Blencowe Resources Plc, the natural resources company focused on the development of the Orom-Cross Graphite Project in Uganda, is pleased to announce its audited financial results for the year ended 30 September 2023 (the “Annual Report”) and it’s notice of Annual General Meeting (“Notice of AGM”).

The Annual Report which includes an unqualified audit report and audited Financial Statement for the year ended 30 September 2023 & The Notice of AGM and the associated Form of Proxy will be made available on the Company’s website at www.blencoweresourcesplc.com.  Hard copies will be posted to the Company’s shareholders.

For further information, please contact:

Blencowe Resources Sam Quinn	www.blencoweresourcesplc.com Tel: +44 (0) 1624 681 250 info@blencoweresourcesplc.com
Investor Enquiries Sasha Sethi	Tel: +44 (0) 7891 677 441 sasha@flowcomms.com
Tavira Financial Limited Jonathan Evans	Tel: +44 (0)20 7100 5100 jonathan.evans@tavirasecurities.com
First Equity Limited Jason Robertson	Tel: +44 (0)203 192 1733 jasonrobertson@firstequitylimited.com

Chief Executive Officer’s Statement for the period ended 30 September 2023 

Shareholders and Stakeholders,

It gives me great pleasure to reflect on another year of progress within Blencowe and our continued efforts to unlock the value sitting in our Orom-Cross graphite project in Uganda.  This project remains one of the largest, highest quality graphite projects in the world and in a market which is forecast to demand exponential tonnage of graphite ahead, in particular to deliver the huge number of batteries to power electric vehicles and store renewable energy, we are operating in very exciting times.

Our main focus of energy and efforts this past year have been in commencing the Definitive Feasibility Study (DFS) which is the last major study required prior to investment decision, and one that requires a lot more work and cost than the previous Scoping or Pre-Feasibility Studies.  The DFS started in the early calendar year and was expected to take 12 months, but longer than anticipated time taken to secure necessary funding has meant the DFS will only be completed by end of 2024.  The DFS requires four major thrusts; firstly, mining and infrastructure development at site; secondly revised environmental impact studies to extend the previous EIS that was done in conjunction with our mining license award in 2019; thirdly bulk sample testing in China to ultimately secure offtake contracts; and fourthly, providing a full project funding solution, for the DFS costs themselves but thereafter to implement the strategy and build the mine.

As the DFS has progressed a fifth element has now been added, which is downstream processing of graphite from a concentrate to a purified product.  This is being considered as a means to significantly enhance the overall value of the project.

I am pleased to report that all DFS work to date has yielded positive results, with no exceptions.  Earlier in the calendar year we mined 100 tonnes of material from Orom-Cross and shipped this to China where it underwent commercial scale testing to show that we can process and deliver the same high quality end concentrate from a much larger quantity than we had previously proven we could deliver from lab-scale testing.  This pilot testing in China has been very successful and by showcasing our product over there we have also opened many doors for future relationships; in simple terms our product is well received there which is good as China accounts for the vast majority of the graphite market today.  We are using very experienced partners to build these relationships in China, experts who have taken other graphite companies through this same qualification process, so we are confident we will end up with a good end result from this in 2024.  In order to seek tier one partnerships for offtake we are now embarking on a further 600 tonne bulk sample to go through the same pilot testing procedure over the next six months and if successful this will hopefully complete our pre-qualification process and allow us to move to negotiate initial offtake agreements which are vital to the DFS.

Work continues in Uganda on all facets of infrastructure and environment, and we are building a strong team there to take ownership of in-country requirements.  Government of Uganda support remains firm as does local community support.

The process to find a tier one strategic funding partner has taken us longer than anticipated but has ultimately borne exceptional results, as the Company was able to sign a Technical Assistance Grant with the US International Development Funding Corporation (DFC) in September 2023 for a US$5 million grant to Blencowe for DFS costs, as well as DFC mandated as lead partner to help provide a full project funding solution ahead.  Having the US Government as our strategic partner has obvious benefits and we are very proud to be the first and only graphite company that DFC have partnered with to date in this regard.  Whilst this took time to lock down this grant it was absolutely worth the wait and Blencowe now has a strong funding partner ahead which is the envy of many of our peers in the graphite market.

The shift in focus to consider further downstream processing is gathering momentum, and this could have a colossal impact on the value that Orom-Cross brings to Blencowe.  Whilst mining and processing graphite to a 96% concentrate was proven to be a profitable venture in the PFS we have come to realise that further processing of that concentrate to a 99.95% purified product can yield considerably higher margins and Blencowe is now considering all options how it can get involved in this downstream market.  There is substantial IP (intellectual property) involved which is held by existing processing companies so any such a move would involve partnering with one or more of these processing experts, but work is underway to consider several alternatives.

Further work has been completed using international technical experts to ascertain the quality of Orom-Cross graphite as it upgrades from 96% concentrate to a purified 99.95% end product, and I am pleased to say the results have been outstanding, with Orom-Cross having passed with flying colours.  At the end of the day each graphite project is unique, with inherent chemical characteristicst hat are different to each project, and which largely define the quality of the end product and therefore price and demand for these end products.  As we continue to test Orom-Cross through to 99.95% purified product we continue to learn of its exceptional chemical properties and these characteristics will ultimately be the advantage that helps shape key relationships, offtake partners and contracts.

 

I would like to reach out to all the consultants, partners, and other relationships we have built to thank all of them for their efforts, including our internal management team.  We are in very exciting times as the green energy revolution gathers pace and the graphite market is evolving fast due to a variety of factors, including geopolitics.  Each and every one of these partnerships is critical to our success ahead and we value their expertise and support.

I would also like to thank our shareholders and the wider market for your support, and in particular our major shareholders who have stuck by us through what have been challenging market conditions.  We offer the ability to be part of something unique as we develop this exceptional project, and we hope that we can continue to justify your faith and your investment.

Mike Ralston

Chief Executive officer

The Directors present the Strategic Report for the year ended 30 September 2023.

Results

The results are set out in the Consolidated Statements of Comprehensive Income on page 29. The total comprehensive loss attributable to the equity holders of the Group for the period was £1,366,685 (2022: £1,089,679).

The Group paid no distribution or dividends during the period.

Business model, review of the business and future developments

The Group’ principal activity is the exploration of Orom-Cross Graphite Project in Northern Uganda, which it owns through its 100% subsidiary Consolidated African Resources Limited ‘CARU’.

The Group’s aim is to create value for shareholders through the discovery and development of economic mineral deposits.  The Group’s strategy is to continue to progress the development of its existing project in Uganda and to evaluate its existing and new mineral resource opportunities.

