TIDMCRCL
RNS Number : 0168H
Corcel PLC
01 December 2020
Corcel PLC
("Corcel" or the "Company")
Final Audited Results
for the Year Ended 30 June 2020
01 December 2020
A copy of the Company's Annual Report and Financial Statements
for 2020, extracts from which are set out below, will be made
available on the Company's website www.corcelplc.com shortly and at
the Annual General Meeting to be held on 30 December 2020.
Chairman and CEO Statement
Overview
The twelve months period to 30 June 2020 has seen the Corcel Plc
(previously Regency Mines Plc) ("the Company", "Corcel") story
materially transformed.
We are delighted to report that Corcel today, despite a highly
challenging period driven by the global pandemic, is progressing a
balanced portfolio of mineral exploration projects, coupled with UK
based energy generation and storage at the intersection of battery
metals mining and their end use in both energy storage and the
electric vehicle revolution. We believe Corcel, with its revamped
strategy, fresh capital structure and re-energised team, following
the December 2019 relaunch, is now well positioned to take
advantage of the growing trends, underpinning the world's
transition to a low carbon economy.
We, therefore, are pleased to present the Annual Report and
Accounts for the year to 30 June 2020.
Battery Metals Exploration: PNG and Canada
The Company made good progress at its legacy Mambare
nickel-cobalt project in Papua New Guinea, where it was focused on
both resolving a historic partner dispute and re-initiating
exploration activity, with a view to securing a mining lease
covering the project. Nickel is a core battery metal with a supply
crunch widely expected in the mid-2020s as the electric vehicle
revolution gains pace.
On 7 April 2020, the Company successfully resolved a historic
partner dispute and announced the terms of a settlement covering
historic expenditures, which saw the Company reduce its immediate
interest in Mambare to 41% and pay USD 50,000 in cash, issue
4,909,610 new ordinary shares and issue 4,909,610 warrants to its
partner, Battery Metals Pty Ltd, who simultaneously waived all
claims. The parties, at the same time, executed an amendment to
their development agreement and are now aligned and working
productively together.
The Company also conducted, during the period, the first
exploration activities at Mambare since 2012, including 230km of
line-cutting, followed by a ground penetrating radar programme,
executed to support 200km of surveys. This program was designed to
both increase understanding of the critical and previously
underexplored plateau, while facilitating the application of a
mining lease and associated permitting. The Company, through its
partners, is currently engaging with the permitting authorities,
government and local communities in PNG to renew the EL1390
exploration licence and to secure a new mining lease. The Company
announced on 14 July 2020 that the Joint Venture partner had
reported a successful Warden's Hearing, an important milestone in
the process of applying for a mining license in PNG, and the first
of its kind in the Oro province. The Company is targeting the
development of a direct shipping ore operation, with short lead
times, low capital requirements, no processing plant and associated
chemicals and no pipeline or tailings.
With a view to acquiring battery metal resources, prior to the
expected structural price increases, and introducing a second PNG
project that is potentially highly complementary to Mambare, the
Company announced on 7 April 2020 the partial purchase of the
corporate debt of Resource Mining Corporation Pty Ltd (ASX: RMI)
("RMI"), the 100% owner of the WoWo Gap nickel-cobalt project in
Papua New Guinea ("PNG"). RMI currently has a renewal application
pending, covering the EL1165 exploration license, encompassing the
WoWo gap project. The acquisition involved the Company purchasing
AUD 1.7 million of debt in RMI for a consideration of GBP178,096
cash and 13,288,982 new ordinary shares of the Company
(representing a 62% discount to the face value of the debt or at
full face value an effective issue price of Regency Mines Plc
shares of 5 pence, a 376% premium to the prevailing share price.
The Company is looking for ways to coordinate and explore synergies
between the two PNG projects and teams, with a view to pursuing
regional organic growth and development in an operationally
effective and cost-efficient manner. After the year-end, on 28
October 2020, the Company announced that it had exercised its
option to acquire the balance of the RMI debt on the same terms,
and on 17 November 2020 announced that the transaction had
completed. Hence, the Company is currently positioned as senior
lender to RMI with some AUD 4 million of debt.
The Company also, after the period end, completed its 2020 field
programme at the Dempster Vanadium project in the Yukon. This
included a soil geochemical survey to define drill targets ready
for a potential 2021 drill programme, primarily focused on a 3km
segment, where no work had been done previously. Results are
expected in the near term from the laboratory in Canada, where
COVID-19 related delays had been encountered.
Flexible Grid Solutions
The Company sees significant opportunity in projects, which
support both grid load / frequency, balancing alongside flexible
distributed clean energy production and storage. These energy
storage and production projects, with their low-risk near-term cash
flow potential, will offer Corcel investors an attractive balance
to the significant blue-sky upside of the Company's battery metals
projects.
With a view to expanding the Company's exposure to this
opportunity set, the Company purchased on 19 June 2020, a 50%
interest in Weirs Drove Development Ltd ("WDD"), a developer of
energy storage and solar projects in the United Kingdom. The WDD
portfolio comprises a number of battery storage projects, including
the flagship energy storage project in Burwell, Cambridgeshire,
which benefits from an offtake offer from Limejump Ltd, a
subsidiary of Shell New Energies. The transaction consideration was
a combination of GBP25,000 in cash and a further GBP100,000 loan
upon the first WDD energy storage project reaching "shovel ready"
status.
WDD has made progress at the Burwell site and, as announced on
22 September 2020, has secured both local planning permission and
the required grid connection. The Company is now in the process of
finalising the land lease, assessing final project economics and
validating procurement timelines, all with a view to either
initiating discussions with project funders (likely at an SPV
level) or considering a quick sale of the project to a third party.
The Company expects to update shareholders on progress shortly.
The Company is also delighted to be supported by ion Ventures, a
privately owned developer of clean energy projects, who provide
first class technical advice under a MOU signed in December
2019.
During the period, the Company was also maturing a site in the
Southport Energy Centre, located North of Liverpool however, the
Burwell site in Cambridgeshire and other flexible power generation
and storage opportunities now remain the Company's primary focus in
the UK.
Other Investments
During the period, the Company divested of its shareholdings in
Curzon Energy Plc and Red Rock Resources Plc. The Company does not
currently intend to hold significant positions in other listed
Companies.
Corporate
The Company underwent a complete restructuring of its balance
sheet and strategy in December 2019 coupled with a refreshing of
the Board, including the introduction of James Parsons as Executive
Chairman. The previous Chairman of the Company, Andrew Bell,
retired from the Board on 12 September 2019 after a period of
transition. As part of the restructuring, various debtors converted
GBP1.1 million of debt to equity, while creating a balance of new
loan notes totalling GBP0.762 million with an 8% interest rate and
no payments due until December 2021. The Company's Chairman is a
shareholder and Director of C4 Energy Limited, who as announced on
5 December 2019, hold an option to acquire the entire outstanding
debt. This debt restructuring was accompanied by the raising of
GBP0.830 million of new equity capital. Further capital raises of
GBP0.470 million and GBP0.210 million were completed in April and
June 2020, alongside the acquisitions of the RMI debt and the
interest in WDD. The loan notes, which were restructured in
December 2019 had previously been refinanced in July 2019.
After the period end, the Company (previously known as Regency
Mines Plc) changed its name to Corcel Plc. The purpose of the name
change was to more closely reflect the Company's strategy to
develop its businesses across the battery metals exploration and
flexible grid solutions space.
Discussion of Results
The Group incurred a loss of GBP1.482 million in the period
ended 30 June 2020. Exploration expenses increased to GBP0.205
million (2019: GBP0.069 million), reflecting increased levels of
activity at the Mambare project in PNG. Finance costs over the year
totalled to GBP0.247 million, reflecting interest and finance fees
(2019: GBP0.377million). Overall, administrative costs increased
slightly for the year to GBP0.838 million (2019: GBP0.653 million),
reflecting the costs associated with the transition of the Board
during the period.
Prospects
Overall, after a focused period of restructuring, rebranding and
clean up, and despite the highly challenging external environment,
we believe shareholders have good cause to be optimistic about the
future of Corcel Plc. We thank our shareholders for their support
and wish them, our advisors, staff and their families safe passage
through these turbulent times.
We both remain committed to building Corcel into a substantial
value generating business, supporting the transition to electric
vehicles and a lower carbon economy.
James Parsons Scott Kaintz
Executive Chairman Chief Executive Officer
Results and Dividends
The Group made a loss after taxation of GBP1.482 million (2019:
GBP2.608 million). The Directors do not recommend the payment of a
dividend. The following financial statements are extracted from the
audited financial statements, which were approved by the Board of
Directors and authorised for issuance on 30 November 2020.
For further information, please contact:
Scott Kaintz 020 7747 9960 CEO Corcel Plc
Roland Cornish/ Rosalind Hill Abrahams 020 7628 3396 NOMAD Beaumont Cornish Limited
Thomas Smith 020 7392 1432 Broker Monecor (London) Ltd (ETX
Capital)
Simon Woods 0207 3900 230 IR Vigo Communications
This announcement contains inside information under Article 7 of
Regulation (EU) 596/2014 .
Independent Auditor's Report
to the members of Corcel Plc (former Regency Mines Plc)
Opinion
We have audited the financial statements of Corcel Plc (the
'parent company') and its subsidiaries (the 'group') for the year
ended 30 June 2020, which comprise the Consolidated and Parent
Company Statements of Financial Position, the Consolidated Income
Statement, the Consolidated Statement of Comprehensive Income, the
Consolidated and Parent Company Statements of Changes in Equity,
the Consolidated and Parent Company Statements 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 adopted by
the European Union and as regards the parent company financial
statements, as applied in accordance with the provisions of the
Companies Act 2006.
In our opinion:
-- the financial statements give a true and fair view of the
state of the Group's and of the Parent Company's affairs as at 30
June 2020 and of the Group's and Parent Company's loss for the year
then ended;
-- the Group Financial Statements have been properly prepared in
accordance with IFRSs as adopted by the European Union;
-- the parent company financial statements have been properly
prepared in accordance with IFRSs as adopted by the European Union
and as applied in accordance with the provisions of the Companies
Act 2006; and
-- the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
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
and Parent Company in accordance with the ethical requirements that
are relevant to our audit of the 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.
Material Uncertainty Relating to Going Concern
We draw attention to Note 1.2 in the financial statements, which
indicates that the Group is reliant on securing further financing
to meet committed expenditure requirements and working capital
needs. As stated in Note 1.2, these events or conditions indicate
that a material uncertainty exists that may cast significant doubt
on the Company's ability to continue as a going concern.
Our opinion is not modified in respect of this matter.
Emphasis of Matter
We draw attention to Note 14, which discloses the debt
instrument in Resource Mining Corporation Limited, purchased by the
Company during the year and valued at GBP367,000 within the
financial statements. The license relating to the WoWo Gap project,
Resource Mining Corporation Limited's key project, is currently
under renewal. The good standing of this licence is critical for
project development and subsequent value extraction, which is key
to the recoverability of the debt. Should the license not be
renewed, an impairment may be required to the value of the
debt.
Our Application of Materiality
The materiality applied to the Group Financial Statements was
GBP98,000, based on a percentage of net assets, as it is from these
net assets that the Group seeks to deliver returns for
shareholders, in particular the value of exploration and
development projects the group is interested in through its
associates and joint ventures. Performance materiality has been set
at 70% of headline materiality, and the threshold for which we
communicate errors to management has been set at 5%. Materiality
for the Company Financial Statements was set at GBP97,500, based on
a percentage of net assets.
We apply the concept of materiality in both planning and
performing the audit, and in evaluating the effect of
misstatements. At the planning stage, materiality is used to
determine the financial statements areas that are included within
the scope of the audit and the extent of the sample sizes during
the audit. Materiality has been reassessed during the fieldwork and
closing stages of the audit, taking into consideration new
information, which arose. No alterations were made to materiality
either during or at the conclusion of the audit.
An Overview of the Scope of Our Audit
In designing our audit, we looked at areas, which deemed to
involve significant judgement and estimation by the Directors, such
as the key audit matter surrounding the carrying value of
investments in joint ventures and associates, and receivables from
other Group Companies. Other judgemental areas are the accounting
treatment and valuation of financial assets, including the debt
instrument purchased during the year, as well as the valuation of
share-based payment transactions. We also addressed the risk of
management override of controls, including consideration of whether
there was evidence of bias that represented a risk of material
misstatement due to fraud.
Work on all significant components of the Group has been
performed by us as group auditor.
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.
In addition to the matter described in the Material Uncertainty
Related to Going Concern section, we have determined the matters
described below to be the key audit matters to be communicated in
our report.
Key Audit Matter How the scope of our audit responded
to the key audit matter
Carrying value of Investments, Our work in this area included:
Joint Ventures and Associates and * Review of management's assessment of recoverability
Intragroup Balances (Notes 10 & of intragroup receivables in accordance with IFRS 9
11) criteria;
* Considerations of recoverability of investments and
intercompany loans by reference to underlying net
asset values, including the recoverability potentia
l
of the underlying exploration projects (Mambare
Nickel-Cobalt Project; Dempster Vanadium Project);
* Review of Board impairment papers in respect of
investments, including challenge and obtaining
corroboration for key assumptions used;
* Obtaining and reviewing any relevant agreements
relating to investments (shareholder agreements; JV
agreements; license agreements etc) to ensure all
terms are complied with; and
* Review of disclosures made in respect of these
balances in accordance with IFRS.
We draw attention to the fact that
the exploration license held by
Oro Nickel JV in respect of the
Mambare project is currently under
renewal. If the license were not
to be renewed, this may result
in an impairment to the carrying
value of the investment in JV.
===============================================================
Investments in subsidiaries and
intra-group loans (Company only),
as well as joint ventures and associates
(Group & Company), are the most
significant balances in the financial
statements.
The Group & Company own a 50% interest
in DVY196 Holdings Corp, and a
41% interest in Oro Nickel JV entity
as at 30 June 2020, both of which
have material value in the financial
statements.
Given the continuing losses in
these entities, and delays in advancing
developments at the underlying
projects, there is a risk that
the investment and any associated
receivable balances cannot be recovered
and that the balances should be
impaired.
===============================================================
Other Information
The other information comprises the information, included in the
annual report, other than the financial statements and our
auditor's report thereon. The Directors are responsible for the
other information. Our opinion on the Group and Parent Company
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.
Opinions on Other Matters Prescribed by the Companies Act
2006
In our opinion, based on the work undertaken in the course of
the audit:
-- the information given in the Strategic Report and the
Directors' report for the financial year for which the Financial
Statements are prepared is consistent with the Financial
Statements; and
-- the Strategic Report and the Directors' Report have been
prepared in accordance with applicable legal requirements.
Matters on Which We are Required to Report by Exception
In the light of the knowledge and understanding of the Group and
the Parent Company and their environment obtained in the course of
the audit, we have not identified material misstatements in the
Strategic Report or the Directors' report.
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
-- adequate accounting records have not been kept by the Parent
Company, or returns adequate for our audit have not been received
from branches not visited by us; or
-- the Parent Company Financial Statements are not in agreement
with the accounting records and returns; or
-- certain disclosures of Directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
Responsibilities of Directors
As explained more fully in the Directors' Responsibilities
Statement, the Directors are responsible for the preparation of the
Group and Parent Company 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 Financial Statements that are free from material
misstatement, whether due to fraud or error.
In preparing the Group and Parent Company Financial Statements,
the Directors are responsible for assessing the Group's and the
Parent Company'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 the Parent Company 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.
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 Chapter 3 of Part 16 of the Companies Act 2006.
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.
Joseph Archer (Senior Statutory Auditor) 15 Westferry Circus
For and on behalf of PKF Littlejohn LLP Canary Wharf
Statutory Auditor London E14 4HD
30 November 2020
Financial Statements
Consolidated Statement of Financial Position
as at 30 June 2020
30 June 30 June
2020 2019
Notes GBP'000 GBP'000
---------------------------------------------- ----- -------- --------
ASSETS
Non-current assets
Investments in associates and joint ventures 11 1,947 1,950
Goodwill 10 25 42
Financial instruments - fair value through
other comprehensive income (FVTOCI) 12 4 178
Other receivables 14 1,690 1,318
Total non-current assets 3,666 3,488
---------------------------------------------- ----- -------- --------
Current assets
Cash and cash equivalents 19 415 64
Financial instruments with fair value through
profit and loss (FVTPL) 13 5 5
Trade and other receivables 14 175 115
---------------------------------------------- ----- -------- --------
Total current assets 595 184
---------------------------------------------- ----- -------- --------
Total assets 4,261 3,672
---------------------------------------------- ----- -------- --------
EQUITY AND LIABILITIES
Equity attributable to owners of the Parent
Called up share capital 17 2,726 1,999
Share premium account 23,032 21,113
Other reserves 908 (329)
Retained earnings (23,403) (20,960)
---------------------------------------------- ----- -------- --------
Total equity attributable to owners of the
Parent 3,263 1,823
---------------------------------------------- ----- -------- --------
Non-Controlling interests 13 18
---------------------------------------------- ----- -------- --------
Total equity 3,276 1,841
---------------------------------------------- ----- -------- --------
LIABILITIES
Non-current liabilities
Lease liability 30 -
Long-term borrowings 15 760 -
---------------------------------------------- ----- -------- --------
Total non-current liabilities 790 -
---------------------------------------------- ----- -------- --------
Current liabilities
Trade and other payables 15 183 309
Lease liability 12 -
Short-term borrowings 15 - 1,522
---------------------------------------------- ----- -------- --------
Total current liabilities 195 1,831
---------------------------------------------- ----- -------- --------
Total equity and liabilities 4,261 3,672
---------------------------------------------- ----- -------- --------
The accompanying notes form an integral part of these Financial
Statements.
