TIDMEEE
RNS Number : 0455Q
Empire Metals Limited
24 June 2022
Empire Metals Limited / AIM: EEE / Sector: Natural Resources
24 June 2022
Empire Metals Limited ('Empire' or the 'Company')
Final Results
Empire Metals Limited, the AIM-quoted exploration and resource
development company, announces its final results for the year ended
31 December 2021.
The annual report and accounts for the year ended 31 December
2021 will be posted to shareholders today and will be available for
download on the Company's website, www.empiremetals.co.uk , later
today.
Highlights:
-- Significant expansion of the Company's exploration footprint
across highly prospective areas of its target jurisdiction,
Australia
-- Appointment of highly experienced Managing Director, Mr.
Shaun Bunn, in June 2021 to advance rapid expansion strategy in
Australia
-- Bolstered core technical team through the appointment of two
highly regarded exploration professionals: Mr. Ed Baltis, as
Exploration Consultant, and Ms. Louisa Stokes as Exploration
Geologist
-- Comprehensive drilling and exploration programme conducted at
Empire's proven discovery, the Eclipse Gold Project ('Eclipse' or
the 'Project'):
o Completion of a 4,589m reverse circulation ('RC') drilling
programme over 44 holes in February 2021, including an intercept of
24m @ 1.44 g/t gold ('Au') near Jack's Dream old workings
o Other significant intercepts include:
-- 8m @ 2.83 g/t Au from 118m downhole
-- 3m @ 2.61 g/t Au from 134m downhole
-- 8m @ 2.32 g/t Au from 70m downhole
-- 6m @ 5.52 g/t Au from 33m downhole
-- 5m @ 4.77 g/t Au from 49m downhole
o Completion of a fully funded 1,893m RC drill programme over 19
holes and 3 PQ core diameter drill holes drilled for 201m in July
2021, which identified a new mineralised lode, the Twin Shafts
o Strategic technical review completed in December 2021
highlighted potential for significant additional mineralisation
discovery within the licence area
o Follow-up large scale exploration programme now underway
-- Post period end, the acquisition of the Gindalbie Gold
Project ("Gindalbie"), located adjacent to Eclipse, resulted in a
200% expansion of this high-grade gold exploration camp, followed
by the expansion of the overall Australian exploration footprint
from 9.5km(2) to 1,728km(2) through the strategic acquisition of
three highly prospective copper-gold projects
-- Successful conclusion of the Definitive and Binding Sale and
Purchase Agreement over the Bolnisi Project in Georgia for a total
cash consideration of US$3.3million in June 2021
-- Oversubscribed placing raised GBP1.7 million post period end
resulting in a cash at bank of GBP2.7 million at the date of
signing to support exploration programmes throughout 2022 and
2023
Shaun Bunn, CEO, commented: "This has been a pivotal year for
Empire and it has been an incredibly exciting time to be part of
the team. I had the pleasure of joining Empire at the key turning
point in its strategy as it intensified its exploration focus on
Australia, an area which I know well and has, quite rightly, been
continuously hailed as the world's leading mining jurisdiction.
With Eclipse forming the initial stepping stone to establishing an
Australian exploration portfolio of quality and scale, we have seen
some very encouraging results from drilling and technical work
undertaken in 2021, further increasing our confidence that our
focus within Australia is well placed. This has been clearly put
into action with the decision to bolster our position at Eclipse
post period end, through the Tribute Agreement in respect to the
neighbouring Gindalbie Project, and thus forming the now renamed
Eclipse-Gindalbie Project to create real scale in the region.
"This process gained momentum in April this year when we
acquired three copper-gold projects, Pitfield, Walton and Stavely,
located in highly prospective locations across Australia which
combined, cover an area larger than Greater London. This was a real
coup for Empire and one which sets us apart as an exploration
company with potential access to multiple high value discoveries in
sought-after and valued commodities, within a safe and supportive
jurisdiction. It is with this in mind that I look forward to the
remaining months of 2022 with huge optimism and excitement as we
begin to demonstrate the value of these assets through targeted
exploration."
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014, as incorporated into UK law by the
European Union (Withdrawal) Act 2018, until the release of this
announcement.
For further information please visit www.empiremetals.co.uk or contact:
Empire Metals Ltd Tel: 020 7907 9327
Shaun Bunn / Greg Kuenzel
S. P. Angel Corporate Finance Tel: 020 3470 0470
LLP (Nomad & Broker)
Ewan Leggat / Adam Cowl
--------------------
Tel: 020 7186 9950
Shard Capital Partners LLP
(Joint Broker)
Damon Heath
--------------------
St Brides Partners Ltd (Financial Tel: 020 7236 1177
PR)
Susie Geliher / Ana Ribeiro
/ Selina Lovell
--------------------
Chairman's Statement
2021 marked a significant year for Empire with an expansion of
its footprint in Western Australia, a process which has accelerated
post period end. I am delighted to see the progress and
advancements we have made throughout the year as we advance our
strategy to deliver high impact exploration results across an
exciting portfolio of high value projects in proven mining
districts of Australia.
The year under review began on a positive note having received
the approval at the end of 2020 to proceed with the acquisition of
Eclipse Exploration Pty Ltd, which holds the Eclipse license
("Eclipse"). This was completed in February 2021 and set in motion
the strategic decisions that followed throughout 2021. Since then,
encouraging results from our field work have indicated that Eclipse
is part of a significant gold system that requires further
exploration to reveal its resource potential.
Our activity at Eclipse during the period started promptly with
a second phase drilling programme in January 2021. At this point,
drilling was concentrated on the Eclipse vein and testing the known
mineralised structures parallel to it as it historically yielded
attractive intersections. The RC drilling programme was completed
in February 2021 at 4,589m of RC drilling over 44 drillholes. The
results confirmed the Company's belief that there are multiple
parallel veins in addition to the main Eclipse vein, as well as a
different stockwork style of near surface mineralisation near
Jack's Dream old workings which included an intercept of 24m @ 1.44
g/t gold, and a number of wide quartz veins beyond and below the
old workings were intercepted. In conjunction with the programme,
Empire's acquisition of the 75% interest in the project was
completed.
These encouraging results prompted the advancement of the next
drilling phase at Eclipse in March 2021. This third phase drilling
programme was completed for a total of 1,893m over 19 holes and 3
PQ core diameter drill holes drilled for 201.1m in July 2021. The
diamond drilling ('DD') replicated the intercepts from previous RC
drilling, and a different stockwork style of near surface
mineralisation near Jack's Dream old workings was identified which
indicated complexity and an increased duration of the gold system.
Most significantly, the targeted RC drilling identified a newly
discovered mineralised lode running sub-parallel to the main
Eclipse vein, referred to as the Twin Shafts. The results confirmed
the presence of additional mineralised zones and the existence of
several parallel veins in addition to the main Eclipse vein, as we
previously believed there to be, and extended the scale of
Eclipse's mineralised footprint.
In September 2021, the Company received a technical review of
the geology of Eclipse which marked a significant turning point in
our understanding and confidence in the project: from the review,
it was evident that the mineralised system is much larger than we
originally anticipated. It indicated that the Eclipse Shaft may
connect to the Jack's Dream area, which would mean a total known
strike length of 500m and proves multiple parallel mineralised
structures. Paired with our drilling results to date, it implied
that gold mineralisation likely continues at greater depths than
previously thought. With this information, it was clear that
Eclipse merited further drilling to test the strike and depth
extensions of the multiple gold structures.
By the end of the year, we undertook a strategic technical
review of Eclipse and revisited all data collected to develop a
more advanced understanding of the known mineralisation. The
database highlighted the potential for significant additional
mineralisation discovery within the licence area as only 20% of the
RC holes drilled to date penetrated below the gold depleted
regolith zone - meaning that we have only scratched the surface of
Eclipse's potential. The design of a larger scale exploration
programme was soon underway, and a new series of drilling
programmes was scheduled for Q1 2022. It also became obvious that
additional ground was needed to be acquired to cover what was
clearly emerging as a much larger gold system.
Post-period end, Empire increased its mineralised footprint in
the Eclipse area by +200% by entering into a Tribute Agreement
giving Empire the rights to explore, develop and mine the Gindalbie
Gold Project ('Gindalbie'). By consolidating Eclipse and Gindalbie
into the Eclipse-Gindalbie Project Area ('Eclipse-Gindalbie'),
Empire successfully furthered its hold in Western Australia with a
highly prospective and significant area to explore. I am confident
that Eclipse-Gindalbie will continue to reveal its resource
potential as we advance our exploration and development strategy
here.
Aside from the developments with Eclipse, the Company was
involved in continued discussions with other parties to evaluate
potential additional acquisitions. In May 2021, Empire entered into
an Option Agreement (the 'Agreement') to acquire a 75% interest in
the Central Menzies Gold Project ('Central Menzies'), which
consisted of four highly prospective early-stage exploration
licences in Western Australia. Empire began exploration activities
in June 2021 and undertook an RC drilling campaign for over 2,100m
throughout August and September 2021, following the identification
of two mineralised corridors known as the Teglio and Nugget Patch
prospects. After receiving results in November 2021 that confirmed
the prospectivity of Central Menzies, a follow up second phase
drilling programme begun in December 2021. The results were
received in January 2022 and were generally inconclusive, which
prompted the board to finalise their plans to terminate the Option
over Central Menzies in order to focus fully on what has now become
Eclipse-Gindalbie, which presented a more promising opportunity.
Similarly, in February 2021, Empire decided to not extend the
agreement to acquire the Munni Munni Palladium Project in Western
Australia for the same reason.
