The Company employs persons and engages contractors with the required
experience and qualifications relevant to their specific tasks and, where
necessary, seeks the advice of specialists to improve the understanding and
management of social, environmental, human rights and security, health and
safety, and in the application of traditional knowledge.
The Company's Corporate Governance Statement and Bribery & Anti-Corruption
policies can be viewed on our website here:
https://www.sunriseresourcesplc.com/corporate-governance
(https://www.sunriseresourcesplc.com/corporate-governance) .
Applying Ethical Business Practices
As well as our shareholders and staff, our stakeholders include local
communities and local leadership, local, regional and national government and
regulatory authorities, suppliers, contactors and consultants, our local
business partners and other interested parties. Our corporate culture and
policies require honesty, integrity, transparency and accountability in all
aspects of our work and when interacting with all stakeholders.
The Company takes all necessary steps to ensure that activities in the field
minimise or mitigate any adverse impacts on both the environment and on local
communities.
Commitment to Project Due Diligence and Risk Assessment
We make sure we are informed of the laws, regulations, treaties and standards
that are applicable with respect to our activities. We ensure that Associated
Parties are informed and prepared before going into the field in order to
minimise the risk of miscommunication, unnecessary costs and conflict, and to
understand the potential for creating opportunities with local communities
where possible.
Engaging Host Communities and Other Affected and Interested Parties
Sunrise is committed to engaging positively with local communities, regulatory
authorities, suppliers and other stakeholders in its project locations, and
encourages feedback through this engagement. Through this process the Company
develops and fosters the relationships on which our business relies for
success.
Respecting Human Rights
The exploration activities of Sunrise are carried out in line with applicable
laws on human rights in its home jurisdiction and those of the countries in
which it works. The Company does not engage in activities that have adverse
human rights impacts.
Protecting the Environment
We are committed to ensuring that environmental standards are met or exceeded
in the course of our exploration activities. Applicable laws and local
guidelines in all project jurisdictions are followed diligently and
exploration programmes are only carried out once relevant permits and
approvals have been secured from the appropriate regulatory bodies.
In Nevada, USA, most of our exploration is carried out on Federally owned land
administered by the Bureau of Land Management (BLM) which requires the
submission of financial bonds for reclamation of exploration activities and
which holds the Company to account. Provisions are made in the financial
statements for reclamation costs in accordance with calculations set by the
BLM. When operating on private lands the Company applies the same rigorous
standards for reclamation.
In Australia field exploration activity requires prior approval from the
Department of Mines, Industry Regulation and Safety which imposes
environmental reclamation obligations on any such approvals.
Where our activities create ground disturbance, we ensure that full
rehabilitation is carried out in accordance with regulations and we take care
to minimise the impact of our activities on local flora and fauna, choosing
where possible less impactful exploration methods.
Safeguarding the Health and Safety of Workers and the Local Population
Company activities are carried out in accordance with its Health and Safety
Policy which adheres to all applicable laws. It ensures that its Associated
Parties are made aware of and follow these policies where relevant.
Corporate Governance Statement
The QCA Code sets out ten principles which should be applied. The principles
are set out below with an explanation of how the Company applies each
principle, and the reasons for any aspect of non-compliance.
Principle One: Establish a strategy and business model which promote long-term
value for shareholders.
The Company has a clearly defined strategy and business model that has been
adopted by the Board and is set out in the Strategic Report. Details of the
challenges to the execution of the Company's strategy and business model and
how those will be addressed can be found in Risks and Uncertainties in the
Strategic Report.
Principle Two: Seek to understand and meet shareholder needs and expectations.
The Board is committed to maintaining good communication with its shareholders
and investors. The Chairman and members of the Board from time to time meet
with shareholders and investors directly or through arrangements with the
Company's brokers to understand their investment requirements and expectations
and to address their enquiries and concerns.
All shareholders are encouraged to attend the Company's Annual General
Meetings where they can meet and directly communicate with the Board. After
the close of business at the Annual General Meeting, the Chairman makes an
up-to-date corporate presentation and opens the floor to questions from
shareholders.
Shareholders are also welcome to contact the Company via email at
info@sunriseresourcesplc.com (mailto:info@sunriseresourcesplc.com) with any
specific queries.
The Company also provides regulatory, financial and business news updates
through the Regulatory News Service (RNS) and various media channels such as
Twitter. Shareholders also have access to information through the Company's
website, www.sunriseresourcesplc.com (http://www.sunriseresourcesplc.com) ,
which is updated on a regular basis and which includes the latest corporate
presentation on the Group. Contact details are also provided on the website.
Principle Three: Take into account wider stakeholder and social
responsibilities and their implications for long-term success.
The Board takes regular account of the significance of social, environmental
and ethical matters affecting the business of the Group. The Board has adopted
an Environmental, Social and Governance ("ESG") Policy, which can be found on
the Company website and an ESG Statement can be found in this Annual Report.
The Company engages positively with local communities, regulatory authorities,
suppliers and other stakeholders in its project locations and encourages
feedback through this engagement. Through this process the Company identifies
the key resources and fosters the relationships on which the business relies.
Principle Four: Embed effective risk management, considering both
opportunities and threats, throughout the organisation.
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 whilst recognising that its business
opportunities carry an inherently high level of risk. The principal risks and
uncertainties facing the Group at this stage in its development and in the
foreseeable future are detailed in Risks and Uncertainties in the Strategic
Report, together with risk mitigation strategies employed by the Board.
Principle Five: Maintain the board as a well-functioning, balanced team led by
the chair.
The Board's role is to agree the Group's long-term direction and strategy and
monitor achievement of its business objectives. The Board meets formally four
times a year for these purposes and holds additional meetings when necessary
to transact other business. The Board receives regular and timely reports for
consideration on all significant strategic, operational and financial matters.
Relevant information for consideration by the Board is circulated in advance
of its meetings.
The Board met eleven times during the year to consider such matters. Further
details are provided in the Directors' Report. The Board is supported by the
Audit, Remuneration and Nomination Committees.
The Board currently consists of the Executive Chairman (Patrick Cheetham), and
two non-executive directors (Roger Murphy and James Cole). The current Board's
preference is that independent non-executive directors comprise the majority
of Board members. Patrick Cheetham is currently the Chairman and Chief
Executive. Patrick Cheetham has a service contract as Chairman of the Company
and his services as Chief Executive are provided to the Company, at cost,
through a Management Services Agreement with Tertiary Minerals plc
("Tertiary"), in which he is a shareholder and where he is also employed as
Chairman. In 2022, Patrick Cheetham dedicated over 62% of his working time to
the Company. The combined role of Chairman and Chief Executive results in cost
savings and is considered acceptable whilst there is a majority of independent
directors on the Board and having regard to the fact that the Company is not
yet revenue generating.
The non-executive directors have committed the time necessary to fulfil their
roles during the year. The attendance record of the directors at Board and
Board Committee meetings are detailed in the Directors' Report.
The current non-executive directors are considered independent of management
and free from any business or other relationship which could materially
interfere with the exercise of their independent judgement.
Principle Six: Ensure that between them the directors have the necessary up to
date experience, skills and capabilities.
The Board considers the current balance of sector, financial and public market
skills and experience of its directors are relevant to the Company's business
and are appropriate for the current size and stage of development of the
Company and the Board considers that it has the skills and experience
necessary to execute the Company's strategy and business plan and discharge
its duties effectively.
The directors maintain their skills through membership of various professional
bodies, attendance at mining conferences and through their various external
appointments.
All Directors have access to the advice and services of the Company Secretary
who is responsible for ensuring that Board procedures and applicable rules and
regulations are observed. All directors are able to take independent
professional advice, if required, in relation to their duties and at the
Company's expense.
Principle Seven: Evaluate board performance based on clear and relevant
objectives, seeking continuous improvement.
The ultimate measure of the effectiveness of the Board is the Company's
progress against the long-term strategy and aims of the business. This
progress is reviewed in Board meetings held at least four times a year. The
Executive Chairman's performance is regularly reviewed by the rest of the
Board.
