REG - Tungsten West PLC - Financial Results for the Year Ended 31 March 2025
04/09/2025 07:00
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RNS Number : 9350X Tungsten West PLC 04 September 2025
04 September 2025
Tungsten West Plc
("Tungsten West", the "Company" or the "Group")
Financial Results for the Year Ended 31 March 2025
Release of Annual Report
Tungsten West (LON:TUN), the mining company focused on restarting production
at the Hemerdon tungsten and tin mine ("Hemerdon" or the "Project") in Devon,
UK, is pleased to announce its audited results for the year ended 31 March
2025.
Copies of Tungsten West's Annual Report and Financial Statements for the
Financial Year to 31 March 2025 are available to download from the Company's
website at www.tungstenwest.com and will shortly be posted to shareholders.
Highlights
· Release of the Development and Economic Plan and completion of
the Feasibility Study for Hemerdon, outlining a clear and manageable approach
to bring the Project back into production, showcasing:
o Positive project restart economics at a market price of $400/metric tonne
unit ("mtu") of ammonium paratungstate ("APT") the key market index for traded
tungsten trioxide ("WO(3)"):
§ Internal Rate of Return of 29%
§ Net Present Value at a 7.5% discount rate of US$190 million
§ Life of mine post-tax cash flow of US$456 million
§ Base case 11-year life of mine, 4 years of subsequent stockpile reclaim and
an additional 12 years of on-going premium aggregate sales
o Capacity to process 3.5 million tonnes per annum of primary ore feed at
fully permitted production, to produce, on average 3,320 tonnes of WO(3), and
462 tonnes of tin in concentrate per annum.
· Externally, following China's implementation of significant
tungsten export restrictions in February 2025 (China accounting for over 80%
of the world's global production of tungsten), market supply has remained
extremely tight. As a result of this, market prices for APT have risen to
above $500/mtu, further enhancing the economics of Hemerdon.
· Hemerdon selected by the European Commission as a Strategic
Project under the European Union's Critical Raw Materials Act.
· Receipt of a non-binding Letter of Interest from the
Export-Import Bank of the United States, the official export credit agency of
the U.S., outlining its capacity to provide financial support to a
consideration of up to US$95 million for the Company and the Project.
· Raised a further £12.0 million through the issue of Tranches E,
F, G and H of the Convertible Loan Note of which £6.7 million was raised in
the period and £5.3 million post-period end.
· The Environment Agency granted the Company a permit to operate
its Mineral Processing Facility, the last of the key permits required to
further progress the Project.
· Mr Jeffery Court appointed as Chief Executive Officer and to the
Board of Directors.
· Mr Alistair Stobie, Chief Financial Officer, appointed to the
Board of Directors.
· Further strengthened the Board with the appointment of Mr Stephen
Harrison as Non-Executive Chairman.
Ends
For further information, please contact:
Enquiries
Tungsten West Strand Hanson
Alistair Stobie (Nominated Adviser and Financial Adviser)
Tel: +44 (0) 1752 278500 James Spinney / James Dance / Abigail Wennington
Tel: +44 (0) 207 409 3494
BlytheRay
(Financial PR)
Tim Blythe / Megan Ray
Tel: +44(0) 20 7138 3204
Email: tungstenwest@blytheray.com
Hannam & Partners
(Broker)
Andrew Chubb / Matt Hasson / Jay Ashfield
Tel: +44 (0)20 7907 8500
Follow us on X @TungstenWest
Chairman's Statement
Overview of FY2025
Having joined Tungsten West as Chairman of the Board in December, I am pleased
to report on the Group's audited results for the year ended 31 March 2025.
The year has been one of progress. The Company has made decisive and
meaningful steps towards reopening the Hemerdon tungsten and tin mine, which
will provide a secure tungsten supply chain to the UK and its allies. As
announced previously, and as written in previous Annual Reports, we expect to
restart mining and processing operations in late 2026.
Jeff Court was appointed as Chief Executive Officer of the Company in August,
subsequently joining the board in October. Under Jeff's leadership, utilising
his considerable experience, the Company has undertaken a full review of
planned mining and processing operations. Much of this work was completed in
the period leading to the publication of our Development and Economic Plan for
Hemerdon in May 2025. This was followed by the completion and publication of a
new Feasibility Study which was announced in August 2025. We have been
fortunate to work with excellent consultants and suppliers to refresh and
improve our plans to restart mining operations at Hemerdon.
The revised plans include a new crushing, screening and ore sorting front-end,
the engineering and addition of Low Frequency Noise ("LFN") enclosures,
additional processing equipment modules to enhance performance, cost and
recovery, and a full refurbishment of the existing mineral processing facility
components. The roll crushers installed by previous operator, Wolf Minerals,
were not sufficiently robust to process high volumes of granite and proved a
constant point of failure. Working with a highly reputable supplier to the
quarrying industry, we have designed a new crushing facility which utilises
proven crushing solutions.
Due to export restrictions imposed by China, there remains an extremely
limited supply of tungsten currently being exported from China. As a result,
there is a significant and increasing gap between Western world demand and
supply of tungsten. The export restrictions imposed by China further highlight
the supply chain dependence of the Western world for critical metals, such as
tungsten, that find application in key industries such as automotive
manufacturing, defence and energy generation. This growing imbalance of
supply and demand has further improved our project economics.
During the period, the Company raised a further £6.7 million through the
further issue of Convertible Loan Notes, and post-period end raised a further
£5.3 million in July 2025. The Board remains grateful to the small group of
investors who continue to actively support the project.
With a fully permitted site, independently verified revised plans published
and growing demand for tungsten, we are confident that our project will be
attractive to further investors. The Company is actively working to raise the
US$93 million, not including any amounts for debts service or capital raising,
required to fund the restarting of mining operations. Hannam & Partners,
as broker, have been retained to advise the Company.
Having stepped down as Chairman in December, I am grateful that David Cather
has remained on the Board of the Company sharing his knowledge and insight.
Finally, I would like to thank the team at Tungsten West who have supported
both management and the Board through this period of progression. It is their
dedication that will enable us to recommence mining of critical minerals in
the south west of England.
Stephen Harrison
Non-Executive Chairman
CEO's Report
I am pleased to be able to make my first report since joining the Company in
October 2024 on our highly significant progress over the last year.
The primary objective in this first period was to finalise a robust re-start
plan for the Hemerdon mine that incorporates all the learnings from the prior
operations under Wolf Mineral's operation, in addition to drawing upon latest
technologies, best practice, further test work programs and input from a range
of experts.
A significant amount, but not all, of this work has focused on addressing the
shortcomings in the processing plant under prior operations, and I am pleased
to say that our updated processing flow sheet and processing plant design
incorporates a range of improvements that addresses these shortcomings.
Some of the key improvements to the updated process plant include a new, fit
for purpose front-end crushing and screening circuit, a crushed ore stockpile
providing buffer from the front-end to the down-stream processing, ore sorters
to select higher value material for down-stream processing, installation of
new gravity separation process modules and a full plant refurbishment and
enhancement for prior areas that remain in the process flow sheet going
forward. Further to this, we have also assessed, reviewed and improved many
other aspects of the operation, ranging from mine scheduling, ore blending and
feed and mitigating our environmental impact. All of this work is incorporated
in our extensive Feasibility Study that was completed earlier in 2025 with the
summary published in August 2025.
In order to de-risk the project delivery, we have been working in partnership
with a leading supplier of engineering, procurement and construction (EPC)
services in the UK for the new build components of the project, in addition to
undertaking pre-commissioning work on various areas of the pre-existing
processing plant.
Further to this, we have also continued to focus on our engagement with our
key stakeholders, in particular the Environment Agency, council and the local
community groups. We plan to be a long-term part of the region, providing over
300 direct jobs, in addition to over 1,000 indirect jobs. To do this
successfully, we must continue to work closely with all our valued
stakeholders.
Our next important stage of progressing the project is securing the right
funding package for us to make the re-start plan a reality, and undertaking
targeted work packages to ensure a streamlined transition to construction as
soon as practicable after funding becomes available.
As a philosophy, our approach has always been to focus on the controllables
and make the business as robust as possible. Our feasibility study shows
Hemerdon will be in the lowest end of the cash cost of production for
tungsten. In parallel to this internal work, we have also seen significant
improvements in the global tungsten market. As Stephen has noted above, there
has been and will continue to be significant changes in the tungsten market.
China being a producer of over 80% of the world's tungsten, introduced
significant export restrictions in February 2025, and exports have effectively
ceased since this time. This has placed unprecedented stress on the global
supply chain for tungsten, making the re-start of Hemerdon vital for our
down-stream off-takers. We are in close dialogue with all our down-stream
partners and appreciate their continued support to assist the Company in
progressing its funding discussions to enable us to come on-line as quickly as
possible to meet their needs.
In recognition of Hemerdon's key strategic position in the global tungsten
supply chain, we were designated by the European Commission in June 2025 as
being a Strategic Project under the European Union's (EU) Critical Raw
Materials Act, being one of only 13 projects receiving this designation
outside the EU. Further to this, in August 2025 the Company also received a
non-binding Letter of Interest from Export-Import Bank of the United States
("EXIM"), the official export credit agency of the U.S. Under the new Supply
Chain Resilience Initiative, EXIM can consider financing up to US$95 million
for a maximum repayment term of 15 years, with anticipated financing not tied
to specific equipment purchases, rather being predicated upon the our offtake
agreement with U.S. buyers. Both these recent milestones further cement
Hemerdon's position as being key part in the global critical metals supply
chain to both Europe and the U.S.
We could not have done all of this work in the timelines without the dedicated
hard work from our direct employees, consultants and business partners. I
extend my sincere appreciation to all of you for continuing to believe in the
incredibly robust business we have in re-starting the Hemerdon mine. In
addition, we as a business team, also extend our appreciation to our funding
providers who have supported us financially to get to this point where we now
have a clear and targeted pathway forward.
Jeff Court
CEO
Consolidated Statement of Comprehensive Income
Year ended 31 March 2025
Note 2025 2024
£
£
Revenue 5 - 722,036
Cost of sales (1,244,174) (2,099,895)
Gross loss (1,244,174) (1,377,859)
Administrative expenses (8,268,993) (8,966,124)
Other operating income 6 6,235 14,424
Other (losses)/gains 7 (6,432,801) 3,079,384
Operating loss 8 (15,939,733) (7,250,175)
Finance income 9 579,880 200,175
Finance costs 9 (6,816,977) (2,844,319)
Net finance cost 9 (6,237,097) (2,644,144)
Loss before tax (22,176,830) (9,894,319)
Income tax credit 13 264,572 194,403
Loss for the year (21,912,258) (9,699,916)
Total comprehensive loss (21,912,258) (9,699,916)
Profit/(loss) attributable to:
Owners of the Company (21,912,258) (9,699,916)
£ £
Basic and diluted loss per share 14 (0.12) (0.05)
The above results were derived from continuing operations.
