Home » Posts tagged 'license'

Tag Archives: license

#SVML Sovereign Metals LTD – Issue of Performance Rights

Sovereign Metals Limited (Sovereign or Company) (ASX:SVM, AIM:SVML, OTCQX:SVMLF) advises that it has today issued 2,000,000 unlisted performance rights to Directors following shareholder approval on 12 September 2024 as follows:

·    600,000 unlisted performance rights subject to the “Definitive Feasibility Study Milestone” expiring on or before 31 October 2025;

·      600,000 performance rights subject to the “Grant of Mining Licence Milestone” expiring on or before 31 March 2026; and

·      800,000 performance rights subject to the “Final Investment Decision Milestone” expiring on or before 30 June 2026.

The Company has also issued 2,725,000 unlisted performance rights to key staff (not PDMRs) as part of their incentive remuneration as follows:

·    917,500 unlisted performance rights subject to the “Definitive Feasibility Study Milestone” expiring on or before 31 October 2025;

·      917,500 performance rights subject to the “Grant of Mining Licence Milestone” expiring on or before 31 March 2026; and

·      890,000 performance rights subject to the “Final Investment Decision Milestone” expiring on or before 30 June 2026.

Further, the following unlisted performance rights lapsed following cessation of employment (non-PDMR):

·      125,000 performance rights subject to the “Grant of Mining Licence Milestone” expiring on or before 31 March 2026; and

·      300,000 performance rights subject to the “Final Investment Decision Milestone” expiring on or before 30 June 2026.

Following the issue and cancellation of these unlisted performance rights, the Company has the following securities on issue:

·      599,879,879 fully paid ordinary shares (of no par value);

·    10,977,500 unlisted performance rights subject to the “Definitive Feasibility Study Milestone” expiring on or before 31 October 2025;

·    4,992,500 unlisted performance rights subject to the “Grant of Mining Licence Milestone” expiring on or before 31 March 2026; and

·    6,190,000 unlisted performance rights subject to the “Final Investment Decision Milestone” expiring on or before 30 June 2026.

Change of Directors’ Interest Notices are provided below.

ENQUIRIES

Dylan Browne

Company Secretary
+61(8) 9322 6322

info@sovereignmetals.com

 

Nominated Adviser on AIM and Joint Broker

 

SP Angel Corporate Finance LLP

+44 20 3470 0470

Ewan Leggat

Charlie Bouverat

 

 

Joint Brokers

 

Stifel

+44 20 7710 7600

Varun Talwar

 

Ashton Clanfield

 

 

 

Berenberg

+44 20 3207 7800

Matthew Armitt

 

Jennifer Lee

 

 

 

Buchanan

+ 44 20 7466 5000

 

Appendix 3Y

 

Change of Director’s Interest Notice

 

Information or documents not available now must be given to ASX as soon as available.  Information and documents given to ASX become ASX’s property and may be made public.

Introduced 30/09/01  Amended 01/01/11

 

Name of entity                  SOVEREIGN METALS LIMITED

ABN                                    71 120 833 427

A)              

We (the entity) give ASX the following information under listing rule 3.19A.2 and as agent for the director for the purposes of section 205G of the Corporations Act. 

 

Name of Director

Benjamin Stoikovich

Date of last notice

24 November 2023

 

Part 1 – Change of director’s relevant interests in securities

In the case of a trust, this includes interests in the trust made available by the responsible entity of the trust

 

Note: In the case of a company, interests which come within paragraph (i) of the definition of “notifiable interest of a director” should be disclosed in this part.

 

Direct or indirect interest

Direct and Indirect

 

Nature of indirect interest

(including registered holder)

Note: Provide details of the circumstances giving rise to the relevant interest.

 

Selwyn Capital Limited (beneficial interest)

 

Date of change

27 September 2024

No. of securities held prior to change

(a)   4,190,000

(b)   600,000

(c)   350,000

(d)   500,000

Class

(a)   Ordinary Fully Paid Shares

(b)   Unlisted Performance Rights subject to the “Definitive Feasibility Study Milestone” expiring 31 October 2025

(c)   Unlisted Performance Rights subject to the “Grant of Mining Licence Milestone” expiring 31 March 2026

(d)   Unlisted Performance Rights subject to the “Final Investment Decision Milestone” expiring 30 June 2026

Number acquired

(b)   300,000

(c)   300,000

(d)   400,000

Number disposed

Not applicable

Value/Consideration

Note: If consideration is non-cash, provide details and estimated valuation

 

Not applicable – see nature of change below

No. of securities held after change

(a)   4,190,000

(b)   900,000

(c)   650,000

(d)   900,000

Nature of change

Example: on-market trade, off-market trade, exercise of options, issue of securities under dividend reinvestment plan, participation in buy-back

Issue of Performance Rights following shareholder approval

 

Part 2 – Change of director’s interests in contracts

 

Note: In the case of a company, interests which come within paragraph (ii) of the definition of “notifiable interest of a director” should be disclosed in this part.

 

Detail of contract

Not applicable

Nature of interest

 

Not applicable

Name of registered holder

(if issued securities)

 

Not applicable

Date of change

Not applicable

No. and class of securities to which interest related prior to change

Note: Details are only required for a contract in relation to which the interest has changed

 

Not applicable

Interest acquired

Not applicable

Interest disposed

Not applicable

Value/Consideration

Note: If consideration is non-cash, provide details and an estimated valuation

 

Not applicable

Interest after change

Not applicable

 

Part 3 – +Closed period

 

Were the interests in the securities or contracts detailed above traded during a +closed period where prior written clearance was required?

No

If so, was prior written clearance provided to allow the trade to proceed during this period?

Not applicable

If prior written clearance was provided, on what date was this provided?

Not applicable

 

Initial notification/Amendment

Initial

LEI

213800NSPXSASTENFQ34

Place of transaction

Australian Securities Exchange (ASX)

 

Appendix 3Y

 

Change of Director’s Interest Notice

 

Information or documents not available now must be given to ASX as soon as available.  Information and documents given to ASX become ASX’s property and may be made public.

Introduced 30/09/01  Amended 01/01/11

 

Name of entity                  SOVEREIGN METALS LIMITED

ABN                                    71 120 833 427

B)              

We (the entity) give ASX the following information under listing rule 3.19A.2 and as agent for the director for the purposes of section 205G of the Corporations Act. 

 

Name of Director

Francis (Frank) Eagar

Date of last notice

20 October 2023

 

Part 1 – Change of director’s relevant interests in securities

In the case of a trust, this includes interests in the trust made available by the responsible entity of the trust

 

Note: In the case of a company, interests which come within paragraph (i) of the definition of “notifiable interest of a director” should be disclosed in this part.

 

Direct or indirect interest

Direct

Nature of indirect interest

(including registered holder)

Note: Provide details of the circumstances giving rise to the relevant interest.

 

Date of change

27 September 2024

No. of securities held prior to change

(a)   500,000

(b)   1,000,000

(c)   500,000

(d)   700,000

Class

(a)   Ordinary Fully Paid Shares

(b)   Unlisted Performance Rights subject to the “Definitive Feasibility Study Milestone” expiring 31 October 2025

(c)   Unlisted Performance Rights subject to the “Grant of Mining Licence Milestone” expiring 31 March 2026

(d)   Unlisted Performance Rights subject to the “Final Investment Decision Milestone” expiring 30 June 2026

Number acquired

(b)   300,000

(c)   300,000

(d)   400,000

Number disposed

Not applicable

Value/Consideration

Note: If consideration is non-cash, provide details and estimated valuation

 

Not applicable – see nature of change below

No. of securities held after change

(a)   500,000

(b)   1,300,000

(c)   800,000

(d)   1,100,000

Nature of change

Example: on-market trade, off-market trade, exercise of options, issue of securities under dividend reinvestment plan, participation in buy-back

Issue of Performance Rights following shareholder approval

 

Part 2 – Change of director’s interests in contracts

 

Note: In the case of a company, interests which come within paragraph (ii) of the definition of “notifiable interest of a director” should be disclosed in this part.

 

Detail of contract

Not applicable

Nature of interest

 

Not applicable

Name of registered holder

(if issued securities)

 

Not applicable

Date of change

Not applicable

No. and class of securities to which interest related prior to change

Note: Details are only required for a contract in relation to which the interest has changed

 

Not applicable

Interest acquired

Not applicable

Interest disposed

Not applicable

Value/Consideration

Note: If consideration is non-cash, provide details and an estimated valuation

 

Not applicable

Interest after change

Not applicable

 

Part 3 – +Closed period

 

Were the interests in the securities or contracts detailed above traded during a +closed period where prior written clearance was required?

No

If so, was prior written clearance provided to allow the trade to proceed during this period?

Not applicable

If prior written clearance was provided, on what date was this provided?

Not applicable

 

Initial notification/Amendment

Initial

LEI

213800NSPXSASTENFQ34

Place of transaction

Australian Securities Exchange (ASX)

 

#GRX GreenX Metals LTD – Acquiring Large Scale Copper Project in Germany

GREENX TO ACQUIRE LARGE SCALE SEDIMENT-HOSTED COPPER PROJECT IN CENTRAL GERMANY

GreenX Metals Limited (“GreenX” or “Company”) is pleased to advise that it has entered into an Earn-in Agreement through which GreenX can earn a 90% interest in Group 11 Exploration GmbH, a private German company which holds the Tannenberg exploration licence (“Project”) and is highly prospective for sediment-hosted (Kupferschiefer type) copper deposits.

The Project

·      The Tannenberg exploration licence covers 272 km2 in the State of Hesse in central Germany, encompassing the historical “Richelsdorf” copper – silver mines.

·      Prior to closure in the 1950’s, the Richelsdorf mines produced 416,500 t of copper and 33.7 Moz of silver from Kupferschiefer type deposits. These historic mines consisted of shallow underground workings originally accessed from surface outcrops.

·      The Project also contains multiple drill intercepts over the high priority 14 km-long Richelsdorf Dome target, including:

2.1 m at 2.7% Cu and 48g/t Ag from 365.48 m; 1.5 m at 3.7% Cu and 33 g/t Ag from 209.50 m; 2.5 m at 1.8% Cu and 19 g/t Ag from 339.5 m in the southwest of the license area.

2.0 m at 1.6% Cu and 19 g/t Ag from 268 m in the north-east of the license area.

Figure 1: The Project is located in the industrial centre of Europe.

·      Kupferschiefer style deposits are a well-known and prolific subtype of sediment-hosted copper deposit that:

are the second most prevalent source of copper production and reserves in the world; and

have been historically mined in Germany and are still mined in Poland where KGHM produced 592 kt of electrolytic copper in 2023.

·      Excellent potential for new discoveries of shallow (50 m to 500 m), large scale and high grade Kupferschiefer style copper and silver mineralisation, with much of licence area remaining untested by modern exploration whereby thicker sections of footwall/ hanging wall mineralisation will be targeted.

·      Modern understanding of Kupferschiefer mineralisation from prolific mining in Poland places new emphasis on hanging wall and footwall mineralisation, structural controls and metal zonation.

In Polish Kupferschiefer mines, mineralisation typically forms within the Kupferschiefer shale and in strata up to 60 m below and 30 m above the shale. E.g., KGHM’s Rudna Mine in Poland, where footwall sandstone hosts 80% of the total copper resource, hanging wall limestone hosts 15%, and Kupferschiefer shale hosts only 5%.

GERMANY & EU MINING INDUSTRY

·      Germany has been a significant mining jurisdiction in the past and continues its mining tradition, including:

The K+S potash mines which operate 4 km away from the license area and are located in the State of Hesse.

Anglo American are actively exploring the Löwenstern and Leine-Kupfer copper projects nearby. Löwenstern is 25 km away to the south in the German state of Thüringia, where drilling targeting the Kupferschiefer commenced in 2023. Leine-Kupfer was granted in January 2024 and is 60 km away to the north in the state of Lower Saxony.

AMG Graphite operates a graphite mining and processing complex at Kropfmühl near Passau, Bavaria

Vulcan Energy is successfully permitting lithium brine and geothermal power projects in the German states of Rheinland-Pfalz, Baden-Württemberg, and Hesse.

·      Copper is a designated a Strategic Raw Material (“SRM”) under the EU’s Critical Raw Material Act, that entered into force on 23 May 2024. The CRMA signals the EU’s political commitment to strengthen EU supply of SRM’s (including copper) by giving the European Commission the power to designate Strategic Projects that will benefit from easier access to financing, expedited permitting processes and matchmaking with off-takers.

·      The manufacturing sector, including the automotive, mechanical engineering, chemical and electrical industries, accounts for over 25% of Germany’s economic output, and 18% of GDP; these figures are significantly higher than in most other advanced economies

The manufacturing sector provides 16% of national employment, some 8 million jobs, with mechanical engineering being the largest segment and dominated by SMEs.

The automotive sector is a key industry and with around four million automobiles produced in 2023. Electric Vehicles are being adopted in Germany with numerous OEM’s investing in new production facilities and supply chains, such as Volkswagen’s Battery and Electric Drive production facilities and Tesla’s Berlin Gigafactory.

Many of these industries are reliant on critical raw materials such as copper.

·      German government recently announced creation of a EUR 1.1 billion (A$1.8 billion) investment fund to fortify Germany’s access to SRM’s (including copper) essential for high-tech and green projects. The fund will be managed by the state-owned KfW Development Bank.

GreenX Metals’ Chief Executive Officer, Mr Ben Stoikovich, commented:

“We are very excited to be adding the Tannenberg project to our exploration portfolio. Kupferschiefer style deposits are widely acknowledged as the most prolific source of modern-day copper production, with copper mining from the Polish Kupferschiefer deposits (KGHM) presently being Europe’s largest domestic source of strategic copper supply. We believe that Tanneberg has the potential to host large scale and high-grade copper deposits located in the heartland of German industry in the vicinity of major OEM’s such as Volkswagen’s Battery and Electric Drive production facilities and Tesla’s Berlin Gigafactory.

Copper is officially recognised by the EU as a strategic raw material for European industry and ongoing decarbonisation in Europe. This acquisition comes at a time when the German government and the EU have recently announced major policy initiatives to enhance security of supply of strategic raw materials such as copper by facilitating expedited permitting processes and access to project development funding. Germany, and in particular the State of Hesse, has a well-established mining industry with practical and efficient mine permitting processes. Furthermore, we anticipate increased political support for new copper projects in accordance with Germany’s Federal Ministry of Economic Affairs and Climate Action critical raw materials policies and the EU’s newly introduced Critical Raw Material Act.

Tannenberg is complementary to our Arctic Rift Copper project in Greenland and provides GreenX shareholders with enhanced exposure to strategic raw materials that are now a policy priority in both Germany and the wider EU. We are looking forward to updating shareholders over the coming months as we commence our exploration activities in Germany.”

