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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Regency Mines Plc | LSE:RGM | London | Ordinary Share | GB00BKM69866 | ORD 0.01P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.90 | 0.85 | 0.95 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2022 to Apr 2024
TIDMCRCL
RNS Number : 6995H
Corcel PLC
28 November 2022
Corcel PLC
("Corcel" or the "Company")
Final Audited Results
for the Year Ended 30 June 2022 and Notice of Annual General Meeting
28 November 2022
The Company's Annual Report and Financial Statements for 2022, extracts from which are set out below, together with the Notice of the Company's Annual General Meeting (AGM) which will be published to shareholders on Tuesday 29 November 2022 and a copy of the documents will be available shortly on the Company's website at www.corcelplc.com.
The AGM is to be held at We Work, 123 Buckingham Palace Rd, London, SW1W 9SH at 10:00a.m. on Thursday, 22 December 2022.
Chairman and CEO Statement
Overview
Corcel is an AIM listed company strategically increasing its exposure to critical battery metals prior to the widely expected supply crunch and associated structural price increases. Of particular focus for the Company are nickel and cobalt, which are both core battery metals with large supply deficits widely expected in the mid-2020s as the electric vehicle revolution and economic decarbonisation gains pace.
The Company owns 41% of the Mambare nickel-cobalt project in Papua New Guinea, where recent focus by the joint venture has been on securing a mining lease covering a DSO operation at the project. In line with its growth strategy, the Company acquired a second material nickel-cobalt project in Papua New Guinea (PNG) during the period, signing a share purchase agreement with RMI in August 2021 to acquire 100% of the issued share capital in Australian-registered Niugini Nickel Pty Ltd, which owns 100% of the Wowo Gap nickel-cobalt project. As consideration for the acquisition, the Company released all liabilities and obligations in connection with its previously acquired AUD 4,761,087 senior debt position in Resource Mining Corporation Limited (RMI.) The Company sees significant synergies between the two PNG battery metal projects and views this acquisition as a significant step in its evolution towards building a leading regional battery metal and nickel /cobalt business with material scale.
Having successfully acquired the Wowo Gap project, the Company then sought to de-risk the project technically and to prepare for a mining lease application. The first steps in this process were to undertake a GAP analysis in anticipation of a Bankable Feasibility Study (BFS) and the establishment of a JORC 2012 compliant resource for the Wowo Gap project. The JORC resource, which was announced on 17 May 2022, applies much more stringent economic criteria and validates Corcel's underlying rationale for the asset acquisition, confirming Wowo Gap as a similar size and grade deposit to the Company's sister project at Mambare, also in PNG.
Following these advancements of the Wowo gap project, we have now, after the period end, announced our intended structure to fund, continue to grow and ultimately develop the enlarged battery metals portfolio through the creation of a Singapore based upstream Battery Metal joint venture, which will, subject to contract, own CRCL's positions in both the Mambare and Wowo Gap projects. We also intend to add into this joint venture a third battery metal project, namely the Doncella lithium salt brine project in Argentina. The intended joint venture structure, called Integrated Battery Metals ("IBM") offers Corcel a 50% interest carried for the first $1.5m of expenditure as well as a 1.5% gross revenue royalty. Corcel retains control of the JV and will nominate half of the Board while progressing a shared vision with the other parties to list the JV in Singapore.
Alongside the creation of this joint venture, the Company welcomes Shangdong New Power COSMO AM&T ("NPC") as a new cornerstone investor with a significant equity position and Board representation. NPC had previously been in discussions with the Company as a potential offtaker for the PNG portfolio, and ultimately will now invest in both Corcel directly as well as the battery metal projects via the IBM structure.
Following the increased focus on upstream battery metals as its core strategy, and given the looming economic recession, the Company is in the process of strategically winding down its UK based gas peaker and battery storage portfolio. This has been progressed via the announced sale of the Tring Road gas peaker project, which lowers the Company's debt burden following a restructuring in October 2022 with a view to freeing up further capital for immediate operational and capital commitments. The Board is now actively working to further de-leverage the Company by repaying all of its debts well before they become due.
The Company has also recently further broadened its portfolio with the application for the Star Mountains Gold-Copper tenement in PNG and in securing an option on the Mt. Weld rare earth project in Western Australia. These opportunities are potentially large upside projects for Corcel, which only require minimal upfront capital to access.
Discussion of Results
We report during the period that the Group incurred a loss of GBP2.128 million whilst finance costs over the year increased to GBP0.224 million, reflecting increased interest and finance fees (2021: GBP0.065million). Overall, administrative costs increased slightly for the year to GBP1.26 million (2021: GBP1.0 million) largely reflecting increased insurance costs, professional services costs, share based payments (non-cash) and payroll costs.
Prospects
During these challenging times in global and domestic markets, the Board is very cognisant that the continued support of our key stakeholders, including lenders, shareholders and the new cornerstone investor, remains critical.
We are amongst the first movers in this space in the micro-cap sector and we believe that our shareholders will, in due course, see significant rewards from the hard miles we have covered building the foundations to support our present strategic positioning, which now includes both an intended Singapore listed joint venture as well as investments from large industrial and strategic partners.
James Parsons Scott Kaintz Executive Chairman Chief Executive Officer
Results and Dividends
The Group made a loss after taxation of GBP2.128 million (2021: GBP1.227 million). The Directors do not recommend the payment of a dividend. The following financial statements are extracted from the audited financial statements, which were approved by the Board of Directors and authorised for issuance on 25 November 2022.
For further information, please contact:
Scott Kaintz 020 7747 9960 Corcel Plc CEO
James Joyce / Andrew de Andrade 0207 220 1666 WH Ireland Ltd NOMAD & Broker
Patrick d'Ancona 0207 3900 230 Vigo Communications IR
The information contained within this announcement is deemed to constitute inside information as stipulated under the retained EU law version of the Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. The information is disclosed in accordance with the Company's obligations under Article 17 of the UK MAR. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
Independent Auditor's Report
to the members of Corcel Plc
Opinion
We have audited the financial statements of Corcel Plc (the "parent company") and its subsidiaries (the "group") for the year ended 30 June 2022 which comprise the Consolidated Income Statement, the Consolidated Statement of Comprehensive Income, the Consolidated and Parent Company Statements of Financial Position, the Consolidated and Parent Company Statements of Changes in Equity, the Consolidated and Parent Company Statements of Cash Flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and UK-adopted international accounting standards and as regards the parent company financial statements, as applied in accordance with the provisions of the Companies Act 2006.
In our opinion:
-- the financial statements give a true and fair view of the state of the group's and of the parent company's affairs as at 30 June 2022 and of the group's loss for the year then ended;
-- the group financial statements have been properly prepared in accordance with UK-adopted international accounting standards;
-- the parent company financial statements have been properly prepared in accordance with UK-adopted international accounting standards (UK IAS) and as applied in accordance with the provisions of the Companies Act 2006; and
-- the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to note 1.2 in the financial statements, which indicates that the group and the parent company are reliant on securing further financing to meet committed expenditure requirements and working capital needs as they fall due. As stated in note 1.2, these events or conditions, along with the other matters as set forth in note 1.2, indicate that a material uncertainty exists that may cast significant doubt on the group's and parent company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors' assessment of the group's and parent company's ability to continue to adopt the going concern basis of accounting included:
-- consideration of the objectives, policies and processes in managing its working capital as well as exposure to financial, credit and liquidity risks;
-- reviewing the cash flow forecasts for the ensuing twelve months from the date of approval of these group financial statements and assessment thereof;
-- performing sensitivity analysis on the cash flow forecasts prepared by management, and challenging the assumptions included thereto;
-- reviewing the management's going concern memorandum assessment and discussing with management regarding the future plans and availability of funding;
-- reviewing the adequacy and completeness of disclosures in the group financial statements; and
-- reviewing post balance sheet events demonstrating ability to raise funds and restructure debt.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Emphasis of Matter
We draw attention to note 1.5, which discloses the significant judgements used by the management to determine the recoverability of the loan to and investments in the joint venture (Oro Nickel Ltd) and subsidiary (Niugini Nickel Pty, Ltd).
The recoverability of the loan of GBP1,502,000 and investment of GBP1,651,000 pertaining to Oro Nickel Ltd is included in the Consolidated and Parent Company Statements of Financial Position and is dependent on the successful renewal of the exploration license. The license remains under renewal as at the year end.
The recoverability of exploration and evaluation asset of GBP1,026,000 in the Consolidated Statement of Financial Position and loan of GBP228,000 and investment of GBP1,014,000 in the Parent Company Statement of Financial Position pertaining to Niugini Nickel Pty, Ltd is dependent on the successful renewal of the exploration license. The license remains under renewal as at the year end.
The good standing of these licences is critical for project development and subsequent value extraction, which is key to the recoverability of the loans and investments. Should the licenses not be renewed, an impairment may be required to the value of the loans and investments as at 30 June 2022.
Our application of materiality
For the purposes of determining whether the financial statements are free from material misstatement, we define materiality as the magnitude of misstatement that makes it probable that the economic decisions of a reasonably knowledgeable person, relying on the financial statements, would be changed or influenced. We also determine a level of performance materiality which we use to assess the extent of testing needed to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality for the financial statements as a whole.
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. Materiality is used to determine the financial statement areas that are included within the scope of our audit and the extent of sample sizes during the audit. No significant changes have come to light during the course of the audit which required a revision to our materiality for the financial statements as a whole.
Materiality for the group financial statements was set at GBP97,000 (2021: GBP122,000). This was calculated as a percentage of net assets. Using our professional judgement, we have determined this to be the principal benchmark within the group financial statements as it is from these net assets that the group seeks to deliver returns for shareholders, in particular the value of exploration and development projects the group is interested in through its subsidiaries, associates and joint ventures.
Materiality for the significant components of the group ranged from GBP45,000 (2021: GBP120,000) to GBP96,000 (2021: GBP120,000) calculated as a percentage of net assets and risk assessment.
Performance materiality for the group financial statements was set at GBP67,900 (2021: GBP97,600) being 70% (2021: 80%) of materiality for the group financial statements as a whole. The performance materiality for the significant components is calculated on the same basis as group materiality.
Materiality and performance materiality for the parent company was set at GBP96,000 (2021: GBP120,000) and GBP67,200 (2021: GBP96,000) respectively. The materiality and performance materiality for the significant components is calculated on the same basis as group materiality.
In determining performance materiality, we considered the following factors:
-- our cumulative knowledge of the group and its environment, including industry specific trends;
-- the change in the level of judgement required in respect of the key accounting estimates; -- significant transactions during the year; -- the stability in key management personnel; and -- the level of misstatements identified in prior periods.
We agreed to report to those charged with governance all corrected and uncorrected misstatements we identified through our audit with a value in excess of GBP4,850 (2021: GBP6,100) for the group and for the parent company a value in excess of GBP4,800 (2021: GBP6,000). We also agreed to report any other audit misstatements below that threshold that we believe warranted reporting on qualitative grounds.
Our approach to the audit
Our audit is risk based and is designed to focus our efforts on the areas at greatest risk of material misstatement, together with areas subject to significant management judgement.
In designing our audit, we looked at areas which deemed to involve significant judgement and estimation by the directors, such as the key audit matter surrounding the carrying value of investments in subsidiaries, joint ventures, and associates, and receivables from other group companies. Other judgemental areas are the accounting treatment of subsidiary acquired during the year, as well as the valuation of share-based payment and warrants transactions. We also addressed the risk of management override of controls, including consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.
The scope of our audit is based on significance of operations and materiality Each component was assessed as to whether they were significant or not to the group by either their size or risk. The parent company and the one operating subsidiary were considered to be significant due to identified risk and size.
Work on all significant components of the group has been performed by us as group auditor.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the Material uncertainty related to going concern section, we have determined the matters described below to be the key audit matters to be communicated in our report.
Hot Features
Premium
Key Audit Matter How our scope addressed this
matter
Carrying value of investment Our work in this area included:
in subsidiaries, joint ventures
and associates and intra-group * Review of management's assessment of recoverability
balances. (Refer to notes 10, of intragroup receivables in accordance with IFRS 9
11 and 14) Financial Instruments criteria;
Investments in subsidiaries
and intra-group loans ( parent
company only), as well as joint * Consideration of recoverability of investments and
ventures(JV) and associates intragroup loans by reference to underlying net asset
balances (group and parent company), values, including the recoverability potential of the
are the most significant balances underlying exploration projects (Mambare
in the Nickel-Cobalt project; Dempster Vanadium project and
financial statements. Wowo Gap Nickel project);
Intra-group balances
The parent company currently * Review of Board impairment papers in respect of
has outstanding receivables investments, including challenge and obtaining
due of GBP278,000 from subsidiaries corroboration for key assumptions used;
(Flexible Grid Solutions Limited
and Niugini Nickel Pty Ltd)
and GBP1,502,000 from JV (Oro
Nickel Ltd). * Obtaining and reviewing any relevant agreements
relating to investments (shareholder agreements; JV
Investments agreements; license agreements etc) to ensure all
The group and parent company terms are complied with; and
own 50% interest in DVY196 Holdings
Corp (GBP337,000), and a 41%
interest in Oro Nickel Ltd (GBP1,651,000)
as at 30 June 2022, both of * Confirming the group and the parent company held good
which have material value in title to the license area;
the financial statements.
The parent company has a 100%
investment in Flexible Grid * Review of disclosures made in respect of these
Solutions (GBP1) and Corcel balances in accordance with the relevant IFRSs.
Australasia (GBP482). Through
Corcel Australasia, it owns
100% of Niugini Nickel Pty Ltd
(GBP1,014,000). Through Flexible As noted in the Emphasis of
Grid Solutions, it owns 100% matter section ,the exploration
of Flexible Grid One Limited license held by Oro Nickel JV
and Weirs Drove Development in respect of the Mambare project
Limited. and Niugini Nickel Pty Ltd in
respect of the Wowo Gap Nickel
Given the continuing losses project remains under renewal
in these entities, and delays and the mining/exploration licenses
in advancing developments at applied for are yet to be granted.
the underlying projects, there If these applications were to
is a risk that the receivable be unsuccessful, this may result
and investment balances may in an impairment to the carrying
be impaired. As determining value of the investments and
the recoverable value or recoverability intra-group balances.
involves high degree of management
estimate and judgement, there
is a risk of management bias
and override of control.
=================================================================
Carrying value of exploration Our work in this area included:
and evaluation asset (group)
(Refer to note 22) * Confirming that the group has good title to the
licences held;
The exploration and evaluation
asset represents a significant
balance in the group's financial
statements. There is the risk * Testing the capitalised costs including the
that this amount is impaired considerations made in respect of IFRS 6 and policy
and the capitalised amounts adopted by the group;
do not meet the recognition
criteria as adopted by the group.
The capitalisation of the costs
and determination of the carrying * Review of Board impairment papers in respect of
value of asset are subject to carrying value, including challenge and obtaining
high degree of management estimate corroboration for key assumptions used;
and judgement and therefore
there is a risk of management
bias and override of control.
