TIDMCDL
RNS Number : 5784E
Cloudbreak Discovery PLC
31 October 2022
31 October 2022
Cloudbreak Discovery Plc
("Cloudbreak" or the "Company")
Final Results for the Year Ended 30 June 2022
Notice of AnFnual General Meeting
Cloudbreak Discovery PLC (LSE: CDL), a leading natural resources
project generator with a particular focus on commodities key to the
energy transition, is pleased to announce its final results for the
year ended 30 June 2022 ("FY22" or the "Period").
Period Highlights
Company Updates
-- Successful fundraise of GBP1.5 million to progress projects
and execute on royalty acquisitions which provide near-term
cashflow for the Company
-- Strengthened the Board by appointing Paul Gurney, who was
previously a Managing Director at the Bank of Montreal ("BMO"), a
top 10 bank in North America
Projects
-- Staked and initiated an exploration programme on the
Northwest Portfolio which targets polymetallic projects in
northwestern British Columbia ("BC")
o Optioned the Yak, Atlin West, Rizz and Icefall projects, which
are part of the Northwest Portfolio, to partners
o Commenced a high-resolution magnetic survey over the Northern
Treasure, Rizz, Icefall and Atlin West projects to identify
mineralised structures
-- Cloudbreak and Alianza Minerals Ltd formed a strategic
alliance (the "Alliance") focused on copper exploration in the
United States
o The Alliance staked the Klondike and Stateline properties in
Colorado, and subsequently optioned both projects to Allied Copper
Corp
-- Optioned the South Timmins gold project, located in Ontario,
to 1315956 BC Ltd now Calidus Resources Corp
-- Entered into a Mineral Application Cooperation Agreement to
jointly work towards submission of an application to acquire
Petroleum Exploration License 1724 ("Block 1724"), located onshore
Namibia
-- Entered into a separate agreement to submit a petroleum
development agreement for Petroleum Exploration Licence Block 2019
("Block 2019"), targeting the Waterberg basin located in central
northeast Namibia
-- Staked the Foggy Mountain project in central BC, which lies
along a mineralized corridor containing several past producing
mines in the Toodoggone region of British Columbia
-- Acquired a 3.25% overriding royalty interest ("ORI") on the
producing Masten Unit Energy project in Cochran County, Texas
-- Norseman Silver Inc completed the acquisition of the Caribou
project, ratifying Cloudbreak a 2% net smelter royalty ("NSR")
Post Period Highlights
-- Raised GBP585,625 to support the development of Cloudbreak's
existing portfolio and the acquisition of suitable additions
including lithium assets and bauxite projects globally
-- Entered into an agreement to provide Legado Oil & Gas
Limited (formerly Iron Forge Holding (III) Limited) with USD $1.5
million in development capital for the Butte Strawn energy project
as a convertible debenture, which at Cloudbreak's discretion can be
converted into a 6% ORI
-- Completed a surface programme at Foggy Mountain, confirming
three of the four historic mineral occurrences, and an airborne
magnetic survey on Northern Treasure, identifying several prominent
structures
-- Although the Anglo African Minerals Plc ("AAM") investment
has been written off by Cloudbreak, through its subsidiary, Kudu
Resources Limited ("Kudu"), it has been proactively working towards
the acquisition of the Somalu Bauxite exploration license in
Guinea
o The Somalu Bauxite project was the key license that under
pinned the value in Cloudbreak's investment in AAM
o The Company sees an opportunity to recoup lost shareholder
value and have direct control over a data rich asset that has been
substantially de-risked from a technical point of view
-- Andrew Male moved from a Non-Executive Director to take up an
Executive Director position effective from 31 October 2022
Financials
-- The loss of the Group for the year ended 30 June 2022 amounts
to GBP5,557,029 (30 June 2021: GBP902,060). Loss for FY22 has
increased significantly due to the unrealised fair value losses of
GBP2.83 million on both listed and unlisted investments
-- GBP310,578 in cash and cash equivalents held at the period end (30 June 2021: GBP1,277,617)
-- Administrative costs as a percentage of total assets of 59.6
per cent, an increase compared to 14.1 per cent for period ended 30
June 2021
-- Exploration and evaluation cash expenditures amount to GBP370,848 (30 June 2021: GBP29,675)
-- GBP2,069,302 carrying value of investments held at the period
end (30 June 2021: GBP4,353,318)
-- Consolidated loss per share or the period ended 30 June 2022 was GBP0.01
Notice of Annual General Meeting
The Company announces that its Annual General Meeting ("AGM")
will be held on 24 November 2022 at 520 - 999 West Hastings Street,
Vancouver, British Columbia, Canada V6C 2W2 at 10:00 am (PST) 6:00
pm (GMT).
The following documents (as applicable) have been posted to
shareholders or otherwise made available today:
-- Annual Report and Financial Statements for the period ended 30 June 2022;
-- Notice of AGM 2022; and
-- Form of Proxy.
Copies of these documents are also available on the Company's
website:
https://cloudbreakdiscovery.com/investors/
--S--
For additional information please contact:
Cloudbreak Discovery Tel: +1 604 428 9480
PLC
Kyler Hardy, CEO khardy@cloudbreakdiscovery.com
Novum Securities Tel: +44 7399 9400
(Financial Adviser)
David Coffman / George
Duxberry
Shard Capital Partners Tel: +44 207 186 9900
(Broker)
Damon Heath / Isabella
Pierre
BlytheRay Tel: +44 207 138 3204 Cloudbreak@blyther ay.com
(Financial PR/IR-London)
Tim Blythe
Megan Ray
Stellium Services Tel: +44(0)207 129 Cloudbreak@StelliumServices.com
(Investor Relations) 1205
www.StelliumServices.com Andrew Wilson
Claire Bowden
CHAIRMAN'S REPORT
Company Updates
I am pleased to provide shareholders with an update on
Cloudbreak's developments over the course of our first financial
year as a listed company on the Main Market of the London Stock
Exchange.
In what has been a challenging year for many companies, we have
seen continuing shareholder support by way of a successful
fundraise of GBP1.5 million. This will help to progress our
portfolio of projects and execute on royalty acquisitions,
providing near-term cashflow.
In addition to strengthening our balance sheet, Cloudbreak also
appointed Paul Gurney to the Board as a Non-Executive Director in
April 2022. Paul brings a wealth of experience in capital markets,
deal structuring and facilitating transactions, having recently
worked as a Managing Director of BMO's equity desk in London.
Projects
Throughout the Period, Cloudbreak has demonstrated the viability
of its project generator model, entering into option agreements for
several of its Northwest Portfolio projects, located in
northwestern British Columbia ("BC").
Following a successful first phase of exploration, the Group
commenced a high-resolution helicopter-borne magnetic survey over
the Northwest Portfolio, across the Northern Treasure, Rizz,
Icefall and Atlin West projects. The objective of this survey was
to identify prominent, potentially mineralised structures, and to
help determine the next stage of ground-based exploration.
Furthermore, the Group has generated and staked an additional
project in the prolific Toodoggone region of BC, called the Foggy
Mountain Project, announced in April 2022, highlighting
Cloudbreak's continued desire to explore and monetize new
opportunities.
Another key milestone for Cloudbreak was the formation of a
strategic alliance with Alianza Minerals (the "Alliance") to
explore for copper deposits in the United States. During the
Period, the Alliance made two acquisitions, the Klondike project in
Colorado and the Stateline project. Both properties were optioned
to Allied Copper in December 2021 and February 2022 respectively,
under an agreement which included Allied Copper committing to
exploration expenditure and the Alliance retaining a 2% net smelter
royalty ("NSR"), split equally between the parties.
The Group has been active in expanding its portfolio across
several jurisdictions and commodities throughout the year. In April
2022, Cloudbreak marked its transition into the energy sector by
entering into two separate partnerships working towards submitting
applications to acquire onshore petroleum exploration licenses in
Namibia. These partnerships offer an exciting opportunity to
participate in new generative initiatives in Namibia, where
exploration for hydrocarbons is at an early stage.
Furthermore, the Group entered into its first royalty agreement
with G2 Energy Corp in May 2022. As part of the agreement,
Cloudbreak will provide a portion of the acquisition financing for
the Masten Unit Energy Project, located in Cochran County Texas, by
way of debenture and a 3.25% overriding royalty interest ("ORI") in
the project. Through this and similar transactions, we see an
opportunity to create significant shareholder value by growing
Cloudbreak's cashflow through structured deals and royalty
acquisitions.
Towards the end of the year, Cloudbreak announced Norseman
Silver Inc completed the acquisition of the Caribou property,
ratifying Cloudbreak's 2% NSR. This transaction exemplifies our
business model and how Cloudbreak can generate accretive
opportunities with significant exploration upside for our
partners.
Post year end, the Group entered into an agreement with Legado
Oil & Gas Limited (formerly Iron Forge Holdings (III) Limited)
to provide development capital for the Butte Strawn Energy Project
in Irion County, Texas. The capital is being deployed as a
convertible debenture which can be converted into a 6% ORI.
Progress has continued at Foggy Mountain as the team completed a
reconnaissance surface programme in October 2022 which confirmed
three of the four historic mineral occurrences (the fourth minfile
area was not visited in 2022). At our Northern Treasure project, an
airborne magnetic survey was also completed in October 2022,
identifying several structures that are coincident with minfile
occurrences.
Outlook
The year ended 30 June 2022 was active for the Group, having hit
a number of operational milestones. We further diversified our
portfolio with projects in the energy sector and in new
jurisdictions, as well as acquiring our first royalty bringing
near-term cashflow.
Despite the global macroeconomic climate, the outlook for the
natural resources sector looks robust. Our focus on commodities key
to the energy transition movement offers an attractive opportunity
for significant shareholder returns as demand, and therefore
prices, are set to remain high. Our project generator model allows
us to diversify our portfolio across the resource sector, building
value while minimizing risk and cost. This helps build cashflow for
our shareholders.
We are starting to see some projects reach a point where we
could potentially begin receiving royalty payments further
underpinning the benefit of our business model. It is down to the
depth of experience within our team that we are able to execute
this model successfully.
We look forward to keeping investors updated over the next year
and beyond as we generate and pursue new ideas, including lithium
assets and bauxite projects, while continuing to diversify into
energy royalties and attracting new partnerships.
Financial Review
During the year ended 30 June 2022, the Group earned GBP559,523
(2021: GBP2,560,070) in revenue from property option sale
agreements. At the end of the fiscal year, there was GBP310,578 in
cash on hand with the cash reserves to be used in the short term to
cover compliance costs, initial mineral property due diligence and
other costs incidental to the identification and development of
mineral acquisition opportunities.
In March 2022, the Company completed a fundraising of
GBP1,469,770 by issuing 19,596,931 ordinary shares at GBP0.075 per
share. In March 2022, the Company drew down GBP750,000 of the
Crescita Capital LLC facility for an issue of 12,000,000 ordinary
shares at GBP0.0625 per share.
Subsequent to the year end, in July 2022 the Group raised
GBP585,625 through the issue of new ordinary shares and has
continued to review and acquire mineral and energy projects and
generate revenue through optioning these assets to exploration
partners. The buying and selling or optioning of its projects will
continue as the core of the Company as we build a new,
growth-focused diversified project generator, supported with a
natural resource royalty business.
The loss for the year was GBP5,557,029 (2021: GBP902,060 loss)
was predominantly made up of administrative expenses and fair value
loss on investments. The result for the year ended 30 June 2022
consisted mainly of income from property option payments, expenses
from professional and consulting fees and fair value adjustments.
The fair value loss of GBP2.83 million on both listed and unlisted
investments held in the Canadian subsidiary is an unrealised loss
but has contributed negatively to the Company's 2022 year. For a
further breakdown on expenses, please refer to note 23 and for
further breakdown on fair value of investments, please refer to
note 6.
Financial Position
The Group's Statement of Financial Position as at 30 June 2022
and comparatives at 30 June 2021 are summarised below:
2022 2021
GBP GBP
---------------------- ----------- -----------
Current assets 1,611,212 1,799,847
---------------------- ----------- -----------
Non-current assets 3,805,897 4,383,998
---------------------- ----------- -----------
Total assets 5,417,109 6,183,845
---------------------- ----------- -----------
Current liabilities 1,395,910 895,264
---------------------- ----------- -----------
Total liabilities 1,395,910 895,264
---------------------- ----------- -----------
Net assets 4,021,199 5,288,581
---------------------- ----------- -----------
STRATEGIC REPORT
The Directors of the Company present their Strategic Report on
the Group for the year ended 30 June 2022.
Principal Activity
The principal activity of the Group is natural resource project
and royalty generation as well as acquisition of projects and
royalties.
Review of operations
A review of the business of the Company during the year and an
indication of likely future developments may be found in the
Chairman's Statement.
Financial performance review
The loss of the Group for the year ended 30 June 2022 amounts to
GBP5,557,029 (30 June 2021: GBP902,060).
The Board monitors the activities and performance of the Group
on a regular basis. The Board uses financial indicators based on
budget versus actual to assess the performance of the Group. The
indicators set out below will continue to be used by the Board to
assess performance over the period to 30 June 2022.
The main KPIs for the Group are as follows. These allow the
Group to monitor costs and plan future exploration and development
activities:
KPI 2022 2021
----------------------------------------------- -------------- --------------
Cash and cash equivalents GBP310,578 GBP1,277,617
----------------------------------------------- -------------- --------------
Administrative expenses as a percentage of
total assets 59.6% 14.1%
----------------------------------------------- -------------- --------------
Exploration and evaluation cash expenditures GBP370,848 GBP29,675
----------------------------------------------- -------------- --------------
Carrying value of investment GBP2,069,302 GBP4,353,318
----------------------------------------------- -------------- --------------
Cash has been used to fund the Group's operations and facilitate
its investment activities (refer to the Statements of Cash
Flows).
Administrative expenses are the expenses related to the Group's
ability to run the corporate functions to ensure they can perform
their operational commitments.
Exploration costs included costs non-capitalised costs and costs
capitalised during the period consist of exploration expenditure on
the Group's exploration licences net of foreign exchange rate
movements.
Principal risks and uncertainties
The management of the business and the execution of the Group's
strategy are subject to a number of risks. The key business risks
affecting the Group are set out below.
Risks are formally reviewed by the Board, and appropriate
processes are put in place to monitor and mitigate them. If more
than one event occurs, it is possible that the overall effect of
such events would compound the possible adverse effects on the
Group.
Exploration risks
The energy and resource business are controlled by a number of
global factors, principally supply and demand which in turn is a
key driver of global prices; these factors are beyond the control
of the Group. Exploration is a high-risk business and there can be
no guarantee that any mineralisation discovered will result in
proven and probable reserves or go on to be an operating mine. At
every stage of the exploration process the projects are rigorously
reviewed to determine if the results justify the next stage of
expenditure ensuring that funds are only applied to high priority
targets. The energy sector is a cyclic business and sensitive to
several global and regional factors that the company is not able to
predict or control.
Some of the principal assets of the Group are subject to certain
financial and legal commitments. If these commitments are not
fulfilled the licences could be revoked. They are also subject to
option agreements and legislation defined by the local government;
if this legislation is changed or option payments are not made on
time, it could adversely affect the value of the Group's
assets.
Dependence on key personnel
The Group is dependent upon its executive management team and
various technical consultants. Whilst it has entered into
contractual agreements with the aim of securing the services of
these personnel, the retention of their services cannot be
guaranteed. The development and success of the Group depends on its
ability to recruit and retain high quality and experienced staff.
The loss of the service of key personnel or the inability to
attract additional qualified personnel as the Group grows could
have an adverse effect on future business and financial
conditions.
Uninsured risk
The Group, as a participant in exploration and development
programmes, may become subject to liability for hazards that cannot
be insured against or third-party claims that exceed the insurance
cover. The Group may also be disrupted by a variety of risks and
hazards that are beyond control, including geological, geotechnical
and seismic factors, environmental hazards, industrial accidents,
occupational and health hazards and weather conditions or other
acts of God.
Royalty acquisitions risk
The growth and viability of the Group is dependent on its
ability to successfully identify and acquire royalties. The
availability of potential royalties which meet the Group's
investing policy will depend, inter alia, on the state of the world
economy, general business conditions, commodity prices, mining
sector appetite, alternative sources of finance and financial
markets generally.
Funding risk
The only sources of funding currently available to the Group are
through the issue of additional equity capital in the parent
company, drawdown additional equity through the Crescita Capital
Facility or through bringing in partners to fund exploration and
development costs. The Group's ability to raise further funds will
depend on the success of the Group's exploration activities and its
investment strategy. The Group may not be successful in procuring
funds on terms which are attractive and, if such funding is
unavailable, the Group may be required to reduce the scope of its
exploration activities or relinquish some of the exploration
licences held for which it may incur fines or penalties.
Financial risks
The Group's operations expose it to a variety of financial risks
that can include market risk (including foreign currency, price and
interest rate risk), credit risk, and liquidity risk. The Group has
a risk management programme in place that seeks to limit the
adverse effects on the financial performance of the Group by
monitoring levels of debt finance and the related finance costs.
The Group does not use derivative financial instruments to manage
interest rate costs and, as such, no hedge accounting is
applied.
Investment risks
The Group holds investments in publicly listed and non-listed
securities. These future valuations are determined by many factors
but include the operational and financial performance of the
underlying investee companies, as well as market perceptions of the
future of the economy and its impact upon the economic environment
in which these companies operate. This risk represents the
potential loss that the Group might suffer through holding its
financial investment portfolio in the face of market movements.
Details of the Group's financial risk management policies are
set out in Note 3 to the Financial Statements.