Classification:   2.2 Inside Information

2.5 Total number of voting rights and capital

ENQUIRIES

Ben Stoikovich
Chief Executive Officer

+44 207 478 3900

 

Sapan Ghai
Business Development

+44 207 478 3900

 

SUMMARY OF TERMS

GreenX has entered into an Earn-in Agreement (“Agreement”) through which GreenX can earn a 90% interest in Group 11 Exploration GmbH (“Group 11”). Key terms of the Agreement are as follows:

·      GreenX to issue the vendor 500,000 fully paid ordinary shares (“Shares”) upfront.

·      GreenX will fund a Work Program up to EUR 500,000 by 31 December 2025 (“Minimum Commitment”). The Work Program will be sufficient to satisfy requirements for the grant of an extension of the exploration license.

·      Once the Minimum Commitment has been discharged, GreenX can elect to acquire 90% of the fully diluted share capital of Group 11 on or before 31 December 2025 in return for:

GreenX paying A$3,000,000 to the vendor in Shares (based on the higher of the 10-day VWAP or A$0.30 per Share).

The vendors’ 10% interest in Group 11 will then be free carried until completion of a feasibility study by Group 11 or GreenX.

The Agreement also includes usual drag along and tag along rights, and an Area of Influence provision.

Once GreenX has earned its 90% interest, the vendor may elect to exchange their remaining 10% interest in return for a 0.5% Net Smelter Royalty.

·      If a Scoping Study is published by GreenX on the ASX regarding the license area or any area within the Area of Influence within 5 years of execution of the Agreement, GreenX will issue the vendor 5 million Shares on the completion of the first such Scoping Study.

·      GreenX will act as the project manager.

Project Geology

Historical drilling and mine workings confirm the widespread presence of the crucial Kupferschiefer sequence within the Tannenberg licence (Figure 2). The sedimentary sequence forms a broad dome that outcrops near the centre of the licence area and extends down to approximately 500 m at the periphery (Figure 3). Regional and small-scale faults cut the licence area with the dominant orientation trending northwest-southeast, perpendicular to the Variscan Orogen. Zones of copper enrichment within the licence area correspond to fault intersections. Structure is a key targeting consideration at the Project.

Figure 2: The Kupferschiefer is gently folded to form the Richelsdorf Dome that extends from surface down to 500 m depth within the licence area. Historical mining around Richelsdorf exploited mineralisation near the surface. Historical drilling intercepted mineralised Kupferschiefer down to 436 m. Much of the Kupferschiefer between 50 to 500 m remains untested.

 

Figure 3: Interpreted cross-section through Tannenberg exploration licence with simplified stratigraphy. The historical Richelsdorf District is located at the apex of a large-scale anticline, the Richelsdorf Dome. The approximate extent of historical mining is shown. The cross-section passes between drill holes Ro23 and Ro45.

 

In the south of the licence area near the town of Ronshausen, drill holes intersected mineralised Kupferschiefer sequence at depths ranging from 211 to 368 m below the surface (e.g., Ro18 and Ro23). Near the town of Nentershausen in the north, an isolated drill hole intersected 2 m at 1.6% Cu (Ro45).

Table 1: Selected Drill Holes.

Locality

Hole ID

Intersect (m)

Cu (%)

From

To

Interval

Ronshausen

Ro23

365.48

367.58

2.10

2.7

Ro18

209.50

211.00

1.50

3.7

Ro19

339.50

342.00

2.50

1.7

Ro15

285.86

289.31

3.45

1.0

Nentershausen

Ro45

268.00

269.63

2.00

1.6

 

Historical exploration and sampling might have been too focussed on the Kupferschiefer shale horizon. For example, in Ro45, the isolated drill hit near Nentershausen, the last sample from the footwall assayed at 1% Cu (Figure 4). In bothRo45 and Ro23 shown in Figure 4, the historical sampling only covers one mineralised interval. Drilling at the Rudna Mining in Poland shows that copper mineralisation can occur in multiple intervals, above and below the Kupferschiefer shale. 

Figure 4: Selected historical drill results from the Richelsdorf Dome target with comparison to drilling at the Rudna Mine, Poland. Sample coverage did not typically extend much above or below the shale unit. 

 

Kupferschiefer copper deposits feature a distinct metal zonation pattern. The zonation transitions from iron, to copper, lead then zinc (Figure 5). Adjacent to every known copper deposit is the iron rich zone known as “Rote Fäule”, or “red rot” in English. Within the Tannenberg licence, a distinct zone of red rot has been identified in the south near Ronshausen. As well as the copper, historical drill core was also assayed for lead and zinc. This data will allow the Company to identify important metal zonations in the Project area.   

A diagram of a red and blue color scheme Description automatically generated

Figure 5: Metal zonation pattern associated with Kupferschiefer type copper deposits. The zonation cuts across stratigraphy and progresses from iron to copper, lead, then zinc. Note: hem = hematite, cc = chalcocite, bo = bornite, cpy = chalcopyrite, ga = galena, sph = sphalerite, py = pyrite. Modified from Borg, 2017.

 

GreenX’s exploration hypothesis for the Project is that historical exploration was mainly based on an outdated deposit model that focussed on the 30-60 cm-thick Kupferschiefer shale horizon. Modern understanding of the Kupferschiefer deposit model now shows that up to 95% of mineable copper can be hosted in the footwall sandstone and hanging wall limestone.

Project History

Pre-industrial mining in central Germany dates back to the 12th Century. Copper was exploited from the Kupferschiefer in the Mansfield, Sangerhausen, and Richelsdorf mining districts. Most of the historical copper mining in central Germany was prior to the Industrial Revolution and well-before mechanised mining technology was widely available. Once surface accessible deposits were depleted, adits and shallow shafts were used to access deeper underground Kupferschiefer copper ores (Figure 6).

In the Richelsdorf district, historical production is estimated at 416,500 t of copper and 1,050 t (33.7 Moz) of silver. Production commenced in the 13th Century and ceased in 1955.

The Project area remains ostensibly undeveloped, comprised predominantly of small-holding farmland and woodland, since it was located in the Cold-War border zone between West and East Germany. During the Cold War (1947-1991), the Richelsdorf district sat within the strategically-important Fulda Gap. The Fulda Gap hosts two lowland corridors through which NATO military planners believed the Soviet Union could launch a land attack. The US military observation post “Romeo” was active at the Hesse-Thuringia border in the vicinity of the Project area during the Cold War and was only disbanded in 1991.

Between 1980 and 1987, St Joes Exploration GmbH (“St Joes Exploration”) were active in the region. St Joes Exploration’s drilling campaigns identified Kupferschiefer mineralisation near the towns of Ronshausen and Nentershausen (Appendix 1, Table 2).  

The major mining activity in Hesse is potash mining operated by K+S Group, an international fertiliser company with production sites in Europe and North America. The major potash mining complex “Werra” has been operating for over 100 years and produces some 19 Mtpa of crude salt from underground workings between 700 – 1000m depth. K+S Group’s Werra plant is recognised as an important pillar for the economic and demographic development of the region.

In 2021, Anglo American’s ‘Kupfer Copper Germany GmbH’ (“Anglo”) began exploration activities in Thuringia, 25 km from the Tannenberg licence. There, historical drilling intercepted 0.5 m at 1.4% Cu from 761.9 m. Anglo initiated seismic, gravity, and magnetic surveys in 2021 and exploratory drilling in 2023.

 

Figure 6: Left: Underground extraction of the Kupferschiefer shale at the Wolfsberg mine in 1954. Miners laid on their sides to excavate the ore-bearing material. Right: Schematic of pre-industrial underground mining in Germany.

Modified from Zientek et al., 2015.

 

EU CrITICAl RAW MATERIAL ACT

On 23 May 2024, the EU’s Critical Raw Materials Act (“CRMA”), published as Regulation (EU) 2024/1252, entered into force following its adoption by the Council of the EU and European Parliament. The main objective of the CRMA is to maintain and establish a secure and sustainable supply of Critical Raw Materials to the EU. The CRMA lists Strategic Raw Materials (SRM’s), which are those most crucial for strategic technologies used for the green, digital, defence and aerospace applications. Copper is a designated a Strategic Raw Material (SRM’s) under the act

The CRMA sets benchmarks for domestic capacities along the strategic raw material supply chain and for diversifying EU supply by 2030:

·      EU extraction capacity of at least 10% of the EU’s annual consumption of strategic raw materials;

·      EU processing capacity of at least 40% of the EU’s annual consumption of strategic raw materials;

·      EU recycling capacity of at least 25% of the EU’s annual consumption of strategic raw materials; and

·      Not more than 65% of the Union’s annual consumption of each strategic raw material relies on a single third country for any relevant stage of the value chain.

The CRMA further demonstrates the EU’s political commitment to strengthening supply of SRM’s (including copper) by giving the European Commission the power to designate Strategic Projects that will benefit from easier access to financing, expedited permitting processes and matchmaking with off-takers.

In terms of permitting processes, under the CRMA EU Member States will be required to give priority to Strategic Projects in their administrative processes. The Act sets clear timelines for decisions to be taken on permitting applications linked to Strategic Projects. i.e., for Strategic Projects, the total duration of the permit granting process should not exceed 27 months for extraction projects or 15 months for processing and recycling projects.

To help companies through permitting, Member States are also required to designate single points of contact for critical raw materials projects. The single point of contact will provide guidance to project promoters on administrative issues and will serve as the sole contact point throughout the permit granting process.

Exploration Targeting Model

The Project is prospective for Kupferschiefer style copper-silver mineralisation. Kupferschiefer is a subtype of the sediment-hosted copper deposit model. Mineralisation typically forms around the Kupferschiefer shale, but is known to occur up to 60 m below and 30 m above the shale in Poland (Figure 7). In KGHM’s Rudna Mine in Poland, footwall sandstone hosts 80% of the total resource, hanging wall limestone hosts 15%, and Kupferschiefer shale hosts only 5%. Modern insights from mining the Kupferschiefer in Poland will be applied to our exploration strategy in Germany.

A diagram of copper mines Description automatically generated

Figure 7: Comparison of current-day Kupferschiefer mining in Poland with historical mining in Germany.

Note: Modified from Zientek et al., 2015.

 

Historical mining and exploration in Germany mainly focussed on the Kupferschiefer shale unit (Figure 6 & 7). The Company’s exploration hypothesis is that as in Poland, significant footwall and hanging wall accumulations of Kupferschiefer copper are potentially present at the Project.

The historical thinking about Kupferschiefer deposits in Germany was that mineralisation was syngenetic with the sediments. Meaning that the copper was deposited at the same time as the shale. Accordingly, historical mining and exploration was highly focussed on the shale. Modern mining and research challenges the historical deposit model. In Poland, copper is being mined up to 60 m below and 30 m above the Kupferschiefer shale.

The modern understanding of Kupferschiefer mineralisation recognises epigenetic deposition. This means that the copper mineralisation came after the sediments were deposited (Figure 8). Modern Kupferschiefer mining recognises the importance of structures, metal zonation patterns, and footwall and hanging wall host rocks.

A diagram of a soil layer Description automatically generated

Figure 8: Deposit model of Kupferschiefer mineralisation and alteration. Note: Compared to pre-industrial times, copper mineralisation is now known to extend from the hanging wall limestone, through the Kupferschiefer shale, and well into the footwall sandstone. Source: Zientek et al., 2015.

Regional Geological Setting

The Project is hosted in the Southern Permian Basin (“SPB”) of Europe. The SPB is an intracontinental basin that developed on the northern foreland of the Variscan Orogen. Two Groups make up the SPB, the Rotliegend and the Zechstein (Figure 9). The Lower Rotliegend Group marks the boundary between the Permian and Carboniferous and is comprised of bi-modal volcanics with interbedded sedimentary rocks. After a 20- to 30-million-year-long- hiatus, the Upper Rotliegend Group was deposited towards the end of the Permian. The Upper Rotliegend Group strata transitions from terrestrial to a shallow marine environment.

The Zechstein Group formed in the late Permian when the Barents Sea flooded the continental SPB. The organic-rich reduced Kupferschiefer shale marks the base of the Zechstein Group. “Kupferschiefer” is German for “Copper Shale” and is also called “T1” by geologists. The shale is typically 30-60 cm thick but can also be missing from the stratigraphy.

Very high-grade copper mineralisation is generally associated with the Kupferschiefer shale unit. However, minable copper mineralisation also occurs in the footwall sandstone and hanging wall limestone units in Poland. Mineralisation can also be offset from the shale by up to 30 m above and 60 m below. Pre-industrial mining in Germany focussed on the high-grade but thin shale. Modern mining in Poland extracts copper from the footwall sandstone, shale, and hanging wall limestone. Mining intervals at the Rudna mine is 3 m on average but reach over 12 m in places.

A diagram of a geological structure Description automatically generated

Figure 9: Generalised Kupferschiefer stratigraphic sequence from Germany and Poland. Mineralisation can extend below and above the T1 shale. Source: Borg, 2017.

 

In Poland, copper deposits are hosted in the Fore-Sudetic Monocline, a sub-basin of the SPB. KGHM’s current mining operations take place over multiple adjacent deposits at depths ranging from 844 m to 1,385 m below ground. In 2023, KGHM’s Polish operations produced 592 kt of electrolytic copper and 1,403 t of silver (45.8 Moz).

Upcoming Work Programs

Future work programs at the Project will aid drill targeting. Initially, an in-country search for additional historical drilling and mining records will be undertaken. Geophysical methods such as seismic and magnetic surveys will be evaluated for their effectiveness in delineating subsurface structures at the high-priority Richelsdorf Dome target. Historical drill assays will be used to identify metal zonation patterns useful for exploration targeting. The area of primary interest covers 14 km-long stretch of the Richelsdorf Dome where Kupferschiefer strata outcrop at surface in the centre and extend down to approximately 500 m at the periphery.

A European based technical team will be assembled to manage exploration activities at the Project.

Risk Factors

Whilst GreenX has undertaken a due diligence process (including title and other risks) with respect to the Project, it should be noted that the usual risks associated with companies undertaking exploration and development activities of projects in Germany will remain at completion of the acquisition.

A number of additional risk factors specific to the Project and associated activities have also been identified, including, but not limited to:

(a)        The Project is located in Germany, and as such, the operations of the Company will be exposed to related risks and uncertainties associated with the country, regional and local jurisdictions. Opposition to the Project, or changes in local community support for the Project, along with any changes in mining or investment policies or in political attitude in Germany and, in particular to the mining, processing or use of copper, may adversely affect the operations, delay or impact the approval process or conditions imposed, increase exploration and development costs, or reduce profitability of the Company.

(b)        The Company’s exploration and any future mining activities are dependent upon the grant, maintenance and/or renewal from time to time of the appropriate title interests, licences, concessions, leases, claims, permits and regulatory consents which may be withdrawn or made subject to new limitations. Maintaining title interests or obtaining renewals of or getting the grant of title interests often depends on the Company being successful in obtaining and maintaining required statutory approvals for its proposed activities (including a licence for mining operations) and that the title interests, licences, concessions leases, claims, permits or regulatory consents it holds will be maintained and when required renewed.