* Assessed the competence and objectivity of the
experts preparing Competent Persons Report (CPR) and
satisfied ourselves that they were appropriately
qualified to carry out the reserves estimation;
* Reviewed the Competent Persons Report prepared by a
third party expert and challenged the inputs used;
* Review of disclosures made in respect of these
balances in accordance with the relevant IFRSs.
As noted in the Emphasis of
matter section, the exploration
license held by Niugini Nickel
Pty Ltd in respect of the Wowo
Gap Nickel project remains under
renewal and the exploration
license applied for has yet
to be granted. If these applications
were to be unsuccessful, this
may result in an impairment
to the carrying value.
=================================================================
Other information
The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the group and parent company financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
--the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
--the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
--adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
--the parent company financial statements are not in agreement with the accounting records and returns; or
--certain disclosures of directors' remuneration specified by law are not made; or
--we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the statement of directors' responsibilities, the directors are responsible for the preparation of the group and parent company financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the group and parent company financial statements, the directors are responsible for assessing the group and parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
-- We obtained an understanding of the group and parent company and the sector in which they operate to identify laws and regulations that could reasonably be expected to have a direct effect on the financial statements. We obtained our understanding in this regard through discussions with management. We also selected a specific audit team based on experience with auditing entities within this industry facing similar audit and business risks.
-- We determined the principal laws and regulations relevant to the group and parent company in this regard to be those arising from:
o AIM Rules;
o UK Companies Act 2006;
o UK-adopted international accounting standards
o UK employment law; and
o Local environmental and mining regulations.
-- We designed our audit procedures to ensure the audit team considered whether there were any indications of non-compliance by the group and parent company with those laws and regulations. These procedures included, but were not limited to:
o Making enquiries of management;
o A review of Board minutes;
o A review of legal ledger accounts; and
o A review of RNS announcements.
-- We also identified the risks of material misstatement of the financial statements due to fraud. Aside from the non-rebuttable presumption of a risk of fraud arising from management override of controls, we did not identify any significant fraud risks.
-- As in all of our audits, we addressed the risk of fraud arising from management override of controls by performing audit procedures, which included, but were not limited to: the testing of journals, reviewing accounting estimates for evidence of bias (refer to the Key audit matter section) and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities . This description forms part of our auditor's report.
Use of our report
This report is made solely to the parent company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the parent company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone, other than the parent company and the parent company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Joseph Archer (Senior Statutory Auditor) 15 Westferry Circus For and on behalf of PKF Littlejohn LLP Canary Wharf Statutory Auditor London E14 4HD
25 November 2022
Financial Statements
Consolidated Statement of Financial Position
as at 30 June 2022
30 June 30 June
2022 2021
Notes GBP'000 GBP'000
---------------------------------------------- ----- -------- --------
ASSETS
Non-current assets
Investments in associates and joint ventures 11 1,988 2,380
Exploration & evaluation assets 22 1,026 -
Property, plant and equipment 52 62
Goodwill 10 - -
Financial instruments - fair value through
other comprehensive income (FVTOCI) 12 1 7
Financial instruments at fair value through
profit and loss (FVTPL) 13 - 72
Other receivables 14 1,502 1,362
Total non-current assets 4,569 3,883
---------------------------------------------- ----- -------- --------
Current assets
Cash and cash equivalents 19 25 392
Financial instruments with fair value through
profit and loss (FVTPL) 13 - -
Trade and other receivables 14 277 1,215
---------------------------------------------- ----- -------- --------
Total current assets 302 1,607
---------------------------------------------- ----- -------- --------
Total assets 4,871 5,490
---------------------------------------------- ----- -------- --------
EQUITY AND LIABILITIES
Equity attributable to owners of the Parent
Called up share capital 17 2,751 2,746
Share premium account 17 24,961 24,161
Shares to be issued 17 75 75
Other reserves 2,095 2,018
Retained earnings (26,758) (24,630)
---------------------------------------------- ----- -------- --------
Total equity attributable to owners of the
Parent 3,124 4,370
---------------------------------------------- ----- -------- --------
Non-Controlling interests - -
---------------------------------------------- ----- -------- --------
Total equity 3,124 4,370
---------------------------------------------- ----- -------- --------
LIABILITIES
Non-current liabilities
Long-term borrowings 15 - -
---------------------------------------------- ----- -------- --------
Total non-current liabilities - -
---------------------------------------------- ----- -------- --------
Current liabilities
Trade and other payables 15 324 237
Short-term borrowings 15 1,423 883
---------------------------------------------- ----- -------- --------
Total current liabilities 1,747 1,120
---------------------------------------------- ----- -------- --------
Total equity and liabilities 4,871 5,490
---------------------------------------------- ----- -------- --------
The accompanying notes form an integral part of these Financial Statements.
These Financial Statements were approved by the Board of Directors and authorised for issue on 25 November 2022 and are signed on its behalf by:
James Parsons
Executive Chairman
Consolidated Income Statement
for the year ended 30 June 2022
Year to Year to
30 June 30 June
2022 2021
Notes GBP'000 GBP'000
------------------------------------------------- ------ ----------- -----------
Gain on sale of financial instruments designated
as FVTPL - (5)
Project expenses (91) (121)
Impairment of investments in joint ventures
and financial instruments held at fair value
through profit and loss (FVTPL) 11 ,13 (488) -
Impairment of goodwill - (25)
Administrative expenses 4 (1,218) (1,014)
Impairment of property, plant and equipment (61) -
Impairment of receivables (67) -
Foreign currency gain/(loss) 1 -
Other income 23 9
Finance costs, net 5 (224) (65)
Share of loss of associates and joint ventures 11 (3) (6)
------------------------------------------------- ------ ----------- -----------
Loss for the year before taxation 3 (2,128) (1,227)
Taxation 6 - -
------------------------------------------------- ------ ----------- -----------
Loss for the year (2,128) (1,227)
------------------------------------------------- ------ ----------- -----------
Loss per share attributable to:
Equity holders of the Parent (2,128) (1,227)
Non-controlling interest - -
------------------------------------------------- ------ ----------- -----------
(2,128) (1,227)
------------------------------------------------- ------ ----------- ----------- Earnings per share attributable to owners of the Parent*: Basic 9 (0.5) pence (0.4) pence Diluted 9 (0.5) pence (0.4) pence ------------------------------------------------- ------ ----------- -----------
Consolidated Statement of Comprehensive Income
for the year ended 30 June 2021
30 June 30 June
2022 2021
GBP'000 GBP'000
--------------------------------------------------------- -------- --------
Loss for the year (2,128) (1,227)
Other comprehensive income
Items that will be not be reclassified subsequently
to profit or loss
Revaluation of FVTOCI investments (6) 3
Unrealised foreign currency gain/(loss) on translation
of foreign operations (4) -
--------------------------------------------------------- -------- --------
Total other comprehensive income for the year (10) 3
--------------------------------------------------------- -------- --------
Total comprehensive loss for the year (2,138) (1,224)
--------------------------------------------------------- -------- --------
Total comprehensive loss attributable to:
Equity holders of the Parent (2,138) (1,224)
Non-controlling interest - -
------------------------------------------ ------- -------
(2,138) (1,224)
------------------------------------------ ------- -------
All of the Group's operations are considered to be continuing.
The accompanying notes form an integral part of these Financial Statements.
Consolidated Statement of Changes in Equity
for the year ended 30 June 2021
The movements in equity during the year were as follows:
Total
Equity
attributable
Share Shares to owners
Share premium to be Retained Other of the Non-controlling Total
capital account issued earnings reserves Parent interests Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------- -------- -------- --------- --------- --------- ------------- ----------------- ---------
As at 1 July 2020 2,726 23,032 - (23,403) 908 3,263 13 3,276
Changes in equity -
for
2021
Loss for the year - - - (1,227) - (1,227) - (1,227)
Acquisition of
non-controlling
interests - - - - - - (13) (13)
Other comprehensive
income
for the year
Revaluation of
FVTOCI
investments - - - - 3 3 - 3
Total comprehensive
income
for the year - - - (1,227) 3 (1,224) (13) (1,237)
Transactions with
owners
Issue of shares 20 2,287 - - - 2,307 - 2,307
Shares to be issued - - 75 - - 75 - 75
Share issue costs - (51) - - - (51) - (51)
Warrants issued - (1,107) - - 1,107 - - -
Total transactions
with
owners 20 1,129 75 - 1,107 2,331 - 2,331
-------------------- -------- -------- --------- --------- --------- ------------- ----------------- ---------
As at 1 July 2021 2,746 24,161 75 (24,630) 2,018 4,370 - 4,370
-------------------- -------- -------- --------- --------- --------- ------------- ----------------- ---------
Changes in equity
for
2022
Loss for the year - - - (2,128) - (2,128) - (2,128)
Other comprehensive
income
for the year
Revaluation of
FVTOCI
investments - - - - (6) (6) - (6)
Unrealised foreign
exchange
loss arising on
retranslation
of foreign company
operations - - - - (4) (4) - (4)
Total comprehensive
income
for the year - - - (2,128) (10) (2,138) - (2,138)
Transactions with
owners
Issue of shares 5 848 - - - 853 - 853
Share issue costs - (48) - - - (48) - (48)
Options issued - - - - 17 17 - 17
Warrants issued - - - - 70 70 - 70
Total transactions
with
owners 5 800 - - 87 892 - 892
-------------------- -------- -------- --------- --------- --------- ------------- ----------------- ---------
As at 30 June 2022 2,751 24,961 75 (26,758) 2,095 3,124 - 3,124
-------------------- -------- -------- --------- --------- --------- ------------- ----------------- ---------
See Note 16 for a description of each reserve included above.
FVTOCI Foreign
financial Share-based currency Total
asset payment Warrant translation other
reserve reserve reserve reserve reserves
Other reserves GBP'000 GBP'000 GBP'000 GBP GBP
------------------------------------- ---------- ------------- -------- ------------ ---------
As at 1 July 2020 1 99 273 535 908
------------------------------------- ---------- ------------- -------- ------------ ---------
Revaluation of FVTOCI investments 3 - - - 3
Warrants granted during the year - - 1,107 - 1,107
As at 1 July 2021 4 99 1,380 535 2,018
------------------------------------- ---------- ------------- -------- ------------ ---------
Revaluation of FVTOCI investments (6) - - - (6)
Unrealised foreign exchange loss
arising on retranslation of foreign
company operations - - - (4) (4)
Options granted during the year - 17 - - 17
Warrants granted during the year - - 70 - 70
As at 30 June 2022 (2) 116 1,450 531 2,095
------------------------------------- ---------- ------------- -------- ------------ ---------
See Note 16 for a description of each reserve included above.
Consolidated Statement of Cash Flows
for the year ended 30 June 2022
Year to Year to
30 June 30 June
2022 2021
GBP GBP
---------------------------------------------------------- -------- --------
Cash flows from operating activities
Loss before taxation (2,128) (1,227)
Impairment of Joint venture projects 416 -
Impairment of financial assets FVTPL 72 -
Impairment of goodwill related to WDD - 25
Impairment of property, plant and equipment 61 -
Gain on sale of FVTPL investments - (5)
Finance cost, net (Note 5 ) 153 65
Share-based payments 109 -
Share of loss in associates and joint ventures, net of
tax (Note 11 ) 3 (6)
Equity settled transactions 11 -
Increase in receivables (31) (53)
Increase in payables 142 374 Decrease in lease liabilities - (42) ---------------------------------------------------------- -------- -------- Net cash outflow from operations (1,192) (869) ---------------------------------------------------------- -------- -------- Cash flows from investing activities Proceeds from sale of FVTOCI and FVTPL investments (Note 12 and 13 ) - 14 Purchase of financial assets carried at amortised cost (Note 14 ) (26) (355) Purchase of property, plant and equipment (23) (62) Expenditure on exploration & evaluation assets (59) - Cash acquired on business combination 2 - Acquisition of non-controlling interest - (15) Payments for investments in associates and joint ventures (Note 11) (151) (183) ---------------------------------------------------------- -------- -------- Net cash outflow from investing activities (257) (601) ---------------------------------------------------------- -------- -------- Cash inflows from financing activities Proceeds from issue of shares net of issue costs 403 1,382 Interest paid (Note 21) - - Proceeds of new borrowings, as received net of associated fees (Note 21) 950 65 Repayment of borrowings (Note 21) (265) - ---------------------------------------------------------- -------- -------- Net cash inflow from financing activities 1,088 1,447 ---------------------------------------------------------- -------- -------- Net decrease in cash and cash equivalents (361) (23) Cash and cash equivalents at the beginning of period 392 415 Foreign exchange on translation of foreign currency (6) - Cash and cash equivalents at end of period 25 392 ---------------------------------------------------------- -------- --------
Major non-cash transactions are disclosed in Note 21 .
The accompanying notes and accounting policies form an integral part of these Financial Statements.
Company Statement of Financial Position
Corcel Plc (Registration Number: 05227458) as at 30 June 2022
30 June 30 June
2022 2021
Notes GBP GBP
----------------------------------------------- ----- -------- --------
ASSETS
Non-current assets
Investments in subsidiaries 10 1,014 -
Investments in associates and joint ventures 11 2,112 2,501
Loans to subsidiaries 278 -
Financial assets with fair value through other
comprehensive income (FVTOCI) 12 1 7
Financial instruments with fair value through
profit and loss (FVTPL) - 72
Other receivables 14 1,502 1,379
Total non-current assets 4,907 3,959
----------------------------------------------- ----- -------- --------
Current assets
Cash and cash equivalents 19 20 387
Trade and other receivables 14 257 1,148
----------------------------------------------- ----- -------- --------
Total current assets 277 1,535
----------------------------------------------- ----- -------- --------
Total assets 5,184 5,494
----------------------------------------------- ----- -------- --------
EQUITY AND LIABILITIES
Called up share capital 17 2,751 2,746
Share premium account 17 24,961 24,161
Shares to be issued 17 75 75
Other reserves 1,564 1,483
Retained earnings (25,913) (24,065)
----------------------------------------------- ----- -------- --------
Total equity 3,438 4,440
----------------------------------------------- ----- -------- --------
LIABILITIES
Non-current liabilities
Long-term borrowings 15 - -
----------------------------------------------- ----- -------- --------
Total non-current liabilities - -
----------------------------------------------- ----- -------- --------
Current liabilities
Trade and other payables 15 323 211
Short-term borrowings 15 1,423 883
----------------------------------------------- ----- -------- --------
Total current liabilities 1,746 1,094
----------------------------------------------- ----- -------- --------
Total equity and liabilities 5,184 5,494
----------------------------------------------- ----- -------- --------
Company Statement of Comprehensive Income
As permitted by Section 408 Companies Act 2006, the Company has not presented its own Statement of Comprehensive Income. The Company's loss for the financial year was GBP1,848,349 (2021: loss of GBP1,366,448). The Company's Total comprehensive loss for the financial year was GBP1,853,978 (2021: loss GBP1,363,300).
These Financial Statements were approved by the Board of Directors and authorised for issue on 25 November 2022 and are signed on its behalf by:
James Parsons
Executive Chairman
The accompanying notes form an integral part of these Financial Statements.
