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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Kodal Minerals Plc | LSE:KOD | London | Ordinary Share | GB00BH3X7Y70 | ORD 0.03125P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.005 | 1.15% | 0.44 | 0.43 | 0.45 | 0.44 | 0.435 | 0.435 | 34,418,689 | 08:20:08 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Misc Nonmtl Minrls, Ex Fuels | 0 | -1.46M | -0.0001 | -44.00 | 89.06M |
TIDMKOD
RNS Number : 4802L
Kodal Minerals PLC
06 September 2023
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the UK Market Abuse Regulations
Kodal Minerals Plc / Index: AIM / Epic: KOD / Sector: Mining
Kodal Minerals plc
("Kodal" or the "Company" and together with its subsidiaries, the "Group")
Final Results & Notice of Annual General Meeting
Kodal Minerals, the mineral exploration, and development company focused on lithium and gold assets in West Africa, announces its final results for the year ended 31 March 2023.
The Company's Annual Report and Accounts will be made available on the Company's website www.kodalminerals.com sh ortly. The Company's annual general meeting ("AGM") will be held at 11:00am on 29 September 2023 at Fieldfisher LLP, 9th Floor, Riverbank House, 2 Swan Lane, London EC4R 3TT.
Operational Highlights
Bougouni Lithium Project, Mali ("Bougouni" or the Project")
-- US$117.75 million funding package agreed with Hainan Mining Co. Limited ("Hainan") a subsidiary of Fosun International Limited ("Fosun") and its industrial platform for mining and resources:
o US$65 million reserved to fully fund the cost of the Dense Media Separation (DMS) Project targeting delivery of first production within 12 months of receipt of funds.
o Additional funds will be deployed to:
-- increase the Bougouni Lithium Project's JORC compliant resource inventory currently at 21Mt @ 1.11% Li2O and extend the mine life; and
-- Support the development of the flotation plant expansion project which has the potential to increase spodumene production from 125,000 to over 300,000tpa and deliver life of mine (8.5 years) revenue exceeding US $2.15bn.
-- DMS Project development scenario presented:
o Low capital development cost estimated at US$65 million;
o Payback of two months from commencement of operations;
o NPV(7%) of approximately US$420 million post tax;
o Over 130,000tpa production of spodumene concentrate with an initial 4-year mine life;
o DMS operation revenue exceeds US$1.05bn in less than four years based on broker consensus pricing averaging US$2,080 per tonnes.
-- Bougouni is fully permitted for development and construction once funding package is completed - long stop date for funding package is 30 September 2023.
Gold Portfolio
-- Progress towards establishing a maiden resource at Niéllé, in northern Côte d'Ivoire, based on an identified anomalous trend extending over 4.5km and which remains open along strike.
-- Intercepts from Niéllé include: 26m @ 1.95 g/t Au from 32m, and 26m @1.79 g/t Au from 108m.
-- Further resource definition activities at Fatou, in southern Mali, which has a historical resource estimate of 350 koz Au.
-- Recent drill intercepts from Fatou include 23m @ 1.63 g/t Au from 82m, and 6m @ 1.49 g/t Au from 40m.
Financial and Corporate Highlights
-- Group loss before other comprehensive income for the year of GBP1,461,000 (2022: GBP903,000). -- 27% increase in exploration and evaluation expenditure of GBP3,227,000 (2022: GBP2,547,000).
-- 37% increase in the value of the gold projects in Mali and Cote d'Ivoire to GBP3,306,000 (2022: GBP2,411,000).
-- 24% increase in value of the lithium projects in Mali to GBP11,216,000 (2022: GBP9,031,000). -- Cash balance of GBP545,000 as at 31 March 2023 (2022: GBP1,046,000).
-- Post period end, in August 2023, a conditional prepayment of US$3,500,000 was received as part of the funding package with Hainan.
-- Cash balance of GBP1,984,000 as at 31 August 2023
Commenting on the results, Bernard Aylward, CEO of Kodal Minerals said:
" We are now on the final furlong with our pre-construction activities at Bougouni and are well positioned to break ground and start building our mine once our funding transaction with Hainan has been finalised in the coming weeks. We have been working extremely closely with the teams at Hainan and Fosun over recent months, and we are grateful for their continued support as we look to close out the final conditions precedent of our joint agreement. All parties are eager to start construction work and we are confident that this can now be expected in short order, as we look to deliver first production from our DMS plant in 2024.
"The coming weeks and months are set to be extremely active for us and I look forward to keeping shareholders updated as we begin our transition from developer to lithium producer."
For further information, please visit www.kodalminerals .com or contact the following:
Kodal Minerals plc Bernard Aylward, CEO Tel: +61 418 943 345 Allenby Capital Limited, Nominated Adviser Jeremy Porter/Vivek Bhardwaj/Nick Harriss Tel: 020 3328 5656 SP Angel Corporate Finance LLP, Financial Adviser & Joint Broker Tel: 020 3470 John Mackay/Adam Cowl 0470 Canaccord Genuity UK LLP, Joint Broker James Asensio/Gordon Hamilton Tel: 020 7523 4680 St Brides Partners Ltd, Financial PR Tel: 020 7236 Susie Geliher/Ana Ribeiro 1177
CHAIRMAN'S STATEMENT
I am pleased to present the Annual Report of Kodal Minerals plc ("Kodal" or the "Company" and together with its subsidiaries, the "Group") for the year ended 31 March 2023.
We had two main pillars to our strategy during the year - firstly, to demonstrate that our Bougouni Lithium Project ("Bougouni Project", "Bougouni" or the "Project") is a high-quality asset with the requisite operational and commercial attributes to bring to production, and secondly, to agree a financing package to bring that to realisation. I am very proud to say that our team has succeeded on both counts. The Company had many parties interested in negotiating for participation in the future of the Bougouni Lithium Project. We are very pleased to have secured an excellent agreement that provides full funding for the development of a mining operation and additional support for the ongoing exploration and development of our highly prospective and extensive land position in southern Mali. The final piece of the agreement is a direct investment into Kodal Minerals Plc that provides funding for the Company to undertake significant growth and assessment of additional opportunities.
Since the acquisition in 2016 of Kodal's most advanced asset, the Bougouni Lithium Project in southern Mali, the Kodal team has worked determinedly to prove up a sizeable resource, undertake test work to confirm an attractive spodumene product for offtake partners, and position itself to be one of the first West African lithium producers by securing key permits early in the development process. This committed and multi-stranded work programme has ensured that Kodal has remained at the front of the pack.
Our ambition of becoming a lithium producer in the near-term is now a reality thanks to the US$117.75 million financing agreement between the Company, Kodal Mining UK Limited ("KMUK") and Hainan Mining Co. Limited ("Hainan") and its wholly owned UK-incorporated subsidiary Xinmao Investment Co. Limited ("Xinmao", and together the "Hainan Group") announced on 19 January 2023. Hainan is a subsidiary of Fosun International Limited ("Fosun") and is the industrial platform for mining and resources within Fosun. Kodal has welcomed the Hainan Group our partners for the development of the Bougouni Lithium Project and we are continuing to work together to ensure conditions precedent can be satisfied. Together the parties are fully committed to the completion of the funding transaction as soon as possible.
Kodal and the Hainan Group have spent a lot of time working together and finalising plans for the development of the project with activities including additional metallurgical testwork, engineering planning and review and finalisation planning for the proposed Dense Media Separation ("DMS") development. This team development will stand the project in good stead when financing is complete and the actual groundwork commences on site.
As shareholders will be aware, countries and major end users around the world are seeking to diversify lithium supply chains given the critical role the mineral plays in the energy transition. Research suggests that in Europe alone, 38 new gigafactories are being developed which could total 400-700 GWh of annual battery manufacturing capacity by the middle of this decade. To meet this ambitious target, new sources of lithium are absolutely critical.
Set against this dramatic demand backdrop, lithium prices have surged over the past two years, rising tenfold, then correcting in the first half of 2023. The lithium spot price has retracted from the very rapid highs and some analyst and reporting headlines may have certainly concerned investors. Whilst a lithium price of over $6,000/t of spodumene concentrate containing up to 6% Lithium Oxide ("Li2O") would make Bougouni even more profitable, it should be reassuring to shareholders that the Kodal team took a conservative approach to its pricing forecasts, factoring a life of mine average concentrate price for the DMS development scenario of US$2,080/t, which still delivers payback within three months. The significant upside to this should be clearly evident, particularly when, at the date of writing, the 6% Li2O spodumene concentrate price of US$3,600/t FOB is reported.
It is into this strong market, which analysts believe will continue to tighten over the mid- to long-term as demand outstrips new supply, we look to bring the Bougouni Lithium Project into production. We have an ambitious schedule for production, targeting commissioning and first production in 2024.
The economic fundamentals of the initial DMS development that define the phase 1 development of the project are highly compelling. However it is also important to recognise the future value uplift driven firstly by the development of the larger phase 2 spodumene flotation plant that significantly expands the spodumene concentrate production, and secondly by the focused, well-funded, exploration and expansion drilling that is supported by the financing package.
Kodal is fully focused on achieving first production through our DMS operation at Bougouni. Kodal will be in a great position following completion of the financing package with our partners the Hainan Group and the Board has longer-term growth plans for the Company leveraging our West African knowledge, our technical expertise and our ability to acquire, explore and develop new exploration projects.
I would like to take this opportunity to thank our shareholders for their long-term support and interest in the Company, and also to the Kodal team for their diligence, commitment and tenacity in achieving our goals.
Robert Wooldridge
Non-executive Chairman
5 September 2023
OPERATIONAL REVIEW
Kodal has developed a portfolio of exploration and development assets in West Africa, including its most advanced asset, the Bougouni Lithium Project in southern Mali, and a number of gold exploration assets in Mali and Côte d'Ivoire. Kodal's management has continued to ensure that all government compliance, reporting and fees are kept up to date and all concessions are retained in good standing.
Mining Licence and Exploration Concession Review
Kodal's most advanced asset, the Bougouni Lithium Project, is located in southern Mali. Kodal was granted the Foulaboula Permis d'Exploitation number No2021-0774/PM-RM ("Mining Licence") in November 2021. This covered the proposed open-pit mining and processing operation at Bougouni, making the Project fully permitted for development and construction.
The Mining Licence is valid for an initial 12-year term and renewable in ten-year blocks until all resources are depleted. The Mining Licence is granted under the 2019 Mining Code and extends over a 97.2 square km area that will be a focus for Kodal's exploration programme to delineate further resources to prolong the Bougouni Lithium Project mine life.
Bougouni Lithium Project - Mining Licence details:
Tenements Country Kodal Economic Project / Validity Ownership Joint Venture Foulaboula Mali 100% ownership Bougouni Lithium Mining Licence Ndeg2021-0774/PM-RM (prior to Mali Project of November 5 2021. State's participation) Permit is valid / 10% free for an initial 12 carried + up years, renewable to 10% contributing in periods of 10 interest years until depletion of the resources -------- ------------------------ ----------------- -----------------------------------
As detailed above, Kodal announced the financing package with the Hainan Group on 19 January 2023. At completion of the financing package, the Hainan Group will acquire a 51% shareholding in Kodal's newly incorporated UK subsidiary, Kodal Mining UK Limited ("KMUK"), the company formed to be the developer of the Bougouni Lithium mine through its 100% owned Malian subsidiary mining company Les Mines de Lithium de Bougouni ("LMLB").
On completion of the financing package with the Hainan Group, Kodal will have economic interest of 49% of the Foulaboula mining licence prior to Mali State's participation.
