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Kodal Minerals PLC Final Results

26/08/2021 7:00am

UK Regulatory (RNS & others)


Kodal Minerals (LSE:KOD)
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TIDMKOD

RNS Number : 8145J

Kodal Minerals PLC

26 August 2021

Kodal Minerals Plc / Index: AIM / Epic: KOD / Sector: Mining

26 August 2021

Kodal Minerals plc ('Kodal Minerals' or the 'Company')

Final Results

Kodal Minerals, the mineral exploration and development company focused on the Bougouni Lithium Project in Mali ("Bougouni") and its gold assets in West Africa, pleased to announce the Annual Report of Kodal Minerals plc ("Kodal" or the "Company" and together with its subsidiaries, the "Group") for the year ended 31 March 2021.

The Company's Annual Report and Accounts will be made available on the Company's website www.kodalminerals.com by 3 September 2021.

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 2021.

This has been an extraordinary and, at times, difficult year with the worldwide impact of the Covid-19 pandemic as well as turbulence in financial markets and other operational pressures. Our Company was not immune from such challenges, however I am pleased to report that all Kodal staff, consultants and employees remain safe and healthy and the Company continues to prioritise the welfare and security of its personnel. We have also closely monitored the political situation in Mali and, following a period of political upheaval, we are pleased to note the commitment of the transitional government to undertaking new elections in February 2022.

Our focus for this coming year will be on the development of our Bougouni Lithium project in Mali. Our mining licence application is passing through its final approvals and we expect to receive our mining licence in the near future, which is the final approval needed for the project to be fully permitted for development. The Company will continue its development plans including the further optimisation and design of the proposed open pit mines, the refinement of the processing flowsheet to include updated metallurgical testwork and the potential scheduling of development.

In 2021 we have seen a resurgence of interest in the lithium sector driven by the focus of governments, industry and consumers on the future of energy usage and storage and on the implementation of infrastructure projects. The demand for lithium continues to exceed previous forecasts as the utilisation of lithium-ion batteries increases in the green energy solutions both on a large infrastructure scale as well as on the personal level through vehicles and personal devices. Kodal's advanced project is well positioned to take advantage of this supply shortfall and the strongly rising prices for the lithium spodumene concentrate will underpin our efforts to secure financing for the Bougouni project development.

Kodal has also expanded its portfolio of gold exploration projects during the year with the acquisition of the Fatou gold project located in southern Mali. This is an advanced exploration project where previous work has outlined the potential for the Company to delineate a mineral resource with targeted drilling which is scheduled to take place later this year. Kodal also regained management of and retained a 100% interest in the Nielle gold concession in northern Cote d'Ivoire following the termination of the joint venture with Resolute Mining Limited ("Resolute"). Previous exploration work had identified a new zone of gold mineralisation and our recently completed drilling campaign has returned very encouraging high-grade gold mineralisation that requires further follow-up. Kodal has developed and is implementing an exploration programme across its gold projects in Mali and Cote d'Ivoire with the aim of rapidly defining new mineral resources that will underpin the value of these highly prospective assets.

During the year, Kodal has successfully completed a number of fundraisings. These included a GBP0.5 million equity financing facility and a $1.5 million convertible loan note, both of which have been fully converted, with no further amounts outstanding to the Investors. In March 2021, we successfully completed an equity fundraising of GBP3.5 million (before expenses) that has resulted in Kodal moving into the new year in a strong financial position.

This coming year offers great opportunity for Kodal with the focus on our Bougouni lithium project in a very positive market as well as our exciting gold exploration and development projects. I look forward to reporting to you on our progress during this year.

Robert Wooldridge

Non-executive Chairman

25 August 2021

OPERATIONAL REVIEW

Kodal's operational focus during this year has been on progressing the mining licence application for the key Bougouni Lithium project that was initially lodged in January 2020. The approval of this application has been delayed due to the impact of the Covid-19 pandemic, however we have been very pleased with the progress of the application in the first half of 2021 with the final approval meetings being held in May 2021. We are confident that the process of obtaining the final permit is on-track and no further information or payment is required from the Company.

In addition to advancing the mining licence application, we have continued to review our proposed mining and processing operation for the Bougouni Lithium project. The focus of this work has been on defining improvements in the processing flow sheet to lead to an expected increase in the metallurgical recovery of the lithium bearing spodumene minerals. This has a significant impact on the profitability of the proposed operation and this review work continues to indicate a very robust project.

Kodal has also taken the opportunity to expand its gold portfolio through the acquisition of the Fatou project in southern Mali and we have taken back management of the Nielle and Tiebiessou concessions in Cote d'Ivoire following the termination of the Joint Venture with Resolute. Details of the gold projects and proposed exploration are summarised in the sections below.

Concession and Exploration Licence Review

Kodal maintains extensive tenure in Mali and Cote d'Ivoire. Kodal's management ensures that all government compliance, reporting and fees are kept up to date and all concessions are retained in good standing.

Kodal's Bougouni and Bougouni West 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. During the year, the Company agreed modifications to the Foulaboula, Sogola Nord and Fariedele concessions with the Direction Nationale de la Geologie et des Mines ("DNGM") of Mali in preparation for the granting of the mining licence. The new mining licence will be issued to replace the Foulaboula concession and the changes were agreed to ensure all areas of mineralisation and the proposed mining infrastructure and processing plant for Bougouni are included within the one licence area.

Kodal acquired the Fatou project in December 2020 consisting of the Fininko and Foutiere concessions located in southern Mali. These concessions are prospective for gold mineralisation, and details of the concessions are included in the table below.