As shareholders will be aware, Empire agreed to sell its 50%
interest in JSC Georgian Copper and Gold in June 2021 for a total
cash consideration of US$3.3 million. This sale allowed a
transition in strategy to focus on actively exploring new assets in
Australia, a top exploration and mining jurisdiction, together with
an injection of capital to execute our exploration plans.
Financial Results
As an exploration and development group which has no revenue we
are reporting a loss for the twelve months ended 31 December 2021
of GBP589,254 (31 December 2020: loss of GBP572,989).
The Group's cash position at the date of signing this report is
GBP2,700,000.
Corporate
In line with Empire's shift in focus to Australia, Mike
Struthers, who held the position of CEO at the Company since
January 2018, stepped down in February 2021. Mike remained a key
member of the team during this handover period to Shaun Bunn, who
joined as Managing Director in June 2021, and Mike continued as a
Non-Executive Director of the Company until June 2022. I am
extremely grateful to Mike for his time with us, and his dedication
to advancing Empire's portfolio, and I know he will continue to
support our developments as a valued shareholder of the
Company.
We were delighted to report in May 2021, that Shaun Bunn would
be joining the Board as Managing Director effective from 1 June
2021. His impressive 35 years' experience in exploration, mining,
processing and project development, including 25 years' experience
in the gold mining sector, has proved to be invaluable to Empire
over the past year. Furthermore, his origins and networks in the
Western Australian mining sector further complements Empire's
strategy to find and develop new opportunities, and as we develop
Eclipse-Gindalbie and extend our portfolio to new areas and
commodities.
In addition, we appointed Ed Baltis as Exploration Consultant
and Louisa Stokes as Exploration Geologist in September 2021. The
appointment of two highly regarded and experienced professionals
represented a significant milestone for Empire as the core
exploration team continues to grow in order to support the
advancement of its portfolio of assets.
Outlook
Australia, and Western Australia in particular, has cemented its
status as a leading mining jurisdiction over recent years. Having
witnessed first-hand the increase in mining activity surrounding
our projects, gold exploration and mining has particularly seen a
boom. This, alongside the strong gold and copper price performance
in recent years, places us in a strong position. With this in mind,
Empire has made significant strides in increasing its exploration
footprint across the country and has, post period end, expanded its
commodity focus to include three copper-gold projects as well.
These projects, the Pitfield Copper-Gold Project, the Walton
Copper-Gold Project and the Stavely Copper-Gold Project, are
located in mining regions of Western Australia, and in the Stavely
Arc region of Victoria in the case of Stavely, all known for world
class and significant copper and/or gold discoveries. Along with
these assets, which has provided Empire with an exploration
landholding of the highest calibre, we also grew the technical and
exploration capabilities of our team with the inclusion of the
geologists who first identified these prospects.
This is a careful evolution of our strategy whereby Empire now
has a significant landholding, across various prospective
mineralised terranes, encompassing several commodities in demand
and with distinct geological signatures. With the application of
comprehensive, yet low cost, exploration programmes across this
portfolio, I believe Empire is in an exceptionally strong position
to make significant new discoveries and develop valuable future
resources.
I would like to extend my sincere thanks to our shareholders for
their patience and resolve, my colleagues on the board and in our
operational teams for their continued guidance and expertise, and
on behalf of the whole Empire team, I look forward to providing our
shareholders with further regular updates over the coming
months.
Neil O'Brien
Non-Executive Chairman
23 June 2022
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2021
Group
------------------------------
Registered number: 1570939 Note 2021 2020
GBP GBP
----------------------------------------- ------ -------------- --------------
Non-Current Assets
Property, plant and equipment 9 - 1,423
Intangible assets 10 1,952,419 31,673
Total Non-current assets 1,952,419 33,096
----------------------------------------- ------ -------------- --------------
Current Assets
Trade and other receivables 11 87,198 294,366
Financial assets at fair value through
profit or loss 12 - 427,314
Cash and cash equivalents 13 2,210,371 2,289,638
Assets classified as held for sale 23 - 425,562
----------------------------------------- ------ -------------- --------------
Total current assets 2,297,569 3,436,880
----------------------------------------- ------ -------------- --------------
Total Assets 4,249,988 3,469,976
----------------------------------------- ------ -------------- --------------
Current Liabilities
Trade and other payables 14 124,543 82,340
----------------------------------------- ------ -------------- --------------
Total Current Liabilities 124,543 82,340
----------------------------------------- ------ -------------- --------------
Total Liabilities 124,543 82,340
----------------------------------------- ------ -------------- --------------
Net Assets 4,125,445 3,387,636
----------------------------------------- ------ -------------- --------------
Equity attributable to owners of
the Parent
Share capital 15 - -
Share premium 15 43,836,855 43,065,981
Reverse acquisition reserve (18,845,147) (18,845,147)
Other reserves 16 520,293 152,793
Accumulated losses (21,386,556) (20,985,991)
----------------------------------------- ------ -------------- --------------
Total equity attributable to owners
of the Parent 4,125,445 3,387,636
----------------------------------------- ------ -------------- --------------
Total Equity 4,125,445 3,387,636
----------------------------------------- ------ -------------- --------------
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended 31 December 2021
Group
------------------------------
Note Year ended Year ended
31 December 31 December
2021 2020
Continuing Operations GBP GBP
------------------------------------------------------------------- ------ -------------- --------------
Revenue 6 - 1,204
Cost of sales - -
------------------------------------------------------------------- ------ -------------- --------------
Gross profit - 1,204
------------------------------------------------------------------- ------ -------------- --------------
Administration expenses 7 (1,912,498) (958,694)
Other losses 18 (417,138) 3,721
Operating loss before taxation (2,329,636) (953,769)
------------------------------------------------------------------- ------ -------------- --------------
Income tax 8 (11,154) (1,555)
------------------------------------------------------------------- ------ -------------- --------------
Loss for the year from continuing
operations (2,340,790) (955,324)
------------------------------------------------------------------- ------ -------------- --------------
(Loss)/profit from discontinued operations
(attributable to equity holders of
the Company) 23 1,751,536 382,335
------------------------------------------------------------------- ------ -------------- --------------
Loss for the year (589,254) (572,989)
------------------------------------------------------------------- ------ -------------- --------------
Loss attributable to:
* owners of the Parent (589,254) (572,989)
(589,254) (572,989)
------------------------------------------------------------------- ------ -------------- --------------
Other Comprehensive Income:
Items that may be subsequently reclassified
to profit or loss
Exchange differences on translating
foreign operations (8,056) 661
Total Comprehensive Income (597,310) (572,328)
------------------------------------------------------------------- ------ -------------- --------------
Attributable to:
* owners of the Parent (597,310) (572,328)
Total Comprehensive Income (597,310) (572,328)
------------------------------------------------------------------- ------ -------------- --------------
* Total comprehensive income attributable to
discontinued operations
1,751,536 382,335
* Total comprehensive income attributable to continuing
operations (2,349,326) (954,663)
------------------------------------------------------------------- ------ -------------- --------------
Earnings per share (pence) from continuing
operations attributable to owners of
the Parent - Basic & Diluted 21 (0.706) (0.456)
------------------------------------------------------------------- ------ -------------- --------------
Earnings per share (pence) from discontinued
operations attributable to owners of
the Parent - Basic & Diluted 21 0.528 0.183
------------------------------------------------------------------- ------ -------------- --------------
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
For the year ended 31 December 2021
Reverse
Share acquisition Other Retained Total
premium reserve reserves losses equity
GBP GBP GBP GBP GBP
---------------------------------- ------------ -------------- ----------- -------------- -----------
As at 1 January 2020 39,265,637 (18,845,147) 138,014 (20,413,002) 145,502
---------------------------------- ------------ -------------- ----------- -------------- -----------
Loss for the year - - - (572,989) (572,989)
---------------------------------- ------------ -------------- ----------- -------------- -----------
Other comprehensive income
Exchange differences on
translating foreign operations - - 661 - 661
---------------------------------- ------------ -------------- ----------- -------------- -----------
Total comprehensive income
for the year - - 661 (572,990) (572,328)
---------------------------------- ------------ -------------- ----------- -------------- -----------
Transactions with owners
Issue of ordinary shares 4,014,288 - - - 4,014,288
Share issue charge (213,944) - - - (213,944)
Share option charge - - 14,118 - 14,118
---------------------------------- ------------ -------------- ----------- -------------- -----------
Total transactions with
owners 3,800,344 - 14,118 - 3,814,462
As at 31 December 2020 43,065,981 (18,845,147) 152,793 (20,985,991) 3,387,636
---------------------------------- ------------ -------------- ----------- -------------- -----------
As at 1 January 2021 43,065,981 (18,845,147) 152,793 (20,985,991) 3,387,636
---------------------------------- ------------ -------------- ----------- -------------- -----------
Loss for the year - - - (589,254) (589,254)
Other comprehensive income
Exchange differences on
translating foreign operations - - (8,056) - (8,056)
Total comprehensive income
for the year - - (8,056) (589,254) (597,310)
---------------------------------- ------------ -------------- ----------- -------------- -----------
Transactions with owners
Issue of ordinary shares 770,874 - - - 770,874
Share option charge - - 564,245 - 564,245
Expiry of Share Options - - (188,689) 188,689 -
Total transactions with
owners 770,874 - 375,556 188,689 1,335,119
---------------------------------- ------------ -------------- ----------- -------------- -----------
As at 31 December 2021 43,836,855 (18,845,147) 520,293 (21,386,556) 4,125,445
---------------------------------- ------------ -------------- ----------- -------------- -----------
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31 December 2021
Group
--------------------------
Note 2021 2020
GBP GBP
--------------------------------------------- ------ ------------- -----------
Cash flows from operating activities
Loss after taxation including discontinued
operations (589,254) (572,989)
Adjustments for:
Services satisfied by issue of
shares 438,059 82,144
Services satisfied by issue of
warrants - 14,118
Share based payment 473,336 -
Share of loss/ (profit) on joint
venture - discontinued operations 23,593 (382,335)
Net finance income (71) -
Impairment of investments in joint 417,138 -
venture
Loss/(gain) on sale of property,
plant and equipment - (12,724)
Gain on sale of investment - discontinued
operations (1,775,129)
Tax expense 11,154 1,555
Depreciation and amortisation 1,423 9,183
Decrease in trade and other receivables (22,071) (7,158)
Increase/(Decrease) in trade and
other payables 31,281 (8,595)
Net cash used in operating activities (990,541) (876,801)
--------------------------------------------- ------ ------------- -----------
Cash flows from investing activities
Loans granted to subsidiaries and
joint venture partners - discontinued
operations (22,240) (44,164)
Purchase of financial asset - (345,170)
Additions to exploration and evaluation
intangible asset (1,512,430) (31,673)
Sale of property, plant and equipment - 20,000
Sale of investment in joint venture 2,327,944 -
- discontinued operations
Net cash used in investing activities 793,274 (401,007)
--------------------------------------------- ------ ------------- -----------
Cash flows from financing activities
Proceeds from issue of shares 118,000 3,730,550
Cost of share issue - (213,944)
Net cash generated from financing
activities 118,000 3,516,606
--------------------------------------------- ------ ------------- -----------
Net Increase/decrease in cash
and cash equivalents (79,267) 2,238,798
Cash and cash equivalents at beginning
of year 2,289,638 50,840
--------------------------------------------- ------ ------------- -----------
Cash and cash equivalents at end
of year 13 2,210,371 2,289,638
--------------------------------------------- ------ ------------- -----------
Non-cash investing and financing
activities
Purchase of financial asset - share
based payment(1) - 164,288
Acquisition of exploration license 332,185 -
- share based payment(2)
Advisory fees settled in shares(3) 438,059 -
Share options and warrants issued
in respect of services 17 473,336 -
Acquisition of exploration license
- issue of warrants 17 90,909 -
--------------------------------------------- ------ ------------- -----------
(1) Comprised of 4,693,954 shares at 1.75p in respect of
consideration payable and 4,693,954 shares at 1.75p in respect of
finders' fees related to the Eclipse Option.
