STATEMENT OF FINANCIAL POSITION                                                                                             

As at 30 June 2024                                                                                   Company number: 06275976

 

 

		Group			Company
	Note	30 June 2024 £	30 June 2023 £		30 June 2024 £	30 June 2023 £
Non-Current Assets
Royalty asset	7	1	1		-	-
Intangible assets	5	80,870	236,518		-	-
Investments	6	417,217	891,255		256,560	43,046
Investment in subsidiaries	6	-	-		19,296	1,997,048
Leased Asset		28,911	29,810		-	-
Convertible debenture receivables	8	-	475,168		-	475,168
		526,999	1,632,752		275,856	2,515,262
Current Assets
Trade and other receivables	10	185,925	243,177		87,797	77,254
Cash and cash equivalents	11	195,157	244,074		94,586	18,684
Convertible debenture receivables	8	1,581,428	1,583,892		1,581,428	1,583,892
		1,962,510	2,071,143		1,763,811	1,679,830
Total Assets		2,489,509	3,703,895		2,039,667	4,195,092
Current Liabilities
Trade and other payables	13	727,385	1,704,437		657,767	1,454,431
Convertible loan notes	14	43,248	-		43,248	-
		770,633	1,704,437		701,015	1,454,431
Total Liabilities		770,633	1,704,437		701,015	1,454,431
Net Assets		1,718,876	1,999,458		1,338,652	2,740,661
Equity attributable to owners of the Parent
Share capital	15	900,167	778,635		900,167	778,635
Share premium	15	17,239,349	16,753,221		17,239,349	16,753,221
Other reserves	17	162,365	519,045		17,864	340,716
Reverse asset acquisition reserve		(4,134,019)	(4,134,019)		-	-
Retained losses		(12,448,986)	(11,917,424)		(16,818,728)	(15,131,911)
Total Equity		1,718,876	1,999,458		1,338,652	2,740,661

 

The Company has elected to take the exemption under Section 408 of the Companies Act 2006 from presenting the Parent Company Income Statement and Statement of Comprehensive Income. The loss for the Company for the year ended 30 June 2024 was £2,011,221 (loss for year ended 30 June 2023: £8,781,189).

 

 

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 30 June 2024

Continued operations	Note		Year ended 30 June 2024 £	Year ended 30 June 2023 (restated) £
Profit on disposal of exploration & evaluation asset sales			45,279	364,968
Administrative expenses	25		(943,302)	(3,855,925)
Foreign exchange (losses)/gains			50,529	(81,024)
Operating loss			(847,494)	(3,571,981)
Finance income	20		344,198	369,587
Finance costs			(214,841)	-
Other income			336,864	47,121
Impairment of loans	9		(172,221)	(128,607)
Impairment of debentures			(474,428)	-
Impairment of investments			(117,260)	-
Impairment of intangible assets			(107,684)	(12,636)
Other gains	21		633,113	17,913
Realised Loss on disposal investments	22		(71,071)	(866,421)
Unrealised fair value (loss)/gain on debentures			(3,204)	-
Unrealised fair value (loss)/gain on investments	6		(394,009)	309,896
Discontinued operations:
Gain/(loss) from discontinued operations	28		232,071	(150,593)
Profit/(Loss) before income tax			(855,966)	(3,985,721)
Income tax	23		-	(12,178)
Loss for the year attributable to owners of the Parent			(855,966)	(3,997,899)
Basic and Diluted Earnings Per Share attributable to owners of the Parent during the period (expressed in pence per share)	24
Continuing operations			(0.1)p	(1)p
Discontinuing operations			-	(0.0003)p
			Year ended 30 June 2024 £	Year ended 30 June 2023 £
Loss for the period			(855,966)	(3,997,899)
Other Comprehensive Income:
Items that may be subsequently reclassified to profit or loss
Currency translation differences			(33,828)	(123,367)
Other comprehensive income for the period, net of tax			(889,794)	(4,121,266)
Total Comprehensive Income attributable to owners of the parent			(889,794)	(4,121,266)

 

 

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 30 June 2024

 