Table of Concessions - All Kodal concessions in West Africa

 
 Tenements          Country     Kodal Economic          Project             Validity 
                                 Ownership 
 Dogobala           Mali        90% economic            Bougouni Lithium    Licence valid and in 
                                 interest                Project             good standing. Arrêté 
                                 via direct                                  No. 2018-1115 granted 
                                 ownership                                   on13 April 2018 for 
                                 following                                   initial 3 year period, 
                                 completion                                  with option for 2 extensions 
                                 of option                                   of 2 years validity 
                                 payments                                    each. 
                                                                             Application for first 
                                                                             renewal has been lodged 
                                                                             and all fees paid. 
                   ----------  ----------------------  ------------------  ---------------------------------- 
 Foulaboula         Mali        90% economic            Bougouni Lithium    Licence valid and in 
                                 interest                Project             good standing. Arrêté 
                                 via direct                                  No. 2018-1116 granted 
                                 ownership                                   on 13 April 2018 for 
                                 following                                   initial 3 year period, 
                                 completion                                  with option for 2 extensions 
                                 of option                                   of 2 years validity 
                                 payments                                    each. 
                                                                             Licence subject to modification 
                                                                             during 2020 to prepare 
                                                                             for Mining Licence application. 
                                                                             Granting of Mining Exploitation 
                                                                             permit in progress. 
                   ----------  ----------------------  ------------------  ---------------------------------- 
 Sogola Nord        Mali        90% economic            Bougouni Lithium    Licence valid and in 
                                 interest.               Project             good standing. Arrete 
                                 Concession                                  number 2020-0072 granted 
                                 replaces                                    22 January 2020 for 
                                 part Madina                                 an initial 3 year period, 
                                 concession,                                 with option for 2 extensions 
                                 which had                                   of 2 years validity 
                                 reached time                                each. 
                                 limit                                       Licence area modified 
                                                                             during 2020 to account 
                                                                             for the future Foulaboula 
                                                                             Exploitation permit. 
                   ----------  ----------------------  ------------------  ---------------------------------- 
 Fariedele          Mali        90% economic            Bougouni Lithium    Licence valid and in 
                                 interest.               Project             good standing. Arrete 
                                 Concession                                  number 2020-0073 granted 
                                 replaces                                    22 January 2020 for 
                                 part Madina                                 an initial 3 year period, 
                                 concession,                                 with option for 2 extensions 
                                 which had                                   of 2 years validity 
                                 reached time                                each. 
                                 limit                                       Licence area modified 
                                                                             during 2020 to account 
                                                                             for the future Foulaboula 
                                                                             Exploitation permit. 
                   ----------  ----------------------  ------------------  ---------------------------------- 
 Mafele Ouest       Mali        Held through            Bougouni West       Licence valid and in 
                                 Option to               Lithium             good standing. Arrêté 
                                 Purchase                                    No. 2018-4537 granted 
                                 giving right                                on 31 December 2018 
                                 to acquire                                  for initial 3 year period, 
                                 80% economic                                with option for 2 extensions 
                                 interest                                    of 2 years validity 
                                                                             each. 
                   ----------  ----------------------  ------------------  ---------------------------------- 
 NKemene            Mali        Held through            Bougouni West       Licence valid and in 
  Ouest                          Option to               Lithium             good standing. Arrêté 
                                 Purchase                                    No. 2018-4486 granted 
                                 giving right                                on 28 December 2018 
                                 to acquire                                  for initial 3 year period, 
                                 80% economic                                with option for 2 extensions 
                                 interest                                    of 2 years validity 
                                                                             each. 
                   ----------  ----------------------  ------------------  ---------------------------------- 
 Boundiali          Côte   100% direct             Gold Exploration    Licence application 
                     d'Ivoire    ownership                                   submitted and in process. 
                                 (under application).                        Application updated 
                                                                             during 2020 and application 
                                                                             remains in good standing. 
                   ----------  ----------------------  ------------------  ---------------------------------- 
 Korhogo            Côte   100% direct             Gold Exploration    Licence valid and in 
                     d'Ivoire    ownership                                   good standing. Renewal 
                                                                             granted on 31 March 
                                                                             2020 for a 3 year term. 
                   ----------  ----------------------  ------------------  ---------------------------------- 
 Dabakala           Côte   100% direct             Gold Exploration    Licence valid and in 
                     d'Ivoire    ownership                                   good standing. Renewal 
                                                                             granted on 31 March 
                                                                             2020 for a 3 year term. 
                   ----------  ----------------------  ------------------  ---------------------------------- 
 Niéllé   Côte   100% direct             Gold Exploration    Licence valid and in 
                     d'Ivoire    ownership                                   good standing. Initial 
                                                                             licence expired on 7 
                                                                             January 2017, and Renewal 
                                                                             decree received on the 
                                                                             28 February 2018 for 
                                                                             a 3 year period. Second 
                                                                             Renewal decree received 
                                                                             18 December 2020 for 
                                                                             a 3 year period. 
                   ----------  ----------------------  ------------------  ---------------------------------- 
 Tiebissou          Côte   100% direct             Gold Exploration    Licence valid and in 
                     d'Ivoire    ownership                                   good standing. Initial 
                                                                             term expired 30 September 
                                                                             2018. An application 
                                                                             for renewal has been 
                                                                             lodged, fees paid and 
                                                                             approved. Renewal decree 
                                                                             is pending signature. 
                   ----------  ----------------------  ------------------  ---------------------------------- 
 M'Bahiakro         Côte   100% direct             Gold Exploration    Licence application 
                     d'Ivoire    ownership                                   submitted and in process. 
                                                                             Application updated 
                                                                             during 2020 and application 
                                                                             remains in good standing. 
                   ----------  ----------------------  ------------------  ---------------------------------- 
 Djelibani          Mali        100% direct             Gold Exploration    Convention d'Etablissement 
  Sud                            ownership                                   granted on 21 December 
                                                                             2018. The Conventions 
                                                                             allows for non-ground 
                                                                             disturbing work and 
                                                                             application has been 
                                                                             made for the granting 
                                                                             of an Arrete to allow 
                                                                             more detailed exploration. 
                                                                             Application for Arrêté 
                                                                             made and all fees paid. 
                   ----------  ----------------------  ------------------  ---------------------------------- 
 Nangalasso         Mali        100% direct             Nangalasso          Nangalasso Arrêté 
                                 ownership               Project             completed second renewal 
                                 following               Gold Exploration    on 4 February 2021. 
                                 completion                                  A new convention application 
                                 of option                                   covering the same permit 
                                 payments                                    has been lodged with 
                                                                             the DNGM and is awaiting 
                                                                             approval. 
                   ----------  ----------------------  ------------------  ---------------------------------- 
 Sotian             Mali        Kodal completed         Nangalasso          Arrêté No. 
                                 Option agreement        Project             2018-1925 granted on 
                                 and is beneficial       Gold Exploration    12 June 2018 for initial 
                                 owner of                                    3 year period, with 
                                 concession.                                 option for 2 extensions 
                                                                             of 2 years validity 
                                                                             each. 
                                                                             Application for first 
                                                                             renewal has been lodged 
                                                                             and all fees paid. 
                   ----------  ----------------------  ------------------  ---------------------------------- 
 Tiedougoubougou    Mali        Kodal completed         Nangalasso          Arrêté No. 
                                 Option agreement        Project             2018-3319 granted on 
                                 and is beneficial       Gold Exploration    4 September 2018 for 
                                 owner of                                    initial 3 year period, 
                                 concession                                  with option for 2 extensions 
                                                                             of 2 years validity 
                                                                             each. 
                                                                             Application for the 
                                                                             first renewal will be 
                                                                             lodged imminently. 
                   ----------  ----------------------  ------------------  ---------------------------------- 
 Fininko            Mali        Held through            Fatou Project       Arrêté No. 
                                 Option Agreement        Gold Exploration    2018-0369 granted on 
                                 giving right                                21 February 2018 for 
                                 to acquire                                  initial 3 year period, 
                                 100% ownership                              with option for 2 extensions 
                                                                             of 2 years validity 
                                                                             each. 
                                                                             Application for first 
                                                                             renewal has been lodged 
                                                                             and all fees paid. 
                   ----------  ----------------------  ------------------  ---------------------------------- 
 Foutiere           Mali        Held through            Fatou Project       Convention d'Etablissement 
                                 Option Agreement        Gold Exploration    granted on 18 December 
                                 giving right                                2012. 
                                 to acquire                                  Application for Arrêté 
                                 100% ownership                              made and all fees paid. 
                   ----------  ----------------------  ------------------  ---------------------------------- 
 

Bougouni Lithium Project - Mining Licence Update and Feasibility Study Summary

Kodal's application for a mining licence for the Bougouni lithium project has made significant progress during 2021.

In May 2021, Kodal representatives attended a committee at the DNGM in Bamako to formally review the feasibility study and proposed mining development for Bougouni. At the meeting, the feasibility study and mining development plan were ratified and approved by the DNGM committee, subject to the Company making some minor corrections to bring the mining licence application in line with the new Mali Mining Code of 2019. These corrections have been completed and lodged with the DNGM. Following this lodgement, Kodal received formal notification of the acceptance of the application and a request to pay the Mining licence application fee, which the Company immediately paid.

The new Exploitation Decree (mining licence) has been drafted and verified by the Ministry of Mines, Energy and Water and forwarded to the Secretary General's office. From this point the licence application is prepared for presentation at the Conseil des Ministres of Mali and following agreement will be formally approved.

Summary of the Bougouni Project Feasibility Study

The Bougouni Lithium project feasibility study has demonstrated the potential for a robust mining operation with attractive economic fundamentals. Further studies continue with a particular focus on optimising the processing plant flow sheet to further improve lithium recovery and lower capital and operating costs.

The key highlights of the Bougouni Project Feasibility Study are:

   --    Robust project with pre-tax NPV7% of USD$300m 

-- Total life of mine production of 1.94Mt of concentrate and revenue exceeding US$1.4bn, with an initial assumed concentrate sale price of $680/t increasing 2% year-on-year;

-- Minimum 8.5-year mine life, producing on average approximately 220,000 tonnes of 6% spodumene concentrate per annum, at life of mine lithium average metallurgical recovery of 71%, based on laboratory metallurgical recoveries of 75%;

-- Proposed 2Mtpa processing plant utilising a conventional flotation circuit to maximise spodumene recovery;

-- Estimated C1* cash costs of US$431 per tonne of concentrate (US$466 including royalties and sustaining capital);

   --    Capital requirement for development estimated to be US$117M plus contingency; and 
   --    Forecast payback period of 1.7 years and IRR of 58% (51% post tax). 

*C1 is the net direct cash cost that represents the cash cost at each processing stage from mining through to recoverable metal as indicated in the Company's announcement on 27 January 2020.

Gold Exploration Projects and Exploration Programme

Kodal has expanded its gold exploration portfolio through the acquisition of the Fatou project as announced on 17 December 2020.

The Fatou project consists of two concessions, the Fininko (also known as Fatou) and Foutière concessions, located 280km south of Bamako, the capital city of Mali. The project forms a contiguous landholding exceeding 300km2 and has been acquired through agreements with local vendors.

The Fatou project is complementary to Kodal's existing activities in southern Mali being 100km to the south of the town of Bougouni and only 30km to the west of the Nangalasso gold project. The Fatou project is an advanced project with previous exploration defining preliminary mineral resource estimates and Kodal considers the project to have excellent exploration prospects that are drill ready and have potential to expand the defined zones of gold mineralisation. Historical exploration has been completed by AngloGold Ashanti and Rockridge Capital Corp, a Canadian listed company, which explored the project from 2010 to 2014 resulting in a preliminary mineral resource estimate exceeding 350,000 ounces of gold for the Fatou Main prospect.

Kodal has developed an exploration programme to test the defined geological structures and extensions. The geological field team has made reconnaissance visits to the project area to confirm areas of historical exploration, the location of artisanal mining and host rock of mineralisation, and to determine suitable access for exploration drilling.

Details of the acquisition terms and geological summary have been provided in the Company's announcement of 17 December 2020.

During the reporting year, Kodal regained management of, and retained a 100% interest in, the Nielle, Tiebissou and M'Bahiakro (application) gold concessions after termination of the joint venture with Resolute following the decision by Kodal to refuse an extension request.

The Company has reviewed its gold portfolio and defined priority targets based on the potential to define JORC compliant mineral resources quickly, as well as projects that have potential to host large scale gold mineralisation. The priority exploration targets for this exploration campaign are:

-- Fatou project in Mali, with drilling commencing at Fatou Main prospect where historical exploration defined a NI43-101 Mineral Resource estimate exceeding 350,000oz gold. The drilling will aim to confirm and expand the known gold mineralisation and provide data to support data for a JORC compliant Mineral Resource estimate to be completed.

-- Nielle project in Cote d'Ivoire, where exploration completed by Resolute has defined an extensive zone of gold mineralisation with positive initial drilling results. The mineralised zone remains open along strike and at depth and Kodal's initial programme is designed to confirm and extend the mineralised zone and provide confidence in the geological interpretation prior to undertaking a maiden mineral resource assessment.

