TIDMALBA
RNS Number : 1205M
Alba Mineral Resources PLC
19 May 2022
Alba Mineral Resources plc
("Alba" or the "Company")
Final Results
Alba Mineral Resources plc (AIM: ALBA) is pleased to announce
its Final Results for the year ended 30 November 2021.
OVERVIEW
Multiple projects advanced in the UK and Ireland
-- Clogau-St David's Gold Mine
-- Circa 3,500 metres drilling undertaken from surface and
underground since 2018, just under half of which was done during
2021
-- Drilling resulted in identification of high-priority
development targets, including discovery of Upper Lode in
Llechfraith Payshoot and New Branch Lode in Main Lode System
-- Ongoing discussions with Natural Resources Wales to dewater Llechfraith Shaft
-- Waste tip returned elevated gold grades of up to 9.89 g/t
from initial sampling programme in June 2021 and up to 11.35 g/t
from bulk sample taken post year end
-- Estimated up to 4,000 tonnes of fine material could be
available for processing from waste tip
-- Dolgellau Gold Exploration Project
-- Granted additional exclusive mineral exploration licence for a further six years
-- Refined existing regional geological model into six primary
gold targets for follow-up investigation
-- Identified new high-grade regional gold target, Hafod Owen,
with grab samples grading up to 24 g/t
-- Limerick Base Metals Project
-- Identified three principal exploration target areas for
follow-up exploration activities, with exploration drilling planned
to commence H2 2022
-- Gwynfynydd Gold Mine
-- Undertook work comprising digitisation of a mine plan and 3D
modelling, stream sediment sampling, and data compilation
Investee companies making excellent progress
-- GreenRoc Mining plc ("GreenRoc") (Alba: 54% interest), which
is developing critical mineral projects in Greenland:
-- Amitsoq Graphite Project -
o Maiden Resource declared at Amitsoq Island Deposit of 8.28 Mt
at an average grade of 19.75%, giving a total graphite content of
1.63Mt.
o Exploration Target increased to a tonnage range of 5-15 Mt at
a grade range of 18-22% Graphitic Carbon - to be tested by further
exploration drilling in 2022
-- Thule Black Sands Ilmenite Project -
o Phase 2 drilling completed in 2021, with significant upgrade
in existing Mineral Resource expected
o Key EIA/SIA contractors appointed, which will ultimately
provide basis for Mining Licence application
-- Horse Hill Oil Field (Alba: 11.765% interest) - UK based producing oil field
-- Environment Agency ("EA") granted full Production Permit
("PP") to the Operator, enabling production and water re-injection
operations and drilling of further development wells. Operator can
now proceed with conversion of Horse Hill-2z well into water
injector 2022, which would remove the need for costly
transportation and disposal of produced saline formation water.
Spin-out of Greenland assets to create value for Alba
-- Admission of GreenRoc to AIM in Q3 2021, raising over GBP5
million (before costs) and Alba disposing of its four Greenland
projects to GreenRoc for GBP6 million in shares, against a book
value of GBP2.7 million, such that Alba now owns 54% majority stake
in GreenRoc
-- Spin-out has created a Greenland-focused vehicle with the
sole purpose of fast-tracking GreenRoc's advanced graphite and
ilmenite projects through development and production
Focus on securing additional complementary assets
-- Continuing to evaluate potential new projects to strengthen portfolio
CHAIRMAN'S STATEMENT
Our overall objective is to unearth hidden value from previously
drilled or mined projects and to this end we are advancing multiple
projects in the UK and Ireland including the Clogau-St David's Gold
Mine, the Gwynfynydd Gold Mine, the Dolgellau Gold Exploration
Project, and the Limerick Base Metals Project. Additionally, we
hold significant stakes in two investee companies: GreenRoc Mining
plc ('GreenRoc'), a Greenland-dedicated listed vehicle, which we
spun out during the year to fast-track the development of its
advanced graphite and ilmenite projects; and Horse Hill
Developments Ltd ('Horse Hill'), a UK based oil producer.
Much of our energy has been focused on our most advanced asset,
the Clogau-St David's Gold Mine, where we hope to commence
commercial processing/production in the near future and take
advantage of the strong gold price. Notably, Welsh gold fetches a
premium over normal gold spot price, placing us in a strong
position to pursue commercialisation opportunities such as entering
into a JV/offtake with a luxury international brand or producing
gold coins/bars for investment.
Since mid-2018, we have undertaken circa 3,500 metres drilling
from surface and underground at Clogau, just under half of which
was done during 2021, resulting in the identification of several
high-priority development targets. New discoveries include the
Upper Lode in the Llechfraith Payshoot and the New Branch Lode in
the Main Lode System. As shareholders will be aware, Natural
Resources Wales ('NRW') turned down our permit application to
dewater the Llechfraith Shaft, but we remain hopeful of resolving
the outstanding issues and proceeding with the dewatering so that
we can access the Llechfraith Payshoot.
Notwithstanding this setback, having acquired and installed an
operating pilot processing plant in late 2020, we have used the
plant this year to process material from Clogau's historic waste
tip this coming year. The waste tip returned elevated gold grades
of up to 9.89 g/t from an initial sampling programme in mid-June
2021, and gold grades of up to 11.35 g/t from a second programme
post period end. Given the fine nature of the material that has the
potential to filter downwards, we are exploring options to take a
second bulk sample from the lower reaches of the waste tip that
could further strengthen the project's economic viability in tandem
with developing a mining plan. Current estimations of the
higher-grade portion of the dump indicate an in-situ tonnage of
approximately 11,000 tonnes, of which up to 4,000 tonnes of fine
material (<20mm) could be available for processing for gold.
We also made advances at our exploration licence which hosts the
Gwynfynyndd Gold Mine located north of Clogau, as well as other
exciting regional gold prospects, with work comprising digitisation
of a mine plan and 3D modelling, stream sediment sampling, and data
compilation including regional geophysics from the 1970s. We are
now laying the groundwork to advance plans for more exploration
work to define resources in previously unmined areas as well as
in-mine targets.
The wider 188 km2 Dolgellau Gold Exploration Project, where
there are some 300 historical workings and circa 11 past producing
gold mines including Clogau and Gwynfynydd, is equally exciting.
During the year, we were granted an additional exclusive mineral
exploration licence for a further six years in line with our
overall plan for continued regional exploration of the Dolgellau
Gold Field. Having previously undertaken an extensive regional
exploration campaign, including collecting and assaying circa 2,000
soil samples, our work in the year has refined the resulting data
into six primary gold targets for follow-up investigation. This
includes a 1.8 km long structure to the east of the Brintirion
Fault, which cuts through and displaces the lodes between the
Clogau and St David's workings, and a 2 km long target in the
north-east of the project area, previously partially tested by
trenching in late 2020.
A new high-grade regional gold target, Hafod Owen, was also
identified within the exploration licence in July 2021, with grab
samples grading up to 24 g/t. We are now planning a high-resolution
UAV (drone-based) aeromagnetic geophysical survey to pinpoint the
bedrock sources of geochemical anomalies and refine targets for
follow up groundwork including drilling.
As we move further into 2022, our Limerick Base Metals Project
is also gaining traction. Located in the Irish Ore Field, home to
some of Europe's largest zinc-lead projects, this project is
surrounded by active zinc-lead exploration projects including
Stonepark, Carricklittle and Bulgadden. We have identified three
principal exploration target areas for follow-up exploration
activities and are currently in the process of planning for
exploration drilling, which we hope will commence H2 2022.
A key event during the year was our successful spin-out listing
on AIM of our portfolio of Greenlandic assets. The new AIM-quoted
vehicle which now holds 100% of those assets, GreenRoc Mining plc,
is led by an experienced, Greenland-focused senior management team.
Post period end, GreenRoc announced the departure of CEO Kirk Adams
and that Director Lars Brünner would be taking over as interim CEO
pending confirmation of a permanent appointment. We are confident
that GreenRoc is well positioned for significant growth in the year
ahead. Alba has a 54% stake in GreenRoc.
GreenRoc's graphite and ilmenite projects are particularly
exciting:
-- Amitsoq, in southern Greenland, is one of the highest-grade
graphite deposits in the world. Post period end, having completed a
drill programme during 2021, GreenRoc announced a maiden Mineral
Resource at the Amitsoq Island Deposit of 8.28 million tonnes (Mt)
at an average grade of 19.75%, giving a total graphite content of
1.63 Mt. This includes a particularly high-grade contribution from
the Lower Graphite Layer of 3.67 Mt at a grade of 21.19%, for 0.775
Mt of contained graphite. The Exploration Target at the Amitsoq
Island Deposit has also increased to a tonnage range of 5-15 Mt at
a grade range of 18-22% Graphitic Carbon (Cg). GreenRoc is now in
the process of planning and procuring drilling services to drill
out the remaining extent of the Exploration Target area at the
Amitsoq Island deposit this summer, after which it is hoped to have
the resource basis to undertake a detailed feasibility study on the
deposit. Further upside is expected from the as yet undrilled
Kalaaq Deposit to the south of Amitsoq.
-- Thule Black Sands (or TBS) is a high-grade ilmenite project
in north-west Greenland, extensively drilled with 10km of
mineralised strike length and moving into the development phase.
With Phase 2 drilling completed in 2021 to provide the basis for a
Scoping Study, EIA/SIA and, ultimately, mining licence application,
we are hopeful of a significant upgrade in the quantum and
classification of the existing Mineral Resource at TBS.
Recent welcome news from the Horse Hill oil field, in which we
have an investment of 11.675% via our holding in Horse Hill
Developments Limited, is the grant of a full Production Permit
("PP") from the Environment Agency, enabling production and water
re-injection operations, incineration of waste gas,
maintenance/workovers and the drilling of further development wells
under a single permit, a move forward from the umbrella of testing
permits in place to date. We look forward to hearing of the
Operator's plans for enhancing productivity and delivering on the
inherent, and to date largely untapped, value of the Horse Hill Oil
Field.
As well as developing our existing assets and supporting our
investee companies, all with a view to moving from explorer to
developer/producer, we remain focused on securing additional
complementary assets that meet our requirements of being either
brownfield (ex-production) sites or advanced exploration
(previously drilled) assets. We will update the market in this
regard when appropriate.
Financial Review
The most significant financial event during the year ended 30
November 2021 was the group reorganisation and IPO to create the
new Greenland-focused, AIM listed group, GreenRoc Mining plc. As
Alba owns 54 per cent of the GreenRoc group after the IPO, GreenRoc
group is fully consolidated within Alba Group with a significant
non-controlling interest arising in the balance sheet.
GreenRoc paid Alba GBP6 million in shares before costs for the
Greenlandic projects, against a book value of GBP2.7 million, a
tangible vote of confidence in Alba's strategy to unearth hidden
value from previously drilled or mined projects. That market
valuation cannot be reflected in the balance sheet of the new Group
(as it is treated as intragroup profit and eliminated from the
accounts), but the benefits of the transaction to the Group are
clear with a cash injection of GBP5 million from the IPO to
progress the Greenland projects.