	Note		Share capital £	Share premium £		Reverse asset acquisition reserve £		Other reserves £		Retained losses £	Total £
Balance as at 1 July 2022			654,129	14,821,521		(4,134,019)		599,093		(7,919,525)	4,021,199
Loss for the year			-	-		-		-		(3,997,899)	(3,997,899)
Other comprehensive income for the year			-	-		-		-		-	-
Items that may be subsequently reclassified to profit or loss			-	-		-		-		-	-
Currency translation differences			-	-		-		(123,367)		-	(123,367)
Total comprehensive income for the year			-	-		-		(123,367)		(3,997,899)	(4,121,266)
Issue of shares		15	124,506	1,934,700		-		-		-	2,059,206
Issue costs		15	-	(3,000)		-		-		-	(3,000)
Options Granted		16	-	-		-		36,723		-	36,723
Warrants Granted		16	-	-		-		6,596		-	6,596
Total transactions with owners, recognised directly in equity			124,506	1,931,700		-		43,319		-	2,099,525
Balance as at 30 June 2023			778,635	16,753,221		(4,134,019)		519,045		(11,917,424)	1,999,458
Balance as at 1 July 2023			778,635	16,753,221		(4,134,019)		519,045		(11,917,424)	1,999,458
Loss for the year			-	-		-		-		(855,966)	(855,966)
Other comprehensive income for the year			-	-		-		-		-	-
Items that may be subsequently reclassified to profit or loss			-	-		-		-		-	-
Currency translation differences			-	-		-		(33,828)		-	(33,828)
Total comprehensive income for the year			-	-		-		(33,828)		(855,966)	(889,794)
Issue of shares		15	121,532	486,128		-		-		-	607,660
Options lapsed		16	-	-		-		(75,281)		75,281	-
Warrants lapsed		16	-	-		-		(249,123)		249,123	-
Equity component of CLN		14	-	-		-		1,552		-	1,552
Total transactions with owners, recognised directly in equity			121,532	486,128		-		(322,852)		324,404	609,212
Balance as at 30 June 2024			900,167	17,239,349		(4,134,019)		162,365		(12,448,986)	1,718,876

 

 

 

COMPANY STATEMENT OF CHANGES IN EQUITY

For the year ended 30 June 2024

 

	Note	Share capital £	Share premium £	Other reserves £	Retained losses £	Total equity £
Balance as at 1 July 2022		654,129	14,821,521	297,397	(6,350,722)	9,422,325
Loss for the year		-	-	-	(8,781,189)	(8,781,189)
Total comprehensive income for the year		-	-	-	(8,781,189)	(8,781,189)
Issue of shares	15	124,506	1,934,700	-	-	2,059,206
Issue Costs	15	-	(3,000)	-	-	(3,000)
Options granted	16	-	-	36,723	-	36,723
Warrants Granted	16	-	-	6,596	-	6,596
Total transactions with owners, recognised directly in equity		124,506	1,931,700	43,319	-	2,099,525
Balance as at 30 June 2023		778,635	16,753,221	340,716	(15,131,911)	2,740,661
Balance as at 1 July 2023		778,635	16,753,221	340,716	(15,131,911)	2,740,661
Loss for the year		-	-	-	(2,011,221)	(2,011,221)
Total comprehensive income for the year		-	-	-	(2,011,221)	(2,011,221)
Issue of shares	15	121,532	486,128	-	-	607,660
Options lapsed	16	-	-	(75,281)	75,281	-
Warrants lapsed	16	-	-	(249,123)	249,123	-
Equity component of CLN	14	-	-	1,552	-	1,552
Total transactions with owners, recognised directly in equity		121,532	486,128	(322,852)	324,404	609,212
Balance as at 30 June 2024		900,167	17,239,349	17,864	(16,818,728)	1,338,652

 

 

 

STATEMENTS OF CASH FLOWS

For the year ended 30 June 2024

 