The Group’s business is directed by the Board and is managed on a day-to-day basis by the Executive Chairman, Cameron Pearce.  The Board monitors compliance with objectives and policies of the Group through performance reporting, budget updates and periodic operational reviews.

Key performance indicators (KPIs)

Financial KPIs

Results for the year

With no income in the year the Group continues to monitor the loss before tax to ensure the continued viability of the Group and ability to continue to develop the Orom-Cross Graphite Project. The Group has made a loss before tax of £1,397,967 for the year ended 30 September 2023 (2022: loss before tax of £1,085,474).

Exploration expenditure – funding and development costs

At this stage in the Group’s development, the Group is focusing on financing and continued development of the Orom-Cross Graphite Project. Therefore, the funding and development costs of Orom-Cross Graphite project have been chosen as Key Performance Indicators.

The Group incurred £1,190,977 (2022: £1,423,236) of capitalised exploration costs. These exploration costs are in line with the Board expectations.

In 2023 the Group raised funds of £1,313,820 net of issue costs (2022: £2,628,748) from the equity markets.  Please see note 20 for further details of the funds raised after the year end.

At 30 September 2023 the Group had a cash balance of £129,853 (2022: £346,994).

Employees

There were two employees during the year apart from the directors, the Chief Executive Officer (“CEO”) and the Chief Operating Officer (“COO”), who are the key management personnel. All current members of the Board and the key management personnel are males. For more information about the Group’s key management personnel see note 7.

Social, Community and Human Rights Issues

The Orom-Cross Graphite Project is still at an early stage of project development and further consideration will need to be given to social, community and human rights issues affecting the Project. Currently a key consideration is that under Ugandan law the Company is required to rehabilitate the area affected by the mining activities. Accordingly, there will be a potential cost associated with undertaking this obligation. At this time, although the Group continues to explore and test the minerals, the land has not been affected and therefore the Group has not accounted for any costs associated with the rehabilitation of the area.

On 10 September 2022 CARU signed a revised agreement with the local communal land association of Locomo village for the land surface rights and has agreed to help provide local education and sensitization of the local communities in Akurumo parish on the opportunities and advantages of mining graphite. CARU will give employment priorities to the local capable members of Akurumo parish.

Since the acquisition of CARU the Group has donated to local causes, such as a scholarship programme and to fight against COVID-19. The Group will continue to donate to the local communities around the region of Uganda in which the Project Licences are located.

Principal risks and uncertainties and risk management

The Group operates in an uncertain environment and is subject to a number of risk factors. The Directors have carried out a robust assessment on the principal risks facing the Group, including those that threaten its business model, future performance, solvency or liquidity. 

The Group continues to monitor the principal risks and uncertainties with the help of specialists to ensure that any emerging risk are identified, managed and mitigated. There has been no significant impact to the Group from the Russia-Ukraine conflict and the Israel-Palestine conflict.

Geological risks

On 19 July 2022, the Group completed the pre- feasibility study for the Orom-Cross graphite project and a net present value (post tax) assessment of $482million has been estimated from the project. The pre-feasibility study indicates a robust, long-term, and profitable mining operation at Orom-Cross. The Pre-feasibility study was managed by leading graphite technical experts Battery Limits Pty Limited (Australia), who have delivered several other graphite project feasibility study in the past. The estimated production per annum will be 36,000tpa as 96-97% end products and increasing this to 147,000tpa in stages. It is estimated that 50% of the product is +100 to +50 mesh fractions.  The pre-feasibility study estimated a US$1,307/t weighted average selling price for a basket of end products and US$499/t operating costs, underlining one of the lowest cost graphite projects worldwide.  On 26 September 2022 the Group announced that it had commenced the definitive feasibility study with completion date 2H-2023.

On 6 December 2022, the Group completed the metallurgical test work on substantially up-scaled quantities of Orom-Cross composite mix. The additional metallurgical test work on Orom-Cross graphite continues to deliver a high-quality grade graphite concentrate. The program was designed to deliver the following objectives:

1.   Confirm a 95-97% total graphite content, pure concentrate with low impurities.

2.   Confirm 90% recovery is achievable for this concentrate.

3.   Confirm the liberation process to maintain a high percentage of Jumbo/XL/Large flakes within concentrate.

4.   Confirm process flow diagram for plant design as part of the Definitive Feasibility Study.

5.   Deliver bulk concentrate samples to allow Blencowe to initiate discussions with potential off-take partners.

On 11 January 2023 the Ugandan Government approved a landmark one-off permit for Blencowe to export bulk sample graphite from Orom-Cross for key Metallurgical final testing. 100 tonnes of bulk samples were mined, and fast track delivered to China by air freight for initial off -site testing with a Chinese experienced graphite processing specialist Jilin Huiyang New Material Technology Company Limited. Blencowe also send an additional 5kg of concentrate to Chicago-based graphite specialist AET Co, which is a recognized industry expert in SPG (spheronised purified graphite) and expandability testing.

On 23 January 2023, the group appointed a leading firm from Perth, CPC Engineering to lead, develop and sign off the Definitive Feasibility study.

The Group uses advisors with specialist knowledge in mining and related environmental management for reducing the impacts of environmental risk.

Government regulation and political risk

The Group’s operating activities are subject to laws and regulations governing expropriation of property, health and worker safety, employment standards, waste disposal, protection of the environment, mine development, land and water use, prospecting, mineral production, exports, taxes, labour standards, occupational health standards, toxic wastes, the protection of endangered and protected species and other matters. While the Group believes that it is in substantial compliance with all material current laws and regulations affecting its activities, future changes in applicable laws, regulations, agreements or changes in their enforcement or regulatory interpretation could result in changes in legal requirements or in the terms of existing permits and agreements applicable to the Group or its properties, which could have a material adverse impact on the Group’s current operations or planned exploration and development projects. Where required, obtaining necessary permits and licences can be a complex, time consuming process and the Group cannot assure whether any necessary permits will be obtainable on acceptable terms, in a timely manner or at all. The costs and delays associated with obtaining necessary permits and complying with these permits and applicable laws and regulations could stop or materially delay or restrict the Group from proceeding with any future exploration or development of its properties. Any failure to comply with applicable laws and regulations or permits, even if inadvertent, could result in interruption or closure of exploration, development or mining operations or material fines, penalties or other liabilities.

The Orom-Cross Graphite Project is located in Uganda. The Group’s activities may be affected in varying degrees by political stability and governmental regulations. Any changes in regulations or shifts in political attitudes in the country or any other countries in which the Group may operate are beyond the control of the Group and may adversely affect its operations. To mitigate this risk, the Board continues to review any changes on the government regulations and the political stability in Uganda.