Going Concern
The consolidated financial statements have been prepared under
the going concern assumption. Under the going concern assumption,
an entity is ordinarily viewed as continuing in business for the
foreseeable future with neither the intention nor the necessity of
liquidation, ceasing trading or seeking protection from creditors
pursuant to laws or regulations.
The Directors are confident that this funding will continue and
consider that the Group will have access to adequate resources to
meet operational requirements for at least 12 months from the date
of approval of these financial statements. On this basis, the
Directors have formed a judgement, at the time of approving the
Financial Statements, that there is a reasonable expectation that
the Group has access to adequate resources to continue in
operational existence for the foreseeable future. For this reason,
the Directors have adopted the going concern basis in preparing the
Financial Statements.
Internal Controls
The Board recognises the importance of both financial and
non-financial controls and has reviewed the Group's control
environment and any related shortfalls during the year. Since the
Group was established, the Directors are satisfied that, given the
current size and activities of the Group, adequate internal
controls have been implemented. The Directors are aware that no
system can provide absolute assurance against material misstatement
or loss, however, in light of the current activity and proposed
future development of the Group, continuing reviews of internal
controls will be undertaken to ensure that they are adequate and
effective.
Section 172(1) Statement - Promotion of the Company 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 Company 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:
-- Consider the likely consequences of any decision in the long term,
-- Act fairly between the members of the Company,
-- Maintain a reputation for high standards of business conduct,
-- Consider the interests of the Company's employees,
-- Foster the Company's relationships with suppliers, customers and others, and
-- Consider the impact of the Company's operations on the community and the environment.
The Group operates as a project generation and royalty business
for the natural resources sectors, which is inherently speculative
in nature and, without regular income, is dependent upon
fund-raising for its continued operation. The 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 FCA regulations. The application of the s172
requirements are demonstrated throughout this report and the
financial statements as a whole, with the following examples
representing some of the key decisions made in 2021 and up to the
date of the approval of these financial statements:
-- Remunerate the Directors with share options in lieu of cash:
during the year, having decided on a plan to raise new funds to
finance operations, the Directors also decided that to maximise
funds available for exploration the Directors would be remunerated
in part by share options instead of cash. This has the added
benefit of more fully aligning the interests of the Directors with
those of the members.
-- Ethical responsibility to the community and the environment:
the Board takes seriously its ethical responsibilities to the
communities and environment in which it works. We abide by the
local and relevant UK laws on anti-corruption and bribery. Wherever
possible, local communities are engaged in the geological
operations and support functions required for field operations,
providing much needed employment and wider economic benefits to the
local communities. In addition, we follow international best
practise on environmental aspects of our work. Our goal is to meet
or exceed standards, in order to ensure we obtain and maintain our
social licence to operate from the communities with which we
interact.
-- Appointment of new director : Expanding organisational
capability through appointing experienced Board members to govern
and lead the Company.
-- Securing new partners for exploration properties: During the
year, the Group continued to expand their exploration properties
and secure new option agreements for these properties which
continues to generate revenue for the Group.
The need to act fairly between members of the Company
After weighing up all relevant factors, the Directors consider
which course of action best enables delivery of our strategy over
the long-term, taking into consideration the impact on
stakeholders. The Directors believe they have acted in the way they
consider most likely to promote the success of the Company for the
benefit of its members as a whole.
The Board is committed to maintaining good communication and
having constructive dialogue with its shareholders. The Company has
close ongoing relationships with key private shareholder, analysts
and brokers, providing the opportunity to discuss issues and
provide feedback at meetings with the Company. All shareholders are
encouraged to attend the Company's Annual General Meeting and any
general meetings held by the Company.
The desirability of the Company maintaining a reputation for
high standards of business conduct
The Board periodically reviews and approves clear frameworks,
such as the Company's Code of Business Ethics, to ensure that its
high standards are maintained both within the Group and the
business relationships we maintain. This, complemented by the
various ways the Board is informed and monitors compliance with
relevant governance standards, help ensure its decisions are taken
and that the Group acts in ways that promote high standards of
business conduct.
Developing relationships with the option agreement partners,
suppliers and others
Delivering on our strategy requires strong mutually beneficial
relationships with suppliers. The Group values all of its suppliers
and aims to build strong positive relationships through open
communication and adherence option agreement terms. The Group is
committed to being a responsible entity and doing the right thing
for its suppliers and business partners.
The impact of the Company's operations on the community and the
environment
The Group is committed to the highest environmental, social and
governance standards both internally within the Group and
externally with its partners. The Group is committed to being a
responsible entity in terms of the community and the wider
environment.
Conclusion
The Directors believe that to the best of their wisdom and
abilities, they have acted in the way they consider prudent to
promote the success of the Company for the benefit of its members
as a whole, in the true spirit of the provisions of Section 172 (1)
of the Companies Act 2006.
DIRECTORS REPORT
The Directors are pleased to present their Report and the
audited consolidated Financial Statements of the Company and its
subsidiaries for the year ended 30 June 2022.
Results and Dividends
Loss on ordinary activities of the Group after taxation amounted
to GBP5,557,029 (2021: loss of GBP902,060). The Directors do not
recommend the payment of a dividend (2021: GBPNil).
Directors & Directors' interests
The Directors who held office at 30 June 2022 had the following
beneficial interests in shares and options of the Group:
30 June 2022 30 June 2021
------------------------- -------------------------
Ordinary Options Ordinary Options
Shares Shares
----------------------- ------------ ----------- ------------ -----------
Samuel "Kyler" Hardy 91,626,929 1,500,000 62,458,704 1,500,000
----------------------- ------------ ----------- ------------ -----------
Emma Priestley 2,000,000 1,100,000 2,000,000 500,000
----------------------- ------------ ----------- ------------ -----------
Andrew Male 2,000,000 600,000 2,000,000 -
----------------------- ------------ ----------- ------------ -----------
Kyle Hookey (1) - - 3,445,588 500,000
----------------------- ------------ ----------- ------------ -----------
Paul Gurney (2) - - 600,000 -
----------------------- ------------ ----------- ------------ -----------
Total 95,626,929 3,200,000 70,504,292 2,500,000
----------------------- ------------ ----------- ------------ -----------
(1) Kyle Hookey resigned on 20 January 2022
(2) At 30 June 2021, Paul Gurney held 600,000 shares which were
sold in February 2022. Paul wasn't appointed as a Director until 14
April 2022.
Substantial shareholders
On 28 October 2022, the following parties had notified the Group
of a beneficial interest that represents 3% or more of the Group's
issued share capital at those dates:
28 October 2022
--------------------------
Holding Percentage
--------------------- ------------ ------------
Samuel Kyler Hardy 91,626,929 18.96%
--------------------- ------------ ------------
Corporate responsibility
Greenhouse gas emissions
Given the nature of its activities which include aerial
geophysics with a helicopter and the operation of drill rigs, the
Group is conscious of greenhouse gas emissions. The Directors are
mindful of their responsibilities in this regard and strive to seek
opportunities where improvements may be made.
The Board recognises its responsibility to protect the
environment and is fully committed to conserving natural resources
and striving for environmental sustainability, by ensuring that its
facilities are operated to optimise energy usage; minimise waste
production; and protect nature and people.
The Group is currently deemed to be a low energy user meaning it
has consumed less that 40MWh of energy during the reporting period.
This includes the combustion of gas, consumption of fuel for
transport and the purchase of electricity for its own use. As such,
it is exempt from disclosing actual kWh of energy emitted during
the period from its operations and activities.
As the Group's operations scale up, it will continue to monitor
its energy use and its status as a low energy user. The Group will
seek to collect, structure, and effectively disclose related
performance data for the material, climate-related risks and
opportunities identified where relevant.
Internal controls
The Board recognises the importance of both financial and
non-financial controls and has reviewed the Group's control
environment and any related shortfalls during the period. Since the
Group was established, the Directors are satisfied that, given the
current size and activities of the Group, adequate internal
controls have been implemented. Whilst they are aware that no
system can provide absolute assurance against material misstatement
or loss, in light of the current activity and proposed future
development of the Group, continuing reviews of internal controls
will be undertaken to ensure that they are adequate and
effective.
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.
Going concern
The Consolidated Financial Statements have been prepared on a
going concern basis. Although the Group's assets are not generating
revenues and an operating loss has been reported, the Directors are
of the view that the Group has sufficient funds to meet all
committed and contractual expenditure within the next 12 months and
to maintain good title to the exploration licences. This will
ensure they will still be in a strong financial position once they
are able to re-commence exploration activity.
The Group's business activities together with the additional
factors likely to affect its future development, performance and
position are set out in the Chairman's Report on pages 3 & 4.
In addition, Note 3 to the Consolidated Financial Statements
includes the Group's objectives, policies and processes for
managing its capital; its financial risk management objectives;
details of its financial instruments and its exposure to market,
credit and liquidity risk.
Directors' and Officers' indemnity insurance
The Group has made qualifying third-party indemnity provisions
for the benefit of its Directors and Officers. These were made
during the period and remain in force at the date of this
report.
Financial risk management objectives
The Group has disclosed the financial risk management objectives
within Note 3 to these Financial Statements.
Events after the reporting period
Events after the reporting period are set out in Note 24 to the
Financial Statements.
Future developments
Details of future developments for the Group are disclosed in
the Chairman's Report on page 3.
Provision of information to Auditor
So far as each of the Directors is aware at the time this report
is approved:
-- 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 to make themselves aware of any relevant audit information
and to establish that the auditor is aware of that information.
Auditor
PKF Littlejohn LLP has signified its willingness to continue in
office as auditor.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
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 Group and Company Financial Statements
in accordance with UK-adopted international accounting standards.
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 Company, and of the
profit or loss of the Group for that period. In preparing these
Financial Statements, the Directors are required to:
select suitable accounting policies and then apply them
consistently;
make judgments and accounting estimates that are reasonable and
prudent;
state whether applicable UK-adopted international accounting
standards have been followed, subject to any material departures
disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group will continue
in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group's and
Company's transactions and disclose with reasonable accuracy at any
time the financial position of the Group and Company, and enable
them to ensure that the Financial Statements comply with the
Companies Act 2006. They are also responsible for safeguarding the
assets of the Group and Company, and hence for taking reasonable
steps for the prevention and detection of fraud and other
irregularities.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website, www.cloudbreakdiscovery.com. Legislation in the
United Kingdom governing the preparation and dissemination of the
Financial Statements may differ from legislation in other
jurisdictions.
The Directors confirm that they have complied with the above
requirements in preparing the Financial Statements.
CORPORATE GOVERNANCE REPORT
As a Group listed on the Standard Segment of the Official List
of the UK Listing Authority, the Group is not required to comply
with the provisions of the UK Corporate Governance Code. However,
the Board is committed to maintaining high standards of corporate
governance and so far, as appropriate given the Group's size and
the constitution of the Board, complies and intends to comply with
The Corporate Governance Guidelines for Small and Mid-Sized
Companies (the "QCA Code").
In light of the Group's size and recent history, the Group has
deviated from the QCA Code in the following respects:
-- The provisions relating to the composition of the Board and
the division of responsibilities are not being complied with as the
Board feels these provisions to be inapplicable, given the size of
the Group.
-- The Board do not consider an internal audit function to be
applicable due to the size of the Group.
-- A diversity policy as applied to the Group's administrative
management and supervisory bodies has not yet been developed.
The Directors are responsible for internal control in the Group
and for reviewing effectiveness. Due to the size of the Group, all
key decisions are made by the Board. The Directors have reviewed
the effectiveness of the Group's systems during the period under
review and consider that there have been no material losses,
contingencies or uncertainties due to weaknesses in the
controls.
The Group will hold timely board meetings as issues arise which
require the attention of the Board. The Board is responsible for
the management of the business of the Group, setting the strategic
direction of the Group and establishing the policies of the Group.
It is the Directors' responsibility to oversee the financial
position of the Group and monitor the business and affairs of the
Group, on behalf of the Shareholders, to whom they are accountable.
The primary duty of the Directors is to act in the best interests
of the Group at all times. The Board also addresses issues relating
to internal control and the Group's approach to risk management and
has formally adopted an anti-corruption and bribery policy.
The Directors have established an audit committee, a nomination
committee and a remuneration committee with formally delegated
duties and responsibilities. Emma Priestley and Paul Gurney are
each considered by the Board to be an independent Non-Executive
Director. At the date of release, Andrew Male is considered to be
an Executive Director.
The QCA Code has ten principles of corporate governance that the
Group has committed to apply within the foundations of the
business. These principles are:
1. Establish a strategy and business model which promote long-term value for shareholders;
2. Seek to understand and meet shareholder needs and expectations;
3. Take into account wider stakeholder and social
responsibilities and their implications for long term success;
4. Embed effective risk management, considering both
opportunities and threats, throughout the organisation;
5. Maintain the board as a well-functioning balanced team led by the Chair;
6. Ensure that between them the directors have the necessary up
to date experience, skills and capabilities;
7. Evaluate board performance based on clear and relevant
objectives, seeking continuous improvement;
8. Promote a corporate culture that is based on ethical values and behaviours;
9. Maintain governance structures and processes that are fit for
purpose and support good decision-making by the Board; and
10. Communicate how the Group is governed and is performing by
maintaining a dialogue with shareholders and other relevant
stakeholders.
There follows a short explanation of how the Group will apply
each of the principles:
Principle One
Business Model and Strategy
The Board has determined that the best medium and long term
value can be delivered through the adoption of a single strategy.
The Group's principal activity is natural resource project and
royalty generation as well as acquisition of projects and
royalties. Cloudbreak maximizes its returns by seeking buyers to
purchase its properties or by seeking partners to jointly develop
its properties through joint ventures or other partnering
mechanisms.
Principle Two
Understanding Shareholder Needs and Expectations
The Board is committed to maintaining good communication and
having constructive dialogue with its shareholders. Shareholders
are encouraged to attend the Group's Annual General Meeting
("AGM"). Investors also have access to current information on the
Group though its website, www.cloudbreakdiscovery.com, and via
Kyler Hardy, Chief Executive Officer, and Andrew Male, Executive
Director who are responsible for shareholder liaison and are
available to answer investor relations enquiries. Shareholders can
email the Group at info@cloudbreakdiscovery.com or via a submission
on the Group website.
The Group's Annual Report, Notice of AGM are sent to all
shareholders and can be downloaded from our website. Copies of the
interim report and other investor presentations are also available
on the Group's website. Shareholders are kept up to date via
regulatory news flow ("RNS") on matters of a material substance and
regulatory nature.
Periodic updates are provided to the market and any deviations
to these updates are announced via RNS. At the AGM, separate
resolutions are proposed on each substantial issue. For each
proposed resolution, proxy forms are issued which provide voting
shareholders with an opportunity to vote in advance of the AGM if
they are unable to vote in person. Our registrars, count the proxy
votes which are properly recorded, and the results of the AGM are
announced through an RNS.
The Board is keen to ensure that the voting decisions of
shareholders are reviewed and monitored and that approvals sought
at the Group's AGM are as much as possible within the recommended
guidelines of the QCA Code. Non-deal roadshows will be arranged
throughout the year to meet with existing shareholders and
potential new stakeholders to maintain, as much as possible,
transparency and dialogue with the market. Additionally, investor
presentations can be found on the Group's website.
Principle Three
Considering Wider Stakeholder and Social Responsibilities
The Board recognises that the long-term success of the Group is
reliant upon open communication with its internal and external
stakeholders: investee companies, shareholders, contractors,
suppliers, regulators and other stakeholders. The Group has close
ongoing relationships with a broad range of its stakeholders and
provides them via regular contact with the opportunity to raise
issues and provide feedback to the Group. The Board regularly
reviews and assesses its key resources and relationships and has
established processes and systems to ensure that there is close
oversight and contact with its minority investee companies and key
stakeholders.
Principle Four
Risk Management
The Board is responsible for ensuring that procedures are in
place and being implemented effectively to identify, evaluate and
manage the significant risks faced by the Group, noting that the
Group is primarily an operating company with some remaining
minority investments in portfolio companies. A risk assessment
matrix has been established by the Group and is updated at regular
intervals. The following principal risks, and controls to mitigate
them, have been identified:
Risk. Impact Probability Risk Level Mitigating Risk Accept
Actions & Owner
Controls
Exploration High Low Medium Experience CEO Yes
risks of the Board
and the technical
senior management
team;
-------- ------------- ------------ --------------------- -------- --------
Dependence High Medium Low Key management CEO Yes
on key have significant
personnel equity;
Share options
awarded;
Exciting
business
opportunities
-------- ------------- ------------ --------------------- -------- --------
Uninsured Medium Low Low Group's exploration CEO Yes
risk programmes
are in the
early stages
with no mine
development
or operations
in place
as of yet
-------- ------------- ------------ --------------------- -------- --------
Funding High Medium Medium Cash on hand, CEO Yes
risk investments
held and
bought deal
equity facility
in place
sufficient
to fund the
Comely for
the foreseeable
future.
-------- ------------- ------------ --------------------- -------- --------
Financial High Medium Medium No debt held CEO Yes
risks by the Group.
Audit Committee
-------- ------------- ------------ --------------------- -------- --------
Investment High Medium Medium Investments CEO Yes
risk are held
in both listed
and unlisted
entities
and the board
monitor their
investments
in a regular
basis. For
unlisted
investments
the board
attempt to
have regular
communication
with the
management
team of the
investee.
-------- ------------- ------------ --------------------- -------- --------
Principle Five
A Well Functioning Board of Directors
The Board comprises the Chairman and Chief Executive Officer,
Kyler Hardy, Executive Director, Andrew Male (effective from
release of these accounts) and two Non-Executive Directors, Paul
Gurney and Emma Priestley. Biographical details of the current
Directors are set out on the Company's website. Executive and
Non-Executive Directors are subject to re-election in accordance
with both the requirements of the UK Companies Act 2006 and the
Group's articles of association ("Articles"). The Group's Articles
state that Directors are subject to re-election at intervals of no
more than three years. The letters of appointment for all Directors
stipulate the time commitment that each Director is expected to
provide to the Group. The Board Chairman serves as chair of every
meeting of the Board of Directors.
