TIDMCDL
RNS Number : 1717R
Cloudbreak Discovery PLC
25 October 2023
25 October 2023
Cloudbreak Discovery Plc
("Cloudbreak" or the "Company")
Final Results for the Year Ended 30 June 2023
Notice of Annual 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 2023 ("FY23" or the "Period").
Period Highlights
Company Updates
-- Kyler Hardy stepped down as CEO and Chairman in June 2023
with Andrew Male assuming the role of Interim CEO to realign
Cloudbreak to be more 'London centric'.
-- Consulting contracts with Cronin Capital Ltd and Cronin
Services Ltd. were also terminated at the same time.
-- Towards the end of 2022 a new broker, Oberon Capital, was
appointed for the advancement of financing opportunities and
project generation.
-- Like many of the companies in the resource sector, Cloudbreak
has been quiet during a challenging financial climate.
Projects
-- The Board have reviewed the existing assets of the Company
and are continuing to explore further advancement of all
projects.
-- The Company will continue to look at both mining and oil and
gas projects with a view to maintaining the same thesis for project
generations and asset aggregation.
-- The Company will provide a more robust analysis of its projects in the coming weeks.
-- We look forward to realising continued value across the asset package.
Post Period Highlights
-- Raised GBP340,000 in convertible loan notes from existing shareholders and directors.
-- Continued analysis of new projects and review of additional acquisition proposals
Financials
-- The loss of the Group for the year ended 30 June 2023 amounts
to GBP3,997,899 (30 June 2022: GBP5,557,029.
-- GBP244,074 in cash and cash equivalents held at the period end (30 June 2022: GBP310,578)
-- Exploration and evaluation cash expenditures amount to
GBP590,845 (30 June 2022: GBP370,848)
-- GBP891,255 carrying value of investments held at the period
end (30 June 2021: GBP2,069,302)
-- 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 2023 at 1 Heddon Street, London, W1B
4BD at 3:00 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 2023;
-- Notice of AGM 2023; and
-- Form of Proxy.
Copies of these documents will shortly be available on the
Company's website:
https://cloudbreakdiscovery.com/investors/
--S--
For additional information please contact:
Cloudbreak Discovery Tel: +44 792 6 397
PLC 675
Andrew Male, Interim andrew@westridgemi.com
CEO
Novum Securities Tel: +44 7399 9400
(Financial Adviser)
David Coffman / George
Duxberry
Oberon Capital Tel: +44 20 3179 5355
(Broker) /
+44 20 3179 5315
Nick Lovering / Adam
Pollock
INTERIM CEO'S REPORT
Company Updates
I am happy to provide shareholders of Cloudbreak with an update
on the activity of the Company over the past year. This will be the
Company's second full year on the Main Segment of the London Stock
Exchange.
As with most junior resource companies, it has been a
challenging year, and ours has been no different. During the past
year we have however continued to maintain and advance our
projects, complete project advancement with our partners and begun
to realise the value of some of the exploration and corporate
assets we have.
During the course of the year the Company raised a small amount
of capital from the market and continued to use its drawdown
facility with Crescita Capital LLC. These funds were used for
general working capital purposed and to advance the suite of
Cloudbreak projects.
In addition, the Company completed corporate restructuring in
order to lessen the overheads and expenditures.
In December 2022 we appointed a new Broker and continue to work
with them for the advancement of financing opportunities and
project generation. In the spring and summer of 2023, Cloudbreak,
like most resource companies, has been quiet waiting for market
corrections and a renewed buoyancy while continuing to advance the
projects the Company has.
In June 2023, the Board accepted the resignation of the CEO and
Chairman along with some of the Executive management team. The
Board wanted to refocus and re-align Cloudbreak to be more "London
centric" and this move allowed for this as well as cost savings.
The Board re-aligned and with Andrew Male assuming the interim CEO
role, Paul Gurney continues as a Non-Executive Director and Emma
Priestley as an Independent Non-Executive Director.
Projects
Cloudbreak has demonstrated the business model's viability and
will continue to progress in this manner. The Company currently has
two energy investments, Legado Oil & Gas Limited and G2 Energy
Corp. While both of these projects have had their own delays and
issues, Cloudbreak is happy with their progress and will continue
to look for projects of this nature going forward.
Cloudbreak has also realised proceeds from the sale of shares
that it holds in other companies as a result of the partnerships it
has fostered over the past two years, as well as realising cash
proceeds from the sale or optioning of various projects in the
mining space.
Outlook
The year ended 30 June 2023 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.
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.
We are starting to see some projects reach a point where we
could potentially begin receiving more 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 2023, the Group earned GBP364,968
(2022: GBP559,523) in revenue from property option sale agreements.
It realised GBP677,400 from sales of shares and raised a total of
GBP582,625 through the capital market and GBP1,473,581 in draws
from its drawdown facility. Total capital generated was
GBP2,056,206 and at the end of the fiscal year, there was
GBP244,074 in cash on hand.
Subsequent to the year end the Company raised a further
GBP340,000 in Convertible Loan Notes from existing shareholders and
directors.
Whilst the financial statements have been prepared on a going
concern basis the Company will be required to raise additional
funds within the next 12 months. The Directors are confident that
they will be secure the necessary funding, but the current
conditions do indicate the existence of a material uncertainty.
The result for the 2023 FY of GBP3,997,899 (2022: GBP5,557,029)
for the year ended 30 June 2023 consisted mainly of income from
property option payments, expenses from professional and consulting
fees and realised loss on sale of investments. For a further
breakdown on expenses, please refer to note 24 and for further
breakdown on value of investments, please refer to note 6.
Financial Position
The Group's Statement of Financial Position as at 30 June 2023
and comparatives at 30 June 2022 are summarised below:
2023 2022
GBP GBP
---------------------- ----------- -----------
Current assets 487,251 1,611,212
---------------------- ----------- -----------
Non-current assets 3,216,644 3,805,897
---------------------- ----------- -----------
Total assets 3,703,895 5,417,109
---------------------- ----------- -----------
Current liabilities 1,704,437 1,395,910
---------------------- ----------- -----------
Total liabilities 1,704,437 1,395,910
---------------------- ----------- -----------
Net assets 1,999,458 4,021,199
---------------------- ----------- -----------
On behalf of the Board, I would like to record our thanks to
those who have helped the Company throughout the year.