There is no assurance that such title interests, licences, concessions, leases, claims, permits or regulatory consents will be granted, or even if granted, not be revoked, significantly altered or granted on terms or with conditions not acceptable to the Company, or not renewed to the detriment of the Company or that the renewals thereof will be successful.

Shareholders should note that some of the risks may be mitigated by the use of appropriate safeguards and systems, whilst others are outside the control of the Company and cannot be mitigated. Should any of the risks eventuate, then it may have a material adverse impact on the financial performance of the Project, the Company and the value of the Company’s securities.

TENEMENT INFORMATION

Table 2: Tenement information.

Licence Name

Commodities

Area (km2)

Issue Date

Expiry Date

Tannenberg

 

1copper, silver

2antimony, arsenic, lead, gallium, germanium, gold, indium, cadmium, cobalt, molybdenum, nickel, palladium, platinum, rhodium, selenium, thallium, vanadium, bismuth, and zinc

271.92

07.06.2022

07.06.2025

Notes

1 Target commodities

2 Commodities included in the licence

 

ISSUE OF SHARES

GreenX Metals Limited has today issued 600,000 Shares in relation to the Agreement.

An application will be made for admission of the Shares to the standard listing segment of the Official List of the FCA (Official List) and to trading on the main market of the London Stock Exchange for listed securities (LSE Admission). LSE Admission is expected to take place on or before 9 August 2024.

 

For the purposes of the Financial Conduct Authority’s Disclosure Guidance and Transparency Rules (DTRs), following LSE Admission, the Company’s issued ordinary share capital will be 279,501,032 ordinary shares. The above figure of 279,501,032 may be used by shareholders as the denominator for the calculations by which they can determine if they are required to notify their interest in, or a change to their interest in, the Company following LSE Admission

 

Following the issue of Shares, GreenX has the following securities on issue:

·      279,501,032 ordinary fully paid shares;

·      4,775,000 unlisted options exercisable at A$0.45 each on or before 30 November 2025;

·      5,525,000 unlisted options exercisable at A$0.55 each on or before 30 November 2026; and

·      11,000,000 performance rights that have an expiry date 8 October 2026.

 

-ENDS-

Competent Persons Statement

Information in this announcement that relates to Exploration Results is based on information compiled by Mr Thomas Woolrych, a Competent Person who is a Member of the Australian Institute of Mining and Metallurgy. Mr Woolrych is a Director Group 11 Exploration GmbH and will hold an indirect interest in GreenX shares and deferred consideration for the Project. Mr Woolrych has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Woolrych consents to the inclusion in this announcement of the matters based on his information in the form and context in which it appears.

Forward Looking Statements

This release may include forward-looking statements, which may be identified by words such as “expects”, “anticipates”, “believes”, “projects”, “plans”, and similar expressions. These forward-looking statements are based on GreenX’s expectations and beliefs concerning future events. Forward looking statements are necessarily subject to risks, uncertainties and other factors, many of which are outside the control of GreenX, which could cause actual results to differ materially from such statements. There can be no assurance that forward-looking statements will prove to be correct. GreenX makes no undertaking to subsequently update or revise the forward-looking statements made in this release, to reflect the circumstances or events after the date of that release.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 (‘MAR’). Upon the publication of this announcement via Regulatory Information Service (‘RIS’), this inside information is now considered to be in the public domain

1 Production numbers sourced from Zientek et al., 2015, Table 4.

Appendix 1: Exploration Results and JORC Tables

Table 1: Historical drill hole information

Hole ID

Easting

Northing

Elevation

(m MSL)

Dip (°)

Depth (m)

Assay available

Bebra-1

4346428

5649690

n/a

90

n/a

No

C/77-B10

4353728

5660165

235

90

68.2

No

Cornberg

4349990

5658105

302

90

151.6

No

Iba-1

4349160

5650548

n/a

90

n/a

No

Iba-3

4349120

5649684

n/a

90

n/a

No

Iba-4

4348366

5649523

n/a

90

n/a

No

KB1

4356129

5659867

288.83

90

15

No

Nesselroeden-1

4368324

5655767

252

90

193.7

No

Obergude

4339370

5662062

308.88

90

200.2

Yes

Ro1

4349714

5649065

n/a

90

n/a

No

Ro3

4348224

5648740

n/a

90

n/a

No

Ro6

4348997

5648337

n/a

90

n/a

No

Ro8

4348234

5648558

n/a

90

n/a

No

Ro10

4347033

5647996

n/a

90

n/a

No

Ro15

4348595

5647200

255

90

351

Yes

Ro18

4348389

5647549

235

90

227

Yes

Ro19

4349107

5647350

280

90

360.5

Yes

Ro21

4348105

5647941

203

90

211

Yes

Ro23

4347684

5647433

300

90

380

Yes

Ro26

4347272

5647775

270

90

400

Yes

Ro27

4346047

5649652

215

90

432

Yes

Ro30

4347604

5647936

240

90

292.3

Yes

Ro31

4346844

5651396

217

90

159.2

Yes

Ro33

4347521

5648340

205

90

251.9

Yes

Ro34

4347363

5651850

220

90

244.75

Yes

Ro36

4347359

5650524

310

90

320.45

Yes

Ro39

4358152

5656842

200

90

197.2

Yes

Ro41

4346982

5647411

250

90

426.2

Yes

Ro42

4348170

5647070

249

90

307

Yes

Ro45

4356946

5656716

407

90

289

Yes

Ro46

4358278

5658088

200

90

228

No

Note: Coordinates are DHDN / 3-degree Gauss-Kruger zone 4.

Table 2: Historical drill hole assays

Hole

ID

Intersect (m)

Cu

(%)

Ag

(ppm)

From

To

Interval

Ro15

285.857

286.018

0.161

0.532

10

Ro15

286.018

286.068

0.05

0.846

15

Ro15

286.068

286.243

0.175

0.72

13

Ro15

286.243

286.288

0.045

0.919

16

Ro15

286.288

286.388

0.1

0.638

12

Ro15

286.388

286.438

0.05

0.681

13

Ro15

286.438

286.532

0.094

0.59

12

Ro15

286.532

286.619

0.087

0.562

11

Ro15

286.619

286.695

0.076

0.64

12

Ro15

286.695

286.812

0.117

0.707

13

Ro15

286.812

286.942

0.13

0.811

13

Ro15

286.942

287.043

0.101

0.737

11

Ro15

287.043

287.17

0.127

1.6

21

Ro15

287.17

287.272

0.102

1.437

19

Ro15

287.272

287.372

0.1

0.835

13

Ro15

287.372

287.463

0.091

0.499

11

Ro15

288.021

288.093

0.072

0.313

4

Ro15

288.151

288.206

0.055

0.441

5

Ro15

288.206

288.261

0.055

0.651

5

Ro15

288.261

288.281

0.02

0.506

5

Ro15

288.281

288.323

0.042

0.642

6

Ro15

288.323

288.388

0.065

1.573

12

Ro15

288.388

288.472

0.084

4.708

28

Ro15

288.472

288.51

0.038

3.837

24

Ro15

288.559

288.588

0.029

8.823

57

Ro15

288.588

288.623

0.035

4.774

30

Ro15

288.623

288.651

0.028

4.382

32

Ro15

288.651

288.721

0.07

3.554

98

Ro15

288.721

288.763

0.042

3.511

32

Ro15

288.763

288.793

0.03

2.814

28

Ro15

288.793

288.823

0.03

1.573

11

Ro15

288.823

288.865

0.042

2.313

17

Ro15

288.865

288.883

0.018

0.567

7

Ro15

288.883

288.901

0.018

0.469

7

Ro15

288.901

288.972

0.071

0.645

10

Ro15

288.972

289.004

0.032

0.617

8

Ro15

289.004

289.057

0.053

0.641

9

Ro15

289.057

289.117

0.06

0.523

9

Ro15

289.117

289.129

0.012

0.349

0

Ro15

289.151

289.159

0.008

1.033

18

Ro15

289.159

289.169

0.01

0.641

14

Ro15

289.169

289.179

0.01

0.477

15

Ro15

289.179

289.235

0.056

0.817

10

Ro15

289.235

289.257

0.022

0.312

4

Ro15

289.257

289.312

0.055

0.321

4

Ro18

209.5

210

0.5

0.9

20

Ro18

210

210.25

0.25

7.2

70

Ro18

210.25

210.53

0.28

8.6

50

Ro18

210.53

210.76

0.23

3.3

35

Ro18

210.76

211

0.24

0.3

-2

Ro19

339.5

339.71

0.21

7.6

80

Ro19

339.71

340

0.29

2.5

30

Ro19

340

340.5

0.5

1.5

15

Ro19

340.5

341

0.5

1

10

Ro19

341

341.5

0.5

1.3

10

Ro19

341.5

342

0.5

0.43

10

Ro21

199

199.18

0.18

0.94

10

Ro21

199.18

199.4

0.22

0.49

6

Ro23

365.48

366

0.52

2

21

Ro23

366

366.45

0.45

0.88

17

Ro23

366.45

367

0.55

3.2

78

Ro23

367

367.49

0.49

5

80

Ro23

367.49

367.58

0.09

0.97

12

Ro26

388.3

388.48

0.18

2.1

Ro26

388.48

388.72

0.24

0.88

Ro26

388.72

389

0.28

0.74

Ro33

242.5

243.1

0.6

1.2

35

Ro33

243.1

243.5

0.4

0.31

10

Ro34

196.75

197

0.25

0.45

10

Ro41

414.35

414.85

0.5

0.45

10

Ro45

268

268.5

0.5

0.35

2

Ro45

268.5

269

0.5

2.3

25

Ro45

269

269.28

0.28

4.8

75

Ro45

269.28

269.63

0.35

0.59

3

Ro45

269.63

270

0.37

1

5

Note: Only assay results equal to or greater than 0.3% copper are reported.

 

JORC Code, 2012 Edition – Table 1 Report

Section 1 Sampling Techniques and Data

(Criteria in this section apply to all succeeding sections.)

Criteria

JORC Code explanation

Commentary

Sampling techniques

Nature and quality of sampling (eg cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling.

Due to the historic nature of the drilling results reported herein, it is not possible to comment on the quality of the sampling used to produce the results described. It is known from historic reports that the drill core was sawn. Sampling of ¼ core was conducted during multiple exploration phases between 1980 and 1987 within the licence area by St Joes Exploration GmbH (“St Joes Exploration”). The information shown here was collated from scans of hard copy reports from that era and a State Survey Database. Assays, geological logging and gamma ray logs were conducted by St Joes Exploration.

 

Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.

No QAQC was reported.

 

Aspects of the determination of mineralisation that are Material to the Public Report. In cases where ‘industry standard’ work has been done this would be relatively simple (eg ‘reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay’). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (eg submarine nodules) may warrant disclosure of detailed information.

Work was not conducted to modern industry standards.

Drilling techniques

Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc).

St Joes Exploration

·          10 cm drill cores were collected, further specifications are not known.

State Survey Database

·          Unknown drilling techniques.

Drill sample recovery

Method of recording and assessing core and chip sample recoveries and results assessed.

 

Due to the historic nature of the drilling results reported herein, it is not possible to comment on the recoveries achieved at the time.

 

Measures taken to maximise sample recovery and ensure representative nature of the samples.

Not reported.

 

Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.

Not reported.

Logging

Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies.

Information available is not appropriate for a Mineral Resource estimate.

 

Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography.

Available logs are qualitative only.

 

The total length and percentage of the relevant intersections logged.

The entire hole was logged, the target zone is typically 2 m thick.

Sub-sampling techniques

If core, whether cut or sawn and whether quarter, half or all core taken.

A reference to ¼ core is reported by St Joes Exploration however this is not specific to every hole/phase.

and sample preparation

If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry.

N/A

 

For all sample types, the nature, quality and appropriateness of the sample preparation technique.

N/A

 

Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples.

N/A

 

 

Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling.

N/A

 

Whether sample sizes are appropriate to the grain size of the material being sampled.

N/A

Quality of assay data and laboratory tests

The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total.

A St Joes Exploration reference reports that geochemical analysis was carried out by Robertson Research Ltd, Wales, however it is not specified if this was for each hole/phase.

 

For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc.

N/A

 

Nature of quality control procedures adopted (eg standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (ie lack of bias) and precision have been established.

N/A

Verification of sampling and assaying

The verification of significant intersections by either independent or alternative company personnel.

 

No verification carried out.

 

The use of twinned holes.

No twinned holes.

 

Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols.

Limited data is available via hard copy reports. Data was digitised by Group 11 Exploration and merged with State/Federal databases.

 

Discuss any adjustment to assay data.

N/A

Location of data points

Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation.

Location accuracy is unknown. The location of holes drilled by St Joes Exploration comes from collar tables in historical reports.  All other collar locations come from State/Federal databases.

 

Specification of the grid system used.

Latitude and Longitude in degree, minutes and seconds were provided by St Joes Exploration. All drill collar coordinates are reported here in the DHDN / 3-degree Gauss-Kruger zone 4 grid system.

 

Quality and adequacy of topographic control.

N/A

Data spacing and distribution

Data spacing for reporting of Exploration Results.

Drillholes within the Ronshausen mineralised area are spaced between 400 – 700m. Outside of this area the drilling is sparce.

 

Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied.

Not sufficient for the establishment of a JORC compliant resource.

 

Whether sample compositing has been applied.

N/A

Orientation of data in relation to geological structure

Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type.

The target Kupferschiefer layer is flat to slightly dipping, vertical drilling therefore intercepts at right angles and is appropriate.

 

If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material.

No sampling bias.

Sample security

The measures taken to ensure sample security.

N/A

Audits or reviews

The results of any audits or reviews of sampling techniques and data.

N/A

 

Section 2 Reporting of Exploration Results

(Criteria in the preceding section also apply to this section.)

Criteria

JORC Code explanation

Commentary

Mineral tenement and land tenure status

Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings.

The “Tannenberg” exploration licence is held 100% by Group 11 Exploration GmbH. The licence was granted on the 7th of June 2022 and is valid for 3 years. The licence is free from overriding royalties and native titles interests. There are historical mine workings within the licence area, but no known historical sites of cultural significance outside of mining.

Within and surrounding the licence area, there are environmental protections zones with differing levels of protections. There are small areas identified as Natura 2000 Fauna Flora Habitat Areas and Bird Sanctuaries. Other environmental protection designated areas include Nature Reserves, National Natural Monuments, Landscape Protection Area, and Natural Parks. Based on due diligence and discussions with various stakeholders and consultants, the presence of environmental protection areas does not preclude exploration or eventual mining if conducted in accordance with applicable standards and regulations.

The landform across the license area comprises mostly of farmland, forested areas, and small towns and villages.

 

The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.

The licence is in good standing.

Exploration done by other parties

Acknowledgment and appraisal of exploration by other parties.

