REG - Wishbone Gold PLC - Final Results for the year ended 31 December 2021
30/06/2022 18:30
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RNS Number : 9161Q Wishbone Gold PLC 30 June 2022
This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the Company's obligations under Article 17 of MAR
Please click the following link to view the full set of the Report and
Accounts along with the figure(s) and illustration(s) included in the below
announcement:
https://wishbonegold.com/wp-content/uploads/2022/06/WSBN-RA-Final-Results-for-the-year-ended-31-December-2021-p3kg.pdf
(https://wishbonegold.com/wp-content/uploads/2022/06/WSBN-RA-Final-Results-for-the-year-ended-31-December-2021-p3kg.pdf)
30 June 2022
Wishbone Gold Plc
("Wishbone" or the "Company")
Wishbone Gold Plc / Index: AIM: WSBN / Sector: Natural Resources / AQSE: WSBN
Final Results for the Year ended 31 December 2021
Wishbone Gold Plc (AIM: WSBN, AQSE: WSBN), announces its final results for the
year ended 31 December 2021. The Chairman's Statement and Financial Statement
are set out below and the full Report and Accounts is being sent to
Shareholders and is available on the Company's website www.wishbonegold.com
(http://www.wishbonegold.com) .
Chairman's Statement
Dear Shareholders,
In 2021 we continued the expansion of our exploration portfolio which begun in
2020. We acquired the Cottesloe EPM in Western Australia ("WA") in March and
were granted a southern extension to the Wishbone EPMs in Queensland ("QLD"),
titled Wishbone VI, in August.
This took our portfolio of properties to a total of 159.19 sqkm in Western
Australia and a total of 174 sqkm in the Wishbone project group near
Ravenswood in Queensland with a further 37.2 sqkm at White Mountains further
north.
After COVID related issues in Australia throughout all of the fiscal year
2021, I am very pleased to report that we are now drilling our main
exploration targets at Red Setter in Western Australia and our Wishbone
tenements in Queensland.
Exploration in 2021
Western Australia
During the year we completed far less exploration than we anticipated due to
the continued sporadic lock downs across Australia. One of the major
hinderances was the closure of the WA border with the rest of Australia on
5(th) April 2020. At the time no one imagined that this border would remain
closed for almost two years (697 days to be precise) until 3(rd) March 2022.
This prevented the movement of miners and equipment into or out of WA
throughout this period.
In addition there were intermittent lockdowns in various parts of WA during
the two years of closed borders which in our case critically hampered the
Heritage Surveys which we needed to undertake on our properties before
substantial exploration activity could occur.
The result of 2021 was that although we had programs of works approved at the
government level for all the WA properties these could not be started. In
December we managed a limited amount of drilling at Red Setter but equipment
problems and restrictions on movement meant that the full program did not
start until June 2022. Drilling is now underway and we will report as the
analysis comes through.
Figure 1: Drilling underway at Red Setter Project in WA - click first link
above to view
Figure 2: Drill in Action at the Wishbone Project in QLD - click first link
above to view
Queensland
QLD was not as bad as WA but exploration was still severely hampered. It was
thus excellent news when Dr Simon Beams, the CEO and Chief Geologist of Terra
Search, chose to use the work done for us on the Wishbone group of tenements
for his presentation to the AusIMM Conference in Cairns in May last year. We
have subcontracted our geological and exploration work to Terra Search for
many years and we continue to work with them now in WA as well as Queensland.
The focus of Dr Beams' presentation was that recent geochemical and ground
magnetic results at Wishbone Gold's Halo Prospect compares very favourably to
the geological setting and geochemical association of the nearby Ravenswood
Gold Deposit (total production of 5 million plus ounces gold). These
conclusions were reached by using new analytical techniques to reprocess
historic data as well as adding new exploration work over the last 12 months.
The full presentation is available on our website at:
https://wishbonegold.com/wp-content/uploads/2021/06/WSBN_Beams_FNQ_Cairns_AusIMM_210527_9m2l.pdf
(https://wishbonegold.com/wp-content/uploads/2021/06/WSBN_Beams_FNQ_Cairns_AusIMM_210527_9m2l.pdf)
2022 led to gradual reopening
Following the WA reopening in March we managed to get Heritage surveys
completed and Red Setter and commenced surveys at Cottesloe. We also completed
all necessary Heritage surveys in Queensland. The completion of these enabled
drilling to restart at Red Setter and to start at Wishbone II in June.
The two prospects are vastly different in that whilst the QLD area has
mineralization near to surface in WA our drill targets start at over 100
metres in depth. The latter requires complex drilling and management, and we
are fortunate to have DDSR Drilling Australia operating for us who have unique
combination drills which can do both rotary RC and diamond drilling -
something that is necessary to drill through the upper sedimentary units
before hitting basement. We look forward to announcing the results from both
these programs as soon as the data has been analysed.
Figure 3: Wishbone EPMs in QLD -- click first link above to view
Figure 4: Exploration Properties Location Map in WA- click first link above to
view
Management Changes
In February 2021 David ("Sam") Hutchins joined the board as a non-executive
director. I have known Sam for many years and he brings excellent experience
to our board as a natural resources fund manager and in his role as a Member
of the FTSE Gold Mines Index Committee.
In October 2021 Jack (Kaiyi) Sun joined the company as Group CFO. In addition
to being a qualified accountant Jack has degrees from the Said Business School
Oxford and the Judge Business School Cambridge. I have worked with Jack for
many years, and it is a pleasure to have him back on the team.
Financial Review and Financing
At the end of the period under review, the accounts show that Wishbone held
cash balances totalling £3,002,547 (2020: £1,602,099). Administrative costs,
excluding interest during the year, were £1,194,053 (2020: £814,944).
The Company continues its strategy of exploration on its properties in
Australia.
In conclusion I would like to thank you all: staff, shareholders and advisers
for your hard work and support. We will continue to announce news as soon as
we are allowed by regulations to do so.
___________________________
R O'D Poulden
Chairman
30 June 2022
For further information, please contact:
Wishbone Gold Plc
Richard Poulden, Chairman Tel: +971 4 584 6284
Beaumont Cornish Limited
(Nominated Adviser and AQUIS Exchange Corporate Adviser)
Roland Cornish/Rosalind Hill Abrahams Tel: +44 20 7628 3396
Peterhouse Capital Limited
(Broker)
Lucy Williams and Duncan Vasey Tel: +44 20 7469 0930
Wishbone Gold Plc
Consolidated Income Statement
for the year ended 31 December 2021
Notes 2021 2020
£ £
Discontinued Operations
Revenue - 1,091,860
Cost of sales - (1,083,748)
Gross profit - 8,112
Interest income 17,605 -
Administration expenses 5 (9,901) (25,767)
Write-off of bad debts 15 - (38,043)
Income/(loss) from discontinued operations 7,704 (55,698)
Continuing Operations
Other income - 49,888
Interest income 21 16,340 -
Administration expenses 5 (1,184,152) (789,177)
Operating loss (1,167,812) (739,289)
Gain on settlement of liability 13 - 154,941
Impairment of goodwill 10 - (145,885)
Foreign exchange (loss)/gain (80,049) 99,005
Finance costs - (7,153)
Loss from continuing operations - before taxation (1,247,861) (638,381)
Tax on loss - -
Loss from continuing operations (1,247,861) (638,381)
Loss for the financial year (1,240,157) (694,079)
(0.746) (0.909)
Loss per share:
Basic and diluted (pence)
There are no recognised gains or losses other than disclosed above and there
have been no discontinued activities during the year.
The notes on pages 32 to 56 form part of these financial statements.
Consolidated Statement of Financial Position
as at 31 December 2021
Notes 2021 2020
£ £
Current assets
Trade and other receivables 8 33,135 423,820
Cash and cash equivalents 3,002,547 1,602,099
3,035,682 2,025,919
Non-current assets
Property, plant and equipment - net 9 - -
Goodwill 10 - -
Other intangible assets 10 1,460,055 1,020,930
1,460,055 1,020,930
Total assets 4,495,737 3,046,849
Current liabilities 13 135,752 278,484
Equity
Share capital 14 2,991,216 2,967,390
Share premium 11,698,892 8,943,833
Share payment reserve 72,987 -
Translation adjustment (411,419) (411,419)
Foreign exchange reserve (212,258) (192,163)
Accumulated losses (9,779,433) (8,539,276)
4,359,985 2,768,365
Total equity and liabilities 4,495,737 3,046,849
The financial statements were approved by the board and authorised for issue
on 30 June 2022 and signed on its behalf by:
A.D. Gravett
R O'D Poulden
Director
Director
The notes on pages 32 to 56 form part of these financial statements.