Table of Concessions - Kodal Lithium Concessions in Mali:
Tenements Country Kodal Economic Project / Validity Ownership Joint Venture Dogobala Mali 100% economic Bougouni Lithium Licence valid and interest Project in good standing. Arrêté number 2018-1115 granted on 13 April 2018 for initial 3-year period, with option for 2 extensions of 2 years validity each Application for first renewal has been lodged and all fees paid. Renewal approval pending -------- ------------------- ----------------- ---------------------------- Sogola Nord Mali 100% economic Bougouni Lithium Licence valid and interest Project in good standing. Arrêté number 2020-0072 granted 22 January 2020 for an initial 3-year period, with option for 2 extensions of 2 years validity each. Application for first renewal has been lodged, renewal approval is pending. Licence area modified during 2020 to account for the future Foulaboula Mining Licence. -------- ------------------- ----------------- ---------------------------- Fariédélé Mali 100% economic Bougouni Lithium Licence valid and interest Project in good standing. Arrêté number 2020-0073 granted 22 January 2020 for an initial 3-year period, with option for 2 extensions of 2 years validity each. Application for first renewal has been lodged, renewal approval is pending. Licence area modified during 2020 to account for the future Foulaboula Mining Licence. -------- ------------------- ----------------- ---------------------------- Mafélé Mali 1.4% gross Bougouni West Transaction with Ouest royalty from Lithium Leo Lithium Completed future revenue and right to be issued an equity carried interest of 15% in any
exploitation company set up for the Concession. -------- ------------------- ----------------- ---------------------------- N'Kéméné Mali 100% Economic Bougouni West Final transaction Ouest interest Lithium with Leo Lithium On completion pending renewal of Bougouni of N'Kéméné West transaction Ouest concession retained interest by Mali Government will be: 1.4% gross royalty from future revenue and right to be issued an equity carried interest of 15% in any exploitation company set up for the Concession. -------- ------------------- ----------------- ----------------------------
The Bougouni Lithium Project concessions surround the Foulaboula mining licence and will be explored for additional pegmatite hosted resources that can be added to the mining inventory. The concessions are all in good standing, and exploration completed to date by Kodal has indicated priority sites for additional exploration within the concessions.
Kodal reached an agreement post period end to sell its Bougouni West concessions, which do not form part of the main Bougouni Project, to ASX listed Leo Lithium Ltd ("Leo Lithium") for a total cash consideration of GBP2.5 million subject to all agreements being executed, with Kodal to receive GBP2.0 million and the original concession holder Bambara Resources SARL ("Bambara") to receive GBP0.5 million.
Table of Concessions - Kodal Gold Concessions in West Africa:
Tenements Country Kodal Economic Project / Validity Ownership Joint Venture Boundiali Côte 100% direct Gold Exploration Licence application d'Ivoire ownership submitted and in process. (under application) Application updated during 2020 and application remains in good standing. ---------- ---------------------- ------------------ ------------------------------ Korhogo Côte 100% direct Gold Exploration Licence valid and d'Ivoire ownership in good standing. Renewal granted on 31 March 2020 for a 3 year-term. Application for extension has been lodged. ---------- ---------------------- ------------------ ------------------------------ Dabakala Côte 100% direct Gold Exploration Licence valid and d'Ivoire ownership in good standing. Renewal granted on 31 March 2020 for a 3 year-term. Application for extension has been lodged. ---------- ---------------------- ------------------ ------------------------------ Niéllé Côte 100% direct Gold Exploration Licence valid and d'Ivoire ownership in good standing. Initial licence expired on 7 January 2017, and Renewal decree received on the 28 February 2018 for a 3 year- period. Second Renewal decree received 18 December 2020 for a 3 year-period. ---------- ---------------------- ------------------ ------------------------------ Tiebissou Côte 100% direct Gold Exploration Licence valid and d'Ivoire ownership in good standing. Initial term expired 30 September 2018. An application for renewal has been lodged, fees paid and approved. Renewal decree is pending signature. ---------- ---------------------- ------------------ ------------------------------ M'Bahiakro Côte 100% direct Gold Exploration Licence application d'Ivoire ownership submitted and in process. (under application) Application updated during 2020 and application remains in good standing. ---------- ---------------------- ------------------ ------------------------------ Djelibani Mali 100% direct Gold Exploration Licence valid and Sud ownership in good standing. Arrêté number 2021-5133/MMEE-SG granted on 28 December 2021 for an initial 3 year-period, with option for 2 extensions of 3 years validity each. All taxes have been paid. ---------- ---------------------- ------------------ ------------------------------ Nangalasso Mali 100% direct Nangalasso Nangalasso arrêté ownership Project completed second renewal following Gold Exploration on 4 February 2021. completion A new Convention application of option covering the same payments permit has been lodged with the DNGM and is awaiting approval. ---------- ---------------------- ------------------ ------------------------------ Sotian Mali Completed Nangalasso Arrêté number option agreement Project 2018-1925 granted and is 100% Gold Exploration on 12 June 2018 for beneficial initial 3 years period,
owner of concession. with option for 2 extensions of 3 years validity each First renewal has been approved ---------- ---------------------- ------------------ ------------------------------ Tiedougoubougou Mali Kodal completed Nangalasso Arrêté number option agreement Project 2018-3319 granted and is 100% Gold Exploration on 4 September 2018 beneficial for initial 3 years owner of concession period, with option for 2 extensions of 3 years validity each. Application for first renewal has been lodged and all fees paid. Renewal approval pending ---------- ---------------------- ------------------ ------------------------------ Fininko Mali Held through Fatou Project Licence in good standing. option agreement Gold Exploration First renewal granted giving right by Arrêté to acquire number 2021-2876/MMEE-SG 100% ownership of 6 August 2021 for a period of 3 years. ---------- ---------------------- ------------------ ------------------------------ Foutiere Mali Held through Fatou Project Licence in good standing. option agreement Gold Exploration Arrêté number giving right 2017-0170/MM-SG of to acquire 2 February 2017. 100% ownership Application for second three-year renewal has been lodged and all fees and taxes have been paid. Renewal approval pending. ---------- ---------------------- ------------------ ------------------------------
Bougouni Lithium Project Development Status
The Bougouni Project is now approaching construction readiness following the granting of an Environmental Permit in November 2019, a large-scale Mining Licence in November 2021 and securing a financing package (as announced on 19 January 2023).
The Company is implementing a two-phase approach at Bougouni; the first comprising a DMS plant and the second, a larger flotation plant.
The DMS development scenario, announced in September 2022, demonstrated highlights including:
-- Capital development cost for the DMS plant and all associated infrastructure and commencement of mining is estimated at US$65 million;
-- Estimated NPV@7% of approximately US$557 million (US$420 million post-tax);
-- A payback period of three months (based on full equity financing) from commencement of operations.
The DMS option is based on:
-- Processing material from the Ngoualana deposit feeding 1Mtpa of lithium ore to a DMS processing plant;
-- Utilising a conventional circuit to maximise spodumene recovery of over 130,000 tonnes per annum of spodumene concentrate; and
-- An initial four-year mine life.
The DMS operation has a revenue forecast expected to exceed US$1.05 billion in less than four years, based on prevailing broker consensus pricing averaging US$2,080 per tonne (FOB basis). The DMS operation targets production of a 5.5% Li2O spodumene concentrate product which is consistent with other producers currently active in the market.
The future expansion of Bougouni is expected to continue with the construction and commissioning of a down-stream flotation plant expected to be supported by utilising the DMS plant cashflows in order to exploit the resources at Sogola-Baoulé and Boumou, as well as longer term exploration prospects.
The updated Feasibility Study for the flotation plant, announced in June 2022, confirmed a very robust project with key metric highlights including:
-- NPV@7% of US$760M (US$567M post-tax) compared to US$293M (US$201M post tax) in the original Feasibility Study.
-- Life of mine (8.5 years) revenue exceeding US$2.145 billion based on an average sell price of US$1,060 per tonne (FOB basis).
-- C1* cash costs of US$362 per tonne of 6% Li2O spodumene concentrate ("SC6"), and costs of US$474 per tonne including transportation and other selling costs.
-- Total production of 2,024,000 tonnes with an annual average production of 238,000 tonnes.
-- Capital cost of US$154 million.
* C1 cash cost includes all mining, processing and all general and administration costs per tonne sold, and additional to that the costs of transport to port and associated selling costs
Bougouni Lithium Project Resource Expansion
In March 2023, the Company launched a drilling campaign across the Boumou, Bougouni South and Ngoualana prospects with the objective of enhancing the current JORC Resource inventory and further extending the mine life of the asset.
Post period end, the Company reported assay results from the drilling programme which confirmed the identification of further high-grade mineralisation and the extension of wide high-grade pegmatite zones.
Highlights included the confirmation of further wide, high-grade extensions at the Boumou prospect with significant results including 24m at 1.13% Li2O from 55m (including 8m at 1.37% Li2O from 55m). The Boumou prospect has been declared as a high priority target for further drilling to extend and define the pegmatite bodies to allow a new resource estimate to be completed.
Results from the Bougouni South target drilling programme also returned significant lithium mineralised intersections including 11m at 1.14% Li2O from 71m and 6m at 1.48% Li2O from 101m. This drilling confirmed extensive pegmatite veins at Bougouni South that require additional exploration including diamond drilling to determine structural controls and extent of mineralisation.
At the Ngoualana prospect, diamond drill holes were completed along the strike of the orebody to obtain variability test samples and returned wide high-grade intersections up to 37m at 2.17% Li2O from 3m to end of hole in drill hole MT004.
Off-take Arrangements
Kodal agreed a binding term sheet with Suay Chin in March 2017 which contemplates that the parties will negotiate an extended off-take agreement for between 80% and 100% of the spodumene product produced at Bougouni for a period of three years. The off-take term sheet sets out certain agreed off-take principles that are to be included in the off-take agreement including the parties agreeing to buy and sell the contract quantity as well as the formal agreement including a right to match any third party off-take terms agreed for a period of three years following the expiry of the formal agreement. Whilst a formal agreement has not been entered into, Suay Chin retains the first right of refusal for a period of three years from first production of product from Bougouni whereby Kodal may not enter into any agreement with a third party to sell more than 20% of future production from Bougouni without having first offered to sell the production to Suay Chin on the terms offered by the third party.
As part of the financing package announced on 19 January 2023, the Company has agreed a 12-month exclusivity period during which Kodal and the Hainan Group will seek to negotiate an off-take agreement over that portion of spodumene production from Bougouni which KMUK is able to sell without breaching its prior agreement with Suay Chin or triggering any existing rights of first refusal.
Gold Exploration Projects
The primary focus during the year under review has been advancing the technical and corporate aspects of project development at the Bougouni Lithium Project, however the Company remains committed to the future exploration and resource development of its gold properties.
In particular, the Board will focus on the progression towards establishing a maiden resource in the near-term for Niéllé, in northern Côte d'Ivoire, where we have identified an anomalous trend extending over 4.5km and which remains open along strike. Intercepts from previous drilling include: 26m @ 1.95 g/t Au from 32m, and 26m @1.79 g/t Au from 108m. Of equal importance is Fatou, in southern Mali, which has a historical resource estimate of 350 koz Au. Recent drill intercepts from Fatou include 23m @ 1.63 g/t Au from 82m, and 6m @ 1.49 g/t Au from 40m.
Importantly, Kodal will be well funded to advance these gold properties without further dilution to shareholders following Hainan's subscription for new shares in Kodal, which will deliver US$17.75 million in new capital. Some of these funds will be directed towards a comprehensive exploration programme across our priority targets in Côte d'Ivoire and Mali, as well as the assessment of new exploration and development opportunities in West Africa.
A draft budget has been prepared to undertake a major exploration campaign at Fatou, Nielle and Dabakala with the aim of defining significant new gold resources. The exploration programmes will include detailed geological review, geochemical sampling, geophysical surveys, and extensive drilling campaigns.
Bernard Aylward
Chief Executive Officer
5 September 2023
FINANCE REVIEW
Results of operations
For the year ended 31 March 2023, the Group reported a loss before other comprehensive income for the year of GBP1,461,000, including share-based payment costs of GBP517,000 (2022: GBP343,000), compared to a loss of GBP903,000 in the previous year. Administrative expenses have increased compared to last year as corporate activity has increased with negotiations surrounding the future of the Bougouni Project. The Group has continued to run the offices in Mali and Côte d'Ivoire and significant additional exploration activity for both gold and lithium was undertaken during the year. Further information is provided in the Operational Review above.