		Group			Company
	Note	Year ended 30 June 2024 £	Year ended 30 June 2023 £		Year ended 30 June 2024 £	Year ended 30 June 2023 £
Cash flows from operating activities
Loss before income tax		(855,966)	(3,997,899)		(2,011,221)	(8,781,189)
Adjustments for:
Provision for bad debt		211,824	287,052		-	140,000
Realised loss on investments		71,071	866,421		-	-
Change in fair value of investments		394,009	(309,896)		150,354	14,961
Change in fair value of convertible debentures		3,204	91,106		3,204	91,106
Impairment of loans and debentures		646,649	128,607		563,306	52,444
Impairment of intangible assets		107,684	12,636		-	-
Impairment of investment		117,260	-		411,231	-
Impairment of intercompany investments		-	-		1,144,380	6,056,544
Interest income		(262,885)	(369,587)		(199,299)	(309,274)
Finance cost		177,000	-		177,000	-
Income on consideration shares	6	(316,343)	-		(316,343)	-
Intercompany sales		-	-		-	(155,129)
Unrealised foreign exchange/(loss)		(45,753)	(100,977)		937	30,448
Share option expenses	25	-	43,306		-	43,306
Increase in trade and other receivables	10	(293,998)	773,143		(187,218)	1,614,494
(Decrease)/Increase in trade and other payables	13	(361,265)	282,930		(182,371)	108,424
Net cash used in operating activities		(407,509)	(2,293,158)		(446,040)	(1,093,865)
Cash flows from investing activities
Funds received on sale of investment	6	255,612	677,400		-	-
Funds spent on investment	6	-	(58,649)		-	(58,007)
Funds spent on leased assets		-	(29,810)		-	-
Funds received on sale of exploration assets	5	41,919	47,206		-	-
Loans (to)/from subsidiaries	6	-	-		422,140	(732,651)
Interest received		99,802	226,382		99,802	226,382
Exploration and evaluation expenses		-	(222,667)		-	-
Convertible debenture receivable	8	-	(503,499)		-	(503,499)
Net cash generated from (used in) investing activities		397,333	136,363		521,942	(1,067,775)
Cash flows from financing activities
Proceeds from issue of share capital	15	-	2,059,206		-	2,059,206
Cost of shares issued	15	-	(3,000)		-	(3,000)
Loans granted		(38,741)	34,085		-	-
Net cash generated from financing activities		(38,741)	2,090,291		-	2,056,206
Net (decrease)/increase in cash and cash equivalents		(48,917)	(66,504)		75,902	(105,434)
Cash and cash equivalents at beginning of year	11	244,074	310,578		18,684	124,118
Cash and cash equivalents at end of year		195,157	244,074		94,586	18,684

 

 

 

 

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 30 June 2023

 

 

1.   General information

The Company is a public limited company incorporated and domiciled in England (registered number: 06275976), which is listed on the London Stock Exchange. The registered office of the Company is 6 Heddon Street, London, W1B 4BT.

 

2.   Summary of significant Accounting Policies

The principal Accounting Policies applied in the preparation of these Financial Statements are set out below. These Policies have been consistently applied to all the periods presented, unless otherwise stated.

 

2.1. Basis of preparation of Financial Statements

The Financial Statements have been prepared in accordance with UK-adopted international accounting standards (UK IAS) in accordance with the requirements of the Companies Act 2006. The Financial Statements have also been prepared under the historical cost convention.

 

The Financial Statements are presented in Pounds Sterling rounded to the nearest pound.

 

The preparation of financial statements in conformity with UK IAS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Accounting Policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the Consolidated Financial Statements are disclosed in Note 4.

 

2.2.       New and amended standards

 

(a)   New and amended standards mandatory for the first time for the financial periods beginning on or after 30 June 2024.

 

The International Accounting Standards Board (IASB) issued various amendments and revisions to International Financial Reporting Standards and IFRIC interpretations. The amendments and revisions were applicable on or after the year ended 30 June 2024 but did not result in any material changes to the financial statements of the Group.

 

(b)   New standards, amendments and interpretations in issue but not yet effective or not yet endorsed and not early adopted.

 

Standards, amendments and interpretations that are not yet effective and have not been early adopted are as follows: 

 

Standard		Impact on initial application		Effective date
IAS 21 (Amendments)		Lack of Exchangeability		1 January 2025
IAS 9 (Amendments)		Classification and measurement of Financial Instruments		1 January 2026

 

The Group is evaluating the impact of the new and amended standards above which are not expected to have a material impact on the Group's results or shareholders' funds.

 

2.3.       Basis of Consolidation

The Consolidated Financial Statements consolidate the financial statements of the Company and its subsidiaries made up to 30 June. Subsidiaries are entities over which the Group has control. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.

 

Generally, there is a presumption that a majority of voting rights result in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

 

·      The contractual arrangement with the other vote holders of the investee;

·      Rights arising from other contractual arrangements; and

·      The Group's voting rights and potential voting rights

 

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the period are included in the consolidated financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary.

Investments in subsidiaries are accounted for at cost less impairment within the Parent Company financial statements. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used in line with those used by other members of the Group. All significant intercompany transactions and balances between Group enterprises are eliminated on consolidation.

 

2.4.       Going concern

The Group Financial Statements have been prepared on a going concern basis. The Directors are of the view that, the Group has funds to meet its planned expenses over the next 12 months from the date of these financial statements.