Company Statement of Financial Position
as at 31 December 2021
Notes 2021 2020
£ £
Current assets
Trade and other receivables 8 7,584 1,811,879
Loans 15 2,398,756 1,335,107
Cash and cash equivalents 2,430,728 -
4,837,068 3,146,986
Non-current assets
Investments 11 104,105 104,105
104,105 104,105
Total assets 4,941,173 3,251,091
Current liabilities 13 92,607 190,616
Equity
Share capital 14 2,991,216 2,967,390
Share premium 14 11,698,892 8,943,833
Share payment reserve 14 72,987 -
Translation adjustment 14 (411,419) (411,419)
Accumulated losses (9,503,110) (8,439,329)
4,848,566 3,060,475
Total equity and liabilities 4,941,173 3,251,091
The financial statements were approved by the board and authorised for issue
on 30 June 2022 and signed on its behalf by:
A.D. Gravett
R O'D Poulden
Director
Director
The notes on pages 32 to 56 form part of these financial statements.
Consolidated Statement of Cash Flows
for the year ended 31 December 2021
Notes 2021 2020
£ £
Cash flows from operating activities
Loss before tax (1,240,157) (694,079)
Reconciliation to cash generated from operations:
Foreign exchange (gain)/loss 80,049 (99,005)
Interest expense - 7,153
Impairment of goodwill 10 - 145,885
Write-off of bad debts 15 - 38,043
Write-off of receivables 5 - 10,937
Depreciation 9 - 19,487
Administrative expenses converted into ordinary shares 14 - 168,536
Administrative expenses under share option scheme 72,987 -
Gain on settlement of liability 13 - (154,941)
Operating cash flow before changes in working capital (1,087,121) (557,984)
Decrease in receivables 325,420 86,943
(Decrease)/increase in payables (164,720) 314,639
Net cash flows used in operations (926,421) (156,402)
Cash flows from an investing activity
Additions of intangible assets 10 (217,125) (368,077)
Net cash flows used in investing activities (217,125) (368,077)
Cash flows from a financing activity
Issue of shares for cash 14 2,556,885 2,355,200
Net cash flows from financing activities 2,556,885 2,355,200
Effects of exchange rates on cash and cash equivalents, including effects of (12,891) (241,570)
foreign exchange reserve
Net increase in cash and cash equivalents 1,400,448 1,589,151
Cash and cash equivalents at 1 January 1,602,099 12,948
Cash and cash equivalents at 31 December 3,002,547 1,602,099
The notes on pages 32 to 56 form part of these financial statements.
Company Statement of Cash Flows
for the year ended 31 December 2021
Notes 2021 2020
£ £
Cash flows from operating activities
Loss before tax (1,063,781) (1,092,676)
Reconciliation to cash generated from operations:
Foreign exchange (gain)/loss 80,049 (99,005)
Interest expense - 7,153
Provision for impairment of related party loans 21 - 497,104
Write-off of receivables 5 - 10,937
Impairment of investments 11 - 194,183
Gain on settlement of liability 13 - (154,941)
Administrative expenses converted into ordinary - 168,538
shares 14
Administrative expenses under share option scheme 72,987 -
Operating cash flow before changes in working capital (910,745) (468,707)
Decrease/(increase) in receivables 897,381 (1,911,762)
(Decrease)/increase in payables (119,997) 249,936
Net cash flows used in operations (133,361) (2,130,533)
Cash flows from financing activities
Issue of shares for cash 14 2,556,885 2,355,200
Net cash flow from financing activities 2,556,885 2,355,200
Effects of exchange rates on cash and cash equivalents 7,204 (227,922)
Net increase/(decrease) in cash and cash equivalents 2,430,728 (3,255)
Cash and cash equivalents at 1 January - 3,255
Cash and cash equivalents at 31 December 2,430,728 -
The notes on pages 32 to 56 form part of these financial statements.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
1. General Information
The consolidated financial statements of Wishbone Gold Plc (the "Company") and
its subsidiaries (the "Group") for the year ended 31 December 2021 were
authorised for issue in accordance with a resolution of the Company's
directors on 30 June 2022.
The Company was incorporated in Gibraltar under the name of Wishbone Gold Plc
as a public company under the Gibraltar Companies Act 2014. The authorised
share capital of the Company is £8,000,000 divided into 8,000,000,000 shares
of £0.001 each. The registered office is located at Suite 16, Watergardens 5,
Waterport Wharf GX11 1AA, Gibraltar.
In 2021 the Group continued the expansion of its exploration portfolio which
begun in 2020. The Group acquired the Cottesloe EPM in Western Australia
("WA") in March and were granted a southern extension to the Wishbone EPMs in
Queensland ("QLD"), titled Wishbone VI, in August.
This took the Group's portfolio of properties to a total of 159.19 sqkm in
Western Australia and a total of 174 sqkm in the Wishbone project group near
Ravenswood in Queensland with a further 37.2 sqkm at White Mountains further
north.
Further share allotments have been made as disclosed in note 14.
2. Accounting Policies
Basis of preparation
The financial statements of the Group have been prepared in accordance with
International Financial Reporting Standards as adopted by the European Union
("IFRS") applied in accordance with the provisions of the Gibraltar Companies
Act 2014 ("the Act").
In accordance with the Gibraltar Companies Act 2014, the individual statement
of financial position of the Company has been presented as part of these
financial statements. The individual statement of comprehensive income has not
been presented as part of these financial statements as permitted by Section
288 of the Act. The individual statement of comprehensive income of the
Company shows a loss for the year of £1,603,781 (2020: £1,092,676).
IFRS is subject to amendment and interpretation by the International
Accounting Standards Board ("IASB") and the International Financial Reporting
Interpretations Committee ("IFRIC"). The accounts have been prepared on the
basis of the recognition and measurement principles of IFRS that are
applicable for the year commencing 1 January 2020.
The consolidated financial statements have been prepared under the historical
cost convention. The principal accounting policies set out below have been
consistently applied to all years presented other than changes from the new
and amended standards and interpretations effective from 1 January 2021.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
2. Accounting Policies - continued
Going concern
The Group has incurred losses during the financial years ended 31 December
2021 and 31 December 2020.
In June 2020, driven in part by the lack of air freight and travel caused by
COVID-19 the Group fundamentally changed its strategy. It suspended all gold
trading operations and re-focused on exploration in Australia. Initially this
was on the existing properties in Queensland but during the latter part of
2020 and early 2021 the group took options over and acquired additional
properties in Western Australia.
COVID-19 remains an unpredictable factor in all company operations worldwide
and the Company is no exception to this.
The presentation of this new strategy was received extremely well by the
markets with the Company's market capitalization rising from £1.25m in June
2020 to over £30m by June 2021. This has enabled the Company to raise £2.57m
in 2021 (2020: £3.57m).
The Directors have reviewed the financial condition of the Group since 31
December 2021 and have considered the Group's cash projections and funding
plan for the 12 months from the date of approval of these financial
statements. The Group's current cash situation without any additional
funding will not only sustain the Company for at least the next twelve months
but allow the Group to continue its aggressive exploration program in
Australia. This can of course be adjusted in accordance with the results. All
exploration is inherently unpredictable as to the final outcome.
The Company has also demonstrated that it has the ability to raise capital for
its new strategy that it may require to accelerate the exploration program if
it desires. At the date of approval of these financial statements, the
Company is currently debt free.
The Board of Directors is confident that the Group has access to sufficient
funds to enable the Group to meet its liabilities as and when they fall due
for at least the next twelve months and also to continue full operations in
exploration.
Basis of consolidation
The Group's consolidated financial statements incorporate the financial
statements of the Company and its subsidiaries prepared at 31 December each
year. Control is achieved where the company has power to govern the financial
and operating policies of an investee entity so as to obtain benefits from its
activities.
