REG - Tungsten West PLC - Half Year Results
31/12/2024 12:45
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RNS Number : 7934R Tungsten West PLC 31 December 2024
31 December 2024
Tungsten West Plc
("Tungsten West", the "Company" or the "Group")
Half Year Results for the six months ended 30 September 2024
Tungsten West (LON:TUN), the mining company focused on restarting production
at the Hemerdon tungsten and tin mine in Devon, UK ("Hemerdon" or the
"Project"), is pleased to announce its half year results for the six months
ended 30 September 2024 (the "Period").
Period and Post Period Overview:
• Environment Agency ("EA") granted permit to operate
Mineral Processing Facility ("MPF")
• ADP Marine & Modular ("ADP") appointed to undertake
engineering on MPF
• Mining Plus appointed to complete select sections of the
updated re-start economic assessment Feasibility Study
• £4.90 million convertible loan notes issued over two
tranches
• Provisional agreement to place approximately an additional
£2.8 million tranche of convertible loan notes
• The Company had cash reserves of £0.04 million at 30
September 2024
• Loss for the Period of £13.9 million
• In the post period, Jeff Court was appointed as CEO and
Stephen Harrison was appointed as Non-Executive Chairman
Jeff Court, CEO of Tungsten West, commented:
"I was delighted to formally join Tungsten West in early October. The
Company's primary focus, following the major milestone of the Environment
Agency granting the permit to operate the MPF, has been the updating of the
Project's re-start economic assessment, focusing on further de-risking the
core project and making it more robust against a range of key external
scenarios.
"We remain grateful to those key supporters who have kept the Company funded
and have enabled us to progress the studies and engineering work required to
update the MPF. The current national and international dialogue surrounding
the essential nature of critical minerals supply chain security has
highlighted the importance of Hemerdon to governments and other key
stakeholders. This has given us confidence that the funding capital needed to
bring Hemerdon back into production will be available to us following the
completion of the Feasibility Study.
"Hemerdon will provide a globally significant and secure tungsten supply
through a critical mineral resource that is strategically located in a highly
developed country and geographically positioned for European and North
American markets."
Management
After the Period end, Jeff Court was appointed CEO on 8 October 2024. Jeff has
over 30 years' experience in the international mining sector, covering
numerous roles from project feasibility and start-up, major Engineering,
Procurement and Construction ("EPC") and EPC Management ("EPCM") and product
mineral processing plant projects, mining operations and contract mining
services, operational and business management.
On 4 December, David Cather stepped down from his role as Non-Executive
Chairman, but continues to serves as a Non-Executive Director of the Company.
Stephen Harrison was appointed as Non-Executive Chairman and brings
significant experience with AIM listed and Main Market companies.
Funding
The convertible loan note facility ("CLN") has, to date, raised £15.3
million. Post-Period, on 17 October 2024, the Company announced that it has
raised £ 2.9 million under Tranche F to existing CLN holders. The core group
of stakeholders, who have supported the Company over the past 18 months, have
provisionally committed to provide a further £2.8 million by way of a Tranche
G of the CLN. Tranche G is expected to be issued in two parts. The first part,
of approximately £1.9 million, is expected to close in early January and the
second part, of approximately £0.9 million, which will be subject to further
conditions precedent, is expected to close in early February. These conditions
precedent relating to the second part are expected to include the completion
of the updated feasibility study, project economics and the preparation for a
major capital raise from the beginning of Q2 2025. The CLN holders have
further provisionally agreed to extend the conversion date of the CLN until 31
December 2025. This funding will allow the Company to complete its full
Feasibility Study. The Tranche G funding is expected to complete before the
calendar year end 2025. The Group previously notified CLN holders of multiple
defaults of on the terms of the CLN agreement. A waiver was subsequently
agreed and has been extended until 31 March 2025, in respect of all defaults.
The Company is pursuing several routes to allow it to move directly to front
end engineering and design ("FEED"), including prior grant applications to the
Defence Industrial Base Consortium.
As set out in Note 2 Going Concern, there remains uncertainty regarding
further funding which would have an impact on the Group's ability to continue
as a going concern. At the Period end, the Group had £0.04 million in cash
reserves and £0.4 million at the end of November 2024 (which included the
funds received under Tranche F of the CLN).