During the year, the Group invested GBP3,227,000 (2022: GBP2,547,000) in exploration and evaluation expenditure on its various projects and GBP513,000 of expenditure on the Bougouni West project was reclassified as held for sale. As a result, the carrying value of the Group's capitalised exploration and evaluation expenditure increased from GBP11,442,000 to GBP14,522,000 after taking account of the effects of foreign exchange. At 31 March 2023, after taking account of the effects of foreign exchange, the carrying value of the gold projects in Mali and Côte d'Ivoire was GBP3,306,000 (2022: GBP2,411,000) and of the lithium projects in Mali was GBP11,216,000 (2022: GBP9,031,000).
Cash balances as at 31 March 2023 were GBP545,000, a decrease of GBP501,000 on the previous year's level of GBP1,046,000. Net assets of the Group at the year-end were GBP14,883,000 (2022: GBP12,091,000).
Financing
On 4 May 2022 the Company announced that it raised GBP3,000,000 (before expenses) via a subscription for 130,142,857 shares and an oversubscribed placing of 941,285,712 shares at a price of 0.28 pence per Placing Share (the 'Placing'). The funds raised supported Kodal in the continuing development and preparation for financing and construction of its flagship Bougouni Lithium Project in Mali.
On 3 August 2023, the Company announced the prepayment of US$3,500,000 of the subscription agreement entered into as part of the funding package with Hainan. The prepayment is repayable or convertible into new ordinary shares of the Company should the funding package not proceed. The Company has sole discretion over the use of the funds including for general working capital.
Going concern and funding
The Group has not earned revenue during the year to 31 March 2023 as it is still in the exploration and development phases of its business. The operations of the Group are currently being financed from funds which the Company has raised from the issue of new ordinary shares. On 31 August 2023 the group has cash at bank amounting to GBP1,984,000.
In January 2023 the Group signed binding agreements with Hainan to enter into a joint venture to develop the Bougouni Lithium Project. Under these agreements, Hainan will subscribe for equity in the joint venture vehicle amounting US$100 million; they will also subscribe for equity of US$17.75m in the ordinary shares of Kodal Minerals Plc, plus the immediate repayment to the Company for historical development expenses amounting to US$5.66m, the agreements together being the Financing Transaction.
Completion of the Financing Transaction is subject to meeting various conditions precedent including Hainan receiving formal Government approval for the investment and Kodal completing a restructure of its Mali subsidiary holdings. At the date of this report, it is noted that Hainan has received all necessary approvals from the Chinese Government authorities to allow it to complete its funding and investment including "Overseas Project Investment Filing Certificates" from the Hainan Province National Development and Reform Commission ("NDRC") and Company Overseas Investment Certificate from the Department of Commerce of Hainan Province.
Kodal has continued with the restructuring of its subsidiary companies and confirms that the new mining company Les Mines de Lithium de Bougouni has been fully registered and the Mali DNGM notified that this new company will be the owner and operator of the mining licence. In addition, the Company has completed the restructure of Future Minerals SARL such that all of Kodal's lithium assets in Mali are now 100% owned by Kodal Mining UK Limited (the joint venture vehicle for Kodal and Hainan to develop the Bougouni Lithium project). Kodal is continuing to work with the relevant authorities to finalise all regulatory matters to allow completion of the Financing Transaction.
Both Hainan and the Company remain committed to the Financing Transaction and Hainan has recently advanced to the Company a US$3.5m prepayment on its subscription for ordinary shares in the Company. The long stop date for finalising the conditions precedent has been extended several times by mutual consent and the parties continue to work together to expedite the completion of the Financing Transaction at the earliest opportunity.
The Group has prepared cash flow forecasts for the period ending 30 September 2024 under several scenarios, including on the basis that the Hainan transaction completion is delayed for several more months and also that the Hainan transaction does not proceed. Under both of these scenarios the Group will require further funding within the foreseeable future.
The directors are confident of raising sufficient funding to cover ongoing expenditure and overheads, based on indications from Hainan that they would make further prepayments available, and/or the Group will be able to raise further equity given the quality of the Bougouni lithium project, continuing interest from potential investors and finance providers, and forecasts showing continuing strong demand and pricing for spodumene and lithium. Although the Group has been successful in the past obtaining additional funding, there is no assurance that it will be able to do so in the future or that such arrangements will be on terms advantageous to the Group.
These conditions indicate the existence of a material uncertainty that may cast doubt on the Group's ability to continue as a going concern. The consolidated statements for the year ended 31 March 2023 have been prepared on a going concern basis as the Board is of the opinion that the group will be successful in completing the Hainan transaction in the near future and/or securing further funding in order to meet its liabilities as they fall due for at least 12 months from the date of signing these accounts. Accordingly, these consolidated financial statements do not include any adjustments to the recoverability and classification of recorded assets and liabilities and related expenses that might be necessary should the Group be unable to continue as a going concern.
Utilising key performance indicators ("KPIs")
The following KPIs are used by the Group to assist it in monitoring its cash position and assessing costs and exploration and development activities:
KPI 31 March 2023 31 March 2022 Cash and cash equivalents (a) GBP545,000 GBP1,046,000 Administrative expense (b) GBP944,000 GBP541,000 Exploration and evaluation expenditure GBP3,227,000 GBP2,547,000 (c)
The directors have provided more information on the state of the Group's financing and operational activity above.
a) 'Cash and cash equivalents' is used to measure the Group's financial liquidity. Cash and cash equivalents have decreased by GBP0.5 million in the year as the Group has incurred a higher level of exploration and evaluation expenditure than in prior year.
b) 'Administrative expenses' is used to measure the Group's administrative costs and operating results. Administrative expenses for the year were GBP0.9 million, an increase of GBP0.4 million compared to the previous year. Group corporate activity has increased this year with negotiations surrounding the future of the Bougouni Project. The Group has also continued to run the offices in Mali and Côte d'Ivoire.
c) 'Exploration and evaluation expenditure' is used to measure expenditure on the Group's gold and lithium projects. Exploration and evaluation expenditure in the year was GBP0.4 million higher than prior year as additional exploration activity for both gold and lithium was undertaken during the year.
Financial risk management objectives and policies
The Group's principal financial instruments comprise cash and trade and other payables. It is, and has been throughout the year under review, the Group's policy that no trading in financial instruments shall be undertaken. The main risks arising from the Group's financial instruments are liquidity risk, price risk and foreign exchange risk. The Board reviews and agrees policies for managing each of these risks and they are summarised below.
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash reserves to fund the Group's exploration and operating activities. Management prepares and monitors forecasts of the Group's cash flows and cash balances monthly and ensures that the Group maintains sufficient liquid funds to meet its expected future liabilities. The Group intends to raise funds in discrete tranches to provide sufficient cash resources to manage the activities through to revenue generation.
Price risk
The Group is exposed to fluctuating prices of commodities, including gold and lithium, and the existence and quality of these commodities within the licence and project areas. The Directors will continue to review the prices of relevant commodities as development of the projects continues and will consider how this risk can be mitigated closer to the commencement of mining.
Foreign exchange risk
The Group operates in a number of overseas jurisdictions and carries out transactions in a number of currencies including Sterling, CFA Franc, US dollars and Australian dollars. The Group does not have a policy of using hedging instruments but will continue to keep this under review. The Group operates foreign currency bank accounts to help mitigate the foreign currency risk.
PRINCIPAL RISKS AND UNCERTAINTIES
The Group is exposed to a number of risks which it seeks to mitigate as set out in the table below:
Risk Comment and Mitigating Actions Exploration and Development Risk The Group is a mineral exploration There is no assurance that the Group's company and the success of the exploration and potential future Company is dependent on the discovery development activities will be successful, and/or acquisition of Mineral and statistically few properties Reserves and Mineral Resources that are explored are ultimately and the successful development developed into profitable producing of mines therefrom. Significant mines. risk exists within technical, The Group ensures that there is regular legal and financial aspects of review of projects, expenditure and the exploration for and the development exploration activity to maintain of mines, which may have an adverse focus on targets and ensure best effect on the Group's business. possible information in the decision-making process to focus resources and expenditure upon key exploration and development targets. ---------------------------------------------- Reliability of Mineral Resources and Mineral Reserves The Group has reported Mineral The Mineral Resource estimates are Resources for its Bougouni Lithium prepared by third party consultants project in West Africa. Any estimates who have considerable experience will be based on a range of assumptions, and are certified by appropriate including geological, metallurgical bodies. and technical factors; there can be no assurance that the anticipated Mineral Resources are reported as tonnages or grades will be achieved. general indicators and should not be interpreted as assurances of minerals or the profitability of current or future operations. ---------------------------------------------- Licensing and Title Risk The Group's exploration and future The Group complies with existing development opportunities are laws and regulations. dependent upon maintaining clear tenure and access to licences The Group ensures that the regulatory as well as ensuring the relevant reporting and the government compliance operation licences, permits and requirements for each licence are regulatory consents are valid. met. The licences and regulatory permits may be withdrawn or made subject There is a risk that negotiations to limitations. with a government in relation to the grant, renewal or extension of The granting of licences and permits a licence may not result in the grant, are a practical matter subject renewal or extension taking effect to the discretion of the applicable prior to the expiry of the previous government or government office. licence period, and there can be The interpretations, amendments no assurance of the terms of any to existing laws and regulations, extension, renewal or grant. or more stringent enforcement of existing laws and regulations The Group regularly monitors the could have a material adverse good standing of its licences. impact on the Group's results of operations and financial condition. A new Mining Code has passed before the Republic of Mali Assemblie Nationale. The Company's licences have been granted under the previous Mining Code (June 21 2012 (modified)) and remain subject to these conditions. In addition, future Mining Licence applications will remain subject to the 2012 Mining code unless the Company specifically request a variation to the new code. ---------------------------------------------- Political Risk . The Group has significant activities in Mali and C te d'Ivoire in West The Transition Government installed Africa. The success of the Group following the military coup of 24 will be influenced by the legal, May 2021 has continued to confirm political and economic situation proposed election timelines of February in Mali, C te d'Ivoire and the 2024 to return Mali to a democratically wider African region. Countries elected Government. A referendum in the region have experienced held in June 2023 allowed for changes political instability and economic to the Mali constitution. uncertainty in the past. government policy in the countries Mali adopted a new Mining Code in in which the Group operates can August 2023 with a key element being be unpredictable, and the institutions the potential for the Government of government and market economy to purchase up to an additional 20% may be unstable and subject to interest in a project (previously rapid change, which may result 10% interest). in a material adverse effect on the Group's operations. In general, the security risk in Mali remains high. The United Nations The renewal of exploration and voted to end the peacekeeping mission exploitation licences is an area in June 2023 with a phased departure of risk given the countries in of the UN forces between 1 July and which the Group operates. Whilst 30 December 2023. The security situation the Group has in place legal titles in the north and east of the country on the assets in its portfolio, remains fragile and unrest has continued there remains a risk to the Group in neighbouring Burkina Faso and that changes within regimes could Niger. put the ownership of these assets at risk. In C te d'Ivoire, the political situation has been calm since 2011. The election The Group is also at risk of taxation in 2015 returned the government of reviews that may change or apply President Ouattara with increased more stringently the laws and popular support and on 31 October regulations of the countries in 2020 President Ouattara was returned which it operates. for a further 5-year mandate. The economic situation in C te d'Ivoire is improving dramatically with significant government expenditure on infrastructure and development activity. ---------------------------------------------- Financial Risk The Group is an exploration company The Board regularly reviews the levels and does not generate revenue of discretionary spending on capital or self-sustaining funding at items and exploration expenditure. this stage. The Group requires This includes regularly updating funds to support ongoing exploration working capital models, reviewing and future development of mineral actual costs against budget and assessing properties. The Group's access potential impacts on future funding to funding will depend on its requirements and performance targets.
ability to obtain financing through the raising of equity capital, In the past, the Group has been successful joint venture projects, debt financing, in raising additional equity finance farm outs or other means. to support its ongoing activities. There is no assurance that the Group will be successful in obtaining the necessary financing in a timely manner on acceptable terms to complete its investment strategy. The equity markets and ability to raise finance were significantly affected by the Covid-19 pandemic but have subsequently improved. If the Group is unable to obtain additional financing as needed, some interests may be relinquished, and / or the scope of the operations reduced. ----------------------------------------------
S172 Statement
The Directors of the Company have a duty to promote the success of the Company. A director of the Company must act in the way they consider, in good faith, to promote the success of the Company for the benefit of its members, and in doing so have regard (amongst other matters) to:
-- the likely consequences of any decision in the long term; -- the interests of the Company's employees;
-- the need to foster the Company's business relationships with suppliers, customers and others;
-- the impact of the Company's operations on the community and the environment;
-- the desirability of the Company to maintain a reputation for high standards of business conduct; and
-- the need to act fairly between members of the Company.