The results of subsidiaries acquired or disposed of during the year are
included in the consolidated income statement from the effective date of
acquisition or up to the effective date of disposal, as appropriate.
Where necessary, adjustments are made to the financial statements of
subsidiaries to bring the accounting policies used into line with those used
by the Group.
All intra-group transactions and balances and any unrealised gains and losses
arising from intra-group transactions are eliminated in preparing the
consolidated accounts.
In the parent company financial statements, the investment in the subsidiaries
is accounted for at cost.
Functional and presentational currencies
The individual financial information of the entity is measured and presented
in the currency of the primary economic environment in which the entity
operates (its functional currency).
The Company's functional currency has historically been the United States
Dollar ("US$"), which was also the Company's presentation currency.
As at 1 January 2021, the functional currency of the Company is the Pounds
Sterling ("£"). The Board of Directors considered that the Group's source
of funding is predominantly £ denominated. As a result, the Directors have
determined that £ is the currency which best reflects the underlying
transactions, events and conditions relevant to the Group with effect from 1
January 2021 ("the effective date of the change").
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
2. Accounting Policies - continued
Functional and presentational currencies - continued
In accordance with IAS 21 'The Effect of Changes in Foreign Exchange Rates',
the effect of a change in functional currency is accounted for prospectively.
All items were translated at the exchange rate on the effective date of the
change, being US$ 0.7321 to £1. The resulting translated amounts for
non-monetary items are treated as their historical cost. Share capital and
premium were translated at the historic rates prevailing at the dates of the
underlying transactions.
The effects of translating the Company's financial results and financial
position into £ were recognized in the foreign currency translation reserve.
The financial statements are presented in £ including the comparative
figures. All amounts are recorded in the nearest £, except when otherwise
indicated.
Business combinations and goodwill
On acquisition, the assets and liabilities, and contingent liabilities of
subsidiaries are measured at their fair values at the date of acquisition. Any
excess of cost of acquisition over the fair value of identifiable net assets
acquired is recognised as goodwill. Any deficiency of the cost of acquisition
below the fair value of identifiable net assets acquired (i.e., discount on
acquisition) is credited to the income statement in the period of acquisition.
Goodwill arising on consolidation is recognised as an asset and reviewed for
impairment at least annually. Any impairment is recognised immediately in the
income statement and is not subsequently reversed.
Exploration and evaluation assets
Exploration and evaluation expenditure in relation to separate areas of
interest for which rights of tenure are current is carried forward as an asset
in the statement of financial position where it is expected that the
expenditure will be recovered through the successful development and
exploitation of an area of interest, or by its sale; or exploration activities
are continuing in an area and activities have not reached a stage which
permits a reasonable estimate of the existence or otherwise of economically
recoverable reserves. Where a project or an area of interest has been
abandoned, the expenditure incurred thereon is written off in the year in
which the decision is made. Exploration and expenditure ceases after technical
feasibility and commercial viability of extracting a mineral resource are
demonstrable.
Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation.
Cost is depreciated on a straight-line basis over their expected useful lives
as follows:
Machinery 15% per annum
Investments
Investments in group undertakings
Investments in group undertakings are measured at cost less any impairments
arising should the fair value after disposal costs be lower than cost.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
2. Accounting Policies - continued
Impairment of non-financial assets
At each year end date, the Group reviews the carrying amounts of its
non-financial assets, which comprise of investments, tangible and intangible
assets, to determine whether there is any indication that those assets have
suffered an impairment loss. If any such indication exists, the recoverable
amount of the assets is estimated in order to determine the extent of the
impairment loss (if any). Where the asset does not generate cash flows that
are independent from other assets, the Group estimates the recoverable amount
of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less cost to sell, and value in
use. In assessing value in use, the estimated future cash flows are discounted
to their present value using pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the
asset, for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash generating unit) is estimated
to be less than its carrying amount, the carrying amount of the asset (cash
generating unit) is reduced to its recoverable amount. An impairment loss is
recognised as an expense immediately, unless the relevant asset is carried at
revalued amount, in which case the impairment loss is treated as a revaluation
decrease.
Where an impairment loss subsequently reverses, the carrying amount of the
asset (cash generating unit) is increased to the revised estimate of its
recoverable amount, but so that the increased carrying amount does not exceed
the carrying amount that would have been determined had no impairment loss
been recognised for the asset (cash generating unit) in prior periods. A
reversal of impairment loss is recognised in the income statement immediately.
During the year, the Group did not recognize any impairment of goodwill £Nil
(2020: £145,885) since the goodwill value was taken to zero in 2020.
Furthermore, in 2021, the Company did not recognise additional impairment of
its related party loans of £Nil (2020: £466,750).
Foreign currencies
The consolidated financial statements are presented in Gibraltar Pounds
Sterling ("£"), the presentation and functional currency of the Company. All
values are rounded to the nearest £. Transactions denominated in a foreign
currency are translated into £ at the rate of exchange at the date of the
transaction or using the average rate for the financial year. At the year-end
date, monetary assets and liabilities denominated in foreign currency are
translated at the rate ruling at that date. All exchange differences are dealt
with in the income statement.
On consolidation, the assets and liabilities of foreign operations which have
a functional currency other than £ are translated into £ at foreign exchange
rates ruling at the year-end date. The revenues and expenses of these
subsidiary undertakings are translated at average rates applicable in the
period. All resulting exchange differences are recognised as a separate
component of equity. Foreign exchange gains or losses arising from a monetary
item receivable from or payable to a foreign operation are recognised in the
consolidated statement of comprehensive income and disclosed as a separate
component of equity, such foreign exchange gains or losses are reclassified
from equity to the income statement on disposal of the net foreign operation.
The same foreign exchange gains or losses are recognised in the stand-alone
income statements of either the parent or the foreign operation.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
2. Accounting Policies - continued
Foreign currencies - continued
In the statement of cash flows, cash flows denominated in foreign currencies
are translated into the presentation currency of the Group at the average
exchange rate for the year or the prevailing rate at the time of the
transaction where more appropriate.
The closing exchange rate applied at the year-end date was AUD 1.8624 per £1
(2020: AUD 1.1.7752). The average exchange rate applied at the year-end date
was AUD 1.8315 per £1 (2020: AUD 1.8611).
The closing exchange rate applied at the year-end date was AED 4.9710 per £1
(2020: AED 5.0508). The average exchange rate applied at the year-end date was
AED 5.0493 per £1 (2020: AED 4.7162).
Segment reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-maker as required by IFRS 8
"Operating Segments". The chief operating decision-maker, who is responsible
for allocating resources and assessing performance of the operating segments,
has been identified as the Board of Directors.
The accounting policies of the reportable segments are consistent with the
accounting policies of the Group as a whole. Segment loss represents the loss
incurred by each segment without allocation of foreign exchange gains or
losses, investment income, interest payable and tax. This is the measure of
loss that is reported to the Board of Directors for the purpose of the
resource allocation and the assessment of the segment performance.
When assessing segment performance and considering the allocation of
resources, the Board of Directors review information about segment assets and
liabilities. For this purpose, all assets and liabilities are allocated to
reportable segments (note 4).
Revenue recognition
The Group earns its revenues only from gold trading, which is recognised at a
point in time. Revenue is recognised when control of a good or service
transfers to a customer. A new five-step approach is applied before revenue
can be recognised:
identify contracts with customers;
identify the separate performance obligation;
determine the transaction price of the contract;
allocate the transaction price to each of the separate performance
obligations; and
recognise the revenue as each performance obligation is satisfied.
The revenue recognition under IFRS 15 is similar to how the Company has
previously accounted for its revenues under the old revenue accounting
standards.
Trade and other receivables
Trade and other receivables are recognised initially at fair value and
subsequently measured at amortised cost less provision for impairment.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
2. Accounting Policies - continued
Impairment of financial assets
The Group has adopted the expected credit loss model ("ECL") in IFRS 9. The
ECL is to be measured through a loss allowance at an amount equal to:
• the 12-month expected credit losses (ECL that result from those
default events on the financial instrument that are possible within 12 months
after the reporting date); or
• full lifetime expected credit losses (ECL that result from all
possible default events over the life of the financial instrument).