These Financial Statements were approved by the Board of
Directors and authorised for issue on 30 November 2020 and are
signed on its behalf by:
James Parsons
Executive Chairman
Consolidated Income Statement
for the year ended 30 June 2020
Year to Year to
30 June 30 June
2020 2019
Notes GBP'000 GBP'000
------------------------------------------------- ----- --------- ----------
Gain on sale of financial instruments designated
as FVTPL - 38
Exploration expenses (205) (69)
Impairment of investments in joint ventures 11 - (1,503)
Impairment of goodwill (106) -
Impairment of right-of-use asset (41) -
Impairment of loans and receivables (37) (26)
Administrative expenses 4 (838) (653)
Foreign currency loss (26) (43)
Other income 21 26
Finance costs, net 5 (247) (377)
Share of loss of associates and joint ventures 11 (3) (1)
------------------------------------------------- ----- --------- ----------
Loss for the year before taxation 3 (1,482) (2,608)
Taxation - -
------------------------------------------------- ----- --------- ----------
Loss for the year (1,482) (2,608)
------------------------------------------------- ----- --------- ----------
Loss per share attributable to:
Equity holders of the Parent (1,477) (2,587)
Non-controlling interest (5) (21)
------------------------------------------------- ----- --------- ----------
(1,482) (2,608)
------------------------------------------------- ----- --------- ----------
Earnings per share attributable to owners of the Parent*:
Basic 9 (2) pence (26) pence
Diluted 9 (2) pence (26) pence
------------------------------------------------- ----- --------- ----------
*Adjusted for 100:1 share consolidation. More details in Note
9.
Consolidated Statement of Comprehensive Income
for the year ended 30 June 2020
30 June 30 June
2020 2019
GBP'000 GBP'000
---------------------------------------------------------- -------- --------
Loss for the year (1,482) (2,608)
Other comprehensive income
Items that will be not be reclassified subsequently
to profit or loss
Decrease in revaluation reserves due to IFRS 9 adoption - (38)
Revaluation of FVTOCI investments (42) (800)
Unrealised foreign currency gain/(loss) on translation
of foreign operations 16 (5)
---------------------------------------------------------- -------- --------
Total other comprehensive income for the year (26) (843)
---------------------------------------------------------- -------- --------
Total comprehensive loss for the year (1,508) (3,451)
---------------------------------------------------------- -------- --------
Total comprehensive loss attributable to:
Equity holders of the Parent (1,503) (3,430)
Non-controlling interest (5) (21)
------------------------------------------- ------- -------
(1,508) (3,451)
------------------------------------------ ------- -------
All of the Group's operations are considered to be
continuing.
The accompanying notes form an integral part of these Financial
Statements.
Consolidated Statement of Changes in Equity
for the year ended 30 June 2020
The movements in equity during the year were as follows:
Total
Equity
attributable
Share to owners
Share premium Retained Other of the Non-controlling
capital account earnings reserves Parent interests Total Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- -------- -------- --------- --------- ------------- ----------------- --------------
As at 1 July 2018 1,926 20,380 (18,378) 479 4,407 39 4,446
Changes in equity for -
2019
Loss for the year - - (2,587) - (2,587) (21) (2,608)
Other comprehensive income
for the year
Transfer of FVTOCI reserve
in relation to impaired
assets (note 12) - - - (804) (804) - (804)
Gain on sale of FVTOCI
investments - - 5 - 5 - 5
Unrealised foreign
currency
loss arising on
re-translation
of foreign operations - - - (5) (5) - (5)
-------------------------- -------- -------- --------- --------- ------------- ----------------- --------------
Total Other comprehensive
income for the year - - 5 (809) (804) - (804)
Transactions with owners
Issue of shares 73 745 - - 818 - 818
Share issue costs - (12) - - (12) - (12)
Total transactions with
owners 73 733 - - 806 - 806
-------------------------- -------- -------- --------- --------- ------------- ----------------- --------------
As at 1 July 2019 1,999 21,113 (20,960) (329) 1,823 18 1,841
-------------------------- -------- -------- --------- --------- ------------- ----------------- --------------
Changes in equity for
2020
Loss for the year - - (1,477) - (1,477) (5) (1,482)
Acquisition of new
subsidiary
(note 11) - - - - - 12 12
Partner buy-out on a
subsidiary (note 11) - - - - - (12) (12)
Transfer of FVTOCI reserve
in relation to impaired
assets (note 12) - - (400) 400 - - -
Other comprehensive income
for the year
Revaluation of FVTOCI
investments - - - (42) (42) - (42)
Transfer of FVTOCI
revaluation
reserve in relation to
disposals - - (567) 567 - - -
Unrealised foreign
currency
gain arising on
re-translation
of foreign operations - - - 16 16 - 16
-------------------------- -------- -------- --------- --------- ------------- ----------------- --------------
Total Other comprehensive
income for the year - - (567) 541 (26) - (26)
Transactions with owners
Issue of shares 727 2,228 - - 2,955 - 2,955
Share issue costs - (309) - 273 (36) - (36)
Share options granted
during the year - - - 23 23 - 23
Total transactions with
owners 727 1,919 - 296 2,942 - 2,942
-------------------------- -------- -------- --------- --------- ------------- ----------------- --------------
As at 30 June 2020 2,726 23,032 (23,403) 908 3,263 13 3,276
-------------------------- -------- -------- --------- --------- ------------- ----------------- --------------
See note 16 for a description of each reserve included
above.
FVTOCI Foreign
financial Share-based currency Total
asset payment Warrant translation other
reserve reserve reserve reserve reserves
Other reserves GBP'000 GBP'000 GBP'000 GBP GBP
-------------------------------------- ---------- ------------- -------- ------------ ---------
As at 1 July 2018 (121) 76 - 524 479
-------------------------------------- ---------- ------------- -------- ------------ ---------
Revaluation of FVTOCI investments (800) - - - (800)
Transfer of FVTOCI reserve relating
to impaired assets and disposals (3) - - - (3)
Unrealised foreign currency gain
on translation of foreign operations - - - (5) (5)
As at 1 July 2019 (924) 76 - 519 (329)
-------------------------------------- ---------- ------------- -------- ------------ ---------
Revaluation of FVTOCI investments (42) - - - (42)
Transfer of FVTOCI reserve relating
to impaired assets and disposals 967 - - - 967
Share options granted during the
year - 23 - - 23
Warrants granted during the year - - 273 - 273
Unrealised foreign currency gain
on translation of foreign operations - - - 16 16
As at 30 June 2020 1 99 273 535 908
-------------------------------------- ---------- ------------- -------- ------------ ---------
See note 16 for a description of each reserve included
above.
Consolidated Statement of Cash Flows
for the year ended 30 June 2020
Year to Year to
30 June 30 June
2020 2019
GBP GBP
---------------------------------------------------------- -------- --------
Cash flows from operating activities
Loss before taxation (1,482) (2,608)
Increase in receivables (28) (50)
Increase in payables 78 28
Share-based payments 63 11
Currency adjustments 26 42
Finance cost, net (note 5 ) 247 377
Gain on sale of FVTPL investments - (38)
Share of loss in associates and joint ventures, net
of tax (note 11 ) 3 1
Impairment of goodwill related to FGO (note 10 ) 106 -
Impairment of right-of-use asses 41 -
Impairment of investments in joint ventures - 1,503
Impairment of loans and receivables 37 26
---------------------------------------------------------- -------- --------
Net cash outflow from operations (909) (708)
---------------------------------------------------------- -------- --------
Cash flows from investing activities
Proceeds from sale of FVTOCI and FVTPL investments (note
12 and 13 ) 109 165
Purchase of financial assets carried at amortised cost
(note 14 ) (220) -
Acquisition of a new subsidiary (note 10 ) (34) -
Payments for investments in associates and joint ventures
(note 11) (5) -
---------------------------------------------------------- -------- --------
Net cash (outflow)/inflow from investing activities (150) 165
---------------------------------------------------------- -------- --------
Cash inflows from financing activities
Proceeds from issue of shares 1,439 229
Interest paid (note 21) (5) -
Proceeds of new borrowings, as received net of associated
fees (note 21) 7 252
Repayment of borrowings (note 21) (30) -
---------------------------------------------------------- -------- --------
Net cash inflow from financing activities 1,410 481
---------------------------------------------------------- -------- --------
Net increase/(decrease) in cash and cash equivalents 351 (62)
Cash and cash equivalents at the beginning of period 64 126
Cash and cash equivalents at end of period 415 64
---------------------------------------------------------- -------- --------
Major non-cash transactions are disclosed in note 21 .
The accompanying notes and accounting policies form an integral
part of these Financial Statements.
Company Statement of Financial Position
Corcel Plc (Registration Number: 05227458)
as at 30 June 2020
30 June 30 June
2020 2019
Notes GBP GBP
----------------------------------------------- ----- -------- --------
ASSETS
Non-current assets
Investments in subsidiaries 10 - -
Investments in associates and joint ventures 11 2,067 2,067
Financial assets with fair value through other
comprehensive income (FVTOCI) 12 4 178
Other receivables 14 1,740 1,892
Total non-current assets 3,811 4,137
----------------------------------------------- ----- -------- --------
Current assets
Cash and cash equivalents 19 389 34
Trade and other receivables 14 175 94
----------------------------------------------- ----- -------- --------
Total current assets 564 128
----------------------------------------------- ----- -------- --------
Total assets 4,375 4,265
----------------------------------------------- ----- -------- --------
EQUITY AND LIABILITIES
Called up share capital 17 2,726 1,999
Share premium account 23,032 21,113
Other reserves 373 (448)
Retained earnings (22,698) (20,181)
----------------------------------------------- ----- -------- --------
Total equity 3,433 2,483
----------------------------------------------- ----- -------- --------
LIABILITIES
Non-current liabilities
Long-term borrowings 15 760 -
----------------------------------------------- ----- -------- --------
Total non-current liabilities 760 -
----------------------------------------------- ----- -------- --------
Current liabilities
Trade and other payables 15 182 260
Short-term borrowings 15 - 1,522
----------------------------------------------- ----- -------- --------
Total current liabilities 182 1,782
----------------------------------------------- ----- -------- --------
Total equity and liabilities 4,375 4,265
----------------------------------------------- ----- -------- --------
Company Statement of Comprehensive Income
As permitted by Section 408 Companies Act 2006, the Company has
not presented its own Statement of Comprehensive Income. The
Company's loss for the financial year was GBP1,949,687 (2019: loss
of GBP3,395,962). The Company's Total comprehensive loss for the
financial year was GBP1,991,647 (2019: loss GBP3,828,511).
These Financial Statements were approved by the Board of
Directors and authorised for issue on 30 November 2020 and are
signed on its behalf by:
James Parsons
Executive Chairman
The accompanying notes form an integral part of these Financial
Statements.
Company Statement of Changes in Equity
for the year ended 30 June 2020
The movements in reserves during the year were as follows:
Share
Share premium Retained Other Total
capital account earnings reserves equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------ -------- -------- --------- --------- --------
As at 30 June 2018 1,926 20,380 (16,790) (45) 5,471
Changes in equity for 2019
Loss for the year - - (3,396) - (3,396)
Other comprehensive income for
the year
Revaluation of FVTOCI investments - - - (3) (3)
Transfer of FVTOCI reserve relating
to impaired assets and disposals - - - (400) (400)
Gain on sale of FVTOCI investments - - 5 - 5
Total other comprehensive income
for the year - - 5 (403) (398)
Transactions with owners
Issue of shares 73 745 - - 818
Share issue and fundraising
costs - (12) - - (12)
Total transactions with owners 73 733 - - 806
------------------------------------ -------- -------- --------- --------- --------
As at 1 July 2019 1,999 21,113 (20,181) (448) 2,483
------------------------------------ -------- -------- --------- --------- --------
Changes in equity for 2020
Loss for the year - - (1,950) - (1,950)
Other comprehensive income for
the year
Revaluation of FVTOCI investments - - - (42) (42)
Transfer of FVTOCI reserve
relating to impaired assets
and disposals - - (567) 567 -
Total other comprehensive income
for the year - - (567) 525 (42)
Transactions with owners
Issue of shares 727 2,228 - - 2,955
Share issue and fundraising
costs - (309) - 273 (36)
Share options granted during
the year - - - 23 23
Total transactions with owners 727 1,919 - 296 2,942
------------------------------------ -------- -------- --------- --------- --------
As at 30 June 2020 2,726 23,032 (22,968) 373 3,433
------------------------------------ -------- -------- --------- --------- --------
FVTOCI
financial Share-based Total
asset payment Warrants other
reserve reserve reserve reserves
Other reserves GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------------- ---------- ----------- -------- ---------
As at 30 June 2018 (121) 76 - (45)
Changes in equity for 2019 -
Other comprehensive income for the year -
Transfer of FVTOCI reserve relating
to impaired assets and disposals (400) - - (400)
Revaluation of FVTOCI investments (3) - - (3)
Total Other comprehensive (expenses)
/ income (403) - - (403)
As at 1 July 2019 (524) 76 - (448)
---------------------------------------- ---------- ----------- -------- ---------
Changes in equity for 2020
Other comprehensive income for the year
Revaluation of FVTOCI investments (42) - - (42)
Transfer of FVTOCI reserve relating
to impaired assets and disposals 567 - - 567
Share options granted during the year - 23 - 23
Warrants issued during the year - - 273 273
Total Other comprehensive expenses 525 23 273 821
As at 30 June 2020 1 99 273 373
---------------------------------------- ---------- ----------- -------- ---------
See note 16 for a description of each reserve included
above.
Company Statement of Cash Flows
for the year ended 30 June 2020
Year to Year to
30 June 30 June
2020 2019
GBP'000 GBP'000
---------------------------------------------------- -------- --------
Cash flows from operating activities
Loss before taxation (1,950) (3,396)
Increase in receivables (30) (53)
Increase/(decrease) in payables 92 (1)
Share-based payments 63 11
Finance income 247 377
Currency gains / (losses) 26 42
Gain on sale of FVTPL investments - (38)
Impairment of loans and receivables 678 2,439
Net cash outflow from operations (874) (619)
---------------------------------------------------- -------- --------
Cash flows from investing activities
Payments for investments in associates and joint
ventures (5) -
Purchase of financial assets carried at amortised
cost (220) -
Payments made on behalf of subsidiaries (66) -
Proceeds from sale of FVTOCI financial instruments 109 165
---------------------------------------------------- -------- --------
Net cash (outflow)/inflow from investing activities (182) 165
---------------------------------------------------- -------- --------
Cash inflows from financing activities
Proceeds from issue of shares, net of issue costs 1,439 229
Interest paid (note 21) (5) -
Proceeds of new borrowings (note 21) 7 252
Repayments of borrowings (note 21) (30) -
---------------------------------------------------- -------- --------
Net cash inflow from financing activities 1,411 481
---------------------------------------------------- -------- --------
Increase in cash and cash equivalents 355 27
Cash and cash equivalents at the beginning of
period 34 7
---------------------------------------------------- -------- --------
Cash and cash equivalents at end of period 389 34
---------------------------------------------------- -------- --------
Major non-cash transactions are disclosed in note 21 .
The accompanying notes and accounting policies form an integral
part of these Financial Statements.
Notes to Financial Statements
1. Principal Accounting Policies
1.1 Authorisation of Financial Statements and Statement of Compliance with IFRS
The Group Financial Statements of Corcel Plc ("the Company",
"Corcel" or "the Parent Company"), for the year ended 30 June 2020,
were authorised for issue by the Board on 30 November 2020 and
signed on the Board's behalf by James Parsons. Corcel Plc is a
public limited company incorporated and domiciled in England and
Wales. The Company's ordinary shares are traded on AIM.
1.2 Basis of Preparation
The Financial Statements have been prepared in accordance with
International Financial Reporting Standards and IFRIC
interpretations as endorsed by the EU ("IFRS") and the requirements
of the Companies Act applicable to companies reporting under IFRS
and presented in thousand Pounds Sterling (GBP'000), unless stated
otherwise.
The principal accounting policies adopted are set out below.
Going Concern
It is the prime responsibility of the Board to ensure the
Company and the Group remains a going concern. At 30 June 2020 the
Group had cash and cash equivalents of GBP0.415 million and
GBP0.790 million of borrowings and as at the date of signing these
financial statements the cash balance was GBP0.369 million. The
Directors anticipate having to raise additional funding over the
course of the financial year.
Having considered the prepared cashflow forecasts and Group
budgets, which includes the possibility of Directors reducing or
foregoing their salaries if required, the progress in activities
post year-end, including the successful fund raise of GBP0.750
million and the Directors ability to secure funding from various
sources, the Directors consider that they will have access to
adequate resources in the 12 months from the date of the signing of
these Financial Statements. As a result, they consider it
appropriate to continue to adopt the going concern basis in the
preparation of the Financial Statements.
Should the Group be unable to continue trading as a going
concern, adjustments would have to be made to reduce the value of
the assets to their recoverable amounts, to provide for further
liabilities, which might arise and to classify non-current assets
as current. The Financial Statements have been prepared on the
going concern basis and do not include the adjustments that would
result if the Group was unable to continue as a going concern.
The auditors have made reference to going concern within their
audit report by way of a material uncertainty.
Company Statement of Comprehensive Income
As permitted by Section 408 Companies Act 2006, the Company has
not presented its own Statement of Comprehensive Income. The
Company's loss for the financial year was GBP1.949 million (2019:
loss of GBP3.395 million). The Company's other comprehensive loss
for the financial year was GBP1.991million (2019: loss GBP3.828
million).