Consolidated Statement of Financial Position
Year ended 31 March 2025
Note 31 March 31 March
2025
2024
£
£
Assets
Non-current assets
Property, plant and equipment 15 9,455,736 19,266,279
Right-of-use assets 16 1,984,419 1,895,584
Intangible assets 17 4,984,614 5,058,686
Deferred tax assets 13 1,368,014 1,382,901
Escrow funds receivable 19 13,237,420 11,059,151
31,030,203 38,662,601
Current assets
Inventories 22 29,850 29,850
Trade and other receivables 20 2,986,872 2,809,893
Cash and cash equivalents 21 18,442 1,581,535
3,035,164 4,421,278
Total assets 34,065,367 43,083,879
Equity and liabilities
Equity
Share capital 27 1,887,313 1,870,741
Share premium 51,949,078 51,949,078
Share option reserve 319,526 256,278
Warrant reserve - -
Retained earnings (54,676,325) (32,764,067)
Equity attributable to owners of the Company (520,408) 21,312,030
Non-current liabilities
Loans and borrowings 24 1,870,366 1,803,533
Provisions 25 4,006,771 5,137,646
Deferred tax liabilities 13 1,368,014 1,382,901
7,245,151 8,324,080
Current liabilities
Trade and other payables 23 2,570,049 1,754,903
Loans and borrowings 24 24,770,575 11,692,866
27,340,624 13,447,769
Total liabilities 34,585,775 21,771,849
Total equity and liabilities 34,065,367 43,083,879
The financial statements were approved by the Board on 04 September 2025 and
signed on its behalf by:
Alistair Stobie
Director
Company Registration Number: 11310159
Consolidated Statement of Changes in Equity
Year ended 31 March 2025
Share capital Share premium Share option reserve Warrant reserve Retained earnings Total
£
£
£
£
£
£
At 31 March 2024 1,870,741 51,949,078 256,278 - (32,764,067) 21,312,030
Loss for the year - - - - (21,912,258) (21,912,258)
Total comprehensive income - - - - (21,912,258) (21,912,258)
New share capital subscribed 16,572 - - - - 16,572
Share options charge - - 63,248 - - 63,248
At 31 March 2025 1,887,313 51,949,078 319,526 - (54,676,325) (520,408)
At 31 March 2023 1,805,516 51,882,761 357,366 740,867 (23,805,018) 30,981,492
Loss for the year - - - - (9,699,916) (9,699,916)
Total comprehensive income - - - - (9,699,916) (9,699,916)
New share capital subscribed 65,225 66,317 - - - 131,542
Expired warrants - - - (740,867) 740,867 -
Share options charge - - 85,138 - - 85,138
Forfeiture of share options - - (186,226) - - (186,226)
At 31 March 2024 1,870,741 51,949,078 256,278 - (32,764,067) 21,312,030
Consolidated Statement of Cash Flows
Year ended 31 March 2025
Note 2025 2024
£
£
Cash flows from operating activities
Loss for the year (21,912,258) (9,699,916)
Adjustments to cash flows from non-cash items
Depreciation and amortisation 8 470,036 522,898
Loss on disposal of right to use asset 8 - 6,807
Loss on disposal of tangible fixed assets 8 5,181 3,137
Impairment of asset under construction 7 9,506,522 2,157,923
Gains on escrow account 7 (1,602,739) (5,721,727)
Gains on restoration provision 7 (1,470,982) (889,126)
Finance income 9 (579,880) (200,175)
Finance costs 9 6,816,977 2,844,319
Movement in share-option reserve 10 60,583 (101,088)
Impact of foreign exchange 9 (12,734) (49,551)
Income tax credit 13 (264,572) (194,403)
(8,983,866) (11,320,902)
Working capital adjustments
Income tax received - 458,975
(Increase)/decrease in trade and other receivables 20 (176,979) 3,353,698
Increase/(decrease) in trade and other payables 23 815,146 (840,270)
Decrease in inventories 22 - 84,323
Net cash outflow from operating activities (8,345,699) (8,264,176)
Cash flows from investing activities
Interest received 9 4,350 9,713
Acquisitions of property, plant and equipment 15 (19,885) (2,703,810)
Acquisitions of intangibles 17 (750) (39,952)
Net cash outflows from investing activities (16,285) (2,734,049)
Cash flows from financing activities
Interest paid 9 (5,766) (9,793)
Proceeds from issue of Ordinary Shares, net of issue costs 16,572 131,542
Proceeds from the issue of convertible loan notes, net of issue costs 24 6,751,000 9,241,830
Payments to hire purchase (31,873) (20,302)
Payments to lease liabilities (198,279) (201,535)
Net cash inflows from financing activities 6,531,654 9,141,742
Net decrease in cash and cash equivalents (1,563,093) (1,856,483)
Cash and cash equivalents at 1 April 1,581,535 3,438,018
Cash and cash equivalents at 31 March 18,442 1,581,535
Notes to the Consolidated Financial Statements
Year ended 31 March 2025
1 General information
Tungsten West plc ('the Company') is a public limited company, incorporated in
England and Wales and domiciled in the United Kingdom.
The address of its registered The principal place of
office is:
business is:
Hemerdon Mine Hemerdon Mine
Drakelands Drakelands
Plympton Plympton
Devon Devon
PL7 5BS PL7 5BS
United Kingdom United Kingdom
2 Accounting policies
Summary of significant accounting policies and key accounting estimates
The principal accounting policies applied in the preparation of these
financial statements are set out below. These policies have been consistently
applied to all the years presented, unless otherwise stated.
Basis of preparation
The Group financial statements have been prepared in accordance with
International Accounting Standards as adopted in the United Kingdom ('UK
adopted IAS') and those parts of the Companies Act 2006 that are applicable to
companies which apply UK adopted IAS.
The financial statements are presented in Sterling, which is the functional
currency of the Group and Company.
Going Concern
The Group is still in the pre-production phase of operations and meets its day
to day working capital requirements by utilising cash reserves from investment
made in the Group. Over the last year this has been dependent on raising funds
via issues of convertible loan notes (CLN). There is no signed commitment from
investors to provide further funds under the existing CLN agreement. The Group
previously notified CLN holders of multiple defaults of the terms of the CLN
agreement. A waiver was subsequently agreed and is in place until 31 December
2025. If further defaults were to arise, or the terms of the waiver be
breached or expire before conversion, the notes can be called in for immediate
redemption.
At the year-end, the Group had £0.02 million in cash reserves and £2.1
million in late August 2025. The Group expects to supplement its cash reserves
through product sales and recovery of amounts previously paid to an equipment
supplier for a cancelled order (of £0.7m). The recovery of the amount from
the equipment supplier is still subject to negotiation however, the Board
believes that this amount will be recoverable during 2025. If these inflows do
not arise as expected cash reserves will be depleted sooner than forecast
below. If the Group has not completed a major fundraising in late 2025 then it
will be need to raise additional short-term funding.
If these fund raises do not occur in 2025 the Group will have insufficient
cash to meet its liabilities as they fall due. These conditions indicate that
a material uncertainty exists that may cast significant doubt on the Group's
and company's ability to continue as a going concern.
In addition to short-term financing, the Group still requires additional
funding to complete the MPF rebuild and is in discussions with financing
partners to provide the additional capital. The capital amount of the
financing, not including financing costs and any financing reserves, if any,
is US$93 million.
Until the additional capital is secured, the Group will continue to proceed by
utilising existing cash reserves from previous drawings on the 2023 CLN
facility. The board will not commit to significant further capital expenditure
until the full finance package is in place to complete the rebuild.
Model 1 - Funding for Operating Costs and Obtain Financing
This scenario models management's expectation of cash required to raise
finance and general and administrative expenses, including maintaining the
existing mine permits. This does not include any expenses related to FEED, or
capital expenditures to restart operations. The Company is in discussion with
a number of parties regarding financing of operations to complete FEED and
capital raising operations.
As a result, the Board intends that the Group to be able to operate as a going
concern for the foreseeable future. Consequently, the Board continue to adopt
the going concern basis in preparing these financial information despite the
material uncertainty referred to above.
Basis of consolidation
The Group financial statements consolidate the financial statements of the
Company and its subsidiary undertakings drawn up to 31 March 2025.
A subsidiary is an entity controlled by the Company. Control is achieved where
the Company has the power to govern the financial and operating policies of an
entity so as to obtain benefits from its activities. Accounting policies of
subsidiaries have been changed where necessary to ensure consistency with the
policies adopted by the Group.
The purchase method of accounting is used to account for business combinations
that result in the acquisition of subsidiaries of the Group. The cost of a
business combination is measured as the fair value of the assets given, equity
instruments issued and liabilities incurred or assumed as at the date of
exchange. Identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are measured initially at their
fair values at the acquisition date, including deferred tax if required. Any
excess of the cost of the business combination over the acquirer's interest in
the net fair value of the identifiable assets, liabilities and contingent
liabilities is recognised as goodwill.
Changes in accounting policy
None of the standards, interpretations and amendments effective for the first
time from 1 April 2024 have had a material effect on the financial statements.
Revenue recognition
To date revenue has mainly related to the sale of low grade concentrate which
was left behind by the previous mining operator. This is recognised upon pick
up by customers at the fair value of consideration receivable at that date.
Tax
Income tax expense consists of the sum of current tax and deferred tax.
Current tax is based on taxable profit for the year. Taxable profit differs
from profit as reported for accounting purposes because of items of income or
expense that are taxable or deductible in other years and items that are never
taxable or deductible.
Current tax is calculated using tax rates that have been enacted or
substantively enacted by the end of the reporting period. A provision is
recognised for tax matters that are uncertain if it is considered probable
that there will be a future outflow of funds to a tax authority. The provision
is measured at the best estimate of the amount expected to become payable. The
assessment is based on the judgement of management supported by the advice of
tax professionals contracted by the company.
Deferred tax liabilities are generally recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which deductible
temporary differences can be utilised. Such assets and liabilities are not
recognised if the temporary difference arises from the initial recognition of
goodwill or from the initial recognition (other than in a business
combination) of other assets and liabilities in a transaction that affects
neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting date
and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be
recovered. Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled or the asset is realised
based on tax laws and rates that have been enacted or substantively enacted at
the reporting date.
The Group has submitted research and development tax credit claims. The Group
accounts for a claim at the point it considers the claim to be unchallenged by
HMRC.
Property, plant and equipment
Land and buildings are stated at cost less any depreciation or impairment
losses subsequently accumulated (cost model). Land and buildings have been
uplifted to fair value on consolidation.
Plant and equipment is stated in the statement of financial position at cost,
less any subsequent accumulated depreciation and subsequent accumulated
impairment losses.
The asset under construction relates to costs incurred to upgrade the mineral
processing facility and in accordance with IAS 16, have capitalised costs if
it is probable that future economic benefits associated with the item will
flow to the entity and the cost can be measured reliably.
Depreciation
Depreciation is charged so as to write off the cost of assets, other than land
and assets under construction over their estimated useful lives, as follows:
Asset class Depreciation method and rate
Land None
Building 2% - 5% Straight Line
Furniture, fittings and equipment 5% - 20% Straight Line
Computer equipment 33% Straight Line
Motor vehicles 33% Straight Line
Other property, plant and equipment 5% - 33% Straight Line
Goodwill
Goodwill is recognised at cost and reviewed for impairment annually.
Intangible assets
Contractual mining rights as set out in the mining lease are recognised as a
separate intangible asset on consolidation under IFRS 3.
The mining rights are subject to amortisation over the useful life of the mine
which is 27 years (2024: 27 years). Amortisation will be charged from the date
the mine is brought into use. Software is amortised on a straight-line basis
using a rate of 33%.
Right-of-use assets
Right-of-use assets consist of a lease for the Hemerdon Mine and other
property leases under IFRS 16. These assets are depreciated over the shorter
of the lease term and the useful life of the underlying asset. Depreciation
starts at the commencement date of the lease.
Research and development activities
All research costs are expensed. Costs related to the development of products
are capitalised when they meet the following conditions:
(i) It is technically feasible to complete the
development so that the product will be available for use or sale.
(ii) It is intended to use or sell the product being
developed.
(iii) The Group is able to use or sell the product being
developed.
(iv) It can be demonstrated that the product will generate
probable future economic benefits.
(v) Adequate technical, financial and other resources
exist so that product development can be completed and the product
subsequently used or sold.
(vi) Expenditure attributable to the development can be
reliably measured.
All other development expenditure is recognised as an expense in the period in
which it is incurred.
Capitalised development costs are stated at cost less accumulated amortisation
and accumulated impairment losses (cost model). Amortisation is recognised
using the straight-line basis and results in the carrying amount being
expensed in profit or loss over the estimated useful lives which range from 5
to 15 years.
Exploration for and evaluation of mineral resources
Costs relating to the exploration for and evaluation on mineral resources are
expensed.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and call deposits, and other
short-term highly liquid investments that are readily convertible to a known
amount of cash and are subject to an insignificant risk of changes in value.
Trade receivables
Trade and other receivables where payment is due within one year do not
constitute a financing transaction and are recorded at the undiscounted amount
expected to be received, less attributable transaction costs. Any subsequent
impairment is recognised as an expense in profit or loss.
All trade and other receivables are subsequently measured at amortised cost,
net of impairment.
Escrow funds
These funds are held with a third party to be released to the Group as it
settles its obligation to restore the mining site once operations cease. The
debtor has been discounted to present value assuming the funds will be
receivable after the useful life of mining operations.
Trade payables
Trade and other payables are initially recognised at fair value less
attributable transaction costs. They are subsequently measured at amortised
cost.
Convertible debt
Convertible loan notes issued by the group have been assessed as a host
liability contract with the conversion option meeting the recognition criteria
for an embedded derivative financial liability. The group has taken the option
available under IFRS to designate the entire instrument at fair value through
profit and loss. The instrument is initially recognised at transaction price
net of directly attributable costs incurred. The instrument is remeasured to
fair value at each reporting point with the resulting gain or loss recognised
in profit and loss.
Provisions
Provisions are recognised when the Group has a present obligation (legal or
constructive) as a result of a past event, it is probable that the Group will
be required to settle that obligation and a reliable estimate can be made of
the amount of the obligation.
Provisions are measured at the Directors' best estimate of the expenditure
required to settle the obligation at the reporting date and are discounted to
present value where the effect is material.
This includes a provision for the obligation to restore the mining site once
mining ceases.
Leases
At inception of the contract, the Group assesses whether a contract is, or
contains, a lease. It recognises a right-of-use asset and a corresponding
lease liability with respect to all material lease arrangements in which it is
the lessee. The right-of-use assets and the lease liabilities are presented as
separate line items in the statement of financial position.