-- Dabakala project in Cote d'Ivoire, where exploration activity completed by Kodal continues to confirm a major surface geochemical anomaly with assay results up to 6.14g/t gold returned. This new anomaly has never been previously drill tested and Kodal will focus on infill geochemical sampling to define the key targets for reconnaissance drill testing.

Kodal has commenced this exploration campaign with exploration drilling completed at the Nielle concession in northern Cote d'Ivoire and additional surface geochemistry completed at Dabakala in central Cote d'Ivoire. The initial results from this exploration are very encouraging with high-grade gold mineralisation intersected in the new gold mineralised zone at Nielle, and the continued definition of the extensive surface geochemical anomaly at Dabakala has developed a new high priority exploration target.

I look forward to being able to report back on these exciting opportunities for the advancement of the Bougouni lithium project towards mine development and the results of our gold exploration campaign during the coming year.

Bernard Aylward

Chief Executive Officer

25 August 2021

Finance review

Results of operations

For the year ended 31 March 2021, the Group reported a loss before other comprehensive income for the year of GBP623,000 compared to a loss of GBP630,000 in the previous year. Operational activity has remained broadly in line with last year as the Group has completed the Feasibility Study work at Bougouni and has continued the running of offices in Mali and Côte d'Ivoire. Further information is provided in the Operational Review above.

During the year, the Group invested GBP542,000 (2020: GBP1,602,000) in exploration and evaluation expenditure on its various projects. As a result, the carrying value of the Group's capitalised exploration and evaluation expenditure increased from GBP8,643,000 to GBP8,964,000 after taking account of the effects of foreign exchange. At 31 March 2021, after taking account of the effects of foreign exchange, the carrying value of the gold projects in Mali and Cote d'Ivoire was GBP1,476,000 (2020: GBP1,179,000) and of the lithium projects in Mali was GBP7,488,000 (2020: GBP7,464,000).

Cash balances as at 31 March 2021 were GBP2,433,000, an increase of GBP2,400,000 on the previous year's level of GBP33,000, due to the receipt of GBP1.7 million from the successful GBP3.5m equity fundraising completed in March 2021, the final GBP1.8 million of which was received by the Company after the year end in April 2021. Net assets of the Group at the year-end were GBP12,636,000 (2020: GBP8,052,000).

Financing

During the year, the Group has successfully completed a number of fundraisings.

In April 2020 the Company entered into an equity financing facility with Riverfort Global Opportunities PCC and YA II PN Ltd (the 'Investors'), who subscribed for 1,428,571,429 ordinary shares at an average price of 0.04686 pence per share, raising GBP670,000 before expenses. These subscription proceeds were used immediately to satisfy the Company's obligation to pay GBP0.5 million to the Investors to enter into an Equity Sharing Agreement, under which the Investors undertook to make cash payments to the Company for a period of up to 12 months based on the performance of Kodal's share price. All obligations under the Equity Sharing Agreement were satisfied prior to the year end with the Company receiving over GBP650,000.

In July 2020, the Company entered into a Convertible Loan Note Agreement with the Investors for a total commitment of $1.5 million before expenses with the first tranche of $750,000 advanced at closing, and the second tranche drawn down in October 2020. Investors had fully exercised the option to convert outstanding principal and interest into new ordinary shares in the Company prior to the year end.

In December 2020, at the time of securing the acquisition of the Fatou project, the Company entered into a conditional term sheet with Riverfort Global Capital Limited ("Riverfort") in connection with a proposed $2.5 million funding facility. To secure exclusivity, Riverfort advanced an initial amount of $300,000 to the Company whichis to be repaid by the Company in October 2021 as the Company and Riverfort agreed not to go ahead with the funding facility.

In March 2021, Kodal announced that it had completed an equity fundraising of GBP3.5 million before expenses, for the purpose of supporting Kodal in undertaking exploration, drilling and development activities at its priority gold assets in Mali and Cote d'Ivoire, as well as advancing its flagship Bougouni Lithium Project.

Impact of the Covid-19 pandemic

During the year to 31 March 2021, the pandemic resulted in lockdowns and the imposition of travel bans in many countries, including in West Africa. As a result, field exploration operations ceased for most of 2020, but limited activities recommenced in early 2021 with sampling work in Dabakala, and other site visits to the Fatou and Nielle projects undertaken. Further drilling work has been taking place on the gold assets with further drilling work planned later in the year as operations increasingly return to normal.

After the substantial disruption to global equity markets in early 2020, markets rebounded strongly during the year. This specifically included the mining sector, and particularly for gold, which has always been regarded as a safe haven in times of economic turbulence. The market for lithium also improved with the increasing focus on the need to reduce carbon emissions and the anticipated demand for batteries in electric vehicles.

The Company was able to take advantage of this improving environment for financing and entered into a convertible loan note agreement for $1.5 million in July 2020, which provided important funds to sustain the Group's continued development. With the loan note fully converted in March 2021 the Company completed an over-subscribed placing of ordinary shares to raise GBP3.5 million (before expenses) for further exploration and development activities.

Although vaccine roll outs still have some way to go, particularly in West Africa, we anticipate that, with the appropriate health precautions, field activities and the ability to travel will increasingly return to normal during the rest of the year.

Going concern and funding

The Group has not earned revenue during the year to 31 March 2021 as it is still in the exploration and development phases of its business. The operations of the Group are currently being financed from funds which the Company has raised from the issue of new ordinary shares and other equity linked instruments.

At 31 March 2021, the Group held cash balances of GBP2,433,000 (2020: GBP33,000). As noted above an equity placement for GBP3.5 million took place in late March 2021, with GBP1.8 million of the proceeds only being received after the year-end in April 2021. The Group's cash balances at 20 August 2021 were GBP3,248,876.

The Directors have prepared cash flow forecasts for the period ending 30 September 2022. The forecasts include payments for the Bougouni mining licence and second stage concession payments for the Fatou project, repayment of the $300,000 advance from Riverfort, further development of the Bougouni Feasibility Study, additional exploration activity for both gold and lithium, as well as covering ongoing overheads.

Further funding will be required in due course, but the forecasts show that 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 to raise further financing. 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 2021   31 March 2020 
 Cash and cash equivalents (a)            GBP2,433,000    GBP33,000 
 Administrative expense (b)               GBP513,000      GBP590,000 
 Exploration and evaluation expenditure   GBP542,000      GBP1,602,000 
  (c) 
 

The directors have provided more information on the state of the Group's financing and operational activity above.

'Cash and cash equivalents' is used to measure the Group's financial liquidity. Cash and cash equivalents have increased by GBP2.4 million in the year.

'Administrative expenses' is used to measure the Group's administrative costs and operating results. Administrative expenses for the year were GBP513,000 compared to GBP590,000 in the previous year.

'Exploration and evaluation expenditure' is used to measure expenditure on the Group's gold and lithium projects. Exploration and evaluation expenditure in the year was GBP1.1 million lower than prior year as Kodal's operational focus has been on progressing our application for the mining licence for its key Bougouni Lithium project.

Financial risk management objectives and policies

The Group's principal financial instruments comprise cash and trade and other payables. It is, and has been throughout the year under review, the Group's policy that no trading in financial instruments shall be undertaken. The main risks arising from the Group's financial instruments are liquidity risk, price risk and foreign exchange risk. The Board reviews and agrees policies for managing each of these risks and they are summarised below.

Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash reserves to fund the Group's exploration and operating activities. Management prepares and monitors forecasts of the Group's cash flows and cash balances monthly and ensures that the Group maintains sufficient liquid funds to meet its expected future liabilities. The Group intends to raise funds in discrete tranches to provide sufficient cash resources to manage the activities through to revenue generation.

Price risk

The Group is exposed to fluctuating prices of commodities, including gold and lithium, and the existence and quality of these commodities within the licence and project areas. The Directors will continue to review the prices of relevant commodities as development of the projects continues and will consider how this risk can be mitigated closer to the commencement of mining.

Foreign exchange risk

The Group operates in a number of overseas jurisdictions and carries out transactions in a number of currencies including Sterling, CFA Franc, US dollars and Australian dollars. The Group does not have a policy of using hedging instruments but will continue to keep this under review. The Group operates foreign currency bank accounts to help mitigate the foreign currency risk.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEARED 31 MARCH 2021

 
                                                                  Note   Year ended 31 March   Year ended 31 March 
                                                                                        2021                  2020 
                                                                                         GBP                   GBP 
 Continuing operations 
 Revenue                                                                                   -                     - 
 
 Administrative expenses                                                           (512,885)             (590,389) 
 Share based payments                                              5                (77,979)              (39,226) 
                                                                        --------------------  -------------------- 
 
 OPERATING LOSS                                                                    (590,864)             (629,615) 
 
 Finance charge                                                                     (32,506)                     - 
 Finance income                                                                            -                   111 
                                                                        --------------------  -------------------- 
 
 LOSS BEFORE TAX                                                   2               (623,370)             (629,504) 
 
 Taxation                                                          6                       -                     - 
 
 
 LOSS FOR THE YEAR FROM CONTINUING OPERATIONS                                      (623,370)             (629,504) 
 
 OTHER COMPREHENSIVE INCOME 
 
 Items that may be subsequently reclassified to profit or loss 
 
 Currency translation (loss) / gain                                                (223,635)               148,618 
 
 TOTAL COMPREHENSIVE INCOME FOR THE YEAR                                           (847,005)             (480,886) 
                                                                        ====================  ==================== 
 
 Loss per share 
 
 Basic and diluted (pence)                                         4                (0.0054)              (0.0072) 
 