Amendments to Published Standards Effective for the Year Ended
30 June 2020
New Standards, Amendments and Interpretations Effective for the
Periods from 1 July 2019
The following new standards, amendments and interpretations are
effective for the first time in these Financial Statements.
However, none have a material effect on the Group and the
Company:
IFRS 16 Leases - Adoption of IFRS 16 resulted in the Group
recognising right of use of assets and lease liabilities for all
contracts that are, or contain, a lease. For leases currently
classified as operating leases, under previous accounting
requirements the Group did not recognise related assets or
liabilities, and instead was expensing the lease payments to profit
or loss on a straight-line basis over the lease term, disclosing in
its annual Financial Statements the total commitments under the
lease term.
IFRIC 23 is to be applied to the determination of taxable profit
(tax loss), tax bases, unused tax losses, unused tax credits and
tax rates, when there is uncertainty over income tax treatments
under IAS 12. This interpretation did not have a material effect of
the reported results.
There were no new standards, amendments or interpretations
effective for the first time for periods beginning on or after 1
July 2019 that had a material effect on the Group's Financial
Statements.
New Standards, Amendments and Interpretations Not Yet
Adopted
At the date of approval of these Financial Statements, the
following standards and interpretations, which have not been
applied in these Financial Statements were in issue but not yet
effective (and in some cases had not been adopted by the EU):
-- Amendments to References to Conceptual Framework in IFRS
Standards - effective from 1 January 2020;
-- Definition of Material (Amendments to IAS 1 and IAS 8) - effective from 1 January 2020;
-- Amendment to IFRS 3 Business Combinations - effective 1 January 2020*;
-- Amendments to IAS 1 Presentation of Financial Statements:
Classification of Liabilities as Current or Non-current - effective
1 January 2022*.
*subject to EU endorsement
The Directors do not expect that the adoption of these standards
will have a material impact on the financial information of the
Group in future periods.
Standards Adopted Early by the Group
The Group has not adopted any standards or interpretations early
in either the current or the preceding financial year.
1.3 Basis of Consolidation
The consolidated Financial Statements of the Group incorporate
the Financial Statements of the Company and entities controlled by
the Company, its subsidiaries, made up to 30 June each year.
Subsidiaries
Subsidiaries are entities over which the Group has the power to
govern the financial and operating policies so as to obtain
economic benefits from their activities. Subsidiaries are
consolidated from the date on which control is obtained, the
acquisition date, until the date that control ceases. They are
deconsolidated from the date on which control ceases.
The acquisition method of accounting is used to account for the
acquisition of subsidiaries by the Group. The cost of an
acquisition is measured as the fair value of the assets given,
equity instruments issued, contingent consideration and liabilities
incurred or assumed at the date of exchange. Costs directly
attributable to the acquisition are expensed as incurred.
Identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are initially
measured at fair value at the acquisition date.
Provisional fair values are adjusted against goodwill if
additional information is obtained within one year of the
acquisition date about facts or circumstances existing at the
acquisition date. Other changes in provisional fair values are
recognised through profit or loss.
Intra-group transactions, balances and unrealised gains and
losses on transactions between Group companies are eliminated on
consolidation, except to the extent that intra-group losses
indicate an impairment.
Goodwill is capitalised as an intangible asset with any
impairment in carrying value being charged to the consolidated
statement of comprehensive income. Any impairment recognised for
goodwill is not reversed.
A change in the ownership interest of a subsidiary, without a
loss of control, is accounted for as an equity transaction. If the
Group loses control over a subsidiary, it:
-- derecognises the assets (including goodwill) and liabilities of the subsidiary;
-- derecognises the carrying amount of any non-controlling interest;
-- derecognises the cumulative translation differences recorded in equity;
-- recognises the fair value of the consideration received;
-- recognises the fair value of any investment retained;
-- recognises any surplus or deficit in profit or loss; and
-- reclassifies the Parent's share of components previously
recognised in other comprehensive income to profit or loss or
retained earnings, as appropriate.
Non-Controlling Interests
Profit or loss and each component of other comprehensive income
are allocated between the Parent and non-controlling interests,
even if this results in the non-controlling interest having a
deficit balance.
Transactions with non-controlling interests that do not result
in loss of control are accounted for as equity transactions. Any
differences between the adjustment for the non-controlling interest
and the fair value of consideration paid or received are recognised
in equity.
1.4 Summary of Significant Accounting Policies
1.4.1 Investment in Associates
An associate is an entity over which the Company is in a
position to exercise significant influence, but not control or
jointly control, through participation in the financial and
operating policy decisions of the investee.
Investments in associates are recognised in the consolidated
Financial Statements, using the equity method of accounting. The
Group's share of post-acquisition profits or losses is recognised
in profit or loss and its share of post-acquisition movements in
other comprehensive income are recognised directly in other
comprehensive income. The carrying value of the investment,
including goodwill, is tested for impairment when there is
objective evidence of impairment. Losses in excess of the Group's
interest in those associates are not recognised unless the Group
has incurred obligations or made payments on behalf of the
associate.
Where a Group company transacts with an associate of the Group,
unrealised gains are eliminated to the extent of the Group's
interest in the relevant associate. Unrealised losses are also
eliminated unless the transaction provides evidence of an
impairment of the asset transferred in which case appropriate
provision is made for impairment.
Where the Company's holding in an associate is diluted, the
Company recognises a gain or loss on dilution in profit and loss.
This is calculated as the difference between the Company's share of
proceeds received for the dilutive share issue and the value of the
Company's effective disposal.
In the Company accounts investments in associates are recognised
and held at cost. The carrying value of the investment is tested
for impairment when there is objective evidence of impairment.
Impairment charges are included in the Company Statement of
Comprehensive Income.
1.4.2 Interests in Joint Ventures
A joint venture is a joint arrangement whereby the partners who
have joint control of the arrangement, have rights to the net
assets of the joint arrangement. Joint control is the contractually
agreed sharing of control of the joint arrangement, which exists
only when decisions on relevant activities require the unanimous
consent of the parties sharing control. The Group recognises its
interest in the entity's assets and liabilities, using the equity
method of accounting. Under the equity method, the interest in the
joint venture is carried in the balance sheet at cost plus
post-acquisition changes in the Group's share of its net assets,
less distributions received and less any impairment in value of
individual investments. The Group Income Statement reflects the
share of the jointly controlled entity's results after tax.
Any goodwill arising on the acquisition of a jointly controlled
entity is included in the carrying amount of the jointly controlled
entity and is not amortised. To the extent that the net fair value
of the entity's identifiable assets, liabilities and contingent
liabilities is greater than the cost of the investment, a gain is
recognised and added to the Group's share of the entity's profit or
loss in the period in which the investment is acquired.
Financial Statements of the jointly controlled entity will be
prepared for the same reporting period as the Group. Where
necessary, adjustments are made to bring the accounting policies
used into line with those of the Group and to reflect impairment
losses where appropriate. Adjustments are also made in the Group's
Financial Statements to eliminate the Group's share of unrealised
gains and losses on transactions between the Group and its jointly
controlled entity. The Group ceases to use the equity method on the
date from which it no longer has joint control over, or significant
influence in, the joint venture.
At 30 June 2020, the Group had following contractual
arrangements, which were classified as investments in associates
and joint ventures:
-- Oro Nickel Ltd, a contractual arrangement with Battery Metals
Pty Ltd, which represents a joint venture established through an
interest in a jointly controlled entity, in order to develop and
exploit the Mambare nickel project;
-- DVY196 Holdings Corp ("DVY"), 50% interest in a North American vanadium project.
1.4.3 Taxation
Corporation tax payable is provided on taxable profits at the
prevailing UK tax rate. The tax expense represents the sum of the
current tax expense and deferred tax expense.
The tax currently payable is based on taxable profit for the
year. Taxable profit differs from accounting profit as reported in
the Statement of Comprehensive Income because it excludes items of
income or expense that are taxable or deductible in other years and
it further excludes items that are never taxable or deductible. The
Group's liability for current tax is measured using tax rates that
have been enacted or substantively enacted by the reporting
date.
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amount of assets and liabilities
in the Financial Statements and the corresponding tax bases used in
the computation of taxable profit and is accounted for using the
balance sheet liability method. Deferred tax liabilities are
recognised for all taxable temporary differences and deferred tax
assets are recognised to the extent that it is probable that
taxable profits will be available against which deductible
temporary differences can be utilised. Such assets and liabilities
are not recognised if the temporary difference arises from the
initial recognition of goodwill or from the initial recognition,
other than in a business combination, of other assets and
liabilities in a transaction, which affects neither the taxable
profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary
differences arising on investments in subsidiaries and associates
and interests in joint ventures, except where the Group is able to
control the reversal of the temporary difference and it is probable
that the temporary difference will not reverse in the foreseeable
future.
Deferred tax is calculated at the tax rates that are expected to
apply to the period when the asset is realised or the liability is
settled based upon tax rates that have been enacted or
substantively enacted by the reporting date.
Deferred tax is charged or credited in profit or loss, except
when it relates to items credited or charged directly to equity, in
which case the deferred tax is also dealt with in equity, or items
charged or credited directly to other comprehensive income, in
which case the deferred tax is also recognised in other
comprehensive income.
Deferred tax assets and liabilities are offset where there is a
legally enforceable right to offset current tax assets and
liabilities and the deferred tax relates to income tax levied by
the same tax authorities on either:
-- the same taxable entity; or
-- different taxable entities, which intend to settle current
tax assets and liabilities on a net basis or to realise and settle
them simultaneously in each future period when the significant
deferred tax assets and liabilities are expected to be realised or
settled.
1.4.4 Property, Plant and Equipment
Property, plant and equipment acquired and identified as having
a useful life that exceeds one year is capitalised at cost and is
depreciated on a straight-line basis at annual rates that will
reduce book values to estimated residual values over their
anticipated useful lives as follows:
Office furniture, fixtures and fittings - 33% per annum
Leasehold improvements - 5% per annum
1.4.5 Foreign Currencies
Both the functional and presentational currency of Corcel Plc is
Sterling (GBP). Each Group entity determines its own functional
currency and items included in the Financial Statements of each
entity are measured using that functional currency.
The functional currencies of the foreign subsidiaries and joint
ventures are the Australian Dollar ("AUD"), the Papua New Guinea
Kina ("PNG") and the US Dollar ("USD").
Transactions in currencies other than the functional currency of
the relevant entity are initially recorded at the exchange rate
prevailing on the dates of the transaction. At each reporting date,
monetary assets and liabilities that are denominated in foreign
currencies are retranslated at the exchange rate prevailing at the
reporting date. Non-monetary assets and liabilities carried at fair
value that are denominated in foreign currencies are translated at
the rates prevailing at the date, when the fair value was
determined. Gains and losses arising on retranslation are included
in profit or loss for the period, except for exchange differences
on non-monetary assets and liabilities, which are recognised
directly in other comprehensive income, when the changes in fair
value are recognised directly in other comprehensive income.
On consolidation, the assets and liabilities of the Group's
overseas operations are translated into the Group's presentational
currency at exchange rates prevailing at the reporting date. Income
and expense items are translated at the average exchange rates for
the period unless exchange rates have fluctuated significantly
during the year, in which case the exchange rate at the date of the
transaction is used. All exchange differences arising, if any, are
recognised as other comprehensive income and are transferred to the
Group's foreign currency translation reserve.
1.4.6 Exploration Assets
Exploration assets comprise exploration and development costs
incurred on prospects at an exploratory stage. These costs include
the cost of acquisition, exploration, determination of recoverable
reserves, economic feasibility studies and all technical and
administrative overheads directly associated with those projects.
These costs are carried forward in the Statement of Financial
Position as non-current intangible assets less provision for
identified impairments. Costs associated with an exploration
activity will only be capitalised if, in management's opinion, the
results from that activity led to a material increase in the market
value of the exploration asset, which is determined by management
to be following the economic feasibility stage. Generally, costs
associated with non-drilling activities, such as geophysical and
geochemical surveys, are not capitalised.
Recoupment of exploration and development costs is dependent
upon successful development and commercial exploitation of each
area of interest and will be amortised over the expected commercial
life of each area once production commences. The Group and the
Company currently have no exploration assets where production has
commenced.
The Group adopts the "area of interest" method of accounting
whereby all exploration and development costs, relating to an area
of interest, are capitalised and carried forward until abandoned.
In the event that an area of interest is abandoned, or if the
Directors consider the expenditure to be of no value, accumulated
exploration costs are written off in the financial year in which
the decision is made. All expenditure incurred prior to approval of
an application is expensed, with the exception of refundable rent,
which is raised as a receivable.
Upon disposal, the difference between the fair value of
consideration receivable for exploration assets and the relevant
cost within non-current assets is recognised in the Income
Statement.
1.4.7 Impairment of Non-Financial Assets
The carrying values of assets, other than those to which IAS 36
"Impairment of Assets" does not apply, are reviewed at the end of
each reporting period for impairment, when there is an indication
that the assets might be impaired. Impairment is measured by
comparing the carrying values of the assets with their recoverable
amounts. The recoverable amount of the assets is the higher of the
assets' fair value less costs to sell and their value-in-use, which
is measured by reference to discounted future cash flow.
An impairment loss is recognised immediately in the consolidated
statement of comprehensive income.
When there is a change in the estimates used to determine the
recoverable amount, a subsequent increase in the recoverable amount
of an asset is treated as a reversal of the previous impairment
loss and is recognised to the extent of the carrying amount of the
asset that would have been determined (net of amortisation and
depreciation) had no impairment loss been recognised. The reversal
is recognised in profit or loss immediately, unless the asset is
carried at its revalued amount, in which case the reversal of the
impairment loss is treated as a revaluation increase.
1.4.8 Share-Based Payments
Share Options
The Group operates equity-settled share-based payment
arrangements whereby the fair value of services provided is
determined indirectly by reference to the fair value of the
instrument granted.
The fair value of options granted to Directors and others in
respect of services provided is recognised as an expense in the
income statement with a corresponding increase in equity reserves -
the share-based payment reserve until the award has been settled
and then make a transfer to share capital. On exercise or lapse of
share options, the proportion of the share-based payment reserve
relevant to those options is transferred to retained earnings. On
exercise, equity is also increased by the amount of the proceeds
received.
The fair value is measured at grant date and charged over the
vesting period during which the option becomes unconditional.
The fair value of options is calculated using the Black-Scholes
model, taking into account the terms and conditions upon which the
options were granted. The exercise price is fixed at the date of
grant.
Non-market conditions are performance conditions that are not
related to the market price of the entity's equity instruments.
They are not considered when estimating the fair value of a
share-based payment. Where the vesting period is linked to a
non-market performance condition, the Group recognises the goods
and services it has acquired during the vesting period based on the
best available estimate of the number of equity instruments
expected to vest. The estimate is reconsidered at each reporting
date, based on factors such as a shortened vesting period, and the
cumulative expense is 'trued up' for both the change in the number
expected to vest and any change in the expected vesting period.
Market conditions are performance conditions that relate to the
market price of the entity's equity instruments. These conditions
are included in the estimate of the fair value of a share-based
payment. They are not taken into account for the purpose of
estimating the number of equity instruments that will vest. Where
the vesting period is linked to a market performance condition, the
Group estimates the expected vesting period. If the actual vesting
period is shorter than estimated, the charge is be accelerated in
the period that the entity delivers the cash or equity instruments
to the counterparty. When the vesting period is longer, the expense
is recognised over the originally estimated vesting period.
For other equity instruments, granted during the year (i.e.
other than share options), fair value is measured on the basis of
an observable market price.
Share Incentive Plan
Where the shares are granted to the employees under Share
Incentive Plan, the fair value of services provided is determined
indirectly by reference to the fair value of the free, partnership
and matching shares granted on the grant date. Fair value of shares
is measured on the basis of an observable market price, i.e. share
price as at grant date and is recognised as an expense in the
Income Statement on the date of the grant. For the partnership
shares the charge is calculated as the excess of the mid-market
price on the date of grant over the employee's contribution.
1.4.9 Pension
The Group operates a defined contribution pension plan, which
requires contributions to be made to a separately administered
fund. Contributions to the defined contribution scheme are charged
to the profit and loss account as they become payable.
1.4.10 Finance Income/Expense
Finance income and expense is recognised as interest accrues,
using the effective interest method. This is a method of
calculating the amortised cost of a financial asset and allocating
the interest income over the relevant period, using the effective
interest rate, which is the rate that exactly discounts estimated
future cash receipts/re-payments through the expected life of the
financial asset or liability to the net carrying amount of the
financial asset or liability.
1.4.11 Financial Instruments
The Group classifies its financial assets into one of the
categories discussed below, depending on the purpose for which the
asset was acquired. Other than financial assets in a qualifying
hedging relationship, the Group's accounting policy for each
category is as follows:
Fair Value through Profit or Loss (FVTPL)
This category comprises in-the-money derivatives and
out-of-money derivatives, where the time value offsets the negative
intrinsic value. They are carried in the statement of financial
position at fair value with changes in fair value recognised in the
Consolidated Statement of Comprehensive Income in the finance
income or expense line. Other than derivative financial
instruments, which are not designated as hedging instruments, the
Group does not have any assets held for trading nor does it
voluntarily classify any financial assets as being at fair value
through profit or loss.