 

As at 30 June 2024, the Group had cash and cash equivalents of £195,157.  The Directors have prepared cash flow forecasts to 31 December 2025, which take into account the cost and operational structure of the Group and Parent Company, property option income, debenture interest and any existing licence and working capital requirements. These forecasts indicate that the Group and Parent Company's cash resources are not sufficient to cover the projected expenditure for a period of 12 months from the date of approval of these financial statements.  These forecasts indicate that the Group and Parent Company, in order to meet their operational objectives, and meets their expected liabilities as they fall due, will be required to raise additional funds within the next 12 months.

 

In common with many entities in the resource sector, the Company will need to raise further funds within the next 12 months in order to meet its expected liabilities as they fall due.  Whilst the Directors are confident that they will be secure the necessary funding, the current conditions do indicate the existence of a material uncertainty which may cast significant doubt about the ability of the Group and parent company to continue as a going concern. No adjustments have been made in the financial statements, should the Group not be able to continue as a going concern.

 

2.5.       Foreign currencies

a)   Functional and presentation currency

Items included in the Financial Information are measured using the currency of the primary economic environment in which the entity operates (the 'functional currency'). The functional currency of the parent company is Pounds Sterling as is the functional currency of the UK subsidiary which is Imperial Minerals (UK) Limited. The functional currency of the Canadian subsidiary, Cloudbreak Exploration Inc. is Canadian Dollars. The functional currency of the US subsidiaries, Cloudbreak Discovery (US) Ltd. and Cloudbreak Energy (US) Ltd. is US Dollars. The Financial Information in The Group's overseas subsidiaries are translated in accordance with IAS 21 - The Effect of Changes in Foreign Exchange Rates.

 

During the year ended 30 June 2024, the Company disposed of Kudu Resources and Kudu Resources Guinea as part of a settlement agreement.

b)   Transactions and balances

 

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where such items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Income Statement in other comprehensive income. The financial statements are presented in Pounds Sterling (£), the functional currency of Cloudbreak Discovery Plc is Pounds Sterling, as is the functional currency of the UK subsidiary which is Imperial Minerals (UK) Limited.  

 

2.6.       Fair value measurement

IFRS 13 establishes a single source of guidance for all fair value measurements. IFRS 13 provides guidance on how to measure fair value under IFRS when fair value is required or permitted. The resulting calculations under IFRS 13 affected the principles that the Company uses to assess the fair value, but the assessment of fair value under IFRS 13 has not materially changed the fair values recognised or disclosed. IFRS 13 mainly impacts the disclosures of the Company. It requires specific disclosures about fair value measurements and disclosures of fair values, some of which replace existing disclosure requirements in other standards.

 

2.7.       Finance Income

Interest income is recognised using the effective interest method.

 

2.8.       Other income

The other income of the Group comprises royalty income. It is measured at the fair value of the consideration received or receivable after deducting discounts and other withholding tax. The royalty income becomes receivable on extraction and sale of the relevant underlying commodity, and by determination of the relevant royalty agreement.

2.9.       Cash and cash equivalents

Cash and cash equivalents comprise cash at hand and current and deposit balances with banks and similar institutions, which are readily convertible to known amounts of cash and which are subject to insignificant risk of changes in value. This definition is also used for the Statement of Cash Flows.

 

2.10.      Trade and other receivables and prepaids

Trade receivables are amounts due from third parties in the ordinary course of business. If collection is expected in one year or less, they are classified as current assets. If not, they are presented as non-current assets.

 

2.11.  Royalty assets at fair value through profit and loss

Royalty financial assets are recognised or derecognised on completion date where a purchase or sale of the royalty is under a contract, and are initially measured at fair value, including transaction costs. All of the Group's royalty financial assets have been designated as at fair value through profit and loss ("FVTPL"). The royalty financial assets at FVTPL are measured at fair value at the end of each reporting period, with any fair value gains or losses recognised in the 'revaluation of royalty financial assets' line item of the income statement.

 

2.12. Investments in subsidiaries

Investments in Group undertakings are stated at cost, which is the fair value of the consideration paid, less any impairment provision.

 

2.13.     Intangible assets

Exploration and evaluation assets

The Group recognises expenditure as exploration and evaluation assets when it determines that those assets hold potential to be successful in finding specific resources. Expenditure included in the initial exploration and evaluation assets relate to the acquisition of rights to explore, topographical, geological, geochemical and geophysical studies, exploratory drilling, trenching, sampling and activities to evaluate the technical feasibility and commercial viability of extracting a resource. Capitalisation of pre-production expenditure ceases when the prospective property is capable of commercial production.