CONSOLIDATED AND PARENT COMPANY STATEMENTS OF FINANCIAL POSITION AS AT 31 MARCH 2021

 
                                                      Group            Group          Company          Company 
                                              31 March 2021    31 March 2020    31 March 2021    31 March 2020 
                                      Note              GBP              GBP              GBP              GBP 
 NON-CURRENT ASSETS 
 Intangible assets                     7          8,964,089        8,642,568                -                - 
 Property, plant and equipment         8              8,677           14,549                -                - 
 Amounts due from 
  subsidiary undertakings              9                  -                -        7,916,150        7,104,085 
 Investments in subsidiary 
  undertakings                          9                 -                -          512,373          512,373 
                                                             ---------------                   --------------- 
 
                                                  8,972,766        8,657,117        8,428,523        7,616,458 
                                            ---------------  ---------------  ---------------  --------------- 
 CURRENT ASSETS 
 Other receivables                     10         1,854,908           19,978        1,854,908           19,978 
 Cash and cash equivalents                        2,432,807           33,221        2,376,329           28,147 
                                            ---------------  ---------------  ---------------  --------------- 
 
                                                  4,287,715           53,199        4,231,237           48,125 
                                            ---------------  ---------------  ---------------  --------------- 
 
 TOTAL ASSETS                                    13,260,481        8,710,316       12,659,760        7,664,583 
                                            ---------------  ---------------  ---------------  --------------- 
 
 CURRENT LIABILITIES 
 Trade and other payables              11         (624,616)        (658,713)        (321,851)        (239,230) 
                                                             ---------------                   --------------- 
 
 TOTAL LIABILITIES                                (624,616)        (658,713)        (321,851)        (239,230) 
                                            ---------------  ---------------  ---------------  --------------- 
 
 NET ASSETS                                      12,635,865        8,051,603       12,337,909        7,425,353 
                                                             ===============                   =============== 
 
 EQUITY 
 Attributable to owners of the 
 parent: 
 Share capital                         12         4,916,364        2,889,606        4,916,364        2,889,606 
 Share premium account                 12        15,841,134       12,514,604       15,841,134       12,514,604 
 Share based payment reserve                        807,802          729,823          807,802          729,823 
 Translation reserve                              (210,460)           13,175                -                - 
 Retained deficit                               (8,718,975)      (8,095,605)      (9,227,391)      (8,708,680) 
                                            ---------------  ---------------  ---------------  --------------- 
 
 TOTAL EQUITY                                    12,635,865        8,051,603       12,337,909        7,425,353 
                                            ===============  ===============  ===============  =============== 
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEARED 31 MARCH 2021

 
                                                     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 2019      2,566,418   12,147,792    690,597       (135,443)   (7,466,101)    7,803,263 
 
 Comprehensive 
  income 
 Loss for the 
  year                           -            -          -               -     (629,504)    (629,504) 
 Other comprehensive 
  income 
 Currency translation 
  gain                           -            -          -         148,618             -      148,618 
                                                                            ------------ 
 Total comprehensive 
  income for the 
  year                           -            -          -         148,618     (629,504)    (480,886) 
 
 Transactions 
  with owners 
 Share based payment             -            -     39,226               -             -       39,226 
 Proceeds from 
  shares issued            323,188      366,812          -               -             -      690,000 
 
 At 31 March 2020        2,889,606   12,514,604    729,823          13,175   (8,095,605)    8,051,603 
 Comprehensive 
  income 
 Loss for the 
  year                           -            -          -               -     (623,370)    (623,370) 
 Other comprehensive 
  income 
 Currency translation 
  (loss)                         -            -          -       (223,635)             -    (223,635) 
                        ----------  -----------  ---------  --------------  ------------  ----------- 
 Total comprehensive 
  income for the 
  year                           -            -          -       (223,635)     (623,370)    (847,005) 
 
 Transactions 
  with owners 
 Share based payment             -            -     77,979               -             -       77,979 
 Proceeds from 
  shares issued          2,026,758    3,548,315          -               -             -    5,575,073 
 Share issue expenses            -    (221,785)          -               -             -    (221,785) 
                        ----------  -----------  ---------  --------------  ------------  ----------- 
 At 31 March 2021        4,916,364   15,841,134    807,802       (210,460)   (8,718,975)   12,635,865 
                        ----------  -----------  ---------  --------------  ------------  ----------- 
 

PARENT COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE YEARED 31 MARCH 2021

 
                                                              Share 
                                                 Share        based 
                                               premium      payment         Retained          Total 
                         Share capital         account      reserve          deficit         equity 
 Company                           GBP             GBP          GBP              GBP            GBP 
 
   At 31 March 2019          2,566,418      12,147,792      690,597      (7,254,514)      8,150,293 
 
 Comprehensive income 
 Loss for the year                   -               -            -      (1,454,166)    (1,454,166) 
 
 Total comprehensive 
  income for the year                -               -            -      (1,454,166)    (1,454,166) 
 
 Transactions with 
  owners 
 Share based payment                 -               -       39,226                -         39,226 
 Proceeds from shares 
  issued                       323,188         366,812            -                -        690,000 
                        --------------   -------------   ----------   --------------   ------------ 
 
   At 31 March 2020          2,889,606      12,514,604      729,823      (8,708,680)      7,425,353 
 Comprehensive income 
 
 Loss for the year                   -               -            -        (518,711)        (518,711) 
 Total comprehensive 
  income for the year                -               -            -        (518,711)        (518,711) 
 
 Transactions with 
  owners 
 Share based payment                 -               -       77,979                -           77,979 
 Proceeds from shares 
  issued                     2,026,758       3,548,315            -                -        5,575,073 
 Share issue expenses                -       (221,785)            -                -        (221,785) 
                        --------------   -------------   ----------   --------------   -------------- 
 At 31 March 2021            4,916,364      15,841,134      807,802      (9,227,391)       12,337,909 
                        --------------   -------------   ----------   --------------   -------------- 
 
 
     CONSOLIDATED AND PARENT COMPANY STATEMENTS OF CASH FLOWS   FOR THE YEARED 31 MARCH 2021 
 
                                                         Group           Group         Company         Company 
                                                    Year ended      Year ended      Year ended      Year ended 
                                                 31 March 2021   31 March 2020   31 March 2021   31 March 2020 
                                          Note             GBP             GBP             GBP             GBP 
 Cash flows from operating activities 
 Loss before tax                                     (623,370)       (629,504)       (518,711)     (1,454,166) 
 Adjustments for non-cash items: 
 Share based payments                                   77,979          39,226          77,979          39,226 
 Operating cash flow before movements 
  in working capital                                 (545,391)       (590,278)       (440,732)     (1,414,940) 
 
 Movement in working capital 
 Decrease in receivables                                 3,965           1,033           3,965           1,033 
 (Decrease) / increase in payables                    (34,097)          61,463          82,621          44,828 
                                                --------------  --------------  --------------  -------------- 
 Net movements in working capital                     (30,132)          62,496          86,586          45,861 
 
 
   Net cash outflow from operating 
   activities                                        (575,523)       (527,782)       (354,146)     (1,369,079) 
 
 Cash flows from investing activities 
 Purchase of intangible assets            7          (535,947)     (1,554,353)               -               - 
 Loans to subsidiary undertakings                            -               -       (812,065)       (592,171) 
                                                --------------  --------------  --------------  -------------- 
 
   Net cash outflow from investing 
   activities                                        (535,947)     (1,554,353)       (812,065)       (592,171) 
 
 Cash flow from financing activities 
 Net proceeds from share issues           12         2,419,241         690,000       2,419,241         690,000 
 Net proceeds from convertible loan 
  notes                                              1,095,152               -       1,095,152               - 
 
 Net cash inflow from financing 
  activities                                         3,514,393         690,000       3,514,393         690,000 
                                                --------------  --------------  --------------  -------------- 
 
 Increase / (decrease) in cash and cash 
  equivalents                                        2,402,923     (1,392,135)       2,348,182     (1,271,250) 
 Cash and cash equivalents at beginning 
  of the year                                           33,221       1,408,393          28,147       1,299,397 
 Exchange (loss) / gain on cash                        (3,337)          16,963               -               - 
 
 Cash and cash equivalents at end of 
  the year                                           2,432,807          33,221       2,376,329          28,147 
                                                ==============  ==============  ==============  ============== 
 
 

THE PRINCIPAL ACCOUNTING POLICIES FOR THE YEARED 31 MARCH 2021

The Group has adopted the accounting policies set out below in the preparation of the financial statements. All of these policies have been applied consistently throughout the period unless otherwise stated.

Financial Information

The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 March 2021 or 2020 but is derived from those accounts. Statutory accounts for 2020 have been delivered to the registrar of companies, and those for 2021 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 2021 Annual Report and Accounts and Notice of the Annual 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 28 September 2021.

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 Accounting Standards in conformity with the requirements 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 2021 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 and other equity linked instruments.

At 31 March 2021, the Group held cash balances of GBP2,433,000 (2020: GBP33,000). An equity placement for GBP3.5 million took place in late March, but GBP1.8m of the proceeds were only received after the year-end in April. The Group's cash balances at 20 August 2021 were GBP3,248,876.

The Directors have prepared cash flow forecasts for the period ending 30 September 2022. The forecasts include payments for the Bougouni mining licence and second stage concession payments for the Fatou project, repayment of the $300,000 advance from the Riverfort Investors, further development of the Feasibility Study, additional exploration activity for both gold and lithium, as well as covering ongoing overheads.

