Chairman's Statement
I have great pleasure in
presenting our Annual Report for the year ended 31 January
2024.
Alkemy Capital Investments plc
("Alkemy") was formed to invest in the
critical minerals sector. As a holding company our aim is to foster
the growth and expansion of our subsidiaries, steering them towards
operational excellence and sustainable practices.
Our strategy is to finance the
development of the individual businesses at the asset level through
project related debt, and institutional equity or strategic
partnerships.
Alkemy currently has three
investments, excluding the service entity ACSA, namely:
· Tees
Valley Lithium Limited ("TVL") which is actively developing the
UK's first Lithium Hydroxide processing facility at Wilton
International in Teesside, UK;
· Tees
Valley Graphite Limited ("TVG") which is seeking in partnership
with Syrah Resources to develop a commercial scale natural graphite
active anode material processing facility, also at Wilton
International; and
· Port
Hedland Lithium Pty Ltd ("PHL") which is potentially developing a
lithium sulphate refinery in Port Hedland, Western
Australia.
TVL, our most advanced project,
has received planning and environmental permissions for the
production of up to 96,000 tonnes per annum of battery grade
lithium hydroxide to supply key UK and international customers. We
have entered into feedstock and offtake arrangements with major
partners and established other key strategic partnerships and have
worked closely with government and regulatory bodies, reflecting
our commitment to becoming a leader in the low-carbon production of
battery-grade lithium chemicals.
The success of these strategic
initiatives and partnerships will place TVL at the forefront of
Europe's lithium refining sector, and we are looking to replicate
this success across other key critical battery minerals, including
graphite, with a view to developing a multi-minerals
strategy.
Despite recent market shifts,
European demand for lithium remains on an upward trajectory. With
the UK and EU's transition towards electric vehicles (EVs), there's
a forecasted demand for lithium that far exceeds current supply
capacity. The UK and European Commission's move to ban combustion
engine cars by 2035 is a significant catalyst, signalling a shift
towards a more sustainable and electric future. This policy change,
along with similar initiatives worldwide, is expected to fuel a
consistent and growing demand for lithium.
As Europe's car makers make the
switch to EVs to meet this burgeoning demand there is over 700GW of
gigafactory capacity either in construction or planned to provide
the batteries for these EVs. These gigafactories will
require over 650,000 tonnes of locally refined lithium per year in
the form of either hydroxide or carbonate depending on the type of
vehicle. Currently the UK and Europe has limited lithium refining
capacity. Building a European lithium processing facility will
reduce the regional dependence on China, which currently controls
90% of the world's lithium refining capacity.
Recognising the escalating demand
for lithium, Alkemy has been actively developing its lithium
refining portfolio through TVL and PHL. Alkemy's focus is not
just on meeting the immediate market needs but on establishing a
supply chain that is resilient, environmentally responsible, and
capable of adapting to the rapidly evolving energy
landscape.
Tees Valley
Lithium
TVL is currently developing a
lithium hydroxide monohydrate ("LHM") refinery at the Wilton
International Chemicals Park in Teesside, UK.
Since its inception, TVL has
achieved a number of key milestones and in late 2023 reached an
agreement in principle with Wogen Resources Limited to supply up to
20,000 tonnes of technical grade lithium carbonate feedstock per
annum for an initial period of five years. The supply will be
sufficient to fill the first of the proposed four trains at Wilton
producing around 24,000 tonnes of battery grade lithium hydroxide
or lithium carbonate equivalent.
Wogen is a leading international
trader of off-exchange specialty metals and minerals, with a long
history and well-established presence in the battery metals market
across Asia, the United States and Europe. Wogen has an active
trading book in lithium products procuring from an array of
producing countries and selling into the battery supply
chain.
In late 2023 Alkemy and TVL
appointed to their respective Board of Directors battery metals
supply chain expert Vikki Jeckell. Vikki's appointment comes at a
crucial time for Alkemy as it embarks on its ambitious growth plans
in the rapidly evolving battery materials sector. Vikki brings a
wealth of experience and expertise in supply chain management,
particularly within the battery materials industry. Her
extensive background includes five years at Johnson Matthey as Head
of Supply Chain Strategy for Battery Materials.
TVL, also in late 2023, awarded
preferred vendor status to industry leaders Jord Proxa and Eurodia
Industrie SAS. The completion of the
technology selection process and the awarding of preferred vendor
status to these two industry leaders is an important step forward
in the project's development.
TVL is currently in advanced
discussions with a number of offtake customers, including European
gigafactories and electric vehicle original equipment manufacturers
(OEMs). These customers are increasingly focussed on price,
transparency and low embedded carbon, when sourcing high grade
lithium products.
By sourcing low carbon feedstock
and powering an electrochemical refining process with offshore
wind, TVL aims to supply its UK and European customers with the
world's lowest-carbon lithium hydroxide.
TVL is currently in
discussions with a number of leading financial
institutions for the financing of its Wilton refinery. The
US$300m approximate capital cost of train 1 is expected to be
financed largely through green bonds (for which TVL will seek
accreditation) combined with a mix of debt, strategic equity
finance and grant funding, all at project level.
Having secured feedstock for its
first train at Wilton, a key component for these financing
discussions, TVL is in discussions with leading financial
institutions and strategic partners to obtain project-level funding
that will enable it to complete Front End Engineering Design (FEED)
and reach a final investment decision for the bond finance. TVL
continues to make steady progress in these discussions and will
update the market as soon as this key piece of funding is
secured.
Port Hedland
Lithium
In 2022, Alkemy announced the
launch of its strategy to build a lithium sulphate monohydrate
("LSM") refinery in Port Hedland, Australia, to serve as a refining
hub for Australian spodumene producers. PHL has secured an
allocation of land at the new Boodarie Strategic Industrial Area,
alongside other global leaders in the green industrial sector, to
facilitate the development of the Port Hedland LSM
refinery.
In August 2023, PHL announced the
completion of a Class 4 Feasibility Study for its LSM
refinery, each train of which will process
spodumene concentrate to produce 40,000 tonnes of lithium sulphate
annually. In addition, a Flora and Fauna baseline survey was
completed as part of the required environmental approvals. PHL will
continue to develop its LSM refinery, either standalone or in
conjunction with strategic partners, several of whom it is
currently in discussions with.
Building the Port Hedland LSM
refinery will provide Australian spodumene producers with a
complete mid-stream lithium refining solution with direct access to
the European market through TVL's LHM refinery in Teesside, UK.
Importantly, the Port Hedland LSM refinery will bring major
value-adding to the Pilbara region, with significant multiplier
benefits for the local community and the State of Western
Australia, whilst reducing the carbon footprint of the end-to-end
lithium battery cell supply chain to meet new European emissions
standards.
Tees Valley
Graphite
In January 2024, Alkemy announced
the launch of TVG and that TVG had entered into a non-binding
memorandum of understanding (MOU) with Syrah Resources (SYR:ASX)
("Syrah") for the establishment of a joint venture to develop a
commercial-scale natural graphite active anode material ("AAM")
processing facility ("Wilton AAM facility") located
at the Wilton International Chemicals Park in
Teesside, UK.
Syrah and TVG are currently
negotiating a binding joint venture agreement and will each
initially have a 50% interest in the joint venture. The Wilton AAM
facility is proposed to be supplied with natural graphite from
Syrah's Balama graphite project in Mozambique, the world's largest
integrated graphite operation.
The joint venture will combine
Syrah's global graphite development, operations and sales expertise
with Alkemy's UK development capabilities at the plug-and-play
Wilton International Chemicals Park, benefitting from
well-established infrastructure, essential utilities, and the
Teesside Freeport.
The joint venture will target an
initial production capacity of 20,000 tonnes AAM per annum for
supply into cell manufacturers and OEMs located in the UK and
European battery markets. The Wilton AAM facility is expected
to gain access to low-carbon offshore wind power providing 100%
certified green low-cost energy enabling it to produce a low carbon
product.
The Wilton AAM facility will
leverage the successful planning and approvals and local knowledge
gained by Alkemy portfolio company TVL and will aim to lower
construction costs, project delivery timeframes and bring forward
first production by replicating and upscaling the technology and
design used at Syrah's Vidalia AAM facility in Louisiana, United
States.
Syrah is a leading ex-China
supplier of quality graphite products and has significant practical
knowledge and know-how in the development of an AAM processing
facility, including in feasibility, detailed design and
engineering, process technologies, equipment selection and
procurement, construction management and product development,
product qualification and offtakes.
Syrah and TVG intend to enter into
a binding joint venture agreement, which will govern feasibility
and permitting workplans and schedules, budget and relevant
milestones associated with the Wilton AAM Facility. Ultimately,
development of the Wilton AAM facility is planned to be subject to
a final investment decision being unanimously approved by Syrah and
TVG following the completion of further technical studies, receipt
of approvals, entry into a shareholders' agreement, incorporation
of a project company, and financing and offtake commitments. Syrah
and TVG will each initially have a 50% interest in the joint
venture.
The Wilton AAM facility is
expected to be financed at project level through green bonds (for
which accreditation shall be sought), combined with a mix of debt,
strategic equity finance and grant funding (via domestic and
accessible international grant funding programmes).
In conclusion, I would like to
take this opportunity to thank our shareholders for their continued
support and look forward to reporting on our progress during the
course of 2024.
Paul
Atherley
Non-Executive
Chairman
30 May
2024
Strategic Report
The Directors present the
Strategic Report of the Group for the year ended 31 January
2024.
Review of business and future
developments
The Company was incorporated and
registered in England and Wales on 21 January 2021 and on 27
September 2021 was admitted to the Standard Listing segment of the
Official List of the UK Listing Authority and to trading on the
London Stock Exchange.
The Company was formed to
undertake an Acquisition of a controlling interest in a company or
business. Given their experience, the Board focused on the mining
and technology metals sectors.
On 25 February 2022, the Group
announced that it had entered into an exclusivity agreement (the
"Exclusivity Agreement") with Sembcorp Utilities (UK) Limited and a
heads of terms in respect of a proposed option to enter into a
lease over a brownfields site (the "Site") at Wilton International
(the "Agreement to Lease") and a long lease over the Site. Wilton
International is a well-established chemical engineering park
located in Teesside, a major Freeport in the UK. The entering into
the Exclusivity Agreement and incorporation of TVL constituted an
Acquisition and reverse takeover transaction under the rules of the
London Stock Exchange.
On 19 December 2022 the Group
announced that it had entered into the Agreement to Lease pursuant
to which an agreed form lease may be entered into by TVL, a
subsidiary of the Company, following the completion of certain
conditions precedent under the Agreement to Lease (the "Lease"). It
is intended that TVL will be the operating company that develops
the Project.
If the Board determines that the
opportunities presented by the development of the Site would be in
the best interests of shareholders, the Group, via TVL, intends to
enter into the Lease and to commence the design, finance and
construct of a plant that will produce lithium hydroxide
monohydrate from lithium sulphate or carbonate feedstock with a
view to becoming a key supplier to the UK and European battery cell
manufacturers (the "Project").
The principal activity of the
Company is to act as the holding company to TVL, an operating
subsidiary, which will enter into the Lease. The Company will
provide a parent company guarantee to Sembcorp in order to
guarantee the operating subsidiary's obligations under the Lease.
The Company aims to implement an operating strategy with a view to
generating value for its shareholders through the creation of a
lithium hydroxide monohydrate facility.
Key developments for the Group
during the course of the financial year included the
following:
· In
August 2023, PHL announced the completion of a Class 4 Feasibility
Study for its LSM refinery, each train of
which will process spodumene concentrate to produce 40,000 tonnes
of lithium sulphate annually. In addition, a Flora and Fauna
baseline survey was completed as part of the required environmental
approvals.
· In
late 2023 the Company reached an agreement in principle with
leading international trader Wogen Resources Limited to supply up
to 20,000 tonnes of technical grade lithium carbonate feedstock per
annum for TVL's LHM refinery for an initial period of five years.
The supply will be sufficient to fill the first of the proposed
four trains at Wilton producing around 24,000 tonnes of battery
grade lithium hydroxide or lithium carbonate equivalent.
· In
late 2023 Alkemy and TVL appointed to their respective Board of
Directors, battery metals supply chain expert Vikki Jeckell.
Vikki's extensive background includes five years at Johnson Matthey
as Head of Supply Chain Strategy for Battery Materials.
· TVL,
also in late 2023, awarded preferred vendor status to industry
leaders Jord Proxa and Eurodia Industrie SAS. The completion of the technology selection process and the
awarding of preferred vendor status to these two industry leaders
is an important step forward in the development of TVL's LHM
refinery.
· In
January 2024, Alkemy announced the launch of TVG and that TVG had
entered into a non-binding MOU with Syrah Resources for the
establishment of a joint venture to develop a commercial-scale
natural graphite and active anode material (AAM) processing
facility located at the Wilton
International Chemicals Park in Teesside, UK.