Amortised Cost
These assets comprise the types of financial assets, where the
objective is to hold these assets in order to collect contractual
cash flows and the contractual cash flows are solely payments of
principal and interest. They are initially recognised at fair value
plus transaction costs that are directly attributable to their
acquisition or issue and are subsequently carried at amortised cost
using the effective interest rate method, less provision for
impairment. Impairment provisions for current and non-current trade
receivables are recognised based on the simplified approach within
IFRS 9, using a provision matrix in the determination of the
lifetime expected credit losses. During this process the
probability of the non-payment of the trade receivables is
assessed. This probability is then multiplied by the amount of the
expected loss arising from default to determine the lifetime
expected credit loss for the trade receivables. For the
receivables, which are reported net, such provisions are recorded
in a separate provision account with the loss being recognised in
the consolidated statement of comprehensive income. On confirmation
that the receivable will not be collectable, the gross carrying
value of the asset is written off against the associated
provision.
Impairment provisions for receivables from related parties and
loans to related parties are recognised based on a forward-looking
expected credit loss model. The methodology used to determine the
amount of the provision is based on whether there has been a
significant increase in credit risk since initial recognition of
the financial asset. For those where the credit risk has not
increased significantly since initial recognition of the financial
asset, twelve month expected credit losses along with gross
interest income are recognised. For those for which credit risk has
increased significantly, lifetime expected credit losses along with
the gross interest income are recognised. For those that are
determined to be credit impaired, lifetime expected credit losses
along with interest income on a net basis are recognised.
The Group's financial assets measured at amortised cost comprise
trade and other receivables and cash and cash equivalents in the
consolidated statement of financial position. Cash and cash
equivalents include cash in hand, deposits held at call with banks,
other short term highly liquid investments with original maturities
of three months or less, and - for the purpose of the statement of
cash flows - bank overdrafts. Bank overdrafts are shown within
loans and borrowings in current liabilities on the consolidated
statement of financial position.
Fair Value through Other Comprehensive Income (FVTOCI)
The Group held a number of strategic investments in listed and
unlisted entities, which are not accounted for as subsidiaries,
associates or jointly controlled entities. For those investments,
the Group has made an irrevocable election to classify the
investments at fair value through other comprehensive income rather
than through profit or loss as the Group considers this measurement
to be the most representative of the business model for these
assets. They are carried at fair value with changes in fair value
recognised in other comprehensive income and accumulated in the
fair value through other comprehensive income reserve. Upon
disposal any balance within fair value through other comprehensive
income reserve is reclassified directly to retained earnings and is
not reclassified to profit or loss.
Dividends are recognised in profit or loss, unless the dividend
clearly represents a recovery of part of the cost of the
investment, in which case the full or partial amount of the
dividend is recorded against the associated investments carrying
amount.
Purchases and sales of financial assets, measured at fair value
through other comprehensive income, are recognised on settlement
date with any change in fair value between trade date and
settlement date being recognised in the fair value through other
comprehensive income reserve.
Financial Liabilities
The Group classifies its financial liabilities into one of two
categories, depending on the purpose for which the liability was
acquired:
Other Financial Liabilities
Other financial liabilities include
- Borrowings, which are initially recognised at fair value net
of any transaction costs directly attributable to the issue of the
instrument. Such interest-bearing liabilities are subsequently
measured at amortised cost using the effective interest rate
method, which ensures that any interest expense over the period to
repayment is at a constant rate on the balance of the liability
carried in the Consolidated Statement of financial position. For
the purposes of each financial liability, interest expense includes
initial transaction costs and any premium payable on redemption, as
well as any interest or coupon payable while the liability is
outstanding.
- Liability components of convertible loan notes are measured as described further below.
- Trade payables and other short-term monetary liabilities,
which are initially recognised at fair value and subsequently
carried at amortised cost using the effective interest method.
Fair Value Measurement
Fair value is the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. The fair value
measurement is based on the presumption that the transaction to
sell the asset or transfer the liability takes place either:
-- In the principal market for the asset or liability; or
-- In the absence of a principal market, in the most
advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible
by the Group.
The fair value of an asset or a liability is measured, using the
assumptions that market participants would use when pricing the
asset or liability, assuming that market participants act in their
economic best interest.
A fair value measurement of a non-financial asset takes into
account a market participant's ability to generate economic
benefits by using the asset in its highest and best use or by
selling it to another market participant that would use the asset
in its highest and best use.
The Group uses valuation techniques that are appropriate in the
circumstances and, for which sufficient data are available to
measure fair value, maximising the use of relevant observable
inputs and minimising the use of unobservable inputs.
All assets and liabilities, for which fair value is measured or
disclosed in the Financial Statements, are categorised within the
fair value hierarchy, described as follows, based on the lowest
level input that is significant to the fair value measurement as a
whole:
-- Level 1 - Quoted (unadjusted) market prices in active markets
for identical assets or liabilities;
-- Level 2 - Valuation techniques for which the lowest level
input that is significant to the fair value measurement is directly
or indirectly observable; and
-- Level 3 - Valuation techniques for which the lowest level
input that is significant to the fair value measurement is
unobservable.
For assets and liabilities that are recognised in the Financial
Statements on a recurring basis, the Group determines whether
transfers have occurred between levels in the hierarchy by
re-assessing categorisation (based on the lowest level input that
is significant to the fair value measurement as a whole) at the end
of each reporting period.
For the purpose of fair value disclosures, the Group has
determined classes of assets and liabilities on the basis of the
nature, characteristics and risks of the asset or liability and the
level of the fair value hierarchy as explained above.
More information is disclosed in note 20.
1.4.12 Investments in the Company Accounts
Investments in subsidiary companies are classified as
non-current assets and included in the Statement of Financial
Position of the Company at cost at the date of acquisition less any
identified impairments.
For acquisitions of subsidiaries or associates achieved in
stages, the Company re-measures its previously held equity
interests in the acquiree at its acquisition-date fair value and
recognises the resulting gain or loss, if any, in profit or loss.
Any gains or losses, previously recognised in other comprehensive
income, are transferred to profit and loss.
Investments in associates and joint ventures are classified as
non-current assets and included in the statement of financial
position of the Company at cost at the date of acquisition less any
identified impairment.
1.4.13 Share Capital
Financial instruments issued by the Group are classified as
equity only to the extent that they do not meet the definition of a
financial liability or financial asset. The Group's ordinary shares
are classified as equity instruments.
1.4.14 Convertible Debt
The proceeds received on issue of the Group's convertible debt
are allocated into their liability and equity components. The
amount initially attributed to the debt component equals the
discounted cash flows using a market rate of interest that would be
payable on a similar debt instrument that does not include an
option to convert. Subsequently, the debt component is accounted
for as a financial liability measured at amortised cost until
extinguished on conversion or maturity of the bond. The remainder
of the proceeds is allocated to the conversion option and is
recognised in the "Convertible debt option reserve" within
shareholders' equity, net of income tax effects.
1.4.15 Warrants
Derivative contracts that only result in the delivery of a fixed
amount of cash or other financial assets for a fixed number of an
entity's own equity instruments are classified as equity
instruments. Warrants relating to equity finance and issued
together with ordinary shares placement are valued by residual
method and treated as directly attributable transaction costs and
recorded as a reduction of share premium account based on the fair
value of the warrants. Warrants classified as equity instruments
are not subsequently re-measured (i.e., subsequent changes in fair
value are not recognised).
1.4.16 Segment Reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker
as required by IFRS 8 "Operating Segments". The chief operating
decision-maker responsible for allocating resources and assessing
performance of the operating segments has been identified as the
Board of Directors. The accounting policies of the reportable
segments are consistent with the accounting policies of the group
as a whole. Segment profit/(loss) represents the profit/(loss)
earned by each segment without allocation of foreign exchange gains
or losses, investment income, interest payable and tax. This is the
measure of profit that is reported to the Board of Directors for
the purpose of resource allocation and the assessment of segment
performance. When assessing segment performance and considering the
allocation of resources, the Board of Directors review information
about segment non-current assets. For this purpose, all non-current
assets are allocated to reportable segments.
1.4.17 Leases
All leases are accounted for by recognising a right-of-use asset
and a lease liability except for:
-- Leases of low value assets; and
-- Leases with a duration of 12 months or less.
IFRS 16 was adopted 1 June 2019 without restatement of
comparative figures.
On initial recognition, the carrying value of the lease
liability also includes:
-- amounts expected to be payable under any residual value guarantee;
-- the exercise price of any purchase option granted in favour
of the Group if it is reasonably certain to assess that option;
-- any penalties payable for terminating the lease, if the term
of the lease has been estimated on the basis of termination option
being exercised.
Lease liabilities are subsequently measured at the present value
of the contractual payments due to the lessor over the lease
term.
Right of use assets are initially measured at the amount of the
lease liability, reduced for any lease incentives received, and
increased for:
-- lease payments made at or before commencement of the lease;
-- initial direct costs incurred; and
-- the amount of any provision recognised, where the group is
contractually required to dismantle, remove or restore the leased
asset.
1.5 Significant Accounting Judgements, Estimates and Assumptions
The preparation of the Group's consolidated Financial Statements
requires management to make judgements, estimates and assumptions
that affect the reported amounts of revenues, expenses, assets and
liabilities at the end of the reporting period. However,
uncertainty about these assumptions and estimates could result in
outcomes that require a material adjustment to the carrying amount
of the asset or liability affected in future periods.
Significant Judgements and Accounting Estimates
In the process of applying the Group's accounting policies,
management has made the following judgements and estimates, which
have the most significant effect on the amounts recognised in the
consolidated Financial Statements:
Impairment of Investments in Associates and Joint ventures
The carrying amount of investments in joint ventures is tested
for impairment annually and this process is considered to be key
judgement along with determining whenever events or changes in
circumstances indicate that the carrying amounts for those assets
may not be recoverable.
The resumption of activities in 2019/2020 on the ground in PNG
amidst a significant strengthening of the underlying fundamentals
of nickel, have encouraged the Board to continue to hold the value
of its stake in the Mambare joint venture at the previous valuation
of GBP1.77 million alongside the GBP1.3 million receivable. The
Company believes that the carrying values reflect the sizeable JORC
resource and work done to date, as well as the potential to
progress the project to a mining license and Direct Shipping Ore
"DSO" production in 2021 and beyond. The Company has assessed the
viability of the project given current and expected nickel prices
and the anticipated cost of a DSO operation, and believes the
project can be successfully taken into production in the mid-term.
The Board further believes that the likelihood of recovery of the
receivable has also increased over the past 12-24 months due to the
progress made on the JV, and that full repayment of this figure is
more likely through either a disposal and trade sale prior to
production, or through dividends once the project begins shipping
ore. More information is disclosed in note 11.
The Company has also made judgements in respect of the success
of licence renewals on the core projects.
During the year, the investment in Flexible Grid One (Ex Allied
Energy) and loan receivable from Flexible Grid One was fully
impaired as the Company decided to no longer pursue development of
the project. The loans to Flexible Grid Solution (Ex EsTEQ) in
relation to Flexible Grid One were written off based on judgements
made by management in respect of their repayment.
Share-Based Payment Transactions
The Group measures the cost of equity-settled transactions with
employees by reference to the fair value of the equity instruments
at the date at which they are granted. The fair value of share
options is determined using the Black-Scholes model and the
estimates used within this model are disclosed in note 18 .
Valuation of a receivable from Oro Nickel JV
The Directors believe that the receivable from the Oro Nickel
Joint Venture will be fully recoverable in light of the project's
ongoing progress towards a mining lease supporting a shipping ore
operation at the site. Substantial progress has been made on the
mining lease application during the course of the year end,
including the ground penetrating radar survey conducted during the
end of 2019 and early 2020. While the existing exploration licenses
remain under renewal at the year-end, the Company and the joint
venture partners believe there remains a high likelihood of
renewal, given ongoing dialogue with the PNG authorities, and would
expect to have these renewed independently of any outcome of the
mining lease application.
2. Segmental Analysis
Once the Group's main focus of operations becomes production of
battery metal mineral resources or flexible production and storage
of energy, the nature of management information, examined by the
Board, will alter to reflect the need to monitor revenues, margins,
overheads and trade balances, as well as cash.
IFRS 8 requires the reporting of information about the revenues
derived from the various areas of activity, the countries in which
revenue is earned regardless of whether this information is used in
by management in making operating decisions.
Flexible Grid Corporate
Solutions and
Battery Metals (UK) unallocated Total
Year to 30 June 2020 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------------- -------------- ------------- ------------ --------
Revenue - - - -
Management services - - - -
Exploration expenses (178) - (27) (205)
Administrative expenses - (21) (817) (838)
Impairment of right of use asset - (41) - (41)
Impairment of goodwill - (106) - (106)
Currency (loss)/gain - - (26) (26)
Share of profits in joint ventures (3) - - (3)
Impairment of financial assets
carried at amortised cost - - (37) (37)
Other income - - 21 21
Finance cost - net - - (247) (247)
-------------------------------------- -------------- ------------- ------------ --------
Net (loss) before tax from continuing
operations (181) (168) (1,133) (1,482)
-------------------------------------- -------------- ------------- ------------ --------
Flexible Grid Corporate
Solutions and
Battery Metals (UK) unallocated Total
Year to 30 June 2019 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------------- -------------- ------------- ------------ --------
Revenue - - - -
Management services - - - -
Impairment of investment in joint
ventures - - (1,503) (1,503)
Gain on sale of FVTPL financial
instruments - - 38 38
Exploration expenses - - (70) (70)
Administrative expenses - (134) (519) (653)
Currency (loss)/gain - - (43) (43)
Share of profits in joint ventures (1) - - (1)
Impairment of financial assets
carried at amortised cost - - (26) (26)
Other income - 16 10 26
Finance cost - net - - (377) (377)
-------------------------------------- -------------- ------------- ------------ --------
Net (loss) before tax from continuing
operations (1) (118) (2,490) (2,609)
-------------------------------------- -------------- ------------- ------------ --------
Information by Geographical Area
Presented below is certain information by the geographical area
of the Group's activities. Investment sales revenue and exploration
property sales revenue are allocated to the location of the asset
sold.
Papua
UK Australia New Guinea USA Canada Total
Year to 30 June 2020 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- ----------- ----------- ----------- ----------- ----------- ------------------
Revenue - - - - - -
Total segment revenue and - - - - - -
other gains
----------------------------- ----------- ----------- ----------- ----------- ----------- ------------------
Non-current assets
Investments in associates
and joint ventures - - 1,654 - 293 1,947
Goodwill 25 - - - - 25
Receivable from a joint
venture - - 1,323 - - 1,323
Purchased debt - - 367 - - 367
FVTOCI financial instruments - - - - 4 4
Total segment non-current
assets 25 - 3,344 - 297 3,666
----------------------------- ----------- ----------- ----------- ----------- ----------- ------------------
Papua
Year to 30 UK Australia New Guinea USA Canada Total
June 2019 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------ ----------- ------------------ ------------------ ------------------ ------------------ -----------------
Revenue - - - - - -
Gain on sale
of
investments 38 - - - - 38
------------ ----------- ------------------ ------------------ ------------------ ------------------ -----------------
Total
segment
revenue and
other gains 38 - - - - 38
------------ ----------- ------------------ ------------------ ------------------ ------------------ -----------------
Non-current
assets
Investments
in
associates
and joint
ventures - - 1,657 - 293 1,950
Goodwill 42 - - - - 42
Receivable
from a
joint
venture - - 1,318 - - 1,318
FVTOCI
financial
instruments 31 49 - 96 2 178
Total
segment
non-current
assets 73 49 2,975 96 295 3,488
------------ ----------- ------------------ ------------------ ------------------ ------------------ -----------------
3. Loss on Ordinary Activities Before Taxation
2020 2019
Group GBP'000 GBP'000
------------------------------------------------------ -------- --------
Loss on ordinary activities before taxation is stated
after charging:
Auditor's remuneration:
- fees payable to the Company's auditor for the audit
of consolidated and Company Financial Statements 25 16
Directors' emoluments (note 8 ) 437 184
------------------------------------------------------ -------- --------
As declared in note 8 , Directors are remunerated in part by
third parties with whom the Company and Group have contractual
arrangements.
4. Administrative Expenses
Group Group Company Company
2020 2019 2020 2019
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ -------- -------- -------- --------
Staff costs
Payroll 369 174 369 170
Pension 15 12 15 12
Share-based payments 33 11 33 11
Consultants 32 22 32 15
Insurance 1 2 1 2
Employers NI 36 6 36 6
Professional services
Accounting 72 63 69 59
Legal 15 36 15 13
Business development 1 - 1 -
Marketing 14 2 12 2
Funding costs 42 21 42 21
Other 26 26 25 26
Regulatory compliance 101 83 101 83
Travel 8 11 8 10
Office and Admin
General (2) 74 (5) 8
IT costs 8 9 8 9
Rent 58 96 44 64
Insurance 9 5 9 5
------------------------------ -------- -------- -------- --------
Total administrative expenses 838 653 815 516
------------------------------ -------- -------- -------- --------
5. Finance Costs, Net
2020 2019
Group GBP'000 GBP'000
----------------- -------- --------
Interest expense (247) (377)
(247) (377)
----------------- -------- --------
6. Taxation
2020 2019
GBP'000 GBP'000
------------------------------------------------------- -------- --------
Current period transaction of the Group
UK corporation tax at 19.00% (2018: 19.00%) on profits
for the period - -
Deferred tax
Origination and reversal of temporary differences - -
Deferred tax assets derecognised - -
------------------------------------------------------- -------- --------
Tax (credit) - -
------------------------------------------------------- -------- --------
Factors affecting the tax charge for the year
Loss on ordinary activities before taxation (1,482) (2,608)
------------------------------------------------------- -------- --------
Loss on ordinary activities at the average UK standard
rate of 19% (2019: 19.00%) (282) (496)
Effect of non-deductible expense 136 460
Effect of tax benefit of losses carried forward 267 35
Tax losses brought forward (121) -
Current tax (credit) - -
------------------------------------------------------- -------- --------
Deferred tax amounting to GBPnil (2019: GBPnil), relating to the
Group's investments was recognised in the Statement of
Comprehensive Income. No deferred tax charge has been recognised
due to uncertainty as to the timing of future profitability of the
Group. Unutilised trading losses are estimated at circa GBP3,085
thousand (2019: GBP3,389) and capital losses estimated circa GBPnil
(2019: GBPnil).