The Nomination Committee, currently consisting of the Executive Chairman and
the two non-executive directors, meets once a year to lead the formal process
of rigorous and transparent procedures for Board appointments. During this
meeting the Nomination Committee reviews the structure, size and composition
of the Board; succession planning; leadership; key strategic and commercial
issues; conflicts of interest; time required from non-executive directors to
execute their duties effectively; overall effectiveness of the Board and its
own terms of reference.
Under the Articles of Association, new directors appointed to the Board must
stand for election at the first Annual General Meeting of the Company
following their appointment. Under the Articles of Association, existing
directors retire by rotation and may offer themselves for re-election.
Principle Eight: Promote a corporate culture that is based on ethical values
and behaviours.
The Board recognises and strives to promote a corporate culture based on
strong ethical and moral values. The Group is currently managed via a service
agreement with Tertiary. It has no employees but encourages Tertiary's
employees to understand all aspects of the Group's business and Tertiary seeks
to remunerate its employees fairly, being flexible where practicable. In
future, the Group will give 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
Board takes account of Tertiary's employees' interests when making decisions,
and suggestions from those employees aimed at improving the Group's
performance are welcomed.
The corporate culture of the Company is promoted to Tertiary's employees,
suppliers and contractors and is underpinned by the implementation and regular
review, enforcement and documentation of various policies: Health and Safety
Policy; Environmental, Social and Governance ("ESG") Policy; Share Dealing
Policy; Bribery & Anti-Corruption Policy & Code of Conduct; Privacy
and Cookies Policy and Social Media Policy. These procedures enable the Board
to determine that ethical values are recognised and respected.
The Board recognises that its principal activity, mineral exploration and
development, has potential to impact on local environments and communities,
and as such an ESG Policy was developed with this in mind and this replaces
the previous to ensure that, wherever they take place, the Group's activities
have minimal environmental and social impact. Where appropriate the Group's
contracts with suppliers and contractors legally bind those suppliers and
contractors to do the same. The Group's activities carried out in accordance
with the ESG Policy have had only minimal environmental and social impact and
this policy is regularly reviewed. Where appropriate, all work is carried out
after advance consultation with affected parties.
Principle Nine: Maintain governance structures and processes that are fit for
purpose and support good decision-making by the Board.
The Board has overall responsibility for all aspects of the business. The
Chairman is responsible for overseeing the running of the Board, ensuring that
no individual or group dominates the Board's decision-making, and that the
non-executive directors are properly briefed on all operational and financial
matters. The Chairman has overall responsibility for corporate governance
matters in the Group and chairs the Nomination Committee. The Chairman has the
responsibility for implementing the strategy of the Board and managing the
day-to-day business activities of the Group. The Company Secretary is
responsible for ensuring that Board procedures are followed, and applicable
rules and regulations are complied with. Key operational and financial
decisions are reserved for the Board through quarterly project reviews, annual
budgets, and quarterly budget and cash-flow forecasts and on an ad hoc basis
where required.
The two non-executive directors are responsible for bringing independent and
objective judgment to Board decisions. The Board has established Audit,
Remuneration and Nomination Committees with formally delegated duties and
responsibilities. James Cole currently chairs the Audit Committee, Roger
Murphy chairs the Remuneration Committee and Patrick Cheetham chairs the
Nomination Committee.
This Corporate Governance statement will be reviewed at least annually to
ensure that the Company's corporate governance framework evolves in line with
the Company's strategy and business plan.
Principle Ten: Communicate how the Company is governed and is performing by
maintaining a dialogue with shareholders and other relevant stakeholders.
The Company regularly communicates with, and encourages feedback from, its
shareholders who are its key stakeholder group. The Company's website is
regularly updated and users, including all stakeholders, can register to be
alerted via email when material announcements are made. The Company's contact
details are on the website should stakeholders wish to make enquiries of
management.
The Group's financial reports for at least the past five years can be found
here: https://www.sunriseresourcesplc.com/financial-reports
(https://www.sunriseresourcesplc.com/financial-reports) and contains past
Notices of Annual General Meetings.
The results of voting on all resolutions in general meetings are posted to the
Company's website, including any actions to be taken as a result of
resolutions for which votes against have been received from at least 20 per
cent of independent votes.
Audit Committee Report
The Audit Committee is a sub-committee of the Board, comprised of the
independent non-executive directors and assists the Board in meeting
responsibilities in respect of external financial reporting and internal
controls. The Audit Committee also keeps under review the scope and results of
the audit. It also considers the cost-effectiveness, independence and
objectivity of the auditors taking account of any non-audit services provided
by them. James Cole is Chair of the Audit Committee.
The specific objectives of the Committee are to:
a) maintain adequate quality and effective scope of the
external audit of the Group including its branches where applicable and review
the independence and objectivity of the auditors.
b) ensure that the Board of Directors has adequate
knowledge of issues discussed with external auditors.
c) ensure the financial information and reports issued
by the Company to AIM, shareholders and other recipients are accurate and
contain proper disclosure at all times.
d) maintain the integrity of the Group's administrative
operating and accounting controls and internal control principles.
e) ensure proper accounting policies are adhered to by
the Group.
The Committee has unlimited access to the external auditors, to senior
management of the Group and to any external party deemed necessary for the
proper discharge of its duties. The Committee may consult independent experts
where it considers necessary to perform its duties.
The Audit Committee reviews the financial controls of the Company on a regular
basis and is satisfied that the Group's financial controls and reporting
procedures are robust and sufficient to ordinarily prevent fraud and ensure
that senior management, the Committee and the Board are fully aware of the
Company's financial position at all times.
The Audit Committee met three times in the last financial year, on 10 December
2021, 24 May 2022 and 8 August 2022. Significant reporting issues considered
during the year included the following:
1. Impairments
The Committee has reviewed the carrying values of the Group projects as at
30 September 2022, and recoverability of loans from the Parent Company to
subsidiary undertakings and carried out impairment reviews. The project
carrying values are assessed against the IFRS 6 criteria set out in Note 1(k).
Loans to subsidiary undertakings are assessed for impairment under IFRS 9.
As a result of this, it was judged that the Bakers and Myrtle Project
expenditure should be impaired and that the Group's inter-company loan to
Sunrise Minerals Australia Pty Ltd should be fully impaired.
2. Going Concern
The Committee also considered the Going Concern basis on which the accounts
have been prepared (see Note 1(b)). The directors are satisfied that the Going
Concern basis is appropriate for the preparation of the financial statements.
James Cole
Chair - Audit Committee
Remuneration Committee Report
The Remuneration Committee is a sub-committee of the Board and comprises the
independent non-executive directors. Mr Murphy is Chairman of the Remuneration
Committee.
The primary objective of the Committee is to review the performance of the
executive directors and review the basis of their service agreements and make
recommendations to the Board regarding the scale and structure of their
remuneration.
However, the Company does not currently remunerate any of the directors other
than in their capacity as directors. Whilst the Chairman of the Board, Patrick
Cheetham, does have an executive role, his technical and managerial services
are provided under a general service agreement with Tertiary Minerals plc and
his remuneration is fixed by Tertiary Minerals plc. Nonetheless, it is the
role of the Remuneration Committee to ensure that the executive director is
appropriately incentivised and rewarded for his services to the Company and
this is considered as part of the Committee's review of any Long-Term
Incentive Plan.
The Remuneration Committee met once during the financial year under review, on
8 August 2022.
Roger Murphy
Chair - Remuneration Committee
Nomination Committee Report
The Nomination Committee comprises the Chairman and the independent
non-executive directors. Patrick Cheetham is Chair of the Nomination
Committee.
The primary objective of the Nomination Committee is to lead the formal
process of reviewing and making recommendations as to Board appointments and
other board changes and to make appropriate recommendations to the Board.
The Committee is required, amongst other things, to:
(a) Review the structure, size and composition (including
the skills, knowledge, experience and diversity) of the Board and make
recommendations to the Board with regard to Board appointments and any Board
changes.
(b) Give full consideration to succession planning for
directors and other senior executives in the course of its work, taking into
account the challenges and opportunities facing the Company, and the skills
and expertise needed on the Board in the future.
(c) Keep under review the leadership needs of the
organisation to compete effectively in the marketplace.
(d) Review annually the time required from non-executive
directors and non-executive directors. Performance evaluation should be used
to assess whether the executive directors and non-executive directors are
spending enough time in fulfilling their duties.