· In
February 2024 the Company announced the appointment of Zeus Capital
as Financial Adviser and Corporate Broker.
Alkemy was formed to invest in the critical minerals sector. As a
holding company its strategy is to foster the growth and expansion
of its subsidiaries, steering them towards operational excellence
and sustainable practices and to finance the development of these
individual businesses at the asset level through project related
debt, and institutional equity or strategic
partnerships.
TVL is currently in
discussions with a number of leading financial
institutions for the financing of its Wilton refinery. The
US$300m approximate capital cost of train 1 is expected to be
financed largely through green bonds (for which TVL will seek
accreditation) combined with a mix of debt, strategic equity
finance and grant funding, all at project level.
Having secured feedstock for its
first train at Wilton, a key component for these financing
discussions, TVL's primary short term focus is to consummate
discussions with leading financial institutions and strategic
partners to obtain project-level funding that will enable it to
complete Front End Engineering Design and reach a final investment
decision for the bond finance.
Key performance
indicators
When the Group enters into the
Lease, financial, operational, health, safety, and environmental
KPIs will become more relevant and reported upon as appropriate. As
a result, the Directors are of the opinion that analysis using
KPI's is not appropriate for an understanding of the business at
this time.
Principal risks and
uncertainties
The principal risks and
uncertainties currently faced by the Group are set out further in
the Risk Management Report on page 18.
Gender analysis
A split of the Directors, senior
managers and employees by gender at the end of the financial year
is as follows:
Male - 2 (directors)
Female - 2 (directors)
The Group recognises the need to
operate a gender diverse business. The Board will also ensure any
future employment takes into account the necessary diversity
requirements and compliance with all employment law. The Board has
experience and sufficient training and qualifications in dealing
with such issues to ensure they would meet all requirements. More
detail will be disclosed in the future annual reports once the
Company enters into the Lease and has completed its transition to
an operating company.
Corporate social responsibility
The Group aims to conduct its
business with honesty, integrity and openness, respecting human
rights and the interests of shareholders and employees. The Group
aims to provide timely, regular and reliable information on the
business to all its shareholders and conduct its operations to the
highest standards.
The Group strives to create a safe
and healthy working environment for the wellbeing of its staff and
to create a trusting and respectful environment, where all members
of staff are encouraged to feel responsible for the reputation and
performance of the Group.
The Group aims to establish a
diverse and dynamic workforce with team players who have the
experience and knowledge of the business operations and markets in
which we operate. Through maintaining good communications, members
of staff are encouraged to realise the objectives of the Group and
their own potential.
Corporate environmental responsibility
This will become more relevant
once the Company enters into the Lease and completes its transition
to an operating company. The Board contains personnel with a good
history of running businesses that have been compliant with all
relevant laws and regulations and there have been no instances of
non-compliance in respect of environment matters.
The Group's policy is to minimize
the risk of any adverse effect on the environment associated with
its activities with a thoughtful consideration of key areas such as
energy use, pollution, transport, renewable resources, health and
wellbeing. The Group also aims to ensure that its suppliers and
advisers meet with their legislative and regulatory requirements
and that codes of best practice are met.
Section 172(1) Statement - Promotion of the Group for the
benefit of the members as a whole
|
The Directors believe they have
acted in the way most likely to promote the success of the Group
for the benefit of its members as a whole, as required by s172 of
the Companies Act 2006.
|
The requirements of s172 are for
the Directors to:
1. Consider
the likely consequences of any decision in the long
term,
2. Act fairly
between the members of the Group,
3. Maintain a
reputation for high standards of business conduct,
4. Consider
the interests of the Group's employees,
5. Foster the
Group's relationships with suppliers, customers and others,
and
6. Consider
the impact of the Group's operations on the community and the
environment.
The pre-revenue nature of the
business is important to the understanding of the Group by its
members, employees and suppliers, and the Directors are as
transparent about the cash position and funding requirements as is
allowed under LSE regulations.
The application of the s172
requirements can be demonstrated in relation to the some of the key
decisions made during 2023 and after the year end:
· The
completion by PHL of a Class 4 Feasibility Study for its LSM
refinery
· The
execution of an agreement in principle with leading international
trader Wogen Resources Limited to supply up to 20,000 tonnes of
technical grade lithium carbonate feedstock per annum to TVL for an
initial period of five years
· The
appointment of battery metals supply chain expert Vikki Jeckell to
the boards of Alkemy and TVL
· The
awarding of preferred vendor status to industry leaders Jord Proxa
and Eurodia Industrie SAS
· The
launch of TVG and the signing of a non-binding MOU with industry
leader Syrah Resources for the establishment of a joint venture to
develop a commercial-scale natural graphite AAM processing
facility
· The
appointment of Zeus Capital Limited as financial adviser and
broker
The Board takes seriously its
corporate social responsibilities to the environment in which it
works which will become more relevant once the Company enters into
the Lease and completes its transition to an operating
company.
Paul Atherley
Non-Executive Chairman
30 May
2024
Board of Directors
Paul Atherley - Non-Executive Chairman
Paul Atherley is a highly
experienced senior resources executive with wide ranging
international and capital markets experience. He graduated as
mining engineer from Imperial College London and has held a number
of senior executive and board positions. Paul is currently Chairman of LSE listed Pensana
Plc which is establishing the world's first independent and
sustainable rare earth processing facility in the UK.
Paul is based in London and has
broad experience in raising debt and equity finance for resource
companies. He served as Executive Director of the investment
banking arm of HSBC Australia where he undertook a range of
advisory roles in the resources sector. He has completed a number of acquisitions and
financings of resources projects in Europe, China, Australia and
Asia.
Paul is a strong supporter of
Women in STEM and has established a scholarship which provides
funding for young women to further their education in science and
engineering.
Sam Quinn - Non-Executive Director
Sam Quinn is a corporate lawyer
with over fifteen years' worth of experience in the natural
resources sector, in both legal counsel and management positions.
Sam is a principal of Silvertree Partners, a London-based
specialist corporate services provider for the natural resources
industry. In addition Sam holds various other Non-Executive
Directorships and company secretarial roles for listed and unlisted
natural resources companies. During time spent in these roles, Sam
has gained significant experience in the administration, operation,
financing and promotion of natural resource companies.
Previously, Sam worked as the
Director of Corporate Finance and Legal Counsel for the Dragon
Group, a London based natural resources venture capital firm and as
a corporate lawyer for Jackson McDonald Barristers & Solicitors
in Perth, Western Australia and for Nabarro LLP in
London.
Helen Pein - Non-Executive Director
Helen Pein has over 30 years'
experience in the natural resources sector and currently serves as
a Director of Pan Iberia Ltd, Trident Royalties Plc and Panex
Resources Pty Ltd.
Helen was formerly a Director of
Pangea Exploration Pty Ltd, a company affiliated with Denham
Capital where she was part of the team directly responsible for the
discovery of a number of world-class gold and mineral sands deposit
across Africa. Helen is a recipient of the Gencor Geology
Award.
Vikki Jeckell - Non-Executive Director
Vikki Jeckell, appointed 20
November 2023, is a strategic procurement and supply chain expert
with over 15 years' worth of experience in the sector and is the
former the Head of Supply Chain Strategy Development & Control
for Battery Materials at Johnson Matthey. In this role Vikki, led
transformative initiatives, including the establishment of an
industry-leading responsible sourcing program and the formation of
strategic partnerships, contributing substantially to the company's
global supply chain capabilities.
Vikki has also worked as Head of
Supply Chain Development for hydrogen company LIFTE H2, held a
senior leadership role at Women in Green Hydrogen and in 2022 she
founded Supply Tactics Limited, a consultancy firm dedicated to
enhancing supply chain management within the batteries and hydrogen
sectors.
Vikki has provided expert
testimony to House of Commons committees on several occasions,
reflecting her commitment to help shaping policies within energy
transition. Vikki holds an LLB and an MBA.
Directors' Report
The Directors present their annual report together
with the financial statements and Auditor's Report for the year
ended 31 January 2024. The following information is not
presented in the Directors' report as it is presented in the
Strategic Report in accordance with s414C(11); Review of business,
Key Performance Indicators, Principal risks and uncertainties,
Gender analysis, Corporate social responsibility, Corporate
environmental responsibility, Section 172(1) statement.
Results and dividends
The results of the Group for the
year ended 31 January 2024 are set out in the Statement of
Comprehensive Income on
page 29. The Directors do not recommend the payment of a dividend
for the year.
Directors and Directors'
interests
The Directors who served during the year
to date are as follows:
Paul
Atherley
Sam
Quinn
Helen
Pein
Vikki Jeckell
(Appointed 20 November 2023)
The beneficial shareholdings of
the Board in the Company as at 31 January 2024 were as
follows:
|
|
Number of ordinary
shares
|
% of issued share
capital
|
Share
options
|
|
|
|
|
|
|
P Atherley
|
3,313,714
|
37.59%
|
250,000
|
|
S Quinn
|
446,428
|
5.06%
|
215,000
|
|
H Pein
|
25,000
|
0.28%
|
75,000
|
|
V Jeckell
|
-
|
-
|
175,000
|
Director incentives
Details on Directors remuneration
can be found in the Directors Remuneration report on page
15.
Substantial shareholders
As at the date of this Report, the
total number of issued Ordinary Shares with voting rights in the
Company was 8,814,851. The Company has been notified of the
following interests of 3 per cent or more in its issued share
capital as at the date of this report.
|
Shareholder
|
Number of ordinary
shares
|
% of issued share
capital
|
|
Paul Atherley
|
3,313,714
|
37.59%
|
|
Sam Quinn
|
446,428
|
5.06%
|
Corporate governance
The Group has set out its full
Corporate Governance Statement on page 23. The
Corporate Governance Statement forms part of this Directors' report
and is incorporated into it by cross reference.
Greenhouse gas
disclosures
As the Group remains in the early
stages of development without any current physical operations
across its portfolio of projects, it is not practical to obtain and
analyse emissions data for the Group operations. However,
given the minor level of physical operations in the year, and the
lack of any plant or office space, the carbon footprint and climate
change impact of the Group's operations are considered to be
negligible, and in any event below the 40 MWh threshold prescribed
for detailed emissions disclosures.
As such, the Group does not
consider it relevant to provide climate related disclosures under
the recently enacted TCFD guidelines, nor would determination of
the relevant emissions data be practical. Once the Group has
commenced the construction of physical premises across any of its
projects, and hence transitioned into an operating company, it will
revisit its position on climate disclosures accordingly.
Supplier payment policy
The Group's current policy
concerning the payment of trade creditors is to follow the CBI's
Prompt Payers Code (copies are available from the CBI, Centre
Point, 103 New Oxford Street, London WC1A 1DU).
The Group's current policy
concerning the payment of trade creditors is to:
· settle the terms of payment with suppliers when agreeing the
terms of each transaction;
· ensure that suppliers are made aware of the terms of payment
by inclusion of the relevant terms in contracts; and
· pay
in accordance with the Group's contractual and other legal
obligations.
Financial instruments and risk
management
The Group is exposed to a variety
of financial risks and the impact on the Group's financial
instruments are summarised in the Risk Management Report. Details
of the Group's financial instruments are disclosed in note 17 to
the financial statements.
Directors' insurance
The Group has implemented Directors
and Officers Liability Indemnity Insurance.
Events after the reporting year
On 26 February 2024 the Group
appointed Zeus Capital as financial advisor and broker.
Going concern
As part of their assessment of
going concern, the Directors have prepared cash forecasts to
determine the funding requirements of the business over the 18
months from the reporting date. Cash requirements over this period
have been projected in the range of a £2m minimum (decelerated
project development case) to £9m maximum (accelerated project
development case) depending on the level of technical project
development work being undertaken, as determined by funding
availability.
As at the date of this report, the
Directors are considering a variety of funding options from
numerous parties to consider the option best suited to balancing
the immediate cash flow needs of the business and desire to
accelerate the project development timeframe against the need to
avoid unnecessary dilution of the shareholders during a period of
depressed equity market prices. Options ranging
from:
· project level debt or strategic equity which would provide
sufficient funding to accelerate the project development program
over the period of consideration, including the Wilton LHM refinery
train 1 FEED study alongside development of the Port Hedland LSM
refinery and TVG graphite projects, as well as general working
capital requirements;
· market equity placings to secure working capital funding
needs whilst project development funding opportunities continue to
be assessed;
· convertible lending facilities which may act as a hybrid of
working capital and project development funding, allowing
progression of project development at a less accelerated rate that
would be the case under a more substantial project lending
facility;
· any
combination of the above.
The Board remains in detailed
discussions on the above funding opportunities and anticipates
concluding this process in the near term.
The Directors are therefore
reasonably confident that the necessary funding will be secured, as
and when required, by executing on one of the above options under
consideration, such that the Directors have a reasonable
expectation that the Group will continue in operational existence
for the next 12 months. However as successful execution of
one of the above fundraising options cannot be assured, a material
uncertainty exists which may cast significant doubt on the ability
of the company and group to continue as a going concern and realise
its assets and discharge its liabilities in the normal course of
business.
