TIDMTTAU
30 June 2020
TECTONIC GOLD PLC
("Tectonic Gold" or the "Company")
Final Results to 30 June 2019
CHAIRMAN'S STATEMENT
Dear Shareholders,
I am pleased to present the final results for Tectonic Gold Plc for the 12
months to 30 June 2019. This marks the first year of the Company as it
completed a reverse takeover transaction ("RTO") with Australian based
Intrusive Related Gold System (IRGS) specialist explorer Signature Gold Ltd and
was admitted to trading on the AQUIS Stock Exchange (Formally NEX) in London
on 26 June 2018.
Following admission to the AQUIS Stock Exchange (Formerly NEX) and the
associated capital raise, the Company extended its gold exploration technology
development and conducted field activities at its Specimen Hill project area in
Queensland, Australia. This included a significant drilling program targeting
extensions to the Specimen Hill discovery. Drilling was completed in the
December quarter of 2018 and assaying conducted in the January quarter. The
drilling confirmed our preliminary technical work and targeting, with
mineralisation intersected in each of the ten holes drilled. Further analysis
confirmed a range of technical assumptions and identified the source of the
mineralising system, which remains highly prospective for high grade gold.
With market sentiment turned against junior exploration companies creating a
difficulty to raise further exploration funds, the Company looked to secure a
production ready project to generate cash flows and avoid further diluting
shareholders. An opportunity was identified to contract mine diamonds on the
South African Government's Alexkor mine site on the west coast of South Africa.
The Company spent some months evaluating this opportunity, including conducting
extensive trial mining and processing trials. During this evaluation, the
Company identified that the diamond bearing gravels also hosted high grade
heavy mineral sands in certain areas and has now expanded this project to
include both diamonds and mineral sands. It is the intention of the Company at
this stage and subject to mining permits approvals, to move forward in
partnership with a strategic investor in the project to bring this into
production. It is hoped that this will in turn fully fund the Company's gold
exploration in the short term and allow further exploration of the Queensland
gold assets.
At the time of this report we are awaiting permit approvals for mineral sands.
We can then invite partners into the project and at that stage plan to move the
Group to a more liquid exchange.
On 11 March 2020, the World Health Organisation ("WHO") declared the
Coronavirus disease 2019 (COVID-19) a pandemic. The pandemic has adversely
affected the global economy, including an increase in unemployment, decrease in
consumer demand, interruptions in supply chains, and tight liquidity and credit
conditions. Consequently, governments around the world have announced monetary
and fiscal stimulus packages to minimise the adverse economic impact. However,
the COVID-19 situation is still evolving, and its full economic impact remains
uncertain.
The Company has several assets where the value may be impacted by COVID-19. At
the date these financial statements were approved by the Directors the extent
of the impact COVID-19 on the Company's assets cannot be reasonably estimated
at this time.
The pandemic has impacted the Company's operations with Government mandated
bans on mass gatherings and social distancing measures resulting in disruption
to the Company's operations, this disruption is expected to negatively impact
the ability for the Company to conduct drilling and its parent entity's ability
to raise capital, refer Going Concern Note 2.
The Directors and management are continually monitoring and managing the
Company's operations closely in response to COVID-19 however the extent of the
impact COVID-19 may have on the Company's future liquidity, financial
performance and position and operations is uncertain and cannot be reasonably
estimated at the date these financial statements were issued.
Thank you to all of our supportive shareholders and stakeholders who have
worked with us, as we move forward with both our gold projects and our exciting
South African project.
Yours sincerely
Bruce Fulton
Chairman
MANAGING DIRECTOR'S STATEMENT
During the year to June 2019 the Company extended its successful technology
development and gold exploration programs in Australia. The focus of the
technical team was a ten hole drilling program testing structural targets at
the flagship Specimen Hill project site.
The drilling program had two objectives; further validation of the Company's
emerging Intrusive Related Gold System exploration methodology and extension of
the known mineralised zones at Specimen Hill. On both counts the program was
successful, intersecting further mineralisation in each of the ten drill holes
with high grade gold intersected at gold grades up to 35.2g/t Au and silver
grades of up to 37 g/t Ag.
Targeting for the drilling campaign was done using an Australian first
deployment of the DIAS 3DIP survey system that has been adapted from technology
used in deep targeting in the oil and gas exploration industry. Drill core
samples were subjected to extensive analysis including Laser Ablation
Inductively Coupled Mass Spectrometry (LA-ICP-MS) that was used to confirm the
genetic link of the known gold near the surface to the feeder system we have
been testing at 500 meters and below. The results of the campaign are
confirmation of a large gold bearing system that was mineralized during the
same time period as some of the major deposits in the region. By tracing the
historic flow of mineralized fluids in the system from the drill cores, we have
been able to identify the intrusive feature that is the source of the segment
and the potential high-grade core of the mineralization giving us a high
quality target for follow up drill testing.
In order to generate funding and avoid the need for rounds of capital raising,
the Company has looked at a number of producing projects. The most interesting
is a combination of diamonds and heavy mineral sands on the west coast of South
Africa. Diamonds have been recovered from the beach terraces and offshore along
this stretch of coast for over one hundred years. De Beers has historically had
major operations in the region spanning both South Africa and its northern
neighbour, Namibia. Due to security considerations in the diamond industry,
prospecting for other commodities has generally been prohibited. Tectonic has
spent some time on the ground in the region evaluating the opportunity of
contract mining for diamonds on the South African Government's diamond mine at
Alexander Bay and during this process identified areas with both diamond and
heavy mineral sand ores. Testing has confirmed that the mineral sands are high
grade and contain an attractive mix of minerals including zircon, ilmenite and
monazite. The Company is now broadening the diamond mining project and has
submitted an application to mine heavy mineral sands in conjunction with the
diamonds mining. The Company is negotiating with a prospective partner to
divest a majority stake in the combined diamond and heavy mineral sand
concentrate project on condition that it is funded into production. The Company
will retain a non-diluting 10% interest in the projects and it is the Company's
intention to utilise cash flows from this to fund further work on the gold
assets. At this stage the Company has secured initial diamond mining rights and
has mineral sand mining permits under application.
The Company extended its Research and Development program during 2019 and
received a refund under the Australian Tax Office Research and Development Tax
Incentive of $279,789.
The Company sold its holding in Tirupati Graphite Plc on 4 November 2019 for
which it received GBP86,844.
The Company sold its 2.5% royalty interest in the Bass Metals Ltd graphite mine
in Madagascar. Consideration for this was a CAD$250,000 convertible note which
has been converted into 98,039 ordinary shares in TSX-V listed Vox Royalty
Corp.
Finally, it remains for me to thank my fellow directors, management and
advisers for their effort during the year as we continue to build opportunities
for our shareholders.
Brett Boynton, CFA
Managing Director
STRATEGIC REPORT
The Directors present their strategic report for Tectonic Gold Plc ("Tectonic
Gold" and/or "the Company") and its controlled entities ("the Group") for the
year ended 30 June 2019 ("the reporting period").
REVIEW OF THE BUSINESS
Following the admission to trading on the AQUIS Stock Exchange (formerly NEX
Growth Market) on 26 June 2018, the Company focused efforts on developing its
Intrusive Related Gold System exploration technology and methodology and
exploring its Queensland gold assets.
This was done with assistance from the Australian Federal Government and a
number of Australian research organisations.
The Company holds a portfolio of Intrusive Related Gold System exploration
targets in Queensland Australia which it is testing and refining the
exploration methodology on and plans to monetise through divestment or joint
venturing into development.
The Company has a contract to mine diamonds on the South African Government's
Alexkor diamond mine.
The Company has made an application for a mining permit to mine (and process)
heavy mineral sands coincident with the diamonds at the Alexkor diamond mining
operation.
For further details see the Managing Director's Statement on Page 5.
RESULTS AND COMPARITIVE INFORMATION
The Group incurred a loss after tax for the reporting period of GBP824,874 (2018:
GBP3,277,549 loss as restated).
On 17 April 2019, the Company established Tectonic Gold South Africa Pty Ltd
which has since changed its name to Deep Blue Minerals Pty Ltd. The financial
information for the reporting period includes that of Tectonic Gold Plc and its
controlled entities for the whole reporting period and that of Deep Blue
Minerals Pty Ltd for the reporting period since 17 April 2019.
Comparative Information
On 25 June 2018, Tectonic Gold (the legal parent) acquired Signature Gold Ltd
(Signature Gold). Although the transaction was not a business combination, the
acquisition has been accounted for as an asset acquisition with reference to
the guidance for reverse acquisition in IFRS 3 Business Combinations and IFRS 2
Share-based Payment.
In preparing the Financial Statements, Signature Gold has been treated as the
"accounting parent" and therefore the financial information for the comparative
period for the Group includes that of Signature Gold and that of Tectonic Gold
for the period since 25 June 2018.
In 2018, the Company's Accounting Reference Date was extended to end on 30 June
2018. Accordingly, as required by Companies House, the financial statements for
the comparative period represent the period 1 January 2017 to 30 June 2018.
Prior Year Adjustments
The 2018 balances have been restated in the 2019 financial statements as PKF
Littlejohn LLP found an error in the accounting treatment for the reverse
acquisition during the 2019 audit. The 2018 balances were also restated to
account for certain costs amounting to GBP45,250 that were not accrued for at the
time and the fair value of options that were issued on 25 June 2018 which
amount to GBP68,900. Further details are included in note 5 to the financial
statements.
DIVIDS
The Directors do not recommend the payment of a dividend and no amount has been
paid or declared by way of a dividend to the date of this report (2018: GBPnil).
KEY PERFORMANCE INDICATORS
The key performance indicators are set out below.
STATISTICS 30 June 2019 30 June 2018
Net asset value GBP2,509,709 GBP3,339,013
Net asset value per share 0.0036p 0.0049p
Closing share price as at 30 June 2019 0.6p 1.4p
Market capitalisation GBP4.185m GBP9.63m
KEY RISKS AND UNCERTAINTIES
Currently the principal risk lies in secure additional funding as and when
necessary to continue with the core research and exploration business. The
Company's projects are in the exploration phase of development and do not
generate revenue. If the Company is unsuccessful in monetising its research
developments or its exploration projects by attracting development partners or
divesting assets it may need to raise additional capital as other junior
exploration companies do from time to time. This risk is mitigated through the
Company's corporate development efforts and active engagement with a number of
gold mining companies, project funders and other investors for the purpose of
attracting investment in one or more of the Company's projects or acquisition
of one of the assets in line with the business plan.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
Details of the Company's financial risk management objectives and policies are
set out in Note 27 to these financial statements.
This report was approved by the Board of Directors on 26 June 2020 and signed
on its behalf by:
Brett Boynton
Director
DIRECTORS' REPORT
year ended 30 JUNE 2019
The Directors present their Report and the audited consolidated financial
statements of Tectonic Gold plc ("Tectonic Gold" or the "Company") and its
controlled entities ("Consolidated Entity" or "Group") for the year ended 30
June 2019.
DIRECTORS
The Board comprised the following directors who served throughout the year and
up to the date of this report save where disclosed otherwise:
Name Position Date Appointed/Resignation
Bruce Fulton Non-Executive Chairman Appointed 25 June 2018
Brett Boynton Executive Chairman and Managing Executive Chairman: appointed
Director 16 February 2016 until 25 June
2018.
Managing Director and Chief
Executive Officer appointed 26
May 2015
Sam Quinn Executive Director Appointed 20 February 2017
Dennis Edmonds Non-Executive Director Appointed 28 April 2020
Zeg Choudhry Non-Executive Director Appointed 19 September 2016 /
Resigned 1 December 2019
DIRECTORS' INTERESTS
The above Directors' interests in the share capital of the Company at 30 June
2019, held either directly or through related parties, were as follows:
Name of director Number of % of ordinary share
ordinary shares capital and voting
rights
Bruce Fulton 6,467,358 0.99
Brett Boynton 137,139,590 20.96
Sam Quinn 2,512,000 0.38
Zeg Choudhry - -
146.118,948 22.33
Details of the options granted to or held by the Directors or former Directors
are as follows:
Name of Balance Options Options Balance Number Grant Average Average
director or 30 June granted lapsed 30 June vested** date exercise date of
former 2018 2019* price expiry
director
B Fulton 10,000,000 - - 10,000,000 3,333,333 25-Jun-18 2p 25-Jun-22
B Boynton 12,000,000 - - 12,000,000 4,000,000 25-Jun-18 2p 25-Jun-22
S Quinn 12,000,000 - - 12,000,000 4,000,000 25-Jun-18 2p 25-Jun-22
Z Choudhry - - - - - - - -
*or at date of cessation if earlier.
