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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 | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.415 | 0.40 | 0.43 | 0.415 | 0.415 | 0.415 | 16,147,155 | 08:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Misc Nonmtl Minrls, Ex Fuels | 0 | -1.46M | -0.0001 | -41.00 | 82.99M |
From Apr 2019 to Apr 2024
TIDMKOD
RNS Number : 8006K
Kodal Minerals PLC
02 September 2019
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR")
Kodal Minerals Plc / Index: AIM / Epic: KOD / Sector: Mining
2 September 2019
Kodal Minerals plc ('Kodal Minerals' or the 'Company')
Final Results
Kodal Minerals, the mineral exploration and development company focused on its Bougouni Lithium Project in southern Mali (the 'Project', 'Bougouni', or the 'Bougouni Project'), is pleased to announce its audited final results for the year ended 31 March 2019.
The Company's Annual Report and Accounts is being posted to shareholders later this week and will be made available on the Company's website www.kodalminerals.com. It will contain notice of the Annual General Meeting of the Company to be held at 12.00pm on Monday 30 September 2019 at Fieldfisher LLP, 9th Floor, Riverbank House, 2 Swan Lane, London, EC4R 3TT.
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 2019.
This has been a very significant year for the Group with our focus on advancing our flagship Bougouni Lithium Project in southern Mali towards development. We have completed and documented all technical and social requirements for our Environmental and Social Impact Assessment ("ESIA") and lodged this report with the environmental control department within the Mali government in August 2019. There is now a process of review and discussion with the government department following which an updated and final EISA report will be submitted with a final decision to be delivered within the statutory 45-day approval period from this final submission date. The Group has developed strong relations with the local community and relevant government departments, and this is reflected in the very positive feedback the Group has received to its activities at, and plans for, the Bougouni Lithium Project.
Importantly, in addition to the ESIA, the Group has been continuing to work towards completing the feasibility study for the development of a mining and processing operation at Bougouni to support the Group 's application for a mining licence. The feasibility work is based on the updated JORC Mineral Resource estimate that was announced in March 2019 as well as extensive engineering reviews, processing assessments and metallurgical studies undertaken by the Group utilising leading consultants with expertise in lithium mining and processing. The metallurgical test work programme has taken longer to complete than initially expected as the Group has expanded the testing to de-risk the project as we look to finalise the preferred processing plant design. These activities have been overseen by our Project Manager Steve Zaninovich who was appointed in November 2018. This has been a key appointment for Kodal as we look to transition to a development and mining company. The feasibility study will form the basis of our submission for a mining licence at Bougouni, which we expect to file before the end of 2019.
The Group has continued with a limited exploration work programme to seek to expand the JORC resource at Bougouni as well as target new exploration targets both at Bougouni and within the new "Bougouni West" licence areas acquired in January 2019.
In addition to our technical work, the Company has strengthened its Board of Directors as it looks to evolve into a development and mining company. The appointment of Charles Joseland as non-executive director and Chair of our Audit and Risk Committee adds extensive corporate, accounting and financial experience to our team, and the appointment of Mark Pensabene as a non-executive director further adds current technical expertise in lithium mine development. The Board would also like to thank Luke Bryan, who stepped down as a director after the year end, for all his efforts on behalf of the Company.
The Group has continued to maintain its suite of West African gold projects and has been able to announce an update of successful gold exploration by our Joint Venture partner in Cote d'Ivoire and we look forward to reporting further exploration results.
Kodal has been able to maintain its funding through the support of its shareholders and we look forward to being able to report back to you during the year as our Group proceeds through the approval and permitting phase of the Bougouni Lithium Project and then the exciting phase of project development and mining.
Robert Wooldridge
Non-executive Chairman
30 August 2019
OPERATIONAL REVIEW
Kodal's operational focus during this year has been the advancement of our key Bougouni Lithium Project with the update of our JORC Mineral Resource to contain a large portion of "Indicated" status resource, and the continuation of our engineering development including mining optimisation, processing plant review and our metallurgical studies. The Company has completed the ESIA report and lodged it with the Mali government following an extensive period of environmental review and social consultation.
The engineering and processing work programme has been designed to allow the Company to complete a feasibility study to support its application for a mining licence at Bougouni. The Company has undertaken extensive metallurgical testing that has indicated very positive metallurgical recoveries for the Bougouni mineralisation and the Company is completing the process flowsheet that will be implemented in the proposed processing plant. The Company has also organised site visits for specialist engineers reviewing the Project for logistical support, open pit mining, geotechnical assessment and the management of water storage and tailings management. This engineering overview will be utilised by the Company in finalising the open pit mining optimisation studies and preparing a mining schedule that will allow the Company to complete the feasibility study and submit its application for a mining licence.
In addition to the focus on the engineering and development of our project, the Company has maintained an exploration drilling campaign at Bougouni to continue to define lithium mineralisation to support a long-life mining operation at Bougouni. In addition, the Company has undertaken a maiden drilling programme at our newly acquired Bougouni West project. The Bougouni West project consists of the Mafele Ouest and Nkemene Ouest concessions totalling 200km(2) located within 25km of Kodal's advanced Bougouni Lithium Project in which the Company has the right to acquire an 80% interest via an option agreement entered into in January 2019 as detailed further below.
This Operational Review details the status of the West African concessions and rights for both our lithium exploration projects and our gold projects and provides a summary of the project development work and an update on the ESIA and exploration activities. Finally, we will provide an outline of the proposed activities for the coming year.
Concession and Exploration Licence Review
Lithium Projects
Kodal's Bougouni, Bougouni West and Diendio lithium exploration projects are located in southern Mali, with the rights and concessions held by subsidiary company Future Minerals SARL ("Future Minerals"), a Malian registered company owned 100% by the Group.
For the Bougouni Project, the Dogobola and Foulalaba concessions are held directly in the name of Future Minerals, with Kodal holding a 90% economic interest in the concessions. In addition, Future Minerals holds a 90% interest in the Madina concession via an option to purchase agreement that grants Kodal exclusive rights to explore and exploit all minerals in the licence areas and the right to become the registered holder of the licence. Kodal has completed all required payments for the Madina concession an application for an additional year of validity has been lodged; a letter from DNGM has been received confirming receipt of the application and the pre-emptive right to the ground.
As highlighted above, Kodal acquired the exclusive rights to explore, and an option to acquire, the Bougouni West licences of Mafele Ouest and Nkemene Ouest via agreed staged payments made under an agreement entered into in January 2019 ("the Agreement"). The Agreement is with a local Malian company Bambara Resources SARL ("Bambara"), and under the terms of the Agreement, Kodal and/or Future Minerals will be required to make the following payments to Bambara in order to secure access to the concessions and acquire the 80% interest:
-- upon signing the Agreement on 30 January 2019, GBP35,000 in cash and GBP65,000 in new ordinary shares in Kodal, issued at mid-market closing price; this payment has been completed and the shares were issued in February 2019.
-- six months after the execution of the Agreement on 30 July 2019, GBP70,000 in cash and GBP65,000 in new ordinary shares in Kodal, issued at a price equivalent to the 10-day VWAP (volume weighted average price) of Kodal ordinary shares prior to the payment date.
-- 12 months after the execution of the Agreement on 30 January 2020, GBP80,000 in cash and GBP65,000 in new ordinary shares in Kodal, issued at a price equivalent to the 10-day VWAP (volume weighted average price) of Kodal ordinary shares prior to the payment date.
For the Diendio project Kodal has completed the staged payments that were due under the original option to purchase agreements and is now the beneficial owner of 100% of the licences and is finalising the transfer of the licences to the name of Future Minerals, a wholly owned subsidiary of Kodal Minerals PLC.
The lithium project licences are tabled below:
Table of Concessions - Mali Lithium projects
Hot Features
Premium
Tenements Country Kodal Economic Project / Validity
Ownership Joint Venture
Dogobala Mali 90% economic Bougouni Licence valid and in good
interest via standing. Arrêté
direct ownership No. 2018-1115 granted
following completion on 13 April 2018 for initial
of option payments 3-year period, with option
for 2 extensions of 2
years validity each
-------- ---------------------- --------------- ------------------------------
Foulaboula Mali 90% economic Bougouni Licence valid and in good
interest via standing. Arrêté
direct ownership No. 2018-1116 granted
following completion on 13 April 2018 for initial
of option payments 3-year period, with option
for 2 extensions of 2
years validity each
-------- ---------------------- --------------- ------------------------------
Madina Mali Held through Bougouni Licence valid and in good
Option to Purchase standing. Second renewal
giving right granted on 19 September
to acquire 2017, valid for 2-year
90% economic period. Application for
interest an additional year of
validity has been lodged.
A letter from DNGM has
been received confirming
receipt of the application
and the pre-emptive right
to the ground.
-------- ---------------------- --------------- ------------------------------
Mafele Mali Held through Bougouni Licence valid and in good
Ouest Option to Purchase West standing. Arrêté
giving right No. 2018-4537 granted
to acquire on 31 December 2018 for
80% economic initial 3-year period,
interest with option for 2 extensions
of 2 years validity each
-------- ---------------------- --------------- ------------------------------
NKemene Mali Held through Bougouni Licence valid and in good
Ouest Option to Purchase West standing. Arrêté
giving right No. 2018-4486 granted
to acquire on 28 December 2018 for
80% economic initial 3-year period,
interest with option for 2 extensions
of 2 years validity each
-------- ---------------------- --------------- ------------------------------
Diendio Mali 100% direct Diendio Licence valid and in good
Sud ownership following standing. Second renewal
completion granted on 17 October
of option payments 2017 for a 2-year period.