Further funding will be required in due course, but the forecasts show that 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 to raise further financing. 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 West African subsidiary undertakings were converted using an end of year rate of XOF 1 : GBP0.00130 (2020: XOF 1 : GBP0.00135).

Transactions in foreign currencies are recorded using the rate of exchange ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the rate of exchange ruling at the reporting date and the gains or losses on translation are included in profit and loss. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the original transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and any recognised impairment loss. Depreciation, which is included in administrative expenses, is charged so as to write off the costs of assets down to their residual value, over their estimated useful lives, using the straight-line method, on the following basis:

   Plant and machinery                                           4 years 
   Motor vehicles                                                     4 years 
   Fixtures, fittings and equipment                       4 years 

Where property, plant and equipment are used in exploration and evaluation activities, the depreciation of the assets is capitalised as part of the cost of exploration and evaluation assets. The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

Investments in subsidiaries

Investments in subsidiaries are stated at cost less any provision for impairment. Where the recoverable amount of the investment is less than the carrying amount, an impairment is recognised.

Exploration and evaluation expenditure

In accordance with IFRS 6 (Exploration for and Evaluation of Mineral Resources), exploration and evaluation costs incurred before the Group obtains legal rights to explore in a specific area (a "project area") are taken to profit or loss.

Upon obtaining legal rights to explore in a project area, the fair value of the consideration paid for acquiring those rights and subsequent exploration and evaluation costs are capitalised as exploration and evaluation assets. The costs of exploring for and evaluating mineral resources are accumulated with reference to appropriate cost centres being project areas or groups of project areas.

Upon the technical feasibility and commercial viability of extracting the relevant mineral resources becoming demonstrable, the Group ceases further capitalisation of costs under IFRS 6.

Exploration and evaluation assets are not amortised prior to the conclusion of appraisal activities, but are carried at cost less impairment, where the impairment tests are detailed below.

Exploration and evaluation assets are carried forward until the existence (or otherwise) of commercial reserves is determined:

where commercial reserves have been discovered, the carrying value of the exploration and evaluation assets are reclassified as development and production assets and amortised on an expected unit of production basis; or

where a project area is abandoned, or a decision is made to perform no further work, the exploration and evaluation assets are written off in full to profit or loss.

Exploration and evaluation assets - impairment

Project areas, or groups of project areas, are determined to be cash generating units for the purposes of assessment of impairment.

With reference to a project area or group of project areas, the exploration and evaluation assets (along with associated production and development assets) are assessed for impairment when such facts and circumstances suggest that the carrying amount of the assets may exceed the recoverable amount.

Such indicators include, but are not limited to, those situations outlined in paragraph 20 of IFRS 6 and include the point at which a determination is made as to whether or not commercial reserves exist.

The aggregate carrying value is compared against the expected recoverable amount, generally by reference to the present value of the future net cash flows expected to be derived from production of the commercial reserves. Where the carrying amount exceeds the recoverable amount, an impairment is recognised in profit or loss.

Intangible assets and impairment

Externally acquired intangible assets are initially recognised at cost and subsequently amortised over their useful economic lives. Amortisation, which is included in administrative expenses, is charged so as to write off the costs of intangible assets, over their estimated useful lives, using the straight-line method, on the following basis:

   Software                                                3 years 

Deferred taxation

Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the reporting date and are expected to apply when the related deferred tax is realised, or the deferred liability is settled.

Deferred tax assets are recognised to the extent that it is probable that the future taxable profit will be available against which the temporary differences can be utilised.

Financial instruments

Financial assets and financial liabilities are recognised on the Statement of Financial Position when the Group becomes a party to the contractual provisions of the instrument.

IFRS 7 (Financial Instruments: Disclosures) requires information to be disclosed about the impact of financial instruments on the Group's risk profile, how the risks arising from financial instruments might affect the entity's performance, and how these risks are being managed. The required disclosures have been made in Note 14 to the financial statements.

The Group's policies include that no trading in derivative financial instruments shall be undertaken.

Cash and cash equivalents

Cash and cash equivalents in the Statement of Financial Position comprise cash at bank and in hand.

Other receivables

Other receivables are carried at amortised cost less provision made for impairment of these receivables. A provision for impairment of receivables is established when there is an expected credit loss on amounts due according to the original terms of the receivables. The amount of the provision is the difference between the assets' carrying amount and the recoverable amount. Provisions for impairment of receivables are included in profit or loss.

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. IFRS also require management to exercise its judgement in the process of applying the Group's accounting policies.

The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of the assets and liabilities within the next financial year are addressed below.

Exploration and evaluation expenditure

In accordance with the Group's accounting policy for exploration and evaluation expenditure, after obtaining licences giving legal rights to explore in the project area, all exploration and evaluation costs for each project are capitalised as exploration and evaluation assets.

The exploration and evaluation assets for each project are assessed for impairment when such facts and circumstances suggest that the carrying value of the assets may exceed the recoverable amount.

The directors have assessed the Group's gold Projects in Mali and Côte d'Ivoire that are not part of the joint venture agreements and determined that they remain prospective. Accordingly, the directors have determined to continue to maintain these licences and explore ways for the Group to advance these prospective areas most effectively. Accordingly, no impairment review has been conducted on these assets.

The directors have assessed the Group's Bougouni Lithium project in Mali, taking into account the Preliminary Feasibility Study published during the year. This project continues to be evaluated and has not yet entered into development; 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 2021 was GBP9.0 million (2020: GBP8.6 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 Statement of Financial Position. However, there is a risk that the subsidiaries will not commence sufficient revenue generating activities and that the carrying amount of the intercompany balances will, therefore, exceed the recoverable amount. Under the requirements of IFRS 9 management has run various scenarios on the expected credit loss of the Company's intercompany balances, including entering production, project/asset sales, and insolvency. Management has updated its calculations reflecting additional amounts advanced to its subsidiaries for work on its lithium and gold projects during the year, and also slightly reduced the risk of credit loss given improvements since last year in the financial, lithium and gold markets. At 31 March 2021 a credit loss provision of GBP877,000 is held against amounts due from subsidiaries (2020: GBP877,000).

Adoption of New and Revised Standards

The Group has adopted all of the new or amended Accounting Standards and interpretations issued by the International Accounting Standards Board ("IASB") that are mandatory and relevant to the Group's activities for the current reporting period.

New standards and interpretations not applied

At the date of authorisation of these consolidated financial statements, certain new standards, amendments and interpretations to existing standards have been published but are not yet effective and have not been adopted early by the Group. These are listed below. The Board anticipates that all of the pronouncements will be adopted in the Group's accounting policies for the first period beginning after the effective date of the pronouncement. The amendments to the standards noted below are not expected to have a material impact on the Group's consolidated financial statements.

 
 Standard                                 Details of amendment / New Standards    Annual periods beginning on or after 
                                          and Interpretations 
 IAS 1 Presentation of Financial          Amendments to IAS 1 Presentation of                           1 January 2023 
 Statements                               Financial Statements to specify the 
                                          requirements for classifying 
                                          liabilities as current or 
                                          non-current. 
 IAS 1 Presentation of Financial          Amendments to IAS 1 Presentation of                           1 January 2023 
 Statements                               Financial Statements to specify the 
                                          requirements for disclosure 
                                          of accounting policies. 
 

There are other standards in issue but not yet effective, which are not likely to be relevant to the Group which have therefo re not been listed.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARED 31 MARCH 2021

   1.    SEGMENTAL REPORTING 

The operations and assets of the Group in the year ended 31 March 2021 are focused in the United Kingdom and West Africa and comprise one class of business: the exploration and evaluation of mineral resources. Management have determined that the Group had three operating segments being the West African Gold Projects, the West African Lithium Projects and the UK administration operations. The Parent Company acts as a holding company. At 31 March 2021, the Group had not commenced commercial production from its exploration sites and therefore had no revenue for the year.

 
 
   Year ended 31 March 2021                               UK   West Africa     West Africa        Total 
 
                                                                      Gold         Lithium 
                                                         GBP           GBP             GBP          GBP 
 Administrative expenses                           (512,349)         (409)           (127)    (512,885) 
 Share based payments                               (77,979)             -               -     (77,979) 
 Finance charge                                     (32,506)             -               -     (32,506) 
 Loss for the year                                 (622,834)         (409)           (127)    (623,370) 
                                                  ----------  ------------  --------------  ----------- 
 
 At 31 March 2021 
 Other receivables                                 1,854,908             -               -    1,854,908 
 
 Cash and cash equivalents                         2,377,831        30,846          24,130    2,432,807 
 Trade and other payables                          (321,851)             -       (302,765)    (624,616) 
 
 Intangible assets - exploration and evaluation 
  expenditure                                              -     1,491,269       7,472,820    8,964,089 
 
 Property, plant and equipment                             -             -           8,677        8,677 
 
 Net assets at 31 March 2021                       3,910,888     1,522,115       7,202,862   12,635,865 
                                                  ----------  ------------  --------------  ----------- 
 
 
 Year ended 31 March 2020                                 UK   West Africa   West Africa       Total 
                                                                      Gold       Lithium 
                                                         GBP           GBP           GBP         GBP 
 Administrative expenses                           (589,806)         (500)          (83)   (590,389) 
 Share based payments                               (39,226)             -             -    (39,226) 
 Finance income                                          111             -             -         111 
                                                  ----------  ------------  ------------  ---------- 
 Loss for the year                                 (628,921)         (500)          (83)   (629,504) 
                                                  ----------  ------------  ------------  ---------- 
 