The lease liability is initially measured at the present value of the lease
payments that are not paid at the commencement date, discounted by using the
rate implicit in the lease. If this rate cannot be readily determined, the
Group uses its incremental borrowing rate. It is subsequently measured by
increasing the carrying amount to reflect interest on the lease liability
(using the effective interest method) and by reducing the carrying amount to
reflect the lease payments made.
Short-term or low-value leases, in accordance with the available exemption in
IFRS 16, are not capitalised on the statement of financial position and
instead recognised as an expense, on a straight-line or other systematic
basis.
Share capital
Ordinary Shares are classified as equity. Equity instruments are measured at
the fair value of the cash or other resources received or receivable, net of
the direct costs of issuing the equity instruments. If payment is deferred and
the time value of money is material, the initial measurement is on a present
value basis.
Share options
Share options granted to shareholders classified as equity instruments are
accounted for at the fair value of cash received or receivable. Share options
granted to shareholders which represent a future obligation for the Company
outside of its control are recognised as a financial liability at fair value
through profit and loss.
Share options granted to employees are fair valued at the date of grant with
the cost recognised over the vesting period. If the employee is employed in a
subsidiary company, the cost is added to the investment value, in the
financial statements of the parent, and the expense recognised in staff costs
in the statements of the subsidiary.
Warrants issued in return for a service are classified as equity instruments
and measured at the fair value of the service received. Where the service
received relates to the issue of shares the cost is debited against the
proceeds received in share premium.
Defined contribution pension obligation
A defined contribution plan is a pension plan under which pension
contributions are paid into a separate entity and the group has no legal or
constructive obligations to pay further contributions if the fund does not
hold sufficient assets to pay all employees the benefits relating to employee
service in the current and prior periods.
For defined contribution plans contributions are paid into publicly or
privately administered pension insurance plans on a mandatory or contractual
basis. The contributions are recognised as employee benefit expense when they
are due. If contribution payments exceed the contribution due for service, the
excess is recognised as an asset.
Financial instruments
Initial recognition
Financial assets and financial liabilities comprise all assets and liabilities
reflected in the statement of financial position, although excluding property,
plant and equipment, intangible assets, right of use assets, inventories,
deferred tax assets, prepayments, deferred tax liabilities and the mining
restoration provision. The Group recognises financial assets and financial
liabilities in the statement of financial position when, and only when, the
Group becomes party to the contractual provisions of the financial instrument.
Financial assets are initially recognised at fair value. Financial liabilities
are initially recognised at fair value, representing the proceeds received net
of premiums, discounts and transaction costs that are directly attributable to
the financial liability.
Subsequent to initial measurement, financial assets and financial liabilities
are measured at either amortised cost or fair value.
Derecognition
Financial assets
The Group derecognises a financial asset when:
• the contractual rights to the cash flows from
the financial asset expire;
• it transfers the right to receive the
contractual cash flows in a transaction in which substantially all of the
risks and rewards of ownership of the financial asset are transferred; or
• the Group neither transfers nor retains
substantially all of the risks and rewards of ownership and it does not retain
control of the financial asset.
On derecognition of a financial asset, the difference between the carrying
amount of the asset and the sum of the consideration received is recognised
as a gain or loss in the profit or loss.
Financial liabilities
The Group derecognises a financial liability when its contractual obligations
are discharged, cancelled, or expire.
Significant accounting estimates and judgements
The preparation of the financial statements requires management to make
estimates and judgements that affect the reported amounts of certain financial
assets, liabilities, income and expenses.
The use of estimates and judgements is principally limited to the
determination of provisions for impairment and the valuation of
financial instruments as explained in more detail below:
Significant accounting judgements
Impairment of non-current assets
To consider the impairment of the Group's non-current assets, management has
calculated a value in use of the Group's cash-generating unit which comprises
the Hemerdon Mine. This was determined using a discounted cashflow approach,
supported by project cashflow forecasts prepared by management. The value of
assets impacted is £14.4 million (2024: £24.3 million).
The previous model under the Bankable Feasibility Study ('BFS') has been
adapted to reflect the changes in inputs and assumptions as a result of the
project re-evaluation. The inputs and key assumptions that were used in the
determination of value in use were discount rate, metal prices, metal
recoveries, probability of financing, probability of permit award and foreign
exchange.
Discounted cashflows are based on future forecasts which reflect uncertainty.
Therefore, management has prepared a sensitised discounted cashflow
calculation. The underlying assumptions that were stress tested include the
discount rate, foreign exchange rates and metal prices and recoveries.
Management were satisfied in the recoverability of the Group's assets and no
impairment was required.
Management did separately recognise an impairment of £9.5m (2024: £2.2m) in
relation to specific costs capitalised to an area of the Mineral Process
Facility which has since been eliminated from the process.
Capitalisation of research and development costs
The Directors have reviewed any costs relating to evaluating the technical
feasibility of processing the extracted tungsten ore and have expensed these
costs in line with the current policy. The Directors have also reviewed
research and development costs and concluded that these costs fail to meet the
criteria set out in IAS 38 for the capitalisation of development costs as the
Directors still consider that they are in the research phase. The Group will
commence capitalisation of development costs at the point when available
finance has been secured to complete the project in accordance with IAS 38.
Development costs that are capitalised in accordance with the requirements of
IFRS are not treated, for dividend purposes, as a realised loss. The Group has
currently capitalised no research and development costs in accordance with IAS
38. The Group has only capitalised costs associated with the tangible
improvement and installation of property, plant and equipment under IAS 16.
Capitalisation of asset under construction costs
The Directors have reviewed any costs relating to the upgrade of the mineral
processing facility in accordance with IAS 16 and have capitalised costs if it
is probable that future economic benefits associated with the item will flow
to the entity and the cost can be measured reliably. At the year end, £4.7
million (2024: £14.1 million) of costs at carrying value have been
capitalised. The company acquired the pre-existing machinery in the mineral
processing facility for nil cost. Due to the significant period of inactivity,
refurbishment of the existing machinery has previously commenced to bring the
machinery back into use. The direct costs of restoring or improving the
functionality of the plant and machinery have been capitalised on the basis
these costs will increase the future cashflows to be generated by the asset.
In situations where parts have been replaced no matched disposal has been
required in instances where the original asset is carried at nil value.
Founder options
The Directors consider the non-EMI portion of the founder options meet the
definition of equity in the financial statements of the Group on the basis
that the 'fixed for fixed' condition is met and that they were awarded to
shareholders relating to investing in the share capital of the Group. The
accounting treatment has been applied in accordance with IAS 32, which
requires initial recognition at fair value of consideration paid less costs.
As there was no consideration received at inception, the value of the options
is £Nil. When exercised the shares are recognised at option price.
Key sources of estimation uncertainty
Restoration provision
The restoration provision is the contractual obligation to restore the mining
site back to its original state once mining ceases. The provision is equal to
the expected outflows that will be incurred at the end of the mine's useful
life discounted to present value. As the restoration work will predominantly
be completed at the end of the mine's useful life, these calculations are
subject to a high degree of estimation uncertainty. The key assumptions that
would lead to significant changes in the provision are the discount rate,
useful life of the mine and the estimate of the restoration costs.
A 1% change in the discount rate on the Group's restoration estimates would
result in an impact of £0.9 million to £1.2 million (2024: £1.1 million to
£1.6 million) on the restoration provision. A 5% change in cost on the
Group's restoration estimates would result in an impact of £0.2 million
(2024: £0.3 million) on the provision for restoration. More information on
the restoration provision is disclosed in note 25.
Escrow account
These are funds being held under escrow with a third party and will be
released back to the Company on the cessation of mining once restoration works
have been completed. The key assumptions that would lead to significant
changes in the escrow account fair value are the discount rate, the future
interest rate and the useful life of the mine.
A 1% change in the discount rate on the Group's escrow account estimate would
result in an impact of £1.5 million to £3.2 million (2024: £2.4 million to
£3.1 million) on the escrow account valuation. A one-year change in useful
mining life would result in an impact of £0.0 million (2024: £0.1 million)
on the escrow account valuation. More information on the escrow account is
disclosed in note 19.
Convertible loan notes
The convertible loan notes are measured at fair value at each reporting point.
Due to the fact that the instrument will be settled at a future point in time
either by the conversion into equity shares, conversion into an equivalent
debt instrument or repayment in cash the valuation is subject to inherent
estimation uncertainty. Management commissioned an external expert to
calculate the fair value at the year end. The fair value has been calculated
using a scenario pricing model and the key underlying assumptions are the
probabilities assessed for each underlying scenario, the discount rate
selected and the dates of conversion or redemption.
A two month earlier date of conversion or redemption assumption would result
in a £0.8m (2024: £2.1m) increase to the fair value of the year end
liability.
Discount rates
The Group has had to assess reasonable discount rates based on market factors
to use under IFRS. These discount rates have been used on the right-of-use
assets, escrow funds, the restoration provision and share based payments. The
discount rate on the right-of-use asset is the rate for an equivalent debt
instrument. The escrow funds are discounted at the risk free rate which is the
yield on an equivalent long-term UK government bond. The restoration provision
is discounted at the risk-free rate plus a premium based on the specific risk
associated with this liability. The UK risk-free rate increased over the
financial year to 5.2% (2024: 4.4%).
3 Financial risk management
Group
This note presents information about the Group's exposure to financial risks
and the Group's management of capital.
Credit risk
In order to minimise credit risk, the Group has adopted a policy of
only dealing with creditworthy counterparties (banks and debtors) and it
obtains sufficient collateral, where appropriate, to mitigate the risk of
financial loss from defaults. The most significant credit risk relates to
customers that may default in making payments for goods they have purchased.
To date the Group has only made a small number of sales and therefore the
credit risk exposure has been low.
Liquidity risk
The Directors regularly monitor forecast and actual cash flows and to match
the maturity profiles of financial assets and liabilities to ensure proper
liquidity risk management for the day-to-day working capital requirements.
In the view of the Directors, the key risk to liquidity, in the medium term,
is raising the additional capital required to meet its estimated Capex spend.
The Group's continued future operations depend on the ability to raise
sufficient capital through the issue of debt. At present the Group does not
have sufficient capital to fund its estimated Capex spend therefore there is a
liquidity risk which would result in the Group having to pause its future
operations were it to not raise the necessary capital. At present, the Group
is in discussions with financing partners to provide this additional capital.
In the short term the key risk is raising sufficient finance to fund the
operational costs of the business.
Market risk
Interest rate risk
The Group is exposed to interest rate risk through the impact of rate changes
on interest-bearing borrowings. The interest rates and terms of repayment are
disclosed in note 24 to the financial statements. The Company's policy is to
obtain the most favourable interest rates available for all liabilities.
Except as outlined above, the Group has no significant interest-bearing assets
and liabilities.
Foreign exchange risk
The Group in the future will also be exposed to exchange rate risk on the
basis that tungsten prices are principally denominated in US Dollar.
The Group will seek to manage this risk through the supply contracts
it agrees with future customers.
The Group does not use any derivative instruments to reduce its economic
exposure to changes in interest rates or foreign currency exchange rates at
the current time.
Price risk
The Group is exposed to the price fluctuation of its primary products being
tungsten and tin. Given the Group is currently in the development phase and is
not yet producing any revenue, the costs of managing exposure to commodity
price risk exceed any potential benefits. The Directors monitor this risk on
an ongoing basis and will review this as the Group moves towards production.
Inflation risk
The Group is exposed to inflationary pressures that impact the core materials
required for the operations, mainly being reagents, power and diesel costs.
The Directors monitor this risk on an ongoing basis and will review this as
the group moves towards production.
4 Operating segments
The Chief Economic Decision Maker of the Group is the Board of Directors which
considers that the Group is comprised of one operating segment representing
the Group's mining activities at the Hemerdon Mine. All operations and assets
are located in the United Kingdom and all revenues are originated in the
United Kingdom.
Revenue from customers accounting for 10% or more of Group revenue was as
follows:
2025 2024
£
£
Customer A - 435,072
Customer B - 286,964
5 Revenue from contracts with customers
The analysis of the Group's revenue for the year from continuing operations is
as follows:
2025 2024
£
£
Tungsten - 497,388
Tin - 224,648
Aggregates - -
Sale of goods - 722,036
6 Other income
The analysis of the Group's other operating income for the year is
as follows:
2025 2024
£
£
Sale of scrap metal 3,600 14,424
Sublease rental income 2,635 -
6,235 14,424
7 Other gains and losses
The analysis of the Group's other gains and losses for the year is
as follows:
2025 2024
£
£
Gain on restoration provision due to change in discount rate 1,470,982 889,126
Gain on escrow account due to change in discount and interest rate 1,602,739 5,721,727
Impairment on assets under construction deposits (trade and other receivables) - (1,373,546)
Impairment on assets under construction (property, plant and equipment) (9,506,522) (2,157,923)
Other gains and losses (6,432,801) 3,079,384
See note 19 and note 25 for further details on other gains and losses on the
escrow accounts and the restoration provision.