Transfer to Future Minerals
to be finalised
-------- ---------------------- --------------- ------------------------------
Diossyan Mali 100% direct Diendio Licence valid and in good
Sud ownership following standing. Second renewal
completion granted on 17 October
of option payments 2017 for a 2-year period
Transfer to Future Minerals
to be finalised
-------- ---------------------- --------------- ------------------------------
Manankoro Mali 100% direct Diendio Licence valid and in good
Nord ownership following standing. Arrêté
completion No. 2018-3609 granted
of option payments on 16 October 2018 for
an initial 3 years with
option for 2 extensions
of 2 years validity each.
Transfer to Future Minerals
to be finalised
-------- ---------------------- --------------- ------------------------------
All licences remain valid and in good standing. All fees have been paid and reports lodged with the Directorate Nationale de la Géologie et des Mines ("DNGM", Malian National Directorate of Geology and Mines). The new concessions of Dogobola and Foulalaba are replacing the former Kolassokora concession.
Gold Projects
The Group's Gold Projects are located in Côte d'Ivoire and Mali and consist of licences either directly 100% owned by the Group or held via option agreements granting the Group exclusive rights to explore and exploit minerals over the area and containing a right to purchase the licences. In Mali, the licences are held through subsidiary company International Goldfields Mali SARL ("IGS Mali"), a Malian registered company, and in Côte d'Ivoire by International Goldfields Côte d'Ivoire SARL ("IGS CIV") and Corvette SARL ("Corvette"), Côte d'Ivoire registered companies.
In Mali, the Group has two projects, the Nangalasso Project (including the Nangalasso, Sotian and Tiedougoubougou licence areas) and the SLAM Project (the Djelibani Sud licence). Kodal is now the 100% beneficial owner of the Nangalasso project concessions following completion of all payments due under the original option to purchase agreements. For the SLAM Project, the Djelibani Sud licence is held by the Kodal subsidiary company IGS Mali SARL. The licence area has been renewed as a new mining convention application and a new arrêté will be applied for when the paperwork confirming the grant of the convention is received. The Company has reviewed the Kambali licence and following discussions with the DNGM considers that the potential for an extension of the licence to be granted is low and consequentially the Company considers the licence no longer to be valid and has removed the licence from the table of concessions.
In Côte d'Ivoire, the Group is the 100% owner of the Korhogo and Dabakala licences having secured the licence via direct Government application and is applying for the Boundiali licence. The Group is also continuing with an active joint venture in Côte d'Ivoire (covering the Tiebissou and Nielle licences and the M'Bahiakro application), with Resolute Mining Limited ("Resolute") which is responsible for the maintenance and good standing of the licences.
The gold exploration licences are tabled below:
Table of Licences - Gold Exploration projects
Tenements Country Kodal Economic Project Validity
Ownership / Joint
Venture
Boundiali Côte 100% direct Licence application
d'Ivoire ownership submitted and in process.
(under application)
---------- --------------------- ------------- ----------------------------------
Korhogo Côte 100% direct Licence valid and in
d'Ivoire ownership good standing. Renewal
granted on 19 September
2017 for a 3-year term
---------- --------------------- ------------- ----------------------------------
Dabakala Côte 100% direct Licence valid and in
d'Ivoire ownership good standing. Renewal
granted on 19 September
2017 for a 3-year term
---------- --------------------- ------------- ----------------------------------
Niéllé Côte 100% direct Resolute Licence valid and in
d'Ivoire ownership, JV good standing. Initial
may be reduced licence expired on 7
to 25% under January 2017, and Renewal
JV agreement decree received on the
28 February 2018 for
a 3-year period.
---------- --------------------- ------------- ----------------------------------
Tiebissou Côte 100% direct Resolute Licence valid and in
d'Ivoire ownership, JV good standing. Initial
may be reduced term expired 30 September
to 25% under 2018. An application
JV agreement for first renewal has
been lodged, and acknowledged.
---------- --------------------- ------------- ----------------------------------
M'Bahiakro Côte 100% direct Resolute Licence application
d'Ivoire ownership, JV submitted and in process.
may be reduced
to 25% under
JV agreement
---------- --------------------- ------------- ----------------------------------
Djelibani Sud Mali 100% direct SLAM Project Convention d'Etablissement
ownership granted on 21 December
2018.
Application for Arrêté
made and remains pending.
---------- --------------------- ------------- ----------------------------------
Nangalasso Mali 100% direct Nangalasso First renewal of licence
ownership Project granted on 1 November
following 2017; valid for 2 years
completion with a further 2-year
of option renewal available
payments
---------- --------------------- ------------- ----------------------------------
Sotian Mali Held through Nangalasso Arrêté No.
Option Agreement Project 2018-1925 granted on
giving right 12 June 2018 for initial
to acquire 3-year period, with
100% ownership. option for 2 extensions
of 2 years validity
each
---------- --------------------- ------------- ----------------------------------
Tiedougoubougou Mali Held through Nangalasso Arrêté No.
Option Agreement Project 2018-3319 granted on
giving right 4 September 2018 for
to acquire initial 3-year period,
100% ownership. with option for 2 extensions
of 2 years validity
each
---------- --------------------- ------------- ----------------------------------
All licences remain valid and in good standing pending receipt of formal documents for renewals or arrêtés. In Côte d'Ivoire, the Group is continuing to pursue the Boundiali and M'Bahaikro applications with the Direction Generale des Mines et de la Geologie and is looking to advance the process this year and finalise the renewal of the Tiebissou concession.
Bougouni Project Mineral Resource Estimate
Kodal released an updated JORC Mineral Resource estimate for Bougouni in February 2019 of 21.3Mt at 1.11% Li2O, with 11.6Mt at 1.13% Li2O in the Indicated category and 9.7Mt at 1.08% Li2O in the Inferred category. Further details are set out below:
Prospect Indicated Inferred Total
Contained Contained Contained
Li(2) Li(2) Li(2) Li(2) Li(2) Li(2)
Tonnes O% O Tonnes O% O Tonnes O% O
(Mt) Grade (kt) (Mt) Grade (kt) (Mt) Grade (kt)
------- ------- ---------- ------- ------- ---------- ------- ------- ----------
Sogola_Baoule 8.4 1.09 91.9 3.8 1.13 42.8 12.2 1.10 134.8
------- ------- ---------- ------- ------- ---------- ------- ------- ----------
Ngoualana 3.1 1.25 39.2 2.0 1.12 22.1 5.1 1.20 61.3
------- ------- ---------- ------- ------- ---------- ------- ------- ----------
Boumou 4.0 1.02 40.4 4.0 1.02 40.4
------- ------- ---------- ------- ------- ---------- ------- ------- ----------
TOTAL 11.6 1.13 131.2 9.7 1.08 105.3 21.3 1.11 236.5
------- ------- ---------- ------- ------- ---------- ------- ------- ----------
Notes: Mineral resources are reported using a 0.5%Li(2) O cut-off. Figures may not sum due to rounding. The contained metal is determined by the estimated tonnage and grade.
The estimate was prepared by independent geological consultants CSA Global. Kodal supplied a geological database and verified the geological interpretation that was used to define the lithium mineralised pegmatite bodies. Resource updates were completed for the Sogola-Baoule, Ngoualana and Boumou prospects following additional drilling and a site visit completed by the independent resource geologist from CSA Global. The resource is reported using a lower cut-off grade of 0.5% Li(2) O; no upper cut-off has been used. This application of a lower cut-off applies a potential economic constraint to the resource estimate.
The geological interpretation has demonstrated strong continuity of mineralisation in the major pegmatite veins as well as the smaller subsidiary veins that have been identified in each prospect. The geological model developed for the maiden resource estimate has proven to be very reliable and demonstrated the high level of confidence in the Mineral Resource estimate.
Bougouni Project Development and Environmental Assessment
Kodal's focus is on the potential development of the flagship Bougouni Lithium Project. To continue to fast track this process the Company appointed Steve Zaninovich as the Project Manager in November 2018. Mr Zaninovich is a highly accomplished senior executive in the resources sector with more than 25 years' experience in project management encompassing all stages of mine development. Mr Zaninovich's most recent experience was with the delivery and successful commissioning of ASX-listed lithium producer Tawana Resources Ltd's Bald Hill Lithium Project in Western Australia.
The Company has continued to make significant steps in advancing the engineering operations at our Bougouni Lithium Project. The large amount of technical work that is currently underway represents significant components of our upcoming feasibility study and we are using the most experienced consultants to ensure we achieve the best result. Site visits have been completed by specialist engineering consultants to review the proposed mining project and current planned infrastructure layout. The studies have confirmed that the proposed processing facility site location is suitable as there is ample flat land for construction, very low risk of flooding, with minimal need for bulk earthworks for site preparation. In addition, suitable locations for the tailing's storage facility and water storage dams have been identified.