Exploration was carried out by St Joes Exploration (in JV with the Broken Hill Pty Co Ltd later BHP-Utah) between 1980 and 1987. Two projects were undertaken. The Richelsdorf project within the licence area as well as the Spessart-Rhoen project 85 km to the south. Hole IDs starting with ‘Ro’ were drilled by St Joes Exploration.

All other drill holes come from State Survey databases with unknown history.

Historical mining took place within the licence area. Mining activities ceased in the 1950’s. Comprehensive records of all mine workings are not available to the Company (and may not exist).

Geology

Deposit type, geological setting and style of mineralisation.

Mineralisation is of the classic Kupferschiefer type (copper slate) within the Permian Zechstein Basin of Germany and Poland.

The Zechstein Basin is hosted within the Southern Permian Basin (“SPB”) of Europe. The SPB is an intracontinental basin that developed on the northern foreland of the Variscan Orogen.

Very high-grade copper mineralisation is generally associated with the Kupferschiefer shale unit. However, minable copper mineralisation also occurs in the footwall sandstone and hanging wall limestone units in Poland. Mineralisation can be offset from the shale by up to 30 m above and 60 m below.

Drill hole Information

A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes:

easting and northing of the drill hole collar

elevation or RL (Reduced Level – elevation above sea level in metres) of the drill hole collar

dip and azimuth of the hole

down hole length and interception depth

hole length.

Appendix 1 contains all relevant drillhole information.

 

If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case.

All available drill collars are provided. The availability of historical assay results are listed in Appendix 1 Table 1.  Assay results less than 0.3% Cu are not reported.

Data aggregation methods

In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (eg cutting of high grades) and cut-off grades are usually Material and should be stated.

N/A

 

Where aggregate intercepts incorporate short lengths of high grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail.

N/A

 

The assumptions used for any reporting of metal equivalent values should be clearly stated.

N/A

Relationship between mineralisation widths and intercept lengths

These relationships are particularly important in the reporting of Exploration Results. If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported.

Drilling is perpendicular to mineralisation. Detailed sampling was done to lithological contacts on a range of scales from 1-50cm.

 

If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (eg ‘down hole length, true width not known’).

Intercepts are true width.

Diagrams

Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported These should include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views.

Appropriate diagrams, including a maps, cross sections, and tables are included in the main body of this announcement.

Balanced reporting

Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results.

All available results are reported. Only assays above or equal to 0.4% Cu are reported for practical reasons.

Other substantive exploration data

Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples – size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances.

All substantive results are reported. Geological logs and downhole gamma logs are not reported here.

Further work

The nature and scale of planned further work (eg tests for lateral extensions or depth extensions or large-scale step-out drilling).

Infill and step out drilling required to assess the full potential of mineralisation near Ronshausen is planned. The search for additional archive material and historical records will continue. Desktop analysis and drill targeting will be conducted in consultation with subject-matter experts. Geophysical methods (such as seismic, magnetic, electrical, and gravity) will be evaluated and used if deemed appropriate for the project.

 

Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.

These diagrams are included in the main body of this release.

 

#BRES Blencowe Resources PLC – Annual Financial Report

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

Independent Auditor’s Report to the Members of Blencowe Resources Plc

Opinion

We have audited the financial statements of Blencowe Resources Plc (the “Parent Company”) and its subsidiary (the ‘Group’) for the year ended 30 September 2023 which comprise the Consolidated statement of comprehensive income, Consolidated statement of financial position, Parent Company statement of financial position, Consolidated statement of changes in equity, Parent Company statement of changes in equity, Consolidated statement of cash flows, Parent Company statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in the preparation of the Group and the Parent Company financial statements is applicable law and UK-adopted international accounting standards.

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 September 2023 and of the Group’s loss for the year then ended;

·      the Group and the Parent Company financial statements have been properly prepared in accordance with UK-adopted international accounting standards: 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 the 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 public interest 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 in relation to going concern

We draw attention to note 2.3 to the financial statements, which explains that the Group and Parent Company’s ability to continue as a going concern is dependent on the availability on further fundraising. These conditions indicate the existence of a material uncertainty which may cast significant doubt over the Group’s and Parent Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate. We have highlighted going concern as a key audit matter due to the estimates and judgements the Directors are required to make in their going concern assessment, and their effect on our audit strategy. Our audit work in response to this key audit matter included:

·      We obtained the going concern assessment prepared by the directors, and performed a detailed review of the supporting cash flow forecasts. We challenged the key assumptions based on expected activity within the going concern period, and comparison to historical actual monthly expenditure.

·      We checked the mathematical accuracy of the projections and agreed the opening cash position to bank statements. We confirmed that the period of going concern assessment covered at least twelve months from the date of approval of the financial statements, and enquired regarding any matters shortly after this date that would impact the going concern consideration.

·      We reviewed the prior year going concern projections against the actual performance in the current financial year, in order to assess management’s ability to forecast accurately.

·      We assessed the systems and controls in place for the preparation of management’s going concern projections.

·      We reviewed the requirements of the grant awarded by the US Development Funding Council in September 2023 regarding works to be performed in order to receive each tranche of funding. We discussed with the directors how these were factored into budgets and exploration plans during the going concern assessment period.

·      We held discussions with the directors on how they plan to raise the additional funding required by the cash flow forecasts. This was considered against their previous success in fundraising for the project.

·      We reviewed the completeness of disclosures made in the financial statements in relation to going concern, and that these are in line with the going concern assessment provided to us by the directors.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Overview of our audit approach

Materiality

In planning and performing our audit we applied the concept of materiality. An item is considered material if it could reasonably be expected to change the economic decisions of a user of the financial statements. We used the concept of materiality to both focus our testing and to evaluate the impact of misstatements identified.

Based on our professional judgement, we determined overall materiality for the financial statements as a whole to be £155,000 (2022 £140,000), based on 2% of total assets. Materiality for the parent company financial statements as a whole was set at £140,000 (2022: £120,000) based on 2% of total assets.

We use a different level of materiality (‘performance materiality’) to determine the extent of our testing for the audit of the financial statements.  Performance materiality is set based on the audit materiality as adjusted for the judgements made as to the entity risk and our evaluation of the specific risk of each audit area having regard to the internal control environment.  Performance materiality was set at 70% of materiality for the financial statements as a whole, which equates to £108,500 (2022: £98,000) for the Group and £98,000 (2022: £84,000) for the parent.

Where considered appropriate performance materiality may be reduced to a lower level, such as, for related party transactions and directors’ remuneration.

We agreed with the Audit Committee to report to it all identified errors in excess of £7,700 (2022: £7,000). Errors below that threshold would also be reported to it if, in our opinion as auditor, disclosure was required on qualitative grounds.

Overview of the scope of our audit

Our Group audit was scoped by obtaining an understanding of the Group and its environment, including the Group’s system of internal control, and assessing the risks of material misstatement in the financial statements. We also addressed the risk of management override of internal controls, including assessing whether there was evidence of bias by the Directors that may have represented a risk of material misstatement.

The Group operates through the Parent Company based in the United Kingdom whose main function is the incurring of administrative costs and providing funding to its exploration subsidiary in Uganda. The Parent Company, and its Ugandan subsidiary, were both considered to be a significant components.

In establishing our overall approach to the group audit, we determined the type of work that needed to be performed in respect of each component. As significant components, full scope audit were performed for both the Parent Company and the Ugandan subsidiary. All audit work was   carried out by the group audit team.

Given the Ugandan subsidiary is in the exploration stage of its work, we did not consider it necessary to visit Uganda. Documentation and explanations from Uganda were obtained by email and through telephone calls.

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.

We set out below, together with the material uncertainty in relation to going concern above, those matters we considered to be key audit matters.

Key audit matter

How our scope addressed the key audit matter

1. Carrying value of intangible assets (note 9)

The Group carries intangible assets totalling £7.6m (2022: £6.6m) in relation to the Orom-Cross project in Uganda. These costs are capitalised in accordance with the requirements of IFRS 6.

At each reporting date, the directors are required to assess whether there are any indicators of impairment, that would require an impairment assessment to be carried out. The directors concluded there were no indicators of impairment.

The directors’ consideration of the impairment indicators requires them to make certain judgements, and may include certain estimates. These matters, together with the materiality of the exploration and evaluation assets make this a key audit matter.

 

We performed the following procedures as part of our audit of management’s assessment of the carrying value of intangible assets:

·      We obtained and reviewed the directors’ assessment of the indicators of impairment, as set out in IFRS 6 “Exploration for and evaluation of mineral resources”.

·      We assessed the design and implementation of controls over the impairment assessment process.

·      We obtained copies of all licenses held by the Group, and performed procedures to confirm the Group’s control of the licenses, that they remain valid, and to check there is an expectation that any exploration licenses that have expired will be renewed in the normal course of business.

·      We made specific enquiries of the directors and key staff involved in the exploration work, and reviewed budgets and forecasts to support the Group continuing with further exploration work in each of its license areas.

·      We considered the results of the bulk sampling works completed during the period, for any matters that may indicate impairment.

·      We reviewed the adequacy of disclosures in the financial statements in relation to the impairment consideration.

Based on our work performed, we consider the directors’ assessment, and the financial statements disclosures to be appropriate.

Our audit procedures in relation to these matters were designed in the context of our audit opinion as a whole. They were not designed to enable us to express an opinion on these matters individually and we express no such opinion.

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 contained within the annual report.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

 

Opinions on other matters prescribed by the Companies Act 2006

In our opinion the part of the directors’ remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006.

In our opinion based on the work undertaken in the course of our 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 directors’ report and strategic 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 company, or returns adequate for our audit have not been received from branches not visited by us; or

·      the company financial statements and the part of the directors’ remuneration report to be audited 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

Corporate governance statement

We have reviewed the directors’ statement in relation to going concern, longer-term viability and that part of the Corporate Governance Statement relating to the entity’s voluntary compliance with the provisions of the UK Corporate Governance Statement specified for our review.

Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance Statement is materially consistent with the financial statements and our knowledge obtained during the audit:

 

·      Directors’ statement with regards the appropriateness of adopting the going concern basis of accounting and any material uncertainties identified set out on page 17;

·      Directors’ explanation as to their assessment of the Group’s prospects, the period this assessment covers and why they period is appropriate set out on pages 19 and 20.

·      Directors’ statement on whether they have a reasonable expectation that the Group will be able to continue in operation and meets its liabilities set out on page 17;

·      Directors’ statement on fair, balanced and understandable set out on page 13;

·      Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page 5;

·      Section of the annual report that describes the review of effectiveness of risk management and internal control systems set out on page 17; and

·      Section describing the work of the audit committee set out on page 18.

Responsibilities of the directors for the financial statements

As explained more fully in the directors’ responsibilities statement set out on page 13, the directors are responsible for the preparation of the 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 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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

·      We obtained an understanding of the legal and regulatory frameworks that are applicable to the Group, and the procedures in place for ensuring compliance. The most significant regulations identified were the Companies Act 2006, listing rules of the London Stock Exchange and the requirements of the Group’s mining and exploration licenses. Our work included direct enquiry of the directors, who oversee all legal proceedings, reviewing Board minutes and inspection of correspondence.

·      We made enquiries of management, the Audit Committee and the Group’s external legal counsel in Uganda about any litigations and claims and compliance with local legislation in Uganda.

·      We communicated the relevant laws and regulations identified to all members of the engagement team, and remained alert to any indication of non-compliance with laws and regulations, or potential fraud, throughout our audit work.

·      As part of our audit planning process we assessed the different areas of the financial statements, including disclosures, for the risk of material misstatement. This included considering the risk of fraud where direct enquiries were made of management and those charged with governance concerning both whether they had any knowledge of actual or suspected fraud and their assessment of the susceptibility of fraud. We considered the risk was greater in areas that involve significant management estimate or judgement. Based on this assessment we designed audit procedures to focus on the key areas of estimation or judgement, this included risk-based testing of journal transactions using data analytic software, both at the year end and throughout the year.

Owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements of the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). The potential effects of inherent limitations are particularly significant in the case of misstatement resulting from fraud because fraud may involve sophisticated and carefully organized schemes designed to conceal it, including deliberate failure to record transactions, collusion or intentional misrepresentations being made to us.

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.

Other matters which we are required to address

We were appointed by the board of Directors on 14 December 2018 to audit the financial statements for the period ending 30 September 2018. Our total uninterrupted period of engagement is six years, covering the periods ending 30 September 2018 to 30 September 2023.

The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group or the Parent Company and we remain independent of the Group and the Parent Company in conducting our audit.

Our audit opinion is consistent with the additional report to the audit committee.

Use of our report

This report is made solely to the Parent 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 Parent 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 Parent Company and the Parent Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Nick Jones

Senior Statutory Auditor

For and on behalf of

Crowe U.K. LLP

Statutory Auditor

London, U.K.

 

Consolidated Statement of Comprehensive Income
for the year ended 30 September 2023

Notes

30 Sep 2023

30 Sep 2022

GBP

GBP

Exploration costs

(53,347)

(4,853)

Impairment – Akelikongo project

9

(404,533)

Administrative fees and other expenses

5

(1,298,872)

(681,488)

Adjustments to surface liability

15

51,316

Operating loss

(1,352,219)

(1,039,558)

Finance costs

15

(45,748)

(45,916)

Loss before tax

(1,397,967)

(1,085,474)

Taxation

8

Loss for the year attributable to owners of the parent

(1,397,967)

(1,085,474)

Other comprehensive income

Items that may be reclassified to profit or loss:

Exchange differences on translation of foreign operation:

31,282

(4,205)

Other comprehensive income/(loss), net of tax

31,282

(4,205)

Total comprehensive loss attributable to owners of the parent

(1,366,685)

(1,089,679)

Basic and diluted loss per share (pence)

10

(0.70)

(0.68)

 

           Consolidated Statement of Financial Position as at 30 September 2023

Notes

30 Sep 2023

30 Sep 2022

GBP

GBP

Non-Current Assets

Intangible assets

9

7,604,564

6,615,253

Current assets

Trade and other receivables

13

31,863

85,847

Cash and cash equivalents

129,853

346,994

Total current assets

161,716

432,841

Total assets

7,766,280

7,048,094

Current liabilities

Creditors: Amounts falling due within one year

14

(1,076,169)

(326,375)

Total current liabilities

(1,076,169)

(326,375)

Non-current liabilities

Surface liabilities

15

(818,915)

(823,852)

Total liabilities

(1,895,084)

(1,150,227)

Net assets

5,871,196

5,897,867

Equity

Share capital

16

1,338,566

1,181,316

Share premium

16

8,637,399

7,480,829

Share options reserve

428,342

402,148

Translation reserve

2.9

30,739

(543)

Accumulated losses

(4,563,850)

(3,165,883)

Total equity

5,871,196

5,897,867

 

These financial statements were approved by the Board of Directors and authorised for issue on 30 January 2024 and signed on its behalf by:

Cameron Pearce                                  Sam Quinn

Director                                                           Director

                                                                                                         

Parent Statement of Financial Position as at 30 September 2023

 

 

Notes

30 Sep 23

30 Sep 22

 

GBP

GBP  

 

Fixed assets

 

Investment in subsidiaries

11

6,027,940

4,892,924

Non-current assets

671,905

521,944

Total fixed assets

 

6,699,845

5,414,868

 

Current assets

 

Trade and other receivables

13

342,197

315,030

Cash and cash equivalents

129,853

346,994

Total current assets

472,050

662,024

 

Total assets

 

7,171,895

6,076,892

 

Current liabilities

 

Creditors: Amounts falling due within one year

14

(567,867)

(159,530)

Total current liabilities

 

(567,867)

(159,530)

 

 

Net assets

6,604,028

5,917,362

 

Equity

 

Share capital

16

1,338,566

1,181,316

Share premium

16

8,637,399

7,480,829

Share options reserve

428,342

402,148

Accumulated losses   

(3,800,279)

(3,146,931)

Total equity

6,604,028

5,917,362

 

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements. The loss after tax of the parent Company for the year was £653,348 (2022: £1,178,756).

