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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Kodal Minerals Plc | LSE:KOD | London | Ordinary Share | GB00BH3X7Y70 | ORD 0.03125P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.415 | 0.40 | 0.43 | 0.415 | 0.415 | 0.415 | 16,147,155 | 08:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Misc Nonmtl Minrls, Ex Fuels | 0 | -1.46M | -0.0001 | -41.00 | 82.99M |
From Apr 2021 to Apr 2024
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
Hot Features
Premium
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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