Company Statement of Changes in Equity
for the year ended 30 June 2022
The movements in reserves during the year were as follows:
Share
Share premium Shares Retained Other Total
capital account to be issued earnings reserves equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------- -------- -------- -------------- --------- --------- --------
As at 30 June 2020 2,726 23,032 - (22,698) 373 3,433
Changes in equity for 2021
Loss for the year - - - (1,367) - (1,367)
Other comprehensive income
for the year
Revaluation of FVTOCI investments - - - - 3 3
Total comprehensive income
for the year - - - (1,367) 3 (1,364)
Transactions with owners
Issue of shares 20 2,287 - - - 2,307
Shares to be issued - - 75 - - 75
Share issue and fundraising
costs - (51) - - - (51)
Share warrants granted during
the year - (1,107) - - 1,107 -
Total transactions with owners 20 1,129 75 - 1,107 2,331
---------------------------------- -------- -------- -------------- --------- --------- --------
As at 1 July 2021 2,746 24,161 75 (24,065) 1,483 4,400
---------------------------------- -------- -------- -------------- --------- --------- --------
Changes in equity for 2022
Loss for the year - - - (1,848) - (1,848)
Other comprehensive income
for the year
Revaluation of FVTOCI investments - - - - (6) (6)
Total comprehensive income
for the year - - - (1,848) (6) (1,854)
Transactions with owners
Issue of shares 5 848 - - - 853
Share issue costs - (48) - - - (48)
Share options granted - - - - 17 17
Share warrants granted during
the year - - - - 70 70
---------------------------------- -------- -------- -------------- --------- --------- --------
Total transactions with owners 5 800 - - 87 892
---------------------------------- -------- -------- -------------- --------- --------- --------
As at 30 June 2022 2,751 24,961 75 (25,913) 1,564 3,438
---------------------------------- -------- -------- -------------- --------- --------- --------
FVTOCI
financial Share-based Total
asset payment Warrants other
reserve reserve reserve reserves
Other reserves GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------------- ---------- ----------- -------- ---------
As at 30 June 2020 1 99 273 373
Changes in equity for 2021
Other comprehensive income for the year
Revaluation of FVTOCI investments 3 - - 3
Transfer of FVTOCI reserve relating to - -
impaired assets and disposals - -
Share options granted during the year - - - -
Warrants issued during the year - - 1,107 1,107
Total Other comprehensive (expenses) /
income 3 - 1,107 1,110
As at 1 July 2021 4 99 1,380 1,483
---------------------------------------- ---------- ----------- -------- ---------
Changes in equity for 2022
Other comprehensive income for the year
Revaluation of FVTOCI investments (6) - - (6)
Share options granted during the year - 17 - 17
Warrants issued during the year - - 70 70
Total Other comprehensive expenses (6) 17 70 81
As at 30 June 2022 (2) 116 1,450 1,564
---------------------------------------- ---------- ----------- -------- ---------
See Note 16 for a description of each reserve included above.
Company Statement of Cash Flows
for the year ended 30 June 2022
Year to Year to
30 June 30 June
2022 2021
GBP'000 GBP'000
------------------------------------------------------- -------- --------
Cash flows from operating activities
Loss before taxation (1,848) (1,366)
Impairment of Joint venture projects 416 -
Impairment of financial assets FVTPL 72 -
Impairment of loans to and investments in subsidiaries 101 -
Finance costs 154 65
Share-based payments 109 -
Equity settled transactions 11 -
(Increase)/Decrease in receivables (219) 13
Increase in payables 302 377
Net cash outflow from operations (902) (911)
------------------------------------------------------- -------- --------
Cash flows from investing activities
Payments for investments in and loans to associates
and joint ventures (164) (183)
Purchase of financial assets carried at amortised
cost - (355)
Investments and loans to subsidiaries (389) -
------------------------------------------------------- -------- --------
Net cash outflows from investing activities (553) (538)
------------------------------------------------------- -------- --------
Cash inflows from financing activities
Proceeds from issue of shares, net of issue costs 403 1,382
Interest paid (Note 21) - -
Proceeds of new borrowings (Note 21) 950 65
Repayments of borrowings (Note 21) (265) -
------------------------------------------------------- -------- --------
Net cash inflow from financing activities 1,088 1,447
------------------------------------------------------- -------- --------
Decrease in cash and cash equivalents (367) (2)
Cash and cash equivalents at the beginning of period 387 389
------------------------------------------------------- -------- --------
Cash and cash equivalents at end of period 20 387
------------------------------------------------------- -------- --------
Major non-cash transactions are disclosed in Note 21 .
The accompanying notes and accounting policies form an integral part of these Financial Statements.
Notes to Financial Statements
1. Principal Accounting Policies
1.1 Authorisation of Financial Statements and Statement of Compliance with IFRS
The Group Financial Statements of Corcel Plc (the "Company", "Corcel" or the "Parent Company"), for the year ended 30 June 2022, were authorised for issue by the Board on 25 November 2022 and signed on the Board's behalf by James Parsons. Corcel Plc is a public limited company, incorporated and domiciled in England and Wales. The Company's ordinary shares are traded on AIM. The principal activity of the Company is the management of a portfolio of battery metals exploration and development projects in Papua New Guinea and Canada, coupled with a Flexible Grid Solutions energy storage business in the UK. The registered address of the Company is Salisbury House, Suite 425, London Wall, London EC2M 5PS.
1.2 Basis of Preparation
The Financial Statements have been prepared in accordance with UK adopted international accounting standards ('IAS') in conformity with the requirements of the Companies Act 2006. They are presented in thousand Pounds Sterling (GBP'000), unless stated otherwise.
The principal accounting policies adopted are set out below.
Going Concern
It is the prime responsibility of the Board to ensure the Company and the Group remains a going concern. At 30 June 2022, the Group had cash and cash equivalents of GBP0.025 million and GBP1.4 million of borrowings and, as at the date of signing these Financial Statements the, cash balance was GBP0.052 million. As at 24 November 2022, current borrowings of GBP683k of principal are due during the first half of 2023, with an additional GBP0.506 million due 31 March 2023. The Directors anticipate having to raise additional funding over the course of the financial year.
Having considered the prepared cashflow forecasts and the Group budgets, which includes the possibility of Directors reducing or foregoing their salaries if required, the progress in activities post year-end, including an anticipated fundraise, the Directors consider that they will have access to adequate resources in the 12 months from the date of the signing of these Financial Statements. As a result, they consider it appropriate to continue to adopt the going concern basis in the preparation of the Financial Statements.
Should the Group be unable to continue trading as a going concern, adjustments would have to be made to reduce the value of the assets to their recoverable amounts, to provide for further liabilities, which might arise, and to classify non-current assets as current. The Financial Statements have been prepared on the going concern basis and do not include the adjustments that would result if the Group was unable to continue as a going concern. Due to the factors described above, a material uncertainty exits, which may cast significant doubt on the Group and the Company's ability to act as a going concern. The auditors have made reference to this within their Audit Report. More details surrounding this may be found in the Audit Report .
Company Statement of Comprehensive Income
As permitted by Section 408 Companies Act 2006, the Company has not presented its own Statement of Comprehensive Income. The Company's loss for the financial year was GBP1.848 million (2021: loss of GBP1.366 million). The Company's other comprehensive loss for the financial year was GBP1.854 million (2021: loss GBP1.363 million).
New Standards, Amendments and Interpretations Not Yet Adopted
At the date of approval of these Financial Statements, the following standards and interpretations, which have not been applied in these Financial Statements were in issue but not yet effective:
-- Annual Improvements: 2018 - 2020 Cycle (effective 1 January 2023); -- Amendments to IFRS 17: Insurance Contracts (effective 1 January 2023); -- Amendments to IAS 1: Classifications of liabilities (effective 1 January 2023);
-- Amendments to IAS 8: Accounting Policies, Changes to Accounting Estimates and Errors (effective 1 January 2023);
-- Amendments to IAS 12: Income Taxes - Deferred Tax arising from a Single Transaction (effective 1 January 2023).
The effect of these new and amended Standards and Interpretations, which are in issue but not yet mandatorily effective, is not expected to be material.
Standards Adopted Early by the Group
The Group has not adopted any standards or interpretations early in either the current or the preceding financial year.
1.3 Basis of Consolidation
The consolidated Financial Statements of the Group incorporate the Financial Statements of the Company and entities controlled by the Company, its subsidiaries, made up to 30 June each year.
Subsidiaries
Subsidiaries are entities over which the Group has the power to govern the financial and operating policies so as to obtain economic benefits from their activities. Subsidiaries are consolidated from the date on which control is obtained, the acquisition date, until the date that control ceases. They are deconsolidated from the date on which control ceases.
The acquisition method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued, contingent consideration and liabilities incurred or assumed at the date of exchange. Costs, directly attributable to the acquisition, are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are initially measured at fair value at the acquisition date.
Provisional fair values are adjusted against goodwill if additional information is obtained within one year of the acquisition date about facts or circumstances existing at the acquisition date. Other changes in provisional fair values are recognised through profit or loss.
Intra-group transactions, balances and unrealised gains and losses on transactions between Group companies are eliminated on consolidation, except to the extent that intra-group losses indicate an impairment.
Goodwill is capitalised as an intangible asset with any impairment in carrying value being charged to the Consolidated Statement of Comprehensive Income. Any impairment recognised for goodwill is not reversed.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses control over a subsidiary, it:
-- derecognises the assets (including goodwill) and liabilities of the subsidiary; -- derecognises the carrying amount of any non-controlling interest; -- derecognises the cumulative translation differences recorded in equity; -- recognises the fair value of the consideration received; -- recognises the fair value of any investment retained; -- recognises any surplus or deficit in profit or loss; and
-- reclassifies the Parent's share of components previously recognised in other comprehensive income to profit or loss or retained earnings, as appropriate.
Non-Controlling Interests
Profit or loss and each component of other comprehensive income are allocated between the Parent and non-controlling interests, even if this results in the non-controlling interest having a deficit balance.
Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions. Any differences between the adjustment for the non-controlling interest and the fair value of consideration paid or received are recognised in equity.
1.4 Summary of Significant Accounting Policies
1.4.1 Investment in Associates
An associate is an entity over which the Company is in a position to exercise significant influence, but not control or joint control, through participation in the financial and operating policy decisions of the investee.
Investments in associates are recognised in the Consolidated Financial Statements, using the equity method of accounting. The Group's share of post-acquisition profits or losses is recognised in profit or loss and its share of post-acquisition movements in other comprehensive income are recognised directly in other comprehensive income. The carrying value of the investment, including goodwill, is tested for impairment when there is objective evidence of impairment. Losses in excess of the Group's interest in those associates are not recognised unless the Group has incurred obligations or made payments on behalf of the associate.
Where a Group company transacts with an associate of the Group, unrealised gains are eliminated to the extent of the Group's interest in the relevant associate. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred in which case appropriate provision is made for impairment.
Where the Company's holding in an associate is diluted, the Company recognises a gain or loss on dilution in profit and loss. This is calculated as the difference between the Company's share of proceeds received for the dilutive share issue and the value of the Company's effective disposal.
In the Company accounts investments in associates are recognised and held at cost. The carrying value of the investment is tested for impairment, when there is objective evidence of impairment. Impairment charges are included in the Company Statement of Comprehensive Income.
1.4.2 Interests in Joint Ventures
A joint venture is a joint arrangement, whereby the partners, who have joint control of the arrangement, have rights to the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of the joint arrangement, which exists only when decisions on relevant activities require the unanimous consent of the parties sharing control. The Group recognises its interest in the entity's assets and liabilities, using the equity method of accounting. Under the equity method, the interest in the joint venture is carried in the balance sheet at cost plus post-acquisition changes in the Group's share of its net assets, less distributions received and less any impairment in value of individual investments. The Group Income Statement reflects the share of the jointly controlled entity's results after tax. In the Company only financial statements, the Company's interests in Joint Ventures is recognised at historic cost less any impairment charged to date.
Any goodwill arising on the acquisition of a jointly controlled entity is included in the carrying amount of the jointly controlled entity and is not amortised. To the extent that the net fair value of the entity's identifiable assets, liabilities and contingent liabilities is greater than the cost of the investment, a gain is recognised and added to the Group's share of the entity's profit or loss in the period in which the investment is acquired.
Financial Statements of the jointly controlled entity will be prepared for the same reporting period as the Group. Where necessary, adjustments are made to bring the accounting policies used into line with those of the Group and to reflect impairment losses where appropriate. Adjustments are also made in the Group's Financial Statements to eliminate the Group's share of unrealised gains and losses on transactions between the Group and its jointly controlled entity. The Group ceases to use the equity method on the date from which it no longer has joint control over, or significant influence in, the joint venture.
At 30 June 2022, the Group had following contractual arrangements, which were classified as investments in associates and joint ventures:
-- Oro Nickel Ltd (41% interest), a contractual arrangement with Battery Metals Pty Ltd, which represents a joint venture established through an interest in a jointly controlled entity, in order to develop and exploit the Mambare nickel project;
-- DVY196 Holdings Corp ("DVY"), 50% interest in a North American vanadium and nickel project;
-- ARL 021 Limited, a 40% interest in the Tring Road 50MW gas peaker project.
1.4.3 Taxation
Corporation tax payable is provided on taxable profits at the prevailing UK tax rate. The tax expense represents the sum of the current tax expense and deferred tax expense.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from accounting profit as reported in the Statement of Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is measured using tax rates that have been enacted or substantively enacted by the reporting date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets and liabilities in the Financial Statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the balance sheet liability method. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition, other than in a business combination, of other assets and liabilities in a transaction, which affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled based upon tax rates that have been enacted or substantively enacted by the reporting date.
Deferred tax is charged or credited in profit or loss, except when it relates to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity, or items charged or credited directly to other comprehensive income, in which case the deferred tax is also recognised in other comprehensive income.
Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax relates to income tax levied by the same tax authorities on either:
-- the same taxable entity; or
-- different taxable entities, which intend to settle current tax assets and liabilities on a net basis or to realise and settle them simultaneously in each future period when the significant deferred tax assets and liabilities are expected to be realised or settled.
1.4.4 Property, Plant and Equipment
Property, plant and equipment acquired and identified as having a useful life that exceeds one year is capitalised at cost and is depreciated on a straight-line basis at annual rates that will reduce book values to estimated residual values over their anticipated useful lives as follows:
Office furniture, fixtures and fittings - 33% per annum
Leasehold improvements - 5% per annum
1.4.5 Foreign Currencies
Both the functional and presentational currency of Corcel Plc is Sterling (GBP). Each Group entity determines its own functional currency and items included in the Financial Statements of each entity are measured using that functional currency.
The functional currencies of the foreign subsidiaries and joint ventures are the Australian Dollar ("AUD"), the Papua New Guinea Kina ("PNG") and the US Dollar ("USD").
Transactions in currencies other than the functional currency of the relevant entity are initially recorded at the exchange rate prevailing on the dates of the transaction. At each reporting date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the exchange rate prevailing at the reporting date. Non-monetary assets and liabilities carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date, when the fair value was determined. Gains and losses arising on retranslation are included in profit or loss for the period, except for exchange differences on non-monetary assets and liabilities, which are recognised directly in other comprehensive income, when the changes in fair value are recognised directly in other comprehensive income.