7. Staff Costs
The aggregate employment costs of staff for the Group (including
Directors) for the year was:
2020 2019
GBP'000 GBP'000
----------------------------------------- -------- --------
Wages and salaries 369 174
Pension 15 12
Social security costs, net of allowances 36 6
Medical costs 1 2
Employee share-based payment charge 34 11
----------------------------------------- -------- --------
Total staff costs 455 205
----------------------------------------- -------- --------
The average number of Group employees (including Directors)
during the year was:
2020 2019
Number Number
--------------- ------- -------
Executives 4 3
Administration 1 1
5 4
--------------- ------- -------
During the year, for all Directors and employees, who have been
employed for more than three months, the Company contributed to a
defined contributions pension scheme as described under Directors'
remuneration in the Directors' Report and a Share Incentive Plan
("SIP") as described under Management incentives in the Directors'
Report.
All emoluments presented for current and comparative years,
except for pension, are short-term in nature.
8. Directors' Emoluments
Share-based Social
Directors' Consultancy Share Incentive Payments Pension security
fees fees Plan (options) contributions costs Total
2020 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------ ---------- ----------- --------------- ----------- --------------- --------- --------
Executive Directors
A R M Bell* 43 - - - 1 2 46
J Parsons** 85 - - 16 - 12 113
S Kaintz 145 - 7 7 11 17 187
Non-executive Directors
N Burton 45 - - - - 5 50
E Ainsworth 17 23 - - - 1 41
335 23 7 23 12 37 437
------------------------ ---------- ----------- --------------- ----------- --------------- --------- --------
Share-based Social
Directors' Consultancy Share Incentive Payments Pension security
fees fees Plan (options) contributions costs Total
2019 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------ ---------- ----------- --------------- ----------- --------------- --------- --------
Executive Directors
A R M Bell 50 15 4 - 4 5 78
S Kaintz 67 - 4 - 5 7 83
------------------------ ---------- ----------- --------------- ----------- --------------- --------- --------
Non-executive Directors
E Bugnosen 18 - 3 - 1 1 23
135 15 11 - 10 13 184
------------------------ ---------- ----------- --------------- ----------- --------------- --------- --------
*Includes GBP30,000 ex-gratia termination payment to A R M Bell,
who resigned as a company Director during the year.
** Includes 8% pension contribution paid in cash as a part of
gross salary.
The number of Directors, who exercised share options in year,
was nil (2019: nil).
9. Earnings per Share
The basic earnings/(loss) per share is derived by dividing the
loss for the year attributable to ordinary shareholders of the
Parent by the weighted average number of shares in issue. Diluted
earnings/(loss) per share is derived by dividing the loss for the
year attributable to ordinary shareholders of the Parent by the
weighted average number of shares in issue plus the weighted
average number of ordinary shares that would be issued on
conversion of all dilutive potential ordinary shares into ordinary
shares.
2020 2019
Loss attributable to equity holders
of the Parent Company, GBP'000 (1,482) (2,587)
Weighted average number of ordinary
shares of GBP0.0001 in issue, used
for basic EPS, adjusted for 100:1
share consolidation 75,338,810 9,767,280
----------- ----------
Earnings per share - basic, GBP (0.02) (0.26)
----------- ----------
Earnings per share - fully diluted,
GBP (0.02) (0.26)
----------- ----------
At 30 June 2020 and at 30 June 2019, the effect of all the instruments
in issue is anti-dilutive as it would lead to a further reduction
of loss per share, therefore they were not included into the diluted
loss per share calculation.
Options and warrants with conditions not met at the end of the period,
that could potentially dilute basic EPS in the future, but were
not included in the calculation of diluted EPS for the periods presented:
2020 2019 *
(a) Share options granted to employees
- total, of them 6,212,534 270,600
* Vested at the end of reporting period 122,900 253,300
* Not vested at the end of the reporting period 6,089,634 17,300
(b) Number of warrants in issue 60,839,078 6,895,671
----------- --------------
Total number of contingently issuable
shares that could potentially dilute
basic earnings per share in future
and anti-dilutive potential ordinary
shares that were not included into
the fully diluted EPS calculation 67,051,612 7,166,271
----------- --------------
*30 June 2019 numbers were retrospectively adjusted for 100:1
share consolidation.
There were no ordinary share transactions after 30 June 2020,
that that could have changed the EPS calculations significantly if
those transactions had occurred before the end of the reporting
period.
10. Investments in Subsidiaries and Goodwill
Investments Investments Goodwill Goodwill
in subsidiaries in subsidiaries 2020 2019
2020 2019 GBP'000 GBP'000
Company GBP GBP
------------------------------------ ---------------- ---------------- -------- --------
Cost
At 1 July 2018 and 1 July 2019 483 483 42 42
Additions - - 89 -
------------------------------------ ---------------- ---------------- -------- --------
At 30 June 2020 and 30 June 2019 483 483 131 42
------------------------------------ ---------------- ---------------- -------- --------
Impairment
At 1 30 June 2020 and 30 June 2019 - - (106) -
------------------------------------ ---------------- ---------------- -------- --------
Net book amount at 30 June 2020 and
at 30 June 2019 483 483 25 42
------------------------------------ ---------------- ---------------- -------- --------
The Parent Company of the Group holds more than 50% of the share
capital of the following companies, the results of which are
consolidated:
Proportion
Country of held by Nature of
Company Name registration Class Group business
------------------------------ ------------- -------- ---------- -------------------
Regency Mines Australasia
Pty Limited Australia Ordinary 100% Mineral exploration
Regency Resources Inc* USA Ordinary 100% Natural resources
Flexible Grid Solutions
Limited (former ESTEQ
Limited) UK Ordinary 100% Holding company
Flexible Grid One Limited
(former Allied Energy Energy storage
Services Ltd (indirectly and trading and
owned through ESTEQ Limited)) UK Ordinary 100% grid backup
Weirs Drove Development
Limited UK Ordinary 50% Energy storage
------------------------------ ------------- -------- ---------- -------------------
*Incorporated on 21 August 2014 and dissolved on 4 March
2020.
Regency Mines Australasia Pty Limited registered office is c/o
Paragon Consultants PTY Ltd, PO Box 903, Claremont WA, 6910,
Australia.
Regency Resources Inc registered office is Corporation Trust
Center, 1209 Orange Street, Wilmington, New Castle County, Delaware
19801, United States of America.
Flexible Grid Solutions Limited registered office is Salisbury
House, London Wall, London EC2M 5PS, United Kingdom.
Flexible Grid One Limited registered office is Salisbury House,
London Wall, London EC2M 5PS, United Kingdom.
Weirs Drove Development Limited registered office is 20-22
Wenlock Road, London N1 7GU, United Kingdom.
Flexible Grid One Limited (FGO) (former Allied Energy Services
Ltd (indirectly owned through Flexible Grid Solutions Limited))
On 10 November 2017, Corcel formed a 100% owned subsidiary,
Flexible Grid Solutions Limited, to act as the vehicle for
development of opportunities in the battery and energy storage
technology sector across the UK. On 15 March 2018, Flexible Grid
Solutions Limited committed to investing up to GBP250,000 into
Flexible Grid One Limited, representing an 80% interest in that
entity. Non-controlling shareholders brought with them a
development pipeline, including land rights and connections for
combined battery and gas and anaerobic digestion generation plants
to be constructed and operated across the UK. On 3 January 2020,
the Company announced the completion of a buy-out of the 20%
minority shareholders in Flexible Grid One Limited through the
issuance of 2,461,538 new ordinary shares in the Company. The
investment in Flexible Grid One Limited was subsequently written
off at year-end. Total value of goodwill, arising on all stages of
the FGO acquisition, amounted to GBP106,000 and was impaired during
the reporting year.
Weirs Drove Development Limited (indirectly owned through
Flexible Grid Solutions Limited)
On 19 June 2020, the Company announced an investment acquiring a
50% stake in Weirs Drove Development Limited, a developer of UK
based energy storage and flexible production projects. The cost of
the transaction was an initial investment and directly attributable
acquisitions costs, totalling GBP37,750, with the agreement to
extend a further GBP100,000, following the project meeting all
shovel ready criteria. At year end, these conditions had not been
met and so the Company will hold the project at the cost of the
initial investment, pending further developments. Goodwill in the
amount of GBP25,250 was recognised in relation to this
acquisition.
11. Investments in Associates and Joint Ventures
Group Company
Carrying balance GBP'000 GBP'000
-------------------------------------- ------------------------- ----------------------
At 1 July 2018 3,161 1,774
Additions 293 293
Share of loss in joint venture (1) -
Impairment of investment in associate (1,503) -
At 30 June 2019 1,950 2,067
Share of loss in joint venture (3) -
Impairment of investment in associate - -
Net book amount at 30 June 2020 1,947 2,067
-------------------------------------- ------------------------- ----------------------
At 30 June 2020, the Parent Company of the Group had a
significant influence by virtue other than a shareholding of over
20% or had joint control through a joint venture contractual
arrangement in the following companies:
Proportion Proportion Status
held by held by at
Country Group Group 30 June
of at 30 at 30 2020 Accounting
Company Name registration Class June 2020 June 2019 year end
-------------------------------- -------------- --------- ---------- ---------- -------- ------------
Direct
Mining Equity Trust (MET),
LLC (Held indirectly through 31 December
Regency Resources Corp.) USA Ordinary 25.84% 25.84% Inactive 2019
Oro Nickel Ltd (Held indirectly
through Papua
Oro Nickel Vanuatu) New Guinea Ordinary 41% 50% Active 30 June 2020
DVY196 Holdings Corp UK Ordinary 50% 50% Active 30 Sept 2020
-------------------------------- -------------- --------- ---------- ---------- -------- ------------
Mining Equity Trust (MET) LLC registered office is Trolley
Square, Suite 20 C, Wilmington, New Castle, Delaware 19806, United
States of America.
Oro Nickel Ltd registered office is c/o Sinton Spence Chartered
Accountants, 2(nd) Floor, Brian Bell Plaza, Turumu Street, Boroko,
National Capital District, Papua New Guinea.
DVY196 Holdings Corp registered office is 3081 3(rd) Avenue,
Whitehorse, Yukon, Canada Y1A 4Z7.
Summarised financial information for the Company's associates
and joint ventures, where available, is given below:
For the year as at 30 June 2020:
Revenue Loss Assets Liabilities Net Assets
Company GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- -------- -------- -------- ----------- ----------
Oro Nickel Ltd - (7) 3,667 (3,034) 633
DVY196 Holdings Corp - - 293 - 293
--------------------- -------- -------- -------- ----------- ----------
Total
Oro Nickel DVY196 Group
Carrying balance GBP'000 GBP'000 GBP'000
-------------------------------- ---------- ------------------------- -------------------
At 1 July 2019 1,657 293 1,950
Share of loss in joint venture (3) - (3)
Net book amount at 30 June 2020 1,654 293 1,947
-------------------------------- ---------- ------------------------- -------------------
12. Financial Instruments with Fair Value through Other
Comprehensive Income (FVTOCI)
30 June 2020 30 June 2019 30 June 2020 30 June
Group Group Company 2019
GBP'000 GBP'000 GBP'000 Company
GBP'000
-------------------------------------- ------------------ ------------- ------------- -----------
FVTOCI financial instruments
at the beginning of the period 178 - 178 -
Transferred from Available-for-sale
category - 986 - 586
Additions - 10 - 10
Disposals (42) (18) (42) (18)
Revaluations and impairment (132) (800) (132 (400)
-------------------------------------- ---- ------------- ------------- ------------- ---------
FVTOCI financial assets at
the end of the period 4 178 4 178
-------------------------------------- ---- ------------- ------------- ------------- ---------
Market Value of Investments
The market value as at 30 June 2020 of the investments'
available for sale listed and unlisted investments was as
follows:
30 June 2020 30 June 2019 30 June 2020 30 June 2019
Group Group Company Company
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ ------------ ------------ ------------ ------------
Quoted on London AIM - 31 - 31
Quoted on Standard List of
LSE - 96 - 96
Quoted on other foreign stock
exchanges 4 51 4 51
At 30 June 4 178 4 178
------------------------------ ------------ ------------ ------------ ------------
13. Financial instruments with Fair Value through Profit and Loss (FVTPL)
30 June 2020 30 June 2019 30 June 30 June
Group Group 2020 2019
GBP GBP Company Company
GBP GBP
------------------------------------- ------------- ------------- --------- ---------
FVTPL financial instruments 5 - - -
at the beginning of the period
Transferred from Available-for-sale
category - 113 - 108
Disposals - (108) - (108)
Revaluations - - - -
------------------------------------- ------------- ------------- --------- ---------
FVTPL financial assets at
the end of the period (audited) 5 5 - -
------------------------------------- ------------- ------------- --------- ---------
14. Trade and Other Receivables
Group Company
------------
2020 2019 2020 2019
GBP GBP GBP GBP
----------------------------------- ----- ----- ----- -----
Non-current
Amounts owed by Group undertakings - - 51 574
Purchased debt 367 - 367 -
Amounts owed by related parties
- due from associates and joint
ventures 1,323 1,318 1,322 1,318
----------------------------------- ----- ----- ----- -----
Total non-current 1,690 1,318 1,740 1,892
----------------------------------- ----- ----- ----- -----
Current
Sundry debtors 150 91 150 67
Prepayments 25 18 25 18
Amounts owed by related parties
- due from key management - 6 - 9
Total current 175 115 175 94
----------------------------------- ----- ----- ----- -----
Trade and other receivables include a balance of
-- GBP16,549 (2019: GBP18,948) owing to Red Rock Resources Plc,
a related party entity as a result of having common Directors.
-- GBP20,619 (2019: GBP5,503) owing to Curzon Energy Plc, a
related party entity as a result of having a common Director.
Debt Purchased from Resource Mining Corporation Limited
On 7 April 2020, the Company completed the acquisition of a
AUD$1.7m (GBP907,000) debt position in ASX listed Resource Mining
Corporation Limited for consideration of GBP178,096 and 13,288,982
new ordinary shares of Corcel. The Company's share price on the
date of transaction was GBP0.011. For this consideration the
Company also acquired a six-month option to buy the balance of
Resource Mining Corporation Limited debt for the same proportional
term, AUD 640,000 in cash and 23,711,018 new ordinary shares in
Corcel. The option was exercised, for more details please see note
25. Resource Mining Corporation Limited's exploration licenses in
Papua New Guinea remain under renewal at the time of this
report.
15. Trade and Other Payables
Group Company
----------- -----------
2020 2019 2020 2019
GBP GBP GBP GBP
------------------------------------- ---- ----- ---- -----
Trade and other payables 140 159 139 110
Amounts due to related parties:
* due to Red Rock Resources plc 8 122 8 122
Accruals 35 28 35 28
Trade and other payables 183 309 182 260
Borrowings (note 21 ) 760 1,522 760 1,522
------------------------------------- ---- ----- ---- -----
Total 943 1,831 942 1,782
------------------------------------- ---- ----- ---- -----
Trade and other payables include a balance of GBP7,962 (2019:
GBP122,109) owing to Red Rock Resources Plc, a related party entity
as a result of having common Directors.
Long-term borrowings maturity
2020 2019
GBP'000 GBP'000
------------------------------------- -------- --------
Due within 1-2 years (December 2021) 760 -
Total long-term borrowings 760 -
------------------------------------- -------- --------
C4 Energy Notes - YA PN II - Riverfort
On 5 December 2019, the Company announced that YA PN II and
Riverfort Global Opportunities Limited, holders of Promissory Notes
and Convertible Loan Notes, first announced on 6 June 2018, and
updated on 22 July 2019, agreed to extinguish the entire remaining
balance, through a subscription for New Loan Notes and a share
conversion. The partial conversion of the Promissory Notes resulted
in the issuance of 25,963,636 new ordinary shares of the Company,
and the investors have agreed to lock up the resulting promissory
conversion shares, 100% of the total for three months, 70% of the
total shares for a subsequent six months, and 40% of the total
shares of the promissory conversion shares for a further six-month
period. The approximate residual balance of GBP286,756 of the
promissory notes will be retired, and YA PN II Ltd and Riverfort
Global Capital Ltd have subscribed for new two-year loan notes
payable on 23 December 2021, bearing 8% interest per annum with no
conversion rights.
Also on 5 December 2019, the Company was informed by YA II PN
Ltd and Riverfort Global Capital Limited that, following the
subscription of New Loan Notes, both parties had granted an option
over their interests in the New Loan Notes, totalling GBP729,272,
to C4 Energy Ltd, a UK incorporated private entity. James Parsons,
Chairman of Corcel Plc, is also a Director and shareholder of C4
Energy Ltd.
Convertible Loan Notes
On 5 December 2019, the Company announced that of the
outstanding Convertible Loan Notes, first announced on 14 January
2019, holders of GBP281,113 of these notes have agreed to convert
these obligations into 10,222,291 new ordinary shares of the
Company at a price of GBP0.0275 per share. The terms of 915,873
warrants, originally issued to the Convertible Loan Note holders,
were varied, and the new terms of these warrants allow exercise
into new ordinary shares of the Company at a price of GBP0.60 for a
period of 36 months.
More details on all the borrowing are given in the note 22.