(e) Arrange periodic reviews of the Committee's own
performance and, at least annually, review its constitution and terms of
reference to ensure it is operating at maximum effectiveness and recommend any
changes it considers necessary to the Board for approval.
(f) Ensure that prior to the appointment of a director,
the proposed appointee should be required to disclose any other business
interests that may result in a conflict of interest and be required to report
any future business interests that may result in a conflict of interest.
The Committee carries out its duties for the Parent Company, major subsidiary
undertakings and the Group as a whole and met twice during the period under
review, on 29 April 2022 and 8 August 2022 to review the Terms of Reference
for the Committee and to consider their continuing suitability.
The Committee is satisfied that the current Board has a depth of experience
and level and range of skills appropriate to the Company at this stage in its
development. It is however recognised that the Company is likely to need
additional expertise as it moves forward into commercial production and so the
composition of the Board will be kept under careful review to ensure that the
Board can deliver long-term growth in shareholder value.
Patrick Cheetham
Chair - Nomination Committee
Publication of Statutory Accounts
The financial information set out in this announcement does not constitute the
Company's Annual Accounts for the period ended 30 September 2022 or 2021. The
financial information for 2021 is derived from the Statutory Accounts for
2021. Full audited accounts in respect of that financial period have been
delivered to the Registrar of Companies. The Statutory Accounts for 2022 will
be delivered to the Registrar of Companies following the Company's Annual
General Meeting. The Auditors have reported on the 2022 and 2021 accounts.
Neither set of accounts contain a statement under section 498(2) of (3) the
Companies Act 2006 and both received an unqualified audit opinion. However,
there was an emphasis of matter in relation to a requirement that the Company
raise funds in the future to continue as a going concern.
Availability of Financial Statements
The Annual Report containing the full financial statements for the year to 30
September 2022 will be uploaded to the Shareholders Documents section of the
Company's website on or around 22 December 2022:
https://www.sunriseresourcesplc.com/shareholder-documents
(https://www.sunriseresourcesplc.com/shareholder-documents) .
Consolidated Income Statement
for the year ended 30 September 2022
Notes 2022 2021
£ £
Pre-licence exploration costs 5,638 17,320
Impairment of deferred exploration expenditure 194,247 30,021
Administration costs 291,860 318,630
Other income 22 (13,474) -
Operating loss (478,271) (365,971)
Gain on sale of exploration assets 9 - 30,658
Interest receivable 48 61
Loss before taxation 3 (478,223) (335,252)
Tax on loss 7 - -
Loss for the year attributable to equity holders of the parent (478,223) (335,252)
Loss per share - basic and diluted (pence) 6 (0.013) (0.009)
All amounts relate to continuing activities.
Consolidated Statement of Comprehensive Income
for the year ended 30 September 2022
2022 2021
£ £
Loss for the year (478,223) (335,252)
Items that could be reclassified subsequently to the income statement:
Foreign exchange translation differences on foreign currency net investments 441,434 (86,770)
in subsidiaries
Items that will not be reclassified to the income statement:
Changes in the fair value of equity investments (22,962) (9,651)
418,472 (96,421)
Total comprehensive loss for the year attributable to equity holders of the (59,751) (431,673)
parent
Consolidated and Company Statements of Financial Position
at 30 September 2022
Company Registration Number: 05363956
Notes Group Company Group Company
2022 2022 2021 2021
£ £ £ £
Non-current assets
Intangible assets 9 2,503,812 - 2,133,137 -
Right of use assets 17 11,147 - 13,423 -
Investment in subsidiaries 8 - 2,609,413 - 2,753,586
Other investments 8 20,075 11,250 63,503 45,675
2,535,034 2,620,663 2,210,063 2,799,261
Current assets
Receivables 11 167,425 49,164 130,805 22,701
Cash and cash equivalents 12 96,126 73,644 371,740 337,817
263,551 122,808 502,545 360,518
Current liabilities
Trade and other payables 13 (104,936) (90,061) (100,861) (80,357)
Lease liabilities 17 (2,839) - (2,300) -
(107,775) (90,061) (103,161) (80,357)
Net current assets 155,776 32,747 399,384 280,161
Non current liabilities
Lease liabilities 17 (2,874) - (4,715) -
Provisions for liabilities and charges 20 (32,079) - (26,665) -
(34,953) - (31,380) -
Net assets 2,655,857 2,653,410 2,578,067 3,079,422
Equity
Called up share capital 14 3,833,559 3,833,559 3,701,805 3,701,805
Share premium account 5,680,316 5,680,316 5,675,616 5,675,616
Share warrant reserve 14 40,101 40,101 40,164 40,164
Fair value reserve 10,140 17,500 33,102 28,662
Foreign currency reserve 14 404,103 1,321 (37,331) 1,321
Accumulated losses (7,312,362) (6,919,387) (6,835,289) (6,368,146)
Equity attributable to owners of the parent 2,655,857 2,653,410 2,578,067 3,079,422
The Company reported a loss for the year ended 30 September 2022 of £552,391
(2021: £256,473).
These financial statements were approved and authorised for issue by the Board
on 9 December 2022 and were signed on its behalf.
P L
Cheetham
J Cole
Executive
Chairman
Director
Consolidated Statement of Changes in Equity
Group Share Share Share Fair Foreign Accumulated Total
capital premium warrant value currency losses £
£ account reserve reserve reserve £
£ £ £ £
At 30 September 2020 3,677,997 5,655,781 33,893 42,753 49,439 (6,513,429) 2,946,434
Loss for the year - - - - - (335,252) (335,252)
Change in fair value - - - (9,651) - - (9,651)
Exchange differences - - - - (86,770) - (86,770)
Total comprehensive loss for the year - - - (9,651) (86,770) (335,252) (431,673)
Share issue 23,808 19,835 - - - - 43,643
Share-based payments expense - - 19,663 - - - 19,663
Transfer of expired warrants - - (13,392) - - 13,392 -
At 30 September 2021 3,701,805 5,675,616 40,164 33,102 (37,331) (6,835,289) 2,578,067
Loss for the year - - - - - (478,223) (478,223)
Change in fair value - - - (22,962) - - (22,962)
Exchange differences - - - - 441,434 - 441,434
Total comprehensive loss for the year - - - (22,962) 441,434 (478,223) (59,751)
Share issue 131,754 4,700 - - - - 136,454
Share-based payments expense - - 1,087 - - - 1,087
Transfer of expired warrants - - (1,150) - - 1,150 -
At 30 September 2022 3,833,559 5,680,316 40,101 10,140 404,103 (7,332,550) 2,655,857
Company Statement of Changes in Equity
Company Share Share Share Fair value Foreign Accumulated Total
capital premium warrant reserve currency losses £
£ account reserve £ reserve £
£ £ £
At 30 September 2020 3,677,997 5,655,781 33,893 36,987 1,319 (6,125,065) 3,280,912
Loss for the year - - - - - (256,473) (256,473)
Change in fair value - - - (8,325) - - (8,325)
Exchange differences - - - - 2 - 2
Total comprehensive loss for the year - - - (8,325) 2 (256,473) (264,796)
Share issue 23,808 19,835 - - - - 43,643
Share-based payments expense - - 19,663 - - - 19,663
Transfer of expired warrants - - (13,392) - - 13,392 -
At 30 September 2021 3,701,805 5,675,616 40,164 28,662 1,321 (6,368,146) 3,079,422
Loss for the year - - - - - (552,391) (552,391)
Change in fair value - - - (11,162) - - (11,162)
Exchange differences - - - - - - -
Total comprehensive loss for the year - - - (11,162) - (552,391) (563,553)
Share issue 131,754 4,700 - - - - 136,454
Share-based payments expense - - 1,087 - - - 1,087
Transfer of expired warrants - - (1,150) - - 1,150 -
At 30 September 2022 3,833,559 5,680,316 40,101 17,500 1,321 (6,939,575) 2,653,410
Consolidated and Company Statements of Cash Flows
for the year ended 30 September 2022
Notes Group Company Group Company
2022 2022 2021 2021
£ £ £ £
Operating activity
Operating (loss)/profit before interest (478,271) (570,441) (365,971) (285,413)
Depreciation/interest charge 17,20 5,595 - 4,744 -
Share-based payment charge 1,087 1,087 19,663 19,663
Shares issued in lieu of net wages 31,279 31,279 30,818 30,818
Impairment charge - deferred exploration expenditure 9 194,247 - 30,021 -
Gain on disposal of exploration assets after non cash consideration 9 - - 23,342 -
Non cash addition to equity investment 8 - - - (54,000)
Reclamation liability 20 - - (26,665) -
Increase/(decrease) in provision for impairment of loans to subsidiaries 8 - 318,100 - -
(Increase)/decrease in receivables 11 (36,620) (26,463) (78,825) 3,969
Increase/(decrease) in trade and other payables 13 4,075 (9,704) 10,184 (429)
Net cash outflow from operating activity (278,608) (256,142) (352,689) (285,392)
Investing activity
Interest received 48 18,003 60 28,941
Cash receipt from disposal of exploration assets - - 20,000 -
Cash receipt from disposal of equity investments 8 23,263 23,263 - -
Development expenditures 9 (137,490) - (391,061) -
Loans to subsidiaries - (173,926) - (484,038)
Net cash outflow from investing activity (114,179) (132,660) (371,001) (455,097)
Financing activity
Issue of share capital (net of expenses) 104,500 104,500 - -
Lease payments 17 (2,874) - (2,378) -
Shares issued via exercise of warrants 675 675 12,825 12,825
Net cash inflow from financing activity 102,301 105,175 10,447 12,825
Net increase/(decrease) in the year (290,486) (283,627) (713,243) (727,664)
Cash and cash equivalents at start of year 371,740 337,817 1,089,417 1,065,480
Exchange differences 14,872 19,454 (4,434) 1
Cash and cash equivalents at 30 September 12 96,126 73,644 371,740 337,817
Notes to the Financial Statements
for the year ended 30 September 2022
Background
Sunrise Resources plc (the "Company") is a public company incorporated and
domiciled in England. It is traded on the AIM Market of the London Stock
Exchange - EPIC: SRES.
