TIDMBHL
RNS Number : 4524K
Bradda Head Lithium Ltd
25 August 2023
25 August 2023
Bradda Head Lithium Ltd
("Bradda Head", "Bradda", or the "Company")
Audited Final Results for the financial year ending 28 February
2023
Bradda Head Lithium Ltd (AIM: BHL), the North America-focused
lithium development group, is pleased to announce its audited
financial results for the year ending 28 February 2023, and the
Management's Discussion and Analysis for the same period .
Financial and operational highlights
-- Raised total gross proceeds of just under US$ 13 million,
issuing 73,195,560 new ordinary shares to institutional and other
investors;
-- Following the successful completion of a follow-up drill
programme during October 2022, the Company updated its Basin East
MRE, resulting in a 22% increase in LCE tonnes, for a total of
371kt of LCE;
-- Completed a maiden drill programme at our San Domingo
pegmatite asset, with a total of 47 holes drilled. This was the
first 'modern' drilling campaign at these historical targets since
the 1950/60s;
-- Strengthened our on the ground team with the key appointment
of Joey Wilkins as COO, who is a highly regarded geologist in the
US arena with extensive experience and knowledge of US geology,
specifically in Arizona and Nevada;
-- Completed a dual listing, with the Company's shares admitted
to trading on the Canadian TSX-V Exchange under the ticker
BHLI.TSXV.
Ian Stalker, Chairman of Bradda Head, commented:
"The financial year has been both busy and exciting, with the
Company raising gross funds of just under US$ 13 million as part of
a successful UK and North American placement in April 2022. The
funds were strategically deployed to successfully fast-track our
first drill programme at our San Domingo pegmatite resource in
Arizona and complete our second Basin East drilling programme since
listing in 2021. We now have 371kt of lithium carbonate equivalent,
and an exploration target of between 1Mt to 6Mt of LCE over the
Company's Basin projects. We also significantly increased our
hard-rock lithium bearing landholding position in Arizona, and
strengthened our team members with key senior appointments,
including adding Joey Wilkins as COO.
Several catalysts are on the way for Bradda in H2 2023 and H1
2024, as we continue to develop our assets. Drilling is wrapping up
at Basin with an updated MRE being worked on currently. We have an
internal target of a +1Mt LCE resource, which would trigger the
second royalty payment of US$ 2.5 million from Lithium Royalty
Corporation. We have also mobilised a drill rig to kick-off the
second drill programme in 12 months at San Domingo, with the
primary aim to delineate a resource. Funding is in place for these
programmes and we look forward to updating the market with the
results of these and other initiatives."
Copies of the 2023 Audited Report and Financial Statements are
being posted to shareholders and will shortly be available from the
Company's website www.braddaheadltd.com .
The Company will post its Notice of Annual General Meeting
("AGM") to Shareholders at the same time. The AGM will be held at
the Sanderson Suite, Claremont Hotel, Loch Promenade, Douglas, Isle
of Man IM1 2LX, with the date to be confirmed.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF THE MARKET ABUSE REGULATION (EU No.596/2014) AS IT FORMS PART OF
UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT
2018. UPONTHE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY
INFORMATION SERVICE, THIS INSIDE INFORMATION IS NOWCONSIDERED TO BE
IN THE PUBLIC DOMAIN AND SUCH PERSONS SHALL THEREFORE CEASE TO BE
IN POSSESSION OF INSIDEINFORMATION.
For further information please visit the Company's website:
www.braddaheadltd.com .
Contact:
Bradda Head Lithium Limited +44 (0) 1624 639 396
Charles FitzRoy, CEO
Denham Eke, Finance Director
Beaumont Cornish (Nomad)
James Biddle/Roland Cornish +44 20 7628 3396
Panmure Gordon (Joint Broker) +44 20 7886 2500
John Prior
Hugh Rich
Shard Capital (Joint Broker) +44 207 186 9927
Damon Heath
Isabella Pierre
Red Cloud (North American Broker) +1 416 803 3562
Joe Fars
Tavistock (PR) + 44 20 7920 3150
Nick Elwes braddahead@tavistock.co.uk
Adam Baynes
About Bradda Head Lithium Ltd.
Bradda Head Lithium Ltd. is a North America-focused lithium
development group. The Company currently has interests in a variety
of projects, the most advanced of which are in Central and Western
Arizona: The Basin Project (Basin East Project, and the Basin West
Project) and the Wikieup Project.
The Basin East Project has an Indicated Mineral Resource of 21.2
Mt at an average grade of 891 ppm Li and 3.5% K for a total of 100
kt LCE and an Inferred Mineral Resource of 73.3 Mt at an average
grade of 694 ppm Li and 3.2% K for a total of 271 kt LCE. In the
rest of the Basin Project SRK has estimated an Exploration Target
of between 300 to 1,300 Mt of material grading between 600 to 850
ppm Li which is equivalent to a range of between 1 to 6 Mt LCE. The
Group intends to continue to develop its three phase one projects
in Arizona, whilst endeavouring to unlock value at its other
prospective pegmatite and brine assets in Arizona, Nevada, and
Pennsylvania. All of Bradda Head's licences are held on a 100%
equity basis and are in close proximity to the required
infrastructure.
The Mineral Resource statement for the Basin Project was
authored by Martin Pittuck, CEng, MIMMM, FGS who works for SRK
Consulting (UK) Ltd, an independent mining consultancy. Mr. Pittuck
has over 25 years' experience undertaking and reviewing Mineral
Resource estimates and has worked on lithium clay estimates for
over 5 years. Mr. Pittuck consents to the inclusion of the
technical information in this press release and context in which
they appear. Reference is made to the report entitled "Independent
technical report on the Basin and Wikieup Lithium clay projects,
Arizona, USA" dated October 18, 2022 with an effective date of June
10, 2022 was prepared by Martin Pittuck, CEng, MIMMM, FGS, and
Kirsty Reynolds MSci, PhD, FGS and reviewed by Nick Fox MSc, ACA,
MIMMM. The Report is available for review on SEDARplus (
www.sedarplus.ca/landingpage ) and the Company's website
www.braddaheadltd.com .
Bradda Head is quoted on the AIM of the London Stock Exchange
with the ticker of BHL, on the TSX Ventures exchange with a ticker
of BHLI, and on the US OTCQB market with a ticker of BHLIF.
Forward-Looking Statements
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release. This News Release includes certain "forward-looking
statements" which are not comprised of historical facts.
Forward-looking statements include estimates and statements that
describe the Company's future plans, objectives or goals, including
words to the effect that the Company or management expects a stated
condition or result to occur. Forward-looking statements may be
identified by such terms as "believes", "anticipates", "intends
to", "expects", "estimates", "may", "could", "would", "will", or
"plan". Since forward-looking statements are based on assumptions
and address future events and conditions, by their very nature they
involve inherent risks and uncertainties. Although these statements
are based on information currently available to the Company, the
Company provides no assurance that actual results will meet
management's expectations. Risks, uncertainties and other factors
involved with forward-looking information could cause actual
events, results, performance, prospects and opportunities to differ
materially from those expressed or implied by such forward-looking
information. Forward looking information in this news release
includes, but is not limited to, following: The Company's
objectives, goals or future plans. Factors that could cause actual
results to differ materially from such forward-looking information
include, but are not limited to: failure to identify mineral
resources; failure to convert estimated mineral resources to
reserves; delays in obtaining or failures to obtain required
regulatory, governmental, environmental or other project approvals;
political risks; future operating and capital costs, timelines,
permit timelines, the market and future price of and demand for
lithium, and the ongoing ability to work cooperatively with
stakeholders, including the local levels of government;
uncertainties relating to the availability and costs of financing
needed in the future; changes in equity markets, inflation, changes
in exchange rates, fluctuations in commodity prices; delays in the
development of projects, capital and operating costs varying
significantly from estimates; an inability to predict and
counteract the effects of COVID-19 on the business of the Company,
including but not limited to the effects of COVID-19 on the price
of commodities, capital market conditions, restriction on labour
and international travel and supply chains; and the other risks
involved in the mineral exploration and development industry, and
those risks set out in the Company's public documents filed on
SEDAR. Although the Company believes that the assumptions and
factors used in preparing the forward-looking information in this
news release are reasonable, undue reliance should not be placed on
such information, which only applies as of the date of this news
release, and no assurance can be given that such events will occur
in the disclosed time frames or at all. The Company disclaims any
intention or obligation to update or revise any forward-looking
information, whether as a result of new information, future events
or otherwise, other than as required by law.
Chairman's statement
It is my pleasure to present the Annual Report and the Audited
Financial Statements for Bradda Head Lithium Limited (the "Company"
or "Bradda Head") for the year ended 28 February 2023. The
2022/2023 year has been one of significant and steady progress in
our USA based Projects.
We completed a step-out programme at our Basin East clay project
during October 2022. The results were fed into an updated Mineral
Resource Estimate ("MRE"), that was released during March 2023,
resulting in a 22% increase in contained Lithium Carbonate
Equivalent ("LCE") tonnes compared to our previous updated MRE. The
March 2023 MRE comprises an Indicated Mineral Resource of 21.2 Mt
at an average grade of 891 ppm Li, and an Inferred Mineral Resource
of 73.3 Mt at an average grade of 694 ppm Li for a total of 371kt
of LCE. The Company followed up on this second drilling programme,
during March 2023 and commenced a further drilling programme Basin
East, Basin East Extension and Basin North. The results of this
campaign will feed into a further updated MRE later this year .
More significantly, we also completed a maiden drill programme
at our San Domingo pegmatite asset. A total of 7,300m with 47 holes
were drilled. This was the first 'modern' drilling campaign at
these historical targets since the 1950/60s. Lithium bearing
minerals (spodumene and minor lepidolite) were identified in c.60%
of the total holes completed, and it is extremely interesting to
note that the drilling undertaken covered just over 1% of the
23km(2) that Bradda Head holds in this Pegmatite District in
Arizona. The final assay results were highly encouraging and set
the scene for what we believe to be the potential to define a world
class lithium pegmatite district in Arizona. We draw encouragement
from the fact that our best intersection reported at 31.85m @ 1.60%
Li2O (including 3.90m @ 2.88% Li2O, and 20.03m @ 1.97% Li2O
(including 7.06m @ 1.92% Li2O), was indicated to be the 7th best
lithium bearing intersection in Q1 2023 reported with-in our
Canadian, UK, and Australian listed Peer Group in an article
published at the time by Miner Deck.
Importantly this potential Lithium Resource is located near
vital infrastructure in Arizona and proximate to battery end- users
within the US and the wider developing North American battery hub.
A follow-up drill programme is being developed for the second half
of 2023, aimed at delineating a resource and testing additional
ground within the much wider 23km(2) of our lithium pegmatite
claims.
Our on-the-ground team was also strengthened with the key
appointment of Joey Wilkins as COO during November 2022. Joey is a
highly regarded geologist in the US arena with extensive experience
and knowledge of US geology, specifically in Arizona and
Nevada.
The Company remains financially robust having completed a fund
raise during April 2022 and raised just under US$ 13 million in a
combined North American and UK placement, broadening our investment
base.
Our Projects in the USA are clearly very strategically placed to
benefit from highly supportive USA political landscape. Considering
this, it is worth noting that currently the US has only one active
lithium mine in the state of Nevada, which manufactures around 1%
of the world's lithium production.
Under the current administration, steps are being taken to
reduce the reliance on foreign lithium sources and move towards an
increasing percentage of locally sourced lithium. This includes
invoking the Defence Production Act, and in support of this
initiative, the Inflation Reduction Act was passed. This includes
US$ 369 billion in incentives for EV and mining industries to
reduce imports and increase US based battery and EV production.
Our Company is confident in the near and medium term lithium
demand, as the world transitions more and more into the clean
energy future.A report from Benchmark Mineral Intelligence
estimates that annual demand will reach 2.4 million tons of lithium
by 2030, being a 4-fold increase compared to current levels.We use
a long-term lithium price of c.US$22,000/t for our models, which is
where we expect long-term prices to gravitate towards.
Top of the Company's agenda is our drive for outstanding
performance in our Environmental, Social, and Corporate Governance
("ESG ") matters. For example, at each step of the process, both
prior to and during drilling, the Company is in regular discussions
with all related stakeholders in our claims, including local
councils, tribal representatives, and government officials. With
water scarcity being a key consideration in Arizona, the Company
utilised sonic drilling at our Basin East drill programme, which
minimised water consumption. A number of community-based programmes
have been rolled out during 2022 and into 2023, including
sponsorship of local rodeo events, water conservation studies, and
other engagement events within our local communities.
The key focus for the Company for the rest of 2023 will be to
maintain momentum at our priority assets, namely Basin and San
Domingo. With drill programmes and other related activities planned
at both locations for the remainder of the year, we are one step
closer to unlocking the significant potential of these assets,
creating value for our shareholders.
Thank you for your support and we all look forward to a
successful year ahead for Bradda Head.
Ian John Stalker
Chairman
24 August 2023
Chief Executive Officer's operational review
As the Chairman reports, this period under review has been both
very busy and exciting, with notable milestones achieved, including
the first drill programme at our pegmatite district San Domingo,
two Basin East MRE upgrades in less than a year, successful
completion of a secondary fundraise, and listing the Company's
shares on the Canadian TSX-V Exchange.
Operational Review
Arizona Sedimentary Hosted Lithium Projects
Basin Project
During March 2022, the Company released an updated Basin East
Mineral Resource Estimate and Exploration Target ("MRE") for our
Basin project, compiled by SRK Consulting (UK) Ltd in accordance
with the terminology and definitions given in the JORC Code (2012).
This update led to a) a 65% increase in contained LCE tonnes, b)
the identification of a continuous higher grade internal layer with
a grade of c. 1,300ppm Li in the upper part of the deposit, and c)
the identification of a 1Mt to 6Mt LCE Exploration Target within
the Basin Project district we hold.
The key points following this updated MRE are:
- an Indicated Mineral Resource of 17.7 Mt at an average grade
of 912 ppm Li and 3.4% K for a total of 85 kt LCE; and
- an Inferred Mineral Resource of 57.6 Mt at an average grade of
717 ppm Li and 3.3% K for a total of 220 kt LCE.