The Financial Statements were approved and authorised for issue by the Board of Directors on 30 January 2024 and were signed on its behalf by:

                 

                                                                                  

 

Cameron Pearce                                  Sam Quinn

Director                                                           Director

Consolidated Statement of Changes in Equity for the year ended 30 September 2023

Share

 capital

Share premium

Share option reserve

Accumulated losses

Translation reserve

Total equity

GBP

GBP

GBP

GBP

GBP

GBP

Balance as at 30 Sep 2021

901,316

5,132,081

317,876

(2,080,409)

3,662

4,274,526

Loss for the year

(1,085,474)

(1,085,474)

Exchange differences on translation of foreign operations

(4,205)

(4,205)

Total comprehensive loss

(1,085,474)

(4,205)

(1,089,679)

Transactions with owners

New shares issued (note 16)

280,000

2,520,000

2,800,000

Share issue costs

(171,252)

(171,252)

Share based payment charge

84,272

84,272

Total transactions with owners

280,000

2,348,748

84,272

2,713,020

Balance as at 30 Sep 2022

1,181,316

7,480,829

402,148

(3,165,883)

(543)

5,897,867

Loss for the year

(1,397,967)

(1,397,967)

Exchange differences on translation of foreign operations

31,282

31,282

Total comprehensive loss

(1,397,967)

31,282

(1,366,685)

Transactions with owners

New shares issued (note 16)

157,250

1,227,750

1,385,000

Share issue costs

(71,180)

(71,180)

Share based payment charge

26,194

26,194

Total transactions with owners

157,250

1,156,570

26,194

1,340,014

Balance as at 30 Sep 2023

1,338,566

8,637,399

428,342

(4,563,850)

30,739

5,871,196

Parent Statement of Changes in Equity for the year ended 30 September 2023

Share

 capital

Share premium

Share option reserve

Accumulated losses

Total equity

GBP

GBP

GBP

GBP

GBP

Balance as at 30 Sep 2021

901,316

5,132,081

317,876

(1,968,175)

4,383,098

Loss for the year

(1,178,756)

(1,178,756)

Total comprehensive loss

(1,178,756)

(1,178,756)

Total transactions with owners

New shares issued (note 16)

280,000

2,520,000

2,800,000

Share issue costs

(171,252)

(171,252)

Share based payment charge

84,272

84,272

Total transactions with owners

280,000

2,348,748

84,272

2,713,020

Balance as at 30 Sep 2022

1,181,316

7,480,829

402,148

(3,146,931)

5,917,362

Loss for the year

(653,348)

(653,348)

Total comprehensive loss

(653,348)

(653,348)

Total transactions with owners

New shares issued (note 16)

157,250

1,227,750

1,385,000

Share issues costs

(71,180)

(71,180)

Share based payment charge

26,194

26,194

Total transactions with owners

157,250

1,156,570

26,194

1,340,014

Balance as at 30 Sep 2023

1,338,566

8,637,399

428,342

(3,800,279)

6,604,028

Consolidated Statement of Cash Flows for the year ended 30 September 2023

Notes

30 Sep 2023

30 Sep 2022

GBP

GBP

Operating activities

Loss after tax

(1,397,967)

(1,085,474)

Finance costs

45,748

45,916

Adjustment to surface liability

15

(51,316)

Share based payment

17

26,194

84,272

Impairment – Akelikongo costs

9

404,533

Unrealised currency translation

182,264

(208,371)

Changes in working capital

Decrease/(increase) in trade and other receivables

53,984

(33,267)

Increase in trade and other payables

272,664

76,483

Net cash flows utilised by operating activities

(817,113)

(767,224)

Cash flows from investing activities

Investment in exploration assets

9

(713,848)

(1,423,236)

Net cash flows utilised by investing activities

(713,848)

(1,423,236)

Cash flows from financing activities

Shares issued (net of issue cost)

16

1,313,820

2,444,166

Net cash flows from financing activities

1,313,820

2,444,166

(Decrease)/increase in cash and cash equivalents

(217,141)

253,706

Cash and cash equivalents at the beginning of the year

346,994

93,288

Cash and cash equivalents at the end of the year

129,853

346,994

Net Debt note

Cash at bank

and in hand

Surface

Liability

Total

GBP

GBP

GBP

At 1 October 2021

93,288

(887,560)

(794,272)

Cash flows

253,706

253,706

Other non-cash changes

(90,695)

(90,695)

As 30 September 2022

346,994

(978,255)

(631,261)

As 30 September 2022

346,994

(978,255)

(631,261)

Cash flows

(217,141)

(217,141)

Other non-cash changes

159,340

159,340

As 30 September 2023

129,853

(818,915)

(689,062)

 

Parent Statement of Cash Flows for the year ended 30 September 2023

30 Sep 2023

30 Sep 2022

Notes

GBP

GBP

Operating activities

Loss after tax

(653,348)

(1,178,756)

Less finance income

(55,873)

(24,354)

Increase in bad debt provision

12,13

11,742

9,408

Share based payment

17

26,194

84,272

Changes in working capital

Increase in trade and other receivables

(27,167)

(120,783)

(Decrease)/increase in trade and other payables

(58,641)

64,002

Net cash flows from operating activities

(757,093)

(1,166,211)

Cash flows from investing activities

Loan advanced to subsidiary

(105,828)

(68,278)

Investment in subsidiary, relating to exploration costs paid

11

(668,040)

(955,971)

Net cash flows from investing activities

(773,868)

(1,024,249)

 

Cash flows from financing activities

Shares issued (net of issue cost)

16

1,313,820

2,444,166

Net cash flows from financing activities

1,313,820

2,444,166

Increase/(decrease) in cash and cash equivalents

(217,141)

253,706

Cash and cash equivalents at the beginning of the year

346,994

93,288

Cash and cash equivalents at the end of the year

129,853

346,994

1.   General

Blencowe Resources Plc (the “Company”) is a public limited company incorporated and registered in England and Wales on 18 September 2017 with registered company number 10966847 and its registered office is situated in England and Wales at 167-169 Great Portland Street, Fifth Floor London, W1W 5PF.

The Group did not earn any trading income during the year under review but incurred expenditure associated with financing and operation of the Group and developing its principal assets.

2.   Accounting Policies

2.1     Basis of preparation

The principal accounting policies applied in the preparation of the Company and Group’s Financial Statements are set out below. These policies have been consistently applied to the periods presented, unless otherwise stated.

The Company and Group’s Financial Statements have been prepared in accordance with UK adopted international accounting standards (“IFRS”). The Company Financial Statements have been prepared using the measurement bases specified by IFRS for each type of asset, liability, income and expense.

The Group’s Financial Statements are presented in GBP, which is the Company’s functional currency. All amounts have been rounded to the nearest pound, unless otherwise stated.

2.2     Basis of consolidation

The Consolidated Financial Statements comprise the financial statements of the Company and its subsidiary Consolidated African Resources Limited (“CARU”) ) (formerly Blencowe Resources Uganda Ltd (“BRUL”).

Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains control.  Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over an investee, including:

•           the contractual arrangement with the other vote holders of the investee;

•           rights arising from other contractual arrangements; and

•           the Group’s voting rights and potential voting rights

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

All intra-group balances, transactions, income and expenses and profits and losses resulting from intra-group transactions that are recognised, are eliminated in full.

2.3     Going concern

At 30 September 2023, the Group had £7,766,280 of total assets (2022: £7,048,094), of which £129,853 are held as cash and cash equivalents (2022: £346,994).

In making an assessment of going concern for the Group and Company, the Board of Directors have reviewed cash flow forecasts covering a period of 12 months from the date these financial statements were approved, and have concluded that it is appropriate to prepare the financial statements on a going concern basis.

The Group has successfully been granted a $5 million grant through the US Development Finance Corporation (DFC). This funding will be provided in a number of tranches aligned to completion of works related to the Definitive Feasibility Study. The DFC grant will not cover the entirety of the DFS costs and hence additional funding will be required during the going concern period. These conditions are considered to indicate the existence of a material uncertainty, which may cast doubt over the Group’s and Company’s ability to continue as a going concern. The financial statements do not include adjustments that would arise in the event of the Group and Company not being a going concern.

2.4     Changes in significant accounting policies

The Group has adopted all new IFRS and amendments to IFRS applicable for this period. There has been no change to the Group’s accounting policies as a result, and no other significant impact to the financial statements.

2.5     Standards, amendments and interpretations to published standards not yet effective

The Directors have reviewed the IFRS standards in issue which are effective for annual accounting years ending on or after the stated effective date. In their view, none of these standards would have a material impact on the financial statements of the Group.

2.6     Intangible assets

Exploration and evaluation assets

The Group recognises expenditure as exploration and evaluation assets when it determines that those assets will be successful in finding specific mineral resources. Expenditure included in the initial measurements of exploration and evaluation assets and which are classified as intangible assets relate to the acquisition of rights to explore, exploratory drilling, sampling and activities to evaluate the technical feasibility and commercial viability of extracting a mineral resource. Capitalisation of pre-production expenditure ceases when the mining property is capable of commercial production.

Impairment

Exploration and evaluation assets are not subject to amortisation until production commences but are assessed for impairment when an event or trigger requires an assessment to be carried out. The assessment is carried out by allocating exploration and evaluation assets to cash generating units (“CGU’s”), which are based on specific projects or geographical areas. Currently there is only one CGU relating to the Orom-Cross Project. Whenever the exploration for and evaluation of mineral resources in cash generating units does not lead to the discovery of commercially viable quantities of mineral resources and the Group has decided to discontinue such activities of that unit, the associated expenditures are written off to the Statement of Comprehensive Income.

Exploration and evaluation assets recorded at fair-value on acquisition

Exploration assets which are acquired are recognised at fair value. When an entity is acquired whose only significant assets are its exploration asset and/or rights to explore, the Directors consider that the fair value of the exploration assets is equal to the consideration.

2.7     Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another.

(i)       Financial assets

Financial assets are classified at initial recognition. The classification of financial assets at initial recognition that are debt instruments depends on the financial asset’s contractual cash flow characteristics and the Group’s business model for managing them. The Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs.

In order for a financial asset to be classified and measured at amortised cost, it needs to give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’ on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level.

Classification and measurement is based on both whether contractual cash flows are solely payments of principal and interest; and whether the debt instrument is held to collect those cash flows. In the case of the Group, all financial assets meet this criteria and they are held at amortised cost.

Impairment of financial assets

IFRS 9’s impairment requirements use more forward-looking information to recognise expected credit losses – the ECL model.

ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Company expects to receive, discounted at the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.

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

For the Company’s receivables from its subsidiary, management have assessed there to be no significant change in credit risk and have assessed a 12 month ECL at 5% to be appropriate for the current year. Therefore, the Company does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date.

(ii)      Financial liabilities

Financial liabilities are classified, at initial recognition, as financial liabilities at amortised cost. The Group’s financial liabilities include trade and other payables and surface liabilities.

Subsequent measurements

Surface liabilities and trade and other payables.

After initial recognition, surface liabilities and trade and other payables are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in the statement of profit or loss when the liabilities are derecognised, as well as through the effective interest rate amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate. The effective interest rate amortisation is included as finance costs in the statement of profit or loss.

Derecognition

A financial liability is derecognised when the associated obligation is discharged or cancelled or expires.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in profit or loss.

2.8     Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from proceeds.

Warrants

Warrant options are classified as equity.  The fair value of the warrants has been calculated using the Black-Scholes option pricing model.  For more information, please see note 17.

Share options

The Group accounts for the equity-settled share options it has issued in accordance with IFRS 2. The share options are recognised at their fair value at the date of grant. The total share based payment charge expensed is recognised over the vesting period, which is the period over which performance conditions are to be satisfied. The fair value is calculated using the Black-Scholes option pricing model, adjusted for the probability of meeting market based vesting conditions where these are included.  The inputs used in the model are based on management’s best estimate.

No expense is recognised for options that do not ultimately vest, except for awards where vesting is conditional on a market condition or non-vesting condition, which are treated as vesting irrespective of whether or not the market or non-vesting condition is satisfied, provided all other performance or service conditions are satisfied.

2.9     Foreign currency translation

(i)    Functional and presentation currency

Items included in the financial statements of each of the group’s entities are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in Great British Pounds currency (GBP).

(ii)   Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at that date.  Foreign exchange gains and losses resulting from the settlement of such transactions, and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates, are generally recognised in profit or loss.

Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Non-monetary items in a foreign currency that are measured in terms of historical cost are translated using the exchange rate at the date of the transaction.   Foreign currency differences arising on the consolidation of the Group’s companies are accumulated in the translation reserve.  The Company’s only subsidiary is Blencowe Resources Uganda Limited, whose functional currency is USD

2.10   Earnings per share

The Company presents basic and, when appropriate, diluted earnings per share (“EPS”) data for its Ordinary Shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of Ordinary Shares outstanding during the year. Diluted EPS is calculated by adjusting the earnings and number of shares for the effects of dilutive potential Ordinary Shares.

2.11   Income tax

Income tax expense comprises current tax and deferred tax.

Current income tax

A 19% rate of corporate income tax applies to the Company. From 1 April 2023 the main corporation tax increased from 19% to 25%, and a new 19% small profits rate of corporation tax was introduced for companies whose profits do not exceed £50,000.

Deferred income tax

Deferred tax is recognised in profit or loss except to the extent that it relates to a business combination, or items recognised directly in equity or in other comprehensive income. Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the Financial Statements. Deferred income tax assets and liabilities are measured on an undiscounted basis at the tax rates that are expected to apply to the period when the related asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the date of the Consolidated Statement of Financial Position.

2.12   Investment in subsidiary

Investments in subsidiary are done at cost less impairment, with the investment balance being added to the exploration costs paid on behalf of the subsidiary.

2.13   Cash and cash equivalents

Cash and cash equivalents in the Company and Group statements of financial position comprise bank balances only.