8 Operating loss
Arrived at after charging/(crediting):
2025 2024
£
£
Depreciation of property, plant and equipment 318,725 331,335
Depreciation of right-of-use assets 76,489 120,281
Loss on disposal of right to use asset - 6,807
Loss on disposal of tangible fixed assets 5,181 3,137
Impairment of asset under construction assets and deposits 9,506,522 3,531,469
Amortisation of intangibles 74,822 71,282
Staff costs 2,481,436 3,352,821
9 Finance income and costs
2025 2024
£
£
Finance income
Notional interest income on the escrow funds receivable 575,530 190,438
Other interest income 4,350 9,713
Foreign exchange gains - 24
579,880 200,175
Finance costs
Interest expense on other financing liabilities (111,491) (118,985)
Notional cost on the restoration provision (340,107) (325,001)
Fair value movement in convertible loan notes designated fair value through (6,346,879) (2,345,391)
profit and loss
Bank charges (5,766) (5,367)
Foreign exchange losses (12,734) (49,575)
Total finance costs (6,816,977) (2,844,319)
Net finance costs (6,237,097) (2,644,144)
10 Staff costs
The aggregate payroll costs (including Directors' remuneration) were
as follows:
2025 2024
£
£
Wages and salaries 2,074,586 2,724,119
Social security costs 253,935 331,690
Pension costs, defined contribution scheme 92,332 164,738
Share based payment 60,583 (101,088)
Amounts capitalised to asset under construction - 233,362
2,481,436 3,352,821
The average number of persons employed by the Group (including Directors)
during the year, analysed by category, was as follows:
2025 2024
No.
No.
Project, maintenance, administration and support 26 44
Directors 6 5
32 49
11 Directors' remuneration
The Directors' remuneration for the year was as follows:
2025 2024
£
£
Remuneration 681,726 487,035
Pension contribution 22,541 19,130
Benefits in kind 1,489 1,884
Total cash remuneration 705,756 508,049
Share-based payment - 4,025
Total remuneration 705,756 512,074
Included in the remuneration above was £nil (2024: £nil) paid in shares
rather than cash.
Remuneration by each Director is as follows:
2025 2025 2025 2025 2025 2025
Salary
Pension
Loss of office
Benefits
Share-based payment
£
£
£
£
£ Total
£
Richard M Maxey 24,000 - - - - 24,000
Alistair Stobie 175 916 8,046 - - - 183,962
David Cather 45,000 - - - - 45,000
Martin Wood 29,000 - - - - 29,000
Kevin Ross 24,000 - - - - 24,000
Jeffrey Court 171,410 4,375 - - - 175,785
Neil Gawthorpe** 202,400 10,120 - 1,489 - 214,009
Adrian Bougourd - - - - - -
Guy Edwards 24,000 - - - - -
Stephen Harrison 10,000 - - - - 10,000
705, 726 22,541 - 1,489 - 729,756
** Denotes the highest paid Director.
Directors' interests in share options and warrants are disclosed in the
Directors' Report.
The share-based payment is an IFRS 2 cost charged for options issued. No cash
benefit is received by the Directors. No Director exercised any options during
the year. Please see note 28 for more information.
2024 2024 2024 2024 2024 2024
Salary
Pension
Loss of office
Benefits
Share-based payment
£
£
£
£
£ Total
£
Richard M Maxey 28,000 - - - - 28,000
Mark Thompson 28,077 - - - - 28,077
Nigel Widdowson 64,625 8,130 - 1,884 4,025 78,664
David Cather 52,500 - - - - 52,500
Martin Wood 33,833 - - - - 33,833
Guy Edwards 2,000 - - - - 2,000
Kevin Ross 14,000 - - - - 14,000
Neil Gawthorpe** 264,000 11,000 - - - 275,000
Adrian Bougourd - - - - - -
487,035 19,130 - 1,884 4,025 512,074
** Denotes the highest paid Director.
Directors' interests in share options and warrants are disclosed in the
Directors' Report.
12 Auditors' remuneration
2025 2024
£
£
Audit of these financial statements 71,000 50,000
Other fees to auditors
Audit of subsidiary financial statements and other assurance services 82,900 83,500
153,900 133,500
13 Income tax
Tax charged/(credited) in the income statement:
2025 2024
£
£
Current taxation
Adjustments in respect of prior periods (264,572) (194,403)
The tax on profit for the year is higher (2024: higher) than the standard rate
of corporation tax in the UK of 25% (2024: 25%). The differences are
reconciled below:
2025 2024
£
£
Loss before tax (22,176,830) (9,894,319)
Corporation tax at standard rate (5,544,207) (2,473,580)
Fixed asset differences 2,433,186 587,065
Increase from effect of expenses not deductible in determining taxable profit 1,663,040 370,996
(tax loss)
Other differences 750 37
Surrender of tax losses for R&D tax credit refund (264,572) (194,403)
Remeasurement of deferred tax for changes in tax rates - -
Income not taxable - -
Decrease/(increase) from tax losses for which no deferred tax asset was 1,447,231 1,515,482
recognised
Total tax credit (264,572) (194,403)
Deferred tax
Group
2025 2025 2025 2025 2025
Intangibles
Tangibles
Losses
Other
Total
£
£
£
£
£
At 1 April 2024 961,084 421,817 (1,382,901) - -
Charged to profit and loss - (14,887) 14,887 - -
At 31 March 2025 961,084 406,930 (1,368,014) - -
The net deferred tax of £nil is made up of a liability of £1,368,014 and
asset of £1,368,014. The unrecognised deferred tax asset for carried forward
losses at 31 March 2025 was £10,281,434.
The rate used for the deferred tax is 25% (2024: 25%).
2024 2024 2024 2024 2024
Intangibles
Tangibles
Losses
Other
Total
£
£
£
£
£
At 1 April 2023 961,084 429,262 (1,390,346) - -
Charged to profit and loss - (7,445) 7,445 - -
At 31 March 2024 961,084 421,817 (1,382,901) - -
The net deferred tax of £nil is made up of a liability of £1,382,901 and
asset of £1,382,901. The unrecognised deferred tax asset for carried forward
losses at 31 March 2024 was £8,970,420.
14 Basic and diluted loss per share
Basic and diluted loss per share is calculated as follows:
2025 2024
£
£
Loss for the year (21,912,258) (9,699,916)
Weighted average number of shares in issue 188,495,213 185,755,355
Basic and diluted loss per share (0.12) (0.05)
The diluted loss per share calculations exclude the effects of share options,
warrants and convertible debt on the basis that such future potential share
transactions are anti-dilutive. Information on share options and warrants is
disclosed in note 28.
15 Property, plant and equipment
Group Land and Furniture, fittings and equipment Computer equipment Motor Other property, plant and equipment Asset under construction Total
buildings
£
£
vehicles
£
£
£
£
£
Cost or valuation
At 1 April 2023 5,189,361 114,709 313,400 141,500 243,455 13,717,101 19,719,526
Additions - 53 2,100 - 7,726 2,693,931 2,703,810
Disposal - - (3,137) - - - (3,137)
At 31 March 2024 5,189,361 114,762 312,363 141,500 251,181 16,411,032 22,420,199
Additions - - - - - 19,885 19,885
Disposal - - (23,478) - - - (23,478)
At 31 March 2025 5,189,361 114,762 288,885 141,500 251,181 16,430,917 22,416,606
Depreciation
At 1 April 2023 339,688 14,494 82,329 35,435 83,769 108,947 664,662
Charge for the year 105,429 20,804 101,245 46,695 57,162 - 331,335
Impairment - - - - - 2,157,923 2,157,923
At 31 March 2024 445,117 35,298 183,574 82,130 140,931 2,266,870 3,153,920
Charge for the year 105,428 22,951 89,376 46,695 54,275 - 318,725
Disposal - - (18,297) - - - (18,297)
Impairment - - - - - 9,506,522 9,506,522
At 31 March 2025 550,545 58,249 254,653 128,825 195,206 11,773,392 12,960,870
Carrying amount
At 31 March 2025 4,638,816 56,513 34,232 12,675 55,975 4,657,525 9,455,736
At 31 March 2024 4,744,244 79,464 128,789 59,370 110,250 14,144,162 19,266,279
At 31 March 2023 4,849,673 100,215 231,071 106,065 159,686 13,608,154 19,054,864
Included within the net book value of land and buildings above is £3,980,684
(2024: £4,047,460) in respect of freehold land and buildings.
Impairment - Asset under construction
The amount of impairment loss included in profit and loss is £9,506,522
(2024: £2,157,923). The Group has previously capitalised all costs to Asset
Under Construction that relate to the ongoing project to upgrade the
processing plant and mine site. The impairment principally relates to
consulting and design work for a new front-end crushing circuit undertaken in
2021/2022 2022/2023 which will not now be implemented.
16 Right-of-use assets
Property Total
£
£
Cost or valuation
At 1 April 2023 2,341,570 2,341,570
Write off (6,807) (6,807)
At 31 March 2024 2,334,763 2,334,763
Additions 165,324 165,324
Write off (79,712) (79,712)
At 31 March 2025 2,420,375 2,420,375
Depreciation
At 1 April 2023 318,898 318,898
Charge for the year 120,281 120,281
At 31 March 2024 439,179 439,179
Charge for the year 76,489 76,489
Write off (79,712) (79,712)
At 31 March 2025 435,956 435,956
Carrying amount
At 31 March 2025 1,984,419 1,984,419
At 31 March 2024 1,895,584 1,895,584
Depreciation on right-of-use assets charged through the profit and loss totals
£76,489 (2024: £120,281). Interest expense on lease liabilities charged
through the profit and loss totals £111,491 (2024: £118,985). Certain assets
held under right-of-use leases are secured by charges held in favour of
Hargreaves (UK) Services Limited or the Trustees of Newnham Estate Trust.
Lease liabilities
2025 2025 2025
Future lease payments
Discount
Lease liability
£
£
£
Within one year 163,664 (101,277) 62,387
In two to five years 459,003 (276,523) 182,480
In over five years 2,908,135 (1,226,808) 1,681,327
3,530,802 (1,604,608) 1,926,194
2024 2024 2024
Future lease payments
Discount
Lease liability
£
£
£
Within one year 213,175 (107,530) 105,645
In two to five years 662,214 (377,706) 284,508
In over five years 2,784,622 (1,265,597) 1,519,025
3,660,011 (1,750,833) 1,909,178
The lease liabilities are presented as follows:
31 March 31 March
2025 2024
£
£
Current liabilities 62,387 105,645
Non-current liabilities 1,863,807 1,803,533
1,926,194 1,909,178
17 Intangible assets
Group
Goodwill Mining rights Software Total
£
£
£
£
Cost
At 1 April 2023 1,075,520 3,844,333 191,523 5,111,376
Additions - - 39,952 39,952
At 31 March 2024 1,075,520 3,844,333 231,475 5,151,328
Additions - - 750 750
At 31 March 2025 1,075,520 3,844,333 232,225 5,152,078
Amortisation
At 1 April 2023 - - 21,360 21,360
Amortisation charged to the profit and loss - - 71,282 71,282
At 31 March 2024 - - 92,642 92,642
Amortisation charged to the profit and loss - - 74,822 74,822
At 31 March 2025 - - 167,464 167,464
Carrying amount
At 31 March 2025 1,075,520 3,844,333 64,761 4,984,614
At 31 March 2024 1,075,520 3,844,333 138,833 5,058,686
At 31 March 2023 1,075,520 3,844,333 170,163 5,090,016
The carrying amount of intangible assets which is considered as having an
indefinite useful life is £1,075,520. The whole balance is attributable to
goodwill.
The carrying amount of the mining rights is £3,844,333 (2024: £3,844,333).
The mining rights will begin to be amortised when mining operations restart.
Software amortisation of £74,822 (2024: £71,282) has been charged to the
profit and loss presented in administrative expenses.
Impairment
The value in use of the Group's cash-generating unit which comprises the
Hemerdon Mine was determined using a discounted cash flow approach, supported
by project cashflow forecasts prepared by management. The previous model under
the Bankable Feasibility Study has been adapted to reflect the changes in
inputs and assumptions as a result of the project re-evaluation. The following
inputs and key assumptions were used in the determination of value in use:
2025 2024
Discount rate 7.5 % 8%
Expected duration of mining activities 27 years 27 years
Tungsten grade >0.50 >0.45
Tungsten metal price $400 $350
Foreign exchange rate 1.28 1.28
Management has prepared a sensitised NPV calculation which under the updated
project plans, calculated a value in excess of the carrying amount of the
Group's assets. The underlying assumptions that were stress tested include the
discount rate, foreign exchange rate and metal price. Management were
satisfied in the recoverability of the Group's assets and no impairment was
required.