** The options vest in three tranches as follows:
- 1/3 of the Options vested on 25 June 2018;
- 1/3 of the Options vest on 25 December 2018 provided that on or after such
date, certain performance conditions have been satisfied; and
- 1/3 of the Options vest on 25 June 2019 provided that on or after such date
certain performance condition have been satisfied.
The Company has made qualifying third-party indemnity provisions for the
benefit of the Directors in the form of Directors' and Officers' Liability
insurance during the year which remain in force at the date of this report.
DONATIONS
The Company did not make any political or charitable donations during the
reporting period (30 June 2019: nil).
EMPLOYEE CONSULTATION
The Company places considerable value on the involvement of its employees and
has continued to keep them informed on matters affecting them as employees and
on various factors affecting the performance of the Company. This is achieved
through formal and informal meetings. Equal opportunity is given to all
employees regardless of their sex, age, religion or ethnic origin.
SIGNIFICANT SHAREHOLDINGS
On 16 June 2020, the following were interested in 3 per cent. or more of the
Company's share capital (including Directors, whose interests are also shown
above):
Name of shareholder Number of ordinary % of ordinary
shares share capital and
voting rights
Tickhill Holdings Pty Ltd* 90,615,696 13.18%
Blackbrook Nominees Pty Ltd** 42,057,569 6.12%
Agfund Investments Pty Ltd** 33,646,055 4.89%
Brookton Super Fund Pty Ltd* 14,419,738 2.10%
Titeline Drilling Pty Ltd 26,650,000 3.88%
Consolidated Resources Pte Ltd 20,741,422 3.02%
Brett Boynton* 16,686,023 2.44%
* All holding associated with Brett 137,139,590 19.95%
Boynton
** All holdings associated with Peter 110,796,817 16.11%
Prentice
POST YEAR EVENTS
A list of post year events has been included in Note 30.
GOING CONCERN
The adoption of the going concern basis by the Directors is following a review
of the current position of the Company and the forecasts for at least the next
12 months. The cash and tradable securities together with the funds receivable
and funding support expected from the Queensland State Government are forecast
to enable to Company to meet its obligations and continue to operate for the
foreseeable future. Thus, the directors continue to adopt the going concern
basis in preparing the financial statements. It is beyond the scope of the
Directors to predict any future impact of COVID 19 on any of these funding
sources however and if for any reason it is not possible to sell any tradeable
securities or State Government funding is not secured, this may impact the
ability of the Company to meet its obligations and continue to operate as
envisaged. Further details regarding the adoption of the going concern basis
and uncertainty surrounding it can be found in note 4 of these financial
statements.
DISCLOSURE OF INFORMATION TO THE AUDITORS
In the case of each of the persons who are directors of the Company at the date
when this report is approved:
· So far as each director is aware, there is no relevant audit
information of which the Company's auditors are unaware; and
· Each of the directors has taken all steps that they ought to have taken
as a director to make themselves aware of any relevant audit information and to
establish that the auditors are aware of the information.
This information is given and should be interpreted in accordance with the
provisions of Section 418 of the Companies Act 2006.
AUDITOR
PKF Littlejohn LLP have expressed their willingness to continue in office as
auditor and it is expected that a resolution to reappoint them will be proposed
at the next annual general meeting.
The Board as a whole considers the appointment of external auditors, including
their independence, specifically including the nature and scope of non-audit
services provided.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
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 prepared the Group and
Company financial statements in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the European Union, and as regards
the Company financial statements, as applied in accordance with the provisions
of the Companies Act 2006. 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 of the Group and Company and of the profit or
loss of the Group and Company for that period. In preparing these financial
statements, the directors are required to:
· select suitable accounting policies and then apply them consistently;
· state whether applicable IFRSs have been followed, subject to any
material departures disclosed and explained in the financial statements;
· make judgements and accounting estimates that are reasonable and
prudent; and
· prepare the financial statements on the going concern basis unless it
is inappropriate to presume that the Group and Company will continue in
business.
The directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Group and Company's transactions and
disclose with reasonable accuracy at any time the financial position of the
Group and Company and enable them to ensure that the financial statements
comply with the Companies Act 2006.
The directors are also responsible for safeguarding the assets of the Group and
Company and hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website.
Legislation in the United Kingdom governing the preparation and dissemination
of financial statements may differ from legislation in other jurisdictions.
CORPORATE GOVERNANCE
The requirements of the 2016 UK Corporate Governance Code ("the Code"), as
issued by the Financial Reporting Council, are not mandatory for companies
traded on AQUIS Stock Exchange. The Directors recognise the value of the Code
and apply the recommendations in so far as it is appropriate for a Company of
its size.
BOARD OF DIRECTORS
The Company supports the concept of an effective Board leading and controlling
the Company. The Board of Directors is responsible for approving Company
policy and strategy. It meets regularly and has a schedule of matters
specifically reserved to it for decision. All Directors have access to advice
from independent professionals at the Company's expense. Training is available
for new and existing Directors, as necessary.
The Board consists of the Non-Executive Chairman, Bruce Fulton, Managing
Director, Brett Boynton, Executive Director, Sam Quinn and Non-Executive
director, Zeg Choudhry.
Since Admission to the AQUIS Stock Exchange on 25 June 2018, the Board has
established properly constituted audit, remuneration and AQUIS Stock Exchange
compliance committees with formally delegated duties and responsibilities, a
summary of which is set out below.
AUDIT COMMITTEE
The Audit Committee comprises Bruce Fulton (Chairman), Sam Quinn and the Chief
Financial Officer, Anne Adaley. The Committee meets at least twice a year and
is responsible for ensuring the financial performance of the Company is
properly reported on and monitored. It liaises with the auditor and reviews the
reports from the auditor relating to the accounts.
REMUNERATION COMMITTEE
The Remuneration Committee comprises Bruce Fulton (Chairman) and Sam Quinn. The
Committee meets at least twice a year and is responsible for reviewing the
performance of Executive Directors and sets the scale and structure of their
remuneration on the basis of their service agreements, with due regard to the
interests of the shareholders and the performance of the Company.
AQUIS STOCK EXCHANGE (FORMALLY NEX) COMPLIANCE COMMITTEE
The role of the AQUIS Stock Exchange (formerly NEX) compliance committee is to
ensure that the Company has in place sufficient procedures, resources and
controls to enable it to comply with the AQUIS Stock Exchange Rules. The AQUIS
Stock Exchange compliance committee make recommendations to the Board and
proactively liaise with the Company's AQUIS Stock Exchange Corporate Adviser on
compliance with the AQUIS Stock Exchange Rules. The AQUIS Stock Exchange
compliance committee also monitors the Company's procedures to approve any
share dealings by directors or employees in accordance with the Company's share
dealing code. The members of the AQUIS Stock Exchange compliance committee are
Brett Boynton (Chairman), Sam Quinn and Dennis Edmonds.
SHARE DEALING CODE
The Company has adopted a share dealing code for dealings in securities of the
Company by directors and certain employees which is appropriate for a company
whose shares are traded on the AQUIS Stock Exchange. This will constitute the
Company's share dealing policy for the purpose of compliance with UK
legislation including the Market Abuse Regulation and the relevant part of the
AQUIS Stock Exchange Rules. It should be noted that the insider dealing
legislation set out in the UK Criminal Justice Act 1993, as well as provisions
relating to market abuse, also apply to the Company and dealings in Ordinary
Shares.
COMMUNICATIONS WITH SHAREHOLDERS
Communications with shareholders are given a high priority by the management.
In addition to the publication of an annual report and an interim report, there
is regular dialogue with shareholders and analysts. The Annual General Meeting
is viewed as a forum for communicating with shareholders, particularly private
investors. Shareholders may question the Managing Director and other members
of the Board at the Annual General Meeting.
INTERNAL CONTROL
The Directors acknowledge they are responsible for the Company's system of
internal control and for reviewing the effectiveness of these systems. The risk
management process and systems of internal control are designed to manage
rather than eliminate the risk of the Company failing to achieve its strategic
objectives. It should be recognised that such systems can only provide
reasonable and not absolute assurance against material misstatement or loss.
The Company has well established procedures which are considered adequate given
the size of the business.
REMUNERATION
The remuneration of the directors has been fixed by the Board as a whole. The
Board seeks to provide appropriate reward for the skill and time commitment
required so as to retain the right calibre of director at a cost to the Company
which reflects current market rates.
Details of directors' fees and of payments made to directors for professional
services rendered are set out in Note 11 to the financial statements and
details of the directors' share options are set out in the Directors' Report.
RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE ANNUAL FINANCIAL
REPORT
We confirm that to the best of our knowledge:
· the financial statements, prepared in accordance with the applicable
set of accounting standards, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Company and the
undertakings included in the consolidation taken as a whole; and
· the Directors' report includes a fair review of the development and
performance of the business and the position of the issuer and the undertakings
included in the consolidation taken as a whole, together with a description of
the principal risks and uncertainties that they face.
This report was approved by the board of directors on 26 June 2020 and signed
on its behalf by:
Brett Boynton
Director
INDEPENT AUDITOR'S REPORT TO THE MEMEBERS OF TECTONIC GOLD PLC
FOR the year ended 30 JUNE 2019
Opinion
We have audited the financial statements of Tectonic Gold Plc (the 'parent
company') and its subsidiaries (the 'group') for the year ended 30 June 2019
which comprise the Consolidated Statement of Profit or Loss and Other
Comprehensive Income, the Group and Parent Company Statements of Financial
Position, the Group and Parent Company Statements of Changes in Equity, the
Group Statement of Cash Flows and notes to the financial statements, including
a summary of significant accounting policies. The financial reporting framework
that has been applied in their preparation is applicable law and International
Financial Reporting Standards (IFRSs) as adopted by the European Union and as
regards the parent company financial statements, as applied in accordance with
the provision of the Companies Act 2006.
In our opinion:
· the financial statements give a true and fair view of the state of the
group's and of the parent company's affairs as at 30 June 2019 and of the
group's and parent company's loss for the year then ended;
· the group financial statements have been properly prepared in
accordance with IFRSs as adopted by the European Union;
· the parent company financial statements have been properly prepared in
accordance with IFRSs as adopted by the European Union and as applied in
accordance with the provisions of the Companies Act 2006; and
· the financial statements have been prepared in accordance with the
requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards
are further described in the Auditor's responsibilities for the audit of the
financial statements section of our report. We are independent of the group and
parent company in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the FRC's Ethical
Standard as applied to listed entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to
which the ISAs (UK) require us to report to you where:
· the directors' use of the going concern basis of accounting in the
preparation of the financial statements is not appropriate; or
· the directors have not disclosed in the financial statements any
identified material uncertainties that may cast significant doubt about the
group's or the parent company's ability to continue to adopt the going concern
basis of accounting for a period of at least twelve months from the date when
the financial statements are authorised for issue.
Our application of materiality
Materiality for the group financial statements as a whole was set at GBP93,000.
This has been calculated based on a benchmark of 3% of gross assets, which we
determined in our professional judgment to be the main driver of the business
as the group is still in the exploration stage and therefore no revenues are
currently being generated, and current and potential investors will be most
interested in the recoverability of the exploration and evaluation assets.
Materiality for the parent company financial statements was set at GBP92,999,
determined with reference to a benchmark of 3% of gross assets. From a company
perspective the key benchmark is gross assets, given that this a holding
company whose value is derived from the underlying subsidiary.
Component materiality was set lower than our overall group materiality and
ranged from GBP1,500 to GBP89,000. Performance materiality for the group, and all
significant components, was set at 80% of overall materiality.