The Board meets at least twice per year. It has established an
Audit Committee, the members of which are Paul Gurney and Emma
Priestley. The Nominations Committee consists of Emma Priestley
(Chair) and Paul Gurney. A Remuneration Committee has been
established and is composed of Emma Priestley (chair) and Paul
Gurney.
Emma Priestley and Paul Gurney are considered to be independent
Directors and as such the Group is in compliance with the
requirement to have a minimum of two independent Non-Executive
Directors on its Board.
The Board shall review further appointments.
The Group reports annually in the Directors' Report on the
number of Board and committee meetings held during the year and the
attendance record of individual Directors. To date, in the current
financial year, the Directors have a 100% record of attendance at
such meetings. Directors meet formally and informally both in
person and by telephone.
Principle Six
Appropriate Skills and Experience of the Directors
The Board currently consists of four Directors. Westend
Corporate LLP acts as the Company Secretary. The Group believes
that the current balance of skills in the Board as a whole,
reflects a very broad range of commercial and professional skills
across geographies and industries and all of the Directors have
experience in the natural resources sector and public markets.
Information about the directors can be found on the website.
The Board is kept abreast with developments of governance and
London Stock Exchange ("LSE") regulations. The Group's lawyers
provide updates on governance issues. The Directors have access to
the Group's company secretary, lawyers and auditors as and when
required and are able to obtain advice from other external bodies
when necessary.
Principle Seven
Evaluation of Board Performance
Internal evaluation of the Board, the Committees and individual
Directors is undertaken on an annual basis in the form of peer
appraisal and discussions to determine the effectiveness and
performance against targets and objectives, as well as the
Directors' continued independence. As a part of the appraisal the
appropriateness and opportunity for continuing professional
development whether formal or informal is discussed and
assessed.
Principle Eight
Corporate Culture
The Board recognises that their decisions regarding strategy and
risk will impact the corporate culture of the Group as a whole,
which in turn will impact the Group's performance. The Directors
are very aware that the tone and culture set by the Board will
greatly impact all aspects of the Group as a whole and the way that
consultants or other representatives behave. The corporate
governance arrangements that the Board has adopted are designed to
instil a firm ethical code to be followed by Directors, employees,
consultants and representatives alike throughout the entire
organisation. The Group strives to achieve and maintain an open and
respectful dialogue with employees, representatives, regulators,
suppliers and other stakeholders. Therefore, the importance of
sound ethical values and behaviours is crucial to the ability of
the Group to successfully achieve its corporate objectives. The
Board places great importance on this aspect of corporate life and
seeks to ensure that this flows through all that the Group does.
The Directors consider that at present the Group has an open
culture facilitating comprehensive dialogue and feedback and
enabling positive and constructive challenge. The Group has
adopted, with effect from the date on which its shares were
admitted to LSE, a code for Directors' dealings in securities which
is appropriate for a company whose securities are traded on LSE and
is in accordance with the requirements of the Market Abuse
Regulation which came into effect in 2016.
Issues of bribery and corruption are taken seriously, the Group
has a zero-tolerance approach to bribery and corruption and has an
anti-bribery and corruption policy in place to protect the Group,
its employees and those third parties to which the business engages
with. The policy is provided to staff upon joining the business and
training is provided to ensure that all employees within the
business are aware of the importance of preventing bribery and
corruption. Each employment contract specifies that the employee
will comply with the policies. There are strong financial controls
across the business to ensure on going monitoring and early
detection.
Principle Nine
Maintenance of Governance Structures and Processes
The Audit Committee is chaired by Paul Gurney with Emma
Priestley being the other member. The Board has adopted appropriate
delegations of authority which set out matters which are reserved
for the Board. The Chairman is responsible for the effectiveness of
the Board as well as primary contact with shareholders, while, as
an operating company, execution of the Group's strategy is
delegated to the Chief Executive Officer.
The Audit Committee has primary responsibility for monitoring
the quality of internal controls and ensuring that the financial
performance of the Group is properly measured and reported. It
receives reports from Group advisors and auditors relating to the
interim and annual accounts and the accounting and internal control
systems in use throughout the Group. The Audit Committee meets not
less than twice in each financial year, and it has unrestricted
access to the Group's auditors.
In accordance with the Companies Act 2006, the Board complies
with: a duty to act within their powers; a duty to promote the
success of the Group; a duty to exercise independent judgement; a
duty to exercise reasonable care, skill and diligence; a duty to
avoid conflicts of interest; a duty not to accept benefits from
third parties and a duty to declare any interest in a proposed
transaction or arrangement. The Board notes requirement for the
Group to meet the LSE Rules for Companies such that the Group is
suitable at all times to remain admitted to trading on LSE. This
includes the requirement for a governance structure compatible with
this requirement.
The Board retains full and effective control over the Group and
holds regular meetings at which financial, operational and other
reports are considered and where appropriate voted upon. The Board
is responsible for the Group's strategy and key financial and
compliance issues.
There are certain matters that are reserved for the Board, they
include:
-- approval of the Group's strategic aims and objectives;
-- Review of Group performance and ensuring that any necessary corrective action is taken;
-- Extension of the Group's activities into new business or geographical areas;
-- Any decision to cease to operate all or any part of the Group's business;
-- Major changes to the Group's corporate structure and management and control structure;
-- Any changes to the Group's listing;
-- Changes to governance and key business policies;
-- Ensuring maintenance of a sound system of internal control and risk management;
-- Approval of half yearly and Annual Report and accounts and
preliminary announcements of final year results;
-- Reviewing material contracts and contracts not in the ordinary course of business.
As the Group grows, the Directors will ensure that the
governance framework remains in place to support the development of
the business.
Principle Ten
Shareholder Communication
The Board is committed to maintaining good communication and
having constructive dialogue with its shareholders in compliance
with regulations applicable to companies quoted on the LSE market.
All shareholders are encouraged to attend the Group's AGM where
they will be given the opportunity to interact with the
Directors.
Investors also have access to current information on the Group
though its website, www.cloudbreakdiscovery.com, and via Kyler
Hardy, Chief Executive Officer, who is available to answer investor
relations enquiries.
The Group shall include, when relevant, in its Annual Report,
any matters of note arising from the Audit Committee (none for the
current year).
Copies of all Annual Reports, Notices of Meetings, Circulars
sent to shareholders and Admission Documents (in respect of the
last five years) are included on the Group's website.
If a significant proportion of votes was ever cast against a
resolution by shareholders in General Meeting, the Group would, on
a timely basis, provide an explanation of what actions it intends
to take to understand the reasons behind that vote result, and,
where appropriate, any different action it has taken, or will take,
as a result of the vote.
STATEMENT OF FINANCIAL POSITION
As at 30 June 2022 Company number: 06275976
Group Company
---------------------------- ----------------------------
30 June 30 June 30 June 30 June
2022 2021 2022 2021
Note GBP GBP GBP GBP
------------------------------------ ------ ------------- ------------- ------------- -------------
Non-Current Assets
Royalty asset 7 1 1 - -
Intangible assets 5 78,694 30,679 - -
Investments 6 2,069,302 4,353,318 68,056 107,679
Investment in subsidiaries 6 - - 7,252,886 6,485,487
Convertible debenture receivables 8 1,657,900 - 1,657,900 -
3,805,897 4,383,998 8,978,842 6,593,166
------------------------------------ ------ ------------- ------------- ------------- -------------
Current Assets
Trade and other receivables 10 1, 300,634 522,230 1,676,619 514,849
Cash and cash equivalents 11 310,578 1,277,617 124,118 1,232,385
------------------------------------ ------ ------------- ------------- ------------- -------------
1,611,212 1,799,847 1,800,737 1,747,234
------------------------------------ ------ ------------- ------------- ------------- -------------
Total Assets 5,417,109 6,183,845 10,779,579 8,340,400
------------------------------------ ------ ------------- ------------- ------------- -------------
Current Liabilities
Trade and other payables 13 1,395,910 895,264 1,357,254 449,885
1,395,910 895,264 1,357,254 449,885
------------------------------------ ------ ------------- ------------- ------------- -------------
Total Liabilities 1,395,910 895,264 1,357,254 449,885
------------------------------------ ------ ------------- ------------- ------------- -------------
Net Assets 4,021,199 5,288,581 9,422,325 7,890,515
------------------------------------ ------ ------------- ------------- ------------- -------------
Equity attributable to owners
of the Parent
Share capital 14 654,129 560,520 654,129 560,520
Share premium 14 14,821,521 10,905,507 14,821,521 10,905,507
Other reserves 16 599,093 511,501 297,397 407,656
Reverse asset acquisition
reserve (4,134,019) (4,134,019) - -
Retained losses (7,919,525) (2,554,928) (6,350,722) (3,983,168)
------------------------------------ ------ ------------- ------------- ------------- -------------
Total Equity 4,021,199 5,288,581 9,422,325 7,890,515
------------------------------------ ------ ------------- ------------- ------------- -------------
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2022
Year ended Year ended
30 June 30 June
2022 2021
Continued operations Note GBP GBP
---------------------------------------------------- ------ --------------- -------------
Profit on disposal of exploration & evaluation
asset sales 559,523 2,560,070
Administrative expenses 23 (3,308,214) (3,238,057)
Foreign exchange gain/(losses) 39,380 (193,772)
Operating loss (2,709,311) (871,759)
Finance income 19 154,518 46,587
Other income 11,233 -
Other gains/(losses) 20 8,332 -
Impairment of loans 9 (184,365) (1,502,671)
Unrealised fair value gain/(loss) on investments 6 (2,837,437) 1,425,783
Loss before income tax (5,557,029) (902,060)
Income tax 21 - -
---------------------------------------------------- ------ --------------- -------------
Loss for the year attributable to owners
of the Parent (5,557,029) (902,060)
---------------------------------------------------- ------ --------------- -------------
Basic and Diluted Earnings Per Share attributable
to owners of the Parent during the period
(expressed in pence per share) (0.01)p (0.85)p
---------------------------------------------------- ------ --------------- -------------
Year ended Year ended
30 June 30 June
2022 2021
GBP GBP
---------------------------------------------- ------------- ------------
Loss for the period (5,557,029) (902,060)
Other Comprehensive Income:
Items that may be subsequently reclassified
to profit or loss
Currency translation differences 233,866 27,744
----------------------------------------------- ------------- ------------
Other comprehensive income for the period,
net of tax (5,323,163) (874,316)
----------------------------------------------- ------------- ------------
Total Comprehensive Income attributable
to owners of the parent (5,323,163) (874,316)
----------------------------------------------- ------------- ------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2022
Reverse
asset
Share Share acquisition Other Retained
capital premium reserve reserves losses Total
Note GBP GBP GBP GBP GBP GBP
-----------
Balance as at
30 June 2020 50,120 2,163,168 - 36,645 (1,652,868) 597,065
-------------------- ---- ----------- ---------------- ------------------ ------------- --------------- -------------
Loss for the year - - - - (902,060) (902,060)
-------------------- ---- ----------- ---------------- ------------------ ------------- --------------- -------------
Other
comprehensive
income for the
year - - - - - -
Items that may
be subsequently
reclassified to
profit or loss - - - - - -
-------------------- ---- ----------- ---------------- ------------------ ------------- --------------- -------------
Currency
translation
differences - - - 27,744 - 27,744
-------------------- ---- ----------- ---------------- ------------------ ------------- --------------- -------------
Total
comprehensive
income for the
year - - - 27,744 (902,060) (874,316)
-------------------- ---- ----------- ---------------- ------------------ ------------- --------------- -------------
Issue of shares 14 30,475 55,373 - - - 85,848
Transfer to
reverse
acquisition
reserve 14 (80,595) (2,218,542) 2,259,668 39,469 - -
Recognition of
Cloudbreak
Discovery
Plc equity at
reverse
acquisition 14 460,423 7,969,714 (6,393,687) - - 2,036,450
Warrants assumed
- Reverse
take-over - - - 37,971 - 37,971
Options assumed
- Reverse
take-over - - - 211,978 - 211,978
Issue of shares 100,097 2,935,793 - 157,695 - 3,193,585
Total transactions
with owners,
recognised
directly in
equity 510,400 8,742,338 (4,134,019) 447,113 - 5,565,832
Balance as at
30 June 2021 560,520 10,905,507 (4,134,019) 511,501 (2,554,928) 5,288,581
-------------------- ---- ----------- ---------------- ------------------ ------------- --------------- -------------
Balance as at
1 July 2021 560,520 10,905,507 (4,134,019) 511,501 (2,554,928) 5,288,581
-------------------- ---- ----------- ---------------- ------------------ ------------- --------------- -------------
Loss for the year - - - - (5,557,029) (5,557,029)
-------------------- ---- ----------- ---------------- ------------------ ------------- --------------- -------------
Other
comprehensive
income for the
year - - - - - -
Items that may
be subsequently
reclassified to
profit or loss - - - - - -
Currency
translation
differences - - - 233,866 - 233,866
Total
comprehensive
income for the
year - - - 233,866 (5,557,029) (5,323,163)
Issue of shares 14 93,609 3,994,527 - - - 4,088,136
Issue costs 14 - (78,513) - - - (78,513)
Options Granted 16 - - - 11,238 - 11,238
Warrants Granted 16 - - - 30,075 - 30,075
Options Exercised 16 - - - (24,962) 24,962 -
Share Options
Expired 16 - - - (112,406) 112,406 -
Share Options
Cancelled 16 - - - (1,180) 1,180 -
Warrants Exercised 16 - - - (13,024) 13,024 -
Other equity
movement 16 - - - 4,845 - 4,845
Elimination of
other reserves 16 - - - (40,860) 40,860 -
Total transactions
with owners,
recognised
directly in
equity 93,609 3,916,014 - (146,274) 192,432 4,055,781
-------------------- ---- ----------- ---------------- ------------------ ------------- --------------- -------------
Balance as at
30 June 2022 654,129 14,821,521 (4,134,019) 599,093 (7,919,525) 4,021,199
-------------------- ---- ----------- ---------------- ------------------ ------------- --------------- -------------
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2022
Equity
Share Share to be Other Retained Total
capital premium issued reserves losses equity
Note GBP GBP GBP GBP GBP GBP
Balance as at
30 June 2020 227,586 1,328,494 15,200 112,406 (1,720,602) (36,916)
----------------------- ------ ---------- ------------ ------------ ----------- ------------- -------------
Loss for the
year - - - - (2,262,566) (2,262,566)
----------------------- ------ ---------- ------------ ------------ ----------- ------------- -------------
Total comprehensive
income for the
year - - - - (2,262,566) (2,262,566)
----------------------- ------ ---------- ------------ ------------ ----------- ------------- -------------
Issue of shares
- Acquisition
of Cloudbreak
Canada Subsidiary 216,183 6,269,294 - - - 6,485,477
Issue of shares 116,751 3,307,719 (15,200) 195,678 - 3,604,948
Options granted - - - 99,572 - 99,572
Total transactions
with owners,
recognised directly
in equity 332,934 9,577,013 (15,200) 295,250 - 10,189,997
Balance as at
30 June 2021 560,520 10,905,507 - 407,656 (3,983,168) 7,890,515
----------------------- ------ ---------- ------------ ------------ ----------- ------------- -------------
Balance as at
30 June 2021 560,520 10,905,507 - 407,656 (3,983,168) 7,890,515
----------------------- ------ ---------- ------------ ------------ ----------- ------------- -------------
Loss for the
year - - - - (2,523,971) (2,523,971)
----------------------- ------ ---------- ------------ ------------ ----------- ------------- -------------
Total comprehensive
income for the
year - - - - (2,523,971) (2,523,971)
----------------------- ------ ---------- ------------ ------------ ----------- ------------- -------------
Issue of shares 14 93,609 3,994,527 - - - 4,088,136
Issue Costs 14 - (78,513) - - - (78,513)
Options granted 16 - - - 11,238 - 11,238
Warrants Granted 16 - - - 30,075 - 30,075
Options Exercised 16 - - - (24,962) 24,962 -
Share Options
Expired 16 - - - (112,406) 112,406 -
Share Options
Cancelled 16 - - - (1,180) 1,180 -
Warrants Exercised 16 (13,024) 13,024 -
Other equity
movement 16 - - - 4,845 - 4,845
Elimination of
other reserves 16 - - - (4,845) 4,845 -
Total transactions
with owners,
recognised directly
in equity 93,609 3,916,014 - (110,259) 156,417 4,055,781
----------------------- ------ ---------- ------------ ------------ ----------- ------------- -------------
Balance as at
30 June 2022 654,129 14,821,521 - 297,397 (6,350,722) 9,422,325
----------------------- ------ ---------- ------------ ------------ ----------- ------------- -------------
STATEMENTS OF CASH FLOWS
For the year ended 30 June 2022
Group Company
---------------------------- ------------------------------
Year
ended Year ended Year ended Year ended
30 June 30 June 30 June 30 June
2022 2021 2022 2021
Note GBP GBP GBP GBP
------------------------------------- ------ ------------- ------------- --------------- -------------
Cash flows from operating
activities
Loss before income tax (5,557,029) (902,060) (2,523,981) (2,262,566)
Adjustments for:
Exploration and evaluation
asset sales (559,523) (2,186,891) - -
Other income (11,233) - - -
Other gains (8,332) - - -
Change in fair value of
investments 2,837,437 (1,425,783) 39,623 (4,173)
Impairment of loans 184,365 1,502,671 123,486 1,035,990
Interest income (154,518) (36,021) (101,367) -
Intercompany sales - - (406,186) -
Unrealised foreign exchange/(loss) 44,615 (155,069) (73,125) 4,617
Finance charge 23 - 200,000 - 200,000
Listing fee 23 - 2,365,634 - -
Share option expenses 23 41,325 41,325 -
Stock based compensation 1,770,000 - 1,770,000 137,553
Decrease/(Increase) in trade
and other receivables 10 (776,342) (406,449) (766,999) (474,831)
Increase/(Decrease) in trade
and other payables 13 491,807 (542,836) 907,376 338,511
Net cash used in operating
activities (1,697,428) (1,586,804) (989,848) (1,024,899)
------------------------------------- ------ ------------- ------------- --------------- -------------
Cash flows from investing
activities
Funds received on sale
of investment 6 210,178 195,510 - -
Funds spent on investment 6 (181,937) (173,786) - (103,506)
Funds received on sale
of exploration assets 5 97,508 - - -
Loans to subsidiaries 6 - - (762,391) -
Cash received in reverse
take-over - 860,389 - -
Exploration and evaluation
expenses (41,786) (29,675) - -
Convertible debenture receivable 8 (1,595,635) - (1,595,635) -
Net cash generated from
(used in) investing activities (1,511,672) 852,438 (2,358,026) (103,506)
------------------------------------- ------ ------------- ------------- --------------- -------------
Cash flows from financing
activities
Proceeds from issue of
share capital 14 2,318,120 2,008,773 2,318,120 2,326,358
Shares cancelled - (3,268) - -
Cost of shares issued 1 4 (78,513) - (78,513) -
Net cash generated from
financing activities 2,239,607 2,005,505 2,239,607 2,326,358
------------------------------------- ------ ------------- ------------- --------------- -------------
Net decrease/(increase)
in cash and cash equivalents (969,493) 1,271,139 (1,108,267) 1,197,953
Cash and cash equivalents
at beginning of year 11 1,277,617 6,478 1,232,385 34,432
Exchange gain on cash and
cash equivalents 2,454 - - -
Cash and cash equivalents
at end of year 310,578 1,277,617 124,118 1,232,385
------------------------------------- ------ ------------- ------------- --------------- -------------
Major Non-Cash Transactions
During the year ended 30 June 2022, there were share based
payments of GBP1,770,000 which were made in return for consulting
and marketing services.