18 Investments
Group subsidiaries
Details of the Group subsidiaries as at 31 March 2025 are as follows:
Proportion of ownership
interest and voting rights held
Name of subsidiary Principal activity Registered office 2025 2024
Drakelands Restoration Limited* Mining of tungsten and tin Hemerdon Mine. 100% 100%
Drakelands,
Plympton, Devon
United Kingdom
Company number 11854467
PL7 5BS
England and Wales
Tungsten West Services Limited** Provision Hemerdon Mine. 100% 100%
of services to the Group
Drakelands,
Plympton, Devon
United Kingdom
Company number 12430582
PL7 5BS
England and Wales
Aggregates West Limited** Sales of aggregates Hemerdon Mine. 100% 100%
Drakelands,
Plympton, Devon
United Kingdom
Company number 12575686
PL7 5BS
England and Wales
* Indicates direct investment of Tungsten West plc
in the subsidiary.
** Tungsten West Services Limited and Aggregates West Limited are exempt from
the Companies Act 2006 requirements relating to the audit of their individual
accounts by virtue of Section 479A of the Act as Tungsten West plc has
guaranteed the subsidiary company under Section 479C of the Act.
19 Escrow funds
31 March 31 March
2025
2024
£
£
Non-current financial assets
Escrow funds 13,237,420 11,059,151
These are funds being held under escrow with a third party which will be
released back to the Group on the cessation of mining once restoration works
have been completed. The funds have been discounted to present value over the
expected useful life of the mine. During the year, the discount rate was
revised to 5.2% (2024: 4.4%) and the expected future interest yield to 4.8%
(2024: 3.7%) resulting in a gain of £1,602,739 (2024: gain of £5,721,727).
The actual funds held in the escrow account at year end were £14,633,857
(2024: £13,740,012).
20 Trade and other receivables
31 March 31 March
2025
2024
£
£
Trade receivables 5,074 56,373
Deposits 2,765,284 2,631,435
Prepayments 145,317 37,431
Other receivables 71,197 84,654
2,986,872 2,809,893
The average credit period on sales of goods is 30 days (2024: 30 days). No
interest is charged on outstanding trade receivables. The carrying amount of
trade and other receivables approximates the fair value.
As the Group is in the early phases of operations and making a few minor
sales, expected credit losses are being considered on a customer-by-customer
basis. At the year-end, trade receivables include a provision of £66,751
(2024: £68,262).
21 Cash and cash equivalents
31 March 31 March
2025
2024
£
£
Cash at bank 18,442 1,581,535
22 Inventories
31 March 31 March
2025
2024
£
£
Inventories 29,850 29,850
23 Trade and other payables
31 March 31 March
2025
2024
£
£
Trade payables 1,177,693 434,515
Accrued expenses 1,089,820 950,512
Social security and other taxes 284,625 94,304
Outstanding defined contribution pension costs 17,744 11,000
Corporation tax liability - 264,572
Other payables 167 -
2,570,049 1,754,903
Trade payables and accruals comprise amounts outstanding for trade purchases
and ongoing costs. The average credit period for trade purchases is 45 days
(2024: 45 days). No interest is charged on overdue amounts.
The carrying amount of trade and other payables approximates the fair value.
24 Loans and borrowings
31 March 31 March
2025
2024
£
£
Non-current loans and borrowings
Lease liabilities 1,863,807 1,771,527
Hire purchase 6,559 32,006
1,870,366 1,803,533
31 March 31 March
2025
2024
£
£
Current loans and borrowings
Lease liabilities 62,387 80,557
Hire purchase 25,088 25,088
Convertible loan notes 24,683,100 11,587,221
24,770,575 11,692,866
Convertible loan notes
Throughout the last two financial years the group has issued 7 tranches of
Convertible Loan Notes with a nominal value of £17,107,043. The bonds were
initially due for conversion into ordinary shares 365 days from the first
issue date, being June 2024. The holders have the option to exchange the
convertible loan notes for an equivalent instrument prior to conversion. The
notes bear interest at 20% per annum. The loan notes convert in to ordinary
shares at the lower of £0.03 per share or the equity conversion price, being
the price at which new ordinary shares are issue pursuant to an equity raise,
less a discount of fifty per cent. The notes are secured by a charge over
certain assets of the group held by the security agent Kroll Trustee Services
Limited.
The instrument contains a host liability contract and an embedded derivative
option and has been designated as a single instrument at fair value through
profit and loss.
During July 2023 the group notified Lansdowne Partners, the majority holder of
multiple breaches of the terms of the loan. The breaches resulted from
management implementing measures to conserve the cash flow of the group to
match the sources of finance available from the facility.
Under the terms of the Note Purchase Agreement dated 19 May 2023 the Note
Purchasers, if directed by the holders of at least 75% of the Notes
outstanding may by notice to the Group:
· Terminate the agreement and cancel the Notes
· Demand the notes be repurchased immediately at the redemption
price, plus any interest is repaid. The redemption price is a sum equal to two
times the principal amount of the notes.
· Exercise its rights to enforce security under the terms of the
note purchase agreement and security deed.
On 16 August 2023 the note holders agreed a waiver of the breaches which would
have expired on 31 January 2024. On 15 December 2023 the note holders agreed a
waiver of the breaches until 30 June 2024. On 15 October 2024 the note holders
agreed a waiver of the breaches until 31 March 2025. On 25 March 2024 an
amendment was agreed to the original terms of the note purchase agreement to
extend the conversion date to 598 days from the first issue date, being
January 2025. In the latest amendment to the original agreement, dated 13
January 2025, this was extended to 932 days, being December 2025.
Movement in liability
31 March 31 March
2025
2024
£
£
Brought forward 11,587,221 -
Cash received 6,751,000 10,356,043
Directly attributable costs incurred (2,000) (1,114,213)
Fair value movement in year 6,346,879 2,345,391
Carried forward 24,683,100 11,587,221
25 Provisions
Group
Restoration provision Total
£
£
At 1 April 2024 5,137,646 5,137,646
Change in inflation and discount rate (1,470,982) (1,144,581)
Increase due to passage of time or unwinding of discount 340,107 340,107
At 31 March 2025 4,006,771 4,333,172
Non-current liabilities 4,006,771 4,333,172
This provision is for the obligation to restore the mine to its original state
once mining operations cease, discounted back to present value based on the
estimated life of the mine. Prior to discounting the Directors estimate the
provision at current costs to be £13,201,256 (2024: £13,201,256).
The provision has been discounted using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific
to the asset. The ultimate costs to restore the mine are uncertain, and cost
estimates can vary in response to many factors, including estimates of the
extent and costs of rehabilitation activities, technological changes,
regulatory changes, cost increases as compared to the inflation rates and
changes in discount rates.
Management has considered these risks and used a discount rate of 7.0% (2024:
6.4%), an inflation rate of 2% - 7.5% (2024: 2% - 7.5%) and an estimated
mining period of 27 years (2024: 27 years). At the reporting date these
assumptions represent management's best estimate of the present value of the
future restoration costs.
26 Pension and other schemes
Defined contribution pension scheme
The Group operates a defined contribution pension scheme. The pension cost
charge for the year represents contributions payable by the Group to the
scheme and amounted to £92,332 (2024: £164,738).
Contributions totaling £17,744 (2024: £11,000) were payable to the scheme at
the end of the year and are included in creditors.
27 Share capital
Allotted, called up and fully paid shares
31 March 2025 31 March 2024
No. £ No. £
Ordinary Shares of £0.01 each 188,731,307 1,887,313 187,074,111 1,870,741
The holders of Ordinary Shares are entitled to receive dividends as declared
from time to time and are entitled to one vote per share at meetings of the
Company. All Ordinary Shares rank equally with regard to the Company's
residual assets.
A reconciliation of the number of shares outstanding at the end of each year
is presented as follows:
31 March 31 March
2025
2024
£
£
Number of shares brought forward 187,074,111 180,551,615
Issue of shares on 13 June 2023 at £0.03 per share - 6,522,496
Issue of shares, founder share incentives, on 22 May 2024 at £0.01 per share 1,657,196 -
188,731,307 187,074,111
28 Share-based payments
Warrants
Details and movements
Warrants have been issued to certain shareholders and intermediaries as
commission for introducing capital to the Company.
Warrants can be exercised at any point before the expiry date for a fixed
number of shares.
The movements in the number of warrants during the year were as follows:
31 March 31 March
2025
2024
No.
No.
Outstanding, start of year - 2,170,740
Granted during the year - -
Exercised during the year - -
Expired during the year - (2,170,740)
Outstanding, end of year - -
The warrants have been valued using the Black Scholes model as management have
judged it not possible to reliably estimate the fair value of service
received. Inputs to the pricing model were as follows:
Date of grant 2022
Share price at date of grant £0.45 - £0.60
Exercise price £0.01 - £0.60
Risk-free interest rate 1.5%
Expected life of warrants 2 years
Volatility 33%
The exercise price of warrants outstanding at 31 March 2024 and 31 March 2025
is £nil and their remaining contractual life is nil.
Founder share incentives
Details and movements
The founder shareholders have a right to receive shares at a nominal value
once certain milestones are hit.
The movements in the number of share options during the year were as follows:
31 March 31 March
2025
2024
No.
No.
Outstanding, start of year 18,229,148 18,229,148
Granted during the year - -
Exercised during the year (1,657,196) -
Outstanding, end of year 16,571,952 18,229,148
Upon admission to AIM, the original founder agreement was terminated and the
Company granted replacement founder options to the founder shareholders with
effect from admission.
The founder options meet the definition of equity in the financial statements
of the Company on the basis that the 'fixed for fixed' condition is met. No
consideration was received for the founder options at grant date, therefore no
accounting for the issue of the equity instruments is required under IFRS. On
exercise, the shares are recognised at the fair value of consideration
received, being the option price of £0.01.
EMI share options
Details and movements
Share options have been issued to key employees as an incentive to stay with
the Company. These options can be exercised within four years following the
grant date once the option has vested.
The movements in the number of share options during the year were as follows:
31 March 31 March
2025
2024
No.
No.
Outstanding, start of year 400,002 1,533,335
Granted during the year - -
Forfeited during the year - (1,133,333)
Exercised/(lapsed) during the year - -
Outstanding, end of year 400,002 400,002
Share options have been valued using the Black Scholes model. Inputs to the
pricing model were as follows:
Date of grant 2022
Share price at date of grant £0.45 - £0.60
Exercise price £0.01 - £0.45
Risk-free interest rate 1.5%
Expected life of options 1-4 years
Volatility 33%
Volatility has been estimated based upon observable market volatilities of
similar entities.
The exercise price of share options outstanding at 31 March is £0.45 (2024:
£0.45) and their remaining contractual life is estimated at 24 months (2024:
21 months).
31 March 2025 31 March 2024
Average Exercise Price £ Options Average Exercise Price £ Options
Outstanding, start of year 0.45 400,002 0.37 1,533,335
Granted during the year - - - -
Exercised/(lapsed) during the year - - (0.34) (1,133,333)
Outstanding, end of year 0.45 400,002 0.45 400,002
CSOP share options
Details and movements
Share options have been issued to key employees as an incentive to stay with
the Company. These options can be exercised within ten years following the
grant date once the option has vested.
31 March 31 March
2025
2024
No.
No.
Outstanding, start of year 333,330 2,583,316
Granted during the year - -
Exercised/(lapsed) during the year - (2,249,986)
Outstanding, end of year 333,330 333,330
Share options have been valued using the Black Scholes model. Inputs to the
pricing model were as follows:
Date of grant 2023
Share price at date of grant £0.275
Exercise price £0.275
Risk-free interest rate 3.5%
Expected life of options 3 years
Volatility 62%
Volatility has been estimated based upon observable market volatility of
Tungsten West PLC.
The exercise price of share options outstanding at 31 March 2025 was £0.275
(2024: £0.275) and their remaining contractual life was 6 months (2024: 1
year and 6 months). The options lapse after 7 years and 6 months from the
balance sheet date (2024: 8 years and 6 months).
31 March 2025 31 March 2024
Average Exercise Price £ Options Average Exercise Price £ Options
Outstanding, start of year 0.275 333,330 0.275 2,583,316
Granted during the year - - - -
Exercised/(lapsed) during the year - - (0.275) (2,249,986)
Outstanding, end of year 0.275 333,330 0.275 333,330
29 Commitments
Capital commitments
As at 31 March 2025 the Group had contracted to purchase plant and machinery
amounting to £1,178,774 (2024: £1,746,455). Of this an amount of £123,320
(2024: £nil) is dependent on the commencement of mining operations.