Basin East 2022 Mineral Resource Estimate
Classification Domain Tonnes Mean Grade Contained Metal
Mt Li (ppm) K (%) LCE (kt) K (Mt)
------- --------- ------ --------- -------
Indicated Upper Clay 12.0 730 3.6 46 0.4
--------------- ------- --------- ------ --------- -------
Upper Clay HG 5.7 1,296 2.8 39 0.2
-------------------------------- ------- --------- ------ --------- -------
Lower Clay - - - - -
--------------- ------- --------- ------ --------- -------
Sub Total 17.7 912 3.4 85 0.6
-------------------------------- ------- --------- ------ --------- -------
Inferred Upper Clay 29.6 766 3.4 121 1.0
--------------- ------- --------- ------ --------- -------
Upper Clay HG 2.6 1,345 3.1 18 0.1
-------------------------------- ------- --------- ------ --------- -------
Lower Clay 25.4 597 3.1 81 0.8
-------------------------------- ------- --------- ------ --------- -------
Sub Total 57.6 717 3.3 220 1.9
-------------------------------- ------- --------- ------ --------- -------
Total 75.2 763 3.3 305 2.5
------- --------- ------ --------- -------
Following the successful completion of a follow-up drill
programme during October 2022, which consisted of 14 holes covering
1,200m of drilling, on 16 January 2023, the Company updated its
Basin East MRE, resulting in a 22% increase in LCE tonnes. The
Indicated category of the MRE, which is all located in the upper
part of the deposit, has increased by 17%. Following completion of
the Basin East Step Out drill programme, a total of 1.4km(2) of
Bradda's 46km(2) of sedimentary claims been drilled.
The updated MRE comprises:
- an Indicated Mineral Resource of 21.2 Mt at an average grade
of 891 ppm Li and 3.5% K (potassium) for a total of 100 kt LCE,
and
- an Inferred Mineral Resource of 73.3 Mt at an average grade of
694 ppm Li and 3.2% K (potassium) for a total of 271 kt LCE.
Basin East 2023 Mineral Resource Estimate
Classification Domain Tonnes Mean Grade Contained Metal
Mt Li (ppm) K (%) LCE (kt) K (Mt)
------- --------- ------ --------- -------
Indicated Upper Clay 16.0 738 3.6 63 0.6
--------------- ------- --------- ------ --------- -------
Upper Clay HG 5.2 1,354 3.0 38 0.2
-------------------------------- ------- --------- ------ --------- -------
Lower Clay - - - - -
--------------- ------- --------- ------ --------- -------
Sub Total 21.2 891 3.5 100 0.7
-------------------------------- ------- --------- ------ --------- -------
Inferred Upper Clay 31.7 767 3.6 129 1.2
--------------- ------- --------- ------ --------- -------
Upper Clay HG 2.3 1,448 3.5 18 0.1
-------------------------------- ------- --------- ------ --------- -------
Lower Clay 39.3 592 2.9 124 1.1
-------------------------------- ------- --------- ------ --------- -------
Sub Total 73.3 694 3.2 271 2.4
-------------------------------- ------- --------- ------ --------- -------
Total 94.5 738 3.3 371 3.1
------- --------- ------ --------- -------
During March 2023, the Company commenced sonic drilling at the
Basin Project, with the intention of further adding to its existing
NI 43-101 Compliant Mineral Resource of LCE tonnes. As part of the
programme, the Company expected to drill up to 25 holes at Basin
East, Basin East Extension and Basin North. The intent at the Basin
Project in 2023 is to increase coverage over as much of the
Project's 17km(2) area as possible.
The Company will continue to make certain that all efforts are
focused on ensuring that work is carried out in these areas with as
little disturbance as possible. Bradda Head is using sonic
drilling, which is more environmentally sensitive as it uses very
little water compared to diamond core or reverse circulation
drilling.
The Company also continued to progress metallurgical testing,
with positive results received from the second stage progrmame
completed during August 2022. The results show that a 26% upgrade
factor (from 1,500ppm Li to 1,900ppm Li) is achieveable by
rejecting 32% of the unmineralised waste material. A reduction in
these impurities in the Pregnant Leach Solution helps reduce acid
consumption and, therefore, processing costs. Acid leach results
from the upgraded concentrate sample continue to be impressive,
indicating >98% lithium extraction to solution within 1 hour
using a 90degc sulphuric acid leach approach at atmospheric
pressure. Further metallurgical testing still needs to be completed
in order to refine the process.
Wikieup Project
During June 2022, the Company received the results of an initial
Scout drilling programme at Wikieup in Sections 12, 13 and
Northwest. This represents Bradda Head's first drill programme at
Wikieup, consisting of 18 holes and 1,875 meters of sonic drilling.
Sonic drilling was preferred due to reduced water use compared to
diamond core or reverse circulation drilling.
The results demonstrate the presence of lithium bearing clays,
opening up a new potential resource area for the Company and
warranting further work in this area.
Key highlights include:
- Section 12 encountered several intersections of lithium
mineralised clay at 68 metres and 71 metres at 686ppm Li and 519ppm
Li respectively, and also 26 metres at 808ppm Li from hole
W12-22-07;
- Only three holes were drilled into Northwest Wikieup with
promising intersections in the southernmost hole of 55 metres at
621ppm Li, including 16.5 metres at 824ppm Li;
- Lithium mineralised clay was intercepted in the southern portion of Section 13.
The Wikieup project covers a total area of 28km(2) , with a
total of under 6% having been drilled following completion of this
maiden drill programme.
In addition, the Company settled a claim dispute with Arizona
Lithium. The settlement led to a gain at our Wikieup project of an
additional c. 5km(2) .
Arizona Pegmatite District
San Domingo Project
A significant milestone was reached during the year, with a
maiden drill programme commencing at our pegmatite asset during
July 2022. A total of 7,000m diamond core drilling was planned,
with 7,300m or 47 holes being completed. Lithium bearing minerals
(spodumene and minor lepidolite) have been identified in c.60% of
the total holes completed and importantly the programme has only
covered just over 1% of the 23km(2) that Bradda holds in
Arizona.
Following receipt of the final assay results in May 2023, the
results not only demonstrate significant intersections of
pegmatites with visible lithium minerals in the Northern Claim
blocks, but also that the Company has intersections of visible
spodumene at the Central Claim blocks too (Lower Jumbo and Jumbo),
strengthening the presence of a 9km mineralised trend.
Highlights from the assay results include:
Central Claims:
5.94m @ 1.22% Li2O in SD-DH23-046
4.72m @ 0.67% Li2O in SD-DH23-038a
9.54m @ 1.85% Li2O, 3.02m @1.49% Li2O, and 2.90m @ 3.03% Li2O in
SD-DH23-037
7.35m @ 0.68% Li2O, 4.79m @ 0.87% Li2O, 3.20m @ 1.22% Li2O, and
3.21m @ 0.75% Li2O in SD-DH23-036
9.85m @ 0.86% Li2O in SD-DH23-034
4.02m @ 1.27% Li2O in SD-DH23-035
Northern Claims:
31.85m @ 1.60% Li2O (including 3.90m @ 2.88% Li2O, and 20.03m @
1.97% Li2O (including 7.06m @ 1.92% Li2O, 3.21m @ 3.74% Li2O and
3.81m @ 3.25% Li2O)) in SD-DH22-024
6.52m @ 1.24% Li2O in SD-DH23-041
2.74m @ 2.12% Li2O in SD-DH23-042
1.77m @ 1.10% Li 2 O in SD-DH23-040
3.75m @ 2.37% Li2O, 0.85m @ 2.44% Li2O, 1.10m @ 0.82% Li2O, and
0.67m @ 1.77% Li2O in SD-DH22-025
3.35m @ 2.23% Li2O in SD-DH22-018
3.20m @ 1.70% Li2O, 1.89m @ 2.89% Li2O, and 2.75m @ 0.67% Li2O
in SD-DH22-019
9.75m @ 0.78% Li2O (including 5.36m @ 1.20% Li2O) in SD-DH22-003
4.27m @ 1.86% Li2O in SD-DH22-005
2.44m @ 1.63% Li2O in SD-DH22-001
The Company also completed an extensive soil sampling programme
across the majority of the 23km(2) landholding. The final figures
were received post year-end, with very promising results showing
priority targets along the complete 9km mineralised trend.
Alongside of soil sampling, Bradda's geologists, following a review
of the GPR work carried out in 2021/2022, initiated a structural
mapping programme to help with drill hole targeting for the
follow-up drill programme at San Domingo designed to start in Q3
2023.
Post year-end, the Company extended its project area at San
Domingo, acquiring three inlier lode claims for a total increase in
project area of 60 acres. Bradda Head is in the process of
finalising a follow-up drilling programme to start in Q3 of this
year aimed at testing additional ground within the much wider
23km(2) of lithium pegmatite claims and leases held in Arizona. The
acquisition of the inlier claims strengthens our position and funds
are already in place for this planned work, and ongoing exploration
work by our geologists suggests that we have only just scratched
the surface of what we have at San Domingo with just over 1% of the
area tested from this first programme.
Nevada Lithium Brine Projects
Wilson Project and Eureka Project
Work programmes have been focused on our Arizona pegmatite and
clay projects over the last year to conserve funds and maximise
potential return for shareholders. Discussions are underway on the
potential for joint venture interest in our Nevada based brine
projects, and Bradda will update the market when any developments
are secured.
Financial Review
For the year ended 28 February 2023, the Company recorded a net
loss of US$ 3,887,588 (28 February 2022: US$ 3,554,468).
Expenditure totalling US$ 547,916 (28 February 2022: US$ 1,022,837)
is considered to be one-off items, as these related directly to the
Canadian TSX-V Exchange listing, completed on 10 November 2022.
As at year end, cash balance stood at US$ 7,746,519 (28 February
2022: US$ 7,327,303), capitalised deferred mining, exploration,
licence, and permit costs stood at US$ 9,574,266 (28 February 2022:
US$ 5,732,820), and total assets were US$ 18,198,559 (28 February
2022: US$ 13,354,840). The Company is in a net asset position of
US$ 16,984,940 (28 February 2022: US$ 12,257,165).
The Company continues the process of actively pursuing recovery
of the US$ 600,000 fraudulent payment made to an unidentified
party, as disclosed in the prior year accounts. The Board will
provide an update once further progress has been made.
Approach to Risk and Corporate Governance
"The Company's general risk appetite is a moderate, balanced one
that allows it to maintain appropriate growth, profitability and
scalability, whilst ensuring full corporate compliance."
The Group's primary risk drivers include: -
Strategic, Reputational, Credit, Operational, Market, Liquidity,
Foreign Exchange, Capital and Funding, Compliance and Conduct.
Our risk appetite is classified as High under an "impact" matrix
defined as Zero, Low, Medium, and High. Appropriate steps have been
taken and adequate controls implemented to monitor the risks of the
Company, and the appropriate committees and reporting structures
have been established to monitor risks facing the Company.
Financing
On 13 April 2022, the Company completed an over-subscribed
secondary fundraise, with shares commencing to trade on 20 April
2022. The Company raised total gross proceeds of US$ 12.9 million,
issuing 73,195,560 new ordinary shares to institutional and other
investors. All subscribers were issued with warrants on a 1:1
basis, with 73,195,560 warrants being issued with an exercise price
of GBP0.21. Listing related expenditures amounted to US$ 547,916
and these are considered to be non-recurring items. The fair value
applied to the shareholder warrants has been classified as a
financial liability. At year end, the warrant liability of US$
230,201 has been re-measured to fair value, with a corresponding
gain recorded in profit and loss of US$ 4,518,470 (28 February
2022: Nil).
On 10 November 2022, the Company's shares were admitted to
trading on the Canadian TSX-V Exchange under the ticker BHLI.TSXV.
Bradda Head's board of directors believes that the listing will be
beneficial to the Company and its shareholders, in addition to the
AIM listing, bringing the Company's lithium project portfolio to
the attention of a robust resources market, and expanding Bradda
Head's potential shareholder base.
Strategy and Outlook
Under the Biden administration, clean energy production will be
ramped up in the USA, with lithium considered to be a key resource.
Under the Inflation Reduction Act, US$ 369 billion has been
dedicated to foster a domestic clean-energy manufacturing base.
Grants will be made available to produce keys metals such as
lithium. They are intended to reduce reliance of the US on
countries such as China, which has been historically leading the
way in lithium-ion batteries. The Company, with its portfolio of
assets covering all three main lithium deposit types, is ideally
positioned to take advantage of this demand growth. The projects
held are in strategic locations with respect to end-users, power,
rail and road transport, renewable electricity and gas
infrastructure. Multiple lithium end users are located in the
Western states close to the Company's projects, most notably the
Tesla's Gigafactory in Nevada and, by 2025, LG Chem will be
producing EV batteries at its US$ 5.5 billion Arizona battery
complex. Tesla this year broke ground at its lithium refinery in
Corpus Christi in Texas where it plans to produce battery grade
lithium hydroxide, a sign of the increasing demand in the US for
raw materials, like 6% spodumene concentrate, which is typically
shipped from Australia to China for processing to Lithium
hydroxide, a EV battery pre-cursor chemical.
The Board believes with its current portfolio, coupled with an
extremely experienced and motivated team, it is in a strong
position to both unlock value from its projects, and create
significant value for shareholders.
Charles FitzRoy
Chief Executive Officer
24 August 2023
Directors' report
The Directors present their annual report and the consolidated
financial statements for Bradda Head Lithium Limited (the
"Company") for the year ended 28 February 2023 .
Principal activity
Bradda Head Lithium Limited is a lithium exploration Group
focused on developing its high-quality projects in the USA.
Results and transfers to reserves
The results and transfers to reserves for the year are set out
on pages 30 to 34 of the consolidated financial statements.
The Company made a total comprehensive loss attributable to
equity shareholders for the year after taxation of US$ 3,887,588
(28 February 2022: US$ 3,554,468).
Dividend
The Directors do not propose the payment of a dividend for the
year (2022: US$ Nil).
Policy and practice on payment of creditors
It is the policy of the Company to agree appropriate terms and
conditions for its transactions with suppliers by means of standard
written terms to individually negotiated contracts. The Company
seeks to ensure that payments are always made in accordance with
these terms and conditions.
Financial risks
Details relating to the financial risk management are set out in
note 16 to the financial statements.
Directors
The Directors who served during the period and to date are:
Denham Eke
James Mellon
Ian Stalker
Euan Jenkins
Charles FitzRoy
Alex Borrelli
Directors' report (continued)
Directors' interests
As at 28 February 2023, the interests of the Directors and their
families (as such term is defined in the AIM Rules for Companies)
in the share capital of the Company are as follows:
28 February 2023 28 February 2022
% of issued % of issued
Number share capital Number share capital
James Mellon (1) 65,097,004 16.67% 64,145,176 20.21%
Denham Eke 124,307 0.03% 124,307 0.04%
Ian Stalker (2) 3,870,140 0.99% 3,616,267 1.14%
Charles FitzRoy 13,265 0.00% 11,091 0.003%
Euan Jenkins 2,198,934 0.56% 2,055,454 0.65%
Alex Borrelli 343,329 0.09% 315,649 0.10%
------------ ------------ ------------ ------------
71,646,979 18.34% 70,267,944 22.143%
(1) James Mellon's interest comprises of 63,879,831 (2022: 62,928,003) shares directly held
by Galloway Limited, which is indirectly wholly owned by James Mellon. Denham Eke is a director
of Galloway Limited. Burnbrae Limited holds 200,000 (2022: 200,000) shares, which is indirectly
wholly owned by James Mellon. Denham Eke is a director of Burnbrae Limited. A total of 1,017,173
(2022: 1,017,173) shares are held directly by James Mellon.