At the date of this report, there is not currently any formal commitment from
the existing or new noteholders to purchase any Tranche G notes. If the Group
fails to find purchases for the Tranche G notes, then, in absence of other new
sources of finance, it is anticipated it would no longer be able to meet its
liabilities as they fall due from January 2025.
Outlook
The Board remains positive for the long-term prospects for the Hemerdon mine
and the commodities it will produce and is committed to delivering the Project
and recommencing operations.
The principal risks and uncertainties are outlined in the Company's most
recent audited annual report and accounts which can be found at
www.tungstenwest.com (http://www.tungstenwest.com/) .
(http://www.tungstenwest.com/)
Jeff Court
Chief Executive Officer
Cautionary statement
This document contains certain forward-looking statements in respect of the
financial condition, results, operations, and business of the Group. Whilst
these statements are made in good faith based on information available at the
time of approval, these statements and forecasts inherently involve risk and
uncertainty because they relate to events and depend on circumstances that
will occur in the future. There are several factors that could cause the
actual results of developments to differ materially from those expressed or
implied by these forward-looking statements and forecasts. Nothing in this
document should be construed as a profit forecast.
Enquiries
Tungsten West Strand Hanson
Jeff Court (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
Further information on Tungsten West Limited can be found at
www.tungstenwest.com (http://www.tungstenwest.com/)
Overview of Tungsten West
Tungsten West is the 100 per cent owner and operator of the past producing
Hemerdon tungsten and tin mine, located near Plymouth in southern Devon,
England. The Hemerdon mine is currently the world's third largest tungsten
resource, with a JORC (2012) compliant Mineral Resource Estimate of
approximately 325Mt at 0.12 per cent. WQ3. The Company acquired the mine out
of a receivership process in 2019 after its most recent operators, Wolf
Minerals, stopped production in 2018. While it was operator, Wolf Minerals
invested over £170 million into the development of the site, the development
of significant infrastructure and processing facilities. Hemerdon was
producing tungsten and tin materials, under Wolf Minerals, between 2015 and
2018, before the Company entered administration and placed the mine into
receivership due to a number of issues that have since been identified and
rectified by Tungsten West.
Consolidated Income Statement
Unaudited Six month to 30-Sep-24 Unaudited Six month to 30-Sep-23 Audited Year ended 31-Mar-24
Note
£ £ £
Revenue - 722,036 722,036
4
Cost of sales (1,137,426) (780,649) (2,099,895)
Gross loss (1,137,426) (58,613) (1,377,859)
Administrative expenses (4,291,391) (8,037,199) (8,966,124)
Other operating income 1,800 130 14,424
Other gains/(losses) - (117,953) 3,079,384
Operating loss 5 (5,427,017) (8,213,635) (7,250,175)
Finance income 269,257 102,004 200,175
Finance costs (8,766,277) (1,020,782) (2,844,319)
Net finance cost (8,497,020) (918,778) (2,644,144)
Loss before tax (13,924,037) (9,132,413) (9,894,319)
Income tax credit - - 194,403
Loss for the Period (13,924,037) (9,132,413) (9,699,916)
Loss attributable to:
Owners of the Company (13,924,037) (9,132,413) (9,699,916)
Audited
Unaudited Unaudited
£ £ £
Basic and diluted loss per share 12 (0.074) (0.050) (0.050)
There were no items of other comprehensive income in any period presented.