Outlook
Our objective remains to expose our shareholders to a continuous
stream of high impact activity, and in line with this we are
focused on ensuring 2022 builds on the successes we have had over
the past few years with multiple exploration and development
programmes underway or planned. We also anticipate a steady stream
of news flow from our investee companies, principally GreenRoc, as
it fast-tracks the development of its exciting projects in the
critical minerals space. As recent events in eastern Europe have
reminded us, the need for Britain, Europe and the US to ensure
ongoing security of supply of critical natural resources and to
phase out overreliance on any one producer state, is set to become
ever more pressing in the months and years ahead.
Our focus at Alba on near-term projects in safe jurisdictions
with multiple follow-up targets, access to existing infrastructure
and relatively short timelines to achieving value-enhancing
development milestones has served us well. We intend to build on
this going forward and while there is still much value to be
generated in our existing assets, we continue to evaluate potential
new projects to strengthen our portfolio further.
I look forward to providing shareholders with further updates on
our progress as we focus on ensuring the underlying value of our
assets and investments is more fully reflected in our share
price.
Finally, I would like to take this opportunity to thank the
Board and our management team for their continued dedication and
support over the course of the year. I look forward to continuing
our work in the year ahead as we focus on delivering on our
overriding objective, which is to generate significant value for
all our shareholders.
George Frangeskides
Executive Chairman
18 May 2022
EXTRACTS FROM THE STRATEGIC REPORT
FINANCIAL REVIEW
Income Statement
Group operating losses of GBP1,044,000 during the period reflect
the growth of the group this year. A new Board at GreenRoc Mining,
the newly created Greenland-focused subsidiary, plus the
appointment of a COO at Alba and other new permanent employees of
the group, mean increased staff costs. These new teams should
relieve the pressure on the legacy Alba team and ensure the rapid
development of the projects bringing commercial activities closer
to reality.
Additionally, administrative expenses to 30 November 2021,
although containing only two months of GreenRoc group, will
inevitably be higher due to the costs of running a second listed
entity and the advisory and exchange fees that necessitates.
At parent company level, the profit on disposal of the
Greenlandic subsidiaries highlights the success of the transaction
in realising value from the market for Alba's assets.
The significant exceptional cost in 2021 is the impairment of
the Group's investment in Horse Hill, an impairment of GBP615,000
in line with that published by the majority owner and operator, UK
Oil & Gas plc ("UKOG") in their recent results. There is of
course intrinsic value in the oil underground at Horse Hill, and we
look forward to any further developments there as they are reported
by UKOG since the recent announcement of grant of a full Production
Permit.
Balance sheet
Group net assets have increased to GBP12.9 million from GBP10
million at last year end. As stated above, the investment in HHDL
has been impaired to GBP3.4 million. The assets of GreenRoc Mining
plc, being the Greenlandic projects, are retained at book valuation
being capitalised exploration spend to date, not taking account of
the "market" valuation uplift arising when GreenRoc purchased them
for GBP6 million. This fair value uplift of GBP4m net of tax is
shown in GreenRoc's standalone published accounts but is deemed to
be intragroup profit and is eliminated in this group consolidation,
so that GreenRoc's project assets are shown at a lower value in
Alba's group balance sheet through accounting convention.
During the period significant capital project spend was made -
additions of GBP2.6 million across the Group, the majority being
cash outflows. Spend was principally on drilling and other
exploration at Clogau, and in two field programmes in Greenland
which were planned, executed and part funded by Alba before being
passed on to GreenRoc.
To have funded such extensive activity is testament to the
Group's focus on value-for-money and cash management.
CONSOLIDATED INCOME STATEMENT FOR THE YEARED 30 NOVEMBER 2021
Note 2021 2020
GBP'000 GBP'000
Other income 23 10
Administrative expenses 4 (1,067) (554)
Operating loss (1,044) (544)
Revaluation of financial liability 16 (180) -
Revaluation of investment 11 (615) (1,430)
Finance costs (1) (106)
------------- -------------
Loss for the year before tax (1,840) (2,080)
Taxation 7 - -
Loss for the year (1,840) (2,080)
============= =============
Attributable to:
Equity holders of the parent (1,699) (2,079)
Non-controlling interests (141) (1)
------------- -------------
(1,840) (2,080)
============= =============
Earnings per ordinary share
Basic and diluted 8 (0.027) pence (0.047) pence
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 30 NOVEMBER 2021
2021 2020
GBP'000 GBP'000
Income for the year (1,840) (2,080)
Items that may subsequently be reclassified
to profit or loss:
* Foreign exchange movements (1) (61)
Total comprehensive income (1,841) (2,141)
============== ========
Total comprehensive income attributable
to:
Equity holders of the parent (1,700) (2,140)
Non-controlling interests (141) (1)
(1,841) (2,141)
============== ========
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
30 NOVEMBER 2021
Note 2021 2020
GBP'000 GBP'000
Non-current assets
Property, plant and equipment 9 137 111
Intangible fixed assets 10 6,110 3,526
Investments - Horse Hill Developments
Limited 11 3,385 4,000
Total non-current assets 9,632 7,637
-------- -----------
Current assets
Trade and other receivables 13 178 1,196
Cash and cash equivalents 14 3,948 1,512
-------- -----------
Total current assets 4,126 2,708
-------- -----------
Current liabilities
Trade and other payables 15 (671) (257)
Financial liabilities 16 (221) (41)
Total current liabilities (892) (298)
-------- -----------
Net current assets 3,234 2,410
======== ===========
Net assets 12,866 10,047
======== ===========
Capital and reserves
Share capital 17 5,005 4,984
Share premium 9,877 9,360
Warrant reserve 1,425 1,287
Warrants to be issued reserve - 416
Dilution of ownership reserve 5 991 -
Other reserves 89 -
Retained losses (7,421) (6,153)
Foreign currency reserve 168 169
-------- -----------
Equity attributable to equity holders
of the parent 10,134 10,063
Non-controlling interests 18 2,732 (16)
Total equity 12,866 10,047
======== ===========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 30 NOVEMBER 2021
Share Share Warrant Warrants Dilution Other Retained Foreign Attributable Non-controlling Total
to be of currency to
capital premium reserve issued ownership reserves losses reserve equity interests
reserve reserve holders
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------- ------- ------- -------- --------- -------- -------- -------- ------------ --------------- -------
At 30 November
2019 4,583 7,128 723 - - - (4,274) 230 8,390 (15) 8,375
Loss for the
year - - - - - - (2,079) - (2,079) (1) (2,080)
Other
comprehensive
income - - - - - - - (61) (61) - (61)
------- ------- ------- -------- --------- -------- -------- -------- ------------ --------------- -------
Total
comprehensive
income for the
year - - - - - - (2,079) (61) (2,140) (1) (2,141)
Shares and
warrants
issued 240 2,301 745 416 - - - - 3,702 - 3,702
Shares issued
on conversion 161 137 - - - - (75) - 223 - 223
Share issue
costs - (206) - - - - - - (206) - (206)
Equity settled
share-based
payments - - 94 - - - - - 94 - 94
Transfer on
exercise or
expiry of
warrants - - (275) - - - 275 - - - -
------- ------- ------- -------- --------- -------- -------- -------- ------------ --------------- -------
Total
transactions
with owners 401 2,232 564 416 - - 200 - 3,813 - 3,813
At 30 November
2020 4,984 9,360 1,287 416 - - (6,153) 169 10,063 (16) 10,047
------- ------- ------- -------- --------- -------- -------- -------- ------------ --------------- -------
Loss for the
year - - - - - - (1,699) - (1,699) (141) (1,840)
Other
comprehensive
income - - - - - - - (1) (1) - (1)
------- ------- ------- -------- --------- -------- -------- -------- ------------ --------------- -------
Total
comprehensive
income for the
year - - - - - - (1,699) (1) (1,700) (141) (1,841)
Shares and
warrants
issued 7 162 416 (416) - - - - 169 - 169
Shares issued
in exchange
for ownership
interests (not
resulting in
change in
control) 14 355 - - - - - - 369 7 376
Equity settled
share-based
payments - - 153 - - - - - 153 - 153
Transfer on
exercise or
expiry of
warrants - - (431) - - - 431 - - - -
Dilution of
ownership (not
resulting in
change in
control) - - - - 991 - - - 991 2,806 3,797
Subsidiary
equity settled
share-based
payments - - - - - 89 - - 89 76 165
------- ------- ------- -------- --------- -------- -------- -------- ------------ --------------- -------
Total
transactions
with owners 21 517 138 (416) 991 89 431 - 1,771 2,889 4,660
At 30 November
2021 5,005 9,877 1,425 - 991 89 (7,421) 168 10,134 2,732 12,866
------- ------- ------- -------- --------- -------- -------- -------- ------------ --------------- -------
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEARED 30 NOVEMBER 2021
Note 2021 2020
GBP'000 GBP'000
Cash flows from operating activities
Operating loss (1,044) (544)
Loss on disposal 5 9 -
Fees settled in shares 32 12
Share based payment charges 237 94
Change in fair value of other investments - 11
Depreciation 9 5 -
Foreign exchange revaluation adjustment (1) (61)
Increase/(decrease) in creditors 386 (89)
Decrease/(increase) in debtors 13 (110) 13
Net cash used in operating activities (486) (564)
------- -------
Cash flows from investing activities
Payments for deferred exploration expenditure (2,544) (483)
Payments for tangible fixed assets (31) (26)
Net cash used in investing activities (2,575) (509)
------- -------
Cash flows from financing activities
Proceeds from the issue of shares and exercise of warrants 1,295 2,423
Costs of issue (72) (105)
Proceeds from the issue of shares and warrants - GreenRoc 5,075 -
IPO transaction costs (800) -
Proceeds from issue of convertible loan notes - 192
Finance expense (1) (37)
Repayment of short-term borrowings plus financing costs - (99)
Net cash generated from financing activities 5,497 2,374
------- -------
Net increase/(decrease) in cash and cash equivalents 2,436 1,301
Cash and cash equivalents at beginning of period 1,512 211
Cash and cash equivalents at end of year 14 3,948 1,512
======= =======
Significant non-cash transactions in the period not reflected
above are:
- Revaluation of the Group's and Company's investment in Horse
Hill Developments Limited, impairing the investment value by
GBP615,000 (2020: GBP1,430,000). The impairment of investment is
not included in operating costs so is not reflected in the cash
flow statement above. See Note 11.
- Group reorganisation and dilution of ownership as detailed in
Note 5, leading to creation of an NCI of GBP2,806,000 and a
Dilution of ownership reserve of GBP991,000.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARED 30 NOVEMBER
2021
1. ACCOUNTING POLICIES AND BASIS OF PREPARATION
Alba Mineral Resources plc is a public limited company
incorporated and domiciled in England & Wales, whose shares are
publicly traded on the AIM market of the London Stock Exchange plc.