Other financial commitments
The total amount of other financial commitments not provided in the financial
statements was £8,329,000 (2024: £9,329,000) committed at present or on the
commencement of mining operations and represented contractual amounts due to
the mining contractor and further committed payments to the funds held in the
escrow account under the escrow agreement. Included within other financial
commitments is £3,000,000 (2024: £4,000,000) which is considered to be
payable between one to five years after mining operations commence.
Contingent liabilities
As at 31 March 2025 the Group is liable for payment of any withholding tax
arising on the convertible loan notes. On the basis that it considers the
likelihood of a withholding tax liability arising as unlikely no provision has
been made in the financial statements. Based on interest accrued to the year
end were the liability to arise the Group's estimate of the contingent
liability is £1,000,000 (2024: £200,000).
As at 31 March 2025 the Group had an obligation to dispose of waste materials
found onsite. It is the intention of management to dispose of the waste
through the onsite Mine Waste Facility. If external disposal is required the
Company would incur third party disposal fees estimated at £700,000 (2024:
£700,000). As third party costs were not deemed probable no provision is
included in the financial statements but are considered to represent a
contingent liability at the year end.
30 Reconciliation of liabilities arising from financing activities
Non-cash changes
At 1 April Financing New finance Other Converted At 31 March
2024
cash flows
£
changes
to equity
2025
£
£
£
£
£
Lease liabilities 1,909,178 (227,792) - 276,455 - 1,957,841
Convertible loan notes 11,587,221 - 6,751,000 6,344,879 - 24,683,100
13,496,399 (227,792) 6,751,000 6,621,334 - 26,640,941
Non-cash changes
At 1 April Financing New finance Other Converted At 31 March
2023
cash flows
£
changes
to equity
2024
£
£
£
£
£
Lease liabilities 2,016,456 (226,263) - 118,985 - 1,909,178
Convertible loan notes - - 9,241,830 2,345,391 - 11,587,221
2,016,456 (226,263) 9,241,830 2,464,376 - 13,496,399
31 Classification of financial and non-financial assets and liabilities
The classification of financial assets and liabilities by accounting
categorisation for the year ending 31 March 2025 was as follows:
2025 2024 2025 2024
Financial assets
Financial assets
Financial assets
Financial assets
at amortised cost
at amortised cost
at FVTPL
at FVTPL
£
£
£
£
Assets
Non-current assets
Escrow funds receivable - - 13,237,420 11,059,151
Current assets
Trade and other receivables 2,841,555 2,772,462 - -
Cash and cash equivalents 18,442 1,581,535 - -
2,859,997 4,353,997 13,237,420 11,059,151
2025 2024 2025 2024
Financial liabilities
Financial liabilities
Financial liabilities
Financial liabilities
at amortised cost
at amortised cost
at FVTPL
at FVTPL
£
£
£
£
Liabilities
Non-current liabilities
Loans and borrowings (1,870,366) (1,803,533) - -
Current liabilities
Trade and other payables (2,570,047) (1,754,903) - -
Loans and borrowings (87,475) (105,645) (24,683,100) (11,587,221)
(4,527,888) (3,664,081) (24,683,100) (11,587,221)
Fair value of financial assets and financial liabilities that are measured at
fair value on a recurring basis
IFRS 13 requires the provision of information about how the company
establishes the fair values of financial instruments. Valuation techniques are
divided into three levels based on the quality of inputs:
• Level 1 inputs are quoted prices (unadjusted) in active markets for
identical assets or liabilities.
• Level 2 inputs are inputs other than quoted prices included in level 1
that are observable, directly or indirectly.
• Level 3 inputs are unobservable.
The group's Escrow funds receivable is measured at fair value of £13,237,420
(2024: £11,059,151). These are classified as level 3. They are valued based
on discounted cash-flows. A number of inputs such as the risk-free rate are
observable inputs but there are also significant unobservable inputs such as
the expected interest yield.
The group's convertible loan notes are measured at fair value of £24,683,100
(2024: 11,587,221). These are classified as level 3. They are valued based on
a scenario pricing model. A number of inputs such as the market value of
shares are observable inputs but there are also significant unobservable
inputs such as the discount rate and the probabilities assessed for each
scenario.
32 Financial risk review
Group
This note presents information about the Group's exposure to financial risks
and the Group's management of capital.
Credit risk
In order to minimise credit risk, the Group has adopted a policy of only
dealing with creditworthy counterparties (banks and debtors) and it obtains
sufficient collateral, where appropriate, to mitigate the risk of financial
loss from defaults. The most significant credit risk relates to customers that
may default in making payments for goods they have purchased.
To date the Group has only made a small number of sales and therefore the
credit risk exposure has been low.
Liquidity risk
The Directors regularly monitor forecast and actual cash flows and match the
maturity profiles of financial assets and liabilities to ensure proper
liquidity risk management and to maintain adequate reserves and borrowing
facilities. In the view of the Directors, the key risk to liquidity is in
meeting short-term cash flow needs. See further discussion of short term
liquidity risk in the going concern section of note 2.
Market risk
Aside from the convertible loan notes, the Group has no significant
interest-bearing assets and liabilities. The Group in the future will also be
exposed to exchange rate risk on the basis that tungsten prices are
principally denominated in USD. The Company will seek to manage this risk
through the supply contracts it agrees with future customers.
The Group does not use any derivative instruments to reduce its economic
exposure to changes in interest rates or foreign currency exchange rates at
the current time.
The Group may require future borrowings to support its mineral processing
facility upgrades and therefore has an exposure to future interest rate rises.
33 Related party transactions
Convertible loan notes
During the year convertible loan notes of £5,250,000 were issued to parties
connected to various Directors of the group (2024: £6,593,763). The
convertible loan notes accrued interest of £2,057,797 (2024: £665,645)
during the year.
Key management personnel
Key management personnel are deemed to be the Directors. Their remuneration
can be seen in note 11.
34 Application of new and revised UK adopted International Financial Reporting
Standards (UK-adopted IFRS)
New and amended Standards and Interpretations applied
None of the new or amended IFRS Standards had an effect on the financial
statements.
New and revised Standards and Interpretations in issue but not yet effective
At the date of authorisation of these financial statements, the Company has
not early adopted the following amendments to Standards and Interpretations
that have been issued but are not yet effective:
Standard or Interpretation Effective for annual periods commencing on or after
Lack of Exchangeability (Amendments to IAS 21) 1 January 2025
Classification & Measurement of Financial Instruments (Amendments to 1 January 2026
IFRS 9 & IFRS 7)
Annual Improvements - Volume 11 (IFRS 1, 7, 9, 10 & IAS 7) 1 January 2026
Contracts Referencing Nature-dependent Electricity (Amendments to IFRS 9 1 January 2026
& IFRS 7)
IFRS 18 Presentation and Disclosure in Financial Statements-Basis for 1 January 2027
Conclusions
IFRS 18 Presentation and Disclosure in Financial Statements-Illustrative 1 January 2027
Examples
None of the above amendments are anticipated to have a material impact on
future financial statements.
35 Post balance sheet events
On 08 May 2025 the Group announced that conditions precedent of CLN Tranche G
Part B were achieved, drawing down £0.9m.
On 02 July 2025, the Company raised £4.3 million by way of Tranche H of the
CLN.
On 05 August 2025 the Company announced that it had completed an updated
feasibility study.
Independent Auditor's Report to the members of Tungsten West plc
Report on the parent company financial statements
Opinion
We have audited the financial statements of Tungsten West plc (the "parent
company") for the year ended 31 March 2025, which comprise the Company
Statement of Financial Position, Company Statement of Changes in Equity and
the related notes, including a summary of significant accounting policies. The
financial reporting framework that has been applied in their preparation is
applicable law and United Kingdom Accounting Standards, including Financial
Reporting Standard 101 Reduced Disclosure Framework (United Kingdom Generally
Accepted Accounting Practice).
In our opinion the financial statements:
• give a true and fair view of the state of the
company's affairs as at 31 March 2025 and of its loss for the year ended;
• have been properly prepared in accordance with
United Kingdom Generally Accepted Accounting Practice; and
• have been prepared in accordance with the
requirements of the Companies Act 2006.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the auditor's responsibilities for the
audit of the financial statements section of our report. We are independent of
the company in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the FRC's Ethical
Standard as applied to listed entities, and we have fulfilled our other
ethical responsibilities in accordance with those requirements. We believe
that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to Notes 2 and 37 in the financial statements, which
indicate that the group has yet to secure the short term finance it needs to
continue in operational existence for the foreseeable future. As stated in
Note 2 and 37, these events or conditions, along with other matters as set
forth in Note 2 and 37 indicate that a material uncertainty exists that may
cast significant doubt on the company's ability to continue as a going
concern. Our opinion is not modified in respect of this matter.
In auditing the financial statements we have concluded that the directors' use
of the going concern basis of accounting in the preparation of the financial
statements is appropriate.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those
which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
The key audit matters identified for the company related to the management
override of controls, going concern, convertible loan notes and assessment of
credit losses on group loan receivables. Further detailed work in respect of
the first three matters are set out in our group audit report.
KEY AUDIT MATTER RESPONSE AND CONCLUSION
Credit loss provision against group loan receivables Our audit work included:
• Assessment and challenge of the key assumptions
applied by management.
The company has provided interest free loans repayable on demand to its
trading subsidiaries. As the subsidiaries lack the cash reserves to repay • Reperformance of management's calculation.
these balances on demand the expected credit loss must be assessed under IFRS
9. The uncertainty regarding the future preparation of an updated feasibility • Discussions and enquiries with management.
study and ability to secure project finance has impacted the assessment of
credit losses on these loans. • Assessment of the accuracy and completeness of
accounts disclosure in light of the above.
As a result of the procedures performed, we are satisfied that credit loss
provision is valued and disclosed with material accuracy.
Our application of materiality
Misstatements, including omissions, are considered to be material if
individually or in aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of the financial
statements. We use quantitative thresholds of materiality, together with
qualitative assessments in planning the scope of our audit, determining the
nature, timing and extent of our audit procedures and in evaluating the
results of our work.
Based on our professional judgement, we determined materiality for the company
financial statements should be based on gross assets as it is a holding
company. Overall company materiality was set at £412,000, performance
materiality of £247,500 and individual errors above £20,600 were reported to
the audit committee.
Other information
The other information comprises the information included in the annual report
other than the financial statements and our auditor's report thereon. The
directors are responsible for the other information. Our opinion on the
financial statements does not cover the other information and, except to the
extent otherwise explicitly stated in our report, we do not express any form
of assurance conclusion thereon. In connection with our audit of the financial
statements, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the audit or otherwise
appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to
determine whether there is a material misstatement in the financial statements
or a material misstatement of the other information. If, based on the work we
have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact.
We have nothing to report in this regard.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the Strategic Report
and Directors' Report for the financial year for which the financial
statements are prepared is consistent with the financial statements; and
• the Strategic Report and Directors' Report have
been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of our knowledge and understanding of the company and its
environment obtained in the course of the audit, we have not identified
material misstatements in the Strategic Report and the Directors' Report.
We have nothing to report in respect of the following matters where the
Companies Act 2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept,
or returns adequate for our audit have not been received from branches not
visited by us; or
• the parent company financial statements are not
in agreement with the accounting records and returns; or
• certain disclosures of Directors' remuneration
specified by law are not made; or
• we have not received all the information and
explanations we require for our audit.
Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities set
out on page 28 the Directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the Directors determine is necessary to
enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for
assessing the company's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis
of accounting unless the Directors either intend to liquidate the company or
to cease operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below.
We obtained an understanding of the legal and regulatory framework applicable
to the company and the industry in which it operates. We considered those laws
and regulations that have a direct impact on the preparation of the financial
statements, including, but not limited to the reporting framework (IFRS and
Companies Act 2006) and the relevant tax compliance regulations in the UK. In
addition, we considered provisions of other laws and regulations that do not
have a direct effect on the financial statements but compliance with which may
be fundamental to the company's ability to operate or to avoid a material
penalty, including compliance with the Health and Safety at Work etc Act 1974
and the ongoing monitoring requirements imposed by the UK Environment Agency
under the Environment Act 1995.
As part of our planning procedures, we assessed the risk of any non-compliance
with laws and regulations on the entity's ability to continue operating and
the risk of material misstatement to the accounts. Based on this understanding
we designed our audit procedures to identify non-compliance with such laws and
regulations. Our procedures involved the following:
• Reviewed legal and professional costs to
identify legal costs in respect of non compliance;
• Discussions and enquiries with management
whether there have been any known instances, allegations or suspicions of
fraud or non compliance with laws and regulations; and
• Review of board minutes or correspondence with
regulators, where available, including the UK Environment Agency.