On consolidation, the assets and liabilities of the Group's overseas operations are translated into the Group's presentational currency at exchange rates prevailing at the reporting date. Income and expense items are translated at the average exchange rates for the period unless exchange rates have fluctuated significantly during the year, in which case, the exchange rate at the date of the transaction is used. All exchange differences arising, if any, are recognised as other comprehensive income and are transferred to the Group's foreign currency translation reserve.
Exploration Assets
Exploration assets comprise exploration and evaluation costs, incurred on prospects at an exploratory stage. These costs include the cost of acquisition, exploration, determination of recoverable reserves, economic feasibility studies and all technical and administrative overheads directly associated with those projects. These costs are carried forward in the Statement of Financial Position as non-current intangible assets less provision for identified impairments. Costs associated with an exploration activity will only be capitalised if, in management's opinion, the results from that activity led to a material increase in the market value of the exploration asset, which is determined by management to be following the economic feasibility stage.
The Group adopts the "area of interest" method of accounting whereby all exploration and development costs, relating to an area of interest, are capitalised and carried forward until either abandoned or an indicator of impairment is determined. In the event that an area of interest is abandoned, or if, following determination of an impairment indicator being present, the Directors consider the expenditure to be of no value, accumulated exploration costs are written off in the financial year in which the decision is made. All expenditure incurred prior to approval of an application is expensed, with the exception of refundable rent, which is raised as a receivable.
Upon disposal, the difference between the fair value of consideration receivable for exploration assets and the relevant cost within non-current assets is recognised in the Income Statement.
1.4.6 Impairment of Non-Financial Assets
The carrying values of assets, other than those to which IAS 36 "Impairment of Assets" does not apply, are reviewed at the end of each reporting period for impairment, when there is an indication that the assets might be impaired. Impairment is measured by comparing the carrying values of the assets with their recoverable amounts. The recoverable amount of the assets is the higher of the assets' fair value less costs to sell and their value-in-use, which is measured by reference to discounted future cash flow.
An impairment loss is recognised immediately in the Consolidated Statement of Comprehensive Income.
When there is a change in the estimates, used to determine the recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as a reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the asset that would have been determined (net of amortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in profit or loss immediately, unless the asset is carried at its revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.4.7 Share-Based Payments
Share Options
The Group operates equity-settled share-based payment arrangements, whereby the fair value of services provided is determined indirectly by reference to the fair value of the instrument granted.
The fair value of options granted to Directors and others, in respect of services provided, is recognised as an expense in the Income Statement with a corresponding increase in equity reserves - the share-based payment reserve until the award has been settled and then make a transfer to share capital. On exercise or lapse of share options, the proportion of the share-based payment reserve, relevant to those options is retained in the share-based payment reserve. On exercise, equity is also increased by the amount of the proceeds received.
The fair value is measured at grant date and charged over the vesting period during which the option becomes unconditional.
The fair value of options is calculated using the Black-Scholes model, taking into account the terms and conditions upon which the options were granted. The exercise price is fixed at the date of grant.
Non-market conditions are performance conditions that are not related to the market price of the entity's equity instruments. They are not considered, when estimating the fair value of a share-based payment. Where the vesting period is linked to a non-market performance condition, the Group recognises the goods and services it has acquired during the vesting period, based on the best available estimate of the number of equity instruments expected to vest. The estimate is reconsidered at each reporting date, based on factors such as a shortened vesting period, and the cumulative expense is "trued up" for both the change in the number expected to vest and any change in the expected vesting period.
Market conditions are performance conditions that relate to the market price of the entity's equity instruments. These conditions are included in the estimate of the fair value of a share-based payment. They are not taken into account for the purpose of estimating the number of equity instruments that will vest. Where the vesting period is linked to a market performance condition, the Group estimates the expected vesting period. If the actual vesting period is shorter than estimated, the charge is be accelerated in the period that the entity delivers the cash or equity instruments to the counterparty. When the vesting period is longer, the expense is recognised over the originally estimated vesting period.
For other equity instruments, granted during the year (i.e. other than share options), fair value is measured on the basis of an observable market price.
Share Incentive Plan
Where the shares are granted to the employees under Share Incentive Plan, the fair value of services provided is determined indirectly by reference to the fair value of the free, partnership and matching shares granted on the grant date. Fair value of shares is measured on the basis of an observable market price, i.e. share price as at grant date and is recognised as an expense in the Income Statement on the date of the grant. For the partnership shares, the charge is calculated as the excess of the mid-market price on the date of grant over the employee's contribution.
1.4.8 Pension
The Group operates a defined contribution pension plan, which requires contributions to be made to a separately administered fund. Contributions to the defined contribution scheme are charged to the profit and loss account as they become payable.
1.4.9 Finance Income/Expense
Finance income and expense is recognised as interest accrues, using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period, using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts/re-payments through the expected life of the financial asset or liability to the net carrying amount of the financial asset or liability.
1.4.10 Financial Instruments
The Group classifies its financial assets into one of the categories discussed below, depending on the purpose for which the asset was acquired. Other than financial assets in a qualifying hedging relationship, the Group's accounting policy for each category is as follows:
Fair Value through Profit or Loss (FVTPL)
This category comprises in-the-money derivatives and out-of-money derivatives, where the time value offsets the negative intrinsic value. They are carried in the Statement of Financial Position at fair value with changes in fair value recognised in the Consolidated Statement of Comprehensive Income in the finance income or expense line. Other than derivative financial instruments, which are not designated as hedging instruments, the Group does not have any assets held for trading nor does it voluntarily classify any financial assets as being at fair value through profit or loss.
Amortised Cost
These assets comprise the types of financial assets, where the objective is to hold these assets in order to collect contractual cash flows and the contractual cash flows are solely payments of principal and interest. They are initially recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue and are subsequently carried at amortised cost, using the effective interest rate method, less provision for impairment. Impairment provisions for current and non-current trade receivables are recognised, based on the simplified approach within IFRS 9, using a provision matrix in the determination of the lifetime expected credit losses. During this process, the probability of the non-payment of the trade receivables is assessed. This probability is then multiplied by the amount of the expected loss arising from default to determine the lifetime expected credit loss for the trade receivables. For the receivables, which are reported net, such provisions are recorded in a separate provision account, with the loss being recognised in the consolidated statement of comprehensive income. On confirmation that the receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.
Impairment provisions, for receivables from related parties and loans to related parties, are recognised based on a forward-looking expected credit loss model. The methodology used to determine the amount of the provision is based on whether there has been a significant increase in credit risk since initial recognition of the financial asset. For those, where the credit risk has not increased significantly since initial recognition of the financial asset, twelve month expected credit losses along with gross interest income are recognised. For those for which credit risk has increased significantly, lifetime expected credit losses along with the gross interest income are recognised. For those that are determined to be credit impaired, lifetime expected credit losses along with interest income on a net basis are recognised.
The Group's financial assets measured at amortised cost comprise trade and other receivables and cash and cash equivalents in the Consolidated Statement of Financial Position. Cash and cash equivalents include cash in hand, deposits held at call with banks, other short term highly liquid investments with original maturities of three months or less, and - for the purpose of the statement of cash flows - bank overdrafts. Bank overdrafts are shown within loans and borrowings in current liabilities on the Consolidated Statement of Financial Position.
Fair Value through Other Comprehensive Income (FVTOCI)
The Group held a number of strategic investments in listed and unlisted entities, which are not accounted for as subsidiaries, associates or jointly controlled entities. For those investments, the Group has made an irrevocable election to classify the investments at fair value through other comprehensive income rather than through profit or loss as the Group considers this measurement to be the most representative of the business model for these assets. They are carried at fair value with changes in fair value recognised in other comprehensive income and accumulated in the fair value through other comprehensive income reserve. Upon disposal any balance within fair value through other comprehensive income reserve is reclassified directly to retained earnings and is not reclassified to profit or loss.
Dividends are recognised in profit or loss, unless the dividend clearly represents a recovery of part of the cost of the investment, in which case the full or partial amount of the dividend is recorded against the associated investments carrying amount.
Purchases and sales of financial assets, measured at fair value through other comprehensive income, are recognised on settlement date with any change in fair value between trade date and settlement date being recognised in the fair value through other comprehensive income reserve.
Financial Liabilities
The Group classifies its financial liabilities into one of two categories, depending on the purpose for which the liability was acquired:
Other Financial Liabilities
Other financial liabilities include:
-- Borrowings, which are initially recognised at fair value net of any transaction costs, directly attributable to the issue of the instrument. Such interest-bearing liabilities are subsequently measured at amortised cost, using the effective interest rate method, which ensures that any interest expense over the period to repayment is at a constant rate on the balance of the liability carried in the Consolidated Statement of Financial Position. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption as well as any interest or coupon payable, while the liability is outstanding.
-- Liability components of convertible loan notes are measured as described further below.
-- Trade payables and other short-term monetary liabilities, which are initially recognised at fair value and subsequently carried at amortised cost, using the effective interest method.
Fair Value Measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
-- In the principal market for the asset or liability; or
-- In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Group.
The fair value of an asset or a liability is measured, using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and, for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities, for which fair value is measured or disclosed in the Financial Statements, are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
-- Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities;
-- Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable; and
-- Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
For assets and liabilities that are recognised in the Financial Statements on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
More information is disclosed in Note 20.
1.4.11 Investments in the Company Accounts
Investments in subsidiary companies are classified as non-current assets and included in the Statement of Financial Position of the Company at cost at the date of acquisition less any identified impairments.
For acquisitions of subsidiaries or associates achieved in stages, the Company re-measures its previously held equity interests in the acquiree at its acquisition-date fair value and recognises the resulting gain or loss, if any, in profit or loss. Any gains or losses, previously recognised in other comprehensive income, are transferred to profit and loss.
Investments in associates and joint ventures are classified as non-current assets and included in the Statement of Financial Position of the Company at cost at the date of acquisition less any identified impairment.
1.4.12 Share Capital
Financial instruments, issued by the Group, are classified as equity only to the extent that they do not meet the definition of a financial liability or financial asset. The Group's ordinary shares are classified as equity instruments.
1.4.13 Convertible Debt
The proceeds, received on issue of the Group's convertible debt, are allocated into their liability and equity components. The amount, initially attributed to the debt component, equals the discounted cash flows, using a market rate of interest that would be payable on a similar debt instrument that does not include an option to convert. Subsequently, the debt component is accounted for as a financial liability, measured at amortised cost until extinguished on conversion or maturity of the bond. The remainder of the proceeds is allocated to the conversion option and is recognised in the "Convertible debt option reserve" within shareholders' equity, net of income tax effects.
1.4.14 Warrants
Derivative contracts, that only result in the delivery of a fixed amount of cash or other financial assets for a fixed number of an entity's own equity instruments, are classified as equity instruments. Warrants, relating to equity finance and issued together with ordinary shares placement, are valued by residual method and treated as directly attributable transaction costs and recorded as a reduction of share premium account, based on the fair value of the warrants. Warrants, classified as equity instruments, are not subsequently re-measured (i.e., subsequent changes in fair value are not recognised). On expiry or lapse of such instruments, the fair value of the instruments in question is retained in the warrant reserve and is not transferred to retained earnings.
1.4.15 Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting, provided to the chief operating decision-maker as required by IFRS 8 "Operating Segments". The chief operating decision-maker, responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors. The accounting policies of the reportable segments are consistent with the accounting policies of the Group as a whole. Segment profit/(loss) represents the profit/(loss) earned by each segment without allocation of foreign exchange gains or losses, investment income, interest payable and tax. This is the measure of profit that is reported to the Board of Directors for the purpose of resource allocation and the assessment of segment performance. When assessing segment performance and considering the allocation of resources, the Board of Directors review information about segment non-current assets. For this purpose, all non-current assets are allocated to reportable segments.
1.4.16 Leases
All leases are accounted for by recognising a right-of-use asset and a lease liability except for:
-- Leases of low value assets; and -- Leases with a duration of 12 months or less.
IFRS 16 was adopted 1 June 2019 without restatement of comparative figures.
On initial recognition, the carrying value of the lease liability also includes:
-- amounts expected to be payable under any residual value guarantee;
-- the exercise price of any purchase option granted in favour of the Group if it is reasonably certain to assess that option;
-- any penalties payable for terminating the lease if the term of the lease has been estimated on the basis of termination option being exercised.
Lease liabilities are subsequently measured at the present value of the contractual payments due to the lessor over the lease term.
Right of use assets are initially measured at the amount of the lease liability, reduced for any lease incentives received and increased for:
-- lease payments made at or before commencement of the lease; -- initial direct costs incurred; and
-- the amount of any provision recognised, where the Group is contractually required to dismantle, remove or restore the leased asset.
1.4.17 Asset Acquisitions
Acquisitions of mineral exploration licences through the acquisition of non-operational corporate structures that do not represent a business, and therefore do not meet the definition of a business combination, are accounted for as the acquisition of an asset.
The consideration for the asset is allocated to the assets based on their relative fair values at the date of acquisition.
Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated.
1.5 Significant Accounting Judgements, Estimates and Assumptions
The preparation of the Group's Consolidated Financial Statements, requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities at the end of the reporting period. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods.
Significant Judgements and Accounting Estimates
In the process of applying the Group's accounting policies, management has made the following judgements and estimates, which have the most significant effect on the amounts recognised in the Consolidated Financial Statements:
Impairment of Investments in Associates and Joint Ventures
The carrying amount of investments in joint ventures is tested for impairment annually and this process is considered to be key judgement along with determining whenever events or changes in circumstances indicate that the carrying amounts for those assets may not be recoverable.
The continued progress at the Mambare nickel/cobalt project during the year, when considered alongside the continued strength in nickel prices, have encouraged the Board to continue to hold the value of its stake in the Mambare joint venture at the previous valuation of GBP1.65 million alongside a GBP1.5 million receivable. The Company believes that the carrying values reflect the sizeable JORC resource and work done to date as well as the potential to progress the project to a mining license and Direct Shipping Ore "DSO" production in 2023 and beyond. The Company has assessed the viability of the project, given current and expected nickel prices and the anticipated cost of a DSO operation, and believes the project can be successfully taken into production in the mid-term with a mining lease application already at a very advanced stage with the PNG mining authorities. The Board further believes that the likelihood of recovery of the receivable has remained firm over the past 12-24 months due to the progress made on the JV, and that full repayment of this figure is likely through either a disposal and trade sale prior to production or through dividends once the project begins shipping ore if not beforehand.
The Company, following a desktop study that broadened the scope of the project to include nickel as well as vanadium, believes that continuing to hold the Dempster asset at cost is a prudent decision pending further developments at the project in Canada.
On 18 October 2021, the Company completed the acquisition of Australian registered Niugini Nickel Pty Ltd ("Niugini Nickel"), which owns 100% of the Wowo Gap nickel-cobalt project in Papua New Guinea. Consideration for the acquisition was the release of all liabilities and obligations in connection with its AUD 4.7m senior debt position held in the vendor, Resource Mining Corporation Limited ("RMI"), which the Company had acquired for GBP987,000. Additional legal costs associated with the acquisition of Niugini Nickel bring the total cost of acquisition to GBP1.014m, which forms the fair value of acquisition as detailed in note 22.