The registered office address is 6(th) Floor 60 Gracechurch Street,
London, United Kingdom, EC3V 0HR. The principal accounting policies
applied in the preparation of these financial statements are set
out below. These policies have been applied consistently to all the
years presented.
a. Basis of preparation
These consolidated financial statements of Alba Mineral
Resources plc have been prepared in accordance with International
Financial Reporting Standards in conformity with the requirements
of the Companies Act 2006 ("IFRSs") as they apply to the Group for
the year ended 30 November 2021 and with the Companies Act 2006.
Numbers have been rounded to GBP'000.
The consolidated financial statements have been prepared on the
historical cost basis, save for the revaluation of certain
financial assets and liabilities at fair value.
The preparation of financial statements requires the use of
certain critical accounting estimates. It also requires management
to exercise its judgement in the process of applying the group's
accounting policies. The areas involving a higher degree of
judgement or complexity, or areas where assumptions and estimates
are significant to the consolidated financial statements, are
disclosed in Note 2.
New and amended Standards and interpretations effective at 1
December 2020
During the year, the Group adopted the following new and amended
IFRSs for the first time for the reporting period commencing 1
December 2020:
-- Amendments to IAS 1 and IAS 8 - Definition of material
-- Amendments to IFRS 3 - Definition of a business
-- Amendments to the Conceptual framework for Financial Reporting
There is no material impact on the financial statements
following the adoption of these new standards and
interpretations.
New standards, amendments, and interpretations not yet
effective
Certain new accounting standards and interpretations have been
published that are not mandatory for 30 November 2021 reporting
periods and have not been early adopted by the Group. These
standards include:
-- Interest Rate Benchmark Reform - IBOR 'phase 2' (Amendments
to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16) that addresses
issues that might affect financial reporting after the reform of an
interest rate benchmark including its replacement with an
alternative benchmark rate. These amendments are mandatorily
effective for periods beginning 1 January 2021.
-- IAS 37 - Onerous Contracts - Cost of Fulfilling a Contract
amending the standard regarding costs a company should include as
the cost of fulfilling a contract when assessing whether a contract
is onerous. These amendments are mandatorily effective for periods
beginning 1 January 2022.
-- IAS 16 - Property, Plant and Equipment - Proceeds before
Intended Use regarding proceeds from selling items produced while
bringing as asset into the location and condition necessary for it
to be capable of operating in the manner intended by management.
These amendments are mandatorily effective for periods beginning 1
January 2022.
-- IAS 1 - Presentation of Financial statements - The
classification of liabilities as current or non-current basing the
classification on contractual arrangements at the reporting date.
These amendments are effective for periods beginning 1 January
2023.
The Directors do not anticipate that the adoption of these
amendments will have a material impact on the financial statements
of the Company and the Group in the period of initial application
or in future reporting periods. Other amendments, standards and
interpretations are in issue, both endorsed and not yet endorsed,
but they are not relevant to the Group and as such they are not
commented on.
b. Going concern
Based on financial projections prepared by the Directors, the
Group's current cash resources are insufficient to enable the Group
to meet its recurring outgoings and projected exploration
expenditure for the entirety of the next twelve months. The
Directors have prepared 12-month cash flow forecasts to 31 May 2023
which take into account planned exploration spend, costs and
external funding. The need for external funding is a material
uncertainty that may cast doubt on the Group's ability to continue
as a going concern. At this stage as an explorer the Group does not
have a steady income stream and is reliant on external funding
sources such as capital raisings or asset transactions to fund
activities. The nature of these is ad-hoc and as such the Group
does not carry a cash balance sufficient for 12 months of
expenditure. However, the Board has a reasonable expectation that
the Group will continue to be able to meet its commitments for the
foreseeable future by raising funds when required from the equity
capital markets and based on the following:
-- The Group has a strong track record in sourcing external funding.
-- Forecasts contain a level of discretionary spend such that in
the event that cash flow becomes constrained action can be taken to
enable the Group to operate within available funding. The Group
demonstrated this during the Covid-19 pandemic when sourcing
capital was uncertain.
-- The Group and Company may also consider future joint venture
funding arrangements in order to share the costs of the development
of its exploration assets, or to consider divesting of certain of
its assets and realising cash proceeds in that way in order to
support the balance of its exploration and investment
portfolio.
For these reasons the Directors continue to adopt the going
concern basis of accounting in preparing the financial
statements.
c. Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company and companies controlled by the Company,
the Subsidiary Companies, drawn up to 30 November each year.
Control is recognised where the Company has the power to govern
the financial and operating policies of an investee entity so as to
obtain benefits from its activities. Subsidiaries are fully
consolidated from the date on which control is transferred to the
Group. They are deconsolidated from the date that control ceases.
The results of subsidiaries acquired or disposed of during the year
are included in the consolidated income statement from the
effective date of acquisition or up to the effective date of
disposal, where appropriate. Where necessary, adjustments are made
to the financial statements of subsidiaries to bring the accounting
policies used into line with those used by the Group. All
intra-group transactions, balances, income and expenses are
eliminated on consolidation.
Non-controlling interests in the net assets of consolidated
subsidiaries are identified separately from the Group's equity
therein.
Changes in ownership interests in subsidiaries without change of
control
Transactions with non-controlling interests that do not result
in loss of control are accounted for as equity transactions - that
is, as transactions with the owners in their capacity as owners.
The difference between fair value of any consideration paid and the
relevant share acquired of the carrying value of net assets of the
subsidiary is recorded in equity. Gains or losses on disposals to
non-controlling interests are also recorded in equity within the
dilution of ownership reserve.
Non-controlling interests consist of the amounts of those
interests at the date of the original business combination and the
minority's share of changes in equity since the date of the
combination.
d. Foreign currency
For the purposes of the consolidated financial statements, the
results and financial position of each Group entity are expressed
in pounds sterling, which is the presentation currency for the
consolidated financial statements.
In preparing the financial statements of the individual
entities, transactions in currencies other than the entity's
functional currency (foreign currencies) are recorded at the rates
of exchange prevailing at the dates of the transactions. At each
reporting date, monetary items denominated in foreign currencies
are retranslated at the rates prevailing at the reporting date.
Exchange differences arising are included in profit or loss for the
period.
For the purposes of preparing consolidated financial statements,
the assets and liabilities of the Group's foreign operations are
translated at exchange rates prevailing on the reporting date.
Income and expense items are translated at the average exchange
rates for the period. Gains and losses from exchange differences so
arising are shown through the Consolidated Statement of Changes in
Equity.
e. Share based payments
Share-based compensation benefits are made on an ad-hoc basis on
the recommendations of the Remuneration Committee or via the
Enterprise Management Incentive Scheme where the employee meets the
qualifying conditions. The fair value of warrants or options
granted is recognised as an employee benefits expense, with a
corresponding increase in the warrant reserve. The total amount to
be expensed is determined by reference to the fair value of the
options granted:
o including any market performance conditions (eg the entity's
share price)
o excluding the impact of any service and non-market performance
vesting conditions (eg profitability, sales growth targets and
remaining an employee of the entity over a specified time period),
and
o including the impact of any non-vesting conditions (eg the
requirement for employees to save or hold shares for a specific
period of time).
The total expense is recognised over the vesting period, which
is the period over which all of the specified vesting conditions
are to be satisfied. At the end of each period, the entity revises
its estimates of the number of options that are expected to vest
based on the non-market vesting and service conditions. It
recognises the impact of the revision to original estimates, if
any, in profit or loss, with a corresponding adjustment to the
warrant reserve.
f. Non-current assets
Intangible assets: Deferred exploration and evaluation costs
Pre-licence costs are expensed in the period in which they are
incurred. Expenditure on licence renewals and new licence
applications covering an area previously under licence are
capitalised in accordance with the policy set out below.
Once the legal right to explore has been acquired, exploration
costs and evaluation costs arising are capitalised on a
project-by-project basis, pending determination of the technical
feasibility and commercial viability of the project. Costs include
appropriate technical and administrative expenses. If a project is
successful, the related expenditures will be reclassified as
development and production assets and amortised over the estimated
life of the commercial reserves. Prior to this, no amortisation is
recognised in respect of such costs. When all licences comprising a
project are relinquished, a project abandoned, or is considered to
be of no further commercial value to the Company, the related costs
will be written off to administrative expense within profit or
loss. Deferred exploration costs are carried at historical cost
less any impairment losses recognised.
Where the Group has entered into a farm out agreement, the Group
does not record any expenditure made by the farmee on its account.
It also does not recognise any gain or loss on its exploration and
evaluation farm-out arrangements but redesignates any costs
previously capitalised in relation to the whole interest as
relating to the partial interest retained. Any cash consideration
received directly from the farmee is credited against costs
previously capitalised in relation to the whole interest with any
excess accounted for as a gain on disposal.
Where the Group enters into a farm in agreement, the Group
recognises all expenditure which it incurs under that agreement,
with the expenditure being either capitalised or expensed in
accordance with the policy detailed above.
Intangible assets: Development and production assets
Development and production assets are accumulated into cost
centres and represent the cost of developing the commercial
reserves and bringing them into production together with any
previously deferred exploration and evaluation.
On acquisition of development and production assets from a third
party, the asset will be recognised in the financial statements on
signature of the sale and purchase agreement, subject to
satisfaction of any substantive conditions within the
agreement.
Costs relating to each cost centre are depreciated on a unit of
production method based on the commercial proven reserves for that
cost centre. Changes in reserve quantities and cost estimates are
recognised prospectively. On disposal of any part
of a development and production asset, proceeds are credited to
the Statement of Comprehensive Income, less the percentage cost
relating to the disposal.
A review is performed for any indication that the value of the
development and production assets may be impaired. Where there are
such indications, an impairment test is carried out on the relevant
cost centre. Additional depletion is included within cost of sales
within the Statement of Comprehensive Income if the capitalised
costs of the cost centre exceed the associated estimated future
discounted cash flows of the related commercial oil and gas
reserves.
Property, plant and equipment
Land is shown at cost and is not depreciated as it is not a
wasting asset. The land owned by the Group is an integral part of
access to one of the Group's projects and as such its value is
reviewed annually as part of the impairment review of that project
value as a whole.
Plant and equipment is stated at historical cost less
accumulated depreciation and impairment. Historical cost includes
expenditure that is directly attributable to the acquisition of the
items.
Depreciation is calculated on a straight-line basis to write off
the net cost of each item of property, plant and equipment
(excluding land) over their expected useful lives as follows:
o Plant and equipment 10 years
The residual values, useful lives and depreciation methods are
reviewed, and adjusted if appropriate, at each reporting date. An
item of property, plant and equipment is derecognised upon disposal
or when there is no future economic benefit to the consolidated
entity. Gains and losses between the carrying amount and the
disposal proceeds are taken to profit or loss. Any revaluation
surplus reserve relating to the item disposed of is transferred
directly to retained profits.
