TIDMKDNC
RNS Number : 6045P
Cadence Minerals PLC
21 June 2022
Cadence Minerals Plc
("Cadence Minerals", "Cadence" or "the Company")
Annual Results for the year ended 31 December 2021
Cadence Minerals (AIM/NEX: KDNC) is pleased to announce its
final results for the year ended 31 December 2021. The full Annual
Report and Audited Financial Statements will be made available on
the Company's website at
https://www.cadenceminerals.com/ and will be posted to shareholders on the 30 June 2022
Chairman's Statement
I am pleased to present the Company's Annual Results for the
year ended 31 December 2021.
Maintaining a balanced perspective on the macro picture has
become increasingly difficult, with unexpected factors such as
Russia's invasion of Ukraine creating a supply and price squeeze
for many commodities. As I review the year and reflect on global
events, and again on events more specific to our company outlook,
it is remarkable how the macro backdrop has changed in totally
unexpected ways. Previously unprecedented levels of economic
stimulus have now been overtaken by inflation and interest rate
hikes, while the shift towards globalisation has slowed down with
the prospect of a localised war in Ukraine becoming more entrenched
and widespread.
On behalf of the Board of Directors (Board) and management, I
would like to thank all of our advisors, consultants and service
providers and especially our shareholders for their support
throughout the year. The Board and company have resumed pre
pandemic work schedules and trips to visit site and project
operational hubs, along with viewing potential investment
opportunities and attending industry conferences. The opportunity
to travel freely, to reconnect with people in person and to see
projects in transition has truly been a highlight.
Our portfolio companies have continued to progress and have in
many cases delivered landmark achievements. In no order of
priority, the Board congratulates Macarthur Minerals on completing
the Bankable Feasibility Study and moving significantly closer to
operational success. European Metal Holdings has painstakingly
continued to complete reviews and studies that highlight its low
carbon footprint while it evolves into the largest hard rock
lithium producer in Europe. As I have already stated, we continue
to look for opportunities to unlock and discover value across our
whole portfolio. Given the increased underlying prices of Lithium
and Rare Earths we expect to be able to take advantage of these
opportunities in the coming year. Recent announcements from the
current Mexican Government over potentially controlling the
nation's domestic Lithium supply have in no way put paid to our
hopes that Bacanora's JV with Gangfeng will prove to be a
success.
Of course, the highlight of the year was the formalising and
successful settlement of the 'pending' investment into the
Company's flagship Iron Ore Project at Amapa, Brazil. This process
triggered the release of escrow funds to realise our investment,
which then became a physical manifestation of the same when Iron
Ore shipments commenced from the Stockpile at the Port of Santana.
I write this after returning from a truly inspirational visit to
see the project operations, and after viewing the port, railway and
mine assets in Macapa (the Amapa system). Our investment there has
also precipitated a transformation in the area's infrastructure,
which will in time make a difference to the standard of living for
the local people. Although this process has only just begun, early
findings from our commissioned studies and reports are increasingly
positive, giving the Board every confidence that our investment
there will be a great and lasting success.
On a practical level, challenges still persist today, with
global disruption to shipping and freight rates, along with
increased costs associated with the capital and equipment required
to bring projects into production. While Cadence is not alone in
facing these challenges, your Board firmly believes we remain well
positioned in the underlying commodity markets that reflect the
Cadence portfolio. China continues to be the dominant focus of so
much global supply and demand analysis, and with the prolonged
lockdowns many commentators have expressed concern about economic
expansion in the region. Initial analysis still suggests that
economic stimulus and infrastructure spending will continue, and
this, together with the Biden $1 trillion infrastructure bill
passed in November, will help sustain steel demand and therefore
continue to support the demand for Iron ore, a key focus for
Cadence.
As the impact of the pandemic begins to recede, we face new
challenges of higher interest rates and inflation. For Cadence,
sustained higher commodity prices especially those of Lithium and
Iron Ore has remained one of the great positives across our
portfolio, and together with the successful settlement and initial
investment into the Amapa project, your Board believes we continue
to be well placed to meet these challenges, both present and
future.
In closing, I would like to personally thank my fellow Board
members, staff and partners in the wider Cadence Community and of
course all Shareholders for their continued encouragement and
confidence in the Company.
Andrew Suckling
Non-Executive Chairman
Chief Executive Officer's Commentary
I am pleased to present Annual Results for the year ended 31
December 2021, a full review of business activities during the year
is provided within the Strategic Report.
The results presented for the period ended 31 December 2021
reflect a historical position in terms of the Company's progress
and financial position, therefore we have included additional
information on key post-year-end events in the Strategic
Report.
Cadence has continued to pursue its strategic objectives despite
the continued volatility in 2021 because we think that assets that
are undervalued, de-risked, or have strategic advantages will
outperform their peers in the long run. This plan yielded fruit in
2021, with the Company continuing to report profitable returns on
its public investments and significant operation progress being
made across its core investments.
The relaxation of Covid-19 restrictions, combined with the
implementation of mass vaccination programmes and significant
levels of monetary and fiscal stimulus by many governments around
the world, resulted in a rapid resurgence of global economic
activity in 2021: the IMF estimates 5.9 percent global growth for
the year. The magnitude of this economic recovery was most
pronounced in Europe and the United States, where, after
contractions of 6.3 percent and 3.4 percent in 2020, annual growth
rates of 5 percent and 6 percent, respectively, returned in 2021.
Such rapid economic expansion was also observed in major emerging
markets, with China growing by 8 percent and India growing by 9.5
percent.
However, the pace of recovery slowed in the second half of the
year. Higher inflation emerged as part of the recovery, exacerbated
by persistent pandemic-induced bottlenecks in global supply chains.
Domestic inflationary pressures, currency movements, and the
prospect of further US monetary tightening have necessitated more
significant monetary policy responses in some emerging markets,
including Brazil, where interest rates have been raised by 500
basis points since August in an effort to stem the tide of capital
outflows, which has pushed the economy into recession
The impact of the various global fiscal stimuli has meant that
the mining industry is facing the consequences of global commodity
cost inflation, which is causing supply chain disruptions, consumer
inflation, and large variations in energy costs and capital
costs.
Overall, a progressive recovery from Covid-19 has resulted in
positive demand growth, with supply gradually adjusting to match
this increasing demand. This has proven beneficial in practically
all of the exploration and development assets Cadence has invested
in, in particular lithium and iron ore. Which by the end of the
year had increased by 485% and 47% respectively in price.
Iron Ore tracked economic progress and were affected by
geopolitical shifts throughout the year. Global crude steel
production is expected to have climbed by 4.3 percent in 2021,
setting a new high. Europe and the Americas experienced the most
rapid increase. In China, the world's largest steel producer,
output reached a new high in May before declining economic mood and
a faltering real estate sector weighed on output. Iron ore prices
reached a new high in May, fuelled by China's robust growth earlier
in the year, to which supply struggled to respond. Prices averaged
$160/tonne for the entire year, the highest level since 2011.
The buoyancy of the lithium price has been driven by the market
tightening as the electric vehicle revolution accelerates. Demand
has eroded the oversupply seen in 2019 and 2020. This market
tightness is projected to persist, with Credit Suisse predicting
that lithium demand might triple by 2025 from current levels, and
that supply would be stretched to meet that demand, with higher
prices required to incentivise the necessary supply response
As a result of this substantial shift in consumer behaviour,
demand for lithium is expected to climb by 30 percent to 675,000
tonnes LCE in 2023, up from 2021 levels. Global battery consumption
is predicted to climb 14-fold by 2030, with Statista projecting 1.8
million tonnes of lithium demand by 2030.
Despite the strong market fundamentals, lithium production is
expected to be 441,000 tonnes LCE in 2021, down from 464,000 tonnes
in 2020. However, lithium output is predicted to increase at a 13.4
percent CAGR to 679,000 tonnes in 2023. According to Macquarie, the
deficit this year will be 2,900 tonnes of LCE, rising to 20,200
tonnes in 2022 and 61,000 tonnes in 2023.
Our portfolio has been focused on two main investments, and the
first is the private Amapa Iron Ore Project . The key outstanding
item for Cadence to complete its initial US$2.5 million (20%)
investment in the Amapa Project was the execution of a settlement
agreement with the secured bank creditors. This was achieved at the
end of the year, with Cadence vesting its 20% in February 2022 and
subsequently increasing its stake to 27% in March 2022.
DEV Mineração S.A's ("DEV") the owner of the Amapa Project also
began shipping of its 58% iron ore stockpiles during the years it
shipped some 143,000 wet tonnes. The majority net proceeds of these
sales is being paid to the secured bank creditors as part of the
settlement agreement.
Operationally DEV progress has been solid, with DEV continuing
to invest in the project with the priorities on the completion of a
Pre-feasibility Study ('PFS') and the rehabilitation of the
tailings dams at the Amapa Iron Ore Mine.
As we have mentioned on numerous occasions, the opportunity to
invest in such a project is rare within our industry, and we
believe this project provides us with a potentially transformative
asset for our Company. The Amapa Project gives Cadence the
potential for an exceptional return on investment in the run-up to
full production and an opportunity to become a significant
shareholder in a mid-tier iron ore producer.
The second of our key investments is European Metals Holdings
("EMH"), whose strategy is to become a Czech based lithium and tin
producer. During the year, EMH's Cinovec Project has been
significantly de-risked and is moving rapidly towards a final
investment decision.
The progress and performance of our investment portfolio was
well reflected in our share price performance during the year,
which increased from around 15 pence to 28 pence. This was clearly
driven by the agreement reached with the Amapa Iron Project's
secured bank creditors at the end of 2021.
During the year, we saw prices of up to 31 pence, which was
driven by an increase in iron ore prices that reached US$220 per
tonne in August, but prices then fell to US$90 by November 2021,
which was reflected in our share price, which reached 17 pence in
October 2022. Cadence's share price has increased by more than 314
percent over the last two years, representing significant
growth.