Consolidated Statement of Financial Position
Unaudited Six months to 30-Sep-24 Unaudited Six months to 30-Sep-23 Audited Year ended 31-Mar-24
Note £ £ £
Non-current assets
Property, plant and equipment 6 19,080,121 19,811,546 19,266,279
Right-of-use assets 7 1,781,187 1,955,412 1,895,584
Intangible assets 8 5,022,067 5,096,005 5,058,686
Deferred tax assets 1,390,346 1,390,346 1,382,901
Escrow funds receivable 9 11,329,495 4,107,892 11,059,151
38,603,216 32,361,201 38,662,601
Current assets
Trade and other receivables 3,350,737 4,788,186 2,809,893
Inventories 29,850 29,850 29,850
Cash and cash equivalents 43,357 1,416,765 1,581,535
3,423,944 6,234,801 4,421,278
Total assets 42,027,160 38,596,002 43,083,879
Equity and liabilities
Equity
Share capital 13 1,887,313 1,870,741 1,870,741
Share premium account 51,949,078 51,949,078 51,949,078
Share option reserve 219,413 412,831 256,278
Warrant reserve - 740,867 -
Convertible loan note reserve - 165,408 -
Retained earnings (46,688,104) (32,937,431) (32,764,067)
Equity attributable to the owners of the 7,367,700 22,201,494 21,312,030
parent
Non-current liabilities
Loans and borrowings 11 1,806,049 1,927,165 1,803,533
Provisions 10 5,299,502 4,799,194 5,137,646
Deferred tax liabilities 1,390,346 1,390,346 1,382,901
8,495,897 8,116,705 8,324,080
Current liabilities
Trade and other payables 3,038,618 1,519,343 1,754,903
Loans and borrowings 11 23,124,945 6,758,460 11,692,866
26,163,563 8,277,803 13,447,769
Total liabilities 34,659,460 16,394,508 21,771,849
Total equity and liabilities 42,027,160 38,596,002 43,083,879
Consolidated Statement of Cash Flows
Unaudited Unaudited Audited
30-Sep 30-Sep 31-Mar
2024 2023 2024
Note £ £ £
Cash flows from operating activities
Loss for the Period (13,924,037) (9,132,413) (9,699,916)
Adjustments to cash flows from non-cash items
Depreciation and amortisation 6,7 332,743 265,675 522,898
Loss on disposal of right-of-use asset - - 6,807
Loss on disposal of tangible asset - - 3,137
Loss on disposal of intangible asset - - -
Impairment of asset under construction 6 - 1,841,039 2,157,923
Fair value (gains) losses on escrow account - 1,133,447 (5,721,727)
Fair value gains on restoration provision - (1,015,494) (889,126)
Finance income (269,257) (102,004) (200,175)
Finance costs 8,766,277 1,020,782 2,844,319
Share based payment transactions (36,865) 55,465 (101,088)
Impact of foreign exchange (7,453) (42,593) (49,551)
Income tax credit - - (194,403)
(5,138,592) (5,976,096) (11,320,902)
Working capital adjustments
Income tax received - - 458,975
(lncrease)/decrease in trade and other receivables (540,843) 1,375,407 3,353,698
lncrease/(decrease) in trade and other payables 1,283,718 (811,260) (840,270)
(lncrease)/decrease in inventories - 84,323 84,323
Net cash outflow from operating activities (4,395,717) (5,327,626) (8,264,176)
(1,088)
Cash flows from investing activities
Interest received 9,713
5,204
Acquisitions of property plant and equipment - (2,764,261) (2,703,810)
Proceeds from disposals - 2,088 -
Acquisitions of intangibles (750) (39,952) (39,952)
Net cash outflow from investing activities (1,838) (2,796,921) (2,734,049)
Cash flows from financing activities
Interest paid (938) (2,971) (9,793)
Proceeds from exercise of warrants - 131,542 -
Proceeds from the issue of Ordinary Shares, net of issue costs 16,572 - 131,542
Proceeds from exercise of share options - - -
Proceeds from convertible debt 2,901,000 6,038,428 9,241,830
Payments to hire purchase (14,757) (14,398) (20,302)
New leases - - -
Payment of lease liabilities (42,500) (49,307) (201,535)
Net cash inflow (outflows) from financing activities 2,859,377 6,103,294 9,141,742
(1,538,178) (1,856,483)
Net (decrease) in cash and cash equivalents (2,021,253)
Opening cash and cash equivalents 1,581,535 3,438,018 3,438,018
Closing cash and cash equivalents c/f 43,357 1,416,765 1,581,535
Consolidated Statement of Changes in Equity
Audited Share Share premium account Share option reserve Warrant reserve Convertible loan note reserve Retained earnings Total
capital
£ £ £ £ £ £ £
At 1 April 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)
New shares 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
Unaudited
At 1 April 2023 1,805,516 51,882,761 357,366 740,867 - (23,805,018) 30,981,492
Loss for the Period - - - - - (9,132,413) (9,132,413)
New shares subscribed 65,225 66,317 - - - - 131,542
Issue of convertible loan - - - - 165,408 - 165,408
Share options charge - - 55,465 - - - 55,465
At 30 September 2023 1,870,741 51,949,078 412,831 740,867 165,408 (32,937,431) 22,201,494
Unaudited
At 1 April 2024 1,870,741 51,949,078 256,278 - - (32,764,067) 21,312,030
Loss for the Period - - - - - (13,924,037) (13,924,037)
New shares subscribed 16,572 - - - - - 16,572
Forfeiture of share options - - (46,573) - - - (46,573)
Share options charge - - 9,708 - - - 9,708
At 30 September 2024 1,887,313 51,949,078 219,413 - - (46,688,104) 7,367,700
Notes to the interim accounts
1. Basis of Preparation
These unaudited condensed consolidated interim accounts have been prepared in
accordance with the recognition and measurement principles of International
Accounting Standards as adopted in the United Kingdom ("UK-adopted IAS") using
the accounting policies that are expected to apply in the Company's next
annual report.