We reported to the directors all corrected and uncorrected misstatements we
identified throughout our audit with a value in excess of GBP4,670, in addition
to other audit misstatements below that threshold that we believed warranted
reporting on qualitative grounds.
An overview of the scope of our audit
In designing our audit, we determined materiality and assessed the risk of
material misstatement in the financial statements. In particular, we looked at
areas involving significant accounting estimates and judgement by the
directors, including the carrying value of assets, and considered future events
that are inherently uncertain.
We also addressed the risk of management override of internal controls,
including evaluating whether there was evidence of bias by the directors that
represented a risk of material misstatement due to fraud.
We also addressed the going concern risk, evaluating whether there were any
indicators that the Group were unable to continue as a going concern due to
restricted access to funding.
The key balances held within all significant components are the exploration and
evaluation intangible assets. The significant risk and key audit matter is in
relation to the recoverability of these assets, to confirm that no impairment
is required in line with IFRS 6.
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.
Key audit matter How the scope of our audit responded to
the key audit matter
Going Concern- GROUP AND COMPANY
(refer to note 3) We performed the following procedures:
There is a risk that further funding · Critically assessed cash flow
will not be accessible. forecasts and budgets;
With the current ongoing Covid-19 · Undertook sensitivity analysis
situation the future of the Group on management's forecasts;
could be affected with the reduced · Discussed these matters with
access to funding. management;
· Reviewed the group's assessment
of the impact of Covid-19 using our
knowledge of the business and the
industry that the group operates in;
· Evaluated the adequacy of
disclosures made in the financial
statements.
Capitalisation and recoverability of
mining exploration expenses - GROUP We performed the following procedures:
(refer to Note 17) · Agreed additions during the
IFRS 6 allows the capitalisation of year to invoices and other supporting
exploration and evaluation documentation, ensuring the expenditure
expenditures incurred in connection has been capitalised in accordance with
with the exploration and evaluation of IFRS 6;
mineral resources before the technical · Assessed management's
feasibility and commercial viability impairment review, taking into account
of extracting a mineral resource is both internal and external indicators;
demonstrable. There is a risk that · Verified good title to project
this has not been applied correctly licenses; and
causing misstatements. · Discussed with management the
There is a risk that the amounts scope of their future budgeted and
capitalised do not meet the planned expenditure on each license
recognition criteria in accordance area.
with IFRS 6.
The recoverability of the asset is
highly judgemental due to the early
stage nature of the projects and the
contingent nature of obtaining a
mining permit.
Other information
The other information comprises the information included in the annual report,
other than the financial statements and our auditor's report thereon. The
directors are responsible for the other information. Our opinion on the group
and parent company financial statements does not cover the other information
and, except to the extent otherwise explicitly stated in our report, we do not
express any form of assurance conclusion thereon. In connection with our audit
of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge obtained
in the audit or otherwise appears to be materially misstated. If we identify
such material inconsistencies or apparent material misstatements, we are
required to determine whether there is a material misstatement in the financial
statements or a material misstatement of the other information. If, based on
the work we have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
· the information given in the strategic report and the directors' report
for the financial year for which the financial statements are prepared is
consistent with the financial statements; and
· the strategic report and the directors' report have been prepared in
accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent
company and their environment obtained in the course of the audit, we have not
identified material misstatements in the strategic report or the directors'
report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept by the parent company,
or returns adequate for our audit have not been received from branches not
visited by us; or
· the parent company financial statements are not in agreement with the
accounting records and returns; or
· certain disclosures of directors' remuneration specified by law are not
made; or
· we have not received all the information and explanations we require
for our audit.
Responsibilities of directors
As explained more fully in the statement of directors' responsibilities, the
directors are responsible for the preparation of the group and parent company
financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the directors determine is necessary to
enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the group and parent company financial statements, the directors
are responsible for assessing the group's and the parent company's ability to
continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the company or to cease operations, or
have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to fraud
or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council's website at: https:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditor's report.
Use of our report
This report is made solely to the company's members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the company's members those matters we are
required to state to them in an auditor's report and for no other purpose. To
the fullest extent permitted by law, we do not accept or assume responsibility
to anyone other than the company and the company's members as a body, for our
audit work, for this report, or for the opinions we have formed.
Eric Hindson (Senior Statutory Auditor) 15
Westferry Circus
For and on behalf of PKF Littlejohn LLP Canary
Wharf
Statutory
Auditor
London E14 4HD
26 June 2020
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
FOR THE YEARED 30 JUNE 2019
NOTE 2019 2018
restated
GBP GBP
Revenue from continuing operations 7 31,862 198,694
Expenses from continuing operations:
Accounting and audit fees (88,673) (125,438)
Administration and office costs 5 (27,077) (48,993)
Corporate costs 5 (115,806) (21,203)
Amortisation and depreciation (1,338) (1,659)
Employee benefits, management fees and on 11 (89,777) (10,408)
costs
Exploration and tenement costs (36,388) (52,550)
Insurance (17,233) (17,134)
Legal expenses 396 (319,601)
Options fee and associated costs - (199,520)
Impairment of exploration costs (703,936) (182,153)
Bad debt expense (64,173) (93,050)
Fair value of warrants issued and vested - (68,900)
Share based payment recognised on reverse 9 - (2,582,872)
acquisition
Other expenses (38,945) (9,572)
(Loss) from continuing operations before (1,151,088) (3,534,359)
income tax
Income tax benefit 12 326,214 256,810
Net (loss) for the reporting period (824,874) (3,277,549)
Foreign exchange on translation of foreign (34,430) (58,251)
subsidiaries
Total comprehensive (loss) for the year (859,304) (3,335,800)
Earnings per share attributable to owners of
the company
Basic and diluted (pence per share)
From continuing operations 13 (0.120) (1.80)
The accompanying notes form part of these financial statements.
On 17 April 2019, the Company established Tectonic Gold South Africa which has
since changed its name to Deep Blue Minerals Pty Ltd. The financial information
for the reporting period includes that of Tectonic Gold Plc and its controlled
entities for the whole reporting period and that of Deep Blue Minerals Pty Ltd
for the reporting period since 17 April 2019.
Comparative Information
In 2018, the Company's Accounting Reference Date was extended to end on 30 June
2018. Accordingly, as required by Companies House, the financial statements for
the comparative period represent the period from 1 January 2017 to 30 June
2018.
The Group was formed on 25 June 2018 with the reverse takeover of Signature
Gold Ltd, by Tectonic Gold Plc (the legal parent entity). In preparing the
Financial Statements, Signature Gold Limited has been treated as the
"accounting parent" and therefore the financial information for the reporting
period includes that of Signature Gold Limited for the whole period, and that
of Tectonic Gold Plc and its controlled entity for the reporting period since
25 June 2018. See Note 9 for further details.
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2019
NOTE 30-Jun-19 30-Jun-18 30-Jun-19 30-Jun-18
restated restated
GROUP GROUP COMPANY COMPANY
GBP GBP GBP GBP
ASSETS
NON-CURRENT ASSETS
Trade and other receivables 15 - - 1,341,710 1,303,368
Plant and equipment 16 6,603 2,152 - -
Exploration and evaluation 17 2,663,707 2,830,470 - -
expenditure
Investments in controlled 19 - - 3,605,259 3,605,254
entities
TOTAL NON-CURRENT ASSETS 2,670,310 2,832,621 4,946,969 4,908,622
CURRENT ASSETS
Cash and cash equivalents 14 34,875 149,397 22,846 11,130
Trade and other receivables 15 7,913 359,869 - 280,077
Financial assets at fair 18 40,122 40,122 40,122 40,122
value through profit and loss
Other assets 20 360,412 647,688 5,100 10,454
TOTAL CURRENT ASSETS 443,322 1,197,076 68,068 341,783
TOTAL ASSETS 3,113,632 4,029,698 5,015,037 5,250,405
EQUITY
Share capital 24 6,100,615 6,099,615 6,100,615 6,099,615
Share premium account 60,146,216 60,117,216 60,146,216 60,117,216
RTO Reserve 25 (57,976,182) (57,976,182) - -
Warrant reserves 25 95,098 95,098 95,098 95,098
Foreign exchange translation 25 (92,681) (58,251) - -
reserves
Accumulated losses (5,763,357) (4,938,483) (61,439,800) (61,192,585)
TOTAL EQUITY 2,509,709 3,339,013 4,902,130 5,119,345
LIABILITIES
NON-CURRENT LIABILITIES
Trade and other payables 21 15,913 16,198 - -
Borrowings 22 236,793 168,868 - -
Employee benefits 23 11,363 10,120 - -
TOTAL NON-CURRENT LIABILITES 264,069 195,187 - -
CURRENT LIABILITIES
Trade and other payables 21 275,680 481,405 62,907 131,060
Borrowings 22 50,000 - 50,000 -
Employee benefits 23 14,174 14,092 - -
TOTAL CURRENT LIABILITES 339,853 495,497 112,907 131,060
TOTAL LIABILITIES 603,923 690,684 112,907 131,060
TOTAL EQUITY AND LIBAILITIES 3,113,632 4,029,698 5,015,037 5,250,405
As permitted by s408 Companies Act 2006, the Company has not presented its own
profit and loss account and related notes. The Company's loss for the year was
GBP247,215 (2018: loss of GBP1,020,263)
The accompanying notes form part of these financial statements.
These financial statements were approved by the Board of Directors on 26 June
2020 and signed on their behalf by:
Brett Boynton
Director
Company number: 05173250
STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 30 JUNE 2019
GROUP
FOR THE PERIOD 1 JANUARY 2017 TO 30 JUNE 2018
ISSUED SHARE WARRANT RTO FOREIGN ACCUMULATED TOTAL
CAPITAL PREMIUM RESERVE RESERVE CURRENCY LOSSES
RESERVE
GBP GBP GBP GBP GBP GBP GBP
Balance at 1 January 2017 3,064,795 - - - - (1,660,934) 1,403,861
Total comprehensive loss for the - - - - (58,251) (3,277,549) (3,335,800)
period
Transactions with owners,
recorded directly in equity:
Issue of share capital by 1,066,798 - - - - - 1,066,798
Signature Gold prior to the
reverse acquisition of Tectonic
Gold Plc
Signature Gold share capital (4,131,593) - - 4,131,593 - - -
transfer to RTO reserve
Recognition of Tectonic equity at 6,048,890 56,032,687 26,198 (58,502,521) - - 3,605,255
reverse acquisition
Issue of shares for acquisition 45,000 3,560,254 - (3,605,254) - - -
of subsidiary
Shares issued by Tectonic Gold 5,725 524,275 - - - - 530,000
since the acquisition
Share-based payment - - 68,900 - - - 68,900
Balance as at 30 June 2018 6,099,615 60,117,216 95,098 (57,976,182) (58,251) (4,938,483) 3,339,013
GROUP ISSUED SHARE WARRANT RTO FOREIGN ACCUMULATED TOTAL
FOR THE YEARED 30 CAPITAL PREMIUM RESERVE RESERVE CURRENCY LOSSES
JUNE 2019 RESERVE
GBP GBP GBP GBP GBP GBP GBP
Balance at 1 July 2018 8,266,848 - - - (58,251) (4,824,334) 3,384,263
Prior year adjustment (2,167,233) 60,117,216 95,098 (57,976,182) - (114,149) (45,250)
Balance at 1 July 2018 6,099,615 60,117,216 95,098 (57,976,182) (58,251) (4,938,483) 3,339,013
(restated)
Total comprehensive loss - - (34,430) (824,874) (859,304)
for the period
Transactions with owners,
recorded directly in
equity:
Shares Issued - 1 June 1,000 29,000 - - - - 30,000
2019
Balance as at 30 June 6,100,615 60,146,216 95,098 (57,976,182) (92,681) (5,763,357) 2,509,709
2019
The accompanying notes form part of these financial statements
COMPANY SHARE SHARE WARRANT ACCUMULATED TOTAL
FOR THE PERIOD 1 JANUARY 2017 TO 31 CAPITAL PREMIUM RESERVES LOSSES EQUITY
DECEMBER 2018
GBP GBP GBP GBP GBP
Balance at 1 January 2017 6,048,557 55,900,025 454,527 (60,534,322) 1,868,787
Total comprehensive loss for the period - - - (1,020,263) (1,020,263)
Transactions with owners, recorded
directly in equity:
Issue of shares and warrants - - - -
-
Shares issued - 25 June 2018 (3,333,333 333 66,333 - - 66,666
shares issued to Directors)
Issue of shares for acquisition of 45,000 3,560,254 - - 3,605,254
subsidiary
Shares issued by Tectonic Gold since the 5,725 524,275 530,000
acquisition
Share based payment costs - 66,329 (359,429) (362,000) 68,900
Balance at 30 June 2018 6,099,615 60,117,216 95,098 (61,192,585) 5,119,345
COMPANY SHARE SHARE WARRANT ACCUMULATED TOTAL
FOR THE YEARED 30 JUNE 2019 CAPITAL PREMIUM RESERVES LOSSES EQUITY
GBP GBP GBP GBP GBP
Balance at 1 July 2018 6,096,541 65,448,708 454,527 (61,440,435) 10,559,341
Prior year adjustment 3,074 (5,331,492) (359,429) 247,850 (5,439,997)
Balance at 1 July 2018 (restated) 6,099,615 60,117,216 95,098 (61,192,585) 5,119,344
Total comprehensive loss for the period - - - (247,215) (247,215)
Transactions with owners, recorded
directly in equity:
Issue of shares and warrants - - - -
-
Shares issued -1 June 2019 1,000 29,000 - - 30,000
Balance at 30 June 2019 6,100,615 60,146,216 95,098 (61,439,800) 4,902,130
The accompanying notes form part of these financial statements
30-Jun-19 30-Jun-18
NOTE GROUP GROUP
GBP GBP
CASH FLOWS FROM OPERATING
ACTIVITIES
Cash receipts in the course of 62,832 -
operations
Cash payments in the course of (586,464) (487,882)
operations
Research and Development Tax 326,214 256,810
Incentive Claim
Interest received - 2,516
Net cash used in operating 26 (197,418) (228,556)
activities
CASH FLOWS USED IN INVESTING
ACTIVITIES
Payments for exploration and (279,351) (914,538)
evaluation expenditure
Payments for property, plant (6,911) (2,609)
and equipment
Payment for security deposit (276) (2,120)
Cash acquired on acquisition of - 27,870
Tectonic Gold plc
Net cash used in investing (286,538) (891,397)
activities
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from issue of shares 280,000 -
Proceeds from borrowings 89,418 1,381,769
Repayment of borrowings - (232,675)
Net cash provided by financing 369,418 1,149,094
activities
Net (decrease)/increase in cash (114,539) 29,141
held and cash equivalents
Cash and cash equivalents at 149,397 126,236
the beginning of the period
Effects of exchange rate 17 (5,980)
changes on cash and cash
equivalents
Cash and cash equivalents at 34,875 149,397
the end of the period
STATEMENT OF CASH FLOWS
FOR THE YEARED 30 JUNE 2019
The accompanying notes form part of these financial statements.