Investment in subsidiaries: Investment in subsidiaries,
comprising equity instruments and capital contributions, are
recognised initially at cost less any provision for impairment.
g. Financial instruments
Financial assets and financial liabilities are recognised in the
statement of financial position when the Group becomes a party to
the contractual provisions of the instrument. The classification is
dependent on the business model adopted for managing the financial
assets and the contractual terms of the cash flows expected to be
derived from the assets.
The Group classifies its financial instruments as follows:
Financial assets
Trade and other receivables Amortised cost
Loans to subsidiaries (Company only) Amortised cost
Investments At fair value through profit
or loss (FVPL)
Financial liabilities
Trade and other payables Amortised cost
Borrowings Amortised cost
Other borrowings Amortised cost
Derivative financial instrument At fair value through profit
or loss (FVPL)
Trade and other receivables: Trade and other receivables are
held for the collection of contractual cash flows and are
classified as being measured at amortised cost. They are recognised
initially at fair value and subsequently measured at amortised cost
using the effective interest method less provision for
impairment.
Loans to subsidiaries: Long-term loans to subsidiaries, other
than capital contributions, are held for the collection of
contractual cash flows and are classified as being measured at
amortised cost, net of provision for impairment. Impairment is
initially based on the expected lifetime credit loss as applied to
the portfolio of loans. The loans are interest free and have no
fixed repayment terms. As such the loans are assessed as being
credit impaired on inception and lifetime expected credit losses
are recognised with the amount of provision being recognised in the
profit or loss.
A loan will be subject to impairment review if there is an
indicator of impairment, such as the impairment of the value of the
deferred exploration intangible asset within the relevant
subsidiary. A loan is fully impaired when the relevant subsidiary
recognises an impairment of its deferred exploration expenditure,
such that the subsidiary is not expected to be able to repay the
loan from its existing assets.
Investments: Investments in unlisted equity instruments whose
fair value cannot be reliably measured are recognised initially at
investment cost. Any shareholder loans made are included in the
investment cost. Where a value can be reliably measured the
investment is subsequently recognised at fair value through profit
and loss. Information about the methods and assumptions used in
determining fair value is provided in Note 11.
Trade and other payables: Trade and other payables are not
interest bearing and are recognised initially at fair value and
subsequently measured at amortised cost.
Derivative financial instrument
A derivative financial instrument is recognised for the 10% call
option over the remaining shares in the Clogau gold project not
owned by the Group. This has been valued based on management's best
estimate and classified as fair value through profit and loss so
that any future change in the valuation of the liability will be
recognised through the profit and loss account. See Note 16 to the
Accounts.
A 4% net smelter return royalty was also agreed as part of the
consideration. The Company has a buy-back right in respect of any
proposed sale of the royalty. No value has been attributed to this
right in these accounts as it cannot be quantified due to
uncertainty in reaching commercial production and what the
resulting royalty quantum would be likely to be
Borrowings: I nitially recognised at fair value net of any
transaction costs directly attributable to the issue of the
instrument. Such interest-bearing liabilities are then subsequently
measured at amortised cost using the effective interest rate
method. Interest expense includes initial transaction costs and any
premium payable on redemption, as well as any interest or coupon
payable while the liability is outstanding.
Liability components of convertible loan notes are measured as
described further below.
Other borrowings: recognised initially at fair value and
subsequently measured at amortised cost.
Convertible debt : The proceeds received on issue of the Group's
convertible debt are allocated into their liability and equity
components. The amount initially attributed to the liability
component equals the discounted cash flows using a market rate of
interest that would be payable on a similar instrument that does
not include an option to convert. Subsequently, the liability
component is measured at amortised cost until extinguished on
conversion or maturity of the bond. The balance of the proceeds is
allocated to the conversion option and is recognised within
shareholders' equity. (The Company issued a convertible loan note
during the prior period that that was fully converted prior inside
that reporting period).
Leases: The Group does not have any leases within the scope of
IFRS16.
h. Equity
Share capital represents the nominal value of equity shares,
both ordinary and preference.
Share premium representing the excess over nominal value of the
fair value of consideration received for equity shares, net of
expenses of the share issue.
Dilution of ownership reserve represents the difference between
the fair value of any consideration paid and the relevant share of
the fair value of net assets acquired in a dilutive transaction
where control is retained.
The nature and purpose of other reserves is shown in Note
19.
i. Taxation
The charge for taxation is based on the profit or loss for the
year and takes into account deferred tax . The tax expense for the
period comprises current and deferred tax. Tax is recognised in the
income statement, except to the extent that it relates to items
recognised directly in equity. In this case the tax is also
recognised directly in other comprehensive income or directly in
equity, respectively.
The current income tax charge is calculated on the basis of the
tax laws enacted or substantively enacted at the end of the
reporting period in the countries where the Company operates and
generates taxable income. Management periodically evaluates
positions taken in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation. It
establishes provisions where appropriate on the basis of amounts
expected to be paid to the tax authorities.
Deferred tax is the tax expected to be payable or recoverable on
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 or loss, and is accounted for
using the liability method.
Deferred tax assets are only recognised to the extent that it is
probable that future taxable profit will be available in the
foreseeable future against which the temporary differences can be
utilised.
Deferred income tax is recognised, using the liability method,
on temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts in the financial
statements. However, the deferred tax is not accounted for if it
arises from initial recognition of an asset or liability in a
transaction other than a business combination that, at the time of
the transaction, affects neither accounting nor taxable profit or
loss. Deferred income tax is determined using tax rates (and laws)
that have been enacted, or substantially enacted, by the end of the
reporting period and are expected to apply when the related
deferred income tax asset is realised, or the deferred income tax
liability is settled.
Deferred income tax assets and liabilities are offset when there
is a legally enforceable right to offset current tax assets against
current tax liabilities, and when the deferred income tax assets
and liabilities relate to income taxes levied by the same taxation
authority on either the taxable entity or different taxable
entities where there is an intention to settle the balances on a
net basis.
j. Segmental information
An operating segment is a distinguishable component of the Group
which is subject to risks and rewards that are different from those
of other segments. In the Group's current portfolio, the
geographical location of exploration projects provides the basis
for grouping into segments.
Operating segments are reported in a manner consistent with
internal reporting provided to the chief operating decision-maker.
The chief operating decision-maker, who is responsible for
allocating resources and assessing performance of the operating
segments, has been identified as the Board of Directors of the
Company.
2 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of the financial statements in conformity with
generally accepted accounting practice requires management to make
estimates and assumptions that affect the reported amounts of
assets and liabilities as well as the disclosure of contingent
assets and liabilities at the reporting date and the reported
amounts of revenues and expenses during the reporting period.
Actual outcomes could differ from those estimates.
Estimates and judgements are continually evaluated and are based
on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances. The areas of judgement that have the most
significant effect on the amounts recognised in the financial
statements are as follows:
i) JUDGEMENTS
Capitalisation of exploration and evaluation costs -
GBP2,584,000
The capitalisation of exploration costs relating to the
exploration and evaluation phase requires management to make
judgements as to the future events and circumstances of a project,
especially in relation to whether an economically viable extraction
operation can be established. In making such judgements, the
Directors take comfort from the findings from exploration
activities undertaken, the fact the Group intends to continue these
activities and that the Company expects to be able to raise
additional funding to enable it to continue the exploration
activities.
Impairment assessment of exploration and evaluation costs -
GBP6,110,000
At each reporting date, management make a judgment as to whether
circumstances have changed following the initial capitalisation and
whether there are indicators of impairment. If there are such
indicators, an impairment review will be performed which could
result in the relevant capitalised amount being written off to the
income statement.
Accounting for investment in Horse Hill Developments Limited -
GBP3,385,000
The Group and Company's investment in Horse Hill Developments
Limited ("HHDL") is in the form of equity and a shareholder loan.
However, the Directors judge that the loan is in substance part of
the equity investment as governed by the HHDL investment agreement.
As such the loan element of the investment is accounted for at fair
value with movements in fair value being taken to profit or loss
(FVTPL).
The Group and Company's shareholding in HHDL is less than 20%. A
director of the Company is also a director of HHDL but does not act
in an executive capacity. At the balance sheet date HHDL had a
majority shareholder with a 77.9% shareholding. The Directors judge
that the Company does not have significant influence over HHDL and
that it should not be equity accounted for as an associate.
Company only - Impairment assessment of investment in and loans
to subsidiaries - GBP7,811,000
Impairment charges for the year - release of provision
GBP454,000
In preparing the parent company financial statements, the
Directors apply judgement to decide if any, or all of the company's
investments in (and where applicable loans to) each of GreenRoc
Mining plc, Aurum Mineral Resources Limited, Dragonfire Mining
Limited group and GMOW Gwynfynydd Limited are impaired or not.
These companies have no source of funds other than their
shareholders and the ability of the companies to repay their
inter-company debt and for the Company to gain value from its
investments in the companies is dependent on the future success of
the companies' exploration activities. In undertaking their review,
the Directors consider the outcome of their impairment assessment
of the relevant licences as detailed above.
The Directors have used the Expected Credit Loss model to make a
general provision against intercompany loans receivable based on
historic credit losses and current data. In applying the expected
credit loss model, the directors have judged that the loans to the
subsidiaries were credit impaired on inception. See Note 12 for
further details.
ii) ESTIMATES
Carrying value of investment in Horse Hill Developments Limited
- GBP3,385,000
The Company's investment in Horse Hill Developments Limited is
carried at fair value, as, in the judgement of the Directors, it
has been possible to estimate a reliable fair value for the
investment. For further details of the valuation see Note 11.
Valuation of put and call option over 10% of Gold Mines of Wales
- GBP214,000
The Group has a put and call option over the 10% minority
shareholding in Gold Mines of Wales. That option becomes live on
the granting of planning permission for production or at an earlier
date by agreement. The option expires on 24 August 2028 and was
valued at GBP34,000 on the date of acquisition in 2018. Management
has categorised this contingent consideration as a derivative
financial instrument at fair value through profit or loss and has
estimated the value of the 10% as based on 10% of the accumulated
exploration spend on the project to date, being the approximate
basis that management would use to value the option should they
seek to exercise it.