However, 2022 has been a very different story, with inflationary
pressures affecting the entire equity market (the SP 500 is down
some 20 percent this year). Cadence's share price performance in
2022 reflects the performance of our equity investments, such as
European Metals Holdings and other higher risk assets. This is
despite our portfolio continuing to make solid operational progress
and being fundamentally the same investments that drove our share
price increases in 2020 and 2021.
During 2022, our priorities on the Amapa Iron Ore Project will
be the publication of a maiden Ore Reserve Estimate, followed by
the release of a PFS on the project. We will also plan to increase
our stake in the asset. In addition, we anticipate that our
investment in Lithium Technologies and Lithium Supplies will have
listed during 2022, and we are hoping to crystallise some
additional value from our other privately held investments.
I would like to express my gratitude to the Cadence team and our
investee companies, who have all worked tirelessly to bring the
Company and its investment to their current position. We believe
that concentrating risk across a few important investments and
commodities will pay off.
Kiran Morzaria
Chief Executive Officer
Investment Review
As outlined in the section "Our Business and Investment
Strategy," Cadence operates an investment strategy in which we
invest in private projects via a private equity model and in public
equity. In both investment classes, we take either an active or
passive role. We have reported in these segments below.
Private Investments, Active
The Amapa Iron Ore Project, Brazil
Interest - 20 % at 31/12/2022 increased to 27% by 31/05/2022
The Amapa Project is a large-scale iron open pit ore mine with
associated rail, port and beneficiation facilities that commenced
operations in December 2007. Production increased to 4.8 Mt and 6.1
Mt of iron ore concentrate product in 2011 and 2012, respectively.
Before its sale in 2012, Anglo American valued its 70% stake in the
Amapa Project at US$462m (100% US $660m).
In 2019 Cadence entered into a binding investment agreement to
invest in and acquire up to 27% in the Amapa iron ore mine,
beneficiation plant, railway and private port owned by DEV ("The
Agreement"). The Agreement also gave Cadence a first right of
refusal to increase its stake to 49%.
To acquire its 27% interest, Cadence will invest US$6 million
over two stages in a joint venture company. The first stage is for
20% of the JV, the consideration for which is US$2.5 million. The
second stage of investment is for a further 7% of JV for a
consideration of US$3.5 million.
Vesting of Equity Interest in the Amapa Project
During the year, the key target for Cadence was to vest its
first 20% in the Amapa Project. This required DEV and the investors
(Cadence and Indo Sino via our joint venture company) to reach a
settlement agreement ("Settlement Agreement") with the secured bank
creditors.
This was achieved on the 29 December 2021, when all the parties
entered into a binding Settlement Agreement. The original credit
facility provided to DEV by the secured creditors had a principle
amount outstanding amount of US$135 million. The Settlement
Agreement settles all of the principal amount plus all interest,
default interest, outstanding costs and fees ("Settlement
Amount").
As a result of the Settlement Agreement and the Judicial
Restructuring Plan approved in August 2019, the total principal
amounts owed to the secured and unsecured creditors in classes I to
IV of DEV have been reduced from approximately US$231 million to
approximately US$103 million or approximately 45% of the original
value.
The Settlement Amount will be paid over two years from the
effective date of the Settlement Agreement, and it is to be
satisfied by the net profits from the sale of DEV's iron ore
stockpiles. The unsecured creditors will be paid from DEV's free
cash flow over a period of nine years. Under the Settlement
Agreement, DEV remains the obligor with the Secured Creditors
having no recourse of repayment of the Settlement Amount to either
Cadence or Indo Sino. The Settlement Agreement will remain secured
over all of DEV's equity and assets.
Although the Settlement Agreement was executed within the year,
the required contractual and regulatory documentation was completed
post year end and Cadence vested its 20% interest in February 2022
and its 27% in March 2022.
Iron Ore Shipments
During the year the Commercial Court of São Paulo ("the Court")
ruled that DEV could commence the shipment of the iron ore
stockpiles situated at DEV's wholly-owned port in Santana, Amapa,
Brazil. DEV was initially to export sufficient iron ore to realise
a US$10 million of iron ore (after the deductions of all
logistical, regulatory, shipping and sale costs) from the Amapa
stockpiles at the port.
By the end of May 2021 DEV had shipped three cargoes totalling
approximately 143,500 wet tonnes of 58% sinter feed iron ore. After
all costs these sales netted DEV circa US$8 million. In July 2022,
the Court permitted the export a further US$10 million of iron ore
(after the deductions of all logistical, regulatory, shipping and
sale costs). However, with the 58% iron ore pricing decreasing some
40% from May to August 2021 and shipping pricing remaining strong
during the period DEV determined that there was a substantial risk
to profitably by continuing to ship while shipping prices remained
at high levels (US$ 80 - US$90 per wet tonne)
Once the Settlement Agreement had been completed in February
2022, DEV has been free to ship from its stockpiles and is not
restricted by the Court permissions outlined above. Subsequent to
the year end DEV shipped a further 48,492 wet tonnes of 58% iron
ore sinter fines, DEV expect to receive circa US$ 900k for this
shipment. Shipping prices have continued to increase during 2022,
driven by higher diesel prices and limited availability of vessels.
This combined with iron price volatility has meant that DEV is
currently not shipping form its stockpiles.
The vast majority of the net proceeds from the sales of the Iron
Ore has been paid to the secured bank creditors as part of the
Settlement Agreement. The remainder of the funds have been applied
to DEV operations.
Operations Review
The operational focus for the year at the Amapa Project has been
the start the rehabilitation process of the project. This has
primarily focused on tailing dam maintenance. DEV has employed a
civil engineer and two geotechnical consulting firms to advance the
work programme, including monitoring, geotechnical stability
testing and statutory reporting. The end goal is to ensure that the
current dams will be suitable for future operations amid Brazil's
more stringent regulatory environment.
In addition, DEV also began early rehabilitation of light
infrastructure, the regularising the statutory reporting with the
federal mining authority and state environmental authorities.
The other important focus for DEV and Cadence was to start the
PFS. This began in 2021 with DEV appointing several internationally
accredited engineering and consulting firms to carry out the PFS.
At the time of writing The PFS is progressing as expected, with the
consulting engineers for the mine operations, ore reserve
estimation, metallurgy, processing, infrastructure and shipping
having submitted their draft reports.
The PFS contemplates refurbishing and rehabilitating the
existing port, rail and plant with modifications being made to the
beneficiation plant to achieve a larger portion of 65% iron
concentrate (4.9 Mt). The PFS is based on producing 5.3 Mt of iron
ore concentrate per annum.
The Amapa Project's Current Development Plan
The PFS, once complete will outline more fully the development
timelines, capital required to achieve the stated project aims.
Subsequent to the publication of an economic PFS we expect the DEV
will seek to commission a Definitive Study ("DFS"). The DFS is
required to seek project debt and equity finance which will be
sought once the DFS is complete.
Cadence and its joint venture partners are having early
discussions with potential debt providers and corporate financiers,
which we will advance once the PFS is complete. On completion of
the DFS and securing debt and equity financing project construction
will commence.
Lithium Technologies Pty Ltd & Lithium Suppliers Pty Ltd
("LT" & "LS")
Interest - 31.5% at 31/12/2022 and 31/05/2022
In December 2017, Cadence Minerals announced that it had
executed binding investment agreements to acquire up to 100% LT
& LS, which was subsequently varied to acquire three
prospective assets in Australia that are in regions with proven
high-grade lithium mineralisation.
LT and LS, through their subsidiaries, are the holders of two
prospective exploration licenses and one exploration application in
Australia and a further seven exploration license applications in
Argentina.
All of the licenses and applications target prospective hard
rock lithium deposits. The most significant of these is the
Litchfield lithium prospect, which is contiguous to Core Lithium's
(ASX: CXO) strategic Finniss Lithium Project (JORC compliant ore
reserves: 7.4Mt @ 1.3% Li2O)2.
During the year we saw a renewed interest in hard rock lithium
projects in Australia. As such we increased our investment to 31.5%
into LT & LS which funded operations on the Litchfield
exploration license.
Satellite imagery verified the geology along the Litchfield
exploration license north-west boundary is comparable to Core
Lithium Ground. LT & LS's geological consultant conducted
intensive surface sampling across four target areas within the NW
quadrant, taking 657 samples to determine the potential for
contiguous mineralisation. The sampled areas mostly comprised
metamorphic rocks linked to the Burrell Creek formation - a host
rock for the regional occurrences of pegmatites. The samples
results were returned in 2022, these results confirmed LT &
LS's view that the areas adjacent to Core Lithium boundary are
prospective for lithium pegmatites.
Subsequent to the year end Cadence and the remaining
shareholders entered into a conditional sale of 100% of LT and LS.
The consideration for LT and LS is up to A$ 21.05 million (GBP11.82
million). Cadence has 31.5% of LT and LS and would receive up to A$
6.63 (GBP3.72 million). The Buyer is a public, unlisted company in
Australia ("Buyer").
The acquisition of LT and LS has several conditions precedent,
including the completion of due diligence and the relevant
regulatory approval. Assuming this is successful, the Buyer will
acquire 100% of LT and LS through a mixture of cash and shares
partially paid on completion of the sale of LT and LS and the
remainder paid on the achievement of key performance
milestones.
The Buyer has committed to spending at least A$4 million on the
exploration of Litchfield during the three years post the
completion of the sale. Should the milestones not be achieved
during this period, the respective consideration will not be
payable.
The proceeds received by the Company will be used for
reinvestment as per our investment strategy. In relation to the
shares received as part of the consideration, the Company will be
bound by an escrow agreement with the Buyer as per the regulatory
authorities in Australia and will be in the form and substance
consistent with the ASX Listing Rules. After the lapse of the
escrow arrangement, Cadence will retain or dispose of these shares
as per our investment strategy.
Private Investments, PASSIVE
Sonora Lithium Project, Mexico
Interest - 30% at 31/12/2021 and 31/05/2022
Cadence holds an interest in the Sonora Lithium Project via a
30% stake in the joint venture interests in each of Mexalit S.A. de
CV ("Mexalit") and Megalit S.A. de CV ("Megalit").