The Group only holds cash and trade and other receivables with no financing
component and therefore has adopted an approach similar to the simplified
approach to ECLs.
Provision for impairment (or the ECL) is established based from full lifetime
ECL and when there is objective evidence that the Group will not be able to
collect all amounts due according to the original terms of the receivable. The
amount of the impairment is the difference between the asset's carrying amount
and the present value of the estimated future cash flows, discounted at
effective interest rate.
Cash and cash equivalents
Cash and cash equivalents comprise on demand deposits held with banks.
Trade and other payables
Trade payables are initially measured at fair value, and subsequently measured
at amortised cost, using the effective interest rate method.
Taxation
Current tax is provided at amounts expected to be paid (or recovered) using
the tax rates and laws that have been enacted or substantively enacted by the
year end date. Deferred taxation is provided in full, using the liability
method, on temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the consolidated financial
statements. However, if the deferred tax arises from the initial recognition
of an asset or liability in a transaction other than a business combination
that at the time of the transaction affects neither accounting, nor taxable
profit or loss, it is not accounted for. Deferred tax is determined using tax
rates and laws that have been enacted (or substantively enacted) by the year
end date and are expected to apply when the related deferred tax asset is
realised or the deferred tax liability is settled.
Deferred tax assets are recognised to the extent that it is probable that
future taxable profit will be available against which the temporary
differences can be utilised.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the
assets of the entity after deducting all of its liabilities. Equity
instruments issued by a group entity are recorded at the proceeds received,
net of any direct issue costs.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
2. Accounting Policies - continued
Share based payments
The Company has historically issued warrants and share options in
consideration for services. The fair value of the warrants have been treated
as part of the cost of the service received and is charged to share premium
with a corresponding increase in the share based payment reserve. All
subscriber warrants issued in the prior years had already lapsed, thus the
share based payment reserve was transferred to retained earnings. In 2021 and
2020, the Group issued warrants (see note 16) as part of the total
consideration for the acquisition of exploration licenses (see note 10), for
which the value attributable to the warrants is £Nil.
Standards, amendments and interpretations to existing standards that are
effective in 2021
The following new standards, amendments and interpretations to existing
standards have been adopted by the Group during the year but have had no
significant impact on the financial statements of the Group:
Interest rate benchmark reform - Phase 2, Amendments to IFRS 9, IAS 39,, IFRS
7, IFRS 4 and IFRS 16. The amendment provide temporary reliefs which address
the financial reporting effects when an interbank offered rate (IBOR) is
replaced with an alternative nearly risk-free interest rate (RFR). The
amendment had no impact on the consolidated financial statements of the Group.
The Group intends to use the practical expedients in future periods if they
become applicable.
COVID-19 related rent concessions beyond 30 June 2021, Amendments to IFRS 16.
On 28 May 2020, the IASB issued Covid-19 Related Rent Concessions - amendments
to IFRS 16 Leases. The amendments provide relief to lessees from applying IFRS
16 guidance on lease modification accounting for rent concessions arising as a
direct consequence of the Covid-19 pandemic. As a practical expedient, a
lessee may elect not to assess whether a Covid-19 related rent concession from
a lessor is a lease modification. The amendment was intended to apply until 30
June 2021, but as the impact of the Covid-19 pandemic is continuing, on 31
March 2021, the IASB extended the period of application of the practical
expedient to 30 June 2022. The amendment applies to annual reporting periods
beginning on or after 1 April 2021. However, the Group has not received
Covid-19 related rent concessions but plans to apply the practical expedient
if it becomes applicable with allowed period of application.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
2. Accounting Policies - continued
New standards, amendments and interpretations to existing standards that are
not yet effective or have not been early adopted by the Group
At the date of authorisation of these consolidated financial statements, the
following standards and interpretations were in issue but not yet mandatorily
effective and have not been applied in these financial statements:
IFRS 3 (Amendments), 'Business Combination - Reference to the Conceptual
Framework' (effective from 1 January 2022). The amendments update an outdated
reference to the Conceptual Framework in PFRS 3 without significantly changing
the requirements in the standard.
IAS 16 (Amendments), 'Property, Plant and Equipment - Proceeds Before Intended
Use' (effective from 1 January 2022). The amendments prohibit deducting from
the cost of an item of property, plant and equipment any proceeds from selling
items produced while bringing that asset to the location and condition
necessary for it to be capable of operating in the manner intended by
management. Instead, an entity recognizes the proceeds from selling such
items, and the cost of producing those items, in profit or loss.
IAS 37 (Amendments), 'Provisions, Contingent Liabilities and Contingent
Assets: Onerous Contracts - Cost of Fulfilling a Contract' (effective from 1
January 2022). The amendments specify that the 'cost of fulfilling' a contract
comprises the 'costs that relate directly to the contract'. Costs that relate
directly to a contract can either be incremental costs of fulfilling that
contract (examples would be direct labor, materials) or an allocation of other
costs that relate directly to fulfilling contracts (an example would be the
allocation of the depreciation charge for an item of property, plant and
equipment used in fulfilling the contract).
Annual Improvements to IFRS 2018-2020 Cycle. Among the improvements, the only
amendments, which are effective from 1 January 2022, relevant to the Group are
IFRS 9 (Amendments), 'Financial Instruments - Fees in the '10 per cent' Test
for Derecognition of Liability'. The improvements clarify the fees that an
entity includes when assessing whether the terms of a new or modified
financial liability are substantially different from the terms of the original
financial liability
.
IAS 1 (Amendments), 'Presentation of Financial Statements - Classification of
Liabilities at Current or Non-current' (effective from 1 January 2023). The
amendments aim to promote consistency in applying the requirements by helping
companies determine whether, in the statement of financial position, debt and
other liabilities with an uncertain settlement date should be classified as
current (due or potentially due to be settled within one year) or non-current.
The Company assessed that there is no significant impact of the adoption of
the new or amended Accounting Standards and Interpretations on the Company's
financial statements. The Company has not early adopted any other standard,
interpretation or amendment that has been issued but is not yet effective.
3. Critical accounting estimates and judgements
The critical accounting estimates and judgements made by the Group regarding
the future or other key sources of estimation, uncertainty and judgement that
may have a significant risk of giving rise to a material adjustment to the
carrying values of assets and liabilities within the next financial year are:
Critical judgements in applying the group's accounting policies
Going concern (including impact of COVID-19)
The preparation of the financial statements is based on the going concern
assumption as disclosed in note 2. The Board of Directors, after taking into
consideration the additional funding received, believe the going concern
assumption is appropriate.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
3. Critical accounting estimates and judgements - continued
Determining capitalizable exploration and evaluation expenditures
The application of the Company's accounting policy for exploration and
evaluation expenditure requires judgement to determine whether future economic
benefits are likely from either future exploration or sale, or whether
activities has not reached a stage that permits a reasonable assessment of the
existence of reserves.
In addition to applying judgement to determine whether future economic
benefits are likely to arise from the Company's exploration and evaluation
assets, or whether activities have not reached a stage that permits a
reasonable assessment of the existence of reserves, the Company has to apply a
number of estimates and assumptions. The determination of JORC resource is
itself an estimation process that involves varying degree of uncertainty
depending on how the resources are classified.
The estimation directly impacts when the Group defers exploration and
evaluation expenditure. The deferral policy requirements management to make
certain estimates and assumptions about future events and circumstances,
particularly, whether an economically viable extraction operation can be
established.
Any such estimates and assumptions may change as new information becomes
available. If, after expenditure is capitalised, information becomes available
suggesting that the recovery of expenditure is unlikely, the relevant
capitalized amount is written off to the statement of profit or loss and other
comprehensive income in the period when the new information becomes available.
Impairment of exploration and evaluation assets
Impairment of exploration and evaluation expenditure is subject to significant
estimation, due to the complexity of the accounting requirements and the
significant judgement required in determining the assumptions to be used to
estimate the recoverable amount. As at 31 December 2021, the Board of
Directors are satisfied that no impairment exists as outlined in note 20.
If, after expenditure, is capitalized, information becomes available
suggesting that the recovery of expenditure is unlikely, the amount
capitalised is written off in profit and loss in the period when the new
information becomes available. As at 31 December 2021, no such information
is available to suggest that the expenditure is not recoverable.