Accordingly, the Directors believe
that as at the date of this report it is appropriate to continue to
adopt the going concern basis in preparing the financial
statements.
Disclosure of information to
Auditor
The
Directors confirm that:
· So
far as each Director is aware, there is no relevant audit
information of which the company's auditor is unaware;
and
· The
Directors have taken all steps that they ought to have taken as
Directors in order to make themselves aware of any relevant audit
information and to establish that the auditor is aware of that
information.
Auditor
A resolution proposing the
re-appointment of Crowe U.K. LLP as auditor will be put to
shareholders at the Annual General Meeting.
This Directors' Report has been
approved by the Board and signed on its behalf by:
Paul Atherley
Non-Executive Chairman
30 May
2024
Directors' Remuneration Report
Until the Lease is entered into
and the Company completes its transition to an operating company,
the Company will not have a separate remuneration committee. The
Board will instead periodically review the quantum of Directors'
fees, taking into account the interests of shareholders and the
performance of the Company and the Directors.
The Directors who held office at 31 January
2024 are summarised as follows:
|
Name of Director
|
Position
|
|
P Atherley
|
Non-Executive Chairman
|
|
S Quinn
|
Non-Executive Director
|
|
H Pein
|
Non-Executive Director
|
|
V Jeckell
|
Non-Executive Director
|
Directors'
Letters of appointment
Letter of
Appointment - Paul Atherley
Pursuant to a letter of
appointment dated 21 September 2021 between the Company and Mr
Atherley, Mr Atherley is engaged as Chairman with fees of £24,000
per annum. The appointment can be terminated by either party on
three months written notice.
Letter of
Appointment - Sam Quinn
Pursuant to a letter of
appointment dated 21 September 2021 between the Company and Sam
Quinn, Mr Quinn is engaged as a Non-Executive Director with fees of
£18,000 per annum. In addition Sam Quinn will be remunerated
for additional work performed for the Company which is outside the
scope of his service agreements, including consultancy and
management services, at a rate of £1,000 per day subject to a
maximum of 3 days per calendar month. The appointment can be
terminated by either party on three months written
notice.
Letter of
Appointment - Helen Pein
Pursuant to a letter of appointment
dated 21 September 2021 between the Company and Helen Pein, Helen
is engaged as a Non-Executive Director with fees of £18,000 per
annum. In addition Helen Pein will be remunerated for additional
work performed for the Company which is outside the scope of her
service agreements, including project due diligence, consultancy
and management services at a rate of £1,000 per day subject to a
maximum of 3 days per calendar month. The appointment can be
terminated by either party on three months written
notice.
Letter of
Appointment - Vikki Jeckell
Pursuant to a letter of
appointment dated 20 November 2023 between the Company and Vikki
Jeckell, Vikki is engaged as a Non-Executive Director with fees of
£18,000 per annum. The appointment can be terminated by either
party on three months written notice.
Pursuant to a consultancy agreement
dated 21 September 2021 between the Company and Selection Capital
Investments Limited, Paul Atherley is engaged as Key Personnel (as
defined under the consultancy agreement) contracted to provide
services to the Company in consideration of payment of £7,000 per
month.
Pursuant to a consultancy agreement
dated 1 October 2021 between the Company and Lionshead Consultants
Limited ("Lionshead"), a company of which Sam Quinn is a director
and sole shareholder, Lionshead is contracted to provide services
to the Company in consideration of payment of £5,000 per
month.
Pursuant to a consultancy agreement
dated 22 September 2022 between Tees Valley Lithium Limited and
Supply Tactics Limited ("Supply Tactics"), a company of which Vikki
Jeckell is a director and 50% shareholder, Supply Tactics is
contracted to provide services to TVL in consideration of payment
of £20,000 per month.
Terms of appointment
The services of the Directors are provided
under the terms of letters of appointments, as follows:
|
Director
|
|
Year of
appointment
|
Number of periods
completed
|
Date of current engagement
letter
|
|
|
|
|
|
|
|
P Atherley
|
|
2021
|
3
|
21
September 2021
|
|
S Quinn
|
|
2021
|
3
|
21
September 2021
|
|
H Pein
|
|
2021
|
3
|
21
September 2021
|
|
V Jeckell
|
|
2023
|
1
|
20
November 2023
|
Consideration of shareholder views
The Board considers shareholder
feedback received. This feedback, plus any additional feedback
received from time to time, is considered as part of the Group's
annual policy on remuneration.
Policy for
salary reviews
The Group may from time to time
seek to review salary levels of Directors, taking into account
performance, time spent in the role and market data for the
relevant role. It is intended that there will be a salary review
during the next year as the Company transitions to an operating
company.
Policy for
new appointments
It is not intended that there will
be any new appointments to the Board in the near term. It is
intended that a full review of the Board will take place on an
annual basis following the Company's full transition to an
operating Company following the entering into of the
Lease.
Directors' emoluments and compensation
(audited)
Remuneration attributed to the
Directors' during the year ended 31 January 2024 was as follows
(all figures are stated in GBP):
Year Ended 31 January
2024:
|
Director
|
|
Directors fees
|
Salary/Consulting fees
|
Total remuneration
|
|
|
|
|
|
|
|
P Atherley
|
31 Jan 2024
|
59,765
|
84,000
|
143,765
|
|
|
|
|
|
|
|
S Quinn
|
31 Jan 2024
|
44,824
|
60,000
|
104,824
|
|
|
|
|
|
|
|
H Pein
|
31 Jan 2024
|
18,000
|
-
|
18,000
|
|
|
|
|
|
|
|
V Jeckell
|
31 Jan 2024
|
6,000
|
40,000
|
46,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
31 Jan 2024
|
128,589
|
184,000
|
312,589
|
Year Ended 31 January
2023:
|
Director
|
|
Directors fees
|
Salary/Consulting fees
|
Total remuneration
|
|
|
|
|
|
|
|
P Atherley
|
31 Jan 2023
|
24,000
|
69,000
|
93,000
|
|
|
|
|
|
|
|
S Quinn
|
31 Jan 2023
|
18,000
|
48,600
|
66,600
|
|
|
|
|
|
|
|
H Pein
|
31 Jan 2023
|
18,000
|
-
|
18,000
|
|
|
|
|
|
|
|
Total
|
31 Jan 2023
|
60,000
|
117,600
|
177,600
|
Director incentives
In the year ended 31 January 2024,
325,000 options were granted to Directors (2023: 390,000). As at 31
January 2024, 715,000 (2023: 390,000) options issued to Directors
were outstanding.
Directors'
Remuneration Policy
Pursuant to the Directors' letters
of appointment, as described above, the Directors receive fees, all
payable monthly in arrears. There is currently a long-term
incentive plan in operation for the Directors by way of share
incentive options.
Based on the foregoing, the
remuneration policy of the Group can be summarised as
follows:
|
How
the element supports our strategic objectives
|
Operation of the element
|
Maximum potential payout and payment at
threshold
|
Performance measures used, weighting and time period
applicable
|
|
|
|
|
|
|
Base
Pay
|
|
|
|
|
Recognises the role and the
responsibility for the delivery of strategy and results
|
Paid in 12 monthly
instalments
|
Contractual sum
|
None
|
|
|
|
|
|
|
Pensions
|
|
|
|
|
None
|
n/a
|
n/a
|
n/a
|
|
|
|
|
|
|
Short term incentives
|
|
|
|
|
None
|
n/a
|
n/a
|
n/a
|
|
|
|
|
|
|
Long
term incentives
|
|
|
|
|
Aligns directors and shareholders in
share price and project development
|
Share options issued
|
TBC
|
1/3 of the option vest immediately;
1/3 of the options vest following the completion of the fund
raising to fund construction of the first 24,000 tpa capacity at
TVL's Lithium Hydroxide project at Wilton International; and 1/3 of
the options vest following commissioning of the first 24,000 tpa
capacity at the project.
|
A remuneration committee is
expected to be appointed once the Lease is entered into, to
consider an appropriate level of Directors'
remuneration.
Although there is no formal
Director shareholding policy in place, the Board believe that share
ownership by Directors strengthens the link between their personal
interests and those of shareholders.
No views were expressed by
shareholders during the year on the remuneration policy of the
Group.
Other matters
The Group does not currently have
any short-term incentive schemes in place for any of the
Directors.
The Group does not have any
pension plans for any of the Directors and does not pay pension
amounts in relation to their remuneration.
This Directors' Remuneration Report
has been approved by the Board and signed on its behalf
by:
Paul Atherley
Non-Executive Chairman
30 May
2024
Risk Management Report
The Group has undertaken an
evaluation of the risks it is exposed to which are summarised as
follows:
There is no
assurance that the Group will determine that the Project is
economically viable and the Lease may not be entered
into
The success of the Group's business strategy is
dependent on its ability to identify sufficient suitable
acquisition opportunities. Whist the Group believes that the
Project presents a good opportunity, it is still in the process of
evaluating such opportunity. If the Group fails to complete the
development of the Project or enter into the Lease it may be left
with substantial unrecovered transaction costs, potentially
including fees, legal costs, accounting costs, due diligence or
other expenses. Furthermore, even if an agreement is reached
relating to the Project, the Group may fail to complete the Project
for reasons beyond its control. Any such event will result in a
loss to the Group of the related costs incurred, which could
materially adversely affect subsequent attempts to identify and
acquire another target business.
Development
and production activities are capital intensive and inherently
uncertain in their outcome and the Group may not make a return on
its investments, recover its costs or generate cash
flows
The construction of industrial facilities are
capital intensive. In addition, environmental damage could greatly
increase the cost of operations, and various operating conditions
may adversely and materially affect the levels of production. These
conditions include delays in obtaining governmental approvals or
consents, insufficient storage or transportation capacity or a
change in demand for the product. While diligent supervision and
effective maintenance operations can contribute to maximising
production rates over time, production delays and declines from
normal operations cannot be eliminated and may adversely and
materially affect the revenues, cash flow, business, results of
operations and financial resources and condition of the Company and
its subsidiary undertakings from time to time (the
"Group").
Currently the
Group has insufficient capital to meet the funding requirements for
the development of the Project
As the Group is still evaluating the Project,
it is still considering the associated costs with the development
of the Project and the amount of additional capital that may be
required.
The Group will need to raise additional funding
in the near term to meet its working capital requirements for the
next twelve months. In addition to working capital needs, the
Group is of the opinion that if it decides to proceed with the
Project, the Group does not have sufficient capital in order to
complete the construction of the Project and hence will be required
to raise additional funds in support of project development
expenditure requirements.
Based on a high-level preliminary review of
expected costs the Directors anticipate that a total of
approximately £250 - 300 million (excluding financing costs) of
additional equity and / or debt financing will be required and
subject to the outcome of the feasibility and engineering studies
the Group's confirmation to proceed with the Project to fund the
evaluation, development and construction of the Project. The Group
intends to raise the development costs of the Project
by:
(a) Debt
finance - Any debt finance in respect of the Group for the purposes
of developing and completing the Project, is likely to be subject
to customary conditions precedent. As of the date of this document,
the Group has not yet begun the formal process of seeking third
party debt financing in respect of the Project, however the Group
expects to carry out this process immediately following completion
of the feasibility studies and the Group's confirmation to proceed
with the Project.
(b) Equity
finance - In relation to any equity financing, the Group expects to
engage advisers to assist the Group with its equity funding
requirements. The Group has not yet begun the formal process of
seeking formal engagement with advisers for equity financing in
respect of the Project, however the Group expects to carry out this
process in due course following completion of the feasibility and
engineering studies.
Based on the Group's informal
discussions with potential debt and equity providers to date, the
Directors are confident that within the period of twelve months
following the date of this document the Group will be able to
secure all the necessary finance required to develop and complete
the Project.
The failure to secure additional
financing or to secure such additional financing on terms
acceptable to the Group could have a material adverse effect on the
continued development or growth of the acquired business,
prospects, and the financial condition and results and operations
of the Group and could, ultimately lead to the insolvency of the
Company or Group.
The
price of lithium hydroxide is affected by factors beyond the
Group's control
If the Group proceeds with the
Project, and the market price of lithium hydroxide decreases
significantly for an extended period of time, the ability for the
Group to attract finance and ultimately generate profits could be
adversely affected. Numerous external factors and industry factors
that are beyond the control of the Group that affect the price of
lithium hydroxide include:
· industrial demand;
· levels of production;
· rapid short term changes in supply and demand because of
speculative or hedging activities; and
· global or regional political or economic events.
The price at which the Group can
sell any lithium hydroxide it may produce in the future will
therefore be relevant to the future revenues that can be generated
by the Group and its ability to finance the Company going forward
and any adverse effects on such price could have a material adverse
effect on the Group's business, financial performance, results of
operations and prospects.