During the year ended 30 June 2022, GBP401,944 worth of
investments were received as part of property option income (refer
to note 5 and note 6).
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2022
1. General information
The Company is a public limited company incorporated and
domiciled in England (registered number: 06275976), which is listed
on the London Stock Exchange. The registered office of the Company
is Suite 10011, 15 Ingestre Place, London, England, W1F 0DU.
2. Summary of significant Accounting Policies
The principal Accounting Policies applied in the preparation of
these Financial Statements are set out below. These Policies have
been consistently applied to all the periods presented, unless
otherwise stated.
2.1 Basis of preparation of Financial Statements
The Financial Statements have been prepared in accordance with
UK-adopted international accounting standards (UK IAS) in
accordance with the requirements of the Companies Act 2006. The
Financial Statements have also been prepared under the historical
cost convention.
The Financial Statements are presented in Pound Sterling rounded
to the nearest pound.
The preparation of financial statements in conformity with UK
IAS requires the use of certain critical accounting estimates. It
also requires management to exercise its judgement in the process
of applying the Accounting Policies. The areas involving a higher
degree of judgement or complexity, or areas where assumptions and
estimates are significant to the Consolidated Financial Statements
are disclosed in Note 4.
2.2 New and amended standards
(a) New and amended standards mandatory for the first time for
the financial periods beginning on or after 1 July 2021
The International Accounting Standards Board (IASB) issued
various amendments and revisions to International Financial
Reporting Standards and IFRIC interpretations. The amendments and
revisions were applicable for the period ended 30 June 2022 but did
not result in any material changes to the financial statements of
the Group or Company.
ii) New standards, amendments and interpretations in issue but
not yet effective or not yet endorsed and not early adopted
Standards, amendments and interpretations that are not yet
effective and have not been early adopted are as follows:
Standard Impact on initial application Effective date
---------- -------------------------------------- ----------------
IAS 12 Income taxes 1 January 2023
-------------------------------------- ----------------
IFRS 17 Insurance contracts 1 January 2023
-------------------------------------- ----------------
IAS 8 Accounting estimates 1 January 2023
-------------------------------------- ----------------
IAS 1 Classification of Liabilities 1 January 2023
as Current or Non-Current.
-------------------------------------- ----------------
IAS 1 Presentation of Financial Statements 1 January 2023
regarding the amendments of
disclosure of accounting policies
-------------------------------------- ----------------
The Group is evaluating the impact of the new and amended
standards above which are not expected to have a material impact on
the Group's results or shareholders' funds.
2.3 Basis of Consolidation
The Consolidated Financial Statements consolidate the financial
statements of the Company and its subsidiaries made up to 30 June.
Subsidiaries are entities over which the Group has control. Control
is achieved when the Group is exposed, or has rights, to variable
returns from its involvement with the investee and has the ability
to affect those returns through its power over the investee.
Generally, there is a presumption that a majority of voting
rights result in control. To support this presumption and when the
Group has less than a majority of the voting or similar rights of
an investee, the Group considers all relevant facts and
circumstances in assessing whether it has power over an investee,
including:
-- The contractual arrangement with the other vote holders of the investee;
-- Rights arising from other contractual arrangements; and
-- The Group's voting rights and potential voting rights
The Group re-assesses whether or not it controls an investee if
facts and circumstances indicate that there are changes to one or
more of the three elements of control. Subsidiaries are fully
consolidated from the date on which control is transferred to the
Group. They are deconsolidated from the date that control ceases.
Assets, liabilities, income and expenses of a subsidiary acquired
or disposed of during the period are included in the consolidated
financial statements from the date the Group gains control until
the date the Group ceases to control the subsidiary.
Investments in subsidiaries are accounted for at cost less
impairment within the Parent Company financial statements. Where
necessary, adjustments are made to the financial statements of
subsidiaries to bring the accounting policies used in line with
those used by other members of the Group. All significant
intercompany transactions and balances between Group enterprises
are eliminated on consolidation.
2.4 Going concern
The Group Financial Statements have been prepared on a going
concern basis. Although the Group's assets are not generating
revenues and an operating loss has been reported, the Directors are
of the view that, the Group has funds to meet its planned expenses
over the next 12 months from the date of these financial
statements.
In assessing whether the going concern assumption is
appropriate, the Directors have taken into account all relevant
available information about the current and future position of the
Group, including current level of resources and the required level
of spending on exploration and corporate activities. As part of the
assessment, the Directors have also taken into account the
potential for continuing warrant exercises and the ability to raise
new funding and utilizing the Crescita facility whilst maintaining
an acceptable level of cash for the Group to meet all
commitments.
The Directors are confident that the measures they have
available will result in sufficient working capital and cash flows
to continue in operational existence. Taking these matters in
consideration, the Directors continue to adopt the going concern
basis of accounting in the preparation of the financial
statements.
2.5 Foreign currencies
a) Functional and presentation currency
Items included in the Financial Information are measured using
the currency of the primary economic environment in which the
entity operates (the 'functional currency'). The functional
currency of the parent company is Pounds Sterling as is the
functional currency of the subsidiary Imperial Minerals (UK)
Limited. The functional currency of the other subsidiary,
Cloudbreak Discovery (Canada) Ltd. is Canadian Dollars. The
Financial Information in Cloudbreak Discovery (Canada) Ltd is
translated in accordance with IAS 21 - The Effect of Changes in
Foreign Exchange Rates.
b) Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions or valuation where such items are re-measured. Foreign
exchange gains and losses resulting from the settlement of such
transactions and from the translation at year-end exchange rates of
monetary assets and liabilities denominated in foreign currencies
are recognised in the Income Statement in other comprehensive
income. The financial statements are presented in Pounds Sterling
(GBP), the functional currency of Cloudbreak Discovery Plc is
Pounds Sterling, and the functional currency of its subsidiary
Cloudbreak Discovery (Canada) Ltd is Canadian Dollars.
2.6 Fair value measurement
IFRS 13 establishes a single source of guidance for all fair
value measurements. IFRS 13 does not change when an entity is
required to use fair value, but rather provides guidance on how to
measure fair value under IFRS when fair value is required or
permitted. The resulting calculations under IFRS 13 affected the
principles that the Company uses to assess the fair value, but the
assessment of fair value under IFRS 13 has not materially changed
the fair values recognised or disclosed. IFRS 13 mainly impacts the
disclosures of the Company. It requires specific disclosures about
fair value measurements and disclosures of fair values, some of
which replace existing disclosure requirements in other
standards.
2.7 Finance Income
Interest income is recognised using the effective interest
method.
2.8 Other income
The other income of the Group comprises royalty income. It is
measured at the fair value of the consideration received or
receivable after deducting discounts and other withholding tax. The
royalty income becomes receivable on extraction and sale of the
relevant underlying commodity, and by determination of the relevant
royalty agreement.
2.9 Cash and cash equivalents
Cash and cash equivalents comprise cash at hand and current and
deposit balances with banks and similar institutions, which are
readily convertible to known amounts of cash and which are subject
to insignificant risk of changes in value. This definition is also
used for the Statement of Cash Flows.
2.10 Trade and other receivables and prepaids
Trade receivables are amounts due from third parties in the
ordinary course of business. If collection is expected in one year
or less, they are classified as current assets. If not, they are
presented as non-current assets.
2.11 Royalty assets at fair value through profit and loss
Royalty financial assets are recognised or derecognised on
completion date where a purchase or sale of the royalty is under a
contract, and are initially measured at fair value, including
transaction costs. All of the Group's royalty financial assets have
been designated as at fair value through profit and loss ("FVTPL").
The royalty financial assets at FVTPL are measured at fair value at
the end of each reporting period, with any fair value gains or
losses recognised in the 'revaluation of royalty financial assets'
line item of the income statement.
2.12 Investments in subsidiaries
Investments in Group undertakings are stated at cost, which is
the fair value of the consideration paid, less any impairment
provision.
2.13 Intangible assets
Exploration and evaluation assets
The Group recognises expenditure as exploration and evaluation
assets when it determines that those assets hold potential to be
successful in finding specific resources. Expenditure included in
the initial exploration and evaluation assets relate to the
acquisition of rights to explore, topographical, geological,
geochemical and geophysical studies, exploratory drilling,
trenching, sampling and activities to evaluate the technical
feasibility and commercial viability of extracting a resource.
Capitalisation of pre-production expenditure ceases when the
prospective property is capable of commercial production.
Exploration and evaluation assets are recorded and held at
cost
Exploration and evaluation assets are not subject to
amortisation, as such at the year-end all intangibles held have an
indefinite life but are assessed annually for impairment. The
assessment is carried out by allocating exploration and evaluation
assets to cash generating units ('CGU's'), which are based on
specific projects or geographical areas. The CGU's are then
assessed for impairment using a variety of methods including those
specified in IFRS 6.
Whenever the exploration for and evaluation of resources in cash
generating units does not lead to the discovery of commercially
viable quantities of resources and the Group has decided to
discontinue such activities of that unit, the associated
expenditures are written off to the Income Statement.
Exploration and evaluation assets recorded at fair-value on
business combination
Exploration assets which are acquired as part of a business
combination are recognised at fair value in accordance with IFRS 3.
When a business combination results in the acquisition of an entity
whose only significant assets are its exploration asset and/or
rights to explore, the Directors consider that the fair value of
the exploration assets is equal to the consideration. Any excess of
the consideration over the capitalised exploration asset is
attributed to the fair value of the exploration asset.
2.14 Impairment of non-financial assets
Assets that have an indefinite useful life, for example,
intangible assets not ready to use, are not subject to amortisation
and are tested annually for impairment. An impairment loss is
recognised for the amount by which the asset's carrying amount
exceeds its recoverable amount. The recoverable amount is the
higher of an asset's fair value less costs to sell and value in
use. For the purposes of assessing impairment, assets are grouped
at the lowest levels for which there are separately identifiable
cash flows (cash generating units). Non-financial assets that
suffered impairment are reviewed for possible reversal of the
impairment at each reporting date.
2.15 Financial assets
The Group classifies its financial assets into one of the
categories discussed below, depending on the purpose for which the
asset was acquired. The Group's accounting policy for each category
is as follows:
Fair Value through Profit or Loss (FVTPL)
Non-derivative financial assets comprising the Group's strategic
financial investments in entities not qualifying as subsidiaries or
jointly controlled entities. These assets are classified as
financial assets at fair value through profit or loss. They are
carried at fair value with changes in fair value recognised through
the income statement. Where there is a significant or prolonged
decline in the fair value of a financial investment (which
constitutes objective evidence of impairment), the full amount of
the impairment is recognised in the income statement.
Due to the nature of these assets being unlisted investments or
held for the longer term, the investment period is likely to be
greater than 12 months and therefore these financial assets are
shown as non-current assets in the Statement of financial
position.
Listed investments are valued at closing bid price on 30 June
2022. For measurement purposes, financial investments are
designated at fair value through the income statement. Gains and
losses on the realisation of investments are recognised in the
income statement for the period. The difference between the market
value of financial instruments and book value to the Group is shown
as a gain or loss in the income statement for the period.
Amortised Cost
These assets comprise the types of financial assets where the
objective is to hold these assets in order to collect contractual
cash flows and the contractual cash flows are solely payments of
principal and interest. They are initially recognised at fair value
plus transaction costs that are directly attributable to their
acquisition or issue and are subsequently carried at amortised cost
using the effective interest rate method, less provision for
impairment. Impairment provisions for current and non-current trade
receivables and convertible debenture 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 and convertible debenture 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, based on analysis of internal or external
information. 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 considers a financial asset in default when
contractual payments are 180 days past due. However, in certain
cases, the Group may also consider a financial asset to be in
default when internal or external information indicates that the
Group is unlikely to receive the outstanding contractual amounts in
full before taking into account any credit enhancements held by the
Group. A financial asset is written off when there is no reasonable
expectation of recovering the contractual cash flows.
The Group's financial assets measured at amortised cost comprise
trade and other receivables, convertible debenture 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.
(a) Recognition and measurement
Amortised cost
Regular purchases and sales of financial assets are recognised
on the trade date at cost - the date on which the Group commits to
purchasing or selling the asset. Financial assets are derecognized
when the rights to receive cash flows from the assets have expired
or have been transferred, and the Group has transferred
substantially all of the risks and rewards of ownership .
Fair value through the profit or loss
Financial assets that do not meet the criteria for being
measured at amortised cost or FVTOCI are measured at FVTPL. The
Group holds equity instruments that are classified as FVTPL as
these were acquired principally for the purpose of selling in the
near term.
Financial assets at FTVPL are measured at fair value at the end
of each reporting period, with any fair value gains or losses
recognised in profit or loss. Fair value is determined by using
market observable inputs and data as far as possible. Inputs used
in determining fair value measurements are categorised into
different levels based on how observable the inputs used in the
valuation technique utilised are (the 'fair value hierarchy'):
- Level 1: Quoted prices in active markets for identical items
(unadjusted)
- Level 2: Observable direct or indirect inputs other than Level
1 inputs
- Level 3: Unobservable inputs (i.e. not derived from market
data).
The classification of an item into the above levels is based on
the lowest level of the inputs used that has a significant effect
on the fair value measurement of the item. Transfers of items
between levels are recognised in the period they occur.
The Group measures its investments in quoted shares using the
quoted market price.
(b) Impairment of financial assets
The Group recognises an allowance for expected credit losses
(ECLs) for all debt instruments not held at fair value through
profit or loss. ECLs are based on the difference between the
contractual cash flows due in accordance with the contract and all
the cash flows that the Group expects to receive, discounted at an
approximation of the original EIR. The expected cash flows will
include cash flows from the sale of collateral held or other credit
enhancements that are integral to the contractual terms.
ECLs are recognised in two stages. For credit exposures for
which there has not been a significant increase in credit risk
since initial recognition, ECLs are provided for credit losses that
result from default events that are possible within the next
12-months (a 12-month ECL). For those credit exposures for which
there has been a significant increase in credit risk since initial
recognition, a loss allowance is required for credit losses
expected over the remaining life of the exposure, irrespective of
the timing of the default (a lifetime ECL).
For trade receivables (not subject to provisional pricing) and
other receivables due in less than 12 months, the Group applies the
simplified approach in calculating ECLs, as permitted by IFRS 9.
Therefore, the Group does not track changes in credit risk, but
instead, recognises a loss allowance based on the financial asset's
lifetime ECL at each reporting date.
The Group considers a financial asset in default when
contractual payments are 90 days past due. However, in certain
cases, the Group may also consider a financial asset to be in
default when internal or external information indicates that the
Group is unlikely to receive the outstanding contractual amounts in
full before taking into account any credit enhancements held by the
Group. A financial asset is written off when there is no reasonable
expectation of recovering the contractual cash flows and usually
occurs when past due for more than one year and not subject to
enforcement activity.
At each reporting date, the Group assesses whether financial
assets carried at amortised cost are credit impaired. A financial
asset is credit-impaired when one or more events that have a
detrimental impact on the estimated future cash flows of the
financial asset have occurred.
(d) Derecognition
The Group derecognises a financial asset only when the
contractual rights to the cash flows from the asset expire, or when
it transfers the financial asset and substantially all the risks
and rewards of ownership of the asset to another entity.
On derecognition of a financial asset measured at amortised
cost, the difference between the asset's carrying amount and the
sum of the consideration received and receivable is recognised in
profit or loss. This is the same treatment for a financial asset
measured at FVTPL.