The work on optimisation of the potential open pits is continuing following the site visits by the consultant geotechnical engineer to assess the geology for open pit stability implications, as well as by the mine development engineers to review the proposed open pit areas and confirm the geological database.
An infrastructure specialist group based in West Africa has also completed a site visit to review and provide cost estimates for the development of site offices, maintenance areas, access roads and additional accommodation required.
Project Transport Review
The Company's management team has completed a site visit to the San Pedro port in Côte d'Ivoire. This is the preferred port for the export of the final lithium concentrate. A meeting was held with key representatives from the San Pedro Port Authority ("SPAP") who escorted the Company's management team on a tour of the facilities, including the bulk materials handling establishments. The SPAP is currently servicing exports of many bulk commodities, including iron ore and manganese concentrate, noting that iron ore export tonnes out of San Pedro are more than double the Company's future demands. Very positive feedback was received from the SPAP personnel, expressing their interest to assist with the project, and providing the confidence that the San Pedro Port has the knowledge and capacity to handle bulk material exports for the Bougouni Project.
The Company has also completed a route survey of the road between the Bougouni project and the San Pedro port to confirm the suitability for transport. In addition, the Company has received indicative pricing for the transport of material from a highly experienced shipping and logistics company with relevant experience in bulk commodity transport throughout West Africa. This information is being utilised in our mining optimisation studies.
Environmental and Social Impact Assessment ("ESIA")
In August 2019, Kodal submitted the ESIA report to the Direction Nationale De L'Assainissement et du Contrôle des Pollutions et des Nuisances ("DNACPN"), the governing administration for environmental matters in Mali.
This followed the completion of all specialist baseline studies relating to the soils, wetlands, surface water, social impact, heritage, closure planning and the community development plan. The Company utilised the services of specialist environmental consultants Digby Wells.
The community consultation was undertaken from 21 to 24 May 2019 and was attended by Kodal staff members as well as community leaders including regional officials of Prefet and Sous-Prefet, as well as the village chiefs and mayors of the two main communes of Bougouni and Kola. All sites were visited, and larger community meetings were held at local Mayoral offices to present the project, receive community questions and provide feedback.
Following formal ESIA submission, the DNACPN will send a delegation to the Bougouni site to conduct a standard validation visit, after which the delegation will attend a workshop session with the Company to provide their feedback on the ESIA. Following the incorporation of further material to address any matters raised by the DNACPN in this feedback session, an updated final ESIA submission is tendered, and the DNACPN statutory approval period of 45 days commences.
The Company has maintained close communication with the DNACPN and all relevant groups throughout the period of ESIA report preparation and anticipates no significant issues with the submission. The Company expects formal approval of the ESIA within the legislated timeframe.
Metallurgy Testwork
Initial metallurgical test work results reported in September 2018 indicated recoveries above 60% via a Dense Media Separation ("DMS") process, with the expectation that follow-up flotation test work would improve overall recoveries.
A metallurgical test work programme was established to test both conventional DMS and flotation circuit recoveries at the Bougouni Lithium Project, in support of the feasibility study. DMS test work via laboratory scale heavy liquid separation (HLS) was initially performed on the first pegmatite mineralisation discovery at the Ngoualana deposit, to provide "sighter" test work results to support the more extensive feasibility study programme.
The results from this first Ngoualana composite sample HLS (heavy liquid separation) test work with head grade of 1.42% showed encouraging results from the very coarse crush size, indicating an overall DMS recovery of 49.8% at a grade of 4.3% Li(2) O.
On the basis of the sighter testwork results, Kodal commissioned Independent Metallurgical Operations (IMO) in Perth, Western Australia, to carry out the feasibility study DMS HLS test work programme. Intervals for preparation of a master composite were selected across multiple diamond drill holes to spatially cover both the Sogola-Baoulé and Ngoualana deposits. As well as spatial distribution across both resources, the master composite was selected at a 70:30 ratio respectively, based on replicating the Indicated JORC Resource estimate distributions.
The results indicated the following:
-- For the master composite sample, a Li(2) O grade and recovery of 6.26% and 26.6% respectively at a 2.96 SG cut point from the -6.30 +0.50 mm size fraction;
-- An increase in recovery to approximately 30% lead to a decrease in Li(2) O grade to 6.0%;
-- As the particle size fraction tested decreased, so too did the recovery to a 6.00% Li(2) O grade concentrate, which indicates that spodumene liberation improved with decreasing particle size; and
-- Excellent liberation was demonstrated for particles coarser than 0.5mm with >60% recovery to 6.00% Li(2) O grade for particles in the 1.18 to 0.5 mm fractions.
The original sighter test work showed higher recoveries from HLS test work than was observed from the master composite results. The original sighter test work was conducted only on Ngoualana material, indicating that the coarser pegmatite grain structure at Ngoualana (as compared with the finer grains observed at Sogola-Baoulé and Boumou), is more amenable to DMS processing.
The master composite test work was followed up with four variability samples for separate HLS testing of Ngoualana and Sogola-Baoulé materials. This work confirmed that the unliberated spodumene in the master composite was attributable predominantly to Sogola-Baoulé and HLS recoveries are higher for Ngoualana samples when compared to Sogola-Baoulé, supporting the premise that the former is more amenable to DMS processing.
Feasibility Study Flotation Testwork Programme
On the basis of the HLS test work results above, Kodal commissioned Nagrom the Mineral Processor (Nagrom) in Perth, Western Australia, to carry out the feasibility study Flotation test work programme. The programme was supervised by the feasibility study plant engineering consultant, DRA Global (formerly Minnovo Pty Ltd) in Perth.
The master composite created for the DMS work was also used for the flotation development programme. Therefore, it also represented a 70:30, Sogola-Baoulé: Ngoualana, ratio. The assay produced a head grade of 1.27% Li(2) O, and low Fe(2) O(3) grade of 0.57%.
The programme demonstrated that the target final concentrate quality of 6% Li(2) O can be achieved using three stages of flotation (roughing and two stages of cleaning), once the ore has been effectively prepared by: rejection of slime particles (-20 micron), magnetic particles removal (via magnetic separation) and mica removal.
The results of the laboratory test work demonstrated that the Bougouni Lithium Project can achieve a 6% Li(2) O concentrate grade at 75% Li(2) O recovery with respect to feed.
Summary of the Metallurgical Test work Programme
Overall, the results of the metallurgical test work programme were very encouraging, confirming Ngoualana ores are amenable to simple, convention DMS processing, with further upgrade in recoveries possible using downstream flotation processing for all materials, to produce a saleable Li(2) O grade with recoveries in the order of 75%.
Forward Work Plan
DRA Global will utilise the results of the test work programme to finalise the feasibility study process flowsheet for upfront DMS processing of Ngoualana ores, followed by downstream flotation processing. The design concept for the Bougouni Lithium Project will be to defer installation of the flotation circuit to reduce upfront capital costs, given Ngoualana material is amenable to DMS only processing.
Bulk Sample
The Company has prepared a bulk sample of 980 tonnes of pegmatite from the Ngoualana deposit which is being shipped to the Ruifu Chemical plant in China to provide additional valuable information about the processing characteristics of the material via processing of the ore in an operation-scale plant. The results of the test work will then be combined with Kodal's ongoing metallurgical testing programme to finalise the processing plant design. The bulk sample has now been shipped from Dakar port and is currently en-route to China.
The original intention was to produce a bulk sample of 5,000 tonnes, but the Company terminated the bulk sample mining at Ngoualana early due to concerns over the performance of the contractor. In particular the key concerns identified by Kodal were the lack of experienced technical staff mobilised to the project and a lack of focus on safe work practices. The level of metallurgical studies combined with the 980 tonnes of material already extracted will provide sufficient detailed information for planning and the Company does not intend to re-commence the bulk sample to recover further tonnage at this stage.
Exploration Programme
The Company maintained an extensive drilling programme at the Bougouni Lithium project during the year, with an initial focus on the extension and definition of the Ngoualana, Sogola-Baoule and Boumou prospects that provided the foundation of the updated JORC Mineral Resource estimate that the Company announced in March 2019.
In addition to the definition drilling, Kodal has also continued reconnaissance exploration with exploration drilling completed at the new prospect "Marigo" in the Bougouni project and a maiden drilling programme at the new Bougouni West project where reconnaissance drilling will test initial targets within the Mafele concession.
The Marigo prospect is defined by geological mapping that identified outcropping pegmatite veins with abundant coarse spodumene minerals. The prospect is located mid-way between the Boumou and Sogola-Baoule prospects and the pegmatite veins are interpreted as striking in an east-west direction similar to the prospects in the region. The geological mapping of the prospect identified outcrop and sub-crop material extending for several hundred metres, and a ground magnetic geophysical survey highlighted structural control of the veins that has been targeted by this reconnaissance drilling. The drilling programme consisted of 4 drill holes for 474m with all holes intersecting pegmatite veins, with a thickest intersection of 22m from shallow depth in drill hole MDRC130. The drilling has been completed on a very wide spacing and will require follow up drilling to define the pegmatite veins and potential for additional mineralisation to be identified. The assay results are expected to be received shortly.