3. ANALYSIS OF SEGMENTAL INFORMATION
The Group currently only has one primary reporting business
segment, exploration and development. The Board of the Company
evaluates the business on a sector basis, the two sectors being
mining and oil and gas. The group exploration assets and
investments along with capital expenditures are presented on this
basis below:
2021 2020
GBP'000 GBP'000
------- -------
Total assets
Exploration and development 6,247 3,637
Oil and gas 3,385 4,000
Current assets 4,126 2,708
------- -------
13,758 10,345
======= =======
Capital expenditure
Exploration and plant 2,615 502
======= =======
The Group's primary business activities operate in three
different geographical areas (and the Group has an investment in a
fourth area) and the group exploration assets and investments along
with capital expenditures are presented on the basis of
geographical segments below:
2021 2020
GBP'000 GBP'000
------- -------
Total assets
Republic of Ireland (fully impaired) - -
Greenland 3,451 1,687
England & Wales 10,307 8,658
------- -------
13,758 10,345
======= =======
2021 2020
GBP'000 GBP'000
Capital expenditure
Greenland 1,763 53
England & Wales 852 449
2,615 502
======= =======
The administrative expenditure in the income statement primarily
relates to central costs or exploration costs that cannot be
capitalised. During the period oil and gas investments were
revalued downwards by GBP615,000 (2020: GBP1,430,000).
4. EXPENSES BY NATURE AND AUDITOR REMUNERATION
Auditor's remuneration:
2021 2020
GBP'000 GBP'000
--------- -------
Current auditor (PKF Littlejohn LLP)
- Group audit services 35 -
- Subsidiary audit services 32 -
- Taxation advice 6 -
- Corporate finance services relating
to IPO (costs in equity) 60 -
- Taxation advise relating to IPO (costs
in equity) 12
Auditor's remuneration (previous auditor)
- Group audit services - 33
--------- -------
145 33
--------- -------
Tax and corporate finance services relating to the IPO were
shared with the minority shareholders of GreenRoc Mining plc and
respective shares of these costs are included within the Company's
investment in GreenRoc Mining plc and the NCI share of assets.
Expenses by nature:
2021 2020
GBP'000 GBP'000
Staff costs (including share based
payments and options) 628 255
Professional fees 260 243
Consultancy and exploration expenditure
not capitalised 108 83
Office, travel, PR, other 90 93
Costs of FX 7 (61)
Depreciation 5 -
Settlement of historic claims (31) (59)
--------- -------
Administrative expenses 1,067 554
========= =======
2021 2020
GBP'000 GBP'000
--------- -------
Other income
Government grants 7 10
Services provided 16 -
23 10
========= =======
5. ACQUISITIONS, DISPOSAL, STRUCTURE CHANGES AND DILUTION WITHOUT LOSS OF CONTROL
Disposal of Brockham oil and gas asset
In June 2021 the Company announced that it was disposing of its
5% licence interest in the Brockham oil field to the Operator,
Angus Energy. The consideration, in settlement of certain back
costs and a contribution toward eventual abandonment costs,
involved the payment by Alba to Angus of GBP32,000 plus VAT,
settled as to GBP6,400 in cash and GBP32,000 by the issue of shares
in Alba. The asset was fully written down in a prior period, and
the net impact of the transaction was a loss of GBP9,000 within
administrative expenses.
Acquisitions of non-controlling interests
On 21 July 2021 Alba announced the purchase of the
non-controlling interests in Obsidian Mining Limited and White Fox
Resources Limited, being 10% and 15% (49% with an agreed dilution
applied for non-funding) respectively. Alba paid a total of
GBP370,000 by the issue of shares for these non-controlling
interests.
Under IFRS 3, for fully consolidated entities where the parent
has control, any subsequent transactions in subsidiary equity
interests between the parent and non-controlling interests (both
acquisitions and disposals that do not result in a loss of control)
are accounted for as equity transactions.
Consequently, there was no remeasurement of the net assets of
the entities to fair value and the amounts paid are shown as
additions in Note 12.
Group structure changes - GreenRoc Mining plc
On 28 September 2021 Alba sold its 100% holdings in Obsidian
Mining Limited, White Eagle Resources Limited and White Fox
Resources Limited to GreenRoc Mining plc for gross consideration of
GBP5,950,000 in shares and GBP50,000 cash (offset against GBP50,000
unpaid on incorporation of that company).
As the Group did not lose control of the assets of the
subsidiaries this transaction was not treated as a disposal in the
consolidated accounts, and the fair valuation uplift accounted for
by GreenRoc Mining plc in its group accounts has been eliminated
within the Alba Group accounts.
The accounting for the transaction at Company level is shown
below:
Company accounts
GBP'000
Consideration - Fair value of shares in GreenRoc 5,950
Consideration - Cash 50
Transaction fees borne by Alba (500)
-----------------
5,500
Assets disposed of
Investment in subsidiaries (668)
Loans to subsidiaries - assigned (2,003)
Profit on intragroup disposal in company
income statement 2,829
-----------------
Dilution without loss of control
On the same date as the transaction above, GreenRoc Mining plc
issued further shares in an Initial Public Offering ("IPO") on the
AIM section of the London Stock Exchange to raise funds of GBP5.1
million. That transaction diluted Alba's holding in GreenRoc Mining
plc and generated a Non-controlling interest ("NCI"). Alba retains
54% of GreenRoc Mining plc and fully consolidates it.
Where control is retained, dilution/partial disposal is
accounted for in owners' equity and a specific reserve has been
created in the consolidated accounts for the movement generated by
the various consolidation entries.
6. DIRECTORS' EMOLUMENTS AND STAFF COSTS
During the period the Company had on average 10.1 (2020: 4.25)
employees each month, being the Directors (who are the key
management personnel) plus finance, geological and local site
staff. Where eligible, Directors and other staff accrue benefits
under a money purchase auto-enrolment scheme held in NEST.
Costs incurred by: 2021 2020
Alba Mineral GreenRoc Total Group Total Group
Resources Mining plc
plc
GBP'000 GBP'000 GBP'000 GBP'000
------------ ----------- ----------- -----------
Directors' remuneration
(see table below) 334 60 394 202
Directors' social security
costs 19 4 23 14
Staff costs
Salaries and wages 247 71 318 34
Share based payment charges 31 23 54 17
Social security costs 26 7 33 4
Defined contribution pension
scheme 5 1 6 1
Fees classified as consultancy (39) - (39) (17)
Costs recharged to projects (161) - (161) -
------------ ----------- ----------- -----------
Staff costs reported in
administrative expenses
(Note 4) 462 166 628 255
============ =========== =========== ===========
Average number of employees 10.1 6* 10.9** 4.25
============ =========== =========== ===========
* GreenRoc employees from 28 September 2021 only, so this is an
average based on two months only.
**Group average number of employees includes five employees from
GreenRoc as one is already counted in Alba's employee numbers.
Directors' remuneration:
Fees Salaries Bonus Pension SBP Total Fees Salaries Pension SBP Total
2021 2021 2021 2021 2021 2021 2020 2020 2020 2020 2020
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------- -------- ------- ------- ------- ------- ------- -------- ------- ------- -------
G. Frangeskides 43 115 - 1 56 215 43 102 1 46 192
G. Frangeskides -
GreenRoc - 9 20 - 16 45 - - - - -
Fees capitalised (15) - - - - (15) (32) - - - (32)
M. Nott 6 18 - - 8 32 1 18 - 4 23
M. Lamboley 5 2 - - - 7 5 14 - - 19
L. Brünner - 19 2 - 25 46 - - - - -
L. Brünner -
GreenRoc - 5 10 - - 15 - - - - -
E. Henson - 23 - 1 25 49 - - - - -
Total 39 191 32 2 130 394 17 134 1 50 202
------- -------- ------- ------- ------- ------- ------- -------- ------- ------- -------
Note 24 gives further details of transactions with the
Directors.
During the year the Company granted warrants or options to the
Directors as follows:
2021 2020
No No
--------- -----------
George Frangeskides - 140,000,000
Michael Nott - 15,000,000
Manuel Lamboley - -
Lars Brünner 8,000,000 -
Elizabeth Henson 8,000,000 -
========= ===========
The warrants issued to Mr Brünner and Ms Henson have an exercise
price of 0.5 pence per share. The warrants vest(ed) as follows:
4,000,000 each on 8 June 2021 and 8 December 2021 and can be
exercised until 7 December 2023. Mr Brünner waived the rights to
his warrants when he stepped down from the Board.
The total estimated value of the share-based remuneration
provided to Directors was GBP50,000 (2020: GBP174,000). These
values were derived from a Black Scholes model as described in Note
17. The warrants were granted when the share price was 0.41 pence
per share and the warrants were valued at 0.031 pence. The warrant
value was high as a proportion of market price due to the historic
share price volatility.
7. INCOME TAXES
The UK corporation tax rate has been applied throughout the
workings below as substantially all of the losses during the year
(and historic losses in retained earnings) have been incurred by
the parent or other companies resident in the UK for tax purposes.
Using a weighted average rate would not change the effective tax
rate.
a) Analysis of charge in the period
2021 2020
GBP'000 GBP'000
-------- --------
United Kingdom corporation tax at 19% (2020:
19%) - -
Deferred taxation - -
======== ========
b) Factors affecting tax charge for the period
The tax assessed on the loss for the year before tax differs
from the standard rate of corporation tax in the UK which is 19%
(2020: 19%). The differences are explained below:
2021 2020
GBP'000 GBP'000
------- -------
Loss before tax (1,840) (2,080)
======= =======
Profit/ (loss) multiplied by standard rate of tax (350) (395)
Effects of:
Expenses not deductible 201 272
Deferred tax assets not recognised/capital allowances
not claimed 149 123
- -
======= =======
A deferred tax asset has not been recognised in respect of
timing differences relating to tax losses and accelerated capital
allowances, due to uncertainty that the potential asset will be
recovered. The aggregated losses in each of the Group companies
being Alba Mineral Resources plc and its subsidiaries as listed in
Note 12 amounted to GBP6,436,000 before adjustments required by
local tax rules and excluding losses on intra-group transactions
(2020: GBP6,153,000).
8. EARNINGS PER SHARE
The calculation of the basic loss per share is calculated by
dividing the consolidated loss attributable to the equity holders
of the Company by the weighted average number of ordinary shares in
issue during the year. The diluted earnings per share is the same
as the basic earnings per share, as warrants/options are not
dilutive due to the loss for the year.
2021 2020
GBP'000 GBP'000
Loss attributable to group shareholders (1,699) (2,079)
------------- -------------
Weighted average number of ordinary shares for
calculating basic loss per share 6,303,890,811 4,421,614,727
------------- -------------
Earnings per share (0.027) pence (0.047) pence
============= =============
9. PROPERTY, PLANT AND EQUIPMENT
Group Land Plant and equipment Total
GBP'000 GBP'000 GBP'000
------- ------------------- -------
Cost
At 1 December 2019 85 - 85
Additions - 26 26
------- ------------------- -------
At 30 November 2020 and at 1 December
2020 85 26 111
Additions - 31 31
------- ------------------- -------
At 30 November 2021 85 57 142
======= =================== =======
Accumulated Depreciation
At 30 November 2020 and at 1 December
2021 - - -
Charge for the year - (5) (5)
------- ------------------- -------
At 30 November 2021 - (5) (5)
======= =================== =======
Net Book Value at 30 November 2021 85 52 137
======= =================== =======
Net Book Value at 30 November 2020 85 26 111
======= =================== =======
The land is part of the Clogau gold project. At the year end the
land is held at cost. No depreciation is charged as it is not a
wasting asset. Plant is part of the Clogau gold project.