Mexalit forms part of the Sonora Lithium Project. The Sonora
Lithium Project consists of ten contiguous concessions covering
97,389 hectares. Two of the concessions (La Ventana, La Ventana 1)
are owned as of the date 100% by subsidiaries of Gangfeng Lithium
Co., Ltd ("Gangfeng"). El Sauz, El Sauz 1, El Sauz 2, Fleur and
Fleur 1 concessions are owned by Mexalit S.A. de C.V. ("Mexalit"),
which is owned 70% by Gangfeng and 30% by Cadence.
The Sonora Project holds one of the world's larger lithium
resources and benefits from being both high grade and scalable. The
polylithionite mineralisation is hosted within shallow dipping
sequences, outcropping on the surface. A Mineral Resource estimate
was prepared by SRK Consulting (UK) Limited ('SRK') in accordance
with NI 43-101. The current lithium resources and reserves for the
Sonora Lithium Project and the attributable amounts to Cadence are
available on our website here:
https://www.cadenceminerals.com/projects/sonora-lithium-project/
.
A feasibility study report was published in January 2018, which
confirmed the positive economics and favourable operating costs of
a 35,000 tonnes per annum battery-grade lithium carbonate
operation. The feasibility study report estimates a pre-tax project
net present value of US$1.253 billion at an 8% discount rate and an
Internal Rate of Return of 26.1%, and Life of Mine operating costs
of US$3,910/t of lithium carbonate. It should be noted that under
the published feasibility study, the concession owned by Mexalit
will be mined starting in year 9 of the mine plan cease at the end
of the mine life in year 19, and as such, assuming Cadence retains
its position, any net realisable economic benefit to Cadence would
only accrue at this time.
The full report can be found here:
https://www.bacanoralithium.com/pdfs/Bacanora-FS-Technical-Report-25-01-2018.pdf
Summary of Activities
The most significant development for the Sonora Lithium project
both during 2021 and 2022, was that Ganfeng completed the
acquisition of the Sonora Lithium Project.
Although this does not directly affect the terms of our Joint
Venture, having Gangfeng as a partner in the development of this
project is highly encouraging , given that Gangfeng's involvement
in the development of the project to date and their extensive
experience in the lithium market holding company is the world's
third-largest and China's largest lithium compounds producer and
the world's largest lithium metals producer in terms of production
capacity.
Whilst COVID-19 has impacted the progress on the Sonora Lithium
Project, work to complete the front-end engineering design ("FEED")
has continued throughout the period. Ganfeng is currently
appointing a Chinese Design Institute to complete the FEED with
initial site layouts scheduled for Q2 2022. Ganfeng is continuing
to work with its equipment suppliers and, along with the Company,
is maintaining its previously advised project delivery schedule
with first lithium production in H2 2024.
Rescue and removal of surface vegetation and topsoil in the area
required for the construction of the lithium
processing plant have been completed. Plant site location
survey, geotechnical, and hydrogeological works
have also been completed. Works to build the construction road
and early work camp have commenced. Site works for bulk earthworks
are expected to commence in late 2022.
On September 30, 2021, Mexican politicians from the MORENA party
tabled a draught bill to reform Mexico's energy sector, including
statements that lithium would be included among the minerals
considered strategic for the energy transition and that no new
concessions for lithium exploitation by private companies could be
granted. Subsequent to the year end the Mexican senate elevated
lithium deposits to the category of "strategic minerals", declaring
the exploration, exploitation, and use of lithium to be the
exclusive right of the state.
We are constantly examining possible legislative changes and
Gangfeng is ensuring that the mineral concessions remain
legitimate. It is our current view that the Decree passed by the
senate only impacts licenses, concessions or contracts to be
granted not already those already granted as is the case for the
Sonora Lithium Project. Therefore, at this point we do not believe
there is a material impact to our joint venture areas.
Yangibana Project, Australia
Interest - 30% at 31/12/2022 and 31/05/2022
The Yangibana Project is a significant Australian Rare Earths
Project, containing substantial Neodymium and Praseodymium
resources. The Project currently covers approximately 650 square
kilometres. The Project is located in the Gascoyne region of
Western Australia, some 250 kilometres northeast of Carnarvon.
Cadence holds interests in tenements covering some of the
prospective Gifford Creek Ferrocarbonatite Complex. Through
wholly-owned subsidiaries, Cadence holds:
-- 30% interest in 3 Mining Leases, 6 Exploration Licences, and 2 General Purpose Leases;
-- 3 Mining Licenses Include:M09/159,M09/161,M09/163;
-- 6 Exploration Licenses Included: E09/1043, E09/1049,
E09/1703, E09/1704, E09/1705, E09/1706;
-- 2 General Purpose Leases: G09/11, G09/13.
The tenements in which Cadence holds a 30% interest are in
joint-venture with Australian listed Hastings Technology Metals
("Hastings"), and Hastings carries all costs up to the decision to
commission a bankable feasibility study.
A definitive feasibility study published in 2017, modelled two
production scenarios the second of which had included within it
808,000 tonnes of plant feed from one of our joint venture areas
(Yangibana) in year 6. This production target and additional
production target from the definitive feasibility study indicates
that 11% of the plant feed will come from our joint venture
area[*].
The economic model contemplated by Hastings assumes Cadence
through its subsidiary will participate in the and mining of the
deposits held 70% by Hastings and 30% by Cadence. Assuming there is
a development of the mine by the joint venture a new Mining Joint
Venture Agreement will need to be agreed and put in place to
replace the existing joint venture documentation and regulate the
arrangements between the participants for the mine development. No
costs or revenue ascribed to 30% interest in the deposits held by
Cadence were reported in the financial modelling published by
Hastings.
Although Hastings Technology Minerals has progressed the
development of the Yangibana Rare Earth project, most of this has
been in relation to its wholly owned assets, with the only a change
being reassessment of our joint venture mineral resources and
reserves occurring in July 2021. There was no material difference
in the recalculation of our portion of the resource and reserves;
an updated summary can be found on our website he re:
https://www.cadenceminerals.com/projects/yangibana-rare-earth-project-2/
.
PUBLIC EQUITY
The public equity investment segment includes both active and
passive investments as part of our trading portfolio. The trading
portfolio consists of investments in listed mining entities that
the board believes possess attractive underlying assets. The focus
is to invest in mining companies that are significantly undervalued
by the market and where there is substantial upside potential
through exploration success and/or the development of mining
projects for commercial production. Ultimately, the aim is to make
capital gains in the short to medium term. Investments are
considered individually based on various criteria and are typically
traded on the TSX, ASX, AIM or LSE.
During the period, our public equity investments generated an
unrealised profit of GBP0.57 million (2020: GBP10.24 million) and a
realised gain of GBP0.59 million (2020: GBP0.07 million). The
majority of these profits were derived from the sale of European
Metals Holdings shares. The total unrealised gains on our equity
portfolio as at the end of 31 December 2021 was GBP9.27
million.
As of 31 December 2021, our public equity stakes consisted of
the following
Company Business Summary Year ended Year ended Cumulative Active
31 Dec 31 Dec Total Return / Passive
2021 2020 Since Inception
GBP,000 GBP,000
European Metals
Holding Limited Lithium mine development 11,287 13,426 461% Active
-------------------------- ----------- ----------- ----------------- -----------
Charger Metals
NL Lithium exploration 342 - 22% Passive
-------------------------- ----------- ----------- ----------------- -----------
Macarthur Minerals Iron Ore mine
Limited development 181 329 118% Passive
-------------------------- ----------- ----------- ----------------- -----------
Eagle Mountain
Mining Limited Copper exploration 122 - -42% Passive
-------------------------- ----------- ----------- ----------------- -----------
Mont Royal Resources Gold and Copper
Limited exploration 35 - -6% Passive
-------------------------- ----------- ----------- ----------------- -----------
Miscellaneous Various 7 6 -86% Passive
-------------------------- ----------- ----------- ----------------- -----------
Total 11,974 13,761
----------- ----------- ----------------- -----------
PUBLIC EQUITY (ACTIVE)
European Metals Holdings Limited ("European Metals")
Interest - 8.1% at 31/12/2021 and 31/05/2022
Cadence has held an investment in European Metals since June
2015. As of year-end, Cadence held 8.1% in European Metals.
European Metals owns 49% of Geomet s.r.o. with 51% owned by CEZ.
CEZ is a significant energy group listed on various European
Exchanges. Geomet s.r.o. owns 100% of Cinovec which hosts a
globally significant hard-rock lithium deposit with a total
Indicated Mineral Resource of 372.4Mt at 0.45% Li2O and 0.04% Sn
and an Inferred Mineral Resource of 323.5Mt at 0.39% Li2O and 0.04%
Sn containing a combined 7.22 million tonnes Lithium Carbonate
Equivalent and 263kt of tin, as reported to ASX on 28 November 2017
(Further Increase in Indicated Resource at Cinovec South).
An initial Probable Ore Reserve of 34.5Mt at 0.65% Li2O and
0.09% Sn reported on 4 July 2017 (Cinovec Maiden Ore Reserve) has
been declared to cover the first 20 years' mining at an output of
22,500tpa of battery-grade lithium carbonate reported on 11 July
2018 (Cinovec Production Modelled to Increase to 22,500tpa of
Lithium Carbonate).
This makes Cinovec the largest hard-rock lithium deposit in
Europe, the fourth largest non-brine deposit in the world and a
globally significant tin resource. In June 2019 EMH completed an
updated Preliminary Feasibility Study, conducted by specialist
independent consultants, which indicated a return post tax NPV of
USD1.108B and a post-tax IRR of 28.8%. Subsequent to the year end,
in January 2022 EMH updated the 2019 PFS, which indicated a post
tax NPV of US$1.938Bn and a post-tax IRR of 36.3%.
The study confirmed that the Cinovec Project is a potential low
operating cost producer of battery grade lithium hydroxide or
battery grade lithium carbonate as markets demand. It confirmed the
deposit is amenable to bulk underground mining. Metallurgical
test-work has produced both battery grade lithium hydroxide and
battery grade lithium carbonate in addition to high-grade tin
concentrate.
