TIDMWSBN

RNS Number : 9161Q

Wishbone Gold PLC

30 June 2022

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR

Please click the following link to view the full set of the Report and Accounts along with the figure(s) and illustration(s) included in the below announcement:

https://wishbonegold.com/wp-content/uploads/2022/06/WSBN-RA-Final-Results-for-the-year-ended-31-December-2021-p3kg.pdf

30 June 2022

Wishbone Gold Plc

("Wishbone" or the "Company")

Wishbone Gold Plc / Index: AIM: WSBN / Sector: Natural Resources / AQSE: WSBN

Final Results for the Year ended 31 December 2021

Wishbone Gold Plc (AIM: WSBN, AQSE: WSBN), announces its final results for the year ended 31 December 2021. The Chairman's Statement and Financial Statement are set out below and the full Report and Accounts is being sent to Shareholders and is available on the Company's website www.wishbonegold.com .

Chairman's Statement

Dear Shareholders,

In 2021 we continued the expansion of our exploration portfolio which begun in 2020. We acquired the Cottesloe EPM in Western Australia ("WA") in March and were granted a southern extension to the Wishbone EPMs in Queensland ("QLD"), titled Wishbone VI, in August.

This took our portfolio of properties to a total of 159.19 sqkm in Western Australia and a total of 174 sqkm in the Wishbone project group near Ravenswood in Queensland with a further 37.2 sqkm at White Mountains further north.

After COVID related issues in Australia throughout all of the fiscal year 2021, I am very pleased to report that we are now drilling our main exploration targets at Red Setter in Western Australia and our Wishbone tenements in Queensland.

Exploration in 2021

Western Australia

During the year we completed far less exploration than we anticipated due to the continued sporadic lock downs across Australia. One of the major hinderances was the closure of the WA border with the rest of Australia on 5(th) April 2020. At the time no one imagined that this border would remain closed for almost two years (697 days to be precise) until 3(rd) March 2022. This prevented the movement of miners and equipment into or out of WA throughout this period.

In addition there were intermittent lockdowns in various parts of WA during the two years of closed borders which in our case critically hampered the Heritage Surveys which we needed to undertake on our properties before substantial exploration activity could occur.

The result of 2021 was that although we had programs of works approved at the government level for all the WA properties these could not be started. In December we managed a limited amount of drilling at Red Setter but equipment problems and restrictions on movement meant that the full program did not start until June 2022. Drilling is now underway and we will report as the analysis comes through.

Figure 1: Drilling underway at Red Setter Project in WA - click first link above to view

Figure 2: Drill in Action at the Wishbone Project in QLD - click first link above to view

Queensland

QLD was not as bad as WA but exploration was still severely hampered. It was thus excellent news when Dr Simon Beams, the CEO and Chief Geologist of Terra Search, chose to use the work done for us on the Wishbone group of tenements for his presentation to the AusIMM Conference in Cairns in May last year. We have subcontracted our geological and exploration work to Terra Search for many years and we continue to work with them now in WA as well as Queensland.

The focus of Dr Beams' presentation was that recent geochemical and ground magnetic results at Wishbone Gold's Halo Prospect compares very favourably to the geological setting and geochemical association of the nearby Ravenswood Gold Deposit (total production of 5 million plus ounces gold). These conclusions were reached by using new analytical techniques to reprocess historic data as well as adding new exploration work over the last 12 months.

The full presentation is available on our website at: https://wishbonegold.com/wp-content/uploads/2021/06/WSBN_Beams_FNQ_Cairns_AusIMM_210527_9m2l.pdf

2022 led to gradual reopening

Following the WA reopening in March we managed to get Heritage surveys completed and Red Setter and commenced surveys at Cottesloe. We also completed all necessary Heritage surveys in Queensland. The completion of these enabled drilling to restart at Red Setter and to start at Wishbone II in June.

The two prospects are vastly different in that whilst the QLD area has mineralization near to surface in WA our drill targets start at over 100 metres in depth. The latter requires complex drilling and management, and we are fortunate to have DDSR Drilling Australia operating for us who have unique combination drills which can do both rotary RC and diamond drilling - something that is necessary to drill through the upper sedimentary units before hitting basement. We look forward to announcing the results from both these programs as soon as the data has been analysed.

Figure 3: Wishbone EPMs in QLD -- click first link above to view

Figure 4: Exploration Properties Location Map in WA- click first link above to view

Management Changes

In February 2021 David ("Sam") Hutchins joined the board as a non-executive director. I have known Sam for many years and he brings excellent experience to our board as a natural resources fund manager and in his role as a Member of the FTSE Gold Mines Index Committee.

In October 2021 Jack (Kaiyi) Sun joined the company as Group CFO. In addition to being a qualified accountant Jack has degrees from the Said Business School Oxford and the Judge Business School Cambridge. I have worked with Jack for many years, and it is a pleasure to have him back on the team.

Financial Review and Financing

At the end of the period under review, the accounts show that Wishbone held cash balances totalling GBP3,002,547 (2020: GBP1,602,099). Administrative costs, excluding interest during the year, were GBP1,194,053 (2020: GBP814,944).

The Company continues its strategy of exploration on its properties in Australia.

In conclusion I would like to thank you all: staff, shareholders and advisers for your hard work and support. We will continue to announce news as soon as we are allowed by regulations to do so.

___________________________

R O'D Poulden

Chairman

30 June 2022

For further information, please contact:

 
 Wishbone Gold Plc 
 Richard Poulden, Chairman               Tel: +971 4 584 
                                          6284 
 
 Beaumont Cornish Limited 
 (Nominated Adviser and AQUIS Exchange 
  Corporate Adviser) 
 Roland Cornish/Rosalind Hill Abrahams   Tel: +44 20 7628 
                                          3396 
 
 
 Peterhouse Capital Limited 
 (Broker) 
 Lucy Williams and Duncan Vasey          Tel: +44 20 7469 
                                          0930 
 

Wishbone Gold Plc

Consolidated Income Statement

for the year ended 31 December 2021

 
                                    Notes           2021             2020 
                                                     GBP              GBP 
 Discontinued Operations 
 Revenue                                               -      1,091,860 
 
 Cost of sales                                         -    (1,083,748) 
 
 Gross profit                                          -          8,112 
 
 Interest income                                  17,605              - 
 Administration expenses              5          (9,901)       (25,767) 
 Write-off of bad debts              15                -       (38,043) 
 
 Income/(loss) from discontinued 
  operations                                       7,704       (55,698) 
                                           -------------  ------------- 
 
 Continuing Operations 
 
 Other income                                          -         49,888 
 Interest income                     21           16,340              - 
 
 Administration expenses              5      (1,184,152)      (789,177) 
                                           -------------  ------------- 
 
 Operating loss                              (1,167,812)      (739,289) 
 
 Gain on settlement of liability     13                -        154,941 
 Impairment of goodwill              10                -      (145,885) 
 Foreign exchange (loss)/gain                   (80,049)         99,005 
 Finance costs                                         -        (7,153) 
                                           -------------  ------------- 
 
 Loss from continuing operations 
  - before taxation                          (1,247,861)      (638,381) 
 
 Tax on loss                                           -              - 
                                           -------------  ------------- 
 
 Loss from continuing operations             (1,247,861)      (638,381) 
 
 Loss for the financial year                 (1,240,157)      (694,079) 
 
   Loss per share: 
   Basic and diluted (pence)                     (0.746)        (0.909) 
 
 
 

There are no recognised gains or losses other than disclosed above and there have been no discontinued activities during the year.

The notes on pages 32 to 56 form part of these financial statements.

Consolidated Statement of Financial Position

as at 31 December 2021

 
 
                                  Notes           2021           2020 
                                                   GBP            GBP 
 
 
 Current assets 
 Trade and other receivables        8           33,135        423,820 
 Cash and cash equivalents                   3,002,547      1,602,099 
 
                                             3,035,682      2,025,919 
                                         -------------  ------------- 
 
 Non-current assets 
 Property, plant and equipment 
  - net                             9                -              - 
 Goodwill                          10                -              - 
 Other intangible assets           10        1,460,055      1,020,930 
 
                                             1,460,055      1,020,930 
                                         -------------  ------------- 
 
 Total assets                                4,495,737      3,046,849 
                                         =============  ============= 
 
 Current liabilities               13          135,752        278,484 
 
 Equity 
 Share capital                     14        2,991,216      2,967,390 
 Share premium                              11,698,892      8,943,833 
 Share payment reserve                          72,987              - 
 Translation adjustment                      (411,419)      (411,419) 
 Foreign exchange reserve                    (212,258)      (192,163) 
 Accumulated losses                        (9,779,433)    (8,539,276) 
                                             4,359,985      2,768,365 
 
 Total equity and liabilities                4,495,737      3,046,849 
                                         =============  ============= 
 

The financial statements were approved by the board and authorised for issue on 30 June 2022 and signed on its behalf by:

A.D. Gravett R O'D Poulden

Director Director

The notes on pages 32 to 56 form part of these financial statements.