Pricing risk

The development and success of any project of the Group will be primarily dependent on the future prices of graphite. The graphite prices are subject to significant fluctuation and are affected by a number of factors which are beyond the control of the Group. Such factors include, but are not limited to exchange rates, fluctuations in the value of the United States dollar and foreign currencies, global and regional supply and demand, and political and economic conditions. The price of graphite and other commodities have fluctuated widely in recent years, and future price declines could cause any future development of and commercial production from the Group’s property to be impracticable. Although the Group expects to have sufficient working capital for the Working Capital Period, depending on the price of graphite, projected cash flow from planned mining operations may not be sufficient for future operations and the Group could be forced to discontinue any further development and may lose its interest in, or may be forced to sell, some or all of its properties. Future production from the Orom-Cross Graphite Project is dependent on the production of graphite that is adequate to make the project economically viable. The Board regularly monitors the prices of graphite and is prepared to raise further capital if it is required.

Commodity and currency risk

As the Groups’ potential earnings will be largely derived from the sale of graphite, the Group’s future revenues and cash flows will be impacted by changes in the prices and available market of this commodity. Any substantial decline in the price of graphite or in transport or distribution costs may have a material adverse effect on the Group.

Commodity prices fluctuate and are affected by numerous factors beyond the control of the Group. These factors include current and expected future supply and demand, forward selling by producers, production cost levels in major mineral producing centers as well as macroeconomic conditions such as inflation and interest rates.

Furthermore, the international prices of most commodities are denominated in United States dollars while the Group cost base will be in Pounds Sterling and Ugandan Shilling. Consequently, changes in the Pound Sterling and Ugandan Shilling exchange rates will impact on the earnings of the Group. The exchange rates are affected by numerous factors beyond the control of the Group, including international markets, interest rates, inflation and the general economic outlook.  The Directors are confident that they have put in place a strong management team capable of dealing with the above issues as they arise.

Financing

On 27 April 2023 the Group announced that it had found a strategic funding partner for the Orom-Cross Graphite project, and this was completed on 22 September 2023. The Development Finance Corporation (DFC) engaged to fund 50% of Project Definitive Feasibility Study costs by way of a technical assistance grant. US International Development Finance Corporation is America’s leading development finance institution that partners with the private sector to provide finance solutions for project development in markets deemed critical.  As of 10 October 2023, the Group received $1 million of the $5 million technical grant funding from the Development Finance Corporation. The Group is likely to remain cash flow negative for some time and, although the Directors have confidence in the future revenue earning potential of the Group from its interests in the Orom-Cross Graphite Project, there can be no certainty that the Group will achieve or sustain profitability or positive cash flow from its operating activities. With regards to future capital expenditure on the Orom-Cross Graphite Project, the Company will need to raise additional capital during the next 12 months in order to fully fund completion of the Definitive Feasibility Study.

The Group has been approached by potential strategic partners who may eventually provide an offtake, funding or development scenario for the Orom-Cross graphite project. If this is not successful, the Board may consider stopping the project until further cash can be generated.

Future mineral prices, revenues, taxes, capital expenditures and operating expenses and geological success will all be factors which will have an impact on the amount of additional capital required. Additionally, if the Group acquires further exploration assets or is granted additional permits and/or exploration licences, this may increase its financial commitments in respect of the Group’s exploration activities.

In common with many exploration entities, the Group will need to raise further funds in order to progress the Group from pre-construction phase of its business and eventually into production of revenues.

Environmental and safety

The Orom-Cross Graphite Project is still at an early stage of project development and further consideration will need to be given to environmental and social issues affecting the Orom-Cross Graphite Project. Environmental and safety legislation (e.g. in relation to reclamation, disposal of waste products, protection of wildlife and otherwise relating to environmental protection) may change in a manner that may require stricter or additional standards than those now in effect, a heightened degree of responsibility for companies and their directors and employees and more stringent enforcement of existing laws and regulations. There may also be unforeseen environmental liabilities resulting from both future and historic exploration or mining activities, which may be costly to remedy. Risks may include on-site sources of environmental contamination such as oil and fuel from the mining equipment and rehabilitation of the site upon expiry of the Project Licences. Under Ugandan law the Company is required to rehabilitate the area affected by the mining activities, accordingly there will be a potential cost associated with undertaking this obligation. It is currently unknown what this could be but the funding of this could have a material impact on the Group’s financial position in the future.

If the Group is unable to fully remedy an environmental problem, it may be required to stop or suspend operations or enter into interim compliance measures pending completion of the required remedy. The potential exposure may be significant and could have a material adverse effect on the Group.

The Group has not purchased insurance for environmental risks (including potential liability for pollution or other hazards as a result of the disposal of waste products occurring from exploration and production) as it is not generally available at a price which the Group regards as reasonable.

Environmental management systems are in place to mitigate environmental hazard risks. The Group uses advisors with specialist knowledge in mining and related environmental management for reducing the impacts of environmental risk.

Task Force on Climate -related Financial Disclosures (TCFD)

The Task Force on Climate-related Financial Disclosures was convened by the Financial Stability Board to produce a common global framework for companies to report on how climate change will affect their business.

To help investors and wider stakeholders understand how companies are managing climate related financial risks, the TCFD recommends that companies make disclosures across four key areas, often referred to as the four pillars.

The directors support the initiatives of the TCFD, and has prepared disclosures to a level of detail that the directors consider to be consistent with the TCFD recommended disclosures, and as appropriate to the current position of the Group as an exploration entity.

The directors consider that several of the specific disclosures sought under TCFD recommendations will be less meaningful to users at the current stage of the Company’s Orom-Cross Project and will have greater relevance at the conclusion of the DFS (due to be completed by the end of 2024) and following the commissioning of the Orom-Cross Project.

1.         Governance

The Company view climate related risks and opportunities as growing in importance. The Board is ultimately responsible for the oversight and compliance with local environmental laws at its exploration location in Uganda, together with assessment of the impact of climate change on risk to the organisation.

In advance of commissioning the project operations, the Group will establish a Sustainability Committee, comprising the Chairman, the Chief Executive Officer and a non-executive director, that will guide and support the Group’s environmental approach and plans with respect to climate-related matters. The Committee will also consider and set appropriate Group policies that will govern how management assess and manage the risks and opportunities following commissioning.

Management of the group, who are involved with the ongoing DFS are responsible for assessing and managing climate -related risks and opportunities through the current study and will input to plans and assessments related to the ESIA (environmental and social impact assessment) and ESG (environmental, social and governance) components of the study.

2.         Strategy

The Group’s project at Orom-Cross is currently in the stage of completing its Definitive Feasibility Study, the outcome of which in 2024 will include more detail and assessment to define the Group’s strategic approach to climate-related matters.