 At 31 March 2020 
 Other receivables                                    19,978             -             -      19,978 
 Cash and cash equivalents                            29,516         3,536           169      33,221 
 Trade and other payables                          (239,230)       (1,488)     (417,995)   (658,713) 
 Intangible assets - exploration and evaluation 
  expenditure                                              -     1,178,567     7,464,001   8,642,568 
 Property, plant and equipment                             -             -        14,549      14,549 
 Net (liabilities) / assets at 31 March 
  2020                                             (189,736)     1,180,615     7,060,724   8,051,603 
                                                  ----------  ------------  ------------  ---------- 
 
   2.    LOSS BEFORE TAX 
 
                                                   Group            Group 
                                              Year ended       Year ended 
                                           31 March 2021    31 March 2020 
                                                     GBP              GBP 
 Fees payable to the Company's auditor            35,000           30,000 
 Share based payments (note 5)                    77,979           39,226 
 Directors' salaries and fees                    127,265          164,939 
 Employer's National Insurance                     5,672            1,956 
 

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 
                                            2021          2020 
                                             GBP           GBP 
 Audit services 
 - statutory audit of parent and 
  consolidated accounts                   35,000        30,000 
 
   3.    EMPLOYEES' AND DIRECTORS' REMUNERATION 

The average number of people employed in the Company and the Group is as follows:

 
                                                      Group            Group          Company          Company 
                                              31 March 2021    31 March 2020    31 March 2021    31 March 2020 
                                                     Number           Number           Number           Number 
 Average number of employees (including 
  directors):                                             9                9                4                4 
                                            ---------------  ---------------  ---------------  --------------- 
 

The remuneration expense for directors of the Company is as follows:

 
                                         Year ended       Year ended 
                                      31 March 2021    31 March 2020 
                                                GBP              GBP 
 Directors' remuneration                    115,014          164,939 
 Directors' social security costs             5,673            1,956 
                                    ---------------  --------------- 
 
   Total                                    120,687          166,895 
                                    ---------------  --------------- 
 

In addition to the amounts included above, GBP62,496 (2020: GBP67,300) of the directors' remuneration cost has been treated as Exploration and Evaluation expenditure.

 
                          Directors' salary and fees year ended   Share based payments 
                                                  31 March 2021             year ended          Total 
                                                                              31 March     year ended 
                                                                     2021 (see note 5)       31 March 
                                                                                                 2021 
                                                            GBP                    GBP            GBP 
 Bernard Aylward (a)                                     96,510                      -         96,510 
 Charles Joseland (b)                                    35,000                      -         35,000 
 Robert Wooldridge                                       27,250                      -         27,250 
 Qingtao Zeng (c)                                        18,750                      -         18,750 
                                                        177,510                      -        177,510 
                         ======================================  =====================  ============= 
 
 
                          Directors' salary and fees year ended   Share based payments 
                                                  31 March 2020             year ended          Total 
                                                                              31 March     year ended 
                                                                     2020 (see note 5)       31 March 
                                                                                                 2020 
                                                            GBP                    GBP            GBP 
 Bernard Aylward (a)                                    111,763                  1,776        113,539 
 Luke Bryan                                               5,385                  1,776          7,161 
 Charles Joseland (b)                                    33,430                  9,564         42,994 
 Mark Pensabene                                          11,661                  2,294         13,955 
 Robert Wooldridge                                       45,000                    888         45,888 
 Qingtao Zeng (c)                                        25,000                  1,321         26,321 
                                                        232,239                 17,619        249,858 
                         ======================================  =====================  ============= 
 
 
 a    Matlock Geological Services Pty Ltd ("Matlock") a company wholly owned by Bernard Aylward, 
       provided consultancy services to the Group during the year ended 31 March 2021 and received 
       fees of GBP76,094 (2020 GBP76,764). These fees are included within the remuneration figure 
       shown for Bernard Aylward. 
 b    In addition to the amounts included above, Carolus Consulting Ltd, a company wholly owned 
       by Charles Joseland, provided consultancy services to the Group during the year and received 
       fees of GBPnil (2020: GBP1,500). 
 
  c    In addition to the amounts included above, Geosmart Consulting Pty Ltd, a company wholly owned 
       by Qingtao Zeng, provided consultancy services to the Group during the year and received fees 
       of GBP10,595 (2020: GBP13,480). 
 
   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 number of shares   Basic loss per share (pence) 
                                   GBP 
 Year ended 31 March 2021    (623,370)                      11,529,513,459                         0.0054 
 Year ended 31 March 2020    (629,504)                       8,786,936,058                         0.0072 
 

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 2021    31 March 2020 
 Share options outstanding             Number           Number 
 Opening balance                  205,000,000      195,000,000 
 Issued in the year                         -       20,000,000 
 Lapsed in the year                         -     (10,000,000) 
 
   Closing balance                205,000,000      205,000,000 
                              ===============  =============== 
 
 
                               Year ended       Year ended 
                            31 March 2021    31 March 2020 
 Warrants outstanding              Number           Number 
 Opening balance              205,000,000      205,000,000 
 Issued in the year           389,282,755                - 
 Exercised in the year      (308,927,092)                - 
 
   Closing balance            285,355,663      205,000,000 
                          ===============  =============== 
 

Options outstanding for each of the directors at the year-end are outlined below:

 
 Exercisable between           Bernard Aylward   Robert Wooldridge   Qingtao Zeng   Charles Joseland 
 
 8 May 2017 - 8 May 2022            25,000,000          12,500,000              -                  - 
 8 May 2018 - 8 May 2023            12,500,000           6,250,000              -                  - 
 8 May 2019 - 8 May 2024            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                  - 
 18 April 2019 - 18 April 
  2024                                       -                   -              -          3,333,334 
 18 April 2020 - 18 April 
  2025                                       -                   -              -          3,333,333 
 18 April 2021 - 18 April 
  2026                                       -                   -              -          3,333,333 
 
 
 Closing balance                    50,000,000          25,000,000     10,000,000         10,000,000 
                              ================  ==================  =============  ================= 
 

The total value of options and warrants granted in the year was GBP29,912 (2020: GBP39,226). Included within operating losses is a charge for issuing share options and making share-based payments of GBP77,979 (2020: GBP39,226).

Details of share options and warrants outstanding at 31 March 2021:

   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

23 November 2018 39,999,999 0.14-0.38 pence 1 March 2019 - 1 March 2024

23 November 2018 50,000,001 0.14-0.38 pence To be determined at a future date

23 November 2018 90,000,000 0.14-0.38 pence To be determined at a future date

18 April 2019 3,333,334 0.14-0.25 pence 18 April 2020 - 18 April 2025

18 April 2019 3,333,333 0.14-0.25 pence 18 April 2021 - 18 April 2026

18 April 2019 3,333,333 0.14-0.25 pence 18 April 2022 - 18 April 2027

15 July 2020 48,790,008 0.061 pence 15 July 2023

27 October 2020 31,565,656 0.09 pence 27 October 2023

Additional disclosure information:

Weighted average exercise price of share options and warrants:

outstanding at the beginning of the period 0.41 pence

granted during the period 0.06 pence

outstanding at the end of the period 0.35 pence

exercisable at the end of the period 0.33 pence

Weighted average remaining contractual life of

   share options outstanding at the end of the period                                      3.2 years 

Warrants issued in the year to 31 March 2021

The Company entered into option agreements dated 7 April 2020, 15 July 2020 and 27 October 2020 with Riverfort Global Opportunities PCC Limited and YA II PN Ltd under which the following warrants were issued:

 
 Date              Warrants issued   Exercise price 
 7 April 2020          228,571,428    0.04375 pence 
 15 July 2020           97,580,016      0.061 pence 
 27 October 2020        63,131,311       0.09 pence 
 

The warrants are all exercisable for a period of 36 months from the date of grant. Of the total warrants issued in the year, 308,927,092 had been exercised prior to the year end.

The fair values of the options and warrants granted were calculated using the Black-Scholes valuation model. The inputs into the model were:

 
                    7 April 2020      15 July 2020   27 October 2020 
 
 Strike price           0.04375p            0.061p             0.09p 
 Share price             0.0294p           0.0294p           0.0294p 
 Volatility                  75%               75%               75% 
 Expiry date        7 April 2020      15 July 2020   27 October 2020 
                  - 7 April 2023    - 15 July 2023      - 27 October 
                                                                2023 
 Risk free 
  rate                     0.28%             0.28%             0.28% 
 Dividend 
  yield                     0.0%              0.0%              0.0% 
 

Share options issued in the year to 31 March 2020

The Company entered into option agreements dated 18 April 2019 with Charles Joseland and dated 8 May 2019 with Mark Pensabene under which up to 10 million share options may be issued to each of Mr Joseland and Mr Pensabene in three tranches as follows:

 
Exercise price per share     Tranche 1   Tranche 2   Tranche 3  Total 
0.14p                       1,666,667   1,666,667   1,666,666   5,000,000 
0.25p                       1,666,667   1,666,666   1,666,667   5,000,000 
Total                       3,333,334   3,333,333   3,333,333   10,000,000 
 

All the options have a life of 5 years from vesting. 34 per cent. of the options vest in one year, with a further 33 per cent. vesting in two years and the remaining 33 per cent. vesting in three years' time. The options issued to Mr Pensabene lapsed on 31 October 2019 when Mr Pensabene resigned before the options had vested.