Andrew Male
Interim CEO
STATEMENT OF FINANCIAL POSITION
As at 30 June 2023 Company number: 06275976
Group Company
----------------------------- -----------------------------
30 June 30 June 30 June 30 June
2023 2022 2023 2022
Note GBP GBP GBP GBP
------------------------------------ ------ -------------- ------------- -------------- -------------
Non-Current Assets
Royalty asset 7 1 1 - -
Intangible assets 5 236,518 78,694 - -
Investments 6 891,255 2,069,302 43,046 68,056
Investment in subsidiaries 6 - - 1,997,048 7,252,886
Leased Asset 29,810 - - -
Convertible debenture receivables 8 475,168 1,657,900 475,168 1,657,900
1,632,752 3,805,897 2,515,262 8,978,842
------------------------------------ ------ -------------- ------------- -------------- -------------
Current Assets
Trade and other receivables 10 243,177 1, 300,634 77,254 1,676,619
Cash and cash equivalents 11 244,074 310,578 18,684 124,118
Convertible debenture receivables 1,583,892 - 1,583,892 -
------------------------------------ ------ -------------- ------------- -------------- -------------
2,071,143 1,611,212 1,679,830 1,800,737
------------------------------------ ------ -------------- ------------- -------------- -------------
Total Assets 3,703,895 5,417,109 4,195,092 10,779,579
------------------------------------ ------ -------------- ------------- -------------- -------------
Current Liabilities
Trade and other payables 13 1,704,437 1,395,910 1,454,431 1,357,254
1,704,437 1,395,910 1,454,431 1,357,254
------------------------------------ ------ -------------- ------------- -------------- -------------
Total Liabilities 1,704,437 1,395,910 1,454,431 1,357,254
------------------------------------ ------ -------------- ------------- -------------- -------------
Net Assets 1,999,458 4,021,199 2,740,661 9,422,325
------------------------------------ ------ -------------- ------------- -------------- -------------
Equity attributable to owners
of the Parent
Share capital 14 778,635 654,129 778,635 654,129
Share premium 14 16,753,221 14,821,521 16,753,221 14,821,521
Other reserves 16 519,045 599,093 340,716 297,397
Reverse asset acquisition
reserve (4,134,019) (4,134,019) - -
Retained losses (11,917,424) (7,919,525) (15,131,911) (6,350,722)
------------------------------------ ------ -------------- ------------- -------------- -------------
Total Equity 1,999,458 4,021,199 2,740,661 9,422,325
------------------------------------ ------ -------------- ------------- -------------- -------------
The Company has elected to take the exemption under Section 408
of the Companies Act 2006 from presenting the Parent Company Income
Statement and Statement of Comprehensive Income. The loss for the
Company for the year ended 30 June 2023 was GBP8,781,189 (loss for
year ended 30 June 2022: GBP2,523,971).
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2023
Year ended Year ended
30 June 30 June
2023 2022
Continued operations Note GBP GBP
---------------------------------------------------- ------ --------------- -------------
Profit on disposal of exploration & evaluation
asset sales 364,968 559,523
Administrative expenses 24 (4,006,518) (3,308,214)
Foreign exchange (losses)/gains (81,024) 39,380
Operating loss (3,722,574) (2,709,311)
---------------------------------------------------- ------ --------------- -------------
Finance income 19 369,587 154,518
Other income 47,121 11,233
Impairment of loans 9 (128,607) (184,365)
Impairment of property (12,636) -
Other gains 20 17,913 8,332
Realised Loss on investments 21 (866,421) -
Unrealised fair value gain/(loss) on investments 6 309,896 (2,837,437)
Loss before income tax (3,985,721) (5,557,029)
Income tax 22 (12,178) -
---------------------------------------------------- ------ --------------- -------------
Loss for the year attributable to owners
of the Parent (3,997,899) (5,557,029)
---------------------------------------------------- ------ --------------- -------------
Basic and Diluted Earnings Per Share attributable
to owners of the Parent during the period
(expressed in pence per share) 23 (0.01)p (0.01)p
---------------------------------------------------- ------ --------------- -------------
Year ended Year ended
30 June 30 June
2023 2022
GBP GBP
---------------------------------------------- ------------- -------------
Loss for the period (3,997,899) (5,557,029)
Other Comprehensive Income:
Items that may be subsequently reclassified
to profit or loss
Currency translation differences (123,367) 233,866
----------------------------------------------- ------------- -------------
Other comprehensive income for the period,
net of tax (4,121,266) (5,323,163)
----------------------------------------------- ------------- -------------
Total Comprehensive Income attributable to
owners of the parent (4,121,266) (5,323,163)
----------------------------------------------- ------------- -------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2023
Reverse
asset
Share Share acquisition Other Retained
capital premium reserve reserves losses Total
Note GBP GBP GBP GBP GBP GBP
----------
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
-------------------- ---- ---------- --------------- ------------------ ------------- --------------- -------------
Balance as at
1 July 2022 654,129 14,821,521 (4,134,019) 599,093 (7,919,525) 4,021,199
-------------------- ---- ---------- --------------- ------------------ ------------- --------------- -------------
Loss for the year - - - - (3,997,899) (3,997,899)
-------------------- ---- ---------- --------------- ------------------ ------------- --------------- -------------
Other
comprehensive
income for the
year - - - - (3,997,899) (3,997,899)
Items that may - - - - - -
be subsequently
reclassified to
profit or loss
Currency
translation
differences - - - (123,367) - (123,367)
-------------------- ---- ---------- --------------- ------------------ ------------- --------------- -------------
Total
comprehensive
income for the
year - - - (123,367) (3,997,899) (4,121,266)
-------------------- ---- ---------- --------------- ------------------ ------------- --------------- -------------
Issue of shares 14 124,506 1,934,700 - - - 2,059,206
Issue costs 14 - (3,000) - - - (3,000)
Options Granted 16 - - - 36,723 - 36,723
Warrants Granted 16 - - - 6,596 - 6,596
Total transactions
with owners,
recognised
directly in
equity 124,506 1,931,700 - 43,319 - 2,099,525
-------------------- ---- ---------- --------------- ------------------ ------------- --------------- -------------
Balance as at
30 June 2023 778,635 16,753,221 (4,134,019) 519,045 (11,917,424) 1,999,458
-------------------- ---- ---------- --------------- ------------------ ------------- --------------- -------------
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2023
Share Share Retained
capital premium Other reserves losses Total equity
Note GBP GBP GBP GBP GBP
Balance as at
1 July 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
--------------------------- ------ ---------- ------------ ---------------- -------------- --------------
Balance as at
1 July 2022 654,129 14,821,521 297,397 (6,350,722) 9,422,325
--------------------------- ------ ---------- ------------ ---------------- -------------- --------------
Loss for the year - - - (8,781,189) (8,781,189)
--------------------------- ------ ---------- ------------ ---------------- -------------- --------------
Total comprehensive
income for the
year - - - (8,781,189) (8,781,189)
--------------------------- ------ ---------- ------------ ---------------- -------------- --------------
Issue of shares 14 124,506 1,934,700 - - 2,059,206
Issue Costs 14 - (3,000) - - (3,000)
Options granted 16 - - 36,723 - 36,723
Warrants Granted 16 - - 6,596 - 6,596
Total transactions
with owners, recognised
directly in equity 124,506 1,931,700 43,319 - 2,099,525
--------------------------- ------ ---------- ------------ ---------------- -------------- --------------