2.16 Financial Investments
Non-derivative financial assets comprising the Group's strategic
financial investments in entities not qualifying as subsidiaries,
associates or jointly controlled entities. These assets are
classified as financial assets at fair value through profit or
loss. They are carried at fair value with changes in fair value
recognised through the income statement. Where there is a
significant or prolonged decline in the fair value of a financial
investment (which constitutes objective evidence of impairment),
the full amount of the impairment is recognised in the income
statement.
Listed investments are valued at closing bid price on 30 June
2022. Unlisted investments that are not publicly traded and whose
fair value cannot be measured reliably, are measured at cost less
impairment.
2.17 Equity
Equity comprises the following:
-- "Share capital" represents the nominal value of the Ordinary shares;
-- "Share Premium" represents consideration less nominal value
of issued shares and costs directly attributable to the issue of
new shares;
-- "Reverse asset acquisition reserve" represents the retained
losses of the Company before acquisition and the Company equity at
reverse acquisition.
-- "Other reserves" represents the foreign currency translation
reserve, warrant reserve and share option reserve where;
o "Foreign currency translation reserve" represents the
translation differences arising from translating the financial
statement items from functional currency to presentational
currency;
o "Warrant reserve" represents share warrants awarded by the
Group;
o "Share option reserve" represents share options awarded by the
Group;
-- "Retained earnings" represents retained losses.
2.18 Share based payments
The Group operates an equity-settled, share-based scheme under
which the Group receives services from employees or contractors as
consideration for equity instruments (options and warrants) of the
Group. The fair value of the third-party suppliers' services
received in exchange for the grant of the options is recognised as
an expense in the Income Statement or charged to equity depending
on the nature of the service provided. The value of the employee
services received is expensed in the Income Statement and its value
is determined by reference to the fair value of the options
granted:
-- including any market performance conditions;
-- excluding the impact of any service and non-market
performance vesting conditions (for example, profitability or sales
growth targets, or remaining an employee of the entity over a
specified time period); and
-- including the impact of any non-vesting conditions (for
example, the requirement for employees to save).
The fair value of the share options and warrants are determined
using the Black Scholes valuation model.
Non-market vesting conditions are included in assumptions about
the number of options that are expected to vest. The total expense
or charge is recognised over the vesting period, which is the
period over which all of the specified vesting conditions are to be
satisfied. At the end of each reporting period, the entity revises
its estimates of the number of options that are expected to vest
based on the non-market vesting conditions. It recognises the
impact of the revision to original estimates, if any, in the Income
Statement or equity as appropriate, with a corresponding adjustment
to a separate reserve in equity.
When the options are exercised, the Group issues new shares. The
proceeds received, net of any directly attributable transaction
costs, are credited to share capital (nominal value) and share
premium when the options are exercised.
2.19 Taxation
No current tax is yet payable in view of the losses to date.
Deferred tax is recognised for using the liability method in
respect of temporary differences arising from differences between
the carrying amount of assets and liabilities in the consolidated
financial statements and the corresponding tax bases used in the
computation of taxable profit. However, deferred tax liabilities
are not recognised if they arise from the initial recognition of
goodwill; deferred tax is not accounted for if it arises from
initial recognition of an asset or liability in a transaction other
than a business combination that at the time of the transaction
affects neither accounting nor taxable profit or loss.
In principle, deferred tax liabilities are recognised for all
taxable temporary differences and deferred tax assets (including
those arising from investments in subsidiaries), are recognised to
the extent that it is probable that taxable profits will be
available against which deductible temporary differences can be
utilised.
Deferred income tax assets are recognised on deductible
temporary differences arising from investments in subsidiaries only
to the extent that it is probable the temporary difference will
reverse in the future and there is sufficient taxable profit
available against which the temporary difference can be used.
Deferred tax liabilities are recognised for taxable temporary
differences arising on investments in except where the Group is
able to control the reversal of the temporary difference and it is
probable that the temporary difference will not reverse in the
foreseeable future.
Deferred tax assets and liabilities are offset when there is a
legally enforceable right to offset current tax assets against
current tax liabilities and when the deferred tax assets and
liabilities relate to income taxes levied by the same taxation
authority on either the same taxable entity or different taxable
entities where there is an intention to settle the balances on a
net basis.
Deferred tax is calculated at the tax rates (and laws) that have
been enacted or substantively enacted by the statement of financial
position date and are expected to apply to the period when the
deferred tax asset is realised or the deferred tax liability is
settled.
Deferred tax assets and liabilities are not discounted.
3 Financial risk management
The Group's activities expose it to a variety of financial
risks: market risk (foreign currency risk, price risk and interest
rate risk), credit risk and liquidity risk. The Group's overall
risk management programme focuses on the unpredictability of
financial markets and seeks to minimise potential adverse effects
on the Group's financial performance. None of these risks are
hedged.
Risk management is carried out by the Canadian based management
team under policies approved by the Board of Directors.
3.1 Treasury policy and financial instruments
During the years under review, the financial instruments were
cash and cash equivalents, shares in listed and unlisted companies
and other receivables which were or will be required for the normal
operations of the Group.
The Group operates informal treasury policies which include
ongoing assessments of interest rate management and borrowing
policy. The Board approves all decisions on treasury policy.
The Group has raised funds to finance future activities through
the placing of shares, placing of shares via the Crescita Capital
LLC draw down facility, together with share options and warrants.
There are no differences between the book value and fair value of
the above financial assets. The risks arising from the Group's
financial instruments are liquidity and interest rate risk. The
Directors review and agree policies for managing these risks and
they are summarised below:
Unlisted investments
The Company is required to make judgments over the carrying
value of investments in unquoted companies where fair values cannot
be readily established and evaluate the size of any impairment
required. It is important to recognise that the carrying value of
such investments cannot always be substantiated by comparison with
independent markets and, in many cases, may not be capable of being
realised immediately. Management's significant judgement in this
regard is that the value of their investment represents their cost
less previous impairment.
Market risk & foreign currency risk
The Group is exposed to market risk, primarily relating to
interest rate and foreign exchange movements. The Group does not
hedge against market or foreign exchange risks as the exposure is
not deemed sufficient to enter into forwards or similar
contracts.
Credit risk
Credit risk arises from cash and cash equivalents as well as
outstanding receivables. The amount of exposure to any individual
counter party is subject to a limit, which is assessed by the
Board.
The Group considers the credit ratings of banks in which it
holds funds in order to reduce exposure to credit risk.
Liquidity risk and interest rate risk
The Group seeks to manage financial risk, to ensure sufficient
liquidity is available to meet foreseeable needs and to invest cash
assets safely and profitably. This is achieved by the close control
by the Directors of the Group in the day-to-day management of
liquid resources. Cash is invested in deposit accounts which
provide a modest return on the Group's resources whilst ensuring
there is limited risk of loss to the Group.
3.2 Capital risk management
The Group's objectives when managing capital are to safeguard
the Group's ability to continue as a going concern in order to
provide returns for shareholders and benefits for other
stakeholders and to maintain an optimal capital structure to reduce
the cost of capital.
4 Critical accounting estimates and judgements
The preparation of the Financial Information in conformity with
IFRSs requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
Financial Information and the reported amount of expenses during
the year. Actual results may vary from the estimates used to
produce this Financial Information.
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.
Significant items subject to such estimates and assumptions
include, but are not limited to:
Share based payment transactions
The Group has made awards of options and warrants over its
unissued share capital to certain Directors and employees as part
of their remuneration package. Certain warrants have also been
issued to shareholders as part of their subscription for shares and
to suppliers for various services received.
The valuation of these options and warrants involves making a
number of critical estimates relating to price volatility, future
dividend yields, expected life of the options and forfeiture
rates.
Classification of royalty arrangements: initial recognition and
subsequent measurement
The Directors must decide whether the Group's royalty
arrangements should be classified as:
-- Intangible assets in accordance with IAS 38 Intangible Assets; or
-- Financial assets in accordance with IFRS 9 Financial Instruments
The Directors use the following selection criteria to identify
the characteristics which determine which accounting standard to
apply to each royalty arrangement:
Type 1 - Intangible assets: Royalties, are classified as
intangible assets by the Group. The Group considers the substance
of a simple royalty to be economically similar to holding a direct
interest in the underlying mineral asset. Existence risk (the
commodity physically existing in the quantity demonstrated),
production risk (that the operator can achieve production and
operate a commercially viable project), timing risk (commencement
and quantity produced, determined by the operator) and price risk
(returns vary depending on the future commodity price, driven by
future supply and demand) are all risks which the Group
participates in on a similar basis to an owner of the underlying
mineral licence. Furthermore, in a royalty intangible, there is
only a right to receive cash to the extent there is production and
there are no interest payments, minimum payment obligations or
means to enforce production or guarantee repayment. These are
accounted for as intangible assets under IAS-38.
Type 2 - Financial royalty assets (royalties with additional
financial protection): In certain circumstances where the risk is
considered too high, the Group will look to introduce additional
protective measures. This has taken the form of minimum payment
terms. Once an operation is in production, these mechanisms
generally fall away such that the royalty will display identical
characteristics and risk profile to the intangible royalties;
however, it is the contractual right to enforce the receipt of cash
which results in these royalties being accounted for as financial
assets under IFRS 9. There are currently no royalties classified as
financial royalty assets.
Estimated impairment of convertible loan notes receivable &
Convertible debenture receivables
Anglo African Minerals Plc ('AAM')
The Group has assessed whether the AAM convertible loan notes
receivable which has been previously fully impaired in the prior
year. They have reassessed this asset and determined that there are
no conditions to reverse the impairment.
G2 Energy Corp. ("G2")
The Group also assessed whether the G2 convertible debenture
receivable should be impaired and based on the current production
levels and the programme at the Masten Unit Energy Project, they
have determined it should not be impaired as G2, through the
funding from the Company, now have the funds required to undertake
the exploration activity and advance the project. The terms of the
debenture is still being met by both parties and G2 are paying the
necessary interest payments. The directors assessed this debenture
in accordance with IFRS and concluded it is a financial asset
accounted for as amortised cost as the financial asset is held
within a business model with the objective to hold and collect the
contractual cash flows which is in the form of interest and
principal payments. As part of the debenture agreement, the Group
received a 3.25% Overriding Royalty Interest in the project which
has limited production and revenues. In accordance with IFRS the
directors has assessed the royalty interest and accounted for it as
intangible assets in accordance with IAS 38 because there is only a
right to receive cash to the extent there is production and there
are no interest payments, minimum payment obligations or means to
enforce production or guarantee repayment. These are accounted for
as intangible assets under IAS 38. The directors considered the
fair value of the royalty assets which they receive in exchange as
part of the debenture agreement for which they did not pay any
consideration. Fair value is determined based on discounted cash
flow models (and other valuation techniques) using assumptions
considered to be reasonable and consistent with those that would be
applied by a market participant. The determination of assumptions
used in assessing fair values is subjective and the use of
different valuation assumptions could have a significant impact on
financial results. The current royalty covers a very small
production site and only GBP11k has been received to date from this
royalty. Following their assessment, the directors concluded that
the fair value of the royalty agreement was not material and has
not been recognised as intangible asset. As part of the debenture
agreement, the Group received 6,500,000 warrants for G2, however
management have deemed that these warrants have no material value
at this stage as the assets held by G2 are predominantly made up of
early stage exploration and production assets which currently
producing limited amounts of revenue. The group is in regular
communication with G2 and is monitoring the results of its
exploration activities that will be undertaken as the result of the
funding by the Group to G2.
Unlisted investments
The Group is required to make judgments over the carrying value
of investments in unquoted companies where fair values cannot be
readily established and evaluate the size of any impairment
required. It is important to recognise that the carrying value of
such investments cannot always be substantiated by comparison with
independent markets and, in many cases, may not be capable of being
realised immediately. Management's significant judgement in this
regard is that the value of their investment represents their cost
less previous impairment. Management have assessed whether any
impairment on the unlisted investments is required and have
determined that no impairment is required.
Recovery of other receivables
Includ ed in other receivables is an amount of GBP190,000 (2021:
GBP190,000) as at 30 June 2022 in respect of unpaid ordinary share
capital issued on 3 June 2021. The Directors believe that the
amount will be recovered in full and therefore have not recognised
any impairment to the carrying value of this amount.
Valuation of exploration and evaluation assets
Exploration and evaluation costs have a carrying value of 30
June 2022 of GBP78,694 (2021: GBP30,679). Such assets have an
indefinite useful life as the Group has the right to renew
exploration licenses or options and the asset is only amortised
once extraction of the resource commences. The value of the Group's
exploration and evaluation expenditure will be dependent upon the
success of the Group in discovering economic and recoverable
resources, especially in the countries of operation where
political, economic, legal, regulatory and social uncertainties are
potential risk factors. The future revenue flows relating to these
assets is uncertain and will also be affected by competition,
relative exchange rates and potential new legislation and related
environmental requirements. The Group's ability to continue its
exploration programs and develop its projects is dependent on
future fundraisings and utilising the Crescita Capital LLC drawdown
facility. The ability of the Group to continue operating within
some of the jurisdictions contemplated by management is dependent
on a stable political environment which is uncertain based on the
history of the country. This may also impact the Group's legal
title to assets held which would affect the valuation of such
assets. There have been no changes made to any past
assumptions.
The Directors have undertaken a review to assess whether
circumstances exist which could indicate the existence of
impairment as follows:
-- The Group no longer has title to mineral leases.
-- A decision has been taken by the Board to discontinue
exploration due to the absence of a commercial level of
reserves.
-- Sufficient data exists to indicate that the costs incurred
will not be fully recovered from future development and
participation.
Following their assessment, the Directors concluded that no
impairment charge is necessary (2021: Nil).
5 Intangible assets
As at June 30, 2022, the Group's exploration and evaluation
assets are as follows:
Group
------------------------------
30 June 2022 30 June 2021
Exploration & Evaluation Assets GBP GBP
------------------------------------------ -------------- --------------
Caribou Property, British Columbia - 1
South Timmins, British Columbia 1 16,080
Klondike Property 1 -
Atlin West Property 1 -
Yak Property 1 -
Stateline Property 13,013 -
Rizz Property 6,053 -
Icefall Property 9,018 -
Northern Treasure Property 34,638 -
Gold Vista Property, British Columbia - 1
Silver Vista Property, British Columbia 1 1
Silver Switchback Property, British
Columbia 1 1
Rupert Property, British Columbia 15,966 14,595
As at June 30 78,694 30,679
------------------------------------------ -------------- --------------
As at June 30, 2022, the Group's reconciliation of exploration
and evaluation assets are as follows:
Group
------------------------------
30 June 2022 30 June 2021
Exploration & Evaluation Assets GBP GBP
---------------------------------- -------------- --------------
Cost
As at 1 July 30,679 228,863
Additions 139,294 97,058
Disposals (97,508) -
Net proceeds from sale 1 (295,242)
Forex movement 6,228 -
As at June 30 78,694 30,679
---------------------------------- -------------- --------------
Caribou Property, Canada
On November 20, 2017, the Group acquired the Caribou mineral
property for GBP1 from a company controlled by the CEO of the
Group. As at June 30, 2022, included in Exploration and Evaluation
Assets is GBP1 (June 30, 2021 - GBP1) attributed to the Caribou
property.
On June 2, 2020, the Group entered into an option agreement with
Norseman Silver Inc. ("Norseman"), a company with a common
director, under which Norseman may acquire up to a 100% interest in
the Group's Caribou Property subject to a 2% net smelter return
("NSR") to the Group. In order for Norseman to fully exercise the
option on the Caribou Property, they must pay the Group an
aggregate of $80,000 CAD, issue 2,750,000 common shares of Norseman
and incur exploration expenses of $225,000 CAD over three years.
Norseman will have the right to repurchase one-half (1%) of the 2%
NSR for $1,000,000 CAD .
During the year ended June 30, 2022, the Group received cash
payments of $50,000 CAD (GBP31,929) and 1,000,000 Norseman shares
in relation to the option payments due under the agreement.
On June 28, 2022 The Group announced that Norseman completed
their obligations under the option agreement taking complete
ownership of the property and ratifying The Group's interest into a
2% net smelter royalty.
South Timmins Property, Canada
During the year ended June 30, 2021, the Group paid $27,540 CAD
(GBP16,080) in asset staking costs to acquire twelve mineral titles
in Ontario, Canada known as the South Timmins property.
On 23 September 2021, the Group entered into an option agreement
with 1315956 BC Ltd , under which 1315956 BC Ltd may acquire up to
a 100% interest in the Group's South Timmins property subject to a
1% net smelter return ("NSR") to the Group. In order for 1315956 BC
Ltd to fully exercise the option on the South Timmins Property,
they must pay the Group an aggregate of $495,000 CAD, issue
2,250,000 common shares of 1315956 BC Ltd and incur exploration
expenses of $1,515,000 with a minimum of $265,000 CAD in the first
year.
During the year ended 30 June 2022, the Group received cash
payments of $270,000 (GBP157,579) and 500,000 shares in relation to
the option payments due under the agreement.
Gold Vista Property, Canada
On May 8, 2020, the Group entered into an option agreement to
purchase 100% of the rights to the Gold Vista Property located in
British Columbia, Canada. To earn a 100% interest, the Group must
make aggregate cash payments of $65,000 CAD ($30,000 CAD paid -
GBP17,700), issue 1,375,000 shares in the Group and incur work
commitments on the property of $225,000 CAD, over three years. The
property is subject to a 2% NSR which the Group may acquire
one-half (1%) for $1,000,000 CAD.