(2) Ian Stalker's interest comprises of 3,786,717 (2022: 3,532,844) shares directly held
by Promaco Limited, which is wholly owned by Ian Stalker. The balance of 83,423 shares are
held directly in his name.
Significant shareholdings
Except for the interests disclosed in this note, the Directors
are not aware of any holding of ordinary shares as at 28 February
2023 representing 3% or more of the issued share capital of the
Company:
Number of Percentage of total
ordinary shares issued capital
James Mellon (1) 65,097,004 16.67%
Zenith Minerals Limited 43,959,305 11.25%
Electrification and Decarbonization AIE 28,400,000 7.27%
Hargreaves Lansdown private clients 25,430,049 6.51%
Nigel Wray 20,375,000 5.22%
Lithium Royalty Corporation 19,481,475 4.99%
Anthony Baillieu 14,400,000 3.69%
Jason Macdonald (2) 14,095,706 3.61%
(1) James Mellon's interest comprises of 63,879,831 (2022: 62,928,003) shares directly held
by Galloway Limited, which is indirectly wholly owned by James Mellon. Denham Eke is a director
of Galloway Limited. Burnbrae Limited holds 200,000 (2022: 200,000) shares, which is indirectly
wholly owned by James Mellon. Denham Eke is a director of Burnbrae Limited. A total of 1,017,173
(2022: 1,017,173) shares are held directly by James Mellon.
(2) Jason Macdonald 's interest comprises of 12,307,004 (2022: 12,307,004) shares directly
held by the J&E Macdonald Trust, in which Jason Macdonald has a vested interest. The balance
of 1,788,702 (2022: 1,788,702) shares is held directly in his name.
Auditors
PKF Littlejohn LLP, being eligible, have expressed their
willingness to continue in office.
By order of the Board
Denham Eke
Director
24 August 2023
Corporate Governance Statement
The Board of Bradda Head Lithium Limited (the "Board") is
committed to best practice in corporate governance throughout the
Company (the "Company"). The Directors have agreed to comply with
the provisions of the Quoted Companies Alliance ("QCA") Corporate
Governance Code for Small and Mid-Size Quoted Companies (2018) to
the extent which is appropriate to its nature and scale of
operations. This report illustrates how the Company complies with
those principles.
QCA Principle 1: Establish a strategy and business model which
promotes long-term value for shareholders
The strategy and business operations of the Company are set out
in the Chairman's Statement and Chief Executive Officers
operational review on pages 6 to 10.
The Company's strategy and business model and amendments thereto
are developed by the Chairman and his senior management team and
approved by the Board. The management team is responsible for
implementing the strategy and managing the business at an
operational level.
The Company operates in an inherently high-risk sector and this
is reflected in the principal risks and uncertainties.
In executing the Company's strategy and operational plans,
management will typically confront a range of day-to-day challenges
associated with these key risks and uncertainties and will seek to
deploy the identified mitigation steps to manage these risks as
they manifest themselves.
QCA Principle 2: Seek to understand and meet shareholder needs
and expectations
The Company via the Chairman seeks to maintain a regular
dialogue with both existing and potential new shareholders in order
to communicate the Company's strategy and progress and to
understand the needs and expectations of shareholders.
Beyond the Annual General Meeting, the Chairman and, where
appropriate, other members of the senior management team or Board
will meet with investors and analysts to provide them with updates
on the Company's business and to obtain feedback regarding the
market's expectations of the Company.
The Company's investor relations activities encompass dialogue
with both institutional and private investors. From time to time,
the Company attends private investor events, providing an
opportunity for those investors to meet with representatives from
the Company in a more informal setting.
QCA Principle 3: Take into account wider stakeholder and social
responsibilities and their implications for long-term success
The Company is aware of its corporate social responsibilities
and the need to maintain effective working relationships across a
range of stakeholders. These include the Company's advisors,
suppliers and investee companies. The Company's operations and
working methodologies take account of the need to balance the needs
of all of these stakeholders while maintaining focus on the Board's
primary responsibility to promote the success of the Company for
the benefit of its members as a whole. The Company endeavours to
take account of feedback received from stakeholders, and where
appropriate, ensures any amendments are consistent with the
Company's longer-term strategy.
The Company takes due account of any impact that its activities
may have on the environment and seeks to minimise this impact
wherever possible.
QCA Principle 4: Embed effective risk management, considering
both opportunities and threats, throughout the organisation
The Board is responsible for the systems of risk management and
internal control and for reviewing their effectiveness. Internal
controls are designed to manage rather than eliminate risk and
provide reasonable but not absolute assurance against material
misstatement or loss. Through the activities of the Company Audit,
Risk and Compliance Committee, the effectiveness of these internal
controls is reviewed annually.
A comprehensive budgeting process is completed once a year and
is reviewed and approved by the Board. The Company's results,
compared with the budget, are reported to the Board on a monthly
basis.
The Company maintains appropriate insurance cover in respect of
actions taken against the Directors because of their roles, as well
as against material loss or claims against the Company. The insured
values and type of cover are comprehensively reviewed on a periodic
basis.
The senior management team meets at least quarterly to consider
new risks and opportunities presented to the Company, making
recommendations to the Board and/or Company Audit, Risk and
Compliance Committee as appropriate.
QCA Principle 5: Maintain the board as a well-functioning,
balanced team led by the chair
The Company's Board currently comprises four Non-Executive
Directors and two Executive Directors.
All of the Directors are subject to election by shareholders at
the first Annual General Meeting after their appointment to the
Board and will continue to seek re-election at least once every
three years.
The Board is responsible to the shareholders for the proper
management of the Company and intends to meet at least four times a
year to set the overall direction and strategy of the Company, to
review operational and financial performance and to advise on
management appointments. All key operational decisions are subject
to Board approval.
Alex Borrelli and Euan Jenkins, both Non-Executive Directors,
are considered to be independent. The QCA Code suggests that a
board should have at least two independent Non-Executive Directors.
The Board considers that the current composition and structure of
the Board of Directors is appropriate to maintain effective
oversight of the Company's activities for the time being.
Directors receive their fees in the form of a basic cash
emolument. The current remuneration structure for the Board's
Executive and Non-Executive Directors is deemed to be
proportionate.
QCA Principle 6: Ensure that between them the Directors have the
necessary up-to-date experience, skills and capabilities
The Board considers that the Executive Directors and
Non-Executive Directors are of sufficient competence and calibre to
add strength and objectivity to its activities and bring
considerable experience in the operational and financial
development of the Company.
The Directors' biographies are detailed on the Company's website
www.braddaheadltd.com .
The Board regularly reviews the composition of the Board to
ensure that it has the necessary breadth and depth of skills to
support the ongoing development of the Company.
The Chairman, in conjunction with the Finance Director, ensures
that the Directors' knowledge is kept up to date on key issues and
developments pertaining to the Company, its operational environment
and to the Directors' responsibilities as members of the Board.
Directors' service contracts or appointment letters make
provision for a Director to seek professional advice in furtherance
of his or her duties and responsibilities, normally via the Company
Secretary.
QCA Principle 7: Evaluate board performance based on clear and
relevant objectives, seeking continuous improvement
Internal evaluation of the Board, the Committees and individual
Directors is undertaken on an annual basis in the form of peer
appraisal and discussions to determine their effectiveness and
performance as well as the Directors' continued independence.
The results and recommendations that come out of the appraisals
for the Directors shall identify the key corporate and financial
targets that are relevant to each Director and their personal
targets in terms of career development and training. Progress
against previous targets is also assessed where relevant.
QCA Principle 8: Promote a corporate culture that is based on
ethical values and behaviours
The Board seeks to maintain the highest standards of integrity
and probity in the conduct of the Group's operations. These values
are enshrined in the written policies and working practices adopted
by all employees and contractors in the Group. An open culture is
encouraged within the Group, with regular communications to staff
regarding progress and staff feedback regularly sought. The
Executive Management regularly monitors the Group's cultural
environment and seeks to address any concerns that may arise,
escalating these to Board level as necessary.
The Group is committed to providing a safe environment for its
staff and all other parties for which the Group has a legal or
moral responsibility in this area. The Group's health and safety
policies and procedures are enshrined in the Group's documented
quality systems, which encompass all aspects of the Group's
day-to-day operations.
QCA Principle 9: Maintain governance structures and processes
that are fit for purpose and support good decision- making by the
board
The Role of the Board
The Board is collectively responsible for the long-term success
of the organisation. Its principal function is to determine the
strategy and policies of the Company within an effective control
framework which enables risk to be assessed and managed.
The Board ensures that the necessary financial and human
resources are in place for the Company to meet its objectives and
that business and management performance is reviewed. Furthermore,
the Board ensures that the Company operates within its
constitution, relevant legislation and regulation and that proper
accounting records and effective systems of business control are
established, maintained, documented and audited.
There are at least four formal Board meetings each year. All
Board members have the benefit, at the Company's expense, of
liability insurance in respect of their responsibilities as
Directors and have access to independent legal or other
professional advice if required. The Board has a formal schedule of
matters which are reserved for its consideration and it has
established three committees to consider specific issues in greater
detail, being the Company Audit, Risk and Compliance, Remuneration
and Nomination Committees. The Terms of Reference for each of these
Committees are published on the Company's website.
The Chairman
The Chairman is responsible for leading the Board, ensuring its
effectiveness in all aspects of its role, promoting a culture of
openness of debate and communicating with the Company's members on
behalf of the Board. The Chairman sets the direction of the Board
and promotes a culture of openness and debate by facilitating the
effective contribution of Non-Executive Directors and ensuring
constructive relations between Executive and Non-Executive
Directors. The Chairman also ensures that Directors receive
accurate, timely and clear information. In doing so, this fosters a
positive corporate governance culture throughout the Company.
The Chief Executive Officer
The CEO is responsible for managing the Group's day to day
business and operations within the parameters set by the Board.
Non-Executive Directors
The Non-Executive Directors are responsible for bringing
independent judgement to the discussions held by the Board, using
their breadth of experience and understanding of the business.
Their key responsibilities are to constructively challenge and
contribute to strategic proposals, and to monitor performance,
resources, and standards of conduct, compliance and control, whilst
providing support to executive management in developing the
Company.
Board Committees
The Board has established a Company Audit, Risk and Compliance
Committee (" ARCC"), and a Remuneration Committee with formally
delegated duties and responsibilities.
Company Audit, Risk and Compliance Committee
The Company Audit, Risk and Compliance Committee (the "ARCC")
meets at least two times each year and is chaired by Alex Borrelli.
The external auditors attend by invitation. Its role is to be
responsible for reviewing the integrity of the financial statements
and the balance of information disclosed in the accompanying
Directors' Report, to review the effectiveness of internal controls
and risk management systems and recommend to the Board (for
approval by the members) the appointment or re-appointment of the
external auditor. The ARCC reviews and monitors the external
auditor's objectivity, competence, effectiveness and independence,
ensuring that if it or its associates are invited to undertake
non-audit work it will not compromise auditor objectivity and
independence.
Further information can be found within the Company Audit, Risk
and Compliance Report contained within this Annual Report.
Remuneration Committee
The Remuneration Committee intends to meet at least once a year
and comprises of two Non-Executive Directors. It is chaired by Euan
Jenkins and is responsible for determining the remuneration of the
Executive Directors, and other members of the management. Committee
members do not take part in discussions concerning their own
remuneration.
Further information can be found within the Remuneration Report
contained within this Annual Report.
Re-election
The Company's Rules require that all Directors are submitted for
election at the AGM following their first appointment to the Board.
Thereafter all Directors will submit themselves for re-election at
least once every three years, irrespective of performance.
Board and committee attendance
The number of formal scheduled Board and committee meetings held
and attended by Directors during the year was as follows: -
Name Board ARCC Remuneration
James Mellon 16 - -
Denham Eke 16 - -
Ian Stalker 16 5 -
Charles FitzRoy 16 - -
Euan Jenkins 16 5 4
Alex Borrelli 16 5 4
QCA Principle 10: Communicate how the company is governed and is
performing by maintaining a dialogue with shareholders and other
relevant stakeholders
The Company places a high priority on regular communications
with its various stakeholders and aims to ensure that all
communications concerning the Company's activities are clear, fair
and accurate. The Company's website is regularly updated, and users
can register to be alerted when announcements or details of
presentations and events are posted onto the website.
Notices of General Meetings of the Company can be found here:
https://www.braddaheadltd.com/investor-centre/regulatory-news/
The results of voting on all resolutions in general meetings are
posted to the Company's website, including any actions to be taken
as a result of resolutions for which votes against have been
received from at least 20 per cent of independent shareholders.
Approval
This report was approved by the Board of Directors and signed on
its behalf by:
Denham Eke
Finance Director
24 August 2023
Audit, Risk and Compliance Committee Report
The Directors ensure the Company complies with the provisions of
the Quoted Companies Alliance ("QCA") Corporate Governance Code for
Small and Mid-Size Quoted Companies (2018) to the extent which is
appropriate to its nature and scale of operations.
This report illustrates how the Company complies with those
principles in relation to its Audit, Risk and Compliance Committee
(the "ARCC").
Membership
The members of the ARCC are Ian Stalker, Alex Borrelli ("AB")
and Euan Jenkins ("EJ"), with AB and EJ being the independent
Non-Executive directors, with Alex Borrelli being the Chairman. The
composition of the Committee has been reviewed during the year and
the Board is satisfied that the Committee members have the relevant
financial experience and the expertise to resource and fulfil its
responsibilities effectively, including those relating to risk and
controls.
Meetings
The Committee meets at least two times a year, including the
review of the interim and full year results. Other Directors and
representatives from the external auditors attend by
invitation.
Duties
The Committee carries out the duties below for the Company, as
appropriate:
-- Monitors the integrity of the financial statements of the
Company, including annual and half-yearly reports, interim
management statements, and any other formal announcement relating
to financial performance, reviewing significant financial reporting
issues and judgements which they contain.
-- Reviews and challenges the consistency of the information
presented within the financial statements, compliance with stock
exchange or other legal requirements, accounting policies and the
methods used to account for significant or unusual
transactions.
-- Keeps under review the effectiveness of the Company's
internal controls and risk management systems.
-- Oversee the relationship with the external auditors, PKF
Littlejohn LLP, including meetings when considered appropriate to
discuss their remit and review the findings and any issues with the
annual audit. It will also review their terms of appointment, and
plans to meet them once a year independent of management and will
consider and make recommendations to the Board, to be put to the
Company for approval at the Annual General Meeting, in relation to
the appointment, re-appointment and removal of the Company's
external auditor. There are no contractual restrictions in place in
respect of the auditor choice.
-- The Committee is governed by a Terms of Reference and a copy
of this is available on the Company's website.
2023 Annual Report
During the year, ARCC confirms that it has received sufficient,
reliable and timely information from management and the external
auditors to enable it to fulfil its responsibilities.
The Committee has satisfied itself that there are no
relationships between the auditor and the Company which could
adversely affect the auditor's independence and objectivity.