The Company is a holding company (together, "the Group") for one company
incorporated in Australia, and two companies incorporated in Nevada, in the
United States of America. The Group's financial statements are presented in
Pounds Sterling (£) which is also the functional currency of the Company.
The following accounting policies have been applied consistently in dealing
with items which are considered material in relation to the Group's financial
statements.
1. Accounting policies
(a) Basis of preparation
The financial statements have been prepared on the basis of the recognition
and measurement requirements of applicable law and UK adopted International
Accounting Standards .
(b) Going concern
In common with many exploration companies, the Company raises finance for its
exploration and appraisal activities in discrete tranches. Further funding is
raised as and when required. When any of the Group's projects move to the
development stage, specific project financing will be required.
The directors prepare annual budgets and cash flow projections that extend
beyond 12 months from the date of this report. Given the Group's cash position
at year end (£96,126), these projections include the proceeds of future
fundraising necessary within the next 12 months to meet the Company's and
Group's overheads and planned discretionary project expenditures and to
maintain the Company and Group as going concerns. Although the Company has
been successful in raising finance in the past, there is no assurance that it
will obtain adequate finance in the future. This represents a material
uncertainty related to events or conditions which may cast significant doubt
on the Group's and Company's ability to continue as going concerns and,
therefore, that they may be unable to realise their assets and discharge their
liabilities in the normal course of business. However, the directors have a
reasonable expectation that they will secure additional funding when required
to continue meeting corporate overheads and exploration costs for the
foreseeable future and therefore believe that the going concern basis is
appropriate for the preparation of the financial statements.
(c) Basis of consolidation
Investments, including long-term loans, in the subsidiaries are valued at the
lower of cost or recoverable amount, with an ongoing review for impairment.
The Group's financial statements consolidate the financial statements of
Company and its subsidiary undertakings using the acquisition method and
eliminate intercompany balances and transactions.
In accordance with section 408 of the Companies Act 2006, the Company is
exempt from the requirement to present its own statement of comprehensive
income. The amount of the loss for the financial year recorded within the
financial statements of the Company is £552,391 (2021: £256,473).
(d) Intangible assets
Exploration and evaluation
Accumulated exploration and evaluation costs incurred in relation to separate
areas of interest (which may comprise more than one exploration licence or
exploration licence applications) are capitalised and carried forward where:
(1) such costs are expected to be recouped through successful exploration
and development of the area, or alternatively by its sale; or
(2) exploration and/or evaluation activities in the area have not yet
reached a stage which permits a reasonable assessment of the existence or
otherwise of economically recoverable reserves, and active and significant
operations in, or in relation to the areas are continuing.
A biannual review is carried out by the directors to consider whether there
are any indications of impairment in capitalised exploration and development
costs. Full impairment reviews were carried out in order to assess the
carrying values of each project as at 31 March 2022 and 30 September 2022.
This involved consideration of changes in circumstances and evidence including
and exploration results, changes in tenure of mineral rights, economic
circumstances such as market prices, opportunities for realisation such as
sale or joint ventures and viability, comparing anticipated future costs with
expected recoverable value. For each project, based upon the relevant
considerations, the directors formed a view regarding the recoverability of
capitalised expenditure and continued compliance with the IFRS 6 criteria for
recognition and deferral.
Where an indication of impairment is identified, the relevant value is written
off to the income statement in the period for which the impairment was
identified. An impairment of exploration and development costs may be
subsequently reversed in later periods should conditions allow.
Accumulated costs, where the Group does not yet have an exclusive exploration
licence and in respect of areas of interest which have been abandoned, are
written off to the income statement in the year in which the pre-licence
expense was incurred or in which the area was abandoned.
Development
Exploration, evaluation and development costs are carried at the lower of cost
and expected net recoverable amount. On reaching a mining development
decision, for example, the commitment of capital to mine development,
exploration and evaluation costs are reclassified as development costs and all
development costs on a specific area of interest will be amortised over the
useful economic life of the projects, once they become income generating and
the costs can be recouped.
(e) Trade and other receivables and payables
Trade and other receivables and payables are measured at initial recognition
at fair value and subsequently measured at amortised cost.
(f) Cash and cash equivalents
Cash and cash equivalents consist of cash at bank and in hand and short-term
bank deposits with a maturity of three months or less.
(g) Leases
IFRS 16 requires the recognition of lease commitments as right of use assets
and the recognition of a corresponding liability. Lease costs are recognised
in the income statement in the form of depreciation of the right of use asset
over the lease term and interest charges representing the unwind of the
discount on the lease liability.
Short term leases, which fall outside the IFRS 16 requirements, having a
duration of 12 months or less, are charged to the income statement on straight
line basis.
(h) Deferred taxation
Deferred taxation, if applicable, is provided in full in respect of taxation
deferred by temporary differences between the treatment of certain items for
taxation and accounting purposes.
Deferred tax assets are recognised to the extent that they are regarded as
recoverable.
(i) Foreign currencies
The Group's consolidated financial statements are presented in Pounds Sterling
(£), being the functional currency of the Company, and the currency of the
primary economic environment in which the Company operates. Monetary assets
and liabilities denominated in foreign currencies are translated at the rate
of exchange ruling at the balance sheet date.
For consolidation purposes, the net investment in foreign operations and the
assets and liabilities of overseas subsidiaries, associated undertakings and
joint arrangements, that have a functional currency different from the Group's
presentation currency, are translated at the closing exchange rates. Income
statements of overseas subsidiaries, that have a functional currency different
from the Group's presentation currency, are translated at exchange rates at
the date of transaction. Exchange differences arising on opening reserves are
taken to the foreign currency reserve in equity.
(j) Share warrants and share-based payments
The Company issues warrants to employees (including directors) and third
parties. The fair value of the warrants is recognised as a charge measured at
fair value on the date of grant and determined in accordance with IFRS 9,
adopting the Black-Scholes-Merton model. The fair value is recognised on a
straight-line basis over the vesting period, with a corresponding adjustment
to equity, based on the management's estimate of shares that will eventually
vest. The expected life of the warrants is adjusted, based on management's
best estimates, for the effects of non-transferability, exercise restrictions
and behavioural considerations. The details are shown in Note 15.