The current global movement towards clean energy and storage solutions, in which graphite forms an integral part, together with technological advances in the use of graphite are an exciting opportunity for the Group to be a significant part of sustainable energy solutions.

3.         Risk management

Identification and assessment of climate related risks and opportunities in relation to the Group’s activities is performed by management on an ad-hoc basis. Management have not assessed there to be any significant climate-related risks that impact on the current exploration activity in Uganda.

The Group is currently completing the DFS, which will include ESIA and ESG assessments that will assist management to detail the climate related risks and opportunities relating to development of the project. Identification and mitigation of these risks will be addressed by the planned Sustainability Committee described in the Governance section of this statement.

At this time the Group operates no corporate offices either for the management team, or in Uganda, and has no operational graphite production activity. As such management have assessed that no significant greenhouse gas (GHG) emissions are currently produced.

As the project progresses through the DFS, the risk management framework is somewhat fluid and will be analysed, adapted and expanded as the various study components of the DFS develop.  The Group is identifying and developing a ‘leave no trace’ solution to development wherever possible including utilising renewable energy supply and electrification options for operations. These actions will be included in the output of the DFS.

The Group currently employs the foundations of ISO Risk Management standards 31000, and will develop this by engaging in the certification process for this standard. Climate risks will be identified in detail in the ESIA and ESG assessments that form part of the DFS.

Management have not identified any climate-related scenarios that are expected to impact the resilience of the current exploration works performed by the Group. Assessment of different climate scenarios will be included in the works performed for the DFS.

4.         Metrics and targets

The Company will define the metrics and performance targets to assess the climate-related risks and opportunities in line with its strategy and risk management processes once the Orom-Cross operation has been commissioned. Initially some of these will be outlined as part of the ESIA and ESG assessments currently being undertaken for the project DFS.

As the current exploration operations of the Group have a minimal physical presence, Greenhouse Gas emissions are not currently recorded. However as part of the ESIA and ESG study works, the Group is developing the systems and reporting standards to track these in preparation for development of the project.

 

Taxation

 

Following an inspection by the Ugandan Revenue Authority (URA) of the tax affairs of Consolidated African Resources Uganda (“CARU”) covering the period between January 2014 and December 2022, the Group has incurred a capital gains tax charge of £392,425 as set out in Note 8 to the Financial Statements. This charge related to the acquisition by the Company of CARU in 2019. The amount was chargeable to the former owners, however this was not settled by them and under Ugandan legislation the liability is reclaimable from the acquirer if it cannot be obtained from the seller. Following advice from in-country tax advisors the Company is currently in discussions with the Ugandan Revenue Authority (URA) regarding options available to the Company to either pursue the seller for the tax liability or to seek a reduction or payment plan for the liability.

 

Section 172 Statement

 

The Board believes they have acted in a way most likely to promote the success of the Group for the benefit of its members as a whole, as required by section 172.

The requirements of section 172 are or the Board to:

·      consider the likely consequences of any decision in the long term,

·      act fairly between the members of the Group,

·      maintain a reputation for high standards of business conduct,

·      consider the interest of the Group’s employees,

·      foster the Group’s relationship with suppliers, customers and others, and

·    consider the impact of the Group’s operations on the community and the environment.

The Group operates a mineral exploration business, which is inherently speculative in nature and, without regular income, is dependent upon fund-raising for its continued operation.  The pre-revenue nature of the business is important to the understanding of the Group by its members, employees and suppliers, and the Directors are as transparent about the cash position and funding requirements as is allowed under LSE regulations.

The principal decisions taken by the Board during the year relate to the ongoing research and development of the Orom-Cross Graphite Project, which since its acquisition in 2020 is still at an early stage of project development. The Board has looked to build upon the information available and the exploration activities carried out by the Subsidiary prior to its acquisition. Through work such as Metallurgical testwork and preliminary economic assessment the board continues to gather information on the long-term viability of the project and the impact on the local community and the environment. The Board have outlined a work program for the future strategy of the Project. In order to carry out its strategy, the company has entered into a number of contracts with providers who are best placed to undertake the necessary research and review.

The Board is ultimately responsible for the direction, management, performance and long-term sustainable success of the Group. It sets the Group’s strategy and objective considering the interest of all its stakeholders. A good understanding of the Company’s stakeholders enables the Board to factor the potential impact of strategic decisions on each stakeholder group into a boardroom discussion. By considering the Company’s purpose, vision and values together with its strategic priorities the Board aims to make sure that its decisions are fair. The Board has always taken decisions for the long term and consistently aims to uphold the highest standards of business conduct. Board resolutions are always determined with reference to the interests of the Company’s employees, its business relationships with suppliers and customers. Wherever possible, local communities are engaged in the geological operations and support functions required for field operations providing much needed employment and wider economic benefits to the local communities. In addition, the Group contributes annually towards a scholarship programme for the local community in Uganda. The Board takes seriously its ethical responsibilities to the communities and environment in which it works.  We abide by the local and relevant UK laws on anti-corruption and bribery.

The Group follows international best practice on environmental aspects of our work.

 

 

                    

Cameron Pearce

Director
30 January 2024

The Directors submit their report with the audited Financial Statements for the year ended 30 September 2023.

General information

Blencowe Resources Plc (“the Company”), was incorporated as a private Limited Company under the laws of England and Wales with registered number 10966847 on 18 September 2017.  On 13 July 2018, the Company was re-registered as a public company under the Companies Act 2006.

Blencowe’s primary focus is on exploration of the Orom-Cross Graphite Project located in Northern Uganda.

Results for the year and distributions

The Group results are set out in the Consolidated Statements of Comprehensive Income. The total consolidated comprehensive loss attributable to the equity holders of the Group for the financial year was £1,366,685 (2022: £1,089,679).  The Group received no income, and the full amount of the loss is due to expenses incurred in capital raising (to the extent not deducted from share premium), and general corporate overheads.

The Group paid no distribution or dividends during the financial year (2022: £Nil).

Subsidiary change of name

On 7 March 2023 Blencowe Resources Uganda Limited a 100% owned subsidiary of Blencowe Resources Plc changed its name to Consolidated African Resources Limited.

The Board of Directors

The Directors who held office during the financial year and to the reporting date, together with details of their interest in the shares of the Company at the reporting date were:

		Number of Ordinary Shares	Percentage of Ordinary Shares
Sam Quinn		4,916,667	2.35%
Cameron Pearce		7,516,667	3.59%
Alexander Passmore		1,550,000	0.74%

The Board comprises of one Executive Director and two Non-Executive Directors as detailed below:

Cameron Pearce – Executive Chairman

Cameron Pearce was a founder of the Company and has extensive professional experience in both the Australian and United Kingdom finance industries. In recent times he has provided corporate, strategic, financial and advisory assistance to private and public companies in both Australia and the United Kingdom. Mr Pearce is a member of the Australian Institute of Chartered Accountants and has been in commerce over twenty years holding senior financial and management positions in both publicly listed and private enterprises in Australia, Europe, Asia, Africa and Central America. Mr. Pearce has considerable corporate and international expertise and over the past decade has focussed on mining and exploration activities.