Balance as at
30 June 2023 778,635 16,753,221 340,716 (15,131,911) 2,740,661
--------------------------- ------ ---------- ------------ ---------------- -------------- --------------
STATEMENTS OF CASH FLOWS
For the year ended 30 June 2023
Group Company
---------------------------- --------------------------------
Year ended Year ended Year ended Year ended
30 June 30 June 30 June 30 June
2023 2022 2023 2022
Note GBP GBP GBP GBP
-------------------------------------- ------ ------------- ------------- --------------- ---------------
Cash flows from operating
activities
Loss before income tax (3,997,899) (5,557,029) (8,781,189) (2,523,981)
Adjustments for:
Exploration and evaluation - -
asset sales (559,523) -
Provision for bad debt 287,052 - 140,000 -
Other income - (11,233) - -
Other gains - (8,332) - -
Realised loss on investments 866,421 - - -
Change in fair value of investments (309,896) 2,837,437 14,961 39,623
Change in fair value of convertible
debentures 91,106 - 91,106 -
Impairment of loans 128,607 184,365 52,444 123,486
Impairment of property 12,636 - - -
Impairment of intercompany
investments - - 6,056,544
Interest income (369,587) (154,518) (309,274) (101,367)
Intercompany sales - - (155,129) (406,186)
Unrealised foreign exchange/(loss) (100,977) 44,615 30,448 (73,125)
Share option expenses 24 43,306 41,325 43,306 41,325
Stock based compensation - 1,770,000 - 1,770,000
Decrease/(Increase) in trade
and other receivables 10 773,143 (776,342) 1,614,494 (766,999)
Increase/(Decrease) in trade
and other payables 13 282,930 491,807 108,424 907,376
Net cash used in operating
activities (2,293,158) (1,697,428) (1,093,865) (989,848)
-------------------------------------- ------ ------------- ------------- --------------- ---------------
Cash flows from investing
activities
Funds received on sale of
investment 6 677,400 210,178 - -
Funds spent on investment 6 (58,649) (181,937) (58,007) -
Funds spent on leased assets (29,810) - - -
Funds received on sale of
exploration assets 5 47,206 97,508 - -
Loans to subsidiaries 6 - - (732,651) (762,391)
Interest received 226,382 - 226,382 -
Exploration and evaluation
expenses (222,667) (41,786) - -
Convertible debenture receivable 8 (503,499) (1,595,635) (503,499) (1,595,635)
Net cash generated from
(used in) investing activities 136,363 (1,511,672) (1,067,775) (2,358,026)
-------------------------------------- ------ ------------- ------------- --------------- ---------------
Cash flows from financing
activities
Proceeds from issue of share
capital 14 2,059,206 2,318,120 2,059,206 2,318,120
Shares cancelled - - - -
Cost of shares issued 1 4 (3,000) (78,513) (3,000) (78,513)
Repayment of leasing liabilities 34,085 -
and borrowings - -
Net cash generated from
financing activities 2,090,291 2,239,607 2,056,206 2,239,607
-------------------------------------- ------ ------------- ------------- --------------- ---------------
Net decrease/(increase)
in cash and cash equivalents (66,504) (969,493) (105,434) (1,108,267)
Cash and cash equivalents
at beginning of year 11 310,578 1,277,617 124,118 1,232,385
Exchange gain on cash and - -
cash equivalents 2,454 -
Cash and cash equivalents
at end of year 244,074 310,578 18,684 124,118
-------------------------------------- ------ ------------- ------------- --------------- ---------------
Major Non-Cash Transactions
During the year ended 30 June 2023, GBP177,549 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 2023
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 6 Heddon Street, London, W1B 4BT.
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 2022
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 2023 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
-------------------------------------- ----------------
IAS 1 (Amendments) Classification of liabilities 1 January 2024
as current or non-current
-------------------------------------- ----------------
IAS 16 (Amendments) Lease Liability in a Sale and 1 January 2024
Leaseback
-------------------------------------- ----------------
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. 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.
As at 30 June 2023, the Group had cash and cash equivalents of
GBP244,074. The Directors have prepared cash flow forecasts to 31
December 2024, which take into account the cost and operational
structure of the Group and Parent Company, property option income,
debenture interest and any existing licence and working capital
requirements. These forecasts indicate that the Group and Parent
Company's cash resources are not sufficient to cover the projected
expenditure for a period of 12 months from the date of approval of
these financial statements. These forecasts indicate that the Group
and Parent Company, in order to meet their operational objectives,
and meets their expected liabilities as they fall due, will be
required to raise additional funds within the next 12 months.
In common with many entities in the resource sector, the Company
will need to raise further funds within the next 12 months in order
to meet its expected liabilities as they fall due. Whilst the
Directors are confident that they will be secure the necessary
funding, the current conditions do indicate the existence of a
material uncertainty Which may cast significant doubt about the
ability of the Group and parent company to continue as a going
concern. The auditors have made reference to this material
uncertainty in their independent auditor's report.
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 UK subsidiaries which are Imperial
Minerals (UK) Limited and Kudu Resources Limited. The functional
currency of the Canadian subsidiary, Cloudbreak Exploration Inc. is
Canadian Dollars . The functional currency of the US subsidiaries,
Cloudbreak Discovery (US) Ltd. and Cloudbreak Energy (US) Ltd. is
US Dollars. The functional currency of the Guinea subsidiary, Kudu
Resources Guinea is the Guinean Franc. The Financial Information in
The Group's overseas subsidiaries are 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, as is the functional currency of the UK
subsidiaries which are Imperial Minerals (UK) Limited and Kudu
Resources Limited.
2.6. Fair value measurement
IFRS 13 establishes a single source of guidance for all fair
value measurements. IFRS 13 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 of impairment using 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.
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.
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.
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.
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 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
2023. Unlisted investments that are not publicly traded and whose
fair value cannot be measured reliably, are measured at cost loss
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.
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 for
all entities in the Group apart from Cloudbreak Exploration Inc.,
who had a tax payable amount of $19,641 CAD (GBP12,178) for the
year.
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 will be recognised for taxable
temporary differences arising on investments in subsidiaries 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, should remain impaired in the current year or be reversed.
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. During the year ended 30 June 2023, GBP35k was
received, with a total of GBP61k being 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.
Texas Legacy Exploration LLC ("Texas Legacy")
The Group assessed whether the Texas Legacy convertible
debenture receivable should be impaired and based on the programme
at the Butte Strawn Energy Project, they have determined it should
not be impaired as Texas Legacy have the funds required to
undertake the exploration activity and proceed with their projects.