The Directors are committed to developing and maintaining a governance framework that is appropriate to the business and supports effective decision making coupled with robust oversight of risks and internal controls.
The Board believes that long-term success requires good relations with a range of different stakeholder groups both internal and external. The board has identified Kodal's stakeholders to include employees and consultants working for the Company, the local communities and governments in Mali and Cote d'Ivoire in which it operates, suppliers and contractors, as well as shareholders. As the Company looks to bring the Bougouni Lithium project into development, the importance of capital equipment, suppliers, contractors, local workforce, finance providers and offtake customers will increase significantly.
In the Corporate Governance Report, we explain the regular engagement with employees, communities and local governments in West Africa where we operate; and the impact assessment we have performed on the environment and local society as part of our permitting process. We also comment on the decision-making for the long-term success of the Company, its governance and culture; as well as the nature and methods of communication with all shareholders.
The Group relies heavily on having suppliers and contractors with appropriate levels of experience and expertise of working successfully with junior miners in West Africa, as well as professional advice for AIM quoted companies in London. Accordingly, Kodal is committed to maintaining constructive relationships with all its suppliers and advisers and operating in line with its Corporate Code of Conduct.
Signed on behalf of the Board
Bernard Aylward
Chief Executive Officer
5 September 2023
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 31 MARCH 2023
Note Year ended Year ended 31 March 31 March 2023 2022 GBP GBP Continuing operations Administrative expenses (944,473) (540,655) Share based payments 5 (516,581) (342,876) --------------- ------------ OPERATING LOSS (1,461,054) (883,531) Finance charge - (19,556) LOSS BEFORE TAX 2 (1, 461,054) (903,087) Taxation 6 - - LOSS FOR THE YEAR FROM CONTINUING OPERATIONS (1, 461,054) (903,087) OTHER COMPREHENSIVE INCOME Items that may be subsequently reclassified to profit or loss Currency translation gain / (loss) 331,259 (108,167) TOTAL COMPREHENSIVE INCOME FOR THE YEAR (1,129,795) (1,011,254) =============== ============ Loss per share Basic and diluted (pence) 4 (0.0087) (0.0057)
The loss for the current and prior years and the total comprehensive income for the current and the prior years are wholly attributable to owners of the parent company.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS AT 31 MARCH 2023
Group Group 31 March 31 March 2023 2022 Note GBP GBP NON-CURRENT ASSETS Intangible assets 7 14,521,888 11,442,403 Property, plant and equipment 8 91,771 3,309 Amounts due from 9 subsidiary undertakings - - Investments in subsidiary undertakings 9 - - ------------ 14,613,659 11,445,712 ------------- ------------ CURRENT ASSETS Other receivables 10 11,175 5,769 Cash and cash equivalents 544,988 1,045,515 ------------- ------------ 556,163 1,051,284 Non-current assets classified as held for sale 7 513,109 - ------------- ------------ TOTAL ASSETS 15,682,931 12,496,996 ------------- ------------ CURRENT LIABILITIES Trade and other payables 11 (800,007) (406,341) ------------ TOTAL LIABILITIES (800,007) (406,341) ------------- ------------ NET ASSETS 14,882,924 12,090,655 ============ EQUITY Attributable to owners of the parent: Share capital 12 5,315,619 4,947,595 Share premium account 12 18,765,206 15,933,071 Share based payment reserve 1,537,779 1,150,678 Translation reserve 12,632 (318,627) Retained deficit (10,748,312) (9,622,062) ------------- ------------ TOTAL EQUITY 14,882,924 12,090,655 ============= ============
The Company's loss for the year ended 31 March 2023 was GBP1,206,922 (2022: GBP651,696).
The financial statements were approved and authorised for issue by the board of directors on 5 September 2023 and signed on its behalf by
Charles Joseland
Director
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 MARCH 2023
Share Share based Share premium payment Translation Retained Total capital account reserve reserve deficit equity Group GBP GBP GBP GBP GBP GBP At 31 March 2021 4,916,364 15,841,134 807,802 (210,460) (8,718,975) 12,635,865 Comprehensive income Loss for the year - - - - (903,087) (903,087) Other comprehensive income Currency translation loss - - - (108,167) - (108,167) ---------- ----------- ------------ -------------- ------------- ------------- Total comprehensive income for the year - - - (108,167) (903,087) (1,011,254) Transactions with owners Share based payment - - 342,876 - - 342,876 Proceeds from shares issued 31,231 91,937 - - - 123,168 At 31 March 2022 4,947,595 15,933,071 1,150,678 (318,627) (9,622,062) 12,090,655 Comprehensive income Loss for the year - - - - (1,461,054) (1, 461,054) Other comprehensive income Currency translation gain - - - 331,259 - 331,259 ---------- ----------- ------------ -------------- ------------- ------------- Total comprehensive income for the year - - - 331,259 (1,461,054) (1,129,795) Transactions with owners
Share based payment - - 721,905 - - 721,905 Proceeds from shares issued 334,821 2,665,179 - - - 3,000,000 Proceeds from exercise of share options 33,203 309,171 - - - 342,374 Share options lapse - - (334,804) - 334,804 - Share issue expenses - (142,215) - - - (142,215) ---------- ----------- ------------ -------------- ------------- ------------- At 31 March 2023 5,315,619 18,765,206 1,537,779 12,632 (10,748,312) 14,882,924
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARED 31 MARCH 2023
Group Group Year ended Year ended 31 March 31 March 2023 2022 Note GBP GBP Cash flows from operating activities Loss before tax (1,461,054) (903,087) Adjustments for non-cash items: Write back of impairment of intercompany balances - - Share based payments 516,581 342,876 Operating cash flow before movements in working capital (944,473) (560,211) Movement in working capital (Increase) / decrease in receivables (5,406) 10,244 Increase / (decrease) in payables 393,666 (218,275) ------------ ------------ Net movements in working capital 388,260 (208,031) Net cash outflow from operating activities (556,213) (768,242) Cash flows from investing activities Purchase of tangible assets 8 (103,633) (1,600) Purchase of intangible assets 7 (3,006,324) (2,474,768) Loans to subsidiary undertakings - - ------------ ------------ Net cash outflow from investing activities (3,109,957) (2,476,368) Cash flow from financing activities Net proceeds from share issues 12 2,857,785 1,962,064 Net proceeds from exercise of share options 342,374 - Net cash inflow from financing activities 3,200,159 1,962,064 ------------ ------------ (Decrease) in cash and cash equivalents (466,011) (1,282,546) Cash and cash equivalents at beginning of the year 1,045,515 2,432,807 Exchange (loss) on cash (34,516) (104,746) Cash and cash equivalents at end of the year 544,988 1,045,515 ============ ============
Cash and cash equivalents comprise cash on hand and bank balances.
FINANCIAL INFORMATION
The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 March 2023 or 2022 but is derived from those accounts.
Statutory accounts for 2022 have been delivered to the registrar of companies, and those for 2023 will be delivered in due course. The auditor's report for the 2022 accounts was (i) unqualified, (ii) did not contain any matter to which the auditor drew attention by way of emphasis without modifying its opinion and (iii) did not contain a statement under s.498(2) or (3) of the Companies Act 2006.
The auditor's report for the 2023 accounts was (i) unqualified, (ii) contained a material uncertainty in respect of going concern to which the auditor drew attention by way of emphasis without modifying its opinion and (iii) did not contain a statement under s.498(2) or (3) of the Companies Act 2006.
PRINCIPAL ACCOUNTING POLICIES
FOR THE YEARED 31 MARCH 2023
The Group has adopted the accounting policies set out below in the preparation of the financial statements. All of these policies have been applied consistently throughout the period unless otherwise stated.
The Company is incorporated in England and Wales with registered number 07220790. The Company's registered office is at Prince Frederick House, 35-39 Maddox Street, London W1S 2PP.
Basis of preparation
The consolidated financial statements of Kodal Minerals Plc are prepared in accordance with the historical cost convention and in accordance with UK-adopted International Accounting Standards. The Company's ordinary shares are quoted on AIM, a market operated by the London Stock Exchange.
In accordance with the exemption allowed by Section 408(3) of the Companies Act 2006, the Company has not presented its own income statement or statement of comprehensive income.
Going concern
The Group has not earned revenue during the year to 31 March 2023 as it is still in the exploration and development phases of its business. The operations of the Group are currently being financed from funds which the Company has raised from the issue of new ordinary shares. On 31 August 2023 the group has cash at bank amounting to GBP1,984,000.
In January 2023 the Group signed binding agreements with Hainan to enter into a joint venture to develop the Bougouni Lithium Project. Under these agreements, Hainan will subscribe for equity in the joint venture vehicle amounting US$100 million; they will also subscribe for equity of US$17.75m in the ordinary shares of Kodal Minerals Plc, plus the immediate repayment to the Company for historical development expenses amounting to US$5.66m, the agreements together being the Financing Transaction.
Completion of the Financing Transaction is subject to meeting various conditions precedent including Hainan receiving formal Government approval for the investment and Kodal completing a restructure of its Mali subsidiary holdings. At the date of this report, it is noted that Hainan has received all necessary approvals from the Chinese Government authorities to allow it to complete its funding and investment including "Overseas Project Investment Filing Certificates" from the Hainan Province National Development and Reform Commission ("NDRC") and Company Overseas Investment Certificate from the Department of Commerce of Hainan Province.
Kodal has continued with the restructuring of its subsidiary companies and confirms that the new mining company Les Mines de Lithium de Bougouni has been fully registered and the Mali DNGM notified that this new company will be the owner and operator of the mining licence. In addition, the Company has completed the restructure of Future Minerals SARL such that all of Kodal's lithium assets in Mali are now 100% owned by Kodal Mining UK Limited (the joint venture vehicle for Kodal and Hainan to develop the Bougouni Lithium project). Kodal is continuing to work with the relevant authorities to finalise all regulatory matters to allow completion of the Financing Transaction.
Both Hainan and the Company remain committed to the Financing Transaction and Hainan has recently advanced to the Company a US$3.5m prepayment on its subscription for ordinary shares in the Company. The long stop date for finalising the conditions precedent has been extended several times by mutual consent and the parties continue to work together to expedite the completion of the Financing Transaction at the earliest opportunity.
The Group has prepared cash flow forecasts for the period ending 30 September 2024 under several scenarios, including on the basis that the Hainan transaction completion is delayed for several more months and also that the Hainan transaction does not proceed. Under both of these scenarios the Group will require further funding within the foreseeable future.
The directors are confident of raising sufficient funding to cover ongoing expenditure and overheads, based on indications from Hainan that they would make further prepayments available, and/or the Group will be able to raise further equity given the quality of the Bougouni lithium project, continuing interest from potential investors and finance providers, and forecasts showing continuing strong demand and pricing for spodumene and lithium. Although the Group has been successful in the past obtaining additional funding, there is no assurance that it will be able to do so in the future or that such arrangements will be on terms advantageous to the Group.
These conditions indicate the existence of a material uncertainty that may cast doubt on the Group's ability to continue as a going concern. The consolidated statements for the year ended 31 March 2023 have been prepared on a going concern basis as the Board is of the opinion that the group will be successful in completing the Hainan transaction in the near future and/or securing further funding in order to meet its liabilities as they fall due for at least 12 months from the date of signing these accounts. Accordingly, these consolidated financial statements do not include any adjustments to the recoverability and classification of recorded assets and liabilities and related expenses that might be necessary should the Group be unable to continue as a going concern.