 

Exploration and evaluation assets are recorded and held at cost

Exploration and evaluation assets are not subject to amortisation, as such at the year-end all intangibles held have an indefinite life but are assessed annually for impairment. The assessment is carried out by allocating exploration and evaluation assets to cash generating units ('CGU's'), which are based on specific projects or geographical areas. The CGU's are then assessed for impairment using the criteria specified in IFRS 6.

Whenever the exploration for and evaluation of resources in cash generating units does not lead to the discovery of commercially viable quantities of resources and the Group has decided to discontinue such activities of that unit, the associated expenditures are written off to the Income Statement.

 

Exploration and evaluation assets recorded at fair-value on business combination

Exploration assets which are acquired as part of a business combination are recognised at fair value in accordance with IFRS 3. When a business combination results in the acquisition of an entity whose only significant assets are its exploration asset and/or rights to explore, the Directors consider that the fair value of the exploration assets is equal to the consideration. Any excess of the consideration over the capitalised exploration asset is attributed to the fair value of the exploration asset.

 

2.14.     Impairment of non-financial assets

Assets that have an indefinite useful life, for example, intangible assets not ready to use, are not subject to amortisation and are tested annually for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units). Non-financial assets that suffered impairment are reviewed for possible reversal of the impairment at each reporting date.

 

 

 

 

2.15.     Financial assets

The Group classifies its financial assets into one of the categories discussed below, depending on the purpose for which the asset was acquired. The Group's accounting policy for each category is as follows:

Fair Value through Profit or Loss (FVTPL)

 

Non-derivative financial assets comprising the Group's strategic financial investments in entities not qualifying as subsidiaries or jointly controlled entities. These assets are classified as financial assets at fair value through profit or loss. They are carried at fair value with changes in fair value recognised through the income statement. Where there is a significant or prolonged decline in the fair value of a financial investment (which constitutes objective evidence of impairment), the full amount of the impairment is recognised in the income statement.

 

Due to the nature of these assets being unlisted investments or held for the longer term, the investment period is likely to be greater than 12 months and therefore these financial assets are shown as non-current assets in the Statement of financial position.

Amortised Cost

These assets comprise the types of financial assets where the objective is to hold these assets in order to collect contractual cash flows and the contractual cash flows are solely payments of principal and interest.

The Group's financial assets measured at amortised cost comprise trade and other receivables, convertible debenture receivables and cash and cash equivalents in the consolidated statement of financial position. Cash and cash equivalents include cash in hand, deposits held at call with banks, other short term highly liquid investments with original maturities of three months or less, and - for the purpose of the statement of cash flows - bank overdrafts.

       

(a) Recognition and measurement

Amortised cost

Regular purchases and sales of financial assets are recognised on the trade date at cost - the date on which the Group commits to purchasing or selling the asset. Financial assets are derecognized when the rights to receive cash flows from the assets have expired or have been transferred, and the Group has transferred substantially all of the risks and rewards of ownership. 

 

Fair value through the profit or loss

Financial assets that do not meet the criteria for being measured at amortised cost or FVTOCI are measured at FVTPL. The Group holds equity instruments that are classified as FVTPL as these were acquired principally for the purpose of selling.

       

Financial assets at FTVPL are measured at fair value at the end of each reporting period, with any fair value gains or losses recognised in profit or loss. Fair value is determined by using market observable inputs and data as far as possible. Inputs used in determining fair value measurements are categorised into different levels based on how observable the inputs used in the valuation technique utilised are (the 'fair value hierarchy'):

 

- Level 1: Quoted prices in active markets for identical items (unadjusted)

- Level 2: Observable direct or indirect inputs other than Level 1 inputs

- Level 3: Unobservable inputs (i.e. not derived from market data).

 

The classification of an item into the above levels is based on the lowest level of the inputs used that has a significant effect on the fair value measurement of the item. Transfers of items between levels are recognised in the period they occur.

 

The Group measures its investments in quoted shares using the quoted market price. For shares held in unlisted entities, the share price is based on the current financial and operational performance, as well as taking the potential of future plans into account. Unlisted investments whose fair value cannot be measured reliably, are measured at cost less impairment.

 

(b) Impairment of financial assets

The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original EIR. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.

 

ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).

 

For trade receivables (not subject to provisional pricing) and other receivables due in less than 12 months, the Group applies the simplified approach in calculating ECLs, as permitted by IFRS 9. Therefore, the Group does not track changes in credit risk, but instead, recognises a loss allowance based on the financial asset's lifetime ECL at each reporting date.