During the year, after review from the Group, it was agreed that
the principal value of the debenture should be reduced from
$1,500,000 USD to $600,000 USD with no further obligations for the
Group. As part of the revised debenture agreement, the Group have
the option to receive a 2% overriding royalty in lieu of cash of
all the outstanding principal amount of the debenture.
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 fair value
movement 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 value. This valuation method was considered
the most appropriate by management due to the limited information
available related to the unlisted investments as at 30 June 2023.
Management have assessed whether any fair value movement on the
unlisted investments is required at 30 June 2023 and have
determined that none is required.
Recovery of other receivables
Includ ed in other receivables is an amount of GBP140,000 as at
30 June 2023 in respect of unpaid ordinary share capital issued on
3 June 2021. The Directors plan to take action to recover the
amount owed and believe that the amount will be recovered in full
in due time, but because this outcome is not certain and the
balance has been owed for an extended period of time, a provision
for bad debt for the full amount has been implemented.
Valuation of exploration and evaluation assets
Exploration and evaluation costs have a carrying value of 30
June 2023 of GBP236,518 (2022: GBP78,694). 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 or the title
will expire in the near future and is not expected to be
renewed.
-- 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 an
impairment charge of GBP12,636 (2022: Nil) was necessary. This
impairment arose as a result of the termination of the Stateline
property option agreement by Volt lithium.
5. Intangible assets
As at June 30, 2023, the Group's exploration and evaluation
assets are as follows:
Group
------------------------------
30 June 2023 30 June 2022
Exploration & Evaluation Assets GBP GBP
------------------------------------------ -------------- --------------
South Timmins, British Columbia 1 1
Klondike Property - 1
Atlin West Property 1 1
Yak Property 1 1
Stateline Property - 13,013
Rizz Property 1 6,053
Icefall Property 1 9,018
Northern Treasure Property 111,023 34,638
Silver Vista Property, British Columbia - 1
Silver Switchback Property, British
Columbia - 1
Rupert Property, British Columbia 1 15,966
Apple Bay Property, British Columbia 1 -
Foggy Mountain, British Columbia 43,220 -
Bobcat Property, Idaho 48,183 -
Elk Creek, Pennsylvania 34,085 -
As at June 30 236,518 78,694
------------------------------------------ -------------- --------------
As at June 30, 2023, the Group's reconciliation of exploration
and evaluation assets are as follows:
Group
------------------------------
30 June 2023 30 June 2022
Exploration & Evaluation Assets GBP GBP
---------------------------------- -------------- --------------
Cost
As at 1 July 78,694 30,679
Additions 222,667 139,294
Disposals (47,206) (97,508)
Impairments (12,636) -
Net proceeds from sale - 1
Forex movement (5,001) 6,228
As at June 30 236,518 78,694
---------------------------------- -------------- --------------
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.
To date, the Group has received cash payments of $270,000
(GBP157,579) and 500,000 shares in relation to the option payments
due under the agreement.
No payments due during the 2023 FY.
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 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. The Group has received cash
payments of $30,000 CAD and 750,000 Norseman shares in relation to
the option payments due under the agreement.
During the year ended 30 June 2023 , the option was cancelled,
and the property was terminated.
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.
During the year ended 30 June 2023 , the option was cancelled,
and the property was terminated.
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 (still owing
at 30 June 2023), $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 (received and valued at $125,000 CAD -
GBP74,653), 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.
During the 2023FY, $50,000 CAD (GBP29,862) was due as a cash
payment and is still owed to the Group in relation to the option
payments due under the agreement.
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. The Group has previously received cash
payments of $100,000 CAD and 3,000,000 shares in relation to the
option payments due under the agreement.
No payments due during the 2023 FY.
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 $700,000 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. T he Group has previously received cash payments of
$35,000 CAD (GBP20,903) and 700,000 shares in relation to the
option payments due under the agreement.
No payments due during the 2023 FY.
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 Volt Lithium Corp. (formerly known as
Allied Copper Corp.) for the advancement of the Klondike project.
Volt Lithium will issue Cloudbreak and Alianza 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 Volt
Lithium. Volt Lithium will also issue 3,000,000 warrants
exercisable for a 36-month term. To date, the Group has received
cash payments of $200,000 CAD and 2,000,000 shares in relation to
the option payments due under the agreement.
On 2 February 2023, the option agreement was terminated by Volt
Lithium so no further payments will be received.
Stateline, United States
On February 9 2022, Cloudbreak and Alianza Minerals entered into
an option agreement with Volt Lithium Corp (formerly known as
Allied Copper Corp) in respect of the Stateline Project in
Colorado, United States. Volt Lithium 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, Volt Lithium 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.
On August 9 2022, Cloudbreak and Alianza Minerals agreed to
amend the terms of the Stateline option agreement with Volt Lithium
entered into on 9 February 2022. Under the modified terms, Volt
Lithium will be able to delay the issuance of shares and warrants
whilst keeping the agreement in good standing. Outstanding Volt
Lithium shares will become payable to Alianza and Cloudbreak as
either party reduces its equity holding through sale or other type
of divesture, or if additional shares are issued in Volt Lithium
which would dilute either party's holdings. Up to 30 June 2022, t
he Group has received cash payments of $65,000 CAD and 250,000
shares in relation to the option payments due under the
agreement.
To date, the Group has received cash payments of $25,000 CAD
(GBP14,931) and 250,000 shares in relation to the option payments
due under the agreement.
No payments due during the 2023 FY.
On 11 August 2023, the option agreement was terminated by Volt
Lithium so no further payments will be received.
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 Exploration Inc. 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. Up to 30 June
2022, the Group has received cash payments of $25,000 CAD and
2,000,000 shares in relation to the option payments due under the
agreement.
During the 2023FY, $25,000 CAD (GBP14,931) was due as a cash
payment and is still owed to the Group of 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 BC Ltd 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. Up to 30 June 2022, the Group received
cash payments of $25,000 CAD and 3,000,000 shares in relation to
the option payments due under the agreement.
During the 2023FY, $25,000 CAD (GBP14,931) was due as a cash
payment and is still owed to the Group of 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.
On 28 October 2022, Cloudbreak announced that Precision
GeoSurveys has completed a high-resolution helicopter-borne
magnetic survey over the Northern Treasure Project in British
Columbia.
Foggy Mountain, Canada
In April 2022, the Group staked the Foggy Mountain property
which is located in Central British Columbia.
On 19 October 2022, Cloudbreak announced that that it has
completed a reconnaissance surface programme at the property. The
Company continues to actively explore this property and look for a
partner to develop the property further.