The Group may be unable to hire or retain personnel required
to support the Group going forward
The Group's ability to compete
depends upon its ability to retain and attract highly qualified
management and technical personnel. Following completion of the
Project, the Group will evaluate the personnel of the acquired
business and may determine that it requires increased support to
operate and manage the acquired business in accordance with the
Group's overall business strategy. There can be no assurance that
existing personnel of the acquired business will be adequate or
qualified to carry out the Group's strategy, or that the Group will
be able to hire or retain experienced, qualified employees to carry
out the Group's strategy.
During the development of the Project, the Group may be
unable to acquire or renew necessary concessions, licenses, permits
and other authorisations
The Project will require certain
concessions, licences, permits and other authorisations to carry
out its operations. Any delay in obtaining or renewing a license,
permit or other authorisation may result in a delay in investment
or development of a resource and may have a materially adverse
effect on the acquired business' results of operations, cash flows
and financial condition. In addition, any concessions, licences,
permits and other authorisations of the Project may be suspended,
terminated or revoked if it fails to comply with the relevant
requirements.
Failure to obtain (and shortages and disruptions in lead
times to deliver) certain key inputs may adversely affect the
Group's operations during the development of the
Project
During the development of the
Project, the Group's inability to timely acquire feedstock,
strategic consumables, raw materials, and processing equipment
could have an adverse impact on any results of operations and
financial condition. Periods of high demand for supplies can arise
when availability of supplies is limited. This can cause costs to
increase above normal inflation rates. Interruption to supplies or
increase in costs could adversely affect the operating results and
cash flows of the Group during the development of the
Project.
This Risk Management Report has
been approved by the Board and signed on its behalf by:
Paul Atherley
Non-Executive Chairman
30 May
2024
Corporate Governance
Statement
The Group observes the
requirements of the Quoted Company Alliance corporate governance
code (the "QCA Code") and is in compliance with the QCA Code, save
as set out below:
1. Given the composition of
the Board, certain provisions of the QCA Code are considered by the
Board to be inapplicable to the Company. Specifically, the Company
does not consider it necessary to have a senior independent
Director and the Board will, at the outset, consist of three
non-executive Directors and one non-executive chairman.
2. The QCA Code also
recommends the submission of Directors for re-election at annual
intervals. The Company Articles of Association require all
directors to retire by rotation and seek reappointment by the
shareholders at a general meeting every two years.
In the future, the Directors may
seek to transfer from a Standard Listing to either a Premium
Listing or other appropriate stock market (although there can be no
guarantee that the Group will fulfil the relevant eligibility
criteria at the time and that a transfer to a Premium Listing or
other appropriate stock market will be achieved). However, in
addition to or in lieu of a Premium Listing, the Group may
determine to seek a listing on another stock exchange. Following
such a Premium Listing, the Group would comply with the continuing
obligations contained within the Listing Rules and the Disclosure
and Transparency Rules in the same manner as any other group with a
Premium Listing.
The Group does not have
nomination, remuneration, audit or risk committees. The Board as a
whole will instead review its size, structure and composition, the
scale and structure of the Directors' fees (taking into account the
interests of shareholders and the performance of the Group), take
responsibility for the appointment of auditors and payment of their
audit fee, monitor and review the integrity of the Group's
financial statements and take responsibility for any formal
announcements on the Group's financial performance. Following entry
into the Lease, the Board intends to put in place nomination,
remuneration, audit and risk committees.
The Board has a share dealing code
that complies with the requirements of the Market Abuse
Regulations. All persons discharging management responsibilities
(comprising only the Directors) comply with the share dealing
code.
Carbon emissions
The Group currently has no trade,
and two employees other than the Directors and has no office.
Therefore, the Group has minimal carbon emissions and it is not
practical to obtain emissions data at this stage.
Board of Directors
The Group has a Board it believes is well
suited for the purposes of implementing its business strategy,
combining skill sets for the assessment of investment and
acquisition of royalties and streams in the mining
sector.
The Directors are responsible for carrying out
the Group's objectives, implementing its business strategy and
conducting its overall supervision. Acquisition, divestment and
other strategic decisions will all be considered and determined by
the Board.
The Board will provide leadership within a
framework of prudent and effective controls. The Board will
establish the corporate governance values of the Group and will
have overall responsibility for setting the Group's strategic aims,
defining the business plan and strategy and managing the financial
and operational resources of the Group.
The Board aims to hold meetings on a quarterly
basis and is regularly in contact to discuss prospective
acquisition opportunities.
The Articles of the Company contain express
provisions relating to conflicts of interest in line with the
Companies Act 2006.
Shareholder communications
The Group uses its corporate
website (www.alkemycapital.co.uk) to ensure that the latest
announcements, press releases and published financial information
are available to all shareholders and other interested
parties.
The AGM is used to communicate
with both institutional shareholders and private investors and all
shareholders are encouraged to participate. Separate resolutions
are proposed on each issue so that they can be given proper
consideration and there is a resolution to approve the Annual
Report and Accounts. Notice of the AGM is
sent to shareholders at least 21 days before the meeting and the
results are announced to the London Stock Exchange and are
published on the Company's website.
Paul Atherley
Non-Executive Chairman
30 May
2024
Directors' Responsibility Statement
The Directors are responsible for
preparing the Annual Report and the Financial Statements in
accordance with applicable law and regulations.
Company law requires the Directors
to prepare Financial Statements for each financial year. Under that
law the Directors have elected to prepare the financial statements
in accordance with UK Adopted International Accounting Standards
("IAS"). Under company law the Directors
must not approve the financial statements unless they are satisfied
that they give a true and fair view of the state of affairs of the
Group and of the profit or loss for that period.
In preparing these financial
statements, the Directors are required to:
1. select
suitable accounting policies and then apply them
consistently;
2. make
judgements and accounting estimates that are reasonable and
prudent;
3. state
whether applicable IASs as adopted by the United Kingdom have been
followed, subject to any material departures disclosed and
explained in the financial statements; and
4.
prepare the financial statements on the going
concern basis unless it is inappropriate to presume that the
Company and Group will continue in
business.
The Directors are responsible for
keeping adequate accounting records that are sufficient to show and
explain the Group's transactions and disclose with reasonable
accuracy at any time the financial position of the Group and enable
them to ensure that the Financial Statements and the Directors
Remuneration Report comply with the Companies Act 2006. They are
also responsible for safeguarding the assets of the Company and
Group,, and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
They are also responsible to make
a statement that they consider that the Annual Report and Financial
Statements, taken as a whole, is fair, balanced, and understandable
and provides the information necessary for the shareholders to
assess the Group's position and performance, business model and
strategy.
The Directors are responsible for
the maintenance and integrity of the corporate and financial
information included on the Company's website. Legislation in the
United Kingdom. governing the preparation and dissemination of the
Financial Statements may differ from legislation in other
jurisdictions.
Directors' responsibility statement pursuant to disclosure
and Transparency Rule
Each of the Directors, whose names
and functions are listed within the Board of Directors confirm
that, to the best of their knowledge:
1. the
financial statements are prepared in accordance with International
Financial Reporting Standards (IFRS) as adopted by the United
Kingdom, give a true and fair view of the assets, liabilities,
financial position and loss of the Company and Group;
and
2. the Annual
Report and financial statements, including the Strategic Report,
includes a fair review of the development and performance of the
business and the position of the Company and Group, together with a
description of the principal risks and uncertainties that they
face.
Approved by the Board on 30 May
2024
Paul Atherley
Non-Executive Chairman
Independent
auditor's report to the members of Alkemy Capital
Investments Plc
Opinion
We have audited the financial statements of
Alkemy Capital Investments Plc (the "company")
and its subsidiaries (the 'group') for the year ended 31 January
2024 which comprise consolidated statement of
comprehensive income, consolidated and company statement of
financial position, consolidated and company statement of changes
in equity, consolidated and company statement of cash flows,
and notes to the financial statements, including significant
accounting policies. The financial reporting framework that has
been applied in the preparation of the group financial statements
is applicable law and UK-adopted international accounting
standards.
In our opinion:
· the financial
statements give a true and fair view of the state of the group's
and of the company's affairs as at 31 January 2024 and of the
Group's loss for the year then ended;
· the financial
statements have been properly prepared in accordance with UK-adopted international accounting standards;
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 the 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 public interest 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 the section
headed Going Concern at note 2 of the financial statements, which
details factors the Group has considered when assessing the going
concern position. As detailed in note 2 the uncertainty surrounding
the availability of funds to finance the commercial development of
the group's projects indicates the existence of a material
uncertainty that may cast significant doubt on the Group's ability
to continue as a going concern realise its
assets and discharge its liabilities in the normal course of
business. Our opinion is not modified in
respect of this matter.
In auditing the financial
statements, we have concluded that the directors' 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 entity's ability to continue to adopt the going
concern basis of accounting included:
· Discussions with management in relation to the future plans
of the Group and Company.
· Reviewing activity after the year end to the date of signing
the financial statements.
· Reviewing the directors' going concern assessment including
the worst-case scenario cash flow forecast that covers at least 12
months from the date we expect to sign the audit report.
· Assessing the cash flow requirements of the Group and Company
based on forecast capital and administrative expenditure for 12
months after the date of signing.
· Understanding what forecast expenditure is committed and what
could be considered discretionary.
· Considering the liquidity of existing assets of the statement
of financial position.
· Considering the options available to management for further
fundraising, or additional sources of finance.
· Considering potential downside scenarios and the resultant
impact on funding requirements and the Company and Group's ability
to raise such funds.
· Considered the likelihood of receipt of
fundraising.
· Evaluating the reliability of the data underpinning the
forecast cash flows.
Our responsibilities and the
responsibilities of the directors with respect to going concern are
described in the relevant sections of this report.
Overview
of our audit
approach
Materiality
In planning and performing our audit we applied the
concept of materiality. An item is considered material if it could
reasonably be expected to change the economic decisions of a user
of the financial statements. We used the concept of materiality to
both focus our testing and to evaluate the impact of misstatements
identified.
Based on our professional judgement, we determined
overall materiality for the financial statements as a whole to be
£100,000 (2023: £125,000), based on 5% of loss before taxation.
Materiality for the parent company financial statements as a whole
was set at £46,000 (2023: £28,000) based
on approximately 5% of loss before taxation. We consider this basis
of determining materiality to be appropriate for a holding entity
of this nature.
We use a different level of
materiality ('performance materiality') to determine the extent of
our testing for the audit of the financial statements.
Performance materiality is set based on the audit materiality as
adjusted for the judgements made as to the entity risk and our
evaluation of the specific risk of each audit area having regard to
the internal control environment. Performance materiality was set at 70% of materiality for the
financial statements as a whole, which equates to £70,000
(2023: £87,500) for the group and
£32,200 (2023: £35,000) for the
parent.
Where considered appropriate performance materiality
may be reduced to a lower level, such as, for related party
transactions and directors' remuneration.
We agreed with the Board o report to it all identified errors
in excess of £5,000 (2023: £6,250). Errors
below that threshold would also be reported to it if, in our
opinion as auditor, disclosure was required on qualitative
grounds.
Overview
of the scope of our audit
Our audit was scoped by obtaining
an understanding of the group and its environment, including the
group's system of internal control, and assessing the risks of
material misstatement in the financial statements. We also
addressed the risk of management override of internal controls,
including assessing whether there was evidence of bias by the
directors that may have represented a risk of material
misstatement.
We identified two significant
components, being the parent company and its principal operating
subsidiary, Tees Valley Lithium Limited. The base of operations is
in the United Kingdom, which is where the head office is. Our group
audit strategy focused on the significant components which were
subject to a full scope audit.
The group is accounted for from
one central location, the United Kingdom. The audit of the group
was performed by Crowe in the UK. The consolidation was also
subject to a full scope audit performed by the Group audit
team.
The remaining components of the
group were considered non-significant. All balances material to the
group were audited and the remaining balances subject to analytical
procedures by the Crowe audit team.
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.
|
Key audit
matter
|
How our scope
addressed the key audit matter
|
|
Capitalisation of intangible assets
The group continues to invest in the planned construction of
LHM refinery in Wilton International Chemicals Park,
Teeside.
Determining whether the cost of development meets
capitalisation criteria requires significant judgement based on the
requirements of IAS 38 Intangible Assets.
We therefore consider the inappropriate capitalisation of
development costs to be a key audit matter. Refer to notes 2 and
10.
|
We reviewed the accounting
policies adopted by management in relation to the intangible assets
and whether they are consistent with IFRS and meet the criteria as
set out in IAS38, para 31.
We obtained an understanding of the design and
implementation of systems and controls relevant to impairment
assessments of intangibles.
We tested a sample of capitalised invoices to
ensure that these were capital in nature and related to the
underlying asset.