Sam Quinn – Non Executive Director                                                   

Sam Quinn is a corporate lawyer with over a decade’s worth of experience in the natural resources sector, in both legal counsel and executive management positions. Mr Quinn was formerly the Director of Corporate Finance and Legal Counsel for the Dragon Group, a London-based natural resources venture capital firm and is currently a partner of Silvertree Partners, a natural resource focussed back office outsourcing business. Mr Quinn has in addition held several management roles for listed and unlisted natural companies and has gained significant experience in the administration, operation, financing and promotion of natural resource companies. Prior to working in the natural resources sector, Mr Quinn worked as a corporate lawyer for Jackson McDonald Barristers & Solicitors in Perth, Western Australia and for Nabarro LLP in London.

Alex Passmore – Non Executive Director

Alex Passmore is an experienced corporate executive with strong financial and technical background. Mr Passmore managed the arrangement of debt for many well-known resources companies and has a wealth of experience in project evaluation. He also managed the WA natural resources business of CBA which comprised a substantial portfolio of loan, hedge, trade finance and working capital products to ASX-listed and multi-national resource companies. Prior to this, Mr Passmore held senior roles at Patersons Securities and was director of corporate finance and head of research. Mr Passmore holds a BSc (Hons) in Geology from the University of Western Australia and a graduate diploma of Applied Finance and Investments from the Institute of Securities Australia.

Directors’ indemnities

To the extent permitted by law and the Articles, the Company has made qualifying third-party indemnity provisions for the benefit of its directors during the year, which remain in force at the date of this report.

 

Policy for new appointments

Without prejudice to the power of the Company to appoint any person to be a Director pursuant to the Articles the Board shall have power at any time to appoint any person who is willing to act as a Director, either to fill a vacancy or as an addition to the existing Board, but the total number of Directors (other than alternate directors) must not be less than two and must not be more than 15 in accordance with the Articles. Any Director so appointed shall hold office only until the annual general meeting of the Company next following such appointment and shall then be eligible for re-election but shall not be taken into account in determining the number of Directors who are to retire by rotation at that meeting. If not re-appointed at such annual general meeting, he shall vacate office at the conclusion thereof.

Rules for amendments of articles

Directors cannot alter the Company’s Articles unless a special resolution is approved by the shareholders. A special resolution requires at least 75% of a company’s members to vote in favour for it to pass.

Substantial shareholders

The share capital of Blencowe consist of only one class: ordinary shares. Therefore, all of the Company’s shares rank pare passu and no preferential rights apply. No single person directly or indirectly, individually or collectively, exercises control over the Company. The Directors are aware of the following persons, who had an interest in 3% or more of the issued ordinary share capital of the Company as at 30 September 2023:

	Shareholder	% of issued share capital of the Company
Pershing Nominees Limited		23.91%
Hargreaves Lansdown (Nominees) Limited		16.46%
	Interactive investors services Nominees Limited	9.57%
	Lawshare Nominees Limited	6.08%
	Vidacos Nominees Limited	5.11%
	James Brearley Crest Nominees Limited	4.02%
	HSDL Nominees Limited	3.40%

The Directors are not aware of any changes in interests between 30 September 2023 and the date of approval of the financial statements.

Financial risk management

The Group’s principal financial instruments comprise cash balances, accounts payable and other receivables arising in the normal course of its operations.

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.

The Group’s activities expose it to a variety of financial risks: market risk, credit risk, liquidity risk and cash flow interest rate risk. See note 18.2 for more information on the financial risk management objectives and policies.

Greenhouse Gas (GHG) Emissions

The energy consumption has not been disclosed as the Group’s consumption is below 40,000 kWh.

Responsibility statement

The Directors are responsible for preparing the Annual Report and the Financial Statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law, the Directors have elected to prepare the financial statements in accordance with UK adopted international accounting standards. Under company law, the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs and profit or loss of the Company and Group for that period.

In preparing these Financial Statements, the Directors are required to:

·    select suitable accounting policies and then apply them consistently;

·    make judgements and accounting estimates that are reasonable and prudent;

·    state whether UK adopted international accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

·    prepare the financial statements on a going concern basis, unless it is inappropriate to presume that the Company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Group to enable them to ensure that the financial statements comply with the requirements of the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for preparing the Annual Report in accordance with applicable law and regulations. The Directors consider the Annual Report and the financial statements, taken as a whole, provide the information necessary to assess the Group’s position, performance, business model and strategy and are fair, balanced and understandable.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Directors’ responsibilities pursuant to DTR4

The Directors confirm to the best of their knowledge:

·    the financial statements have been prepared in accordance with UK adopted international accounting standards and give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group; and

·    the management report includes a fair review of the development and performance of the business and the financial position of the Group, together with a description of the principal risks and uncertainties that they face.

Embed effective risk management, considering both opportunities and threats, throughout the organisation

The Directors are responsible for maintaining the Group’s systems of controls and risk management in order to safeguard its assets.

Risk is monitored and assessed by the Board who meet regularly and are responsible for ensuring that the financial performance of the Group is properly monitored and reported. This process includes reviews of annual and interim accounts, results announcements, internal control systems, procedures and accounting policies.

Subsequent events

Please see note 20 for details of the Group’s subsequent events.

Directors’ confirmation

So far as the directors are aware, there is no relevant audit information of which the Group’s auditors are unaware, and they have taken all steps that they ought to have taken as directors in order to make themselves aware of any relevant audit information and to establish that the Group’s auditors are aware of that information.

Auditors

The auditors, Crowe U.K LLP, have expressed their willingness to continue in office and a resolution to reappoint them will be proposed at the Annual General Meeting.

By Order of the Board

Cameron Pearce

Director
30 January 2024

Corporate Governance

The Group recognises the importance of, and is committed to, high standards of Corporate Governance.  Whilst the Group is not formally required to comply with the UK Corporate Governance Code 2018, the Group will try to observe, where practical, the requirements of the UK Corporate Governance Code 2018, as published by The Financial Reporting Council.

The Company intends to voluntarily observe the requirements of the UK Corporate Governance Code 2018, save as set out below. As at the date of the financial statements the Directors consider the Group to be in compliance with the UK Corporate Governance Code 2018 with the exception of the following:

·       The Company does not comply with the requirements of the UK Corporate Governance Code in relation to the requirement to have a senior independent director and the Audit Committee does not have three independent non-executive directors. The Nomination & Remuneration Committees also do not include independent directors.