10. INTANGIBLE FIXED ASSETS
Exploration Development
Group and evaluation and production Total
GBP'000 GBP'000 GBP'000
--------------- --------------- -------
Cost
At 30 November 2019 3,785 374 4,159
Additions 476 - 476
--------------- --------------- -------
As 30 November 2020 4,261 374 4,635
Additions 2,584 - 2,584
Disposals - (374) (374)
As 30 November 2021 6,845 - 6,845
=============== =============== =======
Amortisation and impairment
At 30 November 2019 and 30 November
2020 (735) (374) (1,109)
Disposals - 374 374
--------------- --------------- -------
At 30 November 2021 (735) - (735)
=============== =============== =======
Net book value
At 30 November 2021 6,110 - 6,110
=============== =============== =======
At 30 November 2020 3,526 - 3,526
=============== =============== =======
The Group's intangible fixed assets relate to the Welsh gold
projects (Clogau, Dolgellau gold and Gwynfynydd) (GBP2,659,000),
the Limerick base metals project that is fully impaired and the
Greenland projects held by GreenRoc Mining plc (GBP3,451,000).
At the year end the amount of liabilities (being creditors and
accruals) relating to the exploration and evaluation assets was
GBP460,000.
The Development and Production asset disposed of during the
period was the Group's 5% share of the Brockham Oil Project, which
was fully written down in 2019. The disposal was made on 15 June
2021. Alba paid Angus Energy, the majority owner and operator of
the project, GBP32,000 by issue of shares. That amount comprised
Alba's share of the Plugging and Abandonment provision plus a
settlement of invoices due for Alba's share of running costs.
11. INVESTMENTS
Group and Company GBP'000
At 30 November 2019 5,430
Revaluation of investment (1,430)
-------
At 30 November 2020 4,000
Revaluation of investment (615)
-------
At 30 November 2021 3,385
=======
The above investment represents an investment in 18.1%* (2020:
18.1%) of the issued share capital of Horse Hill Developments
Limited ("HHDL") and associated loans to that company accruing
interest at variable rates linked to the Bank of England base rate.
Those loans and interest are treated as part of the overall
investment and as such are classified as fair value through the
profit and loss. Any interest due is subsumed within the overall
investment valuation (see Note 22).
HHDL is a private company with no stock quote. Historically
share transactions in the stock have provided bases for valuing the
investment. During the period under review there have been no share
transactions in HHDL stock nor transactions in licence
interests.
The majority owner and operator of HHDL, UK Oil & Gas plc
(UKOG) recently announced its results for year ended 30 September
2021 including an impairment of its investment in HHDL based on net
present value calculations (utilising an internally generated
depletion curve that was independently reviewed). Costs were based
on current costs less any anticipated savings. A long-term Brent
oil price of US$91/bbl was used being the spot rate at the time of
assessment, with a discount rate of 6.3% used being the weighted
average costs of capital of Horse Hill Developments Ltd, the
holding company of the producing well HH-1). There is inherent
uncertainty in any oil field valuation due to the uncertainty of
future oil price movements.
The Directors believe that the intrinsic value of the oil field
has not been diminished but recognise that UKOG's impairment of its
investment in HHDL is an indicator of impairment of the Group's
investment in HHDL and that UKOG has access to more information for
valuation purposes than the Group.
Accordingly the Directors derived an impairment charge mirroring
the per percentage point impairment applied in UKOG's Report and
Accounts, approximately GBP34,000 per percentage point held,
resulting in an impairment charge for the year of GBP615,000
against the prior year Level 3 valuation of the underlying oil
field (based on market transactions in comparable UK Onshore oil
& gas fields with primary inputs being: the market prices of
proven and contingent reserves in recent comparable transactions;
oil in place ("OIP") from the HHDL Field Development Plan; and an
estimated Recovery Factor, the two combined giving net recoverable
oil for HHDL which was then be compared to market values. The
Recovery Factor is the overall proportion of oil expected to be
extracted from the field and is calculated using a number of inputs
derived from the test production and published in the FDP).
This revised valuation is also a Level 3 valuation under the
IFRS 9 hierarchy, as defined in Note 22.
The registered office of HHDL is: The Broadgate Tower, 8th
Floor, 20 Primrose Street, London, EC2A 2EW.
*In a prior period the Company elected not to contribute its
share of a cash call. As a result the Company's shareholding could
be diluted but the impact would be minimal, the reduction being
less than 0.1% of the total issued share capital of HHDL.
12. INVESTMENTS IN SUBSIDIARY UNDERTAKINGS
Investments Capital Contributions Loans Total
Notes GBP'000 GBP'000 GBP'000 GBP'000
----------- --------------------- ------- -------
Company
At 30 November 2019 298 1,116 1,032 2,446
Additions - - 538 538
Foreign exchange movements - - 62 62
Provision for expected
credit losses - - (222) (222)
Impairment of intercompany
loan - - (69) (69)
----------- --------------------- ------- -------
At 30 November 2020 298 1,116 1,341 2,755
Additions - purchase
of minorities 5 370 - - 370
Additions - expenditure - - 1,965 1,965
Repayments - - (500) (500)
Disposals to another
group company (668) - (2,003) (2,671)
Additional holding in
subsidiary as consideration,
net of costs 5,500 - - 5,500
Foreign exchange movements - - (49) (49)
Adjustment to Expected
Credit Loss provision - - 417 417
Impairment of intercompany
loan - - 24 24
----------- --------------------- ------- -------
At 30 November 2021 5,500 1,116 1,195 7,811
=========== ===================== ======= =======
Upon adoption of IFRS 9 the company recognised a provision for
expected credit loss against the loans due from subsidiaries. These
loans are interest-free and have no agreed terms. For the purposes
of IFRS 9 the loans were assumed to be repayable on demand.
The loans are assessed as being credit impaired on inception as
the subsidiaries have no income other than the receipt of
inter-company funding and as the loans are primarily used to fund
the subsidiaries deferred exploration expenditure. The subsidiaries
would only be able to repay the loans if they can either sell their
exploration assets or develop them to the point at which the assets
generate cash flows, both of which would take time to achieve.
Therefore, at inception, it is known that the loans will not be
able to be repaid in accordance with the loan terms (that is, on
demand) and therefore they are assessed as being credit
impaired.
Historic and current data has been used to derive a probability
of default and this has been applied across the portfolio of
loans.
As reported in Note 5 to the Accounts, during the period the
Company disposed of three subsidiaries, whilst still retaining
control, to another subsidiary, thus reorganising the Group. Part
of the consideration for these subsidiaries was deemed as debt
consideration for assignment of GBP2m of intercompany loans shown
in the table above. The effective repayment of these loans to the
Company reduced the percentage probability of default across the
loan portfolio and reduced the total loan balance, so that a
significant proportion of the provision was released during the
period.
At 30 November 2021 the Company held the following interests in
subsidiary undertakings, which are included in the consolidated
financial statements:
Name of company Country of Holding Nature of Holding at Business
incorporation at 30 November holding 30 November
2021 2020
------------------------- ---------------- ---------------- ---------- -------------- ------------
Aurum Mineral Resources
Ltd Ireland 100% Direct 100% Exploration
Mauritania Ventures England &
Limited Wales 50% Direct 50% Non-trading
Dragonfire Mining England &
Limited Wales 100% Direct 100% Exploration
Gold Mines of Wales Holding
Limited Jersey 90% Indirect 90% Co.
GMOW (Holdings) England & Holding
Limited Wales 90% Indirect 90% Co.
GMOW (Operations) England &
Limited Wales 90% Indirect 90% Exploration
GMOW Gwynfynydd England &
Limited Wales 100% Direct 100% Exploration
GreenRoc Mining England &
plc Wales 54% Direct - Parent
Obsidian Mining England &
Limited Wales 54% Indirect 90% (direct) Exploration
White Eagle Resources England &
Limited Wales 54% Indirect 100% (direct) Exploration
White Fox Resources England &
Limited Wales 54% Indirect 51% (direct) Exploration
GreenRoc Mining plc was incorporated as a wholly-owned
subsidiary called Pole Star Resources plc in March 2021.
On 21 July 2021 Alba increased its holdings in Obsidian Mining
Limited and White Fox Resources Limited to 100% by acquired
non-controlling interests of 10% and 49% respectively.
On 28(th) September Alba transferred its 100% holdings in
Obsidian Mining Limited, White Fox Resources Limited and White
Eagle Resources Limited to GreenRoc Mining plc when it listed on
AIM in exchange for a 54% share of the enlarged share capital of
that company, retaining its interests indirectly.
The address of the registered office of Aurum Mineral Resources
Ltd is c/o Hugh Lennon Associates, Unit 8&10 Church View,
Cavan, Ireland.
The address of the registered office of Gold Mines of Wales
Limited is 2 Mark Clos, La Rue de la Croix, St Clement, Jersey.
All the other companies have their registered office at 6th
Floor, 60 Gracechurch Street, London EC3V 0HR.
Mauritania Ventures Limited has been treated as a subsidiary
undertaking because the Company exercises dominant influence over
the investment by virtue of having the casting vote at Board
meetings.
Dragonfire Mining Limited owns a 90% holding in Gold Mines of
Wales Limited, which company wholly owns GMOW (Holdings) Limited
and its wholly owned subsidiary GMOW (Operations) Limited.
Dragonfire Mining Limited holds a put and call option over the 10%
of shares in Gold Mines of Wales Limited that it does not own and
therefore consolidates these entities as though they are 100%
owned.
13. TRADE AND OTHER RECEIVABLES
Group Group Company Company
2021 2020 2021 2020
------- ------- ------- -------
Current GBP'000 GBP'000 GBP'000 GBP'000
Other debtors 159 39 88 27
Prepayments and accrued income 19 29 16 5
Called up share capital not paid - 1,128 - 1,128
------- ------- ------- -------
178 1,196 104 1,160
======= ======= ======= =======
The fair value of trade and other receivables approximates to
their book value. The called-up share capital not paid related to a
placing on 25 November 2020 and settlement was made on 1 December
2020.
14. CASH AND CASH EQUIVALENTS
Group Group Company Company
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
------- ------- ------- -------
Cash at bank and in hand 3,948 1,512 663 1,498
======= ======= ======= =======
The fair value of cash at bank is the same as its carrying
value.
15. TRADE AND OTHER PAYABLES
Group Group Company Company
2021 2020 2021 2020
Current GBP'000 GBP'000 GBP'000 GBP'000
------- ------- ------- -------
Trade creditors 481 68 80 68
Other creditors 13 27 13 26
Accruals and deferred income 177 162 74 162
------- ------- ------- -------
671 257 167 256
======= ======= ======= =======
The fair value of trade and other payables approximates to their
book value.