During the prior year, The Company acquired a 40% interest in ARL 021, which gave it partial ownership of the Tring Road gas peaker plant. During the year, the Company has carried out funding and sale efforts, which have resulted in the Company impairing this investment by 100% of its carrying value. The Company has further decided to write-off its existing investment in Weirs Drove Development, owner of the Burwell Energy Storage project, as the project is currently working through potential delays relating to grid congestion and potential network upgrades in the area. While the Burwell project may successfully progress to financial close, there remains uncertainty around the timeframe in which this is likely to occur.
The Company has also made judgements in respect of the success of licence renewals on the core battery metal projects.
Impairment of Investments in and loans to Subsidiaries
The carrying amount of investments in and loans made to subsidiaries is tested for impairment annually and this process is considered to be key judgement along with determining whenever events or changes in circumstances indicate that the carrying amounts for those assets may not be recoverable.
During the year, loans to Wiers Drove Developments totalling GBP28,471 and to Flexible Grid Solutions totalling GBP71,526 have been impaired pending progress on the Burwell battery storage project and determination of the recoverability of these loan balances. Amounts receivable from Flexible Grid Solutions totalling GBP50,000 remains unimpaired as this amount is backed by funds deposited against the future grid connection for the Burwell battery storage project which are refundable in the event that the project is cancelled.
Share-Based Payment Transactions
The Group measures the cost of equity-settled transactions with employees and the issuance of warrants to investors by reference to the fair value of the equity instruments at the date at which they are granted. The fair value of share options and warrants is determined using the Black-Scholes model and the estimates used within this model are disclosed in Note 18 .
Valuation of a receivable from Oro Nickel JV
The Directors believe that the receivable from the Oro Nickel Joint Venture will be fully recoverable in light of the project's ongoing progress towards a mining lease, supporting a shipping ore operation at the site. Progress has been made on the mining lease application during the course of the year end. While the existing exploration licenses remain under renewal at the year, the Company and the joint venture partners believe there remains a high likelihood of renewal, given ongoing dialogue with the PNG authorities, and would expect to have these renewed independently of any outcome of the mining lease application.
2. Segmental Analysis
Once the Group's main focus of operations becomes production of battery metal mineral resources or flexible production and storage of energy, the nature of management information, examined by the Board, will alter to reflect the need to monitor revenues, margins, overheads and trade balances as well as cash.
IFRS 8 requires the reporting of information about the revenues derived from the various areas of activity and the countries in which revenue is earned regardless of whether this information is used in by management in making operating decisions. Management determined that the most useful presentation of revenues and expenses came from an analysis by operational type as opposed to geographic representation due to the similar nature of the revenues and expenses when grouped in these categories.
Flexible Grid Corporate
Solutions and
Battery Metals (UK) unallocated Total
Year to 30 June 2022 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------- -------------- ------------- ------------ --------
Revenue - - - -
Management services - - 23 23
Project expenses (82) (9) - (91)
Exploration expenses - - - -
Administrative expenses (92) (66) (1,060) (1,218)
Currency (loss)/gain 1 - - 1
Share of profits in joint ventures (3) - - (3)
Impairment of receivables - - (61) (61)
Impairment of property, plant
and equipment - - (67) (67)
Impairment of Joint venture projects - (488) - (488)
Finance cost - net - - (224) (224)
------------------------------------- -------------- ------------- ------------ --------
Net loss before tax from continuing
operations (176) (563) (1,389) (2,128)
------------------------------------- -------------- ------------- ------------ --------
Flexible Grid Corporate
Solutions and
Battery Metals (UK) unallocated Total
Year to 30 June 2021 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------------- -------------- ------------- ------------ --------
Revenue - - - -
Project expenses - (121) - (121)
Administrative expenses - - (1,014) (1,014)
Impairment of goodwill - (25) - (25)
Share of profits in joint ventures (6) - - (6)
Loss on sale of financial instruments
FVTPL - - (5) (5)
Other income - - 9 9
-------------------------------------- -------------- ------------- ------------ --------
Finance cost - net - - (65) (65)
-------------------------------------- -------------- ------------- ------------ --------
Net loss before tax from continuing
operations (6) (146) (1,075) (1,227)
-------------------------------------- -------------- ------------- ------------ --------
Information by Geographical Area
Presented below is certain information by the geographical area of the Group's activities. Investment sales revenue and exploration property sales revenue are allocated to the location of the asset sold.
Papua
UK Australia New Guinea USA Canada Total
Year to 30 June 2022 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ ---------- --------- ----------- --------- -------- ------------------
Revenue 23 - - - - 23
Total segment revenue and
other gains 23 - - - - 23
------------------------------ ---------- --------- ----------- --------- -------- ------------------
Non-current assets
Investments in associates
and joint ventures - - 1,650 - 338 1,988
Goodwill - - - - - -
Property, plant and equipment 1 - 51 - - 52
Exploration & evaluation
assets - - 1,026 - - 1,026
Receivable from a joint
venture - - 1,502 - - 1,502
Purchased debt - - - - - -
FVTOCI financial instruments 1 - - - - 1
Total segment non-current
assets 2 - 4,229 - 338 4,569
------------------------------ ---------- --------- ----------- --------- -------- ------------------
Papua
UK Australia New Guinea USA Canada Total
Year to 30 June 2021 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ ----------- ----------- ----------- ----------- ----------- ------------------
Revenue - - - - - -
Total segment revenue and
other gains - - - - - -
------------------------------ ----------- ----------- ----------- ----------- ----------- ------------------
Non-current assets
Investments in associates
and joint ventures 472 - 1,654 - 326 2,452
Goodwill - - - - - -
Property, plant and equipment 62 - - - - 62
Receivable from a joint
venture 12 - 1,349 - - 1,351
Purchased debt - - 987 - - 987
FVTOCI financial instruments - - - - 7 7
Total segment non-current
assets 546 - 3,990 - 333 4,869
------------------------------ ----------- ----------- ----------- ----------- ----------- ------------------
3. Loss on Ordinary Activities Before Taxation
2022 2021
Group GBP'000 GBP'000
------------------------------------------------------ -------- --------
Loss on ordinary activities before taxation is stated
after charging:
Auditor's remuneration:
- fees payable to the Company's auditor for the audit
of consolidated and Company Financial Statements 33 30
Directors' emoluments (Note 8 ) 496 449
------------------------------------------------------ -------- --------
4. Administrative Expenses
Group Group Company Company
2022 2021 2022 2021
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------------- -------- -------- -------- --------
Staff costs
Payroll 514 453 514 465
Pension 20 31 20 19
Share-based payments 39 - 39 -
Consultants - - - -
Staff Welfare 8 2 8 1
Employers NI 53 50 53 50
Professional services
Accounting 94 67 70 65
Legal 46 33 4 33
Business development 3 25 3 2
Marketing & Investor relations 25 108 25 100
Funding costs 21 - 21 -
Other 111 - 25 -
Regulatory compliance 116 127 115 127
Travel 14 7 13 4
Office and Admin
General 35 21 32 22
IT costs 12 46 12 45
Rent 14 16 14 16
Insurance 93 28 91 28
-------------------------------------- -------- -------- -------- --------
Total administrative expenses 1,218 1,014 1,059 978
-------------------------------------- -------- -------- -------- --------
5. Finance Costs, Net
2022 2021
Group GBP'000 GBP'000
--------------------------------- -------- --------
Interest expense (154) (65)
Share based payments - investors (70) -
(224) (65)
--------------------------------- -------- --------
6. Taxation
2022 2021
GBP'000 GBP'000
------------------------------------------------------- -------- --------
Current period transaction of the Group
UK corporation tax at 19.00% (2021: 19.00%) on profits
for the period - -
Deferred tax
Origination and reversal of temporary differences - -
Deferred tax assets derecognised - -
------------------------------------------------------- -------- --------
Tax (credit) - -
------------------------------------------------------- -------- --------
Factors affecting the tax charge for the year
Loss on ordinary activities before taxation (2,128) (1,227)
------------------------------------------------------- -------- --------
Loss on ordinary activities at the average UK standard
rate of 19% (2021: 19.00%) (404) (233)
Effect of non-deductible expense 22 37
Effect of tax benefit of losses carried forward 382 196
Tax losses brought forward - -
Current tax (credit) - -
------------------------------------------------------- -------- --------
Deferred tax amounting to GBPnil (2021: GBPnil), relating to the Group's investments was recognised in the Statement of Comprehensive Income. No deferred tax charge has been recognised due to uncertainty as to the timing of future profitability of the Group. Unutilised trading losses are estimated at circa GBP3,663 thousand (2021: GBP3,281) and capital losses estimated circa GBPnil (2021: GBPnil).
7. Staff Costs
The aggregate employment costs of staff for the Group (including Directors) for the year was:
2022 2021
GBP'000 GBP'000
----------------------------------------- -------- --------
Wages and salaries 514 453
Pension 20 31
Social security costs, net of allowances 53 50
Medical costs 8 2
Employee share-based payment charge 39 -
----------------------------------------- -------- --------
Total staff costs 634 536
----------------------------------------- -------- --------
The average number of Group employees (including Directors) during the year was:
2022 2021
Number Number
--------------- -------- -------
Directors 4 4
Administration 1 1
5 5
------------------------ -------
During the year, for all Directors and employees, who have been employed for more than three months, the Company contributed to a defined contributions pension scheme as described under Directors' remuneration in the Directors' Report and a Share Incentive Plan ("SIP") as described under Management incentives in the Directors' Report.
All emoluments presented for current and comparative years, except for pension, are short-term in nature.
8. Directors' Emoluments
Directors' Consultancy Share Incentive Pension Short term
fees fees Bonus Plan contributions benefits Total
2022 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------ ---------- ----------- --------- --------------- --------------- ---------- --------
Executive Directors
J Parsons* 152 - 30 - 10 - 192
S Kaintz 175 - 35 7 16 3 236
Non-executive Directors
E Ainsworth 40 - - - - - 40
H Bellingham 28 - - - - - 28
395 - 65 7 26 3 496
------------------------ ---------- ----------- --------- --------------- --------------- ---------- --------
Short
Directors' Consultancy Share Incentive Pension term
fees fees Bonus Plan contributions benefits Total
2021 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------ ---------- ----------- --------- --------------- --------------- --------- --------
Executive Directors
J Parsons* 146 - 14 - 12 - 172
S Kaintz 175 - 15 7 15 2 214
------------------------ ---------- ----------- --------- --------------- --------------- --------- --------
Non-executive Directors
N Burton 23 - - - - - 23
E Ainsworth 30 10 - - - - 40
374 10 29 7 27 2 449
------------------------ ---------- ----------- --------- --------------- --------------- --------- --------
* Includes 8% pension contribution paid in cash as a part of gross salary.
The number of Directors, who exercised share options in year, was nil (2021: nil).
During the year, the Company contributed to a Share Incentive Plan, more fully described in the Directors' Report where shares were issued to each employee, including Directors, making a total of 896,549 (2021: 1,116,994) partnership and matching shares. Those shares were issued in relation to services provided by those employees during the reporting year.
The Company also operates a contributory pension scheme, more fully described in the Directors' Report in the section Directors' Remuneration.
During the year, the following options were granted to the Directors of the Company with a total FV charge to the profit for the year of GBP15,829. No options were granted in the prior year.
Exercise price
2022 Number of Options (pence) Grant date Expiry date
------------------------ ----------------- ---------------- ----------- ----------------
Executive Directors
28 February
J Parsons 6,547,197 1.7p 2022 27 February 2027
28 February
S Kaintz 6,547,197 1.7p 2022 27 February 2027
Non-executive Directors
28 February
E Ainsworth 2,805,942 1.7p 2022 27 February 2027
28 February
H Bellingham 2,805,942 1.7p 2022 27 February 2027
9. Earnings per Share
The basic earnings/(loss) per share is derived by dividing the loss for the year attributable to ordinary shareholders of the Parent by the weighted average number of shares in issue. Diluted earnings/(loss) per share is derived by dividing the loss for the year attributable to ordinary shareholders of the Parent by the weighted average number of shares in issue plus the weighted average number of ordinary shares that would be issued on conversion of all dilutive potential ordinary shares into ordinary shares.
2022 2021
Loss attributable to equity holders
of the Parent Company, GBP'000 (2,128) (1,227)
Weighted average number of ordinary
shares of GBP0.0001 in issue, used for
basic EPS, 401,737,832 279,406,266
------------- -----------------
Earnings per share - basic, pence (0.5) (0.4)
------------- -----------------
Earnings per share - fully diluted,
pence (0.5) (0.4)
------------- -----------------
At 30 June 2022 and at 30 June 2021, the effect of all the instruments
in issue is anti-dilutive as it would lead to a further reduction
of loss per share, therefore, they were not included into the diluted
loss per share calculation.
Options and warrants with conditions not met at the end of the period,
that could potentially dilute basic EPS in the future, but were not
included in the calculation of diluted EPS for the periods presented:
2022 2021
(a) Share options granted to employees
- total, of them 26,783,412 6,212,534
* Vested at the end of reporting period 96,000 122,900
* Not vested at the end of the reporting period 26,687,412 6,089,634
(b) Number of warrants in issue 171,999,329 170,399,328
------------ -----------------
Total number of contingently issuable
shares that could potentially dilute basic
earnings per share in future and anti-dilutive
potential ordinary shares that were not
included into the fully diluted EPS calculation 198,782,741 182,824,396
------------ -----------------
There were no ordinary share transactions after 30 June 2022, that that could have changed the EPS calculations significantly if those transactions had occurred before the end of the reporting period.
10. Investments in Subsidiaries and Goodwill
Investments Investments Goodwill Goodwill
in subsidiaries in subsidiaries 2022 2021
2022 2021 GBP'000 GBP'000
Company GBP GBP
----------------------------------- ---------------- ---------------- -------- --------
Cost
At 1 July 2020 and 1 July 2021 - - 131 131
Additions (Note 22) 1,014 - - -
----------------------------------- ---------------- ---------------- -------- --------
At 30 June 2022 and 30 June 2021 1,014 - 131 131
----------------------------------- ---------------- ---------------- -------- --------
Impairment
At 1 30 June 2022 and 30 June 2021 - - (131) (131)
----------------------------------- ---------------- ---------------- -------- --------
Net book amount at 30 June 2022 1,014 - - -
----------------------------------- ---------------- ---------------- -------- --------
Net book amount at 30 June 2021 - - - -
----------------------------------- ---------------- ---------------- -------- --------
The Parent Company of the Group holds more than 50% of the share capital of the following companies, the results of which are consolidated:
Proportion
Country of held by Nature of
Company Name registration Class Group business
------------------------------ ------------- -------- ---------- -------------------
Corcel Australasia Pty
Limited Australia Ordinary 100% Mineral exploration
Niugini Nickel Pty Ltd Australia Ordinary 100% Mineral exploration
Flexible Grid Solutions
Limited (former ESTEQ
Limited) UK Ordinary 100% Holding company
Flexible Grid One Limited
(former Allied Energy Energy storage
Services Ltd (indirectly and trading and
owned through ESTEQ Limited)) UK Ordinary 100% grid backup
Weirs Drove Development
Limited UK Ordinary 100% Energy storage
------------------------------ ------------- -------- ---------- -------------------
Corcel Australasia Pty Limited and Niugini Nickel Pty Ltd registered office is c/o Paragon Consultants PTY Ltd, PO Box 903, Claremont WA, 6910, Australia.