All internal control and risk issues that have been brought to
the attention of ARCC by the external auditors have been considered
and the Committee confirms that it is satisfied that management has
addressed the issues or has plans to do so.
The Company has a number of policies and procedures in place as
part of its internal controls and these are subject to continuous
review and as a minimum are reviewed by ARCC on an annual
basis.
-- ARCC has reviewed and discussed together with management and
the external auditor the Company's financial statements for the
year ended 28 February 2023 and reports from the external auditor
on the planning for and outcome of their reviews and audit. The key
accounting issues and judgements considered relating to the
Company's financial statements and disclosures were as follows:
o Carrying amount of capitalised deferred mining and exploration
costs, and capitalised licences and permits - US$ 9,574,266;
and
o Going concern - ARCC reviewed the going concern position of
the Company, taking into account the 12-month cash flow forecasts.
ARCC is satisfied that preparing the financial statements on a
going concern basis is appropriate. Disclosures are included in
note 2.
Alex Borrelli
Chairman of Audit, Risk and Compliance Committee
24 August 2023
Report of the Remuneration Committee
As a BVI registered company there is no requirement to produce a
Directors' Remuneration Report. However, the Board follows best
practice and therefore has prepared such a report.
The Directors have agreed to comply with the provisions of the
Quoted Companies Alliance ("QCA") Corporate Governance Code for
Small and Mid-Size Quoted Companies (2018) to the extent which is
appropriate to its nature and scale of operations.
This report illustrates how the Company complies with those
principles in relation to Directors' remuneration.
The Level and components of employee remuneration
The Remuneration Policy reflects the Company's business strategy
and objectives as well as sustained and long-term value creation
for shareholders. In addition, the policy aims to be fair and
provide equality of opportunity, ensuring that:
-- the Company is able to attract, develop and retain
high-performing and motivated employees in the competitive local
and wider markets;
-- employees are offered a competitive remuneration package to
encourage enhanced performance and are, in a fair and responsible
manner, rewarded for their individual contribution to the success
of the Company;
-- it reflects the Company's culture and values; and
-- there is full transparency of the Remuneration Policy.
In line with the Board's approach, which reflects that adopted
within other comparable organisations, the Remuneration Policy
provides for the reward of the employees through salary and other
benefits.
Executive Director's Emoluments
The remuneration for the Executive Directors reflects their
responsibilities. It comprises basic salary, eligibility to
participate in an annual bonus scheme when this is considered
appropriate, private healthcare and share option incentives.
Annual bonus scheme payments are not pensionable and are not
contracted.
As with staff generally, whose salaries are subject to annual
reviews, the basic salary payable to the Executive Directors are
reviewed each year with reference to jobs carrying similar
responsibilities in comparable organisations, market conditions
generally and local employment competition in view of the Group's
geographical position.
The Committee believes that share ownership by executives
strengthens the link between their personal interests and those of
shareholders. Options are granted to executives periodically at the
discretion of the Remuneration Committee. The grant of share
options is not subject to fixed performance criteria. This is
deemed to be appropriate as it allows the Committee to consider the
performance of the Group and the contribution of the individual
executives and, as with annual bonus payments, illustrates the
relative importance placed on performance-related remuneration.
The Group does not intend to contribute to the personal pension
plans of Directors in the forthcoming year.
Executive Directors' Contractual Terms
The service contract of the Executive Directors provides for a
notice period of six months.
Non-Executive Directors' Remuneration
Non-Executive Directors do not receive any benefits other than
their fees and travelling expenses for which they are reimbursed.
The level of fees payable to Non-Executive Directors is assessed
using benchmarks from a group of comparable organisations.
The Procedure for Determining Remuneration
The Remuneration Committee, comprising two Non-Executive
Directors, is responsible for setting the remuneration of the
Executive Directors. Committee members do not take part in
discussions concerning their own remuneration. The basic
Non-Executive Director fee is set by the Chairman. The Chairman of
the Committee reports at the Board meeting following a Committee
meeting.
It is the view of the Committee that Directors' remuneration
awarded across the Company for the year has been in accordance with
the Company's stated Remuneration Policy and, on behalf of the
Committee I recommend that you endorse this report. An analysis of
Directors' emoluments is as follows:
Directors' Emoluments
2023 2022
Fees Share based payment remuneration Total Total
US$ US$ US$ US$
--------------------- ------- --------------------------------- --------- ---------
Executive - salary
Denham Eke 57,345 - 57,345 40,956
Charles FitzRoy 169,105 576,243 745,348 544,983
Non-Executive - fees
Jim Mellon 47,333 - 47,333 30,000
Ian Stalker 142,000 432,182 574,182 1,020,494
Alex Borrelli 47,333 29,572 76,905 30,000
Euan Jenkins 47,333 29,572 76,905 40,000
Aggregate emoluments 510,449 1,067,569 * 1,578,018 1,706,433
--------------------- ------- --------------------------------- --------- ---------
* represents the share-based payment charge for share options
granted..
Approval
The report was approved by the Board of directors and signed on
behalf of the Board.
Euan Jenkins
Chairman of Remuneration Committee
24 August 2023
Statement of Directors' responsibilities in respect of the
Directors' report and the consolidated financial statements
The Directors are responsible for preparing the Directors'
Report and the consolidated financial statements in accordance with
applicable law.
The Directors are required to prepare financial statements for
each financial year. They have elected to prepare the financial
statements in accordance with International Financial Reporting
Standards, and applicable law.
The Directors must not approve the financial statements unless
they are satisfied that they give a true and fair view of the state
of affairs of the Group and of its profit or loss for that period.
In preparing each of the consolidated financial statements, the
Directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and estimates that are reasonable and prudent;
-- state whether applicable International Financial Reporting
Standards have been followed, subject to any material departures
disclosed and explained in the financial statements;
-- assess the Group's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern;
and
-- use the going concern basis of accounting unless they either
intend to liquidate the Group or the Company or to cease
operations, or have no realistic alternative but to do so.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Group. They are responsible for such
internal control as they determine is necessary to enable the
preparation of financial statements that are free from material
misstatement, whether due to fraud or error, and have general
responsibility for taking such steps as are reasonably open to them
to safeguard the assets of the Company and to prevent and detect
fraud and other irregularities.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website.
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF BRADDA HEAD LITHIUM
LIMITED
Opinion
We have audited the group financial statements of Bradda Head
Lithium Limited (the 'group') for the year ended 28 February 2023
which comprise the Consolidated Statement of Comprehensive Income,
the Consolidated Statement of Financial Position, the Consolidated
Statement of Changes in Equity, the Consolidated Statement of Cash
Flows and notes to the financial statements, including significant
accounting policies. The financial reporting framework that has
been applied in their preparation is applicable law and
International Financial Reporting Standards (IFRSs).
In our opinion, the group financial statements:
-- give a true and fair view of the state of the group's affairs
as at 28 February 2023 and of the group's loss for the year then
ended; and
-- have been properly prepared in accordance with International
Financial Reporting Standards ("IFRS").
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK) and applicable law. Our
responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the financial
statements section of our report. We are independent of the group
in accordance with the ethical requirements that are relevant to
our audit of the consolidated financial statements in the UK,
including the FRC's Ethical Standard as applied to listed entities,
and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the
director's use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our
evaluation of the directors' assessment of the group's ability to
continue to adopt the going concern basis of accounting
included:
- Reviewing the cash flow forecasts prepared by management for
the period up to 31 December 2024 for reasonableness and agreeing
these to corroborating evidence; and, by providing challenge on key
assumptions and inputs, including an assessment of the likelihood
of raising additional funds and performing sensitivity
analysis;
- Assessing and evaluating the liquidity of existing assets as of the year end;
- Reviewing and assessing the cash flows forecasts for plausible scenarios;
- Reviewing post-year end Regulatory News Service (RNS)
announcements impacting going concern; and
- Assessing the adequacy of going concern disclosures within the
Annual Report and Consolidated Financial Statements.
Based on the work we have performed, we have not identified any
material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
group's ability to continue as a going concern for a period of at
least twelve months from when the financial statements are
authorised for issue.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report.
Our application of materiality
We apply the concept of materiality in both planning and
performing the audit and evaluating the effect of misstatements.
For the purposes of determining whether the group financial
statements are free from material misstatements, we define
materiality as the magnitude of misstatement that makes it probable
that the economic decisions of a reasonably knowledgeable person,
relying on the group financial statements, would be changed or
influenced. We also determine a level of performance materiality
which we use to assess the extent of testing needed to reduce to an
appropriate level the probability that the aggregate of uncorrected
and undetected misstatements exceeds materiality for the group
financial statements as a whole. When establishing our overall
audit strategy, we determined a magnitude of uncorrected
misstatements that we judged would be material for the group
financial statements as a whole.
The materiality applied to the group financial statements was
$183,000, based on a 1% of gross assets, as we consider gross
assets to be the most relevant performance indicator for an
exploration group having no trade.
A benchmark of 65% for performance materiality during our audit
of the group was applied, being $118,000, as we believe that this
would provide sufficient coverage of significant and residual
risks.
We agreed with the audit committee that we would report to them
all audit differences identified during the course of our audit in
excess of $9,000. We also agreed to report any other audit
misstatements below that threshold that we believe warranted
reporting on qualitative grounds.
Our approach to the audit
Our audit is risk based and is designed to focus our efforts on
the areas at greatest risk of material misstatement, aspects
subject to significant management judgement as well as greatest
complexity, risk and size.
In designing our audit, we determined materiality and assessed
the risk of material misstatement in the consolidated financial
statements. In particular, we looked at areas involving significant
accounting estimates and judgements by management, such as the
recoverability of exploration and evaluation assets.
We also addressed the risk of management override of internal
controls, including evaluating whether there was evidence of bias
by the directors that represented a risk of material misstatement
due to fraud.
Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) we identified, including those which had the greatest effect
on: the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
Capitalisation and assessment of impairment How our scope addressed this
of deferred mining and exploration matter
costs and exploration permits and licenses
(refer note 2 'critical accounting
estimates and judgements', note 7 'Deferred
mining and exploration costs' and note
8 'Exploration permits and licenses'.
The group has reported deferred mining Our audit work in this area
and exploration costs and exploration included:
permits and licenses of $7.5m and $2.1m * Substantive testing of a sample of additions to
respectively. There is a risk that assess their eligibility for capitalisation under
the carrying values of these non-current IFRS 6 by corroborating to the original source
assets are not fully recoverable and documentation;
should be impaired in line with IFRS
6.
This risk also relates to the appropriate * Confirming the group has good title to the permits
capitalisation of exploration costs and claims;
in accordance with IFRS 6.
The group capitalises all expenditure
incurred directly relating to exploratory * Ensuring, where applicable, that any specific
activities as deferred mining or exploration requirements contained within the permits and claims
costs once a licence or permit has have been met, to include minimum expenditure
been obtained for exploratory activities. clauses;
The estimated recoverable amount of
these assets requires judgement in
determining whether future economic * Making enquiries of management regarding future plans
benefits will arise either from future for each project including obtaining cashflow
exploitation or sale. The costs are projections;
capitalized to the extent that they
do not exceed the estimated economically
recoverable amount from mineral interests. * Considering whether there are indications of
impairment on a project-by-project basis in
accordance with IFRS 6 criteria;
=============================================================
The costs relate to projects which
are at an early stage of exploration * Reviewing management's impairment paper in respect of
and there is no certainty as to whether the carrying value of assets and providing challenge,
commercially viable quantities of mineral corroborating any key assumptions used; and
resources will be discovered, whether
the group will continue its exploration
activities in each of its licence areas * Evaluating the independence and competence of the
or whether the group will have sufficient experts engaged by management to calculate the
funding to undertake the required exploration mineral resource estimates.
activities.
Other information
The other information comprises the information included in the
annual report, other than the group financial statements and our
auditor's report thereon. The directors are responsible for the
other information contained within the annual report. Our opinion
on the group financial statements does not cover the other
information and, except to the extent otherwise explicitly stated
in our report, we do not express any form of assurance conclusion
thereon. Our responsibility is to read the other information and,
in doing so, consider whether the other information is materially
inconsistent with the consolidated financial statements or our
knowledge obtained in the course of the audit, or otherwise appears
to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required
to determine whether this gives rise to a material misstatement in
the consolidated financial statements themselves. If, based on the
work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report
that fact.
We have nothing to report in this regard.
Responsibilities of directors
As explained more fully in the directors' responsibilities
statement, the directors are responsible for the preparation of the
group financial statements and for being satisfied that they give a
true and fair view, and for such internal control as the directors
determine is necessary to enable the preparation of group financial
statements that are free from material misstatement, whether due to
fraud or error.
In preparing the group financial statements, the directors are
responsible for assessing the group's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the group or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including
fraud is detailed below:
-- We obtained an understanding of the group and the sector in
which it operates to identify laws and regulations that could
reasonably be expected to have a direct effect on the financial
statements. We obtained our understanding in this regard through
discussions with management, as well as the application of
cumulative audit knowledge and experience of the sector.
-- We determined the principal laws and regulations relevant to
the group in this regard to be those arising from AIM rules, CSE
rules, the QCA Corporate Governance Code, the operating terms set
out in the mining licenses, as well as local laws and
regulations.
-- We designed our audit procedures to ensure the audit team
considered whether there were any indications of non-compliance by
the group with those laws and regulations. These procedures
included, but were not limited to:
o enquiries of management;
o review of minutes of board meetings;
o review of stock exchange announcements; and
o review of legal and professional fees to understand the nature
of the costs and the existence of any non-compliance with laws and
regulations.
-- We also identified the risks of material misstatement of the
group financial statements due to fraud at the group level. We
considered, in addition to the non-rebuttable presumption of a risk
of fraud arising from management override of controls, that the
potential for management bias was identified in relation to the
impairment assessment of non-current exploration and evaluation
assets. We addressed this by challenging the assumptions and
judgements made by management when evaluating any indicators of
impairment.
-- We addressed the risk of fraud arising from management
override of controls by performing audit procedures which included,
but were not limited to: the testing of journals; reviewing
accounting estimates for evidence of bias; and evaluating the
business rationale of any significant transactions that are unusual
or outside the normal course of business.
Because of the inherent limitations of an audit, there is a risk
that we will not detect all irregularities, including those leading
to a material misstatement in the financial statements or
non-compliance with regulation. This risk increases the more that
compliance with a law or regulation is removed from the events and
transactions reflected in the financial statements, as we will be
less likely to become aware of instances of non-compliance. The
risk is also greater regarding irregularities occurring due to
fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at: www.frc.org.uk/auditorsresponsibilities .
This description forms part of our auditor's report.