Bobcat, United States
On 6 December 2022, the Group entered a holding and cost share
agreement with Longford Capital Corp pertaining to the holding,
exploration, operations and development of the Bob Cat property in
Idaho. The Group acquired 50% interest in the property for $60,000
USD (GBP47,517).
Elk Creek, United States
On 21 November 2022, the Group acquired an oil and gas lease for
$43,157 USD (GBP34,178), for a property based in Pennsylvania, USA.
The lease gives the Group full permission to conduct any and all
due diligence on the leased premises, which includes inspections,
tests, environmental assessments, soil studies, surveys and
more.
6. Investments in subsidiary undertakings
Company
---------------------------
30 June
30 June 2023 2022
GBP GBP
------------------------------- -------------- -----------
Shares in Group Undertakings
At beginning of period 7,252,886 6,485,487
Additions - 5,008
Shares transferred to CEI (5,000) -
Impairments (6,056,544) -
At end of period 1,191,342 6,490,495
Loans to group undertakings 805,706 762,391
------------------------------- -------------- -----------
Total 1,997,048 7,252,886
------------------------------- -------------- -----------
Following the Directors intangible asset impairment assessment
using the discounted cash flow model, the Directors concluded that
the impairment of the investment in and the loan receivable from
Cloudbreak Exploration Inc with a carrying value of GBP7,922,540 be
impaired to GBP1,865,996. The full amount of the impairment has
been allocated to the investment in subsidiary. The need for the
impairment was a result of a reduction in exploration assets and
investments since the original valuation in June 2021.
Investments held by Company
Company
--------------------------
30 June
30 June 2023 2022
GBP GBP
----------------------------- -------------- ----------
At beginning of the period 68,056 107,679
Shares transferred to CEI (68,056) -
G2 Energy Corp 58,007 -
Fair value movement (14,961) (39,623)
Total 43,046 68,056
----------------------------- -------------- ----------
Subsidiaries
Details of the subsidiary undertakings at 30 June 2023 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
Gracechurch
Imperial Minerals Street, London, United
(UK) Limited EC3V 0HR Kingdom 100% 100% Dormant
-------------------- -------------------- -------------------- -------------- -------------- --------------------
Suite 520/999
Cloudbreak West Hastings A mineral
Exploration Street, Vancouver property
Inc. 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
-------------------- -------------------- -------------------- -------------- -------------- --------------------
1209 Orange
Street,
Wilmington, New
Cloudbreak Energy Castle, Delaware, Oil and Gas
(US) Ltd. 19801 USA 100% 100% acquisitions
-------------------- -------------------- -------------------- -------------- -------------- --------------------
Coleah Domino,
1(st) Floor,
Office
B, BF 4370, Mineral
Kudu Resources Commune exploration
Guinea De Matam, Conakry Guinea 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 2022 1,900,685 - 168,617 2,069,302
------------------------------- ----------- --------- ----------- -----------
Additions 236,198 - - 236,198
Disposals (677,311) - (89) (677,400)
Fair value changes 309,896 - - 309,896
Realised loss on investments (866,421) - - (866,421)
Foreign exchange (131,322) - (48,998) (180,320)
------------------------------- ----------- --------- ----------- -----------
30 June 2023 771,725 - 119,530 891,255
------------------------------- ----------- --------- ----------- -----------
As at June 30, 2023, 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 due to the limited
amount of information available related to the fair value of the
investments.
Calidus Resources Corp. and Canary Biofuels Inc. are Level 3
investments, all other investments listed below are Level 1.
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.
During the year ended 30 June 2023, the Group sold their shares
in Royal Helium Corp (formerly known as Imperial Helium Corp) for a
total of $150,503 CAD (GBP89,884).
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).
During the year ended 30 June 2023 the Group sold 457,000 of
their shares in Temas Resources for a total of $28,474 CAD
(GBP17,006) and had a share consolidation with a ratio of 9:1. At
30 June 2023, the fair value of the Temas Resources shares was
$147,996 CAD (GBP88,230).
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).
During the year ended 30 June 2023, the Group received 1,200,000
warrants and sold their shares in Norseman for a total of $528,200
CAD (GBP315,455).
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)
During the year ended 30 June 2023, the Group purchased 10,000
shares for a total of $1,080 CAD (GBP645) and received 1,250,000
shares for $0.10 CAD each from the Rupert Property option
agreement.
At 30 June 2023, fair value of the Buscando shares is $246,000
CAD (GBP146,657).
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).
During the year ended 30 June 2023, the Group sold their shares
in Moonbound Mining for a total of $75,843 CAD (GBP45,295).
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.
During the year ended 30 June 2023, the Group received
10,350,000 shares in Power Group Projects from a share transfer
from Mary Yelich related to shares that were owed to the Group, and
a share conversion from 1311516 BC Ltd.
At 30 June 2023, fair value of the Power Group Projects shares
is $153,500 CAD (GBP91,512).
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).
This is a level 3 investment, with no public information
available so management have kept the value at cost.
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 30 June 2022 and confirmed there is no
further changes to the fair value of the Prosper Africa Resources
shares.
During the year ended 30 June 2023, this investment was written
off by the Group.
Volt Lithium Corp (formerly known as Allied Copper Corp.)
On 3 February 2022, the Group received 1,000,000 shares from
Volt Lithium Corp. from the option agreement for the Klondike
project for $225,000 (GBP130,661).
During the year ended 30 June 2023, the Group sold 959,500
shares in Volt Lithium Corp. for a total of $249,082 CAD
(GBP148,758).
At 30 June 2023, fair value of the Volt Lithium Corp. shares is
$75,530 CAD (GBP45,029).
Canary Biofuels Inc.
On 28 June 2022, the Group purchased 59,700 shares from Canary
Biofuels Inc. for $200,095 (GBP127,753). This is a level 3
investment, with no public information available so management have
kept the value at cost..
At 30 June 2023, the cost of the Canary Biofuels Inc. shares is
$200,095 CAD (GBP119,230).
Alchemist Mining Inc.
On 14 January 2022, the Group purchased 1,250,000 shares from
Alchemist Mining Inc. for $93,750 (GBP54,184).
During the year ended 30 June 2023, the Group sold 305,000
shares in Alchemist mining for a total of $106,022 (GBP63,319). At
30 June 2023, fair value of the Alchemist Mining shares is $614,250
(GBP366,194).
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.
G2 Energy Corp.
During the year ended 30 June 2023, the Group received 6,017,000
shares from G2 Energy Corp. 5,110,000 of these shares were received
in place of the quarterly interest that was due to be paid to the
Group as part of the debenture agreement entered on 31 May 2022,
and 907,000 of the shares were received for legal fees covered by
the Group, for G2.
At 30 June 2023, fair value of the G2 Energy Corp. shares is
$72,204 CAD (GBP43,046).