Impairment provisions for receivables from related parties and loans to related parties are recognised based on a forward-looking expected credit loss model. The methodology used to determine the amount of the provision is based on whether there has been a significant increase in credit risk since initial recognition of the financial asset, based on analysis of internal or external information. For those where the credit risk has not increased significantly since initial recognition of the financial asset, twelve month expected credit losses along with gross interest income are recognised. For those for which credit risk has increased significantly, lifetime expected credit losses along with the gross interest income are recognised. For those that are determined to be credit impaired, lifetime expected credit losses along with interest income on a net basis are recognised. 

 

The Group considers a financial asset in default when contractual payments are 180 days past due. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows and usually occurs when past due for more than one year and not subject to enforcement activity.

 

At each reporting date, the Group assesses whether financial assets carried at amortised cost are credit impaired. A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

 

(d) Derecognition

The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.

 

On derecognition of a financial asset measured at amortised cost, the difference between the asset's carrying amount and the sum of the consideration received and receivable is recognised in profit or loss. This is the same treatment for a financial asset measured at FVTPL.

 

2.16.     Financial Investments

Non-derivative financial assets comprising the Group's strategic financial investments in entities not qualifying as subsidiaries, associates or jointly controlled entities. These assets are classified as financial assets at fair value through profit or loss. They are carried at fair value with changes in fair value recognised through the income statement. Where there is a significant or prolonged decline in the fair value of a financial investment (which constitutes objective evidence of impairment), the full amount of the impairment is recognised in the income statement. 

Listed investments are valued at closing bid price on 30 June 2024. Unlisted investments that are not publicly traded and whose fair value cannot be measured reliably, are measured at cost less impairment.

 

2.17.    Equity

Equity comprises the following:

·      "Share capital" represents the nominal value of the Ordinary shares;

·      "Share Premium" represents consideration less nominal value of issued shares and costs directly attributable to the issue of new shares;

·      "Reverse asset acquisition reserve" represents the retained losses of the Company before acquisition and the Company equity at reverse acquisition.

·      "Other reserves" represents the foreign currency translation reserve, warrant reserve and share option reserve where;

o  "Foreign currency translation reserve" represents the translation differences arising from translating the financial statement items from functional currency to presentational currency;

o  "Warrant reserve" represents share warrants awarded by the Group;

o  "Share option reserve" represents share options awarded by the Group;

·      "Retained deficit or losses" represents retained losses.

 

2.18.     Share based payments

The Group operates an equity-settled, share-based scheme under which the Group receives services from employees or contractors as consideration for equity instruments (options and warrants) of the Group. The fair value of the third-party suppliers' services received in exchange for the grant of the options is recognised as an expense in the Income Statement or charged to equity depending on the nature of the service provided. The value of the employee services received is expensed in the Income Statement and its value is determined by reference to the fair value of the options granted:

•     including any market performance conditions;

•    excluding the impact of any service and non-market performance vesting conditions (for example, profitability or sales growth targets, or remaining an employee of the entity over a specified time period); and

•     including the impact of any non-vesting conditions.

The fair value of the share options and warrants are determined using the Black Scholes valuation model.

Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. The total expense or charge is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each reporting period, the entity revises its estimates of the number of options that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in the Income Statement or equity as appropriate, with a corresponding adjustment to a separate reserve in equity.

When the options are exercised, the Group issues new shares. The proceeds received, net of any directly attributable transaction costs, are credited to share capital (nominal value) and share premium when the options are exercised.

 

2.19.     Taxation

No current tax is payable for the year ended 30 June 2024 in view of the losses to date for all entities in the Group (2023: £12,178).

 

Deferred tax is recognised for using the liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill; deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.

 

In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets (including those arising from investments in subsidiaries), are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised.

 

Deferred income tax assets are recognised on deductible temporary differences arising from investments in subsidiaries only to the extent that it is probable the temporary difference will reverse in the future and there is sufficient taxable profit available against which the temporary difference can be used.

 

Deferred tax liabilities will be recognised for taxable temporary differences arising on investments in subsidiaries except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

 

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

 

Deferred tax is calculated at the tax rates (and laws) that have been enacted or substantively enacted by the statement of financial position date and are expected to apply to the period when the deferred tax asset is realised or the deferred tax liability is settled.

 

Deferred tax assets and liabilities are not discounted.

 

3.   Financial risk management

 

The Group's activities expose it to a variety of financial risks: market risk (foreign currency risk, price risk and interest rate risk), credit risk and liquidity risk. The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance. None of these risks are hedged.

 

Risk management is carried out by the Canadian based management team under policies approved by the Board of Directors.