(2) Comprised of 7,095,512 shares at 3.91p in respect of
consideration payable to acquire the remaining 75% of the Eclipse
Option and 1,921,068 shares at 2.85p in respect of consideration
payable to acquire the remaining 75% of the Central Menzies
license.
(3) Comprised of 3,995,238 shares at 2.65p to settle invoices
for advisory services, 7,095,512 shares at 3.91p in respect of
finders' fees related to the Eclipse Option and 1,921,068 shares at
2.85p in respect of finders' fees related to the Central Menzies
Option.
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2021
ACCOUNTING POLICIES
1. General Information
The principal activity of Empire Metals Limited ("the Company")
and its subsidiaries (together "the Group") is to implement its
mineral exploration strategy to advance projects towards defining a
sufficient in-situ mineral resource to support a detailed
feasibility study towards mine development and production.
The Company's shares are traded on AIM, a market operated by the
London Stock Exchange. The Company is incorporated in the British
Virgin Islands and domiciled in the United Kingdom. The Company
changed its name to Empire Metals Limited on 10 February 2020.
The address of its registered office is Craigmuir Chambers, PO
Box 71, Road Town, Tortola, BVI.
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 Group Financial Statements have been prepared in accordance
with International Financial Reporting Standards (IFRS) and IFRS
Interpretations Committee (IFRS IC) interpretations as adopted by
the European Union. The Group Financial Statements have been
prepared under the historical cost convention, unless stated
otherwise.
The Financial Statements are presented in UK Pounds Sterling
rounded to the nearest pound.
The preparation of Financial Statements in conformity with IFRSs
requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of
applying the Group's Accounting Policies. The areas involving a
higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the Financial
Statements, are disclosed in Note 4 .
2.2 Changes in accounting policy and disclosures
(a) New and amended standards mandatory for the first time for
the financial periods beginning on or after 1 January 2021
The International Accounting Standards Board (IASB) issued
various amendments and revisions to International Financial
Reporting Standards and IFRIC interpretations. The amendments and
revisions were applicable for the period ended 31 December 2021 but
did not result in any material changes to the Financial Statements
of the Group.
b) 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
---------------------- ------------------------------------ -----------------
IFRS 16 (Amendments) Property, plant, and equipment *1 January 2022
------------------------------------ -----------------
IAS 1 (Amendments) Classification of Liabilities 1 January 2022
as Current or Non-Current.
------------------------------------ -----------------
Annual improvements 2018-2020 Cycle 1 January 2022
------------------------------------ -----------------
IAS 37 (Amendments) Provisions, contingent liabilities *1 January 2022
and contingent assets
------------------------------------ -----------------
IAS 8 (Amendments) Accounting estimates 1 January 2023
------------------------------------ -----------------
(*) Subject to endorsement
The Group is evaluating the impact of the new and amended
standards above which are not expected to have a material impact on
future Group Financial Statements .
Basis of Consolidation
The Group Financial Statements consolidate the Financial
Statements of Empire Metals Limited and the Financial Statements of
all of its subsidiary undertakings made up to 31 December 2021.
Subsidiaries are entities over which the Group has control. The
Group controls an entity when the Group is exposed to, or has
rights to, variable returns from its involvement with the entity
and has the ability to affect those returns through its power over
the entity. Where an entity does not have returns, the Group's
power over the investee is assessed as to whether control is held.
Subsidiaries are fully consolidated from the date on which control
is transferred to the Group. They are deconsolidated from the date
that control ceases.
Below is a summary of subsidiaries of the Group:
Parent company Share
Place of Registered capital Principal
Name of subsidiary business capital held activities
--------------------- ----------------- ------------------ ------------------- ---------- -----------------
Kibe Investments British Empire Metals Ordinary 100% Dormant
No.2 Limited Virgin Islands Ltd shares US$12
--------------------- ----------------- ------------------ ------------------- ---------- -----------------
Noricum Gold Austria Kibe Investments Ordinary 100% Exploration
AT GmbH No.2 Limited shares EUR35,000
--------------------- ----------------- ------------------ ------------------- ---------- -----------------
GMC Investments British Empire Metals Ordinary 100% Dormant
Limited Virgin Islands Ltd shares US$1
--------------------- ----------------- ------------------ ------------------- ---------- -----------------
European Mining United Kingdom Empire Metals Ordinary 100% Mining Services
Services Limited Ltd shares
GBP1
--------------------- ----------------- ------------------ ------------------- ---------- -----------------
Eclipse Exploration Australia Empire Metals Ordinary 100% Exploration
Pty Ltd Ltd Shares
AUD$1
--------------------- ----------------- ------------------ ------------------- ---------- -----------------
Inter-company transactions, balances, income and expenses on
transactions between group companies are eliminated. Profits and
losses resulting from intercompany transactions that are recognised
in assets are also eliminated. Accounting
policies of subsidiaries have been changed where necessary to
ensure consistency with the policies adopted by the Group.
2.3 Going Concern
The Group's business activities, together with the factors
likely to affect its future development, performance and position,
are set out in the Chairman's Report from page 3. In addition, Note
3 to the Financial Statements includes the Group's objectives,
policies and processes for managing its capital; its financial risk
management objectives; and details of its exposure to credit and
liquidity risk.
The Financial Statements have been prepared on a going concern
basis. Although the Group's assets are not generating steady
revenue streams, an operating loss has been reported and an
operating loss is expected in the 12 months to 31 December 2022,
the Directors believe that the Group will have sufficient funds to
meet its immediate working capital requirements and undertake its
targeted operating activities over the next 12 months from the date
of approval of these Financial Statements. As at the balance sheet
date, the Group has cash and cash equivalents of GBP2,210,372 which
is foreseen to adequately cover forecast working capital
requirements.
Post year end, the Parent Company successfully raised gross
proceeds of GBP1,700,000 via the issue of 85,000,000 new ordinary
shares, providing the Group with additional liquidity.
The Directors have, in the light of all the above circumstances,
a reasonable expectation that the Group has adequate resources to
continue in operational existence for the foreseeable future. Thus,
they continue to adopt the going concern basis of accounting in
preparing the Group Financial Statements.
2.4 Segment Reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker.
The chief operating decision-maker, who is responsible for
allocating resources and assessing performance of the operating
segments, has been identified as the Board of Directors that makes
strategic decisions.
Segment results, include items directly attributable to a
segment as well as those that can be allocated on a reasonable
basis.
2.5 Foreign Currencies
(a) Functional and presentation currency
Items included in the Financial Statements of the Group's
entities are measured using the currency of the primary economic
environment in which the entity operates (the 'functional
currency'). The functional currency of the Company is Sterling, the
functional currency of the BVI subsidiaries is US Dollars, the
functional currency of the Austrian subsidiary is Euros and the
functional currency of the Australian subsidiary is AUD Dollars.
The Financial Statements are presented in Pounds Sterling, rounded
to the nearest pound.
(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.