Use of our report
This report is made solely to the Company's members, as a body,
in accordance with our engagement letter dated 5 June 2023. Our
audit work has been undertaken so that we might state to the
Company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone, other than the Company and the Company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
David Thompson (Engagement Partner) 15 Westferry Circus
For and on behalf of PKF Littlejohn LLP Canary Wharf
Registered Auditor London E14 4HD
24 August 2023
INDEPENT AUDITORS REPORT TO THE MEMBERS OF BRADDA HEAD LITHIUM
LIMITED IN RESPECT OF CANADIAN NATIONAL INSTRUMENT 52-107
(ACCEPTABLE ACCOUNTING PRINCIPLES AND AUDITING STANDARDS) FOR THE
YEARED 28 FEBRUARY 2023
Opinion
We have audited the group financial statements of Bradda Head
Lithium Limited (the "group") for the year ended 28 February 2023
which comprise the Consolidated Statement of Comprehensive Income,
the Consolidated Statement of Financial Position, the Consolidated
Statement of Changes in Equity, the Consolidated Statement of Cash
Flows and notes to the financial statements, including a summary of
significant accounting policies. The financial reporting framework
that has been applied in their preparation is applicable law and
International Financial Reporting Standards (IFRSs) as issued by
the International Accounting Standards Board ("IAASB").
In our opinion, the group financial statements:
-- present fairly, in all material respects, the financial
position of the group as at 28 February 2023 and 28 February 2022
and its financial performance and its cash flows for the years then
ended; and
-- the group financial statements have been properly prepared in
accordance with IFRSs as issued by the IAASB.
Basis for Opinion
We conducted our audit in accordance with International
Standards on Auditing (ISAs) as issued by the International
Auditing and Assurance Standards Board (IAASB) and applicable
law.
Our responsibilities under those standards are further described
in the Auditor's responsibilities for the audit of the financial
statements section of our report. We are independent of the group
in accordance with the International Ethics Standards Board for
Accountants' Code of Ethics for Professional Accountants (IESBA
Code) together with the ethical requirements that are relevant to
our audit of the group financial statements in the UK, and we have
fulfilled our other ethical responsibilities in accordance with
these requirements and the IESBA code. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Conclusions related to going concern
In auditing the financial statements, we have concluded that the
directors' use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our
evaluation of the directors' assessment of the group's ability to
continue to adopt the going concern basis of accounting included a
review of budgets and cash flow forecasts covering a period of at
least 12 months from the date of approval of the financial
statements, including challenge of management on the basis of
preparation, together with ascertaining the most recent cash
position of the group, and identifying subsequent events impacting
the going concern position.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report.
Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current year and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) we identified, including those which had the greatest effect
on: the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
Key Audit Matter How our scope addressed this
matter
Capitalisation and assessment of impairment Our audit work in this area
of deferred mining and exploration included:
costs and exploration permits and * Substantive testing of a sample of additions to
licenses (refer note 2 'critical accounting assess their eligibility for capitalisation under
estimates and judgements', note 7 IFRS 6 by corroborating to the original source
'Deferred mining and exploration costs', documentation;
and note 8 'Exploration permits and
licenses'.
The group has reported deferred mining * Confirming the group has good title to the permits
and exploration costs and exploration and claims;
permits and licenses of $7.5m and
$2.1m respectively. There is a risk
that the carrying values of these * Ensuring, where applicable, that any specific
non-current assets are not fully recoverable requirements contained within the permits and claims
and should be impaired in line with have been met, to include minimum expenditure
IFRS 6. clauses;
This risk also relates to the appropriate
capitalisation of exploration costs
in accordance with IFRS 6. * Making enquiries of management regarding future plans
The group capitalises all expenditure for each project including obtaining cashflow
incurred directly relating to exploratory projections;
activities as deferred mining or exploration
costs once a licence or permit has
been obtained for exploratory activities. * Considering whether there are indications of
The estimated recoverable amount of impairment on a project-by-project basis in
these assets requires judgement in accordance with IFRS 6 criteria;
determining whether future economic
benefits will arise either from future
exploitation or sale. The costs are * Reviewing management's impairment paper in respect of
capitalized to the extent that they the carrying value of assets and providing challenge,
do not exceed the estimated economically corroborating any key assumptions used; and
recoverable amount from mineral interests.
The costs relate to projects which
are at an early stage of exploration * Evaluating the independence and competence of the
and there is no certainty as to whether experts engaged by management to calculate the
commercially viable quantities of mineral resource estimates.
mineral resources will be discovered,
whether the group will continue its
exploration activities in each of
its licence areas or whether the group
will have sufficient funding to undertake
the required exploration activities.
=============================================================
Other information
The other information comprises the information included in the
annual report and the management discussion and analysis, other
than the financial statements and our auditor's report thereon. The
Directors are responsible for the other information.
Our opinion on the group financial statements does not cover the
other information and, except to the extent otherwise explicitly
stated in our report, we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a
material misstatement in the financial statements or a material
misstatement of the other information. If, based on the work we
have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of directors
The Directors are responsible for the preparation and fair
presentation of the financial statements in accordance with IFRSs,
and for such internal control as the Directors determine is
necessary to enable the preparation of financial statements that
are free from material misstatement, whether due to fraud or
error.
In preparing the financial statements, the Directors are
responsible for assessing the group's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the group or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit
conducted in accordance with International Standards on Auditing
(ISAs) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users
taken on the basis of these financial statements.
As part of an audit in accordance with ISAs, we exercise
professional judgment and maintain professional scepticism
throughout the audit. We also:
-- Identify and assess the risks of material misstatement of the
group's financial statements, whether due to fraud or error, design
and perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal
control.
-- Obtain an understanding of internal control relevant to the
audit in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the group's internal control.
-- Evaluate the appropriateness of accounting policies used and
the reasonableness of accounting estimates and related disclosures
made by the Directors.
-- Conclude on the appropriateness of the Directors' use of the
going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the group's
ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in
the auditor's report to the related disclosures in the financial
statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained
up to the date of the auditor's report. However, future events or
conditions may cause the group to cease to continue as a going
concern.
-- Evaluate the overall presentation, structure and content of
the financial statements, including the disclosures, and whether
the financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
-- Obtain sufficient appropriate audit evidence regarding the
financial information of the entities or business activities within
the group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and
performance of the group audit. We remain solely responsible for
the audit opinion.
We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies
in internal control that we identify during our audit.
We also provide those charged with governance with a statement
that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and
other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with those charged with
governance, we determine those matters that were of most
significance in the audit of the financial statements of the
current year and are therefore the key audit matters. We describe
these matters in our auditor's report unless law or regulation
precludes public disclosure about the matter or when, in extremely
rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of
doing so would reasonably be expected to outweigh the public
interest benefits of such communication.
The partner in charge of the audit resulting in this independent
auditors' report is David Thompson.
David Thompson (Engagement Partner)
for and on behalf of PKF Littlejohn LLP
Registered Auditor
24 August 2023
Consolidated Statement of Comprehensive Income
for the year ended 28 February 2023
Notes Year ended 28 February 2023 Year ended 28 February 2022
US$ US$
Expenses
General and administrative 4 (5,880,205) (3,459,272)
Exceptional cost 4 - (600,000)
Foreign exchange losses (1,408,001) (231,613)
Share based payments 15 (1,148,456) (1,433,749)
Impairment 8 (19,470) (230,230)
Other income - 20,000
---------------- ----------------
Operating loss (8,456,132) (5,934,864)
Other income
Gain on sale 5 - 2,383,003
Unrealised gain on investment 13 37,804 30,225
Warrant fair value re-measurement 15, 16 4,518,470 -
---------------- ----------------
Loss before finance costs (3,899,858) (3,521,636)
Finance income 12,270 -
Finance costs - (32,832)
---------------- ----------------
Loss before income tax (3,887,588) (3,554,468)
Income tax expense 6 - -
---------------- ----------------
Total loss and total comprehensive loss for
the year (3,887,588) (3,554,468)
Basic and diluted loss per share (cents) 19 (1.018) (2.855)
The notes on pages 35 to 59 form an integral part of these
consolidated financial statements.
Consolidated Statement of Financial Position
as at 28 February 2023
Notes 28 February 2023 28 February 2022
US$ US$
Non-Current assets
Deferred mining and exploration costs 7 7,461,851 4,183,744
Exploration permits and licences 8 2,112,415 1,549,076
Plant and equipment 12 79,602 54,170
Advances and deposits 10 104,192 88,594
Investment at fair value through profit or loss 13 91,761 53,957
-------------- --------------
Total non-current assets 9,849,821 5,929,541
-------------- --------------
Current assets
Cash and cash equivalents 7,746,519 7,327,303
Advances and deposits 10 385,624 -
Trade and other receivables 10 216,595 97,996
-------------- --------------
Total current assets 8,348,738 7,425,299
-------------- --------------
Total assets 18,198,559 13,354,840
Equity
Share premium 14 30,616,373 23,434,385
Retained deficit (13,631,433) (11,177,220)
-------------- --------------
Total equity 16,984,940 12,257,165
Current liabilities
Trade and other payables 11 983,418 1,097,675
Warrant liability 16 230,201 -
-------------- --------------
Total current liabilities 1,213,619 1,097,675
-------------- --------------
Total equity and liabilities 18,198,559 13,354,840
The notes on pages 35 to 59 form an integral part of these
consolidated financial statements.
These financial statements were approved by the Board of
Directors and were signed on their behalf by:
Denham Eke
Director
24 August 2023
Consolidated Statement of Changes in Equity
for the year ended 28 February 2023
Share premium Retained deficit Total equity
US$ US$ US$
Balance at 1 March 2022 23,434,385 (11,177,220) 12,257,165
Total comprehensive loss for the year
Loss for the year - (3,887,588) (3,887,588)
------------ -------------- ------------
Total comprehensive income for the year - (3,887,588) (3,887,588)
Transactions with owners of the Company
Issue of ordinary shares (note 14) 7,729,904 - 7,729,904
Capitalised share issue costs (547,916) - (547,916)
Equity settled share-based payments (note 15) - 1,433,375 1,433,375
------------ -------------- ------------
Total transactions with owners of the Company 7,181,988 1,433,375 8,615,363
------------ -------------- ------------
Balance at 28 February 2023 30,616,373 (13,631,433) 16,984,940
The notes on pages 35 to 59 form an integral part of these
consolidated financial statements.
Consolidated Statement of Changes in Equity (continued)
for the year ended 28 February 2023
Foreign currency translation
Share premium Retained deficit reserve Total equity
US$ US$ US$ US$
Balance at 1 March 2021 9,443,676 (9,056,687) 186 387,175
Total comprehensive loss for
the year
Loss for the year - (3,554,468) - (3,554,468)
------------ -------------- -------------- ------------
Total comprehensive income for
the year - (3,554,468) - (3,554,468)
Transactions with owners of
the Company
Issue of ordinary shares (note
14) 14,404,440 - - 14,404,440
Capitalised share issue costs (413,731) - - (413,731)
Equity settled share-based
payments (note 15) - 1,433,749 - 1,433,749
Transfer to retained deficit - 186 (186) -
------------ -------------- -------------- ------------
Total transactions with owners
of the Company 13,990,709 1,433,935 (186) 15,424,458
------------ -------------- -------------- ------------
Balance at 28 February 2022 23,434,385 (11,177,220) - 12,257,165
The notes on pages 35 to 59 form an integral part of these
consolidated financial statements.
Consolidated Statement of Cash Flows
for the year ended 28 February 2023
Year ended 28 Year ended 28
Notes February 2023 February 2022
US$ US$
Cash flows from operating activities
Loss before income tax (3,887,588) (3,554,468)
Adjusted for non-cash and non-operating items:
Depreciation 12 33,240 1,548
Unrealised loss/(profit) on investment 13 (37,804) (30,225)
Finance income (12,270) -
Non-cash interest expense - 32,832
Equity settled share based payments expense 15 1,148,456 1,433,749
Impairment of deferred mining and exploration costs and
licences and permits 7, 8 19,470 230,230
Deferred mine exploration and licence and permit costs
written off 7, 8 - 116,997
Warrant fair value re-measurement (4,518,470) -
Unrealised FX on cash balances - 203,562
-------------- --------------
(7,254,966) (1,565,775)
Change in trade and other receivables (519,824) (106,913)
Change in trade and other payables (114,253) 1,068,414
-------------- --------------
Net cash flows from operating activities (7,889,043) (604,274)
Cash flows from investing activities
Amounts paid for deferred mining and exploration costs (3,278,107) (2,501,853)
Amounts paid for licences and permits (582,809) (1,119,455)
Interest received 12,270 -
Plant and equipment purchased (58,672) (55,718)
-------------- --------------
Net cash flows from investing activities (3,907,318) (3,677,026)
Cash flows from financing activities
Related party loans received - 60,000
Related party loans settled - (20,000)
Cash received from share issues 12,782,135 12,098,924
Share issue commissions paid (566,558) (413,731)
-------------- --------------
Net cash flows from financing activities 12,215,577 11,725,193
-------------- --------------
Increase in cash and cash equivalents 419,216 7,443,893
Cash and cash equivalents at beginning of year 7,327,303 86,972
Effect of movements in exchange rates - (203,562)
-------------- --------------
Cash balances at end of year 7,746,519 7,327,303
The notes on pages 35 to 59 form an integral part of these
consolidated financial statements.
Bradda Head Lithium Limited
Notes
forming part of the annual report consolidated financial
statements for the year ended 28 February 2023 (continued)
1 Reporting Entity
Bradda Head Lithium Limited (the "Company") is a company
domiciled in the British Virgin Islands. The address of the
Company's registered office is Craigmuir Chambers, Road Town,
Tortola, British Virgin Islands. The Company and its subsidiaries
together are referred to as the "Group".
Bradda Head Lithium Limited is a lithium exploration Group
focused on developing its projects in the USA.
2 Basis of preparation
(a) Statement of compliance
The consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards
(IFRSs).
(b) Basis of measurement
Functional and Presentation Currency
The consolidated financial statements of the Group are presented
in US Dollars (US$), which is also the functional currency of all
entities in the Group. All financial information presented in US
Dollars has been rounded to the nearest dollar.
Critical accounting estimates and judgements
The preparation of the consolidated financial statements
requires management to make judgments, estimates and assumptions
that affect the application of accounting policies and the reported
amounts of assets, liabilities, income and expenses. Actual results
may differ from these estimates.
Estimates and underlying assumptions are reviewed on an on-going
basis. Revisions to accounting estimates are recognised in the
period in which the estimate is revised and in any future periods
affected. Significant estimates and assumptions include those
related to recoverability of mineral properties and determination
as to whether costs are expensed or deferred.
The Company is in the process of exploring its mineral
properties and has not yet determined whether the properties
contain economically recoverable mineral reserves. Including
whether a commercially feasible means of extraction from clay
deposits is established. The recoverability of carrying amounts for
mineral properties is dependent upon the discovery of economically
recoverable mineral reserves, the ability of the Company to obtain
the financing necessary to complete exploration and development,
and the success of future development of the properties. It is also
dependent on all claims being properly legally established.