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, 2023, included in
Royalty Assets is GBP1 (June 30, 2022 - GBP1) attributed to the
Apple Bay property.
8. Debentures Receivable
Group
---------------------------
30 June
30 June 2023 2022
GBP GBP
-------------------------------------------- -------------- -----------
Opening 1,657,900 -
Additions 503,499 1,595,635
Royalties to be received - 11,233
Royalty payments related to previous year (11,233) -
Fair Value Movement (91,106) 51,032
-------------------------------------------- -------------- -----------
At end of period 2,059,060 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.
Butte Strawn, United States
On 16 August 2022, the Company entered into an agreement with
Iron Forge Holdings (III) Ltd (IF3). Whereby the company will
provide IF3 with a $1,500,000 USD debenture for the Butte Strawn
Energy Project located in Irion County, Texas. $500,000 USD was
paid on signing. IF3 will pay 12.5% per annum interest to the
Company, calculated and paid quarterly in cash or shares at the
discretion of the Company. The Company received 6,000,000 warrants
with a strike price of $0.35 CAD with a three-year term from
financial close. On 16 June 2023, it was agreed that the principal
value of the debenture be reduced from $1,500,000 USD to $600,000
USD with no further obligations for the Group. All accrued interest
not paid as of the date of the agreement has been forgiven and both
parties agreed to cancelling the warrants. The overriding royalty
was reduced from 6% to 2%.
9. Convertible loans
Group
----------------------
30 June 30 June
2023 2022
GBP GBP
----------------------- ---------------------------- ------------- -----------
Convertible loan
note $500,000 USD (GBP395,975) 76,163 60,878
Convertible loan
note $420,000 USD (GBP332,668) 28,157 75,720
Convertible loan
note $49,790 USD (GBP39,437) 6,573 11,763
Convertible loan
note $250,000 USD (GBP6,573) 17,714 36,004
Impairment provision (128,607) (184,365)
- -
---------------------------------------------------- ------------- -----------
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, 2023, Management have accrued interest amounting
GBP76,163 (2022 - GBP60,878) on the convertible loan and this same
value has been impaired during the year.
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 former 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, 2023, Management have accrued interest amounting
GBP28,157 (2022 - GBP75,720) on the convertible loan and this same
value has been impaired during the year. The overall decrease is
from foreign exchange movement on interest and principal.
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 former 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, 2023, Management have accrued interest
amounting GBP6,573 (2022 - GBP11,763) on the convertible loan and
this same value has been impaired during the year.
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, 2023, Management
have accrued interest amounting GBP17,714 (2022 - GBP36,004) on the
convertible loan and this same value has been impaired during the
year.
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
2023 2022 2023 2022
GBP GBP GBP GBP
---------------------------- ----------- ----------- ----------- -----------
Other Receivables 69,879 16,427 47,523 16,428
Inter-company Receivables - - - 406,186
Tax Receivables 18,372 15,627 - -
Sundry Receivables 142,475 204,574 142,475 190,000
Trade Receivables 272,247 - - -
Prepayments 27,256 1,064,005 27,256 1,064,005
Provision for bad debt (287,052) - (140,000) -
---------------------------- ----------- ----------- ----------- -----------
243,177 1,300,634 77,254 1,676,619
---------------------------- ----------- ----------- ----------- -----------
The fair value of all current receivables is as stated
above.
Included in sundry receivables is an amount of GBP140,000 (2022:
GBP190,000) as at 30 June 2023 in respect of unpaid ordinary share
capital issued on 3 June 2021. A provision of GBP140,000 has been
included for this after review from management.
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.
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
2023 2022 2023 2022
GBP GBP GBP GBP
------------------- --------- ----------- --------- -----------
UK Pounds 83,604 1,130,433 77,254 1,676,619
Canadian Dollars 146,250 30,201 - -
US Dollars 8 - - -
Guinea Franc 13,315 - - -
243,177 1,160,634 77,254 1,676,619
------------------- --------- ----------- --------- -----------
11. Cash and cash equivalents
Group Company
-------------------- --------------------
30 June 30 June 30 June 30 June
2023 2022 2023 2022
GBP GBP GBP GBP
--------------------------- --------- --------- --------- ---------
Cash at bank and in hand 244,074 310,578 18,684 124,118
--------------------------- --------- --------- --------- ---------
The 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
2023 2022 2023 2022
GBP GBP GBP GBP
------------------- --------- --------- --------- ---------
UK Pounds 6,523 107,707 1,593 107,707
US Dollars 17,091 16,411 17,091 16,411
Canadian Dollars 220,460 186,460 - -
244,074 310,578 18,684 124,118
------------------- --------- --------- --------- ---------
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.
Whilst the Group's payables exceeds the cash at bank, the
Directors are confident they can raise the funds required to meet
its obligations.
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 GBP244,074 and the financial forecasts indicated that
the Group is expected to raise funds 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 GBP891,255 (2022:
GBP2,069,302).
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 2023.
2023 2022
------------------------------------------- --------------------- ---------------------
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 (1,069,506) (2,367,554)
Decrease in other comprehensive earnings
and net asset value per Ordinary share
(in pence) (1.23) (0.0049)p
Increase if overall share price rises
by 20%, with all other variables held
constant 1,069,506 2,367,554
Increase in other comprehensive earnings
and net asset value per Ordinary share
(in pence) 1.23 0.0049p
------------------------------------------- --------------------- ---------------------
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:
2023 2022
GBP GBP
----------------------------------- ----------- -----------
Cash at bank 244,074 310,578
Other receivables 243,177 1,160,633
Convertible debenture receivable 2,059,060 1,657,900
2,546,311 3,129,111
----------------------------------- ----------- -----------
The Group's cash balances are held in accounts with HSBC,
BLK.FX, Bank of Montreal and with its Investment Broker
accounts.
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.
2023 2022
Financial assets GBP GBP
----------------------------------------------------- --------- -----------
Trade and other receivables - Non interest earning 243,177 1,160,633
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.
2023 2022
Financial liabilities GBP GBP
-------------------------------------------------- ----------- -----------
Trade and other payables - Non interest earning 1,704,437 1,395,910
-------------------------------------------------- ----------- -----------
13. Trade and other payables
The following table sets out the fair values of financial assets
within Trade and other payables.