(c) Group companies
The results and financial position of all the Group's entities
(none of which has the currency of a hyperinflationary economy)
that have a functional currency different from the presentation
currency are translated into the presentation currency as
follows:
-- assets and liabilities for each statement of financial
position presented are translated at the closing rate at the date
of that statement of financial position;
-- income and expenses for each statement of comprehensive
income presented are translated at average exchange rates (unless
this average is not a reasonable approximation of the cumulative
effect of the rates prevailing on the transaction dates, in which
case income and expenses are translated at the dates of the
transactions); and
-- all resulting exchange differences are recognised in other
comprehensive income where material.
On consolidation, exchange differences arising from the
translation of the net investment in foreign entities, and of
monetary items receivable from foreign subsidiaries for which
settlement is neither planned nor likely to occur in the
foreseeable future, are taken to other comprehensive income. When a
foreign operation is sold, such exchange differences are recognised
in the income statement as part of the gain or loss on sale.
2.6 Intangible Assets
Exploration and evaluation assets
The Group recognises expenditure as exploration and evaluation
assets when it determines that those assets will be successful in
finding specific mineral resources. Expenditure included in the
initial measurement of exploration and evaluation assets and which
are classified as intangible 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 mineral resource. Capitalisation of
pre-production expenditure ceases when the mining property is
capable of commercial production.
Exploration and evaluation assets are recorded and held at
cost.
Exploration and evaluation assets are assessed for impairment
annually or when facts and circumstances suggest that the carrying
amount of an asset may exceed its recoverable amount. The
assessment is carried out by allocating exploration and evaluation
assets to cash generating units, which are based on specific
projects or geographical areas. IFRS 6 permits impairments of
exploration and evaluation expenditure to be reversed should the
conditions which led to the impairment improve. The Group
continually monitors the position of the projects capitalised and
impaired.
Whenever the exploration for and evaluation of mineral resources
in cash generating units does not lead to the discovery of
commercially viable quantities of mineral resources and the Group
has decided to discontinue such activities of that unit, the
associated expenditures are written off to the Income
Statement.
2.7 Property, Plant and Equipment
Property, plant and equipment is stated at historical cost less
accumulated depreciation and any accumulated impairment losses.
Depreciation is provided on all property, plant and equipment to
write off the cost less estimated residual value of each asset over
its expected useful economic life on a straight-line basis at the
following annual rates:
Computer equipment - 20 to 50% straight line
Field equipment - 20 to 50% straight line
Vehicles - 20% straight line
All assets are subject to annual impairment reviews. An asset's
carrying amount is written down immediately to its recoverable
amount if the asset's carrying amount is greater than its estimated
recoverable amount.
Subsequent costs are included in the asset's carrying amount or
recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item
will flow to the Group and the cost of the item can be measured
reliably. The carrying amount of the replacement part is
derecognised. All other repairs and maintenance are charged to the
Income Statement during the financial period in which they are
incurred.
The asset's residual value and useful economic lives are
reviewed, and adjusted if appropriate, at the end of each reporting
period.
Gains and losses on disposal are determined by comparing the
proceeds with the carrying amount and are recognised within 'Other
net gains / (losses)' in the income statement.
2.8 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 (except goodwill)
are reviewed for possible reversal of the impairment at each
reporting date.
2.9 Assets classified as held for sale
Assets are classified as held for sale if their carrying amount
will be recovered principally through a sale transaction rather
than through continuing use and a sale is considered highly
probable. They are measured at the lower of their carrying value
and fair value less costs to sell. An impairment loss is recognised
for any subsequent write-down of the asset to fair value less costs
to sell.
2.10 Financial Assets
(a) Classification
The Group classifies its financial assets in the following
categories: at amortised cost including trade receivables and other
financial assets at amortised cost, at fair value through other
comprehensive income and at fair value through profit or loss,
loans and receivables, and available-for-sale. The classification
depends on the purpose for which the financial assets were
acquired. Management determines the classification of its financial
assets at initial recognition.
(b) Recognition and measurement
Amortised cost
Trade and other receivables are recognised initially at the
amount of consideration that is unconditional, unless they contain
significant financing components, in which case they are recognised
at fair value. The group holds the trade and other receivables with
the objective of collecting the contractual cash flows, and so it
measures them subsequently at amortised cost using the effective
interest method.
The group classifies its financial assets as at amortised cost
only if both of the following criteria are met:
-- the asset is held within a business model whose objective is
to collect the contractual cash flows; and
-- the contractual terms give rise to cash flows that are solely
payments of principle and interest.
(c) Impairment of financial assets
The Group recognises an allowance for expected credit losses
(ECLs) for all debt instruments not held at fair value through
profit or loss. ECLs are based on the difference between the
contractual cash flows due in accordance with the contract and all
the cash flows that the Group expects to receive, discounted at an
approximation of the original EIR. The expected cash flows will
include cash flows from the sale of collateral held or other credit
enhancements that are integral to the contractual terms.
ECLs are recognised in two stages. For credit exposures for
which there has not been a significant increase in credit risk
since initial recognition, ECLs are provided for credit losses that
result from default events that are possible within the next
12-months (a 12-month ECL). For those credit exposures for which
there has been a significant increase in credit risk since initial
recognition, a loss allowance is required for credit losses
expected over the remaining life of the exposure, irrespective of
the timing of the default (a lifetime ECL).
For trade receivables (not subject to provisional pricing) and
other receivables due in less than 12 months, the Group applies the
simplified approach in calculating ECLs, as permitted by IFRS 9.
Therefore, the Group does not track changes in credit risk, but
instead, recognises a loss allowance based on the financial asset's
lifetime ECL at each reporting date.
The Group considers a financial asset in default when
contractual payments are 90 days past due. However, in certain
cases, the Group may also consider a financial asset to be in
default when internal or external information indicates that the
Group is unlikely to receive the outstanding contractual amounts in
full before taking into account any credit enhancements held by the
Group. A financial asset is written off when there is no reasonable
expectation of recovering the contractual cash flows and usually
occurs when past due for more than one year and not subject to
enforcement activity.
At each reporting date, the Group assesses whether financial
assets carried at amortised cost are credit impaired. A financial
asset is credit-impaired when one or more events that have a
detrimental impact on the estimated future cash flows of the
financial asset have occurred.
(d) Derecognition
The Group derecognises a financial asset only when the
contractual rights to the cash flows from the asset expire, or when
it transfers the financial asset and substantially all the risks
and rewards of ownership of the asset to another entity.
On derecognition of a financial asset measured at amortised
cost, the difference between the asset's carrying amount and the
sum of the consideration received and receivable is recognised in
profit or loss. This is the same treatment for a financial asset
measured at FVTPL.
2.11 Financial Liabilities
Financial liabilities are classified, at initial recognition, as
financial liabilities at fair value through profit or loss, loans
and borrowings, payables, or as derivatives designated as hedging
instruments in an effective hedge, as appropriate. All financial
liabilities are recognised initially at fair value and, in the case
of loans and borrowings and payables, net of directly attributable
transaction costs. The Group's financial liabilities include trade
and other payables.
Subsequent measurement
The measurement of financial liabilities depends on their
classification, as described below:
Trade and other payables
After initial recognition, trade and other payables are
subsequently measured at amortised cost using the EIR method. Gains
and losses are recognised in the statement of profit or loss and
other comprehensive income when the liabilities are derecognised,
as well as through the EIR amortisation process.
Amortised cost is calculated by considering any discount or
premium on acquisition and fees or costs that are an integral part
of the EIR. The EIR amortisation is included as finance costs in
the statement of profit or loss and other comprehensive income.
Derecognition
A financial liability is derecognised when the associated
obligation is discharged or cancelled or expires.
When an existing financial liability is replaced by another from
the same lender on substantially different terms, or the terms of
an existing liability are substantially modified, such an exchange
or modification is treated as the derecognition of the original
liability and the recognition of a new liability. The difference in
the respective carrying amounts is recognised in profit or loss and
other comprehensive income.
Fair value
All assets and liabilities for which fair value is measured or
disclosed in the consolidated Financial Statements are categorised
within the fair value hierarchy. The fair value hierarchy
prioritises the inputs to valuation techniques used to measure fair
value. The Group uses the following hierarchy for determining and
disclosing the fair value of financial instruments and other assets
and liabilities for which the fair value was used:
- level 1: quoted prices in active markets for identical assets or liabilities;
- level 2: inputs other than quoted prices included in level 1
that are observable for the asset or liability, either directly (as
prices) or indirectly (derived from prices); and
- level 3: inputs for the asset or liability that are not based
on observable market data (unobservable inputs).
2.12 Cash and Cash Equivalents
Cash and cash equivalents comprise cash at bank and in hand.
2.13 Taxation
Tax for the period comprises current and deferred tax. Tax is
recognised in the income statement, except to the extent that it
relates to items recognised directly in equity. In this case the
tax is also recognised directly in other comprehensive income or
directly in equity, respectively.
The current income tax charge is calculated on the basis of the
tax laws enacted or substantively enacted at the end of the
reporting period in the countries where the Company's subsidiaries
and associates operate and generate taxable income. Management
periodically evaluates positions taken in tax returns with respect
to situations in which applicable tax regulation is subject to
interpretation. It establishes provisions where appropriate on the
basis of amounts expected to be paid to the tax authorities.
Deferred income tax is recognised, using the liability method,
on temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts in the consolidated
Financial Statements . However, the 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. Deferred income tax is determined using tax rates
(and laws) that have been enacted, or substantially enacted, by the
end of the reporting period and are expected to apply when the
related deferred income tax asset is realised, or the deferred
income tax liability is settled.