The Definitive Feasibility Study continues, albeit with some
minor delays related primarily to Covid-19 and the effect that has
had on logistics globally. Whilst the project had no direct
Covid-19 related issues at site, moving samples and our people has
been problematic at times. We don't anticipate any escalation in
this.
Apart from these delays, we have made steady progress of the
Cinovec Project with positive developments in the areas of our
locked cycle testwork, permitting advancement and Measured Resource
drilling programme.
The Project has been significantly de-risked and at the time of
this report is moving rapidly towards a final investment
decision.
The Project Company appointed SMS group, a German-based
world-leading engineering firm, as the lead engineer for the
minerals processing and lithium battery-grade chemicals production
at Cinovec. This marks the beginning of the formal Front-End
Engineering Design study as the major component of the ongoing
Definitive Feasibility Study. This detailed engineering contract,
along with advances in permitting and offtake discussions, moves us
closer to the development of Europe's largest hard rock lithium
resource for the benefit of all stakeholders.
Financial Review
Total comprehensive income for the year attributable to equity
holders was a loss of GBP0.14m (2020: profit of GBP7.82m). This
decrease in profitability from the previous year of approximately
GBP7.96m is mainly due to the reduced amount of realised and
unrealised profits and losses for the year of approximately GBP1.2m
(2020: GBP10.4m) relating to our share investment portfolio (listed
financial investments) held during the period. Administrative
expenses were up GBP0.36m from GBP1.44m to GBP1.80m, but foreign
exchange gains were up GBP1.28m from a loss GBP0.82m to a gain of
GBP0.46m.
Basic negative earnings per share was 0.102p (2020: positive
earnings per share of 6.897p).
The net assets of the Group at the end of the period were
GBP22.15 million (2020: GBP22.09 million). This increase of
approximately GBP0.06m reflects the losses and shares issued in the
year.
Principal Risks and Uncertainties
Cadence continuously monitors its risk exposures and reports its
review to the Board. The Board reviews these risks and focuses on
ensuring effective systems of internal financial and non-financial
controls are in place and maintained .
The main business risk is considered to be investment risk.
The Company faces external risks that can materially impact or
influence the investment environment within which the Company
operates and can include changes in commodity prices, and the
numerous factors which can influence those changes, including
economic recession and investor sentiment and including the current
and potential effects of the coronavirus pandemic.
Commodity prices have an impact on the investment performance
and prospects of all our investments. The extent of the impact
varies depending on a wide variety of factors but depend largely by
where the investment sits on the mineral development curve. The
majority of Cadence's investments sit at the more advanced stage of
the development curve. Commodity price risk is pervasive at all
stages of the development curve, but other prominent risks such as
exploration risk and technical and funding risks at the
exploration/development stage, may be considered to be weighted
higher earlier in the curve than pure commodity risk which tends to
have a greater impact on producers.
The Company's investments are located in jurisdictions other
than the UK and therefore carries with it country risk,
regulatory/permitting risk, political risk and environmental risk.
Our investments can be at different stages of development and each
stage within the mining exploration and development cycle can carry
its own risks.
Where possible Cadence seeks to mitigate these risks by
structuring its investments in a format which the Board can
influence, obtain high level oversight (often at board level) and
use legal agreements to provide control mechanisms (often negative
control) to protect the Company's investments. In addition, we seek
to further mitigate our risk exposure by obtaining a deep
fundamental understanding of an asset, its potential economics,
operating and legal environment and its management team, prior to
investment.
It should be noted that because the Company does not operate its
project investments on a day-to-day basis, there is a risk that the
operator does not meet deadlines or budgets; fails to propose or
pursue the appropriate strategy; does not adhere to the legal
agreements in place or does not provide accurate or sufficient
information to Cadence on a timely basis.
The Equity Investment segment of the Company's investments is
exposed to price risk within the market, interest rate changes,
liquidity risk and volatility. Although the investment risk within
the portfolio is dependent on many factors, the Group's principal
investments at the year-end are in companies with significant iron
ore and lithium assets and, to some extent, dependent on the
market's view of these commodities or chemicals and/or the market's
view of the management of the companies in managing those assets.
As with our private investment, the Board seeks to mitigate this by
obtaining a deep fundamental understanding of an asset and its
potential economics; its operating and legal environment and its
management team, prior to any investment by Cadence.
All countries carry political risk that can lead to interruption
of activity. Politically stable countries can have enhanced
environmental and social risks; risks of strikes and changes to
taxation; whereas less developed countries can have, in addition,
risks associated with changes to the legal framework; civil unrest
and government expropriation of assets. The Company has working
knowledge of the countries in which the joint venture holds
exploration licences, and its local joint venture partner has
experienced local operators to assist the Company in its management
of its investment in order to help reduce possible political
risk.
STATEMENT OF COMPREHENSIVE INCOME
Year ended Year ended
Note 31 December 31 December
2021 2020
GBP'000 GBP'000
Income
Unrealised profit on financial investments 6 577 10,252
Realised profit on financial investments 6 593 65
Other income 1 - 54
------------ ------------
1,170 10,371
Share based payments (197) (57)
Other administrative expenses (1,604) (1,379)
------------ ------------
Total administrative expenses (1,801) (1,436)
Operating (loss)/profit 1 (631) 8,935
Finance income 35 6
Finance cost 3 (3) (298)
Foreign exchange gain/(loss) 455 (820)
(Loss)/profit before taxation (144) 7,823
Taxation 4 - -
(Loss)/profit attributable to the
equity holders of the Company (144) 7,823
------------ ------------
Total comprehensive earnings for
the year, attributable to the equity
holders of the company (144) 7,823
============ ============
Earnings per ordinary share
Basic earnings per share (pence) 5 (0.102) 6.897
============ ============
Diluted earnings per share (pence) 5 n/a 6.795
============ ============
The accompanying principal accounting policies and notes form an
integral part of these financial statements.
statement OF FINANCIAL POSITION
31 December 31 December
2021 2020
ASSETS Note GBP'000 GBP'000
Non-current
Financial Assets 6 5,660 2,885
5,660 2,885
------------ ------------
Current
Trade and other receivables 7 5,048 5,365
Financial Assets 6 11,974 13,761
Cash and cash equivalents 324 596
Total current assets 17,346 19,722
Total assets 23,006 22,607
------------ ------------
LIABILITIES
Current
Trade and other payables 8 853 295
Borrowings 9 - 219
Total current liabilities 853 514
------------ ------------
Total liabilities 853 514
------------ ------------
EQUITY
Issued share capital 10 1,903 1,896
Share premium 10 33,207 33,159
Share based payment reserve 249 39
Investment in own shares (70) -
Retained earnings (13,136) (13,001)
Equity attributable 22,153 22,093
to equity holders of the Company
Total equity and liabilities 23,006 22,607
============ ============
The accompanying principal accounting policies and notes form an
integral part of these financial statements.
Statement of Changes in Equity
Share Share Investment Share Retained Total
capital premium in own based payment earnings equity
shares reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 31 December
2019 1,471 30,357 - 1,383 (22,225) 10,986
Share based payments - - - 57 - 57
Transfer on lapse
of warrants - - - (1,369) 1,369 -
Transfer on exercise
of warrants - - - (32) 32 -
Share issue 425 2,993 - - - 3,418
Share issue costs (191) - - - (191)
Transactions with
owners 425 2,802 - (1,344) 1,401 3,284
--------- --------- ----------- --------------- ---------- --------
Profit for the period - - - - 7,823 7,823
---------- --------
Total comprehensive
earnings for the
period - - - - 7,823 7,823
--------- --------- ----------- --------------- ---------- --------
Balance at 31 December
2020 1,896 33,159 - 39 (13,001) 22,093
========= ========= =========== =============== ========== ========
Share based payments - - - 197 - 197
Payments made through
issue of warrants - - - 22 - 22
Transfer on exercise
of options - - - (9) 9 -
Adjustment for shares
held in Trust - - (70) - - (70)
Share issue 7 50 - - - 57
Share issue costs - (2) - - - (2)
Transactions with
owners 7 48 (70) 210 9 204
--------- --------- ----------- --------------- ---------- --------
Loss for the period - - - - (144) (144)
Total comprehensive
earnings for the
period - - - - (144) (144)
--------- --------- ----------- --------------- ---------- --------
Balance at 31 December
2021 1,903 33,207 (70) 249 (13,136) 22,153
The accompanying principal accounting policies and notes form an
integral part of these financial statements.
Statement of Cash Flows
Year ended Year ended
31 December 31 December
2021 2020
GBP'000 GBP'000
Cash flow from operating activities
Continuing operations
Operating (loss)/profit (631) 8,935
Gain on financial investments (1,170) (10,317)
Equity settled share based payments 197 57
Adjustment for issue of own shares (70) -
Payments made through issue of warrants 22 -
Decrease in trade and other receivables 346 32
Increase/(decrease) in trade and other
payables 555 (68)
Net cash outflow from operating activities
from continuing operations (751) (1,361)
------------ ------------
Cash flows from investing activities
Payments for non-current financial investments (2,775) (645)
Payments for investments in current
financial investments (830) (50)
Receipts on sale of current investments 3,787 2,052
Net cash inflow from investing activities 182 1,357
------------ ------------
Cash flows from financing activities
Proceeds from issue of share capital 57 2,723
Share issue costs (2) (191)
Net borrowings (220) (2,120)
Net finance income/(cost) (3) (292)
Net cash (outflow)/inflow from financing
activities (168) 120
------------ ------------
Net change in cash and cash equivalents (737) 116
Foreign exchange movements on cash and
cash equivalents 465 (1)
Cash and cash equivalents at beginning
of period 596 481
Cash and cash equivalents at end of
period 324 596
============ ============
There were no material non-cash transactions in the year.
The accompanying principal accounting policies and notes form an
integral part of these financial statements.