Judgement is required in applying the Company's accounting
policy for exploration and evaluation assets in determining whether
it is likely that costs incurred will be recovered through
successful exploration and development or sale of the asset under
review when assessing impairment. Furthermore, the assessment as to
whether economically recoverable reserves exist is itself an
estimation process. Estimates and assumptions made may change if
new information becomes available. If information becomes available
suggesting that the recovery of expenditures is unlikely, the
amount capitalised is written off to profit and loss in the period
when the new information becomes available. In situations where
indicators of impairment are present for the Company's exploration
and evaluation assets, estimates of recoverable amount must be
determined as the higher of the estimated value in use or the
estimated fair value less costs to sell. Refer to notes 3, 7 and
8.
Impact of Ukraine conflict on the financial statements
The Directors have considered the ongoing conflict in Ukraine,
and its impact on the Group's operations and information included
in these financial statements. The Group's operations are largely
based in the USA, which currently has seen no direct impact due to
the conflict. The Directors are aware of increases in global oil
and gas prices, which could have an impact on fuel and electricity
prices in the USA, and knock-on price impacts on the Group's USA
based suppliers and contractors. Management is in regular
communication with suppliers and contractors, and no significant
impact has been seen relating to this.
The Group is in a net asset position of US$ 16,984,940 as at 28
February 2023 (28 February 2022: US$ 12,257,165). Given the early
exploration stage of the Group's projects, the Group is not yet
generating any revenue and is incurring expenditure in progressing
its exploration work. Accordingly, the Group incurred a loss
attributable to equity shareholders of US$ 3,887,588 for the year
ended 28 February 2023 (28 February 2022: loss of US$ 3,554,468).
As at 28 February 2023, the Group had cash balances of US$
7,746,519 (2022: US$ 7,327,303).
Further expenditure will be necessary in order for the Group to
progress the projects to a stage where their feasibility can be
assessed and where they may potentially be able to ultimately
generate revenue, if economically viable. Continued operations of
the Group and further progressing its exploration and evaluation
activities is dependent on the Company's ability to obtain
additional financing and generate profitable operations in the
future.
Following the successful completion of the IPO and raising of
the target funds, and an additional fundraise completed during
April 2022, the Group expects to have sufficient cash resources to
be able to complete its existing and ongoing exploration
programmes, and meet any committed operational expenditures as they
fall due, for a period of at least 12 months from the date of
signing the financial statements. If necessary, adjustments can be
made to defer the Group's discretionary exploration expenditure,
based on results of its exploration activities and cash resource
levels whilst maintaining good title to its licenses and permits,
with the level of exploration activities and related expenditure
being full controllable by the Company.
Based on forecasts prepared by Directors, they believe it
remains appropriate to prepare the financial statements on a going
concern basis, taking into consideration the level of cash held by
the Group. The Directors are confident that further funds can be
raised and have a reasonable expectation that the Group will have
adequate resources for its continuing existence and projected
activities for the foreseeable future, and for these reasons,
continue to adopt the going concern basis in preparing the
financial statements for the year ended 28 February 2023.
3 Significant accounting policies
The accounting policies set out below have been applied
consistently to all periods presented in these financial
statements, and have been applied consistently by Group entities
for the period ended 28 February 2023.
Basis of consolidation
The consolidated financial statements for the year ended 28
February 2023 incorporate the financial information of the Company
and entities controlled by the Company (its "subsidiaries"). The
results of subsidiaries are included in the consolidated statement
of comprehensive income from the date on which control is obtained,
and up to the date control is lost.
Business combination
Acquisitions of subsidiaries and businesses are accounted for
using the purchase method. The cost of acquisition is measured at
the aggregate of the fair values (at the date of exchange) of
assets given, liabilities incurred or assumed, and equity
instruments issued by the Group in exchange for control of the
acquiree plus any costs directly attributable to the business
combination.
The acquiree's identifiable assets, liabilities and contingent
liabilities that meet the conditions for recognition under IFRS 3
are recognised at their fair value at the acquisition date, except
for non-current assets (or disposal groups) that are classified as
held for sale in accordance with IFRS 5 'Non-Current Assets Held
for Sale and Discontinued Operations', which are recognised and
measured at fair value less costs to sell.
Non-controlling interest
Non-controlling interests in the net assets of consolidated
subsidiaries are identified separately from the Group's equity
therein. The interests of non-controlling shareholders may be
initially measured at fair value or at the non-controlling
interests' proportionate share of the acquiree's identifiable net
assets which are generally at fair value. Subsequent to
acquisition, the carrying amount of non-controlling interests is
adjusted for the non - controlling interests ' share of subsequent
changes in equity. Total comprehensive income is attributed to
non-controlling interests even if this results in the
non-controlling interests having a deficit balance.
Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income
and expenses arising from intra-group transactions, are eliminated
in preparing the consolidated financial statements. Unrealised
gains arising from transactions with equity accounted investees are
eliminated against the investment to the extent of the Group's
interest in the investee. Unrealised losses are eliminated in the
same way as unrealised gains, but only to the extent that there is
no evidence of impairment.
Foreign currency transactions
Transactions in foreign currencies are translated into
functional currency based on the exchange rates prevailing at the
transaction dates. Foreign currency denominated monetary assets and
liabilities are translated into functional currency at the exchange
rate prevailing at the reporting date. Gains or losses arising from
foreign currency transactions are recognised in the consolidated
statement of comprehensive income.
Non-monetary assets and liabilities denominated in foreign
currencies that are measured at fair value are retranslated to the
functional currency at the exchange rate at the date that the fair
value was determined or if measured at historical cost are
translated using the exchange rate at the date of transaction.
Consolidation of foreign operations
The assets and liabilities of foreign operations are translated
to US Dollars at exchange rates at the reporting date while income
and expenses are translated at exchange rates at date of
transactions although if not practically available, the average
rate for the period is used.
Deferred mine exploration costs
The Group deems that all expenditure incurred in the country of
the project, directly relating to exploratory activities, in
addition to the acquisition costs of an existing, granted
exploration permit or license, is capitalisable as deferred mine
costs once a license or permit has been obtained for exploratory
activities. Pre-license costs are expensed in the period in which
they are incurred. License costs paid in connection with a right to
explore in an existing exploration area are capitalised.
Exploration expenditures relate to the initial search for
mineral deposits with economic potential as well as expenditures
incurred for the purposes of obtaining more information about
existing mineral deposits. Exploration expenditures typically
comprise costs that are directly attributable to:
-- researching and analysing existing exploration data;
-- conducting geological studies;
-- exploratory drilling and sampling for the purposes of
obtaining core samples and the related metallurgical assay of these
cores; and
-- drilling to determine the volume and grade of deposits in an
area known to contain mineral resources or for the purposes of
converting mineral resources into proven and probable reserves.
The assessment of probability is based on the following factors:
results from previous drill programmes; results from a geological
study; results from a mine scoping study confirming economic
viability of the resource; and preliminary estimates of the volume
and grade of the deposit, and the net cash flows expected to be
generated from its development. The application of the Group's
accounting policy for exploration and evaluation expenditure
requires judgment in determining whether future economic benefits
will arise either from future exploitation, or sale, or where
activities have not reached a stage which permits a reasonable
assessment of the existence of reserves. Deferred mine exploration
cost are capitalised to the extent that they do not exceed the
estimated economically recoverable amount from mineral interests.
The deferral policy requires management to make certain estimates
and assumptions about future events or circumstances, in particular
whether an economically viable extraction operation can be
established.
Estimates and assumptions made may change if new information
becomes available. If after expenditure is capitalised, information
becomes available suggesting that the recovery of expenditure is
unlikely, the amount capitalised is written off in the consolidated
statement of comprehensive income in the period when the new
information becomes available. Management reviews the carrying
values of its deferred mine exploration costs at least annually and
whenever events or changes in circumstances indicate that their
carrying values may exceed their estimated net recoverable amounts.
An impairment loss is recognised when the carrying value of those
assets is not recoverable and exceeds their fair value.
These costs are carried forward provided that at least one of
the following conditions is met:
-- the period for which the entity has the right to explore in
the specific area has not expired during the period or will expire
in the near future, and is expected to be renewed;
-- substantive expenditure on further exploration for and
evaluation of mineral resources in the specific area is either
budgeted or planned;
-- such costs are expected to be recouped in full through
successful development and exploration of the area of interest or
alternatively, by its sale; or
-- exploration and evaluation activities in the area of interest
have not yet reached a stage which permits a reasonable assessment
of the existence or otherwise of economically recoverable reserves,
and active and significant operations in relation to the area are
continuing, or planned for the future.
Upon reaching commercial production, these capitalised costs
will be transferred from development properties to producing
properties on the Consolidated Statement of Financial Position and
will be amortised using the unit-of-production method over the
estimated period of economically recoverable reserves.
Exploration permits
Exploration permits acquired by way of an asset acquisition or
business combination are recognised if the asset is separable or
arises from contractual or legal rights. On acquisition of a
mineral property in the exploration stage, an estimate is prepared
of the fair value attributable to the exploration potential,
including mineral resources, if any, of that property. The fair
value of the exploration permits is recorded as an intangible asset
(acquired exploration permits) as at the date of acquisition. When
an exploration stage property moves into development, any acquired
exploration intangible asset balance attributable to that property
is transferred to non-depreciable mining interests within property,
plant and equipment. Impairment testing and the reversal of
impairments are conducted in accordance with the accounting policy
adopted for deferred mine exploration costs.
Mineral property expenses
Mineral property expenses are costs incurred that do not qualify
for capitalisation and are therefore expensed to the profit or loss
as incurred. These include payments for costs incurred prior to
obtaining licenses.
Impairment of tangible and intangible assets excluding
goodwill
At each reporting date, the Group reviews the carrying amounts
of its 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 asset
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 CGU to which the asset belongs. An
intangible asset with an indefinite useful life is tested for
impairment at least annually and whenever there is an indication
that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to
sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a
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 CGU) is estimated to
be less than its carrying amount, the carrying amount of the asset
(CGU) is reduced to its recoverable amount. An impairment loss is
recognised as an expense immediately. Where an impairment loss
subsequently reverses, the carrying amount of the asset (CGU) 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 (CGU) in prior years. A reversal of an
impairment loss is recognised as income immediately.
Financial instruments
Measurement
Financial instruments are initially measured at fair value,
which includes transaction costs. Subsequent to initial recognition
these instruments are measured as set out below:
Trade and other receivables
Trade and other receivables are stated at amortised costs using
the effective interest method less impairment losses.
Cash and cash equivalents
Cash and cash equivalents are measured at amortised costs and
are due on demand.
Financial liabilities
Non-derivative financial liabilities are recognised at amortised
costs using the effective interest method.
Fair value of financial instruments
The Company determines fair values using other valuation
techniques in compliance with IFRS9: Financial Instruments, IFRS13:
Fair Value Measurement, and based on the International Private
Equity and Venture Capital Valuation Guidelines ("IPEV").
For financial instruments that trade infrequently and have
little price transparency, fair value is less objective, and
requires varying degrees of judgement depending on liquidity,
uncertainty of market factors, pricing assumptions and other risks
affecting the specific instrument.
The Company measures fair values using the following fair value
hierarchy that reflects the significance of the inputs used in
making the measurements:
-- Level 1: Inputs that are quoted market prices (unadjusted) in
active markets for identical instruments;
-- Level 2: Inputs other than quoted prices included within
Level 1 that are observable either directly (i.e. as prices) or
indirectly (i.e. derived from prices). This category includes
instruments valued using; quoted market prices in active markets
for similar instruments; quoted prices for identical or similar
instruments in markets that are considered less than active; or
other valuation techniques in which all significant inputs are
directly or indirectly observable from market data; or
-- Level 3: Inputs that are unobservable. This category includes
all instruments for which the valuation technique includes inputs
not based on observable data and the unobservable inputs have a
significant effect on the instrument's valuation. This category
includes instruments that are valued based on quoted prices for
similar instruments but for which significant unobservable
adjustments or assumptions are required to reflect differences
between the instruments.
Various valuation techniques may be applied in determining the
fair value of investments held as Level 3 in the fair value
hierarchy. The objective of valuation techniques is to arrive at a
fair value measurement that reflects the price that would be
received to sell the asset or paid to transfer the liability in an
orderly transaction between market participants at the measurement
date.
Finance income and finance costs
Finance income comprises interest income on funds invested.
Interest income is recognised as it accrues in profit or loss,
using the effective interest method.
Finance costs comprise interest expense on borrowings, unwinding
of the discount on provisions, and losses on hedging instruments
that are recognised in profit or loss. Borrowing costs that are not
directly attributable to the acquisition, construction or
production of a qualifying asset are recognised in profit or loss
using the effective interest method.
Share premium
Ordinary shares are classified as equity. The ordinary shares of
the Company have a nil par value. As such all proceeds received for
the issue of shares has been credited to share premium. Proceeds
from the exercise of stock options or conversion of share purchase
warrants are recorded in share premium at the amount received on
exercise or conversion. Commissions paid to underwriters or agents
and other related share issue costs, such as legal, accounting and
printing, are charged to share premium.
Share based payments
Equity-settled share-based payments are measured at fair value
at the date of grant. The fair value is calculated using the
Black-Scholes option pricing model (where no fair value of the
service or assets provided is evident). The fair value determined
at the grant date of the equity settled share-based payment is
expensed based on the vesting period and based on the Company's
estimate of the number of shares that will eventually vest.
On determining fair values, terms and conditions attaching to
the instruments are taken into account. Management is also required
to make certain assumptions and estimates regarding such items as
the life of instruments, volatility and forfeiture rates. Changes
in the assumptions used to estimate fair value could result in
materially different results.
Segmental reporting
The Directors are of the opinion that the Company is engaged in
a single segment of business, being exploration for lithium in the
USA. Information presented to the Board of Directors for the
purpose of decision making is based on this single segment.
Property and equipment
Property and equipment assets are stated at cost less
accumulated depreciation and accumulated impairment losses.
Depreciation of fixed assets commences when the asset is
available for use. The Company assesses at each reporting date
whether tangible fixed assets are impaired. Depreciation is charged
to the profit and loss account on a straight-line basis over the
estimated useful lives of each part of an item of tangible fixed
assets. The estimated useful lives are as follows:
Owned vehicles - 3 years
Depreciation methods, useful lives and residual values are
reviewed if there is an indication of a significant change since
last annual reporting date in the pattern by which the Company
expects to consume an asset's future economic benefits.
Gain on sale of mining interest
The Group may monetise its future revenue streams by entering
into royalty agreements with investment companies for a given
percentage royalty. This transaction represents a disposal of a
portion of the relevant mineral interest which is subject to the
royalty, which is represented by deferred mine exploration costs
and exploration permits and licences in the financial
statements.
Where the consideration in exchange for the sale of the interest
is variable, the IFRS 15 variable consideration guidance is applied
and the consideration is included in the transaction price only to
the extent that it is highly probable that a significant reversal
of revenue will not occur ('the constraint').
A gain/loss on the sale is recognised in profit or loss.
Royalty payments due, under the royalty agreements, are
recognised as a reduction of revenue as amounts become due and
payable.