Impairment of property, plant and equipment
In assessing impairment, management estimates the recoverable amount of the
equipment in Wishbone Honduras based on expected future cash flows. Estimation
uncertainty relates to determination of future cash flows, including the
potential value if the equipment is to be sold to a third party. In 2019,
management determined that the equipment has become idle, thus, has not put
into use in the operations. Accordingly, the Board of Directors considered
that the equipment shall be impaired in 2020 as it believed that the
recoverable amount was lower than the carrying value of the property, plant
and equipment.
Impairment of goodwill
In 2020, the Board of Directors considered that the goodwill arising from the
acquisition of Precious Metals International Ltd together with its wholly
owned subsidiary Black Sand FZE ("the PMI Group") was overvalued. Thus, the
directors reviewed the carrying value for the current financial year and
considered that goodwill as at 31 December 2020 should be fully impaired.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
3. Critical accounting estimates and judgements - continued
Determination of functional currency
As at 1 January 2021, the functional currency of the Company is the Pounds
Sterling ("£"). The Board of Directors considered that the Group's source of
funding is predominantly £ denominated. As a result, the Directors have
determined that £ is the currency which best reflects the underlying
transactions, events and conditions relevant to the Group with effect from 1
January 2021 ("the effective date of the change").
Parent company statement of financial position - impairment of the investment
in a subsidiary and related party receivables
The Company's investments in its subsidiaries are carried at cost less
provision for impairment. The values of the investments are inherently linked
to the assets held by and or the performance of the subsidiaries and an
impairment review is undertaken by management annually to assess whether any
permanent diminution in value has occurred.
At the reporting date, the Australian subsidiaries had net assets of £406,094
(AUD 756,323) (net liabilities in 2020: £224,084 (AUD 419,165)). As noted
above, the Board of Directors do not consider that the exploration and
evaluation assets are impaired. An independent valuation of the underlying
assets in these subsidiaries was carried out in 2019, which provided a
midpoint value of AUD1,218,750 and therefore there is no indication of
impairment of the investment in and loan to the Australian subsidiaries of
£104,105 (2020: 104,105) and £2,398,756 (2020: £1,335,107) respectively.
Further in 2021, in a report of Terra Search, the recent geochemical and
ground magnetic results at Wishbone's Gold's Halo prospect compares very
favourably to the geological setting and geochemical association of the nearby
Ravenswood Gold Deposit (total production of 5 million plus ounces gold).
At the reporting date, the UAE subsidiary had net liabilities of £458,607
(AED 2,279,755) (2020: £462,089
(AED2,318,660)). The Company provided full allowance for impairment on the
loan to the UAE subsidiary, with gross balance of US$375,263.
Valuation of warrants
As described in note 16, the fair value of any warrants granted was calculated
using the Binomial Option Pricing model which requires the input of highly
subjective assumptions, including volatility of the share price. Changes in
subjective input assumptions may materially affect the fair value estimate.
4. Segmental analysis
Management has determined the operating segments by considering the business
from both a geographic and product perspective. For management purposes, the
Group is currently organised into a single operating division, resource
evaluation (Australia). The division is the business segment for which the
Group reports its segment information internally to the Board of Directors.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
5. Administrative expenses
2021 2020
£ £
Fees payable to the Company's auditor for the audit of the Group consolidated 36,500 42,358
financial statements
Other administrative costs 902,987 616,155
Remuneration of directors of the Group 254,566 126,007
Depreciation - 19,487
Bad debts expense - 10,937
1,194,053 814,944
Remuneration to the directors of the Group may be settled via the issue of
equity in the Company and cash, as disclosed in note 21.
6. Taxation
The Company is subject to corporation tax in Gibraltar on any profits, which
are accrued in or derived from Gibraltar or any passive income which is
taxable. The corporation tax rate in Gibraltar for the year ended 31 December
2021 is 12.5% (2020: 10%). The Company has no operations in Gibraltar which
are taxable.
The Company has taxable losses to carry forward, consequently no provision for
corporate tax has been made in these financial statements.
The Group's subsidiary, Wishbone Gold Pty Ltd, is subject to corporate income
tax in Australia. The corporate income tax rate in Australia for the year
ended 31 December 2021 is 30% (2020: 30%).
This subsidiary has taxable losses to carry forward, consequently no provision
for corporate tax has been made in these financial statements.
Note that there are no group taxation provisions under the tax laws of
Gibraltar.
As at 31 December 2021 and as at 31 December 2020, the Company has no deferred
tax assets and no deferred tax liabilities.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
7. Loss per share
2021 2020
£ £
Loss for the purpose of basic loss per share being net loss attributable to (1,240,157) (694,079)
equity owners of parent
Loss for the purpose of diluted earnings per share (1,240,157) (694,079)
Number of shares:
Weighted average number of shares in issue during the year:
Issued ordinary shares at the beginning of the year 2,845,879,000 2,845,878,980
Effect of share issues before reorganisation - 20
Weighted average number of new ordinary shares before reorganisation 2,845,879,000 2,802,036,973
Weighted average number of new ordinary shares
Issued ordinary shares at the beginning of the year 149,969,321 28,458,790
Effect of share issues after reorganisation 16,369,536 47,120,629
Weighted average number of new ordinary shares at 31 December 166,338,857 75,579,419
Basic loss per share (pence) (0. 746) (0.918)
Due to the Company and the Group being loss making, the share warrants (note
16) are antidilutive.
8. Trade and other receivables
2021 2020
Group £ £
Debtors 19 7,684
Prepayments 1,577 6,887
Loans from directors 31,539 31,249
Unpaid share capital - 378,000
33,135 423,820
2021 2020
Company £ £
Debtors 12 2,491
Prepayments - 6,107
Unpaid share capital - 378,000
Other receivable (see note 21) 7,572 1,425,281
7,584 1,811,879
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
9. Property, plant and equipment
2021 2020
Group £ £
Cost
As at 1 January and 31 December 184,164 184,164
Accumulated Depreciation and Impairment
As at 1 January (184,164) (164,677)
Depreciation charges during the year - (19,487)
As at 31 December (184,164) (184,164)
Net Book Value
As at 31 December - -
The plant in Honduras is currently not in production. Given the status of the
Honduran operations, Management deemed that the value of the property, plant
and equipment has been fully depreciated as at 31 December 2020.
10. Intangible assets
Goodwill Exploration & evaluation assets Total
Group £ £ £
Cost
At 1 January 2020 141,062 292,571 433,633
(Impairment)/additions (145,885) 734,744 588,859
Foreign exchange revaluation 4,823 (6,385) (1,562)
At 31 December 2020 - 1,020,930 1,020,930
At 1 January 2021 - 1,020,930 1,020,930
(Impairment)/additions - 488,364 488,364
Foreign exchange revaluation - (49,239) (49,239)
At 31 December 2021 - 1,460,055 1,460,055
The Group holds Exploration Permits for Mining ("EPMs") to four tenements in
Queensland, Australia and four exploration licenses in Western Australia. The
renewal of the EPMs is for a maximum further period of 5 years. Permits are
not automatically renewed but require an application to the Queensland
Department of Natural Resources and Mines.
In 2016, Wishbone acquired 100% of the share capital of Precious Metals
International Ltd together with its wholly owned subsidiary Black Sand FZE
("the PMI Group"). The resulting goodwill of £647,984 reflects the fair value
of the net assets acquired and the value of the considerations at the time of
acquisition. The directors have fully impaired this goodwill.
In 2020, the Group acquired three exploration licenses in Western Australia
for a total deemed consideration of £549,999 which consists of cash amounting
to £183,333, shares of stocks with deemed value of £366,666 and share
warrants valued at nil (see notes 14 and 16). A portion of the warrants issued
were exercised in 2021 for a total consideration of £122,222.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
10. Intangible assets - continued
In 2021, the Group acquired additional exploration license in Western
Australia for a total deemed consideration of £161,000 which consists of cash
amounting to £35,000, shares of stocks with deemed value of £126,000 and
share warrants valued at nil (see notes 14 and 16).