Deferred income tax assets are recognised only to the extent
that it is probable that future taxable profit will be available
against which the temporary differences can be utilised.
Deferred income tax liabilities are provided on taxable
temporary differences arising from investments in subsidiaries,
associates and joint arrangements, except for deferred income tax
liability where the timing of the reversal of the temporary
difference is controlled by the group and it is probable that the
temporary difference will not reverse in the foreseeable future.
Generally the group is unable to control the reversal of the
temporary difference for associates. Only where there is an
agreement in place that gives the group the ability to control the
reversal of the temporary difference not recognised.
Deferred income tax assets are recognised on deductible
temporary differences arising from investments in subsidiaries,
associates and joint arrangements 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 utilised.
Deferred income 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 income tax assets
and liabilities relate to income taxes levied by the same taxation
authority on either the taxable entity or different taxable
entities where there is an intention to settle the balances on a
net basis.
There has been no tax credit or expense for the period relating
to current or deferred tax.
2.14 Share Capital, share premium and other reserves
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares or options are
shown in equity, as a deduction, net of tax, from the proceeds
provided there is sufficient premium available. Should sufficient
premium not be available placing costs are recognised in the Income
Statement.
Other reserves consist of the share option reserve and the
foreign exchange translation reserve. See Note 16 for further
detail.
2.15 Reverse acquisition reserve
The reverse acquisition reserve arose on the acquisition of Kibe
Investments No. 2 Limited in 2010. There has been no movement in
the reserve since that date.
2.16 Share Based Payments
The Group operates a number of equity-settled share-based
schemes, under which the entity receives services from employees or
third-party suppliers as consideration for equity instruments
(shares, options and warrants) of the Group. The Group may also
issue warrants to share subscribers as part of a share placing. The
fair value of the equity-settled share based payments is recognised
as an expense in the income statement or charged to equity
depending on the nature of the service provided or instrument
issued. The total amount to be expensed or charged in the case of
options is determined by reference to the fair value of the options
or warrants granted:
-- including any market performance conditions;
-- excluding the impact of any service and non-market
performance vesting conditions (for example, profitability or sales
growth targets, or remaining an employee of the entity over a
specified time period); and
-- including the impact of any non-vesting conditions (for
example, the requirement for employees to save).
In the case of shares and warrants the amount charged to the
share premium account is determined by reference to the fair value
of the services received if available. If the fair value of the
services received is not determinable the shares are valued by
reference to the market price and the warrants are valued by
reference to the fair value of the warrants granted as described
previously.
Non-market vesting conditions are included in assumptions about
the number of options or warrants 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 another reserve in
equity.
When the warrants or options are exercised, the Company 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 warrants or options are exercised.
2.17 Operating Leases
Leases of assets under which the short-term exemption under IFRS
16 has been taken and which a significant amount of the risks and
benefits of ownership are effectively retained by the lessor are
classified as operating leases. Operating lease payments are
charged to the income statement on a straight-line basis over the
period of the respective leases.
2.18 Revenue Recognition
Revenue is recognised in respect of amounts recharged to project
strategic partners in accordance with their contractual terms.
Revenue is also generated from management and consulting services
to third parties.
The Group derives revenue from the transfer of services overtime
and at a point in time in the service lines detailed below.
Revenues from external customers come from consulting services.
The Group provides management services to subsidiary
undertakings and joint venture entities for a fixed monthly fee.
Revenue from providing services is recognised in the accounting
period in which the services are rendered. Efforts to satisfy the
performance obligation are expended evenly throughout the
performance period and so the performance obligation is considered
to be satisfied evenly over time.
2.19 Finance Income
Finance income consists of bank interest on cash and cash
equivalents which is recognised using the effective interest rate
method.
2.20 Discontinued Operations
A discontinued operation is a component of the Group's business,
the operations and cash flows of which can be clearly distinguished
from the rest of the Group and which:
-- represents a separate major line of business or geographic
area of operations;
-- is part of a single co-ordinated plan to dispose of a
separate major line of business or geographic area of operations;
or
-- is a subsidiary acquired exclusively with a view to resale.
Classification as a discontinued operation occurs at the earlier of
disposal or when the operation meets the criteria to be classified
as held-for-sale.
When an operation is classified as a discontinued operation, the
comparative statement of profit or loss and OCI is represented as
if the operation had been discontinued from the start of the
comparative year.
3. Financial Risk Management
3.1 Financial Risk Factors
The Group's activities expose it to a variety of financial risks
being market risk (including, interest rate risk, currency risk and
price 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.
Market Risk
(a) Foreign currency risks
The Group operates internationally and is exposed to foreign
exchange risk arising from various currency exposures, primarily
with respect to the USD and Euros against the UK pound. Foreign
exchange risk arises from future commercial transactions,
recognised assets and liabilities and net investments in foreign
operations. The Group negotiates all material contracts for
activities in relation to its subsidiary in USD and Euros. The
Directors will continue to assess the effect of movements in
exchange rates on the Group's financial operations and initiate
suitable risk management measures where necessary.
(b) Price risk
The Group is not exposed to commodity price risk as a result of
its operations, which are still in the exploration phase. Other
than insignificant consulting revenue, the only revenue relates to
revenue charged to the joint venture JSC Georgian Copper &
Gold. The Directors will revisit the appropriateness of this policy
should the Group's operations change in size or nature.
The Group has no exposure to equity securities price risk, as it
has no listed equity investments.
(c) Interest rate risk
As the Group has no borrowings, it is not exposed to interest
rate risk on financial liabilities. The Group's interest rate risk
arises from its cash held on short-term deposit, which is not
significant.
Credit Risk
Credit risk arises from cash and cash equivalents as well as
outstanding receivables. Management does not expect any losses from
non-performance of these receivables.
The amount of exposure to any individual counter party is
subject to a limit, which is assessed by the Board. No credit
limits were exceeded during the reporting period, and management
does not expect any losses from non-performance by these
counterparties.
The Group considers the credit ratings of banks in which it
holds funds in order to reduce exposure to credit risk.
Liquidity Risk
In keeping with similar sized mineral exploration groups, the
Group's continued future operations depend on the ability to raise
sufficient working capital through the issue of equity share
capital. The Directors are confident that adequate funding will be
forthcoming with which to finance operations. Controls over
expenditure are carefully managed. In April 2022, the Company
raised net proceeds of GBP1.7m. See note 2.4 for further details on
going concern and liquidity.
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 to enable the Group to
continue its exploration and evaluation activities. The Group has
no debt at 31 December 2021 and defines capital based on the total
equity of the Company being GBP4.1m. The Group monitors its level
of cash resources available against future planned exploration and
evaluation activities and may issue new shares in order to raise
further funds from time to time.
4. Critical Accounting Estimates and Judgements
The preparation of the Group Financial Statements 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 Statements and the reported amount of expenses during the
year. Actual results may vary from the estimates used to produce
these Financial Statements.
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:
Fair Value Financial Instruments through Profit and Loss
The fair value of financial instruments that are not traded in
an active market is determined using valuation techniques. The
group uses its judgement to select a variety of methods and make
assumptions that are mainly based on market conditions existing at
the end of each reporting period. The Financial Instrument held at
FVPL was reclassified to intangible assets during the current
period as the conditions to exercise the option were exercised.
Impairment of exploration and evaluation costs
Exploration and evaluation costs have a carrying value at 31
December 2021 of GBP1,952,419 (2020: GBP31,673): refer to Note 10
for more information. The Group has a right to renew exploration
permits and the asset is only depreciated once extraction of the
resource commences. Management tests annually whether exploration
projects have future economic value in accordance with the
accounting policy stated in Note 2.7 . Each exploration project is
subject to an annual review by either a consultant or senior
company geologist to determine if the exploration results returned
during the year warrant further exploration expenditure and have
the potential to result in an economic discovery. This review takes
into consideration the expected costs of extraction, long term
metal prices, anticipated resource volumes and supply and demand
outlook. In the event that a project does not represent an economic
exploration target and results indicate there is no additional
upside, a decision will be made to discontinue exploration.
Towards the end of 2021, management had doubts over the
viability of Central Menzies. These were confirmed shortly after
the year end with the publication of the results of a second phase
of RC drilling which focused on testing the Nugget Patch gold trend
to confirm if there was higher grade mineralisation sitting at
depth below a supergene gold enriched zone and to confirm historic
high grade gold intersections closely associated with the main
workings at Teglio. The results were generally inconclusive, with
no obvious continuity along strike and no significant high-grade
intercepts. In February 2022, the Directors formally announced that
it would not take up the Option over the Central Menzies Gold
Project. As such, management believe there were conditions at the
year end to suggest that Central Menzies exploration asset was
impaired and it was written off in full.
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.
These assumptions have been described in more detail in Note
17.
5. Segmental Information
As at 31 December 2021, the Group operates in three geographical
areas, the UK, Austria and Australia. The Company operates in one
geographical area, the UK. Activities in the UK are mainly
administrative in nature whilst activities in Austria and Australia
relate to exploration and evaluation work. The reports used by the
chief operating decision maker are based on these geographical
segments.
The Group generated no revenue during the year ended 31 December
2021 (2020: GBP1,204).