The Mafele concession is within the new Bougouni west project which is located approximately 25km to the west of the Bougouni Lithium Project and was acquired by Kodal in January 2019. This maiden drilling programme is a reconnaissance drill test of several geological and geophysical targets. Kodal's exploration team has completed initial geological mapping and a ground geophysical survey. The concession area is largely covered by transported material and outcropping geology is very limited. The exploration team has defined initial targets based on interpretation of the geology and geophysics and comparison to the neighbouring Goulamina concession owned by Mali Lithium Limited (formerly Birimian Limited) and host to the Goulamina resource of 103Mt at 1.3%Li(2) O. The assay results are expected to be received shortly.
Gold Projects - Exploration Review
Kodal maintains a suite of gold exploration projects in Mali and Cote d'Ivoire. Kodal has managed the Mali projects directly and has renewed tenure where possible and maintains the licences in good standing. Kodal continues to review these gold projects and look for opportunities to generate value for shareholders. For the licences in Côte d'Ivoire 100% owned by Kodal, the Company has maintained good standing with continuing exploration review and fieldwork on the Korhogo and Dabakala projects.
Resolute Joint Venture
The Tiebissou and, Nielle licences and the M'Bahiakro application in Côte d'Ivoire are held under a Joint Venture with Resolute Mining Limited ("Resolute").
Kodal is the 100% owner of the Cote d'Ivoire registered company Corvette SARL and the Resolute Joint Venture is with this subsidiary whereby Resolute is required to spend a minimum of US$3 million on the three licences to earn a 75% interest. Resolute has spent approximately US$1.35 million on exploration for the Joint Venture with programmes of work consisting of geological mapping, geochemical sampling and drilling completed at the Tiebissou and Nielle licences. The exploration programme is focussed on continued drilling and definition at the Nielle licence and, when granted, undertaking early stage reconnaissance exploration at the M'Bahiakro licence. Kodal has agreed to extend the earn-in period of the Joint Venture as the exploration programme is active and continuing to return encouraging results and there have been delays in finalising concession extensions and grants. The earn-in period has been extended to a final date of 25 February 2021 with the previous date being 25 February 2019. Kodal will remain "free carried" through to completion of a Feasibility Study.
Resolute has been exploring the Nielle licence, located in the north of Côte d'Ivoire approximately 50km to the north of the Tongon Gold mine operated by Randgold Resources Limited. Exploration completed during this year has consisted of a programme of reverse circulation drilling ("RC") with a total of 28 RC drill holes for 3,135m completed (one failed hole for 18m included) with a total of 1,722 composite samples collected (including QAQC). Drilling was completed on a 100m spaced section with 50m between drill holes. A strike length of 1,100m has been targeted by this initial reconnaissance RC drilling programme and further drilling is required to define the mineralisation. All samples were analysed by fire assay with a 0.01g/t gold detection limit. Significant intersections include:
o 10m at 2.00g/t gold from 26m in drill hole NLRC0004;
o 8m at 4.26g/t gold from 8m in drill hole NLRC0006
Including 2m at 11.63g/t gold from 10m;
o 14m at 1.73g/t gold from 26m in drill hole NLRC0008;
o 26m at 1.95g/t gold from 32m in drill hole NLRC0012;
Including 4m at 5.51g/t gold from 42m; and
o 26m at 1.79g/t gold from 108m in drill hole NLRC0018;
Including 2m at 6.07g/t gold from 110m.
These results confirm wide zones of gold mineralisation, with areas of high-grade gold up to 13.88g/t gold over 2m returned. The next phase of exploration will focus on continuing to extend the anomalous mineralisation along strike and undertake infill drilling to attempt to define continuity of high-grade mineralisation.
Future Strategy and Work programme for 2019/20
The focus of the Company is on the development of the Bougouni Lithium Project and the commencement of a mining and processing operation on site. To this end, the Company has finalised and submitted an ESIA application, approval of which is pending. Following approval of the ESIA, the Company expects to finalise its application for a mining licence and to lodge it with the Mali government before the end of 2019.
The Company anticipates approval of the mining licence permit in the first half of 2020 and following this the Company will be working to complete mine and processing design with an objective of moving to construction as soon as possible.
In addition to the move to mining development, the Company will continue with its successful exploration programme at the Bougouni Lithium Project where high priority exploration targets have been identified for reconnaissance drilling as well as the further extension and definition drilling of the defined Mineral Resource areas that can add future mineralisation to the mine plan. The Company will also continue the reconnaissance exploration of the Bougouni West project with the aim of identifying new zones of pegmatite hosted lithium mineralisation that may have a significant impact on the long-term future of a mining operation in this region of Mali.
I look forward to being able to report back on our development strategy during the coming year.
Bernard Aylward
Chief Executive Officer
30 August 2019
Finance Review
Results of operations
For the year ended 31 March 2019, the Group reported a loss for the year of GBP713,000 before Other Comprehensive Income compared to a loss of GBP857,000 in the previous year. Operational activity has remained broadly in line with last year as the Group has continued the running of an office in Mali.
During the year, the Group invested GBP3,463,000 (2018: GBP2,190,000) in exploration and evaluation expenditure on its various projects, the large majority of which related to its Bougouni Lithium Project. As a result, the carrying value of the Group's capitalised exploration and evaluation expenditure increased from GBP3,508,000 to GBP6,951,000. At 31 March 2019, the carrying value of the gold projects in Mali and Cote d'Ivoire was GBP1,070,000 (2018: GBP977,000) and of the lithium projects in Mali was GBP5,881,000 (2018: GBP2,531,000).
Cash balances as at 31 March 2019 were GBP1,408,000, a decrease of GBP1,727,000 on the previous year's level of GBP3,124,000. Net assets of the Group at the year-end were GBP7,803,000 (2018: GBP6,313,000).
Financing
During the year, the Group has successfully completed a number of equity fundraisings.
In June 2018, Kodal announced that it has completed a fundraising of GBP1,500,000 before expenses through a subscription and placing of 1,153,846,149 ordinary shares for the purpose of further developing the Bougouni Lithium Project. This included a subscription for GBP1,200,000 from the Company's major shareholder, Suay Chin International Pte ("Suay Chin), demonstrating its ongoing support for the Company and its Bougouni Lithium Project. The Company announced a further fundraising in March 2019 of GBP700,000 before expenses through a placing of 500,000,000 ordinary shares.
Following the end of the financial year, in July 2019, the Company announced a fundraising of GBP575,000 before expenses through the issue of 718,750,000 ordinary shares including 250,000,000 shares for GBP200,000 placed with SVS Securities plc ("SVS"), a London based broking firm regulated by the Financial Conduct Authority ("FCA"). The shares were issued and admitted to trading on AIM on 2 August 2019 and the fundraising became unconditional at this time. On 5 August 2019, the FCA announced that SVS had entered special administration and subsequently SVS defaulted on its contractual commitment to pay for its shares. Under legal advice, the Company has terminated the contract with SVS and has reserved its rights in relation to the recovery of damages and costs arising from SVS's breach of its obligations. The Company confirms that the 250,000,000 shares relating to SVS have not been delivered to SVS and that the shares are held on behalf of the Company by its broker's custodian and therefore remain under the control of the Company. The Company may in due course aim to place these shares with other investors to seek to recover its damages, being the GBP200,000 due, plus other costs incurred as a result of SVS's default.
Going concern and funding
The Group has not earned revenue during the year to 31 March 2019 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 shares.
As at 31 March 2019, the Group held cash balances of GBP1,408,000 (2018: GBP3,124,000). The Group's cash balances at 29 August 2019 were GBP570,000.
The Directors have prepared cash flow forecasts for the period ending 30 September 2020. The forecasts include the costs of progressing the feasibility study at the Bougouni Lithium Project through to the submission of its mining licence application as well as the overheads of the Group. Further fund raising will be required at an appropriate time in order to continue the development work and undertake limited additional exploration work, and the Group has historically been successful in raising additional funds in such circumstances. However, the forecasts demonstrate that following the submission of the mining licence application, by curtailing further exploration and development activity, the Group has sufficient cash resources available to allow it to continue as a going concern and meet its liabilities as they fall due for a period of at least twelve months from the date of approval of these financial statements without the need for a further fund raising. Accordingly, the financial statements have been prepared on a going concern basis.
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 2019 31 March 2018 Cash and cash equivalents 1,408,393 3,123,549 Cash based administrative expense 613,450 517,184 Exploration and evaluation expenditure 3,462,593 2,190,105
The directors consider these KPIs to be satisfactory given the current evolution of the Group and in line with its strategy.