11. Investments
Shares in subsidiary undertakings
2021 2020
Company £ £
Cost
As at 1 January and 31 December 697,329 697,329
Accumulated Impairment
As at 1 January (593,224) (423,186)
Impairment charges during the year (see note 12) - (194,183)
Foreign exchange revaluation - 24,145
As at 31 December (593,224) (593,224)
Net Book Value
As at 31 December 104,105 104,105
Company Class of shares held % held Country of registration or incorporation Cost of Investment
£
Wishbone Gold Pty Ltd 110,000,000 100% Australia 104,105
ordinary shares
of GBP 0.001
each
Precious Metals International Ltd. 100 common 100% British Virgin Islands 182,326
shares of
USD 1 each
Wishbone Gold Honduras Ltd. 2,000 ordinary shares of GBP 1 each 100% Gibraltar 410,898
Wishbone Gold FZ-LLC 10 ordinary shares of AED 1,000 each 100% United Arab Emirates -
Wishbone Gold WA Pty Ltd 100 ordinary shares of AUD 1 each 100% Australia -
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
11. Investments - continued
Wishbone Gold Pty Ltd is an exploration company. The Company is incorporated
in Australia and the registered office address is c/o RSM, Level 6, 340
Adelaide St, Brisbane City 4000, Australia.
Precious Metals International Ltd. is a holding company that controls Black
Sand FZE in the UAE. Precious Metals International Ltd. is incorporated in the
British Virgin Islands and the registered office address is Nerine Chambers,
P.O. Box 905, Road Town, Tortola, British Virgin Islands.
Wishbone Gold Honduras Ltd. is a company incorporated in Gibraltar and the
registered office address is at Suite 16, Watergardens 5, Waterport Wharf,
Gibraltar. In the previous years, the company has not been consolidated into
the financial statements since there were no transactions in the company which
are material at a group level.
Wishbone Gold FZ-LLC is a company incorporated in the UAE and the registered
office address is at Al Jazirah Al Hamra, RAKEZ Business Zone-FZ, Ras Al
Khaimah, UAE. The company has not been consolidated into the financial
statements since there were no transactions in the company which are material
at a group level.
Wishbone Gold WA Pty Ltd is also an exploration company. The Company is
incorporated in Australia and the registered office address is c/o RSM, Level
6, 340 Adelaide St, Brisbane City 4000, Australia.
The cost of the investments in Wishbone Gold FZ-LLC and Wishbone Gold WA Pty
Ltd is negligible and has not been recognised.
12. Impairment of investments
2021 2020
Company £ £
Impairments recognised during the year - (194,183)
In 2020, the Company considered its investment in Precious Metals
International Ltd. to be fully impaired given the current situation of the
Dubai physical gold market and high levels of uncertainty from the lockdown of
businesses and countries brought about by COVID-19.
13. Current liabilities
2021 2020
£ £
Group
Trade payables 63,763 103,634
Accruals and deferred income 71,989 159,063
Loan from Black Swan FZE - 15,787
135,752 278,484
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
13. Current liabilities - continued
2021 2020
Company £ £
Trade payables 27,533 26,278
Accruals and deferred income 51,500 148,551
Loan from Black Swan FZE - 15,787
Amount due to related party undertaking 13,574 -
92,607 190,616
In 2020, the outstanding loan from Sanderson Capital Partners Limited was
fully settled for shares, through the conversion of £176,267 of the balance
of the Sanderson loan facility including accrued interest into 13,056,840 new
ordinary shares of 0.1 pence each at a price of 1.35 pence per share,
resulting on a gain on settlement of liability amounting to £154,941. On the
same year, certain outstanding loan with Black Swan FZE was settled though the
conversion of the £116,622 balance into 8,638,686 new ordinary shares at 0.1
pence east at the same price of 1.35 pence per share.
In 2021, the Group settled through issuance of shares certain tenements in
Western Australia for total consideration of £222,000. The purchase was
made in two share issuances consisting of 600,000 new ordinary shares of 0.1
pence each at a deemed issued price of 16 pence per share and 900,000 new
ordinary share of 0.1 pence each at a deemed issued price of 14 pence per
share.
14. Share capital - Group and Company
2021 2020
Authorised: £ £
8,000,000,000 Ordinary Shares of 8,000,000 8,000,000
£0.001 each
Allotted and called up:
2021 Number of shares 2021 Share capital 2021 Share premium 2020 Number of shares 2020 Share capital 2020 Share premium £
£ £ £
As at 1 January 149,969,321 2,967,390 8,943,833 2,845,878,980 2,845,879 5,408,775
Issued during the year before capital reorganisation - - - 20 - -
Shares before capital reorganization - - - 2,845,879,000 - -
Shares after capital reorganization - carried forward 149,969,321 2,967,390 8,943,833 28,458,790 2,845,879 5,408,775
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
14. Share capital - Group and Company - continued
2021 Number of shares 2021 Share capital 2021 Share premium 2020 Number of shares 2020 Share capital 2020 Share premium £
£ £ £
149,969,321 2,967,390 8,943,833 28,458,790 2,845,879 5,408,775
Shares after capital reorganization - brought forward
Issued during the year:
Placing of shares 10,000,000 10,000 1,390,000 59,722,221 59,722 2,390,278
Settlement of liability through shares (see note 13) 1,500,000 1,500 220,500 52,348,310 52,348 871,021
Exercise of warrants issued last year with shares issued this year 12,325,892 12,326 1,508,519 - - -
Exercise of warrants and shares issued this year (see note 16) - - - 9,440,000 9,440 273,760
As at 31 December 173,794,213 2,991,216 11,698,892 149,969,321 2,967,390 8,943,833
Share allotments and issuances during the year, including comparative, are
laid out below:
On 7 January 2020, twenty (20) new ordinary shares of 0.1 pence each in the
capital of the Company ("Ordinary Shares") have been issued at par for a total
consideration of 2 pence. The new Ordinary Shares have been issued to provide
a whole number of shares in preparation for the proposed Capital
Reorganisation, as announced on 19 December 2019.
The Company's existing issued share capital of 2,845,879,000 Existing Ordinary
Shares were consolidated on the basis of 100 Existing Ordinary Shares into one
Consolidated Share, and in turn, each Consolidated Share was sub-divided into
one New Ordinary Share of 0.1 pence and one Deferred Share of 9.9 pence. The
Capital Reorganisation application was made for the New Ordinary Shares to be
admitted to trading on AIM and AQSE at 8.00 am on 21 January 2020.
On 17 February 2020, the Company acquired all of the Company's outstanding
deferred shares of 9.9 pence each for nil consideration.
On 2 June 2020, the Company issued and allotted a total of 63,459,420 new
ordinary shares of 0.1 pence each which consisted of the following: (1)
22,222,221 Ordinary Shares for the raising of £300,000 (before expenses)
through a placing via Peterhouse Capital Limited. £100,000 of this placing
was subscribed by Black Swan FZE for 7,407,407 Ordinary Shares; (2) 13,014,002
Ordinary Shares was issued to settle the Directors and Management Fees of
£175,689; and (3) 28,223,197 Ordinary Shares for the conversion of the
outstanding loans with Sanderson Capital Partners Limited and Black Swan FZE
(receiving 8,638,686 Ordinary Shares) and discharged sundry creditors. This
resulted in the conversion of £292,890 for both loans and £88,124 for sundry
creditors.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
14. Share capital - Group and Company - continued
On 20 August 2020, the Company raised £400,000.00 before expenses, by placing
20,000,000 new Ordinary Shares at a price of 2 pence per share. The Company
also granted each 2 Funding shares subscribed by Funding Investors a warrant
to subscribe 1 New Ordinary Share in the capital of the Company exercisable
for a period of 12 months from admission of the Funding shares at the price of
3.0 pence per ordinary share. The warrants have an accelerator clause whereby
if the price of the Company's shares is sustained at greater than 3p for five
consecutive days the Company may choose to force execution of the warrants.
The Company is obliged to write to each Warrant holder providing 7 calendar
days' notice to exercise the warrants, after which each Warrant holder will
have up to 14 days to pay for the exercise of their Warrants, subject to the
terms of the Warrant Deed. The warrants will not be traded on an exchange.
On 24 September 2020, the Company announced that 94% of the warrants had been
exercised raising a further £283,200 and that the balance of the warrants had
expired.