2021 Australia Austria UK Total
GBP GBP GBP
---------------------------------- ----------- ---------- ------------- -------------
Revenue - - - -
Administrative expenses (493,695) (16,090) (1,402,713) (1,912,498)
Other gains/(losses) (417,138) - - (417,138)
-----------
Operating loss from continued
operations per reportable
segment (910,833) (16,090) (1,402,713) (2,329,636)
----------- ---------- ------------- -------------
Additions to non-current assets 1,915,069 24,675 - 1,939,744
Reportable segment assets 1,959,947 61,506 2,228,535 4,249,988
Reportable segment liabilities 77,538 3,207 43,798 124,543
---------------------------------- ----------- ---------- ------------- -------------
Segment assets and liabilities are allocated based on
geographical location.
2020 Austria UK Total
GBP GBP GBP
------------------------------------- ---------- ----------- -----------
Revenue - 1,204 1,204
Administrative expenses (41,781) (916,913) (958,694)
Other gains/(losses) 164 3,557 3,721
Operating loss from continued
operations per reportable segment (41,617) (912,152) (953,769)
---------- ----------- -----------
Additions to non-current assets 31,673 - 31,673
Reportable segment assets 41,155 3,428,821 3,469,976
Reportable segment liabilities 6,867 75,473 82,340
-------------------------------------- ---------- ----------- -----------
6. Revenue
2021 2020
GBP GBP
----------------------- ------- -------
Operational services - 1,204
- 1,204
------------------------------- -------
Operational services are recharged by European Mining Services
which include salaries, sample preparation and assay costs and
consulting fees. No such recharges were made during the year.
7. Expenses by Nature
2021 2020
GBP GBP
------------------------------------------------- ----------- ---------
Directors' fees (note 20) 233,849 249,824
Employee Expenses 23,522 -
Fees payable to the Company's auditors for
the audit of the Parent Company and group
financial statements 30,955 30,180
Professional, legal and consulting fees 362,808 283,815
Accounting related services 26,471 16,425
Insurance 19,830 23,797
Office and administrative expenses 89,985 39,542
Depreciation 1,423 9,183
Travel and subsistence 19,354 8,156
AIM related costs including investor relations 182,446 154,083
Share option expense 473,336 14,118
Fees paid in shares 438,059 -
Operations related costs - 129,571
Other expenses 10,460 -
------------------------------------------------- ----------- ---------
Total administrative expenses 1,912,498 958,694
------------------------------------------------- ----------- ---------
8. Taxation
The tax on the Group's loss 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
2021 2020
GBP GBP
Loss before tax including discontinued
operations (578,100) (572,989)
----------- -----------
Tax at the weighted average rate of 31.6%
(2020: 19%) (182,743) (108,868)
Expenditure not deductible for tax purposes 111,184 (2,360)
Tax losses utilised (367,903) -
Net tax effect of losses carried forward
on which no deferred tax asset is recognised 450,616 109,673
----------- -----------
Income tax for the year 11,154 1,555
----------- -----------
No charge to taxation arises due to the losses incurred.
The weighted average applicable tax rate of 23.3% (2020: 19.08%)
used is a combination of the 19% standard rate of corporation tax
in the UK, 25% Austrian corporation tax and 26% Australian
corporation tax.
The Group has accumulated tax losses of approximately
GBP6,965,000 (2020: GBP6,547,000 ) available to carry forward
against future taxable profits. A deferred tax asset has not been
recognised because of uncertainty over future taxable profits
against which the losses may be utilised.
9. Property, Plant and Equipment
Field Computer Total
equipment equipment GBP
GBP GBP
----------------------------------- ------------ ------------ --------
Cost
----------------------------------- ------------ ------------ --------
As at 31 December 2020 10,229 25,545 35,774
------------------------------------ ------------ ------------ --------
As at 1 January 2021 10,229 25,545 35,774
Exchange differences - - -
As at 31 December 2021 10,229 25,545 35,774
------------------------------------ ------------ ------------ --------
Depreciation
----------------------------------- ------------ ------------ --------
As at 31 December 2020 9,674 24,677 34,351
------------------------------------ ------------ ------------ --------
Charge for the year 555 868 1,423
------------------------------------ ------------ ------------ --------
As at 31 December 2021 10,229 25,545 35,774
------------------------------------ ------------ ------------ --------
Net book value as at 31 December
2020 555 868 1,423
------------------------------------ ------------ ------------ --------
Net book value as at 31 December - - -
2021
------------------------------------ ------------ ------------ --------
10. Intangible Assets
Exploration & Evaluation Assets at Cost 2021 2020
and Net Book Value GBP GBP
------------------------------------------ ----------- --------
Balance as at 1 January 31,673 -
Additions 1,512,430 31,673
Transfer from financial asset 427,314 -
Foreign exchange differences (18,998) -
As at 31 December 1,952,419 31,673
------------------------------------------ ----------- --------
The brought forward Exploration & Evaluation balance relates
to work performed at the Company's Rotguelden licence area in
Austria. The Austrian licences were renewed in December 2020 for an
additional 5 years.
The additions in the year relate to two drilling program areas;
Eclipse Gold Project and Gindalbie Gold Project.
Eclipse Gold Project
In 2020 the Group acquired an option to purchase 75% of the
Eclipse Gold license. The option was exercised in February 2021 for
a consideration of AUD$1,000,000 (approximately GBP550,000) in cash
and AUD$500,000 (GBP277,750) settled via the issue of 7,095,510 new
ordinary shares of no-par value at a price of 3.91p .
The Group has completed four exploratory drilling programmes at
Eclipse - 118 RC drill holes for a total of 10,081 metres and nine
diamond drill holes for a total of 1,200 metres. Drilling has
confirmed the presence of parallel veins to the Eclipse lode at
Twin Shaft and also proven wide strike extensions at Jack's Dream.
Further drilling is planned to commence in June 2022 following
successful structural mapping along the Eclipse shear.
In accordance with IFRS 6, the Directors undertook an assessment
of the following areas and circumstances which could indicate the
existence of impairment:
-- The Group's right to explore in an area has expired or will
expire in the near future without renewal.
-- No further exploration or evaluation is planned or budgeted for.
-- A decision has been taken by the Board to discontinue
exploration and evaluation in an area due to the absence of a
commercial level of reserves.
-- Sufficient data exists to indicate that the book value may
not be fully recovered from future development and production.
The Directors do not consider the assets to be impaired.
11. Trade and Other Receivables
2021 2020
GBP GBP
-------------------- -------- ---------
Trade receivables 2,862 108,284
VAT receivable 59,523 34,519
Prepayments 11,481 16,762
Other receivables 13,332 134,801
-------------------- -------- ---------
87,198 294,366
-------------------- -------- ---------
Trade and other receivables are all due within one year. The
fair value of all receivables is the same as their carrying values
stated above. These assets, excluding prepayments, are the only
form of financial asset within the Group, together with cash and
cash equivalents.
The carrying amounts of the Group's trade and other receivables
are denominated in the following currencies:
2021 2020
GBP GBP
-------------------------------------------- ----------- -------------
UK Pounds 67,049 290,103
Euros 304 4,263
Australian Dollars 19,845 -
87,198 294,366
-------------------------------------------- ----------- -------------
The maximum exposure to credit risk at the reporting date is the
carrying value of each class of receivable mentioned above. The
Group does not hold any collateral as security. All trade and other
receivables are considered fully recoverable and performing.
12. Financial Assets At Fair Value Through Profit or Loss
2021 2020
GBP GBP
-------------------------------------------- ----------- ---------
Balance as at 1 January 427,314 -
Additions 417,138 427,314
Impairment (417,138) -
Transferred to Exploration and Evaluation (427,314) -
assets
As at 31 December - 427,314
-------------------------------------------- ----------- ---------
On 12 August 2020, the Company entered into an Option Agreement
to acquire a 75% interest in the Eclipse Gold Project. The Company
paid AUD$100,000 (GBP55,000) in cash and AUD$150,000 (GBP82,144)
settled via the issue of 4,693,954 new ordinary shares of no-par
value at a price of 1.75p and the issue of 4,693,954 warrants
exercisable at 3p for two years. As part of the terms of the
arrangement, the Company agreed to spend AUD$300,000 on exploration
at Eclipse within the 6 month option period. Approximately
AUD$615,000 was spent in the period including the cost of the
Option.
During December 2020, the Company signed an agreement to
exercise the option to acquire a 75% interest in the Eclipse
project, pending certain regulatory approvals.
On 22 February 2021, the Company announced that it had
successfully completed the Eclipse acquisition and owned 75% of the
project and license. The cost of the option has been transferred to
Exploration and Evaluation assets in line with IFRS 6.
In May 2021, the Group purchased an option to acquire a 75%
interest in four exploration licences which comprise the Central
Menzies Gold project. The Group committed to spend AUD$500,000 on
exploration at Central Menzies within the 9-month option
period.
At the year-end management did not have plans to spend further
funds on the Central Menzies license area and the minimum spend
commitment had been met. Shortly after the period end, the Company
announced that it would not exercise the option to acquire the 75%
interest in the project. Given the existence of impairment
indicators at the year end, management took the view to impair the
Central Menzies exploration asset in full.
13. Cash and Cash Equivalents
2021 2020
GBP GBP
--------------------------- ----------- -----------
Cash at bank and in hand 2,210,371 2,289,638
--------------------------- ----------- -----------
14. Trade and Other Payables
2021 2020
GBP GBP
------------------- --------- --------
Trade payables 86,665 44,307
Other payables 4,478 2,091
Accrued expenses 33,400 35,942
------------------- --------- --------
124,543 82,340
------------------- --------- --------
The carrying amounts of the Group's trade and other receivables
are denominated in the following currencies:
2021 2020
GBP GBP
-------------------------------------------- ----------- -------------
UK Pounds 44,516 290,103
Euros 5,441 4,263
Australian Dollars 74,586 -
124,543 294,366
-------------------------------------------- ----------- -------------
15. Share Capital and Share Premium
On 15 December 2010 the shareholders approved the removal of the
Company's authorised share capital and so there is no limit on the
number of shares the Company is authorised to issue. On that date
the shareholders also approved the removal of the nominal value of
the shares, as permitted under local company legislation. As such
all amounts raised are considered to be share premium.