PRINCIPAL ACCOUNTING POLICIES
General Information
Cadence Minerals plc is a company incorporated and domiciled in
the United Kingdom. The Company's shares are listed on the AIM
market of the London Stock Exchange, and on the AQUIS Growth Market
as operated by AQUIS Stock Exchange ("AQUIS").
The Financial Statements are for the year ended 31 December 2021
and have been prepared under the historical cost convention and in
accordance with UK adopted International Accounting Standards
(IAS). These Financial Statements (the "Financial Statements") have
been prepared and approved by the Directors on 21 June 2022 and
signed on their behalf by Donald Strang and Kiran Morzaria.
Employee Benefit Trusts ("EBTs") are accounted for under IFRS 10
and are consolidated on the basis that the parent has control, thus
the assets and liabilities of the EBT are included on the Company
balance sheet and shares held by the EBT in the Company are
presented as a deduction from equity. Although shares were issued
to the EBT in prior years, the prior year accounts have not been
re-stated for the adjustment as it is not considered to be
material.
The accounting policies have been applied consistently
throughout the preparation of these Financial Statements, and the
financial report is presented in Pound Sterling (GBP) and all
values are rounded to the nearest thousand pounds (GBP'000) unless
otherwise stated.
PRINCIPAL ACCOUNTING POLICIES
Investing Policy
The Company is an investment entity. The Company's investing
policy, which was approved at a General Meeting on 29 November
2010, is to acquire a diverse portfolio of direct and indirect
interests in exploration and producing rare earth minerals and/or
other metals projects and assets ('Investing Policy'). In light of
the nature of the assets and projects that will be the focus of the
Investing Policy, the Company will consider investment
opportunities anywhere in the world.
The Directors have considerable investment experience, both in
structuring and executing deals and in raising funds. Further
details of the Directors' expertise are set out on the Company
website. The Directors will use this experience to identify and
investigate investment opportunities, and to negotiate
acquisitions. Wherever necessary, the Company will engage suitably
qualified technical personnel to carry out specialist due diligence
prior to making an acquisition or an investment. For the
acquisitions that they expect the Company to make, the Directors
may adopt earn-out structures with specific performance targets
being set for the sellers of the businesses acquired and with
suitable metrics applied.
The Company may invest by way of outright acquisition or by the
acquisition of assets - including the intellectual property - of a
relevant business, partnership or joint venture arrangement. Such
investments may result in the Company acquiring the whole or part
of a company or project (which, in the case of an investment in a
company, may be private or listed on a stock exchange, and which
may be pre-revenue), and such investments may constitute a minority
stake in the company or project in question. The Company's
investments may take the form of equity, joint venture, debt,
convertible documents, licence rights, or other financial
instruments such as the Directors deem appropriate.
The Company may be both an active and a passive investor
depending on the nature of the individual investments in its
portfolio. Although the Company intends to be a long-term investor,
the Directors will place no minimum or maximum limit on the length
of time that any investment may be held.
There is no limit on the number of projects into which the
Company may invest, or on the proportion of the Company's gross
assets that any investment may represent at any time, and the
Company will consider possible opportunities anywhere in the
world.
The Directors may offer new ordinary shares in the capital of
the Company by way of consideration as well as cash, thereby
helping to preserve the Company's cash for working capital and as a
reserve against unforeseen contingencies including, by way of
example and without limit, delays in collecting accounts
receivable, unexpected changes in the economic environment and
unforeseen operational problems. The Company may, in appropriate
circumstances, issue debt securities or otherwise borrow money to
complete an investment. There are no borrowing limits in the
Articles of Association of the Company. The Directors do not intend
to acquire any cross-holdings in other corporate entities that have
an interest in the ordinary shares.
Going Concern
The Directors have prepared cash flow forecasts for the period
ending 30 June 2023 which take account of the current cost and
operational structure of the Company.
The cost structure of the Company comprises a high proportion of
discretionary spend and therefore in the event that cash flows
become constrained, costs can be quickly reduced to enable the
Company to operate within its available funding.
During 2021, the Company received net proceeds of GBP55,000
through share issues and GBP2,957,000 in net receipts, from sales
less purchases, of listed investments, and repaid all remaining
loans. Since the year end the Company has raised gross proceeds of
GBP4,845,000 through share issues and invested USD $3,500,000 in
The Amapa Iron Ore Project.
These forecasts demonstrate that the Company has sufficient cash
funds available to allow it to continue in business for a period of
at least twelve months from the date of approval of these financial
statements. Accordingly, the financial statements have been
prepared on a going concern basis.
It is the prime responsibility of the Board to ensure the
Company remains a going concern. At 31 December 2021 the Company
had cash and cash equivalents of GBP324,000, current financial
assets of GBP11,974,000 and no borrowings. The Company has minimal
contractual expenditure commitments, and the Board considers the
present funds sufficient to maintain the working capital of the
Company for a period of at least 12 months from the date of signing
the Annual Report and Financial Statements. With overheads of
GBP1,154,000 in 2021 excluding Director's bonuses, and creditors of
GBP853,000 at 31 December 2021 the Company would still be able to
meet its obligations, without the requirement to cut costs, should
the value of the current listed financial assets be reduced by 80%.
For these reasons the Directors adopt the going concern basis in
the preparation of the Financial Statements.
Statement of Compliance With IAS
The Company's financial statements have been prepared under the
historical cost convention except for the measurement to fair value
of financial assets as described in the accounting policy below,
and the financial statements have been prepared in accordance with
UK adopted International Accounting Standards (IAS) in conformity
with the provisions of the Companies Act 2006. The principal
accounting policies adopted by the Company are set out below.
Taxation
Current income tax assets and/or liabilities comprise those
obligations to, or claims from, fiscal authorities relating to the
current or prior reporting period, that are unpaid at the balance
sheet date. They are calculated according to the tax rates and tax
laws applicable to the fiscal periods to which they relate, based
on the taxable result for the period. All changes to current tax
assets or liabilities are recognised as a component of tax expense
in the income statement.
Deferred income taxes are calculated using the liability method
on temporary differences. This involves the comparison of the
carrying amounts of assets and liabilities in the financial
statements with their respective tax bases. In addition, tax losses
available to be carried forward as well as other income tax credits
to the Company are assessed for recognition as deferred tax
assets.
Deferred tax liabilities are always provided for in full.
Deferred tax assets are recognised to the extent that it is
probable that they will be able to be offset against future taxable
income. Deferred tax assets and liabilities are calculated, without
discounting, at tax rates that are expected to apply to their
respective period of realisation, provided they are enacted or
substantively enacted at the balance sheet date.
Most changes in deferred tax assets or liabilities are
recognised as a component of tax expense in the income statement.
Only changes in deferred tax assets or liabilities that relate to a
change in value of assets or liabilities that is charged directly
to equity are charged or credited directly to equity.
Financial Assets
The Company's financial assets include cash, other receivables
and financial assets. Except for those trade receivables that do
not contain a significant financing component and are measured at
the transaction price in accordance with IFRS 9, all financial
assets are initially measured at fair value adjusted for
transaction costs (where applicable).
Financial assets, other than those designated and effective as
hedging instruments, are classified into the following
categories:
-- amortised cost
-- fair value through profit or loss (FVTPL)
-- fair value through other comprehensive income (FVOCI).
In the periods presented the corporation does not have any
financial assets categorised as FVOCI.
The classification is determined by both:
-- the entity's business model for managing the financial
asset
-- the contractual cash flow characteristics of the financial
asset.
All income and expenses relating to financial assets that are
recognised in profit or loss are presented within finance costs,
finance income or other financial items, except for impairment of
trade receivables which is presented within other expenses.
Subsequent measurement of financial assets
Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets
meet the following conditions (and are not designated as
FVTPL):
-- they are held within a business model whose objective is to
hold the financial assets and collect its contractual cash
flows
-- the contractual terms of the financial assets give rise to
cash flows that are solely payments of principal and interest on
the principal amount outstanding
After initial recognition, these are measured at amortised cost
using the effective interest method. Discounting is omitted where
the effect of discounting is immaterial. The Company's cash and
cash equivalents, trade and most other receivables fall into this
category of financial instruments.
Financial assets at fair value through profit or loss
(FVTPL)
Financial assets that are held within a different business model
other than 'hold to collect' or 'hold to collect and sell' are
categorised at fair value through profit and loss. Further,
irrespective of business model financial assets whose contractual
cash flows are not solely payments of principal and interest are
accounted for at FVTPL. All derivative financial instruments fall
into this category, except for those designated and effective as
hedging instruments, for which the hedge accounting requirements
would apply.
Assets in this category are measured at fair value with gains or
losses recognised in profit or loss. The fair values of financial
assets in this category are determined by reference to active
market transactions or using a valuation technique where no active
market exists.
Impairment of financial assets
The Company considers trade and other receivables individually
in accounting for trade and other receivables as well as contract
assets and records the loss allowance as lifetime expected credit
losses. These are the expected shortfalls in contractual cash
flows, considering the potential for default at any point during
the life of the financial instrument. In calculating, the Company
uses its historical experience, external indicators and
forward-looking information to calculate the expected credit losses
using a provision matrix.
FAIR VALUE MEASUREMENT
IFRS 13 establishes a single source of guidance for all fair
value measurements. IFRS 13 does not change when an entity is
required to use fair value, but rather provides guidance on how to
measure fair value under IFRS when fair value is required or
permitted. The resulting calculations under IFRS 13 affected the
principles that the Company uses to assess the fair value, but the
assessment of fair value under IFRS 13 has not materially changed
the fair values recognised or disclosed. IFRS 13 mainly impacts the
disclosures of the Company. It requires specific disclosures about
fair value measurements and disclosures of fair values, some of
which replace existing disclosure requirements in other
standards
Financial Investments
Non-derivative financial assets comprising the Company's
strategic financial investments in entities not qualifying as
subsidiaries, associates or jointly controlled entities. These
assets are classified as financial assets at fair value through
profit or loss. They are carried at fair value with changes in fair
value recognised through the income statement. Where there is a
significant or prolonged decline in the fair value of a financial
investment (which constitutes objective evidence of impairment),
the full amount of the impairment is recognised in the income
statement.