Basis of consolidation
The Group financial statements consolidate those of the Company and all of its subsidiary undertakings drawn up to the statement of financial position date. Subsidiary undertakings are entities over which the Group has the power to control the financial and operating policies so as to obtain benefits from their activities. The Group obtains and exercises control through voting rights.
Unrealised gains on transactions between the Company and its subsidiaries are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Amounts reported in the financial statements of subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group.
Foreign currency translation
Items included in the Group's consolidated financial statements are measured using the currency of the primary economic environment in which the Group operates ("the functional currency"). The financial statements are presented in pounds sterling ("GBP"), which is the functional and presentational currency of the Parent Company and the presentational currency of the Group. End of year balances in the Group's West African subsidiary undertakings were converted using an end of year rate of XOF 1 : GBP0.00135 (2022: XOF 1 : GBP0.00129).
Transactions in foreign currencies are recorded using the rate of exchange ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the rate of exchange ruling at the reporting date and the gains or losses on translation are included in profit and loss. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the original transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any recognised impairment loss. Depreciation, which is included in administrative expenses, is charged so as to write off the costs of assets down to their residual value, over their estimated useful lives, using the straight-line method, on the following basis:
Plant and machinery 4 years Motor vehicles 4 years Fixtures, fittings and equipment 4 years
Where property, plant and equipment are used in exploration and evaluation activities, the depreciation of the assets is capitalised as part of the cost of exploration and evaluation assets. The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
Investments in subsidiaries
Investments in subsidiaries are stated at cost less any provision for impairment. Where the recoverable amount of the investment is less than the carrying amount, an impairment is recognised.
Exploration and evaluation expenditure
In accordance with IFRS 6 (Exploration for and Evaluation of Mineral Resources), exploration and evaluation costs incurred before the Group obtains legal rights to explore in a specific area (a "project area") are taken to profit or loss.
Upon obtaining legal rights to explore in a project area, the fair value of the consideration paid for acquiring those rights and subsequent exploration and evaluation costs are capitalised as exploration and evaluation assets. The costs of exploring for and evaluating mineral resources are accumulated with reference to appropriate cost centres being project areas or groups of project areas.
Upon the technical feasibility and commercial viability of extracting the relevant mineral resources becoming demonstrable, the Group ceases further capitalisation of costs under IFRS 6.
Exploration and evaluation assets are not amortised prior to the conclusion of appraisal activities, but are carried at cost less impairment, where the impairment tests are detailed below.
Exploration and evaluation assets are carried forward until the existence (or otherwise) of commercial reserves is determined:
-- where commercial reserves have been discovered, the carrying value of the exploration and evaluation assets are reclassified as development and production assets and amortised on an expected unit of production basis; or
-- where a project area is abandoned, or a decision is made to perform no further work, the exploration and evaluation assets are written off in full to profit or loss.
Exploration and evaluation assets - impairment
Project areas, or groups of project areas, are determined to be cash generating units for the purposes of assessment of impairment.
With reference to a project area or group of project areas, the exploration and evaluation assets (along with associated production and development assets) are assessed for impairment when such facts and circumstances suggest that the carrying amount of the assets may exceed the recoverable amount.
Such indicators include, but are not limited to, those situations outlined in paragraph 20 of IFRS 6 and include the point at which a determination is made as to whether or not commercial reserves exist.
The aggregate carrying value is compared against the expected recoverable amount, generally by reference to the present value of the future net cash flows expected to be derived from production of the commercial reserves. Where the carrying amount exceeds the recoverable amount, an impairment is recognised in profit or loss.
Intangible assets and impairment
Externally acquired intangible assets are initially recognised at cost and subsequently amortised over their useful economic lives. Amortisation, which is included in administrative expenses, is charged so as to write off the costs of intangible assets, over their estimated useful lives, using the straight-line method, on the following basis:
Software 3 years
Deferred taxation
Deferred tax 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. Deferred tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the reporting date and are expected to apply when the related deferred tax is realised, or the deferred liability is settled.
Deferred tax assets are recognised to the extent that it is probable that the future taxable profit will be available against which the temporary differences can be utilised.
Financial instruments
Financial assets and financial liabilities are recognised on the Statement of Financial Position when the Group becomes a party to the contractual provisions of the instrument.
IFRS 7 (Financial Instruments: Disclosures) requires information to be disclosed about the impact of financial instruments on the Group's risk profile, how the risks arising from financial instruments might affect the entity's performance, and how these risks are being managed. The required disclosures have been made in Note 14 to the financial statements.
The Group's policies include that no trading in derivative financial instruments shall be undertaken.
Cash and cash equivalents
Cash and cash equivalents in the Statement of Financial Position comprise cash at bank and in hand.
Other receivables
Other receivables are carried at amortised cost less provision made for impairment of these receivables. A provision for impairment of receivables is established when there is an expected credit loss on amounts due according to the original terms of the receivables. The amount of the provision is the difference between the assets' carrying amount and the recoverable amount. Provisions for impairment of receivables are included in profit or loss.
Non-current assets classified as held for sale
Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continued use. They are measured at the lower of their carrying amount and fair value less costs of disposal. For non-current assets to be classified as held for sale, they must be available for immediate sale in their present condition and their sale must be highly probable. Non-current assets are not depreciated or amortised while they are classified as held for sale. Interest and other expenses attributable to the liabilities of assets held for sale continue to be recognised. Non-current assets classified as held for sale are presented separately on the face of the statement of financial position, in current assets.
Trade and other payables
Trade payables and other payables represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services. These amounts are carried at amortised cost. The amounts are unsecured and are usually paid within 30 days of recognition.
Provisions
A provision is recognised when a present obligation (legal or constructive) has arisen as a result of a past event and it is probable that a future outflow of resources will be required to settle the obligation, provided that a reliable estimate can be made of the amount of the obligation.
When the effect of discounting is material, the amount recognised for a provision is the present value at the end of the reporting period of the future expenditures expected to be required to settle the obligation. The increase in the discounted present value amount arising from the passage of time is included in profit or loss.
Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction from the proceeds.
Equity settled transactions (Share based payments)
The Group has issued shares as consideration for services received. Equity settled share-based payments are measured at fair value at the date of issue.
The Group has also granted equity settled options and warrants. The cost of equity settled transactions is measured by reference to the fair value at the date on which they were granted and is recognised over the vesting period, which ends on the date the recipient becomes fully entitled to the award. Fair value is determined by using the Black-Scholes option pricing model.
In valuing equity settled transactions, account is taken of service and performance conditions (vesting conditions), in addition to performance conditions linked to the price of the shares of the Company (market conditions). No expense is recognised for awards that do not ultimately vest.
At each reporting date before vesting, the cumulative expense is calculated; representing the extent to which the vesting period has expired and management's best estimate of the number of equity instruments that will ultimately vest. The movement in the cumulative expense since the previous reporting date is recognised in profit and loss, with a corresponding entry in equity, or for options awarded to executive directors, the award is considered as part of their remuneration and the overall cost is allocated between operating costs and exploration and evaluation cost.
Where the terms of the equity-settled award are modified, or a new award is designated as replacing a cancelled or settled award, the cost based on the original award terms continues to be recognised over the original vesting period. In addition, an expense is recognised over the remainder of the new vesting period for the incremental fair value of any modification, based on the difference between the fair value of the original award and the fair value of the modified award, both as measured on the date of the modification. No reduction is recognised if the difference is negative.
Where an equity-based award is cancelled (including when a non-vesting condition within the control of the entity or employee is not met), it is treated as if it had vested on the date of the cancellation, and the cost not yet recognised in profit and loss for the award is expensed immediately. Any compensation paid up to the fair value of the award at the cancellation or settlement date is deducted from equity, with any excess over fair value being treated as an expense.
Segmental reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Board of Directors, which has been identified as the Chief Operating Decision Maker. The Board of Directors is responsible for allocating resources and assessing performance of the operating segments in line with the strategic direction of the Company.
Critical accounting judgements and estimates
The preparation of these consolidated financial statements in accordance with UK-adopted International Accounting Standards ("IFRS") requires the use of accounting estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expenses during the reporting period. Although these estimates are based on management's best knowledge of current events and actions, actual results ultimately may differ from those estimates. IFRS also require management to exercise its judgement in the process of applying the Group's accounting policies.
The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of the assets and liabilities within the next financial year are addressed below.
Exploration and evaluation expenditure
In accordance with the Group's accounting policy for exploration and evaluation expenditure, after obtaining licences giving legal rights to explore in the project area, all exploration and evaluation costs for each project are capitalised as exploration and evaluation assets.
The exploration and evaluation assets for each project are assessed for impairment when such facts and circumstances suggest that the carrying value of the assets may exceed the recoverable amount.
The directors have assessed the Group's gold projects in Mali and Côte d'Ivoire that are not part of the joint venture agreements and determined that they remain prospective. Accordingly, the directors have determined to continue to maintain these licences and explore ways for the Group to advance these prospective areas most effectively. Accordingly, no impairment review has been conducted on these assets.
The directors have assessed the Group's Bougouni Lithium project in Mali, taking into account the updated Preliminary Feasibility Study and the agreement reached with Hainan in January 2023 for the funding of the project. This project continues to be evaluated and there is no indication of impairment. Accordingly, no impairment review has been conducted on these assets.
The Group's exploration activities and future development opportunities are dependent upon maintaining the necessary licences and permits to operate, which typically require periodic renewal or extension. In Mali and Côte d'Ivoire, the process of renewal or extension of a licence can only be initiated on expiry of the previous term and takes time to be processed by the relevant government authority. Until formal notification is received there is a risk that renewal or extension will not be granted.
As detailed in the Operational Review, at the date of these financial statements, the Group's key exploration licences are current. As detailed in note 7, the total carrying value of the exploration and evaluation assets at 31 March 2023 was GBP14.5 million (2022: GBP11.4 million). The Group complies with the prevailing laws and regulations relating to these licences and ensures that the regulatory reporting and government compliance requirements for each licence are met.
Valuation of warrants and share options
In accordance with the Group's accounting policy for equity settled transactions, all equity settled share-based payments are measured at fair value at the date of issue. Fair value is determined by using the Black-Scholes option pricing model based on the terms of the options and warrants, the Company's share price at the time and assumptions for volatility and exercise date. The assumptions used to value the options and warrants are detailed in note 5.
For options awarded to the non-executive directors, the award has been considered to be in relation to their overall contribution to the Group and, accordingly, the charge has been included within operating costs in the Consolidated Statement of Comprehensive Income. For options awarded to executive directors, the award is considered as part of their remuneration. This overall cost is allocated between operating costs and exploration and evaluation cost, the latter of which are capitalised against specific projects. For the award of warrants associated with the raising of funds through the issue of new shares, the charge has been treated as a share issue expense and offset against the share premium account.
Recoverability of Intercompany Balances to Subsidiary Undertakings
The Company has outstanding intercompany balances from its directly held subsidiaries resulting from the primary method of financing the activity of those subsidiaries. The balances are shown in the Company Statement of Financial Position. However, there is a risk that the subsidiaries will not commence sufficient revenue generating activities and that the carrying amount of the intercompany balances will, therefore, exceed the recoverable amount. Under the requirements of IFRS 9 management has run various scenarios on the expected credit loss of the Company's intercompany balances, including the project being put into operation, the project being sold and the project collapsing. Management has updated its calculations reflecting additional amounts advanced to its subsidiaries for work on its lithium and gold projects during the year, the reduced the risk of credit loss given improvements since last year in the financial, lithium and gold markets and the reduced risk of project collapse following the granting of the mining licence. At 31 March 2023, amounts due to the Company from subsidiary undertakings totalled GBP14,296,000 (2022: GBP10,785,000), net of a credit loss provision of GBP501,000 (2022: GBP681,000).