Based on our work performed, we concluded that
the carrying value of the intangible assets is reasonable after
proposed audit adjustments.
|
Our audit procedures in relation
to these matters were designed in the context of our audit opinion
as a whole. They were not designed to enable us to express an
opinion on this matter individually and we express no such
opinion.
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 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 the part of the directors'
remuneration report to be audited has been properly prepared in
accordance with the Companies Act 2006.
In our opinion based on the work undertaken in the
course of our 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 directors' report
and strategic 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 the 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 by the group and company, or returns
adequate for our audit have not been received from branches not
visited by us; or
· the group and company
financial statements and the part of the directors' remuneration
report to be audited 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
the directors for the financial
statements
As explained more fully in the directors'
responsibilities statement set out on page 23, the directors are
responsible for the preparation of the 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 financial statements, the directors
are responsible for assessing the group's and the 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 legal and regulatory frameworks that are applicable to the
Group and company and the procedures in place for ensuring
compliance in the jurisdiction where the Group and company operate,
focusing on those laws and regulations that have a direct effect on
the determination of material amounts and disclosures in the
financial statements. The laws and regulations we considered in
this context were the Companies Act 2006 and relevant taxation
legislation.
We assessed the nature of the
group's business, the control environment and performance to date
when evaluating the incentives and opportunities to commit
fraud.
We identified the greatest risk of
material impact on the financial statements from irregularities,
including fraud, to be the override of controls by management to
manipulate financial reporting and misappropriate funds. Our
procedures to address the risk of management override
included:
· enquiries of management about their own identification and
assessment of the risks of irregularities;
· review of the system for the generation, authorisation and
posting of journal entries;
· obtaining supporting evidence for a risk-based sample of
journals, derived using a data analytics tool;
· audit
of significant transactions outside the normal course of business,
or those that appear unusual;
· considering audit adjustments identified from our audit work
for evidence of bias in reporting;
· considering significant estimates and judgements made by
management for evidence of bias, and performing retrospective
reviews where applicable;
· reviewing the other information presented in the annual
report for fair representation and consistency with the audited
financial statements and the information available to us as the
auditors.
· Review of minutes of board and committee meetings throughout
the period and enquiries of management as to their identification
of any non-compliance with laws or regulations, or any or potential
claims of fraud;
Owing to the inherent limitations of an audit, there
is an unavoidable risk that some material misstatements of the
financial statements may not be detected, even though the audit is
properly planned and performed in accordance with the ISAs (UK).
The potential effects of inherent limitations are particularly
significant in the case of misstatement resulting from fraud
because fraud may involve sophisticated and carefully organized
schemes designed to conceal it, including deliberate failure to
record transactions, collusion or intentional misrepresentations
being made to us.
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.
Other matters which we are required to
address
We were appointed by Board on 27
March 2022 to audit the financial statements for the period ending
31 January 2022. Our total uninterrupted period of
engagement is three years, covering the periods
ending 31 January 2022 to 31 January 2024.
The non-audit services prohibited by the FRC's
Ethical Standard were not provided to the group or the company and
we remain independent of the group's and the company in conducting
our audit.
Our audit opinion is consistent with the additional
report to the Board.
Use
of our
report
This report is made solely to the Group's and
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 group's and 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 group
and company and the group's and company's members as a body, for
our audit work, for this report, or for the opinions we have
formed.
Matthew Stallabrass
Senior Statutory
Auditor
For and on behalf of
Crowe U.K. LLP
Statutory Auditor
London
30
May 2024
Consolidated Statement of Comprehensive
Income
for
the year to 31 January 2024
|
|
|
|
|
|
|
Notes
|
Year to 31 January
2024
|
Year to 31
January
2023
|
|
|
|
£
|
£
|
|
Continuing operations
|
|
|
|
|
Other income
|
|
1,247
|
-
|
|
Administrative expenses
|
4
|
(1,454,195)
|
(1,298,002)
|
|
Project Development
expenses
|
4
|
(634,288)
|
(1,298,011)
|
|
Business Development
costs
|
|
(1,852)
|
(12,866)
|
|
Finance costs
|
|
(1,697)
|
(1,536)
|
|
Foreign exchange gains
(losses)
|
|
(5,215)
|
(34,344)
|
|
Loss before taxation
|
|
(2,096,000)
|
(2,644,759)
|
|
|
|
|
|
|
Taxation
|
7
|
325,018
|
-
|
|
Loss
after taxation
|
|
(1,770,982)
|
(2,644,759)
|
|
|
|
|
|
|
Other Comprehensive Income
|
|
|
|
|
Foreign exchange differences on
translation of overseas subsidiaries
|
|
(2,306)
|
(2,645)
|
|
Total Comprehensive loss for the year
|
|
(1,773,288)
|
(2,647,404)
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
Basic and diluted earnings per share
(pence)
|
8
|
(23.43p)
|
(40.24p)
|
The notes on pages 38 to 55 are an
integral part of these financial statements.
Consolidated Statement of Financial
Position
As
at 31 January 2024
|
|
|
|
|
|
|
Notes
|
31 January
2024
|
31 January
2023
|
|
|
|
£
|
£
|
|
|
|
|
|
|
Non
Current Assets
|
|
|
|
|
Intangibles - Project development
costs
|
10
|
317,089
|
298,813
|
|
Total Non Current Assets
|
|
317,089
|
298,813
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
Trade and other
receivables
|
12
|
126,303
|
212,125
|
|
Cash and cash equivalents
|
13
|
45,458
|
12,356
|
|
Total Current Assets
|
|
171,761
|
224,481
|
|
|
|
|
|
|
Total Assets
|
|
488,850
|
523,294
|
|
|
|
|
|
|
Equity
|
|
|
|
|
Share Capital
|
15
|
176,297
|
144,000
|
|
Share Premium
|
15
|
4,261,626
|
2,413,243
|
|
Share Based Payments
|
15
|
259,771
|
63,221
|
|
Foreign Exchange Reserve
|
|
(4,951)
|
(2,645)
|
|
Retained Earnings
|
|
(5,213,391)
|
(3,442,409)
|
|
Total Equity
|
|
(520,648)
|
(824,590)
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
Trade and other payables
|
14
|
907,209
|
1,021,595
|
|
Short Term Borrowings
|
17
|
102,289
|
326,289
|
|
Current and Total Liabilities
|
|
1,009,498
|
1,347,884
|
|
|
|
|
|
|
Total Equity and Liabilities
|
|
488,850
|
523,294
|
|
|
|
|
|
The notes on pages 38 to 55 are an
integral part of these financial statements.
The financial statements were
approved and authorised for issue by the Board on 30 May 2024.
Paul Atherley
Director
Alkemy Capital Investments plc
Consolidated Statement of Changes in
Equity
For
the year ended 31 January 2024
|
|
Share
capital
|
Share
Premium
|
Share Based
Payments
|
Foreign Exchange
Reserve
|
Retained
Earnings
|
Total
|
|
|
£
|
£
|
£
|
£
|
£
|
£
|
|
As
at 1 February 2022
|
120,000
|
1,279,094
|
-
|
-
|
(797,650)
|
601,444
|
|
|
|
|
|
|
|
|
|
Loss for the year
|
-
|
-
|
-
|
-
|
(2,644,759)
|
(2,644,759)
|
|
Foreign exchange losses on
translation of overseas subsidiaries
|
-
|
-
|
-
|
(2,645)
|
-
|
(2,645)
|
|
Total Comprehensive income
|
-
|
-
|
-
|
(2,645)
|
(2,644,759)
|
(2,647,404)
|
|
|
|
|
|
|
|
|
|
Transactions with owners:
|
|
|
|
|
|
|
|
Issue of shares
|
24,000
|
1,134,149
|
-
|
-
|
-
|
1,158
149
|
|
Issue of options
|
-
|
-
|
63,221
|
-
|
-
|
63,221
|
|
Total transactions with owners
|
24,000
|
1,134,149
|
63,221
|
-
|
-
|
1,221,370
|
|
|
|
|
|
|
|
|
|
Balance at 31 January 2023
|
144,000
|
2,413,243
|
63,221
|
(2,645)
|
(3,442,409)
|
(824,590)
|
|
|
Share
capital
|
Share
Premium
|
Share Based
Payments
|
Foreign Exchange
Reserve
|
Retained
Earnings
|
Total
|
|
|
£
|
£
|
£
|
£
|
£
|
£
|
|
As
at 1 February 2023
|
144,000
|
2,413,243
|
63,221
|
(2,645)
|
(3,442,409)
|
(824,590)
|
|
|
|
|
|
|
|
|
|
Loss for the year
|
-
|
-
|
-
|
-
|
(1,770,982)
|
(1,770,982)
|
|
Foreign exchange losses on
translation of overseas subsidiaries
|
-
|
-
|
-
|
(2,306)
|
-
|
(2,306)
|
|
Total Comprehensive income
|
-
|
-
|
-
|
(2,306)
|
(1,770,982)
|
(1,773,288)
|
|
|
|
|
|
|
|
|
|
Transactions with owners:
|
|
|
|
|
|
|
|
Issue of shares
|
32,297
|
1,848,383
|
-
|
-
|
-
|
1,880,680
|
|
Issue of options
|
-
|
-
|
182,150
|
-
|
-
|
182,150
|
|
Issue of warrants
|
-
|
-
|
14,400
|
-
|
-
|
14,400
|
|
Total transactions with owners
|
32,297
|
1,848,383
|
196,550
|
-
|
-
|
2,077,230
|
|
|
|
|
|
|
|
|
|
Balance at 31 January 2024
|
176,297
|
4,261,626
|
259,771
|
(4,951)
|
(5,213,391)
|
(520,648)
|
The notes on pages 38 to 55 are an
integral part of these financial statements.
Consolidated Statement of Cash
Flows
for
the year ended 31 January 2024
|
|
Notes
|
Year to 31 January
2024
|
Year to 31
January
2023
|
|
|
|
£
|
£
|
|
Cash flows from Operating
Activities
|
|
|
|
|
Loss for the year before
tax
|
|
(1,770,982)
|
(2,644,759)
|
|
Share based payments
|
|
196,550
|
63,221
|
|
Expenditure met directly by
funding provider *
|
|
-
|
136,289
|
|
Decrease/(Increase) in
receivables
|
12
|
85,822
|
(212,052)
|
|
(Decrease)/Increase in
payables
|
14
|
(132,662)
|
339,705
|
|
Net cash outflow from operating activities
|
|
(1,621,272)
|
(2,317,596)
|
|
Cashflows from Investing Activities
|
|
|
|
|
Payments for intangible
assets
|
10
|
-
|
(51,475)
|
|
Net cash outflow from investing activities
|
|
-
|
(51,475)
|
|
Cash flows from financing activities
|
|
|
|
|
Proceeds of borrowing
|
|
-
|
190,000
|
|
Repayment of borrowings
|
|
(224,000)
|
-
|
|
Issue of shares (net of share
issue expenses)
|
15
|
1,880,680
|
1,080,149
|
|
Net cash inflow from financing activities
|
|
1,656,680
|
1,270,149
|
|
|
|
|
|
|
Net increase/(decrease) in cash and cash equivalents during
the year
|
|
35,408
|
(1,098,922)
|
|
|
|
|
|
|
Cash at the beginning of
year
|
|
12,356
|
1,113,923
|
|
Effect of foreign exchange on
currency holdings
|
|
(2,306)
|
(2,645)
|
|
|
|
|
|
|
Cash and cash equivalents at the end of the
year
|
13
|
45,458
|
12,356
|
* During the prior year, expenditure
totalling £330,000 (2023: £136,289) was settled directly by Paul
Atherley on behalf of the company against the loan provided by
him. As such these amounts represent a material non cash
transaction.
The notes on pages 38 to 55 are an
integral part of these financial statements.
Company Statement of Financial
Position
As
at 31 January 2024
|
|
|
|
|
|
|
Notes
|
31 January
2024
|
31 January
2023
|
|
|
|
£
|
£
|
|
|
|
|
|
|
Non
Current Assets
|
|
|
|
|
Investments in and loans to
subsidiaries
|
11
|
2,943,953
|
1,878,904
|
|
Total Non Current Assets
|
|
2,943,953
|
1,878,904
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
Trade and other
receivables
|
12
|
73,710
|
83,158
|
|
Cash and cash equivalents
|
13
|
27,961
|
5,356
|
|
Total Current Assets
|
|
101,671
|
88,514
|
|
|
|
|
|
|
Total Assets
|
|
3,045,624
|
1,967,418
|
|
|
|
|
|
|
Equity
|
|
|
|
|
Share Capital
|
15
|
176,297
|
144,000
|
|
Share Premium
|
15
|
4,261,626
|
2,413,243
|
|
Share Based Payments
|
15
|
259,771
|
63,221
|
|
Retained Earnings
|
|
(2,263,777)
|
(1,372,013)
|
|
Total Equity
|
|
2,433,917
|
1,248,451
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
Trade and other payables
|
14
|
509,418
|
392,678
|
|
Short Term Borrowings
|
|
102,289
|
326,289
|
|
Current and Total Liabilities
|
|
611,707
|
718,967
|
|
|
|
|
|
|
Total Equity and Liabilities
|
|
3,045,624
|
1,967,418
|
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 £891,764 (2023: loss of £574,363).