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 and US 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.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEARED 31 MARCH 2019
Note Year ended Year ended 31
31 March March
2019 2018
GBP GBP
Continuing operations
Revenue - -
Administrative expenses (613,450) (517,184)
Share based payments 5 (109,241) (341,372)
------------ --------------
OPERATING LOSS (722,691) (858,556)
Finance income 10,080 1,499
------------ --------------
LOSS BEFORE TAX 2 (712,611) (857,057)
Taxation 6 - -
LOSS FOR THE YEAR FROM CONTINUING
OPERATIONS (712,611) (857,057)
OTHER COMPREHENSIVE INCOME
Items that may be subsequently
reclassified to profit or loss
Currency translation loss (113,844) (18,002)
TOTAL COMPREHENSIVE INCOME FOR
THE YEAR (826,455) (875,059)
============ ==============
Loss per share
Basic and diluted - loss per
share on total earnings (pence) 4 (0.0096) (0.0136)
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 AND PARENT COMPANY STATEMENTS OF FINANCIAL POSITION AS AT 31 MARCH 2019
Group Group Company Company
31 March 31 March 31 March 31 March
2019 2018 2019 2018
Note GBP GBP GBP GBP
NON-CURRENT ASSETS
Intangible assets 7 6,951,209 3,508,499 - -
Property, plant and
equipment 8 19,901 3,085 - -
Amounts due from
subsidiary undertakings - - 6,511,913 2,950,132
Investments in subsidiary
undertakings 9 - - 512,373 512,373
------------ ------------
6,971,110 3,511,584 7,024,286 3,462,505
------------ ------------ ------------ ------------
CURRENT ASSETS
Other receivables 10 21,011 8,765 21,011 8,765
Cash and cash equivalents 1,408,393 3,123,549 1,299,397 3,074,325
------------ ------------ ------------ ------------
1,429,404 3,132,314 1,320,408 3,083,090
------------ ------------ ------------ ------------
TOTAL ASSETS 8,400,514 6,643,898 8,344,694 6,545,595
------------ ------------ ------------ ------------
CURRENT LIABILITIES
Trade and other payables 11 (597,251) (331,391) (194,401) (79,733)
------------ ------------
TOTAL LIABILITIES (597,251) (331,391) (194,401) (79,733)
------------ ------------ ------------ ------------
NET ASSETS 7,803,263 6,312,507 8,150,293 6,465,862
============ ============
EQUITY
Attributable to owners
of the parent:
Share capital 12 2,566,418 2,038,903 2,566,418 2,038,903
Share premium account 12 12,147,792 10,467,337 12,147,792 10,467,337
Share based payment
reserve 690,597 581,356 690,597 581,356
Translation reserve (135,443) (21,599) - -
Retained deficit (7,466,101) (6,753,490) (7,254,514) (6,621,734)
------------ ------------ ------------ ------------
TOTAL EQUITY 7,803,263 6,312,507 8,150,293 6,465,862
============ ============ ============ ============
The Company's loss for the year ended 31 March 2019 was GBP632,780 (2018: GBP822,439).
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEARED 31 MARCH 2019
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 2017 1,683,206 6,784,682 169,334 (3,597) (5,896,433) 2,737,192
Comprehensive
income
Loss for the
year - - - - (857,057) (857,057)
Other comprehensive
income
Currency translation
loss - - - (18,002) - (18,002)
---------- ----------- ---------- -------------- ------------ ----------
Total comprehensive
income for the
year - - - (18,002) (857,057) (875,059)
Transactions
with owners
Share based payment 412,022 - - 412,022
Proceeds from
shares issued 355,697 3,682,655 - - - 4,038,352
At 31 March 2018 2,038,903 10,467,337 581,356 (21,599) (6,753,490) 6,312,507
Comprehensive
income
Loss for the
year - - - - (712,611) (712,611)
Other comprehensive
income
Currency translation
loss - - - (113,844) - (113,844)
------------
Total comprehensive
income for the
year - - - (113,844) (712,611) (826,455)
Transactions
with owners
Share based payment - - 109,241 - - 109,241
Proceeds from
shares issued 527,515 1,680,455 - - - 2,207,970
At 31 March 2019 2,566,418 12,147,792 690,597 (135,443) (7,466,101) 7,803,263
========== =========== ========== ============== ============ ==========
PARENT COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE YEARED 31 MARCH 2019
Share Share based
Share premium payment Retained Total
capital account reserve deficit equity
Company GBP GBP GBP GBP GBP
At 31 March 2017 1,683,206 6,784,682 169,334 (5,799,295) 2,837,927
Comprehensive income
Loss for the year - - - (822,439) (822,439)
---------- ----------- ------------ ------------ ----------
Total comprehensive
income for the year - - - (822,439) (822,439)
Transactions with
owners
Share based payment - - 412,022 - 412,022
Proceeds from shares
issued 355,697 3,682,655 - - 4,038,352
At 31 March 2018 2,038,903 10,467,337 581,356 (6,621,734) 6,465,862
Comprehensive income
Loss for the year - - - (632,780) (632,780)
Total comprehensive
income for the year - - - (632,780) (632,780)
Transactions with
owners
Share based payment - - 109,241 - 109,241
Proceeds from shares
issued 527,515 1,680,455 - - 2,207,970
At 31 March 2019 2,566,418 12,147,792 690,597 (7,254,514) 8,150,293
========== =========== ============ ============ ==========
CONSOLIDATED AND PARENT COMPANY STATEMENTS OF CASH FLOWS FOR THE YEARED 31 MARCH 2019
Group Group Company Company
Year ended Year ended Year ended Year ended
31 March 31 March 31 March 31 March
2019 2018 2019 2018
Note GBP GBP GBP GBP
Cash flows from operating
activities
Loss before tax (712,611) (857,057) (632,780) (822,439)
Adjustments for non-cash
items:
Share based payments 109,241 341,372 109,241 341,372
Operating cash flow before
movements in working capital (603,370) (515,685) (523,539) (481,067)
Movement in working capital
(Increase) / decrease
in receivables (12,246) 7,464 (12,246) 24,473
Increase / (decrease)
in payables 265,859 6,178 114,667 (242,165)
------------ ------------ -------------- --------------
Net movements in working
capital 253,613 13,642 102,421 (217,692)
Net cash outflow from
operating activities (349,757) (502,043) (421,118) (698,759)
Cash flows from investing
activities
Purchase of tangible assets (20,014) (3,702) - -
Purchase of intangible
assets (3,371,781) (2,190,105) -
Loans to subsidiary undertakings - - (3,561,780) (2,028,934)
------------ ------------ -------------- --------------
Net cash outflow from
investing activities (3,391,795) (2,193,807) (3,561,780) (2,028,934)
Cash flow from financing
activities
Net proceeds from share
issues 12 2,207,970 4,109,002 2,207,970 4,109,002
Net cash inflow from financing
activities 2,207,970 4,109,002 2,207,970 4,109,002
------------ ------------ -------------- --------------
(Decrease)/increase in
cash and cash equivalents (1,533,582) 1,413,152 (1,774,928) 1,381,309
Cash and cash equivalents
at beginning of the year 3,123,549 1,722,950 3,074,325 1,693,016
Exchange loss on cash (181,574) (12,553) - -
Cash and cash equivalents
at end of the year 1,408,393 3,123,549 1,299,397 3,074,325
============ ============ ============== ==============
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 2019 or 2018 but is derived from those accounts. Statutory accounts for 2018 have been delivered to the registrar of companies, and those for 2019 will be delivered in due course. The auditor has reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
Annual Report and Accounts and Annual General Meeting
The 2019 Annual Report and Accounts and Notice of the General Meeting will be posted to shareholders and published on the Group's website at www.kodalminerals.com shortly. The Annual General Meeting is to be held on 30 September 2019.
Basis of Preparation
The consolidated financial statements of Kodal Minerals Plc are prepared in accordance with the historical cost convention and in accordance with International Financial Reporting Standards ("IFRSs"), as adopted by the European Union ("EU") and in accordance with the provisions of the Companies Act 2006. The Company's ordinary shares are quoted on AIM, a market operated by the London Stock Exchange.
Going concern
The Group has not earned revenue during the year to 31 March 2019 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 shares.
As at 31 March 2019, the Group held cash balances of GBP1,408,000 (2018: GBP3,124,000). The Group's cash balances at 29 August 2019 were GBP570,000.
The Directors have prepared cash flow forecasts for the period ending 30 September 2020. The forecasts include the costs of progressing the feasibility study at the Bougouni Lithium Project through to the submission of its mining licence application as well as the overheads of the Group. Further fund raising will be required at an appropriate time in order to continue the development work and undertake limited additional exploration work, and the Group has historically been successful in raising additional funds in such circumstances. However, the forecasts demonstrate that following the submission of the mining licence application, by curtailing further exploration and development activity, the Group has sufficient cash resources available to allow it to continue as a going concern and meet its liabilities as they fall due for a period of at least twelve months from the date of approval of these financial statements without the need for a further fund raising. Accordingly, the financial statements have been prepared on a going concern basis.
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 Norwegian subsidiary undertakings were converted using an end of year rate of NOK 1 : GBP0.0892 (2018: NOK 1 : GBP0.0910) and its West African subsidiary undertakings were converted using an end of year rate of XOF 1 : GBP0.00131 (2018: XOF 1 : GBP0.00134).
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 objective evidence that the Group will not be able to collect all 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.
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 as an expense 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, no account is taken of any service and performance conditions (vesting conditions), other than performance conditions linked to the price of the shares of the Company (market conditions). Any other conditions which are required to be met in order for the recipients to become fully entitled to an award are considered to be non-vesting conditions. Market performance conditions and non-vesting conditions are taken into account in determining the grant value.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market or non-vesting condition, which are vesting irrespective of whether or not the market or non-vesting condition is satisfied, provided that all other performance or service conditions are satisfied.