Adoption of New and Revised Standards
The Group has adopted all of the new or amended Accounting Standards and interpretations issued by the International Accounting Standards Board ("IASB") that are mandatory and relevant to the Group's activities for the current reporting period.
New standards and interpretations not applied
At the date of authorisation of these consolidated financial statements, certain new standards, amendments and interpretations to existing standards have been published but are not yet effective and have not been adopted early by the Group. These are listed below. The Board anticipates that all of the pronouncements will be adopted in the Group's accounting policies for the first period beginning after the effective date of the pronouncement. The amendments to the standards noted below are not expected to have a material impact on the Group's consolidated financial statements.
Standard Details of amendment / New Standards and Annual periods Interpretations beginning on or after IAS 1 Presentation Amendments to IAS 1 Presentation of Financial 1 January of Financial Statements to specify the requirements 2024
Statements for classifying liabilities as current or non-current. IAS 1 Presentation Amendments to IAS 1 Presentation of Financial 1 January of Financial Statements to specify the requirements 2023 Statements for disclosure of accounting policies.
There are other standards and amendments in issue but not yet effective, which are not likely to be relevant to the Group which have therefore not been listed.
NOTES TO THE FINANCIAL STATEMENTS
1. SEGMENTAL REPORTING
The operations and assets of the Group in the year ended 31 March 2023 are focused in the United Kingdom and West Africa and comprise one class of business: the exploration and evaluation of mineral resources. Management have determined that the Group had two operating segments being the West African Gold Projects and the West African Lithium Projects, and a UK administration centre. The Parent Company acts as a holding company. At 31 March 2023, the Group had not commenced commercial production from its exploration sites and therefore had no revenue for the year.
Year ended 31 UK West Total March 2023 Africa West Africa Gold Lithium GBP GBP GBP GBP Administrative expenses 912,390 4,288 27,795 944,473 Share based payments 516,581 - - 516,581 Loss for the year 1,428,971 4,288 27,795 1,461,054 ---------- ------------ -------------- ------------- At 31 March 2023 Other receivables 11,175 - - 11,175 Cash and cash equivalents 425,704 90,426 28,858 544,988 Non-current assets classified as held for sale - - 513,109 513,109 Trade and other payables (129,332) - (670,675) (800,007) Intangible assets - exploration and evaluation expenditure - 3,305,948 11,215,940 14,521,888 Property, plant and equipment - 1,042 90,729 91,771 ---------- ------------ -------------- ------------- Net assets at 31 March 2023 307,547 3,397,416 11,177,961 14,882,924 ---------- ------------ -------------- ------------- Year ended 31 West March 2022 UK Africa West Africa Total Gold Lithium GBP GBP GBP GBP Administrative expenses 538,625 866 1,164 540,655 Share based payments 342,876 - - 342,876 Finance charge 19,556 - - 19,556 ---------- ------------ -------------- ------------- Loss for the year 901,057 866 1,164 903,087 ---------- ------------ -------------- ------------- At 31 March 2022 Other receivables 5,769 - - 5,769 Cash and cash equivalents 949,850 38,481 57,184 1,045,515 Trade and other payables (100,959) - (305,382) (406,341) Intangible assets - exploration and evaluation expenditure - 2,410,787 9,031,616 11,442,403 Property, plant and equipment - - 3,309 3,309 Net assets at 31 March 2022 854,660 2,449,268 8,786,727 12,090,655 ---------- ------------ -------------- ------------- 2. LOSS BEFORE TAX
The loss before tax from continuing activities is stated after charging:
Group Group Year ended Year ended 31 March 2023 31 March 2022 GBP GBP Fees payable to the Company's auditor 53,000 40,000 Share based payments (note 5) 516,581 342,876 Directors' salaries and fees 182,247 167,980 Employer's National Insurance 10,598 5,980
Amounts payable to RSM UK Audit LLP and its associates in respect of audit services are as follows;
Group Group Year ended Year ended 31 March 31 March 2023 2022 GBP GBP Audit services - statutory audit of parent and consolidated accounts 53,000 40,000 3. EMPLOYEES AND DIRECTORS' REMUNERATION
The average number of people employed in the Group is as follows:
Group Group 31 March 31 March 2023 2022 Number Number Average number of employees (including directors): 45 19 ---------- ----------
The directors are key management personnel of the Company. The remuneration expense for directors of the Company is as follows:
Year ended Year ended 31 March 31 March 2022 2023 GBP GBP Directors' remuneration 182,247 167,980 Directors' social security costs 10,598 5,980 ----------- --------------- Total 192,845 173,960 ----------- ---------------
In addition to the amounts included above, GBP282,267 (2022: GBP79,469) of the directors' remuneration cost has been treated as Exploration and Evaluation expenditure. 100% of the salary cost of the Group's employees in West Africa has been treated as Exploration and Evaluation expenditure (2022: 100%).
Directors' Share based salary and payments Total fees year year ended year ended ended 31 March 31 March 31 March 2023 (see 2023 2023 note 5) GBP GBP GBP Bernard Aylward (a) 177,847 180,724 358,571 Charles Joseland 50,000 78,153 128,153 Robert Wooldridge 45,000 119,366 164,366 Steven Zaninovich (b) 166,667 159,291 325,958 Qingtao Zeng (c) 25,000 139,680 164,680 464,514 677,214 1,141,728 ============ ============ =============
Included within the amounts shown above for share based payments, GBP191,771 has been treated as Exploration and Evaluation expenditure. Four Directors exercised share options in the period, with respective gains on exercise as follows: Bernard Aylward GBP3,860; Charles Joseland GBP20,044; Robert Wooldridge GBP10,509; and Steven Zaninovich GBP4,632.
Directors' Share based salary and payments Total fees year year ended year ended ended 31 March 31 March 31 March 2022 (see 2022 2022 note 5) GBP GBP GBP Bernard Aylward (a) 132,449 222,793 355,242 Charles Joseland 45,000 1,164 46,164 Robert Wooldridge 45,000 44,798 89,798 Qingtao Zeng (c) 25,000 2,549 27,549 247,449 271,304 518,753 ============ ============ =============
a) Matlock Geological Services Pty Ltd ("Matlock") a company wholly owned by Bernard Aylward, provided consultancy services to the Group during the year ended 31 March 2023 and received fees of GBP139,514 (2022: GBP97,450). These fees are included within the remuneration figure shown for Bernard Aylward.
b) Zivvo Pty Ltd ("Zivvo") a company wholly owned by Steven Zaninovich, provided consultancy services to the Group during the year ended 31 March 2023 and received fees of GBP140,000 in the period after his appointment as director on 27 July 2022. These fees are included within the remuneration figure shown for Steven Zaninovich. Steven Zaninovich was appointed to the board on 27 July 2022.
c) In addition to the amounts included above, Geosmart Consulting Pty Ltd, a company wholly owned by Qingtao Zeng, provided consultancy services to the Group during the year and received fees of GBP24,627 (2022: GBP27,136).
4. LOSS PER SHARE
Basic loss per share is calculated by dividing the loss for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year.
The following reflects the result and share data used in the computations:
Loss Weighted Basic loss average number per share of shares (pence) GBP Year ended 31 March 2023 1,461,054 16,812,417,355 0.0087 Year ended 31 March 2022 903,087 15,809,383,877 0.0057
Diluted loss per share is calculated by dividing the loss attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares. Options in issue are not considered diluting to the loss per share as the Group is currently
loss making. Diluted loss per share is therefore the same as the basic loss per share. 5. SHARE BASED PAYMENTS
The share-based payment reserve is used to recognise the value of equity-settled share-based payments provided to employees, including key management personnel, as part of their remuneration.
Year ended Year ended 31 March 31 March 2023 2022 Share options outstanding Number Number Opening balance 250,000,000 205,000,000 Lapsed in the year (77,500,000) - Issued in the year 470,000,000 45,000,000 Exercised in the year (60,000,000) - Closing balance 582,500,000 250,000,000 ============== ============== Year ended Year ended 31 March 31 March 2023 2022 Performance share rights outstanding Number Number Opening balance 175,000,000 - Issued in the year 75,000,000 175,000,000 Exercised in the year (10,000,000) - -------------- -------------- Closing balance 240,000,000 175,000,000 ============== ============== Year ended Year ended 31 March 31 March 2023 2022 Warrants outstanding Number Number Opening balance 205,000,000 285,355,663 Lapsed in the year (12,500,000) - Issued in the year 170,000,000 - Exercised in the year (36,250,000) (80,355,663) Closing balance 326,250,000 205,000,000 ============== ==============
Options, warrants and performance share rights outstanding for each of the directors at the year-end are outlined below:
Exercisable Bernard Robert Qingtao Charles Steven date Aylward Wooldridge Zeng Joseland Zaninovich 8 May 2019 - 6,250,000 - - - - 8 May 2024 20 Nov 2018 - - 2,500,000 - - - 20 Nov 2023 20 Nov 2019 - - 2,500,000 - - - 20 Nov 2024 1 Mar 2019 - 1 Mar 2024 - - - - 26,666,666 6 November 2021 - - - - 33,333,334 To be determined (Note 2) - - - - 90,000,000 6 November 30,000,000 - - - - 2021 To be determined 40,000,000 - - - - (Note 1) To be determined 75,000,000 - - - - (Note 2) 27 Aug 2021 - 27 Aug 2026 - 15,000,000 7,500,000 - - 27 Aug 2022 - 27 Aug 2027 - 7,500,000 3,750,000 - - 27 Aug 2023 - 27 Aug 2028 - 7,500,000 3,750,000 - - To be determined (Note 1) 30,000,000 - - - 72,500,000 To be determined (Note 2) 40,000,000 - - - 77,500,000 To be determined (Note 3) 60,000,000 - - - 95,000,000 18 Aug 2022 - 18 Aug 2027 - 23,333,334 43,333,334 25,000,000 - 18 Aug 2023 - 18 Aug 2028 - 33,333,333 43,333,333 25,000,000 - 18 Aug 2024 - 18 Aug 2029 - 33,333,333 43,333,333 25,000,000 - Closing balance 275,000,000 126,250,000 150,000,000 75,000,000 395,000,000 ============ ============ ============ =========== ============ 1. Exercisable from date of securing the finance for construction of the Bougouni mine 2. Exercisable from date of first commercial production from the Bougouni Project 3. Exercisable from date of production of 175,000 tonnes of spodumene concentrate from the Bougouni project
Included within operating losses is a charge for issuing share options and making share-based payments of GBP684,932 (2022: GBP342,876).
Details of share options outstanding at 31 March 2023:
Date of grant Number of options Option price Exercisable between
20 December 2013 13,333,333 0.7 pence 30 Dec 2014 - 30 Dec 2024
20 December 2013 13,333,333 0.7 pence 30 Dec 2015 - 30 Dec 2025
20 December 2013 13,333,333 0.7 pence 30 Dec 2016 - 30 Dec 2026
8 May 2017 12,500,000 0.38 pence 8 May 2018 - 8 May 2023
8 May 2017 20,000,000 0.38 pence 8 May 2019 - 8 May 2024
20 November 2017 2,500,000 0.38 pence 20 Nov 2018 - 20 Nov 2023
20 November 2017 2,500,000 0.38 pence 20 Nov 2019 - 20 Nov 2024
27 August 2021 22,500,000 0.36 pence 27 Aug 2021 - 27 Aug 2026
27 August 2021 11,250,000 0.36 pence 27 Aug 2022 - 27 Aug 2027
27 August 2021 11,250,000 0.36 pence 27 Aug 2023 - 27 Aug 2028
18 August 2022 37,500,000 0.3 pence To be determined
18 August 2022 47,500,000 0.34 pence To be determined
18 August 2022 70,000,000 0.38 pence To be determined
18 August 2022 95,000,002 0.3 pence 18 Aug 2022 - 18 Aug 2027
18 August 2022 104,999,999 0.34 pence 18 Aug 2023 - 18 Aug 2028
18 August 2022 104,999,999 0.34 pence 18 Aug 2024 - 18 Aug 2029
Details of performance share rights outstanding at 31 March 2023:
Date of grant Number of performance Option price Exercisable between
share rights
27 August 2021 30,000,000 nil 6 November 2021
27 August 2021 50,000,000 nil To be determined
27 August 2021 85,000,000 nil To be determined
27 July 2022 25,000,000 nil To be determined
27 July 2022 25,000,000 nil To be determined
27 July 2022 25,000,000 nil To be determined
Details of warrants outstanding at 31 March 2023:
Date of grant Number of warrants Option price Exercisable between
22 May 2017 6,250,000 0.38 pence 22 May 2019 - 22 May 2024
23 November 2018 26,666,666 0.14-0.38 pence 1 March 2019 - 1 March 2024
23 November 2018 33,333,334 0.14-0.38 pence To be determined
23 November 2018 90,000,000 0.14-0.38 pence To be determined
27 July 2022 47,500,000 0.28 pence To be determined
27 July 2022 52,500,000 0.325 pence To be determined
27 July 2022 70,000,000 0.38 pence To be determined
Additional disclosure information:
Weighted average exercise price of share options and warrants:
-- outstanding at the beginning of the period 0.35 pence
-- granted during the period 0.30 pence
-- outstanding at the end of the period 0.27 pence
-- exercisable at the end of the period 0.35 pence
Weighted average remaining contractual life of
share options outstanding at the end of the period 5.7 years
Warrants, Options and Performance Share Rights issued in the year to 31 March 2023
On 27 July 2022, the Company granted warrants over 170,000,000 ordinary shares and Performance Share Rights of up to 75,000,000 ordinary shares to Steven Zaninovich. The warrants are registered in the name of Zivvo Pty Ltd, a company wholly owned by Steven Zaninovich.