30-Jun-19 30-Jun-18
NOTE COMPANY COMPANY
GBP GBP
CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts in the course of 40,380 -
operations
Cash payments in the course of (246,664) (137)
operations
Net cash used in operating 26 (206,284) (137)
activities
CASH FLOWS USED IN INVESTING
ACTIVITIES
Loan to Deep Blue Minerals Pty Ltd (15,000) -
Loan to Signature Gold Pty Ltd (47,000) -
Net cash used in investing (62,000) (11,267)
activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares 280,000 -
Net cash provided by financing 280,000 -
activities
Net (decrease)/increase in cash held 11,716 (137)
and cash equivalents
Cash and cash equivalents at the 11,130 11,267
beginning of the period
Effects of exchange rate changes on - -
cash and cash equivalents
Cash and cash equivalents at the end 22,846 11,130
of the period
The accompanying notes form part of these financial statements.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 30 JUNE 2019
1. GENERAL INFORMATION
Tectonic Gold Plc is a company incorporated in the United Kingdom under the
Companies Act 2006. The nature of the Company's operations and its principal
activities are set out in the Strategic Report and the Directors' Report on
pages 4 and 6.
2. STATEMENT OF COMPLIANCE
The financial statements comply with International Financial Reporting
Standards as adopted by the European Union.
(a) New and amended standards adopted by the Company:
As of 1 July 2018, the Company has adopted IFRS 9 and IFRS 15. The Company
adopted IFRS 9, Financial Instruments ('IFRS 9'), which replaced IAS 39,
Financial Instruments: Recognition and Measurement. IFRS 9 addresses the
classification, measurement and recognition of financial assets and
liabilities.
The Company reviewed the financial assets and liabilities reported on its
Statement of Financial Position and completed an assessment between IAS 39 and
IFRS 9 to identify any accounting changes. The financial assets subject to this
review were intercompany loans receivable. The financial liabilities subject to
this review were intercompany loans payable and convertible loan notes. Based
on this assessment of the classification and measurement model, there were no
changes to classification and measurement other than changes in terminology.
IFRS 15 requires an expected quantitative impact of the application of IFRS 15
to be included within the financial statements. The Group and Company has
minimal revenue and as such there is no impact of IFRS 15.
Of the other IFRSs and IFRICs adopted in 2019, none have had a material effect
on the Group or Company's Financial Statements.
(b) New and amended standards issued but not yet effective and not early
adopted:
Standards, amendments and interpretations that are not yet effective and have
not been early adopted are as follows:
STANDARD IMPACT ON INITIAL EFFECTIVE FOR EXPECTED TO BE
APPLICATION ANNUAL REPORTING INITIALLY APPLIED
PERIODS BEGINNING IN THE FINANCIAL
ON OR AFTER YEARING
IFRS 16 Leases 1 January 2019 30 June 2020
Leases
IFRIC 23 Uncertainty over Income Tax 1 January 2019 30 June 2020
treatments
IFRS 9 Prepayment features with 1 January 2019 30 June 2020
(Amendments) negative compensation
IAS 28 Long term interests in 1 January 2019 30 June 2020
(Amendments) associates and joint
ventures
2015-2017 Annual improvements to IFRS 1 January 2019 30 June 2020
Cycle Standards
IFRS 3 Business combinations 1 January 2019* 30 June 2020
(Amendments)
*subject to EU endorsement.
Of these IFRSs and IFRICs, none are expected to have a material effect on
future Group or Company financial statements.
3. ACCOUNTING POLICIES
This financial report includes the consolidated financial statement and notes
of Tectonic Gold Plc ("the Company") and its controlled entities ("Consolidated
Entity" or "Group").
The principal accounting policies adopted and applied in the preparation of the
Group's Financial statements are set out below. These have been consistently
applied to all the years presented unless otherwise stated:
BASIS OF ACCOUNTING
The financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRS) as adopted for use in the European Union
("EU") applied in accordance with the provisions of the Companies Act 2006.
IFRS is subject to amendment and interpretation by the International Accounting
Standards Board ("IASB") and the International Financial Standards
Interpretations Committee ("IFRS IC") and there is an ongoing process of review
and endorsement by the European Commission. The accounts have been prepared on
the basis of the recognition and measurement principles of IFRS that were
applicable at 30 June 2019.
RESULTS AND COMPARATIVE INFORMATION
On 17 April 2019 the Company established Tectonic Gold South Africa which has
since changed its name to Deep Blue Minerals. The financial information for the
reporting period includes that of Tectonic Gold Plc and its controlled entities
for the whole reporting period and that of Deep Blue Minerals for the reporting
period since 17 April 2019.
Comparative Information
On 25 June 2018, Tectonic Gold (the legal parent) acquired Signature Gold Ltd
(Signature Gold). Although the transaction was not a business combination, the
acquisition has been accounted for as an asset acquisition with reference to
the guidance for reverse acquisition in IFRS 3 Business Combinations and IFRS 2
Share-based Payment. Refer to Note 9 for further details.
In preparing the Financial Statements, Signature Gold has been treated as the
"accounting parent" and therefore the financial information for the comparative
period for the Group includes that of Signature Gold and that of Tectonic Gold
for the period since 25 June 2018.
In 2018, the Company's Accounting Reference Date was extended to end on 30 June
2018. Accordingly, as required by Companies House, the financial statements for
the comparative period represent the period 1 January 2017 to 30 June 2018.
PRIOR YEAR ADJUSTMENTS
The 2018 balances have been restated in the 2019 financial statements as PKF
Littlejohn LLP found an error in the accounting treatment for the reverse
acquisition during the 2019 audit. The 2018 balances were also restated to
account for certain costs amounting to GBP45,250 that were not accrued for
together with the fair value of options that were issued on 25 June 2018 which
amount to GBP68,900. Further details are included in note 5 to the financial
statements.
BASIS OF CONSOLIDATION
Where the Group has control over an investee, it is classified as a subsidiary.
The Group controls an investee if all three of the following elements are
present: power over the investee, exposure to variable returns from the
investee, and the ability of the investor to use its power to affect those
variable returns. Control is reassessed whenever facts and circumstances
indicate that there may be a change in any of these elements of control.
The consolidated financial statements comprise the financial statements of the
Company and its subsidiaries as at the end of the reporting period. The
financial statements of the subsidiaries used in the preparation of the
consolidated financial statements are prepared for the same reporting date as
for the Company. Consistent accounting policies are applied to like
transactions and events in similar circumstances. All intra-group balances,
balances and unrealised gains and losses resulting from intra-group
transactions and dividends are eliminated in full.
Subsidiaries are consolidated from the date of acquisition, being the date on
which the Group obtains control, and continue to be consolidated until the date
that such control ceases.
GOING CONCERN
Any consideration of the foreseeable future involves making a judgement, at a
particular point in time, about future events which are inherently uncertain.
The ability of the Group and Company to carry out their planned business
objectives is dependent on the continuing ability to raise adequate financing
from equity investors and/or the achievement of profitable operations.
The adoption of the going concern basis by the Directors is following a review
of the current position of the Company and the forecasts for the next 12
months. The cash and tradable securities together with the funds receivable and
funding support expected from the Queensland State Government are forecast to
enable the Group and Company to meet their obligations and continue to operate
for the foreseeable future. Thus, the directors continue to adopt the going
concern basis in preparing the financial statements. It is beyond the scope of
the Directors to predict any future impact of COVID 19 on any of these funding
sources however and if for any reason it is not possible to sell any tradeable
securities or State Government funding is not secured, this may impact the
ability of the Group and Company to meet their obligations and continue to
operate as envisaged. Further details regarding the adoption of the going
concern basis and uncertainty surrounding it can be found in note 4 of these
financial statements.
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS (2018 DISCLOSED AS
AVAILABLE FOR SALE INVESTMENTS)
Investments are initially measured at fair value plus directly attributable
incidental acquisition costs. Subsequently, they are measured at fair value in
accordance with IAS 39. This is either the bid price or the last traded price,
depending on the convention of the exchange on which the investment is quoted.
Investments are recognised as available-for-sale financial assets. Gains and
losses on measurement are recognised in other comprehensive income except for
impairment losses and foreign exchange gains and losses on monetary items
denominated in a foreign currency, until the assets are derecognised, at which
time the cumulative gains and losses previously recognised in other
comprehensive income are recognised in the income statement.
The Company assesses at each year end date whether there is any objective
evidence that a financial asset or group of financial assets classified as
available-for-sale has been impaired. An impairment loss is recognised if there
is objective evidence that an event or events since initial recognition of the
asset have adversely affected the amount or timing of future cash flows from
the asset. A significant or prolonged decline in the fair value of a security
below its cost shall be considered in determining whether the asset is
impaired.
INVESTMENTS
In the Company's separate financial statements, investments in subsidiaries are
accounted for at cost less impairment losses.
FOREIGN CURRENCIES
The Company's financial statements are presented in the currency of the primary
economic environment in which it operates (its functional currency). For the
purpose of these financial statements, the results and financial position are
expressed in Pounds Sterling, which is the presentation currency of the
Company.
Each entity in the Group determines its own functional currency and items
included in the financial statements of each entity are measured using that
functional currency.
Exchange differences arising on the settlement of monetary items, and on the
retranslation of monetary items, are included in the income statement.