16. FINANCIAL LIABILITIES
The Company has no financial liabilities.
Group Other borrowings Derivative financial Total
instrument
Financial Liabilities GBP'000 GBP'000 GBP'000
---------------- -------------------- -------
At 30 November 2019 and 2020 7 34 41
Revaluation recognised in the
profit and loss - 180 180
At 30 November 2021 7 214 221
================ ==================== =======
The derivative financial instrument is recognition of a
liability in respect of the put and call option over the remaining
10% shareholding in the Clogau gold project which the Company does
not own. The option is not yet effective as it is contingent on
certain milestones in the project or earlier if by agreement with
the other party.
During the period the Group revalued the option based on its
original valuation at acquisition plus 10% of the cumulative
exploration spend on the Clogau-St David's project since that date.
This is the minimum management would expect to pay to acquire the
10% at 30 November 2021 should the option become effective and is
their best estimate. The option expires on 24 August 2028.
This is level 3 valuation under the hierarchy of IFRS 9 based on
management's best estimate - for details of the valuation hierarchy
see Note 22.
17. CALLED UP SHARE CAPITAL
2021 2021 2020 2020
Number Number
of shares GBP'000 of shares GBP'000
----------------------------- -------------- ------- -------------- -------
Issued, allotted and fully
paid
Ordinary shares of 0.1 pence - - - -
Ordinary shares of 0.01
pence 6,404,645,919 641 6,198,078,989 620
Deferred shares of 0.9 pence 93,070,100 838 93,070,100 838
B deferred shares of 0.09
pence 3,918,351,946 3,526 3,918,351,946 3,526
----------------------------- -------------- ------- -------------- -------
Total 10,416,067,965 5,005 10,209,501,035 4,984
============================= ============== ======= ============== =======
The Company's Articles do not specify authorised share capital.
All issued ordinary shares carry equal rights. The deferred shares
do not carry any rights to vote or dividend rights. In addition,
holders of deferred shares will only be entitled to a payment on a
return of capital or on a winding up of the Company after each of
the holders of the ordinary shares have received a payment of
GBP1,000,000 on each such share.
At the AGM on 28 April 2020 a resolution was passed to reduce
the par value of its ordinary shares to GBP0.0001. This resulted in
the creation of a new class of deferred shares at 0.09 pence. These
deferred shares have the same rights as the original class of
deferred shares (noted above). No new deferred shares were issued
during the year.
During the year the Company issued ordinary shares as
follows:
Ordinary Ordinary Deferred Share premium Total
shares of shares shares
0.01 pence
GBP'000 GBP'000 GBP'000 GBP'000
At 1 December 2020 6,198,078,989 620 4,364 9,360 14,344
June 2021 - disposal
of investment in Brockham
Oil Project settlement
of costs 12,407,910 1 - 31 32
July 2021 - acquisitions
of NCIs 143,856,920 14 - 356 370
July 2021 - shares
issued as payment for
project data 15,552,100 2 - 38 40
Various - issues of
shares upon exercises
of warrants 34,750,000 4 - 92 96
-------------
At 30 November 2021 6,404,645,919 641 4,364 9,877 14,882
============= ======== ======== ============= =======
Warrants Warrants
reserve
GBP'000
At 1 December 2020 997,253,974 1,287
Warrants issued, transferred from "Warrants to be
issued reserve" 170,000,000 416
Warrants issued as share based payments 16,000,000 50
Warrants vesting (counted in brought forward balance) - 103
Warrants exercised (34,750,000) (11)
Warrants expired (339,217,261) (420)
------------- --------
At 30 November 2021 809,286,713 1,425
------------- --------
Of the warrants outstanding at 30 November 2021, 701,286,713 are
vested and able to be exercised. The weighted average exercise
price of these vested warrants is 0.47 pence. Where warrants were
exercised in the year, the weighted average share price at the date
of exercise was 0.37 pence.
As at 30 November 2021 Alba had 809,286,713 warrants and options
outstanding:
No. of warrants Exercise price (pence) Final exercise date Vested
---------------- ----------------------- -------------------- --------------------------------------
60,000,000(3) 0.4 pence 13 January 2027 Awarded under the EMI scheme. Vested.
60,000,000(4) 0.42 pence 2 May 2028 Awarded under the EMI scheme. Vested
16,923,077 0.13 pence 4 September 2022 Vested
236,363,636 0.55 pence 20 September 2022 Vested
50,000,000(5) 0.16 pence 31 December 2023 Partially vested.
200,000,000(5) 0.16 pence 28 August 2030 Awarded under the EMI scheme.
Partially vested.
160,000,000 0.75 pence 23 November 2022 Vested.
10,000,000 0.375 pence 1 December 2022 Vested.
16,000,000(6) 0.5 pence 7 December 2023 Partially vested.
---------------- ----------------------- -------------------- --------------------------------------
809,286,713 At 30 November 2021
================
As at 30 November 2020 Alba had 997,253,974 warrants and options
outstanding:
No. of warrants Exercise price (pence) Final exercise date Vested
---------------- ----------------------- -------------------- --------------------------------------
20,000,000(1) 0.3 pence 27 March 2021 Vested
2,000,000 0.3 pence 28 May 2021 Vested
51,000,000(2) 0.3 pence 27 March 2021 Vested
15,000,000(3) 0.4 pence 27 March 2021 Vested
60,000,000(3) 0.4 pence 13 January 2027 Awarded under the EMI scheme. Vested.
113,904,761(4) 0.42 pence 27 March 2021 Vested
60,000,000(4) 0.42 pence 2 May 2028 Awarded under the EMI scheme. Vested
119,687,500 0.32 pence 13 November 2021 Vested
42,375,000 0.32 pence 21 November 2021 Vested
16,923,077 0.13 pence 4 September 2022 Vested
236,363,636 0.55 pence 20 September 2022 Vested
60,000,000(5) 0.16 pence 31 December 2023 Partially vested.
200,000,000(5) 0.16 pence 28 August 2030 Awarded under the EMI scheme.
Partially vested.
---------------- ----------------------- -------------------- --------------------------------------
997,253,974
================
(1,2,3,4,5,6) These warrants fall within the scope of IFRS 2
"Share-based Payments" and were issued in 2015, 2016, 2017, 2018,
2020 respectively. The fair value of the warrants issued in 2021
calculated using a Black Scholes model was GBP50,000. Within the
meaning of the IFRS 13 fair value hierarchies, this is a Level 2
valuation. It is based on a risk-free rate of 10 year gilts on the
date of grant, a dividend yield of nil, the life of the options,
the share price at the date of issue of the warrants and the strike
prices of the warrants. The volatility was derived from the quoted
prices for the Company's shares in the 12-month period prior to the
issue of the respective warrants.
18. NON-CONTROLLING INTERESTS
Mauritania White Fox Resources GreenRoc Total NCIs
Ventures Ltd Ltd Mining plc GBP'000
------------- ------------------- -----------
At 30 November 2019 (9) (6) - (15)
Loss after taxation - (1) - (1)
------------- ------------------- ----------- ----------
At 30 November 2020 (9) (7) - (16)
Acquisition of NCI - 7 - 7
NCI arising from IPO - - 2,806 2,806
Share of loss for
the year - - (141) (141)
Share of other reserves - - 76 76
------------- ------------------- ----------- ----------
At 30 November 2021 (9) - 2,741 2,732
------------- ------------------- ----------- ----------
In July 2021 the company acquired the 49% NCI in White Fox
Resources Limited. As there was no change of control this was
accounted for as an equity transaction. The ownership of the
subsidiary was transferred from Alba Company to GreenRoc Mining plc
during the period.
The Group recognises the non-controlling interest in GreenRoc
Mining plc at the non-controlling interest's proportionate share of
the entity's net identifiable assets as included in the Group
balance sheet. These differ from the assets presented in the
standalone GreenRoc Mining plc Report and Accounts due to
consolidation entries, including elimination of fair valuation
uplift generated in the restructuring transaction. This fair value
uplift was judged by management to be intragroup profit.
At the balance sheet date NCI hold 46.04% of the share capital
of GreenRoc Mining plc with Alba holding 53.96% (see Note 12).
Voting rights do not differ from ownership interests.
The Report and Accounts of GreenRoc Mining plc for the period
ended 30 November 2021 can be found on their website
www.GreenRocmining.com.
19. RESERVES
The following describes the nature and purpose of certain
reserves within owners' equity:
Share premium: Amounts subscribed for share capital in excess of
nominal value less costs of issue.
Foreign currency reserve: Gains/losses arising on retranslating
the net assets of the Group into pounds sterling.
Warrant reserve: Proceeds from the issue of extant warrants.
Warrants to be issued reserve: Proceeds from the issue of
warrants announced on 25 November 2020 but issued post-year end, on
1 December 2020.
Other reserves: The share of proceeds from the issue of warrants
by GreenRoc Mining plc attributable to the equity holders of the
group.
Reserve arising from partial disposal without loss of control:
Non-distributable gains arising from the Group's reorganisation and
dilution of its holding in the newly incorporated subsidiary via a
successful IPO.
20. CAPITAL COMMITMENTS
As at 30 November 2021, the Group / Company had commitments to
spend at least GBP105,000 in the calendar year 2022 on its
Greenland licences (2021: GBPnil due to COVID-19), being in
approximate terms the aggregate minimum expenditure commitments
required under the licences after taking into account credit from
2021 expenditure.
The Group is committed to spend EUR50,000 in the period to May
2022 under the terms of its exploration licence in Limerick,
Ireland.
21. CONTINGENT LIABILITIES
A 4% net smelter royalty agreement was agreed as part of the
acquisition of the Clogau gold project in 2018. The Group has no
obligations under this agreement until such time as gold is
produced and sold.
22. FINANCIAL INSTRUMENTS
The Group's financial instruments comprise investments, cash at
bank and various items such as debtors, loans and creditors. The
Group has not entered into derivative transactions nor does it
trade financial instruments as a matter of policy.
Credit risk
The Group's credit risk arises primarily from cash at bank,
debtors and the risk the counterparty fails to discharge its
obligations. As at 30 November 2020, debtors included GBP8,100 that
was past due but not impaired (2020: GBP8,100). Given the low
number and value of debtors management considers recoverability of
any overdue amount individually on an annual basis.
The Company's credit risk primarily arises from intercompany
debtors and this is reviewed annually in the course of reviewing
the Expected Credit Loss provision required under IFRS 9. See Note
12 for more details.
Funding risk
Funding risk is the possibility that the Group might not have
access to the financing it needs. The Group's continued future
operations depend on the ability to raise sufficient working
capital through the issue of equity share capital. The Directors
are confident that adequate funding will be forthcoming with which
to finance operations. The Board has a strong track record of
raising funds as required. Controls over expenditure are carefully
managed and activities planned to ensure that the Group has
sufficient funding.