Right of Use Liability
IFRS 16 application resulted in recognition of lease liabilities
in the amount of GBP41,402. A corresponding right of use asset was
recognised on the IFRS 16 adoption but during the reporting year
was written off together with other assets of Flexible Grid One
Limited.
16. Reserves
Share Premium
The share premium account represents the excess of consideration
received for shares issued above their nominal value net of
transaction costs.
Foreign Currency Translation Reserve
The translation reserve represents the exchange gains and losses
that have arisen on the retranslation of overseas operations.
Retained Earnings
Retained earnings represent the cumulative profit and loss net
of distributions to owners.
FVTOCI Revaluation Reserve
The fair value through other comprehensive income (FVTOCI)
reserve represents the cumulative revaluation gains and losses in
respect of FVTOCI investments.
Share-Based Payment Reserve
The share-based payment reserve represents the cumulative charge
for options granted, still outstanding and not exercised.
Warrant Reserve
The warrant reserve represents the cumulative charge for
warrants granted, still outstanding and not exercised.
17. Share Capital of the Company
The share capital of the Company is as follows:
2020 2019
Authorised, issued and fully paid GBP'000 GBP'000
----------------------------------------------------------- --------------- ----------
189,910,596 ordinary shares of GBP0.0001 each
(2019: 1,516,894,159 ordinary shares of GBP0.0001
each) 19 152
1,788,918,926 deferred shares of GBP0.0009 each 1,610 1,610
2,497,434,980 A deferred shares of GBP0.000095
each 237 237
8,687,335,200 B Deferred shares of GBP0.000099
each 860 -
----------------------------------------------------------- --------------- ----------
As at 30 June 2,726 1,999
----------------------------------------------------------- --------------- ----------
Nominal,
Movement in ordinary shares Number GBP
----------------------------------------------------------- --------------- ----------
As at 1 July 2018 - ordinary shares of GBP0.0001
each 791,239,654 79,124
----------------------------------------------------------- --------------- ----------
Issued on 6 Dec 2018 at GBP0.005 per share (non-cash,
settlement for the option to acquire interest
in North American Vanadium project) 5,000,000 500
Issued on 14 Jan 2019 at GBP0.0035 per share (non-cash,
loan fees settlement) 22,571,428 2,258
Issued on 24 Jan 2019 at GBP0.005 per share (non-cash,
settlement with vendor of Vanadium project) 53,109,600 5,311
Issued on 24 Jan 2019 at GBP0.045 per share (non-cash,
settlement of investor relations communications
expenses) 5,333,333 533
Issued on 15 Mar 2019 at GBP0.000823 per share
(non-cash, loan conversion) 97,292,904 9,729
Issued on 25 Mar 2019 at GBP0.000729 per share
(non-cash, loan conversion) 121,107,242 12,111
Issued on 15 Apr 2019 at GBP0.0006 per share (cash) 399,999,998 40,000
Issued on 18 Apr 2019 at GBP0.00075 per share
(non-cash, SIP shares) 21,240,000 2,123
As at 30 June 2019 - ordinary shares of GBP0.0001
each 1,516,894,159 151,689
----------------------------------------------------------- --------------- ----------
Issued on 18 Dec 2019 at GBP0.0001 per share (cash) 56 0.01
Issued on 23 Dec 2019 at GBP0.000275 per share
(cash) 3,021,818,173 302,182
Issued on 23 Dec 2019 at GBP0.000275 per share
(non-cash, debt extinguished) 530,030,036 53,003
Issued on 23 Dec 2019 at GBP0.000275 per share
(non-cash, promissory notes conversion) 2,596,363,636 259,636
Issued on 23 Dec 2019 at GBP0.000275 per share
(non-cash, CLN conversion) 1,022,229,140 102,223
23 December 2019 share subdivision into (8,687,335,200) (868,734)
* 8,687,335,200 ordinary shares of GBP0.000001 each
* 8,687,335,200 B deferred shares of GBP0.000099 each
Total ordinary shares of GBP0.000001 each at 23
Dec 2019 prior to share 100:1 consolidation 8,687,335,200 8,687
Share consolidation 100:1new ordinary shares of
GBP0.0001 each 86,873,352 8,687
Issued on 3 Jan 2020 at GBP0.0305 per share (non-cash,
partner buy out) 2,461,538 246
Issued on 31 Jan 2020 at GBP0.0443 per share (non-cash,
director's salary) 122,312 12
Issued on 31 Jan 2020 at GBP0.0458 per share (non-cash,
director's salary) 49,028 5
Issued on 31 Jan 2020 at GBP0.0467 per share (non-cash,
director's fees) 141,901 14
Issued on 31 Jan 2020 at GBP0.0278 per share (non-cash,
settled creditor) 168,421 17
Issued on 7 Apr 2020 at GBP0.0083 per share (non-cash,
settled creditor) 4,909,610 491
Issued on 7 Apr 2020 at GBP0.0110 per share (non-cash,
debt purchase) 13,288,982 1,329
Issued on 7 Apr 2020 at GBP0.008 per share (cash) 58,750,000 5,875
Issued on 21 Apr 2020 at GBP0.0110 per share (non-cash,
SIP shares) 1,145,452 115
Issued on 19 Jun 2020 at GBP0.0100 per share (cash) 21,000,000 2,100
Issued on 19 Jun 2020 at GBP0.0100 per share (non-cash,
settled creditor) 1,000,000 100
----------------------------------------------------------- --------------- ----------
As at 30 June 2020 - ordinary shares of GBP0.0001
each 189,910,596 18,991
----------------------------------------------------------- --------------- ----------
The Company's share capital consists of three classes of shares,
being:
-- Ordinary shares with a nominal value of GBP0.0001, which are
the company's listed securities;
-- Deferred shares with a nominal value of GBP0.0009;
-- A Deferred shares with a nominal value of GBP0.000095;
-- B Deferred share with a nominal value of GBP0.000099
Subject to the provisions of the Companies Act 2006, the
deferred shares may be cancelled by the Company, or bought back for
GBP1 and then cancelled. These deferred shares are not quoted and
carry no rights whatsoever.
Warrants
At 30 June 2020, the Company had 60,839,078 warrants in issue
(2019: 689,567,098) with exercise price ranging GBP0.01245-GBP0.60
(2019: GBP0.0010-GBP0.01). Out of those, 3,999,999 (2019:
609,090,906) have market performance conditions that accelerate the
expiry date. Weighted average remaining life of the warrants at 30
June 2020 was 979 days (2019: 524 days).
50,575,000 (post-consolidation) warrants were issued in the
reporting year by the Group to its shareholders in the capacity of
shareholders and therefore are outside of IFRS 2 scope.
5,348,206 (post-consolidation) warrants were issued during the
reporting period to counterparties as payment for their services
and fall within the scope of IFRS 2. The charges related to the
warrants granted as a payment for services are included within
Administrative expenses lines of the Consolidated Income Statement
in the amount of GBP7,491 (2019: GBPnil) and Exploration expenses
line of the Consolidated Income Statement in the amount of
GBP21,710 (2019: GBPnil). Details related to valuation of all
warrants are disclosed below.
Group and Company 2020 2019
number of number of
warrants warrants
Outstanding at the beginning of the period 689,567,098 434,665,467
Granted during the period 86,834,317 480,476,190
Exercised during the period - -
Adjusted number of warrants in issue in line with
100:1 share consolidation (506,471,429) -
Lapsed during the period (209,090,908) (225,574,559)
-------------------------------------------------- ------------- -------------
Outstanding at the end of the period 60,839,078 689,567,098
-------------------------------------------------- ------------- -------------
Grant date Expiry date Warrant exercise Number of warrants Number of post
price, adjusted before share consolidation consolidation
post consolidation warrants
14 Jan 2019 12 Dec 2022 GBP0.60 91,587,303 915,873
15 Apr 2019 14 Apr 2021 GBP0.10 399,999,998 3,999,999
17 July 2019 1 July 2024 GBP0.25 20,000,000 200,000
31 Jan 2020 30 Jan 2023 GBP0.0285 - 438,596
7 Apr 2020 6 Apr 2023 GBP0.01245 - 4,909,610
7 Apr 2020 6 Apr 2023 GBP0.016 - 29,375,000
19 Jun 2020 18 Jun 2023 GBP0.016 - 21,000,000
--------------------- ---------------------------- ---------------
Total warrants
in issue at 30
June 2020 511,587,301 60,839,078
------------------------------------------------------- ---------------------------- ---------------
At 30 June 2020 the Company had the following warrants to
subscribe for shares in issue:
The aggregate fair value recognised in warrants reserve in
relation to the share warrants granted during the reporting period
was GBP272,785 (2019: GBPnil).
The following information is relevant in the determination of
the fair value of warrants granted during the reporting period.
Black-Scholes valuation model was applied for all the warrants
below:
Grant Expiry Number Warrant Warrant Share UK Volatility, FV of FV of
date date of post life, exercise price risk-free % 1 all
consolidation years price, at the rate warrant, warrants,
warrants adjusted grant at the GBP GBP
post date, date
consolidation, GBP of grant,
GBP %
17
July 1 Jul
2019 2024 200,000 5 0.25 0.065 0.5 127.79 0.047 9,400
31 Jan 30 Jan
2020 2023 438,596 3 0.0285 0.0278 0.425 100.97 0.01708 7,491
7 Apr 6 Apr
2020 2023 4,909,610 3 0.01245 0.00825 0.192 100.58 0.004422 21,710
7 Apr 6 Apr
2020 2023 29,375,000 3 0.016 0.0083 0.192 100.58 0.004001 117,529
19 Jun 18 Jun
2020 2023 21,000,000 3 0.016 0.0103 0.0001 102.40 0.005555 116,655
--------------- -------- ---------- ------------ --------- ----------
Total
at 30
June
2020 60,839,078 272,785
-------- ----------------------- -------- --------------- -------- ---------- ------------ --------- ----------
Capital Management
Management controls the capital of the Group in order to control
risks, provide the shareholders with adequate returns and ensure
that the Group can fund its operations and continue as a going
concern. The Group's debt and capital, includes ordinary share
capital and financial liabilities, supported by financial assets.
There are no externally imposed capital requirements.
Management effectively manages the Group's capital by assessing
the Group's financial risks and adjusting its capital structure in
response to changes in these risks and in the market. These
responses include the management of debt levels, distributions to
shareholders and share issues. There have been no changes in the
strategy adopted by management to control the capital of the Group
since the prior year.
18. Share-Based Payments
Employee Share Options
In prior years, the Company established an employee share option
plan to enable the issue of options as part of the remuneration of
key management personnel and Directors to enable them to purchase
ordinary shares in the Company. Under IFRS 2 "Share-based
Payments", the Company determines the fair value of the options
issued to Directors and employees as remuneration and recognises
the amount as an expense in the Income Statement with a
corresponding increase in equity.
At 30 June 2020, the Company had outstanding options to
subscribe for post-consolidation Ordinary shares as follows:
Options issued Options issued Options issued Total
9 September 5 December 31 January Number
Options issued 2016 exercisable 2019, exercisable 2020 exercisable
14 June 2016 at GBP0.8 at GBP0.0275 at GBP0.0285
exercisable at per share, per share, per share,
GBP0.45 per expiring on expiring expiring on
share expiring 9 September on 5 December 31 January
29 January 2022 2022, 2024 2025
Number Number
---------- ---------------- ----------------- ------------------ ----------------- ---------
S Kaintz 28,200 96,000 - 3,040,567 3,164,767
J Parsons - - 3,040,567 - 3,040,567
Employees 7,200 - - - 7,200
---------- ---------------- ----------------- ------------------ ----------------- ---------
Total 35,400 96,000 3,040,567 3,040,567 6,212,534
---------- ---------------- ----------------- ------------------ ----------------- ---------
At 30 June 2019, the Company had outstanding options to
subscribe for pre-consolidation Ordinary shares as follows:
Options issued Total
Options issued 9 September Number
14 June 2016 2016 exercisable
exercisable at at 0.8p per
0.45 pence per share, expiring
share expiring on 9 September
29 January 2022 2022,
Number Number
----------- ---------------- ----------------- ----------
A R M Bell 2,960,000 10,400,000 13,360,000
S Kaintz 2,820,000 9,600,000 12,420,000
E Bugnosen 560,000 - 560,000
Employees 720,000 - 720,000
----------- ---------------- ----------------- ----------
Total 7,060,000 20,000,000 27,060,000
----------- ---------------- ----------------- ----------
2020 2019
----------------------- ----------------------
Weighted Weighted
Number average average
of exercise Number of exercise
options price options price
Company and Group Number GBP Number Pence
------------------------------------- ------------ --------- ----------- ---------
Outstanding at the beginning of the
period 27,060,000 0.71 27,060,000 0.71
Granted during the year 6,081,134 0.28 - -
Adjusted in line with 100:1 share
consolidation (26,928,600) 0.71 - -
------------------------------------- ------------ --------- ----------- ---------
Outstanding at the end of the period 6,212,534 0.42 27,060,000 0.71
------------------------------------- ------------ --------- ----------- ---------
The exercise price of options outstanding at 30 June 2020 and 30
June 2019, ranged between GBP0.0275 and GBP0.80. Their weighted
average contractual life was 4.462 years (2019: 3.014 years).
Of the total number of options outstanding at 30 June 2020,
122,900 (2019: 25,330,000) had vested and were exercisable. The
weighted average share price (at the date of exercise) of options,
exercised during the year, was nil (2019: nil) as no options were
exercised during the reporting year (2019: nil).
The following information is relevant in the determination of
the fair value of share options granted during the reporting period
to the Company Directors. Black-Scholes valuation model was applied
to value the options with the inputs detailed in the table
below:
Grant Number of Vesting Life Option Share UK Volatility, FV of FV of
date post period, of the exercise price risk-free % 1 all
consolidation years option, price, at the rate option, options,
options years adjusted grant at the GBP GBP
post date, date
consolidation, GBP of grant,
GBP %
5 Dec
2019 3,040,567 3 5 0.0275 0.0400 0.00557 100.3 0.027 82,095
31 Jan
2020 3,040,567 3 5 0.0285 0.0278 0.425 101.0 0.01712 52,055
Total
at 30
June
2020 6,081,134
-------- -------------- -------- -------- --------------- -------- ---------- ------------ -------- ---------
Share-based remuneration expense, related to the share options
granted during the reporting period, is included in the
Administrative expenses line in the Consolidated Income Statement
in the amount of GBP23,193 (2019: GBPnil).
Share Incentive Plan
In January 2012, the Company implemented a tax efficient Share
Incentive Plan (SIP), a government approved scheme, the terms of
which provide for an equal reward to every employee, including
Directors, who have served for three months or more at the time of
issue. The terms of the plan provide for:
-- each employee to be given the right to subscribe any amount
up to GBP150 per month with Trustees, who invest the monies in the
Company's shares;
-- the Company to match the employee's investment by
contributing an amount equal to double the employee's investment
("matching shares"); and
-- the Company to award free shares to a maximum of GBP3,600 per employee per annum.
The subscriptions remain free of taxation and national insurance
if held for five years.
All such shares are held by SIP Trustees and the shares cannot
be released to participants until five years after the date of the
award.
During the financial year, a total of 1,145,452 free, matching
and partnership shares were awarded (2019: 21,240,000), resulting
in a share-based payment charge of GBP9,772 (2019: GBP10,620),
included into administrative expenses line in the Consolidated
Income Statement.
19. Cash and Cash Equivalents
30 June 30 June
2020 2019
Group GBP'000 GBP'000
------------------------- -------- --------
Cash in hand and at bank 415 64
------------------------- -------- --------
30 June 30 June
2020 2019
Company GBP'000 GBP'000
------------------------- -------- --------
Cash in hand and at bank 389 34
------------------------- -------- --------
Credit Risk
The Group's exposure to credit risk, or the risk of
counterparties defaulting, arises mainly from notes and other
receivables. The Directors manage the Group's exposure to credit
risk by the application of monitoring procedures on an ongoing
basis. For other financial assets (including cash and bank
balances), the Directors minimise credit risk by dealing
exclusively with high credit rating counterparties.
Credit Risk Concentration Profile
The Group's receivables do not have significant credit risk
exposure to any single counterparty or any group of counterparties,
having similar characteristics. The Directors define major credit
risk as exposure to a concentration exceeding 10% of a total class
of such asset.