The Company also issues shares in order to settle certain liabilities,
including payment of fees to directors. The fair value of shares issued is
based on the closing mid-market price of the shares traded on the AIM market
on the day prior to the date of settlement and it is expensed on the date of
settlement with a corresponding increase in equity.
(k) Financial assets designated at fair value through OCI
Upon initial recognition, the Group can elect to classify irrevocably its
equity investments as equity instruments designated at fair value through OCI
when they meet the definition of equity under IAS 32 Financial Instruments:
Presentation and are not held for trading. The classification is determined on
an instrument-by-instrument basis.
Gains and losses on these financial assets are never recycled to profit or
loss. Dividends are recognised as other income in the statement of profit or
loss when the right of payment has been established, except when the Group
benefits from such proceeds as a recovery of part of the cost of the financial
asset, in which case, such gains are recorded in OCI. Equity instruments
designated at fair value through OCI are not subject to impairment assessment.
The Group elected to classify irrevocably its listed equity investments under
this category.
(l) Reclamation costs
The Group's mining and exploration activities are subject to various
governmental laws and regulations relating to the protection of the
environment. The Group records a liability for the estimated future
rehabilitation costs and decommissioning of its development projects at the
time a constructive obligation is determined.
When provisions for closure and environmental rehabilitation are initially
recognised, the corresponding cost is capitalised as an intangible asset,
representing part of the cost of acquiring the future economic benefits of the
operation. The capitalised cost of closure and environmental rehabilitation
activities is recognised in mining interests and, from the commencement of
commercial production, is amortised over the expected useful life of the
operation to which it relates. Any change in the value of the estimated
expenditure is reflected in an adjustment to the provision and asset.
(m) Standards, amendments and interpretations not yet effective
At the date of authorisation of these financial statements, there are no
amended reporting standards and interpretations that impact the Group as they
are either not relevant to the Group's activities or require accounting which
is consistent with the current accounting policies.
(n) Judgements and estimations in applying accounting policies
In the process of applying the Group's accounting policies above, management
has identified the judgemental areas that have the most significant effect on
the amounts recognised in the financial statements:
Intangible assets - exploration and evaluation
IFRS 6 "Exploration for and Evaluation of Mineral Resources" requires that
exploration and evaluation assets shall be assessed for impairment when facts
and circumstances suggest that the carrying amount may exceed recoverable
amount.
In practical terms, this requires that project carrying values are regularly
monitored and assessed for recoverability whether from future exploitation of
resources or realised by sale to a third party.
Where activities have not reached a stage, which permits reasonable
confirmation of the existence of mineral reserves, the directors must form a
judgement whether future exploration and evaluation should continue. This
requires management to use their sector experience, apply their specialist
expertise and form a conclusive judgement whether or not, on the balance of
evidence that further exploration is justified to determine if an economically
viable mining operation can be established in future. Such estimates,
judgements and assumptions are likely to change as new information and
evidence becomes available. If it becomes apparent, in the judgement of the
directors, that recovery of capitalised expenditure is unlikely, the carrying
value should be considered as impaired and treated as detailed below.
Impairment
Impairment reviews for deferred exploration and evaluation costs are carried
out on a project-by-project basis, with each project representing a potential
single cash generating unit. The directors are required to continually monitor
and review the carrying values by reference to new developments, stages in the
exploration process and new circumstances. Assessment of the potential
impairment of assets requires an updated judgement of the probability of
adequate future cash flows from the relevant project. It includes
consideration of:
(a) The period for which the entity has the right to explore in the
specific area and whether this right will expire in the near future, and
whether the right is expected to be renewed.
(b) Whether substantive expenditure on further exploration for and
evaluation of mineral resources for the specific project is either budgeted or
planned.
(c) Whether exploration for and evaluation of mineral resources on the
specific project has led to the discovery of commercially viable quantities of
mineral resources and whether the entity has decided to discontinue such
activities on the project.
(d) Whether sufficient data exist to indicate that, although a development
on the specific project is likely to proceed, the carrying amount of the
exploration and evaluation asset is likely to be recovered in full from
successful development of a mine or by the sale of the project.
The judgements in respect of key projects are as follows;
The CS Project in Nevada is the Group's lead project with a carrying value of
£1,505,188. In the judgement of the directors, this is justified as,
following the successful grant of various mining and production permits, the
focus is on the mine start up and production.
Further exploration at the Bay State Project, Nevada (carrying value
£497,398), is budgeted and project leases and claims are being maintained. In
the judgement of the directors further evaluation and exploration is justified
as, despite some drilling issues, positive drilling results have been obtained
so far. In the opinion of the directors this asset is not impaired.
Although there has been no exploration during the reporting period on the
County Line Project, Nevada (carrying value £168,990), in the judgement of
the directors further evaluation of the production potential is justified in
view of its proximity to the CS Project and project synergies. The mining
claims have been renewed for a further 12‑month period and the project is
not impaired.
Positive drilling results have been obtained from the Clayton Project, Nevada
(carrying value of £144,187) and in the opinion of the directors further
drilling is justified and the project is not impaired.
The Bakers Project, Australia is impaired (full impairment value of
£170,745), pending a decision on negotiations with the regional Native Title
holder with whom agreement is required in order to progress the Company's
mining lease applications.
The Myrtle Project, Nevada is also impaired (full impairment value of
£23,501), as information on historical exploration results has been found
that downgrades the prospectivity of the Company's Myrtle mining claims.
Also, in relation to other projects, the exploration rights are being
maintained and further exploration and/or drilling is budgeted therefore the
directors have reached the conclusion that no other impairments are required.
Going concern
The preparation of financial statements requires an assessment of the validity
of the going concern assumption. This in turn is dependent on finance being
available for the continuing working capital requirements of the Group. Based
on the assumption that such finance will become available, the directors
believe that the going concern basis is appropriate for these accounts.
Share warrants and share-based payments
The estimates of costs recognised in connection with the fair value of share
warrants requires that management selects an appropriate valuation model and
make decisions on various inputs into the model including the volatility of
its own share price, the probable life of the warrants before exercise, and
behavioural consideration of warrant holders.
2. Segmental analysis
The Chief Operating Decision Maker is the Board of Directors. The Board
considers the business has one reportable segment, the management of
exploration projects, which is supported by a Head Office function. For the
purpose of measuring segmental profits and losses the exploration segment
bears only those direct costs incurred by or on behalf of those projects, no
Head Office cost allocations are made to this segment. The Head Office
function recognises all other costs.