Company Statement of Financial Position

as at 31 December 2021

 
 
                                 Notes           2021           2020 
                                                  GBP            GBP 
 
 
 Current assets 
 Trade and other receivables       8            7,584      1,811,879 
 Loans                            15        2,398,756      1,335,107 
 Cash and cash equivalents                  2,430,728              - 
 
                                            4,837,068      3,146,986 
                                        -------------  ------------- 
 
 Non-current assets 
 Investments                      11          104,105        104,105 
 
                                              104,105        104,105 
                                        -------------  ------------- 
 
 Total assets                               4,941,173      3,251,091 
                                        =============  ============= 
 
 Current liabilities              13           92,607        190,616 
 
 Equity 
 Share capital                    14        2,991,216      2,967,390 
 Share premium                    14       11,698,892      8,943,833 
 Share payment reserve            14           72,987              - 
 Translation adjustment           14        (411,419)      (411,419) 
 Accumulated losses                       (9,503,110)    (8,439,329) 
                                        -------------  ------------- 
                                            4,848,566      3,060,475 
 
 Total equity and liabilities               4,941,173      3,251,091 
                                        =============  ============= 
 

The financial statements were approved by the board and authorised for issue on 30 June 2022 and signed on its behalf by:

A.D. Gravett R O'D Poulden

Director Director

The notes on pages 32 to 56 form part of these financial statements.

Consolidated Statement of Cash Flows

for the year ended 31 December 2021

 
                                              Notes          2021         2020 
                                                              GBP          GBP 
 Cash flows from operating activities 
                                                      ( 1,240,157    ( 694,079 
 Loss before tax                                                )            ) 
 Reconciliation to cash generated from 
  operations: 
      Foreign exchange (gain)/loss                         80,049     (99,005) 
      Interest expense                                          -        7,153 
      Impairment of goodwill                   10               -      145,885 
      Write-off of bad debts                   15               -       38,043 
      Write-off of receivables                  5               -       10,937 
      Depreciation                              9               -       19,487 
      Administrative expenses converted 
       into ordinary shares                    14               -      168,536 
      Administrative expenses under share 
       option scheme                                       72,987            - 
      Gain on settlement of liability          13               -    (154,941) 
                                                                   ----------- 
 Operating cash flow before changes 
  in working capital                                  (1,087,121)    (557,984) 
                                                     ------------ 
 Decrease in receivables                                  325,420       86,943 
 (Decrease)/increase in payables                        (164,720)      314,639 
                                                                   ----------- 
 Net cash flows used in operations                      (926,421)    (156,402) 
                                                     ------------ 
 
 Cash flows from an investing activity 
 Additions of intangible assets                10       (217,125)    (368,077) 
 
 Net cash flows used in investing 
  activities                                            (217,125)    (368,077) 
                                                     ------------ 
 
 Cash flows from a financing activity 
 Issue of shares for cash                      14       2,556,885    2,355,200 
 
 Net cash flows from financing activities               2,556,885    2,355,200 
                                                     ------------ 
 
 Effects of exchange rates on cash 
  and cash equivalents, including effects 
  of foreign exchange reserve                            (12,891)    (241,570) 
                                                     ------------  ----------- 
 
 Net increase in cash and cash equivalents              1,400,448    1,589,151 
 Cash and cash equivalents at 1 January                 1,602,099       12,948 
                                                     ------------  ----------- 
 Cash and cash equivalents at 31 December               3,002,547    1,602,099 
                                                     ============  =========== 
 

The notes on pages 32 to 56 form part of these financial statements.

Company Statement of Cash Flows

for the year ended 31 December 2021

 
                                             Notes          2021          2020 
                                                             GBP           GBP 
 Cash flows from operating activities 
 Loss before tax                                     (1,063,781)   (1,092,676) 
 Reconciliation to cash generated 
  from operations: 
      Foreign exchange (gain)/loss                        80,049      (99,005) 
      Interest expense                                         -         7,153 
      Provision for impairment of related 
       party loans                            21               -       497,104 
      Write-off of receivables                 5               -        10,937 
      Impairment of investments               11               -       194,183 
      Gain on settlement of liability         13               -     (154,941) 
      Administrative expenses converted 
       into ordinary 
       shares                                  14              -       168,538 
      Administrative expenses under share 
       option scheme                                      72,987             - 
                                                                  ------------ 
 Operating cash flow before changes 
  in working capital                                   (910,745)     (468,707) 
 Decrease/(increase) in receivables                      897,381   (1,911,762) 
 (Decrease)/increase in payables                       (119,997)       249,936 
 
 Net cash flows used in operations                     (133,361)   (2,130,533) 
                                                    ------------  ------------ 
 
 Cash flows from financing activities 
 Issue of shares for cash                     14       2,556,885     2,355,200 
 
 Net cash flow from financing activities               2,556,885     2,355,200 
                                                    ------------  ------------ 
 
 Effects of exchange rates on cash 
  and cash equivalents                                     7,204     (227,922) 
 
 Net increase/(decrease) in cash 
  and cash equivalents                                 2,430,728       (3,255) 
 Cash and cash equivalents at 1 January                        -         3,255 
                                                    ------------  ------------ 
 Cash and cash equivalents at 31 
  December                                             2,430,728             - 
                                                    ------------  ------------ 
 

The notes on pages 32 to 56 form part of these financial statements.

Notes to the Consolidated Financial Statements

for the year ended 31 December 2021

1. General Information

The consolidated financial statements of Wishbone Gold Plc (the "Company") and its subsidiaries (the "Group") for the year ended 31 December 2021 were authorised for issue in accordance with a resolution of the Company's directors on 30 June 2022.

The Company was incorporated in Gibraltar under the name of Wishbone Gold Plc as a public company under the Gibraltar Companies Act 2014. The authorised share capital of the Company is GBP8,000,000 divided into 8,000,000,000 shares of GBP0.001 each. The registered office is located at Suite 16, Watergardens 5, Waterport Wharf GX11 1AA , Gibraltar.

In 2021 the Group continued the expansion of its exploration portfolio which begun in 2020. The Group acquired the Cottesloe EPM in Western Australia ("WA") in March and were granted a southern extension to the Wishbone EPMs in Queensland ("QLD"), titled Wishbone VI, in August.

This took the Group's portfolio of properties to a total of 159.19 sqkm in Western Australia and a total of 174 sqkm in the Wishbone project group near Ravenswood in Queensland with a further 37.2 sqkm at White Mountains further north.

Further share allotments have been made as disclosed in note 14.

2. Accounting Policies

Basis of preparation

The financial statements of the Group have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union ("IFRS") applied in accordance with the provisions of the Gibraltar Companies Act 2014 ("the Act").

In accordance with the Gibraltar Companies Act 2014, the individual statement of financial position of the Company has been presented as part of these financial statements. The individual statement of comprehensive income has not been presented as part of these financial statements as permitted by Section 288 of the Act. The individual statement of comprehensive income of the Company shows a loss for the year of GBP1,603,781 (2020: GBP1,092,676).

IFRS is subject to amendment and interpretation by the International Accounting Standards Board ("IASB") and the International Financial Reporting Interpretations Committee ("IFRIC"). The accounts have been prepared on the basis of the recognition and measurement principles of IFRS that are applicable for the year commencing 1 January 2020.

The consolidated financial statements have been prepared under the historical cost convention. The principal accounting policies set out below have been consistently applied to all years presented other than changes from the new and amended standards and interpretations effective from 1 January 2021.

Notes to the Consolidated Financial Statements

for the year ended 31 December 2021

2. Accounting Policies - continued

Going concern

The Group has incurred losses during the financial years ended 31 December 2021 and 31 December 2020.

In June 2020, driven in part by the lack of air freight and travel caused by COVID-19 the Group fundamentally changed its strategy. It suspended all gold trading operations and re-focused on exploration in Australia. Initially this was on the existing properties in Queensland but during the latter part of 2020 and early 2021 the group took options over and acquired additional properties in Western Australia.

COVID-19 remains an unpredictable factor in all company operations worldwide and the Company is no exception to this.

The presentation of this new strategy was received extremely well by the markets with the Company's market capitalization rising from GBP1.25m in June 2020 to over GBP30m by June 2021. This has enabled the Company to raise GBP2.57m in 2021 (2020: GBP3.57m).

The Directors have reviewed the financial condition of the Group since 31 December 2021 and have considered the Group's cash projections and funding plan for the 12 months from the date of approval of these financial statements. The Group's current cash situation without any additional funding will not only sustain the Company for at least the next twelve months but allow the Group to continue its aggressive exploration program in Australia. This can of course be adjusted in accordance with the results. All exploration is inherently unpredictable as to the final outcome.