·       Due to the current size of the company, and the early stages of the Project’s life cycle, the Company has not developed a formal diversity policy, and investment in and rewarding of the workforce. Furthermore, there have been no board evaluations conducted within the year.

·       All directors are not subject to annual re-election. Instead at least one third of the current directors are put forward for re-election at each annual general meeting, in accordance with the Company’s Articles of Association.

·       Remuneration for the non-executive directors includes share options. The awards are made in accordance with the Company’s remuneration policy.

·       The Board does not consider there to be a need for a formal succession plan at this stage, but this will be monitored as the size and complexity of the Company’s activities develop.

As at the date of the financial statements, the Board has a share dealing code that complies with the requirements of the Market Abuse Regulations. All persons discharging management responsibilities (comprising only the Directors at the date of this Document) shall comply with the share dealing code from the date of Admission.

Set below are Blencowe Resources Plc’s corporate governance practices for the year ended 30 September 2023.

Leadership

The Company is headed by an effective Board which is collectively responsible of the long term success of the Company.

The role of the Board – The Board sets the Company’s strategy, ensuring that the necessary resources are in place to achieve the agreed strategic priorities, and reviews management and financial performance. It is accountable to shareholders for the creation and delivery of strong, sustainable financial performance and long-term shareholder value. To achieve this, the Board directs and monitors the Company’s affairs within a framework of controls which enable risks for the future success of the business to be assessed and managed effectively. The Board also has responsibility for setting the Company’s core values and standards of business conduct and for ensuring that these, together with the Company’s obligations to its stakeholders, are widely understood throughout the Company. The Board has a formal schedule of matters reserved which is provided later in this report.

The Company aims to generate and preserve value over the long-term primarily through the development of its principal asset, the Orom-Cross Graphite project in the Republic of Uganda. The Company has previously completed a preliminary feasibility study on the project and is now in the process of completing a definitive feasibility study which will provide a risked and independent project valuation to international standards. The DFS process is rigorous and will result in an examination of all aspects of the project including economic viability, principal risks as well as engineering and geological matters.

 

Board Meetings – The core activities of the Board are carried out in scheduled meetings of the Board. These meetings are timed to link to key events in the Company’s corporate calendar and regular reviews of the business are conducted. Additional meetings and conference calls are arranged to consider matters which require decisions outside the scheduled meetings. During the year, the Board met on 10 occasions. Any concerns identified that cannot be resolved in these meetings will be documented in written form to the Chairman and recorded in the formal minutes of the Company.  In addition to the

Leadership (continued)

Board meetings linked to corporate transactions, the directors consider on an ad hoc, non-formal basis their effectiveness and relevance, and that of management.

Outside the scheduled meetings of the Board, the Directors maintain frequent contact with each other to discuss any issues of concern they may have relating to the Company or their areas of responsibility, and to keep them fully briefed on the Company’s operations.

Matters reserved specifically for Board – The Board has a formal schedule of matters reserved that can only be decided by the Board. The key matters reserved are the consideration and approval of:

·      the Group’s overall strategy;

·      financial statements and dividend policy;

·      management structure including succession planning, appointments and remuneration;

·      material acquisitions and disposal, material contracts, major capital expenditure projects and budgets;

·      capital structure, debt and equity financing and other matters;

·      risk management and internal controls;

·      the Group’s corporate governance and compliance arrangements; and

·      corporate policies

Summary of the Board’s work in the financial year – During the year, the Board considered all relevant matters within its remit, but focused in particular on exploration and development of the Orom-Cross Graphite Project.

Attendance at meetings:

Member		Meeting attended
Cameron Pearce	Executive Chairman	9
Sam Quinn	Non-Executive Director	10
Alexander Passmore	Non-Executive Director	10

The Board is pleased with the level of attendance and participation of Directors at Board and committee meetings.

The Chairman, Cameron Pearce, sets the Board Agenda and ensures adequate time for discussion.

Non-executive Directors – The non-executive Directors bring a broad range of business and commercial experience to the Company and have a particular responsibility to challenge independently and constructively the performance of the Executive management (where appointed) and to monitor the performance of the management team in the delivery of the agreed objectives and targets.

Non-executive Directors – Are initially appointed for a term of three years, which may, subject to satisfactory performance and re-election by shareholders, be extended by mutual agreement.

Other governance matters – All of the Directors are aware that independent professional advice is available to each Director in order to properly discharge their duties as a Director. In addition, each Director and Board committee has access to the advice of the Company Secretary.

The Company Secretary – The Company Secretary is FIM Secretaries Limited which is retained on a consultancy basis. FIM Secretaries Limited is available to Directors and advises the Board on UK compliance matters.

Effectiveness

For the period under review the Board comprised of an Executive Chairman and two non-executive Directors.

The Directors are of the view that the Board and its committees consist of Directors with an appropriate balance of skills, experience, independence and diverse backgrounds to enable them to discharge their duties and responsibilities effectively.

The Board believes it has the correct balance of skills, reflecting a broad range of commercial and professional skills across geographies and relevant industries that is necessary to ensure the Company is equipped to deliver its investment objective. Additionally, each Director has experience in public markets.

The Directors and their roles and key personnel are displayed on the Company’s website: Management & Directors – Blencowe Resources (blencoweresourcesplc.com)

Independence – None of the Directors are considered to be independent, as they have shareholdings in the Company as noted on page 11.  It is intended that additional Directors will be appointed in future and that independence will be one of the key factors considered at that time. As at the date of this Report no prospective Directors have been identified and no arrangements exist (formal or informal) for the appointment of any other Director.

Appointments – The Board is responsible for reviewing and the structure, size and composition of the Board and making recommendations to the Board with regards to any required changes. The Non-executive directors informally scrutinise and hold to account the performance of management and the Executive Chairman, there are no other Executives on the Board. The Board are satisfied with the current size and composition of the Board and management.

Commitments – All Directors have disclosed any significant commitments to the Board and confirmed that they have sufficient time to discharge their duties.

Induction – All new Directors received an induction as soon as practical on joining the Board.

Conflict of interest – A Director has a duty to avoid a situation in which he or she has, or can have, a direct or indirect interest that conflicts, or possibly may conflict with the interests of the Company. The Board had satisfied itself that there is no compromise to the independence of those Directors who have appointments on the Boards of, or relationships with, companies outside the Company. The Board requires Directors to declare all appointments and other situations which could result in a possible conflict of interest.

Accountability

The Board is committed to provide shareholders with a clear assessment of the Group’s position and prospects. This is achieved through this report and as required other periodic financial and trading statements.