The notes on pages 38 to 55 are an
integral part of these financial statements.
The financial statements were
approved and authorised for issue by the Board on 30 May 2024.
Paul Atherley
Director
Alkemy Capital Investments plc
Company Statement of Changes in
Equity
For
the year ended 31 January 2024
|
|
Share
capital
|
Share
Premium
|
Share Based
Payments
|
Retained
Earnings
|
Total
|
|
|
£
|
£
|
£
|
£
|
£
|
|
As
at 1 February 2022
|
120,000
|
1,279,094
|
-
|
(797,650)
|
601,444
|
|
|
|
|
|
|
|
|
Loss for the year
|
-
|
-
|
-
|
(574,363)
|
(574,363)
|
|
Total Comprehensive income
|
-
|
-
|
-
|
(574,363)
|
(574,363)
|
|
|
|
|
|
|
|
|
Transactions with owners:
|
|
|
|
|
|
|
Issue of shares
|
24,000
|
1,134,149
|
-
|
-
|
1,158
149
|
|
Issue of options
|
-
|
-
|
63,221
|
-
|
63,221
|
|
Total transactions with owners
|
24,000
|
1,134,149
|
63,221
|
-
|
1,221,370
|
|
|
|
|
|
|
|
|
Balance at 31 January 2023
|
144,000
|
2,413,243
|
63,221
|
(1,372,013)
|
1,248,451
|
|
|
Share
capital
|
Share
Premium
|
Share Based
Payments
|
Retained
Earnings
|
Total
|
|
|
£
|
£
|
£
|
£
|
£
|
|
As
at 1 February 2023
|
144,000
|
2,413,243
|
63,221
|
(1,372,013)
|
1,248,451
|
|
|
|
|
|
|
|
|
Loss for the year
|
-
|
-
|
-
|
(891,764)
|
(891,764)
|
|
Total Comprehensive income
|
-
|
-
|
-
|
(891,764)
|
(891,764)
|
|
|
|
|
|
|
|
|
Transactions with owners:
|
|
|
|
|
|
|
Issue of shares
|
32,297
|
1,848,383
|
-
|
-
|
1,880,680
|
|
Issue of options
|
-
|
-
|
182,150
|
-
|
182,150
|
|
Issue of warrants
|
-
|
-
|
14,400
|
-
|
14,400
|
|
Total transactions with owners
|
32,297
|
1,848,383
|
196,550
|
-
|
2,077,230
|
|
|
|
|
|
|
|
|
Balance at 31 January 2024
|
176,297
|
4,261,626
|
259,771
|
(2,263,777)
|
2,433,917
|
The notes on pages 38 to 55 are an
integral part of these financial statements.
Company Statement of Cash Flows
for
the year ended 31 January 2024
|
|
Notes
|
Year to 31 January
2024
|
Year to31
January
2023
|
|
|
|
£
|
£
|
|
Cash flows from Operating
Activities
|
|
|
|
|
Loss for the year before
tax
|
|
(891,764)
|
(574,363)
|
|
Expenditure met directly by
funding provider *
|
|
-
|
136,289
|
|
Share based payments
|
|
196,550
|
63,221
|
|
Decrease/(Increase) in
receivables
|
12
|
9,448
|
(83,085)
|
|
Increase/(Decrease) in
payables
|
14
|
116,740
|
(41,874)
|
|
Net cash outflow from operating activities
|
|
(569,026)
|
(499,812)
|
|
Cashflows from Investing Activities
|
|
|
|
|
Investments in
subsidiaries
|
11
|
(2)
|
(2)
|
|
Loans provided to
subsidiaries
|
11
|
(1,065,047)
|
(1,878,902)
|
|
Net cash outflow from investing activities
|
|
(1,065,049)
|
(1,878,904)
|
|
Cash flows from financing activities
|
|
|
|
|
Proceeds of borrowing
|
|
-
|
190,000
|
|
Repayment of borrowings
|
|
(224,000)
|
-
|
|
Issue of shares (net of share
issue expenses)
|
15
|
1,880,680
|
1,080,149
|
|
Net cash inflow from financing activities
|
|
1,656,680
|
1,270,149
|
|
|
|
|
|
|
Net increase/(decrease) in cash and cash equivalents during
the year
|
|
22,605
|
(1,108,567)
|
|
|
|
|
|
|
Cash at the beginning of
year
|
|
5,356
|
1,113,923
|
|
|
|
|
|
|
Cash and cash equivalents at the end of the
year
|
13
|
27,961
|
5,356
|
* During the prior year, expenditure
totalling £330,000 (2023: £136,289) was settled directly by Paul
Atherley on behalf of the company against the loan provided by
him. As such these amounts represent a material non cash
transaction.
The notes on pages 38 to 55 are an
integral part of these financial statements.
Notes to the Financial Statements
1. GENERAL
INFORMATION
Alkemy Capital Investments Plc is a
company incorporated and domiciled in the United Kingdom. The
Company is a public limited company, which is listed on the London
Stock Exchange. The address of the registered office is 167-169
Great Portland Street, Fifth Floor, London, England W1W
5PF.
The Company was initially formed
to undertake an acquisition of a controlling interest in a company
or business in the battery metals sector with the objective of
operating the acquired business and implementing an operating
strategy to generate value for its shareholders through operational
improvements as well as potentially through additional
complementary acquisitions following the Acquisition.
On 25 February 2022, the Company announced that it had formed a
subsidiary called Tees Valley Lithium Limited ("TVL") that would
aim to develop the UK's first Lithium Hydroxide processing
facility. This transaction and change of strategy constituted a
reverse takeover transaction under the listing rules of the London
Stock Exchange and resulted in Alkemy becoming an operating
company.
On 2 May 2022 the Company formed a
subsidiary in Australia called Alkemy Capital Services Pty Ltd to
act as a project services company for operations in
Australia.
On 22 September 2022 the Company
formed a subsidiary in Australia called Port Headland Lithium Pty
Ltd to act as a project holding company for spodumene enrichment
operations in Australia.
Group Subsidiaries as at 31
January 2024:
|
Subsidiary Name
|
Date of Incorporation
|
Percentage Interest
|
Registered office address
|
Country of Incorporation
|
|
Tees Valley Lithium Ltd
|
25 February 2022
|
100%
|
167-169 Great Portland Street,
London W1W 5PF
|
United Kingdom
|
|
Alkemy Capital Services Pty
Ltd
|
4 May 2022
|
100%
|
Level 4, 46 Colin Street, West
Perth WA 6005, Australia
|
Australia
|
|
Port Headland Lithium Pty
Ltd
|
22 September 2022
|
100%
|
Level 4, 46 Colin Street, West
Perth WA 6005, Australia
|
Australia
|
|
Tees Valley Graphite
Limited
|
20 November 2023
|
100%
|
167-169 Great Portland Street,
London W1W 5PF
|
United Kingdom
|
The financial statements which
cover the year to 31 January 2024 are presented in British Pounds
Sterling, the currency of the primary economic environment in which
the Company operates. The comparative financial statements
cover the year to 31 January 2023.
2. SUMMARY OF
MATERIAL ACCOUNTING POLICIES
The material accounting policies
applied in the preparation of these financial statements are set
out below. The policies have been consistently applied throughout
the year, unless otherwise stated.
Basis of preparation
The financial statements have been
prepared in accordance with UK adopted International Accounting
Standards ("IAS" or "IFRS"), which has been adopted by both the
Company and the Group.
The financial statements are
presented in pounds sterling ("£") which is also the functional
currency of the Company.
Going Concern
As part of their assessment of
going concern, the Directors have prepared cash forecasts to
determine the funding requirements of the business over the 18
months from the reporting date. Cash requirements over this period
have been projected in the range of a £2m minimum (decelerated
project development case) to £9m maximum (accelerated project
development case) depending on the level of technical project
development work being undertaken, as determined by funding
availability.
As at the date of this report, the
Directors are considering a variety of funding options from
numerous parties to consider the option best suited to balancing
the immediate cash flow needs of the business and desire to
accelerate the project development timeframe against the need to
avoid unnecessary dilution of the shareholders during a period of
depressed equity market prices. Options ranging
from:
· project level debt or strategic equity which would provide
sufficient funding to accelerate the project development program
over the period of consideration, including the Wilton LHM refinery
train 1 FEED study alongside development of the Port Hedland LSM
refinery and TVG graphite projects, as well as general working
capital requirements;
· market equity placings to secure working capital funding
needs whilst project development funding opportunities continue to
be assessed;
· convertible lending facilities which may act as a hybrid of
working capital and project development funding, allowing
progression of project development at a less accelerated rate that
would be the case under a more substantial project lending
facility;
· any
combination of the above.
The Board remains in detailed
discussions on the above funding opportunities and anticipates
concluding this process in the near term.
The Directors are therefore
reasonably confident that the necessary funding will be secured, as
and when required, by executing on one of the above options under
consideration, such that the Directors have a reasonable
expectation that the Company will continue in operational existence
for the next 12 months. However as successful execution of
one of the above fundraising options cannot be assured, a material
uncertainty exists which may cast significant doubt on the ability
of the company and group to continue as a going concern and realise
its assets and discharge its liabilities in the normal course of
business.
Accordingly, the Directors believe
that as at the date of this report it is appropriate to continue to
adopt the going concern basis in preparing the financial
statements.
Statement of compliance
The financial statements comply
with UK adopted International Accounting Standards
("IAS").
1. The company
has adopted all relevant IASs which were in effect from
incorporation when preparing these financial
statements.
2. Standards and
Interpretations which are effective in the current year (Changes in
accounting policies); None of the standards which became effective
during the year which are applicable to the Company have had a
material impact.
3. Adoption of new Standards and
Interpretations to standards in future years; The Directors
anticipate that the adoption of new Standards and Interpretations
in future years will have no material impact on the financial
statements of the Company. The Company expects to adopt all
relevant Standards and Interpretations as and when they become
effective.
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 31 January 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.
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.
Foreign Currencies
Both the functional and
presentational currency of the Company is Sterling (£). 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 are the Australian Dollar ("AUD").
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 year, 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 year 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. On disposal of any such overseas
subsidiaries, cumulative foreign exchange losses or gains
recognised in equity via Other Comprehensive Income become realised
and are recognised through the profit and loss account on
disposal.
Taxation
Current taxation is the taxation
currently payable on taxable profit for the year.
Current tax is calculated at the
tax rates (and laws) 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
amounts 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 generally 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 that affects neither the tax profit nor the accounting
profit.
Deferred tax is calculated at the
tax rates that are expected to apply in the year when the liability
is settled or the asset is realised. Deferred tax is charged
or credited in the income statement, except when it relates to
items charged or credited directly to equity, in which case the
deferred tax is also dealt with in equity. Deferred tax assets and
liabilities are offset when there is a legally enforceable right to
set off current tax assets against current tax liabilities and when
they relate to income taxes levied by the same taxation authority
and the Company intends to settle its current tax assets and
liabilities on a net basis.
Intangible assets - project development
costs
Intangible assets comprise project
development costs, incurred on the Group's Wilton International
Chemicals Park Lithium Hydroxide Monohydrate processing facility in
Teesside, UK. These costs include the cost of obtaining planning
permission for the development of the facility, design and planning
costs and all technical and administrative overheads directly
associated with this project. These costs are carried forward in
the Statement of Financial Position as non-current intangible
assets less provision for identified impairments. Costs associated
with development activity will only be capitalised if they meet the
criteria as set out in IAS 38.
Upon any disposal, the difference
between the fair value of consideration receivable for development
assets and the relevant cost within non-current assets is
recognised in the Income Statement.
Financial assets
Cash and cash
equivalents
Cash and cash equivalents comprise
cash at hand and current and deposit balances at banks, together
with other short-term, highly liquid investments that are readily
convertible into known amounts of cash within a period of 3 months
at inception of the instrument/investment and which are subject to
an insignificant risk of changes in value.
Financial Assets held at amortised costs
The Group classifies its financial
assets as held at amortised costs, and consists of trade and other
receivables and loans to subsidiaries (for Company only financial
statements).
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.
Financial liabilities
Financial liabilities are
recognised in the statement of financial position when the Group
and Company becomes a party to the contractual provisions of the
instrument.
The Company's financial
liabilities comprise trade and other payables.
Trade payables are recognised
initially at their fair value and subsequently measured at
amortised cost.
Equity instruments
An equity instrument is any
contract that evidences a residual interest in the assets of the
Company after deducting all of its liabilities. Equity instruments
issued by the Company are recorded at the proceeds received net of
direct issue costs.