Group Company
------------------------ ------------------------
30 June 30 June 30 June 30 June
2023 2022 2023 2022
GBP GBP GBP GBP
----------- ----------- ----------- -----------
Trade payables 1,493,943 1,217,736 1,303,186 1,194,500
Accruals 151,396 157,353 139,687 142,084
Other Creditors 59,098 20,821 11,558 20,670
--------------------------- ----------- ----------- ----------- -----------
Trade and other payables 1,704,437 1,395,910 1,454,431 1,357,254
--------------------------- ----------- ----------- ----------- -----------
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
2023 2022 2023 2022
GBP GBP GBP GBP
------------------- ----------- ----------- ----------- -----------
UK Pounds 1,497,746 1,357,254 1,454,431 1,357,254
Canadian Dollars 172,606 38,656 - -
US Dollars 34,085 - - -
1,704,437 1,395,910 1,454,431 1,357,254
------------------- ----------- ----------- ----------- -----------
14. Share capital and premium
Number of Share capital Share premium Total
shares GBP GBP GBP
---------------------------------------- ------------- --------------- --------------- ------------
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
---------------------------------------- ------------- --------------- --------------- --------------
Issue of new shares - 5 July
2022 16,800,000 16,800 361,200 378,000
Issue of new shares - 19 July
2022 26,027,776 26,028 556,597 582,625
Issue of new shares - 5 August
2022 10,000,000 10,000 169,000 179,000
Issue of new shares - 1 September
2022 12,000,000 12,000 168,000 180,000
Issue of new shares - 28 September
2022 14,000,000 14,000 166,180 180,180
Issue of new shares - 25 October
2022 18,500,000 18,500 185,000 203,500
Issue of new shares - 2 December
2022 15,000,000 15,000 161,850 176,850
Issue of new shares - 27 January
2023 4,300,000 4,300 42,570 46,870
Issue of new shares - 18 April
2023 7,876,829 7,878 121,303 129,181
---------------------------------------- ------------- --------------- --------------- --------------
As at 30 June 2023 607,678,805 778,635 16,753,221 17,531,856
---------------------------------------- ------------- --------------- --------------- --------------
(1) Includes issue costs of GBP3,000
On 5 July 2022, the Group issued and allotted 16,800,000 new
ordinary shares at a price of 2.25 pence per share as part of a
drawdown on the Crescita Capital LLC facility.
On 19 July 2022, the Group issued and allotted 26,027,776 new
ordinary shares at a price of 2.25 pence per share as part of a
fundraise in which Shard Capital acted as the Group's sole
broker.
On 5 August 2022, the Group issued and allotted 10,000,000 new
ordinary shares at a price of 1.79 pence per share as part of a
drawdown on the Crescita Capital LLC facility.
On 1 September 2022, the Group issued and allotted 12,000,000
new ordinary shares at a price of 1.50 pence per share as part of a
drawdown on the Crescita Capital LLC facility.
On 28 September 2022, the Group issued and allotted 14,000,000
new ordinary shares at a price of 1.30 pence per share as part of a
drawdown on the Crescita Capital LLC facility.
On 25 October 2022, the Group issued and allotted 18,500,000 new
ordinary shares at a price of 1.10 pence per share as part of a
drawdown on the Crescita Capital LLC facility.
On 2 December 2022, the Group issued and allotted 15,000,000 new
ordinary shares at a price of 1.179 pence per share as part of a
drawdown on the Crescita Capital LLC facility.
On 27 January 2023, the Group issued and allotted 4,300,000 new
ordinary shares at a price of 1.09 pence per share as part of a
drawdown on the Crescita Capital LLC facility.
On 18 April 2023, the Group issued and allotted 7,876,829 new
ordinary shares at a price of 1.64 pence per share as part of a
drawdown on the Crescita Capital LLC facility.
15. Share based payments
The outstanding share options and warrants as at 30 June 2023
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
-------------------------------- ------------- --------------- -----------------
Options - Cancelled (150,000) - 0.03
Options - Exercised - - -
Options - Issued 7,250,000 - 0.02
Warrants - Exercised - - -
Warrants - Issued - 2,950,000 0.02
Warrants - Expired - (7,926,968) 0.05
-------------------------------- ------------- --------------- -----------------
As at 30 June 2023 21,750,000 18,244,724 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 2023 Warrants
--------------- --------------- --------------- --------------- ---------------
Granted on: 2/06/2021 2/06/2021 13/8/2021 1/3/2022 9/8/2022
Number of
warrants 4,530,497 8,714,227 2,750,002 400,000 2,950,000
Life (years) 2.71 years 4 years 2 years 2 years 1 year
Share price
(pence per
share) 0.10p 0.05p 0.025p 0.10p 0.025p
Risk free
rate 0.55% 0.81% 0.58% 0.80% 2.07%
Expected
volatility 100% 100% 20.28% 140.94% 51.43%
Expected - - - - -
dividend
yield
Total fair
value GBP46,092 GBP157,695 GBP2,750 GBP27,314 6,596
2021 Options 2022 Options 2023 Options
-------------- -------------- ----------------
Granted on: 2/06/2020 25/8/2021 9/8/2022
Number of options 5,050,000 11,250,000 7,250,000
Life (years) 3.08 years 4 years 3 years
Share price (pence
per share) 0.025p 0.03p 0.025p
Risk free rate 0.64% 0.62% 1.78%
Expected volatility 100% 20.55% 51.43%
Expected dividend - - -
yield
Total fair value GBP99,572 GBP11,238 GBP36,723
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 2023 is shown below:
2023 2022
------------------------------------------------------- ------------------------------------------------
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 - 0.029 0.02 14,750,000 3.047 3.047 0.0286 16,300,000 4.282 4.282
0.03 -
0.049 0.03 11,600,000 1.431 1.431 0.0500 16,641,195 1.740 1.740
0.05 -
0.099 0.05 8,714,227 1.971 1.971 0.1000 4,530,497 1.630 1.630
0.10 -
0.15 0.10 4,930,497 0.650 0.650 0.1125 400,000 1.670 1.670
16. Other reserves
Group
-------------- ----------------- -----------------------------
Foreign
currency
Share option Warrant translation
reserve option reserve reserve Total
GBP GBP GBP GBP
----------------------- -------------- ----------------- -------------- -------------
At 30 June 2022 84,667 212,717 301,709 599,093
-------------------------------- -------------- ----------------- -------------- -------------
Currency translation
differences - - (123,367) (123,367)
Issued Options 36,723 - - 36,723
Issued Warrants - 6,596 - 6,596
At 31 June 2023 121,390 219,313 178,342 519,045
-------------------------------- -------------- ----------------- -------------- -------------
17. Employee benefit expense
The total number of Directors who served in the year was 4
(2022: 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 2023 30 June 2022
Staff costs GBP GBP
------------------------------------- --------------- ---------------
Directors Fees and Consulting Fees 315,000 79,976
Employee salaries and Tax 33,515 -
348,515 79,976
------------------------------------- --------------- ---------------
Amounts included in Directors fees and salaries include
GBP315,000 (2022: GBP79,976) 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 2023
Short-term Post-employment Share
benefits benefits based payments Total
GBP GBP GBP GBP
---------------------------- ------------ ----------------- ----------------- -----------------
Directors
Kyler Hardy (1) 120,000 - 6,329 126,329
Paul Gurney 30,000 - 3,798 33,798
Emma Priestly 45,000 - 3,798 48,798
Andrew Male 120,000 - 3,798 123,798
315,000 - 17,723 332,723
------------ ----------------- ----------------- -----------------
(1) Kyler Hardy resigned on 19 June 2023.