Exchange differences arising on the retranslation of non-monetary items carried
at fair value are included in profit or loss for the period, except for
differences arising on the retranslation of non-monetary items in respect of
which gains and losses are recognised directly in equity. For such
non-monetary items, any exchange component of that gain or loss is also
recognised directly in equity.
FOREIGN CURRENCIES
When a decline in the fair value of a financial asset classified as
available-for-sale has been previously recognised in other comprehensive income
and there is objective evidence that the asset is impaired, the cumulative loss
is removed from other comprehensive income and recognised in the income
statement. The loss is measured as the difference between the cost of the
financial asset and its current fair value less any previous impairment.
For the purpose of presenting Company financial statements, the assets and
liabilities of any of the Company's operations that are overseas are translated
at exchange rates prevailing on the year-end date. Income and expense items
are translated at the average exchange rates for the period.
Any translation differences on consolidation are recognised in Other
Comprehensive Income
TAXATION
The tax expense represents the sum of the tax currently payable and deferred
tax.
The tax currently payable is based on taxable profit for the year. Taxable
profit differs from net profit as reported in the income statement because it
excludes items of income or expense that are taxable or deductible in other
years and it further excludes items that are never taxable or deductible. The
Company's liability for current tax is calculated using tax rates that have
been enacted or substantively enacted by the year end date.
Deferred tax is the tax expected to be payable or recoverable on temporary
differences between the carrying amounts of assets and liabilities in the
financial statements and the corresponding tax bases used in the computation of
taxable profit, and is accounted for using the balance sheet liability method.
Deferred tax liabilities are generally recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent that it is
probable that taxable
profits will be available against which deductible temporary differences can be
utilised. Such assets and liabilities are not recognised if the temporary
difference arises from the initial recognition of goodwill or from the initial
recognition (other than in a business combination) of other assets and
liabilities in a transaction that affects neither the tax profit nor the
accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences
arising on investments in subsidiaries and associates, and interests in joint
ventures, except where the Company is able to control the reversal of the
temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax liabilities
and where they relate to income taxes levied by the same taxation authority and
the Company intends to settle its current tax assets and liabilities on a net
basis.
EXPLORATION AND EVALUATION EXPITURE
Exploration expenditure incurred is accumulated in respect of each identifiable
area of interest, net of any related grant income received. These costs are
only carried forward to the extent that they are expected to be recovered
through the successful development or sale of the area or where activities in
the area have not yet reached a stage which permits reasonable assessment of
the existence of economically recoverable reserves.
Accumulated costs in relation to an abandoned area are written off in full
against profit or loss in the year in which the decision to abandon the area is
made. When production commences, the accumulated costs for the relevant area of
interest are amortised over the life of the area according to the rate of
depletion of the economically recoverable reserves. A regular review is
undertaken of each area of interest to determine the appropriateness of
continuing to carry forward costs in relation to the area of interest.
Exploration and evaluation assets are assessed for impairment annually or when
facts and circumstances suggest that the carrying amount of an asset may exceed
its recoverable amount in accordance with IFRS 6.
IMPAIRMENT OF PROPERTY, PLANT & EQUIPMENT
At each financial year end date, the Company reviews the carrying amounts of
its tangible assets to determine whether there is any indication that those
assets have suffered an impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated in order to determine the extent
of the impairment loss, if any. Where the asset does not generate cash flows
that are independent from other assets, the Company estimates the recoverable
amount of the cash-generating unit to which the asset belongs.
If the recoverable amount of an asset or cash-generating unit is estimated to
be less than its carrying amount, the carrying amount of the asset or
cash-generating unit is reduced to its recoverable amount and the impairment
loss is recognised as an expense immediately.
When an impairment loss subsequently reverses, the carrying amount of the asset
or cash-generating unit is increased to the revised estimate of its recoverable
amount, but so that the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment loss been recognised
for the asset or cash-generating unit in prior years. A reversal of an
impairment loss is recognised as income immediately, unless the relevant asset
is carried at a revalued amount, in which case the reversal of the impairment
loss is treated as a revaluation increase.
PROPERTY, PLANT AND EQUIPMENT
Items of property, plant and equipment are recorded at cost and depreciated as
outlined below:
Depreciation of Property, Plant and Equipment
Depreciation is calculated on a straight-line basis to write off the net cost
of each item of property, plant and equipment over its expected useful life for
the entity. Estimates of remaining useful lives are made on a regular basis for
all assets with annual reassessments for major items. The expected useful lives
are as follows:
Plant and equipment 5 years
TRADE RECEIVABLES, LOANS AND OTHER RECEIVABLES
Trade receivables, loans and other receivables that have fixed or determinable
payments that are not quoted in an active market are classified under 'loans
and receivables. Loans and receivables are measured at amortised cost using the
effective interest method, less any impairment. Interest income is recognised
by applying the effective interest rate, except for short term receivables when
the recognition of interest would be immaterial.
Other receivables, that do not carry any interest, are measured at their
nominal value as reduced by any appropriate allowances for irrecoverable
amounts.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash on hand and other short-term bank
deposits.
FINANCIAL LIABILITIES
Financial liabilities and equity instruments are classified according to the
substance of the contractual arrangements entered into. Financial liabilities
are classified as either financial liabilities 'at FVTPL' or 'other financial
liabilities'.
All financial liabilities are recognised initially at fair value and, in the
case of loans and borrowings and payables, net of directly attributable
transaction costs. The Group's financial liabilities include trade and other
payables.
A financial liability is held for trading if it meets one of the following
conditions:
* It is incurred principally for the purpose of repurchasing it in the
near term
* On initial recognition it is part of a portfolio of identified financial
instruments that are managed together and for which there is evidence of a
recent actual pattern of short-term profit-taking, or
* It is a derivative (except for a derivative that is a financial
guarantee contract or a designated and effective hedging instrument).
There were no financial liabilities 'at FVTPL' during the current, or
preceding, period.
An equity instrument is any contract that evidences a residual interest in the
assets of the Company after deducting all of its liabilities.
OTHER FINANCIAL LIABILTIES AND SHORT-TERM BORROWINGS
Interest-bearing loans and overdrafts are recorded at the proceeds received,
net of direct issue costs. Finance charges are accounted for on an accruals
basis in profit or loss using the effective interest rate method and are added
to the carrying amount of the instrument to the extent that they are not
settled in the period in which they arise. Other short-term borrowings being
intercompany loans and unsecured convertible loan notes issued in the year are
recognised at amortised cost net of any financing or arrangement fees.
TRADE PAYABLES
Trade payables are initially measured at fair value and subsequently measured
at amortised cost using the effective interest method, less provision for
impairment.
EQUITY INSTRUMENTS INCLUDING SHARE CAPITAL
Equity instruments issued by the Company are recorded at the proceeds received,
net of incremental costs attributable to the issue of new shares.
An equity instrument is any contract that evidences a residual interest in the
assets of a company after deducting all of its liabilities. Equity instruments
issued by the Company are recorded at the proceeds received net of direct issue
costs.
Share capital represents the amount subscribed for shares at nominal value.
The share premium account represents premiums received on the initial issuing
of the share capital. Any transaction costs associated with the issuing of
shares are deducted from share premium, net of any related income tax benefits.
Any bonus issues are also deducted from share premium.
The reverse takeover reserve represents the adjustment needed to reflect the
reverse takeover of Signature Gold in the previous year.
The foreign currency translation reserve is used to record exchange differences
arising from the translation of the financial statements of foreign
subsidiaries.
The warrant reserve represents the fair value of warrants granted to employees
and suppliers for services provided to the Group. The fair value of warrants is
expensed over the vesting period or during the period in which the services are
received.
Accumulated losses include all current and prior period results as disclosed in
the statement of comprehensive income.
SHARE-BASED PAYMENTS
The Company has applied the requirements of IFRS 2 Share-based payments.
The Company operates an equity-settled share-based payment scheme under which
share options are issued to certain employees. Equity-settled share-based
payments are measured at fair value (excluding the effect of non-market-based
vesting conditions) at the date of grant. The fair value determined at the
grant date of the equity-settled share-based payments is expensed on a
straight-line basis over the vesting period, based on the Company's estimate of
shares that will eventually vest and adjusted for the effect of
non-market-based vesting conditions.
Fair value is measured by use of the Black Scholes model. The expected life
used in the model has been adjusted, based on management's best estimate, for
the effects of non-transferability, exercise restrictions, and behavioural
considerations.
4. CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATIONS
In the application of the Company's accounting policies, which are described in
note 3, the Directors are required to make judgements, estimates and
assumptions about the carrying amounts of assets and liabilities that are not
readily apparent from other sources. The estimates and associated assumptions
are based on historical experience and other factors that are considered to be
relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an on-going basis.
Revisions to accounting estimates are recognised in the period. Judgements and
estimates that may affect future periods are as follows:
SHARE BASED PAYMENTS
The calculation of the fair value of equity-settled share-based awards and the
resulting charge to the statement of comprehensive income requires assumptions
to be made regarding future events and market conditions. These assumptions
include the future volatility of the Company's share price. These assumptions
are then applied to a recognised valuation model in order to calculate the fair
value of the awards.
TREATMENT OF EXPLORATION AND EVALUATION COSTS
Exploration expenditure incurred is accumulated in respect of each identifiable
area of interest, net of any related grant income received. These costs are
only carried forward to the extent that they are expected to be recovered
through the successful development or sale of the area or where activities in
the area have not yet reached a stage which permits reasonable assessment of
the existence of economically recoverable reserves.
Accumulated costs in relation to an abandoned area are written off in full
against profit in the year in which the decision to abandon the area is made.
When production commences, the accumulated costs for the relevant area of
interest are amortised over the life of the area according to the rate of
depletion of the economically recoverable reserves. A regular review is
undertaken of each area of interest to determine the appropriateness of
continuing to carry forward costs in relation to the area of interest.
The value of the Group's exploration and evaluation expenditure will be
dependent upon the success of the Group in discovering economic and recoverable
mineral resources. It is also dependent on the Group successfully renewing its
licences.
The future revenue flows relating to these assets is uncertain and will also be
affected by competition, relative exchange rates and potential new legislation
and related environmental requirements.
5. PRIOR YEAR ADJUSTMENT
The 2018 consolidated statement of profit and loss and other comprehensive
income has been restated to account for certain costs amounting to GBP45,250 that
were not accrued for on completion of the reverse takeover by Signature Gold
Pty Ltd on 25 June 2018 and the fair value of options that were issued on 25
June 2018 which amount to GBP68,900. Details are set out below.
CONSOLIDATED STATEMENT OF PROFIT OR Signed 2018 2018 Loss Restated for
LOSS AND OTHER COMPREHENSIVE INCOME accounts Increase the year ended
(extract) 30 June 2018
Note GBP GBP GBP
Expenses from continuing operations:
Listing fees recognised on reverse (i) (2,537,622) (45,250) (2,582,872)
acquisition
Fair value of warrants issued and (ii) - (68,900) (68,900)
vested
(2,537,622) (114,150) (2,582,872)
(i) The prior year adjustment of GBP45,250 is comprised of printing costs
amounting to GBP13,750 and consulting fees of GBP31,500 that were incurred in
connection with the reverse takeover by Signature Gold Pty Ltd. This results in
an increase in the listing fees recognised on the reverse acquisition by GBP
45,250 in total.
(ii) The prior year adjustment of GBP68,900 represents the fair value of
options that were issued on 25 June 2018 and not recorded in 2018.
Basic and diluted earnings per share for the prior year have also been
restated. The amount of the correction for both basic and diluted earnings per
share was an increase of 0.40p per share.