The Company has also demonstrated that it has the ability to raise capital for its new strategy that it may require to accelerate the exploration program if it desires. At the date of approval of these financial statements, the Company is currently debt free.

The Board of Directors is confident that the Group has access to sufficient funds to enable the Group to meet its liabilities as and when they fall due for at least the next twelve months and also to continue full operations in exploration.

Basis of consolidation

The Group's consolidated financial statements incorporate the financial statements of the Company and its subsidiaries prepared at 31 December each year. Control is achieved where the company has power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the Group.

All intra-group transactions and balances and any unrealised gains and losses arising from intra-group transactions are eliminated in preparing the consolidated accounts.

In the parent company financial statements, the investment in the subsidiaries is accounted for at cost.

Functional and presentational currencies

The individual financial information of the entity is measured and presented in the currency of the primary economic environment in which the entity operates (its functional currency).

The Company's functional currency has historically been the United States Dollar ("US$"), which was also the Company's presentation currency.

As at 1 January 2021, the functional currency of the Company is the Pounds Sterling ("GBP"). The Board of Directors considered that the Group's source of funding is predominantly GBP denominated. As a result, the Directors have determined that GBP is the currency which best reflects the underlying transactions, events and conditions relevant to the Group with effect from 1 January 2021 ("the effective date of the change").

Notes to the Consolidated Financial Statements

for the year ended 31 December 2021

2. Accounting Policies - continued

Functional and presentational currencies - continued

In accordance with IAS 21 'The Effect of Changes in Foreign Exchange Rates', the effect of a change in functional currency is accounted for prospectively. All items were translated at the exchange rate on the effective date of the change, being US$ 0.7321 to GBP1. The resulting translated amounts for non-monetary items are treated as their historical cost. Share capital and premium were translated at the historic rates prevailing at the dates of the underlying transactions.

The effects of translating the Company's financial results and financial position into GBP were recognized in the foreign currency translation reserve.

The financial statements are presented in GBP including the comparative figures. All amounts are recorded in the nearest GBP, except when otherwise indicated.

Business combinations and goodwill

On acquisition, the assets and liabilities, and contingent liabilities of subsidiaries are measured at their fair values at the date of acquisition. Any excess of cost of acquisition over the fair value of identifiable net assets acquired is recognised as goodwill. Any deficiency of the cost of acquisition below the fair value of identifiable net assets acquired (i.e., discount on acquisition) is credited to the income statement in the period of acquisition. Goodwill arising on consolidation is recognised as an asset and reviewed for impairment at least annually. Any impairment is recognised immediately in the income statement and is not subsequently reversed.

Exploration and evaluation assets

Exploration and evaluation expenditure in relation to separate areas of interest for which rights of tenure are current is carried forward as an asset in the statement of financial position where it is expected that the expenditure will be recovered through the successful development and exploitation of an area of interest, or by its sale; or exploration activities are continuing in an area and activities have not reached a stage which permits a reasonable estimate of the existence or otherwise of economically recoverable reserves. Where a project or an area of interest has been abandoned, the expenditure incurred thereon is written off in the year in which the decision is made. Exploration and expenditure ceases after technical feasibility and commercial viability of extracting a mineral resource are demonstrable.

Property, plant and equipment

Property, plant and equipment is stated at cost less accumulated depreciation. Cost is depreciated on a straight-line basis over their expected useful lives as follows:

   Machinery                            15% per annum 

Investments

Investments in group undertakings

Investments in group undertakings are measured at cost less any impairments arising should the fair value after disposal costs be lower than cost.

Notes to the Consolidated Financial Statements

for the year ended 31 December 2021

2. Accounting Policies - continued

Impairment of non-financial assets

At each year end date, the Group reviews the carrying amounts of its non-financial assets, which comprise of investments, tangible and intangible assets, to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the assets is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less cost to sell, and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset, for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately, unless the relevant asset is carried at revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash generating unit) in prior periods. A reversal of impairment loss is recognised in the income statement immediately.

During the year, the Group did not recognize any impairment of goodwill GBPNil (2020: GBP145,885) since the goodwill value was taken to zero in 2020. Furthermore, in 2021, the Company did not recognise additional impairment of its related party loans of GBPNil (2020: GBP466,750).

Foreign currencies

The consolidated financial statements are presented in Gibraltar Pounds Sterling ("GBP"), the presentation and functional currency of the Company. All values are rounded to the nearest GBP. Transactions denominated in a foreign currency are translated into GBP at the rate of exchange at the date of the transaction or using the average rate for the financial year. At the year-end date, monetary assets and liabilities denominated in foreign currency are translated at the rate ruling at that date. All exchange differences are dealt with in the income statement.

On consolidation, the assets and liabilities of foreign operations which have a functional currency other than GBP are translated into GBP at foreign exchange rates ruling at the year-end date. The revenues and expenses of these subsidiary undertakings are translated at average rates applicable in the period. All resulting exchange differences are recognised as a separate component of equity. Foreign exchange gains or losses arising from a monetary item receivable from or payable to a foreign operation are recognised in the consolidated statement of comprehensive income and disclosed as a separate component of equity, such foreign exchange gains or losses are reclassified from equity to the income statement on disposal of the net foreign operation. The same foreign exchange gains or losses are recognised in the stand-alone income statements of either the parent or the foreign operation.

Notes to the Consolidated Financial Statements

for the year ended 31 December 2021

2. Accounting Policies - continued

Foreign currencies - continued

In the statement of cash flows, cash flows denominated in foreign currencies are translated into the presentation currency of the Group at the average exchange rate for the year or the prevailing rate at the time of the transaction where more appropriate.

The closing exchange rate applied at the year-end date was AUD 1.8624 per GBP1 (2020: AUD 1.1.7752). The average exchange rate applied at the year-end date was AUD 1.8315 per GBP1 (2020: AUD 1.8611).

The closing exchange rate applied at the year-end date was AED 4.9710 per GBP1 (2020: AED 5.0508). The average exchange rate applied at the year-end date was AED 5.0493 per GBP1 (2020: AED 4.7162).

Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker as required by IFRS 8 "Operating Segments". The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors.

The accounting policies of the reportable segments are consistent with the accounting policies of the Group as a whole. Segment loss represents the loss incurred by each segment without allocation of foreign exchange gains or losses, investment income, interest payable and tax. This is the measure of loss that is reported to the Board of Directors for the purpose of the resource allocation and the assessment of the segment performance.

When assessing segment performance and considering the allocation of resources, the Board of Directors review information about segment assets and liabilities. For this purpose, all assets and liabilities are allocated to reportable segments (note 4).

Revenue recognition

The Group earns its revenues only from gold trading, which is recognised at a point in time. Revenue is recognised when control of a good or service transfers to a customer. A new five-step approach is applied before revenue can be recognised:

identify contracts with customers;

identify the separate performance obligation;

determine the transaction price of the contract;

allocate the transaction price to each of the separate performance obligations; and

recognise the revenue as each performance obligation is satisfied.

The revenue recognition under IFRS 15 is similar to how the Company has previously accounted for its revenues under the old revenue accounting standards.

Trade and other receivables

Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost less provision for impairment.

Notes to the Consolidated Financial Statements

for the year ended 31 December 2021

2. Accounting Policies - continued

Impairment of financial assets

The Group has adopted the expected credit loss model ("ECL") in IFRS 9. The ECL is to be measured through a loss allowance at an amount equal to:

-- the 12-month expected credit losses (ECL that result from those default events on the financial instrument that are possible within 12 months after the reporting date); or

-- full lifetime expected credit losses (ECL that result from all possible default events over the life of the financial instrument).

The Group only holds cash and trade and other receivables with no financing component and therefore has adopted an approach similar to the simplified approach to ECLs.

Provision for impairment (or the ECL) is established based from full lifetime ECL and when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivable. The amount of the impairment is the difference between the asset's carrying amount and the present value of the estimated future cash flows, discounted at effective interest rate.

Cash and cash equivalents

Cash and cash equivalents comprise on demand deposits held with banks.

Trade and other payables

Trade payables are initially measured at fair value, and subsequently measured at amortised cost, using the effective interest rate method.

Taxation

Current tax is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantively enacted by the year end date. Deferred taxation is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, if the deferred tax arises from the 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, it is not accounted for. Deferred tax is determined using tax rates and laws that have been enacted (or substantively enacted) by the year end date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.

Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of the entity after deducting all of its liabilities. Equity instruments issued by a group entity are recorded at the proceeds received, net of any direct issue costs.

Notes to the Consolidated Financial Statements

for the year ended 31 December 2021

2. Accounting Policies - continued

Share based payments

The Company has historically issued warrants and share options in consideration for services. The fair value of the warrants have been treated as part of the cost of the service received and is charged to share premium with a corresponding increase in the share based payment reserve. All subscriber warrants issued in the prior years had already lapsed, thus the share based payment reserve was transferred to retained earnings. In 2021 and 2020, the Group issued warrants (see note 16) as part of the total consideration for the acquisition of exploration licenses (see note 10), for which the value attributable to the warrants is GBPNil.