Flexible Grid Solutions Limited registered office is Salisbury House, London Wall, London EC2M 5PS, United Kingdom.
Flexible Grid One Limited registered office is Salisbury House, London Wall, London EC2M 5PS, United Kingdom.
Weirs Drove Development Limited registered office is 20-22 Wenlock Road, London N1 7GU, United Kingdom.
Flexible Grid One Limited (FGO) (former Allied Energy Services Ltd (indirectly owned through Flexible Grid Solutions Limited))
On 10 November 2017, Corcel formed a 100% owned subsidiary, Flexible Grid Solutions Limited, to act as the vehicle for development of opportunities in the battery and energy storage technology sector across the UK. On 15 March 2018, Flexible Grid Solutions Limited committed to investing up to GBP250,000 into Flexible Grid One Limited, representing an 80% interest in that entity. Non-controlling shareholders brought with them a development pipeline, including land rights and connections for combined battery and gas and anaerobic digestion generation plants to be constructed and operated across the UK. On 3 January 2020, the Company announced the completion of a buy-out of the 20% minority shareholders in Flexible Grid One Limited through the issuance of 2,461,538 new ordinary shares in the Company. The investment in Flexible Grid One Limited was subsequently written off in the year ended 30 June 2020.
Weirs Drove Development Limited (indirectly owned through Flexible Grid Solutions Limited)
On 19 June 2020, the Company announced an investment acquiring a 50% stake in Weirs Drove Development Limited, a developer of UK based energy storage and flexible production projects. The cost of the transaction was an initial investment and directly attributable acquisitions costs, totalling GBP37,750, with the agreement to extend a further GBP100,000, following the project meeting all shovel ready criteria. At year end, these conditions had not been met and so the Company has impaired the value of the project to GBPnil, pending further developments. Goodwill in the amount of GBP25,250 was recognised in relation to this acquisition and subsequently impaired to GBPnil as at 30 June 2022.
On 1 December 2020, the Company announced the acquisition of the remaining 50% interest in Weirs Drove Development Limited, thereby becoming the 100% owner of the Burwell project for consideration of GBP90,000. This total potential consideration was broken down into GBP15,000 payable in cash and GBP75,000 payable in new Corcel ordinary shares due at financial close of the initial 50MW of capacity of the Burwell project.
11. Investments in Associates and Joint Ventures
Group Company
Carrying balance GBP'000 GBP'000
-------------------------------------- ------------------------- ----------------------
At 1 July 2020 1,947 2,067
Additions 439 439
Share of loss in joint venture (6) (6)
Impairment of investment in associate - -
At 30 June 2021 2,380 2,500
Additions 11 12
Share of loss in joint venture (3) -
Impairment of investment in associate (400) (400)
Net book amount at 30 June 2022 1,988 2,112
-------------------------------------- ------------------------- ----------------------
At 30 June 2022, the Parent Company of the Group had a significant influence by virtue other than a shareholding of over 20% or had joint control through a joint venture contractual arrangement in the following companies:
Proportion Proportion
held held
by by Status
Country Group Group at
of at 30 at 30 30 June Accounting
Company Name registration Class June 2022 June 2021 2021 year end
-------------------------------- -------------- --------- ---------- ---------- --------- ------------
Direct
Oro Nickel Ltd (Held indirectly
through
Oro Nickel Vanuatu) (Joint Papua
Venture) New Guinea Ordinary 41% 41% Active 30 June 2022
DVY196 Holdings Corp (Joint
Venture) UK Ordinary 50% 50% Active 30 Sept 2022
ARL 021 Limited (Associate) UK Ordinary 40% 40% Active 31 July 2022
-------------------------------- -------------- --------- ---------- ---------- --------- ------------
Oro Nickel Ltd registered office is c/o Sinton Spence Chartered Accountants, 2(nd) Floor, Brian Bell Plaza, Turumu Street, Boroko, National Capital District, Papua New Guinea.
DVY196 Holdings Corp registered office is 3081 3(rd) Avenue, Whitehorse, Yukon, Canada Y1A 4Z7.
ARL 021 Limited registered office is 70 Jermyn Street, London, UK SW1Y 6NY
Summarised financial information for the Company's associates and joint ventures, where available, is given below for the year as at 30 June 2022:
Revenue Loss Assets Liabilities Net Assets
Company GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- -------- -------- -------- ----------- ----------
Oro Nickel Ltd - (8) 4,467 (3,797) 670
DVY196 Holdings Corp 5 6 5 8 (3)
ARL 021 Limited - - 400 - 400
--------------------- -------- -------- -------- ----------- ----------
Oro Nickel DVY196 ARL 021 Total Group
Carrying balance GBP'000 GBP'000 GBP'000 GBP'000
----------------------- ---------- ------------------------- -------------------------- -----------
At 1 July 2021 1,654 326 400 2,380
Additions - 11 - 11
Share of loss in joint
venture (3) - - (3)
Impairment - - (400) (400)
Net book amount at 30
June 2022 1,651 337 - 1,988
------------------------ ---------- ------------------------- -------------------------- -----------
12. Financial Instruments with Fair Value through Other Comprehensive Income (FVTOCI)
30 June 30 June 2021 30 June 30 June
2022 Group 2022 2021
Group GBP'000 Company Company
GBP'000 GBP'000 GBP'000
--- ------------------------------------ -------------- ------------- --------- -----------
FVTOCI financial instruments
at the beginning of the period 7 4 7 4
Transferred from Available-for-sale - - - -
category
Additions - - - -
Disposals - - - -
Revaluations and impairment (6) 3 (6) 3
---------------------------------------- ---- --------- ------------- --------- ---------
FVTOCI financial assets at
the end of the period 1 7 1 7
---------------------------------------- ---- --------- ------------- --------- ---------
Market Value of Investments
The market value as at 30 June 2022 of the investments', available for sale listed and unlisted investments, was as follows:
30 June 2022 30 June 2021 30 June 2022 30 June 2021
Group Group Company Company
GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- ------------ ------------ ------------ ------------
Quoted on other foreign stock
exchanges 1 7 1 7
At 30 June 1 7 1 7
----------------------------- ------------ ------------ ------------ ------------
13. Financial instruments with Fair Value through Profit and Loss (FVTPL)
30 June 2022 30 June 2021 30 June 30 June
Group Group 2022 2021
GBP GBP Company Company
GBP GBP
---------------------------------- ------------- ------------- --------- ---------
FVTPL financial instruments
at the beginning of the period 72 5 72 -
Additions - 72 - 72
Disposals - (5) - -
Revaluations (72) - (72) -
---------------------------------- ------------- ------------- --------- ---------
FVTPL financial assets at
the end of the period (audited) - 72 - 72
---------------------------------- ------------- ------------- --------- ---------
14. Trade and Other Receivables
Group Company
------------
2022 2021 2022 2021
GBP GBP GBP GBP
----------------------------------------- ----- ----- ----- -----
Non-current
Amounts owed by Group undertakings - - 278 17
Purchased debt - - - -
Amounts owed by related parties
- due from associates and joint ventures 1,502 1,362 1,502 1,362
----------------------------------------- ----- ----- ----- -----
Total non-current 1,502 1,362 1,780 1,379
----------------------------------------- ----- ----- ----- -----
Current
Sundry debtors 130 142 116 76
Prepayments 147 86 141 86
Purchased debt - 987 - 987
Amounts owed by related parties
- due from key management - - - -
Total current 277 1,215 257 1,149
----------------------------------------- ----- ----- ----- -----
Sundry debtors include a balance of:
-- GBP12,630 (2021: GBPnil) owing to Red Rock Resources Plc, a related party entity as a result of having a common Director;
-- GBP48,493 (2021: GBP33,733) owing to Curzon Energy Plc, a related party entity as a result of having a common Director.
Debt Purchased from Resource Mining Corporation Limited
On 7 April 2020, the Company completed the acquisition of a AUD 1.7m (GBP907,000) debt position in ASX listed Resource Mining Corporation Limited for consideration of GBP178,096 and 13,288,982 new ordinary shares of Corcel. The Company's share price on the date of transaction was GBP0.011. For this consideration, the Company also acquired a six-month option to buy the balance of Resource Mining Corporation Limited debt for the same proportional term, AUD 640,000 in cash and 23,711,018 new ordinary shares in Corcel. The option was exercised, for more details please see Note 25.
On 28 October 2020, the Company has also exercised the 6-month option to purchase the remaining RMI debt of AUD 3.05 million for consideration of 23,711,018 new ordinary shares and AUD 640,000 in cash (GBP355,259), which represents a similar discount to the initial acquisition. All the loan notes are interest free and unsecured.
Directly attributable transactions costs were also included in the carrying value of the debt, bringing the total of the debt value to GBP987,121 on 30 June 2021.
On 18 October 2021, the entirety of the above debt was forgiven in consideration for the acquisition of the entire share capital of Niugini Nickel Pty, Ltd from Resource Mining Corporation Limited ("Niugini Nickel"). The Prior year carrying value of the debt of GBP987,121, along with certain cash transaction costs totalling GBP26,180, have formed the base cost of the acquisition of Niugini Nickel. See note 22 for further details.
15. Trade and Other Payables
Group Company
------------ ------------
2022 2021 2022 2021
GBP GBP GBP GBP
------------------------------------- ----- ----- ----- -----
Trade and other payables 191 202 209 176
Amounts due to related parties:
* due to Red Rock Resources plc 10 - 10 -
Accruals 123 35 104 35
Trade and other payables 325 237 322 211
Borrowings (note 21 ) 1,423 883 1,423 883
------------------------------------- ----- ----- ----- -----
Total 1,747 1,120 1,745 1,094
------------------------------------- ----- ----- ----- -----
Trade and other payables, include a balance of GBP10,202 (2021: GBPnil), owing to Red Rock Resources Plc, a related party entity as a result of having common Directors.
Short Term Borrowings Maturity
2022 2021
GBP'000 GBP'000
--------------------------- -------- --------
31 October 2022 778 -
23 June 2023 645 -
Due by 30 December 2021 - 818
Due by 28 April 2022 - 65
Total long-term borrowings 1,423 883
--------------------------- -------- --------
C4 Energy Notes - YA PN II - Riverfort
During the year, GBP100,000 of principal was repaid by the Company in cash and GBP128,586 of the principal was converted into ordinary shares of the Company .
On 31 October 2022, after the year end, the Company announced that it had made a GBP150,000 repayment to the lenders of corporate debt originally due 31 October 2022, with the balance of GBP627,600 now due 31 March 2023.
More details on all the borrowing are given in Note 23.
16. Reserves
Share Premium
The share premium account represents the excess of consideration received for shares issued above their nominal value net of transaction costs.
Shares to be Issued
The shares to be issued account represents the share capital that has been committed to be issued in settlement of the consideration for the acquisition of the remaining 50% interest in Wiers Drove Developments limited in December 2020. See note 17 below for more details.
Foreign Currency Translation Reserve
The translation reserve represents the exchange gains and losses that have arisen on the retranslation of overseas operations.
Retained Earnings
Retained earnings represent the cumulative profit and loss net of distributions to owners.
FVTOCI Revaluation Reserve
The fair value through other comprehensive income (FVTOCI) reserve represents the cumulative revaluation gains and losses in respect of FVTOCI investments.
Share-Based Payment Reserve
The share-based payment reserve represents the cumulative charge for options granted, still outstanding and not exercised.
Warrant Reserve
The warrant reserve represents the cumulative charge for warrants granted, still outstanding and not exercised.
17. Share Capital, Share Premium and Shares to be Issued of the Company
The share capital of the Company is as follows:
2022 2021
Authorised, issued and fully paid GBP'000 GBP'000
-------------------------------------------------------------- --------- ---------- ---------------
440,878,295 ordinary shares of GBP0.0001 each
(2021: 384,787,602) 44 38
1,788,918,926 deferred shares of GBP0.0009 each 1,610 1,610
2,497,434,980 A deferred shares of GBP0.000095
each 237 237
8,687,335,200 B Deferred shares of GBP0.000099
each 860 860
-------------------------------------------------------------- --------- ---------- ---------------
As at 30 June 2,751 2,745
-------------------------------------------------------------- --------- ----------
Nominal, Share Premium
Movement in ordinary shares Number GBP
---------------------------------------------------------- ------------- ---------- -----------------
As at 30 June 2020 - ordinary shares of GBP0.0001
each 189,910,596 18,991 23,031,649
---------------------------------------------------------- ------------- ---------- -----------------
Issued on 26 Oct 2020 at GBP0.0100 per share
(cash) 75,000,000 7,500 742,500
Share issuance costs in relation to shares
issued on 26 Oct 2020 - - (45,000)
Issued on 26 Oct 2020 at GBP0.0100 per share
(non cash creditor settlement) 3,000,000 300 29,700
Issued on 26 Oct 2020 37,500,000 investor warrants
issued at time of fundraise - - (210,000)
Issued on 28 Oct 2020 at GBP0.0098 per share
(RMI debt acquisition) 23,711,018 2,371 229,997
Issued on 17 Feb 2021 at GBP0.0125 per share
(non-cash, creditor settlement 2,880,000 288 35,712
* Issued on 17 Feb 2021 51,200,000 investor warrants
issued at time of fundraise - - (276,480)
* Issued on 17 Feb 2021 23,000,000 investor warrants
issued at time of fundraise - - (230,769)
Share issuance costs in relation to shares
issued on 17 Feb 2021 - - (9,000)
Issued on 18 Feb 2021 at GBP0.0125 per share
(cash) 24,000,000 2,400 297,600
Issued on 18 Feb 2021 at GBP0.0125 per share
(non cash creditor settlement) 2,880,000 288 19,713
Issued on 15 Apr 2021 at GBP0.0160 per share
(cash, warrants exercised) 8,500,000 850 135,150
Issued on 20 Apr 2021 at GBP0.0160 per share
(cash, warrants exercised) 500,000 50 7,950
Issued on 20 Apr 2021 at GBP0.0160 per share
(cash, warrants exercised) 12,639,750 1,264 200,972
Issued on 22 Apr 2021 at GBP0.0160 per share
(cash, warrants exercised) 2,500,000 250 39,750
Issued on 10 May 2021 at GBP0.0200 per share
(non-cash, Tring Road interest) 12,026,168 1,203 248,797
Issued on 12 May 2021 25,000,000 investor warrants
issued at time of fundraise - - (150,000)
Issued on 12 May 2021 20,000,000 investor warrants
issued at time of fundraise - - (240,000)
Issued on 12 May 2021 at GBP0.0130 per share
(non-cash creditor settlement) 23,076,924 2,308 277,692
Issued on 12 May 2021 at GBP0.0001 per share
(non- cash creditor settlement) 1,846,152 185 1,656
Issued on 12 May 2021 at GBP0.0200 per share
(non- cash interest settlement) 1,200,000 120 23,880
Issued on 12 May 2021 at GBP0.0001 per share
(non- cash SIP) 1,116,994 112 -
---------------------------------------------------------- ------------- ---------- -----------------
As at 30 June 2021 - ordinary shares of GBP0.0100
each 384,787,602 38,480 24,161,469 ---------------------------------------------------------- ------------- ---------- ----------------- Issued on 21 February 2022 at GBP0.015 per share (non cash creditor settlement) 7,200,000 720 107,280 Issued on 28 February 2022 at GBP0.015 per share (non cash conversion of debt) 8,572,400 857 127,729 Issued on 16 March 2022 at GBP0.015 per share (cash placing) 25,793,332 2,579 384,321 Share issue costs in relation to shares issued on 16 March 2022 - - (48,250) Issued on 16 March 2022 at GBP0.015 per share (non cash conversion of debt) 11,333,333 1,133 168,867 Issued on 4 April 2022 at GBP0.01525 per share (cash placing) 2,295,080 230 34,770 Issued on 5 April 2022 at GBP0.0145 per share (non- cash SIP) 496,550 50 14,288 Issued on 5 April 2022 at GBP0.0135 per share (non- cash SIP) 399,999 40 10,710 ---------------------------------------------------------- ------------- ---------- ----------------- As at 30 June 2022 - ordinary shares of GBP0.0100 each 440,878,296 44,089 24,961,184 ---------------------------------------------------------- ------------- ---------- -----------------
The Company's share capital consists of three classes of shares, being:
-- Ordinary shares with a nominal value of GBP0.0001, which are the company's listed securities;
-- Deferred shares with a nominal value of GBP0.0009; -- A Deferred shares with a nominal value of GBP0.000095; -- B Deferred share with a nominal value of GBP0.000099
Subject to the provisions of the Companies Act 2006, the deferred shares may be cancelled by the Company, or bought back for GBP1 and then cancelled. These deferred shares are not quoted and carry no rights whatsoever.