We evaluated management's incentives and opportunities for fraudulent
manipulation of the financial statements (including the risk of override of
controls), and determined that the principal risks were related to fraudulent
financial reporting. Our procedures involved the following:
• Review of nominal journal entries for
reasonableness; and
• Review of significant accounting estimates for
bias, in particular the key accounting estimates.
Further details on the procedures planned are included in the key audit
matters section of this report above and the group report.
Because of the inherent limitations of an audit, there is a risk that we will
not detect all irregularities, including those leading to a material
misstatement in the financial statements. This risk increases the further
removed non-compliance with laws and regulations is from the events and
transactions reflected in the financial statements as we are less likely to
become aware of instances of non-compliance. The risk of not detecting a
material misstatement due to fraud is higher than the risk of not detecting
one resulting from error, as fraud may involve deliberate concealment,
collusion, omission or misrepresentation.
A further description of our responsibilities is available on the Financial
Reporting Council's website at:
https://www.frc.org.uk/auditors/audit-assurance/auditor-s-responsibilities-for-the-audit-of-the-fi/description-of-the-auditor's-responsibilities-for.
This description forms part of our auditor's report.
Use of our Report
This report is made solely to the company's members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the company's members those matters we
are required to state to them in an audit report and for no other purpose. To
the fullest extent permitted by law, we do not accept or assume responsibility
to anyone other than the Company and the company's members as a body for our
audit work, for this report, or for the opinions we have formed.
Duncan Leslie
(Senior Statutory Auditor)
For and on behalf of PKF Francis Clark, Statutory Auditor
Melville Building East
Unit 18, 23 Royal William Yard
Plymouth
Devon
PL1 3GW
Date:
Company Statement of Financial Position
Year ended 31 March 2025
Note 2025 2024
£
£
Fixed assets
Tangible fixed assets 40 28,935 31,194
Investments in subsidiary undertakings 41 4,190,460 4,187,796
4,219,395 4,218,990
Current assets
Receivables due within one year 42 167,076 31,894,336
Receivables due after more than one year 42 35,941,304 -
Cash at bank and in hand 43 13,093 1,268,756
36,121,473 33,163,092
Total Assets 40,340,868 37,382,082
Equity and liabilities
Equity
Share capital 46 1,887,313 1,870,741
Share premium 51,949,078 51,949,078
Share option reserve 319,526 256,278
Retained earnings (39,398,958) (28,797,230)
Equity attributable to owners of the Company 14,756,959 25,278,867
Current liabilities
Trade and other payables 44 900,809 515,994
Convertible loan notes 45 24,683,100 11,587,221
Total liabilities 25,583,909 12,103,215
Total equity and liabilities 40,340,868 37,382,082
The Company has taken the exemption in section 408 of the Companies Act 2006
and has not presented its individual profit and loss account. The Company made
a loss for the financial year of £10,601,728 (2024: £7,782,971).
The Company accounts were approved by the Board on 04 September 2025 and
signed on its behalf by:
Alistair Stobie
Director
Company Registration Number: 11310159
Company Statement of Changes in Equity
Year ended 31 March 2025
Share capital Share premium Share option reserve Warrant reserve Retained earnings Total
£
£
£
£
£
£
At 31 March 2023 1,805,516 51,882,761 357,366 740,867 (21,755,126) 33,031,384
Loss for the year - - - - (7,782,971) (7,782,971)
Total comprehensive income - - - - (7,782,971) (7,782,971)
New share capital subscribed 65,225 66,317 - - - 131,542
Expired warrants - - - (740,867) 740,867 -
Share options charge - - 85,138 - - 85,138
Forfeiture of share options - - (186,226) - - (186,226)
At 31 March 2024 1,870,741 51,949,078 256,278 - (28,797,230) 25,278,867
Loss for the year - - - - (10,601,728) (10,601,728)
Total comprehensive income - - - - (10,601,728) (10,601,728)
New share capital subscribed 16,572 - - - - 16,572
Share options charge - - 63,248 - - 63,248
At 31 March 2025 1,887,313 51,949,078 319,526 - (39,398,958) 14,756,959
Notes to the Company Financial Statements
Year ended 31 March 2025
36 General information
Tungsten West plc ('the Company') is a public limited company, incorporated in
England and Wales and domiciled in the United Kingdom.
The address of its registered The principal place of
office is:
business is:
Hemerdon Mine Hemerdon Mine
Drakelands Drakelands
Plympton Plympton
Devon Devon
PL7 5BS PL7 5BS
United Kingdom United Kingdom
37 Accounting policies
Basis of preparation
The Company financial statements have been prepared in accordance with FRS 101
Reduced Disclosure Framework ('FRS 101').
No profit and loss account is presented for Tungsten West plc, as permitted by
section 408 of the Companies Act 2006.
The financial statements are presented in Sterling, which is the functional
currency of the Company.
Reduced disclosures applied
In preparing the Company financial statements the Company has applied the
following disclosure exemptions allowed under FRS 101, therefore the following
are omitted:
· A Company statement of cash flows as required by IAS 1
and IAS 7.
· Financial instruments disclosures under IFRS 7.
· Fair value disclosure under IFRS 13.
· Related party disclosures with wholly owned subsidiaries of
the Group.
· Reconciliations of share capital movements required by IAS 1.
· Comparative information for property, plant and equipment.
· Disclosing information on leases required by IFRS 16 in a
single note.
The Group's financial statements are included within this document.
Going concern
The Directors consider the Company to be a going concern however the Company
is reliant on the trading activity of the wider Group.
The Group is still in the pre-production phase of operations and meets its day
to day working capital requirements by utilising cash reserves from investment
made in the Group. Over the last year this has been dependent on raising funds
via issues of convertible loan notes (CLN). There is no signed commitment from
investors to provide further funds under the existing CLN agreement. The Group
previously notified CLN holders of multiple defaults of the terms of the CLN
agreement. A waiver was subsequently agreed and is in place until 31 December
2025. If further defaults were to arise, or the terms of the waiver be
breached or expire before conversion, the notes can be called in for immediate
redemption.
At the year-end, the Group had £0.02 million in cash reserves and £2.1
million in late August 2025. The Group expects to supplement its cash reserves
through product sales and recovery of amounts previously paid to an equipment
supplier for a cancelled order (of £0.7m). The recovery of the amount from
the equipment supplier is still subject to negotiation however, the Board
believes that this amount will be recoverable during 2025. If these inflows do
not arise as expected cash reserves will be depleted sooner than forecast
below. If the Group has not completed a major fundraising in late 2025 then it
will be need to raise additional short-term funding.
If these fund raises do not occur in 2025 the Group will have insufficient
cash to meet its liabilities as they fall due. These conditions indicate that
a material uncertainty exists that may cast significant doubt on the Group's
and company's ability to continue as a going concern.
In addition to short-term financing, the Group still requires additional
funding to complete the MPF rebuild and is in discussions with financing
partners to provide the additional capital. The capital amount of the
financing, not including financing costs and any financing reserves, if any,
is US$93 million.
Until the additional capital is secured, the Group will continue to proceed by
utilising existing cash reserves from previous drawings on the 2023 CLN
facility. The board will not commit to significant further capital expenditure
until the full finance package is in place to complete the rebuild.
Model 1 - Funding for Operating Costs and Obtain Financing
This scenario models management's expectation of cash required to raise
finance and general and administrative expenses, including maintaining the
existing mine permits. This does not include any expenses related to FEED, or
capital expenditures to restart operations. The Company is in discussion with
a number of parties regarding financing of operations to complete FEED and
capital raising operations.
As a result, the Board intends that the Group and Company to be able to
operate as a going concern for the foreseeable future. Consequently, the Board
continue to adopt the going concern basis in preparing these financial
information despite the material uncertainty referred to above.
Summary of significant accounting policies and key accounting estimates
The principal accounting policies applied in the preparation of these
financial statements are set out below. These policies have been consistently
applied to all the years presented, unless otherwise stated.
Property, plant and equipment
Land and buildings are stated at the cost less any depreciation or impairment
losses subsequently accumulated (cost model).
Plant and equipment is stated in the statement of financial position at cost,
less any subsequent accumulated depreciation and subsequent accumulated
impairment losses.
Depreciation
Depreciation is charged so as to write off the cost of assets, other than land
and properties under construction over their estimated useful lives,
as follows:
Asset class Depreciation method and rate
Furniture, fittings and equipment 5% - 20% Straight Line
Other property, plant and equipment 5% Straight Line
Right-of-use assets
Right-of-use assets consist of property leases recognised under IFRS 16. These
assets are depreciated over the shorter of the lease term and the useful life
of the underlying asset. Depreciation starts at the commencement date of the
lease.
Investments
Fixed asset investments are measured at cost less impairment.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and call deposits, and other
short-term highly liquid investments that are readily convertible to a known
amount of cash and are subject to an insignificant risk of changes in value.
Cash and cash equivalents are either due on demand or have maturities of three
months or less from inception.
Convertible debt
Convertible loan notes issued by the Company have been assessed as a host
liability contract with the conversion option meeting the recognition criteria
for an embedded derivative financial liability. The Company has taken the
option available under IFRS to designate the entire instrument at fair value
through profit and loss. The instrument is initially recognised at transaction
price net of directly attributable costs incurred. The instrument is
remeasured to fair value at each reporting point with the resulting gain or
loss recognised in profit and loss.
Leases
At inception of the contract, the Company assesses whether a contract is, or
contains, a lease. It recognises a right-of-use asset and a corresponding
lease liability with respect to all material lease arrangements in which it is
the lessee. The right-of-use assets and the lease liabilities are presented as
separate line items in the statement of financial position.
The lease liability is initially measured at the present value of the lease
payments that are not paid at the commencement date, discounted by using the
rate implicit in the lease. If this rate cannot be readily determined, the
Company uses its incremental borrowing rate. It is subsequently measured by
increasing the carrying amount to reflect interest on the lease liability
(using the effective interest method) and by reducing the carrying amount to
reflect the lease payments made.
Significant accounting estimates and judgements
The preparation of the financial statements requires management to make
estimates and judgements that affect the reported amounts of certain financial
assets, liabilities, income and expenses.
The use of estimates and judgements is principally limited to the
determination of provisions for impairment and the valuation of
financial instruments as explained in more detail below:
Convertible loan notes
The convertible loan notes are measured at fair value at each reporting point.
Due to the fact that the instrument will be settled at a future point in time
either by the conversion into equity shares, conversion into an equivalent
debt instrument or repayment in cash the valuation is subject to inherent
estimation uncertainty. Management commissioned an external expert to
calculate the fair value at the year end. The fair value has been calculated
using a scenario pricing model and the key underlying assumptions are the
probabilities assessed for each underlying scenario, the discount rate
selected and the dates of conversion or redemption..
A two month earlier date of conversion or redemption assumption would result
in a £0.8m (2024: £2.1m) increase to the fair value of the year end
liability.
Probability estimate in calculating expected credit losses
The Company calculates expected credit losses on financial assets, including
inter-company loans, in accordance with IFRS 9 - Financial Instruments. In
determining these expected credit losses, the Company incorporates probability
estimates based on a range of possible outcomes.
Incorporation of probability estimates
The calculation of expected credit losses involves the incorporation of
probability estimates to reflect the likelihood of different credit events
occurring. The Company considers various factors, including historical data,
economic conditions, industry-specific information, and forward-looking
information to develop these probability estimates.
Economic conditions
The Company considers current and expected future economic conditions when
developing probability estimates. The most significant economic risk to the
Company is lenders appetite to invest long term in the Company. Management
estimates the chance of success at 85%.
Overall, the expected credit loss provision at year-end is £25,085,361 (2024:
£23,189,706) which represents a 41% effective provision. The effective
provision rate is higher than expected based on the probability of recovery
estimate, which was assessed overall at 72%, due to the 100% provision on
Tungsten West Services Limited as the company is not expected to generate
future profits to repay the inter-company loan.
Sensitivity analysis
The Company has performed a sensitivity analysis to assess the impact of
different scenarios on the expected credit losses for inter-company loans. The
analysis considered changes in economic conditions, default rates, and other
relevant factors. A 10% increase in probability estimate would reduce the
expected credit loss by £6.1 million (2024: £4.3 million). A 10% decrease in
probability estimate would increase the expected credit loss by £6.1 million
(2024: £4.3 million).
Based on this analysis, management believes that the loss allowance recognised
is appropriate given the current economic environment and specific
characteristics of the inter-company loans.
Financial instruments
Initial recognition
Financial assets and financial liabilities comprise all assets and liabilities
reflected in the statement of financial position, although excluding fixed
assets, prepayments, and deferred tax liabilities.