Due to the nature of these assets being unlisted investments or
held for the longer term, the investment period is likely to be
greater than 12 months and therefore these financial assets are
shown as non-current assets in the Statement of financial position.
Listed investments are valued at closing bid price on 31 December
2021. For measurement purposes, financial investments are
designated at fair value through income statement. Gains and losses
on the realisation of financial investments are recognised in the
income statement for the period. The difference between the market
value of financial instruments and book value to the Company is
shown as a gain or loss in the income statement for the period.
Cash and Cash Equivalents
Cash and cash equivalents comprise cash at bank and in hand,
bank deposits repayable on demand, and other short term highly
liquid investments that are readily convertible into known amounts
of cash and which are subject to an insignificant risk of changes
in value, less advances from banks repayable within three months
from the date of advance if the advance forms part of the Company's
cash management.
Equity
Share capital is determined using the nominal value of shares
that have been issued.
The share premium account represents premiums received on the
initial issuing of the share capital. Any transaction costs
associated with the issuing of shares are deducted from share
premium, net of any related income tax benefits.
The share based payment reserve represents the cumulative amount
which has been expensed in the income statement in connection with
share based payments, less any amounts transferred to retained
earnings on the exercise of share options.
Retained earnings include all current and prior period, as
adjusted for prior year adjustments, results as disclosed in the
income statement.
Operating Leases
The Company does not have any leases within the scope of IFRS 16
in the current year. In the prior year the Company had a short-term
lease which subsequently expired.
Payments, including prepayments, made under operating leases
(net of any incentives received from the lessor) are charged to the
statement of comprehensive income on a straight-line basis over the
period of the lease.
Foreign Currencies
The financial statements are presented in Sterling, which is
also the functional currency of the Company.
In the financial statements of the Company, foreign currency
transactions are translated into the functional currency of the
Company entity using the exchange rates prevailing at the dates of
the transactions. Foreign exchange gains and losses resulting from
the settlement of such transactions and from the translation of
monetary assets and liabilities denominated in foreign currencies
at year-end exchange rates are recognised in profit or loss.
Share Based Payments
The Company issues equity-settled share-based payments to
certain employees (including directors). Equity-settled share-based
payments are measured at fair value at the date of grant. The fair
value determined at the grant date of the equity-settled
share-based payments is expensed on a straight-line basis over the
vesting period, together with a corresponding increase in equity,
based upon the Company's estimate of the shares that will
eventually vest.
Fair value is measured using the Black-Scholes model, as the
options have no market related conditions. The expected life used
in the model has been adjusted, based on management's best
estimate, for the effects of non-transferability, exercise
restrictions and behavioural considerations.
The expense is allocated over the vesting period, based on the
best available estimate of the number of share options expected to
vest. Non-market vesting conditions are included in assumptions
about the number of options that are expected to become
exercisable. Estimates are subsequently revised, if there is any
indication that the number of share options expected to vest
differs from previous estimates.
No adjustment is made to the expense or share issue cost
recognised in prior periods if fewer share options are, ultimately
exercised than originally estimated. Upon exercise of share
options, the proceeds received net of any directly attributable
transaction costs up to the nominal value of shares issued are
allocated to share capital with any excess being recorded as share
premium.
Financial Liabilities
The Company's financial liabilities include trade and other
payables. Financial liabilities are obligations to pay cash or
other financial assets and are recognised when the Company becomes
a party to the contractual provisions of the instrument.
All financial liabilities are recognised initially at fair
value, net of direct issue costs, and are subsequently recorded at
amortised cost using the effective interest method with interest
related charges recognised as an expense in the income
statement.
Critical Accounting Estimates and Judgements
Sources of Estimation and Key Judgements
The preparation of the Financial Statements requires the Company
to make estimates, judgements and assumptions that affect the
reported amounts of assets, liabilities, revenues and expenses and
related disclosure of contingent assets and liabilities. The
Directors base their estimates on historic experience and various
other assumptions that they believe are reasonable under the
circumstances, the results of which form the basis of making
judgements about the carrying value of assets and liabilities that
are not readily apparent from other sources. Actual results may
differ from these estimates under different assumptions or
conditions.
Significant judgments and estimates
The preparation of financial statements requires management to
make estimates and judgments 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 amounts of income and expenditure during the reported
period. The estimates and associated judgments are based on
historical experience and various other factors that are believed
to be reasonable under the circumstances, the results of which form
the basis of making judgments about carrying values of assets and
liabilities that are not readily apparent from other sources.
-- The estimates and underlying judgments are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects
only that period, or in the period of the revision and future
periods if the revision affects both current and future
periods.
-- In the preparation of these financial statements, estimates
and judgments have been made by management concerning calculating
the fair values of the assets acquired on business combinations,
and the assumptions used in the calculation of the fair value of
the share options. Actual amounts could differ from those
estimates.
-- Management has made the following estimates that have the
most significant effect on the amounts recognised in the financial
statements.
Unlisted investments
The Company is required to make judgments over the carrying
value of investments in unquoted companies where fair values cannot
be readily established and evaluate the size of any impairment
required. It is important to recognise that the carrying value of
such investments cannot always be substantiated by comparison with
independent markets and, in many cases, may not be capable of being
realised immediately. Management's significant judgement in this
regard is that the value of their investment represents their cost
less previous impairment. Management reviews each unquoted
investment at each reporting date for indications of impairment.
Management concluded that no impairment was necessary in the
current or prior year.
Share-based payments
The Company measures the cost of the equity-settled transactions
with employees by reference to the fair value of the equity
instruments at the date at which they are granted. Management has
made a number of assumptions in calculating the fair value of the
share options as detailed in note 11. The charge for the period
ended 31 December 2021 of GBP197,000 (2020: GBP57,000) is
determined using a Black-Scholes Valuation model, using the risk
free interest rate, the volatility rate based on the prior 12
months of the Company's shares and the expected life. The expected
life used in the model has been adjusted where applicable, based on
management's best estimate, for the effects of non-transferability,
exercise restrictions and behavioural considerations.
Adoption of New or Amended IFRS
New standards, amendments and interpretations adopted by the
Company
The company has applied the following standards and amendments
for the first time for its annual reporting period commencing 1
January 2021:
-- Amendments to IFRS 4 Insurance contracts - deferral of IFRS 9
-- Amendments to IAS 16 - Property, Plant and Equipment - Proceeds before Intended Use
-- Amendments to IAS 37 - Provisions, Contingent Liabilities,
Contingent Assets Onerous Contracts - Cost of Fulfilling a
Contract
The adoption of the above has not had any material impact on the
disclosures or amounts reported in the financial statements.
New standards, amendments and interpretations not yet
adopted
There are no IFRSs or IFRIC interpretations that are not yet
effective that would be expected to have a material impact on the
Company.
Segment reporting
Segmental analysis is not applicable as there is only one
operating segment of the continuing business - investment
activities
NOTES TO THE FINANCIAL STATEMENTS
1. Profit Before Taxation And Segmental Information
Profit before taxation - continuing operations
The loss before taxation is attributable to the principal
activities of the Company.
The loss before taxation is stated after charging:
Year ended Year ended
31 December 31 December
2021 2020
GBP'000 GBP'000
Share based payment charge 197 57
Directors' fees and consulting (see note
2) 412 383
Operating lease rentals: land and buildings - 164
Fees payable to the Company's auditor
for the audit of the financial statements 36 28
Segment reporting
The Company operates a single primary activity to invest in
businesses so as to generate a return for the shareholders. The
performance and position are therefore as stated in the primary
statements.
Year ended Year ended
31 December 31 December
2021 2020
GBP'000 GBP'000
Unrealised profit on financial investments 577 10,252
Realised profit/(loss) on financial investments 593 65
Other income - 54
--------------- ---------------
1,170 10,371
2. Employee Remuneration
Employee benefits expense
The expense recognised for employee benefits, including
Directors' emoluments, is analysed below:
Year ended Year ended
31 December 31 December
2021 2020
GBP'000 GBP'000
Short-term benefits
Wages, salaries and consulting fees 512 475
Bonus payments 450 180
Employers NI 95 48
Shares awarded - 55
Other long-term benefits
Share based payments 197 -
1,237 758
------------ ------------
The average number of employees (including directors) employed
by the Company during the period was:
2021 2020
No. No.
Directors 4 4
Other 2 2
6 6
----- -----
Included within the above are amounts in respect of Directors,
who are considered to be the key management personnel, as
follows:
Year ended Year ended
31 December 31 December
2021 2020
GBP'000 GBP'000
Short-term benefits
Wages, salaries and consulting fees 412 383
Bonus payments 450 180
Shares awarded - 55
Other long-term benefits
Share based payments charge on issue
of options 197 -
1,059 619
------------ ------------
3. Finance Income & Costs
Year ended Year ended
31 December 31 December
2021 2020
GBP'000 GBP'000
Loan interest received 35 6
35 6
============= =============
Year ended Year ended
31 December 31 December
2021 2020
GBP'000 GBP'000
Loan interest 3 296
Finance Fees - 2
3 298
============= =============
4. Taxation
The tax assessed for the period differs from the standard rate
of corporation tax in the UK as follows:
Year ended Year ended
31 December 2021 31 December 2020
2021 2020
GBP'000 % GBP'000 %
(Loss)/profit before taxation (144) 7,823
(Loss)/profit multiplied by standard
rate (27) 19 1,486 19
of corporation tax in the UK
Effect of:
Deferred tax asset not recognised 1,760 911
Remeasurement of deferred tax for
changes in tax rates (1,573) (451)
Adjustments to brought forward values - (957)
Other permanent differences (1) (2)
Chargeable gains 12 -
Income not taxable (222) (1,960)
Expenses not deductible for tax purposes 51 973
Total tax charge for year - -
============ ============
The Company has tax losses in the UK of GBP25.97m (2020:
GBP24.96m), subject to Her Majesty's Revenue and Customs approval,
available for offset against future operating profits. The Company
has not recognised any deferred tax asset in respect of these
losses, due to there being insufficient certainty regarding its
recovery. The unrecognised deferred tax asset is GBP6.50m (2020:
GBP4.74m). Changes in tax laws and rates may affect tax assets and
liabilities and our effective tax rate in the future. The main
corporation tax rate in the UK is due to increase to 25% from 19%
on 1 April 2023.