3.   Critical accounting estimates and judgments

In preparing the Company and Group Financial Statements, the Directors are required to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Accounting estimates and assumptions are made concerning the future and, by their nature, may not

accurately reflect the related actual outcome. There are no key assumptions and other sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

Critical accounting estimates

Interest charge on amounts falling after one year

At year end, the NPV of the liability for surface rights  to the owners of the land was £818,915 (2022: £978,255). Interest is charged on the liabilities at a rate of 5%, if the discount rate used to calculate the present value of the liabilities was to increase by 1%, the carrying value of the surface rights liability would increase by around £34,506 (2022: £60,000). The interest charged during the year was for the surface rights was £45,748 (2022: £45,916), if the rate was increased by 1% then the interest charge would increase by approximately £6,235 (2022: £5,000). For further information on the lease, please see note 15.

Critical accounting judgements

Impairment of intangible assets – exploration and evaluation costs

IFRS 6 requires entities recognising exploration and evaluation assets to perform an impairment test on those assets when specific facts and circumstances indicate an impairment test is required. The assessment involves judgement as to the status of licenses and the likelihood of renewal of exploration licenses which expire in the near future. The directors also make a judgement on the ability to meet license obligations, budgets and plans for future exploration activity, the results of that exploration activity, and to assess the recoverability of the capitalised exploration and evaluation costs on development of the project.

Going concern

In their assessment of going concern, the Directors have prepared cash flow forecast showing the Groups’ expected future expenditure. The Directors were required to make estimated and judgements over future cash flows and funding. For further information about the Group’s going concern, please see note 2.3.

4.   Operating Segment activities

The Group is engaged in the business of mining. At this stage in the Group’s development, the Group is focusing on financing and continued development of the Orom-Cross Graphite Project in Uganda. This is considered to be the only operating segment.

5.   Administrative fees and other expenses

30 Sep 2023

30 Sep 2022

GBP

GBP

Directors’ remuneration (see note 6)

140,051

163,770

Professional fees

           226,471

274,333

Salaries (see note 7)

150,000

142,500

Listing fees

41,123

26,910

Audit fees

35,000

29,000

Share option/warrant cost (see note 17)

26,194

84,272

Administration fees

47,000

47,000

Broker fees

41,000

38,048

Travelling expenses

16,852

34,167

Ugandan taxes (note 8)

392,425

Miscellaneous fees

72,625

40,505

Foreign currency (gain)/loss

110,131

(199,017)

Total

1,298,872

681,488

Key management remuneration, together with any share-based payments, are disclosed in note 7.

6.   Directors’ remuneration

30 Sep 2023

30 Sep 2022

GBP

GBP

Base fees

138,000

138,000

Employer NI

2,051

2,770

Bonuses

23,000

Share based payments

13,097

42,136

Total

153,148

205,906

In addition, the Directors received options which are disclosed in note 17.

7.   Key management personnel

The number of key management (excluding members the Board) employees throughout the year was as follows;

30 Sep 2023

30 Sep 2022

By the Company

2

2

By the Group

2

2

The key management employees who served during the year, together with details of their interest in the shares of the Company as at the reporting date were:

Number of shares

Value of the shares

Michael Ralston – CEO

3,225,000

£188,950

Iain Wearing – COO

408,333

£22,500

The total base salary costs recognised as an expense for the year was £150,000 (2022: £142,500). A further £90,000 (2022: £75,000) was capitalised as they are related to the Orom-Cross Graphite Project. Total share-based payments for the year were £13,097 (2022: £42,136). There was no other component of compensation.

8.   Taxation

A 19% rate of corporate income tax applies to the Company. From 1 April 2023 the main corporation tax increased from 19% to 25%, and a new 19% small profits rate of corporation tax was introduced for companies whose profits do not exceed £50,000.

Analysis of charge in the year

30 Sep 2023

30 Sep 2022

GBP

GBP

Current tax:

UK Corporation tax on loss for the year

Deferred tax

Tax on loss on ordinary activities

 

30 Sep 2023

30 Sep 2022

GBP

GBP

Loss on ordinary activities before tax

(1,397,967)

(1,085,474)

Tax charge at 19%

(265,614)

(206,240)

Tax effect of expenses not deductible for tax

24,993

34,709

Tax losses for which no deferred tax asset is recognised

240,621

171,531

Taxation charge for the year

The Parent Company has accumulated tax losses arising in the UK of £3,002,632 (2022: £2,480,826) that are available, under current legislation, to be carried forward against future profits.

Following an inspection by the Ugandan tax authorities of the tax affairs of CARU covering the period between January 2014 and December 2022, the Group has incurred a capital gains tax charge of £392,425. This 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. This amount has been included within administrative expenses, as it does not relate to the profits or gains made by the Group.

9.   Intangible and other assets

For the year ended 30 September 2023 intangible assets represent only capitalised costs associated with the Group’s exploration, evaluation and development of mineral resources.

Group

Exploration assets

Total

GBP

GBP

Balance at 30 September 2021

5,296,289

5,296,289

Additions – during the year

1,423,236

1,423,236

Impairment-Alelikongo costs

(404,533)

(404,533)

Exchange differences

300,261

300,261

Balance at 30 September 2022

6,615,253

6,615,253

Additions – during the year

1,190,977

1,190,977

Exchange differences

(201,666)

(201,666)

Balance at 30 September 2023

7,604,564

7,604,564

On 22 February 2022 the Group entered project Akelikongo which is a Nickel project with SIPA this project was to be acquired in stages. On completion of the first stage, the Board made a decision to terminate the agreement on 6 September 2022 so that they could focus on the Orom-Cross project, following the positive results from its pre-feasibility study. As a result, the costs capitalised relating to the Akelikongo project were fully impaired at that date.

Additions during the year represent exploration costs at Orom-Cross Graphite Project. Management performed a review for indications of impairment as at 30 September 2023 and concluded no impairment was required.

10. Loss per share

The calculation of the basic and diluted loss per share is based on the following data:

30 Sep 2023

30 Sep 2022

Earnings

Loss from continuing operations for the year attributable to the equity holders of the Company (£)

(1,397,967)

(1,085,474)

Number of shares

Weighted average number of Ordinary Shares for the purpose of basic and diluted earnings per share

200,041,594

160,790,224

Basic and diluted loss per share (pence)

(0.70)

(0.68)

11. Investment in subsidiary

Details of the Company’s subsidiary at 30 September 2023 are as follows:

Name of the subsidiary

Place of incorporation

Portion of ordinary shares held

Principal activity

Consolidated African Resources Limited (Formerly Blencowe Resources Uganda Limited)

Uganda

100%

Exploration

30 Sep 2023

30 Sep 2022

Investments in subsidiary

Investments at the beginning of the year as previously stated

4,892,924

3,936,953

Additions during the year

1,135,016

955,971

Total investment in subsidiary

6,027,940

4,892,924

12. Long term: non-current assets

30 Sep 2023

30 Sep 2022

Group

Company

Group

Company

GBP

GBP

GBP

GBP

Loan to subsidiaries (see below)

707,268

549,415

Less: ECL provision

(35,363)

(27,471)

Total

671,905

521,944

On 18 December 2020 the Company and its subsidiary entered into a loan agreement. This agreement replaces any previous loan agreements. The facility is for an amount up to £5,000,000 and carries a base  interest of 5% plus Bank of England interest rate per annum chargeable at year end. Following the acquisition of CARU, the loan is considered to be a long-term asset.

During the year, the Company agreed to cover some expenses for Consolidated African Resources Limited (CARU) for the value of £96,051 (2022: £88,148). The amount borrowed at the year end was £589,062 (2022: £487,081). The total interest charged for the year ended 30 September 2021 was £55,873 (2022: £24,351). The interest payable at the year end was £118,206 (2022: £62,334).

The value of the loan is subject to 12 months ECL of 5%, representing the possible default events over the next 12 months of the financial instrument.  Due to the increase of expenses paid by the Company on behalf of CARU, the loan and its interest has increased, this has led to an increase in the provision during the year.

30 Sep 2023

30 Sep 2022

Group

Company

Group

Company

GBP

GBP

GBP

GBP

Brought forward ECL provision

27,471

23,463

Provision expense

7,892

4,008

Carried forward ECL provision

35,363

27,471

13. Trade and other receivables

30 Sep 2023

30 Sep 2022

Group

Company

Group

Company

GBP

GBP

GBP

GBP

Other receivables

9,421

9,421

24,765

24,364

Amounts due from subsidiary

310,334

229,584

Prepayments

22,442

22,442

61,082

61,082

Total

31,863

342,197

85,847

315,030

Included within other receivables is amounts receivable from CARU.

Group

Company

Group

Company

GBP

GBP

GBP

GBP

Amount receivable from CARU (formerly BRUL)

326,667

241,667

Less: ECL provision

(16,333)

(12,083)

Total

310,334

229,584

In the current year the value of the receivable was subject to 12 months ECL of 5%.  The increase in the provision expense is due to the charge of management fees from the Company to its subsidiary CARU.  As of the year end, the amount that CARU (formerly BRUL) owes the Company on management services was £326,667 (2022: £241,667).

30 Sep 2023

30 Sep 2022

Group

Company

Group

Company

GBP

GBP

GBP

GBP

Brought forward ECL provision

12,083

7,084

Provision expense

4,250

4,999

Carried forward ECL provision

16,333

12,083

14. Creditors: Amounts falling due within one year

30 Sep 2023

30 Sep 2022

Group

Company

Group

Company

GBP

GBP

GBP

GBP

Trade Payables

644,585

528,708

140,018

127,577

Land Owners Liability

154,403

Ugandan taxes (note 8)

392,425

Accruals

39,159

39,159

31,954

31,953

Total

1,076,169

326,375

159,530

15. Creditors: Amounts falling after one year

The Ugandan Mining Act 2003 requires an applicant for a mining lease to obtain surface rights from landowners in the mineral area before the respective mining lease can be granted. Accordingly, when the Group acquired its subsidiary, it obtained surface rights by way of 49 years lease over the area. The liability to the landowners is to be paid in 10 instalments on a section basis as the project progresses.  The progress on each section is not limited to any time frames and is at the Group’s discretion.

On 10 September 2022 the surface rights agreement was revised and signed between the Locomo Communal Land Association and Consolidated African Resources Limited, the surface rights remain at 49 years. The liability to the land owners will be paid in 8 instalments at defined dates with the final payment due in 2035.

30 Sep 2023

30 Sep 2022

GBP

                                              GBP

Total payable as at 1 October

978,255

887,560

Change in estimate

(51,316)

Utilisation

(148,468)

Interest charged during the period

45,748

45,916

Exchange (gain)/loss

(56,620)

96,095

Total payable as at 30 September

818,915

978,255

Analysis between current and non-current liability

Payable within 12 months

154,403

Payable after 12 months

818,915

823,852

818,915

978,255

The value of the liability is measured at the present value of the contractual payments due to the Land Owners’ Association over the lease term, with the discount rate of 5%.

At the statement of financial position date, the Group undiscounted amount payable to the Land Owners is;

2023

2022

GBP

GBP

Payable within 1 years

154,403

Payable within 2-5 years

290,388

308,806

Payable after 5 years

871,164

926,418

1,161,552

1,389,627

                                  Share capital

Number of shares issued

Nominal value per share

Share capital

Share Premium

Total share capital

GBP

GBP

GBP

GBP

At 30 Sep 2021

121,929,950

901,316

5,132,081

6,033,397

Issue of Ordinary Shares

56,000,000

0.005

280,000

2,520,000

2,800,000

Share issue costs

(171,252)

(171,252)

At 30 Sep 2022

177,929,950

1,181,316

7,480,829

8,662,145

Issue of Ordinary Shares

18,750,000

0.005

93,750

656,250

750,000

Issue of Ordinary Shares

12,700,000

0.005

63,500

571,500

635,000

Share issue costs

(71,180)

(71,180)

At 30 Sep 2023

209,379,950

1,338,566

8,637,399

9,975,965

During the year ended 30 September 2023, the Company issued the following shares;

Date

Number of Ordinary Shares issued

Nominal Share Value

Share price

GBP

GBP

26 October 2022

18,750,000

0.005

0.0400

18 May 2023

12,700,000

0.005

0.0500

All of the shares issued are classed as ordinary and have similar rights attached to them. 9,375,000 warrants classified as equity were issued with the 26 October 2022 share issue, and a further 6,350,000 warrants classified as equity were issued with the 18 May 2023 share issue.

The Directors are authorised to issue 209,379,950 ordinary shares.  As at 30 September 2023 the number of shares issued and fully paid were 209,344,950 (2022: 177,594,950), 35,000 shares are unpaid at 30 September 2023 (2022: unpaid shares 335,000).

16. Share based payments

Warrants

The following warrants were issued in exchange for a good or service:

30 Sep 2023

30 Sep 2022

Warrants

Number warrants

Weighted Average exercise price

Number warrants

Weighted Average exercise price

Outstanding on 01 Oct

1,250,000

6.00p

1,250,000

6.00p

Issued during the year

Cancelled/ Exercised

(1,250,000)

Outstanding on 30 Sep

6.00p

1,250,000

6.00p

Weighted average remaining contractual Life

0.57 years

The warrants have no vesting period and have been recognised in full upon issue. If the warrants remain unexercised after a period of three years from the date of grant, they will expire. The holder may exercise the subscription right at any time within the subscription period.

The above warrants were valued using the Black Scholes valuation method. The assumptions used are detailed below. The expected future volatility has been determined by reference to the average volatility of similar entities:

Warrants

30 Sep 2022

Weighted Average Share Price

6.00p

Weighted Average Exercise Price

6.00p

Expected Volatility

56%

Expected Life

3 years

Risk-free Rate

0.23%

Expected Dividend

Nil

Weighted Average Fair Value (GBP)

32,603

Options

The following options were issued in exchange for a good or service:

30 Sep 2023

30 Sep 2022

Options

Number Options

Weighted Average exercise price

Number Options

Weighted Average exercise price

Outstanding on 01 Oct

16,000,000

6.00p

10,000,000

6.00p

Issued during the year

5,000,000

5.00p

6,000,000

6.00p

Cancelled/ Exercised

Outstanding on 30 Sept

21,000,000

5.76p

16,000,000

6.00p

Weighted average remaining contractual Life

3.23 years

3.78 years

The options issued prior to 1 October 2021 have no vesting periods and have been recognised upon issue. If the options remain unexercised after a period of five years from the date of grant, they will expire. The share options cannot be exercised if the holder has ceased employment.

The options issued in the current year and prior year include a market based vesting condition, the share options would only vest if the share price of the Company trades in excess of 10p per share for 10 consecutive days.