Remuneration hasn't been paid in full to all directors, the
amounts referenced above have either been accrued or partially
paid. Refer to note 26 for amounts still owning to the
Directors.
Emma Priestley's Director fees related to the previous financial
year were invoiced and accounted for in the current financial
year.
3,500,000 options were issued to directors on 9 August 2022 for
their services. The options have an exercise price of GBP0.0225 and
expire on 9 August 2025. Details of the Share Option charges can be
found in Note 15
Year ended 30 June 2022
Short-term Post-employment Share based
benefits benefits 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
------------ ----------------- ------------- --------
19. Finance income
Group
-----------------------------
Year ended
30 June Year ended
2023 30 June 2022
GBP GBP
------------------------------------------------ ------------ -----------------
Interest income on convertible loan 143,224 138,107
G2 Technology - debenture interest 197,061 16,411
Texas Legacy Exploration - debenture interest 29,302 -
------------------------------------------------ ------------ -----------------
Finance Income 369,587 154,518
------------------------------------------------ ------------ -----------------
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 gains
Group
-----------------------------
Year ended
30 June Year ended
2023 30 June 2022
GBP GBP
-------------- ------------ ---------------
Other gains 17,913 8,332
Other gains 17,913 8,332
-------------- ------------ ---------------
21. Loss on disposal of investments
Group
-----------------------------
Year ended
30 June Year ended
2023 30 June 2022
GBP GBP
------------------------------------------ ------------ ---------------
Realised loss on disposal of investments (866,421) -
Loss on disposal of investments (866,421) -
------------------------------------------ ------------ ---------------
22. 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
2023 2022
GBP GBP
---------------------------------------------- ------------- ---------------
Loss before tax (3,997,899) (5,557,029)
---------------------------------------------- ------------- ---------------
Tax at the applicable rate of 18.00% (2022:
17%) (719,622) (944,695)
Effects of:
Expenditure not deductible for tax purposes 8,179 8,181
Net tax effect of losses carried forward 723,621 936,514
---------------------------------------------- ------------- ---------------
Tax (charge)/refund (12,178) -
---------------------------------------------- ------------- ---------------
The weighted average applicable tax rate of 18% (2022: 17 %)
used is a combination of the 19% standard rate of corporation tax
in the UK, 15% Canadian corporation tax and 21% US corporation
tax.
The Company has tax losses of approximately GBP2,853,785 (2022:
GBP2,130,164) 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.
23. Earnings per share
Group
The calculation of the basic loss per share of GBP0.01 (2022:
GBP0.01) is based on the loss the loss attributable to equity
owners of the group of GBP3,997,899 (2022: loss of GBP5,697,030),
and on the weighted average number of ordinary shares of
578,496,992 (2022: 428,042,226) 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
15.
24. Expenses by nature
Group
--------------------------
Year ended Year ended
30 June 30 June
2023 2022
GBP GBP
-------------------------------------------------- ------------ ------------
Professional fees 1,123,570 1,564,654
Consulting fees 1,581,215 1,184,930
Employees and Contractors 228,515 -
Transfer agent and filing fees - 110,965
Travel 94,302 86,597
Insurance 37,312 30,929
IT & Software services 13,938 2,608
Public Relations 150,119 188,160
Premises and Office costs 10,447 18,040
Property costs/exploration costs 425,643 -
Share option expense 43,306 41,325
Other expenses 298,151 80,006
------------ ------------
Total administrative expenses 4,006,518 3,308,214
------------ ------------
25. 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 2023 these are as follows:
Group
---------------
Minimum spend
requirement
GBP
--------------------------------------------------- ---------------
Not later than one year 674,709
Later than one year and no later than five years 99,589
--------------------------------------------------- ---------------
Total 774,298
--------------------------------------------------- ---------------
26. Related party transactions
Details of the Directors' remuneration can be found in Note 18.
Key Management Personnel are considered to be the Directors.
At June 30, 2023, the Group held investments of GBP280,214 in
Temas Resources, Volt Lithium (previously Allied Copper Corp),
Calidus Resources and Buscando Resources where Kyler Hardy is also
a Director (2022: GBP1,589,124). 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 6.
During the year, the Group paid Cronin Services GBP759,073 for
the provision of consulting and management services during the year
(2022; GBP1,234,952) a company controlled by the previous CEO,
Kyler Hardy. These were in relation to consultancy fees under a
management service agreement dated 1 February 2020 and 1 June 2021.
In November, there was an updated contract agreed between the Group
and Cronin Services related the consultancy services provided. This
agreement involved Cronin services providing monthly CFO,
technical, marketing and office services for the Group, for a
monthly fee of $27,500 USD and annual director fees for Kyler of
GBP120,000. Throughout the year, Cronin Capital and Cronin Services
invoiced the Group GBP829,322. The Group paid amounts totalling nil
(2022: GBP5,034) to Cronin Capital Corp. The amount outstanding
owing to Cronin Capital and Cronin Services at the year-end was
GBP996,515 (2022: GBP965,340).
During the year, the Group paid amounts totalling GBP59,000
(2022: 72,476) 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
GBP65,000 (2022: GBP14,000). Andrew was also issued 750,000 options
with an exercise price of GBP0.0225 during the year.
During the year, the Group made no payments (2022: nil) to Windy
Apple Ventures Ltd. A company controlled by Paul Gurney, a Director
of the group. The amount accrued and outstanding owing to Windy
Apple Ventures Ltd. at the year-end was GBP22,500 (2022: GBPnil).
Paul was also issued 750,000 options with an exercise price of
GBP0.0225 during the year.
During the year, the Group made no payments (2022: nil) to Emma
Priestley. The amount accrued and outstanding owing to Emma at the
year-end was GBP30,000 (2022: GBPnil). Emma was also issued 750,000
options with an exercise price of GBP0.0225 during the year.
27. Ultimate controlling party
The Directors believe there is no ultimate controlling
party.
28. Events after the reporting date
On 11 July 2023, the Company issued convertible loan notes
(CLN). The gross proceeds totalled GBP340,000 and the CLN's have a
maturity date set at 31 January 2024, with an annual interest rate
of 12%. Paul Gurney, Non-Executive Director of the Company
participated in the CLN.
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END
FR USUWROAURUAA
(END) Dow Jones Newswires
October 25, 2023 02:00 ET (06:00 GMT)
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