 

 

3.1.Treasury policy and financial instruments

During the years under review, the financial instruments were cash and cash equivalents, shares in listed and unlisted companies and other receivables which were or will be required for the normal operations of the Group.

 

The Group operates informal treasury policies which include ongoing assessments of interest rate management and borrowing policy. The Board approves all decisions on treasury policy.

 

The risks arising from the Group's financial instruments are liquidity and interest rate risk. The Directors review and agree policies for managing these risks and they are summarised below:

 

Unlisted investments

The Company is required to make judgments over the carrying value of investments in unquoted companies where fair values cannot be readily established and evaluate the size of any impairment required. It is important to recognise that the carrying value of such investments cannot always be substantiated by comparison with independent markets and, in many cases, may not be capable of being realised immediately. Management's significant judgement in this regard is that the value of their investment represents their cost less previous impairment.

 

Market risk & foreign currency risk

The Group is exposed to market risk, primarily relating to interest rate and foreign exchange movements. The Group does not hedge against market or foreign exchange risks as the exposure is not deemed sufficient to enter into forwards or similar contracts.

 

Credit risk

Credit risk arises from cash and cash equivalents as well as outstanding receivables. The amount of exposure to any individual counter party is subject to a limit, which is assessed by the Board.

 

The Group considers the credit ratings of banks in which it holds funds in order to reduce exposure to credit risk.

 

Liquidity risk and interest rate risk

The Group seeks to manage financial risk, to ensure sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably. This is achieved by the close control by the Directors of the Group in the day-to-day management of liquid resources. Cash is invested in deposit accounts which provide a modest return on the Group's resources whilst ensuring there is limited risk of loss to the Group.

 

3.2.       Capital risk management

The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

 

4.   Critical accounting estimates and judgements

The preparation of the Financial Information in conformity with UK adopted IASs requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Financial Information and the reported amount of expenses during the year. Actual results may vary from the estimates used to produce this Financial Information.

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Significant items subject to such estimates and assumptions include, but are not limited to:

Share based payment transactions

The Group has made awards of options and warrants over its unissued share capital to certain Directors and employees as part of their remuneration package. Certain warrants have also been issued to shareholders as part of their subscription for shares and to suppliers for various services received.

The valuation of these options and warrants involves making a number of critical estimates relating to price volatility, future dividend yields, expected life of the options and forfeiture rates.

Classification of royalty arrangements: initial recognition and subsequent measurement

The Directors must decide whether the Group's royalty arrangements should be classified as:

·           Intangible assets in accordance with IAS 38 Intangible Assets; or

·           Financial assets in accordance with IFRS 9 Financial Instruments

The Directors use the following selection criteria to identify the characteristics which determine which accounting standard to apply to each royalty arrangement:

Type 1 - Intangible assets: Royalties, are classified as intangible assets by the Group. The Group considers the substance of a simple royalty to be economically similar to holding a direct interest in the underlying mineral asset. Existence risk (the commodity physically existing in the quantity demonstrated), production risk (that the operator can achieve production and operate a commercially viable project), timing risk (commencement and quantity produced, determined by the operator) and price risk (returns vary depending on the future commodity price, driven by future supply and demand) are all risks which the Group participates in on a similar basis to an owner of the underlying mineral licence. Furthermore, in a royalty intangible, there is only a right to receive cash to the extent there is production and there are no interest payments, minimum payment obligations or means to enforce production or guarantee repayment. These are accounted for as intangible assets under IAS-38.

Type 2 - Financial royalty assets (royalties with additional financial protection): In certain circumstances where the risk is considered too high, the Group will look to introduce additional protective measures. This has taken the form of minimum payment terms. Once an operation is in production, these mechanisms generally fall away such that the royalty will display identical characteristics and risk profile to the intangible royalties; however, it is the contractual right to enforce the receipt of cash which results in these royalties being accounted for as financial assets under IFRS 9. There are currently no royalties classified as financial royalty assets.

 

Estimated impairment of convertible loan notes receivable & Convertible debenture receivables

 

Anglo African Minerals Plc ('AAM')

The Group has assessed whether the AAM convertible loan notes receivable which has been previously fully impaired in the prior year, should remain impaired in the current year or be reversed. They have reassessed this asset and determined that there are no conditions to reverse the impairment.