The Company maintains its cash reserves in Coutts & Co,
which maintains the following credit ratings:
Credit Agency Standard and Moody's Fitch JRC 30 June 2020
Poor's Cash Held,
GBP'000
Long Term BBB Baa2 A A -
-------------- --------- ------- ----- -------------
Short Term A-2 P-2 F1 - 389
-------------- --------- ------- ----- -------------
The Company maintains its cash reserves in Westpac Business One,
which maintains the following credit ratings:
Credit Agency Standard and Moody's Fitch 30 June 2020
Poor's Cash Held,
GBP'000
Long Term AA- Aa2 A+- -
-------------- --------- ------- -------------
Short Term A-1+ P-1 F1 1
-------------- --------- ------- -------------
20. Financial Instruments
20.1 Categories of Financial Instruments
The Group and the Company holds a number of financial
instruments, including bank deposits, short-term investments, loans
and receivables and trade payables. The carrying amounts for each
category of financial instrument are as follows:
Group 2020 2019
30 June GBP'000 GBP'000
-------------------------------------------------------- -------- --------
Financial assets
Fair value through other comprehensive income financial
assets
Quoted equity shares (note 12 ) 4 178
Total financial assets carried at fair value, valued
at observable market price 4 178
Fair value through profit and loss financial assets
Investments in warrant of a listed entity (note 13
) 5 5
Total financial assets carried at fair value, valued
using valuation techniques 5 5
Cash and cash equivalents 415 64
Loans and receivables
Receivable from JVs 1,322 1,317
Purchased debt (note 14 ) 367 -
Other receivables 174 115
Total financial assets held at amortised cost 1,863 1,432
Total financial assets 2,287 1,679
-------------------------------------------------------- -------- --------
Total current 594 184
-------------------------------------------------------- -------- --------
Total non-current 1,693 1,495
-------------------------------------------------------- -------- --------
Company 2020 2019
30 June GBP'000 GBP'000
-------------------------------------------------------- -------- --------
Financial assets
Fair value through other comprehensive income financial
assets
Quoted equity shares 4 178
Total FVTOCI financial assets 4 178
Cash and cash equivalents 389 34
Loans and receivables
Receivable from JVs 1,322 1,317
Purchased debt (note 14 ) 367 -
Receivable from subsidiaries 51 574
Other receivables 174 94
Total financial assets held at amortised cost 1,914 1,985
Total financial assets 2,308 2,197
-------------------------------------------------------- -------- --------
Total current 564 128
-------------------------------------------------------- -------- --------
Total non-current 1,744 2,069
-------------------------------------------------------- -------- --------
Financial Instruments Carried at Fair Value Using Valuation
Techniques Other than Observable Market Value
Financial instruments valued using other valuation techniques
can be reconciled from beginning to ending balances as follows:
Group 2020 2019
30 June GBP'000 GBP'000
--------------------------------------------------------- -------- --------
Financial assets
Purchased debt 367 -
FVTPL 5 5
Total financial assets valued using valuation techniques 372 5
--------------------------------------------------------- -------- --------
Financial liabilities
Loans and borrowings
Trade and other payables 183 308
Borrowings 760 1,522
Total financial liabilities 943 1,830
--------------------------------------------------------- -------- --------
Trade Receivables and Trade Payables
Management assessed that other receivables and trade and other
payables approximate their carrying amounts largely due to the
short-term maturities of these instruments.
Borrowings
The carrying value of interest-bearing loans and borrowings is
determined by calculating present values at the reporting date,
using the issuer's borrowing rate. The loan is due in December 2021
and impact of the discounting is immaterial and therefore not
included into the valuation.
20.2 Fair Values
Financial assets and financial liabilities measured at fair
value in the statement of financial position are grouped into three
levels of a fair value hierarchy. The three levels are defined,
based on the observability of significant inputs to the
measurement, as follows:
-- Level 1: Quoted (unadjusted) market prices in active markets
for identical assets or liabilities;
-- Level 2: Valuation techniques for which the lowest level
input that is significant to the fair value measurement is directly
or indirectly observable; and
-- Level 3: Valuation techniques for which the lowest level
input that is significant to the fair value measurement is
unobservable.
The carrying amount of the Group and the Company's financial
assets and liabilities is not materially different to their fair
value. The fair value of financial assets and liabilities is
included at the amount at which the instrument could be exchanged
in a current transaction between willing parties, other than in a
forced or liquidation sale. Where a quoted price in an active
market is available, the fair value is based on the quoted price at
the end of the reporting period. In the absence of a quoted price
in an active market, the Group uses valuation techniques that are
appropriate in the circumstances and for which sufficient data are
available to measure fair value, maximising the use of relevant
observable inputs and minimising the use of unobservable
inputs.
The following table provides the fair value measurement
hierarchy of the Group's assets and liabilities:
Level 1 Level 2 Level 3 Total
Group and Company GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------- -------- -------- -------- --------
30 June 2020
Financial assets at fair value through
other comprehensive income
- Quoted equity shares 4 - - 4
Financial assets at fair value through
profit and loss - - 5 5
--------------------------------------- -------- -------- -------- --------
Level 1 Level 2 Level 3 Total
Group and Company GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------- -------- -------- -------- --------
30 June 2019
Financial assets at fair value through
other comprehensive income
- Quoted equity shares 178 - - 178
Financial assets at fair value through
profit and loss - - 5 5
--------------------------------------- -------- -------- -------- --------
20.3 Financial Risk Management Policies
The Directors monitor the Group's financial risk management
policies and exposures and approve financial transactions.
The Directors' overall risk management strategy seeks to assist
the consolidated Group in meeting its financial targets, while
minimising potential adverse effects on financial performance. Its
functions include the review of credit risk policies and future
cash flow requirements.
Specific Financial Risk Exposures and Management
The main risks the Group is exposed to through its financial
instruments are credit risk and market risk, consisting of interest
rate risk, liquidity risk, equity price risk and foreign exchange
risk.
Credit Risk
Exposure to credit risk, relating to financial assets arises
from the potential non-performance by counterparties of contract
obligations that could lead to a financial loss to the Group.
Credit risk is managed through the maintenance of procedures
(such procedures include the utilisation of systems for the
approval, granting and renewal of credit limits, regular monitoring
of exposures against such limits and monitoring of the financial
liability of significant customers and counterparties), ensuring,
to the extent possible, that customers and counterparties to
transactions are of sound creditworthiness. Such monitoring is used
in assessing receivables for impairment.
Risk is also minimised through investing surplus funds in
financial institutions that maintain a high credit rating or in
entities that the Directors have otherwise cleared as being
financially sound.
Trade and other receivables that are neither past due nor
impaired are considered to be of high credit quality. Aggregates of
such amounts are as detailed in note 14 .
There are no amounts of collateral held as security in respect
of trade and other receivables.
The consolidated Group does not have any material credit risk
exposure to any single receivable or group of receivables under
financial instruments entered into by the consolidated Group.
Liquidity Risk
Liquidity risk arises from the possibility that the Group might
encounter difficulty in settling its debts or otherwise meeting its
obligations related to financial liabilities. The Group manages
this risk through the following mechanisms:
-- monitoring undrawn credit facilities;
-- obtaining funding from a variety of sources; and
-- maintaining a reputable credit profile.
The Directors are confident that adequate resources exist to
finance operations and that controls over expenditures are
carefully managed. All financial liabilities are due to be settled
within the next twelve months.
Market Risk
Interest Rate Risk
The Company is not exposed to any material interest rate risk
because interest rates on loans are fixed in advance.
Equity Price Risk
Price risk relates to the risk that the fair value, or future
cash flows of a financial instrument, will fluctuate because of
changes in market prices largely due to demand and supply factors
for commodities, but also include political, economic, social,
technical, environmental and regulatory factors.
Foreign Exchange Risk
The Group's transactions are carried out in a variety of
currencies, including Australian Dollars, Canadian Dollars, United
Stated Dollars, Papua New Guinea Kina and UK Sterling. To mitigate
the Group's exposure to foreign currency risk, non-Sterling cash
flows are monitored. Fluctuation of +/- 10% in currencies, other
than UK Sterling, would not have a significant impact on the
Group's net assets or annual results.
The Group does not enter forward exchange contracts to mitigate
the exposure to foreign currency risk as amounts paid and received
in specific currencies are expected to largely offset one
another.
These assets and liabilities are denominated in the following
currencies as shown in the table below:
Group GBP AUD USD CAD Total
30 June 2020 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cash and cash equivalents 414 1 - - 415
Amortised cost financial assets -
Other receivables 175 - - - 175
FVTOCI financial assets 4 - - - 4
FVTPL financial assets - warrants - 5 - - 5
Amortised costs financial assets -
Non-current receivables 1,322 368 - - 1,690
Trade and other payables, excluding
accruals 148 - - - 148
Short-term borrowings - - - - -
Long-term borrowings 760 - - - 760
------------------------------------ -------- -------- -------- -------- --------
Group GBP AUD USD CAD Total
30 June 2019 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cash and cash equivalents 63 1 - - 64
Amortised cost financial assets -
Other receivables 115 - - - 115
FVTOCI financial assets 127 49 - 2 178
FVTPL financial assets - warrants - 5 - - 5
Amortised costs financial assets -
Non-current receivables 1,318 - - - 1,318
Trade and other payables, excluding
accruals 280 - - - 280
Short-term borrowings 708 - 814 - 1,522
Long-term borrowings - - - - -
------------------------------------ -------- -------- -------- -------- --------
Company GBP AUD USD CAD Total
30 June 2020 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cash and cash equivalents 389 - - - 389
Amortised cost financial assets - Other
receivables 175 - - - 175
FVTOCI financial assets 4 - - - 4
Amortised costs financial assets -
Non-current receivables 1,372 368 - - 1,740
Trade and other payables, excluding
accruals 148 - - - 148
Short-term borrowings - - - - -
Long-term borrowings 760 - - - 760
---------------------------------------- -------- --------
Company GBP AUD USD CAD Total
30 June 2019 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cash and cash equivalents 34 - - - 34
Amortised cost financial assets - Other
receivables 94 - - - 94
FVTOCI financial assets 4 - - - 4
Amortised costs financial assets -
Non-current receivables 1,892 - - - 1,892
Trade and other payables, excluding
accruals 233 - - - 233
Short-term borrowings 708 - 814 - 1,522
Long-term borrowings - - - - -
Exposures to foreign exchange rates vary during the year,
depending on the volume and nature of overseas transactions.
21. Reconciliation of Liabilities Arising from Financing
Activities and Major Non-Cash Transactions
Significant non-cash transactions from financing activities in
relation to loans and borrowings are as follows:
Non-cash
flow
Interest
Cash and Cash Cash
30 flows Non-cash Non-cash Non-cash arrangement flows flows 30
June Loans flow flow flow Forex fees Principal Interest June
2019 received Restructured Conversion movement accreted repaid repaid 2020
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Riverfort
Capital
Ltd and YA
II PN Ltd
loan 814 - (287) (714) 15 172 - - -
Riverfort
Capital
and YA II
PN
Lts loan -
new - - 729 - - 31 - - 760
Convertible
loan notes 708 7 (442) (281) - 44 (30) (6) -
Total 1,522 7 - (995) 15 247 (30) (6) 760
Significant non-cash transactions from financing activities in
relation to raising new capital are disclosed in note 17.
Significant non-cash transactions from investing activities
were:
-- 13,288,982 shares issued at GBP0.011 per share by the Company
for the total of GBP146,178 to acquire discounted debt. More
details are disclosed in note 13.
Significant non-cash transactions from operating activities were
as follows:
-- Payment for services and Director remuneration (share-based
payments in the form of options and warrants), in the amount of
GBP63,194 (2019: 10,62), disclosed in notes 17 and 18;
-- Impairment of other receivables in the amount of GBP36,599 (2019: GBP25,749);
-- Goodwill write off in the amount of GBP105,815 (2019: nil).
22. Significant Agreements and Transactions
Financing
-- On 22 July 2019, the Company announced that its outstanding
Loan Notes totalling USD 1.254 million, including a 4.5%
implementation fee, which had been added to the outstanding
principal, would be repaid over a period of five years, will carry
interest of 10% per annum and will incur a 2% fee upon redemption.
The Company has agreed to make an initial minimum payment of the
lower of 10% or USD 65,000 by way of a fundraising or issuance of
securities when next undertaken. The Company has also agreed to pay
the noteholders at least 10% of any fundraising thereafter. Regular
repayments of the outstanding Loan Notes will commence in 2020 and
are to be paid quarterly until 2024. In addition, warrants to
subscribe for 20,000,000 shares at a subscription price of
GBP0.0025 per share and valid until July 2024 were to be issued to
the lenders.
-- On 5 December 2019, the Company announced a corporate
restructuring including Board changes, a proposed placing, a
proposed share consolidation and debt reduction and
restructuring.
o James Parsons proposed to join the Board of Regency Mines Plc
as Executive Chairman following completion of regulatory due
diligence.
o Regency Mines Plc proposed to raise GBP831,000 by way of a
placing of 3,021,818,173 new ordinary shares of GBP0.0001 at a
price of GBP0.000275 per share. Alongside the placing an additional
530,030,036 shares representing obligations of GBP145,758.30 have
been issued to Red Rock Resources Plc in full extinguishment of
outstanding obligations.
o The holders of the Promissory Notes, first announced on 6 June
2018, and updated on 22 July 2019, have agreed to extinguish the
entire remaining balance, owed under the Promissory Notes, through
a subscription for new Loan Notes and a share conversion. The
partial conversion of the Promissory Notes will result in the
issuance of 2,596,363,636 new ordinary shares of the Company, and
the investors have agreed to lock up the Promissory Conversion
Shares, 100% of the total for three months, 70% of the total shares
for a subsequent six months, and 40% of the total shares of the
Promissory Conversion Shares for a further six-month period.
o The approximate residual balance of GBP286,756 of the
Promissory Notes will be retired, and YA PN II Ltd and Riverfort
Global Capital Ltd will subscribe for new two-year Loan Notes
payable on 23 December 2021, bearing 8% interest per annum with no
conversion rights.
o Of the outstanding Convertible Loan Notes, first announced on
14 January 2019, holders of GBP281,113 of these notes have agreed
to convert these obligations into 1,022,229,140 new ordinary shares
of the Company at a price of GBP0.000275 per share. The terms of
88,015,874 warrants, originally issued to the Convertible Loan Note
holders, will be varied, and the new terms of these warrants allow
exercise into new ordinary shares of the Company at a price of
GBP0.00055 for a period of 36 months.
o YA PN II Ltd and Riverfort Global Capital Ltd, existing
holders of GBP442,516 of Convertible Loan Notes, have agreed to
extinguish the balance of these notes and to subscribe for an
equivalent amount of new Loan Notes, as more fully described
above.
o A small residual balance of Convertible Loan Notes,
representing GBP30,000 of principal, will remain payable by the
Company in May 2020 on the existing Convertible Loan Note terms,
and the warrants associated with this note will remain in place
under the existing terms as announced on 14 January 2019.
o The Company has further been informed by YA II PN Ltd and
Riverfort Global Capital Ltd that, following the subscription for
the new Loan Notes, both parties have granted an option over their
interests in the new Loan Notes, totalling GBP729,272, to C4 Energy
Ltd ("C4"), a UK incorporated private company.
o The issuance of the transaction shares consisting of
3,021,818,173 placing shares, 530,030,036 subscription shares,
2,596,363,636 promissory conversion shares and 1,022,229,140
convertible conversion shares, is conditional upon, inter alia, the
passing of resolutions to be put to shareholders of the Company at
a General Meeting of the Company, to be held on 23 December 2019,
to provide authority to the Directors to issue and allot the
required shares on a non-pre-emptive basis. A circular, containing
a notice of the General Meeting, will be posted to
shareholders.
o Conditional on the passing of the resolutions at the General
Meeting, application will be made for the transaction shares to be
admitted to trading on AIM and it is expected that their admission
to AIM will take place on or around 24 December 2019.
o The Transaction Shares as a whole would, if the required
resolutions are approved at the General Meeting, result in the
issuance of 7,170,440,985 Ordinary Shares, representing, in
aggregate, 82.54% of the newly enlarged share capital of the
Company. The Transaction Shares will, when issued, be credited as
fully paid and will rank pari passu in all respects with the
existing ordinary shares of the Company.
o James Parsons has been awarded 304,056,730 three-year vest,
five-year expiry options with an exercise price of GBP0.000275 per
share.
o Red Rock Resources Plc, subscriber of the Subscription Shares,
has in common with Regency Mines Plc an Executive Director, Scott
Kaintz, and a previous Director within the last twelve months,
Andrew Bell.
o Riverfort Global Capital Ltd and YA II PN Ltd, the
participants in the Promissory Conversion, jointly held 19.93% in
the past twelve months, and as such are deemed substantial
shareholders during the last twelve months.
o For the purposes of the Transaction, the Subscription by Red
Rock Resources Plc and the Promissory Conversion by Riverfort
Global Capital Ltd and YA II PN Ltd, constitute related party
transactions as defined in Rule 13 of the AIM Rules for
Companies.
o Nigel Burton and Ewen Ainsworth, being the Directors of the
Company who are independent of the Transaction, having consulted
with the Company's nominated advisor, Beaumont Cornish Ltd,
consider the terms of the Subscription Shares and the Promissory
Conversion to be fair and reasonable insofar as the Company's
shareholders are concerned.
o Following the Transaction, the Company will have 8,687,335,144
Ordinary Shares in issue, each with a nominal value of GBP0.0001.
The Directors consider that it is in the best interests of the
Company's long-term development as a publicly quoted company to
have a smaller number of shares in issue and a higher share
price.
o As set out in the Notice of General Meeting Circular,
shareholders will be asked to consider, and if thought fit, pass
resolutions, which will have the following effect: that every 100
ordinary shares of GBP0.0001 on the Record Date are consolidated
into one new ordinary share of GBP0.0001 each.
o As the expected issued share capital of the Company is not
divisible by 100 without leaving a fraction of a share following
the Reorganisation, it is intended to conditionally issue and
allot, subject to approval of the Reorganisation by shareholders at
the General Meeting, 56 new Ordinary Shares on the Record Date. The
issued share capital of the Company as at the Record Date will
therefore be 8,687,335,200 Ordinary Shares.
o Assuming completion of the Transaction and the Consolidation
following the General Meeting, the Company will have a total of
86,873,352 ordinary shares of GBP0.0001 in issue.
-- On 18 December 2019, the Company announced that it had issued
56 new ordinary shares of GBP0.0001 each for a nominal total
consideration of GBP0.0056. The rounding shares have been issued to
adjust the total number of shares in issue to be 1,516,894,215
ordinary shares of GBP0.0001 each with voting rights, at the time
of the General Meeting held on 23 December 2019 at 12 noon, and
accordingly be a suitable number to issue 7,170,440,985 new
ordinary shares in a consolidated form of 71,704,410 ordinary
shares of GBP0.0001 each on 24 December 2019.