Shares to be Issued
On 1 December, 2020 the Company acquired the remaining 50% interests in WDD for potential consideration of GBP90,000, payable in GBP15,000 in cash and GBP75,000 in new ordinary shares. The GBP75,000 consideration, payable in shares, is dependant on the financial close of the initial 50MW of capacity of the Burwell Project. Financial close is defined as having a fully funded SPV to take the project forward to operational capacity or any potential disposal or sale. As at 30 June 2022, these consideration had not been met and as such GBP75,000 remains in shares to be issued.
Warrants
At 30 June 2022, the Company had 171,999,329 warrants in issue (2021: 170,399,328) with exercise prices ranging GBP0.01245-GBP0.60 (2021: GBP0.01245-GBP0.60). Out of those, nil (2021: 3,999,999) have market performance conditions that accelerate the expiry date. The weighted average remaining life of the warrants at 30 June 2022 was 406 days (2021: 695 days).
Details related to valuation of all warrants are disclosed below.
Group and Company 2022 2021
number of number of
warrants warrants
Outstanding at the beginning of the period 170,399,328 60,839,078
Granted during the period 33,800,000 156,776,923
Exercised during the period - (47,216,673)
Lapsed during the period (32,199,999) -
------------------------------------------- ------------ ------------
Outstanding at the end of the period 171,999,329 170,399,328
------------------------------------------- ------------ ------------
At 30 June 2022, the Company had the following warrants to subscribe for shares in issue:
Grant date Expiry date Warrant exercise Number of post consolidation
price warrants
14 Jan 2019 12 Dec 2022 GBP0.60 915,873
17 July 2019 1 July 2024 GBP0.25 200,000
31 Jan 2020 30 Jan 2023 GBP0.0285 438,596
7 Apr 2020 6 Apr 2023 GBP0.01245 4,909,610
7 Apr 2020 6 Apr 2023 GBP0.016 29,375,000
19 Jun 2020 18 Jun 2023 GBP0.016 21,000,000
23 Oct 2020 22 Oct 2023 GBP0.016 13,630,250
17 Feb 2021 16 Feb 2023 GBP0.020 48,000,000
12 May 2021 12 May 2024 GBP0.015 20,000,000
13 December
14 December 2021 2024 GBP0.015 3,800,000
20 February
21 February 2022 2024 GBP0.015 30,000,000
------------------ ------------- ------------------ -----------------------------
Total warrants
in issue at 30
June 2022 171,999,329
----------------------------------------------------- -----------------------------
The aggregate fair value recognised in warrants reserve in relation to the share warrants granted during the reporting period was GBP70,400 (2021: GBP1,107,249).
The following information is relevant in the determination of the fair value of warrants granted during the reporting period. Black-Scholes valuation model was applied for all the warrants below:
Grant Expiry Number Warrant Warrant Share UK Volatility, FV of FV of
date date of life, exercise price risk-free % 1 all
warrants years price, at the rate warrant, warrants,
GBP grant at the GBP GBP
date, date
GBP of grant,
%
13 Dec 12 Dec
2021 2024 3,800,000 3 0.015 0.0115 0.458 160.99 0.0094 35,600
21 Feb 20 Feb
2022 2024 30,000,000 2 0.015 0.0123 1.29 28.19 0.0012 34,800
Total
at 30
June 2022 33,800,000 70,400
--------------------- ----------- -------- ---------- -------- ---------- ------------ ---------- ----------
Capital Management
Management controls the capital of the Group in order to control risks, provide the shareholders with adequate returns and ensure that the Group can fund its operations and continue as a going concern. The Group's debt and capital, includes ordinary share capital and financial liabilities, supported by financial assets such as cash, receivables and investments. There are no externally imposed capital requirements.
Management effectively manages the Group's capital by assessing the Group's financial risks and adjusting its capital structure in response to changes in these risks and in the market. These responses include the management of debt levels, distributions to shareholders and share issues. There have been no changes in the strategy adopted by management to control the capital of the Group since the prior year.
18. Share-Based Payments
Employee Share Options
In prior years, the Company established an employee share option plan to enable the issue of options as part of the remuneration of key management personnel and Directors to enable them to purchase ordinary shares in the Company. Under IFRS 2 "Share-based Payments", the Company determines the fair value of the options issued to Directors and employees as remuneration and recognises the amount as an expense in the Income Statement with a corresponding increase in equity.
At 30 June 2022, the Company had outstanding options to subscribe for post-consolidation Ordinary shares as follows:
Options issued Options issued Options Options issued Total
9 September 2016 5 December issued 31 28 February Number
exercisable at 2019, exercisable January 2020 2022 exercisable
GBP0.8 per share, at GBP0.0275 exercisable at GBP0.017
expiring on 9 September per share, at GBP0.0285 per share,
2022, expiring on per share, expiring on
Number 5 December expiring 27 February
2024 on 31 January 2027
2025
------------- ------------------------ ------------------ -------------- ----------------- ----------
S Kaintz 96,000 - 3,040,567 6,547,197 9,683,764
J Parsons - 3,040,567 - 6,547,197 9,587,764
E Ainsworth - - - 2,805,942 2,805,942
H Bellingham - - - 2,805,942 2,805,942
Employees - - - 1,900,000 1,900,000
------------- ------------------------ ------------------ -------------- ----------------- ----------
Total 96,000 3,040,567 3,040,567 20,606,278 26,783,412
------------- ------------------------ ------------------ -------------- ----------------- ----------
2022 2021
--------------------- ----------------------
Weighted Weighted
Number average average
of exercise Number of exercise
options price options price
Company and Group Number GBP Number Pence
------------------------------------- ---------- --------- ----------- ---------
Outstanding at the beginning of the
period 6,212,534 0.42 6,212,534 0.42
Granted during the year 20,606,278 0.017 - -
Lapsed during the period (35,400) 0.45 - -
Outstanding at the end of the period 26,783,412 0.022 6,212,534 0.42
------------------------------------- ---------- --------- ----------- ---------
The exercise price of options outstanding at 30 June 2022 and 30 June 2021, ranged between GBP0.017 and GBP0.80. Their weighted average contractual life was 4.161 years (2021: 3.462 years).
Of the total number of options outstanding at 30 June 2022, 96,000 (2021: 122,900) had vested and were exercisable. The weighted average share price (at the date of exercise) of options, exercised during the year, was nil (2021: nil) as no options were exercised during the reporting year (2021: nil).
The following information is relevant in the determination of the fair value of share options granted during the reporting period to the Company Directors. Black-Scholes valuation model was applied to value the options with the inputs detailed in the table below:
Grant Number Vesting Life Option Share UK Volatility, FV of FV of
date of options period, of the exercise price risk-free % 1 option, all
years option, price, at the rate GBP options,
years GBP grant at the GBP
date, date
GBP of grant,
%
28 Feb
2022 20,606,278 3 5 0.017 0.01405 1.03 92.05 0.0076 17,437
Total
at 30
June 2022 20,606,278
----------- ----------- --------- --------- ---------- -------- ---------- ------------ ---------- ----------
Share-based remuneration expense, related to the share options granted during the reporting period, is included in the Administrative expenses line in the Consolidated Income Statement in the amount of GBP17,436 (2021: GBP23,193).
Share Incentive Plan
In January 2012, the Company implemented a tax efficient Share Incentive Plan (SIP), a government approved scheme, the terms of which provide for an equal reward to every employee, including Directors, who have served for three months or more at the time of issue. The terms of the plan provide for:
-- each employee to be given the right to subscribe any amount up to GBP150 per month with Trustees, who invest the monies in the Company's shares;
-- the Company to match the employee's investment by contributing an amount equal to double the employee's investment ("matching shares"); and
-- the Company to award free shares to a maximum of GBP3,600 per employee per annum.
The subscriptions remain free of taxation and national insurance if held for five years.
All such shares are held by SIP Trustees and the shares cannot be released to participants until five years after the date of the award.
During the financial year, a total of 896,549 free, matching and partnership shares were awarded (2021: 1,116,994), resulting in a share-based payment charge of GBP21,500 (2021: GBP5,400), included into administrative expenses line in the Consolidated Income Statement.
19. Cash and Cash Equivalents
30 June 30 June
2022 2021
Group GBP'000 GBP'000
------------------------- -------- --------
Cash in hand and at bank 25 392
------------------------- -------- --------
30 June 30 June
2022 2021
Company GBP'000 GBP'000
------------------------- -------- --------
Cash in hand and at bank 20 387
------------------------- -------- --------
Credit Risk
The Group's exposure to credit risk, or the risk of counterparties defaulting, arises mainly from notes and other receivables. The Directors manage the Group's exposure to credit risk by the application of monitoring procedures on an ongoing basis. For other financial assets (including cash and bank balances), the Directors minimise credit risk by dealing exclusively with high credit rating counterparties.
Credit Risk Concentration Profile
The Group's receivables do not have significant credit risk exposure to any single counterparty or any group of counterparties, having similar characteristics. The Directors define major credit risk as exposure to a concentration exceeding 10% of a total class of such asset.
The Company maintains its cash reserves in Coutts & Co, which maintains an A-1 credit rating from Standard & Poor's.
20. Financial Instruments
20.1 Categories of Financial Instruments
The Group and the Company holds a number of financial instruments, including bank deposits, short-term investments, loans and receivables and trade payables. The carrying amounts for each category of financial instrument are as follows:
Group 2022 2021 30 June GBP'000 GBP'000 -------------------------------------------------------- -------- -------- Financial assets Fair value through other comprehensive income financial assets Quoted equity shares (Note 12 ) 1 7 Total financial assets carried at fair value, valued at observable market price 1 7 Fair value through profit and loss financial assets Investments in warrant of a listed entity (Note 13 ) - - Investments in a project of a private entity - 72 Total financial assets carried at fair value, valued using valuation techniques - 72 Cash and cash equivalents 25 392 Loans and receivables Receivable from JVs 1,502 1,362 Purchased debt - current (Note 14 ) - 987 Other receivables 277 228 Total financial assets held at amortised cost 1,779 2,577 Total financial assets 1,805 3,048 -------------------------------------------------------- -------- -------- Total current 302 1,686 -------------------------------------------------------- -------- -------- Total non-current 1,503 1,362 -------------------------------------------------------- -------- -------- Company 2022 2021 30 June GBP'000 GBP'000 -------------------------------------------------------- --------- -------- Financial assets Fair value through other comprehensive income financial assets Quoted equity shares 1 7 Total FVTOCI financial assets 1 7 Fair value through profit and loss financial assets Investments in a project of a private entity - 72 -------------------------------------------------------- --------- -------- Total financial assets carried at fair value, valued using valuation techniques - 72 Cash and cash equivalents 20 387 Loans and receivables Receivable from JVs 1,502 1,362 Purchased debt - current (Note 14 ) - 987 Receivable from subsidiaries 278 17 Other receivables 257 161 Total financial assets held at amortised cost 2,037 2,527 Total financial assets 2,058 2,993 -------------------------------------------------------- --------- -------- Total current 277 1,631 -------------------------------------------------------- --------- --------
Total non-current 1,780 1,362 -------------------------------------------------------- --------- --------
Financial Instruments Carried at Fair Value Using Valuation Techniques Other than Observable Market Value
Financial instruments, valued using other valuation techniques, can be reconciled from beginning to ending balances as follows:
Group 2022 2021 30 June GBP'000 GBP'000 --------------------------------------------------------- -------- -------- Financial assets Purchased debt - 987 FVTPL - 72 Total financial assets valued using valuation techniques - 1,059 --------------------------------------------------------- -------- -------- Financial liabilities Loans and borrowings Trade and other payables 323 232 Borrowings 1,423 818 Total financial liabilities 1,746 1,050 --------------------------------------------------------- -------- --------
Trade Receivables and Trade Payables
Management assessed that other receivables and trade and other payables approximate their carrying amounts largely due to the short-term maturities of these instruments.
Borrowings
The carrying value of interest-bearing loans and borrowings is determined by calculating present values at the reporting date, using the issuer's borrowing rate. The loan is due in December 2021 and impact of the discounting is immaterial and, therefore, not included into the valuation.
20.2 Fair Values
Financial assets and financial liabilities, measured at fair value in the statement of financial position, are grouped into three levels of a fair value hierarchy. The three levels are defined, based on the observability of significant inputs to the measurement, as follows:
-- Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities;
-- Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable; and
-- Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
The carrying amount of the Group and the Company's financial assets and liabilities is not materially different to their fair value. The fair value of financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Where a quoted price in an active market is available, the fair value is based on the quoted price at the end of the reporting period. In the absence of a quoted price in an active market, the Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
The following table provides the fair value measurement hierarchy of the Group's assets and liabilities:
Level
1 Level 2 Level 3 Total
Group and Company GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------- -------- -------- -------- --------
30 June 2022
Financial assets at fair value through
other comprehensive income
- Quoted equity shares 1 - - 1
Financial assets at fair value through - - -
profit and loss -
--------------------------------------- -------- -------- -------- --------
Level 1 Level 2 Level 3 Total
Group and Company GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------- -------- -------- -------- --------
30 June 2021
Financial assets at fair value through
other comprehensive income
- Quoted equity shares 7 - - 7
Financial assets at fair value through
profit and loss - - 72 72
--------------------------------------- -------- -------- -------- --------
20.3 Financial Risk Management Policies
The Directors monitor the Group's financial risk management policies and exposures, and approve financial transactions.