Going concern – As part of their going concern assessment set out in note 2.3, the Board of Directors have reviewed cash flow forecasts reviewed for the 12 months from the date these financial statements were signed and considered the medium term outlook through to December 2025 as described in the Viability Statement. The Directors have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the period to December 2025 provided further funding can be raised as required. Due to the requirement to raise additional funding, a material uncertainty with regard to going concern has been disclosed at note 2.3.

Risk is monitored and assessed by the Board as a whole and are responsible for ensuring that the financial performance of the Company is properly monitored and reported. This process includes reviews of annual and interim accounts, results announcements, internal control systems, procedures and accounting policies. Risk management is carried out by the Board of Directors. The Board identifies and evaluates financial risks, and the key risk factors for the Company are contained in the Financial Statements for the year ended 30 September 2023.

Internal controls – The Board of Directors reviews the effectiveness of the Company’s system of internal controls in line with the requirement of the Code. The internal control system is designed to manage the risk of failure to achieve its business objectives. This covers internal financial and operational controls, compliance and risk management.  Key controls consist of segregation of duties, authorisation and approval policies and accounting controls such as monthly reconciliations. The Directors consider the Company has appropriate and effective internal controls in place for the year under review and up to the date of approval of the Annual Report and Financial Statements. The Directors acknowledge their responsibility for the Company’s system of internal controls and for reviewing its effectiveness. Risk is monitored, assessed and managed by the Board as a whole who are responsible for ensuring that the financial performance of the Company is properly monitored and reported. This process includes reviews of annual and interim accounts, results announcements, internal control systems, procedures and accounting policies. The finance function is outsourced to FIM Capital Limited and details of the duties performed are in a formal agreement. The Board confirms the need for an ongoing process for identification, evaluation and management of significant risks faced by the Company. The Directors carry out a risk assessment before signing up to any commitments.

The Audit Committee

The Audit Committee comprises of Cameron Pearce, chairman of the committee, and Alex Passmore and aims to meet at least twice a year and is responsible for ensuring that the Group’s financial performance is properly monitored, controlled and reported to the Board. During the year of review, the Audit Committee met twice. The Audit Committee is responsible for the scope and effectiveness of the external audit and compliance by the Group with statutory and other regulatory requirements. Given the size of the Group and the relative simplicity of the systems, the Board considers that there is no current requirement for an internal audit function. The procedures that have been established to provide internal financial control are considered appropriate for a Group of its size and include controls over expenditure, regular reconciliations and management accounts.

The Group has no internal audit function at present, as it is not considered necessary given the current size and operations of the entity. This will be kept under review as the nature of operations becomes more complex with the planned development of the project.

The Audit Committee monitors in discussion with the auditors:

·      the integrity of the financial statements of the Group and significant financial reporting judgments contained in them, such as the assessment of impairment to the Group’s intangible assets.

·      any formal announcements relating to the Group’s financial performance

·      the Group’s internal financial controls and risk management systems

·      the external auditor’s independence and objectivity and the effectiveness of the audit process, taking into consideration relevant UK professional and regulatory requirements.

The Directors are responsible for taking such steps as are reasonably available to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

External auditor’s independence

Since the last tender which was conducted in 2018, Crowe U.K LLP has acted as independent auditor for six years. Crowe U.K LLP has completed mandatory partner rotation this year in accordance with their firm’s policy. The Audit Committee have held discussions with the external auditors to confirm there are no non-audit services provided, and no other independence considerations they should be aware of.

Remuneration and Nominations Committee

A Remuneration and Nominations Committee was established during 2020 and is made up of the two non-executive directors. The Committee comprises Sam Quinn, chairman of the committee, and Alex Passmore. They are not considered to be independent directors. The Board considers the committee composition of two directors to be sufficient due to the size of the company at this time. The Remuneration and Nomination Committee meets at least annually and is responsible for setting the remuneration policy for all executive directors and the Company’s chairman, including any compensation payments; recommends and monitors the level and structure of remuneration for senior management; evaluates the board of directors and examines the skills and characteristics required of board candidates. During the year of review, the Remuneration and Nomination Committee met once.

Remuneration paid to Directors in the period under review is disclosed in the Directors’ Remuneration Report.

The Committee is dedicated to implementing a remuneration policy that promotes long-term incentives and aligns the interests of directors with those of shareholders. Share and option awards should be phased, contain performance milestones where appropriate and encourage long term participation.

The Committee considers  in defining the remuneration policy that arrangements should be clear and transparent, should avoid undue complexity, and should be proportional to the services provided in delivering the Company’s strategy and purpose.

The Remuneration Committee to date has focused on share options and bonus payments as the main incentives for executives, given the stage of development of the Company and to further align senior management with shareholder interests. Typically share options are subject to vesting conditions, such as completion of feasibility studies or the introduction of strategic partners. In addition share price hurdles have been used to provide further shareholder alignment. Given the nature of the Company as the developer of a mining project and the potential for rerating of the Company’s value as the project advances, having a direct equity exposure is deemed to be the most desirable form of management incentive. In addition, cash bonus payments are generally kept to a minimum to preserve the Company’s capital. Share options will typically expire three months following the cessation of employment.

In accordance with the Company’s Articles of Association, at every annual general meeting at least one third of the current directors who are subject to retirement by rotation will be put forward to retire.

Shareholder relations

Communication and dialogue – Open and transparent communication with shareholders is given high priority and there is regular dialogue with institutional investors, as well as general presentations made at the time of the release of the annual and interim financial results. All Directors are kept aware of changes in major shareholdings in the Company and are available to meet with shareholders who have specific interests or concerns. The Company issues its results promptly to the market via RNS and also publishes them on the Company’s website: www.blencoweresourcesplc.com. Regular market news updates are made in relation to the Company including the status of its exploration and development programme which is also included on the Company’s website. Shareholders and other interested parties can subscribe to receive news updates by email by registering online on the website free of charge.

The Directors are available to meet with institutional shareholders to discuss any issues and gain an understanding of the Company’s business, its strategies and governance. Meetings are also held with the corporate governance representatives of institutional investors when requested.

Annual General Meeting – At every AGM individual shareholders are given the opportunity to put questions to the Chairman and to other members of the Board that may be present. Notice of the AGM is sent to shareholders at least 21 working days before the meeting. Details of proxy votes for and against each resolution, together with the votes withheld are announced to the London Stock Exchange and are published on the Company’s website as soon as practical after the meeting.

Viability statement

 

In accordance with provision 31 of the UK Corporate Governance Code (2018), the Board has assessed the prospects of the Group over a two-year period, taking account of the Group’s current position and principal risks. For information regarding Group’s going concern position and funding requirements over the next twelve months, please see note 2.3.