The accounting policies applied are consistent with those disclosed in the
Company's last statutory financial statements.
The interim accounts are in compliance with IAS 34, Interim Financial
Reporting.
The interim accounts do not comprise the Company's statutory accounts. The
information for the year ended 31 March 2024 is not the Company's statutory
accounts. The Company's financial statements for that year have been filed
with the registrar of companies. The independent auditor's report on those
financial statements was unqualified but drew attention to a material
uncertainty relating to going concern. The independent auditor's report did
not contain statements under s498(2) or s498(3) of the Companies Act 2006.
2. 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 CLNs. 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 on the terms of the
CLN agreement. A waiver has been agreed in respect of all defaults and remains
in place until 31 March 2025. For the Group to remain a going concern, it is
reliant on the continued support of the CLN holders by not exercising their
rights under the defaults.
At the Period end, the Group had £0.04 million in cash reserves and £0.4
million at the end of November 2024. The Group is in the process of finalising
the documentation in respect of approximately £2.8 million Tranche G funding
round with its existing CLN holders. The Group has very limited cash
reserves and is reliant upon this Tranche G funding being received. If the
Group did not receive the Tranche G funding or it was delayed, these limited
cash reserves are forecast to be exhausted in January 2025.
In addition to the expected issue of Tranche G, going concern is also reliant
on further funding being secured by the end of June 2025, without which the
Group would be unable to pay its liabilities as they fall due beyond this
point.
In addition to short-term financing via the CLNs, the Group still requires
additional funding to complete the MPF rebuild and is in discussions with
financing partners to provide the additional capital. The quantum of financing
will be determined at the completion of front end engineering and design
("FEED").
These conditions indicate that a material uncertainty exists that may cast
significant doubt on the Group's ability to continue as a going concern.
Until the additional capital is secured, the Group will continue to proceed by
utilising existing cash reserves and drawing on the 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 to Complete Feasibility Study and Obtain Financing
This scenario models management's expectation of cash required to complete the
ongoing feasibility study 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 is 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 statements despite the
material uncertainty referred to above.
3. Asset and liabilities held at fair value 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 in 27 years' time which assumes one year of set up and a 27-year
useful life of mining operations. The key assumptions that would lead to
significant changes in the escrow account fair value are the discount rate and
the useful life of the mine.
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.
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.
Convertible loan notes
Convertible loan notes which entitle the holder to convert into a fixed number
of shares for a fixed amount of cash contain both the features of a financial
liability and an equity instrument. The initial fair value amount of the
liability is calculated as the present value of all future payments and
interest (at the rate determined by the instrument) all being discounted at a
market rate of interest for a similar loan without a conversion option. The
amount of the equity component is residual balance after deducting the initial
fair value amount of the liability from the proceeds of the convertible loan
issue. Issue costs are assigned to the liability component.
Subsequently, interest is calculated on the liability component under the
effective interest method.
The present value of the liability cash-flows has been estimated with
reference to management's judgement of the most likely cash-flows, as
permitted under IFRS9. Under the terms of the convertible loan notes, if the
Group breaches the terms of the agreement or an exit event occurs, the initial
capital can be called in for repayment at a premium of 100%. As management
judge this unlikely, it has not been accounted for in the fair value of the
liability at Period end. Were this clause to be enacted, the capital repayment
due, on loan notes drawn to Period end, would be increased from £13 million
to £26 million.