Standards, amendments and interpretations to existing standards that are effective in 2021

The following new standards, amendments and interpretations to existing standards have been adopted by the Group during the year but have had no significant impact on the financial statements of the Group:

Interest rate benchmark reform - Phase 2, Amendments to IFRS 9, IAS 39,, IFRS 7, IFRS 4 and IFRS 16. The amendment provide temporary reliefs which address the financial reporting effects when an interbank offered rate (IBOR) is replaced with an alternative nearly risk-free interest rate (RFR). The amendment had no impact on the consolidated financial statements of the Group. The Group intends to use the practical expedients in future periods if they become applicable.

COVID-19 related rent concessions beyond 30 June 2021, Amendments to IFRS 16. On 28 May 2020, the IASB issued Covid-19 Related Rent Concessions - amendments to IFRS 16 Leases. The amendments provide relief to lessees from applying IFRS 16 guidance on lease modification accounting for rent concessions arising as a direct consequence of the Covid-19 pandemic. As a practical expedient, a lessee may elect not to assess whether a Covid-19 related rent concession from a lessor is a lease modification. The amendment was intended to apply until 30 June 2021, but as the impact of the Covid-19 pandemic is continuing, on 31 March 2021, the IASB extended the period of application of the practical expedient to 30 June 2022. The amendment applies to annual reporting periods beginning on or after 1 April 2021. However, the Group has not received Covid-19 related rent concessions but plans to apply the practical expedient if it becomes applicable with allowed period of application.

Notes to the Consolidated Financial Statements

for the year ended 31 December 2021

2. Accounting Policies - continued

New standards, amendments and interpretations to existing standards that are not yet effective or have not been early adopted by the Group

At the date of authorisation of these consolidated financial statements, the following standards and interpretations were in issue but not yet mandatorily effective and have not been applied in these financial statements:

IFRS 3 (Amendments), 'Business Combination - Reference to the Conceptual Framework' (effective from 1 January 2022). The amendments update an outdated reference to the Conceptual Framework in PFRS 3 without significantly changing the requirements in the standard.

IAS 16 (Amendments), 'Property, Plant and Equipment - Proceeds Before Intended Use' (effective from 1 January 2022). The amendments prohibit deducting from the cost of an item of property, plant and equipment any proceeds from selling items produced while bringing that asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Instead, an entity recognizes the proceeds from selling such items, and the cost of producing those items, in profit or loss.

IAS 37 (Amendments), 'Provisions, Contingent Liabilities and Contingent Assets: Onerous Contracts - Cost of Fulfilling a Contract' (effective from 1 January 2022). The amendments specify that the 'cost of fulfilling' a contract comprises the 'costs that relate directly to the contract'. Costs that relate directly to a contract can either be incremental costs of fulfilling that contract (examples would be direct labor, materials) or an allocation of other costs that relate directly to fulfilling contracts (an example would be the allocation of the depreciation charge for an item of property, plant and equipment used in fulfilling the contract).

Annual Improvements to IFRS 2018-2020 Cycle. Among the improvements, the only amendments, which are effective from 1 January 2022, relevant to the Group are IFRS 9 (Amendments), 'Financial Instruments - Fees in the '10 per cent' Test for Derecognition of Liability'. The improvements clarify the fees that an entity includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability

.

IAS 1 (Amendments), 'Presentation of Financial Statements - Classification of Liabilities at Current or Non-current' (effective from 1 January 2023). The amendments aim to promote consistency in applying the requirements by helping companies determine whether, in the statement of financial position, debt and other liabilities with an uncertain settlement date should be classified as current (due or potentially due to be settled within one year) or non-current.

The Company assessed that there is no significant impact of the adoption of the new or amended Accounting Standards and Interpretations on the Company's financial statements. The Company has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

3. Critical accounting estimates and judgements

The critical accounting estimates and judgements made by the Group regarding the future or other key sources of estimation, uncertainty and judgement that may have a significant risk of giving rise to a material adjustment to the carrying values of assets and liabilities within the next financial year are:

Critical judgements in applying the group's accounting policies

Going concern (including impact of COVID-19)

The preparation of the financial statements is based on the going concern assumption as disclosed in note 2. The Board of Directors, after taking into consideration the additional funding received, believe the going concern assumption is appropriate.

Notes to the Consolidated Financial Statements

for the year ended 31 December 2021

3. Critical accounting estimates and judgements - continued

Determining capitalizable exploration and evaluation expenditures

The application of the Company's accounting policy for exploration and evaluation expenditure requires judgement to determine whether future economic benefits are likely from either future exploration or sale, or whether activities has not reached a stage that permits a reasonable assessment of the existence of reserves.

In addition to applying judgement to determine whether future economic benefits are likely to arise from the Company's exploration and evaluation assets, or whether activities have not reached a stage that permits a reasonable assessment of the existence of reserves, the Company has to apply a number of estimates and assumptions. The determination of JORC resource is itself an estimation process that involves varying degree of uncertainty depending on how the resources are classified.

The estimation directly impacts when the Group defers exploration and evaluation expenditure. The deferral policy requirements management to make certain estimates and assumptions about future events and circumstances, particularly, whether an economically viable extraction operation can be established.

Any such estimates and assumptions may change as new information becomes available. If, after expenditure is capitalised, information becomes available suggesting that the recovery of expenditure is unlikely, the relevant capitalized amount is written off to the statement of profit or loss and other comprehensive income in the period when the new information becomes available.

Impairment of exploration and evaluation assets

Impairment of exploration and evaluation expenditure is subject to significant estimation, due to the complexity of the accounting requirements and the significant judgement required in determining the assumptions to be used to estimate the recoverable amount. As at 31 December 2021, the Board of Directors are satisfied that no impairment exists as outlined in note 20.

If, after expenditure, is capitalized, information becomes available suggesting that the recovery of expenditure is unlikely, the amount capitalised is written off in profit and loss in the period when the new information becomes available. As at 31 December 2021, no such information is available to suggest that the expenditure is not recoverable.

Impairment of property, plant and equipment

In assessing impairment, management estimates the recoverable amount of the equipment in Wishbone Honduras based on expected future cash flows. Estimation uncertainty relates to determination of future cash flows, including the potential value if the equipment is to be sold to a third party. In 2019, management determined that the equipment has become idle, thus, has not put into use in the operations. Accordingly, the Board of Directors considered that the equipment shall be impaired in 2020 as it believed that the recoverable amount was lower than the carrying value of the property, plant and equipment.

Impairment of goodwill

In 2020, the Board of Directors considered that the goodwill arising from the acquisition of Precious Metals International Ltd together with its wholly owned subsidiary Black Sand FZE ("the PMI Group") was overvalued. Thus, the directors reviewed the carrying value for the current financial year and considered that goodwill as at 31 December 2020 should be fully impaired.

Notes to the Consolidated Financial Statements

for the year ended 31 December 2021

3. Critical accounting estimates and judgements - continued

Determination of functional currency

As at 1 January 2021, the functional currency of the Company is the Pounds Sterling ("GBP"). The Board of Directors considered that the Group's source of funding is predominantly GBP denominated. As a result, the Directors have determined that GBP is the currency which best reflects the underlying transactions, events and conditions relevant to the Group with effect from 1 January 2021 ("the effective date of the change").

Parent company statement of financial position - impairment of the investment in a subsidiary and related party receivables

The Company's investments in its subsidiaries are carried at cost less provision for impairment. The values of the investments are inherently linked to the assets held by and or the performance of the subsidiaries and an impairment review is undertaken by management annually to assess whether any permanent diminution in value has occurred.

At the reporting date, the Australian subsidiaries had net assets of GBP406,094 (AUD 756,323) (net liabilities in 2020: GBP224,084 (AUD 419,165)). As noted above, the Board of Directors do not consider that the exploration and evaluation assets are impaired. An independent valuation of the underlying assets in these subsidiaries was carried out in 2019, which provided a midpoint value of AUD1,218,750 and therefore there is no indication of impairment of the investment in and loan to the Australian subsidiaries of GBP104,105 (2020: 104,105) and GBP2,398,756 (2020: GBP1,335,107) respectively. Further in 2021, in a report of Terra Search, the recent geochemical and ground magnetic results at Wishbone's Gold's Halo prospect compares very favourably to the geological setting and geochemical association of the nearby Ravenswood Gold Deposit (total production of 5 million plus ounces gold).

At the reporting date, the UAE subsidiary had net liabilities of GBP458,607 (AED 2,279,755) (2020: GBP462,089

(AED2,318,660) ) . The Company provided full allowance for impairment on the loan to the UAE subsidiary, with gross balance of US$375,263.