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.
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 International Financial Reporting Standards 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. IFRSs 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 Lithium Projects in Mali. These projects are currently under development 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 2019 was GBP7.0 million (2018: GBP3.5 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 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 rather than treated as an exploration and evaluation cost and 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 balance sheet. 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. Sensitivity analysis prepared by management on the recoverability of the Company's intercompany balances is based on the performance of the underlying operations. Any downside in these estimates could result in an impairment of the underlying investments and balances.
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.
IFRS 9 Financial instruments introduced new classification and measurement models for financial assets, financial liabilities and some contracts to buy or sell non-financial items. Management has considered the impact of IFRS 9 Financial instruments on the carrying value of the Company's financial assets and liabilities, in particular the intercompany balances. The review of the NPV of the underlying assets has concluded the balance is expected to be fully recoverable and consequently impairment of the balance is not required.
The introduction of IFRS 15 Revenue from contracts with customers has had no impact on the Group's financial statements as the Group is pre-revenue.
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 new standards and interpretations 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
IFRS3 Business Amendments to the definition of a business 1 January
Combinations in IFRS 3 Business 2020
Combinations to help entities determine
whether an acquired set of activities and
IAS 1 Presentation assets is a business or not.
of Financial 1 January
Statements Amendments to IAS 1 Presentation of Financial 2020
Statements and IAS 8 to align the definition
of 'material' across the standards and
IAS 28 Investments to clarify
in certain aspects of the definition. 1 January
Associates and 2019
Joint Ventures Amendments to clarify that an entity applies
IFRS 9 to long-term interests in an associate
or joint venture to which the equity method
is not applied but that, in substance,
form part of the net investment in the
associate or joint venture (long-term interests).
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARED 31 MARCH 2019
1. SEGMENTAL REPORTING
The operations and assets of the Group in the year ended 31 March 2019 are focused in the United Kingdom, West Africa and Norway and comprise one class of business: the exploration and evaluation of mineral resources. Management have determined that the Group had four operating segments being the West African Gold Projects, the West African Lithium Projects, the Norway Projects and the UK administration operations. The Parent Company acts as a holding company. At 31 March 2019, the Group had not commenced commercial production from its exploration sites and therefore had no revenue for the year.
Year ended 31
March 2019 UK West Africa West Africa Norway Total
Gold Lithium
GBP GBP GBP GBP GBP
Administrative
expenses (570,829) (478) (38,541) (3,602) (613,450)
Share based payments (109,241) - - - (109,241)
Finance income 10,080 - - - 10,080
---------- ------------ -------------- -------- ----------
Loss for the
year (669,990) (478) (38,541) (3,602) (712,611)
---------- ------------ -------------- -------- ----------
At 31 March 2019
Other receivables 21,011 - - - 21,011
Cash and cash
equivalents 1,299,397 34,412 72,673 1,911 1,408,393
Trade and other
payables (194,401) - (402,850) - (597,251)
Tangible assets - - 19,901 - 19,901
Intangible assets
- exploration
and evaluation
expenditure - 1,070,348 5,880,861 - 6,951,209
Net assets at
31 March 2019 1,126,007 1,104,760 5,570,585 1,911 7,803,263
---------- ------------ -------------- -------- ----------
Year ended 31
March 2018 UK West Africa West Africa Norway Total
Gold Lithium
GBP GBP GBP GBP GBP
Administrative
expenses (492,819) (7,283) (3,143) (13,939) (517,184)
Share based payments (341,372) - - - (341,372)
Finance income 1,499 - - - 1,499
---------- ------------ -------------- --------- ----------
Loss for the
year (832,692) (7,283) (3,143) (13,939) (857,057)
---------- ------------ -------------- --------- ----------
At 31 March 2018
Other receivables 8,765 - - - 8,765
Cash and cash
equivalents 3,074,325 25,437 23,761 26 3,123,549
Trade and other
payables (36,317) - (295,042) (32) (331,391)
Tangible assets - - 3,085 - 3,085
Intangible assets
- exploration
and evaluation
expenditure - 977,192 2,531,307 - 3,508,499
Net assets at
31 March 2018 3,046,773 1,002,629 2,263,111 (6) 6,312,507
---------- ------------ -------------- --------- ----------
2. LOSS BEFORE TAX
The loss before tax from continuing activities is stated after charging:
Group Group
Year ended Year ended
31 March 2019 31 March
2018
GBP GBP
Fees payable to the Company's
auditor 30,500 29,500
Share based payments (note
5) 109,241 341,372
Directors' salaries and fees 136,061 134,768
Employer's National Insurance 3,645 3,602
Amounts payable to RSM UK Audit LLP and its associates in respect of both audit and non-audit services are as follows;
Group Group
Year ended Year ended
31 March 31 March
2019 2018
GBP GBP
Audit services
- statutory audit of parent and
consolidated accounts 30,500 29,500
3. EMPLOYEES' AND DIRECTORS' REMUNERATION
Group Group Company Company
31 March 31 March 31 March 31 March
2019 2018 2019 2018
Number Number Number Number
Average number
of employees
(including directors): 7 6 3 3
---------- ---------- ---------- ----------
The average number of people employed in the Company and the Group is as follows:
The remuneration expense for directors of the Company is as follows:
Year ended Year ended
31 March 2019 31 March 2018
GBP GBP
Directors' remuneration 136,061 134,768
Directors' social security costs 3,645 3,602
--------------- ---------------
Total 139,706 138,370
--------------- ---------------
In addition to the amounts included above, GBP69,650 (2018: GBP70,367) of the directors' remuneration cost has been treated as Exploration and Evaluation expenditure.
Directors' Share based
salary and payments Total
fees year year ended year ended
ended 31 March 31 March
31 March 2019 (see 2019
2019 note 5)
GBP GBP GBP
Luke Bryan (1) 20,000 20,615 40,615
Robert Wooldridge 45,000 10,308 55,308
Bernard Aylward 115,711 20,615 136,326
Qingtao Zeng (2) 25,000 4,701 29,701
205,711 56,239 261,950
============ ============ =============
Directors' Share based
salary and payments Total
fees year year ended year ended
ended 31 March 31 March
31 March 2018 (see 2018
2018 note 5)
GBP GBP GBP
Luke Bryan (1) 20,000 114,108 134,108
Robert Wooldridge 44,167 57,055 101,222
Bernard Aylward 116,732 114,108 230,840
Qingtao Zeng (2) 24,236 17,933 42,169
205,135 303,204 508,339
==================== ==================== =============
1 In addition to the amounts included above, Novoco Mine
Engineering Limited, a company wholly owned by Luke Bryan,
provided consultancy services to the Group during the year
and received fees of GBP12,075 (2018: GBP13,400).
2 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 GBP44,660 (2018: GBPnil).
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 average Basic loss
number of per share
shares (pence)
GBP
Year ended 31 March
2019 (712,611) 7,444,317,009 0.0096
Year ended 31 March
2018 (857,057) 6,324,339,191 0.0136
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 2019 31 March
2018
Share options outstanding Number Number
Opening balance 195,000,000 40,000,000
Issued in the year - 155,000,000
Closing balance 195,000,000 195,000,000
=============== ==============
Year ended Year ended
31 March 2019 31 March
2018
Warrants outstanding Number Number
Opening balance 25,000,000 -
Issued in the year 180,000,000 25,000,000
Closing balance 205,000,000 25,000,000
=============== =============
Exercisable between Bernard Luke Bryan Robert Wooldridge Qingtao
Aylward Zeng
30 Dec 2014 - 30 - 13,333,333 - -
Dec 2024
30 Dec 2015 - 30 - 13,333,333 - -
Dec 2025
30 Dec 2016 - 30 - 13,333,333 - -
Dec 2026
8 May 2017 - 8
May 2022 25,000,000 25,000,000 12,500,000 -
8 May 2018 - 8
May 2023 12,500,000 12,500,000 6,250,000 -
8 May 2019 - 8
May 2024 12,500,000 12,500,000 6,250,000 -
20 Nov 2017 - 20
Nov 2022 - - - 5,000,000
20 Nov 2018 - 20
Nov 2023 - - - 2,500,000
20 Nov 2019 - 20
Nov 2024 - - - 2,500,000
----------- ----------- ------------------ -----------
Closing balance 50,000,000 89,999,999 25,000,000 10,000,000
=========== =========== ================== ===========
Options outstanding for each of the directors at the year-end are outlined below:
The total value of options and warrants granted in the year was GBP109,241 (2018: GBP412,022). Included within operating losses is a charge for issuing share options and making share-based payments of GBP109,241 (2018: GBP341,372). In addition, a charge of GBPnil (2018: GBP70,650) has been allocated against the Share Premium reserve in respect of warrants issued in consideration for services provided to the Company in connection with the issue of shares in the Company.