The above options were valued using the Black Scholes valuation method, adjusted for the probability of meeting the market-based vesting condition. The assumptions used for the options granted in the current and prior period are detailed below. The expected future volatility has been determined by reference to the average volatility of similar entities during the year:

Options

               30 Sep 2023

                        30 Sep 2022

Share Price

4.6p

4.3p

Exercise Price

5.00p

6.00p

Expected Volatility

67%

48%

Expected Life

5 years

5 years

Risk-free Rate

3.47%

0.76%

Expected Dividend

Nil

Nil

Fair Value (GBP)

26,194

84,272

Deferred Tax

No deferred tax asset has been recognised in respect of share options and warrants due to the uncertainty of the future trading profits.

17. Financial instruments

17.1   Categories of financial instruments

30 Sep 2023

30 Sep 2022

Group

Company

Group

Company

GBP

GBP

GBP

GBP

Financial assets at amortised cost

Trade and other receivables

9,421

319,755

24,765

253,948

Cash and cash equivalents

129,853

129,853

346,994

346,994

Financial liabilities at amortised cost

Trade and other payables

1,076,169

567,867

326,375

159,530

Surface liability

818,915

978,255

17.2   Financial risk management objectives and policies

The Company’s major financial instruments include cash and cash equivalents, trade and other payables and  other receivables. The fair value of the Groups financial instruments are equal to their carrying value. Details of these financial instruments are disclosed in respective notes. The risks associated with these financial instruments, and the policies on how to mitigate these risks are set out below. The management manages and monitors these exposures to ensure appropriate measures are implemented in a timely and effective manner.

Currency risk

The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the United States Dollar (“USD”) and Ugandan shilling (“UGX”).  Foreign exchange risk arises from recognised monetary assets and liabilities.  The Group also exposes to currency exposure, BRUL expenses are paid in both USD and UGX, with the amount payable to the land owners denominated in UGX.

The table below summaries the financial assets and liabilities denominated in foreign currencies.

30 Sep 2023

30 Sep 2022

USD

UGX

USD

UGX

Financial Assets

891

1,534

Financial Liabilities

41,827

818,915

35,509

978,256

With all other variables held constant, the effect on profit and loss had the functional currency of the Group weakened or strengthened against USD/UGX by 5% at the year end results in a £29,532 (2022: £28,709) change in value.

Credit risk

Credit risk arises on cash balances. The amount of credit risk is equal to the amounts stated in the statements of financial position for each of the assets (notes 12 & 13).

The Group’s policy to manage this risk is to deal with banks that are regulated entities.  The Group’s principal banker, Barclays Bank PLC, is regulated by the United Kingdom Financial Services Authority, and has a credit rating of A1 (2022: A1).

Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit. The Company aims to maintain flexibility in funding.

The maturity of the Company’s financial liabilities at the statement of financial position date, based on the contracted undiscounted payments is disclosed in notes 14, falls within one year and payable on demand.

Capital risk

The Company defines capital as the total equity of the Company. The Company’s objectives when managing capital are to safeguard the Company’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.

18. Related party transactions

Details of Directors’ remuneration are disclosed in note 6.

Sam Quinn is a director and shareholder of the Company and a Director of Lionshead Consultants Limited.  During the year, Lionshead Consultants Limited charged consultancy fees of £36,000 (2022: £24,000).

19. Events after the reporting date

On 10 October 2023, the Company announced that it had received its first US$1 million mobilisation tranche payment from the Development Finance Corporation. On 25 January 2024 an additional US$1 million tranche was received from the Development Finance Corporation and the total received now is US$2 million. This represents 40% of the full US$5 million DFC grant for the Definitive Feasibility Study costs.

#KAV Kavango Resources PLC – KCB – Airborne geophysical survey commences

Kavango Resources plc (LSE:KAV), the Southern Africa focussed metals exploration company, is pleased to announce the commencement of an airborne geophysical survey on its Kalahari Copper Belt (“KCB”) project in Botswana.

The Company has signed a contract with South Africa-based New Resolution Geophysics (“NRG”) for Time Domain Electromagnetic (“TDEM”), Magnetic, and Gravity surveys combined on one helicopter platform (“the NRG Survey”).

The NRG Survey will consist of 2,374-line kms at a line spacing of 500m x 5,000m across Kavango’s Block 1A and Block 1B Prospecting Licences (“PLs”)

The work expands on airborne geophysical surveying already completed by ENRG Elements (ASX:ENRG) (“ENRG”) on PL203/2016 and PL127/2017, two adjacent PLs recently acquired by Kavango (announced >>> 16 November 2023).

Figure 1: NRG’s planned survey lines across Kavango’s Block 1A and Block 1B licences and airborne survey data covering the PLs acquired from ENRG

Ben Turney, Chief Executive Officer of Kavango Resources, commented:

Kavango is targeting the discovery of large-scale copper/silver targets in the Kalahari Copper Belt (KCB) in Botswana.

We recently acquired additional exploration licences from ENRG Elements to complete a large contiguous land package from the town of Ghanzi to the Namibian border. Our interpretation of ENRG’s existing survey data for Prospecting Licences 203/2016 and 127/2017 supports our working theory that this area is prospective for copper/silver. We believe this potential could extend to Kavango’s other licence holdings, which have designated as Blocks 1A and 1B.

As part of our “levelling up” strategy in the KCB, we are compiling a consistent data set for all the ground we control. NRG’s airborne geophysical survey will provide us with some of the final exploration data we need ahead of defining drill targets for next year’s drill campaign.

Our recent work has confirmed physical indicators of a copper mineralising system within our ground, combined with encouraging geophysical anomalies.

Our goal in reprocessing ENRG’s existing data and combining it with the data from the airborne surveys we will fly over Blocks 1A and 1B will be to increase our understanding of the region’s mineralised potential. We will also investigate the interpreted sub-basin that could be a significant control for copper/silver deposits.

Further details

The NRG Survey will be conducted over five PLs that make up Kavango’s Block 1A (PL046/2020, PL049/2020, PL052/2020, PL053/2020) and Block 1B (PL205/2016) licence areas. The licences are located southwest of the town of Ghanzi and adjacent to PL203/2016 and PL127/2017, two of the KCB PLs Kavango recently acquired from ENRG.

NRG is expected to commence its airborne geophysics survey on 4 December 2023. The survey is expected to take two weeks to complete, with the final data processing and delivery of products anticipated for Q1 2024.

Program objectives

Kavango is currently re-processing data from airborne geophysical surveys already completed by ENRG on PL203/2016 and PL127/2017.

The Company will combine this re-processed data with data from the new NRG surveys to test its working theory that the copper/silver prospective geological and geophysical features, which it interpreted from ENRG’s existing airborne geophysics survey data, extend onto Kavango’s Block 1A and Block 1B licences. Kavango’s geologists and geophysicists believe this could be indicative of a regional copper mineralizing system.

Kavango’s geologists wish to examine whether the stratigraphy and lithology they have begun to map on the former ENRG PLs extend on to these Blocks. They believe that ENRG’s existing data conforms to sequences in the lower D’Kar Formation seen across other parts of the KCB.

The models in Figures 2 and 3 below depict the type of fold geometry and structural trap-sites Kavango believes to underlie areas of Block 1A and 1B.

Figure 2 is a modified version of the fold geometry, showing a “preserved” as opposed to “un-roofed” dome, as well as associated mineralisation present in the fold closure at Khoemacau’s North East Fold (“NEF”) deposit on the nearby Banana Zone. Figure 3 is a schematic cross-section showing both the shear-hosted mineralisation and dilational vein-hosted mineralisation present in Sandfire Resources’ (ASX:SFR) A4 deposit.

Kavango believes there may be scope for either or both models to be present and is optimistic the NRG survey will identify these for further ground geophysics and future drill targeting.

Figure 2 – Regional to deposit scale geologic controls on copper silver mineralisation in the KCB – Wes Hall et al, SEG, Special Publication, no 21, pp207-236

Figure 3 – Schematic cross-section showing high-grade intersection in drill hole MO-A4-003D, interpreted geology, and the mineralisation styles across Sandfire’s A4 deposit

The magnetic component of the NRG Survey will map the structure and lithology of Block 1A and Block 1B. It is anticipated that the EM component of the NRG Survey will highlight prospective subtle conductors within the D’Kar Formation and help identify structural trap sites linked to folds, faults, and shears within Block 1A and Block 1B.

The gravity component of the NRG Survey will seek to identify whether the sub-basin identified in ENRG’s data extends into Kavango’s Block 1A. Kavango believes the margins of this sub-basin could provide priority targets for trap site development and deposit formation.

Kavango will interpret these airborne geophysical data with the goal of identifying target areas for ground geophysical follow-up, which will then lead to drill target identification.

Further information in respect of Kavango and its business interests is provided on the Company’s website at www.kavangoresources.com and on Twitter at #KAV.

For further information please contact:

Kavango Resources plc

Ben Turney

+46 7697 406 06

First Equity (Broker)

Jason Robertson

+44 207 374 2212

Kavango Competent Person Statement

The technical information contained in this announcement pertaining to geophysics have been read and approved by Mr. Jeremy S. Brett, M.Sc., P.Geo., Senior Geophysical Consultant, Jeremy S. Brett International Consulting Ltd. in Toronto, Canada.  Mr. Brett is a member of the Professional Geoscientists of Ontario, the Prospectors and Developers Association of Canada, the Canadian Exploration Geophysical Society, and the Society of Economic Geologists.  Mr. Brett has sufficient experience that is relevant to geophysics applied the styles of mineralisation and types of deposits under consideration to act as a Qualified Person as defined under the Canadian National Instrument 43-101, Standards of Disclosure for Mineral Projects.

#KAV Kavango Resources PLC – Ditau: 470m Strike Extension to Mineralised BIF

Kavango Resources (LSE:KAV) (“Kavango”), the Southern Africa focussed metals exploration company, is pleased to announce that it has confirmed an extension of at least 470m to the Mineralised Banded Iron Formation (the “Mineralised BIF”) intercepted at Target i10 with Hole DITDD004 in the Ditau Project, Botswana.

Kavango has now completed an initial review of drill core and logs from an exploration hole, drilled in 2021, 470m to the NW of DITDD004. This hole (Hole X077-H002, “X077”) was drilled by a company that held an overlapping diamond prospecting licence to Kavango’s Ditau metal prospecting licences.

X077 appears to have intercepted the same Mineralised BIF as DITDD004.

Having already confirmed the Mineralised BIF is >100m thick in Hole DITDD004 (announced >>> 06 March 2023), Kavango is increasingly encouraged that Target i10 could represent a large-scale, continuous system that is prospective for lode gold mineralisation.

A picture containing text, indoor Description automatically generated

Figure 1: Cross-section viewed west, showing Hole DITDD004 and Hole DITDD003, drilled by Kavango, and Hole X077, drilled by the Third Party. Zones of interpreted mineralised BIF are shown in red hatch at the end of Hole DITDD004 and Hole X077, indicating a broader mineralised BIF system extending for at least 470m between holes.

Ben Turney, Chief Executive Officer of Kavango Resources, commented:

The initial results of our review of neighbouring exploration holes to DITDD004 are highly encouraging. We have been able to establish at least a 470m strike extent of the Banded Iron Formation directly from DITDD004 to Hole X077, bounded by the i10 magnetic anomaly. Both holes show evidence of the same mineralisation style. We’ve achieved this without any further drilling.

Given that both DITDD004 and X077 remain open at depth in the Mineralised BIF, the large-scale promise of this system is strongly underlined. In the context of Dr. Mumin’s view of the lode gold potential here, this is very positive.

We are now in the process of cutting core to send for assay testing and look forward to receiving the results.

OVERVIEW

·    A third party completed an independent diamond core drilling programme in 2021 targeting some of the same geophysical anomalies Kavango has identified at Ditau.

o The company held a diamond prospecting licence that overlapped Kavango’s Ditau metals exploration prospecting licences.

·    Following Kavango’s recent identification of lode gold potential from Hole DITDD004, the Company approached the third party to request permission to review core from holes drilled in the vicinity of its i10 Target (“i10”) at Ditau.

o Kavango drilled Hole DITDD004 to intercept Target i10 in April 2022.

o That hole encountered a 100m thick mineralised “Zone of Interest” from a depth of 293m to 393m. This zone remains open at depth at the End of Hole.

o DITDD004 contained anomalous gold and copper values.

o Subsequent analysis by Dr. Hamid Mumin concluded that the “Zone of Interest” appears to represent a high-potential BIF-hosted lode gold system.

o Based on the proximity of Hole X077 to Target i10, Kavango was keen to see if the same BIF was intersected during drilling.

·    Kavango has performed initial analysis on core from Hole X077.

o Hole X077 lies 470 NW of DITDD004 and was drilled to a depth of 189m.

o Hole X077 was abandoned after it was confirmed the target was not a kimberlite and therefore had no potential to host diamonds.

o Hole X077 remained open for mineralisation at the End of Hole.

·    Based on its initial review of drill core, Kavango concludes that Hole X077 intercepted the same BIF as DITDD004, with clear visual evidence of a mineralising system (‘mineralisation’), in the form of pyrite, chalcopyrite, and carbonate alteration. This strongly supports that the Mineralised BIF is continuous for at least 470m. As with Hole DITDD004, Hole X077 remains open in mineralisation at depth.

·    Kavango will now complete more thorough analysis of core from Hole X077 and one other exploration hole drilled by the third party in the vicinity.

Kavango Resources plc

Ben Turney

bturney@kavangoresources.com

First Equity (Broker)

+44 207 374 2212

Jason Robertson

Kavango Competent Person Statement

The technical information contained in this announcement pertaining to geology and exploration have been read and approved by Brett Grist BSc(Hons) FAusIMM (CP).  Mr Grist is a Fellow of the Australasian Institute of Mining and Metallurgy with Chartered Professional status.  Mr Grist has sufficient experience that is relevant to the exploration programmes and geology of the main styles of mineralisation and deposit types under consideration to act as a Qualified Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’

#POW Power Metal Resources PLC – Merger Agreement – Wilan Project, South Australia

Power Metal Resources PLC (LON:POW), the London listed exploration company seeking large-scale metal discoveries across its global project portfolio announces a merger of its Wilan Project (“Wilan” or the “Project”), located in South Australia, with a number of other Australian exploration interests (the “Merger”). The Merger will create a new Australian exploration company and provide Power Metal with exposure to the world class Mount Isa copper belt located within Queensland, Australia

Paul Johnson, Chief Executive Officer of Power Metal Resources PLC commented:

“Power Metal recognises the forward dynamic of copper as a commodity and the Merger will provide the Company with an immediate equity exposure to a strategic portfolio of exploration interests in the Mount Isa copper belt of Queensland, Australia.

The Queensland Projects are targeting major copper discoveries within a world class copper belt and are situated close to ground held by a number of substantial mining companies.”

 

HIGHLIGHTS

·The Wilan Project is comprised of two exploration licences (“ELs”) which cover a total area of 1,994km2, held within Power Metal Resources Australia Pty Ltd (“POW Australia”), which is a wholly-owned subsidiary of Power Metal Resources PLC.