Valuation of warrants

As described in note 16, the fair value of any warrants granted was calculated using the Binomial Option Pricing model which requires the input of highly subjective assumptions, including volatility of the share price. Changes in subjective input assumptions may materially affect the fair value estimate.

4. Segmental analysis

Management has determined the operating segments by considering the business from both a geographic and product perspective. For management purposes, the Group is currently organised into a single operating division, resource evaluation (Australia). The division is the business segment for which the Group reports its segment information internally to the Board of Directors.

Notes to the Consolidated Financial Statements

for the year ended 31 December 2021

5. Administrative expenses

 
                                                   2021       2020 
                                                    GBP        GBP 
 Fees payable to the Company's auditor 
  for the audit of the Group consolidated 
  financial statements                           36,500     42,358 
 Other administrative costs                     902,987    616,155 
 Remuneration of directors of the Group         254,566    126,007 
 Depreciation                                         -     19,487 
 Bad debts expense                                    -     10,937 
 
                                              1,194,053    814,944 
                                             ----------  --------- 
 

Remuneration to the directors of the Group may be settled via the issue of equity in the Company and cash, as disclosed in note 21.

6. Taxation

The Company is subject to corporation tax in Gibraltar on any profits, which are accrued in or derived from Gibraltar or any passive income which is taxable. The corporation tax rate in Gibraltar for the year ended 31 December 2021 is 12.5% (2020: 10%). The Company has no operations in Gibraltar which are taxable.

The Company has taxable losses to carry forward, consequently no provision for corporate tax has been made in these financial statements.

The Group's subsidiary, Wishbone Gold Pty Ltd, is subject to corporate income tax in Australia. The corporate income tax rate in Australia for the year ended 31 December 2021 is 30% (2020: 30%).

This subsidiary has taxable losses to carry forward, consequently no provision for corporate tax has been made in these financial statements.

Note that there are no group taxation provisions under the tax laws of Gibraltar.

As at 31 December 2021 and as at 31 December 2020, the Company has no deferred tax assets and no deferred tax liabilities.

Notes to the Consolidated Financial Statements

for the year ended 31 December 2021

7. Loss per share

 
                                                                    2021                   2020 
                                                                     GBP                    GBP 
 Loss for the purpose of basic loss 
  per share being net loss attributable 
  to equity owners of parent                                 (1,240,157)              (694,079) 
                                                 -----------------------  --------------------- 
 Loss for the purpose of diluted earnings 
  per share                                                  (1,240,157)              (694,079) 
 
 Number of shares: 
 Weighted average number of shares 
  in issue during the year: 
 Issued ordinary shares at the beginning 
  of the year                                              2,845,879,000          2,845,878,980 
 Effect of share issues before reorganisation                          -                     20 
                                                 -----------------------  --------------------- 
 Weighted average number of new ordinary 
  shares before reorganisation                             2,845,879,000          2,802,036,973 
                                                 -----------------------  --------------------- 
 
 Weighted average number of new ordinary 
  shares 
 Issued ordinary shares at the beginning 
  of the year                                                149,969,321             28,458,790 
 Effect of share issues after reorganisation                  16,369,536             47,120,629 
                                                 -----------------------  --------------------- 
 Weighted average number of new ordinary 
  shares at 31 December                                      166,338,857             75,579,419 
                                                 -----------------------  --------------------- 
 Basic loss per share (pence)                                   (0. 746)                (0.918) 
                                                 -----------------------  --------------------- 
 

Due to the Company and the Group being loss making, the share warrants (note 16) are antidilutive.

8. Trade and other receivables

 
 
                                2021       2020 
    Group                        GBP        GBP 
 
    Debtors                       19      7,684 
    Prepayments                1,577      6,887 
    Loans from directors      31,539     31,249 
    Unpaid share capital           -    378,000 
 
                              33,135    423,820 
                            --------  --------- 
 
 
                                        2021        2020 
    Company                              GBP         GBP 
 
    Debtors                               12       2,491 
    Prepayments                            -       6,107 
    Unpaid share capital                   -     378,000 
    Other receivable (see note 21)     7,572   1,425,281 
 
                                       7,584   1,811,879 
                                      ------  ---------- 
 

Notes to the Consolidated Financial Statements

for the year ended 31 December 2021

9. Property, plant and equipment

 
                                                  2021        2020 
 Group                                             GBP         GBP 
 Cost 
 As at 1 January and 31 December               184,164     184,164 
 
 Accumulated Depreciation and Impairment 
 As at 1 January                             (184,164)   (164,677) 
 Depreciation charges during the year                -    (19,487) 
 
 As at 31 December                           (184,164)   (184,164) 
                                            ----------  ---------- 
 
 Net Book Value 
 As at 31 December                                   -           - 
                                            ==========  ========== 
 

The plant in Honduras is currently not in production. Given the status of the Honduran operations, Management deemed that the value of the property, plant and equipment has been fully depreciated as at 31 December 2020.

10. Intangible assets

 
                                                  Exploration 
                                                 & evaluation 
                                     Goodwill          assets        Total 
  Group                                   GBP             GBP          GBP 
  Cost 
  At 1 January 2020                   141,062         292,571      433,633 
 (Impairment)/additions             (145,885)         734,744      588,859 
  Foreign exchange revaluation          4,823         (6,385)      (1,562) 
 
  At 31 December 2020                       -       1,020,930    1,020,930 
                                  -----------  --------------  ----------- 
 
  At 1 January 2021                         -       1,020,930    1,020,930 
 (Impairment)/additions                     -         488,364      488,364 
  Foreign exchange revaluation              -        (49,239)     (49,239) 
 
  At 31 December 2021                       -       1,460,055    1,460,055 
                                  -----------  --------------  ----------- 
 

The Group holds Exploration Permits for Mining ("EPMs") to four tenements in Queensland, Australia and four exploration licenses in Western Australia. The renewal of the EPMs is for a maximum further period of 5 years. Permits are not automatically renewed but require an application to the Queensland Department of Natural Resources and Mines.

In 2016, Wishbone acquired 100% of the share capital of Precious Metals International Ltd together with its wholly owned subsidiary Black Sand FZE ("the PMI Group"). The resulting goodwill of GBP 647,984 reflects the fair value of the net assets acquired and the value of the considerations at the time of acquisition. The directors have fully impaired this goodwill.

In 2020, the Group acquired three exploration licenses in Western Australia for a total deemed consideration of GBP549,999 which consists of cash amounting to GBP183,333, shares of stocks with deemed value of GBP366,666 and share warrants valued at nil (see notes 14 and 16). A portion of the warrants issued were exercised in 2021 for a total consideration of GBP122,222.

Notes to the Consolidated Financial Statements

for the year ended 31 December 2021

10. Intangible assets - continued

In 2021, the Group acquired additional exploration license in Western Australia for a total deemed consideration of GBP161,000 which consists of cash amounting to GBP35,000 , shares of stocks with deemed value of GBP126,000 and share warrants valued at nil (see notes 14 and 16).

11. Investments

Shares in subsidiary undertakings

 
                                             2021        2020 
 Company                                      GBP         GBP 
 Cost 
 As at 1 January and 31 December          697,329     697,329 
 
 Accumulated Impairment 
 As at 1 January                        (593,224)   (423,186) 
 Impairment charges during the year 
  (see note 12)                                 -   (194,183) 
 Foreign exchange revaluation                   -      24,145 
                                       ----------  ---------- 
 As at 31 December                      (593,224)   (593,224) 
                                       ----------  ---------- 
 
 Net Book Value 
 As at 31 December                        104,105     104,105 
                                       ==========  ========== 
 
 
 
                                                                          Country of       Cost of 
                                             Class of                   registration    Investment 
     Company                              shares held   % held      or incorporation           GBP 
 
                                           110,000,000 
                                              ordinary 
                                                shares 
     Wishbone Gold Pty                    of GBP 0.001 
      Ltd                                         each     100%             Australia       104,105 
                                            100 common 
     Precious Metals                         shares of                 British Virgin 
      International Ltd.                    USD 1 each     100%               Islands       182,326 
                                        2,000 ordinary 
     Wishbone Gold Honduras                  shares of 
      Ltd.                                  GBP 1 each     100%             Gibraltar       410,898 
     Wishbone Gold FZ-LLC                  10 ordinary 
                                             shares of 
                                             AED 1,000                    United Arab 
                                                  each     100%              Emirates             - 
     Wishbone Gold WA                     100 ordinary 
      Pty Ltd                                shares of 
                                            AUD 1 each     100%             Australia             - 
 
 

Notes to the Consolidated Financial Statements

for the year ended 31 December 2021

11. Investments - continued

Wishbone Gold Pty Ltd is an exploration company. The Company is incorporated in Australia and the registered office address is c/o RSM, Level 6, 340 Adelaide St, Brisbane City 4000, Australia.