Liquidity risk
Liquidity risk arises from the management of cash funds and
working capital. The risk is that the Group will fail to meet its
financial obligations as they fall due. The Group operates within
the constraints of available funds and cash flow projections are
produced and regularly reviewed by management.
At 30 November 2021 the management considers that the liquidity
risk is not material as sufficient cash is held to meet financial
liabilities to be settled in cash.
Future liquidity risk is addressed in Note 1 under the heading
"Going Concern".
Interest rate risk profile of financial assets
Excluding the investment in HHDL, the only financial assets
(other than short term debtors) are cash at bank and in hand, which
comprises money at call. The interest earned in the year was
negligible. The Directors believe the fair value of the financial
instruments is not materially different to the book value.
The investment in HHDL includes a loan element. Under an
investment agreement those loans attract interest. Loans plus
interest become payable once HHDL has surplus cash. As the Group /
Company treats the loan as held at fair value through profit and
loss, any interest credit is subsumed within the fair value
movement.
Foreign currency risk
The Group has an Irish subsidiary, which can affect the Group's
sterling denominated reported results as a consequence of movements
in the sterling/euro exchange rates. The Group also incurs costs
denominated in foreign currencies (primarily
Danish Krone) which gives rise to short term exchange risk. The
Group does not currently hedge against these exposures as they are
deemed immaterial and there is no material exposure as at the
year-end. No sensitivity analysis has been performed.
Market risk
Following the acquisition of the investment in Horse Hill
Developments Limited ("HHDL"), the Group is exposed to market risk
in that the value of the investment would be expected to vary
depending on the price of oil and the future cash calls will, to an
extent, depend on the revenue generated from oil produced from well
testing activities. For a review of the progress of the Horse Hill
project, please see the Chairman's Statement.
During the year under review the price of Brent crude oil
trended upwards from $47 at the start of the year to $70 at the 30
November 2021. At the time of writing the price is >$100 due to
the war in Ukraine. However, a sustained downturn in the price of
oil may have a materially adverse effect on the revenues generated
from the Horse Hill Oil Field. A material reduction in the market
value of HHDL shares can be expected to result in a proportionate
reduction in the carrying value of the Group's investment in
HHDL.
Categories of financial instrument
Group Group Company Company
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
------- ------- ------- -------
Financial assets
Investments at fair value through profit or loss:
Investment in HHDL (Note 11) 3,385 4,000 3,385 4,000
Held at amortised cost:
Trade and other receivables 159 1,167 88 1,155
Cash and cash equivalents 3,948 1,512 663 1,498
Intercompany receivables net of expected credit losses - - 1,195 1,340
------- ------- ------- -------
7,492 6,679 5,331 7,993
======= ======= ======= =======
Financial liabilities
Liabilities held at fair value through profit or loss:
Derivative financial instrument (Note 16) 214 41 - -
Held at amortised cost:
Trade and other payables 494 95 93 95
Other financial liabilities 7 7 - -
======= ======= ======= =======
715 143 93 95
======= ======= ======= =======
Valuation of financial instruments
Under IFRS 9 the valuation of financial instruments is
categorised based on the inputs used to generate the valuation as
follows:
Level 1: The fair value of financial instruments traded in
active markets (such as publicly traded derivatives, and equity
securities) is based on quoted market prices at the end of the
reporting period. The quoted market price used for financial assets
held by the group is the current bid price. These instruments are
included in level 1.
Level 2: The fair value of financial instruments that are not
traded in an active market (for example, over-the-counter
derivatives) is determined using valuation techniques which
maximise the use of observable market data and rely as little
as
possible on entity-specific estimates. If all significant inputs
required to fair value an instrument are observable, the instrument
is included in level 2.
Level 3: If one or more of the significant inputs is not based
on observable market data, the instrument is included in level 3.
This is the case for unlisted equity securities.
The Group's financial instruments by valuation method:
Group Group Company Company
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
------- ------- ------- -------
Financial assets
Investments at fair value through profit orf loss account:
Level 3 valuation - Investment in HHDL (Note 11) 3,385 4,000 3,385 4,000
Financial liabilities
Liabilities held at fair value through profit or loss:
Level 3 valuation - Derivative financial instrument (Note 16) 214 - - -
For more information on the valuation bases see the relevant
Notes referred to above.
Included in the value for HHDL are loans of GBP2,098,000 (2020:
GBP2,098,000) plus accrued interest. These were designated as fair
value through the profit and loss on recognition as they form part
of the Company's investment in Horse Hill Developments Limited. The
maximum exposure to credit risk of this financial asset at the end
of the reporting period is the carrying amounts of the loans. The
loans are not valued separately from the investment. No change in
fair value to date has been attributable to a change in credit
risk.
23. CAPITAL MANAGEMENT
The Group's objective when managing capital is to safeguard the
entity's ability to continue as a going concern and develop its
mining and exploration activities to provide returns for
shareholders. The Group's funding comprises equity and debt. The
Directors consider the Company's capital and reserves to be
capital. When considering the future capital requirements of the
Group and the potential to fund specific project development via
debt, the Directors consider the risk characteristics of all the
underlying assets in assessing the optimal capital structure.
24. RELATED PARTY TRANSACTIONS
All related party transactions have been conducted at arm's
length.
Fees charged by Directors are detailed below and also shown in
Note 6. "Directors' emoluments and staff costs".
Company
Transactions between the Company and its subsidiaries, which are
related parties of the Company, have been eliminated on
consolidation. The loan balances and transactions in the year with
the subsidiaries are disclosed in Note 12. Details of transactions
between the Company and other related parties are disclosed
below.
Group
Stirling Corporate Limited, a company which George Frangeskides,
a director of the Company, controls, charged the Group GBPnil
(2020: GBP3,000) for the provision of financial and administrative
services. As at the year-end no amounts were owed to Stirling
Corporate Limited.
Aetos Consulting Limited, a company which George Frangeskides, a
director of the Company, jointly controls, charged the Group fees
for consultancy services of GBP43,000 (2020: GBP43,000). Of these
fees, GBP15,000 represents work carried out specifically on the
advancement of the Group's project portfolio and have therefore
been capitalised. As at the year-end GBP44,000 (2020: GBPnil) was
owed to Aetos Consulting Limited and GBP43,000 was accrued for
invoices expected. After the year end GBP44,000 was settled in
cash. There are no terms and conditions associated with the
outstanding balance.
Woodridge Associates, a trading name of Michael Nott, a director
of the Company, charged the Group fees of GBP6,000 for consultancy
services during the year including GBP1,500 accrued at 30 November
2021.
25. EVENTS AFTER THE REPORTING PERIOD
Corporate
On 19 January 2022 the Company announced that George
Frangeskides had purchased approximately 10 million shares in the
Company, taking his holding to approximately 48 million shares.
Clogau Gold Project
On 9 December 2021 the Company announced the results of
multi-element assays performed on drill core from various drilling
activities.
On 11 December 2021 the Company announced that it had commenced
sampling at the historic waste rock dump at the Clogau St David's
gold mine. Assay results from this exercise were announced on 21
March 2022.
GreenRoc Mining plc - Amitsoq Graphite Project (54%
ownership)
On 3 December 2021 GreenRoc Mining announced the assay results
from the 2021 drilling programme on the Amitsoq graphite project,
planned and executed by Alba. Following on from these, a maiden
Mineral Resource was announced on 8 March 2022.
On 12 May 2022 GreenRoc Mining announced a significant tonnage
upgrade to the Amitsoq Island exploration target, increasing from a
tonnage range of 1.7 Mt-4.5 Mt at a grade range of 24-36% Graphitic
Carbon ('Cg') (as announced on 7 May 2021) to a tonnage range of
5-15 Mt at a grade range of 18-22% Cg.
Horse Hill Oil Project
On 18 February 2022 the Company announced that it had been
advised that the Court of Appeal had rejected attempts to overturn
the granting of production consent for the field and confirming
that consent had been granted lawfully.
On 5 May 2022 the Company announced that it had been advised
that Horse Hill oil field had been granted a full Production Permit
("PP") that enables production and water re-injection operations,
incineration of waste gas, maintenance/workovers and the drilling
of further development wells. To date, production at Horse Hill has
operated under the umbrella of prior testing consents which
excluded any ability to reinject produced saline formation water.
Following the PP grant the operator UKOG is undertaking a review of
the viability of reinstating Kimmeridge production and further new
Portland infill drilling locations.
On 13 May 2022 the Company announced that the North Sea
Transition Authority (formerly the Oil and Gas Authority) has
granted a one-year extension to the agreed Retention Area work
programme at Horse Hill's PEDL137 licence, containing the producing
Horse Hill oil field and its underlying Kimmeridge oil pool. The
extension grants an additional year in which to drill a second
Horse Hill Kimmeridge well, with the commencement of drilling to be
prior to 30th September 2023.
War in Ukraine
The war in Ukraine, which commenced after the balance sheet
date, has had no direct impact on the Group's activities nor does
management expect any material impact in future to its activities
or balances in the accounts. No adjustments are required to year
end balances. Indirect negative impacts could arise from an
increase in prices for goods and/or services in the future or from
reduced liquidity in capital markets leading to a tougher
fund-raising environment. Positive impacts could arise from
increased interest in UK oil production for fuel security and
markets looking to source key minerals from more stable
jurisdictions in the future.
Change in directorate - GreenRoc Mining plc
On 6 May 2022 GreenRoc Mining plc announced that the CEO was
stepping down and that an existing Non-Executive Director would be
acting as interim CEO until a new candidate is appointed.
26. PUBLICATION OF THE ANNUAL REPORT
The annual report will be available on the Company's website (
www.albamineralresources.com ) shortly.
ENDS
For further information, please visit
www.albamineralresources.com or contact:
Alba Mineral Resources plc
George Frangeskides, Executive Chairman +44 20 3950 0725
SPARK Advisory Partners Limited (Nomad)
Andrew Emmott +44 20 3368 3555
ETX Capital (Broker)
Thomas Smith +44 20 7392 1494
St Brides Partners (Financial PR)
Isabel de Salis / Catherine Leftley
alba@stbridespartners.co.uk
Alba's Projects and Investments
Mining Projects Operated Location Ownership
by Alba
Clogau (gold) Wales 90%
----------- ----------
Dolgellau Gold Exploration
(gold) Wales 90-100%
----------- ----------
Gwynfynydd (gold) Wales 100%
----------- ----------
Limerick (zinc-lead) Ireland 100%
----------- ----------
Investments Held by Alba Location Ownership
----------- ----------
GreenRoc Mining Plc (mining) Greenland 54%
----------- ----------
Horse Hill (oil) England 11.765%
----------- ----------
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END
FR SFWFSUEESESI
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May 19, 2022 06:15 ET (10:15 GMT)
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