On 5 October 2020, the Company acquired the Patersons Range Project (including
the Red Setter Project) and has issued 11,111,111 new ordinary shares of 0.1
pence each at a price of 3.3 pence per share equating to the total deemed
consideration as set out in the acquisition terms of £366,666.
On 10 December 2020, the Company raised a total of £1,750,000 gross by
placing 17,500,000 new ordinary shares of 0.1 pence each at a price of 10
pence per share through a private placement made by the Company to a series of
investors.
On 12 January 2021, the Company has received exercise notices for 8,622,188
warrants, attached to the share placement announced on 10 December 2020,
amounting to £1,034,662.56. This constitutes 98.54% of the warrants linked to
the placing and the balance have lapsed.
Pursuant to the exercise notices as detailed above, the Company has issued a
total of 8,622,188 new Ordinary Shares of 0.1 pence each from its block
listing authority of up to 8,750,000 new Ordinary shares, at a price of 12
pence per share.
On 3 March 2021, the Company issued a total of 600,000 new ordinary shares of
0.1 pence each to Alta Zinc Limited at a deemed issued price of 16 pence per
share which totals to £96,000 for the option to acquire the Cottesloe
Project.
On 20 May 2021, the Company issued 10,000,000 new ordinary shares of 0.1 pence
each at a price of 14 pence per share through a private placement made by the
Company to a series of investors to raise a total of £1,400,000 gross.
On 21 July 2021, the Company has received, notice to exercise warrants over a
total of 3,703,704 new ordinary shares of 0.1 pence each in the Company, which
will be issued at 3.3 pence per share. The Company has received the exercise
consideration of £122,222.
On 18 November 2021, the Company has issued 900,000 new ordinary shares of 0.1
pence each at a price of 14 pence per share which equates to £126,000,
following the completion of the Cottesloe Project acquisition. The Company has
also issued 600,000 warrants at an exercise price of 14 pence per share.
Ordinary shares carry a right to receive notice of, attend, or vote at any
Annual General and Extraordinary General Meetings of the company. The holders
are entitled to receive dividends declared and paid by the Company.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
15. Loans
As at 31 December 2021, there are no outstanding loans due from third parties.
2021 2020
Company £ £
Current
Amounts owed by subsidiary undertakings (note 21) 2,398,756 1,335,107
2,398,756 1,335,107
16. Share based payments
Details of the warrants and share options in issue during the year ended 31
December are as follows:
Number of Warrants / options 2021 Average exercise price 2021 Number of Warrants / options 2020 Average exercise price 2020
No £ No £
Outstanding at 1 January 14,305,555 0.0283 154,050,000 0.0099
Lapsed/terminated during the year (127,812) 0.1200 (154,610,000) 0.0101
Issued during the year 7,100,000 0.1738 24,305,555 0.0631
Exercised during the year (12,325,892) 0.0939 (9,440,000) 0.0300
Outstanding at 31 December 8,951,851 0.1040 14,305,555 0.0283
Fair value is measured by use of the Binomial Option Pricing Model with the
assumption of 5% future market volatility and a future interest rate of 1.3%
per annum based on the current economic climate. The fair value of share
warrants granted as at 31 December 2021 was £72,987 (2020: £nil).
17. Financial
instruments
The Group's financial instruments comprise of cash and cash equivalents,
borrowings and items such as trade payables which arise directly from its
operations. The main purpose of these financial instruments is to provide
finance for the Group's operations.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
17. Financial instruments - continued
Classification of financial instruments
All Group's financial assets are classified at amortised cost. All of the
Group's financial liabilities classified as other financial liabilities are
also held at amortised cost. The carrying value of all financial instruments
approximates to their fair value.
Fair values of financial instruments
In the opinion of the directors, the book values of financial assets and
liabilities represent their fair values.
18. Financial risk management
The Group's operations expose it to a variety of financial risks including
credit risk, liquidity risk, interest rate risk and foreign currency exchange
rate risk. The Directors do not believe the Group is exposed to any material
equity price risk. The policies are set by the Board of Directors.
Credit risk
Credit risk is the risk that a counterparty will be unable or unwilling to
meet the commitments that it has entered into with the Group. Credit risk
arises from cash and cash equivalents, and trade and other receivables
(including the Company's receivables from related parties). As for the cash
and cash equivalents, these are deposited at reputable financial institutions,
therefore management do not consider the credit risk to be significant.
The carrying amount of financial assets represents the maximum credit
exposure. The maximum credit exposure to credit risk at the reporting date was
£3,035,682 (2020: £2,025,919).
Based on this information, the directors believe that there is a low credit
risk arising from these financial assets.
Interest rate risk
The Group's interest-bearing assets comprise only cash and cash equivalents
and earn interest at a variable rate. The Group has a policy of maintaining
debt at fixed rates which are agreed at the time of acquiring debt to ensure
certainty of future interest cash flows. The directors will revisit the
appropriateness of the policy should the Group's operations change in size or
nature.
No sensitivity analysis for interest rate risk has been presented as any
changes in the rates of interest applied to cash balances would have no
significant effect on either profit or loss or equity.
The Group has not entered into any derivative transactions during the year
under review.
Liquidity risk
The Group actively maintains cash balances that are designed to ensure that
sufficient funds are available for operations and planned expansions. The
Group monitors its levels of working capital to ensure that it can meet its
debt repayments as they fall due. All of the Group's financial liabilities are
measured at amortised cost. Details of the Group's funding requirements are
set out in note 19.
Non-derivative financial liabilities, comprising loans payable, trade payables
and accruals of £135,752 (2020: £278,484) are repayable within 1-12 months
from the year end, apart from directors' fees. The amounts represent the
contractual undiscounted cash flows, balances due equal their carrying
balances as the impact of discounting is not significant.
Foreign currency exchange rate risk
The Group undertakes certain transactions in foreign currencies. Hence,
exposure to exchange rate fluctuations arises.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
18. Financial risk management - continued
The Group incurs foreign currency risk on transactions denominated in
currencies other than its functional currency. The principal currency that
gives rise to this risk at Group level is the Australian Dollar. At the year
end, the Group's exposure to the currency is minimal; accordingly, any
increase or decrease in the exchange rates relative to the functional currency
would not have a significant effect on the financial statements.
19. Capital management
The Group's objectives when managing capital are to safeguard the Group's
ability to continue as a going concern, to provide returns for shareholders
and to maintain an optimal capital structure to reduce the cost of capital.
The Group defines capital as being share capital plus reserves. The Board of
Directors monitor the level of capital as compared to the Group's commitments
and adjusts the level of capital as is determined to be necessary, by issuing
new shares. The Group is not subject to any externally imposed capital
requirements. There were no changes in the Group's approach to capital
management during the year.
20. Commitments
Annual expenditure commitments
In order to maintain current rights of tenure to exploration tenements, the
Group is required to perform minimum exploration work to meet the minimum
expenditure requirements specified by various authorities.
These obligations are subject to periodic renegotiations. These obligations
are not provided for in the financial statements and as at 31 December 2021
and 31 December 2021 are payable as follows:
2021 2020
£ £
Within one year 400,191 86,706
After one year but not more than five years 1,047,947 76,199
1,448,138 162,905
21. Related parties
The Company wholly owns Wishbone Gold Pty Ltd, an Australian entity that is
engaged in the exploration of gold in Australia. The Company's investment in
Wishbone Pty Ltd was £110,000 as at 31 December 2021 and 2020 The financial
and operating results of this subsidiary have been consolidated in these
financial statements.
Wishbone Gold Pty Ltd, as at 31 December 2021, has a loan outstanding from
Wishbone Gold Plc of the following amounts:
2021 2020
£ £
Outstanding at 1 January 734,905 418,010
Additions during the year 806,649 267,121
Translation adjustment - 49,774
Outstanding at 31 December 1,541,554 734,905
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
21. Related parties - continued
Wishbone Gold WA Pty Ltd, as at 31 December 2021, has a loan outstanding from
Wishbone Gold Plc of the following amounts:
2021 2020
£ £
Outstanding at 1 January 600,202 -
Additions during the year 257,000 600,202
Outstanding at 31 December 857,202 600,202
Precious Metals International Ltd., through the subsidiary Black Sand FZE as
at 31 December 2021, has a loan outstanding from Wishbone Gold Plc of the
following amounts:
2021 2020
£ £
Outstanding at 1 January - 378,077
Additions/ (Repayments) during the year - 12,048
Translation Adjustment - (14,862)
- (375,263)
Impairment provision recognised during the year - (375,263)
Outstanding at 31 December - -
The Company wholly owns Wishbone Gold Honduras Ltd. ("Wishbone Honduras"), a
company registered in Gibraltar. Solent Nominees Ltd previously held the
shares of Wishbone Honduras on behalf of the Company. During the year, the
title of the shares was transferred to the Company as the legal and beneficial
owner. In addition, Black Sand FZE transferred the title of the Group's
equipment to Wishbone Honduras in 2018.