On October 6, 2020, the Group entered into an option agreement
with Deep Blue Trading ("Deep Blue") in which Deep Blue may acquire
up to a 100% interest in the Gold Vista Property subject to a 1%
NSR to the Group. Deep Blue will have the right to repurchase
one-half (0.5%) of the NSR for $500,000 at any time prior to
commercial production. In order for Deep Blue to fully exercise the
option on the Gold Vista Property, they must pay the Group a
$10,000 CAD (GBP5,839) and assume certain obligations payable to
the original vendor.
After 30 June 2022, the option was cancelled and the property
was terminated as Cloudbreak Discovery (Canada) Ltd no longer
wished to pursue the project.
Spectrum Property, Canada
On January 10, 2019, the Group entered into an option agreement
to acquire 100% interests in the Southern Spectrum Mineral Property
located in the Lillooet Mining Division of British Columbia. In
order to exercise the option, the Group must pay an aggregate of
$70,000 CAD in cash ($50,000 CAD, GBP29,500 paid), issue 1,200,000
common shares (675,000 issued), and incur work commitments of
$1,250,000 ($50,000 CAD, GBP29,500 incurred) over three years. The
property is subject to a 3% NSR which the Group may acquire 1% for
$1,000,000 CAD.
During the year ended June 30, 2021, the Group sold, transferred
and assigned all of the Group's right, title interest and
obligations under its original Spectrum property option agreement
to 1162832 BC Ltd. (the "Vendor") for $10,000 CAD (GBP5,839) cash.
Upon the Vendor receiving at least 500,000 shares from the
transfer, option, or other disposition of some or all of the
Vendor's interest in the Spectrum property ("Consideration
Shares"), the Vendor will transfer to the Group at least 500,000 of
those Consideration Shares. As a result of the sale, total value in
exploration and evaluation assets of $117,722 CAD (GBP49,456)
attributed to the property was expensed in the prior year.
Silver Switchback Property, Canada
On May 8, 2020, the Group entered into an option agreement to
purchase 100% of the rights to the Silver Switchback Property
located in British Columbia, Canada. To earn a 100% interest, the
Group must make aggregate cash payments of $75,000 CAD ($15,000 CAD
paid - GBP8,850), issue 1,850,000 shares (250,000 shares issued at
a value of $40,000 CAD - GBP23,356) in the Group and incur work
commitments on the property of $475,000 CAD over three years. The
property is subject to a 2% NSR which the Group may re-purchase
1.5% for $1,250,000 CAD.
On August 27, 2020, the Group entered into an option agreement
with Norseman, under which Norseman may acquire up to a 100%
interest in the Group's Silver Switchback Property subject to a 1%
NSR to the Group. In order for Norseman to fully exercise the
option on the Silver Switchback Property, they must pay the Group
$30,000 CAD (received), issue 750,000 common shares (370,000
received valued at $83,250 CAD - GBP46,610) and assume certain
obligations due to the original vendor over three years. Norseman
will have the right to repurchase one-half (0.5%) of the NSR from
the Group for $500,000 CAD.
During the year ended June 30, 2022, the Group received 380,000
Norseman shares in relation to the option payments due under the
agreement.
Silver Vista, Canada
On May 8, 2020, the Group entered into an option agreement to
purchase 100% of the rights to the Silver Vista Property located in
British Columbia, Canada. To earn a 100% interest, the Group will
need to make aggregate cash payments of $65,000 CAD ($20,000 CAD
paid - GBP11,678), issue 1,375,000 shares (370,000 shares issued at
a value of $75,000 CAD - GBP43,793) in the Group and incur work
commitments on the property of $275,000 CAD, over three years. The
property is subject to a 2% NSR which the Group may acquire
one-half (1%) for $1,000,000 CAD.
During the year ended June 30, 2021, the Group made a payment of
$80,000 CAD (GBP46,713) to a prior optionor to fulfil prior option
agreement obligation.
On September 21, 2020, the Group entered into an option
agreement with Norseman, under which Norseman may acquire up to a
100% interest in the Group's Silver Vista Property subject to a 1%
NSR payable to the Group. In order for Norseman to fully exercise
the option on the Silver Switchback Property, they must pay the
Group $50,000 CAD (received - GBP29,500), and issue 2,000,000
common shares (received and valued at $40,000 CAD - GBP23,600).
Norseman will have the right to repurchase one-half (0.5%) of the
NSR for $500,000 CAD.
Rupert, Canada
On September 11, 2018, the Group entered into an asset purchase
agreement with a company controlled by a director of the Group and
two unrelated persons to purchase the Rupert Property, located in
British Columbia, Canada. As consideration for the property, the
Group issued 2,000,000 common shares valued at $100,000 CAD
(GBP59,000) and granted a 2% NSR. At any time, 1% of the NSR can be
purchased by the Group for $1,500,000 CAD. Of the common shares
issued to acquire the property, 1,000,000 were issued to a company
that was controlled by a director of the Group. The Group also
agreed to incur aggregate expenditures on the property of $800,000
($100,000 CAD - GBP59,000 incurred).
On December 11, 2020, the Group sold the Rupert Property to
Buscando Resources Corp. ("Buscando"), a company with a director in
common. Payments to be received by the Group are as follows:
-- $150,000 CAD in total cash payments with $25,000 CAD
(GBP14,750) on closing (received), $50,000 CAD on or before 12
months after Buscando is listed on a public exchange, $75,000 CAD
on or before 24 months after Buscando is listed on a public
exchange;
-- 3,750,000 shares in total issued to the Group with 1,000,000
shares issued on closing (received and valued at $50,000 CAD -
GBP29,500, 1,250,000 on or before 12 months after Buscando is
listed on a public exchange, 1,500,000 on or before 24 months after
Buscando is listed on a public exchange; and
-- $200,000 expenditures incurred on the property with $100,000
CAD on or before 12 months after Buscando is listed on a public
exchange, $100,000 CAD on or before 24 months after Buscando is
listed on a public exchange.
As a result of the sale to Buscando, the original vendors waived
the exploration commitments required by the Group under the
September 11, 2018, agreement.
New Moon, Canada
On August 20, 2020, the Group acquired the New Moon property in
British Columbia, Canada for acquisition costs of $6,188 CAD
(GBP3,651). On December 9, 2020, the Group sold the New Moon
property to Norseman, in exchange for $10,000 CAD (GBP5,800)
(received) and 2,500,000 Norseman shares (received and valued at
$50,000 CAD - GBP29,500). The Group retained a 2% net smelter
return on the property. Norseman has subsequently allow the claim
group to expire and has reverted to open crown land.
Atlin West, Canada
On August 9 2021, the Group entered into an option agreement
with 1315843 BC Ltd to purchase 100% of the rights to the Atlin
West Project located in British Columbia, Canada. To earn a 100%
interest, 1315843 BC Ltd make aggregate cash payments of $700,000
CAD, issue 8,000,000 shares in 1315843 BC Ltd and make payments of
$325,000 over a three-year period to Cloudbreak. Upon completion of
the work Cloudbreak will transfer 100% interest. Cloudbreak will
retain a net 2% NSR.
During the year ended June 30, 2022, the Group received cash
payments of $100,000 CAD (GBP78,321.30) and 3,000,000 in relation
to the option payments due under the agreement.
Yak, Canada
On October 13 2021, the Group entered into an option agreement
with Moonbound Mining Ltd ('Moonbound'). In respect of the Yak
Project located in British Columbia, Canada. Moonbound will issue
Cloudbreak 2,700,000 common shares and make aggregate cash payments
of $145,000 CAD over a three-year period. Additionally, Moonbound
will commit to spending up to GBP700,000 CAD in exploration
expenditure on the property and enter into a public transaction
within six months of the agreement. Upon completion of the
obligations, Cloudbreak will transfer 100% interest and retain a
net 2% NSR.
During the year ended June 30, 2022, the Group received cash
payments of $10,000 CAD (GBP8,034.94) and 700,000 shares in
relation to the option payments due under the agreement.
Klondike, United States
On July 15 2021, the Group entered into the Klondike project
based in Colorado, United States, with Alianza Minerals Ltd.
On December 7 2021, Cloudbreak and Alianza Minerals entered into
an option agreement with Allied Copper Corp for the advancement of
the Klondike project. Allied Copper will issue Cloudbreak and
Allied 7,000,000 common shares and make a total of $400,000 CAD in
cash payments over a three-year period. Upon completion of the
obligations, the alliance will transfer 100% interest in the
Klondike project to Allied Copper. Allied Copper will also issue
3,000,000 warrants exerciseable for a 36-month term.
During the year ended June 30, 2022, the Group received cash
payments of $100,000 CAD (GBP58,136.90) and 1,000,000 Allied Copper
shares in relation to the option payments due under the
agreement.
Stateline, United States
On February 9 2022, Cloudbreak and Alianza Minerals entered into
an option agreement with Allied Copper Corp in respect of the
Stateline Project in Colorado, United States. Allied Copper will
issue the alliance 4,250,000 common shares over a three-year period
and make aggregate cash payments of $315,000 CAD ($40,000 CAD paid)
with a further $50,000 CAD due on closing. Additionally, Allied
will commit to spending up to GBP3,750,000 CAD in exploration
expenditure on the property over three years. The alliance will
retain a net 2% NSR, not subject to a buy down provision.
During the year ended June 30, 2022, the Group received cash
payments of $20,000 CAD (GBP11,632.40).
Icefall, Canada
On March 3 2022, the Group entered into an option agreement with
1311516 BC Ltd in respect of the Icefall Project in British
Colombia, Canada. 1311516 BC Ltd will issue 2,000,000 common shares
to Cloudbreak's subsidiary Cloudbreak (Canada) Ltd and make an
aggregate of $120,000 CAD in cash payments to the Group.
Additionally, 1311516 will commit to spending up to GBP700,000 CAD
in exploration expenditure on the property over three years. This
will need to be done to earn an interest of 75% in the project.
Upon completion of the terms Cloudbreak and 1311516 BC Ltd will
enter a joint venture in which each party will be responsible for
its pro-rata share of expenditures on the project.
During the year ended June 30, 2022, the Group received cash
payments of $25,000 CAD (GBP14,804.10) and 2,000,000 shares in
relation to the option payments due under the agreement.
Rizz, Canada
On February 25 2022, the Group entered into an option agreement
with 1311516 BC Ltd in respect of the Rizz Project in British
Colombia, Canada. 1311516 BC Ltd will issue 3,000,000 common shares
to Cloudbreak and make an aggregate of $120,000 CAD in cash
payments to the Group. Additionally, 1311516 will commit to
spending up to $750,000 CAD in exploration expenditure on the
property over three years. This will need to be done to earn an
interest of 75% in the project. Upon completion of the terms,
Cloudbreak and 1311516 BC Ltd will enter a joint venture in which
each party will be responsible for its pro-rata share of
expenditures on the project.
During the year ended June 30, 2022, the Group received cash
payments of $25,000 CAD (GBP14,826.90) and 3,000,000 shares in
relation to the option payments due under the agreement.
Northern Treasure, Canada
During 2022, the Group staked the Northern Treasure property for
$50,645 CAD which is located in Northern British Columbia. The
Company continues to actively explore this property and look for a
partner to develop the property further.
Foggy Mountain, Canada
During 2022, the Group staked the Foggy Mountain property which
is located in Central British Columbia. The Company continues to
actively explore this property and look for a partner to develop
the property further.
6 Investments in subsidiary undertakings
Company
------------------------------
30 June 2022 30 June 2021
GBP GBP
------------------------------- -------------- --------------
Shares in Group Undertakings
At beginning of period 6,485,487 10
Additions 5,008 6,485,477
At end of period 6,490,495 6,485,487
Loans to group undertakings 762,391 -
------------------------------- -------------- --------------
Total 7,252,886 6,485,487
------------------------------- -------------- --------------
Subsidiaries
Details of the subsidiary undertaking at 30 June 2022 are as
follows:
Proportion Proportion
of ordinary of ordinary
Country shares shares
of incorporation held by held by
Registered office and place parent the Group Nature of
Name of subsidiary address of business (%) (%) business
-------------------- -------------------- -------------------- -------------- -------------- --------------------
6th Floor, 60 Make investments
Gracechurch in the Group's
Imperial Minerals Street, London, United chosen business
(UK) Limited EC3V 0HR Kingdom 100% 100% sector
-------------------- -------------------- -------------------- -------------- -------------- --------------------
Suite 520/999
Cloudbreak West Hastings A mineral
Discovery Street, Vancouver property
(Canada) Limited BC V6C2W2 Canada 100% 100% project generator
-------------------- -------------------- -------------------- -------------- -------------- --------------------
1209 Orange
Street,
Cloudbreak Wilmington, New Mineral
Discovery Castle, Delaware, exploration
(US) Ltd. 19801 USA 100% 100% projects
-------------------- -------------------- -------------------- -------------- -------------- --------------------
12 New Fetter
Lane, London, Mineral
Kudu Resources United Kingdom, United exploration
Limited EC4A 1JP Kingdom 100% 100% projects
-------------------- -------------------- -------------------- -------------- -------------- --------------------
Investments held by subsidiaries
Financial assets at fair value through profit or loss are as
follows:
Level 1 Level 2 Level 3 Total
GBP GBP GBP GBP
--------------------- ------------- --------- ----------- -------------
30 June 2021 4,324,063 - 29,255 4,353,318
--------------------- ------------- --------- ----------- -------------
Additions 511,494 - 158,254 669,748
Disposals (210,178) - (5,214) (215,392)
Fair value changes (2,563,914) - (101) (2,564,016)
Foreign exchange (160,779) - (13,578) (174,357)
--------------------- ------------- --------- ----------- -------------
30 June 2022 1,900,686 - 168,617 2,069,302
--------------------- ------------- --------- ----------- -------------
As at June 30, 2022, investments were classified as held for
trading and recorded at their fair values based on quoted market
prices (if available). Investments that do not have quoted market
prices are measured at cost less impairment.
Imperial Helium Corp.
On April 20, 2020, the Group purchased 450,000 preferred shares
in Imperial Helium Corp. for $45 CAD (GBP26). On December 15, 2020,
45,000 of these preferred shares were converted into common shares
for no additional consideration. On December 11, 2020, the Group
purchased $110,000 CAD (GBP66,138) in Imperial Helium Corp.
convertible debenture notes that yielded 10%. On May 18, 2021, the
convertible debenture converted into 575,767 ordinary shares of
Imperial Helium Corp. At 30 June 2022, fair value of the Imperial
Helium Corp. shares is $37,487 CAD (GBP23,946).
Temas Resources Corp.
On September 23, 2020, the Group sold its La Blache property to
Temas Resources Corp. ("Temas") for a cash payment of $30,000 CAD
(GBP17,517) and 10,000,000 Temas shares which had a value at the
time of $2,000,000 CAD (GBP1,167,815). The Group retained a 2% NSR
on the La Blache property. The Temas shares are subject to pooling
restrictions with 2,500,000 Temas shares released March 23, 2021,
and 7,500,000 Temas released September 23, 2021. In 2022, the Group
sold 29,000 shares for $2,020 CAD (GBP1,290). At 30 June 2022, fair
value of the Temas shares is $947,245 CAD (GBP610,408).
Norseman Silver Inc.
On 23 August 2021, the Group received 380,000 shares in Norseman
from the option agreement for the Silver Switchback property for
$129,200 CAD (GBP74,235).
On 31 May 2021, the Group received 1,000,000 shares in Norseman
from the option agreement for the Caribou property for $170,000 CAD
(GBP108,575).
During the year ended 30 June 2022, the Group sold 1,766,500
shares in Norseman for a total of $352,002 CAD (GBP208,888).
At 30 June 2022, fair value of the Norseman shares is $1,089,760
CAD (GBP696,123).
Buscando Resources Corp.
On December 31, 2020, the Group sold the Rupert property to
Buscando, in exchange for 1,000,000 shares in Buscando at a value
of $50,000 CAD (GBP29,195).
During the year ended 30 June 2022, the Group purchased an
additional 50,000 shares in Buscando for a total of $6,840 CAD
(GBP4,305)
At 30 June 2022, fair value of the Buscando shares is $168,000
CAD (GBP108,260).
Linceo Resources Corp.
On August 17, 2019, the Group sold the Granny Smith and Fuji
mineral claims to Linceo Media Group ("Linceo"), a company with a
director in common, for 4,000 shares in Linceo at a value of
$47,600 CAD (GBP27,793) and retained a 2.5% NSR on each property.
During the year ended June 30, 2021, the Group impaired the shares
in Linceo to $1. Management assessed the value at year end and
confirmed there is no further changes to the fair value of the
Linceo shares.
AAM shares
On June 2, 2021, the Group acquired 12,500,000 AAM share
purchase warrants that had a conversion price of $0.03 USD and
expiry date of July 1, 2021 and acquired 11,000,000 AAM ordinary
shares. The Group issued 1,200,000 ordinary shares to acquire the
12,500,000 AAM share purchase warrants (GBP36,000 value) and
3,520,000 ordinary shares (GBP105,600 value) to acquire the
11,000,000 AAM ordinary shares. The warrants expired on July 1,
2021, with the GBP36,000 impaired to $1. During the year ended June
30, 2021, the Group impaired the shares in AAM to $1. Management
assessed the value at year end and confirmed there is no further
changes to the fair value of the AAM shares.
Moonbound Mining Ltd
On October 13 2021, the Group received 700,000 shares from
Moonbound Mining Ltd. from the option agreement for the Yak
property for $35,000 CAD (GBP20,638.70). Management assessed the
value at year end and confirmed there is no further changes to the
fair value of the Moonbound shares.
Power Group Project Ltd.
On October 1, 2021, the Group took part in a private placement
with 1315843 BC Ltd whereby the Company purchased 2,350,000 shares
at a price of $0.0001 per share which had a value of $235 CAD
(GBP137) when received.