Precious Metals International Ltd. is a holding company that controls Black Sand FZE in the UAE. Precious Metals International Ltd. is incorporated in the British Virgin Islands and the registered office address is Nerine Chambers, P.O. Box 905, Road Town, Tortola, British Virgin Islands.

Wishbone Gold Honduras Ltd. is a company incorporated in Gibraltar and the registered office address is at Suite 16, Watergardens 5, Waterport Wharf, Gibraltar. In the previous years, the company has not been consolidated into the financial statements since there were no transactions in the company which are material at a group level.

Wishbone Gold FZ-LLC is a company incorporated in the UAE and the registered office address is at Al Jazirah Al Hamra, RAKEZ Business Zone-FZ, Ras Al Khaimah, UAE. The company has not been consolidated into the financial statements since there were no transactions in the company which are material at a group level.

Wishbone Gold WA Pty Ltd is also an exploration company. The Company is incorporated in Australia and the registered office address is c/o RSM, Level 6, 340 Adelaide St, Brisbane City 4000, Australia.

The cost of the investments in Wishbone Gold FZ-LLC and Wishbone Gold WA Pty Ltd is negligible and has not been recognised.

12. Impairment of investments

 
                                            2021        2020 
 Company                                     GBP         GBP 
 
 Impairments recognised during the year        -   (194,183) 
                                           -----  ---------- 
 

In 2020, the Company considered its investment in Precious Metals International Ltd. to be fully impaired given the current situation of the Dubai physical gold market and high levels of uncertainty from the lockdown of businesses and countries brought about by COVID-19.

13. Current liabilities

 
                                      2021       2020 
                                       GBP        GBP 
  Group 
 
  Trade payables                    63,763    103,634 
  Accruals and deferred income      71,989    159,063 
  Loan from Black Swan FZE               -     15,787 
 
                                   135,752    278,484 
                                  --------  --------- 
 

Notes to the Consolidated Financial Statements

for the year ended 31 December 2021

13. Current liabilities - continued

 
                                                2021       2020 
  Company                                        GBP        GBP 
 
  Trade payables                              27,533     26,278 
  Accruals and deferred income                51,500    148,551 
  Loan from Black Swan FZE                         -     15,787 
 Amount due to related party undertaking      13,574          - 
 
                                              92,607    190,616 
                                            --------  --------- 
 

In 2020, the outstanding loan from Sanderson Capital Partners Limited was fully settled for shares, through the conversion of GBP176,267 of the balance of the Sanderson loan facility including accrued interest into 13,056,840 new ordinary shares of 0.1 pence each at a price of 1.35 pence per share, resulting on a gain on settlement of liability amounting to GBP154,941. On the same year, certain outstanding loan with Black Swan FZE was settled though the conversion of the GBP116,622 balance into 8,638,686 new ordinary shares at 0.1 pence east at the same price of 1.35 pence per share.

In 2021, the Group settled through issuance of shares certain tenements in Western Australia for total consideration of GBP222,000. The purchase was made in two share issuances consisting of 600,000 new ordinary shares of 0.1 pence each at a deemed issued price of 16 pence per share and 900,000 new ordinary share of 0.1 pence each at a deemed issued price of 14 pence per share.

14. Share capital - Group and Company

 
                                                                                  2021                2020 
     Authorised:                                                                   GBP                 GBP 
      8,000,000,000 Ordinary Shares of 
       GBP0.001 each                                                         8,000,000           8,000,000 
                                                                        --------------  ------------------ 
 
 Allotted and called up: 
                                                      2021        2021                        2020          2020 
                                                     Share       Share                       Share         Share 
                                 2021 Number       capital     premium     2020 Number     capital       premium 
                                   of shares           GBP         GBP       of shares         GBP           GBP 
 
  As at 1 January                149,969,321     2,967,390   8,943,833   2,845,878,980   2,845,879     5,408,775 
 Issued during the 
  year before capital 
  reorganisation                           -             -           -              20           -             - 
                                ------------  ------------  ----------  --------------  ----------  ------------ 
 Shares before capital 
  reorganization                           -             -           -   2,845,879,000           -             - 
                                ------------  ------------  ----------  --------------  ----------  ------------ 
 Shares after capital 
  reorganization - carried 
  forward                        149,969,321     2,967,390   8,943,833      28,458,790   2,845,879     5,408,775 
 
 

Notes to the Consolidated Financial Statements

for the year ended 31 December 2021

14. Share capital - Group and Company - continued

 
                                                     2021         2021                                     2020            2020 
                                                    Share        Share                                    Share           Share 
                    2021 Number                   capital      premium   2020 Number                    capital         premium 
                      of shares                       GBP          GBP     of shares                        GBP             GBP 
 
   Shares after 
   capital 
   reorganization 
   - brought 
   forward          149,969,321                 2,967,390    8,943,833    28,458,790                  2,845,879       5,408,775 
 
  Issued during 
  the 
  year: 
 Placing of 
  shares             10,000,000                    10,000    1,390,000    59,722,221                     59,722       2,390,278 
 Settlement of 
  liability 
  through shares 
  (see 
  note 13)            1,500,000                     1,500      220,500    52,348,310                     52,348         871,021 
 Exercise of 
  warrants 
  issued last 
  year with 
  shares issued 
  this 
  year               12,325,892                    12,326    1,508,519             -                          -               - 
 Exercise of 
  warrants 
  and shares 
  issued 
  this year (see 
  note 
  16)                         -                         -            -     9,440,000                      9,440         273,760 
 As at 31 
  December          173,794,213                 2,991,216   11,698,892   149,969,321                  2,967,390       8,943,833 
                   ------------  ------------------------  -----------  ------------  -------------------------  -------------- 
 

Share allotments and issuances during the year, including comparative, are laid out below:

On 7 January 2020, twenty (20) new ordinary shares of 0.1 pence each in the capital of the Company ("Ordinary Shares") have been issued at par for a total consideration of 2 pence. The new Ordinary Shares have been issued to provide a whole number of shares in preparation for the proposed Capital Reorganisation, as announced on 19 December 2019.

The Company's existing issued share capital of 2,845,879,000 Existing Ordinary Shares were consolidated on the basis of 100 Existing Ordinary Shares into one Consolidated Share, and in turn, each Consolidated Share was sub-divided into one New Ordinary Share of 0.1 pence and one Deferred Share of 9.9 pence. The Capital Reorganisation application was made for the New Ordinary Shares to be admitted to trading on AIM and AQSE at 8.00 am on 21 January 2020.

On 17 February 2020, the Company acquired all of the Company's outstanding deferred shares of 9.9 pence each for nil consideration.

On 2 June 2020, the Company issued and allotted a total of 63,459,420 new ordinary shares of 0.1 pence each which consisted of the following: (1) 22,222,221 Ordinary Shares for the raising of GBP300,000 (before expenses) through a placing via Peterhouse Capital Limited. GBP100,000 of this placing was subscribed by Black Swan FZE for 7,407,407 Ordinary Shares; (2) 13,014,002 Ordinary Shares was issued to settle the Directors and Management Fees of GBP175,689; and (3) 28,223,197 Ordinary Shares for the conversion of the outstanding loans with Sanderson Capital Partners Limited and Black Swan FZE (receiving 8,638,686 Ordinary Shares) and discharged sundry creditors. This resulted in the conversion of GBP292,890 for both loans and GBP88,124 for sundry creditors.

Notes to the Consolidated Financial Statements

for the year ended 31 December 2021

14. Share capital - Group and Company - continued

On 20 August 2020, the Company raised GBP400,000.00 before expenses, by placing 20,000,000 new Ordinary Shares at a price of 2 pence per share. The Company also granted each 2 Funding shares subscribed by Funding Investors a warrant to subscribe 1 New Ordinary Share in the capital of the Company exercisable for a period of 12 months from admission of the Funding shares at the price of 3.0 pence per ordinary share. The warrants have an accelerator clause whereby if the price of the Company's shares is sustained at greater than 3p for five consecutive days the Company may choose to force execution of the warrants. The Company is obliged to write to each Warrant holder providing 7 calendar days' notice to exercise the warrants, after which each Warrant holder will have up to 14 days to pay for the exercise of their Warrants, subject to the terms of the Warrant Deed. The warrants will not be traded on an exchange.

On 24 September 2020, the Company announced that 94% of the warrants had been exercised raising a further GBP283,200 and that the balance of the warrants had expired.

On 5 October 2020, the Company acquired the Patersons Range Project (including the Red Setter Project) and has issued 11,111,111 new ordinary shares of 0.1 pence each at a price of 3.3 pence per share equating to the total deemed consideration as set out in the acquisition terms of GBP366,666.

On 10 December 2020, the Company raised a total of GBP1,750,000 gross by placing 17,500,000 new ordinary shares of 0.1 pence each at a price of 10 pence per share through a private placement made by the Company to a series of investors.

On 12 January 2021, the Company has received exercise notices for 8,622,188 warrants, attached to the share placement announced on 10 December 2020, amounting to GBP1,034,662.56. This constitutes 98.54% of the warrants linked to the placing and the balance have lapsed.

