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/ .


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 
                                                    -----------  -----------  -----------------  ----------- 


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.


                                                       Year ended    Year ended 
                                               Note   31 December   31 December 
                                                             2021          2020 
                                                          GBP'000       GBP'000 
 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.


                                            31 December   31 December 
                                                   2021          2020 
 ASSETS                              Note       GBP'000       GBP'000 
 Financial Assets                     6           5,660         2,885 
                                                  5,660         2,885 
                                           ------------  ------------ 
 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 
                                           ------------  ------------ 
 Trade and other payables             8             853           295 
 Borrowings                           9               -           219 
 Total current liabilities                          853           514 
                                           ------------  ------------ 
 Total liabilities                                  853           514 
                                           ------------  ------------ 
 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.


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.


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.


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.


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.


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


   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 
 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.


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.


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 
                                                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 
  at fair 
  value)             11,974             -            -      11,974        13,761             -            -          13,761 
 Other long 
  assets              5,660             -            -       5,660         2,885             -            -           2,885 
  receivables             -         1,094            -         540             -         1,402            -           1,402 
  companies                         3,883            -       3,883                       3,883            -           3,883 
  and accrued 
  income                  -            71            -          71             -            80            -              80 
 Cash and 
  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.


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

                                 borrowings   Total 
 1 January 2021                         219     219 
                               ------------  ------ 
 - Interest charged                       3       3 
 - Realised foreign exchange              1       1 
 - Repayments                         (223)   (223) 
                               ------------  ------ 
 31 December 2021                         -       - 
                               ============  ====== 
                                            borrowings     Total 
 1 January 2020                                  2,982     2,982 
                                          ------------  -------- 
 - Interest charged                                296       296 
 - Realised foreign exchange                        39        39 
 - Repayments                                  (2,416)   (2,416) 
                                          ------------  -------- 
 - 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.


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.

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June 21, 2022 02:00 ET (06:00 GMT)

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