GROUP STATEMENT OF FINANCIAL Signed Adjustments Restated
POSITION accounts at as at 30
30 June June 2018
2018
Note GBP GBP GBP
ASSETS
NON-CURRENT ASSETS
Trade and other receivables - - -
Plant and equipment 2,152 - 2,152
Exploration and evaluation 2,830,470 - 2,830,470
expenditure
Investment in controlled - - -
entities
TOTAL NON-CURRENT ASSETS 2,832,621 - 2,832,621
CURRENT ASSETS
Cash and cash equivalents 149,397 - 149,397
Trade and other receivables 359,869 - 359,869
Investments 40,122 - 40,122
Other assets 647,688 - 647,688
TOTAL CURRENT ASSETS 1,197,076 - 1,197,076
TOTAL ASSETS 4,029,697 - 4,029,697
EQUITY
Share capital (i) 8,266,848 (2,167,233) 6,099,615
Share premium (i) - 60,117,216 60,117,216
RTO reserve (i) - (57,976,182) (57,976,182)
Warrant reserve (ii) - 95,098 95,098
Foreign exchange translation (58,251) - (58,251)
reserves
Accumulated losses (iii) (4,824,334) (114,149) (4,938,483)
TOTAL EQUITY 3,384,263 (45,250) 3,339,013
LIABILITIES
NON-CURRENT LIABILITIES
Trade and other payables 16,198 - 16,198
Borrowings 168,868 - 168,868
Employee benefits 10,120 - 10,120
TOTAL NON-CURRENT LIABILITIES 195,187 - 195,187
CURRENT LIABILITIES
Trade and other payables (iv) 436,155 45,250 481,405
Employee benefits 14,092 - 14,092
TOTAL CURRENT LIABILITIES 450,247 45,250 495,497
TOTAL LIABILITIES 645,434 45,250 690,684
TOTAL EQUITY LIABILITIES 4,029,697 - 4,029,697
(i) The 2018 balances have been restated in the 2019 financial statements
due to an error in the accounting treatment for the reverse acquisition
identified during the 2019 audit.
(ii) The prior year adjustment to warrant reserves of GBP95,098 is comprised
of:
a. GBP68,900 being the fair value of options that were issued on 25 June 2018
not recorded in 2018; and
b. GBP26,198 which is the recycling of the share-based payment expense in
respect of warrants and share options that had either lapsed or been exercised
prior to completion of the reverse takeover on 25 June 2018.
(iii) The prior year adjustment to accumulated losses of GBP114,149 is comprised
of the following charges to accumulate losses:
a. GBP45,250 which is comprised of printing costs of GBP13,750 and consulting
fees of GBP31,500 that were incurred in connection with the reverse takeover by
Signature Gold Pty Ltd which was completed on 25 June 2018. This results an
increase in the listing fees recognised on the reverse acquisition by GBP45,250
in total.
b. GBP68,900 which represents the fair value of options that were issued on 25
June 2018 and not recorded in 2018.
(iv) The prior year adjustment to trade and other payables of GBP45,250 is
comprised of printing and consulting fees accrued on 25 June 2018 in connection
with the reverse takeover by Signature Gold Pty Ltd.
COMPANY STATEMENT OF FINANCIAL Signed Adjustments Restated
POSITION accounts at as at 30
30 June 2018 June 2018
Note GBP GBP GBP
ASSETS
NON-CURRENT ASSETS
Trade and other receivables 1,303,368 - 1,303,368
Investment in controlled entities (i) 9,000,000 (5,394,746) 3,605,254
TOTAL NON-CURRENT ASSETS 10,303,368 (5,394,746) 4,908,622
CURRENT ASSETS
Cash and cash equivalents 11,130 - 11,130
Trade and other receivables 280,077 - 280,077
Investments 40,122 - 40,122
Other assets 10,454 - 10,454
TOTAL CURRENT ASSETS 341,783 - 341,783
TOTAL ASSETS 10,645,151 - 10,645,151
EQUITY
Share capital (i) 6,096,541 3,074 6,099,615
Share premium (i) 65,448,708 (5,331,492) 60,117,216
Warrant reserve (ii) 454,527 (359,429) 95,098
Accumulated losses (iii) (61,440,435) 247,850 (61,192,585)
TOTAL EQUITY 10,559,341 (5,439,997) 5,119,344
LIABILITIES
CURRENT LIABILITIES
Trade and other payables (iv) 85,810 45,250 131,060
TOTAL CURRENT LIABILITIES 85,810 45,250 131,06
TOTAL LIABILITIES 85,810 45,250 131,06
TOTAL EQUITY LIABILITIES 10,645,152 (5,394,747) 5,250,405
(i) The 2018 balances have been restated in the 2019 financial statements
due to an error in the accounting treatment for the reverse acquisition
identified during the 2019 audit.
(ii) The prior year adjustment of GBP359,429 represents adjustments for:
a. The recognition of the options issued on 25 June 2018 and the fair value
of these options being GBP68,900 which was not recorded in 2018; and
b. GBP428,329 which represents warrants or options that had lapsed or had been
exercised by the date of the completion of the reverse takeover on 25 June
2018.
(iii) The prior year adjustment to accumulated losses of GBP247,850 is comprised
of the following charges to accumulated losses:
a. GBP45,250 which is comprised of printing costs amounting to GBP13,750 and
consulting fees of GBP31,500 that were incurred in connection with the reverse
takeover by Signature Gold Pty Ltd which was completed on 25 June 2018.
b. GBP68,900 which represents the fair value of options that were issued on 25
June 2018 and not recorded in 2018.
c. GBP428,329 which represents warrants or options that had lapsed or had been
exercised by the date of the completion of the reverse takeover on 25 June
2018.
The prior year adjustment had no impact on the Group or Company cashflow
statement.
6. SEGMENTAL INFORMATION
The Chief Operating Decision Maker of the Group is the Board of Directors. The
Group operates in one industry segment being mineral exploration. Information
is therefore shown for geographical segments.
2019 AUSTRALIA SOUTH AFRICA UNALLOCATED TOTAL
GBP GBP GBP GBP
Revenue and other revenue
Interest - 59 - 59
Consulting fees 24,471 - - 24,471
Other fees - 7,332 - 7,332
Total segment revenue and other 24,471 7,391 - 31.862
revenue
Segment net (loss) before tax (123,431) (31,721) (260,662) (445,814)
and other items
Impairment of exploration costs (703,936) - - (703,936)
Depreciation and amortisation (1,338) - - (1,338)
Net (loss) before income tax (828,705) (31,721) (290,662) (1,151,088)
Income tax benefit 326,214 - - 326,214
Net (loss) after income tax (502,491) (31,721) (290,662) (824,874)
Segment assets at 30 June 2019 2,998,503 47,060 68,069 3,113,632
Segment Liabilities at 30 June 424,802 66,214 112,907 603,923
2019
All additions to intangible assets occurred in the Australian reporting
segment.
2018 (Restated) AUSTRALIA UNALLOCATED TOTAL
GBP GBP GBP
Revenue and other revenue
Interest 2,516 - 2,516
Option fee 196,178 - 196,178
Total segment revenue and other 198,694 - 198,694
revenue
Segment net (loss) / profit before tax (886,082) (63,746) (949,828)
and other items
Depreciation and amortisation (1,659) - (1,659)
Listing fees recognised on reverse - (2,582,872) (2,582,872)
acquisition
Net (loss) before income tax (887,741) (2,646,618) (3,534,359)
Income tax benefit 256,810 - 256,810
Net (loss) after income tax (630,931) (2,646,618) (3,277,549)
Segment assets at 30 June 2018 3,644,468 385,229 4,029,697
Segment Liabilities at 30 June 2018 559,624 131,060 690,684
All additions to intangible assets occurred in the Australian
reporting segment.
7. REVENUE
CONSOLIDATED
2019 2018
restated
GBP GBP
Consulting services 24,471 -
Interest income 59 2,516
Other fees 7,332
Option fee - 196,178
Total revenue from continuing 31,862 198,694
operations
8. OPERATING LOSS
CONSOLIDATED
2019 2018
restated
GBP GBP
Operating (loss) is stated after
charging:
Staff costs as per Note 11 below (89,777) (10,408)
Impairment of exploration costs (703,936) -
Fair value of warrants issued and (68,900) -
vested
Depreciation of property plant and (1,338) (1,659)
equipment
Net Foreign exchange gain (28,549) (8,525)
9. ACQUISITION
On 25 June 2018, Tectonic Gold Plc completed the acquisition of 100% of the
issued capital of Signature Gold and 450,000,000 fully paid ordinary shares in
the Company were allotted to the vendors of Signature Gold Ltd at an issue
price of 2 pence per share.
Although the transaction was not a business combination, the acquisition has
been accounted for as an asset acquisition with reference to the guidance for
reverse acquisitions in IFRS 3 Business Combinations and IFRS 2 Share-based
Payment.
In preparing the Financial Report, Signature Gold has been treated as the
"accounting parent" and therefore the financial information for the reporting
period includes that of Signature Gold and that of Tectonic Gold Plc and its
controlled entities for the period since 25 June 2018.
Net Assets of Tectonic Gold Plc as at 25 June 2018 GBP
Assets
Cash and cash equivalents 27,870
Trade and other receivables 38,085
Other assets 1,345,693
Liabilities
Payables (77,885)
Other Liabilities (311,380)
Net assets of Tectonic Gold 1,022,383
at 25 June 2018
Deemed fair value of share-based payment of assets acquired
180,262,746 shares @ GBP0.02 3,605,255
per share
2,582,872
Listing fees expense recognised on reverse acquisition
10. AUDITORS' REMUNERATION
CONSOLIDATED
2019 2018
GBP GBP
The analysis of auditors' remuneration is
as follows:
Fees paid or payable to Signature Gold's 30,699 24,255
auditors in that geographical loication
for the audit of the Company's annual
accounts and other services
Fees payable to the Group's auditor for 25,500 -
the audit of the Company' annual
accounts.
Fees paid to the Company's former auditor 11,799 70,570
for the audit of the Company annual
accounts, taxation, due diligence and
other services
67,998 94,825
11. STAFF COSTS
CONSOLIDATED
2019 2018
GBP GBP
The average monthly number of
employees (including executive
directors) for the continuing
operations was:
Company total staff 2 2
Wages and salaries 153,751 122,645
Provision for annual leave 329 (1,095)
Provision for long service leave 1,419 1,910
Superannuation 14,124 11,615
Staff training costs and other costs 4,888 9,593
174,511 14,704
Less: staff costs allocated to (84,734) (134,296)
exploration projects costs
89,777 10,408
COMPANY
2019 2018
GBP GBP
The average monthly number of
employees (including executive
directors) for the continuing
operations was:
Company total staff 2 2
Wages and salaries 63,333 -
Superannuation 6,772 -
70,106 -
There were no separate fees paid to directors during the reporting period nor
in the comparative reporting period.
12. TAXATION
There is no UK tax charge/credit during the reporting periods.
Reconciliation of tax charge:
CONSOLIDATED
2019 2018
GBP GBP
Loss on continuing operations before (824,874) (3,277,549)
tax
Tax at the Australian corporation (247,462) (983,265)
tax rate of 30% (2018: 30%)
Effects of:
- Tax effect of tax 247,622 983,265
losses not recognized as benefits
including tax effect of differences
in the standard rate of tax in
different jurisdictions
- Research and Development Tax 326,214 256,810
Incentive claim
Unutilized tax losses carried - -
forward
Tax benefit for the period 326,214 256,810
No deferred tax asset has been recognised in respect of the losses. At the end
of the reporting period the Group had unused tax losses of GBP2,059,715 (2018: GBP
1,543,182).
Where it is anticipated that future taxable profits will be available against
which these losses will be utilised a deferred tax asset is recognised.
The total taxation charge in future periods will be affected by any changes to
the corporation tax rates in force in the countries in which the Company
operates.
13. EARNINGS PER SHARE
The basic earnings per share is based on the (loss) for the year divided by
the weighted average number of shares in issue during the reporting period.
The weighted average number of ordinary shares for the reporting period
assumes that all shares have been included in the computation based on the
weighted average number of days since issue.
2019 2018
Restated
GBP GBP
(Loss) for the year attributable to (824,874) (3,277,549)
owners of the Company
Weighted average number of ordinary 688,357,267 181,614,122
shares in issue for basic and fully
diluted earnings*
(Loss)/gain per share (pence per
share)
Basic and fully diluted*: (0.12) (1.80)
*Since the Company incurred a loss in the 2019 reporting period and there were
no options on issue during the comparative period the basic loss and the
diluted loss per share are the same as the effect of exercise of options and
warrants is not dilutive.