Pursuant to the exercise notices as detailed above, the Company has issued a total of 8,622,188 new Ordinary Shares of 0.1 pence each from its block listing authority of up to 8,750,000 new Ordinary shares, at a price of 12 pence per share.

On 3 March 2021, the Company issued a total of 600,000 new ordinary shares of 0.1 pence each to Alta Zinc Limited at a deemed issued price of 16 pence per share which totals to GBP96,000 for the option to acquire the Cottesloe Project.

On 20 May 2021, the Company issued 10,000,000 new ordinary shares of 0.1 pence each at a price of 14 pence per share through a private placement made by the Company to a series of investors to raise a total of GBP1,400,000 gross.

On 21 July 2021, the Company has received, notice to exercise warrants over a total of 3,703,704 new ordinary shares of 0.1 pence each in the Company, which will be issued at 3.3 pence per share. The Company has received the exercise consideration of GBP122,222.

On 18 November 2021, the Company has issued 900,000 new ordinary shares of 0.1 pence each at a price of 14 pence per share which equates to GBP126,000, following the completion of the Cottesloe Project acquisition. The Company has also issued 600,000 warrants at an exercise price of 14 pence per share.

Ordinary shares carry a right to receive notice of, attend, or vote at any Annual General and Extraordinary General Meetings of the company. The holders are entitled to receive dividends declared and paid by the Company.

Notes to the Consolidated Financial Statements

for the year ended 31 December 2021

15. Loans

As at 31 December 2021, there are no outstanding loans due from third parties.

 
                                                   2021         2020 
 Company                                            GBP          GBP 
 
 Current 
 Amounts owed by subsidiary undertakings 
  (note 21)                                   2,398,756    1,335,107 
                                            -----------  ----------- 
                                              2,398,756    1,335,107 
                                            -----------  ----------- 
 

16. Share based payments

Details of the warrants and share options in issue during the year ended 31 December are as follows:

 
                             Number 
                        of Warrants                          Number of       Average 
                          / options   Average exercise      Warrants /      exercise 
                               2021         price 2021    options 2020    price 2020 
                                 No                GBP              No           GBP 
 
 Outstanding at 1 
  January                14,305,555             0.0283     154,050,000        0.0099 
 Lapsed/terminated 
  during the year         (127,812)             0.1200   (154,610,000)        0.0101 
 Issued during the 
  year                    7,100,000             0.1738      24,305,555        0.0631 
 Exercised during 
  the year             (12,325,892)             0.0939     (9,440,000)        0.0300 
                     --------------  -----------------  --------------  ------------ 
 Outstanding at 31 
  December                8,951,851             0.1040      14,305,555        0.0283 
                     --------------  -----------------  --------------  ------------ 
 

Fair value is measured by use of the Binomial Option Pricing Model with the assumption of 5% future market volatility and a future interest rate of 1.3% per annum based on the current economic climate. The fair value of share warrants granted as at 31 December 2021 was GBP72,987 (2020: GBPnil).

17. Financial instruments

The Group's financial instruments comprise of cash and cash equivalents, borrowings and items such as trade payables which arise directly from its operations. The main purpose of these financial instruments is to provide finance for the Group's operations.

Notes to the Consolidated Financial Statements

for the year ended 31 December 2021

17. Financial instruments - continued

Classification of financial instruments

All Group's financial assets are classified at amortised cost. All of the Group's financial liabilities classified as other financial liabilities are also held at amortised cost. The carrying value of all financial instruments approximates to their fair value.

Fair values of financial instruments

In the opinion of the directors, the book values of financial assets and liabilities represent their fair values.

18. Financial risk management

The Group's operations expose it to a variety of financial risks including credit risk, liquidity risk, interest rate risk and foreign currency exchange rate risk. The Directors do not believe the Group is exposed to any material equity price risk. The policies are set by the Board of Directors.

Credit risk

Credit risk is the risk that a counterparty will be unable or unwilling to meet the commitments that it has entered into with the Group. Credit risk arises from cash and cash equivalents, and trade and other receivables (including the Company's receivables from related parties). As for the cash and cash equivalents, these are deposited at reputable financial institutions, therefore management do not consider the credit risk to be significant.

The carrying amount of financial assets represents the maximum credit exposure. The maximum credit exposure to credit risk at the reporting date was GBP3,035,682 (2020: GBP 2,025,919 ).

Based on this information, the directors believe that there is a low credit risk arising from these financial assets.

Interest rate risk

The Group's interest-bearing assets comprise only cash and cash equivalents and earn interest at a variable rate. The Group has a policy of maintaining debt at fixed rates which are agreed at the time of acquiring debt to ensure certainty of future interest cash flows. The directors will revisit the appropriateness of the policy should the Group's operations change in size or nature.

No sensitivity analysis for interest rate risk has been presented as any changes in the rates of interest applied to cash balances would have no significant effect on either profit or loss or equity.

The Group has not entered into any derivative transactions during the year under review.

Liquidity risk

The Group actively maintains cash balances that are designed to ensure that sufficient funds are available for operations and planned expansions. The Group monitors its levels of working capital to ensure that it can meet its debt repayments as they fall due. All of the Group's financial liabilities are measured at amortised cost. Details of the Group's funding requirements are set out in note 19.

Non-derivative financial liabilities, comprising loans payable, trade payables and accruals of GBP 135,752 (2020: GBP 278,484 ) are repayable within 1-12 months from the year end, apart from directors' fees. The amounts represent the contractual undiscounted cash flows, balances due equal their carrying balances as the impact of discounting is not significant.

Foreign currency exchange rate risk

The Group undertakes certain transactions in foreign currencies. Hence, exposure to exchange rate fluctuations arises.

Notes to the Consolidated Financial Statements

for the year ended 31 December 2021

18. Financial risk management - continued

The Group incurs foreign currency risk on transactions denominated in currencies other than its functional currency. The principal currency that gives rise to this risk at Group level is the Australian Dollar. At the year end, the Group's exposure to the currency is minimal; accordingly, any increase or decrease in the exchange rates relative to the functional currency would not have a significant effect on the financial statements.

19. Capital management

The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern, to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. The Group defines capital as being share capital plus reserves. The Board of Directors monitor the level of capital as compared to the Group's commitments and adjusts the level of capital as is determined to be necessary, by issuing new shares. The Group is not subject to any externally imposed capital requirements. There were no changes in the Group's approach to capital management during the year.

20. Commitments

Annual expenditure commitments

In order to maintain current rights of tenure to exploration tenements, the Group is required to perform minimum exploration work to meet the minimum expenditure requirements specified by various authorities.

These obligations are subject to periodic renegotiations. These obligations are not provided for in the financial statements and as at 31 December 2021 and 31 December 2021 are payable as follows:

 
                                                     2021       2020 
                                                      GBP        GBP 
 
      Within one year                             400,191     86,706 
      After one year but not more than five 
       years                                    1,047,947     76,199 
                                               ----------  --------- 
                                                1,448,138    162,905 
                                               ----------  --------- 
 

21. Related parties

The Company wholly owns Wishbone Gold Pty Ltd, an Australian entity that is engaged in the exploration of gold in Australia. The Company's investment in Wishbone Pty Ltd was GBP110,000 as at 31 December 2021 and 2020 The financial and operating results of this subsidiary have been consolidated in these financial statements.

Wishbone Gold Pty Ltd, as at 31 December 2021, has a loan outstanding from Wishbone Gold Plc of the following amounts:

 
                                                       2021       2020 
                                                        GBP        GBP 
 
      Outstanding at 1 January                      734,905      418,010 
      Additions during the year                     806,649      267,121 
     Translation adjustment                               -       49,774 
      Outstanding at 31 December                  1,541,554      734,905 
                                                 ----------  ----------- 
 
 
 

Notes to the Consolidated Financial Statements

for the year ended 31 December 2021

21. Related parties - continued

Wishbone Gold WA Pty Ltd, as at 31 December 2021, has a loan outstanding from Wishbone Gold Plc of the following amounts:

 
                                         2021      2020 
                                          GBP       GBP 
 
      Outstanding at 1 January        600,202         - 
      Additions during the year       257,000   600,202 
      Outstanding at 31 December      857,202   600,202 
                                    ---------  -------- 
 
 

Precious Metals International Ltd., through the subsidiary Black Sand FZE as at 31 December 2021, has a loan outstanding from Wishbone Gold Plc of the following amounts:

 
                                                          2021        2020 
                                                           GBP         GBP 
 
      Outstanding at 1 January                               -       378,077 
      Additions/ (Repayments) during the 
       year                                                  -        12,048 
      Translation Adjustment                                 -      (14,862) 
                                                     ---------  ------------ 
                                                             -     (375,263) 
      Impairment provision recognised during 
       the year                                              -     (375,263) 
      Outstanding at 31 December                             -             - 
                                                     ---------  ------------ 
 
 

The Company wholly owns Wishbone Gold Honduras Ltd. ("Wishbone Honduras"), a company registered in Gibraltar. Solent Nominees Ltd previously held the shares of Wishbone Honduras on behalf of the Company. During the year, the title of the shares was transferred to the Company as the legal and beneficial owner. In addition, Black Sand FZE transferred the title of the Group's equipment to Wishbone Honduras in 2018.