 

G2 Energy Corp. ("G2")

The Group also assessed whether the G2 convertible debenture receivable should be impaired and based on the current production levels and the programme at the Masten Unit Energy Project, they have determined it should not be impaired as G2, through the funding from the Company, now have the funds required to undertake the exploration activity and advance the project. The terms of the debenture are still being met by both parties and G2 are expected to pay the necessary interest payments. The directors assessed this debenture in accordance with IFRS standards and concluded it is a financial asset accounted for as amortised cost as the financial asset is held within a business model with the objective to hold and collect the contractual cash flows which is in the form of interest and principal payments. As part of the debenture agreement, the Group received a 3.25% Overriding Royalty Interest in the project which has limited production and revenues. In accordance with IFRS the directors have assessed the royalty interest and accounted for it as intangible assets in accordance with IAS 38 because there is only a right to receive cash to the extent there is production and there are no interest payments, minimum payment obligations or means to enforce production or guarantee repayment. These are accounted for as intangible assets under IAS 38. The directors considered the fair value of the royalty assets which they receive in exchange as part of the debenture agreement for which they did not pay any consideration. Fair value is determined based on discounted cash flow models (and other valuation techniques) using assumptions considered to be reasonable and consistent with those that would be applied by a market participant. The determination of assumptions used in assessing fair values is subjective and the use of different valuation assumptions could have a significant impact on financial results. The current royalty covers a very small production site. During the year ended 30 June 2024, £39,000 was received, with a total of £98,000 being received to date from this royalty. Following their assessment, the directors concluded that the fair value of the royalty agreement was not material and has not been recognised as intangible asset. The group is in regular communication with G2 and is monitoring the results of its exploration activities that will be undertaken as the result of the funding by the Group to G2.

 

 

 

Texas Legacy Exploration LLC ("Texas Legacy")

The Group assessed whether the Texas Legacy convertible debenture receivable should be impaired. After review from management, it was agreed that the debenture be impaired in full as it was no longer recognised as a debenture and was converted to royalty. As a result of the impairment, the initial $600k payment was no longer considered payable. However, royalty payments will be received should production commence in the future.

Unlisted investments

The Group is required to make judgments over the carrying value of investments in unquoted companies where fair values cannot be readily established and evaluate the size of any fair value movement required. It is important to recognise that the carrying value of such investments cannot always be substantiated by comparison with independent markets and, in many cases, may not be capable of being realised immediately. Management's significant judgement in this regard is that the value of their investment represents the entities financial and operational performance, as well as their future potential. This valuation method was considered the most appropriate by management due to the limited information available related to the unlisted investments as at 30 June 2024. Management have assessed whether any fair value movement on the unlisted investments is required at 30 June 2024 and have fully impaired one of their investments due to the lack of reported activity and updates from the company.

 

Recovery of other receivables

Included in other receivables is an amount of £140,000 as at 30 June 2024 in respect of unpaid ordinary share capital issued on 3 June 2021. The Directors plan to take action to recover the amount owed and believe that the amount will be recovered in full in due time, but because this outcome is not certain and the balance has been owed for an extended period, a provision for bad debt for the full amount has been implemented. This was recognised in the prior year ended 30 June 2023 and still deemed appropriate to include in the year ended 30 June 2024.

 

Valuation of exploration and evaluation assets

Exploration and evaluation costs have a carrying value of 30 June 2024 of £80,870 (2023: £236,518). Such assets have an indefinite useful life as the Group has the right to renew exploration licenses or options and the asset is only amortised once extraction of the resource commences. The value of the Group's exploration and evaluation expenditure will be dependent upon the success of the Group in discovering economic and recoverable resources, especially in the countries of operation where political, economic, legal, regulatory and social uncertainties are potential risk factors. The future revenue flows relating to these assets is uncertain and will also be affected by competition, relative exchange rates and potential new legislation and related environmental requirements. The Group's ability to continue its exploration programs and develop its projects is dependent on future fundraisings. The ability of the Group to continue operating within some of the jurisdictions contemplated by management is dependent on a stable political environment which is uncertain based on the history of the country. This may also impact the Group's legal title to assets held which would affect the valuation of such assets. There have been no changes made to any past assumptions.

 

The Directors have undertaken a review to assess whether circumstances exist which could indicate the existence of impairment as follows:

 

•  The Group no longer has title to mineral leases or the title will expire in the near future and is not expected to be renewed.

•  A decision has been taken by the Board to discontinue exploration due to the absence of a commercial level of reserves.

• Sufficient data exists to indicate that the costs incurred will not be fully recovered from future development and participation.

• No further exploration or evaluation is planned or budgeted.

Following their assessment, the Directors concluded that an impairment charge of £107,684 (2023: £12,636) was necessary on the Northern Treasure property because the claims on the property had lapsed, and the Directors agreed that it shouldn't be renewed.