The Group recognises financial assets and financial liabilities in the
statement of financial position when, and only when, the Group becomes party
to the contractual provisions of the financial instrument.
Financial assets are initially recognised at fair value. Financial liabilities
are initially recognised at fair value, representing the proceeds received net
of premiums, discounts and transaction costs that are directly attributable to
the financial liability.
All regular way purchases and sales of financial assets and financial
liabilities classified as fair value through profit or loss ('FVTPL') are
recognised on the trade date, i.e., the date on which the Company commits to
purchase or sell the financial assets or financial liabilities. All regular
way purchases and sales of other financial assets and financial liabilities
are recognised on the settlement date, i.e., the date on which the asset or
liability is received from or delivered to the counterparty. Regular way
purchases or sales are purchases or sales of financial assets that require
delivery within the time frame generally established by regulation or
convention in the marketplace.
Subsequent to initial measurement, financial assets and financial liabilities
are measured at either amortised cost or fair value.
Expected Credit Losses on Inter-Company Loans
The Company has extended loans to its subsidiaries (inter-company loans).
Management has assessed the expected credit losses associated with these
inter-company loans in accordance with IFRS 9 - Financial Instruments.
Measurement of Expected Credit Losses
The expected credit losses for inter-company loans have been measured based on
a forward-looking assessment of credit risk, taking into consideration both
historical data and reasonable and supportable information about future
events. The Company uses the following stages to classify the inter-company
loans and measure the corresponding expected credit losses:
Stage 1: Loans with no significant increase in credit risk since initial
recognition
Inter-company loans that have not experienced a significant increase in credit
risk since initial recognition are considered to be in Stage 1. For these
loans, the Company recognises a loss allowance equal to 12-month expected
credit losses.
Stage 2: Loans with a significant increase in credit risk since initial
recognition
Inter-company loans that have experienced a significant increase in credit
risk since initial recognition are considered to be in Stage 2. For these
loans, the Company recognises a loss allowance equal to lifetime expected
credit losses.
Stage 3: Loans that are credit-impaired
Inter-company loans that are credit-impaired are classified as Stage 3.
Credit-impaired loans are those for which there is evidence of a measurable
decrease in estimated future cash flows since initial recognition. For these
loans, the Company recognises a loss allowance equal to lifetime expected
credit losses.
Determination of Expected Credit Losses
The determination of expected credit losses involves assessing a range of
possible outcomes and their respective probabilities. The Company considers
relevant factors, including economic conditions, industry-specific factors,
and forward-looking information.
Derecognition
Financial assets
The Company derecognises a financial asset when: the contractual rights to the
cash flows from the financial asset expire; it transfers the right to receive
the contractual cash flows in a transaction in which substantially all of the
risks and rewards of ownership of the financial asset are transferred; or the
Company neither transfers nor retains substantially all of the risks and
rewards of ownership and it does not retain control of the financial asset.
On derecognition of a financial asset, the difference between the carrying
amount of the asset and the sum of the consideration received is recognised as
a gain or loss in the profit or loss.
Financial liabilities
The Company derecognises a financial liability when its contractual
obligations are discharged, cancelled, or expire.
Share capital
Ordinary Shares are classified as equity. Equity instruments are measured at
the fair value of the cash or other resources received or receivable, net of
the direct costs of issuing the equity instruments. If payment is deferred and
the time value of money is material, the initial measurement is on a present
value basis.
Share options and warrants
Share options granted to shareholders classified as equity instruments are
accounted for at the fair value of cash received or receivable. Share options
granted to shareholders which represent a future obligation for the Company
outside of its control are recognised as a financial liability at fair value
through profit and loss.
Share options granted to employees are fair valued at the date of grant with
the cost recognised over the vesting period. If the employee is employed in a
subsidiary company the cost is added to the investment value, in the financial
statements of the parent, and the expense recognised in staff costs in the
statements of the subsidiary.
Warrants issued in return for a service are classified as equity instruments
and measured at the fair value of the service received. Where the service
received relates to the issue of shares the cost is debited against the
proceeds received in share premium.
Tax
Income tax expense consists of the sum of current tax and deferred tax.
Current tax is based on taxable profit for the year. Taxable profit differs
from profit as reported for accounting purposes because of items of income or
expense that are taxable or deductible in other years and items that are never
taxable or deductible.
Current tax is calculated using tax rates that have been enacted or
substantively enacted by the end of the reporting period. A provision is
recognised for tax matters that are uncertain if it is considered probable
that there will be a future outflow of funds to a tax authority. The provision
is measured at the best estimate of the amount expected to become payable. The
assessment is based on the judgement of management supported by the advice of
tax professionals contracted by the company.
Deferred tax liabilities are generally recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which deductible
temporary differences can be utilised. Such assets and liabilities are not
recognised if the temporary difference arises from the initial recognition of
goodwill or from the initial recognition (other than in a business
combination) of other assets and liabilities in a transaction that affects
neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting date
and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be
recovered. Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled or the asset is realised
based on tax laws and rates that have been enacted or substantively enacted at
the reporting date.
The Group intends to submit research and development tax credit claims. The
Group accounts for a claim at the point it considers the claim to be
unchallenged by HMRC.
38 Company staff costs
The aggregate payroll costs (including Directors' remuneration) were
as follows:
2025 2024
£
£
Wages and salaries 112,000 134,000
Social security costs 12,140 13,099
Pension costs, defined contribution scheme - (1,339)
Share based payments 60,583 (104,379)
184,723 41,381
The average number of persons employed by the Company (including Directors)
during the year, analysed by category was as follows:
2025 2024
No.
No.
Management 5 4
Total 5 4
Remuneration of the Directors is disclosed in note 11 to the Consolidated
Financial Statements.
39 Deferred tax
The unrecognised deferred tax asset for carried forward losses as at 31 March
2025 was £2,894,986 (2024: £2,984,112).
40 Tangible fixed assets
Furniture, fittings and equipment Other property, plant and equipment Total
£
£
£
Cost
At 1 April 2024 2,048 36,983 39,031
Additions - - -
At 31 March 2025 2,048 36,983 39,031
Depreciation
At 1 April 2024 1,537 6,300 7,837
Charge for the year 410 1,849 2,259
At 31 March 2025 1,947 8,149 10,096
Carrying amount
At 31 March 2025 101 28,834 28,935
At 31 March 2024 511 30,683 31,194
41 Investment in subsidiary undertakings
Summary of the Company investments
31 March 31 March
2025
2024
£
£
Investments in subsidiaries 4,190,460 4,187,796
Subsidiaries
Cost
Opening cost 4,555,646 4,533,257
Additions 2,664 22,389
Closing cost 4,558,310 4,555,646
Provision
Opening provision (367,850) -
Impairment - (367,850)
Closing provision (367,850) (367,850)
Additions in the current year relate to further investment in subsidiaries as
a result of share options in the Company granted to employees of those
subsidiaries.
Information on the Company's subsidiary undertakings is disclosed in note 18
to the Consolidated Financial Statements.
42 Receivables
31 March 31 March
2025
2024
£
£
Trade receivables - 54,114
Net receivables from subsidiaries 35,941,304 31,798,316
Prepayments 129,491 10,045
Other receivables 37,585 31,861
36,108,380 31,894,336
Less - amount due after more than one year (35,941,304) -
Amount due within one year 167,076 31,894,336
The full balance within net receivables from subsidiaries is due on demand. It
is unlikely that recovery of this balance will be made within one year of the
balance sheet date and therefore the balance has been presented in amounts due
after more than one year.
The average credit period on sales of goods is 30 days. No interest is charged
on outstanding trade receivables. The carrying amount of trade and other
receivables approximates the fair value.
As the company is in the early phases of operations and making a few minor
sales, credit losses are being considered on a customer-by-customer basis. No
credit losses against trade receivables were identified as at year end.
Loss allowance for inter-company loans
Amounts due from group undertakings are unsecured, interest free, have no
fixed date of repayment and are repayable on demand.
As of the reporting date, the Company has assessed the expected credit losses
on its inter-company loans and recognised a loss allowance as follows:
Stage 1: £Nil representing the 12-month expected credit losses
Stage 2: £10.6 million representing the lifetime expected credit losses
Stage 3: £14.5 million representing the lifetime expected credit losses
The total loss allowance for inter-company loans as of the reporting date is
£25.1 million.
The overall credit loss of 41% allows for factors including restructuring of
the group and non-recoverable balances from subsidiaries for which income is
now no longer planned due to corporate restructuring activities and other
internal factors.
31 March
2025
£
At 1 April 2024 23,189,706
Increase during the year 1,895,655
At 31 March 2025 25,085,361
Gross receivables from subsidiaries 61,026,665
Overall credit loss (25,085,361)
Net receivables from subsidiaries 35,941,304
43 Cash at bank and in hand
31 March 31 March
2025
2024
£
£
Cash at bank 13,093 1,268,756
44 Trade and other payables
31 March 31 March
2025
2024
£
£
Trade payables 700,669 157,834
Accrued expenses 189,548 350,451
Social security and other taxes 10,592 7,709
Other payables - -
900,809 515,994
Trade payables and accruals comprise amounts outstanding for trade purchases
and ongoing costs. The average credit period for trade purchases is 45 days
(2024: 45 days). No interest is charged on overdue amounts.
The carrying amount of trade and other payables approximates the fair value.
45 Convertible loan notes
Throughout the last two financial years the company has issued 7 tranches of
Convertible Loan Notes with a nominal value of £17,107,043. The bonds were
initially due for conversion into ordinary shares 365 days from the first
issue date, being June 2024. The holders have the option to exchange the
convertible loan notes for an equivalent instrument prior to conversion. The
notes bear interest at 20% per annum. The loan notes convert in to ordinary
shares at the lower of £0.03 per share or the equity conversion price, being
the price at which new ordinary shares are issue pursuant to an equity raise,
less a discount of fifty per cent. The notes are secured by a charge over
certain assets of the group held by the security agent Kroll Trustee Services
Limited.
The instrument contains a host liability contract and an embedded derivative
option and has been designated as a single instrument at fair value through
profit and loss.
During July 2023 the group notified Lansdowne Partners, the majority holder of
multiple breaches of the terms of the loan. The breaches resulted from
management implementing measures to conserve the cash flow of the group to
match the sources of finance available from the facility.
Under the terms of the Note Purchase Agreement dated 19 May 2023 the Note
Purchasers, if directed by the holders of at least 75% of the Notes
outstanding may by notice to the Company:
• Terminate the agreement and cancel the Notes
• Demand the notes be repurchased immediately at
the redemption price, plus any interest is repaid. The redemption price is a
sum equal to two times the principal amount of the notes.
• Exercise its rights to enforce security under
the terms of the note purchase agreement and security deed.
On 16 August 2023 the note holders agreed a waiver of the breaches which would
have expired on 31 January 2024. On 15 December 2023 the note holders agreed a
waiver of the breaches until 30 June 2024. On 15 October 2024 the note holders
agreed a waiver of the breaches until 31 March 2025. On 25 March 2024 an
amendment was agreed to the original terms of the note purchase agreement to
extend the conversion date to 598 days from the first issue date, being
January 2025. In the latest amendment to the original agreement, dated 13
January 2025, this was extended to 932 days, being December 2025.
Movement in liability
31 March 31 March
2025
2024
£
£
Brought forward 11,587,221 -
Cash received 6,751,000 10,356,043
Directly attributable costs incurred (2,000) (1,114,213)
Fair value movement in year 6,346,879 2,345,391
Carried forward 24,683,100 11,587,221
46 Share capital
Allotted, called up and fully paid shares
31 March 2025 31 March 2024
No. £ No. £
Ordinary Shares of £0.01 each
188,731,307 1,887,313 187,074,111 1,870,741
The holders of Ordinary Shares are entitled to receive dividends as declared
from time to time and are entitled to one vote per share at meetings of the
Company. All Ordinary Shares rank equally with regard to the Company's
residual assets.
Further information on share capital is disclosed in note 27 to the
Consolidated Financial Statements.
47 Share-based payments
Information on share-based payments is disclosed in note 28 to the
Consolidated Financial Statements.
48 Commitments
During a previous financial year the Company signed a contract to pay
£200,000 (2024: £200,000) compensation to a third party once mining
operations commenced.
Contingent liabilities
As at 31 March 2025 the Company is liable for payment of any withholding tax
arising on the convertible loan notes. On the basis that it considers the
likelihood of a withholding tax liability arising as unlikely no provision has
been made in the financial statements. Based on interest accrued to the year
end were the liability to arise the Company's estimate of the contingent
liability is £1,000,000 (2024: £200,000).
49 Related party transactions
Information on related party transactions is disclosed in note 33 to the
Consolidated Financial Statements.
50 Post balance sheet events
Information on post balance sheet events is disclosed in note 35 to the
Consolidated Financial Statements.
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