The Directors' overall risk management strategy seeks to assist the consolidated Group in meeting its financial targets, while minimising potential adverse effects on financial performance. Its functions include the review of credit risk policies and future cash flow requirements.
Specific Financial Risk Exposures and Management
The main risks the Group is exposed to through its financial instruments are credit risk and market risk, consisting of interest rate risk, liquidity risk, equity price risk and foreign exchange risk.
Credit Risk
Exposure to credit risk, relating to financial assets, arises from the potential non-performance by counterparties of contract obligations that could lead to a financial loss to the Group.
Credit risk is managed through the maintenance of procedures (such procedures include the utilisation of systems for the approval, granting and renewal of credit limits, regular monitoring of exposures against such limits and monitoring of the financial liability of significant customers and counterparties), ensuring, to the extent possible, that customers and counterparties to transactions are of sound creditworthiness. Such monitoring is used in assessing receivables for impairment.
Risk is also minimised through investing surplus funds in financial institutions that maintain a high credit rating or in entities that the Directors have otherwise cleared as being financially sound.
Trade and other receivables, that are neither past due nor impaired, are considered to be of high credit quality. Aggregates of such amounts are as detailed in Note 14 .
There are no amounts of collateral held as security in respect of trade and other receivables.
The consolidated Group does not have any material credit risk exposure to any single receivable or group of receivables under financial instruments entered into by the consolidated Group.
Liquidity Risk
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. The Group manages this risk through the following mechanisms:
-- monitoring undrawn credit facilities; -- obtaining funding from a variety of sources; and -- maintaining a reputable credit profile.
The Directors are confident that adequate resources exist to finance operations and that controls over expenditures are carefully managed. All financial liabilities are due to be settled within the next twelve months.
Market Risk
Interest Rate Risk
The Company is not exposed to any material interest rate risk because interest rates on loans are fixed in advance.
Equity Price Risk
Price risk relates to the risk that the fair value, or future cash flows of a financial instrument, will fluctuate because of changes in market prices, largely due to demand and supply factors for commodities, but also include political, economic, social, technical, environmental and regulatory factors.
Foreign Exchange Risk
The Group's transactions are carried out in a variety of currencies, including Australian Dollars, Canadian Dollars, United Stated Dollars, Papua New Guinea Kina and UK Sterling. To mitigate the Group's exposure to foreign currency risk, non-Sterling cash flows are monitored. Fluctuation of +/- 10% in currencies, other than UK Sterling, would not have a significant impact on the Group's net assets or annual results.
The Group does not enter forward exchange contracts to mitigate the exposure to foreign currency risk as amounts paid and received in specific currencies are expected to largely offset one another.
These assets and liabilities are denominated in the following currencies as shown in the table below:
Group GBP AUD USD CAD Total 30 June 2022 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Cash and cash equivalents 25 - - - 25 Amortised cost financial assets - Other receivables 258 19 - - 277 FVTOCI financial assets - - - 1 1 FVTPL financial assets - warrants - - - - - FVTPL financial assets - - - - - Amortised costs financial assets - Non-current receivables 1,502 - - - 1,502 Trade and other payables, excluding accruals 287 36 - - 323 Short-term borrowings 1,423 - - - 1,423 ------------------------------------ -------- -------- -------- -------- -------- Group GBP AUD USD CAD Total 30 June 2021 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Cash and cash equivalents 392 - - - 392 Amortised cost financial assets - Other receivables 228 987 - - 1,215
FVTOCI financial assets 7 - - - 7 FVTPL financial assets - warrants - - - - - FVTPL financial assets 72 - - - 72 Amortised costs financial assets - Non-current receivables 1,362 - - - 1,362 Trade and other payables, excluding accruals 237 - - - 237 Short-term borrowings 883 - - - 818 ------------------------------------ -------- -------- -------- -------- -------- Company GBP AUD USD CAD Total 30 June 2022 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Cash and cash equivalents 20 - - - 20 Amortised cost financial assets - Other receivables 257 - - - 257 FVTOCI financial assets - - - 1 1 FVTPL financial assets - - - - - Amortised costs financial assets - Non-current receivables 1,780 - - - 1,780 Trade and other payables, excluding accruals 322 - - - 322 Short-term borrowings 1,423 - - - 1,423 Company GBP AUD USD CAD Total 30 June 2021 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Cash and cash equivalents 387 - - - 387 Amortised cost financial assets - Other receivables 161 987 - - 1,148 FVTOCI financial assets 7 - - - 7 FVTPL financial assets 72 - - - 72 Amortised costs financial assets - Non-current receivables 1,362 - - - 1,362 Trade and other payables, excluding accruals 211 - - - 211 Short-term borrowings 883 - - - 818
Exposures to foreign exchange rates vary during the year, depending on the volume and nature of overseas transactions.
21. Reconciliation of Liabilities Arising from Financing Activities and Major Non-Cash Transactions
Significant non-cash transactions, from financing activities in relation to loans and borrowings, are as follows:
Non-cash
flow
Interest
Cash Non-cash and Cash Cash
30 flows Non-cash Non-cash flow arrangement flows flows 30
June Loans flow flow Forex fees Principal Interest June
2021 received Restructured Conversion movement accreted repaid repaid 2022
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Align
Research
Ltd loan - 950 - (170) - 98 (100) - 778
Premium
Credit 65 - - - - - (65) - -
C4 /
Riverfort
Capital and
YA II PN Ltd
loan 818 - - (129) - 56 (100) - 645
Total 883 950 - (299) - 154 (265) - 1,423
Significant non-cash transactions from financing activities in relation to raising new capital are disclosed in Note 17.
There were no significant non-cash transactions from investing activities in the current year.
Significant non-cash transactions from operating activities were as follows:
-- Payment for services and Director remuneration (share-based payments in the form of options and warrants), in the amount of GBP15,829 (2021: GBPnil), disclosed in Notes 17 and 18;
-- Impairment of associates and joint venture projects in the amount of GBP400,000 (2021: GBPnil);
-- Impairment of FVTPL assets in the amount of GBP72,000 (2021: GBPnil); -- Share based payments to settle creditor balances GBP72,000 (2021: GBP392,000).
22. Acquisition of Niugini Nickel Pty Ltd
On 18 October 2021 the Company, via its 100% owned subsidiary
Corcel Australasia Pty Ltd, completed the acquisition of
100% of the shares in Niugini Nickel Pty Ltd ("NN") from
Resource Mining Corporation Pty Ltd ("RMC"). Consideration
paid by the Company for the acquisition of NN was the forgiveness
of the corporate debt held by the Company and payable by
RMC totalling AUD 4,761,087. The Company has accounted for
the fair value of this consideration based on the cost to
acquire the debt, at a substantial discount to face value,
plus transaction costs. As at 18 October 2021 the total cost
of acquisition of the debt payable by RMC stood at GBP1,013,302.
The Company has determined the fair value of the assets and
liabilities of NN to be recognised in these consolidated
interim financial statements as follows:
Fair value
recognised
on acquisition
GBP(000's)
Assets
Cash 2
Receivables 18
Property, plant and equipment 41
Exploration and evaluation assets 9 67
Total Assets 1,028
Liabilities
Trade and other payables (1 5)
Total liabilities (15)
Total identifiable net assets at fair value 1,013
Purchase consideration 1,013
Under IFRS 3, a business must have three elements: inputs, processes and outputs. Niugini Nickel is an early stage exploration company and has no near term plans to develop a mine. Niugini Nickel does have titles to mineral properties but these could not be considered inputs because of their early stage of development. Niugini Nickel has no processes to produce outputs and had not completed a feasibility study or a preliminary economic assessment on any of its properties at the time of acquisition, nor did it hold any infrastructure or assets that could produce outputs. Therefore, the Directors conclusion is that the transaction is an asset acquisition and not a business combination. The fair value adjustment to intangible assets of GBP967,499 represents the excess of the purchase and contingent consideration of GBP1,013,302 over the excess of the net assets acquired (net assets of GBP45,803).
23. Significant Agreements and Transactions
Financing
-- During the year the Company drew down on GBP500,000 of principal debt under a facility entered into on 12 May 2021 bearing interest at 8% and repayable on 30 April 2022. 3,800,000 warrants exercisable at 1.5 pence each for 3 years were issued to the finance providers on 14 December 2021. The facility was settled via GBP100,000 in cash payments, GBP170,000 on conversion into 11,333,333 shares in the Company at 1.5 pence on 16 March 2022 and GBP270,000 on novation into a further financing agreement entered into on 21 February 2022.
-- On 21 February 2022 the Company entered into a financing agreement with Align Research and Riverfort Global Opportunities Fund for the provision of a facility of up to GBP720,000. Of the facility, GBP450,000 was drawn down as cash in the year with the remaining GBP270,000 representing a novation of amounts due under a separate facility entered into with the finance providers in the prior year (see above). 30,000,000 warrants exercisable at 1.5 pence each for 2 years were issued to the facility providers as part of the agreement. Principal and interest totalling GBP777,500 as at 30 June 2022 is repayable by 31 October 2022.
-- On 22 December 2021 the Company settled GBP100,000 of principal due to C4 in cash, with a further GBP128,586 of principal and interest being converted into 8,572,400 shares at 1.5 pence on 28 February 2022. As at 30 June 2022 the remaining GBP645,213 of principal and interest under the loan is due for settlement on 23 June 2023.
-- On 21 February 2022 the Company issued 7,200,000 shares at 1.5 pence each in settlement of creditor balances totalling GBP108,000.
-- On 16 March 2022 the Company undertook an institutional placing, issuing 25,793,332 shares at 1.5p raising a total of GBP386,900 in new funds.
-- On 4 April 2022 the Directors of the Company subscribed for 2,295,080 shares in the Company at 1.525 pence each, raising GBP35,000 in new funds.
Niugini Nickel Pty Ltd - Wowo Gap Nickel/Cobalt Project
-- On 18 October 2021 the Company completed the acquisition of 100% of the shares in Niugini Nickel Pty Ltd from resource Mining Corporation Limited ("RMC"). Consideration for the acquisition was the forgiveness of debt payable to the Company by RMC. See note 22 for further details.
Nickel Offtake MOU
-- On 10 January 2022 the Company announced that it had signed an MOU with Shandong New Powder COSMO AM&T for the supply of nickel from the Company's Mambare and Wowo Gap nickel/cobalt projects in PNG. NPC indicated that it is seeking to purchase up to 0.5Mt per annum of nickel DSO products, and the parties agreed to negotiate a binding agreement for this production.
Partnership with Altana Social Impact Partnership
-- On 28 April 2022 the Company announced that it had signed a Heads of Terms with the Altana Social Impact Partnership in order to fund its current and future UK energy storage and generation projects. The heads of terms included an option to directly invest in Corcel's UK Flexible Grid Solutions subsidiary.
24. Commitments
As at 30 June 2022, the Company had entered into the following commitments:
-- Exploration commitments: On-going exploration expenditure is required to maintain title to the Group mineral exploration permits. No provision has been made in the Financial Statements for these amounts as the expenditure is expected to be fulfilled in the normal course of the operations of the Group.
-- On 8 November 2021, the Company entered into a new lease agreement for office space with WeWork Aldwych House. The initial lease ran from 1 January 2022 through 30 June 2022 and was non-cancellable during this period. Thereafter, the lease can be terminated by giving one full calendar month notice.
25. Related Party Transactions
-- Related party receivables and payables are disclosed in Notes 14 and 15 , respectively.
-- The key management personnel are the Directors and their remuneration is disclosed within Note 8 .
-- On 28 February 2022 the Company announced that C4, a UK incorporated private entity where James Parsons, Chairman of Corcel Plc is both a director and a shareholder, would convert GBP128,586 of outstanding principal and interest into 8,572,400 new ordinary shares of the Company. Amounts remaining to be paid under the loan as at 30 June 2022 were GBP645,213.
26. Events After the Reporting Period
-- On 20 July 2022 the Company announced a fundraising of up to GBP600,000 including a placing of GBP336,000 at a price of GBP0.004 with warrants exercisable at GBP0.005 per share and a broker option of up to GBP300,0000 on the same terms. The Company further announced that 15,000,000 warrants issued on 12 May 2021 would be repriced to GBP0.004 per new ordinary share, and that 30,000,000 warrants priced at GBP0.015 per share had been cancelled and replaced with 112,500,000 new warrants now priced at GBP0.004 per new ordinary share. On 27 July 2022 the Company announced the conclusion of the fundraising at a total value of GBP357,320 resulting in the issuance of a further 5,330,000 new ordinary shares at a price of GBP0.004 and 5,330,000 warrants to buy shares at a price of GBP0.005. The Company also announced the issuance of 4,466,500 broker warrants at a price of GBP0.004.
-- On 17 October 2022 the Company announced the intention to create a Singapore based upstream battery metal joint venture consolidating the Company's interests in the Wowo Gap and Mambare nickel/cobalt projects and adding to them an interest in the Doncella lithium project in Argentina. The Company would own 50% of the new JV, have board representation and benefit from a $1.5m carried interest generally and a 1.5% gross revenue royalty over the Wowo Gap project. NPC further agreed to invest GBP200,000 into the Company at a price of GBP0.004 with 1 for 1 warrants exercisable at a price of GBP0.005 per share and was to be offered a board seat at Corcel.
-- On 31 October 2022 the Company announced that it had agreed with its lenders of a debt position due 31 October 2022, to make an immediate repayment of GBP150,000 with the residual balance of GBP627,600 being deferred to 31 March 2023. The Company has further agreed a refinancing fee of GBP77,760 to be paid by 23 December 2022 in new ordinary shares of the Company to be priced at the lowest VWAP of the Company's shares as traded between 31 October 2022 and 20 December 2022. The Lenders will have the right to convert any outstanding balances into equity at the Strike Price between 20 December 2022 and 31 March 2023. The outstanding balances will accrue a monthly coupon of 1%. The Company further agreed to a series of potential accelerated repayment scenarios in the event that asset sales for cash or new equity placings were completed before the balance of the loan amounts fell due. The Company also agreed that before 20 December 2022 it would either pay a fee of GBP475,000 in aggregate to the Lenders or extend 112,500,000 of existing warrants currently allowing purchase of new ordinary shares at a price of GBP0.004 until 20 February 2024, to an extended term where they remain exercisable until 31 March 2025, with a related resettability clause associated with these warrants to also be extended until 31 December 2023.
-- On 16 November 2022 the Company announced that it had completed the sale of its 40% interest in the Tring Road Gas Peaking Project to Terra Firma Ltd. The Company has agreed a sales price of GBP317,946, with GBP121,146 to be paid immediately and a further GBP196,800 at completion, which was expected on or about 1 December 2022.
27. Control
There is considered to be no controlling party.
28. These results are audited, however the information does not constitute statutory accounts as defined under section 434 of the Companies Act 2006. The consolidated statement of financial position at 30 June 2022 and the consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity and the consolidated cash flow statement for the year then ended have been extracted from the Group's 2022 statutory financial statements. Their report was unqualified and contained no statement under sections 498(2) or (3) of the Companies Act 2006. The financial statements for 2022 will be delivered to the Registrar of Companies by 31 December 2022.
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END
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November 28, 2022 02:00 ET (07:00 GMT)
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