The Warrants and Performance Share Rights carry vesting conditions that are linked to achievement of milestones critical to the development of the Bougouni Project as follows:
-- Securing of finance for the Bougouni mine and completion of all Mali Government Agreements, Update and Variation of Mining Licence and Environment permitting in relation to the Bougouni Project;
-- Receipt of funds from first sale of spodumene concentrate from the Bougouni Project within 18 months of receipt of finance; and
-- 175,000 tonnes of spodumene concentrate produced from the Bougouni Project.
Subject to the vesting conditions being satisfied, Mr Zaninovich may call for Ordinary Shares, as set out in the table below, to be issued to him at any time within five years of the vesting condition being met and upon payment by them of the nominal value for the Ordinary Shares in relation the Performance Share Rights and the exercise price in relation to the share options.
Vesting criteria Warrants Performance Share Rights Exercise Number Price ------------ ------------ Securing of finance for GBP0.00280p 47,500,000 25,000,000 capped the Bougouni mine at GBP250,000 value ------------ ------------ ---------------------- Receipt of funds from first GBP0.00325p 52,500,000 25,000,000 capped sale of spodumene concentrate at GBP250,000 from Bougouni within 18 value months of receipt of finance ------------ ------------ ---------------------- Production of 175,000 tonnes GBP0.00380p 70,000,000 25,000,000 capped of spodumene concentrate at GBP250,000 from Bougouni value ------------ ------------ ---------------------- Total GBP0.00335p 170,000,000 75,000,000 total average capped at GBP750,000 value ------------ ------------ ----------------------
On 18 August 2022, the Company granted options over 155,000,000 ordinary shares to Bernard Aylward and Mohamed Niare (Country Manager, Mali).
The Share Options carry vesting conditions that are linked to achievement of milestones critical to the development of the Bougouni Project as follows:
-- Securing of finance for the Bougouni mine and completion of all Mali Government Agreements, Update and Variation of Mining Licence and Environment permitting in relation to the Bougouni Project;
-- Receipt of funds from first sale of spodumene concentrate from the Bougouni Project within 18 months of receipt of finance; and
-- 175,000 tonnes of spodumene concentrate produced from the Bougouni Project.
Subject to the vesting conditions being satisfied, the holders of the Share Options may call for Ordinary Shares, as set out in the table below, to be issued to them at any time within five years of the vesting condition being met.
Share Options Exercise price Vesting criteria Bernard Aylward Mohamed Niare ----------- ------------------ ------------------ Securing of finance 0.3 pence Up to 30 million Up to 7.5 million for the Bougouni ordinary shares ordinary shares mine ----------- ------------------ ------------------ Receipt of funds 0.34 pence Up to 40 million Up to 7.5 million from first sale ordinary shares ordinary shares of spodumene concentrate ----------- ------------------ ------------------ 175,000 tonnes 0.38 pence Up to 60 million Up to 10 million of spodumene ordinary shares ordinary shares concentrate produced ----------- ------------------ ------------------ Total Up to 130 million Up to 25 million ordinary shares ordinary shares ----------- ------------------ ------------------
On 18 August 2022, the Company granted options over 315,000,000 Ordinary Shares to members of the management team, of which those granted to Non-Executive Directors were as set out in the table below. The options will vest in equal tranches with the first one third vesting immediately and exercisable at 0.3 pence per share, and the remaining two thirds vesting in two equal tranches on the first and second anniversaries of the grant and exercisable at 0.34 pence per share.
Director Number of Options granted Charles Joseland 75,000,000 Robert Wooldridge 100,000,000 Qingtao Zeng 130,000,000
The fair values of the options and warrants granted were calculated using the Black-Scholes valuation model. The inputs to the model were:
27 July 2022 18 August 2022 Strike price 0.00p - 0.38p 0.30p - 0.38p Share price 0.11p - 0.25p 0.11p - 0.26p Volatility 75% 75% Expiry date 15/3/28 - 15/12/30 15/3/28 - 15/12/30 Risk free 0.24% - 0.26% 0.23% - 0.30% rate Dividend yield 0.0% 0.0%
Options and Performance Share Rights issued in the year to 31 March 2022
On 27 August 2021, the Company granted Performance Share Rights of up to 175,000,000 ordinary shares to Bernard Aylward and Mohamed Niare (Country Manager, Mali).
The Performance Share Rights carry vesting conditions that are linked to achievement of milestones critical to the development of the Bougouni Project as follows:
-- Award of mining licence; -- Securing the finance for construction of the Bougouni mine; and -- First commercial production from the Bougouni Project.
Subject to the vesting conditions being satisfied, the holders of the Performance Share Rights may call for Ordinary Shares, as set out in the table below, to be issued to them at any time within five years of the vesting condition being met and upon payment by them of the nominal value for the Ordinary Shares.
Performance Share Rights over New Ordinary Shares Vesting criteria Bernard Aylward Mohamed Niare --------------------------- --------------------- Award of mining licence Up to 30 million Up to 10 million New Ordinary Shares New Ordinary Shares (capped at value (capped at value on vesting of GBP300,000) on vesting of GBP100,000) --------------------------- --------------------- Securing the finance Up to 40 million Up to 10 million for construction New Ordinary Shares New Ordinary Shares of the Bougouni mine (capped at value (capped at value on vesting of GBP400,000) on vesting of GBP100,000) --------------------------- --------------------- First commercial Up to 75 million Up to 10 million
production from the New Ordinary Shares New Ordinary Shares Bougouni Project (capped at value (capped at value on vesting of GBP750,000) on vesting of GBP100,000) --------------------------- --------------------- Total Up to 145 million Up to 30 million New Ordinary Shares New Ordinary Shares (capped at value (capped at value on vesting of GBP1.45m) on vesting of GBP300,000) --------------------------- ---------------------
In the event of a change of control of the Company, 50 per cent. of any unvested Performance Share Rights will vest immediately, provided that the Company's share price at the time of the change of control exceeds 0.34 pence, being the share price when the awards were made.
On 27 August 2021, options over Ordinary Shares were granted to Robert Wooldridge and Qingtao Zeng as set out in the table below. The Options are exercisable at 0.36 pence per share, with 50 per cent of the Options vesting immediately and the remaining 50 per cent. vesting in two equal tranches on the first and second anniversaries of the grant. All unvested options will vest immediately on a change of control of the Company.
Director Number of Options granted Robert Wooldridge 30,000,000 Qingtao Zeng 15,000,000 6. TAXATION Group Group Year ended Year ended 31 March 31 March 2023 2022 GBP GBP Taxation charge for the year - - ------------ ------------ Factors affecting the tax charge for the year Loss from continuing operations before income tax (1,461,054) (903,087) Tax at 19% (2022: 19%) (277,600) (171,587) Expenses not deductible 636 - Losses carried forward not deductible 178,814 106,440 Deferred tax differences 98,150 65,147 Income tax expense - - ============ ============
The Group has tax losses and other potential deferred tax assets (including in relation to share options) totalling GBP3,759,000 (2022: GBP2,978,000) which will be able to be offset against future income. No deferred tax asset has been recognised in respect of these losses as the timing of their utilisation is uncertain at this stage.
7. INTANGIBLE ASSETS Exploration and evaluation GROUP GBP COST At 1 April 2021 8,964,089 Additions in the year 2,546,686 Effects of foreign exchange (68,372) ---------------- At 1 April 2022 11,442,403 Additions in the year 3,226,956 Classified as held for sale (513,109) Effects of foreign exchange 365,638 ---------------- At 31 March 2023 14,521,888 AMORTISATION At 1 April 2021 and 1 April 2022 and 31 March 2023 - ---------------- NET BOOK VALUES At 31 March 2023 14,521,888 ================ At 31 March 2022 11,442,403 ================ At 31 March 2021 8,964,089 ================ Group Group 31 March 31 March 2023 2022 GBP GBP Non-current assets 513,109 - classified as held for sale -------------------- --------- --------- 513,109 - -------------------- --------- ---------
On 19 April 2023, the Company announced the sale of the Bougouni West project, further details on which are
disclosed in Note 18. The Bougouni West project was held as an asset for sale at 31 March 2023. 8. PROPERTY, PLANT AND EQUIPMENT Plant and machinery GROUP GBP COST 1 April 2021 26,079 Additions in the year 1,600 Effects of foreign exchange (47) ----------- At 1 April 2022 27,633 Additions in the year 103,633 Effects of foreign exchange 137 ----------- At 31 March 2023 131,403 DEPRECIATION At 1 April 2021 17,402 Depreciation charge 6,922 At 1 April 2022 24,324 Depreciation charge 15,308 At 31 March 2023 39,632 ----------- NET BOOK VALUES At 31 March 2023 91,771 =========== At 31 March 2022 3,309 =========== At 31 March 2021 8,677 ===========
All tangible assets are wholly associated with exploration and development projects and therefore the amounts charged in respect of depreciation are capitalised as evaluation and exploration assets within intangible assets.
9. SUBSIDIARY UNDERTAKINGS
The consolidated financial statements include the following subsidiary companies:
Country Registered office Equity Nature Company Subsidiary of holding of of incorporation business Kodal Norway Kodal Minerals United Prince Frederick 100% Operating (UK) Ltd Plc Kingdom House, company 35-39 Maddox Street, London W1S 2PP International Kodal Minerals Bermuda MQ Services Ltd 100% Holding Goldfields Plc Victoria Place, company (Bermuda) Limited 31 Victoria Street, Hamilton HM 10 Bermuda International International Côte Abidjan Cocody 100% Mining Goldfields Goldfields d'Ivoire Les Deux Plateaux exploration Côte d'Ivoire (Bermuda) 7eme Tranche SARL Limited BP Abidjan Côte d'Ivoire International International Mali Bamako, Faladi, 100% Mining Goldfields Goldfields Mali Univers, Rue exploration Mali SARL (Bermuda) 886 B, Porte 487 Limited Mali Jigsaw Resources International Bermuda MQ Services Ltd 100% Holding CIV Ltd Goldfields Victoria Place, company (Bermuda) 31 Victoria Street, Limited Hamilton HM 10 Bermuda Corvette CIV Jigsaw Côte Abidjan Cocody 100% Mining SARL Resources d'Ivoire Les Deux Plateaux exploration CIV Ltd 7eme Tranche BP Abidjan Côte d'Ivoire Future Minerals International Mali Bamako, Faladi, 100% Mining SARL Goldfields Mali Univers, Rue exploration (Bermuda) 886 B, Porte 487 Limited Mali Kodal Mining Kodal Minerals United Prince Frederick 100% Mining UK Limited Plc Kingdon House, exploration 35-39 Maddox Street, London W1S 2PP 10. OTHER RECEIVABLES
Group Group 31 March 31 March 2023 2022 GBP GBP Other receivables 11,175 5,769 11,175 5,769
All receivables at each reporting date are current. No receivables are past due. The Directors consider that the carrying amount of the other receivables approximates their fair value and there are no expected credit losses.