On October 1, 2021, the Group received 3,000,000 shares from
1315843 BC Ltd. in relation to the option agreement with 1315843 BC
Ltd for the West Atlin property. The 1315843 BC Ltd shares had a
value of $300 CAD (GBP175) when received.
In December 2021, 1315843 BC Ltd. was acquired by Power Group
Projects Ltd. ("PGP") with the 5,350,000 held in 1315843 BC Ltd.
exchanged for 5,350,000 PGP shares.
Calidus Resources Corp.
On September 1 2021, the Group received 500,000 shares from
Calidus Resources Corp. for the option agreement for the South
Timmins property for $500 CAD (GBP320). The value of shares
remained the same for the year ended 30 June 2022.
Prosper Africa Resources Ltd.
On March 7 2022, the Group purchased 1,500,000 shares from
Prosper Africa Resources Ltd. for $150 CAD (GBP96). Management
assessed the value at year end and confirmed there is no further
changes to the fair value of the Prosper Africa Resources
shares.
Allied Copper Corp.
On 3 February 2022, the Group received 1,000,000 shares from
Allied Copper Corp. from the option agreement for the Klondike
project for $225,000 (GBP130,661). At 30 June 2022, fair value of
the Allied Copper Corp. shares is $138,194 CAD (GBP88,276).
Canary Biofuels Inc.
On 28 June 2022, the Group purchased 59,700 shares from Canary
Biofuels Inc. for $200,095 (GBP127,753). Management assessed the
value at year end and confirmed there is no further changes to the
fair value of the Canary Biofuels shares.
Alchemist Mining Inc.
On 14 January 2022, the Group purchased 1,250,000 shares from
Alchemist Mining Inc. for $93,750 (GBP54,184). At 30 June 2022,
fair value of the Alchemist Mining Inc..shares is $375,000 CAD
(GBP239,503).
1311516 B.C. Ltd
On 3 March 2022, the Group received 3,000,000 shares from
1311516 B.C. Ltd from the option agreement for the Rizz property
for $5,010 CAD (GBP2,963).
On 9 March 2022, the Group received 2,000,000 shares from
1311516 B.C. Ltd from the option agreement for the Icefall property
for $3,340 CAD (GBP1,978).
Management assessed the value at year end and confirmed there is
no further changes to the fair value of the 1311516 B.C. Ltd
shares.
7 Royalty Asset
Apple Bay Property, Canada
On April 5, 2017, the Group purchased a 1.50% production royalty
on the Apple Bay property located in British Columbia, Canada. The
production royalty was purchased for 3,000,000 shares of the Group
at a deemed value of $0.10 CAD (GBP0.058) per share from a company
controlled by the CEO of the Group. During the year ended June 30,
2021, the Group determined that the royalty was impaired and
reduced the balance to GBP1. As at June 30, 2022, included in
Royalty Assets is GBP1 (June 30, 2021 - GBP1) attributed to the
Apple Bay property.
Caribou Property, Canada
On 28 June 2022, The Group announced that Norseman Silver
Limited completed their obligations under the option agreement
taking complete ownership of the property and ratifying The Group's
interest into a 2% net smelter royalty. As at June 30, 2022 the
royalty asset was valued at has no value attributed to it.
8 Debentures Receivable
Group
------------------------------
30 June 2022 30 June 2021
GBP GBP
-------------------------- -------------- --------------
Opening - -
Additions 1,595,635 -
Royalties to be received 11,233 -
Fair Value Movement 51,032 -
-------------------------- -------------- --------------
At end of period 1,657,900 -
-------------------------- -------------- --------------
Masten Unit, United States
On 31 May 2022, the Group entered into an agreement with G2
Energy Corp. ('G2') on the Masten Unit Energy Project located in
Cochran County Texas, United States. Whereby the Company will
provide G2 with a $2,000,000 USD debenture on a two-year term in
exchange for a 3.25% Overriding Royalty Interest in the Project. G2
will pay 12% per annum interest to the Company, calculated and paid
quarterly in cash or shares at the discretion of the Company. As
part of the agreement, The Group received 6,500,000 warrants for
G2, however management have deemed that these warrants have no
value at this stage as the assets held by G2 are predominantly made
up of the early stage exploration assets on which they have
received from the Company. The group is in regular communication
with G2 and is monitoring the results of its exploration activities
that will be undertaken as the result of the funding by the Group
to G2.
9 Convertible loans
Group
-------------------------
30 June
2022 30 June 2021
GBP GBP
----------------------- ---------------------------- ------------- --------------
Convertible loan
note $500,000 USD (GBP411,224) 60,878 450,591
Convertible loan
note $420,000 USD (GBP343,428) 75,720 350,718
Convertible loan
note $49,790 USD (GBP40,950) 11,763 44,000
Convertible loan
note $250,000 USD (GBP205,612) 36,004 220,281
Impairment provision (184,365) (1,065,590)
----------------------------------------------------- ------------- --------------
- -
---------------------------------------------------- ------------- --------------
On March 20, 2019, the Group issued a $500,000 USD (GBP361,847)
unsecured convertible loan note to Anglo-African Minerals plc
("AAM"). The convertible loan note bears interest at 10% per annum
and compounds monthly, is unsecured, and had an original maturity
date of September 20, 2019. The convertible loan note is
convertible into common shares of AAM at $0.01 USD per share. The
maturity date of the convertible loan note was subsequently
extended to March 20, 2020, and the Group was issued 21,029,978 AAM
warrants per the terms of the extension. These warrants have a
strike price of $0.025 USD per share, with an expiry date of
September 19, 2021. As at June 30, 2021, the Group impaired the
balance down to $Nil as collectability was considered doubtful. As
at June 30, 2022, Management have accrued interest amounting
GBP60,878 (2021 - GBP88,744) on the convertible loan but believe
this should remain impaired.
On June 2, 2021, the Group acquired an unsecured convertible
loan note that was issued to AAM from Cronin Services Ltd., a
company controlled by the Chairman and CEO of the Group, that had a
principal value of $420,000 USD (GBP303,744) and accrued interest
of $61,261 (GBP44,304) for total value of $481,261 USD
(GBP348,048). The Group issued 14,166,790 ordinary shares and
7,083,395 share purchase warrants to acquire this note. Each share
purchase warrant may be converted into one ordinary share of the
Group at GBP0.05 per ordinary share and expires June 2, 2025. The
convertible loan note bears interest at 10% per annum and compounds
monthly, is unsecured, and had a maturity date of May 31, 2021. The
convertible loan note is convertible into common shares of AAM at
$0.01 USD per share. As at June 30, 2021, the Group impaired the
balance down to $Nil as collectability was considered doubtful. As
at June 30, 2022, Management have accrued interest amounting
GBP75,720 ( 2021 - GBP44,304) on the convertible loan but believe
this should remain impaired.
On June 2, 2021, the Group acquired an unsecured convertible
loan note that was issued to AAM from Cronin Capital Corp., a
company controlled by the Chairman and CEO of the Group, that had a
principal value of $49,790 USD (GBP35,949) and accrued interest of
$9,826 USD (GBP7,094) for total value of $59,617 USD (GBP43,043).
The Group issued 1,630,832 ordinary shares and 1,630,832 share
purchase warrants to acquire this note. Each share purchase warrant
may be converted into one ordinary share of the Group at GBP0.05
per ordinary share and expires 2025 June 2. The convertible loan
note bears interest at 15% per annum and compounds monthly, is
unsecured, and had a maturity date of 2020 September 30. The
convertible loan note is convertible into common shares of AAM at
$0.005 USD per share. As at June 30, 2021, the Group impaired the
balance down to $Nil as collectability was considered doubtful. As
at June 30, 2022, Management have accrued interest amounting
GBP11,763 (2021 - GBP7,094) on the convertible loan but believe
this should remain impaired.
On June 2, 2021, the Group acquired an unsecured convertible
loan note that was issued to AAM by Reykers Nominees Limited that
had a principal value of $250,000 USD (GBP180,500) and accrued
interest of $52,776 (GBP38,104) for total value of $302,776 USD
(GBP218,604). The Group also acquired 12,500,000 AAM share purchase
warrants that had a conversion price of $0.03 USD and expiry date
of July 1, 2021 and acquired 11,000,000 AAM ordinary shares. The
Group issued 8,912,756 ordinary shares to acquire this convertible
note, 1,200,000 ordinary shares to acquire the 12,500,000 AAM share
purchase warrants and 3,520,000 ordinary shares to acquire the
11,000,000 AAM ordinary shares. The convertible loan note bears
interest at 10% per annum and compounds monthly, is unsecured, and
had a maturity date of 30 June 2020. The convertible loan note is
convertible into common shares of AAM at $0.01 USD per share. As at
June 30, 2021, the Group impaired the balance down to $Nil as
collectability of the convertible loan was considered doubtful and
the shares and warrants impaired. As at June 30, 2022, Management
have accrued interest amounting GBP36,004 (2021 - GBP38,104) on the
convertible loan but believe this should remain impaired.
10 Trade and other receivables
The following table sets out the fair values of financial assets
within Trade and other receivables.
Group Company
---------------------- ----------------------
30 June 30 June 30 June 30 June
2022 2021 2022 2021
GBP GBP GBP GBP
---------------------------- ----------- --------- ----------- ---------
Other Debtors 16,427 - 16,428 -
Inter-company Receivables - - 406,186
Tax Receivables 15,627 3,381 - -
Sundry Debtors 204,574 227,019 190,000 514,849
Prepayments 1,064,005 291,830 1,064,005 -
---------------------------- ----------- --------- ----------- ---------
1,300,634 522,230 1,676,619 514,849
---------------------------- ----------- --------- ----------- ---------
The fair value of all current receivables is as stated
above.
Included in sundry debtors is an amount of GBP190,000 (2021:
GBP190,000) as at 30 June 2022 in respect of unpaid ordinary share
capital issued on 3 June 2021.
The maximum exposure to credit risk at the year-end date is the
carrying value of each class of receivable mentioned above. The
Group does not hold any collateral as security. Trade and other
receivables are all denominated in GBP sterling.
There are no financial assets which are past due and for which
no provision for bad or doubtful debts has been made.
The carrying amounts of the Group and Company's trade and other
receivables are denominated in the following currencies:
Group Company
---------------------- ----------------------
30 June 30 June 30 June 30 June
2022 2021 2022 2021
GBP GBP GBP GBP
------------------- ----------- --------- ----------- ---------
UK Pounds 1,130,433 518,849 1,676,619 514,849
Canadian Dollars 30,201 3,381 - -
1,160,634 522,230 1,676,619 514,849
------------------- ----------- --------- ----------- ---------
11 Cash and cash equivalents
Group Company
---------------------- ----------------------
30 June 30 June 30 June 30 June
2022 2021 2022 2021
GBP GBP GBP GBP
--------------------------- --------- ----------- --------- -----------
Cash at bank and in hand 310,578 1,277,617 124,118 1,232,385
--------------------------- --------- ----------- --------- -----------
Majority of the entities cash at bank is held with institutions
with at least a AA- credit rating. A bank account in the UK which
holds a small percentage of cash is held with institutions whose
credit rating is unknown.
The carrying amounts of the Group and Company's cash and cash
equivalents are denominated in the following currencies:
Group Company
---------------------- ----------------------
30 June 30 June 30 June 30 June
2022 2021 2022 2021
GBP GBP GBP GBP
------------------- --------- ----------- --------- -----------
UK Pounds 107,707 1,232,385 107,707 1,232,385
US Dollars 16,411 - 16,411 -
Canadian Dollars 186,460 45,232 - -
310,578 1,277,617 124,118 1,232,385
------------------- --------- ----------- --------- -----------
12 Financial Instruments by Category
General objectives, policies and processes
The Board has overall responsibility for the determination of
the Group's risk management objectives and policies and, whilst
retaining ultimate responsibility for them, it has delegated
authority for designing and operating processes that ensure the
effective implementation of the objectives and policies to the
Group's finance function. The Board receives monthly reports
through which it reviews the effectiveness of the processes put in
place and the appropriateness of the objectives and policies it
sets.
The overall objective of the Board is to set policies that seek
to reduce risk as far as possible without unduly affecting the
Group's competitiveness and flexibility.
The Group reports in Sterling. Internal and external funding
requirements and financial risks are managed based on policies and
procedures adopted by the Board of Directors. The Group does not
use derivative financial instruments such as forward currency
contracts, interest rate and currency swaps or similar instruments.
The Group does not issue or use financial instruments of a
speculative nature.
Capital management
The Group's objectives when maintaining capital are:
-- to safeguard the entity's ability to continue as a going
concern, so that it can continue to provide returns for
shareholders and benefits for other stakeholders; and
-- to provide an adequate return to shareholders.
The capital structure of the Group consists of total
shareholders' equity as set out in the 'Statement of Changes in
Equity'. All working capital requirements are financed from
existing cash resources and the Crescita draw down facility.
Capital is managed on a day to day basis to ensure that all
entities in the Group are able to operate as a going concern.
Operating cash flow is primarily used to cover the overhead costs
associated with operating as London Standard-listed company.
Liquidity risk
Liquidity risk arises from the Group's management of working
capital. It is the risk that the Group will encounter difficulty in
meeting its financial obligations as they fall due.
The Directors consider that there is no significant liquidity
risk faced by the Group. The Group maintains sufficient balances in
cash to pay accounts payable and accrued expenses.
The Board receives forward looking cash flow projections at
periodic intervals during the year as well as information regarding
cash balances. At the balance sheet date the Group had cash
balances of GBP310,578 and the financial forecasts indicated that
the Group expected to draw down on the Crescita Capital LLC
facility to meet its obligations under all reasonably expected
circumstances and will not need to establish overdraft or other
borrowing facilities.
Interest rate risk
As the Group has no borrowings, it only has limited interest
rate risk. The impact is on income and operating cash flow and
arises from changes in market interest rates. Cash resources are
held in current, floating rate accounts.
Market risk
Market price risk arises from uncertainty about the future
valuations of financial instruments held in accordance with the
Group's investment objectives. These future valuations are
determined by many factors but include the operational and
financial performance of the underlying investee companies, as well
as market perceptions of the future of the economy and its impact
upon the economic environment in which these companies operate.
This risk represents the potential loss that the Group might suffer
through holding its financial investment portfolio in the face of
market movements, which was a maximum of GBP2,069,302 (2021:
GBP4,353,318).
The investments in equity of quoted companies that the Group
holds are less frequently traded than shares in more widely traded
securities. Consequently, the valuations of these investments can
be more volatile.
Market price risk sensitivity
The table below shows the impact on the return and net assets of
the Group if there were to be a 20% movement in overall share
prices of the financial investments held at 30 June 2022.
2022 2021
------------------------------------------- --------------------- ---------------------
Other comprehensive Other comprehensive
income and income and
Net assets Net assets
GBP GBP
------------------------------------------- --------------------- ---------------------
Decrease if overall share price falls
by 20%, with all other variables held
constant (2,367,554) (870,664)
Decrease in other comprehensive earnings
and net asset value per Ordinary share
(in pence) (0.0049)p (0.009)p
Increase if overall share price rises
by 20%, with all other variables held
constant 2,367,554 870,664
Increase in other comprehensive earnings
and net asset value per Ordinary share
(in pence) 0.0049p 0.009p
------------------------------------------- --------------------- ---------------------
The impact of a change of 20% has been selected as this is
considered reasonable given the current level of volatility
observed and assumes a market value is attainable for the Group's
unlisted investments.
Currency risk
The Directors consider that there is minimal significant
currency risk faced by the Group. The current foreign currency
transactions the Group enters are denominated in CAD$ and USD$ in
relation to transactions associated with exploration and evaluation
option payments and property expenditures. The Group maintains
minimal foreign currency holdings to minimize this risk.
Credit risk
Credit risk is the risk that a counterparty will fail to
discharge an obligation or commitment that it has entered into with
the Group. The Group's maximum exposure to credit risk is:
2022 2021
GBP GBP
----------------------------------- ----------- -----------
Cash at bank 310,578 1,277,617
Other receivables 1,160,633 522,230
Convertible debenture receivable 1,657,900 -
3,129,111 1,799,847
----------------------------------- ----------- -----------
The Group's cash balances are held in accounts with HSBC,
BLK.FX, Bank of Montreal and with its Investment Broker
accounts.
On the 14 May 2022, the Group granted a convertible debenture to
G2 Technologies Corp. worth a total of $2,000,000
(GBP1,657,900).
Fair value of financial assets and liabilities
Financial assets and liabilities are carried in the Statement of
Financial Position at either their fair value (financial
investments) or at a reasonable approximation of the fair value
(trade and other receivables, trade and other payables and cash at
bank).
The fair values are included at the amount at which the
instrument could be exchanged in a current transaction between
willing parties, other than in a forced or liquidation sale.
Trade and other receivables
The following table sets out the fair values of financial assets
within Trade and other receivables.
2022 2021
Financial assets GBP GBP
----------------------------------------------------- ----------- ---------
Trade and other receivables - Non interest earning 1,160,633 518,849
There are no financial assets which are past due and for which
no provision for bad or doubtful debts has been made.
Trade and other payables
The following table sets out financial liabilities within Trade
and other payables. These financial liabilities are predominantly
non-interest bearing. Other liabilities include tax and social
security payables and provisions which do not constitute
contractual obligations to deliver cash or other financial
assets.
2022 2021
Financial liabilities GBP GBP
--------------------------- ----------- ---------
Trade and other payables 1,395,910 895,264
13 Trade and other payables
The following table sets out financial liabilities within Trade
and other payables. These financial liabilities are predominantly
non-interest bearing. Other liabilities include tax and social
security payables and provisions which do not constitute
contractual obligations to deliver cash or other financial
assets.