Details of share options and warrants outstanding at 31 March 2019:
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 72,500,000 0.38 pence 8 May 2017 - 8 May 2022
8 May 2017 36,250,000 0.38 pence 8 May 2018 - 8 May 2023
8 May 2017 36,250,000 0.38 pence 8 May 2019 - 8 May 2024
22 May 2017 12,500,000 0.38 pence 22 May 2017 - 22 May 2022
22 May 2017 6,250,000 0.38 pence 22 May 2018 - 22 May 2023
22 May 2017 6,250,000 0.38 pence 22 May 2019 - 22 May 2024
20 November 2017 5,000,000 0.38 pence 20 Nov 2017 - 20 Nov 2022
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
Additional disclosure information:
Weighted average exercise price of share options and warrants:
-- outstanding at the beginning of the period 0.7 pence
-- granted during the period 0.38 pence
-- outstanding at the end of the period 0.44 pence
-- exercisable at the end of the period 0.48 pence
Weighted average remaining contractual life of
share options outstanding at the end of the period 4.41 years
Warrants issued in the year to 31 March 2019
The Company entered into a warrant agreement dated 23 November 2018 with Zivvo Pty Ltd ("Zivvo"), a company controlled by a key member of personnel, under which up to 180 million warrants may be issued to Zivvo in three tranches as follows:
Exercise price per share Tranche 1 Tranche 2 Tranche 3 Total
0.14p 13,333,333 16,666,667 30,000,000 60,000,000
0.25p 13,333,333 16,666,667 30,000,000 60,000,000
0.38p 13,333,333 16,666,667 30,000,000 60,000,000
Total 39,999,999 50,000,001 90,000,000 180,000,000
Tranche 1 vested and became exercisable from 1 March 2019, the date the services became provided on a full-time basis. Tranche 2 will vest and become exercisable from the date on which a mining licence for the project is awarded to the Company and Tranche 3 from the date on which commercial production commences. Each warrant is exercisable into one ordinary share of the Company and has a life of 5 five years from vesting.
The fair values of the options and warrants granted were calculated using the Black-Scholes valuation model. The inputs into the model were:
23 November 2018
Strike price 0.14p - 0.38p
Share price 0.05p - 0.08p
Volatility 69%
Expiry date 23 November 2023
- 28 February
2026
Risk free 0.56% - 0.80%
rate
Dividend
yield 0.0%
Options issued in the year to 31 March 2018
The Company entered into option agreements dated 8 May 2017 with directors and certain key personnel. Options over a total of 145 million ordinary shares were granted, including 50 million options to each of the executive directors, Bernard Aylward and Luke Bryan, 25 million options to the Chairman, Rob Wooldridge, and 10 million options to Mohamed Niaré, Mali country manager and director of Future Minerals SARL. All the options are exercisable at a price of 0.38 pence per share and have a life of 5 years from vesting. 50 per cent. of the options vest immediately, with a further 25 per cent. vesting in one year and the remaining 25 per cent. vesting in two years' time.
The Company entered into a warrant agreement dated 22 May 2017 with SP Angel Corporate Finance LLP ("SP Angel") under which the Company granted warrants over 25,000,000 shares to SP Angel. The warrants are exercisable at a price of 0.38 pence per share and have a life of five years from vesting. 50 per cent. of the warrants vest immediately, with a further 25 per cent. vesting in one year and the remaining 25 per cent. vesting in two years' time.
The Company entered into option agreements dated 20 November 2017 with Qingtao Zeng, non-executive director, under which options over 10,000,000 shares were granted. The options are exercisable at a price of 0.38 pence per share and have a life of 5 years from vesting. 50 per cent. of the options vest immediately, with a further 25 per cent. vesting in one year and the remaining 25 per cent. vesting in two years' time.
The fair values of the options and warrants granted were calculated using the Black-Scholes valuation model. The inputs into the model were:
8 May 2017 22 May 2017 20 November
2017
Strike price 0.38p 0.38p 0.38p
Share price 0.31p 0.32p 0.205p
Volatility 143% 143% 129%
Expiry date 8 May 2022 22 May 2022 20 November
2022
Risk free rate 0.87% 0.80% 1.09%
Dividend yield 0.0% 0.0% 0.0%
Options issued in the year to 31 March 2014
In respect of services provided in connection with the Company's admission to AIM, the Company entered into option agreements dated 20 December 2013 between the Company and Novoco Mine Engineering Limited ("Novoco"), a company wholly owned by Luke Bryan, and between the Company and David Hakes (a consultant to the Group at the time). Under these agreements, the Company granted to Novoco and David Hakes respectively options over 25,000,000 shares and 15,000,000 shares ("Option Shares") at an exercise price of 0.7 pence per share. The options become exercisable in respect of one third of the total number of Option Shares on each of the first, second and third anniversaries of 30 December 2013. The options are exercisable for a period of ten years from the date on which they vest and become exercisable.
Tetra Option Agreement
In December 2013, the Group entered into an option agreement (the "Agreement") with Tetra Minerals Oy ("Tetra") a company registered in Finland, under which it granted to Tetra an option (the "Option") to subscribe for new shares in the Company. Under the terms of the Agreement, which is governed by English law, Tetra could not assign its right to the Option to another party. In March 2017, Kodal was informed that on 1 February 2017, under a demerger plan in accordance with Finnish law, Tetra's assets had been transferred equally to two new Finnish companies and Tetra had been dissolved. The Company believes, based on legal advice, that as a result of the restriction in the Agreement on assigning the Option and the dissolution of Tetra, the Option is no longer capable of being exercised.
6. TAXATION
Group Group
Year ended Year ended
31 March 31 March
2019 2018
GBP GBP
Taxation charge for the year - -
------------ ------------
Factors affecting the tax charge
for the year
Loss from continuing operations
before income tax (712,611) (857,057)
Tax at 19% (2017: 20%) (135,396) (162,841)
Expenses not deductible 1,204 1,596
Losses carried forward not deductible 113,436 96,384
Deferred tax differences 20,756 64,861
Non-current assets temporary - -
differences
Income tax expense - -
============ ============
The Group has tax losses and other potential deferred tax assets totalling GBP1,837,000 (2018: GBP1,128,000) 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 2017 5,460,552
Additions in the year 2,190,105
Effects of foreign
exchange (4,832)
----------------
At 1 April 2018 7,645,825
Additions in the year 3,462,593
Effects of foreign
exchange (19,883)
----------------
At 31 March 2019 11,088,535
AMORTISATION
At 1 April 2017 and
1 April 2018 and 31
March 2019 4,137,326
----------------
NET BOOK VALUES
At 31 March 2019 6,951,209
================
At 31 March 2018 3,508,499
================
At 31 March 2017 1,323,226
================
8. PROPERTY, PLANT AND EQUIPMENT
Plant and
machinery
GROUP GBP
COST
At 1 April 2017 and
1 April 2018 3,702
Additions in the year 20,014
Effects of foreign
exchange 2,731
-----------
At 31 March 2019 26,447
DEPRECIATION
At 1 April 2017 617
Depreciation charge 5,929
At 1 April 2018 617
Depreciation charge 5,929
At 31 March 2019 6,546
-----------
NET BOOK VALUES
At 31 March 2019 19,901
===========
At 31 March 2018 3,085
===========
At 31 March 2017 -
===========
For those tangible assets wholly associated with exploration and development projects, the amounts charged in respect of depreciation are capitalised as evaluation and exploration assets within intangible assets.
The Company did not have any Property, Plant and Equipment as at 31 March 2017, 2018 and 2019.
9. INVESTMENTS IN SUBSIDIARY UNDERTAKINGS
The consolidated financial statements include the following subsidiary companies:
Country Registered office Equity Nature of
Company Subsidiary of holding business
of incorporation
Kodal Norway Kodal Minerals United Kingdom Prince Frederick 100% Operating
(UK) Ltd Plc House, company
35-39 Maddox Street,
London W1S 2PP
Kodal Mining Kodal Norway Norway c/o Tenden Advokatfirma 100% Mining exploration
AS (UK) Ltd ANS,
3210 Sandefjord
Norway
Kodal Phosphate Kodal Norway Norway c/o Tenden Advokatfirma 100% Mining exploration
AS (UK) Ltd ANS,
3210 Sandefjord
Norway
International Kodal Minerals Bermuda MQ Services Ltd 100% Holding company
Goldfields Plc Victoria Place,
(Bermuda) 31 Victoria Street,
Limited Hamilton HM 10
Bermuda
International International Côte Abidjan Cocody Les 100% Mining exploration
Goldfields Goldfields d'Ivoire Deux Plateaux 7eme
Côte (Bermuda) Tranche
d'Ivoire SARL Limited BP Abidjan
Côte d'Ivoire
International International Mali Bamako, Faladi, 100% Mining exploration
Goldfields Goldfields Mali Univers, Rue
Mali SARL (Bermuda) 886 B, Porte 487
Limited Mali
Jigsaw Resources International Bermuda MQ Services Ltd 100% Mining exploration
CIV Ltd Goldfields Victoria Place,
(Bermuda) 31 Victoria Street,
Limited Hamilton HM 10
Bermuda
Corvette CIV International Côte Abidjan Cocody Les 100% Mining exploration
SARL Goldfields d'Ivoire Deux Plateaux 7eme
(Bermuda) Tranche
Limited BP Abidjan
Côte d'Ivoire
Future Minerals International Mali Bamako, Faladi, 100% Mining exploration
SARL Goldfields Mali Univers, Rue
(Bermuda) 886 B, Porte 487
Limited Mali
Kodal Minerals plc has issued a guarantee under section 479C to its subsidiary, Kodal Norway (UK) Ltd ("Kodal Norway", company number 08491224) in respect of its activities for the year ended 31 March 2018 to allow Kodal Norway to take advantage of the exemption under s479A of the Companies Act 2006 from the requirements of the Act relating to audit of its individual accounts for the year ended 31 March 2019.