-- On 23 December 2019, the Company announced that at its
General Meeting, held earlier that day, all resolutions were
passed. As such James Parsons joined the Board as Executive
Chairman, and outgoing Chairman Nigel Burton, moved to senior
Independent Non-Executive Director. Accordingly, the 1 for 100
share consolidation was announced as being effected and 86,873,352
ordinary shares will trade in their new consolidated form with
effect from 24 December 2019.
-- On 31 January 2020, the Company announced the appointment of
a new company secretary and the issue of 481,622 new ordinary
shares, 3,040,567 options and 438,596 warrants further to
commitments made prior to the recent restructuring as announced on
5 December 2019, but only now executed due to the Company being in
a close period. Nigel Burton and Ewen Ainsworth joined the Company
as a Director on 24 June 2019 under an arrangement, where 42.5% and
48.6% of their respective annual Directors' fee was to be paid in
shares. Accordingly, to clear historic balances the Company has
issued 122,312 new ordinary shares to Mr Burton and 190,929 new
ordinary shares to Mr Ainsworth for the period from June 2019 to
December 2019 (of the 190,929 shares awarded to Mr Ainsworth,
141,901 new ordinary shares have been issued to Discovery Energy
Limited a company controlled by Mr Ainsworth). This deals with all
outstanding legacy issues and the Non-Executive Directors of the
Company are now being remunerated on normal market terms.
Consistent with the Company's strategy of preserving its cash
balances, a further 168,421 shares and 438,596 warrants (at
yesterday's closing price of GBP0.0285 have been awarded to
consultants and advisors for services to be provided during 2020.
The Company has awarded Scott Kaintz, Chief Executive Officer,
3,040,567 three-year vest, five-year expiry options under the
Company's Enterprise Management Scheme, to purchase new ordinary
shares of the Company at yesterday's closing price of GBP0.0285.
These options carry performance criteria under which vesting can be
accelerated. These options were unable to be awarded as part of the
recent restructuring due to the Company being in a close
period.
-- On 7 February 2020, the Company announced the partial waiver
of an existing lock-in agreement over 7,789,091 shares to enable a
block trade to new investors and a lock-in of all remaining shares
currently held by Red Rock Resources Plc. The balance of the shares
held by YA PN II Ltd and Riverfort Global Capital Ltd and for which
the lock-in was not waived, 18,174,545 in total, will remain bound
by the existing lock-in provisions. The entire position of
3,383,633 shares currently held by Red Rock Resources, will be
locked-in until March 2020, at that point 70% will be locked-in to
June 2020, and 40% until December 2020.
-- On 7 April 2020, the Company announced that it had raised
GBP470,000 by way of a placing of 58,750,000 new ordinary shares at
a price of GBP0.008 per share. The Company also granted
participating investors 29,375,000 3-year warrants with an exercise
price of GBP0.016 per share. Company Directors also participated in
the placing as follows, 1,562,500 new ordinary shares and 781,250
warrants have been issued to James Parsons and 937,500 new ordinary
shares and 468,750 warrants have been issued to Scott Kaintz.
1,562,500 new ordinary shares and 781,250 warrants have been issued
to Discovery Energy Pension Scheme of Discovery Energy Limited, a
company controlled by Ewen Ainsworth, a Director of the
Company.
-- On 21 April 2020, the Company announced that the Board of
Directors had approved the issuance of 1,145,452 ordinary shares in
the Company under the Company's Share Incentive Plan for the
2019/20 tax year as agreed in a Trustees meeting held on 1 April
2020. In respect of the 2019/20 tax year Scott Kaintz purchased and
was awarded a total of 818,180 new ordinary shares under the
SIP.
-- On 19 June 2020 the Company announced that it had raised
GBP210,000 by way of a placing organised by the Company of
21,000,000 new ordinary shares at a price of GBP0.01 per share. A
total of 21,000,000 three-year warrants have been issued to
investors at an exercise price of GBP0.016 per share. The Company
also issued 1,000,000 shares to a service provider in association
with this transaction. A Company Director, Ewen Ainsworth also
participated in the placing of 500,000 new ordinary shares and
500,000 warrants.
Mambare Nickel-Cobalt Project
-- On 7 April 2020, the Company announced the resolution of the
ongoing partner dispute and the execution of an amendment to its
development agreement regarding the Company's Mambare nickel-cobalt
project in Papua New Guinea. The JV partners agreed with immediate
effect to increase Battery Metals Pty Ltd's stake in the joint
venture to 59%, with a further 6% to be awarded if prior to
November 2021, the Mambare JV receives a recommendation to award a
mining lease from the Mineral Resource Authority in Papua New
Guinea. The Company also agreed to pay Battery Metals Pty Ltd. USD
50,000 in cash and USD 50,000 in shares at a price of GBP0.0083,
resulting in the issuance of 4,909,610 new ordinary shares. Battery
Metals also received 4,909,610 three-year warrants price at
GBP0.01245. Both parties further agreed that all litigation between
them would cease immediately and a revised joint venture structure
and development plan has been created with the centre of gravity in
Australia, leveraging Battery Metal's logistical advantages and
regional proximity.
Resource Mining Corporation Debt Purchase
-- On 7 April 2020, the Company announced the partial purchase
of the corporate debt of Resource Mining Corporation Pty Ltd, the
100% owner of the WoWo Gap nickel-cobalt project in Papua New
Guinea. The Company agreed to purchase AUD 1.7 million of
outstanding corporate debt in RMI from Sinom Hong Kong Limited. The
consideration was GBP178,096 cash plus 13,288,982 new ordinary
shares, representing aggregate consideration of GBP324,275, being a
62% discount to the face value of the debt. The new shares were
subject to a lock-up of one year. The Company has also, after the
accounting period, exercised the 6-month option to purchase the
remaining RMI debt of AUD 3.05 million for consideration of
23,711,018 new ordinary shares and AUD 640,000 in cash, which
represents a similar discount to the initial acquisition. All the
loan notes are interest free and unsecured.
Flexible Grid Solutions
-- On 20 September 2019, the Company announced that Allied
Energy Services Ltd, an investment held through the Company's EsTeq
Ltd subsidiary had executed an exclusivity agreement with the
leaseholder of the Southport Energy Centre, as previously announced
on 24 July 2019. The agreement gave Allied Energy Services Ltd a
period of exclusivity of three months over Phase 1 of the project,
during which time the leaseholder will refrain from entering into
any agreement that would prevent Allied Energy Services Ltd from
executing a commercial lease as contemplated by the letter of
intent signed by the parties in February 2019. The agreement
further includes a right of first refusal from the date of this
agreement for a period of six months over Phase 2 of the project,
conditional on Allied Energy Services Ltd, making an investment in
Phase 1 during the period. The leaseholder must offer Allied Energy
Services Ltd the right to participate in Phase 2 of the project on
the same terms as any third party, which Allied Energy Services Ltd
may then consider at its own discretion.
-- On 19 December 2019, the Company announced that it had agreed
to purchase the 20% minority interest in Allied Energy Services Ltd
that it did not currently own. The minority shareholders in Allied
Energy Services would be paid 2,461,538 post consolidation new
ordinary shares of Regency Mines Plc and would be locked in for six
months following the date of the agreement. A second share issuance
of up to GBP80,000 would be priced based on a trailing 10 day
volume weighted average price calculation, and would come due on
the combination of Regency Mines Plc trading at a market cap of
over GBP10 million for consecutive days, and when Allied Energy
Services had secured GBP30 million in funding for its first
project, the Southport Energy Centre.
-- On 23 December 2019, the Company announced the signing of an
MOU with ion Ventures, an investor in and developer of energy
storage and flexibility assets. Under the terms of the MOU the
parties have agreed to partner on the Company's existing pipeline
of projects with a view towards identifying and prioritising the
most commercially attractive projects, securing funding and moving
them quickly to first cash flow. ion Ventures will support the
Company initially, on a consultancy basis, and will be issued
shares in the Company as consideration.
-- On 3 January 2020, the Company announced the completion of
the buy-out of the 20% minority shareholders in Flexible Grid One
Limited (ex-Allied Energy Services Ltd). As such, the Company
issued 2,461,538 new ordinary shares to complete the transaction.
These shares were to be locked-in for six months. The investment in
Flexible Grid One Limited was subsequently written off at the
year-end.
-- On 19 June 2020, the Company announced the purchase of a 50%
interest in Weirs Drove Development Limited ("WDD"), a developer of
energy storage and solar projects in the United Kingdom, with an
initial site in Burwell, outside of Cambridge. The Company acquire
a 50% interest in Weirs Drove Development Limited, a debt free
privately owned battery storage developer for GBP25,000 of cash
injected into the WDD business. Flexible Grid Solutions Limited
further agreed to extend a shareholder loan of GBP100,000 once the
first site at Burwell has met all shovel ready criteria, which
includes a grid connection offer, full planning permission and an
executed site lease. The debt is repayable at financial close,
expected later in 2020. It is expected that both the debt and
equity injected by the Company would be utilised to finalise the
development of the Burwell battery storage site and thereafter to
advanced additional projects. In addition to agreeing an industry
standard joint venture shareholder agreement, including Board
participation and Company approval of key decisions, the Company
has secured a further option to buy the remaining 50% of WDD at a
price of GBP30,000 per fully operational megawatt of energy storage
or production at the time of option exercise, to be paid 50% in
cash and 50% in new ordinary shares of the Company. The option is
exercisable at the sole election of the Company, and becomes
exercisable following WDD commissioning of at least 40MW of
installed energy storage or production capacity. A deferred option
consideration of GBP5,000 per MW on the next 100MW of installed
capacity would also become due after reaching that metric, also
payable 50% in cash and 50% in shares if triggered. The entire
equity component of the option and deferred consideration, should
the option be exercised at the Company's discretion, would be
priced at the 30-day VWAP prior to exercise. The Company has also
agreed standard drag along and tag along rights for the
Company.
US Metallurgical Coal Interests
-- On 9 July 2019, the Company announced that Mining Equity
Trust LLC had agreed to accept an investment of USD 750,000 by
Carraigbarre Capital Ltd in exchange for a 45.02% stake in the
business and a Board seat. Legacy Hill Resources Ltd has agreed to
remain as operator of the Omega metallurgical coal assets, with the
new funds deployed to partially recapitalise MET and its Omega coal
operations. Previously a forbearance agreement was signed with the
original sellers of the assets, by which obligations of USD 8.17
million were rescheduled over a period to October 2020, however, at
the time of the announcement the forbearance agreement was in
default. Following the investment by Carraigbarre Capital Ltd,
Regency Mines Plc retained a 25.84% stake in the expanded share
capital of MET. It was further noted that additional funding would
be required to ensure the long-term stability of the business with
plans in place to install a wash plant and upgrade the saleable
metallurgical coal product subject to additional capital being made
available.
23. Commitments
As at 30 June 2019, the Company had entered into the following
commitments:
-- Exploration commitments: On-going exploration expenditure is
required to maintain title to the Group mineral exploration
permits. No provision has been made in the Financial Statements for
these amounts as the expenditure is expected to be fulfilled in the
normal course of the operations of the Group.
-- On 29 May 2020, the Company entered into a new lease
agreement for office space with WeWork Aldwych House. The initial
lease runs from 1 July 2020 through 31 January 2021 and is
non-cancellable during this period. Thereafter, the lease can be
terminated by giving one full calendar month notice.
24. Related Party Transactions
-- The costs, incurred on behalf of the Company by Red Rock
Resources Plc, are invoiced at each month end and settled on a
quarterly basis. By agreement, the Company pays interest at the
rate of 0.5% per month on all balances outstanding at each month
end until they are settled. The total charged to Red Rock Resources
Plc for the year was GBP25,563 (2019: GBP49,135). Of this, GBP7,962
was outstanding at 30 June 2020 (2019: GBP31,372). The Company is
closely associated with Red Rock Resources Plc, in which the
Company has no interest as at 30 June 2020 (2019: 0.67%). Red Rock
Resources Plc had a 3.77% interest in the Company as at 30 June
2020 (2019: 2.34%). Two Directors, Andrew Bell and Scott Kaintz,
are also Directors of, and received a salary from, Red Rock
Resources Plc during the year.
-- The costs incurred by the Company on behalf of Red Rock
Resources Plc were GBP21,589 (2019: GBP58,329). Of this, GBP16,549
was outstanding at 30 June 2020 (2019: GBP18,948).
-- Related party receivables and payables are disclosed in notes 14 and 15 , respectively.
-- The Company does not hold any shares in Red Rock Resources
Plc as at 30 June 2020 (2019: 5,759,760 shares (0.85%)).
-- The key management personnel are the Directors and their
remuneration is disclosed within note 8 .
-- A related party transaction, involving the subscription for
shares by Red Rock Resources Plc and the Promissory Note Conversion
by YA PN II Ltd and Riverfort Global Capital Ltd, is fully outlined
in Note 22 .
-- Ewen Ainsworth, a Director of the Company, is paid a portion
of his Director's fee through Discovery Energy Ltd, a company
controlled by Mr Ainsworth.
25. Events After the Reporting Period
-- On 14 July 2020, the Company announced that it had been
notified that Ewen Ainsworth, Non-Executive Director, sold and
repurchased within an ISA an aggregate 549,028 Ordinary Shares of
GBP0.0001 each in the Company. Specifically, on 14 July 2020, Ewen
Ainsworth sold a total of 549,028 Ordinary Shares at a price of
GBP0.0085 per Ordinary Share and on 14 July 2020 repurchased
549,028 Ordinary Shares at a price of GBP0.00857 per Ordinary
Share. The shares are held in Rock (Nominees) Limited A/C ISA.
-- On 5 August 2020, the Company announced that it was proposing
to change its name to Corcel Plc. The purpose of the name change
was to more closely reflect the Company's strategy to develop its
businesses across the battery metals exploration and flexible grid
solutions space. An application is being made to Companies House
for the name change. A new website will also be launched
simultaneous to the name change.
-- On 7 August 2020, the Company announced that its name had now
been changed by Companies House and accordingly the Company is now
named Corcel Plc. With effect from 08:00 today, trading on AIM
would commence under the Company's new name and the new TIDM will
be CRCL.L. The Company's ISIN and SEDOL remain unchanged.
-- On 10 August 2020, the Company announced the mobilisation of
the geological team to deliver the field programme at the Dempster
Vanadium project in the Yukon, Canada, a project where the Company
has a 50% interest. The exploration team, provided by Corcel's
local technical consultant Breakaway Exploration Management Inc,
will spend up to ten days on-site to conduct a soil geochemical
survey to define drill targets focused on a 3km segment, where no
work had been done previously.
-- On 25 August 2020, the Company announced the completion of
the field programme at the Dempster Vanadium project in the Yukon,
Canada, a project where the Company has a 50% interest. The
geological team have now demobilised from site following completion
of the field programme. Rock and soil samples collected during the
programme have been submitted to the lab in Canada, and are now
being analysed along with the core pulps, which have been delivered
to McGill university for processing at their laboratories as part
of the joint venture's collaboration with a McGill PhD candidate.
The results of the programme and the lab analysis of the sampling
will be announced in due course.
-- On 22 September 2020, the Company announced the receipt of
both planning permission and a grid connection offer for the
Burwell energy project. The Company announces that the Weirs Drove
Development Company ("WDDC"), where it owns 50%, has received a
formal Grid Connection offer from UK Power Networks, which includes
undertaking the "non-contestable" works necessary to connect the
Burwell site to its UK energy network. This offer covers a site
capacity of 100MW (split 49.9MW of energy storage and 49.9MW of
photovoltaic solar energy production), a 132kV power input and an
import / export capacity of 49.9MW and 99.8MW respectively. The
offer is for substantially more power than originally planned,
which enables a larger battery storage site alongside an adjacent
solar power site. The Company also announces that the landlord of
the Burwell site has received from the East Cambridgeshire District
Council planning permission for a 50MW energy storage development.
The permission covers the existing factory and the surrounding land
at the Burwell site, and specifies the installation of the main
battery and a 132kV transformer on an adjacent hard stand.
-- On 26 October 2020, the Company announced that it had raised
gross proceeds of GBP750,000 by way of a placing with private
investors of 75,000,000 new ordinary shares at a price of GBP0.01
per share. A total of 37,500,000 three-year warrants have been
issued to investors at an exercise price of GBP0.016. The Company
also issued 3,000,000 shares to service providers associated with
the recent rebranding.
-- On 28 October 2020, the Company announced that it had
exercised its option to buy AUD 3.05 million of debt in Resource
Mining Corporation Limited, as first announced on 7 April 2020 and
26 October 2020. Execution of the option entails the payment of AUD
640,000 in cash and the issuance of 23,711,018 new ordinary shares
in Corcel to Base Asia Pacific Ltd. On 17 November 2020, the
Company announced the completion of the exercise of the option.
26. Control
There is considered to be no controlling party.
27. These results are audited, however the information does not
constitute statutory accounts as defined under section 434 of the
Companies Act 2006. The consolidated statement of financial
position at 30 June 2020 and the consolidated income statement,
consolidated statement of comprehensive income, consolidated
statement of changes in equity and the consolidated cash flow
statement for the year then ended have been extracted from the
Group's 2020 statutory financial statements. Their report was
unqualified and contained no statement under sections 498(2) or (3)
of the Companies Act 2006. The financial statements for 2020 will
be delivered to the Registrar of Companies by 31 December 2020.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
FR FDSESSESSEFF
(END) Dow Jones Newswires
December 01, 2020 02:00 ET (07:00 GMT)
Regency Mines (LSE:RGM)
Historical Stock Chart
From Apr 2024 to May 2024
Regency Mines (LSE:RGM)
Historical Stock Chart
From May 2023 to May 2024