2022 Exploration Head Total
projects office £
£ £
Consolidated Income Statement
Pre-licence exploration costs 5,638 - 5,638
Share-based payments - 1,087 1,087
Impairment of deferred exploration expenditure 194,247 - 194,247
Other expenses - 290,773 290,773
Other income (13,474) - (13,474)
Operating loss (186,411) (291,860) (478,271)
Interest receivable - 48 48
Loss before tax (186,411) (291,812) (478,223)
Taxation tax - - -
Loss for the year attributable to equity holders of the parent (186,411) (291,812) (478,223)
Non-current assets
Intangible assets :
Deferred exploration costs:
County Line Diatomite Project, USA 168,990 - 168,990
Bay State Silver Project, USA 497,398 - 497,398
NewPerl Project/Jackson Wash Project, USA 79,419 - 79,419
Ridge Limestone Project, USA 36,997 - 36,997
CS Pozzolan-Perlite Project, USA 1,505,188 - 1,505,188
Clayton Gold Project, USA 144,187 - 144,187
Newark Silver-Gold Project, USA 38,013 - 38,013
Hazen Pozzolan Project, USA 18,748 - 18,748
Pioche Sepiolite, USA 14,872 - 14,872
2,503,812 - 2,503,812
Right of use assets 11,147 - 11,147
Other investments - 20,075 20,075
2,514,959 20,075 2,535,034
Current assets
Receivables 110,099 52,835 162,934
Cash and cash equivalents - 96,126 96,126
110,099 148,961 259,060
Current liabilities
Trade and other payables (16,132) (84,313) (100,445)
Lease liabilities (2,839) - (2,839)
Net current assets 91,128 64,648 155,776
Non-current liabilities
Reclamation liabilities (32,079) - (32,079)
Lease liabilities (2,874) - (2,874)
Net assets 2,571,134 84,723 2,655,857
Other data
Deferred exploration additions 138,054 - 138,054
Exchange rate adjustments to deferred exploration costs 427,432 - 427,432
2021 Exploration Head Total
projects office £
£ £
Consolidated Income Statement
Pre-licence exploration costs 17,320 - 17,320
Share-based payments - 19,663 19,663
Impairment of deferred exploration expenditure 30,021 - 30,021
Other expenses - 298,967 298,967
Operating loss (47,341) (318,630) (365,971)
Gain on disposal of exploration assets 30,658 - 30,658
Interest receivable - 61 61
Loss before tax (16,683) (318,569) (335,252)
Taxation - - -
Loss for the year attributable to equity holders of the parent (16,683) (318,569) (335,252)
Non-current assets
Intangible assets :
Deferred exploration costs:
Baker's Gold Project, Australia 144,343 - 144,343
County Line Diatomite Project, USA 136,665 - 136,665
Bay State Silver Project, USA 410,686 - 410,686
NewPerl Project/Jackson Wash Project, USA 66,153 - 66,153
Ridge Limestone Project, USA 29,262 - 29,262
CS Pozzolan-Perlite Project, USA 1,187,489 - 1,187,489
Clayton Gold Project, USA 117,771 - 117,771
Newark Silver-Gold Project, USA 31,470 - 31,470
Myrtle Project, USA 9,298 - 9,298
2,133,137 - 2,133,137
Right of use assets 13,423 - 13,423
Other investments - 63,503 63,503
2,146,560 63,503 2,210,063
Current assets
Receivables 105,178 25,627 130,805
Cash and cash equivalents - 371,740 371,740
105,178 397,367 502,545
Current liabilities
Trade and other payables (29,973) (70,888) (100,861)
Lease liabilities (2,300) - (2,300)
Net current assets 72,905 326,479 399,384
Non-current liabilities
Reclamation liabilities (26,665) - (26,665)
Lease liabilities (4,715) - (4,715)
Net assets 2,188,085 389,982 2,578,067
Other data
Deferred exploration additions 391,061 - 391,061
Exchange rate adjustments to deferred exploration costs (80,880) - (80,880)
3. Loss before income tax
The operating loss is stated after charging: 2022 2021
£ £
Fees payable to the Company's auditor for:
The audit of the Company's annual accounts 13,421 8,200
Other Services:
Interim review of accounts 1,200 1,050
Corporation tax fees 998 767
4. Directors' emoluments
Remuneration in respect of directors was as follows: 2022 2021
£ £
P L Cheetham (salary) 16,000 16,000
D J Swan (salary) - 10,540
J Cole (salary) 16,000 5,523
R D Murphy (salary) 16,000 16,000
48,000 48,063
In the year ended 30 September 2022 the cost of Employer's National Insurance
Contributions for directors was £Nil (2021: £Nil).
During the year ended 30 September 2022 the value of non-cash share-based
payments in respect of share warrants issued to the directors was £262 (2021:
£17,979).
The directors are also the key management personnel. If all benefits are taken
into account, the total key management personnel compensation would be
£48,262 (2021: £66,337).
5. Staff costs
Staff costs for the Group and the Company, including directors, were as 2022 2021
follows:
£ £
Wages and salaries 48,000 48,063
Social security costs - -
Pension - 295
Share-based payments 262 17,979
48,262 66,337
The average monthly number of employees employed by the Group and the Company 2022 2021
during the year was as follows:
Number Number
Directors 3 3
Other Officers 0 0
3 3
The Company does not employ any staff directly apart from the directors. The
services of technical and administrative staff are provided by Tertiary
Minerals plc as part of the Management Services Agreement between the two
companies (see Note 16).
The Company issues share warrants to employees of Tertiary Minerals plc from
time to time and these non-cash share-based payments resulted in a charge
within the financial statements of £157 (2021: £1,686).
Company secretarial services are provided by Mr R. Venables through City Group
plc.
6. Loss per share
Loss per share has been calculated using the loss for the year attributable to
equity holders of the Company and the weighted average number of shares in
issue during the year.
2022 2021
Loss (£) (478,223) (335,252)
Weighted average shares in issue (No.) 3,734,454,207 3,693,084,489
Basic and diluted loss per share (pence) (0.013) (0.009)
The loss attributable to ordinary shareholders and weighted average number of
ordinary shares for the purpose of calculating the diluted earnings per
ordinary share are identical to those used for the basic earnings per ordinary
share. This is because the exercise of share warrants would have the effect of
reducing the loss per ordinary share and is therefore anti-dilutive.
7. Income tax
No liability to corporation tax arises for the year due to the Group recording
a taxable loss (2021: £Nil).
The tax credit for the period is lower than the credit resulting from the loss
before tax at the standard rate of corporation tax in the UK - 19% (2021:
19%). The differences are explained below.
Tax reconciliation 2022 2021
£ £
Loss before tax (478,223) (335,252)
Tax at 19% (2021: 19%) (90,862) (63,698)
Pre-trading expenditure not deductible for tax purposes 17,563 9,624
Expenditure not deductible for tax purposes 268 3,772
Unrelieved losses carried forward (73,031) (50,302)
Tax charge/credit for year - -
Total losses carried forward (4,158,554) (3,774,180)
Factors that may affect future tax charges
The Group has total losses carried forward of £4,158,554 (2021: £3,774,180).
This amount would be charged to tax, thereby reducing tax liability, if
sufficient profits were made in the future capped to £5m per annum allowance.
The deferred tax asset has not been recognised as the future recovery is
uncertain given the exploration status of the Group. The carried forward tax
loss is adjusted each year for amounts that can no longer be carried forward.
8. Investments
Subsidiary undertakings
Company Country of Date of Type and percentage Principal activity
incorporation/registration
incorporation /registration
of shares held at
30 September 2022
Sunrise Minerals Australia Pty Ltd Australia 7 October 2009 100% of ordinary shares Mineral exploration
SR Minerals Inc. Nevada, USA 12 January 2014 100% of ordinary shares Mineral exploration
Westgold Inc. Nevada, USA 13 April 2016 100% of ordinary shares Mineral exploration
The registered office of Sunrise Minerals Australia Pty Ltd is Level 4, 35-37
Havelock Street West, Perth, WA 6005.
The registered office of SR Minerals Inc. and Westgold Inc. is 241 Ridge
Street, Suite 210, Reno, NV 89501.
Investment in subsidiary undertakings Company Company
2022 2021
£ £
Value at start of year 2,753,586 2,269,548
Additions 173,927 484,038
Movement in provision (318,100) -
At 30 September 2,609,413 2,753,586
Investments in share capital of subsidiary undertakings
The directors consider that the carrying value of the Company's investments in
shares of subsidiary undertakings totalling £63 is not material and therefore
does not require an impairment review.
Loans to Group undertakings
Amounts owed by subsidiary undertakings are unsecured and payable in cash.
Loan interest is charged to US subsidiaries on intercompany loans with Parent
Company.
A review of the recoverability of investments in and loans to subsidiary
undertakings totalling £2,609,413 has been carried out in accordance with
IFRS 9. This indicated potential credit losses arising in the year which have
been provided. Sunrise Minerals Australia Pty Ltd provision increased by
£318,100 to fully impair the loan balance following the impairment of Bakers
project. The assessment has been based upon a review of the underlying
exploration assets held by the subsidiary undertakings.
Other investments - listed investments
Company Country of Type and percentage Principal activity
incorporation of shares held at
/registration 30 September 2022
VR Resources Ltd Canada 0.10% of ordinary shares Mineral exploration
Power Metal Resources plc United Kingdom 0.05% of ordinary shares Mineral exploration
Investment designated at fair value through OCI Group Company Group Company
2022 2022 2021 2021
£ £ £ £
Value at start of year 63,503 45,675 19,765 -
Additions - - 54,000 54,000
Disposals (23,263) (23,263) - -
Movement in valuation (20,165) (11,162) (10,262) (8,325)
At 30 September 20,075 11,250 63,503 45,675
The fair value of each investment is equal to the market value
of its shares at 30 September 2022, based on the closing mid-market price of
shares on its equity exchange market.
These are level one inputs for the purpose of the IFRS 13 fair value
hierarchy.