Year ended Year ended
Carrying value of investment 31 March 2019 31 March
in subsidiaries 2018
GBP GBP
Opening balance 512,373 512,373
Impairment in the year - -
Closing balance 512,373 512,373
=============== ===========
10. OTHER RECEIVABLES
Group Group Company Company
31 March 31 March 31 March 31 March
2019 2018 2019 2018
GBP GBP GBP GBP
21,011 8,765 21,011 8,765
21,011 8,765 21,011 8,765
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.
11. TRADE AND OTHER PAYABLES
Group Group Company Company
31 March 31 March 31 March 31 March
2019 2018 2019 2018
GBP GBP GBP GBP
Trade payables 192,940 212,381 118,101 21,514
Other payables 404,311 119,010 76,300 58,219
597,251 331,391 194,401 79,733
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
GROUP AND COMPANY
Allotted, issued and fully paid:
Nominal Number of Share Capital Share Premium
Value Ordinary GBP GBP
Shares
At 31 March 2018 6,524,482,828 2,038,903 10,467,337
Issue (Note 1) GBP0.0003125 230,769,226 72,112 212,857
Issue (Note 2) GBP0.0003125 923,076,923 288,462 911,538
Issue (Note 3) GBP0.0003125 34,210,526 10,691 54,309
Issue (Note 4) GBP0.0003125 500,000,000 156,250 501,750
At 31 March 2019 8,212,539,503 2,566,418 12,147,792
---------------- -------------- --------------
Share issue costs have been allocated against the Share Premium reserve.
Note 1: On 15 June 2018, a total of 230,769,226 shares were issued to Suay Chin International Pte Ltd at an issue price of 0.13 pence per share.
Note 2: On 29 June 2018, a total of 923,076,923 shares were issued to Suay Chin International Pte Ltd at an issue price of 0.13 pence per share.
Note 3: On 8 February 2019, a total of 34,210,526 shares were issued to Bambara Resources SARL at an issue price of 0.19 pence per share.
Note 4: On 8 March 2019, a total of 500,000,000 shares were issued in a placing at an issue price of 0.14 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
payment reserve rights 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
reserve the net 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 2019 earned interest of GBP10,080 (2018: GBP1,499). 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
Loans and liabilities
receivables at amortised Total
cost
31 March 2019 GBP GBP GBP
Assets
Other receivables 21,011 - 21,011
Cash and cash equivalents 1,408,393 - 1,408,393
-------------- ---------------- ------------
Total 1,429,404 - 1,429,404
============== ================ ============
Liabilities
Trade and other payables - (597,251) (597,251)
Total - (597,251) (597,251)
============== ================ ============
31 March 2018
Assets
Other receivables 8,765 - 8,765
Cash and cash equivalents 3,123,549 - 3,123,549
-------------- ---------------- ------------
Total 3,132,314 - 3,132,314
============== ================ ============
Liabilities
Trade and other payables - (331,391) (331,391)
-------------- ---------------- ------------
Total - (331,391) (331,391)
============== ================ ============
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 and Australian Dollars 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 denominated NOK XOF denominated
denominated Total
31 March 2019 GBP GBP GBP GBP
Assets
Other receivables 21,011 - - 21,011
Cash and cash
equivalents 1,299,397 1,911 107,085 1,408,393
---------------- ------------- ---------------- ----------
Total 1,320,408 1,911 107,085 1,429,404
================
Liabilities
Trade and other
payables (566,654) - (30,597) (597,251)
================
31 March 2018
Assets
Other receivables 8,765 - - 8,765
Cash and cash
equivalents 3,074,325 26 49,198 3,123,549
---------------- ------------- ---------------- ----------
Total 3,083,090 26 49,198 3,132,314
================
Liabilities
Trade and other
payables (331,358) (33) - (331,391)
---------------- ------------- ================ ----------
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 2019, the Company paid fees to SP Angel of GBP82,550 (2018: GBP31,052).
Novoco Mine Engineering Limited ("Novoco"), a company wholly owned by Luke Bryan, a Director, provided consultancy services to the Group during the year ended 31 March 2019 and received fees of GBP12,075 (2018: GBP13,400).
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 2019 and received fees of GBP80,711 (2018 GBP82,982). These fees are included within the remuneration figure shown for Bernard Aylward in note 3.
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 2019 and received fees of GBP44,660 (2018: GBPnil).
Kodal, through its wholly owned subsidiary Future Minerals, entered into an agreement with Bambara Resources SARL ("Bambara") in January 2019 which gives the Company exclusive rights to explore and an option to acquire two new concessions in Southern Mali. These concessions were presented to Kodal by Mohamed Niaré who is engaged by Kodal as a consultant in Mali and acts as the Company's logistics and Country Manager and is a director of Future Minerals. Mohamed Niare is the sole shareholder of Bambara.
In June 2018, the Company raised GBP1,500,000 through the issue of ordinary shares which included a subscription from Suay Chin International Pte ("Suay Chin") for GBP1,200,000. Suay Chin is a substantial shareholder in the Company holding more than 20% of its issued share capital and currently holding 25.46%.
16. CONTROL
No one party is identified as controlling the Group.
17. EVENTS AFTER THE REPORTING PERIOD
Following the end of the financial year, in July 2019, the Company announced a fundraising of GBP575,000 before expenses through the issue of 718,750,000 ordinary shares including 250,000,000 shares for GBP200,000 placed with SVS Securities plc ("SVS"), a London based broking firm regulated by the Financial Conduct Authority ("FCA"). The shares were issued and admitted to trading on AIM on 2 August 2019 and the fundraising became unconditional at this time. On 5 August 2019, the FCA announced that SVS had entered special administration and subsequently SVS defaulted on its contractual commitment to pay for its shares. Under legal advice, the Company has terminated the contract with SVS and has reserved its rights in relation to the recovery of damages and costs arising from SVS's breach of its obligations. The Company confirms that the 250,000,000 shares relating to SVS have not been delivered to SVS and that the shares are held on behalf of the Company by its broker's custodian and therefore remain under the control of the Company. The Company may in due course aim to place these shares with other investors to seek to recover its damages, being the GBP200,000 due, plus other costs incurred as a result of SVS's default.
**S**
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/Nick Harriss Tel: 020 3328
5656
SP Angel Corporate Finance LLP, Financial
Adviser & Broker Tel: 020 3470
John Mackay 0470
St Brides Partners Ltd, Financial PR
Catherine Leftley/Cosima Akerman Tel: 020 7236
1177
About Kodal Minerals
Kodal Minerals' primary focus is on the rapid advancement towards production of its flagship Bougouni Lithium Project in Southern Mali. The JORC Resource Estimate places the Bougouni Project in the top 15 hard rock lithium projects globally and was calculated using only three of the eight currently recognised prospects demonstrating the significant exploration upside potential remaining across the 450km(2) project area. The Mineral Resource estimate for the Ngoualana, Sogola-Baoule and Boumou prospects are tabulated below. These mineral resources are reported in accordance with the JORC Code:
Prospect Indicated Inferred Total
Contained Contained Contained
Li(2) Li(2) Li(2) Li(2) Li(2) Li(2)
Tonnes O% O Tonnes O% O Tonnes O% O
(Mt) Grade (kt) (Mt) Grade (kt) (Mt) Grade (kt)
------- ------- ---------- ------- ------- ---------- ------- ------- ----------
Sogola_Baoule 8.4 1.09 91.9 3.8 1.13 42.8 12.2 1.10 134.8
------- ------- ---------- ------- ------- ---------- ------- ------- ----------
Ngoualana 3.1 1.25 39.2 2.0 1.12 22.1 5.1 1.20 61.3
------- ------- ---------- ------- ------- ---------- ------- ------- ----------
Boumou 4.0 1.02 40.4 4.0 1.02 40.4
------- ------- ---------- ------- ------- ---------- ------- ------- ----------
TOTAL 11.6 1.13 131.2 9.7 1.08 105.3 21.3 1.11 236.5
------- ------- ---------- ------- ------- ---------- ------- ------- ----------
Notes: Mineral resources are reported using a 0.5%Li(2) O cut-off. Figures may not sum due to rounding. The contained metal is determined by the estimated tonnage and grade.
The Bougouni Project and recently acquired 200km(2) Bougouni West project are located in an emerging lithium province that is already attracting the attention of investors and off-take partners interested in securing a long-term supply of lithium. With the support of its strategic investor and off-take partner Suay Chin International Pte, a Singapore-based lithium and chemical trader, Kodal Minerals is well placed to continue its ambitious development programme at Bougouni.
Further to this, Kodal Minerals is the manager of additional lithium and gold projects that are undergoing low cost exploration programmes in addition to JV funded gold properties in Cote d'Ivoire that offer potentially significant long-term value.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
FR UARKRKSAKRAR
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