5. Earnings per Share
The calculation of the basic earnings per share is calculated by
dividing the consolidated profit attributable to the equity holders
of the Company by the weighted average number of ordinary shares in
issue during the period. The weighted average number of shares
excludes shares held by an Employee Benefit Trust (see Note 10) and
has been adjusted for the issue/purchase of shares during the
period.
Year ended Year ended
31 December 31 December
2021 2020
GBP'000 GBP'000
(Loss)/profit attributable to owners
of the Company (144) 7,823
------------ ------------
2021 2020
Number Number
Weighted average number of shares in
issue 148,535,664 116,675,272
------------ ------------
Less: shares held by the Employee Benefit
Trust (weighted average) (7,020,000) (3,248,689)
------------ ------------
Weighted average number of shares for
calculating basic earnings per share 141,515,644 113,426,583
Share options and warrants exercisable n/a 1,698,405
Weighted average number of shares for
calculating diluted earnings per share n/a 115,124,988
------------ ------------
2021 2020
Pence Pence
Basic earnings per share (0.102) 6.897
Diluted earnings per share n/a 6.795
------------ ------------
The impact of the share options is considered anti-dilutive when
the Company's result for a period is a loss.
6. Financial Investments
Financial assets at fair value GBP'000 GBP'000 GBP'000 GBP'000
through profit or loss:
Level Level Level
1 2 3 Total
Fair value at 31 December 2019 5,446 - 2,240 7,686
Additions 50 - 645 695
Fair value changes 10,252 - - 10,252
Gains on disposals 65 - - 65
Disposal (2,052) - - (2,052)
Fair value at 31 December 2020 13,761 - 2,885 16,646
-------- -------- -------- --------
Additions 830 - 2,775 3,605
Fair value changes 577 - - 577
(Loss)/Gains on disposals 593 - - 593
Disposal (3,787) - - (3,787)
Fair value at 31 December 2021 11,974 - 5,660 17,634
-------- -------- -------- --------
Gains on investments held at fair
value through profit or loss
Fair value gain on investments 577 - - 577
Realised gain on disposal of investments 593 - - 593
Net gain on investments held at
fair value through profit or loss 1,170 - - 1,170
-------- -------- -------- --------
Level 1 represents those assets, which are measured using
unadjusted quoted prices for identical assets.
Level 2 applies inputs other than quoted prices that are
observable for the assets either directly (as prices) or indirectly
(derived from prices).
Level 3 applies inputs, which are not based on observable market
data.
Level 1 assets comprise investments in listed securities which
are traded on stock markets throughout the world, and are held by
the Company as a mix of strategic and short term investments. These
are classified as current assets by virtue of their liquidity. The
listed investments have been valued at bid price, as quoted on
their respective Stock Exchanges, at 31 December 2021. During the
year ended 31 December 2021 the company disposed of a variety of
its shareholdings.
Level 3 assets comprise of investment in exploration costs where
licences are not 100% owned by the Company, and investments in
other companies. The Directors carried out an impairment review as
at 31 December 2021, and determined that no impairment was
necessary.
During 2021, GBP2,775,000 was invested in exploration costs by
the Company (2020: GBP645,000).
7. Trade and Other Receivables
31 December 31 December
2021 2020
GBP'000 GBP'000
Current
Trade receivables
Other receivables 1,094 1,402
Amounts owed by subsidiaries 3,883 3,883
Prepayments and accrued income 71 80
5,048 5,365
============ ============
There is no impairment of receivables, and no amounts are past
due at 31 December 2021 or 31 December 2020. Other receivables
include GBP554,000 deposited in a lawyer's trust account in
relation to the Amapa project. Since the year end this amount has
been applied to increase the Company's investment in Amapa.
The fair value of these financial assets is not individually
determined as the carrying amount is a reasonable approximation of
fair value.
8. Trade and Other Payables
31 December 31 December
2021 2020
GBP'000 GBP'000
Trade payables 254 171
Tax and social security - 16
Other payables 8 -
Accruals and deferred income 591 108
853 295
============ ============
The fair value of trade and other payables has not been
disclosed as, due to their short duration, management considers the
carrying amounts recognised in the balance sheet to be a reasonable
approximation of their fair value.
9. Borrowings
31 December 31 December
2021 2020
GBP'000 GBP'000
Current liabilities
Loan Notes - 210
Interest accrued - 9
- 219
============== ============
During the year ended 31 December 2021, GBP3,000 (USD$4,000)
interest and finance charges were charged in the period, GBP223,000
(USD$303,000) was repaid, and GBP1,000 of foreign exchange was
recognised.
9. BORROWINGS CONTINUED
During the year ended 31 December 2020, GBP296,000 (USD$379,000)
interest and finance charges were charged in the period,
GBP2,416,000 (USD$3,123,000) was repaid, GBP695,000 (USD$889,000)
was converted into ordinary shares in the Company and GBP52,000 of
foreign exchange was recognised.
10. Share Capital
31 December 31 December
2021 2020
GBP'000 GBP'000
Allotted, issued and fully paid
173,619,050 deferred shares of 0.24p 417 417
148,649,098 ordinary shares of 1p
(31 December 2020: 147,949,098 ordinary
shares of 1p) 1,486 1,479
1,903 1,896
============ ============
Ordinary Ordinary Share Share Premium
shares Capital
No. GBP'000 GBP'000
Allotted and issued
At 1 January 2020 105,461,968 1,054 30,357
Issue of shares during
the year 42,487,130 425 2,993
Share issue costs - - (191)
At 31 December 2020 147,949,098 1,479 33,159
Issue of shares during
the year 700,000 7 50
Share issue costs - - (2)
At 31 December 2021 148,649,098 1,486 33,207
============ =============== ==============
During the year ended 31 December 2021 the following shares were
issued: On 3 January 2021, 100,000 shares were issued on exercise
of options for proceeds of GBP6,000. On 19 January 2021, 300,000
shares were issued on exercise of warrants for proceeds of
GBP25,000. On 28 April 2021, 300,000 shares were issued on exercise
of warrants for proceeds of GBP25,000.
Investment in Own Shares
At 31 December 2021 the Company held in Trust 7,020,000 (2020:
7,020,000) of its own shares with a nominal value of GBP70,200
(2020: GBP70,200). The Trust has waived any entitlement to the
receipt of dividends in respect of its holding of the Company's
ordinary shares. The market value of these shares at 31 December
was GBP1.75m (2020: GBP1.02m). In the current period nil were
repurchased (2020: nil) and nil were transferred into the Trust
(2020: 4,300,000), with nil reissued on award of shares to
directors.
The shares held in EBT were incorrectly classified as an expense
in prior periods. An adjustment has been made in the current period
to correct this. The amounts involved are immaterial.
The deferred shares have no voting rights and are not eligible
for dividends.
11. Share Based Payments
Share Options
The Company operates share option schemes for certain employees
(including directors). Options are exercisable at the option price
agreed at the date of grant. The options are settled in equity once
exercised. The expected life of the options varies between 1 and 6
years. All options issued in the prior years vested immediately,
with no vesting requirements. During the year ended 31 December
2021, 7,200,000 (2020: nil) options were issued to Directors.
Details of the number of share options and the weighted average
exercise price (WAEP) outstanding during the period are as
follows:
31 December 2021 31 December 2020
Number WAEP Number WAEP
GBP GBP
Outstanding at the beginning
of the year 100,000 0.060 2,800,000 0.437
Issued 7,200,000 0.290 - -
Lapsed - - (2,500,000) (0.0600)
Exercised (100,000) (0.060) (200,000) (0.0600)
Outstanding at the end of
the year 7,200,000 0.290 100,000 0.060
========== ======== ============ =========
Exercisable at year end 7,200,000 100,000
The share options outstanding at the end of the period have a
weighted average remaining contractual life of 4.33 years (31
December 2020: Nil years) and have the following exercise prices
and fair values at the date of grant:
First exercise Grant date Exercise Fair 31 December 31 December
date (when price value 2021 2020
vesting conditions
are met)
GBP GBP Number Number
30 April 2021 30 April 2021 0.29 0.02742 7,200,000 -
28 January 28 January
2013 2010 0.06 0.0004 - 100,000
100,000 2,800,000
============ ============
At 31 December 2021 7,200,000 options were exercisable (31
December 2020: 100,000).
For those options and warrants granted where IFRS 2 "Share-Based
Payment" is applicable, the fair values were calculated using the
Black-Scholes model. The inputs into the model for share based
payments recognised in the current and prior year were as
follows:
Risk free Share price Expected Share price
rate volatility life at date
of grant
30 April 2021 0.19% 21.6% 5 years GBP0.2375
Expected volatility was determined by calculating the historical
volatility of the Company's share price for 12 months prior to the
date of grant. The expected life used in the model has been
adjusted, based on management's best estimate, for the effects of
non-transferability, exercise restrictions and behavioural
considerations.