Ordinary shares are classified as
equity.
Share capital account represents
the nominal value of the shares issued.
The share premium account
represents premiums received on the initial issuing of the share
capital. Any transaction costs associated with the issuing of
shares are deducted from share premium, net of any related income
tax benefits.
Retained earnings include all
current year results as disclosed in the Statement of Comprehensive
Income.
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.
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 to 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.
Critical accounting judgments and
estimations
The preparation of the financial
statements in conformity with IFRS requires the use of estimates
and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the
reported amounts of revenue and expenses during the reporting year.
Although these estimates are based on management's best knowledge
of the amounts, events or actions, actual results ultimately may
differ from these estimates.
Estimates and judgements are
continually evaluated and are based on historical experience and
other factors, including expectations of future events that are
believed to be reasonable under the circumstances.
The Directors consider the areas
of critical accounting judgements or estimations in these financial
statements to be the capitalisation of development expenditure on
the Wilton project, vesting periods for share options and the
application of the going concern principal.
On 24 November 2022 the Company
received planning permission for the construction of
its planned LHM refinery in Wilton International
Chemicals Park, Teeside from the Redcar & Cleveland Borough
Council. The Directors have determined that this event
triggers the eligibility for the capitalisation of development
expenditure. Under IAS 38 as the Company now has the commercial and
legal rights to construct and exploit the plant for future economic
benefit and, in the judgement of the Directors, the Group retains
adequate technical resources and future availability of necessary
financial resources necessary to complete the development of the
project. As such, the costs of obtaining planning permission
and all development costs incurred post receipt of planning
permission are recognised as intangible assets in these financial
statements. In the event that future events give rise to
circumstances in which the Group no longer holds the commercial
rights to develop and explant this asset, no longer intends to
develop this asset or, in the opinion of the directors, the Group
is no longer considered likely to have access to the funding
necessary to develop the asset in the future, a material impairment
of this asset would be recognised.
During the year the Company issued
a number of share options with market based vesting conditions,
notably when the Company share price reaches a certain
threshold. In order to determine the fair value of options as
required under IFRS 2, the Directors have had to make judgements on
when these vesting conditions are likely to be met and the options
consequently vest and become exercisable. The judgements have
been formed following analysis of previous Company share price
performance to specific events.
See above for further details on
the Directors' assessment that the Company is a going
concern.
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.
When assessing the recovery of these balances, the directors
consider the likelihood that the subsidiaries will be able to
settle amounts owing, either out of future cashflows or though the
recovery of balances receivable or divestment of assets.
Where recovery of these balances is driven by receivable balances
within the subsidiary, assessment of the likelihood of recovery and
present value of future cash inflows is undertaken to ensure the
amounts support the subsidiary loan carrying values in
full.
No impairment of inter-company
loans were deemed necessary in the year.
3. BUSINESS
AND GEOGRAPHICAL REPORTING
The accounting policy for
identifying segments is based on internal management reporting
information that is regularly reviewed by the chief operating
decision maker, which is identified as the Board of
Directors. The Board of Directors consider the Group to have
two identifiable operating segments; (a) the construction and
operation of the Wilton Park Lithium Hydroxide processing facility
in Teeside, UK and (b) the construction of a Lithium ore enrichment
facility in Port Headland, Australia.
|
Year to January 2024
|
UK
£
|
Australia
£
|
Total
£
|
|
|
|
|
|
|
Other Revenue
|
1,247
|
-
|
1,247
|
|
Business development
|
(1,852)
|
-
|
(1,852)
|
|
Project Development
|
(349,836)
|
(284,452)
|
(634,288)
|
|
Administration expenses
|
(1,295,137)
|
(159,058)
|
(1,454,195)
|
|
Foreign exchange
|
(5,215)
|
-
|
(5,215)
|
|
Finance costs
|
(1,697)
|
-
|
(1,697)
|
|
|
|
|
|
|
Loss before tax
|
(1,652,490)
|
(443,510)
|
(2,096,000)
|
4. EXPENSES BY
NATURE
|
|
2024
£
|
2023
£
|
|
Employee benefit expense (note
6)
|
302,733
|
529,782
|
|
Employee benefit - share based
payments
|
66,802
|
53,844
|
|
Advertising and
Marketing
|
122,426
|
147,199
|
|
Regulatory compliance
expense
|
67,481
|
122,324
|
|
Legal fees
|
-
|
5,584
|
|
Share based payments -
advisors
|
115,348
|
9,377
|
|
Travel &
accommodation
|
37,704
|
81,738
|
|
Other professional fees
|
696,744
|
267,338
|
|
Other operating expenses
|
|
44,957
|
|
80,816
|
|
Total administrative expenses
|
1,454,195
|
1,298,002
|
|
|
|
|
| |
Project development costs of
£634,287 (2023: £1,298,011) in the year comprise the costs incurred
in progressing the Company's Project in Teesside, U.K and Port
Headland, Australia, that do not meet the criteria for
capitalisation into intangible assets.
5. AUDITOR
REMUNERATION
During the year the Company
obtained the following services from the auditor:
|
|
2024
£
|
2023
£
|
|
Fees payable to the auditor for
non-audit services
|
-
|
-
|
|
Fees payable to the auditor for the
audit of the Company
|
47,350
|
35,276
|
|
Total auditor's remuneration
|
47,350
|
35,276
|
6. EMPLOYEE
BENEFIT EXPENSE
|
|
2024
£
|
2023
£
|
|
Directors' salaries
|
128,589
|
60,000
|
|
Share based payments
|
182,150
|
63,221
|
|
Staff salaries
|
145,403
|
272,051
|
|
Recruitment and other staff
costs
|
920
|
158,451
|
|
Social security
|
27,821
|
39,280
|
|
Total employee benefit expense
|
484,883
|
593,003
|
There were two employees in the
year other than the Directors. Further disclosures in respect of
Directors' remuneration are included within the Directors'
Remuneration Report.
7. INCOME
TAX
|
|
2024
£
|
2023
£
|
|
|
Current tax
|
-
|
-
|
|
|
Total
|
-
|
-
|
|
|
|
2024
£
|
2023
£
|
|
Loss on ordinary activities before
taxation
|
(2,096,000)
|
(2,644,759)
|
|
|
|
|
|
Tax calculated at domestic rate
applicable to UK standard rate for small companies of
19%
|
(398,240)
|
(502,504)
|
|
Effects of:
|
|
|
|
Expenses not deductible for tax
purposes
|
35,844
|
12,682
|
|
Adjustments relating to tax
credits
|
325,018
|
-
|
|
|
|
|
|
Tax losses carried forward on which
no deferred tax asset is recognised
|
37,378
|
489,822
|
|
Income tax credit
|
-
|
-
|
|
|
|
|
|
| |
Adjustments relating to tax credits
in the year arise from research and development tax credits
received from HMRC under its research and development support
programme.
Tax losses totalling approximately
£3,413,038 (2023: £3,375,660) have been carried forward for use
against future taxable profits. No deferred tax asset has
been recognised in respect of these tax losses.
8. EARNINGS
PER SHARE
(a)
Basic
Basic earnings per share is
calculated by dividing the loss attributable to equity holders of
the Company by the weighted average number of ordinary shares in
issue during the year.
|
|
2024
|
2023
|
|
£
|
£
|
|
Loss from continuing operations
attributable to equity holders of the company
|
(1,770,982)
|
(2,644,759)
|
|
Weighted average number of ordinary
shares in issue
|
7,560,005
|
6,572,053
|
|
|
Pence
|
Pence
|
|
Basic and fully diluted loss per
share from continuing operations
|
(23.43)
|
(40.24)
|
As at 31 January 2024 and 2023
there were no potentially dilutive instruments in issue for
consideration in arriving at the fully diluted loss per share as
the impacts of all such instruments as at the year end are
anti-dilutive.
9.
DIVIDENDS
There were no dividends paid or
proposed by the Company.
10. INTANGIBLE
ASSETS - PROJECT DEVELOPMENT COSTS
|
|
2024
£
|
2023
£
|
|
At
the beginning of the year
|
298,813
|
-
|
|
Additions in the year
|
18,276
|
298,813
|
|
At
the end of the year
|
317,089
|
298,813
|
On 24 November 2022 the Group was
awarded planning permission by the Redcar & Cleveland Borough
Council for the construction of its planned LHM refinery in Wilton
International Chemicals Park, Teeside. In the view of the
directors, this milestone event represents the point when the
criteria for capitalisation of project development costs as
outlined in IAS 38 has been met. As a consequence, the Group
has commenced the policy of capitalising all qualifying expenditure
from this date. All costs incurred in the year that are
directly associated with the application for and receipt of
planning approval have been capitalised, including expenditure
incurred prior to receipt of planning permission.
11. INVESTMENT IN
AND LOANS TO SUBSIDIARIES (COMPANY)
|
|
2024
£
|
2023
£
|
|
Investment in
Subsidiaries
|
4
|
2
|
|
Loans to Subsidiaries
|
2,943,949
|
1,878,902
|
|
Total
|
2,943,953
|
1,878,904
|
Loans to subsidiaries have been
included within the investment balance due to the long term nature
of these receivables. The loans are interest free and
repayable on demand when the subsidiary projects have yielded
economic returns sufficient to settle the value of the
loans.
12. TRADE AND OTHER
RECEIVABLES
|
Group
|
2024
£
|
2023
£
|
|
Prepayments
|
47,537
|
45,891
|
|
VAT and GST recoverable
|
73,660
|
160,165
|
|
Other receivables
|
5,106
|
6,069
|
|
Total
|
126,303
|
212,125
|
|
Company
|
2024
£
|
2023
£
|
|
Prepayments
|
45,490
|
39,293
|
|
VAT and GST recoverable
|
25,720
|
39,321
|
|
Other receivables
|
2,500
|
4,543
|
|
Total
|
73,710
|
83,157
|
13. CASH AND CASH
EQUIVALENTS
|
Group
|
2024
£
|
2023
£
|
|
Cash at bank and on hand
|
45,458
|
12,356
|
|
|
45,458
|
12,356
|
|
Company
|
2024
£
|
2023
£
|
|
Cash at bank and on hand
|
27,961
|
5,356
|
|
|
27,961
|
5,356
|
All of the Group's and Company's
cash and cash equivalents are held in accounts which bear interest
at floating rates and the Directors consider their carrying amount
approximates to their fair value. Details of the credit risk
associated with cash and cash equivalents is set out in note
16.
14. TRADE AND OTHER
PAYABLES
|
Group
|
2024
£
|
2023
£
|
|
Trade payables
|
673,199
|
552,146
|
|
Other payables
|
53,965
|
17,761
|
|
Accrued expenses
|
180,045
|
451,688
|
|
Total trade and other payables
|
907,209
|
1,021,595
|
|
Company
|
2024
£
|
2023
£
|
|
Trade payables
|
364,948
|
303,250
|
|
Other payables
|
7,365
|
6,264
|
|
Accrued expenses
|
137,105
|
83,164
|
|
Total trade and other payables
|
509,418
|
392,678
|
Trade payables and accruals
principally comprise amounts outstanding for trade purchases and
ongoing costs. The Directors consider that the carrying amount of
trade payables approximates to their fair value.
15. SHARE CAPITAL,
SHARE PREMIUM & SHARE BASED PAYMENTS
|
|
Number of ordinary shares of
2p
|
Share
Capital
£
|
Share
premium
£
|
Share based
payments
£
|
|
At
31 January 2022
|
5,999,999
|
120,000
|
1,279,094
|
-
|
|
Share issues
|
1,199,999
|
24,000
|
1,175,999
|
-
|
|
Share issue expenses
|
-
|
-
|
(41,850)
|
-
|
|
Issue of Options and
Warrants
|
-
|
-
|
-
|
63,221
|
|
At
31 January 2023
|
7,199,998
|
144,000
|
2,413,243
|
63,221
|
|
Share issues
|
1,614,853
|
32,297
|
1,968,497
|
-
|
|
Share issue expenses
|
-
|
-
|
(105,714)
|
-
|
|
Issue of Options and
Warrants
|
-
|
-
|
(14,400)
|
196,550
|
|
At
31 January 2024
|
8,814,851
|
176,297
|
4,261,626
|
259,771
|
Share issues in year and prior
year:
On 5 October 2023 the Company
issued 964,853 ordinary shares of 2p for cash at a price of £1.40
per share.
On 4 January 2024 the Company
issued 650,000 ordinary shares of 2p for cash at a price of £1 per
share.
On 9 August 2022 the Company
issued 1,199,999 ordinary shares of 2p for cash at a price of £1
per share.
Options issued in the year and
prior year:
On 4 August 2022 the Company
issued 590,000 options over ordinary shares, exercisable for 5
years from grant at a strike price of £1 per share and made up of
three equal tranches with vesting conditions as follows:
A) The options vest
when the Company share price has exceeded £5 for a period of 10
consecutive trading days;
B) The options vest on
the later of i) the share price having exceeded £5 for a period of
10 consecutive trading days and ii) completion of project financing
for the construction of the Wilton Park refinery;
C) The options vest on
the later of the share price having exceeded £5 for a period of 10
consecutive trading days and ii) the commissioning of train 1 of
the Wilton Park refinery.