Group Company
---------------------- ----------------------
30 June 30 June 30 June 30 June
2022 2021 2022 2021
GBP GBP GBP GBP
----------- --------- ----------- ---------
Trade payables 1,217,736 823,465 1,194,500 407,282
Accruals 157,353 71,799 142,084 42,603
Other Creditors 20,821 - 20,670 -
--------------------------- ----------- --------- ----------- ---------
Trade and other payables 1,395,910 895,264 1,357,254 449,885
--------------------------- ----------- --------- ----------- ---------
The carrying amounts of the Group and Company's trade and other
payables are denominated in the following currencies:
Group Company
---------------------- ----------------------
30 June 30 June 30 June 30 June
2022 2021 2022 2021
GBP GBP GBP GBP
------------------- ----------- --------- ----------- ---------
UK Pounds 1,357,254 449,885 1,357,254 449,885
Canadian Dollars 38,656 445,379 - -
1,395,910 895,264 1,357,254 449,885
------------------- ----------- --------- ----------- ---------
14 Share capital and premium
Number of Share capital Share premium Total
shares GBP GBP GBP
---------------------------------------- -------------- --------------- --------------- -------------
As at 30 June 2020 50,119,849 50,120 2,163,169 2,213,289
---------------------------------------- -------------- --------------- --------------- ---------------
Issue of new shares 30,475,001 30,475 55,373 85,848
Transfer to reserve acquisition
reserve (80,594,850) (80,595) (2,218,542) (2,299,137)
Recognition of Cloudbreak
Discovery Plc equity at reverse
acquisition 289,468,015 460,423 7,969,714 8,430,137
Issued - private placement
(net of issuance costs) 66,666,667 66,667 1,886,312 1,952,979
Issue of shares - AAM acquisitions 29,430,378 29,430 853,481 882,911
Issue of shares - equity drawdown
facility fee (net of issuance
costs) 4,000,000 4,000 196,000 200,000
As at 30 June 2021 389,565,060 560,520 10,905,507 11,466,027
---------------------------------------- -------------- --------------- --------------- ---------------
As at 1 July 2021 389,565,060 560,520 10,905,507 11,466,027
---------------------------------------- -------------- --------------- --------------- ---------------
Issue of new shares - 21 July
2021 500,000 500 14,500 15,000
Issue of new shares - 31 December
2021 500,000 500 14,500 15,000
Issue of new shares - 4 January
2022 58,000,000 58,000 1,682,000 1,740,000
Warrant exercised - 28 February
2022 100,000 100 4,900 5,000
Issue of new shares - 1 March
2022 (1) 19,596,931 19,597 1,371,660 1,391,257
Warrant exercised - 4 March
2022 1,428,874 1,429 41,437 42,866
Warrant exercised - 7 March
2022 100,000 100 4,900 5,000
Warrant exercised - 9 March
2022 783,335 783 22,717 23,500
Issue of new shares - 31 March
2022 12,000,000 12,000 738,000 750,000
Warrant exercised - 6 April
2022 400,000 400 11,600 12,000
Warrant exercised - 13 April
2022 200,000 200 9,800 10,000
---------------------------------------- -------------- --------------- --------------- ---------------
As at 30 June 2022 483,174,200 654,129 14,821,521 15,475,650
---------------------------------------- -------------- --------------- --------------- ---------------
(1) Includes issue costs of GBP78,513
On 21 July 2021, the Group issued and allotted 500,000 new
ordinary shares at a price of 3 pence per share for payment of
services.
On 31 December 2021, the Group issued and allotted 500,000 new
ordinary shares at a price of 3 pence per share for payment of
services.
On 4 January 2022, the Group issued and allotted 58,000,000 new
ordinary shares at a price of 3 pence per share as part of a
marketing and corporate development services contract.
On 28 February 2022, the Group issued and allotted 100,000 new
ordinary shares at a price of 5 pence per share for exercise of
warrants.
On 1 March 2022, the Group raised GBP1,469,770 net of issue
costs via the issue and allotment of 19,596,931 new ordinary shares
at a price of 7.5 pence per share.
On 4 March 2022, the Group issued and allotted 1,428,874 new
ordinary shares at a price of 3 pence per share for exercise of
warrants.
On 7 March 2022, the Group issued and allotted 100,000 new
ordinary shares at a price of 5 pence per share for exercise of
warrants.
On 9 March 2022, the Group issued and allotted 783,335 new
ordinary shares at a price of 3 pence per share for exercise of
warrants.
On 31 March 2022, the Group issued and allotted 12,000,000 new
ordinary shares at a price of 6.25 pence per share as part of a
drawdown on the Crescita Capital LLC facility.
On 6 April 2022, the Group issued and allotted 400,000 new
ordinary shares at a price of 3 pence per share for exercise of
warrants.
On 13 April 2022, the Group issued and allotted 200,000 new
ordinary shares at a price of 5 pence per share for exercise of
warrants.
15 Share based payments
During the year ended 30 June 2022, the outstanding options and
warrants were cancelled and the residual value from 30 June 2021
being GBP1,180 was allocated to contributed surplus.
The outstanding share options and warrants as at 30 June 2022
are shown below:
Weighted average
exercise price
Options Warrants (GBP)
-------------------------------- ------------- --------------- -----------------
As at 30 June 2021 5,050,000 43,615,967 0.015
-------------------------------- ------------- --------------- -----------------
Options - Cancelled (1,566,667) - 0.27
Options - Exercised (83,333) - 0.03
Options - Issued 11,250,000 - 0.03
Warrants - Exercised - (2,928,876) 0.04
Warrants - Issued - 3,150,002 0.04
Warrants - Expired - (20,615,401) 0.11
-------------------------------- ------------- --------------- -----------------
As at 30 June 2022 14,650,000 23,221,692 0.04
-------------------------------- ------------- --------------- -----------------
The Company and Group have no legal or constructive obligation
to settle or repurchase the options or warrants in cash.
The fair value of the share options and warrants was determined
using the Black Scholes valuation model. The parameters used are
detailed below:
2021 Warrants 2021 Warrants 2022 Warrants 2022 Warrants
--------------- --------------- --------------- ---------------
Granted on: 2/06/2021 2/06/2021 13/8/2021 1/3/2022
Number of warrants 4,530,497 8,714,227 2,750,002 400,000
Life (years) 2.71 years 4 years 2 years 2 years
Share price
(pence per
share) 0.10p 0.05p 0.025p 0.10p
Risk free rate 0.55% 0.81% 0.58% 0.80%
Expected volatility 100% 100% 20.28% 140.94%
Expected dividend - - - -
yield
Total fair GBP46,092 GBP157,695 GBP2,750 GBP27,314
value
2021 Options 2022 Options
-------------- --------------
Granted on: 2/06/2020 25/8/2021
Number of options 5,050,000 11,250,000
Life (years) 3.08 years 4 years
Share price (pence
per share) 0.025p 0.03p
Risk free rate 0.64% 0.62%
Expected volatility 100% 20.55%
Expected dividend - -
yield
Total fair value GBP99,572 GBP11,238
The expected volatility of the options is based on historical
volatility for the six months prior to the date of granting.
The risk-free rate of return is based on zero yield government
bonds for a term consistent with the option life.
A reconciliation of options and warrants granted over the year
to 30 June 2022 is shown below:
2022 2021
---------------------------------------------------- ----------------------------------------------------
Weighted Weighted Weighted Weighted
Range Weighted average average Weighted average average
of average remaining remaining average remaining remaining
exercise exercise life life exercise life life
prices price Number expected contracted price Number expected contracted
(GBP) (GBP) of shares (years) (years) (GBP) of shares (years) (years)
---------- ----------- ------------ ----------- ------------ ----------- ------------ ----------- ------------
0 - 0.03 0.0286 16,300,000 4.282 4.282 0 - 0.03 25,665,401 0.96 0.96
0.03 - 0.03 -
0.05 0.0500 16,641,195 1.740 1.740 0.05 17,040,925 2.75 2.75
0.05 - 0.05 -
0.10 0.1000 4,530,497 1.630 1.630 0.10 4,530,497 2.71 2.71
0.10 - 0.10 -
0.15 0.1125 400,000 1.670 1.670 0.15 - - -
16 Other reserves
Foreign
currency
Share option Warrant translation Other reserves
reserve option reserve reserve GBP Total
GBP GBP GBP GBP
------------------------ -------------- ----------------- -------------- ------------------ -----------
At 30 June 2021 211,977 195,666 67,843 36,015 511,501
------------------------ -------------- ----------------- -------------- ------------------ -----------
Currency translation
differences - - 233,866 - 233,866
Expired Options (112,406) - - - (112,406)
Issued Options 11,238 - - - 11,238
Issued Warrants - 30,075 - - 30,075
Exercised Options (1,180) - - - (1,180)
Exercised Warrants - (13,024) - - (13,024)
Cancelled Options (24,962) - - - (24,962)
Other Equity Movement - - - 4,845 4,845
Elimination of other
reserves - - - (40,860) (40,860)
At 31 June 2022 84,667 212,717 301,709 - 599,093
------------------------ -------------- ----------------- -------------- ------------------ -----------
17 Employee benefit expense
The total number of Directors who served in the year was 4
(2021: 4). There are no employees of the Group.
The following amounts were paid during the year to
Directors:
Group
--------------------------------
Year ended Year ended
30 June 2022 30 June 2021
Staff costs GBP GBP
------------------------------------- --------------- ---------------
Directors Fees and Consulting Fees 79,976 23,760
79,976 23,760
------------------------------------- --------------- ---------------
Amounts included in Directors fees and salaries include
GBP79,976 (2021: GBP23,760) in relation to director fees and
consulting fees. Details of fees paid to Companies and Partnerships
of which the Directors detailed above are Directors and Partners
have been disclosed in Note 26.
18 Directors' remuneration
Year ended 30 June 2022
Short-term Post-employment Share
benefits benefits based payments Total
GBP GBP GBP GBP
---------------------------- ------------ ----------------- ----------------- -----------------
Directors
Kyler Hardy - - 2,000 2,000
Paul Gurney 7,500 - - 7,500
Emma Priestly - - 600 600
Andrew Male 72,476 - 600 73,076
79,976 - 3,200 83,176
------------ ----------------- ----------------- -----------------
3,200,000 options were issued to directors on 25 August 2021 for
their services. The options have an exercise price of GBP0.03 and
expire on 25 August 2024. Details of the Share Option charges can
be found in Note 15.
19 Finance income
Group
---------------------------
Year ended
30 June Year ended
2022 30 June 21
GBP GBP
--------------------------------------------- ------------ ---------------
Interest income on convertible loan 138,107 46,587
G2 Technology - debenture interest 16,411 -
--------------------------------------------- ------------ ---------------
Finance Income 154,518 46,587
--------------------------------------------- ------------ ---------------
The interest income on the convertible loan is interest on the
AAM convertible loans. This interest is subsequently impaired.
Refer to note 9 for further information.
20 Other gain/(losses)
Group
-----------------------------
Year ended
30 June Year ended
2022 30 June 2021
GBP GBP
------------ ------------ ---------------
Other gain 8,332 -
Other gain 8,332 -
------------ ------------ ---------------
21 Income tax expense
No charge to taxation arises due to the losses incurred.
The tax on the Group's loss before tax differs from the
theoretical amount that would arise using the weighted average tax
rate applicable to the losses of the consolidated entities as
follows:
Group
------------------------------
Year ended Year ended
30 June 30 June
2022 2021
GBP GBP
--------------------------------------------------- ------------- ---------------
Loss before tax (5,557,029) (902,060)
--------------------------------------------------- ------------- ---------------
Tax at the applicable rate of 17% (2021: 22.5%) (944,695) (202,964)
Effects of:
Expenditure not deductible for tax purposes 8,181 16,693
Net tax effect of losses carried forward 936,514 186,271
--------------------------------------------------- ------------- ---------------
Tax (charge)/refund - -
--------------------------------------------------- ------------- ---------------
The weighted average applicable tax rate of 17 % (2021: 22.50 %)
used is a combination of the 19% standard rate of corporation tax
in the UK and 15% Canadian corporation tax.
The Company has tax losses of approximately GBP2,130,164 (2021:
GBP1,193,650) available to carry forward against future taxable
profits. No deferred tax asset has been recognised on accumulated
tax losses because of uncertainty over the timing of future taxable
profits against which the losses may be offset
As set out in Note, the Group has not recognised a deferred tax
asset in the financial statements as there is no certainty that
taxable profits will be available against which these assets could
be utilised.
22 Earnings per share
Group
The calculation of the basic loss per share of GBP0.01 (2021:
GBP0.85) is based on the loss the loss attributable to equity
owners of the group of GBP5,697,030 (2021: loss of GBP902,060), and
on the weighted average number of ordinary shares of 428,042,226
(2021: 105,829,101) In issue during the period.
In accordance with IAS 33, no diluted earnings per share is
presented as the effect on the exercise of share options or
warrants would be to decrease the loss per share.
Details of share options and warrants that could potentially
dilute earnings per share in future periods are set out in Note
13.
23 Expenses by nature
Group
--------------------------
Year ended Year ended
30 June 30 June
2022 2021
GBP GBP
-------------------------------------------------- ------------ ------------
Professional fees 1,564,654 279,568
Consulting fees 1,184,930 302,485
Finance charge - 200,000
Transfer agent and filing fees 110,965 65,178
Travel 86,597 -
Insurance 30,929 -
IT & Software services 2,608 -
Public Relations 188,160 -
LSE listing fee - 2,365,634
Premises and Office costs 18,040 -
Share option expense 41,325 -
Other expenses 80,006 25,192
------------ ------------
Total administrative expenses 3,308,214 3,238,057
------------ ------------
24 Commitments
License commitments
The Group owns a number of exploration licences in Canada. These
licences include commitments to pay minimum spend requirements. The
Group have entered into option agreements on all of their
properties aside from newly staked properties, Northern Treasure
and Foggy Mountain. As part of these option agreements, the minimum
spend obligations have been passed onto the Optionees. Refer to
note 6 for further information.
As at 30 June 2022 these are as follows:
Group
---------------
Minimum spend
requirement
GBP
--------------------------------------------------- ---------------
Not later than one year 1,398,700
Later than one year and no later than five years 7,217,035
--------------------------------------------------- ---------------
Total 8,615,735
--------------------------------------------------- ---------------
25 Related party transactions
Details of the Directors' remuneration can be found in Note 16.
Key Management Personnel are considered to be the Directors.
At June 30, 2022, the Group held investments of GBP1,589,124 in
Imperial Helium, Temas Resources, Norseman Silver, Allied Copper,
Calidus Resources and Buscando Resources where Kyler Hardy is also
a Director (2021: GBP4,353,317). The holdings of these investments
are connected to requirements in the property option agreements
whereby the optionees are to make payments in shares. All companies
except for Calidus Resources are Level 1 investments and are not
directly controlled by Kyler Hardy. For further information, please
refer to note 5.
During the year, the Group paid Cronin Services GBP1,234,952 for
the provision of consulting and management services during the year
(2021: 60,000) a company controlled by the CEO, Kyler Hardy. These
were in relation to consultancy fees under a management service
agreement dated 1 February 2020 and 1 June 2021. In addition, the
Group paid amounts totalling GBP5,034 (2021: GBP32,212) to Cronin
Capital Corp,. The amount outstanding owing to Cronin Capital and
Cronin Services at the year-end was GBP965,340 (2021:
GBP523,021).
During the year, the Group paid amounts totalling GBP72,476
(2021: 17,168) to Westridge Management International Ltd. A company
controlled by Andrew Male, a Director of the group. The amount
outstanding owing to Westridge Management at the year-end was
GBP14,000.
26 Ultimate controlling party
The Directors believe there is no ultimate controlling
party.
27 Events after the reporting date
On 5 July 2022, the Group elected to draw down GBP378,000 of the
GBP10,000,000 Equity Draw Down Agreement with Crescita Capital LLC
entered on the 16 February 2021 for the issue of 16,800,000 new
shares at 2.25 pence.
On 19 July 2022, the Group raised GBP585,625 through the issue
of 26,027,776 new ordinary shares at 2.25 pence per share. On this
same day, they also announced the publication of a Prospectus.
On 9 August 2022, the Group elected to draw down GBP179,000 of
the GBP10,000,000 Equity Draw Down Agreement with Crescita Capital
LLC entered on the 16 February 2021 for the issue of 10,000,000 new
shares at 1.79 pence. On this same day, the Company also granted
7,250,000 options and 2,950,000 warrants over ordinary shares to
directors, PDMR's and other members of staff and consultants for an
exercise price of 2.25 pence per share. The options will expire
after three years and the warrants will expire after one year.
On 16 August 2022, the Group entered into a debenture agreement
with Legado Oil & Gas Ltd. to provide funding of $1.5 million
USD (GBP1,240,872) in the development capital for the Butt Strawn
Energy Project in Irion County, Texas. $500,000 was paid on signing
with the remaining $1,000,000 to be paid within 90 days of signing.
The capital is being deployed as a convertible debenture which, at
the Company's discretion, can be converted into a six per cent
Overriding Royalty Interest on the Project.
On 1 September 2022, the Group elected to draw down GBP180,000
of the GBP10,000,000 Equity Draw Down Agreement with Crescita
Capital LLC entered on the 16 February 2021 for the issue of
12,000,000 new shares at 1.5 pence.
On 25 October 2022, the Group elected to draw down GBP203,500 of
the GBP10,000,000 Equity Draw Down Agreement with Crescita Capital
LLC entered on the 16 February 2021 for the issue of 18,500,000 new
shares at 1.1 pence .
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END
FR WPGCUUUPPPPU
(END) Dow Jones Newswires
October 31, 2022 03:00 ET (07:00 GMT)
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