9. Intangible assets
Deferred exploration expenditure Group Company Group Company
2022 2022 2021 2021
£ £ £ £
Cost
At start of year 4,861,613 2,203,594 4,565,673 2,203,594
Reclamation (564) - 26,239 -
Additions 138,054 - 391,061 -
Disposals during the year - - (40,480) -
Foreign currency exchange adjustments 427,432 - (80,880) -
At 30 September 5,426,535 2,203,594 4,861,613 2,203,594
Impairment
At start of year (2,728,476) (2,203,594) (2,698,455) (2,203,594)
Impairment losses during the year (194,247) - (30,021) -
At 30 September (2,922,723) (2,203,594) (2,728,476) (2,203,594)
Net book value
At 30 September 2,503,812 - 2,133,137 -
At start of year 2,133,137 - 1,867,218 -
During the year the directors carried out an impairment review with reference
to IFRS 6.20 (a) which resulted in the impairment of the Bakers and Myrtle
Project expenditure. Refer to accounting policy 1(d) and 1(j) for a
description of the considerations used in the impairment review.
10. Property, plant and equipment
The Group has the use of tangible assets held by a related undertaking,
Tertiary Minerals plc, under a Management Services Agreement between the two
companies.
11. Receivables
Group Company Group Company
2022 2022 2021 2021
£ £ £ £
Prepayments 41,052 37,506 13,677 11,037
Other receivables 126,373 11,658 117,128 11,664
At 30 September 167,425 49,164 130,805 22,701
12. Cash and cash equivalents
Cash at bank and in hand Group Company Group Company
2022 2022 2021 2021
£ £ £ £
At 30 September 96,126 73,644 371,740 337,817
13. Trade and other payables
Group Company Group Company
2022 2022 2021 2021
£ £ £ £
Amounts owed to related undertaking - Tertiary Minerals plc 46,233 46,233 44,147 44,147
Trade creditors 10,450 9,057 6,070 2,841
Accruals 19,762 10,771 26,434 9,159
Deferred income 4,491 - - -
Other payables 20,116 20,116 18,147 18,147
Other taxation and social security 3,884 3,884 6,063 6,063
At 30 September 104,936 90,061 100,861 80,357
14. Share capital and reserves
2022 2022 2021 2021
Number £ Number £
Share capital - Allotted, called up and fully paid
Ordinary shares of 0.1p each
Balance at start of year 3,701,804,687 3,701,805 3,677,996,870 3,677,997
Shares issued in the year 131,754,400 131,754 23,807,817 23,808
Balance at 30 September 3,833,559,087 3,833,559 3,701,804,687 3,701,805
During the year to 30 September 2022 the following share issues took place:
An issue of 8,781,779 0.1p ordinary shares at 0.19p per share to three
directors, for a total consideration of £16,685, in satisfaction of
directors' fees (10 January 2022).
An issue of 500,000 0.1p ordinary shares at 0.135p per share, via exercise of
warrants for a total of £675 (31 January 2022).
An issue of 100,000,000 0.1p ordinary shares at 0.1p per share, via placing
for a total of £100,000 (12 July 2022).
An issue of 9,500,000 0.1p ordinary shares at 0.1p per share, as settlement of
broker placing commission and broker quarterly fee for a total of £9,500 (12
July 2022).
An issue of 12,972,621 0.1p ordinary shares at 0.113p per share to three
directors, for a total consideration of £14,594, in satisfaction of
directors' fees (8 August 2022).
During the year to 30 September 2021 a total of 23,807,817 0.1p ordinary
shares were issued, at an average price of 0.18p per share, for a total
consideration of £43,643 net of expenses.
Nature and purpose of reserves
Foreign currency reserve
Exchange differences relating to the translation of the net assets of the
Group's foreign operations, which relate to subsidiaries only, from their
functional currency into the Parent's functional currency, being Sterling, are
recognised directly in the foreign currency reserve.
Share warrant reserve
The share warrant reserve is used to recognise the value of equity-settled
share warrants provided to employees, including key management personnel, as
part of their remuneration, and to third parties in connection with
fundraising. Refer to Note 15 for further details.
Share premium reserve
The share premium account represents premiums received on the initial issuing
of the share capital. Any
transaction costs associated with the issuing of shares are deducted from
share premium.
Fair value reserve
Fair value reserve represents the cumulative fair value changes of
available-for-sale equity investment assets.
15. Share warrants granted
Warrants not exercised or expired at 30 September 2022
Issue date Exercise price Number Exercisable Expiry dates
31/01/18 0.160p 3,250,000 Any time before expiry 31/01/23
21/02/19 0.160p 4,000,000 Any time before expiry 21/02/24
21/02/19 0.110p 4,000,000 Any time before expiry 21/02/24
06/08/20 0.195p 35,000,000 *Any time from 05/08/21 05/08/25
05/08/22 0.1125p 8,000,000 Any time from 05/08/23 05/08/23
18/07/22 0.2p 109,500,000 Any time before expiry 18/01/23
18/07/22 0.2p 5,000,000 Any time before expiry 18/07/23
Total 168,750,000
*Of these 15,000,000 warrants cannot be exercised before the Company makes the
first sustainable sales of perlite/pozzolan product from the CS Project.
Share warrants are issued for nil consideration and are exercisable as
disclosed above. They are exchangeable on a one for one basis for each
ordinary share of 0.1p at the exercise price on the date of conversion.
Share warrant movements:
2022 2021
Number of Weighted Number of share warrants Weighted
share average average
warrants exercise exercise
price price
(Pence) (Pence)
Outstanding at start of year 49,500,000 0.18 92,948,052 0.18
Granted during the year 122,500,000 0.19 - -
Forfeited during the year - - - -
Exercised during the year (500,000) 0.135 (11,090,909) 0.12
Expired during the year (2,750,000) 0.135 (32,357,143) 0.20
Outstanding at end of year 168,750,000 0.19 49,500,000 0.18
Exercisable at end of year 160,750,000 0.19 49,500,000 0.18
The share warrants outstanding at 30 September 2022 had a weighted average
exercise price of 0.19p (2021: 0.18p), a weighted average fair value of 0.02p
(2021: 0.064p) and a weighted average remaining contractual life of 1.11
years.
In the year ended 30 September 2021 no warrants were granted.
In the year ended 30 September 2022 warrants were granted on 18 July 2022 as
part of fundraise and to Peterhouse Capital Limited as settlement of broker
commission and broker quarterly fee with an aggregate estimated fair value of
£667.
In the year ended 30 September 2022 warrants were granted on 5 August 2022 to
non-executive directors of the Company and employees of Tertiary Minerals plc
with an aggregate estimated fair value of £2,735. Note 5 explains the value
recognised in the reporting period in respect of Tertiary Minerals plc.
In the year to 30 September 2022 the Company recognised expenses of £1,087
(2021: £19,664) related to issuing of share warrants in connection with
equity-settled share-based payment transactions. The fair value is charged to
administrative expenses and where there is a vesting period it is charged on a
straight-line basis over the vesting period, together with a corresponding
increase in equity, based on the management's estimate of shares that will
eventually vest.
The fair values of warrants are estimated using a Black-Scholes-Merton Pricing
Model and charged to administrative expenses on a straight-line basis over the
vesting period, together with a corresponding increase in equity, based on the
management's estimate of shares that will eventually vest.
The inputs into the Black-Scholes-Merton Pricing Model were as follows: 2022 2021
Weighted average share price 0.11p -
Weighted average exercise price 0.19p -
Expected volatility 60% -
Expected life 0.75 -
Risk-free rate 0.02% -
Expected dividend yield 0% -
Expected volatility was determined by calculating the historical volatility of
the Company's share price over the previous 3 years. The expected life used
in the model has been adjusted, based on management's best estimate, for the
effects of non-transferability, exercise restrictions and behavioural
considerations.
In the year ended 30 September 2022 the following share warrants were
exercised:
On 31 January 2022 500,000 warrants at an exercise price of 0.135p were
exercised for a consideration of £675.