The fair values of the options and warrants granted were calculated using the Black-Scholes valuation model. The inputs into the model were:

 
                 18 April 2019     8 May 2019 
 
 Strike price    0.14p - 0.25p     0.14p - 0.25p 
 Share price     0.08p - 0.11p     0.07p - 0.09p 
 Volatility      69%               69% 
 Expiry date     18 April 2020 -   8 May 2020 - 
                  18 April 2027     8 May 2027 
 Risk free       0.11% - 0.19%     0.12% - 0.20% 
  rate 
 Dividend 
  yield          0.0%              0.0% 
 
   6.            TAXATION 
 
                                                                Group            Group 
                                                           Year ended       Year ended 
                                                        31 March 2021    31 March 2020 
                                                                  GBP              GBP 
 Taxation charge for the year                                       -                - 
                                                      ---------------  --------------- 
 
 Factors affecting the tax charge for the year 
 Loss from continuing operations before income tax          (623,370)        (629,504) 
 
 Tax at 19% (2019: 19%)                                     (118,440)        (119,606) 
 
 Expenses not deductible                                            -              606 
 Losses carried forward not deductible                        103,624          111,547 
 Deferred tax differences                                      14,816            7,453 
 
   Income tax expense                                               -                - 
                                                      ===============  =============== 
 

The Group has tax losses and other potential deferred tax assets totalling GBP2,425,000 (2020: GBP2,258,000) 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 2019                                         6,951,209 
 Additions in the year                                   1,601,526 
 Effects of foreign exchange                             89,833 
                                                        --------------------------- 
 
   At 1 April 2020                                       8,642,568 
 Additions in the year                                   541,772 
 Effects of foreign exchange                             (220,251) 
                                                        --------------------------- 
 
 At 31 March 2021                                        8,964,089 
 
 AMORTISATION 
 At 1 April 2019 and 1 April 2020 and 31 March 2021      - 
                                                        --------------------------- 
 
 NET BOOK VALUES 
 At 31 March 2021                                        8,964,089 
                                                        =========================== 
 
 At 31 March 2020                                        8,642,568 
                                                        =========================== 
 
 At 31 March 2019                                        6,951,209 
                                                        =========================== 
 

The Company did not have any Intangible Assets as at 31 March 2019, 2020 and 2021.

   8.    PROPERTY, PLANT AND EQUIPMENT 
 
                                  Plant and machinery 
 GROUP                                            GBP 
 COST 
 1 April 2019                                  26,447 
 Additions in the year                              - 
 Effects of foreign exchange                      577 
                                 -------------------- 
 
 At 1 April 2020                               27,024 
 Additions in the year                            526 
 Effects of foreign exchange                  (1,471) 
                                 -------------------- 
 
 At 31 March 2021                              26,079 
 
 DEPRECIATION 
 At 1 April 2019                                6,546 
 Depreciation charge                            5,929 
 
 At 1 April 2020                               12,475 
 Depreciation charge                            5,825 
 Effects of foreign exchange                    (898) 
 
 At 31 March 2021                              17,402 
                                 -------------------- 
 
 NET BOOK VALUES 
 At 31 March 2021                               8,677 
                                 ==================== 
 
 At 31 March 2020                              14,549 
                                 ==================== 
 
 At 31 March 2019                              19,901 
                                 ==================== 
 

All tangible assets are wholly associated with exploration and development projects and therefore the amounts charged in respect of depreciation are capitalised as evaluation and exploration assets within intangible assets.

The Company did not have any Property, Plant and Equipment as at 31 March 2019, 2020 and 2021.

   9.    SUBSIDIARY UNDERTAKINGS 
   a.     AMOUNTS DUE FROM SUBSIDIARY UNDERTAKINGS 
 
                                      Company       Company 
                                     31 March      31 March 
                                         2021          2020 
                                          GBP           GBP 
 Amounts due from subsidiary 
  undertakings                      7,916,150     7,104,085 
 
                                    7,916,150     7,104,085 
 
 

Under the requirements of IFRS 9 management has run various scenarios on the expected credit loss of the Company's intercompany balances, including entering production, project/asset sales, and insolvency. Management has updated its calculations reflecting additional amounts advanced to its subsidiaries for work on its lithium and gold projects during the year, and also slightly reduced the risk of credit loss given improvements since last year in the financial, lithium and gold markets. At 31 March 2021 a credit loss provision of GBP877,000 is held against amounts due from subsidiaries (2020: GBP877,000).

   b.    INVESTMENTS IN SUBSIDIARY UNDERTAKINGS 

The consolidated financial statements include the following subsidiary companies:

 
                                          Country of           Registered office   Equity holding            Nature of 
   Company             Subsidiary of       incorporation                                                      business 
 Kodal Norway (UK)   Kodal Minerals Plc   United Kingdom       Prince Frederick              100%    Operating company 
 Ltd                                                           House, 
                                                               35-39 Maddox 
                                                               Street, London 
                                                               W1S 2PP 
 International       Kodal Minerals Plc   Bermuda              MQ Services Ltd               100%      Holding company 
 Goldfields                                                    Victoria Place, 
 (Bermuda) Limited                                             31 Victoria 
                                                               Street, 
                                                               Hamilton HM 10 
                                                               Bermuda 
 International       International        Côte d'Ivoire   Abidjan Cocody                100%   Mining exploration 
 Goldfields          Goldfields                                Les Deux Plateaux 
 Côte           (Bermuda) Limited                         7eme Tranche 
 d'Ivoire SARL                                                 BP Abidjan 
                                                               Côte 
                                                               d'Ivoire 
 International       International        Mali                 Bamako, Faladi,               100%   Mining exploration 
 Goldfields Mali     Goldfields                                Mali Univers, Rue 
 SARL                (Bermuda) Limited                         886 B, Porte 487 
                                                               Mali 
 Jigsaw Resources    International        Bermuda              MQ Services Ltd               100%   Mining exploration 
 CIV Ltd             Goldfields                                Victoria Place, 
                     (Bermuda) Limited                         31 Victoria 
                                                               Street, 
                                                               Hamilton HM 10 
                                                               Bermuda 
 Corvette CIV SARL   Jigsaw Resources     Côte d'Ivoire   Abidjan Cocody      100%             Mining exploration 
                     CIV Ltd                                   Les Deux Plateaux 
                                                               7eme Tranche 
                                                               BP Abidjan 
                                                               Côte 
                                                               d'Ivoire 
 Future Minerals     International        Mali                 Bamako, Faladi,     100%             Mining exploration 
 SARL                Goldfields                                Mali Univers, Rue 
                     (Bermuda) Limited                         886 B, Porte 487 
                                                               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 2021 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 2021.

 
                                                       Year ended       Year ended 
   Carrying value of investment in subsidiaries     31 March 2021    31 March 2020 
                                                              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 2021    31 March 2020    31 March 2021    31 March 2020 
                                                GBP              GBP              GBP              GBP 
 Share issue proceeds receivable          1,838,895                -        1,838,895                - 
 Other receivables                           16,013           19,978           16,013           19,978 
 
                                          1,854,908           19,978        1,854,908           19,978 
 
 

All receivables at each reporting date are current. No receivables are past due. The Directors consider that the carrying amount of the other receivables approximates their fair value and there are no expected credit losses.

11. TRADE AND OTHER PAYABLES

 
                        Group       Group     Company     Company 
                     31 March    31 March    31 March    31 March 
                         2021        2020        2021        2020 
                          GBP         GBP         GBP         GBP 
 Trade payables       357,514     456,847      55,401     147,438 
 Other payables       267,102     201,866     266,451      91,792 
 
                      624,616     658,713     321,852     239,230 
 
 

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:

 
                                    Note     Nominal Value   Number of Ordinary Shares   Share Capital   Share Premium 
                                                                                                   GBP             GBP 
 
 
   At 31 March 2019                                                      8,212,539,503       2,566,418      12,147,792 
 
 
 July 2019                            a       GBP0.0003125                 718,750,000         224,609         228,516 
 July 2019 - Treasury shares held             GBP0.0003125               (250,000,000)        (78,125)               - 
 August 2019                          b       GBP0.0003125                  65,451,616          20,454          44,546 
 October 2019                         c       GBP0.0003125                 250,000,000          78,125          93,750 
 October 2019 - Treasury shares sold          GBP0.0003125                 250,000,000          78,125               - 
 
 
   At 31 March 2020                                                      9,246,741,119       2,889,606      12,514,604 
 April 2020                         d         GBP0.0003125               1,428,571,429         446,429         202,102 
 April 2020                         e         GBP0.0003125                 378,323,379         118,226          14,187 
 June 2020                          f         GBP0.0003125                  56,987,211          17,809           2,137 
 September 2020                     g         GBP0.0003125                 228,571,428          71,429          28,571 
 October 2020                       h         GBP0.0003125                 125,034,486          39,073          40,199 
 November 2020                      i         GBP0.0003125                  85,063,264          26,582          27,348 
 December 2020                      j         GBP0.0003125                 118,600,205          37,063          38,130 
 January 2021                       k         GBP0.0003125                 176,190,315          55,059          56,645 
 January 2021                       l         GBP0.0003125                 347,078,879         108,462         111,586 
 February 2021                      m         GBP0.0003125                 153,379,428          47,931          74,314 
 March 2021                         n         GBP0.0003125                 128,080,136          40,025          68,131 
 March 2021                         o         GBP0.0003125                 210,896,619          65,905         114,538 
 March 2021                         p         GBP0.0003125                 168,489,949          52,653          91,507 
 March 2021                         q         GBP0.0003125               2,800,000,000         875,000       2,424,075 
 March 2021                         r         GBP0.0003125                  48,790,008          15,247          14,515 
 March 2021                         s         GBP0.0003125                  31,565,656           9,864          18,545 
 