·A heads-of-terms agreement (the “Agreement”) has been signed to combine POW Australia (100% owner of the Wilan Project) with two companies holding a 100% interest in a portfolio of two granted exploration licences and four licence applications covering 1,507km2 in the Mount Isa copper belt of Queensland, Australia (the “Queensland Projects”).

·The Queensland Projects are held by two private Australian companies, RAB Resources Pty Ltd (“RAB Resources” or “RAB”) and New Horizon Metals Pty Ltd (“New Horizon” or “NHM”).

·A new company (“NewCo”) will acquire outright the shares in POW Australia, RAB Resources and New Horizon (the “Merger Parties”). Following the Merger Power Metal Resources plc will hold a 20% interest in NewCo.

·POW Australia will be renamed Wilan Resources Pty Ltd shortly after completion of the Merger, enabling Power to retain the POW Australia name.

·Following the Merger, NewCo will then commence the process for a planned listing targeting Q2 2023 or the acquisition of NewCo and its interests from an existing listed vehicle, subject to agreement of all the Merger parties.

·Further information to follow with regard to the Merger progress & structuring, planned listing and project level developments across the combined project portfolio.

 

PROJECT MAPS

Project maps covering the Queensland Projects and Wilan Project licence footprints are provided below and will be uploaded to the Power Metal website in due course.

Fig. 1: Queensland Licence Footprint

Fig. 2 – Wilan Project Licence Footprint and Surrounding Area

 

TRANSACTION TERMS

 

NewCo will acquire 100% of the share capital of New Horizon, RAB Resources and POW Australia and then hold the Queensland projects and the Wilan Project.

 

The NewCo ownership on completion of the Merger and grant of the New Horizon licence applications below is outlined in the table below.

 

Company Name

% of NewCo Issued Share Capital

New Horizon

40%

RAB Resources

40%

POW Australia

20%

Total

100%

The Merger Parties will appoint the board of NewCo and will each have a right to nominate at least one board member.

Note: 20% of the NewCo shares will be issued to New Horizon immediately, with the balancing 20% issued on the grant of the Copper Creek and Bortala licence applications.  Should an acquisition of NewCo and/or its interests by an existing listed vehicle complete prior to any planned listing (which may only proceed with the agreement of all the Merger parties), then the remaining 20% of NewCo shares would be automatically issued to New Horizon on completion.

PROJECT LICENCE OVERVIEW

RAB interests include:

Gregory River – East and West

Tenures Exploration for Minerals (EPM’s) 28642 and 28643, the Gregory River (East and West) Project, are exploration licences in application by RAB Resources covering 169.6km2 and 220.8km2, respectively.

Gregory River East and West tenements are prospective for copper, gold, lead, zinc, and cobalt.

Fiery Creek

Tenure EPM 27879 the Fiery Creek Project is a granted exploration licence held outright by RAB Resources covering 320km2 with an expiry date of 16/03/2027.  Fiery Creek is believed to be prospective for copper, gold, lead, zinc, and cobalt.

Dynamite Creek

Tenure EPM 27870 the Dynamite Creek Project is a granted exploration licence held outright by RAB Resources covering 288km2 with an expiry date of 16/03/2027.  Dynamite Creek believed to be is prospective for copper, gold, and cobalt.

NHM interests include:

Copper Creek

Tenure EPM 28272, the Copper Creek Project is an exploration licence in application by New Horizon covering 195.2km2 with a lodgement date of 31/1/2022.  Copper Creek is prospective for copper, cobalt, silver, uranium, and rare earth elements.

Bortala

Tenure EPM 28271, the Bortala Project is an exploration licence in application by New Horizon covering 313.6km2 with a lodgement date of 31/1/2022.  Bortala is prospective for copper, cobalt, silver, lead, zinc, uranium, and rare earth elements.

POW Australia interests include:

Wilan Project

The Wilan Project includes two granted exploration licences (“ELs”) including EL6819 and EL6870.

EL6819, is a granted exploration licence held outright by POW Australia covering 999km2 with an expiry date of 23/08/2028.

A desktop technical review completed over EL6819 identified an approximately 4 x 6km coincident magnetic and gravity geophysical anomaly located in the southeastern part of the Project. Such coincident geophysical anomalies have been noted as potential targets for iron oxide copper-gold mineralisation (“IOCG”) elsewhere within the highly prospective Gawler Craton.

The Wilan Project also includes recently granted EL6870 which covers an area of 995km2 and lies to the northwest of EL6819 which carries an expiry date of 10/11/2028.

Exploration targets within EL6870 include potential surficial lacustrine uranium (U) and vanadium (V) mineralisation located within the western part of the Project. The lacustrine targets were identified by recently completed radiometric and hyperspectral analysis. In addition, within the northern part of EL6870, multiple kimberlitic indicator minerals have been identified by a previous operator, including occurrences of pyrope, kimberlitic ilmenite and picroilmenite.

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

For further information please visit https://www.powermetalresources.com/ or contact:

Power Metal Resources plc

Paul Johnson (Chief Executive Officer)

+44 (0) 7766 465 617

SP Angel Corporate Finance (Nomad and Joint Broker)

Ewan Leggat/Charlie Bouverat

+44 (0) 20 3470 0470

SI Capital Limited (Joint Broker)

Nick Emerson                                                                                                           

+44 (0) 1483 413 500

First Equity Limited (Joint Broker)

David Cockbill/Jason Robertson

+44 (0) 20 7330 1883

 

 

#POW Power Metal Resources PLC – Licence Grant Australia – Potential IOCG Target

Power Metal Resources PLC (LON:POW), the London listed exploration company seeking large-scale metal discoveries across its global project portfolio announces an update from its wholly owned Australian subsidiary Power Metal Resources Australia Pty Ltd (“POW Australia”).

 

HIGHLIGHTS:

Licence Grant

POW Australia has received confirmation of the grant of exploration licence application (“ELA”) 2021-000163, covering 999km2 of ground in the Anna Creek area of South Australia.

The ELA has now converted to an exploration licence numbered EL6819 and carries an initial term of 6 years ending 24 August 2028, subject to a minimum exploration spend of A$100,000 (Circa £59,000) prior to 23 August 2024.

Recognising the grant of EL6819, the property has been named the Wilan Project (“Wilan” or the “Project”).

Potential IOCG Target Identified

A desktop technical review completed over EL6819 has identified an under-cover, approximately 4x6km coincident magnetic and gravity geophysical anomaly (the “Target”) located in the southeast of the Project.

 

-The existence of a coincident magnetic/gravity anomaly is considered highly significant given the location of the licence within the Gawler Craton1, which constitutes a major Iron Oxide-Copper-Gold (“IOCG”) deposit province.  IOCG deposits consist of important and highly valuable concentrations of copper, gold and uranium mineralisation2, the most famous example in the Gawler Craton is the Olympic Dam Mine3 (“Olympic Dam”). Most IOCG deposits were initially discovered through regional magnetic and gravity geophysics targeting.

Based on geophysics interpretation the Target is hosted within cratonic basement below 200-300m of younger cover sediments – this part of the Project has never been drill tested.

Olympic Dam is located approximately 150km south of the Property and owned and operated by BHP Group Limited and is the largest known IOCG deposit in the world and an important source of copper-gold and uranium. Notably, the discovery of Olympic Dam was made by drilling a blind coincidental magnetic & gravity anomaly.4

Next Steps

Power Metal are currently planning for expedited field exploration which is expected to include high-resolution gravity and magnetic surveys over the Target.

The Wilan Project also includes ongoing licence application ELA 2021-000162, covering an area of 995km2 and which lies contiguous and to the northwest of EL6819.

The Company is working through the balancing administration work to secure the grant of ELA 2021-000162, where our technical review to date has identified multiple exploration targets.

A map highlighting the location of the Wilan Project, the newly granted licence, as well as the relative location of the new IOCG target can be found at the link below:

https://www.powermetalresources.com/wilan-copper-gold-licence-map/

 

Paul Johnson, Chief Executive Officer of Power Metal Resources commented:

As mentioned previously, Power Metal is resolutely focused on the imminent drill programme at the Molopo Farms Complex project located in Botswana, and our team are working hard there to maintain the momentum.

However, the grant of the first Wilan Project exploration licence (EL6819) represents a potentially significant milestone, as ongoing desktop work has identified a large Target located wholly within the newly granted licence.

There is more work to do, clearly, and we are early stage here, however all projects of substance start early stage and the Wilan Project is off to a great start.

 

BACKGROUND

On 27 October 2021 Power Metal announced the submission of two licence applications in South Australia covering a total of 1,994km2 and targeting Olympic Dam style mineralisation. 

A link to this announcement is provided below:

https://www.londonstockexchange.com/news-article/POW/new-australia-copper-gold-opportunity/15189456

NOTES & REFERENCES

1:                    Gawler Craton:  The Gawler Craton covers approximately 440,000 km2 of central South Australia and constitutes a major IOCG deposit province and a major source of Australia’s iron, gold, copper and uranium. A craton is an old and stable part of the continental crust that has survived the merging and splitting of continents and supercontinents for at least 500 million, to over 2 billion years. Cratons are generally found in the interiors of continents and are characteristically composed of ancient crystalline basement crust of lightweight felsic igneous rock such as granite. They have a thick crust and deep roots that extend into the mantle beneath to depths of 200 km.

 

2:                    Iron Oxide Copper Gold (“IOCG”) Deposit: IOCG ore bodies range from around 10 million to >4,000 million tonnes of contained ore, and have a grade of between 0.2% and 5% copper, with gold contents ranging from 0.1 to 1.41 grams per tonne. Source: Zhu, Zhimin (2016-01-01). “Gold in iron oxide copper-gold deposits”. Ore Geology Reviews. 72: 37-42. doi:10.1016/j.oregeorev.2015.07.001. ISSN 0169-1368.

 

3:                    The Olympic Dam mine is a large poly-metallic underground mine located in South Australia, 550 km NNW of Adelaide. It is the fourth largest copper deposit and the largest known single deposit of uranium in the world. Copper is the largest contributor to total revenue, accounting for approximately 70% of the mine’s revenue, with the remaining 25% from uranium, and around 5% from silver and gold.[1] BHP has owned and operated the mine since 2005. The mine was previously owned by Western Mining Corporation. Source: Wikipedia

 

2:                    Austin. J., Foss C., (2012) Rich, attractive and extremely dense: A geophysical review of Australian IOCGs, ASEG Extended Abstracts, 2012:1, 1-4, DOI: 10.1071/ASEG2012ab278. https://www.tandfonline.com/doi/pdf/10.1071/ASEG2012ab278 

 

COMPETENT PERSON STATEMENT

 

The technical information contained in this disclosure has been read and approved by Mr Nick O’Reilly (MSc, DIC, MIMMM, MAusIMM, FGS), who is a qualified geologist and acts as the Competent Person under the AIM Rules – Note for Mining and Oil & Gas Companies. Mr O’Reilly is a Principal consultant working for Mining Analyst Consulting Ltd which has been retained by Power Metal Resources PLC to provide technical support.

 

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

For further information please visit https://www.powermetalresources.com/ or contact:

Power Metal Resources plc

Paul Johnson (Chief Executive Officer)

+44 (0) 7766 465 617

SP Angel Corporate Finance (Nomad and Joint Broker)

Ewan Leggat/Charlie Bouverat

+44 (0) 20 3470 0470

SI Capital Limited (Joint Broker)

Nick Emerson                                                                                                           

+44 (0) 1483 413 500

First Equity Limited (Joint Broker)

David Cockbill/Jason Robertson

+44 (0) 20 7330 1883

 

 

#POW Power Metal Resources – FDR Australia – Grant of Wallal Licences

powPower Metal Resources plc (LON:POW), the London listed exploration company seeking large-scale metal discoveries across its global project portfolio, announces an update from the Wallal Project (the “Project”) located in the prolific Paterson Region of Western Australia where the Company is targeting major gold-copper discoveries.

 

 

 

Power Metal now confirms that two licence applications have now been granted.  The granted licences are:

 

–  E45/5816 – Wallal Main

–  E45/5880 – Wallal West 2

The Wallal Main licence is host to two magnetic bullseye anomalies (Eastern Anomaly and Border Anomaly) which are currently the highest priority exploration targets for a planned future deep drilling campaign.  The third licence application forming the Wallal Project, Wallal West 1 (E45/5853) is expected to be granted shortly. This licence application includes the third magnetic bullseye Western Anomaly.

The grant of the Wallal Main licence was a key event which now allows for completion of the acquisition of First Development Resources Pty Ltd (FDR Australia) by First Development Resources Limited (FDR UK) in which, post acquisition, Power Metal will hold a 75% interest.

Power Metal will now move to undertake transaction completion and a further announcement will be made in this regard shortly. In addition, preparations to seek a listing of FDR UK in the London capital markets will now accelerate.

Paul Johnson, Chief Executive Officer of Power Metal Resources plc commented:

“With the grant of licences announced today, one of our most exciting projects takes a great leap forward. Power Metal shareholders now have exposure to a major gold-copper exploration project in the Paterson region of Western Australia.

We are seeking major gold-copper discoveries and I would ask investors to review our recent exploration update linked below, to see the potential the Wallal Project offers.”

Note:

The grant of Wallal Main was confirmed this morning and the quarterly report we have prepared for release today will need to be amended accordingly with this important news and its significant impact on our business plans.  As a result the Power Metal Quarterly Business Operational Update will now be released on 1 October 2021.”

BACKGROUND

The Paterson projects are held by First Development Resources Pty Ltd (FDR Australia) and include Wallal Project (Wallal Main-E45/5816 (granted), Wallal West 1-E45/5853 (application) and Wallal West 2 – E45/5880 (granted), Braeside West Project (one licence application) and the Ripon Hills Project (one granted licence).

On 28 April 2021 Power Metal announced a conditional acquisition of FDR Australia and this may be viewed through the following link:

https://www.londonstockexchange.com/news-article/POW/conditional-australia-copper-gold-acquisition/14955517

The latest exploration update released by the Company on 13 September 2021 may be viewed through the following link:

https://www.londonstockexchange.com/news-article/POW/fdr-australia-paterson-region-exploration-update/15132674

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

For further information please visit https://www.powermetalresources.com/ or contact:

Power Metal Resources plc

Paul Johnson (Chief Executive Officer)

+44 (0) 7766 465 617

SP Angel Corporate Finance (Nomad and Joint Broker)

Ewan Leggat/Charlie Bouverat

+44 (0) 20 3470 0470

SI Capital Limited (Joint Broker)

Nick Emerson                                                                                                           

+44 (0) 1483 413 500

First Equity Limited (Joint Broker)

David Cockbill/Jason Robertson

+44 (0) 20 7330 1883

I would like to receive Brand Communications updates and news...
Free Stock Updates & News
I agree to have my personal information transfered to MailChimp ( more information )
Join over 3.000 visitors who are receiving our newsletter and learn how to optimize your blog for search engines, find free traffic, and monetize your website.
We hate spam. Your email address will not be sold or shared with anyone else.