4. Revenue
Revenue by product comprised the following:
Unaudited Six months to Unaudited Six months to 30 September Audited Year ended
30 September 31 March
2024 2023 2024
£ £ £
Tungsten - 286,964 497,388
Tin - 435,072 224,648
- 722,036 722,036
5. Operating loss
Operating loss is stated after the following:
Unaudited Six months to Unaudited Six months to 30 September Audited Year ended
30 September 31 March
2024 2023 2024
£ £ £
Depreciation of property, plant and equipment 180,977 164,452 331,335
Depreciation of right of use assets 114,397 67,260 120,281
Loss on disposal of ROU asset - - 6,807
Loss on disposal of tangible fixed assets 5,181 - 3,137
Impairments of assets under construction and deposits - 3,388,284 3,531,469
Amortisation of intangibles 37,369 33,963 71,282
Staff costs 1,181,481 1,950,849 3,352,821
7. Right-of-use asset
Unaudited Unaudited Audited
Six months to Six months to Year ended
30 September 30 September 31 March
2024 2023 2024
Opening net book value £ £ £ 2,022,672
1,895,584 2,022,672
Additions - - -
Write off - - (6,807)
Depreciation (114,397) (67,260) (120,281)
Net disposals -
Closing net book value 1,781,187 1,955,412 1,895,584
8. Intangible assets (net book value)
Unaudited Six months to Unaudited Six months to Audited Year ended
30 September 30 September 31 March
2024 2023 2024
Goodwill £ £ £ 1,075,520
1,075,520 1,075,520
Mining rights 3,844,333 3,844,333 3,844,333
Software 102,214 176,152 138,833
Closing net book value 5,022,067 5,096,005 5,058,686
9. Escrow Funds
Unaudited Unaudited Audited
Six months to Six months to Year ended
Escrow Funds 30 September 30 September 31 March
2024 2023 2024
Carrying amount £ £ 4,107,892 £11,059,151
11,329,495
The funds held in escrow with a third party will be released back to the
Company on the cessation of mining once restoration works have been completed.
The amounts have been discounted to present value over the expected useful
life of the mine. During the Period, there was no gain in the discount rate of
4.4% (30 September 2023: 4.7%) (31 March 2024: 4.4%) resulting in a gain of
£0.2 million in the six months to September 2024 (loss in Period to 30
September 2023: £1.0 million) (Gain in year to 31 March 2024: £5.7 million).
The actual funds held in escrow at the Period end were £14,067,911 (30
September 2023: £13,468,004) (31 March 2024: £13,740,012).
10. Provisions
Unaudited Unaudited Audited
Six months to Six months to Year ended
Restoration provision 30 September 30 September 31 March
2024 2023 2024
£ £ £
Carrying amount brought forward 5,137,646 5,701,771 5,701,771
Change in inflation and discount rate - (1,015,494) (889,126)
Unwinding of discount 161,856 112,917 325,001
Closing net book value 5,299,502 4,799,194 5,137,646
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 £13.2 million (30 September 2023: £13.2
million) (31 March 2024: £13.2 million).
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 6.4% (30
September 2023: 6.7%) (31 March 2024: 6.4%), an inflation rate of 2% to 7.5%
over the life of the Project (30 September 2023: 2.5% to 7%) (31 March 2024:
2% to 7.5%) and an estimated mining period of 27 years (30 September 2023: 27
years) (31 March 2024: 27 years).
11. Borrowings
Borrowings comprised:
Unaudited Unaudited Six months to Audited Year ended
Six months to 30 September 30 September 31 March
2024 2023 2024
£ £ £
Current
Lease liabilities 103,031 82,665 105,645
Convertible debt 23,021,914 6,675,795 11,587,221
23,124,945 6,758,460 11,692,866
Non-current
Lease liabilities 1,806,049 1,927,165 1,803,533
1,806,049 1,927,165 1,803,533
The Group issued convertible loan notes in two tranches as follows:
On 23 July 2024 - £2.975 million of Tranche E notes
After the end of the Period, on 17 October 2024, the Company issued a further
tranche of the CLN - £2.9 million of Tranche F notes
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 convertible loan notes are measured at fair value of £23,021,914
(Sept 2023: £6,675,795) (March 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.
Interest on the convertible loan notes in the form of payment in kind notes
(PIK notes) is 20%. The final termination date of the convertible loan notes
is 31 January 2025. The normal conversion price of the loan notes is £0.03
per share however under an equity raise (excluding equity raised to certain
qualifying shareholders, on a normal conversion of the loan notes or on an
issue of shares in relation to warrants and share options) the conversion
price is equal to the issue price on the equity raise less a discount of 50%.
Under the terms of the convertible loan notes, if the Company breaches the
terms of the agreement or an exit event occurs, the initial capital can be
called in for repayment at a premium of 100%.
The Company was at Period end and remains in breach of the terms of the CLN
Agreement. In each case the Note Holders waived the breaches such that the
Company was not in breach of the Agreement.