Warrants
Details of the number of warrants and the weighted average
exercise price (WAEP) outstanding during the period are as
follows:
31 December 2021 31 December 2020
Number WAEP Number WAEP
GBP GBP
Outstanding at the beginning
of the year 1,598,405 0.11348 - -
Issued 800,000 0.20000 3,024,325 0.10056
Exercised (600,000) (0.085) (1,425,920) (0.86088)
Outstanding at the end
of the year 1,798,405 0.16147 1,598,405 0.11348
========== ======== ============ ==========
Exercisable at year end 1,798,405 1,598,405
The warrants outstanding at the end of the period have a
weighted average remaining contractual life of 1.78 years (31
December 2020: 1.98 years) and have the following exercise prices
and fair values at the date of grant:
First exercise Grant date Exercise 31 December 31 December
date (when vesting price 2021 2020
conditions are
met)
GBP Number Number
01 January 2020 01 January 2020 0.15 435,905 435,905
01 January 2020 01 January 2020 0.085 - 600,000
06 May 2020 06 May 2020 0.06 41,667 41,667
20 August 2020 20 August 2020 0.12 520,833 520,833
28 September 28 September
2021 2021 0.20 800,000 -
1,798,405 1,598,405
============ ============
For those warrants granted where IFRS 2 "Share-Based Payment" is
applicable, the fair values were calculated using the Black-Scholes
model. The inputs into the model for share based payments
recognised in the current and prior year were as follows:
Risk free Share price Expected Share price
rate volatility life at date
of grant
6 May 2020 0.49% 28.4% 3 years GBP0.0625
10 June 2020 0.47% 29.0% 3 years GBP0.0875
20 August 2020 (0.06%) 38.5% 3 years GBP0.15325
28 September 2021 0.19% 28.4% 3 years GBP0.1825
The Company recognised total expenses of 197,000 (year ended 31
December 2020: GBP57,000) relating to equity-settled share-based
payment transactions during the period.
12. Financial Instruments
The Company is exposed to a variety of financial risks which
result from both its operating and investing activities. The Board
is responsible for co-ordinating the Company's risk management and
focuses on actively securing the Company's short to medium term
cash flows. Long term financial investments are managed to generate
lasting returns.
The Company has purchased shares in Companies which are listed
on public trading exchanges such as the LSE, TSX and ASX, and these
shares are held as an available-for-sale asset. The most
significant risks to which the Company is exposed are described
below:
a Credit risk
The Company's credit risk will be primarily attributable to its
trade receivables. At 31 December 2021 and 31 December 2020 the
Company had no trade receivables and therefore minimal risk
arises.
Generally, the Company's maximum exposure to credit risk is
limited to the carrying amount of the financial assets recognised
at the balance sheet date, as summarised below:
31 December 2021 31 December 2020
Investments Loans Derivative Statement Investments Loans Derivative Statement
(carried and financial of (carried and financial of financial
at fair receivables assets Financial at fair receivables assets position
value) (carried position value) (carried total
at total at
amortised amortised
cost) cost)
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investments
(carried
at fair
value) 11,974 - - 11,974 13,761 - - 13,761
Other long
term
financial
assets 5,660 - - 5,660 2,885 - - 2,885
Other
receivables - 1,094 - 540 - 1,402 - 1,402
Receivables
from
investee
companies 3,883 - 3,883 3,883 - 3,883
Prepayments
and accrued
income - 71 - 71 - 80 - 80
Cash and
cash
equivalents - 324 - 878 - 596 - 596
Total 17,634 5,372 - 23,006 16,646 5,961 - 22,607
============ ============ =========== ========== ============ ============ =========== ==============
Financial instruments that are measured subsequent to initial
recognition at fair value, grouped into Levels 1 to 3 based on the
degree to which the fair value is observable:
-- Level 1 fair value measurements are those derived from quoted
prices (unadjusted) in active markets for identical assets or
liabilities;
-- Level 2 fair value measurements are those derived from inputs
other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices); and
-- Level 3 fair value measurements are those derived from
valuation techniques that include inputs for the asset or liability
that are not based on observable market data (unobservable
inputs).
In certain cases, the inputs used to measure fair value may fall
into different levels of the fair value hierarchy. In such cases,
an investment's level within the fair value hierarchy is based on
the lowest level of input that is significant to the fair value
measurement. Management's assessment of the significance of a
particular input to the fair value measurement in its entirety
requires judgement, and considers factors specific to the
investment.
Investments
The Company's investment in shares in Listed Companies are
included as a financial investment and has been classified as Level
1, as market prices are available and the market is considered an
active, liquid market.
The Company's investment in exploration costs where licences are
not 100% owned by the Company, and investments in other companies
are classified as non-current Level 3.
The credit risk on liquid funds is limited because the Company
only places deposits with leading financial institutions in the
United Kingdom.
a Liquidity risk
The Company seeks to manage financial risk by ensuring
sufficient liquidity is available to meet foreseeable needs and to
invest cash assets safely and profitably. The Directors prepare
rolling cash flow forecasts and seek to raise additional equity
funding whenever a shortfall in funding is forecast. Details of the
going concern basis of preparing the financial statements are
included in the principal accounting policies.
b Market risk
The amount and quality of minerals available and the related
costs of extraction and production represent a significant risk to
the Company. The Company is exposed to fluctuating commodity prices
in respect of the underlying assets. The Company seeks to manage
this risk by carrying out appropriate due diligence in respect of
the projects in which it invests.
The Company is exposed to the volatility of the stock markets
around the world, on which it holds shares in various listed
entities, and the fluctuation of share prices of these underlying
companies. The Company manages this risk through constant
monitoring of its investments share prices and news information,
but does not hedge against these investments.
c Interest rate risk
The Company only has borrowings at fixed coupon rates and
therefore minimal interest rate risk, as this is deemed its only
material exposure thereto.
d Foreign exchange risk
The Company had no borrowings at 31 December 2021. At 31
December 2020 the Company had borrowings of GBP219,000 which were
denominated is US dollars. The Company operates foreign currency
bank accounts to help mitigate the foreign currency risk.
e Financial liabilities
The Company's financial liabilities are classified as follows
:
31 December 2021 31 December 2020
Other Liabilities Total Other Liabilities Total
financial not within financial not within
liabilities the scope liabilities the scope
at amortised of IAS at amortised of IAS
cost 39 cost 39
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Trade payables 254 - 254 171 - 171
Accruals and
deferred income - 591 591 - 108 108
Other payables 8 - 8 16 - 16
Borrowings - - - 219 - 219
Total 262 591 853 406 108 514
============== ============ ======== ============== ============ ========
Maturity of financial liabilities
All financial liabilities at 31 December 2021 and 31 December
2020 mature in less than one year.
Borrowing facilities for the period ended 31 December 2021
The Company had no committed borrowing facilities at 31 December
2021 (31 December 2020: GBP219,000). See Note 9 for details.
The Company had no committed undrawn facilities at 31 December
2021 or 31 December 2020.
f Capital risk management
The Company's objectives when managing capital are:
- to safeguard the Company's ability to continue as a going
concern, so that it continues to provide returns and benefits for
the shareholders;
- to support the Company's stability and growth; and
- to provide capital for the purpose of strengthening the Company's risk management capability.
The Company actively and regularly reviews and manages its
capital structure, to ensure an optimal capital structure, and
equity holder returns, taking into consideration the future capital
requirements of the Company and capital efficiency, prevailing and
projected profitability, projected operating cash flows, projected
capital expenditures and projected strategic investment
opportunities. Management regards total equity as capital and
reserves, for capital management purposes.
13. Reconciliation of Liabilities Arising from Financing
Activities
Short-term
borrowings Total
1 January 2021 219 219
------------ ------
Cash-flows:
- Interest charged 3 3
- Realised foreign exchange 1 1
- Repayments (223) (223)
------------ ------
31 December 2021 - -
============ ======
Short-term
borrowings Total
1 January 2020 2,982 2,982
------------ --------
Cash-flows:
- Interest charged 296 296
- Realised foreign exchange 39 39
- Repayments (2,416) (2,416)
------------ --------
Non-cash:
- Loans converted (695) (695)
- Unrealised Foreign exchange movement 13 13
31 December 2020 219 219
============ ========
14. Related Party Transactions
The Company accrued rent of GBP19,200 due to Gunsynd Plc, a
company of which Don Strang is a director (2020: GBP8,000 charged).
Andrew Suckling is a director of Macarthur Minerals Limited. During
the year the Company sold 286,000 shares of its holding in
Macarthur Minerals for proceeds of GBP50,581 (2020: 5,951,000
shares disposed of for proceeds of GBP607,386). At the year end the
company held 1,016,000 shares in Macarthur Minerals (2020:
1,302,000).
Key Management Personnel are considered to be the Company
Directors only, and their fees and remuneration are disclosed
within Note 2 to the financial statements.
15. Events after the end of the Reporting Period
On 3 February 2022, the Company announced it had issued
19,999,985 ordinary shares in respect of a placing and subscription
at 20.5p per share.
On 21 February 2022, the Company announced it had issued
3,634,825 ordinary shares in respect of an open offer at 20.5p per
share.
On 19 April 2022, the Company announced it had issued 435,905
ordinary shares in respect of an exercise of warrants at 15p per
share.
15. EVENTS AFTER THE END OF THE REPORTING PERIOD (CONTINUED)
On 7 February 2022, the Company announced that the material
preconditions for the second stage of its investment in the Amapa
Project has been satisfied and the Company's next 7% interest would
now vest. This completed on 15 March 2022 and the Company now has a
27% interest in the Pedra Branca Alliance. For further details
please see the Strategic Report.
On 30 March 2022, the Company announced that it has entered into
a Conditional Sale Agreement of its 31.5% Equity Stake in Lithium
Technologies and Lithium Supplies, and would receive up to A$6.63
million (GBP3.72 million). The consideration payable to LT and LS
shareholders will be via a mixture of cash and shares. For further
details please see the Strategic Report.
Following these share issues, the Company has 172,719,813
Ordinary shares of 1 pence each in issue. No ordinary shares are
held in treasury. The figure of 172,719,8113 Ordinary shares may be
used by the Company's shareholders as the denominator for the
calculations by which they will determine if they are required to
notify their interest in, or a change to their interest in, the
Company under the Financial Conduct Authority's Disclosure and
Transparency Rule.
16. Ultimate Controlling Party
In the opinion of the directors there is no controlling
party.
[*] Hastings Technology Metals Limited (2017) Yangibana Project
Definitive Feasibility Study, Executive Summary. pp 58-60.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
FR FBMATMTBTMPT
(END) Dow Jones Newswires
June 21, 2022 02:00 ET (06:00 GMT)
Cadence Minerals (LSE:KDNC)
Gráfica de Acción Histórica
De Mar 2024 a Abr 2024
Cadence Minerals (LSE:KDNC)
Gráfica de Acción Histórica
De Abr 2023 a Abr 2024