11. TRADE AND OTHER PAYABLES Group Group 31 March 31 March 2023 2022 GBP GBP Trade payables 616,877 348,505 Other payables 183,130 57,836 800,007 406,341
All trade and other payables at each reporting date are current. The Directors consider that the carrying amount of the trade and other payables approximates their fair value.
12. SHARE CAPITAL Note Nominal Number of Share Capital Share Value Ordinary GBP Premium Shares GBP At 31 March 2021 15,732,363,511 4,916,364 15,841,134 May 2021 a GBP0.0003125 48,790,008 15,247 14,515 May 2021 b GBP0.0003125 31,565,656 9,864 18,545 November 2021 c GBP0.0003125 19,583,212 6,120 58,877 At 31 March 2022 15,832,302,387 4,947,595 15,933,071 May 2022 d GBP0.0003125 1,071,428,569 334,821 2,522,964 March 2023 e GBP0.0003125 106,250,000 33,203 309,171 ----------------- -------------- ------------- At 31 March 2023 17,009,980,956 5,315,619 18,765,206 ----------------- -------------- -------------
a) On 18 May 2021, a total of 48,790,008 shares were issued to the Investors at a price of 0.061 pence per share in connection with the exercise of warrants.
b) On 18 May 2021, a total of 31,565,656 shares were issued to the Investors at a price of 0.09 pence per share in connection with the exercise of warrants.
c) On 5 November 2021, a total of 19,583,212 shares were issued pursuant to the Company's agreement with Bambara Resources SARL at 0.3319p per share.
d) On 10 May 2022, a total of 1,071,428,569 shares were issued via a placing and subscription at a price of 0.28 pence per share.
e) On 20 March 2023, a total of 106,250,000 shares were issued pursuant to the exercise of options, warrants and Performance Share Rights from certain directors, senior management and consultants of the Company. The shares were issued at between 0.14 and 0.38 pence per share.
13. RESERVES Reserve Description and purpose Share premium Amount subscribed for share capital in excess of nominal value. Share based Cumulative fair value of options and share rights payment reserve recognised as an expense. Upon exercise of options or share rights, any proceeds received are credited to share capital. The share-based payment reserve remains as a separate component of equity. Translation Gains/losses arising on re-translating the net reserve assets of overseas operations into sterling. Retained earnings Cumulative net gains and losses recognised in the consolidated statement of financial position. 14. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT
The Group's principal financial instruments comprise cash and cash equivalents, other receivables and trade and other payables.
The main purpose of cash and cash equivalents is to finance the Group's operations. The Group's other financial assets and liabilities such as other receivables and trade and other payables, arise directly from its operations.
It has been the Group's policy, throughout the periods presented in the consolidated financial statements, that no trading in financial instruments was to be undertaken, and no such instruments were entered in to.
The main risk arising from the Group's financial instruments is market risk. The Directors consider other risks to be more minor, and these are summarised below. The Board reviews and agrees policies for managing each of these risks.
Market risk
Market risk is the risk that changes in market prices, and market factors such as foreign exchange rates and interest rates will affect the Group's results or the value of its assets and liabilities.
The objective of market risk management is to manage and control market risk exposures within acceptable parameters while optimising the return.
Interest rate risk
The Group does not have any borrowings and does not pay interest.
The Group's exposure to the risks of changes in market interest rates relates primarily to the Group's cash and cash equivalents with a floating interest rate. These financial assets with variable rates expose the Group to interest rate risk. All other financial assets and liabilities in the form of receivables and payables are non-interest bearing.
In regard to its interest rate risk, the Group periodically analyses its exposure. Within this analysis consideration is given to alternative investments and the mix of fixed and variable interest rates. The Group does not engage in any hedging or derivative transactions to manage interest rate risk.
The Group in the year to 31 March 2023 earned interest of GBPnil (2022: GBPnil). Due to the Group's relatively low level of interest-bearing assets and the very low interest rates available in the market the Group is not exposed to any significant interest rate risk.
Credit risk
Credit risk refers to the risk that a counterparty could default on its contractual obligations resulting in financial loss to the Group. The Group's principal financial assets are cash balances and other receivables.
The Group has adopted a policy of only dealing with what it believes to be creditworthy counterparties and would consider obtaining sufficient collateral where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group's exposure to and the credit ratings of its counterparties are continuously monitored. An allowance for impairment is made where there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables concerned.
Other receivables consist primarily of prepayments and other sundry receivables and none of the amounts included therein are past due or impaired.
Financial instruments by category - Group
Other financial Financial liabilities assets at amortised Total at amortised cost cost 31 March 2023 Assets Other receivables 11,175 - 11,175 Cash and cash equivalents 544,988 - 544,988 --------------- ---------------- ------------ Total 556,163 - 556,163 =============== ================ ============ Liabilities Trade and other payables - (800,007) (800,007) --------------- ---------------- ------------ Total - (800,007) (800,007) =============== ================ ============ 31 March 2022 Assets Other receivables 5,769 - 5,769 Cash and cash equivalents 1,045,515 - 1,045,515 ------------ ------------ ------------ Total 1,051,284 - 1,051,284 ============ ============ ============ Liabilities Trade and other payables - (406,341) (406,341) ------------ ------------ ------------ Total - (406,341) (406,341) ============ ============ ============
Foreign exchange risk
Throughout the periods presented in the consolidated financial statements, the functional currency for the Group's West African subsidiaries has been the CFA Franc.
The Group incurs certain exploration costs in the CFA Franc, US Dollars, Australian Dollars and South African Rand and has exposure to foreign exchange rates prevailing at the dates when Sterling funds are translated into other currencies. The CFA Franc has a fixed exchange rate to the Euro and the Group therefore has exposure to movements in the Sterling : Euro exchange rate. The Group has not hedged against this foreign exchange risk as the Directors do not consider that the level of exposure poses a significant risk.
The Group continues to keep the matter under review as further exploration and evaluation work is performed in West Africa and other countries and will develop currency risk mitigation procedures if the significance of this risk materially increases.
The Group's consolidated financial statements have a low sensitivity to changes in exchange due to the low value of assets and liabilities (principally cash balances) maintained in foreign currencies. Once any project moves into the development phase a greater proportion of expenditure is expected to be denominated in foreign currencies which may increase the foreign exchange risk.
Financial instruments by currency - Group
GBP USD ZAR AUD XOF Total 31 March 2023 Assets Other receivables 11,175 - - - - 11,175 Cash and cash equivalents 425,704 - - - 119,284 544,988 ------------ ------------ ----------- ----------- ----------- ------------ Total 436,879 - - - 119,284 556,163 Liabilities Trade and other payables (122,278) (446,098) (98,621) (65,094) (67,916) (800,007) ------------ ------------ ----------- ----------- =========== ------------ GBP USD ZAR AUD XOF Total 31 March 2022 Assets Other receivables 5,769 - - - - 5,769 Cash and cash equivalents 949,850 - - - 95,665 1,045,515 ---------- ---------- ---- --------- --------- ------------ Total 955,619 - - - 95,665 1,051,284 ========= Liabilities Trade and other payables (64,671) (304,145) - (36,289) (1,236) (406,341) ---------- ---------- ---- --------- ========= ------------
Liquidity risk
Liquidity risk is the risk that the entity will not be able to meet its financial obligations as they fall due.
The objective of managing liquidity risk is to ensure, as far as possible, that the Group will always have sufficient liquidity to meet its liabilities when they fall due, under both normal and stressed conditions.
The Group has established policies and processes to manage liquidity risk. These include:
-- Monitoring the maturity profiles of financial assets and liabilities in order to match inflows and outflows;
-- Monitoring liquidity ratios (working capital); and -- Capital management procedures, as defined below.
Capital management
The Group's objective when managing capital is to ensure that adequate funding and resources are obtained to enable it to develop its projects through to profitable production, whilst in the meantime safeguarding the Group's ability to continue as a going concern. This is to enable the Group, once projects become commercially and technically viable, to provide appropriate returns for shareholders and benefits for other stakeholders.
The Group has historically relied on equity to finance its growth and exploration activity, raised through the issue of shares. In the future, the Board will utilise financing sources, be that debt or equity, that best suits the Group's working capital requirements and taking into account the prevailing market conditions.
Fair value
The fair value of the financial assets and financial liabilities of the Group, at each reporting date, approximates to their carrying amount as disclosed in the Statement of Financial Position and in the related notes.
The fair values of the financial assets and liabilities are included at the amounts at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.
The cash and cash equivalents, other receivables, trade payables and other current liabilities approximate their carrying value amounts largely due to the short-term maturities of these instruments.
Disclosure of financial instruments and financial risk management for the Company has not been performed as they are not significantly different from the Group's position described above.
15. RELATED PARTY TRANSACTIONS
The Directors represent the key management personnel of the Group and details of their remuneration are provided in note 3.
Robert Wooldridge, a director, is a member of SP Angel Corporate Finance LLP ("SP Angel") which acts as financial adviser and broker to the Company. During the year ended 31 March 2023, the Company paid fees to SP Angel of GBP173,605 (2022: GBP30,000). The increase compared to prior year reflects SP Angel's provision of broker services in relation to the GBP3 million fundraising in May 2022. The balance due to SP Angel at 31 March 2023 was GBPnil (2022: GBPnil).
Matlock Geological Services Pty Ltd ("Matlock") a company wholly owned by Bernard Aylward, a director, provided consultancy services to the Group during the year ended 31 March 2023 and received fees of GBP139,514 (2022: GBP97,450). These fees are included within the remuneration figure shown for Bernard Aylward in note 3. The balance due to Matlock at 31 March 2023 was GBPnil (2022: GBPnil).
Geosmart Consulting Pty Ltd ("Geosmart"), a company wholly owned by Qingtao Zeng, a director, provided consultancy services to the Group during the year ended 31 March 2023 and received fees of GBP24,627 (2022: GBP27,136). The balance due to Geosmart at 31 March 2023 was GBPnil (2022: GBP14,528).
Zivvo Pty Ltd ("Zivvo"), a company wholly owned by Steven Zaninovich, a Director, provided consultancy services to the Group. Steven Zaninovich was appointed as a Director on 27 July 2022 and between that date and 31 March 2023, Zivvo received fees of GBP140,000. These fees are included within the remuneration figure shown for Steven Zaninovich in note 3. The balance due to Zivvo at 31 March 2023 was GBPnil.
16. CONTROL
No one party is identified as controlling the Group.
17. CAPITAL COMMITMENTS
The Group had capital commitments to exploration and evaluation expenditure of GBPnil (2022: GBPnil).
18. EVENTS AFTER THE REPORTING PERIOD
On 19 April 2023, the Company announced the sale of the Bougouni West project for a total cash consideration for Kodal of GBP2.0 million to Leo Lithium Ltd. The Bougouni West project comprised two concessions, Mafélé Ouest and N'kemene Ouest (the "Concessions"). Kodal entered into a binding agreement with Leo Lithium Ltd to sell the Mafélé Ouest concession and agreed terms for the sale of the N'kemene Ouest concession, conditional on renewal of the licence. The Bougouni West project was held as an asset for sale at the year end.
On 3 August, the Company announced receipt of a conditional prepayment of US$3.5 million as part of the funding package for the Bougouni Lithium Project between the Company and Hainan Mining Co. Limited and its wholly owned UK-incorporated subsidiary Xinmao Investment Co. Limited. The prepayment is repayable or, at the discretion of Hainan Mining Co. Limited, convertible into new ordinary shares in the Company should the funding agreement not proceed.
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September 06, 2023 02:00 ET (06:00 GMT)
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