16. Related party transactions
Key management personnel
The directors holding office at the year end and their warrants held in the
share capital of the Company are:
At 30 September 2022 At 30 September 2021
Shares number Share warrants Warrant Warrant Shares Share warrants
number exercise expiry number number
price date
P L Cheetham* 247,532,996 30,000,000 0.195p 05/08/25 234,293,916 30,000,000
J Cole 6,863,763 2,500,000 0.113p 05/08/27 - -
R D Murphy 65,093,787 2,000,000 0.160p 21/02/24 54,942,230 4,000,000
2,000,000 0.195p 05/08/25
2,500,000 0.113p 05/08/27
*Includes 5,500,000 shares held by K E Cheetham, wife of P L Cheetham
Tertiary Minerals plc
Sunrise Resources plc is treated as an investment in the consolidated accounts
of Tertiary Minerals plc, which held 0.57% of the issued share capital on 30
September 2022 (2021: 0.59%).
Tertiary Minerals plc provides management services to Sunrise Resources plc
and consequently during the year the Group incurred costs of £171,052 (2021:
£165,058).
At the balance sheet date an amount of £46,232 (2021: £44,147) was due to
Tertiary Minerals plc, included in trade and other payables (Note 13).
Patrick Cheetham, the Executive Chairman of the Company, is also a director of
Tertiary Minerals plc.
At 30 September 2022 and at the date of this report Donald McAlister, a
director of Tertiary Minerals plc, held 550,000 shares in the Company.
17. Leases
Right of use assets Group Group
2022 2021
£ £
Cost
At start of year 21,010 21,970
Additions - -
Disposals - -
Foreign currency exchange adjustments 4,389 (960)
At 30 September 25,399 21,010
Depreciation
At start of year (7,587) (3,539)
Charge for the year (5,080) (4,202)
Disposals - -
Foreign currency exchange adjustments (1,585) 154
At 30 September (14,252) (7,587)
Carrying amounts
At 30 September 11,147 13,423
At start of year 13,423 18,431
Lease liabilities Group Group
2022 2021
£ £
Cost
At start of year 7,015 9,700
Additions - -
Lease payments (2,874) (2,378)
Interest charge 106 117
Foreign currency exchange adjustments 1,466 (424)
At 30 September 5,713 7,015
Minimum lease Interest Present value
payments £ £
£
No later than one year 2,874 (35) 2,839
Later than one year and no later than 5 years 2,874 - 2,874
Later than five years - - -
Total lease liabilities 5,713
Current liabilities 2,839
Non-current liabilities 2,874
The right of use assets and related lease liabilities are for the lease of
water rights for use in conjunction with the CS Project in Nevada, USA. Total
cash flow outflow amount is £5,186.
18. Capital management
The Group's capital requirements are dictated by its project and overhead
funding requirements from time to time. Capital requirements are reviewed by
the Board on a regular basis.
The Group manages its capital to ensure that entities within the Group will be
able to continue as going concerns, to increase the value of the assets of the
business and to provide an adequate return to shareholders in the future when
exploration assets are taken into production.
The Group manages the capital structure and makes adjustments to it in the
light of changes in economic conditions and the risk characteristics of its
assets. In order to maintain or adjust the capital structure the possibilities
open to the Group in future include issuing new shares, consolidating shares,
returning capital to shareholders, taking on debt and selling assets.
19. Financial instruments
At 30 September 2022, the Group's and Company's financial assets consisted of
receivables due within one year, other investments and cash and cash
equivalents. At the same date, the Group and Company had no financial
liabilities other than trade and other payables due within one year and had no
agreed borrowing facilities as at this date. There is no material difference
between the carrying and fair values of the Group's and Company's financial
assets and liabilities.
The carrying amounts for each category of financial instrument held at 30
September 2022, as defined in IFRS 9, are as follows:
Group Company Group Company
2022 2022 2021 2021
£ £ £ £
Financial assets at amortised cost 245,433 108,238 488,868 349,481
Financial assets at fair value through other comprehensive income 20,075 11,250 63,503 45,675
Financial Liabilities at amortised cost 118,728 66,061 110,331 56,146
Risk management
The principal risks faced by the Group and Company resulting from financial
instruments are liquidity risk, foreign currency risk and, to a lesser extent,
interest rate risk and credit risk. The directors review and agree policies
for managing each of these risks as summarised below. The policies have
remained unchanged from previous periods as the risks are assessed not to have
changed.
Liquidity risk
The Group holds cash balances in Sterling, US Dollars, Australian Dollars and
others to provide funding for exploration and evaluation activity, whilst the
Company holds cash balances in Sterling, US Dollars, Australian Dollars and
small amounts in other currencies.
The Company is dependent on equity fundraising through private placings which
the directors regard as the most cost-effective method of fundraising. The
directors monitor cash flow in the context of their expectations for the
business to ensure sufficient liquidity is available to meet foreseeable
needs.
Currency risk
The Group's financial risk management objective is broadly to seek to make
neither profit nor loss from exposure to currency or interest rate risks. The
Group is exposed to transactional foreign exchange risk and takes profits and
losses as they arise as, in the opinion of the directors, the cost of hedging
against fluctuations would be greater than the related benefit from doing so.
Fluctuations in the exchange rate may have a material effect on reported loss
or equity.
Group Company Group Company
Bank balances were held in the following denominations: 2022 2022 2021 2021
£ £ £ £
United Kingdom Sterling 49,959 49,959 328,133 328,133
Australian Dollar 8,588 4,381 19,544 9,568
United States Dollar 37,501 19,226 23,986 39
Other 78 78 77 77
Interest rate risk
The Company finances operations through equity fundraising and therefore does
not carry borrowings.
Fluctuating interest rates have the potential to affect the loss and equity of
the Group and the Company insofar as they affect the interest paid on
financial instruments held for the benefit of the Group. The directors do not
consider the effects to be material to the reported loss or equity of the
Group or the Company presented in the financial statements.
Credit risk
The Company has exposure to credit risk through receivables such as VAT
refunds, invoices issued to related parties and its joint arrangements for
management charges. The amounts outstanding from time to time are not material
other than for VAT refunds which are considered by the directors to be low
risk.
The Company has exposure to credit risk in respect of its cash deposits with
NatWest bank and this exposure is considered by the directors to be low risk.
20. Provision for liabilities and charges
Group 2022 2021
£ £
Reclamation Liability 26,665 -
At start of year
Additions 2,915 26,665
Reduction/reversal (3,479) -
Interest 409 -
Exchange adjustments 5,569 -
At 30 September 32,079 26,665
The Group makes provision for future reclamation costs relating to exploration
projects. Provisions are calculated based upon internal estimates and expected
costs based upon past experience and expert guidance where appropriate.
21. Contingent Assets
The Company has the following contingent assets:
Power Metal Resources plc
2.25 million warrants and 2% Net Smelter Return Royalty, received as part of
the consideration for the disposal of Stonewall and Garfield exploration
projects in June 2021.
VR Resources
3% Net Smelter Return Royalty received as part of the consideration for the
sale of the Junction Gold-Copper exploration project to in August 2017.
No values have been assigned to these contingent assets on the basis that
realisation is uncertain and considered to be unpredictable.
22. Other income
Lease Option agreement with Kinross
In October 2021, the Company entered into a lease/option agreement with
reserved royalty 2.5% Net Smelter Return Royalty with Kinross Gold U.S.A Inc.
granting Kinross a Lease and Option to purchase the Company's 25 Jackson Wash
mining claims in Nevada, USA. Under the terms of the Agreement Kinross a
lease payment was made to the Company of US£5,000 and signing bonus of
$10,000.
23. Events after the year-end
On 29 November 2022, the Company raised £280,000 through a placement of
80,000,000 new ordinary shares and the issue of a £200,000 convertible
security. The agreement, with US institutional investor Towards Net Zero LLC,
allows the Company to issue a further convertible security within 6 months of
the Closing Date, 6 December 2022, to raise a further £200,000 subject to
certain conditions precedent.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR MZMMZLFVGZZGRecent news on Sunrise Resources
See all newsREG - Sunrise Resources - Pioche Sepiolite Project – Positive Test Results
AnnouncementRCS - Sunrise Resources - Gold & Silver Projects
AnnouncementRCS - Sunrise Resources - Pioche Sepiolite Project
AnnouncementREG - Sunrise Resources - Directorate Change
AnnouncementREG - Sunrise Resources - Total Voting Rights
Announcement