Issued share capital
Group Number of Share premium Total
shares GBP GBP
------------------------------------------- ------------- --------------- ------------
At 1 January 2020 133,756,991 39,265,637 39,265,637
------------------------------------------- ------------- --------------- ------------
Issue of Ordinary Shares - 28 February
2020 (2) 60,000,000 570,700 570,700
------------------------------------------- ------------- --------------- --------------
Issue of Ordinary Shares - 12 August
2020 9,387,908 164,288 164,288
------------------------------------------- ------------- --------------- --------------
Issue of Ordinary Shares - 10 September
2020 (3) 50,000,000 1,179,131 1,179,131
Issue of Ordinary Shares - 24 November
2020 (4) 61,538,462 1,886,225 1,886,225
At 31 December 2020 314,683,361 43,065,981 43,065,981
------------------------------------------- ------------- --------------- ------------
Issue of Ordinary Shares - 22 February
2021 7,095,510 277,434 277,434
Issue of Ordinary Shares - 22 February
2021 7,095,510 277,434 277,434
Issue of Ordinary Shares - 20 May 2021 1,921,068 54,750 54,750
Issue of Ordinary Shares - 20 May 2021 1,921,068 54,750 54,750
Issue of Ordinary Shares - 10 June 2021 3,995,238 106,506 106,506
------------------------------------------- ------------- --------------- --------------
At 31 December 2021 336,711,755 43,836,855 43,836,855
------------------------------------------- ------------- --------------- --------------
(1) Net of issue costs of GBP18,700
(2) Net of issues costs of GBP29,300
(3) Net of issue costs of GBP70,869
(4) Net of issue costs of GBP113,775
On 28 February 2020, the Company issued and allotted 60,000,000
new Ordinary Shares at a price of 1 pence per share for gross
proceeds of GBP600,000.
On 12 August 2020, the Company issued and allotted 4,693,954 new
Ordinary Shares at a price of 1.75 pence per share as consideration
for the purchase of the 75% Eclipse option. The Company issued and
allotted a further 4,693,954 new Ordinary shares at the same price
as payment of a finder's fee in respect of the Eclipse
transaction.
On 10 September 2020, the Company issued and allotted 50,000,000
new Ordinary Shares at a price of 2.5 pence per share for gross
proceeds of GBP1,250,000.
On 24 November 2020, the Company issued and allotted 61,538,462
new Ordinary Shares at a price of 3.25 pence per share for gross
proceeds of GBP2,000,000.
On 22 February 2021, the Company issued and allotted 7,095,510
new Ordinary Shares at a price of 3.9 pence per share as
consideration for the purchase of 75% of the equity of Eclipse
Exploration Pty. The Company issued and allotted a further
7,095,510 new Ordinary Shares at the same price as payment of a
finder's fee in respect of the Eclipse transaction.
On 20 May 2021, the Company issued and allotted 1,921,068 new
Ordinary Shares at a price of 2.85 pence per share as consideration
for the purchase of 75% of the equity of Central Menzies. The
Company issued and allotted a further 1,921,068 new Ordinary Shares
at the same price as payment of a finder's fee in respect of the
Central Menzies transaction.
On 10 June 2021, pursuant to the advisory agreement, a fee of
US$150,000 settled via the issue of 3,995,238 new ordinary shares
in the Company at a price of 2.65p were allotted to the Company's
Georgian advisor.
16. Other reserves
2021 2020
GBP GBP
--------------------------------------- ----------- -----------
Foreign currency translation reserve (239,077) (231,021)
--------------------------------------- ----------- -----------
Share option Reserve 759,370 383,814
--------------------------------------- ----------- -----------
520,293 152,793
--------------------------------------- ----------- -----------
Foreign currency translation reserve - the foreign currency
translation reserve represents the effect of changes in exchange
rates arising from translating the Financial Statements of
subsidiary undertakings into the Company's presentation
currency.
Share option reserve - the share option reserve represents the
fair value of share options and warrants in issue. The amounts
included are recycled to share premium on exercise or recycled to
retained earnings on expiry. Note 17 outlines the share based
payments made in the year.
17. Share Based Payments
Warrants and options outstanding at 31 December 2021 have the
following expiry dates and exercise prices:
Number
----------------------------
Exercise
price
in GBP
Grant date Expiry date per share 2021 2020
------------------- ------------------- ------------ ------------ ------------
20 July 2016 20 July 2021 0.1400 - 5,000,000
------------------- ------------------- ------------ ------------ ------------
30 January 2017 3 March 2022 0.1200 1,900,000 1,900,000
------------------- ------------------- ------------ ------------ ------------
22 June 2017 21 July 2022 0.1825 3,300,000 3,300,000
------------------- ------------------- ------------ ------------ ------------
30 July 2018 26 July 2023 0.1400 1,000,000 1,000,000
------------------- ------------------- ------------ ------------ ------------
30 July 2018 26 July 2023 0.2000 1,000,000 1,000,000
------------------- ------------------- ------------ ------------ ------------
1 July 2019 30 June 2024 0.0130 3,376,553 3,376,553
------------------- ------------------- ------------ ------------ ------------
12 August 2020 12 August 2022 0.0300 9,387,908 9,387,908
------------------- ------------------- ------------ ------------ ------------
1 February 2021 31 January 2025 0.0400 10,500,000 -
------------------- ------------------- ------------ ------------ --------------
1 February 2021 31 January 2025 0.0550 10,500,000 -
------------------- ------------------- ------------ ------------ --------------
18 February 2021 22 February 2023 0.0470 14,191,020 -
------------------- ------------------- ------------ ------------ --------------
55,155,481 24,964,461
--------------------------------------- ------------ ------------ ------------
2017 Warrants 2017 Warrants 2016 Warrants
--------------- --------------- ---------------
Granted on: 30/01/2017 22/06/2017 20/07/2016
Life (years) 5.2 years 5 years 5 years
Share price on grant date 8.8p 17.7p 16p
Risk free rate 0.57% 0.57% 0.5%
Expected volatility 27.06% 34.43% 23.29%
Expected dividend yield - - -
Exercise price 12p 18.25p 14p
Marketability discount 20% 20% 20%
Total fair value (GBP) 20,225 140,043 188,690
---------------------------- --------------- --------------- ---------------
2018 Warrants 2018 Warrants 2019 Warrants
--------------- --------------- ---------------
Granted on: 30/07/2018 30/07/2018 1/7/2019
Life (years) 5 years 5 years 5 years
Share price on grant date 9.35p 9.35p 1.05p
Risk free rate 0.75% 0.75% 0.42%
Expected volatility 27.06% 27.06% 40.97%
Expected dividend yield - - -
Exercise price 20p 14p 1.3p
Marketability discount 20% 20% 20%
Total fair value (GBP) 3,575 8,871 8,292
---------------------------- --------------- --------------- ---------------
2020 Warrants 2021 Options 2021 Options
--------------- -------------- --------------
Granted on: 12/08/2020 01/02/2021 01/02/2021
Life (years) 2 years 4 years 4 years
Share price on grant date 2.25p 3.45p 3.45p
Risk free rate 1.75% 1.75% 1.75%
Expected volatility 36.72% 98,49% 98,49%
Expected dividend yield - - -
Exercise price 3p 4p 5.5p
Marketability discount 20% 20% 20%
Total fair value (GBP) 14,118 192,016 176,292
---------------------------- --------------- -------------- --------------
2021 Warrants
---------------
Granted on: 18/02/2021
Life (years) 2 years
Share price on grant date 3.7p
Risk free rate 1.75%
Expected volatility 92.17%
Expected dividend yield -
Exercise price 4.7p
Marketability discount 20%
Total fair value (GBP) 181,818
---------------------------- ---------------
The risk free rate of return is based on zero yield government
bonds for a term consistent with the warrant and option life.
The movement of options and warrants for the year to 31 December
2021 is shown below:
2021 2020
-------------------------- -------------------------
Weighted Weighted
average average
exercise exercise
price price
Number (GBP) Number (GBP)
-------------------------------- ------------- ----------- ------------ -----------
As at 1 January 24,964,461 0.09 15,576,533 0.12
Granted 35,191,020 0.04 9,387,908 0.03
Exercised - - - -
Expired (5,000,000) - - -
-------------------------------- ------------- ----------- ------------ -----------
Outstanding as at 31 December 55,155,481 0.06 24,964,461 0.09
-------------------------------- ------------- ----------- ------------ -----------
Exercisable at 31 December 55,155,481 0.06 24,964,461 0.09
-------------------------------- ------------- ----------- ------------ -----------
2021 2020
--------------------------------------------------- ----------------------------------------------------
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)
----------- ---------- ------------ ----------- ------------ ----------- ------------ ----------- ------------
0.04-0.6 0.06 55,155,481 3 3 0.09 24,964,461 1.741 1.741
----------- ---------- ------------ ----------- ------------ ----------- ------------ ----------- ------------
The total fair value charged to the statement of comprehensive
income for the year ended 31 December 2021 and included in
administrative expenses was GBP473,059 (2020: GBP14,118).