Fair value of financial assets and financial liabilities that are measured at
fair value on a recurring basis.
12. Basic and diluted loss per share
Unaudited Unaudited Audited
Six months to Six months to Year ended
30 September 30 September 31 March
2024 2023 2024
£ £ £
Loss for the year (13,924,037) (9,132,413) (9,699,916)
Number
Number Number
Weighted average number of ordinary shares in issue 188,266,298 184,472,241 185,755,355
(0.074) (0.050)
Basic and diluted loss per share (0.050)
The diluted loss per share calculations excludes the effects of share options,
warrants and convertible debt on the basis that such future potential share
transactions are anti-dilutive.
Were the Company's options and warrants to be converted, a potential further
23,956,451 ordinary shares of between £0.01 to £0.60 would be issued.
Information on share options and warrants is disclosed in Note 14. This figure
excludes the conversion of any CLN's in Note 11.
There were no shares issued subsequent to the end of the interim period.
13. Share capital
Share issues during the Period
During the Period ended 30 September 2024 the following share transactions
took place:
• The Company issued 1,657,196 ordinary shares of £0.01 each for
consideration of £0.01 per share. These shares were issued under the Founder
Share agreement disclosed in the Company's AIM Admission Documentation.
14. Share options and warrants Founder share incentives
The founder shareholders have a right to receive shares at a nominal value
once certain milestones are met.
The movements in the number of incentives during the year were as follows:
Unaudited Six months Unaudited Six months Audited
to to Year ended
30 30 31 March
September September
2024 2023 2024
Number Number Number
18,229,148 18,229,148 18,229,148
Outstanding at beginning of Period
Granted during the Period - - -
Terminated on admission to
AIM - - -
Replacement share awards
following admission to AIM - -
Exercised during the year (1,657,196)
Outstanding at end of Period 16,571,952 18,229,148 18,229,148
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.
Share Options - Employees
EMI and ESOP
Share options have been issued to key employees as an incentive to stay with
the Company. These options can be exercised within one and ten years following
the grant date once the option has vested.
The movement on the number of share options issued by the Company during each
period presented was as follows.
The exercise price of share options outstanding is £0.45 (30 September 2023:
between £0.30 and £0.45) (31 March 2024: between £0.01 and £0.45) and
their remaining contractual life was 15 months (30 September 2023: 9 years)
(31 March 2024: 10 months to 30 months).
CSOP share options
Share options have been issued to key employees as an incentive to stay with
the Company. These options can be exercised within three and ten years
following the grant date once the option has vested.
The exercise price of share options outstanding at 30 September 2024 was
£0.275 and their remaining contractual life was 1 year.
The exercise price of share options outstanding at 31 March 2024 was £0.275
and their remaining contractual life was 1 year and 6 months.
Warrants
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 movement on the number of warrants issued by the Company during each
period presented was as follows.
Unaudited
Unaudited Audited
Six months Six
months Year ended
to
to
to
30
30 31
September
September
March
2024
2023 2024
Number
Number
Number
Outstanding at beginning of
-
2,170,740 2,170,740
Period
Granted during the Period
Exercised during the Period
Expired during the Period (126,760) (2,170,740)
Outstanding at end of Period - 2,043,980 -
At 30 September 2024, the exercise price of warrants was Nil and their
remaining contractual life Nil months.
At 31 March 2024, the exercise price of warrants was Nil and their remaining
contractual life Nil months.
15. Commitments
Capital commitments
As at 30 September 2024, the Group had contracted to purchase property, plant
and machinery amounting to £1,746,455. (30 September 2023: £2,329,060). (31
March 2024: £1,746,455). An
amount of Nil (31 March 2024: Nil) (30 September 2023: £123,320) is
contingent 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 (30 September 2023: £9,329,000) (31 March 2024: £9,329,000)
payable 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 (30 September 2023:
£4,000,000) (31 March 2024: £4,000,000) which is considered to be payable
annually.
16. Events after the end of the interim reporting period
On 17 October 2024, the Company announced that it had raised a further £2.0
million by way of Tranche F of the CLN. In addition, the CLN holders waived
any and all breaches of the CLN such that the Company was not in breach of the
terms of the CLN.
Jeff Court was appointed as CEO on 8 October 2024, and Stephen Harrison was
appointed as Chairman on 3 December 2024 following the Company's Annual
General Meeting.
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