14. CASH AND CASH EQUIVALENTS
CONSOLIDATED COMPANY
2019 2018 2019 2018
GBP GBP GBP GBP
Cash and cash equivalents 34,875 149,397 22,846 11,130
The Directors consider the carrying amount of cash and cash equivalents
approximates to their fair value.
15. TRADE AND OTHER RECEIVABLES
CONSOLIDATED COMPANY
2019 2018 2019 2018
GBP GBP GBP GBP
Current
Shareholder subscription funds - 280,077 - 280,077
Security deposit - 5,634 - -
Other debtors 7,913 - - -
GST receivable - 35,898 - -
VAT receivable - 38,260 - -
7,913 359,869 - 280,077
Non-current
Loan to controlled entity - - 1,341.710 1,303,368
- - 1,341,710 1,303,368
No receivables were past due or provided for at the year-end or at the previous
year end. The Directors consider the carrying amount of trade and other
receivables approximates to their fair value.
16. PLANT AND EQUIPMENT
CONSOLIDATED
2019 2018
GBP GBP
Plant and equipment
- At cost 16,303 11,100
- less accumulated (9,700) (8,948)
depreciation
6,603 2,152
Plant and Plant and
Equipment Equipment
GBP GBP
Carrying amount at the 2,152 1,396
beginning of the period
Additions 6,911 2,609
Disposals (1,091) -
Depreciation (1,338) (1,659)
Foreign exchange 32 (195)
Carrying amount at the end of 6,603 2,152
the period
17. EXPLORATION AND EVALUATION EXPITURE
CONSOLIDATED
2019 2018
GBP GBP
Non-producing properties
Balance at the beginning of 2,830,470 2,324,808
the period
Exploration and evaluation 587,111 811,851
expenditure
Impairment of exploration and (703,936) 811.851
evaluation expenditure
Foreign exchange (49,938) (130,469)
Balance at the end of the 2,663,707 2,830,470
reporting period
The ultimate recoupment of balances carried forward in relation to areas of
interest still in the exploration or valuation phase is dependent on successful
development, and commercial exploitation, or alternatively sale of the
respective areas.
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS
CONSOLIDATED COMPANY
2019 2018 2019 2018
GBP GBP GBP GBP
Investment in Tirupati Graphite 40,122 40,122 40,122 40,122
Plc
The investment in Tirupati Graphite Plc ("TRM") relates to the joint venture
holding company of a joint venture agreement between Tectonic Gold and Tirupati
Carbons and Chemicals Pvt. Ltd ("Tirupati"). US$50,000 was invested by way of a
subscription for 1.48% of the enlarged issued share capital of TRM. TRM is the
98% owner of Tirupati Madagascar Ventures SARL ("TMV"), the owner of the
Vatomaina licence, Exploitation Permit (PE) No. 38321.
Measurement of fair value of financial instruments
The management team of Tectonic Gold perform valuations of financial items for
financial reporting purposes, including Level 3 fair values. Valuation
techniques are selected based on the characteristics of each instrument, with
the overall objective of maximising the use of market-based information.
18. CONTROLLED ENTITIES
Details of controlled entities are as follows:
PARENT ENTITY COUNTRY OF
INCORPORATION
Tectonic Gold Plc United
25 Bilton Road, Rugby, England, CV22 7AG Kingdom
CONTROLLED ENTITIES PRINCIPAL ACTIVITIES COUNTRY OF PERCENTAGE OF
INCORPORATION EQUITY HELD BY
THE COMPANY
2019 2018
% %
Signature Gold Pty Mineral exploration Australia 100 100*
Ltd
13/20 Bridge Street,
Sydney NSW,
Australia 2001
Deep Blue Minerals Mineral Exploration South Africa 100** -
Pty Ltd
6 Reier Avenue
Alexander
Bay, Northern Cape
Republic of South
Africa, 8290
Direct Excellence Direct Excellence was United - 100
closed on January 2019 Kingdom
*On 25 June 2018, Tectonic Gold Plc completed the acquisition of 100% of the
issued capital of Signature Gold and 450,000,000 fully paid ordinary shares in
the Company were allotted to the vendors of Signature Gold Ltd at 2 pence per
share amounting to GBP 9,000,000. Note, the deemed fair value of the
share-based payment was incorrectly based on Signature Gold's net assets and
should have been based on Tectonic Gold's net assets. As a result, this has
required an adjustment to the prior year accounts as detailed in Note 5.
Signature Gold Limited was converted from a Public Limited Company to a Private
Limited Company on 3 June 2019.
** Deep Blue Minerals Pty Ltd was incorporated on 17 April 2019.
19. OTHER ASSETS
CONSOLIDATED COMPANY
2019 2018 2019 2018
GBP GBP GBP GBP
Prepayments (i) 346,151 633,825 - -
Other prepayments 6,440 11,817 5,100 10,454
Security deposits 7,821 2,045 - -
360,412 647,688 - 10,454
(i) During the 2018 comparative reporting period, the Company paid
Titeline Drilling Pty Ltd ACN 096 640 201 (Titeline) for future drilling
services in accordance with the heads of agreement dated 28 March 2018 between
Titeline, Signature and StratMin.
Titeline has been engaged to complete 10,000 meters of diamond drilling to
produce core samples for analysis, assay and metallogenic studies from the
Company's Biloela Project site. A review to be completed after 2,500 metres of
drilling has been completed and the completion program for the remaining 7,500
metres to be mutually agreed.
As at 30 June 2018, the prepayment of GBP 633,825 (A$1,125,000) to Titeline was
comprised of:
* GBP 126,765 (A$225,000 excluding GST) paid in cash; and
* pre-paid technical services amounting to GBP 507,060 ($A90,000) settled
with the issue of 5,544,484 fully paid ordinary shares issued in the Company at
an issue price of A$0.162 per share.
As at 30 June 2019, the balance of the prepayment to Titleine is GBP 346,151
(A$625,386).
20. TRADE AND OTHER PAYABLES
CONSOLIDATED COMPANY
2019 2018 2019 2018
GBP GBP GBP GBP
Current
Trade payables 195,024 246,706 24,074 71,416
Other payables 11,104 23,528 - 14,394
Accrued expenses 69,552 211,171 38,833 45,250
275,680 481,405 62,907 131,060
Non-Current
Other payables 15,913 16,198 - -
15,913 16,198 - -
The Directors consider the carrying amount of trade payables approximates to
their fair value.
21. BORROWINGS
CONSOLIDATED COMPANY
2019 2018 2019 2018
GBP GBP GBP GBP
Current
Loan from Shareholder(iii) 50,000 - 50,000 -
50,000 - 50,000 -
Non-Current
Loan payable to director related 81,961 11,268 - -
entities(i)
Loan payable to Consolidated 154,832 157,600 - -
Minerals Pte Ltd(i)(ii)
236,793 168,868 - -
(i) The loans outstanding at the end of the reporting period and comparative
periods do not accrue interest and are not due to be repaid on or before 12
months after the end of each reporting period.
(ii) Signature Gold and shareholder Consolidated Minerals Pte Ltd, a
resources and infrastructure investment fund based in Singapore, are evaluating
international IRGS assets as cooperative opportunities. The parties expect to
settle the loan as part of an agreement on one or more of these projects either
in equity via an acquisition or merger or as a joint venture interest via a
farm in. This is not expected to occur prior to 30 June 2020.
(iii) During the reporting period the Company borrowed GBP 100,000 from Align
Research Limited. On 16 December 2019 the Company entered into an option
agreement with the owner of Align Research Limited to acquire a 90% interest in
Tectonic South Africa Pty Ltd (renamed Deep Blue Minerals Pty Ltd) for GBP
100,000. Consideration is to be met by offsetting the GBP 100,000 loan from
Align Research Limited to Tectonic Gold Plc.
The Directors consider the carrying amount of short-term borrowings
approximates to their fair value.
22. EMPLOYEE BENEFITS
CONSOLIDATED COMPANY
2019 2019 2019 2018
GBP GBP GBP GBP
Current
Annual Leave 14,174 14,892 - -
Non-Current
Long Service Leave 11,363 10,120 - -
23. ISSUED CAPITAL
Jun-19
GBP
697,562,746 fully paid 0.001p ordinary shares (2018: 687,562,746 fully 6,100,615
paid ordinary shares)
Fully Paid Ordinary Shares
Reconciliation of share issued during the reporting period is set out below:
Number of GBP
shares
Balance at the beginning of the 176,929,413 17,693
reporting period for Tectonic Gold
Shares issued to Directors prior to 3,333,333 333
completion of the reverse acquisition
Shares issued prior to reverse 30,800,000 3,080
acquisition
Total issued capital of Tectonic Gold Plc prior 211,062,746 21,106
to completion of the reverse acquisition
25 June 2018: Shares issued to Signature Gold 450,000,000 45,000
vendors on reverse acquisition
25 June 2018: Issue and proceeds from 26,500,000 2,650
shares issued pursuant to the Share
Offer at GBP0.02 per share
Balance as at 30 June 2018 687,562,746 6,099,615
1 June 2019 Issue of shares 10,000,000 1,000
Balance as at 30 June 2019 697,562,746 6,100,615
Each ordinary share carries the right to be one vote at shareholders' meetings
and is entitled to participate in any dividends or other distributions of the
Company.
A prior year adjustment has been recorded due to an error found in the
accounting treatment for the reverse acquisition during the 2019 audit. The
effect on the share capital is disclosed in Note 5.
24. RESERVES
CONSOLIDATED COMPANY
2019 2018 2019 2018
GBP GBP GBP GBP
Foreign Currency Translation Reserve
Opening balance (58,251) - - -
Foreign currency translation (34,430) (58,251) - -
Closing balance (92,681) (58,251) 95,098 -
Warrant Reserve
Opening balance 95,098 - 95,098 454,527
Additions - - - (359,429)
Closing balance 95,098 95,098 95,098 95,098
Reverse Takeover Reserve
Opening balance 57,976,182 - - -
Additions - 57,976,182 - -
Closing balance 57,976,182 57,976,182 - -
The foreign currency translation reserve is used to record exchange differences
arising from the translation of the financial statements of foreign
subsidiaries.
The option reserve represents the fair value of options granted to employees
and suppliers for services provided to the Group. The fair value of options is
expensed over the vesting period or during the period in which the services are
received.
The reverse takeover reserve represents the adjustment needed to reflect the
reverse takeover of Signature Gold which was completed on 25 June 2018.
25. CASH FLOW INFORMATION
For the purpose of presentation in the statement of cash flows, cash and cash
equivalents includes cash on hand, deposits held at call with financial
institutions, other short?term, highly liquid investments with original
maturities of three months or less that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in
value.
Cash and cash equivalents at the end of the financial year as shown in the
statement of cash flows is reconciled to the related items in the statement of
financial position as follows:
CONSOLIDATED COMPANY
2019 2018 2019 2018
GBP GBP GBP GBP
Loss for the reporting period before (824,874) (3,277,549) (292,465) 302,478
taxation
Add/(deduct): Non-cash items
Depreciation and amortisation 1,338 1,659 - -
Impairment of exploration and 703,936 182,153 - -
evaluation expenditure
Bad debt expensed - 93,050 - -
Share based payment 30,000 - 30,000 -
Warrant and Option expired - - - (428,329)
Fair value of warrants issued to - 68,900 - 68,900
directors and staff and vested
Foreign exchange 24,296 (8,501) 23,654 8,328
Listing fee recognised on reverse - 2,582,872 - -
acquisition
Non-cash profit on disposal of 1,091 - - -
property, plant and equipment
Change in assets and liabilities net
of the effect of acquisitions and
disposals associated with business
combinations:
Increase in trade and other 71,879 - 77 -
receivables
Increase/(Decrease) in other assets (399) (47,176) 5,354 -
(Decrease)/Increase in trade (206,010) 172,443 27,096 48,486
creditors and accruals
Increase in provisions 1,325 3,593 - -
Net cash used in operating 197,418 (228,556) (206,284) (137)
activities
Non-cash financing and investing activities
There were no non-cash financing and investing activities during the year.