3 Significant accounting policies (continued)
New standards and interpretations not yet adopted
A number of new standards, amendments to standards and
interpretations are not yet effective for the current period ended,
and have not been applied in preparing these consolidated
historical financial statements:
New/revised International Accounting Standards Effective date
/ International Financial Reporting Standards (accounting periods
("IAS/IFRS") commencing on or
after)
------------------------------------------------ ---------------------
Deferred Tax related to Assets and Liabilities 1 January 2023
arising from a Single Transaction (Amendments
to IAS 12)
Disclosure of Accounting Policies (Amendments
to IAS 1 and IFRS Practice Statement 2)
Definition of Accounting Estimates (Amendments
to IAS 8)
Classification of Liabilities as Current or 1 January 2024
Non-current (Amendments to IAS 1)
------------------------------------------------ ---------------------
The Directors do not expect the adoption of the standards and
interpretations to have a material impact on the Company's
financial statements in the period of initial application.
4 General and administrative and exceptional cost
The Group's general and administrative expenses include the
following:
Year ended 28 February 2023 Year ended 28 February 2022
US$ US$
Auditors' fees 113,173 134,042
Directors and management fees and salaries 599,824 430,667
Legal and accounting 492,041 667,392
Contractor costs 2,933,852 1,131,515
Professional and marketing costs 1,012,171 802,454
Other administrative costs 729,144 293,202
------------ ------------
Total 5,880,205 3,459,272
5 Gain on sale
On 21 December 2021, the Company completed a royalty agreement
with the Lithium Royalty Corporation ("LRC"). Key terms of the
royalty agreement are:
- LRC has been granted a 2% gross overriding royalty (GOR) over
Bradda Head's sedimentary lithium claims in Arizona (Wikieup
project and Basin project) leaving the Company's pegmatite and
brine projects unencumbered;
- LRC has paid to the Company upon closing the sum of US$2.5
million for granting of the Royalty;
- LRC will pay to the Company an additional US$2.5 million upon
the Company publicly reporting a 1 million tonne lithium carbonate
equivalent (LCE) Mineral Resource with a minimum lithium grade of
800 parts per million (ppm);
- LRC will pay to the Company an additional US$3 million upon
the Company publicly reporting a 2.5 million tonne LCE Mineral
Resource with a minimum lithium grade of 800ppm.
In addition, LRC has also subscribed for US$2 million of new
ordinary shares (along with US$0.5 million via a further
subscription from a LRC director) alongside the royalty closing.
See note 14 for details.
Reconciliation of gain on sale
Year ended 28 February 2022
US$
Initial proceeds received from royalty sale 2,500,000
Less: Deferred mine exploration costs disposal (note 7) (85,383)
Less: Exploration permits and licences disposal (note 8) (31,614)
------------
2,383,003
6 Taxation
Income tax
The British Virgin Islands under the International Business
Companies Act 2004 imposes no corporate taxes or capital gains
taxes.
Zenolith USA LLC, Gray Wash LLC and Verde Grande LLC are
Delaware (USA) limited liability companies that have elected to be
taxed as standard corporations. To date, these companies have been
loss making and therefore no corporation tax is applicable.
The maximum deferred tax asset that could be recognised at year
end is approximately US$ 683,943 (2022: US$ 478,138. The Group has
not recognised any asset as it is not reasonably known whether the
Group will recover such deferred tax assets.
7 Deferred mine exploration costs
The schedule below details the current projects of the Group and
the related exploration costs capitalised:
Total
US$
Cost and net book value
At 29 February 2021 1,767,274
--------------------
Capitalised during the year 2,501,853
Disposal under royalty agreement * (85,383)
--------------------
At 28 February 2022 4,183,744
--------------------
Capitalised during the year 3,278,107
--------------------
At 28 February 2023 7,461,851
--------------------
Cost and net book value
At 28 February 2023 7,461,851
At 28 February 2022 4,183,744
* In terms of the LRC royalty agreement, the Company has sold a 2% royalty on future sales
from its lithium clay assets. The Company has effectively sold 2% of its capitalised deferred
mine exploration costs to date, with this adjustment being recorded to reflect this. See note
5 and 14.
All the deferred mining and exploration expenditure has been
incurred by Zenolith USA LLC, a subsidiary of Bradda Head Limited.
See notes 8 and 9.
Deferred mine exploration costs ("DMEC") represent intangible
assets. Refer to note 8 for details on exploration permits and
licences held.
The recoverability of the carrying amounts of exploration and
evaluation assets is dependent on the successful development and
commercial exploitation or sale of the respective area of interest,
as well as maintaining the assets in good standing. The Group
assessed the DMEC relating to areas for which licenses and permits
are held for impairment as at 28 February 2023.
The Board reviewed the projects held and concluded that no facts
and circumstances have been identified which suggest the
recoverable amount of these assets would not exceed the carrying
amount and, as such, no impairment was recognised.
8 Exploration permits and licences
The schedule below details the current projects of the Group and
the related exploration permit and licence costs capitalised:
Total
US$
Cost and net book value
At 28 February 2021 691,465
--------------------
Capitalised during the year 1,119,455
Disposal under royalty agreement * (31,614)
Impairment (230,230)
--------------------
At 28 February 2022 1,549,076
Capitalised during the year 582,809
Impairment (19,470)
--------------------
At 28 February 2023 2,112,415
Cost and net book value
At 28 February 2023 2,112,415
At 28 February 2022 1,549,076
* In terms of the LRC royalty agreement, the Company has sold a 2% royalty on future sales
from its lithium clay assets. The Company has effectively sold 2% of its capitalised deferred
mine exploration costs to date, with this adjustment being recorded to reflect this. See note
5 and 14.
The licences and permits are held through indirect subsidiaries
of the Company. See note 9.
The Group assessed the carrying amount of the licences and
permits held for impairment as at 28 February 2023. Upon review, it
was identified that certain projects showed signs of impairment as
the relevant project licences and permits were not renewed, and
thus an impairment charge of US$ 19,470 was recognised during the
year ended 28 February 2023 (28 February 2022: US$ 230,230).
The Board reviewed the rest of the projects held and concluded
that no facts and circumstances have been identified which suggest
the recoverable amount of these assets would not exceed the
carrying amount and, as such, no impairment was recognised.
USA
The USA exploration permits and licences are held by Zenolith
(USA) LLC ("Zenolith"), Gray Wash LLC and Verde Grande LLC,
subsidiaries of Bradda Head (see note 9). Zenolith holds licences
and permits over land in the states of Nevada and Arizona, USA,
which provide Zenolith with exclusive rights to explore for
lithium. Gray Wash and Verde Grande hold licences over land in the
state of Arizona.
9 Investment in subsidiary undertakings
As at 28 February 2023 and 28 February 2022, the Group had the
following subsidiaries:
Name of company Place of Ownership Principal activity
incorporation interest
Bradda Head Limited* BVI 100% Holding company of entities
below
Zenolith (USA) LLC USA 100% Holds USA lithium licences
and permits
Verde Grande LLC USA 100% Holds USA lithium licences
and permits
Gray Wash LLC USA 100% Holds USA lithium licences
and permits
Minera Salmuera, Mexico 100% In process of being liquidated
S.A. de C.V.
* Held directly by the Company. All other holdings are
indirectly held through Bradda Head Limited
The consolidated financial statements include the results of the
subsidiaries from the date that control is obtained to 28 February
2023, and up to the date that control ceases.
10 Prepayments and advances and deposits
Non-current
28 February 2023 28 February 2022
US$ US$
Advances and deposits 104,192 88,594
Current
28 February 2023 28 February 2022
US$ US$
Prepayments 216,595 97,996
Advances and deposits 385,624 -
11 Trade and other payables
28 February 2023 28 February 2022
US$ US$
Accounts payable 904,944 1,019,175
Accrued expenses and other payables 78,474 78,500
------------ ------------
983,418 1,097,675
12 Plant and equipment
Motor vehicle Total
Cost US$ US$
As at 1 March 2022 55,718 55,718
Additions during the year 58,672 58,672
------------ ------------
As at 28 February 2023 114,390 114,390
Motor vehicle Total
Accumulated depreciation US$ US$
As at 1 March 2022 (1,548) (1,548)
Depreciation charge for the year (33,240) (33,240)
------------ ------------
As at 28 February 2023 (34,788) (34,788)
Carrying amount
As at 28 February 2023 79,602 79,602
As at 28 February 2022 54,170 54,170
13 Investment at fair value through profit or loss
On 1 July 2011, the Company acquired, by way of private
placement, a strategic investment in Crazy Horse Resources Inc.
(which changed its name to Rockwealth Resources Inc ("RWR"), a
copper and gold company traded on the TSX Venture Exchange, which
owns the Taysan Project, an advanced copper gold porphyry deposit
located 100 km south of Manila in the Philippines. On 6 December
2021, RWR changed its name to Strathmore Plus Energy Corp. On 22
September 2022, Strathmore Plus Energy Corp changed its name to
Strathmore Plus Uranium Corp and its TSX-V ticker to SUU.
As at 28 February 2023, the Company holds 249,688 shares in SUU
(2022: 249,688 shares).
This investment is classified as financial asset at fair value
through profit or loss. For valuation purposes, it was valued using
the closing bid price as at the reporting period.
28 February 2023 28 February 2022
Total number of shares held 249,688 249,688
US$ US$
Market value of investment at closing bid price 91,760 53,957
Total cost (5,861,409) (5,861,409)
-------------- --------------
Unrealised loss on investment (5,769,649) (5,807,452)
In line with IFRS13: Fair Value Measurement, and based on the
International Private Equity and Venture Capital Valuation
Guidelines ("IPEV"), the investment held is considered to be level
2 in the fair value hierarchy, due to there being a lack of an
active market for the traded shares.
The unrealised loss on the investment in SUU charged to the
Consolidated Statement of Comprehensive Income and movement in
investment fair value is as follows:
US$
Balance at 28 February 2021 23,732
Change in fair value 30,225
--------------
Balance at 28 February 2022 53,957
Change in fair value 37,804
--------------
Balance at 28 February 2023 91,761
14 Share premium
Authorised
The Company is authorised to issue an unlimited number of nil
par value shares of a single class.
Shares Share Share premium
capital
Issued ordinary shares of US$0.00 US$ US$
each
At 28 February 2021 75,040,282 - 9,443,676
Shares issued for cash 158,499,941 - 12,098,924
Shares issued to settle loans 48,618,529 - 2,159,722
Shares issued in lieu of Directors
fees 3,037,362 - 145,794
Shares issued to Zenith Minerals
Limited 32,217,765 -
Share issue costs capitalised - - (413,731)
-------------- -------------- --------------
At 28 February 2022 317,413,879 - 23,434,385
Shares issued for cash (note 16) 73,195,560 - 7,729,904
Share issue costs capitalised - - (547,916)
-------------- -------------- --------------
At 28 February 2023 390,609,439 - 30,616,373
On 13 April 2022, the Company completed a fundraise, issuing
73,195,560 ordinary shares for gross proceeds of US$ 12.9 million.
Refer to note 16.
15 Equity settled share based payments
The cost of equity settled transactions with certain Directors
of the Company and other participants ("Participants") is measured
by reference to the fair value at the date on which they are
granted. The fair value is determined based on the Black-Scholes
option pricing model.
Options and warrants
The total number of share options and warrants in issue as at
the period end is set out below.
Recipient Grant Term Exercise Number at Number Issued Number Lapsed/ Number 28 February Fair value
Date in Price March 1, 2022 cancelled/expired Exercised 2023
years
Options US$
Directors and
Participants April 2018 5 US$ 0.15668 1,606,304 - - - 1,606,304 24,028
Directors and
Participants June 2021 5 US$ 0.048 18,000,000 - - - 18,000,000 1,110,556
Directors and
Participants September 2021 5 GBP0.09 4,000,000 - (500,000) - 3,500,000 314,962
Directors and
Participants April 2022 5 GBP0.18 - 9,200,000 (275,000) - 8,925,000 1,089,312
Directors and
Participants December 2022 5 GBP0.105 - 1,000,000 - - 1,000,000 273,727
Warrants
Supplier
warrants July 2021 5 GBP0.0550 1,818,182 - - - 1,818,182 124,482
Supplier
warrants July 2021 3 GBP0.0825 2,254,545 - - - 2,254,545 8,275
Shareholder
warrants December 2021 2 GBP0.0885 1,185,687 - - - 1,185,687 44,858
Supplier
warrants April 2022 2 GBP0.1350 - 3,244,331 - - 3,244,331 284,918
-------------- -------------- -------------- -------------- -------------- --------------
28,864,718 13,444,331 (775,000) - 41,534,049 3,275,118
Recipient Grant Term Exercise 1 March 2021 Issued Lapsed Exercised 28 February Fair value
Date in Price 2022
years
US$
Directors and
Participants April 2018 5 US$ 0.15668 1,606,304 - - - 1,606,304 24,028
Directors and
Participants June 2021 5 US$ 0.048 - 18,000,000 - - 18,000,000 1,110,556
Directors and September
Participants 2021 5 GBP0.09 - 4,000,000 - - 4,000,000 314,962
-------------- -------------- -------------- -------------- -------------- --------------
1,606,304 22,000,000 - - 23,606,304 1,449,546
The amount expensed in the income statement has been calculated
by reference to the fair value at the grant date of the equity
instrument and the estimated number of equity instruments to vest
after the vesting period.
28 Febraury 2023 28 February 2022
US$ US$
US$ US$
Share based payments charge 1,148,456 1,433,749
The inputs used in the measurement of the fair values at grant
date of the equity-settled share-based payment plans issued during
the period are as follows:
April 2022 options Award date and exercise price
Fair value at grant date GBP0.09308
Exercise price GBP0.180
Weight average expected volatility 81.90%
Weighted average expected life (years) 5
Risk-free interest rate (based on comparable companies) 1.52%
Terms of the issued options are as follows:
- 8,925,000 options have been granted and are subject to the
three independent vesting conditions for 1/3 of the entitlement,
relating to the successful fund raising in respect of the Group's
operational budget, commencement of a drilling program in respect
of the San Domingo project and resolution of certain Wickieup
project title claims. All un-exercised options expire after a
period of 5 years from grant date. It is assumed that options are
exercised within 5 years from date of grant. The applied volatility
is based on historical volatility.
December 2022 options Award date and exercise price
Fair value at grant date GBP0.0486
Exercise price GBP0.105
Weight average expected volatility 71.50%
Weighted average expected life (years) 5
Risk-free interest rate (based on comparable companies) 4.24%
Terms of the issued options are as follows:
- 1,000,000 options have been granted that vest fully on grant
date. All un-exercised options expire after a period of 5 years
from admission date. It is assumed that options are exercised
within 5 years from date of grant. The applied volatility is based
on historical volatility.
April 2022 supplier warrants Award date and exercise price
Fair value at grant date GBP0.06697
Exercise price GBP0.135
Weight average expected volatility 81.90%
Weighted average expected life (years) 2
Risk-free interest rate (based on comparable companies) 0.80%
Terms of the issued warrants are as follows:
- As part of the fundraise completed during April 2022, certain
service providers of the Company received warrants for services
rendered. As a result, 3,244,331 warrants have been issued. All
un-exercised warrants expire after a period of 2 years from grant
date. It is assumed that warrants are exercised within 2 years from
date of grant. The applied volatility is based on historical
volatility.