   At 31 March 2021                                            15,732,363,511              4,916,364       15,841,134 
                                                            --------------------------  --------------  -------------- 
 
 

a) On 29 July 2019, a total of 718,750,000 shares were issued in a placing at an issue price of 0.08 pence per share. Of these placing shares, 250,000,000 shares were allotted to SVS Securities plc which entered administration on 5 August 2019 and did not complete its placing participation. These shares were held as treasury shares at 30 September 2019 and were then placed on 28 October 2019.

b) On 2 August 2019, a total of 65,451,616 shares were issued to Bambara Resources SARL at an issue price of 0.099 pence per share.

c) On 28 October 2019, a total of 250,000,000 shares were issued in a placing and subscription at a price of 0.05 pence per share. In addition, the Company placed the 250,000,000 shares allotted to SVS Securities plc in July 2019 at the same price.

d) On 7 April 2020, a total of 1,428,571,429 shares were issued to Riverfort Global Opportunities PCC Limited and YA II PN Ltd (the "Investors") in connection with the Equity Sharing Agreement ("ESA"). The shares issued under the ESA were issued at an average price of 0.04686 pence per share. Share issue expenses of GBP20,860 were offset against the share premium account.

e) On 7 April 2020, a total of 378,323,379 shares were issued at an issue price of 0.035 pence per share to a number of Directors and senior management as payment for salaries or fees owed.

f) On 29 May 2020, a total of 56,987,211 shares were issued at a price of 0.035 pence per share to satisfy payment of certain third party professional fees.

g) On 7 September 2020, a total of 228,571,428 shares were issued to the Investors at a price of 0.04375 pence per share in connection with the exercise of warrants issued in connection with the ESA.

h) On 15 October 2020, the Investors elected to convert a total amount of $102,352.31 (equivalent to GBP79,271.86), made up of a principal amount of US$100,004.40 and accrued interest of $2,347.91, into 125,034,486 ordinary shares at a price of 0.06340 pence per share.

i) On 2 November 2020, the Investors elected to convert a total amount of $70,358.92 (equivalent to GBP53,930.11), made up of a principal amount of $70,000.00 and accrued interest of $358.92, into 85,063,264 ordinary shares at a price of 0.06340 pence per share.

j) On 15 December 2020, the Investors elected to convert a total amount of $101,160.41 (equivalent to GBP75,192.53), made up of a principal amount of $100,000.00 and accrued interest of $1,160.41, into 118,600,205 ordinary shares at a price of 0.06340 pence per share.

k) On 5 January 2021, the Investors elected to convert a total amount of $150,809.59 (equivalent to GBP111,704.66), made up of a principal amount of $150,000.00 and accrued interest of $809.59, into 176,190,315 ordinary shares at a price of 0.06340 pence per share.

l) On 8 January 2021, the Investors elected to convert a total amount of $300,242.88 (equivalent to GBP220,048.01), made up of a principal amount of $300,000.00 and accrued interest of $242.88, into 347,078,879 ordinary shares at a price of 0.06340 pence per share.

m) On 19 February 2021, the Investors elected to convert a total amount of $169,384.70 (equivalent to GBP122,244.94), made up of a principal amount of $150,000.00 and accrued interest of $19,384.70, into 153,379,428 ordinary shares at a price of 0.079701 pence per share.

n) On 17 March 2021, the Investors elected to convert a total amount of $150,971.51 (equivalent to GBP108,155.99), made up of a principal amount of $150,000 and accrued interest of $971.51, into 128,080,136 ordinary shares at a price of 0.084444 pence per share.

o) On 22 March 2021, the Investors elected to convert a total amount of $250,337.33 (equivalent to GBP180,443.15), made up of a principal amount of $250,000 and accrued interest of $337.33, into 210,896,619 ordinary shares at a price of 0.08556 pence per share.

p) On 22 March 2021, the Investors elected to convert a total amount of US$200,000 (equivalent to GBP144,160), made up of a principal amount of US$200,000 and no accrued interest, into 168,489,949 ordinary shares at a price of 0.08556 pence per share.

q) On 25 March 2021, a total of 2,800,000,000 shares were issued in a placing at a price of 0.125 pence per share. Share issue expenses of GBP200,925 were offset against the share premium account.

r) On 25 March 2021, a total of 48,790,008 shares were issued to the Investors at a price of 0.061 pence per share in connection with the exercise of warrants.

s) On 25 March 2021, a total of 31,565,656 shares were issued to the Investors at a price of 0.09 pence per share in connection with the exercise of warrants.

13. RESERVES

 
 Reserve                       Description and purpose 
 Share premium                 Amount subscribed for share capital in excess of nominal value. 
 Share based payment reserve   Cumulative fair value of options and share 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 reserve           Gains/losses arising on re-translating 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 2021 earned interest of GBPnil (2020: GBP111). 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 liabilities at amortised 
                                 Loans and receivables                                        cost 
                                                                                                           Total 
 31 March 2021 
 Assets 
 Other receivables                           1,854,908                                           -     1,854,908 
 Cash and cash equivalents                   2,432,807                                           -     2,432,807 
                              ------------------------  ------------------------------------------  ------------ 
 
   Total                                     4,287,715                                           -     4,287,715 
                              ========================  ==========================================  ============ 
 
 Liabilities 
 Trade and other payables                            -                                   (624,616)     (624,616) 
                              ------------------------  ------------------------------------------  ------------ 
 
   Total                                             -                                   (624,616)     (624,616) 
                              ========================  ==========================================  ============ 
 
 
 
 31 March 2020                      GBP           GBP           GBP 
 Assets 
 Other receivables               19,978             -        19,978 
 Cash and cash equivalents       33,221             -        33,221 
                              ---------  ------------  ------------ 
 
   Total                         53,199             -        53,199 
                              =========  ============  ============ 
 
 Liabilities 
 Trade and other payables             -     (658,713)     (658,713) 
 
   Total                              -     (658,713)     (658,713) 
                              =========  ============  ============ 
 
 

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         USD     NOK     AUD      XOF       Total 
 31 March 2021 
 Assets 
 Other receivables     1,854,908           -       -       -        -   1,854,908 
 Cash and cash 
  equivalents          2,202,748     173,586   1,497       -   54,976   2,432,807 
                      ----------  ----------  ------  ------  -------  ---------- 
 
 Total                 4,057,656     173,586   1,497       -   54,976   4,287,715 
                                                              ======= 
 
 Liabilities 
 Trade and other 
  payables              (83,714)   (539,503)       -   (749)    (650)   (624,616) 
                      ----------  ----------  ------  ------  =======  ---------- 
 
 
 
                             GBP         USD     NOK        AUD         XOF       Total 
 31 March 
  2020 
 Assets 
 Other receivables        19,978           -       -          -           -      19,978 
 Cash and 
  cash equivalents        28,147           -   1,370          -       3,704      33,221 
                      ----------  ----------  ------  ---------  ----------  ---------- 
 
 Total                    48,125           -   1,370          -       3,704      53,199 
                                                                 ========== 
 
 Liabilities 
 Trade and 
  other payables       (179,506)   (314,468)       -   (54,665)   (110,074)   (658,713) 
                      ----------  ----------  ------  ---------  ==========  ---------- 
 
 

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 2021, the Company paid fees to SP Angel of GBP240,381 (2020: GBP58,323). The balance due to SP Angel at 31 March 2021 was GBPnil (2020: GBP7,979).

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 2021 and received fees of GBP76,094 (2019 GBP76,764). These fees are included within the remuneration figure shown for Bernard Aylward in note 3. The balance due to Matlock at 31 March 2021 was GBPnil (2020: GBP21,626).

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 2021 and received fees of GBP10,595 (2020: GBP13,480). The balance due to Geosmart at 31 March 2021 was GBPnil (2020: GBP2,502).

Carolus Consulting Ltd ("Carolus"), a company wholly owned by Charles Joseland, a Director, provided consultancy services to the Group during the year ended 31 March 2021 and received fees of GBPnil (2020: GBP1,500). The balance due to Carolus at 31 March 2021 was GBPnil (2020: GBPnil).

16. CONTROL

No one party is identified as controlling the Group.

17. CAPITAL COMMITMENTS

The Group had capital commitments to exploration and evaluation expenditure of GBPnil (2020: GBP130,000).

18. EVENTS AFTER THE REPORTING PERIOD

On 21 May 2021, a total of 80,355,664 shares were issued to the Investors in connection with the exercise of warrants. 48,790,008 warrants were issued in July 2020 with an exercise price of 0.061 pence per share and 31,565,656 warrants were issued in October 2020 with an exercise price of 0.09 pence per share.

**ENDS**

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/Liz Kirchner              Tel: 020 3328 
                                                       5656 
 SP Angel Corporate Finance LLP, Financial Adviser 
  & Broker                                             Tel: 020 3470 
  John Mackay, Adam Cowl                               0470 
 St Brides Partners Ltd, Financial PR 
  Susie Geliher/Isabelle Morris                        Tel: 020 7236 
                                                       1177 
 

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END

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