The above company also has a loan outstanding from Wishbone Gold Plc of the following amounts:

 
                                                 2021       2020 
                                                  GBP        GBP 
 
      Outstanding at 1 January                      -     91,487 
      Assignment of loan                            -          - 
      Impairment provision recognised during 
       the year                                     -   (91,487) 
      Outstanding at 31 December                    -          - 
                                                -----  --------- 
 

The intercompany loans are repayable on demand and do not attract any interest.

Asian Commerce and Commodities Trading Co. Ltd. (ACCT), a company registered in Thailand, is 49% owned by the Company. The fair value of the net assets of this affiliate have been assessed as having no value, thus, not recognised in both the Group and the Company's accounts. Management had the option to increase its shareholdings to 95% in order to gain control but did not exercise that option. Management believes that it has no control over this entity and therefore, not consolidated in the group level.

Notes to the Consolidated Financial Statements

for the year ended 31 December 2021

21. Related parties - continued

The Company wholly owns Wishbone Gold FZ-LLC, a company registered in the United Arab Emirates. The purpose of this company is solely to hold bank accounts in the U.A.E., as it simplifies payments that need to be made in that country. The company does not trade and its sole asset is its bank account. The cash in bank amounting to

GBP7,571 (2020: GBP1,425,281) of Wishbone Gold FZ-LLC (see note 8) which is a wholly owned subsidiary of Wishbone Gold Plc has been recognised as other receivable in the books of the Parent. This has been eliminated upon consolidation and therefore forms part of the cash in bank account at Group level.

The following summarises the fees incurred in respect of directors' and officers' services for the year ended 31 December 2021 and 2020, and the amounts settled by the Company by way of share issues and cash.

 
                         Balance                                         Balance 
                         as at 1     Charge                             as at 31 
                         January    for the      Settled     Settled    December 
 31 December 2021           2021       year    in shares     in cash        2021 
                             GBP        GBP          GBP         GBP         GBP 
 
 Richard Poulden               -    168,108            -   (168,108)           - 
 Jonathan Harrison             -     21,875            -    (21,875)           - 
 Alan Gravett                  -     21,875            -    (21,875)           - 
 Professor Michael 
  Mainelli                     -     21,875            -    (21,875)           - 
 David Hutchins                -     20,833            -    (20,833)           - 
 
 Total                         -    254,566            -   (254,566)           - 
                       ---------  ---------  -----------  ----------  ---------- 
 
 
 
                        Balance                                         Balance 
                        as at 1     Charge                             as at 31 
                        January    for the      Settled     Settled    December 
 31 December 2020          2020       year    in shares     in cash        2020 
                            GBP        GBP          GBP         GBP         GBP 
 
 Richard Poulden        101,058     88,507     (79,597)   (109,868)           - 
 Jonathan Harrison       15,646     12,500     (20,854)     (7,292)           - 
 Alan Gravett            15,625     12,500            -    (28,125)           - 
 Professor Michael 
  Mainelli               15,625     12,500     (20,833)     (7,292)           - 
 
 Total                  147,954    126,007    (121,384)   (152,577)           - 
                      ---------  ---------  -----------  ----------  ---------- 
 
 

In 2020, Richard Poulden's services are billed by Black Swan FZE, in which Richard Poulden, a director of the Company, has an interest, for consultancy services. The Company was billed by Black Swan FZE for various administrative expenses of GBP28,033 (2021: GBPNil) which Black Swan had paid on behalf of the Company.

Jonathan Harrison's services are billed by Easy Business Consulting Limited, in which Jonathan Harrison, a director of the Company, has an interest, for consultancy services. Professor Michael Mainelli's services are billed by Z/Yen Group Limited, in which Professor Michael Mainelli, a director of the Company, has an interest, for consulting services.

On 26 October 2021, the Group provided a short-term loan to Valereum Blockchain Plc, a related party under common management, amounting to GBP 500,000. The related loan, including accrued interest, presented as part of Interest income in the consolidated statement of income, amounting to GBP 5,000, was subsequently collected on 08 November 2021

22. Ultimate controlling party

The directors believe that there is no single ultimate controlling party.

Notes to the Consolidated Financial Statements

for the year ended 31 December 2021

23. Events after the reporting date

The following events took place after the year end:

On 7 March 2022, the Company announced that Heritage Clearing Survey has been confirmed at Cottesloe and Red Setter Projects. The Cottesloe Project is located 55 km south-southwest of the Telfer Gold Mine, and the Red Setter Project is 13 km south-west of the Telfer Gold Mine, in the Patersons Range of Western Australia. DDSR Drilling Australia operating for us who have unique combination drills which can do both rotary RC and diamond drilling - something that is necessary to drill through the upper sedimentary units before hitting basement.

On 3 May 2022, the Company announced that it has signed an important drilling contract of the Company's Red Setter Gold-Copper Project.

The first phase of the drilling contract is for 3,000m of drilling at Red Setter, with the second phase of the contract for a further 7,000m of drilling split between Wishbone's Red Setter Project and the Company's Cottesloe Project to the south.

On 12 May 2022, the Company announced that a heritage survey was underway at the Company's Red Setter Gold-Copper Project located 13 km south-west of the Telfer Gold Mine, in the Patersons Range of Western Australia. The aim of this survey was to increase access to peripheral targets, beyond those already cleared. The heritage survey was set to move down to the Cottesloe Project located 55 km south-southwest of the Telfer Gold Mine.

The heritage survey is expected to clear majority of the required areas for the 10,000m of planned drilling.

On 16 May 2022, the Company announced that it has signed the drilling contract for the Halo Prospect at its Wishbone II Gold-Copper Project in Northern Queensland following the completion of the heritage surveys over all the planned drill sites. The maiden drill program will consist of 2,000m of reverse circulation holes to test surface gold and copper anomalies at depth and look for continuous underground structures.

On 16 May 2022, the Company announced that a heritage survey has been completed at the Company's Red Setter Gold-Copper Project. The survey did not identify any heritage sites at Red Setter. The additional surveys have increased access to peripheral targets beyond those already cleared, where drilling was set to start in the next few weeks. The heritage survey team has moved down to the Cottesloe Project located 55 km south-southwest of the Telfer Gold Mine.

On 31 May 2022, the Company announced that the drill rig will mobilise from Perth towards to the Company's Red Setter Gold-Copper Project.

On 7 June 2022, the Company announced that its maiden drill program has started on Wishbone II Gold-Copper Project. The drill program consists of 2,000m of RC holes to test the numerous gold and copper surface anomalies at depth and look for continuous underground structures.

On 16 June 2022, the Company has updated the market regarding the Wishbone II Gold-Copper drill program in Northern Queensland. The drill programme completed approximately 25% of the designed programme.

Initial Reverse Circulation (RC) drill samples have been transported back to the Terra Search office in Queensland and are undergoing tests prior to being sent to the lab for full analysis. The Initial tests confirmed the presence of elevated copper, coincident with visible oxidised copper and primary chalcopyrite mineralisation.

Terra Search's logging of the RC chips confirms the presence of a felsic, high level, crowded porphyry intrusion often found associated with productive, high level gold systems.

On 17 June 2022, the Company announced that drilling was underway at the Company's Red Setter Gold-Copper Project.

Notes to the Consolidated Financial Statements

for the year ended 31 December 2021

23. Events after the reporting date - continued

On 24 June 2022, the Company has updated the market regarding the Wishbone II Gold-Copper drill program at its 100% owned Halo Project in North Queensland. Drilling at Halo is proceeding to plan with Terra Search logging copper mineralisation in the majority of holes drilled.

24. Availability of accounts

The full report and accounts are being posted on the Company's website, www.wishbonegold.com.

25. Contingent liability

There is some risk that native title, as established by the High Court of Australia's decision in the Mabocase, exists over some of the land over which Wishbone Gold Pty and Wishbone Gold WA hold tenements or over land required for access purposes. Wishbone has historically had good relationships with Indigenous Australians and the board will do their utmost to continue this.

Nonetheless we have to state that the Group is unable to determine the prospects for success or otherwise of the future claims and, in any event, whether or not and to what extent the future claims may significantly affect Wishbone Gold or its projects.

There are no contingent liabilities outstanding at 31 December 2021 and 31 December 2020.

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END

FR BRGDLUBXDGDG

(END) Dow Jones Newswires

June 30, 2022 13:19 ET (17:19 GMT)

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