18. Other (losses)/gains - Net
Group
------------------------
2021 2020
GBP GBP
-------------------------------------------------- ----------- ---------
Net foreign exchange gains / (losses) - (9,006)
Profit on sale of property, plant and equipment - 12,724
Other gains/losses - 3
Impairments of financial assets (417,138)
-------------------------------------------------- ----------- ---------
(417,138) 3,721
-------------------------------------------------- ----------- ---------
19. Employees
Group
--------------------
2021 2020
Staff costs (excluding Directors) GBP GBP
------------------------------------ -------- --------
Salaries and wages 11,937 4,841
Social security costs - 5,243
Pensions 1,194 2,688
13,131 12,772
------------------------------------ -------- --------
The average monthly number of employees during the year was 1
(2020: 1).
20. Directors' Remuneration
For the year ended 31 December 2021
-------------------------------------------------------
Short term Post-Employment Share based Total
benefits benefits payment GBP
GBP GBP GBP
-------------------------- -------------- ----------------- ------------- -----------
Executive Directors
Michael Struthers 65,000 - 135,045 200,046
Gregory Kuenzel 68,000 2,040 107,862 177,902
Non-executive Directors
Neil O'Brien 30,000 - 53,931 83,931
Peter Damouni 24,000 44 53,931 77,975
David Ajemian 1,000 14 - 1,014
Shaun Bunn 43,750 - - 43,750
231,750 2,099 350,769 584,618
-------------------------- -------------- ----------------- ------------- -----------
For the year ended 31 December 2020
-------------------------------------------------------
Short term Post-Employment Share based Total
benefits benefits payment GBP
GBP GBP GBP
-------------------------- -------------- ----------------- ------------- -----------
Executive Directors
Michael Struthers 99,824 - - 99,824
Gregory Kuenzel 40,000 1,200 - 41,200
Non-executive Directors
Neil O'Brien 35,000 - - 35,000
Peter Damouni 35,000 444 - 35,444
David Ajemian 40,000 1,044 - 41,044
Laurence Mutch - - - -
249,824 2,688 - 252,512
-------------------------- -------------- ----------------- ------------- -----------
21. Earnings per Share
Continuing operations
The calculation of the total basic losses per share of 0.706
pence (2020: loss 0.456 pence) is based on the losses attributable
to equity owners of the group of GBP2,340,790 (2020: GBP955,324 )
and on the weighted average number of ordinary shares of
331,475,515 (2020: 209,429,917) in issue during the period.
In accordance with IAS 33, basic and diluted earnings per share
are identical as the effect of the exercise of share options or
warrants would be to decrease the loss per share.
Discontinued operations
The calculation of the total basic and diluted earnings per
share of 0.528 pence (2020: 0.183 pence) is based on the profit
attributable to equity owners of the group of GBP1,751,536 (2020:
GBP382,335 ) and on the weighted average number of ordinary shares
of 331,475,515 (2020: 209,429,917) in issue during the period.
22. Commitments
(a) Work programme commitment
The Eclipse Mining Licence has an annual minimum expenditure
commitment of AUD$30,300.
(b) Royalty agreements
As part of the contractual arrangement with Kibe No.1
Investments Limited the Group has agreed to pay a royalty on
revenue from gold sales arising from gold mines developed by
Noricum Gold AT GmbH and covered by licenses acquired by Kibe No.1
Investments Limited. Under the terms of the Royalty Agreement
between Kibe No.1 Investments Limited and Noricum Gold AT GmbH, the
Group shall pay royalties, based on total ounces of gold sold,
equal to US$1 for every US$250 of the sale price per ounce.
(c) Lease agreements
During the period Eclipse entered into a 12 month office lease
of AUD$17,160 per annum. At the year end the commitment amounted to
AUD$3,900. Additionnaly, Empire entered into a 12 month office
lease of GBP18,000 per annum. The year end commitment amounted to
GBP12,000.
The lease payments in respect of the two leases have been
expensed to the Consolidated Statement of Comprehensive Income in
line with IFRS 16 for commitments spanning less than 12 months from
the year end date.
23. Assets held for sale and discontinued operations
On 10(th) June 2021, the Company announced that it had sold its
50% interest in GCG to its joint venture partner for cash
consideration of $3.3million (GBP2,327,944).
As at 31
December
2021
GBP
--------------------------------------------------------- -----------
Consideration received 2,327,944
Total assets of disposal group held
for sale (552,815)
Gain on sale of asset held for sale 1,775,129
---------------------------------------- ----------------------------
The financial performance and cash flow information of the joint
venture presented is for the year ended 31 December 2020.
2021 2020
GBP GBP
----------------------------------------------- ----------- -----------
Share of (loss)/ profit from joint venture (23,593) 382,335
Profit on disposal of investment 1,775,129 -
Profit from discontinued operations 1,751,536 382,335
----------------------------------------------- ----------- -----------
Net cash flows from operating activities - -
Net cash flows from financing activities (22,240) (44,164)
Net cash flows from investment activities - -
----------------------------------------------- ----------- -----------
Net decrease in cash generated from disposal
group (22,240) (44,164)
----------------------------------------------- ----------- -----------
The following assets were reclassified as held for sale in
relation to the discontinued operation prior to disposal:
2021 2020
GBP GBP
------------------------------------------------ --------- ---------
Loan receivable 194,073 43,227
Investment in joint venture 358,742 382,335
Total assets of disposal group 552,815 425,562
---------------------------------------- ----------------- ---------
24. Financial instruments
Financial instruments measured at fair value
The fair value hierarchy of financial instruments measured at
fair value is provided below. The different levels have been
defined as follows:
- Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1),
- Inputs other than quoted prices included within level 1 that
are observable for the asset or liability, either directly or
indirectly (level 2),
- Inputs for the asset or liability that are not based on
observable market data (that is, unobservable inputs) (level
3).
Cost may be an appropriate estimation of fair value at the
measurement date only in limited circumstances, such as for a
pre-revenue entity when there is no catalyst for change in fair
value, or the transaction date is relatively close to the
measurement date. The financial asset relates to costs incurred
with the acquisition of an option to invest in a 75% holding of
Eclipse Exploration PTY. Further detail can be found in note
12.
Group
There were no assets held at fair value as at 31 December
2021.
31 December 2020
Level 1 Level 2 Level 3 Total
GBP'000
Financial assets (fair value through the profit or loss) - - 427,314 427,314
----------- ----------- --------- ---------
- - 427,314 427,314
=========== =========== ========= =========
25. Related Party Transactions
Services provided by European Mining Services Limited to JSC
Georgian Copper & Gold
During the year European Mining Services Limited provided
geological, technical and other professional services with a total
value of GBPNil (2020: GBP1,204) to JSC Georgian Copper and Gold,
the joint venture entity.
Loans provided by Parent Company
As at 31 December 2021 there were amounts receivable of GBP8,958
(2020: GBP7,454) from Kibe No.2 Investments Limited. No interest
was charged on the loans.
As at 31 December 2021 there were amounts receivable of
GBP696,186 (2020: GBP694,186) from European Mining Services
Limited.
As at 31 December 2021 there were amounts receivable of
GBP2,737,475 (2020: GBPNil) from Eclipse Exploration Pty Ltd.
As at 31 December 2021 there were amounts receivable of
GBP119,704 (2020: GBP74,126) from Noricum AT GmbH
Loans provided by Kibe No.2 Investments Limited
As at 31 December 2021 there were amounts receivable of
GBP754,517 (2020: GBP754,517) from Noricum AT GmbH.
All intra-group transactions are eliminated on
consolidation.
Other Transactions
Westend Corporate LLP, an entity in which Gregory Kuenzel is a
partner, was paid a fee of GBP69,640 (2020: GBP46,800) for
accounting services to the Group. At the year-end there was an
outstanding balance of GBP7,053 (2020: GBP7,208).
Michael Struthers received GBP65,000 (2020: GBP99,824) through
his service company, MS Mining Consulting LDA, as disclosed in Note
20. See Note 20 for further details of directors' remuneration.
26. Ultimate Controlling Party
The Directors believe there to be no ultimate controlling
party.
27. Events after the Reporting Date
On 26 January 2022 the Group agreed Heads of Terms to enter into
a Tribute Agreement with Maher Mining Contractors Pty Ltd, giving
Empire the right to explore, develop and mine within a granted area
on Maher Mining's 100% owned mining lease M27/158 ('Gindalbie Gold
Project').
On 8 February 2022 the Group announced that it will focus on
advanced exploration opportunities at the Eclipse and Gindalbie
Gold Project, resulting in the termination of the option on Central
Menzies Gold Project.
On 6 April 2022 Eclipse acquired a 70% interest in three highly
prospective Australian-based copper-gold projects from Century
Minerals Pty Ltd for total consideration of AUD$100,000 in cash and
the issue of 16,835,588 new ordinary shares in the Company.
On 20 April 2022 the Company issued 7,500,000 options over
ordinary shares of no par value in the capital of the Company to
the Managing Director.
On 28 April 2022 the Company completed a placing to raise
GBP1,700,000 before expenses by way of a placing of 85,000,000 new
ordinary shares of no par value in the capital.
In February 2022 Russia invaded Ukraine, in a major escalation
of the Russo-Ukrainian War. Whilst this has had a huge
geo-political impact across the world, Empire has not seen a direct
impact to its organisation including employees and the ability to
carry out its core strategy. Empire continues to monitor the
situation as it evolves.
On 13 June 2022 the Company announced the resignation of Mr
Michael Struthers from the Board of Directors.
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