FINANCIAL INSTRUMENTS
Financial assets by category
The IFRS 9 categories of financial assets included in the Statement of
financial position and the headings in which they are included are as follows:
COMPANY
CONSOLIDATED
2019 2018 2019 2018
GBP GBP GBP GBP
Financial assets at amortised cost:
Cash and cash equivalents 34,875 149,397 22,846 11,130
Financial assets at fair value 40,122 40,122 40,122 40,122
through profit and loss
Trade and other receivables 7,913 359,869 - 280,077
82,910 549,388 62,968 331,329
Financial liabilities by category
The IFRS 9 categories of financial liability included in the Statement of
financial position and the headings in which they are included are as follows:
COMPANY
CONSOLIDATED
2019 2018 2019 2018
GBP GBP GBP GBP
Financial liabilities at amortised
cost:
Trade and other payables 291,593 497,603 62,907 131,060
Borrowings 286,793 168,868 50,000 -
578,386 666,471 112,907 131,060
Capital risk management
The Group manages its capital to ensure that it will be able to continue as a
going concern while maximising the return to stakeholders through the
optimisation of the debt and equity balance. The capital structure of the Group
consists of debt, (previously includes the borrowings) cash and cash
equivalents and equity attributable to equity holders of the Company,
comprising issued capital, reserves and accumulated losses, all as disclosed in
the Statement of Financial Position.
Financial risk management objectives
The Group is exposed to a variety of financial risks which result from both its
operating and investing activities. The Group's risk management is coordinated
by the board of directors and focuses on actively securing the Group's short to
medium term cash flows by minimising the exposure to financial markets.
The main risks the Group is exposed to through its financial instruments are
credit risk, liquidity risk and market price risk.
Foreign currency risk management
The Company undertakes transactions denominated in foreign currencies. Hence,
exposures to exchange rate fluctuations arise. Since 25 June 2018. the
Company's major activity is now investment in Australia through its subsidiary
Signature Gold, bringing exposure to the exchange rate fluctuations of GBP/GBP
Sterling with both Australian Dollars.
Exchange rate exposures are managed within approved policy parameters. The
Company does not enter into forward exchange contracts to mitigate the exposure
to foreign currency risk as amounts paid and received in specific currencies
are expected to largely offset one another and the currencies most widely
traded are relatively stable.
The Directors consider the balances most susceptible to foreign currency
movements to be the net assets of Signature Gold for the Group and the
Investment Available for Sale for the Company.
CONSOLIDATED 2019 2018
AUD AUD
Net Assets of Signature Gold 2,252,911 3,162,010
COMPANY GBP GBP
2019 2018
Financial assets at fair value 40,122 40,122
through profit and loss
The following table illustrates the sensitivity of the value of the foreign
currency denominated assets in regard to the change in AUD exchange rates.
It assumes a +/- 15% change in the AUD/GBP exchange rate for the year ended 30
June 2019 (2018:15%).
Impact of exchange rate fluctuations
AUD AUD
IMPACT IMPACT
2019 2018
GBP GBP
Average movement in exchange rate 15% 15%
Change in equity
Increase in GBP value 187,048 277,004
Decrease in GBP value 187,048 277,004
Result for the period
Increase in GBP value 75,374 94,640
Decrease in GBP value 75,374 94,640
Exposure to foreign exchange rates varies during the year depending on the
volume and nature of foreign transactions. Nonetheless, the analysis above is
considered to be representative of the Group's exposure to currency risk.
Interest rate risk management
The Group's exposure to interest rates on financial assets and financial
liabilities is detailed in the liquidity risk management section of this note.
There are no long-term loans or short-term loans that carry any interest and
thus sensitivity analyses have not been provided on the exposure to interest
rates for both derivatives and non-derivative instruments during the year.
There would have been no effect on amounts recognised directly in equity.
Credit risk management
The Group's financial instruments, which are subject to credit risk, are
considered to be cash and cash equivalents and trade and other receivables, and
its exposure to credit risk is not material. The credit risk for cash and cash
equivalents is considered negligible since the counterparties are reputable
banks.
The Group's maximum exposure to credit risk is GBP82,910 (2018: GBP549,388)
comprising other receivables, investments and cash.
Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the Board of
Directors, which monitors the Company's short, medium and long-term funding and
liquidity management requirements on an appropriate basis. The Company manages
liquidity risk by maintaining adequate reserves, banking facilities and reserve
borrowing facilities. The Company's liquidity risk arises in supporting the
trading operations in the subsidiaries, which hopefully will start to generate
profits and positive cash-flows in the short term. However, as referred to in
Note 4 the Company is currently exposed to significant liquidity risk and needs
to obtain external funding to support the Company going forwards.
27. RELATED PARTY DISCLOSURES
Company
The remuneration of the Directors, who are the key management personnel of the
Group, is set out in Note 11.
Loans from the related parties are disclosed in Note 22.
Group
2019
During the reporting period,
(i) Deep Blue Minerals Pty Ltd borrowed GBP 68,124 from Brett Boynton. This
loan is unsecured, interest free and has no fixed term of repayment.
(ii) During the reporting period, Mr Brett Boynton advanced A$5,000 to
Signature Gold Pty Ltd. As at 30 June 2019, Mr Boynton had advanced a total
loan amount of A$25,000 (2018: $20,000) to the Company. This loan is interest
free and is not required to be repaid on or before 30 June 2020.
2018
The related party disclosures set out below are in respect of Signature Gold
which occurred during the reporting period and prior to the completion of the
acquisition of Tectonic Gold.
On 1 December 2017, pursuant to Shareholder approval received at the General
Meeting of Shareholders of Signature Gold held on 24 November 2017, Signature
Gold issued 5,436,264 fully paid shares in Signature Gold at an issue price of
A$0.175 per share to Directors (or their nominees) to settle existing loans and
liabilities. Details as follows:
o 492,857 fully paid ordinary shares were issued to Rae Natalie McLellan, a
related party of Anthony McLellan in full and final settlement of unpaid
director's fees owing to Anthony McLellan amounting to A$86,250;
o 262,189 fully paid ordinary shares were issued to Maplefern Pty Ltd, a
Company in which Bruce Fulton has an interest, in full and final settlement of
unpaid director's fees owing to Bruce Fulton amounting to A$45,883;
o 2,426,075 fully paid ordinary shares were issued to P.F.T.J. Pty Ltd, a
Company in which Peter Prentice has an interest, in full and final settlement
of unpaid consulting fees owing to Peter Prentice amounting to A$359,700 and an
amount of A$64,863 lent by Peter Prentice to the Company. The total
consideration was A$424,563.
o 1,227,429 fully paid ordinary shares were issued to Tickhill Holdings Pty
Ltd, a Company in which Brett Boynton has an interest, in full and final
settlement of a$214,800 lent by Brett Boynton to the Company.
o 277,714 fully paid ordinary shares were issued to Brett Boynton in full and
final settlement of unpaid director's fees owing to Brett Boynton amounting to
A$48,600;
o 250,000 fully paid ordinary shares were issued to Maplefern Pty Ltd, a
Company in which Bruce Fulton has an interest, as directed by Brett Boynton, in
full and final settlement of unpaid director's fees owing to Brett Boynton
amounting to A$43,750; and
o 250,000 fully paid ordinary shares were issued to each of Jonathan Robbeson
and Anne Adaley as directed by Brett Boynton, in full and final settlement of
unpaid director's fees owing to Brett Boynton amounting to A$87,500.
The number of shares held in Signature Gold by each director including their
personally related parties as at 25 June 2018 and then acquired buy Tectonic
Gold are set out below.
There were no shares granted to related parties during the reporting period as
compensation for services rendered.
Balance at the Shares Shares transferred Balance at
Name start of the acquired (i) to Tectonic Gold the end of
year Plc(ii) the year
Brett Boynton 22,855,000 1,505,143 (24,360,143) -
Bruce Fulton 833,333 512,189 (1,345,522) -
John Hewson 700,000 - (700,000) -
Anthony - 492,857 (492,857) -
McLennan
Peter 20,625,000 2,426,075 (23,051,075) -
Prentice
(i) On 1 December 2017, the Company allotted fully paid ordinary shares as
set out in the table above at an issue price of A$0.175 per share to Directors
(or their nominees) in settlement of amounts owing to Directors as approved by
shareholders at the General Meeting held on 24 November 2017 (refer above for
further detail).
(ii) On 25 June 2018, Tectonic Gold Plc acquired 100% of the issued capital
of Signature Gold.
28. CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES
Exploration Lease Expenditure Commitments
In order to maintain the Group's tenements in good standing with Queensland
Mines and Energy in Australia, the Group may be required to incur a minimum
exploration expenditure under the terms of each licence. At the time of license
renewal Signature Gold Pty Ltd submitted a proposed expenditure plan which
included the commitments outlined below, however, as a result of the impact of
COVID-19 the Queensland State Government has suspended tenement rentals and is
allowing for variations to the minimum expenditure requirements. As
restrictions currently make any exploration activities extremely difficult, the
Company plans to take advantage of the allowance for variations and will
significantly reduce the expenditure commitment for 2019 and beyond. Signature
Gold Pty Ltd has applied for A$200,000 in exploration funding under the current
Queensland State Government exploration incentive scheme. Management will
review the expenditure following the outcome of this application. It is likely
that the granting of new licences and changes in the terms of each licence will
continue to change the expenditure commitment from time to time. The figures
depicted below highlight the committed expenditures prior to COVID-19
variations being sought and may be adjusted as discussed above.
2019 2018
GBP GBP
Payable:
- within one year 312,652 468,146
- later than one year but not later than five years 937,204 1,353,021
1,249,856 1,821,167
29. EVENTS AFTER THE REPORTING PERIOD
(i) Following the successful application for renewed status for 2019 under
the Australian Federal Government Research and Development Tax Incentive, the
Group engaged Research and Development Tax specialists RSM Australia (RSM) to
complete an assessment of the 2019 claim.
On 22 August 2019, the Company obtained a loan for A$219,129 at an annual
interest rate of 15% per annum and repayable by no later than 30 November 2019.
The loan was secured against the Research and Development refund. A$279,789
was received by the Company on 19 November 2019 and the loan repaid in full.
(ii) On the 2nd of September 2019 the Company announced the sales of its 2.5%
royalty interest in Bass Metals' Graphmada graphite mine to Silverstream SEZC
for a consideration of up to A$550,000 in cash and convertible notes. The
Company received a CAD$250,000 one year 5% unsecured convertible note maturing
on 27 August 2020 with the balance of the consideration due in cash subject to
performance milestones.
(iii) The Company sold its holding in Tirupati Graphite Plc on 4 November 2019
for which it received GBP86,844.
(iv) On 11 March 2020, the World Health Organisation ("WHO") declared the
Coronavirus disease 2019 (COVID-19) a pandemic. The pandemic has adversely
affected the global economy, including an increase in unemployment, decrease in
consumer demand, interruptions in supply chains, and tight liquidity and credit
conditions. Consequently, governments around the world have announced monetary
and fiscal stimulus packages to minimise the adverse economic impact. However,
the COVID-19 situation is still evolving, and its full economic impact remains
uncertain.
The Company has several assets where the value may be impacted by COVID-19. At
the date these financial statements were approved by the Directors the extent
of the impact COVID-19 on the Company's assets cannot be reasonably estimated
at this time.
The pandemic has impacted the Company's operations with Government mandated
bans on mass gatherings and social distancing measures resulting in disruption
to the Company's operations, this disruption is expected to negatively impact
the ability for the Company to conduct drilling and its parent entity's ability
to raise capital, refer Going Concern Note 2.
The Directors and management are continually monitoring and managing the
Company's operations closely in response to COVID-19 however the extent of the
impact COVID-19 may have on the Company's future liquidity, financial
performance and position and operations is uncertain and cannot be reasonably
estimated at the date these financial statements were issued.
Other than as stated elsewhere in this report, Directors are not aware
of any other matters or circumstances at the date of this report that have
significantly affected or may significantly affect the operations, the results
of the operations or the state of affairs of the Company in subsequent
financial years.
The Directors of the Company accept responsibility for the contents of this
announcement.
For further information, please contact:
Tectonic Gold plc +61292417665
Brett Boynton
Sam Quinn
www.tectonicgold.com
@tectonic_gold
Ends
END
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