The above company also has a loan outstanding from Wishbone Gold Plc of the
following amounts:
2021 2020
£ £
Outstanding at 1 January - 91,487
Assignment of loan - -
Impairment provision recognised during the year - (91,487)
Outstanding at 31 December - -
The intercompany loans are repayable on demand and do not attract any
interest.
Asian Commerce and Commodities Trading Co. Ltd. (ACCT), a company registered
in Thailand, is 49% owned by the Company. The fair value of the net assets of
this affiliate have been assessed as having no value, thus, not recognised in
both the Group and the Company's accounts. Management had the option to
increase its shareholdings to 95% in order to gain control but did not
exercise that option. Management believes that it has no control over this
entity and therefore, not consolidated in the group level.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
21. Related parties - continued
The Company wholly owns Wishbone Gold FZ-LLC, a company registered in the
United Arab Emirates. The purpose of this company is solely to hold bank
accounts in the U.A.E., as it simplifies payments that need to be made in that
country. The company does not trade and its sole asset is its bank account.
The cash in bank amounting to
£7,571 (2020: £1,425,281) of Wishbone Gold FZ-LLC (see note 8) which is a
wholly owned subsidiary of Wishbone Gold Plc has been recognised as other
receivable in the books of the Parent. This has been eliminated upon
consolidation and therefore forms part of the cash in bank account at Group
level.
The following summarises the fees incurred in respect of directors' and
officers' services for the year ended 31 December 2021 and 2020, and the
amounts settled by the Company by way of share issues and cash.
31 December 2021 Balance as at 1 January 2021 Charge Settled in shares Settled in cash Balance as at 31 December 2021
for the year
£ £ £ £ £
Richard Poulden - 168,108 - (168,108) -
Jonathan Harrison - 21,875 - (21,875) -
Alan Gravett - 21,875 - (21,875) -
Professor Michael Mainelli - 21,875 - (21,875) -
David Hutchins - 20,833 - (20,833) -
Total - 254,566 - (254,566) -
31 December 2020 Balance as at 1 January 2020 Charge Settled in shares Settled in cash Balance as at 31 December 2020
for the year
£ £ £ £ £
Richard Poulden 101,058 88,507 (79,597) (109,868) -
Jonathan Harrison 15,646 12,500 (20,854) (7,292) -
Alan Gravett 15,625 12,500 - (28,125) -
Professor Michael Mainelli 15,625 12,500 (20,833) (7,292) -
Total 147,954 126,007 (121,384) (152,577) -
In 2020, Richard Poulden's services are billed by Black Swan FZE, in which
Richard Poulden, a director of the Company, has an interest, for consultancy
services. The Company was billed by Black Swan FZE for various administrative
expenses of £28,033 (2021: £Nil) which Black Swan had paid on behalf of the
Company.
Jonathan Harrison's services are billed by Easy Business Consulting Limited,
in which Jonathan Harrison, a director of the Company, has an interest, for
consultancy services. Professor Michael Mainelli's services are billed by
Z/Yen Group Limited, in which Professor Michael Mainelli, a director of the
Company, has an interest, for consulting services.
On 26 October 2021, the Group provided a short-term loan to Valereum
Blockchain Plc, a related party under common management, amounting to
£500,000. The related loan, including accrued interest, presented as part of
Interest income in the consolidated statement of income, amounting to £5,000,
was subsequently collected on 08 November 2021
22. Ultimate controlling party
The directors believe that there is no single ultimate controlling party.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
23. Events after the reporting date
The following events took place after the year end:
On 7 March 2022, the Company announced that Heritage Clearing Survey has been
confirmed at Cottesloe and Red Setter Projects. The Cottesloe Project is
located 55 km south-southwest of the Telfer Gold Mine, and the Red Setter
Project is 13 km south-west of the Telfer Gold Mine, in the Patersons Range of
Western Australia. DDSR Drilling Australia operating for us who have unique
combination drills which can do both rotary RC and diamond drilling -
something that is necessary to drill through the upper sedimentary units
before hitting basement.
On 3 May 2022, the Company announced that it has signed an important drilling
contract of the Company's Red Setter Gold-Copper Project.
The first phase of the drilling contract is for 3,000m of drilling at Red
Setter, with the second phase of the contract for a further 7,000m of drilling
split between Wishbone's Red Setter Project and the Company's Cottesloe
Project to the south.
On 12 May 2022, the Company announced that a heritage survey was underway at
the Company's Red Setter Gold-Copper Project located 13 km south-west of the
Telfer Gold Mine, in the Patersons Range of Western Australia. The aim of this
survey was to increase access to peripheral targets, beyond those already
cleared. The heritage survey was set to move down to the Cottesloe Project
located 55 km south-southwest of the Telfer Gold Mine.
The heritage survey is expected to clear majority of the required areas for
the 10,000m of planned drilling.
On 16 May 2022, the Company announced that it has signed the drilling contract
for the Halo Prospect at its Wishbone II Gold-Copper Project in Northern
Queensland following the completion of the heritage surveys over all the
planned drill sites. The maiden drill program will consist of 2,000m of
reverse circulation holes to test surface gold and copper anomalies at depth
and look for continuous underground structures.
On 16 May 2022, the Company announced that a heritage survey has been
completed at the Company's Red Setter Gold-Copper Project. The survey did not
identify any heritage sites at Red Setter. The additional surveys have
increased access to peripheral targets beyond those already cleared, where
drilling was set to start in the next few weeks. The heritage survey team has
moved down to the Cottesloe Project located 55 km south-southwest of the
Telfer Gold Mine.
On 31 May 2022, the Company announced that the drill rig will mobilise from
Perth towards to the Company's Red Setter Gold-Copper Project.
On 7 June 2022, the Company announced that its maiden drill program has
started on Wishbone II Gold-Copper Project. The drill program consists of
2,000m of RC holes to test the numerous gold and copper surface anomalies at
depth and look for continuous underground structures.
On 16 June 2022, the Company has updated the market regarding the Wishbone II
Gold-Copper drill program in Northern Queensland. The drill programme
completed approximately 25% of the designed programme.
Initial Reverse Circulation (RC) drill samples have been transported back to
the Terra Search office in Queensland and are undergoing tests prior to being
sent to the lab for full analysis. The Initial tests confirmed the presence of
elevated copper, coincident with visible oxidised copper and primary
chalcopyrite mineralisation.
Terra Search's logging of the RC chips confirms the presence of a felsic, high
level, crowded porphyry intrusion often found associated with productive, high
level gold systems.
On 17 June 2022, the Company announced that drilling was underway at the
Company's Red Setter Gold-Copper Project.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
23. Events after the reporting date - continued
On 24 June 2022, the Company has updated the market regarding the Wishbone II
Gold-Copper drill program at its 100% owned Halo Project in North Queensland.
Drilling at Halo is proceeding to plan with Terra Search logging copper
mineralisation in the majority of holes drilled.
24. Availability of accounts
The full report and accounts are being posted on the Company's website,
www.wishbonegold.com.
25. Contingent liability
There is some risk that native title, as established by the High Court of
Australia's decision in the Mabocase, exists over some of the land over which
Wishbone Gold Pty and Wishbone Gold WA hold tenements or over land required
for access purposes. Wishbone has historically had good relationships with
Indigenous Australians and the board will do their utmost to continue this.
Nonetheless we have to state that the Group is unable to determine the
prospects for success or otherwise of the future claims and, in any event,
whether or not and to what extent the future claims may significantly affect
Wishbone Gold or its projects.
There are no contingent liabilities outstanding at 31 December 2021 and 31
December 2020.
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