16 Warrants
The cost of equity warrants granted during the period are
measured by reference to the fair value at the date on which they
are granted. The fair value is determined based on the
Black-Scholes option pricing model.
During year ended 28 February 2023, the Company awarded warrants
to investors who participated in the fundraise completed during
April 2022.
The total number of warrants in issue as at the period end is
set out below.
Recipient Grant Term Exercise Warrants at 1 Number of Number of Number of Number of Fair value
Date in Price March 2022 Warrants Warrants Lapsed/ Warrants Warrants at 28
years Issued cancelled/expired Exercised February 2023
Warrants US$
Shareholder April
warrants 2022 2 GBP0.2100 - 73,195,560 - - 73,195,560 230,201
-------------- -------------- -------------- -------------- -------------- --------------
- 73,195,560 - - 73,195,560 230,201
The fair value applied to the shareholder warrants has been
classified as a financial liability. At the date of grant the fair
value of shareholder warrants of US$ 4,748,671 was deducted from
the gross proceeds raised against share premium. At period end, the
warrant liability has been re-measured to fair value, with a
corresponding entry to profit and loss of US$ 4,518,470 (28
February 2022: Nil) within Warrant Fair Value Re-Measurement.
Reconciliation of warrant liability fair value:
Fair value
US$
Balance at March 1, 2022 -
Warrants issued during the period included within share premium 4,748,671
Fair value re-measurement through profit or loss (4,518,470)
--------------
Balance at 28 Febraury 2023 230,201
17 Financial instruments
Financial risk management
The Company has risk management policies that systematically
review the risks that could prevent the Company from achieving its
objectives. These policies are intended to manage risks identified
in such a way that opportunities to deliver the Company's
objectives are achieved. The Company's risk management takes place
in the context of day-to-day operations and normal business
processes such as strategic planning and business planning.
Management has identified each risk and is responsible for
coordinating and continuously improving risk strategies, processes
and measures in accordance with the Company's established business
objectives.
The Company's principal financial instruments consist of cash,
receivables and payables arising from its operations and
activities. The main risks arising from the Company's financial
instruments and the policies for managing each of these risks are
summarised below.
Liquidity risk
Liquidity risk is the risk that the Company will encounter
difficulty in meeting the obligations associated with its financial
liabilities that are settled by delivering cash or another
financial asset.
Liquidity risk is managed by the Company by means of cash flow
planning to ensure that future cash requirements are anticipated.
All liabilities are due within one month and all cash maintained in
call accounts. To date the Company has relied upon equity funding
to finance operations. The carrying amount of financial assets and
liabilities reported in the consolidated statement of financial
position represents the maximum exposure to liquidity risk.
Management is confident that adequate resources are available to
meet current obligations. See note 2(b) in respect of the Board's
going concern assessment, and note 19 regarding exploration
commitments.
The residual undiscounted contractual maturities of financial
liabilities are as follows:
28 February 2023
Less than 1 month 1-3 months 3 months to 1 year 1-5 years Over 5 years
US$ US$ US$ US$ US$
Trade and other payables 983,418 - - - -
------------------------- ------------------ ----------- ------------------- ---------- -------------
28 February 2022
Less than 1 month 1-3 months 3 months to 1 year 1-5 years Over 5 years
US$ US$ US$ US$ US$
Trade and other payables 1,097,675 - - - -
------------------------- ------------------ ----------- ------------------- ---------- -------------
Credit risk
Credit risk is the risk of loss associated with the
counter-party's inability to fulfil its payment obligations. The
Company's credit risk is primarily attributable to receivables and
cash balances with the maximum exposure being the reported balance
in the statement of financial position. The Company holds available
cash with licensed banks which have strong history. The Company
considers the credit ratings of banks in which it holds funds in
order to reduce exposure to credit risk. All funds are available on
demand.
The receivables are actively monitored to avoid significant
concentration of credit risk and the Directors consider there to be
no significant concentration of credit risk.
Interest rate exposure
Interest rate risk is the risk that the Company will sustain
losses through adverse movements in interest bearing assets or
liabilities; however, it is the Directors' opinion that the Company
is not significantly exposed to interest rate risk. Any
interest-bearing liabilities carry fixed interest rates and are not
exposed to interest rate fluctuations.
Market price risk
Equity price risk arises from financial assets at fair value
through profit or loss due to uncertainties about future values of
the instrument. The investment at year end represents an interest
held in the share capital of Strathmore Plus Uranmium Corp, a
company traded on the TSX Venture Exchange. The performance of this
investment is monitored and reviewed by management on a regular
basis. As at 28 February 2023, the fair value of equity security
exposed to price risk was US$ 91,760 (2023: US$ 53,957). A 5%
increase or decrease in the fair value of this listed investment,
with all other variables constant, would have increased/decreased
consolidated profit or loss and equity by US$ 4,588 (2022: US$
2,698).
Foreign exchange risk
The Group was exposed to foreign currency risk on fluctuations
related to financial assets and liabilities that are denominated in
Pounds (GBP). The amounts exposed to foreign currency risk are as
follows (in currency balance):
GBP
28 February 2023 Cash 4,374,471
GBP
28 February 2022 Cash 448,661
The impact of 10% strengthening of the GBP against the US Dollar
to total comprehensive income/loss is set-out below. A 10%
weakening in these currencies would have had the equal but opposite
effect, on the basis that all other variables remain constant.
28 February 2023 28 February 2022
US Dollars against: US$ US$
GBP 528,129 60,824
There is no other impact on the Company's equity other than
those already affecting the consolidated statement of comprehensive
income/(loss).
Political risks
The Company's operations are subject to laws and regulations
governing exploration activities. While the Company believes that
it is in substantial compliance with all material current laws and
regulations affecting its activities, future changes in laws and
regulations could result in changes in legal requirements or in the
terms of existing agreements applicable to the Company which could
have a material adverse impact on the Company's current operations
or planned implementation of its strategy.
Accounting classifications and fair value
Financial instruments comprise cash and trade and other
receivables (classified as loans and receivables), accounts payable
and accrued expenses (classified as trade and other payables),
investments and convertible loan notes and working capital loan
advances (classified as related party balances). The carrying
amounts of loans and receivables and trade and other payables,
reported in the consolidated statement of financial position,
approximate their fair values due to the short-term nature of these
accounts.
The related party balances consist of convertible loan notes,
which have fixed interest rates and specified repayment terms and
conditions. These have been classified as non-current. The
convertible loan notes accrue interest, with the rate being charged
considered to be similar to market related rates for similar type
instruments. Fair value is therefore considered to approximate the
carrying value of these instruments.
The working capital loan facility has a repayment term of one
year, and has therefore been classified as a current asset.
Financial liabilities not measured at fair value
Carrying amount, measured at amortised cost
28 February 2023 28 February 2022
US$ US$
Trade and other payables 983,418 1,097,675
The fair value of investments is based on available market price
data, taking into account the liquidity of the listed
securities.
Capital Management
The Company manages its capital to maximise the return to the
shareholders through the optimisation of equity. The capital
structure of the Company at 28 February 2023 consists of equity
attributable to equity holders of the Company, comprising issued
capital, reserves and retained earnings as disclosed.
The Company manages its capital structure and makes adjustments
to it, in light of economic conditions and the strategy approved by
shareholders. To maintain or adjust the capital structure, the
Company may adjust any dividend payment to shareholders, return
capital to shareholders or issue new shares and release the
Company's share premium account. No changes were made in the
objectives, policies or processes during the years ended 28
February 2022.
18 Related party transactions and balances
Key management personnel
The Directors of the Company received the following remuneration
during the year:
28 February 2023
US$ US$ US$
Fees and salary Share-based payment remuneration Total
Charles FitzRoy 169,105 576,243 745,348
Ian Stalker 142,000 432,182 574,182
Euan Jenkins 47,333 29,572 76,905
Denham Eke 57,345 - 57,345
Jim Mellon 47,333 - 47,333
Alex Borrelli 47,333 29,572 76,905
-------------- -------------- --------------
510,449 1,067,569 * 1,578,018
* The fair value of the options issued has been determined in line with the requirements of
IFRS. Refer to note 3 and 15 for the basis of calculatuion.
28 February 2022
US$ US$ US$
Fees and salary Share-based payment remuneration Total
Charles FitzRoy 149,233 395,750 544,983
Ian Stalker 120,000 900,494 1,020,494
Euan Jenkins 40,000 - 40,000
Denham Eke 40,956 - 40,956
Jim Mellon 30,000 - 30,000
Alex Borrelli 30,000 - 30,000
-------------- -------------- --------------
410,189 1,296,244 * 1,706,433
* The fair value of the options issued has been determined in line with the requirements of
IFRS. Refer to note 3 and 15 for the basis of calculatuion.
The Directors hold the following number of shares in the Company
as at 28 February 2023:
28 February 2023 28 February 2022
% of issued Options held % of issued Options held
Number share capital Number share capital
James Mellon 65,097,004 16.67% - 64,145,176 20.21% -
Denham Eke 124,307 0.03% - 124,307 0.04% -
Ian Stalker 3,870,140 0.99% 17,250,000 3,616,267 1.14% 14,250,000
Charles FitzRoy 13,265 0.00% 10,000,000 11,091 0.003% 6,000,000
Euan Jenkins 2,198,934 0.56% 500,000 2,055,454 0.65% -
Alex Borrelli 343,329 0.09% 500,000 315,649 0.10% -
------------ ------------ ------------ ------------ ------------ ------------
71,646,979 18.34% 28,250,000 70,267,944 22.143% 20,250,000
Burnbrae Limited
The Company and its subsidiary, Bradda Head Limited, entered
into service agreements with Burnbrae Limited ("Burnbrae") for the
provision of administrative and general office services. Denham Eke
and James Mellon are Directors of both Burnbrae Limited and the
Company. James Mellon indirectly owns Burnbrae Limited. A monthly
fee of GBP3,500 is charged by Burnbrae, for the provision of the
services. The service agreement was terminated effective from 31
May 2021.
During the year ended 28 February 2023, the Group incurred costs
of US$ Nil (2022: US$ 47,065) under these agreements, of which US$
Nil was outstanding as at the year-end (2022: US$ Nil).
Galloway Limited
On 16 August 2019, the Company entered into a Convertible Loan
Agreement ("Loan") with Galloway Limited ("Galloway"), to the value
of US$ 350,000. The Loan has a repayment date of 31 December 2019,
and carries interest at a rate of 10% per annum. On 13 December
2019, the repayment date was extended to 31 December 2024. The Loan
shall automatically be converted into shares in the capital of the
Company on Admission at the Issue Price.
On 09 December 2019, the Company entered into a Convertible Loan
Note ("CLN") agreement with Galloway, to the value of GBP650,000.
The CLN has a maturity date of 30 April 2020, and carries interest
at a rate of 5% per annum. On 1 October 2020, the repayment date
was extended to 31 December 2024. The CLN is to be converted into
ordinary shares of the Company on the occurrence of either (i) a
sale of the entire issued share capital of the Company (ii) a
listing of the Company's shares or (iii) upon completion of a
fundraising of $1,000,000 or more in a single fundraise round. The
number of shares to be issued upon conversion is determined as
follows:
-- On a fund raising a price per share being a 20% discount to
the price per share paid by the investors on the Fund Raising;
or
-- On a share sale, a price per Share being a 20% discount to
the price per share paid on the share sale; or
-- On a listing, including by way of reverse takeover, a 20%
discount to the price at which the shares are proposed to be
admitted to listing (or the implied price per share paid by a buyer
in the case of a reverse takeover); or
-- In the event there is no eligible fund raising, or share sale
or no listing by the maturity date the default price, being US$
0.05 per share.
On 17 February 2021, the Company entered into a Term Loan
Facility ("Term Loan") with Galloway, to the value of US$ 500,000.
The loan is interest-free, and repayable on the earlier of 17
February 2022 or upon the completion of a fundraise by the
Company.
On 9 April 2021, Galloway advanced US$ 60,000 to the Company for
working capital purposes.
On 21 May 2021, the Company completed a private funding round.
Following this and in line with the CLN and Term Loan agreements,
balances due to Galloway under these agreements were settled, in
full, by the issuance of 41,033,776 ordinary shares.
On 19 July 2021, the Company completed a successful listing on
London AIM. Following this and in line with the Loan agreement, all
balances due to Galloway were settled, in full, by the issuance of
7,584,753 ordinary shares.
Edgewater Associates Limited ("Edgewater")
During the year, Directors and Officers insurance was obtained
through Edgewater, which is a 100% subsidiary of Manx Financial
Group ("MFG"). James Mellon and Denham Eke are Directors of both
the Company and MFG.
The premium payable on the policy was US$ 49,318 (2022: US$
45,139), of which US$ 14,497 was prepaid as at the period end
(2022: US$ 13,646).
19 Basic and diluted loss per share
The calculation of the basic earnings per share is based on the
earnings attributable to ordinary shareholders divided by the
weighted average number of shares in issue during the year.
The calculation of diluted earnings per share is based on the
basic earnings per share, adjusted to allow for the issue of
shares, on the assumed conversion of all dilutive share
options.
An adjustment for the dilutive effect of share options in the
current year has not been reflected in the calculation of the
diluted loss per share, as the effect would have been
anti-dilutive, due the Company recognising a loss for the year.
28 February 2023 28 February 2022
US$ US$
--------------------------------------------------------- ---------------- ------------------
Loss for the year (3,887,588) (3,554,468)
--------------------------------------------------------- ---------------- ----------------
No. No.
--------------------------------------------------------- ---------------- ------------------
Weighted average number of ordinary shares in issue 381,785,865 124,499,956
Dilutive element of share options if exercised (note 15) 33,031,304 23,606,304
--------------------------------------------------------- ---------------- ------------------
Diluted number of ordinary shares 414,817,169 148,106,260
--------------------------------------------------------- ---------------- ------------------
Basic earnings per share (cents) (1.018) (2.855)
--------------------------------------------------------- ---------------- ----------------
Diluted earnings per share (cents) (1.018) (2.855)
--------------------------------------------------------- ---------------- ----------------
The earnings applied are the same for both basic and diluted
earnings calculations per share as there are no dilutive effects to
be applied.
20 Exploration commitments
The Group has certain obligations to expend minimum amounts on
exploration works on mining tenements in order to retain an
interest in them, which would be approximately US$ 432,029 during
the next 12 months. This includes annual fees in respect of licence
renewals. These obligations may be varied from time to time,
subject to approval and are expected to be filled in the normal
course of exploration and development activities of the
Company.
21 Subsequent events
No subsequent events have occurred that require disclosure.
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END
FR PPUAGRUPWUAA
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August 25, 2023 02:00 ET (06:00 GMT)
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