On 5 August 2022 the Company
issued 100,000 options over ordinary shares, exercisable for 5
years from grant at a strike price of £1 per share and made up of
three equal tranches with vesting conditions as follows:
A) The options vest
when the Company share price has exceeded £5 for a period of 10
consecutive trading days;
B) The options vest on
the later of i) the share price having exceeded £5 for a period of
10 consecutive trading days and ii) completion of project financing
for the construction of the Wilton Park refinery;
C) The options vest on
the later of the share price having exceeded £5 for a period of 10
consecutive trading days and ii) the commissioning of train 1 of
the Wilton Park refinery.
On 19 September 2022 the Company
issued 100,000 options over ordinary shares, exercisable for 2
years from grant at a strike price of £1.5 per share and made up of
two tranches with vesting conditions as follows:
A) The options vest
when the Company share price has exceeded £5 for a period of 10
consecutive trading days - 40%;
B) The options vest
when the Company share price has exceeded £10 for a period of 10
consecutive trading days - 60%;
On 6 June 2023 the Company issued
430,000 options over ordinary shares, exercisable for 5 years from
grant at a strike price of £1.75 per share and made up of three
equal tranches with vesting conditions as follows:
A) The options vest when the Company share price has exceeded £5
for a period of 10 consecutive trading days;
B) The options vest on the later of i) the share price having
exceeded £5 for a period of 10 consecutive trading days and ii)
completion of project financing for the construction of the Wilton
Park refinery;
C) The options vest on the later of the share price having
exceeded £5 for a period of 10 consecutive trading days and ii) the
commissioning of train 1 of the Wilton Park refinery.
D)
The below table provides details
on the assumptions used in arriving at the calculation of Fair
Value for each of the above tranches of share options issued in the
year and prior year, using the Black Scholes method.
|
Date of
grant
|
Tranche
|
Number of
Options
|
Assumed Exercise
date
|
Risk free rate
(%)
|
Volatility
(%)
|
FV
|
|
4 August 2022
|
A
|
196,668
|
4 August 2027
|
1.719
|
24.51
|
£59,500
|
|
4 August 2022
|
B
|
196,667
|
4 August 2027
|
1.719
|
24.51
|
£59,500
|
|
4 August 2022
|
C
|
196,665
|
4 August 2027
|
1.719
|
24.51
|
£59,500
|
|
5 August 2022
|
A
|
33,334
|
5 August 2027
|
1.875
|
24.49
|
£9,600
|
|
5 August 2022
|
B
|
33,333
|
5 August 2027
|
1.875
|
24.49
|
£9,600
|
|
5 August 2022
|
C
|
33,333
|
5 August 2027
|
1.875
|
24.49
|
£9,600
|
|
19 September 2022
|
A
|
40,000
|
19 September 2024
|
3.13
|
23.77
|
£2,525
|
|
19 September 2022
|
B
|
60,000
|
N/A - lapse prior to
exercise
|
3.13
|
23.77
|
Nil
|
|
6 June 2023
|
A
|
143,335
|
6 June 2028
|
4.39
|
40.50
|
£95,150
|
|
6 June 2023
|
B
|
143,334
|
6 June 2028
|
4.39
|
40.50
|
£95,149
|
|
6 June 2023
|
C
|
143,331
|
6 June 2028
|
4.39
|
40.50
|
£95,147
|
|
|
2024
|
|
2023
|
|
Company and Group
|
Number
of
options
Number
|
Weighted
average
exercise
price
£
|
|
Number
of
options
Number
|
Weighted
average
exercise
price
Pence
|
|
Outstanding at the beginning of the
period
|
790,000
|
106.33
|
|
-
|
-
|
|
Granted during the year
|
430,000
|
175
|
|
790,000
|
106.33
|
|
Lapsed during the period
|
-
|
-
|
|
-
|
-
|
|
Outstanding at the end of the
period
|
1,220,000
|
130.53
|
|
790,000
|
106.33
|
Share Capital
The share capital account
represents the par or nominal value received for ordinary shares
issued by the Company.
Share Premium
The share premium account
represents the excess of consideration received for ordinary shares
issued above their nominal value net of transaction
costs.
Share-Based Payment
Reserve
The share-based payment reserve
represents the cumulative fair value charge for options and
warrants granted by the Company over ordinary shares.
Foreign Exchange
Reserve
The translation reserve represents
the exchange gains and losses that have arisen on the retranslation
of overseas operations.
16. RISK MANAGEMENT
OBJECTIVES AND POLICIES
The Group and Company is exposed
to a variety of financial risks which result from both its
operating and investing activities. The Group and Company's
risk management is coordinated by the Board of Directors and
focused on actively securing the Group and Company's short to
medium term cash flows by minimising the exposure to financial
markets.
The main risk the Group and
Company is exposed to through its financial instruments is credit
risk.
Capital risk management
The Group and Company's objectives
when managing capital are:
(a) to safeguard the Group
and Company's ability to continue as a going concern, so that it
continues to provide returns and benefits for
shareholders;
(b) to support the Group and
Company's growth; and
(c) to provide capital for
the purpose of strengthening the Group and Company's risk
management capability.
The Group and Company actively and
regularly reviews and manages its capital structure to ensure an
optimal capital structure and equity holder returns, taking into
consideration the future capital requirements of the Group and
Company and capital efficiency, prevailing and projected
profitability, projected operating cash flows, projected capital
expenditures and projected strategic investment opportunities.
Management regards total equity as capital and reserves, for
capital management purposes. The Group and Company is not subject
to externally imposed capital requirements.
Credit risk
The Group and Company's financial
instruments that are subject to credit risk are cash and cash
equivalents. The credit risk for cash and cash equivalents is
considered negligible since the counterparties are reputable
financial institutions.
The Group and Company defines a
default by a counterparty to be an event in which a balance
receivable remains unsettled after a period of 90 days from the
date on which the balance was due for settlement.
The Group's maximum exposure to
credit risk is £171,761 comprising £126,303 of Trade and other
receivables and £45,458 in cash and cash equivalents. The
Company's maximum exposure to credit risk is £3,045,620 comprising
£2,943,949 of intercompany receivables, £73,710 of Trade and other
receivables and £27,961 in cash and cash equivalents.
Liquidity Risk
The Group and Company monitors its
rolling cashflow forecasts and liquidity requirements to ensure it
has sufficient cash to meet its operational needs. As the
Group and Company maintains its cash reserves in instant access
current accounts liquidity risk to operations is deemed to be
minimal. Short term borrowings at the year end represent a
loan provided by Paul Atherley, Group CEO and Directors, which is
interest free and repayable when the Group and Company has raised
sufficient additional finance to effect settlement.
Interest Rate Risk
As the Group and Company has no
debt, other than the non-interest bearing loan provided by Paul
Atherley, and does not maintain cash reserves on long term deposit
accounts liked to interest rates, interest rate risk to operations
is deemed to be minimal.
Foreign Exchange Risk
The Group's transactions are
carried out in a variety of currencies, including Australian
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
31 January 2024
|
GBP
£
|
AUD
£
|
Total
£
|
|
|
|
|
|
|
|
|
|
|
|
Intangibles - Project development
costs
|
317,089
|
-
|
317,089
|
|
Trade and other
receivables
|
90,273
|
36,030
|
126,303
|
|
Cash and cash equivalents
|
34,389
|
11,071
|
45,460
|
|
Trade and other payables
|
697,889
|
209,320
|
907,209
|
|
Short-term borrowings
|
102,289
|
-
|
102,289
|
The Group did not have any
material assets or liabilities in any currencies other than GBP as
at 31 January 2023.
17. FINANCIAL
INSTRUMENTS
|
|
|
Categories of financial
instruments:
|
|
|
|
|
2024
|
2023
|
|
|
Group
|
|
£
|
£
|
|
|
FINANCIAL ASSETS AT AMORTISED
COST:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
45,458
|
12,356
|
|
|
Trade and other
receivables
|
|
126,303
|
212,125
|
|
|
Total financial Assets at amortised cost
|
|
171,761
|
224,481
|
|
|
|
|
|
|
|
|
FINANCIAL LIABILITIES AT AMORTISED
COST:
Trade and other payables
|
|
907,209
|
1,021,595
|
|
|
Short term borrowings
|
|
102,289
|
326,289
|
|
|
Total financial liabilities at amortised
cost
|
|
1,009,498
|
1,347,884
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
2024
|
2023
|
|
|
Company
|
|
£
|
£
|
|
|
FINANCIAL ASSETS AT AMORTISED
COST:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
27,961
|
5,356
|
|
|
Trade and other
receivables
|
|
73,710
|
83,158
|
|
|
Total financial Assets at amortised cost
|
|
101,671
|
88,514
|
|
|
|
|
|
|
|
|
|
|
2024
|
2023
|
|
|
|
|
£
|
£
|
|
|
FINANCIAL LIABILITIES AT AMORTISED
COST:
Trade and other payables
|
|
509,418
|
392,678
|
|
|
Short term borrowings
|
|
102,289
|
326,289
|
|
|
Total financial liabilities at amortised
cost
|
|
611,707
|
718,967
|
|
|
|
|
|
| |
18. RELATED PARTY
TRANSACTIONS
The compensation payable to Key
Management personnel comprised £312,589 (2023: £177,600) paid by
the Company to the Directors in respect of services to the Company.
Full details of the compensation for each Director are provided in
the Directors' Remuneration Report.
Sam Quinn is a partner in
Silvertree Partners LLP who received £65,192 (2023: £55,980) during
the year for the provision of accounting and finance,
administration, bookkeeping and secretarial services. At the year
end, an amount of £31,159 (2023: £12,567) was due to Silvertree
Partners LLP.
Sam Quinn is a director and
shareholder of Lionshead Consultants Ltd who received £60,000
(2023: £48,600) during the year for the provision of consulting
services and £2,093 in reimbursement of expenses (2023: £5,390). At
the year end, an amount of £nil (2023: £13,829) was due to
Lionshead Consultants Ltd.
Paul Atherley is a director and
shareholder of Selection Capital Ltd who received £84,000 during
the year for the provision of advisory services (2023: £69,000) and
£3,172 (2023: £47,852) during the year in reimbursement of various
costs met on behalf of the Company. At the year end, an amount of
£108,289 (2023: £16,641) was due to Selection Capital
Ltd.
During the year, Paul Atherley
provided a short term working capital loan to the Company, with the
balance outstanding at the reporting date being £102,289 (2023:
£326,289). The loan is interest free and repayable when the
Company has raised sufficient additional finance to effect
settlement.
During the year, the Group incurred
£11,075 (2023: £7,775) in travel related costs and charged £nil
(2023: £3,500) in travel related cost recharges to Pensana plc, a
company in which Paul Atherley is a director and shareholder.
As at the reporting date, £18,850 remained outstanding for
settlement.
Vikki Jeckel is a director and
shareholder of Supply Tactics Ltd who received £40,000 during the
year post appointment for the provision of advisory services (2023:
£nil). At the year end, an amount of £72,000 (2023: £nil) was due
to Supply Tactics Ltd.
During the year, the Company
provided loans to its two subsidiaries, Tees Valley Lithium Limited
("TVL") and Alkemy Capital Services Pty Ltd ("ACSL") by way of
funds provided to meet their ongoing cash needs and the recharging
of expenditure met by the Company on behalf of the
subsidiaries. Loans provided during the period totalled
£766,866 (2023: £1,776,103) for TVL, £151,670 (2023: £nil) for PHL
and £146,487 (2023: £102,801) for ACSL respectively. Balances
remaining owing from subsidiaries to the Company as at 31 January
2023 were £2,542,969 (2023: £1,776,103) for TVL, £151,670 (2023:
£nil) for PHL and £249,288 (2023: £102,801) for ACSL
respectively.
During the year, amounts totalling
£57,714 (2023: £56,900) were paid to Alex Della Bosca, daughter of
Paul Atherley, for her employment by the Group.
19. POST YEAR-END
EVENTS
The Company's wholly owned
subsidiary Tees Valley Graphite, has entered into a non-binding
memorandum of understanding with Syrah Resources Limited for the
establishment of a joint venture to develop a commercial-scale
natural graphite active anode material ('AAM') processing facility
located within the Teesside Freeport, to supply AAM to the European
market.
20. ULTIMATE
CONTROLLING PARTY
The Directors consider that the
Company has no ultimate controlling party, as no individual member
holds more than 50% of the issued shares.
21. CONTINGENT
LIABILITIES AND CAPITAL COMMITMENTS
There were no contingent liabilities
or capital commitments as at 31 January 2024 (2023:
nil).