 

Time frame

The Board believes that two years is currently the most appropriate time frame over which the Board should assess the long-term viability of the Group. The Group’s current activities do not generate any revenues or positive operating cash flow, and the completion of the Definitive Feasibility Study for the Orom-Cross Graphite Project will require further capital expenditures.

 

Assessing viability

The main assumption in the Board making its viability assessment is the ability of the Group to raise further funds in order to progress from the exploration phase into feasibility and eventually into production of revenues. The Group may not be able to obtain additional financing as and when needed which could result in a delay or indefinite postponement of exploration and development activities.

 

Principal risk

The Directors have carried out a robust assessment of the principal risks facing the Group as described on the preceding pages including those that threaten its business model, future performance, solvency or liquidity. The Directors are confident that they have put in place a strong management team with wide-ranging expertise in mineral exploration and development who are capable of dealing with the risk management in order to safeguard the Group’s assets. The directors are aware that the risks that could have the most adverse effect are funding and capital markets, potential other risks include the political risk in the country of business.

 

Based on the financial impact of the analysis outlined above and the associated risks, management actions and controls that are either in place or could be implemented, the Board has been able to conclude that the Company will be able to deliver the Orom-Cross Graphite Project.

 

Confirmation of viability

Taking account of these matters, the Directors have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the period to December 2025, assuming that the financing referred to above is completed as described. The Company’s going concern statement is detailed in note 2.3.

 

 

By Order of the Board

Cameron Pearce

Director
30 January 2024

Statement of Blencowe Plc’s policy on Directors’ Remuneration                  

The Directors’ Remuneration Report sets out the Company’s policy on the remuneration of Directors together with the details of Directors’ remuneration packages and services contracts for the year ended 30 September 2023.

As set out in the Company’s Prospectus dated 30 March 2020, each of the Directors may be paid a fee at such rate as may from time to time be determined by the Board. All the Directors are entitled to be reimbursed by the Company for travel, hotel and other expenses incurred by them in the course of their directors’ duties relating to the Company.

Any fees payable to the Directors after an Acquisition will be determined as part of the negotiations for the Acquisition, and will be dependent on whether the Directors remain on the board of the Company in any event.

There have been no changes to the Directors’ remuneration or remuneration policy since the publication of the Company’s Prospectus dated 30 March 2020 with the exception of those mentioned below. The terms and conditions of appointment for all the members of the Board are available for inspection at our registered office.

Terms of employment

Cameron Pearce was appointed on 8 June 2018 by the Company to act as a Non-Executive Director and Chairman of the Company. Following the Company’s readmission to the London Stock Exchange (“LSE”) on 28 April 2020, Mr Pearce was reappointed with fees of £96,000 per annum. If there is a change of control (as defined in the letter of appointment), Mr Pearce will be entitled to 100% of his annual fee as a lump sum payment if the Company terminates his employment, or if Mr Pearce chooses to terminate his appointment within 12 months following a change of control.

Sam Quinn was appointed on 8 June 2018 by the Company to act as a Non-Executive Director, Following the readmission of the Company to the LSE on 28 April 2020, Mr Quinn was engaged as a Non-Executive director with fees of £24,000 per annum.  If there is a change of control (as defined in the letter of appointment), Mr Quinn will be entitled to 100% of his annual fee as a lump sum payment if the Company terminates his employment, or if Mr Quinn chooses to terminate his appointment within 12 months following a change of control.

Alex Passmore was appointed on 8 June 2018 by the Company to act as a Non-Executive Director with fees of £12,000 per annum. On 15 March 2021, the Board agreed to increase Mr Passmore’s fees from 1 March 2021 to £18,000 per annum. If there is a change of control (as defined in the letter of appointment), Mr Passmore will be entitled to 100% of his annual fee as a lump sum payment if the Company terminates his employment, or if Mr Passmore chooses to terminate his appointment within 12 months following a change of control.

Remuneration Policy

Base salary levels will take into account market data for the relevant role, internal relativities, the individual’s experience and their current base salary. Where an individual is recruited below market norms, they may be re-aligned over time (e.g. two to three years), subject to performance in the role. Benefits will generally be in accordance with the approved policy. Currently, there are no benefits in place.

The Remuneration and Nomination Committee comprises Sam Quinn, who acts as chairman of the committee and Alex Passmore, and meets at least annually.  The Remuneration Committee reviews the scale and structure of the Directors’ fees, considering the interests of the shareholders and the performance of the Company and Directors. Bonuses, pay rises and the grant of long term incentives such as share options are linked to the achievement of key funding and project milestones that are set from time to time by the Committee.

The items included in this report are unaudited unless otherwise stated.

The Company maintains contact with its shareholders about remuneration in the same way as other matters and, as required by Section 439 of the Companies Act 2006, this remuneration report will be put to an advisory vote of the Company’s shareholders at the forthcoming Annual General Meeting

Directors’ emoluments and compensation (audited)

Set out below are the emoluments of the Directors:

	Cameron Pearce	Sam Quinn	Alexander Passmore	Total
30 September 2022
Base fee	96,000	24,000	18,000	138,000
Bonuses	16,000	4,000	3,000	23,000
Share Based Payments	21,068	14,045	7,023	42,136
Total 30 September 2022	133,068	42,045	28,023	203,136
30 September 2023
Base fee	96,000	24,000	18,000	138,000
Share based payments	5,239	5,239	2,619	13,097
Total 30 September 2023	101,239	29,239	20,619	151,097

The percentage of directors’ emoluments of the total administrative costs for the year is 12% (2022: 30%). The directors’ base fees increased did not increase (2022: Nil) while the base salary costs of the key management employees did not increase (2022: 28%).

Statement of Directors’ shareholding and share interest (audited)

The Directors who served during the year ended 30 September 2023, and their interests at that date, are disclosed on page 11.

Issue of options

As at the reporting date, the number of shares options that the Company has issued to the Board and Senior Management are as follow;

Cameron Pearce (Chairman)	5,000,000
Mike Ralston (CEO)	5,500,000
Lionshead Consultants Ltd (Sam Quinn) (Non Exec Director)	3,750,000
Alexander Passmore (Non Exec Director)	1,750,000
Iain Wearing (COO)	5,000,000

For further information, please see notes 17 and 20.

Other matters

The Company does not currently have any annual or long-term incentive schemes (other than the one stated above) in place for any of the Directors and as such there are no disclosures in this respect.

The Company does not have any pension plans for any of the Directors and does not pay pension amounts in relation to their remuneration.

The Company has not paid out any excess retirement benefits to any Directors or past Directors. The Company has not paid any compensation to past Directors.

 

By Order of the Board

Sam Quinn

Director
30 January 2024